Document:

EXHIBIT 10.4

                          SECURITIES PURCHASE AGREEMENT

     This Securities Purchase Agreement (this "Agreement") is dated as of March
16, 2004, among Riviera Tool Company, a Michigan corporation (the "Company"),
and each purchaser identified on the signature pages hereto (each, including its
successors and assigns, a "Purchaser" and collectively the "Purchasers").

     WHEREAS, subject to the terms and conditions set forth in this Agreement
and in accordance with and in reliance upon the exemption from securities
registration afforded by Section 4(2) of the Securities Act of 1933, as amended,
and the rules and regulations of the Commission promulgated thereunder (the
"Securities Act"), including Regulation D ("Regulation D"), and/or upon such
other exemption from the registration requirements of the Securities Act as may
be available with respect to any or all of the investments to be made hereunder,
the Company desires to issue and sell to each Purchaser, and each Purchaser,
severally and not jointly, desires to purchase from the Company in the
aggregate, $1,500,000 of shares of Common Stock and Warrants on the Closing
Date; and

     NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in this
Agreement, and for other good and valuable consideration the receipt and
adequacy of which are hereby acknowledged, the Company and each Purchaser agrees
as follows:

                                   ARTICLE I.
                                  DEFINITIONS

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

          "Action" shall have the meaning ascribed to such term in Section
     3.1(j).

          "Affiliate" means, with respect to the Company, any officer, employee,
     consultant OR director of the Company or any person owning any capital
     stock of the Company or any member of the immediate family of such officer,
     employee, consultant, director or stockholder or any corporation or other
     entity controlled by such officer, employee, consultant, director or
     stockholder, or a member of the immediate family of such officer, employee,
     consultant, director or stockholder which, in each case, is required to be
     disclosed in the SEC Reports. With respect to a Purchaser, any investment
     fund or managed account that is managed on a discretionary basis by the
     same investment manager as such Purchaser will be deemed to be an Affiliate
     of such Purchaser.

          "Closing" means the closing of the purchase and sale of the Common
     Stock and the Warrants pursuant to Section 2.1.

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          "Closing Date" means the Trading Day when all of the Transaction
     Documents have been executed and delivered by the applicable parties
     thereto, and all conditions precedent to (i) the Purchasers' obligations to
     pay the Subscription Amount and (ii) the Company's obligations to deliver
     the Securities have been satisfied or waived.

          "Closing Price" means on any particular date (a) the last reported
     closing price per share of Common Stock on such date on the Trading Market
     (as reported by Bloomberg L.P. at 4:15 PM (New York City time) as the last
     reported closing price for regular session trading on such day), or (b) if
     there is no such price on such date, then the closing price on the Trading
     Market on the date nearest preceding such date (as reported by Bloomberg
     L.P. at 4:15 PM (New York City time) as the closing price for regular
     session trading on such day), or (c) if the Common Stock is not then listed
     or quoted on the Trading Market and if prices for the Common Stock are then
     reported in the "pink sheets" published by the National Quotation Bureau
     Incorporated (or a similar organization or agency succeeding to its
     functions of reporting prices), the most recent price per share of the
     Common Stock so reported, or (d) if the shares of Common Stock are not then
     publicly traded the fair market value of a share of Common Stock as
     determined by an appraiser selected in good faith by the Purchasers of a
     majority in interest of the Shares then outstanding.

          "Commission" means the Securities and Exchange Commission.

          "Common Stock" means the common stock of the Company, no par value per
     share, and any securities into which such common stock may hereafter be
     reclassified.

          "Common Stock Equivalents" means any securities of the Company or the
     Subsidiaries which would entitle the holder thereof to acquire at any time
     Common Stock, including without limitation, any debt, preferred stock,
     rights, options, warrants or other instrument that is at any time
     convertible into or exchangeable for, or otherwise entitles the holder
     thereof to receive, Common Stock.

          "Company Counsel" means Greenberg Traurig, LLP with offices located at
     The Met Life Building, 200 Park Avenue, New York, New York 10166.

          "Disclosure Schedules" means the disclosure schedules of the Company
     delivered concurrently herewith.

          "Effective Date" means the date that the Registration Statement is
     first declared effective by the Commission.

          "Exchange Act" means the Securities Exchange Act of 1934, as amended,
     and the rules and regulations of the Commission promulgated thereunder.

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          "Exempt Issuance" means the issuance of (a) shares of Common Stock or
     options to employees, officers or directors of the Company pursuant to any
     stock or option plan duly adopted by a majority of the non-employee members
     of the Board of Directors of the Company or a majority of the members of a
     committee of non-employee directors established for such purpose, (b)
     securities upon the exercise of or conversion of any convertible
     securities, options or warrants issued and outstanding on the date of this
     Agreement, provided that such securities have not been amended since the
     date of this Agreement, (c) the Securities issued or issuable hereunder,
     (d) up to 300,000 warrants, in the aggregate, with terms no less favorable
     to the Company than the Warrants, including but not limited to, an exercise
     price not less than the Exercise Price (as defined in the Warrant),
     issuable in connection with any mezzanine financing with Hillstreet Fund
     II, L.P. ("Hillstreet")(or any such other investor with terms substantially
     similar to those proposed by Hillstreet) or (e) warrants issued to Granite
     Financial Group, Inc. in connection with this transaction to purchase up to
     20,000 shares of Common Stock.

          "FW" means Feldman Weinstein LLP with offices located at 420 Lexington
     Avenue, Suite 2620, New York, New York 10170-0002.

          "Intellectual Property Rights" shall have the meaning ascribed to such
     term in Section 3.1(o).

          "Liens" means a lien, charge, security interest, encumbrance, right of
     first refusal, preemptive right or other restriction.

          "Material Adverse Effect" shall have the meaning ascribed to such term
     in Section 3.1(b).

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

          "Per Share Purchase Price" equals $3.80, subject to adjustment for
     reverse and forward stock splits, stock dividends, stock combinations and
     other similar transactions of the Common Stock that occur after the date of
     this Agreement.

          "Person" means an individual or corporation, partnership, trust,
     incorporated or unincorporated association, joint venture, limited
     liability company, joint stock company, government (or an agency or
     subdivision thereof) or other entity of any kind.

          "Proceeding" means an action, claim, suit, investigation or proceeding
     (including, without limitation, an investigation or partial proceeding,
     such as a deposition), whether commenced or threatened.

          "Registration Rights Agreement" means the Registration Rights
     Agreement, dated as of the date of this Agreement, among the Company and
     each Purchaser, in the form of Exhibit A hereto.

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          "Registration Statement" means a registration statement meeting the
     requirements set forth in the Registration Rights Agreement and covering
     the resale by the Purchasers of the Shares and the Warrant Shares.

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

          "Rule 144" means Rule 144 promulgated by the Commission pursuant to
     the Securities Act, as such Rule may be amended from time to time, or any
     similar rule or regulation hereafter adopted by the Commission having
     substantially the same effect as such Rule.

          "SEC Reports" shall have the meaning ascribed to such term in Section
     3.1(h).

          "Securities" collectively means the Shares, the Warrants and the
     Warrant Shares.

          "Series A Warrant" shall mean the Series A Common Stock Purchase
     Warrant to be delivered pursuant to Section 2.2(a)(ii) in the form of
     Exhibit B attached hereto.

          "Series B Warrant" shall mean the Series B Common Stock Purchase
     Warrant to be delivered pursuant to Section 2.2(a)(v) in the form of
     Exhibit C attached hereto.

          "Shares" means the shares of Common Stock issued or issuable to each
     Purchaser pursuant to this Agreement.

          "Subscription Amount" means, as to each Purchaser, the amounts set
     forth below such Purchaser's signature block on the signature page hereto,
     in United States dollars and in immediately available funds.

          "Subsidiary" shall mean the subsidiaries of the Company, if any, set
     forth on Schedule 3.1(a) and any future direct or indirect subsidiaries of
     the Company.

          "Trading Day" means a day on which the Common Stock is traded on a
     Trading Market.

          "Trading Market" means the following markets or exchanges on which the
     Common Stock is listed or quoted for trading on the date in question: the
     American Stock Exchange, the New York Stock Exchange, the Nasdaq National
     Market or the Nasdaq SmallCap Market.

          "Transaction Documents" means this Agreement, the Warrants and the
     Registration Rights Agreement and any other documents or agreements
     executed in connection with the transactions contemplated hereunder.

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          "Warrants" means collectively the Series A Common Stock Purchase
     Warrants and the Series B Common Stock Purchase Warrants delivered to the
     Purchasers at the Closing in accordance with Section 2.2 hereof.

          "Warrant Shares" means the shares of Common Stock issuable upon
     exercise of the Warrants.

                                   ARTICLE II.
                                PURCHASE AND SALE

     2.1 Closing. On the Closing Date, each Purchaser shall purchase from the
Company, severally and not jointly with the other Purchasers, and the Company
shall issue and sell to each Purchaser, (a) a number of Shares equal to such
Purchaser's Subscription Amount divided by the Per Share Purchase Price and (b)
the Warrants as determined pursuant to Section 2.2(a). The aggregate
Subscription Amounts for Shares sold hereunder shall be $1,500,000. Upon
satisfaction of the conditions set forth in Section 2.2, the Closing shall occur
at the offices of FW or such other location as the parties shall mutually agree.

     2.2 Closing Conditions; Deliveries.

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

               (i) this Agreement duly executed by the Company;

               (ii) a copy of the irrevocable instructions to the Company's
          transfer agent instructing the transfer agent to deliver, on an
          expedited basis, a certificate evidencing a number of Shares equal to
          such Purchaser's Subscription Amount divided by the Per Share Purchase
          Price, registered in the name of such Purchaser;

               (iii) a copy of a Series A Warrant registered in the name of such
          Purchaser, pursuant to which such Purchaser shall have the right to
          acquire up to the number of shares of Common Stock equal to 40% of the
          Shares to be issued to such Purchaser at the Closing, with an exercise
          price equal to $5.07, subject to adjustment therein;

               (iv) a copy of a Series A Warrant registered in the name of such
          Purchaser, pursuant to which such Purchaser shall have the right to
          acquire up to the number of shares of Common Stock equal to 40% of the
          Shares to be issued to such Purchaser at the Closing, with an exercise
          price equal to $5.53, subject to adjustment therein;

               (v) a copy of a Series B Warrant registered in the name of such
          Purchaser, pursuant to which such Purchaser shall have the right to
          acquire up to the number of shares of Common Stock equal to 66.66% of
          the

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          Shares to be issued to such Purchaser at the Closing, with an
          exercise price equal to the Per Share Purchase Price, subject to
          adjustment therein;

               (vi) the Registration Rights Agreement duly executed by the
          Company; and

               (vii) a legal opinion of Company Counsel, in the form of Exhibit
          D attached hereto.

          (b) On the Closing Date, each Purchaser shall deliver or cause to be
     delivered to the Company the following:

               (i) this Agreement duly executed by such Purchaser;

               (ii) such Purchaser's Subscription Amount by wire transfer of
          immediately available funds to the account as specified in writing by
          the Company; and

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

          (c) All representations and warranties of the other party contained
     herein shall remain true and correct as of the Closing Date and all
     covenants of the other party shall have been performed if due prior to such
     date.

          (d) From the date hereof to the Closing Date, trading in the Common
     Stock shall not have been suspended by the Commission (except for any
     suspension of trading of limited duration agreed to by the Company, which
     suspension shall be terminated prior to the Closing), and, at any time
     prior to the Closing Date, trading in securities generally as reported by
     Bloomberg Financial Markets shall not have been suspended or limited, or
     minimum prices shall not have been established on securities whose trades
     are reported by such service, or on any Trading Market, nor shall a banking
     moratorium have been declared either by the United States or New York State
     authorities nor shall there have occurred any material outbreak or
     escalation of hostilities or other national or international calamity of
     such magnitude in its effect on, or any material adverse change in, any
     financial market which, in each case, in the reasonable judgment of each
     Purchaser, makes it impracticable or inadvisable to purchase the Shares at
     the Closing.

                                  ARTICLE III.
                         REPRESENTATIONS AND WARRANTIES

     3.1 Representations and Warranties of the Company. Except as set forth
under the corresponding section of the Disclosure Schedules which Disclosure
Schedules shall be deemed a part hereof, the Company hereby makes the
representations and warranties set forth below to each Purchaser:

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          (a) Subsidiaries. All of the direct and indirect subsidiaries of the
     Company are set forth on Schedule 3.1(a). The Company owns, directly or
     indirectly, all of the capital stock or other equity interests of each
     Subsidiary free and clear of any Liens, and all the issued and outstanding
     shares of capital stock of each Subsidiary are validly issued and are fully
     paid, non-assessable and free of preemptive and similar rights to subscribe
     for or purchase securities. If the Company has no subsidiaries, then
     references in the Transaction Documents to the Subsidiaries will be
     disregarded.

          (b) Organization and Qualification. Each of the Company and the
     Subsidiaries is an entity duly incorporated or otherwise organized, validly
     existing and in good standing under the laws of the jurisdiction of its
     incorporation or organization (as applicable), with the requisite power and
     authority to own and use its properties and assets and to carry on its
     business as currently conducted. Neither the Company nor any Subsidiary is
     in violation or default of any of the provisions of its respective
     certificate or articles of incorporation, bylaws or other organizational or
     charter documents. Each of the Company and the Subsidiaries is duly
     qualified to conduct business and is in good standing as a foreign
     corporation or other entity in each jurisdiction in which the nature of the
     business conducted or property owned by it makes such qualification
     necessary, except where the failure to be so qualified or in good standing,
     as the case may be, could not have or reasonably be expected to result in
     (i) a material adverse effect on the legality, validity or enforceability
     of any Transaction Document, (ii) a material adverse effect on the results
     of operations, assets, business, properties, prospects or condition
     (financial or otherwise) of the Company and the Subsidiaries, taken as a
     whole, or (iii) a material adverse effect on the Company's ability to
     perform in any material respect on a timely basis its obligations under any
     Transaction Document (any of (i), (ii) or (iii), a "Material Adverse
     Effect") and no Proceeding has been instituted in any such jurisdiction
     revoking, limiting or curtailing or seeking to revoke, limit or curtail
     such power and authority or qualification.

          (c) Authorization; Enforcement. The Company has the requisite
     corporate power and authority to enter into and to consummate the
     transactions contemplated by each of the Transaction Documents and
     otherwise to carry out its obligations thereunder. The execution and
     delivery of each of the Transaction Documents by the Company and the
     consummation by it of the transactions contemplated thereby have been duly
     authorized by all necessary action on the part of the Company and no
     further action is required by the Company in connection therewith other
     than in connection with the Required Approvals. Each Transaction Document
     has been (or upon delivery will have been) duly executed by the Company
     and, assuming this Agreement constitutes the valid and binding obligation
     of each Purchaser and when delivered in accordance with the terms hereof,
     will constitute the valid and binding obligation of the Company enforceable
     against the Company in accordance with its terms except as the
     enforceability thereof may be limited by bankruptcy, insolvency, fraudulent
     conveyance, reorganization, moratorium or similar laws relating to or
     affecting the rights of creditors' generally and by general equitable
     principles (regardless of

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     whether such enforceability is considered in a proceeding in equity or
     at law) and by an implied covenant of good faith and fair dealing.

          (d) No Conflicts. The execution, delivery and performance of the
     Transaction Documents by the Company, the issuance and sale of the Shares
     and the consummation by the Company of the other transactions contemplated
     thereby do not and will not (i) conflict with or violate any provision of
     the Company's or any Subsidiary's certificate or articles of incorporation,
     bylaws or other organizational or charter documents, or (ii) conflict with,
     or constitute a default (or an event that with notice or lapse of time or
     both would become a default) under, result in the creation of any Lien upon
     any of the properties or assets of the Company or any Subsidiary, or give
     to others any rights of termination, amendment, acceleration or
     cancellation (with or without notice, lapse of time or both) of, any
     agreement, credit facility, debt or other instrument (evidencing a Company
     or Subsidiary debt or otherwise) or other understanding to which the
     Company or any Subsidiary is a party or by which any property or asset of
     the Company or any Subsidiary is bound or affected, or (iii) subject to the
     Required Approvals, conflict with or result in a violation of any law,
     rule, regulation, order, judgment, injunction, decree or other restriction
     of any court or governmental authority to which the Company or a Subsidiary
     is subject (including federal and state securities laws and regulations),
     or by which any property or asset of the Company or a Subsidiary is bound
     or affected, or (iv) conflict with or violate the terms of any agreement by
     which the Company or any Subsidiary is bound or to which any property or
     asset of the Company or any Subsidiary is bound or affected; except in the
     case of each of clauses (ii) and (iii), such as could not have or
     reasonably be expected to result in a Material Adverse Effect.

          (e) Filings, Consents and Approvals. The Company is not required to
     obtain any consent, waiver, authorization or order of, give any notice to,
     or make any filing or registration with, any court or other federal, state,
     local or other governmental authority or other Person in connection with
     the execution, delivery and performance by the Company of the Transaction
     Documents, other than (i) filings required pursuant to Section 4.4 of this
     Agreement, (ii) the filing with the Commission of the Registration
     Statement, (iii) application(s) to each applicable Trading Market for the
     listing of the Shares and Warrant Shares for trading thereon in the time
     and manner required thereby, and (iv) the filing of Form D with the
     Commission and such filings as are required to be made under applicable
     state securities laws (collectively, the "Required Approvals").

          (f) Issuance of the Securities. The Shares and Warrants are duly
     authorized and, when issued and paid for in accordance with the Transaction
     Documents, will be duly and validly issued, fully paid and nonassessable,
     free and clear of all Liens (other than restrictions generally imposed on
     securities under U.S. federal, state or foreign securities laws or any
     restrictions on transfer provided for in the Transaction Documents). The
     Warrant Shares, when issued in accordance with the terms of the Transaction
     Documents, will be validly issued, fully paid and nonassessable, free and
     clear of all Liens (other than restrictions

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     generally imposed on securities under U.S. federal, state or foreign
     securities laws or any restrictions on transfer provided for in the
     Transaction Documents). The Company has reserved from its duly authorized
     capital stock the maximum number of shares of Common Stock issuable
     pursuant to this Agreement and the Warrants.

          (g) Capitalization. The capitalization of the Company is as described
     in the Company's most recent periodic report filed with the Commission. The
     Company has not issued any capital stock since such filing other than
     pursuant to the exercise of employee stock options under the Company's
     stock option plans, the issuance of shares of Common Stock to employees
     pursuant to the Company's employee stock purchase plan and pursuant to the
     conversion or exercise of outstanding Common Stock Equivalents outstanding.
     No Person has any right of first refusal, preemptive right, right of
     participation, or any similar right to participate in the transactions
     contemplated by the Transaction Documents. Except as a result of the
     purchase and sale of the Securities, there are no outstanding options,
     warrants, script rights to subscribe to, calls or commitments of any
     character whatsoever relating to, or securities, rights or obligations
     convertible into or exchangeable for, or giving any Person any right to
     subscribe for or acquire, any shares of Common Stock, or contracts,
     commitments, understandings or arrangements by which the Company or any
     Subsidiary is or may become bound to issue additional shares of Common
     Stock, or securities or rights convertible or exchangeable into shares of
     Common Stock. The issue and sale of the Securities will not obligate the
     Company to issue shares of Common Stock or other securities to any Person
     (other than the Purchasers) and will not result in a right of any holder of
     Company securities to adjust the exercise, conversion, exchange or reset
     price under such securities. All of the outstanding shares of capital stock
     of the Company are validly issued, fully paid and nonassessable, have been
     issued in compliance with all federal and state securities laws, and none
     of such outstanding shares was issued in violation of any preemptive rights
     or similar rights to subscribe for or purchase securities. No further
     approval or authorization of any stockholder, the Board of Directors of the
     Company or any other Person is required for the issuance and sale of the
     Shares. Except as disclosed in the SEC Reports, there are no stockholders
     agreements, voting agreements or other similar agreements with respect to
     the Company's capital stock to which the Company is a party or, to the
     knowledge of the Company, between or among any of the Company's
     stockholders.

          (h) SEC Reports; Financial Statements. The Company has filed all
     reports required to be filed by it under the Securities Act and the
     Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, for the
     two years preceding the date hereof (or such shorter period as the Company
     was required by law to file such material) (the foregoing materials,
     including the exhibits thereto, being collectively referred to herein as
     the "SEC Reports") on a timely basis or has received a valid extension of
     such time of filing and has filed any such SEC Reports prior to the
     expiration of any such extension. As of their respective dates, the SEC
     Reports complied in all material respects with the requirements of the

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     Securities Act and the Exchange Act, and none of the SEC Reports, when
     filed, contained any untrue statement of a material fact or omitted to
     state a material fact required to be stated therein or necessary in order
     to make the statements therein, in light of the circumstances under which
     they were made, not misleading. The financial statements of the Company
     included in the SEC Reports comply in all material respects with applicable
     accounting requirements and the rules and regulations of the Commission
     with respect thereto as in effect at the time of filing. Such financial
     statements have been prepared in accordance with United States generally
     accepted accounting principles applied on a consistent basis during the
     periods involved ("GAAP"), except as may be otherwise specified in such
     financial statements or the notes thereto and except that unaudited
     financial statements may not contain all footnotes required by GAAP, and
     fairly present in all material respects the financial position of the
     Company and its consolidated subsidiaries as of and for the dates thereof
     and the results of operations and cash flows for the periods then ended,
     subject, in the case of unaudited statements, to normal, immaterial,
     year-end audit adjustments.

          (i) Material Changes. Since the date of the latest financial
     statements included within the SEC Reports, except as specifically
     disclosed in the SEC Reports, (i) there has been no event, occurrence or
     development that has had or that could reasonably be expected to result in
     a Material Adverse Effect, (ii) the Company has not incurred any
     liabilities (contingent or otherwise) other than (A) trade payables and
     accrued expenses incurred in the ordinary course of business consistent
     with past practice and (B) liabilities not required to be reflected in the
     Company's financial statements pursuant to GAAP or required to be disclosed
     in filings made with the Commission, (iii) the Company has not altered its
     method of accounting, (iv) the Company has not declared or made any
     dividend or distribution of cash or other property to its stockholders or
     purchased, redeemed or made any agreements to purchase or redeem any shares
     of its capital stock and (v) the Company has not issued any equity
     securities to any officer, director or Affiliate, except pursuant to
     existing Company stock option plans. The Company does not have pending
     before the Commission any request for confidential treatment of
     information.

          (j) Litigation. There is no action, suit, inquiry, notice of
     violation, proceeding or investigation pending or, to the knowledge of the
     Company, threatened against or affecting the Company, any Subsidiary or any
     of their respective properties before or by any court, arbitrator,
     governmental or administrative agency or regulatory authority (federal,
     state, county, local or foreign) (collectively, an "Action") which (i)
     adversely affects or challenges the legality, validity or enforceability of
     any of the Transaction Documents or the Securities or (ii) could, if there
     were an unfavorable decision, have or reasonably be expected to result in a
     Material Adverse Effect. Neither the Company nor any Subsidiary, nor any
     director or officer thereof, is or has been the subject of any Action
     involving a claim of violation of or liability under federal or state
     securities laws or a claim of breach of fiduciary duty. There has not been,
     and to the knowledge of the Company, there is not pending or contemplated,
     any

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     investigation by the Commission involving the Company or any current
     or former director or officer of the Company. The Commission has not issued
     any stop order or other order suspending the effectiveness of any
     registration statement filed by the Company or any Subsidiary under the
     Exchange Act or the Securities Act.

          (k) 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 which could reasonably be expected to result in a Material
     Adverse Effect.

          (l) Compliance. Neither the Company nor any Subsidiary (i) is in
     default under or in violation of (and no event has occurred that has not
     been waived that, with notice or lapse of time or both, would result in a
     default by the Company or any Subsidiary under), nor has the Company or any
     Subsidiary received notice of a claim that it is in default under or that
     it is in violation of, any indenture, loan or credit agreement or any other
     agreement or instrument to which it is a party or by which it or any of its
     properties is bound (whether or not such default or violation has been
     waived), (ii) is in violation of any order of any court, arbitrator or
     governmental body, or (iii) is or has been in violation of any statute,
     rule or regulation of any governmental authority, including without
     limitation all foreign, federal, state and local laws applicable to its
     business except in each case as could not have a Material Adverse Effect.

          (m) Regulatory Permits. The Company and the Subsidiaries possess all
     certificates, authorizations and permits issued by the appropriate federal,
     state, local or foreign regulatory authorities necessary to conduct their
     respective businesses as described in the SEC Reports, except where the
     failure to possess such permits could not have or reasonably be expected to
     result in a Material Adverse Effect ("Material Permits"), and neither the
     Company nor any Subsidiary has received any notice of proceedings relating
     to the revocation or modification of any Material Permit.

          (n) Title to Assets. The Company and the Subsidiaries have good and
     marketable title in fee simple to all real property owned by them that is
     material to the business of the Company and the Subsidiaries and good and
     marketable title in all personal property owned by them that is material to
     the business of the Company and the Subsidiaries, in each case free and
     clear of all Liens, except for Liens as do not materially affect the value
     of such property and do not materially interfere with the use made and
     proposed to be made of such property by the Company and the Subsidiaries
     and Liens for the payment of federal, state or other taxes, the payment of
     which is neither delinquent nor subject to penalties. Any real property and
     facilities held under lease by the Company and the Subsidiaries are held by
     them under valid, subsisting and enforceable leases of which the Company
     and the Subsidiaries are in compliance.

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          (o) Patents and Trademarks. The Company and the Subsidiaries have, or
     have rights to use, all patents, patent applications, trademarks, trademark
     applications, service marks, trade names, copyrights, licenses and other
     similar rights necessary or material for use in connection with their
     respective businesses as described in the SEC Reports and which the failure
     to so have could have a Material Adverse Effect (collectively, the
     "Intellectual Property Rights"). Neither the Company nor any Subsidiary has
     received a written notice that the Intellectual Property Rights used by the
     Company or any Subsidiary violates or infringes upon the rights of any
     Person. To the knowledge of the Company, all such Intellectual Property
     Rights are enforceable and there is no existing infringement by another
     Person of any of the Intellectual Property Rights of others.

          (p) Insurance. The Company and the Subsidiaries are insured by
     insurers of recognized financial responsibility against such losses and
     risks and in such amounts as are prudent and customary in the businesses in
     which the Company and the Subsidiaries are engaged. To the best of
     Company's knowledge, such insurance contracts and policies are accurate and
     complete. Neither the Company nor any Subsidiary has any reason to believe
     that it will not be able to renew its existing insurance coverage as and
     when such coverage expires or to obtain similar coverage from similar
     insurers as may be necessary to continue its business without a significant
     increase in cost.

          (q) Transactions With Affiliates and Employees. Except as set forth in
     the SEC Reports, none of the officers or directors of the Company and, to
     the knowledge of the Company, none of the employees of the Company is
     presently a party to any transaction with the Company or any Subsidiary
     (other than for services as employees, officers and directors), including
     any contract, agreement or other arrangement providing for the furnishing
     of services to or by, providing for rental of real or personal property to
     or from, or otherwise requiring payments to or from any officer, director
     or such employee or, to the knowledge of the Company, any entity in which
     any officer, director, or any such employee has a substantial interest or
     is an officer, director, trustee or partner, in each case in excess of
     $60,000 in any twelve (12) month period other than (i) for payment of
     salary or consulting fees for services rendered, (ii) reimbursement for
     expenses incurred on behalf of the Company and (iii) for other employee
     benefits, including stock option agreements under any stock option plan of
     the Company.

          (r) Sarbanes-Oxley Act. The Company is in substantial compliance with
     the applicable provisions of the Sarbanes-Oxley Act of 2002 (the
     "Sarbanes-Oxley Act"), and the rules and regulations promulgated
     thereunder, that are effective and intends to comply substantially with
     other applicable provisions of the Sarbanes-Oxley Act, and the rules and
     regulations promulgated thereunder, upon the effectiveness of such
     provisions.

          (s) Certain Fees. No brokerage or finder's fees or commissions are or
     will be payable by the Company to any broker, financial advisor or
     consultant, finder, placement agent, investment banker, bank or other
     Person with respect to the

                                       12
<PAGE>

     transactions contemplated by this Agreement, except as set forth on
     Schedule 3.1(s). The Purchasers shall have no obligation with respect to
     any fees or with respect to any claims made by or on behalf of other
     Persons for fees of a type contemplated in this Section that may be due in
     connection with the transactions contemplated by this Agreement.

          (t) Private Placement. Assuming the accuracy of the Purchasers
     representations and warranties set forth in Section 3.2, no registration
     under the Securities Act is required for the offer and sale of the
     Securities by the Company to the Purchasers as contemplated hereby. The
     issuance and sale of the Securities hereunder does not contravene the rules
     and regulations of the Trading Market.

          (u) Investment Company. The Company is not, and is not an Affiliate
     of, and immediately after receipt of payment for the Shares, will not be or
     be an Affiliate of, an "investment company" within the meaning of the
     Investment Company Act of 1940, as amended. The Company shall conduct its
     business in a manner so that it will not become subject to the Investment
     Company Act.

          (v) Registration Rights. No Person has any right to cause the Company
     to effect the registration under the Securities Act of any securities of
     the Company.

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

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

          (y) Disclosure. The Company confirms that, neither the Company nor any
     other Person acting on its behalf has provided any of the Purchasers or
     their

                                       13
<PAGE>

     agents or counsel with any information that constitutes or might
     constitute material, non-public information. The Company understands and
     confirms that the Purchasers will rely on the foregoing representations and
     covenants in effecting transactions in securities of the Company. All
     disclosure provided to the Purchasers regarding the Company, its business
     and the transactions contemplated hereby, including the Schedules to this
     Agreement, furnished by or on behalf of the Company with respect to the
     representations and warranties made herein are true and correct with
     respect to such representations and warranties and do not contain any
     untrue statement of a material fact or omit to state any material fact
     necessary in order to make the statements made therein, in light of the
     circumstances under which they were made, not misleading. The Company
     acknowledges and agrees that no Purchaser makes or has made any
     representations or warranties with respect to the transactions contemplated
     hereby other than those specifically set forth in Section 3.2 hereof.

          (z) No Integrated Offering. Assuming the accuracy of the Purchasers'
     representations and warranties set forth in Section 3.2, neither the
     Company, nor any of its affiliates, 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 Securities to be integrated with
     prior offerings by the Company for purposes of the Securities Act or any
     applicable shareholder approval provisions, including, without limitation,
     under the rules and regulations of any exchange or automated quotation
     system on which any of the securities of the Company are listed or
     designated.

          (aa) Form S-3 Eligibility. The Company is eligible to register the
     resale of its Common Stock by the Purchasers under Form S-3 promulgated
     under the Securities Act and the Company hereby covenants and agrees to use
     commercially reasonable efforts to maintain its eligibility to use Form S-3
     until the Registration Statement covering the resale of the Shares shall
     have been filed with, and declared effective by, the Commission.

          (bb) Taxes. Except for matters that would not, individually or in the
     aggregate, have or reasonably be expected to result in a Material Adverse
     Effect, the Company and each Subsidiary has filed all necessary federal,
     state and foreign income and franchise tax returns and has paid or accrued
     all taxes shown as due thereon, and the Company has no knowledge of a tax
     deficiency which has been asserted or threatened against the Company or any
     Subsidiary.

          (cc) General Solicitation. Neither the Company nor any person acting
     on behalf of the Company has offered or sold any of the Shares by any form
     of general solicitation or general advertising. The Company has offered the
     Shares for sale only to the Purchasers and certain other "accredited
     investors" within the meaning of Rule 501 under the Securities Act.

                                       14
<PAGE>

          (dd) Foreign Corrupt Practices. Neither the Company, nor to the
     knowledge of the Company, any agent or other person acting on behalf of the
     Company, has (i) directly or indirectly, used any corrupt funds for
     unlawful contributions, gifts, entertainment or other unlawful expenses
     related to foreign or domestic political activity, (ii) made any unlawful
     payment to foreign or domestic government officials or employees or to any
     foreign or domestic political parties or campaigns from corporate funds,
     (iii) failed to disclose fully any contribution made by the Company (or
     made by any person acting on its behalf of which the Company is aware)
     which is in violation of law, or (iv) violated in any material respect any
     provision of the Foreign Corrupt Practices Act of 1977, as amended.

          (ee) Accountants. The Company's accountants are set forth on Schedule
     3.1(ee) of the Disclosure Schedule. To the Company's knowledge, such
     accountants, who the Company expects will express their opinion with
     respect to the financial statements to be included in the Company's Annual
     Report on Form 10-K for the year ended August 31, 2004, are independent
     accountants as required by the Securities Act.

          (ff) Acknowledgment Regarding Purchasers' Purchase of Shares. The
     Company acknowledges and agrees that each of the Purchasers is acting
     solely in the capacity of an arm's length purchaser with respect to the
     Transaction Documents and the transactions contemplated hereby. The Company
     further acknowledges that no Purchaser is acting as a financial advisor or
     fiduciary of the Company (or in any similar capacity) with respect to this
     Agreement and the transactions contemplated hereby and any advice given by
     any Purchaser or any of their respective representatives or agents in
     connection with this Agreement and the transactions contemplated hereby is
     merely incidental to the Purchasers' purchase of the Shares. The Company
     further represents to each Purchaser that the Company's decision to enter
     into this Agreement has been based solely on the independent evaluation of
     the transactions contemplated hereby by the Company and its
     representatives.

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

          (a) Organization; Authority. Such Purchaser is an entity duly
     organized, validly existing and in good standing under the laws of the
     jurisdiction of its organization with full right, corporate or partnership
     power and authority to enter into and to consummate the transactions
     contemplated by the Transaction Documents and otherwise to carry out its
     obligations thereunder. The execution, delivery and performance by such
     Purchaser of the transactions contemplated by this Agreement have been duly
     authorized by all necessary corporate or similar action on the part of such
     Purchaser. Each Transaction Document to which it is a party has been duly
     executed by such Purchaser, and, assuming this Agreement constitutes the
     valid and binding obligation of the Company and each other Purchaser and
     when delivered by such Purchaser in accordance with the terms

                                       15
<PAGE>

     hereof, will constitute the valid and legally binding obligation of
     such Purchaser, enforceable against it in accordance with its terms, except
     as the enforceability thereof may be limited by bankruptcy, insolvency,
     fraudulent conveyance, reorganization, moratorium or similar laws relating
     to or affecting the rights of creditors' generally and by general equitable
     principles (regardless of whether such enforceability is considered in a
     proceeding in equity or at law) and by an implied covenant of good faith
     and fair dealing.

          (b) Investment Intent. Such Purchaser understands that the Securities
     are "restricted securities" and have not been registered under the
     Securities Act or any applicable state securities law and is acquiring the
     Securities as principal for its own account for investment purposes only
     and not with a view to or for distributing or reselling such Securities or
     any part thereof, has no present intention of distributing any of such
     Securities and has no arrangement or understanding with any other persons
     regarding the distribution of such Securities (this representation and
     warranty not limiting such Purchaser's right to sell the Securities
     pursuant to the Registration Statement or otherwise in compliance with
     applicable federal and state securities laws). Such Purchaser is acquiring
     the Securities hereunder in the ordinary course of its business. Such
     Purchaser does not have any agreement or understanding, directly or
     indirectly, with any Person to distribute any of the Securities.

          (c) Rule 144. Such Purchaser understands that the Securities must be
     held indefinitely unless such Securities are registered under the
     Securities Act or an exemption from registration is available. Such
     Purchaser acknowledges that it is familiar with Rule 144, and that such
     Purchaser has been advised that Rule 144 permits resales only under certain
     circumstances. Such Purchaser understands that to the extent that Rule 144
     is not available, such Purchaser will be unable to sell any Securities
     without either registration under the Securities Act or the existence of
     another exemption from such registration requirement.

          (d) Purchaser Status. At the time such Purchaser was offered the
     Securities, it was, and at the date hereof it is, and on each date on which
     it exercises any Warrants, it will be either: (i) an "accredited investor"
     as defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7) or (a)(8) under the
     Securities Act or (ii) a "qualified institutional buyer" as defined in Rule
     144A(a) under the Securities Act. Such Purchaser is not required to be
     registered as a broker-dealer under Section 15 of the Exchange Act.

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

                                       16
<PAGE>

          (f) General. Such Purchaser understands that the Securities are being
     offered and sold in reliance on a transactional exemption from the
     registration requirements of federal and state securities laws and the
     Company is relying upon the truth and accuracy of the representations,
     warranties, agreements, acknowledgments and understandings of such
     Purchaser set forth herein in order to determine the applicability of such
     exemptions and the suitability of such Purchaser to acquire the Securities.
     Such Purchaser understands that no United States federal or state agency or
     any government or governmental agency has passed upon or made any
     recommendation or endorsement of the Securities.

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

          (h) Patriot Act. If such Purchaser is an individual, such Purchaser
     certifies that he or she is not nor to his or her knowledge has been
     designated, a "suspected terrorist" as defined in Executive Order 13224. If
     such Purchaser is a corporation, trust, partnership, limited liability
     company or other organization, such Purchaser certifies that, to the best
     of such Purchaser's knowledge, such Purchaser has not been designated, and,
     to the knowledge of the Purchaser after due inquiry, is not owned or
     controlled, by a "suspected terrorist" as defined in Executive Order 13224.
     Such Purchaser hereby acknowledges that the Company seeks to comply with
     all applicable laws concerning money laundering and related activities. In
     furtherance of those efforts, such Purchaser hereby represents, warrants
     and agrees that: (i) to its knowledge after due inquiry, none of the cash
     or property that such Purchaser will pay or will contribute to the Company
     has been or shall be derived from, or related to, any activity that is
     deemed criminal under United States law; and (ii) to its knowledge, no
     contribution or payment by such Purchaser to the Company, to the extent
     that they are within such Purchaser's control shall cause the Company to be
     in violation of the United States Bank Secrecy Act, the United States
     International Money Laundering Control Act of 1986 or the United States
     International Money Laundering Abatement and Anti-Terrorist Financing Act
     of 2001. Such Purchaser understands and agrees that if at anytime while
     such Purchaser holds any of the Securities it is discovered that any of the
     foregoing representations are incorrect, it shall promptly notify the
     Company.

     The Company acknowledges and agrees that each Purchaser does not make or
has not made any representations or warranties with respect to the transactions
contemplated hereby other than those specifically set forth in this Section 3.2.

                                       17
<PAGE>

                                  ARTICLE IV.
                         OTHER AGREEMENTS OF THE PARTIES

     4.1 Transfer Restrictions.

          (a) The Securities may only be disposed of in compliance with state
     and federal securities laws. In connection with any transfer of Securities
     other than pursuant to an effective registration statement or Rule 144, to
     the Company or to an Affiliate of a Purchaser or in connection with a
     pledge as contemplated in Section 4.1(b), the Company may require the
     transferor thereof to provide to the Company an opinion of counsel selected
     by the transferor and reasonably acceptable to the Company, the form and
     substance of which opinion and shall be reasonably satisfactory to the
     Company, to the effect that such transfer does not require registration of
     such transferred Securities under the Securities Act. As a condition of
     transfer, any such transferee shall agree in writing to be bound by the
     terms of this Agreement and shall have the rights of a Purchaser under this
     Agreement and the Registration Rights Agreement.

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

          THESE SECURITIES HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND
          EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN
          RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT
          OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT
          BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
          STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE
          EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
          REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE
          STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO
          THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE
          REASONABLY ACCEPTABLE TO THE COMPANY. THESE SECURITIES MAY BE PLEDGED
          IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT WITH A REGISTERED
          BROKER-DEALER OR OTHER LOAN WITH A FINANCIAL INSTITUTION THAT IS AN
          "ACCREDITED INVESTOR" AS DEFINED IN RULE 501(a) UNDER THE SECURITIES
          ACT.

          The Company acknowledges and agrees that a Purchaser may from time to
     time pledge pursuant to a bona fide margin agreement with a registered
     broker-dealer or grant a security interest in some or all of the Securities
     to a financial institution that is an "accredited investor" as defined in
     Rule 501(a) under the Securities Act and who agrees to be bound by the
     provisions of this Agreement and the Registration Rights Agreement and, if
     required under the terms of such arrangement, such Purchaser may transfer
     pledged or secured Securities to the pledgees or secured parties. Such a
     pledge or transfer would not be subject to approval of the Company and no
     legal opinion of legal counsel of the pledgee, secured party or pledgor
     shall be required in connection therewith, unless

                                       18
<PAGE>

     otherwise reasonably required by the Company's transfer agent.
     Further, no notice shall be required of such pledge. At the appropriate
     Purchaser's expense, the Company will execute and deliver such reasonable
     documentation as a pledgee or secured party of Securities may reasonably
     request in connection with a pledge or transfer of the Securities,
     including, if the Securities are subject to registration pursuant to the
     Registration Rights Agreement, the preparation and filing of any required
     prospectus supplement under Rule 424(b)(3) under the Securities Act or
     other applicable provision of the Securities Act to appropriately amend the
     list of Selling Stockholders thereunder.

          (c) Certificates evidencing the Shares and Warrant Shares shall not
     contain any legend (including the legend set forth in Section 4.1(b)), (i)
     while a registration statement (including the Registration Statement)
     covering the resale of such security is effective under the Securities Act,
     provided that the Purchaser's selling broker provides the Company with a
     representation that any sales or transfers of such Shares or Warrant Shares
     shall be made pursuant to the prospectus delivery requirements, or (ii)
     following a sale of such Securities pursuant to an effective registration
     statement (including the Registration Statement) or (iii) following any
     sale of such Shares or Warrant Shares pursuant to Rule 144, or (iv) if such
     Shares or Warrant Shares are eligible for sale under Rule 144(k), or (v) if
     such legend is not required under applicable requirements of the Securities
     Act (including judicial interpretations and pronouncements issued by the
     Staff of the Commission); provided, however, that in each of instances
     (iii) through (v) above, (A) such Purchaser shall have -------- -------
     provided representations that such Purchaser is permitted to dispose of
     such Shares and/or Warrant Shares without limitation as to amount or manner
     of sale pursuant to Rule 144 under the Securities Act and (B) such
     certificates evidencing the Shares and/or Warrant Shares shall have been
     surrendered along with a notice requesting removal of any legend and
     requesting the issuance of new certificates free of the legend to replace
     those surrendered. The Company shall cause its counsel to issue a legal
     opinion to the Company's transfer agent promptly after the Effective Date
     if required by the Company's transfer agent to effect the removal of the
     legend hereunder. If all or any portion of a Warrant is exercised at a time
     when there is an effective registration statement to cover the resale of
     the Warrant Shares, such Warrant Shares shall be issued free of all
     legends. The Company agrees that following the Effective Date or at such
     time as such legend is no longer required under this Section 4.1(c), it
     will, no later than five Trading Days following the delivery by a Purchaser
     to the Company or the Company's transfer agent of a certificate
     representing Shares or Warrant Shares, as the case may be, issued with a
     restrictive legend (such date, the "Legend Removal Date"), deliver or cause
     to be delivered to such Purchaser a certificate representing such
     Securities that is free from all restrictive and other legends. The Company
     may not make any notation on its records or give instructions to any
     transfer agent of the Company that enlarge the restrictions on transfer set
     forth in this Section.

          (d) In addition to such Purchaser's other available remedies, the
     Company shall pay to a Purchaser, in cash, as partial liquidated damages
     and not as a

                                       19
<PAGE>

     penalty, for each $1,000 of Shares or Warrant Shares (based on the
     Closing Price of the Common Stock on the date such Securities are submitted
     to the Company's transfer agent) subject to Section 4.1(c), $10 per Trading
     Day (increasing to $20 per Trading Day five (5) Trading Days after such
     damages have begun to accrue) for each Trading Day after the Legend Removal
     Date until such certificate is delivered. Nothing herein shall limit such
     Purchaser's right to pursue actual damages for the Company's failure to
     deliver certificates representing any Securities as required by the
     Transaction Documents, and such Purchaser shall have the right to pursue
     all remedies available to it at law or in equity including, without
     limitation, a decree of specific performance and/or injunctive relief.

          (e) Each Purchaser, severally and not jointly with the other
     Purchasers, agrees that the removal of the restrictive legend from
     certificates representing Securities as set forth in this Section 4.1 is
     predicated upon the Company's reliance that the Purchaser will sell any
     Securities pursuant to either the registration requirements of the
     Securities Act, including any applicable prospectus delivery requirements,
     or an exemption therefrom.

          (f) Until the 30th day after the Effective Date, the Company shall not
     undertake a reverse or forward stock split or reclassification of the
     Common Stock without the prior written consent of the Purchasers holding a
     majority in interest of the Shares, which consent shall not be unreasonably
     withheld.

     4.2 Furnishing of Information. As long as any Purchaser owns Securities,
the Company covenants to timely file (or obtain extensions in respect thereof
and file within the applicable grace period) all reports required to be filed by
the Company after the date hereof pursuant to the Exchange Act. As long as any
Purchaser owns Securities, if the Company is not required to file reports
pursuant to the Exchange Act, it will prepare and furnish to the Purchasers and
make publicly available in accordance with Rule 144(c) such information as is
required for the Purchasers to sell the Securities under Rule 144. The Company
further covenants that it will take such further action as any holder of
Securities may reasonably request, all to the extent required from time to time
to enable such Person to sell such Securities without registration under the
Securities Act within the limitation of the exemptions provided by Rule 144.

     4.3 Integration. Except as otherwise contemplated by this Agreement, the
Company shall not sell, offer for sale or solicit offers to buy or otherwise
negotiate in respect of any security (as defined in Section 2 of the Securities
Act) that would be integrated with the offer or sale of the Securities in a
manner that would require the registration under the Securities Act of the sale
of the Securities to the Purchasers or that would be integrated with the offer
or sale of the Securities for purposes of the rules and regulations of any
Trading Market such that it would require shareholder approval prior to the
closing of such other transaction unless shareholder approval is obtained before
the closing of such subsequent transaction.

     4.4 Securities Laws Disclosure; Publicity. The Company shall, by 8:30 a.m.
Eastern time on the Trading Day following the date hereof, issue a press release

                                       20
<PAGE>

reasonably acceptable to Purchasers holding at least 51% of the Shares
disclosing the material terms of the transactions contemplated hereby. The
Company and each Purchaser shall consult with each other in issuing any other
press releases with respect to the transactions contemplated hereby, and neither
the Company nor any Purchaser shall issue any such press release or otherwise
make any such public statement without the prior consent of the Company, with
respect to any press release of any Purchaser, or without the prior consent of
each Purchaser, with respect to any press release of the Company, which consent
shall not unreasonably be withheld, except if such disclosure is required by
law, in which case the disclosing party shall promptly provide the other party
with prior notice of such public statement or communication. Notwithstanding the
foregoing, the Company shall not publicly disclose the name of any Purchaser, or
include the name of any Purchaser in any filing with the Commission or any
regulatory agency or Trading Market, without the prior written consent of such
Purchaser, which consent shall not unreasonably be withheld, except (i) as
required by federal securities law in connection with the registration statement
contemplated by the Registration Rights Agreement and (ii) to the extent such
disclosure is required by law or Trading Market regulations, in which case the
Company shall provide the Purchasers with prior notice of such disclosure
permitted under subclause (i) or (ii).

     4.5 Shareholders Rights Plan. No claim will be made or enforced by the
Company or, to the knowledge of the Company, any other Person that any Purchaser
is an "Acquiring Person" under any shareholders rights plan or similar plan or
arrangement in effect or hereafter adopted by the Company, or that any Purchaser
could be deemed to trigger the provisions of any such plan or arrangement, by
virtue of receiving Securities under the Transaction Documents or under any
other agreement between the Company and the Purchasers. The Company shall
conduct its business in a manner so that it will not become subject to the
Investment Company Act.

     4.6 Non-Public Information. The Company covenants and agrees that neither
it nor any other Person acting on its behalf will provide any Purchaser or its
agents or counsel with any information that the Company believes constitutes
material non-public information, unless prior thereto such Purchaser shall have
executed a written agreement regarding the confidentiality and use of such
information. The Company understands and confirms that each Purchaser shall be
relying on the foregoing representations in effecting transactions in securities
of the Company.

     4.7 Use of Proceeds. The Company shall use the net proceeds from the sale
of the Securities hereunder for working capital and general corporate purposes.

     4.8 Indemnification of Purchasers. Subject to the provisions of this
Section 4.8, the Company will indemnify and hold the Purchasers and their
directors, officers, shareholders, partners, employees and agents (each, a
"Purchaser Party") harmless from any and all losses, liabilities, obligations,
claims, contingencies, damages, costs and expenses, including all judgments,
amounts paid in settlements, court costs and reasonable attorneys' fees and
costs of investigation that any such Purchaser Party may suffer or incur as a
result of or relating to (a) any breach of any of the representations,
warranties, covenants or agreements made by the Company in this Agreement or in
the

                                       21
<PAGE>

other Transaction Documents or (b) any action instituted against a
Purchaser, or any of them or their respective Affiliates, by any stockholder of
the Company who is not an Affiliate of such Purchaser, with respect to any of
the transactions contemplated by the Transaction Documents (unless such action
is based upon a breach of such Purchaser's representation, warranties or
covenants under the Transaction Documents or any agreements or understandings
such Purchaser may have with any such stockholder or any violations by the
Purchaser of state or federal securities laws or any conduct by such Purchaser
which constitutes fraud, gross negligence, willful misconduct or malfeasance).
If any action shall be brought against any Purchaser Party in respect of which
indemnity may be sought pursuant to this Agreement, such Purchaser Party shall
promptly notify the Company in writing, and the Company shall have the right to
assume the defense thereof with counsel of its own choosing. Any Purchaser Party
shall have the right to employ separate counsel in any such action and
participate in the defense thereof, but the fees and expenses of such counsel
shall be at the expense of such Purchaser Party except to the extent that (i)
the employment thereof has been specifically authorized by the Company in
writing, (ii) the Company has failed after a reasonable period of time to assume
such defense and to employ counsel or (iii) in such action there is, in the
reasonable opinion of such separate counsel, a material conflict on any material
issue between the position of the Company and the position of such Purchaser
Party. The Company will not be liable to any Purchaser Party under this
Agreement (i) for any settlement by an Purchaser Party effected without the
Company's prior written consent, which shall not be unreasonably withheld or
delayed; or (ii) to the extent, but only to the extent that a loss, claim,
damage or liability is attributable to any Purchaser Party's breach of any of
the representations, warranties, covenants or agreements made by the Purchasers
in this Agreement or in the other Transaction Documents.

     4.9 Reservation of Common Stock. As of the date hereof, the Company has
reserved and the Company shall continue to reserve and keep available at all
times, free of preemptive rights, a sufficient number of shares of Common Stock
for the purpose of enabling the Company to issue Shares pursuant to this
Agreement and Warrant Shares pursuant to any exercise of the Warrants.

     4.10 Listing of Common Stock. The Company hereby agrees to use commercially
reasonable efforts to maintain the listing of the Common Stock on a Trading
Market, and as soon as reasonably practicable following the Closing (but not
later than the earlier of the Effective Date and the first anniversary of the
Closing Date) to list all of the Shares and Warrant Shares on such Trading
Market. The Company further agrees, if the Company applies to have the Common
Stock traded on any other Trading Market, it will include in such application
all of the Shares and Warrant Shares, and will take such other action as is
necessary to cause all of the Shares and Warrant Shares to be listed on such
other Trading Market as promptly as possible. The Company will take all action
reasonably necessary to continue the listing and trading of its Common Stock on
a Trading Market and will comply in all respects with the Company's reporting,
filing and other obligations under the bylaws or rules of the Trading Market.

     4.11 Equal Treatment of Purchasers. No consideration shall be offered or
paid to any person to amend or consent to a waiver or modification of any
provision of any of

                                       22
<PAGE>

the Transaction Documents unless the same consideration is also offered to
all of the parties to the Transaction Documents. For clarification purposes,
this provision constitutes a separate right granted to each Purchaser by the
Company and negotiated separately by each Purchaser, and is intended to treat
for the Company the Purchasers as a class and shall not in any way be construed
as the Purchasers acting in concert or as a group with respect to the purchase,
disposition or voting of Securities or otherwise.

     4.12 Participation in Future Financing. From the date hereof until twelve
(12) months after the Effective Date, upon any issuance by the Company of its
Common Stock or Common Stock Equivalents (a "Subsequent Financing"), each
Purchaser shall have the right to participate in up to 50% of such Subsequent
Financing (the "Participation Maximum"). At least five (5) Trading Days prior to
the closing of the Subsequent Financing, the Company shall deliver to each
Purchaser a written notice of its intention to effect a Subsequent Financing
("Pre-Notice"), which Pre-Notice shall ask such Purchaser if it wants to review
the details of such financing (such additional notice, a "Subsequent Financing
Notice"). Upon the request of a Purchaser, and only upon a request by such
Purchaser, for a Subsequent Financing Notice, the Company shall promptly, but no
later than one (1) Trading Day after such request, deliver a Subsequent
Financing Notice to such Purchaser. The Subsequent Financing Notice shall
describe in reasonable detail the proposed terms of such Subsequent Financing,
the amount of proceeds intended to be raised thereunder, the Person with whom
such Subsequent Financing is proposed to be effected, and attached to which
shall be a term sheet or similar document relating thereto. If by 6:30 p.m. (New
York City time) on the fifth Trading Day after all of the Purchasers have
received the Pre-Notice, notifications by the Purchasers of their willingness to
participate in the Subsequent Financing (or to cause their designees to
participate) is, in the aggregate, less than the total amount of the Subsequent
Financing, then the Company may effect the remaining portion of such Subsequent
Financing on the terms and to the Persons set forth in the Subsequent Financing
Notice. If the Company receives no notice from a Purchaser as of such 5th
Trading Day, such Purchaser shall be deemed to have notified the Company that it
does not elect to participate. The Company must provide the Purchasers with a
second Subsequent Financing Notice, and the Purchasers will again have the right
of participation set forth above in this Section 4.12, if the Subsequent
Financing subject to the initial Subsequent Financing Notice is not consummated
for any reason on the terms set forth in such Subsequent Financing Notice within
60 Trading Days after the date of the initial Subsequent Financing Notice. In
the event the Company receives responses to Subsequent Financing Notices from
Purchasers seeking to purchase more than the aggregate amount of the Subsequent
Financing, each such Purchaser shall have the right to purchase their Pro Rata
Portion (as defined below) of the Participation Maximum. "Pro Rata Portion" is
the ratio of (x) the Subscription Amount of Securities purchased by a
participating Purchaser and (y) the sum of the aggregate Subscription Amount of
all participating Purchasers. Notwithstanding the foregoing, this Section 4.12
shall not apply in respect of an Exempt Issuance.

     4.13 Subsequent Equity Sales. From the date hereof until 60 days after the
Effective Date, neither the Company nor any Subsidiary shall issue shares of
Common Stock or Common Stock Equivalents; provided, however, the 60 day period
set forth in

                                       23
<PAGE>

this Section 4.13 shall be extended for the number of Trading Days during
such period in which (y) trading in the Common Stock is suspended by any Trading
Market, or (z) following the Effective Date, the Registration Statement is not
effective or the prospectus included in the Registration Statement may not be
used by the Purchasers for the resale of the Shares and Warrant Shares.
Notwithstanding the foregoing, this Section 4.13 shall not apply in respect of
an Exempt Issuance.

     4.14 Delivery of Securities After Closing. The Company shall deliver, or
cause to be delivered, the respective Shares and Warrants purchased by each
Purchaser to such Purchaser within three (3) Trading Days of the Closing Date.

     4.15 Per Share Purchase Price Protection. From the date hereof until twelve
(12) months after the Effective Date, if in connection with a Subsequent
Financing, the Company or any Subsidiary shall issue any Common Stock or Common
Stock Equivalents entitling any person or entity to acquire shares of Common
Stock at a price per share less than the Per Share Purchase Price (subject to
reverse and forward stock splits and the like) (the "Discounted Purchase Price",
as further defined below), the Company shall issue to such Purchaser that number
of additional shares of Common Stock equal to (a) the Subscription Amount paid
by such Purchaser at the Closing divided by the Discounted Purchase Price, less
(b) the Shares issued to such Purchaser at the Closing pursuant to this
Agreement and pursuant to this Section 4.15. The term "Discounted Purchase
Price" shall mean the amount actually paid by third parties for a share of
Common Stock. The sale of Common Stock Equivalents shall be deemed to have
occurred at the time of the issuance of the Common Stock Equivalents and the
Discounted Purchase Price covered thereby shall also include the actual exercise
or conversion price thereof at the time of the conversion or exercise (in
addition to the consideration per share of Common Stock underlying the Common
Stock Equivalents received by the Company upon such sale or issuance of the
Common Stock Equivalents). In the case of any Subsequent Financing involving a
"Variable Rate Transaction" or an "MFN Transaction" (each as defined below), the
Discounted Purchase Price shall be deemed to be the lowest actual conversion or
exercise price at which such securities are converted or exercised in the case
of a Variable Rate Transaction, or the lowest adjustment price in the case of an
MFN Transaction. If shares are issued for a consideration other than cash, the
per share selling price shall be the fair value of such consideration as
determined in good faith by the Board of Directors of the Company. The term
"Variable Rate Transaction" shall mean a transaction in which the Company issues
or sells any debt or equity securities that are convertible into, exchangeable
or exercisable for, or include the right to receive additional shares of Common
Stock either (x) at a conversion, exercise or exchange rate or other price that
is based upon and/or varies with the trading prices of or quotations for the
shares of Common Stock at any time after the initial issuance of such debt or
equity securities, or (y) with a conversion, exercise or exchange price that is
subject to being reset at some future date after the initial issuance of such
debt or equity security or upon the occurrence of specified or contingent events
directly or indirectly related to the business of the Company or the market for
the Common Stock. The term "MFN Transaction" shall mean a transaction in which
the Company issues or sells any securities in a capital raising transaction or
series of related transactions which grants to an investor the right to receive
additional shares

                                       24
<PAGE>

based upon future transactions of the Company on terms more favorable than
those granted to the such investor in such offering. The Company may not refuse
to issue a Purchaser additional Shares hereunder based on any claim that such
Purchaser or any one associated or affiliated with such Purchaser has been
engaged in any violation of law, agreement or for any other reason, unless, an
injunction from a court, on notice, restraining and or enjoining an issuance
hereunder shall have been sought and obtained. Nothing herein shall limit a
Purchaser's right to pursue actual damages for the Company's failure to deliver
Shares hereunder and such Purchaser shall have the right to pursue all remedies
available to it at law or in equity including, without limitation, a decree of
specific performance and/or injunctive relief. Notwithstanding anything to the
contrary herein, this Section 4.15 not apply in respect of (a) an Exempt
Issuance or (b) with respect to a Purchaser, any Subsequent Financing that such
Purchaser Participates in as contemplated in Section 4.12 hereof. Additionally,
prior to any issuance to a Purchaser pursuant to this Section 4.5, such
Purchaser shall have the right to irrevocably defer such issuances to such
Purchaser under this Section 4.15, in whole or in part, for continuous periods
of not less than seventy-five (75) days.

                                   ARTICLE V.
                                  MISCELLANEOUS

     5.1 Fees and Expenses. At the Closing, the Company will pay The BlueGrass
Fund ("BlueGrass") up to $20,000 for its reasonable and documented legal fees
and expenses, $10,000 of which has already been paid. Accordingly, in lieu of
the foregoing payments, the Company, on the Closing Date, will direct that the
aggregate amount that BlueGrass is to pay for the Shares and Warrants at the
Closing, be reduced by up to $10,000. Except as otherwise set forth in this
Agreement, each party shall pay the fees and expenses of its advisers, counsel,
accountants and other experts, if any, and all other expenses incurred by such
party incident to the negotiation, preparation, execution, delivery and
performance of this Agreement. The Company shall pay all stamp and other taxes
and duties levied in connection with the sale of the Securities.

     5.2 Entire Agreement. The Transaction Documents, together with the exhibits
and schedules thereto, contain the entire understanding of the parties with
respect to the subject matter hereof and supersede all prior agreements and
understandings, oral or written, with respect to such matters, which the parties
acknowledge have been merged into such documents, exhibits and schedules.

     5.3 Notices. Any and all notices or other communications or deliveries
required or permitted to be provided hereunder shall be in writing and shall be
deemed given and effective on the earliest of (a) the date of transmission, if
such notice or communication is delivered via facsimile at the facsimile number
set forth on the signature pages attached hereto prior to 6:30 p.m. (New York
City time) on a Trading Day, (b) the next Trading Day after the date of
transmission, if such notice or communication is delivered via facsimile at the
facsimile number set forth on the signature pages attached hereto on a day that
is not a Trading Day or later than 6:30 p.m. (New York City time) on any Trading
Day, (c) the second Trading Day following the date of mailing, if sent by U.S.
nationally recognized overnight courier service, or (d) upon actual receipt by
the party to

                                       25
<PAGE>

whom such notice is required to be given. The address for such notices and
communications shall be as set forth on the signature pages attached hereto.

     5.4 Amendments; Waivers. No provision of this Agreement may be waived or
amended except in a written instrument signed, in the case of an amendment, by
the Company and each Purchaser or, in the case of a waiver, by the party against
whom enforcement of any such waiver is sought. No waiver of any default with
respect to any provision, condition or requirement of this Agreement shall be
deemed to be a continuing waiver in the future or a waiver of any subsequent
default or a waiver of any other provision, condition or requirement hereof, nor
shall any delay or omission of either party to exercise any right hereunder in
any manner impair the exercise of any such right.

     5.5 Construction. The headings herein are for convenience only, do not
constitute a part of this Agreement and shall not be deemed to limit or affect
any of the provisions hereof. The language used in this Agreement will be deemed
to be the language chosen by the parties to express their mutual intent, and no
rules of strict construction will be applied against any party.

     5.6 Successors and Assigns. This Agreement shall be binding upon and inure
to the benefit of the parties and their successors and permitted assigns. The
Company may not assign this Agreement or any rights or obligations hereunder
without the prior written consent of each Purchaser. Any Purchaser may assign
any or all of its rights under this Agreement to any Person to whom such
Purchaser assigns or transfers any Securities, provided such transferee agrees
in writing to be bound, with respect to the transferred Securities, by the
provisions hereof that apply to the "Purchasers".

     5.7 No Third-Party Beneficiaries. This Agreement is intended for the
benefit of the parties hereto and their respective successors and permitted
assigns and is not for the benefit of, nor may any provision hereof be enforced
by, any other Person, except as otherwise set forth in Section 4.8.

     5.8 Governing Law. All questions concerning the construction, validity,
enforcement and interpretation of the Transaction Documents shall be governed by
and construed and enforced in accordance with the internal laws of the State of
New York, without regard to the principles of conflicts of law thereof. Each
party hereby irrevocably submits to the exclusive jurisdiction of the state and
federal courts sitting in the City of New York, borough of Manhattan for the
adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein (including with respect to
the enforcement of any of the Transaction Documents), and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any claim
that it is not personally subject to the jurisdiction of any such court, that
such suit, action or proceeding is improper or inconvenient venue for such
proceeding. Each party hereby irrevocably waives personal service of process and
consents to process being served in any such suit, action or proceeding by
mailing a copy thereof via registered or certified mail or overnight delivery
(with evidence of delivery) to such party at the address in effect for notices
to it under this Agreement and agrees that such service shall constitute good
and sufficient service of process and notice thereof.

                                       26
<PAGE>

Nothing contained herein shall be deemed to limit in any way any right to
serve process in any manner permitted by law. The parties hereby waive all
rights to a trial by jury. If either party shall commence an action or
proceeding to enforce any provisions of the Transaction Documents, then the
prevailing party in such action or proceeding shall be reimbursed by the other
party for its attorneys' fees and other costs and expenses incurred with the
investigation, preparation and prosecution of such action or proceeding.

     5.9 Survival. The representations and warranties herein shall survive for
eighteen (18) months after the Closing and delivery of the Shares and Warrant
Shares.

     5.10 Execution. This Agreement may be executed in two (2) or more
counterparts, all of which when taken together shall be considered one and the
same agreement and shall become effective when counterparts have been signed by
each party and delivered to the other party, it being understood that both
parties need not sign the same counterpart. In the event that any signature is
delivered by facsimile transmission, such signature shall create a valid and
binding obligation of the party executing (or on whose behalf such signature is
executed) with the same force and effect as if such facsimile signature page
were an original thereof.

     5.11 Severability. If any provision of this Agreement is held to be invalid
or unenforceable in any respect, the validity and enforceability of the
remaining terms and provisions of this Agreement shall not in any way be
affected or impaired thereby and the parties will attempt to agree upon a valid
and enforceable provision that is a reasonable substitute therefor, and upon so
agreeing, shall incorporate such substitute provision in this Agreement.

     5.12 Rescission and Withdrawal Right. Notwithstanding anything to the
contrary contained in (and without limiting any similar provisions of) the
Transaction Documents, whenever any Purchaser exercises a right, election,
demand or option under a Transaction Document and the Company does not timely
perform its related obligations within the periods therein provided, then such
Purchaser may rescind or withdraw, in its sole discretion from time to time upon
written notice to the Company, any relevant notice, demand or election in whole
or in part without prejudice to its future actions and rights.

     5.13 Replacement of Securities. If any certificate or instrument evidencing
any Securities is mutilated, lost, stolen or destroyed, the Company shall issue
or cause to be issued in exchange and substitution for and upon cancellation
thereof, or in lieu of and substitution therefor, a new certificate or
instrument, but only upon receipt of evidence reasonably satisfactory to the
Company of such loss, theft or destruction and customary and reasonable
indemnity, if requested. The applicants for a new certificate or instrument
under such circumstances shall also pay any reasonable third-party costs
associated with the issuance of such replacement Securities.

     5.14 Remedies. In addition to being entitled to exercise all rights
provided herein or granted by law, including recovery of damages, each of the
Purchasers and the Company will be entitled to specific performance under the
Transaction Documents. The

                                       27
<PAGE>

parties agree that monetary damages may not be adequate compensation for
any loss incurred by reason of any breach of obligations described in the
foregoing sentence and hereby agrees to waive in any action for specific
performance of any such obligation the defense that a remedy at law would be
adequate.

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

     5.16 Independent Nature of Purchasers' Obligations and Rights. The
obligations of each Purchaser under any Transaction Document are several and not
joint with the obligations of any other Purchaser, and no Purchaser shall be
responsible in any way for the performance of the obligations of any other
Purchaser under any Transaction Document. Nothing contained herein or in any
Transaction Document, and no action taken by any Purchaser pursuant thereto,
shall be deemed to constitute the Purchasers as a partnership, an association, a
joint venture or any other kind of entity, or create a presumption that the
Purchasers are in any way acting in concert or as a group with respect to such
obligations or the transactions contemplated by the Transaction Document. Each
Purchaser shall be entitled to independently protect and enforce its rights,
including without limitation, the rights arising out of this Agreement or out of
the other Transaction Documents, and it shall not be necessary for any other
Purchaser to be joined as an additional party in any proceeding for such
purpose. Each Purchaser has been represented by its own separate legal counsel
in their review and negotiation of the Transaction Documents. For reasons of
administrative convenience only, Purchasers and their respective counsel have
chosen to communicate with the Company through FW. FW does not represent any of
the Purchasers in this transaction other than BlueGrass. The Company has elected
to provide all Purchasers with the same terms and Transaction Documents for the
convenience of the Company and not because it was required or requested to do so
by the Purchasers.

     5.17 Liquidated Damages. The Company's obligations to pay any partial
liquidated damages or other amounts owing under the Transaction Documents is a
continuing obligation of the Company and shall not terminate until all unpaid
partial liquidated damages and other amounts have been paid notwithstanding the
fact that the instrument or security pursuant to which such partial liquidated
damages or other amounts are due and payable shall have been canceled.

                            (Signature Page Follows)

                                       28
<PAGE>

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

RIVIERA TOOL COMPANY                                   Address for Notice:

By:__________________________________________          Riviera Tool Company
     Name:  Peter C. Canepa                            5460 Executive Parkway SE
     Title:  Chief Financial Officer                   Grand Rapids, MI 29512

With a copy to (which shall not constitute notice):

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

                                       29
<PAGE>

        [PURCHASER SIGNATURE PAGES TO RTC SECURITIES PURCHASE AGREEMENT]

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

Name of Investing Entity: ______________________________________________________
Signature of Authorized Signatory of Investing Entity: _________________________
Name of Authorized Signatory: __________________________________________________
Title of Authorized Signatory: _________________________________________________
Email Address of Authorized Entity:_____________________________________________

Address for Notice of Investing Entity:

Address for Delivery of Securities for Investing Entity (if not same as above):

Subscription Amount:
Shares:
Warrant Shares:
EIN Number:  [PROVIDE THIS UNDER SEPARATE COVER]

                           [SIGNATURE PAGES CONTINUE]

                                       30
<PAGE>

                                    EXHIBIT A

                          REGISTRATION RIGHTS AGREEMENT

                                SEE EXHIBIT 10.1

                                        1
<PAGE>

                                    EXHIBIT B

                            FORM OF SERIES A WARRANT

                                SEE EXHIBIT 10.2

                                        1
<PAGE>

                                    EXHIBIT C

                            FORM OF SERIES B WARRANT

                                SEE EXHIBIT 10.3

                                        1

<PAGE>

                                    EXHIBIT D

                               FORM OF GT OPINION

                                                                 March 16, 2004

To each of the Purchasers set forth
on Schedule A attached hereto

                   Re: Riviera Tool Company - Securities Purchase Agreement

Ladies and Gentlemen:

     We have acted as special counsel to Riviera Tool Company (the "Company") in
connection with the preparation, authorization, execution and delivery of, and
the consummation by the Company of the issuance and sale of $1,500,000 of common
stock, no par value (the "Common Stock"), of the Company and warrants (the
"Warrants" and, together with the Common Stock, the "Securities") to purchase
Common Stock of the Company pursuant to that certain Securities Purchase
Agreement, dated as of March 16, 2004 (the "Agreement"), by and among the
Company, and such other persons or entities identified on the signature pages
thereto (collectively, the "Purchasers"). All capitalized terms used but not
otherwise defined herein have the respective meanings assigned to them in the
Agreement.

     This opinion is furnished to you pursuant to Section 2.2(vi) of the
Agreement solely for your benefit.

     In so acting, we have examined originals or copies (certified or otherwise
identified to our satisfaction) of the Agreement, the Stockholders' Agreement
and the Warrants (collectively, the "Documents"), and such corporate records,
agreements, documents and instruments, and such certificates or comparable
documents of public officials and governmental authorities and of officers and
representatives of the Company, and have made such inquiries of such officers
and representatives, as we have deemed relevant and necessary as a basis for the
opinions hereafter set forth.

     In such examination, we have assumed the genuineness of all signatures, the
legal capacity of natural persons, the authenticity of all documents submitted
to us as originals, the conformity to original documents of all documents
submitted to us as certified, conformed or photostatic copies, and the
authenticity of the originals of such latter documents. As to all questions of
fact material to this opinion that have not independently been established by
us, we have relied upon certifications or comparable documents of officers and
representatives of the Company and upon the representations and warranties of
the Company contained in the Agreement.

     As used herein, "to our knowledge," "of which we are aware" and all
correlative and analogous phrases mean the conscious awareness of facts or other

                                       1
<PAGE>

information by those attorneys in our firm actively involved in the transactions
contemplated by the Agreement and do not: include constructive notice of any
matters or information, and, other than conferences with executive officers of
the Company and our review of the Documents to the extent stated above, do not
imply that we have undertaken any independent inquiries or investigations (x)
with any persons outside of our firm, (y) as to the accuracy or completeness of
any factual representations, information or any other matters made or furnished
in connection with the transactions contemplated by the Agreement, or (z) as to
any instruments or agreements other than the Documents. Moreover, such phrases
mean only that nothing has come to our attention that leads us to believe that
there exists any facts or circumstances contradicting the statement that follows
and do not imply that we know the statement to be correct or to have any basis,
other than the Documents and said conversations.

     Moreover, we note that as special counsel to the Company, our
representation of the Company is necessarily limited to such specific and
discrete matters referred to us from time to time by representatives of the
Company. Accordingly, we do not have and you should not infer from our
representation of the Company in this particular instance that we have any
knowledge of the Company's affairs or transactions other than as expressly set
forth in this opinion letter.

     For purposes of this opinion, we have assumed that you have all requisite
power and authority, and have taken any and all necessary corporate action, to
execute and deliver the Agreements, and we are assuming that the representations
and warranties made by each Purchaser in the Agreements and pursuant thereto are
true and correct.

     The opinions contained in this opinion letter merely constitute expressions
of our reasoned professional judgment regarding the matters of law addressed
herein and neither are intended nor should they be construed as a prediction or
guarantee that any court or other public or governmental authority will reach
any particular result or conclusion as to the matters of law addressed herein.

     Based on the foregoing, and subject to the qualifications and assumptions
stated herein, we are of the opinion that:

     1. In reliance solely on the opinion letter of Law Weathers & Richardson,
P.C. (the "LWR Opinion"), dated March 16, 2004, and subject to the assumptions,
qualifications and limitations set forth therein and to the exceptions and
limitations expressed below in this paragraph 1, the Company is a corporation
duly incorporated, validly existing and in good standing under the laws of
Michigan and has all requisite corporate power and authority to own, lease and
operate its properties as described in the Company's SEC Documents and to
conduct its business as presently being conducted. To our knowledge, the Company
does not have any Subsidiaries and does not own more than fifty percent (50%) of
the outstanding capital stock of or control any other business entity.

     2. Based solely upon the review of the Company's articles of incorporation
and by-laws, requisite corporate resolutions and approvals of the Company,

                                        2
<PAGE>

and without any further inquiry, the Company has all requisite corporate
power and authority to execute and deliver the Documents and to perform the
obligations thereunder. The execution, delivery and performance of the Documents
by the Company and the consummation by the Company of the transactions
contemplated thereby have been duly authorized by all requisite corporate action
on the part of the Company.

     3. The Documents have been duly and validly executed and delivered by the
Company (assuming the due authorization, execution and delivery thereof by each
of the Purchasers) constitutes the legal, valid and binding obligation of the
Company, enforceable against it in accordance with its terms, subject to
applicable bankruptcy, insolvency, fraudulent conveyance, reorganization,
conservatorship, moratorium and similar laws affecting creditors' rights and
remedies generally, and subject, as to enforceability, to general principles of
equity, including principles of commercial reasonableness, good faith and fair
dealing (irrespective of whether enforcement is sought in a proceeding at law or
in equity) and except that rights to indemnification and contribution hereunder
may be limited by federal or state securities laws or public policy relating
hereto.

     4. To our knowledge and based solely on the Certificate of Incorporation of
the Company, as amended, and a certificate of an officer of the Company, dated
March 16, 2004, immediately prior to the consummation of the transactions
contemplated by the Agreement, the authorized capital stock of the Company
consists of 9,798,575 shares of Common Stock, of which 3,379,609 shares are
issued and outstanding and 7,000 shares of preferred stock, no par value, of
which none are issued and outstanding.

     5. Assuming the accuracy of the information provided by the Purchasers in
the Agreement and that the parties thereto have complied with the requirements
of Section 4(2) of the Securities Act (and the provisions of Regulation D
promulgated thereunder), the Securities to be issued by the Company pursuant to
the Agreement have been duly authorized and, when issued and delivered in the
manner contemplated by the Documents, will be validly issued, fully paid and
nonassessable, and free of preemptive rights arising under law or pursuant to
the Company's articles of incorporation; and the shares of Common Stock for
which the Warrants are exercisable at the initial exercise price has been duly
authorized and, when issued and delivered in the manner contemplated by the
Documents, will be validly issued, fully paid and nonassessable, and free of
preemptive rights arising under law or pursuant to the Company's certificate of
incorporation.

     6. The execution, delivery and performance of the Documents by the Company
and the consummation by the Company of the transactions contemplated thereby,
including, without limitation, the issuance of the Securities, does not and will
not (i) result in a violation of the Company's articles of incorporation or
by-laws; (ii) conflict with, or constitute a material default (or an event that
with notice or lapse of time or both would become a default) under, require a
consent under, or give to others any rights of termination, amendment,
acceleration or cancellation of, any "material agreement" within the meaning set
forth in Item 601(b)(10) of Regulation S-K of Title 17, Part 229 of the

                                        3
<PAGE>

Code of Federal Regulations to which the Company is a party and which the
Company has filed as an exhibit to its SEC Reports; or (iii) result in a
violation of any Federal or State law, rule or regulation or any rule or
regulation of the Trading Market applicable to the Company or by which any
property or asset of the Company is bound or affected, except for such
violations as would not, individually or in the aggregate, have a Material
Adverse Effect.

     7. To our knowledge and except as set forth on the Disclosure Schedules,
there is no litigation, proceeding or public or governmental investigation
pending or threatened in writing against the Company that relates to the
transactions contemplated by this Agreement or which, if determined adversely to
the Company, could reasonably be expected to have a Company Material Adverse
Effect; and we have not been engaged by the Company to give substantive
attention to or to represent the Company in connection with any such litigation,
proceeding or investigation.

     8. In reliance solely on the LWR Opinion, and subject to the assumptions,
qualifications and limitations set forth therein and to the exceptions and
limitations expressed below in this paragraph 8, the Company has taken all
necessary action, if any, in order to render inapplicable any control share
acquisition, business combination, poison pill (including any distribution under
a rights agreement) or other similar anti-takeover provision under the Company's
articles of incorporation (or similar charter documents) or the laws of the
State of Michigan that is or could become applicable to the Purchasers as a
result of the Purchasers and the Company fulfilling their respective obligations
or exercising their rights under the Documents, including without limitation, as
a result of the Company's issuance of the Securities and the Purchasers'
ownership of the Securities.

     The opinions expressed herein are limited to the laws of the State of New
York and the federal laws of the United States, and we express no opinion as to
the effect on the matters covered by this letter of the laws of any other
jurisdiction.

     The opinions expressed herein are written as of and relate solely to the
date hereof and are rendered exclusively for your benefit in connection with the
transactions described herein. The opinions expressed herein may not be used or
relied upon by any other person or entity, nor may this opinion letter or any
copies or excerpts thereof be furnished to a third party, filed with a public or
governmental authority, quoted, cited or otherwise referred to without our prior
written consent.

                                                     Very truly yours,

                                                     Greenberg Traurig, LLP

                                        4
<PAGE>

                                   SCHEDULE A

                             Vertical Ventures, LLC
                               641 Lexington Ave.
                                   26th Floor
                               New York, NY 10022
                            Attention: Josh Silverman

                            Bluegrass Growth Fund, LP
                              115 East 57th Street
                                   Suite 1111
                               New York, NY 10022
                           Attention: Deborah Solomon

                              Iroquois Capital, LP
                               641 Lexington Ave.
                                   26th Floor
                               New York, NY 10022
                            Attention: Josh Silverman

                         Capital Ventures International
                              425 California Street
                                   Suite 1100
                      San Francisco, California 94104-2113
                           Attention: Martin KobingerEXHIBIT 10.1

                          SECURITIES PURCHASE AGREEMENT

      This Securities Purchase Agreement (this "Agreement") is dated as of April
27, 2004 by and between Cosi, Inc., a Delaware corporation (the "Company"), and
each purchaser identified on the signature pages hereto (each, a "Purchaser" and
collectively, the "Purchasers").

      WHEREAS, subject to the terms and conditions set forth in this Agreement
and pursuant to Section 4(2) of the Securities Act of 1933, as amended, the
Company desires to issue and sell to each Purchaser, and each Purchaser,
severally and not jointly, desires to purchase from the Company, certain
securities of the Company as more fully described in this Agreement.

      NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in this
Agreement, and for other good and valuable consideration the receipt and
adequacy of which are hereby acknowledged, the Company and each of the
Purchasers agree as follows:

                                    ARTICLE I
                                   DEFINITIONS

      1.1 Definitions. In addition to the terms defined elsewhere in this
Agreement, the following terms have the meanings indicated:

            "Affiliate" means any Person that, directly or indirectly through
      one or more intermediaries, controls or is controlled by or is under
      common control with a Person, as such terms are used in and construed
      under Rule 144 promulgated under the Securities Act.

            "Business Day" means any day other than Saturday, Sunday or other
      day on which commercial banks in The City of New York are authorized or
      required by law to remain closed.

            "Closing" means the closing of the purchase and sale of the Shares
      pursuant to Section 2.1.

            "Closing Date" means the date of the Closing.

            "Closing Price" means, for any date, the price determined by the
      first of the following clauses that applies: (a) if the Common Stock is
      then listed or quoted on an Eligible Market or any other national
      securities exchange, the closing price per share of the Common Stock for
      such date (or the nearest preceding date) on the primary Eligible Market
      or exchange on which the Common Stock is then listed or quoted; (b) if
      prices for the Common Stock are then quoted on the OTC Bulletin Board, the
      closing bid price per share of the Common Stock for such date (or the
      nearest preceding date) so quoted; (c) if prices for the Common Stock are
      then reported in the "Pink Sheets" published by the National Quotation
      Bureau Incorporated (or a similar organization or agency succeeding to its
      functions of reporting prices), the most recent closing bid price per
      share of the Common Stock so reported; or (d) in all other cases, the fair
      market value of a share of Common Stock as determined by an independent
      appraiser selected in good faith by a majority-in-interest of the
      Purchasers.

            "Commission" means the Securities and Exchange Commission.

            "Common Stock" means the common stock of the Company, par value
      $0.01 per share.

            "Common Stock Equivalents" means, collectively, Options and
      Convertible Securities.

            "Company Counsel" means Cadwalader, Wickersham & Taft LLP, counsel
      to the Company.

            "Convertible Securities" means any stock or securities (other than
      Options) convertible into or exercisable or exchangeable for Common Stock.

            "Effective Date" means the date that the Registration Statement is
      first declared effective by the Commission.

            "Eligible Market" means any of the New York Stock Exchange, the
      American Stock Exchange, the Nasdaq National Market or the Nasdaq Small
      Cap Market.

            "Exchange Act" means the Securities Exchange Act of 1934, as
      amended.

            "Excluded Stock" means the issuance of Common Stock (A) upon
      exercise or conversion of any rights, warrants, options or other
      securities or pursuant to any rights held by existing stockholders, (B) in
      connection with any grant of options or stock to employees, officers,
      directors or consultants of the Company pursuant to a stock incentive plan
      duly adopted by the Company's board of directors or in respect of the
      issuance of Common Stock upon exercise of any such options, (C) pursuant
      to a bona fide firm commitment underwritten public offering with a
      nationally recognized underwriter (excluding any equity line) in an
      aggregate offering amount greater than $25,000,000, (D) in connection with
      any collaboration or joint venture approved by the Company's board of
      directors and not for the principal purpose of raising cash or (E)
      pursuant to the Company's bona fide acquisition of another corporation, or
      all or a portion of its assets, by merger, purchase of assets or stock or
      other corporate reorganization in each case, as approved by the Company's
      board of directors and not for the principal purpose of raising capital.

            "Filing Date" means the 30th day following the Closing Date.

            "Lien" means any lien, charge, claim, security interest,
      encumbrance, right of first refusal or other restriction.

            "Losses" means any and all losses, claims, damages, liabilities,
      settlement costs and expenses, including, without limitation, costs of
      preparation and reasonable attorneys' fees.

            "Options" means any rights, warrants or options to subscribe for or
      purchase Common Stock or Convertible Securities.

            "Per Share Purchase Price" means $5.65.

            "Person" means any individual or corporation, partnership, trust,
      incorporated or unincorporated association, joint venture, limited
      liability company, joint stock company, government (or an agency or
      subdivision thereof) or any court or other federal, state, local or other
      governmental authority or other entity of any kind.

            "Proceeding" means an action, claim, suit, investigation or
      proceeding (including, without limitation, an investigation or partial
      proceeding, such as a deposition), whether commenced or threatened.

            "Prospectus" means the prospectus included in the Registration
      Statement (including, without limitation, a prospectus that includes any
      information previously omitted from a prospectus filed as part of an
      effective registration statement in reliance upon Rule 430A promulgated
      under the Securities Act), as amended or supplemented by any prospectus
      supplement, with respect to the terms of the offering of any portion of
      the Registrable Securities covered by the Registration Statement, and all
      other amendments and supplements to the Prospectus, including
      post-effective amendments, and all material incorporated by reference or
      deemed to be incorporated by reference in such Prospectus.

            "Purchaser Counsel" has the meaning set forth in Section 6.2(a).

            "Registrable Securities" means any Common Stock issued or issuable
      pursuant to the Transaction Documents, together with any securities issued
      or issuable upon any stock split, dividend or other distribution,
      recapitalization or similar event with respect to the foregoing. Shares of
      Common Stock shall cease to be Registrable Securities when (i) a
      registration statement with respect to the sale of such shares of Common
      Stock shall have become effective under the Securities Act and such shares
      of Common Stock shall have been disposed of pursuant to such registration
      statement, (ii) such shares of Common Stock shall have been sold or
      otherwise distributed pursuant to Rule 144 (or any successor provision)
      and Rule 145 (or any successor provision) under the Securities Act, (iii)
      such securities are eligible for sale or other distribution under Rule
      144(k) (or any successor provision) and (iv) such shares of Common Stock
      shall have ceased to be outstanding.

            "Registration Statement" means the initial registration statement
      required to be filed under Article VI, including the Prospectus,
      amendments and supplements to such registration statement or Prospectus,
      including pre- and post-effective amendments, all exhibits thereto, and
      all material incorporated by reference or deemed to be incorporated by
      reference in such registration statement.

            "Required Effectiveness Date" means the 90th day after the Closing
      Date.

            "Rule 144," "Rule 415," and "Rule 424" means Rule 144, Rule 415 and
      Rule 424, respectively, promulgated by the Commission pursuant to the
      Securities Act, as such Rules may be amended from time to time, or any
      similar rule or regulation hereafter adopted by the Commission having
      substantially the same effect as such Rule.

            "Securities" means the Shares.

            "Securities Act" means the Securities Act of 1933, as amended.

            "Shares" means an aggregate of 3,550,000 shares of Common Stock,
      which are being issued and sold to the Purchasers at the Closing.

            "Subsidiary" means any Person in which the Company, directly or
      indirectly, owns capital stock or holds an equity or similar interest.

            "Trading Day" means (a) any day on which the Common Stock is listed
      or quoted and traded on its primary Trading Market, (b) if the Common
      Stock is not then listed or quoted and traded on any Eligible Market, then
      a day on which trading occurs on the NASDAQ National Market (or any
      successor thereto), or (c) if trading does not occur on the NASDAQ
      National Market (or any successor thereto), any Business Day.

            "Trading Market" means the NASDAQ National Market or any other
      Eligible Market on which the Common Stock is then listed or quoted.

            "Transaction Documents" means this Agreement and any other documents
      or agreements executed in connection with the transactions contemplated
      hereunder.

            "Transfer Agent" means American Stock Transfer & Trust Co., or any
      other transfer agent selected by the Company.

                                   ARTICLE II
                                PURCHASE AND SALE

      2.1 Closing. Subject to the terms and conditions set forth in this
Agreement, at the Closing the Company shall issue and sell to each Purchaser,
and each Purchaser shall, severally and not jointly, purchase from the Company,
such number of Shares, each as indicated below such Purchaser's name on the
signature page of this Agreement, for an aggregate purchase price for such
Purchaser as indicated below such Purchaser's name on the signature page of this
Agreement. The Closing shall take place at the offices of Company Counsel on
Friday, April 30, 2004, or at such other location or time as the parties may
agree.

      2.2 Closing Deliveries.

            (a) At the Closing, the Company shall deliver or cause to be
      delivered to each Purchaser the following:

                  (i) one or more stock certificates, free and clear of all
            restrictive and other legends (except as expressly provided in
            Section 4.1(b) hereof), evidencing the number of Shares indicated
            below such Purchaser's name on the signature page of this Agreement,
            registered in the name of such Purchaser; and

                  (ii) a legal opinion of Company Counsel, in the form of
            Exhibit A, executed by such counsel and delivered to the Purchasers.

            (b) At the Closing, each Purchaser shall deliver or cause to be
      delivered to the Company an amount equal to product of (i) the number of
      Shares indicated below such Purchaser's name on the signature page of this
      Agreement, and (ii) the Per Share Purchase Price, in United States dollars
      and in immediately available funds, by wire transfer to an account
      designated in writing by the Company for such purpose.

                                   ARTICLE III
                         REPRESENTATIONS AND WARRANTIES

      3.1 Representations and Warranties of the Company. The Company hereby
represents and warrants to each of the Purchasers as follows:

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

            (b) Organization and Qualification. Each of the Company and the
      Subsidiaries is an entity duly organized, validly existing and in good
      standing under the laws of the jurisdiction of its incorporation or
      organization (as applicable), with the requisite corporate power and
      authority to own and use its properties and assets and to carry on its
      business as currently conducted. Neither the Company nor any Subsidiary is
      in violation of any of the provisions of its respective certificate or
      articles of incorporation, bylaws or other organizational or charter
      documents. Each of the Company and the Subsidiaries is duly qualified to
      do business and is in good standing as a foreign corporation or other
      entity in each jurisdiction in which the nature of the business conducted
      or property owned by it makes such qualification necessary, except where
      the failure to be so qualified or in good standing, as the case may be,
      would not, individually or in the aggregate, reasonably be expected to (i)
      materially and adversely affect the legality, validity or enforceability
      of any Transaction Document, (ii) have or result in a material adverse
      effect on the results of operations, assets, business or condition
      (financial or otherwise) of the Company and the Subsidiaries, taken as a
      whole, or (iii) adversely impair the Company's ability to perform fully on
      a timely basis its obligations under any of the Transaction Documents (any
      of (i), (ii) or (iii), a "Material Adverse Effect").

            (c) Authorization; Enforcement. The Company has the requisite
      corporate power and authority to enter into and to consummate the
      transactions contemplated by each of the Transaction Documents and
      otherwise to carry out its obligations hereunder and thereunder. The
      execution and delivery of each of the Transaction Documents by the Company
      and the consummation by it of the transactions contemplated hereby and
      thereby have been duly authorized by all necessary action on the part of
      the Company and no further consent or action is required by the Company,
      its Board of Directors or its stockholders in connection therewith. Each
      of the Transaction Documents has been (or upon delivery will be) duly
      executed by the Company and is, or when delivered in accordance with the
      terms hereof, will constitute, the valid and binding obligation of the
      Company enforceable against the Company in accordance with its terms,
      except as may be limited by (i) applicable bankruptcy, insolvency,
      reorganization, moratorium, fraudulent conveyance or other laws of general
      application relating to or affecting the enforcement of creditors rights
      generally, and (ii) the effect of rules of law governing the availability
      of specific performance and other equitable remedies.

            (d) No Conflicts. The execution, delivery and performance of the
      Transaction Documents by the Company and the consummation by the Company
      of the transactions contemplated hereby and thereby do not and will not
      (i) conflict with or violate any provision of the Company's or any
      Subsidiary's certificate or articles of incorporation, bylaws or other
      organizational or charter documents, (ii) conflict with, or constitute a
      default (or an event that with notice or lapse of time or both would
      become a default) under, or give to others any rights of termination,
      amendment, acceleration or cancellation (with or without notice, lapse of
      time or both) of, any agreement, credit facility, debt or other instrument
      (evidencing a Company or Subsidiary debt or otherwise) to which the
      Company or any Subsidiary is a party or by which any property or asset of
      the Company or any Subsidiary is bound or affected, except to the extent
      that such conflict, default, termination, amendment, acceleration or
      cancellation right would not reasonably be expected to have a Material
      Adverse Effect, or (iii) result in a violation of any law, rule,
      regulation, order, judgment, injunction, decree or other restriction of
      any court or governmental authority to which the Company or a Subsidiary
      is subject (including federal and state securities laws and regulations
      and the rules and regulations of any self-regulatory organization to which
      the Company or its securities are subject), or by which any property or
      asset of the Company or a Subsidiary is bound or affected, except to the
      extent that such violation would not reasonably be expected to have a
      Material Adverse Effect.

            (e) Issuance of the Securities. The Securities are duly authorized
      and, when issued and paid for in accordance with the Transaction
      Documents, will be duly and validly issued, fully paid and nonassessable,
      free and clear of all Liens and shall not be subject to preemptive rights
      or similar rights of stockholders.

            (f) Capitalization. As of the date hereof, and except as may vary as
      a result of the exercise of employee stock options since April 12, 2004,
      the number of shares and type of all authorized, issued and outstanding
      capital stock, options and other securities of the Company (whether or not
      presently convertible into or exercisable or exchangeable for shares of
      capital stock of the Company) is set forth in Schedule 3.1(f). All such
      outstanding shares of capital stock are duly authorized, validly issued,
      fully paid and nonassessable and have been issued in compliance with all
      applicable securities laws. Except as specifically disclosed in Schedule
      3.1(f), there are no outstanding options, warrants, script rights to
      subscribe to, calls or commitments of any character whatsoever relating
      to, or securities, rights or obligations convertible into or exercisable
      or exchangeable for, or any right to subscribe for or acquire, any shares
      of Common Stock, or contracts, commitments, understandings or arrangements
      by which the Company or any Subsidiary is or may become bound to issue
      additional shares of Common Stock, or securities or rights convertible or
      exchangeable into shares of Common Stock. Except as specifically disclosed
      in Schedule 3.1(f) and except for customary adjustments as a result of
      stock dividends, stock splits, combinations of shares, reorganizations,
      recapitalizations, reclassifications or other similar events, there are no
      anti-dilution or price adjustment provisions contained in any security
      issued by the Company (or in any agreement providing rights to security
      holders) and the issue and sale of the Securities will not obligate the
      Company to issue shares of Common Stock or other securities to any Person
      (other than the Purchasers) and will not result in a right of any holder
      of Company securities to adjust the exercise, conversion, exchange or
      reset price under such securities. Except as set forth on Schedule 3.1(f),
      to the knowledge of the Company, no Person or group of related Persons
      beneficially owns (as determined pursuant to Rule 13d-3 under the Exchange
      Act) in excess of 5% of the outstanding Common Stock, ignoring for such
      purposes any limitation on the number of shares of Common Stock that may
      be owned at any single time.

            (g) SEC Reports; Financial Statements. The Company has filed all
      reports required to be filed by it under the Securities Act and the
      Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, since
      the Company's initial public offering (the foregoing materials being
      collectively referred to herein as the "SEC Reports" and, together with
      this Agreement and the Schedules to this Agreement, the "Disclosure
      Materials") on a timely basis or has received a valid extension of such
      time of filing and has filed any such SEC Reports prior to the expiration
      of any such extension. The Company has delivered to the Purchasers a copy
      of all SEC Reports filed after April 24, 2004. As of their respective
      dates, the SEC Reports complied in all material respects with the
      requirements of the Securities Act and the Exchange Act and the rules and
      regulations of the Commission promulgated thereunder, and none of the SEC
      Reports, when filed, contained any untrue statement of a material fact or
      omitted to state a material fact required to be stated therein or
      necessary in order to make the statements therein, in the light of the
      circumstances under which they were made, not misleading, except to the
      extent that information contained in any SEC Report has been revised or
      superceded by a later filed SEC Report. The financial statements of the
      Company included in the SEC Reports comply in all material respects with
      applicable accounting requirements and the rules and regulations of the
      Commission with respect thereto as in effect at the time of filing. Such
      financial statements have been prepared in accordance with United States
      generally accepted accounting principles applied on a consistent basis
      during the periods involved ("GAAP"), except as may be otherwise specified
      in such financial statements or the notes thereto, and fairly present in
      all material respects the financial position of the Company and its
      consolidated subsidiaries as of and for the dates thereof and the results
      of operations and cash flows for the periods then ended, subject, in the
      case of unaudited statements, to normal, immaterial, year-end audit
      adjustments. All material agreements to which the Company or any
      Subsidiary is a party or to which the property or assets of the Company or
      any Subsidiary are subject are included as part of or specifically
      identified in the SEC Reports.

            (h) Material Changes. Since the date of the latest audited financial
      statements included within the SEC Reports, except as specifically
      disclosed in Schedule 3.1(h): (i) there has been no event, occurrence or
      development that, individually or in the aggregate, has had or that would
      reasonably be expected to result in a Material Adverse Effect, (ii) the
      Company has not incurred any material liabilities (contingent or
      otherwise) other than (A) trade payables and accrued expenses incurred in
      the ordinary course of business consistent with past practice and (B)
      liabilities not required to be reflected in the Company's financial
      statements pursuant to GAAP or required to be disclosed in filings made
      with the Commission, (iii) the Company has not altered its method of
      accounting or the identity of its auditors, (iv) the Company has not
      declared or made any dividend or distribution of cash or other property to
      its stockholders or purchased, redeemed or made any agreements to purchase
      or redeem any shares of its capital stock, and (v) the Company has not
      issued any equity securities to any officer, director or Affiliate, except
      pursuant to existing Company stock based plans.

            (i) Absence of Litigation. Except as specifically disclosed in
      Schedule 3.1(i), there is no action, suit, claim, proceeding, inquiry or
      investigation before or by any court, public board, government agency,
      self-regulatory organization or body pending or, to the knowledge of the
      Company, threatened against or affecting the Company or any of its
      Subsidiaries that would, individually or in the aggregate, reasonably be
      expected to have a Material Adverse Effect. Schedule 3.1(i) contains a
      complete list and summary description of any pending or, to the knowledge
      of the Company, threatened proceeding against or affecting the Company or
      any of its Subsidiaries that would, individually or in the aggregate,
      reasonably be expected to have a Material Adverse Effect.

            (j) Compliance. Neither the Company nor any Subsidiary, except in
      each case as would not, individually or in the aggregate, reasonably be
      expected to have or result in a Material Adverse Effect, (i) is in default
      under or in violation of (and no event has occurred that has not been
      waived that, with notice or lapse of time or both, would reasonably be
      expected to result in a default by the Company or any Subsidiary under),
      nor has the Company or any Subsidiary received notice of a claim that it
      is in default under or that it is in violation of, any indenture, loan or
      credit agreement or any other agreement or instrument to which it is a
      party or by which it or any of its properties is bound (whether or not
      such default or violation has been waived), (ii) is in violation of any
      applicable order of any court, arbitrator or governmental body, or (iii)
      is in violation of any applicable statute, rule or regulation of any
      governmental authority, including without limitation all foreign, federal,
      state and local laws relating to taxes, environmental protection,
      occupational health and safety, product quality and safety and employment
      and labor matters.

            (k) Title to Assets. The Company and the Subsidiaries have good and
      marketable title in fee simple to all real property owned by them that is
      material to the business of the Company and the Subsidiaries and good and
      marketable title in all personal property owned by them that is material
      to the business of the Company and the Subsidiaries, in each case free and
      clear of all Liens, except for (i) Liens securing the Company's equipment
      loan credit facility and (ii) other Liens as do not materially affect the
      value of such property and do not materially interfere with the use made
      of such property by the Company and the Subsidiaries. Except as
      specifically disclosed in Schedule 3.1(k), any real property and
      facilities held under lease by the Company and the Subsidiaries are held
      by them under valid, subsisting and enforceable leases of which the
      Company and the Subsidiaries are in compliance.

            (l) Certain Fees. Except for the fees to Banc of America Securities
      LLC as placement agent, and except as specifically disclosed in Schedule
      3.1(l), no brokerage or finder's fees or commissions are or will be
      payable by the Company to any broker, financial advisor or consultant,
      finder, placement agent, investment banker, bank or other Person with
      respect to the transactions contemplated by this Agreement, and the
      Company has not taken any action that could cause any Purchaser to be
      liable for any such fees or commissions.

            (m) Private Placement. Neither the Company nor any Person acting on
      the Company's behalf has sold or offered to sell or solicited any offer to
      buy the Securities that are being sold hereunder by means of any form of
      general solicitation or advertising. Neither the Company nor any of its
      Affiliates nor any Person acting on the Company's behalf has, directly or
      indirectly, at any time within the past six months, made any offer or sale
      of any security or solicitation of any offer to buy any security under
      circumstances that would (i) eliminate the availability of the exemption
      from registration under Regulation D under the Securities Act in
      connection with the offer and sale of the Securities as contemplated
      hereby or (ii) cause the offering of the Securities pursuant to the
      Transaction Documents to be integrated with prior offerings by the Company
      for purposes of any applicable law, regulation or stockholder approval
      provisions, including, without limitation, under the rules and regulations
      of any Trading Market. The Company is not, and is not an Affiliate of, an
      "investment company" within the meaning of the Investment Company Act of
      1940, as amended. The Company is not a United States real property holding
      corporation within the meaning of the Foreign Investment in Real Property
      Tax Act of 1980.

            (n) Form S-3 Eligibility. The Company is eligible to register its
      Common Stock for resale by the Purchasers using Form S-3 promulgated under
      the Securities Act.

            (o) Listing and Maintenance Requirements. Except as specifically
      disclosed in Schedule 3.1(o), the Company has not, in the two years
      preceding the date hereof, received notice (written or oral) from any
      Trading Market on which the Common Stock is or has been listed or quoted
      to the effect that the Company is not in compliance with the listing or
      maintenance requirements of such Trading Market. The Company is, and has
      no reason to believe that it will not in the foreseeable future continue
      to be, in compliance with all such material listing and maintenance
      requirements.

            (p) Registration Rights. Except as set forth in Schedule 3.1(p), the
      Company has not granted or agreed to grant to any Person any rights
      (including "piggy-back" registration rights) to have any securities of the
      Company registered with the Commission or any other governmental authority
      that have not been satisfied.

            (q) Application of Takeover Protections. Except as set forth in
      Schedule 3.1(q), there is no control share acquisition, business
      combination, poison pill (including any distribution under a rights
      agreement) or other similar anti-takeover provision under the Company's
      charter documents or the laws of its state of incorporation that is or
      would become applicable to any of the Purchasers as a result of the
      Purchasers and the Company fulfilling their obligations or exercising
      their rights under the Transaction Documents, including, without
      limitation, as a result of the Company's issuance of the Securities and
      the Purchasers' ownership of the Securities.

            (r) Disclosure. The Company confirms that neither it nor any other
      Person acting on its behalf has provided any of the Purchasers or their
      agents or counsel with any information that, at the time of the Closing,
      constitutes or might constitute material, nonpublic information, except
      for such information as will be disclosed in the 8-K Filing (defined
      below). The Company understands and confirms that each of the Purchasers
      will rely on the foregoing representations in effecting transactions in
      securities of the Company. All disclosure provided to the Purchasers
      regarding the Company, its business and the transactions contemplated
      hereby, including the Schedules to this Agreement, furnished by or on
      behalf of the Company are true and correct in all material respects and do
      not contain any untrue statement of a material fact or omit to state any
      material fact necessary in order to make the statements made therein, in
      the light of the circumstances under which they were made, not misleading
      at the time of the Closing. No event or circumstance has occurred or
      information exists at the time of the Closing with respect to the Company
      or any of its Subsidiaries or its or their business, properties,
      operations or financial condition, which, under applicable law, rule or
      regulation, requires public disclosure or announcement by the Company but
      which has not been so publicly announced or disclosed (assuming for this
      purpose that the Company's reports filed under the Exchange Act are being
      incorporated into an effective registration statement filed by the Company
      under the Securities Act). The Company acknowledges and agrees that no
      Purchaser makes or has made (i) any representations or warranties with
      respect to the transactions contemplated hereby other than those
      specifically set forth in Section 3.2 or (ii) any statement, commitment or
      promise to the Company or, to its knowledge, any of its representatives
      which is or was an inducement to the Company to enter into this Agreement
      or otherwise or (iii) any oral statement, commitment or promise to the
      Company or, to its knowledge, any of its representatives which is or was
      an inducement to the Company to enter into this Agreement or otherwise.

            (s) Acknowledgment Regarding Purchasers' Purchase of Securities. The
      Company acknowledges and agrees that each of the Purchasers is acting
      solely in the capacity of an arm's length purchaser with respect to the
      Transaction Documents and the transactions contemplated hereby and
      thereby. The Company further acknowledges that no Purchaser is acting as a
      financial advisor or fiduciary of the Company or any other Purchaser (or
      in any similar capacity) with respect to the Transaction Documents and the
      transactions contemplated hereby and thereby and any advice given by any
      Purchaser or any of their respective representatives or agents in
      connection with the Transaction Documents and the transactions
      contemplated hereby and thereby is merely incidental to such Purchaser's
      purchase of the Securities. The Company further represents to each
      Purchaser that the Company's decision to enter into this Agreement has
      been based solely on the independent evaluation of the transactions
      contemplated hereby by the Company and its representatives.

            (t) Patents and Trademarks. The Company and the Subsidiaries have,
      or have rights to use, all patents, patent applications, trademarks,
      trademark applications, service marks, trade names, copyrights, licenses
      and other similar rights that are necessary or material for use in
      connection with their respective businesses as described in the SEC
      Reports and which the failure to so have would reasonably be expected to
      have a Material Adverse Effect (collectively, the "Intellectual Property
      Rights"). Except as specifically disclosed in Schedule 3.1(t), neither the
      Company nor any Subsidiary has received a written notice that the
      Intellectual Property Rights used by the Company or any Subsidiary
      currently violates or infringes upon the rights of any Person. To the
      knowledge of the Company, all such Intellectual Property Rights are
      enforceable and, except as specifically disclosed in Schedule 3.1(t),
      there is no existing infringement by another Person of any of the
      Intellectual Property Rights.

            (u) Insurance. The Company and the Subsidiaries are insured by
      insurers of recognized financial responsibility against such losses and
      risks and in such amounts as are prudent and customary in the businesses
      in which the Company and the Subsidiaries are engaged. Neither the Company
      nor any Subsidiary has any reason to believe that it will not be able to
      renew its existing insurance coverage as and when such coverage expires or
      to obtain similar coverage from similar insurers as may be necessary to
      continue its business without a significant increase in cost.

            (v) Regulatory Permits. The Company and the Subsidiaries possess all
      certificates, authorizations and permits issued by the appropriate
      federal, state, local or foreign regulatory authorities necessary to
      conduct their respective businesses as described in the SEC Reports,
      except where the failure to possess such permits would not, individually
      or in the aggregate, reasonably be expected to have or result in a
      Material Adverse Effect ("Material Permits"), and neither the Company nor
      any Subsidiary has received any notice of proceedings relating to the
      revocation or modification of any Material Permit.

            (w) Transactions With Affiliates and Employees. Except as set forth
      in Schedule 3.1(w), none of the officers or directors of the Company and,
      to the knowledge of the Company, none of the employees of the Company is
      presently a party to any transaction with the Company or any Subsidiary
      (other than for services as employees, officers and directors or the grant
      of stock options, restricted stock or stock pursuant to the stock based
      plans described in the SEC Reports in connection with such service),
      including any contract, agreement or other arrangement providing for the
      furnishing of services to or by, providing for rental of real or personal
      property to or from, or otherwise requiring payments to or from any
      officer, director or such employee or, to the knowledge of the Company,
      any entity in which any officer, director, or any such employee has a
      substantial interest or is an officer, director, trustee or partner.

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

            (y) Solvency. After taking into account the proceeds from this
      transaction, based on the financial condition of the Company as of the
      Closing Date, (i) the Company's fair saleable value of its assets exceeds
      the amount that will be required to be paid on or in respect of the
      Company's existing debts and other liabilities (including known contingent
      liabilities) as they mature; (ii) the Company's assets do not constitute
      unreasonably small capital to carry on its business for the current fiscal
      year as now conducted and as proposed to be conducted including its
      capital needs taking into account the particular capital requirements of
      the business conducted by the Company, and projected capital requirements
      and capital availability thereof; and (iii) the current cash flow of the
      Company, together with the proceeds the Company would receive, were it to
      liquidate all of its assets, after taking into account all anticipated
      uses of the cash, would be sufficient to pay all amounts on or in respect
      of its debt when such amounts are required to be paid. The Company does
      not intend to incur debts beyond its ability to pay such debts as they
      mature (taking into account the timing and amounts of cash to be payable
      on or in respect of its debt).

            (z) Sarbanes-Oxley Act. The Company is in compliance with applicable
      requirements of the Sarbanes-Oxley Act of 2002 and applicable rules and
      regulations promulgated by the Commission thereunder in effect and which
      require compliance as of the date hereof as of the date of this Agreement,
      except where such noncompliance would not be reasonably expected to have,
      individually or in the aggregate, a Material Adverse Effect.

            (aa) Press Releases. Each press release disseminated by the Company
      since the closing of its initial public offering on November 25, 2002 and
      preceding the date of this Agreement did not at the time of release
      contain any untrue statement of a material fact or omit to state a
      material fact required to be stated therein or necessary in order to make
      the statements therein, in light of the circumstances under which they
      were made, not misleading.

      3.2 Representations and Warranties of the Purchasers. Each Purchaser
hereby, as to itself only and for no other Purchaser, represents and warrants to
the Company as follows:

            (a) Organization; Authority. Such Purchaser is an entity duly
      organized, validly existing and in good standing under the laws of the
      jurisdiction of its organization with the requisite corporate or
      partnership power and authority to enter into and to consummate the
      transactions contemplated by the Transaction Documents and otherwise to
      carry out its obligations hereunder and thereunder. The purchase by such
      Purchaser of the Shares hereunder has been duly authorized by all
      necessary action on the part of such Purchaser. This Agreement has been
      duly executed and delivered by such Purchaser and constitutes the valid
      and binding obligation of such Purchaser, enforceable against it in
      accordance with its terms.

            (b) Purchase Intent. Such Purchaser is acquiring the Securities for
      investment purposes only and not with a view to or for distributing or
      reselling such Securities or any part thereof, without prejudice, however,
      to such Purchaser's right, subject to the provisions of this Agreement, at
      all times to sell or otherwise dispose of all or any part of such
      Securities pursuant to an effective registration statement under the
      Securities Act or under an exemption from such registration and in
      compliance with applicable federal and state securities laws. Such
      Purchaser understands that Purchaser must bear the economic risk of this
      investment indefinitely, unless the Securities are registered pursuant to
      the Securities Act and any applicable state securities or blue sky laws or
      an exemption from such registration is available, and that the Company has
      no present intention of registering the resale of any such Securities
      other than as contemplated by the registration rights contained herein.
      Nothing contained herein shall be deemed a representation or warranty by
      such Purchaser to hold Securities for any period of time.

            (c) Purchaser Status. At the time such Purchaser was offered the
      Shares, it was, and at the date hereof it is, an "accredited investor" as
      defined in Rule 501(a) under the Securities Act. Such Purchaser is not a
      member of the National Association of Securities Dealers, Inc.

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

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

            (f) Access to Information. Such Purchaser is knowledgeable,
      sophisticated and experienced in making, and is qualified to make,
      decisions with respect to investments in securities representing an
      investment decision like that involved in the purchase of the Securities.
      Such Purchaser acknowledges that it has reviewed the Disclosure Materials
      and has been afforded (i) the opportunity to ask such questions as it has
      deemed necessary of, and to receive answers from, representatives of the
      Company concerning the terms and conditions of the offering of the
      Securities and the merits and risks of investing in the Securities; (ii)
      access to information about the Company and the Subsidiaries and their
      respective financial condition, results of operations, business,
      properties, management and prospects sufficient to enable it to evaluate
      its investment; and (iii) the opportunity to obtain such additional
      information that the Company possesses or can acquire without unreasonable
      effort or expense that is necessary to make an informed investment
      decision with respect to the investment. Neither such inquiries nor any
      other investigation conducted by or on behalf of such Purchaser or its
      representatives or counsel shall modify, amend or affect such Purchaser's
      right to rely on the truth, accuracy and completeness of the Disclosure
      Materials and the Company's representations and warranties contained in
      the Transaction Documents. To the extent that any of the information such
      Purchaser has received from the Company is material non public
      information, such Purchaser has consented (subject to the Company's
      obligation to include such information in the 8-K Filing pursuant to
      Section 4.6) to the receipt of such material non public information. Such
      Purchaser understands that such Purchaser's investment in the Securities
      involves a high degree of risk.

            (g) Illegal Transactions. Purchaser will not, prior to the Effective
      Date, enter into any transaction that is in violation of the Securities
      Act.

            (h) No Legal, Tax or Investment Advice. Each Purchaser understands
      that nothing in this Agreement or any other materials presented by or on
      behalf of the Company to the Purchaser in connection with the purchase of
      the Securities constitutes legal, tax or investment advice. Each Purchaser
      has consulted such legal, tax and investment advisors as it, in its sole
      discretion, has deemed necessary or appropriate in connection with its
      purchase of the Securities. Such Purchaser understands that the Agent has
      acted solely as the agent of the Company in this placement of the
      Securities, and that the Agent makes no representation or warranty with
      regard to the merits of this transaction or as to the accuracy of any
      information such Purchaser may have received in connection therewith. Such
      Purchaser acknowledges that he has not relied on any information or advice
      furnished by or on behalf of the Agent.

            (i) Residency. If the Purchaser is located or domiciled outside the
      United States, it agrees to comply with all applicable laws and
      regulations in each foreign jurisdiction in which it purchases, offers,
      sells or delivers Shares or has in its possession or distributes any
      offering material, in all cases at its own expense.

            (j) Prospectus Delivery Requirements. Each Purchaser covenants and
      agrees to comply with the prospectus delivery requirements under the
      Securities Act with respect to all sales of Common Stock made pursuant to
      a registration statement.

                                   ARTICLE IV
                         OTHER AGREEMENTS OF THE PARTIES

      4.1 Transfer Restrictions.

            (a) Each Purchaser covenants and agrees that Securities will only be
      disposed of pursuant to an effective registration statement under the
      Securities Act or pursuant to an available exemption from the registration
      requirements of the Securities Act, and in compliance with any applicable
      state securities laws. In connection with any transfer of Securities other
      than pursuant to an effective registration statement or to the Company,
      except as otherwise set forth herein, the Company may require the
      transferor to provide to the Company an opinion of counsel selected by the
      transferor, the form and substance of which opinion shall be reasonably
      satisfactory to the Company, to the effect that such transfer does not
      require registration under the Securities Act; provided, however, that
      after Company receives a satisfactory opinion of counsel to the effect
      that the Securities may be resold under Rule 144(k), no further legal
      opinions shall be required for subsequent resales under Rule 144(k).
      Notwithstanding the foregoing, the Company hereby consents to and agrees
      to register on the books of the Company and with its Transfer Agent,
      without any such legal opinion, any transfer of Securities by a Purchaser
      to an Affiliate of such Purchaser, provided that the transferee certifies
      to the Company that it is an "accredited investor" as defined in Rule
      501(a) under the Securities Act and provides such other certifications as
      the Company may reasonably request.

            (b) The Purchasers agree to the imprinting, so long as is required
      by this Section 4.1(b), of the following legend on any certificate
      evidencing Securities:

THESE SECURITIES HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE
COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO
AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH
APPLICABLE STATE SECURITIES LAWS. NOTWITHSTANDING THE FOREGOING, THESE
SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER
LOAN OR FINANCING ARRANGEMENT SECURED BY SUCH SECURITIES.

Certificates evidencing Securities shall not be required to contain such legend
or any other legend (i) while a Registration Statement covering the resale of
such Securities is effective under the Securities Act, or (ii) following any
sale of such Securities pursuant to Rule 144, or (iii) if such Securities are
eligible for sale under Rule 144(k), or (iv) if such legend is not required
under applicable requirements of the Securities Act (including judicial
interpretations and pronouncements issued by the Staff of the Commission).
Following the Effective Date or at such earlier time as a legend is no longer
required for certain Securities, the Company will, promptly, following the
delivery by a Purchaser to the Company or the Transfer Agent of a legended
certificate representing such Securities, deliver or cause to be delivered to
such Purchaser a certificate representing such Securities that is free from all
restrictive and other legends. The Company may not make any notation on its
records or give instructions to any transfer agent of the Company that enlarge
the restrictions on transfer set forth in this Section.

In the event the above legend is removed from any Security and thereafter the
effectiveness of a registration statement covering such Security is suspended or
the Company determines that a supplement or amendment thereto is required by
applicable securities laws, then the Company may immediately place a
stop-transfer order against the certificates with respect to the sale of any
Security pursuant to such registration statement, and upon reasonable advance
notice to such Purchaser, the Company may require that the above legend be
placed on any such Security that cannot then be sold pursuant to an effective
registration statement or under Rule 144 and such Purchaser shall cooperate in
the replacement of such legend. Such legend shall thereafter be removed when
such Security may again be sold pursuant to an effective registration statement
or under Rule 144.

            (c) The Company acknowledges and agrees that a Purchaser may from
      time to time pledge or grant a security interest in some or all of the
      Securities in connection with a bona fide margin agreement or other loan
      or financing arrangement secured by the Securities and, if required under
      the terms of such agreement, loan or arrangement, such Purchaser may
      transfer pledged or secured Securities to the pledgees or secured parties.
      Such a pledge or transfer would not be subject to approval of the Company
      and no legal opinion of the pledgee, secured party or pledgor shall be
      required in connection therewith. Further, no notice shall be required of
      such pledge. At the appropriate Purchaser's expense, the Company will
      execute and deliver such reasonable documentation as a pledgee or secured
      party of Securities may reasonably request in connection with a pledge or
      transfer of the Securities, including the preparation and filing of any
      required prospectus supplement under Rule 424(b)(3) of the Securities Act
      or other applicable provision of the Securities Act to appropriately amend
      the list of selling stockholders thereunder. Notwithstanding the
      foregoing, each Purchaser agrees that no such pledge or transfer shall be
      made in violation of the Securities Act.

      4.2 Furnishing of Information. As long as any Purchaser owns Securities,
the Company covenants to timely file (or obtain extensions in respect thereof
and file within the applicable grace period) all reports required to be filed by
the Company after the date hereof pursuant to the Exchange Act. As long as any
Purchaser owns Securities, if the Company is not required to file reports
pursuant to such laws, it will prepare and furnish to the Purchasers and make
publicly available in accordance with paragraph (c) of Rule 144 such information
as is required for the Purchasers to sell the Securities under Rule 144. The
Company further covenants that it will take such further action as any holder of
Securities may reasonably request to satisfy the provisions of Rule 144
applicable to the issuer of securities relating to transactions for the sale of
securities pursuant to Rule 144.

      4.3 Integration. The Company shall not, and shall use its commercially
reasonable efforts to ensure that no Affiliate of the Company shall, sell, offer
for sale or solicit offers to buy or otherwise negotiate in respect of any
security (as defined in Section 2 of the Securities Act) that would be
integrated with the offer or sale of the Securities in a manner that would
require the registration under the Securities Act of the sale of the Securities
to the Purchasers, or that would be integrated with the offer or sale of the
Securities for purposes of the rules and regulations of any Trading Market.

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

      4.5 Subsequent Placements.

            (a) From the date hereof until 30 Trading Days following the
      Effective Date (the "Blockout Period"), the Company will not, directly or
      indirectly, offer, sell, grant any option to purchase, or otherwise
      dispose of (or announce any offer, sale, grant or any option to purchase
      or other disposition of) any of its or the Subsidiaries' equity or equity
      equivalent securities, including without limitation any debt, preferred
      stock or other instrument or security that is, at any time during its life
      and under any circumstances, convertible into or exchangeable or
      exercisable for Common Stock or Common Stock Equivalents (any such offer,
      sale, grant, disposition or announcement being referred to as a
      "Subsequent Placement"); provided that this paragraph shall not restrict
      the Company from, directly or indirectly, offering, selling, granting any
      option to purchase, or otherwise disposing of (or announcing any offer,
      sale, grant or any option to purchase or other disposition of) any of its
      Excluded Stock.

            (b) The Blockout Period set forth in the preceding paragraph (a)
      shall be extended for the number of Trading Days during such period in
      which (i) trading in the Common Stock is suspended by any Trading Market,
      (ii) the Registration Statement is not effective, or (iii) the prospectus
      included in the Registration Statement may not be used by the Purchasers
      for the resale of Registrable Securities thereunder.

      4.6 Securities Laws Disclosure; Publicity. The Company shall, on or before
8:30 a.m., Eastern Standard Time, on the first Trading Day following the date of
this Agreement, issue a press release (the "Press Release") acceptable to
Jackson Walker L.L.P. (the "Lead Purchaser Counsel") disclosing (i) all material
terms of the transactions contemplated hereby and (ii) disclosing any material
nonpublic information regarding the Company or any of its Subsidiaries that had
been disclosed to any Purchaser. On or before 8:30 a.m., Eastern Standard Time,
on the first Trading Day following the Closing Date, the Company also shall file
a Current Report on Form 8-K with the Commission (the "8-K Filing") (i)
describing the terms of the transactions contemplated by the Transaction
Documents and including as exhibits to such Current Report on Form 8-K this
Agreement and the exhibits to this Agreement in the form required by the
Exchange Act and (ii) disclosing any material nonpublic information regarding
the Company or any of its Subsidiaries that had been disclosed to any Purchaser.
Thereafter, the Company shall timely file any filings and notices required by
the Commission or applicable law with respect to the transactions contemplated
hereby. Except with respect to the Press Release (a copy of which will be
provided to Lead Purchaser Counsel for its review as early as practicable prior
to its issuance) and the 8-K Filing (a copy of which will be provided to the
Purchasers for their review as early as practicable prior to its filing), the
Company shall, to the extent practicable, at least one Trading Day prior to the
filing or dissemination of any disclosure required by this paragraph, provide a
copy thereof to the Purchasers for their review. The Company and the Purchasers
shall consult with each other in issuing any press releases or otherwise making
public statements or filings and other communications with the Commission or any
regulatory agency or Trading Market with respect to the transactions
contemplated hereby, and neither party shall issue any such press release or
otherwise make any such public statement, filing or other communication without
the prior consent of the other, except if such disclosure is required by law or
Eligible Market regulation, in which case the disclosing party shall promptly
provide the other party, to the extent practicable, with prior notice of such
public statement, filing or other communication. Notwithstanding the foregoing,
the Company shall not publicly disclose the name of any Purchaser, or include
the name of any Purchaser in any filing with the Commission or any regulatory
agency or Trading Market, without the prior written consent of such Purchaser,
except to the extent such disclosure (but not any disclosure as to the
controlling Persons thereof) is required by law or Trading Market regulations,
in which case the Company shall provide the Purchasers with prior notice of such
disclosure. The Company shall not, and shall cause each of its Subsidiaries and
its and each of their respective officers, directors, employees and agents not
to, provide any Purchaser with any material nonpublic information regarding the
Company or any of its Subsidiaries from and after the 8-K Filing without the
express agreement of such Purchaser. No Purchaser shall have any liability to
the Company, its Subsidiaries, or any of its or their respective officers,
directors, employees, stockholders or agents for any such disclosure. Subject to
the foregoing, neither the Company nor any Purchaser shall issue any press
releases or any other public statements with respect to the transactions
contemplated hereby; provided, however, that the Company shall be entitled,
without the prior approval of any Purchaser, to make any press release or other
public disclosure with respect to such transactions (i) in substantial
conformity with the Press Release and the 8-K Filing (ii) as is required by
applicable law and Eligible Market regulations.

      4.7 Use of Proceeds. The Company intends to use the net proceeds from the
sale of the Securities for general corporate purposes. Pending these uses, the
Company intends to invest the net proceeds from this offering in short-term,
interest-bearing, investment-grade securities, or as otherwise pursuant to the
Company's customary investment policies.

      4.8 Rights Plan. The Company will not amend its existing shareholder
rights plan, or adopt a new shareholder rights plan, so as to cause any
Purchaser to become an "Acquiring Person" under such amended or newly adopted
plan solely as a result of such Purchaser's beneficial ownership of the Shares
issued to such Purchaser pursuant to the Transaction Documents. For the
avoidance of doubt, any shares beneficially owned by a Purchaser or acquired
after the date of this Agreement (other than the Shares issued pursuant to the
Transaction Documents) shall be considered in determining whether any Purchaser
is an Acquiring Person under the Company's existing or any amended or newly
adopted shareholder rights plan.

                                    ARTICLE V
                                   CONDITIONS

      5.1 Conditions Precedent to the Obligations of the Purchasers. The
obligation of each Purchaser to acquire Securities at the Closing is subject to
the satisfaction or waiver by such Purchaser, at or before the Closing, of each
of the following conditions:

            (a) Representations and Warranties. The representations and
      warranties of the Company contained herein shall be true and correct in
      all material respects as of the date when made and as of the Closing as
      though made on and as of such date; and

            (b) Performance. The Company and each other Purchaser shall have
      performed, satisfied and complied in all material respects with all
      covenants, agreements and conditions required by the Transaction Documents
      to be performed, satisfied or complied with by it at or prior to the
      Closing.

      5.2 Conditions Precedent to the Obligations of the Company. The obligation
of the Company to sell Securities at the Closing is subject to the satisfaction
or waiver by the Company, at or before the Closing, of each of the following
conditions:

            (a) Representations and Warranties. The representations and
      warranties of the Purchasers contained herein shall be true and correct in
      all material respects as of the date when made and as of the Closing Date
      as though made on and as of such date; and

            (b) Performance. The Purchasers shall have performed, satisfied and
      complied in all material respects with all covenants, agreements and
      conditions required by the Transaction Documents to be performed,
      satisfied or complied with by the Purchasers at or prior to the Closing.

                                   ARTICLE VI
                               REGISTRATION RIGHTS

      6.1 Shelf Registration

            (a) As promptly as possible, and in any event on or prior to each
      Filing Date, the Company shall prepare and file with the Commission a
      "Shelf" Registration Statement covering the resale of all Registrable
      Securities for an offering to be made on a continuous basis pursuant to
      Rule 415. The Registration Statement shall be on Form S-3 (except if the
      Company is not then eligible to register for resale the Registrable
      Securities on Form S-3, in which case such registration shall be on
      another appropriate form in accordance herewith as the Purchasers may
      consent) and shall contain the "Plan of Distribution" attached hereto as
      Exhibit B.

            (b) The Company shall use its commercially reasonably efforts to
      cause the Registration Statement to be declared effective by the
      Commission as promptly as possible after the filing thereof, but in any
      event prior to the Required Effectiveness Date, and shall use its best
      efforts to keep the Registration Statement continuously effective under
      the Securities Act until the earliest to occur of (i) the fifth
      anniversary of the Effective Date; (ii) such earlier date when all
      Registrable Securities covered by such Registration Statement have been
      sold; or (iii) such earlier date as when the Shares cease to constitute
      Registrable Securities (the "Effectiveness Period").

            (c) The Company shall notify Purchaser Counsel in writing promptly
      (and in any event within one Trading Day) after receiving notification
      from the Commission that the Registration Statement has been declared
      effective.

            (d) Upon the occurrence of any Event (as defined below) and on every
      monthly anniversary thereof until the applicable Event is cured, as sole
      relief for the damages suffered therefrom by the Purchasers, the Company
      shall pay to each Purchaser an amount in cash, as liquidated damages and
      not as a penalty, equal to 1.0% of the Market Value, upon the occurrence
      of the Event, and 1.5% of the Market Value, upon each monthly anniversary
      thereafter. The payments to which a Purchaser shall be entitled pursuant
      to this Section 6.1(d) are referred to herein as "Event Payments". For
      purposes of this paragraph, "Market Value" means, as of any Trading Day,
      the product of (x) the Closing Price on such Trading Day and (y) the
      number of Shares held by such Purchaser on such Trading Day. In the event
      the Company fails to make Event Payments in a timely manner, such Event
      Payments shall bear interest at the rate of 1.5% per month (prorated for
      partial months) until paid in full. Notwithstanding the foregoing, in no
      event shall the Company be required to make more than one Event Payment
      for the same period, even if more than one Event shall have occurred.

For such purposes, each of the following shall constitute an "Event":

                  (i) the Registration Statement is not filed on or prior to the
            Filing Date or is not declared effective on or prior to the Required
            Effectiveness Date;

                  (ii) except as provided in Section 6.1(e), after the Effective
            Date, a Purchaser is not permitted to sell Registrable Securities
            under the Registration Statement (or a subsequent Registration
            Statement filed in replacement thereof) for any reason for five or
            more Trading Days (whether or not consecutive);

                  (iii) after the Effective Date, any Registrable Securities
            covered by such Registration Statement are not listed on an Eligible
            Market;

                  (iv) the Common Stock is not listed or quoted, or is suspended
            from trading, on an Eligible Market for a period of three Trading
            Days (which need not be consecutive Trading Days);

                  (v) the Company fails for any reason to deliver a certificate
            evidencing any Securities to a Purchaser within three Trading Days
            after delivery of such certificate is required pursuant to any
            Transaction Document; or

                  (vi) at any time following the Effective Date, any Shares are
            not listed on an Eligible Market.

            (e) Notwithstanding anything in this Agreement to the contrary, the
      Company may, by written notice to the Purchasers, suspend sales under a
      Registration Statement and/or require that the Purchasers immediately
      cease the sale of shares of Common Stock pursuant thereto and/or defer the
      filing of any subsequent Registration Statement if the Board of Directors
      determines in good faith, by appropriate resolutions, that, as a result of
      such activity, (A) it would be materially detrimental to the Company
      (other than as relating solely to the price of the Common Stock) to
      maintain a Registration Statement at such time and (B) it is in the best
      interests of the Company to defer proceeding with such registration at
      such time and (C) an event has occurred which makes untrue any statement
      of a material fact made in such registration statement or any related
      prospectus or which requires the making of a change in such registration
      statement or any related prospectus in order that the same will not
      contain any untrue statement of a material fact or omit to state a
      material fact required to be stated therein or necessary to make the
      statements therein not misleading. Upon receipt of such notice, each
      Purchaser shall immediately discontinue any sales of Registrable
      Securities pursuant to such registration until such Purchaser has received
      copies of a supplemented or amended Prospectus or until such Purchaser is
      advised in writing by the Company that the then-current Prospectus may be
      used and has received copies of any additional or supplemental filings
      that are incorporated or deemed incorporated by reference in such
      Prospectus. In no event, however, shall this right be exercised to suspend
      sales beyond the period during which (in the good faith determination of
      the Company's Board of Directors) the failure to require such suspension
      would be materially detrimental to the Company. The Company's rights under
      this Section 6.1(e) may be exercised for a period of no more than 30 days
      at a time and not more than two times in any twelve-month period, without
      such suspension being considered as part of an Event Payment
      determination. Immediately after the end of any suspension period under
      this Section 6.1(e), the Company shall take all actions that may be
      reasonably necessary (including filing any required supplemental
      prospectus) to restore the effectiveness of the applicable Registration
      Statement and the ability of the Purchasers to publicly resell their
      Registrable Securities pursuant to such effective Registration Statement.

            (f) Except as specifically disclosed in Schedule 6.1(f) and subject
      in all respects to Section 4.5, the Company shall not, prior to the
      Effective Date of the Registration Statement, prepare and file with the
      Commission a registration statement relating to an offering for its own
      account or the account of others under the Securities Act of any of its
      equity securities.

      6.2 Registration Procedures. In connection with the Company's registration
obligations hereunder, the Company shall:

            (a) Not less than three Trading Days prior to the filing of a
      Registration Statement or any related Prospectus or any amendment or
      supplement thereto (including any document that would be incorporated or
      deemed to be incorporated therein by reference), the Company shall (i)
      furnish to the Lead Purchaser Counsel and any other counsel designated by
      any Purchaser (each, including Lead Purchaser Counsel, a "Purchaser
      Counsel") copies of all such documents proposed to be filed in connection
      with the Registrable Securities, which documents (other than those
      incorporated or deemed to be incorporated by reference) will be subject to
      the review of each such Purchaser Counsel, and (ii) cause its officers and
      directors, counsel and independent certified public accountants to respond
      to such inquiries as shall be necessary, in the reasonable opinion of each
      Purchaser Counsel, to conduct a reasonable investigation within the
      meaning of the Securities Act. The Company shall not file a Registration
      Statement or any such Prospectus or any amendments or supplements thereto
      to which Purchasers holding a majority of the Registrable Securities shall
      reasonably object.

            (b) (i) Prepare and file with the Commission such amendments,
      including post-effective amendments, to each Registration Statement and
      the Prospectus used in connection therewith as may be necessary to keep
      the Registration Statement continuously effective as to the applicable
      Registrable Securities for the Effectiveness Period and prepare and file
      with the Commission such additional Registration Statements in order to
      register for resale under the Securities Act all of the Registrable
      Securities; (ii) cause the related Prospectus to be amended or
      supplemented by any required Prospectus supplement, and as so supplemented
      or amended to be filed pursuant to Rule 424; (iii) respond as promptly as
      reasonably possible, and in any event within 15 days, to any comments
      received from the Commission with respect to the Registration Statement or
      any amendment thereto and as promptly as reasonably possible provide
      Purchaser Counsel true and complete copies of all correspondence from and
      to the Commission relating to the Registration Statement; and (iv) comply
      in all material respects with the provisions of the Securities Act and the
      Exchange Act with respect to the disposition of all Registrable Securities
      covered by the Registration Statement during the applicable period in
      accordance with the intended methods of disposition by the Purchasers
      thereof set forth in the Registration Statement as so amended or in such
      Prospectus as so supplemented.

            (c) Notify the Purchaser Counsel as promptly as reasonably possible,
      and (if requested) confirm such notice in writing no later than one
      Trading Day thereafter, of any of the following events: (i) the Commission
      notifies the Company whether there will be a "review" of any Registration
      Statement; (ii) the Commission comments in writing on any Registration
      Statement (in which case the Company shall deliver to Purchaser Counsel a
      copy of such comments and of all written responses thereto); (iii) any
      Registration Statement or any post-effective amendment is declared
      effective; (iv) the Commission or any other Federal or state governmental
      authority requests any amendment or supplement to any Registration
      Statement or Prospectus or requests additional information related
      thereto; (v) the Commission issues any stop order suspending the
      effectiveness of any Registration Statement or initiates any Proceedings
      for that purpose; (vi) the Company receives notice of any suspension of
      the qualification or exemption from qualification of any Registrable
      Securities for sale in any jurisdiction, or the initiation or threat of
      any Proceeding for such purpose; or (vii) the financial statements
      included in any Registration Statement become ineligible for inclusion
      therein or any statement made in any Registration Statement or Prospectus
      or any document incorporated or deemed to be incorporated therein by
      reference is untrue in any material respect or any revision to a
      Registration Statement, Prospectus or other document is required so that
      it will not contain any untrue statement of a material fact or omit to
      state any 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.

            (d) Use its best efforts to avoid the issuance of or, if issued,
      obtain the withdrawal of (i) any order suspending the effectiveness of any
      Registration Statement, or (ii) any suspension of the qualification (or
      exemption from qualification) of any of the Registrable Securities for
      sale in any jurisdiction, at the earliest practicable moment.

            (e) Upon request, furnish to each Purchaser and Purchaser Counsel,
      without charge, at least one conformed copy of each Registration Statement
      and each amendment thereto, including financial statements and schedules,
      all documents incorporated or deemed to be incorporated therein by
      reference, and all exhibits to the extent requested by such Person
      (including those previously furnished or incorporated by reference)
      promptly after the filing of such documents with the Commission.

            (f) Promptly deliver to each Purchaser and each Purchaser Counsel,
      without charge, as many copies of the Prospectus or Prospectuses
      (including each form of prospectus) and each amendment or supplement
      thereto as such Persons may reasonably request. The Company hereby
      consents to the use of such Prospectus and each amendment or supplement
      thereto by each of the selling Purchasers in connection with the offering
      and sale of the Registrable Securities covered by such Prospectus and any
      amendment or supplement thereto.

            (g) (i) In the time and manner required by each Trading Market,
      prepare and file with such Trading Market an additional shares listing
      application covering all of the Registrable Securities; (ii) take all
      steps necessary to cause such Registrable Securities to be approved for
      listing on each Trading Market as soon as possible thereafter; (iii)
      provide to the Purchaser Counsel evidence of such listing; and (iv) use
      best efforts to maintain the listing of such Registrable Securities on
      each such Trading Market or another Eligible Market.

            (h) Prior to any public offering of Registrable Securities, use
      commercially reasonably efforts to register or qualify or cooperate with
      the selling Purchasers and each Purchaser Counsel in connection with the
      registration or qualification (or exemption from such registration or
      qualification) of such Registrable Securities for offer and sale under the
      securities or blue sky laws of such jurisdictions within the United States
      as any Purchaser requests in writing, to keep each such registration or
      qualification (or exemption therefrom) effective during the Effectiveness
      Period and to do any and all other acts or things necessary or advisable
      to enable the disposition in such jurisdictions of the Registrable
      Securities covered by a Registration Statement.

            (i) Cooperate with the Purchasers to facilitate the timely
      preparation and delivery of certificates representing Registrable
      Securities to be delivered to a transferee pursuant to a Registration
      Statement, which certificates shall be free, to the extent permitted by
      this Agreement and applicable law, of all restrictive legends, and to
      enable such Registrable Securities to be in such denominations and
      registered in such names as any such Purchasers may request.

            (j) Upon the occurrence of any event described in Section
      6.2(c)(vii), as promptly as reasonably possible, prepare a supplement or
      amendment, including a post-effective amendment, to the Registration
      Statement or a supplement to the related Prospectus or any document
      incorporated or deemed to be incorporated therein by reference, and file
      any other required document so that, as thereafter delivered, neither the
      Registration Statement nor such Prospectus will contain an untrue
      statement of a material fact or omit 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.

            (k) Cooperate with any due diligence investigation undertaken by the
      Purchasers in connection with the sale of Registrable Securities; provided
      that the Company will not deliver or make available to any Purchaser
      material, nonpublic information unless such Purchaser specifically
      requests in advance to receive material, nonpublic information in writing.

            (l) If Holders of a majority of the Registrable Securities being
      offered pursuant to a Registration Statement select underwriters for the
      offering, the Company shall enter into and perform its obligations under
      an underwriting agreement, in usual and customary form, including, without
      limitation, by providing customary legal opinions, comfort letters and
      indemnification and contribution obligations.

      6.3 Obligations of the Purchasers. (a) In connection with the registration
of the Registrable Securities, it shall be a condition precedent to the
obligations of the Company to complete the registration pursuant to this
Agreement with respect to the Registrable Securities of a particular Purchaser
(or to make any payments or other damages to such Purchaser pursuant to Section
6.1) that such Purchaser shall furnish to the Company the Selling Stockholder
Questionnaire set forth on Exhibit C hereto within five (5) Trading Days after
receipt of the Company's written request. Each Purchaser, by such Purchaser's
acceptance of the Registrable Securities, agrees to cooperate with the Company
as reasonably requested by the Company in connection with the preparation and
filing of the Registration Statement hereunder, unless such Purchaser has
notified the Company in writing of such Purchaser's election to exclude all of
such Purchaser's Registrable Securities from such Registration Statement.

      (b) Each Purchaser agrees that, upon receipt of any notice from the
Company of the happening of any event of the kind described in Section 6.1(e),
such Purchaser will immediately discontinue disposition of Registrable
Securities pursuant to the Registration Statement covering such Registrable
Securities until such Purchaser's receipt of the copies of the supplemented or
amended prospectus contemplated by Section 6.1(e) and, if so directed by the
Company, such Purchaser shall deliver to the Company (at the expense of the
Company) or destroy (and deliver to the Company a certificate of destruction)
all copies in such Purchaser's possession, of the Prospectus covering such
Registrable Securities current at the time of receipt of such notice.

      6.4 Registration Expenses. The Company shall pay (or reimburse the
Purchasers for) all fees and expenses incident to the performance of or
compliance with this Agreement by the Company, including without limitation (a)
all registration and filing fees and expenses, including without limitation
those related to filings with the Commission, any Trading Market and in
connection with applicable state securities or Blue Sky laws, (b) printing
expenses (including without limitation expenses of printing certificates for
Registrable Securities and of printing prospectuses requested by the
Purchasers), (c) messenger, telephone and delivery expenses, (d) fees and
disbursements of counsel for the Company and up to $25,000 in the aggregate for
the Purchaser Counsel, (e) fees and expenses of all other Persons retained by
the Company in connection with the consummation of the transactions contemplated
by this Agreement, and (f) all listing fees to be paid by the Company to the
Trading Market. The Purchasers shall be responsible for paying the underwriters'
commission or brokerage fees and taxes of any kind (including, without
limitation, transfer taxes) applicable to any disposition, sale or transfer of
Registrable Securities.

      6.5 Indemnification

            (a) Indemnification by the Company. The Company shall,
      notwithstanding any termination of this Agreement, indemnify and hold
      harmless each Purchaser, the officers, directors, partners, members,
      agents, investment advisors, and employees of each of them, each Person
      who controls any such Purchaser (within the meaning of Section 15 of the
      Securities Act or Section 20 of the Exchange Act) and the officers,
      directors, partners, members, agents and employees of each such
      controlling Person, to the fullest extent permitted by applicable law,
      from and against any and all Losses, as incurred, arising out of or
      relating to any untrue or alleged untrue statement of a material fact
      contained in the Registration Statement, any Prospectus or any form of
      prospectus or in any amendment or supplement thereto or in any preliminary
      prospectus, or arising out of or relating to any omission or alleged
      omission of a material fact required to be stated therein or necessary to
      make the statements therein (in the case of any Prospectus or form of
      prospectus or supplement thereto, in the light of the circumstances under
      which they were made) not misleading, except to the extent, but only to
      the extent, that such Losses arise out of (i) untrue statements, alleged
      untrue statements, omissions or alleged omissions that are based solely
      upon information regarding such Purchaser furnished in writing to the
      Company by such Purchaser expressly for use therein, or to the extent that
      such information relates to such Purchaser or such Purchaser's proposed
      method of distribution of Registrable Securities and was reviewed and
      expressly approved in writing by such Purchaser expressly for use in the
      Registration Statement, such Prospectus or such form of Prospectus or in
      any amendment or supplement thereto or (ii) the use by such Purchaser of
      an outdated or defective Prospectus after the Company has notified such
      Purchaser in writing that the Prospectus is outdated or defective and
      prior to the receipt by such Purchaser of the Advice contemplated in
      Section 6.6, or (iii) any material breach of any representation or
      warranty by such Purchaser contained in this Agreement or the failure of
      such Purchaser to comply with its material covenants and agreements
      contained in this Agreement. The Company shall notify the Purchasers
      promptly of the institution, threat or assertion of any Proceeding of
      which the Company is aware in connection with the transactions
      contemplated by this Agreement.

            (b) Indemnification by Purchasers. Each Purchaser shall, severally
      and not jointly, indemnify and hold harmless the Company, its directors,
      officers, agents and employees, each Person who controls the Company
      (within the meaning of Section 15 of the Securities Act and Section 20 of
      the Exchange Act), and the directors, officers, agents or employees of
      such controlling Persons, to the fullest extent permitted by applicable
      law, from and against all Losses (as determined by a court of competent
      jurisdiction in a final judgment not subject to appeal or review) arising
      solely (i) out of any untrue statement of a material fact contained in the
      Registration Statement, any Prospectus, or any form of prospectus, or in
      any amendment or supplement thereto, or arising out of any omission of a
      material fact required to be stated therein or necessary to make the
      statements therein (in the case of any Prospectus or form of prospectus or
      supplement thereto, in the light of the circumstances under which they
      were made) not misleading to the extent, but only to the extent, that such
      untrue statement or omission is contained in any information so furnished
      in writing by such Purchaser to the Company specifically for inclusion in
      such Registration Statement or such Prospectus or to the extent that such
      untrue statements or omissions are based solely upon information regarding
      such Purchaser furnished in writing to the Company by such Purchaser
      expressly for use therein, or to the extent that such information relates
      to such Purchaser or such Purchaser's proposed method of distribution of
      Registrable Securities and was reviewed and expressly approved in writing
      by such Purchaser expressly for use in the Registration Statement, such
      Prospectus or such form of Prospectus or in any amendment or supplement
      thereto or (ii) reference the use by such Purchaser of an outdated or
      defective Prospectus after the Company has notified such Purchaser in
      writing that the Prospectus is outdated or defective and prior to the
      receipt by such Purchaser of the Advice contemplated in Section 6.6. In no
      event shall the liability of any selling Purchaser hereunder be greater in
      amount than the dollar amount of the net proceeds received by such
      Purchaser upon the sale of the Registrable Securities giving rise to such
      indemnification obligation.

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

      An Indemnified Party shall have the right to employ separate counsel in
any such Proceeding and to participate in the defense thereof, but the fees and
expenses of such counsel shall be at the expense of such Indemnified Party or
Parties unless: (i) the Indemnifying Party has agreed in writing to pay such
fees and expenses; or (ii) the Indemnifying Party shall have failed promptly to
assume the defense of such Proceeding and to employ counsel reasonably
satisfactory to such Indemnified Party in any such Proceeding; or (iii) the
named parties to any such Proceeding (including any impleaded parties) include
both such Indemnified Party and the Indemnifying Party, and such Indemnified
Party shall have been advised by counsel that a conflict of interest is likely
to exist if the same counsel were to represent such Indemnified Party and the
Indemnifying Party (in which case, if such Indemnified Party notifies the
Indemnifying Party in writing that it elects to employ separate counsel at the
expense of the Indemnifying Party, and such counsel shall be at the expense of
the Indemnifying Party). It being understood, however, that the Indemnifying
Party shall not, in connection with any one such Proceeding be liable for the
fees and expenses of more than one separate firm of attorneys at any time for
all Indemnified Parties, which firm shall be appointed by a majority of the
Indemnified Parties; provided, however, that in the case a single firm of
attorneys would be inappropriate due to actual or potential differing interests
of conflicts between such Indemnified Parties and any other party represented by
such counsel in such Proceeding or otherwise, then the Indemnifying Party shall
be liable for the fees and expenses of one additional firm of attorneys with
respect to such Indemnified Parties. The Indemnifying Party shall not be liable
for any settlement of any such Proceeding effected without its written consent,
which consent shall not be unreasonably withheld. No Indemnifying Party shall,
without the prior written consent of the Indemnified Party, effect any
settlement of any pending Proceeding in respect of which any Indemnified Party
is a party, unless such settlement includes an unconditional release of such
Indemnified Party from all liability on claims that are the subject matter of
such Proceeding.

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

            (d) Contribution. If a claim for indemnification under Section
      6.5(a) or (b) is unavailable to an Indemnified Party (by reasons other
      than the specified exclusions to indemnification), then each Indemnifying
      Party, in lieu of indemnifying such Indemnified Party, shall contribute to
      the amount paid or payable by such Indemnified Party as a result of such
      Losses, in such proportion as is appropriate to reflect the relative fault
      of the Indemnifying Party and Indemnified Party in connection with the
      actions, statements or omissions that resulted in such Losses as well as
      any other relevant equitable considerations. The relative fault of such
      Indemnifying Party and Indemnified Party shall be determined by reference
      to, among other things, whether any action in question, including any
      untrue or alleged untrue statement of a material fact or omission or
      alleged omission of a material fact, has been taken or made by, or relates
      to information supplied by, such Indemnifying Party or Indemnified Party,
      and the parties' relative intent, knowledge, access to information and
      opportunity to correct or prevent such action, statement or omission. The
      amount paid or payable by a party as a result of any Losses shall be
      deemed to include, subject to the limitations set forth in Section 6.5(c),
      any reasonable attorneys' or other reasonable fees or expenses incurred by
      such party in connection with any Proceeding to the extent such party
      would have been indemnified for such fees or expenses if the
      indemnification provided for in this Section was available to such party
      in accordance with its terms.

      The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 6.5(d) were determined by pro rata
allocation or by any other method of allocation that does not take into account
the equitable considerations referred to in the immediately preceding paragraph.
Notwithstanding the provisions of this Section 6.5(d), no Purchaser shall be
required to contribute, in the aggregate, any amount in excess of the amount by
which the proceeds actually received by such Purchaser from the sale of the
Registrable Securities subject to the Proceeding 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 was
not guilty of such fraudulent misrepresentation.

      The indemnity and contribution agreements contained in this Section are in
addition to any liability that the Indemnifying Parties may have to the
Indemnified Parties.

      6.6 Dispositions. Each Purchaser agrees that it will comply with the
prospectus delivery requirements of the Securities Act as applicable to it in
connection with sales of Registrable Securities pursuant to the Registration
Statement. Each Purchaser further agrees that, upon receipt of a notice from the
Company of the occurrence of any event of the kind described in Sections
6.2(c)(v), (vi) or (vii), such Purchaser will discontinue disposition of such
Registrable Securities under the Registration Statement until such Purchaser's
receipt of the copies of the supplemented Prospectus and/or amended Registration
Statement contemplated by Section 6.2(j), or until it is advised in writing (the
"Advice") by the Company that the use of the applicable Prospectus may be
resumed, and, in either case, has received copies of any additional or
supplemental filings that are incorporated or deemed to be incorporated by
reference in such Prospectus or Registration Statement. The Company may provide
appropriate stop orders to enforce the provisions of this paragraph.

      6.7 Piggy-Back Registrations. If at any time during the Effectiveness
Period there is not an effective Registration Statement covering all of the
Registrable Securities and the Company shall determine to prepare and file with
the Commission a registration statement relating to an offering for its own
account or the account of others under the Securities Act of any of its equity
securities, other than on Form S-4 or Form S-8 (each as promulgated under the
Securities Act) or their then equivalents relating to equity securities to be
issued solely in connection with any acquisition of any entity or business or
equity securities issuable in connection with stock option or other employee
benefit plans, then the Company shall send to each Purchaser written notice of
such determination and if, within five days after receipt of such notice, any
such Purchaser shall so request in writing, the Company shall include in such
registration statement all or any part of such Registrable Securities such
Purchaser requests to be registered.

                                   ARTICLE VII
                                  MISCELLANEOUS

      7.1 Termination. This Agreement may be terminated by the Company or any
Purchaser, by written notice to the other parties, if the Closing has not been
consummated by the third Trading Day following the date of this Agreement;
provided that no such termination will affect the right of any party to sue for
any breach by the other party (or parties).

      7.2 Fees and Expenses. At the Closing, the Company shall pay the Lead
Purchaser Counsel the sum of $16,000 and shall pay each of the other Purchaser
Counsel the sum of $2,000 each for their legal fees and expenses incurred in
connection with the preparation and negotiation of the Transaction Documents. In
lieu of the foregoing payment, the Purchasers may retain such amount at the
Closing. Except as expressly set forth in the Transaction Documents to the
contrary, each party shall pay the fees and expenses of its advisers, counsel,
accountants and other experts, if any, and all other expenses incurred by such
party incident to the negotiation, preparation, execution, delivery and
performance of this Agreement. The Company shall pay all Transfer Agent fees,
stamp taxes and other taxes and duties levied in connection with the issuance of
the Securities.

      7.3 Entire Agreement. The Transaction Documents, together with the
Exhibits and Schedules thereto, contain the entire understanding of the parties
with respect to the subject matter hereof and supersede all prior agreements and
understandings, oral or written, with respect to such matters, which the parties
acknowledge have been merged into such documents, exhibits and schedules. At or
after the Closing, and without further consideration, the Company will execute
and deliver to the Purchasers such further documents as may be reasonably
requested in order to give practical effect to the intention of the parties
under the Transaction Documents.

      7.4 Notices. Any and all notices or other communications or deliveries
required or permitted to be provided hereunder shall be in writing and shall be
deemed given and effective on the earliest of (a) the date of transmission, if
such notice or communication is delivered via facsimile at the facsimile number
specified in this Section prior to 6:30 p.m. (New York City time) on a Trading
Day, (b) the next Trading Day after the date of transmission, if such notice or
communication is delivered via facsimile at the facsimile number specified in
this Section on a day that is not a Trading Day or later than 6:30 p.m. (New
York City time) on any Trading Day, (c) the Trading Day following the date of
mailing, if sent by U.S. nationally recognized overnight courier service, or (d)
upon actual receipt by the party to whom such notice is required to be given.
The addresses and facsimile numbers for such notices and communications are
those set forth on the signature pages hereof, or such other address or
facsimile number as may be designated in writing hereafter, in the same manner,
by such Person.

      7.5 Amendments; Waivers. No provision of this Agreement may be waived or
amended except in a written instrument signed, in the case of an amendment, by
the Company and each of the Purchasers or, in the case of a waiver, by the party
against whom enforcement of any such waiver is sought. No waiver of any default
with respect to any provision, condition or requirement of this Agreement shall
be deemed to be a continuing waiver in the future or a waiver of any subsequent
default or a waiver of any other provision, condition or requirement hereof, nor
shall any delay or omission of either party to exercise any right hereunder in
any manner impair the exercise of any such right. Notwithstanding the foregoing,
a waiver or consent to depart from the provisions hereof with respect to a
matter that relates exclusively to the rights of Purchasers under Article VI and
that does not directly or indirectly affect the rights of other Purchasers may
be given by Purchasers holding at least a majority of the Registrable Securities
to which such waiver or consent relates.

      7.6 Construction. The headings herein are for convenience only, do not
constitute a part of this Agreement and shall not be deemed to limit or affect
any of the provisions hereof. The language used in this Agreement will be deemed
to be the language chosen by the parties to express their mutual intent, and no
rules of strict construction will be applied against any party.

      7.7 Successors and Assigns. This Agreement shall be binding upon and inure
to the benefit of the parties and their successors and permitted assigns. The
Company may not assign this Agreement or any rights or obligations hereunder
without the prior written consent of the Purchasers. Any Purchaser may assign
its rights under this Agreement to any Person to whom such Purchaser assigns or
transfers any Securities, provided such transferee agrees in writing to be
bound, with respect to the transferred Securities, by the provisions hereof that
apply to the "Purchasers." Notwithstanding anything to the contrary herein,
Securities may be assigned by any Purchaser to any Person in connection with a
bona fide margin account or other loan or financing arrangement secured by such
Securities.

      7.8 No Third-Party Beneficiaries. This Agreement is intended for the
benefit of the parties hereto and their respective successors and permitted
assigns and is not for the benefit of, nor may any provision hereof be enforced
by, any other Person, except that each Indemnified Party is an intended third
party beneficiary of Section 6.5 and (in each case) may enforce the provisions
of such Sections directly against the parties with obligations thereunder.

      7.9 Governing Law; Venue; Waiver Of Jury Trial. ALL QUESTIONS CONCERNING
THE CONSTRUCTION, VALIDITY, ENFORCEMENT AND INTERPRETATION OF THIS AGREEMENT
SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK. THE COMPANY AND PURCHASERS HEREBY IRREVOCABLY SUBMIT TO
THE NON-EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTS SITTING IN THE
CITY OF NEW YORK, BOROUGH OF MANHATTAN FOR THE ADJUDICATION OF ANY DISPUTE
BROUGHT BY THE COMPANY OR ANY PURCHASER HEREUNDER, IN CONNECTION HEREWITH OR
WITH ANY TRANSACTION CONTEMPLATED HEREBY OR DISCUSSED HEREIN (INCLUDING WITH
RESPECT TO THE ENFORCEMENT OF ANY OF THE TRANSACTION DOCUMENTS). EACH PARTY
HEREBY IRREVOCABLY WAIVES PERSONAL SERVICE OF PROCESS AND CONSENTS TO PROCESS
BEING SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING BY MAILING A COPY THEREOF
VIA REGISTERED OR CERTIFIED MAIL OR OVERNIGHT DELIVERY (WITH EVIDENCE OF
DELIVERY) TO SUCH PARTY AT THE ADDRESS IN EFFECT FOR NOTICES TO IT UNDER THIS
AGREEMENT AND AGREES THAT SUCH SERVICE SHALL CONSTITUTE GOOD AND SUFFICIENT
SERVICE OF PROCESS AND NOTICE THEREOF. NOTHING CONTAINED HEREIN SHALL BE DEEMED
TO LIMIT IN ANY WAY ANY RIGHT TO SERVE PROCESS IN ANY MANNER PERMITTED BY LAW.
THE COMPANY AND PURCHASERS HEREBY WAIVE ALL RIGHTS TO A TRIAL BY JURY.

      7.10 Survival. The representations, warranties, agreements and covenants
contained herein shall survive the Closing and the delivery and/or exercise of
the Securities, as applicable.

      7.11 Execution. This Agreement may be executed in two or more
counterparts, all of which when taken together shall be considered one and the
same agreement and shall become effective when counterparts have been signed by
each party and delivered to the other party, it being understood that both
parties need not sign the same counterpart. In the event that any signature is
delivered by facsimile transmission, such signature shall create a valid and
binding obligation of the party executing (or on whose behalf such signature is
executed) with the same force and effect as if such facsimile signature page
were an original thereof.

      7.12 Severability. If any provision of this Agreement is held to be
invalid or unenforceable in any respect, the validity and enforceability of the
remaining terms and provisions of this Agreement shall not in any way be
affected or impaired thereby and the parties will attempt to agree upon a valid
and enforceable provision that is a reasonable substitute therefor, and upon so
agreeing, shall incorporate such substitute provision in this Agreement.

      7.13 Rescission and Withdrawal Right. Notwithstanding anything to the
contrary contained in (and without limiting any similar provisions of) the
Transaction Documents, whenever any Purchaser exercises a right, election,
demand or option under a Transaction Document and the Company does not timely
perform its related obligations within the periods therein provided, then such
Purchaser may rescind or withdraw, in its sole discretion from time to time upon
written notice to the Company, any relevant notice, demand or election in whole
or in part without prejudice to its future actions and rights.

      7.14 Replacement of Securities. If any certificate or instrument
evidencing any Securities is mutilated, lost, stolen or destroyed, the Company
shall issue or cause to be issued in exchange and substitution for and upon
cancellation thereof, or in lieu of and substitution therefor, a new certificate
or instrument, but only upon receipt of evidence reasonably satisfactory to the
Company of such loss, theft or destruction and customary and reasonable
indemnity, if requested. The applicants for a new certificate or instrument
under such circumstances shall also pay any reasonable third-party costs
associated with the issuance of such replacement Securities.

      7.15 Remedies. In addition to being entitled to exercise all rights
provided herein or granted by law, including recovery of damages, each of the
Purchasers and the Company will be entitled to specific performance under the
Transaction Documents. The parties agree that monetary damages may not be
adequate compensation for any loss incurred by reason of any breach of
obligations described in the foregoing sentence and hereby agrees to waive in
any action for specific performance of any such obligation the defense that a
remedy at law would be adequate.

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

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

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

                           [Signature pages to follow]

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