Document:

Exhibit 4.21 

October 16, 2007  

CIT Group Inc. 
505 Fifth Avenue 
New
York, NY 10017 
Attention: 

Ladies and Gentlemen: 

        Each
of Morgan Stanley & Co. Incorporated (“Morgan Stanley”) and Citigroup Global Markets
Inc. (“Citi”) is pleased to commit, severally and not jointly, to purchase up to
$40,000,000 of common stock, par value $.01 per share (“Common Stock”), of CIT Group Inc.
(the “Company”), subject to and on the terms and conditions set forth herein. You may, in
your sole discretion, designate one or more dates upon at least ten days advance written
notice on which Morgan Stanley or Citi is to purchase such shares of Common Stock (each,
a “Purchase Date”) during the period commencing on the date hereof and ending at the
close of business on September 30, 2008 but excluding the fourteen-day period immediately
preceding the date you publicly issue any quarterly or annual earnings release (the
“Commitment Period”), provided that, as of the relevant Purchase Date, a Trigger Event
(as defined in the First Supplemental Indenture (the “Supplemental Indenture”) dated as
of January 31, 2007 between the Company and The Bank of New York, as trustee) or a
restriction on the Company’s ability to declare and pay dividends (as set forth in
Section 5 of the certificates of designations (the “Certificates of Designations”) for
the Company’s 6.350% non-cumulative preferred stock, Series A and non-cumulative
preferred stock, Series B) either (a) exists or (b) is reasonably expected to exist on
the next succeeding Interest Payment Date (as defined in the Supplemental Indenture) or
Dividend Payment Date (as defined in the Certificates of Designations), as the case may
be. 

        At
5:00 p.m. Eastern Time on the third scheduled trading day prior to any Purchase Date, the
Company and Morgan Stanley and/or Citi, as the case may be, will enter into an
underwriting agreement (the “Underwriting Agreement”) substantially in the form attached
hereto as Annex A with respect to the shares of Common Stock to be purchased on such
Purchase Date; provided that the Company, Morgan Stanley or Citi may decline to enter
into such Underwriting Agreement if (1) it reasonably believes that doing so would result
in any violation of applicable law or regulation, including, without limitation, the
rules of the New York Stock Exchange or (2) the aggregate market value of the outstanding
Common Stock of the Company (based on the closing price of the Common Stock on the New
York Stock Exchange on the third scheduled trading day immediately preceding such
Purchase Date) is less than $850,000,000, in either of which case Morgan Stanley or Citi
shall not be obligated to purchase such shares of Common Stock. Once Morgan Stanley or
Citi enters into one or more Underwriting Agreements with respect to any shares of Common
Stock pursuant hereto, its commitment hereunder shall be reduced by an amount equal to
the aggregate Purchase Price (as defined below) of the shares of Common Stock sold to it
pursuant to such Underwriting Agreements and its obligation to purchase such shares of
Common Stock shall be subject to the terms and conditions set forth in such Underwriting
Agreements. 

 
	 	
	 

        The
purchase price per share of Common Stock to be paid by Morgan Stanley or Citi to the
Company (the “Purchase Price”) pursuant to any such Underwriting Agreement shall be equal
to an amount from and including 95% to 100% (as the Company and Morgan Stanley or Citi
shall agree in such Underwriting Agreement), of the lesser of (1) the volume weighted
average price (“VWAP”) of the Common Stock, as calculated for the period beginning at
3:00 p.m. Eastern Time and concluding at 4:00 p.m. Eastern Time on the third scheduled
trading day immediately preceding the applicable Purchase Date on the New York Stock
Exchange, as reported by Bloomberg Financial LP (using the CIT Equity AQR function) and
(2) the closing price of the Common Stock on the New York Stock Exchange on the third
scheduled trading day immediately preceding the applicable Purchase Date.  

        If
the Company is unable to effect a registered public offering during the Commitment
Period, each of Morgan Stanley and Citi will, upon the Company’s request, severally and
not jointly, use its reasonable best efforts to assist the Company in arranging a private
placement of up to $40,000,000 of Common Stock (less the aggregate Purchase Price of any
shares of Common Stock previously purchased under any Underwriting Agreements). In the
event any such private placement is consummated, Morgan Stanley or Citi’s commitment
hereunder shall be reduced by an amount equal to the aggregate purchase price of the
shares of Common Stock issued in such private placement. Morgan Stanley and Citi’s
obligation under this paragraph shall be subject to the Company having first entered into
a customary engagement letter (a “Placement Agency Agreement”) with Morgan Stanley or
Citi engaging it to act as a placement agent in connection with such proposed private
placement and shall terminate at the end of the Commitment Period. 

        Nothing
contained herein shall restrict the ability of the Company to issue and sell shares to
Morgan Stanley or Citi or any other underwriter or third party on terms more advantageous
to the Company than those contained herein. 

        In
consideration of its commitment hereunder, you agree to pay to each of Morgan Stanley and
Citi, for its own account, a nonrefundable fee of $200,000, such fee to be due and
payable within one business day of your acceptance of this letter. Your obligation to pay
the foregoing fee will not be subject to counterclaim or setoff for, or be otherwise
affected by, any claim or dispute you may have. 

        You
agree to indemnify and hold harmless Morgan Stanley, Citi and each director, officer,
employee and affiliate thereof (each an “Indemnified Person”) from and against any and
all actions, suits, proceedings (including any investigations or inquiries), claims,
losses, damages, liabilities or expenses of any kind or nature whatsoever which may be
incurred by or asserted against or involve any such Indemnified Person as a result of or
arising out of or in any way related to or resulting from this letter, the transactions
contemplated by this letter, or in any way arise from any use or intended use of this
letter or the proceeds of the issuances of Common Stock contemplated by this letter, and
you agree to reimburse each Indemnified Person upon demand for any legal or other
out-of-pocket expenses incurred in connection with investigating, defending or preparing
to defend any such action, suit, proceeding (including any inquiry or investigation) or
claim (whether or not Morgan Stanley, Citi or any such other Indemnified Person is a
party to any action or proceeding out of which any such expenses arise) (collectively, an
“Action”); provided, however, that you shall not have to indemnify any Indemnified Person  

 
	 	
	 

against any loss, claim, damage,
expense or liability to the extent finally determined by a court of competent
jurisdiction to have resulted directly and primarily from the gross negligence or willful
misconduct of such Indemnified Person. This letter is issued for your benefit only and no
other person or entity may rely hereon. Neither Morgan Stanley nor Citi shall be
responsible or liable to you or any other person for consequential damages which may be
alleged as a result of this letter. Notwithstanding the foregoing, if the actions, suits,
proceedings, claims, losses, damages, liabilities or expenses relate to the shares of
Common Stock purchased under any Underwriting Agreement or placed pursuant to any
Placement Agency Agreement, the rights and obligations of you and the Indemnified Persons
with respect to indemnification shall be governed by the indemnification provisions of
such Underwriting Agreement or Placement Agency Agreement. 

        In
connection with all aspects of each transaction contemplated by this letter, you
acknowledge and agree, and acknowledge your affiliates’ understanding, that: (i) our
purchase commitment described in this letter is an arm’s-length commercial transaction
between you and your affiliates, on the one hand, and Morgan Stanley or Citi, on the
other hand, and you are capable of evaluating and understanding and understand and accept
the terms, risks and conditions of the transactions contemplated by this letter; (ii) in
connection with each transaction contemplated hereby and the process leading to such
transaction, Morgan Stanley or Citi is and has been acting solely as a principal and is
not acting as an agent or fiduciary, for you or any of your affiliates, stockholders,
creditors or employees or any other party; (iii) neither Morgan Stanley nor Citi has
assumed and will not assume an advisory or fiduciary responsibility in your or your
affiliates’ favor with respect to any of the transactions contemplated hereby or the
process leading thereto (irrespective of whether Morgan Stanley or Citi has advised or is
currently advising you or your affiliates on other matters) and neither Morgan Stanley
nor Citi has any obligation to you or your affiliates with respect to the transactions
contemplated hereby except those obligations expressly set forth in this letter; (iv)
Morgan Stanley or Citi and their respective affiliates may be engaged in a broad range of
transactions that involve interests that differ from yours and your affiliates and
neither Morgan Stanley nor Citi has any obligation to disclose any of such interests by
virtue of any fiduciary or advisory relationship; and (v) neither Morgan Stanley nor Citi
has provided any legal, accounting, regulatory or tax advice with respect to any of the
transactions contemplated hereby and you have consulted your own legal, accounting,
regulatory and tax advisors to the extent you have deemed appropriate. You hereby waive
and release, to the fullest extent permitted by law, any claims that you may have against
Morgan Stanley or Citi with respect to any breach or alleged breach of fiduciary duty. 

        If
the letter is not accepted by you as provided in the immediately succeeding paragraph,
you are to immediately return this letter (and any copies hereof) to the undersigned.
This letter may be executed in any number of counterparts, and by the different parties
hereto on separate counterparts, each of which counterpart shall be an original, but all
of which shall together constitute one and the same instrument. 

        If
you are in agreement with the foregoing, please sign and return to Morgan Stanley and
Citi (including by way of facsimile transmission) the enclosed copy of this letter, no
later than noon, New York time, on October 16, 2007. Our commitment set forth in this
letter shall terminate at the time and on the date referenced in the immediately
preceding sentence unless this letter is executed and returned by you as provided in such
sentence. 

 
	 	
	 

        This
letter shall be governed by, and construed in accordance with the laws of the State of
New York, and any right to trial by jury with respect to any claim, action, suit or
proceeding arising out of or contemplated by this letter is hereby waived. The parties
hereto hereby submit to the non-exclusive jurisdiction of the federal and New York State
courts located in the City of New York in connection with any dispute related to this
letter or any matters contemplated hereby or thereby. Delivery of an executed counterpart
of a signature page to this Commitment Letter by telecopier shall be effective as
delivery of a manually executed counterpart of this Commitment Letter. 

 
	 	
	 

	     	VERY TRULY YOURS,
	 	 	 
	 	By:	 MORGAN STANLEY & CO.
INCORPORATED
	 	 	 
	 	By:	 /s/ Kenneth G. Pott
      

    
	 	 	Name: Kenneth G. Pott 

      Title:   Managing Director
	 	 	 
	 	By:	CITIGROUP GLOBAL MARKETS INC.
	 	 	 
	 	By:	
      ________________________________
    
	 	 	Name:
                                                               

      Title:

Agreed to and Accepted this  

  16th day
of October, 2007 

CIT GROUP INC. 

By________________________ 

         
     Title: 

 
	 	
	 

	     	VERY TRULY YOURS,
	 	 	 
	 	By:	 MORGAN STANLEY & CO.
INCORPORATED
	 	 	 
	 	By:	 _______________________________
    
	 	 	Name: 

      Title:  
	 	 	 
	 	By:	CITIGROUP GLOBAL MARKETS INC.
	 	 	 
	 	By:	 /s/ Alexander Ivanov
      

    
	 	 	Name: Alexander Ivanov
                                                                

      Title:   Director

Agreed to and Accepted this  

  16th day
of October, 2007 

CIT GROUP INC. 

By________________________ 

         
     Title: 

 
	 	
	 

	     	VERY TRULY YOURS,
	 	 	 
	 	By:	 MORGAN STANLEY & CO.
INCORPORATED
	 	 	 
	 	By:	
      ________________________________
    
	 	 	Name:
                                                               

      Title:
	 	 	 
	 	By:	CITIGROUP GLOBAL MARKETS INC.
	 	 	 
	 	By:	
      ________________________________
    
	 	 	Name:
                                                               

      Title:

Agreed to and Accepted this  

  16th day
of October, 2007 

CIT GROUP INC. 

By   Glenn A. Votek

       Title:  EVP & Treasurer

 
	 	
	 

Annex A  

CIT GROUP INC. 

Common Stock 

Underwriting Agreement 

[Date]  

MORGAN STANLEY & CO.
INCORPORATED 

  CITIGROUP GLOBAL MARKETS INC. 

        As Representatives of the several
Underwriters named in Schedule I hereto 
c/o Morgan Stanley & Co. Incorporated 
1585
Broadway 
New York, New York 10036 

Ladies and Gentlemen: 

CIT Group Inc., a corporation
organized under the laws of Delaware  (the “Company”), proposes to sell to you [        ]
shares of its common stock, par value $0.01 per share (“Common Stock”). 

To the extent there are no
additional Underwriters listed on Schedule I other than you, the term Representatives as
used herein shall mean you, as Underwriters, and the terms Representatives and
Underwriters shall mean either the singular or plural as the context requires. Any
reference herein to the Registration Statement, the Base Prospectus, any Preliminary
Prospectus or the Final Prospectus shall be deemed to refer to and include the documents
incorporated by reference therein pursuant to Item 12 of Form S-3 which were filed under
the Exchange Act on or before the Effective Date of the Registration Statement or the
issue date of the Base Prospectus, any Preliminary Prospectus or the Final Prospectus, as
the case may be; and any reference herein to the terms “amend,” “amendment” or
“supplement” with respect to the Registration Statement, the Base Prospectus, any
Preliminary Prospectus or the Final Prospectus shall be deemed to refer to and include
the filing of any document under the Exchange Act after the Effective Date of the
Registration Statement or the issue date of the Base Prospectus, any Preliminary
Prospectus or the Final Prospectus, as the case may be, deemed to be incorporated therein
by reference. Certain terms used herein are defined in Section 20 hereof. 

        1.
Representations and Warranties. The Company represents and warrants to each Underwriter
as of the date hereof, as of the Closing Date referred to in Section 3 hereof and as of
each Date of Delivery (if any) referred to in Section 2(b) hereof, as set forth below in
this Section 1.  

        (a)
The Company meets the requirements for use of Form S-3 under the Act and has prepared and
filed with the Commission an automatic shelf registration statement (as defined in Rule
405) (File number 333-      ) on Form S-3, including a related Base Prospectus, for  

 
	 	
	 

registration under the Act of the
offering and sale of the Shares. No notice of objection of the Commission to the use of
the Registration Statement or any post-effective amendment thereto pursuant to Rule
401(g)(2) under the Securities Act has been received by the Company. No order suspending
the effectiveness of the Registration Statement has been issued by the Commission and no
proceeding for that purpose or pursuant to Section 8A of the Securities Act against the
Company or related to the offering has been initiated or threatened by the Commission.
Such Registration Statement, including any amendments thereto filed prior to the
Applicable Time, became effective upon filing. The Company has filed with the Commission,
pursuant to Rule 424(b), the Preliminary Prospectus relating to the Shares, which has
previously been furnished to you. The Company will file with the Commission the Final
Prospectus relating to the Shares in accordance with Rule 424(b). As filed, the Final
Prospectus shall contain all information required by the Act and the rules thereunder,
and, except to the extent the Representatives shall agree in writing to a modification,
shall be in all substantive respects in the form furnished to you prior to the Applicable
Time or, to the extent not completed at the Applicable Time, shall contain only such
specific additional information and other changes (beyond that contained in the Base
Prospectus and the Preliminary Prospectus) as the Company has advised you, prior to the
Applicable Time, will be included or made therein. The Registration Statement, at the
Applicable Time, meets the requirements set forth in Rule 415(a)(1)(x). 

        (b)
(i) On each Effective Date, the Registration Statement did, (ii) at the Applicable Time,
the Preliminary Prospectus filed pursuant to Rule 424(b) did, and (iii) when the Final
Prospectus is first filed in accordance with Rule 424(b) and on the Closing Date, the
Final Prospectus (and any supplement thereto) will, comply in all material respects with
the applicable requirements of the Act and the Exchange Act and the respective rules
thereunder; on each Effective Date and at the Applicable Time, the Registration Statement
did not and will not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the statements
therein not misleading; on the date of filing of the Base Prospectus, and as of its date
and on the Closing Date, the Final Prospectus (together with any supplement thereto) will
not include any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the circumstances
under which they were made, not misleading; provided, however, that the Company makes no
representations or warranties as to (i) that part of the Registration Statement which
shall constitute the Statement of Eligibility (Form T-1) under the Trust Indenture Act of
the Trustee or (ii) the information contained in or omitted from the Registration
Statement, the Preliminary Prospectus or the Final Prospectus (or any supplement thereto)
in reliance upon and in conformity with information furnished in writing to the Company
by or on behalf of any Underwriter through the Representatives specifically for inclusion
in the Registration Statement or the Final Prospectus (or any supplement thereto), it
being understood and agreed that the only such information furnished by or on behalf of
any Underwriter consists of the information described as such in Section 8 hereof. 

        (c)
At the Applicable Time, the Disclosure Package did not contain any untrue statement of a
material fact or omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were made, not  

 
	 	
2	 

misleading. The preceding sentence
does not apply to statements in or omissions from the Disclosure Package based upon and
in conformity with written information furnished to the Company by any Underwriter
through the Representatives specifically for use therein, it being understood and agreed
that the only such information furnished by or on behalf of any Underwriter consists of
the information described as such in Section 8 hereof. 

        (d)
The documents incorporated by reference in the Preliminary Prospectus, the Final
Prospectus and the Registration Statement, when they became effective or were filed with
the Commission, as the case may be, conformed in all material respects to the
requirements of the Act or the Exchange Act and the respective rules thereunder, as
applicable, and none of the documents contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary to make the
statements therein not misleading. Any further documents so filed and incorporated by
reference in the Preliminary Prospectus, the Final Prospectus and the Registration
Statement or any further amendment or supplement thereto, when such documents become
effective or are filed with the Commission, as the case may be, will conform in all
material respects to the requirements of the Act or the Exchange Act, as applicable, and
will not 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 not misleading. 

        (e)
(i) At the time of filing the Registration Statement, (ii) at the time of the most recent
amendment thereto for the purposes of complying with Section 10(a)(3) of the Act (whether
such amendment was by post-effective amendment, incorporated report filed pursuant to
Sections 13 or 15(d) of the Exchange Act or form of prospectus), (iii) at the time the
Company or any person acting on its behalf (within the meaning, for this clause only, of
Rule 163(c)) made any offer relating to the Shares in reliance on the exemption in Rule
163, and (iv) at the Applicable Time, the Company was a “well-known seasoned issuer” as
defined in Rule 405. The Company agrees to pay the fees required by the Commission
relating to the Shares within the time required by Rule 456(b)(1) without regard to the
proviso therein and otherwise in accordance with Rules 456(b) and 457(r). 

        (f)
(i) At the earliest time after the filing of the Registration Statement that the Company
or another offering participant made a bona fide offer (within the meaning of Rule
164(h)(2)) of the Shares and (ii) as of the Applicable Time, the Company was not and is
not an Ineligible Issuer (as defined in Rule 405), without taking account of any
determination by the Commission pursuant to Rule 405 that it is not necessary that the
Company be considered an Ineligible Issuer. 

        (g)
Each Issuer Free Writing Prospectus, including, without limitation, the final term sheet
prepared and filed pursuant to Section 5(b) hereto, does not and will not include any
information that conflicted, conflicts or will conflict with the information contained in
the Registration Statement, including any document incorporated therein and any
prospectus supplement deemed to be a part thereof that has not been superseded or
modified. The foregoing sentence does not apply to statements in or omissions from any
Issuer Free Writing Prospectus based upon and in conformity with written information
furnished to the Company by any Underwriter through the Representatives specifically for
use therein, it being understood and  

 
	 	
3	 

agreed that the only such
information furnished by or on behalf of any Underwriter consists of the information
described as such in Section 8 hereof. 

        (h)
The consolidated historical financial statements and schedules of the Company and its
consolidated subsidiaries included or incorporated by reference in the Preliminary
Prospectus, the Final Prospectus and the Registration Statement present fairly in all
material respects the consolidated financial condition, results of operations and cash
flows of the Company as of the dates and for the periods indicated and have been prepared
in conformity with generally accepted accounting principles applied on a consistent basis
throughout the periods presented (except as otherwise noted in such statements or
schedules). The selected financial data set forth under the caption “Selected
Consolidated Financial Information of CIT Group Inc.” in the Disclosure Package and the
Final Prospectus fairly present, on the basis stated in the Disclosure Package and the
Final Prospectus, the information included therein. 

        (i)
The authorized, issued and outstanding capital stock of the Company is as set forth in
the Disclosure Package and the Final Prospectus in the column entitled “Actual” under the
caption “Capitalization” (except for subsequent issuances, if any, pursuant to this
Agreement, pursuant to employee benefit plans, pursuant to the exercise of convertible
securities or options outstanding on the date hereof or pursuant to any dividend
reinvestment plan), and all of the shares of issued and outstanding capital stock set
forth thereunder have been duly authorized and validly issued and are fully paid and
non-assessable. None of the outstanding shares of capital stock of the Company was issued
in violation of the preemptive or other similar rights of any securityholder of the
Company. 

        (j)
The Common Stock conforms in all material respects to all statements relating thereto
contained or incorporated by reference in the Disclosure Package and the Final
Prospectus. The shares of Common Stock outstanding prior to the issuance of the Shares
have been duly authorized and are validly issued, fully paid and non-assessable. The
Shares have been duly authorized and, when issued and delivered in accordance with the
terms of this Agreement, will be validly issued, fully paid and non-assessable, and the
issuance of such Shares will not be subject to any preemptive or similar rights of any
securityholder of the Company 

        (k)
Neither the Company nor any of its affiliates, as such term is defined in Rule 501(b)
under the Act (each, an “Affiliate”), has taken, nor will the Company or any Affiliate
take, directly or indirectly, any action which is designed to or which has constituted or
which would be expected to cause or result in stabilization or manipulation of the price
of any security of the Company to facilitate the sale or resale of the Shares. 

        Any
certificate signed by any officer of the Company and delivered to the Representatives or
counsel for the Underwriters in connection with the offering of the Shares shall be
deemed a representation and warranty by the Company as to matters covered thereby, to
each Underwriter. 

        2.
Purchase and Sale. Subject to the terms and conditions and in reliance upon the
representations and warranties herein set forth, the Company agrees to sell to each
Underwriter, and each Underwriter agrees, severally and not jointly, to purchase from the  

 
	 	
4	 

Company, at $[      ] per Share the
respective numbers of Shares set forth opposite such Underwriter’s name in Schedule I
hereto. 

        3.
Delivery and Payment. Delivery of and payment for the Shares shall be made on [          ] at
10:00 a.m. at the offices of Davis Polk & Wardwell, 450 Lexington Avenue, New York,
NY 10017, or at such time on such later date not more than three Business Days after the
foregoing date as the Representatives shall designate, which date and time may be
postponed by agreement between the Representatives and the Company or as provided in
Section 9 hereof (such date and time of delivery and payment for the Shares being herein
called the “Closing Date”).  

        Delivery
of the Shares shall be made to the Representatives for the respective accounts of the
several Underwriters against payment by the several Underwriters through the
Representatives of the purchase price thereof to or upon the order of the Company by wire
transfer payable in same-day funds to the account specified by the Company. Delivery of
the Shares shall be made through the facilities of The Depository Trust Company unless
the Representatives shall otherwise instruct. 

        4.
Offering by Underwriters. It is understood that the several
Underwriters propose to offer the Shares for sale to the
public as set forth in the Final Prospectus.  

        5.
Agreements. The Company agrees with the several Underwriters
as follows:  

        (a)
              Prior to the termination of the offering of the Shares, the
                  Company will not file any amendment of the Registration
                  Statement or supplement (including the Final Prospectus or any
                  Preliminary Prospectus) to the Base Prospectus unless the
                  Company has furnished you a copy for your review prior to
                  filing and will not file any such proposed amendment or
                  supplement to which you reasonably object. The Company will
                  cause the Final Prospectus, properly completed, and any
                  supplement thereto to be filed in a form approved by the
                  Representatives with the Commission pursuant to the applicable
                  paragraph of Rule 424(b) within the time period prescribed and
                  will provide evidence satisfactory to the Representatives of
                  such timely filing. The Company will promptly advise the
                  Representatives (i) when the Final Prospectus, and any
                  supplement thereto, shall have been filed (if required) with
                  the Commission pursuant to Rule 424(b), (ii) when, prior to
                  termination of the offering of the Shares, any amendment to
                  the Registration Statement shall have been filed or become
                  effective, (iii) of any request by the Commission or its staff
                  for any amendment of the Registration Statement or for any
                  supplement to the Final Prospectus or for any additional
                  information, (iv) of the issuance by the Commission of any
                  stop order suspending the effectiveness of the Registration
                  Statement or of any notice objecting to its use or the
                  institution or threatening of any proceeding for that purpose
                  and (v) of the receipt by the Company of any notification with
                  respect to the suspension of the qualification of the Shares
                  for sale in any jurisdiction or the institution or threatening
                  of any proceeding for such purpose. The Company will use its
                  best efforts to prevent the issuance of any stop order or the
                  occurrence of any such suspension or objection to the use of
                  the Registration Statement and, upon such issuance, suspension
                  or notice of objection, to obtain as soon as possible the
                  withdrawal of such stop order or relief from such suspension
                  or objection,  

	 	
5	 

including, if necessary, by filing
an amendment                   to the Registration Statement or a new registration
statement                   and using its best efforts to have such amendment or new
                  registration statement declared effective as soon as
                  practicable. 

        (b)
              Upon the request of the Underwriters, to prepare a final term
                  sheet, substantially in the form of Exhibit A hereto,
                  containing solely a description of the Shares and the offering
                  thereof, in a final form approved by the Representatives and
                  to file such term sheet pursuant to Rule 433(d) within the
                  time required by such Rule. 

        (c)
              If, at any time prior to the filing of the Final Prospectus
                  pursuant to Rule 424(b), any event occurs as a result of which
                  the Disclosure Package would include any untrue statement of a
                  material fact or omit to state any material fact necessary to
                  make the statements therein in the light of the circumstances
                  under which they were made at such time not misleading, the
                  Company will (i) notify promptly the Representatives so that
                  any use of the Disclosure Package may cease until it is
                  amended or supplemented; (ii) amend or supplement the
                  Disclosure Package to correct such statement or omission; and
                  (iii) supply any amendment or supplement to you in such
                  quantities as you may reasonably request. 

        (d)
              If at any time when the Final Prospectus relating to the
                  Shares is required to be delivered under the Act (including in
                  circumstances where such requirement may be satisfied pursuant
                  to Rule 172), any event occurs as a result of which the Final
                  Prospectus, as then amended or supplemented, would include any
                  untrue statement of a material fact or omit to state any
                  material fact necessary to make the statements therein, in the
                  light of the circumstances under which they were made at such
                  time, not misleading, or if it should be necessary to amend
                  the Registration Statement, the Company will file a new
                  registration statement or supplement the Final Prospectus to
                  comply with the Act or the Exchange Act or the respective
                  rules thereunder, including in connection with the delivery of
                  the Final Prospectus, the Company will promptly (i) notify the
                  Representatives of any such event; (ii) prepare and file with
                  the Commission, subject to the requirements of paragraph (a)
                  of this Section 5, an amendment or supplement or new
                  registration statement that will correct such statement or
                  omission or effect such compliance; (iii) use its best efforts
                  to have any amendment to the Registration Statement or new
                  registration statement declared effective as soon as
                  practicable in order to avoid any disruption in use of the
                  Final Prospectus; and (iv) supply any supplemented or amended
                  Final Prospectus to the several Underwriters and counsel for
                  the Underwriters without charge in such quantities as they may
                  reasonably request. 

        (e)
              The Company will file such reports pursuant to the Exchange
                  Act and the rules and regulations thereunder, as are necessary
                  in order to make generally available to its security holders
                  as soon as practicable an earning statement within the meaning
                  of Rule 158 under the Act for the purposes of, and to provide
                  the benefits contemplated by the last paragraph of Section
                  11(a) of the Act. 

        (f)
              The Company will furnish to the Representatives and counsel
                  for the Underwriters, without charge, conformed copies of the
                  Registration Statement (including exhibits thereto) and to
                  each other Underwriter a copy of the Registration Statement
                  (without  

 
	 	
6	 

exhibits
thereto) and, so long as delivery of a
                  prospectus by an Underwriter or dealer may be required by the
                  Act (including in circumstances where such requirement may be
                  satisfied pursuant to Rule 172), as many copies of each
                  Preliminary Prospectus, the Final Prospectus and each Issuer
                  Free Writing Prospectus and any supplement thereto as the
                  Representatives may reasonably request. The Company will pay
                  the expenses of printing or other production of all documents
                  relating to the offering. 

        (g)
              The Company will arrange, if necessary, for the qualification
                  of the Shares for sale under the laws of such jurisdictions as
                  the Representatives may designate upon consultation with the
                  Company, will maintain such qualifications in effect so long
                  as required for the sale of the Shares and will pay any fee of
                  the Financial Industry Regulatory Authority, Inc., in
                  connection with its review of the offering; provided that in
                  no event shall the Company be obligated to qualify to do
                  business in any jurisdiction where it is not now so qualified
                  or to take any action that would subject it to service of
                  process in suits, other than those arising out of the offering
                  or sale of the Shares, in any jurisdiction where it is not now
                  so subject. 

        (h)
              The Company represents and agrees that, unless it has obtained
                  or will obtain the prior consent of the Representatives, and
                  each Underwriter, severally and not jointly, agrees with the
                  Company that, unless it has obtained or will obtain, as the
                  case may be, the prior consent of the Company, it has not made
                  and will not make any offer relating to the Shares that would
                  constitute an Issuer Free Writing Prospectus or that would
                  otherwise constitute a Free Writing Prospectus required to be
                  filed by the Company with the Commission or retained by the
                  Company under Rule 433, other than a Free Writing Prospectus
                  that contains information in the final term sheet prepared and
                  filed pursuant to Section 5(b) hereto; provided that the prior
                  consent of the parties hereto shall be deemed to have been
                  given in respect of any Free Writing Prospectus included in
                  Schedule II hereto. Any such free writing prospectus that the
                  parties hereto have agreed to use, prior to the use thereof,
                  is hereinafter referred to as a “Permitted Free Writing
                  Prospectus.” The Company agrees that it has treated and will
                  treat, as the case may be, each Permitted Free Writing
                  Prospectus as an “issuer free writing prospectus,” as defined
                  in Rule 433, and it has complied and will comply, as the case
                  may be, with the requirements of Rule 433 applicable to any
                  Permitted Free Writing Prospectus, including timely Commission
                  filing where required, legending and record keeping. The
                  Company consents to the use by any Underwriter of a free
                  writing prospectus that contains only (i) information
                  describing the preliminary terms of the Shares or their
                  offering or (ii) information that describes the final terms of
                  the Shares or their offering and that is included in the final
                  term sheet of the Company contemplated by Section 5(b). 

        (i)
              The Company agrees to pay the costs and expenses relating to
                  the following matters: (i) the issuance of the Shares and the
                  fees of the transfer agent; (ii) the preparation, printing or
                  reproduction of the Final Prospectus and each amendment or
                  supplement to either of them; (iii) the printing (or
                  reproduction) and delivery (including postage, air freight
                  charges and charges for counting and packaging) of such copies
                  of the Final Prospectus, and all amendments or supplements to
                  either of them, as may, in each case, be reasonably requested
                  for use in connection with the offering and sale of the
                  Shares; (iv) the preparation, printing, authentication,
                  issuance and delivery of certificates for the Shares; (v) any
                  stamp or transfer  

 
	 	
7	 

taxes in connection with the
original                   issuance and sale of the Shares; (vi) the printing (or
                  reproduction) and delivery of this Agreement, any blue sky
                  memorandum and all other agreements or documents printed (or
                  reproduced) and delivered in connection with the offering of
                  the Shares; (vii) any registration or qualification of the
                  Shares for offer and sale under the securities or blue sky
                  laws of the several states, and any other jurisdictions as the
                  Representatives may designate pursuant to Section 5(f)
                  (including filing fees and the reasonable fees and expenses of
                  counsel for the Underwriters relating to such registration and
                  qualification), provided that the Company shall not be
                  responsible for the fees and disbursements of more than one
                  law firm (other than local counsel) for all the Underwriters
                  in connection with the transactions contemplated by this
                  clause (vii), including the preparation of a blue sky
                  memorandum; (viii) the transportation and other expenses
                  incurred by or on behalf of Company representatives in
                  connection with presentations to prospective purchasers of the
                  Shares; (ix) the fees and expenses of the accountants for the
                  Company and the fees and expenses of counsel (including local
                  and special counsel) for the Company; and (x) all other costs
                  and expenses incident to the performance by the Company of its
                  obligations hereunder. It is understood, however, that, except
                  as provided in this Section 5 and Section 6 of this Agreement,
                  the Underwriters will pay all of their own costs and expenses,
                  including the costs and expenses of their counsel. 

        (j)
              During a period of 60 days after the date of the Preliminary
                  Prospectus, the Company will not, without the prior written
                  consent of the Representatives, directly or indirectly (i)
                  pledge, sell, or contract to sell, grant any option for the
                  sale of, hedge or otherwise dispose of any shares of Common
                  Stock, (ii) sell any option or contract to purchase any shares
                  of Common Stock, (iii) purchase any option or contract to sell
                  any shares of Common Stock, (iv) grant any option or contract
                  to sell any shares of Common Stock, (v) file a registration
                  statement for any shares of Common Stock or (vi) lend or
                  otherwise dispose of or transfer any shares of Common Stock.
                  The foregoing sentence applies to shares of Common Stock and
                  to securities convertible into or exchangeable or exercisable
                  for or repayable with shares of Common Stock, but does not
                  apply to (A) the Shares to be sold hereunder, (B) shares of
                  Common Stock issued by the Company upon exercise of options or
                  warrants outstanding on the date of this Agreement, or (C) the
                  issuance of any Common Stock or options pursuant to employee
                  benefit plans existing on the date hereof. 

        (k)
              The Company will use its best efforts to have the Shares
                  listed on the New York Stock Exchange (the “NYSE”), including,
                  but not limited to, a filing of a supplemental listing
                  application with the NYSE. 

        6.
Conditions to the Obligations of the Underwriters. The
obligations of the Underwriters to purchase the Shares shall
be subject to the accuracy of the representations and
warranties on the part of the Company contained herein at the
Applicable Time and the Closing Date, to the accuracy of the
statements of the Company made in any certificates pursuant to
the provisions hereof, to the performance by the Company of
its obligations hereunder and to the following additional
conditions:  

 
	 	
8	 

        (a)
              The Final Prospectus, and any supplement thereto, has been
                  filed in the manner and within the time period required by
                  Rule 424(b); the final term sheet contemplated by Section 5(b)
                  hereto, and any other material required to be filed by the
                  Company pursuant to Rule 433(d) under the Act, shall have been
                  filed with the Commission within the applicable time periods
                  prescribed for such filings by Rule 433; the Company has paid
                  the fees required by the Commission relating to the Shares
                  within the time required by Rule 456(b)(1) without regard to
                  the proviso therein and otherwise in accordance with Rules
                  456(b) and 457(r); and no stop order suspending the
                  effectiveness of the Registration Statement or any notice
                  objecting to its use shall have been issued and no proceedings
                  for that purpose shall have been instituted or threatened. 

        (b)
              The Company shall have requested and caused Shearman &                  Sterling
LLP, counsel for the Company, to furnish to the                   Representatives an
opinion, dated the Closing Date and                   addressed to the Representatives,
in form and substance                   satisfactory to the Representatives, to the
effect set forth                   in Exhibit B hereto. 

        (c)
              The Company shall have requested and caused Eric Mandelbaum,
                  Deputy General Counsel of the Company, to furnish to the
                  Representatives an opinion, dated the Closing Date and
                  addressed to the Representatives, in form and substance
                  satisfactory to the Representatives, to the effect set forth
                  in Exhibit C hereto and subject to usual and customary
                  qualifications, limitations and assumptions. 

        (d)
              The Representatives shall have received from Wilmer Cutler
                  Pickering Hale and Dorr LLP, counsel to the Underwriters, such
                  opinion or opinions, dated the Closing Date and addressed to
                  the Representatives, with respect to the issuance and sale of
                  the Shares, the Registration Statement, the Disclosure
                  Package, the Final Prospectus (together with any supplement
                  thereto) and other related matters as the Representatives may
                  reasonably require, and the Company shall have furnished to
                  such counsel such documents as they request for the purpose of
                  enabling them to pass upon such matters. 

        (e)
              The Company shall have furnished to the Representatives a
                  certificate, signed by the principal financial or accounting
                  officer of the Company, dated the Closing Date, to the effect
                  that the signers of such certificate have carefully examined
                  the Registration Statement, the Final Prospectus, the
                  Disclosure Package and any amendments or supplements thereto
                  and this Agreement and that: 

	  	        (i)
              the representations and warranties of the Company in this
                  Agreement are true and correct on and as of the Closing Date
                  with the same effect as if made on the Closing Date, and the
                  Company has complied with all the agreements and satisfied all
                  the conditions on its part to be performed or satisfied
                  hereunder at or prior to the Closing Date; and 

	  	        (ii)
             no stop order suspending the effectiveness of the Registration
                  Statement or any notice objecting to its use has been issued
                  and no proceedings for that purpose have been instituted or,
                  to the Company’s knowledge, threatened, and 

 
	 	
9	 

	  	        (iii)
            since the date of the most recent financial statements
                  included or incorporated by reference in the Final Prospectus
                  (exclusive of any supplement thereto), there has been no
                  material adverse change in the condition (financial or
                  otherwise), earnings, business or properties of the Company
                  and the Company’s subsidiaries, taken as a whole, whether or
                  not arising from transactions in the ordinary course of
                  business, except as set forth in or contemplated in the
                  Disclosure Package and the Final Prospectus (exclusive of any
                  supplement thereto). 

        (f)
              On the date hereof, the Company shall have requested and
                  caused PricewaterhouseCoopers LLP to furnish to the
                  Representatives a letter dated the date hereof, in form and
                  substance satisfactory to the Representatives, together with
                  signed or reproduced copies of such letter for each of the
                  other Underwriters, containing statements and information of
                  the type ordinarily included in accountants’ “comfort letters”
                  to underwriters with respect to the financial statements and
                  certain financial information of the Company and its
                  subsidiaries included or incorporated by reference in the
                  Disclosure Package and the Final Prospectus. 

        (g)
              On the Closing Date, the Company shall have requested and
                  caused PricewaterhouseCoopers LLP to furnish to the
                  Representatives a letter dated the Closing Date, affirming the
                  statements made in the comfort letter referred to in Section
                  6(f). 

        (h)
              Subsequent to the Applicable Time or, if earlier, the dates as
                  of which information is given in the Registration Statement
                  (exclusive of any amendment thereof), the Disclosure Package
                  (exclusive of any supplement thereto) and the Final Prospectus
                  (exclusive of any supplement thereto), there shall not have
                  been (i) any change or decrease in the amounts specified in
                  the letter referred to in paragraph (f) of this Section 6; or
                  (ii) any change, or any development involving a prospective
                  change, in or affecting the business, properties, financial
                  condition or results of operations of the Company and its
                  subsidiaries, taken as a whole, whether or not arising from
                  transactions in the ordinary course of business, except as set
                  forth in or contemplated in the Disclosure Package and the
                  Final Prospectus (exclusive of any supplement thereto), the
                  effect of which, in any case referred to in clause (i) or (ii)
                  above, is, in the sole judgment of the Representatives, so
                  material and adverse as to make it impractical or inadvisable
                  to proceed with the offering or delivery of the Shares as
                  contemplated by the Registration Statement (exclusive of any
                  amendment thereof), the Disclosure Package and the Final
                  Prospectus (exclusive of any supplement thereto). 

        (i)
              Subsequent to the Applicable Time, there shall not have been
                  any decrease in the rating of any of the Company’s debt
                  securities by any “nationally recognized statistical rating
                  organization” (as defined for purposes of Rule 436(g) under
                  the Act) or any notice given of any intended or potential
                  decrease in any such rating or of a possible change in any
                  such rating that does not indicate the direction of the
                  possible change. 

        (j)
              Prior to the Closing Date, the Company shall have furnished to
                  the Representatives such further information, certificates and
                  documents as the Representatives may reasonably request. 

 
	 	
10	 

        If
any of the conditions specified in this Section 6 shall not have been fulfilled when and
as provided in this Agreement, or if any of the opinions and certificates mentioned above
or elsewhere in this Agreement shall not be reasonably satisfactory in form and substance
to the Representatives and counsel for the Underwriters, this Agreement and all
obligations of the Underwriters hereunder may be canceled at, or at any time prior to,
the Closing Date by the Representatives. Notice of such cancellation shall be given to
the Company in writing or by telephone or facsimile confirmed in writing. 

        The
documents required to be delivered by this Section 6 will be delivered at the office of
Davis Polk & Wardwell, counsel for the Underwriters, at 450 Lexington Avenue, New
York, N.Y. 10017, on the Closing Date. 

        7.
Reimbursement of Underwriters’ Expenses. If the sale of the Shares provided for herein is
not consummated because any condition to the obligations of the Underwriters set forth in
Section 6 hereof is not satisfied, because of any termination pursuant to Section 10
hereof or because of any refusal, inability or failure on the part of the Company to
perform any agreement herein or comply with any provision hereof other than by reason of
a default by any of the Underwriters, the Company will reimburse the Underwriters
severally through the Representatives on demand for all out-of-pocket expenses (including
reasonable fees and disbursements of counsel) that shall have been incurred by them in
connection with the proposed purchase and sale of the Shares.  

        8.
Indemnification and Contribution. (a) The Company agrees to indemnify, defend and hold
harmless each Underwriter and any person who controls such Underwriter within the meaning
of Section 15 of the Act or Section 20 of the Exchange Act from and against any loss,
expense, liability or claim (including the reasonable cost of investigation) which,
jointly or severally, such Underwriter or any such controlling person may incur under the
Act or otherwise, insofar as such loss, expense, liability or claim arises out of or is
based upon any untrue statement or alleged untrue statement of a material fact contained
in the Registration Statement, the Disclosure Package, the Preliminary Prospectus, the
Final Prospectus or any amendment or supplement thereto, or arises out of or is based
upon any omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein (in the case of the Disclosure
Package, the Preliminary Prospectus or the Final Prospectus, in light of the
circumstances under which they were made) not misleading, except insofar as any such
loss, expense, liability or claim arises out of or is based upon any alleged untrue
statement of a material fact contained (i) therein in conformity with information
furnished in writing by or on behalf of any Underwriter by the Representatives to the
Company expressly for use in any of such documents or (ii) in the Form T-1 Statement of
Eligibility under the Trust Indenture Act of the Trustee or arises out of or is based
upon any alleged omission to state therein a material fact in connection with such
information required to be stated therein or necessary to make such information not
misleading. The Company’s agreement to indemnify each Underwriter or any such controlling
person as aforesaid is expressly conditioned upon the Company being notified of the
action in connection therewith brought against an Underwriter or such controlling person
by letter or telegram or facsimile transmission addressed to the Company with reasonable
promptness after the first legal process which discloses the nature of the liability   

 
	 	
11	 

or claim shall have been served upon
an Underwriter or such controlling person (or after such Underwriter or such controlling
person shall have received notice of such service upon any agent designated by such
Underwriter or such controlling person), but failure so to notify the Company shall not
relieve the Company from any liability which it may have to an Underwriter or to such
controlling person otherwise than on account of the indemnity agreement contained in this
Section 8. 

        The
Company shall assume the defense of any suit brought to enforce any such liability or
claim, including the employment of counsel satisfactory to such Underwriter or such
controlling person and the payment of all expenses. The Underwriter or such controlling
person against whom such suit is brought shall have the right to employ one separate
counsel in any such suit and participate in the defense thereof, but the fees and
expenses of such counsel shall be at the expense of the Underwriter or the expense of
such controlling person unless (i) the employment of such counsel has been specifically
authorized by the Company or (ii) the named parties to any such suit (including any
impleaded parties) include such Underwriter or such controlling person and the Company
and such Underwriter or such controlling person shall have been advised by such counsel
that there may be one or more legal defenses available to it which are different from or
additional to those available to the Company, in which case the Company shall not have
the right to assume the defense of such action on the behalf of such Underwriter or on
the behalf of such controlling person, it being understood, however, that the Company
shall not, in connection with any one such action or separate but substantially similar
or related actions in the same jurisdiction arising out of the same general allegations
or circumstances, be liable for the reasonable fees and expenses of more than one
separate firm of attorneys (and any required local counsel) for such Underwriter and such
controlling persons, which firm (and local counsel, if any) shall be designated in
writing by the Underwriter. The Company shall not be liable for any settlement of any
such action effected without its consent (which will not be unreasonably withheld or
delayed) unless such settlement includes an unconditional release of the Company from all
liability arising out of such loss, expense, liability or claim. 

        The
Company agrees to notify each Underwriter with reasonable promptness of the commencement
of any litigation or proceedings against the Company or any of its officers or directors
in connection with the issue and sale of the Shares or with the Registration Statement,
the Disclosure Package, the Preliminary Prospectus or the Final Prospectus. 

        (b)
The Underwriters represent and warrant that the information furnished in writing to the
Company expressly for use with reference to the Underwriters in the Registration
Statement, the Preliminary Prospectus or the Final Prospectus does not contain any untrue
statement of a material fact and does not omit to state a material fact in connection
with such information required to be stated in the Registration Statement, the
Preliminary Prospectus or the Final Prospectus or necessary to make such information (in
the case of the Preliminary Prospectus or the Final Prospectus, in light of the
circumstances under which such information was provided) not misleading. 

        Each
Underwriter severally agrees to indemnify, defend and hold harmless the Company, its
directors and officers and any person who controls the Company within the  

 
	 	
12	 

meaning of Section 15 of the Act or
Section 20 of the Exchange Act from and against any loss, expense, liability or claim
(including the reasonable cost of investigation) which, jointly or severally, the Company
or any other indemnified person may incur under the Act or otherwise, insofar as such
loss, expense, liability or claim arises out of or is based upon any untrue statement or
alleged untrue statement of a material fact contained in the Registration Statement, the
Disclosure Package, the Preliminary Prospectus, the Final Prospectus or any amendment or
supplement thereto which is in reliance on and in conformity with information furnished
in writing by or on behalf of the Underwriters to the Company expressly for use with
reference to the Underwriters, or arises out of or is based upon any omission or alleged
omission to state a material fact in connection with such information required to be
stated in any of such documents or necessary to make such information (in the case of the
Disclosure Package, the Preliminary Prospectus or the Final Prospectus, in light of the
circumstances under which such information was provided) not misleading. The Company
acknowledges that the statements set forth [in the last paragraph of the cover page of
the Preliminary Prospectus and the Final Prospectus regarding delivery of the Shares and,
under the heading “Underwriting” in the Preliminary Prospectus and the Final Prospectus
(in each case not including the Base Prospectus), (i) the list of Underwriters and their
respective participation in the sale of the Shares in the Preliminary Prospectus and the
Final Prospectus (in each case not including the Base Prospectus) and (ii) the paragraphs
related to market making, stabilization, syndicate covering transactions and penalty bids
in any Preliminary Prospectus and the Final Prospectus (in each case not including the
Base Prospectus)], constitute the only information furnished in writing by or on behalf
of the several Underwriters for inclusion in any Preliminary Prospectus or the Final
Prospectus. Each Underwriter’s agreement to indemnify the Company and any other
indemnified person as aforesaid is expressly conditioned upon such Underwriter being
notified of the action in connection therewith brought against the Company or any other
indemnified person by letter, telegram, or facsimile transmission addressed to it at its
address furnished to the Company for the purpose, with reasonable promptness after the
first legal process which discloses the nature of the liability or claim shall have been
served upon the Company or any other indemnified person (or after the Company or any such
person shall have received notice of such service on any agent designated by the Company
or any such person), but failure so to notify an Underwriter shall not relieve such
Underwriter from any liability which it may have to the Company or any other indemnified
person otherwise than on account of the indemnity agreement contained in this Section 8. 

        Each
Underwriter shall assume the defense of any suit brought to enforce any such liability or
claim, including the employment of counsel satisfactory to the Company or such other
person and the payment of all expenses. The Company or other indemnified person against
whom such suit is brought shall have the right to employ separate counsel in any such
suit and participate in the defense thereof, but the fees and expenses of such counsel
shall be at the expense of the Company or such other indemnified person unless (i) the
employment of such counsel has been specifically authorized by such Underwriter or (ii)
the named parties to any suit (including any impleaded parties) include the Company or
such other indemnified person and such Underwriter, and the Company or such other
indemnified person shall have been advised by such counsel that there may be one or more
legal defenses available to it which are different from or additional to those available
to the Underwriter, in which case the Underwriter shall not  

 
	 	
13	 

have the right to assume the defense
of such action on behalf of the Company or such other indemnified person, it being
understood, however, that such Underwriter shall not, in connection with any one such
action or separate but substantially similar or related actions in the same jurisdiction
arising out of the same general allegations or circumstances, be liable for the
reasonable fees and expenses of more than one separate firm of attorneys (and any
required local counsel) for the Company and such person, which firm (and local counsel,
if any) shall be designated in writing by the Company. An Underwriter shall not be liable
for any settlement of any such action effected without its consent (which will not be
unreasonably withheld or delayed) unless such settlement includes an unconditional
release of such Underwriter from all liability arising out of such loss, expense,
liability or claim. 

        (c)
If the indemnification provided for in this Agreement is unavailable to or insufficient
to hold harmless an indemnified party under subsections (a) and (b) above for any reason
other than as specified therein in respect of any losses, expenses, liabilities or claims
referred to therein, then each applicable 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, expenses, liabilities or claims (i) in such
proportion as is appropriate to reflect the relative benefits received by the Company on
the one hand and the Underwriters on the other hand from the offering of the Shares; or
(ii) if the allocation provided in clause (i) above is not permitted by applicable law,
in such proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the Company on the one hand and of
the Underwriters on the other hand in connection with the statements or omissions which
resulted in such losses, expenses, liabilities or claims, as well as any other relevant
equitable considerations. The relative benefits received by the Company on the one hand
and the Underwriters on the other hand shall be deemed to be in the same proportion as
the total net proceeds (before deducting expenses) to the Company from the sale of the
Shares bears to the total underwriting fees received by the Underwriters, in each case as
set forth on the cover page of the Final Prospectus. The relative fault of the Company on
the one hand and of the Underwriters on the other hand shall be determined by reference
to, among other things, whether the untrue statement or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact relates to
information supplied by the Company or by the Underwriters and the parties’ relative
intent, knowledge, access to information and opportunity to correct or prevent such
statement or omission. The amount paid or payable by a party as a result of the losses,
claims, damages and liabilities referred to above shall be deemed to include any legal or
other fees or expenses reasonably incurred by such party in connection with investigating
or defending any claim or action. 

        The
Company and the Underwriters agree that it would not be just and equitable if
contribution pursuant to this Agreement were determined by pro rata allocation (even if
the Underwriters were treated as one entity for such purpose) or by any other method of
allocation which does not take account of the equitable considerations referred to in the
immediately preceding paragraph. Notwithstanding the provisions of this Agreement, each
Underwriter shall not be required to contribute any amount in excess of the amount by
which the total price at which the Shares placed by such Underwriter exceeds the amount
of the damages which such Underwriter has otherwise been required to pay by reason of an
untrue or alleged untrue  

 
	 	
14	 

statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. Each Underwriter’s obligation in this subsection (c)
to contribute is several and not joint, in the same proportion which the amount of the
Shares which were distributed to the public by such Underwriter bears to the total amount
of such Shares distributed to the public through all of the Underwriters pursuant to this
Agreement. 

        The
obligations of the Company and the Underwriters under this Section 8 shall be in addition
to any liability that the Company or the Underwriters may otherwise have. 

        9.
Default by an Underwriter. If any one or more Underwriters shall fail to purchase and pay
for any of the Shares agreed to be purchased by such Underwriter hereunder and such
failure to purchase shall constitute a default in the performance of its or their
obligations under this Agreement, the remaining Underwriters shall be obligated severally
to take up and pay for (in the respective proportions which the number of Shares set
forth opposite their names in Schedule I hereto bears to the aggregate number of Shares
set forth opposite the names of all the remaining Underwriters) the Shares which the
defaulting Underwriter or Underwriters agreed but failed to purchase; provided, however,
that in the event that the aggregate number of Shares which the defaulting Underwriter or
Underwriters agreed but failed to purchase shall exceed 10% of the aggregate number of
Shares set forth in Schedule I hereto, the remaining Underwriters shall have the right to
purchase all, but shall not be under any obligation to purchase any, of the Shares, and
if such nondefaulting Underwriters do not purchase all the Shares, this Agreement will
terminate without liability to any nondefaulting Underwriter or the Company. In the event
of a default by any Underwriter as set forth in this Section 9, the Closing Date shall be
postponed for such period, not exceeding five Business Days, as the Representatives shall
determine in order that the required changes in the Registration Statement and the Final
Prospectus or in any other documents or arrangements may be effected. Nothing contained
in this Agreement shall relieve any defaulting Underwriter of its liability, if any, to
the Company or any nondefaulting Underwriter for damages occasioned by its default
hereunder.  

        10.
Termination. This Agreement shall be subject to termination in the absolute discretion of
the Representatives, by notice given to the Company prior to delivery of and payment for
the Shares, if at any time prior to such time (i) trading in the Company’s Common Stock
shall have been suspended by the Commission or the NYSE or trading in securities
generally on the NYSE shall have been suspended or limited or minimum prices shall have
been established on such exchange; (ii) a banking moratorium shall have been declared
either by U.S. federal or New York State authorities; or (iii) there shall have occurred
any outbreak or escalation of hostilities, declaration by the United States of a national
emergency or war or other calamity or crisis the effect of which on financial markets is
such as to make it, in the sole judgment of the Representatives, impractical or
inadvisable to proceed with the offering or delivery of the Shares as contemplated by any
Preliminary Prospectus or the Final Prospectus (exclusive of any supplement thereto).  

 
	 	
15	 

        11.
Representations and Indemnities to Survive. The respective agreements, representations,
warranties, indemnities and other statements of the Company or its officers and of the
Underwriters set forth in or made pursuant to this Agreement will remain in full force
and effect, regardless of any investigation made by or on behalf of the Underwriters, the
Company or any of the indemnified persons referred to in Section 8 hereof, and will
survive delivery of and payment for the Shares. The provisions of Sections 7, 8 and the
final sentence of Section 9 hereof shall survive the termination or cancellation of this
Agreement.  

        12.
Notices. All communications hereunder will be in writing and effective only on receipt,
and, if sent to the Representatives, will be mailed, delivered or telefaxed to Morgan
Stanley & Co. Incorporated, 1585 Broadway, New York, New York 10036, Attention:
Equity Syndicate Desk, with a copy to the Legal Department or, if sent to the Company,
will be mailed, delivered or telefaxed to (973) 740-5148 and confirmed to it at 1 CIT
Drive, Livingston, New Jersey 07039, attention of the Legal Department.  

        13.
Successors. This Agreement will inure to the benefit of and be binding upon the parties
hereto and their respective successors and the indemnified persons referred to in Section
8 hereof and their respective successors, and no other person will have any right or
obligation hereunder.  

        14.
No Fiduciary Duty. The Company hereby acknowledges that (a) each of the Underwriters has
been retained solely as an underwriter of the Shares and not as an advisor to, or agent
of, the Company or any other person, and (b) the engagement of each of the Underwriters,
in connection with the issuance and sale of the Shares, is as an independent contractor
and not in any other capacity, including as a fiduciary. Furthermore, the Company and
each of the Underwriters agree that it is solely responsible for making its own
independent judgments with respect to the issuance and sale of the Shares.  

        15.
Integration. This Agreement supersedes all prior agreements and understandings (whether
written or oral) between the Company and the Underwriters, or any of them, with respect
to the subject matter hereof.  

        16.
Applicable Law. This Agreement will be governed by and construed in accordance with the
laws of the State of New York applicable to contracts made and to be performed within the
State of New York.  

        17.
Waiver of Jury Trial. The Company and the Underwriters hereby irrevocably waive, to the
fullest extent permitted by applicable law, any and all right to trial by jury in any
legal proceeding arising out of or relating to this Agreement or the transactions
contemplated hereby.  

        18.
Counterparts. This Agreement may be signed in one or more counterparts, each of which
shall constitute an original and all of which together shall constitute one and the same
agreement.  

 
	 	
16	 

         

        19.
Headings. The section headings used herein are for convenience only and shall not affect
the construction hereof. 

        20.
Definitions. The terms that follow, when used in this Agreement, shall have the meanings
indicated. 

        “Act”
and “Securities Act” shall mean the Securities Act of 1933, as amended, and the rules and
regulations of the Commission promulgated thereunder. 

        “Applicable
Time” means [•] [a.m./p.m.] (New York City time) on the date of this Agreement. 

       “”Base
Prospectus” shall mean the base prospectus referred to in paragraph 1(a) above contained
in the Registration Statement at the Applicable Time. 

        “Business
Day” shall mean any day other than a Saturday, a Sunday or a legal holiday or a day on
which banking institutions or trust companies are authorized or obligated by law to close
in The City of New York. 

        “Commission”
shall mean the Securities and Exchange Commission. 

        “Disclosure
Package” shall mean (i) the Base Prospectus, (ii) the Preliminary Prospectus used most
recently prior to the Applicable Time, (iii) the Issuer Free Writing Prospectuses, if
any, identified in Schedule II hereto, (iv) the final term sheet prepared and filed
pursuant to Section 5(b) hereto, if any, and (v) any other Free Writing Prospectus that
the parties hereto shall hereafter expressly agree in writing to treat as part of the
Disclosure Package. 

        “Effective
Date” shall mean each date and time that the Registration Statement and any
post-effective amendment or amendments thereto became or become effective. 

        “Exchange
Act” shall mean the Securities Exchange Act of 1934, as amended, and the rules and
regulations of the Commission promulgated thereunder. 

        “Final
Prospectus” shall mean the prospectus supplement relating to the Shares that was first
filed pursuant to Rule 424(b) after the Applicable Time, together with the Base
Prospectus. 

        “Free
Writing Prospectus” shall mean a free writing prospectus, as defined in Rule 405. 

        “Investment
Company Act” shall mean the U.S. Investment Company Act of 1940, as amended, and the
rules and regulations of the Commission promulgated thereunder. 

        “Issuer
Free Writing Prospectus” shall mean an issuer free writing prospectus, as defined in Rule
433. 

 
	 	
17	 

       “Preliminary
Prospectus” shall mean any preliminary prospectus supplement to the Base Prospectus
referred to in paragraph 1(a) above which is used prior to the filing of the Final
Prospectus, together with the Base Prospectus. 

        “Registration
Statement” shall mean the registration statement referred to in paragraph 1(a) above,
including exhibits and financial statements and any prospectus supplement relating to the
Shares that is filed with the Commission pursuant to Rule 424(b) and deemed part of such
registration statement pursuant to Rule 430A or Rule 430B, as amended on each Effective
Date and, in the event any post-effective amendment thereto becomes effective prior to
the Closing Date, shall also mean such registration statement as so amended. 

        “Rule
158”, “Rule 163”, “Rule 164”, “Rule 172”, “Rule 405”, “Rule 415”, “Rule 424”, “Rule
430A”, “Rule 430B” and “Rule 433” refer to such rules under the Act. 

        “Trust
Indenture Act” shall mean the Trust Indenture Act of 1939, as amended and the rules and
regulations of the Commission promulgated thereunder. 

        “Well-Known Seasoned Issuer” shall mean a well-known seasoned issuer, as defined in Rule
405.

 
	 	
18	 

        If
the foregoing is in accordance with your understanding of our agreement, please sign and
return to us the enclosed duplicate hereof, whereupon this letter and your acceptance
shall represent a binding agreement among the Company and the several Underwriters. 

	     	 	Very truly yours, 
	 	 	 
	 	 	CIT Group Inc. 
	 	 	 
	 	By:	__________________________________
	 	 	Name: Glenn A. Votek 

                                                          Title: Executive Vice President
& Treasurer 

 

	 	
19	 

        The
foregoing Agreement is hereby confirmed and accepted as of the date first above written. 

By:  MORGAN STANLEY & CO.
INCORPORATED 

By:__________________________
      

          
  Name:       

          
  Title: 

By:  CITIGROUP GLOBAL MARKETS INC. 

By:__________________________
      

           
  Name:       

            Title: 

For themselves and as
Representatives of  

  the other several Underwriters  

  named in Schedule I to the 

  foregoing
Agreement. 

 
	 	
20	 

SCHEDULE I 

	Underwriters 
      

    	Number of Shares to be 

Purchased 
      

    
	Morgan Stanley & Co. Incorporated	 
	Citigroup Global Markets Inc	 
	 	 
	Total	 

 
	 	
21	 

SCHEDULE II 

Schedule of Free
Writing Prospectuses included in the Disclosure Package 

Pricing Term Sheet, attached as
Exhibit A hereto. 

 
	 	
	 

EXHIBIT A 

Filed pursuant to Rule
433                                                                         

  Registration
Statement No. 333-131159 

[To come] 

 
	 	
	 

EXHIBIT B 

Form of Opinion of
Shearman & Sterling LLP 

	1.  	  	The
Company is a corporation duly incorporated, validly existing and in          good
standing under the laws of the State of Delaware with corporate          power and
authority under such laws to conduct its business as          described in the Disclosure
Package and the Final Prospectus. 

	2.  	  	The
Company (a) has the corporate power to execute, deliver and perform          its
obligations under the Underwriting Agreement and (b) has taken all          corporate
action necessary to authorize the execution, delivery and          performance of its
obligations under the Underwriting Agreement. 

	3.  	  	The
Underwriting Agreement has been duly authorized, executed and          delivered by the
Company. 

	4.  	  	The
statements in the Disclosure Package and the Final Prospectus under          the caption
“Description of Capital Stock”, insofar as such statements          constitute summaries
of the instruments or documents referred to          therein, fairly summarize in all
material respects the instruments or          documents referred to therein. 

	5.  	  	The
execution and delivery by the Company of the Underwriting Agreement do not, and the
         performance by the Company of its obligations thereunder and the consummation of
the transactions          contemplated thereby will not, (a) result in a violation of the
Company’s certificate of          incorporation or by-laws, (b) result in a violation of
Generally Applicable Law or (c) result in a          breach of, a default under or the
acceleration of (or entitle any party to accelerate) the          maturity of any
obligation of the Company under, or result in or require the creation of any lien
         upon or security interest in any property of the Company pursuant to the terms
of, any document or          contract filed as an exhibit, pursuant to Items 601(b)(4) or
601(b)(10) of Regulation S-K under          the Act, to (i) the Company’s most recently
filed annual report on Form 10-K or the Company’s          quarterly reports on Form 10-Q
for the quarterly periods ended [      ], respectively,          and (ii) the
Company’s Current Reports on Form 8-K filed with the Commission on          [          ]. 

	6.  	  	The
Company is not required to register as an investment company under          the
Investment Company Act of 1940, as amended. 

	7.  	  	No
authorization, approval or other action by, and no notice to or          filing with, any
United States federal or New York governmental          authority or regulatory body is
required for the due execution,          delivery or performance by the Company of the
Underwriting Agreement,          except as may be required under the state securities or
“blue sky” laws          of any jurisdiction in the United States in connection with the
offer          and sale of the Shares and the listing of the Shares on the New York
         Stock Exchange. 

 
	 	
	 

	8.  	  	To
our knowledge, as of the date hereof, no stop order suspending the          effectiveness
of the Registration Statement has been issued under the          Act, and no proceedings
for such purpose have been initiated or          threatened by the Commission. 

	9.  	  	The
descriptions of U.S. federal income tax consequences set forth          under “Material
U.S. Federal Income Tax Considerations” in the          Disclosure Package and the Final
Prospectus, insofar as such          descriptions constitute statements of U.S. federal
income tax law or          legal conclusions and subject to the limitations and
conditions          described herein, are accurate in all material respects. 

	10.  	  	In
our opinion, (a) each of the documents incorporated by reference in the Final Prospectus
(other          than the financial statements and other financial or statistical data
contained or incorporated by          reference therein or omitted therefrom, as to which
we express no opinion), at the time it was          filed with the Commission, appears on
its face to have been appropriately responsive in all          material respects to the
requirements of the Exchange Act, and the applicable rules and          regulations of
the Commission thereunder, and (b) each of the Registration Statement and the Final
         Prospectus (other than the financial statements and other financial or
statistical data contained          or incorporated by reference therein or omitted
therefrom and the Trustee’s Statement of          Eligibility on Form T-1, as to which we
express no opinion) appears on its face to be          appropriately responsive in all
material respects to the requirements of the Act and the          applicable rules and
regulations of the Commission thereunder. 

	11.  	  	No
facts came to our attention which gave us reason to believe that (i) the Registration
Statement          (other than the financial statements and other financial or
statistical data contained or          incorporated by reference therein or omitted
therefrom and the Trustee’s Statement of Eligibility          on Form T-1, as to which we
have not been requested to comment), as of the date of the filing of          the
Company’s annual report on Form 10-K for the year ended December 31, 200[ ] or as of the
date          of the Underwriting Agreement, contained an untrue statement of a material
fact or omitted to          state a material fact required to be stated therein or
necessary to make the statements therein          not misleading, (ii) the Disclosure
Package (other than the financial statements and other          financial or statistical
data contained or incorporated by reference therein or omitted therefrom,          as to
which we have not been requested to comment), as of [•] [a.m./p.m.] (Eastern Time)
         on[         ] (the “Applicable Time ”), contained or contains an untrue
statement of a material          fact or omitted or omits to state a material fact
necessary in order to make the statements          therein, in the light of the
circumstances under which they were made, not misleading, or          (iii) the Final
Prospectus (other than the financial statements and other financial or statistical
         data contained or incorporated by reference therein or omitted therefrom, as to
which we have not          been requested to comment), as of its date, and as of the date
hereof, contained or contains an          untrue statement of a material fact or omitted
or omits to state a material fact necessary in          order to make the statements
therein, in the light of the circumstances under which they were          made, not
misleading. 

 
	 	
	 

EXHIBIT C 

Form of Opinion of CIT
Group Inc.’s Assistant General Counsel 

        1.
The Company is duly qualified or licensed and in good standing (or other comparable
status) as a foreign corporation in each jurisdiction where its business requires such
qualification or licensing, except where the failure to be so qualified, licensed or in
good standing (or to have such other comparable status) would not have a material adverse
effect on the business, operations, assets or financial condition of the Company. 

        2.
The Company and each of its subsidiaries listed on Schedule I hereto is validly existing
and in good standing as a corporation or other business entity under the laws of its
jurisdiction of incorporation or organization, has the corporate or other business entity
power to transact the business in which it is engaged, is duly qualified and in good
standing (or other comparable status) as a foreign corporation or other business entity
in each of the several states and jurisdictions where its business requires such
qualification and is duly licensed to carry on such business in each of the several
states and jurisdictions where its business requires such licensing and where the failure
to be so qualified or licensed would have a material adverse effect on the consolidated
financial position and results of operations of the Company. 

        3.
To my knowledge there are no legal or governmental proceedings required to be described
in the Registration Statement, Disclosure Package or the Final Prospectus which are not
described as required, or any contracts or documents of a character required to be
described in the Registration Statement, Disclosure Package or the Final Prospectus or to
be filed as exhibits thereto which are not described or filed as required. 

        4.
The authorized capitalization of the Company is as set forth in the Registration
Statement, Disclosure Package and the Final Prospectus, and the shares of issued and
outstanding capital stock set forth thereunder have been duly authorized and validly
issued and are fully paid and non-assessable. To my knowledge, none of the outstanding
shares of capital stock of the Company was issued in violation of the preemptive or other
similar rights of any securityholder of the Company. 

        5.
The Shares have been duly authorized and, when issued and delivered by the Company to the
purchasers thereof against consideration therefor in accordance with the terms of this
Agreement, will be validly issued, fully paid and non-assessable, and to my knowledge,
the issuance of such Shares will not be subject to any preemptive or similar rights of
any securityholder of the Company.exv4w2

 

Exhibit 4.2

UNDERWRITER’S WARRANT AGREEMENT

     Underwriter’s Warrant Agreement (the “Agreement”), dated as of November      , 2007,
between VirnetX Holding Corporation (the “Company”) and Gilford Securities Incorporated
(the “Underwriter”).

WITNESSETH:

     WHEREAS, the Underwriter has agreed, pursuant to the underwriting agreement dated as of
November      , 2007 (the “Underwriting Agreement”) between the Company and the Underwriter,
to act as the underwriter in connection with the Company’s proposed secondary public offering of up
to 3,000,000 shares of the Company’s common stock, $0.0001 par value per share (the “Common
Stock”), at $                     per share (the “Public Offering”); and

     WHEREAS, the Company proposes to issue to the Underwriter and/or member firms of the National
Association of Securities Dealers, Inc. (“NASD”) participating in the Public Offering and
the bona fide officers and partners thereof as permitted by Rule 2710(c)(7)(A) and (B) (the
“Rule”) of the NASD Conduct Rules (each, a “Holder,” and collectively, the
“Holders”), warrants (“Warrants”) to purchase up to 300,000 shares of Common Stock
(the “Shares”); and

     WHEREAS, the Warrants to be issued pursuant to this Agreement will be issued on the Closing
Date (as such term is defined in the Underwriting Agreement) by the Company to the Holders in
consideration for, and as part of the compensation in connection with, the Underwriter acting as
underwriter pursuant to the Underwriting Agreement.

     NOW, THEREFORE, in consideration of the premises, the payment to the Company of $.0001 per
Warrant, the agreements set forth herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

1. Grant and Period.

     (a) The above recitals are true and correct. The Public Offering has been registered under a
Registration Statement on Form SB-2 (File No. 333-145765) and declared effective by the Securities
and Exchange Commission (the “Commission”) on November      , 2007 (the “Effective
Date”). This Agreement, relating to the purchase of the Warrants, is entered into pursuant to
the Underwriting Agreement between the Company and the Underwriter in connection with the Public
Offering.

     (b) Pursuant to the Warrants, the Holders are hereby granted the right to purchase from the
Company, at any time during the period commencing after the one year anniversary of the
effectiveness of the Offering and expiring five years after the effectiveness of the Offering (the
“Expiration Time”), up to a number of shares of Common Stock of the Company equal to 10% of
the number of shares sold in the Public Offering (excluding the over-allotment option) at an
initial exercise price (subject to adjustment as provided in Section 7 hereof) of $                     per

 

 

share (120% of the per share price of the Common Stock in the Public Offering) (the “Exercise
Price” or “Purchase Price”), subject to the terms and conditions of this Agreement.

     (c) Except as specifically otherwise provided herein, the Shares shall bear the same terms and
conditions as such securities described under the caption “Description of Securities” in
the Registration Statement, and as designated in the Company’s Amended and Restated Certificate of
Incorporation and any amendments thereto, and the Holders shall have registration rights under the
Securities Act of 1933, as amended (the “Act”), for the Shares, as more fully described in
Section 6 of this Agreement.

2. Warrant Certificates. The warrant certificates (“Warrant Certificates”)
delivered and to be delivered pursuant to this Agreement shall be in the form set forth in the form
of Warrant Certificate, attached hereto and made a part hereof, with such appropriate insertions,
omissions, substitutions, and other variations as required or permitted by this Agreement.

3. Exercise of Warrant.

     3.1 Full Exercise.

          (a) The Holder may effect a cash exercise of the Warrants by surrendering to the Company the
Warrant Certificate, together with a Subscription in the form of Exhibit A attached
thereto, duly executed by such Holder, at any time prior to the Expiration Time, at the Company’s
principal office, accompanied by payment in cash or by certified or official bank check payable to
the order of the Company in the amount of the aggregate purchase price (the “Aggregate
Price”), subject to any adjustments provided for in this Agreement. The aggregate price
hereunder for each Holder shall be equal to the Exercise Price multiplied by the number of Shares
that are the subject of each Holder’s Warrant (as adjusted as hereinafter provided).

          (b) The Holder may effect a cashless exercise of the Warrants by delivering the Warrant
Certificate to the Company together with a Subscription in the form of Exhibit B attached
thereto, duly executed by such Holder, in which case no payment of cash will be required. Upon
such cashless exercise, the number of Shares to be purchased by each Holder shall be determined by
dividing: (i) the number obtained by multiplying the number of Shares that are the subject of each
Holder’s Warrant Certificate by the amount, if any, by which the then Market Value (as hereinafter
defined) exceeds the Purchase Price; by (ii) the then per share Market Value. In no event shall
the Company be obligated to issue any fractional securities and, at the time it causes a
certificate or certificates to be issued, it shall pay the Holder in lieu of any fractional
securities or shares to which such Holder would otherwise be entitled, by Company check, in an
amount equal to such fraction multiplied by the Market Value. The “Market Value” shall be
determined on a per Share basis as of the close of the business day preceding the date of exercise,
which determination shall be made as follows: (a) if the Common Stock is listed for trading on a
national or regional stock exchange or is included on the NASDAQ National Market or SmallCap
Market, the average closing sale price quoted on such exchange or the NASDAQ National Market or
SmallCap Market which is published in The Wall Street Journal for the 10 trading days immediately
preceding the date of exercise, or if no trade of the Common Stock shall have been reported during
such period, the last sale price so quoted for the next day prior thereto on which a trade in the
Common Stock was so reported; or (b) if the Common Stock is

2

 

not so listed, admitted to trading or included, the average of the closing highest reported
bid and lowest reported ask price as quoted on the OTC Bulletin Board or in the “Pink Sheets”
published by the National Daily Quotation Bureau for the first day immediately preceding the date
of exercise on which the Common Stock is traded.

     3.2 Partial Exercise. The Warrants may also be exercised from time to time in part by
surrendering the Warrant Certificate in the manner specified in Section 3.1 hereof, except that
with respect to a cash exercise, the Purchase Price payable shall be equal to the number of Shares
being purchased hereunder multiplied by the per Share Purchase Price, subject to any adjustments
provided for in this Agreement. Upon any such partial exercise, the Company, at its expense, will
forthwith issue to the Holder a new Warrant Certificate or Warrants of like tenor calling in the
aggregate for the number of securities (as constituted as of the date hereof) for which the Warrant
Certificate shall not have been exercised, issued in the name of the Holder or as such Holder (upon
payment by such Holder of any applicable transfer taxes) may direct.

4. Issuance of Certificates.

     (a) Upon the exercise of the Warrants, the issuance of certificates for shares of Common Stock
shall be made forthwith (and, in any event within three business days thereafter) without charge to
the Holder thereof including, without limitation, any tax which may be payable in respect of the
issuance thereof, and such certificates shall (subject to the provisions of Section 5 and Section 6
hereof) be issued in the name of, or in such names as may be directed by, the Holder thereof;
provided, however, that the Company shall not be required to pay any tax which may be payable in
respect of any transfer involved in the issuance and delivery of any such certificates in a name
other than that of the Holder and the Company shall not be required to issue or deliver such
certificates unless or until the person or persons requesting the issuance thereof shall have paid
to the Company the amount of such tax or shall have established to the satisfaction of the Company
that such tax has been paid.

     (b) The Warrant Certificates and the certificates representing the shares of Common Stock
shall be executed on behalf of the Company by manual or facsimile signature of the then present
Chairman or Vice Chairman of the Board of Directors or President or Vice President of the Company.
Warrant Certificates shall be dated the date of execution by the Company upon initial issuance,
division, exchange, substitution or transfer.

5. Restriction on Transfer of Warrants. The Holder of a Warrant Certificate, by acceptance
thereof, covenants and agrees that the Warrants may not be sold, transferred, assigned,
hypothecated or otherwise disposed of, in whole or in part, for a period of one year from the
effectiveness of the Offering, except (a) to a NASD member firm that participated in the Public
Offering and the bona fide officers or partners thereof, (b) by operation of law, or (c) by reason
of reorganization of the Company.

6. Registration Rights.

     6.1 Registration Under the Securities Act of 1933. The Warrants and the Shares
(collectively the “Registrable Securities”) have not been registered under the Securities
Act of 1933, as amended (the “Act”). Upon exercise, in part or in whole, of the Warrants,
certificates

3

 

representing the Shares shall bear the following legend in the event there is no current
registration statement effective with the Commission at such time as to such securities:

The securities represented by this certificate may not be offered or sold except pursuant to (i) an
effective registration statement under the Securities Act of 1933, as amended, (ii) to the extent
applicable, Rule 144 under the Securities Act (or any similar rule under the Securities Act
relating to the disposition of securities), or (iii) an opinion of counsel, if such opinion shall
be reasonably satisfactory to counsel to the issuer, that an exemption from registration under the
Securities Act and applicable state securities laws is available.

     6.2 Piggyback Registration.

     (a) If, at any time commencing on the first anniversary of the Closing Date and expiring seven
years after the Closing Date, the Company prepares and files a post-effective amendment to the
Registration Statement, or a new Registration Statement under the Act, or files a Notification on
Form 1-A or otherwise registers securities under the Act, or files a similar disclosure document
with the Commission (each such filing, a “Registration Document”) as to any of its
securities under the Act (other than under a Registration Statement pursuant to Form S-8 or Form
S-4), it will give written notice by registered mail, at least 20 days prior to the filing of such
Registration Document to the Underwriter and to all other Holders of the Registrable Securities of
its intention to do so. The Company shall include all Registrable Securities in such Registration
Documents with respect to which the Company has received written requests for inclusion therein
within 15 days of actual receipt of the Company’s notice.

     (b) No Holder of Registrable Securities may participate in any registration hereunder which is
underwritten unless such holder completes and executes all documents as are reasonable and
customary in such offerings.

     (c) The Company shall have the right at any time after it shall have given written notice
pursuant to this Section 6.2 (irrespective of whether a written request for inclusion of any
Registration Securities shall have been made) to elect not to file any such Registration Document,
or to withdraw the same after the filing but prior to the effective date thereof.

     6.3 Demand Registration.

          (a) Expenses to be Paid by the Company. At any time commencing one year after the
Closing Date until the Expiration Time, Holders of Registrable Securities representing more than
50% of such securities at that time outstanding (a “Majority of Holders”) shall have the
right (which right is in addition to the registration rights under Section 6.2 and Section 6.3(b)
hereof), exercisable by written notice to the Company, to have the Company prepare and file with
the Commission, on one occasion, a registration statement and/or such other documents, including a
prospectus, and/or any other appropriate disclosure document as may be reasonably necessary in the
opinion of both counsel for the Company and counsel for the Majority of Holders, in order to comply
with the provisions of the Act, so as to permit a public offering and sale of their respective
Registrable Securities for 12 consecutive months (or such longer period of time as permitted by the
Act) by such Majority of Holders and any other Holders of any of the Registrable Securities who
notify the Company within 20 days after receipt of notice by

4

 

registered or certified mail from the Company of such request (“Demand Registration”).
A Demand Registration shall not be counted as a Demand Registration hereunder until such Demand
Registration has been declared effective by the Commission and maintained continuously effective
for a period of at least 12 months or such shorter period when all Registrable Securities included
therein have been sold in accordance with such Demand Registration. The Company shall pay all
costs (excluding transfer taxes, if any, and the Holders’ pro-rata portions of the selling discount
or commissions), fees and expenses in connection with all registration statements filed pursuant to
Section 6.2 and this Section 6.3(a) including, without limitation, the Company’s legal and
accounting fees, printing expenses, blue sky fees and expenses and the fees and expenses of one
legal counsel to the Holders, so chosen by the Holders.

          (b) Expenses to be Paid by the Holder(s). At any time commencing one year after the
Closing Date until the Expiration Time, a Majority of Holders shall have the right (which right is
in addition to the registration rights under Sections 6.2 and Section 6.3(a) hereof), exercisable
by written notice to the Company, to one Demand Registration. A Demand Registration shall not be
counted as a Demand Registration hereunder until such Demand Registration has been declared
effective by the Commission and maintained continuously effective for a period of at least nine
months or such shorter period when all Registrable Securities included therein have been sold in
accordance with such Demand Registration. The Holder(s) will pay all costs, fees and expenses in
connection with any registration statement filed pursuant to Section this 6.3(b).

          (c) The Company covenants and agrees to give written notice by registered or certified mail of
any registration request under this Section 6.3 by the Majority of Holders to all other registered
Holders of any of the Registrable Securities within 10 days from the date of the receipt of any
such registration request.

          (d) Any written request by the Holders made pursuant to this Section 6.3 shall:

               (i) specify the number of Registrable Securities which the Holders intend to offer and sell
and the minimum price at which the Holders intend to offer and sell such securities;

               (ii) state the intention of the Holders to offer such securities for sale;

               (iii) describe the intended method of distribution of such securities; and

               (iv) contain an undertaking on the part of the Holders to provide all such information and
materials concerning the Holders and take all such action as may be reasonably required to permit
the Company to comply with all applicable requirements of the Commission and to obtain acceleration
of the effective date of the registration statement.

     6.4 Covenants of the Company with Respect to Registration. In connection with the
filing of any Registration Document by the Company, the Company covenants and agrees as follows:

5

 

          (a) The Company shall use its best efforts to file a registration statement within 45 days of
receipt of any Demand Registration pursuant to Section 6.3, and shall use its best efforts to have
any such registration statement declared effective at the earliest practicable time. The Company
will promptly notify each Holder of such Registrable Securities and confirm such advice in writing,
(i) when such registration statement becomes effective, (ii) when any post-effective amendment to
such registration statement becomes effective and (iii) of any request by the Commission for any
amendment or supplement to such registration statement or any prospectus relating thereto or for
additional information.

          (b) The Company shall furnish to each Holder of such Registrable Securities such number of
copies of such registration statement and of each such amendment and supplement thereto (in each
case including each preliminary prospectus and summary prospectus) in conformity with the
requirements of the Act, and such other documents as the Holders may reasonably request in order to
facilitate the disposition of the Registrable Securities by such Holders.

          (c) If the Company shall fail to comply with the provisions of Section 6.3(a), the Company
shall, in addition to any other equitable or other relief available to the Holder(s), be liable for
any or all special and consequential damages sustained by the Holder(s) requesting registration of
their Registrable Securities.

          (d) The Company shall prepare and file with the Commission such amendments and supplements to
such registration statement and the prospectus used in connection therewith as may be reasonably
necessary to keep such registration statement effective for at least 12 months (or such longer
period as permitted by the Act), and to comply with the provisions of the Act with respect to the
disposition of all securities covered by such registration statement during such period in
accordance with the intended methods of disposition by the Holder or Holders of Registrable
Securities set forth in such registration statement. If at any time the Commission should
institute or threaten to institute any proceedings for the purpose of issuing a stop order
suspending the effectiveness of any such registration statement, the Company will promptly notify
each Holder of Registrable Securities and will use all reasonable efforts to prevent the issuance
of any such stop order or to obtain the withdrawal thereof as soon as possible. The Company will
use its good faith reasonable efforts and take all reasonably necessary action which may be
required in qualifying or registering the Registrable Securities included in a registration
statement for offering and sale under the securities or blue sky laws of such states as reasonably
are required by the Holder(s), provided that the Company shall not be obligated to execute or file
any general consent to service of process or to qualify as a foreign corporation to do business
under the laws of any such jurisdiction. The Company shall use its good faith reasonable efforts
to cause such Registrable Securities covered by such registration statement to be registered with
or approved by such other governmental agencies or authorities of the United States or any State
thereof as may be reasonably necessary to enable the Holder(s) thereof to consummate the
disposition of such Registrable Securities.

          (e) The Company shall indemnify the Holder(s) of the Registrable Securities to be sold
pursuant to any registration statement and each person, if any, who controls such Holders within
the meaning of Section 15 of the Act or Section 20(a) of the Securities Exchange Act of 1934, as
amended (the “Exchange Act”), against all loss, claim, damage, expense or

6

 

liability (including all expenses reasonably incurred in investigating, preparing or defending
against any claim whatsoever) to which any of them may become subject under the Act, the Exchange
Act or otherwise, arising from such registration statement but only to the same extent and with the
same effect as the provisions pursuant to which the Company has agreed to indemnify the Underwriter
as contained in the Underwriting Agreement.

          (f) If requested by the Company prior to the filing of any registration statement covering the
Registrable Securities, each of the Holder(s) of the Registrable Securities to be sold pursuant to
a registration statement, and their successors and assigns, shall severally, and not jointly,
indemnify the Company, its officers and directors and each person, if any, who controls the Company
within the meaning of Section 15 of the Act or Section 20(a) of the Exchange Act, against all loss,
claim, damage or expense or liability (including all expenses reasonably incurred in investigating,
preparing or defending against any claim whatsoever) to which they may become subject under the
Act, the Exchange Act or otherwise, arising from written information furnished by such Holder, or
their successors or assigns, for specific inclusion in such registration statement to the same
extent and with the same effect as the provisions contained in the Underwriting Agreement pursuant
to which the Underwriters have agreed to indemnify the Company, except that the maximum amount
which may be recovered from each Holder pursuant to this paragraph or otherwise shall be limited to
the amount of net proceeds received by the Holder from the sale of the Registrable Securities.

          (g) Nothing contained in this Agreement shall be construed as requiring the Holder(s) to
exercise their Warrants prior to the filing of any registration statement or the effectiveness
thereof.

          (h) The Company shall not permit the inclusion of any securities other than the Registrable
Securities to be included in any registration statement filed pursuant to Section 6.3 hereof
without the prior written consent of the Majority of Holders which consent will not be unreasonably
withheld or delayed.

          (i) The Company shall furnish to each Holder participating in an offering and to the managing
underwriter, if any, a signed counterpart, addressed to such Holder or underwriter, of (i) an
opinion of counsel to the Company, dated the effective date of such registration statement (and, if
such registration includes an underwritten public offering, an opinion dated the date of the
closing under the underwriting agreement), and (ii) a “Cold Comfort” letter dated the effective
date of such registration statement (and, if such registration includes an underwritten public
offering, a letter dated the date of the closing under the underwriting agreement) signed by the
independent public accountants who have issued a report on the Company’s financial statements
included in such registration statement, in each case covering substantially the same matters with
respect to such registration statement (and the prospectus included therein) and, in the case of
such accountants’ letter, with respect to events subsequent to the date of such financial
statements, as are customarily covered in opinions of issuer’s counsel and in accountants’ letters
delivered to underwriters in underwritten public offerings of securities.

          (j) The Company shall deliver promptly to each Holder participating in an offering and to the
managing underwriter, if any, copies of all correspondence between the

7

 

Commission and the Company, its counsel or auditors and all non-privileged memoranda relating to
discussions with the Commission or its staff with respect to the registration statement and permit
each Holder and underwriter to do such investigation, upon reasonable advance notice, with respect
to information contained in or omitted from the registration statement as it deems reasonably
necessary to comply with applicable securities laws or rules of NASD. Such investigation shall
include access to books, records and properties and opportunities to discuss the business of the
Company with its officers and independent auditors, all to such reasonable extent and at such
reasonable times and as often as any such Holder shall reasonably request.

          (k) With respect to a registration statement filed pursuant to Section 6.3, the Company, if
requested, shall enter into an underwriting agreement with the managing underwriter, reasonably
satisfactory to the Company, selected for such underwriting by a Majority of Holders requested to
be included in such underwriting. Such agreement shall be satisfactory in form and substance to
the Company, each Holder and such managing underwriter, and shall contain such representations,
warranties and covenants by the Company and such other terms as are customarily contained in
agreements of that type used by the managing underwriter. The Holders, if required by the
underwriter to be parties to any underwriting agreement relating to an underwritten sale of their
Registrable Securities, may, at their option, require that any or all the representations,
warranties and covenants of the Company to or for the benefit of such underwriters shall also be
made to and for the benefit of such Holders. Such Holders shall not be required to make any
representations or warranties to or agreements with the Company or the underwriters except as they
may relate to such Holders and their intended methods of distribution.

          (l) Notwithstanding the provisions of Section 6.2 or Section 6.3 of this Agreement, the
Company shall not be required to effect or cause the registration of Registrable Securities
pursuant to Section 6.2 or Section 6.3 hereof if, within 30 days after its receipt of a request to
register such Registrable Securities (i) counsel for the Company delivers an opinion to the Holders
and to the Company’s transfer agent requesting registration of such Registrable Securities, in form
and substance satisfactory to counsel to such Holder(s), to the effect that the entire number of
Registrable Securities proposed to be sold by such Holder(s) may otherwise be sold, in the manner
proposed by such Holder(s), without registration under the Securities Act, or (ii) the Commission
shall have issued a no-action position, in form and substance satisfactory to counsel for the
Holder(s) requesting registration of such Registrable Securities, to the effect that the entire
number of Registrable Securities proposed to be sold by such Holder(s) may be sold by it, in the
manner proposed by such Holder(s), without registration under the Securities Act; provided,
however, if the Company’s transfer agent does not permit the sale of the Registrable Securities
upon request or for any other reason such sale is delayed, the Company shall thereafter immediately
notify such Holders that it will register the Registrable Securities for sale under the Act and
cause such Registrable Securities to be so registered.

          (m) After completion of the Public Offering, the Company shall not, directly or indirectly,
enter into any merger, business combination or consolidation in which (i) the Company shall not be
the surviving corporation and (ii) the shareholders of the Company are to receive, in whole or in
part, capital stock or other securities of the surviving corporation, unless the surviving
corporation shall, prior to such merger, business combination or consolidation, agree in writing to
assume the obligations of the Company under this Agreement, and for that

8

 

purpose references hereunder to “Registrable Securities” shall be deemed to include the
securities which the Holders would be entitled to receive in exchange for Registrable Securities
under any such merger, business combination or consolidation, provided that to the extent such
securities to be received are convertible into shares of Common Stock of the issuer thereof, then
any such shares of Common Stock as are issued or issuable upon conversion of said convertible
securities shall also be included within the definition of “Registrable Securities.”

7. Adjustments to Exercise Price and Number of Securities.

     7.1 Adjustment for Dividends, Subdivisions, Combinations or Reclassifications.

          (a) In case the Company shall (i) pay a dividend or make a distribution in shares of its
capital stock (whether shares of Common Stock or of capital stock of any other class), (ii)
subdivide its outstanding shares of Common Stock into a greater number of shares, (iii) combine its
outstanding shares of Common Stock into a smaller number of shares, or (iv) issue by
reclassification of its shares of Common Stock any shares of capital stock of the Company; then,
and in each such case, the per Share Exercise Price and the number of Shares in effect immediately
prior to such action shall be adjusted so that the Holder of this Warrant thereafter upon the
exercise hereof shall be entitled to receive the number and kind of shares of the Company which
such Holder would have owned immediately following such action had this Warrant been exercised
immediately prior thereto. An adjustment made pursuant to this Section 7.1 shall become effective
immediately after the record date in the case of a dividend or distribution and shall become
effective immediately after the effective date in the case of a subdivision, combination or
reclassification. If, as a result of an adjustment made pursuant to this section, the Holder of
this Warrant shall become entitled to receive shares of two or more classes of capital stock of the
Company, the Board of Directors of the Company (whose determination shall be conclusive) shall
determine the allocation of the adjusted Exercise Price between or among shares of such class of
capital stock.

          (b) Immediately upon any adjustment of the Exercise Price pursuant to this section, the
Company shall send written notice thereof to the Holder of Warrant Certificates (by first class
mail, postage prepaid), which notice shall state the Exercise Price resulting from such adjustment,
and any increase or decrease in the number of Shares to be acquired upon exercise of the Warrants,
setting forth in reasonable detail the method of calculation and the facts upon which such
calculation is based.

     7.2 Adjustment for Reorganization, Merger or Consolidation. In case of any
reorganization of the Company or consolidation of the Company with, or merger of the Company with,
or merger of the Company into, another corporation (other than a consolidation or merger which does
not result in any reclassification or change of the outstanding Common Stock), the corporation
formed by such consolidation or merger shall execute and deliver to the Holder a supplemental
Warrant Agreement providing that the Holder of each Warrant then outstanding or to be outstanding
shall have the right thereafter (until the expiration of such Warrant) to receive, upon exercise of
such warrant, the kind and amount of shares of stock and other securities and property receivable
upon such consolidation or merger, by a holder of the number of shares of Common Stock of the
Company for which such warrant might have been exercised immediately prior to such reorganization,
consolidation, merger, conveyance, sale or

9

 

transfer. Such supplemental Warrant Agreement shall provide for adjustments which shall be
identical to the adjustments provided in this Section 7 and such registration rights and other
rights as provided in this Agreement. The Company shall not effect any such consolidation, merger,
or similar transaction as contemplated by this paragraph, unless prior to or simultaneously with
the consummation thereof, the successor corporation (if other than the Company) resulting from such
consolidation or merger or the corporation purchasing, receiving, or leasing such assets or other
appropriate corporation or entity shall assume, by written instrument executed and delivered to the
Holders, the obligation to deliver to the Holders, such shares of stock, securities, or assets as,
in accordance with the foregoing provisions, such holders may be entitled to purchase, and to
perform the other obligations of the Company under this Agreement. The above provision of this
Section 7.2 shall similarly apply to successive consolidations or successively whenever any event
listed above shall occur.

     7.3 Dividends and Other Distributions. In the event that the Company shall at any
time prior to the exercise of all of the Warrants distribute to its shareholders any assets,
property, rights, evidences of indebtedness, securities (other than a distribution made as a cash
dividend payable out of earnings or out of any earned surplus legally available for dividends under
the laws of the jurisdictions of incorporation of the Company), whether issued by the Company or by
another, the Holders of the unexercised Warrants shall thereafter be entitled, in addition to the
shares of Common Stock or other securities and property receivable upon the exercise thereof, to
receive, upon the exercise of such Warrants, the same property, assets, rights, evidences of
indebtedness, securities or any other thing of value that they would have been entitled to receive
at the time of such distribution as if the Warrants had been exercised immediately prior to such
distribution. At the time of any such distribution, the Company shall make appropriate reserves to
ensure the timely performance of the provisions of this subsection or an adjustment to the Exercise
Price, which shall be effective as of the day following the record date for such distribution.

     7.4 Adjustment in Number of Securities. Upon each adjustment of the Exercise Price
pursuant to the provisions of this Section 7, the number of securities issuable upon the exercise
of each Warrant shall be adjusted to the nearest full amount by multiplying a number equal to the
Exercise Price in effect immediately prior to such adjustment by the number of securities issuable
upon exercise of the Warrants immediately prior to such adjustment and dividing the product so
obtained by the adjusted Exercise Price.

     7.5 No Adjustment of Exercise Price in Certain Cases. No adjustment of the Exercise
Price shall be made if the amount of said adjustment shall be less than $.01 per Share; provided,
however, that in such case any adjustment that would otherwise be required then to be made shall be
carried forward and shall be made at the time of and together with the next subsequent adjustment
which, together with any adjustment so carried forward, shall amount to at least $.01 per Share.

     7.6 Accountant’s Certificate of Adjustment. In each case of an adjustment or
readjustment of the Exercise Price or the number of any securities issuable upon exercise of the
Warrants, the Company, at its expense, shall cause independent certified public accountants of
recognized standing selected by the Company (who may be the independent certified public
accountants then auditing the books of the Company) to compute such adjustment or

10

 

readjustment in accordance herewith and prepare a certificate showing such adjustment or
readjustment, and shall mail such certificate, by first class mail, postage prepaid, to any Holder
of the Warrants at the Holders’ address as shown on the Company’s books. The certificate shall set
forth such adjustment or readjustment, showing in detail the facts upon which such adjustment or
readjustment is based including, but not limited to, a statement of (i) the Exercise Price at the
time in effect, and (ii) the number of additional or fewer securities and the type and amount, if
any, of other property which at the time would be receivable upon exercise of the Warrants.

8. Exchange and Replacement of Warrant Certificates.

     (a) Each Warrant Certificate is exchangeable without expense, upon the surrender thereof by
the registered Holder at the principal executive office of the Company, for a new Warrant
Certificate of like tenor and date representing in the aggregate the right to purchase the same
number of securities in such denominations as shall be designated by the Holder thereof at the time
of such surrender.

     (b) Upon receipt by the Company of evidence reasonably satisfactory to it of the loss, theft,
destruction or mutilation of any Warrant Certificate, and, in case of loss, theft or destruction,
of indemnity or security reasonably satisfactory to it, and reimbursement to the Company of all
reasonable expenses incidental thereto, and upon surrender and cancellation of the Warrants, if
mutilated, the Company will make and deliver a new Warrant Certificate of like tenor, in lieu
thereof.

9. Elimination of Fractional Interest. The Company shall not be required to issue
certificates representing fractions of shares of Common Stock upon the exercise of the Warrants,
nor shall it be required to issue script or pay cash in lieu of fractional interests, it being the
intent of the parties that all fractional interests may be eliminated, at the Company’s option, by
rounding any fraction up to the nearest whole number of shares of Common Stock or other securities,
properties or rights, or in lieu thereof paying cash equal to such fractional interest multiplied
by the Market Value of a share of Common Stock.

10. Reservation, Validity and Listing. The Company covenants and agrees that during the
exercise period, the Company shall at all times reserve and keep available out of its authorized
shares of Common Stock, solely for the purpose of issuance upon the exercise of the Warrants, such
number of shares of Common Stock or other securities, properties or rights as shall be issuable
upon the exercise under this Warrant Certificate. The Company covenants and agrees that, upon
exercise of the Warrants, and payment of the Exercise Price therefor, all shares of Common Stock
and other securities issuable upon such exercise shall be duly authorized, validly issued, fully
paid, non-assessable and not subject to the preemptive rights of any shareholder. As long as the
Warrants shall be outstanding, the Company shall use its best efforts to cause all shares of Common
Stock issuable upon the exercise of the Warrants to be listed and quoted (subject to official
notice of issuance) on all securities exchanges and systems on which the Common Stock are then
listed and/or quoted, including Nasdaq and the American Stock Exchange.

11

 

11. Notices to Warrant Holders. Nothing contained in this Agreement shall be construed as
conferring upon the Holders of the Warrants the right to vote or to consent or to receive notice as
a shareholder in respect of any meetings of shareholders for the election of directors or any other
matter, or as having any rights whatsoever as a shareholder of the Company. If, however, at any
time prior to the expiration of the Warrants and their exercise, any of the following events shall
occur:

          (a) the Company shall take a record of the holders of its shares of Common Stock for the
purpose of entitling them to receive a dividend or distribution payable otherwise than in cash, or
a cash dividend or distribution payable otherwise than out of current or retained earnings, as
indicated by the accounting treatment of such dividend or distribution on the books of the Company;
or

          (b) the Company shall offer to all the holders of its Common Stock any additional shares of
capital stock of the Company or securities convertible into or exchangeable for shares of capital
stock of the Company, or any option, right or warrant to subscribe therefor; or

          (c) a dissolution, liquidation or winding up of the Company (other than in connection with a
consolidation or merger) or a sale of all or substantially all of its property, assets and business
as an entirety shall be proposed;

then, in any one or more of said events, the Company shall give written notice of such event at
least 15 days prior to the date fixed as a record date of the date of closing the transfer books
for the determination of the shareholders entitled to such dividend, distribution, convertible or
exchangeable securities or subscription rights, or entitled to vote on such proposed dissolution,
liquidation, winding up or sale. Such notices shall specify such record date or the date of
closing the transfer books, as the case may be.

12. Notices. All notices, requests, consents and other communications hereunder shall be
in writing and shall be deemed to have been duly given when sent by (i) facsimile; or
(ii) delivered personally or by overnight courier or mailed by registered or certified mail, return
receipt requested:

          (a) If to the registered Holder of any of the Registrable Securities, to the address of such
Holder as shown on the books of the Company.

With a copy to:

Adam J. Agron, Esq.

Brownstein Hyatt Farber Schreck, P.C.

410 Seventeenth Street, Suite 2200

Denver, CO 80202-4437

Fax: (303) 223-1111

          (b) If to the Company, to the address set forth below or to such other address as the Company
may designate by notice to the Holders.

12

 

Kendall Larsen

Chief Executive Officer

VirnetX Holding Corporation

5615 Scotts Valley Drive, Suite 110

Scotts Valley, CA 95066

Fax: (831) 438-3078

With a copy to:

Lowell D. Ness, Esq.

Orrick, Herrington & Sutcliffe LLP

1000 Marsh Road

Menlo Park, CA 94025

Fax: (650) 614-7401

13. Entire Agreement: Modification. This Agreement (and the Underwriting Agreement to the
extent applicable) contains the entire understanding between the parties hereto with respect to the
subject matter hereof, and the terms and provisions of this Agreement may not be modified, waived
or amended except in a writing executed by the Company and a Majority of Holders. Notice of any
modification, waiver or amendment shall be promptly provided to any Holder not consenting to such
modification, waiver or amendment.

14. Successors. All the covenants and provisions of this Agreement shall be binding upon
and inure to the benefit of the Company, the Holders and their respective successors and assigns
hereunder.

15. Termination. This Agreement shall terminate at the earlier of (i) the public sale of
all of the Registrable Securities, or (ii) at the close of business on [November ___, 2012].
Notwithstanding the foregoing, the indemnification provisions of Section 6 shall survive such
termination.

16. Governing Law; Submission to Jurisdiction. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of New York without regard to the
conflicts of laws principles thereof. The parties hereto hereby irrevocably agree that any suit or
proceeding arising directly and/or indirectly pursuant to or under this Agreement, shall be brought
solely in a federal or state court located in the City, County and State of New York. By its
execution hereof, the parties hereby covenant and irrevocably submit to the in personam
jurisdiction of the federal and state courts located in the City, County and State of New York and
agree that any process in any such action may be served upon any of them personally, or by
certified mail or registered mail upon them or their agent, return receipt requested, with the same
full force and effect as if personally served upon them in New York City. The parties hereto waive
any claim that any such jurisdiction is not a convenient forum for any such suit or proceeding and
any defense or lack of in personam jurisdiction with respect thereto. In the event of any such
action or proceeding, the party prevailing therein shall be entitled to payment from the other
party hereto of its reasonable counsel fees and disbursements in an amount judicially determined.

13

 

17. Severability. If any provision of this Agreement shall be held to be invalid or
unenforceable, such invalidity or unenforceability shall not affect any other provision of this
Agreement.

18. Captions. The caption headings of the sections of this Agreement are for convenience
of reference only and are not intended, nor should they be construed as, a part of this Agreement
and shall be given no substantive effect.

19. Benefits of This Agreement. Nothing in this Agreement shall be construed to give to
any person or corporation other than the Company and the Underwriter and any other registered
Holder(s) of the Warrant Certificates or Registrable Securities any legal or equitable right,
remedy or claim under this Agreement; and this Agreement shall be for the sole and exclusive
benefit of the Company and the Underwriters and any other Holder(s) of the Warrant Certificates or
Registrable Securities.

20. Counterparts. This Agreement may be executed in any number of counterparts and each of
such counterparts shall for all purposes be deemed to be an original, and such counterparts shall
together constitute but one and the same instrument.

[Remainder of This Page Intentionally Left Blank; Signature Page to Follow]

14

 

     IN WITNESS HEREOF, the parties hereto have caused this Agreement to be duly executed, as of
the day and year first above written.

	 	 	 	 	 
	 	VIRNETX HOLDING CORPORATION

 	 
	 	By:  	 	 
	 	 	Kendall Larsen 	 
	 	 	Chief Executive Officer 	 
	 
	 	GILFORD SECURITIES INCORPORATED

 	 
	 	By:  	 	 
	 	 	Robert A. Maley 	 
	 	 	President 	 
	 

15

 

VIRNETX HOLDING CORPORATION

WARRANT CERTIFICATE

     THE WARRANTS REPRESENTED BY THIS CERTIFICATE AND THE OTHER SECURITIES ISSUABLE UPON EXERCISE
THEREOF MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO (i) AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, (ii) TO THE EXTENT APPLICABLE, RULE 144 UNDER SUCH ACT (OR
ANY SIMILAR RULE UNDER SUCH ACT RELATING TO THE DISPOSITION OF SECURITIES), OR (iii) AN OPINION OF
COUNSEL, IF SUCH OPINION SHALL BE REASONABLY SATISFACTORY TO COUNSEL FOR THE ISSUER, THAT AN
EXEMPTION FROM REGISTRATION UNDER SUCH ACT IS AVAILABLE.

     THE TRANSFER OR EXCHANGE OF THE WARRANTS REPRESENTED BY THIS CERTIFICATE IS RESTRICTED IN
ACCORDANCE WITH THE WARRANT AGREEMENT REFERRED TO HEREIN.

EXERCISABLE ON OR BEFORE

5:30 P.M. EASTERN TIME ON [NOVEMBER      , 2012]

NO. W-                                          Warrants

     This Warrant Certificate (“Warrant Certificate”) certifies that Gilford Securities
Incorporated, or its assigns, is the registered holder (“Holder”) of Warrants (as defined
in the Warrant Agreement between the Company and Holder dated as of [November      , 2007] (the
“Warrant Agreement”)) of VirnetX Holding Corporation (the “Company”). Each Warrant
permits Holder to purchase, at any time from [November      , 2008] (“Purchase Date”) until
5:30 p.m. Eastern Time on [November      , 2012] (the “Expiration Time”), one share of the
Company’s Common Stock (the “Shares”) at the initial exercise price, subject to adjustment
in certain events, of $      per share (120% of the public offering price) (the “Exercise
Price”).

     No Warrant may be exercised after the Expiration Time, at which time all Warrants evidenced
hereby, unless exercised prior thereto, shall thereafter be void.

     The Warrants evidenced by this Warrant Certificate are part of a duly authorized issue of
Warrants issued pursuant to the Warrant Agreement. Capitalized terms used but not otherwise
defined herein shall have the meanings assigned to such terms in the Warrant Agreement.

     The Warrant Agreement provides that upon the occurrence of certain events, the Exercise Price
and the type or number of the Company’s securities issuable thereupon may be adjusted.

     Upon the exercise of less than all of the Warrants evidenced by this Certificate, the Company
shall forthwith issue to Holder a new Warrant Certificate representing such number of unexercised
Warrants.

     The Company may deem and treat Holder as the absolute owner of this Warrant Certificate
(notwithstanding any notation of ownership or other writing hereon made by anyone)

 

 

for the purpose of any exercise hereof, and of any distribution to Holder, and for all other
purposes, and the Company shall not be affected by any notice to the contrary.

[Remainder of This Page Intentionally Left Blank; Signature Page to Follow]

2

 

     IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to be duly executed.

     Dated as of [November      , 2007]

	 	 	 	 	 
	 	VIRNETX HOLDING CORPORATION

 	 
	 	By:  	 	 
	 	 	Kendall Larsen 	 
	 	 	Chief Executive Officer 	 
	 

 

 

EXHIBIT A

FORM OF SUBSCRIPTION (CASH EXERCISE)

(To be signed only upon exercise of Warrant)

	 	 	 
	TO:

	 	VirnetX Holding Corporation
	 

	 	5615 Scotts Valley Drive, Suite 110
	 

	 	Scotts Valley, CA 95066

     The undersigned holder of Warrant Certificate number                      (the “Warrant
Certificate”), representing                      Warrants (as defined in the Warrant Certificate) of
VirnetX Holding Corporation (the “Company”), which Warrant Certificate is being delivered
herewith, hereby irrevocably elects to purchase                      Shares (as defined in the Warrant
Certificate), and herewith makes payment of $                     therefore, all in accordance with the
Warrant Certificate and the Warrant Agreement referred to in the Warrant Certificate. Certificates
for the Shares shall be issued in the name of                                          and delivered to the following
address:

	 	 	 	 	 
	 

	 	 

	 	 
	 
	 	 	 	 
	 

	 	 

	 	 
	 
	 	 	 	 
	 

	 	 

	 	 

       

By:                                                             

Name:                                                             

Social Security Number or Tax Identification Number:                                         

Date:                                                             

     (Signature must conform in all respects to name of Holder as specified on the face of the
Warrant Certificate)

Address

Social Security Number or

Tax Identification Number

 

 

EXHIBIT B

FORM OF SUBSCRIPTION (CASHLESS EXERCISE)

	 	 	 
	TO:

	 	VirnetX Holding Corporation
	 

	 	5615 Scotts Valley Drive, Suite 110
	 

	 	Scotts Valley, CA 95066

     The undersigned holder of Warrant Certificate number                      (the “Warrant
Certificate”), representing                      Warrants (as defined in the Warrant Certificate) of
VirnetX Holding Corporation (the “Company”), which Warrant Certificate is being delivered
herewith, hereby irrevocably elects to purchase (on a cashless exercise basis in accordance with
the formula set forth in Section 3.1(b) of the Warrant Agreement referred to in the Warrant
Certificate (the “Warrant Agreement”))                      Shares (as defined in the Warrant
Certificate), all in accordance with the Warrant Certificate and the Warrant Agreement.
Certificates for the Shares shall be issued in the name of                                          and delivered to the
following address:

	 	 	 	 	 
	 

	 	 

	 	 
	 
	 	 	 	 
	 

	 	 

	 	 
	 
	 	 	 	 
	 

	 	 

	 	 

       

By:                                                             

Name:                                                             

Social Security Number or Tax Identification Number:                                         

Date:                                                             

     (Signature must conform in all respects to name of Holder as specified on the face of the
Warrant Certificate)

Address

Social Security Number or

Tax Identification Number

 

 

FORM OF ASSIGNMENT

     (To be exercised by the registered holder if such Holder desires to transfer the Warrant
Certificate)

     FOR VALUE RECEIVED                                                             
                     hereby sells, assigns and
transfers unto:

Print Name of Transferee

Address

City State Zip Code

this Warrant Certificate, together with all right, title and interest therein, and does hereby
irrevocably constitute and appoint                                                              Attorney, to transfer the within
Warrant Certificate on the books of the within-named Company, with full power of substitution.

	 	 	 	 	 
	Dated:                                        

	 	 	 	Signature:
	 
	 	 	 	 
	 

	 	 	 	 
	 

	 	 	 	(Signature must conform in all respects to name of Holder as specified on the face of the Warrant
Certificate)

Social Security Number or Other Identifying Number of Assignee

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00131-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00131-of-00352.parquet"}]]