Document:

exv10w68

 

EXHIBIT
10.68

SECURITIES PURCHASE AGREEMENT

     This Securities Purchase Agreement (this “Agreement”) is dated as of August 23, 2007,
among Syntax-Brillian Corporation, a Delaware corporation (the “Company”), and each
purchaser identified on the signature pages hereto (each, including its successors and assigns, a
“Purchaser” and collectively the “Purchasers”).

     WHEREAS, subject to the terms and conditions set forth in this Agreement and pursuant to
Section 4(2) of the Securities Act of 1933, as amended (the “Securities Act”), and Rule 506
promulgated thereunder, the Company desires to issue and sell to each Purchaser, and each
Purchaser, severally and not jointly, desires to purchase from the Company, securities of the
Company as more fully described in this Agreement.

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

ARTICLE I.

DEFINITIONS

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

     “Acknowledgement of Receipt” means the Acknowledgement of Receipt in the form
of Exhibit B attached hereto.

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

     “Affiliate” means any Person that, directly or indirectly through one or more
intermediaries, controls or is controlled by, or is under common control with, a Person as such
terms are used in and construed under Rule 144 under the Securities Act. With respect to a
Purchaser, any investment fund or managed account that is managed on a discretionary basis by the
same investment manager as such Purchaser will be deemed to be an Affiliate of such Purchaser.

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

     “Closing Date” means the Trading Day when all of the Transaction Documents have been
executed and delivered by the applicable parties thereto, and all conditions precedent to (a) the
Purchasers’ obligations to pay the Subscription Amount and (b) the Company’s obligations to deliver
the Shares have been satisfied or waived.

     “Closing Price” means on any particular date (a) the last reported closing bid price
per share of Common Stock on such date on the Trading Market (as reported by Bloomberg L.P. at 4:15
PM (New York time)), or (b) if there is no such price on such date, then the closing bid price on
the Trading Market on the date nearest preceding such date (as reported by Bloomberg
L.P. at 4:15 PM (New York time)), or (c) if the Common Stock is not then listed or quoted on

 

 

the Trading Market and if prices for the Common Stock are then reported in the “pink sheets”
published by Pink Sheets, LLC (or a similar organization or agency succeeding to its functions of
reporting prices), the most recent bid price per share of the Common Stock so reported, or (d) if
the shares of Common Stock are not then publicly traded, the fair market value of a share of Common
Stock as determined by an appraiser selected in good faith by the Purchasers of a majority in
interest of the Shares then outstanding.

     “Commission” means the Securities and Exchange Commission.

     “Common Stock” means the common stock of the Company, par value $0.001 per share, and
any other class of securities into which such securities may hereafter have been reclassified or
changed into.

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

     “Company Counsel” means Greenberg Traurig, LLP.

     “Disclosure Schedules” means the Disclosure Schedules of the Company delivered
concurrently herewith.

     “Discussion Time” shall have the meaning ascribed to such term in Section 3.2(f).

     “Effective Date” means the date that the initial Registration Statement filed by the
Company pursuant to the Registration Rights Agreement is first declared effective by the
Commission.

     “Evaluation Date” shall have the meaning ascribed to such term in Section 3.1(q).

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

     “GAAP” shall have the meaning ascribed to such term in Section 3.1(h).

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

     “Legend Removal Date” shall have the meaning ascribed to such term in Section 4.1(c).

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

     “Material Adverse Effect” means any adverse effect on the business, results of
operations, properties, prospects, or financial condition of the Company and its Subsidiaries,
taken as a whole, and which is material to the Company and its Subsidiaries, or which is
likely to

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materially effect the Company’s obligations to perform under this Agreement and the other
Transaction Documents.

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

     “Per Share Purchase Price” equals $6.4852 subject to adjustment for reverse and
forward stock splits, stock dividends, stock combinations or other similar transactions of the
Common Stock that occur after the date of this Agreement.

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

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

     “Purchaser Party” shall have the meaning ascribed to such term in Section 4.8.

     “Registration Rights Agreement” means the Registration Rights Agreement, dated the
date hereof, among the Company and the Purchasers, in the form of Exhibit A attached
hereto.

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

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

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

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

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

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

     “Short Sales” shall include all “short sales” as defined in Rule 200 of Regulation SHO
under the Exchange Act (but shall not be deemed to include the location and/or reservation of
borrowable shares of Common Stock).

     “Subscription Amount” means, as to each Purchaser, the aggregate amount to be paid for
Shares purchased hereunder as specified below such Purchaser’s name on the signature page of this
Agreement and next to the heading “Subscription Amount,” in United States Dollars and in
immediately available funds.

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     “Subsidiary” means any subsidiary of the Company.

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

     “Trading Market” means the following markets or exchanges on which the Common Stock is
listed or quoted for trading on the date in question: the Nasdaq Capital Market, the American Stock
Exchange, the New York Stock Exchange, the Nasdaq Global Market, the Nasdaq Global Select Market,
or the OTC Bulletin Board.

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

ARTICLE II.

PURCHASE AND SALE

     2.1 Closing. On the Closing Date, upon the terms and subject to the conditions set forth
herein, concurrent with the execution and delivery of this Agreement by the parties, the Company
agrees to sell, and each Purchaser agrees to purchase in the aggregate, severally and not jointly,
up to 3,083,945 Shares. Each Purchaser shall deliver to the Company via wire transfer or a
certified check immediately available funds equal to their Subscription Amount and the Company
shall deliver to each Purchaser their respective Shares as determined pursuant to Section 2.2(a)
and the other items set forth in Section 2.2 issuable at the Closing. Upon satisfaction of the
conditions set forth in Sections 2.2 and 2.3, the Closing shall occur at the offices of Company
Counsel, or such other location as the parties shall mutually agree.

     2.2 Deliveries.

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

               (i) this Agreement duly executed by the Company;

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

               (iii) the Acknowledgement of Receipts duly executed by the Company with respect to each
Purchaser; and

               (iv) the Registration Rights Agreement duly executed by the Company.

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

               (i) this Agreement duly executed by such Purchaser;

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               (ii) such Purchaser’s Subscription Amount by wire transfer to the account as specified below
by the Company; and

	 	 	 	 	 
	 

	 	Bank:
	 	Preferred Bank
	 

	 	 	 	1373 S Diamond Bar Blvd
	 

	 	 	 	Diamond Bar, CA 91765
	 

	 	Beneficiary:
	 	Syntax-Brillian Corporation
	 

	 	 	 	Account #: 8603688
	 

	 	 	 	Routing #: 122042205
	 

	 	 	 	Swift Code: PRFRUS6L

               (iii) the Registration Rights Agreement and Annex A to the Registration Rights Agreement duly
executed by such Purchaser.

     2.3 Closing Conditions.

          (a) The obligations of the Company hereunder in connection with the Closing are subject to the
following conditions being met:

               (i) the accuracy in all material respects when made and on the Closing Date of the
representations and warranties of the Purchasers contained herein;

               (ii) all obligations, covenants, and agreements of the Purchasers required to be performed at
or prior to the Closing Date shall have been performed; and

               (iii) the delivery by the Purchasers of the items set forth in Section 2.2(b) of this
Agreement.

          (b) The respective obligations of the Purchasers hereunder in connection with the Closing are
subject to the following conditions being met:

               (i) the accuracy in all material respects on the Closing Date of the representations and
warranties of the Company contained herein;

               (ii) all obligations, covenants, and agreements of the Company required to be performed at or
prior to the Closing Date shall have been performed;

               (iii) the delivery by the Company of the items set forth in Section 2.2(a) of this Agreement;
and

               (iv) there shall have been no Material Adverse Effect with respect to the Company since the
date hereof.

ARTICLE III.

REPRESENTATIONS AND WARRANTIES

     3.1 Representations and Warranties of the Company. Except as set forth in the SEC Reports or
under the corresponding section of the disclosure schedules delivered to the

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Purchasers
concurrently herewith (the “Disclosure Schedules”), which Disclosure Schedules shall be deemed a
part hereof, the Company hereby makes the representations and warranties set forth below to each
Purchaser:

          (a) Subsidiaries. The Company owns, directly or indirectly, all of the capital stock
or other equity interests of each Subsidiary free and clear of any Liens, and all the issued and
outstanding shares of capital stock of each Subsidiary are validly issued and are fully paid,
non-assessable and free of preemptive and similar rights to subscribe for or purchase securities.

          (b) Organization and Qualification. The Company and each of the Subsidiaries is an
entity duly incorporated or otherwise organized, validly existing and in good standing under the
laws of the jurisdiction of its incorporation or organization (as applicable), with the requisite
power and authority to own and use its properties and assets and to carry on its business as
currently conducted. Each of the Company and the Subsidiaries is duly qualified to conduct
business and is in good standing as a foreign corporation or other entity in each jurisdiction in
which the nature of the business conducted or property owned by it makes such qualification
necessary, except where the failure to be so qualified or in good standing, as the case may be,
could not reasonably be expected to result in a Material Adverse Effect.

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

          (d) No Conflicts. The execution, delivery, and performance of the Transaction Documents by the Company, the
issuance and sale of the Shares, and the consummation by the Company of the other transactions
contemplated hereby and thereby do not and will not (i) conflict with or violate any provision of
the Company’s or any Subsidiary’s certificate or articles of incorporation, bylaws, or other
organizational or charter documents, or (ii) conflict with, or constitute a default (or an event
that with notice or lapse of time or both would become a default) under, result in the creation of
any Lien upon any of the properties or assets of the Company or any Subsidiary, or give to others
any rights of termination, amendment, acceleration, or cancellation (with or without notice, lapse
of time, or both) of, any agreement, credit facility, debt or other instrument (evidencing a
Company or Subsidiary debt or otherwise) or other understanding to which the Company or any
Subsidiary is a party or by which any property or asset of the Company or any Subsidiary is bound
or affected, or (iii) subject to the Required Approvals, conflict with or result in a violation of
any law, rule, regulation, order,

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judgment, injunction, decree, or other restriction of any court
or governmental authority to which the Company or a Subsidiary is subject (including federal and
state securities laws and regulations), or by which any property or asset of the Company or a
Subsidiary is bound or affected; except in the case of each of clauses (ii) and (iii), such as
could not reasonably be expected to result in a Material Adverse Effect.

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

          (f) Issuance of the Shares. The Shares are duly authorized and, when issued and paid
for in accordance with the applicable Transaction Documents, will be duly and validly issued, fully
paid and nonassessable, free and clear of all Liens imposed by the Company other than restrictions
on transfer provided for in the Transaction Documents. The Company has reserved from its duly
authorized capital stock the maximum number of shares of Common Stock issuable pursuant to this
Agreement.

          (g) Capitalization. The capitalization of the Company as of June 30, 2007 is as set
forth on Schedule 3.1(g). No Person has any right of first refusal, preemptive right,
right of participation, or any similar right to participate in the transactions contemplated by the
Transaction Documents. Except as a result of the purchase and sale of the Shares or as set forth
on Schedule 3.1(g), there are no outstanding options, warrants, script rights to subscribe
to, calls or
commitments of any character whatsoever relating to, or securities, rights or obligations
convertible into or exercisable or exchangeable for, or giving any Person any right to subscribe
for or acquire, any shares of Common Stock, or contracts, commitments, understandings or
arrangements by which the Company or any Subsidiary is or may become bound to issue additional
shares of Common Stock or Common Stock Equivalents. The issuance and sale of the Shares will not
obligate the Company to issue shares of Common Stock or other securities to any Person (other than
the Purchasers) and will not result in a right of any holder of Company securities to adjust the
exercise, conversion, exchange or reset price under such securities. All of the outstanding shares
of capital stock of the Company are validly issued, fully paid and nonassessable, have been issued
in compliance with all federal and state securities laws, and none of such outstanding shares was
issued in violation of any preemptive rights or similar rights to subscribe for or purchase
securities. No further approval or authorization of any stockholder, the Board of Directors of the
Company or others is required for the issuance and sale of the Shares. There are no stockholders
agreements, voting agreements or other similar agreements with respect to the Company’s capital
stock to which the Company is a party or, to the knowledge of the Company, between or among any of
the Company’s stockholders.

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          (h) SEC Reports; Financial Statements. The Company has filed all reports, schedules,
forms, statements, and other documents required to be filed by it under the Securities Act and the
Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, for the two years preceding the
date hereof (or such shorter period as the Company was required by law to file such material) (the
foregoing materials, including the exhibits thereto and documents incorporated by reference
therein, being collectively referred to herein as the “SEC Reports”) on a timely basis or
has received a valid extension of such time of filing and has filed any such SEC Reports prior to
the expiration of any such extension. As of their respective dates, the SEC Reports complied in
all material respects with the requirements of the Securities Act and the Exchange Act and the
rules and regulations of the Commission promulgated thereunder, and none of the SEC Reports, when
filed, contained any untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading. The Company is eligible to file a
Registration Statement on Form S-3 in connection with a secondary resale offering by the
Purchasers of the Shares. The financial statements of the Company included in the SEC Reports
comply in all material respects with applicable accounting requirements and the rules and
regulations of the Commission with respect thereto as in effect at the time of filing. Such
financial statements have been prepared in accordance with United States generally accepted
accounting principles applied on a consistent basis during the periods involved (“GAAP”),
except as may be otherwise specified in such financial statements or the notes thereto and except
that unaudited financial statements may not contain all footnotes required by GAAP, and fairly
present in all material respects the financial position of the Company and its consolidated
subsidiaries as of and for the dates thereof and the results of operations and cash flows for the
periods then ended, subject, in the case of unaudited statements, to normal, immaterial, year-end
audit adjustments.

          (i) Material Changes; Undisclosed Events, Liabilities or Developments. Since June 30, 2007, the Company has not experienced or suffered any Material Adverse
Effect. Neither the Company nor any of its Subsidiaries has any liabilities, obligations, claims,
or losses (contingent or otherwise) other than (A) those incurred in the ordinary course of
business, (B) those set forth in the SEC Reports, and (C) liabilities not required to be reflected
in the Company’s financial statements pursuant to GAAP or required to be disclosed in filings made
with the Commission. Except for the issuance of the Shares contemplated by this Agreement or as
set forth in the SEC Reports, since June 30, 2007, no event or circumstance has occurred or exists
with respect to the Company or its Subsidiaries or their respective business, properties,
prospects, operations or financial condition, that, under applicable law, rule, or regulation,
requires public disclosure or announcement by the Company but which has not been so publicly
disclosed or announced.

          (j) Litigation. There is no action, suit, inquiry, notice of violation, proceeding or
investigation pending or, to the knowledge of the Company, threatened against or affecting the
Company, any Subsidiary or any of their respective properties before or by any court, arbitrator,
governmental or administrative agency or regulatory authority (federal, state, county, local or
foreign) (collectively, an “Action”) which adversely affects or challenges the legality,
validity or enforceability of any of the Transaction Documents or the Shares. The Commission has
not issued any stop order or other order suspending the effectiveness of any registration statement
filed by the Company or any Subsidiary under the Exchange Act or the Securities Act. None of

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the Company’s or its Subsidiaries’ employees is a member of a union that relates to such employee’s
relationship with the Company, and neither the Company nor any of its Subsidiaries is a party to a
collective bargaining agreement, and the Company and its Subsidiaries believe that their
relationships with their employees are good. No executive officer, to the knowledge of the
Company, is, or is now expected to be, in violation of any material term of any employment
contract, confidentiality, disclosure or proprietary information agreement or non-competition
agreement, or any other contract or agreement or any restrictive covenant, and the continued
employment of each such executive officer does not subject the Company or any of its Subsidiaries
to any liability with respect to any of the foregoing matters. The Company and its Subsidiaries
are in compliance with all U.S. federal, state, local, and foreign laws and regulations relating to
employment and employment practices, terms and conditions of employment and wages and hours, except
where the failure to be in compliance could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.

          (k) Labor Relations. No material labor dispute exists or, to the knowledge of the
Company, is imminent with respect to any of the employees of the Company which could reasonably be
expected to result in a Material Adverse Effect.

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

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

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

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held under lease
by the Company and the Subsidiaries are held by them under valid and enforceable leases of which
the Company and the Subsidiaries are in substantial compliance.

          (o) Patents and Trademarks. The Company and the Subsidiaries have, or have rights to
use, all patents, patent applications, trademarks, trademark applications, service marks, trade
names, trade secrets, inventions, copyrights, licenses, and other similar intellectual property
rights necessary or material for use in connection with their respective businesses as described in
the SEC Reports and which the failure to so have could have a Material Adverse Effect
(collectively, the “Intellectual Property Rights”). Neither the Company nor any Subsidiary
has received a notice (written or otherwise) that the Intellectual Property Rights used by the
Company or any Subsidiary violates or infringes upon the rights of any Person. To the knowledge of
the Company, all such Intellectual Property Rights are enforceable and there is no existing
infringement by another Person of any of the Intellectual Property Rights of others. The Company
and its Subsidiaries have taken reasonable security measures to protect the secrecy,
confidentiality and value of all of their intellectual properties, except where failure to do so
could not, individually or in the aggregate, reasonably be expected to have a Material Adverse
Effect.

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

          (q) Sarbanes-Oxley; Internal Accounting Controls. The Company is in material
compliance with all provisions of the Sarbanes-Oxley Act of 2002 which are applicable to it as of
the Closing Date. The Company and the Subsidiaries maintain a system of internal accounting
controls sufficient to provide reasonable assurance that (i) transactions are executed in
accordance with management’s general or specific authorizations, (ii) transactions are recorded as
necessary to permit preparation of financial statements in conformity with GAAP and to maintain
asset accountability, (iii) access to assets is permitted only in accordance with management’s
general or specific authorization, and (iv) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken with respect to any
differences. The Company has established disclosure controls and procedures (as defined in Exchange
Act Rules 13a-15(e) and 15d-15(e)) for the Company and designed such disclosure controls and
procedures to ensure that material information relating to the Company, including its Subsidiaries,
is made known to the certifying officers by others within those entities, particularly during the
period in which the Company’s most recently filed periodic report under the Exchange Act, as the
case may be, is being prepared. The Company’s certifying officers have evaluated the effectiveness
of the Company’s controls and procedures as of the date prior to the filing date of the most
recently filed periodic report under the Exchange Act (such

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date, the “Evaluation Date”).
The Company presented in its most recently filed periodic report under the Exchange Act the
conclusions of the certifying officers about the effectiveness of the disclosure controls and
procedures based on their evaluations as of the Evaluation Date. Since the Evaluation Date, there
have been no significant changes in the Company’s internal controls (as such term is defined in
Item 307(b) of Regulation S-K under the Exchange Act) or, to the knowledge of the Company, in other
factors that could significantly affect the Company’s internal controls.

          (r) Certain Fees. No brokerage or finder’s fees or commissions are or will be payable
by the Company to any broker, financial advisor or consultant, finder, placement agent, investment
banker, bank, or other Person with respect to the transactions contemplated by the Transaction
Documents. The Purchasers shall have no obligation with respect to any fees or with respect to
any claims made by or on behalf of other Persons for fees of a type contemplated in this
Section that may be due in connection with the transactions contemplated by the Transaction
Documents.

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

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

          (u) Disclosure. The Company confirms that neither it nor any other Person acting on
its behalf has provided any of the Purchasers or their agents or counsel with any information that
constitutes or might constitute material, non-public information. The Company understands and
confirms that the Purchasers will rely on the foregoing representations and covenants in effecting
transactions in securities of the Company. All disclosure provided to the Purchasers regarding the
Company, its business and the transactions contemplated hereby, including the Disclosure Schedules
to this Agreement, furnished by or on behalf of the Company with respect to the representations and
warranties made herein are true and correct with respect to such representations and warranties and
do not contain any untrue statement of a material fact or omit to state any material fact necessary
in order to make the statements made therein, in light of the circumstances under which they were
made, not misleading. The Company acknowledges and agrees that no Purchaser makes or has made any
representations or warranties with respect to the transactions contemplated hereby other than those
specifically set forth in Section 3.2.

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

11

 

          (w) No General Solicitation. Neither the Company nor any person acting on behalf of
the Company has offered or sold any of the Shares by any form of general solicitation or general
advertising. The Company has offered the Shares for sale only to the Purchasers and certain other
“accredited investors” within the meaning of Rule 501 under the Securities Act.

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

          (a) Organization; Authority. Such Purchaser, if an entity, is an entity duly
organized, validly existing, and in good standing under the laws of the jurisdiction of its
organization with full right, corporate or partnership power and authority to enter into and to
consummate the transactions contemplated by the Transaction Documents and otherwise to carry out
its obligations hereunder and thereunder. The execution, delivery, and performance by such
Purchaser of the transactions contemplated by this Agreement have been duly authorized by all
necessary corporate or similar action on the part of such Purchaser. Each Transaction Document to
which it is a party has been duly executed by such Purchaser, and when delivered by such Purchaser
in accordance with the terms hereof, will constitute the valid and legally binding obligation of
such Purchaser, enforceable against it in accordance with its terms, except (i) as limited by
general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and
other laws of general application affecting enforcement of creditors’ rights generally, (ii) as
limited by laws relating to the availability of specific performance, injunctive relief or other
equitable remedies, and (iii) insofar as indemnification and contribution provisions may be limited
by applicable law.

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

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

          (d) Experience of Such Purchaser. Such Purchaser, either alone or together with its representatives,
has such knowledge,
sophistication, and experience in business and

12

 

financial matters so as to be capable of evaluating
the merits and risks of the prospective investment in the Shares, and has so evaluated the merits
and risks of such investment. Such Purchaser is able to bear the economic risk of an investment in
the Shares and, at the present time, is able to afford a complete loss of such investment.

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

          (f) Short Sales and Confidentiality Prior To The Date Hereof. Other than the
transaction contemplated hereunder, such Purchaser has not directly or indirectly, nor has any
Person acting on behalf of or pursuant to any understanding with such Purchaser, executed any
disposition, including Short Sales, in the securities of the Company during the period commencing
from the time that such Purchaser first received a term sheet from the Company or any other Person
setting forth the material terms of the transactions contemplated hereunder until the date hereof
(“Discussion Time”). Notwithstanding the foregoing, in the case of a Purchaser that is a
multi-managed investment vehicle whereby separate portfolio managers manage separate portions of
such Purchaser’s assets and the portfolio managers have no direct knowledge of the investment
decisions made by the portfolio managers managing other portions of such Purchaser’s assets, the
representation set forth above shall only apply with respect to the portion of assets managed by
the portfolio manager that made the investment decision to purchase the Shares covered by this
Agreement. Other than to other Persons party to this Agreement, such Purchaser has maintained the
confidentiality of all disclosures made to it in connection with this transaction (including the
existence and terms of this transaction).

ARTICLE IV.

OTHER AGREEMENTS OF THE PARTIES

     4.1 Transfer Restrictions.

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

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

THESE SECURITIES HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE
SECURITIES COMMISSION OF ANY

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

          The Company acknowledges and agrees that a Purchaser may from time to time pledge pursuant to
a bona fide margin agreement with a registered broker-dealer or grant a security interest in some
or all of the Shares to a financial institution that is an “accredited investor” as defined in Rule
501(a) under the Securities Act and who agrees to be bound by the provisions of this Agreement and
the Registration Rights Agreement and, if required under the terms of such arrangement, such
Purchaser may transfer pledged or secured Shares to the pledgees or secured parties. Such a pledge
or transfer would not be subject to approval of the Company and no legal opinion of legal counsel
of the pledgee, secured party or pledgor shall be required in connection therewith. Further, no
notice shall be required of such pledge. At the appropriate Purchaser’s expense, the Company will
execute and deliver such reasonable documentation as a pledgee or secured party of Shares may
reasonably request in connection with a pledge or transfer of the Shares, including, if the Shares
are subject to registration pursuant to the Registration Rights Agreement, the preparation and
filing of any required prospectus supplement under Rule 424(b)(3) under the Securities Act or other
applicable provision of the Securities Act to appropriately amend the list of Selling Stockholders
thereunder.

          (c) The Company agrees that at such time as such legend is no longer required, it will, no
later than three Trading Days following the delivery to the Company or the Company’s transfer agent
of a certificate representing Shares, issued with a restrictive legend (such third Trading Day, the
“Legend Removal Date”), deliver or cause to be delivered a certificate representing such
shares that is free from all restrictive and other legends. The Company may not make any notation
on its records or give instructions to any transfer agent of the Company that enlarge the
restrictions on transfer set forth in this Section. Certificates for
Shares subject to legend removal hereunder shall be transmitted by the transfer agent of the
Company to the Purchasers by crediting the account of the Purchaser’s prime broker with the
Depository Trust Company System.

          (d) Nothing herein shall limit such Purchaser’s right to pursue actual damages for the
Company’s failure to deliver certificates representing any Shares as required by the Transaction
Documents, and such Purchaser shall have the right to pursue all remedies available

14

 

to it at law or
in equity including, without limitation, a decree of specific performance or injunctive relief.

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

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

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

     4.4 Securities Laws Disclosure; Publicity. The Company shall, no later than by 5:30 p.m. New
York time on the fourth business day immediately following the date hereof, file a Current Report
on Form 8-K disclosing the material terms of the transactions contemplated hereby and shall attach
the Transaction Documents thereto. The Company and each Purchaser shall consult with each other in
issuing any press releases with respect to the transactions contemplated hereby, and no Purchaser
shall issue any press release or otherwise make any such public statement without the prior consent
of the Company, which consent shall not unreasonably be withheld, except if such disclosure is
required by law, in which case the disclosing party shall promptly provide the other party
with prior notice of such public statement or communication. Notwithstanding the foregoing, the
Company shall not publicly disclose the name of any Purchaser, or include the name of any Purchaser
in any filing with the Commission or any regulatory agency or Trading Market, without the prior
written consent of such Purchaser, except (i) as required by federal securities law in connection
with the registration statement contemplated by the Registration Rights Agreement and (ii) to the
extent such disclosure is required by law or Trading Market regulations, in which case the Company
shall provide the Purchasers with prior notice of such disclosure permitted under subclause (i) or
(ii).

15

 

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

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

     4.7 Use of Proceeds. The Company shall use the net proceeds from the sale of the Shares
hereunder for working capital purposes.

     4.8 Indemnification of Purchasers. Subject to the provisions of this Section 4.8, the
Company will indemnify and hold each Purchaser and its directors, officers, stockholders, members,
partners, employees, and agents (and any other Persons with a functionally equivalent role of a
Person holding such titles notwithstanding a lack of such title or any other title), each Person
who controls such Purchaser (within the meaning of Section 15 of the Securities Act and Section 20
of the Exchange Act), and the directors, officers, agents, members, partners, or employees (and any
other Persons with a functionally equivalent role of a Person holding such titles notwithstanding a
lack of such title or any other title) of such controlling persons (each, a “Purchaser
Party”) harmless from any and all losses, liabilities, obligations, claims, contingencies,
damages, costs, and expenses, including all judgments, amounts paid in settlements, court costs,
and reasonable attorneys’ fees and costs of investigation that any such Purchaser Party may suffer
or incur as a result of or relating to (a) any breach of any of the representations, warranties,
covenants, or agreements made by the Company
in this Agreement or in the other Transaction Documents, or (b) any action instituted against
a Purchaser, or any of them or their respective Affiliates, by any stockholder of the Company who
is not an Affiliate of such Purchaser, with respect to any of the transactions contemplated by the
Transaction Documents (unless such action is based upon a breach of such Purchaser’s
representations, warranties, or covenants under the Transaction Documents or any agreements or
understandings such Purchaser may have with any such stockholder or any violations by the Purchaser
of state or federal securities laws or any conduct by such Purchaser which constitutes fraud, gross
negligence, willful misconduct, or malfeasance). If any action shall be brought against any
Purchaser Party in respect of which indemnity may be sought pursuant to this Agreement, such
Purchaser Party shall promptly notify the Company in writing, and the Company shall have the right
to assume the defense thereof with counsel of its own choosing. Any Purchaser Party shall have the
right to employ separate counsel in any such action and participate in the defense thereof, but the
fees and expenses of such counsel shall be at the expense of such Purchaser Party except to the
extent that (i) the employment thereof has been specifically authorized by the Company in writing,
(ii) the Company has failed after a reasonable period of time to assume

16

 

such defense and to employ
counsel, or (iii) in such action there is, in the reasonable opinion of such separate counsel, a
material conflict on any material issue between the position of the Company and the position of
such Purchaser Party. The Company will not be liable to any Purchaser Party under this Agreement
(i) for any settlement by a Purchaser Party effected without the Company’s prior written consent,
which shall not be unreasonably withheld or delayed, or (ii) to the extent, but only to the extent,
that a loss, claim, damage or liability is attributable to any Purchaser Party’s breach of any of
the representations, warranties, covenants, or agreements made by the Purchasers in this Agreement
or in the other Transaction Documents.

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

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

     4.11 Equal Treatment of Purchasers. No consideration shall be offered or paid to any person to amend or consent to a waiver or
modification of any provision of any of the Transaction Documents unless the same consideration is
also offered to all of the parties to the Transaction Documents. For clarification purposes, this
provision constitutes a separate right granted to each Purchaser by the Company and negotiated
separately by each Purchaser, and shall not in any way be construed as the Purchasers acting in
concert or as a group with respect to the purchase, disposition, or voting of Shares or otherwise.

     4.12 Short Sales and Confidentiality After The Date Hereof. Each Purchaser, severally and not
jointly with the other Purchasers, covenants that neither it nor any Affiliates acting on its
behalf or pursuant to any understanding with it will execute any Short Sales during the period
after the Discussion Time and ending at the time that the transactions contemplated by this
Agreement are first publicly announced as described in Section 4.4. Each Purchaser, severally and
not jointly with the other Purchasers, covenants that until such time as the transactions
contemplated by this Agreement are publicly disclosed by the Company as described in Section 4.4,
such Purchaser will maintain the confidentiality of all disclosures made to it in connection with
this transaction (including the existence and terms of this transaction). Each Purchaser
understands and acknowledges, severally and not jointly with any other Purchaser, that the
Commission currently takes the position that coverage of short sales of shares of the Common Stock
“against the box” prior to the Effective Date of the Registration Statement with the Shares is a
violation of Section 5 of the Securities Act, as set forth in Item 65, Section 5

17

 

under Section A,
of the Manual of Publicly Available Telephone Interpretations, dated July 1997, compiled by the
Office of Chief Counsel, Division of Corporation Finance. Notwithstanding the foregoing, no
Purchaser makes any representation, warranty, or covenant hereby that it will not engage in Short
Sales in the securities of the Company after the time that the transactions contemplated by this
Agreement are first publicly announced as described in Section 4.4. Notwithstanding the foregoing,
in the case of a Purchaser that is a multi-managed investment vehicle whereby separate portfolio
managers manage separate portions of such Purchaser’s assets and the portfolio managers have no
direct knowledge of the investment decisions made by the portfolio managers managing other portions
of such Purchaser’s assets, the covenant set forth above shall only apply with respect to the
portion of assets managed by the portfolio manager that made the investment decision to purchase
the Shares covered by this Agreement.

     4.13 Delivery of Shares After Closing. The Company shall deliver, or cause to be delivered,
the respective Shares purchased by each Purchaser to such Purchaser within five Trading Days of the
Closing Date.

     4.14 Beneficial Ownership Restrictions. Notwithstanding anything to the contrary set forth in
this Agreement or any other Transaction Document, at no time may a Purchaser convert or exercise
any securities of the Company if the number of shares of Common Stock to be issued pursuant to such
conversion or exercise, when aggregated with all other shares of Common Stock beneficially owned by
the Purchaser at such time, would result in the Purchaser beneficially owning (as determined in
accordance with Section 13(d) of the Exchange Act and
the rules promulgated thereunder) in excess of 9.99% of the then issued and outstanding shares
of Common Stock outstanding at such time.

ARTICLE V.

MISCELLANEOUS

     5.1 Termination. This Agreement may be terminated by any Purchaser, as to such Purchaser’s
obligations hereunder only and without any effect whatsoever on the obligations between the Company
and the other Purchasers, by written notice to the other parties, if the Closing has not been
consummated on or before September 30, 2007; provided, however, that no such termination will
affect the right of any party to sue for any breach by the other party (or parties).

     5.2 Fees and Expenses. Except as expressly set forth in the Transaction Documents to the
contrary, each party shall pay the fees and expenses of its advisers, counsel, accountants, and
other experts, if any, and all other expenses incurred by such party incident to the negotiation,
preparation, execution, delivery, and performance of this Agreement. The Company shall pay all
transfer agent fees, stamp taxes, and other taxes and duties levied in connection with the delivery
of any Shares.

     5.3 Entire Agreement. The Transaction Documents, together with the exhibits and schedules
thereto, contain the entire understanding of the parties with respect to the subject matter hereof
and supersede all prior agreements and understandings, oral or written, with

18

 

respect to such
matters, which the parties acknowledge have been merged into such documents, exhibits, and
schedules.

     5.4 Notices. Any and all notices or other communications or deliveries required or permitted
to be provided hereunder shall be in writing and shall be deemed given and effective on the
earliest of (a) the date of transmission, if such notice or communication is delivered via
facsimile at the facsimile number set forth on the signature pages attached hereto prior to 5:30
p.m. (New York City time) on a Trading Day, (b) the next Trading Day after the date of
transmission, if such notice or communication is delivered via facsimile at the facsimile number
set forth on the signature pages attached hereto on a day that is not a Trading Day or later than
5:30 p.m. (New York City time) on any Trading Day, (c) the second Trading Day following the date of
mailing, if sent by U.S. nationally recognized overnight courier service, or (d) upon actual
receipt by the party to whom such notice is required to be given. The address for such notices and
communications shall be as set forth on the signature pages attached hereto.

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

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

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

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

     5.9 Governing Law. All questions concerning the construction, validity, enforcement and
interpretation of the Transaction Documents shall be governed by and construed and enforced in
accordance with the internal laws of the State of Delaware, without regard to the principles of
conflicts of law thereof. Each party agrees that all legal proceedings

19

 

concerning the
interpretations, enforcement and defense of the transactions contemplated by this Agreement and any
other Transaction Documents (whether brought against a party or its respective affiliates,
directors, officers, stockholders, employees or agents) shall be commenced exclusively in the state
and federal courts sitting in the City of Phoenix, state of Arizona. Each party hereby irrevocably
submits to the exclusive jurisdiction of the state and federal courts sitting in the City of
Phoenix, state of Arizona, for the adjudication of any dispute hereunder or in connection herewith
or with any transaction contemplated hereby or discussed herein (including with respect to the
enforcement of any of the Transaction Documents), and hereby irrevocably waives, and agrees not to
assert in any suit, action or proceeding, any claim that it is not personally subject to the
jurisdiction of any such court, or that such suit, action or proceeding is improper or an
inconvenient venue for such proceeding. Each party hereby irrevocably waives personal service of
process and consents to process being served in any such suit, action or proceeding by mailing a
copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to
such party at the address in effect for notices to it under this Agreement and agrees that such
service shall
constitute good and sufficient service of process and notice thereof. Nothing contained
herein shall be deemed to limit in any way any right to serve process in any manner permitted by
law. The parties hereby waive all rights to a trial by jury. If either party shall commence an
action or proceeding to enforce any provisions of the Transaction Documents, then the prevailing
party in such action or proceeding shall be reimbursed by the other party for its attorneys’ fees
and other costs and expenses incurred with the investigation, preparation and prosecution of such
action or proceeding.

     5.10 Survival. The representations and warranties contained herein shall survive the Closing
and the delivery of the Shares.

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

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

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

20

 

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

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

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

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

     5.18 Construction. The parties agree that each of them or their respective counsel has
reviewed and had an opportunity to revise the Transaction Documents and, therefore, the normal rule
of construction to the effect that any ambiguities are to be resolved against the drafting party
shall not be

21

 

employed in the interpretation of the Transaction Documents or any amendments hereto.

[Remainder of page intentionally left blank.]

22

 

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

	 	 	 	 	 	 	 
	 	 	SYNTAX-BRILLIAN CORPORATION	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ James Li
 

	 	 
	 	 	Name: James Li	 	 
	 	 	Title: President and Chief Operating Officer	 	 
	 
	 	 	 	 	 	 
	 	 	Address for Notice:	 	 
	 
	 	 	 	 	 	 
	 	 	1600 N. Desert Drive	 	 
	 	 	Tempe, Arizona 85281	 	 
	 	 	Attn: Wayne A. Pratt	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	Email:	 	 	 
	 

	 	 	 	 	 	 
	 	 	Telephone: (602) 389-8888	 	 
	 	 	Facsimile: (602) 389-8801	 	 
	 
	 	 	 	 	 	 
	 	 	With a copy to:	 	 
	 
	 	 	 	 	 	 
	 	 	Greenberg Traurig, LLP	 	 
	 	 	2375 E. Camelback Road, Suite 700	 	 
	 	 	Phoenix, Arizona 85016	 	 
	 	 	Attn: Brian H. Blaney, Esq.	 	 
	 
	 	 	 	 	 	 
	 	 	Email: blaneyb@gtlaw.com	 	 
	 	 	Telephone: (602) 445-8322	 	 
	 	 	Facsimile: (602) 445-8603	 	 

[SIGNATURE PAGE FOR PURCHASERS FOLLOWS]

23

 

PURCHASER SIGNATURE PAGE TO

SYNTAX-BRILLIAN SECURITIES PURCHASE AGREEMENT

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

	 	 	 	 	 	 	 
	 	 	Purchaser Name: TECO Electric & Machinery Co.,
Ltd.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Chao Kai Lin
 

	 	 
	 	 	Name: Chao.Kai Liu	 	 
	 	 	Title: Chairman	 	 

	 	 	 	 	 	 	 
	 	 	Address for Notice:	 	 
	 
	 	 	 	 	 	 
	 	 	5F, No 19-9, San Chong
Rd., Nan-Kang, Taipei Taiwan	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Email:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Telephone:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Facsimile:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	With a copy to:	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Email:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Telephone:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Facsimile:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	Subscription Amount: $20,000,000exv10w69

 

EXHIBIT
10.69

REGISTRATION RIGHTS AGREEMENT

     This Registration Rights Agreement (this “Agreement”) is made and entered into as of
August 23, 2007, among Syntax-Brillian Corporation, a Delaware corporation (the “Company”),
and the purchasers signatory hereto (each such purchaser is a “Purchaser” and collectively,
the “Purchasers”).

     This Agreement is made pursuant to the Securities Purchase Agreement, dated as of August 23,
2007, among the Company and the Purchasers (the “Purchase Agreement”).

     The Company and the Purchasers hereby agree as follows:

     1. Definitions. Capitalized terms used and not otherwise defined herein that are
defined in the Purchase Agreement shall have the meanings given such terms in the Purchase
Agreement. As used in this Agreement, the following terms shall have the following meanings:

          “Advice” shall have the meaning set forth in Section 6(c).

          “Effectiveness Date” means, with respect to the initial Registration Statement
required to be filed hereunder, the 120th calendar day following the date hereof and,
with respect to any additional Registration Statements which may be required pursuant to Section
3(b), the 90th calendar day following the date on which the Company first knows, or
reasonably should have known, that such additional Registration Statement is required hereunder;
provided, however, in the event the Company is notified by the Commission that one
of the above Registration Statements will not be reviewed or is no longer subject to further review
and comments, the Effectiveness Date as to such Registration Statement shall be no later than the
tenth Trading Day following the date on which the Company is so notified if such date precedes the
dates required above.

          “Effectiveness Period” shall have the meaning set forth in Section 2.

          “Filing Date” means, with respect to the initial Registration Statement required
hereunder, the 60th calendar day following the date hereof and, with respect to any
additional Registration Statements which may be required pursuant to Section 3(b), the
30th day following the date on which the Company first knows, or reasonably should have
known, that such additional Registration Statement is required hereunder.

          “Holder” or “Holders” means the holder or holders, as the case may be, from
time to time of Registrable Securities.

          “Indemnified Party” shall have the meaning set forth in Section 5(c).

          “Indemnifying Party” shall have the meaning set forth in Section 5(c).

          “Losses” shall have the meaning set forth in Section 5(a).

 

 

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

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

          “Registrable Securities” means (i) the Shares, and (ii) any shares of Common Stock
issued or issuable upon any stock split, dividend, or other distribution, recapitalization, or
similar event with respect to the Shares.

          “Registration Statement” means the registration statements required to be filed
hereunder and any additional registration statements contemplated by Section 3(b), including (in
each case) the Prospectus, amendments, and supplements to such registration statement or
Prospectus, including pre- and post-effective amendments, all exhibits thereto, and all material
incorporated by reference or deemed to be incorporated by reference in such registration statement.

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

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

          “Selling Stockholder Questionnaire” shall have the meaning set forth in Section 3(a).

     2. Shelf Registration. On or prior to each Filing Date, the Company shall prepare and
file with the Commission a “Shelf” Registration Statement covering the resale of the Registrable
Securities on such Filing Date for an offering to be made on a continuous basis pursuant to Rule
415. The Registration Statement shall be on Form S-3 (except if the Company is not then eligible
to register for resale the Registrable Securities on Form S-3, in which case such registration
shall be on another appropriate form in accordance herewith). Subject to the terms of this
Agreement, the Company shall use its best efforts to cause a Registration Statement to be declared
effective under the Securities Act as promptly as possible after the filing thereof, but in any
event prior to the applicable Effectiveness Date, and shall use its best efforts to keep such
Registration Statement continuously effective under the Securities Act until all Registrable

2

 

Securities covered by such Registration Statement have been sold or may be sold without volume
restrictions pursuant to Rule 144(k) as determined by the counsel to the Company pursuant to a
written opinion letter to such effect, addressed and acceptable to the Company’s transfer agent and
the affected Holders (the “Effectiveness Period”). The Company shall notify the Holders
via facsimile of the effectiveness of a Registration Statement within two Trading Days of the date
that the Company telephonically confirms effectiveness with the Commission, which shall be the date
requested for effectiveness of a Registration Statement. The Company shall promptly file a Rule
424(b) prospectus with the Commission.

     3. Registration Procedures.

          In connection with the Company’s registration obligations hereunder, the Company shall:

          (a) Not less than five Trading Days prior to the filing of each Registration Statement or any
related Prospectus or any amendment or supplement thereto (including any document that would be
incorporated or deemed to be incorporated therein by reference), the Company shall, (i) furnish to
each Holder copies of all such documents proposed to be filed, which documents (other than those
incorporated or deemed to be incorporated by reference) will be subject to the review of such
Holders, and (ii) cause its officers, directors, counsel, and independent certified public
accountants to respond to such inquiries as shall be necessary, in the reasonable opinion of
respective counsel, to conduct a reasonable investigation within the meaning of the Securities Act.
The Company shall not file a Registration Statement or any such Prospectus or any amendments or
supplements thereto to which the Holders of a majority of the Registrable Securities shall
reasonably object in good faith, provided that the Company is notified of such objection in writing
no later than five Trading Days after the Holders have been so furnished copies of such documents.
Each Holder agrees to furnish to the Company a completed Questionnaire in the form attached to this
Agreement as Annex A (a “Selling Stockholder Questionnaire”) not less than two Trading Days
prior to the Filing Date or by the end of the fourth Trading Day following the date on which such
Holder receives draft materials in accordance with this Section.

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

3

 

the intended methods of disposition by the Holders thereof set forth in such Registration
Statement as so amended or in such Prospectus as so supplemented.

          (c) Notify the Holders of Registrable Securities to be sold (which notice shall, pursuant to
clauses (ii) through (vi) hereof, be accompanied by an instruction to suspend the use of the
Prospectus until the requisite changes have been made) as promptly as reasonably possible (and, in
the case of (i)(A) below, not less than five Trading Days prior to such filing): (i)(A) when a
post-effective amendment to a Registration Statement is proposed to be filed, and (B) with respect
to a Registration Statement or any post-effective amendment, when the same has become effective;
(ii) of the issuance by the Commission or any other federal or state governmental authority of any
stop order suspending the effectiveness of a Registration Statement covering any or all of the
Registrable Securities or the initiation of any Proceedings for that purpose; (iv) of the receipt
by the Company of any notification with respect to the suspension of the qualification or exemption
from qualification of any of the Registrable Securities for sale in any jurisdiction, or the
initiation or threatening of any Proceeding for such purpose; (v) of the occurrence of any event or
passage of time that makes the financial statements included in a Registration Statement ineligible
for inclusion therein or any statement made in a Registration Statement or Prospectus or any
document incorporated or deemed to be incorporated therein by reference untrue in any material
respect or that requires any revisions to a Registration Statement, Prospectus, or other document
so that, in the case of a Registration Statement or the Prospectus, as the case may be, it will not
contain any untrue statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading; and (vi) the occurrence or existence of any pending corporate
development with respect to the Company that the Company believes may be material and that, in the
determination of the Company, makes it not in the best interest of the Company to allow continued
availability of a Registration Statement or Prospectus; provided that any and all of such
information shall remain confidential to each Holder until such information otherwise becomes
public, unless disclosure by a Holder is required by law.

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

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

          (f) Promptly deliver to each Holder, upon request and without charge, as many copies of the
Prospectus or Prospectuses (including each form of prospectus) and each amendment or supplement
thereto as such Persons may reasonably request in connection with resales by the Holder of
Registrable Securities. Subject to the terms of this Agreement, the Company hereby consents to the
use of such Prospectus and each amendment or supplement

4

 

thereto by each of the selling Holders in connection with the offering and sale of the
Registrable Securities covered by such Prospectus and any amendment or supplement thereto, except
after the giving on any notice pursuant to Section 3(c)(ii)-(vi).

          (g) [Intentionally Omitted]

          (h) Prior to any resale of Registrable Securities by a Holder, use its commercially reasonable
efforts to register or qualify or cooperate with the selling Holders in connection with the
registration or qualification (or exemption from the Registration or qualification) of such
Registrable Securities for the resale by the Holder under the securities or Blue Sky laws of such
jurisdictions within the United States as any Holder reasonably requests in writing, to keep each
registration or qualification (or exemption therefrom) effective during the Effectiveness Period
and to do any and all other acts or things reasonably necessary to enable the disposition in such
jurisdictions of the Registrable Securities covered by each Registration Statement; provided, that
the Company shall not be required to qualify generally to do business in any jurisdiction where it
is not then so qualified, subject the Company to any material tax in any such jurisdiction where it
is not then so subject, or file a general consent to service of process in any such jurisdiction.

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

          (j) Upon the occurrence of any event contemplated by this Section 3, as promptly as reasonably
possible under the circumstances, taking into account the Company’s good faith assessment of any
adverse consequences to the Company and its stockholders of the premature disclosure of such event,
prepare a supplement or amendment, including a post-effective amendment, to a Registration
Statement or a supplement to the related Prospectus or any document incorporated or deemed to be
incorporated therein by reference, and file any other required document so that, as thereafter
delivered, neither a Registration Statement nor such Prospectus will contain an untrue statement of
a material fact or omit to state a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they were made, not misleading.
If the Company notifies the Holders in accordance with clauses (ii) through (vi) of Section 3(c)
above to suspend the use of any Prospectus until the requisite changes to such Prospectus have been
made, then the Holders shall suspend use of such Prospectus. The Company will use its best efforts
to ensure that the use of the Prospectus may be resumed as promptly as is practicable. The Company
shall be entitled to exercise its right under this Section 3(j) to suspend the availability of a
Registration Statement and Prospectus for a period not to exceed 60 days (which need not be
consecutive days) in any 12-month period.

          (k) Comply with all applicable rules and regulations of the Commission.

5

 

          (l) The Company may require each selling Holder to furnish to the Company a certified
statement as to the number of shares of Common Stock beneficially owned by such Holder and, if
required by the Commission, the person thereof that has voting and dispositive control over such
shares.

     4. Registration Expenses. All fees and expenses incident to the performance of or
compliance with this Agreement by the Company shall be borne by the Company whether or not any
Registrable Securities are sold pursuant to a Registration Statement. The fees and expenses
referred to in the foregoing sentence shall include, without limitation, (i) all registration and
filing fees (including, without limitation, fees and expenses (A) with respect to filings required
to be made with the Trading Market on which the Common Stock is then listed for trading, (B) in
compliance with applicable state securities or Blue Sky laws reasonably agreed to by the Company in
writing (including, without limitation, fees and disbursements of counsel for the Company in
connection with Blue Sky qualifications or exemptions of the Registrable Securities and
determination of the eligibility of the Registrable Securities for investment under the laws of
such jurisdictions as requested by the Holders), and (C) if not previously paid by the Company in
connection with an Issuer Filing, with respect to any filing that may be required to be made by any
broker through which a Holder intends to make sales of Registrable Securities with NASD Regulation,
Inc. pursuant to the NASD Rule 2710, so long as the broker is receiving no more than a customary
brokerage commission in connection with such sale, (ii) printing expenses (including, without
limitation, expenses of printing certificates for Registrable Securities and of printing
prospectuses if the printing of prospectuses is reasonably requested by the holders of a majority
of the Registrable Securities included in a Registration Statement), (iii) messenger, telephone,
and delivery expenses, (iv) fees and disbursements of counsel for the Company, (v) Securities Act
liability insurance, if the Company so desires such insurance, and (vi) fees and expenses of all
other Persons retained by the Company in connection with the consummation of the transactions
contemplated by this Agreement. In addition, the Company shall be responsible for all of its
internal expenses incurred in connection with the consummation of the transactions contemplated by
this Agreement (including, without limitation, all salaries and expenses of its officers and
employees performing legal or accounting duties), the expense of any annual audit and the fees and
expenses incurred in connection with the listing of the Registrable Securities on any securities
exchange as required hereunder. In no event shall the Company be responsible for any broker or
similar commissions or, except to the extent provided for in the Transaction Documents, any legal
fees or other costs of the Holders.

     5. Indemnification.

          (a) Indemnification by the Company. The Company shall, notwithstanding any
termination of this Agreement, indemnify and hold harmless each Holder, the officers, directors,
members, partners, agents, brokers (including brokers who offer and sell Registrable Securities as
principal as a result of a pledge or any failure to perform under a margin call of Common Stock),
investment advisors, and employees (and any other Persons with a functionally equivalent role of a
Person holding such titles, notwithstanding a lack of such title or any other title) of each of
them, each Person who controls any such Holder (within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act) and the officers, directors, members, partners, agents, and
employees (and any other Persons with a functionally equivalent role of a Person holding such
titles, notwithstanding a lack of such title or any other title) of each such

6

 

controlling Person,
to the fullest extent permitted by applicable law, from and against any and all losses, claims,
damages, liabilities, costs (including, without limitation, reasonable attorneys’ fees), and
expenses (collectively, “Losses”), as incurred, arising out of or relating to (1) any
untrue or alleged untrue statement of a material fact contained in a Registration Statement, any
Prospectus or any form of prospectus or in any amendment or supplement thereto or in any
preliminary prospectus, or arising out of or relating to any omission or alleged omission of a
material fact required to be stated therein or necessary to make the statements therein (in the
case of any Prospectus or form of prospectus or supplement thereto, in light of the circumstances
under which they were made) not misleading, or (2) any violation or alleged violation by the
Company of the Securities Act, Exchange Act or any state securities law, or any rule or regulation
thereunder, in connection with the performance of its obligations under this Agreement, except to
the extent, but only to the extent, that (i) such untrue statements or omissions are based solely
upon information regarding such Holder furnished in writing to the Company by such Holder expressly
for use therein, or to the extent that such information relates to such Holder or such Holder’s
proposed method of distribution of Registrable Securities and was reviewed and expressly approved
in writing by such Holder expressly for use in a Registration Statement, such Prospectus or such
form of Prospectus or in any amendment or supplement thereto, or (ii) in the case of an occurrence
of an event of the type specified in Section 3(c)(ii)-(vi), the use by such Holder of an outdated
or defective Prospectus after the Company has notified such Holder in writing that the Prospectus
is outdated or defective and prior to the receipt by such Holder of the Advice contemplated in
Section 6(c). The Company shall notify the Holders promptly of the institution, threat or
assertion of any Proceeding arising from or in connection with the transactions contemplated by
this Agreement of which the Company is aware.

          (b) Indemnification by Holders. Each Holder shall, severally and not jointly,
indemnify and hold harmless the Company, its directors, officers, agents, and employees, each
Person who controls the Company (within the meaning of Section 15 of the Securities Act and Section
20 of the Exchange Act), and the directors, officers, agents, or employees of such controlling
Persons, to the fullest extent permitted by applicable law, from and against all Losses, as
incurred, to the extent arising out of or based solely upon: (i) such Holder’s failure to comply
with the prospectus delivery requirements of the Securities Act, or (ii) any untrue or alleged
untrue statement of a material fact contained in any Registration Statement, any Prospectus, or any
form of prospectus, or in any amendment or supplement thereto or in any preliminary prospectus, or
arising out of or relating to any omission or alleged omission of a material fact required to be
stated therein or necessary to make the statements therein not misleading (x) to the extent, but
only to the extent, that such untrue statement or omission is contained in any information so
furnished in writing by such Holder to the Company specifically for inclusion in such Registration
Statement or such Prospectus or (y) to the extent that (1) such untrue statements or omissions are
based solely upon information regarding such Holder furnished in writing to the Company by such
Holder expressly for use therein, or to the extent that such information relates to such Holder or
such Holder’s proposed method of distribution of Registrable Securities and was reviewed and
expressly approved in writing by such Holder expressly for use in a Registration Statement,
such Prospectus or such form of Prospectus or in any amendment or supplement thereto, or (2) in the
case of an occurrence of an event of the type specified in Section 3(c)(ii)-(vi), the use by such
Holder of an outdated or

7

 

defective Prospectus after the Company has notified such Holder in writing
that the Prospectus is outdated or defective and prior to the receipt by such Holder of the Advice
contemplated in Section 6(c). In no event shall the liability of any selling Holder hereunder be
greater in amount than the dollar amount of the net proceeds received by such Holder upon the sale
of the Registrable Securities giving rise to such indemnification obligation.

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

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

               Subject to the terms of this Agreement, all reasonable fees and expenses of the Indemnified
Party (including reasonable fees and expenses to the extent incurred in connection with
investigating or preparing to defend such Proceeding in a manner not inconsistent with this
Section) shall be paid to the Indemnified Party, as incurred, within ten Trading Days of written
notice thereof to the Indemnifying Party; provided, that the Indemnified
Party shall promptly reimburse the Indemnifying Party for that portion of such fees and
expenses applicable to such actions for which such Indemnified Party is not entitled to
indemnification hereunder, determined based upon the relative faults of the parties.

8

 

          (d) Contribution. If the indemnification under Section 5(a) or 5(b) is unavailable to
an Indemnified Party or insufficient to hold an Indemnified Party harmless for any Losses, then
each Indemnifying Party shall contribute to the amount paid or payable by such Indemnified Party,
in such proportion as is appropriate to reflect the relative fault of the Indemnifying Party and
Indemnified Party in connection with the actions, statements, or omissions that resulted in such
Losses as well as any other relevant equitable considerations. The relative fault of such
Indemnifying Party and Indemnified Party shall be determined by reference to, among other things,
whether any action in question, including any untrue or alleged untrue statement of a material fact
or omission or alleged omission of a material fact, has been taken or made by, or relates to
information supplied by, such Indemnifying Party or Indemnified Party, and the parties’ relative
intent, knowledge, access to information and opportunity to correct or prevent such action,
statement or omission. The amount paid or payable by a party as a result of any Losses shall be
deemed to include, subject to the limitations set forth in this Agreement, any reasonable
attorneys’ or other reasonable fees or expenses incurred by such party in connection with any
Proceeding to the extent such party would have been indemnified for such fees or expenses if the
indemnification provided for in this Section was available to such party in accordance with its
terms.

          The parties hereto agree that it would not be just and equitable if contribution pursuant to
this Section 5(d) were determined by pro rata allocation or by any other method of allocation that
does not take into account the equitable considerations referred to in the immediately preceding
paragraph. Notwithstanding the provisions of this Section 5(d), no Holder shall be required to
contribute, in the aggregate, any amount in excess of the amount by which the proceeds actually
received by such Holder from the sale of the Registrable Securities subject to the Proceeding
exceeds the amount of any damages that such Holder has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission, except in the case of
fraud by such Holder.

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

     6. Miscellaneous.

          (a) Remedies. In the event of a breach by the Company or by a Holder, of any of their
obligations under this Agreement, each Holder or the Company, as the case may be, in addition to
being entitled to exercise all rights granted by law and under this Agreement, including recovery
of damages, will be entitled to specific performance of its rights under this Agreement. The
Company and each Holder agree that monetary damages would not provide adequate compensation for any
losses incurred by reason of a breach by it of any of the provisions of this
Agreement and hereby further agree that, in the event of any action for specific performance
in respect of such breach, it shall waive the defense that a remedy at law would be adequate.

          (b) Compliance. Each Holder covenants and agrees that it will comply with the
prospectus delivery requirements of the Securities Act as applicable to it in connection with sales
of Registrable Securities pursuant to a Registration Statement.

9

 

          (c) Discontinued Disposition. Each Holder agrees by its acquisition of Registrable
Securities that, upon receipt of a notice from the Company of the occurrence of any event of the
kind described in Section 3(c)(ii)-(vi), such Holder will forthwith discontinue disposition of such
Registrable Securities under a Registration Statement until such Holder’s receipt of the copies of
the supplemented Prospectus and/or amended Registration Statement or until it is advised in writing
(the “Advice”) by the Company that the use of the applicable Prospectus may be resumed,
and, in either case, has received copies of any additional or supplemental filings that are
incorporated or deemed to be incorporated by reference in such Prospectus or Registration
Statement. The Company will use its reasonable best efforts to ensure that the use of the
Prospectus may be resumed as promptly as is practicable.

          (d) Piggy-Back Registrations. If at any time during the Effectiveness Period there is
not an effective Registration Statement covering all of the Registrable Securities and the Company
shall determine to prepare and file with the Commission a registration statement relating to an
offering for its own account or the account of others under the Securities Act of any of its equity
securities, other than on Form S-4 or Form S-8 (each as promulgated under the Securities Act) or
their then equivalents relating to equity securities to be issued solely in connection with any
acquisition of any entity or business or equity securities issuable in connection with the stock
option or other employee benefit plans, then the Company shall send to each Holder a written notice
of such determination and if, within fifteen days after the date of such notice, any such Holder
shall so request in writing, the Company shall include in such registration statement all or any
part of such Registrable Securities such Holder requests to be registered; provided,
however, that the Company shall not be required to register any Registrable Securities
pursuant to this Section 6(d) that are eligible for resale pursuant to Rule 144(k) promulgated
under the Securities Act or that are the subject of a then effective Registration Statement.

          (e) Amendments and Waivers. The provisions of this Agreement, including the provisions
of this sentence, may not be amended, modified, or supplemented, and waivers or consents to
departures from the provisions hereof may not be given, unless the same shall be in writing and
signed by the Company and each Holder of the then outstanding Registrable Securities.
Notwithstanding the foregoing, a waiver or consent to depart from the provisions hereof with
respect to a matter that relates exclusively to the rights of Holders and that does not directly or
indirectly affect the rights of other Holders may be given by Holders of all of the Registrable
Securities to which such
waiver or consent relates; provided, however, that the provisions of this
sentence may not be amended, modified, or supplemented except in accordance with the provisions of
the immediately preceding sentence.

          (f) Notices. Any and all notices or other communications or deliveries required or
permitted to be provided hereunder shall be delivered as set forth in the Purchase Agreement.

          (g) Successors and Assigns. This Agreement shall inure to the benefit of and be
binding upon the successors and permitted assigns of each of the parties and shall inure to the
benefit of each Holder. The Company may not assign its rights or obligations hereunder without the
prior written consent of all of the Holders of the then-outstanding Registrable Securities.

10

 

Each
Holder may assign its respective rights hereunder in the manner and to the Persons as permitted
under the Purchase Agreement.

          (h) No Inconsistent Agreements. Neither the Company nor any of its subsidiaries has
entered, as of the date hereof, nor shall the Company or any of its subsidiaries, on or after the
date of this Agreement, enter into any agreement with respect to its securities, that would have
the effect of impairing the rights granted to the Holders in this Agreement or otherwise conflicts
with the provisions hereof.

          (i) Execution and Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed shall be deemed to be an original and all of which
taken together shall constitute one and the same Agreement. In the event that any signature is
delivered by facsimile transmission, such signature shall create a valid binding obligation of the
party executing (or on whose behalf such signature is executed) the same with the same force and
effect as if such facsimile signature were the original thereof.

          (j) Governing Law. All questions concerning the construction, validity, enforcement
and interpretation of this Agreement shall be determined in accordance with the provisions of the
Purchase Agreement.

          (k) Cumulative Remedies. The remedies provided herein are cumulative and not
exclusive of any remedies provided by law.

          (l) Severability. If any term, provision, covenant, or restriction of this Agreement is held by a court of
competent jurisdiction to be invalid, illegal, void, or unenforceable, the remainder of the terms,
provisions, covenants, and restrictions set forth herein shall remain in full force and effect and
shall in no way be affected, impaired, or invalidated, and the parties hereto shall use their
commercially reasonable efforts to find and employ an alternative means to achieve the same or
substantially the same result as that contemplated by such term, provision, covenant or
restriction. It is hereby stipulated and declared to be the intention of the parties that they
would have executed the remaining terms, provisions, covenants and restrictions without including
any of such that may be hereafter declared invalid, illegal, void, or unenforceable.

          (m) Headings. The headings in this Agreement are for convenience of reference only
and shall not limit or otherwise affect the meaning hereof.

          (n) Independent Nature of Holders’ Obligations and Rights. The obligations of each
Holder hereunder are several and not joint with the obligations of any other Holder hereunder, and
no Holder shall be responsible in any way for the performance of the obligations of any other
Holder hereunder. Nothing contained herein or in any other agreement or document delivered at any
closing, and no action taken by any Holder pursuant hereto or thereto, shall be deemed to
constitute the Holders as a partnership, an association, a joint venture or any other kind of
entity, or create a presumption that the Holders are in any way acting in concert with respect to
such obligations or the transactions contemplated by this Agreement. Each Holder shall be entitled
to protect and enforce its rights, including without limitation the rights arising

11

 

out of this
Agreement, and it shall not be necessary for any other Holder to be joined as an additional party
in any proceeding for such purpose.

[Remainder of page intentionally left blank.]

12

 

     IN WITNESS WHEREOF, the parties have executed this Registration Rights Agreement as of the
date first written above.

	 	 	 	 	 
	 	SYNTAX-BRILLIAN CORPORATION

 	 
	 	By:  	         /s/ James Li
 	 
	 	 	Name:  	James Li 	 
	 	 	Title:  	President and Chief Operating Officer 	 
	 

[SIGNATURE PAGE FOR HOLDERS FOLLOWS]

13

 

PURCHASER SIGNATURE PAGE TO

TO SYNTAX-BRILLIAN CORPORATION REGISTRATION RIGHTS AGREEMENT

	 	 	 	 	 	 	 
	 	 	Purchaser Name: TECO Electric & Machinery Co.,
Ltd.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Chao Kai Liu
 

	 	 
	 	 	Name: Chao.Kai Liu	 	 
	 	 	Title: Chairman	 	 

	 	 	 	 	 	 	 
	 	 	Address for Notice:	 	 
	 
	 	 	 	 	 	 
	 	 	5F, No 19-9, San Chong
Rd., Nan-Kang, Taipei Taiwan	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Email:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Telephone:	 	02-2655-3333	 	 
	 

	 	 	 	 	 	 
	 

	 	Facsimile:	 	02-2655-2212	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	With a copy to:	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Email:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Telephone:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Facsimile:	 	 	 	 
	 

	 	 	 	 	 	 

 

 

ANNEX A

Selling Securityholder Notice and Questionnaire

     The undersigned holder of shares of common stock, par value $0.001 per share (the “Registrable
Securities”), of Syntax-Brillian Corporation, a Delaware corporation (the “Company”), understands
that the Company has filed or intends to file with the Securities and Exchange Commission (the
“Commission”) a registration statement on Form S-3 (the “Registration Statement”) for the
registration and resale under Rule 415 of the Securities Act of 1933, as amended (the “Securities
Act”), of the Registrable Securities, in accordance with the terms of the Registration Rights
Agreement, dated as of August 23, 2007 (the “Registration Rights Agreement”), among the Company and
the Purchasers named therein. A copy of the Registration Rights Agreement is available from the
Company upon request at the address set forth below. All capitalized terms not otherwise defined
herein shall have the meanings ascribed thereto in the Registration Rights Agreement.

     Certain legal consequences arise from being named as a selling securityholder in the
Registration Statement and the related prospectus. Accordingly, holders and beneficial owners of
Registrable Securities are advised to consult their own securities law counsel regarding the
consequences of being named or not being named as a selling securityholder in the Registration
Statement and the related prospectus.

     The undersigned beneficial owner (the “Selling Securityholder”) of Registrable Securities
hereby elects to include the Registrable Securities owned by it and listed below in Item 3 (unless
otherwise specified under such Item 3) in the Registration Statement.

     The undersigned hereby provides the following information to the Company and represents and
warrants that such information is accurate:

QUESTIONNAIRE

	1.	 	Name.

	 	(a)	 	Full Legal Name of Selling Securityholder:
	 
	 	(b)	 	Full Legal Name of Registered Holder (if not the same as (a) above) through
which Registrable Securities listed in Item 3 below are held:

A-1

 

 

	 	(c)	 	Full Legal Name of Natural Control Person (which means a natural person who
directly or indirectly alone or with others has power to vote or dispose of the
securities covered by the questionnaire):

	2.	 	Address for Notices to Selling Securityholder:

	 	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Telephone:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Fax:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Contact Person:	 	 	 	 
	 

	 	 	 	 	 	 

	3.	 	Beneficial Ownership of Registrable Securities:

	 	(a)	 	Type and Principal Amount of Registrable Securities beneficially owned:

	4.	 	Broker-Dealer Status:

	 	(a)	 	Are you a broker-dealer?
	 
	 	 	 	o Yes            o No
	 
	 	(b)	 	If “yes” to Section 4(a), did you receive your Registrable Securities as
compensation for investment banking services to the Company?
	 
	 	 	 	o Yes            o No

Note: If “no,” the Commission’s staff has indicated that you should be
identified as an underwriter in the Registration Statement.

	 	(c)	 	Are you an affiliate of a broker-dealer?
	 
	 	 	 	o Yes            o No

A-2

 

 

	 	(d)	 	If you are an affiliate of a broker-dealer, do you certify that you bought the
Registrable Securities in the ordinary course of business, and at the time of the
purchase of the Registrable Securities to be resold, you had no agreements or
understandings, directly or indirectly, with any person to distribute the Registrable
Securities?
	 
	 	 	 	o Yes            o No
	 
	 	 	 	Note: If “no,” the Commission’s staff has indicated that you should be identified as
an underwriter in the Registration Statement.

	5.	 	Beneficial Ownership of Other Securities of the Company Owned by the Selling
Securityholder.
	 
	 	 	Except as set forth below in this Item 5, the undersigned is not the beneficial or
registered owner of any securities of the Company other than the Registrable Securities
listed above in Item 3.

	 	(a)	 	Type and Amount of Other Securities beneficially owned by the Selling
Securityholder:

	6.	 	Relationships with the Company:
	 
	 	 	Except as set forth below, neither the undersigned nor any of its affiliates, officers,
directors or principal equity holders (owners of 5% of more of the equity securities of the
undersigned) has held any position or office or has had any other material relationship with
the Company (or its predecessors or affiliates) during the past three years.
	 
	 	 	State any exceptions here:

A-3

 

 

The undersigned agrees to promptly notify the Company of any inaccuracies or changes in the
information provided herein that may occur subsequent to the date hereof at any time while the
Registration Statement remains effective. By signing below, the undersigned consents to the
disclosure of the information contained herein in its answers to Items 1 through 6 and the
inclusion of such information in the Registration Statement and the related prospectus and any
amendments or supplements thereto. The undersigned understands that such information will be
relied upon by the Company in connection with the preparation or amendment of the Registration
Statement and the related prospectus.

     IN WITNESS WHEREOF the undersigned, by authority duly given, has caused this Questionnaire to
be executed and delivered either in person or by its duly authorized agent.

	 	 	 	 	 	 	 
	Dated:                     
	 	Beneficial Owner:                              
                                                    
	 	 

	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 

PLEASE FAX A COPY OF THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE, AND RETURN THE ORIGINAL
BY OVERNIGHT MAIL, TO:

	 	 	 
	 

	 	Greenberg Traurig, LLP
	 

	 	2375 E. Camelback Road, Suite 700
	 

	 	Phoenix, Arizona 85016
	 

	 	Attn: Brian H. Blaney, Esq.
	 

	 	Facsimile: (602) 445-8603

A-4

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