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EXHIBIT 4.11

NEITHER THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS EXERCISABLE HAVE BEEN
REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN
RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE
WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR
TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY. THIS
SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS SECURITY MAY BE PLEDGED IN CONNECTION
WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.

COMMON STOCK PURCHASE WARRANT

To Purchase [__] Shares of Common Stock of

BRILLIAN CORPORATION

     THIS COMMON STOCK PURCHASE WARRANT (the “Warrant”) certifies that, for value received,
Syntax Groups Corporation, a California corporation (the “Holder”), is entitled, upon the
terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any
time on or after the 181st day after the date hereof (the “Initial Exercise Date”) and on
or prior to the close of business on the fifth anniversary of the Initial Exercise Date (the
“Termination Date”) but not thereafter, to subscribe for and purchase from Brillian
Corporation, a Delaware corporation (the “Company”), up to [___] shares (the “Warrant
Shares”) of Common Stock, par value $0.001 per share, of the Company (the “Common
Stock”). The purchase price of one share of Common Stock under this Warrant shall be equal to
the Exercise Price, as defined in Section 2(b).

     Section 1. Definitions. Capitalized terms used and not otherwise defined herein shall
have the meanings set forth in that certain Securities Purchase Agreement (the “Purchase
Agreement”), dated as of September 16, 2005, between the Company and the Holder.

     Section 2. Exercise.

          (a) Exercise of Warrant. Exercise of the purchase rights represented by this Warrant
may be made, in whole or in part, at any time or times on or after the Initial Exercise Date and on
or before the Termination Date by delivery to the Company of a duly executed facsimile copy of the
Notice of Exercise Form annexed hereto (or such other office or agency of the Company as it may
designate by notice in writing to the registered Holder at the address of such Holder appearing on
the books of the Company); provided, however, within five Trading Days of the
date said Notice of Exercise is delivered to the Company, the Holder shall have surrendered this
Warrant to the Company and the Company shall have received payment of the

 

 

aggregate Exercise Price
of the shares thereby purchased by wire transfer or cashier’s check drawn on a United States bank.

          (b) Exercise Price. The exercise price of the Common Stock under this Warrant shall
be equal the VWAP plus $0.13 determined as of the issuance date or, if the issuance date is not a
Trading Day, the Trading Day immediately preceding the issuance date, subject to adjustment
hereunder (the “Exercise Price”).

          (c) Cashless Exercise. If at any time after one year from the date of issuance of
this Warrant there is no effective registration statement under the Securities Act registering, or
no current prospectus available for, the resale of the Warrant Shares by the Holder, then this
Warrant may also be exercised at such time by means of a “cashless exercise” in which the Holder
shall be entitled to receive a certificate for the number of Warrant Shares equal to the quotient
obtained by dividing [(A-B) (X)] by (A), where:

	 	(A)	 	= the VWAP on the Trading Day immediately preceding the date of such election;
	 
	 	(B)	 	= the Exercise Price of this Warrant, as adjusted; and
	 
	 	(X)	 	= the number of Warrant Shares issuable upon exercise of this Warrant in accordance with the terms of this Warrant by means of a cash exercise rather than a cashless exercise.

                    Notwithstanding anything herein to the contrary, on the Termination Date, this Warrant shall
be automatically exercised via cashless exercise pursuant to this Section 2(c).

          (d) Exercise Limitations.

                    (i) Holder’s Restrictions. A Holder shall not have the right to exercise any portion
of this Warrant, pursuant to Section 2(c) or otherwise, to the extent that after giving effect to
such issuance after exercise, such Holder (together with such Holder’s affiliates), as set forth on
the applicable Notice of Exercise, would beneficially own in excess of 4.99% of the number of
shares of the Common Stock outstanding immediately after giving effect to such issuance. For
purposes of the foregoing sentence, the number of shares of Common Stock beneficially owned by such
Holder and its affiliates shall include the number of shares of Common Stock issuable upon exercise
of this Warrant with respect to which the determination of such sentence is being made, but shall
exclude the number of shares of Common Stock which would be issuable upon (A)
exercise of the remaining, nonexercised portion of this Warrant beneficially owned by such
Holder or any of its affiliates and (B) exercise or conversion of the unexercised or nonconverted
portion of any other securities of the Company (including, without limitation, any Note or
Warrants) subject to a limitation on conversion or exercise analogous to the limitation contained
herein beneficially owned by such Holder or any of its affiliates. Except as set forth in the
preceding sentence, for purposes of this Section 2(d), beneficial ownership shall be calculated in
accordance with Section 13(d) of the Exchange Act, it being acknowledged by a Holder that the
Company is not representing to such Holder that such calculation is in compliance with Section
13(d) of the Exchange Act and such Holder is solely responsible for any schedules required to be
filed in accordance therewith. To the extent that the limitation

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contained in this Section 2(d)
applies, the determination of whether this Warrant is exercisable (in relation to other securities
owned by such Holder) and of which a portion of this Warrant is exercisable shall be in the sole
discretion of a Holder, and the submission of a Notice of Exercise shall be deemed to be each
Holder’s determination of whether this Warrant is exercisable (in relation to other securities
owned by such Holder) and of which portion of this Warrant is exercisable, in each case subject to
such aggregate percentage limitation, and the Company shall have no obligation to verify or confirm
the accuracy of such determination. For purposes of this Section 2(d), in determining the number
of outstanding shares of Common Stock, a Holder may rely on the number of outstanding shares of
Common Stock as reflected in (x) the Company’s most recent Form 10-Q or Form 10-K, as the case may
be, (y) a more recent public announcement by the Company, or (z) any other notice by the Company or
the Company’s Transfer Agent setting forth the number of shares of Common Stock outstanding. Upon
the written or oral request of a Holder, the Company shall within two Trading Days confirm orally
and in writing to such Holder the number of shares of Common Stock then outstanding. In any case,
the number of outstanding shares of Common Stock shall be determined after giving effect to the
conversion or exercise of securities of the Company, including this Warrant, by such Holder or its
affiliates since the date as of which such number of outstanding shares of Common Stock was
reported. The provisions of this Section 2(d) may be waived by such Holder, at the election of
such Holder, upon not less than 61 days’ prior notice to the Company, and the provisions of this
Section 2(d) shall continue to apply until such 61st day (or such later date, as determined by such
Holder, as may be specified in such notice of waiver).

                    (ii) Trading Market Restrictions. If the Company has not obtained Shareholder
Approval (as defined below) if required by the applicable rules and regulations of the Trading
Market (or any successor entity), then the Company may not issue upon exercise of this Warrant a
number of shares of Common Stock, which, when aggregated with any shares of Common Stock issued (A)
as payment of interest on the Note issued pursuant to the Purchase Agreement, and (B) upon prior
exercise of this or any other Warrant issued pursuant to the Purchase Agreement, would exceed
19.999% of the number of shares of Common Stock outstanding on the Trading Day immediately
preceding the Closing Date (such number of shares, the “Issuable Maximum”). If on any
attempted exercise of this Warrant, the issuance of Warrant Shares would exceed the Issuable
Maximum and the Company shall not have previously obtained the vote of shareholders (the
“Shareholder Approval”), if any, as may be required by the applicable rules and regulations
of the Nasdaq National Market (or any successor entity) to approve the issuance of shares of Common
Stock in excess of the Issuable Maximum pursuant to the terms hereof, then the
Company shall issue to the Holder requesting a Warrant exercise such number of Warrant Shares
as may be issued below the Issuable Maximum and, with respect to the remainder of the aggregate
number of Warrant Shares, this Warrant shall not be exercisable until and unless Shareholder
Approval has been obtained.

          (e) Mechanics of Exercise.

                    (i) Authorization of Warrant Shares. The Company covenants that all Warrant Shares
which may be issued upon the exercise of the purchase rights represented by this Warrant will, upon
exercise of the purchase rights represented by this Warrant, be duly authorized, validly issued,
fully paid and nonassessable and free from all taxes, liens and charges

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in respect of the issue
thereof (other than taxes in respect of any transfer occurring contemporaneously with such issue).

                    (ii) Delivery of Certificates Upon Exercise. Certificates for shares purchased
hereunder shall be transmitted by the transfer agent of the Company to the Holder by crediting the
account of the Holder’s prime broker with the Depository Trust Company through its Deposit
Withdrawal Agent Commission (“DWAC”) system if the Company is a participant in such system,
and otherwise by physical delivery to the address specified by the Holder in the Notice of Exercise
within three Trading Days from the delivery to the Company of the Notice of Exercise Form,
surrender of this Warrant and payment of the aggregate Exercise Price as set forth above
(“Warrant Share Delivery Date”). This Warrant shall be deemed to have been exercised on
the date the Exercise Price is received by the Company. The Warrant Shares shall be deemed to have
been issued, and Holder or any other person so designated to be named therein shall be deemed to
have become a holder of record of such shares for all purposes, as of the date the Warrant has been
exercised by payment to the Company of the Exercise Price and all taxes required to be paid by the
Holder, if any, pursuant to Section 2(e)(vii) prior to the issuance of such shares, have been paid.

                    (iii) Delivery of New Warrants Upon Exercise. If this Warrant shall have been
exercised in part, the Company shall, at the time of delivery of the certificate or certificates
representing Warrant Shares, deliver to Holder a new Warrant evidencing the rights of Holder to
purchase the unpurchased Warrant Shares called for by this Warrant, which new Warrant shall in all
other respects be identical with this Warrant.

                    (iv) Rescission Rights. If the Company fails to cause its transfer agent to transmit
to the Holder a certificate or certificates representing the Warrant Shares pursuant to this
Section 2(e)(iv) by the Warrant Share Delivery Date, then the Holder will have the right to rescind
such exercise.

                    (v) Compensation for Buy-In on Failure to Timely Deliver Certificates Upon Exercise.
In addition to any other rights available to the Holder, if the Company fails to cause its transfer
agent to transmit to the Holder a certificate or certificates representing the Warrant Shares
pursuant to an exercise on or before the Warrant Share Delivery Date, and if after such date the
Holder is required by its broker to purchase (in an open market transaction or otherwise) shares of
Common Stock to deliver in satisfaction of a sale by the Holder of the Warrant Shares which the
Holder anticipated receiving upon such exercise (a “Buy-In”), then the Company shall (1)
pay in cash to the Holder the amount by which (x) the Holder’s total purchase price (including
brokerage commissions, if any) for the shares of Common Stock so purchased exceeds (y) the amount
obtained by multiplying (A) the number of Warrant Shares that the Company was required to deliver
to the Holder in connection with the exercise at issue times (B) the price at which the sell order
giving rise to such purchase obligation was executed, and (2) at the option of the Holder, either
reinstate the portion of the Warrant and equivalent number of Warrant Shares for which such
exercise was not honored or deliver to the Holder the number of shares of Common Stock that would
have been issued had the Company timely complied with its exercise and delivery obligations
hereunder. For example, if the Holder purchases Common Stock having a total purchase price of
$11,000 to cover a Buy-In with respect to an attempted exercise of shares of Common Stock with an
aggregate sale price giving rise to such purchase

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obligation of $10,000, under clause (1) of the
immediately preceding sentence the Company shall be required to pay the Holder $1,000. The Holder
shall provide the Company written notice indicating the amounts payable to the Holder in respect of
the Buy-In, together with applicable confirmations and other evidence reasonably requested by the
Company. Nothing herein shall limit a Holder’s right to pursue any other remedies available to it
hereunder, at law or in equity including, without limitation, a decree of specific performance or
injunctive relief with respect to the Company’s failure to timely deliver certificates representing
shares of Common Stock upon exercise of the Warrant as required pursuant to the terms hereof.

                    (vi) No Fractional Shares or Scrip. No fractional shares or scrip representing
fractional shares shall be issued upon the exercise of this Warrant. As to any fraction of a share
which Holder would otherwise be entitled to purchase upon such exercise, the Company shall pay a
cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by
the Exercise Price.

                    (vii) Charges, Taxes and Expenses. Issuance of certificates for Warrant Shares shall
be made without charge to the Holder for any issue or transfer tax or other incidental expense in
respect of the issuance of such certificate, all of which taxes and expenses shall be paid by the
Company, and such certificates shall be issued in the name of the Holder or in such name or names
as may be directed by the Holder; provided, however, that in the event certificates
for Warrant Shares are to be issued in a name other than the name of the Holder, this Warrant when
surrendered for exercise shall be accompanied by the Assignment Form attached hereto duly executed
by the Holder; and the Company may require, as a condition thereto, the payment of a sum sufficient
to reimburse it for any transfer tax incidental thereto.

                    (viii) Closing of Books. The Company will not close its stockholder books or records
in any manner which prevents the timely exercise of this Warrant, pursuant to the terms hereof.

     Section 3. Certain Adjustments.

          (a) Stock Dividends and Splits. If the Company, at any time while this Warrant is
outstanding: (A) pays a stock dividend or otherwise make a distribution or distributions on shares
of its Common Stock or any other equity or equity equivalent securities payable in shares of Common
Stock (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the
Company pursuant to this Warrant), (B) subdivides outstanding shares of Common Stock into a larger
number of shares, (C) combines (including by way of reverse stock split) outstanding shares of
Common Stock into a smaller number of shares, or (D) issues by reclassification of shares of the
Common Stock any shares of capital stock of the Company, then in each case the Exercise Price shall
be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock
(excluding treasury shares, if any) outstanding immediately before such event and of which the
denominator shall be the number of shares of Common Stock outstanding immediately after such event
and the number of shares issuable upon exercise of this Warrant shall be proportionately adjusted.
Any adjustment made pursuant to this Section 3(a) shall become effective immediately after the
record date for the determination of stockholders entitled to receive such dividend or distribution
and shall become

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effective immediately after the effective date in the case of a subdivision,
combination or re classification.

          (b) Pro Rata Distributions. If the Company, at any time prior to the Termination
Date, shall distribute to all holders of Common Stock (and not to Holders of the Warrants)
evidences of its indebtedness or assets (including cash and cash dividends) or rights or warrants
to subscribe for or purchase any security other than the Common Stock (which shall be subject to
Section 3(b)), then in each such case the Exercise Price shall be adjusted by multiplying the
Exercise Price in effect immediately prior to the record date fixed for determination of
stockholders entitled to receive such distribution by a fraction of which the denominator shall be
the VWAP determined as of the record date mentioned above, and of which the numerator shall be such
VWAP on such record date less the then per share fair market value at such record date of the
portion of such assets or evidence of indebtedness so distributed applicable to one outstanding
share of the Common Stock as determined by the Board of Directors in good faith. In either case
the adjustments shall be described in a statement provided to the Holder of the portion of assets
or evidences of indebtedness so distributed or such subscription rights applicable to one share of
Common Stock. Such adjustment shall be made whenever any such distribution is made and shall
become effective immediately after the record date mentioned above.

          (c) Fundamental Transaction. If, at any time while this Warrant is outstanding, (i) the Company effects any merger or
consolidation of the Company with or into another Person (other than the contemplated merger among
the Company, the Holder and BRMC Corporation), (ii) the Company effects any sale of all or
substantially all of its assets in one or a series of related transactions, (iii) any tender offer
or exchange offer (whether by the Company or another Person) is completed pursuant to which holders
of Common Stock are permitted to tender or exchange their shares for other securities, cash or
property, or (iv) the Company effects any reclassification of the Common Stock or any compulsory
share exchange pursuant to which the Common Stock is effectively converted into or exchanged for
other securities, cash or property (in any such case, a “Fundamental Transaction”), then,
upon any subsequent exercise of this Warrant, the Holder shall have the right to receive, for each
Warrant Share that would have been issuable upon such exercise immediately prior to the occurrence
of such Fundamental Transaction, at the option of the Holder, (1) upon exercise of this Warrant,
the number of shares of Common Stock of the successor or acquiring corporation or of the Company,
if it is the surviving corporation, and any additional consideration (the “Alternate
Consideration”) receivable upon or as a result of such reorganization, reclassification,
merger, consolidation or disposition of assets by a Holder of the number of shares of Common Stock
for which this Warrant is exercisable immediately prior to such event, or (2) if the Company is
acquired in an all cash transaction, cash equal to the value of this Warrant as determined in
accordance with the Black-Scholes option pricing formula. For purposes of any such exercise, the
determination of the Exercise Price shall be appropriately adjusted to apply to such Alternate
Consideration based on the amount of Alternate Consideration issuable in respect of one share of
Common Stock in such Fundamental Transaction, and the Company shall apportion the Exercise Price
among the Alternate Consideration in a reasonable manner reflecting the relative value of any
different components of the Alternate Consideration. If holders of Common Stock are given any
choice as to the securities, cash or property to be received in a Fundamental Transaction, then the
Holder shall be given the same choice as to the Alternate Consideration it receives upon any
exercise of

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this Warrant following such Fundamental Transaction. To the extent necessary to
effectuate the foregoing provisions, any successor to the Company or surviving entity in such
Fundamental Transaction shall issue to the Holder a new warrant consistent with the foregoing
provisions and evidencing the Holder’s right to exercise such warrant into Alternate Consideration.
The terms of any agreement pursuant to which a Fundamental Transaction is effected shall include
terms requiring any such successor or surviving entity to comply with the provisions of this
Section 3(d) and insuring that this Warrant (or any such replacement security) will be similarly
adjusted upon any subsequent transaction analogous to a Fundamental Transaction.

          (d) Calculations. All calculations under this Section 3 shall be made to the nearest
cent or the nearest 1/100th of a share, as the case may be. For purposes of this Section 3, the
number of shares of Common Stock deemed to be issued and outstanding as of a given date shall be
the sum of the number of shares of Common Stock (excluding treasury shares, if any) issued and
outstanding.

          (e) Voluntary Adjustment By Company. The Company may at any time during the term of this Warrant reduce the then current
Exercise Price to any amount and for any period of time deemed appropriate by the Board of
Directors of the Company.

          (f) Notice to Holders.

                    (i) Adjustment to Exercise Price. Whenever the Exercise Price is adjusted pursuant to
this Section 3, the Company shall promptly mail to each Holder a notice setting forth the Exercise
Price after such adjustment and setting forth a brief statement of the facts requiring such
adjustment.

                    (ii) Notice to Allow Exercise by Holder. If (A) the Company shall declare a dividend
(or any other distribution) on the Common Stock; (B) the Company shall declare a special
nonrecurring cash dividend on or a redemption of the Common Stock; (C) the Company shall authorize
the granting to all holders of the Common Stock rights or warrants to subscribe for or purchase any
shares of capital stock of any class or of any rights; (D) the approval of any stockholders of the
Company shall be required in connection with any reclassification of the Common Stock, any
consolidation or merger to which the Company is a party, any sale or transfer of all or
substantially all of the assets of the Company, of any compulsory share exchange whereby the Common
Stock is converted into other securities, cash or property; or (E) the Company shall authorize the
voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Company;
then, in each case, the Company shall cause to be mailed to the Holder at its last address as it
shall appear upon the Warrant Register of the Company, at least 20 calendar days prior to the
applicable record or effective date hereinafter specified, a notice stating (1) the date on which a
record is to be taken for the purpose of such dividend, distribution, redemption, rights or
warrants, or if a record is not to be taken, the date as of which the holders of the Common Stock
of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be
determined or (2) the date on which such reclassification, consolidation, merger, sale, transfer or
share exchange is expected to become effective or close, and the date as of which it is expected
that holders of the Common Stock of record shall be entitled to exchange their shares of the Common
Stock for securities, cash or other property deliverable upon such reclassification, consolidation,
merger, sale, transfer or

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share exchange; provided, that the failure to mail such notice or
any defect therein or in the mailing thereof shall not affect the validity of the corporate action
required to be specified in such notice. The Holder is entitled to exercise this Warrant during
the 20-day period commencing on the date of such notice to the effective date of the event
triggering such notice.

     Section 4. Transfer of Warrant.

          (a) Transferability. Subject to compliance with any applicable securities laws and
the conditions set forth in Sections 5(a) and 4(d) hereof and to the provisions of Section 4.1 of
the Purchase Agreement, this Warrant and all rights hereunder are transferable, in whole or in part, upon
surrender of this Warrant at the principal office of the Company, together with a written
assignment of this Warrant substantially in the form attached hereto duly executed by the Holder or
its agent or attorney and funds sufficient to pay any transfer taxes payable upon the making of
such transfer. Upon such surrender and, if required, such payment, the Company shall execute and
deliver a new Warrant or Warrants in the name of the assignee or assignees and in the denomination
or denominations specified in such instrument of assignment, and shall issue to the assignor a new
Warrant evidencing the portion of this Warrant not so assigned, and this Warrant shall promptly be
cancelled. A Warrant, if properly assigned, may be exercised by a new holder for the purchase of
Warrant Shares without having a new Warrant issued.

          (b) New Warrants. This Warrant may be divided or combined with other Warrants upon
presentation hereof at the aforesaid office of the Company, together with a written notice
specifying the names and denominations in which new Warrants are to be issued, signed by the Holder
or its agent or attorney. Subject to compliance with Section 4(a), as to any transfer which may be
involved in such division or combination, the Company shall execute and deliver a new Warrant or
Warrants in exchange for the Warrant or Warrants to be divided or combined in accordance with such
notice.

          (c) Warrant Register. The Company shall register this Warrant, upon records to be
maintained by the Company for that purpose (the “Warrant Register”), in the name of the
record Holder hereof from time to time. The Company may deem and treat the registered Holder of
this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any
distribution to the Holder, and for all other purposes, absent actual notice to the contrary.

          (d) Transfer Restrictions. If, at the time of the surrender of this Warrant in
connection with any transfer of this Warrant, the transfer of this Warrant shall not be registered
pursuant to an effective registration statement under the Securities Act and under applicable state
securities or blue sky laws, the Company may require, as a condition of allowing such transfer (i)
that the Holder or transferee of this Warrant, as the case may be, furnish to the Company a written
opinion of counsel (which opinion shall be in form, substance and scope customary for opinions of
counsel in comparable transactions) to the effect that such transfer may be made without
registration under the Securities Act and under applicable state securities or blue sky laws, (ii)
that the holder or transferee execute and deliver to the Company an investment letter in form and
substance acceptable to the Company, and (iii) that the transferee be an “accredited investor” as
defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7), or (a)(8) promulgated under the Securities Act
or a qualified institutional buyer as defined in Rule 144A(a) under the Securities Act.

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     Section 5. Miscellaneous.

          (a) Title to WarrantPrior to the Termination Date and subject to compliance with applicable laws and Section 4
of this Warrant, this Warrant and all rights hereunder are transferable, in whole or in part, at
the office or agency of the Company by the Holder in person or by duly authorized attorney, upon
surrender of this Warrant together with the Assignment Form annexed hereto properly endorsed. The
transferee shall sign an investment letter in form and substance reasonably satisfactory to the
Company.

          (b) No Rights as Shareholder Until Exercise. This Warrant does not entitle the Holder
to any voting rights or other rights as a shareholder of the Company prior to the exercise hereof.
Upon the surrender of this Warrant and the payment of the aggregate Exercise Price (or by means of
a cashless exercise), the Warrant Shares so purchased shall be and be deemed to be issued to such
Holder as the record owner of such shares as of the close of business on the later of the date of
such surrender or payment.

          (c) Loss, Theft, Destruction or Mutilation of Warrant. The Company covenants that
upon receipt by the Company of evidence reasonably satisfactory to it of the loss, theft,
destruction or mutilation of this Warrant or any stock certificate relating to the Warrant Shares,
and in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to it
(which, in the case of the Warrant, shall not include the posting of any bond), and upon surrender
and cancellation of such Warrant or stock certificate, if mutilated, the Company will make and
deliver a new Warrant or stock certificate of like tenor and dated as of such cancellation, in lieu
of such Warrant or stock certificate.

          (d) Saturdays, Sundays, Holidays, etc. If the last or appointed day for the taking of
any action or the expiration of any right required or granted herein shall be a Saturday, Sunday or
a legal holiday, then such action may be taken or such right may be exercised on the next
succeeding day not a Saturday, Sunday or legal holiday.

          (e) Authorized Shares. The Company covenants that during the period the Warrant is
outstanding, it will reserve from its authorized and unissued Common Stock a sufficient number of
shares to provide for the issuance of the Warrant Shares upon the exercise of any purchase rights
under this Warrant. The Company further covenants that its issuance of this Warrant shall
constitute full authority to its officers who are charged with the duty of executing stock
certificates to execute and issue the necessary certificates for the Warrant Shares upon the
exercise of the purchase rights under this Warrant. The Company will take all such reasonable
action as may be necessary to assure that such Warrant Shares may be issued as provided herein
without violation of any applicable law or regulation, or of any requirements of the Trading Market
upon which the Common Stock may be listed.

                    Except and to the extent as waived or consented to by the Holder, the Company shall not by any
action, including, without limitation, amending its certificate of incorporation or through any
reorganization, transfer of assets, consolidation, merger,
dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid
the observance or performance of any of the terms of this Warrant, but will at all times in good
faith assist in the carrying out of all such terms and in the taking of all such actions as may be

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necessary or appropriate to protect the rights of Holder as set forth in this Warrant against
impairment. Without limiting the generality of the foregoing, the Company will (a) not increase
the par value of any Warrant Shares above the amount payable therefor upon such exercise
immediately prior to such increase in par value, (b) take all such action as may be necessary or
appropriate in order that the Company may validly and legally issue fully paid and nonassessable
Warrant Shares upon the exercise of this Warrant, and (c) use commercially reasonable efforts to
obtain all such authorizations, exemptions or consents from any public regulatory body having
jurisdiction thereof as may be necessary to enable the Company to perform its obligations under
this Warrant.

                    Before taking any action which would result in an adjustment in the number of Warrant Shares
for which this Warrant is exercisable or in the Exercise Price, the Company shall obtain all such
authorizations or exemptions thereof, or consents thereto, as may be necessary from any public
regulatory body or bodies having jurisdiction thereof.

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

          (g) Restrictions. The Holder acknowledges that the Warrant Shares acquired upon the
exercise of this Warrant, if not registered, will have restrictions upon resale imposed by state
and federal securities laws.

          (h) Nonwaiver and Expenses. No course of dealing or any delay or failure to exercise
any right hereunder on the part of Holder shall operate as a waiver of such right or otherwise
prejudice Holder’s rights, powers or remedies, notwithstanding the fact that all rights hereunder
terminate on the Termination Date. If the Company willfully and knowingly fails to comply with any
provision of this Warrant, which results in any material damages to the Holder, the Company shall
pay to Holder such amounts as shall be sufficient to cover any costs and expenses including, but
not limited to, reasonable attorneys’ fees, including those of appellate proceedings, incurred by
Holder in collecting any amounts due pursuant hereto or in otherwise enforcing any of its rights,
powers or remedies hereunder.

          (i) Notices. Any notice, request or other document required or permitted to be given
or delivered to the Holder by the Company shall be delivered in accordance with the notice
provisions of the Purchase Agreement.

          (j) Limitation of Liability. No provision hereof, in the absence of any affirmative
action by Holder to exercise this Warrant or purchase Warrant Shares, and no enumeration herein of
the rights or privileges of Holder, shall give rise to any liability of Holder for the purchase
price of any Common Stock or as a stockholder of the Company, whether such liability is asserted by
the Company or by creditors of the Company.

          (k) Remedies. Holder, in addition to being entitled to exercise all rights granted by
law, including recovery of damages, will be entitled to specific performance of its rights under
this Warrant. The Company agrees that monetary damages would not be adequate compensation for any
loss incurred by reason of a breach by it of the provisions of this Warrant

10

 

and hereby agrees to
waive the defense in any action for specific performance that a remedy at law would be adequate.

          (l) Successors and Assigns. Subject to applicable securities laws, this Warrant and
the rights and obligations evidenced hereby shall inure to the benefit of and be binding upon the
successors of the Company and the successors and permitted assigns of Holder. The provisions of
this Warrant are intended to be for the benefit of all Holders from time to time of this Warrant
and shall be enforceable by any such Holder or holder of Warrant Shares.

          (m) Amendment. This Warrant may be modified or amended or the provisions hereof
waived with the written consent of the Company and the Holder.

          (n) Severability. Wherever possible, each provision of this Warrant shall be
interpreted in such manner as to be effective and valid under applicable law, but if any provision
of this Warrant shall be prohibited by or invalid under applicable law, such provision shall be
ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of
such provisions or the remaining provisions of this Warrant.

          (o) Headings. The headings used in this Warrant are for the convenience of reference
only and shall not, for any purpose, be deemed a part of this Warrant.

     IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its officer
thereunto duly authorized.

Dated: ___________, 2005

	 	 	 	 	 
	 	 	BRILLIAN CORPORATION
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	 	 	Wayne Pratt, VP & CFO

11

 

NOTICE OF EXERCISE

TO: BRILLIAN CORPORATION

                    (1) The undersigned hereby elects to purchase ___Warrant Shares of the Company pursuant
to the terms of the attached Warrant (only if exercised in full), and tenders herewith payment of
the exercise price in full, together with all applicable transfer taxes, if any.

                    (2) Payment shall take the form of (check applicable box):

	 	 	 	[ ] in lawful money of the United States; or
	 
	 	 	 	[ ] the cancellation of such number of Warrant Shares as is necessary, in accordance with the formula set
forth in subsection 2(c), to exercise this Warrant with respect to the maximum number of Warrant Shares purchasable pursuant to the
cashless exercise procedure set forth in subsection 2(c).

                    (3) Please issue a certificate or certificates representing said Warrant Shares in the name of
the undersigned or in such other name as is specified below:

 

The Warrant Shares shall be delivered to the following:

 

 

 

                    (4) Accredited Investor. The undersigned is an “accredited investor” as defined in
Regulation D promulgated under the Securities Act of 1933, as amended.

[SIGNATURE OF HOLDER]

	 	 	 
	Name of Investing Entity:
	 	 
	 

	 	 

	 	 	 
	Signature of Authorized Signatory of Investing Entity:
	 	 
	 

	 	 

	 	 	 
	Name of Authorized Signatory:
	 	 
	 

	 	 

	 	 	 
	Title of Authorized Signatory:
	 	 
	 

	 	 

	 	 	 
	Date:
	 	 
	 

	 	 

 

 

ASSIGNMENT FORM

(To assign the foregoing warrant, execute

this form and supply required information.

Do not use this form to exercise the warrant.)

                    FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced thereby are hereby assigned
to

_______________________________________________ whose address is

_______________________________________________________________.

 

_______________________________________________________________

	 	 	 
	 

	 	Dated: ___, ___

	 	 	 	 	 	 	 
	 

	 	Holder’s Signature:
	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Holder’s Address:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 

	 	 	 
	Signature Guaranteed:
	 	 
	 

	 	 

NOTE: The signature to this Assignment Form must correspond with the name as it appears on the
face of the Warrant, without alteration or enlargement or any change whatsoever, and must be
guaranteed by a bank or trust company. Officers of corporations and those acting in a fiduciary or
other representative capacity should file proper evidence of authority to assign the foregoing
Warrant.exv10w34

 

Exhibit 10.34

NOTE AND WARRANT PURCHASE AGREEMENT

     This Note and Warrant Purchase Agreement (this “Agreement”) is dated as of September
16, 2005 among Brillian Corporation, a Delaware corporation (the “Company”), and Syntax
Groups Corporation, a California corporation (including its successors and assigns, the
“Purchaser”).

     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, Company desires to issue and sell to Purchaser, and Purchaser, desires to
purchase from 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,
Company and Purchaser agree as follows:

ARTICLE I.

DEFINITIONS

     1.1 Definitions. In addition to the terms defined elsewhere in this Agreement: (a) capitalized terms that
are not otherwise defined herein have the meanings given to such terms in the Notes (as defined
herein), and (b) the following terms have the meanings indicated in this Section 1.1:

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

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

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

          “Closing Date” means the Trading Day when all of the Transaction Documents have been
executed and delivered by the parties thereto, and all conditions precedent to (i) the Purchaser’s
obligations to purchase the Note, and (ii) the Company’s obligations to deliver the Securities have
been satisfied or waived.

          “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 exchangeable for, or otherwise entitles the
holder thereof to receive, Common Stock.

          “Company Counsel” means Greenberg Traurig, LLP.

          “Disclosure Schedules” shall have the meaning ascribed to such term in Section 3.1.

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

          “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).

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

          “Material Adverse Effect” shall have the meaning assigned to such term in Section
3.1(b).

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

          “Maximum Rate” shall have the meaning ascribed to such term in Section 5.17.

          “Note” means the multiple advance, non-revolving promissory note in the principal
amount of $3,000,0000 issued by the Company to the Purchaser hereunder, in the form of Exhibit
A.

          “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 4.11.

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

          “Required Minimum” means, as of any date, the maximum aggregate number of shares of
Common Stock then issued or potentially issuable in the future pursuant to the

2

 

Transaction Documents, including any Underlying Shares issuable upon exercise in full of all
Warrants and Underlying Shares issuable as payment of interest on the Note.

          “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” means the Notes, the Warrants, and the Underlying Shares.

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

          “Subsidiary” means any subsidiary of the Company as set forth on Schedule
3.1(a).

          “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 National Market, the American Stock
Exchange, the New York Stock Exchange or the Nasdaq Small Cap Market.

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

          “Underlying Shares” means the shares of Common Stock issuable upon exercise of the
Warrants and issuable in lieu of the cash payment of interest on the Notes.

          “VWAP” means, for any date, the price determined by the first of the following clauses
that applies: (a) if the Common Stock is then listed or quoted on a Trading Market, the daily
volume weighted average price of the Common Stock for such date (or the nearest preceding date) on
the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg
Financial L.P. (based on a Trading Day from 9:30 a.m. Eastern Time to 4:02 p.m. Eastern Time); (b)
if the Common Stock is not then listed or quoted on a Trading Market and if prices for the Common
Stock are then quoted on the OTC Bulletin Board, the volume weighted average price of the Common
Stock for such date (or the nearest preceding date) on the OTC Bulletin Board; (c) if the Common
Stock is not then listed or quoted on the OTC Bulletin Board and if prices for the Common Stock are
then reported in the “Pink Sheets” published by the 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 (c) in all other cases, the fair market value of a share of Common
Stock as determined by an independent appraiser selected in good faith by the Purchaser and
reasonably acceptable to the Company.

          “Warrants” means collectively the Common Stock purchase warrants, in the form of
Exhibit B delivered to the Purchaser at the Closing in accordance with Section 2.2(a) hereof,

3

 

which Warrants shall be exercisable 181 days following the date thereof and have a term of
exercise equal to five years.

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, the Company agrees to sell, and
Purchaser agrees to purchase, the Note. Purchaser shall deliver to the Company via wire transfer
or a certified check immediately available funds equal to $750,000, representing the first advance
under the Note, and the Company shall deliver to Purchaser the Note and Warrants as determined
pursuant to Section 2.2(a). 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 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) the Note registered in the name of Purchaser; and

               (iii) a Warrant registered in the name of Purchaser to purchase up to 37,500 shares of Common
Stock, with an exercise price equal to the VWAP on the Closing Date plus $0.13, subject to
adjustment as provided therein.

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

               (i) this Agreement duly executed by Purchaser; and

               (ii) $750,000 by wire transfer to the account as specified in writing by the Company,
representing the first advance under the Note.

          (c) After the Closing Date, pursuant to the terms of the Note, Purchaser will make nine
additional advances of $250,000 each on the dates specified in the Note. Upon receipt of each
additional advance, the Company will issue a Warrant registered in the name of Purchaser to
purchase up to 12,500 shares of Common Stock, with an exercise price equal to the VWAP on the date
the additional advance is made plus $0.13, subject to adjustment as provided therein.

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

4

 

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

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

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

          (b) The obligations of the Purchaser 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 under the corresponding section of the disclosure schedules delivered
to the Purchaser 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 Purchaser.

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

          (b) Organization and Qualification. 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. Neither the
Company nor any Subsidiary is in violation or default of any of the provisions of its respective
certificate or articles of incorporation, bylaws or other organizational or charter documents.
Each of the Company and the Subsidiaries is duly

5

 

qualified to conduct business and is in good
standing as a foreign corporation or other entity in each jurisdiction in which the nature of the
business conducted or property owned by it makes such qualification necessary, except where the
failure to be so qualified or in good standing, as the case may be, could not have or reasonably be
expected to result in (i) a material adverse effect on the legality, validity or enforceability of
any Transaction Document, (ii) a material adverse effect on the results of operations, assets,
business, prospects or financial condition of the Company and the Subsidiaries, taken as a whole,
or (iii) a material adverse effect on the Company’s ability to perform in any material respect on a
timely basis its obligations under any Transaction Document (any of (i), (ii) or (iii), a
“Material Adverse Effect”) and no Proceeding has been instituted in any such jurisdiction
revoking, limiting or curtailing or seeking to revoke, limit or curtail such power and authority or
qualification.

          (c) Authorization; Enforcement. The Company has the requisite corporate power and authority to enter into and to consummate
the transactions contemplated by each of the Transaction Documents and otherwise to carry out its
obligations thereunder. The execution and delivery of each of the Transaction Documents by the
Company and the consummation by it of the transactions contemplated thereby have been duly
authorized by all necessary action on the part of the Company and no further action is required by
the Company in connection therewith other than in connection with the Required Approvals. Each
Transaction Document has been (or upon delivery will have been) duly executed by the Company and,
when delivered in accordance with the terms hereof, will constitute the valid and binding
obligation of the Company enforceable against the Company in accordance with its terms except (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 and the
consummation by the Company of the other transactions contemplated thereby do not and will not: (i)
conflict with or violate any provision of the Company’s or any Subsidiary’s certificate or articles
of incorporation, bylaws or other organizational or charter documents, or (ii) conflict with, or
constitute a default (or an event that with notice or lapse of time or both would become a default)
under, result in the creation of any Lien upon any of the properties or assets of the Company or
any Subsidiary, or give to others any rights of termination, amendment, acceleration or
cancellation (with or without notice, lapse of time or both) of, any agreement, credit facility,
debt or other instrument (evidencing a Company or Subsidiary debt or otherwise) or other
understanding to which the Company or any Subsidiary is a party or by which any property or asset of the Company or any Subsidiary is bound or
affected, or (iii) subject to the Required Approvals, conflict with or result in a violation of any
law, rule, regulation, order, judgment, injunction, decree or other restriction of any court or
governmental authority to which the Company or a Subsidiary is subject (including federal and state
securities laws and regulations), or by which any property or asset of the Company or a Subsidiary
is bound or affected; except in the case of each of clauses (ii) and (iii), such as could not have
or reasonably be expected to result in a Material Adverse Effect.

          (e) Filings, Consents and Approvals. The Company is not required to obtain any consent, waiver, authorization or order of, give
any notice to, or make any filing or registration with, any court or other federal, state, local or
other governmental authority or other

6

 

Person in connection with the execution, delivery and
performance by the Company of the Transaction Documents, other than (i) filings required pursuant
to Section 4.6, (ii) the filing of Form D with the Commission and such filings as are required to
be made under applicable state securities laws, and (iii) any required consents of the Company’s
existing lenders (collectively, the “Required Approvals”).

          (f) Issuance of the Securities. The Securities 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 Underlying Shares, when issued in accordance with the terms of
the Transaction Documents, will be validly issued, fully paid and nonassessable, free and clear of
all Liens imposed by the Company. The Company has reserved from its duly authorized capital stock
a number of shares of Common Stock for issuance of the Underlying Shares at least equal to the
Required Minimum on the date hereof.

          (g) Capitalization. The capitalization of the Company is as set forth on Schedule 3.1(g). The Company
has not issued any capital stock since its most recently filed periodic report under the Exchange
Act, other than pursuant to the exercise of employee stock options under the Company’s stock option
plans, the issuance of shares of Common Stock to employees pursuant to the Company’s employee stock
purchase plan and pursuant to the conversion or exercise of outstanding Common Stock Equivalents.
No Person has any right of first refusal, preemptive right, right of participation, or any similar
right to participate in the transactions contemplated by the Transaction Documents. Except as a
result of the purchase and sale of the Securities, there are no outstanding options, warrants,
script rights to subscribe to, calls or commitments of any character whatsoever relating to, or
securities, rights or obligations convertible into or exchangeable for, or giving any Person any
right to subscribe for or acquire, any shares of Common Stock, or contracts, commitments,
understandings or arrangements by which the Company or any Subsidiary is or may become bound to
issue additional shares of Common Stock or Common Stock Equivalents. The issuance and sale of the
Securities will not obligate the Company to issue shares of Common Stock or other securities to any
Person (other than Purchaser) 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 Securities. There
are no stockholders agreements, voting agreements or other similar agreements with respect to the
Company’s capital stock to which the Company is a party or, to the knowledge of the Company,
between or among any of the Company’s stockholders.

          (h) SEC Reports; Financial Statements. The Company has filed all reports, 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

7

 

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 light of the circumstances under which they
were made, not misleading. The financial statements of the Company included in the SEC Reports
comply in all material respects with applicable accounting requirements and the rules and
regulations of the Commission with respect thereto as in effect at the time of filing. Such
financial statements have been prepared in accordance with United States generally accepted
accounting principles applied on a consistent basis during the periods involved (“GAAP”),
except as may be otherwise specified in such financial statements or the notes thereto and except
that unaudited financial statements may not contain all footnotes required by GAAP, and fairly
present in all material respects the financial position of the Company and its consolidated
subsidiaries as of and for the dates thereof and the results of operations and cash flows for the
periods then ended, subject, in the case of unaudited statements, to normal, immaterial, year-end
audit adjustments.

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

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

8

 

stop order
or other order suspending the effectiveness of any registration statement filed by the Company or
any Subsidiary under the Exchange Act or the Securities Act.

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

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

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

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

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

9

 

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

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

          (r) Sarbanes-Oxley; 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 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 Company’s knowledge, in other factors that could significantly affect the
Company’s internal controls.

10

 

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

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

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

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

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

          (x) Disclosure. The Company confirms that neither it nor any other Person acting on its behalf has provided
any of Purchaser or its agents or counsel with any information that constitutes or might constitute
material, nonpublic information. The Company understands and confirms that Purchaser will rely on
the foregoing representations and covenants in effecting transactions in securities of the Company.
All disclosure provided to Purchaser 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

11

 

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 Purchaser makes or has made no representations or warranties with respect to the transactions
contemplated hereby other than those specifically set forth in Section 3.2 hereof.

          (y) No Integrated Offering. Assuming the accuracy of Purchaser’s representations and warranties set forth in Section
3.2, neither the Company, nor any of its Affiliates, nor any Person acting on its or their behalf
has, directly or indirectly, made any offers or sales of any security or solicited any offers to
buy any security, under circumstances that would cause this offering of the Securities to be
integrated with prior offerings by the Company for purposes of the Securities Act or any applicable
shareholder approval provisions, including, without limitation, under the rules and regulations of
any Trading Market on which any of the securities of the Company are listed or designated.

          (z) Solvency. Based on the financial condition of the Company as of the Closing Date after giving effect
to the receipt by the Company of the proceeds from the sale of the Securities hereunder, (i) the
Company’s fair saleable value of its assets exceeds the amount that will be required to be paid on
or in respect of the Company’s existing debts and other liabilities (including known contingent
liabilities) as they mature; (ii) the Company’s assets do not constitute unreasonably small capital
to carry on its business for the current fiscal year as now conducted and as proposed to be
conducted including its capital needs taking into account the particular capital requirements of
the business conducted by the Company, and projected capital requirements and capital availability
thereof; and (iii) the current cash flow of the Company, together with the proceeds the Company
would receive, were it to liquidate all of its assets, after taking into account all anticipated
uses of the cash, would be sufficient to pay all amounts on or in respect of its debt when such
amounts are required to be paid. The Company does not intend to incur debts beyond its ability to
pay such debts as they mature (taking into account the timing and amounts of cash to be payable on
or in respect of its debt). The Company has no knowledge of any facts or circumstances which lead
it to believe that it will file for reorganization or liquidation under the bankruptcy or
reorganization laws of any jurisdiction within one year from the Closing Date. The SEC Reports set
forth as of the dates thereof all outstanding secured and unsecured Indebtedness of the Company or
any Subsidiary, or for which the Company or any Subsidiary has commitments. For the purposes of
this Agreement, “Indebtedness” shall mean (a) any liabilities for borrowed money or amounts
owed in excess of $50,000 (other than trade accounts payable incurred in the ordinary course of
business), (b) all guaranties, endorsements and other contingent obligations in respect of
Indebtedness of others, whether or not the same are or should be reflected in the Company’s balance
sheet (or the notes thereto), except guaranties by endorsement of negotiable instruments for
deposit or collection or similar transactions in the ordinary course of business; and (c) the
present value of any lease payments in excess of $50,000 due under leases required to be
capitalized in accordance with GAAP. Neither the Company nor any Subsidiary is in default with
respect to any Indebtedness.

          (aa) Tax Status. Except for matters that would not, individually or in the aggregate, have or reasonably be
expected to result in a Material Adverse Effect, the Company and each Subsidiary has filed all
necessary federal, state and foreign income and franchise tax

12

 

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.

          (bb) No General Solicitation. Neither the Company nor any person acting on behalf of the Company has offered or sold any
of the Securities by any form of general solicitation or general advertising. The Company has
offered the Securities for sale only to Purchaser.

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

          (dd) Accountants. The Company’s accountants are set forth on Schedule 3.1(dd) of the Disclosure
Schedule. To the Company’s knowledge, such accountants, who expressed their opinion with respect
to the financial statements included in the Company’s Annual Report on Form 10-K for the year ended
December 31, 2004 are a registered public accounting firm as required by the Securities Act.

          (ee) Seniority. As of the Closing Date, no indebtedness or other equity of the Company is senior to the
Debentures in right of payment, whether with respect to interest or upon liquidation or
dissolution, or otherwise, other than indebtedness secured by purchase money security interests
(which is senior only as to underlying assets covered thereby), capital lease obligations (which is
senior only as to the property covered thereby), and as disclosed in the SEC Reports.

          (ff) No Disagreements with Accountants and Lawyers. There are no disagreements of any kind presently existing, or reasonably anticipated by the
Company to arise, between the accountants and lawyers formerly or presently employed by the Company
and the Company is current with respect to any fees owed to its accountants and lawyers.

          (gg) Acknowledgment Regarding Purchaser’s Purchase of Securities. The Company acknowledges and agrees that Purchaser is acting solely in the capacity of an
arm’s length purchaser with respect to the Transaction Documents and the transactions contemplated
hereby. The Company further acknowledges that Purchaser is not acting as a financial advisor or
fiduciary of the Company (or in any similar capacity) with respect to this Agreement and the
transactions contemplated hereby and any advice given by Purchaser or any of its representatives or
agents in connection with this Agreement and the transactions contemplated hereby is merely
incidental to Purchaser’s purchase of the Securities. The Company further represents to Purchaser
that the Company’s decision to enter into this Agreement has been based solely on the

13

 

independent evaluation of the transactions contemplated hereby by the Company and its representatives.

          (hh) Manipulation of Price. The Company has not, and to its knowledge no one acting on its behalf has, (i) taken,
directly or indirectly, any action designed to cause or to result in the stabilization or
manipulation of the price of any security of the Company to facilitate the sale or resale of any of
the Securities, (ii) sold, bid for, purchased, or, paid any compensation for soliciting purchases
of, any of the Securities (other than for the placement agent’s placement of the Securities), or
(iii) paid or agreed to pay to any person any compensation for soliciting another to purchase any
other securities of the Company.

     3.2 Representations and Warranties of Purchaser. Purchaser hereby represents and warrants as of the date hereof and as of the Closing Date
to the Company as follows:

          (a) Organization; Authority. Purchaser is an entity duly organized, validly existing and in good standing under the laws
of the jurisdiction of its organization with full right, corporate or partnership power and
authority to enter into and to consummate the transactions contemplated by the Transaction
Documents and otherwise to carry out its obligations thereunder. The execution, delivery and
performance by Purchaser of the transactions contemplated by this Agreement have been duly
authorized by all necessary corporate or similar action on the part of Purchaser. Each Transaction
Document to which it is a party has been duly executed by Purchaser, and when delivered by
Purchaser in accordance with the terms hereof, will constitute a valid and legally binding
obligation of 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. Purchaser understands that the Securities are “restricted securities” and have not been
registered under the Securities Act or any applicable state securities law and is acquiring the
Securities as principal for its own account and not with a view to or for distributing or reselling such Securities 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 Securities 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 Securities (this
representation and warranty not limiting Purchaser’s right to sell the Securities in compliance
with applicable federal and state securities laws) in violation of the Securities Act or any
applicable state securities law. Purchaser is acquiring the Securities hereunder in the ordinary
course of its business. Purchaser does not have any agreement or understanding, directly or
indirectly, with any Person to distribute any of the Securities.

          (c) Purchaser Status. At the time Purchaser was offered the Securities, it was, and at the date hereof it is, and
on each date on which it exercises any Warrants, it will be either: (i) an “accredited investor” as
defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7) or (a)(8) under the Securities Act or (ii) a
“qualified institutional buyer” as defined in Rule 144A(a) under the

14

 

Securities Act. Purchaser is
not required to be registered as a broker-dealer under Section 15 of the Exchange Act.

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

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

          (f) Confidentiality Prior To The Date Hereof. Other than to other Persons party to this Agreement, Purchaser has maintained the
confidentiality of all disclosures made to it in connection with this transaction (including the
existence and terms of this transaction).

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

ARTICLE IV.

OTHER AGREEMENTS OF THE PARTIES

     4.1 Transfer Restrictions.

          (a) The Securities may only be disposed of in compliance with state and federal securities
laws. In connection with any transfer of Securities other than pursuant to an effective
registration statement or Rule 144, to the Company or to an Affiliate of 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
Securities under the Securities Act. As a condition of transfer, any such transferee shall agree
in writing to be bound by the terms of this Agreement and shall have the rights of Purchaser under
this Agreement.

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

NEITHER THESE SECURITIES NOR THE SECURITIES INTO WHICH THESE
SECURITIES ARE CONVERTIBLE HAVE BEEN REGISTERED WITH THE SECURITIES
AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN
RELIANCE UPON AN

15

 

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 AND THE SECURITIES ISSUABLE UPON EXERCISE OF THESE
SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN
ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.

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

          (c) Certificates evidencing the Underlying Shares shall not contain any legend (including the
legend set forth in Section 4.1(b) hereof): (i) following any sale of such Underlying Shares
pursuant to Rule 144, or (ii) if such Underlying Shares are eligible for sale under Rule 144(k), or
(iii) if such legend is not required under applicable requirements of the Securities Act (including
judicial interpretations and pronouncements issued by the staff of the Commission). The Company
shall cause its counsel to issue a legal opinion to the Company’s transfer agent promptly after the
Effective Date if required by the Company’s transfer agent to effect the removal of the legend
hereunder. If all or any portion of a Warrant is exercised at a time when the Underlying Shares
may be sold under Rule 144(k) or if such legend is not otherwise required under applicable
requirements of the Securities Act (including judicial interpretations thereof), then such
Underlying Shares shall be issued free of all legends. The Company agrees that following the
Effective Date or at such time as such legend is no longer required under this Section 4.1(c), it
will, no later than three Trading Days following the delivery by a Purchaser to the Company or the
Company’s transfer agent of a certificate representing Underlying Shares, issued with a
restrictive legend (such third Trading Day, the “Legend Removal Date”), deliver or cause to
be delivered to Purchaser a certificate representing such

16

 

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 Securities subject to legend removal hereunder shall be transmitted by
the transfer agent of the Company to Purchaser by crediting the account of Purchaser’s prime broker
with the Depository Trust Company System.

          (d) In addition to Purchaser’s other available remedies, the Company shall pay to Purchaser,
in cash, as partial liquidated damages and not as a penalty, for each $1,000 of Underlying Shares
(based on the VWAP of the Common Stock on the date such Securities are submitted to the Company’s
transfer agent) delivered for removal of the restrictive legend and subject to Section 4.1(c), $10
per Trading Day (increasing to $20 per Trading Day 5 Trading Days after such damages have begun to
accrue) for each Trading Day after the Legend Removal Date until such certificate is delivered
without a legend. Nothing herein shall limit Purchaser’s right to pursue actual damages for the
Company’s failure to deliver certificates representing any Securities as required by the
Transaction Documents, and Purchaser shall have the right to pursue all remedies available to it at
law or in equity including, without limitation, a decree of specific performance and/or injunctive
relief.

          (e) Purchaser agrees that the removal of the restrictive legend from certificates representing
Securities as set forth in this Section 4.1 is predicated upon the Company’s reliance that
Purchaser will sell any Securities pursuant to either the registration requirements of the
Securities Act, including any applicable prospectus delivery requirements, or pursuant to Rule 144,
and if Purchaser wishes to utilize any other exemption under the Securities Act to sell any Securities, such Securities shall be redelivered to the Company’s transfer
agent for re-legending.

     4.2 Acknowledgment of Dilution. The Company acknowledges that the issuance of the Securities may result in dilution of the
outstanding shares of Common Stock, which dilution may be substantial under certain market
conditions. The Company further acknowledges that its obligations under the Transaction Documents,
including without limitation its obligation to issue the Underlying Shares pursuant to the
Transaction Documents, are unconditional and absolute and not subject to any right of set off,
counterclaim, delay or reduction, regardless of the effect of any such dilution or any claim the
Company may have against Purchaser and regardless of the dilutive effect that such issuance may
have on the ownership of the other stockholders of the Company.

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

17

 

     4.4 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 Securities in a manner that would require the registration under the
Securities Act of the sale of the Securities to Purchaser or that would be integrated with the
offer or sale of the Securities for purposes of the rules and regulations of any Trading Market.

     4.5 Exercise Procedures. The form of Notice of Exercise included in the Warrants sets forth the totality of the
procedures required of Purchaser in order to exercise the Warrants. No additional legal opinion or
other information or instructions shall be required of Purchaser to exercise their Warrants. The
Company shall honor exercises of the Warrants and shall deliver Underlying Shares in accordance
with the terms, conditions and time periods set forth in the Transaction Documents.

     4.6 Securities Laws Disclosure; Publicity. The Company shall file a Current Report on Form 8-K within the time required by such form,
which report shall attach the Transaction Documents thereto. The Company and Purchaser shall
consult with each other in issuing any press releases with respect to the transactions contemplated hereby, and neither Company nor Purchaser shall issue any such press release or
otherwise make any such public statement without the prior consent of the Company, with respect to
any press release of Purchaser, or without the prior consent of Purchaser, with respect to any
press release of the Company, which consent shall not unreasonably be withheld, except if such
disclosure is required by law, in which case the disclosing party shall promptly provide the other
party with prior notice of such public statement or communication.

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

     4.8 Non-Public Information. The Company covenants and agrees that neither it nor any other Person acting on its behalf
will provide Purchaser or its agents or counsel with any information that the Company believes
constitutes material non-public information, unless prior thereto Purchaser shall have executed a
written agreement regarding the confidentiality and use of such information. The Company
understands and confirms that Purchaser shall be relying on the foregoing representations in
effecting transactions in securities of the Company. The Company further acknowledges and agrees
that all non-public information provided to Purchaser pursuant to that certain Non Disclosure
Agreement dated ___, 2005 has either been publicly disclosed or, through the passage of time, no
longer constitutes material information respecting the Company’s business.

     4.9 Use of Proceeds. Except as set forth on Schedule 4.9 attached hereto, the Company shall use the net
proceeds from the sale of the Securities hereunder for the continued development of its “light
engine” and for general operations, and not for the satisfaction of any

18

 

portion of the Company’s
debt (other than payment of trade payables in the ordinary course of the Company’s business and
prior practices), to redeem any Common Stock or Common Stock Equivalents or to settle any
outstanding litigation.

     4.10 Reimbursement. If Purchaser becomes involved in any capacity in any Proceeding by or against any Person
who is a stockholder of the Company (except as a result of sales, pledges, margin sales and similar
transactions by Purchaser to or with any current stockholder), solely as a result of Purchaser’s
acquisition of the Securities under this Agreement, the Company will reimburse Purchaser for its
reasonable legal and other expenses (including the cost of any investigation preparation and travel
in connection therewith) incurred in connection therewith, as such expenses are incurred. The
reimbursement obligations of the Company under this paragraph shall be in addition to any liability which the Company may otherwise have, shall extend upon
the same terms and conditions to any Affiliate of Purchaser who is actually named in such action,
proceeding or investigation, and partners, directors, agents, employees and controlling persons (if
any), as the case may be, of Purchaser and its Affiliates, and shall be binding upon and inure to
the benefit of any successors, assigns, heirs and personal representatives of Company, Purchaser
and any of their respective Affiliates. The Company also agrees that none of Purchaser or any of
its Affiliates, partners, directors, agents, employees or controlling persons shall have any
liability to the Company or any Person asserting claims on behalf of or in right of the Company
solely as a result of acquiring the Securities under this Agreement.

     4.11 Indemnification of Purchaser. Subject to the provisions of this Section 4.11, the Company will indemnify and hold
Purchaser and its directors, officers, shareholders, partners, employees and agents (each, a
“Purchaser Party”) harmless from any and all losses, liabilities, obligations, claims,
contingencies, damages, costs and expenses, including all judgments, amounts paid in settlements,
court costs and reasonable attorneys’ fees and costs of investigation that any such Purchaser Party
may suffer or incur as a result of or relating to (a) any breach of any of the representations,
warranties, covenants or agreements made by the Company in this Agreement or in the other
Transaction Documents or (b) any action instituted against a Purchaser or its Affiliates, by any
stockholder of the Company who is not an Affiliate of Purchaser, with respect to any of the
transactions contemplated by the Transaction Documents (unless such action is based upon a breach
of Purchaser’s representation, warranties or covenants under the Transaction Documents or any
agreements or understandings Purchaser may have with any such stockholder or any violations by
Purchaser of state or federal securities laws or any conduct by Purchaser which constitutes fraud,
gross negligence, willful misconduct or malfeasance). If any action shall be brought against any
Purchaser Party in respect of which indemnity may be sought pursuant to this Agreement, such
Purchaser Party shall promptly notify the Company in writing, and the Company shall have the right
to assume the defense thereof with counsel of its own choosing. Any Purchaser Party shall have the
right to employ separate counsel in any such action and participate in the defense thereof, but the
fees and expenses of such counsel shall be at the expense of such Purchaser Party except to the
extent that (i) the employment thereof has been specifically authorized by the Company in writing,
(ii) the Company has failed after a reasonable period of time to assume such defense and to employ
counsel or (iii) in such action there is, in the reasonable opinion of such separate counsel, a
material conflict on any material issue between the position of the Company and the position of
such Purchaser Party. The Company will not be liable to any Purchaser Party under this Agreement
(i) for any settlement by a

19

 

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 Purchaser in this Agreement or in
the other Transaction Documents.

     4.12 Reservation of Securities.

          (a) The Company shall maintain a reserve from its duly authorized shares of Common Stock for
issuance pursuant to the Transaction Documents in such amount as may be required to fulfill its
obligations in full under the Transaction Documents.

          (b) If, on any date, the number of authorized but unissued (and otherwise unreserved) shares
of Common Stock is less than the Required Minimum on such date, then the Board of Directors of the
Company shall use commercially reasonable efforts to amend the Company’s certificate or articles of
incorporation to increase the number of authorized but unissued shares of Common Stock to at least
the Required Minimum at such time, as soon as possible and in any event not later than the 75th day
after such date.

     4.13 Confidentiality After The Date Hereof. Purchaser covenants that until such time as the transactions contemplated by this Agreement
are publicly disclosed by the Company as described in Section 4.6, Purchaser will maintain the
confidentiality of all disclosures made to it in connection with this transaction (including the
existence and terms of this transaction).

ARTICLE V.

MISCELLANEOUS

     5.1 Termination. This Agreement may be terminated by Purchaser by written notice to the Company if the
Closing has not been consummated on or before August 31, 2005; provided, however,
that no such termination will affect the right of any party to sue for any breach by the other
party.

     5.2 Fees and Expenses. 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 Securities.

     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 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

20

 

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 Purchaser or, in the case of a waiver, by
the party against whom enforcement of any such waiver is sought. No waiver of any default with
respect to any provision, condition or requirement of this Agreement shall be deemed to be a
continuing waiver in the future or a waiver of any subsequent default or a waiver of any other
provision, condition or requirement hereof, nor shall any delay or omission of either party to
exercise any right hereunder in any manner impair the exercise of any such right.

     5.6 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 hereof. The language used in this
Agreement will be deemed to be the language chosen by the parties to express their mutual intent,
and no rules of strict construction will be applied against any party.

     5.7 Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their
successors and permitted assigns. Neither party may assign this Agreement or any rights or
obligations hereunder without the prior written consent of the other party.

     5.8 No Third-Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective
successors and permitted assigns and is not for the benefit of, nor may any provision hereof be
enforced by, any other Person, except as otherwise set forth in Section 4.11.

     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 Arizona, without regard to the principles of conflicts of law
thereof.

     5.10 Survival. The representations and warranties contained herein shall survive the Closing and the
delivery or exercise of the Securities, as applicable, for the applicable statue of limitations.

     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 other party, it being understood
that both parties need not sign the same counterpart. In the event that any signature is delivered
by facsimile transmission, such signature shall create a valid and binding

21

 

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

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

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

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

22

 

     5.17 Usury. To the extent it may lawfully do so, the Company hereby agrees not to insist upon or plead
or in any manner whatsoever claim, and will resist any and all efforts to be compelled to take the
benefit or advantage of, usury laws wherever enacted, now or at any time hereafter in force, in
connection with any claim, action or proceeding that may be brought by Purchaser in order to
enforce any right or remedy under any Transaction Document. Notwithstanding any provision to the
contrary contained in any Transaction Document, it is expressly agreed and provided that the total
liability of the Company under the Transaction Documents for payments in the nature of interest
shall not exceed the maximum lawful rate authorized under applicable law (the “Maximum
Rate”), and, without limiting the foregoing, in no event shall any rate of interest or default
interest, or both of them, when aggregated with any other sums in the nature of interest that the
Company may be obligated to pay under the Transaction Documents exceed such Maximum Rate. It is
agreed that if the maximum contract rate of interest allowed by law and applicable to the
Transaction Documents is increased or decreased by statute or any official governmental action
subsequent to the date hereof, the new maximum contract rate of interest allowed by law will be the
Maximum Rate applicable to the Transaction Documents from the effective date forward, unless such
application is precluded by applicable law. If under any circumstances whatsoever, interest in
excess of the Maximum Rate is paid by the Company to Purchaser with respect to indebtedness
evidenced by the Transaction Documents, such excess shall be applied by Purchaser to the unpaid
principal balance of any such indebtedness or be refunded to the Company, the manner of handling
such excess to be at Purchaser’s election.

     5.18 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.

     5.19 Construction. The parties agree that each of them and/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 employed
in the interpretation of the Transaction Documents or any amendments hereto.

(Signature Pages Follow)

23

 

     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.

	 	 	 	 	 
	 	 	BRILLIAN CORPORATION
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Wayne Pratt
	 

	 	 	 	 
	 

	 	 	 	Wayne Pratt, VP & CFO
	 
	 	 	 	 
	 	 	Address for Notice:
	 
	 	 	 	 
	 	 	1600 N. Desert Drive

Tempe, AZ 85281
	 
	 	 	 	 
	 	 	With a copy to (which shall not constitute

notice):
	 
	 	 	 	 
	 	 	Greenberg Traurig, LLP
	 	 	2375 E. Camelback Road, Suite 700
	 	 	Phoenix, AZ 85016
	 	 	Attention: Robert S. Kant
	 
	 	 	 	 
	 	 	SYNTAX GROUPS CORPORATION
	 
	 	 	 	 
	 

	 	By:
	 	/s/ James Ching Hua Li
	 

	 	 	 	 
	 

	 	 	 	James Ching Hua Li, CEO
	 
	 	 	 	 
	 	 	Address for Notice:
	 
	 	 	 	 
	 	 	20480 E. Business Parkway

City of Industry, CA 91789
	 
	 	 	 	 
	 	 	With a copy to (which shall not constitute

notice):
	 
	 	 	 	 
	 	 	Dorsey & Whitney LLP
	 	 	38 Technology Drive
	 	 	Irvine, CA 92618-5310
	 	 	Attention: Patrick Arrington

24

 

EXHIBIT A

FORM OF NOTE

See attached.

 

 

EXHIBIT B

FORM OF WARRANT

See attached.

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