Document:

bancroft8k092807ex10-4.htm

    
      

      

    

    

    MONMOUTH
      AGREEMENT

     

     

    THIS
      AGREEMENT is dated effective the 31st day of August, 2007.

     

    BETWEEN:

     

    YVON
      GAGNE

     

    (hereinafter
      called “Owner”)

     

    AND:

     

    2146281
      ONTARIO INC., an Ontario corporation

     

    (hereinafter
      called “2146281 Ontario”)

     

    WHEREAS:

     

    
      	
              A.

            	
              Owner
                owns certain Claims located in the Province of Ontario,
                Canada.

            

    

     

    
      	
              B.

            	
              2146281
                Ontario is interested in acquiring an undivided one hundred (100%)
                per
                cent interest in such Claims.

            

    

     

    
      	
              C.

            	
              Owner
                is prepared to grant 2146281 Ontario an option to acquire an undivided
                one
                hundred (100%) per cent interest in such Claims on the terms and
                conditions hereinafter set forth.

            

    

     

    NOW
      THEREFORE, in consideration of the premises and the mutual obligations
      hereinafter described, and intending to be legally bound, the parties agree
      as
      follows:

     

    ARTICLE 1

    INTERPRETATION
      AND DEFINITIONS

     

    
      	
              1.1

            	
              Definitions

            

    

     

    As
      used
      in this Agreement, the following words and phrases have the following
      meanings:

     

    
      	
               

            	
              (a)

            	
              “Affiliate”
                means any person, partnership, limited liability company, joint venture,
                corporation, or other form of enterprise which controls, is controlled
                by,
                or is under common control with a party to this
                Agreement.

            

    

     

    
      	
               

            	
              (b)

            	
              “Agreement”
                means this agreement as the term is defined in Section 1.3
                hereof.

            

    

     

    
      	
               

            	
              (c)

            	
              “Force
                Majeure” means any event beyond a party’s reasonable control
                including laws which prohibit a party’s ability to comply with its
                obligations; action or inaction of civil or military authority; mining
                casualty; damage to or destruction of mine, plant or facility; fire;
                explosion; flood; insurrection; riot; labour disputes; and acts of
                God,
                but does not include a party’s inability to make any payments required
                under this Agreement.

            

    

     

     

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

     

    
      	
               

            	
              (d)

            	
              “Claims”
                means all mineral rights constituting the claim units marked as such
                on
                Schedule A attached to this
                Agreement.

            

    

     

    
      	
               

            	
              (e)

            	
              “NMR”
                means the net mineral royalty reserved by Owner and calculated in
                accordance with Schedule B
                hereto.

            

    

     

    
      	
               

            	
              (f)

            	
              “Option”
                has the meaning given that term by Section
                2.1.

            

    

     

    
      	
               

            	
              (g)

            	
              “Option
                Payments” has the meaning given that term by Section
                2.1.

            

    

     

    
      	
               

            	
              (h)

            	
              “Option
                Period” means the period of time from the execution of this
                Agreement to the exercise, abandonment or termination of the Option
                in
                accordance with the terms and conditions of this
                Agreement.

            

    

     

    
      	
              1.2

            	
              Schedule

            

    

     

    The
      following schedules are attached to and form part of this
      Agreement:

     

    
      	
              Schedule A

            	
              -

            	
              List
                of Claims

            
	
              Schedule B

            	
              -

            	
              Calculation
                of NMR

            

    

     

    
      	
              1.3

            	
              Entire
                Agreement

            

    

     

    This
      agreement and the attached schedules and all properly executed amendments are
      hereinafter collectively referred to as this
“Agreement”.  This Agreement constitutes the entire
      agreement between the parties and supersedes all previous agreements and
      undertakings relating to the subject matter.  The parties acknowledge
      that there are no agreements, undertakings, representations, warranties or
      conditions collateral to this Agreement except as specifically stated otherwise
      in this Agreement.

     

    
      	
              1.4

            	
              Caption
                and Headings

            

    

     

    The
      division of this Agreement into articles and sections and the insertion of
      headings is for convenience of reference only and shall not affect the
      interpretation of this Agreement.  Any reference to a section or
      article shall be a reference to a section or article of this Agreement unless
      specifically stated otherwise.

     

    
      	
              1.5

            	
              Extended
                Meanings

            

    

     

    In
      this
      Agreement, where the context so requires or permits, the masculine gender shall
      include the feminine and neuter genders, the plural shall include the singular
      and vice versa, and the words “person” and “persons” shall include corporations,
      partnerships, and all other entities of whatever description.

    

    
      
        
          
          

        

        
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            2 -

          
            

          

        

        
          
          

        

      

    

     

    
      	
              1.6

            	
              Currency

            

    

     

    In
      this
      Agreement all statements of and references to dollar amounts shall mean United
      States dollars.

     

    
      	
              1.7

            	
              Governing
                Law

            

    

     

    This
      Agreement shall be interpreted in accordance with the laws of the Province
      of
      Ontario, Canada, and the federal laws of Canada as applicable
      therein.

     

    
      	
              1.8

            	
              Severability

            

    

     

    If
      any
      provision of this Agreement is found invalid, illegal, or incapable of
      enforcement by any Court of competent jurisdiction, such provision and the
      remaining provisions of the Agreement shall continue to be enforceable to the
      extent permitted by such Court against any person(s) and in any circumstance(s)
      other than those to whom it has been found invalid, illegal or incapable of
      enforcement.

     

    
      	
              1.9

            	
              Amendments

            

    

     

    No
      amendments to this Agreement shall be of any force and effect unless executed
      in
      writing by all the parties to this Agreement.

     

    ARTICLE 2

    GRANT
      AND EXERCISE OF OPTION

     

    
      	
              2.1

            	
              Option

            

    

     

    Owner
      grants 2146281 Ontario an exclusive and irrevocable option (the
“Option”) to acquire an undivided one hundred (100%) per cent
      interest in the Claims by making the following payments (the “Option
      Payments”) to the Owner:

     

    
      	
               

            	
              (a)

            	
              Considering
                that 2146281 Ontario intends to go public 500,000 common shares (the
                “Shares”) of 2146281 Ontario or whichever entity that is
                public being either 2146281 Ontario or a parent corporation will
                be issued
                to Owner on or before September 30,
                2007;

            

    

     

    
      	
               

            	
              (b)

            	
              $5,000
                which was paid to the owner upon signing of the term sheet subject
                to 60
                day due diligence, the receipt of which is hereby
                acknowledged;

            

    

     

    
      	
               

            	
              (c)

            	
              $15,000
                which was paid to Owner on or before May 14, 2007, the receipt of
                which is
                hereby acknowledged;

            

    

     

    
      	
               

            	
              (d)

            	
              $40,000
                will be paid to Owner by no later than May 14,
                2008;

            

    

     

    
      	
               

            	
              (e)

            	
              $60,000
                will be paid to Owner by no later than May 14, 2009;
                and

            

    

     

    
      	
               

            	
              (f)

            	
              $80,000
                will be paid to Owner by no later than May 14,
                2010.

            

    

     

    
 

    
      
        
          
          

        

        
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            3 -

          
            

          

        

        
          
          

        

      

    

     

    
      	
              2.2

            	
              Exercise
                of Option

            

    

     

    
      	
               

            	
              (a)

            	
              The
                Option shall be automatically exercised and the Claims vested in
                2146281
                Ontario making all the Option Payments set forth in Section
                2.1.  Upon exercise of the Option in accordance with that
                Section, 2146281 Ontario shall have earned and acquired an undivided
                hundred (100%) per cent ownership interest in and to the Claims free
                and
                clear of any mortgages, liens, charges, pledges, security interests,
                encumbrances and any other claims of any description, but subject
                to a 3%
                NMR, determined and paid in accordance Schedule B
                hereto.

            

    

     

    
      	
               

            	
              (b)

            	
              The
                3% NMR may be partially purchased (the “Buyout”) by
                2146281 Ontario at any time (as to 50% thereof - leaving Owner with
                an NMR
                equal to 1.5%) by 2146281 Ontario paying to Owner
                $1,500,000.  This purchase will not affect the NMR that is
                otherwise due to Owner at the date of the
                Buyout.

            

    

     

    
      	
              2.3

            	
              Results
                of Prior Exploration Work

            

    

     

    
      	
               

            	
              (a)

            	
              Immediately
                following the execution of this Agreement, Owner shall deliver to
                2146281
                Ontario all technical data for the Claims in its possession including,
                but
                without limitation, drilling, geophysics and geological information
                held
                by Owner.

            

    

     

    
      	
               

            	
              (b)

            	
              Should
                this Agreement be terminated, for whatever reason, prior to vesting,
                then
                2146281 Ontario will return and forward to Owner copies of data and
                information received from Owner but 2146281 Ontario will not be obliged
                to
                return any Claims data otherwise acquired by 2146281 Ontario during
                the
                Option Period.

            

    

     

    
      	
              2.4

            	
              Title

            

    

     

    Claims
      will be transferred to 2146281 Ontario upon receipt of the 500,000 common shares
      referred to in Clause 2.1(a).  Within thirty (30) days following the
      delivery of the common stock, Owner will provide 2146281 Ontario with executed
      transfers of an undivided hundred (100%) percent interest in the Claims and
      will
      provide any additional assistance required by 2146281 Ontario or its nominee
      to
      legally record the transfers.

     

    ARTICLE 3

    REPRESENTATIONS
      AND WARRANTIES

     

    
      	
              3.1

            	
              Representations
                and Warranties by Owner

            

    

     

    Owner
      acknowledges, represents and warrants that:

     

    
      	
               

            	
              (a)

            	
              Owner
                has all requisite power and authority to perform his obligations
                under
                this Agreement;

            

    

     

    
      	
               

            	
              (b)

            	
              all
                necessary action has been taken by Owner to execute and allow the
                proper
                performance of the terms of this Agreement, and this Agreement constitutes
                a valid and binding obligation of Owner enforceable in accordance
                with its
                terms;

            

    

     

    
 

    
      
        
          
          

        

        
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            4 -

          
            

          

        

        
          
          

        

      

    

     

    
      	
               

            	
              (c)

            	
              to
                the best of Owner’s knowledge the location of each of the Claims on the
                ground conforms to the description appearing on records in the appropriate
                records office, and the Claims were properly located according to
                the laws
                of Ontario and will be in good standing for at least 180-days days
                after
                the execution of this Agreement;

            

    

     

    
      	
               

            	
              (d)

            	
              Owner
                has not received notice of any violation of or investigation relating
                to
                any federal, provincial or local environmental or pollution law,
                regulation or ordinance with respect to the
                Claims;

            

    

     

    
      	
               

            	
              (e)

            	
              to
                the best of Owner’s knowledge there are no reclamation liabilities in
                connection with the Claims and, in particular, there are no obligations
                to
                monitor or clean up any preexisting mine sites or mine waste dumps
                or
                tailings;

            

    

     

    
      	
               

            	
              (f)

            	
              Owner’s
                interest in the Claims is free and clear of any mortgages, liens,
                charges,
                pledges, security interests, encumbrances or other claims of any
                description and, upon exercise of the Option by 2146281 Ontario,
                2146281
                Ontario will acquire an undivided one hundred percent (100%) interest
                in
                the Claims free and clear of any mortgages, liens, charges, pledges,
                security interests, encumbrances or other claims of any description,
                except for the NMR set out in Section 2.2 and Schedule B of this
                Agreement;

            

    

     

    
      	
               

            	
              (g)

            	
              no
                person has any right or agreement, option, understanding, prior commitment
                or privilege capable of becoming an agreement for the purchase or
                acquisition from Owner of any interest in the
                Claims;

            

    

     

    
      	
               

            	
              (h)

            	
              all
                assessment work required to maintain the Claims in full force and
                effect
                has been performed as of the execution of this
                Agreement;

            

    

     

    
      	
               

            	
              (i)

            	
              there
                are no royalties or other latent interests in the Claims owing to
                any
                other parties, except as outlined in Section 2.2 and Schedule B of
                this Agreement;

            

    

     

    
      	
               

            	
              (j)

            	
              none
                of the Shares have been registered under the 1933 Act, or under any
                state
                securities or “blue sky” laws of any state of the United States, and,
                unless so registered, may not be offered or sold in the United States
                or,
                directly or indirectly, to U.S. Persons, as that term is defined in
                Regulation S under the 1933 Act (“Regulation S”),
                except in accordance with the provisions of Regulation S, pursuant
                to an
                effective registration statement under the 1933 Act, or pursuant
                to an
                exemption from, or in a transaction not subject to, the registration
                requirements of the 1933 Act;

            

    

     

    
      	
               

            	
              (k)

            	
              the
                decision to execute this Agreement and acquire the Shares hereunder
                has
                not been based upon any oral or written representation as to fact
                or
                otherwise made by or on behalf of
                Owner;

            

    

     

    
      	
               

            	
              (l)

            	
              no
                securities commission or similar regulatory authority has reviewed
                or
                passed on the merits of the Shares;

            

    

     

    
 

    
      
        
          
          

        

        
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            5 -

          
            

          

        

        
          
          

        

      

    

     

    
      	
               

            	
              (m)

            	
              there
                is no government or other insurance covering the
                Shares;

            

    

     

    
      	
               

            	
              (n)

            	
              Owner
                has not acquired the Shares as a result of, and will not itself engage
                in,
                any “directed selling efforts” (as defined in Regulation S under the 1933
                Act) in the United States in respect of any of the Shares which would
                include any activities undertaken for the purpose of, or that could
                reasonably be expected to have the effect of, conditioning the market
                in
                the United States for the resale of any of the Shares; provided,
                however,
                that Owner may sell or otherwise dispose of any of the Shares pursuant
                to
                registration thereof under the 1933 Act and any applicable state
                securities laws or under an exemption from such registration
                requirements;

            

    

     

    
      	
               

            	
              (o)

            	
              no
                representation has been made to Owner that any of the Shares will
                become
                listed on any stock exchange or automated dealer quotation system,
                except
                that certain market makers may maintain a quotation for the parent
                corporation’s shares of common stock on the NASD Inc.’s Over the Counter
                Bulletin Board;

            

    

     

    
      	
               

            	
              (p)

            	
              Owner
                will refuse to register any transfer of the Shares not made in accordance
                with the provisions of Regulation S, pursuant to an effective registration
                statement under the 1933 Act or pursuant to an available exemption
                from
                the registration requirements of the 1933
                Act;

            

    

     

    
      	
               

            	
              (q)

            	
              the
                statutory and regulatory basis for the exemption claimed for the
                offer
                Shares, although in technical compliance with Regulation S, would
                not be
                available if the offering is part of a plan or scheme to evade the
                registration provisions of the 1933
                Act;

            

    

     

    
      	
               

            	
              (r)

            	
              Owner
                has been advised to consult Owner’s own legal, tax and other advisors with
                respect to the merits and risks of an investment in the Shares and
                with
                respect to applicable resale restrictions, and the Owner is solely
                responsible (and 2146281 Ontario is not in any way responsible) for
                compliance with:

            

    

     

    
      	
               

            	
              (i)

            	
              any
                applicable laws of the jurisdiction in which Owner is resident in
                connection with the distribution of the Shares hereunder,
                and

            

    

     

    
      	
               

            	
              (ii)

            	
              applicable
                resale restrictions;

            

    

     

    
      	
               

            	
              (s)

            	
              Owner
                is not a U.S. Person;

            

    

     

    
      	
               

            	
              (t)

            	
              Owner
                is not acquiring the Shares for the account or benefit of, directly
                or
                indirectly, any U.S. Person;

            

    

     

    
      	
               

            	
              (u)

            	
              Owner
                is acquiring the Shares for investment only and not with a view to
                resale
                or distribution and, in particular, Owner has no intention to distribute
                either directly or indirectly any of the Shares in the United States
                or to
                U.S. Persons;

            

    

     

    
      	
               

            	
              (v)

            	
              Owner
                is outside the United States when receiving and executing this
                Subscription Agreement and is acquiring the Shares as principal for
                Owner’s own account, for investment purposes only, and not with a view
                to,
                or for, resale, distribution or fractionalisation thereof, in whole
                or in
                part, and no other person has a direct or indirect beneficial interest
                in
                such Shares;

            

    

     

    
 

    
      
        
          
          

        

        
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            6 -

          
            

          

        

        
          
          

        

      

    

     

    
      	
               

            	
              (w)

            	
              Owner
                acknowledges that he has not acquired the Shares as a result of,
                and will
                not himself engage in, any “directed selling efforts” (as defined in
                Regulation S under the 1933 Act) in the United States in respect
                of any of
                the Shares which would include any activities undertaken for the
                purpose
                of, or that could reasonably be expected to have the effect of,
                conditioning the market in the United States for the resale of any
                of the
                Shares; provided, however, that Owner may sell or otherwise dispose
                of any
                of the Shares pursuant to registration of any of the Shares pursuant
                to
                the 1933 Act and any applicable state securities laws or under an
                exemption from such registration requirements and as otherwise provided
                herein;

            

    

     

    
      	
               

            	
              (x)

            	
              Owner
                is not aware of any advertisement of any of the Shares;
                and

            

    

     

    
      	
               

            	
              (y)

            	
              no
                person has made to Owner any written or oral
                representations:

            

    

     

    
      	
               

            	
              (i)

            	
              that
                any person will resell or repurchase any of the
                Shares;

            

    

     

    
      	
               

            	
              (ii)

            	
              that
                any person will refund the purchase price of any of the
                Shares;

            

    

     

    
      	
               

            	
              (iii)

            	
              as
                to the future price or value of any of the Shares;
                or

            

    

     

    
      	
               

            	
              (iv)

            	
              that
                any of the Shares will be listed and posted for trading on any stock
                exchange or automated dealer quotation system or that application
                has been
                made to list and post any of the Shares of 2146281 Ontario on any
                stock
                exchange or automated dealer quotation
                system.

            

    

     

    
      	
              3.2

            	
              Survival

            

    

     

    Owner
      acknowledges that 2146281 Ontario is relying on the representations and
      warranties contained in Section 3.1 in entering into this Agreement and that
      such representations and warranties are continuing and survive the execution
      of
      this Agreement.

     

    
      	
              3.3

            	
              Representations
                and Warranties by 2146281
                Ontario

            

    

     

    2146281
      Ontario represents and warrants that:

     

    
      	
               

            	
              (a)

            	
              it
                has been duly incorporated and is a validly subsisting corporation
                under
                the laws of the Province of Nova Scotia and has all corporate power
                and
                authority to perform its obligations under  this Agreement;
                and

            

    

     

    
      	
               

            	
              (b)

            	
              all
                necessary corporate action has been taken by 2146281 Ontario to authorize
                the execution, delivery and performance of this Agreement, and this
                Agreement constitutes a valid and binding obligation of 2146281 Ontario
                enforceable in accordance with its
                terms.

            

    

     

    
 

    
      
        
          
          

        

        
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            7 -

          
            

          

        

        
          
          

        

      

    

     

    
      	
              3.4

            	
              Indemnity

            

    

     

    Each
      party will indemnify and save the other party and its directors, officers,
      employees, agents, representatives, subcontractors and Affiliates harmless
      from
      all losses, damages, costs, actions, and suits arising out of or in connection
      with any breach by that party of any representation,  warranty,
      covenant or agreement contained in this Agreement.  This indemnity
      shall survive the termination of this Agreement.

     

    ARTICLE 4

    EXPLORATION
      AND DEVELOPMENT ACTIVITIES

     

    
      	
              4.1

            	
              Right
                to Explore and Develop

            

    

     

    Owner
      grants to 2146281 Ontario, its employees, directors, officers, agents,
      representatives and contractors, the exclusive right to enter upon the property
      comprising the Claims for the purpose of exploration, development, mining and
      such other operations as 2146281 Ontario considers necessary during the Option
      Period, the nature, manner and extent of which operations will be in 2146281
      Ontario’s sole discretion.

     

    
      	
              4.2

            	
              Conduct
                of Exploration and Development
                Work

            

    

     

    2146281
      Ontario shall perform its exploration and development work on the Property
      comprising the Claims in accordance with good mining practice and shall comply
      with all applicable laws and regulations.

     

    
      	
              4.3

            	
              Installation
                of Equipment

            

    

     

    2146281
      Ontario may install, maintain, replace and remove any and all mining machinery,
      equipment, tools, and facilities which it may desire to use in connection with
      its exploration and development activities on the property comprising the
      Claims.  Upon termination of this Agreement for any reason, 2146281
      Ontario shall within a period of six (6) months following such termination
      remove its equipment at its sole cost and expense from the Claims, having
      Owner’s permission to enter onto the property comprising the Claims for such
      purpose.

     

    ARTICLE 5

    2146281
      ONTARIO’S OBLIGATIONS

     

    
      	
              5.1

            	
              Reporting

            

    

     

    By
      no
      later than each anniversary of this Agreement, 2146281 Ontario shall provide
      a
      copy of any geological report that has been prepared respecting exploration
      conducted on the Claims in the previous year.

     

    
 

    
      
        
          
          

        

        
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            8 -

          
            

          

        

        
          
          

        

      

    

     

    ARTICLE 6

    ASSIGNMENTS

     

    
      	
              6.1

            	
              Assignments

            

    

     

    2146281
      Ontario shall be entitled to assign its rights and obligations under this
      Agreement without the prior written consent of Owner.(the owner will object
      to
      this)

     

    ARTICLE 7

    TERMINATION

     

    
      	
              7.1

            	
              2146281
                Ontario’s Right to
                Terminate

            

    

     

    2146281
      Ontario shall have the right to terminate this Agreement and its interest in
      the
      Claims at any time during the Option Period upon written notice to the Owner
      thirty (30) days prior to the contemplated termination date.

     

    
      	
              7.2

            	
              Termination
                for Default

            

    

     

    If
      at any
      time during the Option Period, 2146281 Ontario fails to duly pay or cure any
      default in the performance of any obligation of this Agreement within a period
      of thirty (30) days after receipt of a default notice from Owner, Owner may
      terminate the Option.  Exercise of such right by Owner shall be
      without prejudice to any other rights or remedies Owner may have at law or
      in
      equity as a result of such default of this Agreement by 2146281
      Ontario.  Any Claims transferred to 2146281 Ontario prior to all
      Option Payments being made will revert and be transferred back to Owner in
      the
      event of a default.

     

    ARTICLE 8

    FORCE
      MAJEURE

     

    
      	
              8.1

            	
              Suspension
                of Obligation

            

    

     

    If
      2146281 Ontario is prevented by Force Majeure from timely performance of any
      of
      its obligations under this Agreement (other than the payment of any of the
      Option Payments), such failure shall be excused and the period for performance
      and the Option Period shall be extended for an additional period of time equal
      to the duration of such Force Majeure.  Upon the occurrence and upon
      the termination of a Force Majeure, 2146281 Ontario shall promptly notify Owner
      in writing.  2146281 Ontario shall use reasonable efforts to remedy
      any Force Majeure, but shall not hereunder be obligated to contest the validity
      of any law or regulation, nor any action or inaction of any civil or military
      authority.

    

    
      
        
          
          

        

        
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            9 -

          
            

          

        

        
          
          

        

      

    

     

    ARTICLE 9

    MISCELLANEOUS

     

    
      	
              9.1

            	
              Notices

            

    

     

    Any
      notice under this Agreement will be given in writing, by delivery in person
      to a
      named representative or by mail or facsimile, properly addressed to each
      party.  A notice given will be deemed given only when received by the
      party to whom such notice is directed; except that any notice given by facsimile
      properly addressed to the party, to whom given, shall be deemed given to and
      received by the party, to whom directed, 48 hours after such notice is
      successfully faxed or ten days after it is mailed, provided there is no postal
      disruption at the time.  Each party’s address will be the following
      until such party specifies another address by written notice:

     

    To
      Owner:

     

    Yvon
      Gagne

    31
      Balsam
      Street

    Kirkland
      Lake, Ontario

     

    Tel.:

    Facsimile:

     

    To
      2146281 Ontario:

     

    2146281
      Ontario Inc.

    c/o
      Clark
      Wilson LLP

    HSBC
      Building, 800 – 885 West Georgia Street

    Vancouver,
      B.C.  V6C 3H1 Canada

     

    Tel  (604)
      687 – 5700

    Fax
      (604)
      687 – 6314

     

    Attention:
      William L. Macdonald

     

    
      	
              9.2

            	
              Area
                of Influence

            

    

     

    Owner
      agrees that there shall be an area of influence (the “Area of
      Influence”) respecting any additional claims staked or recorded by
      Owner which are contiguous to the Claims and any such claims will fall under
      the
      terms of this Agreement.  In the event that 2146281 Ontario acquires
      additional claims within the Area of Influence from Owner pursuant to this
      Section, 2146281 Ontario agrees to pay Owner $150.00 per additional claim unit
      so acquired.

     

    
 

    
      
        
          
          

        

        
          -
            10 -

          
            

          

        

        
          
          

        

      

    

     

    
      	
              9.3

            	
              Relationship
                of Parties

            

    

     

    This
      Agreement is not intended to create any partnership or agency relationship
      between the parties or fiduciary obligations of any description, and this
      Agreement shall not be construed so as to render the parties liable as partners
      or as creating a partnership, and no party shall be or shall be deemed to be,
      or
      shall hold itself out to be an agent of any other party.

     

    
      	
              9.4

            	
              Successors
                and Assigns

            

    

     

    This
      Agreement shall be binding upon and inure to the benefit of the respective
      successors and permitted assigns of the parties.

     

    
      	
              9.5

            	
              Regulatory
                Approval

            

    

     

    This
      Agreement and the obligations of 2146281 Ontario hereunder are subject to
      regulatory approval, as applicable.

     

    
      	
              9.6

            	
              Prior
                Agreements

            

    

     

    The
      Agreement contains the entire agreement and understanding of the parties and
      replaces all prior agreements bearing on the subject matter hereof.

     

    
      	
              9.7

            	
              Counterparts

            

    

     

    This
      Agreement may be executed in counterparts, all of which taken together shall
      constitute one and the same instrument and any of the parties hereto may execute
      this Agreement by signing any such counterpart.

     

    IN
      WITNESS WHEREOF the parties make this Agreement effective as of the
      date first above written.

     

    

    
      	
              2146281
                ONTARIO INC.

            	
              OWNER:

            
	
              Per:  
                   /s/ Paul Leslie Hammond

            	
              /s/Yvon
                Gagne

            
	
                     
                    Paul Leslie Hammond, President

            	
              YVON
                GAGNE

            

    

     

    
 

    
      
        
          
          

        

        
          -
            11 -

          
            

          

        

        
          
          

        

      

    

    

    SCHEDULE A

     

    to

     

    MONMOUTH
      AGREEMENT

     

    List
      of Claims

     

     

    Mining
      Claims Representing 71 Units Southern Ontario Mining Division, Monmouth
      Township, Ontario, Canada)

     

    4211944
      (4 units) – lot 5 con 7 and lot 6 con 7

    4211945
      (1 unit) – lot 7 con 7 (South 1⁄2)

    4211946
      (2 units) – lot 8 con 7

    4211947
      (8 units) – lots 5, 6, 7 and 8 con 6

    4211948
      (12 units) – lots 3, 5, 5, 6, 7 and 8 con 5

    4211949
      (12 units) – lots 3, 5, 5, 6, 7 and 8 con 4

     

    

     

    

    4220033
      (5 units) – Lots 3, 4, West 1⁄2 of Lot 5, con 3422034 (2 units) – Lot 2, con
      4

    4220034
      (2 units) – all of Lot 2, con 4

    4220035
      (11 units) – East 1⁄2 of Lot 5, Lots 6,7,8,9,10, con 3

    4220036
      (4 units) – Lots 9, 10, con 4

    4220037
      (2 units) – Lot 9, con 5

    4220038
      (4 units) – Lots 11, 12, con 5

    4220039
      (4 units) – Lots 9, 10, con 6

    

     

     

     

     

     

     

     

    

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    SCHEDULE B

     

    to

     

    MONMOUTH
      AGREEMENT

     

    Net
      Mineral Royalty

     

     

    
      	
              1.

            	
              Definitions

            

    

     

    Where
      used herein:

     

    
      	
               

            	
              (a)

            	
              “Agreement”
                means the agreement to which this schedule is
                attached.

            

    

     

    
      	
               

            	
              (b)

            	
              “Claims”
                means those mineral claims set forth in Schedule A to the
                Agreement.

            

    

     

    
      	
               

            	
              (c)

            	
              “Fiscal
                Period” means a three month period ending on the last day of
                March, June, September and December of each calendar
                year;

            

    

     

    
      	
               

            	
              (d)

            	
              “Net
                Mineral Royalty” or “NMR” means the Revenue
                received by 2146281 Ontario from the sale of Product from mining
                operations on the Claims.

            

    

     

    
      	
               

            	
              (e)

            	
              “Ore”
                means any material containing a mineral or minerals of commercial
                economic
                value mined from the Claims;

            

    

     

    
      	
               

            	
              (f)

            	
              “Product”
                means Ore mined from the Claims and any concentrates or other materials
                or
                products derived therefrom; provided that if any such Ore, concentrates
                or
                other materials or products are further treated as part of the mining
                operation in respect of the Claims, such Ore, concentrates or other
                materials or products shall not be considered to be
                “Product” until after they have been so
                treated.

            

    

     

    
      	
               

            	
              (g)

            	
              “Revenue”
                means gross revenues during each Fiscal Period received by the Royalty
                Payer from the sale of Product by the Royalty Payer to the smelter,
                refiner or other purchaser, plus any bonuses and subsidies less all
                penalties, umpire assaying, assaying, transportation costs from mine
                site,
                sampling charges, and insurance costs, whether deducted by such purchaser
                or otherwise paid or incurred by Royalty Payer. Where revenue otherwise
                to
                be included under this subsection is received by Royalty Payer in
                a
                transaction with a party with whom it is not dealing at arm’s length, the
                revenue to be included shall be based on the fair market value under
                the
                circumstances and at the time of the
                transaction.

            

    

     

    
      	
               

            	
              (h)

            	
              “Royalty
                Interest” means the NMR payable to Royalty Holder pursuant to the
                Agreement;

            

    

     

    
      	
               

            	
              (i)

            	
              “Royalty
                Holder” means “Owner”, as defined in the
                Agreement, his heirs, executors and
                assigns;

            

    

     

    
 

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

     

    
      	
               

            	
              (j)

            	
              “Royalty
                Payer” means “2146281 Ontario”, as defined in
                the Agreement, its successors and
                assigns.

            

    

     

    Capitalized
      terms which are not specifically defined in this Schedule shall have the meaning
      given to them in the Agreement.

     

    
      	
              2.

            	
              Net
                Mineral Royalty

            

    

     

    For
      each
      Fiscal Period, Royalty Payer shall pay Royalty Holder the Royalty Interest
      specified by the Agreement, calculated and paid in accordance with this
      Schedule.

     

    
      	
              3.

            	
              Calculation
                of Net Mineral Royalty

            

    

     

    The
      NMR
      shall be computed at the end of each Fiscal Quarter.  On or before the
      last day of the first month following each Fiscal Quarter, a statement shall
      be
      furnished setting forth in reasonable detail the computation of the NMR for
      the
      previous Fiscal Quarter and the Royalty Interest due to the Royalty Holder,
      if
      any.  Payment for the Royalty Interest due, if any, shall be enclosed
      with such statement.

     

    
      	
              4.

            	
              Audit

            

    

     

    The
      Royalty Holder, upon written notice to the Royalty Payer shall have the right
      to
      have an independent firm of chartered accountants audit the records that relate
      to the calculation of the Royalty Interest within twenty-four (24) months after
      receipt of each payment described in this Schedule.

     

    The
      Royalty Holder shall be deemed to have waived any right it may have had to
      object to a payment made for any calendar year unless it provides notice in
      writing of such an objection within twenty-four (24) months after receipt of
      each payment.  If the parties are unable to resolve any such dispute
      within sixty (60) days after receipt of such notice, the dispute shall be
      resolved by arbitration.

     

    
      	
              5.

            	
              Commingling
                of Ore

            

    

     

    Before
      any Products from the Claims are commingled with ores and minerals from other
      properties, the Products from the Claims shall be measured and sampled in
      accordance with sound mining and metallurgical practices for moisture, metal,
      commercial minerals and other appropriate content. Representative samples of
      the
      Products shall be retained by the Royalty Payer and assays (including penalty
      substances) and other appropriate analyses of these samples shall be made before
      commingling to determine metal, commercial minerals and other appropriate
      content.  Detailed records shall be kept by Royalty Payer showing
      measures, moisture, assays of metal, commercial and other appropriate content
      and penalty substances, and gross metal content of the Products.  From
      this information, Royalty Payer shall determine the amount payable to Royalty
      Holder from Products from the Claims commingled with ores and minerals from
      other properties.Exhibit 10.1

 

EXECUTION COPY

 

UNI-PIXEL, INC.

 

SECURITIES PURCHASE AGREEMENT

 

This
SECURITIES PURCHASE AGREEMENT (this “Agreement”) is dated as of September 28,
2007, and is by and between UNI-PIXEL, INC., a Delaware corporation, with its
principal office at 8708 Technology Forest Place, Suite 100, The Woodlands,
Texas 77381 (the “Company”),
and Merrill Lynch Pierce, Fenner & Smith Incorporated, a Delaware
corporation (the “Purchaser”).

 

WHEREAS the
Company desires to issue and sell to the Purchaser, and the Purchaser desires
to purchase from the Company, in aggregate, (a) 892,858 authorized but unissued
shares of the Company’s Series C Preferred Stock, par value $0.001 per share
(the “Series C Preferred
Stock”), and (b) Warrants (as defined below) to purchase, in
aggregate, up to 3,214,289 shares of the Company’s common stock, par value
$0.001 (the “Common Stock”), for an
aggregate purchase price of $10,000,009.60, all upon the terms and subject to
the conditions set forth in this Agreement; and

 

WHEREAS, at
the Closing (as defined below), the Company and the Purchaser shall enter into
that certain Investor’s Rights Agreement, dated as of the Closing, in the form
attached hereto as Exhibit A (the “Investor’s Rights Agreement”).

 

NOW THEREFORE,
in consideration of the mutual agreements, representations, warranties and
covenants herein contained, the parties hereto agree as follows:

 

1.                                       Definitions.
As used in this Agreement, the following terms shall have the following
respective meanings:

 

“Affiliate” of any Person
means any other Person that, directly or indirectly, through one or more
intermediaries, controls, is controlled by, or is under common control with,
such Person, as such terms are used and construed under Rule 144 (as defined
below).

 

“Board” means the
Board of Directors of the Company.

 

“Business Day” means any day except
Saturday, Sunday and any day which is a federal legal holiday or a day on which
banking institutions in the States of New York or Texas are authorized or
required by law or other governmental action to close.

 

“Certificate of Designations”
means the Certificate of Designations of the Series C Preferred Stock adopted
by the Board and filed on or before the Closing (as defined below) by the
Company with the Secretary of State of the State of Delaware in accordance with
Delaware law, establishing the rights, preferences and privileges of the Series
C Preferred Stock, in the form attached hereto as Exhibit B.

 

“Conversion Shares”
means the shares of Common Stock issuable upon conversion of the Shares
pursuant to the terms of the Certificate of Designations.

 

“Disclosure Schedule” has the meaning
set forth in Section 3.

 

 

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

 

“Financial Statements” has the
meaning set forth in Section 3.7.

                                                                                                “Financial Statement Date” means the
date of the most recent audited financial statements of the Company, which date
is December 31, 2006.

 

“Intellectual Property” means all
rights and interests in and to all inventions, invention disclosures, patents,
patent applications, trademarks, trademark applications, service marks,
tradenames, copyrights, confidential or proprietary information, trade secrets,
licenses, domain names, mask works, information and proprietary rights and
processes as are material to the conduct of the business of the Company and the
Subsidiaries, taken as a whole, whether now conducted or proposed to be
conducted.

 

“Knowledge”  (whether
or not capitalized) including the phrase “to the Company’s knowledge”  includes (a) actual knowledge of the Person, including the
actual knowledge of any of the officers or directors of the Company or any of
the Subsidiaries, and (b) that knowledge which a prudent businessperson could
have obtained in the management of his business after making due inquiry, and
after exercising due diligence, with respect thereto.

 

“Material Adverse Effect”
means any event, occurrence or development that has had, or that could
reasonably be expected to have, individually or in the aggregate with other
events, occurrences or developments, a material adverse effect on the assets,
liabilities (contingent or otherwise), business, affairs, operations, prospects
or condition (financial or otherwise) of the Company and its Subsidiaries,
taken as a whole; provided, however,
that any change resulting from (a) general economic conditions or industry
conditions that do not disproportionately affect the Company or its
Subsidiaries, (b) the announcement of the transactions contemplated by this
Agreement and the performance by the parties of their obligations under this
Agreement, (c) any change in law, or (d) any action permitted by this
Agreement, shall not constitute a Material Adverse Effect.

 

“Person” (whether or
not capitalized) means an individual, entity, partnership, limited liability
company, corporation, association, trust, joint venture, unincorporated
organization, and any government, governmental department or agency or
political subdivision thereof.

 

“Rule 144” means Rule
144 promulgated under the Securities Act and any successor or substitute rule,
law or provision.

 

“SEC” means the
Securities and Exchange Commission.

 

“Securities Act” means
the Securities Act of 1933, as amended, and all of the rules and regulations
promulgated thereunder.

 

“Shares” means the
shares of Series C Preferred Stock issued and sold by the 

 

2

 

Company to the
Purchaser hereunder.

 

“Share Price” means
$11.20 per Share.

 

“Subsidiaries” means
the subsidiaries of the Company listed in Schedule 2-3.17 to the
Disclosure Schedule.

 

“Transaction Documents”
means, collectively, the Investor’s Rights Agreement, the Certificate of
Designations and the Warrant, including all Schedules and Exhibits thereto and
all certificates, opinions and other documents delivered in connection
therewith.

 

“Warrants” means the
warrants to purchase up to in aggregate 3,214,289 shares of Common Stock for a
purchase price of $1.40 per share, dated as of the Closing Date, issued by the
Company to the Purchaser pursuant hereto, in substantially the form attached
hereto as Exhibit C.

 

“Warrant Shares” means
the shares of Common Stock issued or issuable upon the exercise of the
Warrants.

 

2.                                       Purchase
and Sale of Shares and Warrants.

 

2.1                                 Filing
of Certificate of Designations. The Company shall adopt and file with the
Secretary of State of the State of Delaware, on or before the Closing, the
Certificate of Designations.

 

2.2                                 Purchase
and Sale of Shares. Subject to and upon the terms and conditions set forth
in this Agreement, the Company agrees to issue and sell to the Purchaser, and
the Purchaser hereby agrees to purchase from the Company, at the Closing,
892,858 Shares, at the Share Price.

 

2.3                                 Issuance
of Warrants. Subject to and upon the terms and conditions set forth in this
Agreement, the Company agrees to issue to the Purchaser at the Closing, for no
further cash consideration, a Warrant to purchase 3,214,289 Warrant Shares.

 

2.4                                 Closing.
The closing of the purchase and sale of the Shares and Warrants (the “Closing”) shall take
place at 10:00 am (Central Time) at the offices of Skadden, Arps, Slate,
Meagher & Flom LLP, 1000 Louisiana, Suite 6800, Houston, Texas 77002, on
September 28, 2007, the date hereof, or on such other date and at such time as
may be agreed upon between the Purchaser and the Company (the “Closing Date”). At the Closing, the
Company shall deliver to the Purchaser (i) a single stock certificate (or more,
if reasonably requested by the Purchaser), registered in the name of the
Purchaser, representing the number of Shares purchased by the Purchaser as
described in Section 2.2 hereof and (ii) a Warrant in the name of the
Purchaser for the number of Warrant Shares as described in Section 2.3 hereof,
against payment by or on behalf of the Purchaser of the aggregate purchase
price by wire transfer of immediately available funds to such account as the
Company shall designate in writing.

 

3.                                       Representations
and Warranties of the Company. The Company hereby 

 

3

 

represents and
warrants to the Purchaser, as of the date hereof and except as set forth on the
disclosure schedule attached hereto as Schedule 2 (the “Disclosure Schedule”),
as follows:

 

3.1                                 Incorporation.
Each of the Company and the Subsidiaries is a corporation or other entity duly
organized, validly existing and in good standing under the laws of the State of
Delaware (or such other applicable jurisdiction of incorporation or formation
as is indicated in Schedule 2-3.1 to the Disclosure Schedule), and is in
good standing as a foreign corporation or other entity in each jurisdiction in
which the nature of the business conducted or the character of the property
owned by it makes such qualification necessary, except where the failure to be
so qualified or in good standing, as the case may be, would not result in a
Material Adverse Effect. Each of the Company and the Subsidiaries has all
requisite corporate power and authority to carry on its business as now
conducted and to carry out the transactions contemplated hereby. Neither the
Company nor any of the Subsidiaries is in violation of any of the provisions of
its Certificate of Incorporation or By-laws (or other charter or governing
document).

 

3.2                                 Capitalization.
After giving effect to the Closing, the authorized capital stock of the Company
shall consist of:

 

(a)                                  Common
Stock. 100,000,000 shares of Common Stock, of which (i) 18,758,056 shares
are duly issued and outstanding as of the Closing Date, (ii) 4,637,500 shares
are reserved for issuance upon exercise of outstanding options as of the
Closing Date, (iii) 3,908,971 shares are reserved for issuance upon conversion
of the Corporation’s Series A Preferred Stock, par value $0.001 plus applicable
accrued dividends (the “Series A Preferred Stock”),
16,000,000 shares are reserved for issuance upon conversion of the Corporation’s
Series B Preferred Stock, par value $0.001 plus applicable accrued dividends
(the “Series B Preferred Stock”)
and (iv) 10,632,179 shares are reserved for issuance upon exercise of currently
outstanding warrants to purchase shares of the Common Stock.

 

(b)                                 Preferred
Stock. 10,000,000 shares of preferred stock, par value $0.001 per share
(the “Preferred Stock”),
of which (i) 4,500,000 shares are duly authorized and designated as Series A
Preferred Stock as of the Closing Date, (ii) 3,200,000 shares have been
designated as Series B Preferred Stock as of the Closing Date, (iii) 892,898
shares have been designated as Series C Preferred Stock to be issued pursuant
to this Agreement, and (iv) no other shares are outstanding or authorized and
reserved for issuance as of the Closing Date. The rights, preferences and
privileges of the Series C Preferred Stock are as stated in the Certificate of
Designations and as otherwise provided by the Delaware General Corporation Law.
The rights, preferences and privileges of the Series A Preferred Stock are as
stated in the Certificate of Designations of the Series A Preferred Stock
adopted by the Board and filed by the Company with the Secretary of State of
the State of Delaware on December 9, 2004, in accordance with Delaware law, and
as otherwise provided by the Delaware General Corporation Law. The rights,
preferences and privileges of the Series B Preferred Stock are as stated in the
Certificate of Designations of the Series B Preferred Stock adopted by the
Board and filed by the Company with the Secretary of State of the State of
Delaware on February 13, 2007, in accordance with Delaware law, and as
otherwise provided by the Delaware General Corporation Law.

 

(c)                                  All
shares of the Company’s issued and outstanding capital stock have been duly
authorized, are validly issued and outstanding, and are fully paid and 

 

4

 

nonassessable.

 

(d)                                 Except
for (i) the conversion privileges of the Series C Preferred Stock to be issued
pursuant to this Agreement and the conversion privileges of the Series B
Preferred Stock and the Series A Preferred Stock, (ii) the Warrants and (iii)
as set forth in Schedule 2-3.2(d) to the Disclosure Schedule, there are
no existing options, warrants, calls, preemptive (or similar) rights,
subscriptions or other rights, agreements, arrangements or commitments of any
character obligating the Company to issue, transfer or sell, or cause to be
issued, transferred or sold, any shares of the capital stock of the Company or
other equity interests in the Company or any securities or instruments
convertible into or exchangeable or exercisable for such shares of capital
stock or other equity interests, and there are no outstanding rights,
agreements, arrangements or commitments of any character obligating the Company
to repurchase, redeem or otherwise acquire any shares of its capital stock or other
equity interests. The issuance and sale of the Shares and the Warrants and the
issuance of Conversion Shares and Warrant Shares pursuant to the terms of the
Series C Preferred Stock and the Warrants, respectively, will not obligate the
Company to issue or sell, pursuant to any preemptive right or otherwise, shares
of Common Stock or other securities to any Person (other than pursuant to the
terms of the Series C Preferred Stock and the Warrants) and, except as set
forth in Schedule 2-3.2(d), will not result in a right of any holder of
capital stock or other securities of the Company to adjust the exercise,
conversion, exchange or reset price under such securities.

 

(e)                                  The
current “Conversion Price” for the Series A Preferred Stock is $1.32. The
current “Conversion Price” for the Series B Preferred Stock is $1.40.

 

3.3                                 Registration
Rights. Except as set forth in Schedule 2-3.3 to the Disclosure
Schedule and in the Investor’s Rights Agreement, the Company has not granted or
agreed to grant to any Person any right (including shelf, “piggy-back” and
demand registration rights) to have any capital stock or other securities of
the Company registered with the SEC or any other government authority.

 

3.4                                 Authorization.
All corporate action on the part of the Company, its officers and its directors
necessary for the authorization, execution, delivery and performance of this
Agreement and the Transaction Documents and the consummation of the
transactions contemplated herein and therein, has been taken. When executed and
delivered by the Company, each of this Agreement and the Transaction Documents
shall constitute a legal, valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms, except as such
may be limited by bankruptcy, insolvency, reorganization or other laws
affecting creditors’ rights generally and by general equitable principles. The
Company has all requisite corporate power and authority to enter into this
Agreement and the Transaction Documents and to carry out and perform its
obligations under their respective terms.

 

3.5                                 Valid
Issuance of the Shares. The Shares, the Conversion Shares, the Warrants and
the Warrant Shares have been duly authorized, and the Shares, the Conversion
Shares and the Warrant Shares, upon issuance pursuant to the terms hereof, of
the Series C Preferred Stock and of the Warrants, respectively, will be validly
issued, fully paid and nonassessable and not subject to any encumbrances,
preemptive rights or any other similar contractual rights of the stockholders
of the Company or any other Person (other than pursuant to 

 

5

 

the
Transaction Documents). Assuming the accuracy of the representations of the
Purchaser in Section 4 hereof, and subject to the filings described in Section
3.8 hereof, the Shares, Conversion Shares, Warrants, and Warrant Shares
will be issued in compliance with all applicable federal and state securities
laws. The Company has reserved from its duly authorized capital stock the
number of shares of Common Stock issuable upon conversion in full of the Shares
and exercise in full of the Warrants.

 

3.6                                 SEC
Documents. The Company has furnished to the Purchaser true and complete
copies of the Company’s Annual Report on Form 10-KSB for the year ended
December 31, 2006, the Company’s quarterly Reports on Form 10-QSB for the
quarterly periods ended March 31, 2007 and June 30, 2007 (the “SEC Documents”). As of their
respective filing dates, each of the SEC Documents complied in all material
respects with the requirements of the Exchange Act, and none of the SEC
Documents contained any untrue statement of a material fact or omitted to state
material fact required to be stated therein or necessary in order to make the
statement made therein, in light of the circumstances under which they were
made, not misleading. The financial statements of the Company included in the
SEC Documents comply in all material respects with applicable accounting
requirements and the rules and regulations of the SEC with respect thereto in
effect at the time of filing. All material agreements to which the Company is a
party or to which the property or assets of the Company are subject are
included as part of or specifically identified in the SEC Documents to the
extent required by the rules and regulations of the SEC as in effect at the
time of filing. The Company has prepared and filed, on a timely basis, with the
SEC all filings and reports required by the Securities Act and the Exchange
Act.

 

3.7                                 Financial
Statements. Except as set forth in Schedule 2-3.7 to the Disclosure
Schedule, the financial statements and supporting schedules included in the SEC
Documents and in any of the Company’s registration statements filed with the
SEC or other of the Company’s reports filed with the SEC pursuant to Section 13
of the Exchange Act (collectively, the “Financial Statements”),
are complete and correct in all material respects and present fairly the
consolidated financial position of the Company and its Subsidiaries as of the
dates specified and the consolidated results of their operations and cash flows
for the periods specified, in each case, in conformity with generally accepted
accounting principles and applied on a consistent basis during the periods
involved, except as indicated therein or in the notes thereto.

 

3.8                                 Consents.
Except for (a) the filing and effectiveness of any registration statement
required to be filed by the Company under the Securities Act pursuant to the
terms of the Investor’s Rights Agreement and (b) a Form D filing and any
required state “blue sky” law filings in connection with the transactions
contemplated hereunder or under the Transaction Documents, all consents,
approvals, orders and authorizations required on the part of the Company in
connection with the execution or delivery of, or the performance of the
obligations under, this Agreement and the Transaction Documents, and the
consummation of the transactions contemplated herein and therein, have been
obtained and will be effective as of the date hereof. Except as set forth in Schedule
2-3.8 to the Disclosure Schedule, the execution and delivery by the Company
of this Agreement and the Transaction Documents, the consummation of the
transactions contemplated herein and therein, and the issuance of the Shares,
the Conversion Shares, the Warrants and the Warrant Shares, do not require the
consent or approval of the 

 

6

 

stockholders
of, or any lender to, the Company, or any other Person.

 

3.9                                 No
Conflict; Compliance with Laws.

 

(a)                                  The
execution, delivery and performance by the Company of this Agreement and the
Transaction Documents, and the consummation of the transactions contemplated
hereby and thereby, including the issuance of the Shares, the Conversion
Shares, the Warrants and the Warrant Shares, do not and will not (i) conflict
with or violate any provision of the Certificate of Incorporation (or other
charter documents) or By-laws of the Company or any of the Subsidiaries, (ii)
breach, conflict with or result in any violation of or default (or an event
that with notice or lapse of time or both would become a default) under, or
give rise to a right of termination, amendment, acceleration or cancellation
(with or without notice or lapse of time, or both) of any obligation, contract,
commitment, lease, agreement, mortgage, note, bond, indenture or other
instrument or obligation to which the Company or any of the Subsidiaries is a
party or by which they or any of their properties or assets are bound, except
such as does not constitute a Material Adverse Effect, or (iii) result in a
violation of any statute, law, rule, regulation, order, ordinance or
restriction applicable to the Company, the Subsidiaries or any of their
properties or assets, or any judgment, writ, injunction or decree of any court,
judicial or quasi-judicial tribunal applicable to the Company, the Subsidiaries
or any of their properties or assets, except such as does not constitute a
Material Adverse Effect.

 

(b)                                 None
of the Company and the Subsidiaries (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 of the
Subsidiaries), nor has the Company or any of the Subsidiaries received written
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 or assets is bound
(whether or not such default or violation has been waived) or (ii) is in
violation of any statute, rule or regulation of any governmental authority,
including, without limitation, all foreign, federal, state and local laws
relating to taxes, environmental protection, occupational health and safety,
product quality and safety, communications and employment and labor matters,
except in each case such as does not constitute a Material Adverse Effect.

 

3.10                           Brokers
or Finders. Neither the Company nor any of the Subsidiaries has dealt with
any broker or finder in connection with the transactions contemplated by this
Agreement or the Transaction Documents, and except as set forth in Schedule
2-3.10 to the Disclosure Schedule, none of the Company and the Subsidiaries
has incurred, or shall incur, directly or indirectly, any liability for any
brokerage or finders’ fees or agents’ commissions or any similar charges in
connection with this Agreement or the Transaction Documents, or any transaction
contemplated hereby or thereby.

 

3.11                           Absence
of Litigation. Except as set forth in Schedule 2-3.11 to the
Disclosure Schedule, there are no pending or, to the Company’s knowledge,
threatened actions, suits, claims, proceedings or investigations against or involving
the Company or any of the Subsidiaries, which if adversely decided, would cause
a Material Adverse Effect.

 

3.12                           No
Undisclosed Liabilities; Indebtedness. Except as set forth in Schedule
2-3.12, 

 

7

 

since the
Financial Statement Date, the Company and the Subsidiaries have incurred no
liabilities or obligations, whether known or unknown, asserted or unasserted,
fixed or contingent, accrued or unaccrued, matured or unmatured, liquidated or
unliquidated, or otherwise, other than liabilities and obligations that arose
in the ordinary course of business and do not constitute a Material Adverse
Effect. Except for indebtedness reflected in the Company’s Financial Statements
and as set forth in Schedule 2-3.12 to the Disclosure Schedule, the
Company has no indebtedness outstanding, fixed or contingent, as of the date
hereof. The Company is not in default with respect to any outstanding
indebtedness or any instrument relating thereto.

 

3.13                           Contracts.
Except as set forth in Schedule 2-3.13, none of the Company and the
Subsidiaries are a party to any written or oral executory contract or
commitment not made in the ordinary course of business and, whether or not made
in the ordinary course of business, none of the Company and the Subsidiaries
are a party to any written or oral executory (i) contract or commitment with
any labor union, (ii) contract or commitment for the future purchase of fixed
assets, materials, supplies, or equipment involving an amount in excess of
$25,000, (iii) contract of commitment for the employment of any executive
officer or any contract with any other individual for employment, consulting or
other services involving an amount in excess of $75,000 per year, (iv) bonus,
pension, profit-sharing, retirement, stock purchase, stock option, or
extraordinary hospitalization, medical insurance or similar plan, contract or
understanding in effect with respect to employees or any of them or the
employees of others, (v) agreements, indentures or commitments relating to the
borrowing of money or to the mortgaging, pledging or otherwise placing of a
lien on any assets of the Company or a Subsidiary, (vi) guaranty of any
obligation for borrowed money or otherwise, (vii) lease or agreement under
which the Company or a Subsidiary is the lessee of any material property, real
or personal, or is the lessor of or permits any third party to hold or operate,
any material property, real or personal, owned or controlled by the Company or
a Subsidiary, (viii) agreement or other commitment for capital expenditures in
excess of $25,000 in the aggregate, (ix) contract or agreement under which the
Company or a Subsidiary is obligated to pay any broker’s fees, finder’s fees or
any such similar fees to any third party, (x) contract, agreement or commitment
under which the Company or a Subsidiary has issued, or may become obligated to
issue, any shares of capital stock of the Company or a Subsidiary, or any
warrants, options, convertible securities or other commitments pursuant to
which the Company or a Subsidiary is or may become obligated to issue any
shares of its capital stock, or (xi) any other contract, agreement, arrangement
or understanding which is material to the business of the Company and the
Subsidiaries, taken as a whole (collectively (i) through (xi), “Material Contracts”). The Company
has furnished to counsel for the Purchaser true and correct copies of the
Material Contracts. All Material Contracts are legal, valid, binding and in
full force and effect and are enforceable by the Company and the relevant
Subsidiaries in accordance with their respective terms, except as such may be
limited by bankruptcy, insolvency, reorganization or other laws affecting
creditors’ rights generally and by general equitable principles.

 

3.14                           Title
to Assets. Each of the Company and the Subsidiaries has good and marketable
title to all real and personal property owned by it that is material to the
business of the Company and the Subsidiaries, in each case, free and clear of
all liens and encumbrances, except those, if any, incurred in the ordinary
course of business consistent with past practice.

 

3.15                           Labor
Relations. No labor or employment dispute exists or, to the 

 

8

 

knowledge of
the Company, is imminent or threatened, with respect to any of the employees or
consultants of the Company or a Subsidiary that constitutes or will constitute
a Material Adverse Effect.

 

3.16                           Intellectual
Property.

 

(a)                                  The
Company or a Subsidiary is the sole and exclusive owner of, or has the
exclusive right to use, all Intellectual Property used or contemplated for use
in the conduct of the Company’s business, including without limitation, the
Intellectual Property identified in Schedule 2-3.16(a)(1). All Intellectual
Property identified in Schedule 2-3.16(a)(1) was conceived, developed,
reduced to practice or otherwise made by or for the Company or a Subsidiary by
the current or former employees, consultants or independent contractors of the
Company or a Subsidiary, or its predecessors-in-interest (each of whom has
validly assigned or is obligated to assign all of his or her right, title and
interest therein in writing to the Company or a Subsidiary) or was purchased
and is owned or licensed by the Company or a Subsidiary, or its
predecessors-in-interest, free and clear of claims and rights of any other
Person. Except as set forth in Schedule 2-3.16(a)(2) to the Disclosure
Schedule, there are no outstanding options, licenses, agreements, claims,
encumbrances or shared ownership of interests of any kind relating to any
Intellectual Property owned, licensed, conceived, developed, reduced to
practice or otherwise made by or for the Company or its Subsidiaries, including
without limitation the Intellectual Property identified in Schedule
2-3.16(a)(1). Each of the Company and the Subsidiaries has taken all
commercially reasonable steps to establish and preserve its ownership, and all
rights in, any Intellectual Property owned, licensed, conceived, developed,
reduced to practice or otherwise made by or for the Company or its
Subsidiaries, including without limitation the Intellectual Property listed in Schedule
2-3.16(a)(1). All necessary registration, maintenance and renewal fees for
the Intellectual Property listed in Schedule 2-3.16(a)(1) are currently
satisfied. All assignments, security agreements, certifications or other
relevant documents and/or agreements that may affect any rights or interests of
the Intellectual Property identified in Schedule 2-3.16(a)(1) have been
properly filed with the relevant patent, copyright, trademark or other
authority in the United States or relevant foreign jurisdiction.

 

(b)                                 To
the Company’s knowledge, there have been no claims made against the Company or
any of the Subsidiaries asserting the invalidity, abuse, misuse or
unenforceability of any of the Company’s Intellectual Property or interference
of the Company’s Intellectual Property with the rights of others and, to the
Company’s knowledge, there are no reasonable grounds for any such claims. To
the Company’s knowledge, no Person affiliated with the Company or the
Subsidiaries has wrongfully acquired, exploited, employed, disclosed,
converted, misappropriated or used any trade secrets or any confidential
information or documentation proprietary to any former employer or any other
person, and no person affiliated with the Company or the Subsidiaries has
violated any confidential relationship which such person may have had with any
third party. To the Company’s knowledge, there have been no claims made against
the Company or its Subsidiaries, or against any activity, product, service or
offering of the Company or its Subsidiaries, for any infringement, misuse,
misappropriation, conversion or violation of any Intellectual Property rights
of any third party, and, to the Company’s knowledge, there are no reasonable
grounds for any such claims. To the Company’s knowledge, none of its planned
activities, products, services or offerings will infringe, misuse, 

 

9

 

misappropriate, convert or in any way violate any Intellectual Property
rights of any third party, and, to the Company’s knowledge, there would be no
reasonable grounds for any such claim.

 

(c)                                  Except
as set forth in Schedule 2-3.16(c), to the Company’s knowledge, no third
party has infringed, misused, misappropriated, converted or violated any of the
Company’s Intellectual Property.

 

(d)                                 Except
as set forth in Schedule 2-3.16(d) to the Disclosure Schedule, no
royalties, honorariums or fees are or will be payable by the Company or any of
the Subsidiaries to other Persons by reason of the ownership or use by the
Company (or by reason of any other relationship with other Persons, contractual
or otherwise) of the Intellectual Property or by reason of the conduct of its
normal business activities or marketing or sale of any of its existing or
planned products, services or activities.

 

3.17                           Subsidiaries;
Joint Ventures. Except for the Subsidiaries listed in Schedule 2-3.17
to the Disclosure Schedule, the Company has no subsidiaries and (i) does not
hold equity interests, directly or indirectly, in any other Person or have any
obligations to acquire equity interests in any other Person, and (ii) is not a
participant in any joint venture, partnership, or similar arrangement material
to the business of the Company and the Subsidiaries.

 

3.18                           Taxes. The Company
and each of the Subsidiaries has filed (or has had filed on its behalf), will
timely file or will cause to be timely filed, or has timely filed for an
extension of the time to file, all material Tax Returns (as defined below)
required by applicable law to be filed by it or them prior to or as of the date
hereof, and such Tax Returns are, or will be at the time of filing, true,
correct and complete in all material respects. Each of the Company and the
Subsidiaries has paid (or has had paid on its behalf) or, where payment is not
yet due, has established (or has had established on its behalf and for its sole
benefit and recourse) or will establish or cause to be established in
accordance with United States generally accepted accounting principles on or
before the date hereof an adequate accrual for the payment of, all material
Taxes (as defined below) due with respect to any period ending prior to or as
of the date hereof. “Taxes”
shall mean any and all taxes, charges, fees, levies or other assessments,
including income, gross receipts, excise, real or personal property, sales,
withholding, social security, retirement, unemployment, occupation, use, goods
and services, license, value added, capital, net worth, payroll, profits,
franchise, transfer and recording taxes, fees and charges, and any other taxes,
assessment or similar charges imposed by the Internal Revenue Service or any
taxing authority (whether state, county, local or foreign) (each, a “Taxing Authority”),
including any interest, fines, penalties or additional amounts attributable to
or imposed upon any such taxes or other assessments. “Tax Return” shall
mean any report, return, document, declaration or other information or filing
required to be supplied to any Taxing Authority, including information returns,
any documents with respect to accompanying payments of estimated Taxes, or with
respect to or accompanying requests for extensions of time in which to file any
such return, report, document, declaration or other information. There are no
claims or assessments pending against the Company or any of the Subsidiaries
for any material alleged deficiency in any Tax, and neither the Company nor any
of the Subsidiaries has been notified in writing of any material proposed Tax
claims or assessments against the Company or any of the Subsidiaries. No Tax
Return of the Company or any of the Subsidiaries is or has been the subject of
an examination by a Taxing Authority. Each of the Company and the Subsidiaries
has withheld 

 

10

 

from each payment made to any of its past or present employees,
officers and directors, and any other person, the amount of all material Taxes
and other deductions required to be withheld therefrom and paid the same to the
proper Taxing Authority within the time required by law.

 

3.19                           Pensions
and Benefits.

 

(a)                                  None
of (i) any current or former directors, officers, employees or consultants of
the Company has any present or future right to benefits and which are
contributed to, sponsored by or maintained by the Company or any of the
Subsidiaries, or (ii) the Company or any of the Subsidiaries has any present or
future liability under any “employee benefit plan” within the meaning of
Section 3(3) of the United States Employee Retirement Income Security Act of
1974 (“ERISA”), including without
limitation, multiemployer plans within the meaning of Section 3(37) of ERISA,
and all retirement, profit sharing, stock option, stock bonus, stock purchase,
severance, fringe benefit, deferred compensation, and other employee benefit
programs, plans, or arrangements, whether or not subject to ERISA.

 

(b)                                 No
stock options, stock appreciation rights or other equity-based awards issued or
granted by the Company are subject to the requirements of Section 409A of the
Code.   Each “nonqualified deferred compensation plan” (as such term
is defined under Section 409A(d)(1) of the Code and the guidance thereunder)
under which the Company  makes, is obligated to make or promises to
make, payments (each, a “409A Plan”)
complies in all material respects, in both form and operation, with the
requirements of Section 409A of the Code and the guidance thereunder.  No
payment to be made under any 409A Plan is, or to the knowledge of the
Company will be, subject to the penalties of Section 409A(a)(1) of the
Code.

 

3.20                           Private
Placement; Communications with Purchaser. Neither the Company nor any
person acting on the Company’s behalf has sold or offered to sell or solicited
any offer to buy the Shares, Warrants, Warrant Shares or Conversion Shares by
means of any form of general solicitation or advertising. None of the Company,
its Affiliates and any person acting on the Company’s behalf has, directly or
indirectly, at any time within the past six (6) months, made any offer or sale
of any security or solicitation of any offer to buy any security under
circumstances that would (i) eliminate the availability of the exemption from
registration under Regulation D, or other exemption, under the Securities Act
in connection with the offer, sale or issuance of the Shares, Conversion
Shares, Warrants or Warrant Shares as contemplated hereby or by the terms of
the Transaction Documents or (ii) cause the offering or issuance of the Shares,
Conversion Shares, Warrants or Warrant Shares pursuant to this Agreement or any
of the Transaction Documents to be integrated with prior offerings by the
Company for purposes of any applicable law, regulation or stockholder approval
provisions in a manner that would eliminate the availability of the exemption
described in the immediately preceding clause (i) or require any stockholder
approval, except as has been obtained pursuant to the Exchange Act.

 

3.21                           Regulatory
Matters. None of the Company and the Subsidiaries is, or is an Affiliate
of, or following the receipt of the proceeds of this offering will be, an “investment
company” within the meaning of the Investment Company Act of 1940, as amended. None
of the Company and the Subsidiaries is a United States real property holding
corporation within the meaning of the Foreign Investment in Real Property Tax
Act of 1980.

 

11

 

3.22                           Material
Changes. Except as set forth in Schedule 2-3.22 to the Disclosure
Schedule, since the Financial Statement Date, the Company and the Subsidiaries,
taken as a whole, have conducted their business only in the ordinary course,
consistent with past practice, and since such date there has not occurred a
Material Adverse Effect. Since the Financial Statement Date and except as
disclosed in Schedule 2-3.22 or pursuant hereto or any Transaction
Document, there has not occurred: (i) any amendment or change in the charter
documents or By-laws of the Company or the Subsidiaries; (ii) any (A)
incurrence, assumption or guarantee by the Company or the Subsidiaries of any
debt for borrowed money other than (x) equipment leases made in the ordinary
course of business, consistent with past practice and (y) any such incurrence,
assumption or guarantee with respect to an amount of $25,000 or more; (B)
issuance or sale of any securities convertible into or exchangeable for
securities of the Company or any Subsidiary other than to directors, employees
and consultants pursuant to existing equity compensation or stock purchase
plans of the Company and its Subsidiaries; (C) issuance or sale of options or
other rights to acquire from the Company or any of the Subsidiaries, directly
or indirectly, securities of the Company or any Subsidiary or any securities
convertible into or exchangeable for any such securities, other than options
issued to directors, employees and consultants in the ordinary course of
business, consistent with past practice; (D) issuance or sale of any stock,
bond or other corporate security other than to directors, employees and
consultants pursuant to existing equity compensation or stock purchase plans of
the Company and its Subsidiaries; (E) declaration or making of any payment or
distribution to stockholders or purchase or redemption of any share of its
capital stock or other security other than to or from directors, officers and
employees of the Company or the Subsidiaries as compensation for or in
connection with services rendered to the Company or the Subsidiaries (as
applicable) or for reimbursement of expenses incurred on behalf of the Company
or the Subsidiaries (as applicable); (F) sale, assignment or transfer of any of
its intangible assets except in the ordinary course of business, consistent
with past practice, or cancellation of any debt or claim except in the ordinary
course of business, consistent with past practice; (G) waiver of any right of
substantial value whether or not in the ordinary course of business; (H)
material change in officer compensation, except in the ordinary course of
business and consistent with past practice; or (I) other commitment (contingent
or otherwise) to do any of the foregoing; (iii) any creation, sufferance or
assumption by the Company or any of the Subsidiaries of any lien on any asset
or any making of any loan, advance or capital contribution to or investment in
any Person, in an aggregate amount which exceeds $25,000 outstanding at any
time; (iv) any entry into, amendment of, relinquishment, termination or
non-renewal by the Company or the Subsidiaries of any Material Contract, other
than in the ordinary course of business, consistent with past practice; or (v)
any transfer or grant of a right with respect to the Intellectual Property
owned or licensed by the Company or the Subsidiaries, except as among the
Company and the Subsidiaries.

 

3.23                           Regulatory
Permits. The Company and the Subsidiaries possess all certificates,
approvals, authorizations, licenses, permits and other rights issued by the
appropriate federal, state, local or foreign regulatory authorities necessary
to conduct their businesses, now conducted or proposed to be conducted, except
where the failure to possess such permits does not constitute a Material
Adverse Effect (the “Material
Permits”), and the Company has not received any written notice
of proceedings relating to, or any basis for the denial, revocation or
modification of any Material Permits. All such Material Permits are in full
force and effect and are not the subject of any pending or, to the knowledge of
the Company, threatened challenge or 

 

12

 

other attack
by appeal or direct proceeding or otherwise.

 

3.24                           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 for the business in which the Company and the
Subsidiaries are engaged. The Company has no reason to believe that it will not
be able to renew existing insurance coverage for itself and the Subsidiaries as
and when such coverage expires or to obtain similar coverage from similar
insurers as may be necessary or appropriate to continue business.

 

3.25                           Disclosure.
All disclosure provided to the Purchaser regarding the Company and the
Subsidiaries, their business and the transactions contemplated hereby,
including the Schedules to this Agreement furnished by or on behalf of the
Company, are true and correct in all material respects. The Company
acknowledges and agrees that the Purchaser makes no or has not made any
representations or warranties with respect to the transactions contemplated
hereby other than those specifically set forth in Section 4 hereof.

 

3.26                           Investigation.
It shall be no defense to an action for breach of this Agreement that the
Purchaser or their agents have (or have not) made investigations into the
affairs of the Company and the Subsidiaries or that the Company did not or
could not have known of the misrepresentation or breach of warranty (unless
expressly qualified by knowledge). Damages for breach of a representation or
warranty or other provision of this Agreement shall not be diminished by any
alleged tax savings as a result thereof.

 

3.27                           Affiliate Transactions.

 

(a)                                  Other
than (i) standard employee benefits generally made available to all employees,
(ii) standard director and officer indemnification agreements approved by the
Board, (iii) agreements contemplated in Section 3.28 below, and (iv) as
set forth in Schedule 2-3.27(a) to the Disclosure Schedule, there are no
agreements, understandings or proposed transactions between the Company and any
of its officers, directors, consultants, employees, shareholders or Affiliates.

 

(b)                                 Except
as set forth in Schedule 2-3.27(b) to the Disclosure Schedule, the
Company is not indebted, directly or indirectly, for deferred salary or other
compensation, money borrowed or otherwise, to any of the directors, officers,
employees or shareholders of the Company or a Subsidiary or to their respective
spouses or children or to any Affiliate of any of the foregoing, other than in
connection with expenses or advances of expenses incurred in the ordinary
course of business or employee relocation expenses and for other customary
employee benefits made generally available to all employees. Except as set
forth in Schedule 2-3.27(b) to the Disclosure Schedule, none of the
Company’s directors, officers, employees, shareholders or any members of their
immediate families, or any Affiliate of the foregoing (i) is, directly or
indirectly, indebted to the Company or a Subsidiary, (ii) to the Company’s
knowledge, has any direct or indirect ownership interest in any firm or
corporation with which the Company or a Subsidiary has any business
relationship or dealings, or any firm or corporation which competes with the
Company or a Subsidiary (except ownership interests not exceeding two percent
(2%) of the outstanding capital stock of publicly traded companies), or (iii)
has any material commercial, industrial, banking, consulting, legal,
accounting, charitable 

 

13

 

or familial relationship with any of the Company’s customers,
suppliers, service providers, joint venture partners, licensees and competitors.

 

3.28                           Confidential Information and Invention
Assignment Agreements. Except
as set forth in Schedule 2-3.28 to the Disclosure Schedule, each
current and former director, officer, employee, and, to the extent reasonably
deemed necessary to protect the Company’s interests, consultant of the Company
or a Subsidiary has executed an agreement with the Company or a Subsidiary
regarding confidentiality and proprietary information substantially in the form
or forms delivered to the counsel for the Purchaser (the “Confidential Information Agreements”).
No current or former director, officer, employee or consultant has excluded
works or inventions from his or her assignment of inventions pursuant to such
employee’s or consultant’s Confidential Information Agreement. The Company is
not aware that any director, officer, employee or consultant is in violation
thereof. All employees of the Company and its Subsidiaries actively and
directly involved in any research and development activities are required to
and have executed employment agreements that obligate them to assign to the
Company and its Subsidiaries all rights in any Intellectual Property conceived,
developed, reduced to practice or in any way made in the course of their
employment or work and to assist and fully cooperate in all activities, and
execute any documents, necessary to secure, preserve and perfect the Company’s
rights and interests in any such Intellectual Property. All employees, and, to
the extent reasonably deemed necessary to protect the Company’s interests,
consultants and advisors, are and have been required to execute a
confidentiality agreement upon the commencement of an employment or consulting
relationship, which agreement provides that all trade secrets and inventions
conceived by the individual and all confidential information developed or made
known to the individual during the term of his or her relationship with the
Company or its Subsidiaries shall be the exclusive property of the Company or
its Subsidiaries and shall be kept confidential and not disclosed to third
parties, except in specified circumstances.

 

3.29                           Nondisclosure.
Except as set forth in Schedule 2-3.29 or pursuant to a binding
non-disclosure agreement, the Company has not disclosed to any third party any
Company trade secret or other confidential or proprietary information.

 

3.30                           Collaboration.
Except as set forth in Schedule 2-3.30, the Company has not funded any
research or development efforts of any third party or engaged in any joint
research or development efforts with any third party.

 

3.31                           Government
Funding. Except for the agreements set forth in Schedule 2-3.31, the
Company and its Subsidiaries are not a party to any agreement that provided or
provides government funding for any Company research, development or marketing
efforts, joint or otherwise. The Company and its Subsidiaries have complied
with all provisions of the agreements set forth in Schedule 2-3.31
necessary to preserve their rights in any of the Intellectual Property. Except
for the agreements set forth in Schedule 2-3.31, the Company and its
Subsidiaries are not a party to any agreement with any government that (a)
provides for any governmental ownership interest, contingent or otherwise, in
any Intellectual Property, (b) that imposes on the Company or its Subsidiaries
any requirement to license, contingent or otherwise, any Intellectual Property,
or (c) that imposes any governmental requirement, restriction or encumbrance,
contingent or otherwise, on the use of the Intellectual Property or the conduct
of the business of the Company or its Subsidiaries.

 

14

 

4.                                       Representations
and Warranties of the Purchaser. The Purchaser represents and warrants to
the Company as follows:

 

4.1                                 Authorization.
All action on the part of the Purchaser and, if applicable, its officers,
directors, managers, members, shareholders and/or partners necessary for the
authorization, execution, delivery and performance of this Agreement and the
Investor’s Rights Agreement, and the consummation of the transactions
contemplated herein and therein, has been taken. When executed and delivered,
each of this Agreement and the Investor’s Rights Agreement will constitute the
legal, valid and binding obligation of the Purchaser, enforceable against the
Purchaser in accordance with its terms, except as such may be limited by
bankruptcy, insolvency, reorganization or other laws affecting creditors’
rights generally and by general equitable principles. The Purchaser has all
requisite power and authority to enter into each of this Agreement and the
Investor’s Rights Agreement, and to carry out and perform its obligations under
the terms hereof and thereof.

 

4.2                                 Purchase
Entirely for Own Account. The Purchaser is acquiring the Shares and the Warrants
for its own account for investment and not for resale or with a view to
distribution thereof in violation of the Securities Act.

 

4.3                                 Investor
Status; Etc. The Purchaser certifies and represents to the Company that it
is an institutional “Accredited Investor” as such term is defined in Rule 501 of
Regulation D promulgated under the Securities Act and was not organized for the
purpose of acquiring any of the Shares, Conversion Shares, Warrants or Warrant
Shares. The Purchaser’s financial condition is such that it is able to bear the
risk of holding the Shares and the Warrants, and any Conversion Shares and
Warrant Shares, for an indefinite period of time and the risk of loss of its
entire investment. The Purchaser has sufficient knowledge and experience in
making investments such as contemplated under this Agreement so as to be able
to evaluate the risks and merits of its investment in the Company.

 

4.4                                 Securities
Not Registered. The Purchaser understands that the Shares, Conversion
Shares, Warrants and Warrant Shares have not been registered under the
Securities Act, by reason of their issuance by the Company in transactions
exempt from the registration requirements of the Securities Act, and that the
Shares, Conversion Shares, Warrants and Warrant Shares must continue to be held
by the Purchaser unless a subsequent disposition thereof is registered under
the Securities Act, including pursuant to a registration statement under the
Investor’s Rights Agreement, or is exempt from such registration. The Purchaser
understands that the exemptions from registration afforded by Rule 144
promulgated under the Securities Act (the provisions of which are known to it)
depend on the satisfaction of various conditions, and that, if applicable, Rule
144 may afford the basis for sales only in limited amounts.

 

4.5                                 No
Conflict. The execution and delivery of this Agreement and the Investor’s
Rights Agreement by the Purchaser, and the consummation of the transactions
contemplated hereby and thereby, do not and will not conflict with or result in
any violation of (i) the organizational documents of the Purchaser or (ii) any
judgment, order, statute, law, ordinance, rule or regulations, applicable to
the Purchaser.

 

15

 

4.6                                 Brokers.
The Purchaser has not retained, utilized or been represented by any broker or
finder in connection with the transactions contemplated by this Agreement or
the Transaction Documents, and the Purchaser has not incurred, and shall not
incur, directly or indirectly, any liability for any brokerage or finders’ fees
or agents’ commissions or any similar charges in connection with this Agreement
or the Transaction Documents, or any transaction contemplated hereby or
thereby.

 

4.7                                 Consents.
All consents, approvals, orders and authorizations required on the part of the
Purchaser in connection with the Purchaser’s execution, delivery or performance
of this Agreement and the Investor’s Rights Agreement and the consummation of
the transactions contemplated herein and therein have been obtained and are
effective as of the date hereof.

 

4.8                                 Regulatory
Permits. The Purchaser possess all certificates, approvals, authorizations
and permits issued by the appropriate federal, state, local or foreign
regulatory authorities necessary for Purchaser to enter into this Agreement and
the Investor’s Rights Agreement and the consummate the transactions
contemplated herein and therein.

 

4.9                                 Disclosure
of Information. The Purchaser believes it has received adequate information
for it to decide whether or not to purchase the Shares and the Warrants. The
Purchaser further represents that it has had an opportunity to ask questions
and receive answers from the Company regarding the terms and conditions of the
offering of the Shares and the Warrants and the business, properties, prospects
and financial condition of the Company. The foregoing representation is made by
the Purchaser on the basis of and in reliance upon the representations and
warranties of the Company in Section 3 of this Agreement being true and
correct, and shall not operate to limit or otherwise modify such
representations and warranties or the right of the Purchaser to rely thereon. The
Purchaser’s decision to invest is based exclusively on the Company’s
representations in this Agreement and the results of the Purchaser’s
independent investigation. The Purchaser acknowledges that the Company and its
agents have not provided any legal or tax advice.

 

5.                                       Conditions
Precedent.

 

5.1.                              Conditions
to the Several Obligations of the Purchaser to Consummate the Closing. The
obligation of the Purchaser to consummate the Closing and to purchase and pay
for the Shares and Warrants to be purchased by it is subject to the
satisfaction (or waiver by the Purchaser) of the following conditions precedent:

 

(a)                                  The
representations and warranties of the Company contained herein shall be true
and correct on and as of the date hereof, the Closing Date. The Company shall
have performed or complied with all obligations and conditions herein required
to be performed or complied with by the Company on or prior to the Closing.

 

(b)                                 No
proceeding challenging, or seeking to prohibit, alter, prevent or materially
delay, this Agreement or the Transaction Documents, or the transactions
contemplated hereby or thereby, shall have been instituted before any court,
arbitrator or governmental body, agency or official or shall be pending against
or involving the Company.

 

16

 

(c)                                  This
Agreement and the Transaction Documents, and the transactions contemplated
hereby and thereby, shall not be prohibited by any law, rule, governmental
order or regulation. All necessary consents, approvals, licenses, permits,
orders and authorizations of, or registrations, declarations and filings with,
any governmental or administrative agency or of or with any other Person with
respect to any of the transactions contemplated hereby and thereby shall have
been duly obtained or made and shall be in full force and effect.

 

(d)                                 All
instruments and corporate proceedings of the Company in connection with the
transactions contemplated by this Agreement and the Transaction Documents shall
be satisfactory in form and substance to the Purchaser, and the Purchaser shall
have received copies (executed or certified, as may be appropriate) of all
documents which the Purchaser may have reasonably requested in connection with
such transactions.

 

(e)                                  The
Purchaser shall have received from Jones, Walker, Waechter, Poitevent, Carrère
& Denègre, L.L.P., outside counsel to the Company, an opinion addressed to
the Purchaser, dated the Closing Date and substantially in the form of Exhibit
D hereto.

 

(f)                                    The
Investor’s Rights Agreement shall have been executed and delivered to the
Purchaser by the Company.

 

(g)                                 The
Company shall have adopted and filed with the Secretary of State of the State
of Delaware in accordance with Delaware General Corporation Law on or before
the Closing the Certificate of Designations, which shall continue in full force
and effect on and as of the Closing Date.

 

(i)                                     The
Company shall have delivered, in form and substance satisfactory to the
Purchaser, a certificate dated as of the Closing Date and signed by the
secretary or another appropriate executive officer of the Company, certifying
(i) that attached copies of the Certificate of Incorporation (including the
Certificate of Designations), By-laws and resolutions of the Board approving
this Agreement, the Transaction Documents and the transactions contemplated
hereby and thereby, are all true, complete and correct and remain in full force
and effect as of the date hereof, and (ii) as to the incumbency and specimen
signature of each officer of the Company executing this Agreement, the
Transaction Documents and any other document delivered in connection herewith
on behalf of the Company.

 

(j)                                     The
Company shall deliver to the Purchaser a certificate in form and substance
satisfactory to the Purchaser, dated the Closing Date and signed by the Company’s
President, certifying that (i) the representations and warranties of the
Company contained in Section 3 hereof are true and correct in all
respects on the Closing Date and (ii) the Company has performed and complied
with all of the agreements and conditions set forth or contemplated herein that
are required to be performed or complied with by the Company on or before the
Closing.

 

5.2.                              Conditions
to the Obligation of the Company to Consummate the Closing. The obligation
of the Company to consummate the Closing and to issue and sell the Shares to
the 

 

17

 

Purchaser at
the Closing is subject to the satisfaction (or waiver by the Company) of the
following conditions precedent:

 

(a)                                  The
representations and warranties of the Purchaser contained herein shall be true
and correct in all respects on and as of the date hereof and the Closing Date.

 

(b)                                 The
Investor’s Rights Agreement shall have been executed and delivered by the
Purchaser.

 

(c)                                  The
Purchaser shall have performed all obligations and conditions herein required
to be performed or complied with by the Purchaser on or prior to the Closing.

 

(d)                                 No
proceeding challenging, or seeking to prohibit, alter, prevent or materially
delay, this Agreement or the Transaction Documents, or the transactions
contemplated hereby or thereby, shall have been instituted before any court,
arbitrator or governmental body, agency or official or shall be pending against
or involving the Purchaser.

 

(e)                                  This
Agreement and the Transaction Documents, and the transactions contemplated
hereby and thereby, shall not be prohibited by any law, rule, governmental
order or regulation. All necessary consents, approvals, licenses, permits,
orders and authorizations of, or registrations, declarations and filings with,
any governmental or administrative agency or of or with any other Person with
respect to any of the transactions contemplated hereby and thereby shall have
been duly obtained or made and shall be in full force and effect.

 

6.                                       Certain
Covenants and Agreements.

 

6.1.                              Transfer
of Securities. The Purchaser agrees that it shall not sell, assign, pledge,
transfer or otherwise dispose of or encumber any of the Shares, Conversion
Shares, Warrants or Warrant Shares, except (i) pursuant to an effective
registration statement under the Securities Act, including such as required
under the Investor’s Rights Agreement, or (ii) pursuant to an available
exemption from registration under the Securities Act (including sales permitted
pursuant to Rule 144) and applicable state securities laws. Any transfer or
purported transfer of the Shares in violation of this Section 6.1 shall
be void. The Company shall not be required to register any transfer of the
Shares in violation of this Section 6.1. The Company may, and may
instruct any transfer agent for the Company, to place such stop transfer orders
as may be required on the transfer books of the Company in order to ensure
compliance with the provisions of this Section 6.1.

 

6.2.                              Legends.

 

(a)                                  To
the extent applicable, each certificate or other document evidencing the
Shares, the Conversion Shares and the Warrant Shares shall be endorsed with the
legend set forth below and any other legends that may be required by applicable
state “blue sky” laws, and the Purchaser covenants that, except to the extent
such restrictions are waived by the Company, it shall not transfer the shares
represented by any such certificate without complying with the restrictions on
transfer described in this Agreement and the legends endorsed on such 

 

18

 

certificate:

 

THE SHARES
REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, AND MAY NOT BE OFFERED OR SOLD IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION STATEMENT UNDER SAID ACT OR PURSUANT TO AN AVAILABLE
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, REGISTRATION UNDER SAID
ACT.

 

(b)                                 The
legend set forth in Section 6.2(a) shall be removed from the
certificates evidencing the Shares, the Conversion Shares and the Warrant
Shares, (i) in connection with any sale of such Shares, Conversion Shares or
Warrant Shares pursuant to Rule 144 or any effective registration statement,
including such as required under the Investor’s Rights Agreement, or (ii) if
such Shares, Conversion Shares or Warrant Shares are eligible for sale under
Rule 144(k) (and the holder of such Shares, Conversion Shares or Warrant Shares
has submitted a written request for removal of the legend indicating that the
holder is in compliance with the applicable provisions of Rule 144(k)) or (iii)
if such legend is not required under applicable requirements of the Securities
Act (including interpretations and pronouncements issued by the Staff of the
SEC) (and the holder of such Shares, Conversion Shares or Warrant Shares has submitted
a written request for removal of the legend indicating that such legend is not
required under applicable requirements of the Securities Act (including such
interpretations and pronouncements)) and, if reasonably requested by the
Company, the Company has received from Purchaser’s counsel an opinion, in such
form as is reasonably satisfactory to Company’s counsel, that such legend is
not so required. The Company shall cause its counsel to issue a legal opinion
to the Company’s transfer agent, if required, promptly upon the occurrence of
any of the events in clauses (i), (ii) or (iii) above to effect the removal of
the legend on certificates evidencing the Shares, the Conversion Shares or the
Warrant Shares and shall also cause its counsel to issue a “blanket” legal
opinion to the Company’s transfer agent, if required, promptly after the
effective date of any registration statement, including such as required under
the Investor’s Rights Agreement, covering the resale of the Shares, any
Conversion Shares or Warrant Shares to allow sales without restriction pursuant
to such registration statement. The Company agrees that at such time as such
legend is no longer required under this Section 6.2(b), it will,
promptly following the delivery by the Purchaser to the Company or the Company’s
transfer agent of a certificate representing the Shares, Conversion Shares or
Warrant Shares issued with such legend, deliver or cause to be delivered to the
Purchaser a certificate representing such Shares, Conversion Shares or Warrant
Shares that is free from such legend; provided, however, that in the case of removal of the legend in
connection with a sale pursuant to Rule 144, the holder of such Shares,
Conversion Shares or Warrant Shares has submitted a written request for removal
of the legend indicating that the holder has complied with the applicable
provisions of Rule 144, including delivery of a broker’s representation letter
and a copy of a Form 144 filed in connection with such sale. 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.

 

6.3                                 Publicity.
Except to the extent required by applicable laws, rules, regulations or stock
exchange requirements, the Company shall not, without the prior written consent
of the Purchaser, disclose or publish the name of the Purchaser in any press
release, 

 

19

 

public
announcement, website or otherwise. Except to the extent required by applicable
laws, rules, regulations or stock exchange requirements, the Purchaser shall
not, without the written consent of the Company, make any public announcement
or issue any press release with respect to the transactions contemplated by
this Agreement. The parties agree that the Company shall issue a press release
promptly following (and in no event more than one Business Day after) the
Closing and, on or before 9:30 a.m., New York time, on the first trading day
following the Closing Date describing the terms of the transactions
contemplated by this Agreement and the Transaction Documents, the contents of
which press release shall have been approved by the Purchaser, and shall file
such press release under cover of a Current Report on Form 8-K, attaching such
press release and the material transaction documents (including, without
limitation, this Agreement and the Investor’s Rights Agreement) as exhibit to
such filing (including all attachments, the “8-K
Filing”).

 

6.4                                 Filing
of Information. 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 pursuant to all applicable securities laws,
including the Exchange Act. The Company further covenants that it will take
such further action as any holder of Shares, Conversion Shares and Warrant
Shares may reasonably request to satisfy the provisions of Rule 144 applicable
to the issuer of securities relating to transactions for the sale of securities
pursuant to Rule 144.

 

6.5                                 Use
of Proceeds. The Company intends that the proceeds from the sale of the
Shares shall be used by the Company to fund the Company’s general corporate and
working capital requirements.

 

6.6                                 Integration.
The Company shall not sell, offer for sale or solicit offers to buy or
otherwise negotiate in respect of any security (as defined in Section 2 of the
Securities Act) that would be integrated with the offer or sale of the Shares
in a manner that would require the registration under the Securities Act of the
sale of the Shares or the issuance of the Warrants pursuant hereto.

 

6.7                                 Reservation
of Common Stock for Issuance; Listing of Shares. The Company agrees to
reserve from its duly authorized capital stock the total number of shares of
Common Stock issuable upon the conversion in full of the Conversion Shares and
the Warrant Shares. The Company agrees that at any time, if and when its shares
of Common Stock are listed on a national or international securities exchange
or admitted for quotation on any national automated quotation system, it will
use reasonable efforts to promptly list and qualify the Conversion Shares and
Warrant Shares for trading on such exchange or quotation on such system.

 

6.8                                 Required
Approvals. As promptly as practicable after the date of this Agreement, the
Company shall make, or cause to be made, all filings with any governmental or
administrative agency or any other Person necessary to consummate the
transactions contemplated hereby.

 

6.9                                 Inspection
Rights. The Purchaser, or any officer, employee, agent or representative
thereof, shall have the right to visit and inspect any of the properties of the

 

20

 

Company or any
of the Subsidiaries and to review and copy such information regarding the
affairs, finances, accounts and operations of the Company and its subsidiaries
as is reasonably requested from time to time.

 

6.10                           No Commitment for Additional Financing. The Company acknowledges and agrees that the Purchaser has not made any
representation, undertaking, commitment or agreement to provide or assist the
Company in obtaining any financing, investment or other assistance, other than
the purchase of the Shares and the Warrants as set forth herein and subject to
the conditions set forth herein. In addition, the Company acknowledges and
agrees that (i) no statements, whether written or oral, made by the
Purchaser or its representatives on or after the date of this Agreement shall
create an obligation, commitment or agreement to provide or assist the Company
in obtaining any financing or investment, (ii) the Company shall not rely
on any such statement by the Purchaser or its representatives and (iii) an
obligation, commitment or agreement to provide or assist the Company in
obtaining any financing or investment may only be created by a written
agreement of the Purchaser, setting forth the terms and conditions of such
financing or investment and stating that the parties intend for such writing to
be a binding obligation or agreement. The Purchaser shall have the right, in it
sole and absolute discretion, to refuse or decline to participate in any other
financing of or investment in the Company, and shall have no obligation to
assist or cooperate with the Company in obtaining any financing, investment or
other assistance.

 

7.                                       Indemnification.

 

7.1                                 The
Company agrees to indemnify, defend and hold harmless the Purchaser and its
Affiliates and their respective officers, directors, agents, employees,
subsidiaries, partners, members and controlling persons (collectively, the “Purchaser Indemnitees”)
to the fullest extent permitted by law from and against any and all claims,
losses, liabilities, damages, deficiencies, judgments, assessments, fines,
settlements, costs or expenses (including administrative, judicial or
regulatory proceedings, interest, penalties, costs of investigation and
reasonable fees, disbursements and other charges of counsel) (collectively, “Losses”) based upon,
arising out of or otherwise in respect of any breach by the Company of any
representation, warranty, covenant or agreement of the Company contained in
this Agreement or in the Transaction Documents, or for any Losses claimed by
any broker or placement agent retained by the Company in connection with the
transactions contemplated hereby or thereby.

 

7.2                                 As
promptly as possible after receipt by a Purchaser Indemnitee under this Section
7 of notice of the threat, assertion or commencement of any claim, action
or proceeding, such Purchaser Indemnitee will, if a claim for indemnification
in respect thereof is to be made under this Section 7, notify the
Company in writing of the commencement thereof and the Company shall have the
right to participate in and, to the extent the Company desires, to assume at
its expense the defense thereof with counsel mutually satisfactory to the
parties; provided, however,
that the failure to notify the Company promptly of the threat, assertion or
commencement of any such claim, action or proceeding shall not relieve the
Company of any liability to the Purchaser Indemnitee under this Section 7
except (and only) to the extent that it shall be finally determined by a court
of competent jurisdiction (which determination is not subject to appeal or
further review) that such failure shall have proximately and materially 

 

21

 

adversely
prejudiced the Company.

 

7.3                                 If any Purchaser Indemnitee
shall have reasonably concluded that there may be one or more legal defenses
available to such Purchaser Indemnitee which are different from or additional
to those available to the Company, or that such claim or litigation involves or
could have an effect upon matters beyond the scope of the indemnity agreement
provided in this Section 7, the Company shall not have the right to
assume the defense of such action on behalf of such Purchaser Indemnitee, and
the Company shall reimburse such Purchaser Indemnitee for the fees and expenses
of one separate counsel, for all Purchaser Indemnitees, which are reasonably
related to the matters covered by the indemnity agreement provided in this Section
7. Subject to the foregoing, a Purchaser Indemnitee shall have the right to
employ separate counsel in any such action and to participate in the defense
thereof but the fees and expenses of such counsel shall not be at the expense
of the Company. The Company shall not be liable for any settlement of any
proceeding effected without its written consent, which consent shall not be
unreasonably withheld. The Company shall not, without the prior written consent
of the relevant Purchaser Indemnitee, effect any settlement of any pending
proceeding in respect of which such Purchaser Indemnitee is a party, unless
such settlement includes an unconditional release of such Purchaser Indemnitee
party from all liability on claims that are the subject matter of such
proceeding.

 

7.4.                              Time
Limit for Certain Claims.

 

(a)                                  The
representations and warranties of the Company under Section 3 of this
Agreement, regardless of any investigation made by the Purchaser or their
independent accounts or legal representatives, or any certificate, document or
other instrument delivered in connection herewith, shall survive for eighteen
(18) months after the Closing, except for (i) the representations and
warranties in Section 3.18 hereof (“Taxes”),
which shall survive until the last date liability connected with the Company’s
previous tax positions may be asserted by federal or state authorities, and
(ii) the representations and warranties in Sections 3.1, 3.4 and 3.5
hereof, which shall survive indefinitely. The Company will not be liable for
any Losses hereunder arising out of a breach of representation or warranty
unless a written claim for indemnification is given by the relevant Purchaser
Indemnitee to the Company on or prior to the expiration of such applicable time
limits.

 

(b)                                 Maximum
Amount. The Company shall not be liable hereunder for any Losses incurred
by the Purchaser on the value of its Shares and Warrant Shares as a result of a
breach of representation or warranty hereunder in excess of the purchase price
hereunder actually paid by the Purchaser for such Shares and Warrant Shares.

 

7.5                                 Applicability;
Non-Exclusivity. Notwithstanding any term to the contrary in this Section
7, the indemnification and contribution provisions of the Investor’s Rights
Agreement shall govern any claim made with respect to registration statements
filed pursuant thereto or sales made thereunder. The parties hereby acknowledge
and agree that in addition to remedies of the parties hereto in respect of any
and all claims relating to any breach or purported breach of any
representation, warranty, covenant or agreement that is contained in this
Agreement pursuant to the indemnification provisions of this Section 7,
all parties shall always retain the right to pursue and obtain injunctive
relief in addition to any other rights or remedies hereunder.

 

22

 

8.                                       Miscellaneous
Provisions.

 

8.1                                 Rights
Cumulative. Each and all of the various rights, powers and remedies of the
parties shall be considered to be cumulative with and in addition to any other
rights, powers and remedies which such parties may have at law or in equity in
the event of the breach of any of the terms of this Agreement. The exercise or
partial exercise of any right, power or remedy shall neither constitute the
exclusive election thereof nor the waiver of any other right, power or remedy
available to such party.

 

8.2                                 Pronouns.
All pronouns or any variation thereof shall be deemed to refer to the
masculine, feminine or neuter, singular or plural, as the identity of the
person, persons, entity or entities may require.

 

8.3                                 Notices.

 

(a)                                  Any
notices, reports or other correspondence (hereinafter collectively referred to
as “correspondence”) required or permitted to be given hereunder shall be given
in writing and shall be deemed given if sent by certified or registered mail
(return receipt requested), overnight courier or telecopy (with confirmation of
receipt), or delivered by hand to the party to whom such correspondence is
required or permitted to be given hereunder. An electronic communication (“Electronic Notice”)
shall be deemed written notice for purposes of this Section 8.3 if sent
with return receipt requested to the electronic mail address specified by the
receiving party either in this Section 8.3 or on Schedule 1
hereto. A copy of any such communication should also be sent in accordance with
the first sentence of this Section 8.3(a). Electronic Notice shall be
deemed received at the time the party sending Electronic Notice receives
verification of receipt by the receiving party.

 

(b)                                 All
correspondence to the Company shall be addressed as follows:

 

Uni-Pixel, Inc.

8708
Technology Forest Place

Suite 100

The Woodlands, Texas 77381

Attention: James Tassone

Facsimile: (281) 825-4599

Email: jtassone@unipixel.com

 

with copies to:

 

Jones, Walker, Waechter, Poitevent, Carrère & Denègre, L.L.P.

Four United Plaza

8555 United Plaza Boulevard

Baton Rouge, LA 70809

Attention: Scott D. Chenevert, Esq.

Facsimile: (225) 248-2010

Email: schenevert@joneswalker.com

 

23

 

(c)                                  All
correspondence to the Purchaser shall be addressed as follows:

 

Merrill Lynch Pierce, Fenner & Smith Incorporated

4 World Financial Center

New York, NY 10080

Attention: Lawrence A. First

Telecopy No.:  (212) 449-4296

 

with a copy to:

 

Skadden, Arps, Slate, Meagher & Flom LLP

1000 Louisiana, Suite 6800

Houston, TX 77002

Attention: Frank E. Bayouth

Telecopy No.: (713) 655-5115

 

(d)                                 Any
entity may change the address to which correspondence to it is to be addressed
by notification as provided for herein.

 

8.4                                 Captions.
The captions and paragraph headings of this Agreement are solely for the
convenience of reference and shall not affect its interpretation.

 

8.5                                 Expenses.
Each party shall pay all costs and expenses that it incurs with respect to the
negotiation, execution, delivery and performance of this Agreement and the
Transaction Documents; provided, however, that the Company shall, at the Closing, reimburse
the reasonable fees and expenses of Skadden, Arps, Slate, Meagher & Flom
LLP, counsel to the Purchaser, not to exceed $80,670.

 

8.6                                 Severability.
Should any part or provision of this Agreement be held unenforceable or in
conflict with the applicable laws or regulations of any jurisdiction, the
invalid or unenforceable part or provisions shall be replaced with a provision
which accomplishes, to the extent possible, the original business purpose of
such part or provision in a valid and enforceable manner, and the remainder of
this Agreement shall remain binding upon the parties hereto.

 

8.7                                 Governing
Law. This Agreement shall be governed by and construed in accordance with
the internal and substantive laws of the State of Delaware and without regard
to any conflicts of laws concepts which would apply the substantive law of some
other jurisdiction. The Company agrees that any action for the breach of this
Agreement may be prosecuted against it in the courts of the State of New York.

 

8.8                                 Waiver.
No waiver or delay in exercising of any term, provision or condition of this
Agreement, whether by conduct or otherwise, in any one or more instances, shall
be deemed to be, or be construed as, a further or continuing waiver of any such
term, provision or condition or as a waiver of any other term, provision or
condition of this Agreement.

 

24

 

8.9                                 Assignment.
The rights and obligations of any party hereto shall inure to the benefit of
and shall be binding upon the authorized successors, legal representatives and
permitted assigns of such party. The Company may not assign this Agreement or
any rights or obligations hereunder without the prior written consent of the
Purchaser. Subject to the provisions of Section 6 hereof, the Purchaser
may assign or transfer any or all of its rights under this Agreement to any
Person to which it may sell, assign, transfer or otherwise dispose of any of
its Shares, Conversion Shares, Warrants or Warrant Shares; provided,
however, that such assignee or transferee agrees in writing to be
bound, with respect to the transferred Shares, Conversion Shares, Warrants or
Warrant Shares, by the provisions hereof and of the Transaction Documents that
apply to the assigning or transferring Purchaser; whereupon such assignee or
transferee shall be deemed to be a “Purchaser” for all purposes of this
Agreement.

 

8.10                           Survival.
The respective representations and warranties given by the parties hereto shall
survive the Closing Date and the consummation of the transactions contemplated
herein as provided in Section 7.4 of this Agreement. The respective
covenants and agreements agreed to by a party hereto shall survive the Closing
Date and the consummation of the transactions contemplated herein in accordance
with their respective terms and conditions.

 

8.11                           Entire
Agreement. This Agreement, the exhibits and schedules hereto, the
Transaction Documents and the other documents delivered pursuant hereto
constitutes the entire agreement between the parties hereto respecting the
subject matter hereof and supersedes all prior agreements, negotiations,
understandings, representations and statements respecting the subject matter
hereof, whether written or oral.

 

8.12                           Amendments.
Any amendment, supplement or modification of or to any provision of this
Agreement, any waiver of any provisions of this Agreement shall be effective
only if made or given in writing and signed by the Company and the Purchaser.

 

8.13                           No
Third Party Rights. This Agreement is intended solely for the benefit of
the parties hereto and is not intended to confer any benefits upon, or create
any rights in favor of, any Person (including, without limitation, any
stockholder or debt holder of the Company) other than the parties hereto; provided, however, that
each of the Purchaser Indemnitees that are not Purchasers are entitled to all
rights and benefits as third party beneficiaries of Section 7 of this
Agreement.

 

8.14                           Counterparts.
This Agreement may be executed in any number of counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same document. The parties hereto confirm that any facsimile copy of another
party’s executed counterpart of this Agreement (or its signature page thereof)
will be deemed to be an executed original thereof.

 

[Signature Page Follows]

 

25

 

IN WITNESS
WHEREOF, the parties hereto have executed this Securities Purchase Agreement
under seal as of the day and year first above written.

 

 

	
   

  	
  UNI-PIXEL,
  INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name: Reed
  J. Killion

  
	
   

  	
   

  	
  Title:
  President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  PURCHASER:

  
	
   

  	
   

  
	
   

  	
  MERRILL
  LYNCH PIERCE, FENNER & SMITH 

  
	
   

  	
  INCORPORATED

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

 

EXHIBIT A

 

FORM OF INVESTOR’S RIGHTS AGREEMENT

 

 

EXHIBIT B

 

FORM OF CERTIFICATE OF DESIGNATIONS

 

 

EXHIBIT C

 

FORM OF WARRANT

 

 

EXHIBIT D

 

FORM OF OPINION

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00130-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00130-of-00352.parquet"}]]