Document:

Transition Agreement

 Exhibit 10.64 
 EXECUTION COPY 
 TRANSITION AGREEMENT 

This TRANSITION AGREEMENT (this “Agreement”) is made and entered into by and between Central European Distribution Corporation
, a Delaware corporation. (the “Company”), and William V. Carey (the “Executive”), dated as of July 9, 2012. 
 WHEREAS, the Executive is currently employed as President and Chief Executive Officer of the Company pursuant to the Second Amended and Restated Employment Agreement dated as of October 13, 2011 (as
amended, the “Employment Agreement”) and is currently serving as a member of the Company’s Board of Directors (the “Board”); and 
 WHEREAS, the Executive and the Company have mutually determined that it is appropriate for the Company to transition to a new President and Chief Executive Officer; and 

WHEREAS, the parties wish to set forth their mutual understanding as to their respective rights and obligations in connection with the
transition; 
 NOW, THEREFORE, in consideration of the foregoing premises and the mutual promises, terms, provisions and
conditions set forth in this Agreement, the parties hereby agree as follows: 
  

	1.	Separation Date. For purposes of this Agreement, the “Separation Date” shall be the effective date hereof. 

 

	2.	Resignation. The Executive hereby irrevocably resigns (a) his position as President and Chief Executive Officer of the Company, effective as of the date
hereof and (b) as a member of the Board, effective as of the date hereof, and, in each case, the Company hereby accepts such resignations. As soon as practicable (but in no event later than (30) days) following the date hereof, the
Executive shall resign from all positions he currently holds with any subsidiary of the Company, including as a member of the Management Board, the Supervisory Board or any similar board of any such subsidiary; provided that, the
Executive shall not be deemed in breach of this obligation to resign solely to the extent such failure or inability to resign results from action or inaction by the Company and the Executive shall resign as soon as practicable (but in no event later
than (30) days) following the completion of any actions by the Company that are necessary to effect or enable such resignation. The Executive agrees to cooperate with the Company and to execute such documents and take reasonable actions as may
be necessary or desirable to effectuate the foregoing. 

  

	3.	Consulting Period. The period from the Separation Date through December 31, 2012 shall be referred to as the “Consulting Period” during
which the Executive shall serve the Company as an independent consultant in accordance with the terms set forth below. 

 (a) During the Consulting Period: 
  

	 	(i)	the Executive shall consult with and report to the Interim Chief Executive Officer of the Company (the “Interim CEO”), or his designee, as needed, and shall
have such duties and responsibilities as may be reasonably assigned to him from time to time by the Interim CEO or his designee; 

  
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	 	(ii)	except as may be expressly granted to the Executive, in writing, the Executive shall have no authority to obligate the Company in any manner, shall not enter into any
contract on behalf of the Company, shall not, directly or indirectly, solicit for employment, or employ, any members of senior management of the Company, or solicit or induce any such persons to leave the employ of or otherwise terminate their
employment relationship with the Company, and shall not make any representation, warranty or other statement or take any action that may be construed by any third party to indicate that the Executive has any authority to obligate in any manner, or
to enter into any contract on behalf of the Company; 

  

	 	(iii)	the Executive shall not, directly or indirectly, solicit any of the Company’s distributors, customers or suppliers with whom he was involved as part of his job
responsibilities during his employment with the Company or regarding which or from whom he learned confidential information during his employment with the Company, without the prior express written consent of the Interim CEO or his designee;

  

	 	(iv)	so long as Executive has performed his consulting services hereunder (as determined in good faith by the Interim CEO), the Company shall pay to the Executive a
consulting fee of six hundred twenty-five thousand dollars ($625,000), payable in equal monthly installments, beginning July 31, 2012, it being understood that such amount shall be payable if the Company does not avail itself of the
Executive’s consulting services; 

  

	 	(v)	the Executive shall be supplied with suitable off-site office space in Warsaw, Poland, at a location reasonably selected by the Executive and reasonably acceptable to
the Company and shall be provided with an administrative assistant of his choosing on a basis reasonably acceptable to the Company; 

  

	 	(vi)	the Company shall pay or reimburse the Executive for all reasonable and necessary business expenses incurred or paid by the Executive in the performance of his duties
and responsibilities as a consultant, in accordance with the reimbursement policies of the Company that were in effect and applicable to the Executive during his period of employment by the Company; and 

 

	 	(vii)	the Executive shall retain the use of his current Company email address (provided however, that any information contained in any outgoing email identifying the
Executive’s position with the Company shall identify him as “Special Consultant”), the Company’s electronic equipment currently in his position, including a laptop, iPad and mobile telephone (utilizing the current telephone
number). 

 (b) The Executive shall be solely responsible for the taxes due to any applicable taxing authority in
respect of the payments and benefits provided by the Company to the Executive under this Section 3. The Executive hereby agrees to indemnify and hold harmless the 

  
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Company for and taxes, interest, of penalty that may be assessed against the Company in respect of the payments and benefits provided by the Company to the Executive under this Section 3
that are subsequently determined to have been subject to deduction and remittance to any taxing authority. 
  

	4.	Severance Benefits. 

 (a)
In connection with the Executive’s “separation from service” as of the date hereof, but subject to the provisions of paragraph (b) below and to the conditions set forth in Section 9(h) of the Employment Agreement and, in the
case of any payment or benefit which is payable subsequent to thirty (30) days following the date hereof, so long as the Executive shall have resigned from the positions described in Section 2 hereof, (1) the Company shall pay or
provide to the Executive, in a lump sum, the sum of two million three hundred twenty-seven thousand seven hundred ninety-three dollars ($2,327,793), payable ten (10) days after this Agreement and the General Release and Waiver Agreement
attached hereto as Appendix A are executed and delivered by the Executive to the Company, provided however, that such agreements and release are executed and delivered to the Company within 21 days following the Executive’s separation from
service, (2) the Company shall pay the Executive a non-prorated bonus pursuant to the terms of the 2012 executive bonus plan based on actual performance, provided, however that such bonus shall not be less than eight hundred fifty-five thousand
two hundred dollars ($855,200), such bonus to be paid at such time as bonuses are paid to the other participants of such plan or March 5, 2013, whichever is earlier, (3) the Company shall take all actions necessary so that all unvested
equity awards held by the Executive as of the date hereof shall become fully vested and, in the case of stock options, fully exercisable, and, in the case of such stock options, shall remain exercisable until the expiration of their original full
term, (4) the Company shall pay the Executive the sum of three hundred fifty-two thousand dollars ($352,000), in light of the Company not having granted additional equity awards to Executive in January 2012, such amount to be payable ten
(10) days after this Agreement and the General Release and Waiver Agreement attached hereto as Appendix A are executed and delivered by the Executive to the Company, provided however, that such agreement and release are executed and delivered
to the Company within 21 days following the Executive’s separation from service, (5) subject to the following sentence, the Executive shall continue to receive the benefits provided under Section 5(d) of the Employment Agreement for a
period of eighteen (18) months from the date hereof and (6) the Executive shall have continued use of his Company car until the end of the current lease term. If not later than six months following the date hereof, the conditions for
payment under Section 9(g) of the Employment Agreement have been satisfied, then (A) the Company shall pay the Executive (on the sixtieth (60th) day following the end of the Consulting Period, but subject to execution by the Executive
of an additional General Release and Waiver Agreement, substantially similar to the form of General Release and Waiver Agreement attached hereto as Appendix A, provided such Release shall have become irrevocable by such sixtieth (60th) day) an
additional cash severance payment equal to seven hundred seventy-five thousand nine hundred thirty-one dollars ($775,931), (B) the Company shall provide to the Executive the continued benefits described in Section 9(g)(i)(C) of the
Employment Agreement and (C) benefits provided under Section 5(d) of the Employment Agreement shall cease as of the end of the Consulting Period. 
 (b) The Executive acknowledges that the Company hereby reserves its rights and remedies against the Executive solely based on the results of the current investigation being

  
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conducted by the Audit Committee of the Board relating to the restated financial statements of the Company. Such rights and remedies shall be limited to: (1) the right to seek repayment of
any or all amounts paid, or the value of other compensation or benefits provided to the Executive pursuant to paragraph (a) above, to a trust, if the Audit Committee and the full Board make a formal finding that the Executive engaged in any
intentional wrongdoing; and (2) the right to the funds paid to the trust in subparagraph (1) above if a court of competent jurisdiction in the United States makes a final judicial determination that the Executive engaged in fraud or
intentional wrongdoing. In the event the Company exercises its right to seek repayment pursuant to subparagraph (1) above, the obligation of the Executive to place any repayment amount in a trust shall be subject to the Executive and the
Company, acting reasonably and in good faith, agreeing to all relevant terms governing the formation of such a trust and the obligation of the trust to release any repayment amount to the Executive or the Company as the case may be. 

 

	5.	Final Salary and Paid Time Off. On the first regular Company payday immediately following the Separation Date, the Executive shall receive payment with respect
to any earned but unpaid base salary through the Separation Date and accrued paid time off rights, including but not limited to, pay for the vacation the Executive had earned and not used as of the Separation Date. Such paid time off rights are
equivalent to twenty-four (24) days base salary, in the gross amount of $69,230. 

  

	6.	Confidentiality. The Executive affirms that the provisions of Section 7 of the Employment Agreement shall remain in full force and effect and continue to
apply in accordance with their terms, provided however, that the Executive’s obligations upon termination of employment set forth in Section 7(c) of the Employment Agreement shall be suspended until the expiration of the Consulting Period
defined in Section 3, above. The Executive represents that he has not taken any action or failed to take any action in breach of the provisions of Section 7 of the Employment Agreement on or before the date upon which he signs this
Agreement. 

  

	7.	Indemnification and Advancement. At all times prior to, during and after the Transition Agreement, the Executive shall continue to receive the rights of
advancement and indemnification from the Company to the fullest extent permitted under the Company’s Amended and Restated Bylaws (effective September 28, 2011) and under Delaware Law, including indemnification for “fees on fees”
litigation. 

  

	8.	Public Announcement. The Company shall issue a press release relating to the Executive’s separation from the Company in the form attached hereto as Appendix
B. The Company shall not issue any other press release, make any other public announcement, internal Company announcement or filing with any governmental authority relating to the Executive’s separation from the Company that is inconsistent
with the press release attached hereto as Appendix B. 

  

	9.	Irrevokables. The Executive hereby confirms the Irrevokables, as amended (substantially in the form attached hereto as Appendix C) and agrees to vote all
Company shares owned by him in favor of the share issuances contemplated by the Amended Securities Purchase Agreement dated as of July 9, 2012, between the Company and Roust Trading, Ltd (the “RS Transaction”) at the Company’s
2012 Annual Meeting of Shareholders or at any special meeting of Company shareholders at which the RS Transaction is submitted for approval by Company shareholders. 

  
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	10.	Withholding. All payments made by the Company to the Executive under Sections 4 and 5 of this Agreement shall be subject to applicable tax withholding.

  

	11.	Consultation with Attorney; Voluntary Agreement. The Executive understands and agrees that the Executive has the right and has been given the opportunity
to review this Agreement and, specifically, the General Release and Waiver attached as Appendix A to this Agreement, with an attorney. Executive represents that he has read this Agreement, including the aforementioned Release, and understands its
terms and that the Executive enters into this Agreement freely, voluntarily, and without coercion. 

  

	12.	Miscellaneous. 

(a) This Agreement may not be modified or amended, and no breach shall be deemed to be waived, unless agreed to in writing by the
Executive and the authorized designee of the Board. The captions and headings in this Agreement are for convenience only, and in no way define or describe the scope or content of any provision of this Agreement. 

(b) The Company and the Executive each hereby affirm that it is their intention that the provision of payments and benefits described or
referenced herein be exempt from or in compliance with the requirements of Section 409A of the Code and that each party’s tax reporting shall be completed in a manner consistent with such view. The Executive and the Company hereby further
agree that in the event that any payment or benefit made or provided to the Executive in connection with his service to the Company would result in the imposition of an excise tax pursuant to Section 4999 of the Code, the provisions of
Section 21 of the Employment Agreement shall apply. 
 (c) Subject to his other personal and profession commitments
existing at the time, the Executive agrees from and after the Consulting Period, will make himself reasonably available to the Company to provide cooperation and assistance to the Company with respect to areas and matters in which he was involved
during his employment, including any threatened or actual litigation concerning the Company, and make himself reasonably available to provide to the Company, if requested, information and counsel relating to ongoing matters of interest to the
Company. The Company agrees to reimburse the Executive for the actual out-of-pocket expenses incurred by him as a result of complying with this provision, subject to submission to the Company of documentation substantiating such expenses as the
Company may require. 
 (d) The Company shall pay or reimburse the Executive for all reasonable and necessary legal expenses
incurred in connection with his negotiation and entry into of this Agreement, the Non-Disparagement Agreement and the General Release and Waiver Agreement, subject to a maximum payment/reimbursement of $100,000. 

(e) This Agreement may be executed in counterparts, each of which shall be deemed an original, and which together shall be deemed to be
one and the same instrument. 
 (f) In the event that any one or more of the provisions of this Agreement shall be held to be
invalid, illegal or unenforceable, the validity, legality and enforceability of the remainder of the Agreement shall not in any way be affected or impaired thereby. 

  
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 (g) This Agreement shall be governed by and construed and enforced in accordance with the
laws of the State of Delaware, without reference to its choice of law rules. Any suit involving any dispute, controversy or claim arising under or relating to this Agreement, the Non-Disparagement Agreement, or the General Release and Waiver
Agreement may only be brought in a court of competent jurisdiction within the United States of America. The Company and the Executive hereby irrevocably consent to the exercise of personal jurisdiction by any such court with respect to any such
proceeding and waive any objection to venue or inconvenient forum. 
 (h) This Agreement, along with the Non-Disparagement
Agreement, the General Release and Waiver Agreement and the surviving provisions of the Employment Agreement as expressly provided herein, contain the entire agreement and understanding of the parties relating to the subject matter hereof and merges
and supersedes any and all prior discussions, agreements, negotiations and understandings of every kind and nature between the parties pertaining to the subject matter hereof. 

  
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 IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first set forth
above. 
  

			
	Central European Distribution Corporation
		
	By:	 	 /s/ David Bailey

	
	 /s/ William V. Carey

	William V. Carey

 [Signature Page Transition Agreement] 

 Appendix A 

  
 Appendix A

 EXECUTION COPY 
 GENERAL RELEASE AND WAIVER AGREEMENT 
 This General Release and
Waiver Agreement (the “Agreement”) is made and entered into by and among William Carey (the “Officer”), Central European Distribution Corporation, a Delaware corporation (“CEDC”) (together, with all of its subsidiaries
and affiliated entities, collectively hereinafter referred to as “Company”), and Roust Trading Ltd., a Bermuda corporation (together with its subsidiaries and affiliates, collectively hereinafter referred to as “RTL”).

  

	I.	TERMINATION OF EMPLOYMENT 

The parties acknowledge that the Officer resigned as President and Chief Executive Officer and as a member of the Board of Directors of
the Company, effective as of July 9, 2012. 
  

	II.	CONSIDERATION 

 As mutual
consideration for Officer’s as well as the Company’s and RTL’s entering into and abiding by this Agreement, and as contemplated by the Transition Agreement entered into by the Officer and CEDC dated as of July 9, 2012 (the
“Transition Agreement”) and the Non-Disparagement Agreement dated as of July 9, 2012 (the “Non-Disparagement Agreement”), the Officer will take such actions contemplated by the Transition Agreement and the Company will pay
and provide to the Officer the amounts and benefits set forth in the Transition Agreement, subject to its terms and conditions (all such amounts and benefits the “Transition Payments”). The parties agree that the Transition Payments are in
excess of any payments or benefits to which Officer may otherwise be entitled from the Company. 
  

	III.	MUTUAL RELEASES 

 A.
Officer, for Officer and Officer’s predecessors, successors, assigns, and heirs, hereby knowingly and voluntarily forever discharges and releases the Company and RTL and, as applicable, each of their respective predecessors and representatives,
along with each of their respective present or former officers, directors, employees, employee benefit plans, stockholders, affiliates, insurers, successors and assigns from all rights, claims and demands Officer may have based on or related to
Officer’s resignation as a member of the Board of Directors of the Company or his employment or termination of employment with the Company or that the Officer had, now has, or may hereafter claim to have based on any facts or events, whether
known or unknown by Officer that occurred on or before the date Officer signs this Agreement or events that are contemplated by this Agreement, including, without limitation, a release of any rights or claims the Officer may have based on
(i) the following United States laws: the Civil Rights Acts of 1964, as amended; the Age Discrimination in Employment Act of 1967, as amended; the Americans with Disabilities Act of 1990; the Rehabilitation Act of 1973; the Equal Pay Act of
1963; and the Employee Retirement Income Security Act of 1974, as amended; (ii) applicable laws of the states of the United States concerning wages, employment and discharge; (iii) applicable laws of Poland and the European Union
concerning wages, discrimination, employment and discharge; (iv) claims arising out of any legal 

 
restrictions of the right to terminate Officer, such as wrongful or unlawful discharge or related causes of action; (v) defamation, invasion of privacy, intentional or negligent infliction
of emotional distress or any other tortious conduct; and/or (vi) violations of any contract or promise, express or implied, specifically including, but not limited to, the Employment Agreement (as defined in the Transition Agreement). No
reference to the aforementioned causes of action or claims is intended to limit the scope of this Agreement. Notwithstanding the foregoing, the Officer does not hereby release any rights, claims or demands with respect to the enforcement of this
Agreement, the Transition Agreement, the Non-Disparagement Agreement or the period following the effective date of this Agreement. 
 B. The Company and RTL hereby knowingly and voluntarily forever discharge and release Officer, Officer’s predecessors, successors, assigns, and heirs, from all rights, claims or demands the Company
or RTL had, now has, or may hereafter claim to have against Officer based on Officer’s employment with Company and membership on the Board of Directors of the Company (or the termination thereof), or on any facts or events, whether known or
unknown by the Company and RTL that occurred on or before the date the Company and RTL sign this Agreement; provided, however, that this release shall not include a release of the Company’s rights under Section 4(b) of the
Transition Agreement; and, provided further, however, that if the requisite formal finding referred to in Section 4(b)(1) of the Transition Agreement is made by the Company’s Audit Committee and full Board of Directors
of the Company and the Company determines not to seek repayment of amounts described in said Section 4(b)(1), RTL may seek such repayment, to the same extent and subject to the same terms, conditions and limitations as are set forth in
Section 4(b) of the Transition Agreement. Notwithstanding the foregoing, the Company and RTL do not hereby release any rights, claims or demands with respect to the enforcement of this Agreement, any other provision of the Transition Agreement,
the Non-Disparagement Agreement or the period following the effective date of this Agreement. 
  

	IV.	PERIOD FOR REVIEW AND CONSIDERATION OF AGREEMENT 

 Officer confirms that Officer is over the age of 40 and has been given twenty-one (21) days to review and consider this Agreement before signing it. 

 

	V.	ENCOURAGEMENT TO CONSULT WITH AN ATTORNEY 

 Officer is encouraged to consult with an attorney before signing this Agreement. 
  

	VI.	OFFICER’S RIGHT TO REVOKE AGREEMENT 

 If this Agreement is signed by Officer and returned to the Company within the time specified in Section IV, Officer may revoke this Agreement within seven (7) calendar days of the date of the
Officer’s signature. Revocation can be made by delivering a written notice of revocation to the Company. For this revocation to be effective, written notice must be received no later than the close of business on the seventh (7th) calendar
day (or next business day thereafter) after the Officer signs this Agreement. If the Officer revokes this Agreement, it shall not be effective or enforceable and Officer will not receive the payments or benefits described in Section II hereof or the
releases set 

  
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forth in Section III (B) above. Notices for the purposes of this paragraph shall be effective if delivered personally, or by certified mail, to the following address (or such other address
as the Officer shall notify Company, or Company shall notify the Officer (as the case may be), in each case in writing): 
  

			
	 Officer: William Carey
  

at the most recent address in the
 payroll
records of the Company
	  	 Company: Central European Distribution Corporation
  

Bobrowiecka 6
 00-728 Warsaw, Poland

Attention: David Bailey
 Facsimile: +48 22 456 60
01

  

	VII.	SEVERABILITY AND JUDICIAL RESTATEMENT 

 Officer, Company and RTL agree that the provisions of this Agreement are severable and divisible. In the event any portion of this Agreement is determined to be illegal or unenforceable, the remaining
provisions of this Agreement shall remain in full force and effect. 
  

	VIII.	MISCELLANEOUS 

 This
Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, without reference to principles of conflict of laws thereunder. 
 The captions of this Agreement are not part of the provisions hereof and shall not have any force or effect. 
 This Agreement may not be amended or modified other than by a written agreement executed by the parties hereto or their respective successors and legal representatives. 

Nothing contained in this Agreement is intended to be, or shall be construed to be, an admission of any liability by any party or an
admission of the existence of any facts upon which liability could be based. 
 Officer acknowledges and represents that Officer
has voluntarily executed this Agreement. 
 This Agreement shall not be assignable, except that in the event of the death of
Officer while amounts or benefits are still due hereunder, any remaining payments due as described in Section II hereof shall be paid to Officer’s estate. 
  

	IX.	EFFECTIVE DATE OF AGREEMENT 

 The effective date of this Agreement shall be eight (8) calendar days after the date this Agreement is signed and dated by Officer. If the Agreement is not dated by Officer then, in that event, the
effective date of this Agreement shall be eight (8) calendar days after receipt of the signed Agreement by Company. 

  
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 PLEASE READ CAREFULLY. THIS AGREEMENT INCLUDES A RELEASE OF ALL KNOWN AND UNKNOWN CLAIMS PRIOR TO THE
DATE OFFICER SIGNS THIS AGREEMENT INCLUDING THOSE PURSUANT TO THE AGE DISCRIMINATION IN EMPLOYMENT ACT, AS AMENDED, AND OTHER LAWS PROHIBITING DISCRIMINATION IN EMPLOYMENT. OFFICER ACKNOWLEDGES THAT OFFICER HAS READ THIS AGREEMENT, UNDERSTANDS IT
AND IS VOLUNTARILY ENTERING INTO IT. 
 (SIGNATURE PAGE FOLLOWS) 

  
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 IN WITNESS WHEREOF, the parties have executed this Agreement as of the date set forth.

  

									
	CENTRAL EUROPEAN DISTRIBUTION CORPORATION	 		 	ROUST TRADING LTD.
					
	By:	 	  
	 		 	By:	 	  

					
	Name:	 	David Bailey	 		 	Name:	 	Nelia Nuriakhmetova
					
	Title:	 	Interim Chief Executive Officer	 		 	Title:	 	Director
					
	Date:	 	  
	 		 	Date:	 	  

				
	  
	 		 		 	
				
	William Carey	 		 		 	
					
	Date:	 	  
	 		 		 	

  
 [Signature
Page to General Release and Waiver Agreement] 

 Appendix B 

  
 Appendix B

  
 

 
 CEDC and Russian Standard Sign Amended Definitive Agreements On Strategic Alliance, Investment In CEDC

  

	 	•	 	 Russian Standard Confirms its Commitment to Strategic Alliance with CEDC 

 

	 	•	 	 Reconfirms Its Commitment to Purchase Up to $210M of Newly Issued CEDC Senior Notes 

 

	 	•	 	 Proceeds To Extinguish CEDC 2013 Notes 

  

	 	•	 	 CEDC Announces Management Changes, Board Addition 

 Mt. Laurel, New Jersey – July 9, 2012 — Central European Distribution Corporation (NASDAQ: CEDC) announced today that it has signed amended definitive agreements on its previously
announced strategic alliance with Russian Standard Corporation (through Roust Trading Ltd., its “Roust Trading” unit). 
 The alliance
is expected to significantly strengthen CEDC’s balance sheet and create a powerful portfolio of brands with enhanced production, distribution and sales channels throughout Central and Eastern Europe. 

The agreements also provide for: 
  

	 	•	 	 A reaffirmation by Roust Trading to purchase up to $210 million principal amount of newly issued unsecured CEDC senior notes, due July 31, 2016,
at a blended interest rate of 6.0%. This investment is expected to provide CEDC with the financial resources to repay or repurchase all of its outstanding 3.0% Senior Convertible Notes due 2013; 

 

	 	•	 	 An agreement by Roust Trading to, subject to fulfillment of certain conditions, waive any potential contractual rights under the existing agreements
between CEDC and Roust Trading arising from CEDC’s announcement on June 4, 2012 of a restatement of its financial statements and the issuance in exchange for that waiver of up to an additional 10 million shares of CEDC’s common
stock in three tranches issuable at Roust Trading’s request; and 

  

	 	•	 	 The authorization for Roust Trading by CEDC to purchase additional CEDC common stock on the open market that, when added to the shares currently owned
by Roust Trading and issuable to it pursuant to the transaction, would not exceed 33% of the outstanding share capital of CEDC. CEDC’s Board of Directors has agreed that upon receipt of certain Polish regulatory waivers, if and to the extent
received, the threshold will be raised to 42.9%. 

 CEDC also announced that: 
  

	 	•	 	 William V. Carey has resigned as CEDC’s Chairman, President, Chief Executive Officer and member of CEDC’s Board of Directors; Mr. Carey
has agreed to serve as a consultant to the Company during a transition period; 

  

	 	•	 	 David Bailey, the current Lead Director of CEDC’s Board of Directors, has been appointed Interim Chief Executive Officer. Mr. Bailey, 68, has
been a director of CEDC since December 2003. He joined International Paper in 1968 and has held various levels of responsibility within that company including President IP Poland, and Managing Director Eastern Europe, including Russia. He retired
from International Paper in 2008 and has opened a private consulting business for Poland and Russia. He also was Chairman of OAO Svetogorsk (Russia) and IP Kwidzyn (Poland). He also was responsible for the creation and development of the most
popular tissue brand in Poland, Velvet. 

  

	 	•	 	 Roustam Tariko, Founder and Chairman of Russian Standard Corporation, has been appointed by the CEDC Board of Directors as a member of the Board and as
non-Executive Chairman of the Board; and 

  

	 	•	 	 N. Scott Fine, a current member of CEDC’s Board of Directors, has been appointed as Lead Director of the Board. 

Mr. Bailey stated: “The Board and I believe that CEDC’s alliance with Russian Standard presents a tremendous opportunity to move forward
as a company. With the investment by Russian Standard having secured our ability to retire our 2013 convertible notes, we can now focus all of our energies on growing and improving our business – both through internal efforts and through our
new strategic alliance with Russian Standard. This combination has multiple benefits for all involved and we are very excited about the opportunities it provides.” 
 He continued: “Our selection process for a permanent Chief Executive Officer will focus on candidates who know our industry and have the experience to immediately contribute to our executive team. On
behalf of the entire Board, I would like to thank Bill Carey for his dedication to CEDC and to wish him all the best in his future endeavors. Thanks to Bill’s leadership as CEO from the Company’s founding, we will be building on a base as
one of the world’s largest vodka producers, with a strong portfolio of brands.” 
 Mr. Tariko said: “I believe the strategic
alliance between CEDC and Russian Standard will provide significant benefits to both companies. I look forward to contributing to CEDC’s growth and serving its stockholders in my new role as non-Executive Chairman of the CEDC Board.”

 Terms of the Investment 
 On
July 9, 2012, CEDC entered into an agreement with Roust Trading that amended and restated the securities purchase agreement dated April 23, 2012 (the “Original Securities Purchase Agreement”) between CEDC and Roust Trading.
Pursuant to the Original Securities Purchase Agreement, on May 4, 2012, CEDC sold to Roust Trading (i) 5,714,286 shares (the “Initial Shares”) of Common Stock for an aggregate purchase price of $30 million, or $5.25 per share,
and (ii) a debt security with a face value of $70 million (the “New Debt”), which has a stated interest rate of 3.0% and matures on March 18, 2013. 
 CEDC and Roust Trading agreed to amend the terms of the Original Securities Purchase Agreement as follows: 
  

	 	•	 	 CEDC will issue to Roust Trading as a purchase price adjustment with respect to the Initial Shares and the New Debt, and as consideration for Roust
Trading’s conditional waiver of certain rights with respect to the Original Securities Purchase Agreement, up to 10 million shares of Common Stock, in three tranches issuable after the following milestones: 3 million shares following
the date of the Agreements, 5 million shares following the date of the approval by shareholders of the Russian Standard transaction, and 2 million shares following the date that Roust Trading has satisfied its obligation under the amended
and restated securities purchase agreement to effectively fund the redemption of any outstanding 3.0% Senior Convertible Notes due 2013 on their maturity on March 15, 2013; 

	 	•	 	 CEDC’s Board of Directors has agreed, subject to applicable blackout periods and regulatory limitations, to authorize Roust Trading to purchase an
amount of shares of CEDC’s Common Stock in the market that, when added to the shares currently owned by Roust Trading and issuable to it pursuant to the transaction, would not exceed 33% of the outstanding share capital of CEDC. CEDC’s
Board of Directors has agreed that upon receipt of certain Polish regulatory waivers if and to the extent received, the threshold will be raised to 42.9%; 

 

	 	•	 	 The interest under the debt securities to be issued by CEDC to Roust Trading that the parties had previously agreed would be payable in shares of
Common Stock, will be payable in shares of Common Stock at or determined by reference to a price per share of Common Stock of $3.44 rather than $5.25 as previously agreed; and 

 

	 	•	 	 The final maturity date for the New Debt will be extended to July 31, 2016 from March 18, 2013. 

CEDC and Roust Trading have also entered into an amended and restated governance agreement, dated July 9, 2012 providing Roust Trading with the
right to appoint 4 members to CEDC’s Board of Directors upon Roust Trading (and its affiliates) reaching 40% ownership of CEDC’s outstanding Common Stock. In addition, CEDC and Roust Trading agreed that the Nominating and Corporate
Governance Committee of CEDC’s Board of Directors shall consist of a majority of directors unaffiliated with Russian Standard and that CEDC will form a Russia Oversight Committee of the CEDC Board of Directors to oversee CEDC’s operations
in Russia. 
 Jefferies & Company, Inc. served as financial advisor to CEDC’s Board of Directors with respect to the transaction.
Skadden, Arps, Slate, Meagher & Flom LLP acted as legal advisors to CEDC. Ropes & Gray LLP acted as legal advisors to Roust Trading. 
 Update on Financial Restatement 
 CEDC’s management, under the supervision and at the
direction of the Audit Committee of CEDC’s Board of Directors, is continuing to review its financial statements, as announced by CEDC on its Form 8-K on June 4, 2012. Following CEDC’s announcement, the Audit Committee initiated an
internal investigation regarding CEDC’s retroactive trade rebates and related accounting issues. This investigation is being conducted with the assistance of outside legal counsel retained by the Audit Committee. The Audit Committee, through
its counsel, voluntarily notified the United States Securities and Exchange Commission of the investigation. 
 CEDC’s management has made
a preliminary determination that the aggregate effect of the adjustments identified to date will result in a cumulative reduction of each of revenue and EBITDA for the period from January 1, 2010 through December 31, 2011 of approximately
$49 million, primarily reflecting the fact that certain retroactive trade rebates were not properly recorded by CEDC’s principle operating subsidiary in Russia, the Russian Alcohol Group, and therefore both net revenues and accounts receivable
were overstated. In addition, CEDC’s management has preliminarily determined that the adjustments identified to date will result in impairment charges of approximately $10 million. The expected effects of the restatement described above are
based on currently available information. CEDC management continues to assess whether a restatement of December 31, 2009 will be required and is determining the impact of any adjustments to the previously reported March 31, 2012 financial
statements. Because the Company’s accounting review and investigation are ongoing and the Audit Committee has requested a review of the matters described above, the estimates included herein are subject to change until the final restated
financial statements are filed with the Commission. 

 About Central European Distribution Company 
 CEDC is one of the world’s largest producers of vodka and Central and Eastern Europe’s largest integrated spirit beverage company. CEDC produces the Green Mark, Absolwent, Zubrowka, Bols,
Parliament, Zhuravli, Royal and Soplica brands, among others. CEDC exports its products to many markets around the world, including the United States, England, France and Japan. 
 CEDC also is a leading importer of alcoholic beverages in Poland, Russia and Hungary. In Poland, CEDC imports many of the world’s leading brands, including Carlo Rossi Wines, Concha y Toro wines,
Metaxa Liqueur, Rémy Martin Cognac, Sutter Home wines, Grant’s Whisky, Jagermeister, E&J Gallo, Jim Beam Bourbon, Sierra Tequila, Teacher’s Whisky, Campari, Cinzano, and Old Smuggler. CEDC is also a leading importer of premium
spirits and wines in Russia with brands such as Concha y Toro, among others. 
 About Russian Standard Corporation 

Russian Standard Corporation is one of Russia’s most successful private companies with business interests in premium vodka, spirits distribution,
banking and insurance. Russian Standard Vodka is the global leader in authentic Russian premium vodka and the only Russian global brand with sales in over 75 markets around the world. Its 2011 sales exceeded 2.6 million 9-liter cases. Roust
Inc. is one of Russia’s leading premium spirits distributors, representing such well-known brands as Gancia, Rémy Martin, Metaxa, St Remy, Cointreau, Jagermeister, Molinari, Whyte & Mackay, and Dalmore. In 2011, Russian
Standard acquired a 70% stake in Gancia SPA, the legendary Italian wine-making company that created the first Italian sparkling wine. With 2000 hectares of vineyards, 5 million kilograms of grapes vinified, Gancia produces around
25 million bottles of sparkling wine, wines and aperitifs each year. Russian Standard Bank is the largest privately owned financial institution in Russia and is a leader in the Russian consumer finance market, including consumer loans and
credit cards. Since 1999 the Bank has been setting new standards in consumer banking, with over 25 million clients, over US$45 billion in loans granted and 35 million credit cards issued. Russian Standard Bank is the exclusive issuer and
service provider for American Express and Diners Club International cards in Russia. 
 Russian Standard Corporation has over 19,000
employees working in offices in Moscow, St Petersburg, New York, Paris, London and Kiev. The total assets of Russian Standard Corporation exceed US$5 billion. 
 Cautionary Statement about Forward-Looking Information 
 This press release contains forward
looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 including, without limitation, statements about the transaction, the future liquidity and results of CEDC following completion of the transaction, and the
expected effects of the restatement. Forward looking statements are based on our knowledge of facts as of the date hereof and involve known and unknown risks and uncertainties that may cause the actual results, performance or achievements of CEDC to
be materially different from any future results, performance or achievements expressed or implied by our forward looking statements. Such risks include, among others, uncertainties regarding the timing and completion of the transaction and the
satisfaction of the conditions thereto, the possibility that competing transaction proposals may be made, the risk that regulatory approvals of the transaction on the proposed terms will not be obtained on a timely basis, the risk that shareholder
approval of the transaction may not be obtained, the risk that Roust Trading will fail to fund some or all of its investment in CEDC, the risk that CEDC may need to raise additional funds to repay its indebtedness after completion of the
transaction, and uncertainties regarding the timing of the completion of the Audit Committee’s investigation and the restatement. 

Investors are cautioned that forward looking statements are not guarantees of future performance and that undue reliance should not be placed on such
statements. CEDC undertakes no obligation to publicly update or revise any forward looking statements or to make any other forward looking statements, whether as a result of new information, future events or otherwise, unless required to do so by
securities laws. Investors are referred to the full discussion of risks and uncertainties included in CEDC’s Form 10-K for the fiscal year ended December 31, 2011, including statements made under the captions “Item 1A. Risks Relating
to Our Business” and in other documents filed by CEDC with the Securities and Exchange Commission. 

 Additional Information 
 CEDC will file copies of the securities purchase agreement and related transaction agreements with the SEC on a Form 8-K to which investors should refer for additional information on the terms of the
transaction. 
 In connection with the transaction, CEDC will prepare a proxy statement to be filed with the SEC. When completed, a
definitive proxy statement and a form of proxy will be mailed to stockholders of CEDC. CEDC STOCKHOLDERS ARE URGED TO READ THE PROXY STATEMENT REGARDING THE PROPOSED TRANSACTION BECAUSE IT WILL CONTAIN IMPORTANT INFORMATION. CEDC stockholders will
be able to obtain, without charge, a copy of the proxy statement (when available) and other relevant documents filed with the SEC from the SEC’s website at http:// www.sec.gov. In addition, documents filed by CEDC are available at the
SEC’s public reference room located at 100F Street, N.E. Washington, D.C. 20594. CEDC stockholders will also be able to obtain, without charge, a copy of the proxy statement and other relevant documents (when available) by directing a request
to James Archbold, Vice President, at 3000 Atrium Way, suite 265, Mt. Laurel, NJ 08054, telephone (856) 273-6980 or from CEDC’s website, www.cedc.com. 
 CEDC and certain of its respective directors and executive officers may be deemed to be participants in the solicitation of proxies from shareholders in connection with the transaction under the rules
of the SEC. Information about the directors and executive officers of CEDC is included in the amendment to CEDC’s Annual Report on Form 10-K/A filed with the SEC on April 30, 2012 and current reports on Form 8-K filed with the SEC.
Shareholders may obtain additional information regarding the interests of CEDC and its directors and executive officers in the transaction, which may be different than those of CEDC shareholders generally, by reading the proxy statement and other
relevant documents regarding the transaction, when filed with the SEC. 
 Contact 
 Jim Archbold 
 Investor Relations Officer 
 Central European Distribution Corporation 
 856-273-6980 

Sitrick And Company 
 212-573-6100 

Michael Sitrick 
 Mike_Sitrick@Sitrick.com

 Lance Ignon 
 Lance_Ignon@Sitrick.com

 Anna Załuska 
 Corporate PR
Manager 
 Central European Distribution Corporation 
 48-22-456-6061 
 Oleg Yegorov 
 Russian Standard Corporation 
 7-495-967-0990 

*** 

 Appendix C 

Appendix C 

 EXECUTION VERSION 

 
  
 AMENDED AND RESTATED 
 VOTING AGREEMENT 

AMONG 
 ROUST
TRADING LTD. 
 AND 
 THE OTHER PARTIES HERETO 
 Dated as of July 9, 2012 

 
  

 This AMENDED AND RESTATED VOTING AGREEMENT (this “Agreement”), is entered
into as of July 9, 2012, by and among Roust Trading Ltd., a Bermuda company, with its registered office at 25 Belmont Hills Drive, Warwick WK 06, Bermuda (the “Investor”), William Carey (“Stockholder”), and,
solely for the purposes of Section 4.7 hereof, Central European Distribution Corporation, a Delaware corporation, with its registered office at 1013 Centre Road, Wilmington, New Castle County, Delaware 19805 (the
“Company”). Capitalized terms used herein and not otherwise defined shall have the meanings ascribed to such terms in the Amended and Restated Securities Purchase Agreement (as defined below). 

W I T N E S S E T H: 
 WHEREAS, on April 23, 2012, Investor and the Company entered into a Voting Agreement (the “Original Voting Agreement”) in connection with the Securities Purchase Agreement between
Investor and the Company dated as of the same date thereof (the “Original Securities Purchase Agreement”); 

WHEREAS, on May 4, 2012, the Initial Closing under the Original Securities Purchase Agreement occurred and the Company sold, and
Investor or an Affiliate thereof purchased from the Company as an investment in the Company, for an aggregate purchase price of $100,000,000, (i) 5,714,286 shares (the “Initial Shares”) of common stock, $0.01 par value per
share, of the Company (the “Common Stock”), at a subscription price of $5.25 per share in cash, and (ii) a debt instrument structured to be clearable through Euroclear S.A./N.V. with a face value of $70,000,000 (the
“New Debt”); 
 WHEREAS, Investor and the Company are entering into an Amended and Restated Securities Purchase
Agreement, dated as of the date hereof (as it may be amended from time to time in accordance with its terms, the “Amended and Restated Securities Purchase Agreement”), that contemplates, among other things, the issuance by the
Company of Common Stock and certain notes to Investor or an affiliate thereof, the issuance of certain other notes to Investor or an affiliate of Investor (the proceeds of which will be used by the Company to repurchase the Company’s 3.00%
Convertible Senior Notes due 2013 held by Investor or an affiliate of Investor) and the provision of a support arrangement by Investor or an affiliate of Investor to the Company in respect of the Company’s 3.00% Convertible Senior Notes due
2013 not held by Investor or an affiliate thereof, each on the terms and subject to the conditions set forth in the Amended and Restated Securities Purchase Agreement; 
 WHEREAS, as of the date hereof, Stockholder is the record and/or beneficial owner of the number of shares of Common Stock set forth on Attachment A hereto (together with any shares of Common Stock
or other voting capital stock of the Company acquired after the date hereof, whether upon the exercise of warrants, options, conversion of convertible securities or otherwise, collectively, the “Owned Shares”); 

WHEREAS, as a condition to the willingness of Investor to enter into the Amended and Restated Securities Purchase Agreement, Investor has
required that Stockholder agree, and in order to induce Investor to enter into the Amended and Restated Securities Purchase Agreement, Stockholder is willing, to enter into this Agreement; and 

 WHEREAS, this Agreement amends, supersedes and restates the Original Voting Agreement in all
respects. 
 NOW, THEREFORE, in consideration of the foregoing and for other good and valuable consideration given to each party
hereto, the receipt of which is hereby acknowledged, the parties agree as follows: 
 1. Agreement to Vote; Irrevocable
Proxy; Non-Solicitation Provisions; Disclosure Obligations. 
 1.1. Agreement to Vote. Stockholder shall, at any
meeting of the stockholders of the Company, however called, or any adjournment or postponement thereof, or in connection with any written consent of the stockholders of the Company, cause the Owned Shares to be counted as present for purposes of
establishing a quorum and be present (in person or by proxy) and vote or consent (or cause to be voted or consented) all of the Owned Shares (i) in favor of the Company Stockholder Approval (as defined in the Amended and Restated Securities
Purchase Agreement) and any actions reasonably required in furtherance thereof, (ii) against any other proposal that would reasonably be expected to impede, frustrate, prevent or nullify the Amended and Restated Securities Purchase Agreement or
the transactions contemplated thereby, and (iii) in favor of the other matters specified in Section 8.1(a) of the Amended and Restated Securities Purchase Agreement. The voting covenant set forth in this Section 1.1 and the
proxy granted pursuant to Section 1.2 of this Agreement shall not be effective for any other purpose and Stockholder retains the right to vote in any manner on all other matters. 

1.2. Irrevocable Proxy. Solely with respect to the matters described in Section 1.1, Stockholder hereby irrevocably
appoints Investor (or any nominee of Investor) as Stockholder’s lawful agent, attorney and proxy with full power of substitution and resubstitution, for and in the name, place and stead of Stockholder, to the full extent of Stockholder’s
voting rights with respect to Stockholder’s Owned Shares (which proxy is irrevocable and which appointment is coupled with an interest, including for purposes of Section 212 of the Delaware General Corporation Law) to vote all
Stockholder’s Owned Shares solely on the matters, and in the manner, described in Section 1.1, and in accordance herewith. Stockholder hereby revokes any proxies previously granted that would otherwise conflict with the proxy
contemplated pursuant to this Section 1.2 and agrees to execute any further agreement, form, notice or other such requirement reasonably necessary or appropriate to confirm and effectuate the grant of the proxy contained herein.
Stockholder hereby acknowledges that the irrevocable proxy set forth in this Section 1.2 is given in connection with the execution of the Amended and Restated Securities Purchase Agreement, and that such irrevocable proxy is given to
secure the performance of the duties of Stockholder under this Agreement. Stockholder hereby further acknowledges that the irrevocable proxy is coupled with an interest and may under no circumstances be revoked. Stockholder hereby ratifies and
confirms all things or acts that such irrevocable proxy may lawfully do or cause to be done by virtue hereof to the extent consistent with this Agreement. To the extent that Stockholder is the beneficial but not the record owner of any Owned Shares,
Stockholder shall cause the record owner of any such Owned Shares to vote and grant a proxy with respect to Owned Shares in the same manner as described above. 

  
 -2-

 1.3. Disclosure Obligations. Investor shall discharge any reporting obligations laid
down in Articles 69 and 69a of the Polish Act of 29 July 2005 on Public Offering, Conditions Governing the Introduction of Financial Instruments to Organized Trading, and Public Companies (the “Polish Public Offering Act”) by
sending a notification to the Company and the Polish Financial Supervision Authority in connection with the fact that Stockholder and Investor together with certain other entities are found to be concert parties in the meaning of Article 87.1.5
and/or 87.1.6 of the Polish Public Offering Act. Any such notification shall be submitted by Investor within the deadline mentioned in Article 69.1 of the Polish Public Offering Act and shall contain all information required under Article 69.4-5
and/or 69a.2, as applicable, of the Polish Public Offering Act. For the avoidance of doubt, the obligations to be assumed by Investor under this Section 1.3 shall be treated as an indication as referred to in Article 87.3 of the Public
Offering Act. Stockholder (i) acknowledges that Investor will rely on information provided by Stockholder in this Agreement, and that may otherwise be provided by Stockholder to Investor with the explicit purpose of being included in
notifications delivered by Investor under the Polish Public Offering Act, in making notifications provided under the Polish Public Offering Act, (ii) represents and warrants to Investor that the information referred to in clause (i) above
is and will be accurate and (iii) agrees that Investor shall have no liability for the inaccuracy of the information referred to in clause (i) above. 
 2. Representations and Warranties of Stockholder. Stockholder hereby represents and warrants to Investor as follows: 
 2.1. Due Organization. Stockholder, if a corporation or other entity, has been duly organized, is validly existing and is in good standing under the laws of the jurisdiction of its formation or
organization (to the extent the concept of good standing applies). 
 2.2. Power; Due Authorization; Binding Agreement.
Stockholder has full legal capacity, power and authority to execute and deliver this Agreement, to perform his, her or its obligations hereunder and to consummate the transactions contemplated hereby. This Agreement has been duly and validly
executed and delivered by Stockholder and constitutes a valid and binding agreement of Stockholder, enforceable against Stockholder in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting creditors’ rights generally and by general equitable principles. Stockholder represents that any proxies previously granted in respect of the Owned Shares are not irrevocable.

 2.3. Ownership of Shares. As of the date hereof, the Owned Shares set forth opposite Stockholder’s name on
Attachment A hereto are, and any Owned Shares acquired after the date hereof will be, owned of record and/or beneficially by Stockholder in the manner reflected thereon and include all of the Owned Shares owned of record and/or beneficially
by Stockholder or an affiliate of Stockholder. Stockholder has (and, with respect to shares acquired after the date hereof, will have) the sole power to vote (or cause to be voted or consents to be executed), the sole power to issue instructions
with respect to matters set forth in this Agreement and the sole power to agree to all of the matters set forth in this Agreement, in each case with respect to all of the Owned Shares with no limitations, qualifications or restrictions on such
rights, subject to (a) applicable securities laws and the terms of this Agreement and (b) if Stockholder is a married individual and resides in a State with community property laws, the

  
 -3-

 
community property interest of his or her spouse to the extent applicable under such community property law, in which case such spouse has executed and delivered to Investor a spousal consent
hereto. 
 2.4. No Conflicts. The execution and delivery of this Agreement by Stockholder does not, and the performance
of the terms of this Agreement by Stockholder will not, (a) require Stockholder to obtain a permit from, or the authorization, consent or approval of, or make any filing with or notification to, any governmental authority other than as set
forth in Section 1.3 above and in any of the Operative Agreements, (b) require the consent or approval of any other person or entity pursuant to any agreement, obligation or instrument binding on Stockholder or his, her or its
properties and assets, (c) result in a violation or breach of, or constitute (with or without notice or lapse of time or both) a default (or give rise to any third party right of termination, cancellation, material modification or acceleration)
under any of the terms, conditions or provisions of any note, loan agreement, bond, mortgage, indenture, license, contract, commitment, arrangement, understanding, agreement or other instrument or obligation of any kind to which Stockholder is a
party or by which Stockholder or the Owned Shares may be bound or (d) conflict with or violate any organizational document or law, rule, regulation, order, judgment or decree applicable to Stockholder or pursuant to which any of his, her or its
properties or assets are bound. The Owned Shares are not, and with respect to Owned Shares acquired after the date hereof will not be, subject to any other agreement (including any voting agreement, stockholders agreement, irrevocable proxy or
voting trust) that would adversely affect the ability of Stockholder to perform its, his or her obligations hereunder. 
 2.5.
No Encumbrances. The Owned Shares and the certificates representing such shares are now, and at all times during the term of this Agreement will be, held by Stockholder, or by a nominee or custodian for the benefit of Stockholder, free and
clear of all encumbrances, proxies, voting trusts or agreements, understandings or arrangements or any other rights whatsoever that would adversely affect the ability of Stockholder to perform its, his or her obligations hereunder. 

2.6. Absence of Litigation. There are no actions or lawsuits pending or, to the knowledge of Stockholder threatened, against or
affecting Stockholder before or by any court or governmental authority that could reasonably be expected to impair the ability of Stockholder to perform his, her or its obligations hereunder. 

2.7. Other Holdings. None of Stockholder’s subsidiaries or related parties (as defined in Section 4.4 below) owns
or has any interest in or has agreed to acquire shares of Common Stock or any voting rights attaching thereto. None of such persons is party to any agreement or understanding (whether or not legally enforceable) referred to in Article 87.1.5 and/or
87.1.6 of the Polish Public Offering Act nor has accepted any proxy referred to in Article 87.1.4 of the Polish Public Offering Act. 
 3. Representations and Warranties of Investor. Investor hereby represents and warrants to Stockholder as follows: 
 3.1. Power; Due Authorization; Binding Agreement. Investor is a company duly organized, validly existing and in good standing (to the extent the concept of good standing

  
 -4-

 
applies) under the laws of Bermuda. Investor has full power and authority to execute and deliver this Agreement, to perform its obligations hereunder and to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement and the consummation by Investor of the transactions contemplated hereby have been duly and validly authorized by all necessary actions on the part of Investor, and no other
proceedings on the part of Investor are necessary to authorize this Agreement or to consummate the transactions contemplated hereby. This Agreement has been duly and validly executed and delivered by Investor and constitutes a valid and binding
agreement of Investor, except that enforceability may be subject to general principles of equity. 
 3.2. No Conflicts.
The execution and delivery of this Agreement by Investor does not, and the performance of the terms of this Agreement by Investor will not, (a) require Investor to obtain the consent or approval of, or make any filing with or notification to,
any governmental authority other than as set forth in Section 1.3 above and in any of the Operative Agreements, or (b) conflict with or violate any organizational document or law, rule, regulation, order, judgment or decree
applicable to Investor or pursuant to which any of its or its subsidiaries’ property or assets are bound. 
 4. Certain
Covenants of Stockholder. 
 4.1. Restriction on Transfer. Stockholder shall not, other than as may be required by a
court order, (a) directly or indirectly sell, transfer, pledge, hypothecate, encumber (except as set forth on Attachment A or as a result of this Agreement), assign or otherwise dispose of (including, without limitation, by gift, merger,
consolidation or reorganization), or enter into any contract, option or other agreement providing for the sale, transfer, pledge, hypothecation, encumbrance, assignment or other direct or indirect disposition of or any interest in, or limitation on
the voting rights of, or otherwise transfer (any such foregoing action, a “Transfer”) any of the Owned Shares, (b) enter into any contract, option or other agreement or understanding with respect to any Transfer of any or all
of the Owned Shares or any interest therein, (c) grant any proxies or powers of attorney or other authorization in or with respect to the Owned Shares, deposit any Owned Shares into a voting trust or enter into a voting agreement or arrangement
with respect to any Owned Shares or (d) take any other action, that would in any way restrict, limit or interfere with the performance of its obligations hereunder. The foregoing restrictions on Transfer do not prohibit exercise by Stockholder
of any stock option of the Company. If any involuntary Transfer of any of the Owned Shares occurs (including, but not limited to, a sale by Stockholder’s trustee in any bankruptcy, or a sale to a purchaser at any creditor’s or court sale
or any sale or transfer by operation of law, including, without limitation, by will or intestacy), the transferee (which term, as used herein, shall include any and all transferees and subsequent transferees of the initial transferee) shall take and
hold such Owned Shares subject to all of the restrictions, liabilities and covenants under this Agreement, which shall continue in full force and effect until valid termination of this Agreement. Any Transfer in violation of this
Section 4.1 shall be void. 
 4.2. No Additional Acquisitions. Without prejudice to any obligations which
Stockholder may have under any applicable laws (including but not limited to any insider dealings rules), until valid termination of this Agreement, Stockholder shall not directly or indirectly, either alone or together with any other person,
without Investor’s prior written consent: 
  

	 	4.2.1.	acquire, or cause another person to acquire any shares of Common Stock or beneficial ownership thereof or any other interest therein; 

  
 -5-

	 	4.2.2.	enter into an agreement or understanding (whether or not legally enforceable) or do or omit to do any act as a result of which Stockholder or any of Stockholder’s
subsidiaries or related persons (as defined in Section 4.4 below) may acquire any shares of Common Stock or beneficial ownership thereof or any other interest therein; 

 

	 	4.2.3.	enter into an agreement or understanding (whether or not legally enforceable) referred to in Article 87.1.5 and/or 87.1.6 of the Polish Public Offering Act; or

  

	 	4.2.4.	accept any proxy referred to in Article 87.1.4 of the Polish Public Offering Act. 

4.3. Stockholder shall ensure that each of Stockholder’s subsidiaries and its related persons (as defined in Section 4.4
below) complies with Section 4.2. 
 4.4. For the purposes of Sections 2.7, 4.2, 4.3 and
4.5, “subsidiary” shall have the meaning ascribed to this term in the Polish Public Offering Act, and the term “related persons” shall refer to those persons specified in Article 87.4 of the Polish Public Offering Act.

 4.5. Additional Shares. Without prejudice to Stockholder’s obligations under Section 4.2, Stockholder
hereby agrees that any shares of Common Stock acquired of record and/or beneficially by Stockholder after the date hereof shall be subject to the terms of this Agreement as though owned by Stockholder on the date hereof. Stockholder shall notify
Investor as promptly as practicable (and in any event within 48 hours) in writing of (i) any proposed acquisition by itself and/or subsidiaries or related persons (as defined in Section 4.4 above) of new shares of Common Stock,
beneficial ownership thereof or any other interest therein, (ii) the number of any additional Owned Shares of which Stockholder acquires beneficial ownership by itself and/or subsidiaries or related persons (as defined in
Section 4.4 above) on or after the date hereof and (iii) any proposed permitted Transfer contemplated in Section 4.1 of the Owned Shares, beneficial ownership thereof or any other interest therein. 

4.6. No Limitations on Actions. Stockholder signs this Agreement solely in his, her or its capacity as the record and/or
beneficial owner, as applicable, of the Owned Shares; this Agreement shall not limit or otherwise affect the actions of Stockholder in any other capacity, including such person’s capacity, if any, as an officer of the Company or a member of the
Board of Directors of the Company; and nothing herein shall limit or affect the Company’s rights in connection with the Amended and Restated Securities Purchase Agreement. 

4.7. No Contrary Transfer; Change in Common Stock. Stockholder shall not request that the Company register the transfer
(book-entry or otherwise) of any certificate or uncertificated interest representing any of the Owned Shares, and the Company shall not 

  
 -6-

 
recognize any such transfer, unless such transfer is made in compliance with this Agreement. The Company shall inform Investor in writing of any requests to transfer (book-entry or otherwise) any
certificate or uncertified interest representing any of the Owned Shares for until this Agreement is terminated pursuant to Section 5.1. In the event of a stock dividend or distribution, or any change in the Common Stock by reason of any
stock dividend, split-up, recapitalization, combination, exchange of shares or the like, the term “Owned Shares” as used in this Agreement shall refer to and include the Owned Shares as well as all such stock dividends and distributions
and any shares into which or for which any or all of the Owned Shares may be changed or exchanged or which are received in such transaction. 
 5. Miscellaneous. 
 5.1. Termination of this Agreement. This
Agreement shall terminate upon the earliest to occur of (i) any amendment to the Amended and Restated Securities Purchase Agreement effected without the consent of Stockholder that alters the terms of the transactions contemplated thereby in a
manner that is material and adverse to the Company’s stockholders other than Investor and its affiliates, (ii) the first Business Day following the date on which the Company Stockholder Approval shall have been obtained,
(iii) termination of the Amended and Restated Securities Purchase Agreement by any party thereto in accordance with its terms and (iv) December 31, 2012. In addition, this Agreement may be terminated by Investor at any time following
notice of such termination to Stockholder and the Company in accordance with Section 5.6 and reasonable good faith consultation with the Company in respect of such termination. 

5.2. Effect of Termination. In the event of termination of this Agreement pursuant to Section 5.1, this Agreement
shall become void and of no effect with no liability on the part of any party hereto; provided, that no such termination shall relieve any party hereto from any liability for any breach of this Agreement occurring prior to such termination.

 5.3. Non-Survival. The representations and warranties made herein shall not survive the termination of this Agreement.

 5.4. Entire Agreement; Assignment. This Agreement and the agreements referred to herein constitute the entire
understanding and agreement among the parties hereto with respect to the subject matter hereof and supersede all other prior agreements and understandings, both written and oral, among the parties with respect to the subject matter hereof. Nothing
in this Agreement, express or implied, is intended to or shall confer upon any other person or entity not a party hereto any right, benefit or remedy of any nature whatsoever under or by reason of this Agreement. This Agreement may not be assigned
by operation of law or otherwise without the prior written consent of the other parties hereto and shall be binding upon and inure solely to the benefit of each party hereto. 
 5.5. Amendments. This Agreement may not be amended, altered, supplemented, waived or otherwise modified except upon the execution and delivery of a written agreement executed by each of the parties
hereto. 

  
 -7-

 5.6. Notices. Any notice, request, claim, demand and other communication required to
be given hereunder shall be in writing, and sent by facsimile transmission (provided that any notice received by facsimile transmission or otherwise at the addressee’s location on any Business Day after 5:00 p.m. (addressee’s local time)
shall be deemed to have been received at 9:00 a.m. (addressee’s local time) on the next Business Day), by reliable overnight delivery service (with proof of service), hand delivery or certified or registered mail (return receipt requested and
first-class postage prepaid), addressed as follows: 
 If to Stockholder: to Stockholder’s last known address and fax
number on record with the Company. 
  

			
	If to Investor, to it at:
	
	 Roust Trading Ltd.

	 25 Belmont Hills Drive

	 Warwick WK 06, Bermuda

	 Attention:
	  	Wendell M. Hollis
	
	with copy to:
	
	 Ropes & Gray LLP

	 One Metro Center

	 700 12th
Street, NW, Suite 900

	 Washington, DC 20005-3948

	 Attention:
	  	James Myers
	 Facsimile:
	  	+1 (202) 383-8349
	
	 and

	
	 Ropes & Gray LLP

	 The Prudential Tower

	 800 Boylston Street

	 Boston, MA 02199-3600

	 Attention:
	  	Christopher Comeau
	 Facsimile:
	  	+1 (617) 951-7050
	
	If to the Company, to it at:
	
	 Central European Distribution Corporation

	 Bobrowiecka 6

	 00-728 Warsaw

	 Poland

	 Attention:
	  	David Bailey
	 Facsimile:
	  	+48 22 456 60 01

  
 -8-

			
	
	with a copy to:
	
	 Skadden, Arps, Slate, Meagher & Flom (UK) LLP

	 40 Bank St., Canary Wharf

	 London E14 5DS

	 UK

	 Attention:
	  	Scott Simpson, Esq.
	 Facsimile:
	  	+44 20 7519 7070

 and, subject to the provision in this Section 5.6 above, such notice shall be deemed to have been delivered
as of the date so telecommunicated, personally delivered or received. Any party to this Agreement may notify any other party of any changes to the address or any of the other details specified in this Section 5.6; provided, that
such notification shall only be effective on the date specified in such notice or two Business Days after the notice is given, whichever is later. Rejection or other refusal to accept or the inability to deliver because of changed address of which
no notice was given shall be deemed to be receipt of the notice as of the date of such rejection, refusal or inability to deliver. 
 5.7. Governing Law. 
  

	 	5.7.1.	This Agreement shall be governed by and construed in accordance with the internal, procedural and substantive laws of the State of New York without regard to any
conflicts of laws concepts which would apply the substantive law of some other jurisdiction. 

  

	 	5.7.2.	Each of the parties hereto irrevocably submits to the jurisdiction of the United States District Court and other courts of the United States sitting in the State of New
York and the state courts in the State of New York, in all cases, located in the Borough of Manhattan, and all appellate courts relating thereto, for the purpose of any suit, action, proceeding or judgment relating to or arising out of this
Agreement and the transactions contemplated hereby. Service of process in connection with any such suit, action or proceeding may be served on each party hereto anywhere in the world by the same methods as are specified for the giving of notices
under this Agreement. Each party hereto irrevocably waives any objection to the laying of venue of any such suit, action or proceeding brought in such courts and irrevocably waives any claim that any such suit, action or proceeding brought in any
such court has been brought in an inconvenient forum. EACH OF THE PARTIES HERETO WAIVES ANY RIGHT TO REQUEST A TRIAL BY JURY IN ANY LITIGATION WITH RESPECT TO THIS AGREEMENT AND REPRESENTS THAT COUNSEL HAS BEEN CONSULTED SPECIFICALLY AS TO THIS
WAIVER. 

 5.8. Specific Performance. Each of the parties hereto acknowledges and agrees that damages will
not be an adequate remedy for any material breach or violation of this Agreement if such material breach or violation would cause immediate and irreparable harm (an “Irreparable Breach”). Accordingly, in the event of a threatened or
ongoing Irreparable Breach, 

  
 -9-

 
each party hereto shall be entitled to seek equitable relief of a kind appropriate in light of the nature of the ongoing or threatened Irreparable Breach, which relief may include, without
limitation, specific performance or injunctive relief. Such remedies shall not be the parties’ exclusive remedies, but shall be in addition to all other remedies provided in this Agreement. 

5.9. Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original but all
of which together shall be considered one and the same agreement and shall become effective when counterparts have been signed by each of the parties hereto and delivered to the other parties, it being understood that all parties need not sign the
same counterpart. This Agreement may be executed and delivered by facsimile transmission or by scan and exchange of signatures by email. 
 5.10. Descriptive Headings. The descriptive headings used herein are inserted for convenience of reference only and are not intended to be part of or to affect the meaning or interpretation of this
Agreement. 
 5.11. Severability. Any term or provision of this Agreement that is invalid or unenforceable in any
situation in any jurisdiction shall not affect the validity or enforceability of the remaining terms and provisions hereof or the validity or enforceability of the offending term or provision in any other situation or in any other jurisdiction. If
the final judgment of a court of competent jurisdiction declares that any term or provision hereof is invalid or unenforceable, the parties hereto agree that the court making such determination shall have the power to limit the term or provision, to
delete specific words or phrases, or to replace any invalid or unenforceable term or provision with a term or provision that is valid and enforceable and that comes closest to expressing the intention of the invalid or unenforceable term or
provision, and this Agreement shall be enforceable as so modified. In the event such court does not exercise the power granted to it in the prior sentence, the parties hereto agree to replace such invalid or unenforceable term or provision with a
valid and enforceable term or provision that will achieve, to the extent possible, the economic, business and other purposes of such invalid or unenforceable term. 
 5.12. No Obligation to Exercise Options. Notwithstanding any provision in this Agreement to the contrary, nothing in this Agreement shall obligate Stockholder to exercise any stock option of the
Company or other right to acquire shares of Common Stock. 
 5.13. Further Assurances. From time to time, at another
party’s request and without further consideration, each party hereto shall execute and deliver such additional documents and take all such further lawful action as may be necessary to consummate and make effective, in the most expeditious
manner practicable, the transactions contemplated by this Agreement (including without limitation with respect to the provision of information necessary to make the notifications contemplated by Section 1.3). 

5.14. Remedies Cumulative. All rights, powers and remedies provided under this Agreement or otherwise available in respect hereof
at law or in equity shall be cumulative and not alternative, and the exercise of any thereof by any party hereto shall not preclude the simultaneous or later exercise of any other such right, power or remedy by such party. 

  
 -10-

 5.15. No Waiver. The failure of any party hereto to exercise any right, power or
remedy provided under this Agreement or otherwise available in respect hereof at law or in equity, or to insist upon compliance by any other party hereto with its obligations hereunder, and any custom or practice of the parties at variance with the
terms hereof, shall not constitute a waiver by such party of its right to exercise any such or other right, power or remedy or to demand such compliance. 
 5.16. No Third Party Beneficiaries. This Agreement is not intended to be for the benefit of, and shall not be enforceable by, any person or entity who or which is not a party hereto. 

5.17. Fees and Expenses. All costs and expenses incurred in connection with this Agreement and the transactions contemplated
hereby shall be paid by the party incurring the cost or expense. 
 5.18. Costs of Enforcement. In the event that legal
proceedings are commenced by any party to this Agreement against any other party to this Agreement in connection with this Agreement, the non-prevailing party in such proceedings shall pay the reasonable attorneys’ fees and other reasonable
out-of-pocket costs and expenses incurred by the prevailing party in such proceedings. 
 5.19. Amendment and
Restatement. This Agreement amends, supersedes and restates the Original Voting Agreement in all respects. 

[REMAINDER OF PAGE INTENTIONALLY BLANK] 

  
 -11-

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

					
	ROUST TRADING LTD.
		
	By:	 	  

		 	Name:	 	Wendell M. Hollis
		 	Title:	 	Director
		
	By:	 	  

		 	Name:	 	Dana Bean
		 	Title:	 	Secretary

 VOTING AGREEMENT SIGNATURE PAGE 

 
	
	STOCKHOLDER
	
	  

	William Carey

  

					
	CENTRAL EUROPEAN
	DISTRIBUTION CORPORATION
	(solely for purposes of Section 4.7)
		
	By:	 	  

		 	Name:	 	David Bailey
		 	Title:	 	Interim Chief Executive Officer

 VOTING AGREEMENT SIGNATURE PAGE 

 ATTACHMENT A 
 Details of Ownership 
  

			
	 Shares
	  	 Entity or Individual Name

		
	 4,089,846
	  	William CareyOctober 2, 2012 

 

 

 

 

 

 

 

RESEARCH FRONTIERS INCORPORATED

AND 

THE PURCHASERS NAMED HEREIN

____________________________________________________________

COMMON STOCK AND WARRANT PURCHASE
AGREEMENT 
 
____________________________________________________________

 

October 2, 2012 

 

 

 

 

 

 

October 2, 2012 

RESEARCH FRONTIERS INCORPORATED

COMMON STOCK AND WARRANT PURCHASE
AGREEMENT 

      
This Common Stock and Warrant Purchase Agreement (this “Agreement”) is made as of October 2,
2012 by and between Research Frontiers Incorporated, a Delaware corporation
(the “Company”), and those purchasers listed on the attached Exhibit A, as such exhibit
may be amended from time to time (each a “Purchaser”, and collectively, the
“Purchasers”). 

Recitals 

       A.
The Company has authorized the sale and issuance of up to 1,250,000 shares (the
“Shares”)
of the common stock of the Company, $0.0001 par value per share (the
“Common Stock”), and warrants to purchase 250,000 shares of Common Stock in a private
placement (the “Offering”). 

       B.
Pursuant to Section 4(2) of the Securities Act of 1933 (the “Securities Act” or the
“Act”) and
Rule 506 promulgated thereunder, the Company desires to sell to the Purchasers
listed on the attached Exhibit
A, as such exhibit may be amended from time
to time, and such Purchasers, severally and not jointly, desire to purchase from
the Company that aggregate number of shares of Common Stock set forth opposite
such Purchaser’s name on Exhibit
A, and warrants to purchase that aggregate
number of shares of Common Stock set forth opposite such Purchaser’s name on
Exhibit A
on the terms and subject to the conditions set forth in this Agreement.

Terms and Conditions

      
Now, therefore, in consideration of the foregoing recitals and the mutual
covenants and agreements contained herein, the parties hereto, intending to be
legally bound, do hereby agree as follows: 

1. Purchase of the Securities.

      
1.1 Agreement to Sell and Purchase. At the Closing (as hereinafter defined), the Company will issue and sell
to each of the Purchasers, and each Purchaser will, severally and not jointly,
purchase from the Company, the number of Shares and warrants to purchase Common
Stock of the Company (the “Warrants” and together with the
Shares, the “Securities”) set forth opposite such Purchaser’s name on Exhibit A for an aggregate
purchase price set forth opposite such Purchaser’s name on Exhibit A (the
“Purchase Price”). The Warrants shall be in the form set forth hereto as Exhibit B. 

       1.2 Placement Agent
Fee. The Purchasers acknowledge that the
Company intends to pay to Craig-Hallum Capital Group LLC, in its capacity as the
placement agent for the Offering (the “Placement Agent”), a fee in respect of
the sale of Securities to any Purchaser. The Company shall indemnify and hold
harmless the Purchasers from and against all fees, commissions, or other
payments owing by the Company to the Placement Agent or any other persons from
or acting on behalf of the Company hereunder. 

      
1.3 Closing; Closing Date. The
completion of the sale and purchase of the Securities (the “Closing”) shall be held at
9:00 a.m. (Central Time) as soon as practicable following the satisfaction of
the conditions set forth in Section 4 (the “Closing Date”), at the offices of the
Company, 240 Crossways Park Drive, Woodbury, New York 11797-2033, or at such
other time and place as the Company and Purchasers may agree. 

      
1.4 Delivery of the Shares. At
the Closing, subject to the terms and conditions hereof, the Company will
deliver to each Purchaser a stock certificate or certificates and Warrant or
Warrants, in such denominations and registered in such names as such Purchaser
may designate by notice to the Company, representing the Securities, dated as of
the Closing Date (each a “Certificate”), against payment of the
purchase price therefor by cash in the form of wire transfer, unless other means
of payment shall have been agreed upon by the Purchasers and the
Company.

Page 1 

2. Representations and Warranties of
the Company. The Company hereby represents
and warrants to each Purchaser:

      
2.1 Authorization; No Conflicts; Authority. This Agreement has been duly authorized, executed and delivered by the
Company, and constitutes a valid, legal and binding obligation of the Company,
enforceable in accordance with its terms, except as rights to indemnity
hereunder may be limited by federal or state securities laws and except as such
enforceability may be limited by bankruptcy, insolvency, reorganization or
similar laws affecting the rights of creditors generally and subject to general
principles of equity. The Warrants have been duly authorized and, on the Closing
Date will be, duly executed and delivered by the Company, and, when issued and
paid for in accordance with the terms hereof, will constitute valid, legal and
binding obligations of the Company, enforceable in accordance with their terms,
except as rights to indemnity thereunder may be limited by federal or state
securities laws and except as such enforceability may be limited by bankruptcy,
insolvency, reorganization or similar laws affecting the rights of creditors
generally and subject to general principles of equity. The execution, delivery
and performance of this Agreement and the consummation of the transactions
herein contemplated (which, in all cases hereunder, includes the issuance of the
Common Stock issuable upon exercise of the Warrants (the “Warrant Shares”)) will not
(i) conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or assets of the
Company or any of its subsidiaries pursuant to any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to which the Company or
any of its subsidiaries is a party or by which the Company or any of its
subsidiaries is bound or to which any of the property or assets of the Company
or any of its subsidiaries is subject, (ii) result in any violation of the
provisions of the Company’s charter or by-laws or (iii) result in the violation
of any law or statute or any judgment, order, rule, regulation or decree of any
court or arbitrator or federal, state, local or foreign governmental agency or
regulatory authority having jurisdiction over the Company or any of its
subsidiaries or any of their properties or assets (each, a “Governmental Authority”),
except in the case of clause (i) as would not result in a material adverse
effect upon the business, prospects, management, properties, operations,
condition (financial or otherwise) or results of operations of the Company and
its subsidiaries, taken as a whole (“Material
Adverse Effect”). Except for notices required
or permitted to be filed with certain state and federal securities commissions,
which notices will be filed on a timely basis, no consent, approval,
authorization or order of, or registration or filing with any Governmental
Authority is required for the execution, delivery and performance of this
Agreement or for the consummation of the transactions contemplated hereby,
including the issuance or sale of the Securities by the Company, except such as
may be required under the Act or state securities or blue sky laws; and the
Company has full power and authority to enter into this Agreement and to
consummate the transactions contemplated hereby, including the authorization,
issuance and sale of the Securities as contemplated by this
Agreement. 

      
2.2 No Violations or Defaults. Neither the
Company nor any of its subsidiaries is in violation of its respective charter,
by-laws or other organizational documents, or in breach of or otherwise in
default, and no event has occurred which, with notice or lapse of time or both,
would constitute such a default in the performance of any material obligation,
agreement or condition contained in any bond, debenture, note, indenture, loan
agreement or any other material contract, lease or other instrument to which it
is subject or by which any of them may be bound, or to which any of the material
property or assets of the Company or any of its subsidiaries is subject.

      
2.3 Organization, Good Standing and Qualification. Each of the Company and its subsidiaries has been duly organized and is
validly existing as a corporation in good standing under the laws of its
jurisdiction of incorporation. Each of the Company and its subsidiaries has full
corporate power and authority to own its properties and conduct its business as
currently being carried on and as described in the Company SEC Documents, is
duly qualified to do business as a foreign corporation in good standing in each
jurisdiction in which it owns or leases real property or in which the conduct of
its business makes such qualification necessary and in which the failure to so
qualify would have a Material Adverse Effect.

Page 2 

       2.4 Ownership of Assets.
The Company and its subsidiaries have good
and marketable title to all property (whether real or personal) described in the
Company SEC Documents as being owned by them, in each case free and clear of all
liens, claims, security interests, other encumbrances or defects except such as
are described in the Company SEC Documents. The property held under lease by the
Company and its subsidiaries is held by them under valid, subsisting and
enforceable leases with only such exceptions with respect to any particular
lease as do not interfere in any material respect with the conduct of the
business of the Company or its subsidiaries.

      
2.5 SEC Filings. Each report, registration
statement and definitive proxy statement filed by the Company with the
Securities and Exchange Commission (the “SEC,” and the documents, the
“Company SEC Documents”): (i) complied as to form in all material respects with the
published rules and regulations of the SEC applicable thereto and were timely
filed; (ii) the information contained therein as of the respective dates thereof
did not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein in light of the circumstances under which they were made not misleading;
(iii) the consolidated financial statements contained therein were prepared in
accordance with generally accepted accounting principles applied on a consistent
basis throughout the periods covered, except as may be indicated in the notes to
such financial statements and (in the case of unaudited statements) as permitted
by Form 10-Q of the SEC, and except that unaudited financial statements may not
contain footnotes and are subject to year-end audit adjustments; and (iv) the
consolidated balance sheets contained therein fairly present the consolidated
financial position of the Company and its subsidiaries as of the respective
dates thereof and the consolidated results of operations cash flows and the
changes in stockholders’ equity of the Company and its subsidiaries for the
periods covered thereby. Except as set forth in the financial statements
included in the Company SEC Documents, neither the Company nor its subsidiaries
has any liabilities, contingent or otherwise, other than liabilities incurred in
the ordinary course of business subsequent to June 30, 2012, and liabilities of
the type not required under generally accepted accounting principles to be
reflected in such financial statements. Such liabilities incurred subsequent to
June 30, 2012, are not, in the aggregate, material to the financial condition or
operating results of the Company and its subsidiaries, taken as a whole.

      
2.6 Capitalization. All of the issued and
outstanding shares of capital stock of the Company, including the outstanding
shares of Common Stock, are duly authorized and validly issued, fully paid and
nonassessable, have been issued in compliance with all federal and state and
foreign securities laws, were not issued in violation of or subject to any
preemptive rights or other rights to subscribe for or purchase securities that
have not been waived in writing (a copy of which has been delivered to counsel
to the Purchasers), and the holders thereof are not subject to personal
liability by reason of being such holders; the Shares and the Warrant Shares
have been duly authorized and, when issued, delivered and paid for in accordance
with the terms of this Agreement or, if applicable, in accordance with the terms
of the Warrants, will have been validly issued and will be fully paid and
nonassessable, and the holders thereof will not be subject to personal liability
by reason of being such holders; and the capital stock of the Company, including
the Shares and the Warrant Shares, conforms to the description thereof in the
Company SEC Documents. The Warrant Shares have been duly reserved for issuance
upon exercise of the Warrants. Except as otherwise stated in the Company SEC
Documents, (i) there are no preemptive rights or other rights to subscribe for
or to purchase, or any restriction upon the voting or transfer of, any shares of
Common Stock pursuant to the Company’s charter, by-laws or any agreement or
other instrument to which the Company or any of its subsidiaries is a party or
by which the Company or any of its subsidiaries is bound and (ii) the offering
or sale of the Securities as contemplated by this Agreement does not give rise
to any rights for or relating to the registration of any shares of Common Stock
or other securities of the Company. All of the issued and outstanding shares of
capital stock of each of the Company’s subsidiaries have been duly and validly
authorized and issued and are fully paid and nonassessable, and, except as
otherwise described in the Company SEC Documents, the Company owns of record and
beneficially, free and clear of any security interests, claims, liens, proxies,
equities or other encumbrances, all of the issued and outstanding shares of such
stock.

Page 3 

       2.7 Stock Options. Except as described in the Company SEC Documents, there are no
options, warrants, agreements, contracts or other rights in existence to
purchase or acquire from the Company or any subsidiary of the Company any shares
of the capital stock of the Company or any subsidiary of the Company. The
description of the Company’s stock option, stock bonus and other stock plans or
arrangements (the “Company Stock
Plans”), and the options (the
“Options”)
or other rights granted thereunder, set forth in the Company SEC Documents
accurately and fairly presents the information required to be shown with respect
to such plans, arrangements, options and rights. Each grant of an Option (i) was
duly authorized no later than the date on which the grant of such Option was by
its terms to be effective by all necessary corporate action, including, as
applicable, approval by the board of directors of the Company (or a duly
constituted and authorized committee thereof) and any required stockholder
approval by the necessary number of votes or written consents, and the award
agreement governing such grant (if any) was duly executed and delivered by each
party thereto and (ii) was made in accordance with the terms of the applicable
Company Stock Plan, and all applicable laws and regulatory rules or
requirements, including all applicable federal securities laws. 

       2.8 Subsidiaries. Other than the subsidiaries of the Company listed in Exhibit
21 to the Company’s Annual Report on Form 10-K for the fiscal year ended
December 31, 2011 the Company, directly or indirectly, owns no capital stock or
other equity or ownership or proprietary interest in any corporation,
partnership, association, trust or other entity.

       2.9 Offering. Assuming the accuracy of the representations of the Purchasers
in Section 3.3 of this Agreement on the date hereof, on the Closing Date and
solely as this Section 2.9 relates to the issue and sale of the Warrant Shares
on the date(s) of exercise of the Warrants, the offer, issue and sale of the
Securities and issuance of the Warrant Shares upon exercise of the Warrants
(assuming no change in applicable law prior to the date the Warrant Shares are
issued), are and will be exempt from the registration and prospectus delivery
requirements of the Securities Act and have been or will be registered or
qualified (or are or will be exempt from registration and qualification) under
the registration, permit or qualification requirements of all applicable state
securities laws. Neither the Company, nor any of its affiliates, nor any person
acting on its or their behalf, has directly or indirectly made any offers or
sales of any security or solicited any offers to buy any security under
circumstances that would require registration under the Securities Act of the
issuance of the Securities to the Purchasers or the issuance of the Warrant
Shares upon exercise of the Warrants. Other than the Company SEC Documents, the
Company has not distributed and will not distribute prior to the Closing Date
any offering material in connection with the offering and sale of the Securities
or Warrant Shares. The Company has not taken any action to sell, offer for sale
or solicit offers to buy any securities of the Company which would bring the
offer, issuance or sale of the Securities or the issuance of the Warrant Shares
upon exercise of the Warrants, within the provisions of Section 5 of the
Securities Act, unless such offer, issuance or sale was or shall be within the
exemptions of Section 4 of the Securities Act. 

       2.10 Litigation. Except as set forth in the Company SEC Documents, there is not
pending or, to the knowledge of the Company, threatened or contemplated, any
action, suit or proceeding (a) to which the Company or any of its subsidiaries
is a party or (b) which has as the subject thereof any officer or director of
the Company or any subsidiary, any employee benefit plan sponsored by the
Company or any subsidiary or any property or assets owned or leased by the
Company or any subsidiary before or by any court or Governmental Authority, or
any arbitrator, which, individually or in the aggregate, might result in any
material adverse change in the general affairs, condition (financial or
otherwise), business, prospects, management, properties, operations or results
of operations of the Company and its subsidiaries, taken as a whole
(“Material Adverse Change”), or would materially and adversely affect the ability of
the Company to perform its obligations under this Agreement or which are
otherwise material in the context of the sale of the Securities. There are no
current or, to the knowledge of the Company, pending, legal, governmental or
regulatory actions, suits or proceedings (i) to which the Company or any of its
subsidiaries is subject or (ii) which has as the subject thereof any officer or
director of the Company or any subsidiary, any employee plan sponsored by the
Company or any subsidiary or any property or assets owned or leased by the
Company or any subsidiary, that are required to be described in the Company SEC
Documents by the Securities Exchange Act of 1934, as amended (the “Exchange
Act”), the rules and regulations under the Exchange Act, the Act or by the rules
and regulations under the Act and that have not been so described.

Page 4 

       2.11 No Brokers. Except for any fees payable to the Placement Agent, no broker,
finder or investment banker is entitled to any brokerage, finder’s or other fee
or commission in connection with the transactions contemplated by this Agreement
based on arrangements made by the Company. 

      
2.12 Compliance. The Company and each of its
subsidiaries holds, and is operating in compliance in all material respects
with, all franchises, grants, authorizations, licenses, permits, easements,
consents, certificates and orders of any Governmental Authority or
self-regulatory body required for the conduct of its business and all such
franchises, grants, authorizations, licenses, permits, easements, consents,
certifications and orders are valid and in full force and effect; and neither
the Company nor any of its subsidiaries has received notice of any revocation or
modification of any such franchise, grant, authorization, license, permit,
easement, consent, certification or order or has reason to believe that any such
franchise, grant, authorization, license, permit, easement, consent,
certification or order will not be renewed in the ordinary course; and the
Company and each of its subsidiaries is in compliance in all material respects
with all applicable federal, state, local and foreign laws, regulations, orders
and decrees. 

      
2.13 No Material Changes. Except as disclosed
in the Company SEC Documents, since June 30, 2012, neither the Company nor any
of its subsidiaries has incurred any material liabilities or obligations, direct
or contingent, or entered into any material transactions (other than the
consummation of the sale of Common Stock and warrants to purchase Common Stock
on each of August 2, 2012 and August 31, 2012 (collectively, the
“Offerings”)), or declared or paid any dividends or made any distribution of any
kind with respect to its capital stock; and there has not been any change in the
capital stock (other than a change in the number of outstanding shares of Common
Stock due to the Offerings or the issuance of shares upon the exercise of
outstanding options or warrants or conversion of convertible securities), or any
material change in the short term or long term debt (other than as a result of
the conversion of convertible securities), or any issuance of options, warrants,
convertible securities or other rights to purchase the capital stock (other than
the Offerings), of the Company or any of its subsidiaries, or any Material
Adverse Change or any development which could reasonably be expected to result
in any Material Adverse Change.

      
2.14 Intellectual Property. The Company and
each of its subsidiaries owns, possesses, or can acquire on reasonable terms,
all Intellectual Property necessary for the conduct of the Company’s and it
subsidiaries’ business as now conducted or as described in the Company SEC
Documents to be conducted, except as such failure to own, possess, or acquire
such rights would not result in a Material Adverse Effect. Furthermore, (i) to
the knowledge of the Company, there is no infringement, misappropriation or
violation by third parties of any such Intellectual Property, except as such
infringement, misappropriation or violation would not result in a Material
Adverse Effect; (ii) there is no pending or, to the knowledge of the Company,
threatened, action, suit, proceeding or claim by others challenging the
Company’s or any of its subsidiaries’ rights in or to any such Intellectual
Property, and the Company is unaware of any facts which would form a reasonable
basis for any such claim; (iii) the Intellectual Property owned by the Company
and its subsidiaries, and to the knowledge of the Company, the Intellectual
Property licensed to the Company and its subsidiaries, has not been adjudged
invalid or unenforceable, in whole or in part, and there is no pending or, to
the knowledge of the Company, threatened action, suit, proceeding or claim by
others challenging the validity or scope of any such Intellectual Property, and
the Company is unaware of any facts which would form a reasonable basis for any
such claim; (iv) there is no pending or, to the knowledge of the Company,
threatened action, suit, proceeding or claim by others
that the Company or any of its subsidiaries infringes, misappropriates or
otherwise violates any Intellectual Property or other proprietary rights of
others, neither the Company or any of its subsidiaries has received any written
notice of such claim and the Company is unaware of any other fact which would
form a reasonable basis for any such claim; and (v) to the Company’s knowledge,
no employee of the Company or any of its subsidiaries is in or has ever been in
violation of any term of any employment contract, patent disclosure agreement,
invention assignment agreement, non-competition agreement, non-solicitation
agreement, nondisclosure agreement or any restrictive covenant to or with a
former employer where the basis of such violation relates to such employee’s
employment with the Company nor any of its subsidiaries or actions undertaken by
the employee while employed with the Company or any of its subsidiaries, except
as such violation would not result in a Material Adverse Effect.
“Intellectual Property” shall mean all patents, patent applications, trade and
service marks, trade and service mark registrations, trade names, copyrights,
licenses, inventions, trade secrets, domain names, technology, know-how and
other intellectual property.

Page 5 

      
2.15 Exchange Compliance. The Common Stock is
registered pursuant to Section 12(b) of the Exchange Act and is included or
approved for listing on the NASDAQ Capital Market and the Company has taken no
action designed to, or likely to have the effect of, terminating the
registration of the Common Stock under the Exchange Act or delisting the Common
Stock from the NASDAQ Capital Market nor has the Company received any
notification that the SEC or the NASDAQ Capital Market is contemplating
terminating such registration or listing. The Company has complied in all
material respects with the applicable requirements of the NASDAQ Capital Market
for maintenance of inclusion of the Common Stock thereon. The Company has filed
an application to include the Securities on the NASDAQ Capital
Market. 

       2.16 Form S-3
Eligibility. The Company is eligible to
register the Shares and the Warrant Shares for resale by the Purchasers using
Form S-3 promulgated under the Securities Act. 

      
2.17 Taxes. The Company and its subsidiaries
have timely filed all federal, state, local and foreign income and franchise tax
returns required to be filed and are not in default in the payment of any taxes
which were payable pursuant to said returns or any assessments with respect
thereto, other than any which the Company or any of its subsidiaries is
contesting in good faith. There is no pending dispute with any taxing authority
relating to any of such returns, and the Company has no knowledge of any
proposed liability for any tax to be imposed upon the properties or assets of
the Company for which there is not an adequate reserve reflected in the
Company’s financial statements included in the Company SEC Documents.

      
2.18 Insurance. The Company and each of its
subsidiaries carries, or is covered by, insurance from reputable insurers in
such amounts and covering such risks as is adequate for the conduct of its
business and the value of its properties and the properties of its subsidiaries
and as is customary for companies engaged in similar businesses in similar
industries; all policies of insurance and any fidelity or surety bonds insuring
the Company or any of its subsidiaries or its business, assets, employees,
officers and directors are in full force and effect; the Company and its
subsidiaries are in compliance with the terms of such policies and instruments
in all material respects; there are no claims by the Company or any of its
subsidiaries under any such policy or instrument as to which any insurance
company is denying liability or defending under a reservation of rights clause;
neither the Company nor any of its subsidiaries has been refused any insurance
coverage sought or applied for; and neither the Company nor any of its
subsidiaries has reason to believe that it will not be able to renew its
existing insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary to continue its
business at a cost that would not have a Material Adverse Effect. 

      
2.19 Transfer Taxes. On the Closing Date, all
stock transfer or other taxes (other than income taxes) that are required to be
paid in connection with the sale and transfer of the Securities hereunder will
be, or will have been, fully paid or provided for by the Company and the Company
will have complied with all laws imposing such taxes. 

Page 6 

      
2.20 Investment Company. The Company is not
and, after giving effect to the offering and sale of the Securities, will not be
an “investment company,” as such term is defined in the Investment Company Act
of 1940, as amended. 

      
2.21 Internal Controls. The Company and its
subsidiaries maintain a system of internal accounting controls sufficient to
provide reasonable assurances that (i) transactions are executed in accordance
with management’s general or specific authorization; (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles in the United States
and to maintain accountability for assets; (iii) access to assets is permitted
only in accordance with management’s general or specific authorization; and (iv)
the recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences. Except as disclosed in the Company SEC Documents, the Company’s
internal control over financial reporting is effective and none of the Company,
its board of directors and audit committee is aware of any “significant
deficiencies” or “material weaknesses” (each as defined by the Public Company
Accounting Oversight Board) in its internal control over financial reporting, or
any fraud, whether or not material, that involves management or other employees
of the Company and its subsidiaries who have a significant role in the Company’s
internal controls; and since the end of the latest audited fiscal year, there
has been no change in the Company’s internal control over financial reporting
(whether or not remediated) that has materially affected, or is reasonably
likely to materially affect, the Company’s internal control over financial
reporting. The Company’s board of directors has, subject to the exceptions, cure
periods and the phase in periods specified in the applicable stock exchange
rules (“Exchange Rules”), validly appointed an audit committee to oversee internal
accounting controls whose composition satisfies the applicable requirements of
the Exchange Rules and the Company’s board of directors and/or the audit
committee has adopted a charter that satisfies the requirements of the Exchange
Rules. 

       2.22 No General
Solicitation. Neither the Company, nor any of
its affiliates, nor any person acting on its or their behalf, has engaged in any
form of general solicitation or general advertising (within the meaning of
Regulation D promulgated under the Securities Act) in connection with the offer
or sale of the Securities.

       2.23 [Intentionally omitted] 

       2.24 Anti-Bribery and Money
Laundering Laws. Each of the Company, its
subsidiaries, its affiliates and any of their respective officers, directors,
supervisors, managers, agents, or employees, has not violated, its participation
in the Offering will not violate, and the Company and each of its subsidiaries
has instituted and maintains policies and procedures designed to ensure
continued compliance with, each of the following laws: anti-bribery laws,
including but not limited to, any applicable law, rule, or regulation of any
locality, including but not limited to any law, rule, or regulation promulgated
to implement the OECD Convention on Combating Bribery of Foreign Public
Officials in International Business Transactions, signed December 17, 1997,
including the U.S. Foreign Corrupt Practices Act of 1977, as amended, the U.K.
Bribery Act 2010, or any other law, rule or regulation of similar purposes and
scope, or anti-money laundering laws, including but not limited to, applicable
federal, state, international, foreign or other laws, regulations or government
guidance regarding anti-money laundering, including, without limitation, Title
18 US. Code section 1956 and 1957, the Patriot Act, the Bank Secrecy Act, and
international anti-money laundering principles or procedures by an
intergovernmental group or organization, such as the Financial Action Task Force
on Money Laundering, of which the United States is a member and with which
designation the United States representative to the group or organization
continues to concur, all as amended, and any executive order, directive, or
regulation pursuant to the authority of any of the foregoing, or any orders or
licenses issued thereunder. 

       2.25 Sarbanes-Oxley
Act. The Company is in compliance with all
applicable provisions of the Sarbanes-Oxley Act and the rules and regulations of
the SEC thereunder. 

Page 7 

       2.26 Disclosure
Controls. The Company has established and
maintains disclosure controls and procedures (as defined in Rules 13a-14 and
15d-14 under the Exchange Act) and such controls and procedures are effective in
ensuring that material information relating to the Company, including its
subsidiaries, is made known to the principal executive officer and the principal
financial officer. The Company has utilized such controls and procedures in
preparing and evaluating the disclosures in the Company SEC
Documents.

      
2.27 OFAC.

             
(a) Neither the Company nor any of its
subsidiaries, nor any or their directors, officers or employees, nor, to the
Company’s knowledge, any agent, affiliate or representative of the Company or
its subsidiaries, is an individual or entity that is, or is owned or controlled
by an individual or entity that is: 

                           
(i) the subject of any
sanctions administered or enforced by the U.S. Department of Treasury’s Office
of Foreign Assets Control, the United Nations Security Council, the European
Union, Her Majesty’s Treasury, or other relevant sanctions authority
(collectively, “Sanctions”), nor 

                           
(ii) located, organized or
resident in a country or territory that is the subject of Sanctions (including,
without limitation, Cuba, Iran, Libya, North Korea, Sudan and Syria).

             
(b) Neither the Company nor any of its
subsidiaries will, directly or indirectly, use the proceeds of the offering, or
lend, contribute or otherwise make available such proceeds to any subsidiary,
joint venture partner or other individual or entity: 

                    
(i) to fund or facilitate any
activities or business of or with any individual or entity or in any country or
territory that, at the time of such funding or facilitation, is the subject of
Sanctions; or 

                    
(ii) in any other manner that
will result in a violation of Sanctions by any individual or entity (including
any individual or entity participating in the offering, whether as underwriter,
advisor, investor or otherwise). 

             
(c) For the past five years, neither the
Company nor any of its subsidiaries has knowingly engaged in, and is not now
knowingly engaged in, any dealings or transactions with any individual or
entity, or in any country or territory, that at the time of the dealing or
transaction is or was the subject of Sanctions. 

Page 8 

      
2.28 ERISA and Employee Benefits. (A) To the
knowledge of the Company, no “prohibited transaction” as defined under Section
406 of ERISA or Section 4975 of the Code and not exempt under ERISA Section 408
and the regulations and published interpretations thereunder has occurred with
respect to any Employee Benefit Plan. At no time has the Company or any ERISA
Affiliate maintained, sponsored, participated in, contributed to or has or had
any liability or obligation in respect of any Employee Benefit Plan subject to
Part 3 of Subtitle B of Title I of ERISA, Title IV of ERISA, or Section 412 of
the Code or any “multiemployer plan” as defined in Section 3(37) of ERISA or any
multiple employer plan for which the Company or any ERISA Affiliate has incurred
or could incur liability under Section 4063 or 4064 of ERISA. No Employee
Benefit Plan provides or promises, or at any time provided or promised, retiree
health, life insurance, or other retiree welfare benefits except as may be
required by the Consolidated Omnibus Budget Reconciliation Act of 1985, as
amended, or similar state law. Each Employee Benefit Plan is and has been
operated in material compliance with its terms and all applicable laws,
including but not limited to ERISA and the Code and, to the knowledge of the
Company, no event has occurred (including a “reportable event” as such term is
defined in Section 4043 of ERISA) and no condition exists that would subject the
Company or any ERISA Affiliate to any material tax, fine, lien, penalty or
liability imposed by ERISA, the Code or other applicable law. Each Employee
Benefit Plan intended to be qualified under Code Section 401(a) is so qualified
and has a favorable determination or opinion letter from the IRS upon
which it can rely, and any such determination or opinion letter remains in
effect and has not been revoked; to the knowledge of the Company, nothing has
occurred since the date of any such determination or opinion letter that is
reasonably likely to adversely affect such qualification; (B) with respect to
each Foreign Benefit Plan, such Foreign Benefit Plan (1) if intended to qualify
for special tax treatment, meets, in all material respects, the requirements for
such treatment, and (2) if required to be funded, is funded to the extent
required by applicable law, and with respect to all other Foreign Benefit Plans,
adequate reserves therefor have been established on the accounting statements of
the applicable Company or subsidiary; (C) the Company does not have any
obligations under any collective bargaining agreement with any union and no
organization efforts are underway with respect to Company employees. As used in
this Agreement, “Code” means the Internal Revenue Code of 1986, as amended;
“Employee Benefit Plan” means any “employee benefit plan” within the meaning of
Section 3(3) of ERISA, including, without limitation, all stock purchase, stock
option, stock-based severance, employment, change-in-control, medical,
disability, fringe benefit, bonus, incentive, deferred compensation, employee
loan and all other employee benefit plans, agreements, programs, policies or
other arrangements, whether or not subject to ERISA, under which (1) any current
or former employee, director or independent contractor of the Company or its
subsidiaries has any present or future right to benefits and which are
contributed to, sponsored by or maintained by the Company or any of its
respective subsidiaries or (2) the Company or any of its subsidiaries has had or
has any present or future obligation or liability; “ERISA” means the Employee Retirement
Income Security Act of 1974, as amended; “ERISA Affiliate” means any member of
the company’s controlled group as defined in Code Section 414(b), (c), (m) or
(o); and “Foreign Benefit Plan” means any Employee Benefit Plan established, maintained or
contributed to outside of the United States of America or which covers any
employee working or residing outside of the United States. 

       2.29 Labor Matters. No labor problem or dispute with the employees of the Company
or any of its subsidiaries exists or is threatened or imminent, and the Company
is not aware of any existing or imminent labor disturbance by the employees of
any of its or its subsidiaries’ principal suppliers, contractors or customers,
that could have a Material Adverse Effect. 

       2.30 [Intentionally omitted] 

       2.31 Occupational Laws.
The Company and each of its subsidiaries (i)
is in compliance, in all material respects, with any and all applicable foreign,
federal, state and local laws, rules, regulations, treaties, statutes and codes
promulgated by any and all Governmental Authorities (including pursuant to the
Occupational Health and Safety Act) relating to the protection of human health
and safety in the workplace (“Occupational
Laws”); (ii) has received all material
permits, licenses or other approvals required of it under applicable
Occupational Laws to conduct its business as currently conducted; and (iii) is
in compliance, in all material respects, with all terms and conditions of such
permit, license or approval. No action, proceeding, revocation proceeding, writ,
injunction or claim is pending or, to the Company’s knowledge, threatened
against the Company or any of its subsidiaries relating to Occupational Laws,
and the Company does not have knowledge of any facts, circumstances or
developments relating to its operations or cost accounting practices that could
reasonably be expected to form the basis for or give rise to such actions,
suits, investigations or proceedings.

       2.32 Environmental
Laws. Except as disclosed in the Company SEC
Documents, neither the Company nor any of its subsidiaries is in violation of
any statute, any rule, regulation, decision or order of any Governmental
Authority or any court, domestic or foreign, relating to the use, disposal or
release of hazardous or toxic substances or relating to the protection or
restoration of the environment or human exposure to hazardous or toxic
substances (collectively, “Environmental
Laws”), owns or operates any real property
contaminated with any substance that is subject to any environmental laws, is
liable for any off-site disposal or contamination pursuant to any Environmental
Laws, or is subject to any claim relating to any Environmental Laws, which
violation, contamination, liability or claim would individually or in the
aggregate, have a Material Adverse Effect; and the Company is not aware of any
pending investigation which might lead to such a claim.
Neither the Company nor any of its subsidiaries anticipates incurring any
material capital expenditures relating to compliance with Environmental Laws.

Page 9 

       2.33 Restrictions on Subsidiary Payments. No subsidiary of the Company is currently prohibited, directly or
indirectly, from paying any dividends to the Company, from making any other
distribution on such subsidiary’s capital stock, from repaying to the Company
any loans or advances to such subsidiary from the Company or from transferring
any of such subsidiary’s property or assets to the Company or any other
subsidiary of the Company, except as described in or contemplated by the Company
SEC Documents. 

      
2.34 No Manipulation; Disclosure of Information. The Company has not taken and will not take any action designed to or
that might reasonably be expected to cause or result in an unlawful manipulation
of the price of the Common Stock to facilitate the sale or resale of the
Securities. The Company confirms that, to its knowledge, with the exception of
the proposed sale of Securities as contemplated herein (as to which the Company
makes not representation), neither it nor any other person acting on its behalf
has provided any of the Purchasers or their agents or counsel with any
information that constitutes or might constitute material, non-public
information. The Company understands and confirms that the Purchasers shall be
relying on the foregoing representations in effecting transactions in securities
of the Company. All disclosures provided to the Purchasers regarding the
Company, its business and the transactions contemplated hereby, including the
exhibits to this Agreement, furnished by the Company are true and correct and do
not contain any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements made therein, in light
of the circumstances under which they were made, not misleading. 

3. Representations and Warranties of the Purchasers. Each Purchaser, severally and not jointly, hereby represents and warrants
to the Company as follows: 

       3.1 Legal Power. The Purchaser has
the requisite authority to enter into this Agreement and to carry out and
perform its obligations under the terms of this Agreement. All action on the
Purchaser’s part required for the lawful execution and delivery of this
Agreement have been or will be effectively taken prior to the Closing.

      
3.2 Due Execution. This Agreement has been
duly authorized, executed and delivered by the Purchaser, and, upon due
execution and delivery by the Company, this Agreement will be a valid and
binding agreement of the Purchaser, except as enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors’ rights generally or by equitable principles. 

       3.3 Investment Representations. In
connection with the sale and issuance of the Securities and Warrant Shares, the
Purchaser, for itself and no other Purchaser, makes the following
representations: 

             
(a) Investment for Own Account. The Purchaser is acquiring the Securities and the Warrant Shares for
its own account, not as nominee or agent, and not with a view to, or for resale
in connection with, any distribution or public offering thereof within the
meaning of the Securities Act; provided, however, that by making the
representations herein, the Purchaser does not agree to hold any of the
Securities for any minimum or specific term and reserves the right to dispose of
the securities at any time in accordance with or pursuant to a registration
statement or an exemption from the registration requirements of the Securities
Act. 

Page 10 

             
(b) Transfer Restrictions; Legends. The
Purchaser understands that (i) the Securities and Warrant Shares have not been
registered under the Securities Act; (ii) the Securities and Warrant Shares are
being offered and sold pursuant to an exemption from registration, based in part
upon the Company’s reliance upon the statements and representations made by the
Purchasers in this Agreement, and that the Securities and Warrant Shares must be
held by the Purchaser indefinitely, and that the Purchaser must, therefore, bear
the economic risk of such investment indefinitely, unless a subsequent
disposition thereof is registered under the Securities Act or is exempt from
such registration; (iii) each certificate representing the Securities and
Warrant Shares will be endorsed with the following legend until the earlier of
(1) in the case of the Shares and Warrant Shares, such date as the Shares or
Warrant Shares, as the case may be, have been registered for resale by the
Purchaser or (2) the date the Shares, the Warrants or the Warrant Shares, as the
case may be, are eligible for sale under Rule 144 under the Securities Act
(“Rule 144”): 

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”), OR UNDER THE SECURITIES LAWS OF ANY STATES. THESE SECURITIES ARE
SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED
OR RESOLD EXCEPT AS PERMITTED UNDER THE SECURITIES ACT AND THE APPLICABLE STATE
SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. UNLESS SOLD
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, THE
ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINION OF COUNSEL IN FORM AND
SUBSTANCE SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY PROPOSED TRANSFER OR
RESALE IS IN COMPLIANCE WITH THE SECURITIES ACT AND ANY APPLICABLE STATE
SECURITIES LAWS. 

(iv) the Company will instruct any
transfer agent not to register the transfer of the Securities or Warrant Shares
(or any portion thereof) until the applicable date set forth in clause (iii)
above unless the conditions specified in the foregoing legends are satisfied or,
if the opinion of counsel referred to above is to the further effect that such
legend is not required in order to establish compliance with any provisions of
the Securities Act or this Agreement, or other satisfactory assurances of such
nature are given to the Company. 

      
The Company acknowledges and agrees that a Purchaser may from time to time
pledge, and/or grant a security interest in some or all of the Securities
pursuant to a bona fide margin agreement in connection with a bona fide margin
account and, if required under the terms of such agreement or account, the
Purchaser may transfer pledged or secured Securities to the pledgees or secured
parties. Such a pledge or transfer shall not be subject to approval or consent
of the Company and no legal opinion of legal counsel to the pledgee, secured
party or pledgor shall be required in connection with the pledge, but such legal
opinion may be required in connection with a subsequent transfer following
default by the Purchaser transferee of the pledge. No notice shall be required
of such pledge. At the appropriate Purchaser’s expense, the Company will execute
and deliver such reasonable documentation as a pledgee or secured party of
Securities may reasonably request in connection with a pledge or transfer of the
Securities including the preparation and filing of any required prospectus
supplement under Rule 424(b)(3) of the Securities Act or other applicable
provision of the Securities Act to appropriately amend the list of Selling
Stockholders thereunder. 

      
Certificates evidencing the Shares and Warrant Shares shall not contain any
legend (including the legend set forth in this Section): (i) following a sale of
such Securities pursuant to an effective registration statement (including the
Registration Statement), or (ii) following a sale of such Shares or Warrant
Shares pursuant to Rule 144, or (iii) while such Shares or Warrant Shares are
eligible for sale under Rule 144, or (iv) if such legend is not required under
applicable requirements of the Securities Act (including judicial
interpretations and pronouncements issued by the Staff of the SEC). Following
such time as restrictive legends are not required to be placed on certificates
representing Shares or Warrant Shares, the Company will, no later than three
Trading Days following the delivery by a Purchaser to the Company or the
Company's transfer agent of a certificate representing Shares or Warrant Shares
containing a restrictive legend, deliver or cause to be delivered to such
Purchaser a certificate representing such Shares or Warrant Shares that is free
from all restrictive and other legends. The Company shall cause its counsel to
issue a legal opinion to the Company’s transfer agent promptly after the
effective date of a registration statement covering the
Shares and Warrant Shares if required by the Company’s transfer agent to effect
the removal of the legend hereunder. The Company may not make any notation on
its records or give instructions to any transfer agent of the Company that
enlarge the restrictions on transfer set forth in this Section. Certificates for
Shares or Warrant Shares subject to legend removal hereunder shall be
transmitted by the transfer agent of the Company to the Purchasers by crediting
the account of the Purchaser’s prime broker with the Depository Trust Company
system. 

Page 11 

      
Each Purchaser, severally and not jointly with the other Purchasers, agrees that
the removal of the restrictive legend from certificates representing Securities
as set forth in this Section 3.2(b) is predicated upon the Company’s reliance
that the Purchaser will sell any Securities pursuant to either the registration
requirements of the Securities Act, including any applicable prospectus delivery
requirements, or an exemption therefrom. 

             
(c) Financial Sophistication; Due Diligence. The Purchaser has such knowledge and experience in financial
or business matters that it is capable of evaluating the merits and risks of the
investment in connection with the transactions contemplated in this Agreement.
Such Purchaser has, in connection with its decision to purchase the Securities,
relied only upon the representations and warranties contained herein and the
information contained in the Company SEC Documents. Further, the Purchaser has
had such opportunity to obtain additional information and to ask questions of,
and receive answers from, the Company, concerning the terms and conditions of
the investment and the business and affairs of the Company, as the Purchaser
considers necessary in order to form an investment decision. 

             
(d) Accredited Investor Status. The Purchaser is an “accredited investor” as such term is defined in Rule
501(a) of the rules and regulations promulgated under the Securities Act.

             
(e) Residency. The Purchaser is
organized under the laws of the state set forth beneath such Purchaser’s name on
the signature page attached hereto, and its principal place of operations is in
the state set forth beneath such Purchaser’s name on the signature page attached
hereto. 

             
(f) General Solicitation. The
Purchaser is not purchasing the Securities as a result of any advertisement,
article, notice or other communication regarding the Securities published in any
newspaper, magazine or similar media or broadcast over the television or radio
or presented at any seminar or any other general solicitation or general
advertisement. Prior to the time that the Purchaser was first contacted by the
Company or the Placement Agent such Purchaser had a pre-existing and substantial
relationship with the Company or the Placement Agent.

      
3.4 No Investment, Tax or Legal Advice.
Each Purchaser understands that nothing in the Company SEC Documents, this
Agreement, or any other materials presented to the Purchaser in connection with
the purchase and sale of the Securities constitutes legal, tax or investment
advice. Each Purchaser has consulted such legal, tax and investment advisors as
it, in its sole discretion, has deemed necessary or appropriate in connection
with its purchase of Securities.

      
3.5 Additional Acknowledgement. Each
Purchaser acknowledges that it has independently evaluated the merits of the
transactions contemplated by this Agreement, that it has independently
determined to enter into the transactions contemplated hereby, that it is not
relying on any advice from or evaluation by any other person. Each Purchaser
acknowledges that the Placement Agent has acted solely as placement agent for
the Company in connection with the Offering of the Securities by the Company,
that the information and data provided to the Purchaser in connection with the
transaction contemplated hereby has not been subjected to independent
verification by the Placement Agent, and that the Placement Agent has made no
representation or warrant whatsoever with respect to the accuracy or
completeness of such information, data or other related disclosure material.
Each Purchaser acknowledges that it has not taken any actions that would deem
the Purchasers to be members of a “group” for purposes of Section 13(d) of the
Exchange Act. 

Page 12 

      
3.6 Limited Ownership. The purchase of the
Securities issuable to each Purchaser at the Closing will not result in such
Purchaser (individually or together with any other person or entity with whom
such Purchaser has identified, or will have identified, itself as part of a
“group” in a public filing made with the SEC involving the Company’s securities)
acquiring, or obtaining the right to acquire, in excess of 14.999% of the
outstanding shares of Common Stock or voting power of the Company on a
post-transaction basis that assumes that the Closing shall have occurred. Such
Purchaser does not presently intend to, along or together with others, make a
public filing with the SEC to disclose that it has (or that it together with
such other persons or entities have) acquired, or obtained the right to acquire,
as a result of the Closing (when added to any other securities of the Company
that it or they then own or have the right to acquire), in excess of 14.999% of
the outstanding shares of Common Stock or the voting power of the Company on a
post-transaction basis that assumes that the Closing shall have
occurred.

4. Conditions to
Closing.

      
4.1 Conditions to Obligations of Purchasers at Closing. Each Purchaser’s obligation to purchase the Securities at the
Closing is subject to the fulfillment to that Purchaser’s reasonable
satisfaction, on or prior to the Closing, of all of the following conditions,
any of which may be waived by the Purchaser: 

             
(a) Representations and Warranties True; Performance of
Obligations. The representations and warranties
made by the Company in Section 2 shall be true and correct in all respects on
the Closing Date with the same force and effect as if they had been made on and
as of said date and the Company shall have performed and complied with all
obligations and conditions herein required to be performed or complied with by
it on or prior to the Closing and a certificate duly executed by an officer of
the Company, to the effect of the foregoing, shall be delivered to the
Purchasers. 

             
(b) Proceedings and Documents. All corporate
and other proceedings in connection with the transactions contemplated at the
Closing and all documents and instruments incident to such transactions shall be
reasonably satisfactory in substance and form to counsel to the Purchaser, and
counsel to the Purchaser shall have received all such counterpart originals or
certified or other copies of such documents as they may reasonably request. The
Company shall have delivered (or caused to have been delivered) to each
Purchaser, the certificates required by this Agreement. The Warrant Shares shall
have been duly authorized and reserved for issuance upon exercise of the
Warrant. 

             
(c) Qualifications, Legal Investment. All
authorizations, approvals, or permits, if any, of any governmental authority or
regulatory body of the United States or of any state that are required in
connection with the lawful sale and issuance of the Securities and Warrant
Shares shall have been duly obtained and shall be effective on and as of the
Closing. No stop order or other order enjoining the sale of the Securities or
Warrant Shares shall have been issued and no proceedings for such purpose shall
be pending or, to the knowledge of the Company, threatened by the SEC, or any
commissioner of corporations or similar officer of any state having jurisdiction
over this transaction. At the time of the Closing, the sale and issuance of the
Securities and Warrant Shares shall be legally permitted by all laws and
regulations to which Purchasers and the Company are subject. No litigation,
statute, rule, regulation, executive order, decree, ruling or injunction will
have been enacted, entered, promulgated or endorsed by or in any court or
governmental authority of competent jurisdiction or any self-regulatory
organization having authority over the matters contemplated hereby which
prohibits the consummation of any of the transactions contemplated by this
Agreement. 

             
(d) Execution of Agreements. The Company
shall have executed this Agreement and have delivered this Agreement to the
Purchasers.

             
(e) Secretary’s Certificate. The Company
shall have delivered to the Purchasers a certificate of the Secretary of the
Company certifying as to the truth and accuracy of the resolutions of the board of directors and any committee thereof relating to the
transaction contemplated hereby (a copy of which shall be included with such
certificate). 

Page 13 

             
(f) Trading and Listing. Trading and listing
of the Company’s common stock on the NASDAQ Capital Market shall not have been
suspended by the SEC or the NASDAQ Capital Market. 

             
(g) Market Listing. The
Company will comply with all of the requirements of the Financial Industry
Regulatory Authority, Inc. (“FINRA”) and the NASDAQ Capital Market with respect to the issuance of the
Securities and the Warrant Shares and will list the Shares and the Warrant
Shares on the NASDAQ Capital Market no later than the earlier of (a) the
effective date of the Registration Statement (as hereinafter defined) or (b) 120
days following the Closing Date. 

             
(h) Blue Sky. The Company shall have obtained
all necessary “blue sky” law permits and qualifications, or have the
availability of exemptions therefrom, required by any state for the offer and
sale of the Securities and issuance of the Warrant Shares upon exercise of the
Warrant. 

             
(i) Material Adverse Change. Since the date
of this Agreement, there shall not have occurred any event which results in a
Material Adverse Effect. 

             
(j) Opinion. The Company shall have delivered
to Purchasers the opinion of the Joseph M. Harary, special transaction counsel
to the Company, dated as of the Closing Date in substantially the form attached
hereto as Exhibit C. 

      
4.2 Conditions to Obligations of the Company. The Company’s obligation to issue and sell the Securities at the Closing
is subject to the fulfillment to the Company’s reasonable satisfaction, on or
prior to the Closing of the following conditions, any of which may be waived by
the Company: 

             
(a) Representations and Warranties True. The
representations and warranties made by the Purchasers in Section 3 shall be true
and correct on the Closing Date with the same force and effect as if they had
been made on and as of said date. 

             
(b) Performance of Obligations. The
Purchasers shall have performed and complied with all agreements and conditions
herein required to be performed or complied with by them on or before the
Closing. The Purchasers shall have delivered the Purchase Price, by wire
transfer, to the account designated by the Company for such purpose. 

             
(c) Qualifications, Legal Investment. All
authorizations, approvals, or permits, if any, of any governmental authority or
regulatory body of the United States or of any state that are required in
connection with the lawful sale and issuance of the Securities and Warrant
Shares shall have been duly obtained and shall be effective on and as of the
Closing. No stop order or other order enjoining the sale of the Securities or
Warrant Shares shall have been issued and no proceedings for such purpose shall
be pending or, to the knowledge of the Company, threatened by the SEC, or any
commissioner of corporations or similar officer of any state having jurisdiction
over this transaction. At the time of the Closing, the sale and issuance of the
Securities and the Warrant Shares shall be legally permitted by all laws and
regulations to which the Purchasers and the Company are subject. No litigation,
statute, rule, regulation, executive order, decree, ruling or injunction will
have been enacted, entered, promulgated or endorsed by or in any court or
governmental authority of competent jurisdiction or any self-regulatory
organization having authority over the matters contemplated hereby which
prohibits the consummation of any of the transactions contemplated by this
Agreement. 

             
(d) Execution of Agreements. The Purchasers
shall have executed this Agreement and delivered this Agreement to the
Company.

5. Additional
Covenants. 

      
5.1 Listing. So long as a Purchaser owns any
of the Securities or Warrant Shares, the Company will use its reasonable efforts
to maintain the automated quotation of its Common Stock, including the Shares and Warrant Shares, on the NASDAQ Capital Market or
an alternative listing on the New York Stock Exchange or the NYSE MKT (formerly
the American Stock Exchange) and will comply in all material respects with the
Company’s reporting, filing and other obligations under the bylaws or rules of
FINRA and such exchanges, if applicable.

Page 14 

      
5.2 Confidential Information. Each Purchaser
covenants that it will maintain in confidence the receipt and content of any
Suspension Notice (as defined herein) under Section 6.2 until such information
(a) becomes generally publicly available other than through a violation of this
provision by the Purchaser or its agents or (b) is required to be disclosed in
legal proceedings (such as by deposition, interrogatory, request for documents,
subpoena, civil investigation demand, filing with any governmental authority or
similar process); provided, however, that before making any disclosure in
reliance on this Section 5.2(b), the Purchaser will give the Company at least 15
days prior written notice (or such shorter period as required by law) specifying
the circumstances giving rise thereto and the Purchaser will furnish only that
portion of the non-public information which is legally required and will
exercise its best efforts to ensure that confidential treatment will be accorded
any non-public information so furnished; provided, further, that notwithstanding
each Purchaser’s agreement to keep such information confidential, each Purchaser
makes no such acknowledgement that any such information is material, non-public
information.

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

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

6. Registration
Rights. 

      
6.1 Registration Procedures and Expenses.

             
(a) Following the Closing, the Company shall prepare and file with the SEC a
registration statement on Form S-3 (or any successor to Form S-3) covering the
resale of the Registrable Securities (as defined below) (the “S-3 Registration Statement”) no later than 30 days after the Closing. For purposes of this
Agreement, the term “Registrable
Securities” shall mean (i) the Warrants; (ii)
the Shares and Warrant Shares; and (iii) any Common Stock of the Company issued
as (or issuable upon the conversion or exercise of any warrant, right or other
security which is issued as) a dividend or other distribution with respect to,
or in exchange for or in replacement of, any Shares or Warrant Shares. If the
S-3 Registration Statement has not been filed with the SEC on or before the date
that is 30 days after the Closing (the “Required Filing Date”), the Company
shall, on the business day immediately following the Required Filing Date and
each 30th day thereafter, make a payment to the Purchasers as partial
liquidated damages for such delay (together, the “Late Registration Payments”) equal to
1% of the Purchase Price paid for the Securities then owned by the Purchasers
until the earlier of (i) the date the S-3 Registration Statement is filed with
the SEC or (ii) the date on which all Common Shares may be sold pursuant to Rule
144. Late Registration Payments will be prorated on a daily basis during each 30
day period and will be paid to the Purchasers by wire transfer or check within
five business days after the earlier of (i) the end of each 30 day period
following the Required Filing Date, (ii) the date of filing of the S-3
Registration Statement or (iii) the date on which all Common Shares may be sold
pursuant to Rule 144. If the Company fails to pay any
liquidated damages pursuant to this section in full within seven days after the
date payable, the Company will pay interest thereon at a rate of 12% per annum
(or such lesser maximum amount that is permitted to be paid by applicable law)
to the Purchasers, accruing daily from the date such liquidated damages are due
until such amounts, plus all such interest thereon, are paid in full.
“Business day” means any day except Saturday, Sunday and any day that is a federal
legal holiday in the United States. In the event that Form S-3 (or any successor
form) is or becomes unavailable to register the resale of the Registrable
Securities at any time prior to the expiration of the Purchasers’ registration
rights pursuant to Section 6.4, the Company shall prepare and file with the SEC
a registration statement on Form S-1 (or any successor to Form S-1), covering
the resale of the Registrable Securities (the “S-1 Registration Statement” and
collectively the S-3 Registration Statement, the “Registration Statement”) and cause the
SEC to declare the S-1 Registration Statement effective as promptly as
reasonably practicable. 

Page 15 

             
(b) The
Company shall use its best efforts to: 

                    
(i) prepare and file with the SEC such amendments and supplements to the
Registration Statement and the prospectus that forms a part thereof (the
“Prospectus”) used in connection therewith as may be necessary or advisable to keep
the Registration Statement current and effective for the Shares and Warrant
Shares (collectively, “Common
Shares”) held by a Purchaser for a period
ending on the earlier of (i) the second anniversary of the Closing Date, (ii)
the date on which all Common Shares may be sold pursuant to Rule 144 under the
Securities Act or any successor rule (“Rule
144”) or (iii) such time as all Common Shares
have been sold pursuant to a registration statement or Rule 144. The Company
shall notify each Purchaser promptly upon the Registration Statement and each
post-effective amendment thereto, being declared effective by the SEC and advise
each Purchaser that the form of Prospectus contained in the Registration
Statement or post-effective amendment thereto, as the case may be, at the time
of effectiveness meets the requirements of Section 10(a) of the Securities Act
or that it intends to file a Prospectus pursuant to Rule 424(b) under the
Securities Act that meets the requirements of Section 10(a) of the Securities
Act; 

                     (ii) furnish
to the Purchaser with respect to the Common Shares registered under the
Registration Statement such number of copies of the Registration Statement and
the Prospectus (including supplemental prospectuses) filed with the SEC in
conformance with the requirements of the Securities Act and other such documents
as the Purchaser may reasonably request, in order to facilitate the public sale
or other disposition of all or any of the Common Shares by the Purchaser;

                     (iii) make
any necessary blue sky filings; 

                     (iv) pay the
expenses incurred by the Company and the Purchasers in complying with Section 6,
including, all registration and filing fees, FINRA fees, exchange listing fees,
printing expenses, fees and disbursements of counsel for the Company, blue sky
fees and expenses and the expense of any special audits incident to or required
by any such registration (but excluding attorneys’ fees of any Purchaser and any
and all underwriting discounts and selling commissions applicable to the sale of
Registrable Securities by the Purchasers); 

                     (v) advise
the Purchasers, promptly after it shall receive notice or obtain knowledge of
the issuance of any stop order by the SEC delaying or suspending the
effectiveness of the Registration Statement or of the initiation of any
proceeding for that purpose; and it will promptly use its commercially
reasonable best efforts to prevent the issuance of any stop order or to obtain
its withdrawal at the earliest possible moment if such stop order should be
issued; and 

                     (vi) with a
view to making available to the Purchaser the benefits of Rule 144 and any other
rule or regulation of the SEC that may at any time permit the Purchaser to sell
Common Shares to the public without registration, the Company covenants and
agrees to use its commercially reasonable best efforts
to: (i) make and keep public information available, as those terms are
understood and defined in Rule 144, until the earlier of (A) such date as all of
the Common Shares qualify to be resold immediately pursuant to Rule 144 or any
other rule of similar effect or (B) such date as all of the Common Shares shall
have been resold pursuant to Rule 144 (and may be further resold without
restriction); (ii) file with the SEC in a timely manner all reports and other
documents required of the Company under the Securities Act and under the
Exchange Act; and (iii) furnish to the Purchaser upon request, as long as the
Purchaser owns any Common Shares, (A) a written statement by the Company as to
whether it has complied with the reporting requirements of the Securities Act
and the Exchange Act, (B) a copy of the Company’s most recent Annual Report on
Form 10-K or Quarterly Report on Form 10-Q, and (C) such other information as
may be reasonably requested in order to avail the Purchaser of any rule or
regulation of the SEC that permits the selling of any such Common Shares without
registration. 

Page 16 

      
The Company understands that the Purchasers disclaim being an underwriter, but
acknowledges that a determination by the SEC that a Purchaser is deemed an
underwriter shall not relieve the Company of any obligations it has hereunder.

      
6.2 Transfer of Shares After Registration;
Suspension.

             
(a)
Except in the event that Section 6.2(b)
applies, the Company shall: (i) if deemed necessary or advisable by the Company,
prepare and file from time to time with the SEC a post-effective amendment to
the Registration Statement or a supplement to the related Prospectus or a
supplement or amendment to any document incorporated therein by reference or
file any other required document so that such Registration Statement will not
contain an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and so that, as thereafter delivered to purchasers of the Common
Shares being sold thereunder, such Prospectus will not contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; (ii) provide the
Purchasers copies of any documents filed pursuant to Section 6.2(a)(i); and
(iii) upon request, inform each Purchaser who so requests that the Company has
complied with its obligations in Section 6.2(b)(i) (or that, if the Company has
filed a post-effective amendment to the Registration Statement which has not yet
been declared effective, the Company will notify the Purchaser to that effect,
will use its commercially reasonable best efforts to secure the effectiveness of
such post-effective amendment as promptly as possible and will promptly notify
the Purchaser pursuant to Section 6.2(b)(i) when the amendment has become
effective). 

             
(b) Subject to Section 6.2(c), in the event: (i) of any request by the
SEC or any other federal or state governmental authority during the period of
effectiveness of the Registration Statement for amendments or supplements to the
Registration Statement or related Prospectus or for additional information; (ii)
of the issuance by the SEC or any other federal or state governmental authority
of any stop order suspending the effectiveness of the Registration Statement or
the initiation of any proceedings for that purpose; (iii) of the receipt by the
Company of any notification with respect to the suspension of the qualification
or exemption from qualification of any of the Common Shares for sale in any
jurisdiction or the initiation of any proceeding for such purpose; or (iv) of
any event or circumstance which necessitates the making of any changes in the
Registration Statement or Prospectus, or any document incorporated or deemed to
be incorporated therein by reference, so that, in the case of the Registration
Statement, it will not contain any untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make the
statements therein not misleading, and that in the case of the Prospectus, it
will not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; then the Company shall promptly deliver a certificate in writing to
the Purchasers (the “Suspension
Notice”) to the effect of the foregoing and, upon
receipt of such Suspension Notice, the Purchasers will refrain from selling any
Common Shares pursuant to the Registration Statement (a
“Suspension”) until the Purchasers are advised in writing by the Company that the
current Prospectus may be used, and have received copies from the Company of any
additional or supplemental filings that are incorporated or deemed incorporated
by reference in any such Prospectus. In the event of any Suspension, the Company
will use its reasonable best efforts to cause the use of the Prospectus so
suspended to be resumed as soon as reasonably practicable after delivery of a
Suspension Notice to the Purchasers. In addition to and without limiting any
other remedies (including, without limitation, at law or at equity) available to
the Company and the Purchaser, the Company and the Purchasers shall be entitled
to specific performance in the event that the other party fails to comply with
the provisions of this Section 6.2(b).

Page 17 

             
(c) Notwithstanding the foregoing paragraphs of this Section 6.2, the Company
shall use its commercially reasonable best efforts to ensure that (i) a
Suspension shall not exceed 30 days individually, (ii) Suspensions covering no
more than 45 days, in the aggregate, shall occur during any twelve month period
and (iii) each Suspension shall be separated by a period of at least 30 days
from a prior Suspension (each Suspension that satisfies the foregoing criteria
being referred to herein as a “Qualifying
Suspension”). In the event that there occurs
a Suspension (or part thereof) that does not constitute a Qualifying Suspension,
the Company shall pay to the Purchaser, on the 30th day following the
first day of such Suspension (or the first day of such part), and on each
30th day thereafter, an amount equal to 1% of the Purchase Price paid
for the Securities purchased by the Purchaser and not previously sold by the
Purchaser with such payments to be prorated on a daily basis during each 30 day
period and will be paid to the Purchaser by wire transfer or check within five
business days after the end of each 30 day period following. 

             
(d) If
a Suspension is not then in effect, the Purchasers may sell Common Shares under
the Registration Statement, provided that they comply with any applicable
prospectus delivery requirements. Upon receipt of a request therefor, the
Company will provide an adequate number of current Prospectuses to a Purchaser
and to any other parties reasonably requiring such Prospectuses. 

             
(e) The
Company agrees that it shall, immediately prior to the Registration Statement
being declared effective, deliver to its transfer agent an opinion letter of
counsel, opining that at any time the Registration Statement is effective, the
transfer agent may issue, in connection with the sale of the Common Shares,
certificates representing such Common Shares without restrictive legend,
provided the Common Shares are to be sold pursuant to the prospectus contained
in the Registration Statement. Upon receipt of such opinion, the Company shall
cause the transfer agent to confirm, for the benefit of the Purchasers, that no
further opinion of counsel is required at the time of transfer in order to issue
such Common Shares without restrictive legend. 

             
The Company shall cause its transfer agent to issue a certificate
without any restrictive legend to a purchaser of any Common Shares from the
Purchasers, if no Suspension is in effect at the time of sale, and (a) the sale
of such Common Shares is registered under the Registration Statement (including
registration pursuant to Rule 415 under the Securities Act); (b) the holder has
provided the Company with an opinion of counsel, in form, substance and scope
customary for opinions of counsel in comparable transactions, to the effect that
a public sale or transfer of such Common Shares may be made without registration
under the Securities Act; or (c) such Common Shares are sold in compliance with
Rule 144 under the Securities Act. In addition, the Company shall remove the
restrictive legend from any Common Shares held by the Purchasers following the
expiration of the holding period required by Rule 144 under the Securities Act
(or any successor rule).

      
6.3 Indemnification. For the purpose of
this Section 6.3: 

             
(a) the
term “Selling Stockholder” shall mean a Purchaser, its executive officers and directors
and each person, if any, who controls that Purchaser within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act;

Page 18 

             
(b) the
term “Registration Statement” shall include any final Prospectus, exhibit, supplement or
amendment included in or relating to, and any document incorporated by reference
in, the Registration Statement (or deemed to be a part thereof) referred to in
Section 6.1; and 

             
(c) The Company agrees to
indemnify and hold harmless each Selling Stockholder from and against any
losses, claims, damages or liabilities to which such Selling Stockholder may
become subject, under the Securities Act or otherwise (including in settlement
of any litigation if such settlement is effected with the written consent of the
Company), insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any inaccuracy in the
representations and warranties of the Company contained herein or any failure of
the Company to perform its obligations hereunder, under the Warrants or under
the law in connection with the transactions contemplated by this Agreement or
arise out of or are based upon an untrue statement or alleged untrue statement
of a material fact contained in the Registration Statement or the omission or
alleged omission to state therein a material fact required to be stated therein
to make the statements therein not misleading. The Company will reimburse each
Selling Stockholder for any legal or other expenses reasonably incurred by it in
connection with investigating or defending against such loss, claim, damage,
liability or action as such expenses are incurred; provided, however, that the
Company will not be liable in any such case to the extent that any such loss,
claim, damage, liability or action arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission made in
such Registration Statement in reliance upon and in conformity with written
information furnished to the Company by or on behalf of such Selling Stockholder
specifically for use in preparation of the Registration Statement or the failure
of such Selling Stockholder to comply with its covenants and agreements
contained herein or any statement or omission in any Prospectus that is
corrected in any subsequent Prospectus that was delivered to the Selling
Stockholder prior to the pertinent sale or sales by the Selling Stockholder.

             
(d) Each Purchaser severally (as to itself),
and not jointly, agrees to indemnify and hold harmless the Company, its
affiliates, director and officers and each person, if any, who controls the
Company within the meaning of Section 15 of the Act and Section 20 of the
Exchange Act, from and against any losses, claims, damages or liabilities to
which the Company may become subject under the Act or otherwise (including in
settlement of any litigation, if such settlement is effective with the written
consent of the Purchasers), insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon, an
untrue statement or alleged untrue statement of a material fact contained in the
Registration Statement or the omission or alleged omission to state therein a
material fact required to be stated therein to make the statements therein not
misleading, but only to the extent that such untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with written information furnished by or on behalf of that Purchaser
specifically for use in preparation of the Registration Statement, and that
Purchaser will reimburse the Company for any legal or other expenses reasonably
incurred by the Company in connection with investigating or defending against
such loss, claim, damage, liability or action as such expenses are incurred. The
obligation to indemnify shall be limited to the net amount of the proceeds
received by the Purchaser from the sale of the Common Shares pursuant to the
Registration Statement. 

Page 19 

             
(e) Promptly after receipt by an indemnified
party under subjection (c) or (d) above of notice of the commencement of any
action, such indemnified party shall, if a claim in respect thereof is to be
made against an indemnifying party under such subsection, notify the
indemnifying party in writing of the commencement thereof; but the omission so
to notify the indemnifying party shall not relieve the indemnifying party from
any liability that it may have to any indemnified party except to the extent
such indemnifying party has been materially prejudiced by such failure (through
the forfeiture of substantive rights or defenses). In case any such action shall
be brought against any indemnified party, the indemnifying party shall be
entitled to participate in, and, to the extent it shall wish, jointly with any
other indemnifying party similarly notified, assume the defense thereof, with
counsel satisfactory to such indemnified party, and, after notice from the
indemnifying party to such indemnified party of the indemnifying party’s
election so to assume the defense thereof, the indemnifying party shall not be
liable to such indemnified party under such subsection for any legal or other
expenses subsequently incurred by such indemnified party in connection with the
defense thereof other than reasonable costs of investigation; provided, however,
that if, in the sole judgment of the Purchasers, it is advisable for the
Purchasers to be represented by separate counsel, the Purchasers shall have the
right to employ a single counsel (in addition to local counsel) to represent the
Purchaser in respect of which indemnity may be sought by the Purchasers under
subsection (c) of this Section 6.3, in which event the reasonable fees and
expenses of such separate counsel shall be borne by the indemnifying party or
parties and reimbursed to the Purchasers as incurred. An indemnifying party
shall not be obligated under any settlement agreement relating to any action
under this Section 6.3 to which it has not agreed in writing. In addition, no
indemnifying party shall, without the prior written consent of the indemnified
party (which consent shall not be unreasonably withheld or delayed), effect any
settlement of any pending or threatened proceeding unless such settlement
includes an unconditional release of such indemnified party for all liability on
claims that are the subject matter of such proceeding and does not include a
statement as to, or an admission of, fault, culpability or a failure to act by
or on behalf of an indemnified party. Notwithstanding the foregoing, if at any
time an indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel pursuant to
this Section 6.3(e), such indemnifying party agrees that it shall be liable for
any settlement effected without its written consent if (i) such settlement is
entered into more than 45 days after receipt by such indemnifying party of the
aforesaid request and (ii) such indemnifying party shall not have reimbursed
such indemnified party in accordance with such request prior to the date of such
settlement. 

             
(f) If the indemnification provided for in
this Section 6.3 is unavailable or insufficient to hold harmless an indemnified
party under subsection (c) or (d) above, then each indemnifying party shall
contribute to the amount paid or payable by such indemnified party as a result
of the losses, claims, damages or liabilities (or actions in respect thereof) in
such proportion as is appropriate to reflect the relative fault of the Company
on the one hand and the liable Purchaser on the other in connection with the
statements or omissions or other matters which resulted in such losses, claims,
damages or liabilities (or actions in respect thereof), as well as any other
relevant equitable considerations. The relative fault shall be determined by
reference to, among other things, in the case of an untrue statement, whether
the untrue statement relates to information supplied by the Company on the one
hand or the liable Purchaser on the other and the parties’ relative intent,
knowledge, access to information and opportunity to correct or prevent such
untrue statement. The Company and the Purchasers agree that it would not be just
and equitable if contribution pursuant to this subsection (f) were to be
determined by pro rata allocation (even if the Purchasers were treated as one
entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to above in this
subsection (f). The amount paid or payable by an indemnified party as a result
of the losses, claims, damages or liabilities (or actions in respect thereof)
referred to above in this subsection (f) shall be deemed to include any legal or
other expenses reasonably incurred by such indemnified party in connection with
investigating or defending against any action or claim which is the subject of
this subsection (f). Notwithstanding the provisions of this subsection (f), no
Purchasers shall be required to contribute any amount in excess of the amount by
which the net amount received by that Purchaser from the sale of the Common
Shares to which such loss relates exceeds the amount of any damages which that
Purchaser has otherwise been required to pay to the Company by reason of such
untrue statement. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. The Purchasers’
obligations in this subsection to contribute are several in proportion to their
sales of Common Shares to which such loss relates and not joint. The remedies
provided for in this Section 6.3 are not exclusive and shall not limit any
rights or remedies that might otherwise be available to any indemnified party at
law or in equity. 

      
6.4 Termination of Conditions and Obligations. The conditions precedent imposed by Section 3 or this Section 6 upon the
transferability of the Common Shares shall cease and terminate as to any particular number of the Common Shares when such Common
Shares shall have been effectively registered under the Securities Act and sold
or otherwise disposed of in accordance with the intended method of disposition
set forth in the Registration Statement covering such Common Shares or at such
time as an opinion of counsel satisfactory to the Company shall have been
rendered to the effect that such conditions are not necessary in order to comply
with the Securities Act. The Company shall request an opinion of counsel
promptly upon receipt of a request therefor from Purchaser. 

Page 20 

      
6.5 Information Available. So long as the
Registration Statement is effective covering the resale of Common Shares owned
by a Purchaser, the Company will furnish (or, to the extent such information is
available electronically through the Company’s filings with the SEC, the Company
will make available via the SEC’s EDGAR system or any successor thereto) to each
Purchaser: 

             
(a) as
soon as practicable after it is available, one copy of (i) its Annual Report to
Stockholders (which Annual Report shall contain financial statements audited in
accordance with generally accepted accounting principles by a national firm of
certified public accountants) and (ii) if not included in substance in the
Annual Report to Stockholders, its Annual Report on Form 10-K (the foregoing, in
each case, excluding exhibits); 

             
(b) upon the request of the Purchaser, all exhibits excluded by the
parenthetical to subparagraph (a)(ii) of this Section 6.5 as filed with the SEC
and all other information that is made available to stockholders; and

             
(c) upon the reasonable request of the Purchaser, an adequate number of
copies of the Prospectuses to supply to any other party requiring such
Prospectuses; and the Company, upon the reasonable request of a Purchaser, will
meet with each Purchaser or a representative thereof at the Company’s
headquarters during the Company’s normal business hours to discuss all
information relevant for disclosure in the Registration Statement covering the
Common Shares and will otherwise reasonably cooperate with the Purchasers
conducting an investigation for the purpose of reducing or eliminating the
Purchasers’ exposure to liability under the Securities Act, including the
reasonable production of information at the Company’s headquarters; provided,
that the Company shall not be required to disclose any confidential information
to or meet at its headquarters with a Purchaser until and unless that Purchaser
shall have entered into a confidentiality agreement in form and substance
reasonably satisfactory to the Company with the Company with respect thereto.

      
6.6 Public Statements; Limitation on Information. The Company agrees to disclose on a Current Report on Form 8-K the
existence of the Offering and the material terms, thereof, including pricing,
within one business day after it specifies the Closing Date in accordance with
Section 1.3. Such Current Report on Form 8-K shall include a form of this
Agreement (and all exhibits and schedules thereto) as an exhibit thereto. The
Company will not issue any public statement, press release or any other public
disclosure listing a Purchaser as one of the purchasers of the Common Shares
without that Purchaser’s prior written consent, except as may be required by
applicable law or rules of any exchange on which the Company’s securities are
listed. The Company shall not provide, and shall cause each of its subsidiaries
and the respective officers, directors, employees and agents of the Company and
each of its subsidiaries not to provide, the Purchasers with any material
nonpublic information regarding the Company or any subsidiary from and after the
date the Company files, or is required by this Section to file, the Current
Report on Form 8-K with the SEC without the prior express written consent of the
Purchaser. 

      
6.7 Limits on Additional Issuances. The
Company will not, for a period of six months following the Closing Date offer
for sale or sell any securities unless, in the opinion of the Company’s counsel,
such offer or sale does not jeopardize the availability of exemptions from the
registration and qualification requirements under applicable securities laws
with respect to the Offering. Except for the Offerings, the issuance of stock
options under the Company’s stock option plans, the issuance of common stock upon exercise of outstanding options and warrants, the
issuance of common stock purchase warrants, and the offering contemplated
hereby, the Company has not engaged in any offering of equity securities during
the six months prior to the date of this Agreement. The foregoing provisions
shall not prevent the Company from filing a “shelf” registration statement
pursuant to Rule 415 under the Securities Act, but the foregoing provisions
shall apply to any sale of securities thereunder. 

Page 21 

      
6.8 Form D and State Securities Filings.
The Company will file with the SEC a Notice of Sale of Securities on Form D with
respect to the Securities, as required under Regulation D under the Securities
Act, no later than 15 days after the Closing Date. The Company will promptly and
timely file all documents and pay all filing fees required by any states’
securities laws in connection with the sale of Securities. 

      
6.9 Assignment of Registration Rights. The
rights to cause the Company to register Registrable Securities pursuant to this
Section 6 may be assigned by a Purchaser to a party that acquires, other than
pursuant to the Registration Statement or Rule 144, any of the Shares and
Warrant Shares originally issued or issuable to such Purchaser pursuant to this
Agreement and the Warrants (or any Common Stock issued as (or issuable upon the
conversion or exercise of any warrant, right or other security which is issued
as) a dividend or other distribution with respect to, or in exchange for or in
replacement of, any such Shares or Warrant Shares), or to any affiliate of a
Purchaser that acquires any Registrable Securities. Any such permitted assignee
shall have all the rights of such Purchaser under this Section 6 with respect to
the Registrable Securities transferred. 

      
6.10 Selling Stockholder Questionnaire. Each
Purchaser agrees to furnish to the Company a completed questionnaire in the form
attached to this Agreement as Exhibit
D (a “Selling Holder Questionnaire”). The
Company shall not be required to include the Registrable Securities of a
Purchaser in a Registration Statement and shall not be required to pay any
liquidated or other damages hereunder to any such Purchaser who fails to furnish
to the Company a fully completed Selling Holder Questionnaire at least three
business days prior to the filing of the Registration Statement. 

7. Miscellaneous. 

      
7.1 Governing Law. This Agreement shall be
governed by and construed in accordance with the laws of the State of New York,
without regard to the choice of law provisions thereof, and the federal laws of
the United States. 

      
7.2 Successors and Assigns. Except as
otherwise expressly provided herein, the provisions hereof shall inure to the
benefit of, and be binding upon, the successors, assigns, heirs, executors, and
administrators of the parties hereto. 

      
7.3 Entire Agreement. This Agreement and the
exhibits hereto, and the other documents delivered pursuant hereto, constitute
the full and entire understanding and agreement among the parties with regard to
the subjects hereof and no party shall be liable or bound to any other party in
any manner by any representations, warranties, covenants, or agreements except
as specifically set forth herein or therein. Nothing in this Agreement, express
or implied, is intended to confer upon any party, other than the parties hereto
and their respective successors and assigns, any rights, remedies, obligations,
or liabilities under or by reason of this Agreement, except as expressly
provided herein. 

      
7.4 Severability. In the event any provision
of this Agreement shall be invalid, illegal, or unenforceable, it shall to the
extent practicable, be modified so as to make it valid, legal and enforceable
and to retain as nearly as practicable the intent of the parties, and the
validity, legality, and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby. 

      
7.5 Amendment and Waiver. Except as otherwise
provided herein, any term of this Agreement may be amended and the observance of
any term of this Agreement may be waived (either generally or in a particular
instance, either retroactively or prospectively, and either for a specified
period of time or indefinitely), with the written
consent of the Company and each Purchaser. Any amendment or waiver effected in
accordance with this Section 7.5 shall be binding upon any holder of any
Securities purchased under this Agreement (including securities into which such
Securities have been converted), each future holder of all such securities, and
the Company. 

Page 22 

      
7.6 Fees and Expenses. Except as otherwise
set forth herein, the Company and the Purchasers shall bear their own expenses
and legal fees incurred on their behalf with respect to this Agreement and the
transactions contemplated hereby. Each party hereby agrees to indemnify and to
hold harmless of and from any liability the other party for any commission or
compensation in the nature of a finder’s fee to any broker or other person or
firm (and the costs and expenses of defending against such liability or asserted
liability) for which such indemnifying party or any of its employees or
representatives are responsible. 

      
7.7 Notices. All notices, requests,
consents and other communications hereunder shall be in writing, shall be
delivered (A) if within the United States, by first-class registered or
certified airmail, or nationally recognized overnight express courier, postage
prepaid, or by facsimile, or (B) if from outside the United States, by
International Federal Express (or comparable service) or facsimile, and shall be
deemed given (i) if delivered by first-class registered or certified mail
domestic, upon the business day received, (ii) if delivered by nationally
recognized overnight carrier, one business day after timely delivery to such
carrier, (iii) if delivered by International Federal Express (or comparable
service), two business days after so mailed, (iv) if delivered by facsimile,
upon electric confirmation of receipt and shall be addressed as follows, or to
such other address or addresses as may have been furnished in writing by a party
to another party pursuant to this paragraph: 

if to the Company, to: 

	
      Research Frontiers Incorporated
      
240 Crossways Park Drive 
Woodbury, New York 11797-2033
      
Attention: Chief Executive Officer 
Facsimile: (516) 364-3798
      

if to the Purchaser, at its address on
the signature page to this Agreement. 

       7.8 Survival of Representations,
Warranties and Agreements. Notwithstanding
any investigation made by any party to this Agreement or by the Placement Agent,
all covenants, agreements, representations and warranties made by the Company
and the Purchaser herein shall survive the execution of this Agreement, the
delivery to the Purchaser of the Securities being purchased and the payment
therefor, and a party’s reliance on such representations and warranties shall
not be affected by any investigation made by such party or any information
developed thereby. 

      
7.9 Counterparts. This Agreement may be
executed by facsimile signature and in any number of counterparts, each of which
shall be deemed an original, but all of which together shall constitute one
instrument. 

Page 23 

       7.10 Independent Nature of
Purchasers’ Obligations and Rights. The
obligations of each Purchaser under this Agreement are several and not joint
with the obligations of any other Purchaser, and no Purchaser shall be
responsible in any way for the performance of the obligations of any other
Purchaser under this Agreement. Nothing contained herein, and no action taken by
any Purchaser pursuant hereto, shall be deemed to constitute the Purchasers as a
partnership, an association, a joint venture or any other kind of entity, or
create a presumption that the Purchasers are in any way acting in concert or as
a group with respect to such obligations or the transactions contemplated by
this Agreement. Each Purchaser confirms that it has independently participated
in the negotiation of the transaction contemplated hereby with the advice of its
own counsel and advisors. Each Purchaser shall be entitled to independently
protect and enforce its rights, including, without limitation, the rights
arising out of this Agreement, and it shall not be
necessary for any other Purchaser to be joined as an additional party in any
proceeding for such purpose. 

[The Remainder of this Page is Blank] 

Page 24 

October 2, 2012 

       In
witness whereof, the foregoing Common Stock and Warrant Purchase Agreement is
hereby executed as of the date first above written. 

		Research Frontiers Incorporated
		 
	 	 
		By:	
		Name:   	Seth L. Van Voorhees
		Title:	Chief Financial Officer

 

 

 

 

 

 

 

 

Signature Page to Purchase Agreement

October 2, 2012 

       In witness whereof, the foregoing
Common Stock and Warrant Purchase Agreement is hereby executed as of the date
first above written. 

		 	  	
	 	Name of
      Investor		
		 
 	
		Investment Amount:	         
      $5,612,500

 

 

 

 

 

 

 

 

Signature Page to Purchase Agreement

October 2, 2012 

EXHIBIT A 

SCHEDULE OF
PURCHASERS 

		Common	Aggregate	Warrant	Purchase
    Price
	Purchaser	Shares	Purchase
    Price	Shares	Per
  Share
	 	1,250,000	$5,612,500	250,000	$4.49
	 				
	 				
	 				

Page A-1 

EXHIBIT B 

THE SECURITIES REPRESENTED BY THIS
CERTIFICATE HAVE NOT BEEN REGISTERED PURSUANT TO THE SECURITIES ACT OF 1933, AS
AMENDED, AND MAY NOT BE SOLD, TRANSFERRED, HYPOTHECATED OR OTHERWISE DISPOSED OF
UNLESS THERE IS A REGISTRATION STATEMENT THEN IN EFFECT COVERING SUCH SECURITIES
OR AN EFFECTIVE EXEMPTION FROM SUCH REGISTRATION OR AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY THAT UNDER THE CIRCUMSTANCES REGISTRATION IS NOT
NECESSARY. 

RESEARCH FRONTIERS INCORPORATED

COMMON STOCK PURCHASE WARRANT 

THIS CERTIFIES that, for value
received, [Name of Investor], hereinafter called “Warrantholder”, is entitled to
purchase from Research Frontiers Incorporated, a Delaware corporation
(hereinafter called the “Company”), [Number of Shares] shares of common stock,
par value $.0001 per share (hereinafter called the “Shares”) of the Company at a
warrant exercise price of $6.73 per share (such price per share and the number
of shares of common stock so purchasable being subject to adjustment as provided
below) at any time on or before 4:30 p.m. New York time on [insert date that is 5 years and 6 months after closing date] (the
“Expiration Date”), all in accordance with the terms hereof. 

       1.
Exercise of Warrants and Holding of Underlying
Stock. 

      
1.1 The Warrants evidenced by this Warrant Certificate may be exercised at any
time after [insert date that is 6 months after closing date] and prior to 4:30 p.m. New York time on the Expiration
Date in whole at any time or in part from time to time during such period by the
surrender of this Warrant Certificate, along with a Notice of Exercise in the
form attached hereto duly executed and completed by Warrantholder, at the office
of the Company, 240 Crossways Park Drive, Woodbury, New York 11797-2033 together
with payment in full in lawful money of the United States, of the Warrant
exercise price payable at the time of such exercise in respect of the Warrants
being exercised. Such payment shall be made by wire transfer of immediately
available funds to the account of Research Frontiers Incorporated at JPMorgan
Chase Bank, 6040 Tarbell Road, Syracuse, New York 13206, Account Number:
[Account Number], ABA Wire Code No.: 021 000 021, SWIFT CODE: CHASUS33, or to
such other account or place, as the Company may specify. If less than all of the
Warrants represented by this Warrant Certificate are being exercised, the
Company will, upon such exercise, deliver to Warrantholder a new certificate
(dated the date hereof) evidencing the Warrants not so exercised. 

      
1.2 Certificates representing Shares issued hereunder shall be stamped or
otherwise imprinted with a legend substantially in the following form (in
addition to any legend required under any applicable state securities laws):

       THE SHARES REPRESENTED BY THIS CERTIFICATE
HAVE NOT BEEN REGISTERED PURSUANT TO THE
SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, TRANSFERRED,
HYPOTHECATED OR OTHERWISE DISPOSED OF UNLESS THERE IS A REGISTRATION STATEMENT
THEN IN EFFECT COVERING SUCH SHARES OR AN EFFECTIVE EXEMPTION FROM SUCH
REGISTRATION OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT UNDER THE
CIRCUMSTANCES REGISTRATION IS NOT NECESSARY.

Provided, however, that if the issuance
of the Shares pursuant to the exercise of this Warrant are subject to an
effective registration statement pursuant to Section 5 of the Securities Act of
1933, as amended, certificates representing the Shares shall not bear any
restrictive legend. 

      
1.3 Limitations on Exercise. Notwithstanding anything to the contrary contained herein,
the number of Shares that may be acquired by the Warrantholder upon any exercise
of this Warrant (or otherwise in respect hereof) shall be limited to the extent
necessary to insure that, following such exercise (or other issuance), the total
number of shares of common stock of the Company then beneficially owned by such
Warrantholder and its affiliates and any other person or entity whose beneficial
ownership of such common stock would be aggregated with the Warrantholder’s for
purposes of Section 13(d) of the Securities Exchange Act of 1934 (the “Exchange
Act”), does not exceed 14.999% of the total number of issued and outstanding
shares of common stock of the Company (including for such purpose the shares of
common stock issuable upon such exercise). For such purposes, beneficial
ownership shall be determined in accordance with Section 13(d) of the Exchange
Act and the rules and regulations promulgated thereunder. This provision shall
not restrict the number of shares of Common Stock which a Warrantholder may receive or beneficially own in order to determine the
amount of securities or other consideration that such Warrantholder may receive
in the event of a transaction contemplated by Section 2.1 of this Warrant. This
restriction may not be waived. 

Page B-1 

EXHIBIT B 

       2.
Reclassification, Consolidation or
Merger. 

      
2.1 In the event that the outstanding Shares are hereafter changed by reason of
reorganization, merger, consolidation, recapitalization, reclassification, stock
split-up, combination or exchange of Shares and the like, or dividends payable
in Shares, an appropriate adjustment shall be made by the Board of Directors of
the Company in the number of Shares and price per Share subject to this Warrant
Certificate. If the Company shall be reorganized, consolidated, or merged with
another corporation, or if all or substantially all of the assets of the Company
shall be sold or exchanged, the Warrantholder shall at the time of issuance of
the stock under such a corporate event, be entitled to receive upon the exercise
of the vested Warrants evidenced by this Warrant Certificate the same number and
kind of shares of stock or the same amount of property, cash or securities as he
would have been entitled to receive upon the occurrence of any such corporate
event as if he had been, immediately prior to such event, the holder of the
number of Shares so exercised. 

      
2.2 Any adjustment under this Paragraph 2 in the number of Shares subject to
this Warrant Certificate shall apply proportionately to only the unexercised
portion hereunder and shall not have any retroactive effect with respect to
Warrants theretofore exercised. If fractions of a Share would result from any
such adjustment, the adjustment shall be revised to the next lower whole number
of Shares. 

      
2.3 No adjustment of the exercise price shall be made if the amount of such
adjustment shall be less than $.01 per Share, but in such case any adjustment
that would otherwise be required then to be made, shall be carried forward and
shall be made at the time and together with the next subsequent adjustment
which, together with any adjustment so carried forward, shall amount to no less
than $.01 per share. 

      
2.4 No fractional shares of common stock shall be issued upon the exercise of
any Warrants evidenced hereby, but in lieu thereof the number of shares of
common stock that are issuable upon any exercise shall be rounded up or down to
the nearest whole share. 

      
2.5 When any adjustment is required to be made in the exercise price or number
of Shares subject to this Warrant Certificate, initial or adjusted, the Company
shall within sixty (60) days after the date when the circumstances giving rise
to the adjustment occurred mail to the Warrantholder a statement describing in
reasonable detail any method used in calculating such adjustment. 

       3.
Prior Notice as to Certain
Events. 

      
The Company shall mail to Warrantholder not less than ten (10) days prior to the
date on which (a) a record will be taken for the purpose of determining the
holders of Capital Stock entitled to subscription rights, or (b) a record will
be taken (or in lieu thereof, the transfer books will be closed) for the purpose
of determining the holders of Capital Stock entitled to notice of and to vote at
the meeting of stockholders at which any consolidation, merger, dissolution,
liquidation, winding up or sale of the Company shall be considered and acted
upon. 

       4.
Reservation and Issuance of
Shares. 

      
4.1 The Company covenants and agrees that all Shares which may be issued upon
the exercise of the rights represented by this Warrant Certificate will be duly
authorized, legally issued and when paid for in accordance with the terms
hereof, fully paid and non-assessable, and free from all liens and charges with
respect to the issue thereof to the Warrantholder. 

      
4.2 The Company will reserve at all times such number of Shares as may be
issuable pursuant to the exercise of Warrants evidenced by this Warrant
Certificate. 

Page B-2 

EXHIBIT B 

       5.
Investment Representation. 

       By
accepting delivery of this Warrant Certificate and by exercising any Warrants
evidenced hereby, the Warrantholder represents that the Warrantholder is
acquiring the Warrants and the Shares issuable upon the exercise of the Warrants
for investment and not for resale or distribution. 

       6.
Miscellaneous. 

      
6.1 The Warrantholder shall not be entitled to any rights whatsoever as a
stockholder of the Company by virtue of its ownership of this Warrant
Certificate. 

      
6.2 This Warrant Certificate is being executed and delivered in the State of New
York, and this Warrant Certificate shall be interpreted under, and the
Warrantholder and the Company subject to, the laws and jurisdiction of the state
and federal courts of the State of New York, United States of America. The
parties hereby consent to such jurisdiction. 

      
6.3 Subject to the provisions of Section 1.3 hereof, this Warrant Certificate
may be exercised at any time after [insert date that is 6  months after closing] and prior to 4:30 p.m. New York
time on the Expiration Date. 

      
6.4 By accepting delivery of this Warrant Certificate, the Warrantholder
acknowledges that the Warrants granted hereunder shall be in full satisfaction
of all obligations to issue Warrants to the Warrantholder pursuant to the Common
Stock and Warrant Purchase Agreement dated October 2, 2012 between the Company
and the purchasers party thereto. 

       IN
WITNESS WHEREOF, the Company and the Warrantholder have executed this Warrant
Certificate this [    ] day of October, 2012 by each of their duly authorized
officers. 

RESEARCH FRONTIERS INCORPORATED

	By:   	 	 
		Seth L. Van Voorhees,
      Chief Financial Officer

WARRANTHOLDER: 

[Name of Investor] 

	By:   	 	 

Page B-3 

October 2, 2012 

[Form of Notice of Exercise] 

      
The undersigned hereby irrevocably elects to exercise the warrants we currently
hold to purchase ____________ shares of common stock, $0.0001 par value per
share, of Research Frontiers Incorporated (the “Company”) at an exercise price
of $6.73 per share. Attached to this notice is the original Warrant certificate
evidencing the aforementioned warrants. We have delivered to the Company
US$_______________ representing the aggregate exercise price for the warrants
exercised hereunder. A certificate representing the shares issuable upon
exercise should be issued in the undersigned’s name. 

      
The undersigned hereby represents and warrants to the Company that the
representations and warranties and acknowledgments made by the undersigned in
the Common Stock and Warrant Purchase Agreement dated October 2, 2012 between
the Company and the purchasers party thereto are still true and correct as if
made on the date of this Notice of Exercise, and that the undersigned has
carefully read any reports or statements filed with the Securities and Exchange
Commission regarding the Company after October 2, 2012, and that the Company has
also made available to the undersigned all other documents and information that
the undersigned has requested relating to an investment in the Company.

Dated: _______ ___, ______

[Name of Investor] 

	By:   	 	 
	 	       Name:
		      
  Title:

Page B-4 

EXHIBIT C 

FORM OF OPINION OF COMPANY COUNSEL

[Capitalized terms shall have the
meanings ascribed thereto in the Common Stock and Warrant Purchase Agreement]

       1.
The Company is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware. Each subsidiary of the Company
is duly organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation or formation. 

       2.
The Company and each subsidiary has all necessary corporate power and authority
to (i) execute and deliver, and to perform its obligations under the Agreement
and (ii) conduct its business as it is currently conducted and described in the
Company SEC Documents, and own, lease and license it properties and assets.

       3.
The Company is duly qualified to do business and is in good standing as a
foreign corporation in each jurisdiction in which the nature of the business
conducted or property owned by it makes such qualification necessary except
where the failure to be so qualified and in good standing would not result in a
Material Adverse Effect. 

       4.
The execution, delivery and performance by the Company of the Agreement and the
consummation of the transactions contemplated thereby including the issuance of
the Securities and the Warrant Shares, have been duly authorized by all
necessary corporate action of the Company. 

       5.
The Agreement has been duly executed and delivered by the Company and
constitutes the legal, valid and binding obligations of the Company, enforceable
against the Company in accordance with its terms. 

       6.
Except for filings, authorizations or approvals contemplated by the Agreement,
no authorizations or approvals of, and no filings with, any governmental or
administrative agency, regulatory authority, stock market or trading facility
are necessary or required by the Company for the execution and delivery of the
Agreement or the consummation of the transactions contemplated thereby.

       7.
Neither the execution and delivery of the Agreement by the Company, nor the
consummation or performance by the Company of any of the transactions
contemplated by the Agreement (including the issuance of the Securities and the
Warrant Shares) (i) contravene, conflict with or result in a violation of any
provisions of the Company’s certificate of incorporation or bylaws; (ii)
constitute a violation of any U.S. federal or state law, rule or regulation
applicable to the Company; (iii) violate any judgment, decree, order or award of
any court, governmental body or arbitrator specifically naming the Company; or
(iv) with or without notice and/or the passage of time, conflict with or result
in the breach or termination of any term or provision of, or constitute a
default under, or cause any acceleration under, or cause the creation of any
lien, charge or encumbrance upon the properties or assets of the Company
pursuant to, any agreement to which the Company is a party (including those
described or included in the Company SEC Documents). 

       8.
The capital stock of the Company conforms as to legal matters to the description
thereof contained in the Company’s Forms 8-A filed with the Commission on July
31, 1995 and February 24, 2003. The currently outstanding shares of capital
stock of the Company have been duly authorized and validly issued and are fully
paid and nonassessable. The form of certificates for the Shares and the Warrant
Shares conforms to the requirements of the Delaware General Corporation
Law.

       9.
Except as provided or disclosed in the Agreement on in the Company SEC
Documents, no person or entity is entitled to any preemptive, right of first
refusal, contractual or similar rights with respect to the issuance of the
Securities or the Warrant Shares.

- 1
- 

      
10. The Shares and the Warrant Shares have been duly authorized or reserved for
issuance by all necessary corporate action on the part of the Company; and the
Shares, when issued, sold and delivered against payment therefor in accordance
with the provisions of the Agreement and the Warrant Shares issuable upon
exercise of the Warrants, when issued upon exercise of the Warrants in
accordance with the terms of the Warrants, will be duly and validly issued,
fully paid and non-assessable. 

      
11. Assuming the accuracy of the representations and warranties of each of the
Purchasers set forth in Section 3 of the Agreement, the offer, issuance and sale
of the Shares at the Closing pursuant to the Agreement are, and the issuance of
the Warrant Shares issuable upon exercise of the Warrants will be, exempt from
the registration requirements of the Securities Act and the securities or “blue
sky” laws of any state. 

      
12. There are no actions, suits, arbitrations, claims, proceedings or
investigations pending or threatened against the Company or any of its
subsidiaries or any of their respective operations, businesses, properties or
assets by or before any court, arbitrator or government or regulatory
commission, board, body, authority or agency that challenges the validity of any
actions take or to be taken by the Company pursuant to the Purchase Agreement or
the transaction contemplated thereby. 

      
13. Except as set forth in the Purchase Agreement, no holders of the Company’s
securities have rights to the registration of shares of Common Stock or other
securities of the Company because of the filing of the Registration Statement or
the Offering, except as set forth in the Company SEC Documents. 

Page C-2 

EXHIBIT D 

SELLING STOCKHOLDER QUESTIONNAIRE

RESEARCH FRONTIERS INCORPORATED

Questionnaire for Selling
Stockholder 

      
This questionnaire is necessary to obtain information to be used by Research
Frontiers Incorporated (the “Company”) to complete a Registration
Statement (the “Registration
Statement”) covering the resale of certain
shares of Company Common Stock currently outstanding and/or of certain shares of
Company Common Stock to be issued upon exercise of currently outstanding
warrants to purchase Company Common Stock. Please complete and return this
questionnaire to Research Frontiers Incorporated, Attention: General Counsel
either by mail to 240 Crossways Park Drive, Woodbury, New York 11797-2033 or by
fax to (516) 364-3798. Please return the questionnaire by [Day], [Month Day], 2012 or sooner, if
possible.

      
FAILURE TO RETURN THE QUESTIONNAIRE MAY RESULT IN THE EXCLUSION OF YOUR NAME AND
SHARES FROM THE REGISTRATION STATEMENT. 

      
Please answer all questions. If the answer to
any question is “None” or “Not Applicable,” please so state. 

             
If there is any question about which you have any doubt, please set forth the
relevant facts in your answer. 

	1.	       	Please correct your
      name and/or address if not correct below
			 
			Name:   	 	 

	       	Address:      
      	 	 
			 	 
			 	

- 1
- 

	2.	       	Please state the
      total number of currently outstanding shares of Company Common Stock that you
      beneficially own* and the form of ownership and the date that you acquired
      such stock. Include shares registered in your name individually or jointly
      with others and shares held in the name of a bank, broker, nominee,
      depository or in “street name” for your account. (DO NOT list options and
      warrants. See Question #3).
	
 
 
 
 

	3.		Please list any
      outstanding options and warrants to purchase Company Common Stock that you
      beneficially own*, including (i) the number of shares of Company Common
      Stock to be issued upon the exercise of such option or warrant, (ii) the
      date such option or warrant is exercisable, (iii) the expiration date and
      (iv) the exercise price per share of EACH such option and
    warrant.
	 

	Number of
      Shares			
	Covered by Option
      or			
	Warrant	Date
      Exercisable	Exercise
    Price	Expiration
      Date
	 			
	 			
	 			
	 			
	 			
	 			

	4.	      
    	Please list the number of shares of Common Stock listed
      under Question #2 above that you wish to include in the Registration
      Statement.
	 

	____________________	
	* See Appendix A for
      definitions	Page
D-2

	5.	       	Please list the number
      of shares of Common Stock underlying warrants listed under Question #3
      above that, upon exercise of such warrants, you wish to include in the
      Registration Statement.
	
      
 
 
 
 

	6.		If you are a limited
      liability company or limited partnership, please name the managing member
      or general partner and each person controlling such managing member or
      general partner.
	
      
 
 
 
 

	7.		If you are an entity,
      please identify the natural person(s) who exercise sole or shared voting
      power* and/or sole or shared investment power* with regard to the shares
      listed under Question #2 and Question #3.
	
      
 
 
 
 

	8.		Please advise whether
      you are a registered broker-dealer or an affiliate* thereof. If you are an
      affiliate of a registered broker-dealer, please explain the nature of the
      affiliation and disclose whether you acquired the shares in the ordinary
      course of business and whether at the time of the acquisition you had any
      plans or proposals, directly or with any other person, to distribute the
      shares listed under Question #2 and Question #3.
	
      
 
 
 
 

	9.		List below the nature
      of any position, office or other material relationship that you have, or
      have had within the past three years, with the Company or any of its
      predecessors or affiliates*.
	 

	____________________	
	* See Appendix A for
      definitions	Page
D-3

	10.	       	If you expressly wish
      to disclaim any beneficial ownership* of any shares listed under Question
      #2 for any reason in the Registration Statement, indicate below the shares
      and circumstances for disclaiming such beneficial ownership*.
	
      
 
 
 
 

	11.		With respect to the
      shares that you wish to include in the Registration Statement, please list
      any party that has or may have secured a lien, security interest or any
      other claim relating to such shares, and please give a full description of
      such claims.
	
      
 
 
 
 

	12.		Please review Appendix
      B “Plan of Distribution.” Please identify and describe any method of
      distribution, other than described in Appendix B, that you plan on using
      to sell your shares of the Company’s Common Stock. By signing below you
      agree to distribute your shares of the Company’s Common Stock as described
      in Appendix B and this Item 12 and to notify the Company of any plan to
      distribute the Company’s Common Stock that is not described in Appendix B
      or herein under Item 12.

 

 

      
The undersigned, a Selling Stockholder of the Company, hereby furnishes the
foregoing information for use by the Company in connection with the preparation
of the Registration Statement. The undersigned will notify the Company, at the
address specified above, in writing immediately of any changes in the foregoing
answers that should be made as a result of any developments occurring prior to
the time that all the shares of Common Stock of the Company are sold pursuant to
the Registration Statement referred to above. Otherwise, the Company is to
understand that the above information continues to be, to the best of the
undersigned’s knowledge, information and belief, complete and correct.

Dated: ___________ __, 20___

		 
 
 
		By:	 
		Name:   	 
		Its:	 

	____________________	
	* See Appendix A for
      definitions	Page
D-4

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