Stock Purchase Agreement (Model Form)

1 Stock Purchase Agreement ( model Form) Stock Purchase AGREEMENTD ated as of [DATE] by and amongNEWCO, Inc.(the "Company"), andEach Investor (the "Investors") Listed in Exhibit of ContentsARTICLE I: DEFINED TERMSARTICLE II: Purchase AND SALE TERMSS ection Purchase and SaleSection PaymentSection Transfer Legends and RestrictionsARTICLE III: REPRESENTATIONS AND WARRANTIES OF THE COMPANYS ection corporate ExistenceSection Power and AuthoritySection Financial ConditionSection Absence of Undisclosed LiabilitiesSection TaxesSection SubsidiariesSection No Material Adverse ChangeSection Absence of Certain ChangesSection LitigationSection Conflict of InterestsSection Other RelationshipsSection Licenses.

2 Compliance with Laws, Other Agreements, Intellectual Property Rights and Government ApprovalsSection Government ApprovalsSection Investment Company ActSection Ownership and Status of StockSection Brokers, Private SaleSection Offering MemorandumSection Projections; Material FactsSection InvestigationSection (a). Minute BooksSection Section 83(b) ElectionsSection Employment Contracts, etc.; Certain Material TransactionsSection Contracts and Commitments, Employee Benefit PlansSection Employee Benefit Plans and Employment AgreementsSection Pension and Profit-Sharing PlansSection Title IV PlansSection Multiemployer PlansSection Continuation Coverage Requirements of Health PlansSection Fines and PenaltiesSection Banks, Agents, Small Business ConcernSection Environmental LiabilitiesARTICLE IV.

3 COVENANTS OF THE COMPANYS ection Accounts and ReportsSection Use of ProceedsSection ExhibitsSection Financial CovenantsSection Compensation of Executive OfficersSection Rule 144 Section Future Noncompetition and Proprietary Rights AgreementsSection Stock Restriction Agreements For Future EmployeesSection Observer RightsSection Key-Man InsuranceSection Liability InsuranceSection Taxes and AssessmentsSection Maintenance of corporate ExistenceSection Governmental ConsentsSection Further AssurancesSection Counsel Fees and ExpensesSection Compliance with Offering MemorandumSection Regulation D FilingsSection Preemptive RightsSection Limitation of Option GrantsSection AuditorSection Negative CovenantsSection WaiverSection Termination of CovenantsARTICLE V: REPRESENTATIONS AND WARRANTIES OF THE INVESTORSS ection Power and AuthoritySection Purchase for InvestmentSection Financial MattersSection Brokers, Subscription AgreementsARTICLE VI.

4 THE CLOSING AND CLOSING CONDITIONSS ection The ClosingSection Issuance of Convertible Preferred StockSection Legal Opinion from Counsel for the CompanySection Opinion of Patent CounselSection Certificate of Officer of the CompanySection Execution of Related DocumentsSection Insurance on Certain Key EmployeesSection Stockholders AgreementSection Employee DocumentsSection Investor ReviewSection Restated Articles of IncorporationSection Comfort LetterSection Representations and Warranties to be True and CorrectSection PerformanceSection All Proceedings to be SatisfactorySection Investment by Other InvestorsSection Supporting DocumentsSection Reasonable Satisfaction of Investors and CounselSection Exon-FlorioSection Expiration of HSR Waiting PeriodARTICLE VII.

5 MISCELLANEOUSS ection ExpensesSection General IndemnitySection Remedies CumulativeSection Certain Fees and ExpensesSection BrokerageSection SeverabilitySection Parties in InterestSection NoticesSection No WaiverSection Amendments and WaiversSection Rights of InvestorsSection Survival of Agreements, ConstructionSection Entire UnderstandingSection CounterpartsSection RemediesSection Assignment; No Third-Party BeneficiariesARTICLE VIII: TERMINATIONS ection TerminationSection Effect of TerminationARTICLE IX: ARBITRATIONEXHIBITSE xhibit Certificate of IncorporationExhibit Intellectual Property RightsExhibit Ownership of StockExhibit Key Man Insurance PoliciesExhibit List of InvestorsExhibit Opinion of Company CounselExhibit Registration Rights AgreementExhibit Stockholders AgreementExhibit Notice ProvisionsAGREEMENT dated [DATE], between Newco, Inc.

6 , a Delaware corporation, and each of the Investorslisted in Exhibit Company wishes to obtain equity financing. The Investors are willing, on the terms contained in thisAgreement, to Purchase Series A Convertible Preferred Stock of the Company having the characteristics setforth in the Certificate of Designation, as amended, attached as Exhibit Capitalized terms are defined inthe first Article. Exhibits are incorporated by reference into this Agreement as though such exhibits were setforth at the point of such reference. The neuter gender shall include the masculine and feminine genders IDEFINED TERMSThe following terms, when used in this Agreement , have the following meanings, unless the contextotherwise indicates:"Acceptable Currency": cash and any other method of payment which will result in such payment beingcredited to the account of the Company at the bank previously designated to the Investor in time to earninterest for the day of the Closing [the day immediately following the day of the Closing].

7 "'33 Act": the Securities Act of 1933 [as amended, or any similar federal law then in force]."'34 Act": the Securities Exchange Act of 1934."Affiliate": means, with respect to any specified Person, (1) any other Person who, directly or indirectly,owns or controls, is under common ownership or control with, or is owned or controlled by, such specifiedPerson; (2) any other Person who is a director, officer or partner or is, directly or indirectly, the beneficialowner of 10 percent or more of any class of equity securities, of the specified Person or a Person describedin clause (1) of this paragraph, (3) another Person of whom the specified Person is a director, officer orpartner or is, directly or indirectly, the beneficial owner of 10 percent or more of any class of equitysecurities, (4)

8 Another Person in whom the specified Person has a substantial beneficial interest or as towhom the specified Person serves as trustee or in a similar capacity; or (5) any relative or spouse of thespecified Person or any of the foregoing Persons, any relative of such spouse or any spouse of any suchrelative; provided, however, that at any time after the Closing Date, the Company and the Subsidiaries onthe one hand and the Investor and its Affiliates (other than the Company and the Subsidiaries) shall not bedeemed to be Affiliates of each other."Best Knowledge": includes (a) actual knowledge of the Person, including, the actual knowledge of any ofthe officers or directors of the Company and the administrators of any of the facilities operated by theCompany or any of its subsidiaries and (b) that knowledge which a prudent businessperson could haveobtained in the management of his business after making due inquiry, and after exercising due diligence,with respect thereto.

9 "Bylaws": the bylaws of Newco, Inc., as amended."Certificate of Incorporation": the certificate of incorporation of Newco, Inc., as originally filed with theDelaware Secretary of State together with all amendments thereto."Certificate of Designation": the certificate of designation adopted by the Newco board of directorsestablishing the rights, limitations, etc., of the Convertible Preferred Stock ."Closing" and "Closing Date": the consummation of the Company's sale and the Investors' Purchase of theConvertible Preferred Stock , and the date on which the same occurs or occurred."Commission": the United States Securities and Exchange Commission.

10 "Common Stock ": the $.01 par value common Stock of Newco, Inc."Convertible Preferred Stock ": the $.01 par value cumulative convertible preferred Stock , Series A ofNewco, Inc. having the characteristics set forth in the Certificate of Designation."Employee Benefit Plan": any plan regulated under the Employees Retirement and Income Supplement Act("ERISA")."Financial Statements": includes all of the following:(a) the audited financial statements of the Company as of [DATE] (including all schedules andnotes thereto), consisting of the balance sheet at such date and the related statements of incomeand expenses, retained earnings, changes in financial position and cash flows for the twelve-month period then ended.