PURCHASE AGREEMENT

Exhibit 10.1

THIS PURCHASE AGREEMENT (this “Agreement”) is made as of July 1, 2002, by and among VeriFone Holdings, Inc., a Delaware corporation (the “Company”), GTCR Fund VII, L.P., a Delaware limited partnership (“GTCR Fund VII”), GTCR Co-Invest, L.P., a Delaware limited partnership (“GTCR Co-Invest,” and together with GTCR Fund VII, the “GTCR Purchasers”) and the TCW/Crescent Purchasers (as defined herein). The GTCR Purchasers and the TCW/Crescent Purchasers are collectively referred to herein as the “Purchasers” and individually as a “Purchaser”. Except as otherwise indicated herein, capitalized terms used herein are defined in Section 6 hereof.

The parties hereto agree as follows:

Section 1. Authorization and Closing.

1A. Authorization of the Stock. The Company shall authorize the issuance and sale to the Purchasers of up to 60,397.74064 shares of its Class A Preferred Stock, par value $0.01 per share (the “Class A Preferred”), and up to 24,652,139.04 shares of its Common Stock, par value $0.01 per share (the “Common Stock”), each having the rights and preferences set forth in Exhibit A attached hereto. The Class A Preferred and the Common Stock are collectively referred to herein as the “Stock.”

1B. Purchase and Sale of the Stock by the Purchasers.

(a) At the Closing (as defined below), the Company shall sell to the Purchasers and, subject to the terms and conditions set forth herein, the Purchasers shall purchase from the Company, (i) 24,652,139.04 shares of Common Stock at a price of $0.05 per share and (ii) 60,397.74064 shares of Class A Preferred at a price of $1,000.00 per share. Each Purchaser shall purchase the number of such shares set forth next to such Purchaser’s name on the Schedule of Purchasers attached hereto. The closing of the purchase and sale of the Stock to be purchased hereunder (the “Closing”) shall take place at the offices of Xxxxxxxx & Xxxxx, 000 Xxxx Xxxxxxxx Xxxxx, Xxxxxxx, Xxxxxxxx 00000 at 10:00 a.m. on July 1, 2002, or at such other place or on such other date as may be mutually agreeable to the Company and the Purchasers.

(c) At the Closing, the Company shall deliver to each Purchaser stock certificates evidencing the Stock to be purchased by such Purchaser at such Closing, registered in such Purchaser’s name, upon payment of the purchase price thereof by a cashier’s or certified check, or by wire transfer of immediately available funds to such account as designated by the Company.

Section 2. Conditions of Each Purchaser’s Obligation at the Closing. The obligation of each Purchaser to purchase and pay for the Stock to be purchased by it at the Closing is subject to the satisfaction as of the Closing of the following conditions:

2A. Representations and Warranties; Covenants. The representations and warranties contained in Section 5 hereof shall be true and correct at and as of the Closing as

though then made, except to the extent of changes caused by the transactions expressly contemplated herein, and the Company shall have performed in all material respects all of the covenants required to be performed by it hereunder prior to the Closing.

2B. Certificate of Incorporation. The Company’s certificate of incorporation (the “Certificate of Incorporation”) shall include the provisions set forth in Exhibit A hereto, shall be in full force and effect under the laws of Delaware as of the Closing and shall not have been amended or modified.

2C. Senior Management Agreement and Executive Stock Agreements. The Company and VeriFone, Inc. shall have entered into a senior management agreement with Xxxxxxx X. Xxxxxxxx (the “Senior Management Agreement”) in form and substance substantially similar to Exhibit B-1 attached hereto, and Executive Stock Agreements (the “Executive Stock Agreements”) with each of Xxxxx Xxxxx, Xxxxxxx X. Xxxxxxxx, Xxxxxx Xxxx, Xxxx Xxxxx, Xxxxxx Xxxxx, Xxxxx Xxxxxxx, Xxxx Xxxxxxxx and Xxxxxx Xxxxxx (collectively with Xx. Xxxxxxxx, the “Executives”), in form and substance substantially similar to Exhibit B-2, attached hereto, the Senior Management Agreement and Executive Stock Agreements shall not have been amended or modified and shall be in full force and effect as of the Closing, and the Executives shall have purchased the Stock proposed to be purchased by them thereunder.

2D. Stockholders Agreement. The Company and certain stockholders of the Company set forth therein shall have entered into a stockholders agreement in form and substance substantially similar to Exhibit C attached hereto (the “Stockholders Agreement”), and the Stockholders Agreement shall be in full force and effect as of the Closing.

2E. Registration Agreement. The Company and certain stockholders of the Company set forth therein shall have entered into a registration rights agreement in form and substance substantially similar to Exhibit D attached hereto (the “Registration Agreement”), and the Registration Agreement shall be in full force and effect as of the Closing.

2F. Professional Services Agreement. A Subsidiary of the Company and GTCR Xxxxxx Xxxxxx, L.L.C., a Delaware limited liability company (“GTCR”), shall have entered into a professional services agreement in form and substance substantially similar to Exhibit E attached hereto (the “Professional Services Agreement”), and the Professional Services Agreement shall be in full force and effect as of the Closing.

2F. Agreement and Plan of Merger. The transaction contemplated by the Agreement and Plan of Merger of even date herewith among the Company, VeriFone Intermediate Holdings, Inc., a Delaware corporation, VeriFone MergerSub, Inc., a Delaware corporation, VeriFone, Inc., a Delaware corporation, and VeriFone Holding Corp., a Delaware corporation (the “Merger Agreement”) (the “Agreement and Plan of Merger”) shall have been consummated.

2F. Debt Financing. The Company shall have received senior debt and subordinated debt financing in the aggregate amount of $95,000,000 on terms and conditions satisfactory to the Company.

2G. Closing Documents. The Company shall have delivered to the Purchasers all of the following documents:

(a) an Officer’s Certificate, dated the date of the Closing, stating that the conditions specified in Section 1 and Sections 2A through 2F, inclusive, have been fully satisfied;

(b) certified copies of the resolutions duly adopted by the Board of Directors of the Company (the “Board”) authorizing the execution, delivery and performance of this Agreement, the Certificate of Incorporation, the Senior Management Agreement, the Executive Stock Agreements, the Stockholders Agreement, the Registration Agreement and each of the other agreements contemplated hereby (the “Transaction Documents”), the issuance and sale of the Stock and the consummation of all other transactions contemplated by this Agreement; and

2H. Fees and Expenses. The Company shall have reimbursed each Purchaser for its fees and expenses as provided in Section 7A hereof.

2I. Compliance with Applicable Laws. The purchase of Stock by the Purchasers hereunder shall not be prohibited by any applicable law or governmental regulation, shall not subject any Purchaser to any penalty, liability or, in each Purchaser’s sole judgment, other onerous conditions under or pursuant to any applicable law or governmental regulation, and shall be permitted by laws and regulations of the jurisdictions to which such Purchaser is subject.

2J. Waiver. Any condition specified in this Section 2 may be waived only if such waiver is set forth in a writing executed by the GTCR Purchasers.

Section 3. Covenants.

3A. Financial Statements and Other Information. The Company shall deliver to each Purchaser (so long as such Purchaser holds any Stock) and to each holder of at least 15% of the Investor Preferred and each holder of at least 15% of the Investor Common:

(a) as soon as available but in any event within 30 days after the end of each monthly accounting period in each fiscal year, unaudited consolidating and consolidated statements of income and cash flows of the Company and its Subsidiaries for such monthly period and for the period from the beginning of the fiscal year to the end of such month, and consolidating and consolidated balance sheets of the Company and its Subsidiaries as of the end of such monthly period, all prepared in accordance with generally accepted accounting principles, consistently applied, subject to the absence of footnote disclosures and to normal year-end adjustments;

(b) accompanying the financial statements referred to in (a) above, an Officer’s Certificate stating that neither the Company nor any of its Subsidiaries is in default under any of its material agreements or, if any such default exists, specifying the nature and

period of existence thereof and what actions the Company and its Subsidiaries have taken and propose to take with respect thereto;

(c) within 120 days after the end of each fiscal year, consolidating and consolidated statements of income and cash flows of the Company and its Subsidiaries for such fiscal year, and consolidating and consolidated balance sheets of the Company and its Subsidiaries as of the end of such fiscal year, setting forth in each case comparisons to the annual budget and to the preceding fiscal year, all prepared in accordance with generally accepted accounting principles, consistently applied, and accompanied by (i) with respect to the consolidated portions of such statements (except with respect to budget data), an opinion containing no exceptions or qualifications (except for qualifications regarding specified contingent liabilities) of an independent accounting firm of recognized national standing acceptable to the Majority Holders and (ii) a copy of such firm’s annual management letter to the Board;

(d) promptly upon receipt thereof, any additional reports, management letters or other detailed information concerning significant aspects of the Company’s operations or financial affairs given to the Company by its independent accountants (and not otherwise contained in other materials provided hereunder);

(e) at least 30 days prior to the beginning of each fiscal year, an annual budget prepared on a monthly basis for the Company and its Subsidiaries for such fiscal year (displaying anticipated statements of income and cash flows), and promptly upon preparation thereof any other significant budgets prepared by the Company and any revisions of such annual or other budgets, and within 30 days after any monthly period in which there is a material adverse deviation from the annual budget, an Officer’s Certificate explaining the deviation and what actions the Company has taken and proposes to take with respect thereto;

(f) promptly (but in any event within five business days) after the discovery or receipt of notice of any default under any material agreement to which it or any of its Subsidiaries is a party or any other event or circumstance affecting the Company or any Subsidiary which is reasonably likely to have a material adverse effect on the financial condition, operating results, assets, operations or business prospects of the Company or any Subsidiary (including the filing of any material litigation against the Company or any Subsidiary or the existence of any material dispute with any Person which involves a reasonable likelihood of such litigation being commenced) (a “Material Adverse Effect”), an Officer’s Certificate specifying the nature and period of existence thereof and what actions the Company and its Subsidiaries have taken and propose to take with respect thereto;

(g) with reasonable promptness, such other information and financial data concerning the Company and its Subsidiaries as any Person entitled to receive information under this Section 3A may reasonably request; and

(h) copies of all financial statements, proxy statements, reports and any other general written communications which the Company sends to its stockholders, and copies of all registration statements and all regular, special or periodic reports which it files, or any of its officers or directors file with respect to the Company, with the Securities and Exchange

Commission or with any securities exchange on which any of its securities are then listed, and copies of all press releases and other statements made available generally by the Company to the public concerning material developments in the Company’s and its Subsidiaries’ businesses.

3B. Inspection of Property. The Company shall permit any representatives designated by any Purchaser (so long as such Purchaser holds any Stock) or any holder of at least 25% of the outstanding Investor Preferred or at least 25% of the outstanding Investor Common, upon reasonable notice and during normal business hours and such other times as any such holder may reasonably request, to (i) visit and inspect any of the properties of the Company and its Subsidiaries, (ii) examine the corporate and financial records of the Company and its Subsidiaries and make copies thereof or extracts therefrom and (iii) discuss the affairs, finances and accounts of any such corporations with the directors, officers, key employees and independent accountants of the Company and its Subsidiaries; provided that the Company shall have the right to have its chief financial officer present at any meetings with the Company’s independent accountants.

3C. Restrictions. The Company shall not, without the prior written consent of the Majority Holders:

(a) directly or indirectly declare or pay any dividends or make any distributions upon any of its equity securities, other than payments of dividends on, or redemption payments in respect of, the Class A Preferred pursuant to the Certificate of Incorporation;

(b) directly or indirectly redeem, purchase or otherwise acquire, or permit any Subsidiary to redeem, purchase or otherwise acquire, any of the Company’s equity securities (including, without limitation, warrants, options and other rights to acquire equity securities) other than redemptions of Class A Preferred pursuant to the Company’s Certificate of Incorporation;

(c) except as expressly contemplated by this Agreement, the Senior Management Agreement or the Executive Stock Agreements, authorize, issue, sell or enter into any agreement providing for the issuance (contingent or otherwise), or permit any Subsidiary to authorize, issue, sell or enter into any agreement providing for the issuance (contingent or otherwise) of, (i) any notes or debt securities containing equity features (including, without limitation, any notes or debt securities convertible into or exchangeable for equity securities, issued in connection with the issuance of equity securities or containing profit participation features) or (ii) any equity securities (or any securities convertible into or exchangeable for any equity securities) or rights to acquire any equity securities, other than the issuance of equity securities by a Subsidiary to the Company or another Subsidiary;

(d) make, or permit any Subsidiary to make, any loans or advances to, guarantees for the benefit of, or Investments in, any Person, except for (i) intercompany transactions between the Company and a Subsidiary, (ii) reasonable advances to employees in the ordinary course of business as well as travel advances, (iii) trade credit extended to customers in the ordinary course of business and (iv) Investments having a stated maturity no greater than one year from the date the Company makes such Investment in (A) obligations of the United

States government or any agency thereof or obligations guaranteed by the United States government, (B) certificates of deposit of commercial banks having combined capital and surplus of at least $50 million, (C) commercial paper with a rating of at least “Prime-1” by Xxxxx’x Investors Service, Inc. or (D) money market accounts investing in any of the foregoing or in substantially similar investments;

(e) merge or consolidate with any Person or permit any Subsidiary to merge or consolidate with any Person (other than a wholly owned Subsidiary);

(f) sell, lease or otherwise dispose of, or permit any Subsidiary to sell, lease or otherwise dispose of, more than 5% of the consolidated assets of the Company and its Subsidiaries (computed on the basis of book value, determined in accordance with generally accepted accounting principles consistently applied, or fair market value, determined by the Board in its reasonable good faith judgment) in any transaction or series of related transactions (other than sales of inventory in the ordinary course of business);

(g) liquidate, dissolve or effect a recapitalization or reorganization in any form of transaction (including, without limitation, any reorganization into a limited liability company, a partnership or any other non-corporate entity which is treated as a partnership for federal income tax purposes);

(h) acquire, or permit any Subsidiary to acquire, any interest in any business (whether by a purchase of assets, purchase of stock, merger or otherwise), or enter into any joint venture;

(i) enter into, or permit any Subsidiary to enter into, the ownership, active management or operation of any business other than electronic payment solutions;

(j) enter into, or permit any Subsidiary to enter into, any transaction with any of its or any Subsidiary’s officers, directors, employees or Affiliates or any individual related by blood, marriage or adoption to any such Person or any entity in which any such Person or individual owns a beneficial interest, except for normal employment arrangements and benefit programs on reasonable terms, and for leases in the ordinary course of business, and except as otherwise expressly contemplated by this Agreement, the Senior Management Agreement and the Executive Stock Agreements;

(k) become subject to, or permit any of its Subsidiaries to become subject to, any agreement or instrument which by its terms would (under any circumstances) restrict (i) the right of any Subsidiary to make loans or advances or pay dividends to, transfer property to, or repay any Indebtedness owed to, the Company or any Subsidiary or (ii) the Company’s right to perform the provisions of this Agreement, the Certificate of Incorporation, the Company’s bylaws or the other Transaction Documents;

(l) except as expressly contemplated by this Agreement, make any amendment to the Certificate of Incorporation or the Company’s bylaws, or file any resolution of the Board with the Secretary of the State of Delaware; or

(m) create, incur, assume or suffer to exist, or permit any Subsidiary to create, incur, assume or suffer to exist, Indebtedness exceeding the amounts approved therefor by the Board in the annual budget.

3D. Affirmative Covenants. So long as any Purchaser holds any Stock, the Company shall, and shall cause each Subsidiary to:

(a) comply with all applicable laws, rules and regulations of all governmental authorities, the violation of which would reasonably be expected to have a material adverse effect upon the financial condition, operating results, assets, operations or business prospects of the Company and its Subsidiaries taken as a whole, and pay and discharge when payable all taxes, assessments and governmental charges (except to the extent the same are being contested in good faith and adequate reserves therefor have been established); and

(b) enter into and maintain appropriate nondisclosure and noncompete agreements with its key employees.

3E. Current Public Information. At all times after the Company has filed a registration statement with the Securities and Exchange Commission pursuant to the requirements of either the Securities Act or the Securities Exchange Act, the Company shall file all reports required to be filed by it under the Securities Act and the Securities Exchange Act and the rules and regulations adopted by the Securities and Exchange Commission thereunder and shall take such further action as any holder or holders of Restricted Securities may reasonably request, all to the extent required to enable such holders to sell Restricted Securities pursuant to (i) Rule 144 adopted by the Securities and Exchange Commission under the Securities Act (as such rule may be amended from time to time) or any similar rule or regulation hereafter adopted by the Securities and Exchange Commission or (ii) a registration statement on Form S-2 or S-3 or any similar registration form hereafter adopted by the Securities and Exchange Commission. Upon request, the Company shall deliver to any holder of Restricted Securities a written statement as to whether it has complied with such requirements.

3F. Amendment of Other Agreements. The Company shall not amend, modify or waive any provision of the Senior Management Agreement, the Executive Stock Agreements or any other agreement with key executives of the Company without the prior written consent of the Majority Holders. The Company shall enforce the provisions of the Senior Management Agreement or Executive Stock Agreements and any other agreement with key executives of the Company and shall exercise all of its rights and remedies thereunder (including, without limitation, any repurchase options and first refusal rights) unless it is otherwise directed by the Majority Holders.

3G. Public Disclosures. The Company shall not, nor shall it permit any Subsidiary to, disclose a Purchaser’s or any of its Affiliates’ name or identity as an investor in the Company in any press release or other public announcement or in any document or material filed with any governmental entity, without the prior written consent of such Purchaser, unless such disclosure is required by applicable law or governmental regulations or by order of a court of competent jurisdiction, in which case prior to making such disclosure the Company shall give written notice to such Purchaser describing in reasonable detail the proposed content of such

disclosure and shall permit such Purchaser to review and comment upon the form and substance of such disclosure.

3H. Unrelated Business Taxable Income. The Company shall not engage in any transaction which is reasonably likely to cause GTCR Fund VII or any of its limited partners or any TCW/Crescent Purchaser which are exempt from income taxation under Section 501(a) of the IRC and, if applicable, any pension plan that any such trust may be a part of, to recognize unrelated business taxable income as defined in Section 512 and Section 514 of the IRC.

3I. Xxxx-Xxxxx-Xxxxxx Compliance. In connection with any transaction in which the Company is involved (a “Transaction”) which is required to be reported under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended from time to time (the “HSR Act”), the Company shall prepare and file all documents with the Federal Trade Commission and the United States Department of Justice which may be required to comply with the HSR Act, and shall promptly furnish all materials thereafter requested by any of the regulatory agencies having jurisdiction over such filings, in connection with a Transaction. The Company shall take all reasonable actions and shall file and use reasonable best efforts to have declared effective or approved all documents and notifications with any governmental or regulatory bodies, as may be necessary or may reasonably be requested under federal antitrust laws for the consummation of the Transaction. Notwithstanding the foregoing, if GTCR Fund VII or any TCW/Crescent Purchaser, rather than the Company, is required to make a filing under the HSR Act in connection with a Transaction, the Company will provide to GTCR Fund VII or such TCW/Crescent Purchaser all necessary information for such filing, will facilitate such filing and will pay all fees associated with such filing.

Section 4. Transfer of Restricted Securities.

(a) Restricted Securities are transferable only pursuant to (i) public offerings registered under the Securities Act, (ii) Rule 144 of the Securities and Exchange Commission (or any similar rule or rules then in force) if such rule or rules are available and (iii) subject to the conditions specified in clause (b) below, any other legally available means of transfer.

(b) In connection with the transfer of any Restricted Securities (other than a transfer described in Sections 4(a)(i) or (ii) above or a transfer to an Affiliate of a Purchaser), the holder thereof shall deliver written notice to the Company describing in reasonable detail the transfer or proposed transfer, together with an opinion of Xxxxxxxx & Xxxxx or other counsel which (to the Company’s reasonable satisfaction) is knowledgeable in securities law matters to the effect that such transfer of Restricted Securities may be effected without registration of such Restricted Securities under the Securities Act. In addition, if the holder of the Restricted Securities delivers to the Company an opinion of Xxxxxxxx & Xxxxx or such other counsel that no subsequent transfer of such Restricted Securities shall require registration under the Securities Act, the Company shall promptly upon such contemplated transfer deliver new certificates for such Restricted Securities which do not bear the Securities Act legend set forth in Section 7C. If the Company is not required to deliver new certificates for such Restricted Securities not bearing such legend, the holder thereof shall not transfer the same until the prospective transferee has confirmed to the Company in writing its agreement to be bound by the conditions contained in this Section and Section 7C.

(c) Upon the request of any Purchaser, the Company shall promptly supply to such Purchaser or its prospective transferees all information regarding the Company required to be delivered in connection with a transfer pursuant to Rule 144A of the Securities and Exchange Commission.

Section 5. Representations and Warranties of the Company. As a material inducement to the Purchasers to enter into this Agreement and purchase the Stock, the Company hereby represents and warrants to the Purchasers that:

5A. Organization and Corporate Power. The Company is a corporation duly organized, validly existing and in good standing under the laws of Delaware and is qualified to do business in every jurisdiction in which the failure to so qualify might reasonably be expected to have a material adverse effect on the financial condition, operating results, assets, operations or business prospects of the Company and its Subsidiaries taken as a whole. The Company has all requisite corporate power and authority and all material licenses, permits and authorizations necessary to own and operate its properties, to carry on its businesses as now conducted and presently proposed to be conducted and to carry out the transactions contemplated by this Agreement. The copies of the Company’s Certificate of Incorporation and bylaws which have been furnished to the Purchasers’ counsels reflect all amendments made thereto at any time prior to the date of this Agreement and are correct and complete.

5B. Capital Stock and Related Matters.

(a) As of the Closing and immediately thereafter, the authorized capital stock of the Company shall consist of 40,075,000 shares of stock, of which 75,000 shares shall be designated as Class A Preferred (63,700 of which shall be issued and outstanding and 8,418.53385 of which shall be reserved for issuances upon exercise of options and warrants granted by the Company) and of which 40,000,000 shares shall be designated as Common Stock (33,994,652.41 of which shall be issued and outstanding; 3,436,136.26 of which shall be reserved for issuances upon exercise of options and warrants granted by the Company; and 764,705.88 shall be reserved for future issuances to executives and employees of the Company and its Subsidiaries). As of the Closing, the Company shall not have outstanding any stock or securities convertible or exchangeable for any shares of its capital stock or containing any profit participation features, nor shall it have outstanding any rights or options to subscribe for or to purchase its capital stock or any stock or securities convertible into or exchangeable for its capital stock or any stock appreciation rights or phantom stock plans other than pursuant to and as contemplated by this Agreement, the Senior Management Agreement, the Executive Stock Agreements and the Company’s Certificate of Incorporation. As of the Closing, the Company shall not be subject to any obligation (contingent or otherwise) to repurchase or otherwise acquire or retire any shares of its capital stock or any warrants, options or other rights to acquire its capital stock, except pursuant to this Agreement, the Senior Management Agreement, the Executive Stock Agreements and the Company’s Certificate of Incorporation. As of the Closing, all of the outstanding shares of the Company’s capital stock shall be validly issued, fully paid and nonassessable.

(b) There are no statutory or contractual stockholders preemptive rights or rights of refusal with respect to the issuance of the Stock hereunder except as expressly

contemplated in the Stockholders Agreement or provided herein . Based in part on the investment representations of the Purchasers in Section 7C hereof, of the Executives in Section 1(e) of the Senior Management Agreement or the Executive Stock Agreements, as applicable, and of the parties to the Agreement and Plan of Merger in such agreement, the Company has not violated any applicable federal or state securities laws in connection with the offer, sale or issuance of any of its capital stock, and the offer, sale and issuance of the Stock hereunder do not and will not require registration under the Securities Act or any applicable state securities laws. To the best of the Company’s knowledge, there are no agreements between the Company’s stockholders with respect to the voting or transfer of the Company’s capital stock or with respect to any other aspect of the Company’s affairs, except for the Stockholders Agreement, the Senior Management Agreement, the Executive Stock Agreements and the Registration Agreement.

5C. Subsidiaries; Investments. The Company does not own or hold any shares of stock or any other security or interest in any other Person or any rights to acquire any such security or interest, and the Company has never had any Subsidiary.

5D. Authorization; No Breach. The execution, delivery and performance of this Agreement, the Senior Management Agreement, the Executive Stock Agreements, the Stockholders Agreement, the Registration Agreement and all other agreements contemplated hereby to which the Company is a party have been duly authorized by the Company. This Agreement, the Senior Management Agreement, the Executive Stock Agreements, the Stockholders Agreement, the Registration Agreement, the Certificate of Incorporation and all other agreements contemplated hereby each constitutes a valid and binding obligation of the Company, enforceable in accordance with its terms. The execution and delivery by the Company of this Agreement, the Senior Management Agreement, the Executive Stock Agreements, the Stockholders Agreement, the Registration Agreement and all other agreements contemplated hereby to which the Company is a party, the offering, sale and issuance of the Stock hereunder and the fulfillment of and compliance with the respective terms hereof and thereof by the Company do not and will not (i) conflict with or result in a breach of the terms, conditions or provisions of, (ii) constitute a default under, (iii) result in the creation of any lien, security interest, charge or encumbrance upon the Company’s capital stock or assets pursuant to, (iv) give any third party the right to modify, terminate or accelerate any obligation under, (v) result in a violation of, or (vi) require any authorization, consent, approval, exemption or other action by or notice to any court or administrative or governmental body pursuant to, the Certificate of Incorporation or bylaws of the Company, or any law, statute, rule or regulation to which the Company is subject, or any agreement, instrument, order, judgment or decree to which the Company is a party or by which it is bound.

5E. Conduct of Business; Liabilities. Other than the negotiation, execution and delivery of this Agreement, the Senior Management Agreement, the Executive Stock Agreements, the Stockholders Agreement, the Registration Agreement and the other agreements contemplated hereby and thereby, prior to the Closing, the Company has not (i) conducted any business, (ii) incurred any expenses, obligations or liabilities (whether accrued, absolute, contingent, unliquidated or otherwise, whether or not known to the Company and whether due or to become due and regardless of when asserted), (iii) owned any assets, (iv) entered into any contracts or agreements or (v) violated any laws or governmental rules or regulations.

5F. Litigation, etc. There are no actions, suits, proceedings, orders, investigations or claims pending or, to the best of the Company’s knowledge, threatened against or affecting the Company (or to the best of the Company’s knowledge, pending or threatened against or affecting any of the officers, directors or employees of the Company with respect to their businesses or proposed business activities) at law or in equity, or before or by any governmental department, commission, board, bureau, agency or instrumentality with respect to the transactions contemplated by this Agreement.

5G. Brokerage. There are no claims for brokerage commissions, finders fees or similar compensation in connection with the transactions contemplated by this Agreement based on any arrangement or agreement binding upon the Company. The Company shall pay, and hold each Purchaser harmless against, any liability, loss or expense (including, without limitation, attorneys’ fees and out-of-pocket expenses) arising in connection with any such claim.

5H. Governmental Consent, etc. No permit, consent, approval or authorization of, or declaration to or filing with, any governmental authority is required in connection with the execution, delivery and performance by the Company of this Agreement or the other agreements contemplated hereby, or the consummation by the Company of any other transactions contemplated hereby or thereby.

5I. Disclosure. Neither this Agreement nor any of the schedules, attachments, written statements, documents, certificates or other items prepared or supplied to the Purchasers by or on behalf of the Company with respect to the transactions contemplated hereby contain any untrue statement of a material fact or omit a material fact necessary to make each statement contained herein or therein not misleading. There is no fact which the Company has not disclosed to the Purchasers in writing and of which any of its officers, directors or executive employees is aware and which has had or might reasonably be anticipated to have a material adverse effect upon the existing or expected financial condition, operating results, assets, customer or supplier relations, employee relations or business prospects of the Company.

5J. Closing Date. The representations and warranties of the Company contained in this Section 5 and elsewhere in this Agreement and all information contained in any exhibit, schedule or attachment hereto or in any writing delivered by, or on behalf of, the Company to the Purchasers shall be true and correct in all material respects on the date of the Closing as though then made, except as affected by the transactions expressly contemplated by this Agreement.

Section 6. Definitions. For the purposes of this Agreement, the following terms have the meanings set forth below:

“Affiliate” of any particular person or entity means any other person or entity controlling, controlled by or under common control with such particular person or entity. For purposes of this Agreement, all holdings of Class A Preferred and Common Stock by Persons who are Affiliates of each other shall be aggregated for purposes of meeting any threshold tests under this Agreement.

“Indebtedness” means all indebtedness for borrowed money (including purchase money obligations) maturing one year or more from the date of creation or incurrence thereof or renewable or extendible at the option of the debtor to a date one year or more from the date of creation or incurrence thereof, all indebtedness under revolving credit arrangements extending over a year or more, all capitalized lease obligations and all guarantees of any of the foregoing.

“Investor Common” means (i) the Common Stock issued hereunder and (ii) any Common Stock issued or issuable with respect to the Common Stock referred to in clause (i) above by way of stock dividends or stock splits or in connection with a combination of shares, recapitalization, merger, consolidation or other reorganization. As to any particular shares of Investor Common, such shares shall cease to be Investor Common when they have been (a) effectively registered under the Securities Act and disposed of in accordance with the Registration statement covering them or (b) distributed to the public through a broker, dealer or market maker pursuant to Rule 144 under the Securities Act (or any similar rule then in force).

“Investor Preferred” means (i) the Class A Preferred issued hereunder and (ii) any Class A Preferred issued or issuable with respect to the Class A Preferred referred to in clause (i) above by way of stock dividends or stock splits or in connection with a combination of shares, recapitalization, merger, consolidation or other reorganization. As to any particular shares of Investor Preferred, such shares shall cease to be Investor Preferred when they have been (a) effectively registered under the Securities Act and disposed of in accordance with the registration statement covering them or (b) distributed to the public through a broker, dealer or market maker pursuant to Rule 144 under the Securities Act (or any similar rule then in force).

“Investor Stock” means the Investor Preferred and the Investor Common.

“Investment” as applied to any Person means (i) any direct or indirect purchase or other acquisition by such Person of any notes, obligations, instruments, stock, securities or ownership interest (including partnership interests and joint venture interests) of any other Person and (ii) any capital contribution by such Person to any other Person.

“IRC” means the Internal Revenue Code of 1986, as amended, and any reference to any particular IRC Section shall be interpreted to include any revision of or successor to that Section regardless of how numbered or classified.

“Majority Holders” means the holders of a majority of the Investor Preferred or, if no Investor Preferred is outstanding, the holders of a majority of the Investor Common.

“Officer’s Certificate” means a certificate signed by the Company’s president or its chief financial officer, stating that (i) the officer signing such certificate has made or has caused to be made such investigations as are necessary in order to permit him to verify the accuracy of the information set forth in such certificate and (ii) to the best of such officer’s knowledge, such certificate does not misstate any material fact and does not omit to state any fact necessary to make the certificate not misleading.

“Person” means an individual, a partnership, a limited liability company, a corporation, an association, a joint stock company, a trust, a joint venture, an unincorporated

organization and a governmental entity or any department, agency or political subdivision thereof.

“Restricted Securities” means (i) the Stock issued hereunder and (ii) any securities issued with respect to the securities referred to in clause (i) above by way of a stock dividend or stock split or in connection with a combination of shares, recapitalization, merger, consolidation or other reorganization. As to any particular Restricted Securities, such securities shall cease to be Restricted Securities when they have (a) been effectively registered under the Securities Act and disposed of in accordance with the registration statement covering them, (b) become eligible for sale pursuant to Rule 144(k) (or any similar provision then in force) under the Securities Act or (c) been otherwise transferred and new certificates for them not bearing the Securities Act legend set forth in Section 7C have been delivered by the Company in accordance with Section 4(b). Whenever any particular securities cease to be Restricted Securities, the holder thereof shall be entitled to receive from the Company, without expense, new securities of like tenor not bearing a Securities Act legend of the character set forth in Section 7C.

“Securities Act” means the Securities Act of 1933, as amended, or any similar federal law then in force.

“Securities Exchange Act” means the Securities Exchange Act of 1934, as amended, or any similar federal law then in force.

“Securities and Exchange Commission” includes any governmental body or agency succeeding to the functions thereof.

“Subsidiary” means any corporation or other entity of which the securities having a majority of the ordinary voting power in electing the board of directors (or any body with a similar function) are, at the time as of which any determination is being made, owned by the Company either directly or through one or more Subsidiaries.

“TCW/Crescent Purchasers” means, collectively, (i) TCW/Crescent Mezzanine Partners III, L.P., a Delaware limited partnership, (ii) TCW/Crescent Mezzanine Trust III, a Delaware business trust, (iii) TCW/Crescent Mezzanine Partners III Netherlands, L.P., a Delaware limited partnership, and (iv) TCW Leveraged Income Trust IV, L.P., a Delaware limited partnership.

Section 7. Miscellaneous.

7A. Expenses. The Company agrees to pay, and hold each Purchaser and all holders of Investor Stock harmless against liability for the payment of, (i) the reasonable fees and expenses of their counsel arising in connection with the negotiation and execution of this Agreement and the consummation of the transactions contemplated by this Agreement, (ii) the fees and expenses incurred with respect to any amendments or waivers (whether or not the same become effective) under or in respect of this Agreement, the Senior Management Agreement, the Executive Stock Agreements, the Stockholders Agreement, the Registration Agreement, the Professional Services Agreement, the other agreements contemplated hereby and the Certificate of Incorporation and the Company’s bylaws, (iii) stamp and other taxes which may be payable in respect of the execution and delivery of this Agreement or the issuance, delivery or acquisition of

any shares of Stock purchased hereunder, (iv) the fees and expenses incurred with respect to the interpretation or enforcement of the rights granted under this Agreement, the Senior Management Agreement, the Executive Stock Agreements, the Stockholders Agreement, the Registration Agreement, the Professional Services Agreement, the other agreements contemplated hereby and the Certificate of Incorporation and the Company’s bylaws and (v) such reasonable travel expenses, legal fees and other out-of-pocket fees and expenses as have been or may be incurred by the Purchasers, their Affiliates and their Affiliates’ directors, officers and employees in connection with any Company-related financing and in connection with the rendering of any other services by the Purchasers or their Affiliates (including, but not limited to, fees and expenses incurred in attending board of directors or other Company-related meetings).

7B. Remedies. Each holder of Investor Stock shall have all rights and remedies set forth in this Agreement and the Certificate of Incorporation and all rights and remedies which such holders have been granted at any time under any other agreement or contract and all of the rights which such holders have under any law. Any Person having any rights under any provision of this Agreement shall be entitled to enforce such rights specifically (without posting a bond or other security), to recover damages by reason of any breach of any provision of this Agreement and to exercise all other rights granted by law.

7C. Purchasers’ Investment Representations. Each Purchaser, severally and not jointly, hereby represents (i) that it is acquiring the Restricted Securities purchased hereunder or acquired pursuant hereto for its own account with the present intention of holding such securities for purposes of investment, and that it has no intention of selling such securities in a public distribution in violation of the federal securities laws or any applicable state securities laws, (ii) that it is an “accredited investor” and a sophisticated investor for purposes of applicable U.S. federal and state securities laws and regulations, (iii) that this Agreement and each of the other agreements contemplated hereby to which such Purchaser is a party constitutes (or will constitute) the legal, valid and binding obligation of such Purchaser, enforceable in accordance with its terms and (iv) that the execution, delivery and performance of this Agreement and such other agreements by such Purchaser does not and will not conflict with, violate or cause a breach of any agreement, contract or instrument to which such Purchaser is subject. Notwithstanding the foregoing, nothing contained herein shall prevent such Purchaser and subsequent holders of Restricted Securities from transferring such securities in compliance with the provisions of Section 4 hereof. Each certificate for Restricted Securities shall be imprinted with a legend in substantially the following form:

“THE SECURITIES REPRESENTED BY THIS CERTIFICATE WERE ORIGINALLY ISSUED ON [DATE OF ISSUANCE] AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THE TRANSFER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE IS SUBJECT TO THE CONDITIONS SPECIFIED IN THE PURCHASE AGREEMENT, DATED AS OF JULY 1, 2002 BY AND AMONG THE ISSUER (THE “COMPANY”) AND CERTAIN INVESTORS, AND THE COMPANY RESERVES THE RIGHT TO REFUSE THE TRANSFER OF SUCH SECURITIES UNTIL SUCH CONDITIONS HAVE BEEN FULFILLED WITH RESPECT TO SUCH TRANSFER. A COPY OF SUCH CONDITIONS SHALL BE

FURNISHED BY THE COMPANY TO THE HOLDER HEREOF UPON WRITTEN REQUEST AND WITHOUT CHARGE.”

7D. Consent to Amendments. Except as otherwise expressly provided herein, the provisions of this Agreement may be amended and the Company may take any action herein prohibited, or omit to perform any act herein required to be performed by it, only if the Company has obtained the written consent of the Majority Holders. No other course of dealing between the Company and the holder of any Stock or any delay in exercising any rights hereunder or under the Certificate of Incorporation shall operate as a waiver of any rights of any such holders. For purposes of this Agreement, shares of Stock held by the Company or any Subsidiaries shall not be deemed to be outstanding.

7E. Survival of Representations and Warranties. All representations and warranties contained herein or made in writing by any party in connection herewith shall survive the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby, regardless of any investigation made by the Purchasers or on their behalf.

7F. Successors and Assigns. Except as otherwise expressly provided herein, all covenants and agreements contained in this Agreement by or on behalf of any of the parties hereto shall bind and inure to the benefit of the respective successors and assigns of the parties hereto whether so expressed or not. In addition, and whether or not any express assignment has been made, the provisions of this Agreement which are for the Purchasers’ benefit as a purchaser or holder of Stock are also for the benefit of, and enforceable by, any subsequent holder of such Stock. The rights and obligations of each Purchaser under this Agreement and the agreements contemplated hereby may be assigned by such Purchaser at any time, in whole or in part, to any investment fund managed by GTCR Xxxxxx Xxxxxx, L.L.C., or any successor thereto or any Affiliate of the TCW/Crescent Purchasers.

7G. Generally Accepted Accounting Principles. Where any accounting determination or calculation is required to be made under this Agreement or the exhibits hereto, such determination or calculation (unless otherwise provided) shall be made in accordance with generally accepted accounting principles, consistently applied.

7H. Severability. Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be prohibited by or invalid under applicable law, such provision shall be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of this Agreement.

7I. Counterparts. This Agreement may be executed simultaneously in two or more counterparts (including by means of telecopied signature pages), any one of which need not contain the signatures of more than one party, but all such counterparts taken together shall constitute one and the same Agreement.

7J. Entire Agreement. This Agreement, those documents expressly referred to herein and other documents of even date herewith embody the complete agreement among the parties and supersede and preempt any prior understandings, agreements or representations by or

among the parties, written or oral, which may have related to the subject matter hereof in any way.

7K. Descriptive Headings; Interpretation. The descriptive headings of this Agreement are inserted for convenience only and do not constitute a Section of this Agreement. The use of the word “including” in this Agreement shall be by way of example rather than by limitation.

7L. Governing Law. The corporate law of Delaware shall govern all issues concerning the relative rights of the Company and its stockholders. All other questions concerning the construction, validity and interpretation of this Agreement and the exhibits and schedules hereto shall be governed by and construed in accordance with the internal laws of the State of Delaware, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of Delaware or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Delaware.

7M. Notices. All notices, demands or other communications to be given or delivered under or by reason of the provisions of this Agreement shall be in writing and shall be deemed to have been given when delivered personally to the recipient, delivered via facsimile, sent to the recipient by reputable express courier service (charges prepaid) or mailed to the recipient by certified or registered mail, return receipt requested and postage prepaid. Such notices, demands and other communications shall be sent to the Purchasers at the address set forth on the Purchaser Notice Schedule attached hereto and to the Company at the address indicated below:

If to the Company:

VeriFone Holdings, Inc.

0000 Xxxxxxxxx Xxxxx

Xxxxx Xxxxx, XX 00000

Attention: Chief Executive Officer

Facsimile: (000) 000-0000

with copies to:

GTCR Fund VII, L.P. and GTCR Co-Invest, L.P.

c/o GTCR Xxxxxx Xxxxxx, L.L.C.

0000 Xxxxx Xxxxx

Xxxxxxx, XX 00000-0000

Attention:	Xxxxxx X. Xxxxx
	Xxxxx X. Xxxxx

Facsimile: (000) 000-0000

Xxxxxxxx & Xxxxx

000 Xxxx Xxxxxxxx Xxxxx

Xxxxxxx, Xxxxxxxx 00000

Attention: Xxxxxxx X. Xxxxxxx

Facsimile: (000) 000-0000

or to such other address or to the attention of such other person as the recipient party has specified by prior written notice to the sending party.

7N. Understanding Among the Purchasers. The determination of each Purchaser to purchase the Stock pursuant to this Agreement has been made by such Purchaser independent of any other Purchaser and independent of any statements or opinions as to the advisability of such purchase or as to the properties, business, prospects or condition (financial or otherwise) of the Company which may have been made or given by any other Purchaser or by any agent or employee of any other Purchaser. In addition, it is acknowledged by each of the Purchasers that no Purchaser has acted as an agent of any other Purchaser in connection with making its investment hereunder and that no Purchaser shall be acting as an agent of any other Purchaser in connection with monitoring its investment hereunder. It is further acknowledged by each of the other Purchasers that the GTCR Purchasers have retained Xxxxxxxx & Xxxxx to act as their counsel in connection with the transactions contemplated hereby and that Kirkland& Xxxxx has not acted as counsel for any of the other Purchasers in connection herewith and that none of the other Purchasers have the status of a client of Xxxxxxxx & Xxxxx for conflict of interest or other purposes as a result thereof.

* * * * *

IN WITNESS WHEREOF, the parties hereto have executed this Purchase Agreement on the date first written above.

		VERIFONE HOLDINGS, INC.


		By:	/s/ XXXXXXX X. XXXXXXXX
		Name:	Xxxxxxx X. Xxxxxxxx
		Its:	Chief Executive Officer


		GTCR FUND VII, L.P.

		By:	GTCR Partners VII, L.P.
		Its:	General Partner

		By:	GTCR Xxxxxx Xxxxxx, L.L.C.
		Its:	General Partner

		By:	/s/ XXXXXX X. XXXXX
		Name:	Xxxxxx X. Xxxxx
		Its:	Principal


		GTCR CO-INVEST, L.P.

		By:	GTCR Partners VI, L.P.
		Its:	General Partner

		By:	GTCR Xxxxxx Xxxxxx, L.L.C.
		Its:	General Partner

		By:	/s/ XXXXXX X. XXXXX
		Name:	Xxxxxx X. Xxxxx
		Its:	Principal

		TCW/CRESCENT MEZZANINE PARTNERS III, L.P.
		TCW/CRESCENT MEZZANINE TRUST III
		TCW/CRESCENT MEZZANINE PARTNERS III
			NETHERLANDS, L.P.

		By:	TCW/Crescent Mezzanine Management III, L.L.C., its Investment manager

		By:	TCW/Asset Management Company, its Sub-Advisor

		By:	/s/ XXXXXXX X. XXXXXXXX
		Name:	Xxxxxxx X. Xxxxxxxx
		Title:	Managing Director


		TCW LEVERAGED INCOME TRUST IV, L.P.

		By:	TCW/Asset Management Company, as its Investment Advisor

		By:	/s/ XXXXX X. XXXXXX
		Name:	Xxxxx X. Xxxxxx
		Title:	Senior Vice President


		By:	TCW Asset Management Company, as its Managing Member of TCW (XXXX XX) L.L.C., the General Partner

		By:	/s/ XXXXXXX X. XXXXXXXX
		Name:	Xxxxxxx X. Xxxxxxxx
		Title:	Managing Director

SCHEDULE OF PURCHASERS

Stockholder	No. of Shares of Common Stock	No. of Shares of Class A Preferred Stock
GTCR Fund VII, L.P.	23,635,752.43	57,907.59346
GTCR Co-Invest, L.P.	216,386.61	530.14718
TCW/Crescent Mezzanine Partners III, L.P.	635,100.00	1,556.01200
TCW/Crescent Mezzanine Trust III	98,940.00	242.41400
TCW/Crescent Mezzanine Partners III Netherlands, L.P.	25,960.00	63.57400
TCW Leveraged Income Trust IV, L.P.	40,000.00	98.00000

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PURCHASE AGREEMENT

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