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Exhibit 10.33

CONTRIBUTION AND EXCHANGE AGREEMENT

BY AND AMONG

LATTICE INCORPORATED,

AND

CUMMINGS CREEK CAPITAL, INC. AND RALPH ALEXANDER

DATED AS OF MAY 16, 2011

 
 

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TABLE OF CONTENTS
 
ARTICLE I  THE TRANSACTION
    2  
     SECTION 1.1.  The Contribution and Exchange
    2  
     SECTION 1.2.  Closing
    2  
     SECTION 1.3.  Transactions to be Effected at the Closing and Post-Closing
    2            
ARTICLE II  REPRESENTATIONS AND WARRANTIES OF ALEXANDER
    3  
     SECTION 2.1.  Ownership of the CCC Shares.
    3  
     SECTION 2.2. Corporate Organization and Authority.
    4  
     SECTION 2.3. Individual Power and Authority
    4  
     SECTION 2.4. Binding Agreement
    4  
     SECTION 2.5  No Breach.
    4  
     SECTION 2.6. No Conflict; Required Filings or Consents
    5  
     SECTION 2.7.  Representation by Counsel.
    5  
     SECTION 2.8.  Information Supplied
    6  
     SECTION 2.9.  Accredited Investor; Acquisition for Own Account.
    6  
     SECTION 2.10.  Risk Factors.
    6  
     SECTION 2.11.  Due Diligence.
    7  
     SECTION 2.12.  Capital Structure of CLR Group.
    7  
     SECTION 2.13.  Related Party Transactions
    7  
     SECTION 2.14.  General Solicitation.
    8  
     SECTION 2.15.  Short Sales and Confidentiality Prior To The Date Hereof
    8  
     SECTION 2.16.  Assumed CLR Group Debt
    8            
ARTICLE III   REPRESENTATIONS AND WARRANTIES OF LATTICE
    8  
     SECTION 3.1.  Organization and Qualification; Organizational Documents;
Subsidiaries
    8  
     SECTION 3.2.  Independent Board.
    9  
     SECTION 3.3.  Authorization; Enforcement
    9  
     SECTION 3.4   No Conflicts.
    10  
     SECTION 3.5.  Filings, Consents and Approvals.
    10  
     SECTION 3.6.  Issuance of the Exchange Shares.
    10  
     SECTION 3.7.  Capitalization
    10  
     SECTION 3.8.  SEC Reports; Financial Statements
    11  
     SECTION 3.9.  Litigation
    11  
     SECTION 3.10.  Labor Relations
    12  
     SECTION 3.11.  Compliance
    12  
     SECTION 3.12.  Regulatory Permits
    12  
     SECTION 3.13.  Title to Assets
    12  
     SECTION 3.14.  Patents and Trademarks
    13  
     SECTION 3.15.  Insurance
    13  
     SECTION 3.16.  Transactions With Affiliates and Employees.
    13  
     SECTION 3.17.  No Disagreements with Auditors and Lawyers.
    14  
     SECTION 3.18.  Certain Fees.
    14  
     SECTION 3.19.  Private Placement.
    14  
     SECTION 3.20.  Investment Company.
    14  

 
 
 

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     SECTION 3.21.  Disclosure
    14  
     SECTION 3.22.  No Integrated Offering.
        14  
     SECTION 3.23.  Indebtedness.
    14  
     SECTION 3.24.  Tax Status
    15  
     SECTION 3.25.  No General Solicitation.
    15  
     SECTION 3.26.  Manipulation of Price
    15            
ARTICLE IV - COVENANTS AND OTHER AGREEMENTS
    16  
     SECTION 4.1.  Transfer Restrictions
    16  
     SECTION 4.2.  Integration
    17  
     SECTION 4.3.  Reimbursement
    17  
     SECTION 4.4.  Form D; Blue Sky Filings
    17  
     SECTION 4.5.  Short Sales and Confidentiality After The Date Hereof.
    17  
     SECTION 4.6.  Assumption of Debt.
    18            
ARTICLE V - INDEMNITY
    18  
     SECTION 5.1.  Survival of Representations, Warranties, Covenants and
Obligations.
    18  
     SECTION 5.2.  Alexander Agreement to Indemnify
    18  
     SECTION 5.3.  Lattice’s Agreement to Indemnify
    18  
     SECTION 5.4.  Claim Procedures
    19  
     SECTION 5.5.  Third-Party Claim.
    19  
     SECTION 5.6.  Settlement.
    20  
     SECTION 5.7.  Exclusive Remedy
    21            
ARTICLE VI - GENERAL PROVISIONS
    21  
     SECTION 6.1.  Notices
    21  
     SECTION 6.2.  Definitions
    22  
     SECTION 6.3.  Terms Defined Elsewhere
        25  
     SECTION 6.4.  Interpretation.
    26  
     SECTION 6.5.  Counterparts
    27  
     SECTION 6.6.  Entire Agreement; Third-Party Beneficiaries.
    27  
     SECTION 6.7.  Governing Law
    27  
     SECTION 6.8.  Assignment.
    28  
     SECTION 6.9.  Consent to Jurisdiction
    28  
     SECTION 6.10.  Effect of Disclosure
    28  
     SECTION 6.11.  Severability
    28  
     SECTION 6.12.  Waiver and Amendment; Remedies Cumulative
    29  
     SECTION 6.13.  Waiver of Jury Trial
    29  
     SECTION 6.14.  Specific Performance.
    29  
     SECTION 6.15.  Attorney’s Fees
    30  

 
 
 

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CONTRIBUTION AND EXCHANGE AGREEMENT

THIS CONTRIBUTION AND EXCHANGE AGREEMENT, dated as of May 16, 2011 (this
“Agreement”), is made by and among Lattice Incorporated, a Delaware corporation
(“Lattice” or the “Company”) and Cummings Creek Capital, Inc., a Delaware
corporation (“Cummings Creek”) and Ralph Alexander (“Alexander”). Also party to
this Agreement is CLR Group, Ltd., an Illinois corporation (“CLR Group”), a
wholly-owned subsidiary of Cummings Creek.  Certain definitions of capitalized
terms used herein but not otherwise defined herein are set forth in Sections 6.2
and 6.3 below.

WHEREAS, Cummings Creek acquired all of the outstanding equity interests in CLR
Group, pursuant to a Stock Purchase Agreement entered into on February 24, 2011
(together, with the CLR Group Disclosure Schedules, the “Purchase Agreement”)
between Cummings Creek and the parties named therein;

WHEREAS, Cummings Creek is the owner of all of the issued and outstanding shares
of CLR Group, Inc. consisting of 3,000 shares of Class A Common Stock (the “CLR
Shares”);

WHEREAS, Alexander is sole shareholder of all issued and outstanding common
stock of Cummings Creek (the "CCC Shares");

WHEREAS, the board of directors of Lattice (the “Board of Directors”) has
approved the consummation of the transactions provided for in this Agreement,
including the issuance by Lattice to Alexander of a quantity of shares of common
stock, par value $0.01 per share, of Lattice (the “Exchange Shares”), in
exchange for the contribution to Lattice by Alexander of the CCC Shares, which
will represent all equity interests in Cummings Creek as of the Closing Date (as
defined herein), upon the terms and subject to the conditions of this Agreement
(the “Transaction”);

WHEREAS, the Board of Directors has (a) determined that this Agreement and the
Transaction are advisable and in the best interest of Lattice and its
stockholders (other than the Cummings Creek Parties), (b) declared it to be
advisable for Lattice to enter into this Agreement, and to consummate the
Transaction, (c) duly approved this Agreement and the Transaction, which
approval has not been rescinded or modified, and (d) otherwise approved the
issuance of Common Stock in the Transaction;

NOW, THEREFORE, in consideration of the foregoing and the representations,
warranties, covenants and agreements set forth herein, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:

 
 

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ARTICLE I

THE TRANSACTION

SECTION 1.1.        The Contribution and Exchange. Subject to the terms and
conditions set forth herein, at the Closing, Alexander shall contribute to
Lattice the CCC Shares (at Closing the “Contributed Shares”) in exchange for the
issuance by the Company to Alexander of 2,500,000 fully paid and non-assessable
Exchange Shares.

SECTION 1.2.        Closing. The closing of the Transaction (the “Closing”)
shall take place at 10:00 a.m., prevailing Eastern time, on the date hereof, at
the offices of Becker Meisel LLC, Eisenhower Plaza II, Suite 1500, 354
Eisenhower Parkway, Livingston, New Jersey.  By agreement of the parties, the
Closing may take place by conference call, telecopy and e-mail with exchange of
original signatures by overnight mail.  The date on which the Closing occurs is
referred to herein as the “Closing Date.”

SECTION 1.3.        Transactions to be Effected at the Closing and Post-Closing.

(a) On the Closing Date, Alexander shall deliver or cause to be delivered:

 
(i)
Certificates, representing the Contributed Shares, duly endorsed or accompanied
by powers duly executed in blank and otherwise in form acceptable for transfer
on the books of Cummings Creek;

 
(ii)
The stock book, stock ledger, minute book and corporate seal of each of Cummings
Creek and CLR Group;

 
(iii)
A certificate dated as of the Closing Date and signed by Cummings Creek and CLR
Group’s Secretary (or equivalent) and certifying and attaching: (a) copies of
resolutions of each such entity’s Board of Directors and stockholders
authorizing the execution, delivery and performance of this Agreement and the
transactions contemplated hereby, and (b) copies of each such entity’s Charter
and Governing Documents;

 
(iv)
A certificate executed by the President of CLR Group attaching evidence of
compliance with the covenants in this Agreement reasonably satisfactory to
Lattice, including, without limitation, a check ledger for each of the Bank
Accounts and a balance statement dated the Closing Date of the Bank Accounts and
an identical certificate executed by the President of Cummings Creek;

 
(v)
Certificates from the States of Illinois and Delaware and from each jurisdiction
where CLR Group and Cummings Creek is qualified to do business as a foreign
corporation, dated not earlier than March 1, 2011, as to the good standing of
the Company in such jurisdictions;

 

 
 
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(vi)
Suitable documentation for the control of all bank and other financial accounts
set forth on Schedule 2.31 to the Purchase Agreement, and identical
documentation with respect to all bank and other financial accounts of Cummings
Creek, or in which it possess any direct or indirect interest, as prescribed by
Lattice;

 
(vii)
Resignations and releases effective immediately following the Closing of each of
the directors of both Cummings Creek and CLR Group;

(b) On the Closing Date, Lattice shall:

 
(i)
Issue stock certificates to Alexander representing newly-issued, fully paid and
non-assessable shares of Lattice Common Stock, and (B) instruct its designated
transfer agent to update the stock ledger of Lattice to reflect the issuance
described in clause (A); and

 
(ii)
Deliver to Alexander each of the documents, certificates and items required to
be delivered by Lattice pursuant to this Agreement.

ARTICLE II
 
 
REPRESENTATIONS AND WARRANTIES OF ALEXANDER

Except as set forth in the Alexander Disclosure Schedule, Alexander, represents
and warrants to Lattice that all of the statements contained in this Article II
are true and correct as of the date of this Agreement, or if made as of a
specified date, as of such date.  Each disclosure set forth in the Alexander
Disclosure Schedule is identified by reference to, or has been grouped under a
heading referring to, a specific individual section of this Agreement for
convenience of reference only, and shall be deemed a qualification or exception
to such section and any other section of the Alexander Disclosure Schedule to
which its applicability is reasonably apparent on the face of such disclosure
regardless of whether or not such other section is specifically referenced.

SECTION 2.1.        Ownership of the CCC Shares.
 
 
(a) As of the date of this Agreement, Alexander is the title and beneficial
owner of the Contributed Shares, and, as of the Closing, Alexander shall be the
title and beneficial owner of the Contributed Shares. Alexander has as of the
date of this Agreement, good and marketable title to the Contributed Shares
owned by it, free and clear of all Liens.  The Contributed Shares to be
delivered by Alexander at the Closing shall be delivered by such Cummings Creek
to Lattice free and clear of all Liens.

(b) The Contributed Shares owned by Alexander have been duly authorized, validly
issued and are fully paid and non-assessable.
 
 
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SECTION 2.2.        Corporate Organization and Authority.  Cummings Creek is an
entity duly organized, validly existing and in good standing under the laws of
the jurisdiction of its organization with full right, corporate or partnership
power and authority to enter into and to consummate the transactions
contemplated by the Transaction Documents and otherwise to carry out its
obligations hereunder and thereunder.  The execution, delivery and performance
by Cummings Creek of the transactions contemplated by this Agreement have been
duly authorized by all necessary corporate or similar action on the part of such
Cummings Creek.  Each Transaction Document to which it is a party has been duly
executed by Cummings Creek, and when delivered by Cummings Creek in accordance
with the terms hereof, will constitute the valid and legally binding obligation
of the Cummings Creek, each individually and collectively, enforceable against
it in accordance with its terms, except (i) as limited by general equitable
principles and applicable bankruptcy, insolvency, reorganization, moratorium and
other laws of general application affecting enforcement of creditors’ rights
generally, (ii) as limited by laws relating to the availability of specific
performance, injunctive relief or other equitable remedies and (iii) insofar as
indemnification and contribution provisions may be limited by applicable law.).

SECTION 2.3.        Individual Power and Authority.  Alexander has the requisite
power and authority to execute and deliver this Agreement and the other
Transaction Documents to which it is a party, to perform its obligations
hereunder and thereunder, and to consummate the transaction contemplated hereby
and thereby.  The execution, delivery and performance of this Agreement and the
other Transaction Documents to which Alexander is a party and Alexander’s
consummation of the transactions contemplated thereby, have been duly authorized
by all requisite action of Alexander.

SECTION 2.4.        Binding Agreement.  This Agreement has been duly executed
and delivered to Lattice by Alexander and Cummings Creek, and constitutes the
legal, valid and binding agreement of Alexander and Cummings Creek, enforceable
against each of Alexander and Cummings Creek in accordance with its terms,
except as enforceability may be limited by bankruptcy, insolvency or other Laws
affecting creditors’ rights generally and the exercise of judicial discretion in
accordance with general equitable principles.  Upon execution and delivery at
the Closing of each other Transaction Document to which Alexander and Cummings
Creek each is a party, such Transaction Document will be duly and validly
executed and delivered to Lattice on the Closing Date, and will constitute a
legal, valid and binding obligation of Alexander and Cummings Creek,
respectively, enforceable against each of them in accordance with its terms,
except as enforceability may be limited by bankruptcy, insolvency or other Laws
affecting creditors’ rights generally and the exercise of judicial discretion in
accordance with the general equitable principles.

SECTION 2.5.        No Breach.  The execution, delivery and performance of this
Agreement and the other Transaction Documents to which each of Cummings Creek
and Alexander is a party and the consummation of the transactions contemplated
hereby and thereby by each of Cummings Creek and Alexander does not and will not
to their knowledge (a) violate or conflict with any Laws to which each of
Cummings Creek and Alexander or the Contributed Shares are subject, or by which
each of Cummings Creek and Alexander or the Contributed Shares may be bound, if
applicable, (b) with or without giving notice or the lapse of time or both,
breach or conflict with, constitute or create a default under, or give rise to
any right of termination, cancellation or acceleration under, any of the terms,
conditions or provisions of any Contract to which each of Cummings Creek and
Alexander is a party or by which each of Cummings Creek and Alexander or the
Contributed Shares may be bound, (c) result in the imposition of a Lien on the
Contributed Shares or (d) require any filing with, or permit, or the giving of
any notice to, any Governmental Authority or other Person on behalf of Cummings
Creek or Alexander.
 

 
 
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SECTION 2.6.        No Conflict; Required Filings or Consents.

(a) No Conflict. The execution, delivery and performance of this Agreement by
Alexander does not, to his knowledge, and the consummation by Alexander of the
Transaction and compliance by Alexander with the provisions of this Agreement
will not, conflict with, result in any violation, breach of or default under
(with or without notice or lapse of time, or both), require any consent, waiver
or approval under, give rise to any right of termination, cancellation or
acceleration of any right, obligation or loss of a benefit under, or result in
the creation of any Lien upon any of the properties or assets (including
intangible assets) of such Cummings Creek or any restriction on the conduct of
any of the businesses or operations of Cummings Creek under any of the
Organizational Documents of Cummings Creek.

(b) Required Filings or Consents. No consent, approval, Order or authorization
or permit of, action by, or in respect of, or registration, declaration or
filing with, or notification to any Governmental Authority is required to be
made, obtained, performed or given by or with respect to Cummings Creek in
connection with the execution, delivery and performance of this Agreement by
Cummings Creek or the consummation by Cummings Creek of the Transaction, except
for such consents, approvals, Orders, authorizations, permits, actions,
registrations, declarations, filings or notifications, the failure of which to
be made, obtained, performed or given as have not had and would not reasonably
be likely to have, individually or in the aggregate, a material adverse effect
on the ability of Cummings Creek to consummate the Transaction.

(c) Alexander has complied in all material respects with Laws of any
Governmental Authority applicable to the Contributed Shares held by
Alexander.  Except with respect to his employment, director and officer
capacities, Alexander has no claim against Cummings Creek or CLR Group.

SECTION 2.7.       Representation by Counsel.  Alexander and Cummings Creek
each: (i) has been represented by independent counsel (or has had the
opportunity to consult with independent counsel and has declined to do so); (ii)
has had the full right and opportunity to consult with such attorney and other
advisors and has availed himself, herself or itself of this right and
opportunity; (iii) has carefully read and fully understands this Agreement in
its entirety and has had it fully explained to him by such counsel; (iv) is
fully aware of the contents hereof and the meaning, intent and legal effect
thereof; and (v) is competent to execute this Agreement and has executed this
Agreement free from coercion, duress or undue influence.

 
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SECTION 2.8.        Information Supplied.  To the actual knowledge of Alexander,
(a) none of the information supplied by or on behalf of Cummings Creek and
Alexander, and (b) to the Knowledge of Cummings Creek and Alexander, none of the
information supplied in respect of CLR Group, in each case, specifically
contains any untrue statement of a material fact or omits to state any material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they are made, not
misleading.

SECTION 2.9.        Accredited Investor; Acquisition for Own Account.

(a) Investor Status. At the time Alexander was offered the Exchange Shares, he
was, and at the date hereof it is: (i) an “accredited investor” as defined in
Rule 501 under the Securities Act or (ii) a “qualified institutional buyer” as
defined in Rule 144A (a) under the Securities Act.  Alexander is not required to
be registered as a broker-dealer under Section 15 of the Exchange Act.

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

(c) Own Account.  Alexander understands that the Exchange Shares are “restricted
securities” and have not been registered under the Securities Act or any
applicable state securities law and is acquiring the Exchange Shares as
principal for its own account and not with a view to or for distributing or
reselling such Exchange Shares or any part thereof in violation of the
Securities Act or any applicable state securities law, has no present intention
of distributing any of such Shares in violation of the Securities Act or any
applicable state securities law and has no direct or indirect arrangement or
understandings with any other persons to distribute or regarding the
distribution of such Shares (this representation and warranty not limiting such
Investor’s right to sell the Exchange Shares in compliance with applicable
federal and state securities laws) in violation of the Securities Act or any
applicable state securities law.  Alexander is acquiring the Exchange Shares
hereunder in the ordinary course of its business.

SECTION 2.10.      Risk Factors.  Alexander hereby agrees and acknowledges that
he has been informed of the following: (i) there are factors relating to the
subsequent transfer of any Exchange Shares acquired hereunder that could make
the resale of such Exchange Shares difficult; and (ii) there is no guarantee
that Cummings Creek will realize any gain from the purchase of the Shares.  In
addition, the Exchange Shares are restricted and not freely transferable and
subject to lock-up limitations on transfer.  The purchase of the Shares involves
a high degree of risk and is subject to many uncertainties.  These risks and
uncertainties may adversely affect the Company’s business, operating results and
financial condition.  In such an event, the trading price for the Common Stock
could decline substantially and Cummings Creek could lose all or part of its
investment.
 
 
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SECTION 2.11.      Due Diligence.  Alexander hereby agrees and acknowledges that
he has reviewed the SEC Reports and has had an opportunity to meet with
representatives of the Company and to ask questions and receive answers to his
satisfaction regarding the Company’s proposed business and the Company’s
financial condition in order to assist him in evaluating the merits and risks of
purchasing the Shares.  All material documents and information pertaining to the
Company and the contribution of the Contributed Shares in exchange for the
Exchange Shares hereunder that have been requested by Cummings Creek have been
made available to Alexander.

SECTION 2.12.      Capital Structure of CLR Group. To the Knowledge of Alexander
and Cummings Creek:

(a) As of the date hereof, the authorized capital stock of CLR Group is as
otherwise reflected in Section 2.4(a) of the Purchase Agreement.  All of the
Contributed Shares have been, duly authorized and will be, when contributed to
Lattice in accordance with the terms hereof, validly issued, fully paid,
non-assessable and free of pre-emptive rights. As of the date of this Agreement,
except (i) as set forth above, (ii) as set forth in Section 2.12(a) of the
Cummings Creek Parties Disclosure Schedule, there are no (A) shares of capital
stock of CLR Group authorized, issued or outstanding, (B) existing options,
warrants, calls, pre-emptive rights, subscriptions or other rights, Contracts or
binding commitments of any character to which CLR Group is a party, requiring
CLR Group to issue, transfer or sell or cause to be issued, transferred or sold
any shares of capital stock of, or other equity interest in, CLR Group or
securities convertible into or exchangeable for such shares or equity interests,
or to grant, extend or enter into any such option, warrant, call, subscription
or other right, Contract or binding commitment or (C) outstanding contractual
obligations of CLR Group to repurchase, redeem or otherwise acquire any shares
of CLR Shares or the capital stock of CLR Group.

(b) As of the date hereof, there are no contractual obligations for CLR Group or
any of its Subsidiaries to file a registration statement under the Securities
Act or which otherwise relate to the registration of any securities of CLR Group
or its Subsidiaries under the Securities Act.

(c) As of the date hereof, no bonds, debentures, notes or other evidences of
Indebtedness or other obligations of CLR Group having the right to vote (or
which bonds, debentures, notes or other evidences of Indebtedness or other
obligations are convertible into or exercisable for CLR Shares having the right
to vote) on any matters on which stockholders may vote (“CLR Voting Debt”) are
issued or outstanding.

SECTION 2.13.      Related Party Transactions. None of the Cummings Creek or any
of their respective Affiliates (other than CLR Group and its Subsidiaries) is a
party to any Contract with CLR Group or any Subsidiary thereof that would be
required to be disclosed by Lattice, upon closing, pursuant to Item 404 of
Regulation S-K under the Exchange Act.
 
 
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SECTION 2.14.      General Solicitation. Alexander is not participating in this
transaction, or accepting the Exchange Shares as a result of any advertisement,
article, notice or other communication regarding the Exchange Shares published
in any newspaper, magazine or similar media or broadcast over television or
radio or presented at any seminar or any other general solicitation or general
advertisement.

SECTION 2.15.      Short Sales and Confidentiality Prior To The Date
Hereof.  Other than the transaction contemplated hereunder, Alexander has not
directly or indirectly, nor has any Person acting on behalf of or pursuant to
any understanding with Alexander, executed any disposition, including Short
Sales, in the securities of the Company during the period commencing from the
time that Alexander first received a term sheet (written or oral) from the
Company or any other Person setting forth the material terms of the transactions
contemplated hereunder until the date hereof (“Discussion Time”).  Other than to
other Persons party to this Agreement, Alexander has maintained the
confidentiality of all disclosures made to it in connection with this
transaction (including the existence and terms of this transaction).

SECTION 2.16.     Assumed CLR Group Debt.  Neither Cummings Creek nor Alexander
has incurred or assumed any debt relating in connection with its acquisition of
the CLR Shares, except pursuant to the Purchase Agreement and as disclosed on
the Cummings Creek Parties Disclosure Schedule, or as otherwise disclosed in
Schedule 2.16 hereto (as to legal fees).

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF LATTICE

Except as set forth in the Company’s SEC Reports filed with the SEC prior to the
date of this Agreement, Lattice represents and warrants to Alexander that all of
the statements contained in this Article III are true and correct as of the date
of this Agreement, or if made as of a specified date, as of such date.

SECTION 3.1.        Organization and Qualification; Organizational Documents;
Subsidiaries.

(a) Organization and Qualification.  The Company and each of the Subsidiaries is
an entity duly incorporated or otherwise organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation or organization
(as applicable), with the requisite corporate power and authority to own and use
its properties and assets and to carry on its business as currently
conducted.  Neither the Company nor any Subsidiary is in violation or default of
any of the provisions of its respective certificate or articles of
incorporation, bylaws or other organizational or charter documents.  The Company
and each of the Subsidiaries is duly qualified to conduct business and is in
good standing as a foreign corporation or other entity in each jurisdiction in
which the nature of the business conducted or property owned by it makes such
qualification necessary, except where the failure to be so qualified or in good
standing, as the case may be, could not have or reasonably be expected to result
in (i) a material adverse effect on the legality, validity or enforceability of
any Transaction Document, (ii) a material adverse effect on the results of
operations, assets, business, prospects or condition (financial or otherwise) of
the Company and the Subsidiaries, taken as a whole, or (iii) a material adverse
effect on the Company’s ability to perform in any material respect on a timely
basis its obligations under any Transaction Document (any of (i), (ii) or (iii),
a “Material Adverse Effect”) and no Proceeding has been instituted in any such
jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or
curtail such corporate power and authority or qualification.
 
 
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(b) Organizational Documents. The Company has delivered or made available to
Alexander, prior to the execution of this Agreement, true, correct and complete
copies of the Organizational Documents of Lattice, and each such instrument is
in full force and effect. Lattice is not in violation of its Organizational
Documents.

(c) Subsidiaries.  All of the direct and indirect subsidiaries of the Company
are set forth on Exhibit 21.1 of the 10-K of the Company, as filed with the
Commission.  The Company owns, directly or indirectly, such capital stock or
other equity interests in SMEI and in each other Subsidiary as reflected on
Exhibit 21.1 and otherwise disclosed in the Company's current 10-K free and
clear of any Liens, and all the issued and outstanding shares of capital stock
of each Subsidiary are validly issued and are fully paid, non-assessable and
free of preemptive and similar rights to subscribe for or purchase securities

SECTION 3.2.        Independent Board.  As of the date of this Agreement, the
Board of Directors of the Company consists of three (3) directors with 2 being
“independent”, as defined in the rules promulgated under the 1934 Act.

SECTION 3.3.       Authorization; Enforcement.  The Company has the requisite
corporate power and authority to enter into and to consummate the transactions
contemplated by each of the Transaction Documents and otherwise to carry out its
obligations hereunder and thereunder.  The execution and delivery of each of the
Transaction Documents by the Company and the consummation by it of the
transactions contemplated hereby and thereby have been duly authorized by all
necessary corporate action on the part of the Company and no further action is
required by the Company, its board of directors or its stockholders in
connection therewith other than in connection with the Required Approvals.  Each
Transaction Document has been (or upon delivery will have been) duly executed by
the Company and, when delivered in accordance with the terms hereof and thereof,
will constitute the valid and binding obligation of the Company enforceable
against the Company in accordance with its terms except (i) as limited by
general equitable principles and applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application affecting
enforcement of creditors’ rights generally, (ii) as limited by laws relating to
the availability of specific performance, injunctive relief or other equitable
remedies and (iii) insofar as indemnification and contribution provisions may be
limited by applicable law.
 

 
 
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SECTION 3.4.        No Conflicts.  The execution, delivery and performance of
the Transaction Documents by the Company and the consummation by the Company of
the other transactions contemplated hereby and thereby do not and will not: (i)
conflict with or violate any provision of the Company’s or any Subsidiary’s
certificate or articles of incorporation, bylaws or other organizational or
charter documents, or (ii) conflict with, or constitute a default (or an event
that with notice or lapse of time or both would become a default) under, result
in the creation of any Lien upon any of the properties or assets of the Company
or any Subsidiary, or give to others any rights of termination, amendment,
acceleration or cancellation (with or without notice, lapse of time or both) of,
any agreement, credit facility, debt or other instrument (evidencing a Company
or Subsidiary debt or otherwise) or other understanding to which the Company or
any Subsidiary is a party or by which any property or asset of the Company or
any Subsidiary is bound or affected, or (iii) subject to the Required Approvals,
conflict with or result in a violation of any law, rule, regulation, order,
judgment, injunction, decree or other restriction of any court or governmental
authority to which the Company or a Subsidiary is subject (including federal and
state securities laws and regulations), or by which any property or asset of the
Company or a Subsidiary is bound or affected; except in the case of each of
clauses (ii) and (iii), such as could not have or reasonably be expected to
result in a Material Adverse Effect.
 
SECTION 3.5.        Filings, Consents and Approvals.  The Company is not
required to obtain any consent, waiver, authorization or order of, give any
notice to, or make any filing or registration with, any court or other federal,
state, local or other governmental authority or other Person in connection with
the execution, delivery and performance by the Company of the Transaction
Documents, other than pursuant to Section 4.4 hereof, and the filing of Form D
with the Commission and such filings as are required to be made under applicable
state securities laws  (the “Required Approvals”).

SECTION 3.6.        Issuance of the Exchange Shares.  The Exchange Shares are
duly authorized and, when issued and paid for in accordance with the applicable
Transaction Documents, will be duly and validly issued, fully paid and
nonassessable, free and clear of all Liens imposed by the Company other than
restrictions on transfer provided for in the Transaction Documents.

SECTION 3.7.        Capitalization.  The capitalization of the Company is as set
forth in Item 1 (Financial Statements, inclusive of footnote) in the Company's
Form 10KSB for the period ending December 31, 2011 (the “10-K Report”),
provided, however, such capitalization also includes 454,546 of outstanding
Series D Convertible Preferred Stock issued to Baron Partners LP as otherwise
disclosed in the Current Report of the Company, filed with the Commission on
February 22, 2011 (the “Baron Partners 8-K Report”).   Except as disclosed in
Item 1 of the 10-K Report, the Form 10-Q Report for the period ending March 31,
2011 (the “10-Q Report”) and the Baron Partners 8-K Report, no Person has any
right of first refusal, preemptive right, right of participation, or any similar
right to participate in the transactions contemplated by the Transaction
Documents.  Except as a result of the issuance of the Exchange Shares and as
otherwise disclosed in Item 1 of the 10-K Report, the 10-Q Report and the Baron
Partners 8-K Report, there are no outstanding options, warrants, script rights
to subscribe to, calls or commitments of any character whatsoever relating to,
or securities, rights or obligations convertible into or exercisable or
exchangeable for, or giving any Person any right to subscribe for or acquire,
any shares of Common Stock, or contracts, commitments, understandings or
arrangements by which the Company or any Subsidiary is or may become bound to
issue additional shares of Common Stock or Common Stock Equivalents.  The
issuance of the Exchange Shares will not obligate the Company to issue shares of
Common Stock or other securities to any Person (other than the Investor) and
will not result in a right of any holder of Company securities to adjust the
exercise, conversion, exchange or reset price under any of such securities.  All
of the outstanding shares of capital stock of the Company are validly issued,
fully paid and nonassessable, have been issued in compliance with all federal
and state securities laws, and none of such outstanding shares was issued in
violation of any preemptive rights or similar rights to subscribe for or
purchase securities.  No further approval or authorization of any stockholder,
the Board of Directors of the Company or others is required for the issuance and
sale of the Exchange Shares.  There are no stockholders agreements, voting
agreements or other similar agreements with respect to the Company’s capital
stock to which the Company is a party or, to the knowledge of the Company,
between or among any of the Company’s stockholders.
 
 
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SECTION 3.8.        SEC Reports; Financial Statements.  The Company has filed
all reports, schedules, forms, statements and other documents required to be
filed by the Company under the Securities Act and the Exchange Act, including
pursuant to Section 13(a) or 15(d) thereof, for the two years preceding the date
hereof (or such shorter period as the Company was required by law or regulation
to file such material) (the foregoing materials, including the exhibits thereto
and documents incorporated by reference therein, being collectively referred to
herein as the “SEC Reports”) on a timely basis or has received a valid extension
of such time of filing and has filed any such SEC Reports prior to the
expiration of any such extension.  As of their respective dates, the SEC Reports
complied in all material respects with the requirements of the Securities Act
and the Exchange Act, as applicable, and none of the SEC Reports, when filed,
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.  The financial statements of the Company included in the SEC Reports
comply in all material respects with applicable accounting requirements and the
rules and regulations of the Commission with respect thereto as in effect at the
time of filing.  Such financial statements have been prepared in accordance with
United States generally accepted accounting principles applied on a consistent
basis during the periods involved (“GAAP”), except as may be otherwise specified
in such financial statements or the notes thereto and except that unaudited
financial statements may not contain all footnotes required by GAAP, and fairly
present in all material respects the financial position of the Company and its
consolidated Subsidiaries as of and for the dates thereof and the results of
operations and cash flows for the periods then ended, subject, in the case of
unaudited statements, to normal, immaterial, year-end audit adjustments.

SECTION 3.9.       Litigation.  Except as set forth in the SEC Reports, there is
no action, suit, inquiry, notice of violation, claim, charge, complaint,
inquiry, investigation, examination, hearing, petition, arbitration, mediation
or other proceeding, in each case before any Governmental Authority, whether
civil, criminal, administrative or otherwise, in Law or in equity pending or, to
the knowledge of the Company, threatened against or affecting the Company, any
Subsidiary or any of their respective properties before or by any court,
arbitrator, governmental or administrative agency or regulatory authority
(federal, state, county, local or foreign) (collectively, an “Action”) which (i)
adversely affects or challenges the legality, validity or enforceability of any
of the Transaction Documents or the Exchange Shares or (ii) could, if there were
an unfavorable decision, have or reasonably be expected to result in a Material
Adverse Effect.  Neither the Company nor any Subsidiary, nor, to the best of the
knowledge of the Company, any director or officer thereof, is or has been the
subject of any Action involving a claim of violation of or liability under
federal or state securities laws or a claim of breach of fiduciary duty.
 
 
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SECTION 3.10.      Labor Relations.  No material labor dispute exists or, to the
knowledge of the Company, is imminent with respect to any of the employees of
the Company or any Subsidiary which could reasonably be expected to result in a
Material Adverse Effect. None of the Company’s or its Subsidiaries’ employees is
a member of a union that relates to such employee’s relationship with the
Company, and neither the Company nor any of its Subsidiaries is a party to a
collective bargaining agreement, and the Company and its Subsidiaries believe
that their relationships with their employees are good.  No executive officer,
to the knowledge of the Company, is, or is now expected to be, in violation of
any material term of any employment contract, confidentiality, disclosure or
proprietary information agreement or non-competition agreement, or any other
contract or agreement or any restrictive covenant, and, to the knowledge of the
Company, the continued employment of each such executive officer does not
subject the Company or any of its Subsidiaries to any liability with respect to
any of the foregoing matters.  To the knowledge of the Company, the Company and
its Subsidiaries are in compliance with all U.S. federal, state, local and
foreign laws and regulations relating to employment and employment practices,
terms and conditions of employment and wages and hours, except where the failure
to be in compliance could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.

SECTION 3.11.      Compliance.  Neither the Company nor any Subsidiary (i) is in
material default under or in violation of (and no event has occurred that has
not been waived that, with notice or lapse of time or both, would result in a
default by the Company or any Subsidiary under), nor has the Company or any
Subsidiary received notice of a claim that it is in default under or that it is
in violation of, any indenture, loan or credit agreement or any other agreement
or instrument to which it is a party or by which it or any of its properties is
bound (whether or not such default or violation has been waived), (ii) is in
violation of any order of any court, arbitrator or governmental body, or (iii)
to the knowledge of the Company, is or has been in violation of any statute,
rule or regulation of any governmental authority, including without limitation
all foreign, federal, state and local laws applicable to its business and all
such laws that affect the environment, except in each case as could not have or
reasonably be expected to result in a Material Adverse Effect.

SECTION 3.12.      Regulatory Permits.  The Company and the Subsidiaries possess
all certificates, authorizations and permits issued by the appropriate federal,
state, local or foreign regulatory authorities necessary to conduct their
respective businesses as described in the SEC Reports, except where the failure
to possess such permits could not have or reasonably be expected to result in a
Material Adverse Effect (“Material Permits”), and neither the Company nor any
Subsidiary has received any notice of proceedings relating to the revocation or
modification of any Material Permit.

SECTION 3.13.      Title to Assets.  The Company and the Subsidiaries have good
and marketable title in fee simple to all real property owned by them and good
and marketable title in all personal property owned by them that is material to
the business of the Company and the Subsidiaries, in each case free and clear of
all Liens, except for Liens as do not materially affect the value of such
property and do not materially interfere with the use made and proposed to be
made of such property by the Company and the Subsidiaries, Liens for the payment
of federal, state or other taxes, the payment of which is neither delinquent nor
subject to penalties.  Any real property and facilities held under lease by the
Company and the Subsidiaries are held by them under valid, subsisting and
enforceable leases with which the Company and the Subsidiaries are in
compliance.
 
 
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SECTION 3.14.      Patents and Trademarks.  The Company and the Subsidiaries
have, or have rights to use, all patents, patent applications, trademarks,
trademark applications, service marks, trade names, trade secrets, inventions,
copyrights, licenses and other intellectual property rights and similar rights
necessary or material for use in connection with their respective businesses as
described in the SEC Reports and which the failure to so have could have a
Material Adverse Effect (collectively, the “Intellectual Property Rights”).
Neither the Company nor any Subsidiary has received a notice (written or
otherwise) that the Intellectual Property Rights used by the Company or any
Subsidiary violate or infringe upon the rights of any Person unless such notice
has been resolved without a Material Adverse Effect. To the knowledge of the
Company, all such Intellectual Property Rights are enforceable and there is no
existing infringement by another Person of any of the Intellectual Property
Rights.  The Company and its Subsidiaries have taken reasonable security
measures to protect the secrecy, confidentiality and value of all of their
intellectual properties, except where failure to do so could not, individually
or in the aggregate, reasonably be expecting to have a Material Adverse Effect.

SECTION 3.15.      Insurance.   The Company and the Subsidiaries are insured by
insurers of recognized financial responsibility against such losses and risks
and in such amounts as are prudent and customary in the businesses in which the
Company and the Subsidiaries are engaged, including, but not limited to,
directors and officers insurance coverage at least equal to the aggregate
Subscription Amount, excepting where such absence of insurance coverage is not
reasonably expected to have a Material Adverse Effect.  Neither the Company nor
any Subsidiary has any reason to believe that it will not be able to renew its
existing insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary to continue its
business without a significant increase in cost.

SECTION 3.16.      Transactions With Affiliates and Employees.  Except as set
forth in the SEC Reports, none of the officers or directors of the Company or
any Subsidiary and, to the knowledge of the Company, none of the employees of
the Company or any Subsidiary is presently a party to any transaction with the
Company or any Subsidiary (other than for services as employees, officers and
directors), including any contract, agreement or other arrangement providing for
the furnishing of services to or by, providing for rental of real or personal
property to or from, or otherwise requiring payments to or from any officer,
director or such employee or, to the knowledge of the Company, any entity in
which any officer, director, or any such employee has a substantial interest or
is an officer, director, trustee or partner, other than (i) for payment of
salary or consulting fees for services rendered, (ii) reimbursement for expenses
incurred on behalf of the Company or a Subsidiary and (iii) for other employee
benefits, including stock option or stock grant agreements under any stock plans
of the Company.
 
 
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SECTION 3.17.     No Disagreements with Auditors and Lawyers.  To the knowledge
of the Company, there are no material disagreements of any kind presently
existing, or reasonably anticipated by the Company to arise, between the Company
and the auditors and lawyers formerly or presently employed by the Company.

SECTION 3.18.     Certain Fees.  No brokerage or finder’s fees or commissions
are or will be payable by the Company to any broker, financial advisor or
consultant, finder, placement agent, investment banker, bank or other Person
with respect to the transactions contemplated by the Transaction
Documents.  Each Investor shall have no obligation with respect to any fees or
with respect to any claims made by or on behalf of other Persons for fees of a
type contemplated in this Section that may be due in connection with the
transactions contemplated by the Transaction Documents.

SECTION 3.19.      Private Placement.  Assuming the accuracy of the
representations and warranties of Cummings Creek and Alexander set forth in
Section 2.9, no registration under the Securities Act is required for the
issuance of the Exchange Shares by the Company as contemplated hereby.

SECTION 3.20.      Investment Company. The Company is not, and is not an
Affiliate of, and immediately after receipt of payment for the Exchange Shares,
will not be or be an Affiliate of, an “investment company” within the meaning of
the Investment Company Act of 1940, as amended.  The Company shall conduct its
business in a manner so that it will not become subject to the Investment
Company Act.

SECTION 3.21.      Disclosure.  All disclosure furnished by or on behalf of the
Company to Alexander regarding the Company, its business and the transactions
contemplated hereby, is true and correct and does not contain any untrue
statement of a material fact or omit to state any material fact necessary in
order to make the statements made therein, in light of the circumstances under
which they were made, not misleading.  The Company acknowledges and agrees that
Alexander has not made any representations or warranties with respect to the
transactions contemplated hereby other than those specifically set forth in
Article II hereof.

SECTION 3.22.      No Integrated Offering. Assuming the accuracy of each of the
representations and warranties of Alexander and Cummings Creek set forth in
Section __, neither the Company, nor any of its affiliates, nor any Person
acting on its or their behalf has, directly or indirectly, made any offers or
sales of any security or solicited any offers to buy any security, under
circumstances that would cause this offering of Exchange Shares to be integrated
with prior offerings by the Company for purposes of the Securities Act.

SECTION 3.23.      Indebtedness. All outstanding secured and unsecured
Indebtedness of the Company or any Subsidiary, or for which the Company or any
Subsidiary has commitments is set forth in the SEC Reports.  Neither the Company
nor any Subsidiary is in default with respect to any Indebtedness.
 
 
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SECTION 3.24.      Tax Status. The Company has timely filed all tax returns,
reports, declarations, statements, and other information required by law to be
filed with or supplied to any taxing authority with respect to the Taxes (as
defined below) owed by the Company (the “Tax Returns”).  All Taxes due and
payable on or before the Closing have been paid or will be paid prior to the
time they become delinquent.  All Taxes that the Company is or was required by
law to withhold or collect have been duly withheld or collected and, to the
extent required, have been paid to the proper governmental entity.  The Company
has not been advised (a) that any of the Tax Returns have been or are being
examined or audited as of the date hereof, (b) that any such examination or
audit is currently threatened or contemplated, or (c) of any deficiency in
assessment or proposed judgment to its Taxes.  The Company has no knowledge of
any liability for any Taxes to be imposed up each Investor on its properties or
assets as of the date of this Agreement that are not adequately provided for on
the Balance Sheet.  The Company has delivered or made available to Alexander
true and complete copies of all federal income Tax Returns, examination reports,
and statements of deficiencies filed by, assessed against or agreed to by the
Company in the past three years.  The Company has never been a member of a
consolidated or affiliated group of corporations filing a consolidated or
combined income Tax Return, nor does the Company have any liability for Taxes of
any other person or entity.  The Company is not a party to any tax allocation or
sharing arrangement or tax indemnity agreement.  For purposes of this Agreement,
the term “Taxes” shall mean all taxes, charges, fees, levies, or other similar
assessments or liabilities, including, without limitation, income, gross
receipts, ad valorem, premium, value-added, excise, real property, personal
property, sales, use, transfer, withholding, employment, payroll, and franchise
taxes imposed by the United States of America or any other governmental entity,
and any interest, fines, penalties, assessments, or additions to tax resulting
from, attributable to or incurred in connection with any tax or any contest or
dispute thereof.

SECTION 3.25.      No General Solicitation.  Neither the Company nor any person
acting on behalf of the Company has offered or sold any of the Exchange Shares
by any form of general solicitation or general advertising.  The Company has
offered the Exchange Shares for sale only to Alexander and certain other
“accredited investors” within the meaning of Rule 501 under the Securities Act.

SECTION 3.26.      Manipulation of Price.  The Company has not, and to its
knowledge no one acting on its behalf has, (i) taken, directly or indirectly,
any action designed to cause or to result in the stabilization or manipulation
of the price of any security of the Company to facilitate the sale or resale of
any of the Exchange Shares, (ii) except in private transactions not involving a
market maker, sold, bid for, purchased, or paid any compensation for soliciting
purchases of, any of the securities of the Company  or (iii) paid or agreed to
pay to any person any compensation for soliciting another to purchase any other
securities of the Company, other than, in the case of clauses (ii) and (iii),
compensation paid to the Company’s placement agent in connection with the
placement of the Exchange Shares.

 
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ARTICLE IV

COVENANTS AND OTHER AGREEMENTS

SECTION 4.1.        Transfer Restrictions.

(a)           Exchange Shares acquired by Alexander may only be transferred,
pledged or disposed of in compliance with state and federal securities laws.  In
connection with any transfer of Exchange Shares other than pursuant to an
effective registration statement or Rule 144, to the Company or to an Affiliate
of Alexander or in connection with a pledge as contemplated in Section 4.1(b),
the Company may require the transferor thereof to provide to the Company an
opinion of counsel selected by the transferor and reasonably acceptable to the
Company, the form and substance of which opinion shall be reasonably
satisfactory to the Company, to the effect that such transfer does not require
registration of such transferred Exchange Shares under the Securities Act.  As a
condition of transfer, any such transferee shall agree in writing to be bound by
the terms of this Agreement and shall have the rights of a Investor under this
Agreement.
 
(b)           Alexander agrees to the imprinting, so long as is required by this
Section 4.1(b) of a legend on any of the Exchange Shares in the following form:
 
(i)           THESE SHARES HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND
EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON
AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO
AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH
APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO
THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY
ACCEPTABLE TO THE COMPANY.  THESE SHARES OF COMMON STOCK MAY BE PLEDGED IN
CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SHARES.
 
(c)           Alexander acknowledges and agrees that for the period of time
during which Alexander is subject to any lockup agreements, the Exchange Shares
may not be pledged nor may a security interest be granted in some or all of the
Exchange Shares.  If any lockup agreements binding upon Alexander expire or
waived, then Alexander may pledge or grant a security interest to a financial
institution that is an “accredited investor” as defined in Rule 501(a) under the
Securities Act, provided it agrees to be bound by the provisions of this
Agreement and, if required under the terms of such arrangement, Alexander may
transfer pledged or secured Exchange Shares to the pledgees or secured parties.
Such a pledge or transfer would not be subject to approval of the Company,
provided, however, the Company may require Alexander to provide to the Company
an opinion of counsel selected by Alexander and reasonably acceptable to the
Company, the form and substance of which opinion shall be reasonably
satisfactory to the Company to the effect that such transfer or pledge does not
require registration of such transferred or pledged Exchange Shares under the
Securities Act.  At Alexander’s expense, the Company will execute and deliver
such reasonable documentation as a pledgee or secured party of Exchange Shares
may reasonably request in connection with a pledge or transfer of the Exchange
Shares.
 
 
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SECTION 4.2.        Integration.  The Company shall not sell, offer for sale or
solicit offers to buy or otherwise negotiate in respect of any security (as
defined in Section 2 of the Securities Act) that would be integrated with the
offer or sale of the Exchange Shares in a manner that would require the
registration under the Securities Act of the issuance of the Exchange Shares to
Alexander.

SECTION 4.3.        Reimbursement.  If Alexander becomes involved in any
capacity in any Proceeding by or against any Person who is a stockholder of the
Company (except as a result of sales, pledges, margin sales and similar
transactions by Alexander), solely as a result of Alexander acquisition of the
Exchange Shares from the Company under this Agreement, the Company will
reimburse Alexander for his reasonable legal and other expenses (including the
cost of any investigation preparation and travel in connection therewith)
incurred in connection therewith, as such expenses are incurred.  The
reimbursement obligations of the Company under this paragraph shall be in
addition to any liability which the Company may otherwise have, shall extend
upon the same terms and conditions to any Affiliates of Alexander who are
actually named in such action, proceeding or investigation, and partners,
directors, agents, employees and controlling persons (if any), as the case may
be, of Alexander and any such Affiliate, and shall be binding upon and inure to
the benefit of any successors, assigns, heirs and personal representatives of
the Company, Alexander and any such Affiliate and any such Person.  The Company
also agrees that none of Alexander nor any of his Affiliates, partners,
directors, agents, employees or controlling persons shall have any liability to
the Company or any Person asserting claims on behalf of or in right of the
Company solely as a result of acquiring the Exchange Shares under this
Agreement.

SECTION 4.4.        Form D; Blue Sky Filings.  The Company agrees to timely file
a Form D with respect to the Exchange Shares as required under Regulation D and
to provide a copy thereof, promptly upon request of Alexander.  The Company
shall take such action as the Company shall reasonably determine is necessary in
order to obtain an exemption for, or to qualify the Exchange Shares for, sale to
Alexander at the Closing under applicable securities or “Blue Sky” laws of the
states of the United States, and shall provide evidence of such actions promptly
upon request of Alexander.

SECTION 4.5.        Short Sales and Confidentiality After The Date
Hereof.  Alexander covenants that neither he nor any Affiliate acting on his
behalf or pursuant to any understanding with him will execute any Short Sales
during the period commencing at the Discussion Time and ending at the time that
the transactions contemplated by this Agreement are first publicly
announced.  Alexander covenants that until such time as the transactions
contemplated by this Agreement are publicly disclosed by the Company, Alexander
will maintain the confidentiality of all disclosures made to him in connection
with this transaction (including the existence and terms of this
transaction).  Notwithstanding the foregoing, Alexander does not make any
representation, warranty or covenant hereby that he will not engage in Short
Sales in the securities of the Company after the time that the transactions
contemplated by this Agreement are first publicly announced.
 
 
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SECTION 4.6.        Assumption of Debt.  The Company shall assume the debt
described under Cummings Creek Parties Disclosure Schedule 2.16 within ninety
(90) days of the Closing Date.

ARTICLE V

INDEMNITY

SECTION 5.1.        Survival of Representations, Warranties, Covenants and
Obligations.  The representations, warranties, covenants and obligations in this
Agreement shall survive the Closing Date. A claim for indemnification relating
to the representations and warranties in this Agreement may be made at any time
prior to the first anniversary of the Closing (the “Survival Termination Date”);
provided that (i) a claim relating to Section 2.6 may be made at any time until
eighteen months following the Closing Date and (ii) a claim relating to Sections
2.1, 2.2, 2.3, 2.4, 2.8, 3.1, 3.3, 3.6, 3.7, 3.8 and 3.9 (the “Fundamental
Representations”) or to any agreements or covenants to be performed following
the Closing, including without limitation Section 4.6, may be made at any time.

SECTION 5.2.        Alexander Agreement to Indemnify. Subject to the limitations
contained in this Article V, upon the terms and subject to the conditions of
this Article V, Alexander will severally indemnify, defend and hold harmless
Lattice and its successors and permitted assigns (collectively, the “Company
Indemnified Parties”) at any time after the Closing, from and against, and shall
reimburse such persons for, any and all demands, claims, actions or causes of
action, assessments, losses, damages, liabilities, costs and expenses in
connection with a claim, including, taxes, penalties and reasonable attorneys’
fees and expenses (collectively, “Damages”) asserted against, relating to,
imposed upon or incurred by Lattice or any Company Indemnified Parties arising
from or in connection with: (i) a breach of any representation of Alexander
contained in this Agreement, or (ii) the breach of any agreement or covenant of
Alexander contained in this Agreement (collectively, the matters in clauses (i)
and (ii), “Company Claims”).  Nothing in this Agreement shall limit or restrict
any of Company Indemnified Parties’ rights to recover any amounts in connection
with any action based upon Fraud by any Alexander.

SECTION 5.3.        Lattice’s Agreement to Indemnify. Upon the terms and subject
to the conditions of this Article, Lattice will indemnify, defend and hold
harmless Alexander, (the “Alexander Indemnified Parties”) at any time after the
Closing, from and against, and shall reimburse such persons for, any and all
Damages asserted against, relating to, imposed upon or incurred by the Alexander
Indemnified Parties or any of them arising from or in connection with: (i) a
breach of any representation of Lattice contained in or made pursuant to this
Agreement, or (ii) the breach of any agreement or covenant of Lattice contained
in this Agreement (unless the breach resulted from an action of an Alexander
Indemnified Party). Nothing in this Agreement shall limit or restrict any of the
Alexander Indemnified Parties’ rights to maintain or recover any amounts in
connection with any action or claim based upon Fraud by Lattice.
 
 
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SECTION 5.4.        Claim Procedures. If a Person is entitled to indemnification
under this Article V (the “Indemnified Party”), such party may make claim under
this Article V (a “Claim”) by delivering to the party required to provide
indemnification hereunder (the “Indemnifying Party”) written notice of such
claim (the “Claims Notice”). The Claims Notice shall state the nature and basis
of such Claim or action, to the extent known, and the amount in dispute under
such claim or action, if known at such time. The Indemnifying Party shall
respond to the Indemnified Party (a “Claim Response”) within thirty (30) days
(the “Response Period”) after the date that the Claims Notice is received by the
Indemnifying Party. If the Indemnifying Party fails to give a Claim Response
within the Response Period, the Indemnifying Party will be deemed not to dispute
the Claim described in the related Claims Notice. If the Indemnifying Party
elects not to dispute a Claim described in a Claims Notice, whether by failing
to give a timely Claim Response or by written notice to the Indemnified Party,
then the amount of Damages, to the extent known at the time, set forth in such
Claims Notice will be conclusively deemed to be an obligation of the
Indemnifying Party, and the Indemnifying Party shall pay within thirty (30) days
after the last day of the applicable Response Period the amount of Damages due
pursuant to this Article V. If the Indemnifying Party delivers a Claim Response
not relating to a Third-Party Claim within the Response Period indicating that
it disputes one or more of the matters identified in the Claims Notice, the
Indemnifying Party and the Indemnified Party shall promptly meet and act in good
faith to settle the dispute before otherwise seeking to enforce their respective
rights under this Article V. Any obligation of Alexander to indemnify Lattice
Indemnified Parties pursuant to Section 5.2 shall be payable in shares of
Company Common Stock.  For purposes of making any such indemnification payments
hereunder, each share of Company Common Stock shall be valued at the volume
weighted average price (computed using Bloomberg) of a share of Company Common
Stock for the 30-trading day period ending on the date preceding the date on
which such payment is made.

SECTION 5.5.         Third-Party Claim.

(a) In the event any claim for indemnification under this Article V is based on
a claim asserted by a third party (i.e., a Person other than a party hereto or
its Affiliates, or agents) (a “Third-Party Claim”), the party seeking
indemnification shall give prompt written notice to such other party of the
Third-Party Claim, which notice shall specify in reasonable detail the basis of
such claim and the facts pertaining thereto, and indicating the sections of this
Agreement allegedly breached to the extent determinable which are the basis for
such claim and the best estimate of the amount to the extent determinable or
estimable as of such notice date of the Damages that has been or may be suffered
by the Indemnified Party; provided that the failure to so notify any
Indemnifying Party shall not relieve such Indemnifying Party of its obligations
hereunder except to the extent such failure shall have prejudiced such
Indemnifying Party.
 
 
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(b) In the event of any Third-Party Claim, the Indemnifying Party shall have the
right, exercisable by written notice to the Indemnified Party within thirty (30)
days of receipt of a Claims Notice to assume and conduct the defense of the
underlying Third-Party Claim with counsel selected by the Indemnifying Party and
reasonably satisfactory to the Indemnified Party; provided, that the Indemnified
Party may retain separate co-counsel at its sole cost and expense and
participate in the defense of the Third-Party Claim (other than any fees and
expenses of such separate counsel that are incurred prior to the date the
Indemnifying Party effectively assume control of the defense, which,
notwithstanding the foregoing, shall be borne by the Indemnifying Party).
Notwithstanding the foregoing, the Indemnifying Party shall not have the right
to assume control of the defense of any Third-Party Claim and shall pay the
reasonable fees and out-of-pocket expenses of a single counsel retained by all
such Indemnified Parties with respect to such Third-Party Claim if: (i) the
Indemnifying Party does not conduct the defense of the Third-Party Claim with
reasonable diligence; or (ii) the Third-Party Claim seeks non-monetary,
equitable or injunctive relief, (ii) alleges violations of criminal law, or
(iii) includes as the named parties in any such Third-Party Claim both an
Indemnified Party and an Indemnifying Party, and either a defense is available
to an Indemnified Party that is not available to an Indemnifying Party or
applicable ethical guidelines provide that, in either case, it would be
inappropriate to have the same counsel represent both parties. If the
Indemnifying Party has assumed such defense as provided in this Section 5.5(b),
the Indemnifying Party will not be liable for any legal expenses subsequently
incurred by any Indemnified Party in connection with the defense of such claim.
If the Indemnifying Party does not assume the defense of any Third-Party Claim
in accordance with this Section 5.5(b), the Indemnified Party may continue to
defend such claim at the reasonable cost of the Indemnifying Party and the
Indemnifying Party may still participate in, but not control, the defense of
such Third-Party Claim at the Indemnifying Party’s sole cost and expense.

SECTION 5.6.        Settlement.

(a) If the Indemnifying Party does not assume and conduct the defense of the
Third-Party Claim in accordance with Section 5.5(b), or is not entitled to do
so, the Indemnified Party shall not consent to the entry of any judgment or
enter into any settlement with respect to the Third-Party Claim without the
written consent of the Indemnifying Party (such consent not to be unreasonably
withheld or delayed).

(b) If the Indemnifying Party assumes and conducts the defense of the
Third-Party Claim in accordance with Section 5.5(b), the Indemnifying Party
shall not, without the written consent of the Indemnified Party (such consent
not to be unreasonably withheld or delayed), consent to the entry of any
judgment or enter into any settlement with respect to the Third-Party Claim
that: (A) involves any action by the Indemnified Party other than the payment of
money (which is paid in full by the Indemnifying Party), (B) provides for
injunctive or other non-monetary relief against the Indemnified Party, or (C)
does not grant an unconditional release of the Indemnified Party from all
liability with respect to such Third-Party Claim.

(c) In any Third-Party Claim, the party responsible for the defense of such
claim shall, to the extent reasonably requested by the other party, keep such
other party informed as to the status of such claim, including, all settlement
negotiations and offers. The Indemnified Party shall use commercially reasonable
efforts to make available to the Indemnifying Party and its representatives all
books and records of the Indemnified Party relating to such Third-Party Claim
and shall cooperate with the Indemnifying Party in the defense of the
Third-Party Claim, including by making available personnel as witnesses in
connection with any action.
 
 
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SECTION 5.7.    Exclusive Remedy. The provisions for indemnification set forth
in this Article V are the exclusive remedies for damages caused as a result of
breaches of the representations, warranties and covenants contained in this
Agreement, it being understood that the remedies of injunction and specific
performance shall remain available to the parties hereto. In this regard, the
parties hereto waive and relinquish any and all other remedies for damages to
the extent such claim is based upon breaches of the representations, warranties
and covenants contained in this Agreement. Subject to the limitations and
conditions hereinabove set forth, (i) an Indemnifying Party under this Article V
shall not be liable for any duplicative damages, or punitive or exemplary
damages with respect to any indemnity claim; (provided, however, that such
limitation shall not apply to the extent awarded to a third party in a
Third-Party Claim and required to be paid by the Indemnified Party) and (ii)
each Indemnified Party shall be expressly precluded from making any
indemnification claim based on (x) diminution of value, to the extent arising
from special or unique circumstances relating to the Indemnified Party that were
not reasonably foreseeable as of the date of this Agreement, or (y)
consequential damages.

ARTICLE VI

GENERAL PROVISIONS

SECTION 6.1         Notices. All notices, requests, claims, demands and other
communications under this Agreement shall be in writing and shall be deemed
given if delivered personally, sent via facsimile (receipt confirmed), sent by a
nationally recognized overnight courier (providing proof of delivery), or mailed
in the United States by certified or registered mail, postage prepaid, to the
parties at the following addresses (or at such other address for a party as
shall be specified by like notice):

           (a) if to the Company, to:
 
 
Lattice, Inc.
7150 N. Park Drive
Suite 500
Pennsauken, New Jersey 08109
Attention: Joseph Noto, CFO

with copies (which shall not constitute notice hereunder) to:
 
 
Becker Meisel LLC
220 Lake Drive East, Suite 102
Cherry Hill, NJ 08002
Fax No: (856) 779-8716
Attention: Timothy J. Szuhaj, Esq.

(b) if to the Cummings Creek Parties, to:

Cummings Creek Capital, Inc.
8778 Howeth Road
Wittman, MD 21676
Attention: Ralph Alexander, President

with copies (which shall not constitute notice hereunder) to:

Holland & Knight LLP
1600 Tysons Boulevard, Suite 700
McLean, Virginia 22102
Fax No: (703) 720-8610
Attention: Adam J. August, Esq.

 
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SECTION 6.2         Definitions. As used in this Agreement, the following terms
have the respective meanings set forth below.

“Affiliate” means, with respect to any Person, another Person that directly, or
indirectly through one or more intermediaries, controls, is controlled by, or is
under common control with, such first Person, where “control” means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management policies of a Person, whether through the ownership
of voting securities, by contract, as trustee or executor or otherwise;
provided, however, that for the purposes of this Agreement Lattice shall be
deemed not to be an Affiliate of any of the Cummings Creek Parties.

“Alexander Disclosure Schedule” means the Disclosure Schedule prepared by
Alexander and delivered to Lattice prior to the execution of this Agreement.

“CLR Group Disclosure Schedule” means the Disclosure Schedule attached to and
made a part of the Purchase Agreement.

“CLR Material Adverse Effect” means any event, circumstance, change, development
or effect that, individually or in the aggregate with all other events,
circumstances, changes, developments or effects, is materially adverse to the
assets, business, results of operations or condition (financial or otherwise) of
CLR Group and its Subsidiaries, taken as a whole; provided, however, that none
of the following shall be deemed, either alone or in combination, to constitute,
and none of the following shall be taken into account in determining whether
there has been or will be, an “CLR Material Adverse Effect”: any event,
circumstance, change, development or effect to the extent arising out of or
resulting from (A) changes in the market price or trading volume of CLR Shares
(it being understood that the factors giving rise to or contributing to any such
change that are not otherwise excluded from the definition of “CLR Material
Adverse Effect” may be deemed to constitute, or be taken into account in
determining whether there has been or would be reasonably likely to have been,
an CLR Material Adverse Effect), (B) changes in the United States or global
economy or capital, financial, banking, credit or securities markets generally,
(C) any act of war or armed hostilities or the occurrence of acts of terrorism
or sabotage, in each case in the United States, (D) the announcement of this
Agreement or the Transaction, (E) changes in applicable Law or in the
interpretation thereof, (F) changes in GAAP (or in the interpretation thereof)
or accounting principles, practices or policies that CLR Group or its
Subsidiaries are required to adopt or (G) any failure of CLR Group to meet
financial projections or forecasts (it being understood that the factors giving
rise to or contributing to any such failure that are not otherwise excluded from
the definition of “CLR Material Adverse Effect” may be deemed to constitute, or
be taken into account in determining whether there has been or would be
reasonably likely to have been, an CLR Material Adverse Effect); provided,
however, that such matters in the case of clauses (B), (C), (E), and (F) shall
be taken into account in determining whether there has been or will be a “CLR
Material Adverse Effect” to the extent, but only to the extent, of any
disproportionate impact on CLR Group and its Subsidiaries, taken as a whole,
relative to other participants operating in the same industries and the
geographic markets of CLR Group and its Subsidiaries.
 

 
 
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“Contract” means any binding agreement, arrangement, contract, subcontract,
settlement agreement, lease, sublease, instrument, note, option, bond, mortgage,
indenture, trust document, loan or credit agreement, license or sublicense,
whether written or oral.

“Cummings Creek Parties” means Alexander, Cummings Creek and CLR Group
collectively.

“Cummings Creek Parties Disclosure Schedule” means the Disclosure Schedule
prepared by the Cummings Creek Parties and delivered to Lattice prior to the
execution of this Agreement.

“Cummings Creek Parties Permit” means, with respect to any Cummings Creek
Parties, all authorizations, permits, licenses, certificates, easements,
concessions, franchises, variances, exemptions, consents, registrations,
approvals and clearances of all Governmental Authorities and third Persons which
are required for such Cummings Creek Parties to own, lease, and operate its
properties and other assets and to carry on its businesses as they are now being
conducted.

“Exchange Act” means the Securities Exchange Act of 1934.

“Fraud” means, with respect to any Cummings Creek Parties or Lattice, as the
case may be, an actual and intentional fraud with respect to the making of the
representations and warranties in Article II or Article III, as applicable,
provided, that such actual and intentional fraud of (i) a Cummings Creek Parties
shall only be deemed to exist if any of the individuals listed in clause (a) of
the definition of Knowledge had actual knowledge (as opposed to imputed or
constructive knowledge) that the representations and warranties in Article II,
as qualified by the Cummings Creek Parties Disclosure Schedule, were actually
and intentionally breached in any material respect when made or (ii) Lattice
shall only be deemed to exist if any of the individuals listed in clause (b) of
the definition of Knowledge had actual knowledge (as opposed to imputed or
constructive knowledge) that the representations and warranties in Article III,
as qualified by the Company’s SEC Reports, were actually and intentionally
breached in any material respect when made.

“Governmental Authority” means any United States federal, national, state,
foreign, provincial, local or other government or any governmental, regulatory,
administrative or self-regulatory authority, agency, bureau, board, commission,
court, judicial or arbitral body, department, political subdivision, tribunal or
other instrumentality thereof.
 
 
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“Indebtedness” means, with respect to any Person, without duplication, any of
the following: (a) any indebtedness for borrowed money, (b) any obligations
evidenced by bonds, debentures, notes or other similar instruments, (c) any
obligations to pay the deferred purchase price of property or services, except
trade accounts payable and other liabilities that would be reflected as current
liabilities on a balance sheet prepared in accordance with GAAP arising in the
ordinary course of business, (d) any obligations as lessee under capitalized
leases, (e) any indebtedness created or arising under any conditional sale or
other title retention agreement with respect to acquired property, (f) any
reimbursement, payment or similar obligations, contingent or otherwise, under
acceptance credit, letters of credit or similar facilities, (g) interest rate
swap agreements and (h) any binding obligation of such Person (or its
Subsidiaries) to guarantee any of the types of payments described in the
foregoing clauses on behalf of any other Person.

“Knowledge” means (a) with respect to a Cummings Creek Parties, the actual
knowledge of Ralph Alexander and (b) with respect to Lattice, the actual
knowledge of Paul Burgess and Joseph Noto. For the purposes of Section 2.4,
Knowledge with respect to Ralph Alexander will mean actual knowledge after
reasonable inquiry.

“Law” means any statute or law (including common law), constitution, code,
ordinance, rule, treaty or regulation and any Order.

“Liens” means with respect to any asset (including any security), any mortgage,
claim, lien, pledge, charge, security interest, proxy, power of attorney, voting
trust or agreement, or encumbrance of any kind in respect of such asset.

“Order” means any award, injunction, judgment, decree, order, ruling, subpoena,
assessment, writ or verdict or other decision issued, promulgated or entered by
or with any Governmental Authority of competent jurisdiction.

“Organizational Documents” means, with respect to any Person, the certificate of
incorporation and by-laws or similar organizational documents of such Person, as
amended and currently in effect.

“Permitted Liens” means any Liens (a) created by (i) the CLR Stockholder
Documents, (ii) the Organizational Documents of CLR Group, (iii) applicable
state and federal securities Laws or (b) with respect to the representations and
warranties of each Cummings Creek Parties set forth in Section 2.1(a) that are
made as of the date of this Agreement, to secure the credit obligations of the
Cummings Creek Parties or their respective Affiliates.

“Person” means an association, a corporation, an individual, a partnership, a
limited liability company, a trust or any other entity or organization,
including a Governmental Authority.
 
 
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“SEC” means the United States Securities and Exchange Commission.

“Securities Act” means the Securities Act of 1933.

“Subsidiary” means, with respect to any specified Person, (a) a corporation of
which more than fifty percent (50%) of the voting or capital stock is, as of the
time in question, directly or indirectly owned by such Person and (b) any
partnership, joint venture, association, or other entity in which such Person,
directly or indirectly, owns more than fifty percent (50%) of the equity or
economic interest thereof or has the power to elect or direct the election of
more than fifty percent (50%) of the members of the governing body of such
entity.

“Transaction Documents” means this Agreement, including all Schedules and
Exhibits hereto, the Alexander Disclosure Schedule, and the Cummings Creek
Parties Disclosure Schedule.

SECTION 6.3         Terms Defined Elsewhere. The following terms are defined
elsewhere in this Agreement, as indicated below:
 
 
  Term
  Section of this Agreement
  Where Defined
  10-K Report
  3.7
  Action
  3.9
  Agreement
  Preamble
  Alexander Indemnified Parties
  5.3
  Barron Partners 8-K Report
  3.7
  Board of Directors                                
  Recitals
  CCC Shares
  Preamble
  Claim           
  5.4
  Claim Response
  5.4
  Claims Notice                                
  5.4
  Closing
  1.2
  Closing Date
  1.2
  CLR Shares
  Recitals
  CLR Group
  Recitals
  CLR Voting Debt
  2.12(c)
  Company                      
  Preamble
  Company Claims
  5.2
  Company Common Stock
  Recitals
  Company Indemnified Parties
  5.2
  Contributed Shares
  1.1
  Damages
  5.2
  Discussion Time
  2.15
  Exchange Shares
  Recitals
  Fundamental
Representations                                                      
  5.1
  GAAP
  3.8
  Indemnified Party
  5.4
  Indemnifying Party
  5.4
  Intellectual Property Rights
  3.14
  Material Adverse Effect
  3.1(a)
  Material Permits
  3.12
  Response Period
  5.4
  Required Approvals
  3.5
  SEC Reports
  3.8
  Survival Termination Date
  5.1
  Taxes
  3.24
  Tax Returns
  3.24
  Third-Party Claim                                
  5.5
  Transaction                      
  Recitals

 
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SECTION 6.4         Interpretation. Unless otherwise expressly provided, for the
purposes of this Agreement, the following rules of interpretation shall apply:

(a) The article and section headings contained in this Agreement are for
convenience of reference only and shall not affect in any way the meaning or
interpretation hereof.

(b) When a reference is made in this Agreement to an article or a section,
paragraph, exhibit or schedule, such reference shall be to an article or a
section, paragraph, exhibit or schedule hereof unless otherwise clearly
indicated to the contrary.

(c) Whenever the words “include,” “includes” or “including” are used in this
Agreement, they shall be deemed to be followed by the words “without
limitation.”

(d) The words “hereof,” “herein” and “herewith” and words of similar import
shall, unless otherwise stated, be construed to refer to this Agreement as a
whole and not to any particular provision of this Agreement.

(e) The word “extent” in the phrase “to the extent” shall mean the degree to
which a subject or other thing extends, and such phrase shall not mean simply
“if.”

(f) The meaning assigned to each term defined herein shall be equally applicable
to both the singular and the plural forms of such term, and words denoting any
gender shall include all genders. Where a word or phrase is defined herein, each
of its other grammatical forms shall have a corresponding meaning.

(g) A reference to “$,” “U.S. dollars” or “dollars” shall mean the legal tender
of the United States.

(h) A reference to any period of days shall be deemed to be to the relevant
number of calendar days, unless otherwise specified.

(i) All terms defined in this Agreement shall have the defined meanings when
used in any certificate or other document made or delivered pursuant hereto
unless otherwise defined therein.
 
 
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(j) Unless otherwise defined, a reference to any accounting term shall have the
meaning as defined under GAAP.

(k) The parties have participated jointly in the negotiation and drafting of
this Agreement (including the Cummings Creek Parties Disclosure Schedules, and
Exhibits hereto). In the event an ambiguity or question of intent or
interpretation arises, this Agreement shall be construed as if drafted jointly
by the parties, and no presumption or burden of proof shall arise favoring or
disfavoring any party by virtue of the authorship of any provisions hereof.

(l) Any statute defined or referred to herein or in any agreement or instrument
that is referred to herein means such statute as from time to time amended,
modified or supplemented, including by succession of comparable successor
statutes and shall also be deemed to include all rules and regulations
promulgated thereunder, and references to all attachments thereto and
instruments incorporated therein.

SECTION 6.5         Counterparts. This Agreement may be executed in two or more
counterparts, each of which when executed shall be deemed to be an original, and
all of which together will be considered one and the same agreement and shall
become effective when one or more counterparts have been signed by each of the
parties and delivered to the other parties. For purposes of this Agreement,
facsimile signatures or signatures by other electronic form of transfer shall be
deemed originals, and the parties agree to exchange original signatures as
promptly as possible.

SECTION 6.6        Entire Agreement; Third-Party Beneficiaries.  This Agreement
and the other Transaction Documents (including the Confidentiality Agreement and
the documents and instruments referred to herein) constitute the entire
agreement, and supersede all prior agreements and understandings, both written
and oral, among the parties with respect to the subject matter of this Agreement
and this Agreement is not intended to and shall not confer upon any Person other
than the parties hereto any rights or remedies hereunder. Without limiting the
foregoing, the representations and warranties in this Agreement are the product
of negotiations among the parties hereto and are for the sole benefit of the
parties hereto and their successors and permitted assigns. In some instances,
the representations and warranties in this Agreement may represent an allocation
among the parties hereto of risks associated with particular matters regardless
of the knowledge of any of the parties hereto. Consequently, Persons other than
the parties hereto may not rely upon the representations and warranties in this
Agreement as characterizations of actual facts or circumstances as of the date
of this Agreement or as of any other date.

SECTION 6.7        Governing Law.  This Agreement and any claim, controversy or
dispute arising under or related thereto, the relationship of the parties,
and/or the interpretation and enforcement of the rights and duties of the
parties, whether arising in Law or in equity, in contract, tort or otherwise,
shall be governed by, and construed and interpreted in accordance with, the Laws
of the State of Delaware, without regard to its rules regarding conflicts of Law
to the extent that the application of the Laws of another jurisdiction would be
required thereby.
 
 
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SECTION 6.8         Assignment.  Neither this Agreement nor any of the rights,
interests or obligations under this Agreement shall be assigned, in whole or in
part, by operation of Law or otherwise by either of the parties hereto without
the prior written consent of the other party. Any assignment in violation of the
preceding sentence shall be void. Subject to the preceding two sentences, this
Agreement will be binding upon, inure to the benefit of, and be enforceable by,
the parties and their respective successors and assigns.

SECTION 6.9         Consent to Jurisdiction. Each of the parties hereto hereby
irrevocably agrees that any legal action or proceeding with respect to this
Agreement or the Transaction, or for recognition and enforcement of any judgment
in respect of this Agreement, the Transaction and obligations arising hereunder
brought by any other party hereto or its successors or assigns, shall be brought
and determined exclusively in the Delaware Court of Chancery and any state
appellate court therefrom within the State of Delaware (or, if the Delaware
Court of Chancery declines to accept jurisdiction over a particular matter, any
state or federal court within the State of Delaware). Each of the parties hereto
hereby irrevocably submits with regard to any such action or proceeding for
itself and in respect of its property, generally and unconditionally, to the
personal jurisdiction of the aforesaid courts and agrees that it will not bring
any action relating to this Agreement or the Transaction in any court other than
the aforesaid courts. Each of the parties hereto hereby irrevocably waives, and
agrees not to assert, by way of motion, as a defense, counterclaim or otherwise,
in any action or proceeding with respect to this Agreement or the Transaction,
(a) any claim that it is not personally subject to the jurisdiction of the
above-named courts for any reason other than the failure to serve in accordance
with this Section 8.9, (b) any claim that it or its property is exempt or immune
from jurisdiction of any such court or from any legal process commenced in such
courts (whether through service of notice, attachment prior to judgment,
attachment in aid of execution of judgment, execution of judgment or otherwise)
and (c) to the fullest extent permitted by the applicable Law, any claim that
(i) the suit, action or proceeding in such court is brought in an inconvenient
forum, (ii) the venue of such suit, action or proceeding is improper or (iii)
this Agreement or the Transaction or the subject mater hereof, may not be
enforced in or by such courts.

SECTION 6.10        Effect of Disclosure. The disclosure of any matter in the
Alexander Schedule or Cummings Creek Parties Disclosure Schedule shall expressly
not be deemed to constitute an admission by Alexander or Cummings Creek Parties
or Lattice, respectively, or to otherwise imply, that any such matter is
material for the purpose of this Agreement.

SECTION 6.11        Severability. If any term or other provision of this
Agreement is held to be invalid, illegal or incapable of being enforced by any
rule of Law or public policy by a court of competent jurisdiction, all other
conditions and provisions of this Agreement shall nevertheless remain in full
force and effect, insofar as the foregoing can be accomplished without
materially affecting the economic benefits anticipated by the parties to this
Agreement.  Upon such determination that any term or other provision is invalid,
illegal or incapable of being enforced, the parties hereto shall negotiate in
good faith to modify this Agreement so as to effect the original intent of the
parties as closely as possible to the fullest extent permitted by applicable Law
in an acceptable manner to the end that the Transaction is fulfilled to the
extent possible.

 
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SECTION 6.12       Waiver and Amendment; Remedies Cumulative. Subject to
applicable Law, (a) any provision of this Agreement or any inaccuracies in the
representations and warranties of any of the parties or compliance with any of
the agreements or conditions contained in this Agreement may be waived or (b)
the time for the performance of any of the obligations or other acts of the
parties here may be extended at any time prior to Closing. Any agreement on the
part of a party to any such extension or waiver shall be valid only if set forth
in an instrument in writing signed on behalf of the party against whom waiver is
sought; provided, that any extension or waiver given in compliance with this
Section 6.12 or failure to insist on strict compliance with an obligation,
covenant, agreement or condition shall not operate as a waiver of, or estoppel
with respect to, any subsequent or other failure. Subject to applicable Law, any
of the provisions of this Agreement may be amended at any time by the mutual
written agreement of Lattice and the Cummings Creek Parties. No failure or delay
on the part of any party hereto in the exercise of any right hereunder shall
impair such right or be construed to be a waiver of, or acquiescence in, any
breach of any representation, warranty or agreement herein, nor shall any single
or partial exercise of any such right preclude any other or further exercise
thereof or of any other right. All rights and remedies existing under this
Agreement are cumulative to, and not exclusive of, any rights or remedies
otherwise available.

SECTION 6.13       Waiver of Jury Trial.

EACH OF THE CUMMINGS CREEK PARTIES AND LATTICE HEREBY IRREVOC-ABLY WAIVES ALL
RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED
ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR
THE TRANSACTION OR THE ACTIONS OF THE CUMMINGS CREEK PARTIES AND LATTICE IN THE
NEGOTIATION, ADMINISTRATION, PERFORMANCE AND ENFORCEMENT OF THIS AGREEMENT.

SECTION 6.14       Specific Performance.  The parties agree that irreparable
damage would occur and that the Cummings Creek Parties and Lattice may not have
any adequate remedy at Law in the event that any of the provisions of this
Agreement were not performed in accordance with their specific terms or were
otherwise breached by the Cummings Creek Parties or Lattice. It is accordingly
agreed that the Cummings Creek Parties and Lattice shall be entitled to an
injunction or injunctions to prevent breaches and/or threatened breaches of this
Agreement and to enforce specifically the terms and provisions of this Agreement
in any federal court located in the State of Delaware or in Delaware state
court, this being in addition to any other remedy to which they are entitled at
Law or in equity.

 
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SECTION 6.15       Attorneys’ Fees.  The non-prevailing party to any claim that
is finally determined under this Agreement, or any party that voluntarily
dismisses any action against the other (i.e., non-suit), whether with or without
prejudice, commenced under this Agreement will pay its own expenses and the
expenses, including attorneys’ fees and costs, reasonably incurred by the other
party(ies) to such claim.  For purposes of this Section 6.15, in any claim or
litigation hereunder in which any claim or the amount thereof is at issue, the
party seeking indemnification will be deemed to be the non-prevailing party
unless the applicable court of competent jurisdiction awards the party seeking
indemnification more than one half (1/2) of the amount in dispute, plus any
amounts not in dispute; in which case, the Person against whom indemnification
is sought shall be deemed to be the non-prevailing party.

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IN WITNESS WHEREOF, Lattice and the Cummings Creek Capital Inc. and CLR Group
LTD have caused this Agreement to be executed under seal by their respective
officers thereunto duly authorized, all as of the date first written above.
 
 
           LATTICE INCORPORATED
 
 
           By:   /s/ Paul Burgess                        
           Name:  Paul
Burgess                                                      
           Title:    President                      
 
 
           CUMMINGS CREEK CAPITAL INC.
 
 
           By:   /s/ Ralph Alexander                   
           Name:  Ralph Alexander
           Title:    President                                            

 
CLR GROUP LTD
 
 
           By:   /s/ Ralph Alexander                     
           Name:  Ralph
Alexander                                                      
           Title:    President

           RALPH ALEXANDER
           Individually and sole stockholder of Cummings Creek Capital, Inc.

            /s/ Ralph Alexander                          
 
 
 
 
 
 
 
 
[Signature Page to Contribution and Exchange Agreement]

 
 
 
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