EXHIBIT 10.1

                          SECURITIES PURCHASE AGREEMENT

         This Securities  Purchase  Agreement (this  "Agreement") is dated as of
March 15,  2006  among  Catcher  Holdings,  Inc.,  a Delaware  corporation  (the
"Company"),  Emerging Growth Equities,  Ltd., a Pennsylvania limited partnership
(the "Placement  Agent"),  and the purchasers  identified on the signature pages
hereto  (each,   including  its  successors  and  assigns,   a  "Purchaser"  and
collectively the "Purchasers").

         WHEREAS,  subject  to the  terms  and  conditions  set  forth  in  this
Agreement,  the Company  desires to issue and sell to each  Purchaser,  and each
Purchaser,  severally  and not  jointly,  desires to purchase  from the Company,
securities of the Company as more fully described in this Agreement.

         NOW,  THEREFORE,  IN CONSIDERATION of the mutual covenants contained in
this Agreement,  and for other good and valuable  consideration  the receipt and
adequacy of which are hereby acknowledged, the Company and each Purchaser agrees
as follows:

                                    ARTICLE I
                                   DEFINITIONS

         1.1  DEFINITIONS.  In addition to the terms  defined  elsewhere in this
Agreement, the following terms have the meanings indicated in this Section 1.1:

         "Action"  shall  have the  meaning  ascribed  to such  term in  Section
3.1(j).

         "Affiliate" means any Person that,  directly or indirectly  through one
or more intermediaries,  controls or is controlled by or is under common control
with a Person,  as such terms are used in and construed under Rule 144 under the
Securities Act.

         "Closings" means the Initial Closing and each Subsequent Closing.

         "Closing Date" means the date of (i) the Initial Closing; and (ii) each
Subsequent Closing, respectively.

         "Commission" means the Securities and Exchange Commission.

         "Common Stock" means the common stock of the Company,  par value $0.001
per share,  and any securities  into which such common stock may  hereinafter be
converted or exchanged pursuant to a plan of  recapitalization,  reorganization,
merger, sale of assets or otherwise.

          "Company  Counsel"  means  Morrison & Foerster,  LLP, 12531 High Bluff
Drive, Suite 100, San Diego, California 92103.

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          "Disclosure Schedules" shall have the meaning ascribed to such term in
Section 3.1 hereof.

          "Escrow Agreement" means the Escrow Agreement,  dated the date hereof,
among the  Company,  the  Placement  Agent  and the  Escrow  Agent  (as  defined
therein), in the form of EXHIBIT A attached hereto.

          "Exchange Act" means the Securities Exchange Act of 1934, as amended.

          "GAAP" shall have the meaning  ascribed to such term in Section 3.1(h)
hereof.

          "Initial  Closing"  shall have the  meaning  ascribed  to such term in
Section 2.1.

          "Liens" shall have the meaning ascribed to such term in Section 3.1(a)
hereof.

          "Losses"  means  any and all  losses,  claims,  damages,  liabilities,
settlement costs and expenses, including without limitation costs of preparation
and reasonable attorneys' fees.

          "Material Adverse Effect" shall have the meaning assigned to such term
in Section 3.1(b) hereof.

          "Person"  means an  individual  or  corporation,  partnership,  trust,
incorporated or  unincorporated  association,  joint venture,  limited liability
company,  joint stock company,  government (or an agency or subdivision thereof)
or other entity of any kind.

         "Placement Agent" means Emerging Growth Equities,  Ltd., a Pennsylvania
limited  partnership with a principal place of business at Parkview Tower,  1150
First Avenue, Suite 600, King of Prussia, Pennsylvania 19406.

         "Proceeding" means an action, claim, suit,  investigation or proceeding
(including,  without limitation, an investigation or partial proceeding, such as
a deposition), whether commenced or threatened.

         "Purchase Price" means $5.00 per Unit.

         "Registration   Rights   Agreement"  means  the   Registration   Rights
Agreement,  dated the date hereof, among the Company and the Purchasers,  in the
form of EXHIBIT B attached hereto.

         "Registration  Statement"  means a registration  statement  meeting the
requirements  set forth in the  Registration  Rights  Agreement and covering the
resale of the Shares and the Warrant Shares by each Purchaser as provided for in
the Registration Rights Agreement.



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<PAGE>

         "Required  Approvals"  shall have the meaning  ascribed to such term in
Section 3.1(e) hereof.

         "Required  Minimum" means, as of any date, the maximum aggregate number
of shares of Common Stock then issued or potentially issuable in the future upon
exercise or  conversion  in full of all  Warrants,  ignoring any  conversion  or
exercise limits set forth therein.

         "Rule 144" means Rule 144 promulgated by the Commission pursuant to the
Securities  Act, as such Rule may be amended  from time to time,  or any similar
rule or regulation  hereafter adopted by the Commission having substantially the
same effect as such Rule.

         "SEC Reports" shall have the meaning  ascribed to  such term in Section
3.1(h) hereof.

          "Securities"  means the Shares,  the Warrants and the Warrant  Shares.

          "Securities  Act"  means  the  Securities  Act of  1933,  as  amended.

         "Shares" means the shares of  Common Stock issued and sold  pursuant to
this  Agreement,  together  with any shares of Common  Stock issued upon a stock
split,  dividend or other  distribution,  recapitalization or similar event with
respect to the foregoing following the Closing Date.

         "Subscription Amount" means, as to each Purchaser, the aggregate amount
to be paid for Units  purchased  hereunder as specified  below such  Purchaser's
name  on  the  signature  page  of  this  Agreement  and  next  to  the  heading
"Subscription Amount," in United States Dollars.

         "Subsequent  Closing"  shall have the meaning  ascribed to such term in
Section 2.1.

         "Subsidiary"  means any  subsidiary  of the Company as set forth in the
SEC Reports.

         "Trading  Day" means any day during  which the Trading  Market shall be
open for business.

         "Trading Market" means the following  markets or exchanges on which the
Common  Stock may be listed or quoted for trading on the date in  question:  OTC
Bulletin Board,  the American Stock Exchange,  the New York Stock Exchange,  the
Nasdaq National Market or the Nasdaq SmallCap Market.

         "Transaction  Documents"  means this  Agreement,  the  Warrants and the
Registration Rights Agreement.

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<PAGE>

          "Unit"  means two shares of Common Stock and a Warrant to purchase one
share of Common Stock.

          "Warrants" means collectively the Common Stock purchase  warrants,  in
the form of EXHIBIT C delivered to the  Purchasers at each Closing in accordance
with Section 2.2 hereof, which Warrants shall be exercisable immediately and for
a term of 5 years. Each Warrant will have an exercise price equal to $3.50, such
exercise price, and the number of shares for which it is exercisable, subject to
adjustment from time to time as set forth in the form of Warrant.

         "Warrant  Shares"  means  the  shares  of Common  Stock  issuable  upon
exercise of the Warrants.

                                   ARTICLE II
                                PURCHASE AND SALE

         2.1 CLOSINGS.  At each Closing, the Company agrees to issue and sell to
each  Purchaser  participating  at such Closing,  and,  subject to the terms and
conditions contained herein, each such Purchaser severally agrees to purchase an
amount of the Units in the  Subscription  Amount set forth on the signature page
to  this  Agreement.   The  initial  closing  (the  "Initial  Closing")  of  the
transactions  hereunder shall take place at the offices of Company Counsel or at
such other location as the Company and the Placement  Agent shall mutually agree
after the receipt by the Company of subscriptions for Units from Purchasers with
an  aggregate  Purchase  Price  of at  least  $5,000,000  and  after it has been
determined  that all conditions in this Agreement and the Escrow  Agreement have
been met in the sole and absolute  discretion  of the Company and the  Placement
Agent.  Following the Initial Closing,  the Company may, at subsequent  closings
(the "Subsequent Closings" and each a "Subsequent  Closing"),  accept additional
subscriptions  for Units  from  Purchasers  until such time as the  Company  has
issued  Units with an aggregate  Purchase  Price equal to  $15,000,000.  At each
Closing,   in  accordance  with  the  Escrow  Agreement,   funds  equal  to  the
Subscription  Amount of each Purchaser shall be delivered to the Company and the
Company shall deliver to each such Purchaser  his, her or its respective  Shares
and  Warrants  as  provided  herein and the other items set forth in Section 2.2
issuable at such Closing.

         2.2  CONDITIONS  TO  CLOSING.  Each  Closing  shall be  subject  to the
following conditions and deliveries being met on such Closing's Closing Date:

              (a) At or prior to the Closing,  unless otherwise indicated below,
the  Company  shall  deliver  or  cause  to  be  delivered  to  each   Purchaser
participating in such Closing the following:

                  (i) a stock  certificate  evidencing  the Shares  purchased by
such Purchaser, registered in the name of such Purchaser;


                  (ii) a Warrant registered in the name of such Purchaser;



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<PAGE>

                  (iii) the Registration Rights Agreement,  duly executed by the
Company;

                  (iv) this Agreement, duly executed by the Company;

                  (v) at the Initial Closing only, a legal opinion of Company
Counsel, in the form of EXHIBIT D attached hereto; and

                  (vi) at the Initial  Closing  only, a lock-up  letter,  in the
form attached as EXHIBIT E, from each executive officer of the Company.

              (b) At or prior to the Closing,  each Purchaser  participating  in
such  Closing  shall  deliver  or  cause  to be  delivered  to the  Company  the
following:

                  (i) such  Purchaser's  Subscription  Amount in accordance with
the Escrow Agreement;

                  (ii) this Agreement, duly executed by such Purchaser; and

                  (iii) the Registration  Rights Agreement duly executed by such
Purchaser.

              (c) It shall be a condition to the  obligation of the Company,  on
the one hand,  to issue and sell the  Shares and the  Warrants  to be issued and
sold at a Closing,  and of the  Purchasers  participating  in a Closing,  on the
other hand, to purchase such Shares and Warrants,  that all  representations and
warranties  of the other  party(ies)  contained  herein  shall  remain  true and
correct as of the Closing Date of such Closing and all covenants and obligations
of the other party(ies)  shall have been fully performed or otherwise  satisfied
or waived if due on or prior to such date,  including the  conditions to release
the funds held in escrow as set forth in Section 5 of the Escrow Agreement.

                                   ARTICLE III

                         REPRESENTATIONS AND WARRANTIES

         3.1  REPRESENTATIONS AND WARRANTIES OF THE COMPANY.  The Company hereby
makes the representations and warranties set forth below to each Purchaser:

              (a)   SUBSIDIARIES.   The   Company  has  no  direct  or  indirect
Subsidiaries other than as specified in the SEC Reports.  Except as specified in
the SEC Reports,  the Company owns,  directly or indirectly,  all of the capital
stock or other equity  interests of each  Subsidiary free and clear of any lien,
charge,  security  interest,  encumbrance,  right  of  first  refusal  or  other
restriction  (collectively,  "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.

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<PAGE>

              (b)  ORGANIZATION AND  QUALIFICATION.  Each of the Company and 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 power and
authority to own and use its  properties and assets and to carry on its business
as described in its SEC Reports.  Neither the Company nor any  Subsidiary  is in
violation of any of the provisions of its respective  certificate or articles of
incorporation,  bylaws or other organizational or charter documents. Each of the
Company and the  Subsidiaries  is duly  qualified  to do 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,  individually or in the aggregate:  (i)
adversely  affect the legality,  validity or  enforceability  of any Transaction
Document,  (ii) have or result in or be reasonably likely to have or result in a
material  adverse  effect  on the  results  of  operations,  assets,  prospects,
business  or  condition   (financial  or  otherwise)  of  the  Company  and  the
Subsidiaries,  taken as a whole, or (iii) adversely impair the Company's ability
to perform fully on a timely basis its obligations  under any of the Transaction
Documents (any of (i), (ii) or (iii), a "Material Adverse Effect").

              (c)  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 or thereunder.  The execution and delivery of each of the
Transaction  Documents  by  the  Company  and  the  consummation  by it  of  the
transactions  contemplated  hereby or thereby have been duly  authorized  by all
necessary  action on the part of the Company and no further consent or action is
required by the Company other than Required  Approvals.  Each of the Transaction
Documents  has been (or upon delivery will be) duly executed by the Company and,
when delivered in accordance  with the terms hereof,  will  constitute the valid
and  binding  obligation  of the  Company  enforceable  against  the  Company in
accordance  with  its  terms,  subject  to  applicable  bankruptcy,  insolvency,
fraudulent  conveyance,  reorganization,  moratorium  and similar laws affecting
creditors'  rights and  remedies  generally  and general  principles  of equity.
Neither the Company nor any  Subsidiary is in violation of any of the provisions
of its  respective  certificate  or articles of  incorporation,  bylaws or other
organizational  or charter  documents  except  where such  violation  could not,
individually or in the aggregate, constitute a Material Adverse Effect.

              (d) NO CONFLICTS.  The execution,  delivery and performance of the
Transaction  Documents by the Company and the consummation by the Company of the
transactions  contemplated  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)  subject  to  obtaining  the  Required  Approvals,  conflict  with,  or
constitute  a default  (or an event  that  with  notice or lapse of time or both
would  become a default)  under,  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



                                      -6-
<PAGE>

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) 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,  individually  or in the  aggregate,  have or result in a Material
Adverse Effect.

              (e) FILINGS,  CONSENTS AND APPROVALS.  Neither the Company nor any
Subsidiary is 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 (i) the filing  with the  Commission  of the
Registration  Statement and the consent of the  Commission to the  effectiveness
thereof, (ii) the notice and/or application(s) to each applicable Trading Market
for the  issuance of the  Warrants  and the  listing of the  Warrant  Shares for
trading  thereon  in the time  and  manner  required  thereby  and any  required
approvals of such Trading  Market  thereof,  (iii) the filing of Form D with the
Commission  and  applicable  Blue Sky  filings  and (iv)  the  filings  required
pursuant to Section 4.3 hereunder (collectively, the "Required Approvals").

              (f) ISSUANCE OF THE SHARES AND  WARRANTS.  The Shares and Warrants
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 non-assessable, free and clear of all Liens. Any Warrant Shares, when issued
and paid for in accordance with the warrant certificate, will be duly authorized
and validly issued,  fully paid and nonassessable,  free and clear of all Liens.
The Company has  reserved  from its duly  authorized  capital  stock a number of
shares of Common Stock for issuance of the Warrant  Shares at least equal to the
Required  Minimum on the date hereof.  The Company has not, and to the knowledge
of the  Company,  no  Affiliate  of the  Company  has sold,  offered for sale or
solicited  offers to buy or otherwise  negotiated in respect of any security (as
defined in Section 2 of the  Securities  Act) that would be integrated  with the
offer or sale of the Shares in a manner  that  would  require  the  registration
under the  Securities Act of the sale of the Shares to the  Purchasers,  or that
would be  integrated  with the offer or sale of the Shares for  purposes  of the
rules and regulations of any Trading Market.

              (g)  CAPITALIZATION.   The  number  of  shares  and  type  of  all
authorized,  issued and outstanding  capital stock of the Company as of February
28,  2006,  and all  shares of Common  Stock  reserved  for  issuance  under the
Company's  various  option and  incentive  plans as of February 28, 2006, is set
forth on SCHEDULE 3.1(g) of the Disclosure  Schedules attached hereto. 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 contemplated  hereby and as set forth on SCHEDULE  3.1(g),
there are no outstanding options, warrants, script rights to subscribe to,



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<PAGE>

calls or  commitments  of any character  whatsoever  relating to, or securities,
rights or obligations convertible into 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
securities or rights  convertible or  exchangeable  into shares of Common Stock.
The  issuance  and sale of the Shares and Warrant  Shares will not  obligate the
Company to issue shares of Common Stock or other securities to any Person (other
than the  Purchasers)  and will not  result in a right of any  holder of Company
securities  to adjust the  exercise,  conversion,  exchange or reset price under
such securities.  Except as set forth on SCHEDULE 3.1(g), 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;
provided that this sentence  shall be limited to the  Company's  knowledge  with
respect to any shares of the  Company's  capital  stock  issued  prior to May 4,
2005. 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
Shares.  Except as  disclosed  in the SEC  Reports,  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.  Except as set
forth on SCHEDULE 3.1(g) and as contemplated by the Transaction  Documents,  the
Company has not granted any  registration  or similar rights with respect to any
security of the Company requiring the Company to register such securities of the
Company.

              (h)  SEC  REPORTS;  FINANCIAL  STATEMENTS.   Except  as  otherwise
disclosed in the SEC Reports,  the Company has filed all reports  required to be
filed by it under the Exchange Act, including pursuant to Section 13(a) or 15(d)
thereof,  preceding  the date hereof (or such shorter  period as the Company was
required  by  law  to  file  such  material)  (the  foregoing   materials  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.  All SEC Reports filed
within the 10 days  preceding  the date hereof have been made  available  to the
Purchasers.  The SEC Reports  filed since May 4, 2005  complied in all  material
respects with the  requirements  of the  Securities Act and the Exchange Act and
the rules and regulations of the Commission promulgated thereunder,  and none of
the SEC  Reports  filed  since May 4, 2005,  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 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 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 fairly  present in all material  respects the financial
position of the Company and its consolidated



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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 year-end audit adjustments.

              (i)  MATERIAL  CHANGES.  Since  the  date  of the  latest  audited
financial  statements  included  within the SEC Reports,  except as specifically
disclosed  in the SEC  Reports:  (i)  there  has been no  event,  occurrence  or
development that has had or that could result in a Material Adverse Effect, (ii)
the Company has not incurred any  liabilities  (contingent  or otherwise)  other
than (A) trade payables and accrued expenses  incurred in the ordinary course of
business  consistent  with past practice and (B)  liabilities not required to be
reflected in the Company's financial  statements pursuant to GAAP or required to
be  disclosed  in filings  made with the  Commission,  (iii) the Company has not
altered  its method of  accounting  or the  identity of its  auditors,  (iv) the
Company has not declared or made any dividend or  distribution  of cash or other
property to its  stockholders  or purchased,  redeemed or made any agreements to
purchase or redeem any shares of its capital stock,  and (v) the Company has not
issued any equity  securities  to any  officer,  director or  Affiliate,  except
pursuant to existing Company stock option or similar plans.

              (j)  LITIGATION.  There is no  action,  suit,  inquiry,  notice of
violation,  proceeding  or  investigation  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) except as disclosed in the SEC
Reports,   adversely   affects  or   challenges   the   legality,   validity  or
enforceability of any of the Transaction  Documents or the Shares or (ii) could,
if there were an unfavorable decision, individually or in the aggregate, have or
reasonably  be  expected  to result in a Material  Adverse  Effect.  Neither the
Company nor any Subsidiary,  nor, to 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.  Except for the request for confidential  treatment
of information  submitted to the Commission on October 4, 2005 and  subsequently
amended on November 29, 2005 and  December  13, 2005,  the Company does not have
pending  before  the  Commission  any  request  for  confidential  treatment  of
information.  There has not been, and to the knowledge of the Company,  there is
not pending or contemplated,  any investigation by the Commission  involving the
Company  or any  current or former  director  or  officer  of the  Company.  The
Commission  has not  issued  any  stop  order  or  other  order  suspending  the
effectiveness  of  any  registration  statement  filed  by  the  Company  or any
Subsidiary under the Exchange Act or the Securities Act.

              (k) COMPLIANCE.  Neither the Company nor any Subsidiary: (i) is in
default  under or in violation  of (and no event has occurred  that has not been
waived that, with notice or lapse of time or both,  would result in a default by
the Company or any  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



                                      -9-
<PAGE>

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) is or has been in violation of any statute,  rule or  regulation of any
governmental authority, except in each case as could not, individually or in the
aggregate, have or result in a Material Adverse Effect.

              (l) 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.

              (m) REGULATORY  PERMITS.  Except as otherwise described in the SEC
Reports,   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,
except where the failure to possess such permits could not,  individually  or in
the  aggregate,  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.

              (n) TITLE TO ASSETS.  The Company and the  Subsidiaries  have good
and  marketable  title in fee simple to all real property  owned by them that is
material  to the  business  of the  Company  and the  Subsidiaries  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.  Any real  property  and
facilities held under lease by the Company and the  Subsidiaries  are held under
valid,   subsisting  and  enforceable  leases  of  which  the  Company  and  the
Subsidiaries are in compliance.

              (o) 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, copyrights, licenses and other 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 written notice
that the  Intellectual  Property  Rights used by the  Company or any  Subsidiary
violates or  infringes  upon the rights of any Person.  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.

              (p)  INSURANCE.  The Company and the  Subsidiaries  are insured by
insurers of recognized  financial  responsibility  against such losses and risks
and in such  amounts  as are  prudent  and  customary  for  companies  similarly
situated  with the  Company  in the  businesses  in which  the  Company  and the
Subsidiaries are engaged. To



                                      -10-
<PAGE>

the Company's knowledge,  such insurance contracts and policies are accurate and
complete.  Neither the Company nor any  Subsidiary  has any reason to believe 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.

              (q) TRANSACTIONS WITH AFFILIATES AND EMPLOYEES. Except as required
to be set forth in the SEC  Reports,  none of the  officers or  directors of the
Company  and, to the  knowledge  of the  Company,  none of the  employees of the
Company  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.

              (r) CERTAIN  FEES.  Except for the  Company's  agreement  with the
Placement Agent,  the Company has not engaged or retained any broker,  financial
advisor or consultant, finder, placement agent, investment banker, bank or other
Person  and has not  agreed to pay any  commissions  or other fees to any of the
same with respect to the transactions contemplated by this Agreement.

              (s)   PRIVATE   PLACEMENT.    Assuming   the   accuracy   of   the
representations   and  warranties  of  the  Purchasers  set  forth  in  Sections
3.2(b)-(f),  the offer,  issuance  and sale of the Shares  and  Warrants  to the
Purchasers as contemplated hereby are exempt from the registration  requirements
of the Securities  Act and do not  contravene  the rules and  regulations of the
Trading Market.

              (t) LISTING AND  MAINTENANCE  REQUIREMENTS.  The Company's  Common
Stock is  registered  pursuant to Section  12(g) of the  Exchange  Act,  and the
Company has taken no action  designed to, or which to its knowledge is likely to
have the effect of,  terminating the  registration of the Common Stock under the
Exchange Act nor has the Company received any  notification  that the Commission
is  contemplating  terminating such  registration.  The Company has not received
notice from any Trading  Market on which the Common  Stock is or has been listed
or quoted to the effect that the Company is not in  compliance  with the listing
or maintenance  requirements of such Trading Market.  The Company is, and has no
reason to believe that it will not in the foreseeable  future continue to be, in
compliance with all such listing and maintenance requirements.

              (u) TAX STATUS.  The Company and each of its Subsidiaries has made
or filed  all  federal,  state and  foreign  income  and all other tax  returns,
reports and  declarations  required by any  jurisdiction  to which it is subject
(unless and only to the extent that the Company and each of its Subsidiaries has
set aside on its books  provisions  reasonably  adequate  for the payment of all
unpaid  and  unreported  taxes)  and has paid all taxes  and other  governmental
assessments and charges that are material in amount,



                                      -11-
<PAGE>

shown or determined to be due on such returns, reports and declarations,  except
those being  contested  in good faith and has set aside on its books  provisions
reasonably  adequate for the payment of all taxes for periods  subsequent to the
periods  to which such  returns,  reports or  declarations  apply.  There are no
unpaid taxes in any material amount claimed to be due by the taxing authority of
any jurisdiction,  and the officers of the Company know of no basis for any such
claim.  The  Company has not  executed a waiver  with  respect to the statute of
limitations  relating to the  assessment or collection of any foreign,  federal,
statue or local  tax.  None of the  Company's  tax  returns is  presently  being
audited by any taxing authority.

              (v) NO  GENERAL  SOLICITATION  OR  ADVERTISING  IN  REGARD TO THIS
TRANSACTION.  Neither the Company nor, to the  knowledge of the Company,  any of
its  directors  or  officers  (i) has  conducted  or will  conduct  any  general
solicitation  (as that term is used in Rule 502(c) of  Regulation  D) or general
advertising with respect to the sale and issuance of the Shares or the Warrants,
or (ii) made any offers or sales of any security or solicited  any offers to buy
any security  under any  circumstances  that would require  registration  of the
Shares,  the Warrant Shares or the Warrants under the Securities Act or made any
"directed selling efforts" as defined in Rule 902 of Regulation S.

              (w) FOREIGN  CORRUPT  PRACTICES.  Neither the Company,  nor to the
knowledge  of the  Company,  any agent or other  person  acting on behalf of the
Company,  has (i) directly or  indirectly,  used any corrupt  funds for unlawful
contributions,  gifts,  entertainment  or other  unlawful  expenses  related  to
foreign  or  domestic  political  activity,  (ii) made any  unlawful  payment to
foreign or  domestic  government  officials  or  employees  or to any foreign or
domestic  political  parties or campaigns from corporate funds,  (iii) failed to
disclose  fully any  contribution  made by the  Company  (or made by any  person
acting on its behalf of which the  Company is aware)  which is in  violation  of
law, or (iv)  violated in any  material  respect  any  provision  of the Foreign
Corrupt Practices Act of 1977, as amended.

              (x) SARBANES-OXLEY. The Company is in material compliance with all
provisions of the  Sarbanes-Oxley  Act of 2002 which are  applicable to it as of
each Closing Date, and the rules and regulations promulgated thereunder.

              (y)  INVESTMENT  COMPANY.  The  Company  is  not,  and  is  not an
Affiliate  of, and  immediately  after  receipt  of  payment  for the Shares and
Warrants,  will not be or be an Affiliate of an "investment  company" within the
meaning of the Investment Company Act of 1940, as amended.

              (z)  NO  INTEGRATED   OFFERING.   Assuming  the  accuracy  of  the
Purchasers' representations and warranties set forth in Section 3.2, 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 the  Securities to be  integrated  with prior  offerings by the
Company  for  purposes  of the  Securities  Act or  any  applicable  shareholder
approval provisions, including, without limitation, under the rules and



                                      -12-
<PAGE>

regulations  of any exchange or automated  quotation  system on which any of the
securities of the Company are listed or designated.

         3.2  REPRESENTATIONS  AND WARRANTIES OF THE PURCHASERS.  Each Purchaser
hereby,  for itself and for no other Purchaser,  represents and  warrants to the
Company as follows:

              (a)   ORGANIZATION;   AUTHORITY.   If  the  Purchaser  is  not  an
individual, such Purchaser is an entity duly organized,  validly existing and in
good standing under the laws of the  jurisdiction of its  organization  with the
requisite  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  thereunder.  If the Purchaser is not an
individual, the purchase by such Purchaser of the Shares hereunder has been duly
authorized by all necessary  action on the part of such Purchaser.  Each of this
Agreement and the  Registration  Rights Agreement has been duly executed by such
Purchaser if the  Purchaser  is not an  individual,  and when  delivered by such
Purchaser in accordance  with the terms hereof,  will  constitute  the valid and
legally  binding  obligation  of  such  Purchaser,  enforceable  against  it  in
accordance  with its terms  except  (i) as  limited  by  applicable  bankruptcy,
insolvency,  reorganization,  moratorium  and other laws of general  application
affecting enforcement of creditors' rights generally and (ii) as limited by laws
relating to the availability of specific performance, injunctive relief or other
equitable remedies.

              (b) INVESTMENT INTENT.  Such Purchaser is acquiring the Securities
as principal for its own account and not with a view to or for  distributing  or
reselling such Securities or any part thereof,  without prejudice,  however,  to
such  Purchaser's  right,  subject to the provisions of this  Agreement,  at all
times  to sell  or  otherwise  dispose  of all or any  part  of such  Securities
pursuant to an effective  registration  statement  under the  Securities  Act or
under an exemption  from such  registration  and in compliance  with  applicable
federal and state  securities laws.  Nothing  contained herein shall be deemed a
representation  or warranty by such Purchaser to hold  Securities for any period
of time or limit such Purchaser's  right to sell the Securities  pursuant to the
Registration  Statement or otherwise in compliance with  applicable  federal and
state securities  laws. Such Purchaser is acquiring the Securities  hereunder in
the ordinary course of its business.  Such Purchaser does not have any agreement
or understanding,  directly or indirectly,  with any Person to distribute any of
the Securities.

              (c) PURCHASER  STATUS.  At the time such Purchaser was offered the
Securities, it was, and at the date hereof it is, and currently anticipates that
on each date on which it  exercises  any  Warrants  it will be,  an  "accredited
investor" as defined in Rule 501(a) under the  Securities  Act. If the Purchaser
is not an individual,  such Purchaser has not been formed solely for the purpose
of acquiring the  Securities.  Such Purchaser is not a registered  broker-dealer
under  Section 15 of the  Exchange  Act.  Each  Purchaser  has  delivered to the
Company a complete and accurate  Purchaser  Questionnaire,  the form of which is
attached hereto as EXHIBIT F.



                                      -13-
<PAGE>

              (d) EXPERIENCE OF SUCH PURCHASER. Such Purchaser,  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 Securities, and has so
evaluated  the merits and risks of such  investment.  Such  Purchaser is able to
bear the economic risk of an investment  in the  Securities  and, at the present
time, is able to afford a complete loss of such investment.

              (e) GENERAL  SOLICITATION.  Such  Purchaser is not  purchasing the
Securities  as  a  result  of  any  advertisement,   article,  notice  or  other
communication  regarding the Securities published in any newspaper,  magazine or
similar media or broadcast over  television or radio or presented at any seminar
or any other general solicitation or general advertisement.

              (f)  SEC  REPORTS.  Such  Purchaser  has  read  and  reviewed  the
Company's  SEC Reports and has had the  opportunity  to ask questions of Company
representatives  regarding the contents of such SEC Reports.  Each Purchaser has
relied on the SEC Reports in  conjunction  with its  investment  decision-making
process.

              (g)  ADDITIONAL  DISCLOSURE.  Such Purchaser has read and reviewed
the Executive Summary attached hereto as EXHIBIT G, the risk factors relating to
the  Company and this  offering  attached  hereto as EXHIBIT H, the  information
contained  under the  heading  "Additional  Considerations"  attached  hereto as
EXHIBIT  I,  and the  Company's  most  recent  filing  on Form  10-QSB  with the
Commission for the quarter ended September 30, 2005,  attached hereto as EXHIBIT
J.  Each  Purchaser  has  had  the  opportunity  to  ask  questions  of  Company
representatives regarding the contents of such materials.

              (h) CERTAIN FEES.  Such  Purchaser has not engaged or retained any
broker,  financial advisor or consultant,  finder,  placement agent,  investment
banker,  bank or other Person and has not agreed to pay any commissions or other
fees to any of the same with respect to the  transactions  contemplated  by this
Agreement.

                                   ARTICLE IV
                         OTHER AGREEMENTS OF THE PARTIES

         4.1 TRANSFER RESTRICTIONS.

              (a) The  Securities  may only be  disposed of in  compliance  with
state and federal securities laws. In connection with any transfer of Securities
other than pursuant to an effective  registration  statement or Rule 144, to the
Company or in a non-sale transaction to an Affiliate of a Purchaser, 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



                                      -14-
<PAGE>

reasonably  satisfactory  to the Company,  to the effect that such transfer does
not require  registration of such  transferred  Securities  under the Securities
Act.

              (b) Each  Purchaser,  severally  and not  jointly  with the  other
Purchasers,  agrees to the  imprinting,  so long as is required by this  Section
4.1(b), of the following legend on any certificate evidencing Securities:

THESE  SECURITIES  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  REASONABLY  ACCEPTABLE  TO THE  COMPANY  TO  SUCH  EFFECT,  THE
SUBSTANCE  OF  WHICH  SHALL  BE  REASONABLY  ACCEPTABLE  TO THE  COMPANY.  THESE
SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER
LOAN SECURED BY SUCH SECURITIES.

         The Company  acknowledges  and agrees that a Purchaser may from time to
time  pledge  pursuant  to a bona  fide  margin  agreement  or grant a  security
interest in some or all of the Securities to a financial  institution that is an
"accredited investor" as defined in Rule 501(a) under the Securities Act and, if
required  under the  terms of such  arrangement,  such  Purchaser  may  transfer
pledged or secured Securities to the pledgees or secured parties. Such pledge or
transfer would not be subject to approval of the Company and no legal opinion of
legal  counsel of the  pledgee,  secured  party or pledgor  shall be required in
connection  therewith.  Further,  no notice shall be required of such pledge. At
the appropriate  Purchaser's  expense, the Company will execute and deliver such
reasonable  documentation  as a  pledgee  or  secured  party of  Securities  may
reasonably  request in connection  with a pledge or transfer of the  Securities,
including the preparation and filing of any required prospectus supplement under
Rule  424(b)(3)  of the  Securities  Act or other  applicable  provision  of the
Securities  Act  to  appropriately  amend  the  list  of  Selling   Stockholders
thereunder.

              (c) The Company  agrees that following such time as such legend is
no longer  required,  it will,  no later than ten  Trading  Days  following  the
delivery by a  Purchaser  to the Company or the  Company's  transfer  agent of a
certificate  representing  the Shares,  or the Warrant  Shares,  as  applicable,
issued with a restrictive  legend (such third  Trading Day, the "Legend  Removal
Date"), together with all necessary documentation relating to the legend removal
request,  deliver  or cause to be  delivered  to such  Purchaser  a  certificate
representing  such shares that is free from all  restrictive  and other legends.
The Company may not make any notation on its records or give



                                      -15-
<PAGE>

instructions to any transfer agent of the Company that enlarge the  restrictions
on transfer set forth in this Section.

         4.2 EXERCISE PROCEDURES. The form of Notice of Exercise included in the
Warrants set forth the totality of the procedures  required of the Purchasers in
order to exercise the Warrants. No additional legal opinion or other information
or instructions  shall be required of the Purchasers to exercise their Warrants.
The Company  shall honor  exercises of the Warrants  and shall  deliver  Warrant
Shares in accordance  with the terms,  conditions  and time periods set forth in
the Transaction Documents.

         4.3 SECURITIES LAWS  DISCLOSURE;  PUBLICITY.  The Company shall issue a
press release or file a Current Report on Form 8-K reasonably  acceptable to the
Placement Agent disclosing all material terms of the  transactions  contemplated
hereby.  The Company and the  Placement  Agent shall  consult with each other in
issuing any press release with respect to the transactions  contemplated hereby,
and the  Placement  Agent  shall  have the right to review  and  comment  on the
contents  of any  such  press  release  prior  to its  release  by the  Company.
Notwithstanding the foregoing,  the Company shall be entitled to make any filing
and press  release  that it  determines  is required in order to comply with any
applicable law.  Notwithstanding  the foregoing,  other than in any registration
statement  filed  pursuant  to the  Registration  Rights  Agreement  and filings
related  thereto,  the  Company  shall  not  publicly  disclose  the name of any
Purchaser,  or  include  the  name  of any  Purchaser  in any  filing  with  the
Commission or any regulatory agency or Trading Market, without the prior written
consent of such  Purchaser,  except to the extent such disclosure is required by
law or Trading Market regulations,  in which case the Company shall provide each
Purchaser with prior notice of such disclosure.

         4.4 USE OF PROCEEDS.  The Company  shall use the net proceeds  from the
sale of the Shares hereunder as set forth in EXHIBIT F.

         4.5 CONFIDENTIALITY. Each Purchaser agrees that he, she or it will keep
confidential and will not disclose, divulge or use for any purpose other than to
monitor his, her or its investment in the Company any confidential,  proprietary
or secret  information which such Purchaser may obtain from the Company pursuant
to financial statements, reports and other materials submitted by the Company to
such  Purchaser  pursuant to this  Agreement or otherwise (but not including the
SEC Reports) ("Confidential Information"),  unless such Confidential Information
is known, or until such  Confidential  Information  becomes known, to the public
(other  than as a result of a breach  of this  Section  4.5 by such  Purchaser);
PROVIDED, HOWEVER, that a Purchaser may disclose Confidential Information (i) to
his, her or its attorneys, accountants,  consultants, and other professionals to
the extent necessary to obtain their services in connection with monitoring his,
her or its  investment  in the Company,  or (ii) as may otherwise be required by
law,  provided that the Purchaser takes  reasonable steps to minimize the extent
of any such required disclosure.

         4.6 PLACEMENT  AGENT.  In  consideration  for services  rendered by the
Placement  Agent in  placing  the  Units,  the  Company  has  agreed  to pay the
Placement Agent on each



                                      -16-
<PAGE>

Closing  Date a cash  payment  equal  to eight  percent  (8%)  (the  "Commission
Percentage")  of the  gross  proceeds  from the sale of the  Units at each  such
Closing sold pursuant to this  Agreement and to issue to the Placement  Agent on
the last Closing  Date a warrant,  exercisable  for (a) shares of the  Company's
Common Stock in an amount equal to the Commission Percentage of the total number
of Shares  issued  pursuant  to this  Agreement  and (b) a Warrant,  in the form
attached  as  EXHIBIT C (the  same  Warrant  being  received  by the  Purchasers
pursuant to Section 2.2 hereof)  exercisable for shares of the Company's  Common
Stock in an amount  equal to the  Commission  Percentage  of the total number of
Shares issued pursuant to this Agreement; provided, however, that the Commission
Percentage  will  automatically  be reduced to four percent (4%) with respect to
the  consideration  to be paid to the  Placement  Agent arising from the sale of
Units to the investors specified on Schedule 4.6 hereto. The Company has further
agreed to pay the  Placement  Agent a cash payment  equal to two percent (2%) of
the gross  proceeds  received by the Company  from the  exercise of the Warrants
issued pursuant to this Agreement.

         4.7  FURNISHING  OF   INFORMATION.   As  long  as  any  Purchaser  owns
Securities,  the  Company  covenants  to timely  file (or obtain  extensions  in
respect  thereof  and file  within the  applicable  grace  period)  all  reports
required  to be filed by the  Company  after  the date  hereof  pursuant  to the
Exchange Act.

                                    ARTICLE V
                                  MISCELLANEOUS

         5.1 FEES AND EXPENSES.  The parties shall be responsible  for their own
legal and other expenses, if any, in connection with this transaction.

         5.2 ENTIRE  AGREEMENT.  The  Transaction  Documents,  together with the
exhibits and schedules thereto,  contain the entire understanding of the parties
with respect to the subject matter hereof and supersede all prior agreements and
understandings, oral or written, with respect to such matters, which the parties
acknowledge have been merged into such documents, exhibits and schedules.

         5.3 NOTICES.  Any and all notices or other communications or deliveries
required or permitted to be provided  hereunder shall be in writing and shall be
deemed given and effective on the earliest of (a) the date of  transmission,  if
such notice or  communication  is delivered via facsimile or electronic  mail at
the facsimile  number or the electronic mail address  specified on the signature
page attached hereto prior to 5:30 p.m.  Eastern time on a Trading Day and, with
respect to a notice  delivered  via  facsimile,  an electronic  confirmation  of
delivery is received by the sender,  (b) the next  Trading Day after the date of
transmission,  if such notice or  communication  is delivered  via  facsimile or
electronic mail at the facsimile number or electronic mail address  specified in
this Section on a day that is not a Trading Day or later than 5:30 p.m.  Eastern
time on any Trading Day, (c) the next Trading Day following the date of mailing,
if sent by U.S.  nationally  recognized  overnight courier service,  or (d) upon
actual receipt by the party to



                                      -17-
<PAGE>

whom such notice is required to be given.  The  addresses  for such  notices and
communications  are those set forth on the signature pages hereof, or such other
address as may be designated in writing  hereafter,  in the same manner, by such
Person.

         5.4 AMENDMENTS;  WAIVERS.  No provision of this Agreement may be waived
or  amended  except  in a  written  instrument  signed  by the  Company  and the
Purchasers  holding,  together,  a Majority  of the Shares  and  Warrant  Shares
(assuming  for such  purpose  the  exercise  or  conversion  of all  outstanding
Warrants  into  Warrant  Shares).  No waiver of any default  with respect to any
provision,  condition or requirement  of this Agreement  shall be deemed to be a
continuing  waiver  in the  future or a waiver of any  subsequent  default  or a
waiver of any other provision,  condition or requirement  hereof,  nor shall any
delay or omission of either party to exercise any right  hereunder in any manner
impair the exercise of any such right.

         5.5 CONSTRUCTION.  The headings herein are for convenience only, do not
constitute a part of this  Agreement  and shall not be deemed to limit or affect
any of the provisions hereof. The language used in this Agreement will be deemed
to be the language chosen by the parties to express their mutual intent,  and no
rules of strict construction will be applied against any party.

         5.6  SUCCESSORS AND ASSIGNS.  This Agreement  shall be binding upon and
inure to the benefit of the parties and their successors and permitted  assigns.
The Company may not assign this Agreement or any rights or obligations hereunder
without the prior written  consent of the  Purchasers.  Any Purchaser may assign
its rights under this  Agreement and the  Registration  Rights  Agreement to any
Person to whom such  Purchaser  assigns or transfers  any  Securities as long as
such Purchaser provides prompt notice to the Company.

         5.7 NO  THIRD-PARTY  BENEFICIARIES.  This Agreement is intended for the
benefit of the parties  hereto and their  respective  successors  and  permitted
assigns and is not for the benefit of, nor may any provision  hereof be enforced
by, any other Person.

         5.8  GOVERNING  LAW;  VENUE;   WAIVER  OF  JURY  TRIAL.  All  questions
concerning the  construction,  validity,  enforcement and  interpretation of the
Transaction  Documents  shall be  governed  by and  construed  and  enforced  in
accordance  with the internal laws of the State of Delaware,  without  regard to
the  principles  of conflicts  of law thereof.  Each party agrees that all legal
proceedings  concerning  the  interpretations,  enforcement  and  defense of the
transactions  contemplated by this Agreement and any other Transaction Documents
(whether brought against a party hereto or its respective affiliates, directors,
officers,  shareholders,  employees or agents) shall be commenced exclusively in
the state and  federal  courts  sitting  in the City of  Wilmington.  Each party
hereby  irrevocably  submits  to the  exclusive  jurisdiction  of the  state and
federal courts sitting in the City of Wilmington,  County of New Castle, for the
adjudication  of any dispute  hereunder  or in  connection  herewith or with any
transaction  contemplated  hereby or discussed herein (including with respect to
the enforcement of any of the  Transaction  Documents),  and hereby  irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any



                                      -18-
<PAGE>

claim that it is not personally  subject to the  jurisdiction of any such court,
that such suit, action or proceeding is improper or inconvenient  venue for such
proceeding. Each party hereby irrevocably waives personal service of process and
consents  to process  being  served in any such suit,  action or  proceeding  by
mailing a copy thereof via  registered or certified  mail or overnight  delivery
(with  evidence of  delivery) to such party at the address in effect for notices
to it under this  Agreement and agrees that such service shall  constitute  good
and sufficient  service of process and notice thereof.  Nothing contained herein
shall be  deemed to limit in any way any right to serve  process  in any  manner
permitted  by law. The parties  hereby  waive all rights to a trial by jury.  If
either party shall commence an action or proceeding to enforce any provisions of
the  Transaction  Documents,  then  the  prevailing  party  in  such  action  or
proceeding  shall be reimbursed by the other party for its  attorneys'  fees and
other  costs and  expenses  incurred  with the  investigation,  preparation  and
prosecution of such action or proceeding.

         5.9  SURVIVAL. The  representations  and  warranties  contained  herein
shall survive for a period of two years following the Closing.

         5.10  EXECUTION.  This  Agreement  may  be  executed  in  two  or  more
counterparts,  all of which when taken  together shall be considered one and the
same agreement and shall become effective when  counterparts have been signed by
each party and  delivered  to the other  party,  it being  understood  that both
parties need not sign the same  counterpart.  In the event that any signature is
delivered by facsimile  transmission,  such  signature  shall create a valid and
binding  obligation of the party executing (or on whose behalf such signature is
executed)  such  document  with the same force and  effect as if such  facsimile
signature page were an original thereof.

         5.11  SEVERABILITY.  If any  provision of this  Agreement is held to be
invalid or unenforceable in any respect,  the validity and enforceability of the
remaining  terms  and  provisions  of  this  Agreement  shall  not in any way be
affected or impaired  thereby and the parties will attempt to agree upon a valid
and enforceable provision that is a reasonable substitute therefore, and upon so
agreeing, shall incorporate such substitute provision in this Agreement.

         5.12  REPLACEMENT  OF  SECURITIES.  If any  certificate  or  instrument
evidencing any Securities is mutilated,  lost, stolen or destroyed,  the Company
shall  issue or cause to be issued in  exchange  and  substitution  for and upon
cancellation thereof, or in lieu of and substitution therefor, a new certificate
or instrument,  but only upon receipt of evidence reasonably satisfactory to the
Company  of such  loss,  theft  or  destruction  and  customary  and  reasonable
indemnity, if requested.

         5.13  INDEPENDENT  NATURE OF PURCHASERS'  OBLIGATIONS  AND RIGHTS.  The
obligations of each Purchaser under any Transaction Document are several and not
joint with the  obligations of any other  Purchaser,  and no Purchaser  shall be
responsible  in any way for the  performance  of the  obligations  of any  other
Purchaser under any Transaction  Document.  Nothing  contained  herein or in any
Transaction  Document,  and no action taken by any Purchaser  pursuant  thereto,
shall be deemed to constitute the Purchasers as a



                                      -19-
<PAGE>

partnership,  an  association,  a joint venture or any other kind of entity,  or
create a presumption  that the Purchasers are in any way acting in concert or as
a group with respect to such obligations or the transactions contemplated by the
Transaction Documents. Each Purchaser shall be entitled to independently protect
and enforce its rights, including without limitation,  the rights arising out of
this Agreement or out of the other  Transaction  Documents,  and it shall not be
necessary  for any other  Purchaser to be joined as an  additional  party in any
proceeding  for such purpose.  Each  Purchaser has been  represented  by its own
separate  legal  counsel in their  review  and  negotiation  of the  Transaction
Documents. The Company has elected to provide all Purchasers with the same terms
and Transaction  Documents for the convenience of the Company and not because it
was required or requested to do so by the Purchasers.

                            (Signature Pages Follow)



                                      -20-
<PAGE>

         IN WITNESS WHEREOF, the parties hereto have caused this Securities
Purchase Agreement to be duly executed by their respective authorized
signatories as of the date first indicated above.

CATCHER HOLDINGS, INC.                         Address for Notice:

By:___________________________                 5864 Owens Avenue
   Name:                                       Suite 101
   Title:                                      Carlsbad, CA 92008
                                               Phone: (760) 804-1600
                                               Fax: (760) 804-1626
                                               e-mail: jgilford@catcherinc.com

With a copy to (which shall not constitute notice):

Jeremy D. Glaser, Esq.
Morrison & Foerster, LLP
12531 High Bluff Drive
Suite 100
San Diego, CA 92130
Phone: (858) 720-5103
Fax: (858) 523-2822
e-mail: jglaser@mofo.com

PLACEMENT AGENT

EMERGING GROWTH EQUITIES, LTD.                 Address for Notice:

By:___________________________                 Parkview Tower
   Name:                                       1150 First Ave., Suite 600
   Title:                                      King of Prussia, PA 19406
                                               Attn:  Gregory J. Berlacher
                                               Phone: (610) 783-4760
                                               Fax: (610) 783-4761
                                               e-mail: gberlacher@egequities.com




                                      -21-
<PAGE>


 [PURCHASER SIGNATURE PAGES TO SECURITIES PURCHASE AGREEMENT]

IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

Name of Investing Entity or Individual:_________________________________________

Signature of Authorized Signatory of Investing Entity: _________________________

Name of Authorized Signatory if not an Individual:______________________________

Title of Authorized Signatory if not an Individual______________________________

Email Address of Authorized Entity or Individual:_______________________________

Address for Notice of Investing Entity or Individual:




Address for Delivery of Securities for Investing Entity or Individual (if not
same as above):

Subscription Amount:
Shares:
Warrant Shares:

EIN or SSN Number: [PROVIDE THIS UNDER SEPARATE COVER]

                           [SIGNATURE PAGES CONTINUE]



                                      -22-
<PAGE>

                                    EXHIBIT A
                                ESCROW AGREEMENT



                                      - 1 -


<PAGE>

                                    EXHIBIT B
                          REGISTRATION RIGHTS AGREEMENT





                                      - 1 -
<PAGE>

                                    EXHIBIT C
                                 FORM OF WARRANT





                                      - 1 -

<PAGE>
                                    EXHIBIT D
                        LEGAL OPINION OF COMPANY COUNSEL





                                      - 1 -

<PAGE>
                                    EXHIBIT E
                            FORM OF LOCK-UP AGREEMENT





                                      - 1 -
<PAGE>

                                    EXHIBIT F
                             PURCHASER QUESTIONNAIRE

         THE PURCHASER  REPRESENTS  AND WARRANTS THAT HE, SHE OR IT COMES WITHIN
ONE CATEGORY MARKED BELOW, AND THAT FOR ANY CATEGORY  MARKED,  HE, SHE OR IT HAS
TRUTHFULLY  SET  FORTH,  WHERE  APPLICABLE,  THE  FACTUAL  BASIS OR  REASON  THE
PURCHASER  COMES  WITHIN  THAT  CATEGORY.  ALL  INFORMATION  IN RESPONSE TO THIS
SECTION WILL BE KEPT STRICTLY  CONFIDENTIAL.  THE UNDERSIGNED  AGREES TO FURNISH
ANY ADDITIONAL  INFORMATION WHICH THE COMPANY DEEMS NECESSARY IN ORDER TO VERIFY
THE ANSWERS SET FORTH BELOW.

Category A __     The   undersigned   is  an  individual   (not  a  partnership,
                  corporation,  etc.) whose  individual net worth,  or joint net
                  worth with his or her spouse, presently exceeds $1,000,000.

                  Explanation:  In calculating  net worth you may include equity
                  in personal property and real estate, including your principal
                  residence, cash, short-term investments, stock and securities.
                  Equity in personal property and real estate should be based on
                  the fair market  value of such  property  less debt secured by
                  such property.

Category B __     The   undersigned   is  an  individual   (not  a  partnership,
                  corporation,  etc.) who had an income in excess of $200,000 in
                  each of the two most recent years, or joint income with his or
                  her spouse in excess of  $300,000  in each of those  years (in
                  each case including foreign income, tax exempt income and full
                  amount of capital gains and losses but excluding any income of
                  other family members and any unrealized capital  appreciation)
                  and has a reasonable  expectation  of reaching the same income
                  level in the current year.

Category C __     The  undersigned  is a director  or  executive  officer of the
                  Company which is issuing and selling the Securities.

Category D __     The  undersigned  is a bank;  a savings and loan  association;
                  insurance registered  investment company;  registered business
                  development  company;  led small business  investment  company
                  ("SBIC");  or employee  benefit plan the meaning of Title 1 of
                  ERISA  and  (a)  the  investment  decision  is  made by a plan
                  fiduciary   which  is   either  a  bank,   savings   and  loan
                  association,   insurance  company  or  registered   investment
                  advisor,  or (b) the  plan  has  total  assets  in  excess  of
                  $5,000,000  or (c) is a self  directed  plan  with  investment
                  decisions  to be made  solely by persons  that are  accredited
                  investors, describe (entity)

Category E __     The undersigned is a private business  development  company as
                  defined in section  202(a)(22) of the Investment  Advisors Act
                  of 1940. (describe entity)

Category F __     The   undersigned  is  either  a   corporation,   partnership,
                  Massachusetts  business  trust,  or  non-profit   organization
                  within  the  meaning  of  Section  501(c)(3)  of the  Internal
                  Revenue Code, in each case not formed for the specific purpose
                  of acquiring  the Common Stock and with total assets in excess
                  of $5,000,000. (describe entity)



                                      -1-
<PAGE>

Category G__      The  undersigned  is a trust  with  total  assets in excess of
                  $5,000,000,  not formed for the specific  purpose of acquiring
                  the   Securities,   where  the   purchase  is  directed  by  a
                  "sophisticated    investor"    as   defined   in    Regulation
                  506(b)(2)(ii) under the Act.

Category H__      The undersigned is an entity (other than a trust) in which all
                  of the equity owners are "accredited  investors" within one or
                  more of the above  categories.  If relying upon this  Category
                  alone, each equity owner must complete a separate copy of this
                  Agreement. (describe entity)

Category I __     The undersigned is not within any of the categories  above and
                  is therefore not an accredited investor.

                  The undersigned  agrees that the  undersigned  will notify the
                  Company  at any time on or prior to the  Closing  in the event
                  that the  representations  and  warranties  in this  Agreement
                  shall cease to be true, accurate and complete.

SUITABILITY  (please answer each question)


(a)      For an individual  Purchaser,  please describe your current employment,
         including  the  company  by which you are  employed  and its  principal
         business:

(b)      For an individual  Purchaser,  please  describe any college or graduate
         degrees held by you:

(c)      For all Purchasers, please list types of prior investments:

(d)      For all Purchasers, please state whether you have participated in other
         PRIVATE PLACEMENTS before:

                               YES                        NO


(e)      If your  answer  to  question  (d)  above was  "YES",  please  indicate
         frequency of such prior participation in PRIVATE PLACEMENTS of:

         Public              Private            Public or Private VoIP or other
         Companies           Companies          Communications Companies

     Frequently
     Occasionally
     Never

(f)      For individual  Purchasers,  do you expect your current level of income
         to significantly decrease in the foreseeable future:

                               YES                         NO



                                      -2-
<PAGE>

(g)      For trust, corporate,  partnership and other institutional  Purchasers,
         do you  expect  your  total  assets to  significantly  decrease  in the
         foreseeable future:

                               YES                         NO

(h)      For all  Purchasers,  do you have any other  investments  or contingent
         liabilities  which you  reasonably  anticipate  could cause you to need
         sudden cash requirements in excess of cash readily available to you:

                               YES                         NO

(i)      For all  Purchasers,  are you  familiar  with the risk  aspects and the
         non-liquidity  of investments such as the securities for which you seek
         to subscribe?

                               YES                         NO

(j)      For all  Purchasers,  do you  understand  that there is no guarantee of
         financial return on this investment and that you run the risk of losing
         your entire investment?

                               YES                         NO

MANNER IN WHICH TITLE IS TO BE HELD, (circle one)

           (a)  Individual Ownership
           (b)  Community Property
           (c)  Joint Tenant with Right of Survivorship (both parties must sign)
           (d)  Partnership*
           (e)  Tenants in Common
           (f)  Company*
           (g)  Trust*
           (h)  Other*

           *If Securities are being subscribed for by an entity,  the attached
            Certificate of Signatory must also be completed.

NASD AFFILIATION.

Are you affiliated or associated with an NASD member firm (please check one):

                               YES                         NO

If Yes, please describe:

*If Purchaser is a Registered  Representative with an NASD member firm, have the
following acknowledgment signed by the appropriate party:



                                      -3-
<PAGE>

The undersigned NASD member firm acknowledges  receipt of the notice required by
Article 3, Sections 28(a) and (b) of the Rules of Fair Practice.

Name of NASD Member Firm

By:________________________________________
Authorized Officer

Date:_____________________________________

The above information is true, complete and accurate in all material respects
and the undersigned recognizes that the Company is relying on the truth,
completeness and accuracy of such information in determining whether the
offering of the Shares meets the requirements for the exemption from
registration contained in Section 4(2) of the U.S. Securities Act of 1933, as
amended, and/or Regulation D promulgated by the Securities and Exchange
Commission, and similar exemptions under applicable state securities laws or the
applicable laws of other relevant jurisdictions.

The undersigned agrees to notify the Company promptly of any material changes in
the foregoing information or any event resulting in the omission of any
statement required to be made herein that occurs prior to the acceptance of the
subscription to which this Questionnaire relates.

Executed at ___________________________________, on _____________________, 2006.

                                           _____________________________________

                                           Print Name: _________________________





                                      -4-
<PAGE>

                                    EXHIBIT G
                                EXECUTIVE SUMMARY





                                      - 1 -

<PAGE>
                                    EXHIBIT H
                                  RISK FACTORS





                                      - 1 -

<PAGE>
                                    EXHIBIT I
                            ADDITIONAL CONSIDERATIONS


                                      - 1 -

<PAGE>


                                    EXHIBIT J
                FORM 10-QSB FOR QUARTER ENDING SEPTEMBER 30, 2005