ex10-1.htm


    Exhibit
10.1



     

    EXECUTION
VERSION

     

     

    


    


     

    SECURITIES
PURCHASE AGREEMENT

     

    by
and between

     

    DELTATHREE,
INC.

     

    and

     

    D4
HOLDINGS, LLC

     

    February
10, 2009

     

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      TABLE OF CONTENTS

    

     

    
      
        
          
            	
                    1.

                  	
                    DEFINITIONS

                  	
                    2

                  
	
                    2.

                  	
                    PURCHASE AND SALE; CLOSING; OTHER AGREEMENTS

                  	
                    5

                  
	
                    2.1

                  	
                    Purchase and Sale

                  	
                    5

                  
	
                    2.2

                  	
                    Closing

                  	
                    5

                  
	
                    3.

                  	
                    REPRESENTATIONS AND WARRANTIES OF THE
COMPANY

                  	
                    5

                  
	
                    3.1

                  	
                    Incorporation

                  	
                    5

                  
	
                    3.2

                  	
                    Capitalization

                  	
                    5

                  
	
                    3.3

                  	
                    Registration Rights

                  	
                    5

                  
	
                    3.4

                  	
                    Authorization; Enforcement

                  	
                    5

                  
	
                    3.5

                  	
                    Valid Issuance of the Shares

                  	
                    5

                  
	
                    3.6

                  	
                    Financial Statements

                  	
                    5

                  
	
                    3.7

                  	
                    SEC Documents

                  	
                    6

                  
	
                    3.8

                  	
                    Consents

                  	
                    6

                  
	
                    3.9

                  	
                    No Conflict; Compliance With Laws

                  	
                    6

                  
	
                    3.10

                  	
                    Brokers or Finders

                  	
                    6

                  
	
                    3.11

                  	
                    Over-The-Counter-Bulletin Board

                  	
                    6

                  
	
                    3.12

                  	
                    Absence of Litigation

                  	
                    6

                  
	
                    3.13

                  	
                    No Undisclosed Liabilities; Indebtedness

                  	
                    6

                  
	
                    3.14

                  	
                    Property

                  	
                    7

                  
	
                    3.15

                  	
                    Labor Relations

                  	
                    7

                  
	
                    3.16

                  	
                    Intellectual Property

                  	
                    7

                  
	
                    3.17

                  	
                    Subsidiaries; Joint Ventures

                  	
                    8

                  
	
                    3.18

                  	
                    Compliance with Regulatory Requirements

                  	
                    8

                  
	
                    3.19

                  	
                    Taxes

                  	
                    8

                  
	
                    3.20

                  	
                    Pensions and Benefits

                  	
                    8

                  
	
                    3.21

                  	
                    Private Placement

                  	
                    9

                  
	
                    3.22

                  	
                    Material Changes

                  	
                    9

                  
	
                    3.23

                  	
                    Transactions with Affiliates and
Employees

                  	
                    9

                  
	
                    3.24

                  	
                    Insurance

                  	
                    9

                  
	
                    3.25

                  	
                    Internal Accounting Controls

                  	
                    9

                  
	
                    3.26

                  	
                    Environmental

                  	
                    10

                  
	
                    3.27

                  	
                    Foreign Corrupt Practices

                  	
                    10

                  
	
                    3.28

                  	
                    Board Composition

                  	
                    10

                  
	
                    3.29

                  	
                    Disclosure

                  	
                    10

                  
	
                    3.30

                  	
                    Sole Representations and Warranties

                  	
                    10

                  
	
                    4.

                  	
                    REPRESENTATIONS AND WARRANTIES OF THE
    PURCHASER

                  	
                    10

                  


             

             

             

             

             

             

             

             

             

             

             

             

             

             

             

             

             

             

             

             

             

             

             

             

             

             

             

             

             

             

             

             

             

             

             

             

             

             

             

            
              
                
                

              

              
                
                

                
                  

                

              

              
                
                

              

            

             

             

            	
                    4.1

                  	
                    Authorization

                  	
                    10

                  
	
                    4.2

                  	
                    Purchase Entirely for Own Account

                  	
                    10

                  
	
                    4.3

                  	
                    Investor Status

                  	
                    10

                  
	
                    4.4

                  	
                    Disclosure of Information

                  	
                    10

                  
	
                    4.5

                  	
                    Securities Not Registered

                  	
                    10

                  
	
                    4.6

                  	
                    No Conflict

                  	
                    10

                  
	
                    4.7

                  	
                    Brokers or Finders

                  	
                    11

                  
	
                    4.8

                  	
                    Consents

                  	
                    11

                  
	
                    4.9

                  	
                    Absence of Litigation

                  	
                    11

                  
	
                    4.10

                  	
                    Capitalization

                  	
                    11

                  
	
                    5.

                  	
                    CONDITIONS PRECEDENT

                  	
                    11

                  
	
                    5.1

                  	
                    Conditions to the Obligation of the Purchaser to Consummate
      the Closing

                  	
                    11

                  
	
                    5.2

                  	
                    Conditions to the Obligation of the Company to Consummate the
      Closing

                  	
                    12

                  
	
                    6.

                  	
                    CERTAIN COVENANTS AND AGREEMENTS.

                  	
                    12

                  
	
                    6.1

                  	
                    Transfer of Shares

                  	
                    12

                  
	
                    6.2

                  	
                    Legends

                  	
                    12

                  
	
                    6.3

                  	
                    Publicity

                  	
                    13

                  
	
                    6.4

                  	
                    Filing of Information

                  	
                    13

                  
	
                    6.5

                  	
                    Use of Proceeds

                  	
                    13

                  
	
                    6.6

                  	
                    No Integration

                  	
                    13

                  
	
                    6.7

                  	
                    Reservation of Common Stock for Issuance

                  	
                    13

                  
	
                    6.8

                  	
                    Filings

                  	
                    13

                  
	
                    6.9

                  	
                    Board

                  	
                    13

                  
	
                    6.10

                  	
                    Blue Sky Compliance

                  	
                    13

                  
	
                    6.11

                  	
                    No General Solicitation or Directed Selling
      Efforts

                  	
                    13

                  
	
                    6.12

                  	
                    No Stabilization

                  	
                    13

                  
	
                    6.13

                  	
                    Exclusivity

                  	
                    14

                  
	
                    6.14

                  	
                    Conduct of Business of the Company

                  	
                    14

                  
	
                    6.15

                  	
                    Increase in Authorized Stock

                  	
                    14

                  
	
                    6.16

                  	
                    Access to Information

                  	
                    14

                  
	
                    7.

                  	
                    INDEMNIFICATION

                  	
                    15

                  
	
                    7.1

                  	
                    By the Company

                  	
                    15

                  
	
                    7.2

                  	
                    By the Purchaser

                  	
                    15

                  
	
                    7.3

                  	
                    Claims

                  	
                    15

                  
	
                    7.4

                  	
                    Payment of Claims

                  	
                    15

                  
	
                    7.5

                  	
                    Limitations

                  	
                    15

                  
	
                    7.6

                  	
                    Applicability; Exclusivity

                  	
                    15

                  


             

             

             

             

             

             

             

             

             

             

             

             

             

             

             

             

             

             

             

             

             

             

             

             

             

             

             

             

             

             

             

             

             

             

             

             

             

             

             

             

            
              
                
                

              

              
                
                

                
                  

                

              

              
                
                

              

            

             

             

             

            	
                    8.

                  	
                    MISCELLANEOUS PROVISIONS

                  	
                    16

                  
	
                    8.1

                  	
                    Rights Cumulative

                  	
                    16

                  
	
                    8.2

                  	
                    Pronouns

                  	
                    16

                  
	
                    8.3

                  	
                    Notices

                  	
                    16

                  
	
                    8.4

                  	
                    Captions

                  	
                    17

                  
	
                    8.5

                  	
                    Severability

                  	
                    17

                  
	
                    8.6

                  	
                    Governing Law

                  	
                    17

                  
	
                    8.7

                  	
                    Waiver

                  	
                    17

                  
	
                    8.8

                  	
                    Expenses

                  	
                    17

                  
	
                    8.9

                  	
                    Assignment

                  	
                    17

                  
	
                    8.10

                  	
                    Survival

                  	
                    17

                  
	
                    8.11

                  	
                    Entire Agreement

                  	
                    17

                  
	
                    8.12

                  	
                    Amendments

                  	
                    17

                  
	
                    8.13

                  	
                    No Third Party Rights

                  	
                    17

                  
	
                    8.14

                  	
                    Counterparts

                  	
                    17

                  
	
                    8.15

                  	
                    Service of Process

                  	
                    17

                  
	
                    8.16

                  	
                    Further Assurances

                  	
                    17

                  
	
                    8.17

                  	
                    Waiver of Trial by Jury

                  	
                    17

                  
	
                    9.

                  	
                    TERMINATION

                  	
                    18

                  


          

        

      

      


    

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    
 

     

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
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              DELTATHREE,
      INC.

            


    

     

    SECURITIES
PURCHASE AGREEMENT

     

    This
SECURITIES PURCHASE AGREEMENT (this “Agreement”) is dated
as of February 10, 2009, and is by and between (i) deltathree, Inc., a Delaware
corporation, with its principal office at 419 Lafayette Street, New York, New
York 10003 (the “Company”) and (ii) D4
Holdings, LLC, a Delaware limited liability company (the “Purchaser”).

     

    WHEREAS,
the Company desires to issue and sell to the Purchaser, and the Purchaser
desires to purchase from the Company, (i) an aggregate of 39,000,000 shares (the
“Shares”) of
the authorized but unissued shares of Class A common stock, $0.001 par value per
share, of the Company (the “Common Stock”), and
(ii) a warrant to purchase up to 30,000,000 shares of Common Stock, upon the
terms and subject to the conditions set forth in this Agreement;
and

     

    WHEREAS,
the Company and the Purchaser are executing and delivering this Agreement in
reliance upon the exemption from securities registration afforded by the
provisions of Regulation D (“Regulation D”), as promulgated
by the U.S. Securities and Exchange Commission under the Securities Act of 1933,
as amended.

     

    NOW,
THEREFORE, in consideration of the mutual agreements, representations,
warranties and covenants herein contained, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:

     

    1. Definitions.  As used in this Agreement, the
following terms shall have the following respective meanings:

     

    (a) “Action” has the
meaning set forth in Section 3.12.

     

    (b) “Affiliate” means any
Person that, directly or indirectly, through one or more intermediaries,
controls, is controlled by, or is under common control with, a Person, as such
terms are used and construed under Rule 144 (as defined below).

     

    (c) “Agreement” has the
meaning set forth in the preamble hereof.

     

    (d) “Alternative
Transaction” has the meaning set forth in Section 6.13.

     

    (e) “Balance Sheet Date”
means September 30, 2008.

     

    (f) “Board” means the
board of directors of the Company.

     

    (g) “Bylaws” means the
Amended and Restated Bylaws of the Company, as amended.

     

    (h) “Certificate
Amendment” means that certain amendment to the Certificate of
Incorporation to increase the amount of authorized Common Stock to an amount
sufficient to issue all of the Warrant Shares pursuant to the
Warrant.

     

    (i) “Certificate of
Incorporation” means the Amended and Restated Certificate of
Incorporation of the Company, as amended.

     

    (j) “Closing” has the
meaning set forth in Section 2.2.

     

    (k) “Closing Date” has the
meaning set forth in Section 2.2.

     

    (l) “Common Stock” has the
meaning set forth in the recitals to this Agreement.

     

    (m) “Company” has the
meaning set forth in the preamble of this Agreement.

     

    
      
        
        

      

      
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    (n) “Company
Plan”
means each “employee benefit plan” within the meaning of Section 3(3) of
the United States Employee Retirement Income Security Act of 1974, as amended
(“ERISA”),
including, without limitation, multiemployer plans within the meaning of Section
3(37) of ERISA, and all retirement, profit sharing, stock option, stock bonus,
stock purchase, severance, fringe benefit, deferred compensation, and other
employee benefit programs, plans, or arrangements, whether or not subject to
ERISA, under which (i) any current or former directors, officers, employees or
consultants of the Company has any present or
future right to benefits and which are contributed to, sponsored by or
maintained by the Company or either of the Subsidiaries, or (ii) the Company or
either of the Subsidiaries has any present or future
liability.

     

    (o) “Effective Date” means
the date on which the Registration Statement covering the resale of the Shares
is initially declared effective by the SEC.

     

    (p) “Exchange Act” means
the Securities Exchange Act of 1934, as amended, and all of the rules and
regulations promulgated thereunder.

     

    (q) “Financial Statements”
means the financial statements of the Company included in the SEC
Documents.

     

    (r) “Fundamental
Representations” means the representations and warranties contained in
Sections 3.1, 3.2, 3.4 and 3.5.

     

    (s) “Governmental
Authorizations” has the meaning set forth in Section 3.18.

     

    (t) “Indemnified Party”
means the party entitled to indemnification under Section 7.

     

    (u) “Indemnifying Party”
means the party obligated to provide indemnification under Section
7.

     

    (v) “Intellectual
Property” means all intellectual property, including but not limited to
(A) inventions (whether patentable or unpatentable and whether or not reduced to
practice), ideas, research and techniques, technical designs, discoveries and
specifications, improvements, modifications, adaptations, and derivations
thereto, models, and industrial designs, (B) marks, logos, trade dress, brand
names and trade names, assumed names, corporate names and other indications of
origin (whether registered or unregistered), (C) works of authorship, (D) trade
secrets, know-how and confidential business information, (E) software, (F)
Internet domain names, (G) customer lists, and (H) documentation related to any
of the foregoing, and includes all Intellectual Property Rights in and to the
foregoing. “Intellectual Property
Rights” means (i) patents, patent applications, and patent disclosures,
together with reissuances, continuations, continuations-in-part, revisions,
extensions and reexaminations thereof (the “Patents”), (ii)
trademarks, service marks, trade name rights and similar rights, (iii) rights
associated with works of authorship, including copyrights (whether registered or
unregistered and any applications for registration therefor, including any
modifications, extensions, or renewals thereof) and moral rights, (iv) trade
secrets, know-how and confidential business information and rights in any
jurisdiction to limit the use or disclosure thereof by any Person, and (v)
publicity rights.

     

    (w) “Investor Rights
Agreement” means that certain Investor Rights Agreement, the form of
which is attached hereto as Exhibit A, to be
entered into by and between the Company and the Purchaser as of the Closing
Date, pursuant to which the Company, among other things, shall register for
resale the Shares and the Warrant Shares on the terms set forth
therein.

     

    (x) “Israel Subsidiary”
means deltathree, Ltd., a company incorporated under the laws of
Israel.

     

    (y) “knowledge” (when
referring to the Company) means the actual knowledge of Efraim Baruch, Richard
Grant or Peter Friedman, after reasonable inquiry of such Persons with
administrative or operational responsibility for such facts or matters in
question; provided, however, that if no such reasonable inquiry is made, then
the foregoing individuals will be deemed to have actual knowledge of those facts
or matters that such individuals would have had if such a reasonable inquiry had
been made.

     

    (z) “Material Adverse
Effect” means (a) a material adverse effect on the legality, validity or
enforceability of this Agreement or any of the other Transaction Documents and
the transactions contemplated hereby and thereby, (b) a material adverse
effect on the assets, liabilities (contingent or otherwise), business, affairs,
operations, or condition (financial or otherwise) of the Company and the
Subsidiaries, taken as a whole, or (c) a material adverse effect on the
Company’s ability to perform in any material respect on a timely basis its
obligations under this Agreement or any of the other Transaction Documents and
the transactions contemplated hereby and thereby, except to the extent that any
such material adverse effect arises out of, results from or is primarily
attributable to (i) changes in conditions in the United States or global economy
(except to the extent such changes affect the Company and the Subsidiaries,
taken as a whole, in a materially disproportionate manner as compared to other
Persons or participants in the industries in which the Company and the
Subsidiaries conduct their business) and (ii) the negotiation, execution,
announcement or consummation of this Agreement and the transactions contemplated
hereby.

     

    (aa) “Notice Period” has
the meaning set forth in Section 9(a)(iii).

     

    (bb) “OTCBB” means the
over-the-counter bulletin board.

     

    
      
        
        

      

      
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    (cc) “Person” (whether or
not capitalized) means an individual, entity, partnership, limited liability
company, corporation, association, trust, joint venture, unincorporated
organization or any other form of entity not specifically listed herein, and any
government, governmental department or agency or political subdivision
thereof.

     

    (dd) “Purchase Price” has
the meaning set forth in Section 2.1.

     

    (ee) “Purchaser” has the
meaning set forth in the preamble of this Agreement.

     

    (ff) “Registration
Statement” means any registration statement required to be filed by the
Company under the Securities Act pursuant to the terms of the Investor Rights
Agreement.

     

    (gg) “Regulation D” has the
meaning set forth in the recitals to this Agreement.

     

    (hh) “Rule 144” means Rule 144
promulgated under the Securities Act and any successor or substitute rule, law
or provision.

     

    (ii) “SEC” means the
Securities and Exchange Commission.

     

    (jj) “SEC Documents” means
the Company’s annual report filed on Form 10-K for the year ended December 31,
2007, and all reports required to be filed by the Company under the Exchange Act
since March 31, 2008.

     

    (kk) “Securities” means the
Shares, the Warrant, and the Warrant Shares.

     

    (ll) “Securities Act” means
the Securities Act of 1933, as amended, and all of the rules and regulations
promulgated thereunder.

     

    (mm) “Shares” has the
meaning set forth in the recitals to this Agreement.

     

    (nn) “Subsidiaries” means,
collectively, the Israel Subsidiary and the U.S. Subsidiary.

     

    (oo) “Superior Proposal”
has the meaning set forth in Section 6.13.

     

    (pp) “Transfer Agent
Instructions” means irrevocable instructions given in writing by the
Company to the Company’s transfer agent to issue an original stock certificate
to the Purchaser for the Shares.

     

    (qq) “Transaction
Documents” means, collectively, this Agreement, the Investor Rights
Agreement, the Warrant, and any other documents or agreements executed in
connection with the transactions contemplated by this Agreement.

     

    (rr) “U.S. Subsidiary”
means DME Solutions, Inc., a corporation incorporated under the laws of the
State of New York.

     

    (ss) “Warrant” means that
certain Warrant to purchase up to 30,000,000 shares of Common Stock, the form of
which is attached hereto as Exhibit B, to be
issued by the Company to the Purchaser as of the Closing Date.

     

    (tt) “Warrant Shares” means
the shares of Common Stock issuable upon exercise of the Warrant.

     

     

    
      
        
        

      

      
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    2. Purchase and Sale; Closing;
Other Agreements.

     

    2.1. Purchase and
Sale.  Subject to and upon the terms and conditions set forth
in this Agreement, the Company agrees to issue and sell to the Purchaser, and
the Purchaser hereby agrees to purchase from the Company, at the Closing, the
Shares and the Warrant for an aggregate purchase price of $1,170,000 (the “Purchase
Price”).  

     

    2.2. Closing.  The
closing of the transactions contemplated under this Agreement (the “Closing”) shall take
place as soon as possible and within three (3) business days after the
satisfaction or waiver of the conditions set forth in Section 5 below (unless
agreed to otherwise by the Company and the Purchaser), at the offices of Bingham
McCutchen LLP, 2020 K Street, NW, Washington, D.C., 20006, at 10:00 a.m., or
such other location and time agreed to by the parties hereto.  At the
Closing, (a) the Company shall deliver to the Purchaser an original stock
certificate, registered in the Purchaser’s name, representing the Shares, (b)
the Company shall deliver to the Purchaser the executed Warrant, and (c) the
Purchaser shall deliver to the Company payment of the Purchase Price by wire
transfer of immediately available funds to such account as set forth on Schedule
2.2.  The date on which the Closing actually occurs is the
“Closing Date”.

     

    3. Representations and
Warranties of the Company.  Except as disclosed in the SEC
Documents (other than disclosures in any “risk factors” sections thereof), the
Company hereby represents and warrants to the Purchaser, as of the date of this
Agreement and as of the Closing Date, as follows:

     

    3.1. Incorporation.  Each
of the Company and the Subsidiaries is a corporation or other entity duly
organized, validly existing and in good standing under the laws of the State of
Delaware (or such other applicable jurisdiction of incorporation or formation),
and is in good standing as a foreign corporation or other entity in each
jurisdiction in which the nature of the business conducted or the character of
the 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, would not
result in a Material Adverse Effect.  Each of the Company and the
Subsidiaries has all requisite corporate power and authority to carry on its
business as now conducted and to carry out the transactions contemplated hereby
and in the other Transaction Documents.  Neither the Company nor
either of the Subsidiaries is in violation of any of the provisions of its
certificate of incorporation (or other similar corporate formation or
organization document) or bylaws (or other similar corporate governance
document).

     

    3.2. Capitalization.  The
authorized capital stock of the Company consists of (a) 75,000,000 shares of
Common Stock, of which 32,870,105 shares are outstanding as of the date of this
Agreement, (b) 1,000 shares of Class B common stock, par value $0.001 per share,
of which there are no shares outstanding as of the date of this Agreement, and
(c) 25,000,000 shares of preferred stock, par value $0.001 per share, of which
there are no shares outstanding as of the date of this Agreement.  An
aggregate of 6,261,891 shares of the Company’s capital stock are issuable and
reserved for issuance pursuant to option plans or securities (other than
outstanding shares of Common Stock) exercisable for, or convertible into or
exchangeable for, shares of capital stock of the Company as
follows:  (i) stock options to purchase 2,029,015 shares of the Common
Stock have been issued under existing approved stock plans and 304,000
restricted shares and restricted units have been granted and (ii) 3,928,876
shares are reserved for future issuance under existing approved stock
plans.  All shares of the Company’s issued and outstanding capital
stock have been duly authorized, are validly issued and outstanding, and are
fully paid and non-assessable and were issued in full compliance with applicable
state and federal securities laws and, to the knowledge of the Company, rights
of third parties.  Except as set forth on Schedule 3.2, there
are no existing options, warrants, calls, preemptive (or similar) rights,
subscriptions or other rights, agreements, arrangements or commitments of any
character obligating the Company to issue, transfer or sell, or cause to be
issued, transferred or sold, any shares of the capital stock of the Company or
other equity interests in the Company or any securities convertible into or
exchangeable for such shares of capital stock or other equity interests,
excluding the Shares to be issued to the Purchaser as contemplated by this
Agreement and the Warrant Shares, and there are no outstanding contractual
obligations of the Company to repurchase, redeem or otherwise acquire any shares
of its capital stock or other securities or equity interests.  The
issuance and sale of the Shares and the Warrant Shares will not obligate the
Company to issue or sell, pursuant to any pre-emptive right or otherwise, shares
of Common Stock or other securities to any Person (other than the Purchaser) and
will not result in a right of any holder of Company securities to adjust the
exercise, conversion, exchange or reset price under any outstanding shares of
capital stock or other securities.  

     

    3.3. Registration
Rights.  The Company has not granted or agreed to grant to any
Person any right (including “piggy-back” and demand registration rights) to have
any shares of capital stock or other securities of the Company registered with
the SEC or any other governmental authority and no person has the right to
prohibit the Company from filing the Registration
Statement.  

     

    3.4. Authorization;
Enforcement.  The execution and delivery of this Agreement and
the other Transaction Documents by the Company and the consummation by it of the
transactions contemplated hereby and thereby have been duly authorized by all
necessary action on the part of the Company.  Each of this Agreement
and the other Transaction Documents has been (or upon delivery will have been)
duly executed by the Company, and when delivered in accordance with the terms
hereof, will constitute a legal, valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms, except as such may
be limited by applicable bankruptcy, insolvency, reorganization or other laws
affecting creditors’ rights generally and by general equitable
principles.  The Company has all requisite corporate power and
authority to enter into this Agreement and the other Transaction Documents and
the transactions contemplated hereby and thereby and otherwise to carry out and
perform its obligations under their respective terms.

     

    3.5. Valid Issuance of the
Shares.  The Company has a sufficient number of authorized and
unissued shares of Common Stock for the issuance of the Shares, and the Shares
have been duly authorized and, when issued pursuant to the terms of this
Agreement, will be validly issued, fully paid and nonassessable and not subject
to any encumbrances and restrictions except for restrictions on transfer set
forth in the Transaction Documents or imposed by applicable securities laws,
preemptive rights or any other similar contractual rights of the stockholders of
the Company or any other Person.  Upon the effectiveness of the
Certificate Amendment, the Company will have a sufficient number of authorized
and unissued shares of Common Stock for the issuance of the Warrant Shares, and
the Warrant Shares will be within the authorized share capital of the Company
and, upon issuance in accordance with the terms of the Warrant, will be validly
issued and fully paid.  

     

    3.6. Financial
Statements.  At the time of their filing with the SEC, the
Financial Statements and the related notes thereto complied as to form in all
material respects with applicable accounting requirements and the rules and
regulations of the SEC with respect thereto in effect at the time of
filing.  The Financial Statements have been prepared in accordance
with United States generally accepted accounting principles (“GAAP”) applied on a
consistent basis during the periods covered thereby (except as may be otherwise
specified in the Financial Statements or the notes thereto and except that
unaudited financial statements may not be reconciled to GAAP or contain all
footnotes required by GAAP) and present fairly, in all material respects, the
financial position of the Company and the Subsidiaries and the results of
operations and cash flows as of the date and for the periods indicated therein
subject, in the case of unaudited statements, to normal, immaterial, year-end
audit adjustments.  

     

    
      
        
        

      

      
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    3.7. SEC
Documents.  As of their respective filing dates, the SEC
Documents complied in all material respects with the requirements of the
Exchange Act, and the rules and regulations promulgated thereunder, and none of
the SEC Documents contains 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 made therein, in light of the circumstances under which they
were made, not misleading.  All contracts, agreements, instruments and
other documents to which the Company is a party or to which the property or
assets of the Company are subject are included as part of, or specifically
identified in, the SEC Documents to the extent required by the rules and
regulations of the SEC as in effect at the time of filing, and each such
contract, agreement, instrument and other document is legal, valid, binding and
enforceable against the Company in accordance with their respective terms,
except as such may be limited by bankruptcy, insolvency, reorganization or other
laws affecting creditors’ rights generally and by general equitable
principles.  Except as set forth on Schedule 3.7, the
Company has prepared and filed with the SEC all filings and reports required by
the Securities Act and the Exchange Act to make the Company’s filings and
reports current and timely filed in all respects.  

     

    3.8. Consents.  Except
for (a) the filing and effectiveness of the Registration Statement and
(b) any required state “blue sky” law filings in connection with the
transactions contemplated hereunder or under the other Transaction Documents,
all material consents, approvals, orders and authorizations required on the part
of the Company in connection with the execution or delivery of, or the
performance of the obligations under, this Agreement and the other Transaction
Documents, and the consummation of the transactions contemplated herein and
therein, have been obtained and will be effective as of the date
hereof.  The execution and delivery by the Company of this Agreement
and the other Transaction Documents, the consummation of the transactions
contemplated herein and therein, and the issuance of the Securities do not
require the consent or approval of any third party or any lender to, the Company
or, to the knowledge of the Company, the OTCBB.

     

    3.9. No Conflict; Compliance With
Laws.  

     

    (a) The
execution, delivery and performance by the Company of this Agreement and the
other Transaction Documents, and the consummation of the transactions
contemplated hereby and thereby, including the issuance of the Securities, do
not and will not (i) conflict with or violate any provision of the Certificate
of Incorporation (assuming with respect to the issuance of Common Stock upon the
exercise of the Warrant, the effectiveness of the Certificate Amendment) or
Bylaws or the certificate of incorporation (or other charter documents) or
bylaws (or other similar documents) of either of the Subsidiaries, (ii) breach,
conflict with or result in any violation of or default (or an event that with
notice or lapse of time or both would become a default) under, or give rise to a
right of termination, amendment, acceleration or cancellation (with or without
notice or lapse of time, or both) of any obligation, contract, commitment,
lease, agreement, mortgage, note, bond, indenture or other instrument or
obligation to which the Company or either of the Subsidiaries is a party or by
which they or any of their properties or assets are bound, except in each case
to the extent such breach, conflict, violation, default, termination, amendment,
acceleration or cancellation does not, and could not reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect, or (iii) to
the knowledge of the Company, result in a violation of any statute, law, rule,
regulation, order, ordinance or restriction applicable to the Company, the
Subsidiaries or any of their properties or assets, or any judgment, writ,
injunction or decree of any court, judicial or quasi-judicial tribunal
applicable to the Company, the Subsidiaries or any of their properties or
assets.

     

    (b) Except as
set forth on Schedule
3.9(b), none of the Company or the Subsidiaries (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 either of the Subsidiaries), nor has the Company or either of the
Subsidiaries received written 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 or assets is bound (whether or not such default or violation has been
waived) or (ii) is in violation of any statute, rule or regulation of any
governmental authority, including without limitation all foreign, federal, state
and local laws relating to taxes, environmental protection, employment and labor
matters, and securities regulation (including the Securities Act and the
Exchange Act) except in each case as would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect.

     

    3.10. Brokers or
Finders.  Except as set forth on Schedule 3.10, none
of the Company or the Subsidiaries has dealt with any broker or finder in
connection with the transactions contemplated by this Agreement or the other
Transaction Documents, and none of the Company or the Subsidiaries has incurred,
or shall incur, directly or indirectly, any liability for any brokerage or
finders’ fees or agents’ commissions or any similar charges in connection with
this Agreement or the other Transaction Documents, or any transaction
contemplated hereby or thereby.

     

    3.11. Over-The-Counter-Bulletin
Board.  The Company’s Common Stock is actively traded, and thus
quoted, on the OTCBB, and, to the knowledge of the Company, no circumstance
presently exists which, with notice or the passage of time, or both, would
result in the Company no longer being eligible for quotation on the
OTCBB.

     

    3.12. Absence of
Litigation.  There is no action, suit, inquiry, notice of
violation, proceeding, or investigation nor, to the knowledge of the Company, is
any of the above threatened against the Company, the Subsidiaries 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) (each an “Action”) which (a)
adversely affects or challenges the legality, validity or enforceability of this
Agreement or any of the other Transaction Documents or any of the transactions
contemplated hereby or thereby, including the issuance of the Securities, or (b)
except as set forth on Schedule 3.12, could
reasonably be expected to result in a Material Adverse Effect.  Except
as set forth on Schedule 3.12, none
of the Company or the Subsidiaries, 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 associated with such director or officer’s
service to or association with the Company.  To the knowledge of the
Company, there has not been and there is not pending or threatened, any
investigation by the SEC involving the Company or any current or former director
or officer of the Company associated with such director or officer’s service to
or other association with the Company.  The SEC has not issued any
stop order or other order suspending the effectiveness of any registration
statement filed by the Company or either of the Subsidiaries under the Exchange
Act or the Securities Act.

     

    3.13. No Undisclosed
Liabilities;  Indebtedness.  Except as set forth on
Schedule 3.13,
since the Balance Sheet Date, other than liabilities and obligations arising in
the ordinary course of business, the Company and the Subsidiaries have incurred
no liabilities or obligations, whether known or unknown, asserted or unasserted,
fixed or contingent, accrued or unaccrued, mature or unmatured, liquidated or
unliquidated, or otherwise, except for liabilities or obligations, that,
individually or in the aggregate, do not or would not reasonably be expected to
have a Material Adverse Effect.  Except as set forth on Schedule 3.13, the
Company has no indebtedness outstanding as of the date hereof and is not in
default with respect to any outstanding indebtedness or any instrument relating
thereto.

     

     

    
      
        
        

      

      
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    3.14. Property.  

     

    (a) Personal
Property.  Each of the Company and the Subsidiaries has good
and marketable title to, or has valid rights to lease or otherwise use, all
items of personal property that are material to the business of the Company and
the Subsidiaries, free and clear of all liens and encumbrances except those, if
any, reflected in the Financial Statements, incurred in the ordinary course of
business.

     

    (b) Real
Property.  Each of the Company and the Subsidiaries has good
and marketable title to, or has valid rights to lease or otherwise use, all the
real property that is material to the business of the Company and the
Subsidiaries, free and clear of all liens and encumbrances except those, if any,
reflected in the Financial Statements, incurred in the ordinary course of
business.  Any real property and facilities held under lease by the
Company or either of the Subsidiaries are held by it or them under valid,
subsisting and enforceable leases (subject to laws of general application
relating to bankruptcy, insolvency, reorganization, or other similar laws
affecting creditors’ rights generally and other equitable remedies) with which
the Company and the Subsidiaries are in compliance in all material
respects.  To the knowledge of the Company, the real property used by
the Company and/or either of the Subsidiaries is being used by the Company
and/or either of the Subsidiaries, as applicable, in compliance with all
applicable zoning and other laws, including licensing standards, health and
safety code regulations, fire regulations and any other applicable city, county
or state regulations.

     

    3.15. Labor
Relations.  

     

    (a) Except as
set forth on Schedule
3.15(a), no labor or employment dispute exists or, to the knowledge of
the Company, is imminent or threatened, with respect to any of the Company’s
past or present employees or consultants, that has, or could reasonably be
expected to have, individually or in the aggregate, a Material Adverse
Effect.

     

    (b) Since
January 1, 2006, to the extent there has been any “mass layoff” or “plant
closing” as defined by the Worker Adjustment and Retraining Notification Act of
1988 (the “WARN
Act”) in respect of the Company or either of the Subsidiaries, or the
Company or either of the Subsidiaries has been affected by any transactions or
engaged in layoffs or employment terminations sufficient in number to trigger
application of any state, local or foreign law or regulation which is similar to
the WARN Act, such layoffs, closings or employment terminations have been in
material compliance with the WARN Act and such other applicable state, local and
foreign laws.

     

    3.16. Intellectual
Property.  

     

    (a) All
patents, registered trademarks, registered trade names, registered service marks
and registered copyrights held by the Company or the Subsidiaries are valid and
subsisting.  All necessary registration, maintenance and renewal fees
to date in connection with the foregoing have been paid and all necessary
documents and certificates in connection with the foregoing have been filed with
the relevant patent, copyright, trademark or other authorities in the United
States or foreign jurisdictions, as the case may be, for the purposes of
perfecting, prosecuting and maintaining the foregoing.  To the extent
there are any actions that are required to be taken by Company within one
hundred twenty (120) days of the date of this Agreement with respect to any of
the foregoing, the Company will do so in consultation with the
Purchaser.

     

    (b) Each of
the Company and the Subsidiaries owns, or is validly licensed or otherwise has
the right to use, and solely with respect to that which is owned by the Company
or either of the Subsidiaries free and clear of any liens and encumbrances, all
Intellectual Property used by or necessary for the Company to carry on its
business as currently conducted, except where the failure to so own or validly
license any such Intellectual Property would not reasonably be expected to have
a Material Adverse Effect.  To the knowledge of the Company, such
Intellectual Property constitutes all the Intellectual Property necessary to the
conduct of the business of the Company and the Subsidiaries as currently
conducted by the Company and the Subsidiaries, including the design,
development, manufacture, use, import and sale of products and technology and
the performance of services.

     

    (c) To the
knowledge of the Company, neither the Company nor either of the Subsidiaries has
infringed upon or misappropriated any Intellectual Property or other proprietary
information of any other Person that could reasonably be expected to result in a
Material Adverse Effect.  Except as set forth on Schedule 3.16(c),
neither the Company nor either of the Subsidiaries has received any written
charge, complaint, claim, demand or notice alleging that the Company or either
of the Subsidiaries has infringed or misappropriated any Intellectual Property
of any other Person nor, to the knowledge of the Company, is there a reasonable
basis for any such claim.  Except as set forth on Schedule 3.16(c),
neither the Company nor either of the Subsidiaries is party to or the subject of
any pending or, to the knowledge of the Company, threatened, suit, claim,
action, or proceeding with respect to any such infringement or
misappropriation.  To the knowledge of the Company, no other Person
has infringed upon or misappropriated any Intellectual Property owned by the
Company or either Subsidiary.  Neither the Company nor either of the
Subsidiaries has received any opinion of counsel that a third party patent
applies to any product produced, marketed, licensed, sold or distributed by the
Company or either Subsidiary.  Neither the Company nor either of the
Subsidiaries has brought any action, suit or proceeding for infringement of any
Intellectual Property of the Company or either of the Subsidiaries, or for
breach of any license or agreement involving any of such Intellectual Property,
against any party that remains pending as of the date of this Agreement, and to
the knowledge of the Company as of the date of this Agreement, there is no
unauthorized use, disclosure, infringement or misappropriation of any such
Intellectual Property by any third party, including any employee or former
employee of the Company or either of the Subsidiaries.

     

    (d) Neither
the Company nor either of the Subsidiaries has transferred title to, or granted
any exclusive license with respect to, any material Intellectual Property that
is used in the business of the Company or either of the Subsidiaries as
currently conducted.

     

    (e) The
Company has a policy of obtaining from each employee or consultant who is or was
involved in the creation or development of any Intellectual Property of the
Company an agreement containing an irrevocable assignment to the Company of the
Intellectual Property created or developed by such employee, and, to the
knowledge of the Company, there are no material breaches of such
policy.  Each of the Company and the Subsidiaries has taken all
reasonable steps (based on standard industry practices, and in the reasonable
opinion of the Company) to protect its Intellectual Property and rights
thereunder and, to the knowledge of the Company, no such rights to Intellectual
Property have been lost or are in jeopardy of being lost as a result of any act
or omission by the Company or either of the Subsidiaries.  The Company
does not believe it is or will be necessary to use any inventions of any of its
employees, consultants or independent contractors made prior to their employment
by, or performance of services for, the Company and the
Subsidiaries.

     

    
      
        
        

      

      
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    3.17. Subsidiaries; Joint
Ventures.  Except for the Subsidiaries, the Company has no
subsidiaries and does not otherwise own or control any other
Person.  The Company owns, directly or indirectly, all of the capital
stock or other equity interests of each of the Subsidiaries free and clear of
all liens, and all the issued and outstanding shares of capital stock of each of
the Subsidiaries are validly issued and are fully-paid, non-assessable and free
of preemptive and similar rights to subscribe for or purchase
securities.  Except as set forth on Schedule 3.17,
neither the Company nor either of the Subsidiaries is a participant in any joint
venture, partnership, or similar arrangement material to its
business.  

     

    3.18. Compliance with Regulatory
Requirements.  The Company and the Subsidiaries possess all
certificates, approvals, authorizations, licenses and permits issued by the
appropriate federal, state, local or foreign regulatory authorities, including
but not limited to the Federal Communications Commission and the SEC, necessary
to conduct their businesses as described in the SEC Documents, except where the
failure to possess such certificates, approvals, authorizations and permits is
not reasonably expected, individually or in the aggregate, to result in a
Material Adverse Effect (the “Governmental Authorizations”), and
the Company has not received any written notice of proceedings relating to the
revocation or modification of any Governmental Authorizations.  All
the Governmental Authorizations have been duly issued or obtained and are in
full force and effect, and, to the knowledge of the Company, the Company and the
Subsidiaries are in material compliance with the terms of all the Governmental
Authorizations.  The Company and the Subsidiaries have not engaged in
any activity that, to their knowledge, would cause revocation or suspension of
any such Governmental Authorizations.  Neither the execution, delivery
nor performance of this Agreement or any Transaction Document will adversely
affect the status of any of the Governmental Authorizations.  The
Company represents and warrants that, to its knowledge, no regulatory authority
has initiated any regulatory or legal action with respect to any of the
Company’s or the Subsidiaries’ products or
business.  

     

    3.19. Taxes.  Except
as set forth on Schedule 3.19, each
of the Company and the Subsidiaries has filed (or has had filed on its behalf),
will timely file or will cause to be timely filed, or has timely filed for an
extension of the time to file, all material Tax Returns (as defined below)
required by applicable law to be filed by it or them prior to or as of the date
hereof, and such Tax Returns are, or will be at the time of filing, true,
correct and complete in all material respects.  Each of the Company
and the Subsidiaries has paid (or has had paid on its behalf) or, where payment
is not yet due, has established (or has had established on its behalf and for
its sole benefit and recourse) or will establish or cause to be established in
accordance with GAAP on or before the date hereof an adequate accrual for the
payment of, all material Taxes (as defined below) due with respect to any period
ending prior to or as of the date hereof.  “Taxes” shall mean any
and all taxes, charges, fees, levies or other assessments, including income,
gross receipts, excise, real or personal property, sales, withholding, social
security, retirement, unemployment, occupation, use, goods and services,
license, value added, capital, net worth, payroll, profits, franchise, transfer
and recording taxes, fees and charges, and any other taxes, assessment or
similar charges imposed by the Internal Revenue Service or any taxing authority
(whether state, county, local or foreign) (each, a “Taxing Authority”),
including any interest, fines, penalties or additional amounts attributable to
or imposed upon any such taxes or other assessments.  “Tax Return” shall
mean any report, return, document, declaration or other information or filing
required to be supplied to any Taxing Authority, including information returns,
any documents with respect to accompanying payments of estimated Taxes, or with
respect to or accompanying requests for extensions of time in which to file any
such return, report, document, declaration or other information.  To
the knowledge of the Company, there are no claims or assessments pending against
the Company or either of the Subsidiaries for any material alleged deficiency in
any Tax, and neither the Company nor either of the Subsidiaries has been
notified in writing of any material proposed Tax claims or assessments against
the Company or either of the Subsidiaries.  To the knowledge of the
Company, no Tax Return of the Company or the Subsidiaries is or has been the
subject of an examination by a Taxing Authority.    Each of
the Company and the Subsidiaries has withheld from each payment made to any of
its past or present employees, officers and directors, and any other person, the
amount of all material Taxes and other deductions required to be withheld
therefrom and paid the same to the proper Taxing Authority within the time
required by law.

     

    3.20. Pensions and
Benefits.

     

    (a) Each Company Plan is included as
part of or specifically identified in the SEC Documents to the extent required
by the rules and regulations of the SEC as in effect at the time of
filing.

     

    (b) With
respect to employee benefit plans, programs, and other arrangements providing
incentive compensation or other benefits similar to those provided under any
Company Plans to any employee or former employee or dependent thereof, which
plan, program or arrangement is subject to the laws of any jurisdiction outside
the United States (“Foreign Plans”), (1)
the Foreign Plans have been maintained in all material respects in accordance
with all applicable laws, (2) if intended to qualify for special tax treatment,
the Foreign Plans meet all requirements for such treatment, (3) if intended to
be funded and/or book-reserved, the Foreign Plans are fully funded and/or book
reserved, as appropriate, based upon reasonable actuarial assumptions, and (4)
no liability which could be material to the Company and the Subsidiaries taken
as a whole exists or reasonably could be imposed upon the assets of the Company
or either of the Subsidiaries by reason of such Foreign Plans, other than to the
extent reflected on the Financial Statements.

     

    (c) (i) Each Company Plan
has been established and administered in all material respects in accordance
with its terms and in compliance with the applicable provisions of ERISA, the
Internal Revenue Code of 1986, as amended (the “Code”), and other
applicable laws,
rules and regulations; (ii) each Company Plan which is intended to be
qualified within the meaning of Section 401(a) of the Code is so qualified and
has received a favorable determination letter as to its qualification (or if
maintained pursuant to a prototype form of instrument the sponsor thereof has
received a favorable opinion letter as to its qualification), and to the
Company’s knowledge nothing has occurred, whether by action or failure to act,
that could reasonably be expected to cause the loss of such qualification; and
(iii) no Company Plan provides retiree health or life insurance benefits
(whether or not insured), and neither the Company nor either of the
Subsidiaries has any
obligations to provide any such retiree benefits other than as required pursuant
to Section 4980B of the Code or other applicable law.

     

    (d) None of
the Company or the Subsidiaries or any predecessor thereof sponsors, maintains
or contributes to, or has in the past sponsored, maintained or contributed to,
any Company Plan subject to Title IV of ERISA, any non-U.S. defined benefit
plan, or any multiemployer plan within the meaning of Section 4001(a)(3) of
ERISA.  No Company Plan is a plan subject to the minimum funding
requirements of Section 302 of ERISA or Section 412 of the Code, and none of the
Company, the Subsidiaries, or any member of their controlled group (as defined
in Section 414(b) of the Code) has any liability or obligation in respect of,
any such plan.  With respect to any Company
Plan and to the Company’s knowledge, (i) no actions, suits or claims (other than
routine claims for benefits in the ordinary course) are pending or threatened, and
(ii) no administrative investigation, audit or other administrative proceeding
by the Department of Labor, the Pension Benefit Guaranty Corporation, the
Internal Revenue Service or other governmental agencies are pending, threatened
or in progress.

     

    (e) The
consummation of the transactions contemplated by this Agreement will not (either
alone or together with any other event) entitle any employee, director or
independent contractor of the Company or either of the Subsidiaries to severance
pay or accelerate the time of payment or vesting or trigger any payment or
funding (through a grantor trust or otherwise) of compensation or benefits
under, or increase the amount payable or trigger any other material obligation
pursuant to, any agreement, any Company Plan or other employee plan.

     

    
      
        
        

      

      
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    3.21. Private
Placement.  Neither the Company nor any person acting on the
Company’s behalf has sold or offered to sell or solicited any offer to buy the
Securities by means of any form of general solicitation or
advertising.  Neither the Company nor any of its Affiliates nor any
person acting on the Company’s behalf has, directly or indirectly, at any time
within the past twelve (12) months, made any offer or sale of any security or
solicitation of any offer to buy any security under circumstances that would
reasonably be expected to (a) eliminate the availability of the exemption from
registration under Regulation D under the Securities Act in connection with the
sale or issuance of the Securities as contemplated hereby or (b) cause the
offering or issuance of the Securities pursuant to this Agreement or any of the
other Transaction Documents to be integrated with prior offerings by the Company
for purposes of any applicable law, regulation or stockholder approval
provisions.  Neither the Company nor either of the Subsidiaries is, or
is an Affiliate of, an “investment company” within the meaning of the Investment
Company Act of 1940, as amended.  Neither the Company nor either of
the Subsidiaries is a United States real property holding corporation within the
meaning of the Foreign Investment in Real Property Tax Act of
1980.  To the knowledge of the Company, no consent, license, permit,
waiver approval or authorization of, or designation, declaration, registration
or filing with, the SEC or any state securities regulatory authority is required
in connection with the offer, sale, issuance or delivery of the Securities other
than the possible filing of Form D with the SEC.  To the knowledge of
the Company, the issuance and sale of the Securities does not contravene the
requirements for quotation on the OTCBB.

     

    3.22. Material
Changes.  Since the Balance Sheet Date, the Company has
conducted its business only in the ordinary course and since such date there has
not occurred:  

     

    (a) any
event, occurrence or development that has had, or that could reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect,
except as set forth on Schedule
3.22(a);

     

    (b) any
amendments or changes in the charter documents or bylaws of the Company or the
Subsidiaries;

     

    (c) any: (i)
incurrence, assumption or guarantee by the Company or either of the Subsidiaries
of any debt for borrowed money other than (A) equipment leases made in the
ordinary course of business and (B) any such incurrence, assumption or guarantee
with respect to an amount of $25,000 or less; (ii) issuance or sale of any
securities convertible into or exchangeable for securities of the Company other
than to directors, employees and consultants pursuant to existing equity
compensation or stock purchase plans of the Company; (iii) issuance or sale of
options or other rights to acquire from the Company or either of the
Subsidiaries, directly or indirectly, securities of the Company or any
securities convertible into or exchangeable for any such securities, other than
options issued to directors, employees and consultants in the ordinary course of
business; (iv) issuance or sale of any stock, bond or other corporate security
other than to directors, employees and consultants pursuant to existing equity
compensation or stock purchase plans of the Company; (v) declaration or making
of any payment or distribution to stockholders or purchase or redemption of any
share of its capital stock or other security other than to or from directors,
officers and employees of the Company or the Subsidiaries as compensation for or
in connection with services rendered to the Company or the Subsidiaries (as
applicable) or for reimbursement of expenses incurred on behalf of the Company
or the Subsidiaries (as applicable); (vi) sale, assignment or transfer of any of
its intangible assets except in the ordinary course of business, or cancellation
of any debt or claim except in the ordinary course of business; (vii) waiver of
any right that is material to the Company whether or not in the ordinary course
of business; (viii) material change in aggregate officer compensation, except in
the ordinary course of business; or (ix) other commitment (contingent or
otherwise) to do any of the foregoing;

     

    (d) any
creation, sufferance or assumption by the Company or the Subsidiaries of any
lien on any asset or any making of any loan, advance or capital contribution to
or investment in any Person, in an aggregate amount which exceeds $25,000
outstanding at any time;

     

    (e) any entry
into, amendment of, relinquishment, termination or non-renewal by the Company or
either of the Subsidiaries of any material contract, license, lease,
transaction, commitment or other right or obligation, other than in the ordinary
course of business; or

     

    (f) any
transfer or grant of a right with respect to the Intellectual Property owned or
licensed by the Company or the Subsidiaries, except as among the Company and the
Subsidiaries.

     

    3.23. Transactions with Affiliates
and Employees.  None of the officers or directors of the
Company or either of the Subsidiaries and none of the employees of the Company
or either of the Subsidiaries, is presently a party to any transaction or
agreement with the Company or either of the Subsidiaries (other than for
services as employees, officers and directors) exceeding $120,000, 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.

     

    3.24. Insurance.  The
Company and each of 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 the business in which the Company and the
Subsidiaries are engaged, including, but not limited to, directors and officers
insurance coverage and products liability coverage.  The policies of
insurance maintained by the Company and each of the Subsidiaries are in full
force and effect, and to the Company’s knowledge, no termination of, or material
premium increase with respect to, such policies is threatened.  There
is no material claim pending under any of such policies as to which coverage has
been questioned, denied or disputed by the insurance carriers of such
policies.  All premiums due and payable under all such policies have
been timely paid, and the Company and each of the Subsidiaries are otherwise in
compliance with the terms of such policies.  The Company has no reason
to believe that it will not be able to renew existing insurance coverage for
itself and each of the Subsidiaries as and when such coverage expires or to
obtain similar coverage from similar insurers as may be necessary or appropriate
to continue business as currently conducted.

     

    3.25. Internal Accounting
Controls.  Except as set forth on Schedule 3.25, the
Company and the Subsidiaries maintain a system of internal accounting controls
sufficient to provide reasonable assurance that (a) transactions are executed in
accordance with management’s general or specific authorizations, (b)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with GAAP and to maintain asset accountability, (c)
access to assets is permitted only in accordance with management’s general or
specific authorizations, (d) the recorded accountability for assets is compared
with the existing assets at reasonable intervals and appropriate action is taken
with respect to any differences, and (e) the Company is otherwise in compliance
in all material respects with the Securities Act, the Exchange Act and all other
rules and regulations promulgated by the SEC and applicable to the Company,
including the Sarbanes-Oxley Act of 2002, as
amended.  

     

    
      
        
        

      

      
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    3.26. Environmental.  None
of the premises or any properties owned, occupied or leased by the Company or
either of the Subsidiaries (the “Premises”) has been
used by the Company or the Subsidiaries or, to the Company’s knowledge, by any
other Person, to manufacture, treat, store, or dispose of any substance that has
been designated to be a “hazardous substance” under applicable Environmental
Laws (hereinafter defined) (“Hazardous Substances”) in
violation of any applicable Environmental Laws.  To its knowledge, the
Company has not disposed of, discharged, emitted or released any Hazardous
Substances which would require, under applicable Environmental Laws,
remediation, investigation or similar response activity. No Hazardous Substances
are present as a result of the actions of the Company or, to the Company’s
knowledge, any other Person, in, on or under the Premises which would give rise
to any liability or clean-up obligations of the Company under applicable
Environmental Laws.  The Company and, to the Company’s knowledge, any
other Person for whose conduct it may be responsible pursuant to an agreement or
by operation of law, are in compliance with all material laws, regulations and
other federal, state or local governmental requirements, and all applicable
judgments, orders, writs, notices, decrees, permits, licenses, approvals,
consents or injunctions in effect on the date of this Agreement relating to the
generation, management, handling, transportation, treatment, disposal, storage,
delivery, discharge, release or emission of any Hazardous Substance (the “Environmental Laws”).  Neither
the Company nor, to the Company’s knowledge, any other Person for whose conduct
it may be responsible pursuant to an agreement or by operation of law has
received any written complaint, notice, order, or citation of any actual,
threatened or alleged noncompliance with any of the Environmental Laws, and
there is no proceeding, suit or investigation pending or, to the Company’s
knowledge, threatened against the Company or, to the Company’s knowledge, any
such Person with respect to any violation or alleged violation of the
Environmental Laws, and, to the knowledge of the Company, there is no basis for
the institution of any such proceeding, suit or investigation. 

     

    3.27. Foreign Corrupt
Practices.  None of the Company, the Subsidiaries or, to the
Company’s knowledge, any director, officer, agent, employee or other person
acting on behalf of the Company or the Subsidiaries has, in the course of its
actions for, or on behalf of, the Company or the Subsidiaries, (a) used any
corporate funds for any unlawful contribution, gift, entertainment or other
unlawful expenses relating to political activity; (b) made any direct or
indirect unlawful payment to any foreign or domestic government official or
employee from corporate funds; (c) violated or is in violation of in any
material respect any provision of the U.S. Foreign Corrupt Practices Act of
1977, as amended; or (d) made any unlawful bribe, rebate, payoff, influence
payment, kickback or other unlawful payment to any foreign or domestic
government official or employee.

     

    3.28. Board
Composition.  As of the date of this Agreement, the Board
consists of five (5) members:  Noam Bardin, Benjamin Broder, Lior
Samuelson and two (2) vacancies. 

     

    3.29. Disclosure.  All
disclosure provided to the Purchaser regarding the Company, its business and the
transactions contemplated hereby, including the Schedules to this Agreement
furnished by or on behalf of the Company, taken as a whole is true and correct
and does not contain any untrue statement of material fact or omit to state any
material fact necessary in order to make the statements made therein, in the
light of the circumstances under which they were made, not
misleading.  No event or circumstance has occurred or information
exists with respect to the Company or the Subsidiaries or its or their business,
properties, operations or financial conditions, which, under applicable law,
rule or regulation, requires public disclosure or announcement by the Company
but which has not been so publicly announced or disclosed.

     

    3.30. Sole Representations and
Warranties.  The representations and warranties of the Company
contained in this Agreement are the only representations and warranties made by
the Company in connection with the transactions contemplated by this Agreement
and supersede any and all previous written or oral statements made by the
Company.  

     

    4. Representations and
Warranties of the Purchaser.  The Purchaser represents and
warrants to the Company as follows:

     

    4.1. Authorization.  All
action on the part of the Purchaser and, if applicable, its officers, directors,
managers, members, stockholders and/or partners necessary for the authorization,
execution, delivery and performance of this Agreement and the other Transaction
Documents, and the consummation of the transactions contemplated herein and
therein, has been taken.  When executed and delivered in accordance
with the terms hereof, each of this Agreement and the other Transaction
Documents to which the Purchaser is a party will constitute the legal, valid and
binding obligation of the Purchaser, enforceable against the Purchaser in
accordance with its terms, except as such may be limited by applicable
bankruptcy, insolvency, reorganization or other laws affecting creditors’ rights
generally and by general equitable principles.  The Purchaser has all
requisite power and authority to enter into each of this Agreement and the other
Transaction Documents to which it is a party, and to carry out and perform its
obligations under the terms of hereof and thereof.

     

    4.2. Purchase Entirely for Own
Account.  The Purchaser is acquiring the Securities for its own
account for investment and not for resale or with a view to distribution thereof
in violation of the Securities Act.

     

    4.3. Investor
Status.  The Purchaser certifies and represents to the Company
that it is an “accredited investor” as defined in Rule 501 of Regulation D
promulgated under the Securities Act.  The Purchaser’s financial
condition is such that it is able to bear the risk of holding the Securities for
an indefinite period of time and the risk of loss of its entire
investment.  The Purchaser has sufficient knowledge and experience in
investing in companies similar to the Company so as to be able to evaluate the
risks and merits of its investment in the Company.  The Purchaser
understands that nothing in this Agreement or any other materials presented to
the Purchaser in connection with the purchase and sale of the Securities
constitutes legal, tax or investment advice.  The Purchaser has
consulted such legal, tax and investment advisors as it, in its sole discretion,
has deemed necessary or appropriate in connection with its purchase of the
Securities.  The Purchaser understands that its investment in the
Securities involves a significant degree of risk, including a risk of total loss
of the Purchaser’s investment.  The Purchaser understands that the
market price of the Common Stock can be volatile and that no representation is
being made as to the future value of the Common Stock.

     

    4.4. Disclosure of
Information.  The Purchaser has had an opportunity to receive
all information related to the Company requested by it and to ask questions of
and receive answers from the Company regarding the Company, its business and the
terms and conditions of the offering of the Securities.

     

    4.5. Securities Not
Registered.  The Purchaser understands that the Securities have
not been registered under the Securities Act, by reason of their issuance by the
Company in a transaction exempt from the registration requirements of the
Securities Act, and that the Securities must continue to be held by the
Purchaser unless a subsequent disposition thereof is registered under the
Securities Act or is exempt from such registration.  The Purchaser
understands that the exemptions from registration afforded by Rule 144 (the
provisions of which are known to it) promulgated under the Securities Act depend
on the satisfaction of various conditions, and that, if applicable, Rule 144 may
afford the basis for sales only in limited amounts.

     

    4.6. No
Conflict.  The execution and delivery by the Purchaser of this
Agreement and the other Transaction Documents to which it is a party, and the
consummation of the transactions contemplated hereby and thereby, do not and
will not conflict with or result in any violation of or default by the Purchaser
(with or without notice or lapse of time, or both) under, or give rise to a
right of termination, cancellation or acceleration of any obligation or to a
loss of a material benefit under (a) any provision of the organizational
documents of the Purchaser or (b) any agreement or instrument, permit,
franchise, license, judgment, order, statute, law, ordinance, rule or
regulations, applicable to the Purchaser.

     

    
      
        
        

      

      
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    4.7. Brokers or
Finders.  The Purchaser has not retained, utilized or been
represented by any broker or finder in connection with the transactions
contemplated by this Agreement.

     

    4.8. Consents.  All
consents, approvals, orders and authorizations required on the part of the
Purchaser in connection with the execution, delivery or performance of this
Agreement and the other Transaction Documents to which it is a party, and the
consummation of the transactions contemplated hereby and thereby have been
obtained and are effective as of the date hereof.

     

    4.9. Absence of
Litigation.  There is no Action against the Purchaser or any of
its Affiliates nor, to the knowledge of the Purchaser, is any Action threatened
against the Purchaser or any of its Affiliates which adversely affects or
challenges the legality, validity, or enforceability of this Agreement or any of
the other Transaction Documents or any of the transactions contemplated hereby
or thereby, including the purchase of the Securities.

     

    4.10. Capitalization.  All
of the limited liability company interests of the Purchaser have been duly
authorized, are validly issued and outstanding, are fully-paid and
non-assessable and were issued in full compliance with applicable state and
federal securities laws and rights of third parties.  Purchaser
represents that the information regarding its beneficial owners set forth on
Schedule 4.10
is true and correct.

     

    5. Conditions
Precedent.

     

    5.1. Conditions to the Obligation
of the Purchaser to Consummate the Closing.  The obligation of
the Purchaser to consummate the Closing and to purchase and pay for the
Securities is subject to the satisfaction of the following conditions
precedent:

     

    (a) The
representations and warranties of the Company contained herein shall be true and
correct in all material respects (except representations and warranties which,
as written, are already qualified by materiality or Material Adverse Effect, in
which case such representations and warranties shall be true and correct in all
respects) on and as of the date hereof and as of the Closing Date (unless such
representation or warranty refers to a particular date, in which case such
representation or warranty shall be true and correct as of such
date).

     

    (b) There
shall have been no material adverse change in the assets, liabilities, business
or operations of the Company prior to the Closing Date, and the Company shall
have performed all obligations and conditions herein required to be performed or
complied with by the Company on or prior to the Closing Date.

     

    (c) No
proceeding challenging this Agreement or the other Transaction Documents, or the
transactions contemplated hereby or thereby, or seeking to prohibit, alter,
prevent or materially delay the Closing, shall have been instituted before any
court, arbitrator or governmental body, agency or official or shall be pending
against or involving the Company.

     

    (d) The sale
of the Securities to the Purchaser shall not be prohibited by any law, rule,
governmental order or regulation.  All necessary consents, approvals,
licenses, permits, orders and authorizations of, declarations and filings with,
any governmental or administrative agency or of or with any other Person with
respect to any of the transactions contemplated hereby shall have been duly
obtained or made and shall be in full force and effect.

     

    (e) All
instruments and corporate proceedings of the Company in connection with the
transactions contemplated by this Agreement and the other Transaction Documents
shall be reasonably satisfactory in form and substance to the Purchaser, and the
Purchaser shall have received copies (executed or certified, as may be
appropriate) of all documents which the Purchaser may have reasonably requested
in connection with such transactions.

     

    (f) The
Investor Rights Agreement and the Warrant shall have been executed and delivered
by the Company.

     

    (g) The
Purchaser shall have received from the Company an original stock certificate
evidencing the Shares.

     

    (h) The
Purchaser shall have received a copy of duly executed Transfer Agent
Instructions acknowledged by the Company’s transfer agent.

     

    (i) The
Company shall have delivered to the Purchaser a certificate dated the Closing
Date and signed by the secretary or another officer of the Company, certifying
(i) that attached copies of the Certificate of Incorporation, the Bylaws
and resolutions of the Board approving this Agreement, the other Transaction
Documents and the transactions contemplated hereby and thereby, are all true,
complete and correct and remain in full force and effect as of the date hereof,
and (ii) as to the incumbency and specimen signature of each officer of the
Company executing this Agreement, the other Transaction Documents and any other
document delivered in connection herewith on behalf of the Company.

     

    (j) The
Company shall have delivered to the Purchaser, a certificate dated the Closing
Date and signed by the Company’s chief financial officer or chief executive
officer, certifying that (i) the representations and warranties of the
Company contained in Section 3 hereof are true and correct in all material
respects on the Closing Date and (ii) the Company has performed and complied
with all of the agreements and conditions set forth or contemplated herein that
are required to be performed or complied with by the Company on or before the
Closing Date.

     

    (k) The
Company shall provide evidence that, effective as of the Closing, (i) the number
of directors constituting the entire Board has been fixed at five (5), (ii) Noam
Bardin shall have tendered his resignation from the Board and all committees
thereof, (iii) Robert Stevanovski and Anthony Cassara shall be appointed to
serve as members of the Board, and (iv) the number of directors serving on the
Board shall be four (4), consisting of Lior Samuelson, Benjamin Broder, Robert
Stevanovski and Anthony Cassara, with one vacancy remaining on the
Board.

     

    (l) The
Company shall have delivered evidence of continued effectiveness and coverage
under the Company’s existing directors’ and officers’ insurance policy
immediately following the Closing or a replacement policy reasonably acceptable
to the Purchaser.

     

    
      
        
        

      

      
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    5.2. Conditions to the Obligation
of the Company to Consummate the Closing.  The obligation of
the Company to consummate the Closing and to issue and sell the Securities to
the Purchaser at the Closing is subject to the satisfaction of the following
conditions precedent:

     

    (a) The
representations and warranties of the Purchaser contained herein shall be true
and correct in all material respects (except representations and warranties
which, as written, are already qualified by materiality or Material Adverse
Effect, in which case such representations and warranties shall be true and
correct in all respects) on and as of the date hereof and as of the Closing Date
(unless such representation or warranty refers to a particular date, in which
case such representation or warranty shall be true and correct as of such
date).

     

    (b) The
Investor Rights Agreement shall have been executed and delivered by the
Purchaser.

     

    (c) The
Purchaser shall have delivered to the Company a certificate dated the Closing
Date and signed by an authorized officer or manager of the Purchaser certifying
that (i) the representations and warranties of the Purchaser contained in
Section 4 hereof are true and correct in all material respects on the Closing
Date and (ii) the Purchaser has performed and complied with all of the
agreements and conditions set forth or contemplated herein that are required to
be performed or complied with by the Purchaser on or before the Closing
Date.

     

    (d) No
proceeding challenging this Agreement or the other Transaction Documents, or the
transactions contemplated hereby or thereby, or seeking to prohibit, alter,
prevent or materially delay the Closing, shall have been instituted before any
court, arbitrator or governmental body, agency or official or shall be pending
against or involving the Purchaser.

     

    (e) The sale
of the Securities by the Company shall not be prohibited by any law, rule,
governmental order or regulation.  All necessary consents, approvals,
licenses, permits, orders and authorizations of, declarations and filings with,
any governmental or administrative agency or of any other Person with respect to
any of the transactions contemplated hereby shall have been duly obtained or
made and shall be in full force and effect.

     

    (f) All
instruments and corporate proceedings in connection with the transactions
contemplated by this Agreement to be consummated at the Closing shall be
reasonably satisfactory in form and substance to the Company, and the Company
shall have received counterpart originals, or certified or other copies of all
documents, including without limitation records of corporate or other
proceedings, which it may have reasonably requested in connection
therewith.

     

    (g) The
Purchaser shall deliver to the Company the payment of the Purchase Price by wire
transfer of immediately available funds to such account as set forth on Schedule
2.2.

     

    6. Certain Covenants and
Agreements. 

     

    6.1. Transfer of
Shares.  The Purchaser shall not sell, assign, pledge, transfer
or otherwise dispose of or encumber any of the Shares, except (a) pursuant to an
effective registration statement under the Securities Act, (b) to an Affiliate
(so long as such Affiliate agrees in writing with the Company to be bound by the
terms and provisions of this Agreement as if, and to the fullest extent as, the
Purchaser), or (c) pursuant to an available exemption from registration under
the Securities Act (including sales permitted pursuant to Rule 144) and
applicable state securities laws and, if requested by the Company, upon delivery
by the Purchaser of either an opinion of counsel of the Purchaser reasonably
satisfactory to the Company to the effect that the proposed transfer is exempt
from or does not require registration under the Securities Act and applicable
state securities laws or a representation letter of the Purchaser reasonably
satisfactory to the Company setting forth a factual basis for concluding that
such proposed transfer is exempt from or does not require registration under the
Securities Act and applicable state securities laws.  Any transfer or
purported transfer of the Shares in violation of this Section 6.1 shall be
void.  The Company shall not register any transfer of the Shares in
violation of this Section 6.1.  The Company may, and may instruct any
transfer agent for the Company, to place such stop transfer orders as may be
required on the transfer books of the Company in order to ensure compliance with
the provisions of this Section 6.1. 

     

    6.2. Legends.

     

    (a) To the
extent applicable, each certificate or other document evidencing the Shares and
the Warrant Shares shall be endorsed with the legend set forth below, and the
Purchaser covenants that, except to the extent such restrictions are waived by
the Company, it shall not transfer the shares represented by any such
certificate without complying with the restrictions on transfer described in
this Agreement and the legends endorsed on such certificate:

     

    “THE
SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, (THE “SECURITIES ACT”), OR ANY STATE SECURITIES
LAWS.  THESE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD OR OTHERWISE
DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OR PURSUANT TO AN EXEMPTION UNDER THE SECURITIES ACT AND
APPLICABLE STATE SECURITIES LAWS.”

     

    (b) The
legend set forth in Section 6.2(a) shall be removed from the certificates
evidencing the Shares and the Warrant Shares, (i) following any sale of such
Shares or Warrant Shares pursuant to Rule 144 or any effective registration
statement, (ii) if such Shares or Warrant Shares are eligible for sale under
Rule 144 without limitation as to volume or manner of sale (and the holder of
such Shares or Warrant Shares has submitted a written request for removal of the
legend indicating that the holder has complied with the applicable provisions of
Rule 144 or such judicial interpretation or pronouncement), or (iii) if such
legend is not required under applicable requirements of the Securities Act
(including judicial interpretations and pronouncements issued by the Staff of
the SEC) (and the holder of such Shares or Warrant Shares has submitted a
written request for removal of the legend indicating that the holder has
complied with the applicable provisions of Rule 144).  The Company
shall cause its counsel to issue a legal opinion to the Company’s transfer agent
promptly upon the occurrence of any of the events in clauses (i), (ii) or (iii)
above to effect the removal of the legend on certificates evidencing the Shares
or Warrant Shares and shall also cause its counsel to issue a “blanket” legal
opinion or other letter to the Company’s transfer agent promptly after the
Effective Date (provided that there is an effective registration statement
covering the resale of the Shares or Warrant Shares), if required by the
Company’s transfer agent, to allow sales without restriction pursuant to an
effective registration statement. The Company agrees that at such time as such
legend is no longer required under this Section 6.2(b), it will use its best
efforts to, no later than three (3) business days following the delivery by the
Purchaser to the Company or the Company’s transfer agent of a certificate
representing the Shares or Warrant Shares issued with a restrictive legend,
deliver or cause to be delivered to the Purchaser a certificate representing
such Shares or Warrant Shares that is free from all restrictive and other
legends; provided that in the
case of removal of the legend for reasons set forth in clause (ii) above, the
holder of such Shares or Warrant Shares has submitted a written request for
removal of the legend indicating that the holder has complied with the
applicable provisions of Rule 144. The Company may not make any notation on its
records or give instructions to any transfer agent of the Company that enlarge
the restrictions on transfer set forth in this Section 6.2.

     

    
      
        
        

      

      
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    6.3. Publicity.  Except
to the extent required by applicable laws, rules, regulations or stock exchange
requirements, neither (a) the Company, the Subsidiaries or any of their
Affiliates nor (b) the Purchaser or any of its Affiliates shall, without
the written consent of the other, make any public announcement or issue any
press release with respect to the transactions contemplated by this
Agreement.  In no event will either (x) the Company, the
Subsidiaries or any of their Affiliates or (y) the Purchaser or any of its
Affiliates make any public announcement or issue any press release with respect
to the transactions contemplated by this Agreement without consulting with the
other party, to the extent feasible, as to the content of such public
announcement or press release.  The Purchaser and the Company agree
that this Agreement is material to the Company and both the Purchaser and the
Company understand that the Company will issue a press release upon entry into
this Agreement and that the Company will file a Current Report on Form 8-K as
required under SEC rules, and the Purchaser shall be entitled to review and
approve the statements made therein prior to filing with the SEC, provided that
such approval shall not be unreasonably withheld, conditioned or
delayed.

     

    6.4. Filing of
Information.  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
pursuant to all applicable securities laws, including the Exchange
Act.  At any time if the Company is not required to file reports
pursuant to such laws, it will prepare and furnish to the Purchaser and make
publicly available in accordance with paragraph (c) of Rule 144 such information
as is required for the Purchaser to sell the Shares and the Warrant Shares under
Rule 144.  The Company further covenants that it will use its best
efforts to take such further action as any holder of Shares or Warrant Shares
may reasonably request to satisfy the provisions of Rule 144 applicable to the
issuer of securities relating to transactions for the sale of securities
pursuant to Rule 144.

     

    6.5. Use of
Proceeds.  The Company covenants and agrees that the proceeds
from the sale of the Securities shall be used by the Company only (a) to pay
fees and expenses of counsel to the Company in connection with this Agreement
and the transactions contemplated hereby, which fees and expenses are not
expected to exceed approximately $25,000, and (b) for operating working
capital.

     

    6.6. No
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, in its reasonable opinion,
would be integrated with the offer or sale of the Securities in a manner that
would require the registration under the Securities Act of the sale of the
Securities to the Purchaser.  

     

    6.7. Reservation of Common Stock
for Issuance.  The Company agrees to reserve from its duly
authorized capital stock the total number of shares of Common Stock issuable
upon execution of this Agreement and the other Transaction Documents (including
without limitation, the Warrant, subject to the effectiveness of the Certificate
Amendment).

     

    6.8. Filings.  At
the reasonable request of and at the sole expense of the Company, the Purchaser
will provide reasonable assistance to the Company in filing reports,
questionnaires, undertakings and other documents with respect to the issuance of
the Securities.

     

    6.9. Board.  

     

    (a) As soon
as practicable after the date of this Agreement (but in any event no later than
five (5) business days after the Closing), the Company shall take all actions
required under Section 14(f) of the Exchange Act and Rule 14f-1 promulgated
thereunder, including mailing to the Company’s stockholders any information
required by such Rule 14f-1 (and filing such information with the SEC) with
respect to the individuals to be appointed to the Board under this
Agreement.  Purchaser shall supply or caused to be supplied to the
Company such information regarding Purchaser, its officers, directors and
Affiliates and any Purchaser designee to the Board as the Company may reasonably
request in connection with the satisfaction of its obligations under this
Section 6.9.

     

    (b) The
Company will take all actions required such that, upon the Company’s compliance
with Section 6.9(a) and effective upon the expiration of the period described in
Rule 14f-1, David Stevanovski shall be appointed to serve on the Board in
accordance with the Certificate of Incorporation and Bylaws and applicable
law.

     

    6.10. Blue Sky
Compliance.  The Company will qualify the Securities for offer
and sale under the securities or “blue sky” laws of such jurisdictions as the
Purchaser shall reasonably request and will continue such qualifications in
effect so long as required for the offering and resale of the Securities; provided that the
Company shall not be required to (a) qualify as a foreign corporation or
other entity or as a dealer in securities in any such jurisdiction where it
would not otherwise be required to so qualify, (b) file any general consent
to service of process in any such jurisdiction or (c) subject itself to
taxation in any such jurisdiction if it is not otherwise so
subject.

     

    6.11. No General Solicitation or
Directed Selling Efforts.  None of the Company, its affiliates
or any other Person acting on its behalf will (a) solicit offers for, or offer
or sell, the Securities by means of any form of general solicitation or general
advertising within the meaning of Rule 502(c) of Regulation D or in any manner
involving a public offering within the meaning of Section 4(2) of the Securities
Act or (b) engage in any directed selling efforts within the meaning of
Regulation S, and all such Persons will comply with the offering restrictions
requirement of Regulation S.

     

    6.12. No
Stabilization.  The Company will not take, directly or
indirectly, any action designed to or that could reasonably be expected to cause
or result in any stabilization or manipulation of the price of the
Securities.

     

    
      
        
        

      

      
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    6.13. Exclusivity.  Until
the earlier of the Closing Date or termination of this Agreement pursuant to
Section 9, the Company will not, and will cause the Subsidiaries and the
Company’s and the Subsidiaries’ respective employees, officers, directors,
attorneys, financial advisors and other agents (the “Representatives”) not
to, directly or indirectly take any action to solicit, initiate, seek or
encourage any inquiry, proposal or offer from, furnish any information to, or
participate in any discussions or negotiations with, any Person (other than the
Purchaser) regarding any acquisition of the Company, any merger or consolidation
with or involving the Company, any acquisition of all or any portion of the
stock or assets of the Company, or any other financing (debt or equity) of the
Company (any such transaction, an “Alternative
Transaction”); provided, however, that if after the date hereof the Board
receives an unsolicited, bona fide proposal to acquire more than fifty percent
(50%) of the equity securities of the Company, which proposal is made in
circumstances not involving a breach of this Agreement, and the Board determines
that such offer constitutes a superior proposal (a “Superior Proposal”),
then the company may, after providing the Purchaser not less than twenty-four
(24) hours written notice, (a) furnish information with respect to the Company
to the party making such offer, but only after such party enters into a
customary confidentiality agreement with the Company and (b) participate in
negotiations with such Person regarding such Superior Proposal.  The
Company agrees that it will, and will cause the Subsidiaries, immediately to
terminate any such discussions or negotiations (other than negotiations with the
Purchaser) in progress as of the date of this Agreement and that in no event
will the Company or any of the Subsidiaries accept or enter into an agreement
concerning any Alternative Transaction except as permitted
hereunder.  In addition, the Company will not, directly or indirectly,
through any Representative, initiate or continue to participate in any
negotiations or discussions with any Person relating to an acquisition of, joint
venture with, or investment in, any business.  The Company will notify
the Purchaser immediately after receipt by the Company or either of the
Subsidiaries (or any of their Representatives) of any proposal for, or inquiry
respecting, any potential Alternative Transaction or any request for nonpublic
information in connection with such a proposal or inquiry, or for access to the
properties, books or records of the Company by any Person.  Such
notice to the Purchaser will indicate in reasonable detail the identity of the
Person making, and the terms of, the proposal or inquiry.  The Company
will be responsible for any material breach of the provisions of this Section
6.13 by either of the Subsidiaries or any of the Company’s or the Subsidiaries’
Representatives.

     

    6.14. Conduct of Business of the
Company.  

     

    (a) The
Company agrees that during the period from the date of this Agreement to the
Closing Date (unless the Purchaser shall otherwise agree in writing and except
as otherwise contemplated by this Agreement), the Company will, and will cause
each of the Subsidiaries to, (i) conduct its operations according to its
ordinary and usual course of business in compliance in all material respects
with all applicable laws, (ii) pay its debts and taxes when due (subject to good
faith disputes over such debts), (iii) provide the Purchaser and its
representatives reasonable access, during normal business hours and upon
reasonable advance notice to its properties, books, records, facilities,
officers, directors and accountants and furnish or make available (and cause
each of the Subsidiaries to furnish or make available) reasonably promptly to
the Purchaser and its representatives all information concerning its business,
properties and personnel as may reasonably be requested, (iv) pay or perform
other material obligations when due, and (v) use commercially reasonable efforts
to preserve intact its current business organizations, keep available the
service of its current officers and employees and preserve its relationships
with customers, suppliers and others having business dealings with it to the end
that goodwill and ongoing businesses shall not be impaired in any material
respect at or prior to the Closing Date.

     

    (b) Without
limiting the generality of the foregoing, and except as otherwise expressly
permitted in this Agreement, prior to the Closing Date, neither the Company nor
either of the Subsidiaries will, without the prior written consent of the
Purchaser, which consent shall not be unreasonably withheld, delayed or
conditioned:

     

    (i) except
for shares to be issued or delivered upon exercise of equity in accordance with
the Company’s existing underlying plans or warrants, issue, deliver, sell,
dispose of, pledge or otherwise encumber, or authorize or propose the issuance,
sale, disposition or pledge or other encumbrance of any additional shares of
capital stock of any class (other than the Shares), or any securities or rights
convertible into, exercisable or exchangeable for, or evidencing the right to
subscribe for any shares of capital stock, or any rights, warrants, options,
calls, commitments or any other agreements of any character to purchase or
acquire any shares of capital stock or any securities or rights convertible
into, exchangeable for, or evidencing the right to subscribe for, any shares of
capital stock;

     

    (ii) adopt any
amendment, modification or repeal, or propose to, or permit or consent to, any
amendment, modification or repeal of the Certificate of Incorporation or Bylaws
(or the equivalent organizational documents of the Subsidiaries), other than the
Certificate Amendment, or alter through merger, liquidation, reorganization,
restructuring or in any other fashion the corporate structure or ownership of
the Subsidiaries; or

     

    (iii) take,
undertake, incur, authorize, commit or agree to take any action that would cause
any of the representations or warranties in Section 3 to be untrue in any
material respect or would reasonably be anticipated to cause any of the
conditions to closing set forth in Section 5 not to be satisfied;
or

     

    (iv) authorize,
recommend, propose or announce an intention to do any of the foregoing, or enter
into any contract, agreement, commitment or arrangement to do any of the
foregoing.

     

    6.15. Increase in Authorized
Stock.  As soon as practicable after the Closing Date, the
Company will take and cause to be taken, in accordance with applicable law, the
Certificate of Incorporation and Bylaws, all actions reasonably necessary or
advisable to obtain approval by the Company’s stockholders of the Certificate
Amendment, including, but not limited to, filing with the SEC a proxy statement
complying with applicable requirements of law and all of the proxy rules of the
SEC for the purposes of seeking such approval.  Immediately following
approval by the Company’s stockholders of the Certificate Amendment, the Company
shall file the Certificate Amendment with the Secretary of State of the State of
Delaware.

     

    6.16. Access to
Information.  After the Closing, the Company shall provide the
Purchaser and its representatives reasonable access, during normal business
hours and upon reasonable advance notice, to its properties, books, records,
facilities, officers, directors and accountants and furnish or make available
(and cause the Subsidiaries to furnish or make available) reasonably promptly to
the Purchaser and its representatives all information concerning its business,
properties and personnel as may reasonably be requested.  The
Company’s compliance with this Section 6.16 shall be subject to the Purchaser’s
execution of a confidentiality agreement mutually acceptable to the
parties.

     

    
      
        
        

      

      
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    7. Indemnification.

     

    7.1. By the
Company.  The Company agrees to indemnify, defend and hold
harmless the Purchaser and its Affiliates and their respective officers,
directors, agents, employees, subsidiaries, partners, members and controlling
persons (collectively, the “Purchaser
Indemnitees”) from and against any and all claims, losses, liabilities,
damages, deficiencies, judgments, assessments, fines, settlements, costs or
expenses (including interest, penalties and reasonable fees, disbursements and
other charges of counsel) (collectively, “Losses”) based upon,
arising out of or otherwise in respect of any breach by the Company of any
representation, warranty, covenant or agreement of the Company contained in this
Agreement or in the other Transaction Documents.

     

    7.2. By the
Purchaser.  The Purchaser agrees to indemnify, defend and hold
harmless the Company and its Affiliates and their respective officers,
directors, agents, employees, subsidiaries, partners, members and controlling
persons (collectively, the “Company Indemnitees”)
from and against any and all Losses based upon, arising out of or otherwise in
respect of any breach by the Purchaser of any representation, warranty, covenant
or agreement of the Purchaser contained in this Agreement or in the other
Transaction Documents.

     

    7.3. Claims.  All
claims for indemnification by an Indemnified Party pursuant to this Section 7
shall be made as follows:

     

    (a) If an
Indemnified Party has incurred or suffered Losses for which it is entitled to
indemnification under this Section 7, then such Indemnified Party shall give
prompt written notice of such claim (a “Claim Notice”) to the
Indemnifying Party.  Each Claim Notice shall state the amount of
claimed Losses (the “Claimed Amount”), if
known, and the basis for such claim.

     

    (b) Within
thirty (30) days after delivery of a Claim Notice, the Indemnifying Party shall
provide to each Indemnified Party, a written response (the “Response Notice”) in
which the Indemnifying Party shall:  (i) agree that all of the
Claimed Amount is owed to the Indemnified Party, (ii) agree that part, but
not all, of the Claimed Amount (the “Agreed Amount”) is
owed to the Indemnified Party, or (iii) contest that any of the Claimed
Amount is owed to the Indemnified Party.  The Indemnifying Party may
contest the payment of all or a portion of the Claimed Amount only based upon a
good faith belief that all or such portion of the Claimed Amount does not
constitute Losses for which the Indemnified Party is entitled to indemnification
under this Section 7.  If no Response Notice is delivered by the
Indemnifying Party within such 30-day period, then the Indemnifying Party shall
be deemed to have agreed that all of the Claimed Amount is owed to the
Indemnified Party.

     

    (c) If the
Indemnifying Party in the Response Notice agrees (or is deemed to have agreed)
that all of the Claimed Amount is owed to the Indemnified Party, then the
Indemnifying Party shall owe to the Indemnified Party an amount equal to the
Claimed Amount to be paid in the manner set forth in this Section
7.  If the Indemnifying Party in the Response Notice agrees that part,
but not all, of the Claimed Amount is owed to the Indemnified Party, then the
Indemnifying Party shall owe to the Indemnified Party an amount equal to the
Agreed Amount set forth in such Response Notice to be paid in the manner set
forth in this Section 7.  The Indemnifying Party and the Indemnified
Party shall use their reasonable best efforts to resolve the dispute as to the
amount of the Claimed Amount the Indemnifying Party believes it does not owe to
the Indemnified Party.

     

    (d) No delay
on the part of the Indemnified Party in notifying the Indemnifying Party shall
relieve the Indemnifying Party of any liability or obligation hereunder except
to the extent of any actual prejudice caused by or arising out of such
delay.

     

    7.4. Payment of
Claims.  The Indemnifying Party shall make payment of any
portion of any Claimed Amount that the Indemnifying Party has agreed in a
Response Notice that it owes to an Indemnified Party, or that the Indemnifying
Party is deemed to have agreed it owes to such Indemnified Party, said payment
to be made within thirty (30) days after such Response Notice is delivered by
the Indemnifying Party or should have been delivered by the Indemnifying Party,
as the case may be.  

     

    7.5. Limitations.

     

    (a) Time for
Claims.  The Indemnifying Party will not be liable for any
Losses hereunder arising out of a breach of representation or warranty unless a
written claim for indemnification is given by the Indemnified Party to the
Indemnifying Party on or prior to the date that is eighteen (18) months after
the Closing Date.

     

    (b) Maximum
Amount.  Notwithstanding anything contained herein to the
contrary, the Indemnifying Party will not be liable for any Losses hereunder in
excess of, and all such Losses for which a party may be required to indemnify
the other party hereunder may not exceed $350,000, except with respect to any
breach of the Fundamental Representations, in which case the limit on the amount
of such indemnification shall be an amount equal to the Purchase
Price.  For purposes of determining in connection with the
indemnification provisions of this Section 7, the amount of any Losses incurred
in connection with any breach, any and all qualifications of representations,
warranties, covenants or agreements by reference to any Material Adverse Effect
or materiality shall be disregarded.  Notwithstanding anything to the
contrary herein, it is understood that nothing in this Agreement (including this
Section 7.5) shall limit or restrict any of the parties’ right to maintain or
recover any amounts in connection with any action or claim based upon fraud or
intentional misrepresentation.

     

    7.6. Applicability;
Exclusivity.  Notwithstanding any term to the contrary in this
Section 7, the indemnification and contribution provisions of the Investor
Rights Agreement shall govern any claim made with respect to registration
statements filed pursuant thereto or sales made thereunder.  The
parties hereby acknowledge and agree that in addition to remedies of the parties
hereto in respect of any and all claims relating to any breach or purported
breach of any representation, warranty, covenant or agreement that is contained
in this Agreement pursuant to the indemnification provisions of this Section 7,
all parties shall always retain the right to pursue and obtain injunctive relief
in addition to any other rights or remedies
hereunder.  

     

    
      
        
        

      

      
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    8. Miscellaneous
Provisions.

     

    8.1. Rights
Cumulative.  Each and all of the various rights, powers and
remedies of the parties shall be considered to be cumulative with and in
addition to any other rights, powers and remedies which such parties may have at
law or in equity in the event of the breach of any of the terms of this
Agreement.  The exercise or partial exercise of any right, power or
remedy shall neither constitute the exclusive election thereof nor the waiver of
any other right, power or remedy available to such party.

     

    8.2. Pronouns.  All
pronouns or any variation thereof shall be deemed to refer to the masculine,
feminine or neuter, singular or plural, as the identity of the person, persons,
entity or entities may require.

     

    8.3. Notices.

     

    (a) Any
notices, reports or other correspondence (hereinafter collectively referred to
as “correspondence”)
required or permitted to be given hereunder shall be sent by postage prepaid
first class mail, overnight courier or confirmed facsimile delivered to the
party to whom such correspondence is required or permitted to be given
hereunder.  The date of giving any notice shall be the date of its
actual receipt if during normal business hours and, if not, then on the next
business day.

     

    (b) All
correspondence to the Company shall be addressed as follows:

     

    deltathree,
Inc.

    419
Lafayette Street

    New York,
NY 10003

    Attention:   Chief
Executive Officer and General Counsel

    Facsimile:    212.500.4888

     

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

     

    Mintz
Levin Cohn Ferris Glovsky & Popeo, P.C.

    Chrysler
Center

    666 Third
Avenue

    New York,
NY 10017

    Attention:   Kenneth
Koch, Esq.

    Facsimile:    212.983.3115

    


    (c) All
correspondence to the Purchaser shall be addressed as follows:

     

    D4
Holdings, LLC

    349-L
Copperfield Blvd., #407

    Concord,
NC 28025

    Attention:   Robert
Stevanovski, Manager

    Facsimile:    704.260.3304

     

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

    


    Bingham
McCutchen LLP

    2020 K
Street, NW

    Washington,
DC 20006

    Attention:   Andrew
M. Ray, Esquire

    Facsimile:    202.373.6452

    


    (d) Any party
may change the address to which correspondence to it is to be addressed by
written notification as provided for herein.

     

    
      
        
        

      

      
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    8.4. Captions.  The
captions and paragraph headings of this Agreement are solely for the convenience
of reference and shall not affect the interpretation of this
Agreement.

     

    8.5. Severability.  Should
any part or provision of this Agreement be held unenforceable or in conflict
with the applicable laws or regulations of any jurisdiction, the invalid or
unenforceable part or provisions shall be replaced with a provision which
accomplishes, to the extent possible, the original business purpose of such part
or provision in a valid and enforceable manner, and the remainder of this
Agreement shall remain binding upon the parties hereto.

     

    8.6. Governing
Law.  This Agreement shall be governed by and construed in
accordance with the internal and substantive laws of the State of Delaware and
without regard to any conflicts of laws concepts which would apply the
substantive law of some other jurisdiction.

     

    8.7. Waiver.  No
waiver of any term, provision or condition of this Agreement, whether by conduct
or otherwise, in any one or more instances, shall be deemed to be, or be
construed as, a further or continuing waiver of any such term, provision or
condition or as a waiver of any other term, provision or condition of this
Agreement.

     

    8.8. Expenses.  Each
Party shall pay its expenses incurred in connection with the preparation,
execution and delivery of this Agreement and the other Transaction
Documents.  

     

    8.9. Assignment.  The
rights and obligations of any party hereto shall inure to the benefit of and
shall be binding upon the authorized successors and permitted assigns of such
party.  Neither the Company nor the Purchaser may assign this
Agreement or any rights or obligations hereunder without the prior written
consent of the other party; provided, however, that the Purchaser may assign or
transfer any or all of its rights under this Agreement to any Affiliate of the
Purchaser provided that such assignee or transferee agrees in writing to be
bound, with respect to the transferred Shares, by the provisions hereof that
apply to the Purchaser (whereupon such assignee or transferee shall be deemed to
be the “Purchaser” for all
purposes of this Agreement).

     

    8.10. Survival.  The
respective representations and warranties given by the parties hereto shall
survive the Closing Date and the consummation of the transactions contemplated
herein for a period of time equal to the time for which indemnification may be
sought hereunder, without regard to any investigation made by any
party.  The respective covenants and agreements agreed to by a party
hereto shall survive the Closing Date and the consummation of the transactions
contemplated herein in accordance with their respective terms and
conditions.  

     

    8.11. Entire
Agreement.  This Agreement constitutes the entire agreement
between the parties hereto respecting the subject matter hereof and supersedes
all prior agreements, negotiations, understandings, representations and
statements respecting the subject matter hereof, whether written or oral
(including without limitation the Letter of Intent dated February 1, 2009
between the parties hereto).  No modification, alteration, waiver or
change in any of the terms of this Agreement shall be valid or binding upon the
parties hereto unless made in writing and duly executed by the parties
hereto.

     

    8.12. Amendments.  Any
amendment, supplement or modification of or to any provision of this Agreement
or any waiver of any provisions of this Agreement shall be effective only if
made or given in writing and signed by the Company and the
Purchaser.

     

    8.13. No Third Party
Rights.  This Agreement is intended solely for the benefit of
the parties hereto and is not intended to confer any benefits upon, or create
any rights in favor of, any Person (including, without limitation, any
stockholder or debt holder of the Company) other than the parties
hereto.

     

    8.14. Counterparts.  This
Agreement may be executed in any number of counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
document.  The parties hereto confirm that any facsimile copy or
electronic mail message in “pdf” or similar format of another party’s executed
counterpart of this Agreement (or its signature page thereof) will be deemed to
be an executed original thereof.

     

    8.15. Service of
Process.  Each of the parties hereto consents to process being
served in any such suit, action or proceeding, by mailing a copy thereof 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 in this Section 8.15 shall affect or limit
any right to serve process in any other manner permitted by
law.

     

    8.16. Further
Assurances.  Each party hereto agrees to cooperate fully with
the other party hereto and to execute such further instruments, documents and
agreements and to give such further written assurances as may be reasonably
requested by the other party hereto to better evidence and reflect the
transactions described herein and contemplated hereby and to carry into effect
the intents and purposes of this Agreement, and further agrees to take promptly,
or cause to be taken, all actions, and to do promptly, or cause to be done, all
things necessary, proper or advisable under applicable law to consummate and
make effective the transactions contemplated hereby, to obtain all necessary
waivers, consents and approvals, to effect all necessary registrations and
filings, and to remove any injunctions or other impediments or delays, legal or
otherwise, in order to consummate and make effective the transactions
contemplated by this Agreement for the purpose of securing to the parties hereto
the benefits contemplated by this Agreement.

     

    8.17. Waiver of Trial by
Jury.  THE PARTIES HERETO IRREVOCABLY WAIVE TRIAL BY JURY IN
ANY SUIT, ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY.

     

    
      
        
        

      

      
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    9. Termination.  

     

    (a) Termination.  This
Agreement may be terminated at any time prior to the Closing Date:

     

    (i) by the
written agreement of the Company and the Purchaser;

     

    (ii) by either
the Company or the Purchaser if the Closing shall not have been consummated by
February 27, 2009, provided that the right to terminate this Agreement pursuant
to this Section 9(a)(ii) shall not be available to any party whose action or
failure to act has been a principal cause of or resulted in the failure of the
Closing to occur on or before such date and such action or failure to act
constitutes a material breach of this Agreement; or

     

    (iii) by the
Company at any time, upon five (5) business days prior written notice provided
to the Purchaser (such five-day period, the “Notice Period”), if
(A) each of the conditions set forth in Section 5.1 have been satisfied as of
the date of such notice or are to be satisfied (or caused to be satisfied) by
the Company at the Closing and such satisfaction can reasonably be expected to
occur prior to the expiration of the Notice Period, (B) the Company is prepared
to consummate the Closing prior to the expiration of the Notice Period, and (C)
the Purchaser is unwilling or unable to consummate the Closing prior to the
expiration of the Notice Period;

     

    (iv) by the
Company, pursuant to and in accordance with Section 6.13 for the purpose of
pursuing a Superior Proposal, provided the Company has not breached the
provisions of Section 6.13; or

     

    (v) by either
the Company or the Purchaser if a governmental authority shall have issued an
order, decree or ruling or taken any other action, in any case having the effect
of permanently restraining, enjoining or otherwise prohibiting this Agreement
and/or the transactions contemplated hereby, which order, decree or ruling is
final and nonappealable.

     

    (b) Effect of
Termination.  In the event of the termination or abandonment of
this Agreement pursuant to Section 9(a), this Agreement shall forthwith become
void and have no effect, without any liability on the part of any party hereto
or its Affiliates, directors, or officers thereof other than pursuant to Section
9(c); provided, that nothing contained in this Section 9(b) shall relieve any
party from liability for any fraud or the breach of any representation,
warranty, covenant or other agreement contained in this Agreement or any
nondisclosure agreement between the parties occurring prior to
termination.

     

    (c) Termination
Fee.

     

    (i) If the
Company terminates this Agreement pursuant to Section 9(a)(iii), the Purchaser
shall pay the Company, within three (3) business days of such termination, an
amount equal to $175,500 by wire transfer of immediately available funds to such
account as set forth on Schedule
2.2.

     

    (ii) In the
event that (A) this Agreement is terminated by the Company pursuant to Section
9(a)(iv), or (B) the Company consummates an Alternative Transaction within
twenty (20) days after termination of this Agreement by the Company pursuant to
Section 9(a)(ii), then the Company shall pay to the Purchaser, within three (3)
business days of such termination, an amount equal to $175,500 by wire transfer
of immediately available funds to such account as the Purchaser shall designate
in writing.

     

    [signature pages
follow]

     

     

    
      
        
        

      

      
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    IN WITNESS WHEREOF, the parties
hereto have executed this Securities Purchase Agreement under seal as of the day
and year first above written.

     

    COMPANY:

     

    DELTATHREE,
INC.

     

    By:      /s/ Efraim
Baruch                       


    Name:
Efraim Baruch

    Title:   Chief
Executive Officer

     

    PURCHASER:

     

    D4
HOLDINGS, LLC

     

    By:           Praescient,
LLC, its Manager

    


    By:       /s/ Robert
Stevanovski

    Name:  Robert
Stevanovski

    Title:    Manager

     

     

     

    
      
        
        

      

      
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    Exhibit
A

     

    Investor
Rights Agreement

     

     

    
      
        
        

      

      
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    Exhibit
B

     

    Warrant