Document:

SECURITIES
PURCHASE AGREEMENT

     

    This
Securities Purchase Agreement (this “Agreement”) is dated
as of February 1, 2010 among Lattice Incorporated, a Delaware (the “Company”), and Barron
Partners LP, a Delaware limited partnership (the “Purchaser”).

     

    WHEREAS,
subject to the terms and conditions set forth in this Agreement and pursuant to
Section 4(2) of the Securities Act of 1933, as amended (the “Securities Act”) and
Rule 506 promulgated thereunder, the Company desires to issue and sell to
Purchaser, and Purchaser desires to purchase from the Company, securities of the
Company as more fully described in this Agreement.

     

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

     

    ARTICLE
I

    DEFINITIONS

     

    1.1   
     Definitions.  In
addition to the terms defined elsewhere in this Agreement: (a) capitalized terms
that are not otherwise defined herein have the meanings given to such terms in
the Series A Designations (as defined herein), and (b) the following terms have
the meanings indicated in this Section
1.1:

     

    “Affiliate” means any
Person that, directly or indirectly through one (1) or more intermediaries,
controls or is controlled by or is under common control with a Person, as such
terms are used in and construed under Rule 144 under the Securities
Act.  With respect to a Purchaser, any investment fund or managed
account that is managed on a discretionary basis by the same investment manager
as such Purchaser will be deemed to be an Affiliate of such
Purchaser.

     

    “Business Day” means
any day except Saturday, Sunday, any day which shall be a federal legal holiday
in the United States or any day on which banking institutions in the State of
New York are authorized or required by law or other governmental action to
close.

     

     “Closing” means the
closing of the purchase and sale of the Securities pursuant to Section
2.1.

     

    “Closing Date” means
the Trading Day when all of the Transaction Documents have been executed and
delivered by the applicable parties thereto, and all conditions precedent to (i)
the Purchaser’s obligations to pay the Subscription Amount and (ii) the
Company’s obligations to deliver the Securities have been satisfied or waived,
which shall be no later than February 22, 2010..

     

    “Commission” means the
U.S. Securities and Exchange Commission.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    “Common Stock” means
the common stock of the Company, par value $.01 per share, and any other class
of securities into which such securities may hereafter be reclassified or
changed into.

     

    “Common Stock
Equivalents” means any securities of the Company or the Subsidiaries
which would entitle the holder thereof to acquire at any time Common Stock,
including, without limitation, any debt, preferred stock, rights, options,
warrants or other instrument that is at any time convertible into or exercisable
or exchangeable for, or otherwise entitles the holder thereof to receive, Common
Stock.

     

    “Disclosure Schedules”
shall have the meaning ascribed to such term in Section 3.1.

     

    “Escrow Agent” means
Sichenzia Ross Friedman Ference LLP, with offices located at 61 Broadway, New
York, New York 10006.

     

    “Escrow
Agreement”  means the escrow agreement entered into prior to
the date hereof, by and among the Company, the Purchaser and the Escrow Agent
pursuant to which the Purchaser, shall deposit the Purchase Price with the
Escrow Agent to be applied to the transactions contemplated
hereunder.

     

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

     

    “Exempt Issuance”
means: (a) shares of Common Stock or options to purchase Common Stock issued to
employees, officers, directors or consultants of the Company pursuant to any
stock or option plan duly adopted by a majority of the non-employee members of
the Board of Directors of the Company or a majority of the members of a
committee of non-employee directors established for such purpose, (b) securities
issued upon the exercise or exchange of or conversion of any Securities issued
hereunder and/or other securities (including the stock rights set forth on Schedule 3.1(g))
exercisable or exchangeable for or convertible into shares of Common Stock
issued and outstanding on the date of this Agreement, provided that, unless set
forth on Schedule
3.1(g), such securities have not been amended since the date of this
Agreement to increase the number of such securities or to decrease the exercise,
exchange or conversion price of any such securities and (c) securities issued
pursuant to acquisitions or strategic transactions approved by a majority of the
directors, provided that any such issuance shall only be to a Person which is,
itself or through its subsidiaries, an operating company in a business
synergistic with the business of the Company, as determined by a majority of the
directors, and in which the Company receives benefits in addition to the
investment of funds, but shall not include a transaction in which the Company is
issuing securities primarily for the purpose of raising capital or to an entity
whose primary business is investing in securities.

     

    “Liens” means a lien,
charge, security interest, encumbrance, right of first refusal, preemptive right
or other restriction.

     

    
      
        
        

      

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

     

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

     

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

     

    “Public Information
Failure” shall have the meaning ascribed to such term in Section 4.14
(b).

     

    “Public Information Failure
Payments” shall have the meaning ascribed to such term in Section
4.14(b).

     

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

     

    “Required Minimum”
means, as of any date, one hundred and ten percent (110%) of the maximum
aggregate number of shares of Common Stock then issued or potentially issuable
in the future pursuant to the Transaction Documents, including any Underlying
Shares issuable upon exercise or conversion in full of all Series A Convertible
Preferred Stock (including a reasonable reserve for Underlying Shares issuable
as payment of dividends), ignoring any conversion or exercise limits set forth
therein.

     

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

     

     “Securities” means the
Series A Convertible Preferred Stock and the Underlying Shares.

     

    “Securities Act” means
the Securities Act of 1933, as amended, and the rules and regulations
promulgated hereunder.

     

     “Series A Convertible
Preferred Stock” means the Series A Convertible Preferred Stock of the
Company and such designations, preferences and limitations as are set forth in
the Series A Designations.

     

    “Series A
Designations” means the Certificate of Designation, Preferences and
Rights of Series A Convertible Preferred Stock filed with the State of Delaware
on September 19, 2006.

     

    
      
        
        

      

      
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     “Short Sales” shall
include all “short sales” as defined in Rule 200 of Regulation SHO under the
Exchange Act (but shall not be deemed to include the location and/or reservation
of borrowable shares of Common Stock).

     

    “Subsidiary” means any
subsidiary of the Company as set forth on Schedule
3.1(a).

     

     “Trading Day” means a
day on which the Common Stock is traded on a Trading Market.

     

    “Trading Market” means
the following markets or exchanges on which the Common Stock is listed or quoted
for trading on the date in question: the Nasdaq Capital Market, the NYSE Amex,
the New York Stock Exchange, the Nasdaq National Market, the OTC Bulletin Board,
or “Pink Sheets” published by Pink Sheets, LLC (or a similar organization or
agency succeeding to its functions of reporting prices).

     

    “Transaction
Documents” means this Agreement, the Series A Designations, the Escrow
Agreement and any other documents or agreements executed in connection with the
transactions contemplated hereunder.

     

    “Underlying Shares”
means the shares of Common Stock issued and issuable upon conversion or
redemption of the Series A Convertible Preferred Stock.

     

    “VWAP” of a share of
Common Stock as of a particular date (the “Determination Date”) shall mean the
price determined by the first of the following clauses that applies: (a) if
shares of Common Stock are traded on a national securities exchange (an
“Exchange”), the weighted average of the closing sale price of a share of the
Common Stock of the Company on the last five (5) Trading Days prior to the
Determination Date reported on such Exchange as reported in The Wall Street
Journal (weighted with respect to the trading volume with respect to each such
day); (b) if shares of Common Stock are not traded on an Exchange but trade in
the over-the-counter market and such shares are quoted on the National
Association of Securities Dealers Automated Quotations System (“NASDAQ”), the
weighted average of the closing sale price of a share of the Common Stock of the
Company on the last five (5) Trading Days prior to the Determination Date
reported on NASDAQ as reported in The Wall Street Journal (weighted with respect
to the trading volume with respect to each such day); (c) if such shares are an
issue for which last sale prices are not reported on NASDAQ, the average of the
closing sale price, in each case on the last five (5) Trading Days (or if the
relevant price or quotation did not exist on any of such days, the relevant
price or quotation on the next preceding Business Day on which there was such a
price or quotation) prior to the Determination Date as reported by the Over the
Counter Bulletin Board (the “OTCBB”), or any other successor organization; (d)
if no closing sales price is reported for the Common Stock by the OTCBB or any
other successor organization for such day, the average of the closing sale
price, in each case on the last five (5) Trading Days (or if the relevant price
or quotation did not exist on any of such days, the relevant price or quotation
on the next preceding business day on which there was such a price or quotation)
prior to the Determination Date as reported by  the "pink sheets" by
the Pink Sheets, LLC, or any successor organization, (e) if no closing sales
price is reported for the Common Stock by the OTCBB or any other successor
organization for such day, then the average of the high and low bid and asked
price of any of the market makers for the Common Stock as reported on the OTCBB
or in the “pink sheets” by the Pink Sheets, LLC on the last five (5) Trading
Days; or (e) in all other cases, the fair market value of a share of Common
Stock as determined by an independent appraiser selected in good faith by the
holder and reasonably acceptable to the Company.

     

    
      
        
        

      

      
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    “Warrants A” means the
warrants to purchase 1,955,132 shares of Common Stock with an exercise price of
$0.35 per share expiring on September 19, 2011 currently held by the
Purchaser.

     

    ARTICLE
II

    PURCHASE
AND SALE

     

    2.1       
 Closing.  On
the Closing Date, upon the terms and subject to the conditions set forth herein,
concurrent with the execution and delivery of this Agreement by the parties
hereto, the Purchaser agrees to purchase, and the Company agrees to sell
1,400,011 shares of Series A Convertible Preferred Stock for aggregate
consideration consisting  of $250,000 (the “Purchase Price”) and
the return of the Warrants A to the Company for cancellation.  On the
Closing Date, subject to the terms of this Agreement, Purchaser shall cause the
Purchase Price and the Warrants A to be delivered to the Company.  The
Purchase Pricee shall be delivered via wire transfer or a certified check in
immediately available funds.  The Company shall deliver to the
Purchaser the Series A Convertible Preferred Stock and the other items set forth
in Section 2.2
issuable at the Closing.  Upon satisfaction of the conditions set
forth in Sections
2.2 and 2.3, the Closing
shall occur at the offices of Sichenzia Ross Friedman Ference LLP, 61 Broadway,
New York 10006, or such other location as the parties shall mutually
agree.

     

    2.2        
Deliveries.

     

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

     

    (i)           this
Agreement duly executed by the Company;

     

    (ii)          a
certificate evidencing 1,400,011 shares of Series A Convertible Preferred
Stock;

     

    (iii)         any
required consents or waivers;

    

    (iv)         the
Escrow Agreement duly executed by the Company;

    

    (vii)       
the Release Notice (as defined in the Escrow Agreement) duly executed by the
Company; and

     

    (b)           On
or prior to the Closing Date, the Purchaser shall deliver or cause to be
delivered to the Company the following:

     

    
      
        
        

      

      
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    (i)           this
Agreement duly executed by such Purchaser;

     

    (ii)          the
Warrants A;

     

    (iii)         the
Escrow Agreement duly executed by the Purchaser;

     

    (iv)         the
Release Notice (as defined in the Escrow Agreement) for the delivery of the
Purchase Price duly executed by the Purchaser.

     

    2.3         Closing
Conditions.

     

    (a)           The
obligations of the Company hereunder in connection with the Closing are subject
to the following conditions being met:

     

    (i)           the
accuracy in all material respects when made and on the Closing Date of the
representations and warranties of the Purchaser contained herein;

     

    (ii)          all
obligations, covenants and agreements of the Purchaser required to be performed
at or prior to the Closing Date shall have been performed; and

     

    (iii)         the
delivery by the Purchaser of the items set forth in Section 2.2(b) of
this Agreement.

     

    (b)           The
obligations of the Purchaser hereunder in connection with the Closing are
subject to the following conditions being met:

     

    (i)           the
accuracy in all material respects on the Closing Date of the representations and
warranties of the Company contained herein;

     

    (ii)          all
obligations, covenants and agreements of the Company required to be performed at
or prior to the Closing Date shall have been performed;

     

    (iii)         the
delivery by the Company of the items set forth in Section 2.2(a) of
this Agreement; and

     

    (iv)         there
shall have been no Material Adverse Effect with respect to the Company since the
date of the balance sheet (the “Balance Sheet”) included in the annual report on
Form 10-K for the year ended December 31, 2008 filed with the SEC on April 13,
2009(the “Form 10-K”).

     

    ARTICLE
III

    REPRESENTATIONS
AND WARRANTIES

     

    3.1         Representations and
Warranties of the Company.  Except as set forth under the
corresponding section of the disclosure schedules delivered to the Purchaser
concurrently herewith (the “Disclosure
Schedules”) which Disclosure Schedules shall be deemed a part hereof and
to qualify any representation or warranty otherwise made herein to the extent of
such disclosure, the Company hereby makes the representations and warranties set
forth below to Purchaser.

     

    
      
        
        

      

      
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    (a)           Subsidiaries.  All
of the direct and indirect subsidiaries of the Company are set forth on Schedule
3.1(a).  The Company owns, directly or indirectly, all of the
capital stock or other equity interests of each Subsidiary free and clear of any
Liens, and all the issued and outstanding shares of capital stock of each
Subsidiary are validly issued and are fully paid, non-assessable and free of
preemptive and similar rights to subscribe for or purchase
securities.  If the Company has no Subsidiaries, then all other
references in the Transaction Documents to the Subsidiaries or any of them will
be disregarded.

     

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

     

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

     

    
      
        
        

      

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

     

    (e)           Filings, Consents and
Approvals.  The Company is not required to obtain any consent,
waiver, authorization or order of, give any notice to, or make any filing or
registration with, any court or other federal, state, local or other
governmental authority or other Person in connection with the execution,
delivery and performance by the Company of the Transaction Documents, other than
pursuant to Section
4.9 hereof, and the filing of Form D with the Commission and such filings
as are required to be made under applicable state securities
laws  (the “Required
Approvals”).

     

    (f)           Issuance of the
Securities.  The Securities are duly authorized and, when
issued and paid for in accordance with the applicable Transaction Documents,
will be duly and validly issued, fully paid and nonassessable, free and clear of
all Liens imposed by the Company other than restrictions on transfer provided
for in the Transaction Documents.  The Underlying Shares, when issued
in accordance with the terms of the Transaction Documents, will be validly
issued, fully paid and nonassessable, free and clear of all Liens imposed by the
Company.  The Company will have reserved from its duly authorized
capital stock a number of shares of Common Stock for issuance of the Underlying
Shares at least equal to the Required Minimum on the date hereof.

     

    
      
        
        

      

      
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    (g)           Capitalization.  The
capitalization of the Company is as set forth on Schedule
3.1(g).  Except as set forth on Schedule 3.1(g), no Person has
any right of first refusal, preemptive right, right of participation, or any
similar right to participate in the transactions contemplated by the Transaction
Documents.  Except as a result of the purchase and sale of the
Securities and as set forth on Schedule 3.1(g),
there are no outstanding options, warrants, script rights to subscribe to, calls
or commitments of any character whatsoever relating to, or securities, rights or
obligations convertible into or exercisable or exchangeable for, or giving any
Person any right to subscribe for or acquire, any shares of Common Stock, or
contracts, commitments, understandings or arrangements by which the Company or
any Subsidiary is or may become bound to issue additional shares of Common Stock
or Common Stock Equivalents.  The issuance and sale of the Securities
will not obligate the Company to issue 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 of such securities.  All of the
outstanding shares of capital stock of the Company are validly issued, fully
paid and nonassessable, have been issued in compliance with all federal and
state securities laws, and none of such outstanding shares was issued in
violation of any preemptive rights or similar rights to subscribe for or
purchase securities.  No further approval or authorization of any
stockholder, the Board of Directors of the Company or others is required for the
issuance and sale of the Securities.  There are no stockholders
agreements, voting agreements or other similar agreements with respect to the
Company’s capital stock to which the Company is a party or, to the knowledge of
the Company, between or among any of the Company’s stockholders.

     

    (h)           SEC Reports; Financial
Statements.  The Company has filed all reports, schedules,
forms, statements and other documents required to be filed by the Company under
the Securities Act and the Exchange Act, including pursuant to Section 13(a) or
15(d) thereof, for the two years preceding the date hereof (or such shorter
period as the Company was required by law or regulation to file such material)
(the foregoing materials, including the exhibits thereto and documents
incorporated by reference therein, being collectively referred to herein as the
“SEC Reports”)
on a timely basis or has received a valid extension of such time of filing and
has filed any such SEC Reports prior to the expiration of any such
extension.  As of their respective dates, the SEC Reports complied in
all material respects with the requirements of the Securities Act and the
Exchange Act, as applicable, and none of the SEC Reports, when filed, contained
any untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.  The financial statements of the Company included in the
SEC Reports comply in all material respects with applicable accounting
requirements and the rules and regulations of the Commission with respect
thereto as in effect at the time of filing.  Such financial statements
have been prepared in accordance with United States generally accepted
accounting principles applied on a consistent basis during the periods involved
(“GAAP”),
except as may be otherwise specified in such financial statements or the notes
thereto and except that unaudited financial statements may not contain all
footnotes required by GAAP, and fairly present in all material respects the
financial position of the Company and its consolidated Subsidiaries as of and
for the dates thereof and the results of operations and cash flows for the
periods then ended, subject, in the case of unaudited statements, to normal,
immaterial, year-end audit adjustments.

     

    
      
        
        

      

      
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    (i)           Material
Changes.  Since the date of the latest financial statements
included within the Form 10-K, and delivered to the Purchaser (i) there has been
no event, occurrence or development that has had or that could reasonably be
expected to result in a Material Adverse Effect, (ii) the Company has not
incurred any material liabilities (contingent or otherwise) other than (A) trade
payables and accrued expenses incurred in the ordinary course of business
consistent with past practice and (B) liabilities not required to be reflected
in the Company’s financial statements pursuant to GAAP, (iii) the Company has
not materially altered its method of accounting, (iv) the Company has not
declared or made any dividend or distribution of cash or other property to its
stockholders or purchased, redeemed or made any agreements to purchase or redeem
any shares of its capital stock and (v) the Company has not issued any equity
securities to any officer, director or Affiliate, except pursuant to existing
Company stock option or stock grant plans.

     

    (j)           Litigation.  Except
as set forth in the SEC Reports, there is no action, suit, inquiry, notice of
violation, proceeding or investigation pending or, to the knowledge of the
Company, threatened against or affecting the Company, any Subsidiary or any of
their respective properties before or by any court, arbitrator, governmental or
administrative agency or regulatory authority (federal, state, county, local or
foreign) (collectively, an “Action”) which (i)
adversely affects or challenges the legality, validity or enforceability of any
of the Transaction Documents or the Securities or (ii) could, if there were an
unfavorable decision, have or reasonably be expected to result in a Material
Adverse Effect.  Neither the Company nor any Subsidiary, nor, to the
best of the knowledge of the Company, any director or officer thereof, is or has
been the subject of any Action involving a claim of violation of or liability
under federal or state securities laws or a claim of breach of fiduciary
duty.

     

    (k)           Labor
Relations.  No material labor dispute exists or, to the
knowledge of the Company, is imminent with respect to any of the employees of
the Company or any Subsidiary which could reasonably be expected to result in a
Material Adverse Effect. None of the Company’s or its Subsidiaries’ employees is
a member of a union that relates to such employee’s relationship with the
Company, and neither the Company nor any of its Subsidiaries is a party to a
collective bargaining agreement, and the Company and its Subsidiaries believe
that their relationships with their employees are good.  No executive
officer, to the knowledge of the Company, is, or is now expected to be, in
violation of any material term of any employment contract, confidentiality,
disclosure or proprietary information agreement or non-competition agreement, or
any other contract or agreement or any restrictive covenant, and, to the
knowledge of the Company, the continued employment of each such executive
officer does not subject the Company or any of its Subsidiaries to any liability
with respect to any of the foregoing matters.  To the knowledge of the
Company, the Company and its Subsidiaries are in compliance with all U.S.
federal, state, local and foreign laws and regulations relating to employment
and employment practices, terms and conditions of employment and wages and
hours, except where the failure to be in compliance could not, individually or
in the aggregate, reasonably be expected to have a Material Adverse
Effect.

     

    
      
        
        

      

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

     

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

     

    (n)           Title to
Assets.  The Company and the Subsidiaries have good and
marketable title in fee simple to all real property owned by them and good and
marketable title in all personal property owned by them that is material to the
business of the Company and the Subsidiaries, in each case free and clear of all
Liens, except for Liens as do not materially affect the value of such property
and do not materially interfere with the use made and proposed to be made of
such property by the Company and the Subsidiaries, Liens for the payment of
federal, state or other taxes, the payment of which is neither delinquent nor
subject to penalties.  Any real property and facilities held under
lease by the Company and the Subsidiaries are held by them under valid,
subsisting and enforceable leases with which the Company and the Subsidiaries
are in compliance.

     

    (o)           Patents and
Trademarks.  The Company and the Subsidiaries have, or have
rights to use, all patents, patent applications, trademarks, trademark
applications, service marks, trade names, trade secrets, inventions, copyrights,
licenses and other intellectual property rights and similar rights necessary or
material for use in connection with their respective businesses as described in
the SEC Reports and which the failure to so have could have a Material Adverse
Effect (collectively, the “Intellectual Property
Rights”).  Neither the Company nor any Subsidiary has received
a notice (written or otherwise) that the Intellectual Property Rights used by
the Company or any Subsidiary violate or infringe upon the rights of any Person
unless such notice has been resolved without a Material Adverse Effect. To the
knowledge of the Company, all such Intellectual Property Rights are enforceable
and there is no existing infringement by another Person of any of the
Intellectual Property Rights.  The Company and its Subsidiaries have
taken reasonable security measures to protect the secrecy, confidentiality and
value of all of their intellectual properties, except where failure to do so
could not, individually or in the aggregate, reasonably be expecting to have a
Material Adverse Effect.

     

    
      
        
        

      

      
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    (p)           Insurance.   Except
as set forth on Schedule 3.1(p), the Company and the Subsidiaries are insured by
insurers of recognized financial responsibility against such losses and risks
and in such amounts as are prudent and customary in the businesses in which the
Company and the Subsidiaries are engaged, including, but not limited to,
directors and officers insurance coverage at least equal to the aggregate
Subscription Amount.  Neither the Company nor any Subsidiary has any
reason to believe that it will not be able to renew its existing insurance
coverage as and when such coverage expires or to obtain similar coverage from
similar insurers as may be necessary to continue its business without a
significant increase in cost.

     

    (q)           Transactions With Affiliates
and Employees.  Except as set forth in the SEC Reports, none of the
officers or directors of the Company or any Subsidiary and, to the knowledge of
the Company, none of the employees of the Company or any Subsidiary is presently
a party to any transaction with the Company or any Subsidiary (other than for
services as employees, officers and directors), including any contract,
agreement or other arrangement providing for the furnishing of services to or
by, providing for rental of real or personal property to or from, or otherwise
requiring payments to or from any officer, director or such employee or, to the
knowledge of the Company, any entity in which any officer, director, or any such
employee has a substantial interest or is an officer, director, trustee or
partner, other than (i) for payment of salary or consulting fees for services
rendered, (ii) reimbursement for expenses incurred on behalf of the Company or a
Subsidiary and (iii) for other employee benefits, including stock option or
stock grant agreements under any stock plans of the Company.

     

    (r)           No Disagreements with
Auditors and Lawyers.  To the knowledge of the Company, there
are no material disagreements of any kind presently existing, or reasonably
anticipated by the Company to arise, between the Company and the auditors and
lawyers formerly or presently employed by the Company.

     

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

     

    (t)           Private
Placement.  Assuming the accuracy of the Purchaser’s
representations and warranties set forth in Section 3.2, no
registration under the Securities Act is required for the offer and sale of the
Securities by the Company to the Purchaser as contemplated hereby.

     

    
      
        
        

      

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

     

    (v)           Registration
Rights.  No Person has any right to cause the Company to effect
the registration under the Securities Act of any securities of the
Company.

     

    (w)           Disclosure.  All
disclosure furnished by or on behalf of the Company to the Purchaser regarding
the Company, its business and the transactions contemplated hereby, including
the Disclosure Schedules to this Agreement, is true and correct and does not
contain any untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements made therein, in light of the
circumstances under which they were made, not misleading.  The Company
acknowledges and agrees that Purchaser has not made any representations or
warranties with respect to the transactions contemplated hereby other than those
specifically set forth in Section 3.2
hereof.

     

    (x)           No Integrated
Offering. Assuming the accuracy of the Purchaser’s representations and
warranties set forth in Section 3.2, neither
the Company, nor any of its affiliates, nor any Person acting on its or their
behalf has, directly or indirectly, made any offers or sales of any security or
solicited any offers to buy any security, under circumstances that would cause
this offering of the Securities to be integrated with prior offerings by the
Company for purposes of the Securities Act.

     

    (y)           Solvency.  As
set forth in the financial statements, included in the Form 10-K, the auditors
for the Company included a “going concern” note.  The Company does not
intend to incur debts beyond its ability to pay such debts as they mature
(taking into account the timing and amounts of cash to be payable on or in
respect of its debt).  The Company has no knowledge of any facts or
circumstances which lead it to believe that it will file for reorganization or
liquidation under the bankruptcy or reorganization laws of any jurisdiction
within one (1) year from the Closing Date.

     

    (z)           All outstanding
secured and unsecured Indebtedness of the Company or any Subsidiary, or for
which the Company or any Subsidiary has commitments is set forth in the SEC
Reports.  For the purposes of this Agreement, “Indebtedness” shall
mean (a) any liabilities for borrowed money or amounts owed (other than trade
accounts payable incurred in the ordinary course of business) in excess of
$25,000, (b) all guaranties, endorsements and other contingent obligations in
respect of Indebtedness of others, whether or not the same are or should be
reflected in the Company’s balance sheet (or the notes thereto), except
guaranties by endorsement of negotiable instruments for deposit or collection or
similar transactions in the ordinary course of business; and (c) the present
value of any lease payments in excess of $25,000 due under leases required to be
capitalized in accordance with GAAP.  Neither the Company nor any
Subsidiary is in default with respect to any Indebtedness.

     

    
      
        
        

      

      
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    (aa)           Tax Status. The
Company has timely filed all tax returns, reports, declarations, statements, and
other information required by law to be filed with or supplied to any taxing
authority with respect to the Taxes (as defined below) owed by the Company (the
“Tax
Returns”).  All Taxes due and payable on or before the Closing
have been paid or will be paid prior to the time they become
delinquent.  All Taxes that the Company is or was required by law to
withhold or collect have been duly withheld or collected and, to the extent
required, have been paid to the proper governmental entity.  The
Company has not been advised (a) that any of the Tax Returns have been or are
being examined or audited as of the date hereof, (b) that any such examination
or audit is currently threatened or contemplated, or (c) of any deficiency in
assessment or proposed judgment to its Taxes.  The Company has no
knowledge of any liability for any Taxes to be imposed upon its properties or
assets as of the date of this Agreement that are not adequately provided for on
the Balance Sheet.  The Company has delivered or made available to the
Purchaser true and complete copies of all federal income Tax Returns,
examination reports, and statements of deficiencies filed by, assessed against
or agreed to by the Company in the past three years.  The Company has
never been a member of a consolidated or affiliated group of corporations filing
a consolidated or combined income Tax Return, nor does the Company have any
liability for Taxes of any other person or entity.  The Company is not
a party to any tax allocation or sharing arrangement or tax indemnity
agreement.  For purposes of this Agreement, the term “Taxes”
shall mean all taxes, charges, fees, levies, or other similar assessments or
liabilities, including, without limitation, income, gross receipts, ad valorem,
premium, value-added, excise, real property, personal property, sales, use,
transfer, withholding, employment, payroll, and franchise taxes imposed by the
United States of America or any other governmental entity, and any interest,
fines, penalties, assessments, or additions to tax resulting from, attributable
to or incurred in connection with any tax or any contest or dispute
thereof.

     

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

     

    (cc)           Acknowledgment Regarding
Purchaser’s Purchase of Securities.  The Company acknowledges
and agrees that the Purchaser is acting solely in the capacity of an arm’s
length purchaser with respect to the Transaction Documents and the transactions
contemplated thereby.  The Company further acknowledges that Purchaser
is not acting as a financial advisor or fiduciary of the Company (or in any
similar capacity) with respect to the Transaction Documents and the transactions
contemplated thereby and any advice given by Purchaser or any of its
representatives or agents in connection with the Transaction Documents and the
transactions contemplated thereby is merely incidental to the Purchaser’s
purchase of the Securities.  The Company further represents to
Purchaser that the Company’s decision to enter into this Agreement and the other
Transaction Documents has been based solely on the independent evaluation of the
transactions contemplated hereby by the Company and its
representatives.

     

    
      
        
        

      

      
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    (dd)           Acknowledgement Regarding
Purchaser’s Trading Activity.  Anything in this Agreement or
elsewhere herein to the contrary notwithstanding, it is understood and
acknowledged by the Company (i) that Purchaser has not been asked to agree, nor
has Purchaser agreed, to desist from purchasing or selling, long and/or short,
securities of the Company, or “derivative” securities based on securities issued
by the Company or to hold the Securities for any specified term; (ii) that past
or future open market or other transactions by Purchaser, including Short Sales,
and specifically including, without limitation, Short Sales or “derivative”
transactions, before or after the closing of this or future private placement
transactions, may negatively impact the market price of the Company’s
publicly-traded securities; (iii) that Purchaser, and counter-parties in
“derivative” transactions to which Purchaser is a party, directly or indirectly,
presently may have a “short” position in the Common Stock, and (iv) that
Purchaser shall not be deemed to have any affiliation with or control over any
arm’s length counter-party in any “derivative” transaction.  The
Company further understands and acknowledges that (a)  Purchaser may
engage in hedging activities at various times during the period that the
Securities are outstanding, including, without limitation, during the periods
that the value of the Underlying Shares deliverable with respect to Securities
are being determined and (b) such hedging activities (if any) could reduce the
value of the existing stockholders' equity interests in the Company at and after
the time that the hedging activities are being conducted.  The Company
acknowledges that such aforementioned hedging activities do not constitute a
breach of any of the Transaction Documents.

     

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

     

    3.2                       Representations and
Warranties of the Purchaser.  Purchaser hereby represents and
warrants as of the date hereof and as of the Closing Date to the Company as
follows:

     

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

     

    
      
        
        

      

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

     

    (c)           Purchaser
Status.  At the time Purchaser was offered the Securities, it
was, and at the date hereof it is, and on each date on which it converts any
Series A Convertible Preferred Stock it will be either: (i) an “accredited
investor” as defined in Rule 501 under the Securities Act or (ii) a “qualified
institutional buyer” as defined in Rule 144A (a) under the Securities
Act.  Such Purchaser is not required to be registered as a
broker-dealer under Section 15 of the Exchange Act.

     

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

     

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

     

    (f)           Short Sales and
Confidentiality Prior To The Date Hereof.  Other than the
transaction contemplated hereunder, Purchaser has not directly or indirectly,
nor has any Person acting on behalf of or pursuant to any understanding with
Purchaser, executed any disposition, including Short Sales, in the securities of
the Company during the period commencing from the time that Purchaser first
received a term sheet (written or oral) from the Company or any other Person
setting forth the material terms of the transactions contemplated hereunder
until the date hereof (“Discussion
Time”).  Notwithstanding the foregoing, in the case of a
Purchaser that is a multi-managed investment vehicle whereby separate portfolio
managers manage separate portions of Purchaser's assets and the portfolio
managers have no direct knowledge of the investment decisions made by the
portfolio managers managing other portions of Purchaser's assets, the
representation set forth above shall only apply with respect to the portion of
assets managed by the portfolio manager that made the investment decision to
purchase the Securities covered by this Agreement.  Other than to
other Persons party to this Agreement, Purchaser has maintained the
confidentiality of all disclosures made to it in connection with this
transaction (including the existence and terms of this
transaction).

     

    
      
        
        

      

      
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    (g)           Risk
Factors.  Purchaser hereby agrees and acknowledges that it has
been informed of the following: (i) there are factors relating to the subsequent
transfer of any Securities acquired hereunder that could make the resale of such
Securities difficult; and (ii) there is no guarantee that Purchaser will realize
any gain from the purchase of the Securities.  The purchase of the
Securities involves a high degree of risk and is subject to many
uncertainties.  These risks and uncertainties may adversely affect the
Company’s business, operating results and financial condition.  In
such an event, the trading price for the Common Stock could decline
substantially and Purchaser could lose all or part of its
investment.

     

    (h)           Due
Diligence.  Purchaser hereby agrees and acknowledges that
Purchaser has reviewed the SEC Reports and has had an opportunity to meet with
representatives of the Company and to ask questions and receive answers to
Purchaser’s satisfaction regarding the Company’s proposed business and the
Company’s financial condition in order to assist Purchaser in evaluating the
merits and risks of purchasing the Securities.  All material documents
and information pertaining to the Company and the purchase of Securities
hereunder that have been requested by Purchaser have been made available to
Purchaser.

     

    (i)           Certain
Fees.  Purchaser has not employed any broker or finder or
incurred any liability for any brokerage or investment banking fees,
commissions, finders’ structuring fees, financial advisory fees or other similar
fees in connection with the Transaction Documents.

     

    ARTICLE
IV

    OTHER
AGREEMENTS OF THE PARTIES

     

    4.1           Transfer
Restrictions.

     

    (a)           The
Securities may only be disposed of in compliance with state and federal
securities laws.  In connection with any transfer of Securities other
than pursuant to an effective registration statement or Rule 144, to the Company
or to an Affiliate of  Purchaser or in connection with a pledge as
contemplated in Section 4.1(b), the
Company may require the transferor thereof to provide to the Company an opinion
of counsel selected by the transferor and reasonably acceptable to the Company,
the form and substance of which opinion shall be reasonably satisfactory to the
Company, to the effect that such transfer does not require registration of such
transferred Securities under the Securities Act.  As a condition of
transfer, any such transferee shall agree in writing to be bound by the terms of
this Agreement and shall have the rights of a Purchaser under this
Agreement.

     

    
      
        
        

      

      
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    (b)           The
Purchaser agrees to the imprinting, so long as is required by this Section 4.1, of a
legend on any of the Securities in the following form:

     

    NEITHER
THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS [EXERCISABLE]
[CONVERTIBLE] HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION
OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO
SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE
COMPANY.  THIS SECURITY AND THE SECURITIES ISSUABLE UPON [EXERCISE]
[CONVERSION] OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE
MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.

     

    (c)           The
Company acknowledges and agrees that Purchaser may from time to time pledge
pursuant to a bona fide margin agreement with a registered broker-dealer or
grant a security interest in some or all of the Securities to a financial
institution that is an “accredited investor” as defined in Rule 501(a) under the
Securities Act and who agrees to be bound by the provisions of this Agreement
and, if required under the terms of such arrangement, Purchaser may transfer
pledged or secured Securities to the pledgees or secured parties. Such a pledge
or transfer would not be subject to approval of the Company, provided, however,
the Company may require the Purchaser to provide to the Company an opinion of
counsel selected by the Purchaser and reasonably acceptable to the Company, the
form and substance of which opinion shall be reasonably satisfactory to the
Company to the effect that such transfer or pledge does not require registration
of such transferred or pledged Securities under the Securities
Act.  At Purchaser’s expense, the Company will execute and deliver
such reasonable documentation as a pledgee or secured party of Securities may
reasonably request in connection with a pledge or transfer of the
Securities.

     

    4.2           Acknowledgment of
Dilution.  The Company acknowledges that the issuance of the
Securities may result in dilution of the outstanding shares of Common Stock,
which dilution may be substantial under certain market
conditions.  The Company further acknowledges that its obligations
under the Transaction Documents, including without limitation its obligation to
issue the Underlying Shares pursuant to the Transaction Documents, are
unconditional and absolute and not subject to any right of set off,
counterclaim, delay or reduction, regardless of the effect of any such dilution
or any claim the Company may have against any Purchaser and regardless of the
dilutive effect that such issuance may have on the ownership of the other
stockholders of the Company.

     

    
      
        
        

      

      
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    4.3           Integration.  The
Company shall not sell, offer for sale or solicit offers to buy or otherwise
negotiate in respect of any security (as defined in Section 2 of the Securities
Act) that would be integrated with the offer or sale of the Securities in a
manner that would require the registration under the Securities Act of the sale
of the Securities to the Purchaser.

     

    4.4           Shareholder Rights
Plan.  No claim will be made or enforced by the Company or,
with the consent of the Company, any other Person, that Purchaser is an
“Acquiring Person” under any control share acquisition, business combination,
poison pill (including any distribution under a rights agreement) or similar
anti-takeover plan or arrangement in effect or hereafter adopted by the Company,
or that Purchaser could be deemed to trigger the provisions of any such plan or
arrangement, by virtue of receiving Securities under the Transaction Documents
or under any other agreement between the Company and the Purchaser.

     

    4.5           Reserved..

     

    4.6           Reimbursement.  If
Purchaser becomes involved in any capacity in any Proceeding by or against any
Person who is a stockholder of the Company (except as a result of sales,
pledges, margin sales and similar transactions by such Purchaser to or with any
other stockholder), solely as a result of Purchaser’s acquisition of the
Securities from the Company under this Agreement, the Company will reimburse
Purchaser for its reasonable legal and other expenses (including the cost of any
investigation preparation and travel in connection therewith) incurred in
connection therewith, as such expenses are incurred.  The
reimbursement obligations of the Company under this paragraph shall be in
addition to any liability which the Company may otherwise have, shall extend
upon the same terms and conditions to any Affiliates of the Purchaser who are
actually named in such action, proceeding or investigation, and partners,
directors, agents, employees and controlling persons (if any), as the case may
be, of the Purchaser and any such Affiliate, and shall be binding upon and inure
to the benefit of any successors, assigns, heirs and personal representatives of
the Company, the Purchaser and any such Affiliate and any such
Person.  The Company also agrees that neither the Purchaser nor any
such Affiliates, partners, directors, agents, employees or controlling persons
shall have any liability to the Company or any Person asserting claims on behalf
of or in right of the Company solely as a result of acquiring the Securities
under this Agreement.

     

    
      
        
        

      

      
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    4.7           Indemnification of
Purchaser.  Subject to the provisions of this Section 4.7, the
Company will indemnify and hold Purchaser and its directors, officers,
shareholders, members, partners, employees and agents (and any other Persons
with a functionally equivalent role of a Person holding such titles
notwithstanding a lack of such title or any other title), each Person who
controls Purchaser (within the meaning of Section 15 of the Securities Act and
Section 20 of the Exchange Act), and the directors, officers, shareholders,
agents, members, partners or employees (and any other Persons with a
functionally equivalent role of a Person holding such titles notwithstanding a
lack of such title or any other title) of such controlling person (each, a
“Purchaser
Party”) harmless from any and all losses, liabilities, obligations,
claims, contingencies, damages, costs and expenses, including all judgments,
amounts paid in settlements, court costs and reasonable attorneys’ fees and
costs of investigation that any such Purchaser Party may suffer or incur as a
result of or relating to (a) any breach of any of the representations,
warranties, covenants or agreements made by the Company in this Agreement or in
the other Transaction Documents or (b) any action instituted against Purchaser,
or any of its Affiliates, by any stockholder of the Company who is not an
Affiliate of such Purchaser, solely as a result of such Purchaser’s acquisition
of the Securities pursuant to this Agreement (unless such action is based upon a
breach of such Purchaser’s representations, warranties or covenants under the
Transaction Documents or any agreements or understandings such Purchaser may
have with any such stockholder or any violations by the Purchaser of state or
federal securities laws or any conduct by such Purchaser which constitutes
fraud, gross negligence, willful misconduct or malfeasance).  If any
action shall be brought against any Purchaser Party in respect of which
indemnity may be sought pursuant to this Agreement, such Purchaser Party shall
promptly notify the Company in writing, and the Company shall have the right to
assume the defense thereof with counsel of its own choosing reasonably
acceptable to the Purchaser Party.  Any Purchaser Party shall have the
right to employ separate counsel in any such action and participate in the
defense thereof, but the fees and expenses of such counsel shall be at the
expense of such Purchaser Party except to the extent that (i) the employment
thereof has been specifically authorized by the Company in writing, (ii) the
Company has failed after a reasonable period of time to assume such defense and
to employ counsel or (iii) in such action there is, in the reasonable opinion of
such separate counsel, a material conflict on any material issue between the
position of the Company and the position of such Purchaser Party, in which case
the Company shall be responsible for the reasonable fees and expenses of no more
than one (1) such separate counsel.  The Company will not be liable to
any Purchaser Party under this Agreement (i) for any settlement by a Purchaser
Party effected without the Company’s prior written consent, which shall not be
unreasonably withheld or delayed; or (ii) to the extent, but only to the extent
that a loss, claim, damage or liability is attributable to any Purchaser Party’s
breach of any of the representations, warranties, covenants or agreements made
by such Purchaser Party in this Agreement or in the other Transaction Documents,
except if such claim arises primarily from a breach of such Purchaser’s
representations, warranties or covenants under the Transaction Documents or any
agreements or understandings such Purchaser may have with any such stockholder
or any violations by the Purchaser of state or federal securities laws or any
conduct by such Purchaser which constitutes fraud, gross negligence, willful
misconduct or malfeasance.

     

    4.8           Reservation and Listing of
Securities.

     

    (a)           The
Company shall maintain a reserve from its duly authorized shares of Common Stock
for issuance pursuant to the Transaction Documents in such amount as may be
required to fulfill its obligations in full under the Transaction
Documents.

     

    (b)           If,
on any date, the number of authorized but unissued (and otherwise unreserved)
shares of Common Stock is less than the Required Minimum on such date, then the
Board of Directors of the Company shall use commercially reasonable efforts to
amend the Company’s certificate or articles of incorporation to increase the
number of authorized but unissued shares of Common Stock to at least the
Required Minimum at such time, as soon as possible and in any event not later
than the ninetieth (90th) day
after such date.

     

    4.9           Waiver of Anti-Dilution
Rights.  The Company and the Purchaser hereby acknowledge that
the issuance and sale of the Securities may trigger certain anti-dilution rights
that the Purchaser is entitled to under certain other agreements pursuant to
which the Purchaser acquired other securities of the Company.  The
Purchaser hereby waives any and all such anti-dilution rights and hereby
acknowledges that the issuance and sale of the Securities will not result in
adjustments to the purchase prices, conversion prices, or exercise prices of any
other outstanding securities of the Company held by the Purchaser.

     

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

    

     

    4.10         Reserved.  .

     

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

     

    4.12         Short Sales and
Confidentiality After The Date Hereof.  The Purchaser covenants
that neither it nor any Affiliate acting on its behalf or pursuant to any
understanding with it will execute any Short Sales during the period commencing
at the Discussion Time and ending at the time that the transactions contemplated
by this Agreement are first publicly announced.  The Purchaser
covenants that until such time as the transactions contemplated by this
Agreement are publicly disclosed by the Company, such Purchaser will maintain
the confidentiality of all disclosures made to it in connection with this
transaction (including the existence and terms of this
transaction).  Notwithstanding the foregoing, Purchaser does not make
any representation, warranty or covenant hereby that it will not engage in Short
Sales in the securities of the Company after the time that the transactions
contemplated by this Agreement are first publicly announced.

     

    4.13         Securities Laws Disclosure
Publicity.  The Company shall, within 4 Business Days of the
Closing Date, file the Form 8-K with the Commission.  The Company and
each Purchaser shall consult with each other in issuing any other press releases
with respect to the transactions contemplated hereby, and neither the Company
nor any Purchaser shall issue any such press release nor otherwise make any such
public statement without the prior consent of the Company, with respect to any
press release of any Purchaser, or without the prior consent of the Purchaser,
with respect to any press release of the Company, which consent shall not
unreasonably be withheld or delayed, except if such disclosure is required by
law, in which case the disclosing party shall promptly provide the other party
with prior notice of such public statement or
communication.  Notwithstanding the foregoing, the Company shall not
publicly disclose the name of any Purchaser, or include the name of any
Purchaser in any filing with the Commission or any regulatory agency or Trading
Market, without the prior written consent of such Purchaser, except: (a) as
required by federal securities law in connection with (i) any registration
statement and (ii) the filing of final Transaction Documents (including
signature pages thereto) with the Commission and (b) to the extent such
disclosure is required by law or Trading Market regulations, in which case the
Company shall provide the Purchasers with prior notice of such disclosure
permitted under this clause (b).

     

    
      
        
        

      

      
        21

        
          

        

      

      
        
        

      

    

     

    4.14         Furnishing of Information;
Public Information.

     

    (a) Until
the earliest of the time that (i) Purchaser does not own any Securities, the
Company covenants to timely file (or obtain extensions in respect thereof and
file within the applicable grace period) all reports required to be filed by the
Company after the date hereof pursuant to the Exchange Act.  As long
Purchaser owns Securities, if the Company is not required to file reports
pursuant to the Exchange Act, it will prepare and furnish to the Purchasers and
make publicly available in accordance with Rule 144(c) such information as is
required for the Purchaser to sell the Securities under Rule 144.  The
Company further covenants that it will take such further action as any holder of
Securities may reasonably request, to the extent required from time to time to
enable such Person to sell such Securities without registration under the
Securities Act within the requirements of the exemption provided by Rule
144.

     

    (b) At
any time during the period commencing from the one year anniversary of the date
hereof and ending on the earlier of (i) at such time that all of the Securities
may be sold without the requirement for the Company to be in compliance with
Rule 144(c)(1) and otherwise without restriction or limitation pursuant to Rule
144 and (ii) two years from the date hereof, if the Company shall fail for any
reason to satisfy the current public information requirement under Rule 144(c)
(a “Public Information
Failure”) then, in addition to such Purchaser’s other available remedies,
the Company shall pay to a Purchaser, in cash, as partial liquidated damages and
not as a penalty, by reason of any such delay in or reduction of its ability to
sell the Securities, an amount in cash equal to one percent (1%) of the
aggregate Purchase Price of such Purchaser’s Securities on the day of a Public
Information Failure and on every thirtieth (30th) day
(pro rated for periods totaling less than thirty days) thereafter until the
earlier of (a) the date such Public Information Failure is cured and (b) such
time that such public information is no longer required  for the Purchaser
to transfer the Underlying Shares pursuant to Rule 144.  The payments to
which a Purchaser shall be entitled pursuant to this Section are referred to
herein as “Public
Information Failure Payments.”  Public Information Failure Payments shall be paid
on the earlier of (i) the last day of the calendar month during which such
Public Information Failure Payments are incurred
and (ii) the fifth (5th)
Business Day after the event or failure giving rise to the Public Information
Failure Payments is
cured.  In the event the Company fails to make Public Information
Failure Payments in
a timely manner, such Public Information Failure Payments shall bear
interest at the rate of 1.0% per month (prorated for partial months) until paid
in full. Nothing herein shall limit such Purchaser’s right to pursue actual
damages for the Public Information Failure, and such Purchaser shall have the
right to pursue all remedies available to it at law or in equity including,
without limitation, a decree of specific performance and/or injunctive
relief.

     

    ARTICLE
V

    MISCELLANEOUS

     

    5.1           Fees and
Expenses.  Except as expressly set forth in the Transaction
Documents to the contrary, each party shall pay the fees and expenses of its
advisers, counsel, accountants and other experts, if any, and all other expenses
incurred by such party incident to the negotiation, preparation, execution,
delivery and performance of this Agreement.  The Company shall pay all
transfer agent fees, stamp taxes and other taxes and duties levied in connection
with the delivery of any Securities to the Purchaser.

     

    
      
        
        

      

      
        22

        
          

        

      

      
        
        

      

    

     

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

     

    5.3           Notices.  Any
and all notices or other communications or deliveries required or permitted to
be provided hereunder shall be in writing and shall be deemed given and
effective on the earliest of (a) the date of transmission, if such notice or
communication is delivered via facsimile at the facsimile number set forth on
the signature pages attached hereto prior to 5:30 p.m. (New York City time) on a
Trading Day, (b) the next Trading Day after the date of transmission, if such
notice or communication is delivered via facsimile at the facsimile number set
forth on the signature pages attached hereto on a day that is not a Trading Day
or later than 5:30 p.m. (New York City time) on any Trading Day, (c) the second
(2nd)
Trading Day following the date of mailing, if sent by U.S. nationally recognized
overnight courier service, or (d) upon actual receipt by the party to whom such
notice is required to be given.  The address for such notices and
communications shall be as set forth on the signature pages attached
hereto.

     

    5.4           Amendments;
Waivers.  No provision of this Agreement may be waived,
modified, supplemented or amended except in a written instrument signed, in the
case of an amendment, by the Company and the Purchaser or, in the case of a
waiver, by the party against whom enforcement of any such waived provision is
sought.  No waiver of any default with respect to any provision,
condition or requirement of this Agreement shall be deemed to be a continuing
waiver in the future or a waiver of any subsequent default or a waiver of any
other provision, condition or requirement hereof, nor shall any delay or
omission of any party to exercise any right hereunder in any manner impair the
exercise of any such right.

     

    5.5           Headings.  The
headings herein are for convenience only, do not constitute a part of this
Agreement and shall not be deemed to limit or affect any of the provisions
hereof.

     

    5.6           Successors and
Assigns.  This Agreement shall be binding upon and inure to the
benefit of the parties and their successors and permitted
assigns.  The Company may not assign this Agreement or any rights or
obligations hereunder without the prior written consent of Purchaser (other than
by merger).  Purchaser may assign any or all of its rights under this
Agreement to any Person to whom such Purchaser assigns or transfers any
Securities, provided such transferee agrees in writing to be bound, with respect
to the transferred Securities, by the provisions of the Transaction Documents
that apply to the “Purchaser”.

     

    5.7           No Third-Party
Beneficiaries.  This Agreement is intended for the benefit of
the parties hereto and their respective successors and permitted assigns and is
not for the benefit of, nor may any provision hereof be enforced by, any other
Person.

     

    
      
        
        

      

      
        23

        
          

        

      

      
        
        

      

    

     

    5.8           Governing
Law.  All questions concerning the construction, validity,
enforcement and interpretation of the Transaction Documents shall be governed by
and construed and enforced in accordance with the internal laws of the State of
Florida, without regard to the principles of conflicts of law
thereof.  Each party agrees that all legal proceedings concerning the
interpretations, enforcement and defense of the transactions contemplated by
this Agreement and any other Transaction Documents (whether brought against a
party hereto or its respective affiliates, directors, officers, shareholders,
employees or agents) shall be commenced exclusively in the state and federal
courts sitting in Hillsborough County, Florida.  Each party hereby
irrevocably submits to the exclusive jurisdiction of the state and federal
courts sitting in Hillsborough County, Florida for the adjudication of any
dispute hereunder or in connection herewith or with any transaction contemplated
hereby or discussed herein (including with respect to the enforcement of any of
the Transaction Documents), and hereby irrevocably waives, and agrees not to
assert in any suit, action or proceeding, any claim that it is not personally
subject to the jurisdiction of any such court, that such suit, action or
proceeding is improper or is an inconvenient venue for such
proceeding.  Each party hereby irrevocably waives personal service of
process and consents to process being served in any such suit, action or
proceeding by mailing a copy thereof via registered or certified mail or
overnight delivery (with evidence of delivery) to such party at the address in
effect for notices to it under this Agreement and agrees that such service shall
constitute good and sufficient service of process and notice
thereof.  Nothing contained herein shall be deemed to limit in any way
any right to serve process in any other manner permitted by law.  The
parties hereby waive all rights to a trial by jury.  If either party
shall commence an action or proceeding to enforce any provisions of the
Transaction Documents, then the prevailing party in such action or proceeding
shall be reimbursed by the other party for its reasonable attorneys’ fees and
other costs and expenses incurred with the investigation, preparation and
prosecution of such action or proceeding.

     

    5.9           Survival.  The
representations, warranties, covenants and other agreements contained herein
shall survive the Closing and the delivery, exercise and/or conversion of the
Securities, as applicable for a period of two (2) years from the date of this
Agreement.

     

    5.10         Execution.  This
Agreement may be executed in two (2) or more counterparts, all of which when
taken together shall be considered one and the same agreement and shall become
effective when counterparts have been signed by each party and delivered to the
other party, it being understood that both parties need not sign the same
counterpart.  In the event that any signature is delivered by
facsimile transmission or by e-mail delivery of a “.pdf” format data file, such
signature shall create a valid and binding obligation of the party executing (or
on whose behalf such signature is executed) with the same force and effect as if
such facsimile or “.pdf” signature page were an original thereof.

     

    5.11         Severability. If any
term, provision, covenant or restriction of this Agreement is held by a court of
competent jurisdiction to be invalid, illegal, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions set forth herein
shall remain in full force and effect and shall in no way be affected, impaired
or invalidated, and the parties hereto shall use their commercially reasonable
efforts to find and employ an alternative means to achieve the same or
substantially the same result as that contemplated by such term, provision,
covenant or restriction.  It is hereby stipulated and declared to be
the intention of the parties that they would have executed the remaining terms,
provisions, covenants and restrictions without including any of such that may be
hereafter declared invalid, illegal, void or unenforceable.

     

    
      
        
        

      

      
        24

        
          

        

      

      
        
        

      

    

     

    5.12         Remedies.  In
addition to being entitled to exercise all rights provided herein or granted by
law, including recovery of damages, the Purchaser and the Company will be
entitled to specific performance under the Transaction Documents.  The
parties agree that monetary damages may not be adequate compensation for any
loss incurred by reason of any breach of obligations contained in the
Transaction Documents and hereby agrees to waive and not to assert in any action
for specific performance of any such obligation the defense that a remedy at law
would be adequate.

     

    5.13         Construction.  The
parties agree that each of them and/or their respective counsel has reviewed and
had an opportunity to revise the Transaction Documents and, therefore, the
normal rule of construction to the effect that any ambiguities are to be
resolved against the drafting party shall not be employed in the interpretation
of the Transaction Documents or any amendments hereto.

     

    (Remainder
of Page Intentionally Left Blank)

     (Signature
Pages Follow)

    
      
         

      

      
        25

        
          

        

      

      
         

      

    

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

     

    
      
        
          
            	
                    LATTICE
      INCORPORATED

                  	 
      	
                    Address for Notice:

                  
	 
      	 
      	 
      
	
                    By:

                  	 
      	 
      	
                    7150
      N. Park Drive, Suite 500

                  
	
                    Name:   Paul
      Burgess

                  	 
      	
                    Pennsauken,
      NJ 08109

                  
	
                    Title:     Chief
      Executive Officer

                  	 
      	 
      

          

        

      

    

    

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

      

    Gregory
Sichenzia, Esq.

    Sichenzia
Ross Friedman Ference LLP

    61
Broadway, 32nd
Floor

    New York,
New York  10006

    Tel:
(212) 930-9700

    Fax:
(212) 930-9725

    

    (Remainder
of Page Intentionally Left Blank)

    (Signature Page For Purchaser
Follows)

     

    
      
         

      

      
        26

        
          

        

      

      
         

      

    

    [PURCHASER
SIGNATURE PAGE TO SECURITIES

    PURCHASE
AGREEMENT]

    

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

     

    Name of
Purchaser:  Barron Partners LP

     

    
      
        	
                Signature of Authorized
      Signatory of Purchaser:

              	 
      

      

    

    

    
      
        	
                Name
      of Authorized Signatory:

              	
                 

              

      

    

    

    
      
        	
                Title
      of Authorized Signatory:

              	
                 

              

      

    

    

    
      
        	
                Email
      Address of Purchaser:

              	
                 

              

      

    

    

    
      
        	
                Facsimile
      Number of Purchaser:

              	
                 

              

      

    

    

    Jurisdiction
of Organization of Purchaser: Cayman Islands

     

    Address
for Notice of Purchaser:

    

    Address
for Delivery of Securities for Purchaser (if not same as above):

     

    
      
         

      

      
        27AGREEMENT

    

    April 9,
2010

    

    Trinad
Capital Master Fund, Ltd.

    2121
Avenue of the Stars, Suite 1650

    Los
Angeles, CA 90067

     

    

    Dear Mr.
Ellin:

    

    Reference
is hereby made to that certain Letter Agreement by and among George Elliott
(“Elliott”),
Trinad Capital Master Fund, Ltd., (“Trinad”) and ANAXMAR
Segregated Portfolio, dated April 28, 2009 (the “Letter Agreement”),
whereby, among other things, Elliott has been given the option to pay the Trinad
Fee and satisfy in full his obligations to Trinad under the Letter Agreement by
returning the NBLM Shares to Trinad, provided that Trinad shall have returned to
Elliott the stock certificate evidencing the Series B Preferred Stock (with the
appropriate stock powers).  This agreement confirms that Elliott has
elected to assign and transfer to Trinad the NBLM Shares owned by Elliott to
fully satisfy his obligations to Trinad under the Letter Agreement and that
Trinad in return hereby assigns and transfers to Elliott the Series B Preferred
Stock, on the terms and conditions set forth herein. Capitalized terms used
herein and not defined shall have the meanings ascribed to them in the Letter
Agreement.

    

    
      	
              1.  

            	
              Transfer
      of NBLM Shares. By executing this agreement and delivering the
      stock certificate representing the Noble Shares with the executed stock
      power in the form attached hereto as Exhibit A (or a Affidavit of Lost
      Certificate acceptable to Trinad), Elliott hereby assigns and transfers to
      Trinad 3,978,600 shares of common stock of Noble Medical Technologies,
      Inc. owned by Elliott.

            

    

    

    
      	
              2.  

            	
              Transfer
      of the Series B Preferred  Stock. By executing this
      agreement and delivering the stock certificate representing the Series B
      Preferred Stock with the executed stock power in the form attached hereto
      as Exhibit
      B, Trinad hereby assigns and transfers to Elliott the Series B
      Preferred Stock owned by Trinad and any of its
  investors.

            

    

    

    
      	
              3.  

            	
              Termination
      of Letter Agreement. Trinad and Elliott
      hereby acknowledge and agree that Trinad and Elliott have fully satisfied
      their obligations to each other under the Letter Agreement and that the
      Letter Agreement has no further force or effect as of the date
      hereof.

            

    

    

    
      	
              4.  

            	
              Representations
      and Warranties of Trinad. Trinad is the owner
      of the Series B Preferred Stock and has the full legal right, sole power
      and authority over the disposition of the Series B Preferred
      Stock.  The Series B Preferred Stock is free and clear of any
      liens, claims, encumbrances, charges, options or rights of third parties
      with respect thereto.  The Series B Preferred Stock has not been
      sold, conveyed, encumbered, hypothecated or otherwise transferred by
      Trinad except pursuant to this agreement.  Trinad has the legal
      right to enter into and to consummate the transactions contemplated hereby
      and otherwise to carry out its obligations hereunder.  This
      agreement constitutes the valid and binding obligation of
      Trinad.  The execution, delivery and performance by the Trinad
      of this agreement does not violate any contractual restriction contained
      in any agreement which binds or affects or purports to bind or affect
      Trinad. Trinad is not a party to any agreement, written or oral, creating
      rights in respect of any of such Series B Preferred Stock in any third
      party.  Trinad is not a party to any outstanding or authorized
      options, warrants, rights, calls, commitments, conversion rights, rights
      of exchange or other agreements of any character, contingent or otherwise,
      providing for the purchase, issuance or sale of any of the Series B
      Preferred Stock, and there are no restrictions of any kind on the transfer
      of any of the Series B Preferred Stock other than (a) restrictions on
      transfer imposed by the Securities Act of 1933, as amended (the
      “Securities Act”) and (b) restrictions on transfer imposed by applicable
      state securities or “blue sky”
laws.

            

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
      	
              5.  

            	
              Representations
      and Warranties of Elliott. Elliott
      is the owner of the NBLM Shares and has the full legal right, sole power
      and authority over the disposition of the NBLM Shares.  The NBLM
      Shares are free and clear of any liens, claims, encumbrances, charges,
      options or rights of third parties with respect thereto.  The
      NBLM Shares have not been sold, conveyed, encumbered, hypothecated or
      otherwise transferred by Elliott except pursuant to this
      agreement.  Elliott has the legal right to enter into and to
      consummate the transactions contemplated hereby and otherwise to carry out
      his obligations hereunder.  This agreement constitutes the valid
      and binding obligation of Elliott.  The execution, delivery and
      performance by the Elliott of this agreement does not violate any
      contractual restriction contained in any agreement which binds or affects
      or purports to bind or affect Elliott.  Elliott is not a party
      to any agreement, written or oral, creating rights in respect of any of
      such NBLM Shares in any third party.  Elliott is not a party to
      any outstanding or authorized options, warrants, rights, calls,
      commitments, conversion rights, rights of exchange or other agreements of
      any character, contingent or otherwise, providing for the purchase,
      issuance or sale of any of the NBLM Shares, and there are no restrictions
      of any kind on the transfer of any of the NBLM Shares other than (a)
      restrictions on transfer imposed by the Securities Act of 1933, as amended
      (the “Securities Act”) and (b) restrictions on transfer imposed by
      applicable state securities or “blue sky”
laws.

            

    

    

    
      	
              6.  

            	
              Miscellaneous.

            

    

     

    
      	
              A.  

            	
              The
      terms, provisions and conditions of this agreement are solely for the
      benefit of the parties hereto and their respective heirs, successors and
      permitted assigns and no other person or entity shall acquire or have a
      right by virtue of this agreement.  This agreement may not be
      assigned by any party without prior written consent of the other
      parties.

            

    

     

    
      	
              B.  

            	
              This
      agreement contains the entire understanding and agreement between the
      parties hereto with respect to the subject matter hereof and all prior
      writings and discussions are hereby merged into this
      agreement.  No provision of this agreement may be waived or
      amended except in a writing signed by the parties. A waiver or amendment
      of any term or provision of this agreement shall not be construed as a
      waiver or amendment of any other term or
  provision.

            

    

     

    
      	
              C.  

            	
              Each
      party represents and warrants that it will comply with all applicable
      federal and state securities and all other federal, state or local laws,
      rules and regulations relating hereto and that it shall not circumvent or
      frustrate the intent of this
agreement.

            

    

     

    
      	
              D.  

            	
              Each
      party will indemnify, defend and hold harmless the other party from and
      against all demands, claims, actions or causes of action, assessments,
      losses, damages, liabilities (whether absolute, accrued, contingent or
      otherwise), costs and expenses, including, but not limited to, interest,
      penalties and reasonable attorneys’ fees and expenses (collectively,
      “Losses”), asserted against, imposed upon or incurred by the other party,
      directly or indirectly, by reason of or resulting from or relating to the
      breach of any representation, warranty, covenant contained in this
      agreement, regardless of whether such Losses arise as a result of the
      negligence, strict liability or any other liability imposed under any
      theory of law or equity, or violation of any law by, the indemnifying
      party.

            

    

     

    
      	
              E.  

            	
              This
      agreement may be executed by facsimile signatures and in multiple
      counterparts, each of which shall be deemed an original. It shall not be
      necessary that each party executes each counterpart, or that any one
      counterpart be executed by more than one party so long as each party
      executes at least one counterpart.

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
      	
              F.  

            	
              This
      agreement shall be governed by and constructed under the laws of the State
      of Delaware without regard to such state’s conflicts of law principles,
      and may be amended, modified or supplemented only by written instrument
      executed by parties hereto.

            

    

     

    If the
foregoing correctly sets forth the entire understanding and agreement between
the us, please so indicate by executing this agreement as indicated below and
returning an executed copy, whereupon this agreement shall constitute a binding
agreement as of the date first above written.

    

     

    
      	 	      
              Very
      truly yours,

              

              

              /s/ George
      Elliott

              George
      Elliott

            

    

     

     

    ACCEPTED
AND AGREED TO:

    

    

    Trinad
Capital Master Fund, Ltd.

    

    

    By: Robert S.
Ellin

    

    Name: Robert S. Ellin

    Title: Director

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