Document:

December 19, 2005 8KA Exhibit 4.1

                                                                                                Exhibit 4.1 

REGISTRATION RIGHTS AGREEMENT

This REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made as of December 14, 2005 by
and among 8X8, Inc., a Delaware corporation (the "Company") and (ii) the holders listed on
Exhibit A hereto (collectively the "Holders").

WHEREAS, the terms of the Placement Agency Agreement dated as of December 14, 2005 among the Company, A.G. Edwards
& Sons, Inc. and Griffin Securities, Inc. provide that it shall be a condition precedent to the closing of the transactions thereunder
for the Company and the Holders to execute and deliver this Agreement to provide for the registration under the Securities Act of 1933,
as amended, of certain warrants issued to the Holders as identified on Exhibit A.

NOW, THEREFORE, in consideration of the premises and mutual covenants contained herein, the parties hereto hereby agree as
follows:

	Definitions.  The following terms shall have the meanings provided below:

"Additional Shares" shall mean any additional shares of Common Stock which may be issued or become
issuable from time to time upon the exercise of a Warrant, or a distribution with respect to, or in exchange for, or in replacement of a
Warrant, as a result of any adjustment provisions of a Warrant or otherwise.

"Board of Directors" shall mean the board of directors of the Company.

"Closing Date" shall have the meaning ascribed to such term in the Placement Agreement.  

"Common Stock" shall mean the common stock, $.001 par value per share, of the Company.  

"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended, and all of the rules and
regulations promulgated thereunder.

"Majority Holders" shall mean, at the relevant time of reference thereto, those Holders holding more than fifty
percent (50%) of the Registrable Shares held by all of the Holders.

"Other Securities" refers to any stock (other than Common Stock) and other securities of the Company or any
other person (corporate or otherwise) which the Holders of the Warrants at any time shall be entitled to receive, or shall have received,
upon the exercise of the Warrants, in lieu of or in addition to Common Stock.

"Placement Agreement" shall mean the Placement Agency Agreement between the Company and .A.G.
Edwards & Sons, Inc. and Griffin Securities, Inc., as agents, dated as of December 14, 2005.

"Registrable Shares" shall mean any shares of Common Stock or Other Securities issued or issuable from time
to time upon the exercise of a Warrant, or a distribution with respect to, in exchange for, or in replacement of a Warrant, including
without limitation Additional Shares.  

"Rule 144" shall mean Rule 144 promulgated under the Securities Act and any successor or substitute rule,
law or provision.

"SEC" shall mean the Securities and Exchange Commission.

"Securities Act" shall mean the Securities Act of 1933, as amended, and all of the rules and regulations
promulgated thereunder.

"Warrant" refers to each Warrant issued by the Company to the Holders pursuant to the Placement
Agreement.

	Effectiveness.  This Agreement shall become effective upon the Closing Date.  
	Mandatory Registration.

	No later than 90 days after the Closing Date, the Company will prepare and file with the SEC a registration statement on Form
S-3 (or, if Form S-3 is not then available to the Company, on such form of registration statement that is then available to effect a
registration of all Registrable Shares) for the purpose of registering under the Securities Act all of the Registrable Shares for resale by,
and for the account of, the Holders as selling stockholders thereunder (the "Registration Statement").  The
Registration Statement shall permit the Holders to offer and sell, on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act, any or all of the Registrable Shares.  Such Registration Statement also shall cover, to the extent allowable under the
Securities Act and the rules promulgated thereunder (including Rule 416), such indeterminate number of additional shares of Common
Stock resulting from stock splits, stock dividends or similar transactions with respect to the Registrable Shares.  
	The Company agrees to use commercially reasonable efforts to cause the Registration Statement to become effective as soon as
practicable after filing, but in no event later than 180 days after filing.
	The Company shall be required to keep the Registration Statement, as amended, effective until such date that is the earlier of
(i) two years after the Closing Date, (ii) the date when all of the Registrable Shares registered thereunder shall have been
sold, or (iii) such time as all the Registrable Shares held by the Holders can be sold pursuant to Rule 144(k) and without
compliance with the registration requirements of the Securities Act (such date is referred to herein as the "Mandatory
Registration Termination Date").  Thereafter, the Company shall be entitled to withdraw the Registration Statement and the
Holders shall have no further right to offer or sell any of the Registrable Shares pursuant to the Registration Statement (or any
prospectus relating thereto).  
	The Company shall not grant any registration rights that are pari passu with or senior to the registration rights of the Holders under
this Agreement if such registration rights would adversely affect the Holders' ability to sell Registrable Shares pursuant to the
Registration Statement.  The Company represents that no stockholders other than the Holders have the right to sell any Common Stock
or other securities of the Company pursuant to the Registration Statement.  

	Obligations of the Company.  In connection with the Company's obligation under Section 3 hereof to file a
Registration Statement with the SEC and to use its reasonable efforts to cause the Registration Statement to become effective as soon
as practicable after filing, the Company shall, as expeditiously as reasonably possible, subject to Section 9 hereof: 

	Prepare and file with the SEC such amendments and supplements to the Registration Statement and the prospectus used in
connection therewith as may be necessary to keep the Registration Statement effective until the Mandatory Registration Termination
Date; 
	Furnish to the selling Holders such reasonable number of copies of the Registration Statement, prospectus and preliminary
prospectus, in conformity with the requirements of the Securities Act, and such other documents (including, without limitation,
prospectus amendments and supplements as are prepared by the Company in accordance with Section 4(a) above) as the selling
Holders may reasonably request, in order to facilitate the public or other disposition of such selling Holders' Registrable Shares;
	Use reasonable efforts to register and qualify the Registrable Shares covered by the Registration Statement under such other
securities or Blue Sky laws of all states requiring such securities or Blue Sky registration or qualification, provided that the
Company shall not be required in connection therewith or as a condition thereto to qualify to do business or to file a general consent to
service of process in any such states or jurisdictions; and 
	Use reasonable efforts to cause all such Registrable Shares registered hereunder to be listed on each securities exchange
(including without limitation any Nasdaq market) on which securities of the same class issued by the Company are then
listed.

	Furnish Information.

	It shall be a condition precedent to the obligations of the Company to take any action pursuant to this Agreement that the
selling Holders shall furnish to the Company such information regarding them and the securities held by them as the Company shall
reasonably request and as shall be required in order to effect any registration by the Company pursuant to this Agreement.
	The Registration Statement will provide for a plan of distribution with respect to the Registrable Shares substantially as follows:
"The Registrable Shares may be sold from time to time by the Holders, or by pledgees, donees, transferees or other successors
in interest.  Such sales may be made on one or more exchanges or in the over-the-counter market, or otherwise at prices and at terms
then prevailing or at prices related to the then-current market price, or in negotiated transactions.  The Registrable Shares may be sold
by one or more of the following: (a) a block trade in which the broker or dealer so engaged will attempt to sell the shares as agent
but may position and resell a portion of the block as principal to facilitate the transaction; (b) purchases by a broker or dealer as
principal and resale by such broker or dealer for its account pursuant to the resale registration statement; (c) an exchange
distribution in accordance with the rules of such exchange; (d) ordinary brokerage transactions and transactions in which the
broker solicits purchasers; and (e) transactions between sellers and purchasers without a broker/dealer.  In addition, any
securities covered by the Registration Statement which qualify for sale pursuant to Rule 144 may be sold under Rule 144 rather than
pursuant to the Registration Statement.  From time to time the selling Holders may engage in short sales, short sales versus the box,
puts and calls and other transactions in securities of the issuer or derivatives thereof, and may sell and deliver the shares in connection
therewith.  In effecting sales, brokers or dealers engaged by the selling Holders may arrange for other brokers or dealers to participate.
Brokers or dealers will receive commissions or discounts from selling Holders in amounts to be negotiated immediately prior to the
sale."  

	Expenses of Registration.  All expenses incurred in connection with the registration of the Registrable Shares
pursuant to this Agreement (excluding underwriting, brokerage and other selling commissions and discounts), including without
limitation all registration and qualification and filing fees, printing expenses, fees and disbursements of counsel for the Company, and
the reasonable fees and disbursements of one counsel for the selling Holders selected by the selling Holders not to exceed $2,500,
shall be borne by the Company.  
	Indemnification.  

	To the extent permitted by law, the Company will indemnify and hold harmless each selling Holder (including the partners or
officers, directors and stockholders of such Holder), and each person, if any, who controls such selling Holder within the meaning of the
Securities Act, against any losses, claims, damages or liabilities, joint or several, to which they may become subject under the
Securities Act, the Exchange Act, and other federal or state securities laws, or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) (i) arise out of or are based upon any untrue or alleged untrue statement of any material
fact contained in the Registration Statement, in any preliminary prospectus or final prospectus relating thereto or in any amendments or
supplements to the Registration Statement or any such preliminary prospectus or final prospectus, (ii) arise out of or are based
upon the omission or alleged omission to state therein a material fact required to be stated therein, or necessary to make the
statements therein not misleading or (iii) arise out of any violation or alleged violation by the Company of the Securities Act, the
Exchange Act, any other federal or state securities law or any rule or regulation promulgated under the Securities Act, the Exchange
Act or any other federal or state securities law in accordance with the provisions of Section 6 of the Placement Agreement.
	To the extent permitted by law, each selling Holder will severally and not jointly indemnify and hold harmless the Company, each of
its directors, each of its officers who have signed the Registration Statement, each person, if any, who controls the Company within the
meaning of the Securities Act, or any selling Holders, and all other selling Holders against any losses, claims, damages or liabilities to
which the Company or any such director, officer, controlling person or such other selling Holder may become subject to, under the
Securities Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereto) arise out of or are based
upon any untrue or alleged untrue statement of any material fact contained in the Registration Statement or any preliminary prospectus
or final prospectus, relating thereto or in any amendments or supplements to the Registration Statement or any such preliminary
prospectus or final prospectus, or arise out of or are based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not misleading, in each case to the extent and only to the
extent that such untrue statement or alleged untrue statement or omission or alleged omission was made in the Registration Statement,
in any preliminary prospectus or final prospectus relating thereto or in any amendments or supplements to the Registration Statement
or any such preliminary prospectus or final prospectus, in reliance upon and in conformity with written information furnished by the
selling Holder expressly for use in connection with the Registration Statement, or any preliminary prospectus or final prospectus in
accordance with the provisions of Section 6 of the Placement Agreement.

	Reports Under the Exchange Act.  With a view to making available to the Holders the benefits of Rule 144 and
any other rule or regulation of the SEC that may at any time permit the Holders to sell the Registrable Shares to the public without
registration, the Company agrees to use reasonable efforts: (i) to make and keep public information available, as those terms are
understood and defined in the General Instructions to Form S-3, or any successor or substitute form, and in Rule 144, (ii) to file
with the SEC in a timely manner all reports and other documents required to be filed by an issuer of securities registered under the
Securities Act or the Exchange Act and (iii) undertake any additional actions reasonably necessary to maintain the availability of
the Registration Statement or the use of Rule 144.  
	Selling Procedures.  Any sale of Registrable Shares pursuant to the registration statement filed in accordance
with Section 3 hereof shall be subject to the following conditions and procedures:

	Updating the Prospectus.

	If the Company informs the selling Holder that the Registration Statement or final prospectus then on file with the SEC is not
current or otherwise does not comply with the Securities Act, the Company shall use commercially reasonable efforts to provide to the
selling Holder a current prospectus that complies with the Securities Act as soon as practicable, but in no event later than three
business days after delivery of such notice.  The Company's obligation to update the Registration Statement or final prospectus under
this Section 9(a)(i) shall not be subject to the limitations of Section 9(a)(ii) or (b) below.  
	If the Company requires more than three business days to update the prospectus under Section 9(a)(i) above, the Company shall
have the right to delay the preparation of a current prospectus that complies with the Securities Act without explanation to such Holder,
subject to the limitations set forth in Section 9(b) below, for a period of not more than 45 days (or two periods which total not more than
90 days in the aggregate) during any 12-month period.

	General.  Notwithstanding the foregoing, upon receipt of any notice from the Company of (i) any request
by the SEC or any other federal or state governmental authority during the period of effectiveness of the Registration Statement for
amendments or supplements to the Registration Statement or related prospectus or for additional information relating to the
Registration Statement, (ii) the issuance by the SEC or any other federal or state governmental authority of any stop order
suspending the effectiveness of the Registration Statement or the initiation of any proceedings for that purpose, (iii) the receipt by
the Company of any notification with respect to the suspension of the qualification or exemption from qualification of any of the
Registrable Shares for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose, (iv) the
happening of any event which makes any statement made in the Registration Statement or related prospectus or any document
incorporated or deemed to be incorporated therein by reference untrue in any material respect or which requires the making of any
changes in the Registration Statement or prospectus so that, in the case of the Registration Statement, it will not contain an untrue
statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not
misleading, and that in the case of the prospectus, it will not contain an untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading or
(v) that, in the judgment of the Company's Board of Directors, it is advisable to suspend use of the prospectus for a discrete
period of time due to pending corporate developments, public filings with the Commission or that there exists material nonpublic
information about the Company that the Board of Directors, acting in good faith, determines not to disclose in a registration statement,
then the Company may suspend use of the prospectus (each a "Suspension"), in which case the Company shall
promptly so notify each Holder and each Holder shall not dispose of Registrable Shares covered by the Registration Statement or
prospectus until copies of a supplemented or amended prospectus are distributed to the Holders or until the Holders are advised in
writing by the Company that the use of the applicable prospectus may be resumed; provided, however, that,
notwithstanding the foregoing, the Company may suspend use of the prospectus pursuant to Sections 9(a)(ii), 9(b)(iv) and 9(b)(v), and
an Holder may be prohibited from selling or otherwise disposing of the Registrable Shares covered by the Registration Statement or
prospectus, on not more than two occasions in total during any twelve-month period and for no more than 90 days in
the aggregate during any such twelve-month period.  The Company shall use its best efforts to ensure the use of the prospectus may
be resumed as soon as practicable.  The Company shall use its best efforts to obtain the withdrawal of any order suspending the
effectiveness of the Registration Statement, or the lifting of any suspension of the qualification (or exemption from qualification) of any
of the securities for sale in any jurisdiction, at the earliest practicable moment.  The Company shall, upon the occurrence of any event
contemplated by clause (iv), prepare a supplement or post-effective amendment to the Registration Statement or a supplement to the
related prospectus or any document incorporated therein by reference or file any other required document so that, as thereafter
delivered to the purchasers of the Registrable Shares being sold thereunder, such prospectus will not contain an untrue statement of a
material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances under which they
were made, not misleading.
	Assignment.  This Agreement shall be binding upon and inure to the benefit of and be enforceable by the parties
hereto and their respective successors and assigns.  In addition, and whether or not any express assignment shall have been made,
the provisions of this Agreement which are for the benefit of the Holders shall also be for the benefit of and enforceable by any
subsequent holder of any Registrable Securities who has executed a copy of this Agreement or otherwise indicated its agreement to be
bound hereby.  Without limitation on the Holders' rights to transfer Registrable Securities, the Company acknowledges that any Holder
may, at any time, transfer any of the Registrable Securities which they may own, beneficially or of record, to (a) their affiliates, or
(b) their partner(s), holder(s), security holder(s) or beneficial holder(s) pursuant to their organization documents or other
agreements, and that, upon the consummation of any such transfer, the provisions of this Agreement shall be binding upon and inure to
the benefit of each transferee of such Registrable Securities.
	Entire Agreement.  This Agreement (including the exhibits hereto and the other agreements incorporated by
reference herein) constitutes and contains the entire agreement and understanding of the parties with respect to the subject matter
hereof, and it also supersedes any and all prior negotiations, correspondence, agreements or understandings with respect to the
subject matter hereof.  
	Miscellaneous.  

	Amendments.  This Agreement may not be amended, modified or terminated, and no rights or provisions may be
waived, except with the written consent of the Majority Holders and the Company.
	Governing Law.  This Agreement shall be governed by and construed and enforced in accordance with the laws
of the State of Delaware.  Each party hereby irrevocably consents and submits to the jurisdiction of any Delaware State or United
States Federal Court sitting in the State of Delaware, over any action or proceeding arising out of or relating to this Agreement and
irrevocably consents to the service of any and all process in any such action or proceeding by registered mail addressed to such party
at its address specified herein (or as otherwise noticed to the other party).  Each party further waives any objection to venue in New
York and any objection to an action or proceeding in such state and county on the basis of forum non conveniens.  Each party
also waives any right to trial by jury.  
	Successors and Assigns.  This Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective heirs, personal representatives, successors or assigns.  This Agreement shall also be binding upon and inure to
the benefit of any transferee of any of the Registrable Shares.  Notwithstanding anything in this Agreement to the contrary, if at any time
any Holder shall cease to own any Registrable Shares, all of such Holder's rights under this Agreement shall immediately
terminate.
	Notices

	Any notices, reports or other correspondence (hereinafter collectively referred to as
"correspondence") required or permitted to be given hereunder shall be sent by mail, courier (overnight or same
day) or fax or delivered by hand to the party to whom such correspondence is required or permitted to be given hereunder (except that
notices of Suspensions or stop orders must be made by fax).  The date of giving any notice shall be the date of its actual receipt.  
	All correspondence to the Company shall be addressed as follows: 

8x8, Inc.

   3151 Jay Street

   Santa Clara, California 95054

   Attention:  Chief Executive Officer

   Fax number:  (408) 980-0432

	All correspondence to any Holder shall be sent to the most recent address furnished by the Holder to the Company.  
	Any Holder may change the address to which correspondence to it is to be addressed by notification as provided for
herein.
	Injunctive Relief.  The parties acknowledge and agree that in the event of any breach of this Agreement,
remedies at law may be inadequate, and each of the parties hereto shall be entitled to seek specific performance of the obligations of
the other parties hereto and such appropriate injunctive relief as may be granted by a court of competent jurisdiction.
	Attorneys' Fees.  If any action at law or in equity is necessary to enforce or interpret any of the terms of this
Agreement, the prevailing party shall be entitled to reasonable attorneys' fees, costs and necessary disbursements in addition to any
other relief to which such party may be entitled.
	Severability.  If any provision of this Agreement is held by a court of competent jurisdiction to be unenforceable
under applicable law, such provision shall be replaced with a provision that accomplishes, to the extent possible, the original business
purpose of such provision in a valid and enforceable manner, and the balance of the Agreement shall be interpreted as if such provision
were so modified and shall be enforceable in accordance with its terms.
	Aggregation of Shares.  Registrable Shares held or acquired by affiliated entities or persons shall be aggregated
together for the purpose of determining the availability of any rights under this Agreement.
	Counterparts.  This Agreement may be executed in a number of counterparts, any of which together shall for all
purposes constitute one Agreement, binding on all the parties hereto notwithstanding that all such parties have not signed the same
counterpart.

[Remainder of Page Intentionally Left Blank]

IN WITNESS WHEREOF, the parties hereto have executed this Registration Rights Agreement as of the date and year
first above written.

8X8, Inc.

By:________________________

Name:

   Title: 

HOLDER

AGE Investments, Inc.

By:________________________

Name:

   Title: 

 

HOLDER

Griffin Securities, Inc.

By:________________________

Name:

   Title: 

Exhibit A 

AGE Investments, Inc., a Delaware corporation

Griffin Securities, Inc., a New York corporationDecember 19, 2005 8KA Exhibit 4.2

                                                                                                Exhibit 4.2 

SECURITIES PURCHASE AGREEMENT

SECURITIES PURCHASE AGREEMENT (the "Agreement"), dated as of December 14, 2005, by
and among 8x8, Inc., a Delaware corporation, with headquarters located at 3151 Jay Street, Santa Clara, California 95054 (the
"Company"), and the investors listed on Schedule I attached hereto (each, a "Buyer" and collectively, the
"Buyers).

WHEREAS:

A.The Company and the Buyers desire to enter into this transaction to purchase the securities set forth
herein pursuant to a currently effective shelf registration statement on Form S-3, which has at least $15,000,000 in unallocated
securities registered thereunder (Registration Number 333-126350) (the
"Registration Statement"), which Registration Statement has been declared effective in accordance with the Securities Act of
1933, as amended (the "1933 Act"), by the United States Securities and Exchange Commission (the "SEC").

B.The Buyers wish to purchase, and the Company wishes to sell to each Buyer, upon the terms and
conditions stated in this Agreement, (i) 7,142,858 shares ("Purchased Shares") of common stock, par value $.001 per share,
of the Company (the "Common Stock"); and (ii) warrants in substantially the form attached hereto as Exhibit A (the
"Warrant") representing the right to acquire up to 1,785,714 additional shares of Common Stock (the "Warrant
Shares").

C.The Purchased Shares, the Warrants and the Warrant Shares are collectively referred to herein as the
"Securities."

NOW, THEREFORE, the Company and the Buyers hereby agree as follows:

1.PURCHASE AND SALE OF PURCHASED SHARES AND WARRANTS.

(a)Purchase of Purchased Shares and Warrants.

Subject to the satisfaction (or waiver) of the conditions set forth in Sections 6 and 7 below, the Company shall
issue and sell to the Buyers, and each Buyer agrees to purchase from the Company on the Closing Date (as defined below), the
Purchased Shares and the Warrant as set forth opposite such Buyer's name on Schedule I attached hereto (the
"Closing").  The Closing shall occur on the Closing Date at the offices of Schulte Roth & Zabel LLP, 919 Third Avenue,
New York, New York 10022 or at such other place as may be agreed upon by the parties.

(b)Purchase Price.  The aggregate purchase price for the Purchased Shares and the Warrant to
be purchased by each Buyer at the Closing shall be Seven Million Five Hundred Thousand Dollars ($7,500,000) (the "Purchase
Price") for a total of Fifteen Million Dollars ($15,000,000).

(c)Closing Date.  The date and time of the Closing (the "Closing Date") shall be 10:00
a.m., New York City Time, on or before December 19, 2005, after notification of satisfaction (or waiver) of the conditions to the Closing
set forth in Sections 6 and 7 below (or such later date as is mutually agreed to by the Company and the Buyers).

(d)Form of Payment.  On the Closing Date, (i) each Buyer shall pay the Purchase Price to the
Company for its Purchased Shares and Warrants by wire transfer of immediately available funds in accordance with the Company's
written wire instructions, and (ii) the Company shall (A) cause the Company's transfer agent (the "Transfer Agent")
through the Depository Trust Company ("DTC") Fast Automated Securities Transfer Program, to credit the Purchased Shares
to each Buyer's or its designee's balance account with DTC through its Deposit Withdrawal Agent Commission system as specified in
writing by such Buyer, and (B) deliver to such Buyer the Warrant.

2.REPRESENTATIONS AND WARRANTIES OF EACH BUYER.

Each Buyer represents and warrants as to itself only that: 

(a)Validity; Enforcement.  This Agreement has been duly and validly authorized, executed and
delivered on behalf of such Buyer and constitutes the legal, valid and binding obligation of such Buyer enforceable against it in
accordance with its terms, except as such enforceability may be limited by general principles of equity or to applicable bankruptcy,
insolvency, reorganization, moratorium, liquidation and other similar laws relating to, or affecting generally, the enforcement of
applicable creditors' rights and remedies. 

(b)No Conflicts.  The execution, delivery and performance by the Buyer of this Agreement and the
consummation by such Buyer of the transactions contemplated hereby will not (i) result in a violation of the organizational documents of
such Buyer or (ii) conflict with, or constitute a default (or an event which with notice or lapse of time or both would become a default)
under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument
to which such Buyer is a party, or (iii) result in a violation of any law, rule, regulation, order, judgment  or decree (including federal and
state securities laws) applicable to such Buyer, except in the case of clauses (ii) and (iii) above, for such conflicts, defaults, rights or
violations which would not, individually or in the aggregate, reasonably be expected to have a material adverse effect on the ability of
such Buyer to perform its obligations hereunder.

(c)Residency.  Such Buyer is a resident of that jurisdiction specified below its address on
Schedule I.

3.REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

The Company hereby makes the following representations and warranties to the Buyers:

(a)Subsidiaries.  The Company has no direct or indirect subsidiaries other than those listed in the
SEC Reports (as defined below) (the "Subsidiaries").  Except as disclosed in the SEC Reports, the Company owns, directly or
indirectly, all of the capital stock of each Subsidiary free and clear of any lien, charge, security interest, encumbrance, right of first
refusal or other restriction (collectively, "Liens"), and all the issued and outstanding shares of capital stock of each Subsidiary
are validly issued and are fully paid, non-assessable and free of preemptive and similar rights.

(b)Organization and Qualification.  Each of the Company and each Subsidiary is an entity duly
incorporated or otherwise organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or
organization (as applicable), with the requisite power and authority to own and use its properties and assets and to carry on its business
as currently conducted.  Neither the Company nor any Subsidiary is in violation of any of the provisions of its respective certificate or
articles of incorporation, bylaws or other organizational or charter documents.  Each of the Company and the Subsidiaries is duly
qualified to do business and is in good standing as a foreign corporation or other entity in each jurisdiction in which the nature of the
business conducted or property owned by it makes such qualification necessary, except where the failure to be so qualified or in good
standing, as the case may be, would not, individually or in the aggregate: (i) adversely affect the legality, validity or enforceability of this
Agreement, the Warrant, the Irrevocable Transfer Agent Instructions and any other documents or agreements executed in connection
with the transactions contemplated hereunder (the "Transaction Documents"), (ii) have or result in a material adverse effect on
the results of operations, assets, business or financial condition of the Company and the Subsidiaries, taken as a whole, or (iii)
adversely impair the Company's ability to perform fully on a timely basis its obligations under any of the Transaction Documents (any of
(i), (ii) or (iii), a "Material Adverse Effect").

(c)Authorization; Enforcement.  The Company has the requisite corporate power and authority to
enter into and to consummate the transactions contemplated by each of the Transaction Documents and otherwise to carry out its
obligations hereunder 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 action on the part
of the Company and no further consent or action is required by the Company, its Board of Directors or its stockholders.  Each of the
Transaction Documents has been (or upon delivery will be) duly executed by the Company and is, or when delivered in accordance
with the terms hereof, will constitute, the valid and binding obligation of the Company enforceable against the Company in accordance
with its terms. 

(d)No Conflicts.  The execution, delivery and performance of the Transaction Documents by the
Company and the consummation by the Company of the transactions contemplated 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) subject to obtaining the Required Approvals (as defined below), conflict with, or constitute a default (or an
event that with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment,
acceleration or cancellation (with or without notice, lapse of time or both) of, any agreement, credit facility, debt or other instrument
(evidencing a Company or Subsidiary debt or otherwise) or other understanding to which the Company or any Subsidiary is a party or
by which any property or asset of the Company or any Subsidiary is bound or affected, or (iii) result in a violation of any law, rule,
regulation, order, judgment, injunction, decree or other restriction of any court or governmental authority to which the Company or a
Subsidiary is subject (including federal and state securities laws and regulations), or by which any property or asset of the Company or
a Subsidiary is bound or affected; except in the case of each of clauses (ii) and (iii), such as could not, individually or in the aggregate,
have or result in a Material Adverse Effect.

(e)Filings, Consents and Approvals.  Neither the Company nor any Subsidiary is required to obtain
any consent, waiver, authorization or order of, give any notice to, or make any filing or registration with, any court or other federal, state,
local or other governmental authority or other Person in connection with the execution, delivery and performance by the Company of
the Transaction Documents, other than (i) the filings required under Section 4(f), (ii) the filing with the SEC of the prospectus
supplement required by the Registration Statement pursuant to Rule 424(b) under the 1933 Act (the "Prospectus Supplement")
supplementing the base prospectus forming part of the Registration Statement (the "Prospectus"), (iii) the application(s) to The
Nasdaq Capital Market (the "Principal Market") for the listing of the Purchased Shares and the Warrant Shares for trading
thereon in the time and manner required thereby, and (iv) applicable Blue Sky filings (collectively, the "Required Approvals").
"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.

(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.  The Company has reserved from its duly authorized capital stock a sufficient number of Warrant Shares to enable it to
comply with its exercise obligations under the Warrants.  The issuance by the Company of the Securities has been registered under the
1933 Act and all of the Securities are freely transferable and tradable by the Buyer without restriction.  The Purchased Shares and
Warrants are being issued pursuant to the Registration Statement and the issuance of the Purchased Shares, the Warrants and the
Warrant Shares has been registered by the Company under the 1933 Act.  The Registration Statement is effective and available for the
issuance of the Securities thereunder and the Company has not received any notice that the SEC has issued or intends to issue a
stop-order with respect to the Registration Statement or that the SEC otherwise has suspended or withdrawn the effectiveness of the
Registration Statement, either temporarily or permanently, or intends or has threatened in writing to do so.  The "Plan of Distribution"
section under the Registration Statement permits the issuance and sale of the Securities hereunder and under the Warrants.  Upon
receipt of the Securities, the Buyer will have good and marketable title to such Securities and the Purchased Shares and, upon exercise
of the Warrants, the Warrant Shares will be freely tradable on the Principal Market.

(g)Capitalization.  The Company has duly and validly authorized capital stock as set forth in the
Prospectus.  All outstanding shares of capital stock of the Company are duly authorized, validly issued, fully paid and nonassessable
and have been issued in compliance with all applicable securities laws.  No securities of the Company are entitled to preemptive or
similar rights, and 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 except for
the warrants being issued to the Placement Agents (as defined below) concurrently with the issuance of the Securities, 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 exchangeable for, or giving any Person any right to subscribe for or acquire, any shares of
Common Stock, or contracts, commitments, understandings or arrangements by which the Company or any Subsidiary is or may
become bound to issue additional shares of Common Stock, or securities or rights convertible into or exercisable or exchangeable for
shares of Common Stock.  There are no anti-dilution or price adjustment provisions contained in any security issued by the Company
(or in any agreement providing rights to security holders) which are not otherwise disclosed in the SEC Reports and 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
Buyer) and will not result in a right of any holder of Company securities to adjust the exercise, conversion, number of issuable shares,
exchange or reset price under such securities.  The Company will not authorize the issuance of any additional securities unless there
are sufficient authorized shares of Common Stock (or any successor security thereto) available, taking into account all potential
adjustments or anti-dilution provisions in such securities, to satisfy the rights of the Buyer to acquire the Securities and underlying
securities in the event of exercise of the Warrant.  Further, if at any time the number of shares of Common Stock available for issuance
were insufficient for any reason to satisfy such rights of the Buyer, the Company would take immediate action to cause sufficient
authorized shares to be authorized or effect a reverse stock split to provide sufficient shares to be available.

(h)SEC Reports; Financial Statements.  The Company has filed all reports required to be filed by it
under the 1933 Act and the Securities Exchange Act of 1934, as amended (the "1934 Act"), including pursuant to Section
13(a) or 15(d) thereof, for the two (2) years preceding the date hereof (the foregoing materials being collectively referred to herein as
the "SEC Reports") on a timely basis or has received a valid extension of such time of filing and has filed any such SEC
Reports prior to the expiration of any such extension.    As of their respective dates, the SEC Reports complied in all material respects
with the requirements of the 1933 Act and the 1934 Act and the rules and regulations of the SEC promulgated thereunder, 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 Registration Statement and any prospectus included therein, including the Prospectus and the Prospectus
Supplement, complied in all material respects with the requirements of the 1933 Act and the 1934 Act and the rules and regulations of
the SEC promulgated thereunder, and none of such Registration Statement or any such prospectus, including the Prospectus and the
Prospectus Supplement, contain or 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 case of any prospectus in the light of the circumstances
under which they were made, not misleading.  The Company is in compliance with the Sarbanes-Oxley Act of 2002, and the rules and
regulations promulgated thereunder by all government and regulatory authorities and agencies.  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 SEC with respect thereto as in effect at the time of filing.  Such financial statements have been prepared in
accordance with generally accepted accounting principles applied on a consistent basis during the periods involved ("GAAP"),
except as may be otherwise specified in such financial statements or the notes thereto, and fairly present in all material respects the
financial position of the Company and its consolidated 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.

(i)Material Changes.  Since the date of the latest audited financial statements included within the
SEC Reports, except as specifically disclosed in the SEC Reports: (i) there has been no event, occurrence or development that,
individually or in the aggregate, has had or that could result in a Material Adverse Effect, (ii) the Company has not incurred any liabilities
(contingent or otherwise) other than (A) trade payables and accrued expenses incurred in the ordinary course of business consistent
with past practice and (B) liabilities not required to be reflected in the Company's financial statements pursuant to GAAP or required to
be disclosed in filings made with the SEC, (iii) the Company has not altered its method of accounting or the identity of its auditors, (iv)
the Company has not declared or made any dividend or distribution of cash or other property to its stockholders or purchased,
redeemed or made any agreements to purchase or redeem any shares of its capital stock, and (v) the Company has not issued any
equity securities to any officer, director or Affiliate, except pursuant to existing Company stock option plans.  "Affiliate" means
any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with a
Person, as such terms are used in and construed under Rule 144.  "Rule 144" means Rule 144 promulgated by the SEC
pursuant to the 1933 Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the
SEC having substantially the same effect as such Rule.

(j)Litigation.  There is no action, suit, inquiry, notice of violation, proceeding or investigation pending
or, to the knowledge of the Company, threatened against or affecting the Company, any Subsidiary or any of their respective properties
before or by any court, arbitrator, governmental or administrative agency or regulatory authority (federal, state, county, local or foreign)
(collectively, an "Action") which: (i) 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, individually or in the aggregate, have or
result in a Material Adverse Effect.  Neither the Company nor any Subsidiary, nor 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. The Company does not have pending before the SEC any request for confidential treatment of information.  There has not been,
and to the knowledge of the Company, there is not pending or contemplated, any investigation by the SEC involving the Company or
any current or former director or officer of the Company.  The SEC has not issued any stop order or other order suspending the
effectiveness of any registration statement filed by the Company or any Subsidiary under the 1934 Act or the 1933 Act, including the
Registration Statement.

(k)Compliance.  Neither the Company nor any Subsidiary: (i) is in default under or in violation of (and
no event has occurred that has not been waived that, with notice or lapse of time or both, would result in a default by the Company or
any Subsidiary under), nor has the Company or any Subsidiary received notice of a claim that it is in default under or that it is in
violation of, any indenture, loan or credit agreement or any other agreement or instrument to which it is a party or by which it or any of
its properties is bound (whether or not such default or violation has been waived), (ii) to the knowledge of the Company, is in violation of
any order of any court, arbitrator or governmental body, or (iii) is or has been in violation of any statute, rule or regulation of any
governmental authority, except in each case as could not, individually or in the aggregate, have or result in a Material Adverse Effect.

(l)Labor Relations.  No strike, work stoppage, slow down or other material labor problem exists or, to
the knowledge of the Company, is threatened or imminent with respect to any of the employees of the Company or any
Subsidiary. 

(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, individually or in the
aggregate, have or result in a Material Adverse Effect ("Material Permits"), and neither the Company nor any Subsidiary has
received any notice of proceedings relating to the revocation or modification of any Material Permit. 

(n)Title to Assets.  The Company and the Subsidiaries have good and marketable title in fee simple
to all real property owned by them that is material to the business of the Company and the Subsidiaries and good and marketable title
in all personal property owned by them that is material to the business of the Company and the Subsidiaries, in each case free and
clear of all Liens, except for Liens as do not materially affect the value of such property and do not materially interfere with the use
made and proposed to be made of such property by the Company and the Subsidiaries. Any real property and facilities held under
lease by the Company and the Subsidiaries are held by them under valid, subsisting and enforceable leases of which the Company and
the Subsidiaries are in compliance. 

(o)Patents and Trademarks.  The Company and the Subsidiaries have, or have rights to use, all
patents, patent applications, trademarks, trademark applications, service marks, trade names, copyrights, licenses and other similar
rights that are 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"). None of the
Intellectual Property Rights have expired or terminated, or are expected to expire or terminate within two years from the date of this
Agreement.  Neither the Company nor any Subsidiary has received a written notice within two years from the date of this Agreement or
otherwise has reason to believe that the Intellectual Property Rights used by the Company or any Subsidiary violates or infringes upon
the rights of any Person.  To the knowledge of the Company, all such Intellectual Property Rights are enforceable and there is no
existing infringement by another Person of any of the Intellectual Property Rights. 

(p)Insurance.  To the knowledge of the Company, 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.  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, except for cost increases being
experienced by public companies in similar businesses and risk categories. 

(q)Transactions With Affiliates and Employees.  Except as set forth in SEC Reports filed at least ten
(10) days prior to the date hereof, none of the officers or directors of the Company and, to the knowledge of the Company, none of the
employees of the Company is presently a party to any transaction with the Company or any Subsidiary (other than for services as
employees, officers and directors), including any contract, agreement or other arrangement providing for the furnishing of services to or
by, providing for rental of real or personal property to or from, or otherwise requiring payments to or from any officer, director or such
employee or, to the knowledge of the Company, any entity in which any officer, director, or any such employee has a substantial
interest or is an officer, director, trustee or partner. 

(r)Internal Accounting Controls.  The Company and the Subsidiaries maintain a system of internal
accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management's
general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity
with generally accepted accounting principles and to maintain asset accountability, (iii) access to assets is permitted only in accordance
with management's general or specific authorization, and (iv) the recorded accountability for assets is compared with the existing assets
at reasonable intervals and appropriate action is taken with respect to any differences. The financial records of the Company accurately
reflect in all material respects the information relating to the business of the Company, the location and collection of its assets, and the
nature of all transactions giving rise to the obligations or accounts receivable of the Company.  The Company has established
disclosure controls and procedures (as defined in 1934 Act Rules 13a-14 and 15d-14) for the Company and designed such disclosures
controls and procedures to ensure that material information relating to the Company is made known to the certifying officers by others
within the Company, particularly during the period in which the Company's Form 10-K or 10-Q, as the case may be, is being prepared.
The Company's certifying officers have evaluated the effectiveness of the Company's controls and procedures as of a date within 90
days prior to the filing date of the Form 10-K for the year ended March 31, 2005 (such date, the "Evaluation Date").  The
Company presented in the Form 10-K for the year ended March 31, 2005, the conclusions of the certifying officers about the
effectiveness of the disclosure controls and procedures based on their evaluations as of the Evaluation Date.  Since the Evaluation
Date, there have been no significant changes in the Company's internal controls (as such term is defined in Item 307(b) of Regulation
S-K under the 1934 Act) or, the knowledge of the Company, in other factors that could significantly affect the Company's internal
controls. 

(s)Solvency.  Based on the financial condition of the Company as of date hereof and as of the
Closing Date: (i) the Company's fair saleable value of its assets exceeds the amount that will be required to be paid on or in respect of
the Company's existing debts and other liabilities (including known contingent liabilities) as they mature; (ii) the Company's assets do
not constitute unreasonably small capital to carry on its business for the current fiscal year as now conducted and as proposed to be
conducted including its capital needs taking into account the particular capital requirements of the business conducted by the Company,
and projected capital requirements and capital availability thereof; and (iii) the current cash flow of the Company, together with the
proceeds the Company would receive, were it to liquidate all of its assets, after taking into account all anticipated uses of the cash,
would be sufficient to pay all amounts on or in respect of its debt when such amounts are required to be paid.  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).  

(t)Certain Fees.  Except for the fees being paid to the Placement Agents described in the
Prospectus, 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 this
Agreement, and the Company has not taken any action that would cause any Buyer to be liable for any such fees or commissions.  The
Company agrees that the Buyer shall have no obligation with respect to any fees or with respect to any claims made by or on behalf of
any Person for fees of the type contemplated by this Section in connection with the transactions contemplated by this Agreement.
 

(u)Integration.  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 any
applicable stockholder approval provisions, including, without limitation, under the rules and regulations of any exchange or automated
quotation system on which any of the securities of the Company are listed or designated, nor will the Company or any of its
Subsidiaries take any action or steps that would cause the offering of the Securities to be integrated with other offerings. 

(v)Listing and Maintenance Requirements.  Except as disclosed in the SEC Reports, the Company
has not, in the 12 months preceding the date hereof, received notice from the Principal Market on which the Common Stock is or has
been listed or quoted to the effect that the Company is not in compliance with the listing or maintenance requirements of the Principal
Market.  The Company is, and has no reason to believe that it will not in the foreseeable future continue to be, in compliance with all
such listing and maintenance requirements.  The issuance and sale of the Securities hereunder does not contravene the rules and
regulations of the Principal Market and no stockholder approval is required for the Company to fulfill its obligations under the
Transaction Documents.  The Common Stock is currently listed on the Principal Market. 

(w)Registration Rights.  The Company has not granted or agreed to grant to any Person any rights
(including "piggy-back" registration rights) to have any securities of the Company registered with the SEC or any other
governmental authority that have not been satisfied. 

(x)Application of Takeover Protections.  The Company and its Board of Directors have taken all
necessary action, if any, in order to render inapplicable any control share acquisition, business combination, poison pill (including any
distribution under a rights agreement) or other similar anti-takeover provision under the Company's Certificate of Incorporation (or
similar charter documents) or the laws of its state of incorporation that is or could become applicable to the Buyer as a result of the
Buyer and the Company fulfilling their obligations or exercising their rights under the Transaction Documents, including, without
limitation, as a result of the Company's issuance of the Securities and the Buyer's ownership of the Securities. 

(y)Disclosure.  The Company confirms that neither it, nor to its knowledge the Placement Agents, nor
any other Person acting on its behalf has provided the Buyer or its agents or counsel with any information that the Company believes
constitutes, nonpublic information.  The Company understands and confirms that the Buyer will rely on the foregoing representations in
effecting transactions in securities of the Company.  All disclosure provided to the Buyer regarding the Company, its business and the
transactions contemplated hereby, furnished by or on behalf of the Company are true and correct and do 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 the light of the
circumstances under which they were made, not misleading. The Company acknowledges and agrees that the Buyer makes or has
made any representations or warranties with respect to the transactions contemplated hereby other than those specifically set forth in
Section 2. 

(z)Investment Company. The Company is not, and is not an Affiliate of, an "investment
company" within the meaning of the Investment Company Act of 1940, as amended. 

4.COVENANTS.

(a)Reasonable Best Efforts.  Each party shall use its reasonable best efforts to timely to satisfy
each of the covenants and the conditions to be satisfied by it as provided in Sections 5, 6 and 7 of this Agreement.

(b)Prospectus Supplement and Blue Sky.  On or before the execution of this Agreement, the
Company shall have delivered, and as soon as practicable after the Closing the Company shall file, a prospectus supplement to the
Registration Statement with respect to the Securities as required under and in conformity with the 1933 Act, including Rule 424(b)
thereunder.  If required, the Company, on or before the Closing Date, 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 Buyers at the Closing pursuant to
this Agreement under applicable securities or "Blue Sky" laws of the states of the United States (or to obtain an exemption from such
qualification), and shall provide evidence of any such action so taken to the Buyers on or prior to the Closing Date.  The Company shall
make all filings and reports relating to the offer and sale of the Securities required under applicable securities or "Blue Sky" laws of the
states of the United States following the Closing Date.

(c)Reporting Status.  Other than in compliance with the terms of the Warrants, until the date on
which the Buyers shall have sold all the Purchased Shares and Warrant Shares and none of the Warrants is outstanding, the
Company shall timely file all reports required to be filed with the SEC pursuant to the 1934 Act, and the Company shall not terminate its
status as an issuer required to file reports under the 1934 Act even if the 1934 Act or the rules and regulations thereunder would
otherwise permit such termination.

(d)Listing.  The Company shall promptly secure the listing of all of the Purchased Shares and
Warrant Shares upon each national securities exchange and automated quotation system, if any, upon which the Common Stock is
then listed (subject to official notice of issuance) and shall maintain, so long as any other shares of Common Stock shall be so listed,
such listing of all shares of Common Stock from time to time issuable under the terms of the Transaction Documents.  The Company
shall maintain the Common Stock's authorization for listing on the Principal Market.  Neither the Company nor any of its Subsidiaries
shall take any action which would be reasonably expected to result in the delisting or suspension of the Common Stock on the Principal
Market. The Company shall pay all fees and expenses in connection with satisfying its obligations under this Section 4(d).

(e)Fees.  At the Closing, the Company shall reimburse the Buyers for the actual, invoiced
expenses incurred by the Buyers, not to exceed $20,000, which amount shall be withheld by the Buyers from its Purchase Price at the
Closing.  The Company shall be responsible for the payment of any placement agent's fees, financial advisory fees, or broker's
commissions (other than for Persons engaged by any Buyers) relating to or arising out of the transactions contemplated hereby,
including, without limitation, any fees or commissions payable to A.G. Edwards & Co. and Griffin Securities, Inc. (the
"Placement Agents").  The Company shall pay, and hold the Buyers harmless against, any liability, loss or expense
(including, without limitation, reasonable attorney's fees and out-of-pocket expenses) arising in connection with any claim relating to any
such payment.  Except as otherwise set forth in this Agreement or in the Transaction Documents, each party to this Agreement shall
bear its own expenses in connection with the sale of the Securities to the Buyers.

(f)Disclosure of Transactions and Other Material Information.  The Company shall, on or before
11.59 p.m.., New York City Time, on December 14, 2005, issue a press release reasonably acceptable to the Buyers disclosing all
material terms of the transactions contemplated hereby.  On or before 8:30 a.m., New York City Time, on the first business day
following the execution and delivery of this Agreement, the Company shall file a Current Report on Form 8-K describing the terms of the
transactions contemplated by the Transaction Documents in the form required by the 1934 Act, and attaching the forms of Warrants as
exhibits to such filing (including all attachments, the "8-K Filing").  The Company shall not, and shall cause each of its
Subsidiaries and each of their respective officers, directors, employees and agents, not to, provide any Buyer with any material,
nonpublic information regarding the Company or any of its Subsidiaries from and after the filing of the press release referred to in the
first sentence of this Section without the express written consent of such Buyer.  In the event of a breach of the foregoing covenant by
the Company, any Subsidiary, or its each of respective officers, directors, employees and agents, in addition to any other remedy
provided herein or in the Transaction Documents, such Buyer shall have the right to make a public disclosure, in the form of a press
release, public advertisement or otherwise, of such material, nonpublic information without the prior approval by the Company, its
Subsidiaries, or any of its or their respective officers, directors, employees or agents.  Such Buyer shall not have any liability to the
Company, its Subsidiaries, or any of its or their respective officers, directors, employees, shareholders or agents for any such
disclosure.  Subject to the foregoing, neither the Company nor any Buyer shall issue any press releases or any other public statements
with respect to the transactions contemplated hereby nor shall the Company disclose the name of any Buyer in any filing,
announcement, release or otherwise without such Buyer's consent; provided, however, that the Company shall be
entitled, without the prior approval of any Buyer, to make any press release or other public disclosure with respect to such transactions
(i) in substantial conformity with the 8-K Filing and contemporaneously therewith and (ii) as is required by applicable law and
regulations, including the applicable rules and regulations of the Principal Market (provided that in the case of clause (i) each Buyer
shall be consulted by the Company in connection with any such press release or other public disclosure prior to its release).  

(g)Reservation of Shares.  The Company shall take all action necessary to at all times have
authorized, and reserved for the purpose of issuance, from and after the Closing Date, the number of shares of Common Stock
issuable upon exercise of the Warrants being issued at the Closing.

(h)Additional Issuances of Securities.  From the date hereof through February 15, 2006, the
Company will not, directly or indirectly, except pursuant to its existing employee stock plans, offer, sell, grant any option to purchase, or
otherwise dispose of (or announce any offer, sale, grant or any option to purchase or other disposition of) any of its or its Subsidiaries'
equity or equity equivalent securities, including without limitation any debt, preferred stock or other instrument or security that is, at any
time during its life and under any circumstances, convertible into or exchangeable or exercisable for shares of Common Stock or
Options or Convertible Securities.  "Options" means any rights, warrants or options to subscribe for or purchase shares of
Common Stock or Convertible Securities.  "Convertible Securities" means any stock or securities (other than Options)
convertible into or exercisable or exchangeable for shares of Common Stock.

5.ISSUANCES; TRANSFER AGENT INSTRUCTIONS.

(a)Issuances.  The Company will no later than three trading days following the delivery by any
Buyer of an exercise notice under the Warrants to the Company and the Transfer Agent and the payment by the Buyer of the exercise
price to the Company, deliver or cause to be delivered to such Buyer unrestricted and freely tradable Warrant Shares under the
Registration Statement.

(b)Transfer Agent Instructions.  The Company shall issue irrevocable instructions to its transfer
agent, and any subsequent transfer agent, to issue certificates or credit shares to the applicable balance accounts at DTC, registered in
the name of each Buyer or its respective nominee(s), for the Warrant Shares in such amounts as specified from time to time by
the Buyer to the Company upon exercise of the Warrants in the form of Exhibit B attached hereto (the "Irrevocable
Transfer Agent Instructions").  The Company represents and warrants that no instruction other than the Irrevocable Transfer Agent
Instructions referred to in this Section 5 will be given by the Company to its transfer agent with respect to the Securities, and that the
Securities shall otherwise be freely transferable on the books and records of the Company as and to the extent provided in this
Agreement and the other Transaction Documents.

(c)Breach.  The Company acknowledges that a breach by it of its obligations hereunder will cause
irreparable harm to a Buyer.  Accordingly, the Company acknowledges that the remedy at law for a breach of its obligations under this
Section 5 will be inadequate and agrees, in the event of a breach or threatened breach by the Company of the provisions of this Section
5, that a Buyer shall be entitled, in addition to all other available remedies, to an order and/or injunction restraining any breach and
requiring immediate issuance and transfer, without the necessity of showing economic loss and without any bond or other security
being required.

6.CONDITIONS TO THE COMPANY'S OBLIGATION TO SELL.

The obligation of the Company hereunder to issue and sell the Purchased Shares and the related Warrants to
each Buyer at the Closing is subject to the satisfaction, at or before the Closing Date, of each of the following conditions, provided that
these conditions are for the Company's sole benefit and may be waived by the Company at any time in its sole discretion by providing
the Buyers with prior written notice thereof:

(i)Each Buyer shall have executed each of the Transaction Documents to which it is a party and delivered
the same to the Company.

(ii)Each Buyer shall have delivered to the Company the Purchase Price for the Purchased Shares and the
Warrant it is purchasing by wire transfer of immediately available funds pursuant to the wire instructions provided by the Company.

(iii)The representations and warranties of such Buyer shall be true and correct in all material respects as of
the date when made and as of the Closing Date as though made at that time (except for representations and warranties that speak as
of a specific date), and such Buyer shall have performed, satisfied and complied in all material respects with the covenants,
agreements and conditions required by this Agreement to be performed, satisfied or complied with by it at or prior to the Closing
Date.

(iv)The Registration Statement shall be in effect and no stop order proceedings with respect thereto shall
be pending or threatened under the 1933 Act.

(v)The staff of the Principal Market shall not have raised any objection to the consummation of the sale of
the Purchased Shares and Warrants to the Buyers without the approval of the Company's stockholders.

7.CONDITIONS TO EACH BUYER'S OBLIGATION TO PURCHASE.

The obligation of each Buyer hereunder to purchase the Purchased Shares and the Warrant it is purchasing at
the Closing is subject to the satisfaction, at or before the Closing Date, of each of the following conditions, provided that these
conditions are for such Buyer's sole benefit and may be waived by such Buyer at any time in its sole discretion by providing the
Company with prior written notice thereof:

(i)The Company shall have (i) executed and delivered to such Buyer each of the Transaction Documents,
(ii) electronically delivered the Purchased Shares to the Buyer as set forth in Section 1(d) and (iii) executed and delivered the Warrant
to such Buyer.

(ii)The Buyers shall have received the opinion of DLA Piper Rudnick Gray Cary US LLP, the Company's
outside counsel ("Company Counsel"), dated as of the Closing Date, in a form reasonably acceptable to the Buyers.

(iii)The Company shall have delivered to the Buyers a copy of the Irrevocable Transfer Agent Instructions,
in the form of Exhibit B attached hereto, which instructions shall have been delivered to and acknowledged in writing by the
Company's transfer agent.

(iv)The Company shall have delivered to such Buyer a certificate evidencing the incorporation and good
standing of the Company and each of its Subsidiaries in such corporation's jurisdiction of incorporation issued by the Secretary of State
of such state of incorporation as of a date within 10 days of the Closing Date. 

(v)The Common Stock (I) shall be listed on the Principal Market and (II) shall not have been suspended, as
of the Closing Date, by the SEC or the Principal Market from trading on the Principal Market nor shall suspension by the SEC or the
Principal Market have been threatened, as of the Closing Date, either (A) in writing by the SEC or the Principal Market or (B) by falling
below the minimum listing maintenance requirements of the Principal Market.

(vi)The Company shall have delivered to such Buyer a certificate, executed by the Secretary of the
Company and dated as of the Closing Date, as to (i) the resolutions consistent with this transaction as adopted by the Company's
Board of Directors in a form reasonably acceptable to such Buyer, (ii) the Articles and (iii) the Bylaws of the Company, each as in effect
at the Closing, in the form attached hereto as Exhibit C.

(vii)The representations and warranties of the Company shall be true and correct as of the date when made
and as of the Closing Date as though made at that time (except for representations and warranties that speak as of a specific date) and
the Company shall have performed, satisfied and complied in all respects with the covenants, agreements and conditions required by
the Transaction Documents to be performed, satisfied or complied with by the Company at or prior to the Closing Date.  Such Buyer
shall have received a certificate, executed by the Chief Executive Officer of the Company, dated as of the Closing Date, to the
foregoing effect and as to such other matters as may be reasonably requested by the Buyer in the form attached hereto as Exhibit
D.

(viii)The Company shall have delivered to such Buyer correspondence from the Company's transfer agent
certifying the number of shares of Common Stock outstanding as of a date within five days of the Closing Date.

(ix)The Company shall have obtained all governmental, regulatory or third party consents and approvals, if
any, necessary for the sale of the Purchased Shares and the Warrants.

(x)The Registration Statement shall be effective and available for the issuance and sale of the Purchased
Shares hereunder and the Company shall have delivered to each Buyer the Prospectus and the Prospectus Supplement as required
thereunder.

(xi)The Company shall have delivered to such Buyer such other documents relating to the transactions
contemplated by this Agreement as such Buyer or its counsel may reasonably request.

8.TERMINATION.  In the event that the Closing shall not have occurred on the Closing Date due
to the Company's or the Buyers' failure to satisfy the conditions set forth in Sections 6 and 7 above (and the nonbreaching party's failure
to waive such unsatisfied condition(s)), the nonbreaching party shall have the option to terminate this Agreement with respect to such
breaching party at the close of business on such date without liability of any party to any other party; provided,
however, that if this Agreement is terminated pursuant to this Section 8 by the Company, the Company shall not be obligated
to reimburse the Buyers for the expenses described in Section 4(e) above.

9.MISCELLANEOUS.

(a)Governing Law; Jurisdiction; Jury Trial.  All questions concerning the construction, validity,
enforcement and interpretation of this Agreement shall be governed by the internal laws of the State of Delaware, without giving effect
to any choice of law or conflict of law provision or rule (whether of the State of Delaware or any other jurisdictions) that would cause the
application of the laws of any jurisdictions other than the State of Delaware.  Each party hereby irrevocably submits to the exclusive
jurisdiction of the state and federal courts sitting in the State of Delaware for the adjudication of any dispute hereunder or in connection
herewith or with any transaction contemplated hereby or discussed herein, 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 brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper.  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 to such party at the address for such notices to it under this Agreement and agrees that such service shall constitute
good and sufficient service of process and notice thereof.  Nothing contained herein shall be deemed to limit in any way any right to
serve process in any manner permitted by law.  EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE,
AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN
CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY. 

(b)Counterparts.  This Agreement may be executed in two or more identical counterparts, all of
which 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; provided that a facsimile signature shall be considered due execution and shall be binding upon the
signatory thereto with the same force and effect as if the signature were an original, not a facsimile signature.

(c)Headings.  The headings of this Agreement are for convenience of reference and shall not form
part of, or affect the interpretation of, this Agreement.

(d)Severability.  If any provision of this Agreement shall be invalid or unenforceable in any
jurisdiction, such invalidity or unenforceability shall not affect the validity or enforceability of the remainder of this Agreement in that
jurisdiction or the validity or enforceability of any provision of this Agreement in any other jurisdiction.

(e)Entire Agreement; Amendments.  This Agreement supersedes all other prior oral or written
agreements between the Buyers, the Company, their affiliates and Persons acting on their behalf with respect to the matters discussed
herein, and this Agreement and the instruments referenced herein contain the entire understanding of the parties with respect to the
matters covered herein and therein and, except as specifically set forth herein or therein, neither the Company nor any Buyer makes
any representation, warranty, covenant or undertaking with respect to such matters.  No provision of this Agreement may be amended
other than by an instrument in writing signed by the Company and the holders of Purchased Shares representing at least a majority of
the amount of the Purchased Shares. No provision hereof may be waived other than by an instrument in writing signed by the party
against whom enforcement is sought.  

(f)Notices.  Any notices, consents, waivers or other communications required or permitted to be
given under the terms of this Agreement must be in writing and will be deemed to have been delivered:  (i) upon receipt, when delivered
personally; (ii) upon receipt, when sent by facsimile (provided confirmation of transmission is mechanically or electronically generated
and kept on file by the sending party); or (iii) one Business Day after deposit with an overnight courier service, in each case properly
addressed to the party to receive the same.  The addresses and facsimile numbers for such communications shall be:

If to the Company:

8x8, Inc.

   3151 Jay Street

Santa Clara, CA 95054

Phone: (408) 727-1885

Fax: (408) 980-0432

Attention:Chief Executive Officer

If to the Transfer Agent:

Computershare Trust Company, Inc.

   350 Indiana Street, Suite 800

   Golden, Colorado  80401

   Telephone:(303) 262-0710

   Facsimile:(303) 262-0700

   Attention:Kathy Heagerty

If to a Buyer, to its address and facsimile number set forth on Schedule I, with copies to the such Buyer's
representatives as set forth on Schedule I, or to such other address and/or facsimile number and/or to the attention of such other
Person as the recipient party has specified by written notice given to each other party five (5) days prior to the effectiveness of such
change.  Written confirmation of receipt (A) given by the recipient of such notice, consent, waiver or other communication, (B)
mechanically or electronically generated by the sender's facsimile machine containing the time, date, recipient facsimile number and an
image of the first page of such transmission or (C) provided by an overnight courier service shall be rebuttable evidence of personal
service, receipt by facsimile or receipt from an overnight courier service in accordance with clause (i), (ii) or (iii) above,
respectively.

(g)Successors and Assigns.  The Company shall not assign this Agreement or any rights or
obligations hereunder without the prior written consent of each Buyer, including by merger or consolidation.  The Buyers shall not
assign this Agreement or any rights or obligations hereunder without the prior written consent of the Company. 

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

(i)Survival.  Unless this Agreement is terminated under Section 8, the representations and
warranties of the Company and each Buyer contained in Sections 2 and 3, the agreements and covenants set forth in Sections 4 (other
than Sections 4(c) and 4(d) which shall survive until the Warrants are no longer outstanding), 5 and 9 shall survive for two years
following the Closing and the delivery and exercise of Securities, as applicable.

(j)Further Assurances.  Each party shall do and perform, or cause to be done and performed, all
such further acts and things, and shall execute and deliver all such other agreements, certificates, instruments and documents, as any
other party may reasonably request in order to carry out the intent and accomplish the purposes of this Agreement and the
consummation of the transactions contemplated hereby.

(k)Indemnification.  (i)  In consideration of the Buyers' execution and delivery of the Transaction
Documents and acquiring the Securities thereunder and in addition to all of the Company's other obligations under the Transaction
Documents, the Company shall defend, protect, indemnify and hold harmless each Buyer and each of its partners, members, officers,
directors, employees and direct or indirect investors and any of the foregoing Persons' agents or other representatives (including,
without limitation, those retained in connection with the transactions contemplated by this Agreement) (collectively, the
"Indemnitees") from and against any and all actions, causes of action, suits, claims, losses, costs, penalties, fees, liabilities
and damages, and expenses in connection therewith (irrespective of whether any such Indemnitee is a party to the action for which
indemnification hereunder is sought), and including reasonable attorneys' fees and disbursements (the "Indemnified
Liabilities"), incurred by any Indemnitee as a result of, or arising out of, or relating to (a) any misrepresentation or breach of any
representation or warranty made by the Company in the Transaction Documents or any other certificate, instrument or document
contemplated hereby or thereby, (b) any breach of any covenant, agreement or obligation of the Company contained in the Transaction
Documents or any other certificate, instrument or document contemplated hereby or (c) any cause of action, suit or claim brought or
made against such Indemnitee by a third party (including for these purposes a derivative action brought on behalf of the Company) and
arising out of or resulting from the execution, delivery, performance or enforcement of the Transaction Documents other than as a result
of the gross negligence or willful misconduct of such Buyer.  To the extent that the foregoing undertaking by the Company may be
unenforceable for any reason, the Company shall make the maximum contribution to the payment and satisfaction of each of the
Indemnified Liabilities which is permissible under applicable law.  

(ii)Promptly after receipt by an Indemnitee under this Section 9(k) of notice of the commencement of any
action or proceeding (including any governmental action or proceeding) involving an Indemnified Liability, such Indemnitee shall, if a
claim for indemnification in respect thereof is to be made against any indemnifying party under this Section 9(k), deliver to the
indemnifying party a written notice of the commencement thereof, and the indemnifying party shall have the right to participate in, and,
to the extent the indemnifying party so desires, jointly with any other indemnifying party similarly noticed, to assume control of the
defense thereof with counsel mutually satisfactory to the indemnifying party and the Indemnitee; provided, however, that an Indemnitee
shall have the right to retain its own counsel at its own expense.  The Indemnitee shall cooperate fully with the indemnifying party in
connection with any negotiation or defense of any such action or Indemnified Liabilities by the indemnifying party and shall furnish to
the indemnifying party all information reasonably available to the Indemnitee that relates to such action or Indemnified Liabilities.  The
indemnifying party shall keep the Indemnitee fully apprised at all times as to the status of the defense or any settlement negotiations
with respect thereto.  No indemnifying party shall be liable for any settlement of any action, claim or proceeding effected without its prior
written consent, provided, however, that the indemnifying party shall not unreasonably withhold, delay or condition its consent.  No
indemnifying party shall, without the prior written consent of the Indemnitee, consent to entry of any judgment or enter into any
settlement or other compromise which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such
Indemnitee of a release from all liability in respect to such Indemnified Liabilities or litigation.  Following indemnification as provided for
hereunder, the indemnifying party shall be subrogated to all rights of the Indemnitee with respect to all third parties, firms or
corporations relating to the matter for which indemnification has been made.  The failure to deliver written notice to the indemnifying
party within a reasonable time of the commencement of any such action shall not relieve such indemnifying party of any liability to the
Indemnitee under this Section 9(k), except to the extent that the indemnifying party is prejudiced in its ability to defend such action.

(iii)The indemnification required by this Section 9(k) shall be made by periodic payments of the amount
thereof during the course of the investigation or defense, as and when bills are received or Indemnified Liabilities are incurred.

(iv)The indemnity agreements contained herein shall be in addition to  (i) any cause of action or similar right
of the Indemnitee against the indemnifying party or others, and (ii) any liabilities the indemnifying party may be subject to pursuant to
the law.

(l)No Strict Construction.  The language used in this Agreement will be deemed to be the
language chosen by the parties to express their mutual intent, and no rules of strict construction will be applied against any party.

(m)Remedies.  Each Buyer shall have all rights and remedies set forth in the Transaction
Documents and all rights and remedies which such holders have been granted at any time under any other agreement or contract and
all of the rights which such holders have under any law.  Any Person having any rights under any provision of this Agreement shall be
entitled to enforce such rights specifically (without posting a bond or other security), to recover damages by reason of any breach of any
provision of this Agreement and to exercise all other rights granted by law.  Furthermore, the Company recognizes that in the event that
it fails to perform, observe, or discharge any or all of its obligations under the Transaction Documents, any remedy at law may prove to
be inadequate relief to such Buyer.  The Company therefore agrees that the Buyers shall be entitled to seek temporary and permanent
injunctive relief in any such case without the necessity of proving actual damages and without posting a bond or other security.

(n)Rescission and Withdrawal Right.  Notwithstanding anything to the contrary contained in (and
without limiting any similar provisions of) the Transaction Documents, whenever any Buyer exercises a right, election, demand or option
under a Transaction Document and the Company does not timely perform its related obligations within the periods therein provided,
then such Buyer may rescind or withdraw, in its sole discretion from time to time upon written notice to the Company, any relevant
notice, demand or election in whole or in part without prejudice to its future actions and rights.

(o)Payment Set Aside.  To the extent that the Company makes a payment or payments to the
Buyers hereunder or pursuant to any of the other Transaction Documents or the Buyers enforce or exercise their rights hereunder or
thereunder, and such payment or payments or the proceeds of such enforcement or exercise or any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set aside, recovered from, disgorged by or are required to be refunded, repaid or
otherwise restored to the Company, a trustee, receiver or any other Person under any law (including, without limitation, any bankruptcy
law, state or federal law, common law or equitable cause of action), then to the extent of any such restoration the obligation or part
thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made
or such enforcement or setoff had not occurred.

[Signature Page Follows]

IN WITNESS WHEREOF, each Buyer and the Company have caused their respective
signature page to this Securities Purchase Agreement to be duly executed as of the date first written above.

	
COMPANY:

	
8x8, INC.

By: _____________________________

   Name:  

Title:

	 
	 

IN WITNESS WHEREOF, each Buyer and the Company have caused their respective
signature page to this Securities Purchase Agreement to be duly executed as of the date first written above.

	
BUYERS:

	
CASTLERIGG MASTER INVESTMENTS LTD.

BY: SANDELL ASSET MANAGEMENT CORP.

 
By: _____________________________

Name:  

Title:    

	 

IN WITNESS WHEREOF, each Buyer and the Company have caused their respective
signature page to this Securities Purchase Agreement to be duly executed as of the date first written above.

	
BUYERS:

	
KINGS ROAD INVESTMENT LTD.

 
By: _____________________________

Name:  

Title:    

	 

SCHEDULE I

	
(1)
	 	
(2)
	 	
(3)
	
(4)
	
(6)

	
Buyer
	 	
Address and Facsimile Number
	 	
Number of Purchased Shares
	

Number of Warrant Shares
	
Legal Representative's

Address and Facsimile Number

	
	
	
	
	
	
	

	
Castlerigg Master Investments Ltd.
	 	

   c/o Sandell Asset Management Corp.

   40 West 57th Street

   New York, NY 10019

   Attn: Cem Hacioglu / Matthew Pliskin

   Telephone: (212) 603-5700

   Facsimile: (212) 603-5710

   Residence: British Virgin Islands
	 	
3,571,429

	
892,856
	

Schulte Roth & Zabel LLP

919 Third Avenue

New York, New York  10022

Attention:  Eleazer Klein, Esq.

Facsimile: (212) 593-5955

Telephone:  (212) 756-2376

	
Kings Road Investments Ltd
	 	

c/o Polygon Investment Partners LP

598 Madison Avenue

New York, NY  10128

Attn:  Erik Caspersen and Brandon Jones

Telephone: (212) 359-7304

Facsimile: (212) 359-7303

Residence: Cayman Islands
	 	
3,571,429
	
892,856
	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 

EXHIBITS

Exhibit AForm of Warrants

   Exhibit BForm of Irrevocable Transfer Agent Instructions

   Exhibit CSecretary's Certificate

   Exhibit DForm of Officer's Certificate

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