Document:

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EXHIBIT 10.2

         STOCK SUBSCRIPTION AGREEMENT dated as of July 28, 2003, among NUCLEAR
TECHNOLOGIES, INC., a Delaware corporation (the "COMPANY"), ADVANCED TECHNOLOGY
INDUSTRIES, INC., a Delaware corporation ("ATI"), ATI NUKLEAR AG, a German
corporation ("ATI NUKLEAR"), HANS-JOACHIM SKROBANEK ("SKROBANEK") and PETER
GOERKE ("GOERKE" and, together with ATI, ATI Nuklear and Skrobanek, the
"PURCHASERS").

         WHEREAS, the Company desires to sell to each Purchaser, and each
Purchaser desires to purchase from the Company, the number of shares of common
stock, par value $0.01 per share, of the Company (the "COMMON STOCK"), upon the
terms and subject to the conditions of this Agreement;

         WHEREAS, ATI Nuklear is a wholly-owned subsidiary of ATI;

         WHEREAS, ATI is a party to the Agreement and Plan of Merger dated as of
June 18, 2003 (the "MERGER AGREEMENT") attached hereto as Exhibit A among ATI,
LTDN Acquisition Corp. and LTDnetwork, Inc., a Delaware corporation ("LTDN");

         WHEREAS, pursuant to the Merger Agreement, ATI and its subsidiaries are
restricted from certain activities without the prior approval of LTDN; and

         WHEREAS, the Board of Directors of ATI, acting on the recommendation of
Hans-Joachim Schuerholz, an independent member of such Board of Directors, ATI
Nuklear and the Company has approved the transactions contemplated hereunder.

         NOW, THEREFORE, in consideration of the foregoing and the
representations, warranties and covenants herein contained, the parties hereto,
intending to be legally bound, hereby agree as follows:

                                   ARTICLE I.

                                  SUBSCRIPTION
                                  ------------

         SECTION 1.01. PURCHASE AND SALE. On the terms and subject to the
conditions of this Agreement, at the Closing (as defined in Section 1.02), (a)
ATI shall transfer to the Company the assets set forth on Schedule 1 hereto (the
"ATI Assets") for (i) the assumption by the Company of the liabilities set forth
on Schedule 2 hereto to the extent such liabilities exist as of the Closing and
any other liabilities designated by ATI prior to the Closing that relate to the
ATI Assets or the ATI Assumed Liabilities (the "ATI ASSUMED LIABILITIES") and
(ii) the issuance to ATI of 4,100 shares of Common Stock (the "ATI SHARES"), (b)
ATI Nuklear shall transfer to the Company the assets set forth on Schedule 3
hereto (the "ATI NUKLEAR ASSETS") for (i) the assumption by the Company of the
liabilities set forth on Schedule 4 hereto to the extent such liabilities exist
as of the Closing and any other liabilities designated by ATI Nuklear prior to
the Closing that relate to the ATI Nuklear Assets or the ATI Nuklear Assumed
Liabilities (the "ATI NUKLEAR ASSUMED LIABILITIES") and (ii) the issuance to ATI

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Nuklear of 1,000 shares of Common Stock (the "ATI NUKLEAR SHARES"), (c) the
Company shall sell and deliver to Skrobanek, and Skrobanek shall purchase from
the Company, 2,450 shares of Common Stock (the "SKROBANEK SHARES") for an
aggregate purchase price of $1 and (d) the Company shall sell and deliver to
Goerke, and Goerke shall purchase from the Company, 2,450 shares of Common Stock
(the "GOERKE SHARES" and, together with the ATI Shares, the ATI Nuklear Shares
and the Skrobanek Shares, the "SHARES") for an aggregate purchase price of $1.
ATI Nuklear hereby directs the Company to issue the ATI Nuklear Shares to ATI.
The purchase of the Shares by the Purchasers, the transfer of the ATI Assets and
the ATI Nuklear Assets to the Company and the assumption of the ATI Assumed
Liabilities and the ATI Nuklear Assumed Liabilities by the Company shall be
referred to herein as the "TRANSACTIONS".

         SECTION 1.02. CLOSING DATE. The closing of the Transactions (the
"CLOSING") shall take place as promptly as practicable following the
satisfaction or waiver of all the conditions (other than those conditions which
by their nature are to be satisfied at Closing, but subject to the fulfillment
or waiver of those conditions) set forth in Article VI (the "CLOSING DATE"), at
October 31, 2003 or at such other place, time and date as shall be agreed
between the parties hereto.

         SECTION 1.03. TRANSACTIONS TO BE EFFECTED AT THE CLOSING.

         (a) At the Closing:

                  (i) The Company shall deliver to ATI (A) the Assumption
         Agreement in the form attached hereto as Exhibit B relating to the ATI
         Assumed Liabilities (the "ATI ASSUMPTION AGREEMENT") and (B)
         certificates in definitive form registered in the name of ATI,
         evidencing the ATI Shares and the ATI Nuklear Shares (as directed by
         ATI Nuklear in Section 1.01);

                  (ii) The Company shall deliver to ATI Nuklear the Assumption
         Agreement in the form attached hereto as Exhibit C relating to the ATI
         Nuklear Assumed Liabilities (the "ATI NUKLEAR ASSUMPTION AGREEMENT"
         and, together with the ATI Assumption Agreement, the "ANCILLARY
         AGREEMENTS");

                  (iii) The Company shall deliver to Skrobanek certificates in
         definitive form registered in the name of Skrobanek, evidencing the
         Skrobanek Shares;

                  (iv) The Company shall deliver to Goerke certificates in
         definitive form registered in the name of Goerke, evidencing the Goerke
         Shares;

                  (v) ATI shall deliver to the Company a Bill of Sale in the
         form attached hereto as Exhibit D relating to the ATI Assets (the "ATI
         BILL OF SALE");

                  (vi) ATI Nuklear shall deliver to the Company a Bill of Sale
         in the form attached hereto as Exhibit E relating to the ATI Nuklear
         Assets (the "ATI NUKLEAR BILL OF SALE");

                  (vii) Skrobanek shall deliver to the Company a check in the
         amount of $1; and

                  (viii) Goerke shall deliver to the Company a check in the
         amount of $1.

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         (b) Each certificate representing the Shares and any other securities
issued in respect of the Shares upon any stock split, stock dividend,
recapitalization, merger, consolidation or similar event, shall (unless
otherwise permitted or unless the shares of Common Stock evidenced by such
certificate shall have been registered under the Securities Act (as hereinafter
defined)) be stamped or otherwise imprinted with a legend substantially in the
following form (in addition to any legend required under applicable state
securities laws):

         "THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
         UNDER THE SECURITIES ACT OF 1933 OR ANY STATE SECURITIES LAWS. THESE
         SHARES MAY NOT BE SOLD OR OFFERED FOR SALE IN THE ABSENCE OF SUCH
         REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT
         TO, SUCH REGISTRATION."

                                  ARTICLE II.

                  REPRESENTATIONS AND WARRANTIES OF THE COMPANY
                  ---------------------------------------------

         The Company hereby represents and warrants to the Purchasers, as of the
date of this Agreement and as of the Closing Date, as follows:

         SECTION 2.01. ORGANIZATION STANDING AND POWER. The Company is duly
organized, validly existing and in good standing under the laws of the State of
Delaware and has full power and authority to enable it to own, lease or
otherwise hold its properties and assets.

         SECTION 2.02. AUTHORITY; EXECUTION AND DELIVERY; ENFORCEABILITY. The
Company has full power and authority to execute this Agreement and the Ancillary
Agreements and to consummate the transactions contemplated hereby and thereby.
The execution and delivery by the Company of this Agreement and the Ancillary
Agreements and the consummation by the Company of the transactions contemplated
hereby and thereby have been duly authorized by all necessary action. The
Company has duly executed and delivered this Agreement and prior to the Closing
the Company will have duly executed and delivered the Ancillary Agreements, and
this Agreement constitutes, and the Ancillary Agreements will after the Closing
constitute, the Company's legal, valid and binding obligation, enforceable
against the Company in accordance with its terms.

         SECTION 2.03. NO CONFLICTS; CONSENTS. The execution and delivery by the
Company of this Agreement do not, the execution and delivery by the Company of
the Ancillary Agreements will not, and the consummation of the transactions
contemplated hereby and thereby and compliance by the Company with the terms
hereof and thereof will not, conflict with, or result in any violation of or
default (with or without notice or lapse of time, or both) under, or give rise
to a right of termination, cancellation or acceleration of any obligation or to
loss of a benefit under, or to increased, additional, accelerated or guaranteed
rights or entitlements of any person under, or result in the creation of any
lien upon any of the properties or assets of the Company under, any provision of
(i) the certificate of incorporation and by-laws of the Company, (ii) any
agreement, contract, instrument or understanding to which the Company is a party
or by which any of its properties or assets is bound or (iii) any judgment,

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order or decree ("JUDGMENT") or statute, law (including common law), ordinance,
rule or regulation ("APPLICABLE LAW") applicable to the Company or its
properties or assets. No consent, approval, license, permit, order or
authorization ("CONSENT") of, or registration, declaration or filing with, any
Federal, state, local or foreign government or any court of competent
jurisdiction, administrative agency or commission or other governmental
authority or instrumentality, domestic or foreign (a "GOVERNMENTAL ENTITY") is
required to be obtained or made by or with respect to the Company in connection
with the execution, delivery and performance of this Agreement or the Ancillary
Agreements or the consummation of the transactions contemplated hereby and
thereby.

         (a) SHARES. The Shares, when issued in accordance with this Agreement,
shall (a) be duly authorized, validly issued, fully paid and nonassessable and
(b) represent all of the outstanding shares of Common Stock as of the Closing
Date.

                                  ARTICLE III.

                REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS
                ------------------------------------------------

         Each Purchaser, severally and not jointly, hereby represents and
warrants to the Company, as of the date of this Agreement and as of the Closing
Date, as follows:

         SECTION 3.01. AUTHORITY; EXECUTION AND DELIVERY; AND ENFORCEABILITY.
Such Purchaser has full power and authority to execute this Agreement and to
consummate the transactions contemplated hereby. The execution and delivery by
such Purchaser of this Agreement and the consummation by such Purchaser of the
transactions contemplated hereby have been duly authorized by all necessary
action. Such Purchaser has duly executed and delivered this Agreement and this
Agreement constitutes its legal, valid and binding obligation, enforceable
against it in accordance with its terms.

         SECTION 3.02. NO CONFLICTS; CONSENTS. The execution and delivery by
such Purchaser of this Agreement do not and the consummation of the transactions
contemplated hereby and compliance by such Purchaser with the terms hereof will
not conflict with, or result in any violation of or default (with or without
notice or lapse of time, or both) under, or give rise to a right of termination,
cancellation or acceleration of any obligation or to loss of a material benefit
under, any provision of (i) in the case of ATI and ATI Nuklear, the certificate
of incorporation or by-laws of such Purchaser, (ii) any agreement, contract,
instrument or understanding to which such Purchaser is a party or by which any
of its properties or assets is bound or (iii) any Judgment or Applicable Law
applicable to such Purchaser or its properties or assets. No Consent of or
registration, declaration or filing with any Governmental Entity is required to
be obtained or made by or with respect to such Purchaser in connection with the
execution, delivery and performance of this Agreement or the consummation the
transactions contemplated hereby, other than, in the case of ATI, compliance
with and filings under Section 13(a) of the Exchange Act of 1934, as amended.

         SECTION 3.03. RESTRICTED SHARES. (a) Such Purchaser (other than ATI) is
not a "U.S. Person" as that term is defined in Regulation S promulgated under
the Securities Act of 1933 (as amended, the "SECURITIES ACT") and is not
acquiring the Shares for the account or benefit of a U.S. Person. Under
Regulation S, with certain exceptions, "U.S. Person" means: (i) any natural

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person resident in the U.S.; (ii) any partnership or corporation organized or
incorporated under the laws of the U.S.; (iii) any estate of which any executor
or administrator is a U.S. person; (iv) any trust of which any trustee is a U.S.
person; (v) any agency or branch of a foreign entity located in the U.S.; (vi)
any non-discretionary account or similar account (other than an estate or trust)
held by a dealer or other fiduciary for the benefit or account of a U.S. person;
(vii) any discretionary account or similar account (other than an estate or
trust) held by a dealer or other fiduciary organized, incorporated, or (if an
individual) resident in the U.S.; and (viii) any partnership or corporation if:
(A) organized or incorporated under the laws of any foreign jurisdiction; and
(B) formed by a U.S. person principally for the purpose of investing in
securities not registered under the Securities Act, unless it is organized or
incorporated and owned by accredited investors (as defined in Rule 501(a) under
the Securities Act) who are not natural persons, estates or trusts.

         (b) Such Purchaser acknowledges and understands that the Shares
constitute a "restricted security" under the Securities Act and have not been
registered under the Securities Act in reliance upon specific exemption
therefrom, which exemption depends upon, among other things, the bona fide
nature of such Purchaser's representations as expressed herein. Such Purchaser
further understands that the Shares must be held indefinitely unless they are
subsequently registered under the Securities Act or an exemption from such
registration is available. In addition, such Purchaser is acquiring the Shares
for investment for its own account and not with the view to, or for resale in
connection with, any distribution thereof. Moreover, such Purchaser understands
that the Company is under no obligation to register the Shares. Such Purchaser
understands that the certificate evidencing the Shares will be imprinted with a
legend as described in Section 1.03(b) which prohibits the transfer of the
Shares unless they are registered or such registration is not required.

                                  ARTICLE IV.

                                    COVENANTS
                                    ---------

         SECTION 4.01. RESTRICTIONS UNDER THE MERGER AGREEMENT. From the Closing
until the earlier of (a) the termination of the Merger Agreement and (b) the
Effective Time (as defined in the Merger Agreement), each Purchaser (either as a
shareholder, director or officer of the Company) shall not permit the Company to
take any actions that would be prohibited under the terms of the Merger
Agreement.

         SECTION 4.02. COVENANT OF SKROBANEK AND GOERKE. From and after the
Closing, neither Skrobanek nor Goerke shall sell, transfer, assign, pledge,
grant a security interest in or otherwise dispose of or encumber any Shares or
other equity interests of the Company held by such Purchaser without (a) the
written consent of ATI (such consent not to be unreasonably withheld) and (b)
until the earlier of (i) the termination of the Merger Agreement and (ii) the
Effective Time (as defined in the Merger Agreement), the written consent of LTDN
(such consent not to be unreasonably withheld).

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         SECTION 4.03. REASONABLE EFFORTS. (a) On the terms and subject to the
conditions of this Agreement, each Purchaser and the Company shall use its
reasonable efforts to cause the Closing to occur, including taking all
reasonable actions necessary to comply promptly with all legal requirements that
may be imposed on it with respect to the Closing.

         (b) Each Purchaser and the Company shall use its reasonable efforts to
obtain, and to cooperate in obtaining, all consents from third parties necessary
or appropriate to permit the transfer of the ATI Assets and the ATI Nuklear
Assets to the Company. Each Purchaser and the Company shall use its reasonable
efforts to negotiate with creditors relating to the ATI Assumed Liabilities and
ATI Nuklear Assumed Liabilities to (i) convert such obligations to common stock
of ATI prior to the Closing, (ii) cancel or permanently reduce such obligations
prior to the Closing and/or (iii) consent to the assumption of such obligations
by the Company and the release of ATI or ATI Nuklear, as the case may be, of
such obligations.

         SECTION 4.04. EXPENSES. Whether or not the Closing takes place all
costs and expenses incurred in connection with this Agreement, the Ancillary
Agreements, the ATI Bill of Sale and the ATI Nuklear Bill of Sale and the
transactions contemplated hereby and thereby shall be paid by the party
incurring such expense.

         SECTION 4.05. FURTHER ASSURANCES. From time to time, as and when
requested by ATI or ATI Nuklear, the Company shall execute and deliver, or cause
to be executed and delivered, all such documents and instruments and shall take,
or cause to be taken, all such further actions, as ATI or ATI Nuklear may
reasonably deem necessary or desirable to consummate the transactions
contemplated by this Agreement, including, executing and delivering to ATI or
ATI Nuklear such assignments, consents and other instruments as ATI or ATI
Nuklear may reasonably request as necessary or desirable for such purpose.

         SECTION 4.06. GERMAN INCORPORATION. The parties hereto will in good
faith discuss the possibility of reincorporating the Company under the laws of
Germany within 90 days after the date hereof. The parties are aware that this
U.S. company cannot be incorporated in Germany under the laws of Germany. German
corporate law has no statutes that would allow this. It will be mandatory to
form a new German entity, which might preferably be a "Gesellschaft mit
beschraenkter Haftung", abbreviated "GmbH", that can be compared with a Limited
Liability Company according to U.S. law. This company must either receive the
assets of this U.S. Company, including but not limited to the customer contracts
and all tangible and intangible assets. The parties will also discuss
alternative ways of reaching the economic result that is under German law
comparable with reincorporating the U.S. company within the U.S. In case the
parties will decide to form a new German company that might most likely be a
GmbH, they hereby already agree that Goerke and Skrobanek will become managing
directors (Geschaeftsfuehrer) of such a new German Company.

                                   ARTICLE V.

                              CONDITIONS PRECEDENT
                              --------------------

         SECTION 5.01. CONDITIONS TO EACH PARTY'S OBLIGATION. The obligation of
the Purchasers and the Company to consummate the Transactions is subject to the
satisfaction or waiver on or prior to the Closing of the following conditions:

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         (a) GOVERNMENTAL APPROVALS. All other authorizations, consents, orders
or approvals of, or declarations or filings with, or expirations of waiting
periods imposed by, any Governmental Entity necessary for the consummation of
the Transactions shall have been obtained or filed or shall have occurred.

         (b) NO INJUNCTIONS OR RESTRAINTS. No Applicable Law or injunction
enacted, entered, promulgated, enforced or issued by any Governmental Entity or
other legal restraint or prohibition preventing the consummation of the
Transactions shall be in effect.

         SECTION 5.02. CONDITIONS TO OBLIGATION OF THE PURCHASERS. The
obligation of each Purchaser to consummate the Transactions is subject to the
satisfaction (or waiver by the Purchasers; provided that until the earlier of
(a) the termination of the Merger Agreement and (b) the Effective Time (as
defined in the Merger Agreement) such waiver requires the consent of LTDN) on or
prior to the Closing Date of the following conditions:

         (a) REPRESENTATIONS AND WARRANTIES. The representations and warranties
of the Company made in this Agreement shall be true and correct in all material
respects, as of the date hereof and as of the time of the Closing as though made
as of such time, and each Purchaser shall have received a certificate signed by
an authorized officer of the Company to such effect.

         (b) PERFORMANCE OF OBLIGATIONS OF THE COMPANY. The Company shall have
performed or complied in all material respects with all obligations and
covenants required by this Agreement to be performed or complied with by the
Company by the time of the Closing, and each Purchaser shall have received a
certificate signed by an authorized officer of the Company to such effect.

         (c) ABSENCE OF PROCEEDINGS. There shall not be pending or threatened
any proceeding challenging or seeking to restrain or prohibit the Transactions
or any other transaction contemplated by this Agreement or seeking to obtain
from any Purchaser or any of its subsidiaries in connection with the
Transactions any damages.

         (d) CONSENTS. The Purchasers shall have received written consents from
all third parties necessary or appropriate to effect the Transactions, including
the consents from all creditors with respect to the assumption by the Company of
the ATI Assumed Liabilities and the ATI Nuklear Assumed Liabilities.

         (e) ATI ASSUMPTION AGREEMENT. ATI shall have received a copy of the ATI
Assumption Agreement duly executed and delivered by the Company.

         (f) ATI NUKLEAR ASSUMPTION AGREEMENT. ATI Nuklear shall have received a
copy of the ATI Nuklear Assumption Agreement duly executed and delivered by the
Company.

         (g) OTHER DOCUMENTS. The Company shall have furnished to ATI such other
documents as ATI may reasonably request.

         SECTION 5.03. CONDITIONS TO OBLIGATION OF THE COMPANY. The obligation
of the Company to consummate the Transactions is subject to the satisfaction (or
waiver by the Company) on or prior to the Closing Date of the following
conditions:

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         (a) REPRESENTATIONS AND WARRANTIES. The representations and warranties
of each Purchaser made in this Agreement shall be true and correct in all
material respects, as of the date hereof and as of the time of the Closing as
though made as of such time, and the Company shall have received a certificate
signed by each Purchaser or an authorized officer of Purchaser, as the case may
be, to such effect.

         (b) PERFORMANCE OF OBLIGATIONS OF EACH PURCHASER. Each Purchaser shall
have performed or complied in all material respects with all obligations and
covenants required by this Agreement to be performed or complied with by such
Purchaser by the time of the Closing, and the Company shall have received a
certificate signed by each Purchaser or an authorized officer of such Purchaser,
as the case may be, to such effect.

         (c) ATI BILL OF SALE. The Company shall have received a copy of the ATI
Bill of Sale duly executed and delivered by ATI.

         (d) ATI NUKLEAR BILL OF SALE. The Company shall have received a copy of
the ATI Nuklear Bill of Sale duly executed and delivered by ATI Nuklear.

                                  ARTICLE VI.

                        TERMINATION, AMENDMENT AND WAIVER
                        ---------------------------------

         SECTION 6.01. TERMINATION. Notwithstanding anything to the contrary in
this Agreement, this Agreement may be terminated and the transactions
contemplated by this Agreement abandoned at any time prior to the Closing:

                  (i) by mutual written consent of the Company, the Purchasers
         and, if the Merger Agreement has not been terminated, LTDN; or

                  (ii) by ATI (with the consent of LTDN, if the Merger Agreement
         has not been terminated) if the Closing does not occur on or prior to
         October 31, 2003.

         SECTION 6.02. EFFECT OF TERMINATION. If this Agreement is terminated
and the transactions contemplated hereby are abandoned as described in Section
6.01, this Agreement shall become null and void and of no further force and
effect, except for the provisions of (i) Section 4.04 relating to certain
expenses and (ii) Section 6.01 and this Section 6.02.

         SECTION 6.03. AMENDMENTS AND WAIVERS. This Agreement may not be amended
except by an instrument in writing signed on behalf of the Company, each
Purchaser and, until the earlier of (a) the termination of the Merger Agreement
and (b) the Effective Time (as defined in the Merger Agreement), LTDN.

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                                  ARTICLE VII.

                               GENERAL PROVISIONS
                               ------------------

         SECTION 7.01. ASSIGNMENT. This Agreement and the rights and obligations
hereunder shall not be assignable or transferable by any party hereto without
the prior written consent of the other parties hereto and, until the earlier of
(a) the termination of the Merger Agreement and (b) the Effective Time (as
defined in the Merger Agreement), LTDN. Any attempted assignment in violation of
this Section 7.01 shall be void.

         SECTION 7.02. NO THIRD-PARTY BENEFICIARIES. This Agreement is for the
sole benefit of the parties hereto, LTDN and their permitted assigns and nothing
herein expressed or implied shall give or be construed to give to any person,
other than the parties hereto and such assigns, any legal or equitable rights
hereunder.

         SECTION 7.03. NOTICES. All notices or other communications required or
permitted to be given hereunder shall be in writing and shall be delivered by
hand or sent by facsimile or sent, postage prepaid, by registered, certified or
express mail or reputable overnight courier service and shall be deemed given
when so delivered by hand or facsimile, or if mailed, three days after mailing
(one business day in the case of express mail or overnight courier service), at
the addresses set forth on Schedule 5.

         SECTION 7.04. INTERPRETATION; EXHIBITS AND SCHEDULES; CERTAIN
DEFINITIONS. (a) The headings contained in this Agreement, in any Exhibit or
Schedule hereto and in the table of contents to this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement. All Exhibits and Schedules annexed hereto or referred to herein
are hereby incorporated in and made a part of this Agreement as if set forth in
full herein. Any capitalized terms used in any Schedule or Exhibit but not
otherwise defined therein, shall have the meaning as defined in this Agreement.
When a reference is made in this Agreement to a Section, Exhibit or Schedule,
such reference shall be to a Section of, or an Exhibit or Schedule to, this
Agreement unless otherwise indicated.

         For all purposes hereof:

         "including" means including, without limitation.

         "person" means any individual, firm, corporation, partnership, limited
liability company, trust, joint venture, Governmental Entity or other entity.

         "subsidiary" of any person means another person, an amount of the
voting securities, other voting ownership or voting partnership interests of
which is sufficient to elect at least a majority of its Board of Directors or
other governing body (or, if there are no such voting interests, 50% or more of
the equity interests of which) is owned directly or indirectly by such first
person.

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         SECTION 7.05. COUNTERPARTS. This Agreement may be executed in one or
more counterparts, all of which shall be considered one and the same agreement,
and shall become effective when one or more such counterparts have been signed
by each of the parties and delivered to the other party.

         SECTION 7.06. ENTIRE AGREEMENT. This Agreement, the Ancillary
Agreements, the ATI Bill of Sale and the ATI Nuklear Bill of Sale along with the
Schedules and Exhibits thereto, contain the entire agreement and understanding
between the parties hereto with respect to the subject matter hereof and
supersede all prior agreements and understandings relating to such subject
matter.

         SECTION 7.07. SEVERABILITY. If any provision of this Agreement (or any
portion thereof) or the application of any such provision (or any portion
thereof) to any person or circumstance shall be held invalid, illegal or
unenforceable in any respect by a court of competent jurisdiction, such
invalidity, illegality or unenforceability shall not affect any other provision
hereof (or the remaining portion thereof) or the application of such provision
to any other persons or circumstances.

         SECTION 7.08. CONSENT TO JURISDICTION. Each of Skrobanek and Goerke
irrevocably submits to the exclusive jurisdiction of (a) the Delaware Court of
Chancery, and (b) the United States District Court for the District of Delaware,
for the purposes of any suit, action or other proceeding arising out of this
Agreement or any transaction contemplated hereby or thereby. Each of Skrobanek
and Goerke agrees to commence any such action, suit or proceeding either in the
United States District Court for the District of Delaware or if such suit,
action or other proceeding may not be brought in such court for jurisdictional
reasons, in the Delaware Court of Chancery. Each of Skrobanek and Goerke further
agrees that service of any process, summons, notice or document by U.S.
registered mail to such party's respective address set forth above shall be
effective service of process for any action, suit or proceeding in Delaware with
respect to any matters to which it has submitted to jurisdiction in this Section
7.08. Each of Skrobanek and Goerke irrevocably and unconditionally waives any
objection to the laying of venue of any action, suit or proceeding arising out
of this Agreement or the transactions contemplated hereby and thereby in (i) the
Delaware Court of Chancery, or (ii) the United States District Court for the
District of Delaware, and hereby and thereby further irrevocably and
unconditionally waives and agrees not to plead or claim in any such court that
any such action, suit or proceeding brought in any such court has been brought
in an inconvenient forum.

         SECTION 7.09. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of Delaware
applicable to agreements made and to be performed entirely within such State,
without regard to the conflicts of law principles of such State.

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         IN WITNESS WHEREOF, the Company and each Purchaser have duly executed
this Agreement as of the date first written above.

                                             /s/ Hans-Joachim Skrobanek
                                             -----------------------------------
                                             Hans-Joachim Skrobanek

                                             /s/ Peter Goerke
                                             ----------------------------------
                                             Peter Goerke

                                         ATI NUKLEAR AG ,

                                         by
                                             -----------------------------------
                                             Name:
                                             Title:

                                         ADVANCED TECHNOLOGY INDUSTRIES, INC.

                                         by
                                             -----------------------------------
                                             Name:
                                             Title:

                                         NUCLEAR TECHNOLOGIES, INC.

                                         by
                                             -----------------------------------
                                             Name:
                                             Title:

                                         Acknowledged and Consented to:

                                         LTDNETWORK, INC.

                                         by
                                             -----------------------------------
                                             Name:
                                             Title:092403 S3/A Exhibit 4.10

Exhibit 4.10

8X8, INC.

UNIT SUBSCRIPTION AGREEMENT

                  COMMON STOCK

                  AND WARRANTS

UNIT SUBSCRIPTION AGREEMENT (the "Agreement") dated as of
July 29, 2003 among 8X8, INC., a Delaware corporation
("Company"), and the persons who execute this agreement as
investors (the "Investors").

Background:The Company desires to sell to the Investors, and the
Investors desire to purchase up to an aggregate of 2,260,000 shares of common
stock, $.001 par value per share (the "Shares"), of the Company (the
"Common Stock") at a purchase price of $0.434 per share (the
"Share Price") (an amount equal to the average of the last sale
prices for the Common Stock for each of the five (5) trading days ending on, and
including July 28, 2003 as reported by the NASDAQ Stock Market) and three sets
of 5-year warrants, each in substantially the form attached hereto as Exhibit
1, exercisable to purchase up to an aggregate of  (i) 2,260,000 shares of
Common Stock (100% warrant coverage) at $0.60 per share (the "$.60
Warrants"), (ii) 565,000 shares of Common Stock (25% warrant coverage)
at $0.75 per share (the "$.75 Warrants"), and (iii) 565,000
shares of Common Stock (25% warrant coverage) at $1.00 per share (the
"$1.00 Warrants", and collectively with the $.60 Warrants and
the $.75 Warrants, the "Warrants").  The proceeds are necessary
for the development and continuance of the business of the Company and each of
its Subsidiaries.

STMicroelectronics, Inc. ("STM"), which beneficially owns
13% of the Common Stock, has Preemptive Rights, exercisable to purchase 13% of
the Shares and Warrants.

The Company expects that certain of its officers and directors or their
affiliates may purchase Shares and Warrants under this Agreement.

Certain Definitions:

"Common Stock" shall mean stock of the Company of any class
(however designated) whether now or hereafter authorized, which generally has
the right to participate in the voting and in the distribution of earnings and
assets of the Company without limit as to amount or percentage, including the
Company's Common Stock, $.001 par value per share.

"Company" includes the Company and any corporation or other
entity which shall succeed to or assume, directly or indirectly, the obligations
of the Company hereunder. The term "corporation" shall include
an association, joint stock company, business trust, limited liability company
or other similar organization.

"Company Disclosure Letter" means the disclosure letter
delivered to the Investors prior to the execution of this Agreement, which
letter is incorporated in this Agreement.

"Material Adverse Change" shall mean a material adverse
change in the business, financial condition, results of operation, properties or
operations of the Company and its Subsidiaries taken as a whole.

"Own" means own beneficially, as that term is defined in the
rules and regulations of the SEC.

"Person" means any individual, sole proprietorship,
partnership, corporation, limited liability company, business trust,
unincorporated association, joint stock corporation, trust, joint venture or
other entity, any university or similar institution, or any government or any
agency or instrumentality or political subdivision thereof.

"Preemptive Rights" means STM's rights to purchase its
proportionate share of any issuance of securities by the Company, pursuant to
the Investor Rights Agreement, dated March 31, 2000 by and between the Company
and STM.

"SEC" means the Securities and Exchange Commission. 

"Subsidiary" shall mean any corporation of which stock or
other interest having ordinary power to elect a majority of the Board of
Directors (or other governing body) of such entity (regardless of whether or not
at the time stock or interests of any other class or classes of such corporation
shall have or may have voting power by reason of the happening of any
contingency) is at the time directly or indirectly owned by the Company or by
one or more Subsidiaries.

"Underlying Shares" shall mean the shares of Common Stock
issued or from time to time issuable upon exercise of the Warrants.

"Unit" shall mean (i) 20,000 Shares, (ii) $.60 Warrants to
purchase 20,000 shares of Common Stock, (iii) $.75 Warrants to purchase 5,000
shares of Common Stock, and (iv) $1.00 Warrants to purchase 5,000 shares of
Common Stock.

In consideration of the mutual covenants contained herein, the parties agree
as follows:

1.Purchase and Sale of Stock.

1.1.Sale and Issuance of Securities.  (a)The Company shall
sell to the Investors and the Investors shall purchase from the Company, up to
113 units (the "Units") at a price per Unit equal to the
product of the Share Price and 20,000 or a total of (x) 2,260,000 Shares (the
"Purchased Shares") and (y) Warrants to purchase up to an
aggregate of 3,390,000 shares of Common Stock (the "Purchased
Warrants" and collectively with the Purchased Shares, the
"Securities"), for an aggregate purchase price of up to
$1,130,000.  

(b)The number of Purchased Shares and Purchased Warrants to be purchased
by each Investor from the Company is set forth on Schedule 1.1(b) hereto,
subject to acceptance, in whole or in part, by the Company; provided that the
amount of Securities to be purchased by each Investor other than STM, and the
related purchase price therefor, may be reduced by up to 13% in the event of
exercise of the Preemptive Rights.

1.2.Closing.  The closing (the "Closing") of
the purchase and sale of the Securities hereunder shall take place on July 29,
2003 or such other date agreed to by the Company and Investors who have entered
into Agreements providing for the purchase of at least 70 Units (the
"Closing Date").  The Closing shall take place at the offices
of Hahn & Hessen LLP, the Investors' counsel, in New York, New York, or at
such other location as is mutually acceptable to the Investors and the Company,
subject to fulfillment of the conditions of closing set forth in the Agreement.
At the Closing:

(a)each Investor purchasing Securities at the Closing shall deliver to
the Company or its designees by wire transfer or such other method of payment as
the Company shall approve, an amount equal to the purchase price of the
Securities purchased by such Investor hereunder, as set forth opposite such
Investor's name on the signature pages hereof; provided that an Investor, Orin
Hirschman ("Hirschman"), shall deposit in escrow 13% of the
Securities, and the related purchase price therefor, to permit STM to exercise
the Preemptive Rights; and Orin Hirschman and the Company shall enter into an
escrow agreement (the "Escrow Agreement") in substantially the
form attached as Exhibit 6, to provide for escrow of $127,509.20, the purchase
price of 14.69 Units and the Purchased Shares and  Purchased Warrants included
in such Units in accordance with this proviso;

(b)(i) the Company shall authorize its transfer agent (the
"Transfer Agent") to arrange delivery to each Investor of one or more
stock certificates registered in the name of the Investor, or in such nominee
name(s) as designated by the Investor in writing, representing the number of
Shares equal to 20,000 multiplied by the number of Units purchased by the
Investor and (ii) the Transfer Agent shall deliver to counsel for the Investors
a certificate of the Transfer Agent, in form and substance reasonably acceptable
to counsel for the Investors, certifying that the Transfer Agent is duly
authorized to issue the Purchased Shares.   

(c)the Company shall issue and deliver to each Investor purchasing
Securities at the Closing (x) $.60 Warrants equal to 20,000 multiplied by the
number of Units purchased, (y) $.75 Warrants equal to 5,000 multiplied by the
number of Units purchased and (z) $1.00 Warrants equal to 5,000 multiplied by
the number of Units purchased.

1.3.Conditions of Closing.  The obligation of the Investors to
complete the purchase of the Securities at the Closing is subject to fulfillment
of the following conditions:

(a)the Company and the Investors shall execute and deliver a Investor
Rights Agreement, dated the Closing Date, in the form attached as
Exhibit 2 with respect to the Purchased Shares and the Underlying
Shares (the "Investor Rights Agreement");

(b)the Company and Orin Hirschman shall execute and deliver a Financial
Advisory Agreement, dated the Closing Date, in the form attached as
Exhibit 3 (the "Financial Advisory Agreement",] and
with the Agreement, the Warrants, the Escrow Agreement, and the Investor Rights
Agreements, the "Transaction Documents");

(c)the Company shall deliver to the Investors an Opinion of Counsel,
dated the Closing Date and reasonably satisfactory to counsel for the Investors,
with respect to the matters set forth on Exhibit 4; 

(d)the Company shall have complied fully with the Preemptive Rights;

(e)the representation and warranties of the Company set forth in this
Agreement shall be true and correct as of the date of this Agreement and (except
to the extent such representations and warranties speak as of an earlier date)
as of the Closing Date as though made on and as of the Closing Date, and the
Company shall have performed in all material respects all covenants and other
obligations required to be performed by it under this Agreement at or prior to
the Closing Date, and the Investors shall have received a certificate signed on
behalf of the Company by the President and Secretary of the Company, in such
capacities, to such effect (the "Closing Certificate") and the
Closing Certificate shall also contain an accurate list of all the agreements to
which the Company is a party that are material to the business, financial
condition, results of operation, properties or operations of the Company and its
Subsidiaries taken as a whole; 

(f)the Company shall have executed and delivered all documents,
reasonably requested by counsel for the Investors; 

(g)All Securities delivered at the Closing shall have all necessary stock
transfer tax stamps (purchased at the expense of the Company) affixed; and 

(h)the Company shall pay the Investors' expenses to the extent set forth
in Section 6.9 hereof.

(i)the Company shall have consulted the staff of NASDAQ Stock Market (the
"Nasdaq Staff") regarding the Contemplated Transactions (as defined
below) and the Nasdaq Stafff shall have raised no objection to the consummation
of the Contemplated Transactions without seeking the approval of the Company's
stockholders.

2.Representations and Warranties of the Company.  The Company
hereby represents and warrants to each of the Investors as follows:

2.1.Corporate Organization; Authority; Due Authorization.

(a)The Company (i) is a corporation duly organized, validly existing and
in good standing under the laws of the jurisdiction of its incorporation, (ii)
has the corporate power and authority to own or lease its properties as and in
the places where such business is now conducted and to carry on its business as
now conducted and (iii) is duly qualified and in good standing as a foreign
corporation authorized to do business in every jurisdiction where the failure to
so qualify, individually or in the aggregate, would have a material adverse
effect on the operations, prospects, assets, liabilities, financial condition or
business of the Company (a "Material Adverse Effect").  Set
forth in the Company Disclosure Letter is a complete and correct list of all
Subsidiaries.  Each Subsidiary is duly incorporated, validly existing and in
good standing under the laws of its jurisdiction of incorporation and is
qualified to do business as a foreign corporation in each jurisdiction in which
qualification is required, except where failure to so qualify would not have a
Material Adverse Effect.

(b)The Company (i) has the requisite corporate power and authority to
execute, deliver and perform this Agreement and the other Transaction Documents
to which it is a party and to incur the obligations herein and therein and (ii)
has been authorized by all necessary corporate action to execute, deliver and
perform this Agreement and the other Transaction Documents to which it is a
party and to consummate the transactions contemplated hereby and thereby (the
"Contemplated Transactions").  Each of this Agreement and the
other Transaction Documents is a valid and binding obligation of the Company
enforceable in accordance with its terms except as limited by applicable
bankruptcy, reorganization, insolvency, moratorium or similar laws affecting the
enforcement of creditors' rights and the availability of equitable remedies
(regardless of whether such enforceability is considered in a proceeding at law
or equity).

2.2.Capitalization.  As of July 24, 2003, the authorized capital
stock of the Company consisted of (i) 100,000,000 shares of Common Stock, $.001
par value, of which 28,475,370 shares of Common Stock are outstanding and (ii)
5,000,000 shares of Preferred Stock, $.01 par value, of which one Special Voting
Share is outstanding.  All outstanding shares were issued in compliance with all
applicable Federal and state securities laws, and the issuance of such shares
was duly authorized.  Except as contemplated by this Agreement or as set forth
in the Company Disclosure Letter, there are (i) no outstanding
subscriptions, warrants, options, conversion privileges or other rights or
agreements obligating the Company to purchase or otherwise acquire or issue any
shares of capital stock of the Company (or shares reserved for such purpose),
(ii) no preemptive rights (other than the Preemptive Rights) contained in
the Company's Certificate of Incorporation, as amended (the "Certificate
of Incorporation"), By-Laws of the Company or contracts to which the
Company is a party or rights of first refusal with respect to the issuance of
additional shares of capital stock of the Company, including without limitation
the Securities and the Underlying Shares, and (iii) no commitments or
understandings (oral or written) of the Company to issue any shares, warrants,
options or other rights.  Except as set forth in the Company Disclosure Letter,
none of the shares of Common Stock are subject to any stockholders' agreement,
voting trust agreement or similar arrangement or understanding.  Except as set
forth in the Company Disclosure Letter, the Company has no outstanding bonds,
debentures, notes or other obligations the holders of which have the right to
vote (or which are convertible into or exercisable for securities having the
right to vote) with the stockholders of the Company on any matter.  With respect
to each Subsidiary, (i) all the issued and outstanding shares of the
Subsidiary's capital stock have been duly authorized and validly issued, are
fully paid and nonassessable, have been issued in compliance with applicable
federal and state securities laws, were not issued in violation of or subject to
any preemptive rights or other rights to subscribe for or purchase securities,
and (ii) except as disclosed in the Company Disclosure Letter, there are no
outstanding options to purchase, or any preemptive rights or other rights to
subscribe for or to purchase, any securities or obligations convertible into, or
any contracts or commitments to issue or sell, shares of the Subsidiary's
capital stock or any such options, rights, convertible securities or
obligations.  Except as disclosed in the Company Disclosure Letter, the Company
owns 100% of the outstanding equity of each Subsidiary.

2.3.Validity of Securities.  The issuance of the Securities has
been duly authorized by all necessary corporate action on the part of the
Company and, when issued to and paid for by you in accordance with this
Agreement and the countersigning of the certificate or certificates representing
the Purchased Shares by a duly authorized signator of the registrar for the
Common Stock, the Purchased Shares will be validly issued, fully paid and non-
assessable.  

2.4.Underlying Shares.  The issuance of the Underlying Shares upon
exercise of the Purchased Warrants has been duly authorized, and the Underlying
Shares have been, and at all times prior to such exercise will have been, duly
reserved for issuance upon such exercise and, when so issued, will be validly
issued, fully paid and non-assessable.

2.5.Private Offering.  Neither the Company nor anyone acting on
its behalf has within the last 12 months issued, sold or offered any security of
the Company (including, without limitation, any Common Stock or warrants of
similar tenor to the Purchased Warrants) to any Person under circumstances that
would cause the issuance and sale of the Securities, as contemplated by this
Agreement, to be subject to the registration requirements of the Securities Act
of 1933, as amended (the "Securities Act").  The Company agrees
that neither the Company nor anyone acting on its behalf will offer the
Securities or any part thereof or any similar securities for issuance or sale
to, or solicit any offer to acquire any of the same from, anyone so as to make
the issuance and sale of the Securities subject to the registration requirements
of Section 5 of the Securities Act.  

2.6.Brokers and Finders.  The Company has retained Robert Giannini
of Griffin Securities, Inc. ("Giannini"), 17 State Street, New York,
New York 10004, as a broker in connection with the Contemplated Transactions.
The Company shall pay to a fee equal to five-percent (5%) of the aggregate
purchase price of the Securities.

2.7.No Conflict; Required Filings and Consents.  

(a)The execution, delivery and performance of this Agreement and the
other Transaction Documents  by the Company do not, and the consummation by the
Company of the Contemplated Transactions will not, (i) conflict with or violate
the Certificate of Incorporation or By-Laws of the Company or such Subsidiaries,
(ii) conflict with or violate any law, rule, regulation, order, judgment or
decree applicable to the Company or its Subsidiaries or by which any property or
asset of the Company or its Subsidiaries is bound or affected, or (iii) result
in any breach of or constitute a default (or an event which with notice or lapse
of time or both would become a default) under, result in the loss of a material
benefit under, or give to others any right of purchase or sale, or any right of
termination, amendment, acceleration, increased payments or cancellation of, or
result in the creation of a lien or other encumbrance on any property or asset
of the Company or of any of its Subsidiaries pursuant to, any note, bond,
mortgage, indenture, contract, agreement, lease, license, permit, franchise or
other instrument or obligation to which the Company or any of its Subsidiaries
is a party or by which the Company or of any of its Subsidiaries or any property
or asset of the Company or of any of its Subsidiaries is bound or affected;
except, in the case of clauses (ii) and (iii) above, for any such conflicts,
violations, breaches, defaults or other occurrences which would not prevent or
delay consummation of any of the Contemplated Transactions in any material
respect or otherwise prevent the Company from performing its obligations under
this Agreement or any of the other Transaction Documents  in any material
respect, and would not, individually or in the aggregate, have a Material
Adverse Effect. 

(b)The execution and delivery of this Agreement and the other Transaction
Documents  by the Company do not, and the performance of this Agreement and the
other Transaction Documents  and the consummation by the Company of the
Contemplated Transactions will not, require any consent, approval, authorization
or permit of, or filing with or notification to, any Governmental Body (as
hereinafter defined) except for the filing of a Form D with the Securities and
Exchange Commission and applicable requirements, if any, of the Securities
Exchange Act of 1934, as amended (the "Exchange Act") or any
state securities or "blue sky" laws ("Blue Sky
Laws"), and any approval required by applicable rules of The Nasdaq
Stock Market.  The Company has obtained any approval required by applicable
rules of The Nasdaq Stock Market to the Contemplated Transactions.  For purposes
of this Agreement, "Governmental Body" shall mean any: (a)
nation, state, commonwealth, province, territory, county, municipality, district
or other jurisdiction of any nature; (b) federal, state, local, municipal,
foreign or other government; or (c) governmental or quasi-governmental authority
of any nature (including any governmental division, department, agency,
commission, instrumentality, official, organization, unit, body or entity and
any court or other tribunal).

2.8.Compliance.  Except as set forth in the Company Disclosure
Letter, neither the Company nor any Subsidiary is in conflict with, or in
default or violation of (i) any law, rule, regulation, order, judgment or decree
applicable to the Company or such subsidiary or by which any property or asset
of the Company or such subsidiary is bound or affected ("Legal
Requirement"), or (ii) any note, bond, mortgage, indenture, contract,
agreement, lease, license, permit, franchise or other instrument or obligation
to which the Company or such subsidiary is a party or by which the Company or
such subsidiary or any property or asset of the Company or such subsidiary is
bound or affected, in each case except for any such conflicts, defaults or
violations that would not, individually or in the aggregate, have a Material
Adverse Effect. Neither the Company nor any Subsidiary has received any notice
or other communication from any Governmental Body regarding any actual or
possible violation of, or failure to comply with, any Legal Requirement.

2.9.SEC Documents; Financial Statements.

(a)The information contained in the following documents, did not, as of
the date of the applicable document, include any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances in
which they were made, not misleading, as of their respective filing dates or, if
amended, as so amended (the following documents, collectively, the "SEC
Documents"), provided that the representation in this sentence shall
not apply to any misstatement or omission in any SEC Document filed prior to the
date of this Agreement which was superseded by a subsequent SEC Document filed
prior to the date of this Agreement:

	the Company's Annual Report on Form 10-K for the year
ended March 31, 2003; 

	the Company's definitive Proxy Statement with respect to
its 2003 Special Meeting of Stockholders, filed with the Commission on June 19,
2003; and

(iii)the Company's Quarterly Report on Form 10-Q for the
quarter ended June 30, 2003.

(b)In addition, as of the date of this Agreement, the Company Disclosure
Letter, when read together with the information, qualifications and exceptions
contained in this Agreement, does not include any untrue statement of a material
fact or omit to state any material fact necessary to make the statements
therein, in the light of the circumstances in which they were made, not
misleading.

(c)The Company has filed all forms, reports and documents required to be
filed by it with the SEC since March 31, 2001, including without limitation the
SEC Documents.  As of their respective dates, the SEC Documents filed prior to
the date hereof complied as to form in all material respects with the applicable
requirements of the Securities Act, the Exchange Act, and the rules and
regulations thereunder. 

(d)The Company's Annual Report on Form 10-K for the year ended March 31,
2003, includes consolidated balance sheets as of March 31, 2002 and 2003 and
consolidated statements of income for the one year periods then ended
(collectively, the "Form 10-K Financial Statements").

(e)The Company's Quarterly Report on Form 10-Q for the quarter ended June
30, 2003, includes consolidated balance sheets as of March 31, 2003 and June 30,
2003 and consolidated statements of income for the quarters ended June 30, 2002
and 2003 (the "Form 10-Q Financial Statements" and together
with the Form 10-K Financial Statements, the "Financial
Statements").  

(e)The Financial Statements (including the related notes and schedules
thereto) fairly present in all material respects the consolidated financial
position, the results of operations, retained earnings or cash flows, as the
case may be, of the Company for the periods set forth therein (subject, in the
case of unaudited statements, to normal year-end audit adjustments that would
not be material in amount or effect), in each case in accordance with generally
accepted accounting principles consistently applied during the periods involved,
except as may be noted therein.

2.10.Litigation.  Except as set forth in the SEC Documents or the
Company Disclosure Letter, there are no claims, actions, suits, investigations,
inquiries or proceedings (each, an "Action") pending against
the Company or any of its Subsidiaries or, to the knowledge of the Company,
threatened against the Company or any of its Subsidiaries, at law or in equity,
or before or by any court, tribunal, arbitrator, mediator or any federal or
state commission, board, bureau, agency or instrumentality, that, individually
or in the aggregate, would reasonably be expected to have a Material Adverse
Effect. Neither the Company nor any of its Subsidiaries is a party to or subject
to the provisions of any order, writ, injunction, judgment or decree of any
court or government agency or instrumentality.

2.11.Absence of Certain Changes.  Except as specifically
contemplated by this Agreement or set forth in the Company Disclosure Letter,
the SEC Documents, or the Financial Statements, since March 31, 2003, there has
not been (i) any Material Adverse Change; (ii) any return of any capital or
other distribution of assets to stockholders of Company (except to Company);
(iii) any acquisition (by merger, consolidation, acquisition of stock and/or
assets or otherwise) of any Person; or (iv) any transactions, other than in the
ordinary course of business, consistent with past practices and reasonable
business operations ("Ordinary Course of Business"), with any
of its officers, directors, principal stockholders or employees or any Person
affiliated with any of such persons.

2.12.Proprietary Assets.

(a)For purposes of this Agreement, "Proprietary Assets"
shall mean all right, title and interest of the Company and the Subsidiaries in
and to the following items or types of property: (i) every patent, patent
application, trademark (whether registered or unregistered), trademark
application, trade name, fictitious business name, service mark (whether
registered or unregistered), service mark application, copyright (whether
registered or unregistered), copyright application, maskwork, maskwork
application, trade secret, know-how, customer list, franchise, system, computer
software, computer program, invention, design, blueprint, engineering drawing,
proprietary product, technology, proprietary right or other intellectual
property right or intangible asset; and (ii) all licenses and other rights to
use or exploit any of the foregoing.  

(b)The Company Disclosure Letter sets forth, with respect to each
Proprietary Asset of the Company and the Subsidiaries registered with any
Governmental Body in the U.S., or for which an application has been filed with
any Governmental Body in the U.S., (i) a brief description of such Proprietary
Asset and (ii) the names of the jurisdictions covered by the applicable
registration or application.  The Company Disclosure Letter identifies and
provides a brief description of all other material Proprietary Assets owned by
the Company and its Subsidiaries, and identifies and provides a brief
description of each material Proprietary Asset, or source code version of any
software licensed to the Company or any Subsidiary by any Person (except for any
Proprietary Asset that is licensed to the Company or any Subsidiary under any
third party software license generally available to the public at a cost of less
than $10,000), and identifies such license agreement under which such
Proprietary Asset is being licensed to the Company or any Subsidiary.  Except as
set forth in the Company Disclosure Letter, the Company or its Subsidiaries have
good, valid and marketable title to each of the Proprietary Assets identified in
the Company Disclosure Letter as owned by it, free and clear of all liens and
other encumbrances); has a valid right to use all Proprietary Assets of third
parties identified in the Company Disclosure Letter; and is not obligated to
make any payment to any Person for the use of any Proprietary Asset except as
set forth in the applicable license agreement.  Except as set forth in the
Company Disclosure Letter, neither the Company nor any of its Subsidiaries has
developed jointly with any other Person any material Proprietary Asset with
respect to which such other Person has any rights.

(c)Each of the Company and its Subsidiaries has taken commercially
reasonable and customary measures and precautions to protect and maintain the
confidentiality and secrecy of all Proprietary Assets of the Company and its
Subsidiaries (except Proprietary Assets whose value would be unimpaired by
public disclosure) and otherwise to maintain and protect the value of all
Proprietary Assets of the Company and its Subsidiaries.  Except as set forth in
the Company Disclosure Letter, neither the Company nor any of its Subsidiaries
has (other than pursuant to license agreements identified in the Company
Disclosure Letter) disclosed or delivered to any Person, or permitted the
disclosure or delivery to any Person of, (i) the source code, or any portion or
aspect of the source code, of any Proprietary Asset, (ii) the object code, or
any portion or aspect of the object code, of any Proprietary Asset of the
Company and its Subsidiaries, except in the ordinary course of its business or
(iii) any patent applications (except as required by law).

(d)To the knowledge of the Company, (i) none of the Proprietary Assets of
the Company and its Subsidiaries infringes or conflicts with any Proprietary
Asset owned or used by any other Person; (ii) neither the Company nor any
Subsidiary is infringing, misappropriating or making any unlawful use of any
Proprietary Asset owned or used by any other Person; and (iii) no other Person
is infringing, misappropriating or making any unlawful use of, and no
Proprietary Asset owned or used by any other Person infringes or conflicts with,
any Proprietary Asset of the Company or any of its Subsidiaries.

(e)Except as set forth in the Company Disclosure Letter, excluding
warranty claims received by Company or any of its Subsidiaries in the ordinary
course of business, there has not been any claim by any customer or other Person
alleging that any Proprietary Asset of the Company or any of its Subsidiaries
(including each version thereof that has ever been licensed or otherwise made
available by the Company to any Person) does not conform in all material
respects with any specification, documentation, performance standard,
representation or statement made or provided by or on behalf of the Company.

(f)To the knowledge of the Company, the Proprietary Assets of the Company
and its Subsidiaries constitute all the Proprietary Assets necessary to enable
the Company and its Subsidiaries to conduct their respective businesses in the
manner in which such businesses have been and are being conducted.  Except as
set forth in the Company Disclosure Letter (i) neither the Company nor any
Subsidiary has licensed any of its Proprietary Assets to any Person on an
exclusive, semi-exclusive or royalty-free basis, and (ii) neither the Company
nor any Subsidiary has entered into any covenant not to compete or contract
limiting such entity's ability to exploit fully any of such entity's material
Proprietary Assets or to transact business in any material market or
geographical area or with any Person.

(g)Except as set forth in the Company Disclosure Letter, neither the
Company nor any of its Subsidiaries has at any time received any notice or other
communication (in writing or otherwise) of any actual, alleged, possible or
potential infringement, misappropriation or unlawful use of, any Proprietary
Asset owned or used by any other Person.

2.13.No Adverse Actions.  Except as set forth in the Company
Disclosure Letter, there is no existing, pending or, to the knowledge of the
Company, threatened termination, cancellation, limitation, modification or
change in the business relationship of the Company or any of its Subsidiaries,
with any supplier, customer or other Person except such as would not reasonably
be expected, individually or in the aggregate, to have a Material Adverse
Effect.

2.14.Registration Rights.  Except as set forth in the Investor
Rights Agreement, the SEC Documents, or in the Company Disclosure Letter, the
Company is not under any obligation to register under the Securities Act any of
its currently outstanding securities or any securities issuable upon exercise or
conversion of its currently outstanding securities nor is the Company obligated
to register or qualify any such securities under any state securities or blue
sky laws.

2.15.Corporate Documents. The Company's Certificate of
Incorporation and Bylaws, each as amended to date, which have been requested and
previously provided to the Investors are true, correct and complete and contain
all amendments thereto.

2.16.Disclosure.  No representation or warranty of the Company
herein, no exhibit or schedule hereto, and no information contained or
referenced in the SEC Documents, when read together, contains or will contain
any untrue statement of a material fact or omits or will omit to state a
material fact necessary in order to make the statements contained herein or
therein, in light of the circumstances under which they were made, not
misleading.  On or before 9:00 a.m., New York City Time, on the second
business day after the Closing, the Company shall file a Current Report on Form
8-K describing the material terms of the transactions contemplated by this
Agreement, and disclosing such portions of the Transaction Documents as contain
material nonpublic information with respect to the Company that has not
previously been publicly disclosed by the Company, and attaching as an exhibit
to such Form 8-K a form of this Agreement.  Except for information that may be
provided to the Investors pursuant to this Agreement, the Company shall not, and
shall use commercially reasonable efforts to cause each of its officers,
directors, employees and agents not to, provide any Investor with any material
nonpublic information regarding the Company from and after the filing of such
Form 8-K without the express written consent of such Investor.   

2.17.Use of Proceeds.  The net proceeds received by the Company
from the sale of the Securities shall be used by the Company for working capital
and general corporate purposes, including without limitation to support the
operations of each of the Subsidiaries.

3.Representations and Warranties of the Investors. Each Investor
represents and warrants to the Company as follows:

3.1.Authorization. Such Investor (i) has full power and authority
to execute, deliver and perform this Agreement and the other Transaction
Documents to which it is a party and to incur the obligations herein and therein
and (ii) if applicable has been authorized by all necessary corporate or
equivalent action to execute, deliver and perform this Agreement and the other
Transaction Documents  and to consummate the Contemplated Transactions.  Each of
this Agreement and the other Transaction Documents is a valid and binding
obligation of such Investor enforceable in accordance with its terms, except as
limited by applicable bankruptcy, reorganization, insolvency, moratorium or
similar laws affecting the enforcement of creditors' rights and the availability
of equitable remedies (regardless of whether such enforceability is considered
in a proceeding at law or equity).

3.2.Brokers and Finders.  Such Investor has not retained any
investment banker, broker or finder in connection with the Contemplated
Transactions.

4.Securities Laws.

4.1.Securities Laws Representations and Covenants of
Investors.

(a)This Agreement is made with each Investor in reliance upon such
Investor's representation to the Company, which by such Investor's execution of
this Agreement such Investor hereby confirms, that the Securities to be received
by such Investor will be acquired for investment for such Investor's own
account, not as a nominee or agent, and not with a view to the resale or
distribution of any part thereof such that such Investors would constitute an
"underwriter" under the Securities Act; provided that this
representation and warranty shall not limit the Investor's right to sell the
Underlying Shares pursuant to the Investor Rights Agreement or in compliance
with an exemption from registration under the Securities Act or the Investor's
right to indemnification under this Agreement or the Investor Rights Agreement.

(b)Each Investor understands and acknowledges that the offering of the
Securities pursuant to this Agreement will not be registered under the
Securities Act or qualified under any Blue Sky Laws on the grounds that the
offering and sale of the Securities are exempt from registration and
qualification, respectively, under the Securities Act and the Blue Sky Laws.

(c)Each Investor covenants that, unless the Purchased Shares, the
Purchased Warrants, the Underlying Shares or any other shares of capital stock
of the Company received in respect of the foregoing have been registered
pursuant to the Investor Rights Agreement being entered into among the Company
and the Investors, such Investor will not dispose of such securities unless and
until such Investor shall have notified the Company of the proposed disposition
and shall have furnished the Company with an opinion of counsel reasonably
satisfactory in form and substance to the Company to the effect that
(x) such disposition will not require registration under the Securities Act
and (y) appropriate action necessary for compliance with the Securities Act
and any applicable state, local or foreign law has been taken; provided,
however, that an Investor may dispose of such securities without
providing the opinion referred to above if the Company has been provided with
adequate assurance that such disposition has been made in compliance with Rule
144 under the Securities Act (or any similar rule).

(d)Each Investor represents that (i) such Investor is able to fend
for itself in the Contemplated Transactions; (ii) such Investor has such
knowledge and experience in financial and business matters as to be capable of
evaluating the merits and risks of such Investor's prospective investment in the
Securities; (iii) such Investor has the ability to bear the economic risks
of such Investor's prospective investment and can afford the complete loss of
such investment; (iv) such Investor has been furnished with and has had
access to such information as is in the Company Disclosure Letter together with
the opportunity to obtain such additional information as it requested to verify
the accuracy of the information supplied; and (v) such Investor has had
access to officers of the Company and an opportunity to ask questions of and
receive answers from such officers and has had all questions that have been
asked by such Investor satisfactorily answered by the Company.

(e)Each Investor further represents by execution of this Agreement that
such Investor qualifies as an "accredited investor" as such term is
defined under Rule 501 promulgated under the Securities Act.  Any Investor that
is a corporation, a partnership, a limited liability company, a trust or other
business entity further represents by execution of this Agreement that it has
not been organized for the purpose of purchasing the Securities.

(f)By acceptance hereof, each Investor agrees that the Purchased Shares,
the Purchased Warrants, the Underlying Shares and any shares of capital stock of
the Company received in respect of the foregoing held by it may not be sold by
such Investor without registration under the Securities Act or an exemption
therefrom, and therefore such Investor may be required to hold such securities
for an indeterminate period.

4.2.Legends.  All certificates for the Purchased Shares, Purchased
Warrants and the Underlying Shares, and each certificate representing any shares
of capital stock of the Company received in respect of the foregoing, whether by
reason of a stock split or share reclassification thereof, a stock dividend
thereon or otherwise and each certificate for any such securities issued to
subsequent transferees of any such certificate (unless otherwise permitted
herein) shall bear the following legend:

"THE SECURITIES REPRESENTED BY THIS INSTRUMENT
HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933.  SUCH SECURITIES MAY NOT BE SOLD OR TRANSFERRED IN THE
ABSENCE OF REGISTRATION OR AN EXEMPTION THEREFROM UNDER SAID ACT."

5.Additional Covenants of the Company.

5.1.Reports, Information, Shares.

(a)  The Company shall cooperate with each Investor in supplying such
information as may be reasonably requested by such Investor to complete and file
any information reporting forms presently or hereafter required by the SEC as a
condition to the availability of an exemption, presently existing or hereafter
adopted, from the Securities Act for the sale of any of the Purchased Shares,
the Purchased Warrants, the Underlying Shares and shares of capital stock of the
Company received in respect of the foregoing.

(b)  For so long as an Investor (or the successor or assign of such Investor)
holds either Securities or Underlying Shares, the Company shall deliver to such
Investor (or the successor or assign of such Investor), contemporaneously with
delivery to other holders of Common Stock, a copy of each report of the Company
delivered to holders of Common Stock.

(c)  The Company shall keep reserved for issuance a sufficient number of
authorized but unissued shares of Common Stock (or other securities into which
the Purchased Warrants are then exercisable) so that the Purchased Warrants may
be converted or exercised to purchase Common Stock (or such other securities) at
any time.

5.2.Expenses; Indemnification.  

(a)  The Company agrees to pay on each Closing Date and save the Investors
harmless against liability for the payment of any stamp or similar taxes
(including interest and penalties, if any) that may be determined to be payable
in respect of the execution and delivery of this Agreement,  the issue and sale
of any Securities and the Underlying Shares, the expense of preparing and
issuing the Securities and the Underlying Shares, the cost of delivering the
Securities and the Underlying Shares of each Investor to such Investor's
address, insured in accordance with customary practice, and the costs and
expenses incurred in the preparation of all certificates and letters on behalf
of the Company and of the Company's performance and compliance with all
agreements and conditions contained herein on its part to be performed or
complied with. Each Investor shall be responsible for its out-of-pocket expenses
arising in connection with the Contemplated Transactions, except that, at the
Closing, the Company shall pay fees and disbursements of counsel to the
Investors as set forth in Section 6.9.

(b)  The Company hereby agrees and acknowledges that the Investors have been
induced to enter into this Agreement and to purchase the Securities hereunder,
in part, based upon the representations, warranties and covenants of the Company
contained herein.  The Company hereby agrees to pay, indemnify and hold harmless
the Investors and any director, officer or employee of any Investor against all
claims, losses and damages resulting from any and all legal or administrative
proceedings, including without limitation, reasonable attorneys' fees and
expenses incurred in connection therewith (collectively,
"Loss"), resulting from a breach by the Company of any
representation or warranty of the Company contained herein or the failure of the
Company to perform any covenant made herein; provided that the Company's
liability under this Section 5.2(b) shall be limited to the aggregate purchase
price of the Securities.  

(c)  As soon as reasonably practicable after receipt by an Investor of notice
of any Loss in respect of which the Company may be liable under this Section
5.2, the Investor shall give notice thereof to the Company.  Each Investor may,
at its option, claim indemnity under this Section 5.2 as soon as a claim has
been threatened by a third party, regardless of whether an actual Loss has been
suffered, so long as counsel for such Investor shall in good faith determine
that such claim is not frivolous and that such Investor may be liable or
otherwise incur a Loss as a result thereof and shall give notice of such
determination to the Company.  Each Investor shall permit the Company, at the
Company's option and expense, to assume the defense of any such claim by counsel
mutually and reasonably satisfactory to the Company and the Investors who are
subject to such claim, and to settle or otherwise dispose of the same;
provided, however, that each Investor may at all times participate
in such defense at such Investor's expense; and provided, further,
that the Company shall not, in defense of any such claim, except with the prior
written consent of each Investor subject to such claim, (i) consent to the entry
of any judgment that does not include as an unconditional term thereof the
giving by the claimant or plaintiff in question to each Investor and its
affiliates of a release of all liabilities in respect of such claims, or (ii)
consent to any settlement of such claim.  If the Company does not promptly
assume the defense of such claim irrespective of whether such inability is due
to the inability of the afore-described Investors and the Company to mutually
agree as to the choice of counsel, or if any such counsel is unable to represent
one or more of the Investors due to a conflict or potential conflict of
interest, then an Investor may assume such defense and be entitled to
indemnification and prompt reimbursement from the Company for such Investor's
costs and expenses incurred in connection therewith, including without
limitation, reasonable attorneys' fees and expenses.  Such fees and expenses
shall be reimbursed to the Investors as soon as practicable after submission of
invoices to the Company.

(d)The Company shall maintain the effectiveness of the Registration
Statement (as defined in the Investor Rights Agreement) under the Securities Act
for as long as is required under the Investor Rights Agreement.

5.3.Conduct of Business of the Company.  From the date of the
execution of this Agreement until the date on which STM notifies the Company of
its exercise or its waiver of the Preemptive Rights, or the Preemptive Rights
expire unexercised by their terms, the Company, unless otherwise expressly
contemplated by this Agreement or consented to in writing by the Investors,
will, and will cause its Subsidiaries to, carry on their respective businesses
only in the Ordinary Course of Business, use their respective reasonable best
efforts to preserve intact their business organizations and assets, retain the
services of their officers and employees and maintain their relationships with
customers, suppliers, licensors, licensees and others having business dealings
with them. Without limiting the generality of the foregoing, from the date of
the execution of this Agreement until the Closing Date, the Company shall not,
and shall not permit its Subsidiaries to:

(a)  (i)  increase in any manner the compensation or fringe benefits of, or
pay any bonus to, any director, officer or employee, except for increases or
bonuses in the Ordinary Course of Business to employees who are not directors or
officers and except pursuant to existing arrangements previously disclosed to or
approved in writing by the Investors; (ii) grant any severance or termination
pay (other than pursuant to the normal severance practices or existing
agreements of the Company or its subsidiary in effect on the date of this
Agreement) to, or enter into any severance agreement with, any director, officer
or employee, or enter into any employment agreement with any director, officer
or employee; (iii) establish, adopt, enter into or amend any plan or other
arrangement, except as may be required to comply with applicable law; (iv) pay
any benefit not provided for under any plan or other arrangement; (v) grant any
awards under any bonus, incentive, performance or other compensation plan or
arrangement or plan or other arrangement (including the grant of stock options,
stock appreciation rights, stock-based or stock-related awards, performance
units or restricted stock, or the removal of existing restrictions in any plan
or other arrangement or agreement or awards made thereunder), except for grants
in the Ordinary Course of Business;

(b)  declare, set aside or pay any dividend on, or make any other
distribution in respect of, outstanding shares of capital stock;

(c)  (i)  redeem, purchase or otherwise acquire any shares of capital stock
of the Company or any securities or obligations convertible into or exchangeable
for any shares of capital stock of the Company, or any options, warrants or
conversion or other rights to acquire any shares of capital stock of the Company
or any such securities or obligations, or any other securities thereof, other
than redemption and purchases from departing employees in the Ordinary Course of
Business; (ii) effect any reorganization or recapitalization; or (iii) split,
combine or reclassify any of its capital stock or issue or authorize or propose
the issuance of any other securities in respect of, in lieu of or in
substitution for, shares of its capital stock;

(d)  except upon the exercise of Company stock options in accordance with
their terms, issue, deliver, award, grant or sell, or authorize the issuance,
delivery, award, grant or sale (including the grant of any limitations in voting
rights or other encumbrances) of, any shares of any class of its capital stock
(including shares held in treasury), any securities convertible into or
exercisable or exchangeable for any such shares, or any rights, warrants or
options to acquire, any such shares, or amend or otherwise modify the terms of
any such rights, warrants or options the effect of which shall be to make such
terms more favorable to the holders thereof;

(e)  acquire or agree to acquire, by merging or consolidating with, by
purchasing an equity interest in or a portion of the assets of, or by any other
manner, any business or any corporation, partnership, association or other
business organization or division thereof, or otherwise acquire or agree to
acquire any assets of any other person (other than the purchase of assets from
suppliers or vendors in the Ordinary Course of Business);

(f)  sell, lease, exchange, mortgage, pledge, transfer or otherwise subject
to any encumbrance or dispose of, or agree to sell, lease, exchange, mortgage,
pledge, transfer or otherwise subject to any encumbrance or dispose of, any of
its assets, except for sales, dispositions or transfers in the Ordinary Course
of Business;

(g)  adopt any amendments to its articles or certificate of incorporation,
bylaws or other comparable charter or organizational documents;

(h)  pay, discharge, settle or satisfy any claims, liabilities or obligations
(whether absolute or contingent, matured or unmatured, known or unknown), other
than the payment, discharge or satisfaction, in the Ordinary Course of Business
or in accordance with their terms, of liabilities reflected or reserved against
in, or contemplated by, the most recent financial statement or incurred in the
Ordinary Course of Business, or waive any material benefits of, or agree to
modify in any material respect, any confidentiality, standstill or similar
agreements to which the Company is a party;

(i)  except in the Ordinary Course of Business, waive, release or assign any
rights or claims, or modify, amend or terminate any agreement to which the
Company is a party;

(j)  make any change in any method of accounting or accounting practice or
policy other than those required by generally accepted accounting principles as
applied in the United States or a governmental entity; or

(k)  authorize, or commit or agree to do any of the foregoing.

6.Miscellaneous.

6.1.Entire Agreement; Successors and Assigns.  This Agreement and
the other Transaction Documents constitute the entire contract between the
parties relative to the subject matter hereof and thereof, and no party shall be
liable or bound to the other in any manner by any warranties, representations or
covenants except as specifically set forth herein or therein.  This Agreement
and the other Transaction Documents supersede any previous agreement among the
parties with respect to the Securities.  The terms and conditions of this
Agreement shall inure to the benefit of and be binding upon the respective
executors, administrators, heirs, successors and assigns of the parties.  Except
as expressly provided herein, nothing in this Agreement, expressed or implied,
is intended to confer upon any party, other than the parties hereto, any rights,
remedies, obligations or liabilities under or by reason of this Agreement.

6.2.Survival of Representations and Warranties.  Notwithstanding
any right of the Investors fully to investigate the affairs of the Company and
notwithstanding any knowledge of facts determined or determinable by any
Investor pursuant to such right of investigation, each Investor has the right to
rely fully upon the representations, warranties, covenants and agreements of the
Company contained in this Agreement or in any documents delivered pursuant to
this Agreement.  All such representations and warranties of the Company shall
survive the execution and delivery of this Agreement and the Closing hereunder
and shall continue in full force and effect for one year after the Closing.  The
covenants of the Company set forth in Section 5 shall remain in effect as set
forth therein.

6.3.Governing Law; Jurisdiction.  This Agreement shall be governed
by and construed in accordance with the laws of the State of New York without
regard to principles of conflicts of law.  Each party hereby irrevocably
consents and submits to the jurisdiction of any New York State or United States
Federal Court sitting in the State of New York, County of New York, 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
in Section 6.6 (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.

6.4.Counterparts.  This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

6.5.Headings.  The headings of the sections of this Agreement are
for convenience and shall not by themselves determine the interpretation of this
Agreement.

6.6.Notices.  Any notice required or permitted hereunder shall be
given in writing and shall be deemed effectively given upon personal delivery,
delivery by fax (with answer back confirmed), addressed to a party at its
address or sent to the fax number or e-mail address shown below or at such other
address or fax number as such party may designate by three days advance notice
to the other party.  

Any notice to the Investors shall be sent to the addresses set forth on
the signature pages hereof, with a copy to: 

Hahn & Hessen LLP

       488 Madison Avenue

       New York, New York 10022

       Attention:  James Kardon, Esq.

       Fax Number:  (212) 478-7400

Any notice to the Company shall be sent to:

8X8, Inc.

       2445 Mission College Boulevard

    Santa Clara, California 95054

       Attention:  Chief Executive Officer

       Fax Number:  (408) 980-0432

with a copy to: 

Wilson, Sonsini, Goodrich & Rosati LLP

   650 Page Mill Road

   Palo Alto, California 94304

   Attention:  John T. Sheridan, Esq.

   Fax Number:  (650) 493-6811

6.7.Rights of Transferees.  Any and all rights and obligations of
each of the Investors herein incident to the ownership of Securities or the
Underlying Shares shall pass successively to all subsequent transferees of such
securities until extinguished pursuant to the terms hereof.

6.8.Severability.  Whenever possible, each provision of this
Agreement shall be interpreted in such a manner as to be effective and valid
under applicable law, but if any provision of this Agreement shall be deemed
prohibited or invalid under such applicable law, such provision shall be
ineffective to the extent of such prohibition or invalidity, and such
prohibition or invalidity shall not invalidate the remainder of such provision
or any other provision of this Agreement.

6.9.Expenses.  Irrespective of whether any Closing is effected,
the Company shall pay all costs and expenses that it incurs with respect to the
negotiation, execution, delivery and performance of this Agreement.  Each
Investor shall be responsible for all costs incurred by such Investor in
connection with the negotiation, execution, delivery and performance of this
Agreement including, but not limited to, legal fees and expenses, except that
the Company shall pay at the Closing legal fees and expenses of $25,000 to Hahn
& Hessen LLP (the "Legal Fee"), as counsel to the
Investors.  Hirschman may deduct $25,000 from the purchase price paid to the
Company for his Securities for payment of the Legal Fee.   

6.10.Amendments and Waivers.  Unless a particular provision or
section of this Agreement requires otherwise explicitly in a particular
instance, any provision of this Agreement may be amended and the observance of
any provision of this Agreement may be waived (either generally or in a
particular instance and either retroactively or prospectively), only with the
written consent of the Company and the holders of 75% of the Purchased Shares
(not including for this purpose any Purchased Shares which have been sold to the
public pursuant to a registration statement under the Securities Act or an
exemption therefrom).  Any amendment or waiver effected in accordance with this
Section 6.10 shall be binding upon each holder of any Securities at the time
outstanding (including securities into which such Securities are convertible),
each future holder of all such Securities, and the Company.

[REMAINDER OF PAGE INTENTIONALLY BLANK]

SIGNATURE PAGE

TO

8X8, INC.

SUBSCRIPTION AGREEMENT

Dated July 29, 2003

 

 

IF the PURCHASER is an INDIVIDUAL, please complete the following:

IN WITNESS WHEREOF, the undersigned has executed this Agreement this 29th
day of July, 2003.

 

	
Amount of Subscription:

$ 
	

___________________________________

Print Name

	 	 
	
Number of Units to be Purchased:

, including

__________ Purchased Shares and related Purchased Warrants, subject to
reduction pursuant to the proviso in Section 1.1(b) hereof
	

___________________________________

Signature of Investor

	 	 
	 	

___________________________________

Social Security Number

	 	 
	 	 
	 	
___________________________________

Address and Fax Number

	 	 
	 	 
	 	
___________________________________

E-mail Address

	 	 

ACCEPTED AND AGREED:

8X8, INC.

 

By:

Dated:

SIGNATURE PAGE

TO

8X8, INC.

SUBSCRIPTION AGREEMENT

Dated July 29, 2003 

IF the INTERESTS will be held as JOINT TENANTS, as TENANTS IN COMMON, or
as COMMUNITY PROPERTY, please complete the following:

IN WITNESS WHEREOF, the undersigned has executed this Agreement this 29th
day of July, 2003.

	
Amount of Subscription:

$ 
	
___________________________________

Print Name of Purchaser

	 	 
	
Number of Units to be Purchased:

, including

_____________ Purchased Shares and related Purchased Warrants, subject to
reduction pursuant to the proviso in Section 1.1(b) hereof
	
___________________________________

Signature of a Purchaser

	 	
___________________________________

Social Security Number

	 	
___________________________________

Print Name of Spouse or Other Purchaser

	 	 
	 	
___________________________________

Signature of Spouse or Other Purchaser

	 	
___________________________________

Social Security Number

	 	 
	 	
___________________________________

Address 

	 	 
	 	
___________________________________

	 	
Fax Number

	 	
____________________________________

E-mail Address

ACCEPTED AND AGREED:

8X8, INC.

 

By:

Dated:

SIGNATURE PAGE

TO

8X8, INC.

SUBSCRIPTION AGREEMENT

Dated July 29, 2003 

IF the PURCHASER is a PARTNERSHIP, CORPORATION, LIMITED LIABILITY
COMPANY, TRUST or OTHER ENTITY, please complete the following:

IN WITNESS WHEREOF, the undersigned has executed this Agreement this 29th
day of July, 2003.

	
Number of Units to be Purchased:

, including

_____________ Purchased Shares and related Purchased Warrants, subject to
reduction pursuant to the proviso in Section 1.1(b) hereof
	 
	 	 
	 	
___________________________________

Print Full Legal Name of Partnership,

Company, Limited Liability Company, Trust or Other Entity

	 	 
	 	
By: __________________________________

(Authorized Signatory)

	 	
Name: ________________________________

	 	
Title: _________________________________

	 	
Address and Fax Number: _____________

___________________________________

	 	 
	 	
Taxpayer Identification Number: __________

Date and State of Incorporation or Organization: 

Date on which Taxable Year Ends:

E-mail Address: ________________________

ACCEPTED AND AGREED:

8X8, INC.

By:

Name:_______________________________

Title: ___________________________

Dated: __________________________

Schedule 1.1(b)

INVESTORS

	
Name of Investor 
	
Purchased Shares
	
Purchased Warrants

	
Hershel Berkowitz
	
336,200
	
504,300 (336,200 $.60 Warrants, 84,050 $.75 Warrants, and 84,050 $1.00
Warrants)

	
Orin Hirschman (on 7/29/03)
	
1,240,000
	
1,860,000 (1,240,000 $.60 Warrants, 310,000 $.75 Warrants, and 310,000 $1.00
Warrants)

	
Orin Hirschman (Escrow Shares)
	
293,800
	
440,700 (293,800 $.60 Warrants, 73,450 $.75 Warrants, 73,450 $1.00
Warrants)

	
Paul Packer
	
100,000
	
150,000 (100,000 $.60 Warrants, 25,000 $.75 Warrants, and 25,000 $1.00
Warrants)

	
Richard Grossman
	
100,000
	
150,000 (100,000 $.60 Warrants, 25,000 $.75 Warrants, and 25,000 $1.00
Warrants)

	
Joshua Hirsch
	
50,000
	
75,000 (50,000 $.60 Warrants, 12,500 $.75 Warrants, and 12,500 $1.00
Warrants)

	
James Kardon
	
30,000
	
45,000 (30,000 $.60 Warrants, 7,500 $.75 Warrants, and 7,500 $1.00
Warrants)

	
Bryan Martin
	
40,000
	
60,000 (40,000 $.60 Warrants, 10,000 $.75 Warrants, and 10,000 $1.00
Warrants)

	
Barry Andrews
	
30,000
	
45,000 (30,000 $.60 Warrants, 7,500 $.75 Warrants, and 7,500 $1.00
Warrants)

	
Huw Rees
	
20,000
	
30,000 (20,000 $.60 Warrants, 5,000 $.75 Warrants, and 5,000 $1.00
Warrants)

	
Marc Petit-Hugunein
	
20,000
	
30,000 (20,000 $.60 Warrants, 5,000 $.75 Warrants, and 5,000 $1.00
Warrants)

EXHIBITS AND SCHEDULES

TO THE UNIT SUBSCRIPTION AGREEMENT

Schedule 1.1(b)Investors
Exhibit 1:Form of Warrants

Exhibit 2:Form of Investor Rights Agreement 

Exhibit 3:Form of Financial Advisory Agreement

Exhibit 4:Legal Opinion

Exhibit 5:Company Disclosure Letter

Exhibit 6:Escrow Agreement

 

Exhibit 4

Form of Legal Opinion

The opinion will be subject to standard qualifications
and exceptions, reasonably acceptable to counsel for the Investors.

1.The Company is a corporation duly incorporated and validly existing
under, and by virtue of, the laws of the State of Delaware and is in good
standing under such laws.  The Company has requisite corporate power to own and
operate its properties and assets, and to carry on its business as presently
conducted.

2.Each of Netergy Microelectronics, Inc. and Centile, Inc. is a
corporation duly incorporated and validly existing under, and by virtue of, the
laws of the State of Delaware and is in good standing under such laws.

3.The Company has all requisite legal and corporate power to execute and
deliver the Transaction Documents, to sell and issue the Shares under the
Agreement, to issue the Underlying Shares upon exercise of the Warrants and to
carry out and perform its obligations under the terms of the Transaction
Documents.

4.The authorized capital stock of the Company consists of 100,000,000
shares of Common Stock and 5,000,000 shares of Preferred Stock.    

5.The Shares issued under the Agreement are validly issued, fully paid
and nonassessable and free of any liens, encumbrances and preemptive or similar
rights contained in the Certificate of Incorporation or Bylaws of the Company,
or, to our knowledge, in any written agreement to which the Company is a party,
except as specifically provided in the Agreement; provided, however,
that the Shares may be subject to restrictions on transfer under applicable
state and federal securities laws.  The Underlying Shares issuable upon exercise
of the Warrants have been duly and validly reserved and, when issued in
accordance with the Warrants, will be validly issued, fully paid and
nonassessable; provided, however, that the Underlying Shares may be subject to
restrictions on transfer under applicable state and federal securities laws.

6.All corporate action on the part of the Company, its directors and
shareholders necessary for the authorization, execution and delivery of the
Transaction Documents by the Company, the authorization, sale and issuance of
the Shares, the issuance of the Underlying Shares upon exercise of the Warrants
and the performance by the Company of its obligations under the Transaction
Documents has been taken.  Each of the Transaction Documents has been duly and
validly executed and delivered by the Company and constitutes a valid and
binding obligation of the Company, enforceable against the Company in accordance
with its terms. 

7.The execution and delivery by the Company of the Transaction
Documents, the performance by the Company of its obligations under the
Transaction Documents, and the issuance of the Shares do not violate any
provision of the Certificate of Incorporation or Bylaws, or any provision of any
applicable federal or state law, rule or regulation known to us to be
customarily applicable to transactions of this nature.  The execution and
delivery by the Company of the Transaction Documents, the performance by the
Company of its obligations under the Transaction Documents, and the issuance of
the Shares do not violate, or constitute a default under, any Material Agreement
(as defined in the Closing Certificate).

8.With your consent based solely on a certificate of an officer of the
Company as to factual matters, the Company is not, and immediately after giving
effect to the sale of the Purchased Shares and Warrants in accordance with the
Transaction Documents and the application of the proceeds as described in
Section 2.17 of the Agreement, will not be required to be registered as an
"investment company" within the meaning of the Investment Company Act
of 1940, as amended.

9.Subject to the accuracy of the Investors' representations in Sections 3
and 4 of the Agreement, the issuance of the Shares and the Warrants in
conformity with the terms of the Agreement and the issuance of the Underlying
Shares upon exercise of the Warrants in conformity with the terms of the Warrant
constitute transactions exempt from the registration requirements of
Section 5 of the Securities Act of 1933, as amended.  

This opinion is furnished to the Investors solely for their benefit in
connection with the purchase of the Shares, and may not be relied upon by any
other person or for any other purpose without our prior written consent.  We
assume no obligation to inform you of any facts, circumstances, events or
changes in the law that may arise or be brought to our attention after the date
of this opinion that may alter, affect or modify the opinions expressed
herein.
Very truly yours,

WILSON SONSINI GOODRICH & ROSATI

   Professional Corporation

 

 

 

COMPANY DISCLOSURE LETTER

 

This disclosure of exceptions is made and given pursuant to the 8x8, Inc.
Unit Subscription Agreement, dated as of July 29, 2003 (the
"Agreement"), among 8x8, Inc. (the "Company) and
the persons who execute the Agreement as investors (the
"Investors").  All capitalized terms used but not defined
herein shall have the meanings as defined in the Agreement, unless otherwise
provided.  The section numbers below correspond to the section numbers of the
representations and warranties in the Agreement that are modified by the
disclosures; provided, however, that any information disclosed herein under any
section number shall be deemed to be disclosed and incorporated into any other
section number under the Agreement where such disclosure would be
appropriate.

Nothing in this disclosure of exceptions is intended to broaden the scope of
any representation or warranty contained in the Agreement or to create any
covenant.  Inclusion of any item in this disclosure (1) does not represent
a determination that such item is material or establish a standard of
materiality, (2) does not represent a determination that such item did not
arise in the ordinary course of business, (3) does not represent a
determination that the transactions contemplated by the Agreement require the
consent of third parties, and (4) shall not constitute, or be deemed to be,
an admission to any third party concerning such item.  This disclosure letter
includes brief descriptions or summaries of certain agreements and instruments,
copies of which are available upon reasonable request.  Such descriptions do not
purport to be comprehensive, and are qualified in their entirety by reference to
the text of the documents described.

2.1.Corporate Organization;
Authority; Due Authorization

	Complete and correct list of all Subsidiaries and location of
incorporation:

	8x8 Europe SARL (being formed) - France
	Centile, Inc. - Delaware
	Netergy Microelectronics, Inc. - California
	Netergy Microelectronics Ltd. (this entity has ceased trading activities as
defined by the United Kingdom's Department of Inland Revenue and Companies
House)
	Visit, Inc. - United Kingdom
	Netergy Networks Canada Holding Company - Delaware
	U|Force Holding Company - Delaware
	3044007 Nova Scotia Company - Canada
	Netergy Networks Canada Company - Canada

2.2.Capitalization

There are no outstanding subscriptions, warrants, options,
conversion privileges or other rights or agreements obligating the Company to
purchase or otherwise acquire or issue any shares of capital stock of the
Company (or shares reserved for such purpose), except for the following: 

	Options to purchase common stock of the Company and its subsidiaries,
Netergy Microelectronics, Inc. ("Netergy") and Centile, Inc.
("Centile")  have been issued to employees, consultants and directors
of the Company and these subsidiaries under the stock option plans listed below.
The plans and the number of options outstanding as of June 30, 2003, were as
follows:
	8x8, Inc. 1992 Stock Option Plan - 294,152;
	8x8, Inc. 1996 Stock Option Plan - 4,706,445;
	8x8, Inc. 1996 Director Option Plan - 464,000;
	8x8, Inc. 1999 Nonstatutory Option Plan - 1,485,734;
	Netergy Microelectronics, Inc. 2000 Stock Option Plan - 1,156,684; and
	Centile, Inc. 2001 Stock Option Plan - 1,130,622.

	In December 1999, the Company issued $7.5 million of 4% Series A and Series
B convertible subordinated debentures (the Debentures) due in December 2002.  In
December 2001, the Company redeemed the Debentures for $4.5 million in cash and
1,000,000 shares of common stock. Additionally, the Company agreed to reduce the
exercise price of the Lender Warrants to $0.898 per share.  Under the terms of a
registration rights agreement that the Company and the lenders entered into in
connection with the issuance of the 1,000,000 shares of common stock, the
Company agreed to register the shares for resale and maintain the effectiveness
of the registration statement for specified periods of time until the shares are
resold or can be resold without the registration statement (the Maintenance
Requirements). The Company further agreed that if it does not comply with the
Maintenance Requirements through December 2003, it may be required to pay cash
penalties and redeem all or a portion of the shares held by the lenders at the
higher of $0.898 per share or the market price of the Company's stock at the
time of the redemption. The shares held by the lenders at June 30, 2003 were
recorded at their potential redemption value at June 30, 2003 of $488,000 and
classified as contingently redeemable common stock due to the redemption rights
described above. The Company will not mark the contingently redeemable common
stock to the higher of $0.898 per share or market unless it becomes probable
that the Company will not be able to comply with the Maintenance
Requirements.
	Under the terms of the Common Stock Purchase Agreement and Investor Rights
Agreement between the Company and STMicrolectronics NV ("STM"), STM
has a right of first refusal to purchase such shares to enable it to maintain
its ownership percentage at that time.

2.10.Litigation

The Company has received written notices from Syndia Inc.
(Syndia) alleging that the process used by the Company to manufacture certain of
its semiconductor products may infringe upon U.S. Patent Nos. 4,702,808 and
5,131,941 held by Syndia, and offering the Company the opportunity to purchase a
license regarding such patents.

2.11.Absence of Certain
Changes

On June 20, 2003, Centile, Inc. executed an agreement with Sunleigh
Investments Ltd. (Sunleigh) for Sunleigh to acquire Centile Europe S.A. (Centile
Europe) for 1,100,000 Euros on July 1, 2003. Sunleigh acquired substantially all
the assets and liabilities of the business, and the Company is obligated to pay
certain liabilities incurred by Centile Europe prior to the closing date. In
addition, Sunleigh received a non-exclusive license to Centile's IPBX
technology, and also received exclusivity for the European market for one year
subsequent to the closing date. Correspondingly, Centile Europe granted
exclusivity for the North American market to Centile, Inc. for the same period.
Under the acquisition agreement, Sunleigh is obligated to pay the purchase
price, net of amounts withheld for pre-closing obligations, in installments
through December 31, 2003. The purchase price is subject to adjustment based on
the closing balance sheet of Centile Europe as of July 1, 2003. The Company does
not expect to record a loss on this transaction. Revenues and operating losses
attributable to the operations of Centile Europe approximated $20,000 and
$400,000 for the quarter ended June 30, 2003 and $70,000 and $360,000 for the
quarter ended June 30, 2002, respectively. The Company continues to operate the
Centile business in the United States.

2.12.Proprietary Assets

	A list of all issued patents and patent applications is attached to this
letter as Exhibit A.  A list of all issued and pending trademarks is attached to
this letter as Exhibit B.

	In the normal course of business, the Company enters into software
license agreements with its customers.  Under these agreements, customers are
given the rights to certain source code and/or object code developed by the
Company, but only for use with the Company's semiconductor products, except as
follows: 

	Netergy Microelectronics has licensed certain Voice over Internet Protocol
(VOIP) source code to 2Wire, Inc. (2Wire) and granted 2Wire the right to
incorporate the source code into its products that do not use the Company's
semiconductor products;
	Netergy Microelectronics has licensed certain VOIP source code to
STMicroelectronics Belgium NV (formerly known as Alcatel Microelectronics,
n.v.) and granted STMicroelectronics Belgium the right to
incorporate the source code into STMicroelectronics Belgium's semiconductor
products;
	Netergy Microelectronics has granted a non-exclusive license to ESS
Technology, Inc. (ESS) to the Company's MPEG1 technology, as that technology
existed on December 11, 1995.  No additional royalties are due from ESS related
to this license;
	Netergy Microelectronics has granted non-exclusive licenses to Video Core
Technology, Inc., which was acquired by ESS, to the Company's KS-1 (a derivative
of the VCP semiconductor) technology as it existed prior to August 22, 1995 and
the Company's video conferencing technology as is existed prior to October 4,
1995.  No additional royalties are due from ESS related to this license;
	Netergy Microelectronics has granted a non-exclusive license to the Audacity
T2U technology and Veracity VoIP software source code to Myson Century Company
under a royalty bearing license agreement dated July 16, 2003;
	Netergy Microelectronics has licensed certain Voice over Internet Protocol
(VOIP) source code to Telsey Telecommunications SPA, DS2 Design of Systems on
Silicon SA, LG Communications;
	Netergy Microelectronics has licensed certain VOIP and video source code to
Imagecom Ltd.;
	Centile granted a non-exclusive object code license to the Hosted iPBX
technology to AG Communications Systems in October 2002;
	On October 12, 2002, the Company granted a non-exclusive, non-transferrable
royalty bearing patent license to U.S. Patents 5,790,712, 5,901,248, 5,910,827,
5,966,165, 5,982,459, 6,026,097, 6,061,333,6,075,544, 6,104,836, 6,108,027,
6,121,998, 6,124,882, 6,160,503, 6,163,335, 6,205,177, 6,215,425 and 6,225,923
to Visual Marketing, LLC, a US distributor of analog videophones.

In connection with a source code license agreement, Leadtek, Inc. has been
granted rights to manufacture certain of Netergy Microelectronics' video
semiconductor products for use in the third party's products.

In connection with a development and license agreement, Netergy
Microelectronics granted STMicroelectronics Belgium NV (fka Alcatel
Microelectronics, n.v.) a license to: (i) manufacture or have manufactured the
Company's Audacity T2U semiconductor product (the T2U); and (ii) sell the T2U in
any application that uses an xDSL customer premise modem.

In conjunction with customer purchase agreements, Netergy Microelectronics
and Centile entered into a technology escrow agreement, whereby the companies
agreed to grant manufacturing and/or source code rights to the customer if the
Company ceases to do business or is unable to provide adequate product supply or
support to the customer.

	8x8 currently depends on the services of Level 3 to terminate and originate
Packet8 PSTN voice traffic in the United States.  The company also currently
depends on the services of Nova to process Packet8 credit card transactions.
Netergy Microelectronics currently depends on fabrication services from
STMicroelectronics and TSMC to manufacture semiconductor products.

On July 1, 2003 8x8, Inc. entered into a definitive agreement to sell Centile
Inc.'s European subsidiary, Centile Europe S.A., based in Sophia Antipolis,
France to a British investment company, Sunleigh Investments Ltd. Under terms of
the agreement, Centile Inc. also granted a non-exclusive technology license to
Centile Europe for Centile's hosted iPBX technology. In addition, Centile, Inc.
has granted Centile Europe exclusivity for selling and marketing the hosted iPBX
product in Europe for eighteen months subsequent to the closing, and Centile,
Inc. will have a corresponding exclusivity in the United States for the same
time period. 

2.14.Registration Rights

 

Under the Investor Rights Agreement between the Company and
STMicroeelctronics NV ("STM"), upon request from STM, the Company is
obligated to file a registration statement on Form S-3 to register the 3.7
million shares purchased by STM in 2000.  

Escrow Agreement

 

The following sets forth the terms of the escrow agreement relating to the
closing of the investment in 8x8, Inc. ("8x8" or "the
Company") pursuant to the Unit Subscription Agreement, dated the date
hereof, among 8x8 and the Investors as defined therein (the "Subscription
Agreement").  Capitalized terms not otherwise defined herein have the same
meaning as set forth in the Subscription Agreement.

I.An Investor, Orin Hirschman ("Hirschman"), shall deposit, and
Hahn & Hessen LLP as Escrow Agent will hold, in escrow (the
"Escrow"), an aggregate of $127,509.20 (the "Escrow Cash")
and the following securities: 293,800 shares of Common Stock, 293,800 $.60
Warrants, 73,450 $.75 Warrants, and 73,450 $1.00 Warrants (the "Escrow
Securities", and collectively with the Escrow Cash, the "Escrow
Assets") in accordance with this Escrow Agreement.   The Escrow Cash will
be held in Escrow in a trust account designated by the Escrow Agent.

II.(a)The Escrow Assets shall be held by the Escrow Agent or a third
party (the "Third Party") of its choice until the receipt by the
Escrow Agent of a copy (including a copy by facsimile transmission) of a waiver
of the Preemptive Rights or receipt of notice from the Company that the
Preemptive Rights have expired unexercised (the "Condition"), at which
time the Escrow Agent shall cause the Escrow Cash, without interest thereon, to
be disbursed to 8x8 and shall cause the Escrow Securities to be delivered to
Hirschman.  Any accrued interest shall be paid in such event to Hirschman.  

(b)In the event STM exercises the Preemptive Right (the "STM
Exercise"), the Company shall give notice thereof to Hirschman and the
Escrow Agent, and, upon receipt of such notice, the Escrow Agent shall cause the
Escrow Cash, with any interest accrued thereon, to be disbursed to Hirschman and
shall cause the Escrow Securities to be returned for cancellation to 8x8.
Hirschman's signature to this Escrow Agreement constitutes authorization of such
cancellation. 

(c)If the Escrow Agent has not received notice that the Condition has
been satisfied or notice of the STM Exercise by the 25th calendar day following
the deposit of the Escrow Assets into the Escrow, the Escrow Agent shall cause
the Escrow Cash, without interest thereon, to be disbursed to 8x8 and shall
cause the Escrow Securities to be delivered to Hirschman, unless the parties
agree in writing to an extension.

III.The Escrow Agent may rely on written or email communications from
Hirschman and the Company in determining whether the Condition has been met.

IV.The Escrow Cash shall be wired to the following account:

The Bank of New York

   350 Fifth Avenue

   New York, NY 10118

   Attention: Anthony Baker

ABA Number:021000018

   Account Name:Hahn & Hessen LLP Special Account

   Account Number:105-0035227

V.The escrow set up pursuant to this communication shall be subject to
the standard terms of escrow set forth on Exhibit A hereto.

IN WITNESS WHEREOF, the undersigned have executed this Escrow Agreement
as of the day and year first above written.

Hirschman:

 

__________________________________

Orin Hirschman

 

8x8, Inc.

 

By:_______________________________

Name:

Title:

 

Escrow Agent:

 

Hahn & Hessen LLP

 

By:_______________________________

A Member of the Firm

 

 

EXHIBIT A

1.Representations and Warranties.  (a)  Hirschman represents
and warrants that Hirschman is not in conflict with, or in default or violation
of, (i) any law, rule, regulation, order, judgment or decree applicable to
Hirschman, or (ii) any note, bond, mortgage, indenture, contract, agreement,
lease, license, permit, franchise or other instrument or obligation to which
Hirschman is a party or by which Hirschman is bound or affected, in each case
only to the extent that any such conflicts, defaults or violations relate
directly or indirectly to the deposit and disposition of the Escrow Assets under
this Escrow Agreement.  

(b)The Company represents and warrants that it is not in conflict
with, or in default or violation of, (i) any law, rule, regulation, order,
judgment or decree applicable to the Company, or (ii) any note, bond, mortgage,
indenture, contract, agreement, lease, license, permit, franchise or other
instrument or obligation to which the Company is a party or by which the Company
is bound or affected, in each case only to the extent that any such conflicts,
defaults or violations relate directly or indirectly to the deposit and
disposition of the Escrow Assets under this Escrow Agreement.  

2.Duties of the Escrow Agent.  It is understood and agreed
that the duties of the Escrow Agent are purely ministerial in nature.  It is
further agreed that:

(a)The Escrow Agent shall not be responsible or liable for the
performance of Hirschman or the Company under this Escrow Agreement or any other
agreement, or for the completeness, accuracy or correctness of any document or
transaction between the Company and the Company.  The Escrow Agent shall have no
obligation to take any legal action in connection with this Escrow Agreement or
towards its enforcement or performance or to appear in, prosecute or defend any
action or legal proceeding in connection herewith.

(b)The Escrow Agent may conclusively rely upon and shall be
protected in acting or refraining from acting upon any written notice, document,
instrument, certificate, instruction or signature believed by it to be genuine
and may assume and shall be protected in assuming that any person purporting to
give any notice or instructions in accordance with this Escrow Agreement or in
connection with any transaction to which this Escrow Agreement relates has been
duly authorized to do so.  The Escrow Agent shall not be obligated to make any
inquiry as to the truth of the information in any such notice, document,
instrument, certificate, or instruction or as to the authority, capacity,
existence or identity of any person purporting to have executed any such notice,
document, instrument, certificate, or instruction or to have made any such
signature or purporting to give any such notice or instructions.  The Escrow
Agent shall be entitled to any and all proofs with respect to any and all facts
and to any and all acknowledgements and indemnification it desires before paying
out all or any portion of the Escrow.

(c)In the event that the Escrow Agent shall be uncertain as to
its duties or rights hereunder or shall receive instructions with respect to the
Escrow which, in its sole opinion, are in conflict with either other
instructions received by it or any provision of the Escrow Agreement, it shall,
without liability of any kind, be entitled to hold the Escrow pending the
resolution of such uncertainty to the Escrow Agent's sole satisfaction, by final
judgment of a court or courts of competent jurisdiction or otherwise, or the
Escrow Agent, at its option, may, in final satisfaction of its duties hereunder,
deposit the Escrow with the Clerk of the United States District Court for the
Southern District of New York or with the office of the clerk of the registry of
any other court of competent jurisdiction.

(d)The Escrow Agent undertakes to perform only such duties as are
expressly set forth herein and shall not be bound in any way by any other
agreement (whether or not the Escrow Agent has knowledge thereof).  

(e)The Escrow Agent shall not be liable for any error of
judgment, mistake of law or fact, or for any action taken or omitted to be taken
by it in good faith and believed by it to be authorized or within the rights or
powers conferred upon it by this Escrow Agreement. The Escrow Agent may, without
notification to or approval of the Company or Hirschman, consult with counsel of
its own choice (including any member of its firm) and shall have full and
complete authorization and protection for any action taken or suffered by it
hereunder in accordance with the opinion of such counsel.

(f)The participation of Hahn & Hessen LLP as Escrow Agent is
being undertaken as an accommodation to the parties hereto, and shall in no way
hinder or limit the present or future ability of Hahn & Hessen LLP to act as
counsel to any party or any of their affiliates with respect to any matter
including, but not limited to, disputes between and/or among any of the Company
and Hirschman with regard to this Escrow Agreement or otherwise.  Without
limitation on the foregoing, the parties (i) recognize that Hahn & Hessen
LLP represents Hirschman in this and other matters and may continue to do so,
and (ii) waive any conflicts that may arise from such representation.

3.Indemnification. Hirschman and the Company jointly and
severally agree to indemnify the Escrow Agent, its members, agents and employees
(collectively the "Indemnified Parties") against, and hold them harmless from,
any and all loss, liability, cost, damage and expense, including, without
limitation, costs of investigation and counsel fees and expenses which any of
the Indemnified Parties may suffer or incur by reason of any action, claim or
proceeding brought against any of the Indemnified Parties, arising out of or
relating in any way to this Escrow Agreement, any breach of any representations,
warranties or covenants set forth in this Escrow Agreement, or any transaction
to which this Escrow Agreement relates, other than any action, claim or
proceeding resulting from the bad faith of such Indemnified Party.  The
provisions of this paragraph shall survive the termination of this Escrow
Agreement.

4.Fees and Expenses.  Hirschman agrees to pay any and all
fees, costs, expenses and charges of the Escrow Agent, plus fees and expenses of
retained attorneys or amounts representing the fair value of legal services
rendered by the Escrow Agent to itself, which may be incurred by the Escrow
Agent as a result of or in connection with its administration of the provisions
of this Escrow Agreement, to the extent the same exceeds the amount of interest
paid to the Escrow Agent pursuant to Section 3.  Payment for such charges shall
be made upon demand. Hirschman and the Company further agree that the Escrow
Agent shall have a lien on the assets of the Escrow solely for payment of its
fees and expenses from the assets of the Escrow if they are not otherwise paid
and without judicial action to foreclose such lien.  Any outstanding fees and
expenses which are not paid within sixty (60) days of the invoice date will be
deducted proportionately from balances in the account owing to Hirschman.

5.Amendment; Resignation; Termination.  Upon final
disbursement of the Escrow Assets or any part remaining thereof, this Escrow
Agreement shall terminate and the Escrow Agent shall be discharged from any and
all liability with respect to the Escrow Assets or arising from its execution or
performance of the Escrow Agreement, and the Company and Hirschman, upon the
request of the Escrow Agent, shall deliver to the Escrow Agent a written release
in form and content reasonably satisfactory to the Escrow Agent. This Escrow
Agreement may be altered, amended or terminated other than as set forth in the
preceding sentence only with the written consent of the Company and Hirschman
and the Escrow Agent.  Should the Company and Hirschman attempt to change this
Escrow Agreement in a manner which, in the Escrow Agent's sole opinion, is
undesirable, the Escrow Agent may resign as Escrow Agent, without any liability
to the Company and Hirschman, upon two weeks' written notice to the Company and
Hirschman; otherwise, notwithstanding any provision hereof to the contrary, it
may resign as Escrow Agent without any liability to Hirschman or the Company at
any time upon 30 days' written notice to the Company and Hirschman.  In the case
of the Escrow Agent's resignation, its only duty shall be to hold and dispose of
the Escrow in accordance with the original provisions of this Escrow Agreement
until a successor Escrow Agent shall be appointed by the Company and Hirschman
and a written notice of the name and address of such successor escrow agent
shall be given to the Escrow Agent by the Company and Hirschman, whereupon the
Escrow Agent's only duty shall be to turn over to the successor escrow agent the
Escrow, in accordance with the written instructions of the Company and
Hirschman.  In the event that a successor escrow agent shall not have been
appointed and the Escrow Agent shall not have turned over to the successor
escrow agent the Escrow within the time periods specified above, the Escrow
Agent may deposit the Escrow with the Clerk of the United States District Court
for the Southern District of New York or with the clerk or registry of any other
court of competent jurisdiction, at which time the Escrow Agent's duties
hereunder shall terminate.  Provided the Escrow Agent shall have acted in good
faith, and upon the execution and delivery by the Escrow Agent of any documents
necessary to substitute a successor escrow agent as the holder of the Escrow or
to deposit the Escrow with the clerk of a court, the Escrow Agent shall, upon
its resignation, receive a written release from the Company and Hirschman and
successor escrow agent (if applicable), in form and content reasonably
satisfactory to the Escrow Agent.

6.Governing Law.  This Escrow Agreement shall be construed in
accordance with and governed by the laws of the State of New York without
application of the principles of conflicts of laws.

7.Notices.  All notices, requests, demands and other
communications to be given in connection with this Escrow Agreement shall be in
writing, shall be delivered by hand or overnight courier service, shall be
deemed given when received and shall be addressed to the parties at the
respective addresses listed below or to such other addresses as they shall
designate from time to time in writing, forwarded in like manner.

If to the Escrow Agent:

Hahn & Hessen LLP

       488 Madison Avenue 14th Floor

       New York, NY 10022

       Attention:  James Kardon

       Telephone No. (212) 478-7250

           Fax  (212) 478-7400

If to Hirschman:

Orin Hirschman

    1231 East 10th Street

       Brooklyn, New York 11230 

    Fax: 718-751-2892

with a copy to:

Hahn & Hessen LLP

       488 Madison Avenue  37th Floor

       New York, New York 10022

       Attention:  James Kardon, Esq.

       Fax: (212) 478-7400

If to the Company:

8X8, Inc.

   2445 Mission College Boulevard

   Santa Clara, California 95054

   Attention: Chief Executive Officer

   Fax number:  (408) 980-0432

with a copy to:

Wilson Sonsini Goodrich & Rosati

   650 Page Mill Road

Palo Alto, California 94304

   Attention:  John T. Sheridan, Esq.

   Fax number: (650) 493-6811 

8.Severability.  If any provision of this Escrow Agreement or
the application thereof to any person or circumstance shall be determined to be
invalid or unenforceable, the remaining provisions of this Escrow Agreement or
the application of such provision to persons or circumstances other than those
to which it is held invalid or unenforceable shall not be affected thereby and
shall be valid and enforceable to the fullest extent permitted by law.

9.Counterparts.  This Escrow Agreement may be executed in
several counterparts or by separate instruments, and all of such counterparts or
instruments shall constitute one agreement, binding on all the parties
hereto.

10.Construction.  All pronouns and any variations thereof
shall be deemed to refer to the masculine, feminine, neuter, singular or plural
as the context may require.  The headings in this Agreement are for convenience
of reference only and shall not define or limit the provisions thereof.

11.Entire Agreement.  This Escrow Agreement constitutes the
entire agreement between the parties hereto with respect to the subject matter
hereof and supersedes all prior agreements and understandings (written or oral)
of the parties in connection herewith.

12.Successors, etc.  This Agreement shall inure to the benefit
and be binding upon the heirs, successors, distributees and assigns of the
parties; provided, however, that any assignment or transfer by any party of its
rights under this Escrow Agreement or with respect to the Escrow shall be void
as against the Escrow Agent unless written notice thereof shall be given to the
Escrow Agent.

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