Document:

Unassociated Document

    EXHIBIT
      10.2

    

    

    AMENDMENT
      TO PURCHASE AGREEMENT

     

    

     

    This
      Amendment to Purchase Agreement (this
      “Amendment”) is made and entered into July 31, 2006, by and between Daniel K.
      Donkel and Samuel H. Cade (hereinafter collectively referred to as “Sellers”),
      whose address is c/o Daniel K. Donkel, 1420 N. Atlantic Avenue, Suite 1201,
      Daytona Beach, FL 32118 and True North Energy Corp. (hereinafter called
“Buyer”), whose address is 1200 Smith Street, 16th
      Floor,
      Houston, TX 77002. Capitalized terms used and not otherwise defined herein
      shall
      have the meanings assigned to such terms in the Purchase Agreement

     

    

    WITNESSETH:

    

    WHEREAS,
      the
      parties hereto are parties to that certain Purchase Agreement dated as of May
      9,
      2006 (the “Purchase Agreement”) and desire to amend certain terms thereof as
      provided for herein.

     

    

     

    NOW,
      THEREFORE,
      in
      consideration of these premises, the mutual agreements and covenants hereinafter
      set forth, and for other good and valuable consideration, the receipt and
      sufficiency of which are hereby acknowledged, the parties hereby agree
      as:

    

     

    1. Article
      3 of the Purchase Agreement is hereby amended to read in its entirety as
      follows:

    

    “3.
      Due
      Diligence:
      On or
      before five (5) days following the full execution of this Agreement by Sellers,
      but not later than May 16, 2006 (the "Notice
      Date"),
      Buyer
      shall have performed all due diligence work in a form and manner reasonably
      acceptable to Buyer pertaining to the Leases. Buyer agrees that the non-issuance
      of the Un-Issued Leases shall not be considered a title defect for purposes
      of
      this provision. If such due diligence work or any other information or data
      shall reflect the existence of encumbrances, encroachments, defects in or
      objections to title which Buyer does not waive (all of which are herein called
      "Title
      Defects"),
      written notice of the title defects shall be given to Sellers on or before
      the
      Notice Date. If Title Defects shall be so specified, Sellers shall have the
      optional right, but not the obligation, to advise Buyer in writing on or before
      five (5) days following the Notice Date, as to which of the Title Defects,
      if
      any, that Sellers are willing to use reasonable efforts to cure (the
"Approved
      Title Defects").
      Buyer
      shall then have the optional right to either (i) terminate this Agreement
      without further liability of either party to the other by providing written
      notice to Sellers to that effect on or before the Notice Date, or (ii) elect
      to
      close this transaction based upon Sellers’ reasonable efforts to cure the
      Approved Title Defects, or (iii) extend the Closing upon the mutual agreement
      of
      Sellers and Buyer which in no event shall be beyond December 31, 2006. Failure
      of Buyer to timely notify Sellers with regard to terminating this Agreement
      as
      provided in this paragraph shall be deemed an election of option (ii)
      above.”

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    2. Article
      8
      of the Purchase Agreement is hereby amended to read in its entirety as
      follows:

    

    “8.
      Closing:
      Unless
      extended pursuant to the terms of this Agreement, the closing of this
      transaction (the “Closing”)
      shall
      be held within three (3) business days after receipt by Sellers of the Award
      Notice with respect to the Leases from the Alaska Department of Natural
      Resources. Notwithstanding the foregoing or any other provision herein, if
      this
      Agreement is not fully executed by all signatory parties hereto and if Closing
      does not occur by the close of business on or before December 31, 2006,
      Anchorage, Alaska time, this Agreement shall be null and void and the Buyer
      and
      Sellers shall have no further rights or obligations hereunder.”

    

    3. Article
      9
      of the Purchase Agreement is hereby amended to read in its entirety as
      follows:

    

    “9.
      Deposit
      of Purchase Price.
      Within
      seven (7) days from the execution of this Agreement by all parties, the Buyer
      shall deliver the Purchase Price and an additional $10,240.00 (being an
      aggregate amount of $286,720.00) by wire transfer in immediately available
      funds
      to an escrow account established by the accounting firm of Ryan, Gunsauls &
O’Donnell (the “Escrow
      Agent”)
      exclusively for this transaction. If the foregoing amount is not received by
      the
      Escrow Agent within the seven (7) day period, this Agreement shall be null
      and
      void and the Buyer and Sellers shall have no further rights or obligations
      hereunder. The wire transfer instructions are as follows:

    

    Citywide
      Bank

    ABA
      # 107
      001 070

    For
      credit to Ryan Gunsauls & O’Donnell, P.C.

    Account
      #
      211 008 790

    

    The
      foregoing funds shall not be disbursed by the Escrow Agent until Closing and
      then only in accordance with the provisions set forth in Section 11 below.
      However, if the Closing does not occur on or before December 31, 2006, the
      Escrow Agent shall release and return all monies held in the escrow account
      to
      the Buyer.”

    

     

    4. This
      Amendment may be executed by facsimile and in counterparts, each of which shall
      constitute an original and together shall constitute one and the same
      document.

     

    5. Except
      as
      expressly amended hereby, all provisions of the Purchase Agreement shall remain
      in full force and effect.

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, the parties hereto have executed and delivered this Amendment
      as of the date first written above.

     

    
      
        	 	 	 
	 	SELLERS
	 
 	 
 	 
 
	 	 	/s/ Daniel
                K.
                Donkel
	 	
                

                DANIEL
                  K. DONKEL

              

      

      
        	 	 	 
	 	 	/s/ Samuel
                H.
                Cade
	 	
                
SAMUEL
                H. CADE

      

    

     

    
      
        	 	 	 
	 	BUYER
	 	 
	 	TRUE NORTH ENERGY
                CORP.
	 
 	 
 	 
 
	 	By:  	/s/ Massimiliano
                Pozzoni
	 	
                
Massimiliano
                Pozzoni,
                Secretary

      

       

    

    ESCROW
      AGENT AGREES TO THE 

    TERMS
      SET
      FORTH IN SECTION 3

    OF
      THE
      FOREGOING AGREEMENT:

    

    RYAN
      GUNSAULS & O’DONNELL

    

    

    By
/s/
      Douglas BarrEXECUTION
      COPY

    

    PREFERRED
      STOCK PURCHASE AGREEMENT

     

    PREFERRED
      STOCK PURCHASE AGREEMENT (this
      “Agreement”),
      dated
      as of July 28, 2006, by and between Airspan Networks, Inc., a Washington
      corporation (the “Company”),
      and
      Oak Investment Partners XI, Limited Partnership, a Delaware Limited Partnership
      (the “Purchaser”).

     

    RECITALS:

     

    A. WHEREAS,
      the
      Purchaser desires to transfer all shares of the Company’s Series A Preferred
      Stock, par value US$0.0001 per share (the “Series
      A Preferred Stock”)
      held
      by the Purchaser to the Company, and to pay an additional US$29,000,000 in
      cash
      to the Company, in exchange for up to 200,690 shares of a newly designated
      class
      of the Company’s preferred stock, par value U.S.$0.0001 per share, entitled
      Series B Preferred Stock (the “Series
      B Preferred Stock”);
      

     

    AGREEMENT:

     

    In
      consideration of the foregoing premises and the mutual covenants contained
      herein, the sufficiency of which is hereby acknowledged, the parties hereby
      agree as follows:

     

    SECTION
      1. PURCHASE AND SALE OF PREFERRED STOCK

     

    1.1 Purchase
      and Sale.

     

    (a) Purchase
      and Sale.
      Subject
      to the terms and conditions hereof, including the conditions set forth in
      Sections 5, 6 and 7, (i) the Purchaser shall transfer to the Company all shares
      of Series A Preferred Stock owned by Purchaser as of the Closing Date (as
      defined below) and the Company will issue 1.3793150684931 shares of Series
      B
      Preferred Stock to the Purchaser for each share of Series A Preferred Stock
      so
      transferred (accordingly, if on the Closing Date the Purchaser transfers 73,000
      shares of Series A Preferred Stock, the Company will issue 100,690 shares of
      Series B Preferred Stock in exchange therefor), and (ii) the Purchaser shall
      pay
      Twenty Nine Million Dollars (US$29,000,000) (collectively, the “Purchase
      Price”)
      to the
      Company, and the Company shall issue and sell to the Purchaser, at two hundred
      ninety dollars (US$290.00) per share, 100,000 shares of Series B Preferred
      Stock
      (the up to 200,690 shares of Series B Preferred Stock issued pursuant hereto
      are
      referred to as the “Offered
      Securities”).

     

    (b) Time
      and Place of Closing.
      The
      closing of the purchase and sale of the Offered Securities (the “Closing”) shall
      be held at the offices of Hunton & Williams, 1111 Brickell Avenue,
      25th
      Floor,
      Miami, FL 33131 (by means of facsimile or overnight mail). On the first business
      day after the conditions set forth in Sections 5, 6 and 7 (other than those
      to
      be satisfied on the Closing Date, which shall be satisfied or waived on such
      date) have been satisfied or waived by the party entitled to waive such
      conditions or such later date and time as the parties may agree in writing
      (the
“Closing
      Date”),
      (A)
      the Purchaser shall (x) deliver to the Company by wire transfer in immediately
      available funds to an account or accounts designated in writing by the Company
      to the Purchaser at least one business day prior to the Closing Date, funds
      in
      the amount of US$29,000,000 and (y) make or cause to be made the deliveries
      set
      forth in Section 7 and (B) the Company shall (x) issue and deliver to the
      Purchaser all of the shares of the Series B Preferred Stock registered in the
      name of the Purchaser and (y) make or cause to be made the deliveries set forth
      in Section 6.

     

    
      
        
        

      

      
        
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            PREFERRED
              STOCK PURCHASE AGREEMENT

          

        

        
          

        

      

      
        
        

      

    

     

    SECTION
      2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
      The
      Company represents and warrants as of the date hereof to Purchaser
      that:

     

    2.1 The
      Company has been duly incorporated and is an existing corporation in good
      standing under the laws of the State of Washington, with requisite corporate
      power and authority to own its properties and conduct its business as presently
      conducted. The Company is duly qualified to do business as a foreign corporation
      in good standing in all other U.S. jurisdictions in which its ownership or
      lease
      of property or the conduct of its business requires such qualification, except
      where the failure to be so qualified would not have a material adverse effect
      on
      (x) the condition (financial or other), business, properties or results of
      operations of the Company and its subsidiaries, taken as a whole, or (y) the
      ability of the Company to complete the transactions contemplated hereby
      (hereinafter, a “Material
      Adverse Effect”).
      The
      Company has furnished representatives of the Purchaser with correct and complete
      copies of the Articles of Incorporation (the “Articles
      of Incorporation”)
      and
      Bylaws (“Bylaws”)
      of the
      Company, both as amended and currently in effect.

     

    2.2 Each
      subsidiary of the Company has been duly incorporated and is an existing
      corporation in good standing under the laws of the jurisdiction of its
      incorporation, with corporate power and authority to own its properties and
      conduct its business as presently conducted. Each subsidiary of the Company
      is
      duly qualified to do business as a foreign corporation in good standing in
      all
      other U.S. jurisdictions in which its ownership or lease of property or the
      conduct of its business requires such qualification, except where the failure
      to
      be so qualified would not have a Material Adverse Effect. All of the issued
      and
      outstanding capital stock of each subsidiary of the Company has been duly
      authorized and validly issued and is fully paid and nonassessable and is owned
      of record by the Company.

     

    2.3 As
      of the
      date hereof, the authorized capital stock of the Company consists of:
      (i) 100,000,000 shares of Common Stock and (ii) five million
      (5,000,000) shares of Preferred Stock. As of July 24, 2006,
      39,927,492 shares
      of
      Common Stock have been issued and are outstanding, 138,250 shares of Restricted
      Stock have been issued and are outstanding and 73,000 shares of Series A
      Preferred Stock are issued and outstanding. As of July 24, 2006, other than
      with
      respect to an aggregate of 9,532,800 shares of Common Stock reserved for
      issuance under the Company’s equity incentive plans and 7,300,000 shares of
      Common Stock reserved for issuance upon conversion of the Series A Preferred
      Stock, there are no outstanding options, warrants, rights (including conversion
      or preemptive rights and rights of first refusal), proxy or shareholder
      agreements, or agreements of any kind for the purchase or acquisition from
      the
      Company of any of its equity securities. As of the Closing Date, there will
      be
      250,000 shares of Series B Preferred Stock reserved for issuance and a
      sufficient number of authorized but unissued shares of Common Stock reserved
      for
      issuance upon the conversion of the Series B Preferred Stock. Provided that
      the
      Purchaser complies with Section 4.8 below, immediately upon the Closing, there
      will be no shares of Series A Preferred Stock outstanding.

     

    
      
        
        

      

      
        
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            PREFERRED
              STOCK PURCHASE AGREEMENT

          

        

        
          

        

      

      
        
        

      

       

    

    2.4 The
      Offered Securities, and the shares of Common Stock issuable upon conversion
      of
      the Offered Securities (the “Conversion
      Shares”),
      and
      all outstanding shares of capital stock of the Company have been duly
      authorized. All outstanding shares of capital stock of the Company have been
      validly issued and are fully paid and nonassessable. When the Offered Securities
      have been delivered and paid for in accordance with this Agreement on the
      Closing Date, and, when the Conversion Shares have been delivered in accordance
      with the terms of the Articles of Amendment to the Articles of Incorporation
      to
      be filed pursuant to this Agreement with the Secretary of State of the State
      of
      Washington setting forth the preferences and privileges of the Series B
      Preferred Stock (the “Articles
      of Amendment”),
      such
      Offered Securities and Conversion Shares will have been, validly issued, fully
      paid and nonassessable. None of the Offered Securities or Conversion Shares
      are
      subject to any preemptive right or any right of refusal. The Company does not
      believe that the
      right
      of the holders of at least a majority of the outstanding shares Series A
      Preferred Stock to approve the issuance of the Offered Securities constitutes
      a
      preemptive right or a right of first refusal.

     

    2.5 Subject
      in part to the accuracy of the Purchaser’s representations herein, no consent,
      waiver, approval, authorization, or order of, or registration, declaration
      or
      filing with, any governmental agency or body, any court or any
      quasi-governmental or private body exercising any regulatory, taxing, importing
      or other governmental or quasi-governmental authority (a “Governmental
      Entity”)
      is
      required for the consummation of the transactions contemplated by this
      Agreement, except for (i) the filing of a Form D with the Securities and
      Exchange Commission (the “SEC”)
      under
      the Securities Act of 1933, as amended (the “Securities
      Act”),
      and
      such as may be required under state securities law, (ii) the provision of the
      Articles of Amendment with the Secretary of State of the State of Washington,
      (iii) the filing of the Proxy Statement (as defined in Section 4.5(a)) with
      the
      SEC in accordance with the Securities Exchange Act of 1934, as amended (the
      “Exchange
      Act”),
      (iv)
      the approval from the NASDAQ Global Market (the “NASDAQ”)
      for
      the listing of the Conversion Shares for trading thereon, and (v) the filing
      of
      the Notification and Report Forms with the United States Federal Trade
      Commission and the Antitrust Division of the United States Department of Justice
      required by the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended
      (the “HSR
      Act”)
      and
      the expiration or termination of the applicable waiting period under the HSR
      Act
      (collectively, the “Required
      Regulatory Approvals”).

     

    2.6 This
      Agreement has been duly authorized, executed and delivered by the Company.
      All
      corporate action on the part of the Company and its shareholders, directors
      and
      officers necessary for the authorization, execution and delivery of this
      Agreement, the execution and filing of the Articles of Amendment, the issuance
      of the Offered Securities and the Conversion Shares, the consummation of the
      other transactions contemplated hereby and the Articles of Amendment and the
      performance of all the Company’s obligations hereunder and under the Articles of
      Amendment has been taken or will be taken prior to the Closing. This Agreement
      constitutes the legal, valid and binding obligation of the Company, enforceable
      against the Company in accordance with its terms, subject to (i) laws of general
      application relating to bankruptcy, insolvency and the relief of debtors, (ii)
      rules of law governing specific performance, injunctive relief and other
      equitable remedies, and (iii) the limitations imposed by applicable federal
      or state securities laws on the indemnification provisions contained in this
      Agreement. 

     

    
      
        
        

      

      
        
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            PREFERRED
              STOCK PURCHASE AGREEMENT

          

        

        
          

        

      

      
        
        

      

       

    

    2.7 The
      Board
      of Directors (the “Board
      of Directors”)
      has
      determined this Agreement and the transactions contemplated hereby to be
      advisable and in the best interests of the Company and its shareholders and
      has
      approved such transactions. The transactions contemplated hereby have been
      approved for purposes of Section 23.B.19.040(1) of the Washington Business
      Corporation Act. The affirmative vote of the holders of a majority of the
      outstanding shares of the Series A Preferred Stock is required under the
      Company’s Articles of Incorporation to approve the issuance of the Series B
      Preferred Stock and the affirmative vote of the holders of a majority of the
      total votes cast in person or by proxy at the Shareholders Meeting (as defined
      in Section 4.5(c)) is required under the rules of NASDAQ to approve the issuance
      of the Series B Preferred Stock. In
      addition, the Board of Directors has determined that it is advisable to seek
      the
      affirmative vote of the holders of a majority of the total votes cast in person
      or by proxy at the Shareholders Meeting excluding votes cast by the Purchaser
      and its Affiliates in accordance with prevailing concepts of statutory and/or
      common law
      (collectively,
      the “Required
      Vote”).
      Except for the Required Vote, no approval of this Agreement, the Articles of
      Amendment or the transactions contemplated by this Agreement by the holders
      of
      any shares of stock of the Company is required in connection with the execution,
      delivery or performance of this Agreement or the Articles of Amendment or the
      consummation of the transactions contemplated by this Agreement, whether
      pursuant to the Washington Business Corporation Act, the Articles of
      Incorporation or Bylaws, the rules and regulations of the NASD, NASDAQ or
      otherwise.

     

    2.8 Assuming
      that the Required Regulatory Approvals and the Required Vote are obtained,
      the
      execution, delivery and performance of this Agreement and the transactions
      contemplated hereby will not result in a breach or violation of (i) any of
      the
      terms and provisions of the Articles of Incorporation or Bylaws of the Company
      or any of its subsidiaries, nor (ii) any of the terms and provisions of, or
      constitute a default under any statute, rule, regulation or order of any
      Governmental Entity, or any agreement or instrument to which the Company or
      any
      such subsidiary is a party or by which the Company or any such subsidiary is
      bound or to which any of the properties of the Company or any such subsidiary
      is
      subject (except where such breaches, violations or defaults individually or
      in
      the aggregate would not have a Material Adverse Effect). 

     

    2.9 There
      have been no investment bankers, brokers or finders used by the Company or
      any
      affiliate (as defined in Rule 501(b) of Regulation D under the Securities Act)
      (an “Affiliate”)
      of the
      Company in connection with the transactions contemplated by this Agreement
      and
      no persons or entities are entitled to a fee or compensation from the Company
      or
      its subsidiaries in respect thereof.

     

    
      
        
        

      

      
        
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            PREFERRED
              STOCK PURCHASE AGREEMENT

          

        

        
          

        

      

      
        
        

      

       

    

    2.10 Except
      for liens or encumbrances created in connection with any Permitted Loan
      Financing (as such term is defined in Section 4.7(i)), the Company and its
      subsidiaries have good and marketable title to all real properties and all
      other
      properties and assets owned by them that are material to the operation of the
      Company’s business, in each case free from liens, encumbrances and defects that
      would materially affect the value thereof or materially interfere with the
      use
      made or to be made thereof by them. The Company and its subsidiaries hold any
      leased, real or personal property that is material to the operation of the
      Company’s business under a valid and enforceable lease with no exceptions that
      would materially interfere with the use made or to be made thereof by
      them.

     

    2.11 The
      Company and its subsidiaries possess adequate certificates, authorities or
      permits issued by appropriate Governmental Entities necessary to conduct the
      business now operated by them and have not received any notice of proceedings
      relating to the revocation or modification of any such certificate, authority
      or
      permit that, if determined adversely to the Company or any of its subsidiaries,
      would individually or in the aggregate have a Material Adverse
      Effect.

     

    2.12 With
      the
      exception of the litigation described in the Company’s SEC Documents (defined
      below), as of the date hereof, there are no pending actions, suits or
      proceedings against or affecting the Company, any of its subsidiaries or any
      of
      their respective properties or any director, officer or employee (related to
      any
      such person’s services as a director, officer or employee of the Company) that,
      if determined adversely to the Company or any of its subsidiaries, would
      individually or in the aggregate have a Material Adverse Effect, or would
      materially and adversely affect the ability of the Company to perform its
      obligations under this Agreement, and, to the Company’s knowledge, no such
      actions, suits or proceedings are threatened or contemplated. As of the date
      hereof, the Company has not initiated and has no plan to initiate any action,
      suit or proceeding that, if decided adversely to the Company, would,
      individually or in the aggregate, result in a Material Adverse
      Effect.

     

    2.13 The
      Company has made available to representatives of the Purchaser all registration
      statements, proxy statements and other statements, reports, schedules, forms
      and
      other documents filed by the Company with SEC since January 1, 2006, including
      copies of all the exhibits referenced therein (the “SEC
      Documents”).
      All
      statements, reports, schedules, forms and other documents required to have
      been
      filed by the Company with the SEC since January 1, 2006 have been so filed.
      As
      of their respective dates (or, if amended or superseded by a filing prior to
      the
      date of this Agreement, then on the date of such amendment or superseding
      filing): (i) each of the SEC Documents complied in all material respects with
      the applicable requirements of the Securities Act or the Exchange Act, as the
      case may be; and (ii) none of the SEC Documents contained any untrue statement
      of a material fact or omitted to state a material fact required to be stated
      therein or necessary in order to make the statements therein, in the light
      of
      the circumstances under which they were made, not misleading.

     

    2.14 The
      financial statements included in the SEC Documents present fairly the financial
      position of the Company and its consolidated subsidiaries as of the dates shown
      and their results of operations and cash flows for the periods shown, and such
      financial statements have been prepared in conformity with the generally
      accepted accounting principles in the United States applied on a consistent
      basis (except as may be indicated in the notes to such financial statements
      or,
      in the case of unaudited statements, as permitted by Form 10-Q and Form 8-K
      of
      the SEC, and except that the unaudited financial statements may not have
      contained footnotes and were subject to normal and recurring year-end
      adjustments which were not, or are not reasonably expected to be, individually
      or in the aggregate, material in amount), complied as to form in all material
      respects with the published rules and regulations of the SEC applicable
      thereto.

     

    
      
        
        

      

      
        
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            PREFERRED
              STOCK PURCHASE AGREEMENT

          

        

        
          

        

      

      
        
        

      

       

    

    2.15 The
      Company and its subsidiaries own or possess, or can acquire on reasonable terms,
      sufficient legal rights to all material patents, patent rights, licenses,
      inventions, copyrights, know-how (including trade secrets and other unpatented
      and/or unpatentable propriety or confidential information, systems or
      procedures), trademarks, service marks and trade names currently employed by
      them in connection with the business now operated by them, and neither the
      Company nor any of its subsidiaries has received any notice of infringement
      of
      or conflict with asserted rights of others with respect to any of the foregoing
      that, individually or in the aggregate, if the subject of an unfavorable
      decision, ruling or finding, would have a Material Adverse Effect. 

     

    2.16 Neither
      the Company nor any Affiliate of the Company has, directly, or through any
      agent, (a) sold, offered for sale, solicited any offers to buy or otherwise
      negotiated in respect of, any security (as defined in the Securities Act) which
      is or will be integrated with the sales of the Offered Securities in a manner
      that would require the registration under the Securities Act of the Offered
      Securities; or (b) offered, solicited offers to buy or sold the Offered
      Securities in any form of general solicitation or general advertising (as those
      terms are used in Regulation D under the Securities Act) or in any manner
      involving a public offering within the meaning of Section 4(2) of the Securities
      Act; and the Company will not engage in any of the actions described in
      subsections (a) and (b) of this paragraph. 

     

    2.17 Subject
      to the accuracy of the Purchaser’s representations herein, it is not necessary
      in connection with the offer, sale and delivery of the Offered Securities to
      the
      Purchaser in the manner contemplated by this Agreement to register the Offered
      Securities under the Securities Act. 

     

    2.18 The issuance
      of the Offered Securities and the Conversion Shares, neither individually nor
      in
      the aggregate, constitute an anti-dilution event for any existing
      securityholders of the Company, pursuant to which such securityholders would
      be
      entitled to additional securities or a reduction in the applicable conversion
      price or exercise price of any securities due to any issuance proposed to be
      conducted hereunder. The Company does not believe that the
      right
      of the holders of at least a majority of the outstanding shares Series A
      Preferred Stock to approve the issuance of the Offered Securities constitutes
      an
      anti-dilution event.

     

    2.19 As
      of the
      date hereof, the Company satisfies the requirements for use of Form S-3 for
      registration of the resale of the Registrable Securities by the Holders (as
      hereinafter defined).

     

    
      
        
        

      

      
        
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            PREFERRED
              STOCK PURCHASE AGREEMENT

          

        

        
          

        

      

      
        
        

      

       

    

    SECTION
      3. Representation
      and Warranties of the Purchaser.
      The
      Purchaser hereby represents and warrants to the Company, as of the date hereof,
      as follows:

     

    3.1 The
      Purchaser is duly organized, validly existing and in good standing under the
      laws of the jurisdiction of its organization and has all requisite limited
      partnership power and authority to consummate the transactions contemplated
      hereby. Oak Associates XI, LLC (the “General
      Partner”)
      is
      duly organized, validly existing and in good standing under the laws of the
      jurisdiction of its organization and has all requisite corporate power and
      authority to consummate the transactions contemplated hereby. The General
      Partner has the power and authority to execute and deliver this Agreement on
      behalf of the Purchaser. 

     

    3.2 The
      Purchaser has full limited partnership power and authority to execute and
      deliver this Agreement and to perform its obligations hereunder. This Agreement
      constitutes the legal, valid and binding obligation of the Purchaser,
      enforceable against the Purchaser in accordance with its terms, subject to
      (a)
      laws of general application relating to bankruptcy, insolvency and the relief
      of
      debtors, (b) rules of law governing specific performance, injunctive relief
      and
      other equitable remedies, and (c) the limitations imposed by applicable
      federal or state securities laws on the indemnification provisions contained
      in
      this Agreement. 

     

    3.3 The
      execution, delivery and performance of this Agreement, and the purchase and
      acceptance of the Offered Securities by the Purchaser will not result in a
      breach or violation of any of the terms and provisions of, or constitute a
      default under any statute, rule, regulation or order of any governmental agency
      or body or any court, domestic or foreign, having jurisdiction over the
      Purchaser or any subsidiary of the Purchaser or any of their properties, or
      any
      material agreement or instrument to which the Purchaser or any such subsidiary
      is a party or by which Purchaser or any such subsidiary is bound or to which
      any
      of the properties of the Purchaser or any such subsidiary is subject, or the
      certificate of limited partnership, partnership agreement, and other
      organizational documents of the Purchaser or any such subsidiary (except where
      any such breaches, violations or defaults individually or in the aggregate
      would
      not have a Material Adverse Effect on the Purchaser’s ability to perform this
      Agreement).

     

    3.4 The
      Purchaser owns, and immediately prior to the Closing, will own beneficially
      and
      of record, free and clear of any liens, encumbrances, equities or claims, good
      and valid title to the shares of Series A Preferred Stock to be transferred
      by
      the Purchaser to the Company hereunder on the Closing Date. There exist no
      shareholder agreements, voting trusts, proxies, or other contracts with respect
      to the sale, transfer, registration or voting of the shares of Series A
      Preferred Stock to be transferred by the Purchaser to the Company
      hereunder.

     

    3.5 Investment
      Representations.

     

    (a) The
      Purchaser and the General Partner are sophisticated in transactions of this
      type
      and capable of evaluating the merits and risks of the transactions described
      herein and have the capacity to protect their own interests. The Purchaser
      has
      not been formed solely for the purpose of entering into the transactions
      described herein and is acquiring the Offered Securities for investment for
      its
      own account, not as a nominee or agent, and not with the view to, or for resale,
      distribution thereof, in whole or in part.

     

    
      
        
        

      

      
        
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              STOCK PURCHASE AGREEMENT

          

        

        
          

        

      

      
        
        

      

    

     

    (b) The
      Purchaser has not and does not intend to enter into any contract, undertaking,
      agreement or arrangement with any person or entity to sell, transfer or pledge
      the Offered Securities, other than a sale, transfer or pledge to an Affiliate,
      partner or former partner of Purchaser in compliance with the Securities
      Act.

     

    (c) The
      Purchaser acknowledges its understanding that the Company intends to sell the
      Offered Securities pursuant to a private placement exempt from registration
      under the Securities Act. In furtherance thereof, the Purchaser represents
      and
      warrants that it is an “accredited investor” as that term is defined in Rule 501
      of Regulation D under the Securities Act, has the financial ability to bear
      the
      economic risk of its investment, has adequate means for providing for its
      current needs and personal contingencies and has no need for liquidity with
      respect to its investment in the Company. The Purchaser further represents
      and
      warrants that the General Partner is an “accredited investor” as that term is
      defined in Rule 501 of Regulation D under the Securities Act, 

     

    (d) The
      Purchaser agrees that it shall not sell or otherwise transfer any of the Offered
      Securities without registration under the Securities Act, pursuant to Rule
      144
      (or any successor rule) under the Securities Act or pursuant to an opinion
      of
      counsel reasonably satisfactory to the Company that no violation of the
      Securities Act will be involved in such transfer. The Purchaser fully
      understands that none of the Offered Securities have been registered under
      the
      Securities Act or under the securities laws of any applicable state or other
      jurisdiction and, therefore, cannot be resold, pledged, assigned or otherwise
      disposed of unless subsequently registered under the Securities Act and under
      the applicable securities laws of such states or jurisdictions or an exemption
      from such registration is available. The Purchaser understands that the Company
      is under no obligation to register the Offered Securities on its behalf with
      the
      exception of certain registration rights set forth herein. The Purchaser
      understands the lack of liquidity and restrictions on transfer of the Offered
      Securities and that this investment is suitable only for a person or entity
      of
      adequate financial means that has no need for liquidity of this investment
      and
      that can afford a total loss of its investment.

     

    3.6 There
      is
      no legal, administrative, arbitration or other action or proceeding or
      governmental investigation pending, or to the knowledge of the Purchaser
      threatened, against the Purchaser that challenges the validity or performance
      of
      this Agreement or which, if successful, could hinder or prevent the Purchaser
      from performing its obligations hereunder.

     

    3.7 There
      have been no investment bankers, brokers or finders used by the Purchaser or its
      Affiliates in connection with the transactions contemplated by this Agreement
      and no persons or entities are entitled to a fee or compensation in respect
      thereof. 

     

    3.8 As
      of the
      date hereof, the Purchaser has (or has rights to obtain), and at all times
      prior
      to Closing will have (or will have rights to obtain), sufficient funds available
      to enable the Purchaser to consummate the transactions contemplated hereby
      and
      to pay the Purchase Price.

     

    SECTION
      4. COVENANTS PRIOR TO CLOSING

     

    
      
        
        

      

      
        
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              STOCK PURCHASE AGREEMENT

          

        

        
          

        

      

      
        
        

      

       

    

    4.1 Subject
      to the terms of this Agreement, each of the Company and the Purchaser shall
      use
      reasonable efforts to take all actions and do all things advisable and proper
      in
      order to consummate and make effective the transactions contemplated by this
      Agreement, including, but not limited to, (i) the taking of all reasonable
      acts
      necessary to cause the conditions precedent set forth in Sections 5, 6 and
      7 to
      be satisfied, (ii) the obtaining of all necessary actions or nonactions,
      waivers, consents, approvals, orders and authorizations from Governmental
      Entities and the making of all necessary registrations, declarations and filings
      (including registrations, declarations and filings with Governmental Entities,
      if any) and the taking of all reasonable steps as may be necessary to avoid
      any
      suit, claim, action, investigation or proceeding by any Governmental Entity
      related to the transactions contemplated hereby, (iii) the defending of any
      suits, claims, actions, investigations or proceedings, whether judicial or
      administrative, challenging this Agreement or the consummation of the
      transactions contemplated hereby and (iv) the execution or delivery of any
      additional instruments necessary to consummate the transactions contemplated
      by,
      and to fully carry out the purposes of, this Agreement. The Purchaser shall,
      on
      or prior to the Closing Date, execute and deliver to the Company a unanimous
      written consent of the sole holder of the Series A Preferred Stock approving
      the
      Articles of Amendment and, at the Shareholders Meeting, shall vote all of its
      shares of Series A Preferred Stock to approve the transactions contemplated
      hereby .

     

    4.2 During
      the period from the date of this Agreement until the Closing (the “Pre-Closing
      Period”),
      the
      Company shall (and shall cause its subsidiaries to) afford to the officers,
      employees, accountants, counsel, financial advisors and other representatives
      of
      the Purchaser reasonable access during normal business hours to all its books,
      records, properties, plants and personnel and, during such Pre-Closing Period,
      the Company shall (and shall cause its subsidiaries to) furnish promptly to
      the
      Purchaser all information concerning the Company and the Company’s business,
      properties and personnel as the Purchaser may reasonably request. Any
      investigation by the Purchaser shall not affect the representations and
      warranties of the Company or the conditions to its obligations to consummate
      the
      transactions contemplated by this Agreement. The Purchaser agrees that it shall
      keep any information obtained pursuant to this Section 4.2 in confidence (except
      as required by legal process) and will not, and it will cause its
      representatives not to, use any information obtained pursuant to this Section
      4.2 for any purpose unrelated to the consummation of the transactions
      contemplated by this Agreement.

     

    4.3 During
      the Pre-Closing Period, the Company shall give prompt written notice to the
      Purchaser of the occurrence or non-occurrence of any event known to the Company
      the occurrence or non-occurrence of which would reasonably be expected to cause
      any representation or warranty contained in Section 2 of this Agreement to
      be
      untrue, or the failure of the Company to comply with or satisfy any covenant
      or
      agreement under this Agreement. During the Pre-Closing Period, the Purchaser
      shall give prompt written notice to the Company of the occurrence or
      non-occurrence of any event known to the Purchaser the occurrence or
      non-occurrence of which would reasonably be expected to cause any representation
      or warranty contained in Section 3 of this Agreement to be untrue, or the
      failure of the Purchaser to comply with or satisfy any covenant or agreement
      under this Agreement.

     

    
      
        
        

      

      
        
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              STOCK PURCHASE AGREEMENT

          

        

        
          

        

      

      
        
        

      

       

    

    4.4 At
      or
      prior to the Closing Date, the Company will take all actions necessary,
      including, if necessary, to increase the size of the Board of Directors, so
      that, as of the Closing Date, the person designated by the Purchaser to serve
      on
      the Company’s Board of Directors (the “Board
      Designee”)
      is
      appointed as a member of the Company’s Board of Directors. The Purchaser shall
      use its best efforts to provide the Company with any and all information
      regarding the Board Designee reasonably requested by the Company.

     

    4.5 Preparation
      of Proxy Statement; Shareholders Meeting.

     

    (a) As
      promptly as practicable following the date of this Agreement, the Company shall
      prepare and file with the SEC a proxy statement relating to the transactions
      contemplated by this Agreement (as amended or supplemented from time to time,
      the “Proxy
      Statement”)
      and
      the Company shall use commercially reasonable efforts to respond as promptly
      as
      practicable to any comments of the SEC with respect thereto and to cause the
      Proxy Statement to be mailed to the Company's shareholders as promptly as
      practicable following the date of this Agreement. The Company shall promptly
      notify the Purchaser upon the receipt of any comments from the SEC or its staff
      or any request from the SEC or its staff for amendments or supplements to the
      Proxy Statement and shall provide the Purchaser with copies of all
      correspondence between the Company and its representatives, on the one hand,
      and
      the SEC and its staff, on the other hand which relates directly to the Proxy
      Statement (not including any documents that may be incorporated by reference
      therein). Notwithstanding the foregoing, prior to filing or mailing the Proxy
      Statement (or any amendment or supplement thereto) or responding to any comments
      of the SEC with respect thereto, the Company shall provide the Purchaser an
      opportunity to review and comment on such document or response which relates
      directly to the Proxy Statement (not including any documents that may be
      incorporated by reference therein).

     

    (b) If
      requested by the Company, the Purchaser shall use its commercially reasonable
      efforts to assist the Company in preparing the Proxy Statement, including,
      without limitation, providing to the Company any information regarding the
      Purchaser required to be included therein.

     

    (c) The
      Company shall, as promptly as practicable following the date of this Agreement,
      establish a record date (which will be as promptly as reasonably practicable
      following the date of this Agreement) for, duly call, give notice of, convene
      and hold a meeting of its shareholders for the purpose of obtaining the Required
      Vote (the “Shareholders
      Meeting”).
      The
      Company shall, through its Board of Directors, recommend to its shareholders
      that they adopt this Agreement and the transactions contemplated hereby, and
      shall include such recommendation in the Proxy Statement, provided, however,
      that the foregoing shall not prohibit the Board of Directors from withdrawing,
      modifying or changing such recommendation at any time to the extent that the
      Board of Directors determines to do so in the exercise of their fiduciary
      duties; provided, further, nothing in the preceding proviso will relieve the
      Company of its obligations under this Agreement except for the obligation set
      forth in this sentence and in the first sentence of Section 4.5(d). If the
      Company fails to obtain the Required Vote at such Shareholders Meeting and
      this
      Agreement is not otherwise terminated by the Purchaser or the Company pursuant
      to Section 11, the Company shall use commercially reasonable efforts to obtain
      the Required Vote at each successive shareholders meeting until the Required
      Vote is obtained.

     

    
      
        
        

      

      
        
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            PREFERRED
              STOCK PURCHASE AGREEMENT

          

        

        
          

        

      

      
        
        

      

       

    

    (d) Subject
      to the terms of Section 4.5(c) above, the Board of Directors shall recommend
      the
      approval, adoption and authorization of the transactions contemplated hereby.
      Notwithstanding the Board’s withdrawal, modification or change of its
      recommendation in accordance with the terms hereof, the Company shall take
      all
      lawful action to solicit such approval, adoption and authorization.

     

    4.6 Promptly
      following the execution of this Agreement, the Company shall (i) submit to
      the
      NASDAQ Listing Qualifications Department (the “Listing
      Department”)
      the
      Listing of Additional Shares Notification Form (the “LAS
      Form”)
      for
      the Conversion Shares and any supporting documentation required to be enclosed
      pursuant to Part V.A. of the LAS Form and (ii) respond to any requests from
      the
      Listing Department for further information or documentation, or to discuss
      any
      matters relating to this Agreement and the transactions contemplated hereby.
      Purchaser agrees to reasonably cooperate in connection with its compliance
      with
      the first sentence of this Section 4.6. To the extent that the NASDAQ indicates
      that any changes to the form of Articles of Amendment attached hereto as
Exhibit
      A
      or to
      any terms of the transactions contemplated by this Agreement are required to
      comply with NASDAQ Marketplace Rule 4351, the Purchaser and the Company hereby
      agree to make any modifications necessary to such form of Articles of Amendment
      to comply with NASDAQ Marketplace Rule 4351. 

     

    4.7 Conduct
      of the Company’s Business During the Pre-Closing Period. With
      the
      exception of the Company’s cost reduction proposals, during the Pre-Closing
      Period, the Company shall, and shall cause each of its material subsidiaries
      to
      operate its business only in the usual and ordinary course of business
      consistent with past practice and use commercially reasonable efforts to
      preserve the relationships with its customers, suppliers, employees and other
      persons having business relations with the Company or its material subsidiaries.
      Without limiting the generality of the foregoing, prior to the Closing, the
      Company shall not (and shall not permit any of its subsidiaries to) without
      the
      prior written consent of the Purchaser: 

     

    (a) except
      as
      contemplated by this Agreement, (i) declare or pay any dividends on or make
      other distributions (whether in cash, stock or other property) in respect of
      any
      of its capital stock, (ii) split, combine, subdivide 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, except for any such transaction by a wholly-owned subsidiary
      of
      the Company which remains a wholly-owned subsidiary after consummation of such
      transaction, or (iii) repurchase, redeem or otherwise acquire, directly or
      indirectly, any shares of its capital stock or any securities convertible into
      or exercisable for any shares of its capital stock;

     

    (b) except
      as
      contemplated herein, amend its Articles of Incorporation or Bylaws, as the
      case
      may be;

     

    
      
        
        

      

      
        
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            PREFERRED
              STOCK PURCHASE AGREEMENT

          

        

        
          

        

      

      
        
        

      

    

     

    (c) issue
      or
      agree to issue, deliver, sell, dispose, pledge or encumber, or authorize or
      propose the issuance, delivery, sale, disposition, pledge or encumbrance of,
      any
      shares of its capital stock of any class or other securities or any securities
      convertible into or exercisable or exchangeable for, or any rights, warrants,
      calls, commitments or options to acquire, any such shares or securities, or
      enter into any agreement with respect to any of the foregoing and shall not
      amend any equity-related awards issued pursuant to the Company’s equity
      incentive plans, other than (i) the issuance of shares of the Company’s Common
      Stock upon the exercise of options outstanding on the date of this Agreement,
      (ii) the issuance of equity awards pursuant to the Company’s Omnibus Equity
      Compensation Plan in the ordinary course of business and consistent with past
      practice, (iii) the issuance of shares of the Company’s Common Stock pursuant to
      the Company’s Employee Stock Purchase Plan issued in the ordinary course of
      business and consistent with past practice, (iv) the issuance of shares of
      the
      Company’s Common Stock pursuant to the Company’s 401(k) plan issued in the
      ordinary course of business and consistent with past practice, and (v) the
      issuance of shares of Common Stock or any securities convertible into or
      exercisable or exchangeable for, or any rights, warrants, calls, commitments
      or
      options to acquire, of Common Stock (“Equity
      Issuances”)
      if
      such issuances, when aggregated with all prior Equity Issuances entered into
      after the date hereof do not result in gross proceeds to the Company in excess
      of $4,000,000 in the aggregate (collectively, “Excluded
      Issuances”);

     

    (d) amend
      or
      modify any stock option plan or employee stock ownership or purchase plan as
      in
      existence as of the date hereof or adopt any new stock option plan or employee
      stock purchase plan;

     

    (e) directly
      or indirectly engage in any transaction, arrangement or contract with any
      officer, director or Affiliate or, with respect to or otherwise relating to
      such
      shareholder's shares, a shareholder of the Company which is not in the ordinary
      course of business and at arm's length;

     

    (f) acquire,
      sell, license, lease or dispose of any material assets outside the ordinary
      course of business consistent with past practice;

     

    (g) adopt
      a
      plan of complete or partial liquidation, dissolution, merger, consolidation,
      restructuring, recapitalization or other reorganization of the Company or any
      of
      its material subsidiaries, other than the Company’s cost reduction proposals;

     

    (h) sell
      all
      or substantially all of the Company’s assets or participate in a transaction
      that constitutes a change of control of the Company (For purposes of this
      Agreement, a “change in control” shall be defined as a reorganization, merger,
      consolidation or other form of corporate transaction or series of transactions,
      in each case, with respect to which persons who were the shareholders of the
      Company immediately prior to such reorganization, merger or consolidation or
      other transaction do not, immediately thereafter, own more than 50% of
      the
      combined voting power entitled to vote generally in the election of directors
      of
      the reorganized, merged or consolidated company’s then outstanding voting
      securities, in substantially the same proportions as their ownership immediately
      prior to such reorganization, merger, consolidation or other
      transaction);

     

    
      
        
        

      

      
        
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    (i) engage
      in
      the conduct of any business other than its existing business;

     

    (j) create
      any new debt instrument or bank line or increase any existing bank line or
      debt
      obligation (or similar arrangement pursuant to which the Company is or becomes
      indebted) (a “Loan
      Financing”),
      other
      than (i) trade payables in the ordinary course of business, (ii) capital lease
      lines, and (iii) a Loan Financing that individually or in the aggregate with
      other Loan Financings entered into after the date hereof does not result in
      proceeds to the Company in excess of $10,000,000 (a “Permitted
      Loan Financing”);
      and

     

    (k) take
      any
      action that could reasonably be expected to result in (i) any of the
      representations or warranties of the Company set forth in this Agreement
      becoming untrue or (ii) any of the conditions set forth in Section 5 or 6 not
      being satisfied.

     

    (l) Notwithstanding
      the foregoing, (i) nothing in this Section 4.7 shall prohibit the Company from
      taking any action or omitting to take any action as required or as expressly
      contemplated by this Agreement and (ii) the Company may take such actions as
      are
      reasonably necessary or advisable to consummate the transactions contemplated
      by
      this Agreement.

     

    4.8 During
      the Pre-Closing Period, the Purchaser shall not transfer, sell, dispose, pledge
      or encumber (a “Transfer”)
      any of
      the shares of Series A Preferred Stock owned by the Purchaser as of the date
      hereof unless, prior to such Transfer, the Purchaser has converted the shares
      of
      Series A Preferred Stock subject to Transfer into shares of the Company’s Common
      Stock in
      accordance with Section 4.12.4(c) of the Articles of Incorporation and taken
      any
      and all actions that may be required pursuant to Section 4.12.4(d) of the
      Articles of Incorporation to effect such conversion.

     

    4.9 No
      Solicitation.

     

    (a) Until
      the
      earlier of (x) the termination of this Agreement pursuant to Section 11.1 and
      (y) the Closing Date (the period from the date of this Agreement until such
      earlier date is referred to herein as the “Exclusivity
      Period”),
      and
      (i) except as set forth in subsection (b) below, neither the Company and its
      Affiliates nor any of their respective subsidiaries (collectively, the
“Restricted
      Parties”
and
      each a “Restricted
      Party”)
      shall,
      directly or indirectly, initiate, solicit or encourage (including by way of
      furnishing information or assistance), or take any other action to facilitate,
      any inquiries or the making of any proposal that constitutes, or would
      reasonably be expected to result in, a Competing Transaction (as defined below),
      or enter into or maintain or continue discussions or negotiate with any person
      or entity in furtherance of such inquiries or to obtain a Competing Transaction,
      or agree to or endorse any Competing Transaction, or authorize or permit any
      of
      their respective officers, directors, employees, consultants or agents or any
      investment banker, financial advisor, attorney, accountant or other
      representative retained by any Restricted Party to take any such action; and
      (ii) the Company shall notify the Purchaser (as promptly as practicable, but
      in
      any event, within three business days) if any written or oral request for
      information or proposal relating to a Competing Transaction is made and shall
      keep the Purchaser promptly advised of all such requests and proposals (unless
      providing such information is prohibited by a confidentiality provision). As
      used herein, the term “Competing
      Transaction”
shall
      mean the offer or sale of equity or equity-linked securities of the Company
      to a
      third party other than the Purchaser (other than Excluded
      Issuances).

     

    
      
        
        

      

      
        
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    (b) Notwithstanding
      the foregoing, at any time prior to obtaining the Required Vote, in response
      to
      a bona fide proposal that the Board of Directors determines in good faith
      constitutes a Superior Proposal (as defined below), and which proposal was
      unsolicited and made after the date hereof and did not otherwise result from
      a
      breach of this Section 4.9, the Company may, for a period of seven calendar
      days
      from the date of receipt of the initial proposal from any such person or entity
      (x) furnish information with respect to the Company to the person or entity
      making such proposal, and (y) participate in discussions or negotiations with
      the person or entity making such proposal. The Company will promptly furnish
      a
      copy of any such Superior Proposal that is in writing to the Purchaser, and
      if
      such Superior Proposal is oral, the Company will promptly furnish the Purchaser
      with a reasonably detailed description of the material terms of such Superior
      Proposal. For purposes of this Agreement, a “Superior
      Proposal”
means
      any proposal made by a third party if the proposal is otherwise on terms which
      the Board of Directors determines in its good faith judgment to be (A) more
      favorable to the Company's shareholders from a financial point of view than
      the
      transactions contemplated by this Agreement (taking into account all the terms
      and conditions of such proposal and this Agreement (including any changes to
      the
      financial terms of this Agreement proposed by the Purchaser in response to
      such
      offer or otherwise)), and (B) reasonably capable of being completed, taking
      into
      account all financial, timing, legal, regulatory and other aspects of such
      proposal.

     

    SECTION
      5. CONDITIONS OF THE OBLIGATIONS OF THE EACH PARTY.
      The
      respective obligations of each party to this Agreement to effect the purchase
      and sale of the Offered Securities shall be subject to the satisfaction at
      or
      prior to the Closing Date of the following conditions:

     

    5.1 The
      Required Vote shall have been obtained and shall be in full force and
      effect.

     

    5.2 No
      Governmental Entity of competent jurisdiction shall have enacted, issued,
      promulgated, enforced or entered any statute, rule, regulation, executive order,
      decree, injunction or other order (whether temporary, preliminary or permanent)
      which (i) is in effect and (ii) has the effect of making the transactions
      contemplated by this Agreement illegal or otherwise prohibiting or preventing
      consummation of the transactions contemplated by this Agreement; provided,
      however, that prior to invoking this condition, each party agrees to comply
      with
      Section 4.1.

     

    5.3 All
      waiting periods (and any extension thereof) under the HSR Act relating to the
      transactions contemplated by this Agreement have expired or terminated early.
      

     

    5.4 Either
      (a) fifteen (15) days shall have lapsed from the date the LAS Form was delivered
      to the Listing Department without objection from the NASDAQ or (b) the NASDAQ
      shall have accepted or indicated that it will not object to the transactions
      contemplated by this Agreement prior to the expiration of such fifteen (15)
      day
      period. 

     

    
      
        
        

      

      
        
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    SECTION
      6. CONDITIONS OF THE OBLIGATIONS OF THE PURCHASER.
      The
      obligations of the Purchaser to purchase and pay for the Offered Securities
      on
      the Closing Date will be subject to the satisfaction, or waiver by the
      Purchaser, of each of the conditions below:

     

    6.1 The
      representations and warranties of the Company herein must be materially correct
      and complete on the Closing Date except that (i) representations and warranties
      made as of a specific date need only be correct and complete in all material
      respects on such date and (ii) for purposes of determining if such
      representations are “materially” correct, all materiality qualifications
      included in such representations and warranties shall be disregarded); the
      Company must have performed all of its obligations hereunder required to be
      performed in all material respects prior to the Closing Date; and the Company
      shall have delivered to the Purchaser a certificate, dated as of the Closing
      Date and signed by an executive officer of the Company, to the foregoing
      effect.

     

    6.2 The
      Company shall have duly adopted, executed and filed with the Secretary of State
      of Washington the Articles of Amendment in the form attached hereto as
Exhibit
      A
      (subject
      to any changes made pursuant to Section 4.6). The Articles of Amendment shall
      be
      in full force and effect under the laws of the State of Washington as of the
      Closing Date and shall not have been amended or modified.

     

    6.3 The
      Board
      Designee shall have been appointed to the Company’s Board of Directors, and the
      Company shall have entered into an indemnification agreement, in the Company’s
      standard form, with the Board Designee.

     

    6.4 The
      Purchaser must have received a customary opinion, dated the Closing Date, from
      Hunton & Williams, LLP counsel for the Company, in the form attached hereto
      as Exhibit
      B.

     

    6.5 The
      business, assets, financial condition and operations of the Company shall be
      substantially as represented to the Purchaser and no change shall have occurred
      that, in the reasonable good faith judgment of the Purchaser, is or could have
      a
      Material Adverse Effect, provided,
      however, that
      no
      change constituting or related to (i) the economy or financial markets of
      the United States of America or any other region, (ii) any change, effect
      or development that is primarily caused by conditions generally effecting the
      industry in which the Company conducts its business, (iii) any change that
      is
      primarily caused by the announcement or pendency of this Agreement or the
      transactions contemplated hereby, or (iv) any generally applicable change in
      law, rule or regulation, including, but not limited to, United States generally
      accepted accounting principles. The Purchaser must have received a certificate,
      dated the Closing Date, of an officer of the Company to the foregoing
      effect.

     

    SECTION
      7. CONDITIONS OF THE OBLIGATIONS OF THE COMPANY. The
      obligations of the Company to sell the Offered Securities on the Closing Date
      to
      the Purchaser in exchange for the Purchase Price will be subject to the
      satisfaction, or waiver by the Company, of each of the conditions
      below:

     

    
      
        
        

      

      
        
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    7.1 The
      representations and warranties of the Purchaser herein must be materially
      correct and complete on the Closing Date (except that representations and
      warranties made as of a specific date need only be correct and complete in
      all
      material respects on such date); the Purchaser must have performed all of its
      obligations hereunder required to be performed in all material respects prior
      to
      the Closing Date; and the Purchaser shall have delivered to the Company a
      certificate, dated as of the Closing Date and signed by an authorized
      representative of the Purchaser, to the foregoing effect.

     

    7.2 The
      Purchaser shall have delivered to the Company all certificates, if any,
      evidencing the shares of Series A Preferred Stock being transferred to the
      Company in connection with this Agreement and any other documentation reasonably
      requested by the Company and provided to the Purchaser in final form (to the
      extent the Company has the ability to prepare a final form) at least three
      (3)
      business days before Closing to evidence the transfer of such shares of Series
      A
      Preferred Stock by the Purchaser to the Company.

     

    7.3 Immediately
      prior to the Closing, there shall be no person or entity that holds any shares
      of the Company’s Series A Preferred Stock other than the Purchaser.

     

    7.4 The
      Purchaser shall have executed and delivered to the Company a unanimous written
      consent of the sole holder of the Series A Preferred Stock approving the
      Articles of Amendment.

     

    7.5 At
      the
      Shareholders Meeting, the Purchaser shall have voted all of its shares of Series
      A Preferred Stock to approve the transactions contemplated hereby .

     

    SECTION
      8. REGISTRATION OF THE REGISTRABLE SECURITIES; COMPLIANCE WITH THE SECURITIES
      ACT. 

     

    8.1 Registration
      Procedures.  The
      Company is obligated to do the following:

     

    (a) Before
      the date that is 4 months after the Closing Date, the Company shall prepare
      and
      file with the SEC one or more registration statements (the “Registration
      Statement(s)”)
      in
      order to register with the SEC the resale by the Holders (as defined below),
      from time to time, of the Registrable Securities (as defined below) through
      NASDAQ or the facilities of any national securities exchange on which the
      Company’s Common Stock is then traded, or in privately negotiated transactions.
      The Company and the Purchaser shall reasonably cooperate to determine what
      the
      parties believe to be the most feasible and effective method of registering
      the
      offer and sale of all of the Registrable Securities. The Company shall use
      its
      reasonable efforts to cause such Registration Statement(s) to be declared
      effective before the date that is nine months following the Closing Date;
      provided, however, that if the lock-up set forth in Section 10.2 expires as
      a
      result of Section 10.2(z), the Company will use commercially reasonable efforts
      to cause the Registration Statement(s) to be declared effective as soon as
      is
      commercially reasonable after such expiration. The holders of Registrable
      Securities (including the Purchaser’s Permitted Transferees under Section 8.10)
      are referred to herein as the “Holders.”
The
      Company shall promptly notify the Holders of the effectiveness of the
      Registration Statement(s). “Registrable
      Securities”
shall
      mean (i) the Conversion Shares, (ii) the shares of Common Stock issuable upon
      conversion of the Series B Preferred Stock issued under Section 8.9 (the
“Damages
      Shares”)
      and
      (iii) Common Stock issued as (or issuable upon the conversion of exercise of
      any
      warrant, right or other security that is issued as) a dividend or other
      distribution with respect to, or in exchange for or in replacement of, the
      Offered Securities, the Conversion Shares or the Damages Shares (or Common
      Stock
      into which such Damages Shares is convertible), provided, however, securities
      shall cease to be Registrable Securities on the earlier of (A) the date
      that such securities are sold pursuant to the Registration Statement(s), or
      (B) such time that all Registrable Securities held by a Holder can be sold
      pursuant to Rule 144(k) under the Securities Act (and the Company has provided
      an opinion of counsel to such effect reasonably acceptable to the Holder of
      such
      Registrable Securities). Each Holder shall provide the Company such information
      in writing as is reasonably requested to enable the Company and its counsel
      to
      ascertain whether or not the Holder is eligible to sell the Offered Securities
      and/or the Registrable Securities pursuant to Rule 144 of the Securities Act.
      

     

    
      
        
        

      

      
        
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    (b) The
      Company shall prepare and file with the SEC (i) such amendments and supplements
      to any Registration Statement(s) and the prospectus used in connection
      therewith, and (ii) such other filings required by the SEC, in each case as
      may
      be necessary to keep the Registration Statement(s) continuously effective and
      not misleading until the earlier of (A) the date that the holders of
      Registrable Securities have completed the distribution related to the
      Registrable Securities, or (B) such time that there are no longer any
      Registrable Securities outstanding; provided,
      however,
      that at
      any time, upon written notice to the Purchaser and for a period not to exceed
      fifteen (15) days thereafter (the “Suspension
      Period”),
      the
      Company may delay the filing or effectiveness of any Registration Statement(s)
      or suspend the use or effectiveness of any Registration Statement(s) (and the
      Holders hereby agree not to offer or sell any Registrable Securities pursuant
      to
      such Registration Statement(s) during the Suspension Period) if the Company
      reasonably believes that the Company may, in the absence of such delay or
      suspension hereunder, be required under state or federal securities laws to
      disclose any corporate development the disclosure of which could reasonably
      be
      expected to have an adverse effect upon the Company, its shareholders, a
      potentially significant transaction or event involving the Company, or any
      negotiations, discussions, or proposals directly relating thereto. The Company
      may extend the Suspension Period for an additional consecutive fifteen (15)
      days
      upon written notice to the Holders. The Company agrees to use its commercially
      reasonable efforts to insure that the Suspension Period is kept to a minimum
      number of days. If so directed by the Company, each Holder shall use its best
      efforts to deliver to the Company (at the Company’s expense) all copies, other
      than permanent file copies then in such Holder’s possession, of the prospectus
      relating to such Registrable Securities current at the time of receipt of such
      notice.

     

    (c) Furnish
      to the Holders such number of copies of a prospectus, including a preliminary
      prospectus, in conformity with the requirements of the Securities Act, and
      such
      other documents as they may reasonably request in order to facilitate the
      disposition of Registrable Securities owned by them. 

     

    
      
        
        

      

      
        
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    (d) Use
      its
      best efforts to register and qualify the securities covered by such Registration
      Statement(s) under such other securities or Blue Sky laws of such jurisdictions
      as shall be reasonably requested by a Holder; provided
      that
      the
      Company shall not be required in connection therewith or as a condition thereto
      to qualify to do business or to file a general consent to service of process
      in
      any such states or jurisdictions, unless the Company is already subject to
      service in such jurisdiction and except as required by the Securities
      Act.

     

    (e) Notify
      each Holder whose Registrable Securities are covered by such Registration
      Statement(s) at any time when a prospectus relating thereto is required to
      be
      delivered under the Securities Act of the happening of any event as a result
      of
      which the prospectus included in such Registration Statement(s), as then in
      effect, includes an untrue statement of a material fact or omits to state a
      material fact required to be stated therein or necessary to make the statements
      therein not misleading in the light of the circumstances then existing. The
      Company shall use reasonable efforts to promptly amend or supplement such
      prospectus in order to cause such prospectus not to include any untrue statement
      of a material fact or omit to state a material fact required to be stated
      therein or necessary to make the statements therein not misleading in the light
      of the circumstances then existing.

     

    (f) Use
      it
      reasonable efforts to cause all such Registrable Securities registered pursuant
      hereunder to be listed on NASDAQ and each other securities exchange on which
      similar securities issued by the Company are then listed. 

     

    (g) Use
      commercially reasonable efforts to cause the Registration Statement(s) to allow
      for resales by Permitted Transferees (as such term is defined in Section 8.10)
      without filing a post-effective amendment or, if possible, prospectus amendment
      thereto. 

     

    8.2 Transfer
      of Securities.  Each
      Holder, severally and not jointly, agrees that it will not effect any
      disposition of the Offered Securities or Registrable Securities that would
      constitute a sale within the meaning of the Securities Act, unless:

     

    (a) (i)
      pursuant to a Registration Statement(s) then in effect covering such
      disposition, if such disposition is made in accordance with such Registration
      Statement(s); or (ii) such Holder shall have notified the Company of the
      proposed disposition and shall have furnished the Company with a reasonably
      detailed statement of the circumstances surrounding the proposed disposition,
      and if reasonably requested by the Company, such Holder shall have furnished
      the
      Company with an opinion of counsel, reasonably satisfactory to the Company,
      or
      other evidence, reasonably satisfactory to the Company, that such disposition
      will not require registration of such Registrable Securities under the
      Securities Act. It is agreed that the Company will not require opinions of
      counsel for transactions made pursuant to and in compliance with Rule 144;
      and

     

    (b) the
      Company is given written notice prior to said transfer or assignment, stating
      the name and address of the transferee or assignee and identifying the
      Registrable Securities that are intended to be transferred or assigned and
       the transferee or assignee of such rights delivers to the Company, in a
      form reasonably acceptable to the Company, an agreement evidencing the
      assumption of all of the rights and obligations of such Holder under this
      Agreement, including the obligations set forth in Section 10.2, if applicable
      to
      the transferred Registrable Securities, and Section 10.1.

     

    
      
        
        

      

      
        
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    8.3 Legends. 
      Each
      certificate representing Registrable Securities shall (unless otherwise
      permitted by the provisions of the Agreement) be stamped or otherwise imprinted
      with a legend substantially similar to the legend described in the Articles
      of
      Amendment.

     

    8.4 Expenses
      of Registration.
      Except
      as specifically provided herein, all expenses incurred by the Company in
      complying with Section 8 hereof, including, all registration and filing
      fees, printing expenses not to exceed $20,000, fees and disbursements of counsel
      for the Company, reasonable and actual fees and expenses of one counsel to
      the
      Holders (not to exceed $7,500 in connection with the original filing thereof
      (or, if such registration is on Form S-1, is an underwritten offering or there
      are other unanticipated circumstances, $15,000), and, if any post-effective
      amendment or prospectus amendment is required in connection therewith, an
      additional $5,000 per amendment), blue sky fees and expenses, fees and the
      expense of any special audits incident to or required by any such registration
      (but excluding the compensation of regular employees of the Company which shall
      be paid in any event by the Company) (collectively, the “Registration
      Expenses”)
      shall
      be borne by the Company. All underwriting discounts and brokerage/selling
      commissions applicable to a sale incurred in connection with any registrations
      hereunder shall be borne by the holders of the securities so registered
pro
      rata
      on the
      basis of the number of shares registered for resale. The Holders shall also
      be
      responsible, on a pro rata basis, for paying printing expenses and legal
      expenses of counsel to the Holders which are not Registration Expenses pursuant
      to this Section 8.4. 

     

    8.5 Indemnification. In
      the
      event any Registrable Securities are included in a registration statement under
      this Section 8.

     

    (a) The
      Company will indemnify and hold harmless each Holder, the partners, officers
      and
      directors of each Holder, any underwriter (as defined in the Securities Act)
      for
      such Holder and each person, if any, who controls such Holder or underwriter
      within the meaning of the Securities Act or the Exchange Act, against any
      losses, claims, damages, or liabilities (joint or several) to which they may
      become subject under the Securities Act, the Exchange Act or other federal
      or
      state law, insofar as such losses, claims, damages or liabilities (or actions
      in
      respect thereof) arise out of or are based upon any of the following statements,
      omissions or violations (collectively a “Violation”):
      (i) any untrue statement or alleged untrue statement of a material fact
      contained in such registration statement, including any preliminary prospectus
      or final prospectus contained therein or any amendments or supplements thereto,
      (ii) the omission or alleged omission to state therein a material fact
      required to be stated therein, or necessary to make the statements therein
      not
      misleading, or (iii) any violation or alleged violation by the Company of
      the Securities Act, the Exchange Act, any state securities law or any rule
      or
      regulation promulgated under the Securities Act, the Exchange Act or any state
      securities law in connection with the offering covered by such registration
      statement; and the Company will pay as incurred to each such Holder, partner,
      officer, director, underwriter or controlling person for any legal or other
      expenses reasonably incurred by them in connection with investigating or
      defending any such loss, claim, damage, liability or action; provided,
      however,
      that
      the indemnity agreement contained in this Section 8.5 shall not apply to
      amounts paid in settlement of any such loss, claim, damage, liability or action
      if such settlement is effected without the consent of the Company, which consent
      shall not be unreasonably withheld, nor shall the Company be liable in any
      such
      case for any such loss, claim, damage, liability or action to the extent that
      it
      arises out of or is based upon a Violation which occurs in reliance upon and
      in
      conformity with written information furnished specifically for use in connection
      with such registration by such Holder, partner, officer, director, underwriter
      or controlling person of such Holder.

     

    
      
        
        

      

      
        
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    (b) Each
      Holder will, if Registrable Securities held by such Holder are included in
      the
      securities as to which registration, qualifications or compliance is being
      effected, indemnify and hold harmless the Company, each of its directors, its
      officers and each person, if any, who controls the Company within the meaning
      of
      the Securities Act, any underwriter and any other Holder selling securities
      under such registration statement or any of such other Holder’s partners,
      directors or officers or any person who controls such Holder, against any
      losses, claims, damages or liabilities (joint or several) to which the Company
      or any such director, officer, controlling person, underwriter or other such
      Holder, or partner, director, officer or controlling person of such other Holder
      may become subject under the Securities Act, the Exchange Act or other federal
      or state law, insofar as such losses, claims, damages or liabilities (or actions
      in respect thereto) arise out of or are based upon any Violation, in each case
      to the extent (and only to the extent) that such Violation occurs in reliance
      upon and in conformity with written information furnished by such Holder
      specifically for use in connection with such registration; and each such Holder
      will pay as incurred any legal or other expenses reasonably incurred by the
      Company or any such director, officer, controlling person, underwriter or other
      person registering shares under such registration, or partner, officer, director
      or controlling person of such other person registering shares under such
      registration in connection with investigating or defending any such loss, claim,
      damage, liability or action; provided,
      however,
      that the
      indemnity agreement contained in this Section 8.5 shall not apply to
      amounts paid in settlement of any such loss, claim, damage, liability or action
      if such settlement is effected without the consent of such Holder, which consent
      shall not be unreasonably withheld; provided
      further,
      that in
      no event shall any indemnity under this Section 8.5 exceed the net proceeds
      from the sale of Registrable Securities pursuant to the Registration Statement
      received by such Holder.

     

    (c) Promptly
      after receipt by an indemnified party under this Section 8.5 of notice of
      the commencement of any action (including any governmental action), such
      indemnified party will, if a claim in respect thereof is to be made against
      any
      indemnifying party under this Section 8.5, deliver to the indemnifying
      party a written notice of the commencement thereof and the indemnifying party
      shall have the right to participate in, and, to the extent the indemnifying
      party so desires, jointly with any other indemnifying party similarly noticed,
      to assume the defense thereof with counsel mutually satisfactory to the parties;
      provided,
      however,
      that an
      indemnified party shall have the right to retain its own counsel, with the
      reasonable and actual fees and expenses to be paid by the indemnifying party,
      if
      representation of such indemnified party by the counsel retained by the
      indemnifying party would be inappropriate due to actual or potential differing
      interests between such indemnified party and any other party represented by
      such
      counsel in such proceeding. The failure to deliver written notice to the
      indemnifying party within a reasonable time of the commencement of any such
      action, if materially prejudicial to its ability to defend such action, shall
      relieve such indemnifying party of any liability to the indemnified party under
      this Section 8.5, but the omission so to deliver written notice to the
      indemnifying party will not relieve it of any liability that it may have to
      any
      indemnified party otherwise than under this Section 8.5.

     

    
      
        
        

      

      
        
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    (d) If
      the
      indemnification provided for in this Section 8.5 is held by a court of
      competent jurisdiction to be unavailable to an indemnified party with respect
      to
      any losses, claims, damages or liabilities referred to herein, the indemnifying
      party, in lieu of indemnifying such indemnified party thereunder, shall to
      the
      extent permitted by applicable law contribute to the amount paid or payable
      by
      such indemnified party as a result of such loss, claim, damage or liability
      in
      such proportion as is appropriate to reflect the relative fault of the
      indemnifying party on the one hand and of the indemnified party on the other
      in
      connection with the Violation(s) that resulted in such loss, claim, damage
      or
      liability, as well as any other relevant equitable considerations. The relative
      fault of the indemnifying party and of the indemnified party shall be determined
      by a court of law by reference to, among other things, whether the untrue or
      alleged untrue statement of a material fact or the omission to state a material
      fact relates to information supplied by the indemnifying party or by the
      indemnified party and the parties’ relative intent, knowledge, access to
      information and opportunity to correct or prevent such statement or omission;
      provided,
      that in
      no event shall any contribution by a Holder hereunder exceed the net proceeds
      from the sale of Registrable Securities pursuant to the Registration Statement
      received by such Holder.

     

    (e) The
      obligations of the Company and the Holders under this Section 8.5 shall
      survive completion of any offering of Registrable Securities in a registration
      statement and the termination of this Agreement. No indemnifying party, in
      the
      defense of any such claim or litigation, shall, except with the consent of
      each
      indemnified party, consent to entry of any judgment or enter into any settlement
      which does not include as an unconditional term thereof the giving by the
      claimant or plaintiff to such indemnified party of a release from all liability
      in respect to such claim or litigation.

     

    8.6 Agreement
      to Furnish Information.
      In
      connection with a registration in which a Holder is participating, such Holder
      agrees to execute and deliver such other agreements as may be reasonably
      requested by the Company or the underwriter. In addition, if requested by the
      Company or the representative of the underwriters of Common Stock (or other
      securities) of the Company, each Holder shall provide, within ten (10) days
      of
      such request, such information related to such Holder as may be required by
      the
      Company or such representative in connection with the completion of any public
      offering of the Company’s securities pursuant to a registration statement filed
      under the Securities Act.

     

    8.7 Rule
      144 Reporting. With
      a
      view to making available to the Holder the benefits of certain rules and
      regulations of the SEC which may permit the sale of the Registrable Securities
      to the public without registration, the Company agrees to use its reasonable
      efforts to:

     

    
      
        
        

      

      
        
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    (a) Make
      and
      keep public information available, as those terms are understood and defined
      in
      Rule 144 of the Securities Act or any similar or analogous rule promulgated
      under the Securities Act;

     

    (b) File
      with
      the SEC, in a timely manner, all reports and other documents required of the
      Company under the Exchange Act; and

     

    (c) So
      long
      as a Holder owns any Registrable Securities, furnish to such Holder forthwith
      upon request: a written statement by the Company as to its compliance with
      the
      reporting requirements of said Rule 144 of the Securities Act, and of the
      Exchange Act (at any time after it has become subject to such reporting
      requirements); a copy of the most recent annual or quarterly report of the
      Company; and such other reports and documents as a Holder may reasonably request
      in availing itself of any rule or regulation of the SEC allowing it to sell
      any
      such securities without registration.

     

    8.8 S-3
      Eligibility; S-1 Eligibility; NASDAQ Listing.
      Until
      the earlier of (A) the date that the Registrable Securities are sold
      pursuant to the Registration Statement(s), or (B) there are no remaining
      Registrable Securities, the Company will use its reasonable efforts to (i)
      meet
      the requirements for the use of Form S-3 for registration of the resale by
      the
      Holders of the Registrable Securities and (ii) maintain the Company’s NASDAQ
      listing. The Company will use its reasonable efforts to file all reports
      required to be filed by the Company with the SEC in a timely manner and take
      all
      other reasonably necessary action so as to maintain such eligibility for the
      use
      of Form S-3. In addition, the Company will use its best efforts take all other
      reasonably necessary action so as to maintain its eligibility for the use of
      Form S-1 for registration of the resale by the Holders of the Registrable
      Securities. 

     

    8.9 Liquidated
      Damages.
      If (i)
      the Registration Statement(s) is not declared effective by the SEC on or prior
      to the date that is nine months following the Closing Date or (ii) the
      Registration Statement(s) is filed with and declared effective by the SEC but
      thereafter ceases to be effective as to Registrable Securities at any time
      thereafter, excluding any Suspension Period that does not exceed 30 days
      individually or 60 days during any one-year period, the Company shall pay as
      liquidated damages to each Holder an amount (the “Non-Registration
      Fee”)
      equal
      to one percent (1%) for each calendar month (or a lesser pro rata share if
      such
      period is less than a full calendar month) thereafter (until there is a
      Registration Cure, as defined below, with respect to such Holder) of the
      Purchase Price attributable to the Registrable Securities then held by such
      Holder with respect to which the Registration Statement(s) are not effective
      (the “Unregistered
      Shares”),
      payable with respect to any calendar month on the third day of the following
      calendar month; provided,
      however,
      the
      Non-Registration Fee will be three percent (3%) if the failure to maintain
      a
      registration statement is directly or indirectly the result of the Company’s
      fraud or gross negligence; provided,
      further,
      no
      Holder shall be entitled to a Non-Registration Fee if the failure to register
      or
      maintain the Registration Statement(s) with respect to such Holder’s
      Unregistered Shares relates primarily to an act or omission of Holder. A
“Registration
      Cure,”
with
      respect to a Holder, is the earliest to occur of the following: (x) the
      Registration Statement(s) with respect to such Holder’s Registrable Securities
      is declared or becomes effective; (y) such Holder’s securities cease to be
      Registrable Securities pursuant to the definition of such term set forth in
      this
      Section 6; or (z) the Company (1) sends the Holder a notice (a “Cure
      Notice”)
      in
      which the Company offers to purchase all of such Holder’s Registrable Securities
      at a price per share equal to the Fair Market Value (as defined below) thereof
      (measured as of the date of the Cure Notice), (2) deposits cash and/or Series
      B
      Preferred Stock equal to the aggregate purchase price therefor with a bank
      or
      trust corporation having aggregate capital and surplus in excess of $50,000,000,
      as a trust fund for the benefit of such Holder, with irrevocable instructions
      and authority to the bank or trust corporation to pay such amounts to such
      Holder upon receipt of notification from the Company that such Holder has
      surrendered the related share certificates to the Company pursuant to this
      Section 8.9 (or lost stock affidavit therefor reasonably acceptable to the
      Company) and (3) provides the Holder with an officer’s certificate, signed by
      the Chief Executive Officer of the Company, to the effect that the foregoing
      has
      occurred. The Company shall, at its election, pay the Non-Registration Fee
      with
      cash or by issuing the Holders additional shares of Series B Preferred Stock;
      provided, that the Common Stock into which such Series B Preferred Stock is
      convertible will thereafter become classified as Registrable Securities
      hereunder. Each share of Preferred Stock so issued will be deemed to have a
      value equal to the Fair Market Value (as defined below) of the number of shares
      of Common Stock into which such share of Preferred Stock is convertible,
      measured from the first day of the calendar month in which payment occurs.
      Notwithstanding the foregoing, in no event shall the aggregate amount of the
      Non-Registration Fee exceed $30,000,000.
      The
“Fair
      Market Value”
of
      a
      share of Common Stock will be determined as follows: 

     

    
      
        
        

      

      
        
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    (A)
      Securities not subject to restrictions on free marketability covered by clause
      (B) below:

     

    (1) if
      traded
      on a securities exchange or through the NASDAQ, the value shall be deemed to
      be
      the average of the closing prices of the securities on such quotation system
      over the thirty (30) trading day period ending three (3) trading days prior
      to
      the date of measurement;

     

    (2) if
      actively traded over-the-counter, the value shall be deemed to be the average
      of
      the closing bid or sale prices (whichever is applicable) over the thirty (30)
      trading day period ending three (3) trading days prior to the date of
      measurement; and

     

    (3) if
      there
      is no active public market, the value shall be the fair market value thereof,
      as
      determined by the Board of Directors of the Company (the “Board
      of Directors”).

     

    (B)
      The
      method of valuation of securities subject to restrictions on free marketability
      (other than restrictions arising solely by virtue of a shareholder’s status as
      an Affiliate or former Affiliate) shall be to effectuate an appropriate discount
      from the market value, as determined by clause (A)(1), (2) or (3), so as to
      reflect the approximate fair market value thereof, as determined by the Board
      of
      Directors.

     

    (C)
      The
      holders of at least a majority of the Registrable Securities shall have the
      right to challenge any determination by the Board of Directors of fair market
      value pursuant hereto, in which case the determination of fair market value
      shall be made by an independent appraiser selected jointly by the Board of
      Directors and the challenging parties, the cost of such appraisal to be borne
      equally by the Company and the challenging parties. 

    

    
      
        
        

      

      
        
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    8.10 Restrictions
      on Transfer of Section 8 Rights and Obligations.
      In
      addition to the requirements of Section 8.2 hereof, the rights and obligations
      of a Holder under this Section 8 may be transferred or assigned by a Holder
      only
      (i) to a transferee or assignee of not less than 10% of the Offered Securities
      or 10% of the Conversion Shares or (ii) by a Holder (A) that is a
      partnership to its partners or former partners in accordance with partnership
      interests, (B) that is a limited liability company to its members or former
      members in accordance with their interest in the limited liability company,
      (C) that is a corporation to its Affiliates or majority owned subsidiaries
      or (D) that is an individual to the Holder’s family member or trust for the
      benefit of Holder or his or her family members or an entity whose equity owners
      consist solely of the Holder and his or her family members (each, a
“Permitted
      Transferee”);
      provided
      that in
      all instances (x) the Company is given written notice prior to said transfer
      or
      assignment, stating the name and address of the transferee or assignee and
      identifying the Registrable Securities that are intended to be transferred
      or
      assigned and (y) the transferee or assignee of such rights delivers to the
      Company, in a form reasonably acceptable to the Company, an agreement evidencing
      the assumption of all of the rights and obligations of such Holder under this
      Agreement, including the obligations set forth in Section 10.2, if applicable
      to
      the transferred Registrable Securities, and Section 10.1. 

     

    SECTION
      9. TAX
      REPORTING COVENANT. The
      parties agree that the Offered Securities will be treated as other than
      preferred stock for purposes of Internal Revenue Code of 1986, as amended,
      Section 305 (“IRC
      305”).
      Accordingly, the parties agree that no amount shall be currently includable
      in
      the income of a Holder by reason of IRC 305. The parties agree to report the
      tax
      consequences of the Series B Preferred Stock consistent with this
      treatment.

     

    SECTION
      10. COVENANTS OF THE PURCHASER AND HOLDERS.

     

    10.1 Prohibition
      on Use of Insider Information.
      The
      Purchaser and each Holder understands that federal and state securities laws
      prohibit trading in the Company’s securities while such Purchaser or Holder is
      in the possession of “material nonpublic information” concerning the Company
      and/or its Affiliates. Each Purchaser represents that it has been advised by
      its
      counsel of such laws and the consequences of breaking such laws. Each Purchaser
      and each Holder covenants not to enter into any transactions that would violate
      applicable securities laws.

     

    10.2 Lock-up
      Period.
      The
      Purchaser and each Holder hereby agrees that from the Closing Date until the
      date that is fifteen months following the Closing Date such Holder will not
      offer, sell, contract to sell, pledge or otherwise dispose of, any shares of
      Series B Preferred Stock, any shares of the Company’s Common Stock or any other
      securities convertible into or exchangeable or exercisable for any shares of
      Common Stock (collectively, the “Securities”),
      enter
      into a transaction which would have the same effect, or enter into any swap,
      hedge or other arrangement that transfers, in whole or in part, any of the
      economic consequences of ownership of the Securities, whether any such
      aforementioned transaction is to be settled by delivery of the Securities or
      other securities, in cash or otherwise, or publicly disclose the intention
      to
      make any such offer, sale, pledge or disposition (other than actions taken
      by
      the Holders in connection with the filing of the Registration Statement(s)
      by
      the Company), or to enter into any such transaction, swap, hedge or other
      arrangement, without, in each case, the prior written consent of the Company.
      The provisions of the foregoing sentence (w) shall not apply to permitted
      transfers pursuant to Section 8.10 or the transfer of the shares of Series
      A
      Preferred Stock to the Company as contemplated by this Agreement, (x) shall
      not
      apply to transactions relating to Securities acquired (i) by the Holders prior
      to the execution of this Agreement (other than shares of Series A Preferred
      Stock), (ii) by the Holders in the open market after the date of this Agreement,
      (y) shall expire with respect to (A) all but 25,172 of the Offered Securities
      purchased by the Purchaser in exchange for the Purchaser’s transfer of its
      shares of Series A Preferred Stock to the Company on the Closing Date (the
      “Exchange
      Shares”)
      and
      any Registrable Securities attributable to such number of Offered Securities
      on
      the Closing Date, (B) 25,172 of the Exchange Shares and any Registrable
      Securities attributable to such number of Offered Securities on December 31,
      2006, (C) 33,333.34 of the Offered Securities purchased by the Purchaser and
      any
      Registrable Securities attributable to such number of Offered Securities on
      the
      date that is nine months following the Closing Date and (D) 33,333.33 of the
      Offered Securities purchased by the Purchaser and any Registrable Securities
      attributable to such number of Offered Securities on each of the date that
      is
      twelve months following the Closing Date and fifteen months following the
      Closing Date and (z) shall expire in its entirety upon the earliest to
      occur of (1) a Liquidation (as such term is defined in the Articles of Amendment
      to the Articles of Incorporation ), (2) an Automatic Conversion Date (as such
      term is defined in the Articles of Amendment to the Articles of Incorporation
      ),
      or (3) the date Purchaser gives the Company (and the Company’s transfer agent,
      in Purchaser’s sole discretion) notice that it has reasonably and in good faith
      concluded that a representation or warranty made by the Company herein or in
      any
      certificate delivered at the Closing Date was materially untrue on the date
      such
      representation or warranty was made by the Company and that such breach has
      or
      will result in at least a 20% decline in the value of Purchaser’s investment in
      the Company. 

     

    
      
        
        

      

      
        
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    SECTION
      11. TERMINATION

     

    11.1 This
      Agreement may be terminated at any time prior to the Closing Date only
      by: 

     

    (a) the
      mutual written consent of the Company and the Purchaser;

     

    (b) either
      the Company or the Purchaser if the transactions contemplated by this Agreement
      shall not have been consummated by October 31, 2006; provided, however, that
      the
      right to terminate this Agreement under this Section 11.1(b) shall not be
      available to any party whose failure to fulfill any obligation under this
      Agreement has been the primary cause of the failure of the transactions
      contemplated by this Agreement to occur on or before such date; 

     

    (c) either
      the Company or the Purchaser if, at the Shareholders Meeting, the Required
      Vote
      is not obtained;

     

    
      
        
        

      

      
        
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    (d) the
      Purchaser, if the Purchaser has provided the Company notice of a Material
      Adverse Effect pursuant to Section 6.6 and such Material Adverse Effect is
      not
      cured within 30 days after written notice thereof;

     

    (e) by
      the
      Purchaser if (i) the Board of Directors shall have withdrawn, modified or
      changed its recommendation that the shareholders of the Company approve the
      matters to be considered at the Shareholders Meeting, (ii) the Board of
      Directors shall have revoked its approval of the transactions contemplated
      by
      this Agreement, (iii) the Company takes any of the actions described in clauses
      (x) or (y) in Section 4.9(b) after the seven-day period described in such
      Section 4.9(b), (iv) the Company breaches Section 4.1, 4.5, 4.6 or 4.9 (other
      than Section 4.9(a)(i)) in a manner that could have a Material Adverse Effect
      on
      the Company’s ability to consummate the transactions contemplated hereby and, if
      such breach is capable of being cured, such breach is not cured within fifteen
      (15) days after written notice thereof or (v) the Company breaches Section
      4.9(a)(i); or

     

    (f) by
      the
      Company if the Board of Directors shall have withdrawn, modified or changed
      its
      recommendation that the shareholders of the Company approve the matters to
      be
      considered as a result of a Superior Proposal.

     

    The
      party
      or parties desiring to terminate this Agreement pursuant to any of clauses
      (a)
      through (f) above shall give written notice of such termination to the other
      parties.

     

    11.2 Effect
      of Termination

     

    (a) In
      the
      event of termination of this Agreement by either the Company or the Purchaser
      as
      provided in Section 11.1, all of the provisions of this Agreement shall be
      deemed to terminate except the provisions set forth in this Section 11.2
and
      Section 13 through Section 23.

     

    (b) The
      Company and the Purchaser agree that if this Agreement is terminated pursuant
      to
      Section 11.1(e) of Section 11.1(f), then the Company shall pay the Purchaser
      an
      amount equal to $1,300,000 (in cash by check or wire transfer within two (2)
      business days of such termination) as liquidated damages. In the event that
      such
      payment is not made within such two-day period, the Company will also pay
      Purchaser’s expenses and costs incurred in connection with collecting such
      amount, including legal fees and expenses. The parties agree that the damages
      upon termination of the Agreement in the circumstances referred to in Section
      11.1(e) of Section 11.1(f) are not reasonably ascertainable and the payment
      pursuant to this Section 11.2(b) constitute liquidated damages and not a
      penalty. The Company acknowledges that the agreements contained in this Section
      11.2 are an integral part of the transactions contemplated by this Agreement
      and
      that, without this Section 11.2(b), the Purchaser would not enter into this
      Agreement. Payment of the fee under this Section 11.2(b) will not relieve the
      Company from any breach of this Agreement.

     

    SECTION
      12. EXEMPTION FROM REGISTRATION; LEGEND.
      The
      Offered Securities and the Conversion Shares will be issued under an exemption
      or exemptions from registration under the Securities Act, and are also subject
      to certain rights and obligations set forth herein. Accordingly, the
      certificates evidencing the Offered Securities and any Conversion Shares
      issuable upon the conversion thereof shall, upon issuance, contain a legend,
      substantially in the form as set forth in the Articles of Amendment to the
      Articles of Incorporation .

     

    
      
        
        

      

      
        
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    SECTION
      13. NOTICES.
      All
      communications hereunder will be in writing and, (a) if sent to Purchaser,
      will be mailed, delivered or faxed and confirmed to Oak Investment Partners
      XI,
      Limited Partnership, Attention: David B. Walrod and Virginia Eddington; with
      a
      copy to Hughes & Luce, LLP, 1717 Main Street, Suite 2800, Dallas, Texas
      75201, fax number (214) 939-5849, Attention: Benjamin D. Nelson, (b) if sent
      to
      any Holder, will be mailed, delivered or faxed and confirmed to such Holder’s
      address as set forth on the written notice delivered to the Company pursuant
      to
      Section 8.2(b) of this Agreement, with a copy to Oak Investment Partners XI,
      Limited Partnership, Attention: David B. Walrod and Virginia Eddington; and
      Hughes & Luce, LLP, 1717 Main Street, Suite 2800, Dallas, Texas 75201, fax
      number (214) 939-5849, Attention: Benjamin D. Nelson, and (c) if sent to
      the Company, will be mailed, delivered or faxed and confirmed to it at 777
      Yamato Road, Suite 310, Boca Raton, Florida, 33431, fax number (561) 893-8681,
      Attention: Peter Aronstam, Chief Financial Officer, with a copy to Hunton &
Williams, 1111 Brickell Avenue, 25th
      Floor,
      Miami, FL 33131, fax number (305) 810-2460, Attention: David Wells.

     

    SECTION
      14. EXPENSES. Except
      as
      otherwise set forth herein, the Company, on the one hand, and Purchaser, on
      the
      other hand, are each responsible for its own expenses associated with the
      purchase and sale of the Offered Securities pursuant to the terms of this
      Agreement; provided,
      that,
      regardless of whether the transactions contemplated by this Agreement are
      consummated, the Company will pay (i) any filing fee that may be required in
      connection with the filing of the Notification and Report Forms required under
      the HSR Act, if any are so required, (ii) the reasonable legal fees and expenses
      of Hughes & Luce, LLP; Finn Dixon & Herling and Wilson Sonsini Goodrich
& Rosati P.C.; and (iii) any other reasonable out-of-pocket expenses that
      Purchaser or its Affiliates incur before the Closing Date as a result of
      compliance with Section 4.1 hereof (expenses incurred under (ii) and (iii)
      are
      referred to as the “Purchaser
      Out-of-Pocket Expenses”).
      The
      Purchaser Out-of-Pocket Expenses shall be paid by the Company on the Closing
      Date or, in the event this Agreement is terminated pursuant to Section 11,
      within five business days of the date of termination.

     

    SECTION
      15. AMENDMENT AND WAIVER. Except
      as
      otherwise expressly provided, this Agreement may be amended, waived, discharged
      or terminated only upon the written consent of the Company and the Holders
      of a
      majority of the Registrable Securities then outstanding. For purposes of
      determining whether a majority of the Registrable Securities then outstanding
      have provided the consent required by the preceding paragraph, all outstanding
      shares of Series B Preferred Stock will be deemed to have been converted into
      Registrable Securities in accordance with the provisions of the Articles of
      Amendment. Each such amendment, waiver, discharge or termination effected in
      accordance with this paragraph shall be binding upon each Holder and each future
      holder of all such securities of Holder. Each Holder acknowledges that by the
      operation of this paragraph, the Holders of a majority of the Registrable
      Securities (assuming conversion of all outstanding shares of Series B Preferred
      Stock) will have the right and power to diminish or eliminate all rights of
      such
      Holder under this Agreement.

     

    
      
        
        

      

      
        
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    SECTION
      16. SUCCESSORS.
      This
      Agreement will inure to the benefit of and be binding upon the parties hereto
      and their respective successors and no other person will have any right or
      obligation hereunder.

     

    SECTION
      17. COUNTERPARTS.
      This
      Agreement may be executed in any number of counterparts, each of which shall
      be
      deemed to be an original, but all such counterparts shall together constitute
      one and the same Agreement.

     

    SECTION
      18. SURVIVAL.
      The
      representations, warranties, covenants and agreements made in this Agreement
      shall survive any investigation made by any party hereto and the closing of
      the
      transactions contemplated hereby.

     

    SECTION
      19. HEADINGS.  The
      headings used herein
      are for
      reference only and shall not affect the construction of this
      Agreement. 

     

    SECTION
      20. SEVERABILITY. The
      parties hereby agree that each provision herein shall be treated as a separate
      and independent clause, and the unenforceability of any one clause shall in
      no
      way impair the enforceability of any of the other clauses herein. 

     

    SECTION
      21. APPLICABLE LAW
      AND VENUE.
      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 laws. Any
      dispute under this Agreement that is not settled by mutual consent shall be
      finally adjudicated by any federal or state court sitting in Miami-Dade County,
      Florida, and each party consents to the exclusive jurisdiction of such courts
      (or any appellate court therefrom) over any such dispute. Each party further
      consents to personal jurisdiction in the courts mentioned in the prior sentence.
      In the event that any suit or action is instituted to enforce any provision
      in
      this Agreement, the prevailing party in such dispute shall be entitled to
      recover from the losing party all fees, costs and expenses of enforcing any
      right of such prevailing party under or with respect to this Agreement,
      including without limitation, such reasonable fees and expenses of attorneys
      and
      accountants, which shall include, without limitation, all fees, costs and
      expenses of appeals.

     

    SECTION
      22. ENTIRE AGREEMENT. This
      Agreement and the agreements contemplated hereby constitute the entire agreement
      and supersedes all prior agreements and understandings, both written and oral,
      among the parties with respect to the subject matter hereof, other than the
      confidentiality agreements entered into by Parent and the Company in connection
      with the transactions contemplated hereby, which shall survive the execution
      and
      delivery of this Agreement. The provisions of this Agreement shall supercede
      and
      replace any provisions of the Preferred Stock Purchase Agreement, dated as
      of
      September 13, 2004, by and between the Company and the Purchaser (along with
      any
      amendments thereto) (the “Series
      A Purchase Agreement”);
      provided, however, all provisions of the Series A Purchase Agreement shall
      remain in full force and effect until the Closing, at which time the Series
      A
      Purchase Agreement shall be automatically terminated and of no further force
      and
      effect. If this Agreement is terminated, the Series A Purchase Agreement will
      remain in full force and effect.

     

    
      
        
        

      

      
        
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    SECTION
      23. WAIVER OF JURY TRIAL. EACH
      OF
      THE COMPANY AND THE PURCHASER HEREBY IRREVOCABLY WAIVES ALL RIGHTS TO TRIAL
      BY
      JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT,
      TORT
      OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT, OR THE TRANSACTIONS
      CONTEMPLATED HEREBY OR THE ACTIONS OF THE COMPANY OR THE PURCHASER IN THE
      NEGOTIATION, ADMINISTRATION, PERFORMANCE AND ENFORCEMENT OF THIS
      AGREEMENT.

     

     

    [Signature
      Page Follows]

     

    
      
        
        

      

      
        
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    In
      Witness Whereof, this
      Agreement is entered into by the undersigned parties as of the date first
      written above.

     

    
      	 	 	 
	 	Very truly yours,
	 	 
	 	AIRSPAN
              NETWORKS, INC.
	 
 	 
 	 
 
	 	By:  	/s/ Eric
              Stonestrom
	 	
              
Name:
              Eric Stonestrom
	 	Title:
              President and Chief Executive Officer

    

     

     

    OAK
      INVESTMENT PARTNERS XI, LIMITED

    PARTNERSHIP

     

    
      	 	 	 	 
	/s/ David
              B.
              Walrod	 	 	 
	
              
David
              B. Walrod	 	 	
            
	
              Managing
                Member of Oak Associates XI, LLC

              The
                General Partner of Oak Investments Partners 

              XI,
                Limited Partnership

            	 	 	 

    

    

     

    
      
        
        

      

      
        
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    EXHIBIT
      A

     

    FORM
      OF ARTICLES OF AMENDMENT

     

     

    
      
        
        

      

      
        

          PREFERRED
            STOCK PURCHASE AGREEMENT

        

        
          

        

      

      
        
        

      

    

     

    
      EXHIBIT
        A

      

      ARTICLES
        OF AMENDMENT 

      to
        the 

      ARTICLES
        OF INCORPORATION 

      of
        

      AIRSPAN
        NETWORKS, INC. 

      

      I,
        Peter
        Aronstam, Chief Financial Officer of AIRSPAN
        NETWORKS, INC.,
        a
        corporation organized and existing under the laws of the State of Washington
        (the “Corporation”),
        in
        accordance with the provisions of Section 23B.06.010 of the Washington Business
        Corporation Act, DO HEREBY CERTIFY as follows: 

      

      1. The
        Board
        of Directors of the Corporation (the “Board
        of Directors”)
        previously designated Seventy Four Thousand Two Hundred (74,200) shares of
        the
        authorized and unissued Preferred Stock of the Corporation as Series A Preferred
        Stock, par
        value
        $0.0001 per share (the “Series
        A Preferred Stock”).
        The
        Corporation has previously issued 73,000 shares of Series A Preferred Stock.
        Pursuant to that certain Preferred Stock Purchase Agreement (the “Stock
        Purchase Agreement”),
        dated
        as of July 28, 2006, by and between the Corporation and Oak Investment Partners
        XI, Limited Partnership, upon the issuance of the Series B Preferred Stock
        at
        the closing (the “Closing”)
        of the
        Stock Purchase Agreement, all of the issued and outstanding shares of Series
        A
        Preferred Stock will be acquired by the Corporation and no shares of Series
        A
        Preferred Stock will be issued and outstanding. 

      

      2. The
        transactions contemplated by the Purchase Agreement have been approved by
        (i)
        the holder of all of the outstanding shares of the Series A Preferred Stock,
        (ii) the holders of a majority of the total votes cast in person or by proxy
        at
        a special meeting of the Company’s shareholders held on September [___],
        2006
        (the “Shareholders
        Meeting”)
        and
        (iii) the
        holders of a majority of the total votes cast in person or by proxy at the
        Shareholders Meeting, excluding votes cast by Oak
        Investment Partners XI, Limited Partnership.

      

      3. Pursuant
        to the authority conferred upon the Board of Directors by the Articles of
        Incorporation of the Corporation and by Sections 23B.06.010 and 23B.06.020
        of
        the WBCA, effective as of August [____],
        2006,
        the Board of Directors adopted a resolution, which resolution was approved
        by
        the holder of all the outstanding shares of Series A Preferred Stock, amending
        the Articles of Incorporation to create a series of shares of convertible
        preferred stock, Series B, designated as “Series
        B Preferred Stock”
as
        follows: 

      

      “RESOLVED,
        that
        pursuant to the authority vested in the Board of Directors of Airspan Networks,
        Inc., a corporation organized and existing under the laws of the State of
        Washington (the “Corporation”),
        by
        the Articles of Incorporation of the Corporation (the “Articles
        of Incorporation”),
        the
        Board of Directors does hereby amend the Articles of Incorporation to add
        new
        Section 4.13 to provide for the authorization and issuance of a series of
        convertible preferred stock, Series B, par value $0.0001 per share, of the
        Corporation, to be designated “Series
        B Preferred Stock,”
        initially consisting of 250,000 shares with the designations, powers,
        preferences, and relative participating, optional, or other special rights,
        and
        the qualifications, limitations, and restrictions thereof, as follows:

       

      4.13 SERIES
        B PREFERRED STOCK

      

      1. Designation
        and Rank

      

      (a)
         250,000
        shares of the preferred stock of the Corporation, par value $0.0001 per share,
        shall be designated and known as the “Series B Preferred Stock.” 

      

      (b)
         The
        Series B Preferred Stock shall rank senior and prior to the common stock,
        par
        value $0.0003 per share, of the Corporation (the “Common
        Stock”),
        and
        all other classes or series of the capital stock (other than preferred stock)
        of
        the Corporation (now or hereafter authorized or issued), with respect to
        the
        payment of any dividends, the conversion rights set forth herein and any
        payment
        upon liquidation or redemption. The Corporation may not issue any additional
        classes or series of preferred stock with dividend, liquidation, redemption
        or
        conversion rights or right of payment of any kind that is senior to the Series
        B
        Preferred Stock, except pursuant to Section 12; provided,
        however,
        that the
        foregoing shall not, in any way, prevent the Corporation from unilaterally
        amending the Articles of Incorporation, authorizing and otherwise designating
        additional shares of Series B Preferred Stock and issuing additional shares
        of
        Series B Preferred Stock to the then existing holders of the Series B Preferred
        Stock and/or Registrable Securities (as such term is defined in the Preferred
        Stock Purchase Agreement, dated July 28, 2006, between the Corporation and
        the
        purchaser of the Series B Preferred Stock, the “Purchase
        Agreement,”
        “Registrable
        Securities”),
        but
        only to the extent that such shares of Series B Preferred Stock are being
        issued
        in satisfaction of Non-Registration Fees (as such term is defined in the
        Purchase Agreement, “Non-Registration
        Fees”).
        

      

      
        
           

        

        
          1

          
            

          

        

        
           

        

      

       

      2. Dividend
        Rights

      

      From
        and
        after the date hereof, when and if the Board of Directors declares a dividend
        or
        distribution payable with respect to the then-outstanding shares of Common
        Stock
        (other than in additional shares of Common Stock or Common Stock Equivalents
        (as
        defined in Section 4(e)(i) below), the
        holders of the Series B Preferred Stock shall be entitled to the
        amount of dividends per share in the same form as such Common Stock dividends
        that would be payable on the largest number of whole shares of Common Stock
        into
        which a holder’s aggregate shares of Series B Preferred Stock could then be
        converted pursuant to Section 4 hereof (such number to be determined as of
        the
        record date for the determination of holders of Common Stock entitled to
        receive
        such dividend). 

      

      3. Liquidation
        Rights

      

      (a)
         Liquidation
        Events.
        The
        occurrence of any of the following events shall be deemed a “Liquidation”:
        (i)
        any liquidation, dissolution, or winding-up of the affairs of the Corporation,
        or (ii) unless, at the request of the Corporation, the holders of at least
        a
        majority of the Series B Preferred Stock then outstanding determine otherwise,
        (W) the merger, reorganization or consolidation of the Corporation (or any
        subsidiary or subsidiaries of the Corporation the assets of which constitute
        all
        or substantially all the assets of the business of the Corporation and its
        subsidiaries taken as a whole) into or with another entity, unless, as a
        result
        of such transaction the holders of the Corporation’s outstanding securities
        immediately preceding such merger, reorganization or consolidation own (in
        approximately the same proportions, relative to each other, as immediately
        before such transaction) at least a majority of the voting securities of
        the
        surviving or resulting entity or the direct or indirect parent entity thereof
        (solely by virtue of their shares or other securities of the Corporation
        or the
        consideration received thereof in such a transaction), (X) the sale, transfer
        or
        lease (but not including a transfer or lease by pledge or mortgage to a bona
        fide lender) of all or substantially all the assets of the Corporation, whether
        pursuant to a single transaction or a series of related transactions (which
        assets shall include for these purposes two thirds (66-2/3%) or more of the
        outstanding voting interests of such of the Corporation’s subsidiaries the
        assets of which constitute all or substantially all the assets of the
        Corporation and its subsidiaries taken as a whole), (Y) the sale, transfer
        or
        lease (but not including a transfer or lease by pledge or mortgage to a bona
        fide lender), whether in a single transaction or pursuant to a series of
        related
        transactions, of all or substantially all the assets of any of the Corporation’s
        subsidiaries the assets of which constitute all or substantially all of the
        assets of the Corporation and such subsidiaries taken as a whole, or the
        liquidation, dissolution or winding up of such of the Corporation’s subsidiaries
        the assets of which constitute all or substantially all of the assets of
        the
        Corporation and such subsidiaries taken as a whole or (Z) any transaction
        or
        series of related transactions in which securities of the Corporation
        representing 50% or more of the combined voting power of the Corporation’s then
        outstanding voting securities are acquired by any person, entity or group
        (as
        the term group is defined and interpreted under Section 13(d)(3) of the Exchange
        Act of 1934, as amended). 

      

      
        
           

        

        
          2

          
            

          

        

        
           

        

         

      

      (b)
         Liquidation
        Preference. 

      

      (i)
         In
        the
        event of any Liquidation, whether voluntary or involuntary, before any payment
        of cash or distribution of other property shall be made to the holders of
        Common
        Stock, or any other class or series of stock subordinate in liquidation
        preference to the Series B Preferred Stock, the holders of the Series B
        Preferred Stock shall be entitled to receive out of the assets of the
        Corporation legally available for distribution to its stockholders, with
        respect
        to each share of Series B Preferred Stock held by such holder, $290.00 (as
        appropriately adjusted for any combinations, divisions, or similar
        recapitalizations with respect to the Series B Preferred Stock after the
        Original Issue Date (as defined below), the “Original
        Issue Price”)
        and
        all accumulated or accrued and unpaid dividends thereon (collectively, the
        “Series
        B Liquidation Preference”).
        

      

      (ii)
         If,
        upon
        any Liquidation, the assets of the Corporation available for distribution
        to its
        stockholders are insufficient to pay the holders of the Series B Preferred
        Stock
        the full amounts to which they are entitled pursuant to clause (b)(i) above,
        the
        holders of the Series B Preferred Stock shall share pro
        rata
        in any
        distribution of assets in proportion to the respective amounts which would
        be
        payable to the holders of the Series B Preferred Stock in respect of the
        shares
        held by them if all amounts payable to them in respect of such were paid
        in full
        pursuant to clause (b)(i) above. 

      

      (iii)
         After
        the
        distributions described in clause (b)(i) or (b)(ii) above have been paid,
        subject to the rights of any other class or series of capital stock of the
        Corporation that may from time to time come into existence, the remaining
        assets
        of the Corporation available for distribution to stockholders shall be
        distributed among the holders of Common Stock pro
        rata
        based on
        the number of shares of Common Stock held by each. 

      

      (iv)
         If
        the
        holders of the Series B Preferred Stock would receive a greater return in
        a
        Liquidation by converting such holders’ shares of Series B Preferred Stock into
        Common Stock (in the good faith judgment of the Board of Directors, unless
        holders of a majority of the outstanding shares of Series B Preferred Stock
        object, in which case the conclusion of such holders will govern), then such
        shares will be deemed to be automatically converted into Common Stock
        immediately before the effectiveness of such Liquidation. 

      

      (c)
         Non-Cash
        Distributions.
        If any
        distribution to be made pursuant to this Section 3 is to be paid other than
        in
        cash or Common Stock or Common Stock Equivalents, the value of such distribution
        will be deemed its fair market value as determined in good faith by the Board
        of
        Directors. Any securities shall be valued as follows: 

      

      (i)
         Securities
        not subject to restrictions on free marketability covered by clause (ii)
        below:

      

       

      (1)
         if
        traded
        on a securities exchange, the value shall be deemed to be the average of
        the
        closing prices of the securities on such quotation system over the thirty
        (30)
        trading day period ending three (3) trading days prior to the occurrence
        of the
        Liquidation; 

      

      (2) if
        actively traded over-the-counter, the value shall be deemed to be the average
        of
        the closing bid or sale prices (whichever is applicable) over the thirty
        (30)
        trading day period ending three (3) trading days prior to the occurrence
        of the
        Liquidation; and 

      

      (3)
         if
        there
        is no active public market, the value shall be the fair market value thereof,
        as
        determined by the Board of Directors. 

      

      (ii)
         The
        method of valuation of securities subject to restrictions on free marketability
        (other than restrictions arising solely by virtue of a stockholder’s status as
        an affiliate or former affiliate) shall be to effectuate an appropriate discount
        from the market value, as determined by clause (i)(1), (2) or (3) of this
        Section 3(c), so as to reflect the approximate fair market value thereof,
        as
        determined by the Board of Directors. 

      

      
        
           

        

        
          3

          
            

          

        

        
           

        

         

      

      (iii)
         The
        holders of at least a majority of the outstanding Series B Preferred Stock
        shall
        have the right to challenge any determination by the Board of Directors of
        fair
        market value pursuant to this Section 3(c), in which case the determination
        of
        fair market value shall be made by an independent appraiser selected jointly
        by
        the Board of Directors and the challenging parties, the cost of such appraisal
        to be borne equally by the Corporation and the challenging parties.

      

      4. Conversion
        Rights

      

      The
        holders of the Series B Preferred Stock shall have conversion rights as follows
        (the “Conversion
        Right”):
        

      

      (a)
         Conversion
        Price.
        The
“Conversion
        Price”
shall
        initially be $2.90 per share and shall be subject to adjustment as set forth
        below in Sections 4(e) and 4(f).

      

      (b)
         Automatic
        Conversion.
        If the
        closing price for the shares of the Corporation’s Common Stock (trading on the
        Nasdaq Global Market or other national exchange or market) exceeds $9.00
        per
        share (as adjusted for events described in Sections 4(e)(i), 4(e)(ii) and
        4(e)(iii) below) for any thirty consecutive trading day period that begins
        after
        [insert closing date], 2008, then, upon such occurrence, each share of Series
        B
        Preferred Stock shall be automatically converted into such number of shares
        of
        fully paid and non-assessable shares of Common Stock as is determined by
        dividing (x) the Original Issue Price by (y) the Conversion Price then in
        effect
        (an “Automatic
        Conversion”).
        The
        date of such conversion is herein referred to as the “Automatic
        Conversion Date.”
        

      

      (c)
         Optional
        Conversion.
        Each of
        the holders of the Series B Preferred Stock shall have the right, at any
        time,
        to convert the shares of Series B Preferred Stock held by such holder into
        that
        number of shares of Common Stock into which such shares are convertible pursuant
        to Section 4(b) (an “Optional
        Conversion”).
        In
        the event of any Optional Conversion, the date of such conversion shall be
        referred to as the “Optional
        Conversion Date.”
        

      

      (d)
         Mechanics
        of Conversion.
        Before
        any holder of Series B Preferred Stock shall be entitled to convert the same
        into full shares of Common Stock, and to receive certificates therefor, it
        shall
        either (A) surrender the subject Series B Preferred Stock certificate or
        certificates therefor, duly endorsed, at the office of the Corporation or
        of any
        transfer agent for the Series B Preferred Stock or (B) notify the Corporation
        or
        its transfer agent that such certificates have been lost, stolen or destroyed
        and execute an agreement reasonably satisfactory to the Corporation to indemnify
        the Corporation from any loss incurred by it in connection with such
        certificates, and shall give written notice to the Corporation at such office
        that he elects to convert the same; provided,
        however,
        that on
        an Automatic Conversion Date, the outstanding shares of Series B Preferred
        Stock
        shall be converted automatically without any further action by the holders
        of
        such shares and whether or not the certificates representing such shares
        are
        surrendered to the Corporation or its transfer agent; provided
        further,
        however, that the Corporation shall not be obligated to issue certificates
        evidencing the shares of Common Stock issuable in connection therewith unless
        either the certificates evidencing such shares of Series B Preferred Stock
        are
        delivered to the Corporation or its transfer agent as provided above, or
        the
        holder notifies the Corporation or its transfer agent that such certificates
        have been lost, stolen or destroyed and executes an agreement reasonably
        satisfactory to the Corporation to indemnify the Corporation from any loss
        incurred by it in connection with such certificates. On an Automatic Conversion
        Date, each holder of record of shares of Series B Preferred Stock shall be
        deemed to be the holder of record of the Common Stock issuable upon such
        conversion, notwithstanding that the certificates representing such shares
        of
        Series B Preferred Stock shall not have been surrendered at the office of
        the
        Corporation, that notice from the Corporation shall not have been received
        by
        any holder of record of shares of Series B Preferred Stock, or that the
        certificates evidencing such shares of Common Stock shall not then be actually
        delivered to such holder. 

      

      
        
           

        

        
          4

          
            

          

        

        
           

        

         

      

      The
        Corporation shall, as soon as practicable after such delivery, or after such
        agreement and indemnification, issue and deliver at such office to such holder
        of Series B Preferred Stock, a certificate or certificates for the number
        of
        shares of Common Stock to which he shall be entitled as aforesaid and a check
        payable to the holder in the amount of any cash amounts payable as the result
        of
        a conversion into fractional shares of Common Stock in accordance with Section
        8, plus any declared and unpaid dividends on the converted Series B Preferred
        Stock. A conversion, other than an Automatic Conversion, shall be deemed
        to have
        been made immediately prior to the close of business on the date of such
        surrender of the shares of Series B Preferred Stock to be converted (or on
        such
        later date requested by the holder), and the person or persons entitled to
        receive the shares of Common Stock issuable upon such conversion shall be
        treated for all purposes as the record holder or holders of such shares of
        Common Stock on such date; provided,
        however,
        that if
        the conversion is in connection with an underwritten offer of securities
        registered pursuant to the Securities Act of 1933, as amended, or a merger,
        sale, financing, or liquidation of the Corporation or other event, the
        conversion may, at the option of any holder tendering Series B Preferred
        Stock
        for conversion, be conditioned upon the closing of such transaction or upon
        the
        occurrence of such event, in which case the person(s) entitled to receive
        the
        Common Stock issuable upon such conversion of the Series B Preferred Stock
        shall
        not be deemed to have converted such Series B Preferred Stock until immediately
        prior to the closing of such transaction or the occurrence of such event.
        

      

      (e)
         Certain
        Adjustments.
        The
        following adjustments shall be made to the Conversion Price: 

      

         (i)
         Adjustment
        for Common Stock Dividends and Distributions.
        If, at
        any time after the original issue date of the Series B Preferred Stock (the
        “Original
        Issue Date”),
        the
        Corporation makes, or fixes a record date for the determination of holders
        of
        Common Stock entitled to receive, a dividend or other distribution payable
        in
        additional shares of Common Stock or Common Stock Equivalents, in each such
        event the Conversion Price that is then in effect shall be appropriately
        decreased as of the time of such issuance or, in the event such record date
        is
        fixed, as of the close of business on such record date; provided,
        however,
        that if
        such record date is fixed and such dividend is not fully paid or if such
        distribution is not fully made on the date fixed therefor, the Conversion
        Price
        shall be recomputed accordingly as of the close of business on such record
        date
        and thereafter the Conversion Price shall be adjusted pursuant to this Section
        4(e)(i) to reflect the actual payment of such dividend or distribution.

      

      A
        “Common
        Stock Equivalent”
shall
        mean each share of Common Stock into which securities or property or rights
        are
        convertible, exchangeable or exercisable for or into shares of Common Stock,
        or
        otherwise entitle the holder thereof to receive directly or indirectly, any
        of
        the foregoing. 

      

         (ii)
         Adjustments
        for Stock Splits, Stock Subdivisions and Combinations.
        If, at
        any time after the Original Issue Date, the Corporation subdivides or combines
        the Common Stock, (A) in the case of a subdivision (including a stock split),
        the Conversion Price in effect immediately prior to such event shall be
        proportionately decreased and (B) in the case of a combination (including
        a
        reverse stock split), the Conversion Price in effect immediately prior to
        such
        event shall be proportionately increased. Any adjustment under this Section
        4(e)(ii) shall become effective at the time the subdivision or combination
        becomes effective. 

      

         (iii)
         Adjustments
        for Reclassification, Reorganization and Consolidation.
        In case
        of (A) any reclassification, reorganization, change or conversion of securities
        of the class issuable upon conversion of the Series B Preferred Stock (other
        than a change in par value, or from par value to no par value) into other
        shares
        or securities of the Corporation, or (B) any merger or consolidation of the
        Corporation with or into another entity (other than a Liquidation or a merger
        or
        consolidation with another entity in which the Corporation is the acquiring
        and
        the surviving entity and that does not result in any reclassification or
        change
        of outstanding securities issuable upon conversion of the Series B Preferred
        Stock) each holder of shares of Series B Preferred Stock shall have the right
        to
        receive, in lieu of the shares of Common Stock otherwise issuable upon the
        conversion of its shares of Series B Preferred Stock (and accumulated or
        accrued
        and unpaid dividends then-outstanding thereunder) in accordance with Section
        4(b), the kind and amount of shares of stock and other securities, money
        and
        property receivable upon such reclassification, reorganization, change, merger
        or consolidation upon conversion by a holder of the maximum number of shares
        of
        Common Stock into which such shares of Series B Preferred Stock could have
        been
        converted immediately prior to such reclassification, reorganization, change,
        merger or consolidation, all subject to further adjustment as provided herein
        or
        with respect to such other securities or property by the terms thereof. The
        provisions of this Section 4(e)(iii) shall similarly attach to successive
        reclassifications, reorganizations, changes, mergers and consolidations.
        

      

      
        
           

        

        
          5

          
            

          

        

        
           

        

         

      

      (f) Adjustment
        for Issuances of Additional Shares of Common Stock at Price Below Conversion
        Price.
        To the
        extent that, after the Original Issue Date, (i) the Corporation issues
        Additional Shares of Common Stock (as defined below) and (ii) such issuance
        is
        at an Effective Price (as defined below) per share less than the Conversion
        Price then in effect, then the Conversion Price shall be adjusted by
        multiplying the Conversion Price then in effect by a fraction, the numerator
        of
        which shall be (x) the sum of (A) the number of shares of Common Stock
        (on an as converted, fully diluted basis assuming exercise of all then
        outstanding Options (as defined below) and, thereafter, conversion of all
        then
        outstanding Convertible Securities (as defined below)(a “Fully
        Diluted Basis”))
        outstanding on the record date of such issuance or sale plus (B) the
        quotient obtained by dividing the Total Consideration (as defined below)
        by the
        Conversion Price then in effect, and the denominator of which shall be
        (y) the number of shares of Common Stock (on a Fully Diluted Basis)
        outstanding on the record date of such issuance or sale plus the maximum
        number
        of Additional Shares of Common Stock issued
        by
        the Company or deemed to be issued pursuant to this Section 4(f) in connection
        with such issuance or sale. 

      

      (i)  For
        the
        purpose of making any adjustment required under Section 4(f), the consideration
        received by the Corporation for any issue or sale of securities shall (A)
        to the
        extent it consists of cash, be computed at the net amount of cash received
        by
        the Corporation after deduction of any underwriting or similar commissions,
        compensation or concessions paid or allowed by the Corporation in connection
        with such issue or sale but without deduction of any expenses payable by
        the
        Corporation, (B) to the extent it consists of property other than cash, be
        computed at the fair market value of that property as determined in good
        faith
        by the Board of Directors, and (C) if Additional Shares of Common Stock,
        Convertible Securities or Options are issued or sold together with other
        stock
        or securities or other assets of the Corporation for a consideration which
        covers both, be computed as the portion of the consideration so received
        that
        may be reasonably determined in good faith by the Board of Directors to be
        allocable to such Additional Shares of Common Stock, Convertible Securities
        or
        Options; provided, however, that the holders of at least a majority of the
        outstanding shares of Series B Preferred Stock shall have the right to challenge
        any determination by the Board of Directors of fair market value pursuant
        to
        this Section 4(f)(i), in which case the determination of fair market value
        shall
        be made by an independent appraiser selected jointly by the Board of Directors
        and the challenging parties, the cost of such appraisal to be borne equally
        by
        the Corporation and the challenging parties.

      

      (ii)  For
        the
        purpose of the adjustment required under Section 4(f), if the Corporation
        issues
        or sells (A) stock or other securities convertible into Additional Shares
        of
        Common Stock (such convertible stock or securities being herein referred
        to as
        "Convertible
        Securities")
        or (B)
        rights, warrants or options for the purchase of Additional Shares of Common
        Stock or Convertible Securities (“Options”)
        and if
        the Effective Price of such Additional Shares of Common Stock is less than
        the
        Conversion Price, in each case the Corporation shall be deemed to have issued
        at
        the time of the issuance of such Options or Convertible Securities the maximum
        number of Additional Shares of Common Stock issuable upon exercise or conversion
        thereof and to have received as consideration for the issuance of such shares
        an
        amount equal to the total amount of the consideration, if any, received by
        the
        Corporation for the issuance of such Options or Convertible Securities, plus,
        in
        the case of such Options, the minimum amounts of consideration, if any, payable
        to the Corporation upon the exercise of such Options, plus, in the case of
        Convertible Securities, the minimum amounts of consideration, if any, payable
        to
        the Corporation (other than by cancellation of liabilities or obligations
        evidenced by such Convertible Securities) upon the conversion thereof; provided
        that if in the case of Convertible Securities the minimum amounts of such
        consideration cannot be ascertained, but are a function of antidilution or
        similar protective clauses, the Corporation shall be deemed to have received
        the
        minimum amounts of consideration without reference to such clauses; provided
        further that if the minimum amount of consideration payable to the Corporation,
        or the maximum number of Additional Shares of Common Stock issuable, upon
        the
        exercise or conversion of Options or Convertible Securities is reduced over
        time
        or on the occurrence or non-occurrence of specified events other than by
        reason
        of antidilution adjustments similar to those set forth in this Section 4(f),
        the
        Effective Price shall be recalculated using the figure to which such minimum
        amount of consideration or maximum number of Additional Shares of Common
        Stock
        is reduced; provided further that if the minimum amount of consideration
        payable
        to the Corporation, or the maximum number of Additional Shares of Common
        Stock
        issuable, upon the exercise or conversion of such Options or Convertible
        Securities is subsequently increased, the Effective Price shall be again
        recalculated using the increased minimum amount of consideration payable
        to the
        Corporation, or maximum number of Additional Shares of Common Stock issuable,
        upon the exercise or conversion of such Options or Convertible Securities.
        No
        further adjustment of the Conversion Price, as adjusted upon the issuance
        of
        such Options or Convertible Securities, shall be made as a result of the
        actual
        issuance of Additional Shares of Common Stock on the exercise of any such
        Options or the conversion of any such Convertible Securities. If any such
        Options or the conversion privilege represented by any such Convertible
        Securities shall expire without having been exercised, the Conversion Price,
        as
        adjusted upon the issuance of such Options or Convertible Securities, shall
        be
        readjusted to the Conversion Price which would have been in effect had an
        adjustment been made on the basis that the only Additional Shares of Common
        Stock so issued were the Additional Shares of Common Stock, if any, actually
        issued or sold on the exercise of such Options or rights of conversion of
        such
        Convertible Securities, and such Additional Shares of Common Stock, if any,
        were
        issued or sold for the consideration actually received by the Corporation
        upon
        such exercise, plus the consideration, if any, actually received by the
        Corporation for the granting of all such Options, whether or not exercised,
        plus
        the consideration received for issuing or selling the Convertible Securities
        actually converted, plus the consideration, if any, actually received by
        the
        Corporation (other than by cancellation of liabilities or obligations evidenced
        by such Convertible Securities) on the conversion of such Convertible
        Securities.

      

      
        
           

        

        
          6

          
            

          

        

        
           

        

         

      

      For
        purposes of this Section 4(f), "Additional
        Shares of Common Stock"
        shall
        mean all shares of Common Stock issued by the Company or deemed to be issued
        pursuant to this Section 4(f) after the Original Issue Date, other than (A)
        Common
        Stock issued upon the exercise of Options
        or upon conversion of Convertible Securities outstanding
        as of the Original Issue Date; (2) Common Stock issued upon conversion of
        Series
        B Preferred Stock issued pursuant to the Purchase Agreement or as payment
        of
        Non-Registration Fees; (3) Common Stock issued or issuable as a dividend
        or
        distribution on Preferred Stock or pursuant to any event for which adjustment
        is
        made to the Conversion Price pursuant hereto; (4) Common Stock or other
        securities of the Company issued or issuable in connection with: (i) the
        acquisition of another entity or business by the Corporation by merger, share
        exchange, purchase of substantially all of the assets or other reorganization
        or
        pursuant to a joint venture agreement; or (ii) the acquisition of the
        Corporation by another corporation or business entity by merger, share exchange,
        purchase of substantially all of the assets or other reorganization or pursuant
        to a joint venture agreement, the primary purpose of which is not capital
        raising; (5) up to 5,000,000 shares
        of
        Common Stock and/or Options, and the Common Stock issued or issuable pursuant
        to
        such Options, to employees, officers or directors of, or consultants or advisors
        to the Company or any subsidiary pursuant to stock purchase or equity incentive
        plans or other arrangements that are approved by the Board
        (as
        appropriately adjusted for any combinations, divisions, or similar
        recapitalizations affecting the Common Stock after the Original Issue Date);
        and
        (6) any
        other
        issuances approved by the holders of a majority of the Series B Preferred
        Stock
        then outstanding.

      

      The
        "Effective
        Price"
        of
        Additional Shares of Common Stock shall mean the quotient determined by dividing
        the total number of Additional Shares of Common Stock issued or sold, or
        deemed
        to have been issued or sold by the Company under this Section 4(f), into
        the
        aggregate consideration received, or deemed to have been received by the
        Company
        for such issue under this Section 4(f), for such Additional Shares of Common
        Stock (the “Total
        Consideration”)

       

      
        
           

        

        
          7

          
            

          

        

        
           

        

      

      
        
           

          5.
            Other
            Distributions.

        

      

      

      In
        the
        event the Corporation provides the holders of its Common Stock with
        consideration that is not otherwise addressed in Section 2 or Section 4
        (including, without limitation, declaring a distribution payable in securities,
        assets, cash or evidences of indebtedness issued by other persons or the
        Corporation (excluding cash dividends declared and paid by the Corporation
        out
        of retained earnings and excluding any distribution for which an adjustment
        to
        the Conversion Price occurs pursuant to Section 4(e))), then, in each such
        case,
        the holders of the Series B Preferred Stock shall be entitled to a pro
        rata
        share of
        any such distribution as though such holders were holders of the number of
        shares of Common Stock of the Corporation as though the Series B Preferred
        Stock
        had been converted in whole as of the record date fixed for the determination
        of
        the holders of Common Stock of the Corporation entitled to receive such
        distribution. 

      
         

        6.
          Recapitalizations.
          

      

       

      If
        at any
        time there occurs a recapitalization of the Common Stock (other than a
        Liquidation or a subdivision, combination, or merger or sale of assets provided
        for in Section 4(e)(i)-(iii) hereof) the holders of the Series B Preferred
        Stock
        shall be entitled to receive upon conversion of the Series B Preferred Stock
        the
        number of shares of capital stock or other securities or property of the
        Corporation or otherwise to which a holder of the Common Stock deliverable
        upon
        conversion would have been entitled on such recapitalization. In any such
        case,
        appropriate adjustment shall be made in the application of the provisions
        of
        Section 4 hereof with respect to the rights of the holders of the Series
        B
        Preferred Stock after the recapitalization to the end that the provisions
        of
        Section 4 hereof (including adjustment of the Conversion Price then in effect
        and the number of shares purchasable upon conversion of the Series B Preferred
        Stock) shall be applicable after that event as nearly equivalent as may be
        practicable. 

      
         

        7.
          No
          Impairment. 

      

       

      The
        Corporation will not, by amendment of the Articles of Incorporation or through
        any reorganization, recapitalization, transfer of assets, consolidation,
        merger,
        dissolution, issuance or sale of securities or any other voluntary action,
        avoid
        or seek to avoid the observance or performance of any of the terms to be
        observed or performed hereunder by the Corporation, but will at all times
        in
        good faith assist in the carrying out of all the provisions hereof.

       

      
        8.
          No
          Fractional Shares and Certificate as to Adjustments.

      

       

      (a)
         No
        fractional shares of Common Stock will be issued upon the conversion of any
        share or shares of the Series B Preferred Stock. All shares of Common Stock
        (including fractions thereof) issuable upon conversion of more than one share
        of
        Series B Preferred Stock by a holder shall be aggregated for purposes of
        determining whether the conversion would result in the issuance of any
        fractional share. If, after the aforementioned aggregation, the conversion
        would
        result in the issuance of a fraction of a share of Common Stock, the Corporation
        shall, in lieu of issuing any fractional share, pay the holder otherwise
        entitled to such fraction a sum in cash equal to such fraction multiplied
        by the
        closing price of the Corporation’s Common Stock on the Nasdaq Global Market (or
        any other national securities exchange on which the Common Stock is then
        traded)
        on the day immediately preceding the conversion. All calculations under Section
        4 hereof and this Section 8(a) shall be made to the nearest cent or to the
        nearest share, as the case may be. 

      

      (b)
         Upon
        the
        occurrence of each adjustment or readjustment of the Conversion Price pursuant
        to Section 4 hereof, the Corporation, at its expense, shall promptly compute
        such adjustment or readjustment in accordance with the terms hereof and prepare
        and furnish to each holder of shares of Series B Preferred Stock a certificate
        setting forth such adjustment or readjustment and showing in detail the facts
        upon which such adjustment or readjustment is based. The Corporation shall,
        upon
        the written request at any time of any holder of Series B Preferred Stock,
        use
        its reasonable best efforts to furnish or cause to be furnished to such holder
        a
        like certificate setting forth (i) such adjustment or readjustment, (ii)
        the
        Conversion Price at the time in effect, and (iii) the number of shares of
        Common
        Stock and the amount, if any, of other property which at the time would be
        received upon the conversion of a share of Series B Preferred Stock.

       

      
        
           

        

        
          8

          
            

          

        

        
           

        

      

      
         

        9.
          Reservation
          of Stock Issuable Upon Conversion. 

      

       

        The
        Corporation shall at all times reserve and keep available out of its authorized
        but unissued shares of Common Stock, solely for the purpose of effecting
        the
        conversion of the shares of the Series B Preferred Stock, such number of
        its
        shares of Common Stock that shall from time to time be sufficient to effect
        the
        conversion of all outstanding shares of the Series B Preferred Stock; and
        if at
        any time the number of authorized but unissued shares of Common Stock not
        otherwise reserved for issuance shall not be sufficient to effect the conversion
        of all then outstanding shares of the Series B Preferred Stock, the Corporation
        shall take such corporate action that may, in the opinion of its counsel,
        be
        necessary to increase its authorized but unissued shares of Common Stock
        to such
        number of shares as shall be sufficient for such purposes, including, without
        limitation, engaging in best efforts to obtain the requisite stockholder
        approval of any necessary amendment to its Articles of Incorporation.

       

      
        10.
          Notices.
          

      

       

      Any
        notice required by the provisions hereof to be given to the holders of shares
        of
        Series B Preferred Stock shall be given in writing and shall be deemed to
        have
        been given (i) in the case of personal or hand delivery, on the date of such
        delivery, (ii) in the case of an internationally-recognized overnight delivery
        courier, on the second business day after the date when sent, (iii) in the
        case
        of mailing, on the fifth business day following that day on which the piece
        of
        mail containing such communication is posted and (iv) in the case of facsimile
        transmission, the date of telephone confirmation of receipt. 

      
         

        11.
          Voting
          Rights. 

      

       

      (a) Election
        of Directors.
        

      

      (i) So
        long
        as (i) Oak Investment Partners XI, Limited Partnership (or an affiliated
        fund)
        (the “Initial
        Holder”)
        is the
        holder of at least a majority of the issued and outstanding shares of Series
        B
        Preferred Stock (the “Majority
        Holder”),
        but
        in no event at any time that the Initial Holder is not the Majority Holder,
        (ii)
        as of the record date for determining the shareholders entitled to vote at
        the
        meeting, the number of shares of Common Stock into which the then outstanding
        shares of Series B Preferred Stock would be convertible based on the Conversion
        Price in effect represents at least fifteen percent (15%) of the total issued
        and outstanding shares of Common Stock of the Corporation (assuming conversion
        of all shares of Series B Preferred Stock, but without giving effect to
        conversion or exercise of any other outstanding Convertible Securities or
        Options or warrants) and (iii) the Majority Holder has not sent the Corporation
        the irrevocable notice identified in Section 11(a)(viii) below, in the election
        of directors of the Corporation, the holders of the Series B Preferred, voting
        separately as a single series to the exclusion of all other classes and series
        of the Corporation's capital stock and with each share of Series B Preferred
        Stock entitled to one vote, shall be entitled at an annual or special meeting
        of
        the shareholders called for such purpose to elect one director to serve as
        a
        member of the Corporation's Board of Directors (the “Series
        B Director”),
        until
        his successor is duly elected by the holders of the Series B Preferred, subject
        to prior death, resignation, retirement, disqualification, or removal or
        termination of term of office in accordance with this Section 11(a). The
        Series
        B Director so elected shall be in addition to the directors elected by the
        holders of the Common Stock of the Corporation, and shall in accordance with
        the
        Corporation's bylaws increase the maximum number of directors otherwise
        permitted pursuant to the Corporation's bylaws.

      

      (ii) Initial
        Appointment.
        Upon
        the Original Issue Date, the vacancy resulting from the directorship newly
        created hereby shall be filled by a vote of the other directors on the Board
        of
        Directors as directed by the Initial Holder.

      

      
        
           

        

        
          9

          
            

          

        

        
           

        

         

      

      (ii) Subsequent
        Designation and Election.
        At any
        time that the holders of Series B Preferred are entitled to elect a Series
        B
        Director pursuant to Section 11(a)(i) above, the individual designated by
        the
        Majority Holder shall be elected by the holders of the Series B Preferred
        as the
        Series B Director and all holders of Series B Preferred shall vote their
        Shares
        in such a manner to effect the election of the Series B Director designed
        by the
        Majority Holders.

      

      (iii)  Resignation;
        Termination of Term; Removal; and Vacancies. 

      

      (A) Resignation.
        The
        Series B Director may resign from the Board of Directors at any time by giving
        written notice to the Corporation at its principal executive office. The
        resignation is effective without acceptance when the notice is given to the
        Corporation, unless a later effective time is specified in the
        notice.

      

      (B)  Termination
        of Term of Office.
        So long
        as the Initial Holder is the Majority Holder, the term of office of the Series
        B
        Director may be terminated only by the Majority Holder. The term of office
        of
        the Series B Director shall automatically terminate on the date on which
        the
        Initial Holder is no longer the Majority Holder.

      

      (C)  Removal.
        The
        Series B Director may be removed only by (I) a written direction of removal
        delivered to the Corporation by the Majority Holder, (II)
        as
        set forth in Section 11(a)(viii) or (III) death or resignation (by written
        or
        email notice to the Secretary of the Corporation) of the Series B
        Director.

      

      (E) Vacancies.
        In the
        event of a vacancy on the Board resulting from the death, disqualification,
        resignation, retirement or termination of term of office of the Series B
        Director designated by the Majority Holder, the resulting vacancy shall be
        filled by a representative designated in writing to the Corporation by the
        Majority Holder, until the next annual or special meeting of the shareholders
        (and at such meeting, such representative, or another representative designated
        by the Majority Holder, will be elected to the Board in the manner described
        in
        this Section 11(a)). If the Majority Holder fails or declines to fill the
        vacancy, then the directorship shall remain open until such time as the Majority
        Holder elects to fill it with a representative designated
        hereunder.

      

      (v) Fees
        & Expenses.
        The
        Series B Director shall be entitled to all fees, equity awards, other
        compensation and reimbursement of expenses paid to Board of Directors members
        who are not employees of the Corporation or its subsidiaries.

      

      (vi) Reporting
        Information.
        The
        Majority Holders shall provide the Corporation with all necessary assistance
        and
        information related
        to the Series B Director that is required (or would be required if the
        Corporation were subject to Regulation 14A under the Securities Exchange
        Act of
        1934, as amended) to be disclosed in solicitations of proxies or otherwise,
        including such person's written consent to being named in the proxy statement
        (if applicable) and to serving as a director if elected.

      

      (vii) Voting
        Agreement.
        The
        holders of Series B Preferred intend the provisions of this Section 11(a)
        to be
        enforceable as a shareholder voting agreement in accordance with the provisions
        of the WBCA. 

       

      
        
           

        

        
          10

          
            

          

        

        
           

        

         

      

      (viii) Irrevocable
        Forfeiture of Rights.
        The
        Majority Holder may at any time irrevocably forfeit its right to appoint
        a
        director under this Section 11(a) at any time by giving written notice to
        the
        Corporation of its intention to forfeit such rights. Immediately following
        such
        irrevocable notice, the Series B Director will resign from the Board of
        Directors. If he or she does not so immediately resign, he or she may be
        removed
        at any time by a vote of a majority of the other members of the Board of
        Directors. 

       

      (b) Other
        Voting Rights. Holders
        of the Series B Preferred Stock shall be entitled to vote on all matters
        submitted to a vote of the holders of the Corporation’s Common Stock, including
        with respect to the election of directors of the Corporation, on an as if
        converted basis based on the Voting Conversion Rate (defined below) in effect
        on
        the record date of such vote. Each share of Series B Preferred Stock shall
        initially be entitled to cast 81 votes (as adjusted from time to time hereunder,
        the “Voting
        Conversion Rate”).
        The
        Voting Conversion Rate shall be appropriately adjusted (i.e. the Voting
        Conversion Rate will be adjusted upwards as the Conversion Price is adjusted
        downwards and vice versa) if the Conversion Price is adjusted from time to
        time
        pursuant to Sections 4(e)(i), 4(e)(ii) and 4(e)(iii) above. For purposes
        of
        clarification, in no circumstances, shall the Voting Conversion Rate be adjusted
        upon the occurrence of an event which would cause the Conversion Price to
        be
        adjusted pursuant to Section 4(f). Notwithstanding the voting group rights
        set
        forth in Section 23B.11.035 of the WBCA, holders of Series A Preferred Stock
        will not have, by virtue of the WBCA or this Section 11, the right to vote
        separately as a series on any proposed plan of merger or plan of share exchange.
        Except as otherwise provided herein, to the maximum extent permitted by law,
        holders of Series A Preferred Stock will not have any rights to vote separately
        as a series with respect to any matter submitted to a vote of the holders
        of the
        Corporation’s outstanding securities. 

      

      12. Protective
        Provisions.

       

      (a) So
        long
        as any shares of Series B Preferred Stock are outstanding, the Corporation
        shall
        not (either directly or indirectly by merger, consolidation, reclassification
        or
        similar transaction) without first obtaining the approval (by vote or written
        consent, as provided by law) of the holders of at least a majority of the
        then-outstanding shares of Series B Preferred Stock, voting separately as
        a
        series: 

      

      (i)
         amend
        its
        Articles of Incorporation, Bylaws or other governing documents so as to (i)
        increase the number of authorized shares of the Corporation’s preferred stock or
        (ii) adversely change the rights, preferences or privileges of the Series
        B
        Preferred Stock or any holder thereof;
        provided,
        however,
        that the
        authorization and issuance of additional shares of Common Stock, and creation
        of
        any series of preferred stock (or issuing shares under any such series) that
        is
        junior in dividends, liquidation preference, redemption, conversion and payment
        rights and otherwise to the Series B Preferred Stock shall not be deemed
        to
        adversely change the rights, preferences or privileges of the Series B Preferred
        Stock; provided further,
        that
        the foregoing shall not, in any way, prevent the Corporation from unilaterally
        amending the Articles of Incorporation, authorizing and otherwise designating
        additional shares of Series B Preferred Stock and issuing additional shares
        of
        Series B Preferred Stock to the then existing holders of the Series B Preferred
        Stock and/or Registrable Securities, but only to the extent that such shares
        of
        Series B Preferred Stock are being issued in satisfaction of Non-Registration
        Fees. 

      

         (ii)
         create,
        authorize, designate, offer, sell or issue any equity security (or security
        convertible into or exchangeable for an equity security) that is senior to
        or
pari
        passu with
        the
        Series B Preferred Stock (including any Series B Preferred Stock other than
        pursuant to the Purchase Agreement) with respect to voting rights, dividends,
        liquidation preference or conversion rights; provided,
        however,
        that
        the
        foregoing shall not, in any way, prevent the Corporation from authorizing,
        designating, offering, selling or issuing any Common Stock or any series
        of
        preferred stock (or issuing shares under any such series) that is pari
        passu with
        the
        Series B Preferred Stock with respect to voting rights and/or dividends provided
        that such Common Stock or series of preferred stock is junior in liquidation
        preference to the Series B Preferred Stock; provided
        further,
        that
        the foregoing shall not, in any way, prevent the Corporation from unilaterally
        amending the Articles of Incorporation, authorizing and otherwise designating
        additional shares of Series B Preferred Stock and issuing additional shares
        of
        Series B Preferred Stock to the then existing holders of the Series B Preferred
        Stock and/or Registrable Securities, but only to the extent that such shares
        of
        Series B Preferred Stock are being issued in satisfaction of Non-Registration
        Fees. 

      

      (iii) authorize,
        offer, sell or issue any shares of Series A Preferred Stock.

      

      
        
           

        

        
          11

          
            

          

        

        
           

        

         

      

         (iv)
         create
        any new debt instrument or bank line or increase any existing bank line or
        debt
        obligation (or similar arrangement pursuant to which the Corporation is or
        becomes indebted, but specifically excluding trade payables in the ordinary
        course of business and specifically excluding capital lease lines), so that
        the
        Corporation’s total indebtedness pursuant to such instruments, lines or
        arrangements entered into after the Original Issue Date exceeds $10,000,000
        in
        the aggregate; or

      

      (v)  declare
        or pay any Distribution (as defined below) with respect to any capital stock
        of
        the Corporation.

      

      (b)  For
        purposes of this Section 12, “Distribution”
shall
        mean the transfer of cash or other property without consideration, whether
        by
        way of dividend or otherwise, other than dividends on Common Stock payable
        in
        Common Stock, or the purchase or redemption of shares of the Corporation
        for
        cash or property other than repurchases of Common Stock issued to or held
        by
        employees, officers, directors or consultants of the Corporation or its
        subsidiaries upon termination of their employment or services pursuant to
        agreements providing for the right of said repurchase, provided such agreements
        either exist on the Original Issue Date or are approved by holders of a majority
        of the Series B Preferred Stock outstanding at the time such agreements become
        binding or at the time of such repurchase. 

      
         

        13.
          Legend. 

      

       

      The
        Series B Preferred Stock and any underlying shares of Common Stock will be
        issued under an exemption or exemptions from registration under the Act and
        are
        subject to certain restrictions on transfer pursuant to the terms of the
        Purchase Agreement. Accordingly, the certificates evidencing the Series B
        Preferred Stock and the underlying Common Stock shall, upon issuance, contain
        a
        legend, substantially in the form as follows: 

      

      “THE
        SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE U.S. SECURITIES
        ACT OF 1933, AS AMENDED (THE “ACT”), OR APPLICABLE STATE SECURITIES LAWS AND NO
        INTEREST HEREIN MAY BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS
        (1) A
        REGISTRATION STATEMENT WITH RESPECT TO SUCH SECURITIES SHALL BE EFFECTIVE
        UNDER
        THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR (2) SUCH SECURITIES ARE
        TRANSFERRED PURSUANT TO RULE 144 PROMULGATED UNDER THE ACT (OR ANY SUCCESSOR
        RULE) OR (3) THE ISSUER OF THESE SECURITIES SHALL HAVE RECEIVED AN OPINION
        OF
        COUNSEL FOR THE HOLDER OF THESE SECURITIES REASONABLY SATISFACTORY TO THE
        ISSUER
        THAT NO VIOLATION OF THE ACT OR SIMILAR STATE SECURITIES LAWS WILL BE INVOLVED
        IN SUCH TRANSFER.

      

       

      THE
        SECURITIES REPRESENTED HEREBY ARE SUBJECT TO CERTAIN RESTRICTIONS AND AGREEMENTS
        CONTAINED IN, AND, UNTIL SUCH RESTRICTIONS EXPIRE, MAY NOT BE SOLD, ASSIGNED,
        TRANSFERRED, ENCUMBERED, PLEDGED OR OTHERWISE DISPOSED OF EXCEPT UPON COMPLIANCE
        WITH, THE PROVISIONS OF THAT CERTAIN PREFERRED STOCK PURCHASE AGREEMENT DATED
        AS
        OF JULY 28, 2006, BY AND BETWEEN THE INITIAL HOLDER AND THE CORPORATION. 
BY ACCEPTANCE OF THE SHARES OF CAPITAL STOCK EVIDENCED BY THIS CERTIFICATE,
        THE
        HOLDER AGREES TO BE BOUND BY SAID PURCHASER AGREEMENT AND ALL AMENDMENTS
        THERETO.  A
        COPY OF
        SUCH PURCHASE AGREEMENT HAS BEEN FILED AT THE OFFICE OF THE CORPORATION

       

      
        14.
          Status
          of Converted Stock. 

      

       

      In
        the
        event any shares of Series B Preferred Stock shall be converted pursuant
        to
        Section 4 hereof or redeemed pursuant to Section 15 hereof, the shares so
        converted or redeemed shall be canceled and shall not be reissuable by the
        Corporation. 

       

      
        
           

        

        
          12

          
            

          

        

        
           

        

         

      

      
        15.
          Optional
          Redemption. 

      

       

      (a)  At
        any
        time after [insert closing date], 2011, subject to Section 15(e), this
        Corporation may redeem, out of funds legally available therefor, in whole
        or in
        increments of at least 15% of the shares of Series B Preferred Stock that
        have
        not been converted into Common Stock pursuant hereto before the time of such
        redemption (the date of such redemption being referred to herein as the
“Redemption
        Date”).
        The
        Corporation shall redeem the shares of Series B Preferred Stock by paying
        in
        cash an amount per share equal to $362.50 (as appropriately adjusted for
        any
        combinations, divisions, or similar recapitalizations affecting the Series
        B
        Preferred Stock after the Original Issue Date), plus an amount equal to all
        declared and unpaid dividends thereon (the “Redemption
        Price”).
        Any
        partial redemptions must be effected pro rata among the holders of Series
        B
        Preferred Stock, unless the affected holders consent otherwise. The Corporation
        may exercise its redemption right set forth in this Section 15 up to five
        (5)
        separate times. 

      

      (b)  At
        least
        thirty (30), but no more than forty five (45) days prior to the Redemption
        Date,
        written notice shall be mailed, first class postage prepaid, to each holder
        of
        record (at the close of business on the business day next preceding the day
        on
        which notice is sent) of the Series B Preferred Stock, at the address last
        shown
        on the records of the Corporation for such holder, (i) notifying such holder
        of
        the redemption to be effected, the Redemption Date, the Redemption Price,
        the
        place at which payment may be obtained, (ii) calling upon such holder to
        surrender to the Corporation the manner and at the place designated the holder’s
        certificate or certificates representing the shares to be redeemed (or lost
        stock affidavits therefor reasonably acceptable to the Corporation) and (iii)
        including the officers’ certificate described in Section 15(e) (the
“Redemption
        Notice”).
        Except as provided herein, on or after the Redemption Date each holder of
        Series
        B Preferred Stock to be redeemed shall surrender to this Corporation the
        certificate or certificates representing the shares of Series B Preferred
        Stock
        to be redeemed (or lost stock affidavits therefor reasonably acceptable to
        the
        Corporation) (the “Redeemed
        Certificates”),
        in
        the manner and at the place designated in the Redemption Notice, and thereupon
        the Redemption Price of such shares shall be payable to the order of the
        person
        whose name appears on such certificate or certificates as the owner thereof
        and
        each surrendered certificate shall be cancelled. The Corporation will promptly
        prepare and send to each such holder a certificate for any shares of Series
        B
        Preferred Stock represented by a Redeemed Certificate that are not redeemed
        on
        such Redemption Date. 

      

      (c)  From
        and
        after the applicable Redemption Date, unless there shall have been a default
        in
        payment of the Redemption Price, all rights of the holders of shares of Series
        B
        Preferred Stock designated for redemption in the Redemption Notice as holders
        of
        the Series B Preferred Stock (except the right to receive the Redemption
        Price
        without interest upon surrender of their certificate or certificates) shall
        cease with respect to the shares designated for redemption on such date,
        and
        such shares shall not thereafter be transferred on the books of the Corporation
        or be deemed to be outstanding for any purpose whatsoever. 

       

      (d)  For
        avoidance of doubt, the Series B Preferred Stock will continue to have its
        conversion rights pursuant to Section 4 until the Redemption Date. 

      

      (e)  As
        a
        condition to the Corporation’s right to cause a redemption under this Section
        15, (i) the Corporation must, on the Redemption Date, have funds legally
        available for the redemption of the Series B Preferred Stock designated for
        redemption, (ii) the Corporation must be able to effect such redemption without
        violating or conflicting with any agreement to which the Corporation is a
        party
        or by which it or its assets are bound or the Corporation’s Articles of
        Incorporation or bylaws, (iii) the Corporation must deposit the Redemption
        Price
        of all the outstanding shares of Series B Preferred Stock with a bank or
        trust
        corporation having aggregate capital and surplus in excess of $50,000,000,
        as a
        trust fund for the benefit of the respective holders of the Series B Preferred
        Stock, with irrevocable instructions and authority to the bank or trust
        corporation to pay the Redemption Price for such shares to their respective
        holders on or after the Redemption Date upon receipt of notification from
        the
        Corporation that such holder has surrendered a share certificate to the
        Corporation pursuant to this Section 15 (or lost stock affidavit therefor
        reasonably acceptable to the Corporation) and (iv) include in the Redemption
        Notice a certificate signed by the Chief Executive Officer and Chief Financial
        Officer of the Corporation that the conditions set forth in this Section
        15(e)
        have been satisfied in full. As of the Redemption Date, the deposit shall
        constitute full payment of the shares to their holders, and from and after
        the
        Redemption Date the shares so called for redemption shall be redeemed and
        shall
        be deemed to be no longer outstanding, and the holders thereof shall cease
        to be
        shareholders with respect to such shares and shall have no rights with respect
        thereto except the right to receive from the bank or trust corporation payment
        of the Redemption Price of the shares, without interest, upon surrender of
        their
        certificates therefor (or lost stock affidavit therefor reasonably acceptable
        to
        the Corporation). Such instructions shall also provide that any moneys deposited
        by the Corporation pursuant to this Section 15(e) for the redemption of shares
        thereafter converted into shares of the Corporation’s Common Stock pursuant to
        Section 4 hereof prior to the Redemption Date shall be returned to the
        Corporation forthwith upon such conversion. The balance of any moneys deposited
        by the Corporation pursuant to this Section 15 remaining unclaimed at the
        expiration of thirty (30) days following the Redemption Date shall thereafter
        be
        returned to the Corporation upon its request expressed in a resolution of
        its
        Board of Directors, provided the Corporation has used commercially reasonable
        efforts to notify the holder of the related Series B Preferred Stock of the
        unclaimed amount and such holder’s rights therein. 

      

      
        
           

        

        
          13

          
            

          

        

        
           

        

         

      

      IN
        WITNESS WHEREOF,
        Airspan
        Networks, Inc. has caused this Articles of Amendment to the Articles of
        Incorporation to be signed by Peter Aronstam, its Chief Financial Officer,
        as of
[insert
        date of execution],
        2006.

       

      
        	AIRSPAN NETWORKS, INC.	 	 	 
	 	 	 	 
	 	 	 	 
	By:  	 	 	 
	
                
Name:
                Peter Aronstam	 	 	
              
	
                Title:
                  Chief Financial Officer

              	 	 	 

      
        
           

        

        
          14

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