Document:

Mamma.com Exhibit 4.9

Exhibit 4.9  

SECURITIES PURCHASE AGREEMENT made
and entered into at the City of Boca Raton, State of Florida as of the 10th day of June,
2004.  

	BY AND BETWEEN:	 	CHRIS TSISTINAS (also known as Chris Andrews), Executive, of the City of Delray Beach, State of Florida	 
	 	 	 	 
	AND:	 	ERIK KRETSCHMAR, Executive, of the City of Delray Beach, State of Florida	 
	 	 	 	 
	 	 	herein collectively referred to as the “Vendors”	 
	 	 	 	 
	AND:	 	MAMMA.COM USA, INC., a legal person, duly incorporated according to law, herein acting and
represented  by Guy Fauré,  its  President and CEO,  duly  authorized  hereto as he so declares,	 
	 	 	 	 
	 	 	herein referred to as the “Purchaser”	 
	 	 	 	 
	AND:	 	DIGITALARROW LLC, a legal person, duly incorporated according to law, herein acting and represented by
its President, Erik Kretschmar, duly authorized hereto as he so declares,	 
		 
	 	 	herein referred to as “Digital”	 
		 
	AND:	 	HIGH PERFORMANCE BROADCASTING, INC., a legal person, duly incorporated according to law,herein
acting and represented by its President,  Erik  Kretschmar,  duly authorized  hereto as he so declares,	 
		 
		 	herein referred to as “HPB”	 
		 
	AND:	 	MAMMA.COM INC., a legal person, duly incorporated according to law, herein acting and
represented by its President and CEO,Guy Faure, duly authorized hereto as he so declares,	 
		 
	 	 	herein referred to as “Parent”	 

WHEREAS Digital carries on the
business of offering Internet marketing solutions to its clients including, without
limiting the generality of the foregoing, e-mail and pop-up marketing services;  

WHEREAS HPB carries on the business
of providing e-mail deployment services and consultation;  

WHEREAS Purchaser is a wholly owned subsidiary
of the Parent;  

WHEREAS the Parent and Purchaser
carry on a related business operating as a provider of meta-search and on-line direct
marketing services;  

WHEREAS Vendors own all of the
Purchased Securities (as hereinafter defined);  

377 

WHEREAS the Vendors wish to sell to
the Purchaser and the Purchaser wishes to purchase from the Vendors the Purchased
Securities (as hereinafter defined), the whole upon the terms and conditions hereunder set
forth;  

NOW THEREFORE, THIS
AGREEMENT WITNESSETH:  

SECTION 1    PREAMBLE  

The preamble hereto shall form an
integral part hereof and shall avail as if fully and effectively recited herein at length. 

SECTION 2    DEFINITIONS  

Wherever used in this Agreement,
unless there is something in the subject matter or context inconsistent therewith, the
following words shall have the meanings ascribed to them herein. 

	  	(a)  	  	“Accounts
Receivable” means the accounts receivable of Digital and HPB for
sales made and services rendered and invoiced up to the Effective Date;  

	  	(b)  	  	“Agreement” means
this Securities Purchase Agreement and all writings supplemental hereto or
in amendment or confirmation hereof, including the Schedules annexed
hereto and all writings delivered pursuant hereto;  

	  	(c)  	  	“Assets” means
the Accounts Receivable, Equipment, Intellectual Property, cash and all
other property and assets owned, directly or indirectly, by Digital and
HPB;  

	  	(d)  	  	“Closing
Date” or “Closing” means the date of execution of this
Agreement;  

	  	(e)  	  	“Consents” means
the consents of a contracting party to the assignment of the Contracts if
required by the terms of such contracts;  

	  	(f)  	  	“Contracts” means
all agreements, understandings and commitments (whether written or oral)
to which Digital or HPB is a party or by which either may be bound;  

	  	(g)  	  	“Effective
Date” means June 1, 2004;  

	  	(h)  	  	“Escrow
Agent” means Manufacturers and Traders Trust Company;  

	  	(i)  	  	“Escrow
Agreement” means that certain Escrow Agreement executed by the
parties hereto this date;  

	  	(j)  	  	“Escrow
Period” means the period terminating twelve (12) months following the
Closing Date;  

	  	(k)  	  	“Equipment” means
the equipment listed on Schedule A;  

	  	(l)  	  	“Financial
Statements” means the financial statements of Digital and HPB for the
fiscal period ending December 31, 2003 as well as the internal interim
statements of Digital and HPB prepared by Digital and HPB for the period
ending April 30, 2004 all of which are attached hereto as Schedule B;  

378 

	  	(m)  	  	“GAAP” means,
at any time, accounting principles generally accepted in the United States
during the relevant time applied on a consistent basis;  

	  	(n)  	  	“Intellectual
Property” means all industrial and intellectual property rights of
Digital and HPB including, without limitation, the technology, all
patents, patent applications, patent rights, trademarks, trademark
applications, trade names, domain names, service marks, service mark
applications, design marks, design mark applications, copyrights,
copyright registrations, source codes, research and development, know-how,
trade secrets, technology, inventions, confidential information and all
related documentation and material pertaining thereto;  

	  	(o)  	  	“Interim
Period” shall mean the period from December 31, 2003 up to the
Effective Date;  

	  	(p)  	  	“Purchased
Business” means collectively the business carried on by Digital and
HPB at the Closing Date;  

	  	(q)  	  	“Mamma
Shares” shall mean the shares in Parent issued to Vendors pursuant to
Section 4 2(d) hereof;  

	  	(r)  	  	“Parties” means
the Vendors and the Purchaser;  

	  	(s)  	  	“Taxes” means
all amounts payable on account of income, corporate, capital, goods and
services, excise, sales or any other type of taxes, governmental charges,
levies, assessments or reassessments, including interest and penalties;  

	  	(t)  	  	“Purchase
Price” means the purchase price to be paid for the Purchased
Securities as provided for in Article 4;  

	  	(u)  	  	“Purchased
Securities” means all of the issued and outstanding shares in the
capital stock of HPB and the membership units of Digital owned by the
Vendors, and sold to the Purchaser pursuant to the terms hereof;  

SECTION 3    PURCHASE AND
SALE OF SECURITIES  

Subject to the terms and conditions
hereinafter set forth, the Vendors do hereby sell, transfer, assign and deliver to the
Purchaser and the Purchaser, in reliance upon the representations, warranties, covenants
and agreements of the Vendors contained herein and subject to the terms and conditions of
the present Agreement, hereby purchases from the Vendors as and from the Effective Date
the Purchased Securities in consideration of the payment of the Purchase Price. 

SECTION 4    PURCHASE PRICE  

4.1       
Purchase Price. The
Purchase Price for the Purchased Securities shall be equal to the sum of $1,050,000.00
plus the issuance to the Vendors of 90,000 common shares in the aggregate of the Parent
at the direction of the Purchaser.  

4.2       
Payment of the Purchase
Price. The Purchase Price shall be payable as follows:  

	  	(a) 	  	$350,000.00 shall be remitted to the Vendors equally
($175,000.00 each) at Closing by way
of wire transfer of funds;  

379 

	  	(b)  	  	$590,000.00
shall, subject to Article 8 hereof, be held in escrow with the                Escrow
Agent and shall be remitted to the Vendors on January 4, 2005, less any
               portion thereof used to satisfy a claim under Article 8 for
indemnification;  

	  	(c)  	  	$110,000.00
shall be subject to Article 8 hereof, held in escrow with the Escrow                Agent
for a period of twelve (12) months following the Closing at which time it
               will be remitted to the Vendors less any portion thereof used to satisfy a
claim                under Article 8 for indemnification; and  

	  	(d)  	  	the
balance of the Purchase Price shall be payable by way of the Parent issuing           to
the Vendors at Closing 90,000 common shares of the Parent of which 9000           common
shares shall be held in escrow with the Escrow Agent and shall be subject           to
the terms and provisions of Article 8 hereof and the Escrow Agreement.  

	  	The
81,000 common shares to be issued as partial consideration for the transfer of the
Purchased Securities (which are not to be held in escrow with the Escrow Agent) shall be
delivered to the Vendors as soon as possible after the Closing and all 90,000 such common
shares will be “restricted securities” as defined in Rule 144 promulgated by
the United States Securities and Exchange Commission under the Securities Act of 1933, as
amended (the “Act”) and under applicable canadian securities legislation
subject to applicable resale restrictions imposed the Act, by Rule 144 and applicable
canadian securities legislation and the share certificates shall be labelled with the
Parent’s Rule 144 legend and any other applicable restrictive legend. 

4.3       Allocation. The Purchase Price
shall be allocated amongst the Purchased Securities of Digital and HPB by Purchaser
within thirty (30) days of the Closing Date. The parties confirm that fifty-three percent
(53%) of the Purchase Price or the sums payable pursuant to Article 4.2 (a), (b) and (c)
hereof correspond with the payment for fifty-three percent (53%) of the Purchased
Securities and the balance of the Purchase Price or the Mamma Shares are issued by the
Parent in payment of the balance of the Purchase Price at the direction of the Purchaser.  

SECTION 5    
REPRESENTATIONS AND WARRANTIES  

In order to induce the Purchaser to
enter into and consummate this Agreement, the Vendors hereby represent and warrant to and
in favour of the Purchaser as follows: 

5.1        
Incorporation and Capacity.
Digital was duly formed and HPB was duly incorporated under the laws of the State of
Florida. Digital is a limited liability company and HPB a corporation and both are valid
and subsisting and in good standing under such laws. Both Digital and HPB are in good
standing and are licensed or qualified to transact business in Florida and are qualified
in such jurisdiction where it is necessary to be qualified in order to avoid a material
adverse effect on the Purchased Business. All corporate books and records of both Digital
and HPB are maintained at their head offices or at the offices of their solicitors.  

5.2        
Authorization of Agreement. This
Agreement constitutes a valid and binding obligation of each of the Vendors, Digital and
HPB, enforceable in accordance with its terms and neither the entering into nor the
delivery of this Agreement nor the completion of the transactions contemplated hereby by
the Vendors will result in the violation of:  

	  	(i) 	  	any
agreement or other instrument to which either Digital or HPB is a party or           by
which either Digital or Arrow is bound; or  

380 

	  	(ii) 	  	any
applicable law, rule or regulation which may govern Digital or HPB.  

5.3        
Subsidiaries. The Vendors do not
have, directly or indirectly, any ownership or other interest in, or any assets or rights
used to carry, or control of any corporation, partnership, joint venture, business
association or other entity which carries on the Purchased Business.  

5.4       
 Authorized and Issued
Securities. All of the Purchased Securities are duly authorized and validly issued and
are outstanding as fully paid and non-assessable, and constitute all of the outstanding
shares in the capital stock of HPB and all of the outstanding equity interests in
Digital. The Vendors are the legal and beneficial owners of the Purchased Securities.  

5.5        
Title to Shares. The Vendors own
the Purchased Securities with good and marketable title thereto, free and clear of all
liens, encumbrances, pledges, charges and claims of any nature or kind whatsoever. 5.6
Voting Trust. None of the Purchased Securities are subject to any voting trust or voting
agreement and there is no proxy in existence with respect to any of the Purchased
Securities.  

5.7        
Rights to Purchase Securities.
There are no contracts, options or other rights of another binding upon or which at any
time in the future may become binding upon the Vendors, Digital or HPB to issue, sell,
transfer, assign, pledge, charge, mortgage or in any other way create, dispose of or
encumber any of the Purchased Securities or any additional shares or membership units
other than pursuant to the provisions of this Agreement.  

5.8        
Actions Respecting Securities.
There are no actions, suits, proceedings or claims pending or threatened with respect to
or in any manner affecting the ownership by the Vendors of the Purchased Securities, and
none of the Purchased Securities are subject to any agreement (other than the present
Agreement) to buy or sell or restricting, limiting or in any manner affecting the
transferability thereof.  

5.9        
Records. The minute books of the
Digital and HPB are complete and up to date in all respects and accurately reflect all
material corporate or company actions and decisions which have been taken by their
respective board of directors, managers, shareholders and unit holders.  

5.10      
Effect of Agreement. Neither the
execution and delivery of this Agreement nor the consummation of the transactions
contemplated hereby will:  

	  	(i)  	  	conflict
with, violate, result in a breach of or constitute a default under any
               provision of the articles of incorporation, articles of organization,
operating                agreement, or by-laws or other organizational documents of
Digital or HPB;  

	  	(ii)  	  	violate,
conflict with or result in the breach or termination of or                modification,
or otherwise give any other contracting party the right to                terminate, or
constitute a default, with or without notice, or cause the                acceleration of
any obligation, under the terms of any agreement or instruments                to which
the Digital or HPB are a party or by which any of their properties or
               other assets may be bound;  

381 

	  	(iii)  	  	conflict
with, violate, result in a breach of or constitute a default under any
               judgment, order, injunction, decree or award against, or binding upon
Digital or                HPB or upon any of the properties or other assets used in the
Purchased                Business;  

	  	(iv)  	  	violate
any law or regulation of any jurisdiction in which Digital or HPB                carries
on business.  

5.11      Compliance with Law.
 All aspects
of the Purchased Business have been conducted in accordance with all applicable laws,
ordinances and regulations.  

5.12      
Rights and Privileges. Digital
and HPB hold all licenses and permits, all unencumbered and subject to no challenge,
revocation, expiry or termination, which are material or necessary to the operation of
each and every aspect of the Purchased Business. To the best of the knowledge of the
Vendors, there exists no pending or threatened revocation or termination of any such
license or permit. All such licenses and permits are sufficient and adequate in all
respects to permit the lawful conduct by Digital and HPB of the Purchased Business in the
manner now conducted and none of the operations of the Purchased Business was conducted in
any manner that materially violates any of the terms or conditions under which any license
or permit was granted.  

5.13      Legal Proceedings.
 There are no
suits, claims, actions (arbitration or legal) or administrative or other proceedings or
governmental investigations pending or, to the knowledge of the Vendors, threatened
against Digital or HPB or the Vendors or any of their respective members, managers,
officers, directors, employees, agents or affiliates involving, affecting or relating to
its Purchased Business or the Assets or the transactions contemplated by this Agreement
before any court or administrative agency, authority or officer. The Vendors do not know
of any facts or circumstances which should, or could, reasonably form the basis for any
such suits, claims, actions, proceedings and, to the knowledge of the Vendors, are not the
subject of any investigation or proceedings by any governmental authority, and none of the
Assets of the Digital and HPB nor any of its business practices is in any manner, directly
or indirectly, affected by any judgment, order, writ, or injunction of any court or
governmental or administrative agency or officer.  

5.14      Tax Returns.
 The Vendors,
Digital and HPB have filed in proper form all federal, state and local income,
corporation, franchise, sales, withholding and other tax returns and all reports required
to be filed by law.  

5.15      Tax Liabilities.
 The Vendors,
Digital and HPB do not have any liability, obligation or commitment for the payment of
income taxes, corporation taxes or other taxes or charges or assessments or duties of
whatever nature or kind (inclusive, without restriction, of all income taxes, corporation
taxes, sales taxes, payroll taxes, withholding taxes, customs’ duties and excise
taxes, or interest or penalties with respect thereto). Vendors, Digital and HPB are not in
arrears with respect to any required withholdings or payments of any taxes of any kind.
There are no actions, suits, proceedings, investigations or claims now threatened or
pending against Vendors, Digital or HPB in respect of taxes nor are there any matters
under discussion with any governmental authority with respect to taxes asserted by any
such authority.  

5.16      No Liabilities.
There are no
liabilities or obligations of Digital or HPB of any kind or nature whatsoever, whether or
not accrued and whether or not determined or determinable, contingent, absolute or
otherwise, direct or indirect, known or unknown, in respect of which the Purchaser is or
may become liable on or after the date hereof in connection with any actions, omissions or
events relating to any activities of either Digital or HPB occurring prior to the date
hereof which have not been fully disclosed to the Purchaser.  

382 

5.17      Financial Statements. The
Financial Statements:  

	  	(i)  	  	reflect
accurately the transactions entered into by Digital and HPB, whether or           not
reflected in the books and accounts of the Digital and HPB;  

	  	(ii)  	  	are
true and correct and present fairly the assets, liabilities, retained           earnings,
profit and loss and financial position of Digital and HPB as at the           dates
thereof;  

	  	(iii)  	  	have
been prepared in accordance with GAAP;  

Except to the extent reflected or
reserved against on the Financial Statements, neither Digital nor HPB on the Closing Date
have any liabilities or obligations of any nature, whether direct or indirect, accrued,
absolute, contingent or otherwise, known or unknown, fixed or unfixed, liquidated or
unliquidated including, without limitation, federal, state, local, municipal or other tax
liabilities due or to become due or penalties, assessments or interest charges in respect
thereof, or unusual forward or long term commitments or unrealized or anticipated losses
from any unfavourable commitments. 

5.18      
Condition of the Assets.
Schedule A is a list of the Equipment owned by Digital and HPB. The Assets (including the
Equipment) are in all material respects in good condition and working order (reasonable
wear and tear excepted) and are sufficient for all operations presently conducted by
Digital and HPB. No material modification, repairs, maintenance or remodelling are needed
with respect to the applicable laws, and no notice of any violation of any law, statute,
ordinance or regulation relating to any the Assets has been received by either Vendor,
Digital or HPB.  

5.19      Unfair Practices.
 There is no
unfair labour practice charge or complaint with respect to employees of Digital or HPB
pending before any agency, authority, board or court.  

5.20      Employment Matters.
 Schedule C
annexed hereto is a list of the names of all employees, officers, managers, and directors
of Digital and HPB and a brief job description for each employee of Digital and HPB and,
for each such person, his or her age, current rate of compensation (including salary,
bonus and all other forms of compensation), the date of hire and the date and amount of
the most recent increase in compensation and whether any commitment, promise or
undertaking has been made by the Vendors or any officer of Digital and HPB with respect to
any increase in the compensation payable to any such employee or any portion thereof.
Digital and HPB have made all deductions required by law to be made for wages and salaries
and has either remitted same to the respective legally constituted authorities entitled to
receive payment of same or has provided for same in its accounts.  

5.21     Accounts Receivable.
 To the best
of Vendor’s knowledge, the Accounts Receivable of Digital and HPB are valid and
genuine and have arisen solely from bona fide sales and deliveries of goods and services
in the ordinary course of business consistent with past practice.  

5.22      
Intellectual Property. All
Intellectual Property owned or licensed by Digital and HPB (including without limitation,
the trade-marks and domain sites for Digital Arrow) or used or useful in the Purchased
Business is free and clear of any adverse claims, challenges or interests. Vendors do not
own or have any right in or to any Intellectual Property owned or licensed by Digital or
HPB. No licenses, sublicenses, covenants or agreements have been granted or entered into
by Vendors, Digital or HPB relating to any patents, trademarks, trade names, service
marks, licenses, applications, trade secrets, formulas and other confidential information.
No patents, trademarks, trade names, service marks, copyrights, licenses, or other
intellectual property rights or applications therefore other than the Intellectual
Property are necessary for or used in the operation of the Purchase Business as presently
operated. The operation of the Purchased Business and the use of its products by customers
have not involved any infringement, and Vendors, Digital and HPB have no notice or
knowledge of any claim of infringement of any Intellectual Property.  

383 

5.23      Interim Period.
 The Vendors
have, during the Interim Period not performed any act which would materially adversely
affect the Purchased Business, Digital, HPB or any of the Assets.  

5.24      Insurance.
Digital and MPB
maintain and shall maintain up to and including the Closing Date insurance against all
such liabilities, hazards and risks (including without limitation, product liability
claims) and in at least such amounts as are usually carried by firms engaged in the same
or similar business. All premiums on insurance policies relating to Digital and HPB have
been paid, those becoming due on or prior to the Closing Date will be timely paid, and all
such insurance shall remain in effect through the Closing Date.  

5.25      Title.
 Digital & HPB possess
and have good and marketable title to the Assets, free and clear of any and all mortgages,
hypothecs, liens (legal or contractual), pledges, charges, security interests,
encumbrances, actions, claims or demands of any nature whatsoever or howsoever arising.
With respect to the Assets and the Purchased Business, Digital and HPB are not party to
any lease, conditional sales contract, capital lease, hire purchase agreement or other
title retention agreement save and except for a lease entered into between Digital and
Opportunity Leasing, Inc. for premises located at 140 N.E. 4th Avenue, Suite C, Delray
Beach, Florida 33483.  

5.26      Full Disclosure.
 Neither this
Agreement nor any certificate or other document delivered to the Purchaser pursuant to the
transactions contemplated hereby contains an untrue statement of a material fact or omits
to state a material fact necessary to make the statements made, in light of the
circumstances in which they are made, not misleading.  

        The
Vendors have no information or knowledge of any relevant fact which has not been disclosed
to the Purchaser which, if known to him or it, might reasonably be expected to deter the
Purchaser from completing the transaction of purchase and sale herein contemplated. 

SECTION 6    FURTHER
REPRESENTATIONS  

6.1        
Representations and
Acknowledgements regarding Mamma Shares. The Vendors furthermore individually represent
and warrant as follows with respect to the common shares of the Parent delivered by Parent
as part of the Purchase Price (collectively the “Mamma Shares”) at the direction
of the Purchaser:  

	  	(a)  	  	Each
Vendor acknowledges that the acceptance of the Mamma Shares involves a           high
degree of risk and further acknowledges that he can bear the economic risk           of
owning the Mamma Shares, including the total loss of his investment.  

	  	(b)  	  	Each
Vendor acknowledges that each Vendor has reviewed all of the Parent’s
          disclosures and filings on SEDAR and EDGAR, as well as press releases
          (collectively, the “Filings”), and each Vendor has thoroughly
reviewed           and fully understands the information in the Filings, including
without           limitation the portions thereof captioned Risk Factors, Description of
the           Business and Description of the Mamma Shares.  

	  	(c)  	  	Each
Vendor has sufficient knowledge and expertise in financial and business           matters
to evaluate the merits and risks of this investment, has had an           opportunity to
review the books and records of account of the Parent, and to ask           questions of,
and receive answers from, appropriate representatives of the           Parent concerning
the Parent’s proposed operations, capitalization and bank           financing, and
the terms and conditions of this offering of the Mamma Shares,           and to obtain
such additional information as each Vendor deems necessary to make           a fully
informed decision as to this offering of the Mamma Shares.  

384 

	  	(d)  	  	Each
Vendor understands that the Mamma Shares are being offered and sold to him           in
reliance on specific exemptions from the registration requirements of Federal
          and State securities laws and that the Parent is relying upon the truth and
          accuracy of the representations, warrants, agreements, acknowledgments and
          understandings of each Vendor set forth herein in order to determine the
          applicability of such exemption and the suitability of each Vendor to acquire
          the Mamma Shares.  

	  	(e)  	  	Each
Vendor understands that no Federal or State agency in the United States           and no
securities commission in Canada has passed upon the offering of the Mamma
          Shares or made any finding or determination as to the fairness of this
          investment, and each Vendor acknowledges that the Mamma Shares have not been
          registered under the Securities Act and may not be offered or sold, unless the
          Mamma Shares are registered under the Securities Act, or an exemption from the
          registration requirements from the Securities Act is available.  

	  	(f)  	  	Each
Vendor is acquiring the Mamma Shares for his own account and has not
          pre-arranged a resale of the Mamma Shares to or on behalf of such Vendor.  

	  	(g)  	  	             Each
Vendor understands that: (i) his right to transfer or re-sell the Mamma
               Shares will be restricted as set forth in the Agreement and by the
Securities                Act and state securities laws, including without limitation the
provisions of                Rule 144 under the Securities Act and under applicable
Canadian Securities                Legislation; (ii) such laws impose limitations upon
such transfer; and (iii) the                Parent is under no obligation to register the
Mamma Shares in connection with                the subsequent transfer by either Vendor
or to aid him in obtaining any                exemption from such registration.  

SECTION 7    PURCHASER’S REPRESENTATIONS  

7.1        
Authority. Purchaser has all the
necessary power and authority to execute and deliver this Agreement and the other
documents relating to the present transaction, to perform its obligations hereunder, and
to consummate the said transaction.  

7.2        
All Requisite Power. The
execution and delivery of this Agreement and the related documents and the consummation by
Purchaser of the Agreement have been duly and validly authorized by all requisite action
and no other corporate proceeding on the part of Purchaser is necessary to authorize this
Agreement.  

7.3        
Authorized Officer. This
Agreement has been duly and validly executed and delivered on behalf of Purchaser by a
duly authorized officer of Purchaser.  

7.4        
Binding Obligation. This
Agreement and the other documents constitute, the legal, valid and binding obligation of
Purchaser, enforceable against Purchaser in accordance with their respective terms, except
as may be limited by bankruptcy, insolvency, reorganization, moratorium and other similar
laws and equitable principles related to or limiting creditors’ rights generally and
by the availability of equitable remedies and defences.  

SECTION 8    SURVIVAL OF
REPRESENTATIONS AND WARRANTIES AND INDEMNITY  

     8.1       
Term of Representation. All of the representations and warranties made by the
Vendors shall continue to survive the execution of the present Agreement for a
period of two (2) years following the Closing Date except for those
representations and warranties of the Vendors relating to taxes which shall
survive for the period of time during which a reassessment may be made.  

385 

     8.2.       
Indemnification by the Vendors. The Vendors shall indemnify the Purchaser, and
save Purchaser and their respective officers, directors, employees, affiliates
and representatives harmless from and against any and all claims, losses,
liabilities, damages, recoveries, deficiencies, costs and expenses (including,
without limitation, interest, penalties and attorneys’ fees and
disbursements) (hereinafter some times referred to collectively as
“losses”) suffered or sustained by the Purchaser resulting from,
arising out of or relating to:  

	  	(i)  	  	any
breach or falsity of any of the representations or warranties of the           Vendors
set forth herein or any failure to fulfil any covenant or obligation on           the
part of the Vendors under this Agreement or from any misrepresentation in or
          omission from any certificate, schedule or other document provided to the
          Purchaser by the Vendors pursuant to this Agreement;  

	  	(ii)  	  	any
claims, demands, suits, proceedings or actions by any third party           containing
allegations which, if true, would constitute a misrepresentation,           breach of
warranty or failure to fulfil a covenant or obligation on the part of           the
Vendor under this Agreement;  

	  	(iii)  	  	any
claims, demands or causes of action of any kind or nature by any third           party
arising from the conduct of the Purchased Business prior to the Closing           Date.  

	  	(iv)  	  	any
assessment or reassessment for taxes of Digital and HPB or for any taxation
          year ending on or before the Closing Date to the extent that the amount of
taxes           payable as a result of such assessment or reassessment exceeds the amount
          accrued as a liability for such taxes.  

8.3        
Satisfaction of Indemnification
Obligations. The obligations of indemnification shall be satisfied within forty-five (45)
days after written notice thereof from the Purchaser to the Vendors. Upon obtaining
knowledge thereof, Purchaser shall promptly notify the Vendors of any claim or demand
which the Purchaser has determined has given or could give rise to a right of indemnity
under this Agreement. If such claim or demand relates to a claim or demand asserted by a
third party against the Digital and HPB (“Third Party Claim”), the Vendors shall
have the right to defend the same at their own cost and expense with counsel of their own
selection, provided that:  

	  	(i)  	  	Purchaser
shall at all times have the right to fully participate in the defence           at its
own expense;  

	  	(ii)  	  	the
Third Party Claim seeks only monetary damages and does not seek any           injunctive
or other relief against Purchaser;  

	  	(iii)  	  	the
Vendors unconditionally acknowledge in writing their obligation to           indemnify
and hold the Purchaser harmless with respect to the Third Party Claim;  

	  	(iv)  	  	counsel
chosen by the Vendors is satisfactory to the Purchaser, acting           reasonably.  

8.4        
Failure to Defend. If the Vendors
shall, within a reasonable time after notice of a Third Party Claim, fail to defend a
Third Party Claim, Purchaser shall have the right, but not the obligation, to undertake
the defence of and to compromise or settle the Third Party Claim on behalf, for the
account and at the risk and expense of Vendors. In the event that the Vendors do defend a
Third Party Claim, they will not be permitted to control the settlement of the claim,
unless:  

386 

	  	(i)  	  	the
terms of the settlement require only the payment of money and do not           require
the Purchaser to admit any wrongdoing or take or refrain from taking any
          action;  

	  	(ii)  	  	the
full amount of the settlement is paid by the Vendors; and  

	  	(iii)  	  	the
Purchaser receives, as part of the settlement, a legally binding and
          enforceable unconditional satisfaction or release, which is in form and
          substance reasonably satisfactory to the Purchaser, providing that the Third
          Party Claim and any claimed liability of Purchaser with respect to the claim is
          being fully satisfied because of the settlement and that the Purchaser is being
          released from any and all obligations or liabilities it may have with respect
to           the Third Party Claim.  

8.5        
Notification and Set-Off. In the
event that Digital, HPB or the Purchaser receives or institutes any claims pursuant to the
provisions of this Section 8, the Purchaser shall notify the Vendors of such claim,
affording the Vendors forty-five (45) days to remedy such claim.  

        If
Vendors fail to remedy such claim, then the Purchaser shall be entitled to recover any
losses relating to any such claim as set forth above, first against any sums deposited and
second against the common shares deposited with the Escrow Agent and thereafter against
the Vendors personally. 

        In
the event of any such dispute, the balance of the Purchase Price shall be dealt with by
the Escrow Agent in accordance with the Escrow Agreement. 

8.6        
Limitation. Notwithstanding the
foregoing, the maximum aggregate amount of the Vendors indemnification herein shall be
equal to the Purchase Price, except where losses are related to fraud or intentional
misrepresentations of the Vendors. In addition, the Vendors shall only be called upon to
indemnify Purchaser once losses suffered by the Purchaser herein total $10,000.00 in the
aggregate.  

8.7        
Non-Exclusive Remedy. The rights
and remedies provided in this Section 8 are cumulative with, and not exclusive of any
other right, remedy, power or privilege to the Purchaser by contract at law or in equity.  

SECTION 9    BROKERAGE  

9.1        
Purchaser shall be solely
responsible to pay for any broker or finders fee in connection with this Agreement or the
transactions contemplated herein and covenants and agrees to indemnify and hold the
Vendors harmless from and against any loss, cost, damage, expense (including reasonable
attorneys’ fees and expenses) and liability resulting from any claims that may be
made by any broker or other person claiming a fee or other compensation in connection with
the transactions contemplated by this Agreement.  

SECTION 10    NOTICES  

Any notice or other communication
permitted or required to be given hereunder by one party to the other shall be in writing
and shall be delivered by hand or by courier service or by telecopier to the party
entitled or required to receive the same, as follows: 

387 

IF TO VENDORS:  

140 N.E. 4th Avenue
Suite C
Delray Beach, Florida 33483

U.S.A. 

WITH A COPY TO:  

HODGSON RUSS LLP

1801 N. Military Trail 

Suite 200

Boca Raton, Florida 33431

U.S.A. 

Attention: Robert C. White 

IF TO PURCHASER:  

388 St. Jacques Street West

9th Floor

Montreal, Quebec

H2Y 1S1 

Attention: Mr. Guy Fauré 

WITH A COPY TO:  

SPIEGEL SOHMER

5 Place Ville Marie

Suite 1203

Montreal, Quebec
H3B 2G2 

Attention: Morris Szwimer 

IF TO PARENT:  

388 St. Jacques Street West

9th Floor
Montreal, Quebec H2Y 1S1 

Attention: Mr. Guy Fauré 

Notices delivered as aforesaid shall
be deemed received on the date of actual delivery thereof. Each party may change its
address by notice delivered in like manner. Notices and other communications may be signed
by any officer of any party hereto or by their respective legal counsel. 

SECTION 11    EXPENSES  

Each party shall bear and pay their
respective costs, expenses and fees (including, without limitation, counsel and accounting
fees) incurred by it in connection with this Agreement and the transactions contemplated
herein. 

388 

SECTION 12    INTEGRATED
CONTRACT, WAIVER AND MODIFICATION  

This Agreement and the other
documents referred to herein represents the complete and entire understanding and
agreement between the parties hereto with regard to the subject matter hereof and
supersedes any and all prior negotiations, undertakings and agreements, whether written or
oral with respect thereto including the letters of intent executed by the parties prior to
the Closing Date. No agreements or provisions, unless incorporated herein, shall be
binding on either party hereto. This Agreement may not be modified or amended nor any
covenant, agreement, condition, requirement, provision, warranty or obligation contained
herein be waived, except in writing signed by both parties or, in the event that such
modification, amendment or waiver is for the benefit of one of the parties hereto and to
the detriment of the other, then the same must be in writing signed by the party to whose
detriment the modification, amendment or waiver inures. 

SECTION 13    GOVERNING LAW  

This Agreement shall be exclusively
construed in accordance with and governed by the laws of the State of New York except that
body of law relating to choice of laws. The venue for any litigation ensuing from the
present Agreement shall take place in the State of New York and the parties hereby submit
to the jurisdiction of New York in any such litigation. 

SECTION 14    BINDING EFFECT  

This Agreement shall inure to the
benefit of and be binding upon the parties hereto and their respective heirs, executors,
personal representatives, successors and assigns, but none of the rights, and obligations
attaching to any shall be assignable. 

SECTION 15    DESCRIPTIVE
HEADINGS  

The descriptive headings of the
several sections of this Agreement are inserted for convenience only and shall not control
or affect the meaning or construction of any of the provisions hereof. 

SECTION 16    ENFORCEABILITY OF
PROVISIONS  

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

SECTION 17    PLURAL, SINGULAR, GENDER  

When the context in which the words
are used in this Agreement indicates that such is the intent, words in the singular number
shall include the plural and vice-versa. References to any gender shall include any other
gender as may be applicable under the circumstances. 

The terms “herein”,
“hereof”, “hereunder”, and other words of similar import mean and refer to this
Agreement as a whole and not merely as to the specific paragraph or clause in which the
respective word appears, unless expressly so stated. 

SECTION 18    CURRENCY  

All references to currency in this
Agreement are to US dollars. 

389 

IN WITNESS WHEREOF the parties hereto
have executed this Agreement on the date first above stated.  

signatures on following
page 

390 

		 	 	 	s/s Chris Tsistinas  	 
		 		 	CHRIS TSISTINAS 	 
		 
		 		 	s/s Erik Kretschmar  	 
		 		 	ERIK KRETSCHMAR 	 
		 
		 		 	MAMMA.COM USA, INC. 	 
		 
		 	Per:	 	s/s Guy Fauré  	 
		 		 	Guy Fauré, President & CEO	 
		 
		 		 	DIGITALARROW, LLC 	 
		 
		 	Per:	 	s/s Erik Kretschmar 	 
		 		 	Erik Kretschmar, President	 
		 
		 		 	HIGH PERFORMANCE BROADCASTING, INC. 	 
		 
		 	Per:	 	s/s Erik Kretschmar 	 
		 		 	Erik Kretschmar, President	 
		 
		 		 	MAMMA.COM INC. 	 
		 
		 	Per:	 	s/s Guy Fauré 	 
		 		 	Guy Fauré, President & CEO	 

391Mamma.com Exhibit 4.10

Exhibit 4.10  

Execution Copy  

SECURITIES PURCHASE
AGREEMENT  

        This
Securities Purchase Agreement (this “Agreement”) is dated as of June 29, 2004
among Mamma.com, Inc., a Province of Ontario, Canada corporation (the
“Company”), and the purchasers identified on the signature pages hereto (each, a
“Purchaser” and collectively, the “Purchasers”).  

        WHEREAS,
subject to the terms and conditions set forth in this Agreement and pursuant to Section
4(2) of the Securities Act of 1933, as amended (the “Securities Act”), the
Company desires to issue and sell to each Purchaser, and each Purchaser, severally and not
jointly, desires to purchase from the Company, securities of the Company as more fully
described in this Agreement.  

        NOW,
THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement, and for
other good and valuable consideration the receipt and adequacy of which are hereby
acknowledged, the Company and each Purchaser, severally and not jointly, agree as follows: 

ARTICLE 1

DEFINITIONS 

         Definitions.       
          In addition to the terms defined elsewhere in this Agreement, the following
          terms have the meanings indicated: 

	  	        “Affiliate” means
any Person that, directly or indirectly through one or more intermediaries, controls or
is controlled by or is under common control with a Person, as such terms are used in and
construed under Rule 144 under the Securities Act. 

	  	        “Business
Day” means any day other than Saturday, Sunday or other day on which commercial
banks in The City of New York are authorized or required by law to remain closed. 

	  	        “Change
of Control” means the occurrence of any of the following in one or a series of
related transactions: (i) an acquisition after the date hereof by an individual or legal
entity or “group” (as described in Rule 13d-5(b)(1) under the Exchange Act) of
more than one-half of the voting rights or equity interests in the Company; (ii) a
replacement of more than one-half of the members of the Company’s board of directors
that is not approved by those individuals who are members of the board of directors on
the date hereof (or other directors previously approved by such individuals); (iii) a
merger or consolidation of the Company or any significant Subsidiary or a sale of more
than one-half of the assets of the Company in one or a series of related transactions,
unless following such transaction or series of transactions, the holders of the Company’s
securities prior to the first such transaction continue to hold at least two-thirds of
the voting rights and equity interests in the surviving entity or acquirer of such
assets; (iv) a recapitalization, reorganization or other transaction involving the
Company or any significant Subsidiary that constitutes or results in a transfer of more
than one-half of the voting rights or equity interests in the Company; (v) consummation
of a “Rule 13e-3 transaction” as defined in Rule 13e-3 under the Exchange Act
with respect to the Company, or (vi) the execution by the Company or its controlling
shareholders of an agreement providing for or reasonably likely to result in any of the
foregoing events. 

392 

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

	  	        “Closing
Date” means the date of the Closing. 

	  	        “Closing
Price” means, for any date, the price determined by the first of the following
clauses that applies: (a) if the Common Stock is then listed or quoted on an Eligible
Market or any other national securities exchange, the closing price per share of the
Common Stock for such date (or the nearest preceding date) on the primary Eligible Market
or exchange on which the Common Stock is then listed or quoted; (b) if prices for
the Common Stock are then quoted on the OTC Bulletin Board, the closing bid price per
share of the Common Stock for such date (or the nearest preceding date) so quoted; (c) if
prices for the Common Stock are then reported in the “Pink Sheets” published by
the National Quotation Bureau Incorporated (or a similar organization or agency
succeeding to its functions of reporting prices), the most recent closing bid price per
share of the Common Stock so reported; or (d) in all other cases, the fair market
value of a share of Common Stock as determined by an independent appraiser selected in
good faith by Purchasers holding a majority of the Securities. 

	  	        “Commission” means
the Securities and Exchange Commission. 

	  	        “Common
Stock” means the common stock of the Company, having no par value per share. 

	  	        “Common
Stock Equivalents” means, collectively, Options and Convertible Securities. 

	  	        “Company
Counsel” means Blair & Roach, LLP, counsel to the Company. 

	  	        “Convertible
Securities” means any stock or securities (other than Options) convertible into or
exercisable or exchangeable for Common Stock. 

	  	        “Effective
Date” means the date that the Registration Statement is first declared effective by
the Commission. 

	  	        “Eligible
Market” means any of the NASDAQ SmallCap Market, the New York Stock Exchange, the
American Stock Exchange or the NASDAQ National Market. 

393 

	  	        “Equity
Conditions” means, with respect to a specified issuance of Common Stock, that each
of the following conditions is satisfied: (i) the number of authorized but unissued and
otherwise unreserved shares of Common Stock is sufficient for such issuance; (ii) such
shares of Common Stock are registered for resale by the Purchasers and may be sold by the
Purchasers pursuant to an effective Registration Statement or all such shares may be sold
without volume restrictions pursuant to Rule 144(k) under the Securities Act; (iii) the
Common Stock is listed or quoted (and is not suspended from trading) on an Eligible
Market and such shares of Common Stock are approved for listing upon issuance; (iv) such
issuance would be permitted in full without violating the rules or regulations of any
Trading Market; (v) no bankruptcy, insolvency or similar proceeding relating to the
Company has been commenced or is pending; (vi) unless the Corporation has obtained
shareholder approval in accordance with the rules and regulations of its Trading Market,
the aggregate amount of Common Stock issued to the Purchasers (taking into account the
current contemplated issuance of Common Stock) is less than 2,127,345 shares; (vii) the
Corporation is not in default with respect to any material obligation hereunder or under
any other Transaction Document; and (viii) there is not pending or announced publicly an
event that with the passage of time and without being cured would constitute a Change of
Control. 

	  	        “Exchange
Act” means the Securities Exchange Act of 1934, as amended. 

	  	        “Excluded
Stock” means the issuance of Common StockCommon Stock (A) upon exercise or
conversion of any options or other securities described in Schedule 3.1(f) (provided that
such exercise or conversion occurs in accordance with the terms thereof, without
amendment or modification, and that the applicable exercise or conversion price or ratio
is described in such schedule) (B) in connection with any issuance of shares or grant of
options to employees, officers, directors or consultants of the Company pursuant to a
stock option plan or other incentive stock plan duly adopted by the Company’s board
of directors or in respect of the issuance of Common StockCommon Stock upon exercise of
any such options or (C) in connection with a transaction involving a merger, business
combination or acquisition of an entity, business or assets, that (i) does not result in
either (x) a Change of Control of the Company or (y) a change in the principal line of
business of the Company and (ii) is not principally for the purpose of obtaining cash. 

	  	        “Filing
Date” means the date that is 30 days after the Closing Date, with respect to the
initial Registration Statement required to be filed hereunder, and, with respect to any
additional Registration Statements that may be required pursuant to Section 6.1, the 30th
day following the date on which the Company first knows, or reasonably should have known,
that such additional Registration Statement is required under such Section. 

	  	        “Lien” means
any lien, charge, claim, security interest, encumbrance, right of first refusal or other
restriction. 

	  	        “Losses” means
any and all losses, claims, damages, liabilities, settlement costs and expenses,
including, without limitation, costs of preparation and reasonable attorneys’ fees. 

	  	        “Options” means
any rights, warrants or options to subscribe for or purchase Common Stock or Convertible
Securities. 

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

394 

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

	  	        “Prospectus” means
the prospectus included in the Registration Statement (including, without limitation, a
prospectus that includes any information previously omitted from a prospectus filed as
part of an effective registration statement in reliance upon Rule 430A promulgated under
the Securities Act), as amended or supplemented by any prospectus supplement, with
respect to the terms of the offering of any portion of the Registrable Securities covered
by the Registration Statement, and all other amendments and supplements to the Prospectus
including post effective amendments, and all material incorporated by reference or deemed
to be incorporated by reference in such Prospectus. 

	  	        “Purchaser
Counsel” has the meaning set forth in Section 6.2(a). 

	  	        “Registrable
Securities” means any Common Stock (including, the Shares and Underlying Shares)
issued or issuable pursuant to the Transaction Documents, together with any securities
issued or issuable upon any stock split, dividend or other distribution, recapitalization
or similar event with respect to the foregoing. 

	  	        “Registration
Statement” means each registration statement required to be filed under Article VI,
including (in each case) the Prospectus, amendments and supplements to such registration
statement or Prospectus, including pre- and post-effective amendments, all exhibits
thereto, and all material incorporated by reference or deemed to be incorporated by
reference in such registration statement. 

	  	        “Required
Effectiveness Date” means the date that is 90 days after the Closing Date, with
respect to the initial Registration Statement required to be filed hereunder; provided,
however, if such Registration Statement is the subject of a full review by the
Commission, the date that is 120 days after the Closing Date. With respect to any
additional Registration Statements that may be required pursuant to Section 6.1, the
“Required Effectiveness Date” means 60th day following the date on which the
Company first knows, or reasonably should have known, that such additional Registration
Statement is required under such Section. 

	  	        “Rule
144,” “Rule 415,” and “Rule 424” means Rule 144, Rule 415 and
Rule 424, respectively, promulgated by the Commission pursuant to the Securities Act, as
such Rules may be amended from time to time, or any similar rule or regulation hereafter
adopted by the Commission having substantially the same effect as such Rule. 

	  	        “Securities” means
the Shares, the Warrants and the Underlying Shares. 

	  	        “Shares” means
an aggregate of [number of shares to be inserted] shares of Common Stock, which are being
issued and sold to the Purchasers at the Closing. 

395 

	  	        “Significant
Subsidiary” means any “significant subsidiary”, as defined in Rule 1-02(w)
of Regulation S-X promulgated by the Commission pursuant to the Exchange Act. 

	  	        “Subsidiary” means
any Person in which the Company, directly or indirectly, owns capital stock or holds an
equity or similar interest. 

	  	        “Trading
Day” means (a) any day on which the Common Stock is listed or quoted and traded on
its primary Trading Market, (b) if the Common Stock is not then listed or quoted and
traded on any Eligible Market, then a day on which trading occurs on the NASDAQ National
Market (or any successor thereto), or (c) if trading ceases to occur on the NASDAQ
National Market (or any successor thereto), any Business Day. 

	  	        “Trading
Market” means the NASDAQ SmallCap Market or any other Eligible Market, or any
national securities exchange, market or trading or quotation facility on which the Common
Stock is then listed or quoted. 

	  	        “Transaction
Documents” means this Agreement, the Warrants, the Transfer Agent Instructions and
any other documents or agreements executed in connection with the transactions
contemplated hereunder. 

	  	        “Transfer
Agent Instructions” means the Irrevocable Transfer Agent Instructions, in the form
of Exhibit D, executed by the Company and delivered to and acknowledged in writing by the
Company’s transfer agent. 

	  	        “Underlying
Shares” means the shares of Common Stock issuable upon exercise of the Warrants. 

	  	        “Volume
Weighted Average Price” means, with respect to any particular Trading Day or for any
particular period, the volume weighted average trading price per share of Common Stock on
such Trading Day or for such period on an Eligible Market as reported by Bloomberg, L.P.,
or any successor performing similar functions. 

	  	        “Warrants” means,
collectively, the Common Stock purchase warrants issued and sold under this Agreement, in
the form of Exhibit A, and any warrants or replacement warrants issued upon exercise,
transfer, exchange or partial exchange of such warrants. 

396 

ARTICLE II

PURCHASE AND SALE 

        2.1        Closing. Subject to the terms and conditions set forth in this Agreement, at the Closing
the Company shall issue and sell to each Purchaser, and each Purchaser shall, severally
and not jointly, purchase from the Company, such number of Shares and a Warrant to
purchase such number of Underlying Shares, each as indicated below such Purchaser’s
name on the signature page of this Agreement, for an aggregate purchase price for such
Purchaser as indicated below such Purchaser’s name on the signature page of this
Agreement. The Closing shall take place at the offices of Proskauer Rose LLP, 1585
Broadway, New York, New York immediately following the execution hereof, or at such other
location or time as the parties may agree. 

        2.2
        Closing Deliveries. 

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

		    (i)                 one
or more stock certificates, free and clear of all restrictive and other           legends
(except as expressly provided in Section 4.1(b) hereof), evidencing such           number
of Shares equal to the number of Shares indicated below such           Purchaser’s
name on the signature page of this Agreement, registered in the           name of such
Purchaser;  

		    (ii)                 a
Warrant, registered in the name of such Purchaser, pursuant to which such
          Purchaser shall have the right to acquire such number of Underlying Shares
          indicated below such Purchaser’s name on the signature page of this
          Agreement, on the terms set forth therein;  

		    (iii)                 a
legal opinion of Company Counsel, in the form of Exhibit B, executed by such
          counsel and delivered to the Purchasers; and  

		    (iv)                 duly
executed Transfer Agent Instructions acknowledged by the Company’s
          transfer agent.  

		    b)                 At
the Closing, each Purchaser shall deliver or cause to be delivered to the
          Company the purchase price indicated below such Purchaser’s name on the
          signature page of this Agreement, in United States dollars and in immediately
          available funds, by wire transfer to an account designated in writing to such
          Purchaser by the Company for such purpose.  

ARTICLE III

REPRESENTATIONS AND
WARRANTIES 

        3.1        
Representations and Warranties of the Company. The Company hereby represents and
warrants to each of the Purchasers as follows:  

		    (a)        Subsidiaries.
The Company has no direct or indirect Subsidiaries other than those listed in
Schedule 3.1(a). Except as disclosed in Schedule 3.1(a), the Company owns,
directly or indirectly, all of the capital stock or comparable equity interests
of each Subsidiary free and clear of any Lien and all the issued and
outstanding shares of capital stock or comparable equity interest of each
Subsidiary are validly issued and are fully paid, non-assessable and free of
preemptive and similar rights, except any such rights as may be held by the
Company.  

397 

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

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

		    (d)       
No
Conflicts. The execution, delivery and performance of the Transaction Documents
by the Company and the consummation by the Company of the transactions
contemplated hereby and thereby do not and will not (i) conflict with or
violate any provision of the Company’s or any Subsidiary’s
certificate or articles of incorporation, bylaws or other organizational or
charter documents, (ii) conflict with, or constitute a default (or an event
that with notice or lapse of time or both would become a default) under, or
give to others any rights of termination, amendment, acceleration or
cancellation (with or without notice, lapse of time or both) of, any agreement,
credit facility, debt or other instrument (evidencing a Company or Subsidiary
debt or otherwise) or other understanding to which the Company or any
Subsidiary is a party or by which any property or asset of the Company or any
Subsidiary is bound or affected, or (iii) result in a violation of any law,
rule, regulation, order, judgment, injunction, decree or other restriction of
any court or governmental authority to which the Company or a Subsidiary is
subject (including federal, provincial and state securities laws and
regulations and the rules and regulations of any self-regulatory organization
to which the Company or its securities are subject), or by which any property
or asset of the Company or a Subsidiary is bound or affected.  

398 

		    (e)       
Issuance
of the Securities. The Securities (including the Underlying Shares) are duly
authorized and, when issued and paid for in accordance with the Transaction
Documents, will be duly and validly issued, fully paid and nonassessable, free
and clear of all Liens and shall not be subject to preemptive rights or similar
rights of stockholders. The Company has reserved from its duly authorized
capital stock the maximum number of Underlying Shares issuable upon exercise of
the Warrants.  

		    (f)       
Capitalization.
The number of shares and type of all authorized, issued and outstanding capital
stock, options and other securities of the Company (whether or not presently
convertible into or exercisable or exchangeable for shares of capital stock of
the Company) is set forth in Schedule 3.1(f). All outstanding shares of capital
stock are duly authorized, validly issued, fully paid and nonassessable and
have been issued in compliance with all applicable U.S. and Canadian securities
laws. Except as disclosed in Schedule 3.1(f), there are no outstanding options,
warrants, script rights to subscribe to, calls or commitments of any character
whatsoever relating to, or securities, rights or obligations convertible into
or exercisable or exchangeable for, or giving any Person any right to subscribe
for or acquire, any shares of Common Stock, or contracts, commitments,
understandings or arrangements by which the Company or any Subsidiary is or may
become bound to issue additional shares of Common Stock, or securities or
rights convertible or exchangeable into shares of Common Stock. Except as
disclosed in Schedule 3.1(f), there are no anti-dilution or price adjustment
provisions contained in any security issued by the Company (or in any agreement
providing rights to security holders) and the issue and sale of the Securities
(including the Underlying Shares) will not obligate the Company to issue shares
of Common Stock or other securities to any Person (other than the Purchasers)
and will not result in a right of any holder of Company securities to adjust
the exercise, conversion, exchange or reset price under such securities. To the
knowledge of the Company, except as specifically disclosed in Schedule 3.1(f),
no Person or group of related Persons beneficially owns (as determined pursuant
to Rule 13d-3 under the Exchange Act), or has the right to acquire, by
agreement with or by obligation binding upon the Company, beneficial ownership
of in excess of 5% of the outstanding Common Stock, ignoring for such purposes
any limitation on the number of shares of Common Stock that may be owned at any
single time.  

		    (g)       
SEC
Reports; Financial Statements. The Company has filed all reports required to be
filed by it under the Exchange Act, including pursuant to Section 13 or 15(d)
thereof, for the two years preceding the date hereof, or such shorter period as
the Company was required by law to file such material, the foregoing materials
(together with any materials filed by the Company under the Exchange Act,
whether or not required) being collectively referred to herein as the “SEC
Reports” and, together with this Agreement and the Schedules to this
Agreement, the “Disclosure Materials”, on a timely basis or has
received a valid extension of such time of filing and has filed any such SEC
Reports prior to the expiration of any such extension. The Company has
delivered to each Purchaser true, correct and complete copies of all SEC
Reports filed within the 10 days preceding the date hereof. As of their
respective dates, the SEC Reports complied in all material respects with the
requirements of the Securities Act and the Exchange Act and the rules and
regulations of the Commission promulgated thereunder, and none of the SEC
Reports, when filed, contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading. The financial statements of the Company
included in the SEC Reports comply in all material respects with applicable
accounting requirements and the rules and regulations of the Commission with
respect thereto as in effect at the time of filing. Such financial statements
have been prepared in accordance with Canadian generally accepted accounting
principles applied on a consistent basis during the periods involved (“GAAP”),
except as may be otherwise specified in such financial statements or the notes
thereto, and fairly present in all material respects the financial position of
the Company and its consolidated subsidiaries as of and for the dates thereof
and the results of operations and cash flows for the periods then ended,
subject, in the case of unaudited statements, to normal, immaterial, year-end
audit adjustments. All material agreements to which the Company or any
Subsidiary is a party or to which the property or assets of the Company or any
Subsidiary are subject are included as part of or specifically identified in
the SEC Reports, to the extent required by the applicable SEC Reports.  

399 

		    (h)       
Material
Changes. Since the date of the latest audited financial statements included
within the SEC Reports, except as specifically disclosed in the SEC Reports or
in Schedule 3.1(h), (i) there has been no event, occurrence or development
that, individually or in the aggregate, has had or that could result in a
Material Adverse Effect, (ii) the Company has not incurred any liabilities
(contingent or otherwise) other than (A) trade payables and accrued expenses
incurred in the ordinary course of business consistent with past practice and
(B) liabilities not required to be reflected in the Company’s financial
statements pursuant to GAAP or required to be disclosed in filings made with
the Commission, (iii) the Company has not altered its method of accounting or
the identity of its auditors, except as disclosed in its SEC Reports, (iv) the
Company has not declared or made any dividend or distribution of cash or other
property to its stockholders or purchased, redeemed or made any agreements to
purchase or redeem any shares of its capital stock, and (v) the Company has not
issued any equity securities to any officer, director or Affiliate, except
pursuant to existing Company stock-based plans.  

		    (i)       
Absence
of Litigation. Except as disclosed in Schedule 3.1(i) or the Company’s
Form 20-F for the period ended December 31, 2003, there is no action, suit,
claim, proceeding, inquiry or investigation before or by any court, public
board, government agency, self-regulatory organization or body pending or, to
the knowledge of the Company, threatened against or affecting the Company or
any of its Subsidiaries that could, individually or in the aggregate, have a
Material Adverse Effect. Schedule 3.1(i) contains a complete list and summary
description of any pending or, to the knowledge of the Company, threatened
proceeding against or affecting the Company or any of its Subsidiaries, without
regard to whether it would, individually or in the aggregate, have a Material
Adverse Effect.  

		    (j)       
Compliance.
Neither the Company nor any Subsidiary (i) is in default under or in violation
of (and no event has occurred that has not been waived that, with notice or
lapse of time or both, would result in a default by the Company or any
Subsidiary under), nor has the Company or any Subsidiary received notice of a
claim that it is in default under or that it is in violation of, any indenture,
loan or credit agreement or any other material agreement or instrument to which
it is a party or by which it or any of its properties is bound (whether or not
such default or violation has been waived), (ii) is in violation of any order
of any court, arbitrator or governmental body, or (iii) is or has been in
violation of any statute, rule or regulation of any governmental authority,
including without limitation all foreign, federal, provincial, state and local
laws relating to taxes, environmental protection, occupational health and
safety, product quality and safety and employment and labor matters, except in
each case as could not, individually or in the aggregate, have or result in a
Material Adverse Effect.  

400 

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

		    (l)       
Certain
Fees. Except for the fees described in Schedule 3.1(l), all of which are
payable to registered broker-dealers, no brokerage or finder’s fees or
commissions are or will be payable by the Company to any broker, financial
advisor or consultant, finder, placement agent, investment banker, bank or
other Person with respect to the transactions contemplated by this Agreement,
and the Company has not taken any action that would cause any Purchaser to be
liable for any such fees or commissions.  

		    (m)       
Private
Placement. Neither the Company nor any Person acting on the Company’s
behalf has sold or offered to sell or solicited any offer to buy the Securities
by means of any form of general solicitation or advertising. Neither the
Company nor any of its Affiliates nor any person acting on the Company’s
behalf has, directly or indirectly, at any time within the past six months,
made any offer or sale of any security or solicitation of any offer to buy any
security under circumstances that would (i) eliminate the availability of the
exemption from registration under Regulation D under the Securities Act in
connection with the offer and sale of the Securities as contemplated hereby or
(ii) cause the offering of the Securities pursuant to the Transaction Documents
to be integrated with prior offerings by the Company for purposes of any
applicable law, regulation or stockholder approval provisions, including,
without limitation, under the rules and regulations of any Trading Market. The
Company is not, and is not an Affiliate of, an “investment company” within
the meaning of the Investment Company Act of 1940, as amended. The Company is
not a United States real property holding corporation within the meaning of the
Foreign Investment in Real Property Tax Act of 1980.  

		    (n)       
Form
F-3 Eligibility. The Company is eligible to register its Common Stock for
resale by the Purchasers using Form F-3 promulgated under the Securities Act.  

		    (o)       
Listing
and Maintenance Requirements. The Company has not, in the two years preceding
the date hereof, received notice (written or oral) from any Trading Market on
which the Common Stock is or has been listed or quoted to the effect that the
Company is not in compliance with the listing or maintenance requirements of
such Trading Market. The Company is, and has no reason to believe that it will
not in the foreseeable future continue to be, in compliance with all such
listing and maintenance requirements.  

401 

		    (p)       
Registration
Rights. Except as described in Schedule 3.1(p), the Company has not granted or
agreed to grant to any Person any rights (including “piggy-back” registration
rights) to have any securities of the Company registered with the Commission or
any other governmental authority that have not been satisfied.  

		    (q)       
Application
of Takeover Protections. There is no control share acquisition, business
combination, poison pill (including any distribution under a rights agreement)
or other similar anti-takeover provision under the Company’s charter
documents or the laws of its state of incorporation that is or could become
applicable to any of the Purchasers as a result of the Purchasers and the
Company fulfilling their obligations or exercising their rights under the
Transaction Documents, including, without limitation, as a result of the
Company’s issuance of the Securities and the Purchasers’ ownership of
the Securities.  

		    (r)       
Disclosure.
The Company confirms that neither it nor any other Person acting on its behalf
has provided any of the Purchasers or their agents or counsel with any
information that constitutes or might constitute material, nonpublic
information. The Company understands and confirms that each of the Purchasers
will rely on the foregoing representations in effecting transactions in
securities of the Company. All disclosure materials provided to the Purchasers
regarding the Company, its business and the transactions contemplated hereby,
including the Schedules to this Agreement, furnished by or on behalf of the
Company are true and correct and do not contain any untrue statement of a
material fact or omit to state any material fact necessary in order to make the
statements made therein, in the light of the circumstances under which they
were made, not misleading. No event or circumstance has occurred or information
exists with respect to the Company or any of its Subsidiaries or its or their
business, properties, prospects, operations or financial conditions, which,
under applicable law, rule or regulation, requires public disclosure or
announcement by the Company but which has not been so publicly announced or
disclosed. The Company acknowledges and agrees that (i) no Purchaser makes or
has made (i) any representations or warranties with respect to the transactions
contemplated hereby other than those specifically set forth in Section 3.2 or
(ii) any statement, commitment or promise to the Company or, to its knowledge,
any of its representatives which is or was an inducement to the Company to
enter into this Agreement or otherwise or (ii) any statement, commitment or
promise to the Company or, to its knowledge, any of its representatives which
is or was an inducement to the Company to enter into this Agreement or
otherwise.  

		    (s)       
Acknowledgment
Regarding Purchasers’ Purchase of Securities. The Company acknowledges and
agrees that each of the Purchasers is acting solely in the capacity of an arm’s
length purchaser with respect to the Company and to this Agreement and the
transactions contemplated hereby. The Company further acknowledges that no
Purchaser is acting as a financial advisor or fiduciary of the Company (or in
any similar capacity) with respect to this Agreement and the transactions
contemplated hereby and any advice given by any Purchaser or any of their
respective representatives or agents in connection with this Agreement and the
transactions contemplated hereby is merely incidental to the Purchasers’ purchase
of the Securities. The Company further represents to each Purchaser that the
Company’s decision to enter into this Agreement has been based solely on
the independent evaluation of the transactions contemplated hereby by the
Company and its representatives and the Purchasers’ representations and
warranties made in this Agreement.  

402 

		    (t)       
Patents
and Trademarks. The Company and the Subsidiaries have, or have rights to use,
all patents, patent applications, trademarks, trademark applications, service
marks, trade names, copyrights, licenses and other similar rights that are
necessary or material for use in connection with their respective businesses as
described in the SEC Reports and which the failure to so have could have a
Material Adverse Effect (collectively, the “Intellectual Property
Rights”). Neither the Company nor any Subsidiary has received a written
notice that the Intellectual Property Rights used by the Company or any
Subsidiary violates or infringes upon the rights of any Person. To the
knowledge of the Company, all such Intellectual Property Rights are enforceable
and there is no existing material infringement by another Person of any of the
Intellectual Property Rights.  

		    (u)       
Insurance.
The Company and the Significant Subsidiaries are insured by insurers of
recognized financial responsibility against such losses and risks and in such
amounts as are prudent and customary in the businesses in which the Company and
the Subsidiaries are engaged. Neither the Company nor any Significant
Subsidiary has any reason to believe that it will not be able to renew its
existing insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary to continue its
business without a significant increase in cost.  

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

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

403 

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

		    (y)       
Going
Concern. The Company and the Subsidiaries have no knowledge (upon receipt of
the proceeds of this transaction) that PricewaterhouseCoopers LLP, the Company’s
independent public accountants, will issue an audit letter containing a “going
concern” opinion in connection with the Company’s annual report on
Form 20-F pursuant to Section 13 or 15(d) under the Exchange Act for the fiscal
year ended December 31, 2004 or otherwise.  

		    (z)       
Internal
Accounting Controls. The Company and the Significant Subsidiaries maintain a
system of internal accounting controls sufficient to provide reasonable
assurance that (i) transactions are executed in accordance with management’s
general or specific authorizations, (ii) transactions are recorded as necessary
to permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain asset accountability, (iii)
access to assets is permitted only in accordance with management’s general
or specific authorization, and (iv) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate
action is taken with respect to any differences.  

		    (aa)       
Sarbanes-Oxley
Act. The Company is in compliance with applicable requirements of the
Sarbanes-Oxley Act of 2002 and applicable rules and regulations promulgated by
the Commission thereunder in effect as of the date of this Agreement,
except where such noncompliance could not be reasonably expected to have,
individually or in the aggregate, a Material Adverse Effect.  

404 

        3.2       
     Representations  and  Warranties  of the  Purchasers.  Each  Purchaser  hereby,  as
to  itself  only and for no other Purchaser, represents and warrants to the Company as
follows: 

		    (a)       
Organization;
Authority. Such Purchaser is an entity duly organized, validly existing and in
good standing under the laws of the jurisdiction of its organization with the
requisite corporate or partnership power and authority to enter into and to
consummate the transactions contemplated by the Transaction Documents and
otherwise to carry out its obligations hereunder and thereunder. The purchase
by such Purchaser of the Shares and the Warrants hereunder has been duly
authorized by all necessary action on the part of such Purchaser. This
Agreement has been duly executed and delivered by such Purchaser and
constitutes the valid and binding obligation of such Purchaser, enforceable
against it in accordance with its terms.  

		    (b)       
Investment
Intent. Such Purchaser is acquiring the Securities for investment and not with
a view to or for distributing or reselling such Securities or any part thereof
in violation of applicable securities laws, without prejudice, however, to such
Purchaser’s right, subject to the provisions of this Agreement, at all
times to sell or otherwise dispose of all or any part of such Securities
pursuant to an effective registration statement under the Securities Act or
under an exemption from such registration and in compliance with applicable
federal and state securities laws. Nothing contained herein shall be deemed a
representation or warranty by such Purchaser to hold Securities for any period
of time. The Purchaser has no intention of reselling the Securities in the
Province of Ontario.  

		    (c)       
Purchaser
Status. At the time such Purchaser was offered the Shares and the Warrants, it
was, and at the date hereof it is, an “accredited investor” as
defined in Rule 501(a) under the Securities Act.  

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

405 

ARTICLE IV
OTHER AGREEMENTS OF THE
PARTIES 

        4.1        
Transfer Restrictions.  

		    (a)                 Securities
may only be disposed of pursuant to an effective registration           statement under
the Securities Act or pursuant to an available exemption from           the registration
requirements of the Securities Act, and in compliance with any           applicable state
securities laws or applicable Canadian securities laws. In           connection with any
transfer of Securities other than pursuant to an effective           registration
statement or to the Company or pursuant to Rule 144(k), except as           otherwise set
forth herein, the Company may require the transferor to provide to           the Company
an opinion of counsel selected by the transferor, the form and           substance of
which opinion shall be reasonably satisfactory to the Company, to           the effect
that such transfer does not require registration under the Securities           Act or
applicable Canadian securities laws. Notwithstanding the foregoing, the           Company
hereby consents to and agrees to register on the books of the Company           and with
its transfer agent, without any such legal opinion, any transfer of           Securities
by a Purchaser to an Affiliate of such Purchaser, provided that the           transferee
certifies to the Company that it is an “accredited           investor” as
defined in Rule 501(a) under the Securities Act.  

		    (b)                 The
Purchasers agree to the imprinting, so long as is required by this Section
          4.1(b), of the following legend on any certificate evidencing Securities:  

	  	
[NEITHER] THESE SECURITIES [NOR THE
SECURITIES INTO WHICH THESE SECURITIES ARE           EXERCISABLE] HAVE [NOT] BEEN
REGISTERED WITH THE SECURITIES AND EXCHANGE           COMMISSION OR THE SECURITIES
COMMISSION OF ANY STATE IN RELIANCE UPON AN           EXEMPTION FROM REGISTRATION UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE           “SECURITIES ACT”), AND,
ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT           PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR           PURSUANT TO AN AVAILABLE
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE           REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN COMPLIANCE WITH           APPLICABLE STATE
SECURITIES LAWS OR BLUE SKY LAWS. NOTWITHSTANDING THE           FOREGOING, THESE
SECURITIES [AND THE SECURITIES ISSUABLE UPON EXERCISE OF THESE           SECURITIES] MAY
BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR           OTHER LOAN OR
FINANCING ARRANGEMENT SECURED BY SUCH SECURITIES.  

406 

	  	
Certificates
evidencing Securities shall not be required to contain such legend or any other legend
(i) while a Registration Statement covering the resale of such Securities is effective
under the Securities Act, or (ii) following any sale of such Securities pursuant to Rule
144, or (iii) if such Securities are eligible for sale under Rule 144(k), or (iv) if such
legend is not required under applicable requirements of the Securities Act or applicable
Canadian securities legislation (including judicial interpretations and pronouncements
issued by the Staff of the Commission). The Company shall cause its counsel to issue the
legal opinion included in the Transfer Agent Instructions to the Company’s transfer
agent on the Effective Date. Following the Effective Date or at such earlier time as a
legend is no longer required for certain Securities, the Company will no later than three
Trading Days following the delivery by a Purchaser to the Company or the Company’s
transfer agent of a legended certificate representing such Securities, deliver or cause
to be delivered to such Purchaser a certificate representing such Securities that is free
from all restrictive and other legends. The Company may not make any notation on its
records or give instructions to any transfer agent of the Company that enlarge the
restrictions on transfer set forth in this Section. Until a Registration Statement
covering the resale of the Securities is effective under the Securities Act, the Company
will not effect or publicly announce its intention to effect any exchange,
recapitalization or other transaction that effectively requires or rewards physical
delivery of certificates evidencing the Common Stock.  

		    (c)                 The
Company acknowledges and agrees that a Purchaser may from time to time           pledge
or grant a security interest in some or all of the Securities in           connection
with a bona fide margin agreement or other loan or financing           arrangement
secured by the Securities and, if required under the terms of such           agreement,
loan or arrangement, such Purchaser may transfer pledged or secured           Securities
to the pledgees or secured parties. Such a pledge or transfer would           not be
subject to approval of the Company and no legal opinion of the pledgee,           secured
party or pledgor shall be required in connection therewith. Further, no           notice
shall be required of such pledge. At the appropriate Purchaser’s           expense,
the Company will execute and deliver such reasonable documentation as a           pledgee
or secured party of Securities may reasonably request in connection with           a
pledge or transfer of the Securities, including the preparation and filing of
          any required prospectus supplement under Rule 424(b)(3) of the Securities Act
or           other applicable provision of the Securities Act to appropriately amend the
list           of Selling Stockholders thereunder.  

407 

        4.2        
Furnishing of Information. As long as any Purchaser owns Securities, the Company covenants
to timely file (or obtain extensions in respect thereof and file within the applicable
grace period) all reports required to be filed by the Company after the date hereof
pursuant to the Exchange Act. Upon the request of any Purchaser, the Company shall deliver
to such Purchaser a written certification of a duly authorized officer as to whether it
has complied with the preceding sentence. As long as any Purchaser owns Securities, if the
Company is not required to file reports pursuant to such laws, it will prepare and furnish
to the Purchasers and make publicly available in accordance with paragraph (c) of Rule 144
such information as is required for the Purchasers to sell the Securities under Rule 144.
The Company further covenants that it will take such further action as any holder of
Securities may reasonably request to satisfy the provisions of Rule 144 applicable to the
issuer of securities relating to transactions for the sale of securities pursuant to Rule
144.  

        4.3        
Integration. The Company shall not, and shall use its best efforts to ensure that no
Affiliate of the Company shall, sell, offer for sale or solicit offers to buy or otherwise
negotiate in respect of any security (as defined in Section 2 of the Securities Act) that
would be integrated with the offer or sale of the Securities in a manner that would
require the registration under the Securities Act of the sale of the Securities to the
Purchasers or that would be integrated with the offer or sale of the Securities for
purposes of the rules and regulations of any Trading Market.  

        4.4       
Reservation of Securities. The Company shall maintain a reserve from its duly authorized
shares of Common Stock for issuance pursuant to the Transaction Documents in such amount
as may be required to fulfill its obligations in full under the Transaction Documents. In
the event that at any time the then authorized shares of Common Stock are insufficient for
the Company to satisfy its obligations in full under the Transaction Documents, the
Company shall promptly take such actions as may be required to increase the number of
authorized shares.  

        4.5        
Subsequent Placements.  

		    (a)                 From
the date hereof until the Effective Date, the Company will not, directly or
          indirectly, offer, sell, grant any option to purchase, or otherwise dispose of
          (or announce any offer, sale, grant or any option to purchase or other
          disposition of) any of its or the Significant Subsidiaries’ equity or
          equity equivalent securities, including without limitation any debt, preferred
          stock or other instrument or security that is, at any time during its life and
          under any circumstances, convertible into or exchangeable or exercisable for
          Common Stock or Common Stock Equivalents, but not including any Excluded Stock,
          (any such offer, sale, grant, disposition or announcement being referred to as
a           “Subsequent Placement”), except as permitted by this Section 4.5.  

		    (b)                 From
the Effective Date until the one year anniversary thereof, the Company will
          not, directly or indirectly, effect any Subsequent Placement unless the Company
          shall have first complied with this Section 4.5(b).  

		    (i)         The
Company shall deliver to each Purchaser a written notice (the “Offer”)
of any proposed or intended issuance or sale or exchange of the securities
being offered (the “Offered Securities”) in a Subsequent Placement,
which Offer shall (w) identify and describe the Offered Securities, (x)
describe the price and other terms upon which they are to be issued, sold or
exchanged, and the number or amount of the Offered Securities to be issued,
sold or exchanged, (y) identify the persons or entities to which or with which
the Offered Securities are to be offered, issued, sold or exchanged and (z)
offer to issue and sell to or exchange with each Purchaser (A) a pro rata
portion of fifty percent (50%) of the Offered Securities based on such Purchaser’s
pro rata portion of the aggregate purchase price paid by the Purchasers for all
of the Shares purchased hereunder (the “Basic Amount”), and (B) with
respect to each Purchaser that elects to purchase its Basic Amount, any
additional portion of the Offered Securities attributable to the Basic Amounts
of other Purchasers as such Purchaser shall indicate it will purchase or
acquire should the other Purchasers subscribe for less than their Basic Amounts
(the “Undersubscription Amount”).  

408 

		    (ii)         To
accept an Offer, in whole or in part, a Purchaser must deliver a written notice
to the Company prior to the end of the five (5) Trading Day period of the
Offer, setting forth the portion of the Purchaser’s Basic Amount that such
Purchaser elects to purchase and, if such Purchaser shall elect to purchase all
of its Basic Amount, the Undersubscription Amount, if any, that such Purchaser
elects to purchase (in either case, the “Notice of Acceptance”),
provided that the Purchaser may also give a Notice of Acceptance at anytime
prior to the date that is 10 days prior to the closing of such Subsequent
Placement. If the Basic Amounts subscribed for by all Purchasers are less than
the total of all of the Basic Amounts, then each Purchaser who has set forth an
Undersubcription Amount in its Notice of Acceptance shall be entitled to
purchase, in addition to the Basic Amounts subscribed for, the
Undersubscription Amount it has subscribed for; provided, however, that if the
Undersubscription Amounts subscribed for exceed the difference between the
total of all the Basic Amounts and the Basic Amounts subscribed for (the “Available
Undersubscription Amount”), each Purchaser who has subscribed for any
Undersubscription Amount shall be entitled to purchase on that portion of the
Available Undersubscription Amount as the Basic Amount of such Purchaser bears
to the total Basic Amounts of all Purchasers that have subscribed for
Undersubscription Amounts, subject to rounding by the Board of Directors to the
extent its deems reasonably necessary.  

		    (iii)         The
Company shall have 120 Trading Days from the expiration of the five Trading Day
period set forth in Section 4.5(b)(ii) above to issue, sell or exchange (or any
binding commitment thereto) all or any part of such Offered Securities as to
which a Notice of Acceptance has not been given by the Purchasers (the
“Refused Securities”), but only to the offerees described in the
Offer and only upon terms and conditions (including, without limitation, unit
prices and interest rates) that are not more favorable to the acquiring person
or persons or less favorable to the Company than those set forth in the Offer.  

		    (iv)         In
the event the Company shall propose to sell less than all the Refused
Securities (any such sale to be in the manner and on the terms specified in
Section 4.5(b)(iii) above), then each Purchaser may, at its sole option and in
its sole discretion, reduce the number or amount of the Offered Securities
specified in its Notice of Acceptance to an amount that shall be not less than
the number or amount of the Offered Securities that the Purchaser elected to
purchase pursuant to Section 4.5(b)(ii) above multiplied by a fraction, (i) the
numerator of which shall be the number or amount of Offered Securities the
Company actually proposes to issue, sell or exchange (including Offered
Securities to be issued or sold to Purchasers pursuant to Section 4.5(b)(ii)
above prior to such reduction) and (ii) the denominator of which shall be the
original amount of the Offered Securities. In the event that any Purchaser so
elects to reduce the number or amount of Offered Securities specified in its
Notice of Acceptance, the Company may not issue, sell or exchange more than the
reduced number or amount of the Offered Securities unless and until such
securities have again been offered to the Purchasers in accordance with Section
4.5(b)(i) above.  

409 

		    (v)         Upon
the closing of the issuance, sale or exchange of all or less than all of the
Refused Securities, the Purchasers shall acquire from the Company, and the
Company shall issue to the Purchasers, the number or amount of Offered
Securities specified in the Notices of Acceptance, as reduced pursuant to
Section 4.5(b)(iv) above if the Purchasers have so elected, upon the terms and
conditions specified in the Offer. The purchase by the Purchasers of any
Offered Securities is subject in all cases to the preparation, execution and
delivery by the Company and the Purchasers of a purchase agreement relating to
such Offered Securities reasonably satisfactory in form and substance to the
Purchasers and their respective counsel.  

		    (vi)                            Any
Offered Securities not acquired by the Purchasers or other persons in
          accordance with Section 4.5(b)(iii) above may not be issued, sold or exchanged
          until they are again offered to the Purchasers under the procedures specified
in           this Agreement.  

		    (c)                 The
restrictions contained in paragraph (b) of this Section 4.5 shall not apply           to
Excluded Stock.  

        4.6        
Securities Laws Disclosure; Publicity. The Company shall, on or before 8:30 a.m., New York
City time, on the Closing Date, issue a press release acceptable to the Purchasers
disclosing all material terms of the transactions contemplated hereby. On the Closing
Date, the Company shall file a Current Report on Form 6-K with the Commission (the
“6-K Filing”) describing the terms of the transactions contemplated by the
Transaction Documents and including as exhibits to such Current Report on Form 6-K this
Agreement and the form of the Warrants, in the form required by the Exchange Act.
Thereafter, the Company shall timely file any filings and notices required by the
Commission or applicable law with respect to the transactions contemplated hereby and
provide copies thereof to the Purchasers promptly after filing. Except with respect to the
6-K Filing (a copy of which will be provided to the Purchasers for their review as early
as practicable prior to its filing), the Company shall, at least two Trading Days prior to
the filing or dissemination of any disclosure required by this paragraph, provide a copy
thereof to the Purchasers for their review. The Company and the Purchasers shall consult
with each other in issuing any press releases or otherwise making public statements or
filings and other communications with the Commission or any regulatory agency or Trading
Market with respect to the transactions contemplated hereby, and neither party shall issue
any such press release or otherwise make any such public statement, filing or other
communication without the prior consent of the other, except if such disclosure is
required by law, in which case the disclosing party shall promptly provide the other party
with prior notice of such public statement, filing or other communication. Notwithstanding
the foregoing, the Company shall not publicly disclose the name of any Purchaser, or
include the name of any Purchaser in any filing with the Commission or any regulatory
agency or Trading Market, without the prior written consent of such Purchaser, except to
the extent such disclosure (but not any disclosure as to the controlling Persons thereof)
is required by subpoena, applicable law or Trading Market regulations, in which case the
Company shall provide the Purchasers with prior notice of such disclosure. The Company
shall not, and shall cause each of its Significant Subsidiaries and its and each of their
respective officers, directors, employees and agents not to, provide any Purchaser with
any material nonpublic information regarding the Company or any of its Subsidiaries from
and after the filing of the 6-K Filing without the express written consent of such
Purchaser. In the event of a breach of the foregoing covenant by the Company, any of its
Significant Subsidiaries, or any of its or their respective officers, directors, employees
and agents, in addition to any other remedy provided herein or in the Transaction
Documents, a Purchaser shall have the right to make a public disclosure, in the form of a
press release, public advertisement or otherwise, of such material nonpublic information
without the prior approval by the Company, its Subsidiaries, or any of its or their
respective officers, directors, employees or agents. No Purchaser shall have any liability
to the Company, its Subsidiaries, or any of its or their respective officers, directors,
employees, shareholders or agents for any such disclosure made as a result of a breach of
the foregoing covenant. Subject to the foregoing, neither the Company nor any Purchaser
shall issue any press releases or any other public statements with respect to the
transactions contemplated hereby; provided, however, that the Company shall be entitled,
without the prior approval of any Purchaser, to make any press release or other public
disclosure with respect to such transactions (i) in substantial conformity with the 6-K
Filing and contemporaneously therewith and (ii) as is required by applicable law and
regulations (provided that in the case of clause (i) each Purchaser shall be consulted by
the Company in connection with any such press release or other public disclosure prior to
its release). Each press release disseminated during the 12 months preceding the date of
this Agreement did not at the time of release contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary in order
to make the statements therein, in light of the circumstances under which they are made,
not misleading.  

410 

        4.7        
Use of Proceeds. Except as set forth on Schedule 4.7, the Company shall use the net
proceeds from the sale of the Securities hereunder for any legitimate corporate purpose
including mergers, acquisitions and business combinations, but not (i) for the
satisfaction of any portion of the Company’s debt (other than payment of trade
payables, and accrued expenses in the ordinary course of the Company’s business and
prior practices), (ii) to redeem any Company equity or equity-equivalent securities, or
(iii) to settle any outstanding litigation.  

        4.8        
Reimbursement. If any Purchaser or any of its Affiliates or any officer, director,
partner, controlling person, employee or agent of a Purchaser or any of its Affiliates (a
“Related Person”) becomes involved in any capacity in any Proceeding brought by
or against any Person in connection with or as a result of the transactions contemplated
by the Transaction Documents, the Company will indemnify and hold harmless such Purchaser
or Related Person for its reasonable legal and other expenses (including the costs of any
investigation, preparation and travel) and for any Losses incurred in connection
therewith, as such expenses or Losses are incurred, excluding only Losses that result
directly from such Purchaser’s or Related Person’s gross negligence or willful
misconduct. In addition, the Company shall indemnify and hold harmless each Purchaser and
Related Person from and against any and all Losses, as incurred, arising out of or
relating to any breach by the Company of any of the representations, warranties or
covenants made by the Company in this Agreement or any other Transaction Document, or any
allegation by a third party that, if true, would constitute such a breach. The conduct of
any Proceedings for which indemnification is available under this paragraph shall be
governed by Section 6.4(c) below. The indemnification obligations of the Company under
this paragraph shall be in addition to any liability that the Company may otherwise have
and shall be binding upon and inure to the benefit of any successors, assigns, heirs and
personal representatives of the Purchasers and any such Related Persons. The Company also
agrees that neither the Purchasers nor any Related Persons shall have any liability to the
Company or any Person asserting claims on behalf of or in right of the Company in
connection with or as a result of the transactions contemplated by the Transaction
Documents, except to the extent that any Losses incurred by the Company result from the
gross negligence or willful misconduct of the applicable Purchaser or Related Person in
connection with such transactions. If the Company breaches its obligations under any
Transaction Document, then, in addition to any other liabilities the Company may have
under any Transaction Document or applicable law, the Company shall pay or reimburse the
Purchasers on demand for all costs of collection and enforcement (including reasonable
attorneys fees and expenses). Without limiting the generality of the foregoing, the
Company specifically agrees to reimburse the Purchasers on demand for all costs of
enforcing the indemnification obligations in this paragraph. Each Purchaser agrees to
indemnify and hold harmless the Company for any Event Payments that the Company makes to
the extent that, but only to the extent that, such Event Payments are payable as a result
of an action or statement of such Purchaser in violation of this Agreement or U.S.
securities laws.  

411 

ARTICLE V
CONDITIONS 

        5.1        
Conditions Precedent to the Obligations of the Purchasers. The obligation of each
Purchaser to acquire Securities at the Closing is subject to the satisfaction or waiver by
such Purchaser, at or before the Closing, of each of the following conditions:  

		    (a)       
Representations
and Warranties. The representations and warranties of the Company contained
herein shall be true and correct in all material respects as of the date when
made and as of the Closing as though made on and as of such date; and  

		    (b)       
Performance.
The Company and each other Purchaser shall have performed, satisfied and
complied in all material respects with all covenants, agreements and conditions
required by the Transaction Documents to be performed, satisfied or complied
with by it at or prior to the Closing.  

        5.2        
Conditions Precedent to the Obligations of the Company. The obligation of the Company to
sell Securities at the Closing is subject to the satisfaction or waiver by the Company, at
or before the Closing, of each of the following conditions:  

		    (a)       
Representations
and Warranties. The representations and warranties of the Purchasers contained
herein shall be true and correct in all material respects as of the date when
made and as of the Closing Date as though made on and as of such date; and  

		    (b)       
Performance.
The Purchasers shall have performed, satisfied and complied in all material
respects with all covenants, agreements and conditions required by the
Transaction Documents to be performed, satisfied or complied with by the
Purchasers at or prior to the Closing.  

412 

ARTICLE VI
REGISTRATION RIGHTS 

        6.1        
Shelf Registration 

		    (a)                 As
promptly as possible, and in any event on or prior to the Filing Date, the
          Company shall prepare and file with the Commission a “Shelf”          Registration
Statement covering the resale of all Registrable Securities for an           offering to
be made on a continuous basis pursuant to Rule 415. The Registration           Statement
shall be on Form F-3 (except if the Company is not then eligible to           register
for resale the Registrable Securities on Form F-3, in which case such
          registration shall be on another appropriate form in accordance herewith as the
          Purchasers may consent) and shall contain (except if otherwise directed in
          writing by the Purchasers) the “Plan of Distribution” attached hereto
          as Exhibit C.  

		    (b)        The
Company shall use its best efforts to cause the Registration Statement to be
declared effective by the Commission as promptly as possible after the filing
thereof, but in any event prior to the Required Effectiveness Date, and shall
use its best efforts to keep the Registration Statement continuously effective
under the Securities Act until the fifth anniversary of the Effective Date or
such earlier date when all Registrable Securities covered by such Registration
Statement have been sold publicly or may be sold pursuant to paragraph (k) of
Rule 144 (“Effectiveness Period”).  

		    (c)                 The
Company shall notify each Purchaser in writing promptly (and in any event
          within one Trading Day) after receiving notification from the Commission that
          the Registration Statement has been declared effective.  

		    (d)        Upon
the occurrence of any Event (as defined below) and on every monthly anniversary
thereof until the applicable Event is cured, as partial relief for the damages
suffered therefrom by the Purchasers (which remedy shall not be exclusive of
any other remedies available under this Agreement, at law or in equity), the
Company shall pay to each Purchaser an amount in cash, as liquidated damages
and not as a penalty, equal to 1% of the greater of (i) aggregate purchase
price paid by such Purchaser hereunder and (ii) the Market Price of the Shares
then outstanding for the first month and 2% for each month thereafter, prorated
for any partial month. The payments to which a Purchaser shall be entitled
pursuant to this Section 6.1(d) are referred to herein as “Event Payments”.
In the event that (i) an Event has occurred and is continuing, (ii) the Event
is the failure to have the Registration Statement declared effective on or
prior to the Required Effectiveness Date and (iii) the occurrence of such Event
and the failure to cure such Event is in no way due to any action or inaction
of the Company, including, without limitation, the failure to timely file any
document with or respond to any request by or inquiry of the Commission and the
Company has complied with all of its obligations under this Agreement, then the
aggregate Event Payments associated with such Event shall not exceed 5% of the
greater of (i) the aggregate purchase price paid by Purchasers hereunder and
(ii) the Market Price of the Shares. Any Event Payments payable pursuant to the
terms hereof shall apply on a pro-rata basis for any portion of a month prior
to the cure of an Event. In the event the Company fails to make Event Payments
in a timely manner, such Event Payments shall bear interest at the rate of 1.5%
per month (prorated for partial months) until paid in full.  

		For such
purposes, each of the following shall constitute an “Event”:  

		    (i)                            the
Registration Statement is not filed on or prior to the Filing Date or is           not
declared effective on or prior to the Required Effectiveness Date;  

413 

		    (ii)        after the Effective Date, a Purchaser is not
permitted to sell Registrable           Securities under the Registration Statement, (or
a subsequent Registration           Statement filed in replacement thereof) for any
reason, unless the sole cause of           such reason was the action, or consequence of
an action, of such Purchaser, for           five or more Trading Days (whether or not
consecutive);  

		    (iii)                            after
the Effective Date, any Registrable Securities covered by such           Registration
Statement are not listed on an Eligible Market directly or           indirectly due to an
action or inaction of the Company;  

		    (iv)                            the
Common Stock is not listed or quoted, or is suspended from trading, on an
          Eligible Market for a period of five Trading Days (which need not be
consecutive           Trading Days);  

		    (v)                            the
Company fails for any reason to deliver a certificate evidencing any           Securities
to a Purchaser within five Trading Days after delivery of such           certificate is
required pursuant to any Transaction Document or the exercise           rights of the
Purchasers pursuant to the Transaction Documents are otherwise           suspended for
any reason, unless the sole cause of such failure was the action,           or
consequence of an action, of such Purchaser; or  

		    (vi)                            the
Company fails to have available a sufficient number of authorized but           unissued
and otherwise unreserved shares of Common Stock available to issue           Underlying
Shares upon any exercise of the Warrants or, at any time following           the
Effective Date, any Shares or Underlying Shares are not listed on an           Eligible
Market.  

414 

		    (e)                 [Reserved]  

		    (f)                 Other
than as contemplated under Section 6.7, the Company shall not, prior to           the
Effective Date of the Registration Statement, prepare and file with the
          Commission a registration statement relating to an offering for its own account
          or the account of others under the Securities Act of any of its equity
          securities.  

		    (g)        Subject
to the terms of this Section 6.1(g), the Company may elect to pay Event
Payments in Common Stock. The Company may make such election by providing each
Purchaser not less than twelve (12) Trading Days’ prior written notice of
the date and amount of such payment. In the event that the Company elects to
pay Event Payments in shares of Common Stock, the number of shares of Common
Stock to be issued to each Purchaser shall be (i) determined by dividing the
total Event Payments then payable to such Purchaser by the Payment Stock Price
(as defined below) as of the applicable payment date, and rounding up to the
nearest whole share, and (ii) paid to such Purchaser in accordance with Section
6.1(h) below. The term “Payment Stock Price” shall mean 95% of the
arithmetic average of the Volume Weighted Average Prices of Common Stock for
the ten (10) consecutive Trading Days immediately prior to the applicable
payment date (not including such date), as appropriately adjusted for any stock
dividend, stock split, stock combination or other similar transaction during
such ten (10) Trading Day period. Notwithstanding anything to the contrary in
this Section 6.1(g), the Company may not pay dividends by issuing Common Stock
(and shall pay such dividends in cash) unless, at such time the Equity
Conditions are satisfied (or waived in writing by the applicable Purchaser)
with respect to such Common Stock and all of the Shares and Underlying Shares.  

		    (h)        In
the event that any Event Payment is paid in Common Stock, the Corporation
shall, on or before the third Trading Day following the applicable payment
date, (i) issue and deliver to such Purchaser a certificate, registered in the
name of the Purchaser or its designee, for the number of shares of Common Stock
to which the Purchaser shall be entitled, or (ii) at all times after the
Purchaser has notified the Corporation that this clause (ii) shall apply,
credit the number of shares of Common Stock to which the Purchaser shall be
entitled to the Purchaser’s or its designee’s balance account with
The Depository Trust Corporation (“DTC”) through its Deposit
Withdrawal Agent Commission System.  

415 

        6.2        
Registration Procedures. (i) In connection with the Company's registration
obligations hereunder, the Company shall:  

		    (a)                 Not
less than three Trading Days prior to the filing of a Registration Statement           or
any related Prospectus or any amendment, or not less than one Trading Day for
          any supplement thereto (including any document that would be incorporated or
          deemed to be incorporated therein by reference), the Company shall (i) furnish
          to each Purchaser and any counsel designated by any Purchaser (each, a
          “Purchaser Counsel”, and Mainfield Enterprises Inc. has initially
          designated Proskauer Rose LLP as its Purchaser Counsel) copies of all such
          documents proposed to be filed, which documents (other than those incorporated
          or deemed to be incorporated by reference) will be subject to the review of
each           such Purchaser and Purchaser Counsel, and (ii) cause its officers and
directors,           counsel and independent certified public accountants to respond to
such           inquiries as shall be necessary, in the reasonable opinion of respective
          counsel, to conduct a reasonable investigation within the meaning of the
          Securities Act. The Company shall not file a Registration Statement or any such
          Prospectus or any amendments or supplements thereto to which Purchasers holding
          a majority of the Registrable Securities shall reasonably object in writing. It
          shall be unreasonable to object to any filing or disclosure required by
          applicable U.S. securities laws.  

		    (b)                 (i)
Prepare and file with the Commission such amendments, including           post-effective
amendments, to each Registration Statement and the Prospectus           used in
connection therewith as may be necessary to keep the Registration           Statement
continuously effective as to the applicable Registrable Securities for           the
Effectiveness Period and prepare and file with the Commission such           additional
Registration Statements in order to register for resale under the           Securities
Act all of the Registrable Securities; (ii) cause the related           Prospectus to be
amended or supplemented by any required Prospectus supplement,           and as so
supplemented or amended to be filed pursuant to Rule 424; (iii)           respond as
promptly as reasonably possible, and in any event within ten days, to           any
comments received from the Commission with respect to the Registration
          Statement or any amendment thereto and as promptly as reasonably possible
          provide the Purchasers true and complete copies of all correspondence from and
          to the Commission relating to the Registration Statement; and (iv) comply in
all           material respects with the provisions of the Securities Act and the
Exchange Act           with respect to the disposition of all Registrable Securities
covered by the           Registration Statement during the applicable period in
accordance with the           intended methods of disposition by the Purchasers thereof
set forth in the           Registration Statement as so amended or in such Prospectus as
so supplemented.  

416 

		    (c)                 Notify
the Purchasers of Registrable Securities to be sold and each Purchaser           Counsel
as promptly as reasonably possible, and (if requested by any such           Person)
confirm such notice in writing no later than one Trading Day thereafter,           of any
of the following events: (i) the Commission notifies the Company whether           there
will be a “review” of any Registration Statement; (ii) the           Commission
comments in writing on any Registration Statement (in which case the           Company
shall deliver to each Purchaser a copy of such comments and of all           written
responses thereto); (iii) any Registration Statement or any           post-effective
amendment is declared effective; (iv) the Commission or any other           Federal or
state governmental authority requests any amendment or supplement to           any
Registration Statement or Prospectus or requests additional information           related
thereto; (v) the Commission issues any stop order suspending the           effectiveness
of any Registration Statement or initiates any Proceedings for           that purpose;
(vi) the Company receives notice of any suspension of the           qualification or
exemption from qualification of any Registrable Securities for           sale in any
jurisdiction, or the initiation or threat of any Proceeding for such           purpose;
or (vii) the financial statements included in any Registration           Statement become
ineligible for inclusion therein or any statement made in any           Registration
Statement or Prospectus or any document incorporated or deemed to           be
incorporated therein by reference is untrue in any material respect or any
          revision to a Registration Statement, Prospectus or other document is required
          so that it will not contain any untrue statement of a material fact or omit to
          state any material fact required to be stated therein or necessary to make the
          statements therein, in the light of the circumstances under which they were
          made, not misleading.  

		    (d)                 Use
its best efforts to avoid the issuance of or, if issued, obtain the           withdrawal
of (i) any order suspending the effectiveness of any Registration           Statement, or
(ii) any suspension of the qualification (or exemption from           qualification) of
any of the Registrable Securities for sale in any           jurisdiction, as soon as
possible.  

		    (e)                 Furnish
to each Purchaser and Purchaser Counsel, without charge, at least one           conformed
copy of each Registration Statement and each amendment thereto,           including
financial statements and schedules, all documents incorporated or           deemed to be
incorporated therein by reference, and all exhibits to the extent           requested by
such Person (including those previously furnished or incorporated           by reference)
promptly after the filing of such documents with the Commission.  

		    (f)                 Promptly
deliver to each Purchaser and Purchaser Counsel, without charge, as           many copies
of the Prospectus or Prospectuses (including each form of           prospectus) and each
amendment or supplement thereto as such Persons may           reasonably request. The
Company hereby consents to the use of such Prospectus           and each amendment or
supplement thereto by each of the selling Purchasers in           connection with the
offering and sale of the Registrable Securities covered by           such Prospectus and
any amendment or supplement thereto.  

		    (g)                 (i)
In the time and manner required by each Trading Market, prepare and file           with
such Trading Market an additional shares listing application covering all           of
the Registrable Securities; (ii) take all steps necessary to cause such
          Registrable Securities to be approved for listing on each Trading Market as
soon           as possible thereafter; (iii) provide to the Purchasers evidence of such
          listing; and (iv) maintain the listing of such Registrable Securities on each
          such Trading Market or another Eligible Market.  

417 

		    (h)                 Prior
to any public offering of Registrable Securities, use its best efforts to
          register or qualify or cooperate with the selling Purchasers and respective
          Purchaser Counsel in connection with the registration or qualification (or
          exemption from such registration or qualification) of such Registrable
          Securities for offer and sale under the securities or Blue Sky laws of such
          jurisdictions within the United States as any Purchaser requests in writing, to
          keep each such registration or qualification (or exemption therefrom) effective
          during the Effectiveness Period and to do any and all other acts or things
          necessary or advisable to enable the disposition in such jurisdictions of the
          Registrable Securities covered by a Registration Statement.  

		    (i)                 Cooperate
with the Purchasers to facilitate the timely preparation and delivery           of
certificates representing Registrable Securities to be delivered to a
          transferee pursuant to a Registration Statement, which certificates shall be
          free, to the extent permitted by this Agreement, of all restrictive legends,
and           to enable such Registrable Securities to be in such denominations and
registered           in such names as any such Purchasers may request.  

		    (j)        Upon
the occurrence of any event described in Section 6.2(c)(vii), as promptly as
reasonably possible, prepare a supplement or amendment, including a
post-effective amendment, to the Registration Statement or a supplement to the
related Prospectus or any document incorporated or deemed to be incorporated
therein by reference, and file any other required document so that, as
thereafter delivered, neither the Registration Statement nor such Prospectus
will contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading.  

		    (k)                 Cooperate
with any due diligence investigation undertaken by the Purchasers in           connection
with the sale of Registrable Securities, including, without           limitation, by
making available any documents and information; provided that the           Company will
not deliver or make available to any Purchaser material, nonpublic           information.  

		    (l)                 If
Holders of a majority of the Registrable Securities being offered pursuant to           a
Registration Statement select underwriters for the offering, the Company shall
          enter into and perform its obligations under not more than one underwriting
          agreement, in usual and customary form, including, without limitation, by
          providing customary legal opinions, comfort letters and indemnification and
          contribution obligations.  

		    (m)                 Comply
with all applicable rules and regulations of the Commission.  

		    (ii)                 In
connection with the registration of the Registrable Securities, it shall be a
          condition precedent to the obligations of the Company to complete the
          registration pursuant to this Agreement with respect to the Registrable
          Securities of a particular Purchaser (or to make any payments or other damages
          to such Purchaser pursuant to Section 6.1) that such Purchaser shall furnish to
          the Company the Selling Stockholder Questionnaire set forth on Exhibit E hereto
          within 5 Trading Days of the Company’s written request.  

418 

        6.3        
Registration Expenses. The Company shall pay (or reimburse the Purchasers for) all fees
and expenses incident to the performance of or compliance with this Agreement by the
Company, including without limitation (a) all registration and filing fees and expenses,
including without limitation those related to filings with the Commission, any Trading
Market and in connection with applicable state securities or Blue Sky laws, (b) printing
expenses (including without limitation expenses of printing certificates for Registrable
Securities and of printing prospectuses reasonably requested by the Purchasers), (c)
messenger, telephone and delivery expenses, (d) fees and disbursements of counsel for the
Company and up to $10,000 in the aggregate for not more than one Purchaser Counsel for the
Purchasers, (e) fees and expenses of all other Persons retained by the Company in
connection with the consummation of the transactions contemplated by this Agreement, and
(f) all listing fees to be paid by the Company to the Trading Market.  

        6.4        
Indemnification  

		    (a)       
Indemnification
by the Company. The Company shall, notwithstanding any termination of this
Agreement, indemnify and hold harmless each Purchaser, the officers, directors,
partners, members, agents, brokers (including brokers who offer and sell
Registrable Securities as principal as a result of a pledge or any failure to
perform under a margin call of Common Stock), investment advisors and employees
of each of them, each Person who controls any such Purchaser (within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act)
and the officers, directors, partners, members, agents and employees of each
such controlling Person, to the fullest extent permitted by applicable law,
from and against any and all Losses, as incurred, arising out of or relating to
any untrue or alleged untrue statement of a material fact contained in the
Registration Statement, any Prospectus or any form of prospectus or in any
amendment or supplement thereto or in any preliminary prospectus, or arising
out of or relating to any omission or alleged omission of a material fact
required to be stated therein or necessary to make the statements therein (in
the case of any Prospectus or form of prospectus or supplement thereto, in the
light of the circumstances under which they were made) not misleading, except
to the extent, but only to the extent, that (i) such untrue statements, alleged
untrue statements, omissions or alleged omissions are based solely upon
information regarding such Purchaser furnished in writing to the Company by
such Purchaser expressly for use therein, or to the extent that such
information relates to such Purchaser or such Purchaser’s proposed method
of distribution of Registrable Securities and was reviewed and expressly
approved in writing by such Purchaser expressly for use in the Registration
Statement, such Prospectus or such form of Prospectus or in any amendment or
supplement thereto or (ii) in the case of an occurrence of an event of the type
specified in Section 6.2(c)(v)-(vii), the use by such Purchaser of an outdated
or defective Prospectus after the Company has notified such Purchaser in
writing that the Prospectus is outdated or defective and prior to the receipt
by such Purchaser of the Advice contemplated in Section 6.5. The Company shall
notify the Purchasers promptly of the institution, threat or assertion of any
Proceeding of which the Company is aware in connection with the transactions
contemplated by this Agreement.  

419 

		    (b)       
Indemnification
by Purchasers. Each Purchaser shall, severally and not jointly, indemnify and
hold harmless the Company, its directors, officers, agents and employees, each
Person who controls the Company (within the meaning of Section 15 of the
Securities Act and Section 20 of the Exchange Act), and the directors,
officers, agents or employees of such controlling Persons, to the fullest
extent permitted by applicable law, from and against all Losses, as incurred,
arising solely out of any untrue statement of a material fact contained in the
Registration Statement, any Prospectus, or any form of prospectus, or in any
amendment or supplement thereto, or arising solely out of any omission of a
material fact required to be stated therein or necessary to make the statements
therein (in the case of any Prospectus or form of prospectus or supplement
thereto, in the light of the circumstances under which they were made) not
misleading to the extent, but only to the extent, that such untrue statement or
omission is contained in any information so furnished in writing by such
Purchaser to the Company specifically for inclusion in such Registration
Statement or such Prospectus or to the extent that (i) such untrue statements
or omissions are based solely upon information regarding such Purchaser
furnished in writing to the Company by such Purchaser expressly for use
therein, or to the extent that such information relates to such Purchaser or
such Purchaser’s proposed method of distribution of Registrable Securities
and was reviewed and expressly approved in writing by such Purchaser expressly
for use in the Registration Statement, such Prospectus or such form of
Prospectus or in any amendment or supplement thereto or (ii) in the case of an
occurrence of an event of the type specified in Section 6.2(c)(v)-(vii), the
use by such Purchaser of an outdated or defective Prospectus after the Company
has notified such Purchaser in writing that the Prospectus is outdated or
defective and prior to the receipt by such Purchaser of the Advice contemplated
in Section 6.5. In no event shall the liability of any selling Purchaser
hereunder be greater in amount than the dollar amount of the net proceeds
received by such Purchaser upon the sale of the Registrable Securities giving
rise to such indemnification obligation.  

		    (c)       
Conduct
of Indemnification Proceedings. If any Proceeding shall be brought or asserted
against any Person entitled to indemnity hereunder (an “Indemnified Party”),
such Indemnified Party shall promptly notify the Person from whom indemnity is
sought (the “Indemnifying Party”) in writing, and the Indemnifying
Party shall assume the defense thereof, including the employment of counsel
reasonably satisfactory to the Indemnified Party and the payment of all fees
and expenses incurred in connection with defense thereof; provided, that the
failure of any Indemnified Party to give such notice shall not relieve the
Indemnifying Party of its obligations or liabilities pursuant to this
Agreement, except (and only) to the extent that it shall be finally determined
by a court of competent jurisdiction (which determination is not subject to
appeal or further review) that such failure shall have proximately and
materially adversely prejudiced the Indemnifying Party.  

420 

        An
Indemnified Party shall have the right to employ separate counsel in any such Proceeding
and to participate in the defense thereof, but the fees and expenses of such counsel shall
be at the expense of such Indemnified Party or Parties unless: (i) the Indemnifying Party
has agreed in writing to pay such fees and expenses; or (ii) the Indemnifying Party shall
have failed promptly to assume the defense of such Proceeding and to employ counsel
reasonably satisfactory to such Indemnified Party in any such Proceeding; or (iii) the
named parties to any such Proceeding (including any impleaded parties) include both such
Indemnified Party and the Indemnifying Party, and such Indemnified Party shall have been
advised in writing by counsel that a conflict of interest is likely to exist if the same
counsel were to represent such Indemnified Party and the Indemnifying Party (in which
case, if such Indemnified Party notifies the Indemnifying Party in writing that it elects
to employ separate counsel at the expense of the Indemnifying Party, the Indemnifying
Party shall not have the right to assume the defense thereof and such counsel shall be at
the expense of the Indemnifying Party). The Indemnifying Party shall not be liable for any
settlement of any such Proceeding effected without its written consent, which consent
shall not be unreasonably withheld or delayed. No Indemnifying Party shall, without the
prior written consent of the Indemnified Party, effect any settlement of any pending
Proceeding in respect of which any Indemnified Party is a party, unless such settlement
includes an unconditional release of such Indemnified Party from all liability on claims
that are the subject matter of such Proceeding. 

        All
fees and expenses of the Indemnified Party (including reasonable fees and expenses to the
extent incurred in connection with investigating or preparing to defend such Proceeding in
a manner not inconsistent with this Section) shall be paid to the Indemnified Party, as
incurred, within ten Trading Days of written notice thereof to the Indemnifying Party
(regardless of whether it is ultimately determined that an Indemnified Party is not
entitled to indemnification hereunder; provided, that the Indemnifying Party may require
such Indemnified Party to undertake to reimburse all such fees and expenses to the extent
it is finally judicially determined that such Indemnified Party is not entitled to
indemnification hereunder). 

		    (d)       
Contribution.
If a claim for indemnification under Section 6.4(a) or (b) is unavailable to an
Indemnified Party (by reason of public policy or otherwise), then each
Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall
contribute to the amount paid or payable by such Indemnified Party as a result
of such Losses, in such proportion as is appropriate to reflect the relative
fault of the Indemnifying Party and Indemnified Party in connection with the
actions, statements or omissions that resulted in such Losses as well as any
other relevant equitable considerations. The relative fault of such
Indemnifying Party and Indemnified Party shall be determined by reference to,
among other things, whether any action in question, including any untrue or
alleged untrue statement of a material fact or omission or alleged omission of
a material fact, has been taken or made by, or relates to information supplied
by, such Indemnifying Party or Indemnified Party, and the parties’ relative
intent, knowledge, access to information and opportunity to correct or prevent
such action, statement or omission. The amount paid or payable by a party as a
result of any Losses shall be deemed to include, subject to the limitations set
forth in Section 6.4(c), any reasonable attorneys’ or other reasonable
fees or expenses incurred by such party in connection with any Proceeding to
the extent such party would have been indemnified for such fees or expenses if
the indemnification provided for in this Section was available to such party in
accordance with its terms.  

421 

        The
parties hereto agree that it would not be just and equitable if contribution pursuant to
this Section 6.4(d) were determined by pro rata allocation or by any other method of
allocation that does not take into account the equitable considerations referred to in the
immediately preceding paragraph. Notwithstanding the provisions of this Section 6.4(d), no
Purchaser shall be required to contribute, in the aggregate, any amount in excess of the
amount by which the proceeds actually received by such Purchaser from the sale of the
Registrable Securities subject to the Proceeding exceeds the amount of any damages that
such Purchaser has otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission. No Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be
entitled to contribution from any Person who was not guilty of such fraudulent
misrepresentation.  

        The
indemnity and contribution agreements contained in this Section are in addition to any
liability that the Indemnifying Parties may have to the Indemnified Parties. 

422 

        6.5        
Dispositions. Each Purchaser agrees that it will comply with the prospectus delivery
requirements of the Securities Act as applicable to it in connection with sales of
Registrable Securities pursuant to the Registration Statement. Each Purchaser further
agrees that, upon receipt of a notice from the Company of the occurrence of any event of
the kind described in Sections 6.2(c)(v), (vi) or (vii), such Purchaser will discontinue
disposition of such Registrable Securities under the Registration Statement until such
Purchaser’s receipt of the copies of the supplemented Prospectus and/or amended
Registration Statement contemplated by Section 6.2(j), or until it is advised in writing
(the “Advice”) by the Company that the use of the applicable Prospectus may be
resumed, and, in either case, has received copies of any additional or supplemental
filings that are incorporated or deemed to be incorporated by reference in such Prospectus
or Registration Statement. The Company may provide appropriate stop orders to enforce the
provisions of this paragraph.  

        6.6        
No Piggyback on Registrations. Except as provided in Section 6.7, neither the Company nor
any of its security holders (other than the Purchasers in such capacity pursuant hereto)
may include securities of the Company in the Registration Statement other than the
Registrable Securities, and the Company shall not after the date hereof enter into any
agreement providing any such right, with respect to the Registration Statement, to any of
its security holders.  

        6.7        
Piggy-Back Registrations. If at any time during the Effectiveness Period there is not an
effective Registration Statement covering all of the Registrable Securities and the
Company shall determine to prepare and file with the Commission a registration statement
relating to an offering for its own account or the account of others under the Securities
Act of any of its equity securities, other than on Form F-4 or Form F-8 (each as
promulgated under the Securities Act) or their then equivalents or any other form with
respect to an offering relating to equity securities to be issued solely in connection
with any acquisition of any entity or business or equity securities issuable in connection
with stock option or other employee benefit plans, then the Company shall send to each
Purchaser written notice of such determination and if, within fifteen days after receipt
of such notice, any such Purchaser shall so request in writing, the Company shall include
in such registration statement all or any part of such Registrable Securities such
Purchaser requests to be registered. Each Purchaser acknowledges that the Registration
Statement may include up to 105,000 shares of Common Stock issuable pursuant to a warrant
issued to Maxim Group, LLC and up to 40,000 shares of Common Stock issued or issuable to
Merriman Curhan Ford & Co.  

ARTICLE VII
MISCELLANEOUS 

        7.1        
Termination. This Agreement may be terminated by the Company or any Purchaser, by written
notice to the other parties, if the Closing has not been consummated by the third Business
Day following the date of this Agreement; provided that no such termination will affect
the right of any party to sue for any breach by the other party (or parties).  

423 

        7.2        
Fees and Expenses. At the Closing, the Company shall pay to Mainfield Enterprises Inc. an
aggregate of $35,000 for their legal fees and expenses incurred in connection with its due
diligence and the preparation and negotiation of the Transaction Documents, of which
amount $10,000 has been previously paid by the Company to the Purchaser Counsel. In lieu
of the foregoing payment, Mainfield Enterprises Inc. may retain such amount at the
Closing. Except as expressly set forth in the Transaction Documents to the contrary, each
party shall pay the fees and expenses of its advisers, counsel, accountants and other
experts, if any, and all other expenses incurred by such party incident to the
negotiation, preparation, execution, delivery and performance of this Agreement. The
Company shall pay all transfer agent fees, stamp taxes and other taxes and duties levied
in connection with the issuance of the Securities.  

        7.3        
Entire Agreement. The Transaction Documents, together with the Exhibits and Schedules
thereto, contain the entire understanding of the parties with respect to the subject
matter hereof and supersede all prior agreements and understandings, oral or written, with
respect to such matters, which the parties acknowledge have been merged into such
documents, exhibits and schedules. At or after the Closing, and without further
consideration, the Company will execute and deliver to the Purchasers such further
documents as may be reasonably requested in order to give practical effect to the
intention of the parties under the Transaction Documents.  

        7.4        
Notices. Any and all notices or other communications or deliveries required or permitted
to be provided hereunder shall be in writing and shall be deemed given and effective on
the earliest of (a) the date of transmission, if such notice or communication is delivered
via facsimile at the facsimile number specified in this Section 7.4 prior to 6:30 p.m.
(New York City time) on a Trading Day, (b) the next Trading Day after the date of
transmission, if such notice or communication is delivered via facsimile at the facsimile
number specified in this Section on a day that is not a Trading Day or later than 6:30
p.m. (New York City time) on any Trading Day, (c) the Trading Day following the date of
deposit with a nationally recognized overnight courier service, or (d) upon actual receipt
by the party to whom such notice is required to be given. The addresses and facsimile
numbers for such notices and communications are those set forth on the signature pages
hereof, or such other address or facsimile number as may be designated in writing
hereafter, in the same manner, by any such Person.  

        7.5        
Amendments; Waivers. No provision of this Agreement may be waived or amended except in a
written instrument signed, in the case of an amendment, by the Company and each of the
Purchasers or, in the case of a waiver, by the party against whom enforcement of any such
waiver is sought. No waiver of any default with respect to any provision, condition or
requirement of this Agreement shall be deemed to be a continuing waiver in the future or a
waiver of any subsequent default or a waiver of any other provision, condition or
requirement hereof, nor shall any delay or omission of either party to exercise any right
hereunder in any manner impair the exercise of any such right. Notwithstanding the
foregoing, a waiver or consent to depart from the provisions hereof with respect to a
matter that relates exclusively to the rights of Purchasers under Article VI and that does
not directly or indirectly affect the rights of other Purchasers may be given by
Purchasers holding at least a majority of the Registrable Securities to which such waiver
or consent relates.  

424 

        7.6        
Construction. The headings herein are for convenience only, do not constitute a part of
this Agreement and shall not be deemed to limit or affect any of the provisions hereof.
The language used in this Agreement will be deemed to be the language chosen by the
parties to express their mutual intent, and no rules of strict construction will be
applied against any party.  

        7.7        
Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of
the parties and their successors and permitted assigns. The Company may not assign this
Agreement or any rights or obligations hereunder without the prior written consent of the
Purchasers. Any Purchaser may assign its rights under this Agreement to any Person to whom
such Purchaser assigns or transfers any Securities, provided such transferee agrees in
writing to be bound, with respect to the transferred Securities, by the provisions hereof
that apply to the “Purchasers.” Notwithstanding anything to the contrary herein,
Securities may be assigned to any Person in connection with a bona fide margin account or
other loan or financing arrangement secured by such Securities.  

        7.8        
No Third-Party Beneficiaries. This Agreement is intended for the benefit of the parties
hereto and their respective successors and permitted assigns and is not for the benefit
of, nor may any provision hereof be enforced by, any other Person, except that each
Related Person is an intended third party beneficiary of Section 4.8 and each Indemnified
Party is an intended third party beneficiary of Section 6.4 and (in each case) may enforce
the provisions of such Sections directly against the parties with obligations thereunder.  

        7.9        
Governing Law; Venue; Waiver Of Jury Trial. ALL QUESTIONS CONCERNING THE CONSTRUCTION,
VALIDITY, ENFORCEMENT AND INTERPRETATION OF THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. THE COMPANY
AND PURCHASERS HEREBY IRREVOCABLY SUBMIT TO THE EXCLUSIVE JURISDICTION OF THE STATE AND
FEDERAL COURTS SITTING IN THE CITY OF NEW YORK, BOROUGH OF MANHATTAN FOR THE ADJUDICATION
OF ANY DISPUTE BROUGHT BY THE COMPANY OR ANY PURCHASER HEREUNDER, IN CONNECTION HEREWITH
OR WITH ANY TRANSACTION CONTEMPLATED HEREBY OR DISCUSSED HEREIN (INCLUDING WITH RESPECT TO
THE ENFORCEMENT OF ANY OF THE TRANSACTION DOCUMENTS), AND HEREBY IRREVOCABLY WAIVE, AND
AGREE NOT TO ASSERT IN ANY SUIT, ACTION OR PROCEEDING BROUGHT BY THE COMPANY OR ANY
PURCHASER, ANY CLAIM THAT IT IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF ANY SUCH
COURT, OR THAT SUCH SUIT, ACTION OR PROCEEDING IS IMPROPER. EACH PARTY HEREBY IRREVOCABLY
WAIVES PERSONAL SERVICE OF PROCESS AND CONSENTS TO PROCESS BEING SERVED IN ANY SUCH SUIT,
ACTION OR PROCEEDING BY MAILING A COPY THEREOF VIA REGISTERED OR CERTIFIED MAIL OR
OVERNIGHT DELIVERY (WITH EVIDENCE OF DELIVERY) TO SUCH PARTY AT THE ADDRESS IN EFFECT FOR
NOTICES TO IT UNDER THIS AGREEMENT AND AGREES THAT SUCH SERVICE SHALL CONSTITUTE GOOD AND
SUFFICIENT SERVICE OF PROCESS AND NOTICE THEREOF. NOTHING CONTAINED HEREIN SHALL BE DEEMED
TO LIMIT IN ANY WAY ANY RIGHT TO SERVE PROCESS IN ANY MANNER PERMITTED BY LAW. THE COMPANY
AND PURCHASERS HEREBY WAIVE ALL RIGHTS TO A TRIAL BY JURY.  

425 

        7.10        
Survival. The representations, warranties, agreements and covenants contained herein shall
survive the Closing and the delivery and/or exercise of the Securities, as applicable.  

        7.11        
Execution. This Agreement may be executed in two or more counterparts, all of which when
taken together shall be considered one and the same agreement and shall become effective
when counterparts have been signed by each party and delivered to the other party, it
being understood that both parties need not sign the same counterpart. In the event that
any signature is delivered by facsimile transmission, such signature shall create a valid
and binding obligation of the party executing (or on whose behalf such signature is
executed) with the same force and effect as if such facsimile signature page were an
original thereof.  

        7.12        
Severability. If any provision of this Agreement is held to be invalid or unenforceable in
any respect, the validity and enforceability of the remaining terms and provisions of this
Agreement shall not in any way be affected or impaired thereby and the parties will
attempt to agree upon a valid and enforceable provision that is a reasonable substitute
therefor, and upon so agreeing, shall incorporate such substitute provision in this
Agreement.  

        7.13        
Rescission and Withdrawal Right. Notwithstanding anything to the contrary contained in
(and without limiting any similar provisions of) the Transaction Documents, whenever any
Purchaser exercises a right, election, demand or option under a Transaction Document and
the Company does not timely perform its related obligations within the periods therein
provided, then such Purchaser may rescind or withdraw, in its sole discretion from time to
time upon written notice to the Company, any relevant notice, demand or election in whole
or in part without prejudice to its future actions and rights.  

        7.14        
Replacement of Securities. If any certificate or instrument evidencing any Securities is
mutilated, lost, stolen or destroyed, the Company shall issue or cause to be issued in
exchange and substitution for and upon cancellation thereof, or in lieu of and
substitution therefor, a new certificate or instrument, but only upon receipt of evidence
reasonably satisfactory to the Company of such loss, theft or destruction and customary
and reasonable indemnity, if requested. The applicants for a new certificate or instrument
under such circumstances shall also pay any reasonable third-party costs associated with
the issuance of such replacement Securities.  

        7.15        
Remedies. In addition to being entitled to exercise all rights provided herein or granted
by law, including recovery of damages, each of the Purchasers and the Company will be
entitled to specific performance under the Transaction Documents. The parties agree that
monetary damages may not be adequate compensation for any loss incurred by reason of any
breach of obligations described in the foregoing sentence and hereby agrees to waive in
any action for specific performance of any such obligation the defense that a remedy at
law would be adequate.  

426 

        7.16        
Payment Set Aside. To the extent that the Company makes a payment or payments to any
Purchaser hereunder or pursuant to the Warrants, or any Purchaser enforces or exercises
its rights hereunder or thereunder, and such payment or payments or the proceeds of such
enforcement or exercise or any part thereof are subsequently invalidated, declared to be
fraudulent or preferential, set aside, recovered from, disgorged by or are required to be
refunded, repaid or otherwise restored to the Company by a trustee, receiver or any other
person under any law (including, without limitation, any bankruptcy law, state or federal
law, common law or equitable cause of action), then to the extent of any such restoration
the obligation or part thereof originally intended to be satisfied shall be revived and
continued in full force and effect as if such payment had not been made or such
enforcement or setoff had not occurred.  

        7.17        
Adjustments in Share Numbers and Prices. In the event of any stock split, subdivision,
dividend or distribution payable in shares of Common Stock (or other securities or rights
convertible into, or entitling the holder thereof to receive directly or indirectly shares
of Common Stock), combination or other similar recapitalization or event occurring after
the date hereof, each reference in any Transaction Document to a number of shares or a
price per share shall be amended to appropriately account for such event.  

        7.18        
Independent Nature of Purchasers’ Obligations and Rights. The obligations of each
Purchaser under any Transaction Document are several and not joint with the obligations of
any other Purchaser, and no Purchaser shall be responsible in any way for the performance
of the obligations of any other Purchaser under any Transaction Document. The decision of
each Purchaser to purchase Shares pursuant to this Agreement has been made by such
Purchaser independently of any other Purchaser and independently of any information,
materials, statements or opinions as to the business, affairs, operations, assets,
properties, liabilities, results of operations, condition (financial or otherwise) or
prospects of the Company or of the Subsidiary which may have been made or given by any
other Purchaser or by any agent or employee of any other Purchaser, and no Purchaser or
any of its agents or employees shall have any liability to any other Purchaser (or any
other person) relating to or arising from any such information, materials, statements or
opinions. Nothing contained herein or in any Transaction Document, and no action taken by
any Purchaser pursuant thereto, shall be deemed to constitute the Purchasers as a
partnership, an association, a joint venture or any other kind of entity, or create a
presumption that the Purchasers are in any way acting in concert or as a group with
respect to such obligations or the transactions contemplated by the Transaction Document.
Each Purchaser acknowledges that no other Purchaser has acted as agent for such Purchaser
in connection with making its investment hereunder and that no other Purchaser will be
acting as agent of such Purchaser in connection with monitoring its investment hereunder.
Each Purchaser shall be entitled to independently protect and enforce its rights,
including without limitation the rights arising out of this Agreement or out of the other
Transaction Documents, and it shall not be necessary for any other Purchaser to be joined
as an additional party in any proceeding for such purpose. Each Purchaser represents that
it has been represented by its own separate legal counsel in its review and negotiations
of this Agreement and the Transaction Documents. Proskauer Rose LLP represents only
Mainfield Enterprises Inc.  

[SIGNATURE PAGES TO
FOLLOW] 

427 

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

	  	
MAMMA.COM
INC. 

	  	
By:
s/s David Goldman
 Name: David Goldman

Title: Chairman

Address for Notice:

388 St. Jacques Street West, 8th floor

Montreal, QC H2Y 1S1

Phone: 514-874-0888

Fax: 514-874-0886

Attn: David Goldman, Chairman  

	With a copy to:    	Blair & Roach, LLP
                                     2645 Sheridan Drive

                                    Tonawanda, NY  14150

                                    Facsimile No.:  716-834-9197

                                    Telephone No.:  716-834-9181

                                    Attn:  Michael E. Stork 

[REMAINDER OF PAGE
INTENTIONALLY LEFT BLANK
SIGNATURE PAGES FOR
PURCHASERS FOLLOW] 

428 

	  	
Mainfield
Enterprises Inc. 

	  	
By:
s/s Avi Vigder  

	  	
Name:
  Avi Vigder
                                     Title:  Authorized Signatory 

	  	
Residence:
 British Virgin Islands 

	  	
Purchase
Price:  $[5,475,000] 

	  	
Number
of Shares: [500,000]
                                     Underlying Shares subject to
    
                                         Warrants1: [200,000] 

	  	
Address
for Notice:
                                     Mainfield Enterprise, Inc.

                                    c/o Eldad Gal
                                     600
Madison Avenue
                                     New York, NY  10022

                                    Telephone No.: (212) 651-9000

                                    Facsimile No.:    (212) 651-9010 

	With a copy to:     	Proskauer Rose LLP
                                     1585 Broadway

                                    New York, New York 10036-8299

                                    Facsimile No.:  (212) 969-2900

                                    Telephone No.:  (212) 969-3000

                                    Attn:  Adam J. Kansler, Esq. 

_____________

140% Warrant Coverage 

429 

	  	
Fund
Name:  Heimdall Investments Ltd. 

	  	
By:
s/s William E. Rose  

	  	
Name:
  William E. Rose  
                                   Title:  Authorized Signatory 

	  	
Residence:
 Cayman Islands 

	  	
Purchase
Price:  $5,475,000 

	  	
Number
of Shares: 500,000
                                     Underlying Shares subject to
Warrants2: 200,000 

	  	
Address
for Notice:           
                          c/o HBK Investments L.P.

                                    300 Crescent Court, Suite 700

                                    Dallas, Texas  75201

                                    Facsimile No.:    (214) 758-1207

                                    Telephone No.: (214) 758-6107

                                    Attn:  General Counsel 

__________

240% Warrant Coverage 

430 

	  	
Cranshire
Capital, L.P. 
 By: Mitchell P. Kopin  

	  	
Name:
  Mitchell P. Kopin
                                    Title:  President - Downsview
Capital
                                             The General Partner 

	  	
Residence:
 See below 

	  	
Purchase
Price:  $2,737,500 

	  	
Number
of Shares: 250,000          
                           Underlying Shares subject to
Warrants3: 100,000 

	  	
Address
for Notice:
                                    666 Dundee Rd, Suite 1901

                                    Northbrook, IL  60062

                                    Facsimile No.:    (847) 562-9031

                                    Telephone No.: (847) 562-9030

                                    Attn:  Mitchell Kopin 

______

340% Warrant Coverage 

431 

	  	
SMITHFIELD
FIDUCIARY LLC 

	  	
By:
Adam J. Chill  

	  	
Name:
  Adam J. Chill                             
        Title:  Authorized Signatory 

	  	
Residence:
 Cayman Islands 

	  	
Purchase
Price:  $999,997.80 

	  	
Number
of Units: 91,324 
                                    Underlying Shares subject to

                                         Warrants4: 36,530 

	  	
Address
for Notice: 
                                    c/o Highbridge Capital Management, LLC

                                    9 West 57th Street, 27th Floor

                                    New York, NY  10019

                                    Facsimile No.:    (212) 751-0755

                                    Telephone No.: (212) 287-4720

                                    Attn:  Ari J. Storch / Adam J. Chill 

_____

440% Warrant Coverage 

432 

	  	
Fund
Name:  Isotope Limited, By Amaranth Advisors L.L.C., its Trading Advisor 

	  	
By:
s/s Karl J. Wachter SVC  

	  	
Name:
  Karl J. Wachter                                  
   Title:  Authorized Signatory 

	  	
Residence: 

	  	
Purchase
Price:  $1,612,497 

	  	
Number
of Shares: 147,260          
                           Underlying Shares subject to

                                             Warrants5: 58,904 

	  	
Address
for Notice: 

	  	
See
attached 

	  	
Facsimile No.: 

                                    Telephone No.:

                                    Attn: 

______

540% Warrant Coverage 

433 

	  	
Fund
name:  ENABLE GROWTH PARTNERS 

	  	
By:
s/s Mitch Levine    EIN: 75-3030215  

	  	
Name:
  Mitch Levine                                     
Title:  Managing Ptr 

	  	
Residence:
 California 

	  	
Purchase
Price:  $10.95/shr  $299,986 

	  	
Number
of Shares: 27,396
                                     Underlying Shares subject to

                                         Warrants6: 10,958 

	  	
Address
for Notice: 

	  	
Enable
Capital Mgmt
                                     One Sansome, Ste 2900

                                    San Francisco, CA  94104 

	  	
Facsimile
No.:    415-835-3843
                                     Telephone No.: 415-835-3838

                                    Attn:  Mitch Levine 

______

640% Warrant Coverage 

434 

Exhibits:  

	A	 	Form of Warrant	 
	B	 	Opinion of Company Counsel	 
	C	 	Plan of Distribution	 
	D	 	Transfer Agent Instructions	 
	E	 	Selling Stockholder Questionnaire	 

435 

Execution Copy  

EXHIBIT A  

NEITHER THESE SECURITIES NOR THE
SECURITIES FOR WHICH THESE SECURITIES ARE EXERCISABLE HAVE BEEN REGISTERED WITH THE
SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE
UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS
OR BLUE SKY LAWS. THESE SECURITIES AND THE SECURITIES ISSUABLE UPON EXERCISE OF THESE
SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN
SECURED BY SUCH SECURITIES.  

MAMMA.COM INC. 

WARRANT  

	Warrant No. [    ]	Dated: June __, 2004

        Mamma.com
Inc., a Province of Ontario, Canada corporation (the “Company”), hereby
certifies that, for value received, [Name of Holder] or its registered assigns (the
“Holder”), is entitled to purchase from the Company up to a total of [    ]1 shares
of common stock, having no par value per share (the “Common Stock”), of the
Company (each such share, a “Warrant Share” and all such shares, the
“Warrant Shares”) at an exercise price equal to $[    ]2 per share (as adjusted
from time to time as provided in Section 9, the “Exercise Price”), at any time
and from time to time from and after the date that is six months from the date of the
issuance hereof and through and including the date that is five years from the date of
issuance hereof (the “Expiration Date”), and subject to the following terms and
conditions. This Warrant (this “Warrant”) is one of a series of similar warrants
issued pursuant to that certain Securities Purchase Agreement, dated as of the date
hereof, by and among the Company and the Purchasers identified therein (the “Purchase
Agreement”). All such warrants are referred to herein, collectively, as the
“Warrants.”  

____

140% warrant coverage
(as per term sheet)

2130% of the Market Price  

436 

         1.       
Definitions. In addition to the terms defined elsewhere in this Warrant,
capitalized terms that are not otherwise defined herein have the meanings given
to such terms in the Purchase Agreement.  

         2.       
Registration of Warrant. The Company shall register this Warrant, upon records
to be maintained by the Company for that purpose (the “Warrant
Register”), in the name of the record Holder hereof from time to time. The
Company may deem and treat the registered Holder of this Warrant as the absolute
owner hereof for the purpose of any exercise hereof or any distribution to the
Holder, and for all other purposes, absent actual notice to the contrary.  

         3.       
Registration of Transfers. The Company shall register the transfer of any
portion of this Warrant in the Warrant Register, upon surrender of this Warrant,
with the Form of Assignment attached hereto duly completed and signed, to the
Transfer Agent or to the Company at its address specified herein. Upon any such
registration or transfer, a new warrant to purchase Common Stock, in
substantially the form of this Warrant (any such new warrant, a “New
Warrant”), evidencing the portion of this Warrant so transferred shall be
issued to the transferee and a New Warrant evidencing the remaining portion of
this Warrant not so transferred, if any, shall be issued to the transferring
Holder. The acceptance of the New Warrant by the transferee thereof shall be
deemed the acceptance by such transferee of all of the rights and obligations of
a holder of a Warrant.  

         4.       
Exercise and Duration of Warrants.  

		    (a)                 This
Warrant shall be exercisable by the registered Holder at any time and from           time
to time on or after the six month anniversary of the date hereof to and
          including the Expiration Date at 6:30 P.M., New York City time on the
Expiration           Date.  

		    (b)        A
Holder may exercise this Warrant by delivering to the Company (i) an exercise
notice, in the form attached hereto (the “Exercise Notice”),
appropriately completed and duly signed, and (ii) payment of the Exercise
Price for the number of Warrant Shares as to which this Warrant is being
exercised (which may take the form of a “cashless exercise” if so
indicated in the Exercise Notice and if a “cashless exercise” may
occur at such time pursuant to this Section 10 below), and the date such items
are delivered to the Company (as determined in accordance with the notice
provisions hereof) is an “Exercise Date.” Within five (5) Trading
days after the Exercise Date, the Holder shall deliver the original Warrant, or
an affidavit of loss thereof, to the Company. Execution and delivery of the
Exercise Notice shall have the same effect as cancellation of the original
Warrant and issuance of a New Warrant evidencing the right to purchase the
remaining number of Warrant Shares.  

437 

         5.       
Delivery of Warrant Shares.  

		    (a)                 Upon
exercise of this Warrant, the Company shall promptly (but in no event later
          than three Trading Days after the Exercise Date) issue or cause to be issued
and           deliver or cause to be delivered to or upon the written order of the Holder
and           in such name or names as the Holder may designate, a certificate for the
Warrant           Shares issuable upon such exercise, free of restrictive legends for
resale in           the United States unless a registration statement covering the resale
of the           Warrant Shares and naming the Holder as a selling stockholder thereunder
is not           then effective and the Warrant Shares are not freely transferable
without volume           restrictions pursuant to Rule 144 under the Securities Act. The
Holder, or any           Person so designated by the Holder to receive Warrant Shares,
shall be deemed to           have become holder of record of such Warrant Shares as of
the Exercise Date. The           Company shall, upon request of the Holder, use its best
efforts to deliver           Warrant Shares hereunder electronically through the
Depository Trust Corporation           or another established clearing corporation
performing similar functions.  

		    (b)                 This
Warrant is exercisable, either in its entirety or, from time to time, for a
          portion of the number of Warrant Shares. Upon surrender of this Warrant
          following one or more partial exercises, the Company shall issue or cause to be
          issued, at its expense, a New Warrant evidencing the right to purchase the
          remaining number of Warrant Shares.  

		    (c)        In
addition to any other rights available to a Holder, if the Company fails to
deliver to the Holder a certificate representing Warrant Shares by the third
Trading Day after the date on which delivery of such certificate is required by
this Warrant, and if after such third Trading Day the Holder purchases (in an
open market transaction or otherwise) shares of Common Stock to deliver in
satisfaction of a sale by the Holder of the Warrant Shares that the Holder
anticipated receiving from the Company (a “Buy-In”), then the Company
shall, within three Trading Days after the Holder’s request and in the
Holder’s discretion, either (i) pay cash to the Holder in an amount equal
to the Holder’s total purchase price (including brokerage commissions, if
any) for the shares of Common Stock so purchased (the “Buy-In Price”),
at which point the Company’s obligation to deliver such certificate (and
to issue such Common Stock) shall terminate, or (ii) promptly honor its
obligation to deliver to the Holder a certificate or certificates representing
such Common Stock and pay cash to the Holder in an amount equal to the excess
(if any) of the Buy-In Price over the product of (A) such number of shares of
Common Stock, times (B) the Closing Price on the date of the event giving rise
to the Company’s obligation to deliver such certificate.  

		    (d)       
          The Company’s obligations to issue and deliver Warrant Shares in accordance
          with the terms hereof are absolute and unconditional, irrespective of any action
          or inaction by the Holder to enforce the same, any waiver or consent with
          respect to any provision hereof, the recovery of any judgment against any Person
          or any action to enforce the same, or any setoff, counterclaim, recoupment,
          limitation or termination, or any breach or alleged breach by the Holder or any
          other Person of any obligation to the Company or any violation or alleged
          violation of law by the Holder or any other Person, and irrespective of any
          other circumstance which might otherwise limit such obligation of the Company to
          the Holder in connection with the issuance of Warrant Shares. Nothing herein
          shall limit a Holder’s right to pursue any other remedies available to it
          hereunder, at law or in equity including, without limitation, a decree of
          specific performance and/or injunctive relief with respect to the Company’s
          failure to timely deliver certificates representing shares of Common Stock upon
          exercise of the Warrant as required pursuant to the terms hereof.  

438 

         6.       
Charges, Taxes and Expenses. Issuance and delivery of certificates for shares of
Common Stock upon exercise of this Warrant shall be made without charge to the
Holder for any issue or transfer tax, withholding tax, transfer agent fee or
other incidental tax or expense in respect of the issuance of such certificates,
all of which taxes and expenses shall be paid by the Company; provided, however,
that the Company shall not be required to pay any tax which may be payable in
respect of any transfer involved in the registration of any certificates for
Warrant Shares or Warrants in a name other than that of the Holder or an
Affiliate thereof. The Holder shall be responsible for all other tax liability
that may arise as a result of holding or transferring this Warrant or receiving
Warrant Shares upon exercise hereof.  

         7.       
Replacement of Warrant. If this Warrant is mutilated, lost, stolen or destroyed,
the Company shall issue or cause to be issued in exchange and substitution for
and upon cancellation hereof, or in lieu of and substitution for this Warrant, a
New Warrant, but only upon receipt of evidence reasonably satisfactory to the
Company of such loss, theft or destruction and customary and reasonable bond or
indemnity, if requested. Applicants for a New Warrant under such circumstances
shall also comply with such other reasonable regulations and procedures and pay
such other reasonable third-party costs as the Company may prescribe.  

         8.       
Reservation of Warrant Shares. The Company covenants that it will at all times
reserve and keep available out of the aggregate of its authorized but unissued
and otherwise unreserved Common Stock, solely for the purpose of enabling it to
issue Warrant Shares upon exercise of this Warrant as herein provided, the
number of Warrant Shares which are then issuable and deliverable upon the
exercise of this entire Warrant, free from preemptive rights or any other
contingent purchase rights of persons other than the Holder (after giving effect
to the adjustments and restrictions of Section 9, if any). The Company covenants
that all Warrant Shares so issuable and deliverable shall, upon issuance and the
payment of the applicable Exercise Price in accordance with the terms hereof, be
duly and validly authorized, issued and fully paid and nonassessable. The
Company will take all such action as may be necessary to assure that such shares
of Common Stock may be issued as provided herein without violation of any
applicable law or regulation, or of any requirements of any securities exchange
or automated quotation system upon which the Common Stock may be listed.  

         9.       
Certain Adjustments. The Exercise Price and number of Warrant Shares issuable
upon exercise of this Warrant are subject to adjustment from time to time as set
forth in this Section 9.  

		    (a)       
Stock Dividends and Splits. If the Company, at any time while this Warrant is
outstanding, (i) pays a stock dividend on its Common Stock or otherwise makes a
distribution on any class of capital stock that is payable in shares of Common
Stock, (ii) subdivides outstanding shares of Common Stock into a larger number
of shares, or (iii) combines outstanding shares of Common Stock into a smaller
number of shares, then in each such case the Exercise Price shall be multiplied
by a fraction of which the numerator shall be the number of shares of Common
Stock outstanding immediately before such event and of which the denominator
shall be the number of shares of Common Stock outstanding immediately after such
event. Any adjustment made pursuant to clause (i) of this paragraph shall become
effective immediately after the record date for the determination of
stockholders entitled to receive such dividend or distribution, and any
adjustment pursuant to clause (ii) or (iii) of this paragraph shall become
effective immediately after the effective date of such subdivision or
combination.  

       

439 

		    (b)       Pro
Rata Distributions. If the Company, at any time while this Warrant is outstanding,
distributes to holders of Common Stock (i) evidences of its indebtedness, (ii) any
security (other than a distribution of Common Stock covered by the preceding paragraph),
(iii) rights or warrants to subscribe for or purchase any security, or (iv) any
other asset (in each case, “Distributed Property”), then in each such
case the Exercise Price in effect immediately prior to the record date fixed for
determination of stockholders entitled to receive such distribution shall be adjusted
(effective on such record date) to equal the product of such Exercise Price times a
fraction of which the denominator shall be the average of the Closing Prices for the five
Trading Days immediately prior to (but not including) such record date and of which the
numerator shall be such average less the then fair market value of the Distributed
Property distributed in respect of one outstanding share of Common Stock, as determined
by the Company’s independent certified public accountants that regularly examine the
financial statements of the Company (an “Appraiser”). In such event, the
Holder, after receipt of the determination by the Appraiser, shall have the right to
select an additional appraiser (which shall be a nationally recognized accounting firm),
in which case such fair market value shall be deemed to equal the average of the values
determined by each of the Appraiser and such appraiser. As an alternative to the
foregoing adjustment to the Exercise Price, at the request of the Holder delivered before
the 30th day after such record date, the Company will deliver to such Holder, within five
Trading Days after such request (or, if later, on the effective date of such
distribution), the Distributed Property that such Holder would have been entitled to
receive in respect of the Warrant Shares for which this Warrant could have been exercised
immediately prior to such record date. If such Distributed Property is not delivered to a
Holder pursuant to the preceding sentence, then upon expiration of or any exercise of the
Warrant that occurs after such record date, such Holder shall remain entitled to receive,
in addition to the Warrant Shares otherwise issuable upon such exercise (if applicable),
such Distributed Property.  

		    (c)       
Fundamental
Transactions. If, at any time while this Warrant is outstanding, (i) the
Company effects any merger or consolidation of the Company with or into another
Person, (ii) the Company effects any sale of all or substantially all of its
assets in one or a series of related transactions, (iii) any tender offer or
exchange offer (whether by the Company or another Person) is completed pursuant
to which holders of Common Stock are permitted to tender or exchange their
shares for other securities, cash or property, or (iv) the Company effects any
reclassification of the Common Stock or any compulsory share exchange pursuant
to which the Common Stock is effectively converted into or exchanged for other
securities, cash or property (other than as a result of a subdivision or
combination of shares of Common Stock covered by Section 9(a) above) (in any
such case, a “Fundamental Transaction”), then the Holder shall have
the right thereafter to receive, upon exercise of this Warrant, the same amount
and kind of securities, cash or property as it would have been entitled to
receive upon the occurrence of such Fundamental Transaction if it had been,
immediately prior to such Fundamental Transaction, the holder of the number of
Warrant Shares then issuable upon exercise in full of this Warrant (the
“Alternate Consideration”). The aggregate Exercise Price for this
Warrant will not be affected by any such Fundamental Transaction, but the
Company shall apportion such aggregate Exercise Price among the Alternate
Consideration in a reasonable manner reflecting the relative value of any
different components of the Alternate Consideration. If holders of Common Stock
are given any choice as to the securities, cash or property to be received in a
Fundamental Transaction, then the Holder shall be given the same choice as to
the Alternate Consideration it receives upon any exercise of this Warrant
following such Fundamental Transaction. At the Holder’s request, any
successor to the Company or surviving entity in such Fundamental Transaction
shall issue to the Holder a new warrant consistent with the foregoing
provisions and evidencing the Holder’s right to purchase the Alternate
Consideration for the aggregate Exercise Price upon exercise thereof. The terms
of any agreement pursuant to which a Fundamental Transaction is effected shall
include terms requiring any such successor or surviving entity to comply with
the provisions of this paragraph (c) and insuring that the Warrant (or any such
replacement security) will be similarly adjusted upon any subsequent
transaction analogous to a Fundamental Transaction. If any Fundamental
Transaction (x) results in a cash payment to holders of Common Stock, or (y)
constitutes or results in a Change of Control, and if as a result of such
Change of Control the successor to the Company or surviving entity is not an
entity whose stock is traded on an Eligible Market, then at the request of the
Holder delivered before the 90th day after such Fundamental Transaction, the
Company (or any such successor or surviving entity) will purchase the Warrant
from the Holder for a purchase price, payable in cash within five Trading Days
after such request (or, if later, on the effective date of the Fundamental
Transaction), equal to the Black-Scholes value of the remaining unexercised
portion of this Warrant on the date of such request.  

440 

		    (d)       
Subsequent
Equity Sales.  

		    (i)        If,
at any time while this Warrant is outstanding, the Company or any Subsidiary
issues additional shares of Common Stock or rights, warrants, options or other
securities or debt convertible, exercisable or exchangeable for shares of
Common Stock or otherwise entitling any Person to acquire shares of Common
Stock (collectively, “Common Stock Equivalents”), other than Excluded
Stock, at an effective net price to the Company per share of Common Stock (the
“Effective Price”) less than the Exercise Price (as adjusted
hereunder to such date), then the Exercise Price shall be reduced to equal the
Effective Price. For purposes of this paragraph, in connection with any
issuance of any Common Stock Equivalents, (A) the maximum number of shares of
Common Stock potentially issuable at any time upon conversion, exercise or
exchange of such Common Stock Equivalents (the “Deemed Number”) shall
be deemed to be outstanding upon issuance of such Common Stock Equivalents, (B)
the Effective Price applicable to such Common Stock shall equal the minimum
dollar value of consideration payable to the Company to purchase such Common
Stock Equivalents and to convert, exercise or exchange them into Common Stock
(net of any discounts, fees, commissions and other expenses), divided by the
Deemed Number, and (C) no further adjustment shall be made to the Exercise
Price upon the actual issuance of Common Stock upon conversion, exercise or
exchange of such Common Stock Equivalents.  

		    (ii)        If,
at any time while this Warrant is outstanding, the Company or any Subsidiary
issues Common Stock Equivalents, other than Excluded Stock, with an Effective
Price or a number of underlying shares that floats or resets or otherwise
varies or is subject to adjustment based (directly or indirectly) on market
prices of the Common Stock (a “Floating Price Security”), then for
purposes of applying the preceding paragraph in connection with any subsequent
exercise, the Effective Price will be determined separately on each Exercise
Date and will be deemed to equal the lowest Effective Price at which any holder
of such Floating Price Security is entitled to acquire Common Stock on such
Exercise Date (regardless of whether any such holder actually acquires any
shares on such date).  

441 

		    (e)       
Number
of Warrant Shares. Simultaneously with any adjustments to the Exercise Price
pursuant to paragraph (a) of this Section, the number of Warrant Shares that
may be purchased upon exercise of this Warrant shall be increased
proportionately, so that after such adjustment the aggregate Exercise Price
payable hereunder for the increased number of Warrant Shares shall be the same
as the aggregate Exercise Price in effect immediately prior to such adjustment.  

		    (f)       
Calculations.
All calculations under this Section 9 shall be made to the nearest cent or the
nearest 1/100th of a share, as applicable. The number of shares of Common Stock
outstanding at any given time shall not include shares owned or held by or for
the account of the Company, and the disposition of any such shares shall be
considered an issue or sale of Common Stock.  

		    (g)       
Notice
of Adjustments. Upon the occurrence of each adjustment pursuant to this Section
9, the Company at its expense will promptly compute such adjustment in
accordance with the terms of this Warrant and prepare a certificate setting
forth such adjustment, including a statement of the adjusted Exercise Price and
adjusted number or type of Warrant Shares or other securities issuable upon
exercise of this Warrant (as applicable), describing the transactions giving
rise to such adjustments and showing in detail the facts upon which such
adjustment is based. Upon written request, the Company will promptly deliver a
copy of each such certificate to the Holder and to the Company’s Transfer
Agent.  

		    (h)       
Notice
of Corporate Events. If the Company (i) declares a dividend or any other
distribution of cash, securities or other property in respect of its Common
Stock, including without limitation any granting of rights or warrants to
subscribe for or purchase any capital stock of the Company or any Subsidiary,
(ii) authorizes or approves, enters into any agreement contemplating or
solicits stockholder approval for any Fundamental Transaction or (iii)
authorizes the voluntary dissolution, liquidation or winding up of the affairs
of the Company, then the Company shall deliver to the Holder a notice
describing the material terms and conditions of such transaction, at least 20
calendar days prior to the applicable record or effective date on which a
Person would need to hold Common Stock in order to participate in or vote with
respect to such transaction, and the Company will take all steps reasonably
necessary in order to insure that the Holder is given the practical opportunity
to exercise this Warrant prior to such time so as to participate in or vote
with respect to such transaction; provided, however, that the failure to
deliver such notice or any defect therein shall not affect the validity of the
corporate action required to be described in such notice.  

442 

         10.       
Payment of Exercise Price. The Holder shall pay the Exercise Price in
immediately available funds; provided, however, that at any time following the
one-year anniversary of the Closing Date the “Shelf Registration
Statement” filed by the Company pursuant to Section 6.1 of the Purchase
Agreement is not effective with respect to all Warrant Shares the Holder may
satisfy its obligation to pay the Exercise Price through a “cashless
exercise,” in which event the Company shall issue to the Holder the number
of Warrant Shares determined as follows:  

X = Y [(A-B)/A] 

        where: 

	  	
X
= the number of Warrant Shares to be issued to the Holder; 

	  	
Y
= the number of Warrant  Shares  with  respect to which this  Warrant is
                                           being exercised; 

	  	
A
=  the  average  of  the  Closing  Prices  for  the  five  Trading  Days
                                           immediately prior to (but not including) the
Exercise Date; 

	  	
B
= the Exercise Price; 

provided that the Warrant may be
exercised on a “cashless” basis only to the extent that the Warrant Shares
issuable upon such exercise may be sold by such Holder pursuant to Rule 144 at such time. 

        For
purposes of Rule 144 promulgated under the Securities Act, it is intended, understood and
acknowledged that the Warrant Shares issued in a cashless exercise transaction shall be
deemed to have been acquired by the Holder, and the holding period for the Warrant Shares
shall be deemed to have commenced, on the date this Warrant was originally issued pursuant
to the Purchase Agreement, provided such treatment still accords with the SEC’s
interpretation that such treatment is proper under Rule 144. 

         11.       
Limitation on Exercise.  

		    (a)        Notwithstanding
anything to the contrary contained herein, the number of shares of Common Stock
that may be acquired by the Holder upon any exercise of this Warrant (or
otherwise in respect hereof) shall be limited to the extent necessary to insure
that, following such exercise (or other issuance), the total number of shares
of Common Stock then beneficially owned by such Holder and its Affiliates and
any other Persons whose beneficial ownership of Common Stock would be
aggregated with the Holder’s for purposes of Section 13(d) of the Exchange
Act, does not exceed 4.99% (the “Maximum Percentage”) of the total
number of issued and outstanding shares of Common Stock (including for such
purpose the shares of Common Stock issuable upon such exercise). For such
purposes, beneficial ownership shall be determined in accordance with Section
13(d) of the Exchange Act and the rules and regulations promulgated thereunder.
Each delivery of an Exercise Notice hereunder will constitute a representation
by the Holder that it has evaluated the limitation set forth in this paragraph
and determined that issuance of the full number of Warrant Shares requested in
such Exercise Notice is permitted under this paragraph. The Company’s
obligation to issue shares of Common Stock in excess of the limitation referred
to in this Section shall be suspended (and shall not terminate or expire
notwithstanding any contrary provisions hereof) until such time, if any, as
such shares of Common Stock may be issued in compliance with such limitation,
but in no event later than the Expiration Date. By written notice to the
Company, the Holder may waive the provisions of this Section or increase or
decrease the Maximum Percentage to any other percentage specified in such
notice, but (i) any such waiver or increase will not be effective until the
61st day after such notice is delivered to the Company, (ii) any such waiver or
increase or decrease will apply only to the Holder and not to any other holder
of Warrants, and (iii) if such waiver would cause the Holder, for purposes of
Section 13(d) of the Exchange Act, to beneficially own greater than 9.99% of
the total number of issued and outstanding shares of Common Stock, then such
waiver shall not be effective until the Company consents to such waiver in
writing.  

443 

		    (b)        Notwithstanding
anything to the contrary contained herein, if the Trading Market is the New
York Stock Exchange or any other market or exchange with similar applicable
rules, then the maximum number of shares of Common Stock that the Company may
issue pursuant to the Transaction Documents at an effective purchase price less
than the Closing Price on the Trading Day immediately preceding the Closing
Date equals 2,127,345 (as adjusted for any stock dividend, stock split, stock
combination or other similar transaction) (the “Issuable Maximum”,
unless the Company obtains stockholder approval in accordance with the rules
and regulations of such Trading Market. If, at the time any Holder requests an
exercise of any of the Warrants, the Actual Minimum (excluding any shares
issued or issuable at an effective purchase price in excess of the Closing
Price on the Trading Day immediately preceding the Closing Date) exceeds the
Issuable Maximum (and if the Company has not previously obtained the required
stockholder approval), then the Company shall issue to the Holder requesting
such exercise a number of shares of Common Stock not exceeding such Holder’s
pro-rata portion of the Issuable Maximum (based on such Holder’s share
(vis-à-vis other Holders) of the aggregate purchase price paid under the
Purchase Agreement and taking into account any Warrant Shares previously issued
to such Holder). For the purposes hereof, “Actual Minimum” shall
mean, as of any date, the maximum aggregate number of shares of Common Stock
then issued or potentially issuable in the future pursuant to the Transaction
Documents, including any Underlying Shares issuable upon exercise in full of
all Warrants, without giving effect to (x) any limits on the number of shares
of Common Stock that may be owned by a Holder at any one time, or (y) any
additional Underlying Shares that could be issuable as a result of any future
possible adjustments made under Section 9(d).  

444 

         12.       
Fractional Shares. The Company shall not be required to issue or cause to be
issued fractional Warrant Shares on the exercise of this Warrant. If any
fraction of a Warrant Share would, except for the provisions of this Section, be
issuable upon exercise of this Warrant, the number of Warrant Shares to be
issued will be rounded up to the nearest whole share.  

         13.       
Notices. Any and all notices or other communications or deliveries hereunder
(including without limitation any Exercise Notice) shall be in writing and shall
be deemed given and effective on the earliest of (i) the date of transmission,
if such notice or communication is delivered via facsimile at the facsimile
number specified in this Section prior to 6:30 p.m. (New York City time) on a
Trading Day, (ii) the next Trading Day after the date of transmission, if such
notice or communication is delivered via facsimile at the facsimile number
specified in this Section on a day that is not a Trading Day or later than 6:30
p.m. (New York City time) on any Trading Day, (iii) the Trading Day following
the date of mailing, if sent by nationally recognized overnight courier service,
or (iv) upon actual receipt by the party to whom such notice is required to be
given. The address for such notices or communications shall be as set forth in
the Purchase Agreement.  

    14.       
Warrant
Agent. The Company shall serve as warrant agent under this Warrant. Upon 30 days’ notice
to the Holder, the Company may appoint a new warrant agent. Any corporation
into which the Company or any new warrant agent may be merged or any
corporation resulting from any consolidation to which the Company or any new
warrant agent shall be a party or any corporation to which the Company or any
new warrant agent transfers substantially all of its corporate trust or
stockholders services business shall be a successor warrant agent under this
Warrant without any further act. Any such successor warrant agent shall
promptly cause notice of its succession as warrant agent to be mailed (by first
class mail, postage prepaid) to the Holder at the Holder’s last address as
shown on the Warrant Register.  

    15.       
Miscellaneous.  

		    (a)                 Subject
to the restrictions on transfer set forth on the first page hereof, this
          Warrant may be assigned by the Holder. This Warrant may not be assigned by the
          Company except to a successor in the event of a Fundamental Transaction. This
          Warrant shall be binding on and inure to the benefit of the parties hereto and
          their respective successors and assigns. Subject to the preceding sentence,
          nothing in this Warrant shall be construed to give to any Person other than the
          Company and the Holder any legal or equitable right, remedy or cause of action
          under this Warrant. This Warrant may be amended only in writing signed by the
          Company and the Holder and their successors and assigns.  

		    (b)                 The
Company will not, by amendment of its governing documents or through any
          reorganization, transfer of assets, consolidation, merger, dissolution, issue
or           sale of securities or any other voluntary action, avoid or seek to avoid the
          observance or performance of any of the terms of this Warrant, but will at all
          times in good faith assist in the carrying out of all such terms and in the
          taking of all such action as may be necessary or appropriate in order to
protect           the rights of the Holder against impairment. Without limiting the
generality of           the foregoing, the Company (i) will not increase the par value of
any Warrant           Shares above the amount payable therefor on such exercise, (ii)
will take all           such action as may be reasonably necessary or appropriate in
order that the           Company may validly and legally issue fully paid and
nonassessable Warrant           Shares on the exercise of this Warrant, and (iii) will
not close its stockholder           books or records in any manner which interferes with
the timely exercise of this           Warrant.  

445 

		    (c)       
GOVERNING LAW; VENUE; WAIVER OF JURY TRIAL. ALL QUESTIONS CONCERNING THE CONSTRUCTION, VALIDITY, ENFORCEMENT AND INTERPRETATION OF THIS
WARRANT SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. EACH PARTY HEREBY IRREVOCABLY SUBMITS TO
THE EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTS SITTING IN THE CITY OF NEW YORK, BOROUGH OF MANHATTAN, FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER
OR IN CONNECTION HEREWITH OR WITH ANY TRANSACTION CONTEMPLATED HEREBY OR DISCUSSED HEREIN (INCLUDING WITH RESPECT TO THE ENFORCEMENT OF ANY OF THE
TRANSACTION DOCUMENTS), AND HEREBY IRREVOCABLY WAIVES, AND AGREES NOT TO ASSERT IN ANY SUIT, ACTION OR PROCEEDING, ANY CLAIM THAT IS NOT PERSONALLY SUBJECT
TO THE JURISDICTION OF ANY SUCH COURT, THAT SUCH SUIT, ACTION OR PROCEEDING IS IMPROPER. EACH PARTY HEREBY IRREVOCABLY WAIVES PERSONAL SERVICE OF PROCESS AND
CONSENTS TO PROCESS BEING SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING BY MAILING A COPY THEREOF VIA REGISTERED OR CERTIFIED MAIL OR OVERNIGHT DELIVERY (WITH EVIDENCE OF
DELIVERY) TO SUCH TO PARTY AT THE ADDRESS IN EFFECT FOR NOTICES TO IT UNDER THIS AGREEMENT AND AGREES THAT SUCH SERVICE SHALL CONSTITUTE GOOD AND SUFFICIENT SERVICE OF PROCESS
AND NOTICE THEREOF, NOTHING CONTAINED HEREIN SHALL BE DEEMED TO LIMIT IN ANY WAY ANY RIGHT TO SERVE PROCESS IN ANY MANNER PERMITTED BY LAW. THE COMPANY
HEREBY WAIVES ALL RIGHTS TO A TRIAL BY JURY.  

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

        In
case any one or more of the provisions of this Warrant shall be invalid or unenforceable
in any respect, the validity and enforceability of the remaining terms and provisions of
this Warrant shall not in any way be affected or impaired thereby and the parties will
attempt in good faith to agree upon a valid and enforceable provision which shall be a
commercially reasonable substitute therefor, and upon so agreeing, shall incorporate such
substitute provision in this Warrant. 

[REMAINDER OF PAGE
INTENTIONALLY LEFT BLANK,

SIGNATURE PAGE FOLLOWS] 

446 

        IN
WITNESS WHEREOF, the Company has caused this Warrant to be duly executed by its authorized
officer as of the date first indicated above. 

	  	
MAMMA.COM
INC.  

	  	
By: _________________________

Name: _______________________

Title: ________________________

447 

FORM OF EXERCISE NOTICE 

(To be executed by the Holder to
exercise the right to purchase shares of Common Stock under the foregoing Warrant) 

To: Mamma.com Inc. 

The undersigned is the Holder of Warrant
No. _______ (the “Warrant”) issued by Mamma.com Inc., a Province of Ontario,
Canada corporation (the “Company”). Capitalized terms used herein and not
otherwise defined have the respective meanings set forth in the Warrant.  

	1.  	  	The
Warrant is currently exercisable to purchase a total of ______________           Warrant
Shares.  

	2.  	  	The
undersigned Holder hereby exercises its right to purchase _________________
          Warrant Shares pursuant to the Warrant.  

	3.  	  	The
Holder intends that payment of the Exercise Price shall be made as (check           one):  

	  	
____
   “Cash Exercise” under Section 10 

	  	
____
   “Cashless Exercise” under Section 10, if eligible 

	4.  	  	            If
the holder has elected a Cash Exercise, the holder shall pay the sum of
               $____________ to the Company in accordance with the terms of the Warrant.  

	5.  	  	               Pursuant
to this exercise, the Company shall deliver to the holder                _______________
Warrant Shares in accordance with the terms of the Warrant.  

	6.  	  	               Following
this exercise, the Warrant shall be exercisable to purchase a total of
               ______________ Warrant Shares.  

	7.  	  	             The
undersigned certifies, based upon the number of shares listed as outstanding
               in the Company’s last filed SEC Report publicly available on the SEC’s
               EDGAR system as of the date of this notice, for purposes of Section 13(d)
of the                Exchange Act, that upon receipt of the Warrant Shares acquired
pursuant to this                notice the undersigned will not beneficially own Common
Stock in excess of the                limitation set forth in Section (11) of the
Warrant.  

448 

	Dated: _________________, ___	 	Name of Holder:

 (Print) _______________________________

 By: _________________________________

 Name: _______________________________

 Title: ________________________________

 (Signature  must  conform  in all  respects  to  name of

 holder as specified on the face of the Warrant)

	 

449

FORM OF ASSIGNMENT 

        [To
be completed and signed only upon transfer of Warrant] 

        FOR VALUE
RECEIVED, the undersigned hereby sells, assigns and transfers unto
________________________________ the right represented by the within Warrant to purchase
____________ shares of Common Stock of Mamma.com Inc. to which the within Warrant relates
and appoints ________________ attorney to transfer said right on the books of Mamma.com
Inc. with full power of substitution in the premises. 

Dated: ____________________, _____

	  	
____________________________

(Signature
 must  conform  in all  respects  to  name of  holder

  as
                                                specified on the face of the Warrant)

____________________________

Address of Transferee

____________________________

____________________________ 

In the presence of:

____________________________ 

450

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