Document:

EXHIBIT
      4.1

     

    
 

    REGISTRATION
      RIGHTS AGREEMENT

    

    

    This
      Registration Rights Agreement (this “Agreement”)
      is made
      and entered into as of July 7, 2006, among SmartVideo Technology, Inc., a
      Delaware corporation (the “Company”),
      and
      the Investors signatory hereto (each such Investor, an “Investor”
      and
      collectively, the “Investors”).

    

    This
      Agreement is made pursuant to the Securities Purchase Agreement, dated as of
      the
      date hereof, among the Company and the Investors (the “Purchase
      Agreement”).

    

    The
      Company and the Investors hereby agree as follows:

    

    1. Definitions.
      Capitalized terms used and not otherwise defined herein that are defined in
      the
      Purchase Agreement shall have the meanings given such terms in the Purchase
      Agreement. As used in this Agreement, the following terms shall have the
      following meanings:

    

    “Advice”
      shall
      have the meaning set forth in Section 6(c). “Common
      Stock”
      means
      the common stock of the Company, par value $.001 per share, and any securities
      into which such common stock may hereafter be classified.

    

    “Effective
      Date”
      means,
      (a) with respect to the initial Registration Statement required to be filed
      hereunder, the fifth Trading Day following the date on which the Company is
      notified by the Commission that the Registration Statement will not be reviewed
      or is no longer subject to further review and comments, and (b) with respect
      to
      any additional Registration Statement(s) that may be required pursuant to
      Section 2(b), the earlier of (i) the 120th day following if such Registration
      Statement is required because the Commission shall have notified the Company
      in
      writing that certain Registrable Securities were not eligible for inclusion
      on a
      previously filed Registration Statement, the date or time on which the
      Commission shall indicate as being the first date or time that such Registrable
      Securities may then be included in a Registration Statement, or and (ii) the
      fifth Trading Day following the date on which the Company is notified by the
      Commission that such additional Registration Statement will not be reviewed
      or
      is no longer subject to further review and comments. 

    

    “Effectiveness
      Period”
      shall
      have the meaning set forth in Section 2(a).

    

    “Event”
      shall
      have the meaning set forth in Section 2(c).

    

    “Event
      Date”
      shall
      have the meaning set forth in Section 2(c).

    

    “Force
      Majeure”
      shall
      mean any unusual event arising from causes reasonably beyond the control of
      the
      Company that could not be reasonably anticipated that causes a delay in or
      prevents the performance of any obligation under this Agreement, including
      but
      not limited to, acts of God, fire, war, terrorism, insurrection, civil
      disturbance, explosion, adverse weather conditions, unusual delay in
      transportation, strikes or other labor disputes, and restraint by court order
      or
      order of public authority. 

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    “Grace
      Period”
      shall
      have the meaning set forth in Section 2(c)(iv).

    

    “Holder”
      or
“Holders”
      means
      the holder or holders, as the case may be, from time to time of Registrable
      Securities.

    

    “Indemnified
      Party”
      shall
      have the meaning set forth in Section 5(c).

    

    “Indemnifying
      Party”
      shall
      have the meaning set forth in Section 5(c).

    

    “Losses”
      shall
      have the meaning set forth in Section 5(a).

    

    “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 a 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.

    

    “Registrable
      Securities”
      means
      all of the Common Shares and the Warrant Shares, together with any shares of
      Common Stock issued or issuable upon (a) any stock split, dividend or other
      distribution, recapitalization or similar event with respect to the foregoing
      and/or (b) any conversion of any shares of Preferred Stock into shares of Common
      Stock.

    

    “Registration
      Statement”
      means
      the registration statements required to be filed hereunder, including (in each
      case) the Prospectus, amendments and supplements to such registration
      statement(s) 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(s).

    

    “Response
      Date”
      shall
      have the meaning set forth in Section 2(c)(ii).

    

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

    

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

    

    
      
        
        

      

      
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    “SEC”
      or
“Commission”
      means the United States Securities and Exchange
      Commission.

    

    2. Registration.

    

    (a) On
      or
      prior to the 45th
      day from
      the Closing Date, the Company shall prepare and file with the SEC a Registration
      Statement covering the resale of all of the Registrable Securities for an
      offering to be made on a continuous basis pursuant to Rule 415. Each
      Registration Statement required hereunder shall be on Form S-3 (except if the
      Company is not then eligible to register for resale the Registrable Securities
      on Form S-3, in which case the Registration shall be on another appropriate
      form
      in accordance herewith). Each Registration Statement required hereunder shall
      contain (except if otherwise directed by the Holders) the “Plan
      of Distribution”
      attached
      hereto as Annex
      A.
      Subject
      to the terms of this Agreement, the Company shall use its best efforts to cause
      each Registration Statement to be declared effective under the Securities Act
      as
      promptly as possible after the filing thereof, but in any event not later than
      the Effective Date, and shall use its best efforts to keep each Registration
      Statement continuously effective under the Securities Act until the date when
      all Registrable Securities covered by that Registration Statement have been
      sold
      or may be sold without volume restrictions pursuant to Rule 144(k) as determined
      by the counsel to the Company pursuant to a written opinion letter to such
      effect, addressed and acceptable to the Company’s transfer agent and the
      affected Holders (the “Effectiveness
      Period”).

    

    (b) If
      for
      any reason the SEC does not permit all of the Registrable Securities to be
      included in any Registration Statement filed pursuant to Section 2(a), then
      the
      Company shall prepare and file as soon as possible after the date on which
      the
      SEC shall indicate as being the first date or time that such filing may be
      made,
      but in any event by no later than the 60th
      day
      following the date on which the SEC shall indicate as being the first date
      or
      time that such Registrable Securities may then be included in a Registration
      Statement, one or more additional Registration Statements covering the resale
      of
      all Registrable Securities not already covered by an existing and effective
      Registration Statement for an offering to be made on a continuous basis pursuant
      to Rule 415. Each such Registration Statement shall contain (except if otherwise
      directed by the Holders) the "Plan of Distribution" attached hereto as
Annex
      A.
      The
      Company shall use its best efforts to cause each such Registration Statement
      to
      be declared effective under the Securities Act as soon as possible but, in
      any
      event, no later than its Effective Date, and shall use its best efforts to
      keep
      such Registration Statement continuously effective under the Securities Act
      during its entire Effectiveness Period.

    

    
      
        
        

      

      
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    (c) If:
      (i) a
      Registration Statement is not filed on or prior to its Filing Date (if the
      Company files a Registration Statement without affording the Holders the
      opportunity to review and comment on the same as required by Section 3(a)
      hereof, the Company shall not be deemed to have satisfied this clause (i)),
      or
      (ii) prior to the date when such Registration Statement is first declared
      effective by the SEC, the Company fails to file a pre-effective amendment and
      otherwise respond in writing to comments made by the SEC in respect of such
      Registration Statement within 30 calendar days (the “Response
      Date”)
      after
      the receipt of comments by or notice from the SEC that such amendment is
      required in order for such Registration Statement to be declared effective,
      or
      (iii) a Registration Statement filed or required to be filed hereunder is not
      declared effective by the SEC on or before its Effective Date, or (iv) during
      the Effectiveness Period, a Registration Statement ceases for any reason to
      remain continuously effective as to all Registrable Securities for which it
      is
      required to be effective, or the Holders are not permitted to utilize the
      Prospectus therein to resell such Registrable Securities, for in any and all
      such cases for more than an aggregate of 20 Trading Days (the “Grace
      Period”)
      during
      any 12-month period during the Effectiveness Period (which need not be
      consecutive Trading Days)(any such failure or breach being referred to as an
      “Event,”
      and for
      purposes of clause (i) or (iii) the date on which such Event occurs, or for
      purposes of clause (ii) the date which such 30 calendar days is exceeded, or
      for
      purposes of clause (iv) the date on which such 20 Trading Days is exceeded
      being
      referred to as “Event
      Date”),
      then
      in addition to any other rights the Holders may have hereunder or under
      applicable law: (x) on each such Event Date the Company shall pay to each Holder
      an amount in cash, as partial liquidated damages and not as a penalty, equal
      to
      1.5% of the aggregate Investment Amount paid by such Holder pursuant to the
      Purchase Agreement; and (y) on each monthly anniversary of each such Event
      Date
      (if the applicable Event shall not have been cured by such date) until the
      applicable Event is cured, the Company shall pay to each Holder an amount in
      cash, as partial liquidated damages and not as a penalty, equal to 1.5% of
      the
      aggregate Investment Amount paid by such Holder pursuant to the Purchase
      Agreement; provided, however, that in no event shall the payments made pursuant
      to this Section 2(c), if any, exceed in the aggregate twelve percent (12%)
      of
      the aggregate Investment Amount paid by such Holder pursuant to the Purchase
      Agreement. . The partial liquidated damages pursuant to the terms hereof shall
      apply on a daily pro-rata basis for any portion of a month prior to the cure
      of
      an Event, except in the case of the first Event Date. Notwithstanding the
      foregoing, any day on which a Force Majeure has occurred or is continuing shall
      not count toward the calculation of the number of days for the Filing Date,
      the
      Effective Date, the Response Date and a Grace Period.

    

    (d) Each
      Holder agrees to furnish to the Company a completed Questionnaire in the form
      attached to this Agreement as Annex
      B
      (a
“Selling
      Holder Questionnaire”).
      The
      Company shall not be required to include the Registrable Securities of a Holder
      in a Registration Statement and shall not be required to pay any liquidated
      or
      other damages under Section 2(c) to such Holder who fails to furnish to the
      Company a fully completed Selling Holder Questionnaire at least one Trading
      Day
      prior to the Filing Date (subject to the requirements set forth in Section
      3(a)).

    

    3. Registration
      Procedures

    

    In
      connection with the Company's registration obligations hereunder, the Company
      shall:

    

    
      
        
        

      

      
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    (a) Not
      less
      than three Trading Days prior to the filing of a Registration Statement or
      any
      related Prospectus or any amendment or supplement thereto, the Company shall
      furnish to one representative of the Holders designated in writing to the
      Company copies of the “Selling Stockholders” section of such document, the “Plan
      of Distribution” and any risk factor contained in such document that addresses
      specifically this transaction or the Selling Stockholders, as proposed to be
      filed which documents will be subject to the review of such designated
      representative. The Company shall not file a Registration Statement or any
      such
      Prospectus or any amendments or supplements thereto that does not contain the
      disclosure regarding each of the Holders as a “Selling Stockholder” as provided
      to the Company by the designated representative of the Holders. 

    

    (b) 
      (i)
      Prepare and file with the SEC such amendments, including post-effective
      amendments, to each Registration Statement and the Prospectus used in connection
      therewith as may be necessary to keep that Registration Statement continuously
      effective as to the applicable Registrable Securities for the Effectiveness
      Period and prepare and file with the SEC 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
      to
      any comments received from the SEC with respect to each Registration Statement
      or any amendment thereto and, as promptly as reasonably possible, upon request,
      provide the Holders true and complete copies of all correspondence from and
      to
      the SEC relating to each Registration Statement; and (iv) comply with the
      provisions of the Securities Act and the Exchange Act with respect to the
      disposition of all Registrable Securities covered by each Registration Statement
      (to the extent such provisions are applicable to the Company). Notwithstanding
      anything else contained herein to the contrary, the Company shall not provide
      any material, nonpublic information to the Holders. 

    

    (c) Notify
      the Holders of Registrable Securities as promptly as reasonably possible (and,
      in the case of (i)(A) below, not less than two Trading Days prior to such
      filing) and (if requested by any such Person) confirm such notice in writing
      promptly following the day (i)(A) when a Prospectus or any Prospectus supplement
      or post-effective amendment to a Registration Statement is proposed to be filed;
      (B) when the SEC notifies the Company whether there will be a “review” of a
      Registration Statement and whenever the SEC comments in writing on a
      Registration Statement (the Company shall provide copies thereof and all written
      responses thereto to each of the Holders to the extent such materials address
      the Selling Stockholder or Plan of Distribution sections of such Registration
      Statement, and to the extent they address risk factors or other disclosure
      in
      such Registration Statement particular to the Holder or the transactions
      contemplated hereby); and (C) with respect to each Registration Statement or
      any
      post-effective amendment, when the same has become effective; (ii) of any
      request by the SEC or any other Federal or state governmental authority during
      the period of effectiveness of a Registration Statement for amendments or
      supplements to that Registration Statement or Prospectus or for additional
      information; (iii) of the issuance by the SEC or any other federal or state
      governmental authority of any stop order suspending the effectiveness of a
      Registration Statement covering any or all of the Registrable Securities or
      the
      initiation of any Proceedings for that purpose; (iv) of the receipt by the
      Company of any notification with respect to the suspension of the qualification
      or exemption from qualification of any of the Registrable Securities for sale
      in
      any jurisdiction, or the initiation or threatening of any Proceeding for such
      purpose; and (v) of the occurrence of any event or passage of time that makes
      the financial statements included in a Registration Statement ineligible for
      inclusion therein or any statement made in a Registration Statement or
      Prospectus or any document incorporated or deemed to be incorporated therein
      by
      reference untrue in any material respect or that requires any revisions to
      a
      Registration Statement, Prospectus or other documents so that, in the case
      of
      the Registration Statement or the Prospectus, as the case may be, 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 light of the circumstances under which they were made, not
      misleading.

    

    
      
        
        

      

      
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    (d) Use
      reasonable best efforts to avoid the issuance of, or, if issued, obtain the
      withdrawal of (i) any order suspending the effectiveness of a Registration
      Statement, or (ii) any suspension of the qualification (or exemption from
      qualification) of any of the Registrable Securities for sale in any
      jurisdiction, at the earliest practicable moment.

    

    (e) Deliver
      to each Holder, by 9:00 a.m. (New York City time) on the date following the
      Effective Date, without charge, up to five copies of the Prospectus or
      Prospectuses (including each form of prospectus) and each amendment or
      supplement thereto as such Persons may request in connection with resales by
      the
      Holder of Registrable Securities. Subject to the terms of this Agreement, the
      Company hereby consents to the use of such Prospectus and each amendment or
      supplement thereto by each of the selling Holders in connection with the
      offering and sale of the Registrable Securities covered by such Prospectus
      and
      any amendment or supplement thereto, subject to notices pursuant to Section
      3(c).

    

    (f) Prior
      to
      any resale of Registrable Securities by a Holder, use its commercially
      reasonable efforts to register or qualify or cooperate with the selling Holders
      in connection with the registration or qualification (or exemption from the
      Registration or qualification) of such Registrable Securities for the resale
      by
      the Holder under the securities or Blue Sky laws of such jurisdictions within
      the United States as any Holder reasonably requests in writing, to keep the
      Registration or qualification (or exemption therefrom) effective during the
      Effectiveness Period and to do any and all other acts or things reasonably
      necessary to enable the disposition in such jurisdictions of the Registrable
      Securities covered by that Registration Statement; provided,
      that
      the Company shall not be required to qualify generally to do business or file
      a
      general consent to service of process in any jurisdiction where it is not then
      so qualified.

    

    (g) If
      requested by the Holders, cooperate with each Holder 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 the Purchase Agreement,
      of all restrictive legends, and to enable such Registrable Securities to be
      in
      such denominations and registered in such names as any such Holders may
      request.

    

    
      
        
        

      

      
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    (h) Upon
      the
      occurrence of any event contemplated by this Section 3, as promptly as
      commercially reasonably possible under the circumstances taking into account
      the
      Company’s good faith assessment of any adverse consequences to the Company and
      its stockholders of the premature disclosure of such events, prepare a
      supplement or amendment, including a post-effective amendment, to the applicable
      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 such
      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 light of the circumstances under
      which they were made, not misleading. If
      the
      Company notifies the Holders in accordance with clauses (ii) through (v) of
      Section 3(c) above to suspend the use of any Prospectus until the requisite
      changes to such Prospectus have been made, then the Holders shall suspend use
      of
      such Prospectus. The Company will use its best efforts to ensure that the use
      of
      the Prospectus may be resumed as promptly as is commercially practicable. The
      Company shall be entitled to exercise its right under this Section 3(h) to
      suspend the availability of a Registration Statement and Prospectus, subject
      to
      the payment of liquidated damages pursuant to Section 2(c), for a period not
      to
      exceed 60 days (which need not be consecutive days) in any 12 month
      period.

    

    (i) Comply
      with all applicable rules and regulations of the SEC.

    

    (j) Upon
      notification by the SEC that a Registration Statement will not be reviewed
      or is
      no longer subject to further review and comments, request acceleration of such
      Registration Statement such that it becomes effective at 5:00 p.m. (New York
      City time) on the Effective Date. 

    

    4. Registration
      Expenses.
      All
      fees and expenses incident to the performance of or compliance with this
      Agreement by the Company shall be borne by the Company whether or not any
      Registrable Securities are sold pursuant to a Registration Statement. The fees
      and expenses referred to in the foregoing sentence shall include, without
      limitation, (i) all registration and filing fees (including, without limitation,
      fees and expenses (A) with respect to filings required to be made with the
      Principal Market on which the Common Stock is then listed for trading, and
      (B)
      in compliance with applicable state securities or Blue Sky laws), (ii) printing
      expenses (including, without limitation, expenses of printing certificates
      for
      Registrable Securities and of printing prospectuses if the printing of
      prospectuses is reasonably requested by the holders of a majority of the
      Registrable Securities included in a Registration Statement), (iii) messenger,
      telephone and delivery expenses, (iv) fees and disbursements of counsel for
      the
      Company, (v) Securities Act liability insurance, if the Company so desires
      such
      insurance, and (vi) fees and expenses of all other Persons retained by the
      Company in connection with the consummation of the transactions contemplated
      by
      this Agreement. In addition, the Company shall be responsible for all of its
      internal expenses incurred in connection with the consummation of the
      transactions contemplated by this Agreement (including, without limitation,
      all
      salaries and expenses of its officers and employees performing legal or
      accounting duties), the expense of any annual audit and the fees and expenses
      incurred in connection with the listing of the Registrable Securities on any
      securities exchange or market as required hereunder. In no event shall the
      Company be responsible for any broker or similar commissions of the
      Holders.

    

    
      
        
        

      

      
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    5. Indemnification

    

    (a) Indemnification
      by the Company.
      The
      Company shall, notwithstanding any termination of this Agreement, indemnify
      and
      hold harmless each Holder, the officers, directors, agents and employees of
      each
      of them, each Person who controls any such Holder (within the meaning of Section
      15 of the Securities Act or Section 20 of the Exchange Act) and the officers,
      directors, agents and employees of each such controlling Person, to the fullest
      extent permitted by applicable law, from and against any and all losses, claims,
      damages, liabilities, costs (including, without limitation, reasonable
      attorneys' fees) and expenses (collectively, “Losses”),
      as
      incurred, arising out of or relating to any violation by the Company of this
      Agreement or any securities laws, or any untrue or alleged untrue statement
      of a
      material fact contained in a 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 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 or omissions are based solely upon information regarding
      such
      Holder furnished in writing to the Company by such Holder expressly for use
      therein, or to the extent that such information relates to such Holder or such
      Holder's proposed method of distribution of Registrable Securities and was
      reviewed and expressly approved in writing by such Holder expressly for use
      in a
      Registration Statement, such Prospectus or such form of Prospectus or in any
      amendment or supplement thereto (it being understood that the Holder has
      approved Annex A hereto for this purpose), (ii) in the case of an occurrence
      of
      an event of the type specified in Section 3(c)(ii)-(v), the use by such Holder
      of an outdated or defective Prospectus after the Company has notified such
      Holder in writing that the Prospectus is outdated or defective and prior to
      the
      receipt by such Holder of the Advice or an amended or supplemented Prospectus,
      but only if and to the extent that following the receipt of the Advice or the
      amended or supplemented Prospectus the misstatement or omission giving rise
      to
      such Loss would have been corrected or (iii) such Holder fails to comply with
      any applicable prospectus delivery requirements of the Securities Act applicable
      to it in connection with sales of Registrable Securities pursuant to a
      Registration Statement. The Company shall notify the Holders 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.

    

    (b) Indemnification
      by Holders.
      Each
      Holder 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 or based solely
      upon: (x) such Holder's failure to comply with the prospectus delivery
      requirements of the Securities Act to the extent that delivery of such
      Prospectus would have avoided such Loss or (y) any untrue or alleged untrue
      statement of a material fact contained in any Registration Statement, any
      Prospectus, or any form of prospectus, or in any amendment or supplement thereto
      or in any preliminary prospectus, or arising solely out of or based solely
      upon
      any omission or alleged omission of a material fact required to be stated
      therein or necessary to make the statements therein not misleading to the
      extent, but only to the extent, that such untrue statements or omissions are
      based solely upon information regarding such Holder furnished in writing to
      the
      Company by such Holder expressly for use therein. In no event shall the
      liability of any selling Holder hereunder be greater in amount than the dollar
      amount of the net proceeds received by such Holder upon the sale of the
      Registrable Securities giving rise to such indemnification
      obligation.

    

    
      
        
        

      

      
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    (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 have the right to 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 prejudiced the Indemnifying
      Party.

    

    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: (1) the Indemnifying Party has agreed in writing to pay such fees and
      expenses; (2) 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 (3) 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
      by counsel that a material 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 the reasonable fees and expenses of up to an aggregate of three
      separate 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. 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.

    

    Subject
      to the terms of this Agreement, all reasonable 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; provided,
      that
      the Indemnified Party shall promptly reimburse the Indemnifying Party for that
      portion of such fees and expenses applicable to such actions for which such
      Indemnified Party is not entitled to indemnification hereunder, determined
      based
      upon the relative faults of the parties.

    

    
      
        
        

      

      
        -9-

        
          

        

      

      
        
        

      

    

    (d) Contribution.
      If a
      claim for indemnification under Section 5(a) or 5(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 this Section 5, 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.

    

    The
      parties hereto agree that it would not be just and equitable if contribution
      pursuant to this Section 5(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 5(d), no Holder shall be required
      to contribute, in the aggregate, any amount in excess of the amount by which
      the
      proceeds actually received by such Holder from the sale of the Registrable
      Securities subject to the Proceeding exceeds the amount of any damages that
      such
      Holder has otherwise been required to pay by reason of such untrue or alleged
      untrue statement or omission or alleged omission or other act in question.
      No
      party
      guilty of fraudulent misrepresentation (within the meaning of Section 11(f)
      of
      the Securities Act) shall be entitled to contribution from any party that 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.

    

    6. Miscellaneous

    

    (a) Remedies.
      In the
      event of a breach by the Company or by a Holder, of any of their obligations
      under this Agreement, each Holder or the Company, as the case may be, in
      addition to being entitled to exercise all rights granted by law and under
      this
      Agreement, including recovery of damages, will be entitled to specific
      performance of its rights under this Agreement. The Company and each Holder
      agree that monetary damages would not provide adequate compensation for any
      losses incurred by reason of a breach by it of any of the provisions of this
      Agreement and hereby further agrees that, in the event of any action for
      specific performance in respect of such breach, it shall waive the defense
      that
      a remedy at law would be adequate.

    

    
      
        
        

      

      
        -10-

        
          

        

      

      
        
        

      

    

    (b) Compliance.
      Each
      Holder covenants and 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 a Registration Statement.

    

    (c) Discontinued
      Disposition.
      Each
      Holder agrees by its acquisition of such Registrable Securities that, upon
      receipt of a notice from the Company of the occurrence of any event of the
      kind
      described in Section 3(c), such Holder will forthwith discontinue disposition
      of
      such Registrable Securities under the applicable Registration Statement until
      such Holder's receipt of the copies of the supplemented Prospectus and/or
      amended Registration Statement 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 will use its best efforts to ensure that
      the
      use of the Prospectus may be resumed as promptly as is commercially practicable.
      The
      Company agrees and acknowledges that any periods during which the Holder is
      required to discontinue the disposition of the Registrable Securities hereunder
      shall be subject to the provisions of Section 2(c).

    

    (d) 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 SEC 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 S-4 or Form S-8 (each
      as
      promulgated under the Securities Act) or their then equivalents 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 the stock option or other employee
      benefit plans, then the Company shall send to each Holder a written notice
      of
      such determination and, if within fifteen days after the date of such notice,
      any such Holder shall so request in writing, the Company shall include in such
      registration statement all or any part of such Registrable Securities such
      Holder requests to be registered, subject to customary underwriter cutbacks
      applicable to all holders of registration rights.

    

    (e) No
      Piggyback on Registration Statement.
      Except
      as set forth in Schedule
      6(e),
      neither
      the Company nor any of its security holders (other than the Holders in such
      capacity pursuant hereto) may include securities of the Company in a
      Registration Statement other than the Registrable Securities, and the Company
      shall not after the date hereof enter into any agreement providing any such
      right to any of its security holders. 

    

    (f) Amendments
      and Waivers.
      No
      provision of this Agreement may be waived or amended except in a written
      instrument signed by the Company and the Investors holding a majority of the
      Registrable Securities. 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.

    

    
      
        
        

      

      
        -11-

        
          

        

      

      
        
        

      

    

    (g) Notices.
      Any and
      all notices or other communications or deliveries required or permitted to
      be
      provided hereunder shall be made in accordance with the provisions of the
      Purchase Agreement.

    

    (h) Successors
      and Assigns.
      This
      Agreement shall inure to the benefit of and be binding upon the successors
      and
      permitted assigns of each of the parties and shall inure to the benefit of
      each
      Holder. Each Holder may assign their respective rights hereunder in the manner
      and to the Persons as permitted under the Purchase Agreement. The Company may
      not assign its rights or obligations hereunder. 

    

    (i) Execution
      and Counterparts.
      This
      Agreement may be executed in any number of counterparts, each of which when
      so
      executed shall be deemed to be an original and, all of which taken together
      shall constitute one and the same Agreement. In the event that any signature
      is
      delivered by facsimile transmission, such signature shall create a valid binding
      obligation of the party executing (or on whose behalf such signature is
      executed) the same with the same force and effect as if such facsimile signature
      were the original thereof.

    

    (j) Governing
      Law.
      All
      questions concerning the construction, validity, enforcement and interpretation
      of this Agreement shall be determined in accordance with the provisions of
      the
      Purchase Agreement.

    

    (k) Cumulative
      Remedies.
      The
      remedies provided herein are cumulative and not exclusive of any remedies
      provided by law.

    

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

    

    (m) Headings.
      The
      headings in this Agreement are for convenience of reference only and shall
      not
      limit or otherwise affect the meaning hereof.

    

    
      
        
        

      

      
        -12-

        
          

        

      

      
        
        

      

    

    (n) Independent
      Nature of Holders' Obligations and Rights.
      The
      obligations of each Holder hereunder are several and not joint with the
      obligations of any other Holder hereunder, and no Holder shall be responsible
      in
      any way for the performance of the obligations of any other Holder hereunder.
      Nothing contained herein or in any other agreement or document delivered at
      any
      closing, and no action taken by any Holder pursuant hereto or thereto, shall
      be
      deemed to constitute the Holders as a partnership, an association, a joint
      venture or any other kind of entity, or create a presumption that the Holders
      are in any way acting in concert with respect to such obligations or the
      transactions contemplated by this Agreement. Each Holder acknowledges that
      no
      other Holder has acted as agent for such Holder in connection with executing
      this Agreement and that no Holder will be acting as agent of such Holder in
      connection with monitoring the registration of the Registrable Securities or
      enforcing its rights under this Agreement. Each Holder shall be entitled to
      protect and enforce its rights, including without limitation the rights arising
      out of this Agreement, and it shall not be necessary for any other Holder to
      be
      joined as an additional party in any Proceeding for such purpose. The Company
      acknowledges that each of the Investors has been provided with the same
      Transaction Documents and will likely have their respective Registrable
      Securities included on the same Registration Statement, for the purpose of
      closing a transaction with multiple Investors and not because it was required
      or
      requested to do so by any Investor.

    

    (o) Jurisdiction
      and Venue. Each
      party hereby irrevocably submits to the exclusive jurisdiction of the state
      and
      federal courts sitting in Fulton County, Georgia, or any federal court sitting
      in the Northern District of Georgia, Atlanta Division for the adjudication
      of
      any dispute hereunder or in connection herewith or with any transaction
      contemplated hereby or discussed herein, and hereby irrevocably waives, and
      agrees not to assert in any suit, action or proceeding, any claim that it is
      not
      personally subject to the jurisdiction of any such court, that such suit, action
      or proceeding is brought in an inconvenient forum or that the venue of such
      suit, action or proceeding is improper. Each party hereby irrevocably waives
      personal service of process and consents to process being served in any such
      suit, action or proceeding by mailing a copy thereof to such party at the
      address for such notices to it under this Agreement and agrees that such service
      shall constitute good and sufficient service of process and notice thereof.
      Nothing contained herein shall be deemed to limit in any way any right to serve
      process in any manner permitted by law. EACH
      PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO
      REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN
      CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED
      HEREBY.

     

     

    *************************
 

    
      
        
        

      

      
        -13-

        
          

        

      

      
        
        

      

       

    

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

    

    
      	 	 	 
	 	SMARTVIDEO
              TECHNOLOGIES, INC.
	 
 	 
 	 
 
	 	By:  	/s/
              William J. Loughman
	 	
              
Name:
              William J. Loughman
	 	
              Title:
                Vice President of Finance

            

    

    

 

    

    [SIGNATURE
      PAGE OF HOLDERS FOLLOWS]

     

    
 

    
      
        
        

      

      
        -14-

        
          

        

      

      
        
        

      

      

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

      

      
         

        
          
            	
                    
                      John
                        E. Abdo as Trustee Under Trust Agreement UAD 3/15/76 For
                        the Benefit of
                        John E. Abdo

                      /s/
                        John E. Abdo, as Trustee

                      Name:
                        John E. Abdo

                    

                  	 	
                    /s/
                      Diane B. Abelson

                    Diane
                      B. Abelson

                  	 	
                    Global
                      Triangle Employees Retirement Trust

                    /s/
                      John Accetta

                    Name:
                      John Accetta

                  	 	
                    /s/
                      Joel L.Altman

                    Joel
                      L. Altman

                  
	 	 	 	 	 	 	 
	
                    
                      Joseph
                        C. Amaturo Revocable Trust u/a/d 9/14/88

                      /s/
                        Joseph C. Amaturo 

                      Name:
                        Joseph C. Amaturo 

                    

                  	 	
                    Apler
                      Investment Partnership

                    /s/
                      Stewart L. Appelrouth

                    Name:
                      Stewart L. Appelrouth

                  	 	
                    /s/
                      Robert Balogh

                    Robert
                      Balogh

                  	 	
                    /s/
                      Jeff Baumann

                    Jeff
                      Baumann

                  
	 	 	 	 	 	 	 
	
                    /s/
                      Mike Baumann

                    Mike
                      Baumann

                  	 	
                    Beeson
                      Investments, LLC

                    /s/
                      Jim Beeson

                    Name:
                      Jim Beeson

                  	 	
                    /s/
                      Audrey Bennati

                    Audrey
                      Bennati

                  	 	
                    /s/
                      Peter L. Bermont

                    Peter
                      L. Bermont

                  
	 	 	 	 	 	 	 
	
                    /s/
                      Robert Best

                    Robert
                      Best

                  	 	
                    /s/
                      Harvey Birdman

                    Harvey
                      Birdman

                  	 	
                    /s/
                      Jeffrey D. Blum, D.D.S

                    Jeffrey
                      D. Blum, D.D.S..

                  	 	
                    /s/
                      Henrik Brixen

                    Henrik
                      Brixen

                  
	 	 	 	 	 	 	 
	
                    Vulcan
                      Properties, Inc.

                    /s/
                      Arthur G. Cohen

                    Arthur
                      G. Cohen

                  	 	
                    
                      
                        Martin
                          Cohen & Soryl Cohen, JT TEN

                        /s/
                          Martin Cohen

                        Martin
                          Cohen

                        /s/
                          Soryl Cohen

                        Soryl
                          Cohen

                      

                    

                  	 	
                    /s/
                      Art Criden

                    Art
                      Criden

                  	 	
                    /s/
                      Chris Damian

                    Chris
                      Damian

                  
	 	 	 	 	 	 	 
	
                    /s/
                      Geoff Dyer

                    Geoff
                      Dyer

                  	 	
                    SME
                      Children LLP

                    /s/
                      Steven Esrick

                    Steven
                      Esrick

                  	 	
                    /s/
                      Paul Fazio

                    Paul
                      Fazio

                  	 	
                    Qualified
                      Compensation Trust

                    /s/
                      Theodore Feldman, M.D.

                    Name:
                      Theodore Feldman, M.D.

                  
	 	 	 	 	 	 	 
	
                    /s/
                      Jonathan E. Fels

                    Jonathan
                      E. Fels

                  	 	
                    Benjamin
                      Management Company, LLC

                    /s/
                      Bruce Gittlin

                    Name:
                      Bruce Gittlin, Attorney In Fact

                  	 	
                    
                      Wachovia
                        Bank For the Benefit ofAlan Halpert IRA Acct: 39938330

                      By:
                        /s/
                        Alan Halpert

                      Name:
                        Alan Halpert

                    

                  	 	
                    /s/
                      Michael Hanzman

                    Michael
                      Hanzman

                  
	 	 	 	 	 	 	 
	
                    /s/
                      Scot Hunter

                    Scot
                      Hunter

                  	 	
                    /s/
                      Stephen A. Hurwitz

                    Stephen
                      A. Hurwitz

                  	 	
                    
                      
                        Alan
                          Jacobson & Jan Hart

                        /s/
                          Alan Jacobson

                        Alan
                          Jacobson

                        /s/
                          Jan Hart

                        Jan
                          Hart

                      

                    

                  	 	
                    /s/
                      Kent Karpawich

                    Kent
                      Karpawich

                  
	 	 	 	 	 	 	 
	
                    /s/
                      Todd Katz

                    Todd
                      Katz

                  	 	
                    /s/
                      Sharon Kaufman

                    Sharon
                      Kaufman

                  	 	
                    Dill
                      Consulting LLC

                    /s/
                      Gary Krat

                    Name:
                      Gary Krat

                  	 	
                    /s/
                      Dan Kleiman

                    Dan
                      Kleiman

                  
	 	 	 	 	 	 	 
	
                    SGL
                      Investments Limited Partnership 1

                    /s/
                      Stuart G. Lasher

                    Name:
                      Stuart G. Lasher

                  	 	
                    
                      Alan
                        B. Levan, Trustee

                      /s/
                        Alan B. Levan, Trustee

                      Alan
                        B. Levan, Trustee

                    

                  	 	
                    /s/
                      Baruch Levy

                    Baruch
                      Levy

                  	 	
                    /s/
                      Michael Levy

                    Michael
                      Levy

                  
	 	 	 	 	 	 	 
	
                    /s/
                      William
                      Loughman

                    William
                      Loughman

                  	 	
                    /s/
                      Kevin Love

                    Kevin
                      Love

                  	 	
                    William
                      Matz Revocable Living Trust u/a Dated 9/15/97

                    /s/
                      William Matz 

                    Name:
                      William Matz, Trustee

                  	 	
                    Quantuck
                      Advisors, LLC

                    /s/
                      John McCartney

                    John
                      McCartney

                  
	 	 	 	 	 	 	 
	
                    MOKO
                      Investments, LLC

                    /s/
                      Stuart R. Morris, Mgr.

                    Name:
                      Stuart R. Morris, Mgr.

                  	 	
                    /s/
                      Brett Overman

                    Brett
                      Overman

                  	 	
                    TOP,
                      Inc.

                    /s/
                      Tyson Overman

                    Tyson
                      Overman

                  	 	
                    /s/
                      Scott Peck

                    Scott
                      Peck

                  
	 	 	 	 	 	 	 
	
                    Scott
                      A. Poulin Revocable Trust

                    /s/
                      Scott Poulin

                    Name:
                      Scott Poulin

                  	 	
                    /s/
                      Buddy Puder

                    Buddy
                      Puder

                  	 	
                    /s/
                      Michael Puder

                    Michael
                      Puder

                  	 	
                    /s/
                      Laura K. Pugliese

                    Laura
                      K. Pugliese

                  
	 	 	 	 	 	 	 
	
                    /s/
                      Anthony V. Pugliese, III

                    Anthony
                      V. Pugliese, III

                  	 	
                    /s/
                      Beverly Raphael

                    Beverly
                      Raphael

                  	 	
                    Ratner
                      Companies

                    /s/
                      Dennis Ratner

                    Name:
                      Dennis Ratner

                  	 	
                    
                      Steve
                        Rattner and Debra Rattner, Joint Tennants

                      /s/
                        Steve Rattner

                      Steve
                        Rattner

                      /s/
                        Debra Rattner

                      Debra
                        Rattner

                    

                  
	 	 	 	 	 	 	 
	
                    /s/
                      Dwight Richert

                    Dwight
                      Richert

                  	 	
                    /s/
                      Scott Robins

                    Scott
                      Robins

                  	 	
                    /s/
                      Herman Rush

                    Herman
                      Rush

                  	 	
                    /s/
                      Scott Schlesinger

                    Scott
                      Schlesinger

                  
	 	 	 	 	 	 	 
	
                    /s/
                      Brent Sembler

                    Brent
                      Sembler

                  	 	
                    /s/
                      Jay Shapiro

                    Jay
                      Shapiro

                  	 	
                    
                      GHS
                        Holdings Limited Partnership

                      /s/
                        Glenn Singer

                      Glenn
                        Singer

                    

                  	 	
                    /s/
                      Barry E. Somerstein

                    Barry
                      E. Somerstein

                  
	 	 	 	 	 	 	 
	
                    /s/
                      Justin A. Stanley, Jr.

                    Justin
                      A. Stanley, Jr.

                  	 	
                    /s/
                      J. Kenneth Tate

                    J.
                      Kenneth Tate

                  	 	
                    /s/
                      James D. Tate

                    James
                      D. Tate

                  	 	
                    /s/
                      Stanley G. Tate

                    Stanley
                      G. Tate

                  
	 	 	 	 	 	 	 
	
                    /s/
                      Sushayla Ure

                    Sushayla
                      Ure

                  	 	
                    Bayview
                      Partners

                    /s/
                      William H. Van Pelt, IV

                    Name:
                      William H. Van Pelt, IV

                  	 	
                    Fremernat,
                      Inc.

                    /s/
                      Fredy C. Varela

                    Fredy
                      C. Varela

                  	 	
                    /s/
                      Rick Walker

                    Rick
                      Walker

                  
	 	 	 	 	 	 	 
	
                    /s/
                      Rick Wilber

                    Rick
                      Wilber

                  	 	
                    /s/
                      Nicholas C. Williams

                    Nicholas
                      C. Williams

                  	 	 	 	 

          

        

         

        [Signature
          Page to Securities Purchase Agreement] 

      

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    ANNEX
      A

    

    

    

    Plan
      of
      Distribution

    

    The
      selling stockholders and any of their pledgees, donees, transferees, assignees
      and successors-in-interest may, from time to time, sell any or all of their
      shares of common stock on any stock exchange, market or trading facility on
      which the shares are traded or in private transactions. These sales may be
      at
      fixed or negotiated prices. The selling stockholders may use any one or more
      of
      the following methods when selling shares:

    

    
      	 	
              ·

            	
              ordinary
                brokerage transactions and transactions in which the broker-dealer
                solicits investors;

            

    

    

    
      	 	
              ·

            	
              block
                trades in which the broker-dealer will attempt to sell the shares
                as agent
                but may position and resell a portion of the block as principal to
                facilitate the transaction;

            

    

    

    
      	 	
              ·

            	
              purchases
                by a broker-dealer as principal and resale by the broker-dealer for its
                account;

            

    

    

    
      	 	
              ·

            	
              an
                exchange distribution in accordance with the rules of the applicable
                exchange;

            

    

    

    
      	 	
              ·

            	
              privately
                negotiated transactions;

            

    

    

    
      	 	
              ·

            	
              to
                cover short sales and other hedging transactions made after the date
                that
                the registration statement of which this prospectus is a part is
                declared
                effective by the Securities and Exchange
                Commission;

            

    

    

    
      	 	
              ·

            	
              broker-dealers
                may agree with the selling stockholders to sell a specified number
                of such
                shares at a stipulated price per
                share;

            

    

    

    
      	 	
              ·

            	
              a
                combination of any such methods of sale;
                and

            

    

    

    
      	 	
              ·

            	
              any
                other method permitted pursuant to applicable
                law.

            

    

    

    The
      selling stockholders may also sell shares under Rule 144 under the Securities
      Act, if available, rather than under this prospectus.

    

    Broker-dealers
      engaged by the selling stockholders may arrange for other brokers-dealers to
      participate in sales. Broker-dealers may receive commissions or discounts from
      the selling stockholders (or, if any broker-dealer acts as agent for the
      investor of shares, from the purchaser) in amounts to be negotiated. The selling
      stockholders do not expect these commissions and discounts to exceed what is
      customary in the types of transactions involved.

    

    
      
        
        

      

      
        -1-

        
          

        

      

      
        
        

      

    

    The
      selling stockholders may from time to time pledge or grant a security interest
      in some or all of the Shares owned by them and, if they default in the
      performance of their secured obligations, the pledgees or secured parties may
      offer and sell shares of common stock from time to time under this prospectus,
      or under an amendment to this prospectus under Rule 424(b)(3) or other
      applicable provision of the Securities Act of 1933 amending the list of selling
      stockholders to include the pledgee, transferee or other successors in interest
      as selling stockholders under this prospectus.

     

    Upon
      our
      being notified in writing by a selling stockholder that any material arrangement
      has been entered into with a broker-dealer for the sale of common stock through
      a block trade, special offering, exchange distribution or secondary distribution
      or a purchase by a broker or dealer, a supplement to this prospectus will be
      filed, if required, pursuant to Rule 424(b) under the Securities Act, disclosing
      (i) the name of each such selling stockholder and of the participating
      broker-dealer(s), (ii) the number of shares involved, (iii) the price at which
      such shares of common stock were sold, (iv) the commissions paid or discounts
      or
      concessions allowed to such broker-dealer(s), where applicable, (v) that such
      broker-dealer(s) did not conduct any investigation to verify the information
      set
      out or incorporated by reference in this prospectus, and (vi) other facts
      material to the transaction. In addition, upon our being notified in writing
      by
      a selling stockholder that a donee or pledge intends to sell more than 500
      shares of common stock, a supplement to this prospectus will be filed if then
      required in accordance with applicable securities law.

    

    The
      selling stockholders also may transfer the shares of common stock in other
      circumstances, in which case the transferees, pledgees or other successors
      in
      interest will be the selling beneficial owners for purposes of this
      prospectus.

    

    The
      selling stockholders and any broker-dealers or agents that are involved in
      selling the shares may be deemed to be "underwriters" within the meaning of
      the
      Securities Act in connection with such sales. In such event, any commissions
      received by such broker-dealers or agents and any profit on the resale of the
      shares purchased by them may be deemed to be underwriting commissions or
      discounts under the Securities Act. Discounts, concessions, commissions and
      similar selling expenses, if any, that can be attributed to the sale of
      securities will be paid by the selling stockholders and/or the purchasers of
      the
      securities. 

    

    Each
      selling stockholder that is affiliated with a registered broker-dealer has
      confirmed to us that, at the time it acquired the securities subject to the
      registration statement of which this prospectus is a part; it did not have
      any
      agreement or understanding, directly or indirectly, with any person to
      distribute any of such securities. The Company has advised each selling
      stockholder that it may not use shares registered on the registration statement
      of which this prospectus is a part to cover short sales of our common stock
      made
      prior to the date on which such registration statement was declared effective
      by
      the SEC.

    

    We
      are
      required to pay certain fees and expenses incident to the registration of the
      shares. We have agreed to indemnify the selling stockholders against certain
      losses, claims, damages and liabilities, including liabilities under the
      Securities Act. We agreed to keep this prospectus effective until the earlier
      of
      (i) the date on which the shares may be resold by the selling stockholders
      without registration and without regard to any volume limitations by reason
      of
      Rule 144(e) under the Securities Act or any other rule of similar effect and
      (ii) such time as all of the shares have been publicly sold.

    
 

    
      
        
        

      

      
        -2-

        
          

        

      

      
        
        

      

       

    

    Annex
      B

    

    SMARTVIDEO
      TECHNOLOGIES, INC.

    

    Selling
      Securityholder Questionnaire

    

    The
      undersigned beneficial owner of shares of Common Stock (including shares that
      may be acquired upon exercise of warrants) (the “Registrable
      Securities”)
      of
SmartVideo
      Technologies, Inc.
      (the
“Company”)
      understands that the Company has filed or intends to file with the Securities
      and Exchange Commission
      a
      registration statement (the “Registration
      Statement”)
      for the
      registration and resale under the Securities Act of 1933, as amended (the
“Securities
      Act”),
      of the
      Registrable Securities. This Questionnaire is delivered pursuant to the terms
      of
      the Registration Rights Agreement, dated as of July 7, 2006 (the “Registration
      Rights Agreement”),
      among
      the Company and the Investors named therein. A copy of the Registration Rights
      Agreement is available from the Company upon request at the address set forth
      below. All capitalized terms not otherwise defined herein shall have the
      meanings ascribed thereto in the Registration Rights Agreement.

    

    Certain
      legal consequences arise from being named as a selling securityholder in the
      Registration Statement and the related prospectus. Accordingly, holders and
      beneficial owners of Registrable Securities are advised to consult their own
      securities law counsel regarding the consequences of being named or not being
      named as a selling securityholder in the Registration Statement and the related
      prospectus.

    

    The
      undersigned beneficial owner (the “Selling
      Securityholder”)
      of
      Registrable Securities hereby elects to include the Registrable Securities
      owned
      by it and listed below in Item 3 (unless otherwise specified under such Item
      3)
      in the Registration Statement.

    

    The
      undersigned hereby provides the following information to the Company and
      represents and warrants that such information is accurate:

    

    1. Name.

     

    
      	 	
              (a)

            	
              Full
                Legal Name of Selling
                Securityholder

            

    

     

    
      	
            	
            	
            

    

    

    
      	
            	
              (b)

            	
              Full
                Legal Name of Registered Holder (if not the same as (a) above) through
                which Registrable Securities Listed in Item 3 below are
                held:

            

    

     

    
      
        	
              	
              	
              

      

    

    

     

    
      
        
        

      

      
        -1-

        
          

        

      

      
        
        

      

    

    

    
      	 	
              (c)

            	
              Full
                Legal Name of each Control Person (which means a natural person that
                directly or indirectly has power to vote or dispose of the securities
                covered by this Questionnaire):

            

    

     

    
      
        	
              	
              	
              

    

    

    2.
      Address for Notices to Selling Securityholder:

    
      	
            
	
            
	
            
	
              Telephone:  

            
	
              Fax:  

            
	
              Contact
                Person:  

            

    

    

    3.
      Beneficial Ownership of Registrable Securities:

    

    
      	 	
              (a)

            	
              Type
                and Principal Amount of Registrable Securities beneficially
                owned:

            

    

     

    
       

      
        	
              	
              	
                Common
                  Stock: 

              
	
              	
              	
                Warrants
                  to Purchase Common Stock: 

              
	
              	
              	
              

      

       

    

    

    4.
      Broker-Dealer Status:

    

    
      	 	
              (a)

            	
              Are
                you a broker-dealer?

            

    

    

    Yes
o No
o

    

    
      	 	
              Note:

            	
              If
                yes, the SEC’s staff has indicated that you should be identified as an
                underwriter in the Registration
                Statement.

            

    

    

    
      	 	
              (b)

            	
              Are
                you an affiliate of a
                broker-dealer?

            

    

    

    Yes
o No
o

    

    
      	 	
              (c)

            	
              If
                you are an affiliate of a broker-dealer, do you certify that you
                bought
                the Registrable Securities in the ordinary course of business, and
                at the
                time of the purchase of the Registrable Securities to be resold,
                you had
                no agreements or understandings, directly or indirectly, with any
                person
                to distribute the Registrable
                Securities?

            

    

    

    Yes
o No
o

    

    
      	 	
              Note:

            	
              If
                no, the SEC’s staff has indicated that you should be identified as an
                underwriter in the Registration
                Statement.

            

    

    

    
      
        
        

      

      
        -2-

        
          

        

      

      
        
        

      

       

    

    5.
      Beneficial Ownership of Other Securities of the Company Owned by the Selling
      Securityholder.

    

    Except
      as set forth below in this Item 5, the undersigned is not the beneficial or
      registered owner of any securities of the Company other than the Registrable
      Securities listed above in Item 3.

    

    
      	 	
              (a)

            	
              Type
                and Amount of Other Securities beneficially owned by the Selling
                Securityholder:

            

    

     

    
      
        
          	
                	 	
                

        

         

        
          
            
              	
                    	 	
                    

            

          

        

      

    

     

     

    6.
      Relationships with the Company:

    

    Except
      as set forth below, neither the undersigned nor any of its affiliates, officers,
      directors or principal equity holders (owners of 5% of more of the equity
      securities of the undersigned) has held any position or office or has had any
      other material relationship with the Company (or its predecessors or affiliates)
      during the past three years.

    

    State
      any
      exceptions here:

     

    
      
        
          
            	
                  	
                  

          

           

          
            
              
                	
                      	
                      

              

            

          

        

      

       

    

    

    7. Claims
      against the Company:

    

    Except
      as set forth below, to the actual knowledge of the officers and directors or
      persons performing similar functions for the undersigned, neither the
      undersigned nor any of its Affiliates, officers, directors or principal equity
      holders (owners of 5% or more of the equity securities of the undersigned)
      has
      any claims against the Company, its directors, officers, agents and employees,
      and each Person who controls the Company (within the meaning of Section 15
      of
      the Securities Act and Section 20 of the Exchange Act) relating to the Company’s
      sale of Registrable Securities to the undersigned.

    

    State
      any
      exceptions here:

    
      
        
          
            	 	 	 
	
                  	 

          

          
            
              
                	
                      	 
	
                      	
                      

              

            

          

        

      

       

    

    
      
        
        

      

      
        -3-

        
          

        

      

      
        
        

      

    

    

    The
      undersigned agrees to promptly notify the Company of any inaccuracies or changes
      in the information provided herein (other than changes in beneficial ownership
      of Common Stock after the effectiveness of the Registration Statement) that
      may
      occur subsequent to the date hereof at any time prior to the effectiveness
      of
      the Registration Statement or while the Registration Statement remains
      effective.

    

    By
      signing below, the undersigned consents to the disclosure of the information
      contained herein in its answers hereto and the inclusion of such information
      in
      the Registration Statement and the related prospectus and any amendments or
      supplements thereto. The undersigned understands that such information will
      be
      relied upon by the Company in connection with the preparation or amendment
      of
      the Registration Statement and the related prospectus.

    

    IN
      WITNESS WHEREOF the undersigned, by authority duly given, has caused this
      Questionnaire to be executed and delivered either in person or by its duly
      authorized agent.

    

     

    
      

      
        	Dated: 	Beneficial Owner:                                                  
                
	 	 
	 	By:               
	 	
                Name:

              
	 	
                Title:

              

      

    

     

     

     

    

    

    PLEASE
      FAX A COPY OF THE COMPLETED AND EXECUTED QUESTIONNAIRE, AND RETURN THE ORIGINAL
      BY OVERNIGHT MAIL, TO:  

    

    Ronald
      A. Warren

    SmartVideo
      Technologies, Inc.

    3505
      Koger Boulevard

    Suite
      400

    Duluth,
      GA 30096

    Fax
      No. (770) 279-3143

    

    

    

    
      
        
        

      

      
        -4-EXHIBIT
      10.1

    
 

    SECURITIES
      PURCHASE AGREEMENT

    

    THIS
      SECURITIES PURCHASE AGREEMENT (this "Agreement")
      is
      made and entered into as of July 7, 2006, among SmartVideo Technologies, Inc.,
      a
      Delaware corporation, with headquarters located at 3505 Koger Boulevard, Suite
      400, Duluth, Georgia 30096 (the "Company"),
      and
      the investors listed on the Schedule of Buyers attached hereto (individually,
      a
      "Buyer"
      and
      collectively, the "Buyers").

    

    RECITALS

    

    A. The
      Company and each Buyer is executing and delivering this Agreement in reliance
      upon the exemption from securities registration afforded by Section 4(2) of
      the
      Securities Act of 1933, as amended (the "1933
      Act"),
      and
      Rule 506 of Regulation D ("Regulation
      D")
      as
      promulgated by the United States Securities and Exchange Commission (the
      "SEC")
      under
      the 1933 Act.

    

    B. Each
      Buyer wishes to purchase, and the Company wishes to sell, upon the terms and
      conditions stated in this Agreement, (i) shares of the common stock, par value
      $0.001 per share (the "Common
      Stock"),
      of the
      Company at a price of $1.25 per share, in the amount set forth opposite such
      Buyer's name on the Schedule of Buyers (which aggregate amount for all Buyers
      shall collectively be referred to herein as the "Common
      Shares"),
      (ii) a
      warrant to acquire shares of Common Stock at a price of $2.50 per share (the
      "$2.50
      Warrants"),
      in
      substantially the form attached hereto as Exhibit
      A-l
      (as
      exercised, collectively, the "$2.50
      Warrant Shares").

    

    C. Contemporaneously
      with the execution and delivery of this Agreement, the parties hereto are
      executing and delivering a Registration Rights Agreement, substantially in
      the
      form attached hereto as Exhibit
      B
      (the
      "Registration
      Rights Agreement")
      pursuant to which the Company has agreed to provide certain registration rights
      under the 1933 Act and the rules and regulations promulgated thereunder, and
      applicable state securities laws.

    

    D. The
      Common Shares, the Warrants and the Warrant Shares are sometimes hereinafter
      collectively referred to as the "Securities."

    

    NOW,
      THEREFORE, the Company and each Buyer hereby agree as follows:

    

    1.
      PURCHASE
      AND SALE OF COMMON SHARES AND WARRANTS.

    

    (a)
      Purchase
      of Common Shares and Warrants.
      Subject
      to the satisfaction (or waiver) of the conditions set forth in Sections 6 and
      7
      herein:

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

    

    (i)
      The
      Company shall issue and sell to each Buyer, and each Buyer severally, but not
      jointly, agrees to purchase from the Company on the date hereof (the
"Closing
      Date"),
      the
      number of Common Shares as is set forth opposite such Buyer's name in column
      (3)
      on the Schedule of Buyers, along with the Warrants to acquire up to that number
      of $2.50 Warrant Shares as is set forth opposite such Buyer's name in column
      (4)
      on the Schedule of Buyers opposite such Buyer's name in column (5) on the
      Schedule of Buyers (the "Closing").
      The
      purchase price for the Common Shares and related Warrants to be purchased by
      each Buyer at the Closing shall be the amount set forth opposite such Buyer's
      name in column (6) of the Schedule of Buyers (the "Closing
      Purchase Price").
      The
      Closing shall occur on the Closing Date at the offices of the
      Company.

    

    (b)
      Form
      of Payment; Delivery of Certificates.
      On the
      Closing Date, (i) each Buyer shall pay the Purchase Price to the Company for
      the
      Securities to be issued and sold to such Buyer at such Closing, by wire transfer
      of immediately available funds in accordance with the Company's written wire
      instructions, and (ii) the Company shall deliver within ten (10) Business Days
      to each Buyer (A) one or more stock certificates evidencing the number of Common
      Shares such Buyer is purchasing, and (B) one or more Warrants pursuant to which
      such Buyer shall have the right to acquire $2.50 Warrant Shares, in all cases
      duly executed on behalf of the Company and registered in the name of such
      Buyer.

    

    2.
      BUYER'S
      REPRESENTATIONS AND WARRANTIES.

    

    As
      of the
      date hereof, each Buyer represents and warrants to the Company with respect
      to
      only itself that:

    

    (a)
      No
      Public Sale or Distribution.
      Such
      Buyer is (i) acquiring the Common Shares and the Warrants and (ii) upon exercise
      of the Warrants will acquire the Warrant Shares issuable upon exercise thereof,
      in the ordinary course of business for its own account and not with a view
      towards, or for resale in connection with, the public sale or distribution
      thereof, except pursuant to sales registered or exempted under the 1933 Act
      and
      such Buyer does not have a present arrangement to effect any distribution of
      the
      Securities to or through any person or entity; provided,
      however,
      that by
      making the representations herein, such Buyer does not agree to hold any of
      the
      Securities for any minimum or other specific term and reserves the right to
      dispose of the Securities at any time in accordance with or pursuant to a
      registration statement or an exemption under the 1933 Act. Such Buyer is
      acquiring the Securities hereunder in the ordinary course of its business.
      Such
      Buyer does not presently have any agreement or understanding, directly or
      indirectly, with any Person to distribute any of the Securities.

    

    (b)
      Investor
      Status.
      At the
      time such Buyer was offered the Securities, such Buyer was, and at the Closing,
      and on each date on which such Buyer exercises the Warrants such Buyer will
      be a
      sophisticated investor as described in Rule 506(b)(2)(ii) of Regulation D and
      an
      "accredited investor" as defined in Rule 501(a) of Regulation D.

    

    
      
        
        

      

      
        -2-

        
          

        

      

      
        
        

      

       

    

    (c)
      Reliance
      on Exemptions. Such
      Buyer understands that the Securities are being offered and sold to it in
      reliance on specific exemptions from the registration requirements of United
      States federal and state securities laws and that the Company is relying in
      part
      upon the truth and accuracy of, and such Buyer's compliance with, the
      representations, warranties, agreements, acknowledgments and understandings
      of
      such Buyer set forth herein in order to determine the availability of such
      exemptions and the eligibility of such Buyer to acquire the
      Securities.

    

    (d)
      Information.
      Such
      Buyer and its advisors, if any, have been furnished with all materials relating
      to the business, finances and operations of the Company and materials relating
      to the offer and sale of the Securities, which have been requested by such
      Buyer. Such Buyer and its advisors, if any, have been afforded the opportunity
      to ask questions of the Company. Neither such inquiries nor any other due
      diligence investigations conducted by such Buyer or its advisors, if any, or
      its
      representatives shall modify, amend or affect such Buyer's right to rely on
      the
      Company's representations and warranties contained herein. Such Buyer
      understands that its investment in the Securities involves a high degree of
      risk
      and is able to afford a complete loss of such investment. Such Buyer has sought
      such accounting, legal and tax advice as it has considered necessary to make
      an
      informed investment decision with respect to its acquisition of the
      Securities.

    

    (e)
      No
      Governmental Review.
      Such
      Buyer understands that no United States federal or state agency or any other
      government or governmental agency has passed on or made any recommendation
      or
      endorsement of the Securities or the fairness or suitability of the investment
      in the Securities nor have such authorities passed upon or endorsed the merits
      of the offering of the Securities.

    

    
      
        
        

      

      
        -3-

        
          

        

      

      
        
        

      

       

    

    (f)
      Transfer
      or Resale.
      Such
      Buyer understands that except as provided in the Registration Rights Agreement:
      (i) the Securities have not been and are not being registered under the 1933
      Act
      or any state securities laws, and may not be offered for sale, sold, assigned
      or
      transferred unless (A) subsequently registered thereunder, (B) such Buyer shall
      have delivered to the Company an opinion of counsel, in a form reasonably
      acceptable to the Company, to the effect that such Securities to be sold,
      assigned or transferred may be sold, assigned or transferred pursuant to an
      exemption from such registration, or (C) such Buyer provides the Company with
      reasonable assurance that such Securities can be sold, assigned or transferred
      pursuant to Rule 144 or Rule 144A promulgated under the 1933 Act, as amended,
      (or a successor rule thereto) (collectively, "Rule
      144");
      (ii)
      any sale of the Securities made in reliance on Rule 144 may be made only in
      accordance with the terms of Rule 144 and further, if Rule 144 is not
      applicable, any resale of the Securities under circumstances in which the seller
      (or the Person (as defined in Section 3(r)) through whom the sale is made)
      may
      be deemed to be an underwriter (as that term is defined in the 1933 Act) may
      require compliance with some other exemption under the 1933 Act or the rules
      and
      regulations of the SEC thereunder; and (iii) neither the Company nor any other
      Person is under any obligation to register the Securities under the 1933 Act
      or
      any state securities laws or to comply with the terms and conditions of any
      exemption thereunder. Notwithstanding the foregoing, the Securities may be
      pledged in connection with a bona fide margin account or other loan secured
      by
      the Securities and such pledge of Securities shall not be deemed to be a
      transfer, sale or assignment of the Securities hereunder, and no Buyer effecting
      a pledge of Securities shall be required to provide the Company with any notice
      thereof or otherwise make any delivery to the Company pursuant to this Agreement
      or any other Transaction Document, including, without limitation, this Section
      2(f); provided,
      that in
      order to make any sale, transfer or assignment of Securities, such Buyer and
      its
      pledgee makes such disposition in accordance with or pursuant to a registration
      statement or an exemption under the 1933 Act.

     

    (g)
      Legends.
      Such
      Buyer understands that the certificates or other instruments representing the
      Common Shares, the Warrants and the stock certificates representing the Warrant
      Shares and the Common Shares, except as set forth below, shall bear any legend
      as required by the "blue sky" laws of any state and a restrictive legend in
      substantially the following form (and a stop-transfer order may be placed
      against transfer of such stock certificates):

    

    [NEITHER
      THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR
      THE
      SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE HAVE BEEN][THE SECURITIES
      REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN] REGISTERED UNDER THE SECURITIES
      ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES
      MAY
      NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF
      (A)
      AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES
      ACT
      OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL, IN A FORM REASONABLY
      ACCEPTABLE TO THE COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT
      OR
      (II) UNLESS SOLD PURSUANT TO RULE 144 UNDER SAID ACT. NOTWITHSTANDING THE
      FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN
      ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE
      SECURITIES.

    

    
      
        
        

      

      
        -4-

        
          

        

      

      
        
        

      

    

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

    

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

    

    (j)
      Residency.
      Such
      Buyer is a resident of that jurisdiction specified below its address on the
      Schedule of Buyers.

    

    (k)
      Broker-Dealer
      Status.
      Such
      Buyer is a not a registered broker-dealer or, if such Buyer is an affiliate
      of a
      broker-dealer, such Buyer is acquiring the Securities hereunder in the ordinary
      course of its business and such Buyer does not presently have any agreement
      or
      understanding, directly or indirectly, with any Person to distribute any of
      the
      Securities.

    

    3.
      REPRESENTATIONS
      AND WARRANTIES OF THE COMPANY.

    

    As
      of the
      date hereof, the Company represents and warrants to each of the Buyers
      that:

    

    (a)
      Organization
      and Qualification.
      Each of
      the Company and its "Subsidiaries"
      (which
      for purposes of this Agreement means any entity in which the Company, directly
      or indirectly, owns capital stock or holds an equity or similar interest) are
      corporations duly organized and validly existing in good standing under the
      laws
      of the jurisdiction in which they are incorporated, and have the requisite
      corporate power and authorization to own their properties and to carry on their
      business as now being conducted. Each of the Company and its Subsidiaries is
      duly qualified as a foreign corporation to do business and is in good standing
      in every jurisdiction in which its ownership of property or the nature of the
      business conducted by it makes such qualification necessary, except to the
      extent that the failure to be so qualified or be in good standing would not
      have
      a Material Adverse Effect. As used in this Agreement, "Material
      Adverse Effect"
      means
      any material adverse effect on the business, properties, assets, operations,
      results of operations, condition (financial or otherwise) or prospects of the
      Company and its Subsidiaries, taken as a whole, or on the transactions
      contemplated hereby and the other Transaction Documents or by the agreements
      and
      instruments to be entered into in connection herewith or therewith, or on the
      authority or ability of the Company to perform its obligations under the
      Transaction Documents (as defined below). The Company has no Subsidiaries except
      as set forth on Schedule
      3(a).

    

    
      
        
        

      

      
        -5-

        
          

        

      

      
        
        

      

    

    (b)
      Authorization;
      Enforcement; Validity.
      The
      Company has the requisite corporate power and authority to enter into and
      perform its obligations under this Agreement, the Registration Rights Agreement,
      the Irrevocable Transfer Agent Instructions (as defined in Section 5), the
      Warrants and each of the other agreements entered into by the parties hereto
      in
      connection with the transactions contemplated by this Agreement (collectively,
      the "Transaction
      Documents")
      and to
      issue the Securities in accordance with the terms hereof and thereof. The
      execution and delivery of the Transaction Documents by the Company and the
      consummation by the Company of the transactions contemplated hereby and thereby,
      including, without limitation, the issuance of the Common Shares and the
      Warrants and the reservation for issuance and the issuance of the Warrant Shares
      issuable upon exercise of the Warrants have been duly authorized by the
      Company's Board of Directors and no further consent or authorization is required
      by the Company, its Board of Directors or its stockholders. This Agreement
      and
      the other Transaction Documents have been duly executed and delivered by the
      Company, and constitute the legal, valid and binding obligations of the Company,
      enforceable against the Company in accordance with their respective terms,
      except as such enforceability may be limited by general principles of equity
      or
      applicable bankruptcy, insolvency, reorganization, moratorium, liquidation
      or
      similar laws relating to, or affecting generally, the enforcement of applicable
      creditors' rights and remedies.

    

    (c)
      Issuance
      of Securities.
      The
      Common Shares and the Warrants are duly authorized and, upon issuance in
      accordance with the terms hereof, shall be validly issued and free from all
      taxes, liens and charges with respect to the issue thereof and the Common Shares
      shall be fully paid and non-assessable with the holders being entitled to all
      rights accorded to a holder of Common Shares. The Company shall, so long as
      any
      of the Warrants are outstanding, take all action necessary to reserve and keep
      available out of its authorized and unissued capital stock, solely for the
      purpose of effecting the exercise of the Warrants, 100% of the number of shares
      of Common Stock issuable upon the exercise of the Warrants. Upon exercise in
      accordance with the Warrants, the Warrant Shares will be validly issued, fully
      paid and nonassessable and free from all taxes, liens and charges with respect
      to the issue thereof, with the holders being entitled to all rights accorded
      to
      a holder of Preferred Stock. The issuance by the Company of the Securities
      is
      exempt from registration under the 1933 Act.

    

    
      
        
        

      

      
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    (d)
      No
      Conflicts.
      The
      execution, delivery and performance of the Transaction Documents by the Company
      and the consummation by the Company of the transactions contemplated hereby
      and
      thereby (including, without limitation, the issuance of the Warrants and
      reservation for issuance and issuance of the Warrant Shares) will not (i) result
      in a violation of the Certificate of Incorporation (as defined below) or Bylaws
      (as defined below) of the Company or any of its Subsidiaries or (ii) conflict
      with, or constitute a default (or an event which with notice or lapse of time
      or
      both would become a default) under, or give to others any rights of termination,
      amendment, acceleration or cancellation of, any material agreement, indenture
      or
      instrument to which the Company or any of its Subsidiaries is a party, or (iii)
      result in a violation of any law, rule, regulation, order, judgment or decree
      (including federal and state securities laws and regulations and the rules
      and
      regulations of the over-the-counter market (the "Principal
      Market"))
      or
      other principal market applicable to the Company or any of its Subsidiaries
      or
      by which any property or asset of the Company or any of its Subsidiaries is
      bound or affected.

    

    (e)
      Consents.
      The
      Company is not required to obtain any consent, authorization or order of, or
      make any filing or registration with, any court, governmental agency or any
      regulatory or self-regulatory agency or any other Person in order for it to
      execute, deliver or perform any of its obligations under or contemplated by
      the
      Transaction Documents, in each case in accordance with the terms hereof or
      thereof. All consents, authorizations, orders, filings and registrations which
      the Company is required to obtain pursuant to the preceding sentence have been
      obtained or effected on or prior to the Closing Date. The Company and its
      Subsidiaries are unaware of any facts or circumstances that might prevent the
      Company from obtaining or effecting any of the registration, application or
      filings pursuant to the preceding sentence. The Company is not in violation
      of
      the listing requirements of the Principal Market and has no knowledge of any
      facts that would reasonably lead to delisting or suspension of the Common Stock
      in the foreseeable future.

    

    (f)
      No
      General Solicitation; Placement Agent's Fees.
      Neither
      the Company, nor any of its affiliates, nor any Person acting on its or their
      behalf, has engaged in any form of general solicitation or general advertising
      (within the meaning of Regulation D) in connection with the offer or sale of
      the
      Securities. The Company shall be responsible for the payment of any placement
      agent's fees, financial advisory fees, or brokers' commissions (other than
      for
      persons engaged by any Buyer or its investment advisor) relating to or arising
      out of the transactions contemplated hereby. The Company shall pay, and hold
      each Buyer harmless against, any liability, loss or expense (including, without
      limitation, attorney's fees and out-of-pocket expenses) arising in connection
      with any such claim. The Company has not engaged any placement agent or other
      agent in connection with the sale of the Securities.

    

    
      
        
        

      

      
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    (g)
      No
      Integrated Offering.
      None of
      the Company, its Subsidiaries, any of their affiliates, and any Person acting
      on
      their behalf has, directly or indirectly, made any offers or sales of any
      security or solicited any offers to buy any security, under circumstances that
      would require registration of any of the Securities under the 1933 Act or cause
      this offering of the Securities to be integrated with prior offerings by the
      Company for purposes of the 1933 Act or any applicable stockholder approval
      provisions, including, without limitation, under the rules and regulations
      of
      any exchange or automated quotation system on which any of the securities of
      the
      Company are listed or designated. None of the Company, its Subsidiaries, their
      affiliates and any Person acting on their behalf will take any action or steps
      referred to in the preceding sentence that would require registration of any
      of
      the Securities under the 1933 Act or cause the offering of the Securities to
      be
      integrated with other offerings.

    

    (h)
      Application
      of Takeover Protections: Rights Agreement.
      The
      Company and its board of directors have taken all necessary action, if any,
      in
      order to render inapplicable any control share acquisition, business
      combination, poison pill (including any distribution under a rights agreement)
      or other similar anti-takeover provision under the Certificate of Incorporation
      or the laws of the State of Delaware, including Section 203 of the Delaware
      General Corporation Law, which is or could become applicable to any Buyer as
      a
      result of the transactions contemplated by this Agreement, including, without
      limitation, the Company's issuance of the Securities and any Buyer's ownership
      of the Securities.

    

    (i)
      SEC
      Documents; Financial Statements.
      Except
      as set forth in Schedule
      3(i), during
      the two years prior to the date hereof, the Company has timely filed all
      reports, schedules, forms, statements and other documents required to be filed
      by it with the SEC pursuant to the reporting requirements of the 1934 Act (all
      of the foregoing filed prior to the date hereof or prior to the date of the
      Closing, and all exhibits included therein and financial statements and
      schedules thereto and documents incorporated by reference therein being
      hereinafter referred to as the "SEC
      Documents").
      The
      Company has delivered to the Buyers or their respective representatives true,
      correct and complete copies of the SEC Documents not available on the EDGAR
      system. As of their respective dates, the SEC Documents complied in all material
      respects with the requirements of the 1934 Act and the rules and regulations
      of
      the SEC promulgated thereunder applicable to the SEC Documents, and none of
      the
      SEC Documents, at the time they were filed with the SEC filing (or if amended
      or
      superseded by a filing prior to the date of this Agreement, then on the date
      of
      such filing, 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. As of their respective dates, the financial
      statements of the Company included in the SEC Documents complied as to form
      in
      all material respects with applicable accounting requirements and the published
      rules and regulations of the SEC with respect thereto. Such financial statements
      have been prepared in accordance with generally accepted accounting principles,
      consistently applied, during the periods involved (except (i) as may be
      otherwise indicated in such financial statements or the notes thereto, or (ii)
      in the case of unaudited interim statements, to the extent they may exclude
      footnotes or may be condensed or summary statements) and fairly present in
      all
      material respects the financial position of the Company as of the dates thereof
      and the results of its operations and cash flows for the periods then ended
      (subject, in the case of unaudited statements, to normal year-end audit
      adjustments). No other information provided by or on behalf of the Company
      to
      the Buyers which is not included in the SEC Documents, including, without
      limitation, information referred to in Section 2(d) of this Agreement, contains
      any untrue statement of a material fact or omits to state any material fact
      necessary in order to make the statements therein, in the light of the
      circumstance under which they are or were made, not misleading.

    

    
      
        
        

      

      
        -8-

        
          

        

      

      
        
        

      

    

    (j)
      Absence
      of Certain Changes.
      Since
      December 31, 2005, there has been no material adverse change and no material
      adverse development in the business, properties, operations, condition
      (financial or otherwise), results of operations or prospects of the Company
      or
      its Subsidiaries. Since December 31, 2005, the Company has not (i) declared
      or
      paid any dividends, (ii) sold any assets, individually or in the aggregate,
      in
      excess of $500,000 outside of the ordinary course of business or (iii) had
      capital expenditures, individually or in the aggregate, in excess of $1,000,000.
      The Company has not taken any steps to seek protection pursuant to any
      bankruptcy law nor does the Company have any knowledge or reason to believe
      that
      its creditors intend to initiate involuntary bankruptcy proceedings or any
      actual knowledge of any fact which would reasonably lead a creditor to do so.
      The Company is not as of the date hereof, and after giving effect to the
      transactions contemplated hereby to occur at the Closing, will not be Insolvent
      (as defined below). For purposes of this Section 3(j), "Insolvent"
      means
      (i) the present fair saleable value of the Company's assets is less than the
      amount required to pay the Company's total Indebtedness (as defined in Section
      3(q)), (ii) the Company is unable to pay its debts and liabilities,
      subordinated, contingent or otherwise, as such debts and liabilities become
      absolute and matured, (iii) the Company intends to incur or believes that it
      will incur debts that would be beyond its ability to pay as such debts mature
      or
      (iv) the Company has unreasonably small capital with which to conduct the
      business in which it is engaged as such business is now conducted and is
      proposed to be conducted.

    

    (k)
      No
      Undisclosed Events, Liabilities, Developments or Circumstances.
      No
      event, liability, development or circumstance has occurred or exists, or is
      contemplated to occur, with respect to the Company or its Subsidiaries or their
      respective business, properties, prospects, operations or financial condition,
      that would be required to be disclosed by the Company under applicable
      securities laws on a registration statement on Form S-1 or SB-2 filed with
      the
      SEC relating to an issuance and sale by the Company of its Common Shares and
      which has not been publicly disclosed.

    

    
      
        
        

      

      
        -9-

        
          

        

      

      
        
        

      

       

    

    (l)
      Conduct
      of Business; Regulatory Permits.
      Neither
      the Company nor its Subsidiaries is in violation of any term of or in default
      under the Certificate of Incorporation or Bylaws or their organizational charter
      or bylaws, respectively. Neither the Company nor any Subsidiary is in violation
      of any judgment, decree or order or any statute, ordinance, rule or regulation
      applicable to the Company or its Subsidiaries, and neither the Company nor
      any
      of its Subsidiaries will conduct its business in violation of any of the
      foregoing, except for possible violations which would not, individually or
      in
      the aggregate, have a Material Adverse Effect. Without limiting the generality
      of the foregoing, the Company is not in violation of any of the rules,
      regulations or requirements of the Principal Market and has no knowledge of
      any
      facts or circumstances that would reasonably lead to delisting or suspension
      of
      the Common Stock by the Principal Market in the foreseeable future. Since
      December 31, 2005, (i) the Common Stock has been designated for quotation or
      listed on the Principal Market, (ii) trading in the Common Stock has not been
      suspended by the SEC or the Principal Market, and (iii) the Company has received
      no communication, written or oral, from the SEC or the Principal Market
      regarding the suspension or delisting of the Common Stock from the Principal
      Market, or any requests for information in connection with any informal inquiry
      or formal investigation or proceedings regarding the Company or its officers
      and
      directors and (iv) except as set forth in Schedule 3(j), the Company has not
      received any comment letters from the staff of the SEC concerning any filings
      made by the Company which have not been resolved to the satisfaction of the
      SEC
      staff. The Company and its Subsidiaries possess all certificates, authorizations
      and permits issued by the appropriate federal, state or foreign regulatory
      authorities necessary to conduct their respective businesses, except where
      the
      failure to possess such certificates, authorizations or permits would not have,
      individually or in the aggregate, a Material Adverse Effect, and neither the
      Company nor any such Subsidiary has received any notice of proceedings relating
      to the revocation or modification of any such certificate, authorization or
      permit.

    

    (m)
      Foreign
      Corrupt Practices.
      Neither
      the Company, nor any of its Subsidiaries, nor any director, officer, agent,
      employee or other Person acting on behalf of the Company or any of its
      Subsidiaries has, in the course of its actions for, or on behalf of, the Company
      (i) used any corporate funds for any unlawful contribution, gift, entertainment
      or other unlawful expenses relating to political activity; (ii) made any direct
      or indirect unlawful payment to any foreign or domestic government official
      or
      employee from corporate funds; (iii) violated or is in violation of any
      provision of the U.S. Foreign Corrupt Practices Act of 1977, as amended; or
      (iv)
      made any unlawful bribe, rebate, payoff, influence payment, kickback or other
      unlawful payment to any foreign or domestic government official or
      employee.

    

    
      
        
        

      

      
        -10-

        
          

        

      

      
        
        

      

       

    

    (n)
      Sarbanes-Oxley
      Act.
      The
      Company is in compliance with any and all applicable requirements of the
      Sarbanes-Oxley Act of 2002 that are effective as of the date hereof, and any
      and
      all applicable rules and regulations promulgated by the SEC thereunder that
      are
      effective as of the date hereof, except where such noncompliance would not
      have,
      individually or in the aggregate, a Material Adverse Effect.

    

    (o)
      Transactions
      With Affiliates.
      Except
      as set forth in the Company's Annual Report on Form 10-K for the year ended
      December 31, 2005, the Company's Post-Effective Amendment to its Registration
      Statement on Form S-1 filed with the SEC on April 19, 2006, the Company's Form
      8-K filed with the SEC on April 20, 2006, and the Company's Quarterly Report
      on
      Form 10-Q filed with the SEC on May 12, 2005, and the Company's Form 8-K filed
      with the SEC on June 13, 2006, none of the officers, directors or employees
      of
      the Company is presently a party to any transaction with the Company or any
      of
      its Subsidiaries (other than for ordinary course services as employees, officers
      or directors or as an investor in this transaction), 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 such officer, director or employee or, to
      the
      knowledge of the Company, any corporation, partnership, trust or other entity
      in
      which any such officer, director, or employee has a substantial interest or
      is
      an officer, director, trustee or partner.

    

    
      
        
        

      

      
        -11-

        
          

        

      

      
        
        

      

    

    (p)
      Equity
      Capitalization.
      As of
      June 28, 2006, the authorized capital stock of the Company consists of (x)
      150,000,000 shares of Common Stock, of which as of the date hereof, 39,670,618
      shares are issued and outstanding and 35,460,487 shares are reserved for
      issuance pursuant to the Company's employee incentive plan and other warrants,
      exercisable or exchangeable for, or convertible into, shares of Common Stock,
      and (y) 50,000,000 shares of Series A-1 Convertible Preferred Stock, of which
      as
      of the date hereof, 3,369,998 shares are issued and outstanding. All of such
      outstanding shares have been, or upon issuance will be, validly issued and
      are
      fully paid and nonassessable. Except as set forth on Schedule
      3(p):
      (i) no
      shares of the Company's capital stock are subject to preemptive rights or any
      other similar rights or any liens or encumbrances suffered or permitted by
      the
      Company; (ii) there are no outstanding options, warrants, scrip, rights to
      subscribe to, calls or commitments of any character whatsoever relating to,
      or
      securities or rights convertible into, or exercisable or exchangeable for,
      any
      shares of capital stock of the Company or any of its Subsidiaries, or contracts,
      commitments, understandings or arrangements by which the Company or any of
      its
      Subsidiaries is or may become bound to issue additional shares of capital stock
      of the Company or any of its Subsidiaries or options, warrants, scrip, rights
      to
      subscribe to, calls or commitments of any character whatsoever relating to,
      or
      securities or rights convertible into, or exercisable or exchangeable for,
      any
      shares of capital stock of the Company or any of its Subsidiaries; (iii) there
      are no outstanding debt securities, notes, credit agreements, credit facilities
      or other agreements, documents or instruments evidencing Indebtedness (as
      defined in Section 3(q)) of the Company or any of its Subsidiaries or by which
      the Company or any of its Subsidiaries is or may become bound; (iv) there are
      no
      financing statements securing obligations in any material amounts, either singly
      or in the aggregate, filed in connection with the Company; (v) there are no
      agreements or arrangements under which the Company or any of its Subsidiaries
      is
      obligated to register the sale of any of their securities under the 1933 Act
      (except the Registration Rights Agreement); (vi) there are no outstanding
      securities or instruments of the Company or any of its Subsidiaries which
      contain any redemption or similar provisions,
      and there are no contracts, commitments, understandings or arrangements by
      which
      the Company or any of its Subsidiaries is or may become bound to redeem a
      security of the Company or any of its Subsidiaries; (vii) there are no
      securities or instruments containing anti-dilution or similar provisions that
      will be triggered by the issuance of the Securities; (viii) the Company does
      not
      have any stock appreciation rights or "phantom stock" plans or agreements or
      any
      similar plan or agreement; and (ix) the Company and its Subsidiaries have no
      liabilities or obligations required to be disclosed in the SEC Documents (as
      defined herein) but not so disclosed in the SEC Documents, other than those
      incurred in the ordinary course of the Company's or any Subsidiary's respective
      businesses and which, individually or in the aggregate, do not or would not
      have
      a Material Adverse Effect. The Company has furnished or made available to the
      Buyer true, correct and complete copies of the Company's certificate of
      incorporation, as amended and as in effect on the date hereof (the "Certificate
      of Incorporation"),
      and
      the Company's bylaws, as amended and as in effect on the date hereof (the
"Bylaws"),
      and
      the terms of all securities convertible into, or exercisable or exchangeable
      for, Common Stock and the material rights of the holders thereof in respect
      thereto.

    

    
      
        
        

      

      
        -12-

        
          

        

      

      
        
        

      

    

    (q)
      Indebtedness
      and Other Contracts.
      Neither
      the Company nor any of its Subsidiaries (i) has any outstanding Indebtedness
      (as
      defined below), (ii) is a party to any contract, agreement or instrument, the
      violation of which, or default under which, by the other party(ies) to such
      contract, agreement or instrument would result in a Material Adverse Effect,
      (iii) is in violation of any term of or in default under any contract, agreement
      or instrument relating to any Indebtedness, except where such violations and
      defaults would not result, individually or in the aggregate, in a Material
      Adverse Effect, or (iv) is a party to any contract, agreement or instrument
      relating to any Indebtedness, the performance of which, in the judgment of
      the
      Company's officers, has or is expected to have a Material Adverse Effect. No
      outstanding Indebtedness is secured. For purposes of this Agreement: (x)
"Indebtedness"
      of any
      Person means, without duplication (A) all indebtedness for borrowed money,
      (B)
      all obligations issued, undertaken or assumed as the deferred purchase price
      of
      property or services (other than trade payables and broadcast rights payables
      entered into in the ordinary course of business), (C) all reimbursement or
      payment obligations with respect to letters of credit, surety bonds and other
      similar instruments, (D) all obligations evidenced by notes, bonds, debentures
      or similar instruments, including obligations so evidenced incurred in
      connection with the acquisition of property, assets or businesses, (E) all
      indebtedness created or arising under any conditional sale or other title
      retention agreement, or incurred as financing, in either case with respect
      to
      any property or assets acquired with the proceeds of such indebtedness (even
      though the rights and remedies of the seller or bank under such agreement in
      the
      event of default are limited to repossession or sale of such property), (F)
      all
      monetary obligations under any leasing or similar arrangement which, in
      connection with generally accepted accounting principles, consistently applied
      for the periods covered thereby, is classified as a capital lease, (G) all
      indebtedness referred to in clauses (A) through (F) above secured by (or for
      which the holder of such Indebtedness has an existing right, contingent or
      otherwise, to be secured by) any mortgage, lien, pledge, charge, security
      interest or other encumbrance upon or in any property or assets (including
      accounts and contract rights) owned by any Person, even though the Person which
      owns such assets or property has not assumed or become liable for the payment
      of
      such indebtedness, and (H) all Contingent Obligations in respect of indebtedness
      or obligations of others of the kinds referred to in clauses (A) through (G)
      above; (y) "Contingent
      Obligation"
      means,
      as to any Person, any direct or indirect liability, contingent or otherwise,
      of
      that Person with respect to any indebtedness, lease, dividend or other
      obligation of another Person if the primary purpose or intent of the Person
      incurring such liability, or the primary effect thereof, is to provide assurance
      to the obligee of such liability that such liability will be paid or discharged,
      or that any agreements relating thereto will be complied with, or that the
      holders of such liability will be protected (in whole or in part) against loss
      with respect thereto; and (z) "Person"
      means an
      individual, a limited liability company, a partnership, a joint venture, a
      corporation, a trust, an unincorporated organization and a government or any
      department or agency thereof.

    

    (r)
      Absence
      of Litigation.
      Except
      as set forth in the SEC Documents, there is no action, suit, proceeding, inquiry
      or investigation before or by the Principal Market, 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, the
      Securities or any of its Subsidiaries or any of the Company's or the Company's
      Subsidiary's officers or directors, whether of a civil or criminal nature or
      otherwise.

    

    
      
        
        

      

      
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    (s)
      Insurance.
      The
      Company and each of its Subsidiaries are insured by insurers of recognized
      financial responsibility against such losses and risks and in such amounts
      as
      management of the Company believes to be prudent and customary in the businesses
      in which the Company and its Subsidiaries are engaged, including directors'
      and
      officers' liability insurance with a policy limit of at least $5,000,000.
      Neither the Company nor any Subsidiary has been refused any insurance coverage
      sought or applied for and neither the Company nor any Subsidiary has any reason
      to believe that it will not be able to renew its existing insurance coverage
      as
      and when such coverage expires or to obtain similar coverage from similar
      insurers as may be necessary to continue its business at a cost that would
      not
      have a Material Adverse Effect.

    

    (t)
      Employee
      Relations,
      (i)
      Neither the Company nor any of its Subsidiaries is a party to any collective
      bargaining agreement or employs any member of a union. The Company and its
      Subsidiaries believe that their relations with their employees are good. No
      executive officer of the Company (as defined in Rule 501 (f) of Regulation
      D
      promulgated under the 1933 Act) has notified the Company that such officer
      intends to leave the Company or otherwise terminate such officer's employment
      with the Company. No current or former executive officer of the Company, to
      the
      knowledge of the Company, is, or is now expected to be, in violation of any
      material term of any employment contract, confidentiality, disclosure or
      proprietary information agreement, non-competition agreement, or any other
      contract or agreement or any restrictive covenant. The continued employment
      of
      each such executive officer does not subject the Company or any of its
      Subsidiaries to any liability with respect to any of the foregoing
      matters.

    

    (ii)
      The
      Company and its Subsidiaries are in compliance with all federal, state, local
      and foreign laws and regulations respecting employment and employment practices,
      terms and conditions of employment and wages and hours, except where failure
      to
      be in compliance would not, either individually or in the aggregate, reasonably
      be expected to result in a Material Adverse Effect.

    

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

    

    
      
        
        

      

      
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    (v)
      Intellectual
      Property Rights.
      Except
      as set forth in Schedule
      3(v),
      the
      Company and its Subsidiaries own or possess adequate rights or licenses to
      use
      all trademarks, trade names, service marks, service mark registrations, service
      names, patents, patent rights, copyrights, inventions, licenses, approvals,
      governmental authorizations, trade secrets and other intellectual property
      rights ("Intellectual
      Property Rights")
      necessary to conduct their respective businesses as now conducted. None of
      the
      Company's Intellectual Property Rights have expired or terminated, or is
      expected to expire or terminate within three years from the date of this
      Agreement. Except as set forth in Schedule
      3(v),
      the
      Company does not have any knowledge of any infringement by the Company or its
      Subsidiaries of Intellectual Property Rights of others. There is no claim,
      action or proceeding being made or brought, or to the knowledge of the Company,
      being threatened, against the Company or any of its Subsidiaries regarding
      its
      Intellectual Property Rights. Except as set forth in Schedule
      3(v),
      the
      Company is unaware of any facts or circumstances which might give rise to any
      of
      the foregoing infringements or claims, actions or proceedings. The Company
      and
      its Subsidiaries have taken reasonable security measures to protect the secrecy,
      confidentiality and value of all of their Intellectual Property
      Rights.

    

    (w)
      Environmental
      Laws.
      The
      Company and its Subsidiaries (i) are in compliance with any and all
      Environmental Laws (as hereinafter defined), (ii) have received all permits,
      licenses or other approvals required of them under applicable Environmental
      Laws
      to conduct their respective businesses and (iii) are in compliance with all
      terms and conditions of any such permit, license or approval where, in each
      of
      the foregoing clauses (i), (ii) and (iii), the failure to so comply could be
      reasonably expected to have, individually or in the aggregate, a Material
      Adverse Effect. The term "Environmental
      Laws"
      means
      all federal, state, local or foreign laws relating to pollution or protection
      of
      human health or the environment (including, without limitation, ambient air,
      surface water, groundwater, land surface or subsurface strata), including,
      without limitation, laws relating to emissions, discharges, releases or
      threatened releases of chemicals, pollutants, contaminants, or toxic or
      hazardous substances or wastes (collectively, "Hazardous
      Materials")
      into
      the environment, or otherwise relating to the manufacture, processing,
      distribution, use, treatment, storage, disposal, transport or handling of
      Hazardous Materials, as well as all authorizations, codes, decrees, demands
      or
      demand letters, injunctions, judgments, licenses, notices or notice letters,
      orders, permits, plans or regulations issued, entered, promulgated or approved
      thereunder.

    

    (x)
      Tax
      Status.
      The
      Company and each of its Subsidiaries (i) has paid all taxes and other
      governmental assessments and charges that are material in amount, shown or
      determined to be due on such returns, reports and declarations, except those
      being contested in good faith and (ii) has set aside on its books provision
      reasonably adequate for the payment of all taxes for periods subsequent to
      the
      periods to which such returns, reports or declarations apply. There are no
      unpaid taxes in any material amount claimed to be due by the taxing authority
      of
      any jurisdiction, and the officers of the Company know of no basis for any
      such
      claim.

    

    
      
        
        

      

      
        -15-

        
          

        

      

      
        
        

      

    

    (y)
      Internal
      Accounting and Disclosure Controls.
      The
      Company and each of its 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 and liability accountability, (iii) access to assets or
      incurrence of liabilities is permitted only in accordance with management's
      general or specific authorization and (iv) the recorded accountability for
      assets and liabilities is compared with the existing assets and liabilities
      at
      reasonable intervals and appropriate action is taken with respect to any
      difference, except where the failure to satisfy any of clauses (i) through
      (iv)
      above, would not, individually or in the aggregate, be reasonably expected
      to
      result in a Material Adverse Effect. The Company maintains disclosure controls
      and procedures (as such term is defined in Rule 13a-14 under the Securities
      Exchange Act of 1934, as amended (the "1934
      Act"))
      that
      are effective in ensuring that information required to be disclosed by the
      Company in the reports that it files or submits under the 1934 Act is recorded,
      processed, summarized and reported, within the time periods specified in the
      rules and forms of the SEC, including, without limitation, controls and
      procedures designed to ensure that information required to be disclosed by
      the
      Company in the reports that it files or submits under the 1934 Act is
      accumulated and communicated to the Company's management, including its
      principal executive officer or officers and its principal financial officer
      or
      officers, as appropriate, to allow timely decisions regarding required
      disclosure. The Company's independent public accountant has not informed the
      Company, including the Company's board of directors, pursuant to Section 10A
      of
      the 1934 Act or otherwise, of any illegal act or fraud involving the Company,
      of
      any material weakness or significant deficiency in the Company's internal
      control over financial reporting, or of any disagreements it has had with
      management of the Company.

    

    (z)
      Off
      Balance Sheet Arrangements.
      There is
      no transaction, arrangement, or other relationship between the Company and
      an
      unconsolidated or other off balance sheet entity that is required to be
      disclosed by the Company in its 1934 Act filings and is not so disclosed or
      that
      otherwise would be reasonably likely to have a Material Adverse
      Effect.

    

    (aa)
      Manipulation
      of Price.
      The
      Company has not, and to the actual knowledge of the directors and officers
      of
      the Company, no one acting on its behalf has, (i) taken, directly or indirectly,
      any action designed to cause or to result in the stabilization or manipulation
      of the price of any security of the Company to facilitate the sale or resale
      of
      any of the Securities, (ii) sold, bid for, purchased, or paid any compensation
      for soliciting purchases of, any of the Securities, or (iii) paid or agreed
      to
      pay to any person any compensation for soliciting another to purchase any other
      securities of the Company.

    

    
      
        
        

      

      
        -16-

        
          

        

      

      
        
        

      

    

    (bb)
      Transfer
      Taxes.
      On the
      Closing Date, all stock transfer or other taxes (other than income or similar
      taxes) which are required to be paid in connection with the sale and transfer
      of
      the Securities to be sold to each Buyer hereunder will be, or will have been,
      fully paid or provided for by the Company, and all laws imposing such taxes
      will
      be or will have been complied with.

    

    (cc)
      Disclosure.
      The
      Company confirms that neither it nor any other Person acting on its behalf
      has
      provided any of the Buyers or their respective agents or counsel with any
      information that constitutes or might constitute material, nonpublic
      information. The Company understands and confirms that each of the Buyers will
      rely on the foregoing representations in effecting transactions in securities
      of
      the Company. All disclosure provided to the Buyers 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 Subsidiary or either of its or their respective 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 (assuming for this purpose
      that the Company's reports filed under the 1934 Act are being incorporated
      into
      an effective registration statement filed by the Company under the 1933 Act).
      The Company acknowledges and agrees that no Buyer makes or has made any
      representations or warranties with respect to the transactions contemplated
      hereby other than those specifically set forth in Section 2.

    

    4.
      COVENANTS.

    

    (a)
      Best
      Efforts.
      Each
      party shall use its best efforts timely to satisfy each of the covenants and
      the
      conditions to be satisfied by it as provided in Sections 4, 5, 6 and 7 of this
      Agreement.

    

    (b)
      Form
      D
      and Blue Sky.
      The
      Company agrees to file a Form D with respect to the Securities as required
      under
      Regulation D and to provide a copy thereof to each Buyer promptly after such
      filing. The Company, on or before the Closing Date, shall take such action
      as
      the Company shall reasonably determine is necessary in order to obtain an
      exemption for or to qualify the Securities for sale to the Buyers at the Closing
      pursuant to this Agreement under applicable securities or "Blue Sky" laws of
      the
      states of the United States (or to obtain an exemption from such qualification),
      and shall provide evidence of any such action so taken to the Buyers on or
      prior
      to the Closing Date. The Company shall make all filings and reports relating
      to
      the offer and sale of the Securities required under applicable securities or
      "Blue Sky" laws of the states of the United States following the Closing
      Date.

    

    
      
        
        

      

      
        -17-

        
          

        

      

      
        
        

      

    

    (c)
      Reporting
      Status.
      Until
      the date on which the Investors (as defined in the Registration Rights
      Agreement) shall have sold all the Common Shares and Warrant Shares and none
      of
      the Warrants is outstanding (the "Reporting
      Period"),
      the
      Company shall timely file all reports required to be filed with the SEC pursuant
      to the 1934 Act, and the Company shall not terminate its status as an issuer
      required to file reports under the 1934 Act even if the 1934 Act or the rules
      and regulations thereunder would otherwise permit such termination.

    

    (d)
      Use
      of
      Proceeds.
      The
      Company will use the proceeds from the sale of the Securities for general
      corporate purposes, including general and administrative expenses, and current
      accounts payable, but not for (i) the repayment of other outstanding
      Indebtedness of the Company or any of its Subsidiaries in excess of $250,000
      or
      (ii) the payment of bonuses or other compensation in excess of $50,000, except
      for salaries to officers, directors or other affiliates of the Company.

    

    (e)
      Financial
      Information.
      The
      Company agrees to send to each Buyer during the Reporting Period, unless the
      following are filed with the SEC through EDGAR and are available to the public
      through the EDGAR system, within five (5) Business Days after the filing thereof
      with the SEC, a copy of its Annual Reports on Form 10-K, its Quarterly Reports
      on Form 10-Q, any Current Reports on Form 8-K and any registration statements
      (other than on Form S-8) or amendments filed pursuant to the 1933 Act, and
      (ii)
      copies of any notices and other information made available or given to the
      stockholders of the Company generally, contemporaneously with the making
      available or giving thereof to the stockholders.

    

    (f)
      Listing.
      The
      Company shall promptly (i) secure the listing of all of the Registrable
      Securities (as defined in the Registration Rights Agreement) upon each national
      securities exchange and automated quotation system, if any, upon which shares
      of
      Common Stock are then listed (subject to official notice of issuance) and (ii)
      secure the listing of all of the Registrable Securities upon the NASDAQ SmallCap
      Market or the NASDAQ National Market if and when the Company satisfies the
      applicable listing requirements. The Company shall maintain, so long as any
      other shares of Common Stock shall be so listed, such listing of all Registrable
      Securities from time to time issuable under the terms of the Transaction
      Documents. The Company shall maintain the Common Stock's authorization for
      listing on the Principal Market. Neither the Company nor any of its Subsidiaries
      shall take any action which would be reasonably expected to result in the
      delisting or suspension of the Common Stock on the Principal Market. The Company
      shall pay all fees and expenses in connection with satisfying its obligations
      under this Section 4(f).

    

    
      
        
        

      

      
        -18-

        
          

        

      

      
        
        

      

    

    (g)
      Fees.
      The
      Company shall pay any placement agent's fees, financial advisory fees, or
      broker's commissions (other than for Persons engaged by any Buyer) relating
      to
      or arising out of the transactions contemplated hereby. The Company shall pay,
      and hold each Buyer harmless against, any liability, loss or expense (including,
      without limitation, reasonable attorney's fees and out-of-pocket expenses)
      arising in connection with any claim relating to any such payment. Except as
      otherwise set forth in this Agreement or in the Transaction Documents, each
      party to this Agreement shall bear its own expenses in connection with the
      sale
      of the Securities to the Buyers.

    

    (h)
      Pledge
      of Securities.
      The
      Company acknowledges and agrees that the Securities may be pledged by an
      Investor (as defined in the Registration Rights Agreement) in connection with
      a
      bona fide margin agreement or other loan or financing arrangement that is
      secured by the Securities. The pledge of Securities shall not be deemed to
      be a
      transfer, sale or assignment of the Securities hereunder, and no Investor
      effecting a pledge of Securities shall be required to provide the Company with
      any notice thereof or otherwise make any delivery to the Company pursuant to
      this Agreement or any other Transaction Document, including, without limitation,
      Section 2(f) of this Agreement; provided that an Investor and its pledgee shall
      be required to comply with the provisions of Section 2(f) of this Agreement
      in
      order to effect a sale, transfer or assignment of Securities to such pledgee.
      The Company hereby agrees to execute and deliver such documentation as a pledgee
      of the Securities may reasonably request in connection with a pledge of the
      Securities to such pledgee by an Investor.

    

    (i)
      Corporate
      Existence.
      So long
      as any Buyer beneficially owns any Warrants, the Company shall maintain its
      corporate existence and shall not sell all or substantially all of the Company's
      assets, except in the event of a merger or consolidation or, except in
      compliance with the Warrant, sale of all or substantially all of the Company's
      assets, where the surviving or successor entity in such transaction (i) assumes
      the Company's obligations hereunder and under the agreements and instruments
      entered into in connection herewith and (ii) is a publicly traded corporation
      whose common stock is quoted on or listed for trading on the Principal Market,
      the New York Stock Exchange, the American Stock Exchange or the Nasdaq Stock
      Market, Inc.

    

    (j)
      Reservation
      of Shares.
      The
      Company shall, so long as any of the Warrants are outstanding, take all action
      necessary to at all times have authorized, and reserved for the purpose of
      issuance, the number of shares of Common Stock issuable upon exercise of the
      Warrants being issued at the Closing in conformity with Section
      3(c).

    

    5.
      TRANSFER
      RESTRICTIONS; TRANSFER AGENT INSTRUCTIONS.

    

    
      
        
        

      

      
        -19-

        
          

        

      

      
        
        

      

    

    (a)
      Transfer
      Restrictions.
      The
      legend set forth in Section 2(g) shall be removed and the Company shall issue
      a
      certificate without such legend or any other legend to the holder of the
      applicable Securities upon which it is stamped, if (i) in connection with any
      sale of such Securities made pursuant to a Registration Statement and in
      accordance with the prospectus delivery requirements under the 1933 Act, (ii)
      in
      connection with a sale, assignment or other transfer, such holder provides
      the
      Company with an opinion of counsel, in a generally acceptable form, to the
      effect that such sale, assignment or transfer of such Securities may be made
      without registration under the applicable requirements of the 1933 Act and
      the
      legend may be removed from such certificate in connection with such sale,
      assignment or other transfer, or (iii) such holder provides the Company with
      reasonable assurance that such Securities can be sold, assigned or transferred
      pursuant to Rule 144(k). The Company shall cause its legal counsel to issue
      the
      legal opinion included in the Irrevocable 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 any or all of the
      Securities, the Company will no later than three Business Days following the
      delivery by a Buyer to the Company or the Company's transfer agent of a legended
      certificate representing such Securities, deliver or cause to be delivered
      to
      such Buyer a certificate representing such Securities that is free from all
      restrictive and other legends. Following the Effective Date and upon the
      delivery to any Buyer of any certificate representing Securities that is free
      from all restrictive and other legends, such Buyer agrees that any sale of
      such
      Securities shall be made pursuant to a Registration Statement and in accordance
      with the plan of distribution described therein or pursuant to an available
      exemption from the registration requirements of the 1933 Act. 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 Section
      2(g). In order for the Buyers to effect sales under a Registration Statement
      in
      accordance with the legal opinion included in the Irrevocable Transfer Agent
      Instructions, the Company agrees to give notice, at any time and from time
      to
      time upon written request of any Buyer, to the Company's transfer agent that
      (a)
      the Company has filed all required reports under the 1934 Act, (b) there is
      no
      stop order suspending the effectiveness of the Registration Statement, and
      (c)
      there has been no event that would cause the Registration Statement to include
      any untrue statement of material fact or omit to state a material fact required
      to be stated therein or necessary to make the statements therein not misleading.
      The notice in the foregoing sentence shall be given by the Company on the same
      business day as the request is made if the request is made at or prior to 11:00
      A.M., EST, on any business day, and within one business day if the request
      is
      made after 11:00 A.M., EST.

    

    (b)
      Transfer
      Agent Instructions.
      The
      Company shall issue irrevocable instructions to its transfer agent, and any
      subsequent transfer agent, to issue certificates, registered in the name of
      each
      Buyer or its respective nominee(s), for the Warrant Shares in such amounts
      as
      specified from time to time by each Buyer to the Company upon exercise of the
      Warrants in the form of Exhibit
      C
      attached
      hereto (the "Irrevocable
      Transfer Agent Instructions").
      The
      Company represents and warrants that no instruction other than the Irrevocable
      Transfer Agent Instructions referred to in this Section 5, and stop transfer
      instructions to give effect to Section 2(f) hereof, will be given by the Company
      to its transfer agent with respect to the Securities, and that the Securities
      shall otherwise be freely transferable on the books and records of the Company
      as and to the extent provided in this Agreement and the other Transaction
      Documents.

    

    
      
        
        

      

      
        -20-

        
          

        

      

      
        
        

      

    

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

    

    (d)
      Additional
      Relief.
      If the
      Company shall fail for any reason or for no reason to issue to such holder
      unlegended certificates within three (3) Business Days of receipt of documents
      necessary for the removal of the legend set forth above (the "Deadline
      Date"),
      then,
      in addition to all other remedies available to the holder, if on or after the
      Business Day immediately following such three (3) Business Day period, the
      holder purchases (in an open market transaction or otherwise) Securities to
      deliver in satisfaction of a sale by the holder of Securities that the holder
      anticipated receiving from the Company (a "Buy-In"),
      then
      the Company shall, within five (5) Business 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 Securities so purchased (the "Buy-In
      Price"),
      at
      which point the Company's obligation to deliver such certificate (and to issue
      such Securities) shall terminate, or (ii) if applicable, promptly honor its
      obligation to deliver to the holder a certificate or certificates representing
      such Securities 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 Securities,
      times (B) the Closing Bid Price (as defined in the Warrants) on the Deadline
      Date.

    

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

    

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

    

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

    

    
      
        
        

      

      
        -21-

        
          

        

      

      
        
        

      

    

    (b)
      Such
      Buyer shall have delivered to the Company the Purchase Price for the Securities
      being purchased by such Buyer and each other Buyer at such Closing by wire
      transfer of immediately available funds pursuant to the wire instructions
      provided by the Company.

    

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

    

    (d)
      At
      any time that the Buyer or any other Person shall have a beneficial ownership
      interest (within the meaning of Rule 13d-3 under the 1934 Act), or a direct
      or
      indirect pecuniary interest (within the meaning of Rule 16a-l(a)(2) under the
      1934 Act) in the Securities, the Buyer and each such Person shall not, directly
      or indirectly, make any short sale or maintain any short position, establish
      or
      maintain a "put equivalent position" (within the meaning of Rule 16a-l(h) under
      the 1934 Act), enter into any swap, derivative transaction or other arrangement
      that transfers to another, in whole or in part, any of the economic consequences
      of ownership of the Common Stock (whether any such transaction is to be settled
      by delivery of Common Stock, other securities, cash or other consideration)
      or
      any securities convertible into, exercisable for or exchangeable for Common
      Stock of the Company.

    

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

    

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

    

    (a)
      The
      Company shall have executed and delivered to such Buyer (i) each of the
      Transaction Documents and (ii) the Securities being purchased by such Buyer
      at
      such Closing pursuant to this Agreement.

    

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

    

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

    

    
      
        
        

      

      
        -22-

        
          

        

      

      
        
        

      

    

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

    

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

    

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

    

    8.
      TERMINATION. 

    

    In
      the
      event that the Closing shall not have occurred with respect to a Buyer on or
      before ten (10) days from the date hereof due to the Company's or such Buyer's
      failure to satisfy the conditions set forth in Sections 6 and 7 above (and
      the
      nonbreaching party's failure to waive such unsatisfied condition(s)), the
      nonbreaching party shall have the option to terminate this Agreement with
      respect to such breaching party at the close of business on such date without
      liability of any party to any other party.

    

    9.
      MISCELLANEOUS.

    

    (a)
      Definitions.
      The
      following definitions shall for all purposes, unless otherwise clearly indicated
      to the contrary, apply to terms used in this Agreement.

    

    "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.

    

    "Person"
      means an
      individual, a limited liability company, a limited liability partnership, a
      partnership, a joint venture, a corporation, a trust, an unincorporated
      organization and a government or any department or agency thereof.

    

    
      
        
        

      

      
        -23-

        
          

        

      

      
        
        

      

    

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

    

    (c)
      Counterparts.
      This
      Agreement may be executed in two or more identical counterparts, all of which
      shall be considered one and the same agreement and shall become effective when
      counterparts have been signed by each party and delivered to the other
      party;

    

    provided
      that a facsimile signature shall be considered due execution and shall be
      binding upon the signatory thereto with the same force and effect as if the
      signature were an original, not a facsimile signature.

    

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

    

    (e)
      Pronouns.
      As used
      herein, all pronouns shall include the masculine, feminine, neuter, singular
      and
      plural whenever the context and facts require such construction.

    

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

    

    
      
        
        

      

      
        -24-

        
          

        

      

      
        
        

      

    

    (g)
      Entire
      Agreement; Amendments.
      This
      Agreement supersedes all other prior oral or written agreements between the
      Buyers, the Company, their affiliates and Persons acting on their behalf with
      respect to the matters discussed herein, and this Agreement and the instruments
      referenced herein contain the entire understanding of the parties with respect
      to the matters covered herein and therein and, except as specifically set forth
      herein or therein, neither the Company nor any Buyer makes any representation,
      warranty, covenant or undertaking with respect to such matters. No provision
      of
      this Agreement may be amended other than by an instrument in writing signed
      by
      the Company and the holders of at least sixty percent of the aggregate amount
      of
      the Common Shares. No provision hereof may be waived other than by an instrument
      in writing signed by the party against whom enforcement is sought. No such
      amendment shall be effective to the extent that it applies to less than all
      of
      the holders of the Preferred Shares then outstanding. No consideration shall
      be
      offered or paid to any Person to amend or consent to a waiver or modification
      of
      any provision of any of the Transaction Documents unless the same consideration
      also is offered to all of the parties to the Transaction Documents, holders
      of
      Preferred Shares or holders of the Warrants, as the case may be. The Company
      has
      not, directly or indirectly, made any agreements with any Buyers relating to
      the
      terms or conditions of the transactions contemplated by the Transaction
      Documents except as set forth in the Transaction Documents.

    

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

    

     

    If
      to the Company:

    

    SmartVideo
      Technologies, Inc. 

    3505
      Koger Boulevard

    Suite
      400

    Duluth,
      Georgia 30096 

    Telephone:
      (770) 279-3100 

    Facsimile:
      (770) 279-3143

    Attention:
      Ronald A. Warren

    

    

    
      
        
        

      

      
        -25-

        
          

        

      

      
        
        

      

    

    

    with
      a copy to:

    

    Edwards
      Angell Palmer & Dodge LLP

    350
      East
      Las Olas Boulevard

    Suite
      1150

    Fort
      Lauderdale, Florida 33301

    Telephone:
      (954) 727-2600

    Facsimile:
      (954) 727-2601

    Attention:
      Leslie J. Croland, P.A.

    

    If
      to the Transfer Agent:

    

    Continental
      Stock Transfer and Trust Company

    17
      Battery Place South

    8th
      Floor

    New
      York,
      New York 10004

    Telephone:
      (212) 845-3217

    Facsimile:
      (212) 616-7616

    

    If
      to a
      Buyer, to his address and facsimile number set forth on the Schedule of Buyers,
      with copies to Edwards Angell Palmer & Dodge, 350 Las Olas, Boulevard, Suite
      1150, Ft. Lauderdale, FL 33301, telephone (954) 727-2600, facsimile (954)
      727-2601, Attention: Leslie J. Croland, P.A., or to such other address and/or
      facsimile number and/or to the attention of such other Person as the recipient
      party has specified by written notice given to each other party five (5) days
      prior to the effectiveness of such change. Written confirmation of receipt
      (A)
      given by the recipient of such notice, consent, waiver or other communication,
      (B) mechanically or electronically generated by the sender's facsimile machine
      containing the time, date, recipient facsimile number and an image of the first
      page of such transmission or (C) provided by an overnight courier service shall
      be rebuttable evidence of personal service, receipt by facsimile or receipt
      from
      an overnight courier service in accordance with clause (i), (ii) or (iii) above,
      respectively.

    

    (i)
      Successors
      and Assigns.
      This
      Agreement shall be binding upon and inure to the benefit of the parties and
      their respective successors and assigns, including any purchasers of the Common
      Shares or the Warrants. The Company shall not assign this Agreement or any
      rights or obligations hereunder without the prior written consent of the holders
      of at least seventy-five percent of the aggregate amount of the Preferred Shares
      and shares of Common Stock into which the Preferred Shares are converted,
      including by merger or consolidation. A Buyer may assign some or all of its
      rights hereunder without the consent of the Company, in which event such
      assignee shall be deemed to be a Buyer hereunder with respect to such assigned
      rights.

    

    
      
        
        

      

      
        -26-

        
          

        

      

      
        
        

      

    

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

    

    (k)
      Survival.
      Unless
      this Agreement is terminated under Section 8, the representations and warranties
      of the Company and the Buyers contained in Sections 2 and 3, the agreements
      and
      covenants set forth in Sections 4, 5 and 9 shall survive the Closing and the
      delivery and exercise of Securities, as applicable. Each Buyer shall be
      responsible only for its own representations, warranties, agreements and
      covenants hereunder.

    

    (1)
      Further
      Assurances.
      Each
      party shall do and perform, or cause to be done and performed, all such further
      acts and things, and shall execute and deliver all such other agreements,
      certificates, instruments and documents, as any other party may reasonably
      request in order to carry out the intent and accomplish the purposes of this
      Agreement and the consummation of the transactions contemplated
      hereby.

    

    (m)
      Indemnification.
      In
      consideration of each Buyer's execution and delivery of the Transaction
      Documents and acquiring the Securities thereunder and in addition to all of
      the
      Company's other obligations under the Transaction Documents, the Company shall
      defend, protect, indemnify and hold harmless each Buyer and each other holder
      of
      the Securities and all of their stockholders, partners, members, officers,
      directors, employees and direct or indirect investors and any of the foregoing
      Persons' agents or other representatives (including, without limitation, those
      retained in connection with the transactions contemplated by this Agreement)
      (collectively, the "Indemnitees")
      from
      and against any and all actions, causes of action, suits, claims, losses, costs,
      penalties, fees, liabilities and damages, and expenses in connection therewith
      (irrespective of whether any such Indemnitee is a party to the action for which
      indemnification hereunder is sought), and including reasonable attorneys' fees
      and disbursements (the "Indemnified
      Liabilities"),
      incurred by any Indemnitee as a result of, or arising out of, or relating to
      (a)
      any misrepresentation or breach of any representation or warranty made by the
      Company in the Transaction Documents or any other certificate, instrument or
      document contemplated hereby or thereby, (b) any breach of any covenant,
      agreement or obligation of the Company contained in the Transaction Documents
      or
      any other certificate, instrument or document contemplated hereby or thereby
      or
      (c) any cause of action, suit or claim brought or made against such Indemnitee
      by a third party (including for these purposes a derivative action brought
      on
      behalf of the Company) and arising out of or resulting from (i) the execution,
      delivery, performance or enforcement of the Transaction Documents or any other
      certificate, instrument or document contemplated hereby or thereby, (ii) any
      transaction financed or to be financed in whole or in part, directly or
      indirectly, with the proceeds of the issuance of the Securities, or (iii) the
      status of such Buyer or holder of the Securities as an investor in the Company
      (except, in the case of this clause (iii), arising from a Person who is,
      directly or indirectly, an investor, partner, or equityholder in the Buyer
      in
      such Person's capacity as such an investor, partner or equityholder, or arising
      in relation to the Buyer's capacity to make such an investment in the Company).
      To the extent that the foregoing undertaking by the Company may be unenforceable
      for any reason, the Company shall make the maximum contribution to the payment
      and satisfaction of each of the Indemnified Liabilities which is permissible
      under applicable law. Except as otherwise set forth herein, the mechanics and
      procedures with respect to the rights and obligations under this Section 9(m)
      shall be the same as those set forth in Section 6 of the Registration Rights
      Agreement.

    

    
      
        
        

      

      
        -27-

        
          

        

      

      
        
        

      

    

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

    

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

    

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

    

    
      
        
        

      

      
        -28-

        
          

        

      

      
        
        

      

    

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

    

    (r)
      Independent
      Nature of Buyers' Obligations and Rights.
      The
      obligations of each Buyer under any Transaction Document are several and not
      joint with the obligations of any other Buyer, and no Buyer shall be responsible
      in any way for the performance of the obligations of any other Buyer under
      any
      Transaction Document. Nothing contained herein or in any other Transaction
      Document, and no action taken by any Buyer pursuant hereto or thereto, shall
      be
      deemed to constitute the Buyers as a partnership, an association, a joint
      venture or any other kind of entity, or create a presumption that the Buyers
      are
      in any way acting in concert or as a group with respect to such obligations
      or
      the transactions contemplated by the Transaction Documents and the Company
      acknowledges that the Buyers are not acting in concert or as a group with
      respect to such obligations or the transactions contemplated by the Transaction
      Documents. Each Buyer confirms that it has independently participated in the
      negotiation of the transaction contemplated hereby with the advice of its own
      counsel and advisors. Each Buyer shall be entitled to independently protect
      and
      enforce its rights, including, without limitation, the rights arising out of
      this Agreement or out of any other Transaction Documents, and it shall not
      be
      necessary for any other Buyer to be joined as an additional party in any
      proceeding for such purpose. No Buyer of the Securities or third party has
      acted
      as agent for any Buyer in connection with the Purchaser making its investment
      hereunder, and no Buyer or any other third party will be acting as agent of
      any
      Buyer in connection with monitoring its investment in the Securities or in
      enforcing its rights under this Agreement.

    

    

    

    [Signature
      Page Follows]

     

    
      
        
        

      

      
        -29-

        
          

        

      

      
        
        

      

       

    

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

    

     

    

     

    

    

    

    
      	 	COMPANY:
	 	 
	 	SMARTVIDEO TECHNOLOGIES, INC.
	 	 
	 	 
	 	 
	 	By: /s/
              William J.
              Loughman              
               
	 	Name: William J. Loughman
	 	Title: Vice President of Finance
              

    

    

    

     

    
      
        
        

      

      
        -30-

        
          

        

      

      
        
        

      

       

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

         

        
          	
                  
                    John
                      E. Abdo as Trustee Under Trust Agreement UAD 3/15/76 For the
                      Benefit of
                      John E. Abdo

                    /s/
                      John E. Abdo, as Trustee

                    Name:
                      John E. Abdo

                  

                	 	
                  /s/
                    Diane B. Abelson

                  Diane
                    B. Abelson

                	 	
                  Global
                    Triangle Employees Retirement Trust

                  /s/
                    John Accetta

                  Name:
                    John Accetta

                	 	
                  /s/
                    Joel L.Altman

                  Joel
                    L. Altman

                
	 	 	 	 	 	 	 
	
                  
                    Joseph
                      C. Amaturo Revocable Trust u/a/d 9/14/88

                    /s/
                      Joseph C. Amaturo 

                    Name:
                      Joseph C. Amaturo 

                  

                	 	
                  Apler
                    Investment Partnership

                  /s/
                    Stewart L. Appelrouth

                  Name:
                    Stewart L. Appelrouth

                	 	
                  /s/
                    Robert Balogh

                  Robert
                    Balogh

                	 	
                  /s/
                    Jeff Baumann

                  Jeff
                    Baumann

                
	 	 	 	 	 	 	 
	
                  /s/
                    Mike Baumann

                  Mike
                    Baumann

                	 	
                  Beeson
                    Investments, LLC

                  /s/
                    Jim Beeson

                  Name:
                    Jim Beeson

                	 	
                  /s/
                    Audrey Bennati

                  Audrey
                    Bennati

                	 	
                  /s/
                    Peter L. Bermont

                  Peter
                    L. Bermont

                
	 	 	 	 	 	 	 
	
                  /s/
                    Robert Best

                  Robert
                    Best

                	 	
                  /s/
                    Harvey Birdman

                  Harvey
                    Birdman

                	 	
                  /s/
                    Jeffrey D. Blum, D.D.S

                  Jeffrey
                    D. Blum, D.D.S..

                	 	
                  /s/
                    Henrik Brixen

                  Henrik
                    Brixen

                
	 	 	 	 	 	 	 
	
                  Vulcan
                    Properties, Inc.

                  /s/
                    Arthur G. Cohen

                  Arthur
                    G. Cohen

                	 	
                  
                    
                      Martin
                        Cohen & Soryl Cohen, JT TEN

                      /s/
                        Martin Cohen

                      Martin
                        Cohen

                      /s/
                        Soryl Cohen

                      Soryl
                        Cohen

                    

                  

                	 	
                  /s/
                    Art Criden

                  Art
                    Criden

                	 	
                  /s/
                    Chris Damian

                  Chris
                    Damian

                
	 	 	 	 	 	 	 
	
                  /s/
                    Geoff Dyer

                  Geoff
                    Dyer

                	 	
                  SME
                    Children LLP

                  /s/
                    Steven Esrick

                  Steven
                    Esrick

                	 	
                  /s/
                    Paul Fazio

                  Paul
                    Fazio

                	 	
                  Qualified
                    Compensation Trust

                  /s/
                    Theodore Feldman, M.D.

                  Name:
                    Theodore Feldman, M.D.

                
	 	 	 	 	 	 	 
	
                  /s/
                    Jonathan E. Fels

                  Jonathan
                    E. Fels

                	 	
                  Benjamin
                    Management Company, LLC

                  /s/
                    Bruce Gittlin

                  Name:
                    Bruce Gittlin, Attorney In Fact

                	 	
                  
                    Wachovia
                      Bank For the Benefit ofAlan Halpert IRA Acct: 39938330

                    By:
                      /s/
                      Alan Halpert

                    Name:
                      Alan Halpert

                  

                	 	
                  /s/
                    Michael Hanzman

                  Michael
                    Hanzman

                
	 	 	 	 	 	 	 
	
                  /s/
                    Scot Hunter

                  Scot
                    Hunter

                	 	
                  /s/
                    Stephen A. Hurwitz

                  Stephen
                    A. Hurwitz

                	 	
                  
                    
                      Alan
                        Jacobson & Jan Hart

                      /s/
                        Alan Jacobson

                      Alan
                        Jacobson

                      /s/
                        Jan Hart

                      Jan
                        Hart

                    

                  

                	 	
                  /s/
                    Kent Karpawich

                  Kent
                    Karpawich

                
	 	 	 	 	 	 	 
	
                  /s/
                    Todd Katz

                  Todd
                    Katz

                	 	
                  /s/
                    Sharon Kaufman

                  Sharon
                    Kaufman

                	 	
                  Dill
                    Consulting LLC

                  /s/
                    Gary Krat

                  Name:
                    Gary Krat

                	 	
                  /s/
                    Dan Kleiman

                  Dan
                    Kleiman

                
	 	 	 	 	 	 	 
	
                  SGL
                    Investments Limited Partnership 1

                  /s/
                    Stuart G. Lasher

                  Name:
                    Stuart G. Lasher

                	 	
                  
                    Alan
                      B. Levan, Trustee

                    /s/
                      Alan B. Levan, Trustee

                    Alan
                      B. Levan, Trustee

                  

                	 	
                  /s/
                    Baruch Levy

                  Baruch
                    Levy

                	 	
                  /s/
                    Michael Levy

                  Michael
                    Levy

                
	 	 	 	 	 	 	 
	
                  /s/
                    William
                    Loughman

                  William
                    Loughman

                	 	
                  /s/
                    Kevin Love

                  Kevin
                    Love

                	 	
                  William
                    Matz Revocable Living Trust u/a Dated 9/15/97

                  /s/
                    William Matz 

                  Name:
                    William Matz, Trustee

                	 	
                  Quantuck
                    Advisors, LLC

                  /s/
                    John McCartney

                  John
                    McCartney

                
	 	 	 	 	 	 	 
	
                  MOKO
                    Investments, LLC

                  /s/
                    Stuart R. Morris, Mgr.

                  Name:
                    Stuart R. Morris, Mgr.

                	 	
                  /s/
                    Brett Overman

                  Brett
                    Overman

                	 	
                  TOP,
                    Inc.

                  /s/
                    Tyson Overman

                  Tyson
                    Overman

                	 	
                  /s/
                    Scott Peck

                  Scott
                    Peck

                
	 	 	 	 	 	 	 
	
                  Scott
                    A. Poulin Revocable Trust

                  /s/
                    Scott Poulin

                  Name:
                    Scott Poulin

                	 	
                  /s/
                    Buddy Puder

                  Buddy
                    Puder

                	 	
                  /s/
                    Michael Puder

                  Michael
                    Puder

                	 	
                  /s/
                    Laura K. Pugliese

                  Laura
                    K. Pugliese

                
	 	 	 	 	 	 	 
	
                  /s/
                    Anthony V. Pugliese, III

                  Anthony
                    V. Pugliese, III

                	 	
                  /s/
                    Beverly Raphael

                  Beverly
                    Raphael

                	 	
                  Ratner
                    Companies

                  /s/
                    Dennis Ratner

                  Name:
                    Dennis Ratner

                	 	
                  
                    Steve
                      Rattner and Debra Rattner, Joint Tennants

                    /s/
                      Steve Rattner

                    Steve
                      Rattner

                    /s/
                      Debra Rattner

                    Debra
                      Rattner

                  

                
	 	 	 	 	 	 	 
	
                  /s/
                    Dwight Richert

                  Dwight
                    Richert

                	 	
                  /s/
                    Scott Robins

                  Scott
                    Robins

                	 	
                  /s/
                    Herman Rush

                  Herman
                    Rush

                	 	
                  /s/
                    Scott Schlesinger

                  Scott
                    Schlesinger

                
	 	 	 	 	 	 	 
	
                  /s/
                    Brent Sembler

                  Brent
                    Sembler

                	 	
                  /s/
                    Jay Shapiro

                  Jay
                    Shapiro

                	 	
                  
                    GHS
                      Holdings Limited Partnership

                    /s/
                      Glenn Singer

                    Glenn
                      Singer

                  

                	 	
                  /s/
                    Barry E. Somerstein

                  Barry
                    E. Somerstein

                
	 	 	 	 	 	 	 
	
                  /s/
                    Justin A. Stanley, Jr.

                  Justin
                    A. Stanley, Jr.

                	 	
                  /s/
                    J. Kenneth Tate

                  J.
                    Kenneth Tate

                	 	
                  /s/
                    James D. Tate

                  James
                    D. Tate

                	 	
                  /s/
                    Stanley G. Tate

                  Stanley
                    G. Tate

                
	 	 	 	 	 	 	 
	
                  /s/
                    Sushayla Ure

                  Sushayla
                    Ure

                	 	
                  Bayview
                    Partners

                  /s/
                    William H. Van Pelt, IV

                  Name:
                    William H. Van Pelt, IV

                	 	
                  Fremernat,
                    Inc.

                  /s/
                    Fredy C. Varela

                  Fredy
                    C. Varela

                	 	
                  /s/
                    Rick Walker

                  Rick
                    Walker

                
	 	 	 	 	 	 	 
	
                  /s/
                    Rick Wilber

                  Rick
                    Wilber

                	 	
                  /s/
                    Nicholas C. Williams

                  Nicholas
                    C. Williams

                	 	 	 	 

        

         

        [Signature
          Page to Securities Purchase Agreement] 

      

    

    
      
        
        

      

      
        -31-

        
          

        

      

      
        
        

      

    

    

    SCHEDULE
      OF BUYERS

    
      

      
        	
                (1)

              	
                (2)

              	
                (3)

              	
                (4)

              	
                (5)

              
	
                Buyer

              	
                Address
                  and

                Facsimile
                  Number

              	
                Number
                  of

                Common
                  Shares

              	
                Number
                  of $1.25
                  Warrant Shares

              	
                Purchase
                  Price

                $

              
	 	 	 	 	 
	
                
                  John
                    E. Abdo as Trustee Under
                    Trust Agreement UAD 3/15/76 For the Benefit of John E.
                    Abdo

                

              	
                1350
                  NE 56th Street

                Suite
                  200

                Ft.
                  Lauderdale, FL 33334

                (954)
                  491-9217

              	
                480,000

              	
                480,000

              	
                $600,000

              
	
                Diane
                  B. Abelson 

              	
                2761
                  Oakbrook Manor

                Weston,
                  FL 33332

                (954)
                  358-6293

              	
                20,000

              	
                20,000

              	
                $25,000

              
	
                Global
                  Triangle Employees Retirement Trust

              	
                700
                  Balboa Avenue

                Coronado,
                  CA 92118 

                (619)
                  491-9383

              	
                120,000

              	
                120,000

              	
                $150,000

              
	
                Joel
                  L. Altman 

              	
                2124
                  West Maya Palm

                Boca
                  Raton, FL 33432

                (561)
                  394-9485

              	
                80,000

              	
                80,000

              	
                $100,000

              
	
                Joseph
                  C. Amaturo Revocable Trust u/a/d 9/14/88

              	
                3101
                  North Federal Highway

                Ft.
                  Lauderdale, FL 33306

                (954)
                  565-1311

              	
                160,000

              	
                160,000

              	
                $200,000

              
	
                Apler
                  Investment Partnership

              	
                999
                  Ponce de Leon Boulevard

                Suite
                  625

                Coral
                  Gables, FL 33134

                (305)
                  443-5171

              	
                120,000

              	
                120,000

              	
                $150,000

              

      

       

      
        
          
          

        

        
          -32-

          
            

          

        

        
          
          

        

        
          	
                  (1)

                	
                  (2)

                	
                  (3)

                	
                  (4)

                	
                  (5)

                
	
                  Buyer

                	
                  Address
                    and

                  Facsimile
                    Number

                	
                  Number
                    of

                  Common
                    Shares

                	
                  Number
                    of $1.25
                    Warrant Shares

                	
                  Purchase
                    Price

                  $

                

        

      

      
        	
                Robert
                  Balogh 

              	
                777
                  Arthur Godfrey Road

                4th
                  Floor

                Miami
                  Beach, FL 33140

                (305)
                  538-0670

              	
                120,000

              	
                120,000

              	
                $150,000

              
	
                Jeff
                  Baumann 

              	
                17560
                  West 441

                Mt.
                  Dora, FL 32756

                (407)
                  333-8187

              	
                104,000

              	
                104,000

              	
                $130,000

              
	
                Mike
                  Baumann 

              	
                1200
                  Brickell Avenue

                Suite
                  1720

                Miami,
                  FL 33131

                (305)
                  375-8183

              	
                200,000

              	
                200,000

              	
                $250,000

              
	
                Beeson
                  Investments, LLC

              	
                2101
                  North Andrews Avenue

                Suite
                  107

                Wilton
                  Manors, FL 33311

                (954)
                  563- 8052

              	
                80,000

              	
                80,000

              	
                $100,000

              
	
                Audrey
                  Bennati 

              	
                6330
                  Allison Road

                Miami
                  Beach, FL 33141

              	
                80,000

              	
                80,000

              	
                $100,000

              
	
                Peter
                  L. Bermont 

              	
                3427
                  North Moorings Way

                Coconut
                  Grove, FL 33133 

                (305)
                  648-0679

              	
                80,000

              	
                80,000

              	
                $100,000

              
	
                Robert
                  Best 

              	
                978
                  Oak Street

                Winnetka,
                  IL 60093 

                (312)
                  782-4339

              	
                40,000

              	
                40,000

              	
                $50,000

              

      

       

      
        
          
          

        

        
          -33-

          
            

          

        

        
          
          

        

        
          	
                  (1)

                	
                  (2)

                	
                  (3)

                	
                  (4)

                	
                  (5)

                
	
                  Buyer

                	
                  Address
                    and

                  Facsimile
                    Number

                	
                  Number
                    of

                  Common
                    Shares

                	
                  Number
                    of $1.25
                    Warrant Shares

                	
                  Purchase
                    Price

                  $

                

        

      

      
        	
                Harvey
                  Birdman 

              	
                425
                  North Federal Highway

                Hallandale,
                  FL 33009 

                (954)
                  239-4718

              	
                80,000

              	
                80,000

              	
                $100,000

              
	
                Jeffrey
                  D. Blum, D.D.S. 

              	
                400
                  Arthur Godfrey Road

                Miami
                  Beach, FL 33140 

                (305)
                  538-2019

              	
                80,000

              	
                80,000

              	
                $100,000

              
	
                Henrik
                  Brixen 

              	
                929
                  SE 10th Court 

                Pompano
                  Beach, FL 33060 

                (954)
                  537-2772

              	
                80,000

              	
                80,000

              	
                $100,000

              
	
                Vulcan
                  Properties, Inc.

              	
                1270
                  Avenue of the Americas

                Suite
                  2310

                New
                  York, NY 10020

                (212)
                  632-4810

              	
                160,000

              	
                160,000

              	
                $200,000

              
	
                Martin
                  Cohen & Soryl Cohen, JT TEN 

              	
                2532
                  Royal Palm Way

                Weston,
                  FL 33327 

                (954)
                  217-2096

              	
                25,000

              	
                25,000

              	
                $31,250

              
	
                Art
                  Criden 

              	
                1300
                  Tahoe Pines Circle

                Alpharetta,
                  GA 30005 

                (770)
                  640-3931

              	
                80,000

              	
                80,000

              	
                $100,000

              
	
                Chris
                  Damian 

              	
                450
                  Gerona Avenue

                Coral
                  Gables, FL 33146 

                (305)
                  666-0112

              	
                60,000

              	
                60,000

              	
                $75,000

              

      

       

      
        
          
          

        

        
          -34-

          
            

          

        

        
          
          

        

        
          	
                  (1)

                	
                  (2)

                	
                  (3)

                	
                  (4)

                	
                  (5)

                
	
                  Buyer

                	
                  Address
                    and

                  Facsimile
                    Number

                	
                  Number
                    of

                  Common
                    Shares

                	
                  Number
                    of $1.25
                    Warrant Shares

                	
                  Purchase
                    Price

                  $

                

        

      

      
        	
                Geoff
                  Dyer 

              	
                497
                  1st Street West

                Tierra
                  Verde, FL 33715

                (727)
                  456-3122

              	
                40,000

              	
                40,000

              	
                $50,000

              
	
                SME
                  Children LLP

              	
                1290
                  Owl Creek Ranch Road

                Aspen,
                  CO 81611

                (727)
                  347-4527

              	
                160,000

              	
                160,000

              	
                $200,000

              
	
                Paul
                  Fazio 

              	
                11260
                  NW 15th Street

                Plantation,
                  FL 33323

                (800)
                  495-4049

              	
                80,000

              	
                80,000

              	
                $100,000

              
	
                Qualified
                  Compensation Trust

              	
                4685
                  Ponce de Leon Boulevard

                Coral
                  Gables, FL 33146

                (305)
                  667-2115

              	
                40,000

              	
                40,000

              	
                $50,000

              
	
                Jonathan
                  E. Fels 

              	
                4026
                  Island Estates Drive

                Aventura,
                  FL 33160

                (305)
                  567-0682

              	
                80,000

              	
                80,000

              	
                $100,000

              
	
                Benjamin
                  Management Company, LLC

              	
                360
                  West 31st Street

                Suite
                  1000

                New
                  York, NY 10001

                (212)
                  629-3985

              	
                100,000

              	
                100,000

              	
                $125,000

              
	
                Wachovia
                  Bank For the Benefit of Alan Halpert IRA Acct: 39938330

              	
                7282
                  Ballantrae Court

                Boca
                  Raton, FL 33496

                (561)
                  477-9699

              	
                80,000

              	
                80,000

              	
                $100,000

              

      

       

      
        
          
          

        

        
          -35-

          
            

          

        

        
          
          

        

        
          	
                  (1)

                	
                  (2)

                	
                  (3)

                	
                  (4)

                	
                  (5)

                
	
                  Buyer

                	
                  Address
                    and

                  Facsimile
                    Number

                	
                  Number
                    of

                  Common
                    Shares

                	
                  Number
                    of $1.25
                    Warrant Shares

                	
                  Purchase
                    Price

                  $

                

        

      

      
        	
                Michael
                  Hanzman 

              	
                9050
                  Schoolhouse Road

                Coral
                  Gables, FL 33143

                (305)
                  357-9050

              	
                80,000

              	
                80,000

              	
                $100,000

              
	
                Scot
                  Hunter 

              	
                2686
                  Riviera Court

                Weston,
                  FL 33332

                (970)
                  925-2966

              	
                80,000

              	
                80,000

              	
                $100,000

              
	
                Stephen
                  A. Hurwitz 

              	
                2761
                  Oakbrook Manor

                Weston,
                  FL 33332

                (954)
                  358-6293

              	
                60,000

              	
                60,000

              	
                $75,000

              
	
                Alan
                  Jacobson &Jan Hart 

              	
                19416
                  Presidential Way

                Miami,
                  FL 33179

                (305)
                  935-0238

              	
                32,000

              	
                32,000

              	
                $40,000

              
	
                Kent
                  Karpawich 

              	
                34
                  West San Marino Drive

                Miami
                  Beach, FL 33139

                (305)
                  534-9829

              	
                100,000

              	
                100,000

              	
                $125,000

              
	
                Todd
                  Katz 

              	
                213
                  Oakmont Drive

                Blue
                  Bell, PA 19422

                (215)
                  925-7899

              	
                320,000

              	
                320,000

              	
                $400,000

              
	
                Sharon
                  Kaufman 

              	
                3285
                  Cavendish Boulevard

                Suite
                  580

                Montreal,
                  Quebec H4B 2L9

                (514)
                  482-8889

              	
                75,000

              	
                75,000

              	
                $93,750

              

      

       

      
        
          
          

        

        
          -36-

          
            

          

        

        
          
          

        

        
          	
                  (1)

                	
                  (2)

                	
                  (3)

                	
                  (4)

                	
                  (5)

                
	
                  Buyer

                	
                  Address
                    and

                  Facsimile
                    Number

                	
                  Number
                    of

                  Common
                    Shares

                	
                  Number
                    of $1.25
                    Warrant Shares

                	
                  Purchase
                    Price

                  $

                

        

      

      
        	
                Dill
                  Consulting LLC

              	
                5606
                  Vintage Oaks Terrace

                Delray
                  Beach, FL 33484 

                (970)
                  925-1841

              	
                312,000

              	
                312,000

              	
                $390,000

              
	
                Dan
                  Kleiman 

              	
                3920
                  Island Estates Drive

                Aventura,
                  FL 33160

                (305)
                  935-2428

              	
                40,000

              	
                40,000

              	
                $50,000

              
	
                SGL
                  Investments Limited Partnership 1

              	
                140
                  Fountain Parkway

                Suite
                  420

                St.
                  Petersburg, FL 33716 

                (727)
                  456-2021

              	
                160,000

              	
                160,000

              	
                $200,000

              
	
                Alan
                  B. Levan, Trustee 

              	
                2100
                  West Cypress Creed Road

                Ft.
                  Lauderdale, FL 33309 

                (954)
                  940-5040

              	
                200,000

              	
                200,000

              	
                $250,000

              
	
                Baruch
                  (Bruce)Levy 

              	
                2843
                  Executive Park Drive

                Weston,
                  FL 33331 

                (954)
                  385-6765

              	
                100,000

              	
                100,000

              	
                $125,000

              
	
                Michael
                  Levy 

              	
                802
                  Spinnaker Drive East

                Hollywood,
                  FL 33109 

                (954)
                  457-2599

              	
                80,000

              	
                80,000

              	
                $100,000

              
	
                William
                  Loughman 

              	
                1740
                  Kingsley Court

                Lawrenceville,
                  GA 30042 

                (770)
                  279-3143

              	
                40,000

              	
                40,000

              	
                $50,000

              

      

       

      
        
          
          

        

        
          -37-

          
            

          

        

        
          
          

        

        
          	
                  (1)

                	
                  (2)

                	
                  (3)

                	
                  (4)

                	
                  (5)

                
	
                  Buyer

                	
                  Address
                    and

                  Facsimile
                    Number

                	
                  Number
                    of

                  Common
                    Shares

                	
                  Number
                    of $1.25
                    Warrant Shares

                	
                  Purchase
                    Price

                  $

                

        

      

      
        	
                Kevin
                  Love 

              	
                8150
                  SW 143 Street

                Miami,
                  FL 33158 

                (305)
                  357-9050

              	
                40,000

              	
                40,000

              	
                $50,000

              
	
                William
                  Matz Revocable Living Trust u/a Dated 9/15/97

              	
                3482
                  Derby Lane

                Weston,
                  FL 33331 

                (954)
                  384-6288

              	
                100,000

              	
                100,000

              	
                $125,000

              
	
                Quantuck
                  Advisors, LLC

              	
                300
                  East Randolph Street

                Suite
                  2810

                Chicago,
                  IL 60601 

                (312)
                  261-5271

              	
                80,000

              	
                80,000

              	
                $100,000

              
	
                MOKO
                  Investments, LLC

              	
                5966
                  Pinewood Avenue

                Parkland,
                  FL 33067 

                (561)
                  750-4069

              	
                80,000

              	
                80,000

              	
                $100,000

              
	
                Brett
                  Overman 

              	
                19501
                  West Country Club Drive

                TS-5

                Aventura,
                  FL 33180 

                (870)
                  972-6906

              	
                240,000

              	
                240,000

              	
                $300,000

              
	
                TOP,
                  Inc.

              	
                17375
                  Collins Avenue # 2503

                Sunny
                  Isles Beach, FL 33160 

                (305)
                  940-7288

              	
                40,000

              	
                40,000

              	
                $50,000

              
	
                Scott
                  Peck 

              	
                27
                  Diamond Drive

                New
                  Town, PA 18940 

                (215)
                  322-6191

              	
                12,000

              	
                12,000

              	
                $15,000

              

      

       

      
        
          
          

        

        
          -38-

          
            

          

        

        
          
          

        

        
          	
                  (1)

                	
                  (2)

                	
                  (3)

                	
                  (4)

                	
                  (5)

                
	
                  Buyer

                	
                  Address
                    and

                  Facsimile
                    Number

                	
                  Number
                    of

                  Common
                    Shares

                	
                  Number
                    of $1.25
                    Warrant Shares

                	
                  Purchase
                    Price

                  $

                

        

      

      
        	
                Scott
                  A. Poulin Revocable Trust

              	
                3130
                  Kirk Street

                Coconut
                  Grove, FL 33133 

                (305)
                  476-0684

              	
                20,000

              	
                20,000

              	
                $25,000

              
	
                Buddy
                  Puder 

              	
                1000
                  Two Creeks Drive

                Snowmass
                  Village, CO 81615 

                (970)
                  922-0700

              	
                40,000

              	
                40,000

              	
                $50,000

              
	
                Michael
                  Puder 

              	
                5324
                  Princeton Way 

                Boca
                  Raton, FL 33496 

                (970)
                  922-0700

              	
                120,000

              	
                120,000

              	
                $150,000

              
	
                Laura
                  K. Pugliese 

              	
                101
                  Pineapple Grove Way

                Delray
                  Beach, FL 33444 

                (561)
                  330-7001

              	
                40,000

              	
                40,000

              	
                $50,000

              
	
                Anthony
                  V. Pugliese, III 

              	
                101
                  Pineapple Grove Way

                Delray
                  Beach, FL 33444 

                (561)
                  330-7001

              	
                120,000

              	
                120,000

              	
                $150,000

              
	
                Beverly
                  Raphael 

              	
                2124
                  West Maya Palm

                Boca
                  Raton, FL 33432 

                (561)
                  394-9485

              	
                20,000

              	
                20,000

              	
                $25,000

              
	
                Ratner
                  Companies

              	
                1577
                  Springhill Road

                Suite
                  500

                Vienna,
                  VA 22182

                (703)
                  848-2143

              	
                80,000

              	
                80,000

              	
                $100,000

              

      

       

      
        
          
          

        

        
          -39-

          
            

          

        

        
          
          

        

        
          	
                  (1)

                	
                  (2)

                	
                  (3)

                	
                  (4)

                	
                  (5)

                
	
                  Buyer

                	
                  Address
                    and

                  Facsimile
                    Number

                	
                  Number
                    of

                  Common
                    Shares

                	
                  Number
                    of $1.25
                    Warrant Shares

                	
                  Purchase
                    Price

                  $

                

        

      

      
        	
                Steve
                  Rattner And Debra Rattner, Joint Tenants

              	
                2467
                  Provence Circle

                Weston,
                  FL 33327

                (954)
                  385-4701

              	
                40,000

              	
                40,000

              	
                $50,000

              
	
                Dwight
                  Richert 

              	
                83
                  East Fork Lane

                Snowmass
                  Village, CO 81615

                (970)
                  923-6277

              	
                40,000

              	
                40,000

              	
                $50,000

              
	
                Scott
                  Robins 

              	
                230
                  Fifth Street

                Miami
                  Beach, FL 33139

                (305)
                  674-0619

              	
                80,000

              	
                80,000

              	
                $100,000

              
	
                Herman
                  Rush 

              	
                2222
                  Avenue of the Stars, #1604 E

                Los
                  Angeles, CA 90067 

                (310)
                  581-1611

              	
                40,000

              	
                40,000

              	
                $50,000

              
	
                Scott
                  Schlesinger 

              	
                201
                  Ocean Boulevard

                Ocean
                  Beach, FL 33160 

                (954)
                  523-4803

              	
                160,000

              	
                160,000

              	
                $200,000

              
	
                Brent
                  Sembler 

              	
                5858
                  Central Avenue

                St.
                  Petersburg, FL 33707 

                (727)
                  343-4272

              	
                80,000

              	
                80,000

              	
                $100,000

              
	
                Jay
                  Shapiro 

              	
                10102
                  S.W. 57th Court

                Pinecrest,
                  FL 33156 

                (305)
                  789-3395

              	
                40,000

              	
                40,000

              	
                $50,000

              

      

       

      
        
          
          

        

        
          -40-

          
            

          

        

        
          
          

        

        
          	
                  (1)

                	
                  (2)

                	
                  (3)

                	
                  (4)

                	
                  (5)

                
	
                  Buyer

                	
                  Address
                    and

                  Facsimile
                    Number

                	
                  Number
                    of

                  Common
                    Shares

                	
                  Number
                    of $1.25
                    Warrant Shares

                	
                  Purchase
                    Price

                  $

                

        

      

      
        	
                GHS
                  Holdings Limited Partnership

              	
                552
                  North Island Drive

                Golden
                  Beach, FL 33160 

                (305)
                  692-7700

              	
                160,000

              	
                160,000

              	
                $200,000

              
	
                Barry
                  E. Somerstein 

              	
                2555
                  Lucille Drive

                Ft.
                  Lauderdale, FL 33316 

                (954)
                  333-4005

              	
                80,000

              	
                80,000

              	
                $100,000

              
	
                Justin
                  A. Stanley, Jr. 

              	
                115
                  Fuller Lane

                Winnetka,
                  IL 60093 

                (312)
                  245-5033

              	
                80,000

              	
                80,000

              	
                $100,000

              
	
                J.
                  Kenneth Tate 

              	
                4500
                  North Hills Drive

                Hollywood,
                  FL 33021 

                (305)
                  891-6750

              	
                80,000

              	
                80,000

              	
                $100,000

              
	
                James
                  D. Tate 

              	
                12855
                  Biscayne Bay Drive

                North
                  Miami, FL 33181

                (305)
                  891-6750

              	
                160,000

              	
                160,000

              	
                $200,000

              
	
                Stanley
                  G. Tate 

              	
                1175
                  Northeast 125th Street

                North
                  Miami, FL 33161

                (305)
                  891-6750

              	
                120,000

              	
                120,000

              	
                $150,000

              
	
                Sushayla
                  Ure 

              	
                737
                  Crescent Way

                Weston,
                  FL 33326

              	
                20,000

              	
                20,000

              	
                $25,000

              
	
                Bayview
                  Partners

              	
                1218
                  Webster Street

                Houston,
                  TX 77002

                (713)
                  289-6290

              	
                120,000

              	
                120,000

              	
                $150,000

              

      

       

      
        
          
          

        

        
          -41-

          
            

          

        

        
          
          

        

        
          	
                  (1)

                	
                  (2)

                	
                  (3)

                	
                  (4)

                	
                  (5)

                
	
                  Buyer

                	
                  Address
                    and

                  Facsimile
                    Number

                	
                  Number
                    of

                  Common
                    Shares

                	
                  Number
                    of $1.25
                    Warrant Shares

                	
                  Purchase
                    Price

                  $

                

        

      

      
        	
                Fremernat,
                  Inc.

              	
                #1
                  Evergreen Avenue

                Key
                  West, FL 33040

                (305)
                  292-8988

              	
                160,000

              	
                160,000

              	
                $200,000

              
	
                Rick
                  Walker 

              	
                501
                  Golden Isle Drive

                Suite
                  205A

                Hallandale,
                  FL 33009

                (954)
                  458-2872

              	
                80,000

              	
                80,000

              	
                $100,000

              
	
                Rick
                  Wilber 

              	
                10360
                  Kestrel Street

                Plantation,
                  FL 33324

                (954)
                  472-7885

              	
                80,000

              	
                80,000

              	
                $100,000

              
	
                Nicholas
                  C. Williams 

              	
                225
                  Dunwoody Drive

                Jonesboro,
                  AR 72404 

                (870)
                  974-506

              	
                40,000

              	
                40,000

              	
                $50,000

              

      

    

    

    
      
        
        

      

      
        -42-

        
          

        

      

      
        
        

      

    

    

    EXHIBITS

    

    
      	
            	Exhibit
              A	
              Form
                of Warrants 

            

    

    
      	
            	Exhibit
              B	
              Form
                of Registration Rights Agreement 

            

    

    
      	
            	Exhibit
              C	
              Form
                of Irrevocable Transfer Agent Instructions

            

    

     

     

    
      
        
        

      

      
        -43-

        
          

        

      

      
        
        

      

    

     

    Schedule
      3(a)

    

    

    

    Subsidiaries

    OVT,
      Inc., a Georgia corporation 

    Ownership:
      100%

    

     

    
      
        
        

      

      
        -44-

        
          

        

      

      
        
        

      

    

    Schedule
      3(i)

    

    

    

    SEC
      Documents; Financial Statements

    

    

    

    As
      of the
      date hereof, the Company has timely filed all SEC Reports, schedules, forms,
      statements and other documents required to be filed by it under the Securities
      Act and the Exchange Act in the last two years other than: (i) Annual Report
      on
      Form 10-KSB for the Year Ended December 31, 2004, which was filed on April
      29,
      2005; (ii) Current Report on From 8-K, which was filed on July 27, 2005; and
      (iii) Quarterly Report on Form 10-QSB for the Quarterly Period Ended June 30,
      2005 which was filed on September 14, 2005.

     

    

    
      
        
        

      

      
        -45-

        
          

        

      

      
        
        

      

       

    

    Schedule
      3(p)

    

    

    

    Equity
      Capitalization

    

    

    

    In
      connection with the Company's November and December 2005 Series A-1 Convertible
      Preferred Stock financing, as of June 28, 2006, warrants to purchase 13,323,332
      shares of Common Stock at exercise prices of $1.75 and $2.00 per share are
      issued and outstanding. As a result of the anti-dilution provisions contained
      in
      such warrants, when this transaction is completed the exercises price of the
      warrants issued in the November and December 2005 financing will be reduced
      to
      $1.25 and the number of shares underlying such warrants shall be increased
      to
      equal the aggregate amount of cash that the Company would have received if
      all
      of the $1.75 warrants and $2.00 warrants were exercised.

    

    

    
      
        
        

      

      
        -46-

        
          

        

      

      
        
        

      

    

    

    

    Schedule
      3(v)

    

    

    

    Intellectual
      Property Rights

    

    

    

    ProNetworkTV,
      Inc. ("PT")
      filed
      a trademark application on May 23, 2005, with the United States Patent and
      Trademarks Office for the mark "SmartVideo" in connection with computer
      communication services, namely communication by electronic computer terminals,
      cellular telephones, electronic on-line services in the nature of providing
      communications links which transfer the website used to web pages via global
      interactive networks for the transfer and transmission of messages, documents,
      images, music, video and data. The Company, however, believes that it owns
      the
      mark "SmartVideo" because it has continuously used the mark in the same channels
      of trade as claimed by PT prior to PT's use of the mark and the filing of PT's
      trademark application.

     

     

     

     

    
      
        
        

      

      
        -47-

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00107-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00107-of-00352.parquet"}]]