Document:

Securities Purchase Agreement

 EXHIBIT 10.1 
  
 SECURITIES PURCHASE AGREEMENT 
  

This Securities Purchase Agreement (this “Agreement”) is dated as of March 3, 2005, among Tripath Technology Inc., a Delaware
corporation (the “Company”), and each purchaser identified on the signature pages hereto (each, including its successors and assigns, a “Purchaser” and collectively the “Purchasers”). 
  
 WHEREAS, subject to the terms and conditions set forth in this Agreement and
pursuant to Section 4(2) of the Securities Act (as defined below), and Rule 506 promulgated thereunder, the Company desires to issue and sell to each Purchaser, and each Purchaser, severally and not jointly, desires to purchase from the Company in
the aggregate, up to $9,000,000 of shares of Common Stock and Warrants on the Closing Date. 
  
 NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement, and for other good and valuable consideration the receipt and adequacy of which are hereby acknowledged, the Company and each
Purchaser agree as follows: 
  
 ARTICLE I. 
 DEFINITIONS 
  
 1.1 Definitions. In addition to the terms defined elsewhere in this Agreement, for all purposes of this Agreement, the following terms have the
meanings indicated in this Section 1.1: 
  
 “Action” shall have the meaning ascribed to such term in Section 3.1(j). 
  
 “Affiliate” means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled
by or is under common control with a Person as such terms are used in and construed under Rule 144. With respect to a Purchaser, any investment fund or managed account that is managed on a discretionary basis by the same investment manager as such
Purchaser will be deemed to be an Affiliate of such Purchaser. 
  
 “Closing” means the closing of the purchase and sale of the Common Stock and the Warrants pursuant to Section 2.1. 
  
 “Closing Date” means the Trading Day when all of the Transaction Documents have been
executed and delivered by the applicable parties thereto, and all conditions precedent to (i) the Purchasers’ obligations to pay the Subscription Amount and (ii) the Company’s obligations to deliver the Securities have been satisfied or
waived. 
  
 “Closing Price”
means on any particular date (a) the last reported closing bid price per share of Common Stock on such date on the Trading Market (as reported by Bloomberg L.P. at 4:15 PM (New York time) as the last reported closing bid price for regular session
trading on such day), or (b) if there is no such price on such date, then the closing bid price on the Trading Market on the date nearest preceding such date (as reported by Bloomberg L.P. at 4:15 PM (New York time) as the closing bid price for
regular session trading on such 

  

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day), or (c) if the Common Stock is not then listed or quoted on the Trading Market and if prices for the Common Stock are then reported in the “pink
sheets” published by the National Quotation Bureau Incorporated (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common Stock so reported, or (d) if the shares of
Common Stock are not then publicly traded the fair market value of a share of Common Stock as determined by an appraiser selected in good faith by the Purchasers of a majority in interest of the Shares then outstanding. 
  
 “Commission” means the Securities and
Exchange Commission. 
  
 “Common
Stock” means the common stock of the Company, par value $0.001 per share, and any other class of securities into which such securities may hereafter have been reclassified or changed into. 
  
 “Common Stock Equivalents” means any
securities of the Company or the Subsidiaries which would entitle the holder thereof to acquire at any time Common Stock, including without limitation, any debt, preferred stock, rights, options, warrants or other instrument that is at any time
convertible into or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock. 
  
 “Company Counsel” means Wilson Sonsini Goodrich & Rosati, P.C. 
  
 “Disclosure Schedules” means the Disclosure
Schedules of the Company delivered concurrently herewith. 
  
 “Effective Date” means the date that the Registration Statement is first declared effective by the Commission. 
  

“Evaluation Date” shall have the meaning ascribed to such term in Section 3.1(r). 
  
 “Exchange Act” means the Securities
Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder. 
  
 “Exempt Issuance” means the issuance of (a) shares of Common Stock or options to employees, officers or directors of the
Company pursuant to any stock or option plan duly adopted by a majority of the non-employee members of the Board of Directors of the Company or a majority of the members of a committee of non-employee directors established for such purpose, (b)
securities upon the exercise of or conversion of any Securities issued hereunder, convertible securities, options or warrants issued and outstanding on the date of this Agreement, provided that such securities have not been amended since the date of
this Agreement to increase the number of such securities or to decrease the exercise or conversion price of any such securities, and (c) securities issued pursuant to acquisitions or strategic transactions, provided any such issuance shall only be
to a Person which is, itself or through its subsidiaries, an operating company in a business synergistic with the business of the Company and in which the Company receives benefits in 

  

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addition to the investment of funds, but shall not include a transaction in which the Company is issuing securities primarily for the purpose of raising
capital or to an entity whose primary business is investing in securities. 
  
 “FW” means Feldman Weinstein LLP with offices located at 420 Lexington Avenue, Suite 2620, New York, New York 10170-0002. 
  
 “GAAP” shall have the meaning ascribed to such term in Section 3.1(h). 
  
 “Intellectual Property Rights” shall have
the meaning ascribed to such term in Section 3.1(o). 
  
 “Legend Removal Date” shall have the meaning ascribed to such term in Section 4.1(c). 
  
 “Liens” means a lien, charge, security interest, encumbrance, right of first refusal, preemptive right or other
restriction. 
  
 “Material Adverse
Effect” shall have the meaning ascribed to such term in Section 3.1(b). 
  
 “Material Permits” shall have the meaning ascribed to such term in Section 3.1(m). 
  
 “Participation Maximum” shall have the
meaning ascribed to such term in Section 4.13. 
  
 “Per Share Purchase Price” equals $0.90, subject to adjustment for reverse and forward stock splits, stock dividends, stock combinations and other similar transactions of the Common Stock that occur after the date of this
Agreement and prior to the Closing Date. 
  
 “Person” means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or
other entity of any kind. 
  
 “Pre-Notice” shall have the meaning ascribed to such term in Section 4.13. 
  
 “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. 
  
 “Purchaser Party” shall have the meaning ascribed to such term in Section 4.9. 
  
 “Registration Rights Agreement” means the
Registration Rights Agreement, dated as of the date of this Agreement, among the Company and each Purchaser, in the form of Exhibit A hereto. 
  

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 “Registration Statement” means a registration statement meeting the
requirements set forth in the Registration Rights Agreement and covering the resale by the Purchasers of the Shares and the Warrant Shares. 
  
 “Required Approvals” shall have the meaning ascribed to such term in Section 3.1(e). 
  
 “Rule 144” means Rule 144 promulgated by
the Commission 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 Commission having substantially the same effect as such Rule. 
  
 “SEC Reports” shall have the meaning
ascribed to such term in Section 3.1(h). 
  
 “Securities” means the Shares, the Warrants and the Warrant Shares. 
  
 “Securities Act” means the Securities Act of 1933, as amended. 
  
 “Shares” means the shares of Common Stock
issued or issuable to each Purchaser pursuant to this Agreement. 
  
 “Short Sales” shall include all “short sales” as defined in Rule 200 of Regulation SHO and any hedging or other transaction which is designed or could reasonably be expected to lead to or
result in a disposition of Common Stock held by the Purchaser, including, without limitation, effecting any short sale or having in effect a short position (whether such short sale or short position is against the box and regardless of when such
position was entered into) with respect to the common Stock or with respect to any security (other than a broad-based market basket or index) that includes or derives a significant part of its value from the Common Stock. 
  
 “Subscription Amount” means, as to each
Purchaser, the amounts set forth below such Purchaser’s signature block on the signature page hereto, in United States dollars and in immediately available funds. 
  
 “Subsequent Financing” shall have the meaning ascribed to such term in Section 4.13.

  
 “Subsequent Financing
Notice” shall have the meaning ascribed to such term in Section 4.13. 
  
 “Subsidiary” shall mean the subsidiaries of the Company, if any, listed on Exhibit 21.1 to the Company’s Annual
Transition Report on Form 10-K/T. 
  
 “Trading Day” means a day on which the Common Stock is traded on a Trading Market. 
  
 “Trading Market” means the following markets or exchanges on which the Common Stock is listed or quoted for trading on
the date in question: the American Stock Exchange, 

  

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the New York Stock Exchange, the Nasdaq National Market or the Nasdaq SmallCap Market. 
  
 “Transaction Documents” means this Agreement, the Warrants and the Registration Rights
Agreement and any other documents or agreements executed in connection with the transactions contemplated hereunder. 
  
 “Warrants” means the Common Stock Purchase Warrants, in the form of Exhibit B, delivered to the Purchasers at the
Closing in accordance with Section 2.2(a)(iii) hereof, which warrants shall be exercisable beginning six months and a day from the date of issuance for a term of three years from such initial exercise date and have an exercise price equal to
$1.25, subject to adjustment as provided therein. 
  
 “Warrant Shares” means the shares of Common Stock issuable upon exercise of the Warrants. 
  
 ARTICLE II. 
 PURCHASE AND SALE 
  
 2.1 Closing. On the Closing Date, each Purchaser shall purchase from
the Company, severally and not jointly with the other Purchasers, and the Company shall issue and sell to each Purchaser, (a) a number of Shares equal to such Purchaser’s Subscription Amount divided by the Per Share Purchase Price and (b) the
Warrants as determined pursuant to Section 2.2(a)(iii). The aggregate Subscription Amounts for the Shares sold hereunder shall be up to $9,000,000. Upon satisfaction of the conditions set forth in Sections 2.2 and 2.3, the Closing shall occur at the
offices of FW or such other location as the parties shall mutually agree. 
  
 2.2 Deliveries. 
  
 (a) On the Closing Date, the Company shall deliver or cause to be delivered to each Purchaser the following: 
  
 (i) this Agreement duly executed by the Company; 
  

(ii) a copy of the irrevocable instructions to the Company’s transfer agent instructing the transfer agent to deliver, on an
expedited basis, a certificate evidencing a number of Shares equal to such Purchaser’s Subscription Amount divided by the Per Share Purchase Price, registered in the name of such Purchaser; 
  
 (iii) within 3 Trading Days of the date hereof, a Warrant,
registered in the name of such Purchaser, pursuant to which such Purchaser shall have the right to acquire up to the number of shares of Common Stock equal to 20% of the Shares to be issued to such Purchaser, 
  

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 (iv) the Registration Rights Agreement duly executed by the Company; and 
  
 (v) a legal opinion of Company Counsel, in the form of
Exhibit C attached hereto. 
  
 (b) On the
Closing Date, each Purchaser shall deliver or cause to be delivered to the Company the following: 
  
 (i) this Agreement duly executed by such Purchaser; 
  
 (ii) such Purchaser’s Subscription Amount by wire transfer to the account as specified in writing by
the Company; and 
  
 (iii) the Registration
Rights Agreement duly executed by such Purchaser. 
  
 2.3
Closing Conditions. 
  
 (a) The
obligations of the Company hereunder in connection with the Closing are subject to the following conditions being met: 
  
 (i) the accuracy in all material respects when made and on the Closing Date of the representations and warranties of the Purchasers
contained herein; 
  
 (ii) all obligations,
covenants and agreements of the Purchasers required to be performed at or prior to the Closing Date shall have been performed; and 
  
 (iii) the delivery by the Purchasers of the items set forth in Section 2.2(b) of this Agreement. 
  
 (b) The respective obligations of the Purchasers hereunder
in connection with the Closing are subject to the following conditions being met: 
  
 (i) the accuracy in all material respects on the Closing Date of the representations and warranties of the Company contained herein;

  
 (ii) all obligations, covenants and
agreements of the Company required to be performed at or prior to the Closing Date shall have been performed; 
  
 (iii) the delivery by the Company of the items set forth in Section 2.2(a) of this Agreement; 
  
 (iv) there shall have been no Material Adverse Effect with
respect to the Company since the date hereof; and 
  

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 (v) From the date hereof to the Closing Date, trading in the Common Stock shall not have
been suspended by the Commission (except for any suspension of trading of limited duration agreed to by the Company, which suspension shall be terminated prior to the Closing), and, at any time prior to the Closing Date, trading in securities
generally as reported by Bloomberg Financial Markets shall not have been suspended or limited, or minimum prices shall not have been established on securities whose trades are reported by such service, or on any Trading Market, nor shall a banking
moratorium have been declared either by the United States or New York State authorities nor shall there have occurred any material outbreak or escalation of hostilities or other national or international calamity of such magnitude in its effect on,
or any material adverse change in, any financial market which, in each case, in the reasonable judgment of each Purchaser, makes it impracticable or inadvisable to purchase the Shares at the Closing. 
  
 ARTICLE III. 
 REPRESENTATIONS AND WARRANTIES 
  
 3.1 Representations and Warranties of the Company. Except as set forth under the corresponding section of the Disclosure Schedules which Disclosure Schedules shall be deemed a part hereof, the Company hereby
makes the representations and warranties set forth below to each Purchaser: 
  
 (a) Subsidiaries. The Company owns, directly or indirectly, all of the capital stock or other equity interests of each Subsidiary free and clear of any Liens, and all the issued and outstanding shares of
capital stock of each Subsidiary are validly issued and are fully paid, non-assessable and free of preemptive and similar rights to subscribe for or purchase securities. If the Company has no subsidiaries, then references in the Transaction
Documents to the Subsidiaries will be disregarded. 
  
 (b) Organization and Qualification. The Company and each of the Subsidiaries is an entity duly incorporated or otherwise organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or
organization (as applicable), with the requisite power and authority to own and use its properties and assets and to carry on its business as currently conducted. Neither the Company nor any Subsidiary is in violation or default of any of the
provisions of its respective certificate or articles of incorporation, bylaws or other organizational or charter documents. Each of the Company and the Subsidiaries is duly qualified to conduct business and is in good standing as a foreign
corporation or other entity in each jurisdiction in which the nature of the business conducted or property owned by it makes such qualification necessary, except where the failure to be so qualified or in good standing, as the case may be, could not
have or reasonably be expected to result in (i) a material adverse effect on the legality, validity or enforceability of any Transaction Document, (ii) a material adverse effect on the results of operations, assets, business, prospects or financial
condition of the Company and the Subsidiaries, taken as a whole, or (iii) a material adverse effect on the Company’s ability to perform in any material 

  

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respect on a timely basis its obligations under any Transaction Document (any of (i), (ii) or (iii), a “Material Adverse Effect”) and no
Proceeding has been instituted in any such jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or curtail such power and authority or qualification. 
  
 (c) Authorization; Enforcement. The Company has the requisite corporate power and authority to enter
into and to consummate the transactions contemplated by each of the Transaction Documents and otherwise to carry out its obligations thereunder. The execution and delivery of each of the Transaction Documents by the Company and the consummation by
it of the transactions contemplated thereby have been duly authorized by all necessary action on the part of the Company and no further action is required by the Company in connection therewith other than in connection with the Required Approvals.
Each Transaction Documents has been (or upon delivery will have been) duly executed by the Company and, when delivered in accordance with the terms hereof, will constitute the valid and binding obligation of the Company enforceable against the
Company in accordance with its terms except (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally and (ii) as limited by laws
relating to the availability of specific performance, injunctive relief or other equitable remedies. 
  
 (d) No Conflicts. The execution, delivery and performance of the Transaction Documents by the Company, the issuance and sale of the
Shares and the consummation by the Company of the other transactions contemplated thereby do not and will not (i) conflict with or violate any provision of the Company’s or any Subsidiary’s certificate or articles of incorporation, bylaws
or other organizational or charter documents, or (ii) conflict with, or constitute a default (or an event that with notice or lapse of time or both would become a default) under, result in the creation of any Lien upon any of the properties or
assets of the Company or any Subsidiary, or give to others any rights of termination, amendment, acceleration or cancellation (with or without notice, lapse of time or both) of, any agreement, credit facility, debt or other instrument (evidencing a
Company or Subsidiary debt or otherwise) or other understanding to which the Company or any Subsidiary is a party or by which any property or asset of the Company or any Subsidiary is bound or affected, or (iii) subject to the Required Approvals,
conflict with or result in a violation of any law, rule, regulation, order, judgment, injunction, decree or other restriction of any court or governmental authority to which the Company or a Subsidiary is subject (including federal and state
securities laws and regulations), or by which any property or asset of the Company or a Subsidiary is bound or affected; except in the case of each of clauses (ii) and (iii), such as could not have or reasonably be expected to result in a Material
Adverse Effect. 
  
 (e) Filings, Consents and
Approvals. The Company is not required to obtain any consent, waiver, authorization or order of, give any notice to, or make any filing or registration with, any court or other federal, state, local or other governmental authority or other
Person in connection with the execution, delivery and performance by the Company of the Transaction Documents, other than (i) filings required pursuant to Section 4.4 of this 

  

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Agreement, (ii) the filing with the Commission of the Registration Statement, (iii) application(s) to each applicable Trading Market for the listing of the
Shares and Warrant Shares for trading thereon in the time and manner required thereby, and (iv) the filing of Form D with the Commission and such filings as are required to be made under applicable state securities laws (collectively, the
“Required Approvals”). 
  
 (f)
Issuance of the Securities. The Shares and Warrants are duly authorized and, when issued and paid for in accordance with the Transaction Documents, will be duly and validly issued, fully paid and nonassessable, free and clear of all Liens
imposed by the Company other than restrictions on transfer provided for in the Transaction Documents. The Warrant Shares, when issued in accordance with the terms of the Transaction Documents, will be validly issued, fully paid and nonassessable,
free and clear of all Liens imposed by the Company. The Company has reserved from its duly authorized capital stock the maximum number of shares of Common Stock issuable pursuant to this Agreement and the Warrants. 
  
 (g) Capitalization. Since January 31, 2005, the
Company has not issued any capital stock, other than pursuant to the exercise of employee stock options under the Company’s stock option plans, the issuance of shares of Common Stock to employees pursuant to the Company’s employee stock
purchase plan and pursuant to the conversion or exercise of outstanding Common Stock Equivalents. Except as set forth in the previous sentence, the capitalization of the Company as of January 31, 2005 is as set forth in its Quarterly Report on Form
10-Q filed with the Commission on February 4, 2005. No Person has any right of first refusal, preemptive right, right of participation, or any similar right to participate in the transactions contemplated by the Transaction Documents. Except as set
forth in the SEC Reports and as a result of the purchase and sale of the Securities, there are no outstanding options, warrants, script rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities, rights or
obligations convertible into or exchangeable for, or giving any Person any right to subscribe for or acquire, any shares of Common Stock, or contracts, commitments, understandings or arrangements by which the Company or any Subsidiary is or may
become bound to issue additional shares of Common Stock or Common Stock Equivalents. The issue and sale of the Securities will not obligate the Company to issue shares of Common Stock or other securities to any Person (other than the Purchasers) and
will not result in a right of any holder of Company securities to adjust the exercise, conversion, exchange or reset price under such securities. All of the outstanding shares of capital stock of the Company are validly issued, fully paid and
nonassessable, have been issued in compliance with all federal and state securities laws, and none of such outstanding shares was issued in violation of any preemptive rights or similar rights to subscribe for or purchase securities. No further
approval or authorization of any stockholder, the Board of Directors of the Company or others is required for the issuance and sale of the Shares. There are no stockholders agreements, voting agreements or other similar agreements with respect to
the Company’s capital stock to which the Company is a party or, to the knowledge of the Company, between or among any of the Company’s stockholders. 
  

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 (h) SEC Reports; Financial Statements. The Company has filed all reports,
schedules, forms, statements and other documents required to be filed by it under the Securities Act and the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, for the two years preceding the date hereof (or such shorter period as
the Company was required by law to file such material) (the foregoing materials, including the exhibits thereto and documents incorporated by reference therein, being collectively referred to herein as the “SEC Reports”) on a timely
basis or has received a valid extension of such time of filing and has filed any such SEC Reports prior to the expiration of any such extension. As of their respective dates, the SEC Reports complied in all material respects with the requirements of
the Securities Act and the Exchange Act and the rules and regulations of the Commission promulgated thereunder, and none of the SEC Reports, when filed, contained any untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. The financial statements of the Company included in the SEC Reports comply in all material respects
with applicable accounting requirements and the rules and regulations of the Commission with respect thereto as in effect at the time of filing. Such financial statements have been prepared in accordance with United States generally accepted
accounting principles applied on a consistent basis during the periods involved (“GAAP”), except as may be otherwise specified in such financial statements or the notes thereto and except that unaudited financial statements may not
contain all footnotes required by GAAP, and fairly present in all material respects the financial position of the Company and its consolidated subsidiaries as of and for the dates thereof and the results of operations and cash flows for the periods
then ended, subject, in the case of unaudited statements, to normal, immaterial, year-end audit adjustments. 
  
 (i) Material Changes. Since the date of the latest audited financial statements included within the SEC Reports, except as
specifically disclosed in the SEC Reports, (i) there has been no event, occurrence or development that has had or that could reasonably be expected to result in a Material Adverse Effect, (ii) the Company has not incurred any liabilities (contingent
or otherwise) other than (A) trade payables and accrued expenses incurred in the ordinary course of business consistent with past practice and (B) liabilities not required to be reflected in the Company’s financial statements pursuant to GAAP
or required to be disclosed in filings made with the Commission, (iii) the Company has not altered its method of accounting, (iv) the Company has not declared or made any dividend or distribution of cash or other property to its stockholders or
purchased, redeemed or made any agreements to purchase or redeem any shares of its capital stock and (v) the Company has not issued any equity securities to any officer, director or Affiliate, except pursuant to existing Company stock option plans.
The Company does not have pending before the Commission any request for confidential treatment of information. 
  
 (j) Litigation. Except as set forth under the heading “Legal Proceedings” in the Company’s most recently filed 10-K,
10-K/T or 10-Q, there is no action, suit, inquiry, notice of violation, proceeding or investigation pending or, to the knowledge of the Company, threatened against or affecting the Company, any Subsidiary or any of their respective 

  

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properties before or by any court, arbitrator, governmental or administrative agency or regulatory authority (federal, state, county, local or foreign)
(collectively, an “Action”) which (i) adversely affects or challenges the legality, validity or enforceability of any of the Transaction Documents or the Securities or (ii) could, if there were an unfavorable decision, have or
reasonably be expected to result in a Material Adverse Effect. Except as set forth under the heading “Legal Proceedings” in the Company’s most recently filed 10-K, 10-K/T or 10-Q, neither the Company nor any Subsidiary, nor any
director or officer thereof, is or has been the subject of any Action involving a claim of violation of or liability under federal or state securities laws or a claim of breach of fiduciary duty, and there has not been, and to the knowledge of the
Company, there is not pending or contemplated, any investigation by the Commission involving the Company or any current or former director or officer of the Company. The Commission has not issued any stop order or other order suspending the
effectiveness of any registration statement filed by the Company or any Subsidiary under the Exchange Act or the Securities Act. 
  
 (k) Labor Relations. No material labor dispute exists or, to the knowledge of the Company, is imminent with respect to any of the
employees of the Company which could reasonably be expected to result in a Material Adverse Effect. 
  
 (l) Compliance. Neither the Company nor any Subsidiary (i) is in default under or in violation of (and no event has occurred that
has not been waived that, with notice or lapse of time or both, would result in a default by the Company or any Subsidiary under), nor has the Company or any Subsidiary received notice of a claim that it is in default under or that it is in
violation of, any indenture, loan or credit agreement or any other agreement or instrument to which it is a party or by which it or any of its properties is bound (whether or not such default or violation has been waived), (ii) is in violation of
any order of any court, arbitrator or governmental body, or (iii) is or has been in violation of any statute, rule or regulation of any governmental authority, including without limitation all foreign, federal, state and local laws applicable to its
business except in each case of clause (i), (ii) and (iii) as could not have a Material Adverse Effect. 
  
 (m) Regulatory Permits. The Company and the Subsidiaries possess all certificates, authorizations and permits issued by the
appropriate federal, state, local or foreign regulatory authorities necessary to conduct their respective businesses as described in the SEC Reports, except where the failure to possess such permits could not have or reasonably be expected to result
in a Material Adverse Effect (“Material Permits”), and neither the Company nor any Subsidiary has received any notice of proceedings relating to the revocation or modification of any Material Permit. 
  
 (n) Title to Assets. The Company and the Subsidiaries
have good and marketable title in fee simple to all real property owned by them that is material to the business of the Company and the Subsidiaries and good and marketable title in all personal property owned by them that is material to the
business of the Company and the Subsidiaries, in each case free and clear of all Liens, except for Liens as do not materially affect the value of such 

  

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property and do not materially interfere with the use made and proposed to be made of such property by the Company and the Subsidiaries and Liens for the
payment of federal, state or other taxes, the payment of which is neither delinquent nor subject to penalties. Any real property and facilities held under lease by the Company and the Subsidiaries are held by them under valid, subsisting and
enforceable leases of which the Company and the Subsidiaries are in compliance. 
  
 (o) Patents and Trademarks. To the Company’s knowledge, the Company and the Subsidiaries have, or have rights to use, all
patents, patent applications, trademarks, trademark applications, service marks, trade names, copyrights, licenses and other similar rights necessary or material for use in connection with their respective businesses as described in the SEC Reports
and which the failure to so have could have a Material Adverse Effect (collectively, the “Intellectual Property Rights”). Neither the Company nor any Subsidiary has received a written notice that the Intellectual Property Rights
used by the Company or any Subsidiary violates or infringes upon the rights of any Person. To the knowledge of the Company, all such Intellectual Property Rights are enforceable and there is no existing infringement by another Person of any of the
Intellectual Property Rights of others. 
  
 (p)
Insurance. The Company and the Subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as are prudent and customary in the businesses in which the Company and the
Subsidiaries are engaged, including, but not limited to, directors and officers insurance coverage at least equal to the aggregate Subscription Amount. To the best of Company’s knowledge, such insurance contracts and policies are accurate and
complete. Neither the Company nor any Subsidiary has any reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to
continue its business without a significant increase in cost. 
  
 (q) Transactions With Affiliates and Employees. Except as set forth in the SEC Reports, none of the officers or directors of the Company and, to the knowledge of the Company, none of the employees of the
Company is presently a party to any transaction with the Company or any Subsidiary (other than for services as employees, officers and directors), including any contract, agreement or other arrangement providing for the furnishing of services to or
by, providing for rental of real or personal property to or from, or otherwise requiring payments to or from any officer, director or such employee or, to the knowledge of the Company, any entity in which any officer, director, or any such employee
has a substantial interest or is an officer, director, trustee or partner, in each case in excess of $60,000 other than (i) for payment of salary or consulting fees for services rendered, (ii) reimbursement for expenses incurred on behalf of the
Company and (iii) for other employee benefits, including stock option agreements under any stock option plan of the Company. 
  
 (r) Sarbanes-Oxley; Internal Accounting Controls. The Company is in material compliance with all provisions of the Sarbanes-Oxley
Act of 2002 which are applicable to it 

  

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as of the Closing Date. The Company and the Subsidiaries maintain a system of internal accounting controls sufficient to provide reasonable assurance that
(i) transactions are executed in accordance with management’s general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain asset
accountability, (iii) access to assets is permitted only in accordance with management’s general or specific authorization, and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any differences. The Company has established disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Company and designed such disclosure controls and
procedures to ensure that material information relating to the Company, including its Subsidiaries, is made known to the certifying officers by others within those entities, particularly during the period in which the Company’s most recently
filed periodic report under the Exchange Act, as the case may be, is being prepared. The Company’s certifying officers have evaluated the effectiveness of the Company’s disclosure controls and procedures as of the date prior to the filing
date of the most recently filed periodic report under the Exchange Act (such date, the “Evaluation Date”). The Company presented in its most recently filed periodic report under the Exchange Act the conclusions of the certifying
officers about the effectiveness of the disclosure controls and procedures based on their evaluations as of the Evaluation Date. Since the Evaluation Date, there have been no significant changes in the Company’s internal controls (as such term
is defined in Item 307(b) of Regulation S-K under the Exchange Act) or, to the Company’s knowledge, in other factors that could significantly affect the Company’s internal controls. 
  
 (s) Certain Fees. No brokerage or finder’s fees
or commissions are or will be payable by the Company to any broker, financial advisor or consultant, finder, placement agent, investment banker, bank or other Person with respect to the transactions contemplated by this Agreement. The Purchasers
shall have no obligation with respect to any fees or with respect to any claims made by or on behalf of other Persons for fees of a type contemplated in this Section that may be due in connection with the transactions contemplated by this Agreement.

  
 (t) Private Placement. Assuming the
accuracy of the Purchasers representations and warranties set forth in Section 3.2, no registration under the Securities Act is required for the offer and sale of the Securities by the Company to the Purchasers as contemplated hereby. The issuance
and sale of the Securities hereunder does not contravene the rules and regulations of the Trading Market. 
  
 (u) Investment Company. The Company is not, and is not an Affiliate of, and immediately after receipt of payment for the Shares,
will not be or be an Affiliate of, an “investment company” within the meaning of the Investment Company Act of 1940, as amended. The Company shall conduct its business in a manner so that it will not become subject to the Investment
Company Act. 
  

 -13- 

 (v) Registration Rights. Other than the Purchasers, no Person has any right to
cause the Company to effect the registration under the Securities Act of any securities of the Company. 
  
 (w) Listing and Maintenance Requirements. The Company’s Common Stock is registered pursuant to Section 12(g) of the Exchange
Act, and the Company has taken no action designed to, or which to its knowledge is likely to have the effect of, terminating the registration of the Common Stock under the Exchange Act nor has the Company received any notification that the
Commission is contemplating terminating such registration. The Company has not, in the 12 months preceding the date hereof, received notice from any Trading Market on which the Common Stock is or has been listed or quoted to the effect that the
Company is not in compliance with the listing or maintenance requirements of such Trading Market. 
  
 (x) Application of Takeover Protections. The Company and its Board of Directors have taken all necessary action, if any, in order
to render inapplicable any control share acquisition, business combination, poison pill (including any distribution under a rights agreement) or other similar anti-takeover provision under the Company’s Certificate of Incorporation (or similar
charter documents) or, except for Delaware General Corporate Law Section 203, the laws of its state of incorporation that is or could become applicable to the Purchasers as a result of the Purchasers and the Company fulfilling their obligations or
exercising their rights under the Transaction Documents, including without limitation the Company’s issuance of the Securities and the Purchasers’ ownership of the Securities. 
  
 (y) Disclosure. The Company confirms that, neither the Company nor any other Person acting on its
behalf has provided any of the Purchasers or their agents or counsel with any information that constitutes or might constitute material, non-public information. The Company understands and confirms that the Purchasers will rely on the foregoing
representations and covenants in effecting transactions in securities of the Company. All disclosure provided to the Purchasers regarding the Company, its business and the transactions contemplated hereby, including the Disclosure Schedules to this
Agreement, furnished by or on behalf of the Company with respect to the representations and warranties made herein are true and correct with respect to such representations and warranties 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 light of the circumstances under which they were made, not misleading. The Company acknowledges and agrees that no Purchaser makes or has made any
representations or warranties with respect to the transactions contemplated hereby other than those specifically set forth in Section 3.2 hereof. 
  
 (z) No Integrated Offering. Assuming the accuracy of the Purchasers’ representations and warranties set forth in Section 3.2,
neither the Company, nor any of its affiliates, nor any Person acting on its or their behalf has, directly or indirectly, made any offers or sales of any security or solicited any offers to buy any security, under circumstances that would cause this
offering of the Securities to be integrated with prior offerings by the 

  

 -14- 

 
Company for purposes of the Securities Act or any applicable shareholder approval provisions, including, without limitation, under the rules and regulations
of any Trading Market on which any of the securities of the Company are listed or designated. 
  
 (aa) [RESERVED]. 
  
 (bb) [RESERVED]. 
  
 (cc) Taxes. Except for matters that would not, individually or in the aggregate, have or reasonably be expected to result in a
Material Adverse Effect, the Company and each Subsidiary has filed all necessary federal, state and foreign income and franchise tax returns and has paid or accrued all taxes shown as due thereon, and the Company has no knowledge of a tax deficiency
which has been asserted or threatened against the Company or any Subsidiary. 
  
 (dd) General Solicitation. Neither the Company nor any person acting on behalf of the Company has offered or sold any of the Shares by any form of general solicitation or general advertising. The Company has
offered the Shares for sale only to the Purchasers and certain other “accredited investors” within the meaning of Rule 501 under the Securities Act. 
  

(ee) Foreign Corrupt Practices. Neither the Company, nor to the knowledge of the Company, any agent or other person acting on
behalf of the Company, has (i) directly or indirectly, used any funds for unlawful contributions, gifts, entertainment or other unlawful expenses related to foreign or domestic political activity, (ii) made any unlawful payment to foreign or
domestic government officials or employees or to any foreign or domestic political parties or campaigns from corporate funds, (iii) failed to disclose fully any contribution made by the Company (or made by any person acting on its behalf of which
the Company is aware) which is in violation of law, or (iv) violated in any material respect any provision of the Foreign Corrupt Practices Act of 1977, as amended. 
  
 (ff) Accountants. The Company’s accountants are those persons whose report is set forth in the
Company’s Annual Transition Report on Form 10-K/T. To the Company’s knowledge, such accountants, who the Company expects will express their opinion with respect to the financial statements to be included in the Company’s Annual Report
on Form 10-K for the year ending September 30, 2005, are a registered public accounting firm as required by the Securities Act. 
  
 (gg) Acknowledgment Regarding Purchasers’ Purchase of Shares. The Company acknowledges and agrees that each of the Purchasers
is acting solely in the capacity of an arm’s length purchaser with respect to the Transaction Documents and the transactions contemplated hereby. The Company further acknowledges that no Purchaser is acting as a financial advisor or fiduciary
of the Company (or in any similar capacity) with respect to this Agreement and the transactions contemplated hereby and any advice given by any Purchaser or any of their respective representatives or agents in connection with this Agreement and the
transactions contemplated hereby is merely incidental to the Purchasers’ purchase of the 

  

 -15- 

 
Shares. The Company further represents to each Purchaser that the Company’s decision to enter into this Agreement has been based solely on the
independent evaluation of the transactions contemplated hereby by the Company and its representatives. 
  
 (hh) Acknowledgement Regarding Purchasers’ Trading Activity. Anything in this Agreement or elsewhere herein to the contrary
notwithstanding (except for Section 4.15 hereof), it is understood and agreed by the Company (i) that none of the Purchasers have been asked to agree, nor has any Purchaser agreed, to desist from purchasing or selling, long and/or short, securities
of the Company, or “derivative” securities based on securities issued by the Company or to hold the Securities for any specified term; (ii) that past or future open market or other transactions by any Purchaser, including Short Sales, and
specifically including, without limitation, Short Sales or “derivative” transactions, before or after the closing of this or future private placement transactions, may negatively impact the market price of the Company’s
publicly-traded securities; (iii) that any Purchaser, and counter parties in “derivative” transactions to which any such Purchaser is a party, directly or indirectly, presently may have a “short” position in the Common Stock, and
(iv) that each Purchaser shall not be deemed to have any affiliation with or control over any arm’s length counter-party in any “derivative” transaction. 
  
 3.2 Representations and Warranties of the Purchasers. Each Purchaser hereby, for itself and for no other Purchaser,
represents and warrants as of the date hereof and as of the Closing Date to the Company as follows: 
  
 (a) Organization; Authority. Such Purchaser is an entity duly organized, validly existing and in good standing under the laws of
the jurisdiction of its organization with full right, corporate or partnership power and authority to enter into and to consummate the transactions contemplated by the Transaction Documents and otherwise to carry out its obligations thereunder. The
execution, delivery and performance by such Purchaser of the transactions contemplated by this Agreement have been duly authorized by all necessary corporate or similar action on the part of such Purchaser. Each Transaction Documents to which it is
a party has been duly executed by such Purchaser, and when delivered by such Purchaser in accordance with the terms hereof, will constitute the valid and legally binding obligation of such Purchaser, enforceable against it in accordance with its
terms, except (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, (ii) as limited by laws
relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable law. 
  
 (b) Own Account. Such Purchaser understands that the
Securities are “restricted securities” and have not been registered under the Securities Act or any applicable state securities law and is acquiring the Securities as principal for its own account and not with a view to or for distributing
or reselling such Securities or any part thereof, has no present intention of distributing any of such Securities and has no arrangement or understanding with 

  

 -16- 

 
any other persons regarding the distribution of such Securities (this representation and warranty not limiting such Purchaser’s right to sell the
Securities pursuant to the Registration Statement or otherwise in compliance with applicable federal and state securities laws). Such Purchaser is acquiring the Securities hereunder in the ordinary course of its business. Such Purchaser does not
have any agreement or understanding, directly or indirectly, with any Person to distribute any of the Securities. 
  
 (c) Purchaser Status. At the time such Purchaser was offered the Securities, it was, and at the date hereof it is, and on each date
on which it exercises any Warrants, it will be either: (i) an “accredited investor” as defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7) or (a)(8) under the Securities Act or (ii) a “qualified institutional buyer” as defined in
Rule 144A(a) under the Securities Act. Such Purchaser is not required to be registered as a broker-dealer under Section 15 of the Exchange Act. 
  
 (d) Experience of Such Purchaser. Such Purchaser, either alone or together with its representatives, has such knowledge,
sophistication and experience in business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment in the Securities, and has so evaluated the merits and risks of such investment. Such Purchaser is
able to bear the economic risk of an investment in the Securities and, at the present time, is able to afford a complete loss of such investment. 
  
 (e) General Solicitation. Such Purchaser is not purchasing the Securities as a result of any advertisement, article, notice or
other communication regarding the Securities published in any newspaper, magazine or similar media or broadcast over television or radio or presented at any seminar or any other general solicitation or general advertisement. 
  
 (f) Short Sales. Other than the transaction
contemplated hereunder, such Purchaser has not directly or indirectly, nor has any Person acting on behalf of or pursuant to any understanding with such Purchaser, executed any transaction, including Short Sales (but not including the location
and/or reservation of borrowable shares of Common Stock), in the securities of the Company since the time that such Purchaser first received a term sheet from the Company or any other Person setting forth the material terms of the transactions
contemplated hereunder prior to the date hereof (“Discussion Time”). Notwithstanding the foregoing, in the case of a Purchaser that is a multi-managed investment vehicle whereby separate portfolio managers manage separate portions
of such Purchaser’s assets and the portfolio managers have no direct knowledge of the investment decisions made by the portfolio managers managing other portions of such Purchaser’s assets, the representation set forth above shall only
apply with respect to the portion of assets managed by the portfolio manager that made the investment decision to purchase the Securities covered by this Agreement. 
  
 The Company acknowledges and agrees that each Purchaser does not make or has not made any representations or warranties with
respect to the transactions contemplated hereby other than those specifically set forth in this Section 3.2. 
  

 -17- 

 ARTICLE IV. 
 OTHER AGREEMENTS OF THE PARTIES 
  
 4.1 Transfer Restrictions. 
  
 (a) The Securities may only be disposed of in compliance with state and federal securities laws. In connection with any transfer of Securities other than pursuant to an effective registration statement or Rule 144, to the Company or to an
affiliate of a Purchaser or in connection with a pledge as contemplated in Section 4.1(b), the Company may require the transferor thereof to provide to the Company an opinion of counsel selected by the transferor and reasonably acceptable to the
Company, the form and substance of which opinion shall be reasonably satisfactory to the Company, to the effect that such transfer does not require registration of such transferred Securities under the Securities Act. As a condition of transfer, any
such transferee shall agree in writing to be bound by the terms of this Agreement and shall have the rights of a Purchaser under this Agreement and the Registration Rights Agreement. 
  
 (b) The Purchasers agree to the imprinting, so long as is required by this Section 4.1(b), of a legend on
any of the Securities in the following form: 
  
 THESE SECURITIES
HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND,
ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY. THESE SECURITIES MAY BE PLEDGED IN
CONNECTION WITH A BONA FIDE MARGIN ACCOUNT WITH A REGISTERED BROKER-DEALER OR OTHER LOAN WITH A FINANCIAL INSTITUTION THAT IS AN “ACCREDITED INVESTOR” AS DEFINED IN RULE 501(a) UNDER THE SECURITIES ACT. 
  
 The Company acknowledges and agrees that a Purchaser may
from time to time pledge pursuant to a bona fide margin agreement with a registered broker-dealer or grant a security interest in some or all of the Securities to a financial institution that is an “accredited investor” as defined in Rule
501(a) under the Securities Act and who agrees to be bound by the provisions of this Agreement and the Registration Rights Agreement and, if required under the terms of such arrangement, such Purchaser may transfer pledged or secured Securities to
the pledgees or secured parties. Such a pledge or transfer would not be subject 

  

 -18- 

 
to approval of the Company and no legal opinion of legal counsel of the pledgee, secured party or pledgor shall be required in connection therewith. Further,
no notice shall be required of such pledge. At the appropriate Purchaser’s expense, the Company will execute and deliver such reasonable documentation as a pledgee or secured party of Securities may reasonably request in connection with a
pledge or transfer of the Securities, including, if the Securities are subject to registration pursuant to the Registration Rights Agreement, the preparation and filing of any required prospectus supplement under Rule 424(b)(3) under the Securities
Act or other applicable provision of the Securities Act to appropriately amend the list of Selling Stockholders thereunder. 
  
 (c) Certificates evidencing the Shares and Warrant Shares shall not contain any legend (including the legend set forth in Section 4.1(b)),
(i) following any sale of such Shares or Warrant Shares pursuant to Rule 144, or (ii) if such Shares or Warrant Shares are eligible for sale under Rule 144(k), or (iii) if such legend is not required under applicable requirements of the Securities
Act (including judicial interpretations and pronouncements issued by the Staff of the Commission). The Company shall cause its counsel to issue a legal opinion to the Company’s transfer agent promptly after the Effective Date if required by the
Company’s transfer agent to effect the removal of the legend hereunder. The Company agrees that following the Effective Date or at such time as such legend is no longer required under this Section 4.1(c), it will, no later than three Trading
Days following the delivery by a Purchaser to the Company or the Company’s transfer agent of a certificate representing Shares or Warrant Shares, as the case may be, issued with a restrictive legend (such date, the “Legend Removal
Date”), deliver or cause to be delivered to such Purchaser a certificate representing such Securities that is free from all restrictive and other legends. The Company may not make any notation on its records or give instructions to any
transfer agent of the Company that enlarge the restrictions on transfer set forth in this Section. Certificates for Securities subject to legend removal hereunder shall be transmitted by the transfer agent of the Company to the Purchasers by
crediting the account of the Purchaser’s prime broker with the Depository Trust Company System. 
  
 (d) In addition to such Purchaser’s other available remedies, the Company shall pay to a Purchaser, in cash, as partial liquidated
damages and not as a penalty, for each $1,000 of Shares or Warrant Shares (based on the Closing Price of the Common Stock on the date such Securities are submitted to the Company’s transfer agent) subject to Section 4.1(c), $10 per Trading Day
(increasing to $20 per Trading Day five (5) Trading Days after such damages have begun to accrue) for each Trading Day after second Trading Day following the Legend Removal Date until such certificate is delivered; provided, that the aggregate of
such liquidated damages shall not exceed $330 per $1000 of such Shares or Warrant Shares. Nothing herein shall limit such Purchaser’s right to pursue actual damages for the Company’s failure to deliver certificates representing any
Securities as required by the Transaction Documents, and such Purchaser shall have the right to pursue all remedies available to it at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief.

  

 -19- 

 (e) Each Purchaser, severally and not jointly with the other Purchasers, agrees that the
removal of the restrictive legend from certificates representing Securities as set forth in this Section 4.1 is predicated upon the Company’s reliance that the Purchaser will sell any Securities pursuant to either the registration requirements
of the Securities Act, including any applicable prospectus delivery requirements, or an exemption therefrom. 
  
 4.2 Furnishing of Information. As long as any Purchaser owns Securities, the Company covenants to timely file (or obtain extensions in respect
thereof and file within the applicable grace period) all reports required to be filed by the Company after the date hereof pursuant to the Exchange Act. As long as any Purchaser owns Securities, if the Company is not required to file reports
pursuant to the Exchange Act, it will prepare and furnish to the Purchasers and make publicly available in accordance with Rule 144(c) such information as is required for the Purchasers to sell the Securities under Rule 144. The Company further
covenants that it will take such further action as any holder of Securities may reasonably request, all to the extent required from time to time to enable such Person to sell such Securities without registration under the Securities Act within the
limitation of the exemptions provided by Rule 144. 
  
 4.3
Integration. The Company shall not sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of any security (as defined in Section 2 of the Securities Act) that would be integrated with the offer or sale of the
Securities in a manner that would require the registration under the Securities Act of the sale of the Securities to the Purchasers or that would be integrated with the offer or sale of the Securities for purposes of the rules and regulations of any
Trading Market such that it would require shareholder approval prior to the closing of such other transaction unless shareholder approval is obtained before the closing of such subsequent transaction. 
  
 4.4 Securities Laws Disclosure; Publicity. The Company shall, by 8:30
a.m. Eastern time on the Trading Day following the date hereof, issue a press release, disclosing the material terms of the transactions contemplated hereby, and shall, within one Trading Day thereafter, file a Current Report on Form 8-K attaching
the Transaction Documents thereto. The Company and each Purchaser shall consult with each other in issuing any other press releases with respect to the transactions contemplated hereby, and neither the Company nor any Purchaser shall issue any such
press release or otherwise make any such public statement without the prior consent of the Company, with respect to any press release of any Purchaser, or without the prior consent of each Purchaser, with respect to any press release of the Company,
which consent shall not unreasonably be withheld, except if such disclosure is required by law, in which case the disclosing party shall promptly provide the other party with prior notice of such public statement or communication. Notwithstanding
the foregoing, the Company shall not publicly disclose the name of any Purchaser, or include the name of any Purchaser in any filing with the Commission or any regulatory agency or Trading Market, without the prior written consent of such Purchaser,
except (i) as required by federal securities law in connection with the registration statement contemplated by the Registration Rights Agreement and (ii) to the extent such disclosure is required by law or Trading Market regulations, in which case
the Company shall provide the Purchasers with prior notice of such disclosure permitted under subclause (i) or (ii). 
  

 -20- 

 4.5 Shareholder Rights Plan. No claim will be made or enforced by the Company or, to the knowledge
of the Company, any other Person that any Purchaser is an “Acquiring Person” under any shareholder rights plan or similar plan or arrangement in effect or hereafter adopted by the Company, or that any Purchaser could be deemed to trigger
the provisions of any such plan or arrangement, by virtue of receiving Securities under the Transaction Documents or under any other agreement between the Company and the Purchasers. The Company shall conduct its business in a manner so that it will
not become subject to the Investment Company Act. 
  
 4.6
Non-Public Information. The Company covenants and agrees that neither it nor any other Person acting on its behalf will provide any Purchaser or its agents or counsel with any information that the Company believes constitutes material
non-public information, unless prior thereto such Purchaser shall have executed a written agreement regarding the confidentiality and use of such information. The Company understands and confirms that each Purchaser shall be relying on the foregoing
representations in effecting transactions in securities of the Company. 
  
 4.7 Use of Proceeds. Except as set forth on Schedule 4.7 attached hereto, the Company shall use the net proceeds from the sale of the Securities hereunder for working capital purposes and not for the satisfaction of any
portion of the Company’s debt (other than payment of trade payables in the ordinary course of the Company’s business and prior practices), to redeem any Common Stock or Common Stock Equivalents or to settle any outstanding litigation.

  
 4.8 [RESERVED]. 
  
 4.9 Indemnification of Purchasers. Subject to the provisions of this
Section 4.9, the Company will indemnify and hold the Purchasers and their directors, officers, shareholders, partners, employees and agents (each, a “Purchaser Party”) harmless from any and all losses, liabilities, obligations,
claims, contingencies, damages, costs and expenses, including all judgments, amounts paid in settlements, court costs and reasonable attorneys’ fees and costs of investigation that any such Purchaser Party may suffer or incur as a result of or
relating to any action instituted against a Purchaser, or any of them or their respective Affiliates, by any stockholder of the Company who is not an Affiliate of such Purchaser, with respect to any of the transactions contemplated by the
Transaction Documents (unless such action is based upon a breach of such Purchaser’s representations, warranties or covenants under the Transaction Documents or any agreements or understandings such Purchaser may have with any such stockholder
or any violations by the Purchaser of state or federal securities laws or any conduct by such Purchaser which constitutes fraud, gross negligence, willful misconduct or malfeasance). If any action shall be brought against any Purchaser Party in
respect of which indemnity may be sought pursuant to this Agreement, such Purchaser Party shall promptly notify the Company in writing, and the Company shall have the right to assume the defense thereof with counsel of its own choosing. Any
Purchaser Party shall have the right to employ separate counsel in any such action and participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of such Purchaser Party except to the extent that (i) the
employment thereof has been specifically authorized by the Company in writing, (ii) the Company has failed after a reasonable period of time to assume such defense and to employ counsel or (iii) in such action there is, in the reasonable opinion of
such separate counsel, a material 

  

 -21- 

 
conflict on any material issue between the position of the Company and the position of such Purchaser Party. The Company will not be liable to any Purchaser
Party under this Agreement (i) for any settlement by a Purchaser Party effected without the Company’s prior written consent; or (ii) to the extent, but only to the extent that a loss, claim, damage or liability is attributable to any Purchaser
Party’s breach of any of the representations, warranties, covenants or agreements made by the Purchasers in this Agreement or in the other Transaction Documents. 
  
 4.10 Reservation of Common Stock. As of the date hereof, the Company has reserved and the Company shall continue to
reserve and keep available at all times, free of preemptive rights, a sufficient number of shares of Common Stock for the purpose of enabling the Company to issue Shares pursuant to this Agreement and Warrant Shares pursuant to any exercise of the
Warrants. 
  
 4.11 Listing of Common Stock. The Company
hereby agrees to use its reasonable best efforts to maintain the listing of the Common Stock on a Trading Market, and as soon as reasonably practicable following the Closing (but not later than the earlier of the Effective Date and the first
anniversary of the Closing Date) to list all of the Shares and Warrant Shares on such Trading Market. The Company further agrees, if the Company applies to have the Common Stock traded on any other Trading Market, it will include in such application
all of the Shares and Warrant Shares, and will take such other action as is necessary to cause all of the Shares and Warrant Shares to be listed on such other Trading Market as promptly as possible. The Company will take all action reasonably
necessary to continue the listing and trading of its Common Stock on a Trading Market and will comply in all respects with the Company’s reporting, filing and other obligations under the bylaws or rules of the Trading Market. 
  
 4.12 Equal Treatment of Purchasers. 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 is also offered to all of the parties to the Transaction Documents. For clarification purposes,
this provision constitutes a separate right granted to each Purchaser by the Company and negotiated separately by each Purchaser, and is intended to treat for the Company the Purchasers as a class and shall not in any way be construed as the
Purchasers acting in concert or as a group with respect to the purchase, disposition or voting of Securities or otherwise. 
  
 4.13 [RESERVED] 
  
 4.14 Subsequent Equity Sales. 
  
 (a) From the date hereof until 110 days after the Closing Date, neither the Company nor any Subsidiary shall issue shares of Common Stock
or Common Stock Equivalents. 
  
 (b) From the
date hereof until such time as no Purchaser holds any of the Securities, the Company shall be prohibited from effecting or entering into an agreement to effect any Subsequent Financing involving a “Variable Rate Transaction”. The term
“Variable Rate Transaction” shall mean a transaction in which the Company issues or sells 

  

 -22- 

 
(i) any debt or equity securities that are convertible into, exchangeable or exercisable for, or include the right to receive additional shares of Common
Stock either (A) at a conversion, exercise or exchange rate or other price that is based upon and/or varies with the trading prices of or quotations for the shares of Common Stock at any time after the initial issuance of such debt or equity
securities, or (B) with a conversion, exercise or exchange price that is subject to being reset at some future date after the initial issuance of such debt or equity security or upon the occurrence of specified or contingent events directly or
indirectly related to the business of the Company or the market for the Common Stock or (ii) enters into any agreement, including, but not limited to, an equity line of credit, whereby the Company may sell securities at a future determined price.
Any Purchaser shall be entitled to obtain injunctive relief against the Company to preclude any such issuance, which remedy shall be in addition to any right to collect damages. 
  
 (c) Notwithstanding the foregoing, this Section 4.14 shall not apply in respect of an Exempt Issuance,
except that no Variable Rate Transaction shall be an Exempt Issuance. 
  
 4.15 Short Sales. Each Purchaser covenants that neither it nor any affiliates acting on its behalf or pursuant to any understanding with it will execute any Short Sales during the period after the Discussion Time until prior to the
time that the transactions contemplated by this Agreement are first publicly announced as described in Section 4.4. Notwithstanding the foregoing, no Purchaser makes any representation, warranty or covenant hereby that it will not engage in Short
Sales in the securities of the Company after the time that the transactions contemplated by this Agreement are first publicly announced as described in Section 4.4. Notwithstanding the foregoing, in the case of a Purchaser that is a multi-managed
investment vehicle whereby separate portfolio managers manage separate portions of such Purchaser’s assets and the portfolio managers have no direct knowledge of the investment decisions made by the portfolio managers managing other portions of
such Purchaser’s assets, the covenant set forth above shall only apply with respect to the portion of assets managed by the portfolio manager that made the investment decision to purchase the Securities covered by this Agreement. 
  
 4.16 Delivery of Securities After Closing. The Company shall deliver,
or cause to be delivered, the respective Shares and Warrants purchased by each Purchaser to such Purchaser within 3 Trading Days of the Closing Date. 
  
 ARTICLE V. 
 MISCELLANEOUS 
  
 5.1 Termination. This Agreement may be terminated by any Purchaser, as
to such Purchaser’s obligations hereunder only and without any effect whatsoever on the obligations between the Company and the other Purchasers, by written notice to the other parties, if the Closing has not been consummated on or before March
7, 2005; provided, however, that no such termination will affect the right of any party to sue for any breach by the other party (or parties). 
  
 5.2 Fees and Expenses. The Company shall deliver, prior to the Closing, a completed and executed copy of the Closing Statement, attached hereto as
Annex A. Except as otherwise set 

  

 -23- 

 
forth in this Agreement, each party shall pay the fees and expenses of its advisers, counsel, accountants and other experts, if any, and all other expenses
incurred by such party incident to the negotiation, preparation, execution, delivery and performance of this Agreement. The Company shall pay all stamp and other taxes and duties levied in connection with the delivery of the Securities. 

 
 5.3 Entire Agreement. The Transaction Documents, together with the
exhibits and schedules thereto, contain the entire understanding of the parties with respect to the subject matter hereof and supersede all prior agreements and understandings, oral or written, with respect to such matters, which the parties
acknowledge have been merged into such documents, exhibits and schedules. 
  
 5.4 Notices. Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall be deemed given and effective on the earliest of (a) the date
of transmission, if such notice or communication is delivered via facsimile at the facsimile number set forth on the signature pages attached hereto prior to 5:30 p.m. (New York City time) on a Trading Day, (b) the next Trading Day after the date of
transmission, if such notice or communication is delivered via facsimile at the facsimile number set forth on the signature pages attached hereto on a day that is not a Trading Day or later than 5:30 p.m. (New York City time) on any Trading Day, (c)
the second Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service, or (d) upon actual receipt by the party to whom such notice is required to be given. The address for such notices and
communications shall be as set forth on the signature pages attached hereto. 
  
 5.5 Amendments; Waivers. No provision of this Agreement may be waived or amended except in a written instrument signed, in the case of an amendment, by the Company and each Purchaser or, in the case of a
waiver, by the party against whom enforcement of any such waiver is sought. No waiver of any default with respect to any provision, condition or requirement of this Agreement shall be deemed to be a continuing waiver in the future or a waiver of any
subsequent default or a waiver of any other provision, condition or requirement hereof, nor shall any delay or omission of either party to exercise any right hereunder in any manner impair the exercise of any such right. 
  
 5.6 Headings. The headings herein are for convenience only, do not
constitute a part of this Agreement and shall not be deemed to limit or affect any of the provisions hereof. The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and no rules of
strict construction will be applied against any party. 
  
 5.6
Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors and permitted assigns. The Company may not assign this Agreement or any rights or obligations hereunder without the
prior written consent of each Purchaser. Any Purchaser may assign any or all of its rights under this Agreement to any Person to whom such Purchaser assigns or transfers any Securities, provided such transferee agrees in writing to be bound, with
respect to the transferred Securities, by the provisions hereof that apply to the “Purchasers”. 
  

 -24- 

 5.7 No Third-Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto
and their respective successors and permitted assigns and is not for the benefit of, nor may any provision hereof be enforced by, any other Person, except as otherwise set forth in Section 4.9. 
  
 5.8 Governing Law. All questions concerning the construction,
validity, enforcement and interpretation of the Transaction Documents shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflicts of law thereof. Each
party agrees that all legal proceedings concerning the interpretations, enforcement and defense of the transactions contemplated by this Agreement and any other Transaction Documents (whether brought against a party hereto or its respective
affiliates, directors, officers, shareholders, employees or agents) shall be commenced exclusively in the state and federal courts sitting in the City of New York. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and
federal courts sitting in the City of New York, borough of Manhattan for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement
of any of the Transaction Documents), and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding
is improper or inconvenient venue for such proceeding. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof via registered or certified
mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing
contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. The parties hereby waive all rights to a trial by jury. If either party shall commence an action or proceeding to enforce any provisions
of the Transaction Documents, then the prevailing party in such action or proceeding shall be reimbursed by the other party for its attorneys’ fees and other costs and expenses incurred with the investigation, preparation and prosecution of
such action or proceeding. 
  
 5.9 Survival. The
representations and warranties herein shall survive the Closing and delivery of the Shares and Warrant Shares. 
  
 5.10 Execution. This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same
agreement and shall become effective when counterparts have been signed by each party and delivered to the other party, it being understood that both parties need not sign the same counterpart. In the event that any signature is delivered by
facsimile transmission, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile signature page were an original thereof.

  
 5.11 Severability. If any provision of this Agreement
is held to be invalid or unenforceable in any respect, the validity and enforceability of the remaining terms and provisions of this Agreement shall not in any way be affected or impaired thereby and the parties will attempt to 

  

 -25- 

 
agree upon a valid and enforceable provision that is a reasonable substitute therefor, and upon so agreeing, shall incorporate such substitute provision in
this Agreement. 
  
 5.12 Rescission and Withdrawal Right.
Notwithstanding anything to the contrary contained in (and without limiting any similar provisions of) the Transaction Documents, whenever any Purchaser exercises a right, election, demand or option under a Transaction Documents and the Company does
not timely perform its related obligations within the periods therein provided, then such Purchaser may rescind or withdraw, in its sole discretion from time to time upon written notice to the Company, any relevant notice, demand or election in
whole or in part without prejudice to its future actions and rights. 
  
 5.13 Replacement of Securities. If any certificate or instrument evidencing any Securities is mutilated, lost, stolen or destroyed, the Company shall issue or cause to be issued in exchange and substitution for and upon cancellation
thereof, or in lieu of and substitution therefor, a new certificate or instrument, but only upon receipt of evidence reasonably satisfactory to the Company of such loss, theft or destruction and customary and reasonable indemnity, if requested. The
applicants for a new certificate or instrument under such circumstances shall also pay any reasonable third-party costs associated with the issuance of such replacement Securities. 
  
 5.14 Remedies. In addition to being entitled to exercise all rights provided herein or granted by law, including
recovery of damages, each of the Purchasers and the Company will be entitled to specific performance under the Transaction Documents. The parties agree that monetary damages may not be adequate compensation for any loss incurred by reason of any
breach of obligations described in the foregoing sentence and hereby agrees to waive in any action for specific performance of any such obligation the defense that a remedy at law would be adequate. 
  
 5.15 Payment Set Aside. To the extent that the Company makes a payment
or payments to any Purchaser pursuant to any Transaction Document or a Purchaser enforces or exercises its rights 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. 
  
 5.16 Independent Nature of Purchasers’ Obligations and Rights. The obligations of each Purchaser under any Transaction Document are several
and not joint with the obligations of any other Purchaser, and no Purchaser shall be responsible in any way for the performance of the obligations of any other Purchaser under any Transaction Document. Nothing contained herein or in any Transaction
Document, and no action taken by any Purchaser pursuant thereto, shall be deemed to constitute the Purchasers as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Purchasers are in any way
acting in concert or as a group with respect to such obligations or the transactions contemplated by the Transaction Documents. Each 

  

 -26- 

 
Purchaser shall be entitled to independently protect and enforce its rights, including without limitation, the rights arising out of this Agreement or out of
the other Transaction Documents, and it shall not be necessary for any other Purchaser to be joined as an additional party in any proceeding for such purpose. Each Purchaser has been represented by its own separate legal counsel in their review and
negotiation of the Transaction Documents. For reasons of administrative convenience only, Purchasers and their respective counsel have chosen to communicate with the Company through FW. FW does not represent all of the Purchasers but only Rodman
& Renshaw, who has acted as placement agent to the transaction. The Company has elected to provide all Purchasers with the same terms and Transaction Documents for the convenience of the Company and not because it was required or requested to do
so by the Purchasers. 
  
 5.17 Liquidated Damages. The
Company’s obligations to pay any partial liquidated damages or other amounts owing under the Transaction Documents is a continuing obligation of the Company and shall not terminate until all unpaid partial liquidated damages and other amounts
have been paid notwithstanding the fact that the instrument or security pursuant to which such partial liquidated damages or other amounts are due and payable shall have been canceled. 
  
 5.18 Construction. The parties agree that each of them and/or their respective counsel has reviewed and had an
opportunity to revise the Transaction Documents and, therefore, the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of the Transaction Documents
or any amendments hereto. 
  
 (Signature Page Follows)

  

 -27- 

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

			
	TRIPATH TECHNOLOGY INC.	  	 Address for Notice:
  
 Tripath Technology Inc.
 2560 Orchard
Parkway
 San Jose, CA 95131
  
 Phone: 408 750-3000
 Fax: 408 750-3001

  

			
		
	By:	 	 /s/ Jeffrey L. Garon

	 	 	 Name: Jeffrey L. Garon

	 	 	 Title: Vice President and Chief Financial Officer

  
 With a copy to (which shall not
constitute notice): 
  
 David J. Segre 
 Bret M. DiMarco 
 Wilson Sonsini Goodrich & Rosati, P.C. 
 650 Page Mill Road 
 Palo Alto, CA 94304-1050 
  
 Phone: 650 493-9300 
 Fax: 650 496-4367  
  
 [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK 
 SIGNATURE PAGES FOR PURCHASERS FOLLOW] 
  

 -28- 

 [PURCHASER SIGNATURE PAGES TO TRPH SECURITIES PURCHASE AGREEMENT] 
  
 IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of the date first indicated above. 
  

					
	 Name of Purchaser:
	  	 Alpha Capital
	  	 
			
	Signature of Authorized Signatory of Purchaser:	  	 /s/Konrad Ackermann
	  	 
	 Name of Authorized Signatory:
	  	 Konrad Ackermann
	  	 
	 Title of Authorized Signatory:
	  	 Director
	  	 

  

				
	 Subscription Amount:
	  	$	250,000
	 Shares:
	  	 	277,778
	 Warrant Shares:
	  	 	55,556

  

 -29- 

 [PURCHASER SIGNATURE PAGES TO TRPH SECURITIES PURCHASE AGREEMENT] 
  
 IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of the date first indicated above. 
  

					
	 Name of Purchaser:
	  	 AS Capital Partners, LLC
	  	 
			
	Signature of Authorized Signatory of Purchaser:	  	 /s/ Michael Coughlan
	  	 
	 Name of Authorized Signatory:
	  	 Michael Coughlan
	  	 
	 Title of Authorized Signatory:
	  	 CFD
	  	 

  

				
	 Subscription Amount:
	  	$	50,000
	 Shares:
	  	 	55,555
	 Warrant Shares:
	  	 	11,111

  

 -30- 

 [PURCHASER SIGNATURE PAGES TO TRPH SECURITIES PURCHASE AGREEMENT] 
  
 IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of the date first indicated above. 
  

					
	 Name of Purchaser:
	  	 Basso Private Opportunity Holding Fund, Ltd.

			
	Signature of Authorized Signatory of Purchaser:	  	 /s/ Howard I. Fischer
	  	 
	 Name of Authorized Signatory:
	  	 Howard I. Fischer
	  	 
	 Title of Authorized Signatory:
	  	 Authorized Signatory
	  	 

  

				
	 Subscription Amount:
	  	$	22,000
	 Shares:
	  	 	24,444
	 Warrant Shares:
	  	 	4,889

  

 -31- 

 [PURCHASER SIGNATURE PAGES TO TRPH SECURITIES PURCHASE AGREEMENT] 
  
 IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of the date first indicated above. 
  

					
	 Name of Purchaser:
	  	 Basso Multi-Strategy Holding Fund Ltd.

			
	Signature of Authorized Signatory of Purchaser:	  	 /s/ Howard I. Fischer
	  	 
	 Name of Authorized Signatory:
	  	 Howard I. Fischer
	  	 
	 Title of Authorized Signatory:
	  	 Authorized Signatory
	  	 

  

				
	 Subscription Amount:
	  	$	78,000
	 Shares:
	  	 	86,667
	 Warrant Shares:
	  	 	17,333

  

 -32- 

 [PURCHASER SIGNATURE PAGES TO TRPH SECURITIES PURCHASE AGREEMENT] 
  
 IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of the date first indicated above. 
  

					
	 Name of Purchaser:
	  	 Bristol Investment Fund, Ltd.

			
	Signature of Authorized Signatory of Purchaser:	  	 /s/ Paul Kessler
	  	 
	 Name of Authorized Signatory:
	  	 Paul Kessler
	  	 
	 Title of Authorized Signatory:
	  	 Director
	  	 

  

				
	 Subscription Amount:
	  	$	150,000
	 Shares:
	  	 	166,667
	 Warrant Shares:
	  	 	33,333

  

 -33- 

 [PURCHASER SIGNATURE PAGES TO TRPH SECURITIES PURCHASE AGREEMENT] 
  
 IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of the date first indicated above. 
  

					
	 Name of Purchaser:
	  	 Cranshire Capital, LP

			
	Signature of Authorized Signatory of Purchaser:	  	 /s/ Lawrence A. Presser
	  	 
	 Name of Authorized Signatory:
	  	 Lawrence A. Presser
	  	 
	 Title of Authorized Signatory:
	  	 CFO – Cranshire Capital, Inc. – The General Partner

  

				
	 Subscription Amount:
	  	$	500,000
	 Shares:
	  	 	555,556
	 Warrant Shares:
	  	 	111,111

  

 -34- 

 [PURCHASER SIGNATURE PAGES TO TRPH SECURITIES PURCHASE AGREEMENT] 
  
 IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of the date first indicated above. 
  

							
	 Name of Purchaser:
	  	 Crescent International Ltd.
	  	 	  	 
				
	Signature of Authorized Signatory of Purchaser:	  	 /s/ Mel Craw
	  	 	  	 /s/ Maxi Brezzi

	 Name of Authorized Signatory:
	  	 Mel Craw
	  	 	  	 Maxi Brezzi

	 Title of Authorized Signatory:
	  	 Authorized Signatory

  

				
	 Subscription Amount:
	  	$	450,000
	 Shares:
	  	 	500,000
	 Warrant Shares:
	  	 	100,000

  

 -35- 

 [PURCHASER SIGNATURE PAGES TO TRPH SECURITIES PURCHASE AGREEMENT] 
  
 IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of the date first indicated above. 
  

					
	 Name of Purchaser:
	  	 Enable Growth Partners LP

			
	Signature of Authorized Signatory of Purchaser:	  	 /s/ Brendan O’Neil
	  	 
	 Name of Authorized Signatory:
	  	 Brendan O’Neil
	  	 
	 Title of Authorized Signatory:
	  	 Principal
	  	 

  

				
	 Subscription Amount:
	  	$	250,000
	 Shares:
	  	 	277,778
	 Warrant Shares:
	  	 	55,556

  

 -36- 

 [PURCHASER SIGNATURE PAGES TO TRPH SECURITIES PURCHASE AGREEMENT] 
  
 IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of the date first indicated above. 
  

					
	 Name of Purchaser:
	  	 Lindsey A. Rosenwald, MD

			
	Signature of Authorized Signatory of Purchaser:	  	 Lindsey A. Rosenwald
	  	 
	 Name of Authorized Signatory:
	  	 Lindsey A. Rosenwald
	  	 
	 Title of Authorized Signatory:
	  	 	  	 

  

				
	 Subscription Amount:
	  	$	100,000
	 Shares:
	  	 	111,111
	 Warrant Shares:
	  	 	22,222

  

 -37- 

 [PURCHASER SIGNATURE PAGES TO TRPH SECURITIES PURCHASE AGREEMENT] 
  
 IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of the date first indicated above. 
  

					
	 Name of Purchaser:
	  	 Nite Capital, LP

			
	Signature of Authorized Signatory of Purchaser:	  	 /s/ Ken Wruk
	  	 
	 Name of Authorized Signatory:
	  	 Ken Wruk
	  	 
	 Title of Authorized Signatory:
	  	 Managing Partner
	  	 

  

				
	 Subscription Amount:
	  	$	550,000
	 Shares:
	  	 	611,111
	 Warrant Shares:
	  	 	122,222

  

 -38- 

 [PURCHASER SIGNATURE PAGES TO TRPH SECURITIES PURCHASE AGREEMENT] 
  
 IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of the date first indicated above. 
  

					
	 Name of Purchaser:
	  	 Omicron Master Trust

			
	Signature of Authorized Signatory of Purchaser:	  	 /s/ Olivier Morali
	  	 
	 Name of Authorized Signatory:
	  	 Olivier Morali
	  	 
	 Title of Authorized Signatory:
	  	 President, Omicron Capital, Inc., General Partner of Investment Adviser

  

				
	 Subscription Amount:
	  	$	250,000
	 Shares:
	  	 	277,778
	 Warrant Shares:
	  	 	55,556

  

 -39- 

 [PURCHASER SIGNATURE PAGES TO TRPH SECURITIES PURCHASE AGREEMENT] 
  
 IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of the date first indicated above. 
  

					
	 Name of Purchaser:
	  	 Portside Growth and Opportunity Fund

			
	Signature of Authorized Signatory of Purchaser:	  	 /s/ Morgan Stark
	  	 
	 Name of Authorized Signatory:
	  	 Morgan Stark
	  	 
	 Title of Authorized Signatory:
	  	 Authorized Signatory
	  	 

  

				
	 Subscription Amount:
	  	$	100,000
	 Shares:
	  	 	111,112
	 Warrant Shares:
	  	 	22,222

  

 -40- 

 [PURCHASER SIGNATURE PAGES TO TRPH SECURITIES PURCHASE AGREEMENT] 
  
 IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of the date first indicated above. 
  

					
	 Name of Purchaser:
	 	 TCMP3 Partners L.P.
	  	 
			
	Signature of Authorized Signatory of Purchaser:	 	 /s/ Walter Schenker
	  	 
	 Name of Authorized Signatory:
	 	 Walter Schenker
	  	 
	 Title of Authorized Signatory:
	 	 Principal
	  	 

  

				
	 Subscription Amount:
	  	$	250,000
	 Shares:
	  	 	277,778
	 Warrant Shares:
	  	 	55,555

  

 -41- 

 [PURCHASER SIGNATURE PAGES TO TRPH SECURITIES PURCHASE AGREEMENT] 
  
 IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of the date first indicated above. 
  

					
	 Name of Purchaser:
	 	 The Tail Wind Fund Ltd.
	  	 
			
	Signature of Authorized Signatory of Purchaser:	 	 /s/ David Crook
	  	 
	 Name of Authorized Signatory:
	 	 David Crook
	  	 
	 Title of Authorized Signatory:
	 	 CEO of Investment Manage
	  	 

  

				
	 Subscription Amount:
	  	$	500,000
	 Shares:
	  	 	555,555
	 Warrant Shares:
	  	 	111,111

  

 -42- 

 [PURCHASER SIGNATURE PAGES TO TRPH SECURITIES PURCHASE AGREEMENT] 
  
 IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of the date first indicated above. 
  

					
	 Name of Purchaser:
	 	 Truk International Fund, LP
	  	 
			
	Signature of Authorized Signatory of Purchaser:	 	 /s/ Michael E. Fein
	  	 
	 Name of Authorized Signatory:
	 	 Michael E. Fein
	  	 
	 Title of Authorized Signatory:
	 	 Principal
	  	 

  

				
	 Subscription Amount:
	  	$	36,000
	 Shares:
	  	 	40,000
	 Warrant Shares:
	  	 	8,000

  

 -43- 

 [PURCHASER SIGNATURE PAGES TO TRPH SECURITIES PURCHASE AGREEMENT] 
  
 IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of the date first indicated above. 
  

					
	 Name of Purchaser:
	 	 Truk Opportunity Fund, LLC
	  	 
			
	Signature of Authorized Signatory of Purchaser:	 	 Michael E. Fein
	  	 
	 Name of Authorized Signatory:
	 	 Michael E. Fein
	  	 
	 Title of Authorized Signatory:
	 	 Principal
	  	 

  

				
	 Subscription Amount:
	  	$	564,000
	 Shares:
	  	 	626,667
	 Warrant Shares:
	  	 	125,334

  

 -44- 

 [PURCHASER SIGNATURE PAGES TO TRPH SECURITIES PURCHASE AGREEMENT] 
  
 IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of the date first indicated above. 
  

					
	 Name of Purchaser:
	 	 Whalehaven Capital Fund Limited
	  	 
			
	Signature of Authorized Signatory of Purchaser:	 	 /s/ Evan Schemananer
	  	 
	 Name of Authorized Signatory:
	 	 Evan Schemananer
	  	 
	 Title of Authorized Signatory:
	 	 Director
	  	 

  

				
	 Subscription Amount:
	  	$	250,000
	 Shares:
	  	 	277,778
	 Warrant Shares:
	  	 	55,556

  

 -45- 

 Annex A 
  
 CLOSING STATEMENT 
  
 Pursuant to the attached Securities Purchase Agreement, dated as of the date hereto, the purchasers shall purchase up to $9,000,000 of Common Stock and Warrants from
Tripath Technology Inc. (the “Company”). All funds will be wired into a trust account maintained by Wilson Sonsini Goodrich & Rosati, P.C., counsel to the Company. All funds will be disbursed in accordance with this Closing
Statement. 
  
 Disbursement Date: March
    , 2005 
  

				
	I. PURCHASE PRICE	  	 	 
		
	 Gross Proceeds to be Received in Trust
	  	$	                    
		
	II. DISBURSEMENTS	  	 	 
		
	 	  	$	                    
	 	  	$	                    
	 	  	$	                    
	 	  	$	                    
	 	  	$	                    
	 Total Amount Disbursed:
	  	$	                    

  

			
	WIRE INSTRUCTIONS:
		
	To:	 	 
		
	To:	 	 

  

 -46- 

 TRIPATH TECHNOLOGY INC. 
  
 DISCLOSURE SCHEDULE 
  
 This Disclosure Schedule is made and given pursuant to Section 3.1 of the Securities Purchase Agreement, dated March 3, 2005 (the
“Agreement”), among Tripath Technology Inc. (the “Company”) and the other signatories thereto. All capitalized terms used but not defined herein shall have the meanings as defined in the Agreement, unless otherwise
provided. The section numbers below correspond to the section numbers of the representations and warranties in the Agreement; provided, however, that any information disclosed herein under any section number shall be deemed to be disclosed and
incorporated into any other section number under the Agreement where such disclosure would be reasonably applicable. 
  
 This Disclosure Schedule shall be deemed to form part of the representations and warranties made by the Company under Section 3.1 of the Agreement but is
not otherwise intended to broaden the scope of any representation or warranty contained in the Agreement or to create any additional covenant. Inclusion of any item in this Disclosure Schedule (1) does not represent a determination that such item is
material or establish a standard of materiality, (2) does not represent a determination that such item did not arise in the ordinary course of business, (3) does not represent a determination that the transactions contemplated by the Agreement
require the consent of third parties, and (4) shall not constitute, or be deemed to be, an admission to any third party concerning such item. This Disclosure Schedule includes brief descriptions or summaries of certain agreements and instruments,
copies of which are available upon reasonable request. Such descriptions do not purport to be comprehensive, and are qualified in their entirety by reference to the text of the documents described. 
  

 -47- 

 Schedule 3.1(g) 
  
 On February 22, 2005, the Compensation Committee of the Board of Directors approved option grants to the following individuals in the following amounts: 
  

			
	 Jeffrey Garon
	  	350,000
	 George Fang
	  	150,000
	 John DeCelles
	  	75,000

  
 Schedule 3.1(h) 
  
 The Company did not file on a timely basis the Form 8-K dated October 22, 2004 (filed with
the Commission on October 29, 2004) and the event reported in Item 9B in Form 10-K/T dated February 3, 2005 (filed with the Commission on February 3, 2005). 
  
 As disclosed in Form 8-K dated January 25, 2005 (filed with the Commission on January 31, 2005) and in Form 10-K/T dated February 3, 2005 (filed with the Commission on
February 3, 2005), the Company restated certain financial information that was previously reported in the Company’s 10-Q for the quarter ended June 30, 2004 (filed with the Commission on August 6, 2004). 
  
 Schedule 3.1(s) 
  
 In connection with this Agreement, the Company is obligated to pay certain fees to Rodman & Renshaw, LLC. 
  
 Schedule 3.1(v) 
  
 Pursuant to Section 10(a) of the Second Amended and Restated Shareholder Rights Agreement dated September 15, 1998 by and among the Company
and the other signatories thereto, the registration rights granted therein terminate (i) as to all holders on the fifth anniversary of the Company’s initial public offering on July 31, 2000 and (ii) as to any holder, at such time after the
Company’s initial public offering as the Holder would be able to sell all of the registrable securities held by such holder under Rule 144 promulgated under the Securities Act in any three-month period. 
  
 Pursuant to Section 3(a) of the Registration Rights Agreement dated January 24, 2002 by and
among the Company and the investors listed on Schedule I attached thereto, the Company has agreed to keep its S-3 registration statement effective for a period of four years (or such time as all shares of common stock and warrant shares have been
sold by the purchasers). 
  
 Schedule 4.7 
  
 The Company may use a portion of the proceeds for general corporate purposes and,
notwithstanding the representation and warranty made in Section 4.7, the Company may use a portion of the proceeds to fund the defense and any settlement of outstanding litigation. 
  

 -48-Stock Purchase Agreement

 EXHIBIT 10.1 
  
 STOCK PURCHASE AGREEMENT 
  
 This Stock Purchase Agreement (this “Agreement”) is entered into as of the date set forth on the signature page hereof by and between Axesstel,
Inc., a Nevada corporation (the “Issuer”), and ComVentures V, L.P., ComVentures V-B CEO Fund, L.P. and ComVentures V Entrepreneurs’ Fund, L.P., each a Delaware limited partnership (collectively the “Investor”). Capitalized
terms used but not otherwise defined herein shall have the meanings set forth in Section 9.1. 
  
 RECITALS 
  
 A. The Issuer
and the Investor previously entered into Stock Purchase Agreements dated as of October 12, 2004 and February 2, 2005 (the “Prior Agreements”) pursuant to which the Issuer issued and sold to the Investor an aggregate of 1,103,605 shares of
its common stock, par value $0.0001 per share (the “Common Stock”). 
  
 B. Subject to the terms and conditions of this Agreement, the Investor desires to purchase, and the Issuer desires to issue and sell to the Investor, 500,000 additional shares of Common Stock (the “Shares”),
pursuant to the terms set forth herein (the “Purchase”). 
  
 C. The Purchase is conditioned upon the closing of an underwritten public offering of shares of Common Stock made by the Company and certain stockholders of the Company at a price to the public of $4.00 per share, that is expected to close
on or about March 2, 2005 (the “Offering”). 
  
 D.
Except as otherwise provided in Section 9.13 herein, each of the Prior Agreements shall remain in full force and effect after the execution and delivery of this Agreement, and no provision of this Agreement shall be read to amend, update or
supplement the Prior Agreements. 
  
 TERMS OF AGREEMENT

  
 In consideration of the mutual representations and
warranties, covenants and agreements contained herein, the parties hereto agree as follows: 
  
 ARTICLE 1 
 PURCHASE AND SALE OF COMMON STOCK 
  
 1.1 Purchase and Sale of Common Stock. Subject to the terms and
conditions of this Agreement and the closing of the Offering, the Issuer will issue and sell to the Investor and the Investor will purchase from the Issuer 500,000 shares of Common Stock (the “Shares”) at $4.00 per Share for the aggregate
purchase price of Two Million Dollars and 00/100 ($2,000,000.00) (the “Purchase Price”), which Purchase Price is equal, on a per share basis, to the offering price to the public in the Offering. ComVentures V, L.P., ComVentures V-B CEO
Fund, L.P. and ComVentures V Entrepreneurs’ Fund, L.P., will purchase 469,003, 29,078 and 1,919 of the Shares, respectively. 
  

 1 

 1.2 Transfer Restrictions. The Shares may be disposed of only in compliance with state and
federal securities laws. In connection with any transfer of Shares other than pursuant to an effective registration statement, to the Issuer, or to an Affiliate of Investor, the Issuer may require the transferor thereof to provide to the Issuer an
opinion of counsel selected by the transferor, at the expense of the Investor or transferee, the form and substance of which opinion shall be reasonably satisfactory to the Issuer, to the effect that such transfer does not require registration of
such transferred Shares under the Securities Act. As a condition of transfer, any such transferee shall agree in writing to be bound by the terms of this Agreement and shall have the rights of an Investor under this Agreement. 
  
 1.3 Legend. Any certificate or certificates representing the
Shares shall bear the following legend: 
  
 THE SHARES
REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD, TRANSFERRED, OR OTHERWISE DISPOSED OF BY THE HOLDER EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT FILED UNDER THE SECURITIES ACT OF 1933, AS AMENDED AND IN COMPLIANCE WITH APPLICABLE
SECURITIES LAWS OF ANY STATE WITH RESPECT THERETO OR IN ACCORDANCE WITH AN OPINION OF COUNSEL IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO THE ISSUER THAT AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE AND ALSO MAY NOT BE SOLD, TRANSFERRED OR
OTHERWISE DISPOSED OF EXCEPT IN COMPLIANCE WITH ANY APPLICABLE RULES OF THE SECURITIES AND EXCHANGE COMMISSION. 
  
 THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE PROVISIONS OF A STOCK PURCHASE AGREEMENT BETWEEN THE COMPANY AND THE HOLDER, WHICH MAY
RESTRICT THE TRANSFER OF SUCH SECURITIES IN CERTAIN CIRCUMSTANCES. A COPY OF SUCH AGREEMENT MAY BE OBTAINED, WITHOUT CHARGE, AT THE COMPANY’S PRINCIPAL OFFICE. 
  
 1.4 Removal of Legends. Any legend endorsed on a certificate evidencing the Shares shall be removed upon the
request of the Investor, and the Issuer shall issue a certificate without such legend to the holder of such Shares, if such Shares are sold pursuant to an effective registration statement under the Securities Act or pursuant to Rule 144(k)
promulgated thereunder, and the purchaser thereof may immediately resell such Shares without restriction and without registration; provided, however, that in the case of a sale pursuant to Rule 144(k), such holder of Shares
shall provide such information as is reasonably requested by the Issuer to ensure that such Shares may be sold in reliance on Rule 144(k). 
  
 1.5 Legal, Tax or Investment Advice. The Investor understands that nothing in this Agreement or any other materials presented to the
Investor in connection with the purchase and sale of the Shares constitutes legal, tax or investment advice. The Investor has consulted such legal, tax and investment advisors as it, in its sole discretion, has deemed necessary or appropriate in
connection with its purchase of Shares. 
  

 2 

 ARTICLE 2 
 CLOSING 
  
 2.1
Closing. The closing of the Purchase (the “Closing”) shall take place immediately following the closing of the Offering or as soon thereafter as possible. The closing of the Offering is currently scheduled to occur on March
2, 2005. The Closing shall take place at the offices of Sheppard, Mullin, Richter & Hampton, LLP, 12544 High Bluff Drive, Suite 300, San Diego, California 92130. At the Closing, unless the Investor and the Issuer otherwise agree (i) the Investor
shall pay the Purchase Price to the Issuer, by wire transfer of immediately available funds to an account designated in writing by the Issuer; (ii) the Issuer shall issue the Shares to the Investor, and deliver to the Investor certificates for the
Shares duly registered in the name of the Investor, within three business days, or as soon as practicable thereafter, and (iii) all other agreements and other documents referred to in this Agreement which are required for the Closing shall be
executed and delivered (if that is not done prior to the Closing). 
  
 ARTICLE 3 
 REPRESENTATIONS AND WARRANTIES OF THE ISSUER 
  
 As a material inducement to the Investor entering into this Agreement and purchasing the Shares, the Issuer represents and
warrants to the Investor that: 
  
 3.1 Corporate Power and
Authority. The Issuer has the corporate power and authority to execute and deliver this Agreement and to perform its obligations hereunder and to consummate the transactions contemplated hereby. At the time of the Closing, the Issuer will
have taken all necessary corporate action to authorize the execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby, and no further consent or authorization of the Issuer or its Board of
Directors or stockholders is required. 
  
 3.2
Enforceability. This Agreement has been duly executed and delivered by the Issuer and (assuming it has been duly authorized, executed and delivered by the Investor) constitutes a legal, valid and binding obligation of the Issuer,
enforceable against the Issuer in accordance with its terms, except (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, and
(ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies, and (iii) with respect to the indemnification provisions set forth herein, as and to the extent limited by public policy.

  
 3.3 No Violation. The execution and delivery by
the Issuer of this Agreement, the consummation of the transactions contemplated hereby, and the compliance by the Issuer with the terms and provisions hereof (including, without limitation, the Issuer’s issuance of the Shares to the Investor as
contemplated by and in accordance with this Agreement), will not result in a default under (or give any other party the right, with the giving of notice or the passage of time (or both), to declare a default or accelerate any obligation under) or
violate (i) any provision of the Articles of Incorporation (the “Charter”) or By-Laws of the Issuer, (ii) any Contract to which the Issuer is a party (except to the extent such a default, acceleration, or violation would not, in the case
of a Contract, have a Material Adverse Effect on the Issuer), or (iii) any Requirement of Law applicable to the Issuer, or result in the creation or imposition of any Lien upon any of the 

  

 3 

 
capital stock, properties or assets of the Issuer or any of its Subsidiaries (except where such violations of any Requirement of Law or creations or
impositions of any Liens would not have a Material Adverse Effect on the Issuer). The business of the Issuer and its subsidiaries is not being conducted in violation of any laws, ordinances or regulations of any governmental entity, except for
violations which singularly or in the aggregate do not and will not have a Material Adverse Effect. The Issuer is not required under any federal, state or local law, rule or regulation to obtain any consent, authorization or order of, or make any
filing or registration with, any court or governmental agency in order for it to execute, deliver or perform any of its obligations under this Agreement, or issue and sell the Shares in accordance with the terms hereof (other than any filings which
may be required to be made by the Issuer with the SEC or state securities administrators and any registration statement which may be filed pursuant hereto); provided, however, that for purpose of the representations made in this
sentence, the Issuer is assuming and relying upon the accuracy of the relevant representations and agreements of the Investor herein. 
  
 3.4 Consents/Approvals. Except for the filing of a registration statement in accordance with Article 6 hereof and filings with the SEC, the
securities commissions of the states in which the Shares are to be issued, and the American Stock Exchange (AMEX), no consents, permits, filings, authorizations or other actions of any Governmental Authority are required to be obtained or made by
the Issuer for the Issuer’s execution, delivery and performance of this Agreement which have not already been obtained or made. No consent, approval, waiver or other action by any Person under any Contract to which the Issuer is a party or by
which the Issuer or any of its properties or assets are bound is required or necessary for the execution, delivery or performance by the Issuer of this Agreement and the consummation of the transactions contemplated hereby, except where the failure
to obtain such consents would not have a Material Adverse Effect on the Issuer. 
  
 3.5 Valid Issuance. Upon payment of the Purchase Price by the Investor and delivery to the Investor of the certificates for the Shares, such Shares will be validly issued, fully paid and non-assessable,
free from all Liens with respect to the issuance of such Shares and will not be subject to any preemptive or similar rights. 
  
 3.6 SEC Filings, Other Filings and AMEX Compliance. The Issuer is current with all reports, schedules, forms, statements and other documents
required to be filed by it with the SEC pursuant to the reporting requirements of the Exchange Act, including material filed pursuant to Section 13(a) or 15(d) of the Exchange Act. Since January 1, 2004, the Issuer has timely made all filings
required to be made by it under the Exchange Act. The Issuer has delivered or made accessible to the Investor true, accurate and complete copies of (i) Issuer’s Annual Report on Form 10-KSB for the fiscal year ended December 31, 2004; (ii) all
of the Issuer’s Current Reports on Form 8-K filed with the SEC since January 1, 2005 and (iii) the Issuer’s Prospectus delivered in connection with the Offering and filed with the SEC on February 25, 2005 (the “SEC Reports”). The
Issuer has not provided to the Investor any information which, according to applicable law, rule or regulation, should have been disclosed publicly by the Issuer but which has not prior to the date hereof been so disclosed. None of the SEC Reports,
at the time of filing, nor the Release, 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 not misleading in light of the
circumstances in which they were made, except as may have been corrected or supplemented in a subsequent SEC Report. The Issuer has taken, 

  

 4 

 
or will have taken prior to the Closing, all necessary actions to ensure its continued inclusion in, and the continued eligibility of the Common Stock for
trading on, the AMEX under all currently effective inclusion requirements. Each financial statement included in the SEC Reports as amended (including any related notes and schedules) and the Release complies as to form in all material respects with
applicable accounting requirements under GAAP and the published rules and regulations of the SEC or other applicable rules and regulations with respect thereto (except that the unaudited financial statements contained in the Release do not contain
footnotes). Each balance sheet included in such financial statements as amended fairly presents in all material respects the consolidated financial position of the Issuer as of its date, and each of the other financial statements included in the SEC
Reports as amended (including any related notes and Schedules) and the Release fairly presents in all material respects the consolidated results of operations of the Issuer for the periods or as of the dates therein set forth in accordance with GAAP
consistently applied during the periods involved (except that the interim reports are subject to adjustments which might be required as a result of year end audit and except as otherwise stated therein, and the interim reports contained in the
Release do not contain footnotes). 
  
 3.7 Material
Changes. Since December 31, 2004, no Material Adverse Effect has occurred or exists with respect to the Issuer and its Subsidiaries taken as a whole. 
  
 3.8 Exempt Transaction. Subject in part to the truth and accuracy of Investor’s representations and warranties set forth in this
Agreement, the offer, sale and issuance of the Shares as contemplated by this Agreement are exempt from the registration requirements of the Securities Act and any applicable state securities laws, and neither the Issuer nor any authorized agent
acting on its behalf will take any action hereafter that would cause the loss of such exemption. 
  
 3.9 The AMEX. The Common Stock is listed on the AMEX and, to the best of the knowledge of the Issuer, there are no proceedings to revoke or
suspend such listing. The issuance of the Shares will not contravene any of the rules of the AMEX. The Common Stock is registered pursuant to Section 12(g) of the Exchange Act. The Issuer has taken no action designed to, or which to its knowledge is
likely to have the effect of, terminating the registration of the Common Stock under the Exchange Act or delisting the Common Stock from the AMEX. The Issuer has not received any notification that, and has no knowledge that, the SEC or the AMEX is
contemplating terminating such listing or registration. The issuance of the Shares does not require stockholder approval pursuant to the rules of the AMEX or otherwise. 
  
 3.10 Absence of Certain Developments. Since December 31, 2004, other than as disclosed in the SEC Reports,
neither the Issuer nor any Significant Subsidiary has: 
  
 (i)
issued any stock, bonds or other corporate securities or any rights, options or warrants with respect thereto; 
  
 (ii) borrowed any amount or incurred or become subject to any liabilities (absolute or contingent) except current liabilities incurred in the ordinary
course of business which are comparable in nature and amount to the current liabilities incurred in the ordinary course of business during the comparable portion of its prior fiscal year, as adjusted to reflect the current nature and volume of the
Issuer’s or such Significant Subsidiary’s business; 
  

 5 

 (iii) discharged or satisfied any lien or encumbrance or paid any obligation or liability (absolute or
contingent), other than current liabilities paid in the ordinary course of business; 
  
 (iv) declared or made any payment or distribution of cash or other property to stockholders with respect to its stock, or purchased or redeemed, or made any agreements so to purchase or redeem, any shares of its
capital stock; 
  
 (v) sold, assigned or transferred any other
tangible assets, or canceled any debts or claims, except in the ordinary course of business; 
  
 (vi) sold, assigned or transferred any patent rights, trademarks, trade names, copyrights, trade secrets or other intangible assets or intellectual property rights, or disclosed any proprietary confidential
information to any person except to customers in the ordinary course of business or to the Investor or its representatives; 
  
 (vii) suffered any material losses (except for anticipated losses consistent with prior quarters) or waived any rights of material value, whether or not
in the ordinary course of business, or suffered the loss of any material amount of prospective business; 
  
 (viii) made any changes in employee compensation except in the ordinary course of business and consistent with past practices; 
  
 (ix) made capital expenditures or commitments therefor that aggregate in
excess of $250,000; 
  
 (x) entered into any other material
transaction, whether or not in the ordinary course of business; 
  
 (xi) suffered any material damage, destruction or casualty loss, whether or not covered by insurance; 
  
 (xii) experienced any material problems with labor or management in connection with the terms and conditions of their employment; or 
  
 (xiii) effected any two or more events of the foregoing kind which in the
aggregate would be material to the Issuer or its subsidiaries. 
  
 ARTICLE 4 
 REPRESENTATIONS AND WARRANTIES OF THE INVESTOR 
  
 As a material inducement to the Issuer entering into this Agreement and
issuing the Shares, the Investor represents and warrants to the Issuer as follows: 
  

 6 

 4.1 Power and Authority. The Investor is an entity duly organized, validly existing and in
good standing under the laws of the state of its incorporation or formation. The Investor has the corporate, partnership or other power and authority under applicable law to execute and deliver this Agreement and consummate the transactions
contemplated hereby, and has all necessary authority to execute, deliver and perform its obligations under this Agreement and consummate the transactions contemplated hereby. The Investor has taken all necessary action to authorize the execution,
delivery and performance of this Agreement and the transactions contemplated hereby and, when delivered, this Agreement will constitute the valid and legally binding obligation of the Investor, enforceable against it in accordance with its terms,
except (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, and (ii) as limited by laws relating to the availability of
specific performance, injunctive relief or other equitable remedies, and (iii) with respect to the indemnification provisions set forth herein, as and to the extent limited by public policy. 
  
 4.2 No Violation. The execution and delivery by the Investor of
this Agreement, the consummation of the transactions contemplated hereby, and the compliance by the Investor with the terms and provisions hereof, will not result in a default under (or give any other party the right, with the giving of notice or
the passage of time (or both), to declare a default or accelerate any obligation under) or violate any charter or similar documents of the Investor, if other than a natural person, or any Contract to which the Investor is a party or by which it or
its properties or assets are bound, or violate any Requirement of Law applicable to the Investor, other than such violations or defaults which, individually and in the aggregate, do not and will not have a Material Adverse Effect on the Investor.

  
 4.3 Consents/Approvals. No consents, filings,
authorizations or actions of any Governmental Authority are required for the Investor’s execution, delivery and performance of this Agreement. No consent, approval, waiver or other actions by any Person under any Contract to which the Investor
is a party or by which the Investor or any of its properties or assets are bound is required or necessary for the execution, delivery and performance by the Investor of this Agreement and the consummation of the transactions contemplated hereby.

  
 4.4 Investment Intent. The Investor is acquiring
the Shares hereunder for its own account and with no present intention of distributing or selling such Shares and further agrees not to transfer such Shares in violation of the Securities Act or any applicable state securities law, and no one other
than the Investor has any beneficial interest in the Shares. The Investor agrees that it will not sell or otherwise dispose of any of the Shares unless such sale or other disposition has been registered under the Securities Act or, in the opinion of
counsel reasonably acceptable to the Issuer, is exempt from registration under the Securities Act and has been registered or qualified or, in the opinion of such counsel reasonably acceptable to the Issuer, is exempt from registration or
qualification under applicable state securities laws. The Investor understands that the offer and sale by the Issuer of the Shares have not been registered under the Securities Act by reason of their contemplated issuance in a transaction exempt
from the registration and prospectus delivery requirements of the Securities Act pursuant to Section 4(2) thereof, and that the reliance of the Issuer on such exemption from registration is predicated in part on these representations and warranties
of the Investor. The Investor acknowledges that pursuant to Section 1.3 of this Agreement, a restrictive legend consistent with the foregoing has been or will 

  

 7 

 
be placed on the certificates for the Shares. The Investor is acquiring the Shares hereunder in the ordinary course of its business. The Investor does not
have any agreement or understanding, directly or indirectly, with any Person to distribute any of the Shares. 
  
 4.5 Investor Status. The Investor is an “accredited investor” as such term is defined in Rule 501(a) of Regulation D under the
Securities Act, and has such knowledge and experience in financial and business matters that it is capable of evaluating the merits and risks of the investment to be made by it hereunder. ComVentures V, L.P. is a qualified institutional buyer as
defined in Rule 144A. 
  
 4.6 Adequate Information.
The Investor has received from the Issuer, and has reviewed, such information as the Investor considers necessary or appropriate to evaluate the risks and merits of an investment in the Shares, including without limitation the SEC Reports and recent
press releases of the Issuer. The Investor acknowledges that each of the SEC Reports, including the risk factors contained therein, are specifically incorporated herein by reference and form an integral part of this Agreement. 
  
 4.7 Opportunity to Question. The Investor has had the
opportunity to question, and has questioned, to the extent deemed necessary or appropriate, representatives of the Issuer so as to receive answers and verify information obtained in the Investor’s examination of the Issuer, including the
information that the Investor has received and reviewed as referenced in Section 4.6 hereof in relation to its investment in the Shares. 
  
 4.8 No Other Representations. No oral or written representations have been made to the Investor in connection with the Investor’s
acquisition of the Shares that were in any way inconsistent with the information reviewed by the Investor. The Investor acknowledges that no representations or warranties of any type or description have been made to it by any Person with regard to
the Issuer, any of its Subsidiaries, any of their respective businesses, properties or prospects or the investment contemplated herein, other than the representations and warranties set forth in Article 3 hereof. 
  
 4.9 Knowledge and Experience. The Investor has such knowledge
and experience in financial, tax and business matters, including substantial experience in evaluating and investing in common stock and other securities (including the common stock and other securities of speculative companies), so as to enable the
Investor to utilize the information referred to in Section 4.6 hereof and any other information made available by the Issuer to the Investor in order to evaluate the merits and risks of an investment in the Shares and to make an informed investment
decision with respect thereto. The Investor is able to bear the economic risk of an investment in the Shares and is able to afford a complete loss of such investment. 
  
 4.10 Independent Decision. The Investor is not relying on the Issuer, any other potential investor, or on any
legal or other opinion in the materials reviewed by the Investor with respect to the financial or tax considerations of the Investor relating to its investment in the Shares. The Investor has relied solely on the representations and warranties,
covenants and agreements of the Issuer in this Agreement and on its examination and independent investigation in making its decision to acquire the Shares. 
  

 8 

 4.11 General Solicitation. The Investor is not purchasing the Shares as a result of any
advertisement, article, notice or other communication regarding the Shares published in any newspaper, magazine or similar media or broadcast over television or radio or presented at any seminar or any other general solicitation or general
advertisement. 
  
 4.12 Residence. The office of the
Investor in which its investment decision was made is located at the address of the Investor set forth on the signature page hereto. 
  
 4.13 No Prior Short Selling. At no time during the 30 days prior to the Closing has the Investor engaged in or effected, in any manner
whatsoever, directly or indirectly, in any “short sale” (as such term is defined in Rule 3b-3 of the Exchange Act) of the Common Stock (a “Short Sale”). Prior to the Closing, except as previously disclosed to the Issuer in
writing, the Investor has never owned securities of the Issuer. 
  
 4.14 Beneficial Ownership. At the Closing, the Investor will not, after giving effect to the Shares purchased hereunder, beneficially own in excess of 19.99% of the number of shares of Common Stock of the Issuer then
outstanding, determined in accordance with Rule 13d-3 of the Exchange Act). 
  
 4.15 Commissions. The Investor has not incurred any obligation for any finder’s or broker’s or agent’s fees or commissions in connection with the transactions contemplated hereby.

  
 4.16 No Broker-Dealer. The Investor is not
required to be registered as a broker-dealer pursuant to Section 15 of the Exchange Act. 
  
 ARTICLE 5 
 COVENANTS 
  
 5.1 Public Announcements. Each party to this Agreement agrees that it shall not issue or release any public
announcement with respect to this Agreement or the transactions provided for herein, which names the other party, without the prior consent of the other party. Notwithstanding the foregoing, nothing in this Section 5.1 shall prevent any party hereto
from making such public announcements or filings as it may consider necessary in order to satisfy its legal obligations. On or before the third business day following the Closing, the Issuer will issue a press release acceptable to each of the
parties hereto describing the transactions contemplated by this Agreement, and promptly thereafter file a Current Report on Form 8-K with the SEC, attaching such press release. 
  
 5.2 Further Assurances. Each party shall execute and deliver such additional instruments and other documents
and shall take such further actions as may be reasonably necessary or appropriate to effectuate, carry out and comply with all of the terms of this Agreement and the transactions contemplated hereby. Each of the Investor and the Issuer shall make on
a prompt and timely basis all governmental or regulatory notifications and filings required to be made by it with or to any Governmental Authority in connection with the consummation of the transactions contemplated hereby. The Issuer and the
Investor each agree to cooperate with the other in the preparation and filing of all forms, notifications, reports and information, if any, required or reasonably deemed advisable pursuant to any Requirement of Law or the rules of the AMEX in
connection with the transactions contemplated by this 

  

 9 

 
Agreement and to use their respective commercially reasonable efforts to agree jointly on a method to overcome any objections by any Governmental Authority
to any such transactions. The Issuer will use its reasonable best efforts to cause the listing or trading of its Common Stock to be continued either on the AMEX or on another national securities exchange and to comply in all respects with the
Issuer’s reporting, filing and other obligations under the bylaws or rules of such exchange. Except as may be specifically required hereunder, neither of the parties hereto or their respective Affiliates shall be required to agree to take any
action that in the reasonable opinion of such party would result in or produce a Material Adverse Effect on such party. 
  
 5.3 Notification of Certain Matters. Each party hereto shall give prompt notice to the other party of the occurrence, or non-occurrence, of
any event which would be likely to cause any representation and warranty herein to be untrue or inaccurate, or any covenant, condition or agreement herein not to be complied with or satisfied. 
  
 5.4 Confidential Information; Standstill. 
  
 (a) The Investor agrees that no portion of the Confidential Information (as
defined below) shall be disclosed to third parties, except as may be required by law, without the prior written consent of the Issuer provided that the Investor may share such information with such of its officers and professional advisors as may
need to know such information to assist the Investor in its evaluation thereof on the condition that such parties agree to be bound by the terms hereof. All Confidential Information received by the Investor shall be promptly returned or destroyed,
as directed by the Issuer. “Confidential Information” means all written data, reports, records or materials and any and all other confidential or disclosure information or materials obtained from the Issuer or its professional advisors,
which are not yet publicly available. Confidential Information excludes information that is publicly available or already known to the Investor through a source not bound by any confidentiality obligation. 
  
 (b) For a period of two years from the Closing Date, the Investor will not,
directly or indirectly, without the prior written consent of the Issuer (i) propose to enter into any acquisition of all or substantially all of the assets or stock of the Issuer or a merger or other business combination involving the Issuer; (ii)
seek to control the management, Board of Directors or policies of the Issuer; (iii) form, join or in any way participate in a “group” (within the meaning of Section 13(d)(3) of the Securities Act of 1934) or (iv) purchase or acquire shares
of the Issuer’s Common Stock if such purchase or acquisition would cause the number of shares of Common Stock beneficially owned by the Investor and its affiliates to exceed 20% of the Issuer’s outstanding Common Stock. 
  
 5.5 Form D Filing. The Issuer agrees that it shall file in a
timely manner a Form D relating to the sale of the Shares under this Agreement, pursuant to Regulation D promulgated under the Securities Act. 
  
 5.6 Other Agreements. The Issuer shall not enter into any agreement the terms of which would restrict or impair the ability of the Issuer to
perform its obligations under this Agreement. 
  

 10 

 5.7 Use of Proceeds. The proceeds from the sale of the Shares will be used by the Issuer
and its subsidiaries for general corporate purposes. 
  
 5.8
Investor’s Compliance with Law. The Investor agrees that its trading activities with respect to shares of the Issuer’s Common Stock will be in compliance with all applicable state and federal securities laws, rules and
regulations and rules and regulations of the AMEX. Without limiting the generality of the foregoing, the Investor agrees that it will, whenever required by federal securities laws, deliver the prospectus included in the Registration Statement to any
purchaser of Shares from the Investor. 
  
 ARTICLE 6

 REGISTRATION RIGHTS 
  
 The Investor shall have the following registration rights with respect to the Registrable Securities owned by it: 
  
 6.1 Transfer of Registration Rights. Subject to the provisions
of this Agreement, the Investor may assign the registration rights with respect to Registrable Securities to any party or parties to which it may from time to time transfer Registrable Securities, provided that the transferee agrees in writing with
the Issuer to be bound by the applicable provisions of this Agreement regarding such registration rights and indemnification relating thereto. Upon assignment of any registration rights pursuant to this Section 6.1, the Investor shall deliver to the
Issuer a notice of such assignment which includes the identity and address of any assignee and such other information reasonably requested by the Issuer in connection with effecting any such registration (collectively, the Investor and each such
subsequent holder of Registrable Securities is referred to as a “Holder”). Notwithstanding anything to the contrary herein, the rights of a Holder pursuant to Article 6 may be assigned only to a transferee or assignee of any Registrable
Securities if such transferee or assignee (i) acquires at least 100,000 shares of such Holder’s Registrable Securities (equitably adjusted for any stock splits, subdivisions, stock dividends, changes, combinations or the like) or less if the
shares being transferred constitute all of such transferring Holder’s Registrable Securities or (ii) is a wholly-owned subsidiary or affiliate, affiliated venture capital fund, or partner, constituent partner, member, retired member or
shareholder of the Investor. 
  
 6.2 Required
Registration. The Issuer shall use best efforts to file a Registration Statement (the “Shelf Registration Statement”) on or before March 31, 2005, pursuant to which all of the Registrable Securities shall be registered for resale.
The Issuer may delay the filing of the Shelf Registration Statement but shall use its best efforts to file the Shelf Registration Statement before the expiration of forty-five (45) days from the effective date of the registration statement for the
Offering. The Investor and its counsel shall have a reasonable period, not to exceed ten (10) business days, to review the Shelf Registration Statement or any amendment thereto, prior to filing with the SEC, and the Issuer shall provide the Investor
with copies of any comment letters received from the SEC with respect thereto within 2 business days of receipt thereof. The Issuer shall use reasonable best efforts to cause the SEC to declare the Shelf Registration Statement effective as soon as
practicable after filing, but in no event later than ninety (90) days of the date of filing of the Shelf Registration Statement, and to thereafter maintain the effectiveness of the Shelf Registration Statement until such time as the Issuer 

  

 11 

 
reasonably determines, based on an opinion of counsel, that the Holders will be eligible to sell all of the Registrable Securities then owned by the Holders
without the need for continued registration of the Registrable Securities in the three month period immediately following the termination of the effectiveness of the Shelf Registration Statement. Notwithstanding the foregoing, if the Issuer’s
obligation to maintain the effectiveness of the Shelf Registration Statement has not earlier terminated under the preceding sentence, the Issuer’s obligations contained in this Section 6.2 shall terminate automatically on the second anniversary
of the effective date of the Shelf Registration Statement. The Issuer covenants that it will provide written notice to the Investor that the Shelf Registration Statement has been declared effective by the SEC, which notice shall be given promptly
after the Issuer has received notice of such effectiveness from the SEC. 
  
 6.3 Registration Procedures. 
  
 (a) In case of the Shelf Registration Statement effected by the Issuer subject to this Article 6, the Issuer shall keep the Investor, on behalf of each Holder, advised in writing as to the initiation of such
registration, and as to the completion thereof. In addition, subject to Section 6.2 above, the Issuer shall, to the extent applicable to the Shelf Registration Statement: 
  
 (i) prepare and file with the SEC such amendments and supplements to the Shelf Registration Statement as may be necessary
to keep such registration, effective and comply with provisions of the Securities Act with respect to the disposition of all securities covered thereby during the period referred to in Section 6.2, and take all lawful action such that each of (A)
the Shelf Registration Statement and any amendment thereto does not, when it becomes effective, contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein
not misleading and (B) the prospectus, and any amendment or supplement thereto, does not at any time while it is effective include 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; 
  
 (ii) update, correct, amend and supplement the Shelf Registration Statement as necessary; 
  
 (iii) furnish such number of prospectuses, including preliminary prospectuses, and other documents incident thereto as
Holder may reasonably request from time to time; 
  
 (iv) use its
commercially reasonable efforts to register or qualify such Registrable Securities under such other securities or blue sky laws of such jurisdictions of the United States where an exemption is not available and as Holder may reasonably request to
enable it to consummate the disposition in such jurisdiction of the Registrable Securities (provided that the Issuer will not be required to (i) qualify generally to do business in any jurisdiction where it would not otherwise be required to qualify
but for this provision, or (ii) consent to general service of process in any such jurisdiction, or (iii) subject itself to taxation in any jurisdiction where it is not already subject to taxation); 
  

 12 

 (v) notify Holder at any time when a prospectus relating to the Registrable Securities is required to be
delivered under the Securities Act, of the happening of any event as a result of which the prospectus included in the Shelf Registration Statement contains an untrue statement of a material fact or omits any fact necessary to make the statements
therein not misleading, and the Issuer shall as promptly as commercially reasonable prepare a supplement or amendment to such prospectus, so that, as thereafter delivered to purchasers of such shares, such prospectus will not contain any untrue
statements of a material fact or omit to state any fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; 
  
 (vi) cause all such Registrable Securities to be listed on each securities exchange on which similar securities issued by
the Issuer are then listed and obtain all necessary approvals from the AMEX for trading thereon; 
  
 (vii) provide a transfer agent and registrar for all such Registrable Securities not later than the effective date of the Shelf Registration Statement;

  
 (viii) upon the sale of any Registrable Securities pursuant
to the Shelf Registration Statement, direct the transfer agent to remove all restrictive legends from all certificates or other instruments evidencing the Registrable Securities; and 
  
 (ix) take all such other lawful actions reasonably necessary to expedite and facilitate the disposition by the Holder of
its Registrable Securities in accordance with the intended methods therefore provided in the prospectus which are customary for issuers to perform under the circumstances. 
  
 (b) Notwithstanding anything stated or implied to the contrary in Section 6.3(a) above, the Issuer shall not be required to
consent to any underwritten offering of the Registrable Securities or to any specific underwriter participating in any underwritten public offering of the Registrable Securities. 
  
 (c) Each Holder agrees that upon receipt of any notice from the Issuer of the happening of any event of the kind described
in Section 6.3(a)(v), such Holder will forthwith discontinue such Holder’s disposition of Registrable Securities pursuant to the registration statement relating to such Registrable Securities until such Holder’s receipt of the copies of
the supplemented or amended prospectus contemplated by Section 6.3(a)(v) and, if so directed by the Issuer, will deliver to the Issuer at the Issuer’s expense all copies, other than permanent file copies, then in such Holder’s possession,
of the prospectus relating to such Registrable Securities current at the time of receipt of such notice. 
  
 (d) Except as required by law, all expenses incurred by the Issuer in complying with this Article 6, including but not limited to, all registration,
qualification and filing fees, printing expenses, fees and disbursements of counsel and accountants for the Issuer, blue sky fees and expenses (including fees and disbursements of counsel related to all blue sky matters) (“Registration
Expenses”) incurred in connection with any registration, qualification or compliance pursuant to this Article 6 shall be borne by the Issuer. All underwriting discounts and selling commissions applicable to a sale incurred in connection with
any registration of Registrable Securities and the legal fees and other expenses of a Holder shall be borne by such Holder. 
  

 13 

 6.4 Further Information; Listing of Selling Shareholders. If Registrable Securities owned
by a Holder are included in any registration, such Holder shall furnish the Issuer such information regarding itself as the Issuer may reasonably request and as shall be required in connection with any registration (or amendment or supplement
thereto), referred to in this Agreement, and Holder shall indemnify the Issuer with respect thereto in accordance with Article 7 hereof. No Holder shall be entitled to use the prospectus forming a part of the Resale Registration Statement for
resales of Registrable Securities at any time unless such Holder is named as a selling shareholder in such prospectus or in a supplement or amendment thereto. No Holder shall be entitled to be listed as a selling shareholder in the Shelf
Registration Statement as of the date the Shelf Registration Statement is declared effective unless such Holder has provided to the Issuer all information requested by the Issuer pursuant to this Section 6.4 by the deadline established by the Issuer
for a response to its request; provided, however, that each Holder shall have at least five (5) business days from the date on which the request is first mailed or otherwise delivered to the Holder by the Issuer to provide the information to the
Issuer. After the effectiveness of the Shelf Registration Statement, the Issuer shall, upon the request of any Holder not named as a selling shareholder, file a supplement to the prospectus or amendment to the Shelf Registration Statement
identifying such Holder as a selling shareholder, provided that the Issuer shall be under no obligation to do so unless the Holder has furnished to the Issuer all information requested by the Issuer under this Section 6.4; and provided further, that
the Issuer shall not be obligated to file no more than one such document within any period of thirty (30) days. 
  
 6.5 Right of Suspension. 
  
 (a) Notwithstanding any other provision of this Agreement or any related agreement to the contrary, if any, the Issuer shall have the right, at any time,
to suspend the effectiveness of the Shelf Registration Statement and offers and sales of the Registrable Securities covered thereby whenever, in the good faith judgment of the Issuer, (i) continuing such effectiveness or permitting such offers and
sales could reasonably be expected to have an adverse effect upon a proposed sale of all or substantially all of the assets of the Issuer or a merger, acquisition, reorganization, recapitalization or similar current transaction materially affecting
the capital structure or equity ownership of the Issuer, (ii) there exists a material development or a potential material development with respect to or involving the Issuer that the Issuer would be obligated to disclose in the prospectus used in
connection with the Shelf Registration Statement, which disclosure, in the good faith judgment of the Issuer, after considering the advice of counsel, would be premature or otherwise inadvisable at such time, or (iii) the Shelf Registration
Statement or related prospectus or any document incorporated or deemed to be incorporated therein by reference contains an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances, not misleading (a “Suspension Event”). In the event that the Issuer shall determine to so suspend the effectiveness of the Shelf Registration Statement and offers and sales of the
Registrable Securities covered thereby, the Issuer shall, in addition to performing those acts required to be performed under the Securities Act and/or the Exchange Act or deemed advisable by the Issuer, deliver to each Holder written notice
thereof, signed by the 

  

 14 

 
Chief Financial Officer or Chief Executive Officer of the Issuer. Upon receipt of such notice, the Holders shall discontinue disposition of the Registrable
Securities covered by the Shelf Registration Statement and prospectus until such Holders (x) are advised in writing by the Issuer that the use of the Shelf Registration Statement and prospectus (and offers and sales thereunder) may be resumed, (y)
have received copies of a supplemental or amended prospectus, if applicable, and (z) have received copies of any additional or supplemental filings which are incorporated or deemed to be incorporated by reference into such prospectus. The Issuer
will exercise commercially reasonable efforts to ensure that the use of the Shelf Registration Statement and prospectus may be resumed as quickly as practicable, provided, however, that in the event of a Suspension Event, the
Issuer’s obligation under Section 6.2 to maintain the effectiveness of the Shelf Registration Statement until the second anniversary of the date of the effectiveness of the Shelf Registration Statement, if that obligation has not terminated
prior to such anniversary pursuant to the provisions of Section 6.2, shall be extended on a day-for-day basis equal to the amount of time that such Shelf Registration Statement shall have been suspended. 
  
 (b) The Issuer’s right to suspend the effectiveness of the Shelf
Registration Statement and the offers and sales of the Registrable Securities covered thereby, as described above, shall be for a period of time (the “Suspension Period”) beginning on the date of the occurrence of the Suspension Event and
expiring on the earlier to occur of (i) the date on which the Suspension Event ceases, or (ii) forty five (45) days after the occurrence of the Suspension Event; provided, however, that there shall not be more than two Suspension Periods in any 12
month period. 
  
 ARTICLE 7 
 INDEMNIFICATION 
  
 7.1 Indemnification Relating to Registration Rights. 
  
 (a) With respect to any registration, effected or to be effected pursuant to Article 6 of this Agreement, the Issuer shall
indemnify each Holder of Registrable Securities whose securities are included in a registration statement, each of such Holder’s directors and officers, each underwriter (as defined in the Securities Act) of the securities sold by such Holder
(if any), and each Person who controls (within the meaning of the Securities Act) any such Holder or underwriter (a “Controlling Person”) from and against all losses, damages, liabilities, claims, charges, actions, proceedings, demands,
judgments, settlement costs and expenses (including, without limitation, reasonable attorneys’ fees and expenses) or deficiencies of any such Holder or any such underwriter or Controlling Person if any of the foregoing (or actions in respect
thereof) arise out of or are based upon: 
  
 (i) any untrue
statement (or alleged untrue statement) of a material fact contained in the Shelf Registration Statement, or any related preliminary prospectus, prospectus or amendment or supplement thereto, offering circular or other document (including any
related registration statement, notification or the like) incident to any such registration; 
  

 15 

 (ii) any omission (or alleged omission) to state therein a material fact required to be stated therein
or necessary to make the statement therein, in the light of the circumstances under which it was made, not misleading; or 
  
 (iii) any violation by the Issuer of the Securities Act or any rule or regulation promulgated thereunder applicable to the Issuer, or of any blue sky or
other state securities laws or any rule or regulation promulgated thereunder applicable to the Issuer, 
  
 in each case, relating to any action or inaction required of the Issuer in connection with any such registration, and subject to Section 7.2 below will reimburse each such Person entitled to indemnity under this
Section 7.1 for all legal and other expenses reasonably incurred in connection with investigating or defending any such loss, damage, liability, claim, charge, action, proceeding, demand, judgment, settlement or deficiency; provided,
however, that, the foregoing indemnity and reimbursement obligation shall not be applicable to the extent that any such matter arises out of or is based on (A) any untrue statement (or alleged untrue statement) or omission (or alleged
omission) made in reliance upon and in conformity with written information furnished to the Issuer by or on behalf of such Holder or by or on behalf of such an underwriter specifically for use in such Shelf Registration Statement, or any related
preliminary prospectus, prospectus or amendment or supplement thereto, offering circular or other document, or (B) the failure of the Holder to comply with its obligations to discontinue disposition of Registrable Securities during the suspension of
a registration statement as set forth in Section 6.5(a). This indemnity agreement will be in addition to any liability which the Issuer may otherwise have. 
  
 (b) With respect to any registration, qualification or compliance effected or to be effected pursuant to this Agreement, each Holder of Registrable
Securities whose securities are included in a registration statement, shall indemnify the Issuer or any Controlling Person, and the directors and officers of the Issuer or any Controlling Person, from and against all losses, damages, liabilities,
claims, charges, actions, proceedings, demands, judgments, settlement costs and expenses of any nature whatsoever (including, without limitation, reasonable attorneys’ fees and expenses) or deficiencies of the Issuer if any of the foregoing
arise out of: 
  
 (i) any untrue statement (or alleged untrue
statement) of a material fact contained in the Shelf Registration Statement, or any related preliminary prospectus, prospectus or amendment or supplement thereto, offering circular or other document (including any related registration statement,
notification or the like) incident to any such registration, qualification or compliance; 
  
 (ii) any omission (or alleged omission) to state therein a material fact required to be stated therein or necessary to make the statement therein, in the light of the circumstances under which it was made, not
misleading; or 
  
 (iii) any violation by such Holder of the
Securities Act or any rule or regulation promulgated thereunder applicable to the Issuer or such Holder or of any blue sky or other state securities laws or any rule or regulation promulgated thereunder applicable to the Issuer or such Holder,

  

 16 

 in each case, relating to any action or inaction required of such Holder in connection with any such registration,
qualification or compliance, and subject to Section 7.2 below will reimburse the Issuer for all legal and other expenses reasonably incurred in connection with investigating or defending any such loss, damage, liability, claim, charge, action,
proceeding, demand, judgment, settlement or deficiency; provided, however, that, the foregoing indemnity and reimbursement obligation shall only be applicable to the extent that any such matter arises out of or is based on any untrue
statement (or alleged untrue statement) or omission (or alleged omission) made in reliance upon and in conformity with written information furnished to the Issuer by or on behalf of the Holder specifically for use in such Shelf Registration
Statement, or any related preliminary prospectus, prospectus or amendment or supplement thereto, offering circular or other document; provided, however, that, the obligation of the Holder hereunder shall be limited to an amount equal
to the net proceeds to the Holder of Registrable Securities sold as contemplated hereunder. 
  
 7.2 Indemnification Procedures. Each Person entitled to indemnification under this Section (an “Indemnified Party”) shall give notice as promptly as reasonably practicable to each party
required to provide indemnification under this Section (an “Indemnifying Party”) of any action commenced against or by it in respect of which indemnity may be sought hereunder, but failure to so notify an Indemnifying Party shall not
relieve such Indemnifying Party from any liability that it may have otherwise than on account of this indemnity agreement so long as such failure shall not have materially prejudiced the position of the Indemnifying Party. Upon such notification,
the Indemnifying Party shall assume the defense of such action if it is a claim brought by a third party, if and after such assumption the Indemnified Party shall not be entitled to reimbursement of any expenses incurred by it in connection with
such action except as described below. In any such action, any Indemnified Party shall have the right to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of such Indemnified Party unless (i) the Indemnifying
Party and the Indemnified Party shall have mutually agreed to the contrary or (ii) the named parties in any such action (including any impleaded parties) include both the Indemnifying Party and the Indemnified Party and representation of both
parties by the same counsel would be inappropriate due to actual or potential differing or conflicting interests between them. The Indemnifying Party shall not be liable for any settlement of any proceeding effected without its written consent
(which shall not be unreasonably withheld or delayed by such Indemnifying Party), but if settled with such consent or if there be final judgment for the plaintiff, the Indemnifying Party shall indemnify the Indemnified Party from and against any
loss, damage or liability by reason of such settlement or judgment. 
  
 7.3 Contribution. In order to provide for just and equitable contribution under the Securities Act in any case in which (i) the indemnified party makes a claim for indemnification pursuant to this Section 7 but is judicially
determined (by the entry of a final judgment or decree by a court of competent jurisdiction and the expiration of time to appeal or the denial of the last right of appeal) that such indemnification may not be enforced in such case notwithstanding
the fact that the express provisions of Section 7 hereof provide for indemnification in such case, or (ii) contribution under the Securities Act may be required on the part of any indemnified party, then the Issuer and the Holder shall contribute to
the aggregate losses, damages, liabilities, claims, charges, actions, proceedings, demands, judgments, settlement costs and expenses (including, without limitation, reasonable attorneys’ fees and expenses) or deficiencies to which they may be
subject (which shall, for purposes of this Agreement included, but not be limited to, all reasonable costs of defense and investigation and all reasonable attorneys’ fees), in either 

  

 17 

 
such case (after contribution from others) on the basis of relative fault as well as any other relevant equitable considerations. The relative fault should
be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Issuer on the one hand or the
Holder on the other hand, and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Issuer and the Holder agree that it would not be just and equitable if
contribution pursuant to this Section 7 were determined by pro rata allocation or by any other method of allocation which does not take into account the equitable considerations referred to in this Section 7. The amount paid or payable by an
Indemnified Party as a result of the losses, damages, liabilities, claims, charges, actions, proceedings, demands, judgments, settlement costs and expenses (including, without limitation, reasonable attorneys’ fees and expenses) or deficiencies
(or actions in respect thereof) referred to above in this Section 7 shall be deemed to include any legal or other expenses reasonably incurred by such Indemnified Party in connection with investigating or defending any such action or claim. No
Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. 
  
 Notwithstanding any other provision of this Section 7, in no event shall any
(i) Holder be required to undertake liability to any Person under this Section 7 for any amounts in excess of the dollar amount of the net proceeds to be received by the Holder from the sale of the Holder’s Registrable Securities (after
deducting any fees, discounts and commissions applicable thereto) pursuant to any registration statement under which such Registrable Securities are or were to be registered under the Securities Act, and (ii) underwriter be required to undertake
liability to any person hereunder for any amounts in excess of the aggregate discount, commission or other compensation payable to such underwriter with respect to the Registrable Securities underwritten by it and distributed pursuant to the Shelf
Registration Statement. 
  
 ARTICLE 8 
 CONDITIONS TO CLOSING 
  
 8.1 Conditions to the Obligations of the Investor. The obligations of the Investor to proceed with the Closing is subject to the following
conditions any and all of which may be waived, in whole or in part, to the extent permitted by applicable law: 
  
 (a) Representations and Warranties. Each of the representations and warranties of the Issuer contained in this Agreement shall be true and correct
as of the Closing as though made on and as of the Closing, except (i) for changes specifically permitted by this Agreement, and (ii) that those representations and warranties which address matters only as of a particular date shall remain true and
correct as of such date. Unless the Investor receives written notice to the contrary at the Closing, Investor shall be entitled to assume that the preceding is accurate in all respects at the Closing. 
  
 (b) Agreement and Covenants. The Issuer shall have performed or
complied with all agreements and covenants required by this Agreement to be performed or complied with by it on or prior to the Closing. Unless the Investor receives written notice to the contrary at the Closing, Investor shall be entitled to assume
that the preceding is accurate in all respects at the Closing. 
  

 18 

 (c) No Order. No governmental authority or other agency or commission or federal or state court of
competent jurisdiction shall have enacted, issued, promulgated, enforced or entered any statute, rule, regulation, executive order, decree, injunction, or other order (whether temporary, preliminary or permanent) which is in effect and which
restricts, prevents or prohibits consummation of the Closing or any transaction contemplated by this Agreement. 
  
 (d) Securities Exemptions. The offer and sale of the Shares pursuant to this Agreement shall be exempt from the registration requirements of the
Securities Act and the registration and/or qualification requirements of all applicable state securities laws. 
  
 (e) No Suspension of Trading or Listing of Common Stock. The Common Stock of the Issuer (i) shall be designated for quotation or listed on the AMEX
and (ii) shall not have been suspended from trading on the AMEX. 
  
 (f) Approval of the AMEX. The AMEX shall have approved an application for listing of additional shares filed by the Issuer with respect to the Shares. 
  
 8.2 Conditions to the Obligations of the Issuer. The obligations of the Issuer to proceed with the Closing is
subject to the following conditions any and all of which may be waived, in whole or in part, to the extent permitted by applicable law: 
  
 (a) Representations and Warranties. Each of the representations and warranties of the Investor contained in this Agreement shall be true and
correct as of the Closing as though made on and as of the Closing, except (i) for changes specifically permitted by this Agreement, and (ii) that those representations and warranties which address matters only as of a particular date shall remain
true and correct as of such date. Unless the Issuer receives written notification to the contrary at the Closing, the Issuer shall be entitled to assume that the preceding is accurate in all respects at the Closing. 
  
 (b) Agreement and Covenants. The Investor shall have performed or
complied in all material respects with all agreements and covenants required by this Agreement to be performed or complied with by it on or prior to the Closing. Unless the Issuer receives written notification to the contrary at the Closing, the
Issuer shall be entitled to assume that the preceding is accurate in all respects at the Closing. 
  
 (c) No Order. No governmental authority or other agency or commission or federal or state court of competent jurisdiction shall have enacted,
issued, promulgated, enforced or entered any statute, rule, regulation, executive order, decree, injunction, or other order (whether temporary, preliminary or permanent) which is in effect and which materially restricts, prevents or prohibits
consummation of the Closing or any transaction contemplated by this Agreement. 
  
 (d) Securities Exemptions. The offer and sale of the Shares pursuant to this Agreement shall be exempt from the registration requirements of the Securities Act and the registration and/or qualification
requirements of all applicable state securities laws. 
  

 19 

 (e) No Suspension of Trading or Listing of Common Stock. The Common Stock of the Issuer (i) shall
be or listed on the AMEX and (ii) shall not have been suspended from trading on the AMEX. 
  
 (f) Approval of the AMEX. The AMEX shall have approved an application for listing of additional shares filed by the Issuer with respect to the Shares. 
  
 ARTICLE 9 
 MISCELLANEOUS 
  
 9.1 Defined Terms. As used herein the following terms shall have the following meanings: 
  
 “Affiliate” shall have the meaning ascribed to it in Rule 12b-2 of the General Rules and Regulations under the Exchange Act, as in effect on the
date hereof. 
  
 “AMEX” means the American Stock
Exchange. 
  
 “Articles of Incorporation” means the
Issuer’s Articles of Incorporation, as the same may be supplemented, amended or restated from time to time. 
  
 “Closing” has the meaning in Article 2 of this Agreement. 
  
 “Common Stock” has the meaning specified in the Recitals to this Agreement. 
  
 “Contract” means any indenture, lease, sublease, loan agreement,
mortgage, note, restriction, commitment, obligation or other contract, agreement or instrument. 
  
 “Exchange Act” means the Securities Exchange Act of 1934, as amended. 
  
 “GAAP” means generally accepted accounting principles in effect in the United States of America from time to time.

  
 “Governmental Authority” means any nation or
government, any state or other political subdivision thereof, and any entity or official exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government. 
  
 “Investor” has the meaning specified in the Recitals to this
Agreement. 
  
 “Issuer” means Axesstel, Inc., a Nevada
corporation. 
  
 “Lien” means any mortgage, pledge,
security interest, encumbrance, lien or charge of any kind (including any conditional sale or other title retention agreement, any lease in the nature thereof, and the filing of or agreement to give any financing statement under the Uniform
Commercial Code or comparable law or any jurisdiction in connection with such mortgage, pledge, security interest, encumbrance, lien or charge). 
  
 “Material Adverse Change (or Effect)” means a material and adverse change in (or effect on) the financial condition, properties, assets,
liabilities, rights, obligations, operations 

  

 20 

 
or business, of a Person and its Subsidiaries taken as a whole. As used in this Agreement with reference to the Issuer, “Material Adverse Change (or
Effect)” shall not include any change, event, violation, inaccuracy, circumstance or effect directly and primarily resulting from (i) changes in general economic conditions or changes affecting the industry generally in which the Issuer
operates (provided that such changes do not affect the Issuer in a substantially disproportionate manner) or (ii) changes in the trading prices for the Issuer’s Common Stock which are unrelated to a breach by the Issuer of this Agreement.

  
 “Person” means an individual, partnership,
corporation, business trust, joint stock company, estate, trust, unincorporated association, joint venture, Governmental Authority or other entity, of whatever nature. 
  
 “Purchase Price” has the meaning specified in Section 1.1 of this Agreement. 
  
 “Register,” “registered” and “registration”
refer to a registration of the offering and sale or resale of Common Stock effected by preparing and filing a registration statement in compliance with the Securities Act and the declaration or ordering of the effectiveness of such registration
statement. 
  
 “Registrable Securities” means (i) all
shares of Common Stock acquired by the Investor hereunder, (ii) all shares of Common Stock acquired by the Investor pursuant to the Prior Agreements, (iii) all shares of Common Stock acquired by the Investor from shareholders of the Issuer on or
prior to October 14, 2004, but only to the extent that such shares are restricted securities, as defined in Rule 144, and the Investor has advised the Issuer in writing of their acquisition by the close of business on October 14, 2004, (iv) 170,000
shares of Common Stock acquired by the Investor in open market transactions during February 2005 and (v) any other shares of Common Stock or other securities issued in respect of such shares by way of a stock dividend or stock split or in connection
with a combination or subdivision of the Common Stock or by way of a recapitalization, merger or consolidation or reorganization of the Issuer; provided, however, that, as to any particular securities, such securities will cease
to be Registrable Securities when they have been sold subsequent to their acquisition by the Investor pursuant to registration or in a transaction exempt from the registration and prospectus delivery requirements of the Securities Act under Section
4(1) thereof so that all transfer restrictions and restrictive legends with respect thereto are removed upon the consummation of such sale. 
  
 “Requirements of Law” means as to any Person, the articles of incorporation, by-laws or other organizational or governing documents of such
person, and any domestic or foreign and federal, state or local law, rule, regulation, statute or ordinance or determination of any arbitrator or a court or other Governmental Authority, in each case applicable to or binding upon such Person or any
of its properties or to which such Person or any of its property is subject. 
  
 “SEC” means the Securities and Exchange Commission. 
  
 “SEC Reports” has the meaning specified in Section 3.6 of this Agreement. 
  
 “Securities Act” means the Securities Act of 1933, as amended. 
  
 “Shares” has the meaning specified in Section 1.1 of this Agreement. 
  

 21 

 “Subsidiary” means as to any Person, a corporation or limited partnership of which more than
50% of the outstanding capital stock or partnership interests having full voting power is at the time directly or indirectly owned or controlled by such Person. 
  

9.2 Other Definitional Provisions. 
  
 (a) All terms defined in this Agreement shall have the defined meanings when used in any certificates, reports or other documents made or delivered
pursuant hereto or thereto, unless the context otherwise requires. 
  
 (b) Terms defined in the singular shall have a comparable meaning when used in the plural, and vice versa. 
  
 (c) All accounting terms shall have a meaning determined in accordance with GAAP. 
  
 (d) As used herein, the neuter gender shall also denote the masculine and feminine, and the masculine gender shall also
denote the neuter and feminine, where the context so permits. 
  
 (e) The words “hereof,” “herein” and “hereunder,” and words of similar import, when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement.

  
 9.3 Notices. All notices, requests, demands,
claims, and other communications hereunder shall be in writing and shall be delivered by certified or registered mail (first class postage pre-paid), guaranteed overnight delivery, or facsimile transmission if such transmission is confirmed by
delivery by certified or registered mail (first class postage pre-paid) or guaranteed overnight delivery, to the following addresses and Fax numbers (or to such other addresses or Fax numbers which such party shall subsequently designate in writing
to the other party): 
  
 (a) if to the Issuer to: 
  
 Axesstel, Inc. 
 6815 Flanders Drive, Suite 210 
 San Diego, California 92121 
 Attention: David Morash, President and Chief Operating Officer

 Fax: (858) 625-2110 
  
 With a copy to: 
  
 Helen Chao, Esq., General Counsel 
 Fax: (858) 625-2110 
  

 22 

 And a copy to: 
  
 John J. Hentrich, Esq. 
 Sheppard Mullin Richter & Hampton, LLP 
 12544 High Bluff Drive, Suite 300 
 San Diego, California 92130 
 Fax: (858) 509-3691 
  
 (b) if to the Investor, to the address set forth next to its name on the signature page hereto. 
  
 Each such notice or other communication shall for all purposes of this Agreement be treated
as effective or having been given when delivered if delivered by hand, by messenger or by courier, or if sent by facsimile, upon confirmation of receipt. 
  
 9.4 Stock Splits, Dividends and other Similar Events. The provisions of this Agreement shall be appropriately adjusted to reflect any stock
split, stock dividend, reorganization or other similar event that may occur with respect to the Issuer after the date hereof. 
  
 9.5 Entire Agreement. This Agreement and other documents delivered at the Closing pursuant hereto, contain the entire understanding of the
parties in respect of its subject matter and supersedes all prior agreements and understandings between or among the parties with respect to such subject matter. 
  
 9.6 Expenses; Taxes. Except as otherwise provided in this Agreement, the parties shall pay their own fees and
expenses, including their own counsel fees, incurred in connection with this Agreement or any transaction contemplated hereby. Any sales tax, stamp duty, deed transfer or other tax (except taxes based on the income of the Investor) arising out of
the initial issuance of the Shares (but not with respect to subsequent transfers) by the Issuer to the Investor and consummation of the transactions contemplated by this Agreement shall be paid by the Issuer. 
  
 9.7 Amendment; Waiver. No provision of this Agreement may be
waived or amended except in a written instrument signed, in the case of an amendment, by the Issuer and Investors holding, or obligated to purchase, at least two thirds of the Registrable Securities or, in the case of a waiver, by the party against
whom enforcement of any such waiver is sought. No failure to exercise, and no delay in exercising, any right, power or privilege under this Agreement shall operate as a waiver, nor shall any single or partial exercise of any right, power or
privilege hereunder preclude the exercise of any other right, power or privilege. No waiver of any breach of any provision shall be deemed to be a waiver of any preceding or succeeding breach of the same or any other provision, nor shall any waiver
be implied from any course of dealing between the parties. No extension of time for performance of any obligations or other acts hereunder or under any other agreement shall be deemed to be an extension of the time for performance of any other
obligations or any other acts. The rights and remedies of the parties under this Agreement are in addition to all other rights and remedies, at law or equity, that they may have against each other. 
  

 23 

 9.8 Binding Effect; Assignment. The rights and obligations of this Agreement shall bind and
inure to the benefit of the parties and their respective successors and legal assigns. The rights and obligations of this Agreement may not be assigned by any party without the prior written consent of the other party. 
  
 9.9 Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be an original but all of which together shall constitute one and the same instrument. 
  
 9.10 Headings. The headings contained in this Agreement are for convenience of reference only and are not to be given any legal effect and
shall not affect the meaning or interpretation of this Agreement. 
  
 9.11 Governing Law; Interpretation. This Agreement shall be construed in accordance with and governed for all purposes by the laws of the State of California applicable to contracts executed and to be wholly performed within
such State. 
  
 9.12 Severability. The parties
stipulate that the terms and provisions of this Agreement are fair and reasonable as of the date of this Agreement. However, any provision of this Agreement shall be determined by a court of competent jurisdiction to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated. If, moreover, any of those provisions shall for any
reason be determined by a court of competent jurisdiction to be unenforceable because excessively broad or vague as to duration, activity or subject, it shall be construed by limiting, reducing or defining it, so as to be enforceable. 
  
 9.13 Amendment to Prior Agreements. Each of the Prior
Agreements is hereby amended to delete Article 6 (Registration Rights), and the definition of “Registrable Securities” set forth in Section 9.1 (Defined Terms) of each such agreement. 
  
 (Signatures on next page) 
  

 24 

 IN WITNESS WHEREOF, the parties hereto have caused this Stock Purchase Agreement to be duly
executed and delivered as of the date set forth below. 
  

					
	 COMVENTURES V, L.P.,
 COMVENTURES V-B CEO
FUND, L.P., and
 COMVENTURES V ENTREPRENEURS’ FUND, L.P.
 By: COMVEN V, L.L.C., each of their General Partner

			
	By:	 	 /s/ Roland Van der Meer

	 	 Dated: March 3, 2005
  

	Name:	 	Roland Van der Meer	 	 
	Title:	 	Member	 	 

  
 305 Lytton Avenue 
 Palo Alto, CA 94301 
 Attention: Roland Van der Meer, Partner 
 Fax: 650-325-9608  
  

					
	AXESSTEL, INC.	 	 
			
	By:	 	 /s/ David Morash

	 	 Dated: March 3, 2005
  

	 	 	 David Morash
 President and Chief Operating
Officer
	 	 

  

 25

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