8-K/A

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Amendment No. 1
to
FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported)
October 18, 2007

VIEWPOINT CORPORATION
(Exact name of registrant as specified in its charter)

Delaware	0-27168	95-4102687
(state or other juris-	(Commission	(I.R.S. Employer
diction of incorporation)	File Number)	(Identification No.)
498 Seventh Avenue, Suite 1810, New York, NY		10018
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (212) 201-0800

N/A

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01 Entry into a Material Definitive Agreement.

Purchase Agreement with respect to Springbox Ltd.

          On October 18, 2007, Viewpoint Corporation (“Viewpoint”) entered into a Purchase Agreement to acquire all of the outstanding partnership interests of Springbox, Ltd. (“Springbox”). Springbox is an Austin-based interactive marketing firm with digital web marketing and creative solutions. Springbox is expected to generate approximately $6.0 million in gross revenue in the calendar year 2007. The agreement contains customary representations, warranties and covenants of the sellers and Viewpoint. The transaction is also subject to customary closing conditions and is expected to close in the fourth quarter of 2007.

          Under the terms of the agreement, Viewpoint will be obligated, at the closing, to pay approximately $5.5 million in a combination of stock and cash. The amount of cash payable by Viewpoint is subject to adjustment based on the net book value of Springbox as of the closing date of the transaction and (ii) the subsequent receipt by Viewpoint of accounts receivable outstanding on the closing date of the transaction. To the extent the net book value as of the closing date is greater than $1.3 million Viewpoint is required to pay additional funds to the sellers and to the extent that the net book value of Springbox at the closing is less than $1.3 million, the sellers are required to pay Viewpoint the difference. In addition, the sellers of Springbox are entitled to an EBITDA based earnout. Viewpoint has the option to pay shares of common stock or the fair market value of such shares in order to satisfy any obligation pursuant to the earnout.

          The foregoing is a summary of the terms of the Purchase Agreement and does not purport to be complete and is qualified in its entirety by reference to the full text of the Purchase Agreement, a copy of which is filed as Exhibit 2.1 hereto and is incorporated herein by reference.

Securities Purchase Agreement

          In addition, Viewpoint entered into a Securities Purchase Agreement with certain accredited investors, dated as of October 18, 2007, pursuant to which Viewpoint issued 15,714,285 shares of Viewpoint common stock in a private placement to such accredited investors at a purchase price of $0.70 per share (resulting in aggregate gross proceeds of $11,000,000). The investors in the transaction also received warrants to purchase an additional 4,714,285 shares of common stock at an exercise price of $0.84 per share (subject to certain adjustments). Such warrants are not exercisable for six months following issuance and have an aggregate term of five and one-half years.

          The securities offered and sold in the private placement have not been registered under the Securities Act of 1933, as amended, and were sold in reliance upon the exemption from securities registration afforded by Regulation D. Each investor represented to Viewpoint that it is an “Accredited Investor”, as defined in Rule 501 of Regulation D under the Securities Act. In connection with the private placement, Viewpoint entered into a Registration Rights Agreement

with the investors pursuant to which Viewpoint is required to file a registration statement with the SEC covering the shares within 45 days of the closing of the private placement.

          The foregoing is a summary of the terms of the Securities Purchase Agreement, the Registration Rights Agreement and the Warrants and does not purport to be complete and is qualified in its entirety by reference to the full text of the Securities Purchase Agreement, the Registration Rights Agreement and the Form of Warrant, copies of which are filed as Exhibit 10.1, Exhibit 10.2 and Exhibit 10.3. and are incorporated herein by reference.

          Viewpoint issued a press release announcing the execution of the definitive documentation with respect to the Springbox acquisition and the closing of the private placement transaction on October 19, 2007. A copy of the press release is attached hereto as Exhibit 99.1.

Item 3.02 Unregistered Sale of Equity Securities

          The disclosures set forth under Item 1.01 of this Current Report on Form 8-K are incorporated herein by reference.

Item 9.01 Financial Statements and Exhibits.

(c)	Exhibits
	The following exhibits are filed herewith:
	2.1	Purchase Agreement, dated as of October 18, 2007 by and among Springbox GP, LLC, the limited partners set forth on Schedule A attached thereto and Viewpoint Corporation.
	10.1	Securities Purchase Agreement, dated as of October 18, 2007, by and between Viewpoint Corporation and the investors listed on the Schedule of Purchasers attached thereto.
	10.2	Registration Rights Agreement, dated as of October 18, 2007, by and between Viewpoint Corporation and the investors listed on the signature pages attached thereto.
	10.3	Form of Warrant for Common Stock of Viewpoint Corporation.
	99.1	Press release issued by Viewpoint Corporation on October 19, 2007.

SIGNATURES

          Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

VIEWPOINT CORPORATION

       /s/ Christopher C. Duignan

Christopher C. Duignan

Chief Financial Officer

Dated: October 19, 2007

EX-2.1

EX-2.1

EXECUTION COPY

PURCHASE AGREEMENT

dated as of October 18, 2007

by and among

SPRINGBOX GP, LLC,

THE LIMITED PARTNERS SET FORTH ON SCHEDULE A ATTACHED HERETO

and

VIEWPOINT CORPORATION

with respect to all the partnership interests of

SPRINGBOX, LTD.

TABLE OF CONTENTS

     This Table of Contents is not part of the Agreement to which it is attached but is inserted for convenience only.

		Page
ARTICLE I PURCHASE AND SALE		1
1.01	Purchase and Sale of the Interests	1
1.02	Purchase Price; Adjustment	1
1.03	Accounts Receivable Payment	3
1.04	Additional Consideration – Baseline Earnout	3
1.05	Additional Consideration – Excess EBITDA Earnout	4
1.06	Allocation of Consideration	4
1.07	Principal Market Regulation	4
1.08	Closing	5
1.09	Further Assurances; Post-Closing Cooperation	5
1.10	Transfer Taxes	6
1.11	Legends on Purchased Shares; Restriction on Transfer	6
ARTICLE II REPRESENTATIONS AND WARRANTIES OF SELLERS		7
2.01	Authority	7
2.02	Organization, Authority and Qualification of the Company	7
2.03	Subsidiaries	8
2.04	Capitalization	8
2.05	No Conflicts	8
2.06	Governmental Approvals and Filings	9
2.07	Books and Records	9
2.08	Financial Statements	9
2.09	Absence of Changes	9
2.10	No Undisclosed Liabilities	11
2.11	Taxes	11
2.12	Legal Proceedings	12
2.13	Compliance With Laws and Orders	12
2.14	Benefit Plans; ERISA	12
2.15	Real Property	15
2.16	Tangible Personal Property; Investment Assets	16
2.17	Intellectual Property Rights	16
2.18	Contracts	16
2.19	Licenses	18
2.20	Insurance	18
2.21	Affiliate Transactions	18
2.22	Employees; Labor Relations	19
2.23	Substantial Customers and Suppliers	19
2.24	Bank and Brokerage Accounts; Investment Assets	20
2.25	No Power of Attorney	20

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2.26	Nature of Purchase	20
2.27	Accredited Investor	20
2.28	Brokers	20
2.29	Disclosure	20
ARTICLE III REPRESENTATIONS AND WARRANTIES OF PURCHASER		21
3.01	Organization; Authority	21
3.02	No Conflicts	21
3.03	Governmental Approvals and Filings	21
3.04	Legal Proceedings	22
3.05	Capital Stock	22
3.06	Brokers	22
ARTICLE IV COVENANTS OF SELLERS		22
4.01	Regulatory and Other Approvals	22
4.02	Investigation by Purchaser	23
4.03	No Solicitations	23
4.04	Conduct of Business	23
4.05	Financial Statements	24
4.06	Employee Matters	24
4.07	Certain Restrictions	25
4.08	Affiliate Transactions	26
4.09	Books and Records	26
4.10	Noncompetition	26
4.11	Notice and Cure	27
4.12	Fulfillment of Conditions	27
ARTICLE V COVENANTS OF PURCHASER		28
5.01	Regulatory and Other Approvals	28
5.02	Notice and Cure	28
5.03	Fulfillment of Conditions	28
ARTICLE VI CONDITIONS TO OBLIGATIONS OF PURCHASER		29
6.01	Representations and Warranties	29
6.02	Performance	29
6.03	Sellers’ Certificate	29
6.04	Orders and Laws	29
6.05	Regulatory Consents and Approvals	29
6.06	Third Party Consents	29
6.07	Financing	30
6.08	Line of Credit	30
6.09	Non-Compete Agreements	30
6.10	Employment Agreements	30
6.11	Proceedings	30

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ARTICLE VII CONDITIONS TO OBLIGATIONS OF SELLERS		30
7.01	Representations and Warranties	30
7.02	Performance	30
7.03	Purchaser’s Certificate	30
7.04	Orders and Laws	31
7.05	Regulatory Consents and Approvals	31
7.06	Third Party Consents	31
7.07	Proceedings	31
7.08	Financing	31
7.09	Line of Credit	31
7.10	Employment Agreements	31
ARTICLE VIII SURVIVAL OF REPRESENTATIONS, WARRANTIES, COVENANTS AND
AGREEMENTS		32
8.01	Survival of Representations, Warranties, Covenants and Agreements	32
ARTICLE IX TAX MATTERS		32
9.01	Indemnity	32
9.02	Tax Returns and Payments	33
9.03	Refunds	33
9.04	Contests	33
9.05	Cooperation and Exchange of Information	34
9.06	Miscellaneous	35
ARTICLE X INDEMNIFICATION		35
10.01	Indemnification	35
10.02	Recourse	36
10.03	Method of Asserting Claims	36
10.04	Tax Matters	39
ARTICLE XI TERMINATION		39
11.01	Termination	39
11.02	Effect of Termination	39
ARTICLE XII DEFINITIONS		40
12.01	Definitions	40
ARTICLE XIII MISCELLANEOUS		48
13.01	Notices	48
13.02	Entire Agreement	49
13.03	Expenses	49
13.04	Public Announcements	49
13.05	Confidentiality	49
13.06	Waiver	50

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13.07	Amendment		50
13.08	No Third Party Beneficiary		50
13.09	No Assignment; Binding Effect		50
13.10	Headings		50
13.11	Consent to Jurisdiction and Venue		51
13.12	Invalid Provisions		51
13.13	Governing Law		51
13.14	Counterparts		51
13.15	Representation		51
		EXHIBITS
EXHIBIT A		Schedule of Limited Partners
EXHIBIT B		Sellers’ Certificate
EXHIBIT C		Form of Non-Compete Agreement
EXHIBIT D		Purchaser’s Certificate
EXHIBIT E		Form of Employment Agreements
EXHIBIT 1.05		Allocation of Consideration
EXHIBIT 10.01		Indemnification Percentage of Principals

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     This PURCHASE AGREEMENT dated as of October 18, 2007 (this “Agreement”), is made and entered into by and among Springbox GP, LLC a Texas limited liability company (the “General Partner”) and the general partner of Springbox Ltd., a Texas limited partnership (the “Company”), Dan Isaacs, Adam Moore, Cy Huckaba, Larry Isaacs and Gary Moore (the “Limited Partners” and, together with the General Partner, the “Sellers”), and Viewpoint Corporation, a Delaware corporation (“Purchaser”). Capitalized terms not otherwise defined herein have the meanings set forth in Section 12.01.

     WHEREAS, each Seller owns that percentage of the Company set forth adjacent to its name on the Schedule of Limited Partners attached as Exhibit A hereto,

     WHEREAS, Sellers own all of the issued and outstanding general and limited partnership interests (the “Interests”) of the Company; and

     WHEREAS, Sellers desire to sell to Purchaser, and Purchaser desires to purchase from Sellers, all of the Interests on the terms and subject to the conditions set forth in this Agreement;

     NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

ARTICLE I

PURCHASE AND SALE

     1.01Purchase and Sale of the Interests. Upon the terms and subject to the conditions of this Agreement, at the Closing, Sellers shall sell to Purchaser, and Purchaser shall purchase from Sellers, the Interests.

      1.02Purchase Price; Adjustment.

     (a)Purchase Price. In consideration for the transfer of the Interests to Purchaser at the Closing, Purchaser will (i) pay to Sellers cash in the amount of $4,950,000 (the “Initial Cash Payment”), subject to adjustment as provided in Section 1.02 and 1.03 (the Initial Cash Payment, as adjusted pursuant to Sections 1.02 and 1.03, the “Cash Payment”) and (ii) issue to Sellers a number of whole shares (ignoring fractions) of Purchaser Common Stock determined by dividing (x) $550,000 by (y) the Per Share Price (the “Purchased Shares” and, together with the Cash Payment and the Earnout Shares (as defined below), the “Purchase Price”).

(b)      Purchase Price Adjustment to Reflect Net Book Value.

     (i) Following the Closing Date, representatives of Purchaser and/or their independent public accountants (“Purchaser’s Accountants”) observed by Sellers and/or Sellers’ independent public accountants (“Sellers’ Accountants”) shall expeditiously perform such procedures with respect to the Company as are necessary and appropriate to prepare and review the Closing Date Financial Statements (as defined below). Not later than ninety (90) days following the Closing Date, Purchaser shall deliver to Sellers (A) a balance sheet of the Company as of the Closing Date (the “Closing Date Balance Sheet”),

and the related statement of operations for the period commencing December 31, 2006 and ending on the Closing Date (together with the Closing Date Balance Sheet, the “Closing Date Financial Statements”), which Closing Date Financial Statements shall (I) be prepared in accordance with the Books and Records of the Company and (II) present fairly the financial position of the Company as of the Closing Date and the results of its operations for the applicable period in accordance with GAAP and those accounting policies and practices used in the preparation of the financial statements of Purchaser as set forth on Exhibit 1.02(b)(ii) and (B) a certificate of Purchaser (the “Closing Date Certificate”), which shall set forth Purchaser’s good faith calculation of the Net Book Value of the Company as of the Closing Date (the “Closing Date Net Book Value”) as determined from and supported by the Closing Date Balance Sheet. To the extent requested by Purchaser, Sellers shall, prior to the delivery of the Closing Date Balance Sheet, make available to Purchaser and Purchaser’s Accountants such of the Books and Records of the Company in the possession of Sellers as shall be reasonably necessary for the preparation of the Closing Date Balance Sheet. Sellers’ Accountants may participate in and observe the preparation of the Closing Date Balance Sheet. Purchaser and Purchaser’s Accountants shall make all of their work papers and other relevant documents in connection with the preparation of the Closing Date Balance Sheet available to Sellers and Sellers’ Accountants, and shall make the persons in charge of the preparation of the Closing Date Balance Sheet available for reasonable inquiry by Sellers and Sellers’ Accountants.

     (ii)Sellers shall notify Purchaser in writing within forty-five (45) days following receipt of the Closing Date Certificate if they do not agree with the Closing Date Net Book Value set forth thereon, in which case Purchaser and Purchaser’s Accountants on the one hand, and Sellers and Sellers’ Accountants on the other, will use good faith efforts during the ten (10) day period following the date such written notice was received by Purchaser to resolve any differences they may have as to the Closing Date Net Book Value. Such written notice will identify with specificity the calculations with which Sellers disagree or other bases for such disagreement. If Purchaser and Sellers cannot reach agreement during such ten day period, their disagreements shall be promptly submitted to an independent, nationally-recognized public accounting firm jointly selected by Purchaser’s Accountants and Sellers’ Accountants (the “Independent Accountant”), which shall conduct such additional review as is necessary to resolve the specific disagreements referred to it and, based thereon, shall determine the Closing Date Net Book Value. The review of the Independent Accountant will be restricted as to scope to address only those matters as to which Purchaser and Sellers have not reached agreement pursuant to the preceding sentence. The final determination as to any matter reviewed by the Independent Accountant shall be within the range supplied by Purchaser and Sellers. The Independent Accountant’s determination of the Closing Date Net Book Value, which shall be completed as promptly as practicable but in no event later than thirty (30) days following its selection, shall be confirmed by the Independent Accountant in writing to, and shall be final and binding on, Purchaser and Sellers for purposes of this paragraph (b).

     (iii)To the extent that the Closing Date Net Book Value determined in accordance with subparagraph (ii) or (iii), as the case may be (the “Final Net Book

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Value”), is greater than $1,300,000 (the amount by which the Final Net Book Value exceeds $1,300,000 being herein referred to as the “Excess Amount”), Purchaser shall be required to pay to Sellers an amount in cash equal to the Excess Amount by wire transfer of immediately available funds to Sellers’ account. To the extent that the Final Net Book Value is less than $1,300,000 (the difference between $1,300,000 and the Final Net Book Value being herein referred to as the “Deficiency Amount”), then, Sellers shall be required to pay Purchaser an amount in cash equal to the Deficiency Amount by wire transfer of immediately available funds to Purchaser’s account.

     (iv)The fees and expenses of the Independent Accountant shall be prorated between Sellers and Purchaser in proportion to the amounts in dispute resolved against each of them.

      1.03Accounts Receivable Payment.

     (a)On the Closing Date, Sellers are providing Purchaser with a certificate of Sellers setting forth in detail (i) the face value of the Accounts Receivable of the Company as of the close of business on the day prior to the Closing Date (the “Closing Date Accounts Receivable”) and (ii) the amount of any bad debt reserves (the “Bad Debt Reserves”) with respect to the Closing Date Accounts Receivable.

     (b)Purchaser shall, on and after the Closing Date, use commercially reasonable efforts to collect the Closing Date Accounts Receivable. Purchaser shall, after the Closing Date, also provide Sellers with reports from time to time as to the Closing Date Accounts Receivable collected.

     (c)Not later than the fifth Business Day following the 180th day after the Closing Date, Purchaser shall provide Sellers with a written notice (the “Receivables Notice”) describing in reasonable detail all uncollected Closing Date Accounts Receivable, if any, and the total face amount thereof. Purchaser will sell, and Sellers agree to purchase, uncollected Closing Date Accounts Receivable specified by Purchaser, less the Bad Debt Reserves, for an aggregate purchase price equal to the total face amount thereof. After such uncollected Closing Date Accounts Receivable are purchased by Sellers, Purchaser will continue to make efforts to collect such Closing Date Accounts Receivable in the normal course of business, and any payments received thereon by Purchaser will be remitted to Sellers after deducting any expenses incurred in connection with such collection. To the extent that Purchaser collects Closing Date Accounts Receivable in excess of an amount equal to (x) the aggregate face value of the Closing Date Accounts Receivable less (y) the Bad Debt Reserves, Purchaser shall, within five (5) Business Days following such collection, remit to Sellers one hundred percent (100%) of such excess amount.

     (d)Any amounts payable by Sellers to Purchaser pursuant to Section 1.03(c) above shall be paid in cash by Sellers to Purchaser within five (5) Business Days following the receipt of the Receivables Notice.

     1.04Additional Consideration – Baseline Earnout. As additional consideration, Purchaser shall deliver to Sellers one share of Purchaser Common Stock for each dollar of

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EBITDA earned by the Company for each six month period commencing on January 1, 2008 and ending on December 31, 2010 (such shares, as adjusted pursuant to this Section 1.04, the “Baseline Earnout Shares”); provided, however, that the maximum number of Baseline Earnout Shares to be issued shall be two million five hundred thousand (2,500,000) shares. Any such Baseline Earnout Shares (and the amount of EBITDA) shall be calculated in good faith by Purchaser on a semi-annual basis on June 30 and December 31 of the relevant year using GAAP and the same accounting policies and practices used in the preparation of the financial statements of Purchaser and, subject to Section 1.07 below, such shares shall be delivered to Sellers within thirty (30) days after the amount of EBITDA has been determined for the relevant six month period. To the extent that EBITDA is negative for any applicable six month period, Purchaser may offset any future issuances of Baseline Earnout Shares by an amount equal to one share per each dollar of negative EBITDA.

     1.05Additional Consideration – Excess EBITDA Earnout. As additional consideration, Purchaser shall deliver to Sellers eight-tenths of one share (0.8) of Purchaser Common Stock for each dollar of EBITDA earned by the Company in excess of two million five hundred thousand dollars ($2,500,000) for the period commencing on January 1, 2008 and ending on December 31, 2009 (such shares, as adjusted pursuant to this Section 1.05, the “Excess Earnout Shares” and, together with the “Baseline Earnout Shares”, the “Earnout Shares”); provided, however, that the maximum number of Excess Earnout Shares to be issued shall be two million five hundred thousand (2,500,000) shares. Any such Excess Earnout Shares (and the amount of EBITDA) shall be calculated in good faith by Purchaser on December 31, 2009 using GAAP and the same accounting policies and practices used in the preparation of the financial statements of Purchaser and, subject to Section 1.07 below, such shares shall be delivered to Sellers within thirty (30) days after the amount of EBITDA has been determined for the relevant two year period. To the extent that EBITDA is negative for any applicable six month period, Purchaser may offset any future issuances of Excess Earnout Shares by an amount equal to eight-tenths of one share (0.8) per each dollar of negative EBITDA. The obligations of Purchaser to deliver the Baseline Earnout Shares and the Excess Earnout Shares pursuant to Sections 1.04 and 1.05 shall be subject to the receipt of representations substantially similar to those provided for in Sections2.26 and 2.27 and shall be binding on any successor or assign of Purchaser pursuant to Section 13.09. The parties acknowledge and agree that Cy Huckaba (“Huckaba”) shall be an “at-will” employee. If Huckaba is unable to make the representations provided for in Sections2.26 and 2.27 or the Company is otherwise unable to issue the Earnout Shares pursuant to a valid exemption from registration under the Securities Act of 1933, as determined by Purchaser in its reasonable discretion, and Purchaser terminates his employment with Cause, or if Huckaba terminates his employment with Purchaser without Good Reason, Huckaba shall forfeit any future right to receive Earnout Shares or cash instead of Earnout Shares; and instead such right to receive Earnout Shares or cash instead of Earnout Shares shall automatically transfer to the remaining Principals. For purposes of this Section 1.05 only, the following definitions shall apply:

(i)   “Cause” means the occurrence of any of the following:

       (1)     the willful and continuing refusal of Huckaba to follow the lawful directives of his supervisor, provided that such directives are consistent with Huckaba’s title and position.

       (2)    conduct that is intentional and known by Huckaba to be materially harmful or potentially materially harmful to Purchaser's best interest, (3)gross negligence in the performance of, or willful disregard of, Huckaba’s obligations hereunder,

       (4)     Huckaba’s conviction of any felony, or

       (5)     Huckaba’s commission of any act of dishonesty or moral turpitude which, in the good faith opinion of the Board of Directors of Purchaser, is materially detrimental to Purchaser;

      provided, however, that in the event of a termination due to one or more of the reasons set forth in clauses (i)(1), (2) and/or (3), Huckaba shall be provided with a period of five (5) business days from the date Purchaser gives notice of such termination to effectively cure or remedy such reason or reasons (unless such cure or remedy is not possible).

(ii)  “Good Reason” means the occurrence of any of the following:

      (1)any significant diminution of Huckaba’s duties without his consent; provided, however that this provision shall not apply in connection with or otherwise relating to a Change in Control (as defined in Exhibit E attached hereto);

      (2)    Any change in Huckaba’s principal place of employment of more than thirty-five (35) miles; or

      (3)      any reduction in Huckaba's Base Salary;

      provided, however, that (i) Huckaba must provide written notice to Purchaser within 30 days of an event purporting to constitute Good Reason and (ii) in the event of a termination for Good Reason, Purchaser shall be provided with a period of five (5) business days from the date Huckaba gives notice of such termination to effectively cure or remedy such reason or reasons; and if Purchaser fails to cure or remedy the reason or reasons for termination, Huckaba's Good Reason termination shall be effective as of the date the notice was given.

     1.06Allocation of Consideration. The Cash Payment, the Purchased Shares and the Earnout Shares shall be paid to Sellers in accordance with the schedule set forth on Exhibit 1.06.

     1.07Principal Market Regulation. Notwithstanding anything to the contrary, Purchaser shall at its sole option be entitled to either issue Earnout Shares or pay cash in exchange for such Earnout Shares, at a price per Earnout Share equal to the Fair Market Value. Notwithstanding anything to the contrary, Purchaser shall not be obligated to issue any Earnout Shares and Sellers shall not have the right to receive any Earnout Shares if the issuance of such Earnout Shares would exceed the aggregate number of shares of Common Stock which Purchaser may issue without breaching Purchaser's obligations under the rules or regulations of the Principal Market, except that such limitation shall not apply in the event that Purchaser (a) obtains the approval of its stockholders as required by the applicable rules of the Principal

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Market for issuances of shares of Common Stock in excess of such amount or (B) obtains a written opinion from outside counsel to Purchaser that such approval is not required.

     1.08Closing. Subject to the terms and conditions of this Agreement, the sale and purchase of the Interests contemplated by this Agreement shall take place at a closing (the “Closing”) to be held at the offices of Purchaser, at 498 Seventh Avenue, Suite 1810, New York, NY 10018 at 10:00 A.M., local time on the fifth Business Day following the satisfaction or waiver of all conditions to the obligations of the parties set forth in Articles VI and VII, or at such other place or at such other time or on such other date as Purchaser and Sellers mutually agree (the day on which the Closing takes place being the “Closing Date”).

      1.09Further Assurances; Post-Closing Cooperation.

     (a)On the Closing Date, Sellers will deliver or make available to Purchaser at the offices of the Company all of the Books and Records of the Company, and if at any time after the Closing Sellers discover in their possession or under their control any other Books and Records of the Company, Sellers will forthwith deliver such Books and Records to Purchaser.

     (b)At any time or from time to time after the Closing, at Purchaser’s request and without further consideration, Sellers shall execute and deliver to Purchaser such other documents and instruments, provide such materials and information and take such other actions as Purchaser may reasonably request in order more effectively to vest title to the Interests in Purchaser and, to the full extent permitted by Law, to put Purchaser in actual possession and operating control of the Company and its Assets and Properties and Books and Records.

     (c)Following the Closing, each party will afford the other party, its counsel and its accountants, during normal business hours, reasonable access to the books, records and other data relating to the Business or Condition of the Company in its possession and the right to make copies and extracts therefrom, to the extent that such access may be reasonably required by the requesting party in connection with (i) the preparation of Tax Returns, (ii) compliance with the requirements of any Governmental or Regulatory Authority, (iii) the determination or enforcement of the rights and obligations of any party to this Agreement or (iv) in connection with any actual or threatened Action or Proceeding. Further, each party agrees for a period extending six (6) years after the Closing Date not to destroy or otherwise dispose of any such books, records and other data unless such party shall first offer in writing to surrender such books, records and other data to the other party and such other party shall not agree in writing to take possession thereof during the ten (10) day period after such offer is made.

     (d)If, in order properly to prepare its Tax Returns, other documents or reports required to be filed with Governmental or Regulatory Authorities or its financial statements or to fulfill its obligations hereunder, it is necessary that a party be furnished with additional information, documents or records relating to the Business or Condition of the Company not referred to in paragraph (c) above, and such information, documents or records are in the possession or control of the other party, such other party shall use its best efforts to furnish or make available such information, documents or records (or copies thereof) at the recipient’s request, cost and expense.

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     (e)Notwithstanding anything to the contrary contained in this Section, if the parties are in an adversarial relationship in litigation or arbitration, the furnishing of information, documents or records in accordance with any provision of this Section shall be subject to applicable rules relating to discovery.

     1.10Transfer Taxes. Any Transfer Taxes imposed in connection with the transactions contemplated by this Agreement will be paid 50% by Purchaser and 50% by Sellers. Purchaser shall file all Tax Returns with respect to Transfer Taxes and Sellers agree to cooperate with Purchaser in connection with the filing of any such Tax Returns and obtaining any available exemptions from Transfer Taxes.

      1.11Legends on Purchased Shares; Restriction on Transfer.

     (a)Upon original issuance thereof, and until such time as the same is no longer required hereunder or under the applicable requirements of the Securities Act or applicable state securities or blue sky laws, any certificate issued representing any of the Purchased Shares, the Baseline Earnout Shares or the Excess Earnout Shares, including, without limitation, all certificates issued upon transfer or in exchange thereof or in substitution therefor, shall bear the following legend:

“THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS THEY ARE SO REGISTERED OR UNLESS AN EXEMPTION FROM REGISTRATION IS AVAILABLE.”

     (b)Purchaser may make a notation on its records or give instructions to any transfer agents or registrars for the Purchased Shares in order to implement the restrictions on transfer set forth in this Section.

     (c)In connection with any sale, transfer or other disposition of any of the Purchased Shares (a “Purchased Shares Transfer”), the transferor shall provide Purchaser with such customary information as Purchaser may reasonably request to assure that such Purchased Shares Transfer complies fully with applicable securities and other laws.

     (d)Purchaser shall not incur any liability for any delay in recognizing any Purchased Shares Transfer if Purchaser in good faith reasonably believes that, based upon the written advice of outside counsel, such Purchased Shares Transfer may have been or would be in violation in any material respect of the provisions of the Securities Act, applicable state securities or blue sky laws, or this Agreement.

     (e)After such time as the legend described by this Section 1.11 is no longer required on any certificate or certificates representing the Purchased Shares, upon the request of Sellers, Purchaser will cause such certificate or certificates to be exchanged for a certificate or certificates that do not bear such legend.

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     (f)Notwithstanding anything to the contrary contained herein, Sellers acknowledge and agree that Sellers shall be prohibited from the sale, transfer, other disposal or encumbrance of any of the Purchased Shares for a period of one year from the Closing Date. Subject to the provisions of this Agreement and any restrictions on the transfer of the Purchased Shares pursuant to law, rule or regulation, the Principals shall be restricted from transferring the Purchased Shares for a period of two years following the Closing Date.

ARTICLE II

REPRESENTATIONS AND WARRANTIES OF SELLERS

     Except as disclosed on the Disclosure Schedule (with such disclosure providing a direct reference to the Section to which it relates), Sellers hereby represent and warrant to Purchaser as follows:

     2.01Authority. Sellers have full right, power, authority and legal capacity to execute and deliver this Agreement, to perform their obligations hereunder and to consummate the transactions contemplated hereby. This Agreement has been duly and validly executed and delivered by Sellers, and (assuming due authorization, execution and delivery by Purchaser) this Agreement constitutes, legal, valid and binding obligations of Sellers enforceable against Sellers in accordance with its respective terms, except as the same may be limited by bankruptcy, insolvency, moratorium or similar rights whether at a proceeding at law or in equity.

2.02 Organization, Authority and Qualification of the Company.
	(a) The Company is a partnership validly existing and in good standing under the Laws of the State of Texas, and has full power and authority to conduct its business as and to the extent now conducted and to own, use and lease its Assets and Properties. The Company is duly qualified, licensed or admitted to do business and is in good standing in those jurisdictions specified in Section 2.02 of the Disclosure Schedule, which are the only jurisdictions in which the ownership, use or leasing of its Assets and Properties, or the conduct or nature of its business, makes such qualification, licensing or admission necessary, except for those jurisdictions in which the failure to be so qualified, licensed or admitted shall not have a material adverse impact on the Company, its business or its Assets and Properties.
	(b)All actions taken by the Company in connection with this Agreement and the transactions contemplated hereby have been duly authorized, and the Company has not taken any action in connection herewith that in any respect conflicts with, constitutes a default under or results in a violation of any provision of its certificate of formation or limited partnership agreement. True and correct copies of the certificate of formation and limited partnership agreement of the Company, each as in effect on the date hereof have been delivered by Sellers to Purchaser.

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     2.03Subsidiaries. There are no subsidiaries, corporations, partnerships, limited liability companies, joint ventures, associations or other entities in which the Company owns, of record or beneficially, any direct or indirect equity or other ownership interest or any right (contingent or otherwise) to acquire the same. The Company is not a member of (nor is any part of the business conducted through) any partnership or limited liability company (or similar entity) is the Company a participant in (nor is any part of the Business conducted through) any joint venture or similar arrangement, and there are no contractual obligations of the Company to provide funds to, or make any investment (in the form of a loan, capital contribution or otherwise) in, any other Person.

     2.04Capitalization. Exhibit A sets forth a complete and accurate list of all General Partners and Limited Partners in the Company and their respective ownership interests, none of which were issued in violation of any preemptive rights. Except as set forth in Section 2.04(a) of the Disclosure Schedule, there are no options, warrants, convertible securities or other rights, agreements, arrangements or commitments of any character relating to the Interests or obligating any of Sellers or the Company to issue or sell any Interests, or any other interest in the Company. There are no outstanding contractual obligations of the Company to repurchase, redeem or otherwise acquire any Interests from any Person. The Interests constitute all of the issued and outstanding equity or ownership interests in the Company and are owned of record and beneficially by Sellers free and clear of all Encumbrances. There are no voting trusts, proxies or other agreements or understandings in effect with respect to the voting or transfer of any of the Interests. Ownership of the Interests is not evidenced by any certificates or other instruments.

     2.05No Conflicts. The execution and delivery of this Agreement by Sellers does not, and the performance by Sellers of their obligations under this Agreement and the consummation of the transactions contemplated hereby will not:

     (a)conflict with or result in a violation or breach of any of the terms, conditions or provisions of the limited partnership agreement (or other comparable organizational documents) of the Company;

     (b)subject to obtaining the consents, approvals and actions, making the filings and giving the notices disclosed in Section 2.05 of the Disclosure Schedule, conflict with or result in a violation or breach of any term or provision of any Law or Order applicable to Sellers or the Company or any of their respective Assets and Properties; or

     (c)except as disclosed in Section 2.05 of the Disclosure Schedule, (i) conflict with or result in a violation or breach of, (ii) constitute (with or without notice or lapse of time or both) a default under, (iii) require Sellers or the Company to obtain any consent, approval or action of, make any filing with or give any notice to any Person as a result or under the terms of, (iv) result in or give to any Person any right of termination, cancellation, acceleration or modification in or with respect to, (v) result in or give to any Person any additional rights or entitlement to increased, additional, accelerated or guaranteed payments under, or (vi) result in the creation or imposition of any Lien upon Sellers or the Company or any of their respective Assets and Properties under, any Contract or License to which Sellers or the Company is a party or by which any of their respective Assets and Properties is bound.

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     2.06Governmental Approvals and Filings. Except as disclosed in Section 2.06 of the Disclosure Schedule, no consent, approval or action of, filing with or written notice to any Governmental or Regulatory Authority on the part of Sellers or the Company is required in connection with the execution, delivery and performance by Sellers or the Company of this Agreement or the consummation of the transactions contemplated hereby.

     2.07Books and Records. Sellers and the Company have made available to Purchaser the minute books and other similar records of the Company, which contain a true and complete record of all action taken at all meetings and by all written consents in lieu of meetings of the owners, limited partners and general partner of the Company.

     2.08Financial Statements. Prior to the execution of this Agreement, Sellers have delivered to Purchaser true and complete copies of the following financial statements: the unaudited balance sheets of the Company as of December 31, 2004, December 31, 2005, December 31, 2006, and July 31, 2007 and the related unaudited statements of operations and cash flows for each of the years or portion of the year then ended. All the Financial Statements (i) fairly present in all material respects the financial condition and results of operations of the Company on a cash basis as of the respective dates thereof and for the respective periods covered thereby, and (ii) were prepared from the Books and Records of the Company regularly maintained by management and used to prepare the financial statements of the Company in accordance with good business and accounting practices and in a manner sufficient to permit the preparation of financial statements on a cash basis of accounting. Such Books and Records are complete and correct and fairly reflect, in all material respects, the income, expenses, assets and liabilities of the Company on a cash basis. Sellers have discussed with and made available to Purchaser all of their material accounting practices and principles, including those related to revenue recognition.

     2.09Absence of Changes. Since July 31, 2007, the business of the Company has been conducted in the ordinary course and consistent with past practice. Except for the execution and delivery of this Agreement and the transactions to take place pursuant hereto on or prior to the Closing Date, since July 31, 2007, there has not been any material adverse change, or any event or development which, individually or together with other such events, could reasonably be expected to result in a material adverse change, in the Business or Condition of the Company. Without limiting the foregoing, except as disclosed in Section 2.09 of the Disclosure Schedule, there has not occurred between July 31, 2007and the date hereof:

     (i)any declaration, setting aside or payment of any dividend or other distribution in respect of the Interests, other than tax distributions as set forth on Schedule2.09(i) , or any direct or indirect redemption, purchase or other acquisition by the Company of any partnership interests of or any Option with respect to the Company;

     (ii)any authorization, issuance, sale or other disposition by the Company of any Interests or Option with respect to the Company, or any modification or amendment of any right of any holder of any partnership interests of or Option with respect to the Company;

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     (iii)(x) any increase in the salary, wages or other compensation of any officer, Employee or consultant of the Company; (y) any establishment or modification of (A) targets, goals, pools or similar provisions in respect of any fiscal year under any Benefit Plan, employment-related Contract or other employee compensation arrangement or (B) salary ranges, increase guidelines or similar provisions in respect of any Benefit Plan, employment-related Contract or other employee compensation arrangement; or (z) any adoption, entering into or becoming bound by any Benefit Plan, employment-related Contract or collective bargaining agreement, or amendment, modification or termination (partial or complete) of any Benefit Plan, employment-related Contract or collective bargaining agreement, except to the extent required by applicable Law and, in the event compliance with legal requirements presented options, only to the extent the option which the Company reasonably believed to be the least costly was chosen;

     (iv)(A) incurrences by the Company of Indebtedness (in the aggregate in excess of $10,000), or (B) any voluntary purchase, cancellation, prepayment or complete or partial discharge in advance of a scheduled payment date with respect to, or waiver of any right of the Company under, any Indebtedness of or owing to the Company (in the aggregate in excess of $10,000);

     (v)any physical damage, destruction or other casualty loss (whether or not covered by insurance) affecting any of the plant, real or personal property or equipment of the Company;

     (vi)any material change in (x) any pricing, investment, accounting, financial reporting, inventory, credit, allowance or Tax practice or policy of the Company or (y) any method of calculating any bad debt, contingency or other reserve of the Company for accounting, financial reporting or Tax purposes or any change in the fiscal year of the Company;

     (vii)any write-off or write-down of or any determination to write off or write down any of the Assets and Properties of the Company;

     (viii)any acquisition or disposition of, or incurrence of a Lien on, any Assets and Properties of the Company, other than in the ordinary course of business consistent with past practice;

     (ix)any (x) amendment of the limited partnership agreement (or other comparable organizational documents) of the Company, (y) recapitalization, reorganization, liquidation or dissolution of the Company or (z) merger or other business combination involving the Company and any other Person;

     (x)any entering into, amendment, modification, termination (partial or complete) or granting of a waiver under or giving any consent with respect to (A) any Contract which is required (or had it been in effect on the date hereof would have been required) to be disclosed pursuant to Section 2.18(a) of the Disclosure Schedule or (B) any material License held by the Company;

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     (xi)capital expenditures or commitments for additions to property, plant or equipment of the Company constituting capital assets (in the aggregate in excess of $10,000);

     (xii)any commencement or termination by the Company of any line of business;

     (xiii)any transaction by the Company with Sellers or any Affiliate of Sellers (A) outside the ordinary course of business consistent with past practice or (B) other than on an arm’s-length basis, other than pursuant to any Contract in effect on July 31, 2007 and disclosed pursuant to Section 2.18(a)(vii) of the Disclosure Schedule;

     (xiv)any material adverse change in net sales, costs of goods sold or collection of Accounts Receivable;

     (xv)any entering into of a Contract to do or engage in any of the foregoing after the date hereof; or

     (xvi)any other material transaction involving or affecting the Company outside the ordinary course of business consistent with past practice.

     2.10No Undisclosed Liabilities. Except as reflected or reserved against in the July 31 Balance Sheet or in the notes thereto or as disclosed in Section 2.10 of the Disclosure Schedule, there are no Liabilities against, relating to or affecting the Company or any of its Assets and Properties, other than Liabilities (i) incurred since July 31, 2007 in the ordinary course of business consistent with past practice or (ii) which, individually or in the aggregate, are not material to the Business or Condition of the Company.

     2.11Taxes. Except as set forth in Section 2.11 of the Disclosure Schedule (with paragraph references corresponding to those set forth below):

(a)

the Company is, and has always been, treated as an entity taxed as a partnership for U.S. federal income tax purposes and the Company is not the successor (by operation of law or otherwise) of any entity treated as a corporation for U.S. federal income tax purposes.

(b)

the Company has filed all material Tax Returns (or such Tax Returns have been filed on behalf of the Company) required to be filed by applicable law on a timely basis and all such Tax Returns and reports are true, complete and accurate in all material respects. The Company has paid all material Taxes that are shown to be due, or claimed or asserted by any taxing authority to be due, from the Company from the periods covered by such Tax Returns. Except as set forth in Section 2.11 of the Disclosure Schedule, no claim for any Tax due from or assessed against the Company is being contested by the Company, none of the Company’s Tax Returns or reports have been, or are currently under, audit by the IRS or any state or local Tax authority, and the Company has not received any written notice of deficiency or other adjustment from the IRS or any state or local Tax authority. Except as described on Section 2.11 of the Disclosure Schedule, there are no Tax liens on any of the Assets and Properties of the Company, there are no agreements, waivers, or other arrangements providing an extension of time with respect to the assessment of any

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	Tax against the Company, nor are there any Tax proceedings now pending or, to the Knowledge of Sellers, threatened against the Company. The Company has made all deposits required by law to be made with respect to employees’ withholding and other employment Taxes, including without limitation the portion of such deposits relating to Taxes imposed upon the Company.
(c)	The Company is not a party to, bound by or obligated under any agreement relating to the allocation or sharing of Taxes and does not have any liability for the Taxes of any person, other than the Company, as a transferee, or successor or otherwise.
(d)	Sellers have delivered to Purchaser correct and complete copies of all federal, state, local, and foreign income, franchise and similar Tax Returns, examination reports, and statements of deficiencies assessed against or agreed to by the Company since December 31, 2005.
	2.12 Legal Proceedings. Except as disclosed in Section 2.12 of the Disclosure Schedule (with paragraph references
corresponding to those set forth below):

     (a)there are no Actions or Proceedings pending or, to the Knowledge of Sellers, threatened against, relating to or affecting Sellers or the Company or any of their respective Assets and Properties which (i) could reasonably be expected to result in the issuance of an Order restraining, enjoining or otherwise prohibiting or making illegal the consummation of any of the transactions contemplated by this Agreement, or (ii) if determined adversely to Sellers or the Company, could reasonably be expected to result in (x) any injunction or other equitable relief against the Company that would interfere in any material respect with its business or operations or (y) Losses by the Company, individually or in the aggregate with Losses in respect of other such Actions or Proceedings, exceeding $10,000;

      (b)there are no Orders outstanding against the Company.

      2.13Compliance With Laws and Orders.

     (a)Except as disclosed in Section 2.13 of the Disclosure Schedule, the Company is not, nor has it at any time within the last five (5) years been, nor has it received any written notice that it is or has at any time within the last five (5) years been, in violation of or in default under, in any material respect, any Law or Order applicable to the Company or its Assets and Properties.

     (b)Except as disclosed in Section 2.13 of the Disclosure Schedule, the Company is in material compliance with all Laws applicable to it and necessary to conduct its business as currently conducted.

      2.14Benefit Plans; ERISA.

     (a)Section 2.14(a) of the Disclosure Schedule (i) contains a true and complete list and description of each of the Benefit Plans, (ii) identifies each of the Benefit Plans that is a Qualified Plan and (iii) identifies each Benefit Plan which at any time during the five-year period preceding the date of this Agreement was a Defined Benefit Plan. The Company has not

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scheduled or agreed upon future increases of benefit levels (or creations of new benefits) with respect to any Benefit Plan, and no such increases or creation of benefits have been proposed, made the subject of representations to Employees or requested or demanded by Employees under circumstances which make it reasonable to expect that such increases will be granted. Except as disclosed in Section 2.14(a) of the Disclosure Schedule, no loan is outstanding between the Company and any Employee.

     (b)The Company does not maintain nor is it obligated to provide benefits under any life, medical or health plan which provides benefits to retired or other terminated employees other than benefit continuation rights under the Consolidated Omnibus Budget Reconciliation of 1985, as amended.

     (c)Except as set forth in Section 2.14(c) of the Disclosure Schedule, each Benefit Plan covers only Employees (or former employees or beneficiaries with respect to service with the Company), so that the transactions contemplated by this Agreement will require no spin-off of assets and liabilities or other division or transfer of rights with respect to any such plan.

     (d)Neither the Company nor any ERISA Affiliate nor any other corporation or organization controlled by or under common control with any of the foregoing within the meaning of Section 4001 of ERISA has at any time contributed to any “multiemployer plan”, as that term is defined in Section 4001 of ERISA.

     (e)Each of the Benefit Plans maintained by the Company is, and its administration is and has been since inception, in all material respects in compliance with, and the Company has not received any claim or written notice that any such Benefit Plan is not in compliance with, all applicable Laws and Orders and prohibited transactions exemptions, including the requirements of ERISA, the Code, the Age Discrimination in Employment Act, the Equal Pay Act and Title VII of the Civil Rights Act of 1964. Each Benefit Plan maintained by the Company which is intended to provide for the deferral of income, the reduction of salary or other compensation or to afford other Tax benefits complies in all material respects with the requirements of the applicable provisions of the Code or other Laws required in order to provide such Tax benefits.

     (f)The Company is not in default in performing any of its contractual obligations under any of the Benefit Plans or any related trust agreement or insurance contract. All contributions and other payments required to be made by Sellers or the Company to any Benefit Plan with respect to any period ending before or at or including the Closing Date have been made or reserves adequate for such contributions or other payments have been set aside therefor and have been reflected in Financial Statements in accordance with the policies utilized by the Company in preparing the Books and Records of the Company. There are no outstanding liabilities of any Benefit Plan other than liabilities for benefits to be paid to participants in such Benefit Plan and their beneficiaries in accordance with the terms of such Benefit Plan.

     (g)No event has occurred, and there exists no condition or set of circumstances in connection with any Benefit Plan, under which the Company, directly or indirectly (through any indemnification agreement or otherwise), could reasonably be expected to be subject to any risk of liability under Section 409 of ERISA, Section 502(i) of ERISA, Title IV of ERISA or Section 4975 of the Code.

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     (h)No transaction contemplated by this Agreement will result in liability to the PBGC under Section 302(c)(ii), 4062, 4063, 4064 or 4069 of ERISA, or otherwise, with respect to the Company, Purchaser or any corporation or organization controlled by or under common control with any of the foregoing within the meaning of Section 4001 of ERISA, and no event or condition exists or has existed with respect to a Benefit Plan which could reasonably be expected to result in any such liability with respect to Purchaser, the Company, or any such corporation or organization. No “reportable event” within the meaning of Section 4043 of ERISA has occurred with respect to any Defined Benefit Plan. No termination re-establishment or spin off re-establishment transaction has occurred with respect to any Subject Defined Benefit Plan. No Subject Defined Benefit Plan has incurred any accumulated funding deficiency whether or not waived. No filing has been made and no proceeding has been commenced for the complete or partial termination of, or withdrawal from, any Benefit Plan which is a Pension Benefit Plan.

     (i)No benefit under any Benefit Plan, including, without limitation, any severance or parachute payment plan or agreement, will be established or become accelerated, vested, funded or payable by reason of any transaction contemplated under this Agreement.

     (j)To the Knowledge of Sellers, there are no pending or threatened claims by or on behalf of any Benefit Plan, by any Person covered thereby, or otherwise, which allege violations of Law which could reasonably be expected to result in liability on the part of Purchaser, the Company, or any fiduciary of any such Benefit Plan, nor is there any basis for such a claim.

     (k)No employer securities, employer real property or other employer property is included in the assets of any Benefit Plan.

     (l)The fair market value of the assets of each Subject Defined Benefit Plan, as determined as of the last day of the plan year of such plan which coincides with or first precedes the date of this Agreement, was not less than the present value of the projected benefit obligations under such plan at such date as established on the basis of the actuarial assumptions applicable under such Subject Defined Benefit Plan at said date and, to the Knowledge of Sellers, there have been no material changes in such values since said date.

     (m)Complete and correct copies of the following documents have been furnished to Purchaser prior to the execution of this Agreement:

     (i)the Benefit Plans and any predecessor plans referred to therein, any related trust agreements, and service provider agreements, insurance contracts or agreements with investment managers, including without limitation, all amendments thereto;

     (ii)current summary Plan descriptions of each Benefit Plan subject to ERISA, and any similar descriptions of all other Benefit Plans;

     (iii)the most recent Form 5500 and Schedules thereto for each Benefit Plan subject to ERISA reporting requirements;

     (iv)the most recent determination of the IRS with respect to the qualified status of each Qualified Plan;

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     (v)the most recent accountings with respect to any Benefit Plan funded through a trust;

     (vi)the most recent actuarial report of the qualified actuary of any Subject Defined Benefit Plan or any other Benefit Plan with respect to which actuarial valuations are conducted; and

     (vii)all qualified domestic relations orders or other orders received by the Company governing payments from any Benefit Plan maintained by the Company.

      2.15Real Property.

     (a)The Company owns no real property. Section 2.15(a) of the Disclosure Schedule contains a true and correct list of each parcel of real property leased by the Company (as lessor or lessee).

     (b)The Company has adequate rights of ingress and egress with respect to the real property listed in Section 2.15(a) of the Disclosure Schedule and all buildings, structures, facilities, fixtures and other improvements thereon. To the Knowledge of Sellers, none of such real property, buildings, structures, facilities, fixtures or other improvements, or the use thereof, contravenes or violates any building, zoning, administrative, occupational safety and health or other applicable Law in any material respect (whether or not permitted on the basis of prior nonconforming use, waiver or variance).

     (c)The Company has a valid and subsisting leasehold estate in and the right to quiet enjoyment of the real properties leased by it for the full term of the lease thereof and no amendment to the current lease is required in connection with the transactions contemplated by this Agreement. Each lease for real property referred to in paragraph (a) is a legal, valid and binding agreement, enforceable in accordance with its terms, of the Company except as the same may be limited by bankruptcy, insolvency, moratorium or similar rights whether in a proceeding at law or in equity, and except as set forth in Section 2.15(c) of the Disclosure Schedule, there is no, nor has the Company received any written notice of any, default by the Company (or any condition or event which, after notice or lapse of time or both, would constitute a default by the Company) thereunder. The Company does not owe any brokerage commissions with respect to any such leased space.

     (d)Sellers have delivered to Purchaser prior to the execution of this Agreement, true and complete copies of all leases (including any amendments and renewal letters) with respect to the real property leased by the Company.

     (e)Except as disclosed in Section 2.15(e) of the Disclosure Schedule, the improvements on the real property identified in Section 2.15(a) of the Disclosure Schedule are in good operating condition and in a state of good maintenance and repair, ordinary wear and tear excepted, are adequate and suitable for the purposes for which they are presently being used and, to the Knowledge of Sellers, there are no condemnation or appropriation proceedings pending or threatened against any of such real property or the improvements thereon.

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      2.16Tangible Personal Property; Investment Assets.

     (a)The Company is in possession of and has good title to, or has valid leasehold interests in or valid rights under Contract to use, all tangible personal property, used in the conduct of its business. All tangible personal property reflected on the July 31 Balance Sheet is free and clear of all Liens, other than Liens disclosed in Section 2.16(a) of the Disclosure Schedule, and is in good working order and condition, ordinary wear and tear excepted, and its use complies in all material respects with all applicable Laws.

     (b)Section 2.16(b) of the Disclosure Schedule describes each Investment Asset owned by the Company on the date hereof. Except as disclosed in Section 2.16(b) of the Disclosure Schedule, all such Investment Assets are owned by the Company free and clear of all Liens.

     2.17Intellectual Property Rights. Except as set forth in Section 2.17 of the Disclosure Schedule, the Company either has all right, title and interest in or a valid and binding right under Contract to use all the Intellectual Property which is used in the conduct of the business of the Company. Except as disclosed in Section 2.17 of the Disclosure Schedule, (i) the Company has the exclusive right to use all of the patents and trademarks listed in Section 2.17 of the Disclosure Schedule (the “Patents and Trademarks”), which are all of the patents and trademarks used by the Company, (ii) all registrations with and applications to Governmental or Regulatory Authorities in respect of the Patents and Trademarks are valid and in full force and effect and are not subject to the payment of any Taxes or maintenance fees or the taking of any other actions by the Company to maintain their validity or effectiveness, (iii) there are no restrictions on the direct or indirect transfer of any Contract, or any interest therein, held by the Company in respect of any of the Patents and Trademarks, (iv) the Company has taken reasonable security measures to protect the secrecy, confidentiality and value of its trade secrets, (v) the Company is not, nor has it received any written notice that it is, in default (or with the giving of notice or lapse of time or both, would be in default) under any Contract to use such Intellectual Property and (vi) to the Knowledge of Sellers, no such Intellectual Property is being infringed by any other Person. Neither Sellers nor the Company has received any written notice that the Company is infringing any Intellectual Property of any other Person, no claim is pending or, to the Knowledge of Sellers, has been made to such effect that has not been resolved and, to the Knowledge of Sellers, the Company is not infringing any Intellectual Property of any other Person.

      2.18Contracts.

     (a)Section 2.18(a) of the Disclosure Schedule (with paragraph references corresponding to those set forth below) contains a true and complete list of each of the following Contracts or other arrangements (true and complete copies of which, or, if none, reasonably complete and accurate written descriptions of which, together with all amendments and supplements thereto and all waivers of any terms thereof, have been delivered to Purchaser prior to the execution of this Agreement) currently in effect, to which the Company is a party or by which any of its Assets and Properties is bound:

     (i) (A) all Contracts (excluding Benefit Plans) providing for a commitment of employment or consultation services for a specified or unspecified term or otherwise

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relating to employment or the termination of employment of any Employee, the name, position and rate of compensation of each Employee and the expiration date of each such Contract; and (B) any written representations, commitments, promises or communications (excluding Benefit Plans and any such Contracts referred to in clause (A)) involving an obligation of the Company to make payments in any year, other than with respect to salary or incentive compensation payments in the ordinary course of business, to any Employee or former employee;

     (ii)all Contracts with any Person containing any provision or covenant prohibiting or limiting the ability of the Company to engage in any business activity or compete with any Person or prohibiting or limiting the ability of any Person to compete with the Company;

     (iii)all partnership, joint venture, shareholders’ or other similar Contracts with any Person including, without limitation, the partnership agreement of the Company;

     (iv)all Contracts relating to Indebtedness of the Company (in the aggregate in excess of $10,000);

     (v)all Contracts with distributors, dealers, manufacturer’s representatives, sales agencies or franchisees;

     (vi)all Contracts relating to (A) the future disposition or acquisition of any Assets and Properties other than dispositions or acquisitions in the ordinary course of business consistent with past practice and (B) any merger or business combination;

     (vii)all Contracts between the Company, on the one hand, and Sellers or any Affiliate of Sellers, on the other hand;

     (viii)all collective bargaining or similar labor Contracts;

     (ix)all Contracts that (A) limit or contain restrictions on the ability of the Company to declare or make distributions on, in respect of or to issue or purchase, redeem or otherwise acquire its partnership interests, or incur Indebtedness, to incur or suffer to exist any Lien, to purchase or sell any Assets and Properties, to change the lines of business in which it participates or engages or to engage in any business combination or (B) require the Company to maintain specified financial ratios or levels of net worth or other indicia of financial condition; and

     (x)all other Contracts (other than Benefit Plans, leases listed in Section 2.15(a) of the Disclosure Schedule and insurance policies listed in Section 2.20 of the Disclosure Schedule) that (A) involve the payment or potential payment, pursuant to the terms of any such Contract, by or to the Company of more than $10,000 annually and (B) cannot be terminated within thirty (30) days after giving written notice of termination without resulting in any material cost or penalty to the Company.

      (b)Each Contract required to be disclosed in Section 2.18(a) of the Disclosure Schedule is in full force and effect and constitutes a legal, valid and binding agreement,

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enforceable in accordance with its terms, of each party thereto, except as the same may be limited by bankruptcy, insolvency, moratorium or similar rights whether in a proceeding at law or in equity, and except as disclosed in Section 2.18(b) of the Disclosure Schedule, neither the Company nor, to the Knowledge of Sellers, any other party to such Contract is, or has received written notice that it is, in violation or breach of or default under any such Contract (or with notice or lapse of time or both, would be in violation or breach of or default under any such Contract) in any material respect.

     2.19Licenses. Section 2.19 of the Disclosure Schedule contains a true and complete list of all Licenses used in and material, individually or in the aggregate, to the business or operations of the Company (and all pending applications for any such Licenses). Prior to the execution of this Agreement, Sellers have delivered to Purchaser true and complete copies of all such Licenses. Except as disclosed in Section 2.19 of the Disclosure Schedule:

     (i)the Company owns or validly holds all Licenses that are material, individually or in the aggregate, to its business or operations;

     (ii)each License listed in Section 2.19 of the Disclosure Schedule is valid, binding and in full force and effect, except as the same may be limited by bankruptcy, insolvency, moratorium or similar rights whether in a proceeding at law or in equity, and

     (iii)the Company is not, nor has it received any written notice that it is, in default (or with the giving of notice or lapse of time or both, would be in default) under any such License.

      2.20Insurance.

     (a)Section 2.20 of the Disclosure Schedule contains a true and complete list of all liability, property, workers’ compensation, directors’ and officers’ liability and other insurance policies currently in effect that insure the business, operations or Employees of the Company or affect or relate to the ownership, use or operation of any of the Assets and Properties of the Company and that (i) have been issued to the Company or (ii) have been issued to any Person (other than the Company) for the benefit of the Company. The insurance coverage provided by any of the policies described in clause (i) above will not terminate or lapse by reason of the transactions contemplated by this Agreement. Each policy listed in Section 2.20 of the Disclosure Schedule is valid and binding and in full force and effect, no premiums due thereunder have not been paid and neither the Company, nor the Person to whom such policy has been issued has received any written notice of cancellation or termination in respect of any such policy or is in default thereunder. Neither the Company nor the Person to whom such policy has been issued has received written notice that any insurer under any policy referred to in this Section is denying liability with respect to a claim thereunder or defending under a reservation of rights clause.

     (b)The Company has complied with and maintains in full force and effect all applicable employment insurance required by law.

     2.21Affiliate Transactions. Except as disclosed in Section 2.18(a)(vii) or Section 2.21(a) of the Disclosure Schedule, (i) there are no intercompany Liabilities between the

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Company, on the one hand, and Sellers or any Affiliate of Sellers, on the other, (ii) neither Sellers nor any such Affiliate provides or causes to be provided any assets, services or facilities to the Company, (iii) the Company does not provide or cause to be provided any assets, services or facilities to Sellers or any such Affiliate and (iv) the Company does not beneficially own, directly or indirectly, any Investment Assets issued by Sellers or any such Affiliate. Except as disclosed in Section 2.21(b) of the Disclosure Schedule, each of the Liabilities and transactions listed in Section 2.21(a) of the Disclosure Schedule was incurred or engaged in, as the case may be, on a basis no less favorable than had they been engaged in on an arm’s-length basis. Except as disclosed in Section 2.21(c) of the Disclosure Schedule, since December 31, 2006, all settlements of intercompany Liabilities between the Company, on the one hand, and Sellers or any such Affiliate, on the other, have been made, and all allocations of intercompany expenses have been applied, in the ordinary course of business consistent with past practice.

      2.22Employees; Labor Relations.

     (a)Section 2.22 of the Disclosure Schedule contains a list of the name of each officer and Employee of the Company at the date hereof, together with a description of each such person’s position and job function, annual base salary or wages and any incentive or bonus arrangement, deferred or contingent compensation, pension, accrued, vacation, “golden parachute” and other like benefits paid or payable (in cash or otherwise). Neither the Company nor Sellers have received any information that would lead them to believe that any Employees will or may cease to be Employees, or will refuse offers of employment from Purchaser, because of the consummation of the transactions contemplated by this Agreement.

     (b)Except as disclosed in Section 2.22 of the Disclosure Schedule, (i) no Employee is presently a member of a collective bargaining unit and, to the Knowledge of Sellers, there are no threatened or contemplated attempts to organize for collective bargaining purposes any of the Employees, and (ii) no unfair labor practice complaint or sex, age, race or other discrimination claim has been brought during the last five (5) years against the Company before the National Labor Relations Board, the Equal Employment Opportunity Commission or any other Governmental or Regulatory Authority. During the last five (5) years, there has been no work stoppage, strike or other concerted action by employees of the Company. During that period, the Company has complied in all material respects with all applicable Laws relating to the employment of labor, including, without limitation those relating to wages, hours and collective bargaining.

     (c)All directors, officers, management employees, and technical and professional employees of the Company are under written obligation to the Company to maintain in confidence all confidential or proprietary information acquired by them in the course of their employment and to assign to the Company all inventions made by them within the scope of their employment.

     2.23Substantial Customers and Suppliers. Section 2.23(a) of the Disclosure Schedule lists the ten (10) largest customers of the Company, on the basis of revenues for goods sold or services provided for calendar year 2006 and the seven months ended July 31, 2007. Except as disclosed in Section 2.23(b) of the Disclosure Schedule, to Sellers’ Knowledge, no such customer has ceased or materially reduced its purchases from or use of the services of the

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Company or to the Knowledge of Sellers, has threatened to cease or materially reduce such purchases or use, sales or provision of services after the date hereof.

     2.24Bank and Brokerage Accounts; Investment Assets. Section 2.24 of the Disclosure Schedule sets forth (a) a true and complete list of the names and locations of all banks, trust companies, securities brokers and other financial institutions at which the Company has an account or safe deposit box or maintains a banking, custodial, trading or other similar relationship; (b) a true and complete list and description of each such account, box and relationship, indicating in each case the account number and the names of the respective officers, Employees, agents or other similar representatives of the Company having signatory power with respect thereto; and (c) a list of each Investment Asset, the name of the record and beneficial owner thereof, the location of the certificates, if any, therefor, the maturity date, if any, and any stock or bond powers or other authority for transfer granted with respect thereto.

     2.25No Power of Attorney. Except as set forth in Section 2.25 of the Disclosure Schedule, the Company does not have any powers of attorney or comparable delegations of authority outstanding.

     2.26Nature of Purchase. Sellers are purchasing the Purchased Shares for their own account for investment, not as a nominee or agent, and not with a view to the resale or distribution of the Purchased Shares or any part thereof, and Sellers have no present intention of selling, granting any participation in, or otherwise distributing the same. Sellers acknowledge that the offering of the Purchased Shares pursuant to this Agreement will not be registered under the Securities Act or any state securities or blue sky law, on the grounds that the offering and sale of the Purchased Shares contemplated by this Agreement are exempt from registration pursuant to exceptions available under such laws, and that Purchaser’s reliance upon such exemptions is predicated upon Sellers’ representations set forth in this Agreement. Sellers acknowledge and understand that the Purchased Shares must be held for an indefinite period of time unless they are subsequently registered under the Securities Act and/or applicable state securities or blue sky laws or an exemption from such registration is available, and that the certificates representing such shares will contain a legend to the foregoing effect.

     2.27Accredited Investor. Sellers who will be receiving Purchased Shares are “accredited investors” within the meaning of Regulation D promulgated under the Securities Act.

     2.28Brokers. All negotiations relative to this Agreement and the transactions contemplated hereby have been carried out by Sellers directly with Purchaser without the intervention of any Person on behalf of Sellers in such manner as to give rise to any valid claim by any Person against Purchaser for a finder’s fee, brokerage commission or similar payment.

     2.29Disclosure. No representation or warranty of Sellers contained in this Agreement, and no statement contained in the Disclosure Schedule contains any untrue statement of a material fact or omits to state a material fact necessary in order to make the statements herein or therein, in the light of the circumstances under which they were made, not misleading.

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ARTICLE III

REPRESENTATIONS AND WARRANTIES OF PURCHASER

      Purchaser hereby represents and warrants to Sellers as follows:

     3.01Organization; Authority. Purchaser is a corporation duly incorporated, validly existing and in good standing under the Laws of its jurisdiction of incorporation. Purchaser has full right, corporate power, authority and legal capacity to execute and deliver this Agreement, to perform its obligations hereunder and to consummate the transactions contemplated hereby. This Agreement has been duly and validly executed and delivered by Purchaser, and (assuming due authorization, execution and delivery by Sellers) this Agreement constitutes, legal, valid and binding obligations of Purchaser enforceable against Purchaser in accordance with its terms, except as the same may be limited by bankruptcy, insolvency, moratorium or similar rights whether at a proceeding at law or in equity.

     3.02No Conflicts. The execution and delivery by Purchaser of this Agreement does not, and the performance by Purchaser of its obligations under this Agreement and the consummation of the transactions contemplated hereby will not:

     (a)conflict with or result in a violation or breach of any of the terms, conditions or provisions of the certificate of incorporation or by-laws (or other comparable corporate charter document) of Purchaser;

     (b)subject to obtaining the consents, approvals and actions, making the filings and giving the written notices disclosed in Section 3.03 of the Disclosure Schedule hereto, conflict with or result in a violation or breach of any term or provision of any Law or Order applicable to Purchaser or any of its Assets and Properties, except where the failure to obtain any such consent, approval or action, to make any such filing or to give any such written notice could not be expected to have a material adverse effect on Purchaser and its subsidiaries taken as a whole; or

     (c)except as disclosed in Section 3.02 of the Disclosure Schedule, and except as could not be expected to result in a material adverse effect on Purchaser and its subsidiaries taken as a whole, (i) conflict with or result in a violation or breach of, (ii) constitute (with or without notice or lapse of time or both) a default under, (iii) require Purchaser to obtain any consent, approval or action of, make any filing with or give any written notice to any Person as a result or under the terms of, or (iv) result in the creation or imposition of any Lien upon Purchaser or any of their respective Assets and Properties under, any Contract or License to which Purchaser is a party or by which any of its Assets and Properties are bound.

     3.03Governmental Approvals and Filings. Except as disclosed in Section 3.03 of the Disclosure Schedule hereto, no consent, approval or action of, filing with or written notice to any Governmental or Regulatory Authority on the part of Purchaser is required in connection with the execution, delivery and performance by Purchaser of this Agreement or the consummation of the transactions contemplated hereby, except where the failure to obtain any such consent,

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approval or action, to make any such filing or to give any such written notice could not be expected to have a material adverse effect on Purchaser and its subsidiaries taken as a whole.

     3.04Legal Proceedings. Except as disclosed in Section 3.04 of the Disclosure Schedule and except as could not be expected to result in a material adverse effect on Purchaser and its subsidiaries taken as a whole, there are no Actions or Proceedings pending or, to the knowledge of Purchaser, threatened against, relating to or affecting Purchaser or any of its Assets and Properties which could reasonably be expected to result in the issuance of an Order restraining, enjoining or otherwise prohibiting or making illegal the consummation of any of the transactions contemplated by this Agreement.

     3.05Capital Stock. The Purchased Shares issuable in connection with this Agreement constitute voting stock, have been duly authorized by all necessary corporate action on the part of Purchaser and have been duly reserved for issuance pursuant to this Agreement and, when issued in accordance with the terms hereof, will be validly issued, fully paid and non-assessable.

     3.06Brokers. All negotiations relative to this Agreement and the transactions contemplated hereby have been carried out by Purchaser directly with Sellers without the intervention of any Person on behalf of Purchaser in such manner as to give rise to any valid claim by any Person against Sellers for a finder’s fee, brokerage commission or similar payment.

ARTICLE IV

COVENANTS OF SELLERS

     Sellers covenant and agree with Purchaser that, at all times from and after the date hereof until the Closing and, with respect to the covenants and agreements in Section 4.10 for the period specified therein, Sellers will comply with all covenants and provisions of this Article IV, except to the extent Purchaser may otherwise consent in writing.

     4.01Regulatory and Other Approvals. Sellers will, and will cause the Company to, as promptly as practicable (a) take all commercially reasonable steps necessary or desirable to obtain all consents, approvals or actions of, make all filings with and give all written notices to Governmental or Regulatory Authorities or any other Person required of Sellers or the Company to consummate the transactions contemplated hereby, including without limitation those described in Sections 2.05 and 2.06 of the Disclosure Schedule, (b) provide such other information and communications to such Governmental or Regulatory Authorities or other Persons as Purchaser or such Governmental or Regulatory Authorities or other Persons may reasonably request in connection therewith and (c) cooperate with Purchaser in connection with the performance of its obligations under Sections 5.01 and 5.02. Sellers will provide prompt notification to Purchaser when any such consent, approval, action, filing or written notice referred to in clause (a) above is obtained, taken, made or given, as applicable, and will advise Purchaser of any communications (and, unless precluded by Law, provide copies of any such communications that are in writing) with any Governmental or Regulatory Authority or other Person regarding any of the transactions contemplated by this Agreement.

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     4.02Investigation by Purchaser. Sellers will, and will cause the Company to, (a) provide Purchaser and its officers, directors, employees, agents, counsel, accountants, financial advisors, consultants and other representatives (together “Representatives”) with full access, upon reasonable prior written notice and during normal business hours, to all officers, employees, agents and accountants of the Company and its Assets and Properties and Books and Records, and (b) furnish Purchaser and such other Persons with all such information and data (including without limitation copies of Contracts, Benefit Plans and other Books and Records) concerning the business and operations of the Company as Purchaser or any of such other Persons reasonably may request in connection with such investigation.

     4.03No Solicitations. Sellers will not take, nor will it permit the Company or any Affiliate of Sellers (or authorize or permit any investment banker, financial advisor, attorney, accountant or other Person retained by or acting for or on behalf of Sellers, the Company or any such Affiliate) to take, directly or indirectly, any action to solicit, encourage, receive, negotiate, assist or otherwise facilitate (including by furnishing confidential information with respect to the Company or permitting access to the Assets and Properties and Books and Records of the Company) any offer or inquiry from any Person concerning an Acquisition Proposal. If Sellers, the Company or any such Affiliate (or any such Person acting for or on their behalf) receives from any Person any offer, inquiry or informational request referred to above, Sellers will promptly advise such Person, by written notice, of the terms of this Section 4.03 and will promptly, orally and in writing, advise Purchaser of such offer, inquiry or request and deliver a copy of such written notice to Purchaser.

     4.04Conduct of Business. Sellers will cause the Company to conduct business only in the ordinary course consistent with past practice. Without limiting the generality of the foregoing, Sellers will:

     (a)cause the Company to use commercially reasonable efforts, consistent with past practice, to (i) preserve intact the present business organization and reputation of the Company, (ii) keep available (subject to dismissals and retirements in the ordinary course of business consistent with past practice) the services of the present officers, employees and consultants of the Company, (iii) maintain the Assets and Properties of the Company in good working order and condition, ordinary wear and tear excepted, and (iv) maintain the good will of customers, suppliers, lenders and other Persons to whom the Company sells goods or provides services or with whom the Company otherwise has significant business relationships;

     (b)except to the extent required by applicable Law, (i) cause the Books and Records to be maintained in the usual, regular and ordinary manner, (ii) not permit any material change in (A) any pricing, investment, accounting, financial reporting, inventory, credit, allowance or Tax practice or policy of the Company, or (B) any method of calculating any bad debt, contingency or other reserve of the Company for accounting, financial reporting or Tax purposes and (iii) not permit any change in the fiscal year of the Company;

     (c) (i) use, and will cause the Company to use, commercially reasonable efforts to maintain in full force and effect until the Closing substantially the same levels

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of coverage as the insurance afforded under the Contracts listed in Section 2.20 of the Disclosure Schedule, and (ii) cause any and all benefits under such Contracts paid or payable (whether before or after the date of this Agreement) with respect to the business, operations, employees or Assets and Properties of the Company to be paid to the Company; and

     (d)cause the Company to comply, in all material respects, with all Laws and Orders applicable to the business and operations of the Company, and promptly following receipt thereof to give Purchaser copies of any notice received from any Governmental or Regulatory Authority or other Person alleging any violation of any such Law or Order.

      4.05Financial Statements.

     (a)As promptly as practicable after the Closing Date, Sellers will provide reasonable assistance with respect to matters requested by Purchaser relating to the review of the financial statements of the Company as of and for the period ended as of the Closing Date.

     (b)As promptly as practicable, Sellers will deliver to Purchaser true and complete copies of such other financial statements, reports and analyses as may be prepared or received by Sellers or the Company relating to the business or operations of the Company.

     (c)As promptly as practicable, Sellers will deliver copies of all License applications and other filings (if any) made by the Company after the date hereof and before the Closing Date with any Governmental or Regulatory Authority (other than routine, recurring filings made in the ordinary course of business consistent with past practice).

     4.06Employee Matters. Except as set forth on Section 4.06 of the Disclosure Schedule, and except as may be required by Law, Sellers will refrain, and will cause the Company to refrain, from directly or indirectly:

     (a)making any representation or promise, oral or written, to any officer, employee or consultant of the Company concerning any Benefit Plan, except for statements as to the rights or accrued benefits of any officer, employee or consultant under the terms of any Benefit Plan;

     (b)making any increase in the salary, wages or other compensation of any officer, employee or consultant of the Company;

     (c)adopting, entering into or becoming bound by any Benefit Plan, employment-related Contract or collective bargaining agreement, or amending, modifying or terminating (partially or completely) any Benefit Plan, employment-related Contract or collective bargaining agreement, except to the extent required by applicable Law and, in the event compliance with legal requirements presents options, only to the extent that the option which the Company reasonably believes to be the least costly is chosen; or

     (d)establishing or modifying any (i) targets, goals, pools or similar provisions in respect of any fiscal year under any Benefit Plan, employment-related Contract or other employee compensation arrangement or (ii) salary ranges, increase guidelines or similar

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provisions in respect of any Benefit Plan, employment-related Contract or other employee compensation arrangement.

     Sellers will cause the Company to administer each Benefit Plan, or cause the same to be so administered, in all material respects in accordance with the applicable provisions of the Code, ERISA and all other applicable Laws. Sellers will promptly notify Purchaser in writing of each receipt by Sellers or the Company (and furnish Purchaser with copies) of any written notice of investigation or administrative proceeding by the IRS, Department of Labor, PBGC or other Person involving any Benefit Plan.

     4.07Certain Restrictions. Except as set forth on Section 4.07 of the DisclosureSchedule, Sellers will cause the Company to refrain from:

     (a)amending its limited partnership agreement (or other comparable corporate charter documents) or taking any action with respect to any such amendment or any recapitalization, reorganization, liquidation or dissolution of any such limited partnership;

     (b)authorizing, issuing, selling or otherwise disposing of any partnership interests or any Option with respect to the Company, or modifying or amending any right of any holder of outstanding partnership interests of or Option with respect to the Company;

     (c)declaring, setting aside or paying any dividend or other distribution in respect of the partnership interests of the Company not wholly owned by the Company, or directly or indirectly redeeming, purchasing or otherwise acquiring any partnership interests of or any Option with respect to the Company not wholly owned by the Company;

     (d)acquiring or disposing of, or incurring any Lien on, any Assets and Properties, other than in the ordinary course of business consistent with past practice;

     (e)(i) entering into, amending, modifying, terminating (partially or completely), granting any waiver under or giving any consent with respect to (A) any Contract that would, if in existence on the date of this Agreement, be required to be disclosed in the Disclosure Schedule pursuant to Section 2.18(a) or (B) any material License or (ii) granting any irrevocable powers of attorney;

     (f)violating, breaching or defaulting under in any material respect, or taking or failing to take any action that (with or without notice or lapse of time or both) would constitute a material violation or breach of, or default under, any term or provision of any License held or used by the Company or any Contract to which the Company is a party or by which any of its respective Assets and Properties is bound;

     (g)(i) incurring Indebtedness in the aggregate in excess of $10,000 or (ii) voluntarily purchasing, canceling, prepaying or otherwise providing for a complete or partial discharge in advance of a scheduled payment date with respect to, or waiving any right of the Company under, any Indebtedness of or owing to the Company, in the aggregate in excess of $10,000;

      (h)engaging with any Person in any merger or other business combination;

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     (i)making capital expenditures or commitments for additions to property, plant or equipment constituting capital assets, in the aggregate in excess of $10,000;

     (j)making any change in the lines of business in which it participates or is engaged;

     (k)writing off or writing down any of their Assets and Properties outside the ordinary course of business consistent with past practice; or

     (l)entering into any Contract to do or engage in any of the foregoing.

     4.08Affiliate Transactions. Except as set forth in Section 4.08 of the DisclosureSchedule or as contemplated by this Agreement, immediately prior to the Closing, all Indebtedness and other amounts owing under Contracts between any Sellers, any officer, director or Affiliate (other than the Company) of any Sellers, on the one hand, and the Company or any of the Subsidiaries, on the other, will be paid in full, and Sellers will terminate and will cause any such officer, director or Affiliate to terminate each Contract with the Company. Prior to the Closing, the Company will not enter into any Contract or amend or modify any existing Contract, and will not engage in any transaction outside the ordinary course of business consistent with past practice or not on an arm’s-length basis (other than pursuant to Contracts disclosed pursuant to Section 2.18(a)(vii) of the Disclosure Schedule), with Sellers or any such officer, director or Affiliate.

     4.09Books and Records. On the Closing Date, Sellers will deliver or make available to Purchaser at the offices of the Company all of the Books and Records, and if at any time after the Closing Sellers discover in their possession or under its control any other Books and Records, it will forthwith deliver such Books and Records to Purchaser.

      4.10Noncompetition.

     (a)Sellers will, for a period of two (2) years from the Closing Date, refrain from, either alone or in conjunction with any other Person, or directly or indirectly through its present or future Affiliates:

     (i)employing, engaging or seeking to employ or engage any Person, who within the prior twelve (12) months, had been an officer, employee or consultant of the Company;

     (ii)causing or attempting to cause (A) any client, customer or supplier of the Company to terminate or materially reduce its business with the Company or (B) any officer, employee or consultant of the Company to resign or sever a relationship with the Company;

     (iii)disclosing (unless compelled by judicial or administrative process) or using any confidential or secret information relating to the Company or any of its clients, customers or suppliers; or

     (iv)participating or engaging in (other than through the ownership of five percent (5%) or less of any class of securities registered under the Securities Exchange

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Act of 1934, as amended), or otherwise lending assistance (financial or otherwise) to any Person participating or engaged in, any of the lines of business in which the Company is participating or engaged on the Closing Date in any jurisdiction in which the Company participates or engages in such line of business on the Closing Date.

     (b)The parties hereto recognize that the Laws and public policies of the various states of the United States may differ as to the validity and enforceability of covenants similar to those set forth in this Section. It is the intention of the parties that the provisions of this Section be enforced to the fullest extent permissible under the Laws and policies of each jurisdiction in which enforcement may be sought, and that the unenforceability (or the modification to conform to such Laws or policies) of any provisions of this Section shall not render unenforceable, or impair, the remainder of the provisions of this Section. Accordingly, if any provision of this Section shall be determined to be invalid or unenforceable, such invalidity or unenforceability shall be deemed to apply only with respect to the operation of such provision in the particular jurisdiction in which such determination is made and not with respect to any other provision or jurisdiction.

     (c)The parties hereto acknowledge and agree that any remedy at Law for any breach of the provisions of this Section would be inadequate, and Sellers hereby consent to the granting by any court of an injunction or other equitable relief, without the necessity of actual monetary loss being proved, in order that the breach or threatened breach of such provisions may be effectively restrained.

     4.11Notice and Cure. Sellers will notify Purchaser in writing (where appropriate, through updates to the Disclosure Schedule) of, and contemporaneously will provide Purchaser with true and complete copies of any and all information or documents relating to, and will use all commercially reasonable efforts to cure before the Closing, any event, transaction or circumstance, as soon as practicable after it becomes Known to Sellers, occurring after the date of this Agreement that causes or will cause any covenant or agreement of Sellers under this Agreement to be breached or that renders or will render untrue any representation or warranty of Sellers contained in this Agreement as if the same were made on or as of the date of such event, transaction or circumstance. No notice given pursuant to this Section shall have any effect on the representations, warranties, covenants or agreements contained in this Agreement for purposes of determining satisfaction of any condition contained herein or shall in any way limit Purchaser’s right to seek indemnity under Articles IX or X.

     4.12Fulfillment of Conditions. Sellers will execute and deliver at the Closing each document and other papers that Sellers are required hereby to execute and deliver as a condition to the Closing, will take all commercially reasonable steps necessary or desirable and proceed diligently and in good faith to satisfy each other condition to the obligations of Purchaser contained in this Agreement and will not, and will not permit the Company to, take or fail to take any action that could reasonably be expected to result in the nonfulfillment of any such condition.

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ARTICLE V

COVENANTS OF PURCHASER

     Purchaser covenants and agrees with Sellers that, at all times from and after the date hereof until the Closing, Purchaser will comply with all covenants and provisions of this Article V, except to the extent Sellers may otherwise consent in writing.

     5.01Regulatory and Other Approvals. Purchaser will as promptly as practicable (a) take all commercially reasonable steps necessary or desirable to obtain all consents, approvals or actions of, make all filings with and give all written notices to Governmental or Regulatory Authorities or any other Person required of Purchaser to consummate the transactions contemplated hereby, including without limitation those described in Schedules 3.03 and 3.04 hereto, (b) provide such other information and communications to such Governmental or Regulatory Authorities or other Persons as Sellers or such Governmental or Regulatory Authorities or other Persons may reasonably request in connection therewith and (c) cooperate with Sellers and the Company in connection with the performance of their obligations under Sections 4.01 and 4.02. Purchaser will provide prompt notification to Sellers when any such consent, approval, action, filing or written notice referred to in clause (a) above is obtained, taken, made or given, as applicable, and will advise Sellers of any communications (and, unless precluded by Law, provide copies of any such communications that are in writing) with any Governmental or Regulatory Authority or other Person regarding any of the transactions contemplated by this Agreement.

     5.02Notice and Cure. Purchaser will notify Sellers in writing of, and contemporaneously will provide Sellers with true and complete copies of any and all information or documents relating to, and will use all commercially reasonable efforts to cure before the Closing, any event, transaction or circumstance, as soon as practicable after it becomes known to Purchaser, occurring after the date of this Agreement that causes or will cause any covenant or agreement of Purchaser under this Agreement to be breached or that renders or will render untrue any representation or warranty of Purchaser contained in this Agreement as if the same were made on or as of the date of such event, transaction or circumstance. No notice given pursuant to this Section shall have any effect on the representations, warranties, covenants or agreements contained in this Agreement for purposes of determining satisfaction of any condition contained herein or shall in any way limit Sellers’ right to seek indemnity under Article X.

     5.03Fulfillment of Conditions. Purchaser will execute and deliver at the Closing each document and other papers that Purchaser is hereby required to execute and deliver as a condition to the Closing, will take all commercially reasonable steps necessary or desirable and proceed diligently and in good faith to satisfy each other condition to the obligations of Sellers contained in this Agreement and will not take or fail to take any action that could reasonably be expected to result in the nonfulfillment of any such condition.

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ARTICLE VI

CONDITIONS TO OBLIGATIONS OF PURCHASER

     The obligations of Purchaser hereunder to purchase the Interests are subject to the fulfillment, at or before the Closing, of each of the following conditions (all or any of which may be waived in whole or in part by Purchaser in its sole discretion):

     6.01Representations and Warranties. Each of the representations and warranties made by Sellers in this Agreement (other than those made as of a specified date earlier than the Closing Date) shall be true and correct in all material respects on and as of the Closing Date as though such representation or warranty was made on and as of the Closing Date, and any representation or warranty made as of a specified date earlier than the Closing Date shall have been true and correct in all material respects on and as of such earlier date.

     6.02Performance. Sellers shall have performed and complied with, in all material respects, each agreement, covenant and obligation required by this Agreement to be so performed or complied with by Sellers at or before the Closing.

     6.03Sellers’ Certificate. Sellers shall have delivered to Purchaser a certificate, dated the Closing Date and executed by Sellers, substantially in the form and to the effect of Exhibit B hereto.

     6.04Orders and Laws. There shall not be in effect on the Closing Date any Order or Law restraining, enjoining or otherwise prohibiting or making illegal the consummation of any of the transactions contemplated by this Agreement or which could reasonably be expected to otherwise result in a material diminution of the benefits of the transactions contemplated by this Agreement to Purchaser, and there shall not be pending or threatened on the Closing Date any Action or Proceeding in, before or by any Governmental or Regulatory Authority which could reasonably be expected to result in the issuance of any such Order or the enactment, promulgation or deemed applicability to Purchaser, the Company or the transactions contemplated by this Agreement of any such Law.

     6.05Regulatory Consents and Approvals. All consents, approvals and actions of, filings with and written notices to any Governmental or Regulatory Authority necessary to permit Purchaser and Sellers to perform their obligations under this Agreement and to consummate the transactions contemplated hereby and thereby (a) shall have been duly obtained, made or given, (b) shall be in form and substance reasonably satisfactory to Purchaser, (c) shall not be subject to the satisfaction of any condition that has not been satisfied or waived and (d) shall be in full force and effect, and all terminations or expirations of waiting periods imposed by any Governmental or Regulatory Authority necessary for the consummation of the transactions contemplated by this Agreement, shall have occurred.

     6.06Third Party Consents. All consents (or in lieu thereof waivers) to the performance by Purchaser and Sellers of their obligations under this Agreement or to the consummation of the transactions contemplated hereby and thereby as are required under any Contract to which Purchaser, Sellers or the Company is a party or by which any of their respective Assets and

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Properties are bound (a) shall have been obtained, (b) shall be in form and substance reasonably satisfactory to Purchaser, (c) shall not be subject to the satisfaction of any condition that has not been satisfied or waived and (d) shall be in full force and effect, except (other than in the case of the consents listed in Section 6.06 of the Disclosure Schedule) where the failure to obtain any such consent (or in lieu thereof waiver) could not reasonably be expected, individually or in the aggregate with other such failures, to materially adversely affect Purchaser or the Business or Condition of the Company or otherwise result in a material diminution of the benefits of the transactions contemplated by this Agreement to Purchaser.

     6.07Financing. Purchaser shall have raised not less than ten million dollars ($10,000,000) through a private placement of Purchaser debt or equity.

     6.08Line of Credit. Plainscapital Bank and the Company shall have cancelled the Line of Credit, dated as of June 20, 2007 (the “Line of Credit”) and released the personal guarantee of the Sellers in connection with such Line of Credit.

     6.09 Non-Compete Agreements. The Principals shall have entered into Non-Compete Agreements, substantially in the form of Exhibit C.

     6.10Employment Agreements. Each of the Dan Isaacs and Adam Moore shall have delivered executed employment agreements in the form of Exhibit E.

     6.11Proceedings. All proceedings to be taken on the part of Sellers in connection with the transactions contemplated by this Agreement and all documents incident thereto shall be reasonably satisfactory in form and substance to Purchaser, and Purchaser shall have received copies of all such documents and other evidences as Purchaser may reasonably request in order to establish the consummation of such transactions and the taking of all proceedings in connection therewith.

ARTICLE VII

CONDITIONS TO OBLIGATIONS OF SELLERS

     The obligations of Sellers hereunder to sell the Interests are subject to the fulfillment, at or before the Closing, of each of the following conditions (all or any of which may be waived in whole or in part by Sellers in their sole discretion):

     7.01Representations and Warranties. Each of the representations and warranties made by Purchaser in this Agreement shall be true and correct in all material respects on and as of the Closing Date as though such representation or warranty was made on and as of the Closing Date.

     7.02Performance. Purchaser shall have performed and complied with, in all material respects, each agreement, covenant and obligation required by this Agreement to be so performed or complied with by Purchaser at or before the Closing.

     7.03Purchaser’s Certificate. Purchaser shall have delivered to Sellers a certificate, dated the Closing Date and executed in the name and on behalf of Purchaser by the President or

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any Executive Vice President of Purchaser, substantially in the form and to the effect of Exhibit D hereto.

     7.04Orders and Laws. There shall not be in effect on the Closing Date any Order or Law restraining, enjoining or otherwise prohibiting or making illegal the consummation of any of the transactions contemplated by this Agreement or which could reasonably be expected to otherwise result in a material diminution of the benefits of the transactions contemplated by this Agreement to Sellers, and there shall not be pending or threatened on the Closing Date any Action or Proceeding in, before or by any Governmental or Regulatory Authority which could reasonably be expected to result in the issuance of any such Order or the enactment, promulgation or deemed applicability to Sellers, the Company or the transactions contemplated by this Agreement of any such Law.

     7.05Regulatory Consents and Approvals. All consents, approvals and actions of, filings with and written notices to any Governmental or Regulatory Authority necessary to permit Purchaser and Sellers to perform their obligations under this Agreement and to consummate the transactions contemplated hereby and thereby (a) shall have been duly obtained, made or given, (b) shall not be subject to the satisfaction of any condition that has not been satisfied or waived and (c) shall be in full force and effect, and all terminations or expirations of waiting periods imposed by any Governmental or Regulatory Authority necessary for the consummation of the transactions contemplated by this Agreement, shall have occurred.

     7.06Third Party Consents. All consents (or in lieu thereof waivers) to the performance by Purchaser and Sellers of their obligations under this Agreement or to the consummation of the transactions contemplated hereby and thereby as are required under the Contracts listed in Section 7.06 of the Disclosure Schedule (a) shall have been obtained, (b) shall not be subject to the satisfaction of any condition that has not been satisfied or waived and (c) shall be in full force and effect.

     7.07Proceedings. All proceedings to be taken on the part of Purchaser in connection with the transactions contemplated by this Agreement and all documents incident thereto shall be reasonably satisfactory in form and substance to Sellers, and Sellers shall have received copies of all such documents and other evidences as Sellers may reasonably request in order to establish the consummation of such transactions and the taking of all proceedings in connection therewith.

     7.08Financing. Purchaser shall have raised not less than ten million dollars ($10,000,000) through a private placement of Purchaser debt or equity.

     7.09Line of Credit. Plainscapital Bank and the Company shall have cancelled the Line of Credit, dated as of June 20, 2007 (the “Line of Credit”) and released the personal guarantee of the Sellers in connection with such Line of Credit.

     7.10Employment Agreements. Purchaser shall have delivered executed employment agreements for each of Dan Isaacs and Adam Moore in the form of Exhibit E.

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ARTICLE VIII

SURVIVAL OF REPRESENTATIONS, WARRANTIES, COVENANTS AND AGREEMENTS

     8.01Survival of Representations, Warranties, Covenants and Agreements. The representations and warranties of Sellers and Purchaser contained in this Agreement will survive the Closing until the eighteen month anniversary of the Closing Date; provided, however, that (a) the representations and warranties contained in Sections 2.01, 2.02, 2.04, 2.28, 3.01, 3.02 and 3.06 shall survive indefinitely; (b) with respect to matters covered by Section 2.11 and Articles IX and, insofar as it relates to ERISA or the Code, Section 2.14 such representations, warranties, covenants and agreements shall survive until sixty (60) days after the expiration of all applicable statutes of limitation (including all periods of extension, whether automatic or permissive); provided further, that any representation, warranty, covenant or agreement that would otherwise terminate in accordance with clause (a) or (b) above will continue to survive if a Claim Notice or Indemnity Notice, or written notice pursuant to Article IX (as applicable) shall have been timely given under Article X on or prior to such termination date, until the related claim for indemnification has been satisfied or otherwise resolved as provided in Article IX or Article X. All covenants and agreements in this Agreement survive indefinitely unless expressly provided otherwise herein.

ARTICLE IX

TAX MATTERS

      9.01Indemnity.

     (a)The Principals shall, severally and not jointly, proportionately indemnify Purchaser and the Company according to the percentages set forth on Schedule 10.01, against the following Taxes and, except as otherwise provided in Section 9.04, against any Loss, damage, Liability or expense incurred in connection with: (i) Taxes imposed on the Company with respect to taxable periods of such Person ending on or before the Closing Date; (ii) with respect to taxable periods beginning before the Closing Date and ending after the Closing Date, Taxes imposed on the Company which are allocable, pursuant to Section 9.01(b), to the portion of such period ending on the Closing Date; (iii) Taxes imposed on Purchaser or the Company as a result of any breach of warranty or misrepresentation under Section 2.11.

     (b)In the case of Taxes that are payable with respect to a taxable period that begins before the Closing Date and ends after the Closing Date, the portion of any such Tax that is allocable to the portion of the period ending on the Closing Date shall be:

(i)in the case of Taxes that are either (x) based upon or related to income or receipts, or (y) imposed in connection with any sale or other transfer or assignment of property (real or personal, tangible or intangible), deemed equal to the amount which would be payable if the taxable year ended with the Closing Date; and

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(ii)in the case of Taxes imposed on a periodic basis with respect to the Assets or otherwise measured by the level of any item, deemed to be the amount of such Taxes for the entire period (or, in the case of such Taxes determined on an arrears basis, the amount of such Taxes for the immediately preceding period), multiplied by a fraction the numerator of which is the number of calendar days in the period ending on the Closing Date and the denominator of which is the number of calendar days in the entire period.

      9.02Tax Returns and Payments.

     (a)From the date of this Agreement through the Closing Date, Sellers shall prepare and file or otherwise furnish in proper form to the appropriate Governmental Authority (or cause to be prepared and filed or so furnished) in a timely manner all Tax Returns relating to the Company that are due (taking into account any extensions) on or before the Closing Date. Purchaser shall file, or cause to be filed, all Tax Returns of the Company not filed by the Closing Date; provided, however, that the Sellers shall prepare and file the final IRS Form 1065, U.S. Return of Partnership Income, for the Company for the taxable period ending as of and including the Closing Date. With respect to any Tax Return required to be filed by Purchaser or Sellers with respect to the Company and as to which an amount of Tax is allocable to the other party under Section 9.01(b), the filing party shall provide the other party and its authorized representatives with a copy of such completed Tax Return and a statement certifying the amount of Tax shown on such Tax Return that is allocable to such other party pursuant to Section 9.01(b), together with appropriate supporting information and schedules at least thirty (30) Days prior to the due date (including any extension hereof) for the filing of such Tax Return, and such other party and its authorized representatives shall have the right to review and comment on such Tax Return and statement prior to the filing of such Tax Return.

     (b)Sellers shall pay or cause to be paid when due and payable all Taxes with respect to the Company for any taxable period, or portion thereof, ending on or before the Closing Date, except for Taxes being contested in good faith pursuant to the terms of Section 9.04 below, and Purchaser shall so pay or cause to be paid Taxes for any taxable period, or portion thereof, after the Closing Date (subject to its right of prompt indemnification from Sellers for Taxes attributable to the portion of any Tax period that includes the Closing Date pursuant to Sections 9.01(a) and 9.01(b)).

     9.03Refunds. Any Tax refund (including any interest with respect thereto) relating to the Company for any taxable period prior to the Closing Date shall be the property of Sellers, and if received by Purchaser or the Company shall be paid over promptly to Sellers.

      9.04Contests.

     (a)After the Closing, Purchaser shall promptly notify Sellers in writing of any written notice of a proposed assessment or claim in an audit or administrative or judicial proceeding of Purchaser or the Company which, if determined adversely to the taxpayer, would be grounds for indemnification under this Article IX; provided, however, that the failure to give such written notice will not affect Purchaser’s right to indemnification under this Article IX except to the extent, if any, that Purchaser’s failure to so notify Sellers precludes Sellers from contesting the Tax in question.

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     (b)In the case of an audit or administrative or judicial proceeding that relates to periods ending on or before the Closing Date, Sellers shall have the right at their expense to participate in and control the conduct of such audit or proceeding; provided, however, Purchaser may participate in any such audit or proceeding at its sole cost and expense and, if Sellers do not assume the defense of any such audit or proceeding, Purchaser may defend the same in such manner as it may deem appropriate, including, but not limited to, settling such audit or proceeding after five (5) Business Days prior written notice to Sellers setting forth the terms and conditions of settlement. The parties will work together to resolve any disputes should Sellers timely object to any settlement proposed by the Purchaser.

     (c)With respect to issues relating to a potential adjustment for which both Sellers and Purchaser or the Company could be liable, (i) each party may participate in the audit or proceedings, and (ii) the audit or proceedings shall be controlled by that party which would bear the burden of the greater portion of the sum of the adjustment and any corresponding adjustments that may reasonably be anticipated for future Tax periods. The principle set forth in the immediately preceding sentence shall govern also for purposes of deciding any issue that must be decided jointly (including choice of judicial forum) in situations in which separate issues are otherwise controlled under this Article IX by Purchaser and Sellers.

     (d)Neither Purchaser nor Sellers shall enter into any compromise or agree to settle any claim pursuant to any Tax audit or proceeding which would adversely affect the other party for such year or a subsequent year without the written consent of the other party, which consent may not be unreasonably withheld or delayed. Purchaser and Sellers shall cooperate, and Purchaser shall cause the Company to cooperate, in the defense against or compromise of any claim in any audit or proceeding.

     9.05Cooperation and Exchange of Information. Sellers and Purchaser will provide each other with such cooperation and information as either of them reasonably may request of the other in filing any Return, amended Return or claim for refund, determining a liability for Taxes or a right to a refund of Taxes, participating in or conducting any audit or other proceeding in respect of Taxes or making representations to or furnishing information to parties subsequently desiring to purchase the Company or any of their Assets or any part of the Business from Purchaser. Such cooperation and information shall include providing copies of relevant Tax Returns or portions thereof, together with accompanying schedules, related work papers and documents relating to rulings or other determinations by Tax authorities. Sellers shall be available (or shall cause their appropriate agents or representatives to be available) on a basis mutually convenient to all parties to provide explanations of any documents or information provided hereunder. Each of Sellers and Purchaser shall (and shall cause their appropriate agents and representatives to) retain all Tax Returns, schedules and work papers, records and other documents in their possession relating to Tax matters of the Company for each taxable period first ending after the Closing Date and for all prior taxable periods until the later of (a) the expiration of the statute of limitations of the taxable periods to which such Tax Returns and other documents relate, without regard to extensions except to the extent notified by the other party in writing of such extensions for the respective Tax periods, or (b) six (6) years following the due date (without extension) for such Tax Returns. Any information obtained under this Section 9.05 shall be kept confidential in accordance with Section 13.05, except as may be otherwise

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necessary in connection with the filing of Tax Returns or claims for refund or in conducting an audit or other proceeding.

      9.06Miscellaneous.

     (a) Sellers and Purchaser agree to treat all payments made by either of them to or for the benefit of the other (including any payments to the Company) under this Article IX, under other indemnity provisions of this Agreement and for any misrepresentations or breaches of warranties or covenants as adjustments to the Purchase Price for Tax purposes and that such treatment shall govern for purposes hereof except to the extent that the Laws of a particular jurisdiction provide otherwise.

     (b)Except with respect to a claim as to which notice is timely given on or prior to the termination date (which such claim shall continue until the related claim for indemnification has been satisfied or otherwise resolved), the obligations of Sellers to indemnify and hold harmless Purchaser and the Company pursuant to this Article IX, and the representations and warranties contained in Section 2.11, shall terminate at the close of business on the 30th day following the expiration of the applicable statute of limitations with respect to the Tax Liabilities in question (giving effect to any waiver, mitigation or extension thereof).

     (c)From and after the date of this Agreement, Sellers shall not, without the prior written consent of Purchaser (which may, in its sole and absolute discretion, withhold such consent), make, or cause or permit to be made, any Tax election that would affect the Company.

ARTICLE X

INDEMNIFICATION

      10.01Indemnification.

     (a)Subject to paragraph (c) of this Section and the other Sections of this Article X, the Principals shall, severally and not jointly, proportionately indemnify Purchaser Indemnified Parties according to the percentages set forth on Schedule 10.01, in respect of, and hold each of them harmless from and against, any and all Losses suffered, incurred or sustained by any of them or to which any of them becomes subject, resulting from, arising out of or relating to (i) any breach of representation or warranty or (ii) nonfulfillment of or failure to perform any covenant or agreement on the part of Sellers contained in this Agreement, as qualified in each case by the disclosures set forth in the Disclosure Schedule or any schedule to this Agreement. No Purchaser Indemnified Party (other than Purchaser) will be entitled to make or pursue any claim for indemnification hereunder without the express prior written approval of Purchaser.

     (b)Subject to the other Sections of this Article X, Purchaser shall indemnify the Seller Indemnified Parties in respect of, and hold each of them harmless from and against, any and all Losses suffered, incurred or sustained by any of them or to which any of them becomes subject, resulting from, arising out of or relating to any breach of representation or warranty or nonfulfillment of or failure to perform any covenant or agreement on the part of Purchaser

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contained in this Agreement, as qualified in each case by the disclosures set forth in any schedule or disclosure exhibit of Purchaser to this Agreement.

     (c)Notwithstanding the foregoing, the Principals will not be obligated to indemnify Purchaser or any other Purchaser Indemnified Parties under Section 10.01(a) unless and until the amount of all losses incurred by Purchaser or the other Purchaser Indemnified Parties, taken as a group, exceeds in the aggregate $50,000 (the “Basket”), in which event the Principals shall indemnify Purchaser and the other Purchaser Indemnified Parties for the full amount of such losses; provided, however, that the amount of losses the Principals shall be obligated to indemnify Purchaser and the other Purchaser Indemnified Parties shall not exceed 60% of the Initial Cash Payment.

     (d)Notwithstanding the foregoing, Purchaser will not be obligated to indemnify Sellers or any other Seller Indemnified Parties under Section 10.01(b) unless and until the amount of all losses incurred by Sellers or the other Seller Indemnified Parties, taken as a group, exceeds in the aggregate the Basket, in which event Purchaser shall indemnify Sellers and the Seller Indemnified Parties for the full amount of such losses; provided, however, that the amount of losses Purchaser shall be obligated to indemnify Sellers and the other Seller Indemnified Parties shall not exceed 60% of the Initial Cash Payment.

      10.02Recourse.

     (a) With respect to any allowable claim for indemnification that an Indemnified Party may bring against an Indemnifying Party pursuant to Section 10.01 of this Agreement, the Indemnified Party shall use commercially reasonable efforts to recover against insurance policies applicable to such Losses; provided that the foregoing provision shall in no way entitle the Indemnifying Party to delay the payment of any amounts otherwise payable pursuant to this Article X. To the extent that the Indemnified Party actually receives insurance proceeds that directly relate to the Losses to be indemnified by the Indemnifying Party, the Indemnifying Party shall be entitled to off-set such insurance proceeds against Losses to be paid to the Indemnified Party, or to the extent the Indemnifying Party has previously indemnified the Indemnified Party for such Losses, the Indemnified Party shall promptly remit to the Indemnifying Party such insurance proceeds.

     (b) Any Loss recoverable by an Indemnified Party against an Indemnifying Party pursuant to this Article X shall be reduced by any Tax benefit actually received by the Indemnified Party directly relating to the Loss.

     10.03Method of Asserting Claims. All claims for indemnification by any Indemnified Party under Section 10.01 will be asserted and resolved as follows:

     (a)In the event any claim or demand in respect of which an Indemnified Party might seek indemnity under Section 10.01 is asserted against or sought to be collected from such Indemnified Party by a Person other than Sellers or any Affiliate of Sellers or of Purchaser (a “Third Party Claim”), the Indemnified Party shall deliver a Claim Notice with reasonable promptness to the Indemnifying Party. If the Indemnified Party fails to provide the Claim Notice with reasonable promptness after the Indemnified Party receives written notice of such Third Party Claim, the Indemnifying Party will not be obligated to indemnify the Indemnified Party

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with respect to such Third Party Claim to the extent that the Indemnifying Party’s ability to defend has been irreparably prejudiced by such failure of the Indemnified Party. The Indemnifying Party will notify the Indemnified Party as soon as practicable within the Dispute Period whether the Indemnifying Party disputes its liability to the Indemnified Party under Section 10.01 and whether the Indemnifying Party desires, at its sole cost and expense, to defend the Indemnified Party against such Third Party Claim.

     (i)If the Indemnifying Party notifies the Indemnified Party within the Dispute Period that the Indemnifying Party desires to defend the Indemnified Party with respect to the Third Party Claim pursuant to this Section 10.03(a), then the Indemnifying Party will have the right to defend, with counsel reasonably satisfactory to the Indemnified Party, at the sole cost and expense of the Indemnifying Party, such Third Party Claim by all appropriate proceedings, which proceedings will be vigorously and diligently prosecuted by the Indemnifying Party to a final conclusion or will be settled at the discretion of the Indemnifying Party (but only with the consent of the Indemnified Party, which consent will not be unreasonably withheld, in the case of any settlement that provides for any relief other than the payment of monetary damages as to which the Indemnified Party will be indemnified in full). The Indemnifying Party will have full control of such defense and proceedings, including (except as provided in the immediately preceding sentence) any settlement thereof; provided, however, that the Indemnified Party may, at the sole cost and expense of the Indemnified Party, at any time prior to the Indemnifying Party’s delivery of the notice referred to in the first sentence of this clause (i), file any motion, answer or other pleadings or take any other action that the Indemnified Party reasonably believes to be necessary or appropriate to protect its interests; and providedfurther, that if requested by the Indemnifying Party, the Indemnified Party will, at the sole cost and expense of the Indemnifying Party, provide reasonable cooperation to the Indemnifying Party in contesting any Third Party Claim that the Indemnifying Party elects to contest. The Indemnified Party may retain separate counsel to represent it in, but not control, any defense or settlement of any Third Party Claim controlled by the Indemnifying Party pursuant to this clause (i), and the Indemnified Party will bear its own costs and expenses with respect to such separate counsel, except as provided in the preceding sentence and except that the Indemnifying Party will pay the costs and expenses of such separate counsel if (x) in the Indemnified Party’s good faith judgment, it is advisable, based on advice of counsel, for the Indemnified Party to be represented by separate counsel because a conflict or potential conflict exists between the Indemnifying Party and the Indemnified Party which makes representation of both parties inappropriate under applicable standards of professional conduct or (y) the named parties to such Third Party Claim include both the Indemnifying Party and the Indemnified Party and the Indemnified Party determines in good faith, based on advice of counsel, that defenses are available to it that are unavailable to the Indemnifying Party. Notwithstanding the foregoing, the Indemnified Party may retain or take over the control of the defense or settlement of any Third Party Claim the defense of which the Indemnifying Party has elected to control if the Indemnified Party irrevocably waives its right to indemnity under Section 10.01 with respect to such Third Party Claim.

     (ii)If the Indemnifying Party fails to notify the Indemnified Party within the Dispute Period that the Indemnifying Party desires to defend the Third Party Claim

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pursuant to Section 10.03(a), then the Indemnified Party will have the right to defend, at the sole cost and expense of the Indemnifying Party, the Third Party Claim by all appropriate proceedings, which proceedings will be prosecuted by the Indemnified Party in good faith or will be settled at the discretion of the Indemnified Party (with the consent of the Indemnifying Party, which consent will not be unreasonably withheld). The Indemnified Party will have full control of such defense and proceedings, including (except as provided in the immediately preceding sentence) any settlement thereof; provided, however, that if requested by the Indemnified Party, the Indemnifying Party will, at the sole cost and expense of the Indemnifying Party, provide reasonable cooperation to the Indemnified Party and its counsel in contesting any Third Party Claim which the Indemnified Party is contesting. Notwithstanding the foregoing provisions of this clause (ii), if the Indemnifying Party has notified the Indemnified Party within the Dispute Period that the Indemnifying Party disputes its liability hereunder to the Indemnified Party with respect to such Third Party Claim and if such dispute is resolved in favor of the Indemnifying Party in the manner provided in clause (iii) below, the Indemnifying Party will not be required to bear the costs and expenses of the Indemnified Party’s defense pursuant to this clause (ii) or of the Indemnifying Party’s participation therein at the Indemnified Party’s request, and the Indemnified Party will reimburse the Indemnifying Party in full for all reasonable costs and expenses incurred by the Indemnifying Party in connection with such litigation.

     (iii)If the Indemnifying Party notifies the Indemnified Party that it does not dispute its liability to the Indemnified Party with respect to the Third Party Claim under Section 10.01 or fails to notify the Indemnified Party within the Dispute Period whether the Indemnifying Party disputes its liability to the Indemnified Party with respect to such Third Party Claim, the Loss arising from such Third Party Claim will be conclusively deemed a liability of the Indemnifying Party under Section 10.01 and the Indemnifying Party shall pay the amount of such Loss to the Indemnified Party on demand following the final determination thereof. If the Indemnifying Party has timely disputed its liability with respect to such claim, the Indemnifying Party and the Indemnified Party will proceed in good faith to negotiate a resolution of such dispute, and if not resolved through negotiations within the Resolution Period, such dispute shall be resolved by litigation in a court of competent jurisdiction.

     (b)In the event any Indemnified Party should have a claim under Section 10.01 against any Indemnifying Party that does not involve a Third Party Claim, the Indemnified Party shall deliver an Indemnity Notice with reasonable promptness to the Indemnifying Party. The failure by any Indemnified Party to give the Indemnity Notice shall not impair such party’s rights hereunder except to the extent that an Indemnifying Party demonstrates that it has been irreparably prejudiced thereby. If the Indemnifying Party notifies the Indemnified Party that it does not dispute the claim described in such Indemnity Notice or fails to notify the Indemnified Party within the Dispute Period whether the Indemnifying Party disputes the claim described in such Indemnity Notice, the Loss arising from the claim specified in such Indemnity Notice will be conclusively deemed a liability of the Indemnifying Party under Section 10.01 and the Indemnifying Party shall pay the amount of such Loss to the Indemnified Party on demand following the final determination thereof. If the Indemnifying Party has timely disputed its liability with respect to such claim, the Indemnifying Party and the Indemnified Party will

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proceed in good faith to negotiate a resolution of such dispute, and if not resolved through negotiations within the Resolution Period, such dispute shall be resolved by litigation in a court of competent jurisdiction.

     10.04Tax Matters. Anything in this Article X to the contrary notwithstanding, the rights and obligations of the parties with respect to indemnification for any and all Tax matters shall be governed by Article IX and not this Article X.

ARTICLE XI

TERMINATION

     11.01Termination. This Agreement may be terminated, and the transactions contemplated hereby may be abandoned:

     (a)by Purchaser if, between the date hereof and the Closing events or conditions occur that have resulted, or would reasonably be expected to result in, a material adverse effect on the Business or Condition of the Company;

     (b)at any time before the Closing, by mutual written agreement of Sellers and Purchaser;

     (c)at any time before the Closing, by Sellers or Purchaser, in the event (i) of a material breach hereof by the non-terminating party if such non-terminating party fails to cure such breach within five (5) Business Days following notification thereof by the terminating party or (ii) upon notification of the non-terminating party by the terminating party that the satisfaction of any condition to the terminating party’s obligations under this Agreement becomes impossible or impracticable with the use of commercially reasonable efforts if the failure of such condition to be satisfied is not caused by a breach hereof by the terminating party; or

     (d)at any time after December 1, 2007 by Sellers or Purchaser upon notification of the non-terminating party by the terminating party if the Closing shall not have occurred on or before such date and such failure to close is not caused by a breach of this Agreement by the terminating party.

     11.02Effect of Termination. If this Agreement is validly terminated pursuant to Section 11.01(a), (b),(c), or (d), this Agreement will forthwith become null and void, and there will be no liability or obligation on the part of the Company, Sellers or Purchaser (or any of their respective stockholders, officers, directors, employees, agents or other representatives or Affiliates), except that the provisions with respect to expenses in Section 13.03 and confidentiality in Section 13.05 will continue to apply following any such termination. Notwithstanding any other provision in this Agreement to the contrary, upon termination of this Agreement pursuant to Section 11.01 (a) or (c), Sellers will remain liable to Purchaser for any breach of this Agreement by Sellers existing at the time of such termination, and Purchaser will remain liable to Sellers for any breach of this Agreement by Purchaser existing at the time of such termination, and Sellers or Purchaser may seek such remedies, including damages and fees of attorneys, against the other with respect to any such breach as are provided in this Agreement or as are otherwise available at Law or in equity.

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ARTICLE XII

DEFINITIONS

      12.01Definitions.

     (a)Defined Terms. As used in this Agreement, the following defined terms have the meanings indicated below:

“Accounts Receivable” means all trade accounts receivable and all notes, bonds and other evidences of Indebtedness of and rights to receive payments arising out of sales occurring in the conduct of the business of the Company.
“Actions or Proceedings” means any action, suit, proceeding, arbitration or Governmental or Regulatory Authority investigation or audit.
“Acquisition Proposal” means any proposal for a merger or other business combination to which the Company is a party or the direct or indirect acquisition of any partnership or equity interest in, or a substantial portion of the assets of, the Company, other than the transactions contemplated by this Agreement.
“Affiliate” means any Person that directly, or indirectly through one of more intermediaries, controls or is controlled by or is under common control with the Person specified. For purposes of this definition, control of a Person means the power, direct or indirect, to direct or cause the direction of the management and policies of such Person whether by Contract or otherwise and, in any event and without limitation of the previous sentence, any Person owning ten percent (10%) or more of the voting securities of another Person shall be deemed to control that Person.
“Agreement” means this Purchase Agreement, the Exhibits, the Disclosure Schedule and the certificates delivered in accordance with Sections 6.03 and 7.03, as the same shall be amended from time to time.
“Assets and Properties” of any Person means all assets and properties of every kind, nature, character and description (whether real, personal or mixed, whether tangible or intangible, whether absolute, accrued, contingent, fixed or otherwise and wherever situated), including the goodwill related thereto, operated, owned or leased by such Person, including without limitation cash, cash equivalents, Investment Assets, accounts and notes receivable, chattel paper, documents, instruments, general intangibles, real estate, equipment, inventory, goods and Intellectual Property.
	“Bad Debt Reserves” has the meaning ascribed to it in Section 1.03(a).
	“Baseline Earnout Shares” has the meaning ascribed to it in Section 1.04.
	“Basket” has the meaning ascribed to it in Section 10.01(c).

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“Benefit Plan” means any Plan established by the Company, or any predecessor or Affiliate of the Company, existing at the Closing Date or prior thereto, to which the Company contributes or has contributed, or under which any Employee, former employee or director of the Company or any beneficiary thereof is covered, is eligible for coverage or has benefit rights as a result of employment by the Company or service as a director of the Company.
“Books and Records” of any Person means all files, documents, instruments, papers, books and records relating to the business, operations, condition of (financial or otherwise), results of operations and Assets and Properties of such Person, including without limitation financial statements, Tax Returns and related work papers and letters from accountants, budgets, pricing guidelines, ledgers, journals, deeds, title policies, minute books, stock certificates and books, stock transfer ledgers, Contracts, Licenses, customer lists, computer files and programs, retrieval programs, operating data and plans and environmental studies and plans.
“Business Day” means a day other than Saturday, Sunday or any day on which banks located in the State of New York are authorized or obligated to close.
“Business or Condition of the Company” means the business, condition (financial or otherwise), results of operations, and Assets and Properties of the Company.
“Cash Payment” has the meaning ascribed to it in Section 1.02 (a).
“Claim Notice” means written notification pursuant to Section 10.02(a) of a Third Party Claim as to which indemnity under Section 10.01 is sought by an Indemnified Party, enclosing a copy of all papers served, if any, and specifying the nature of and basis for such Third Party Claim and for the Indemnified Party’s claim against the Indemnifying Party under Section 10.01, together with the amount or, if not then reasonably determinable, the estimated amount, determined in good faith, of the Loss arising from such Third Party Claim.
	“Closing” has the meaning ascribed to it in Section 1.08.
	“Closing Date” has the meaning ascribed to it in Section 1.08.
	“Closing Date Accounts Receivable” has the meaning ascribed to it in Section 1.03(a).
	“Closing Date Balance Sheet” has the meaning ascribed to it in Section 1.02(b)(ii).
	“Closing Date Certificate” has the meaning ascribed to it in Section 1.02(b)(ii).
	“Closing Date Financial Statements” has the meaning ascribed to it in Section 1.02(b)(ii).
	“Closing Date Net Book Value” has the meaning ascribed to it in Section 1.02(b)(ii).

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     “Code” means the Internal Revenue Code of 1986, as amended, and the rules and regulations promulgated thereunder.

     “Common Stock” means the Company’s common stock, par value $.001 per share.

     “Company” has the meaning ascribed to it in the forepart of this Agreement.

     “Contract” means any agreement, lease, license, evidence of Indebtedness, mortgage, indenture, security agreement or other contract (whether written or oral).

     “Deficiency Amount” has the meaning ascribed to it in Section 1.02(b)(iv).

     “Defined Benefit Plan” means each Benefit Plan which is subject to Part 3 of Title I of ERISA, Section 412 of the Code or Title IV of ERISA.

     “Disclosure Schedule” means the record delivered to Purchaser by Sellers, containing all lists, descriptions, exceptions and other information and materials as are required to be included therein pursuant to this Agreement.

     “Dispute Period” means the period ending thirty (30) days following receipt by an Indemnifying Party of either a Claim Notice or an Indemnity Notice.

     “Earnout Shares” has the meaning ascribed to it in Section 1.05.

     “EBITDA” means , for the relevant period, net income for the Company plus provision for interest expense, income taxes, depreciation, amortization of goodwill and other purchased intangibles, and stock-based compensation, less interest income and other income and gain on sale of assets, determined in accordance with GAAP as applied by the Purchaser consistent with the description in the footnotes to the Purchaser’s audited financial statements filed with its Form 10-K for the year 2006; provided, however, that EBITDA shall not include: (A) any gains, losses or profits realized from the sale of any assets other than in the ordinary course of business, (B) expenses of the Purchaser incurred in connection with the execution of this Agreement and the performance of obligations hereunder or the operation of the Company subsequent to the Closing, other than reasonable expenses charged to the Company for the Company’s use of the Purchaser’s servers, management fees, general overhead expenses, legal and accounting fees and expenses and insurance expenses related to the Company’s business; and (C) any payments made or required to be made by the Company or the Purchaser under this Agreement; provided further, that any products or services provided to the Company by the Purchaser or any affiliate of the Purchaser shall be charged to the Company in an amount no more than that the Purchaser or any affiliate of the Purchaser charges unrelated parties for the same or substantially equivalent products or services.

     “Employees” means those Persons employed by the Company immediately prior to the Closing Date.

     “Employment Agreements” means those Employment Agreements with Dan Isaacs and Adam Moore, as described in Section 7.08.

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     “Encumbrance” means any security interest, pledge, hypothecation, mortgage, lien (including environmental and Tax liens), lease, license or encumbrance.

     “ERISA” means the Employee Retirement Income Security Act of 1974, as amended, and the rules and regulations promulgated thereunder.

     “ERISA Affiliate” means any Person treated as a single employer with the Company pursuant to Sections 414(b), (c), (m) or (o) of the Code or Title IV of ERISA.

     “Estimated Net Book Value” has the meaning ascribed to it in Section 1.02(b)(i).

     “Excess Amount” has the meaning ascribed to it in Section 1.02(b)(iv).

     “Excess Earnout Shares” has the meaning ascribed to it in Section 1.05.

     “Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder.

     “Fair Market Value” means the volume weighted average price of Purchaser common stock on the NASDAQ Stock Market for the ten (10) Trading Days immediately preceding the applicable date.

     “Final Net Book Value” has the meaning ascribed to it in Section 1.02(b)(iv).

     “Financial Statements” means the financial statements of the Company delivered to Purchaser pursuant to Section 2.08.

     “GAAP” means generally accepted accounting principles, consistently applied throughout the specified period and in the immediately prior comparable period.

     “General Partner” has the meaning ascribed to it in the forepart of this Agreement.

     “Governmental or Regulatory Authority” means any court, tribunal, arbitrator, authority, agency, commission, official or other instrumentality of the United States, any foreign country or any domestic or foreign state, county, city or other political subdivision (including, without limitation, the United States Securities and Exchange Commission, the New York Stock Exchange, The Nasdaq Stock Market and the American Stock Exchange).

     “Indebtedness” of any Person means all obligations of such Person (i) for borrowed money, (ii) evidenced by notes, bonds, debentures or similar instruments, (iii) for the deferred purchase price of goods or services (other than trade payables or accruals incurred in the ordinary course of business), (iv) under capital leases and (v) in the nature of guarantees of the obligations described in clauses (i) through (iv) above of any other Person.

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     “Indemnified Party” means any Person claiming indemnification under any provision of Article X.

     “Indemnifying Party” means any Person against whom a claim for indemnification is being asserted under any provision of Article X.

     “Indemnity Notice” means written notification pursuant to Section 10.02 of a claim for indemnity under Article X by an Indemnified Party, specifying the nature of and basis for such claim, together with the amount or, if not then reasonably determinable, the estimated amount, determined in good faith, of the Loss arising from such claim.

     “Independent Accountant” has the meaning ascribed to it in Section 1.02(b)(iii).

     “Initial Cash Payment” has the meaning ascribed to it in Section 1.02 (a).

      “Intellectual Property” means all patents and patent rights, trademarks and trademark rights, trade names and trade name rights, service marks and service mark rights, service names and service name rights, brand names, inventions, trade secrets, processes, formulae, copyrights and copyright rights, trade dress, business and product names, logos, slogans, trade secrets, industrial models, processes, designs, methodologies, computer programs (including all source codes) and related documentation, technical information, manufacturing, engineering and technical drawings, know-how and all pending applications for and registrations of patents, trademarks, service marks and copyrights.

     “Interests” has the meaning ascribed to it in the forepart of this Agreement.

     “Investment Assets” means all debentures, notes and other evidences of Indebtedness, stocks, securities (including rights to purchase and securities convertible into or exchangeable for other securities), interests in joint ventures and general and limited partnerships, mortgage loans and other investment or portfolio assets owned of record or beneficially by the Company (other than trade receivables generated in the ordinary course of business of the Company).

     “IRS” means the United States Internal Revenue Service.

     “July 31 Balance Sheet” has the meaning ascribed to it in Section 1.02(b)(i).

     “Knowledge of Sellers”, “Known to Sellers” or “Sellers’ Knowledge” means the knowledge of the Principals.

     “Laws” means all laws, statutes, rules, regulations, ordinances and other pronouncements having the effect of law of the United States, any foreign country or any domestic or foreign state, county, city or other political subdivision or of any Governmental or Regulatory Authority.

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     “Liabilities” means all Indebtedness, obligations and other liabilities of a Person (whether absolute, accrued, contingent, fixed or otherwise, or whether due or to become due).

     “Licenses” means all licenses, permits, certificates of authority, authorizations, approvals, registrations, franchises and similar consents granted or issued by any Governmental or Regulatory Authority.

     “Liens” means any mortgage, pledge, assessment, security interest, lease, lien, adverse claim, levy, charge or other encumbrance of any kind, or any conditional sale Contract, title retention Contract or other Contract to give any of the foregoing.

     “Limited Partners” has the meaning ascribed to it in the forepart of this Agreement.

     “Line of Credit” has the meaning ascribed to it in Section 6.08.

     “Loss” means any and all damages, fines, fees, penalties, deficiencies, losses and expenses (including without limitation interest, court costs, fees of attorneys, accountants and other experts or other expenses of litigation or other proceedings or of any claim, default or assessment).

     “Net Book Value of the Company” means the current assets of the Company (net of allowances for doubtful accounts and accumulated depreciation) minus the current liabilities of the Company as shown on the applicable balance sheet of the Company, calculated in accordance with GAAP.

     “Option” with respect to any Person means any security, right, subscription, warrant, option, “phantom” stock right or other Contract that gives the right to (i) purchase or otherwise receive or be issued any shares of capital stock of such Person or any security of any kind convertible into or exchangeable or exercisable for any shares of capital stock of such Person or (ii) receive or exercise any benefits or rights similar to any rights enjoyed by or accruing to the holder of shares of capital stock of such Person, including any rights to participate in the equity or income of such Person or to participate in or direct the election of any directors or officers of such Person or the manner in which any shares of capital stock of such Person are voted.

     “Order” means any writ, judgment, decree, injunction or similar order of any Governmental or Regulatory Authority (in each such case whether preliminary or final).

     “Patents and Trademarks” has the meaning ascribed to it in Section 2.17.

     “PBGC” means the Pension Benefit Guaranty Corporation established under ERISA.

     “Pension Benefit Plan” means each Benefit Plan which is a pension benefit plan within the meaning of Section 3(2) of ERISA.

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“Per Share Price” means the volume weighted average price of Purchaser common stock on the NASDAQ Stock Market for the ten (10) Trading Days immediately preceding the execution date of this Agreement.      “Person” means any natural person, corporation, general partnership, limited partnership, proprietorship, other business organization, trust, union, association or Governmental or Regulatory Authority.      “Plan” means any bonus, incentive compensation, deferred compensation, pension, profit sharing, retirement, stock purchase, stock option, stock ownership, stock appreciation rights, phantom stock, leave of absence, layoff, vacation, day or dependent care, legal services, cafeteria, life, health, accident, disability, workmen’s compensation or other insurance, severance, separation or other employee benefit plan, practice, policy or arrangement of any kind, whether written or oral, including, but not limited to, any “employee benefit plan” within the meaning of Section 3(3) of ERISA.
	“Pre-Closing Certificate” has the meaning ascribed to it in Section 1.02(b)(i) . “Principals” means Dan Isaacs, Adam Moore and Cy Huckaba. “Purchase Price” has the meaning ascribed to it in Section 1.02(a) . “Principal Market” means The Nasdaq Stock Market. “Purchased Shares” has the meaning ascribed to it in Section 1.02(a) . “Purchased Shares Transfer” has the meaning ascribed to it in Section 1.11(c) . “Purchaser” has the meaning ascribed to it in the forepart of this Agreement.
“Purchaser Common Stock” means the common stock, par value $0.01 per share, of Purchaser.      “Purchaser’s Accountants” has the meaning ascribed to it in Section 1.02(b)(ii).      “Purchaser Indemnified Parties” means Purchaser and its officers, directors, employees, agents and Affiliates (including, following the Closing Date, the Company).      “Qualified Plan” means any Benefit Plan which is intended to qualify under Section 401(a) of the Code.      “Receivables Notice” has the meaning ascribed to it in Section 1.03(c).      “Representatives” has the meaning ascribed to it in Section 4.02.      “Resolution Period” means the period ending thirty (30) days following receipt by an Indemnified Party of a written notice from an Indemnifying Party stating that it disputes all or any portion of a claim set forth in a Claim Notice or an Indemnity Notice.

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     “SEC” means the Securities and Exchange Commission.

     “Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations thereunder.

     “Sellers” has the meaning ascribed to it in the forepart of this Agreement.

     “Sellers’ Accountants” has the meaning ascribed to it in Section 1.02(b)(ii) .

      “Seller Indemnified Parties” means Sellers and their agents and Affiliates.    

      “Subject Defined Benefit Plan” means each Defined Benefit Plan listed and described in Section 2.13(a) of the Disclosure Schedule.

     “Tax” or Taxes” means any Federal, state, county, local or foreign income, profits, gross receipts, franchise, sales, use, occupancy, excise gains, value added, withholding, employment, payroll, social security, general property, personal property, intangible property and all other taxes of any nature, fees, levies, duties, assessments, deficiencies or charges imposed by any Governmental or Regulatory Authority, and includes any interest and penalties (civil or criminal) on or additions to any such taxes and any expenses incurred in connection with the determination, settlement or litigation of any Tax Liability.

     “Tax Returns” means a report, return or other information (including any amendments) required to be supplied to a Governmental or Regulatory Authority with respect to Taxes.

     “Third Party Claim” has the meaning ascribed to it in Section 10.02(a).

     “Trading Day” means any day on which securities are traded on The NASDAQ Stock Market.

     “Transfer Taxes” means all sales, use, transfer, real property transfer, reporting, recording, gains, stock transfer and other similar taxes and fees arising out of or in connection with the transactions effected pursuant to this Agreement.

     (b)Construction of Certain Terms and Phrases. Unless the context of this Agreement otherwise requires, (i) words of any gender include each other gender; (ii) words using the singular or plural number also include the plural or singular number, respectively; (iii) the terms “hereof,” “herein,” “hereby” and derivative or similar words refer to this entire Agreement; (iv) the terms “Article” or “Section” refer to the specified Article or Section of this Agreement; and (v) the phrases “ordinary course of business” and “ordinary course of business consistent with past practice” refer to the business and practice of the Company. Whenever this Agreement refers to a number of days, such number shall refer to calendar days unless Business Days are specified. All accounting terms used herein and not expressly defined herein shall have the meanings given to them under GAAP.

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ARTICLE XIII

MISCELLANEOUS

     13.01Notices. All notices, requests and other communications hereunder must be in writing and will be deemed to have been duly given only if delivered personally or by facsimile transmission or mailed (first class postage prepaid) to the parties at the following addresses or facsimile numbers:

If to Purchaser, to:

Viewpoint Corporation

498 Seventh Avenue

New York, NY 10018

Facsimile No: (212) 201-0801

Attn: Chief Financial Officer

with a copy to:

Viewpoint Corporation

498 Seventh Avenue

New York, NY 10018

Facsimile No: (212) 201-0846

Attn: General Counsel

If to Sellers, to:

Dan Isaacs

Adam Moore

c/o Springbox, Ltd.

706 Congress Ave.

Suite A

Austin, Texas 78701

and

Springbox GP, LLC

c/o Springbox, Ltd.

706 Congress Ave.

Suite A

Austin, Texas 78701

with a copy to:

Brian Fenske

Fulbright & Jaworski L.L.P.

600 Congress Ave, Ste. 2400

Austin, Texas 78701

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All such notices, requests and other communications will (i) if delivered personally to the address as provided in this Section, be deemed given upon delivery, (ii) if delivered by facsimile transmission to the facsimile number as provided in this Section, be deemed given upon receipt, and (iii) if delivered by mail in the manner described above to the address as provided in this Section, be deemed given upon receipt (in each case regardless of whether such notice, request or other communication is received by any other Person to whom a copy of such notice, request or other communication is to be delivered pursuant to this Section). Any party from time to time may change its address, facsimile number or other information for the purpose of notices to that party by giving notice specifying such change to the other party hereto.

     13.02Entire Agreement. This Agreement supersedes all prior discussions and agreements between the parties with respect to the subject matter hereof and contains the sole and entire agreement between the parties hereto with respect to the subject matter hereof.

     13.03Expenses. Except as otherwise expressly provided in this Agreement, whether or not the transactions contemplated hereby are consummated, each party will pay its own costs and expenses incurred in connection with the negotiation, execution and closing of this Agreement and the transactions contemplated hereby.

     13.04Public Announcements. Other than in connection with the initial press release approved by the Company and Purchaser and the related statements to the public to be made by Purchaser at the conference call referenced in such press release if any, at all other times at or before the Closing, Sellers and Purchaser will not issue or make any reports, statements or releases to the public with respect to this Agreement or the transactions contemplated hereby without the consent of the other, which consent shall not be unreasonably withheld. If either party is unable to obtain the approval of its public report, statement or release from the other party and such report, statement or release is, in the opinion of legal counsel to such party, required by Law in order to discharge such party’s disclosure obligations, then such party may make or issue the legally required report, statement or release and promptly furnish the other party with a copy thereof. Sellers and Purchaser will also obtain the other party’s prior approval of any press release to be issued immediately following the Closing announcing the consummation of the transactions contemplated by this Agreement.

     13.05Confidentiality. Each party hereto will hold, and will use its best efforts to cause its Affiliates, and their respective Representatives to hold, in strict confidence from any Person (other than any such Affiliate or Representative), unless (i) compelled to disclose by judicial or administrative process (including without limitation in connection with obtaining the necessary approvals of this Agreement and the transactions contemplated hereby of Governmental or Regulatory Authorities) or by other requirements of Law or (ii) disclosed in an Action or Proceeding brought by a party hereto in pursuit of its rights or in the exercise of its remedies hereunder, all documents and information concerning the other party or any of its Affiliates furnished to it by the other party or such other party’s Representatives in connection with this Agreement or the transactions contemplated hereby, except to the extent that such documents or information can be shown to have been (a) previously known by the party receiving such

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documents or information, (b) in the public domain (either prior to or after the furnishing of such documents or information hereunder) through no fault of such receiving party or (c) later acquired by the receiving party from another source if the receiving party is not aware that such source is under an obligation to another party hereto to keep such documents and information confidential; provided that following the Closing the foregoing restrictions will not apply to Purchaser’s use of documents and information concerning the Company furnished by Sellers hereunder. In the event the transactions contemplated hereby are not consummated, upon the request of the other party, each party hereto will, and will cause its Affiliates and their respective Representatives to, promptly (and in no event later than five (5) Business Days after such request) redeliver or cause to be redelivered all copies of documents and information furnished by the other party in connection with this Agreement or the transactions contemplated hereby and destroy or cause to be destroyed all notes, memoranda, summaries, analyses, compilations and other writings related thereto or based thereon prepared by the party furnished such documents and information or its Representatives.

     13.06Waiver. Any term or condition of this Agreement may be waived at any time by the party that is entitled to the benefit thereof, but no such waiver shall be effective unless set forth in a written instrument duly executed by or on behalf of the party waiving such term or condition. No waiver by any party of any term or condition of this Agreement, in any one or more instances, shall be deemed to be or construed as a waiver of the same or any other term or condition of this Agreement on any future occasion. All remedies, either under this Agreement or by Law or otherwise afforded, will be cumulative and not alternative.

     13.07Amendment. This Agreement may be amended, supplemented or modified only by a written instrument duly executed by or on behalf of each party hereto.

     13.08No Third Party Beneficiary. The terms and provisions of this Agreement are intended solely for the benefit of each party hereto and their respective successors or permitted assigns, and it is not the intention of the parties to confer third-party beneficiary rights upon any other Person other than any Person entitled to indemnity under Articles IX or X.

     13.09No Assignment; Binding Effect. Neither this Agreement nor any right, interest or obligation hereunder may be assigned by any party hereto without the prior written consent of the other party hereto and any attempt to do so will be void, except (a) for assignments and transfers by operation of Law and (b) that Purchaser may assign any or all of its rights, interests and obligations hereunder to (i) a wholly-owned subsidiary of Purchaser (provided that any such subsidiary agrees in writing to be bound by all of the terms, conditions and provisions contained herein), (ii) any post-Closing purchaser of all of the issued and outstanding stock of the Company or a substantial part of its assets or (iii) any financial institution providing purchase money or other financing to Purchaser or the Company from time to time as collateral security for such financing, but no such assignment referred to in clause (i) or (ii) shall relieve Purchaser of its obligations hereunder. Subject to the preceding sentence, this Agreement is binding upon, inures to the benefit of and is enforceable by the parties hereto and their respective successors and assigns.

     13.10Headings. The headings used in this Agreement have been inserted for convenience of reference only and do not define or limit the provisions hereof.

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     13.11Consent to Jurisdiction and Venue. Each party hereby irrevocably submits to the exclusive jurisdiction of the United States District Court for the Southern District of New York or any court of the State of New York located in the Borough of Manhattan in the City of New York in any action, suit or proceeding arising out of or relating to this Agreement or any of the transactions contemplated hereby, and agrees that any such action, suit or proceeding shall be brought only in such court. Each party hereby irrevocably waives, to the fullest extent permitted by Law, any objection that it may now or hereafter have to the laying of the venue of any such action, suit or proceeding brought in such a court and any claim that any such action, suit or proceeding brought in such a court has been brought in an inconvenient forum.

     13.12Invalid Provisions. If any provision of this Agreement is held to be illegal, invalid or unenforceable under any present or future Law, and if the rights or obligations of any party hereto under this Agreement will not be materially and adversely affected thereby, (a) such provision will be fully severable, (b) this Agreement will be construed and enforced as if such illegal, invalid or unenforceable provision had never comprised a part hereof, and (c) the remaining provisions of this Agreement will remain in full force and effect and will not be affected by the illegal, invalid or unenforceable provision or by its severance herefrom.

     13.13Governing Law. This Agreement shall be governed by and construed in accordance with the Laws of the State of New York applicable to a Contract executed and performed in such State, without giving effect to the conflicts of laws principles thereof.

     13.14Counterparts. This Agreement may be executed in any number of counterparts, including facsimile counterparts, each of which will be deemed an original, but all of which together will constitute one and the same instrument.

     13.15Representation. Each party to this Agreement hereby acknowledges that it or he has had an opportunity to ask for and has obtained information relevant to the negotiation and preparation of this Agreement and the transactions provided for herein and to consult with counsel of its or his choosing with respect to such matters, and has either engaged counsel of its or his choosing to represent it or him in connection with the negotiation and preparation of this Agreement and the transactions provided for herein, or has elected not to be represented by counsel.

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IN WITNESS WHEREOF, each party hereto has signed this Agreement, or caused this Agreement to be signed by its officer thereunto duly authorized, as of the date first above written.

VIEWPOINT CORPORATION

By:

         Name:

         Title:

SPRINGBOX GP, LLC

By:

         Name:

         Title:

DAN ISAACS

By:

           Name: Dan Isaacs

ADAM MOORE

By:

           Name: Adam Moore

CY HUCKABA

By:

           Name: Cy Huckaba

LARRY ISAACS

By:

           Name: Larry Isaacs

GARY MOORE

By:

           Name: Gary Moore

Exhibit 10.01

Indemnification Percentages of Principals

Dan Isaacs	47.5%
Adam Moore	47.5%
Cy Huckaba	5%

EX-10.1

Exhibit 10.1

SECURITIES PURCHASE AGREEMENT

                    SECURITIES PURCHASE AGREEMENT, dated as of October 18, 2007, between Viewpoint Corporation, a Delaware corporation (the “COMPANY”), and the investors listed on Schedule of Purchasers (the “SCHEDULE OF PURCHASERS”) attached hereto as Exhibit A (individually, a “PURCHASER” and collectively, the “PURCHASERS”).

PREAMBLE

                    The Company has duly authorized (i) the issuance of 15,714,285 shares of the Company’s common stock, par value $.001 per share (the “COMMON STOCK”) (ii) the issuance of warrants to purchase 4,714,285 shares of Common Stock to the Purchasers (such number being thirty percent (30%) of the total number of shares of Common Stock issuable to the Purchasers as described above) (the “WARRANTS”) and (iii) the issuance of warrants to the Company’s financial advisor as provided in Schedule 3.01(v), pursuant to the provisions of this Securities Purchase Agreement and the Warrants to be entered into simultaneously with this Securities Purchase Agreement, the form of which is attached as Exhibit B hereto.

                    Each party hereto agrees as follows for the benefit of the other party:

ARTICLE ONE

DEFINITIONS

SECTION 1.01. DEFINITIONS.

                    “8-K FILING” has the meaning set forth in Section 4.09 of the Securities Purchase Agreement.

                    “AFFILIATE” has the meaning as set forth in Rule 144.

                    “AGENT” means Merriman Curhan Ford & Co.

                    “AVAILABLE UNDERSUBSCRIPTION AMOUNT” has the meaning set forth in Section 4.10(b)(i) of the Securities Purchase Agreement.

                    “BASIC AMOUNT” has the meaning set forth in Section 4.10(b)(i) of the Securities Purchase Agreement.

                    “BOARD OF DIRECTORS” means, as to any Person, the board of directors of such Person or any duly authorized committee thereof.

                    “BUSINESS DAY” means any day other than a Saturday, Sunday or any other day on which banking institutions in The City of New York are required or authorized by law or other governmental action to be closed.

                    “BUY-IN PRICE” has the meaning set forth in Section 3.02(f) of the Securities Purchase Agreement.

                    “BUY-IN PRICE” has the meaning set forth in Section 3.02(f) of the Securities Purchase Agreement.

                    “CAPITAL STOCK” means (1) with respect to any Person that is a corporation, any and all shares, interests, participations or other equivalents, however designated, of corporate stock, including each class of common stock and preferred stock of such Person and (2) with respect to any Person that is not a corporation, any and all partnership or other equity interests of such Person.

                    “CLOSING” has the meaning set forth in Section 2.02 of the Securities Purchase Agreement.

                    “CLOSING BID PRICE” shall mean the closing bid price of the Company’s Common Stock on the Principal Market.

                    “CLOSING DATE” has the meaning set forth in Section 2.02 of the Securities Purchase Agreement.

                    “COMMON STOCK” has the meaning set forth in the Preamble of the Securities Purchase Agreement.

                    “COMMISSION” means the Securities and Exchange Commission, or any successor agency thereto with respect to the regulation or registration of securities.

                    “COMPANY” means the party named as such in the Preamble until a successor replaces it pursuant to this Securities Purchase Agreement.

                    “COMPANY COMMISSION FILINGS” has the meaning set forth in Section 3.01(d) of the Securities Purchase Agreement.

                    “EXCHANGE ACT” means the Securities Exchange Act of 1934, as amended, or any successor statute or statutes thereto.

                    “GAAP” is defined to mean generally accepted accounting principles in the United States of America as in effect from time to time, including, without limitation, those set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as approved by a significant segment of the accounting profession.

                    “INTELLECTUAL PROPERTY” has the meaning set forth in Section 3.01(r) of the Securities Purchase Agreement.

                    “KNOWLEDGE OF THE COMPANY” means the actual knowledge of any executive officer of the Company.

2

                    “LIEN” means any lien, mortgage, deed of trust, pledge, security interest, charge or encumbrance of any kind (including any conditional sale or other title retention agreement, any lease in the nature thereof and any agreement to give any security interest).

                    “MATERIAL ADVERSE EFFECT” has the meaning set forth in Section 3.01(b) of the Securities Purchase Agreement.

                    “NOTICE OF ACCEPTANCE” has the meaning set forth in Section 4.10(b)(ii) of the Securities Purchase Agreement.

                    “OFFER” has the meaning set forth in Section 4.10(b)(i) of the Securities Purchase Agreement.

                    “OFFER NOTICE” has the meaning set forth in Section 4.10(b)(i) of the Securities Purchase Agreement.

                    “OFFER PERIOD” has the meaning set forth in Section 4.10(b)(ii) of the Securities Purchase Agreement.

                    “OFFERED SECURITIES” has the meaning set forth in Section 4.10(b)(i) of the Securities Purchase Agreement.

                    “OPINION OF COUNSEL” means a written opinion from legal counsel which counsel may be counsel to or an employee of the Company.

                    “PERSON” means an individual, partnership, corporation, unincorporated organization, trust or joint venture, or a governmental agency or political subdivision thereof.

                    “PRINCIPAL MARKET” means The NASDAQ Capital Market.

                    “PURCHASE PRICE” has the meaning set forth in Section 2.01 of the Securities Purchase Agreement.

                    “PURCHASER” or “PURCHASERS” has the meaning set forth in the Preamble of the Securities Purchase Agreement.

                    “REFUSED SECURITIES” has the meaning set forth in Section 4.10(b)(iii) of the Securities Purchase Agreement.

                    “REGISTRATION RIGHTS AGREEMENT” means that certain Registration Rights Agreement, dated as of October 18, 2007, by and between the Company and the Purchasers, as amended from time to time.

                    “REGISTRATION STATEMENT” has the meaning set forth in Section 3.01(f) of the Securities Purchase Agreement.

                    “REMOVAL DATE” has the meaning set forth in 3.02(f) of the Securities Purchase Agreement.

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                    “RULE 144” has the meaning set forth in Section 3.02(f) of the Securities Purchase Agreement.

                    “SCHEDULE OF PURCHASERS” has the meaning set forth in the Preamble of the Securities Purchase Agreement.

                    “SECURITIES” means the Common Stock and the Warrants to be issued pursuant to the provisions of the Securities Purchase Agreement and the Warrant.

                    “SECURITIES ACT” means the Securities Act of 1933, as amended, or any successor statute or statutes thereto.

                    “SECURITIES PURCHASE AGREEMENT” means this Securities Purchase Agreement, dated as of October 18, 2007, by and between the Company and the Purchasers, as amended from time to time.

                    “SHORT SALES” has the meaning set forth in Section 3.02(d) of the Securities Purchase Agreement.

                    “SUBSIDIARY” with respect to any Person, means (i) any corporation of which the outstanding Capital Stock having at least a majority of the votes entitled to be cast in the election of directors under ordinary circumstances shall at the time be owned, directly or indirectly, by such Person, or (ii) any other Person of which at least a majority of the voting interest under ordinary circumstances is at the time, directly or indirectly, owned by such Person.

                    “TRADING DAY” has the meaning set forth in the Form of Warrant, attached as Exhibit B to the Securities Purchase Agreement.

                    “TRANSACTION DOCUMENTS” means, collectively, this Agreement, the Warrants and the Registration Rights Agreement.

                    “UNDERSUBSCRIPTION AMOUNT” has the meaning set forth in Section 4.10(b)(i) of the Securities Purchase Agreement.

                    “WARRANT EXERCISE PRICE” has the meaning set forth in Section 2.01 of the Securities Purchase Agreement.

                    “WARRANTS” has the meaning set forth in the Preamble of the Securities Purchase Agreement, which such Warrants shall be exercisable six months after the Closing Date and have a term equal to five and one-half (5.5) years.

SECTION 1.02. RULES OF CONSTRUCTION.

                    Unless the context otherwise requires:

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          (1) an accounting term not otherwise defined has the meaning assigned to it in accordance with GAAP;

          (2) “or” is not exclusive;

          (3) words in the singular include the plural, and words in the plural include the singular;

          (4) provisions apply to successive events and transactions; and

          (5) “herein,” “hereof” and other words of similar import refer to this Securities Purchase Agreement as a whole and not to any particular Article, Section or other subdivision.

ARTICLE TWO

THE SECURITIES

SECTION 2.01. PURCHASE AND SALE OF THE SECURITIES.

                    Subject to the terms and conditions of this Securities Purchase Agreement and in reliance on the representations, warranties and covenants of the parties contained herein, the Company shall issue and deliver to each Purchaser, and each Purchaser severally, but not jointly, agrees to purchase from the Company on the Closing Date (as defined below) at a purchase price per unit (representing one share of Common Stock and a Warrant to purchase 0.3 shares of Common Stock) of $0.70 (a) the number of shares of Common Stock as set forth opposite such Purchaser’s name in column (3) on the Schedule of Purchasers and (b) a Warrant to purchase the number of shares of Common Stock set forth opposite such Purchaser’s name in column (4) on the Schedule of Purchasers, such number being thirty percent (30%) of the total number of shares of Common Stock issuable to such Purchaser as described above in this Section 2.01, which warrants shall be exercisable six (6) months after the issuance date hereof and shall have a term of five and one-half (5.5) years from the issuance date hereof, and an exercise price (the “WARRANT EXERCISE PRICE”) equal to the greater of (i) $0.70 or (ii) the Closing Bid Price on the Nasdaq Stock Market on the date immediately preceding the date hereof, for an aggregate purchase price (the “PURCHASE PRICE”) as set forth opposite such Purchaser’s name in column (5) on the Schedule of Purchasers.

SECTION 2.02. CLOSING.

                    The closing of the transactions contemplated by Section 2.01 (the “CLOSING”) shall take place at 3:00 p.m. on the date hereof (the “CLOSING DATE”) at the offices of Merriman Curhan Ford & Co. or at such other place and time as the Company and the Purchasers shall mutually agree.

                    At the Closing, the Company shall deliver to each Purchaser (i) certificates representing the Common Stock and (ii) Warrants, in substantially the form attached as Exhibit B hereto and to be purchased by such Purchaser at the Closing duly registered in the name of such Purchaser. Delivery of such certificates to each Purchaser shall be made against receipt by

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the Company from such Purchaser of the aggregate purchase price set forth opposite such Purchaser’s name in column (5) on the Schedule of Purchasers by wire transfer of immediately available funds to an account designated by the Company in writing for such purpose.

ARTICLE THREE

REPRESENTATIONS AND WARRANTIES

SECTION 3.01. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

                    In order to induce each Purchaser to enter into this Securities Purchase Agreement and purchase the Securities, the Company represents and warrants to each Purchaser as follows:

          (a) Organization, Good Standing and Corporate Power. The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware, with all requisite corporate power and authority to own its properties and to conduct its business as presently conducted. The Company is qualified to do business and is in good standing (or has active status) in each jurisdiction in which the failure to be so qualified could have a Material Adverse Effect (as hereinafter defined). 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. The Company has all requisite corporate power and authority to enter into this Securities Purchase Agreement and to perform its obligations hereunder, including, without limitation, the issuance and sale of the Common Stock and Warrants.

          (b) Due Authorization; Enforceability; No Conflicts. The Company has taken all corporate and stockholder action necessary to authorize the execution, delivery and performance by it of this Securities Purchase Agreement, the Registration Rights Agreement and the Warrant. Assuming the due execution and delivery of this Securities Purchase Agreement and the Registration Rights Agreement by the Purchaser, this Securities Purchase Agreement and the Registration Rights Agreement each constitutes a valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium and other similar laws relating to the enforcement of creditors’ rights generally, the availability of equitable remedies and to general equity principles. The execution, delivery and performance by the Company of this Securities Purchase Agreement and the Registration Rights Agreement and compliance by the Company with the terms hereof and thereof will not (i) violate or result in a violation of the Company’s Certificate of Incorporation or the Company’s Bylaws, or any resolutions of the Company’s Board of Directors or stockholders or (ii) violate or result in a violation of, or constitute a material breach of or constitute a default under, any indenture, deed of trust, mortgage, loan agreement, or other agreement or instrument, judgment, order, law, rule or regulation applicable to the Company or by which the Company is bound or to which any of the Company’s properties are subject, except in the case of clause (ii), where such violation, conflict or event of default would not result in a material adverse effect on the Company’s business, financial condition, results of operations or properties (a

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“MATERIAL ADVERSE EFFECT”). The Common Stock, upon issuance in accordance with the terms of this Securities Purchase Agreement and the issuance of the Warrants and the reservation for issuance and the issuance of the shares of Common Stock issuable upon exercise thereof, as the case may be, are and will continue upon issuance to be duly authorized, validly issued, fully-paid and nonassessable and free of any Liens, claims or encumbrances and rights of first refusal, preemptive rights, co-sale rights, registration rights, or other similar rights. No further approval or authorization of any stockholder, the Board of Directors of the Company or other third party is required for the issuance and sale of the Securities.

          (c) Capitalization. As of the date hereof and prior to giving effect to the issuance of the Securities, the authorized Capital Stock of the Company consists of (i) 5,000,000 shares of preferred stock, par value $.001 per share, of which no shares are issued and outstanding, and (ii) 150,000,000 shares of Common Stock, of which 82,622,584 shares are issued and outstanding. Except with respect to any Securities to be issued in connection with this Securities Purchase Agreement, including the Warrants or as set forth on SCHEDULE 3.01(c) annexed hereto, there are no outstanding subscriptions, rights, options, warrants, conversion rights, agreements or other claims for the purchase or acquisition from the Company of any shares of its Capital Stock or obligating the Company to issue, repurchase, register or otherwise acquire, any shares of its Capital Stock or any securities convertible into, exercisable or exchangeable for, or otherwise entitling the holder to acquire, any shares of Capital Stock of the Company. The outstanding shares of Capital Stock of the Company have been duly and validly issued and are fully paid and nonassessable, have been issued in compliance with all federal and state securities laws, and were not issued in violation of any preemptive rights or similar rights.

          (d) Reports and Financial Statements. The Company has previously furnished the Purchaser with true and complete copies, as amended or supplemented, of the following documents, to the extent not available on the EDGAR system (i) Annual Report on Form 10-K, Amendment No. 1 to the Annual Report and Amendment No. 2 to the Annual Report for the year ended December 31, 2006, as filed with the Commission, (ii) proxy statements relating to all meetings of its shareholders (whether annual or special) since June 1, 2006 and (iii) all other reports or registration statements filed by the Company with the SEC since December 31, 2005 (such reports, registration statements and other filings, together with any amendments or supplements thereto, are collectively referred to as the “COMPANY COMMISSION FILINGS”). Except as set forth on SCHEDULE 3.01(d), the Company Commission Filings constituted all of the documents required to be filed by the Company with the Commission since December 31, 2005. As of their respective dates, such Company’s Commission Filings (as amended or supplemented) 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 did not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. The audited consolidated financial statements and any unaudited interim financial statements of the Company included in such Company’s Commission Filings comply as to form in all

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material respects with applicable accounting requirements and the published rules and regulations of the Commission with respect thereto, and have been prepared in accordance with GAAP (except as may be indicated therein or in the notes thereto and, in the case of the quarterly financial statements, as permitted by Form 10-Q under the Exchange Act) and fairly present in all material respects the financial position of the Company at the dates thereof and the results of its operations and its cash flows for the periods then ended.

          (e) Absence of Certain Changes or Events. Except as publicly disclosed or otherwise disclosed in writing to each Purchaser prior to the date of this Securities Purchase Agreement or as otherwise contemplated by this Securities Purchase Agreement, since March 16, 2007, there has not been any material adverse change or material adverse development in the financial condition, results of operations, or the business or properties of the Company.

          (f) Information in the Registration Statement. None of the information relating to the Company, its executive officers or directors, supplied by the Company for inclusion or incorporation by reference in the registration statement (the “REGISTRATION STATEMENT”) to be filed with the Commission by the Company pursuant to the Registration Rights Agreement to be entered into between the Company and the Purchasers or any amendments or supplements thereto, will, at the time it becomes effective under the Securities Act and at the effective date, contain any untrue statement of material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. If at any time prior to the effective date any event with respect to the Company, its executive officers or directors should occur which is required to be described in an amendment, or a supplement to, the Registration Statement, such event shall be so described and such description in such amendment or supplement of such information will not contain any statement which, at the time and in the light of circumstances under which it is made, is false or misleading with respect to any material fact or omits to state any material fact required to be stated therein or in the Registration Statement or necessary to make the statements therein or in the Registration Statement not false or misleading.

          (g) Compliance With Laws. The conduct of the business of the Company complies in all material respects with all statutes, laws, regulations, ordinances, rules, judgments, orders or decrees applicable thereto. Except as set forth on SCHEDULE 3.01(g) annexed hereto, the Company has not received notice of any alleged material violation of any statute, law, regulation, ordinance, rule, judgment, order or decree from any governmental authority applicable to the Company or any of its assets or properties.

          (h) Consents. Except as set forth on SCHEDULE 3.01(h) annexed hereto, no consent or waiver of, order or approval by, or registration, qualification or filing with, any regulatory body, administrative agency, or other governmental authority or other third party is required in connection with the Company’s execution and delivery of this Securities Purchase Agreement and the Registration Rights Agreement, and the valid

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issuance and sale of the Securities to be sold and issued pursuant to this Securities Purchase Agreement.

          (i) Litigation Proceedings. Except as set forth on SCHEDULE 3.01(i) annexed hereto, there is no action, suit, notice of violation, proceeding or investigation pending or, to the Knowledge of the Company, threatened against or affecting the Company or any of its properties before or by any court, governmental or administrative agency or regulatory authority (federal, state, county, local or foreign) which (i) adversely affects or challenges the legality, validity or enforceability of any of this Securities Purchase Agreement or (ii) could reasonably be expected to, individually or in the aggregate, have a Material Adverse Effect.

          (j) No Default or Violation. Except as set forth on SCHEDULE 3.01(j) annexed hereto, the Company (i) is not in default under or in violation of any indenture, loan or other 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, (ii) is not in violation of any order of any court, arbitrator or governmental body applicable to it, (iii) is not in violation of any statute, rule or regulation of any governmental authority to which it is subject or (iv) is not in default under or in violation of its Certificate of Incorporation, Bylaws or other organizational documents, respectively, except in the case of clause (i), (ii) and (iii), for defaults and violations which individually or in the aggregate would not reasonably be expected to have a Material Adverse Effect. The business of the Company is not being conducted, and shall not be conducted in violation of any law, ordinance, rule or regulation of any governmental entity, except where such violations have not resulted or would not reasonably be expected to result, individually or in the aggregate, in a Material Adverse Effect. The Company is not in breach of any agreement where such breach, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect.

          (k) Private Offering. Neither the Company nor any person acting on its behalf has taken or will take any action which might subject the offering, issuance or sale of the Securities to each Purchaser hereunder to the registration requirements of the Securities Act. The offer, sale and issuance of the Common Stock to the Purchasers will not be integrated with any other offer, sale and issuance of the Company’s securities (past, current, or future) under the Securities Act or any regulations of any exchange or automated quotation system on which any of the securities of the Company are listed or designated or for purposes of any stockholder approval provision applicable to the Company or its securities. Subject to the accuracy and completeness of the representations and warranties of each Purchaser contained in Section 3.02 hereof, the offer, sale and issuance by the Company to each Purchaser of the Securities hereunder is exempt from the registration requirements of the Securities Act.

          (l) Investment Company. The Company is not, and is not controlled by or under common control with an affiliate of an “investment company” within the meaning of the Investment Company Act of 1940, as amended.

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          (m) No General Solicitation. The Company has not solicited any offer to buy or sell the Securities hereunder by means of any form of general solicitation or advertising.

          (n) Listing and Maintenance Requirements Compliance. Except as set forth on SCHEDULE 3.01(n) annexed hereto, the Company has not in the two years preceding the date hereof received written notice from any stock exchange or market on which the Common Stock is or has been listed (or on which it has been quoted) to the effect that the Company is not in compliance with the listing or maintenance requirements of such exchange or market.

          (o) Registration Rights; Rights of Participation. Except as set forth on SCHEDULE 3.01(o) annexed hereto, the Company has not granted or agreed to grant to any person any rights (including “piggy-back” registration rights) to have any securities of the Company registered with the Commission or any other governmental authority which has not been satisfied, and no person, including, but not limited to, current or former stockholders of the Company, underwriters, brokers or agents, has any right of first refusal, preemptive right, right of participation, or any similar right to participate in the transactions contemplated by this Securities Purchase Agreement.

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

          (q) Transactions With Affiliates. None of the executive officers or directors of the Company is presently a party to any transaction with the Company or any of its Subsidiaries (other than for ordinary course services as executive officers or 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 such executive officer or director or, to the Knowledge of the Company, any corporation, partnership, trust or other entity in which any such executive officer or director has a substantial interest or is an officer, director, trustee or partner.

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          (r) Intellectual Property. Except as set forth in on SCHEDULE 3.01(r) annexed hereto, (i) the Company owns or possesses sufficient rights to use all material patents, patent rights, trademarks, copyrights, licenses, inventions, trade secrets, trade names, designs, manufacturing or other processes, systems, data compilation, research results, know-how or other proprietary rights (collectively, “INTELLECTUAL PROPERTY”) that are necessary for the conduct of its business as now conducted as described in the Company’s filings under the Exchange Act except where the failure to currently own or possess such rights would not have a Material Adverse Effect, (ii) the Company has not received any notice of, nor to the Knowledge of the Company is there, any asserted infringement by the Company of, any rights of a third party with respect to any Intellectual Property that, individually or in the aggregate, would have a Material Adverse Effect and (iii) to the Knowledge of the Company, it is not infringing, nor has it received any notice of, infringement by a third party with respect to any Intellectual Property rights of the Company that, individually or in the aggregate, would have a Material Adverse Effect.

                    Except as would not have a Material Adverse Effect, all material licenses or other material agreements under which the Company is granted rights in Intellectual Property, other than Intellectual Property generally available on commercial terms from other sources are in full force and effect and, to the Knowledge of the Company, there is no material default by the Company thereunder.

                    To the Knowledge of the Company, the Company is not making unauthorized use of any confidential information or trade secrets of any person. Except as would not have a Material Adverse Effect, neither the Company nor, to the Knowledge of the Company, any of its employees have any agreements or arrangements with any persons other than the Company related to confidential information or trade secrets of such persons or restricting any such employee’s engagement in business activities of the kind engaged in by the Company.

          (s) Reporting Status. Except as set forth on SCHEDULE 3.01(s), the Company has filed in a timely manner all documents that the Company was required to file under the Exchange Act during the 12 months preceding the date of this Securities Purchase Agreement. Except as set forth on SCHEDULE 3.01(s), the following documents complied in all material respects with the SEC’s requirements as of their respective filing dates, and the information contained therein as of the date thereof did not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading:

                    (1) Annual Report on Form 10-K, Amendment No. 1 to Form 10-K and Amendment No. 2 to Form 10-K for the year ended December 31, 2006;

                    (2) Definitive Proxy Statement for the Annual Meeting held on October 16, 2006;

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                    (3) Quarterly Reports on Form 10-Q for the quarters ended March 31, 2007 and June 30, 2007;

                    (4) Current Reports on Form 8-K, filed subsequent to December 31, 2006; and

                    (5) All other documents, if any, filed by the Company with the SEC during the 12 months preceding the date of this Agreement pursuant to the reporting requirements of the Exchange Act.

          (t) Foreign Corrupt Practices; Sarbanes-Oxley Act.

                    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 corrupt funds for unlawful contributions, gifts, entertainment or other unlawful expenses related to foreign or domestic political activity, 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.

                    The Company is in compliance in all material respects with all provisions of the Sarbanes-Oxley Act of 2002 that are applicable to it.

          (u) Taxes. Except as set forth on SCHEDULE 3.01(u) annexed hereto, the Company 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 to the Knowledge of the Company there is no tax deficiency which has been or might be asserted or threatened against it which would have a Material Adverse Effect.

          (v) Brokers or Finders. Except as on SCHEDULE 3.01(v) annexed hereto, the Company has not dealt with any broker or finder in connection with the transactions contemplated by this Securities Purchase Agreement, and Company has not incurred, and shall not incur, directly or indirectly, any liability for any brokerage or finders’ fees or agents commissions or any similar charges in connection with the transactions contemplated by this Securities Purchase Agreement.

          (w) Subsidiary Rights. The Company or one of its Subsidiaries has the unrestricted right to vote, and (subject to limitations imposed by applicable law) to receive dividends and distributions on, all capital securities of its Subsidiaries as owned by the Company or such Subsidiary.

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

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          (y) U.S. Real Property Holding Corporation. The Company is not, has never been, and so long as any Common Shares remain outstanding, shall not become, a U.S. real property holding corporation within the meaning of Section 897 of the Internal Revenue Code of 1986, as amended, and the Company shall so certify upon Purchaser’s request.

          (z) No Misleading Statements. The representations and warranties of the Company contained in this Securities Purchase Agreement, Exhibits and the Schedules hereto are true and correct in all material respects and do not omit to state any material fact required by such representations and warranties, Exhibits and Schedules that are necessary in order to prevent such representations and warranties, in light of the circumstances, from being misleading. Each press release issued by the Company during the twelve (12) months preceding the date of this Agreement did not at the time of release contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they are made, not misleading. No event or circumstance has occurred or information exists with respect to the Company or any Subsidiary or either of its or their respective business, properties, operations or financial conditions, which, under applicable law, rule or regulation, requires public disclosure or announcement by the Company but which has not been so publicly announced or disclosed (assuming for this purpose that the Company’s reports filed under the Exchange Act of 1934, as amended, are being incorporated into an effective registration statement filed by the Company under the Securities Act). 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 3.02.

          (aa) Leases. Neither the Company nor its Subsidiaries own any real property. Except as on SCHEDULE 3.01(aa), any real property and facilities held under lease by the Company or any of its Subsidiaries are held by them under valid, subsisting and enforceable leases with such exceptions as are not material and do not interfere with the use made and proposed to be made of such property and buildings by the Company and its Subsidiaries.

          (bb) Disclosure Controls and Procedures, Internal Controls. The Company and each of its Subsidiaries maintain a system of internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management’s general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles and to maintain asset and liability accountability, (iii) access to assets or incurrence of liabilities is permitted only in accordance with management’s general or specific authorization and (iv) the recorded accountability for assets and liabilities is compared with the existing assets and liabilities at reasonable intervals and appropriate action is taken with respect to any difference. The Company maintains disclosure controls and procedures (as such term is defined in Rule 13a-15 under the 1934 Act) that are effective in ensuring that information required to be disclosed by the Company in the reports that it files or submits under the 1934 Act is recorded, processed, summarized and reported, within the time periods specified in the

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rules and forms of the SEC, including, without limitation, controls and procedures designed in to ensure that information required to be disclosed by the Company in the reports that it files or submits under the 1934 Act is accumulated and communicated to the Company’s management, including its principal executive officer or officers and its principal financial officer or officers, as appropriate, to allow timely decisions regarding required disclosure. During the twelve months prior to the date hereof neither the Company nor any of its Subsidiaries has received any written notice or written correspondence from the Company’s independent registered public accounting firm relating to any material weakness in any part of the system of internal accounting controls of the Company or any of its Subsidiaries.

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

SECTION 3.02. REPRESENTATIONS AND WARRANTIES OF EACH PURCHASER.

                    In order to induce the Company to enter into this Securities Purchase Agreement and issue the Securities, each Purchaser represents and warrants to the Company, only with respect to itself, as follows:

          (a) Organization, Good Standing and Corporate Power. Such Purchaser is an entity duly formed, validly existing and in good standing under the laws of the State of its organization, with all requisite corporate power and authority to own its properties, conduct its business, enter into this Securities Purchase Agreement and perform its obligations hereunder.

          (b) Due Authorization; Enforceability; No Conflicts. Such Purchaser has taken all action necessary to authorize the execution, delivery and performance by it of this Securities Purchase Agreement. Assuming the due execution and delivery of this Securities Purchase Agreement by the Company, this Securities Purchase Agreement constitutes a valid and binding obligation of such Purchaser, enforceable against such Purchaser in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium and other similar laws relating to the enforcement of creditors’ rights generally, the availability of equitable remedies and general equity principles. The execution, delivery and performance by such Purchaser of this Securities Purchase Agreement and compliance by such Purchaser with the terms hereof will not violate, conflict with or cause an event of default under such Purchaser’s organizational documents or any other agreement, instrument, judgment, order, law, rule or regulation by which such Purchaser is bound or to which any properties of such Purchaser are subject, except where such violation, conflict or event of default would not result in a

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material adverse effect on such Purchaser’s business, financial condition, results of operations or properties.

          (c) Accredited Investor. Such Purchaser is an “accredited investor” as that term is defined in Rule 501(a) under the Securities Act and such Purchaser is also knowledgeable, sophisticated and experienced in making, and is qualified to make decisions with respect to investments in shares presenting an investment decision like that involved in the purchase of the Securities.

          (d) Investment. Such Purchaser is acquiring the Securities in the ordinary course of its business and for investment for its own account and not with a present view to, or for resale in connection with, any distribution thereof. Such Purchaser understands that the Securities have not been registered under the Securities Act or applicable state securities laws by reason of certain exemptions from the registration provisions thereof that depend upon, among other things, the truth and accuracy of such Purchaser’s representations and warranties herein. Such Purchaser acknowledges that until the earlier to occur of (x) ninety days (90) from the Closing Date and (y) the date the Registration Statement (as defined in the Registration Rights Agreement) is declared effective, such Purchaser shall not engage in any Short Sales of the Company’s common stock, will not use any of the Securities acquired in connection with the transactions contemplated hereby to cover any short position in the Common Stock of the Company in violation of applicable securities laws and will not sell any of the Securities acquired in connection with the transactions contemplated hereby. For purposes hereof, “Short Sales” shall mean “short sales” as defined in Regulation SHO adopted by the Commission under the 1934 Act and all types of direct and indirect stock pledges or similar arrangements having the effect of hedging the securities or investment made hereunder.

          (e) Restricted Transferability. Such Purchaser acknowledges that the Securities are being offered and sold hereunder in a private placement that is exempt from the registration requirements of the Securities Act and that certificates or other instruments for the Securities will bear the legend set forth in Section 3.02(f) below.

          (f) Legends. The Purchaser understands that the certificates or other instruments representing the Securities, except as set forth below, shall bear any legend as required by the “blue sky” laws of any state and a restrictive legend in substantially the following form (and a stop-transfer order may be placed against transfer of such stock certificates):

[NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE HAVE BEEN] [THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN] REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE

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SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND APPLICABLE STATE SECURITIES LAWS, OR (B) AN OPINION OF COUNSEL ADDRESSED TO THE COMPANY, IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR APPLICABLE STATE SECURITIES LAWS. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.

The legend set forth above shall be removed and the Company shall issue a certificate without such legend to the holder of the Securities upon which it is stamped, if, unless otherwise required by state securities laws, (i) such Securities are registered for sale under the Securities Act, (ii) in connection with a sale, assignment or other transfer, such holder provides the Company with an opinion of counsel, in a generally acceptable form, to the effect that such sale, assignment or transfer of the Securities may be made without registration under the Securities Act, or (iii) such holder provides the Company with reasonable assurance that the Securities can be sold, assigned or transferred pursuant to Rule 144 promulgated under the Securities Act (or a successor rule thereto) (collectively, “RULE 144”). If the Company shall fail for any reason or for no reason to issue to the holder of the Common Shares within three (3) Trading Days after the occurrence of any of (i) through (iii) above (the date of such occurrence, the “REMOVAL DATE”), a certificate without such legend to the holder or to issue such Common Shares to such holder by electronic delivery at the applicable balance account at DTC, and if on or after such Trading Day the holder purchases (in an open market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale by the holder of such Common Shares that the holder anticipated receiving without legend from the Company (a “BUY-IN”), then the Company shall, within three (3) Business Days after the holder’s request and in the holder’s discretion, either (i) pay cash to the holder in an amount equal to the holder’s total purchase price (including brokerage commissions, if any) for the shares of Common Stock so purchased (the “BUY-IN PRICE”), at which point the Company’s obligation to deliver such unlegended Common Shares shall terminate, or (ii) promptly honor its obligation to deliver to the holder such unlegended Common Shares as provided above and pay cash to the holder in an amount equal to the excess (if any) of the Buy-In Price over the product of (A) such number of shares of Common Stock, times (B) the Weighted Average Price on the Removal Date.

          (g) The Purchaser understands that except as provided in the Registration Rights Agreement: (i) the Securities have not been and are not being registered under the Securities Act or any state securities laws, and may not be offered for sale, sold, assigned or transferred unless (A) subsequently registered thereunder, or (B) the Purchaser shall have delivered to the Company an opinion of counsel, in a generally acceptable form, to the effect that such Securities to be sold, assigned or transferred may be sold, assigned or transferred pursuant to an exemption from such registration, (ii) any sale of the Securities made in reliance on Rule 144 may be made in accordance with the terms of Rule 144 and further, if Rule 144 is not applicable, any resale of the Securities under circumstances in which the seller or Person through whom the sale is made may be deemed to be an

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underwriter (as that term is defined in the Securities Act) may require compliance with some other exemption under the Securities Act or the rules and regulations of the Commission thereunder; and (iii) neither the Company nor any other Person is under any obligation to register the Securities under the Securities Act or any state securities laws or to comply with the terms and conditions of any exemption thereunder.

ARTICLE FOUR

COVENANTS

SECTION 4.01. PAYMENT OF TAXES AND OTHER CLAIMS.

                    The Company will pay or discharge or cause to be paid or discharged, before the same shall become delinquent, (a) all material taxes, assessments and governmental charges levied or imposed upon it or any of its Subsidiaries or upon the income, profits or property of it or any of its Subsidiaries and (b) all lawful claims for labor, materials and supplies which, in each case, if unpaid, would reasonably be expected, by law, to become a material liability or Lien upon the property of it or any of its Subsidiaries; provided, however, that the Company shall not be required to pay or discharge or cause to be paid or discharged any such tax, assessment, charge or claim the amount, applicability or validity of which is being contested in good faith by appropriate proceedings and for which adequate provision has been made or for which adequate reserves, to the extent required under GAAP, have been taken.

SECTION 4.02. MAINTENANCE OF PROPERTIES AND INSURANCE.

                    (a) The Company shall cause all material properties owned by or leased by it or any of its Subsidiaries used or useful to the conduct of its business or the business of any of its Subsidiaries to be maintained and kept in normal condition, repair and working order and supplied with all necessary equipment and shall cause to be made all necessary repairs, renewals and replacements thereof, all as in its judgment may be reasonably necessary, so that the business carried on in connection therewith may be properly conducted at all times; provided, however, that nothing in this Section 4.02 shall prevent the Company or any of its Subsidiaries from discontinuing the use, operation or maintenance of any of such properties, or disposing of any of them, if such properties are, in the reasonable and good faith judgment of the Board of Directors of the Company or such Subsidiary, as the case may be, no longer reasonably necessary in the conduct of their respective businesses or such disposition is otherwise permitted by this Securities Purchase Agreement.

                    (b) The Company shall provide or cause to be provided, for itself and each of its Subsidiaries, insurance (including appropriate self-insurance) against loss or damage of the kinds that, in the reasonable, good faith judgment of the Board of Directors of the Company, are adequate and appropriate for the conduct of the business of the Company and such Subsidiaries in a prudent manner, with reputable insurers or with the government of the United States of America or an agency or instrumentality thereof, in such amounts, with such deductibles and by such methods as shall be customary, in the good faith judgment of the Board of Directors of the Company, for companies similarly situated in the industry.

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SECTION 4.03. COMPLIANCE WITH LAWS.

                    The Company will comply, and will cause each of its Subsidiaries to comply, with all applicable statutes, rules, regulations, orders and restrictions of the United States, all states and municipalities thereof, and of any governmental department, commission, board, regulatory authority, bureau, agency and instrumentality of the foregoing, in respect of the conduct of their respective businesses and the ownership of their respective properties, except for such noncompliances as are being contested in good faith and by appropriate proceedings and except for such noncompliances as would not in the aggregate reasonably be expected to have a Material Adverse Effect.

SECTION 4.04. COMMISSION REPORTS.

                    (a) The Company will deliver to each Purchaser promptly, but in any event no later than 5 Business Days after it files with the Commission, to the extent not available on the EDGAR system, copies of the quarterly and annual reports and of the information, documents and other reports, if any, which the Company is required to file with the Commission pursuant to Section 13 or 15(d) of the Exchange Act.

                    (b) In the event the Company is not required to furnish such reports to its stockholders pursuant to the Exchange Act, the Company (at its own expense) shall cause its consolidated financial statements, comparable to those which would have been required to appear in annual or quarterly reports, to be delivered to each Purchaser.

SECTION 4.05. SECURITIES MATTERS.

          (a) The Company shall file all periodic reports required to be filed with the Commission pursuant to the Exchange Act in a timely manner and shall not terminate its status as an issuer required to file periodic reports under the Exchange Act.

          (b) The Company shall promptly secure the listing of all Registrable Securities (as defined in the Registration Rights Agreement) upon each national securities exchange and automated quotation system, if any, upon which shares of Common Stock are listed (subject to official notice of issuance) and shall maintain such listing. The Company shall maintain the Common Stock’s authorization for quotation on the The NASDAQ Capital Market, or obtain a listing on The NASDAQ Global Market, The NASDAQ Global Select Market, The New York Stock Exchange or the American Stock Exchange.

          (c) The Company shall timely file a Form D with respect to the Securities as required under Regulation D and provide a copy thereof to the Purchaser promptly after such filing. The Company shall, on or before the date of the Closing, take such actions as shall be reasonably necessary in order to obtain an exemption for or to qualify the Securities for sale to the Purchaser pursuant to this Securities Purchase Agreement under applicable securities or “blue sky” laws of the states of the United States (or to obtain an exemption from such qualification) and shall provide evidence of any such action so taken to the Purchaser on or prior to the date of the Closing. The Company shall make all

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filings and reports relating to the offer and sale of the Securities required under applicable securities or “blue sky” laws of the states of the United States following the date of the Closing.

          (d) The Company agrees that, in connection with the issuance and sale of Securities pursuant to this Securities Purchase Agreement, it will not issue Common Stock (excluding the Common Stock underlying the Warrants) representing more than 19.99% of its outstanding capital stock.

SECTION 4.06. USE OF PROCEEDS.

                    The Company will use (i) $5.3 million of the proceeds from the sale of the Securities to fund a strategic acquisition and (ii) the remainder of the proceeds from the sale of the Securities to expand its overseas operations and for general corporate purposes.

SECTION 4.07. FEES

                    The Company shall be responsible for the payment of any placement agent’s fees or commissions, financial advisory fees, or broker’s commissions (other than for Persons engaged by any Purchaser) relating to or arising out of the transactions contemplated hereby. The Company shall pay, and hold each Purchaser harmless against, any liability, loss or expense (including, without limitation, reasonable attorney’s fees and out-of-pocket expenses) arising in connection with any claim relating to any such payment.

SECTION 4.08. ISSUANCES BELOW PURCHASE PRICE.

                    For a period of six months following the date hereof, the Company shall not, without the prior written consent of the each of the Purchasers, issue or sell any shares of the Company’s capital stock or other securities exercisable for, convertible into or otherwise giving the holder thereof the right to acquire the Company’s capital stock at a price per share, including the exercise or conversion price per share, which is below $0.70 per share; provided, however, that this restriction shall not apply to any capital stock issued pursuant to: (i) employee benefit plans set forth on SCHEDULE 3.01(c) annexed hereto, (ii) outstanding warrants, options or other securities set forth on SCHEDULE 3.01(c) annexed hereto or the Company filings under the Exchange Act or (iii) a merger or acquisition or strategic transaction or partnership; provided that such strategic transaction or partnership does not include a capital raise by the Company below $0.70 per share.

SECTION 4.09 DISCLOSURE OF TRANSACTIONS.

          On or before 5:30 p.m., New York City time, on the fourth Business Day following the date of this Agreement, the Company shall issue a press release and file a Current Report on Form 8-K describing the terms of the transactions contemplated by the Transaction Documents in the form required by the 1934 Act and attaching the material Transaction Documents (including, without limitation, this Agreement (and all schedules to this Agreement), the form of Warrant and the form of Registration Rights Agreement) as exhibits to such filing (including all attachments, the “8-K FILING”). From and after the filing of an 8-K with respect to the Company’s third quarter earnings with the SEC, which shall be filed no later than December 31,

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2007, no Purchaser shall be in possession of any material, nonpublic information received from the Company, any of its Subsidiaries or any of its respective officers, directors, employees or agents, that is not disclosed in the 8-K Filing or the 8-K filed with respect to the Company’s third quarter earnings. The Company shall not, and shall cause each of its Subsidiaries and its and each of their respective officers, directors, employees and agents, not to, provide any Purchaser with any material, nonpublic information regarding the Company or any of its Subsidiaries from and after the filing of the 8-K with respect to the Company’s third quarter earnings with the SEC without the express written consent of such Purchaser. Without the prior written consent of any applicable Purchaser, neither the Company nor any of its Subsidiaries or affiliates shall disclose the name of such Purchaser in any filing, announcement, release or otherwise, except as may be required by law, rule, regulation, court order or similar action.

SECTION 4.10 ADDITIONAL ISSUANCES OF SECURITIES.

                    (a) For purposes of this Section 4.10, the following definitions shall apply.

                              (i) “APPROVED STOCK PLAN” means any contract, plan or arrangement which has been approved by the Board of Directors of the Company, pursuant to which the Company’s securities may be issued to any employee, officer, director or consultant for services provided to the Company.

                              (ii) “COMMON STOCK EQUIVALENTS” means, collectively, Options and Convertible Securities.

                              (iii) “CONVERTIBLE SECURITIES” means any stock or securities (other than Options) convertible into or exercisable or exchangeable for Common Shares.

                              (iv) “EXCLUDED SECURITIES” means any shares of Common Stock or Common Stock Equivalents issued or issuable: (i) in connection with any Approved Stock Plan (ii) upon exercise of the Warrants, (iii) upon conversion of any Options or Convertible Securities which are outstanding on the day immediately preceding the Closing Date, provided that the terms of such Options or Convertible Securities are not amended, modified or changed on or after the Closing Date, (iii) in connection with any strategic acquisition or strategic transaction by the Company, whether through an acquisition of stock or assets or a merger of any business, assets or technologies the primary purpose of which is not to raise equity capital, and (iv) pursuant to a bona fide firm commitment underwritten public offering with a nationally recognized underwriter (excluding any equity line).

                              (v) “OPTIONS” means any rights, warrants or options to subscribe for or purchase Common Stock or Convertible Securities.

                              (vi) “SUBSEQUENT PLACEMENT” the direct or indirect, offer, sale, grant of any option to purchase, or otherwise dispose of (or announce any offer, sale, grant or any option to purchase or other disposition of) any of the Company’s or its Subsidiaries’ equity or equity equivalent securities, including without limitation any debt, preferred stock or other instrument or security that is, at any time during its life and under any circumstances, convertible into or exchangeable or exercisable for shares of Common Stock or Common Stock Equivalents.

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                    (b) From the Closing Date until the two (2) year anniversary thereof and for so long as a Purchaser holds 50% of the number of shares of Common Stock originally purchased by such Purchaser pursuant hereto, the Company will not, directly or indirectly, effect any Subsequent Placement unless the Company shall have first complied with this
Section 4.10(b).

                              (i) The Company shall deliver to each Purchaser a written notice, which may be revoked by the Company at any time prior to the execution of definitive documentation relating to a Subsequent Placement (the “OFFER NOTICE”), of any proposed or intended issuance or sale or exchange (the “OFFER”) of the securities being offered (the “OFFERED SECURITIES”) in a Subsequent Placement, which Offer Notice shall (w) identify and describe the Offered Securities, (x) describe the price and other terms upon which they are to be issued, sold or exchanged, and the number or amount of the Offered Securities to be issued, sold or exchanged, (y) identify the persons or entities (if known) to which or with which the Offered Securities are to be offered, issued, sold or exchanged and (z) offer to issue and sell to or exchange with such Purchaser (A) such number of Offered Securities equal to the product of (1) seven-tenths (0.70) multiplied by (2) such Purchaser’s pro rata portion of Common Shares purchased hereunder multiplied by (3) the number or amount of securities to be sold in the contemplated Subsequent Placement (the “BASIC AMOUNT”), and (B) with respect to each Purchaser that elects to purchase its Basic Amount, any additional portion of the Offered Securities attributable to the Basic Amounts of other Purchasers as such Purchaser shall indicate it will purchase or acquire should the other Purchasers subscribe for less than their Basic Amounts (the “UNDERSUBSCRIPTION AMOUNT”), which process shall be repeated until the Purchasers shall have an opportunity to subscribe for any remaining Undersubscription Amount; provided that in no event shall any Purchaser purchase any Offered Securities if such Purchaser’s beneficial ownership interest (together with such Purchaser’s affiliates) would immediately following such purchase of Offered Securities, equal or exceed 15% of the then outstanding shares of Common Stock.

                              (ii) To accept an Offer, in whole or in part, such Purchaser must deliver a written notice to the Company prior to the end of the seventh (7^th) Business Day after such Purchaser’s receipt of the Offer Notice (the “OFFER PERIOD”), setting forth the portion of such Purchaser’s Basic Amount that such Purchaser elects to purchase and, if such Purchaser shall elect to purchase all of its Basic Amount, the Undersubscription Amount, if any, that such Purchaser elects to purchase (in either case, the “NOTICE OF ACCEPTANCE”). If the Basic Amounts subscribed for by all Purchasers are less than the total of all of the Basic Amounts, then each Purchaser who has set forth an Undersubscription Amount in its Notice of Acceptance shall be entitled to purchase, in addition to the Basic Amounts subscribed for, the Undersubscription Amount it has subscribed for; provided, however, that if the Undersubscription Amounts subscribed for exceed the difference between the total of all the Basic Amounts and the Basic Amounts subscribed for (the “AVAILABLE UNDERSUBSCRIPTION AMOUNT”), each Purchaser who has subscribed for any Undersubscription Amount shall be entitled to purchase only that portion of the Available Undersubscription Amount as the Basic Amount of such Purchaser bears to the total Basic Amounts of all Purchasers that have subscribed for Undersubscription Amounts, subject to rounding by the Company to the extent its deems reasonably necessary.

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                              (iii) The Company shall have twenty (20) Business Days from the expiration of the Offer Period above to offer, issue, sell or exchange all or any part of such Offered Securities as to which a Notice of Acceptance has not been given by the eligible Purchasers (the “REFUSED SECURITIES”), but only upon terms and conditions (including, without limitation, unit prices and interest rates) that are not more favorable to the acquiring person or persons than those set forth in the Offer Notice.

                              (iv) In the event the Company shall propose to sell less than all the Refused Securities (any such sale to be in the manner and on the terms specified in Section 4.10(b)(iii) above), then each Purchaser may, at its sole option and in its sole discretion, reduce the number or amount of the Offered Securities specified in its Notice of Acceptance to an amount that shall be not less than the number or amount of the Offered Securities that such Purchaser elected to purchase pursuant to Section 4.10(b)(ii) above multiplied by a fraction, (i) the numerator of which shall be the number or amount of Offered Securities the Company actually proposes to issue, sell or exchange (including Offered Securities to be issued or sold to Purchasers pursuant to Section 4.10(b)(iii) above prior to such reduction) and (ii) the denominator of which shall be the original amount of the Offered Securities. In the event that any Purchaser so elects to reduce the number or amount of Offered Securities specified in its Notice of Acceptance, the Company may not issue, sell or exchange more than the reduced number or amount of the Offered Securities unless and until such securities have again been offered to the Purchasers in accordance with Section 4.10(b)(i) above.

                              (v) Upon the closing of the issuance, sale or exchange of all or less than all of the Refused Securities, the Purchasers shall acquire from the Company, and the Company shall issue to the Purchasers, the number or amount of Offered Securities specified in the Notices of Acceptance, as reduced pursuant to Section 4.10(b)(iv) above if the Purchasers have so elected, upon the terms and conditions specified in the Offer. The purchase by the Purchasers of, and the obligations of the Company to sell, any Offered Securities is subject in all cases to the preparation, execution and delivery by the Company and the Purchasers of a purchase agreement relating to such Offered Securities satisfactory in all respects to the Company and such Purchasers.

                              (vi) Any Offered Securities not acquired by the Purchasers or other persons in accordance with Sections 4.10(b)(iii) or 4.10(b)(v) above may not be issued, sold or exchanged until they are again offered to the Purchasers under the procedures specified in this Agreement.

          (c) The restrictions contained in subsection (b) of this Section 4.10 shall not apply in connection with the issuance of any Excluded Securities.

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ARTICLE FIVE

CONDITIONS

SECTION 5.01. CONDITIONS TO THE COMPANY’S OBLIGATION.

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

          (a) Such Purchaser shall have delivered to the Company the Registration Rights Agreement duly executed by such Purchaser.

          (b) Such Purchaser and each other Purchaser shall have delivered to the Company the Purchase Price for the Securities, by wire transfer of immediately available funds pursuant to the wire instructions provided by the Company.

          (c) The representations and warranties of each Purchaser contained in Section 3.02 of this Securities Purchase Agreement shall be true and correct in all material respects (other than representations and warranties that are qualified by materiality or Material Adverse Effect which shall be true and correct in all respects), in each case as of the Closing Date as though made at and as of such date, except to the extent that they expressly refer to an earlier or specific time, in which case they shall be true and correct in all material respects as of such time.

          (d) Each Purchaser shall have performed and complied with, in all material respects, the agreements, covenants and obligations required by this Securities Purchase Agreement to be so performed or complied with by such Purchaser at or before the Closing.

SECTION 5.02. CONDITIONS TO THE PURCHASER’S OBLIGATION.

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

          (a) Such Purchaser shall have received the Registration Rights Agreement and the Warrant duly executed by the Company.

          (b) Such Purchaser shall have received certificates for shares of Common Stock to be purchased by it at the Closing.

          (c) Such Purchaser shall have received an Opinion of Counsel from the Company in substantially the form of Exhibit C attached hereto.

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          (d) Such Purchaser shall have received a certified copy of the Certificate of Incorporation of the Company, together with a Good Standing Certificate with respect to the Company issued by the Secretary of State of such state of incorporation as of a date within ten (10) days of the date of the Closing.

          (e) Such Purchaser shall have received a copy of the certificate evidencing the Company’s qualification as a foreign corporation in good standing issued by the Secretary of State of the State of New York as of a date within ten (10) days of the date of the Closing.

          (f) Such Purchaser shall have received a certificate executed by the Secretary of the Company and dated as of the date of the Closing, certifying as to (i) the resolutions as adopted by the Company’s Board of Directors in connection with the authorization of the transactions contemplated hereby, (ii) the Certificate of Incorporation of the Company and (iii) the Bylaws of the Company, each as in effect at the time of the Closing Date.

          (g) Such Purchaser shall have received a copy of all governmental, regulatory or third party consents and approvals, if any, necessary for the sale of the Securities.

          (h) Such Purchaser shall have received a copy of such other documents relating to the transactions contemplated by this Securities Purchase Agreement, the Registration Rights Agreement and the Warrant as the Purchaser or its counsel may reasonably request.

          (i) The representations and warranties of the Company contained in Section 3.01 of this Securities Purchase Agreement shall be true and correct in all material respects, in each case as of the Closing Date as though made at and as of such date, except to the extent that they expressly refer to an earlier or specific time, in which case they shall be true and correct in all material respects as of such time.

          (j) The Company shall have performed and complied with, in all material respects, the agreements, covenants and obligations required by this Securities Purchase Agreement to be so performed or complied with by the Company at or before the Closing.

ARTICLE SIX

MISCELLANEOUS

SECTION 6.01. NOTICES.

                    Any notices or other communications required or permitted hereunder shall be in writing, and shall be sufficiently given if made by hand delivery, by verifiable facsimile transmission or by reputable overnight delivery service, addressed as follows:

                    if to the Company:

                              Viewpoint Corporation

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498 Seventh Avenue, Suite 1810
New York, New York 10018
Facsimile: (212) 201-0846
Attention: General Counsel

                    with a copy to:

Milbank, Tweed, Hadley & McCloy LLP
1 Chase Manhattan Plaza
New York, New York 10005
Facsimile: (212) 822-5171
Attention: Alexander M. Kaye, Esq.

                    If to a Purchaser, to its address and facsimile number set forth on the Schedule of Purchasers, with copies to such Purchaser’s representatives as set forth on the Schedule of Purchasers.

                    with a copy (for informational purposes only) to:

Schulte Roth & Zabel LLP
919 Third Avenue
New York, NY 10022
Telephone: (212) 756-2000
Facsimile: (212) 593-5955
Attention: Eleazer N. Klein, Esq.

                    The Company and each Purchaser by written notice to each other may designate additional or different addresses for notices to such Person. Any notice or communication to a party shall be deemed to have been given or made as of the date so delivered if personally delivered; when received if by facsimile transmission or electronic mail; and one (1) business day after mailing by reputable overnight courier (except that, notwithstanding the foregoing, a notice of change of address shall not be deemed to have been given until actually received by the addressee).

SECTION 6.02. GOVERNING LAW.

                    THIS SECURITIES PURCHASE AGREEMENT WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS. THE PARTIES HERETO AGREE TO SUBMIT TO THE JURISDICTION OF THE FEDERAL OR STATE COURTS LOCATED IN THE CITY OF NEW YORK IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS SECURITIES PURCHASE AGREEMENT.

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SECTION 6.03. SUCCESSORS.

                    All agreements of the Company in this Securities Purchase Agreement shall bind its successors.

SECTION 6.04. COUNTERPARTS.

                    The parties may sign any number of copies of this Securities Purchase Agreement. Each signed copy or counterpart shall be an original, but all of them together shall represent the same agreement. Delivery by facsimile of an executed counterpart of any signature page to this Securities Purchase Agreement to be executed hereunder shall have the same effectiveness as delivery of a manually executed counterpart thereof.

SECTION 6.05. SEVERABILITY.

                    In case any one or more of the provisions in this Securities Purchase Agreement shall be held invalid, illegal or unenforceable, in any respect for any reason, the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions shall not in any way be affected or impaired thereby, it being intended that all of the provisions hereof shall be enforceable to the full extent permitted by law.

SECTION 6.06. INDEPENDENT NATURE OF PURCHASER’S OBLIGATIONS AND RIGHTS.

                    The obligations of each Purchaser hereunder are several and not joint with the obligations of the other Purchasers hereunder, and no Purchaser shall be responsible in any way for the performance of the obligations of any other Purchaser hereunder. Nothing contained herein or in any other agreement or document delivered at any Closing, and no action taken by any Purchaser pursuant hereto or thereto, shall be deemed to constitute the Purchasers as a partnership, an association, a joint venture or any other kind of entity, or a “group” as described in Section 13(d) of the Exchange Act, or create a presumption that the Purchasers are in any way acting in concert with respect to such obligations or the transactions contemplated by this Securities Purchase Agreement. Each Purchaser has been represented by its own separate counsel in connection with the transactions contemplated hereby, shall be entitled to protect and enforce its rights, including without limitation rights arising out of this Securities Purchase Agreement or the other transaction documents, individually, and shall not be required to join any other Purchaser as an additional party in any proceeding for such purpose.

[SIGNATURE PAGES TO FOLLOW]

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SIGNATURES

                    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.

THE COMPANY:
VIEWPOINT CORPORATION
By:	/s/ Christopher C. Duignan
	Name: Christopher C. Duignan
	Title: CFO

SIGNATURES

          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:
Signature of Authorized Signatory of Purchaser:
Name of Authorized Signatory:
Title of Authorized Signatory:
Email Address of Purchaser:

Address for Notice of Purchaser:

Address for Delivery of Securities for Purchaser (if not same as above):

Subscription Amount:
Shares of Common Stock:
Warrants:
EIN/Social Security Number:

Exhibit A

Schedule of Purchasers

Exhibit B

Form of Warrant

Filed as Exhibit 10.3 to this Form 8-K

Exhibit C

Opinion of Counsel

October 18, 2007

The Investors Listed on the Schedule
of Purchasers Attached to the Securities
Purchase Agreement

Dear Sirs:

          I am General Counsel of Viewpoint Corporation, a Delaware corporation (the “Company”), and I am delivering this opinion letter in connection with the Securities Purchase Agreement, dated as of October 18, 2007 (the “Purchase Agreement”), by and between the Company and the investors listed on the Schedule of Purchasers attached thereto (individually, the “Purchaser” and collectively, the “Purchasers”). Capitalized terms used but not otherwise defined herein shall have the respective meanings given to such terms in the Purchase Agreement. This opinion letter is delivered to you pursuant to Section 5.02(c) of the Purchase Agreement.

          In rendering the opinions expressed below, I have examined the following agreements, instruments and other documents:

(a)	the Securities Purchase Agreement;
(b)	the Registration Rights Agreement;
(c)	the Common Stock to be issued on the date hereof;
(d)	the Warrants; and
(e)	such records of the Company and such other documents as I have deemed necessary as a basis for the opinions expressed below.

          In my examination, I have assumed the genuineness of all signatures (other than signatures on behalf of the Company), the legal capacity of all natural persons, the authenticity of all documents submitted to me as originals and the conformity with authentic original documents of all documents submitted to me as copies. When relevant facts were not independently established, I have relied upon representations and warranties made in or pursuant to the Purchase Agreement, Registration Rights Agreement and the Warrants and certificates of governmental officials.

          In rendering the opinions expressed below, I have assumed (except as to the Company), with respect to all of the documents referred to in this opinion letter, that:

(i)	such documents (x) have been duly authorized by, (y) have been duly executed and delivered by, and (z) constitute legal, valid, binding and enforceable obligations of, all of the parties to such documents;
(ii)	all signatories to such documents have been duly authorized;
(iii)	all of the parties to such documents are duly organized and validly existing; and
(iv)	all of the parties have the power and authority (corporate, partnership or other) to execute, deliver and perform such documents.

          Based upon and subject to the foregoing and subject also to the comments and qualifications set forth below, and having considered such questions of law as I have deemed necessary as a basis for the opinions expressed below, I am of the opinion that:

          1. The Company is a corporation validly existing and in good standing under the laws of the State of Delaware. The Company has the requisite corporate power to own, lease and operate its properties and to conduct its business as presently conducted. The Company is duly qualified as a foreign corporation to do business in the State of New York. Each of the Company’s Subsidiaries is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation and has the requisite corporate power to own, lease and operate its properties and to conduct its business as presently conducted, except, with respect to all of the foregoing, as would not be reasonably expected to have a Material Adverse Effect.

          2. The Company has the requisite corporate power and authority to execute, deliver and perform its obligations under the Purchase Agreement, the Registration Rights Agreement and the Warrants including, without limitation, the issuance of the Common Stock in accordance with the terms thereof.

          3. The execution and delivery by the Company of the Purchase Agreement, the Registration Rights Agreement and the Warrants and the performance by it of its obligations thereunder have been duly authorized by all necessary corporate action on its part and do not violate (i) its certificate of incorporation and by-laws or (ii) any applicable Federal law, rule or regulation of the United States or the State of New York.

          4. When issued in accordance with the terms of the Purchase Agreement, the Common Stock will (i) be free of any liens created by the Company and (ii) be validly issued.

          5. Subject to the accuracy as to factual matters of the Purchaser’s representations in Section 3.02 of the Purchase Agreement, the offer and sale of the Common Stock in the manner contemplated by the Purchase Agreement do not require registration under the 1933 Act.

          6. No consent or authorization of, filing with, notice to or registration with, any federal or New York State court, or any third party is required to be obtained by the Company (i) to enter into and perform its obligations under the Purchase Agreement, the Registration Rights Agreement or the Warrants or (ii) for the issuance and sale of the Common Stock as contemplated thereby, except for the listing of shares of Common Stock on the NASDAQ

National Market and the filing of the Registration Statement with the Commission and a Form D with the Commission.

          7. The Purchase Agreement, the Registration Rights Agreement and the Warrants have been duly executed and delivered on behalf of the Company, and constitute a valid and binding obligation of the Company enforceable against the Company in accordance with its respective terms, except as may be limited by bankruptcy, insolvency, liquidation, reorganization, moratorium, fraudulent conveyance or transfer or other similar laws relating to or affecting the rights of creditors generally and except as the enforceability thereof is subject to the application of general principles of equity (regardless of whether considered in a proceeding in equity or at law), including, without limitation, (a) the possible unavailability of specific performance, injunctive relief or any other equitable remedy and (b) concepts of materiality, reasonableness, good faith and fair dealing.

          8. Except as disclosed in the Purchase Agreement, no action, suit, proceeding or investigation before or by any court, public board or body or any governmental agency or self-regulatory organization is pending or, to my knowledge, threatened against the Company or any of the properties or assets of the Company which (i) adversely affects or challenges the legality, validity or enforceability of the Purchase Agreement and (ii) could reasonably be expected to, individually or in the aggregate, have a Material Adverse Effect.

          9. The execution, delivery and performance by the Company of the Purchase Agreement, the Registration Rights Agreement and the Warrants, the consummation by the Company of the transactions contemplated thereby and the compliance by the Company with the terms thereof do not violate, conflict with or constitute a default (or an event which, with the giving of notice or lapse of time or both, constitutes or would constitute a default) under, give rise to any right of termination, cancellation or acceleration under, or result in the creation of any lien, charge or encumbrance on or against any of the properties of the Company pursuant to, any agreement, note, lease, mortgage, deed or other instrument (other than the Certificate of Incorporation or By-laws of the Company, as to which I express no opinion in this paragraph) to which the Company is a party or by which the Company is bound or affected, or any statute, law, rule or regulation applicable to the Company or, to my knowledge, any order, writ, injunction or decree.

The foregoing opinions are subject to the following comment and qualification:

The enforceability of provisions in the Purchase Agreement, the Registration Rights Agreement and the Warrants to the effect that terms may not be waived or modified except in writing may be limited under certain circumstances.

          The foregoing opinions are limited to matters involving the Federal laws of the United States of America, the Delaware General Corporation Law and the law of the State of New York, and I do not express any opinion as to the laws of any other jurisdiction. I do not express any opinion as to the insurance laws, rules, regulations or determinations of any jurisdiction (including, without limitation, the State of New York).

          This opinion letter is provided to you by me in my capacity as General Counsel to the Company, and this opinion letter may not be relied upon by any other Person or for any purpose other than in connection with the transactions contemplated by the Purchase Agreement, the Registration Rights Agreement and the Warrants without, in each instance, my prior written consent.

Very truly yours,

Andrew J. Graf

EVP and General Counsel

EX-10.2

Exhibit 10.2

REGISTRATION RIGHTS AGREEMENT

                    REGISTRATION RIGHTS AGREEMENT, dated as of October 18, 2007 (the “Agreement”) by and between Viewpoint Corporation, a Delaware corporation (the “Company”), and the undersigned investors (each a “Purchaser” and collectively, the “Purchasers”). Capitalized terms used herein but not defined herein shall have the respective meanings given to such terms in the Securities Purchase Agreement by and between the parties hereto of even date herewith (the “Securities Purchase Agreement”).

WITNESSETH

                    WHEREAS, in connection with the Securities Purchase Agreement, the Company has agreed, upon the terms and conditions set forth therein, to issue and sell to each Purchaser (i) shares of the Company’s common stock, par value $.001 per share (the “Common Stock”) and (ii) warrants (the “Warrants”) which will be exercisable six months following the issuance date, to purchase shares of Common Stock (as exercised collectively, the “Warrant Shares”).

                    NOW, THEREFORE, in consideration of the premises and the mutual agreements set forth herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

                    1. Certain Definitions.

                    As used in this Agreement, the following terms shall have the meanings ascribed to them below:

                    “Commission”: the Securities and Exchange Commission or any successor agency.

                    “Common Stock”: Common Stock, par value $.001 per share, of the Company.

                    “Person”: any natural person, corporation, partnership, limited liability company, firm, association, trust, government, governmental agency or other entity, whether acting in an individual, fiduciary, or other capacity.

                    “Purchaser” or “Purchasers”: each Purchaser identified in the Preamble hereto and any other Person who shall hereafter acquire Registrable Securities from such Purchaser and to whom such Purchaser assigns its rights under this Agreement and who agrees to become bound by the provisions of this Agreement in accordance with Section 3.4(a).

                    “Registrable Securities”: (i) shares of Common Stock acquired pursuant to the Securities Purchase Agreement, (ii) the Warrant Shares issued or issuable upon exercise of the Warrants, and (iii) any shares of capital stock issued or issuable with respect to the Warrant Shares or the Warrants as a result of any stock split, stock dividend, recapitalization, exchange or similar event; provided, that any shares of Common Stock constituting Registrable Securities shall cease to be such at such time as (A) they are distributed to the public pursuant to a registration statement under the Securities Act or Rule 144 thereunder, (B) they become subject to resale pursuant to Rule 144(k) under the Securities Act (or any successor provision) (“Rule

144”), (C) the Purchaser thereof may sell all such shares held by such Purchaser in a single 90-day period under Rule 144 because such shares constitute not more than 1.0% of the outstanding shares of Common Stock (provided, in the case of clause (B) and this clause (C), that any shares which cease to be Registrable Securities by operation of such clauses shall again become Registrable Securities if such shares can no longer be sold in a single 90-day period pursuant to Rule 144), or (D) they shall have otherwise been transferred and the new certificate evidencing ownership thereof does not bear a restrictive legend pursuant to the Securities Act and is not subject to a stop transfer order delivered by or on behalf of the Company.

                    For all purposes of this Agreement, a “majority in interest” of the Purchasers or a group thereof shall be determined on the basis of the Registrable Securities held by them.

                    “Registration Statement” means the registration statement or registration statements filed under the Securities Act covering the Registrable Securities.

                    “Securities Act”: the Securities Act of 1933, as amended.

                    2. Registration Rights.

                    2.1 Mandatory Registration.

                    (a) Subject to receipt of necessary information from the Purchasers after prompt request from the Company to the Purchasers to provide such information, the Company shall prepare, and, as soon as practicable but in no event later than forty-five (45) days after the Closing (as defined in the Securities Purchase Agreement) (the “Filing Deadline”), file with the Commission a Registration Statement covering the resale of all of the Registrable Securities. The Registration Statement prepared pursuant hereto shall register for resale all of the Registrable Securities. The Company shall use its reasonable best efforts, subject to receipt of necessary information from the Purchasers after prompt request from the Company to the Purchasers to provide such information, to have the Registration Statement declared effective by the Commission as soon as practicable, but in no event later than (i) the date which is one hundred twenty (120) days after the Closing Date if the Company is informed in writing by the Commission within such 120 day period that it will not review the Registration Statement, (ii) the date which is one hundred fifty (150) days after the Closing Date if the Company is not so informed in writing by the Commission or (iii) the fifth (5^th) Business Day following written notification by the Commission that it has no comments or no further comments on the Registration Statement (such applicable date is referred to as the “Effectiveness Deadline”). By 9:30 a.m. New York City time on the date following the date the Registration Statement is first declared effective by the Commission, the Company shall file with the Commission in accordance with Rule 424 under the Securities Act the final prospectus to be used in connection with sales pursuant to such Registration Statement.

                    (b) The registration pursuant to this Section 2.1 shall be on Form S-3 (or any equivalent successor form), if permitted. If the Company does not meet the eligibility requirements for filing a Registration Statement on Form S-3, then the Company shall instead prepare and file with the Commission a Registration Statement meeting the requirements of Form S-1, Form S-2 or Form SB-2, and in such event, the Company shall re-file such

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Registration Statement, or file a new Registration Statement covering at least the number of shares then registered on the existing Registration Statement (and not previously sold pursuant to the existing Registration Statement or pursuant to Rule 144), on Form S-3 as promptly as practicable (but in no event later than forty-five (45) days) after the Company meets the eligibility requirements to use Form S-3 for the resale of Registrable Securities by each Purchaser.

                    2.2 Effect of Failure to File and Obtain and Maintain Effectiveness of Registration Statement.

                    If (i) a Registration Statement covering all the Registrable Securities required to be covered thereby and required to be filed by the Company pursuant to this Agreement is (A) not filed with the Commission on or before the respective Filing Deadline or (B) not declared effective by the Commission on or before the Effectiveness Deadline or (ii) on any day after such Registration Statement has been declared effective by the Commission (other than during an Allowable Grace Period) sales of all the Registrable Securities required to be included on such Registration Statement cannot be made pursuant to such Registration Statement (including, without limitation, because of a failure to keep such Registration Statement effective, to disclose such information as is necessary for sales to be made pursuant to such Registration Statement or to register sufficient shares of Common Stock), then, as partial relief for the damages to any holder by reason of any such delay in or reduction of its ability to sell the Registrable Securities (which remedy shall not be exclusive of any other remedies available at law or in equity), the Company shall pay to an applicable Purchaser liquidated damages at a rate equal to one percent (1.0%) for every thirty days after such failure (prorated for periods of less than 30 days) of the total purchase price of the Registrable Securities purchased by such Purchaser pursuant to the Securities Purchase Agreement and held by such Purchaser as of the relevant date; provided, however, that in no event shall such damages, in the aggregate, exceed ten percent (10%) of the total purchase price of the Registrable Securities purchased by such Purchaser pursuant to the Securities Purchase Agreement. Such payments shall be due within 5 days after the relevant date.

                    2.3 Registration Procedures. When the Company, pursuant to the provisions of this Agreement, uses its reasonable best efforts to effect or cause the registration of any Registrable Securities under the Securities Act as provided in this Agreement, the Company shall, as expeditiously as possible:

                    (a) prepare and file with the Commission a Registration Statement on Form S-3, to the extent permitted, or, if not permitted, on such other available form for the disposition of Registrable Securities in accordance with the intended method of disposition thereof (provided such intended method of distribution shall not include an underwritten public offering), which form shall be available for the sale of the Registrable Securities by the selling Purchasers thereof and such Registration Statement shall comply as to form in all material respects with the requirements of the applicable form and include all financial statements required by the Commission to be filed therewith, and the Company shall use its reasonable best efforts to cause such Registration Statement to become and remain effective (provided, however, that before filing a Registration Statement or prospectus or any amendments or supplements thereto, or

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comparable statements under securities or blue sky laws of any jurisdiction, the Company will furnish to one counsel designated by the holders of a majority of the Registrable Securities (the “Designated Counsel”) participating in the planned offering, copies of all such documents proposed to be filed (including all exhibits thereto but excluding Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K and any similar or successor reports), which documents will be subject to the reasonable review and reasonable comment of such counsel;

                    (b) prepare and file with the Commission such amendments and supplements to such Registration Statement and the prospectus used in connection therewith as may be necessary to keep such Registration Statement effective for such period as any seller of Registrable Securities pursuant to such Registration Statement shall reasonably request and to comply with the provisions of the Securities Act with respect to the sale or other disposition of all Registrable Securities covered by such Registration Statement in accordance with the intended methods of disposition (provided such intended method of distribution shall not include an underwritten public offering) by the seller or sellers thereof as set forth in such Registration Statement;

                    (c) furnish, without charge and upon request, to each seller of such Registrable Securities covered by such Registration Statement such number of copies of such Registration Statement, each amendment and supplement thereto (in each case including all exhibits), and the prospectus included in such registration statement (including each preliminary prospectus) in conformity with the requirements of the Securities Act, and other documents, as such seller may reasonably request in order to facilitate the public sale or other disposition of the Registrable Securities owned by such seller (the Company hereby consenting to the use in accordance with all applicable law of each such Registration Statement (or amendment or post-effective amendment thereto) and each such prospectus (or preliminary prospectus or supplement thereto) by each such seller of Registrable Securities in connection with the offering and sale of the Registrable Securities covered by such Registration Statement or prospectus;

                    (d) use its reasonable best efforts to register and qualify, unless an exemption from registration and qualification applies, the resale by Purchasers of the Registrable Securities covered by such Registration Statement under such other applicable securities or “blue sky” laws of all applicable jurisdictions in the United States, and do any and all other acts and things which may be reasonably necessary or advisable to enable such sellers or underwriter, if any, to consummate the disposition of the Registrable Securities in such jurisdictions, except that in no event shall the Company be required to qualify to do business as a foreign corporation in any jurisdiction where it would not, but for the requirements of this paragraph (d), be required to be so qualified, to subject itself to taxation in any such jurisdiction or to consent to general service of process in any such jurisdiction;

                    (e) promptly notify each Purchaser selling Registrable Securities covered by such Registration Statement: (i) when the Registration Statement, any pre-effective amendment, the prospectus or any prospectus supplement related thereto or post-effective amendment to the Registration Statement has been filed and, with respect to the Registration Statement or any post-effective amendment, when the same has become effective; (ii) of any request by the Commission or state securities authority for amendments or supplements to the Registration

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Statement or the prospectus related thereto or for additional information; (iii) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or the initiation of any proceedings for that purpose; (iv) of the receipt by the Company of any notification with respect to the suspension of the qualification of any Registrable Securities for sale under the securities or blue sky laws of any jurisdiction or the initiation of any proceeding for such purpose; and (v) of the existence of any fact of which the Company becomes aware which results in the Registration Statement, the prospectus related thereto or any document incorporated therein by reference containing an untrue statement of a material fact or omitting to state a material fact required to be stated therein or necessary to make any statement therein not misleading (provided that in no event shall such notification contain any material, non-public information); and, subject to Section 2.3 (m), if the notification relates to an event described in clause (v), the Company shall promptly prepare and furnish to each such seller a reasonable number of copies of a prospectus supplemented or amended so that, as thereafter delivered to the Purchasers of such Registrable Securities, such prospectus shall not 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 the light of the circumstances under which they were made not misleading;

                    (f) make generally available to its security holders as soon as practical, but not later than ninety (90) days after the close of the period covered thereby, an earnings statement (in form complying with, and in the manner provided by, the provisions of Rule 158 under the Securities Act) covering a twelve-month period beginning not later than the first day of the Company’s fiscal quarter next following the effective date of a Registration Statement;

                    (g) use its reasonable best efforts to cause all such Registrable Securities covered by such registration statement to be listed on the principal securities exchange on which similar securities issued by the Company are then listed (if any), if the listing of such Registrable Securities is then permitted under the rules of such exchange, or (ii) if no similar securities are then so listed, use reasonable best efforts to cause all such Registrable Securities to be, at the Company’s option, listed on a national securities exchange or, as a NASDAQ security within the meaning of Rule 11Aa2-1 promulgated by the Commission pursuant to the Exchange Act or, failing that, secure NASDAQ authorization for such shares and without limiting the generality of the foregoing, take all actions that may be required by the Company as the issuer of such Registrable Securities in order to facilitate the registration of at least two market makers as such with respect to such shares with the National Association of Securities Dealers, Inc. (the “NASD”);

                    (h) at the reasonable request of any Purchaser, the Company shall furnish to such Purchaser, not later than the next business day following the date of the effectiveness of the Registration Statement, an opinion from the Company’s General Counsel in customary form covering such matters as are customarily covered by such opinions, addressed to such Purchaser;

                    (i) deliver to the Designated Counsel copies of all correspondence between the Commission and the Company, its counsel or auditors or with the Commission or its staff with respect to the Registration Statement, other than those portions of any such correspondence and memoranda which contain information subject to attorney-client privilege with respect to the Company, and, upon receipt of such confidentiality agreements as the Company may reasonably

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request, make reasonably available for inspection by (i) any seller of such Registrable Securities covered by such registration statement, (ii) the Designated Counsel and (iii) one firm of accountants or other agents designated by the majority of the Purchasers whose Registrable Securities are included in the registration statement, all pertinent financial and other records, pertinent corporate documents and properties of the Company, and cause all of the Company’s officers, directors and employees to supply all information reasonably requested by any such persons or entities, in connection with such Registration Statement;

                    (j) use its reasonable best efforts to obtain the withdrawal of any order suspending the effectiveness of the registration statement;

                    (k) cooperate with the selling Purchasers of Registrable Securities to facilitate the timely preparation and delivery of certificates representing the Registrable Securities to be sold, and cause such Registrable Securities to be issued in such denominations and registered in such names in accordance with the instructions of the selling Purchasers of Registrable Securities, at least three business days prior to any sale of Registrable Securities;

                    (l) take all such other commercially reasonable actions as the Company deems necessary or advisable in order to expedite or facilitate the disposition of such Registrable Securities in accordance with this Agreement; and

                    (m) notwithstanding anything to the contrary herein, at any time after the Registration Statement has been declared effective by the Commission, the Company may delay the disclosure of material non-public information concerning the Company the disclosure of which at the time is not, in the good faith opinion of the Board of Directors of the Company and its counsel, in the best interest of the Company and, based upon the advice of counsel to the Company, otherwise required (a “Grace Period”); provided, that the Company shall promptly (i) notify the Purchasers in writing of the existence of material non-public information giving rise to a Grace Period (provided that in each notice the Company will not disclose the content of such material non-public information to any Purchaser without such Purchaser’s written consent) and the date on which the Grace Period will begin, and (ii) notify each Purchaser in writing of the date on which the Grace Period ends; and, provided further, that no Grace Period shall exceed fifteen (15) consecutive days and during any three hundred sixty five (365) day period such Grace Periods shall not exceed an aggregate of sixty (60) days and the first day of any Grace Period must be at least five (5) trading days after the last day of any prior Grace Period (each, an “Allowable Grace Period”). For purposes of determining the length of a Grace Period above, the Grace Period shall begin on and include the date the Purchasers receive the notice referred to in clause (i) and shall end on and include the later of the date the Purchasers receive the notice referred to in clause (ii), the last day on which such Grace Period will be on Allowable Grace Period and (iii) the date referred to in such notice. The provisions of the last clause of Section 2.3 (e) hereof shall not be applicable during the period of any Allowable Grace Period. Upon expiration of the Grace Period, the Company shall again be bound by the last clause of Section 2.3 (e) with respect to the information giving rise thereto unless such material non-public information is no longer applicable.

                    It shall be a condition precedent to the Company’s obligations under this Section 2 that each seller of Registrable Securities as to which any registration is being effected furnish

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the Company (in a timely manner, but in any event within five (5) calendar days of written request by the Company) such information regarding such seller, the Registrable Securities held by it and the intended method of distribution of such securities as the Company may from time to time reasonably request, provided that such information shall be used only in connection with such registration. For the avoidance of doubt, the Company shall not be liable for liquidated damages pursuant to Section 2 hereof to a Purchaser to the extent that the failure to meet the Filing Deadline or the Effectiveness Deadline relates to the failure of such Purchaser of Registrable Securities to provide, in a timely manner, information reasonably requested in writing by the Company.

                    Each Purchaser, by such Purchaser’s acceptance of the Registrable Securities, agrees to cooperate with the Company as reasonably requested by the Company in connection with the preparation and filing of any Registration Statement hereunder unless such Purchaser has notified the Company in writing of such Purchaser’s election to exclude all of such Purchaser’s Registrable Securities from such Registration Statement.

                    Each Purchaser of Registrable Securities agrees that upon receipt of any notice from the Company of the happening of any event of the kind described in clause (v) of paragraph (e) of this Section 2.3, such Purchaser will immediately discontinue such Purchaser’s disposition of Registrable Securities pursuant to the registration statement covering such Registrable Securities until such Purchaser’s receipt of the copies of the supplemented or amended prospectus contemplated by paragraph (e) of this Section 2.3 and if so directed by the Company will deliver to the Company (at the Company’s expense) all copies, other than permanent file copies, then in such Purchaser’s possession of the prospectus covering such Registrable Securities that was in effect at the time of receipt of such notice.

                    2.4 Registration Expenses. The Company shall, whether or not any registration pursuant to this Agreement becomes effective, pay all reasonable and customary expenses incident to the Company’s performance of or compliance with this Article 2, including (i) Commission, stock exchange or NASD registration and filing fees and all listing fees and fees with respect to the inclusion of securities in NASDAQ, (ii) fees and expenses of compliance with state securities or “blue sky” laws and in connection with the preparation of a “blue sky” survey, including without limitation, reasonable fees and expenses of blue sky counsel, (iii) printing expenses, (iv) messenger and delivery expenses, (v) internal expenses (including, without limitation, all salaries and expenses of the Company’s officers and employees performing legal and accounting duties), (vi) fees and disbursements of counsel for the Company, and (vii) fees and expenses of other persons, including special experts, retained by the Company. Notwithstanding the foregoing, (A) the provisions of this Section 2.4 shall be deemed amended to the extent necessary to cause these expense provisions to comply with “blue sky” laws of each state in which the offering is made and (B) in connection with any registration hereunder, each Purchaser of Registrable Securities being registered shall pay all underwriting discounts and commissions and transfer taxes, if any, attributable to such Registrable Securities.

                    2.5 Indemnification and Contribution.

                    (a) In the event of any registration of any of the Registrable Securities under the Securities Act pursuant to this Agreement, to the extent permitted by law, the Company will

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indemnify and hold harmless the seller of such Registrable Securities, and each other person, if any, who controls such seller or underwriter within the meaning of the Securities Act or the Exchange Act (each, a “Seller Indemnified Party”) against any losses, claims, damages or liabilities, joint or several, to which such Seller Indemnified Party may become subject under the Securities Act, the Exchange Act, state securities or Blue Sky laws or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon (i) any untrue statement or alleged untrue statement of a material fact in a Registration Statement or any post-effective amendment thereto or in any filing made in connection with the qualification of the offering under the securities or other “blue sky” laws of any jurisdiction in which Registrable Securities are offered (“Blue Sky Filing”), or the omission or alleged omission to state a material fact required to be stated therein or necessary to make the statements therein not misleading, (ii) any untrue statement or alleged untrue statement of a material fact contained in any preliminary prospectus if used prior to the effective date of such Registration Statement, or contained in the final prospectus (as amended or supplemented, if the Company files any amendment thereof or supplement thereto with the SEC) or the omission or alleged omission to state therein any material fact necessary to make the statements made therein, in the light of the circumstances under which the statements therein were made, not misleading, (iii) any violation or alleged violation by the Company of the 1933 Act, the 1934 Act, any other law, including, without limitation, any state securities law, or any rule or regulation thereunder relating to the offer or sale of the Registrable Securities pursuant to a Registration Statement or (iv) any material violation of this Agreement; and the Company will reimburse such Seller Indemnified Party for any legal or other expenses (in each case, to the extent such expenses are documented and reasonable) incurred by such Seller Indemnified Party in connection with investigating or defending any such loss, claim, damage, liability or action; provided, however, that the foregoing indemnification and reimbursement (i) shall not apply to the extent that any such loss, claim, damage or liability arises out of or is based upon any untrue statement or omission made in such Registration Statement, preliminary prospectus, final prospectus or in any filing made in connection with the securities or blue sky laws of any jurisdiction, or any such amendment or supplement thereto, in each case, in reliance upon and in conformity with information furnished to the Company, in writing, by or on behalf of such Seller Indemnified Party specifically for use in the preparation thereof; (ii) with respect to any preliminary prospectus, shall not inure to the benefit of any such person from whom the person asserting any such loss, claim, damage or liability purchased the Registrable Securities that are the subject thereof (or to the benefit of any person controlling such person) if the untrue statement or omission of material fact contained in the preliminary prospectus was corrected in the prospectus, as then amended or supplemented, and the Seller Indemnified Party was promptly advised in writing not to use the incorrect prospectus prior to the use giving rise to a violation and such Seller Indemnified Party, notwithstanding such advice, used it or failed to deliver the correct prospectus as required by the Securities Act; and (iii) shall not apply to amounts paid in settlement of any loss, claim, damage or liability if such settlement is effected without the prior written consent of the Company.

                    (b) In the event of any registration of any of the Registrable Securities under the Securities Act pursuant to this Agreement, each seller of Registrable Securities, severally and not jointly, will indemnify and hold harmless the Company, each of its directors and officers and each person, if any, who controls the Company within the meaning of the Securities Act or the Exchange Act (each, a “Company Indemnified Party”), against any losses, claims, damages or liabilities, joint or several, to which such Company Indemnified Party may become subject under

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the Securities Act, Exchange Act, state securities or Blue Sky laws or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in any Registration Statement under which such Registrable Securities were registered under the Securities Act, any preliminary prospectus, final prospectus or summary prospectus contained in the Registration Statement, or any amendment or supplement to the Registration Statement, or arise out of or are based upon any omission or alleged omission to state a material fact required to be stated therein or necessary to make the statements therein not misleading, if, but only if, the statement or omission was made in reliance upon and in conformity with information relating to such seller furnished in writing to the Company by or on behalf of such seller specifically for use in connection with the preparation of such Registration Statement, preliminary prospectus, final prospectus, or in any filing made in connection with the securities or blue sky laws of any jurisdiction or any amendment or supplement thereto and such seller of Registrable Securities shall reimburse the Company for any legal or other expenses (in each case, to the extent such expenses are documented and reasonable) incurred by such Company Indemnified Party in connection with investigating or defending any such loss, claim, damage, liability or action; provided, however, that the obligations of each Purchaser hereunder shall be limited to an amount equal to the net proceeds to such Purchaser of Registrable Securities sold in connection with such registration.

                    (c) Each party entitled to indemnification under this Section 2.5 (the “Indemnified Party”) shall give notice to the party required to provide indemnification (the “Indemnifying Party”) promptly after such Indemnified Party has actual knowledge of any claim as to which indemnity may be sought, and shall permit the Indemnifying Party to assume the defense of any such claim or any litigation resulting therefrom; provided, that counsel for the Indemnifying Party, who shall conduct the defense of such claim or litigation, shall be approved by the Indemnified Party (whose approval shall not be unreasonably withheld); and, provided further, that the failure of any Indemnified Party to give notice as provided herein shall not relieve the Indemnifying Party of its obligations under this Section 2.5 except to the extent, if any, that the Indemnifying Party shall have been actually and materially prejudiced as a result of such failure (except that the Indemnifying Party shall not be liable for any expenses incurred during the period in which the Indemnified Party failed to give such notice). The Indemnified Party may participate in such defense at such party’s expense; provided, however, that the Indemnifying Party shall pay such expense if representation of such Indemnified Party by the counsel retained by the Indemnifying Party would be inappropriate due to actual or potential differing interests between the Indemnified Party and any other party represented by such counsel in such proceeding. No Indemnifying Party, in the defense of any such claim or litigation shall, except with the consent of each Indemnified Party, consent to entry of any judgment or enter into any settlement which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Indemnified Party of a release from all liability in respect of such claim or litigation, and no Indemnified Party shall consent to entry of any judgment or settle such claim or litigation without the prior written consent of the Indemnifying Party.

                    (d) In order to provide for just and equitable contribution to joint liability under the Securities Act in any case in which either (i) any holder of Registrable Securities exercising rights under this Agreement, or any controlling person of any such holder, makes a

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claim for indemnification pursuant to this Section 2.5 but it 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 this Section 2.5 provides for indemnification in such case, or (ii) contribution under the Securities Act may be required on the part of any such selling holder or any such controlling person in circumstances for which indemnification is provided under this Section 2.5; then, in each such case, the Company and such Purchaser will contribute to the aggregate losses, claims, damages or liabilities to which they may be subject (after contribution from others) in such proportions so that such holder is responsible for the portion represented by the percentage that the public offering price of its Registrable Securities offered by the Registration Statement bears to the public offering price of all securities offered by such Registration Statement, and the Company is responsible for the remaining portion; provided, however, that, in any such case, (A) no such holder will be required to contribute any amount in excess of the proceeds to it of all Registrable Securities sold by it pursuant to such Registration Statement, and (B) no person or entity guilty of fraudulent misrepresentation, within the meaning of Section 11(f) of the Securities Act, shall be entitled to contribution from any person or entity who is not guilty of such fraudulent misrepresentation.

                    3. General.

                    3.1 Rule 144. The Company covenants that it will timely file the reports required to be filed by it under the Securities Act or the Exchange Act (including, but not limited to, the reports under Sections 13 and 15(d) of the Exchange Act referred to in subparagraph (c)(1) of Rule 144 under the Securities Act), and will take such further action as any Purchaser of Registrable Securities may reasonably request, all to the extent required from time to time to enable such Purchaser to sell Registrable Securities without registration under the Securities Act within the limitation of the exemptions provided by (i) Rule 144 under the Securities Act, as such Rule may be amended from time to time, or (ii) any similar rule or regulation hereafter adopted by the Commission. Upon the request of any Purchaser of Registrable Securities (so long as such Purchaser owns such Registrable Securities), the Company will deliver to such Purchaser a written statement as to whether it has complied with such requirements.

                    3.2 Notices and Other Communications. All notices, requests, demands and other communications made in connection with this Agreement shall be in writing and shall be deemed to have been duly given (a) on the date of delivery, if personally delivered to the persons identified below, (b) on the date of receipt if sent by facsimile, or (c) one business day after delivered to a nationally recognized overnight courier service marked for overnight delivery, in each case addressed to the Purchasers at their respective addresses set forth on the stock records of the Company, and to the Company at:

Viewpoint Corporation

498 Seventh Avenue, Suite 1810

New York, New York 10018

Attention: General Counsel

Telephone: (212) 201-0800

Facsimile: (212) 201-0846

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or to such other address as any party may, from time to time, designate in a written notice given in a like manner, with a copy to:

Schulte Roth & Zabel LLP
919 Third Avenue
New York, New York 10022
Telephone:	(212) 756-2000
Facsimile:	(212) 593-5955
Attention:	Eleazer Klein, Esq.

                    3.3 Amendments. This Agreement may be amended only by written instruments signed by the Company and a majority in interest of the Purchasers. No waiver of any right or remedy provided for in this Agreement shall be effective unless it is set forth in writing signed by a majority in interest of the Purchasers. No waiver of any right or remedy granted in one instance shall be deemed to be a continuing waiver under the same or similar circumstances thereafter arising.

                    3.4 Miscellaneous.

                    (a) This Agreement shall be binding upon and inure to the benefit of and be enforceable by the parties hereto and the respective successors and assigns of the parties hereto, whether so expressed or not. This Agreement and the rights of the parties hereunder may be assigned by any of the parties hereto to any transferee of Registrable Securities if: (i) each Purchaser agrees in writing with the transferee or assignee to assign such rights, and a copy of such agreement is furnished to the Company within a reasonable time after such assignment; (ii) the Company is, within a reasonable time after such transfer or assignment, furnished with written notice of (a) the name and address of such transferee or assignee, and (b) the securities with respect to which such registration rights are being transferred or assigned; (iii) immediately following such transfer or assignment the further disposition of such securities by the transferee or assignee is restricted under the Securities Act and applicable state securities laws; (iv) at or before the time the Company receives the written notice contemplated by clause (ii) of this sentence the transferee or assignee agrees in writing with the Company to be bound by all of the provisions contained herein; and (v) such transfer shall have been made in accordance with the applicable requirements of the Securities Purchase Agreement.

                    (b) If any term, provision, covenant or restriction of this Agreement or any exhibit hereto is held by a court of competent jurisdiction to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Agreement and such exhibits shall remain in full force and effect and shall in no way be affected, impaired or invalidated. It is hereby stipulated and declared to be the intention of the parties that they would have executed the remaining terms, provisions, covenants and recitations without including any of such which may be hereafter declared invalid, void or unenforceable.

                    (c) This Agreement may be executed in one or more counterparts, all of which shall be considered one and the same agreement, and shall become effective when one or

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more of the counterparts have been signed by each party and delivered to the other parties, it being understood that all parties need not sign the same counterpart. Delivery by facsimile of an executed counterpart of any signature page to this Agreement to be executed hereunder shall have the same effectiveness as delivery of a manually executed counterpart thereof.

                    (d) This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of New York, without giving effect to conflict of laws principles that would require the application of the laws of another jurisdiction. The parties hereto agree to submit to the jurisdiction of the federal or state courts located in the City of New York in any action or proceeding arising out of or relating to this Agreement.

                    (e) Except as set forth in Sections 2.5(a) and (b), this Agreement is intended for the benefit of the parties hereto and their respective permitted successors and assigns, and is not for the benefit of, nor may any provision hereof be enforced by, any other Person.

[The remainder of this page intentionally left blank]

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SIGNATURES

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

THE COMPANY:
VIEWPOINT CORPORATION
By:	Christopher C. Duignan
	Name: Christopher C. Duignan
	Title: CFO

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SIGNATURES

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

Name of Purchaser:
Signature of Authorized Signatory of Purchaser:
Name of Authorized Signatory:
Title of Authorized Signatory:
Email Address of Purchaser:

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EX-10.3

Exhibit 10.3

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

VIEWPOINT CORPORATION

WARRANT TO PURCHASE COMMON STOCK

Warrant No.:
Number of Shares: [______]
Date of Issuance: October 18, 2007 (“Issuance Date”)

Viewpoint Corporation, a Delaware corporation (the “Company”), hereby certifies that, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, _______________________, the registered holder hereof or its permitted assigns (the “Holder”), is entitled, subject to the terms set forth below, to purchase from the Company, at the Exercise Price (as defined below) then in effect, upon surrender of this Warrant to Purchase Common Stock with the Exercise Notice attached hereto as Exhibit A duly executed and payment therefore as provided herein at any time or times on or after the date that is six months after the date hereof, but not after 11:59 P.M., New York Time, on the Expiration Date (as defined below), ____________________ (_______) fully paid nonassessable shares of Common Stock (as defined below) (the “Warrant Shares”). Except as otherwise defined herein, capitalized terms in this Warrant shall have the meanings set forth in Section 17. This Warrant is one of the Warrants to Purchase Common Stock (the “SPA Warrants”) issued pursuant to Section 2.01 of that certain Securities Purchase Agreement, dated as of October 18, 2007, among the Company and the purchasers (the “Purchasers”) referred to therein (the “Securities Purchase Agreement”).

          1. TERM OF WARRANT. Subject to the terms and conditions hereof, this Warrant shall be for a term of five and one-half years and shall be exercisable, in whole or in part, during the five year term commencing six months following the Issuance Date and ending at 11:59 P.M New York Time, on April 18, 2013 (the “Expiration Date”), and shall be void thereafter.

          2. EXERCISE OF WARRANT.

                    (a) Mechanics of Exercise. Subject to the terms and conditions hereof (including, without limitation, the limitations set forth in Section 2(d)), this Warrant may be exercised by the holder hereof on any day, following the date that is six months after the Issuance Date, in whole or in part prior to the Expiration Date by (i) delivery of a written notice, in the form attached hereto as Exhibit A (the “Exercise Notice”), of such holder’s election to exercise this Warrant, and (ii) payment to the Company of an amount equal to the applicable Exercise Price multiplied by the number of Warrant Shares as to which this Warrant is being exercised (the “Aggregate Exercise Price”) in cash or by wire transfer of immediately available funds. The Holder shall not be required to deliver the original warrant in order to effect an exercise hereunder. Execution and delivery of the Exercise Notice with respect to less than all of the Warrant Shares shall have the same effect as cancellation of the original Warrant and issuance of a new warrant evidencing the right to purchase the remaining number of Warrant Shares. On or before the third Business Day following the date on which the Company has received each of the Exercise Notice, the Aggregate Exercise Price and this Warrant (or an indemnification undertaking with respect to this Warrant in the case of its loss, theft or destruction) (the “Exercise Delivery Documents”), the Company shall (X) issue and deliver to the address specified in the Exercise Notice, a certificate, registered in the name of the holder of this Warrant or its designee, for the number of shares of Common Stock to which the holder of this Warrant is entitled pursuant to such exercise, or (Y) provided that the Company’s transfer agent (the “Transfer Agent”) is participating in The Depository Trust Company (“DTC”) Fast Automated Securities Transfer Program, upon the request of the holder, credit such aggregate number of shares of Common Stock to which the holder of this Warrant is entitled pursuant to such exercise to the holder’s or its designee’s balance account with DTC through its Deposit Withdrawal Agent Commission system. Upon delivery of the Exercise Notice, this Warrant and the Aggregate Exercise Price referred to in clause (ii) above, the Holder of this Warrant shall be deemed for all corporate purposes to have become the holder of record of the Warrant Shares with respect to which this Warrant has been exercised as of the date of the Exercise Notice, irrespective of the date of delivery of the certificates evidencing such Warrant Shares. If the number of Warrant Shares represented by this Warrant submitted for exercise pursuant to this Section 2(a) is greater than the number of Warrant Shares being acquired upon an exercise, then the Company shall as soon as practicable and in no event later than three Business Days after any exercise and at its own expense, issue a new Warrant (in accordance with Section 8(d)) representing the right to purchase the number of Warrant Shares purchasable immediately prior to such exercise under this Warrant, less the number of Warrant Shares with respect to which this Warrant is exercised. No fractional shares of Common Stock are to be issued upon the exercise of this Warrant, but rather the number of shares of Common Stock to be issued shall be rounded up to the nearest whole number. The Company shall pay any and all documentary stamp, transfer or similar taxes that may be payable with respect to the issuance and delivery of Warrant Shares upon exercise of this Warrant.

                    (b) Net Exercise. Notwithstanding the foregoing, if the Holder submits an Exercise Notice at any time following the date that is one year after the Issuance Date, and at such time an effective Registration Statement is not available for the resale of all of the Warrant Shares issuable hereunder, the Holder may elect to pay the Exercise Price in either cash or pursuant to a cashless exercise (a “Cashless Exercise”), as hereinafter provided, or, at the

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election of Holder, a combination thereof. The Holder may effect a Cashless Exercise by (i) delivery of an Exercise Notice noting that the Holder wishes to effect a Cashless Exercise and (ii) the surrender to the Company, on or as soon as practicable following the date the Holder delivers the Exercise Notice to the Company, of this Warrant (or an indemnification undertaking with respect to this Warrant in the case of its loss, theft or destruction), upon which the Company shall (X) issue and deliver to the address specified in the Exercise Notice, a certificate, registered in the name of the holder of this Warrant or its designee, for the number of shares of Common Stock to which the holder of this Warrant is entitled pursuant to such exercise, or (Y) provided that the Transfer Agent is participating in the DTC Fast Automated Securities Transfer Program, upon the request of the holder, credit such aggregate number of shares of Common Stock to which the holder of this Warrant is entitled pursuant to such exercise to the holder’s or its designee’s balance account with DTC through its Deposit Withdrawal Agent Commission system. The number of Warrant Shares to be issued to the Holder pursuant to a Cashless Exercise shall be determined as follows:

	X = Y × (A-B)/A
where:
X = the number of Warrant Shares to be issued to the Holder;
Y = the number of Warrant Shares with respect to which this Warrant is being exercised;
A = the fair market value of one share of Common Stock at the date of exercise; and
B = the Exercise Price.

For purposes of this Section 2(b), the fair market value of one share of Common Stock shall be determined in good faith by the Company’s Board of Directors; provided, however, that if the Company’s Common Stock is traded on a national exchange or over-the-counter market, the fair market value per share shall be the cumulative twenty (20) – day VWAP of the Common Stock for the twenty Trading Days immediately preceding (but not including) the date of exercise, calculated by adding up the dollars traded on such national exchange or over-the-counter market for every transaction during the twenty (20) – day period (price times shares traded) and then dividing by the total shares traded on such national exchange or over-the-counter market for the twenty (20) – day period.

                    (c) Exercise Price. For purposes of this Warrant, “Exercise Price” means $0.84, subject to adjustment as provided herein.

                    (d) Company’s Failure to Timely Deliver Securities. If within three (3) Trading Days after the Company’s receipt of the facsimile copy of a Exercise Notice the Company shall fail to issue and deliver a certificate to the Holder and register such shares of Common Stock on the Company’s share register or credit the Holder’s balance account with DTC for the number of shares of Common Stock to which the Holder is entitled upon the

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Holder’s exercise hereunder, and if on or after such Trading Day the Holder purchases (in an open market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale by the Holder of shares of Common Stock issuable upon such exercise that the Holder anticipated receiving from the Company (a “Buy-In”), then the Company shall, within five (5) Business Days after the Holder’s request and in the Holder’s discretion, either (i) pay cash to the Holder in an amount equal to the Holder’s total purchase price (including brokerage commissions, if any) for the shares of Common Stock so purchased (the “Buy-In Price”), at which point the Company’s obligation to deliver such certificate (and to issue such Warrant Shares) shall terminate, or (ii) promptly honor its obligation to deliver to the Holder a certificate or certificates representing such Warrant Shares and pay cash to the Holder in an amount equal to the excess (if any) of the Buy-In Price over the product of (A) such number of shares of Common Stock, times (B) the Weighted Average Price on the date of exercise.

                    (e) Disputes. In the case of a dispute as to the determination of the Exercise Price or the arithmetic calculation of the Warrant Shares, the Company shall promptly issue to the holder the number of Warrant Shares that are not disputed and resolve such dispute in accordance with Section 13.

                    (f) Insufficient Authorized Shares. If at any time while this Warrant remain outstanding the Company does not have a sufficient number of authorized and unreserved shares of Common Stock to satisfy its obligation to reserve for issuance upon exercise of this Warrant at least a number of shares of Common Stock equal to the number of shares of Common Stock as shall from time to time be necessary to effect the exercise of all of this Warrant then outstanding, then the Company shall take all action necessary to assure that such number of shares of Common Stock may be issued as provided herein without violation of any applicable law or regulation or of any requirements of any securities exchange or automated quotation system upon which the Common Stock may be listed.

          3. ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF WARRANT SHARES UPON SUBDIVISION OR COMBINATION OF COMMON STOCK. If the Company at any time after the date of issuance of this Warrant subdivides (by any stock split, stock dividend, recapitalization or otherwise) one or more classes of its outstanding shares of Common Stock into a greater number of shares, the Exercise Price in effect immediately prior to such subdivision will be proportionately reduced and the number of Warrant Shares will be proportionately increased. If the Company at any time after the date of issuance of this Warrant combines (by combination, reverse stock split or otherwise) one or more classes of its outstanding shares of Common Stock into a smaller number of shares, the Exercise Price in effect immediately prior to such combination will be proportionately increased and the number of Warrant Shares will be proportionately decreased. Any adjustment under this Section 3 shall become effective at the close of business on the date the subdivision or combination becomes effective.

          4. RIGHTS UPON DISTRIBUTION OF ASSETS. If the Company shall declare or make any dividend or other distribution of its assets (or rights to acquire its assets) to holders of Common Stock, by way of return of capital or otherwise (including, without limitation, any distribution of cash, stock or other securities, property or options by way of a dividend, spin off,

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reclassification, corporate rearrangement or other similar transaction) (a “Distribution”), at any time after the issuance of this Warrant, then, in each such case:

                    (a) any Exercise Price in effect immediately prior to the close of business on the record date fixed for the determination of holders of Common Stock entitled to receive the Distribution shall be reduced, effective as of the close of business on such record date, to a price determined by multiplying such Exercise Price by a fraction of which (i) the numerator shall be the Closing Sale Price of the Common Stock on the Trading Day immediately preceding such record date minus the value of the Distribution (as determined in good faith by the Company’s Board of Directors) applicable to one share of Common Stock, and (ii) the denominator shall be the Closing Sale Price of the Common Stock on the trading day immediately preceding such record date; and

                    (b) the number of Warrant Shares shall be increased to a number of shares equal to the number of shares of Common Stock obtainable immediately prior to the close of business on the record date fixed for the determination of holders of Common Stock entitled to receive the Distribution multiplied by the reciprocal of the fraction set forth in the immediately preceding paragraph (a); provided that in the event that the Distribution is of common stock (“Other Common Stock”) of a company whose common stock is traded on a national securities exchange or a national automated quotation system, then the holder of this Warrant may elect to receive a warrant to purchase Other Common Stock in lieu of an increase in the number of Warrant Shares, the terms of which shall be identical to those of this Warrant, except that such warrant shall be exercisable into the number of shares of Other Common Stock that would have been payable to the holder of this Warrant pursuant to the Distribution had the holder exercised this Warrant immediately prior to such record date and with an aggregate exercise price equal to the product of the amount by which the exercise price of this Warrant was decreased with respect to the Distribution pursuant to the terms of the immediately preceding paragraph (a) and the number of Warrant Shares calculated in accordance with the first part of this paragraph (b).

          5. ORGANIC CHANGE. Prior to the consummation of any Organic Change following which the Company is not a surviving entity, the Company will secure from the Person purchasing such assets or the Person issuing the securities or providing the assets in such Organic Change (in each case, the “Acquiring Entity”) a written agreement (in form and substance reasonably satisfactory to the holders of SPA Warrants representing at least two-thirds of the shares of Common Stock obtainable upon exercise of the SPA Warrants then outstanding) to deliver to the holder of this Warrant in exchange for this Warrant, a security of the Acquiring Entity evidenced by a written instrument substantially similar in form and substance to this Warrant and reasonably satisfactory to the holder of this Warrant (including, an adjusted exercise price equal to the value for the Common Stock reflected by the terms of such consolidation, merger or sale, and exercisable for a corresponding number of shares of Common Stock acquirable and receivable upon exercise of this Warrant (without regard to any limitations on the exercise of this Warrant), if the value so reflected is less than the Exercise Price in effect immediately prior to such consolidation, merger or sale). In the event that an Acquiring Entity is directly or indirectly controlled by a company or entity whose common stock or similar equity interest is listed, designated or quoted on a securities exchange or trading market, the holder of this Warrant may elect to treat such Person as the Acquiring Entity for purposes of this Section 5. Prior to the consummation of any other Organic Change, the Company shall be required to make

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appropriate provision to insure that the holder of this Warrant thereafter will have the right to acquire and receive in lieu of or in addition to (as the case may be) the shares of Common Stock immediately theretofore acquirable and receivable upon the exercise of this Warrant (without regard to any limitations on the exercise of this Warrant including those set forth in Sections 2(d)(i) and 2(d)(ii) of this Warrant), such shares of stock, securities or assets that would have been issued or payable in such Organic Change with respect to or in exchange for the number of shares of Common Stock which would have been acquirable and receivable upon the exercise of this Warrant as of the date of such Organic Change (without regard to any limitations on the exercise of this Warrant including those set forth in Sections 2(d)(i) and 2(d)(ii) of this Warrant). In addition to and not in substitution for any other rights hereunder, prior to the consummation of any Organic Change pursuant to which holders of shares of Common Stock are entitled to receive securities or other assets with respect to or in exchange for shares of Common Stock (a “Corporate Event”), the Company shall make appropriate provision to insure that the Holder will thereafter have the right to receive upon an exercise of this Warrant at any time after the consummation of the Organic Change but prior to the Expiration Date, in lieu of the shares of the Common Stock (or other securities, cash, assets or other property) issuable upon the exercise of this Warrant prior to such Organic Change, such shares of stock, securities, cash, assets or any other property whatsoever (including warrants or other purchase or subscription rights) which the Holder would have been entitled to receive upon the happening of such Organic Change had this Warrant been exercised immediately prior to such Organic Change. Provision made pursuant to the preceding sentence shall be in a form and substance reasonably satisfactory to the Holder. The provisions of this Section shall apply similarly and equally to successive Organic Changes and Corporate Events and shall be applied without regard to any limitations on the exercise of this Warrant. Notwithstanding the foregoing, in the event of an Organic Change, at the request of the Holder delivered before the fifth (5^th) day after notice from the Company (or the Acquiring Entity) of the consummation of such Organic Change, the Company (or the Acquiring Entity) shall purchase this Warrant from the Holder by paying to the Holder, within five (5) Business Days after such request (or, if later, on the effective date of the Organic Change), cash in an amount equal to the Black Scholes Value of the remaining unexercised portion of this Warrant on the date of such Organic Change.

          6. NONCIRCUMVENTION. The Company hereby covenants and agrees that the Company will not, by amendment of its Certificate of Incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities, or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, and will at all times in good faith carry out all the provisions of this Warrant. Without limiting the generality of the foregoing, the Company (i) will not increase the par value of any shares of Common Stock receivable upon the exercise of this Warrant above the Exercise Price then in effect, (ii) will take all such actions as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable shares of Common Stock upon the exercise of this Warrant, and (iii) will, so long as any of the SPA Warrants are outstanding, take all action necessary to reserve and keep available out of its authorized and unissued Common Stock, solely for the purpose of effecting the exercise of the SPA Warrants, 100% of the number of shares of Common Stock as shall from time to time be necessary to effect the exercise of the SPA Warrants then outstanding (without regard to any limitations on exercise).

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          7. WARRANT HOLDER NOT DEEMED A STOCKHOLDER. Except as otherwise specifically provided herein, no holder, solely in such Person’s capacity as a holder, of this Warrant shall be entitled to vote or receive dividends or be deemed the holder of shares of the Company for any purpose, nor shall anything contained in this Warrant be construed to confer upon the holder hereof, solely in such Person’s capacity as a holder of this Warrant, any of the rights of a shareholder of the Company or any right to vote, give or withhold consent to any corporate action (whether any reorganization, issue of stock, reclassification of stock, consolidation, merger, conveyance or otherwise), receive notice of meetings, receive dividends or subscription rights, or otherwise, prior to the issuance to the holder of this Warrant of the Warrant Shares which such Person is then entitled to receive upon the due exercise of this Warrant. In addition, nothing contained in this Warrant shall be construed as imposing any liabilities on such holder to purchase any securities (upon exercise of this Warrant or otherwise) or as a stockholder of the Company, whether such liabilities are asserted by the Company or by creditors of the Company.

          8. REISSUANCE OF WARRANTS.

                    (a) Transfer of Warrant. If this Warrant is to be transferred, the holder shall surrender this Warrant to the Company, whereupon the Company will forthwith issue and deliver upon the order of the holder of this Warrant a new Warrant (in accordance with Section 8(d)), registered as the holder of this Warrant may request, representing the right to purchase the number of Warrant Shares being transferred by the Holder and, if less then the total number of Warrant Shares then underlying this Warrant is being transferred, a new Warrant (in accordance with Section 8(d)) to the holder of this Warrant representing the right to purchase the number of Warrant Shares not being transferred.

                    (b) Lost, Stolen or Mutilated Warrant. Upon receipt by the Company of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant, and, in the case of loss, theft or destruction, of any indemnification undertaking by the holder of this Warrant to the Company in customary form and reasonably acceptable to the Company (based, in part, on the net worth of, or security provided by, the Holder) and, in the case of mutilation, upon surrender and cancellation of this Warrant, the Company shall execute and deliver to the Holder a new Warrant (in accordance with Section 8(d)) representing the right to purchase the Warrant Shares then underlying this Warrant.

                    (c) Warrant Exchangeable for Multiple Warrants. This Warrant is exchangeable, upon the surrender hereof by the Holder at the principal office of the Company, for a new Warrant or Warrants (in accordance with Section 8(d)) representing in the aggregate the right to purchase the number of Warrant Shares then underlying this Warrant, and each such new Warrant will represent the right to purchase such portion of such Warrant Shares as is designated by the holder of this Warrant at the time of such surrender; provided, however, that no Warrants for fractional shares of Common Stock shall be given.

                    (d) Issuance of New Warrants. Whenever the Company is required to issue a new Warrant pursuant to the terms of this Warrant, such new Warrant (i) shall be of like tenor with this Warrant, (ii) shall represent, as indicated on the face of such new Warrant, the right to purchase the Warrant Shares then underlying this Warrant (or in the case of a new Warrant

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being issued pursuant to Section 8(a) or Section 8(c), the Warrant Shares designated by the holder of this Warrant which, when added to the number of shares of Common Stock underlying the other new Warrants issued in connection with such issuance, does not exceed the number of Warrant Shares then underlying this Warrant), (iii) shall have an issuance date, as indicated on the face of such new Warrant which is the same as the Issuance Date, and (iv) shall have the same rights and conditions as this Warrant.

          9. NOTICES. Whenever notice is required to be given under this Warrant, unless otherwise provided herein, such notice shall be given in accordance with Section 6.01 of the Securities Purchase Agreement. The Company shall provide the holder of this Warrant with prompt written notice of all actions taken pursuant to this Warrant, including in reasonable detail a description of such action and the reason therefore.

          10. AMENDMENT AND WAIVER. Except as otherwise provided herein, the provisions of this Warrant may be amended and the Company may take any action herein prohibited, or omit to perform any act herein required to be performed by it, only if the Company has obtained the written consent of the holders of SPA Warrants representing at least two-thirds of the shares of Common Stock obtainable upon exercise of the SPA Warrants then outstanding; provided that no such action may increase the exercise price of any SPA Warrant or decrease the number of shares or class of stock obtainable upon exercise of any SPA Warrant without the written consent of the holder of this Warrant. No such amendment shall be effective to the extent that it applies to less than all of the holders of the SPA Warrants then outstanding.

          11. GOVERNING LAW. This Warrant shall be construed and enforced in accor­dance with, and all questions concerning the construction, validity, interpretation and performance of this Warrant shall be governed by, the internal laws of the State of New York, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of New York or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of New York.

          12. CONSTRUCTION; HEADINGS. This Warrant shall be deemed to be jointly drafted by the Company and all the Purchasers and shall not be construed against any person as the drafter hereof. The headings of this Warrant are for convenience of reference and shall not form part of, or affect the interpretation of, this Warrant.

          13. DISPUTE RESOLUTION. In the case of a dispute as to the determination of the Exercise Price or the arithmetic calculation of the Warrant Shares, the Company shall submit the disputed determinations or arithmetic calculations via facsimile within two Business Days of receipt of the Exercise Notice giving rise to such dispute, as the case may be, to the holder of this Warrant. If the holder of this Warrant and the Company are unable to agree upon such determination or calculation of the Exercise Price or the Warrant Shares within three Business Days of such disputed determination or arithmetic calculation being submitted to the Holder, then the Company shall, within two Business Days submit via facsimile (a) the disputed determination of the Exercise Price to an independent, reputable investment bank selected by the Company and reasonably approved by the holder of this Warrant or (b) the disputed arithmetic calculation of the Warrant Shares to the Company’s independent, outside accountant. The Company shall cause the investment bank or the accountant, as the case may be, to perform the

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determinations or calculations and notify the Company and the Holder of the results no later than ten Business Days from the time it receives the disputed determinations or calculations. Such investment bank’s or accountant’s determination or calculation, as the case may be, shall be binding upon all parties absent demonstrable error.

          14. REMEDIES, OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE RELIEF. The remedies provided in this Warrant shall be cumulative and in addition to all other remedies available under this Warrant, the Securities Purchase Agreement and the Registration Rights Agreement, at law or in equity (including a decree of specific performance and/or other injunctive relief), and nothing herein shall limit the right of the holder of this Warrant right to pursue actual damages for any failure by the Company to comply with the terms of this Warrant. The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the holder of this Warrant and that the remedy at law for any such breach may be inadequate. The Company therefore agrees that, in the event of any such breach or threatened breach, the holder of this Warrant shall be entitled, in addition to all other available remedies, to seek an injunction restraining any breach, without the necessity of showing economic loss and without any bond or other security being required.

          15. TRANSFER. This Warrant may not be offered for sale, sold, transferred or assigned in whole or in part without compliance with all applicable federal and state securities laws by the transferor and transferee (including the delivery of investment representation letters and legal opinions reasonably satisfactory to the Company, if such are requested by the Company). Subject to the provisions of this Warrant with respect to compliance with the Securities Act of 1933, as amended, applicable state securities laws and as may otherwise be required pursuant to the Securities Purchase Agreement, title to this Warrant may be transferred by endorsement (by the Holder executing the Exercise Notice attached as Exhibit A hereto) and delivery in the same manner as a negotiable instrument transferable by endorsement and delivery.

          16. PRINCIPAL MARKET REGULATION. The Company shall not be obligated to issue any shares of Common Stock upon exercise of this Warrant and the Holder shall not have the right to receive upon exercise of this Warrant any shares of Common Stock, if the issuance of such shares of Common Stock would exceed the aggregate number of shares of Common Stock which the Company may issue upon exercise of this Warrant without breaching the Company's obligations under the rules or regulations of the Principal Market, except that such limitation shall not apply in the event that the Company (A) obtains the approval of its stockholders as required by the applicable rules of the Principal Market for issuances of shares of Common Stock in excess of such amount or (B) obtains a written opinion from outside counsel to the Company that such approval is not required. In the event that the Company is prohibited from issuing any Warrant Shares for which an Exercise Notice has been received as a result of the operation of this Section 16, the Company shall pay cash in exchange for cancellation of such Warrant Shares, at a price per Warrant Share equal to the difference between the Closing Sale Price and the Exercise Price as of the date of the attempted exercise.

          17. CERTAIN DEFINITIONS. For purposes of this Warrant, the following terms shall have the following meanings:

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                    (a) “Black Scholes Value” means the value of this Warrant based on the Black and Scholes Option Pricing Model obtained from the “OV” function on Bloomberg determined as of the day immediately following the public announcement of the applicable Fundamental Transaction and reflecting (i) a risk-free interest rate corresponding to the U.S. Treasury rate for a period equal to the remaining term of this Warrant as of such date of request and (ii) an expected volatility of 60%.

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

                    (c) “Common Stock” means (i) the Company’s common stock, par value $0.001 per share, and (ii) any capital stock into which such Common Stock shall have been changed or any capital stock resulting from a reclassification of such Common Stock.

                    (d) “Closing Sale Price” means, for any security as of any date, the last closing trade price for such security on the Principal Market, or, if the Principal Market begins to operate on an extended hours basis and does not designate the closing trade price then the last trade price of such security prior to 4:00:00 p.m., New York time, as reported by Bloomberg, or, if the Principal Market is not the principal securities exchange or trading market for such security, the last trade price of such security on the principal securities exchange or trading market where such security is listed or traded, or if the foregoing do not apply, the last trade price of such security in the over-the-counter market on the electronic bulletin board for such security as reported by Bloomberg, or, if no last trade price is reported for such security by Bloomberg, the average of the bid prices, or the ask prices, respectively, of any market makers for such security as reported in the “pink sheets” by Pink Sheets LLC (formerly the National Quotation Bureau, Inc.). If the Closing Sale Price cannot be calculated for a security on a particular date on any of the foregoing bases, the Closing Sale Price of such security on such date shall be the fair market value as mutually determined by the Company and the Holder. If the Company and the Holder are unable to agree upon the fair market value of such security, then such dispute shall be resolved pursuant to Section 13. All such determinations to be appropriately adjusted for any stock dividend, stock split, stock combination or other similar transaction during the applicable calculation period.

                    (e) “Organic Change” means that the Company shall, directly or indirectly, in one or more related transactions, (i) consolidate or merge with or into (whether or not the Company is the surviving corporation) another Person or Persons, or (ii) sell, assign, transfer, convey or otherwise dispose of all or substantially all of the properties or assets of the Company to another Person, or (iii) allow another Person to make a purchase, tender or exchange offer that is accepted by the holders of more than the 50% of the outstanding shares of Common Stock (not including any shares of Common Stock held by the Person or Persons making or party to, or associated or affiliated with the Persons making or party to, such purchase, tender or exchange offer), or (iv) consummate a stock purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with another Person whereby such other Person acquires more than the 50% of the outstanding shares of Common Stock (not including any shares of Common Stock held by the other Person or other Persons making or party to, or associated or affiliated with the other

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Persons making or party to, such stock purchase agreement or other business combination), (v) reorganize, recapitalize or reclassify its Common Stock or (vi) any “person” or “group” (as these terms are used for purposes of Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended) is or shall become the “beneficial owner” (as defined in Rule 13d-3 under the Securities Exchange Act of 1934, as amended), directly or indirectly, of 50% of the aggregate ordinary voting power represented by issued and outstanding Common Stock.

                    (f) “Person” means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization, any other entity and a government or any department or agency thereof.

                    (g) “Principal Market” means The NASDAQ Capital Market.

                    (h) “Registration Rights Agreement” means that certain registration rights agreement between the Company and the Purchasers.

                    (i) “Trading Day” means any day on which the Common Stock are traded on the Principal Market, or, if the Principal Market is not the principal trading market for the Common Stock, then on the principal securities exchange or securities market on which the Common Stock are then traded; provided that “Trading Day” shall not include any day on which the Common Stock are scheduled to trade on such exchange or market for less than 4.5 hours or any day that the Common Stock are suspended from trading during the final hour of trading on such exchange or market (or if such exchange or market does not designate in advance the closing time of trading on such exchange or market, then during the hour ending at 4:00:00 p.m., New York time).

                    (j) “VWAP” means, for any security as of any date, the dollar volume-weighted average price for such security on the Principal Market during the period beginning at 9:30:01 a.m., New York City time, and ending at 4:00:00 p.m., New York City time, as reported by Bloomberg through its “Volume at Price” function or, if the foregoing does not apply, the dollar volume-weighted average price of such security in the over-the-counter market on the electronic bulletin board for such security during the period beginning at 9:30:01 a.m., New York City time, and ending at 4:00:00 p.m., New York City time, as reported by Bloomberg, or, if no dollar volume-weighted average price is reported for such security by Bloomberg for such hours, the average of the highest closing bid price and the lowest closing ask price of any of the market makers for such security as reported in the “pink sheets” by Pink Sheets LLC (formerly the National Quotation Bureau, Inc.). If the Weighted Average Price cannot be calculated for such security on such date on any of the foregoing bases, the Weighted Average Price of such security on such date shall be the fair market value as mutually determined by the Company and the Required Holders. If the Company and the Required Holders are unable to agree upon the fair market value of the such security, then such dispute shall be resolved pursuant to Section 13 with the term “Weighted Average Price” being substituted for the term “Exercise Price.” All such determinations shall be appropriately adjusted for any share dividend, share split or other similar transaction during such period.

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          IN WITNESS WHEREOF, the Company has caused this Warrant to Purchase Common Stock to be duly executed as of the Issuance Date set out above.

VIEWPOINT CORPORATION
By:
	Name:
	Title:

EXHIBIT A

EXERCISE NOTICE

TO BE EXECUTED BY THE REGISTERED HOLDER TO EXERCISE THIS
WARRANT TO PURCHASE COMMON STOCK

VIEWPOINT CORPORATION

          The undersigned holder hereby exercises the right to purchase _____________________ of the shares of Common Stock (“Warrant Shares”) of Viewpoint Corporation, a Delaware corporation (the “Company”), evidenced by the attached Warrant to Purchase Common Stock (the “Warrant”). Capitalized terms used herein and not otherwise defined shall have the respective meanings set forth in the Warrant.

          1. Form of Exercise Price. The Holder intends that payment of the Exercise Price shall be made as:

_____________________	a “Cash Exercise” with respect to _____________________ Warrant Shares
_____________________	a “Cashless Exercise” with respect to _______________________ Warrant Shares.

          2. [Insert this paragraph (2) in the event that the Holder has not elected a Cashless Exercise in accordance with the terms of the Warrant as to all of the Warrant Shares to be issued pursuant hereto] Payment of Exercise Price. The holder is hereby delivering to the Company payment in the amount of $_________ representing the Aggregate Exercise Price for such Warrant Shares in accordance with the terms of the Warrant.

          3. Delivery of Warrant Shares. The Company shall deliver to the holder _________ Warrant Shares in accordance with the terms of the Warrant.

Date: _______________ __, ______

   Name of Registered Holder

By:
	Name:
	Title:

EX-99.1

Exhibit 99.1

Contact:	Press:	Or	Investor Relations:
	Tatyana Yemets		Viewpoint Corporation
	Viewpoint Corporation		212-201-0800
	212-201-0821		ir@viewpoint.com
	tyemets@viewpoint.com

VIEWPOINT TO ACQUIRE SPRINGBOX
AN AUSTIN-BASED INTERACTIVE MARKETING FIRM
Acquisition Part of the Unicast Internet Marketing Technology Strategy

New York, NY – October 19, 2007– Viewpoint Corporation (NASDAQ: VWPT), a leading Internet marketing technology company, today announced that it has reached an agreement to acquire Springbox, an Austin-based interactive marketing firm with expertise in digital web marketing and creative solutions. Springbox provides web based marketing solutions for numerous global clients including AMD, Callaway, Dell, Disney, Hoovers, Lance Armstrong, and Siemens. Springbox is expected to generate $6.0 million in gross revenue in the calendar year 2007.

“The acquisition of Springbox aligns perfectly with our strategy to enhance our web based product offerings, in order to meet the escalating demand for creative digital and Internet solutions that we see from our clients,” said Patrick Vogt, President and Chief Executive Officer of Viewpoint. “Springbox also provides a robust content management technology that we will leverage across the Unicast ad platform to create a unique, integrated offering that combines digital marketing with our Premium Rich Media (PRM) ad content and delivery capabilities. This combined offering is the next step in the evolution of our business, and will better position us to take advantage of the tremendous market opportunity for integrated online marketing solutions.”

“We are very excited to join forces with Viewpoint, because they truly have complementary Internet marketing technology solutions,” said Adam Moore, co-founder of Springbox. “Our companies share a strong customer-centric focus, and together we will provide a full range of digital marketing services and technologies.”

Total consideration for the transaction is expected to be an initial consideration of approximately $5.5 million in a combination of stock and cash plus an EBITDA-based earnout. The acquisition is expected to close in the fourth quarter of 2007.

In conjunction with this acquisition, Viewpoint has entered into a private placement whereby both new and existing institutional investors have purchased 15,714,285 Viewpoint Corporation common shares at a price of $0.70 per share and warrants to purchase an additional 4,714,285 shares of common stock at an exercise price of

$0.84 per share for aggregate proceeds of $11 million. Merriman Curhan Ford & Co acted as financial advisor to the Company in the transaction.

About Viewpoint

Viewpoint is a leading Internet marketing technology company, offering Internet marketing and online advertising solutions through the powerful combination of its proprietary visualization technology and a full range of campaign management services including TheStudio, Viewpoint's creative services group; Unicast, Viewpoint's online advertising group; and KeySearch, Viewpoint's search engine marketing consulting practice. Viewpoint's technology and services are behind the online presence of some of the world's most esteemed brands, including AOL, GE, Sony, and Toyota. More information on Viewpoint can be found at www.viewpoint.com.

The company has approximately 100 employees principally at its headquarters in New York City, with additional offices in Los Angeles, CA, Austin, TX and London, England.

About Springbox

Founded in 2004, Springbox (springbox.com) is an interactive marketing services agency that provides best-in-class digital marketing strategy and creative. The company generates great results through a combination of smart, big-picture strategy and a clear focus on execution. Springbox helps clients both large and small translate their corporate brand standards into digital assets that build the brand, keep customers happy and drive new business. The founders of Springbox have built interactive teams and programs for many global clients, including AMD, Circuit City, Capital Sports and Entertainment, Dell, Hoovers, Lance Armstrong, MetroPCS, Rackspace, Toshiba, and Siemens. Preeminent partnerships ensure Springbox delivers seamlessly integrated, comprehensive campaigns that cover the broad spectrum of marketing communications. Springbox is headquartered in Austin, Texas.

Forward Looking Statements

This press release contains "forward-looking" statements as that term is defined in the Private Securities Litigation Reform Act of 1995 and similar expressions that reflect Viewpoint's current expectations about its future performance. These statements and expressions are subject to risks, uncertainties and other factors that could cause Viewpoint's actual performance to differ materially from those expressed in, or implied by, these statements and expressions. Such risks, uncertainties and factors include those described in Viewpoint's filings and reports on file with the Securities and Exchange Commission.

Copyright © 2007 Viewpoint Corporation. All Rights Reserved. Viewpoint, Unicast, TheStudio by Viewpoint and KeySearch are trademarks or registered trademarks of Viewpoint Corporation.

The names of actual companies and products mentioned herein may be the trademarks of their respective owners.

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