SECURITIES PURCHASE AGREEMENT

EXHIBIT 10.1


SECURITIES PURCHASE AGREEMENT

This Securities Purchase Agreement (this "AGREEMENT") is dated as of
February 28, 2007, among MPLC, Inc., a Delaware corporation (the "COMPANY"), and
each purchaser identified on the signature pages hereto (each, including its
successors and assigns, a "PURCHASER" and collectively the "PURCHASERS").

WHEREAS, subject to the terms and conditions set forth in this
Agreement and pursuant to Section 4(2) of the Securities Act of 1933, as amended
(the "SECURITIES ACT"), and Rule 506 promulgated thereunder, the Company desires
to issue and sell to each Purchaser, and each Purchaser, severally and not
jointly, desires to purchase from the Company, securities of the Company as more
fully described in this Agreement.

NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in
this Agreement, and for other good and valuable consideration the receipt and
adequacy of which are hereby acknowledged, the Company and each Purchaser agree
as follows:


ARTICLE I
DEFINITIONS

1.1 DEFINITIONS. In addition to the terms defined elsewhere in this
Agreement: (a) capitalized terms that are not otherwise defined herein have the
meanings given to such terms in the Certificate of Designation (as defined
herein), and (b) the following terms have the meanings set forth in this Section
1.1:

"ACTION" shall have the meaning ascribed to such term in
Section 3.1(j).

"AFFILIATE" means any Person that, directly or indirectly
through one or more intermediaries, controls or is controlled by or is
under common control with a Person, as such terms are used in and
construed under Rule 144 under the Securities Act. With respect to a
Purchaser, any investment fund or managed account that is managed on a
discretionary basis by the same investment manager as such Purchaser
will be deemed to be an Affiliate of such Purchaser.

"APPROVED CHARTER AMENDMENT" means, pursuant to Delaware
General Corporation Law, the affirmative vote by the shareholders of
the Corporation to amend the articles or certificate of incorporation
of the Corporation (i) to effect a 1:300 reverse stock split of the
Common Stock and (ii) to increase the number of authorized shares of
Common Stock of the Corporation from 75,000,000 to 100,000,000.

"BUSINESS DAY" means any day except Saturday, Sunday, any day
which shall be a federal legal holiday in the United States or any day
on which banking institutions in the State of New York are authorized
or required by law or other governmental action to close.

"CERTIFICATE OF DESIGNATION" means the Certificate of
Designation to be filed prior


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to the Closing by the Company with the Secretary of State of Delaware,
in the form of EXHIBIT A attached hereto.

"CLOSING" means the closing of the purchase and sale of the
Securities pursuant to Section 2.1.

"CLOSING DATE" means the Trading Day when all of the
Transaction Documents have been executed and delivered by the
applicable parties thereto, and all conditions precedent to (i) the
Purchasers' obligations to pay the Subscription Amount and (ii) the
Company's obligations to deliver the Securities have been satisfied or
waived.

"COMMISSION" means the Securities and Exchange Commission.

"COMMON STOCK" means the common stock of the Company, par
value $0.01 per share, and any other class of securities into which
such securities may hereafter be reclassified or changed into.

"COMMON STOCK EQUIVALENTS" means any securities of the Company
or the Subsidiaries which would entitle the holder thereof to acquire
at any time Common Stock, including, without limitation, any debt,
preferred stock, rights, options, warrants or other instrument that is
at any time convertible into or exercisable or exchangeable for, or
otherwise entitles the holder thereof to receive, Common Stock.

"COMPANY COUNSEL" means Stubbs Alderton & Markiles, LLP, with
offices located at 15260 Ventura Boulevard, 20th Floor, Sherman Oaks,
CA 91403.

"CONVERSION PRICE" shall have the meaning ascribed to such
term in the Certificate of Designation.

"DISCLOSURE SCHEDULES" shall have the meaning ascribed to such
term in Section 3.1.

"EFFECTIVE DATE" means the date that the initial Registration
Statement filed by the Company pursuant to the Registration Rights
Agreement is first declared effective by the Commission.

"ELECTION OF DIRECTORS" means, pursuant to Delaware General
Corporation Law, (i) the affirmative vote by the shareholders of the
Corporation to elect Ray Musci, Drew Larner and Burton Katz as members
of the board of directors of the Corporation and (ii) the seating of
such persons as directors.

"ESCROW AGENT" means Signature Bank, a New York State
chartered bank, with offices located at 950 Third Avenue, New York, New
York 10022.

"ESCROW AGREEMENT" means the Escrow Deposit Agreement entered
into prior to the date hereof, by and among the Company and the Escrow
Agent pursuant to which the Purchasers, shall deposit Subscription
Amounts with the Escrow Agent to be applied to


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the transactions contemplated hereunder.

"EVALUATION DATE" shall have the meaning ascribed to such term
in Section 3.1(r).

"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.

"EXEMPT ISSUANCE" means the issuance of (a) shares of Common
Stock or options to employees, officers or directors of the Company
pursuant to any stock or option plan duly adopted for such purpose by a
majority of the non-employee members of the Board of Directors of the
Company or a majority of the members of a committee of non-employee
directors established, (b) securities upon the exercise or exchange of
or conversion of any Securities issued hereunder and/or other
securities exercisable or exchangeable for or convertible into shares
of Common Stock issued and outstanding on the date of this Agreement,
provided that such securities have not been amended since the date of
this Agreement to increase the number of such securities or to decrease
the exercise, exchange or conversion price of such securities, and (c)
securities issued pursuant to acquisitions or strategic transactions
approved by a majority of the disinterested directors of the Company,
provided that any such issuance shall only be to a Person which is,
itself or through its subsidiaries, an operating company in a business
synergistic with the business of the Company and in which the Company
receives benefits in addition to the investment of funds, but shall not
include a transaction in which the Company is issuing securities
primarily for the purpose of raising capital or to an entity whose
primary business is investing in securities.

"FWS" means Feldman Weinstein & Smith LLP, with offices
located at 420 Lexington Avenue, Suite 2620, New York, New York
10170-0002.

"GAAP" shall have the meaning ascribed to such term in Section
3.1(h).

"INDEBTEDNESS" shall have the meaning ascribed to such term in
Section 3.1(aa).

"INTELLECTUAL PROPERTY RIGHTS" shall have the meaning ascribed
to such term in Section 3.1(o).

"LEGEND REMOVAL DATE" shall have the meaning ascribed to such
term in Section 4.1(c).

"LIENS" means a lien, charge, security interest, encumbrance,
right of first refusal, preemptive right or other restriction.

"MATERIAL ADVERSE EFFECT" shall have the meaning ascribed to
such term in Section 3.1(b).

"MATERIAL PERMITS" shall have the meaning ascribed to such
term in Section 3.1(m).


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"MAXIMUM RATE" shall have the meaning ascribed to such term in
Section 5.17.

"PERSON" means an individual or corporation, partnership,
trust, incorporated or unincorporated association, joint venture,
limited liability company, joint stock company, government (or an
agency or subdivision thereof) or other entity of any kind.

"PLACEMENT AGENT" means Sanders Morris Harris, with offices
located at 527 Madison Avenue, 14th Floor, New York, New York 10022.

"PREFERRED STOCK" means the maximum of 8,334 shares of the
Company's Series D 8% Convertible Preferred Stock issued hereunder,
having the rights, preferences and privileges set forth in the
Certificate of Designation, in the form of EXHIBIT A hereto.

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

"REGISTRATION RIGHTS AGREEMENT" means the Registration Rights
Agreement, dated the date hereof, among the Company and the Purchasers,
in the form of EXHIBIT B attached hereto.

"REGISTRATION STATEMENT" means a registration statement
meeting the requirements set forth in the Registration Rights Agreement
and covering the resale of the Underlying Shares by each Purchaser as
provided for in the Registration Rights Agreement.

"REQUIRED APPROVALS" shall have the meaning ascribed to such
term in Section 3.1(e).

"REQUIRED MINIMUM" means, as of any date, the maximum
aggregate number of shares of Common Stock then issued or potentially
issuable in the future pursuant to the Transaction Documents, including
any Underlying Shares issuable upon conversion in full of all shares of
Preferred Stock.

"RULE 144" means Rule 144 promulgated by the Commission
pursuant to the Securities Act, as such Rule may be amended from time
to time, or any similar rule or regulation hereafter adopted by the
Commission having substantially the same effect as such Rule.

"SEC REPORTS" shall have the meaning ascribed to such term in
Section 3.1(h).

"SECURITIES" means the Preferred Stock and the Underlying
Shares.

"SECURITIES ACT" means the Securities Act of 1933, as amended,
and the rules and regulations promulgated thereunder.


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"SHAREHOLDER APPROVAL" means, collectively, the Approved
Charter Amendment and the Election of Directors.

"SHORT SALES" means all "short sales" as defined in Rule 200
of Regulation SHO under the Exchange Act (but shall not be deemed to
include the location and/or reservation of borrowable shares of Common
Stock).

"STATED VALUE" means $1,200.00 per share of Preferred Stock.

"SUBSCRIPTION AMOUNT" shall mean, as to each Purchaser, the
aggregate amount to be paid for the Preferred Stock purchased hereunder
as specified below such Purchaser's name on the signature page of this
Agreement and next to the heading "Subscription Amount," in United
States dollars and in immediately available funds.

"SUBSIDIARY" means any subsidiary of the Company as set forth
on SCHEDULE 3.1(A), and shall include, without limitation, New Motion,
Inc., a Delaware corporation.

"TRADING DAY" means a day on which the Common Stock is traded
on a Trading Market.

"TRADING MARKET" means the following markets or exchanges on
which the Common Stock is listed or quoted for trading on the date in
question: the American Stock Exchange, the Nasdaq Capital Market, the
Nasdaq Global Market, the Nasdaq Global Select Market, the New York
Stock Exchange or the OTC Bulletin Board.

"TRANSACTION DOCUMENTS" means this Agreement, the Certificate
of Designation, the Registration Rights Agreement and any other
documents or agreements executed in connection with the transactions
contemplated hereunder.

"UNDERLYING SHARES" means the shares of Common Stock issued
and issuable upon conversion of the Preferred Stock.

"VWAP" means, for any date, the price determined by the first
of the following clauses that applies: (a) if the Common Stock is then
listed or quoted on a Trading Market, the daily volume weighted average
price of the Common Stock for such date (or the nearest preceding date)
on the Trading Market on which the Common Stock is then listed or
quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30
a.m. (New York City time) to 4:02 p.m. (New York City time); (b) if the
OTC Bulletin Board is not a Trading Market, the volume weighted average
price of the Common Stock for such date (or the nearest preceding date)
on the OTC Bulletin Board; (c) if the Common Stock is not then quoted
for trading on the OTC Bulletin Board and if prices for the Common
Stock are then reported in the "Pink Sheets" published by Pink Sheets,
LLC (or a similar organization or agency succeeding to its functions of
reporting prices), the most recent bid price per share of the Common
Stock so reported; or (d) in all other cases, the


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fair market value of a share of Common Stock as determined by as
determined by the Board of Directors of the Corporation in good faith.


ARTICLE II
PURCHASE AND SALE

2.1 CLOSING. On the Closing Date, upon the terms and subject to the
conditions set forth herein, substantially concurrent with the execution and
delivery of this Agreement by the parties hereto, the Company agrees to sell,
and each Purchaser, severally and not jointly, agrees to purchase, up to an
aggregate of $10,000,800 of shares of Preferred Stock with an aggregate Stated
Value equal to such Purchaser's Subscription Amount. The aggregate number of
shares of Preferred Stock sold hereunder shall be up to 8,334. Each Purchaser
shall deliver to the Escrow Agent via wire transfer or a certified check of
immediately available funds equal to their Subscription Amount and the Company
shall deliver to each Purchaser its respective shares of Preferred Stock as
determined pursuant to Section 2.2(a) and the other items set forth in Section
2.2 issuable at the Closing. Upon satisfaction of the conditions set forth in
Sections 2.2 and 2.3, the Closing shall occur at the offices of FWS or such
other location as the parties shall mutually agree and the Company and the
Placement Agent shall deliver to the Escrow Agent the duly executed Escrow
Release Notice (as defined in the Escrow Agreement).

2.2 DELIVERIES.

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

(i) this Agreement duly executed by the Company;

(ii) a legal opinion of Company Counsel, in the form of
EXHIBIT C attached hereto;

(iii) a certificate evidencing a number of shares of
Preferred Stock equal to such Purchaser's
Subscription Amount divided by the Stated Value,
registered in the name of such Purchaser;

(iv) a certificate, executed by the Chief Executive
Officer or the Chief Financial Officer of the Company
certifying that, on the day immediately preceding the
date hereof, the Company holds cash and marketable
securities of an aggregate value that equals or
exceeds $10,000,000; and

(v) the Registration Rights Agreement duly executed by
the Company.

(b) On or before the Closing Date, each Purchaser shall deliver or
cause to be delivered to the Company the following:

(i) this Agreement duly executed by such Purchaser;


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(ii) such Purchaser's Subscription Amount by wire transfer
or certified check to the Escrow Agent; and

(iii) the Registration Rights Agreement duly executed by
such Purchaser.

2.3 CLOSING CONDITIONS.

(a) The obligations of the Company hereunder in connection with
the Closing are subject to the following conditions being met:

(i) the accuracy in all material respects when made and
on the Closing Date of the representations and
warranties of the Purchasers contained herein;

(ii) all obligations, covenants and agreements of the
Purchasers required to be performed at or prior to
the Closing Date shall have been performed;

(iii) the delivery by the Purchasers of the items set forth
in Section 2.2(b) of this Agreement; and

(iv) the Company shall have completed the acquisition of
New Motion, Inc., a Delaware corporation.

(b) The respective obligations of the Purchasers hereunder in
connection with the Closing are subject to the following
conditions being met:

(i) the accuracy in all material respects when made and
on the Closing Date of the representations and
warranties of the Company contained herein;

(ii) all obligations, covenants and agreements of the
Company required to be performed at or prior to the
Closing Date shall have been performed;

(iii) the delivery by the Company of the items set forth in
Section 2.2(a) of this Agreement;

(iv) the aggregate Subscription Amounts payable hereunder
shall equal or exceed $8,000,000;

(v) the Company shall have completed the acquisition of
New Motion, Inc., a Delaware corporation;

(vi) there shall have been no Material Adverse Effect with
respect to the Company since the date hereof; and

(vii) from the date hereof to the Closing Date, trading in
the Common Stock shall not have been suspended by the
Commission or the Company's


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principal Trading Market (except for any suspension
of trading of limited duration agreed to by the
Company, which suspension shall be terminated prior
to the Closing), and, at any time prior to the
Closing Date, trading in securities generally as
reported by Bloomberg L.P. shall not have been
suspended or limited, or minimum prices shall not
have been established on securities whose trades are
reported by such service, or on any Trading Market,
nor shall a banking moratorium have been declared
either by the United States or New York State
authorities nor shall there have occurred any
material outbreak or escalation of hostilities or
other national or international calamity of such
magnitude in its effect on, or any material adverse
change in, any financial market which, in each case,
in the reasonable judgment of each Purchaser, makes
it impracticable or inadvisable to purchase the
Preferred Stock at the Closing.


ARTICLE III
REPRESENTATIONS AND WARRANTIES

3.1 REPRESENTATIONS AND WARRANTIES OF THE COMPANY. Except as set forth
under the corresponding section of the disclosure schedules delivered to the
Purchasers concurrently herewith (the "DISCLOSURE Schedules"), which Disclosure
Schedules shall be deemed a part hereof and to qualify any representation or
warranty otherwise made herein to the extent of such disclosure, the Company
hereby makes the following representations and warranties to each Purchaser:

(a) SUBSIDIARIES. The Company has no direct or indirect
Subsidiaries other than those listed in the SEC Reports.
Except as disclosed in the SEC Reports, the Company owns,
directly or indirectly, all of the capital stock or other
equity interests of each Subsidiary free and clear of any
Liens, and all of the issued and outstanding shares of capital
stock or other equity interests of each Subsidiary are validly
issued and are fully paid, non-assessable and free of
preemptive and similar rights to subscribe for or purchase
securities. If the Company has no subsidiaries, all other
references to the Subsidiaries or any of them in the
Transaction Documents shall be disregarded.

(b) ORGANIZATION AND QUALIFICATION. The Company and each of the
Subsidiaries is an entity duly incorporated or otherwise
organized, validly existing and in good standing under the
laws of the jurisdiction of its incorporation or organization
(as applicable), with the requisite power and authority to own
or lease and use its properties and assets and to carry on its
business as currently conducted. Neither the Company nor any
Subsidiary is in violation or default of any of the provisions
of its respective certificate or articles of incorporation,
bylaws or other organizational or charter documents. Each of
the Company and the Subsidiaries is duly qualified to conduct
business and is in good standing as a foreign corporation or
other entity in each jurisdiction in which the nature of the
business conducted or property owned by it makes such
qualification necessary, except where the failure to be so
qualified or in good standing, as the case may be, could not
have or reasonably be expected to result in (i) a material
adverse effect on the legality, validity or enforceability of
any Transaction Document, (ii) a material adverse effect on
the results of operations, assets, business or


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condition (financial or otherwise) of the Company and the
Subsidiaries, taken as a whole, or (iii) a material adverse
effect on the Company's ability to perform in any material
respect on a timely basis its obligations under any
Transaction Document (any of (i), (ii) or (iii), a "MATERIAL
ADVERSE EFFECT") and no Proceeding has been instituted in any
such jurisdiction revoking, limiting or curtailing or seeking
to revoke, limit or curtail such power and authority or
qualification.

(c) AUTHORIZATION; ENFORCEMENT. The Company has the requisite
corporate power and authority to enter into and to consummate
the transactions contemplated by each of the Transaction
Documents and otherwise to carry out its obligations hereunder
and thereunder. The execution and delivery of each of the
Transaction Documents by the Company and the consummation by
it of the transactions contemplated hereby and thereby have
been duly authorized by all necessary action on the part of
the Company and no further action is required by the Company,
its board of directors or its stockholders in connection
therewith other than in connection with the Required Approvals
and the adoption of the Approved Charter Amendments. Each
Transaction Document has been (or upon delivery will have
been) duly executed by the Company and, when delivered in
accordance with the terms hereof and thereof, will constitute
the valid and binding obligation of the Company enforceable
against the Company in accordance with its terms except (i) as
limited by general equitable principles and applicable
bankruptcy, insolvency, reorganization, moratorium and other
laws of general application affecting enforcement of
creditors' rights generally, (ii) as limited by laws relating
to the availability of specific performance, injunctive relief
or other equitable remedies and (iii) insofar as
indemnification and contribution provisions may be limited by
applicable law.

(d) NO CONFLICTS. The execution, delivery and performance of the
Transaction Documents by the Company and the consummation by
the Company of the other transactions contemplated hereby and
thereby do not and will not: (i) conflict with or violate any
provision of the Company's or any Subsidiary's certificate or
articles of incorporation, bylaws or other organizational or
charter documents, (ii) conflict with, or constitute a default
(or an event that with notice or lapse of time or both would
become a default) under, result in the creation of any Lien
upon any of the properties or assets of the Company or any
Subsidiary, or give to others any rights of termination,
amendment, acceleration or cancellation (with or without
notice, lapse of time or both) of, any material agreement,
credit facility, debt or other instrument (evidencing a
Company or Subsidiary debt or otherwise) or other
understanding (as determined pursuant to Item 601(b)(10) of
Regulation SB) to which the Company or any Subsidiary is a
party or by which any property or asset of the Company or any
Subsidiary is bound or affected, or (iii) subject to the
Required Approvals, conflict with or result in a violation of
any law, rule, regulation, order, judgment, injunction, decree
or other restriction of any court or governmental authority to
which the Company or a Subsidiary is subject (including
federal and state securities laws and regulations), or by
which any property or asset of the Company or a Subsidiary is
bound or affected; except in the case of each of clauses (ii)
and (iii), such as could not have or reasonably be expected to
result in a Material Adverse Effect.


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(e) FILINGS, CONSENTS AND APPROVALS. The Company is not required
to obtain any consent, waiver, authorization or order of, give
any notice to, or make any filing or registration with, any
court or other federal, state, local or other governmental
authority or other Person in connection with the execution,
delivery and performance by the Company of the Transaction
Documents, other than (i) filings with the Commission
disclosing the transactions contemplated hereby, (ii) the
filing with the Commission of the Registration Statement,
(iii) the notice and/or application(s) (if any) to each
applicable Trading Market for the issuance and sale of the
Securities and the listing of the Underlying Shares for
trading thereon in the time and manner required thereby and
(iv) the filing of Form D with the Commission and such filings
as are required to be made under applicable state securities
laws (collectively, the "REQUIRED APPROVALS").

(f) ISSUANCE OF THE SECURITIES. The Securities are duly authorized
and, when issued and paid for in accordance with the
applicable Transaction Documents, will be duly and validly
issued, fully paid and nonassessable, free and clear of all
Liens imposed by the Company other than restrictions on
transfer provided for in the Transaction Documents. The
Underlying Shares, when issued in accordance with the terms of
the Transaction Documents, will be validly issued, fully paid
and nonassessable, free and clear of all Liens imposed by the
Company. The Company will reserve, following the adoption of
the Approved Charter Amendments, from its duly authorized
capital stock a number of shares of Common Stock for issuance
of the Underlying Shares at least equal to the Required
Minimum on the date hereof.

(g) CAPITALIZATION. The capitalization of the Company is as set
forth on SCHEDULE 3.1(G), which SCHEDULE 3.1(G) shall also
include the number of shares of Common Stock owned
beneficially, and of record, by Affiliates of the Company as
of the date hereof. The Company has not issued any capital
stock since its most recently filed periodic report under the
Exchange Act, other than pursuant to the exercise of employee
stock options under the Company's stock option plans, the
issuance of shares of Common Stock to employees pursuant to
the Company's employee stock purchase plan and pursuant to the
conversion or exercise of Common Stock Equivalents outstanding
as of the date of the most recently filed periodic report
under the Exchange Act. To the Company's knowledge, no Person
has any right of first refusal, preemptive right, right of
participation, or any similar right to participate in the
transactions contemplated by the Transaction Documents. Except
as a result of the purchase and sale of the Securities or
except for Common Stock Equivalents outstanding as of the date
of the most recently filed periodic report under the Exchange
Act, there are no outstanding options, warrants, scrip rights
to subscribe to, calls or commitments of any character
whatsoever relating to, or securities, rights or obligations
convertible into or exercisable or exchangeable for, or giving
any Person any right to subscribe for or acquire, any shares
of Common Stock, or contracts, commitments, understandings or
arrangements by which the Company or any Subsidiary is or may
become bound to issue additional shares of Common Stock or
Common Stock Equivalents. To the Company's knowledge, the
issuance and sale of the Securities will not obligate the
Company to issue shares of Common Stock or other securities to
any Person (other than the Purchasers) and will not result in
a right of any holder of Company securities to adjust the
exercise, conversion, exchange or reset price


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under any of such securities. All of the outstanding shares of
capital stock of the Company are validly issued, fully paid
and nonassessable, have been issued in compliance with all
federal and state securities laws, and none of such
outstanding shares was issued in violation of any preemptive
rights or similar rights to subscribe for or purchase
securities. Other than the adoption of the Approved Charter
Amendment, no further approval or authorization of any
stockholder, the Board of Directors of the Company or others
is required for the issuance and sale of the Securities. There
are no stockholders agreements, voting agreements or other
similar agreements with respect to the Company's capital stock
to which the Company is a party or, to the knowledge of the
Company, between or among any of the Company's stockholders.

(h) SEC REPORTS; FINANCIAL STATEMENTS. To the Company's knowledge,
the Company has filed all reports, schedules, forms,
statements and other documents required to be filed by the
Company under the Securities Act and the Exchange Act,
including pursuant to Section 13(a) or 15(d) thereof, for the
two years preceding the date hereof (or such shorter period as
the Company was required by law or regulation to file such
material) (the foregoing materials, including the exhibits
thereto and documents incorporated by reference therein, being
collectively referred to herein as the "SEC REPORTS") on a
timely basis or has received a valid extension of such time of
filing and has filed any such SEC Reports prior to the
expiration of any such extension. To the Company's knowledge,
as of their respective dates, the SEC Reports complied in all
material respects with the requirements of the Securities Act
and the Exchange Act, as applicable, and none of the SEC
Reports, when filed, contained any untrue statement of a
material fact or omitted to state a material fact required to
be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they
were made, not misleading. To the Company's knowledge, the
financial statements of the Company included in the SEC
Reports comply in all material respects with applicable
accounting requirements and the rules and regulations of the
Commission with respect thereto as in effect at the time of
filing. Such financial statements have been prepared in
accordance with United States generally accepted accounting
principles applied on a consistent basis during the periods
involved ("GAAP"), except as may be otherwise specified in
such financial statements or the notes thereto and except that
unaudited financial statements may not contain all footnotes
required by GAAP, and fairly present in all material respects
the financial position of the Company and its consolidated
Subsidiaries as of and for the dates thereof and the results
of operations and cash flows for the periods then ended,
subject, in the case of unaudited statements, to normal,
immaterial, year-end audit adjustments.

(i) MATERIAL CHANGES Since the date of the latest audited
financial statements included within the SEC Reports, except
as specifically disclosed in a subsequent SEC Report filed
prior to the date hereof, (i) there has been no event,
occurrence or development that has had or that could
reasonably be expected to result in a Material Adverse Effect,
(ii) the Company has not incurred any liabilities (contingent
or otherwise) other than (A) trade payables and accrued
expenses incurred in the ordinary course of business
consistent with past practice and (B) liabilities not required
to be reflected in the Company's financial statements pursuant
to GAAP or disclosed in filings


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made with the Commission, (iii) the Company has not altered
its method of accounting, (iv) the Company has not declared or
made any dividend or distribution of cash or other property to
its stockholders or purchased, redeemed or made any agreements
to purchase or redeem any shares of its capital stock and (v)
the Company has not issued any equity securities to any
officer, director or Affiliate, except pursuant to existing
Company stock option plans. The Company does not have pending
before the Commission any request for confidential treatment
of information. Except for the issuance of the Securities
contemplated by this Agreement or as set forth on SCHEDULE
3.1(I), no event, liability or development has occurred or
exists with respect to the Company or its Subsidiaries or
their respective business, properties, operations or financial
condition, that would be required to be disclosed by the
Company under applicable securities laws at the time this
representation is made that has not been publicly disclosed at
least 1 Trading Day prior to the date that this representation
is made.

(j) LITIGATION. There is no action, suit, inquiry, notice of
violation, proceeding or investigation pending or, to the
knowledge of the Company, threatened against or affecting the
Company, any Subsidiary or any of their respective properties
before or by any court, arbitrator, governmental or
administrative agency or regulatory authority (federal, state,
county, local or foreign) (collectively, an "ACTION") which
(i) adversely affects or challenges the legality, validity or
enforceability of any of the Transaction Documents or the
Securities or (ii) could, if there were an unfavorable
decision, have or reasonably be expected to result in a
Material Adverse Effect. Neither the Company nor any
Subsidiary, nor, to the Company's knowledge, any current
director or officer thereof (in his capacity as such), is or
has been the subject of any Action involving a claim of
violation of or liability under federal or state securities
laws or a claim of breach of fiduciary duty. There has not
been, and to the knowledge of the Company, there is not
pending or contemplated, any investigation by the Commission
involving the Company or, to the Company's knowledge, any
current director or officer of the Company (in his capacity as
such). The Commission has not issued any stop order or other
order suspending the effectiveness of any registration
statement filed by the Company or any Subsidiary under the
Exchange Act or the Securities Act.

(k) LABOR RELATIONS. No material labor dispute exists or, to the
knowledge of the Company, is imminent with respect to any of
the employees of the Company which could reasonably be
expected to result in a Material Adverse Effect. None of the
Company's or its Subsidiaries' employees is a member of a
union that relates to such employee's relationship with the
Company, and neither the Company or any of its Subsidiaries is
a party to a collective bargaining agreement, and the Company
and its Subsidiaries believe that their relationships with
their employees are good. No executive officer, to the
knowledge of the Company, is, or is now expected to be, in
violation of any material term of any employment contract,
confidentiality, disclosure or proprietary information
agreement or non-competition agreement, or any other contract
or agreement or any restrictive covenant, and the continued
employment of each such executive officer does not subject the
Company or any of its Subsidiaries to any liability with
respect to any of the foregoing matters. The Company and its
Subsidiaries are in compliance with all U.S. federal, state,
local and foreign laws and regulations relating to employment
and


12
<PAGE>


employment practices, terms and conditions of employment and
wages and hours, except where the failure to be in compliance
could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.

(l) COMPLIANCE. Neither the Company nor any Subsidiary (i) is in
default under or in violation of (and no event has occurred
that has not been waived that, with notice or lapse of time or
both, would result in a default by the Company or any
Subsidiary under), nor has the Company or any Subsidiary
received notice of a claim that it is in default under or that
it is in violation of, any indenture, loan or credit agreement
or any other agreement or instrument to which it is a party or
by which it or any of its properties is bound (whether or not
such default or violation has been waived), (ii) is in
violation of any order of any court, arbitrator or
governmental body having jurisdiction over the Company or its
properties or assets, or (iii) is or has been in violation of
any statute, rule or regulation of any governmental authority,
except in each case as could not have or reasonably be
expected to result in a Material Adverse Effect.

(m) REGULATORY PERMITS. The Company and the Subsidiaries possess
all certificates, authorizations and permits issued by the
appropriate federal, state, local or foreign regulatory
authorities necessary to conduct their respective businesses
as described in the SEC Reports, except where the failure to
possess such permits could not have or reasonably be expected
to result in a Material Adverse Effect ("MATERIAL PERMITS"),
and neither the Company nor any Subsidiary has received any
notice of proceedings relating to the revocation or
modification of any Material Permit.

(n) TITLE TO ASSETS. The Company and the Subsidiaries have good
and marketable title in fee simple to all real property owned
by them that is material to the business of the Company and
the Subsidiaries and good and marketable title in all personal
property owned by them that is material to the business of the
Company and the Subsidiaries, in each case free and clear of
all Liens, except for Liens as do not materially affect the
value of such property and do not materially interfere with
the use made and proposed to be made of such property by the
Company and the Subsidiaries and Liens for the payment of
federal, state or other taxes, the payment of which is neither
delinquent