Exhibit 10.2
Form of Subscription Agreement
BMP Sunstone Corporation
600 W. Germantown Pike
Suite 400
Plymouth Meeting, Pennsylvania 19462
Ladies and Gentlemen:
The undersigned (the “Investor”) hereby confirms and agrees with you as follows:

1.   The subscription terms set forth herein (this “Subscription”) are made as
of the date set forth below between BMP Sunstone Corporation, a Delaware
corporation (the “Company”), and the Investor.   2.   As of the Closing (as
defined below) and subject to the terms and conditions hereof, the Company and
the Investor agree that the Investor will purchase from the Company and the
Company will issue and sell to the Investor such principal amount of 12.5%
Subordinated Convertible Notes due July 1, 2011 (the “Notes”) of the Company as
is set forth on the signature page hereto (the “Signature Page”). The Investor
acknowledges that the offering is not a firm commitment underwriting and that
the Closing will not occur unless the Company has received Subscriptions for
Notes with an aggregate principal amount for all such Notes of at least
$6,000,000.   3.   The completion of the purchase and sale of the Notes shall
occur at a closing (the “Closing”) which, in accordance with Rule 15c6-1
promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange
Act”), is expected to occur on or about March 16, 2009. At the Closing, subject
to the requirements in paragraph 3(c) below, the Company shall cause The Bank of
New York Mellon, the trustee under the Company’s subordinated indenture (the
“Trustee”), to release to the Investor the principal amount of Notes being
purchased by the Investor and the aggregate purchase price for the Notes being
purchased by the Investor will be delivered by the Escrow Agent to the Company.

  (a)   Delivery of Funds. No later than one (1) business day after the
execution of this Agreement by the Investor and the Company, the Investor shall
remit by wire transfer the amount of funds equal to the aggregate purchase price
for the Notes being purchased by the Investor to the following account (the
“Escrow Account”) designated by the Company and the Placement Agent pursuant to
the terms of that certain Escrow Agreement (the “Escrow Agreement”) dated as of
October 9, 2008, as amended on March 12, 2009, by and among the Company, the
Placement Agent and the Escrow Agent”:

The Bank of New York
ABA #021-000-018
Beneficiary: GLA-111/565
Cust A/C #208878
Acct Name: BMP SUNSTONE SUBSCRIPTION ESC
ATTN: Odell Romeo/Sharon Chut-Khan
Such funds shall be held in an escrow account until the Closing and delivered by
the Escrow Agent on behalf of the Investors to the Company upon the
satisfaction, in the sole

 

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judgment of the Placement Agent, of the Company closing conditions set forth in
the Placement Agreement (as defined below). The Placement Agent shall have no
rights in or to any of the escrowed funds, unless the Placement Agent and the
Escrow Agent are notified in writing by the Company in connection with the
Closing that a portion of the escrowed funds shall be applied to the Placement
Fee (as defined below). The Company and the Investor agree to indemnify and hold
the Escrow Agent harmless from and against any and all losses, costs, damages,
expenses and claims (including, without limitation, court costs and reasonable
attorneys fees) (“Losses”) arising under this Section 3 or otherwise with
respect to the funds held in escrow pursuant hereto or arising under the Escrow
Agreement, unless such Losses resulted directly from the willful misconduct or
gross negligence of the Escrow Agent.

  (b)   Delivery of Notes. At least one (1) business day prior to the Closing,
the Company shall cause the Trustee to deliver the Notes (the “Certificates”)
issued in the name of the Investor or its nominee. Simultaneously with the
delivery to the Company by the Escrow Agent of the funds held in escrow pursuant
to Section 3(a) above, the Company shall direct the Trustee to deliver the Notes
to the Investor or its nominee.     (c)   Registered Investment Companies. If
the Investor is a registered investment company and is not settling its purchase
of Notes pursuant to Section 3(a) and (b) above, on or before the Closing Date,
the Company shall cause the Trustee to deliver the Notes purchased by such
Investor to the account and/or at the address designated by such Investor, and
upon receipt by such Investor of such Notes, such Investor shall wire, in
immediately available funds, the Purchase Amount for such Notes to an account
designated by the Company.

4.   The offering and sale of the Notes are being made pursuant to the
Registration Statement and the Prospectus (as such terms are defined below). The
Investor acknowledges that the Company intends to enter into subscriptions,
which the Company represents will be in substantially the same form as this
Subscription, with certain other investors and intends to offer and sell (the
“Offering”) Notes with an aggregate offering price of up to $8,000,000 pursuant
to the Registration Statement and Prospectus. The Company may accept or reject
this Subscription or any one or more other subscriptions with other investors in
its sole discretion.   5.   The Company has filed or shall file with the
Securities and Exchange Commission (the “Commission”) a prospectus (the “Base
Prospectus”) and a final prospectus supplement (the “Prospectus Supplement” and
together with the Base Prospectus, the “Prospectus”) with respect to the
registration statement (File No. 333-156958) reflecting the Offering, including
all amendments thereto, the exhibits and any schedules thereto, the documents
otherwise deemed to be a part thereof or included therein by the rules and
regulations of the Commission (the “Rules and Regulations”), and any
registration statement relating to the Offering and filed pursuant to Rule
462(b) under the Rules and Regulations (collectively, the “Registration
Statement”), in conformity with the Securities Act of 1933, as amended (the
“Securities Act”), including Rule 424(b) thereunder. The Investor hereby
confirms that it has had full access to the term sheet summarizing the terms and
conditions of the offering (including this form of Subscription) (the “Free
Writing Prospectus”), the Base Prospectus and the Company’s periodic reports and
other information incorporated by reference therein, and was able to read,
review, download and print such materials.

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6.   The Company has entered into a Placement Agency Agreement (the “Placement
Agreement”), dated March 13, 2009 with Philadelphia Brokerage Corporation (the
“Placement Agent”), which will act as the Company’s Placement Agent with respect
to the Offering and receive a fee (the “Placement Fee”) in connection with the
sale of the Notes. The Placement Agreement contains the representations and
warranties of the Company set forth in Exhibit I hereto. The Company
acknowledges and agrees that the Investor may rely on the representations and
warranties made by it to the Placement Agent in Section 2 of the Placement
Agreement to the same extent as if such representations and warranties had been
incorporated in full herein and made directly to the Investor. Capitalized terms
used, but not otherwise defined, herein shall have the meanings ascribed to such
terms in the Placement Agreement.   7.   The obligations of the Company and the
Investor to complete the transactions contemplated by this Subscription shall be
subject to the following:

  (a)   The Company’s obligation to issue and sell the Notes to the Investor
shall be subject to: (i) the acceptance by the Company of this Subscription (as
may be indicated by the Company’s execution of the Signature Page hereto),
(ii) the receipt by the Company of the purchase price for the Notes being
purchased hereunder as set forth on the Signature Page and (iii) the accuracy of
the representations and warranties made by the Investor and the fulfillment of
those undertakings of the Investor to be fulfilled prior to the Closing Date.  
  (b)   The Investor’s obligation to purchase the Notes will be subject (i) the
Placement Agent not having terminated the Placement Agreement pursuant to the
terms thereof, (ii) the representations and warranties set forth in Exhibit I
hereto being true and correct and (iii) the conditions to closing in the
Placement Agreement having been satisfied or waived.

8.   The Company hereby makes the following representations, warranties and
covenants to the Investor:

  (a)   The Company has the requisite corporate power and authority to enter
into and to consummate the transactions contemplated by this Subscription and
otherwise to carry out its obligations hereunder. The execution and delivery of
this Subscription by the Company and the consummation by it of the transactions
contemplated hereunder have been duly authorized by all necessary action on the
part of the Company. This Subscription has been duly executed by the Company
and, when delivered in accordance with the terms hereof, will constitute the
valid and binding obligation of the Company enforceable against the Company in
accordance with its terms, except as may be limited by any bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance or other similar
laws affecting the enforcement of creditors’ rights generally or by general
principles of equity, regardless of whether such enforceability is considered in
a proceeding in equity or at law.     (b)   The Company shall make such filings
and notices in the manner and time required by the Commission with respect to
the transactions contemplated hereby. The Company shall not identify the
Investor by name in any press release or public filing, or otherwise publicly
disclose the Investor’s name, without the Investor’s prior written consent,
unless required by law or the rules and regulations of any self-regulatory
organization which the Company or its securities are subject.

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  (c)   The Company shall reimburse the Investor an amount equal to $15,000 for
costs incurred in the Investor’s supplemental and follow-up due diligence
efforts related to the purchase of the Notes. Further, the Company shall
reimburse the Investor for the first $15,000 of those legal fees incurred by the
Investor solely related to the purchase of the Notes.

9.   The Investor hereby makes the following representations, warranties and
covenants to the Company:

  (a)   The Investor represents that (i) it has had full access to the Base
Prospectus and the Issuer Free Writing Prospectus, as well as the Company’s
periodic reports and other information incorporated by reference therein, prior
to or in connection with its receipt of this Subscription, (ii) it is
knowledgeable, sophisticated and experienced in making, and is qualified to
make, decisions with respect to investments in securities representing an
investment decision like that involved in the purchase of the Notes, and
(iii) it does not have any agreement or understanding, directly or indirectly,
with any person or entity to distribute any of the Notes.     (b)   The Investor
has the requisite power and authority to enter into this Subscription and to
consummate the transactions contemplated hereby. The execution and delivery of
this Subscription by the Investor and the consummation by it of the transactions
contemplated hereunder have been duly authorized by all necessary action on the
part of the Investor. This Subscription has been executed by the Investor and,
when delivered in accordance with the terms hereof, will constitute a valid and
binding obligation of the Investor enforceable against the Investor in
accordance with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors’ and contracting parties’ rights generally and except as
enforceability may be subject to general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law).
    (c)   The Investor understands that nothing in this Subscription or any
other materials presented to the Investor in connection with the purchase and
sale of the Notes constitutes legal, tax or investment advice. The Investor has
consulted such legal, tax and investment advisors as it, in its sole discretion,
has deemed necessary or appropriate in connection with its purchase of Notes.  
  (d)   Neither the Investor nor any Person acting on behalf of, or pursuant to
any understanding with or based upon any information received from, the Investor
has, directly or indirectly, engaged in any transactions in the securities of
the Company (including without limitation, any Short Sales involving the
Company’s securities) since the earlier to occur of (i) the time that the
Investor was first contacted by the Placement Agent or the Company with respect
to the transactions contemplated hereby and (ii) the date that is the tenth
(10th) trading day prior to the date the Investor executes this Subscription.
“Short Sales” include, without limitation, all “short sales” as defined in
Rule 200 promulgated under Regulation SHO under the Exchange Act, whether or not
against the box, and all types of direct and indirect stock pledges, forward
sale contracts, options, puts, calls, short sales, swaps, “put equivalent
positions” (as defined in Rule 16a-1(h) under the Exchange Act) and similar
arrangements (including on a total return basis), and sales and other
transactions through non-U.S. broker dealers or foreign regulated brokers. The
Investor covenants that neither it, nor any Person acting on behalf of, or
pursuant to any understanding with or based upon any information received from,
the Investor will

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      engage in any transactions in the securities of the Company (including
without limitation, any Short Sales involving the Company’s securities) prior to
the time that the transactions contemplated by this Subscription are publicly
disclosed.

  (e)   The Investor represents that, except as set forth below, (i) it has had
no position, office or other material relationship within the past three years
with the Company or persons known to it to be affiliates of the Company, (ii) it
is not, and it has no direct or indirect affiliation or association with, any
FINRA member or an Associated Person (as such term is defined under the FINRA
Membership and Registration Rules Section 1011) as of the date the Investor
executes this Subscription, and (iii) neither it nor any group of investors (as
identified in a public filing made with the Commission) of which it is a member,
acquired, or obtained the right to acquire, 20% or more of the Common Stock (or
securities convertible or exercisable for Common Stock) or the voting power of
the Company on a post-transaction basis. Exceptions:       (If no exceptions,
write “none.” If left blank, response will be deemed to be “none.”)     (f)  
The Investor, if outside the United States, will comply with all applicable laws
and regulations in each foreign jurisdiction in which it purchases, offers,
sells or delivers Notes or has in its possession or distributes any offering
material, in all cases at its own expense.

10.   Notwithstanding any investigation made by any party to this Subscription,
all covenants, agreements, representations and warranties made by the Company
and the Investor herein will survive the execution of this Subscription, the
delivery to the Investor of the Notes being purchased and the payment therefor.
  11.   This Subscription may not be modified or amended except pursuant to an
instrument in writing signed by the Company and the Investor and acknowledged by
the Placement Agent.   12.   In case any provision contained in this
Subscription should be invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein will not in any way be affected or impaired thereby.   13.   This
Subscription will be governed by, and construed in accordance with, the internal
laws of the Commonwealth of Pennsylvania, without giving effect to the
principles of conflicts of law that would require the application of the laws of
any other jurisdiction.   14.   This Subscription may be executed in one or more
counterparts (delivery of which may be by facsimile or as “pdf” or similar
attachments to an electronic transmission), each of which will constitute an
original, but all of which, when taken together, will constitute but one
instrument, and will become effective when one or more counterparts have been
signed by each party hereto and delivered to the other parties.   15.   The
Investor acknowledges and agrees that such Investor’s receipt of the Company’s
counterpart to this Subscription shall constitute written confirmation of the
Company’s sale of Notes to such Investor.   16.   In the event that the
Placement Agreement is terminated by the Placement Agent pursuant to the terms
thereof, this Subscription shall terminate without any further action on the
part of the parties hereto.

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INVESTOR SIGNATURE PAGE
Subscription for Principal Amount of
12.5% Subordinated Convertible Notes due July 1, 2011:
$                                        
Please confirm that the foregoing correctly sets forth the agreement between us
by signing in the space provided below for that purpose.
Dated as of: March ___, 2009
INVESTOR

         
By:
       
 
 
 
   
Print Name:
       
 
 
 
   
Title:
       
 
 
 
   

         
Name in which Notes are to be registered:
 
 
   

         
Mailing Address:
       
 
 
 
   

         
Taxpayer Identification Number:
       
 
 
 
   

Manner of Settlement: As described in Section 3 of this Subscription
Agreed and Accepted this                      day of March 2009:
BMP SUNSTONE CORPORATION

         
By:
       
 
 
 
   
Title:
       
 
 
 
   

Acknowledged this                      day of March 2009:
PHILADELPHIA BROKERAGE CORPORATION

         
By:
       
 
 
 
   
Title:
       
 
 
 
   

The sale of the Notes purchased hereunder was made pursuant to a registration
statement or in a transaction in which a final prospectus would have been
required to have been delivered in the absence of Rule 172 promulgated under the
Securities Act.

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Exhibit I to Subscription Agreement
[Representations and Warranties of Company from Placement Agency Agreement]
Unless otherwise defined herein, capitalized terms shall have the meanings
assigned to such terms in the Placement Agency Agreement, dated as of March 13,
2009, between the Company and the Placement Agent.

  (a)   Filing and Effectiveness of Registration Statement. The Company has
filed, in conformity with the requirements of the Securities Act of 1933, as
amended (the “Securities Act”), and the published rules and regulations
thereunder (the “Securities Act Rules and Regulations”) adopted by the
Securities and Exchange Commission (the “Commission”), a registration statement
on Form S-3 (No. 333-156958), relating to the Notes and the offering thereof
from time to time in accordance with Rule 415(a)(1)(x) of the Securities Act
Rules and Regulations, and such amendments thereof as may have been required to
date.     (b)   Registration Statement and Prospectus; Certain Defined Terms.
The Company meets the requirements for use of Form S-3 under the Securities Act
and has complied with the requirements of Rule 415 with respect to the
Registration Statement (as hereafter defined). The Registration Statement has
heretofore become effective under the Securities Act or, with respect to any
registration statement to be filed to register the offer and sale of Notes
pursuant to Rule 462(b) under the Securities Act, will be filed with the
Commission and become effective under the Securities Act no later than
10:00 p.m. New York City time on the date of determination of the public
offering price for the Notes. No stop order preventing or suspending the
effectiveness of the Registration Statement has been issued by the Commission,
and no proceedings for such purpose pursuant to Section 8A of the Securities Act
against the Company or related to the Offering have been instituted or are
pending or, to the Company’s knowledge, are contemplated or threatened by the
Commission, and any request received by the Company on the part of the
Commission for additional information has been complied with. As used in this
paragraph and elsewhere in this Agreement:

  (i)   “Registration Statement” means the registration statement, as amended at
the time of such registration statement’s effectiveness (the “Effective Time”),
including (i) all documents filed as a part thereof or incorporated or deemed to
be incorporated by reference therein, (ii) any information in the corresponding
Base Prospectus or a prospectus supplement filed with the Commission pursuant to
Rule 424(b) under the Securities Act, to the extent such information is deemed
pursuant to Rule 430B (“Rule 430B”) or Rule 430C (“Rule 430C”) under the
Securities Act to be a part thereof at the Effective Time. If the Company has
filed an abbreviated registration statement to register additional Notes
pursuant to Rule 462(b) under the Securities Act Rules and Regulations (the
“Rule 462(b) Registration Statement”), then any reference herein to the term
“Registration Statement” shall also be deemed to include such Rule 462(b)
Registration Statement.     (ii)   “Base Prospectus” means the Base Prospectus
included in the Registration Statement at the Effective Time.

 

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  (iii)   “Final Prospectus Supplement” means the final prospectus supplement,
relating to the Notes, filed by the Company with the Commission pursuant to Rule
424(b) under the Securities Act on or before the second business day after the
date hereof (or such earlier time as may be required under the Securities Act)
for use in connection with the offering and sale of the Notes that discloses the
public offering price and other final terms of the Notes.     (iv)  
“Prospectus” means the Final Prospectus Supplement together with the Base
Prospectus attached to or used with the Final Prospectus Supplement.     (v)  
“Time of Sale” with respect to any Investor, means the time of receipt and
acceptance (evidenced by execution by the Company) of an executed Subscription
Agreement (as defined below) from such Investor.     (vi)   “General Disclosure
Package” means the Base Prospectus, each “free-writing prospectus” (as defined
pursuant to Rule 405 under the Securities Act) listed on Schedule II hereto and
the pricing and other information as set forth on Exhibit C hereto (the “Pricing
Information”), all considered together.

  (c)   Compliance with Securities Act Requirements. The Registration Statement
complied when it became effective, complies as of the date hereof and, as
amended or supplemented, at the Time of Sale and at all times during which a
prospectus is required by the Securities Act to be delivered (whether physically
or through compliance with Rule 172 under the Securities Act or any similar
rule) in connection with any sale of Notes (the “Prospectus Delivery Period”),
will comply, in all material respects, with the requirements of the Securities
Act and the Securities Act Rules and Regulations; the Registration Statement did
not, as of the Effective Time, contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to make
the statements therein not misleading, provided, that the Company makes no
representations or warranty in this paragraph with respect to statements in or
omissions from the Registration Statement in reliance upon, and in conformity
with, written information furnished to the Company by or on behalf of the
Placement Agent specifically for inclusion therein, which information the
parties hereto agree is limited to the Placement Agent’s Information (as defined
in Section 8).     (d)   Contents of Prospectus. Each of the General Disclosure
Package, if any, and the Prospectus will comply, as of the date that it is filed
with the Commission, the date of its delivery to Investors, the Time of Sale and
at all times during the Prospectus Delivery Period, in all material respects,
with the requirements of the Securities Act (in the case of the Prospectus,
including, without limitation, Section 10(a) of the Securities Act); at no time
during the period that begins on the earlier of the date of the General
Disclosure Package, if any, and the date the Prospectus is filed with the
Commission and ends at the later of the Time of Sale and the end of the
Prospectus Delivery Period did or will any General Disclosure Package or the
Prospectus, as then amended or supplemented, include an untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, provided that the Company makes no representation or
warranty with respect to the Placement Agent’s Information.     (e)  
Incorporated Documents. Each of the documents incorporated or deemed to be
incorporated by reference in the Registration Statement, at the time such
document was filed with the Commission or at the time such document became
effective, as applicable,

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      complied, in all material respects, with the requirements of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”), and did not
include an untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.

  (f)   General Disclosure Package. The General Disclosure Package as of the
Time of Sale did not, and as of the Closing Date will not, contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided, that the
Company makes no representations or warranty in this paragraph with respect to
the Placement Agent’s Information. No statement of material fact included in the
Prospectus has been omitted from the General Disclosure Package and no statement
of material fact included in the General Disclosure Package that is required to
be included in the Prospectus has been omitted therefrom.     (g)   Distributed
Materials; Conflict with Registration Statement. Other than the Base Prospectus,
any Preliminary Prospectus and the Prospectus, the Company has not made, used,
prepared, authorized, approved or referred to and will not make, use, prepare,
authorize, approve or refer to any “written communication” (as defined in Rule
405 under the Securities Act) that constitutes an offer to sell or a
solicitation of an offer to buy the Notes (each such communication by the
Company or its agents and the Placement Agent (other than a communication
referred to in clause (i) below) an “Issuer Free Writing Prospectus”) other than
(i) any document not constituting a prospectus pursuant to Section 2(a)(10)(a)
of the Securities Act or Rule 134 under the Securities Act or (ii) the documents
listed on Schedule II hereto and other written communications approved in
advance by the Placement Agent. Each such Issuer Free Writing Prospectus, if
any, conformed or will conform in all material respects to the requirements of
the Securities Act and the Securities Act Rules and Regulations on the date of
first use, and the Company has complied or will comply with any filing
requirements applicable to such Issuer Free Writing Prospectus pursuant to the
Securities Act Rules and Regulations. Each Issuer Free Writing Prospectus, if
any, as of its issue date and at all subsequent times through the completion of
the offering and sale of the Notes did not, does not and will not include any
information that conflicted, conflicts or will conflict with the information
contained in the Registration Statement or the Prospectus, including any
document incorporated by reference therein and any prospectus supplement deemed
to be a part thereof that has not been superseded or modified.     (h)   Not an
Ineligible Issuer. (i) At the earliest time after the filing of the Registration
Statement that the Company or another offering participant made a bona fide
offer (within the meaning of Rule 164(h)(2) under the Securities Act) of the
Notes and (ii) at the date hereof, the Company was not and is not an “ineligible
issuer,” as defined in Rule 405 (“Rule 405”) under the Securities Act.     (i)  
Due Incorporation. The Company has been duly organized and is validly existing
as a corporation or other legal entity in good standing (or the foreign
equivalent thereof) under the laws of its jurisdiction of organization, with the
corporate power and authority to own its properties and to conduct its business
as currently being conducted and as described in the Registration Statement, the
Prospectus and the General Disclosure Package and is duly qualified to transact
business and is in good standing as a foreign corporation or other legal entity
in each other jurisdiction in which its ownership or leasing of property or the
conduct of its business requires such qualification, except

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      where the failure to be so qualified and in good standing or have such
power or authority (i) would not have, individually or in the aggregate, a
material adverse effect upon, the general affairs, business, operations,
properties, financial condition or results of operations of the Company and its
Subsidiaries (as defined below), taken as a whole, or (ii) impair in any
material respect the power or ability of the Company to perform its obligations
under this Agreement or to consummate any transactions contemplated by the
Agreement and the Subscription Agreements, including the issuance and sale of
the Notes (any such effect as described in clauses (i) or (ii), a “Material
Adverse Effect”).

  (j)   Subsidiaries. The Company has no significant subsidiaries (as such term
is defined in Rule 1-02 of Regulation S-X promulgated by the Commission) other
than as set forth on Schedule I hereto (each, a “Subsidiary” and collectively,
the “Subsidiaries”). Each Subsidiary has been duly organized and is validly
existing as a corporation or other legal entity in good standing (or the foreign
equivalent thereof) under the laws of its jurisdiction of organization, with the
corporate power and authority to own its properties and to conduct its business
as currently being conducted and as described in the Registration Statement, the
Prospectus and the General Disclosure Package. All of the issued and outstanding
capital stock (or similar equity interests) of each Subsidiary has been duly
authorized and validly issued and is fully paid and nonassessable and, except as
described in the General Disclosure Package, is owned by the Company, directly
or through subsidiaries, free from liens, encumbrances and defects.     (k)  
Due Authorization and Enforceability. The Company has the full right, power and
authority to enter into this Agreement, each of the Subscription Agreements and
the Escrow Agreement, and to perform and discharge its obligations hereunder and
thereunder; and each of this Agreement, the Escrow Agreement and each
Subscription Agreement has been duly authorized, executed and delivered by the
Company, and constitutes a valid, legal and binding obligation of the Company,
enforceable against the Company in accordance with its terms, except as rights
to indemnity hereunder may be limited by federal or state securities laws and
except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization or similar laws affecting the rights of creditors
generally and subject to general principles of equity.     (l)   The Notes. The
issuance of the Notes has been duly and validly authorized by the Company and,
when issued, delivered and paid for in accordance with the terms of this
Agreement and the Subscription Agreements, the Notes will constitute a legal,
valid and binding obligation of the Company enforceable against the Company in
accordance with their terms, except as the enforceability thereof may be limited
by bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the enforcement of creditors’ rights generally and by general
equitable principles. The Notes will conform in all material respects to the
description thereof contained in the General Disclosure Package and the
Prospectus.     (m)   Capitalization. As of the date hereof, the authorized
capital stock of the Company consists of (i) 75,000,000 shares of Common Stock
of which 41,364,534 shares are issued and outstanding, 3,184,183 shares are
reserved for issuance upon exercise of stock options outstanding under the
Company’s employee and director stock option plans, 1,429,589 shares are
reserved for grants of rights to purchase under the Company’s stock option
plans, and 1,792,693 shares are reserved for issuance under warrants; and
(ii) 20,000,000 shares of preferred stock, par value $.001 per share, none of
which are issued and outstanding. The authorized capital stock of the Company
conforms as to legal

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      matters to the description thereof contained in the Prospectus under the
caption “Description of common stock” (and any similar sections or information,
if any, contained in the General Disclosure Package). The issued and outstanding
shares of capital stock of the Company have been duly authorized and validly
issued, are fully paid and nonassessable, and have been issued in compliance
with all federal and state securities laws. None of the outstanding shares of
capital stock was issued in violation of any preemptive rights, rights of first
refusal or other similar rights to subscribe for or purchase or acquire any
securities of the Company. There are no authorized or outstanding shares of
capital stock, options, warrants, preemptive rights, rights of first refusal or
other rights to purchase, or equity or debt securities convertible into or
exchangeable for, any capital stock of the Company or any of its Subsidiaries
other than those described in the Prospectus and the General Disclosure Package.
The description of the Company’s stock option, stock bonus and other stock plans
or arrangements, and the options or other rights granted thereunder, as
described in the Prospectus and the General Disclosure Package, accurately and
fairly present the information required to be shown with respect to such plans,
arrangements, options and rights. All shares of Common Stock which may be issued
upon the conversion of the Notes (the “Conversion Shares”), upon issuance in
accordance with the terms of the Notes, will be duly authorized, validly issued,
fully paid and non-assessable. The Company has taken and shall continue to take
all such actions as may be required to ensure that the Company shall at all
times have authorized and reserved a sufficient number of shares of Common Stock
to provide for the conversion of the Notes into Conversion Shares.

  (n)   No Conflict. The execution, delivery and performance by the Company of
this Agreement, the Subscription Agreements and the Escrow Agreement and the
consummation of the transactions contemplated hereby and thereby, including the
issuance and sale by the Company of the Notes, will not (i) conflict with or
result in a breach or violation of, or constitute a default under (nor
constitute any event which with notice, lapse of time or both would result in
any breach or violation of or constitute a default under), give rise to any
right of termination or other right or the cancellation or acceleration of any
right or obligation or loss of a benefit under, or give rise to the creation or
imposition of any lien, encumbrance, security interest, claim or charge upon any
property or assets of the Company or any Subsidiary pursuant to any indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument to
which the Company or any Subsidiary is a party or by which any of them or any of
their respective properties may be bound or to which any of the property or
assets of the Company or any of its Subsidiaries is subject, (ii) result in any
violation of the provisions of the charter or by-laws (or analogous governing
instrument, as applicable) of the Company or any Subsidiary, or (iii) result in
any violation of any law, statute, rule, regulation, judgment, order or decree
of any court or governmental agency or body, domestic or foreign, having
jurisdiction over the Company or its Subsidiaries or any of their properties or
assets, except, in the case of each of clauses (i) and (iii) above, for any such
conflict, breach, violation, default, lien, charge or encumbrance that would
not, individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.     (o)   No Consents Required. No approval, authorization,
consent or order of or filing, qualification or registration with, any court or
governmental agency or body, foreign or domestic, which has not been made,
obtained or taken and is not in full force and effect, is required in connection
with the execution, delivery and performance of this Agreement, the Subscription
Agreements and the Escrow Agreement by the Company, the issuance and sale of the
Notes or the consummation by the Company of the

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      transactions contemplated hereby or thereby other than (i) as may be
required under the Securities Act or the Exchange Act, (ii) any necessary
qualification of the Notes under the securities or blue sky laws of the various
jurisdictions in which the Notes are being offered by the Placement Agent,
(iii) under the rules and regulations of the Financial Industry Regulatory
Authority (“FINRA”) or (iv) The Nasdaq Global Market in connection with the
distribution of the Notes by the Placement Agent.

  (p)   Registration Rights. Except as described in the due diligence materials
provided by the Company to the Placement Agent or as otherwise described in the
Registration Statement, the Prospectus and the General Disclosure Package, there
are no contracts, agreements or understandings between the Company and any
person granting such person the right (other than rights which have been waived
in writing in connection with the transactions contemplated by this Agreement or
otherwise satisfied) to require the Company to register any securities with the
Commission.     (q)   [Intentionally Omitted].     (r)   Independent
Accountants. Grant Thornton, Hong Kong, whose reports on the audited
consolidated financial statements of the Company and the Subsidiaries are
incorporated by reference in the Registration Statement, the Prospectus and the
General Disclosure Package, are independent public accountants with respect to
the Company as required by the Securities Act, and the applicable published
Securities Act Rules and Regulations thereunder and Rule 3600T of the Public
Company Accounting Oversight Board (“PCAOB”).     (s)   Commission Reports.
Since December 31, 2006, the Company has timely filed all reports, schedules,
forms, statements and other documents required to be filed by it with the
Commission pursuant to the reporting requirements of the Exchange Act (all of
the foregoing filed prior to the date hereof and all exhibits included therein
and financial statements and schedules thereto and documents (other than
exhibits) incorporated by reference therein, being hereinafter referred to
herein as the “Exchange Act Filings”). As of their respective dates, the
Exchange Act Filings complied in all material respects with the requirements of
the Exchange Act or the Securities Act, as the case may be, and the Securities
Act Rules and Regulations or rules and regulations of the Commission promulgated
under the Exchange Act (the “Exchange Act Rules and Regulations”), as the case
may be, applicable to the Exchange Act Filings.     (t)   Financial Statements.
The consolidated financial statements of the Company, together with the related
schedules and notes thereto, set forth or incorporated by reference in the
Registration Statement, the Prospectus and the General Disclosure Package,
comply in all material respects with the applicable requirements of the
Securities Act and the Exchange Act, as applicable, and present fairly in all
material respects (i) the financial condition of the Company and the
Subsidiaries, taken as a whole, as of the dates indicated and (ii) the
consolidated results of operations, stockholders’ equity and changes in cash
flows of the Company and the Subsidiaries, taken as a whole, for the periods
therein specified; and such financial statements and related schedules and notes
thereto have been prepared in conformity with United States generally accepted
accounting principles, consistently applied throughout the periods involved
(except as otherwise stated therein and subject, in the case of unaudited
financial statements, to the absence of footnotes and normal year-end
adjustments). There are no other financial statements (historical or pro forma)
that are required to be included or incorporated by reference in the
Registration Statement, the Prospectus or the General Disclosure Package.

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  (u)   Absence of Material Changes. Subsequent to the respective dates as of
which information is given in the Registration Statement, the Prospectus and the
General Disclosure Package, and except as may be otherwise stated or
incorporated by reference in the Registration Statement, the Prospectus and the
General Disclosure Package, (i) there has not been any change in the capital
stock of the Company (except for changes in the number of outstanding shares of
Common Stock of the Company due to the issuance of shares upon the exercise or
conversion of securities exercisable for, or convertible into, shares of Common
Stock outstanding on the date hereof) or long-term debt of the Company or any of
its Subsidiaries or any dividend or distribution of any kind declared, set aside
for payment, paid or made by the Company on any class of capital stock;
(ii) there has not been any material adverse change or development that would
result in a Material Adverse Effect; and (iii) neither the Company nor any of
its Subsidiaries have entered or will enter into any transaction or agreement,
not in the ordinary course of business, that is material to the Company and its
Subsidiaries taken as a whole or incurred or will incur any liability or
obligation, direct or contingent, not in the ordinary course of business, that
is material to the Company and its Subsidiaries taken as a whole.     (v)  
Legal Proceedings. There are no legal or governmental actions, suits, claims or
proceedings pending to which the Company or any Subsidiary is or would be a
party or of which any of their respective properties is or would be subject at
law or in equity, which are required to be described in the Registration
Statement, the General Disclosure Package or the Prospectus or a document
incorporated by reference therein and are not so described therein, or which,
singularly or in the aggregate, if resolved adversely to the Company or any
Subsidiary, would reasonably be likely to result in a Material Adverse Effect.
To the Company’s knowledge, no such proceedings are threatened or contemplated
by governmental authorities or threatened by others.     (w)   No Violation.
Neither the Company nor any Subsidiary is in breach or violation of or in
default (nor has any event occurred which with notice, lapse of time or both
would result in any breach or violation of, or constitute a default) (i) under
the provisions of its charter or bylaws (or analogous governing instrument, as
applicable) or (ii) in the performance or observance of any term, covenant,
obligation, agreement or condition contained in any indenture, mortgage, deed of
trust, bank loan or credit agreement or other evidence of indebtedness, or any
license, lease, contract or other agreement or instrument to which the Company
or any Subsidiary is a party or by which any of them or any of their properties
may be bound or affected, or (iii) in the performance or observance of any
statute, law, rule, regulation, ordinance, judgment, order or decree of any
court, regulatory body, administrative agency, governmental body, arbitrator or
other authority having jurisdiction over the Company, the Subsidiaries or any of
their respective properties, as applicable, except, with respect to clauses
(ii) and (iii) above, to the extent any such contravention has been waived or
would not result in a Material Adverse Effect.     (x)   Permits. The Company
and each Subsidiary has made all filings, applications and submissions required
by, and owns or possesses all approvals, licenses, certificates, certifications,
clearances, consents, exemptions, marks, notifications, orders, permits and
other authorizations issued by, the appropriate federal, state or foreign
regulatory authorities necessary to conduct its business as described in the
General Disclosure Package (collectively, “Permits”), except for such Permits
which the failure to obtain would not have a Material Adverse Effect (the
“Immaterial Permits”), and is in compliance with the terms and conditions of all
such Permits other than the Immaterial Permits (the “Required Permits”) except
for such failure to comply that would not have a

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      Material Adverse Effect. Neither the Company nor any Subsidiary has
received notice of any proceedings relating to revocation or modification of,
any such Required Permit, which, individually or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, would have a Material
Adverse Effect.

  (y)   Not an Investment Company. Neither the Company nor any Subsidiary is an
“investment company” or an “affiliated person” of, or “promoter” or “principal
underwriter” for, an “investment company,” as such terms are defined in the
Investment Company Act of 1940, as amended (the “Investment Company Act”), and,
after giving effect to the offering and sale of the Notes and the application of
the proceeds thereof as described in the General Disclosure Package and the
Prospectus, neither the Company nor any Subsidiary will an “investment company”
or an “affiliated person” of, or “promoter” or “principal underwriter” for, an
“investment company,” as such terms are defined in the Investment Company Act.  
  (z)   No Price Stabilization. Neither the Company nor any Subsidiary nor, to
the Company’s knowledge, any of their respective officers, directors, affiliates
or controlling persons has taken or will take, directly or indirectly, any
action designed to or that might be reasonably expected to cause or result in,
or which has constituted or which might reasonably be expected to constitute the
stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Notes.     (aa)   Good Title to Property.
The Company and each Subsidiary has good and valid title to all property
(whether real or personal) described in the General Disclosure Package as being
owned by each of them, in each case free and clear of all liens, claims,
security interests, other encumbrances or defects (collectively, “Liens”),
except such as are described in the Prospectus and the General Disclosure
Package or those that would not have a Material Adverse Effect. All of the
property described in the General Disclosure Package as being held under lease
by the Company or any Subsidiary is held thereby under valid, subsisting and
enforceable leases, without any liens, restrictions, encumbrances or claims,
except those that would not have a Material Adverse Effect or do not materially
interfere with the use made and proposed to be made of such property by the
Company and the Subsidiaries.     (bb)   Intellectual Property Rights. Except as
set forth in the Registration Statement, the Prospectus and the General
Disclosure Package, the Company and the Subsidiaries own or possess the right to
use all patents, trademarks, trademark registrations, service marks, service
mark registrations, trade names, copyrights, licenses, inventions, software,
databases, know-how, Internet domain names, trade secrets and other unpatented
and/or unpatentable proprietary or confidential information, systems or
procedures, and other intellectual property (collectively, “Intellectual
Property”) necessary to carry on their respective businesses as currently
conducted, and as proposed to be conducted and described in the General
Disclosure Package and the Prospectus except where the failure to own or possess
the right to use would not have a Material Adverse Effect, and the Company is
not aware of any claim to the contrary or any challenge by any other person to
the rights of the Company and the Subsidiaries with respect to the foregoing
except for those that would not have a Material Adverse Effect. The Intellectual
Property licenses described in the General Disclosure Package and the Prospectus
are valid, binding upon, and enforceable by or against the parties thereto in
accordance to its terms. The Company and each Subsidiary has complied in all
material respects with, and is not in breach nor has received any asserted or
threatened claim of breach of, any Intellectual

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      Property license described in the General Disclosure Package and the
Prospectus except for such breaches or asserted or threatened claims of breach
that would not have a Material Adverse Effect, and the Company has no knowledge
of any breach or anticipated breach by any other person to any Intellectual
Property license. To the knowledge of the Company, the Company’s and each
Subsidiary’s businesses as now conducted and as proposed to be conducted as set
forth in the Registration Statement, the Prospectus and the General Disclosure
Package do not and will not infringe or conflict with any patents, trademarks,
service marks, trade names, copyrights, trade secrets, licenses or other
Intellectual Property or franchise right of any person. The Company has not
received written notice of any material claim against the Company or any
Subsidiary alleging the infringement by the Company or any of its Subsidiary of
any patent, trademark, service mark, trade name, copyright, trade secret,
license in or other intellectual property right or franchise right of any
person. The Company and each Subsidiary has taken all reasonable steps to
protect, maintain and safeguard its rights in all Intellectual Property. The
consummation of the transactions contemplated by this Agreement will not result
in the loss or impairment of or payment of any additional amounts with respect
to, nor require the consent of any other person in respect of, the Company’s or
any of Subsidiary’s right to own, use, or hold for use any of the Intellectual
Property as owned, used or held for use in the conduct of the businesses as
currently conducted. The Company and each Subsidiary has duly and properly filed
or caused to be filed with the United States Patent and Trademark Office (the
“PTO”) and applicable foreign and international patent authorities all patent
applications owned by the Company and the Subsidiaries (the “Company Patent
Applications”). To the knowledge of the Company, the Company and each Subsidiary
has complied with the PTO’s duty of candor and disclosure for the Company Patent
Applications and has made no material misrepresentation in the Company Patent
Applications. The Company is not aware of any information material to a
determination of patentability regarding the Company Patent Applications not
called to the attention of the PTO or similar foreign authority. The Company is
not aware of any information not called to the attention of the PTO or similar
foreign authority that would preclude the grant of a patent for the Company
Patent Applications. The Company has no knowledge of any information that would
preclude the Company, or as applicable, any Subsidiary, from having clear title
to the Company Patent Applications.

  (cc)   No Labor Disputes. No labor problem or dispute with the employees of
the Company exists, or, to the Company’s knowledge, is threatened or imminent,
which would reasonably be expected to result in a Material Adverse Effect. The
Company is not aware that any key employee or significant group of employees of
the Company plans to terminate employment with the Company.     (dd)   Taxes.
The Company and each Subsidiary (i) has timely filed all necessary federal,
state, local and foreign income and franchise tax returns (or timely filed
applicable extensions therefore) that have been required to be filed and (ii) is
not in default in the payment of any taxes which were payable pursuant to said
returns or any assessments with respect thereto, other than any which the
Company or any Subsidiary is contesting in good faith and for which adequate
reserves have been provided.     (ee)   ERISA. The Company has fulfilled its
obligations, if any, under the minimum funding standards of Section 302 of the
Employee Retirement Income Security Act of 1974, as amended (“ERISA”) and the
regulations and published interpretations thereunder with respect to each “plan”
(as defined in Section 3(3) of ERISA and such regulations and

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      published interpretations) in which employees of the Company are eligible
to participate and each such plan is in compliance in all material respects with
the presently applicable provisions of ERISA and such regulations and published
interpretations. No “prohibited transaction” (as defined in Section 406 of
ERISA, or Section 4975 of the Internal Revenue Code of 1986, as amended from
time to time (the “Code”)) or “accumulated funding deficiency” (as defined in
Section 302 of ERISA) or any of the events set forth in Section 4043(b) of ERISA
(other than events with respect to which the thirty (30)-day notice requirements
under Section 4043 of ERISA has been waived) has occurred or could reasonably be
expected to occur with respect to any employee benefit plan of the Company or
any Subsidiary, which could, singularly or in the aggregate, have a Material
Adverse Effect.

  (ff)   Compliance with Environmental Laws. The Company and its Subsidiaries
(i) are in compliance with any and all applicable foreign, federal, state and
local laws, orders, rules, regulations, directives, decrees and judgments
relating to the use, treatment, storage and disposal of hazardous or toxic
substances or waste and protection of the environment which are applicable to
their businesses (“Environmental Laws”), (ii) have received and are in
compliance with all permits, licenses or other approvals required of them under
applicable Environmental Laws to conduct its business; and (iii) have not
received notice of any actual or potential liability for the investigation or
remediation of any disposal or release of hazardous or toxic substances or
wastes, pollutants or contaminants, except in the case of subsections (i),
(ii) and (iii) of this subsection (ff) as would not, individually or in the
aggregate, have a Material Adverse Effect.     (gg)   Insurance. The Company and
each Subsidiary maintains or is covered by insurance provided by recognized,
financially sound and reputable institutions with policies in such amounts and
covering such risks as is adequate for the conduct of its business and the value
of its properties and as is customary for companies engaged in similar
businesses in similar industries. All such insurance is fully in force on the
date hereof and will be fully in force as of the Closing Date. Neither the
Company nor any Subsidiary has any reason to believe that it will not be able to
renew its existing insurance coverage as and when such coverage expires or to
obtain similar coverage from similar insurers as may be necessary to continue
its business at a cost that would not have a Material Adverse Effect.     (hh)  
Accounting Controls. The Company and each Subsidiary maintains a system of
internal accounting controls sufficient to provide reasonable assurances that
(i) transactions are executed in accordance with management’s general or
specific authorization; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain accountability for assets; (iii) access to
assets is permitted only in accordance with management’s general or specific
authorization; and (iv) the recorded accountability for assets is compared with
existing assets at reasonable intervals and appropriate action is taken with
respect to any differences. Except as set forth in the General Disclosure
Package or the Prospectus, since January 1, 2008, (i) Grant Thornton, Hong Kong
has not identified any material weakness in the Company’s internal control over
financial reporting (whether or not remediated), and (ii) there has been no
change in the Company’s internal control over financial reporting that has
materially affected, or is reasonably likely to materially affect, the Company’s
internal control over financial reporting. The Company is not aware of any
fraud, whether or not material, that involves management or other employees who
have a role in the Company’s internal controls.

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  (ii)   Disclosure Controls. The Company has established, maintains and
evaluates “disclosure controls and procedures” (as such term is defined in
Rule 13a-15e and 15d-15e under the Exchange Act) that (i) are designed to ensure
that material information relating to the Company is made known to the Company’s
principal executive officer and its principal financial officer by others within
those entities, particularly during the periods in which the periodic reports
required under the Exchange Act are being prepared; (ii) have been evaluated for
effectiveness as of the end of the last fiscal period covered by the
Registration Statement; and (iii) are effective to perform the functions for
which they were established. Since the date of the most recent evaluation of
such disclosure controls and procedures, there have been no significant changes
in internal controls or in other factors that could significantly affect
internal controls, including any corrective actions with regard to significant
deficiencies and material weakness.     (jj)   Contracts; Off-Balance Sheet
Interests. There is no document, contract, permit or instrument, or off-balance
sheet transaction (including without limitation, any “variable interests” in
“variable interest entities,” as such terms are defined in Financial Accounting
Standards Board Interpretation No. 46) of a character required by the Securities
Act or the Securities Act Rules and Regulations to be described in the
Registration Statement or the General Disclosure Package or to be filed as an
exhibit to the Registration Statement or document incorporated by reference
therein, which is not described or filed as required. The contracts described in
the immediately preceding sentence to which the Company is a party have been
duly authorized, executed and delivered by the Company, constitute valid and
binding agreements of the Company, are enforceable against and by the Company in
accordance with the terms thereof and are in full force and effect on the date
hereof.     (kk)   No Undisclosed Relationships. No relationship, direct or
indirect, exists between or among the Company and any of its Subsidiaries on the
one hand and the directors, officers, stockholders, customers or suppliers of
the Company or any of its Subsidiaries or any of their affiliates on the other
hand, which is required to be described in the General Disclosure Package and
the Prospectus or a document incorporated by reference therein and which has not
been so described.     (ll)   Brokers Fees. Except as disclosed in the General
Disclosure Package, there are no contracts, agreements or understandings between
the Company and any person (other than this Agreement) that would give rise to a
valid claim against the Company, the Subsidiaries or the Placement Agent for a
brokerage commission, finder’s fee or other like payment in connection with the
offering and sale of the Notes.     (mm)   Forward-Looking Statements. No
forward-looking statements (within the meaning of Section 27A of the Securities
Act and Section 21E of the Exchange Act) contained in either the General
Disclosure Package or the Prospectus has been made or reaffirmed without a
reasonable basis or has been disclosed other than in good faith.     (nn)  
Nasdaq; Exchange Act Registration. The Common Stock is registered pursuant to
Section 12(b) or 12(g) of the Exchange Act and is listed on The Nasdaq Global
Market, and the Company has taken no action designed to terminate, or any action
reasonably likely to have the effect of terminating, the registration of the
Common Stock under the Exchange Act or delisting the Common Stock from The
Nasdaq Global Market, nor has the Company received any notification that the
Commission or Nasdaq is contemplating terminating such registration or listing.
The Company has complied in all material respects with the applicable
requirements of Nasdaq for the maintenance of inclusion of

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      the Common Stock on The Nasdaq Global Market. The Company has filed an
application to include the Notes on The Nasdaq Global Market.

  (oo)   Sarbanes-Oxley Act. The Company is, and to its knowledge all of the
Company’s directors or officers in their capacities as such are, in compliance
in all material respects with all applicable effective provisions of the
Sarbanes-Oxley Act of 2002, as amended and any related rules and regulations
promulgated by the Commission. Each of the principal executive officer and the
principal financial officer of the Company (or each former principal executive
officer of the Company and each former principal financial officer of the
Company as applicable) has made all certifications required by Sections 302 and
906 of the Sarbanes-Oxley Act with respect to all reports, schedules, forms,
statements and other documents required to be filed by it with the Commission.
For purposes of the preceding sentence, “principal executive officer” and
“principal financial officer” shall have the meanings given to such terms in the
Sarbanes-Oxley Act.     (pp)   Foreign Corrupt Practices. Neither the Company
nor, to the Company’s knowledge, any other person associated with or acting on
behalf of the Company, including without limitation any director, officer, agent
or employee of the Company or its Subsidiaries has, directly or indirectly,
during the last five years, while acting on behalf of the Company or on behalf
of the Company’s Subsidiaries after the Subsidiary was acquired by the Company
(i) used any corporate funds for unlawful contributions, gifts, entertainment or
other unlawful expenses relating to political activity or failed to disclose
fully any contribution in violation of law, (ii) made any payment to any federal
or state governmental officer or official, or other person charged with similar
public or quasi-public duties, other than payments required or permitted by the
laws of the United States or any jurisdiction thereof, (iii) violated or is in
violation of any provision of the U.S. Foreign Corrupt Practices Act of 1977, as
amended or (iv) made any bribe, rebate, payoff, influence payment, kickback or
other unlawful payment.     (qq)   Currency and Foreign Transactions. The
operations of the Company and its Subsidiaries are and have been conducted at
all times in compliance with applicable financial recordkeeping and reporting
requirements of the Currency and Foreign Transactions Reporting Act of 1970, as
amended, the money laundering statutes of all jurisdictions, the rules and
regulations thereunder and any related or similar rules, regulations or
guidelines, issued, administered or enforced by any governmental agency
(collectively, the “Money Laundering Laws”), except where a failure to comply
with such requirements, statutes, rules, regulations or guidelines could not
reasonably be expected to have a Material Adverse Effect, and no action, suit or
proceeding by or before any court or governmental agency, authority or body or
any arbitrator involving the Company or any of its Subsidiaries with respect to
the Money Laundering Laws is pending or, to the Company’s knowledge, threatened.
    (rr)   No Sanctioned Employees. Neither the Company nor any Subsidiary nor,
to the Company’s knowledge, any director, officer, agent, employee or affiliate
of the Company or its Subsidiaries is currently subject to any U.S. sanctions
administered by the Office of Foreign Assets Control of the U.S. Treasury
Department (“OFAC”); and the Company will not directly or indirectly use the
proceeds of the offering, or lend, contribute or otherwise make available such
proceeds to any subsidiary, joint venture partner or other person or entity, for
the purpose of financing the activities of any person currently subject to any
U.S. sanctions administered by OFAC.

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  (ss)   FINRA Affiliations. Except as described in the due diligence materials
provided by the Company to the Placement Agent, neither the Company nor any
Subsidiary nor any of their affiliates (within the meaning of FINRA
Rule 2720(b)(1)(a)) directly or indirectly controls, is controlled by, or is
under common control with, or is an associated person (within the meaning of
Article I, Section 1(e)(e) of the By-laws of FINRA) of, any member firm of
FINRA.     (tt)   Trading Market. Assuming the accuracy of the representations
of the Investors in the Subscription Agreements, no approval of the shareholders
of the Company under the rules and regulations of any trading market (including
Rule 4350 of The Nasdaq Global Marketplace Rules) is required for the Company to
issue and deliver to the Investors the Notes.

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