**SECTION 2****CLOSINGS**2.1 Initial Closing. The initial closing of the purchase and sale of the Notes andthe Warrants hereunder (the “***Initial Closing***”) shall be held at Jones Day, 555 California Street,San Francisco, California 94104 on the date of this Agreement or at such other place and date as ismutually agreeable to the Company and the Investors.2.2 Subsequent Closings. Subsequent to the Initial Closing, the Company may receiveadditional advances from each Investor in accordance with the terms of each Note, up to a maximumof the amount set forth opposite such Investor’s name beneath the caption “Total AggregatePrincipal Amount” (including the initial advance made at the Initial Closing). The closing of suchadditional advances shall be held at Jones Day, 555 California Street, San Francisco, California94104, on such date or at such other place as is mutually agreeable to the Company and theInvestors providing such additional advances (which each such date and place a “***Subsequent Closing***”and, together with the Initial Closing, a “***Closing***”).2.3 Conditions to Initial Closing. The several obligations of the Investors topurchase the Notes on the date of the Initial Closing shall be subject to the prior or concurrentsatisfaction of each of the conditions precedent set forth in this Section 2.3.(a) Security Agreements; Registration Rights Agreement. The Investors shall havereceived, each executed and delivered by the Company and the Investors or any Collateral Agent ontheir behalf (each, in form and substance satisfactory to the Investors): (i) a security agreement(the “***Security Agreement***”) under which the Company grants to the Investors (or any Collateral Agenton their behalf) a blanket security interest in its personal property; and (ii) a CollateralAssignment of Patents (the “***Patent Security Agreement***”) under which the Company grants to theInvestors a security interest in all of the Company’s United States patents and applications forUnited States patents. The Company’s existing Second Amended and Restated Registration RightsAgreement, dated March 12, 2009 (the “***Registration Rights Agreement***”), shall be amended (in a formsatisfactory to the Investors in their sole discretion) such that the Company shall grant to theInvestors registration rights in respect of the Common Stock issuable upon exercise of theWarrants.(b) Resolutions, etc. The Investors shall have received (i) a certificate, dated thedate of the Initial Closing, of an authorized signatory of the Company as of the date of theInitial Closing certifying (A) copies of the resolutions and other actions taken or adopted by theCompany authorizing the execution, delivery and performance of the Transaction Documents (asdefined below) to which the Company is a party (and confirming that no resolutions or actionscontrary to such resolutions or actions have been taken), and (B) the Certificate of Incorporationof the Company (which shall also be certified by the Secretary of State of the state in which theCompany is organized or formed) and Bylaws of the Company, (ii) a good standing certificate withrespect to the Company as of a date recently prior to the date of the Initial Closing from theSecretary of the State of the state in which the Company is organized or formed, and (iii) evidenceof qualification of the Company to do business in each jurisdiction where the nature of itsproperties of the conduct of its business requires it to be so qualified to do business as of a
 
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recent date and where the failure so to qualify could result in a Material Adverse Effect. Asused herein, the “***Transaction Documents***” means this Agreement, the Collateral Documents (as definedbelow), the Notes, the Warrants, the Registration Rights Agreement (as amended hereby) and anyother and all other certificates, documents, agreements and instruments delivered to the Investorsunder or in connection with this Agreement. “***Collateral Documents***” means, collectively,the Security Agreement, the Patent Security Agreement, and any other agreement pursuant to whichthe Company or any other Person provides a Lien on its assets in favor of the Investors inconnection herewith, and all filings, documents and agreements made or delivered pursuant thereto.(c) Collateral Matters. The Company shall have delivered to the Investors (or anyCollateral Agent on their behalf) each of the following: (i) confirmation that all UCC-1 financingstatements and other filings necessary or appropriate in the reasonable opinion of the Investors toperfect the security interests of the Investors (or any Collateral Agent on their behalf) in theCollateral have been accepted for filing; (ii) such lien and judgment searches as the Investorshave reasonably requested, and such termination statements or other documents, as may be necessaryto confirm that the Collateral is subject to no other security interests in favor of any Personsother than Permitted Liens; (iii) the certificates or instruments representing any pledgedCollateral, together with undated stock powers or endorsements, as the case may be, executed inblank, with respect thereto; (iv) if as of the date of the Initial Closing any Collateral islocated on any premises in which any third party has an interest, such bailee agreement,subordination agreement, landlord waiver agreement or collateral access agreement, as applicable,duly executed by such third party, as the Investors shall reasonably request; (v) evidence that allother actions necessary or appropriate in the reasonable opinion of the Investors to perfect andprotect the security interests in the Collateral have been taken, including such account controlagreements in favor of the Investors (or any Collateral Agent on their behalf) with respect to theCompany’s deposit and securities accounts, executed by each applicable bank, broker or othersecurities intermediary as the Investors shall reasonably request; and (vi) evidence ofsatisfactory insurance coverage, together with evidence that the Investors have been named (or anyCollateral Agent on their behalf has been named) as loss payee under all policies of propertyinsurance and as additional insured under all policies of liability insurance.(d) No Contest, etc. No claim, litigation, arbitration, governmental investigation,injunction, order, proceeding or inquiry shall be pending or threatened which: (i) seeks to enjoinor would be reasonably be expected to materially delay, impose material limitations on, orotherwise prevent the consummation of, or to recover any damages or obtain relief as a result of,the transactions contemplated by or in connection with the Transaction Documents; or (ii) wouldotherwise be adverse to any of the parties hereto in any material respect with respect to thetransactions contemplated hereby.(e) Certificate as to Completed Conditions, Warranties, No Default, etc. TheInvestors shall have received a certificate, dated as of the date of the Initial Closing, of anauthorized signatory of the Company to the effect that: (i) all conditions precedent set forth inthis Section 2 have been satisfied; (ii) all representations and warranties set forth inSection 4 are true and correct in all material respects (except for representations orwarranties already qualified by materiality, which shall be true and correct in all respects); and(iii) all representations and warranties set forth in any other documents entered into inconnection herewith are true andcorrect in all material respects (except for representations or warranties already qualifiedby materiality, which shall be true and correct in all respects).
 
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(f) Certificate as to Compliance with Requirements of Law. The Investors shall havereceived a certificate, dated as of the date of the Initial Closing, of an authorized signatory ofthe Company to the effect that the Company has obtained and maintains in full force and effect eachand every consent, approval, filing and registration by or with any Person, including, withoutlimitation, any Governmental Authority, necessary to authorize or permit the execution, delivery orperformance of the Transaction Documents, the issuance of the Notes and the Warrants (including anyapproval, consent, filing and registration required under Federal or State securities laws), thevalidity or enforceability thereof, or the consummation of the transactions contemplated by theTransaction Documents.(g) Due Diligence. The Investors shall have completed their business, legal, andcollateral due diligence with respect to the Company and shall be satisfied therewith.2.4 Conditions to Subsequent Closings. Each Investor shall not have any obligation toparticipate in any Subsequent Closing or otherwise to fund any amounts to the Company, other thanthe obligation of such Investor in respect of the Initial Closing, subject to Section 2.3. EachInvestor may participate in any Subsequent Closing in its sole discretion. Prior and as acondition to each Subsequent Closing, the Company shall deliver to the Investor participating insuch Subsequent Closing a certificate, dated as of the date of such Subsequent Closing, of anauthorized signatory of the Company confirming the matters set forth in Sections 2.3(e) and (f)(with all representations and warranties so confirmed to be deemed made as of the date of suchSubsequent Closing). The Investor participating in any Subsequent Closing also may request, as acondition to the closing of such Subsequent Closing, that the Company execute a CollateralAssignment of Copyrights or a Collateral Assignment of Trademarks, each in the form attached as anexhibit to the Security Agreement.2.5 Delivery.(a) Initial Closing. At the Initial Closing (i) each Investor shall deliver to theCompany a check or wire transfer of immediately available funds (pursuant to wire instructionspreviously provided by the Company to the Investors) in the amount set forth opposite suchInvestor’s name beneath the caption “Principal Amount of Initial Advance” on Schedule Aattached hereto, and (ii) the Company shall execute and deliver to each Investor a Note reflectingthe name of the Investor, the amount of the initial advance (which shall be set forth in the gridattached as Schedule 1 to such Note), and the date of the Initial Closing, together with theInvestor’s Warrant as contemplated by Section 1.2.(b) Subsequent Closings. At any Subsequent Closing, each Investor participating insuch Subsequent Closing shall deliver to the Company a check or wire transfer of immediatelyavailable funds (pursuant to wire instructions previously provided by the Company to the Investors)in the amount of such additional drawdown by the Company on such Note previously purchased by suchInvestor, and such Investor shall provide the Company with a copy of the updated grid in Schedule 1of the Note reflecting the additional drawdown made at such Subsequent Closing.
 
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**SECTION 3****REPRESENTATIONS AND WARRANTIES OF INVESTORS**Each Investor hereby represents and warrants to the Company that, as of the date of theInitial Closing, and each Subsequent Closing at which such Investor participates:3.1 Purchase for Own Account. Such Investor represents that it is acquiring theNotes, the Warrants and the Common Stock issuable upon exercise of the Warrants (collectively, the“***Securities***”) solely for investment for such Investor’s own account not as a nominee or agent, andnot with a view to the resale or distribution of any part thereof, and that such Investor has nopresent intention of selling, granting any participation in, or otherwise distributing the same.The acquisition by such Investor of any of the Securities shall constitute confirmation of therepresentation by such Investor that such Investor does not have any contract, undertaking,agreement or arrangement with any person to sell, transfer or grant participations to such personor to any third person, with respect to any of the Securities.3.2 Investment Experience. Either (i) such Investor or its officers, directors,managers or controlling persons has a preexisting personal or business relationship with theCompany or its officers, directors or controlling persons, or (ii) such Investor, by reason of itsown business and financial experience, has the capacity to protect its own interests in connectionwith the investment contemplated hereby. Such Investor represents that it is an investor insecurities of companies in the development stage and acknowledges that it is able to fend foritself, can bear the economic risk of its investment, and has such knowledge and experience infinancial or business matters that it is capable of evaluating the merits and risks of theinvestment in the Securities. Such Investor acknowledges that any investment in the Securitiesinvolves a high degree of risk, and represents that it is able, without materially impairing itsfinancial condition, to hold the Securities for an indefinite period of time and to suffer acomplete loss of its investment.3.3 Accredited Investor. Such Investor represents that it is an “accredited investor”within the meaning of Securities and Exchange Commission (“***SEC***”) Rule 501 of Regulation D, aspresently in effect and, for the purpose of Section 25102(f) of the California Corporations Code,it is excluded from the count of “purchasers” pursuant to Rule 260.102.13 thereunder.3.4 Restrictions on Transfer. Such Investor understands that the Securities arecharacterized as “restricted securities” under the federal securities laws inasmuch as they arebeing acquired from the Company in a transaction not involving a public offering and that undersuch laws and applicable regulations such securities may be resold without registration under theSecurities Act of 1933, as amended (the “***Act***”), only in certain limited circumstances. In thisconnection, such Investor represents that it is familiar with SEC Rule 144, as presently in effect,and understands the resale limitations imposed thereby and by the Act. SUCH INVESTOR UNDERSTANDSAND ACKNOWLEDGES HEREIN THAT AN INVESTMENT IN THE COMPANY’S SECURITIES INVOLVES AN EXTREMELY HIGHDEGREE OF RISK AND MAY RESULT IN A COMPLETE LOSS OF HIS, HER OR ITS INVESTMENT. Such Investorunderstands that the Securities have not been and will not be registered under
 
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 the Act (other thanas set forth in the Registration Rights Agreement) and have not beenand will not be registered or qualified in any state in which they are offered, and thus the Investor will notbe able to resell or otherwise transfer his, her or its Securities unless they are registered underthe Act and registered or qualified under applicable state securities laws, or an exemption fromsuch registration or qualification is available. Such Investor has no immediate need for liquidityin connection with this investment and does not anticipate that it will need to sell his, her orits Securities in the foreseeable future.3.5 Further Limitations on Disposition. Without in any way limiting therepresentations set forth above, such Investor further agrees not to make any disposition of all orany portion of the Securities (other than the shares of Common Stock issuable on exercise of theWarrants, during such time as a registration statement under the Act covering such shares is ineffect) unless and until the transferee has agreed in writing for the benefit of the Company to bebound by this Section 3 and (i) such Investor shall have notified the Company of the proposeddisposition and shall have furnished the Company with a detailed statement of the circumstancessurrounding the proposed disposition, and (ii) if requested by the Company, such Investor shallhave furnished the Company with an opinion of counsel reasonably satisfactory to the Company thatsuch disposition will not require registration of such Securities under the Act. Notwithstandingthe foregoing provision, no such registration statement or opinion of counsel shall be necessaryfor a transfer by such Investor that is a partnership or limited liability company to a partner ofsuch partnership or a member of such limited liability company or a retired partner of suchpartnership who retires after the date hereof or a retired member of such limited liability companywho retires after the date hereof, or to the estate of any such partner, retired partner, member orretired member or the transfer by gift, will or intestate succession by any partner or member tohis or her spouse or to the siblings, lineal descendants or ancestors of such partner or member orhis or her spouse, if the transferee agrees in writing to be subject to the terms hereof to thesame extent as if he or she were an original Investor hereunder.3.6 Legends. The Investor understands that the Securities, and any securities issuedin respect thereof or exchange therefor, may bear one or all of the following legends:(a) “THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THESECURITIES ACT OF 1933, AND HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR INCONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. NO SUCH SALE OR DISTRIBUTION MAY BE EFFECTEDWITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL IN A FORMSATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF1933.”(b) Any legend required by the Blue Sky laws of any state to the extent such laws areapplicable to the shares represented by the certificate so legended.
 
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**SECTION 4****REPRESENTATIONS AND WARRANTIES OF THE COMPANY**The Company hereby represents and warrants to each Investor that, as of the date of theInitial Closing and each Subsequent Closing and other than as disclosed in the Company’s publicfilings:4.1 Organization, Good Standing and Qualification; Licenses. The Company is dulyorganized, validly existing and in good standing under the laws of the jurisdiction of itsorganization and has all requisite power and authority, and holds all governmental licenses,permits, registrations and other approvals required under applicable law, to own and hold underlease its property and to carry on its business as now conducted and as proposed to be conducted,except where the failure to hold any such licenses, permits, registrations and other approvalscould not result in a Material Adverse Effect. The Company is qualified to do business in eachjurisdiction where the nature of its properties of the conduct of its business requires it to be soqualified to do business and where the failure so to qualify could result in a Material AdverseEffect.4.2 Authorization. All action on the part of the Company necessary for theauthorization, execution and delivery of this Agreement, the performance of all obligations of theCompany hereunder, and the authorization, issuance (or reservation for issuance), sale and deliveryof the Notes, the Warrants, and the shares of Common Stock underlying the Warrants, has been takenor will be taken prior to each Closing. The Company covenants and agrees that all shares of CommonStock which may be issued upon the exercise of the rights represented by the Warrants will, uponissuance, be duly authorized, validly issued, fully paid and nonassessable and free from allpreemptive rights of any stockholder and free of all taxes, liens and charges with respect to theissue thereof. The Company has reserved a sufficient number of shares of authorized but unissuedshares of Common Stock to provide for the exercise of the rights represented by the Warrants(assuming full vesting thereof). Each of the Transaction Documents to which the Company is a partyconstitutes the valid and legally binding obligation of the Company, enforceable against theCompany in accordance with its terms, except (i) as limited by applicable bankruptcy, insolvency,reorganization, moratorium and other laws of general application affecting enforcement ofcreditors’ rights generally, and (ii) as limited by laws relating to the availability of specificperformance, injunctive relief or other equitable remedies.4.3 Litigation. There is no action, suit, proceeding or investigation pending or, tothe Company’s knowledge, currently threatened against the Company that questions the validity ofthis Agreement, the right of the Company to enter into this Agreement, or to consummate thetransactions contemplated hereby, or that could reasonably be expected to result, eitherindividually or in the aggregate, in any Material Adverse Effect, nor is the Company aware thatthere is any basis for the foregoing. The Company is not a party or subject to the provisions ofany order, writ, injunction, judgment or decree of any court or Governmental Authority. There isno action, suit, proceeding or investigation by the Company currently pending or that the Companyintends to initiate.
 
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4.4 Absence of Required Consents; No Violations. No consent, approval, order orauthorization of, or registration, qualification, designation, declaration or filing with, anyGovernmental Authority on the part of the Company is required in connection with the consummationof the transactions contemplated by the Transaction Documents, except for such filing(s) pursuantto applicable state securities laws as may be necessary, which filings will be timely effectedafter the relevant Closing, and except for recordings or filings in connection with the perfectionof the Liens on the Collateral in favor of the Investors (or any Collateral Agent on their behalf).The Company is not in violation or default (i) of any provision of its Certificate ofIncorporation and Bylaws, or (ii) in any material respect of any instrument, judgment, order, writ,decree or contract to which it is a party or by which it is bound, or, to the best of itsknowledge, of any provision of any federal or state statute, rule or regulation which is, to thebest of the Company’s knowledge, applicable to the Company (including the Employee RetirementIncome Security Act of 1974, as amended, and any Environmental Laws). The execution, delivery andperformance of the Transaction Documents and the consummation of the transactions contemplatedthereby will not result in any such violation or be in conflict with or constitute, with or withoutthe passage of time and giving of notice, either a default under any such provision, instrument,judgment, order, writ, decree or contract or an event that results in the creation of any Lien uponany material assets of the Company or the suspension, revocation, impairment, forfeiture ornonrenewal of any material permit, license, authorization or approval applicable to the Company,its business or operations or any of its assets or properties. As used herein, “***EnvironmentalLaws***” means all applicable federal, state and local laws, rules, regulations, codes, ordinances,and the common law governing, regulating or otherwise affecting the environment or occupationalhealth and safety relating to exposures to Hazardous Materials, including the federal Clean AirAct, the federal Clean Water Act, the federal Resource Conservation and Recovery Act, the federalComprehensive Environmental Response, Compensation and Liability Act, the federal Toxic SubstancesControl Act and their state and local counterparts. The term “***Hazardous Materials***” means theexistence in any form of polychlorinated biphenyls, friable asbestos, urea formaldehyde foaminsulation, oil, gasoline, petroleum, petroleum products and petroleum-derived substances (otherthan in vehicles operated in the ordinary course of business), pesticides and herbicides, and anyother chemical, material or substance deemed hazardous, toxic, corrosive, reactive, ignitable,radioactive, or flammable under any Environmental Laws.4.5 Transaction Documents. All representations and warranties of the Companycontained in the other Transaction Documents are true and correct in all material respects (exceptfor representations or warranties already qualified by materiality, which are true and correct inall respects).4.6 Insurance. All policies of insurance in effect of any kind or nature owned by orissued to the Company, including policies of life, fire, theft, product liability, publicliability, property damage, other casualty, employee fidelity, workers’ compensation, property andliability insurance, (a) are, together with all policies of employee health and welfare and titleinsurance, if any, in full force and effect, (b) comply in all respects with the applicablerequirements set forth herein and (c) are of a nature and provide such coverage, including throughself-insurance, retentions and deductibles, as is customarily carried by companies engaged insimilar businesses and owning similar properties in the same general areas in which the Companyoperates.
 
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4.7 Permits. The Company has all franchises, permits, licenses, and any similarauthority necessary for the conduct of its business as now conducted and as presently proposed tobe conducted, the lack of which could materially and adversely affect the business, properties,prospects, or financial condition of the Company. The Company is not in default in any materialrespect under any of such franchises, permits, licenses, or other similar authority.4.8 Intellectual Property. The Company has all intellectual property necessary forthe conduct of its business as now conducted and as presently proposed to be conducted, the lack ofwhich could materially and adversely affect the business, properties, prospects, or financialcondition of the Company. None of such intellectual property infringes on the rights of any otherperson. The Company does not own any registered copyrights or registered trademarks. A completelist of the Company’s United States patents and applications for United States patents is set forthon Schedule A of the Patent Security Agreement.4.9 Subsidiaries. The Company has no subsidiaries (direct or indirect) other than asset forth in Exhibit 21.1 to its Annual Report on Form 10-K filed on March 27, 2009. Each director indirect subsidiary of the Company (a) is not actively engaged in any business and (b) holds nomaterial assets.4.10 Financial Statements. The Company has delivered to the Investors its unauditedbalance sheet, income statement and statement of stockholders’ equity at and for the three and ninemonths ended September 30, 2009 (collectively, the “***Financial Statements***”). The FinancialStatements fairly present the financial condition and operating results of the Company as of thedates, and for the periods, indicated therein, subject to normal year-end audit adjustments.Except as set forth in the Financial Statements, and liabilities arising from the reduction of theCompany’s workforce pursuant to the plan adopted by the Company’s board of directors on March 26,2010, the Company has no material liabilities (contingent or otherwise) other than (i) liabilitiesincurred in the ordinary course of business subsequent to September 30, 2009, and (ii) obligationsunder contracts and commitments incurred in the ordinary course of business and not required undergenerally accepted accounting principles to be reflected in the Financial Statements, which, inboth cases, individually or in the aggregate, are not material to the financial condition oroperating results of the Company.4.11 No Material Adverse Effect. Since the date of the Financial Statements, otherthan as publicly disclosed by the Company in filings with the SEC, the reduction of the Company’sworkforce pursuant to the plan adopted by the Company’s board of directors on March 26, 2010 andthe failure of the Company to be able to repay existing indebtedness to the Investors when due, noevent has occurred or condition exists with respect to the Company or any other Person that hasresulted in, or could reasonably be expected to result in, a Material Adverse Effect.4.12 Disclosure. None of the representations or warranties made by the Company hereinas of the date of such representations and warranties, and none of the statements contained in anyother information with respect to the Company and its properties and assets, including each exhibitor report, furnished by or on behalf of the Company to the Investors in connection herewith,contains any untrue statement of a material fact or omits any material fact required tobe stated therein or necessary to make the statements made therein, in the light of thecircumstances under which they are made, not misleading.
 
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4.13 Offering. Subject in part to the truth and accuracy of each Investor’srepresentations set forth in Section 3 of this Agreement, the offer, sale and issuance ofthe Notes and the Warrants as contemplated by this Agreement are exempt from the registrationrequirements of the Act and will not result in a violation of the qualification or registrationrequirements of the any applicable state securities laws, and neither the Company nor anyauthorized agent acting on its behalf will take any action hereafter that would cause the loss ofsuch exemption.**SECTION 5****MISCELLANEOUS**5.1 Survival of Representations, Warranties and Covenants. The warranties,representations and covenants of the Company and the Investors contained in or made pursuant tothis Agreement shall survive the execution and delivery of this Agreement and all Closings andshall in no way be affected by any investigation of the subject matter thereof made by or on behalfof the Investors or the Company.5.2 Successors and Assigns. Except as otherwise provided therein, the terms andconditions of this Agreement and the other Transaction Documents shall inure to the benefit of andbe binding upon the respective successors and assigns of the parties (including transferees of anySecurities); provided, however, that the Company may not assign or transfer itsrights or obligations hereunder or under the other Transaction Documents without the prior writtenconsent of all Investors. Nothing in this Agreement, express or implied, is intended to conferupon any party other than the parties hereto or their respective successors and assigns any rights,remedies, obligations, or liabilities under or by reason of this Agreement, except as expresslyprovided in this Agreement.5.3 Governing Law; Jury Trial Waiver. This Agreement is to be construed in accordancewith and governed by the laws of the State of California. The Company irrevocably waives, to thefullest extent permitted by law, any objection which it may now or hereafter have to the laying ofthe venue of any such proceeding brought in such a court and any claim that any such proceedingbrought in such a court has been brought in an inconvenient forum. Nothing herein shall affect theright of any Investor to bring proceedings against the Company in the courts of any otherjurisdiction. EACH OF THE INVESTORS AND THE COMPANY HEREBY KNOWINGLY, VOLUNTARILY, ANDINTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASEDHEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS AGREEMENT OR ANY OTHER TRANSACTIONDOCUMENT. THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE INVESTORS ENTERING INTO THIS AGREEMENT.
 
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5.4 Counterparts. This Agreement may be executed in several counterparts, each ofwhich shall be deemed an original, but all of which together shall constitute one and the sameinstrument.5.5 Titles and Subtitles. The titles and subtitles used in this Agreement are usedfor convenience only and are not to be considered in construing or interpreting this Agreement.5.6 Notices. Except as may be otherwise provided herein, all notices, requests,waivers and other communications made pursuant to this Agreement shall be in writing and shall beconclusively deemed to have been duly given (a) when hand delivered to the other party; (b) whensent by facsimile or electronic mail to the number or electronic mail address set forth on thesignature pages hereto if sent between 8:00 a.m. and 5:00 p.m. recipient’s local time on a BusinessDay, or on the next Business Day if sent by facsimile or electronic mail to the number orelectronic mail address set forth on the signature pages hereto if sent other than between 8:00a.m. and 5:00 p.m. recipient’s local time on a Business Day; (c) three Business Days after depositin the U.S. mail with first class or certified mail receipt requested postage prepaid and addressedto the other party at the address set forth on the signature pages hereto; or (d) the next BusinessDay after deposit with a national overnight delivery service, postage prepaid, addressed to theparties as set forth on the signature pages hereto with next Business Day delivery guaranteed,provided that the sending party receives a confirmation of delivery from the delivery serviceprovider. Each Person making a communication hereunder by facsimile or electronic mail shallpromptly confirm by telephone to the Person to whom such communication was addressed eachcommunication made by it by facsimile or electronic mail pursuant hereto but the absence of suchconfirmation shall not affect the validity of any such communication. A party may change orsupplement the addresses given above, or designate additional addresses, for purposes of thisSection 5.6 by giving the other party written notice of the new address in the manner set forthabove.5.7 Finder’s Fee. Each party represents that it neither is nor will be obligated forany finder’s fee or commission in connection with this transaction. Each Investor agrees toindemnify and to hold harmless the Company from any liability for any commission or compensation inthe nature of a finder’s fee (and the costs and expenses of defending against such liabilityor asserted liability) for which each Investor or any of its officers, employees, orrepresentatives is responsible. The Company agrees to indemnify and hold harmless each Investorfrom any liability for any commission or compensation in the nature of a finder’s fee (and thecosts and expenses of defending against such liability or asserted liability) for which the Companyor any of its officers, employees or representatives is responsible.5.8 Amendments and Waivers. Any term of this Agreement may be amended and theobservance of any term of this Agreement may be waived (either generally or in a particularinstance and either retroactively or prospectively), only if such amendment, modification or waiveris in writing and only with the written consent of the Company and all Investors. Any amendment orwaiver effected in accordance with this section shall be binding upon each holder of any Securitiesacquired under this Agreement at the time outstanding, each future holder of all such Securities,and the Company.
 
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5.9 Severability. If one or more provisions of this Agreement are held to beunenforceable under applicable law, such provision shall be excluded from this Agreement and thebalance of the Agreement shall be interpreted as if such provision were so excluded and shall beenforceable in accordance with its terms.5.10 Corporate Securities Law. THE SALE OF THE SECURITIES THAT ARE THE SUBJECT OFTHIS AGREEMENT HAS NOT BEEN QUALIFIED WITH THE COMMISSIONER OF CORPORATIONS OF THE STATE OFCALIFORNIA AND THE ISSUANCE OF SUCH SECURITIES OR THE PAYMENT OR RECEIPT OF ANY PART OF THECONSIDERATION THEREFOR PRIOR TO SUCH QUALIFICATION IS UNLAWFUL, UNLESS THE SALE OF SECURITIES ISEXEMPT FROM QUALIFICATION BY SECTION 25100, 25102 OR 25105 OF THE CALIFORNIA CORPORATIONS CODE.THE RIGHTS OF ALL PARTIES TO THIS AGREEMENT ARE EXPRESSLY CONDITIONED UPON SUCH QUALIFICATION BEINGOBTAINED, UNLESS THE SALE IS SO EXEMPT.5.11 Expenses. The Company shall reimburse the reasonable expenses of the Investors(including the fees of one special counsel for both of the Investors) with respect to thenegotiation, execution and delivery of this Agreement and the other Transaction Documents, in anamount not to exceed $35,000 in the aggregate.5.12 Register. The Company shall maintain at its principal executive offices aregister for the Securities, in which the Company shall record the name and address of the personin whose name the Securities have been issued (including the name and address of each transferee)and the amount of the Securities held by such person. The Company shall keep the register open andavailable during business hours for inspection by the Investors or their legal representatives uponprior written notice.5.13 Interpretation. In this Agreement and the other Transaction Documents, except tothe extent the context otherwise requires: (i) any reference in this Agreement or otherTransaction Document to a Section, a Schedule or an Exhibit is a reference to a Section thereof, aschedule thereto or an exhibit thereto, respectively, and to a subsection thereof or a clausethereof is, unless otherwise stated, a reference to a subsection or a clause of the Section orsubsection in which the reference appears; (ii) the words “hereof,” “herein,” “hereto,” “hereunder”and the like mean and refer to this Agreement or other Transaction Document as a whole and notmerely to the specific Section, subsection, paragraph or clause in which the respective wordappears; (iii) the meaning of defined terms shall be equally applicable to both the singular andplural forms of the terms defined; (iv) references to agreements and other contractual instrumentsshall be deemed to include all subsequent amendments and other modifications thereto;(v) references to statutes or regulations are to be construed as including all statutory andregulatory provisions consolidating, amending or replacing the statute or regulation referred to;and (vi) the captions and headings are for convenience of reference only and shall not affect theconstruction of this Agreement or other Transaction Document.
 
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5.14 Further Assurances. Each party agrees to cooperate fully with the other partiesand to execute such further instruments, documents and agreements and to give such further writtenassurance as may be reasonably requested by any other party to evidence and reflect thetransactions described in this Agreement and the other Transaction Documents and contemplatedhereby and thereby and to carry into effect the intents and purposes of this Agreement and theother Transaction Documents.5.15 Entire Agreement. This Agreement and the documents referred to herein constitutethe entire agreement among the parties with respect to the subject matter hereof and no party shallbe liable or bound to any other party in any manner by any warranties, representations or covenantsexcept as specifically set forth herein or therein.*** * ***
 
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first abovewritten.      **COMPANY:**