OF THE COMPANY'S SUBSIDIARIES IS DULY ORGANIZED, VALIDLY
EXISTING AND IN GOOD STANDING UNDER THE LAWS OF THE JURISDICTION OF ITS
ORGANIZATION OR INCORPORATION, AS APPLICABLE, AND, EXCEPT AS HAS NOT HAD OR
WOULD NOT BE REASONABLY EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT, EACH OF THE
COMPANY AND THE COMPANY'S SUBSIDIARIES IS DULY QUALIFIED TO DO BUSINESS AND IS
IN GOOD STANDING IN ALL JURISDICTIONS WHERE ITS OWNERSHIP OR LEASING OF PROPERTY
OR THE CONDUCT OF ITS BUSINESS REQUIRES IT TO BE SO QUALIFIED AND HAS ALL
REQUISITE CORPORATE OR SIMILAR POWER AND AUTHORITY TO CARRY ON ITS BUSINESS AS
CURRENTLY CONDUCTED.
(B)
AUTHORIZATION.
THIS AGREEMENT HAS BEEN DULY AND VALIDLY
AUTHORIZED, EXECUTED AND DELIVERED BY THE COMPANY AND, ASSUMING DUE
AUTHORIZATION, EXECUTION AND DELIVERY BY SUCH INVESTOR, CONSTITUTES A BINDING
OBLIGATION OF THE COMPANY ENFORCEABLE AGAINST IT IN ACCORDANCE WITH ITS TERMS,
SUBJECT TO APPLICABLE BANKRUPTCY, INSOLVENCY, FRAUDULENT CONVEYANCE,
REORGANIZATION, MORATORIUM AND SIMILAR LAWS AFFECTING CREDITORS' RIGHTS AND
REMEDIES GENERALLY, AND SUBJECT, AS TO ENFORCEABILITY, TO GENERAL PRINCIPLES OF
EQUITY, INCLUDING PRINCIPLES OF GOOD FAITH AND FAIR DEALING (REGARDLESS OF
WHETHER ENFORCEMENT IS SOUGHT IN A PROCEEDING AT LAW OR IN EQUITY).
SUBJECT TO
THE RECEIPT OF STOCKHOLDER APPROVAL CONTEMPLATED BY SECTION 9(E)(I) AND
SECTION 9(E)(II), ALL OF THE SHARES OF CONVERTIBLE PREFERRED STOCK TO BE ISSUED
TO SUCH INVESTOR HEREUNDER AND THE CONVERSION SECURITIES TO BE ISSUED TO SUCH
INVESTOR UPON CONVERSION OF THE CONVERTIBLE PREFERRED STOCK HAVE BEEN DULY
AUTHORIZED FOR ISSUANCE AND, WHEN ISSUED, PAID FOR AND DELIVERED AS SET FORTH
HEREIN, OR IN THE CERTIFICATE OF DESIGNATIONS, AS APPLICABLE, THE SHARES OF
CONVERTIBLE PREFERRED STOCK AND THE CONVERSION SECURITIES WILL BE VALIDLY
ISSUED, FULLY PAID AND NON-ASSESSABLE.
(C)
CAPITALIZATION; SUBSIDIARIES.
AS OF THE DATE HEREOF, THE
AUTHORIZED CAPITAL STOCK OF THE COMPANY CONSISTS OF (I) 100,000,000 SHARES OF
COMMON STOCK, OF WHICH 52,464,335 SHARES ARE ISSUED AND OUTSTANDING AS OF
APRIL 30, 2009, AND (II) 50,000,000 SHARES OF PREFERRED STOCK, PAR VALUE $0.001
PER SHARE, NONE OF WHICH IS ISSUED AND OUTSTANDING AS OF THE DATE OF THIS
AGREEMENT.
ALL OF THE OUTSTANDING SHARES OF COMMON STOCK HAVE BEEN DULY
AUTHORIZED, ARE VALIDLY ISSUED, FULLY PAID AND NONASSESSABLE AND WERE OFFERED,
SOLD AND ISSUED IN COMPLIANCE WITH ALL APPLICABLE FEDERAL AND STATE SECURITIES
LAWS AND WITHOUT VIOLATING ANY CONTRACTUAL OBLIGATION OR ANY OTHER PREEMPTIVE OR
SIMILAR RIGHTS.
AS OF APRIL 30, 2009, THERE WERE 900,079 SHARES OF COMMON STOCK
AUTHORIZED AND RESERVED FOR ISSUANCE UNDER THE COMPANY'S AMENDED AND RESTATED
2005 STOCK INCENTIVE PLAN AND NO OUTSTANDING OPTIONS TO PURCHASE SHARES OF
COMMON STOCK THEREUNDER.
AS OF THE DATE OF THIS AGREEMENT, NO BONDS,
DEBENTURES, NOTES OR OTHER INDEBTEDNESS HAVING THE RIGHT TO VOTE ON ANY MATTERS
ON WHICH STOCKHOLDERS OF THE COMPANY MAY VOTE ("VOTING DEBT") ARE ISSUED OR
OUTSTANDING.
AS OF APRIL 30, 2009, EXCEPT PURSUANT TO THIS AGREEMENT, THE
COMPANY DOES NOT HAVE AND IS NOT BOUND BY ANY OUTSTANDING SUBSCRIPTIONS,
OPTIONS, WARRANTS, CALLS, RIGHTS, COMMITMENTS OR AGREEMENTS ("RIGHTS") CALLING
FOR