AND THE OTHER TRANSACTION DOCUMENTS OR BY THE AGREEMENTS AND
INSTRUMENTS TO BE ENTERED INTO IN CONNECTION HEREWITH OR THEREWITH, OR ON THE
AUTHORITY OR ABILITY OF THE COMPANY TO PERFORM ITS OBLIGATIONS UNDER THE
TRANSACTION DOCUMENTS.
THE COMPANY HAS NO SUBSIDIARIES EXCEPT AS SET FORTH ON
SCHEDULE 3(A).
NONE OF SUCH SUBSIDIARIES IS MATERIAL TO THE COMPANY.
(B)
AUTHORIZATION; ENFORCEMENT; VALIDITY.
THE
COMPANY HAS THE REQUISITE CORPORATE POWER AND AUTHORITY TO ENTER INTO AND
PERFORM ITS OBLIGATIONS UNDER THIS AGREEMENT, THE NOTES, THE REGISTRATION RIGHTS
AGREEMENT, THE IRREVOCABLE TRANSFER AGENT INSTRUCTIONS (AS DEFINED IN SECTION
5(B)), THE WARRANTS, THE AMENDED AND RESTATED PLEDGE AGREEMENT, THE AMENDED AND
RESTATED SECURITIES ACCOUNT CONTROL AGREEMENT, THE CASH COLLATERAL ACCOUNT
CONTROL AGREEMENT AND EACH OF THE OTHER AGREEMENTS ENTERED INTO BY THE PARTIES
HERETO IN CONNECTION WITH THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT
(COLLECTIVELY, THE "TRANSACTION DOCUMENTS"), TO ISSUE THE SECURITIES AND TO
PLEDGE AND TRANSFER THE AVII SHARES IN ACCORDANCE WITH THE TERMS HEREOF AND
THEREOF.
THE EXECUTION AND DELIVERY OF THE TRANSACTION DOCUMENTS BY THE COMPANY
AND THE CONSUMMATION BY THE COMPANY OF THE TRANSACTIONS CONTEMPLATED HEREBY
6
AND THEREBY, INCLUDING, WITHOUT LIMITATION, THE ISSUANCE OF THE NOTES AND THE
WARRANTS, THE RESERVATION FOR ISSUANCE AND THE ISSUANCE OF THE CONVERSION SHARES
ISSUABLE UPON CONVERSION THEREOF AND THE PLEDGING AND TRANSFER OF THE AVII
SHARES, AS THE CASE MAY BE, HAVE BEEN DULY AUTHORIZED BY THE COMPANY'S BOARD OF
DIRECTORS AND (OTHER THAN THE STOCKHOLDER APPROVAL PURSUANT TO SECTION 4(N) FOR
CERTAIN ISSUANCES THAT MAY REQUIRE SUCH APPROVAL PURSUANT TO THE RULES OF THE
NASDAQ NATIONAL MARKET (THE "PRINCIPAL MARKET")) NO FURTHER CONSENT OR
AUTHORIZATION IS REQUIRED BY THE COMPANY, ITS BOARD OF DIRECTORS OR ITS
STOCKHOLDERS.
THIS AGREEMENT AND THE OTHER TRANSACTION DOCUMENTS OF EVEN DATE
HEREWITH HAVE BEEN DULY EXECUTED AND DELIVERED BY THE COMPANY, AND CONSTITUTE
THE LEGAL, VALID AND BINDING OBLIGATIONS OF THE COMPANY, ENFORCEABLE AGAINST THE
COMPANY IN ACCORDANCE WITH THEIR RESPECTIVE TERMS, EXCEPT AS SUCH ENFORCEABILITY
MAY BE LIMITED BY GENERAL PRINCIPLES OF EQUITY OR APPLICABLE BANKRUPTCY,
INSOLVENCY, REORGANIZATION, MORATORIUM, LIQUIDATION OR SIMILAR LAWS RELATING TO,
OR AFFECTING GENERALLY, THE ENFORCEMENT OF APPLICABLE CREDITORS' RIGHTS AND
REMEDIES AND EXCEPT THAT THE INDEMNIFICATION PROVISIONS UNDER THE REGISTRATION
RIGHTS AGREEMENT MAY FURTHER BE LIMITED BY PRINCIPLES OF PUBLIC POLICY.
(C)
ISSUANCE OF SECURITIES.
THE NOTES AND THE
WARRANTS ARE DULY AUTHORIZED AND, UPON ISSUANCE IN ACCORDANCE WITH THE TERMS
HEREOF, SHALL BE FREE FROM ALL TAXES, LIENS AND CHARGES WITH RESPECT TO THE
ISSUE THEREOF.
AS OF THE CLOSING, A NUMBER OF SHARES OF COMPANY COMMON STOCK
SHALL HAVE BEEN DULY AUTHORIZED AND RESERVED FOR ISSUANCE WHICH EQUALS 130% OF
THE MAXIMUM NUMBER OF SHARES OF COMPANY COMMON STOCK ISSUABLE UPON CONVERSION
OF, OR AS PAYMENT FOR INTEREST ON, THE NOTES TO BE ISSUED AT THE CLOSING.
UPON
CONVERSION IN ACCORDANCE WITH THE NOTES, AND UPON ISSUANCE OF INTEREST SHARES AS
INTEREST ON THE NOTES, THE CONVERSION SHARES AND THE INTEREST SHARES,
RESPECTIVELY, WILL BE VALIDLY