2
FORM 10-QSB FOR THE FISCAL QUARTERS ENDED MARCH 31, 2007 (THE "FORM 10-QSB"), OR
ON SCHEDULE 2.1(G) HERETO.
THE COMPANY AND EACH SUCH SUBSIDIARY IS DULY
QUALIFIED AS A FOREIGN CORPORATION TO DO BUSINESS AND IS IN GOOD STANDING IN
EVERY JURISDICTION IN WHICH THE NATURE OF THE BUSINESS CONDUCTED OR PROPERTY
OWNED BY IT MAKES SUCH QUALIFICATION NECESSARY EXCEPT FOR ANY JURISDICTION(S)
(ALONE OR IN THE AGGREGATE) IN WHICH THE FAILURE TO BE SO QUALIFIED WOULD NOT
HAVE A MATERIAL ADVERSE EFFECT (AS DEFINED IN SECTION 2.1(C) HEREOF).
(B)
AUTHORIZATION; ENFORCEMENT.
THE COMPANY HAS THE REQUISITE
CORPORATE POWER AND AUTHORITY TO ENTER INTO AND PERFORM THIS AGREEMENT, THE
REGISTRATION RIGHTS AGREEMENT IN THE FORM ATTACHED HERETO AS EXHIBIT D (THE
"REGISTRATION RIGHTS AGREEMENT"), THE STOCKHOLDERS AGREEMENT (AS DEFINED IN
SECTION 3.20 HEREOF) IN THE FORM ATTACHED HERETO AS EXHIBIT E, THE
CONFIDENTIALITY, NON-COMPETITION AND NON-SOLICITATION AGREEMENT (AS DEFINED IN
SECTION 3.23 HEREOF) IN THE FORM ATTACHED HERETO AS EXHIBIT H, THE DIRECTOR
INDEMNIFICATION AGREEMENT (AS DEFINED IN SECTION 3.29 HEREOF) IN THE FORM
ATTACHED HERETO AS EXHIBIT I, THE IRREVOCABLE TRANSFER AGENT INSTRUCTIONS (AS
DEFINED IN SECTION 3.13) AND THE CERTIFICATE OF DESIGNATION (COLLECTIVELY, THE
"TRANSACTION DOCUMENTS") AND TO ISSUE AND SELL THE SHARES IN ACCORDANCE WITH THE
TERMS HEREOF.
THE EXECUTION, DELIVERY AND PERFORMANCE OF THE TRANSACTION
DOCUMENTS BY THE COMPANY AND THE CONSUMMATION BY IT OF THE TRANSACTIONS
CONTEMPLATED HEREBY AND THEREBY HAVE BEEN DULY AND VALIDLY AUTHORIZED BY ALL
NECESSARY CORPORATE ACTION, AND NO FURTHER CONSENT OR AUTHORIZATION OF THE
COMPANY OR ITS BOARD OF DIRECTORS OR STOCKHOLDERS IS REQUIRED.
THIS AGREEMENT
HAS BEEN DULY EXECUTED AND DELIVERED BY THE COMPANY.
THE OTHER TRANSACTION
DOCUMENTS WILL HAVE BEEN DULY EXECUTED AND DELIVERED BY THE COMPANY AT THE
CLOSING.
EACH OF THE TRANSACTION DOCUMENTS CONSTITUTES, OR SHALL CONSTITUTE
WHEN EXECUTED AND DELIVERED, A VALID AND BINDING OBLIGATION OF THE COMPANY
ENFORCEABLE AGAINST THE COMPANY IN ACCORDANCE WITH ITS TERMS, EXCEPT AS SUCH
ENFORCEABILITY MAY BE LIMITED BY APPLICABLE BANKRUPTCY, INSOLVENCY,
REORGANIZATION, MORATORIUM, LIQUIDATION, CONSERVATORSHIP, RECEIVERSHIP OR
SIMILAR LAWS RELATING TO, OR AFFECTING GENERALLY THE ENFORCEMENT OF, CREDITOR'S
RIGHTS AND REMEDIES OR BY OTHER EQUITABLE PRINCIPLES OF GENERAL APPLICATION.
(C)
CAPITALIZATION.
THE AUTHORIZED CAPITAL STOCK OF THE COMPANY AND
THE SHARES THEREOF CURRENTLY ISSUED AND OUTSTANDING IMMEDIATELY PRECEDING THE
CLOSING DATE ARE SET FORTH ON SCHEDULE 2.1(C) HERETO.
ALL OF THE OUTSTANDING
SHARES OF THE COMMON STOCK AND THE PREFERRED SHARES HAVE BEEN DULY AND VALIDLY
AUTHORIZED.
EXCEPT AS SET FORTH ON SCHEDULE 2.1(C) HERETO, NO SHARES OF COMMON
STOCK ARE ENTITLED TO PREEMPTIVE RIGHTS OR REGISTRATION RIGHTS AND THERE ARE NO
OUTSTANDING OPTIONS, WARRANTS, SCRIP, RIGHTS TO SUBSCRIBE TO, CALL OR
COMMITMENTS OF ANY CHARACTER WHATSOEVER RELATING TO, OR SECURITIES OR RIGHTS
CONVERTIBLE INTO, ANY SHARES OF CAPITAL STOCK OF THE COMPANY.
THERE ARE NO
CONTRACTS, COMMITMENTS, UNDERSTANDINGS, OR ARRANGEMENTS BY WHICH THE COMPANY IS
OR MAY BECOME BOUND TO ISSUE ADDITIONAL SHARES OF THE CAPITAL STOCK OF THE
COMPANY OR OPTIONS, SECURITIES OR RIGHTS