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
PLEDGE AGREEMENT, THE SECURITIES 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 AND THEREBY, INCLUDING, WITHOUT LIMITATION,
THE ISSUANCE OF THE NOTES AND THE WARRANTS, THE RESERVATION FOR ISSUANCE AND THE
ISSUANCE OF THE CONVERSION SHARES AND THE WARRANT SHARES ISSUABLE UPON
CONVERSION OR EXERCISE 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
6
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 THE SUM OF 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 AND 100% OF THE NUMBER OF
SHARES OF COMPANY COMMON STOCK ISSUABLE UPON EXERCISE OF THE WARRANTS TO BE
ISSUED AT THE CLOSING.
UPON CONVERSION OR EXERCISE IN ACCORDANCE WITH THE NOTES
OR THE WARRANTS, AS THE CASE MAY BE, AND UPON ISSUANCE OF INTEREST SHARES AS
INTEREST ON THE NOTES, THE CONVERSION SHARES, THE WARRANT SHARES AND THE
INTEREST SHARES, RESPECTIVELY, WILL BE VALIDLY ISSUED, FULLY PAID AND
NONASSESSABLE AND FREE FROM ALL TAXES, LIENS AND CHARGES WITH RESPECT TO THE
ISSUE THEREOF, WITH THE HOLDERS BEING ENTITLED TO ALL RIGHTS ACCORDED TO A
HOLDER OF COMPANY COMMON STOCK.
ASSUMING THE ACCURACY OF THE BUYERS