Common use of Agreements; Action Clause in Contracts

Agreements; Action. (a) Except for agreements explicitly contemplated hereby and by the other Transaction Documents, there are no agreements, or proposed transactions between the Company or the Subsidiaries and any of their officers, directors, employees, affiliates or, to the Company’s knowledge, any affiliate thereof. (b) There are no agreements, contracts, instruments, judgments, orders, writs or decrees to which the Company or the Subsidiaries is a party or by which the Company or the Subsidiaries is bound that may involve (i) obligations of or payments to the Company or the Subsidiaries, respectively, in excess of $500,000, (ii) any license of any Intellectual Property to or from the Company or the Subsidiaries (other than the license to the Company of standard, generally commercially available, “off-the-shelf” third-party products), (iii) indemnification by the Company or the Subsidiaries with respect to infringements of proprietary rights, or (iv) provisions restricting the development, manufacture or distribution of the products or services of the Company or the Subsidiaries. (c) The Company has not (i) accrued, declared or paid any dividends or authorized or made any distribution upon or with respect to any class or series of its capital stock, (ii) incurred any liabilities or guaranteed any indebtedness for money borrowed individually in excess of $500,000 or, in the case of indebtedness and/or liabilities individually less than $500,000, in excess of $1,000,000 in the aggregate, (iii) made any loans or advances to any person, other than ordinary reasonable advances for travel expenses, or (iv) sold, exchanged or otherwise disposed of any of its assets or rights, other than the sale of its inventory in the ordinary course of business. (d) For the purposes of subsections (b) and (c) above, all indebtedness, liabilities, agreements and contracts involving the same person or entity shall be aggregated for the purpose of meeting the individual minimum dollar amounts of such subsections. (e) Neither the Company nor the Subsidiaries is in violation or default of any term (including without limitation any diligence obligation) or of any provision of any of the agreements set forth in Schedule 2.13 of the Disclosure Schedule (the “Material Agreements”). The execution, delivery, and performance of and compliance with this Agreement, and the Transaction Documents, and the issuance and sale of the Series D Preferred Stock pursuant hereto and of the Common Stock issuable upon conversion of the Series D Preferred Stock pursuant to the Restated Certificate, will not, with or without the passage of time or giving of notice, result in any such violation, or be in conflict with or constitute a default under any such term or provision, or result in the creation of any mortgage, pledge, lien, encumbrance or charge upon any of the properties or assets of the Company or the Subsidiaries or the suspension, revocation, impairment, forfeiture or nonrenewal of any Material Agreement, permit, license, authorization or approval applicable to the Company or the Subsidiaries, its business or operations or any of its assets or properties. The Company has avoided every condition, and has neither performed any act, the occurrence of which would result in the loss of any right granted to the Company or the Subsidiaries under any Material Agreement, nor failed to perform any act, the failure of which would result in the loss of any right granted to the Company or the Subsidiaries under any Material Agreement.

Agreements; Action. (a) Except for agreements explicitly contemplated hereby and by the other Transaction Documentsas set forth on Schedule 12(f), there are no agreements, or proposed transactions between the Company or the Subsidiaries and as disclosed in any of their officers, directors, employees, affiliates Exchange Act Filings or, prior to consummation of the Company’s knowledgeinitial public offering of Common Stock, as disclosed in any affiliate thereof.Securities Act Filings: (bi) There are no agreements, understandings, instruments, contracts, instrumentsproposed transactions, judgments, orders, writs or decrees to which the Company it or the any of its Subsidiaries is a party or to its knowledge by which the Company or the Subsidiaries it is bound that which may involve involve: (i) obligations of (contingent or otherwise) of, or payments to the Company to, it or the Subsidiaries, respectively, any of its Subsidiaries in excess of $500,00050,000 (other than obligations of, or payments to, it or any of its Subsidiaries arising from purchase or sale agreements entered into in the ordinary course of business); or (ii) any the transfer or license of any Intellectual Property patent, copyright, trade secret or other proprietary right to or from the Company or the Subsidiaries it (other than licenses arising from the license to purchase of “off the Company of standard, generally commercially available, “off-the-shelf” third-party or other standard products), ; or (iii) indemnification by the Company or the Subsidiaries with respect to infringements of proprietary rights, or (iv) provisions restricting the development, manufacture or distribution of the its or any of its Subsidiaries’ products or services services; or (iv) indemnification by it or any of the Company or the Subsidiariesits Subsidiaries with respect to infringements of proprietary rights. (cii) The Company has not Except as set forth in the Parent’s quarterly unaudited financial statements for its fiscal quarter ended December 31, 2004, since September 30, 2004 (the “Balance Sheet Date”) neither it nor any of its Subsidiaries has: (i) accrued, declared or paid any dividends dividends, or authorized or made any distribution upon or with respect to any class or series of its capital stock, ; (ii) incurred any liabilities or guaranteed any indebtedness for money borrowed or any other liabilities (other than ordinary course obligations) individually in excess of $500,000 50,000 or, in the case of indebtedness and/or liabilities individually less than $500,00050,000, in excess of $1,000,000 100,000 in the aggregate, ; (iii) made any loans or advances to any personPerson not in excess, individually or in the aggregate, of $100,000, other than ordinary reasonable advances for travel expenses, ; or (iv) sold, exchanged or otherwise disposed of any of its assets or rights, other than the sale of its inventory Inventory in the ordinary course of business. (diii) For the purposes of subsections (bi) and (cii) aboveof this Section 12(f), all indebtedness, liabilities, agreements agreements, understandings, instruments, contracts and contracts proposed transactions involving the same person Person (including Persons it or entity any of its applicable Subsidiaries has reason to believe are affiliated therewith or with any Subsidiary thereof) shall be aggregated for the purpose of meeting the individual minimum dollar amounts of such subsections. (eiv) Neither the Company nor Parent maintains disclosure controls and procedures (“Disclosure Controls”) designed to ensure that information required to be disclosed by the Subsidiaries Parent in the reports that it files or submits under the Exchange Act is recorded, processed, summarized, and reported, within the time periods specified in violation the rules and forms of the SEC. (v) The Parent makes and keeps books, records, and accounts, that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of its assets. It maintains internal control over financial reporting (“Financial Reporting Controls”) designed by, or default under the supervision of, its principal executive and principal financial officers, and effected by its board of directors, management, and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP, including that: (1) transactions are executed in accordance with management’s general or specific authorization; (2) unauthorized acquisition, use, or disposition of the Parent’s assets that could have a material effect on the financial statements are prevented or timely detected; (3) transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that its receipts and expenditures are being made only in accordance with authorizations of the Parent’s management and board of directors; (4) transactions are recorded as necessary to maintain accountability for assets; and (5) the recorded accountability for assets is compared with the existing assets at reasonable intervals, and appropriate action is taken with respect to any term differences. (including without limitation vi) There is no weakness in any diligence obligation) of its Disclosure Controls or of any provision of Financial Reporting Controls that is required to be disclosed in any of the agreements set forth in Schedule 2.13 of the Disclosure Schedule (the “Material Agreements”). The executionExchange Act Filings, delivery, and performance of and compliance with this Agreement, and the Transaction Documents, and the issuance and sale of the Series D Preferred Stock pursuant hereto and of the Common Stock issuable upon conversion of the Series D Preferred Stock pursuant to the Restated Certificate, will not, with or without the passage of time or giving of notice, result in any such violation, or be in conflict with or constitute a default under any such term or provision, or result in the creation of any mortgage, pledge, lien, encumbrance or charge upon any of the properties or assets of the Company or the Subsidiaries or the suspension, revocation, impairment, forfeiture or nonrenewal of any Material Agreement, permit, license, authorization or approval applicable to the Company or the Subsidiaries, its business or operations or any of its assets or properties. The Company has avoided every condition, and has neither performed any act, the occurrence of which would result in the loss of any right granted to the Company or the Subsidiaries under any Material Agreement, nor failed to perform any act, the failure of which would result in the loss of any right granted to the Company or the Subsidiaries under any Material Agreementexcept as so disclosed.

Agreements; Action. (a) Except as set forth in Schedule 5.14 of the Acquirer Disclosure Schedule and except for agreements explicitly contemplated hereby and by the other Transaction DocumentsAgreement or hereby, there are no agreements, understandings or proposed transactions between Acquirer or any of its Subsidiaries, on the Company or the Subsidiaries one hand, and any of their respective officers, directors, employees, affiliates or, to the Company’s knowledge, or any affiliate thereof. (b) There , on the other hand. Except as set forth in Schedule 5.14 of the Acquirer Disclosure Schedule, there are no agreements, understandings, instruments, contracts, instrumentsproposed transactions, judgments, orders, writs or decrees to which the Company Acquirer or the any of its Subsidiaries is a party or by which the Company or the Subsidiaries it is bound that may involve (i) obligations of (contingent or otherwise) of, or payments to the Company Acquirer or the any of its Subsidiaries, respectively, in excess of $500,00050,000, other than obligations of, or payments to, Acquirer or any of its Subsidiaries arising from purchase, sale, license, maintenance or services agreements entered into in the ordinary course of business, (ii) any the license of any Intellectual Property patent, copyright, trade secret or other Proprietary Right to or from the Company Acquirer or the Subsidiaries (any of its Subsidiaries, other than licenses arising from the license to purchase of “off the Company of standard, generally commercially available, “off-the-shelf” third-party products)or other standard products or licenses arising in the ordinary course of business, or (iii) indemnification by the Company or the Subsidiaries with respect to infringements of proprietary rights, or (iv) provisions restricting or affecting the development, manufacture or distribution of the products or services of the Company Acquirer or the any of its Subsidiaries. (cb) The Company Except as set forth in Schedule 5.14 of the Acquirer Disclosure Schedule, neither Acquirer nor any of its Subsidiaries has not (i) accrued, declared or paid any dividends or authorized or made any distribution upon or with respect to any class or series of its capital stock, (ii) incurred any liabilities or guaranteed any indebtedness for money borrowed individually in excess of $500,000 50,000 or, in the case of indebtedness and/or liabilities individually less than $500,00050,000, in excess of $1,000,000 200,000 in the aggregate, (iii) made any loans or advances to any personPerson, other than ordinary reasonable advances for travel expenses, or (iv) sold, exchanged or otherwise disposed of any of its assets or rights, other than the sale of its inventory in the ordinary course of business. Acquirer is not a guarantor or indemnitor of any indebtedness of any other Person, firm or corporation. (dc) For the purposes of subsections (ba) and (cb) above, all indebtedness, liabilities, agreements and contracts indebtedness involving the same person or entity Person (including Persons Acquirer has reason to believe are affiliated therewith) shall be aggregated for the purpose of meeting the individual minimum dollar amounts of such subsections. (e) Neither the Company nor the Subsidiaries is in violation or default of any term (including without limitation any diligence obligation) or of any provision of any of the agreements set forth in Schedule 2.13 of the Disclosure Schedule (the “Material Agreements”). The execution, delivery, and performance of and compliance with this Agreement, and the Transaction Documents, and the issuance and sale of the Series D Preferred Stock pursuant hereto and of the Common Stock issuable upon conversion of the Series D Preferred Stock pursuant to the Restated Certificate, will not, with or without the passage of time or giving of notice, result in any such violation, or be in conflict with or constitute a default under any such term or provision, or result in the creation of any mortgage, pledge, lien, encumbrance or charge upon any of the properties or assets of the Company or the Subsidiaries or the suspension, revocation, impairment, forfeiture or nonrenewal of any Material Agreement, permit, license, authorization or approval applicable to the Company or the Subsidiaries, its business or operations or any of its assets or properties. The Company has avoided every condition, and has neither performed any act, the occurrence of which would result in the loss of any right granted to the Company or the Subsidiaries under any Material Agreement, nor failed to perform any act, the failure of which would result in the loss of any right granted to the Company or the Subsidiaries under any Material Agreement.

Agreements; Action. Except as set forth on Schedule 4.6 or as disclosed in any Exchange Act Filings: (a) Except for agreements explicitly contemplated hereby and by the other Transaction Documents, there are no agreements, or proposed transactions between the Company or the Subsidiaries and any of their officers, directors, employees, affiliates or, to the Company’s knowledge, any affiliate thereof. (b) There are no agreements, understandings, instruments, contracts, instrumentsproposed transactions, judgments, orders, writs or decrees to which the Company or the Subsidiaries is a party or to its knowledge by which the Company or the Subsidiaries it is bound that which may involve (i) obligations of (contingent or otherwise) of, or payments to to, the Company or the Subsidiaries, respectively, in excess of $500,00050,000 (other than obligations of, or payments to, the Company arising from purchase or sale agreements entered into in the ordinary course of business), or (ii) any the transfer or license of any Intellectual Property patent, copyright, trade secret or other proprietary right to or from the Company or the Subsidiaries (other than licenses arising from the license to purchase of “off the Company of standard, generally commercially available, “off-the-shelf” third-party or other standard products), or (iii) indemnification by the Company or the Subsidiaries with respect to infringements of proprietary rights, or (iv) provisions restricting the development, manufacture or distribution of the Company’s products or services of services, or (iv) indemnification by the Company or the Subsidiarieswith respect to infringements of proprietary rights. (cb) The Since September 30, 2005, the Company has not (i) accrued, declared or paid any dividends dividends, or authorized or made any distribution upon or with respect to any class or series of its capital stock, (ii) incurred any liabilities or guaranteed any indebtedness for money borrowed or any other liabilities (other than ordinary course obligations) individually in excess of $500,000 50,000 or, in the case of indebtedness and/or liabilities individually less than $500,00050,000, in excess of $1,000,000 100,000 in the aggregate, (iii) made any loans or advances to any personperson not in excess, individually or in the aggregate, of $100,000, other than ordinary reasonable advances for travel expenses, or (iv) sold, exchanged or otherwise disposed of any of its assets or rights, other than the sale of its inventory in the ordinary course of business. (dc) For the purposes of subsections (ba) and (cb) above, all indebtedness, liabilities, agreements agreements, understandings, instruments, contracts and contracts proposed transactions involving the same person or entity (including persons or entities the Company has reason to believe are affiliated therewith) shall be aggregated for the purpose of meeting the individual minimum dollar amounts of such subsections. (e) Neither the Company nor the Subsidiaries is in violation or default of any term (including without limitation any diligence obligation) or of any provision of any of the agreements set forth in Schedule 2.13 of the Disclosure Schedule (the “Material Agreements”). The execution, delivery, and performance of and compliance with this Agreement, and the Transaction Documents, and the issuance and sale of the Series D Preferred Stock pursuant hereto and of the Common Stock issuable upon conversion of the Series D Preferred Stock pursuant to the Restated Certificate, will not, with or without the passage of time or giving of notice, result in any such violation, or be in conflict with or constitute a default under any such term or provision, or result in the creation of any mortgage, pledge, lien, encumbrance or charge upon any of the properties or assets of the Company or the Subsidiaries or the suspension, revocation, impairment, forfeiture or nonrenewal of any Material Agreement, permit, license, authorization or approval applicable to the Company or the Subsidiaries, its business or operations or any of its assets or properties. The Company has avoided every condition, and has neither performed any act, the occurrence of which would result in the loss of any right granted to the Company or the Subsidiaries under any Material Agreement, nor failed to perform any act, the failure of which would result in the loss of any right granted to the Company or the Subsidiaries under any Material Agreement.

Agreements; Action. (aExcept as set forth on SCHEDULE 12(f) Except for agreements explicitly contemplated hereby and by the other Transaction Documents, there are no agreements, or proposed transactions between the Company or the Subsidiaries and as disclosed in any of their officers, directors, employees, affiliates or, to the Company’s knowledge, any affiliate thereof.Exchange Act Filings: (bi) There are no agreements, understandings, instruments, contracts, instrumentsproposed transactions, judgments, orders, writs or decrees to which the Company it or the any of its Subsidiaries is a party or to its knowledge by which the Company or the Subsidiaries it is bound that which may involve involve: (i) obligations of (contingent or otherwise) of, or payments to the Company to, it or the Subsidiaries, respectively, any of its Subsidiaries in excess of $500,000100,000 (other than obligations of, or payments to, it or any of its Subsidiaries arising from purchase or sale agreements entered into in the ordinary course of business); or (ii) any the transfer or license of any Intellectual Property patent, copyright, trade secret or other proprietary right to or from the Company or the Subsidiaries it (other than licenses arising from the license to purchase of "off the Company of standard, generally commercially available, “off-the-shelf” third-party " or other standard products), ; or (iii) indemnification by the Company or the Subsidiaries with respect to infringements of proprietary rights, or (iv) provisions restricting the development, manufacture or distribution of the its or any of its Subsidiaries' products or services services; or (iv) indemnification by it or any of the Company or the Subsidiariesits Subsidiaries with respect to infringements of proprietary rights. (cii) The Company has not Since December 31, 2004 (the "BALANCE SHEET DATE") neither it nor any of its Subsidiaries has: (i) accrued, declared or paid any dividends dividends, or authorized or made any distribution upon or with respect to any class or series of its capital stock, ; (ii) other than the Company's debts to Wells Fargo Bank and Alfred Curmi, incurred any liabilities or guaranteed any indebtedness for money borrowed mon▇▇ ▇▇rrowed or any ot▇▇▇ ▇▇▇▇▇▇▇▇ies (other than ordinary course obligations) individually in excess of $500,000 100,000 or, in the case of indebtedness and/or liabilities individually less than $500,000100,000, in excess of $1,000,000 100,000 in the aggregate, ; (iii) made any loans or advances to any personPerson not in excess, individually or in the aggregate, of $100,000, other than ordinary reasonable advances for travel expenses, ; or (iv) sold, exchanged or otherwise disposed of any of its assets or rights, other than the sale of its inventory Inventory in the ordinary course of business. (diii) For the purposes of subsections (bi) and (cii) aboveof this Section 12(f), all indebtedness, liabilities, agreements agreements, understandings, instruments, contracts and contracts proposed transactions involving the same person Person (including Persons it or entity any of its applicable Subsidiaries has reason to believe are affiliated therewith or with any Subsidiary thereof) shall be aggregated for the purpose of meeting the individual minimum dollar amounts of such subsections. (eiv) Neither the Company nor Parent maintains disclosure controls and procedures ("DISCLOSURE CONTROLS") designed to ensure that information required to be disclosed by the Subsidiaries Parent in the reports that it files or submits under the Exchange Act is recorded, processed, summarized, and reported, within the time periods specified in violation the rules and forms of the SEC. (v) The Parent makes and keeps books, records, and accounts, that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of its assets. It maintains internal control over financial reporting ("FINANCIAL REPORTING CONTROLS") designed by, or default under the supervision of, its principal executive and principal financial officers, and effected by its board of directors, management, and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP, including that: (1) transactions are executed in accordance with management's general or specific authorization; (2) unauthorized acquisition, use, or disposition of the Parent's assets that could have a material effect on the financial statements are prevented or timely detected; (3) transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that its receipts and expenditures are being made only in accordance with authorizations of the Parent's management and board of directors; (4) transactions are recorded as necessary to maintain accountability for assets; and (5) the recorded accountability for assets is compared with the existing assets at reasonable intervals, and appropriate action is taken with respect to any term differences. (including without limitation vi) There is no weakness in any diligence obligation) of its Disclosure Controls or of any provision of Financial Reporting Controls that is required to be disclosed in any of the agreements set forth in Schedule 2.13 of the Disclosure Schedule (the “Material Agreements”). The executionExchange Act Filings, delivery, and performance of and compliance with this Agreement, and the Transaction Documents, and the issuance and sale of the Series D Preferred Stock pursuant hereto and of the Common Stock issuable upon conversion of the Series D Preferred Stock pursuant to the Restated Certificate, will not, with or without the passage of time or giving of notice, result in any such violation, or be in conflict with or constitute a default under any such term or provision, or result in the creation of any mortgage, pledge, lien, encumbrance or charge upon any of the properties or assets of the Company or the Subsidiaries or the suspension, revocation, impairment, forfeiture or nonrenewal of any Material Agreement, permit, license, authorization or approval applicable to the Company or the Subsidiaries, its business or operations or any of its assets or properties. The Company has avoided every condition, and has neither performed any act, the occurrence of which would result in the loss of any right granted to the Company or the Subsidiaries under any Material Agreement, nor failed to perform any act, the failure of which would result in the loss of any right granted to the Company or the Subsidiaries under any Material Agreementexcept as so disclosed.

Agreements; Action. (aExcept as set forth on Schedule 12(f) Except for agreements explicitly contemplated hereby and by the other Transaction Documents, there are no agreements, or proposed transactions between the Company or the Subsidiaries and as disclosed in any of their officers, directors, employees, affiliates or, to the Company’s knowledge, any affiliate thereof.Exchange Act Filings: (bi) There are no agreements, understandings, instruments, contracts, instrumentsproposed transactions, judgments, orders, writs or decrees to which the Company it or the any of its Eligible Subsidiaries is a party or to its knowledge by which the Company or the Subsidiaries it is bound that which may involve involve: (i) obligations of (contingent or otherwise) of, or payments to the Company to, it or the Subsidiaries, respectively, any of its Eligible Subsidiaries in excess of $500,000250,000 (other than obligations of, or payments to, it or any of its Eligible Subsidiaries arising from purchase or sale agreements entered into in the ordinary course of business); or (ii) the transfer of any patent, copyright, trademark, trade secret or the transfer or license of any Intellectual Property other proprietary right material to the business of the Parent to or from the Company or the Subsidiaries it (other than licenses arising from the license purchase of “off the shelf” or other standard products or licenses that would not materially impair the security interest granted to Lender pursuant to the Company of standard, generally commercially available, “off-the-shelf” third-party productsIP Security Agreement), ; or (iii) indemnification by the Company or the Subsidiaries with respect to infringements of proprietary rights, or (iv) provisions restricting the development, manufacture or distribution of the its or any of its Eligible Subsidiaries’ products or services services; or (iv) indemnification by it or any of the Company or the Subsidiariesits Eligible Subsidiaries with respect to infringements of proprietary rights. (cii) The Company has not Since June 30, 2007 (the “Balance Sheet Date”) neither it nor any of its Eligible Subsidiaries has: (i) accrued, declared or paid any dividends dividends, or authorized or made any distribution upon or with respect to any class or series of its capital stock, ; (ii) incurred any liabilities or guaranteed any indebtedness for money borrowed or any other liabilities (other than ordinary course obligations) individually in excess of $500,000 250,000 or, in the case of indebtedness and/or liabilities individually less than $500,000250,000, in excess of $1,000,000 500,000 in the aggregate, ; (iii) made any loans or advances to any personPerson not in excess, individually or in the aggregate, of $100,000, other than ordinary reasonable advances for travel expenses, ; or (iv) sold, exchanged or otherwise disposed of any of its assets or rights, other than the sale of its inventory Inventory in the ordinary course of business. (diii) For the purposes of subsections (bi) and (cii) aboveof this Section 12(f), all indebtedness, liabilities, agreements agreements, understandings, instruments, contracts and contracts proposed transactions involving the same person Person (including Persons it or entity any of its applicable Subsidiaries has reason to believe are affiliated therewith or with any Subsidiary thereof) shall be aggregated for the purpose of meeting the individual minimum dollar amounts of such subsections; provided, however that for purposes of subsections (i) and (ii) indebtedness, liabilities, agreements, understandings, instruments, contracts and proposed transactions of the Non-Eligible Subsidiaries shall not be consolidated with the Parent. (eiv) Neither the Company nor Parent maintains disclosure controls and procedures (“Disclosure Controls”) designed to ensure that information required to be disclosed by the Subsidiaries Parent in the reports that it files or submits under the Exchange Act is recorded, processed, summarized, and reported, within the time periods specified in violation the rules and forms of the SEC. (v) The Parent makes and keeps books, records, and accounts, that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of its assets. It maintains internal control over financial reporting (“Financial Reporting Controls”) designed by, or default under the supervision of, its principal executive and principal financial officers, and effected by its board of directors, management, and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP, including that: (1) transactions are executed in accordance with management’s general or specific authorization; (2) unauthorized acquisition, use, or disposition of the Parent’s assets that could have a material effect on the financial statements are prevented or timely detected; (3) transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that its receipts and expenditures are being made only in accordance with authorizations of the Parent’s management and board of directors; (4) transactions are recorded as necessary to maintain accountability for assets; and (5) the recorded accountability for assets is compared with the existing assets at reasonable intervals, and appropriate action is taken with respect to any term differences. (including without limitation vi) There is no weakness in any diligence obligation) of its Disclosure Controls or of any provision of Financial Reporting Controls that is required to be disclosed in any of the agreements set forth in Schedule 2.13 of the Disclosure Schedule (the “Material Agreements”). The executionExchange Act Filings, delivery, and performance of and compliance with this Agreement, and the Transaction Documents, and the issuance and sale of the Series D Preferred Stock pursuant hereto and of the Common Stock issuable upon conversion of the Series D Preferred Stock pursuant to the Restated Certificate, will not, with or without the passage of time or giving of notice, result in any such violation, or be in conflict with or constitute a default under any such term or provision, or result in the creation of any mortgage, pledge, lien, encumbrance or charge upon any of the properties or assets of the Company or the Subsidiaries or the suspension, revocation, impairment, forfeiture or nonrenewal of any Material Agreement, permit, license, authorization or approval applicable to the Company or the Subsidiaries, its business or operations or any of its assets or properties. The Company has avoided every condition, and has neither performed any act, the occurrence of which would result in the loss of any right granted to the Company or the Subsidiaries under any Material Agreement, nor failed to perform any act, the failure of which would result in the loss of any right granted to the Company or the Subsidiaries under any Material Agreementexcept as so disclosed.

Agreements; Action. (a) Except for agreements explicitly contemplated hereby Attached hereto as Schedule 3.7(a) to the Disclosure Letter is a list of (i) all "material contracts" within the meaning of Item 601 of Regulation S-K of the SEC, (ii) all of the Company's and by the other Transaction Documentsits Subsidiaries' contracts, there are no agreements, leases or proposed transactions between the Company or the Subsidiaries and any of their officers, directors, employees, affiliates or, to the Company’s knowledge, any affiliate thereof. (b) There are no agreements, contracts, instruments, judgments, orders, writs or decrees other instruments to which the Company or the any of its Subsidiaries is a party or by which the Company, its Subsidiaries or its properties are bound, which involve payments by or to a Company or the its Subsidiaries is bound that may involve (i) obligations during any fiscal year of or payments to the Company or the Subsidiaries, respectively, in excess of more than $500,000, (ii) any license of any Intellectual Property to or from the Company or the Subsidiaries (other than the license to the Company of standard, generally commercially available, “off-the-shelf” third-party products)250,000, (iii) indemnification all of Company's and its Subsidiaries' loan agreements, bank lines of credit agreements, indentures, mortgages, deeds of trust, pledge and security agreements, factoring agreements, conditional sales contracts, letters of credit or other debt instruments evidencing indebtedness for money borrowed and all such instruments or agreements other than for borrowed money representing payment obligations of $250,000 or more, (iv) all material operating or capital leases for equipment to which the Company or any of its Subsidiaries is a party, (v) all contracts for the employment of any officer or employee, (vi) all material consulting agreements, (vii) any guarantees by the Company or any of its Subsidiaries, (viii) all material distributor and sales agency agreements, (ix) all IP Contracts (as defined in Section 3.11), (x) all contracts restricting the Company or any of its Subsidiaries from engaging in any line of business or competing with respect to infringements any Person or in any geographical area, and (xi) all contracts restricting the payment of proprietary rightsinterest upon, or the redemption or conversion of, the Notes (ivcollectively, the "Contracts"). (b) provisions restricting Except as set forth on Schedule 3.7(b) to the developmentDisclosure Letter, manufacture neither the Company nor any of its Subsidiaries is, nor to the Company's knowledge is any other party to any Contract, in default under, or distribution in breach or violation of, any Contract and no event has occurred which, with the giving of notice or passage of time or both would constitute a default by the Company or, to the Company's knowledge, any other party under any Contract. Other than Contracts which have terminated or expired in accordance with their terms, each of the products or services Contracts is in full force and effect and (assuming due execution and delivery by the counterparties thereto) is a legal, valid and binding obligation of the Company or its Subsidiary (as applicable) enforceable against the Subsidiaries. Company or such Subsidiary in accordance with its terms (csubject to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors' rights generally, general equitable principles (whether considered in a proceeding in equity or at law) The and an implied covenant of good faith and fair dealing) and neither the Company has not (i) accrued, declared or paid any dividends or authorized or made any distribution upon or with respect to any class or series of its capital stock, (ii) incurred any liabilities or guaranteed any indebtedness for money borrowed individually in excess of $500,000 or, in the case of indebtedness and/or liabilities individually less than $500,000, in excess of $1,000,000 in the aggregate, (iii) made any loans or advances to any person, other than ordinary reasonable advances for travel expenses, or (iv) sold, exchanged or otherwise disposed of nor any of its assets or rightsSubsidiaries has any knowledge that any Contract is not a legal, other than the sale of its inventory in the ordinary course of business. (d) For the purposes of subsections (b) valid and (c) above, all indebtedness, liabilities, agreements and contracts involving the same person or entity shall be aggregated for the purpose of meeting the individual minimum dollar amounts of such subsections. (e) Neither the Company nor the Subsidiaries is in violation or default of any term (including without limitation any diligence obligation) or of any provision of any binding obligation of the agreements set forth in Schedule 2.13 of the Disclosure Schedule (the “Material Agreements”). The execution, delivery, and performance of and compliance with this Agreement, and the Transaction Documents, and the issuance and sale of the Series D Preferred Stock pursuant hereto and of the Common Stock issuable upon conversion of the Series D Preferred Stock pursuant to the Restated Certificate, will not, with or without the passage of time or giving of notice, result in any such violation, or be in conflict with or constitute a default under any such term or provision, or result in the creation of any mortgage, pledge, lien, encumbrance or charge upon any of the properties or assets of the Company or the Subsidiaries or the suspension, revocation, impairment, forfeiture or nonrenewal of any Material Agreement, permit, license, authorization or approval applicable to the Company or the Subsidiaries, its business or operations or any of its assets or properties. The Company has avoided every condition, and has neither performed any act, the occurrence of which would result in the loss of any right granted to the Company or the Subsidiaries under any Material Agreement, nor failed to perform any act, the failure of which would result in the loss of any right granted to the Company or the Subsidiaries under any Material Agreementother parties thereto.

Agreements; Action. (a) Except for agreements explicitly contemplated hereby and by as set forth in the other Transaction DocumentsSEC Reports, there are no agreements, or proposed transactions between the Company or the Subsidiaries and any of their officersunderstandings, directors, employees, affiliates or, to the Company’s knowledge, any affiliate thereof. (b) There are no agreementsinstruments, contracts, instrumentsproposed transactions, judgments, orders, writs or decrees to which the Company or the Subsidiaries is a party party, or to its knowledge, by which the Company or the Subsidiaries it is bound that which may involve (i) obligations of (contingent or otherwise) of, or payments to to, the Company or the Subsidiaries, respectively, in excess of $500,00050,000 (other than obligations of, or payments to, the Company arising from purchase or sale agreements entered into in the ordinary course of business), or (ii) any the transfer or license of any Intellectual Property patent, copyright, trade secret or other proprietary right to or from the Company or the Subsidiaries (other than licenses arising from the license to purchase of "off the Company of standard, generally commercially available, “off-the-shelf” third-party " or other standard products), or (iii) indemnification by the Company or the Subsidiaries with respect to infringements of proprietary rights, or (iv) provisions restricting the development, manufacture or distribution of the Company's products or services of services, other than those with respect to the Softtalk licence, or (iv) indemnification by the Company or the Subsidiarieswith respect to infringements of proprietary rights. (cb) The Since the date of the Company's most recent Form 10-QSB and since the payment in September of the quarterly dividend to Cedar Ave., the Company has not (i) accrued, declared or paid any dividends dividends, or authorized or made any distribution upon or with respect to any class or series of its capital stock, (ii) incurred any liabilities or guaranteed any indebtedness for money borrowed or any other liabilities individually in excess of $500,000 50,000 or, in the case of indebtedness and/or liabilities individually less than $500,00050,000, in excess of $1,000,000 100,000 in the aggregate, (iii) made any loans or advances to any person, other than ordinary reasonable advances for travel expenses, or (iv) sold, exchanged or otherwise disposed of any of its assets or rights, other than the sale of its inventory in the ordinary course of business. (dc) For the purposes of subsections (ba) and (cb) above, all indebtedness, liabilities, agreements agreements, understandings, instruments, contracts and contracts proposed transactions involving the same person or entity (including persons or entities the Company has reason to believe are affiliated therewith) shall be aggregated for the purpose of meeting the individual minimum dollar amounts of such subsections. (ed) Neither The Company has not engaged in the past two years in any discussion (i) with any representative of any corporation or corporations regarding the consolidation or merger of the Company nor with or into any such corporation or corporations, (ii) with any corporation, partnership, association or other business entity or any individual regarding the Subsidiaries is in violation sale, conveyance or default disposition of any term (including without limitation any diligence obligation) all or of any provision of any substantially all of the agreements set forth in Schedule 2.13 of the Disclosure Schedule (the “Material Agreements”). The execution, delivery, and performance of and compliance with this Agreement, and the Transaction Documents, and the issuance and sale of the Series D Preferred Stock pursuant hereto and of the Common Stock issuable upon conversion of the Series D Preferred Stock pursuant to the Restated Certificate, will not, with or without the passage of time or giving of notice, result in any such violation, or be in conflict with or constitute a default under any such term or provision, or result in the creation of any mortgage, pledge, lien, encumbrance or charge upon any of the properties or assets of the Company Company, or a transaction or series of related transactions in which more than 50% of the Subsidiaries or the suspension, revocation, impairment, forfeiture or nonrenewal voting power of any Material Agreement, permit, license, authorization or approval applicable to the Company is disposed of or (iii) regarding any other form of acquisition, liquidation, dissolution or winding up of the Subsidiaries, its business or operations or any of its assets or properties. The Company has avoided every condition, and has neither performed any act, the occurrence of which would result in the loss of any right granted to the Company or the Subsidiaries under any Material Agreement, nor failed to perform any act, the failure of which would result in the loss of any right granted to the Company or the Subsidiaries under any Material AgreementCompany.

Agreements; Action. (a) Except for agreements explicitly contemplated hereby and by the other Transaction Documentshereby, there are no agreements, understandings or proposed transactions between the Company or the Subsidiaries BuyGolf and any of their its officers, directors, employees, affiliates or, to the Company’s knowledge, or any affiliate thereof. (b) There are no agreements, understandings, instruments, contracts, instrumentsproposed transactions, judgments, orders, writs or decrees to which the Company or the Subsidiaries BuyGolf is a party or to its knowledge by which the Company or the Subsidiaries it is bound that which may involve (i) obligations of (contingent or otherwise) of, or payments to to, BuyGolf (other than obligations of, or payments to, BuyGolf arising in the Company ordinary course of business), or the Subsidiaries, respectively, in excess of $500,000, (ii) any the license of any Intellectual Property patent, copyright, trade secret or other proprietary right to or from the Company or the Subsidiaries BuyGolf (other than licenses arising from the license to purchase of "off the Company of standard, generally commercially available, “off-the-shelf” third-party " or other standard products), or (iii) provisions restricting or affecting the development, manufacture or distribution of BuyGolf's products or services, or (iv) indemnification by the Company or the Subsidiaries BuyGolf with respect to infringements of proprietary rights, or (iv) provisions restricting the development, manufacture or distribution of the products or services of the Company or the Subsidiaries. (c) The Company BuyGolf has not (i) accrued, declared or paid any dividends dividends, or authorized or made any distribution upon or with respect to any class or series of its capital stock, (ii) incurred any liabilities or guaranteed any indebtedness for money borrowed individually in excess of $500,000 oror any other liabilities (other than with respect to dividend obligations, distributions, indebtedness and other obligations incurred in the case ordinary course of indebtedness and/or liabilities individually less than $500,000, in excess of $1,000,000 business or as disclosed in the aggregateFinancial Statements), (iii) made any loans or advances to any person, other than ordinary reasonable advances for travel expenses, or (iv) sold, exchanged or otherwise disposed of any of its assets or rights, other than the sale of its inventory in the ordinary course of business. , (dv) For entered into any material contract, other than in the purposes ordinary course of subsections (b) business and (c) above, all indebtedness, liabilities, agreements and contracts involving the same person or entity shall be aggregated for the purpose of meeting the individual minimum dollar amounts of such subsections. (e) Neither the Company nor the Subsidiaries is in violation or default of any term (including without limitation any diligence obligation) or of any provision of any of the agreements set forth in Schedule 2.13 of the Disclosure Schedule (the “Material Agreements”). The execution, deliveryas provided to BC, and performance of and compliance with this Agreementthere has not occurred any amendment, and the Transaction Documents, and the issuance and sale of the Series D Preferred Stock pursuant hereto and of the Common Stock issuable upon conversion of the Series D Preferred Stock pursuant to the Restated Certificate, will not, with termination or without the passage of time or giving of notice, result in any such violation, or be in conflict with or constitute a default under any such term material contract to which BuyGolf is a party or provisionby which it is bound, (vi) made any change in its accounting practices or made any revaluation of its assets, (vii) made any purchase or other acquisition of, sale, lease, disposition, or result other transfer of, or mortgage, pledge or subjection to any material encumbrance or lien on any material asset, tangible or intangible, of BuyGolf, other than in the creation ordinary course of business, or (viii) made any sale, assignment, or transfer of any mortgagepatents, pledgetrademarks, liencopyrights, encumbrance trade secrets or charge upon any of the properties or assets of the Company or the Subsidiaries or the suspensionother intangible assets, revocation, impairment, forfeiture or nonrenewal of any Material Agreement, permit, license, authorization or approval applicable to the Company or the Subsidiaries, its business or operations or any of its assets or properties. The Company has avoided every condition, and has neither performed any act, the occurrence of which would result other than in the loss ordinary course of any right granted to the Company or the Subsidiaries under any Material Agreement, nor failed to perform any act, the failure of which would result in the loss of any right granted to the Company or the Subsidiaries under any Material Agreementbusiness.

Agreements; Action. (ai) Except for agreements explicitly contemplated hereby and by as set forth in the other Transaction DocumentsDisclosure Schedule, there are no agreements, or proposed transactions between the Company or the Subsidiaries and any of their officersunderstandings, directorsobligations, employees, affiliates or, to the Company’s knowledge, any affiliate thereof. (b) There are no agreementsinstruments, contracts, instrumentsproposed transactions, judgments, orders, writs or decrees to which the Company or the Subsidiaries Shira is a party or or, to its and Gilo’s knowledge, by which the Company it is bound, which have a material adverse effect on its results of operations, financial condition or the Subsidiaries is bound that prospects or which may involve (i) obligations of (contingent or otherwise) of, or payments to the Company or the Subsidiariesto, respectively, Shira in excess of $500,00010,000 (other than obligations of, or payments to, Shira arising from purchase or sale agreements entered into in the ordinary course of business), or (ii) any the transfer or license of any Intellectual Property patent, copyright, trade secret or other proprietary right to or from the Company or the Subsidiaries Shira (other than licenses arising from the license to purchase of “off the Company of standard, generally commercially available, “off-the-shelf” third-party or other standard products) (“Material Agreements”), (iii) indemnification by the Company or the Subsidiaries with respect to infringements of proprietary rights, or (iv) provisions restricting the development, manufacture or distribution of the products or services of the Company or the Subsidiaries. (cii) The Company Except as set forth in the Disclosure Schedule and except as reflected in the Financial Statements, Shira has not (i) accrued, declared or paid any dividends dividends, or authorized or made any distribution (including any repurchases) upon or with respect to any class or series of its capital stockshare capital, (ii) incurred any liabilities or guaranteed any indebtedness for money borrowed or any other liabilities (other than with respect to indebtedness and other obligations incurred in the ordinary course of business) individually in excess of $500,000 10,000 or, in the case of indebtedness and/or liabilities individually less than $500,00010,000, in excess of $1,000,000 25,000 in the aggregate, (iii) made any loans or advances to any person, other than (a) advances made in the ordinary reasonable course of business, including, but not limited to, advance payments pursuant to real estate or car lease agreements, or (b) ordinary advances for travel expenses, or (iv) sold, exchanged or otherwise disposed of any of its assets or rights, other than the sale of its inventory in the ordinary course of business. (d) . For the purposes of subsections (bi) and (cii) above, all indebtedness, liabilities, agreements agreements, understandings, instruments, contracts and contracts proposed transactions involving the same person or entity (including persons or entities Shira has reason to believe are affiliated therewith) shall be aggregated for the purpose of meeting the individual minimum dollar amounts of such subsections. (eiii) Neither the Company nor the Subsidiaries is in violation or default of any term (including without limitation any diligence obligation) or of any provision of any of the agreements Except as set forth in Schedule 2.13 the Disclosure Schedule, each of the Material Agreements specified in the Disclosure Schedule is in full force and effect. (iv) Except as set forth in the “Material Agreements”). The executionDisclosure Schedule and except as reflected in the Financial Statements, deliveryShira has not given any guarantee, indemnity or security for or otherwise agreed to become directly or contingently liable for any obligation of any other person, and performance no person has given any guarantee of and compliance with this Agreement, and the Transaction Documents, and the issuance and sale or security for any obligation of the Series D Preferred Stock pursuant hereto and of the Common Stock issuable upon conversion of the Series D Preferred Stock pursuant to the Restated Certificate, will not, with or without the passage of time or giving of notice, result in any such violation, or be in conflict with or constitute a default under any such term or provision, or result in the creation of any mortgage, pledge, lien, encumbrance or charge upon any of the properties or assets of the Company or the Subsidiaries or the suspension, revocation, impairment, forfeiture or nonrenewal of any Material Agreement, permit, license, authorization or approval applicable to the Company or the Subsidiaries, its business or operations or any of its assets or properties. The Company has avoided every condition, and has neither performed any act, the occurrence of which would result in the loss of any right granted to the Company or the Subsidiaries under any Material Agreement, nor failed to perform any act, the failure of which would result in the loss of any right granted to the Company or the Subsidiaries under any Material AgreementShira.

Agreements; Action. (a) Except for agreements explicitly contemplated hereby Attached hereto as Schedule 2.7(a) to the Disclosure Letter is a list of (i) all "material contracts" within the meaning of Item 601 of Regulation S-K of the SEC, (ii) all of the Company's and by the other Transaction Documentsits Subsidiaries' contracts, there are no agreements, leases or proposed transactions between the Company or the Subsidiaries and any of their officers, directors, employees, affiliates or, to the Company’s knowledge, any affiliate thereof. (b) There are no agreements, contracts, instruments, judgments, orders, writs or decrees other instruments to which the Company or the any of its Subsidiaries is a party or by which the Company, its Subsidiaries or its properties are bound, which involve payments by or to a Company or the its Subsidiaries is bound that may involve (i) obligations during any fiscal year of or payments to the Company or the Subsidiaries, respectively, in excess of more than $500,000, (ii) any license of any Intellectual Property to or from the Company or the Subsidiaries (other than the license to the Company of standard, generally commercially available, “off-the-shelf” third-party products)250,000, (iii) indemnification all of the Company's and its Subsidiaries' loan agreements, bank lines of credit agreements, indentures, mortgages, deeds of trust, pledge and security agreements, factoring agreements, conditional sales contracts, letters of credit or other debt instruments evidencing indebtedness for money borrowed and all such instruments or agreements other than for borrowed money representing payment obligations of $250,000 or more, (iv) all material operating or capital leases for equipment to which the Company or any of its Subsidiaries is a party, (v) all contracts for the employment of any officer or employee, (vi) all material consulting agreements, (vii) any guarantees by the Company or any of its Subsidiaries, (viii) all material distributor and sales agency agreements, (ix) all IP Contracts (as defined in Section 2.9), (x) all contracts restricting the Company or any of its Subsidiaries from engaging in any line of business or competing with respect any Person or in any geographical area, and (xi) all contracts restricting the issuance of the Warrant Shares (collectively, the "Contracts"). (b) Except as set forth on Schedule 2.7(b) to infringements the Disclosure Letter, neither the Company nor any of proprietary rightsits Subsidiaries is, nor to the Company's knowledge is any other party to any Contract, in default under, or (iv) provisions restricting in breach or violation of, any Contract and no event has occurred which, with the developmentgiving of notice or passage of time or both would constitute a default by the Company or, manufacture to the Company's knowledge, any other party under any Contract. Other than Contracts which have terminated or distribution expired in accordance with their terms, each of the products or services Contracts is in full force and effect and (assuming due execution and delivery by the counterparties thereto) is a legal, valid and binding obligation of the Company or its Subsidiary (as applicable) enforceable against the Subsidiaries. Company or such Subsidiary in accordance with its terms (csubject to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors' rights generally, general equitable principles (whether considered in a proceeding in equity or at law) The and an implied covenant of good faith and fair dealing) and neither the Company has not (i) accrued, declared or paid any dividends or authorized or made any distribution upon or with respect to any class or series of its capital stock, (ii) incurred any liabilities or guaranteed any indebtedness for money borrowed individually in excess of $500,000 or, in the case of indebtedness and/or liabilities individually less than $500,000, in excess of $1,000,000 in the aggregate, (iii) made any loans or advances to any person, other than ordinary reasonable advances for travel expenses, or (iv) sold, exchanged or otherwise disposed of nor any of its assets or rights, other than the sale of its inventory in the ordinary course of business. (d) For the purposes of subsections (b) and (c) above, all indebtedness, liabilities, agreements and contracts involving the same person or entity shall be aggregated for the purpose of meeting the individual minimum dollar amounts of such subsections. (e) Neither the Company nor the Subsidiaries is in violation or default of any term (including without limitation any diligence obligation) or of any provision of any of the agreements set forth in Schedule 2.13 of the Disclosure Schedule (the “Material Agreements”). The execution, delivery, and performance of and compliance with this Agreement, and the Transaction Documents, and the issuance and sale of the Series D Preferred Stock pursuant hereto and of the Common Stock issuable upon conversion of the Series D Preferred Stock pursuant to the Restated Certificate, will not, with or without the passage of time or giving of notice, result in any such violation, or be in conflict with or constitute a default under any such term or provision, or result in the creation of any mortgage, pledge, lien, encumbrance or charge upon any of the properties or assets of the Company or the Subsidiaries or the suspension, revocation, impairment, forfeiture or nonrenewal of any Material Agreement, permit, license, authorization or approval applicable to the Company or the Subsidiaries, its business or operations or any of its assets or properties. The Company has avoided every condition, and has neither performed any act, the occurrence of which would result in the loss of any right granted to the Company or the Subsidiaries under any Material Agreement, nor failed to perform any act, the failure of which would result in the loss of any right granted to the Company or the Subsidiaries under any Material Agreement.has

Agreements; Action. Except as set forth on Schedule 4.6 or as disclosed in any Exchange Act Filings: (a) Except for agreements explicitly contemplated hereby and by the other Transaction Documents, there are no agreements, or proposed transactions between the Company or the Subsidiaries and any of their officersunderstandings, directors, employees, affiliates or, to the Company’s knowledge, any affiliate thereof. (b) There are no agreementsinstruments, contracts, instrumentsproposed transactions, judgments, orders, writs or decrees to which the Company or the any of its Subsidiaries is a party or by which the Company or the Subsidiaries it is bound that which may involve involve: (i) obligations of (contingent or otherwise) of, or payments to to, the Company or the Subsidiaries, respectively, any of its Subsidiaries in excess of $500,00050,000 (other than obligations of, or payments to, the Company or any of its Subsidiaries arising from purchase or sale agreements entered into in the ordinary course of business); or (ii) any the transfer or license of any Intellectual Property patent, copyright, trade secret or other proprietary right to or from the Company or the any of its Subsidiaries (other than licenses arising from the license to purchase of “off the Company of standard, generally commercially available, “off-the-shelf” third-party or other standard products), ; or (iii) indemnification by the Company or the Subsidiaries with respect to infringements of proprietary rights, or (iv) provisions restricting the development, manufacture or distribution of the Company’s or any of its Subsidiaries products or services of services; or (iv) indemnification by the Company or the Subsidiariesany of its Subsidiaries with respect to infringements of proprietary rights. (cb) The Since September 30, 2005 (the “Balance Sheet Date”), neither the Company has not nor any of its Subsidiaries has: (i) accrued, declared or paid any dividends dividends, or authorized or made any distribution upon or with respect to any class or series of its capital stock, ; (ii) incurred any liabilities or guaranteed any indebtedness for money borrowed or any other liabilities (other than ordinary course obligations) individually in excess of $500,000 50,000 or, in the case of indebtedness and/or liabilities individually less than $500,00050,000, in excess of $1,000,000 100,000 in the aggregate, ; (iii) made any loans or advances to any personperson or entity not in excess, individually or in the aggregate, of $100,000, other than ordinary reasonable course advances for travel expenses, ; or (iv) sold, exchanged or otherwise disposed of any of its assets or rightsrights in excess of $50,000 in the aggregate, other than the sale of its inventory in the ordinary course of business. (dc) For the purposes of subsections (ba) and (cb) above, all indebtedness, liabilities, agreements agreements, understandings, instruments, contracts and contracts proposed transactions involving the same person or entity (including persons or entities the Company or any Subsidiary of the Company has reason to believe are affiliated therewith) shall be aggregated for the purpose of meeting the individual minimum dollar amounts of such subsections. (d) The Company maintains disclosure controls and procedures (“Disclosure Controls”) designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized, and reported, within the time periods specified in the rules and forms of the Securities and Exchange Commission (“SEC”). (e) Neither The Company makes and keep books, records, and accounts, that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the Company’s assets. The Company nor maintains internal control over financial reporting (“Financial Reporting Controls”) designed by, or under the Subsidiaries supervision of, the Company’s principal executive and principal financial officers, and effected by the Company’s board of directors, management, and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles (“GAAP”), including that: (i) transactions are executed in accordance with management’s general or specific authorization; (ii) unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the financial statements are prevented or timely detected; (iii) transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that the Company’s receipts and expenditures are being made only in accordance with authorizations of the Company’s management and board of directors; (iv) transactions are recorded as necessary to maintain accountability for assets; and (v) the recorded accountability for assets is compared with the existing assets at reasonable intervals, and appropriate action is taken with respect to any differences. (f) There is no weakness in violation or default of any term (including without limitation any diligence obligation) or of any provision of any of the agreements set forth Company’s Disclosure Controls or Financial Reporting Controls that is required to be disclosed in Schedule 2.13 of the Disclosure Schedule (the “Material Agreements”). The execution, delivery, and performance of and compliance with this Agreement, and the Transaction Documents, and the issuance and sale of the Series D Preferred Stock pursuant hereto and of the Common Stock issuable upon conversion of the Series D Preferred Stock pursuant to the Restated Certificate, will not, with or without the passage of time or giving of notice, result in any such violation, or be in conflict with or constitute a default under any such term or provision, or result in the creation of any mortgage, pledge, lien, encumbrance or charge upon any of the properties or assets of the Company or the Subsidiaries or the suspensionExchange Act Filings, revocation, impairment, forfeiture or nonrenewal of any Material Agreement, permit, license, authorization or approval applicable to the Company or the Subsidiaries, its business or operations or any of its assets or properties. The Company has avoided every condition, and has neither performed any act, the occurrence of which would result in the loss of any right granted to the Company or the Subsidiaries under any Material Agreement, nor failed to perform any act, the failure of which would result in the loss of any right granted to the Company or the Subsidiaries under any Material Agreementexcept as so disclosed.

Agreements; Action. (a) Except for agreements explicitly contemplated hereby and by agreements between the other Transaction DocumentsCompany and its employees with respect to the sale of the Company’s Preferred Stock, there are no agreements, understandings or proposed transactions between the Company or the Subsidiaries and any of their its officers, directors, employees, affiliates or, to the Company’s knowledge, or any affiliate thereof. (b) There are no agreements, understandings, instruments, contracts, instrumentsproposed transactions, judgments, orders, writs or decrees to which the Company or the Subsidiaries is a party or to its knowledge by which the Company or the Subsidiaries it is bound that which may involve (i) future obligations of (contingent or otherwise) of, or payments to to, the Company or the Subsidiaries, respectively, in excess of $500,00050,000, or (ii) any the transfer or license of any Intellectual Property patent, copyright, trade secret or other proprietary right to or from the Company or the Subsidiaries (other than the license to licenses by the Company of standard, generally commercially available, “off-the-off the shelf” third-party or other standard products), or (iii) indemnification by the Company or the Subsidiaries with respect to infringements of proprietary rights, or (iv) provisions restricting the development, manufacture or distribution of the Company’s products or services of services, or (iv) indemnification by the Company with respect to infringements of proprietary rights (other than indemnification obligations arising from purchase, sale or license agreements entered into in the Subsidiariesordinary course of business). (c) The Company has not (i) accrued, declared or paid any dividends dividends, or authorized or made any distribution upon or with respect to any class or series of its capital stock, (ii) incurred any liabilities or guaranteed any indebtedness for money borrowed or any other liabilities (other than with respect to dividend obligations, distributions, indebtedness and other obligations incurred in the ordinary course of business) individually in excess of $500,000 50,000 or, in the case of indebtedness and/or liabilities individually less than $500,00050,000, in excess of $1,000,000 250,000 in the aggregate, (iii) made any loans or advances to any person, other than ordinary reasonable advances for travel expenses, or (iv) sold, exchanged or otherwise disposed of any of its assets or rights, other than the sale of its inventory in the ordinary course of business. (d) For the purposes of subsections (b) and (c) above, all indebtedness, liabilities, agreements agreements, understandings, instruments, contracts and contracts proposed transactions involving the same person or entity (including persons or entities the Company has reason to believe are affiliated therewith) shall be aggregated for the purpose of meeting the individual minimum dollar amounts of such subsections. (e) Neither Other than as disclosed in Section 4.7 of the Schedule of Exceptions, the Company nor has not engaged in the Subsidiaries is past three (3) months in violation or default any discussion (i) with any representative of any term (including without limitation any diligence obligation) other business or of any provision of any businesses regarding the consolidation or merger of the agreements set forth in Schedule 2.13 Company with or into any such other business or businesses, (ii) with any corporation, partnership, limited liability company, or other business entity or any individual regarding the sale, conveyance or disposition of all or substantially all of the Disclosure Schedule (the “Material Agreements”). The execution, delivery, and performance of and compliance with this Agreement, and the Transaction Documents, and the issuance and sale of the Series D Preferred Stock pursuant hereto and of the Common Stock issuable upon conversion of the Series D Preferred Stock pursuant to the Restated Certificate, will not, with or without the passage of time or giving of notice, result in any such violation, or be in conflict with or constitute a default under any such term or provision, or result in the creation of any mortgage, pledge, lien, encumbrance or charge upon any of the properties or assets of the Company Company, or a transaction or series of related transactions in which more than fifty percent (50%) of the Subsidiaries or the suspension, revocation, impairment, forfeiture or nonrenewal voting power of any Material Agreement, permit, license, authorization or approval applicable to the Company is disposed of, or (iii) regarding any other form of acquisition, liquidation, dissolution or winding up, of the Subsidiaries, its business or operations or any of its assets or properties. The Company has avoided every condition, and has neither performed any act, the occurrence of which would result in the loss of any right granted to the Company or the Subsidiaries under any Material Agreement, nor failed to perform any act, the failure of which would result in the loss of any right granted to the Company or the Subsidiaries under any Material AgreementCompany.

Agreements; Action. Except as set forth on Schedule 4.6 or as disclosed in any Exchange Act Filings: (a) Except for agreements explicitly contemplated hereby and by the other Transaction Documents, there are no agreements, or proposed transactions between the Company or the Subsidiaries and any of their officersunderstandings, directors, employees, affiliates or, to the Company’s knowledge, any affiliate thereof. (b) There are no agreementsinstruments, contracts, instrumentsproposed transactions, judgments, orders, writs or decrees to which the Company or the any of its Subsidiaries is a party or by which the Company or the Subsidiaries it is bound that which may involve involve: (i) obligations of (contingent or otherwise) of, or payments to to, the Company or the Subsidiaries, respectively, any of its Subsidiaries in excess of $500,00050,000 (other than obligations of, or payments to, the Company or any of its Subsidiaries arising from purchase or sale agreements entered into in the ordinary course of business); or (ii) any the transfer or license of any Intellectual Property patent, copyright, trade secret or other proprietary right to or from the Company or the any of its Subsidiaries (other than licenses arising from the license to purchase of “off the Company of standard, generally commercially available, “off-the-shelf” third-party or other standard products), ; or (iii) indemnification by the Company or the Subsidiaries with respect to infringements of proprietary rights, or (iv) provisions restricting the development, manufacture or distribution of the Company’s or any of its Subsidiaries products or services of services; or (iv) indemnification by the Company or the Subsidiariesany of its Subsidiaries with respect to infringements of proprietary rights. (cb) The Since December 31, 2006 (the “Balance Sheet Date”), neither the Company has not nor any of its Subsidiaries has: (i) accrued, declared or paid any dividends dividends, or authorized or made any distribution upon or with respect to any class or series of its capital stock, ; (ii) incurred any liabilities or guaranteed any indebtedness for money borrowed or any other liabilities (other than ordinary course obligations) individually in excess of $500,000 50,000 or, in the case of indebtedness and/or liabilities individually less than $500,00050,000, in excess of $1,000,000 100,000 in the aggregate, ; (iii) made any loans or advances to any personperson or entity not in excess, individually or in the aggregate, of $100,000, other than ordinary reasonable course advances for travel expenses, ; or (iv) sold, exchanged or otherwise disposed of any of its assets or rights, other than the sale of its inventory in the ordinary course of business. (dc) For the purposes of subsections (ba) and (cb) above, all indebtedness, liabilities, agreements agreements, understandings, instruments, contracts and contracts proposed transactions involving the same person or entity (including persons or entities the Company or any Subsidiary of the Company has reason to believe are affiliated therewith) shall be aggregated for the purpose of meeting the individual minimum dollar amounts of such subsections. (d) The Company maintains disclosure controls and procedures (“Disclosure Controls”) designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized, and reported, within the time periods specified in the rules and forms of the Securities and Exchange Commission (“SEC”). (e) Neither The Company makes and keep books, records, and accounts, that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the Company’s assets. The Company nor maintains internal control over financial reporting (“Financial Reporting Controls”) designed by, or under the Subsidiaries supervision of, the Company’s principal executive and principal financial officers, and effected by the Company’s board of directors, management, and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles (“GAAP”), including that: (i) transactions are executed in accordance with management’s general or specific authorization; (ii) unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the financial statements are prevented or timely detected; (iii) transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that the Company’s receipts and expenditures are being made only in accordance with authorizations of the Company’s management and board of directors; (iv) transactions are recorded as necessary to maintain accountability for assets; and (v) the recorded accountability for assets is compared with the existing assets at reasonable intervals, and appropriate action is taken with respect to any differences. (f) There is no weakness in violation or default of any term (including without limitation any diligence obligation) or of any provision of any of the agreements set forth Company’s Disclosure Controls or Financial Reporting Controls that is required to be disclosed in Schedule 2.13 of the Disclosure Schedule (the “Material Agreements”). The execution, delivery, and performance of and compliance with this Agreement, and the Transaction Documents, and the issuance and sale of the Series D Preferred Stock pursuant hereto and of the Common Stock issuable upon conversion of the Series D Preferred Stock pursuant to the Restated Certificate, will not, with or without the passage of time or giving of notice, result in any such violation, or be in conflict with or constitute a default under any such term or provision, or result in the creation of any mortgage, pledge, lien, encumbrance or charge upon any of the properties or assets of the Company or the Subsidiaries or the suspensionExchange Act Filings, revocation, impairment, forfeiture or nonrenewal of any Material Agreement, permit, license, authorization or approval applicable to the Company or the Subsidiaries, its business or operations or any of its assets or properties. The Company has avoided every condition, and has neither performed any act, the occurrence of which would result in the loss of any right granted to the Company or the Subsidiaries under any Material Agreement, nor failed to perform any act, the failure of which would result in the loss of any right granted to the Company or the Subsidiaries under any Material Agreementexcept as so disclosed.

Agreements; Action. Except, in each case, as set forth on Schedule 4.6 or as disclosed in any Exchange Act Filings: (a) Except for agreements explicitly contemplated hereby and by the other Transaction Documents, there are no agreements, or proposed transactions between the Company or the Subsidiaries and any of their officersunderstandings, directors, employees, affiliates or, to the Company’s knowledge, any affiliate thereof. (b) There are no agreementsinstruments, contracts, instrumentsproposed transactions, judgments, orders, writs or decrees to which the Company or the any of its Subsidiaries is a party or by which the Company or the Subsidiaries it is bound that which may involve involve: (i) obligations of (contingent or otherwise) of, or payments to to, the Company or the Subsidiaries, respectively, any such Subsidiary in excess of $500,00050,000 (other than obligations of, or payments to, the Company or any such Subsidiary arising from purchase or sale agreements entered into in the ordinary course of business); or (ii) any the transfer or license of any Intellectual Property patent, copyright, trade secret or other proprietary right to or from the Company or the Subsidiaries any such Subsidiary (other than licenses arising from the license to purchase of “off the Company of standard, generally commercially available, “off-the-shelf” third-party or other standard products), ; or (iii) indemnification by the Company or the Subsidiaries with respect to infringements of proprietary rights, or (iv) provisions restricting the development, manufacture or distribution of the Company’s or any such Subsidiary’s products or services of services; or (iv) indemnification by the Company or the Subsidiariesany such Subsidiary with respect to infringements of proprietary rights. (cb) The Since December 31, 2003 (the “Balance Sheet Date”), neither the Company has not nor any of its Subsidiaries has: (i) accrued, declared or paid any dividends dividends, or authorized or made any distribution upon or with respect to any class or series of its capital stock, ; (ii) incurred any liabilities or guaranteed any indebtedness for money borrowed or any other liabilities (other than ordinary course obligations) individually in excess of $500,000 50,000 or, in the case of indebtedness and/or liabilities individually less than $500,00050,000, in excess of $1,000,000 100,000 in the aggregate, ; (iii) made any loans or advances to any personperson or entity not in excess, individually or in the aggregate, of $100,000, other than ordinary reasonable course advances for travel expenses, ; or (iv) sold, exchanged or otherwise disposed of any of its assets or rights, other than the sale of its inventory in the ordinary course of business. (dc) For the purposes of subsections (ba) and (cb) above, all indebtedness, liabilities, agreements agreements, understandings, instruments, contracts and contracts proposed transactions involving the same person or entity (including persons or entities the Company or any applicable Subsidiary of the Company has reason to believe are affiliated therewith) shall be aggregated for the purpose of meeting the individual minimum dollar amounts of such subsections. (d) The Company maintains disclosure controls and procedures (“Disclosure Controls”) designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized, and reported, within the time periods specified in the rules and forms of the Securities and Exchange Commission (“SEC”). (e) Neither The Company makes and keep books, records, and accounts, that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the Company’s assets. The Company nor maintains internal control over financial reporting (“Financial Reporting Controls”) designed by, or under the Subsidiaries supervision of, the Company’s principal executive and principal financial officers, and effected by the Company’s board of directors, management, and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles (“GAAP”), including that: (i) transactions are executed in accordance with management’s general or specific authorization; (ii) unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the financial statements are prevented or timely detected; (iii) transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that the Company’s receipts and expenditures are being made only in accordance with authorizations of the Company’s management and board of directors; (iv) transactions are recorded as necessary to maintain accountability for assets; and (v) the recorded accountability for assets is compared with the existing assets at reasonable intervals, and appropriate action is taken with respect to any differences. (f) There is no weakness in violation or default of any term (including without limitation any diligence obligation) or of any provision of any of the agreements set forth Company’s Disclosure Controls or Financial Reporting Controls that would be required to be disclosed in Schedule 2.13 of the Disclosure Schedule (the “Material Agreements”). The execution, delivery, and performance of and compliance with this Agreement, and the Transaction Documents, and the issuance and sale of the Series D Preferred Stock pursuant hereto and of the Common Stock issuable upon conversion of the Series D Preferred Stock pursuant to the Restated Certificate, will not, with or without the passage of time or giving of notice, result in any such violation, or be in conflict with or constitute a default under any such term or provision, or result in the creation of any mortgage, pledge, lien, encumbrance or charge upon any of the properties or assets of the Company or the Subsidiaries or the suspensionExchange Act Filings, revocation, impairment, forfeiture or nonrenewal of any Material Agreement, permit, license, authorization or approval applicable to the Company or the Subsidiaries, its business or operations or any of its assets or properties. The Company has avoided every condition, and has neither performed any act, the occurrence of which would result in the loss of any right granted to the Company or the Subsidiaries under any Material Agreement, nor failed to perform any act, the failure of which would result in the loss of any right granted to the Company or the Subsidiaries under any Material Agreementexcept as so disclosed.

Agreements; Action. (a) Except for agreements explicitly contemplated hereby and by the other Transaction Documents, there are no agreements, or proposed transactions between the Company or the Subsidiaries and any of their officers, directors, employees, affiliates or, to the Company’s knowledge, any affiliate thereof. (bi) There are no agreements, understandings, instruments, contracts, instrumentsproposed transactions, judgments, orders, writs or decrees to which the Company or the Subsidiaries is a party or to its knowledge, by which the Company or the Subsidiaries it is bound that which may involve (iA) obligations of (contingent or otherwise) of, or payments to to, the Company or the Subsidiaries, respectively, in excess of $500,00010,000 (other than obligations of, or payments to, the Company arising from purchase or sale agreements entered into in the ordinary course of business) or (iiB) any the transfer or license of any Intellectual Property patent, copyright, trade secret or other proprietary right to or from the Company or the Subsidiaries (other than licenses arising from the license to purchase of “off the Company of standard, generally commercially available, “off-the-shelf” third-party or other standard products), (iii) indemnification by the Company or the Subsidiaries with respect to infringements of proprietary rights, or (ivC) provisions restricting the development, manufacture or distribution of the Company’s products or services of services, or (D) indemnification by the Company with respect to infringements of proprietary rights (other than indemnification obligations arising from purchase or sale or license agreements entered into in the Subsidiariesordinary course of business). (cii) The Company has not (iA) accrued, declared or paid any dividends dividends, or authorized or made any distribution upon or with respect to any class or series of its capital stock, (iiB) incurred any liabilities or guaranteed any indebtedness for money borrowed or any other liabilities (other than with respect to dividend obligations, distributions, indebtedness and other obligations incurred in the ordinary course of business or as disclosed in the Financial Statements) individually in excess of $500,000 10,000 or, in the case of indebtedness and/or and or liabilities individually less than $500,00010,000, in excess of $1,000,000 10,000 in the aggregate, . The Company has not (iiiC) made any loans or advances to any person, other than ordinary reasonable advances for travel expenses, or (ivD) sold, exchanged or otherwise disposed of any of its assets or rights, other than the sale of its inventory in the ordinary course of business. (diii) For the purposes of subsections (bi) and (cii) above, all indebtedness, liabilities, agreements agreements, understandings, instruments contracts and contracts proposed transactions involving the same person or entity (including persons or entities the Company has reason to believe are affiliated therewith) shall be aggregated for the purpose of meeting the individual minimum dollar amounts of such subsections. (eiv) Neither The Company has not engaged in the past three months in any discussion (A) with any representative of any entity or entities regarding the consolidation or merger of the Company nor with or into any such entity or entities, (B) with person or entity regarding the Subsidiaries is in violation sale, conveyance or default disposition of any term (including without limitation any diligence obligation) all or of any provision of any substantially all of the agreements set forth in Schedule 2.13 of the Disclosure Schedule (the “Material Agreements”). The execution, delivery, and performance of and compliance with this Agreement, and the Transaction Documents, and the issuance and sale of the Series D Preferred Stock pursuant hereto and of the Common Stock issuable upon conversion of the Series D Preferred Stock pursuant to the Restated Certificate, will not, with or without the passage of time or giving of notice, result in any such violation, or be in conflict with or constitute a default under any such term or provision, or result in the creation of any mortgage, pledge, lien, encumbrance or charge upon any of the properties or assets of the Company Company, or a transaction or series of related transactions in which more than 50% of the Subsidiaries or the suspension, revocation, impairment, forfeiture or nonrenewal voting power of any Material Agreement, permit, license, authorization or approval applicable to the Company is disposed of, or (C) regarding any other form of acquisition, liquidation, dissolution or winding up of the Subsidiaries, its business or operations or any of its assets or properties. The Company has avoided every condition, and has neither performed any act, the occurrence of which would result in the loss of any right granted to the Company or the Subsidiaries under any Material Agreement, nor failed to perform any act, the failure of which would result in the loss of any right granted to the Company or the Subsidiaries under any Material AgreementCompany.

Agreements; Action. Except as set forth on Schedule 4.6 or as disclosed in any Exchange Act Filings: (a) Except for agreements explicitly contemplated hereby and by the other Transaction Documents, there are no agreements, or proposed transactions between the Company or the Subsidiaries and any of their officersunderstandings, directors, employees, affiliates or, to the Company’s knowledge, any affiliate thereof. (b) There are no agreementsinstruments, contracts, instrumentsproposed transactions, judgments, orders, writs or decrees to which the Company or the any of its Subsidiaries is a party or by which the Company or the Subsidiaries it is bound that which may involve involve: (i) obligations of (contingent or otherwise) of, or payments to to, the Company or the Subsidiaries, respectively, any of its Subsidiaries in excess of $500,00050,000 (other than obligations of, or payments to, the Company or any of its Subsidiaries arising from purchase or sale agreements entered into in the ordinary course of business); or (ii) any the transfer or license of any Intellectual Property patent, copyright, trade secret or other proprietary right to or from the Company or the any of its Subsidiaries (other than licenses arising from the license to purchase of “off the Company of standard, generally commercially available, “off-the-shelf” third-party or other standard products), ; or (iii) indemnification by the Company or the Subsidiaries with respect to infringements of proprietary rights, or (iv) provisions restricting the development, manufacture or distribution of the Company’s or any of its Subsidiaries products or services of services; or (iv) indemnification by the Company or the Subsidiariesany of its Subsidiaries with respect to infringements of proprietary rights. (cb) The Since December 31, 2004 (the “Balance Sheet Date”), neither the Company has not nor any of its Subsidiaries has: (i) accrued, declared or paid any dividends dividends, or authorized or made any distribution upon or with respect to any class or series of its capital stock, ; (ii) incurred any liabilities or guaranteed any indebtedness for money borrowed or any other liabilities (other than ordinary course obligations) individually in excess of $500,000 50,000 or, in the case of indebtedness and/or liabilities individually less than $500,00050,000, in excess of $1,000,000 100,000 in the aggregate, ; (iii) made any loans or advances to any personperson or entity not in excess, individually or in the aggregate, of $100,000, other than ordinary reasonable course advances for travel expenses, ; or (iv) sold, exchanged or otherwise disposed of any of its assets or rights, other than the sale of its inventory in the ordinary course of business. (dc) For the purposes of subsections (ba) and (cb) above, all indebtedness, liabilities, agreements agreements, understandings, instruments, contracts and contracts proposed transactions involving the same person or entity (including persons or entities the Company or any Subsidiary of the Company has reason to believe are affiliated therewith) shall be aggregated for the purpose of meeting the individual minimum dollar amounts of such subsections. (d) The Company maintains disclosure controls and procedures (“Disclosure Controls”) designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized, and reported, within the time periods specified in the rules and forms of the Securities and Exchange Commission (“SEC”). (e) Neither The Company makes and keep books, records, and accounts, that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the Company’s assets. The Company nor maintains internal control over financial reporting (“Financial Reporting Controls”) designed by, or under the Subsidiaries supervision of, the Company’s principal executive and principal financial officers, and effected by the Company’s board of directors, management, and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles (“GAAP”), including that: (i) transactions are executed in accordance with management’s general or specific authorization; (ii) unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the financial statements are prevented or timely detected; (iii) transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that the Company’s receipts and expenditures are being made only in accordance with authorizations of the Company’s management and board of directors; (iv) transactions are recorded as necessary to maintain accountability for assets; and (v) the recorded accountability for assets is compared with the existing assets at reasonable intervals, and appropriate action is taken with respect to any differences. (f) There is no weakness in violation or default of any term (including without limitation any diligence obligation) or of any provision of any of the agreements set forth Company’s Disclosure Controls or Financial Reporting Controls that is required to be disclosed in Schedule 2.13 of the Disclosure Schedule (the “Material Agreements”). The execution, delivery, and performance of and compliance with this Agreement, and the Transaction Documents, and the issuance and sale of the Series D Preferred Stock pursuant hereto and of the Common Stock issuable upon conversion of the Series D Preferred Stock pursuant to the Restated Certificate, will not, with or without the passage of time or giving of notice, result in any such violation, or be in conflict with or constitute a default under any such term or provision, or result in the creation of any mortgage, pledge, lien, encumbrance or charge upon any of the properties or assets of the Company or the Subsidiaries or the suspensionExchange Act Filings, revocation, impairment, forfeiture or nonrenewal of any Material Agreement, permit, license, authorization or approval applicable to the Company or the Subsidiaries, its business or operations or any of its assets or properties. The Company has avoided every condition, and has neither performed any act, the occurrence of which would result in the loss of any right granted to the Company or the Subsidiaries under any Material Agreement, nor failed to perform any act, the failure of which would result in the loss of any right granted to the Company or the Subsidiaries under any Material Agreementexcept as so disclosed.

Agreements; Action. Except as set forth on Schedule 4.6 or as disclosed in any Exchange Act Filings: (a) Except for agreements explicitly contemplated hereby and by the other Transaction Documents, there are no agreements, or proposed transactions between the Company or the Subsidiaries and any of their officers, directors, employees, affiliates or, to the Company’s knowledge, any affiliate thereof. (b) There are no agreements, understandings, instruments, contracts, instrumentsproposed transactions, judgments, orders, writs or decrees to which the Company or the any of its Subsidiaries is a party or by which the Company or the Subsidiaries it is bound that which may involve involve: (i) obligations of (contingent or otherwise) of, or payments to to, the Company or the Subsidiaries, respectively, any of such Subsidiaries in excess of $500,000200,000 (other than obligations of, or payments to, the Company or any of such Subsidiaries arising from purchase or sale agreements entered into in the ordinary course of business); or (ii) any the transfer or license of any Intellectual Property patent, copyright, trade secret or other proprietary right to or from the Company or the any of its Subsidiaries (other than licenses arising from the license to purchase of “off the Company of standard, generally commercially available, “off-the-shelf” third-party or other standard products), ; or (iii) indemnification by the Company or the Subsidiaries with respect to infringements of proprietary rights, or (iv) provisions restricting the development, manufacture or distribution of the Company’s or any of its Subsidiaries products or services of services; or (iv) indemnification by the Company or the Subsidiariesany of its Subsidiaries with respect to infringements of proprietary rights. (cb) The Since June 30, 2006 (the “Balance Sheet Date”), neither the Company has not nor any of its Subsidiaries has: (i) accrued, declared or paid any dividends dividends, or authorized or made any distribution upon or with respect to any class or series of its capital stock, ; (ii) incurred any liabilities or guaranteed any indebtedness for money borrowed or any other liabilities (other than ordinary course obligations and indebtedness incurred by the Company or any of its Subsidiaries owing to Bank of America, N.A. which indebtedness shall be paid in full simultaneously with the consummation of the transactions contemplated hereby) individually in excess of $500,000 50,000 or, in the case of indebtedness and/or liabilities individually less than $500,00050,000, in excess of $1,000,000 100,000 in the aggregate, ; (iii) made any loans or advances to any personperson or entity not in excess, individually or in the aggregate, of $100,000, other than ordinary reasonable course advances for travel expenses, ; or (iv) sold, exchanged or otherwise disposed of any of its assets or rights, other than the sale of its inventory in the ordinary course of business. (c) There has been no occurrence of any default (or similar term) in the observance or performance of any other agreement or condition relating to any indebtedness or contingent obligation of the Company or any of its Subsidiaries (including, without limitation, the indebtedness evidenced by the Subordinated Debt Documentation) beyond the period of grace (if any); for the purposes hereof, “Subordinated Debt Documentation” shall mean those documents listed on Schedule 4.6(c) hereof. (d) For the purposes of subsections (a), (b) and (c) above, all indebtedness, liabilities, agreements agreements, understandings, instruments, contracts and contracts proposed transactions involving the same person or entity (including persons or entities the Company or any Subsidiary of the Company has reason to believe are affiliated therewith) shall be aggregated for the purpose of meeting the individual minimum dollar amounts of such subsections. (e) Neither The Company maintains disclosure controls and procedures (“Disclosure Controls”) designed to ensure that information required to be disclosed by the Company nor in the Subsidiaries reports that it files or submits under the Exchange Act is recorded, processed, summarized, and reported, within the time periods specified in violation the rules and forms of the Securities and Exchange Commission (“SEC”). (f) The Company makes and keep books, records, and accounts, that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the Company’s assets. The Company maintains internal control over financial reporting (“Financial Reporting Controls”) designed by, or default under the supervision of, the Company’s principal executive and principal financial officers, and effected by the Company’s board of directors, management, and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles (“GAAP”), including that: (i) transactions are executed in accordance with management’s general or specific authorization; (ii) unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the financial statements are prevented or timely detected; (iii) transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that the Company’s receipts and expenditures are being made only in accordance with authorizations of the Company’s management and board of directors; (iv) transactions are recorded as necessary to maintain accountability for assets; and (v) the recorded accountability for assets is compared with the existing assets at reasonable intervals, and appropriate action is taken with respect to any term differences. (including without limitation any diligence obligationg) or of any provision of There is no weakness in any of the agreements set forth Company’s Disclosure Controls or Financial Reporting Controls that is required to be disclosed in Schedule 2.13 of the Disclosure Schedule (the “Material Agreements”). The execution, delivery, and performance of and compliance with this Agreement, and the Transaction Documents, and the issuance and sale of the Series D Preferred Stock pursuant hereto and of the Common Stock issuable upon conversion of the Series D Preferred Stock pursuant to the Restated Certificate, will not, with or without the passage of time or giving of notice, result in any such violation, or be in conflict with or constitute a default under any such term or provision, or result in the creation of any mortgage, pledge, lien, encumbrance or charge upon any of the properties or assets of the Company or the Subsidiaries or the suspensionExchange Act Filings, revocation, impairment, forfeiture or nonrenewal of any Material Agreement, permit, license, authorization or approval applicable to the Company or the Subsidiaries, its business or operations or any of its assets or properties. The Company has avoided every condition, and has neither performed any act, the occurrence of which would result in the loss of any right granted to the Company or the Subsidiaries under any Material Agreement, nor failed to perform any act, the failure of which would result in the loss of any right granted to the Company or the Subsidiaries under any Material Agreementexcept as so disclosed.

Agreements; Action. Except as set forth on Schedule 4.6, as disclosed in any Exchange Act Filings or, prior to consummation of the initial public offering of Common Stock, as disclosed in any Securities Act Filings]: (a) Except for agreements explicitly contemplated hereby and by the other Transaction Documents, there are no agreements, or proposed transactions between the Company or the Subsidiaries and any of their officersunderstandings, directors, employees, affiliates or, to the Company’s knowledge, any affiliate thereof. (b) There are no agreementsinstruments, contracts, instrumentsproposed transactions, judgments, orders, writs or decrees to which the Company Parent or the any of its Subsidiaries is a party or by which the Company or the Subsidiaries it is bound that which may involve involve: (i) obligations of (contingent or otherwise) of, or payments to to, the Company Parent or the Subsidiaries, respectively, any of its Subsidiaries in excess of $500,00050,000 (other than obligations of, or payments to, the Parent or any of its Subsidiaries arising from purchase or sale agreements entered into in the ordinary course of business); or (ii) any the transfer or license of any Intellectual Property patent, copyright, trade secret or other proprietary right to or from the Company Parent or the any of its Subsidiaries (other than licenses arising from the license to purchase of “off the Company of standard, generally commercially available, “off-the-shelf” third-party or other standard products), ; or (iii) indemnification by the Company or the Subsidiaries with respect to infringements of proprietary rights, or (iv) provisions restricting the development, manufacture or distribution of the Parent’s or any of its Subsidiaries products or services services; or (iv) indemnification by the Parent or any of the Company or the Subsidiariesits Subsidiaries with respect to infringements of proprietary rights. (cb) The Company has not Except as set forth in the Parent’s quarterly unaudited financial statements for its fiscal quarter ended December 31, 2004, since September 30, 2004 (the “Balance Sheet Date”), neither the Parent nor any of its Subsidiaries has: (i) accrued, declared or paid any dividends dividends, or authorized or made any distribution upon or with respect to any class or series of its capital stock, ; (ii) incurred any liabilities or guaranteed any indebtedness for money borrowed or any other liabilities (other than ordinary course obligations) individually in excess of $500,000 50,000 or, in the case of indebtedness and/or liabilities individually less than $500,00050,000, in excess of $1,000,000 100,000 in the aggregate, ; (iii) made any loans or advances to any personperson or entity not in excess, individually or in the aggregate, of $100,000, other than ordinary reasonable course advances for travel expenses, ; or (iv) sold, exchanged or otherwise disposed of any of its assets or rights, other than the sale of its inventory in the ordinary course of business. (dc) For the purposes of subsections (ba) and (cb) above, all indebtedness, liabilities, agreements agreements, understandings, instruments, contracts and contracts proposed transactions involving the same person or entity (including persons or entities the Parent or any Subsidiary of the Parent has reason to believe are affiliated therewith) shall be aggregated for the purpose of meeting the individual minimum dollar amounts of such subsections. (d) The Parent maintains disclosure controls and procedures (“Disclosure Controls”) designed to ensure that information required to be disclosed by the Parent in the reports that it files or submits under the Exchange Act is recorded, processed, summarized, and reported, within the time periods specified in the rules and forms of the Securities and Exchange Commission (“SEC”). (e) Neither The Parent makes and keep books, records, and accounts, that, in reasonable detail, accurately and fairly reflect the Company nor transactions and dispositions of the Subsidiaries Parent’s assets. The Parent maintains internal control over financial reporting (“Financial Reporting Controls”) designed by, or under the supervision of, the Parent’s principal executive and principal financial officers, and effected by the Parent’s board of directors, management, and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles (“GAAP”), including that: (i) transactions are executed in accordance with management’s general or specific authorization; (ii) unauthorized acquisition, use, or disposition of the Parent’s assets that could have a material effect on the financial statements are prevented or timely detected; (iii) transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that the Parent’s receipts and expenditures are being made only in accordance with authorizations of the Parent’s management and board of directors; (iv) transactions are recorded as necessary to maintain accountability for assets; and (v) the recorded accountability for assets is compared with the existing assets at reasonable intervals, and appropriate action is taken with respect to any differences. (f) There is no weakness in violation or default of any term (including without limitation any diligence obligation) or of any provision of any of the agreements set forth Parent’s Disclosure Controls or Financial Reporting Controls that is required to be disclosed in Schedule 2.13 of the Disclosure Schedule (the “Material Agreements”). The execution, delivery, and performance of and compliance with this Agreement, and the Transaction Documents, and the issuance and sale of the Series D Preferred Stock pursuant hereto and of the Common Stock issuable upon conversion of the Series D Preferred Stock pursuant to the Restated Certificate, will not, with or without the passage of time or giving of notice, result in any such violation, or be in conflict with or constitute a default under any such term or provision, or result in the creation of any mortgage, pledge, lien, encumbrance or charge upon any of the properties or assets of the Company or the Subsidiaries or the suspensionExchange Act Filings, revocation, impairment, forfeiture or nonrenewal of any Material Agreement, permit, license, authorization or approval applicable to the Company or the Subsidiaries, its business or operations or any of its assets or properties. The Company has avoided every condition, and has neither performed any act, the occurrence of which would result in the loss of any right granted to the Company or the Subsidiaries under any Material Agreement, nor failed to perform any act, the failure of which would result in the loss of any right granted to the Company or the Subsidiaries under any Material Agreementexcept as so disclosed.

Agreements; Action. (a) Except for the documents listed in the Exhibit Index to the Annual Report on Form 10-K for the year ended December 31, 2008, or contained in Quarterly Reports on Form 10-Q or Current Reports on Form 8-K filed since that date, or other contracts or agreements explicitly referred to or contemplated hereby and by the other Transaction Documentsherein or therein, there are no material agreements, understandings or proposed transactions between the Company or the Subsidiaries and any of their its officers, directors, employees, affiliates or, to the Company’s knowledge, or any affiliate thereof. (b) There are no agreementsSince the Statement Date, contracts, instruments, judgments, orders, writs or decrees to which the Company or the Subsidiaries is a party or by which the Company or the Subsidiaries is bound that may involve (i) obligations of or payments to the Company or the Subsidiaries, respectively, in excess of $500,000, (ii) any license of any Intellectual Property to or from the Company or the Subsidiaries (other than the license to the Company of standard, generally commercially available, “off-the-shelf” third-party products), (iii) indemnification by the Company or the Subsidiaries with respect to infringements of proprietary rights, or (iv) provisions restricting the development, manufacture or distribution of the products or services of the Company or the Subsidiaries. (c) The Company has not (i) accrued, declared or paid any dividends dividends, or authorized or made any distribution upon or with respect to any class or series of its capital stock, (ii) incurred any liabilities or guaranteed any indebtedness for money borrowed or any other liabilities (other than with respect to dividend obligations, distributions, indebtedness and other obligations incurred in the ordinary course of business or as disclosed in the Financial Statements) individually in excess of $500,000 50,000 or, in the case of indebtedness and/or liabilities individually less than $500,00050,000, in excess of $1,000,000 200,000 in the aggregate, (iii) made any loans or advances to any person, other than ordinary reasonable advances for travel expenses, or (iv) sold, exchanged or otherwise disposed of any of its assets or rights, other than the sale of its inventory in the ordinary course of business. (d) . For the purposes of subsections (b) and (c) abovethis subsection, all indebtedness, liabilities, agreements agreements, understandings, instruments, contracts and contracts proposed transactions involving the same person or entity (including persons or entities the Company has reason to believe are affiliated therewith) shall be aggregated for the purpose of meeting the individual minimum dollar amounts of such subsections. (ec) Neither Other than as described in the Schedule of Exceptions, the Company nor the Subsidiaries is in violation not under any binding obligation to any third party (other than obligations to keep information or default discussions confidential) as a result of any term discussion or negotiation undertaken in the past twelve months relating to (including without limitation any diligence obligationi) the consolidation or of any provision of any merger of the agreements set forth in Schedule 2.13 Company with or into any such corporation or corporations, (ii) the sale, conveyance, or disposition of all or substantially all of the Disclosure Schedule (the “Material Agreements”). The execution, delivery, and performance of and compliance with this Agreement, and the Transaction Documents, and the issuance and sale of the Series D Preferred Stock pursuant hereto and of the Common Stock issuable upon conversion of the Series D Preferred Stock pursuant to the Restated Certificate, will not, with or without the passage of time or giving of notice, result in any such violation, or be in conflict with or constitute a default under any such term or provision, or result in the creation of any mortgage, pledge, lien, encumbrance or charge upon any of the properties or assets of the Company Company, or a transaction or series of related transactions in which more than 50% of the Subsidiaries or the suspension, revocation, impairment, forfeiture or nonrenewal voting power of any Material Agreement, permit, license, authorization or approval applicable to the Company is disposed of, or (iii) any other form of acquisition, liquidation, dissolution, or winding up, of the Subsidiaries, its business or operations or any of its assets or properties. The Company has avoided every condition, and has neither performed any act, the occurrence of which would result in the loss of any right granted to the Company or the Subsidiaries under any Material Agreement, nor failed to perform any act, the failure of which would result in the loss of any right granted to the Company or the Subsidiaries under any Material AgreementCompany.

Agreements; Action. (a) Except for agreements explicitly contemplated hereby and by agreements between the other Transaction DocumentsCompany and its employees with respect to the sale of the Company's Common Stock, there are no agreements, understandings or proposed transactions between the Company or the Subsidiaries and any of their its officers, directors, employees, affiliates or, to the Company’s knowledge, or any affiliate thereof. (b) There are no agreements, understandings, instruments, contracts, instrumentsproposed transactions, judgments, orders, writs or decrees to which the Company or the Subsidiaries is a party or to its knowledge by which the Company or the Subsidiaries it is bound that which may involve (i) obligations of (contingent or otherwise) of, or payments to to, the Company or the Subsidiaries, respectively, in excess of $500,00050,000 (other than obligations of, or payments to, the Company arising from purchase or sale agreements entered into in the ordinary course of business), or (ii) any the transfer or license of any Intellectual Property patent, copyright, trade secret or other proprietary right to or from the Company or the Subsidiaries (other than licenses arising from the license to purchase of "off the Company of standard, generally commercially available, “off-the-shelf” third-party " or other standard products), or (iii) indemnification by the Company or the Subsidiaries with respect to infringements of proprietary rightsrights (other than indemnification obligations arising from purchase, sale or (iv) provisions restricting license agreements entered into in the development, manufacture or distribution ordinary course of the products or services of the Company or the Subsidiariesbusiness). (c) The Company has not (i) accrued, declared or paid any dividends dividends, or authorized or made any distribution upon or with respect to any class or series of its capital stock, (ii) incurred any liabilities or guaranteed any indebtedness for money borrowed or any other liabilities (other than with respect to dividend obligations, distributions, indebtedness and other obligations incurred in the ordinary course of business or as disclosed in the Financial Statements) individually in excess of $500,000 50,000 or, in the case of indebtedness and/or liabilities individually less than $500,00050,000, in excess of $1,000,000 100,000 in the aggregate, (iii) made any loans or advances to any person, other than ordinary reasonable advances for travel expenses, or (iv) sold, exchanged or otherwise disposed of any of its assets or rights, other than the sale of its inventory in the ordinary course of business. (d) For the purposes of subsections (b) and (c) above, all indebtedness, liabilities, agreements agreements, understandings, instruments, contracts and contracts proposed transactions involving the same person or entity (including persons or entities the Company has reason to believe are affiliated therewith) shall be aggregated for the purpose of meeting the individual minimum dollar amounts of such subsections. (e) Neither the Company nor the Subsidiaries is in violation or default of any term (including without limitation any diligence obligation) or of any provision of any of the agreements set forth in Schedule 2.13 of the Disclosure Schedule (the “Material Agreements”). The execution, delivery, and performance of and compliance with this Agreement, and the Transaction Documents, and the issuance and sale of the Series D Preferred Stock pursuant hereto and of the Common Stock issuable upon conversion of the Series D Preferred Stock pursuant to the Restated Certificate, will not, with or without the passage of time or giving of notice, result in any such violation, or be in conflict with or constitute a default under any such term or provision, or result in the creation of any mortgage, pledge, lien, encumbrance or charge upon any of the properties or assets of the Company or the Subsidiaries or the suspension, revocation, impairment, forfeiture or nonrenewal of any Material Agreement, permit, license, authorization or approval applicable to the Company or the Subsidiaries, its business or operations or any of its assets or properties. The Company has avoided every condition, and has neither performed any act, the occurrence of which would result in the loss of any right granted to the Company or the Subsidiaries under any Material Agreement, nor failed to perform any act, the failure of which would result in the loss of any right granted to the Company or the Subsidiaries under any Material Agreement.

Agreements; Action. (a) Except for agreements explicitly contemplated hereby and by agreements between the other Transaction DocumentsCompany and its employees with respect to the sale of the Company’s Common Stock, there are no agreements, understandings or proposed transactions between the Company or the Subsidiaries and any of their its officers, directors, employees, affiliates or, to the Company’s knowledge, or any affiliate thereof. (b) There are no agreements, contractsunderstandings, instruments, contracts, judgments, orders, writs or decrees to which the Company or the Subsidiaries is a party or to its knowledge by which the Company or the Subsidiaries it is bound that which may involve (i) obligations of (contingent or otherwise) of, or payments to to, the Company or the Subsidiaries, respectively, in excess of $500,00050,000 (other than obligations of, or payments to, the Company arising from purchase or sale agreements entered into in the ordinary course of business), or (ii) any the transfer or license of any Intellectual Property patent, copyright, trade secret or other proprietary right to or from the Company or the Subsidiaries (other than licenses arising from the license to purchase of “off the Company of standard, generally commercially available, “off-the-shelf” third-party or other standard products), or (iii) indemnification by the Company or the Subsidiaries with respect to infringements of proprietary rights, rights (other than indemnification obligations arising from purchase or (iv) provisions restricting sale or license agreements entered into in the development, manufacture or distribution ordinary course of the products or services of the Company or the Subsidiariesbusiness). (c) The Company has not (i) accrued, declared or paid any dividends dividends, or authorized or made any distribution upon or with respect to any class or series of its capital stock, (ii) incurred any liabilities or guaranteed any indebtedness for money borrowed or any other liabilities (other than with respect to dividend obligations, distributions, indebtedness and other obligations incurred in the ordinary course of business) individually in excess of $500,000 50,000 or, in the case of indebtedness and/or liabilities individually less than $500,00050,000, in excess of $1,000,000 100,000 in the aggregate, (iii) made any loans or advances to any person, other than ordinary reasonable advances for travel expenses, or (iv) sold, exchanged or otherwise disposed of any of its assets or rights, other than the sale of its inventory in the ordinary course of business. (d) For the purposes of subsections (b) and (c) above, all indebtedness, liabilities, agreements agreements, understandings, instruments, contracts and contracts proposed transactions involving the same person or entity (including persons or entities the Company has reason to believe are affiliated therewith) shall be aggregated for the purpose of meeting the individual minimum dollar amounts of such subsections. (e) Neither the Company nor the Subsidiaries is in violation or default of any term (including without limitation any diligence obligation) or of any provision of any of the agreements set forth in Schedule 2.13 of the Disclosure Schedule (the “Material Agreements”). The execution, delivery, and performance of and compliance with this Agreement, and the Transaction Documents, and the issuance and sale of the Series D Preferred Stock pursuant hereto and of the Common Stock issuable upon conversion of the Series D Preferred Stock pursuant to the Restated Certificate, will not, with or without the passage of time or giving of notice, result in any such violation, or be in conflict with or constitute a default under any such term or provision, or result in the creation of any mortgage, pledge, lien, encumbrance or charge upon any of the properties or assets of the Company or the Subsidiaries or the suspension, revocation, impairment, forfeiture or nonrenewal of any Material Agreement, permit, license, authorization or approval applicable to the Company or the Subsidiaries, its business or operations or any of its assets or properties. The Company has avoided every condition, and has neither performed any act, the occurrence of which would result in the loss of any right granted to the Company or the Subsidiaries under any Material Agreement, nor failed to perform any act, the failure of which would result in the loss of any right granted to the Company or the Subsidiaries under any Material Agreement.

Agreements; Action. (aExcept as set forth on Schedule 12(f) Except for agreements explicitly contemplated hereby and by the other Transaction Documents, there are no agreements, or proposed transactions between the Company or the Subsidiaries and as disclosed in any of their officers, directors, employees, affiliates or, to the Company’s knowledge, any affiliate thereof.Exchange Act Filings: (bi) There are no agreements, understandings, instruments, contracts, instrumentsproposed transactions, judgments, orders, writs or decrees to which the Company it or the any of its Subsidiaries is a party or to its knowledge by which the Company or the Subsidiaries it is bound that which may involve involve: (i) obligations of (contingent or otherwise) of, or payments to the Company to, it or the Subsidiaries, respectively, any of its Subsidiaries in excess of $500,000100,000 (other than obligations of, or payments to, it or any of its Subsidiaries arising from purchase or sale agreements entered into in the ordinary course of business); or (ii) any the transfer or license of any Intellectual Property patent, copyright, trade secret or other proprietary right to or from the Company or the Subsidiaries it (other than licenses arising from the license to purchase of "off the Company of standard, generally commercially available, “off-the-shelf” third-party " or other standard products), ; or (iii) indemnification by the Company or the Subsidiaries with respect to infringements of proprietary rights, or (iv) provisions restricting the development, manufacture or distribution of the its or any of its Subsidiaries' products or services services; or (iv) indemnification by it or any of the Company or the Subsidiariesits Subsidiaries with respect to infringements of proprietary rights. (cii) The Company has not Since September 30, 2005 (the "Balance Sheet Date") neither it nor any of its Subsidiaries has: (i) accrued, declared or paid any dividends dividends, or authorized or made any distribution upon or with respect to any class or series of its capital stock, ; (ii) incurred any liabilities or guaranteed any indebtedness for money borrowed or any other liabilities (other than ordinary course obligations) individually in excess of $500,000 50,000 or, in the case of indebtedness and/or liabilities individually less than $500,00050,000, in excess of $1,000,000 100,000 in the aggregate, ; (iii) made any loans or advances to any personPerson not in excess, individually or in the aggregate, of $100,000, other than ordinary reasonable advances for travel expenses, ; or (iv) sold, exchanged or otherwise disposed of any of its assets or rights, other than the sale of its inventory Inventory in the ordinary course of business. (diii) For the purposes of subsections (bi) and (cii) aboveof this Section 12(f), all indebtedness, liabilities, agreements agreements, understandings, instruments, contracts and contracts proposed transactions involving the same person Person (including Persons it or entity any of its applicable Subsidiaries has reason to believe are affiliated therewith or with any Subsidiary thereof) shall be aggregated for the purpose of meeting the individual minimum dollar amounts of such subsections. (eiv) Neither the Company nor Parent maintains disclosure controls and procedures ("Disclosure Controls") designed to ensure that information required to be disclosed by the Subsidiaries Parent in the reports that it files or submits under the Exchange Act is recorded, processed, summarized, and reported, within the time periods specified in violation the rules and forms of the SEC. (v) The Parent makes and keeps books, records, and accounts, that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of its assets. It maintains internal control over financial reporting ("Financial Reporting Controls") designed by, or default under the supervision of, its principal executive and principal financial officers, and effected by its board of directors, management, and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP, including that: (1) transactions are executed in accordance with management's general or specific authorization; (2) unauthorized acquisition, use, or disposition of the Parent's assets that could have a material effect on the financial statements are prevented or timely detected; (3) transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that its receipts and expenditures are being made only in accordance with authorizations of the Parent's management and board of directors; (4) transactions are recorded as necessary to maintain accountability for assets; and (5) the recorded accountability for assets is compared with the existing assets at reasonable intervals, and appropriate action is taken with respect to any term differences. (including without limitation vi) There is no weakness in any diligence obligation) of its Disclosure Controls or of any provision of Financial Reporting Controls that is required to be disclosed in any of the agreements set forth in Schedule 2.13 of the Disclosure Schedule (the “Material Agreements”). The executionExchange Act Filings, delivery, and performance of and compliance with this Agreement, and the Transaction Documents, and the issuance and sale of the Series D Preferred Stock pursuant hereto and of the Common Stock issuable upon conversion of the Series D Preferred Stock pursuant to the Restated Certificate, will not, with or without the passage of time or giving of notice, result in any such violation, or be in conflict with or constitute a default under any such term or provision, or result in the creation of any mortgage, pledge, lien, encumbrance or charge upon any of the properties or assets of the Company or the Subsidiaries or the suspension, revocation, impairment, forfeiture or nonrenewal of any Material Agreement, permit, license, authorization or approval applicable to the Company or the Subsidiaries, its business or operations or any of its assets or properties. The Company has avoided every condition, and has neither performed any act, the occurrence of which would result in the loss of any right granted to the Company or the Subsidiaries under any Material Agreement, nor failed to perform any act, the failure of which would result in the loss of any right granted to the Company or the Subsidiaries under any Material Agreementexcept as so disclosed.

Agreements; Action. (aExcept as set forth on Schedule 12(f) Except for agreements explicitly contemplated hereby and by the other Transaction Documents, there are no agreements, or proposed transactions between the Company or the Subsidiaries and as disclosed in any of their officers, directors, employees, affiliates or, to the Company’s knowledge, any affiliate thereof.Exchange Act Filings: (bi) There are no agreements, understandings, instruments, contracts, instrumentsproposed transactions, judgments, orders, writs or decrees to which the Company or the Subsidiaries is a party or to its knowledge by which the Company or the Subsidiaries it is bound that which may involve involve: (i) obligations of (contingent or otherwise) of, or payments to the to, Company or the Subsidiaries, respectively, in excess of $500,00050,000 (other than obligations of, or payments to, Company arising from purchase or sale agreements entered into in the ordinary course of business); or (ii) any the transfer or license of any Intellectual Property patent, copyright, trade secret or other proprietary right to or from the Company or the Subsidiaries (other than licenses arising from the license to purchase of "off the Company of standard, generally commercially available, “off-the-shelf” third-party " or other standard products), ; or (iii) indemnification by the Company or the Subsidiaries with respect to infringements of proprietary rights, or (iv) provisions restricting the development, manufacture or distribution of the Company's products or services services; or (iv) indemnification by Company with respect to infringements of the Company or the Subsidiariesproprietary rights. (cii) The Since June 30, 2004, Company has not not: (i) accrued, declared or paid any dividends dividends, or authorized or made any distribution upon or with respect to any class or series of its capital stock, ; (ii) incurred any liabilities or guaranteed any indebtedness for money borrowed or any other liabilities (other than ordinary course obligations) individually in excess of $500,000 50,000 or, in the case of indebtedness and/or liabilities individually less than $500,00050,000, in excess of $1,000,000 100,000 in the aggregate, ; (iii) made any loans or advances to any personperson not in excess, individually or in the aggregate, of $100,000, other than ordinary reasonable advances for travel expenses, ; or (iv) sold, exchanged or otherwise disposed of any of its assets or rights, other than the sale of its inventory in the ordinary course of business. (diii) For the purposes of subsections (bi) and (cii) of this Section 12(f) above, all indebtedness, liabilities, agreements agreements, understandings, instruments, contracts and contracts proposed transactions involving the same person or entity (including persons or entities Company has reason to believe are affiliated therewith) shall be aggregated for the purpose of meeting the individual minimum dollar amounts of such subsections. (e) Neither the Company nor the Subsidiaries is in violation or default of any term (including without limitation any diligence obligation) or of any provision of any of the agreements set forth in Schedule 2.13 of the Disclosure Schedule (the “Material Agreements”). The execution, delivery, and performance of and compliance with this Agreement, and the Transaction Documents, and the issuance and sale of the Series D Preferred Stock pursuant hereto and of the Common Stock issuable upon conversion of the Series D Preferred Stock pursuant to the Restated Certificate, will not, with or without the passage of time or giving of notice, result in any such violation, or be in conflict with or constitute a default under any such term or provision, or result in the creation of any mortgage, pledge, lien, encumbrance or charge upon any of the properties or assets of the Company or the Subsidiaries or the suspension, revocation, impairment, forfeiture or nonrenewal of any Material Agreement, permit, license, authorization or approval applicable to the Company or the Subsidiaries, its business or operations or any of its assets or properties. The Company has avoided every condition, and has neither performed any act, the occurrence of which would result in the loss of any right granted to the Company or the Subsidiaries under any Material Agreement, nor failed to perform any act, the failure of which would result in the loss of any right granted to the Company or the Subsidiaries under any Material Agreement.

Agreements; Action. Except as set forth on Schedule 4.6 or as disclosed in any Exchange Act Filings: (a) Except for agreements explicitly contemplated hereby and by the other Transaction Documents, there are no agreements, or proposed transactions between the Company or the Subsidiaries and any of their officersunderstandings, directors, employees, affiliates or, to the Company’s knowledge, any affiliate thereof. (b) There are no agreementsinstruments, contracts, instrumentsproposed transactions, judgments, orders, writs or decrees to which the Company or the any of its Subsidiaries is a party or by which the Company or the Subsidiaries it is bound that which may involve involve: (i) obligations of (contingent or otherwise) of, or payments to to, the Company or the Subsidiaries, respectively, any of its Subsidiaries in excess of $500,00075,000 (other than obligations of, or payments to, the Company or any of its Subsidiaries arising from purchase or sale agreements entered into in the ordinary course of business); or (ii) any the transfer or license of any Intellectual Property patent, copyright, trade secret or other proprietary right to or from the Company or the any of its Subsidiaries (other than licenses arising from the license to purchase of "off the Company of standard, generally commercially available, “off-the-shelf” third-party " or other standard products), ; or (iii) indemnification by the Company or the Subsidiaries with respect to infringements of proprietary rights, or (iv) provisions restricting the development, manufacture or distribution of the Company's or any of its Subsidiaries products or services of services; or (iv) indemnification by the Company or the Subsidiariesany of its Subsidiaries with respect to infringements of proprietary rights. (cb) The since June 29, 2004 (the "Balance Sheet Date"), neither the Company has not nor any of its Subsidiaries has: (i) accrued, declared or paid any dividends dividends, or authorized or made any distribution upon or with respect to any class or series of its capital stock, ; (ii) incurred any liabilities or guaranteed any indebtedness for money borrowed or any other liabilities (other than ordinary course obligations) individually in excess of $500,000 75,000 or, in the case of indebtedness and/or liabilities individually less than $500,00075,000, in excess of $1,000,000 100,000 in the aggregate, ; (iii) made any loans or advances to any personperson or entity not in excess, individually or in the aggregate, of $100,000, other than ordinary reasonable course advances for travel expenses, ; or (iv) sold, exchanged or otherwise disposed of any of its assets or rights, other than the sale of its inventory in the ordinary course of business. (dc) For the purposes of subsections (ba) and (cb) above, all indebtedness, liabilities, agreements agreements, understandings, instruments, contracts and contracts proposed transactions involving the same person or entity (including persons or entities the Company or any Subsidiary of the Company has reason to believe are affiliated therewith) shall be aggregated for the purpose of meeting the individual minimum dollar amounts of such subsections. (d) The Company maintains disclosure controls and procedures ("Disclosure Controls") designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized, and reported, within the time periods specified in the rules and forms of the Securities and Exchange Commission ("SEC"). (e) Neither The Company makes and keeps books, records, and accounts, that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the Company's assets. The Company nor maintains internal control over financial reporting ("Financial Reporting Controls") designed by, or under the Subsidiaries supervision of, the Company's principal executive and principal financial officers, and effected by the Company's board of directors, management, and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles ("GAAP"), including that: (i) transactions are executed in accordance with management's general or specific authorization; (ii) unauthorized acquisition, use, or disposition of the Company's assets that could have a material effect on the financial statements are prevented or timely detected; (iii) transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that the Company's receipts and expenditures are being made only in accordance with authorizations of the Company's management and board of directors; (iv) transactions are recorded as necessary to maintain accountability for assets; and (v) the recorded accountability for assets is compared with the existing assets at reasonable intervals, and appropriate action is taken with respect to any differences. (f) There is no material weakness in violation or default of any term (including without limitation any diligence obligation) or of any provision of any of the agreements set forth Company's Disclosure Controls or Financial Reporting Controls that is required to be disclosed in Schedule 2.13 of the Disclosure Schedule (the “Material Agreements”). The execution, delivery, and performance of and compliance with this Agreement, and the Transaction Documents, and the issuance and sale of the Series D Preferred Stock pursuant hereto and of the Common Stock issuable upon conversion of the Series D Preferred Stock pursuant to the Restated Certificate, will not, with or without the passage of time or giving of notice, result in any such violation, or be in conflict with or constitute a default under any such term or provision, or result in the creation of any mortgage, pledge, lien, encumbrance or charge upon any of the properties or assets of the Company or the Subsidiaries or the suspensionExchange Act Filings, revocation, impairment, forfeiture or nonrenewal of any Material Agreement, permit, license, authorization or approval applicable to the Company or the Subsidiaries, its business or operations or any of its assets or properties. The Company has avoided every condition, and has neither performed any act, the occurrence of which would result in the loss of any right granted to the Company or the Subsidiaries under any Material Agreement, nor failed to perform any act, the failure of which would result in the loss of any right granted to the Company or the Subsidiaries under any Material Agreementexcept as so disclosed.

Agreements; Action. (a) Except for agreements explicitly contemplated hereby and by the other Transaction Documents, there are no agreements, or proposed transactions between the Company or the Subsidiaries and any of their officers, directors, employees, affiliates or, to the Company’s knowledge, any affiliate thereof. (b) There are no agreements, understandings, instruments, contracts, instrumentsproposed transactions, judgments, orders, writs or decrees to which the Company or the Subsidiaries is a party or to its knowledge by which the Company or the Subsidiaries it is bound that which may involve (i) obligations of (contingent or otherwise) of, or payments to to, the Company or the Subsidiaries, respectively, in excess of $500,00010,000 (other than obligations of, or payments to, the Company arising from purchase or sale agreements entered into in the ordinary course of business), or (ii) any the license of any Intellectual Property patent, copyright, trade secret or other proprietary right to or from the Company or the Subsidiaries (other than licenses arising from the license to purchase of "off the Company of standard, generally commercially available, “off-the-shelf” third-party " or other standard products), or (iii) indemnification by the Company or the Subsidiaries with respect to infringements of proprietary rights, or (iv) provisions restricting or affecting the development, manufacture or distribution of the Company's products or services of services, or (iv) indemnification by the Company with respect to infringements of proprietary rights (other than indemnification obligations arising from purchase or sale or license agreements entered into in the Subsidiariesordinary course of business). (cb) The Company has not (i) accrued, declared or paid any dividends dividends, or authorized or made any distribution upon or with respect to any class or series of its capital stock, (ii) incurred any liabilities or guaranteed any indebtedness for money borrowed or any other liabilities (other than with respect to dividend obligations, distributions, indebtedness and other obligations incurred in the ordinary course of business) individually in excess of $500,000 10,000 or, in the case of indebtedness and/or liabilities individually less than $500,00010,000, in excess of $1,000,000 25,000 in the aggregate, (iii) made any loans or advances to any person, other than ordinary reasonable advances for travel expenses, or (iv) sold, exchanged or otherwise disposed of any of its assets or rights, other than the sale of its inventory in the ordinary course of business. (dc) For the purposes of subsections (ba) and (cb) above, all indebtedness, liabilities, agreements agreements, understandings, instruments, contracts and contracts proposed transactions involving the same person or entity (including persons or entities the Company has reason to believe are affiliated therewith) shall be aggregated for the purpose of meeting the individual minimum dollar amounts of such subsections. (ed) Neither The Company has not engaged in the past three (3) months in any discussion (i) with any representative of any corporation or corporations regarding the consolidation or merger of the Company nor with or into any such corporation or corporations, (ii) with any corporation, partnership, association or other business entity or any individual regarding the Subsidiaries is in violation sale, conveyance or default disposition of any term (including without limitation any diligence obligation) all or of any provision of any substantially all of the agreements set forth in Schedule 2.13 of the Disclosure Schedule (the “Material Agreements”). The execution, delivery, and performance of and compliance with this Agreement, and the Transaction Documents, and the issuance and sale of the Series D Preferred Stock pursuant hereto and of the Common Stock issuable upon conversion of the Series D Preferred Stock pursuant to the Restated Certificate, will not, with or without the passage of time or giving of notice, result in any such violation, or be in conflict with or constitute a default under any such term or provision, or result in the creation of any mortgage, pledge, lien, encumbrance or charge upon any of the properties or assets of the Company Company, or a transaction or series of related transactions in which more than fifty percent (50%) of the Subsidiaries or the suspension, revocation, impairment, forfeiture or nonrenewal voting power of any Material Agreement, permit, license, authorization or approval applicable to the Company is disposed of, or (iii) regarding any other form of acquisition, liquidation, dissolution or winding up of the Subsidiaries, its business or operations or any of its assets or properties. The Company has avoided every condition, and has neither performed any act, the occurrence of which would result in the loss of any right granted to the Company or the Subsidiaries under any Material Agreement, nor failed to perform any act, the failure of which would result in the loss of any right granted to the Company or the Subsidiaries under any Material AgreementCompany.

Agreements; Action. Except with respect to (i) the outstanding Bridge Loan Debenture dated December 14, 2006 (as amended), in the original principal amount of $172,500 (" FCP Debenture ") with Fountainhead Capital Partners ("FCP"), (ii) the Warrant to Purchase 50.22 Membership Units of the Company (now 805,931 shares of the Company's common stock) dated December 15, 2006 (the " FCP Warrant "), (iii) the investment opportunity granted under the Option Agreement with FCP dated December 14, 2006 (" FCP Option "), or as specifically disclosed in the Disclosure Schedule: (a) Except for agreements explicitly contemplated hereby and by the other Transaction Documents, there There are no agreements, understandings or proposed transactions between the Company or the Subsidiaries and any of their its officers, directors, employeesshareholders, affiliates or, to the Company’s knowledge, or any affiliate thereof. (b) There are no contracts, agreements, contractsinstruments, instrumentsleases, commitments, understandings, proposed transactions, judgments, orders, writs or decrees decree to which the Company or the Subsidiaries is a party or by which the Company or the Subsidiaries it is bound that may involve (i) obligations of (contingent or otherwise) of, or payments to to, the Company or the Subsidiaries, respectively, in excess of $500,000, 25,000; (ii) the granting of any rights affecting the development, manufacture, licensing, marketing, sale or distribution of the Company's products and services; (iii) the guarantee or indemnity of any indebtedness of any other person, firm or entity; (iv) the license of any Intellectual Property patent, copyright, trade secret or other proprietary right to or from the Company Company; or (v) the Subsidiaries (other than the license to the Company of standard, generally commercially available, “off-the-shelf” third-party products), (iii) indemnification by the Company or the Subsidiaries with respect to infringements of proprietary rights, or (iv) provisions restricting the development, manufacture or distribution of the products or services of the Company or the Subsidiaries. (c) The Company has not (i) accrued, declared or paid any dividends dividend or authorized or made any distribution upon or with respect to any class or series of its capital stockequity securities, (ii) incurred any liabilities or guaranteed any indebtedness for from money borrowed or any other liabilities individually in excess of $500,000 10,000 or, in the case of indebtedness and/or liabilities individually less than $500,00010,000, in excess of $1,000,000 25,000 in the aggregate, (iii) made any loans or advances to any person, other than ordinary reasonable advances for travel expenses, or (iv) sold, exchanged or otherwise disposed of any of its assets or rights, other than the sale of its inventory rights except in the ordinary course of its business. (d) For the purposes of subsections (b) and (c) above, all indebtedness, liabilities, agreements agreements, understandings, instruments, contracts and contracts proposed transactions involving the same person or entity (including persons or entities the Company has reason to believe are affiliated therewith) shall be aggregated for the purpose of meeting the individual minimum dollar amounts of such subsectionsfor each subsection. (e) Neither the Company nor the Subsidiaries is in violation or default of any term (including without limitation any diligence obligation) or of any provision of any of the agreements set forth in Schedule 2.13 of the Disclosure Schedule (the “Material Agreements”). The execution, delivery, and performance of and compliance with this Agreement, and the Transaction Documents, and the issuance and sale of the Series D Preferred Stock pursuant hereto and of the Common Stock issuable upon conversion of the Series D Preferred Stock pursuant to the Restated Certificate, will not, with or without the passage of time or giving of notice, result in any such violation, or be in conflict with or constitute a default under any such term or provision, or result in the creation of any mortgage, pledge, lien, encumbrance or charge upon any of the properties or assets of the Company or the Subsidiaries or the suspension, revocation, impairment, forfeiture or nonrenewal of any Material Agreement, permit, license, authorization or approval applicable to the Company or the Subsidiaries, its business or operations or any of its assets or properties. The Company has avoided every condition, and has neither performed any act, the occurrence of which would result in the loss of any right granted to the Company or the Subsidiaries under any Material Agreement, nor failed to perform any act, the failure of which would result in the loss of any right granted to the Company or the Subsidiaries under any Material Agreement.

Agreements; Action. (a) Except for agreements explicitly contemplated hereby and by agreements between the other Transaction DocumentsCompany and its employees with respect to the sale of the Company’s Common Stock, there are no agreements, understandings or proposed transactions between the Company or the Subsidiaries and any of their its officers, directors, employees, affiliates or, to the Company’s knowledge, or any affiliate thereof. (b) . There are no agreements, understandings, instruments, contracts, instrumentsproposed transactions, judgments, orders, writs or decrees to which the Company or the Subsidiaries is a party or to its knowledge by which the Company or the Subsidiaries it is bound that which may involve (i) obligations of (contingent or otherwise) of, or payments to to, the Company or the Subsidiaries, respectively, in excess of $500,00025,000 (other than obligations of, or payments to, the Company arising from purchase or sale agreements entered into in the ordinary course of business), or (ii) any the transfer or license of any Intellectual Property patent, copyright, trade secret or other proprietary right to or from the Company or the Subsidiaries (other than licenses arising from the license to purchase of “off the Company of standard, generally commercially available, “off-the-shelf” third-party or other standard products), or (iii) indemnification by the Company or the Subsidiaries with respect to infringements of proprietary rightsrights (other than indemnification obligations arising from purchase, sale or (iv) provisions restricting license agreements entered into in the development, manufacture or distribution ordinary course of the products or services of the Company or the Subsidiaries. (c) business). The Company has not (i) accrued, declared or paid any dividends dividends, or authorized or made any distribution upon or with respect to any class or series of its capital stock, (ii) incurred any liabilities or guaranteed any indebtedness for money borrowed or any other liabilities (other than with respect to dividend obligations, distributions, indebtedness and other obligations incurred in the ordinary course of business) individually in excess of $500,000 or, in the case of indebtedness and/or liabilities individually less than $500,000, in excess of $1,000,000 in the aggregate, 50,000 (iii) made any loans or advances to any person, other than ordinary reasonable advances for travel expensesexpenses in excess of $25,000, or (iv) sold, exchanged or otherwise disposed of any of its assets or rights, other than the sale of its inventory in the ordinary course of business. . Obligations to Related Parties. There are no obligations of the Company to officers, directors, shareholders, or employees of the Company other than (da) For the purposes for payment of subsections salary for services rendered, (b) reimbursement for reasonable expenses incurred on behalf of the Company and (c) above, for other standard employee benefits made generally available to all indebtedness, liabilities, agreements and contracts involving the same person or entity shall be aggregated for the purpose of meeting the individual minimum dollar amounts of such subsections. (e) Neither the Company nor the Subsidiaries is in violation or default of any term (including without limitation any diligence obligation) or of any provision of any of the agreements set forth in Schedule 2.13 of the Disclosure Schedule (the “Material Agreements”). The execution, delivery, and performance of and compliance with this Agreement, and the Transaction Documents, and the issuance and sale of the Series D Preferred Stock pursuant hereto and of the Common Stock issuable upon conversion of the Series D Preferred Stock pursuant to the Restated Certificate, will not, with or without the passage of time or giving of notice, result in any such violation, or be in conflict with or constitute a default under any such term or provision, or result in the creation of any mortgage, pledge, lien, encumbrance or charge upon any of the properties or assets of the Company or the Subsidiaries or the suspension, revocation, impairment, forfeiture or nonrenewal of any Material Agreement, permit, license, authorization or approval applicable to the Company or the Subsidiaries, its business or operations or any of its assets or propertiesemployees. The Company has avoided every condition, and has neither performed any act, the occurrence of which would result in the loss is not a guarantor or indemnitor of any right granted to the Company or the Subsidiaries under any Material Agreement, nor failed to perform any act, the failure of which would result in the loss indebtedness of any right granted to the Company other person, firm or the Subsidiaries under any Material Agreementcorporation.

Agreements; Action. Except (i) as set forth on Schedule 4.6, (ii) for the convertible loan agreement between the Company and Telesis CDE, LLC, a Delaware limited liability company (“Telesis”), and other CDE entities, (iii) grants, awards and other loans received by the Company from government and other municipalities, (iv) the convertible note from the Company to Telesis and other CDEs evidencing the loan under the applicable convertible loan agreement, that certain securities purchase agreement between the Company and Telesis and other CDEs, and any other agreements, documents and instruments executed in connection therewith (such documents under subsection (ii), (iii) and (iv) as amended, modified or renewed from time to time, collectively, the “New Market Transactions Documents”), or (iv) as disclosed in any Exchange Act Filings: (a) Except for agreements explicitly contemplated hereby and by the other Transaction Documents, there are no agreements, or proposed transactions between the Company or the Subsidiaries and any of their officersunderstandings, directors, employees, affiliates or, to the Company’s knowledge, any affiliate thereof. (b) There are no agreementsinstruments, contracts, instrumentsproposed transactions, judgments, orders, writs or decrees to which the Company or the any of its Subsidiaries is a party or by which the Company or the Subsidiaries it is bound that which may involve involve: (i) obligations of (contingent or otherwise) of, or payments to to, the Company or the Subsidiaries, respectively, any of its Subsidiaries in excess of $500,00050,000 (other than obligations of, or payments to, the Company or any of its Subsidiaries arising from purchase or sale agreements entered into in the ordinary course of business); or (ii) any the transfer or license of any Intellectual Property patent, copyright, trade secret or other proprietary right to or from the Company or the any of its Subsidiaries (other than licenses arising from the license to purchase of “off the Company of standard, generally commercially available, “off-the-shelf” third-party or other standard products), ; or (iii) indemnification by the Company or the Subsidiaries with respect to infringements of proprietary rights, or (iv) provisions restricting the development, manufacture or distribution of the Company’s or any of its Subsidiaries products or services of services; or (iv) indemnification by the Company or the Subsidiariesany of its Subsidiaries with respect to infringements of proprietary rights. (cb) The Since September 30, 2005 (the “Balance Sheet Date”), neither the Company has not nor any of its Subsidiaries has, except in the ordinary course of business: (i) accrued, declared or paid any dividends dividends, or authorized or made any distribution upon or with respect to any class or series of its capital stock, ; (ii) incurred any liabilities or guaranteed any indebtedness for money borrowed or any other liabilities (other than ordinary course obligations) individually in excess of $500,000 50,000 or, in the case of indebtedness and/or liabilities individually less than $500,00050,000, in excess of $1,000,000 100,000 in the aggregate, ; (iii) made any loans or advances to any personperson or entity not in excess, individually or in the aggregate, of $100,000, other than ordinary reasonable course advances for travel expenses, ; or (iv) sold, exchanged or otherwise disposed of any of its assets or rights, other than the sale of its inventory in the ordinary course of business. (dc) For the purposes of subsections (ba) and (cb) above, all indebtedness, liabilities, agreements agreements, understandings, instruments, contracts and contracts proposed transactions involving the same person or entity (including persons or entities the Company or any Subsidiary of the Company has reason to believe are affiliated therewith) shall be aggregated for the purpose of meeting the individual minimum dollar amounts of such subsections. (d) The Company maintains disclosure controls and procedures (“Disclosure Controls”) designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized, and reported, within the time periods specified in the rules and forms of the Securities and Exchange Commission (“SEC”). (e) Neither The Company makes and keep books, records, and accounts, that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the Company’s assets. The Company nor maintains internal control over financial reporting (“Financial Reporting Controls”) designed by, or under the Subsidiaries supervision of, the Company’s principal executive and principal financial officers, and effected by the Company’s board of directors, management, and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles (“GAAP”) as implemented by the SEC for reporting companies, including that: (i) transactions are executed in accordance with management’s general or specific authorization; (ii) unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the financial statements are prevented or timely detected; (iii) transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that the Company’s receipts and expenditures are being made only in accordance with authorizations of the Company’s management and board of directors; (iv) transactions are recorded as necessary to maintain accountability for assets; and (v) the recorded accountability for assets is compared with the existing assets at reasonable intervals, and appropriate action is taken with respect to any differences. (f) There is no weakness in violation or default of any term (including without limitation any diligence obligation) or of any provision of any of the agreements set forth Company’s Disclosure Controls or Financial Reporting Controls that is required to be disclosed in Schedule 2.13 of the Disclosure Schedule (the “Material Agreements”). The execution, delivery, and performance of and compliance with this Agreement, and the Transaction Documents, and the issuance and sale of the Series D Preferred Stock pursuant hereto and of the Common Stock issuable upon conversion of the Series D Preferred Stock pursuant to the Restated Certificate, will not, with or without the passage of time or giving of notice, result in any such violation, or be in conflict with or constitute a default under any such term or provision, or result in the creation of any mortgage, pledge, lien, encumbrance or charge upon any of the properties or assets of the Company or the Subsidiaries or the suspensionExchange Act Filings, revocation, impairment, forfeiture or nonrenewal of any Material Agreement, permit, license, authorization or approval applicable to the Company or the Subsidiaries, its business or operations or any of its assets or properties. The Company has avoided every condition, and has neither performed any act, the occurrence of which would result in the loss of any right granted to the Company or the Subsidiaries under any Material Agreement, nor failed to perform any act, the failure of which would result in the loss of any right granted to the Company or the Subsidiaries under any Material Agreementexcept as so disclosed.

Agreements; Action. (a) Except for agreements explicitly contemplated hereby and by the other Transaction Documents, there There are no agreements, understandings or proposed transactions between the Company or the Subsidiaries Subsidiary and any of their its officers, directors, employees, affiliates or, to the Company’s knowledge, or any affiliate thereof. (b) There Except for agreements explicitly contemplated in the Agreements, there are no agreements, contractsunderstandings, instruments, judgments, orders, writs contracts or decrees proposed transactions to which the Company or the Subsidiaries Subsidiary is a party or by which the Company or the Subsidiaries it is bound that may involve (i) obligations of (contingent or otherwise) of, or payments to to, the Company or the Subsidiaries, respectively, any of its subsidiaries in excess of of, One Hundred Thousand Dollars ($500,000100,000), (ii) any the license of any Intellectual Property patent, copyright, trade secret or other proprietary right to or from the Company or the Subsidiaries (other than the license to the Company Subsidiary or any of standard, generally commercially available, “off-the-shelf” third-party products), its subsidiaries or (iii) indemnification by the Company grant of rights to manufacture, produce, assemble, license, market or sell its products to any other person or affect the Company's or the Subsidiaries with respect Subsidiary's exclusive right to infringements of proprietary rightsdevelop, manufacture, assemble, distribute, market or (iv) provisions restricting the development, manufacture or distribution of the products or services of the Company or the Subsidiariessell its products. (c) The Neither the Company nor the Subsidiary has not (i) accrued, declared or paid any dividends dividends, or authorized or made any distribution upon or with respect to any class or series of its capital stock, (ii) except in connection with the transactions contemplated in this Agreement, incurred any liabilities or guaranteed any indebtedness for money borrowed or incurred any other liabilities individually in excess of One Hundred Thousand Dollars ($500,000 or, in the case of indebtedness and/or liabilities individually less than $500,000, 100,000) or in excess of Two Hundred Thousand Dollars ($1,000,000 200,000) in the aggregate, (iii) made any loans or advances to any person, other than ordinary reasonable advances for travel expenses, expenses or (iv) sold, exchanged or otherwise disposed of any of its assets or rights, other than the sale of its inventory in the ordinary course of business. (d) For Neither the purposes Company nor the Subsidiary has engaged in the past three (3) months in any discussion (i) with any representative of subsections any corporation or corporations regarding the merger of the Company with or into any such corporation or corporations, (bii) and with any representative of any corporation, partnership, association or other business entity or any individual regarding the sale, conveyance or disposition of all or substantially all of the assets of the Company or the Subsidiary or a transaction or series of related transactions in which more than fifty percent (c50%) aboveof the voting power of the Company or the Subsidiary would be disposed of or (iii) regarding any other form of liquidation, all indebtedness, liabilities, agreements and contracts involving dissolution or winding up of the same person Company or entity shall be aggregated for the purpose of meeting the individual minimum dollar amounts of such subsectionsSubsidiary. (e) Neither the Company nor the Subsidiaries Subsidiary is in violation a party to and is not bound by any contract, agreement or default of instrument or subject to any term (including without limitation any diligence obligation) restriction under its charter documents, which materially adversely affects its business as now conducted or of any provision of any of the agreements as proposed to be conducted as set forth in Schedule 2.13 of the Disclosure Schedule (the “Material Agreements”). The execution, delivery, and performance of and compliance with this Agreement, and the Transaction Documents, and the issuance and sale of the Series D Preferred Stock pursuant hereto and of the Common Stock issuable upon conversion of the Series D Preferred Stock pursuant written materials provided to the Restated CertificatePurchasers by the Company, will not, with or without the passage of time or giving of notice, result in any such violation, or be in conflict with or constitute a default under any such term or provision, or result in the creation of any mortgage, pledge, lien, encumbrance or charge upon any of the its properties or assets of the Company or the Subsidiaries or the suspension, revocation, impairment, forfeiture or nonrenewal of any Material Agreement, permit, license, authorization or approval applicable to the Company or the Subsidiaries, its business or operations or any of its assets or properties. The Company has avoided every financial condition, and has neither performed any act, the occurrence of which would result in the loss of any right granted to the Company or the Subsidiaries under any Material Agreement, nor failed to perform any act, the failure of which would result in the loss of any right granted to the Company or the Subsidiaries under any Material Agreement.

Agreements; Action. Except as set forth on Schedule 4.6 or as disclosed in any Exchange Act Filings: (a) Except for agreements explicitly contemplated hereby and by the other Transaction Documents, there are no agreements, or proposed transactions between the Company or the Subsidiaries and any of their officersunderstandings, directors, employees, affiliates or, to the Company’s knowledge, any affiliate thereof. (b) There are no agreementsinstruments, contracts, instrumentsproposed transactions, judgments, orders, writs or decrees to which the Company or the any of its Subsidiaries is a party or to its knowledge by which the Company or the Subsidiaries it is bound that may involve which involves: (i) obligations of (contingent or otherwise) of, or payments to to, the Company or the Subsidiaries, respectively, any of its Subsidiaries in excess of $500,000100,000 (other than obligations of, or payments to, the Company or any of its Subsidiaries arising from purchase or sale agreements entered into in the ordinary course of business); or (ii) any the transfer or license of any Intellectual Property patent, copyright, trade secret or other proprietary right to or from the Company or the any of its Subsidiaries (other than licenses arising from the license to purchase of “off the Company of standard, generally commercially available, “off-the-shelf” third-party or other standard products), ; or (iii) indemnification by the Company or the Subsidiaries with respect to infringements of proprietary rights, or (iv) provisions restricting the development, manufacture or distribution of the Company’s or any of its Subsidiaries products or services of services; or (iv) indemnification by the Company or the Subsidiariesany of its Subsidiaries with respect to infringements of proprietary rights. (cb) The Since September 30, 2005, (the “Balance Sheet Date”), neither the Company has not nor any of its Subsidiaries has: (i) accrued, declared or paid any dividends dividends, or authorized or made any distribution upon or with respect to any class or series of its capital stock, ; (ii) incurred any liabilities or guaranteed any indebtedness for money borrowed or any other liabilities (other than ordinary course obligations) individually in excess of $500,000 100,000 or, in the case of indebtedness and/or liabilities individually less than $500,000100,000, in excess of $1,000,000 100,000 in the aggregate, ; (iii) made any loans or advances to any personperson or entity not in excess, individually or in the aggregate, of $100,000, other than ordinary reasonable course advances for travel expenses, ; or (iv) sold, exchanged or otherwise disposed of any of its assets or rights, other than the sale of its inventory in the ordinary course of business. (dc) For the purposes of subsections (ba) and (cb) above, all indebtedness, liabilities, agreements agreements, understandings, instruments, contracts and contracts proposed transactions involving the same person or entity (including persons or entities the Company or any Subsidiary of the Company has reason to believe are affiliated therewith) shall be aggregated for the purpose of meeting the individual minimum dollar amounts of such subsections. (ed) Neither The Company maintains disclosure controls and procedures (“Disclosure Controls”) as required by the Company nor Securities and Exchange Commission (“SEC”) for companies the Subsidiaries is in violation or default of any term (including without limitation any diligence obligation) or of any provision of any of the agreements set forth in Schedule 2.13 of the Disclosure Schedule (the “Material Agreements”). The execution, delivery, and performance of and compliance with this Agreement, and the Transaction Documents, and the issuance and sale of the Series D Preferred Stock pursuant hereto and of the Common Stock issuable upon conversion of the Series D Preferred Stock pursuant to the Restated Certificate, will not, with or without the passage of time or giving of notice, result in any such violation, or be in conflict with or constitute a default under any such term or provision, or result in the creation of any mortgage, pledge, lien, encumbrance or charge upon any of the properties or assets size of the Company or the Subsidiaries or the suspension, revocation, impairment, forfeiture or nonrenewal of any Material Agreement, permit, license, authorization or approval applicable designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the SubsidiariesExchange Act is recorded, its business or operations or any processed, summarized, and reported, within the time periods specified in the rules and forms of its assets or propertiesthe SEC. (i) The Company makes and keep books, records, and accounts, that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the Company’s assets. The Company has avoided every condition, and has neither performed any act, maintains internal control over financial reporting (“Financial Reporting Controls”) as required by the occurrence SEC for entities of which would result in the loss of any right granted to the Company or the Subsidiaries under any Material Agreement, nor failed to perform any act, the failure of which would result in the loss of any right granted to the Company or the Subsidiaries under any Material Agreementits size.

Agreements; Action. (a) Except for agreements explicitly contemplated hereby and by the other Transaction Documents, there There are no agreements, understandings or proposed transactions between the Company or the Subsidiaries and any of their officers, its directors, employees, affiliates or, to the Company’s knowledge, any affiliate thereofcontractors or consultants that provide for compensation in excess of $350,000. (b) There are no agreements, understandings, instruments, contracts, instrumentsproposed transactions, judgments, orders, writs or decrees to which the Company or the Subsidiaries is a party party, or to its Knowledge, by which the Company or the Subsidiaries it is bound that bound, which may involve (i) future obligations of (contingent or otherwise) of, or payments to to, the Company or the Subsidiaries, respectively, in excess of $500,000250,000, or (ii) any the transfer or license of any Intellectual Property patent, copyright, trade secret or other proprietary right to or from the Company or the Subsidiaries (other than the license licenses to the Company of standard, generally commercially available, “off-the-off the shelf” third-party software or other standard products), or (iii) the grant of any rights affecting the development, manufacture, licensing, distribution, marketing, or sale of the Company’s products or services, or (iv) indemnification by the Company or the Subsidiaries with respect to infringements of proprietary rights, or (iv) provisions restricting the development, manufacture or distribution of the products or services of the Company or the Subsidiaries. (c) The Company has not (i) accrued, declared or paid any dividends dividends, or authorized or made any distribution upon or with respect to any class or series of its capital stock, (ii) incurred any liabilities or guaranteed any indebtedness for money borrowed or any other liabilities (other than trade payables incurred in the ordinary course of business or as disclosed in the Financial Statements) individually in excess of $500,000 250,000 or, in the case of indebtedness and/or liabilities individually less than $500,000250,000, in excess of $1,000,000 250,000 in the aggregate, (iii) made any loans or advances to any person, other than ordinary reasonable advances for travel expenses, or (iv) sold, exchanged or otherwise disposed of any of its assets or rights, other than the sale of its inventory in the ordinary course of business. (d) For the purposes of subsections (b) and (c) above, all indebtedness, liabilities, agreements agreements, understandings, instruments, contracts and contracts proposed transactions involving the same person or entity (including persons or entities the Company has reason to believe are affiliated therewith) shall be aggregated for the purpose of meeting the individual minimum dollar amounts of such subsections. (e) Neither the The Company nor the Subsidiaries is in violation not a guarantor or default indemnitor of any term (including without limitation any diligence obligation) or indebtedness of any provision of any of the agreements set forth in Schedule 2.13 of the Disclosure Schedule (the “Material Agreements”). The execution, delivery, and performance of and compliance with this Agreement, and the Transaction Documents, and the issuance and sale of the Series D Preferred Stock pursuant hereto and of the Common Stock issuable upon conversion of the Series D Preferred Stock pursuant to the Restated Certificate, will not, with or without the passage of time or giving of notice, result in any such violation, or be in conflict with or constitute a default under any such term or provision, or result in the creation of any mortgage, pledge, lien, encumbrance or charge upon any of the properties or assets of the Company or the Subsidiaries or the suspension, revocation, impairment, forfeiture or nonrenewal of any Material Agreement, permit, license, authorization or approval applicable to the Company or the Subsidiaries, its business or operations or any of its assets or properties. The Company has avoided every condition, and has neither performed any act, the occurrence of which would result in the loss of any right granted to the Company or the Subsidiaries under any Material Agreement, nor failed to perform any act, the failure of which would result in the loss of any right granted to the Company or the Subsidiaries under any Material Agreementother person.

Agreements; Action. (a) Except for agreements explicitly contemplated hereby and by the other Transaction Documents, there are no agreements, or proposed transactions between the Company or the Subsidiaries and any of their officers, directors, employees, affiliates or, to the Company’s knowledge, any affiliate thereof. (b) There are no agreements, contracts, instruments, judgments, orders, writs writs, agreements, decrees or decrees contracts to which the Company or the Subsidiaries is a party or by which it is bound (including purchase orders to the Company or placed by the Subsidiaries is bound Company) that may involve (i) obligations of (contingent or otherwise) of, or payments to the Company or the Subsidiaries, respectively, in excess of $500,00050,000, or (ii) any the license of any Intellectual Property patent, copyright, trade secret or other proprietary right to or from the Company or the Subsidiaries (other than the license to the Company of standard, generally commercially available, “off-the-shelf” third-party products), (iii) indemnification by the Company or the Subsidiaries with respect to infringements of proprietary rightsCompany, or (iviii) provisions restricting the development, manufacture development or distribution of the Company's products or services services, except those set forth on the Schedule of Exceptions, copies of which contracts have been made available to special counsel to the Purchasers (the "Contracts"). All of the Contracts are valid, binding and in full force and effect in all material respects and enforceable by the Company in accordance with their respective terms in all material respects, except (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium, and other laws of general application affecting enforcement of creditors' rights generally and (ii) as limited by laws relating to the availability of specific performance, injunctive relief, or other equitable remedies. The Company is not in material default under any of such Contracts. To the Subsidiariesbest knowledge of the Company, no other party to any of the Contracts is in material default thereunder. (cb) The Company has not (i) accrued, declared or paid any dividends or authorized or made any distribution upon or with respect to any class or series of its capital stock, (ii) incurred any liabilities or guaranteed any indebtedness for money borrowed or any other liabilities individually in excess of $500,000 50,000 or, in the case of indebtedness and/or liabilities individually less than $500,00050,000, in excess of $1,000,000 100,000 in the aggregate, (iii) made any loans or advances to any person, other than ordinary reasonable advances for travel expenses, or (iv) sold, exchanged or otherwise disposed of any of its assets or rights; or (v) incurred any obligation, other than the sale contingent or otherwise, to redeem or repurchase any equity securities or any security that is a combination of its inventory debt and equity, except as set forth in this Agreement or in the ordinary course of businessRestated Articles. (dc) For the purposes of subsections (ba) and (cb) above, all indebtedness, liabilities, agreements agreements, understandings, instruments, contracts and contracts proposed transactions involving the same person or entity (including persons or entities the Company has reason to believe are affiliated therewith) shall be aggregated for the purpose of meeting the individual minimum dollar amounts of such subsections. (e) Neither the Company nor the Subsidiaries is in violation or default of any term (including without limitation any diligence obligation) or of any provision of any of the agreements set forth in Schedule 2.13 of the Disclosure Schedule (the “Material Agreements”). The execution, delivery, and performance of and compliance with this Agreement, and the Transaction Documents, and the issuance and sale of the Series D Preferred Stock pursuant hereto and of the Common Stock issuable upon conversion of the Series D Preferred Stock pursuant to the Restated Certificate, will not, with or without the passage of time or giving of notice, result in any such violation, or be in conflict with or constitute a default under any such term or provision, or result in the creation of any mortgage, pledge, lien, encumbrance or charge upon any of the properties or assets of the Company or the Subsidiaries or the suspension, revocation, impairment, forfeiture or nonrenewal of any Material Agreement, permit, license, authorization or approval applicable to the Company or the Subsidiaries, its business or operations or any of its assets or properties. The Company has avoided every condition, and has neither performed any act, the occurrence of which would result in the loss of any right granted to the Company or the Subsidiaries under any Material Agreement, nor failed to perform any act, the failure of which would result in the loss of any right granted to the Company or the Subsidiaries under any Material Agreement.

Agreements; Action. (aExcept as set forth on Schedule 12(i) Except for agreements explicitly contemplated hereby and by the other Transaction Documents, there are no agreements, or proposed transactions between the Company or the Subsidiaries and as disclosed in any of their officers, directors, employees, affiliates or, to the Company’s knowledge, any affiliate thereof.Exchange Act Filings: (bi) There are no agreements, contractsunderstandings, instruments, contracts, judgments, orders, writs or decrees to which the Company it or the any of its Subsidiaries is a party or to its knowledge by which the Company or the Subsidiaries it is bound that which may involve involve: (i) obligations of (contingent or otherwise) of, or payments to the Company to, it or the Subsidiaries, respectively, any of its Subsidiaries in excess of $500,000, 500,000 per annum (other than ordinary course obligations); or (ii) any the transfer or license of any Intellectual Property patent, copyright, trade secret or other proprietary right to or from the Company or the Subsidiaries it (other than the license to the Company of standard, generally commercially available, any commercial “off-the-shelf” thirdsoftware license such as certain “shrink-party productswrap” licenses and any other intellectual property licenses which are nonexclusive, terminable and available to businesses at a market price), ; or (iii) indemnification by the Company or the Subsidiaries with respect to infringements of proprietary rights, or (iv) contractual provisions restricting the development, manufacture or distribution of the its or any of its Subsidiaries’ products or services services; or (iv) indemnification by it or any of the Company or the Subsidiariesits Subsidiaries with respect to infringements of proprietary rights (other than any commercial “off-the-shelf” software license such as certain “shrink-wrap” licenses and any other intellectual property licenses which are nonexclusive, terminable and available to businesses at a market price). (cii) The Company has not Since December 31, 2005 (the “Balance Sheet Date”), neither it nor any of its Subsidiaries has: (i) accrued, declared or paid any dividends dividends, or authorized or made any distribution upon or with respect to any class or series of its capital stock, except dividends in the amount of approximately $407,044.67 paid to holders of the Series B Preferred Stock on June 30, 2006; (ii) incurred any Indebtedness or any other liabilities or guaranteed any indebtedness for money borrowed (other than ordinary course obligations and obligations with regard to Equipment, Inventory and Aircraft) individually in excess of $500,000 50,000 or, in the case of indebtedness Indebtedness and/or liabilities individually less than $500,00050,000, in excess of $1,000,000 100,000 in the aggregate, ; (iii) made any loans or advances to any personPerson not in excess, individually or in the aggregate, of $100,000, other than ordinary reasonable advances for travel expenses, ; or (iv) sold, exchanged or otherwise disposed of any of its assets or rights, other than the sale of its inventory Inventory and Equipment in the ordinary course of business. (diii) For the purposes of subsections (bi) and (cii) aboveof this Section 12(i), all indebtednessIndebtedness, liabilities, agreements agreements, understandings, instruments, contracts and contracts proposed transactions involving the same person Person (including Persons it or entity any of its applicable Subsidiaries has reason to believe are affiliated therewith or with any Subsidiary thereof) shall be aggregated for the purpose of meeting the individual minimum dollar amounts of such subsections. (eiv) Neither the Company nor the Subsidiaries is in violation or default of any term (including without limitation any diligence obligation) or of any provision of any of the agreements set forth in Schedule 2.13 of the Disclosure Schedule The Parent has established and maintains disclosure controls and procedures (the “Material AgreementsDisclosure Controls”) (as defined in Rule 13a-15 under the Exchange Act). Such disclosure controls and procedures are designed to ensure that material information relating to the Parent, including its Subsidiaries, is made known to the Parent’s principal executive officer and its principal financial officer by others within those entities, particularly during the periods in which the periodic reports required under the Exchange Act are being prepared. Based on the Parent’s evaluation of internal controls as of the end of the period covered by the Parent’s most recent quarterly report on Form 10-Q (the “Evaluation Time”), such Disclosure Controls were effective at the Evaluation Time in timely alerting the Parent’s principal executive officer and principal financial officer to material information required to be included in the Parent’s periodic reports required under the Exchange Act. No event, circumstance or event has occurred since the Evaluation Time that would cause the Parent to believe that the Parent’s Disclosure Controls are not currently effective in any material respect. (v) The executionParent makes and keeps books, deliveryrecords, and performance accounts that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of its assets. It maintains internal control over financial reporting (“Financial Reporting Controls”) designed by, or under the supervision of, its principal executive and compliance with this Agreementprincipal financial officers, and the Transaction Documentseffected by its board of directors, management, and other personnel, to provide reasonable assurance regarding the issuance reliability of financial reporting and sale the preparation of the Series D Preferred Stock pursuant hereto financial statements for external purposes in accordance with GAAP, including those policies and of the Common Stock issuable upon conversion of the Series D Preferred Stock pursuant procedures that: (1) pertain to the Restated Certificatemaintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of its assets; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, will notand that its receipts and expenditures are being made only in accordance with authorizations of its management and directors; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, with use or without the passage of time or giving of notice, result in any such violation, or be in conflict with or constitute a default under any such term or provision, or result in the creation of any mortgage, pledge, lien, encumbrance or charge upon any of the properties or assets of the Company or the Subsidiaries or the suspension, revocation, impairment, forfeiture or nonrenewal of any Material Agreement, permit, license, authorization or approval applicable to the Company or the Subsidiaries, its business or operations or any disposition of its assets that could have a material effect on the financial statements. (vi) The Parent has established and maintains a system of internal control over financial reporting (as defined in Rule 13a-15 under the Exchange Act). Based on the evaluation of the Parent’s internal control over financial reporting at the Evaluation Time by the Parent’s Chief Executive Officer and Chief Financial Officer, such internal control over financial reporting was, at the Evaluation Time, sufficient to provide reasonable assurance regarding the reliability of the Parent’s financial reporting and the preparation of Parent financial statements for external purposes in accordance with GAAP. No event, circumstance or properties. The Company event has avoided every condition, and has neither performed occurred since the Evaluation Time that would cause the Parent to believe that the Parent’s internal controls are not currently effective in any act, the occurrence of which would result in the loss of any right granted to the Company or the Subsidiaries under any Material Agreement, nor failed to perform any act, the failure of which would result in the loss of any right granted to the Company or the Subsidiaries under any Material Agreementmaterial respect.

Agreements; Action. (a) Except for agreements disclosed in VGT Disclosure schedule or explicitly contemplated hereby and by the other Transaction Documentshereby, there are no agreements, understandings or proposed transactions between the Company or the Subsidiaries VGT and any of their its officers, directors, employeesaffiliates, affiliates or, or any affiliate thereof which are material to the Company’s knowledgebusiness, any affiliate thereofaffairs, prospects, operations, properties, assets or financial condition of VGT. (b) There Except for agreements disclosed in VGT Disclosure Schedule or explicitly contemplated hereby, there are no agreements, understandings, instruments, contracts, instrumentsproposed transactions, judgments, orders, writs or decrees to which the Company or the Subsidiaries VGT is a party or by which the Company or the Subsidiaries it is bound that which may involve (i) obligations of (contingent or otherwise) of, or payments to the Company or the Subsidiaries, respectively, VGT in excess of, $25,000 except as entered into or made in connection with the business of $500,000VGT as proposed, or (ii) any the license of any Intellectual Property patent, copyright, trade secret or other proprietary right to or from the Company VGT, or the Subsidiaries (other than the license to the Company of standard, generally commercially available, “off-the-shelf” third-party products), (iii) provisions restricting or affecting the development, manufacture or distribution of VGT's products or services, or (iv) indemnification by the Company or the Subsidiaries VGT with respect to infringements of proprietary rights, or (iv) provisions restricting the development, manufacture or distribution of the products or services of the Company or the Subsidiaries. (c) The Company Except as disclosed in VGT Disclosure Schedule, VGT has not (i) accrued, declared or paid any dividends dividends, or authorized or made any distribution upon or with respect to any class or series of its capital stock, (ii) except for legal fees incurred any liabilities or guaranteed in connection with this transaction and loans received from ▇▇▇▇▇▇ ▇▇▇▇▇, incurred any indebtedness for money borrowed or any other liabilities individually in excess of $500,000 or, in the case of indebtedness and/or liabilities individually less than $500,000, in excess of $1,000,000 in the aggregate50,000, (iii) made any loans or advances to any person, other than ordinary reasonable advances for travel expenses, or (iv) sold, exchanged or otherwise disposed of any of its assets or rights, other than the sale of its inventory in the ordinary course of business. (d) For the purposes of subsections (b) and (c) above, all indebtedness, liabilities, agreements agreements, understandings, instruments, contracts and contracts proposed transactions involving the same person or entity (including persons or entities VGT has reason to believe are affiliated therewith) shall be aggregated for the purpose of meeting the individual minimum dollar amounts of such subsections. (e) Neither Except for agreements disclosed in VGT Disclosure Schedule, VGT is not a party to and is not bound by any contract, agreement or instrument, or subject to any restriction under its Certificate of Incorporation or Bylaws, which materially adversely affects its business as now conducted or as proposed to be conducted, its properties or its financial condition. (f) VGT has not engaged in the Company nor the Subsidiaries is past three (3) months in violation or default any discussion (i) with any representative of any term corporation or corporations regarding the consolidation or merger of VGT with or into any such corporation or corporations, (including without limitation ii) with any diligence obligation) corporation, partnership, association or other business entity or any individual regarding the sale, conveyance or disposition of any provision of any all or substantially all of the agreements set forth assets of VGT or a transaction or series of related transactions in Schedule 2.13 which more than fifty percent (50%) of the Disclosure Schedule (the “Material Agreements”). The execution, delivery, and performance voting power of and compliance with this Agreement, and the Transaction Documents, and the issuance and sale of the Series D Preferred Stock pursuant hereto and of the Common Stock issuable upon conversion of the Series D Preferred Stock pursuant to the Restated Certificate, will not, with or without the passage of time or giving of notice, result in any such violationVGT is disposed of, or be in conflict with (iii) regarding any other form of acquisition, liquidation, dissolution or constitute a default under any such term or provision, or result in the creation winding up of any mortgage, pledge, lien, encumbrance or charge upon any of the properties or assets of the Company or the Subsidiaries or the suspension, revocation, impairment, forfeiture or nonrenewal of any Material Agreement, permit, license, authorization or approval applicable to the Company or the Subsidiaries, its business or operations or any of its assets or properties. The Company has avoided every condition, and has neither performed any act, the occurrence of which would result in the loss of any right granted to the Company or the Subsidiaries under any Material Agreement, nor failed to perform any act, the failure of which would result in the loss of any right granted to the Company or the Subsidiaries under any Material AgreementVGT.

Agreements; Action. Except as set forth on Schedule 4.6 or as disclosed in any Exchange Act Filings: (a) Except for agreements explicitly contemplated hereby and by the other Transaction Documents, there are no agreements, or proposed transactions between the Company or the Subsidiaries and any of their officersunderstandings, directors, employees, affiliates or, to the Company’s knowledge, any affiliate thereof. (b) There are no agreementsinstruments, contracts, instrumentsproposed transactions, judgments, orders, writs or decrees to which the Company or the any of its Subsidiaries is a party or by which the Company or the Subsidiaries it is bound that which may involve involve: (i) obligations of (contingent or otherwise) of, or payments to to, the Company or the Subsidiaries, respectively, any of its Subsidiaries in excess of $500,00050,000 (other than obligations of, or payments to, the Company or any of its Subsidiaries arising from purchase or sale agreements entered into in the ordinary course of business); or (ii) any the transfer or license of any Intellectual Property patent, copyright, trade secret or other proprietary right to or from the Company or the any of its Subsidiaries (other than licenses arising from the license to purchase of “off the Company of standard, generally commercially available, “off-the-shelf” third-party or other standard products), ; or (iii) indemnification by the Company or the Subsidiaries with respect to infringements of proprietary rights, or (iv) provisions restricting the development, manufacture or distribution of the Company’s or any of its Subsidiaries products or services of services; or (iv) indemnification by the Company or the Subsidiariesany of its Subsidiaries with respect to infringements of proprietary rights. (cb) The Since November 30, 2006 (the “Balance Sheet Date”), neither the Company has not nor any of its Subsidiaries has: (i) accrued, declared or paid any dividends dividends, or authorized or made any distribution upon or with respect to any class or series of its capital stock, ; (ii) incurred any liabilities or guaranteed any indebtedness for money borrowed or any other liabilities (other than ordinary course obligations) individually in excess of $500,000 50,000 or, in the case of indebtedness and/or liabilities individually less than $500,00050,000, in excess of $1,000,000 100,000 in the aggregate, ; (iii) made any loans or advances to any personperson or entity not in excess, individually or in the aggregate, of $100,000, other than ordinary reasonable course advances for travel expenses, ; or (iv) sold, exchanged or otherwise disposed of any of its assets or rights, other than the sale of its inventory in the ordinary course of business. (dc) For the purposes of subsections (ba) and (cb) above, all indebtedness, liabilities, agreements agreements, understandings, instruments, contracts and contracts proposed transactions involving the same person or entity (including persons or entities the Company or any Subsidiary of the Company has reason to believe are affiliated therewith) shall be aggregated for the purpose of meeting the individual minimum dollar amounts of such subsections. (d) The Company maintains disclosure controls and procedures (“Disclosure Controls”) designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, forms of the Securities and Exchange Commission (“SEC”). (e) Neither The Company makes and keeps books, records, and accounts, that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the Company’s assets. The Company nor maintains internal control over financial reporting (“Financial Reporting Controls”) designed by, or under the Subsidiaries supervision of, the Company’s principal executive and principal financial officers, and effected by the Company’s board of directors, management, and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles (“GAAP”), including that: (i) transactions are executed in accordance with management’s general or specific authorization; (ii) unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the financial statements are prevented or timely detected; (iii) transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that the Company’s receipts and expenditures are being made only in accordance with authorizations of the Company’s management and board of directors; (iv) transactions are recorded as necessary to maintain accountability for assets; and (v) the recorded accountability for assets is compared with the existing assets at reasonable intervals, and appropriate action is taken with respect to any differences. (f) There is no weakness in violation or default of any term (including without limitation any diligence obligation) or of any provision of any of the agreements set forth Company’s Disclosure Controls or Financial Reporting Controls that is required to be disclosed in Schedule 2.13 of the Disclosure Schedule (the “Material Agreements”). The execution, delivery, and performance of and compliance with this Agreement, and the Transaction Documents, and the issuance and sale of the Series D Preferred Stock pursuant hereto and of the Common Stock issuable upon conversion of the Series D Preferred Stock pursuant to the Restated Certificate, will not, with or without the passage of time or giving of notice, result in any such violation, or be in conflict with or constitute a default under any such term or provision, or result in the creation of any mortgage, pledge, lien, encumbrance or charge upon any of the properties or assets of the Company or the Subsidiaries or the suspensionExchange Act Filings, revocation, impairment, forfeiture or nonrenewal of any Material Agreement, permit, license, authorization or approval applicable to the Company or the Subsidiaries, its business or operations or any of its assets or properties. The Company has avoided every condition, and has neither performed any act, the occurrence of which would result in the loss of any right granted to the Company or the Subsidiaries under any Material Agreement, nor failed to perform any act, the failure of which would result in the loss of any right granted to the Company or the Subsidiaries under any Material Agreementexcept as so disclosed.

Agreements; Action. (a) Except for agreements explicitly contemplated hereby and by the other Transaction DocumentsAgreements, there are no agreements, understandings or proposed transactions between the Company or the Subsidiaries and any of their its officers, directorsdirectors or affiliates, employees, affiliates or, to the Company’s knowledge, or any affiliate thereof. (b) There are no agreements, understandings, instruments, contracts, instrumentsproposed transactions, judgments, orders, writs or decrees to which the Company or the Subsidiaries is a party or by which the Company or the Subsidiaries it is bound that may involve (i) obligations of (contingent or otherwise) of, or payments to the Company or the Subsidiaries, respectively, in excess of of, $500,00025,000, or (ii) any the license of any Intellectual Property patent, copyright, trade secret or other proprietary right to or from the Company Company, or the Subsidiaries (other than the license to the Company of standard, generally commercially available, “off-the-shelf” third-party products), (iii) indemnification by the Company or the Subsidiaries with respect to infringements of proprietary rights, or (iv) provisions restricting or affecting the development, manufacture or distribution of the Company's products or services of services, or (iv) indemnification by the Company or the Subsidiarieswith respect to infringements of proprietary rights. (c) The Since the date of the Latest Balance Sheet (as defined below), the Company has not (i) accrued, has not declared or paid any dividends or authorized or made any distribution upon or with respect to any class or series of its capital stock, (ii) incurred any liabilities or guaranteed except for (A) the convertible term note in the principal amount of $500,000 payable to ▇▇▇▇ ▇▇▇▇▇▇ (the "▇▇▇▇ ▇▇▇▇▇▇ Term Note"), (B) the term note in the principal amount of $250,000 payable to ▇▇▇ ▇▇▇▇▇▇ (the "▇▇▇ ▇▇▇▇▇▇ Term Note"), (C) the term loan in the original principal amount of $235,000 payable to PNC Bank (the "PNC Bank Term Loan"), (D) the $1,000,000 revolving line of credit with PNC Bank (the "PNC Bank Credit Line") and (E) the $150,000 convertible line of credit note with PNC Bank (the "PNC Bank Convertible Line of Credit Note"), does not currently have outstanding any indebtedness for money borrowed or any other liabilities individually in excess of $500,000 25,000 or, in the case of indebtedness and/or liabilities individually less than $500,00025,000, in excess of $1,000,000 75,000 in the aggregate, or (iii) has not made any loans or advances to any person, other than ordinary reasonable advances for travel expenses, or (iv) has not sold, exchanged or otherwise disposed of any of its assets or rights, other than the sale of its inventory in the ordinary course of business. (d) For the purposes of subsections (b) and (c) above, all indebtedness, liabilities, agreements agreements, understandings, instruments, contracts and contracts proposed transactions involving the same person or entity (including persons or entities the Company has reason to believe are affiliated therewith) shall be aggregated for the purpose of meeting the individual minimum dollar amounts of such subsections. (e) Neither The Company is not a party to and is not bound by any contract, agreement or instrument, or subject to any restriction under its Restated Certificate or Bylaws that materially adversely affects its business as now conducted or as proposed to be conducted, its properties or its financial condition. (f) The Company has not engaged in the past three (3) months in any discussion (i) with any representative of any corporation or corporations regarding the consolidation or merger of the Company nor with or into any such corporation or corporations, (ii) with any corporation, partnership, association or other business entity or any individual regarding the Subsidiaries is in violation sale, conveyance or default disposition of any term (including without limitation any diligence obligation) all or of any provision of any substantially all of the agreements set forth in Schedule 2.13 of the Disclosure Schedule (the “Material Agreements”). The execution, delivery, and performance of and compliance with this Agreement, and the Transaction Documents, and the issuance and sale of the Series D Preferred Stock pursuant hereto and of the Common Stock issuable upon conversion of the Series D Preferred Stock pursuant to the Restated Certificate, will not, with or without the passage of time or giving of notice, result in any such violation, or be in conflict with or constitute a default under any such term or provision, or result in the creation of any mortgage, pledge, lien, encumbrance or charge upon any of the properties or assets of the Company or a transaction or series of related transactions in which more than fifty percent (50%) of the Subsidiaries or the suspension, revocation, impairment, forfeiture or nonrenewal voting power of any Material Agreement, permit, license, authorization or approval applicable to the Company is disposed of, or (iii) regarding any other form of acquisition, liquidation, dissolution or winding up of the Subsidiaries, its business or operations or any of its assets or properties. The Company has avoided every condition, and has neither performed any act, the occurrence of which would result in the loss of any right granted to the Company or the Subsidiaries under any Material Agreement, nor failed to perform any act, the failure of which would result in the loss of any right granted to the Company or the Subsidiaries under any Material AgreementCompany.

Agreements; Action. Except as set forth on Schedule 4.6 or as disclosed in any Exchange Act Filings: (a) Except for agreements explicitly contemplated hereby and by the other Transaction Documents, there are no agreements, or proposed transactions between the Company or the Subsidiaries and any of their officersunderstandings, directors, employees, affiliates or, to the Company’s knowledge, any affiliate thereof. (b) There are no agreementsinstruments, contracts, instrumentsproposed transactions, judgments, orders, writs or decrees to which the Company or the any of its Subsidiaries is a party or to its knowledge by which the Company or the Subsidiaries it is bound that may involve which involves: (i) obligations of (contingent or otherwise) of, or payments to to, the Company or the Subsidiaries, respectively, any of its Subsidiaries in excess of $500,000100,000 (other than obligations of, or payments to, the Company or any of its Subsidiaries arising from purchase or sale agreements entered into in the ordinary course of business); or (ii) any the transfer or license of any Intellectual Property patent, copyright, trade secret or other proprietary right to or from the Company or the any of its Subsidiaries (other than licenses arising from the license to purchase of “off the Company of standard, generally commercially available, “off-the-shelf” third-party or other standard products), ; or (iii) indemnification by the Company or the Subsidiaries with respect to infringements of proprietary rights, or (iv) provisions restricting the development, manufacture or distribution of the Company’s or any of its Subsidiaries products or services of services; or (iv) indemnification by the Company or the Subsidiariesany of its Subsidiaries with respect to infringements of proprietary rights. (cb) The Since September 30, 2005, (the “Balance Sheet Date”), neither the Company has not nor any of its Subsidiaries has: (i) accrued, declared or paid any dividends dividends, or authorized or made any distribution upon or with respect to any class or series of its capital stock, ; (ii) incurred any liabilities or guaranteed any indebtedness for money borrowed or any other liabilities (other than ordinary course obligations) individually in excess of $500,000 100,000 or, in the case of indebtedness and/or liabilities individually less than $500,000100,000, in excess of $1,000,000 100,000 in the aggregate, ; (iii) made any loans or advances to any personperson or entity not in excess, individually or in the aggregate, of $100,000, other than ordinary reasonable course advances for travel expenses, ; or (iv) sold, exchanged or otherwise disposed of any of its assets or rights, other than the sale of its inventory in the ordinary course of business. (dc) For the purposes of subsections (ba) and (cb) above, all indebtedness, liabilities, agreements agreements, understandings, instruments, contracts and contracts proposed transactions involving the same person or entity (including persons or entities the Company or any Subsidiary of the Company has reason to believe are affiliated therewith) shall be aggregated for the purpose of meeting the individual minimum dollar amounts of such subsections. (ed) Neither The Company maintains disclosure controls and procedures (“Disclosure Controls”) as required by the Company nor Securities and Exchange Commission (“SEC”) for companies the Subsidiaries is in violation or default of any term (including without limitation any diligence obligation) or of any provision of any of the agreements set forth in Schedule 2.13 of the Disclosure Schedule (the “Material Agreements”). The execution, delivery, and performance of and compliance with this Agreement, and the Transaction Documents, and the issuance and sale of the Series D Preferred Stock pursuant hereto and of the Common Stock issuable upon conversion of the Series D Preferred Stock pursuant to the Restated Certificate, will not, with or without the passage of time or giving of notice, result in any such violation, or be in conflict with or constitute a default under any such term or provision, or result in the creation of any mortgage, pledge, lien, encumbrance or charge upon any of the properties or assets size of the Company or the Subsidiaries or the suspension, revocation, impairment, forfeiture or nonrenewal of any Material Agreement, permit, license, authorization or approval applicable designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the SubsidiariesExchange Act is recorded, its business or operations or any processed, summarized, and reported, within the time periods specified in the rules and forms of its assets or propertiesthe SEC. (i) The Company makes and keeps books, records, and accounts that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the Company’s assets. The Company has avoided every condition, and has neither performed any act, maintains internal control over financial reporting (“Financial Reporting Controls”) as required by the occurrence SEC for entities of which would result in the loss of any right granted to the Company or the Subsidiaries under any Material Agreement, nor failed to perform any act, the failure of which would result in the loss of any right granted to the Company or the Subsidiaries under any Material Agreementits size.

Agreements; Action. (aExcept as set forth on Schedule 12(f) Except for agreements explicitly contemplated hereby and by the other Transaction Documents, there are no agreements, or proposed transactions between the Company or the Subsidiaries and as disclosed in any of their officers, directors, employees, affiliates or, to the Company’s knowledge, any affiliate thereof.Exchange Act Filings: (bi) There are no agreements, understandings, instruments, contracts, instrumentsproposed transactions, judgments, orders, writs or decrees to which the Company it or the any of its Subsidiaries is a party or to its knowledge by which the Company or the Subsidiaries it is bound that which may involve involve: (i) obligations of (contingent or otherwise) of, or payments to the Company to, it or the Subsidiaries, respectively, any of its Subsidiaries in excess of $500,00050,000 (other than obligations of, or payments to, it or any of its Subsidiaries arising from purchase or sale agreements entered into in the ordinary course of business); or (ii) any the transfer or license of any Intellectual Property patent, copyright, trade secret or other proprietary right to or from the Company or the Subsidiaries it (other than licenses arising from the license to purchase of “off the Company of standard, generally commercially available, “off-the-shelf” third-party or other standard products), ; or (iii) indemnification by the Company or the Subsidiaries with respect to infringements of proprietary rights, or (iv) provisions restricting the development, manufacture or distribution of the its or any of its Subsidiaries’ products or services services; or (iv) indemnification by it or any of the Company or the Subsidiariesits Subsidiaries with respect to infringements of proprietary rights. (cii) The Company has not Since September 30, 2005 (the “Balance Sheet Date”) neither it nor any of its Subsidiaries has: (i) accrued, declared or paid any dividends dividends, or authorized or made any distribution upon or with respect to any class or series of its capital stock, ; (ii) incurred any liabilities or guaranteed any indebtedness for money borrowed or any other liabilities (other than ordinary course obligations) individually in excess of $500,000 50,000 or, in the case of indebtedness and/or liabilities individually less than $500,00050,000, in excess of $1,000,000 100,000 in the aggregate, ; (iii) made any loans or advances to any personPerson not in excess, individually or in the aggregate, of $100,000, other than ordinary reasonable advances for travel expenses, ; or (iv) sold, exchanged or otherwise disposed of any of its assets or rights, other than the sale of its inventory Inventory in the ordinary course of business. (diii) For the purposes of subsections (bi) and (cii) aboveof this Section 12(f), all indebtedness, liabilities, agreements agreements, understandings, instruments, contracts and contracts proposed transactions involving the same person Person (including Persons it or entity any of its applicable Subsidiaries has reason to believe are affiliated therewith or with any Subsidiary thereof) shall be aggregated for the purpose of meeting the individual minimum dollar amounts of such subsections. (eiv) Neither the Company nor Parent maintains disclosure controls and procedures (“Disclosure Controls”) designed to ensure that information required to be disclosed by the Subsidiaries Parent in the reports that it files or submits under the Exchange Act is recorded, processed, summarized, and reported, within the time periods specified in violation the rules and forms of the SEC. (v) The Parent makes and keeps books, records, and accounts, that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of its assets. It maintains internal control over financial reporting (“Financial Reporting Controls”) designed by, or default under the supervision of, its principal executive and principal financial officers, and effected by its board of directors, management, and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP, including that: (1) transactions are executed in accordance with management’s general or specific authorization; (2) unauthorized acquisition, use, or disposition of the Parent’s assets that could have a material effect on the financial statements are prevented or timely detected; (3) transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that its receipts and expenditures are being made only in accordance with authorizations of the Parent’s management and board of directors; (4) transactions are recorded as necessary to maintain accountability for assets; and (5) the recorded accountability for assets is compared with the existing assets at reasonable intervals, and appropriate action is taken with respect to any term differences. (including without limitation vi) There is no weakness in any diligence obligation) of its Disclosure Controls or of any provision of Financial Reporting Controls that is required to be disclosed in any of the agreements set forth in Schedule 2.13 of the Disclosure Schedule (the “Material Agreements”). The executionExchange Act Filings, delivery, and performance of and compliance with this Agreement, and the Transaction Documents, and the issuance and sale of the Series D Preferred Stock pursuant hereto and of the Common Stock issuable upon conversion of the Series D Preferred Stock pursuant to the Restated Certificate, will not, with or without the passage of time or giving of notice, result in any such violation, or be in conflict with or constitute a default under any such term or provision, or result in the creation of any mortgage, pledge, lien, encumbrance or charge upon any of the properties or assets of the Company or the Subsidiaries or the suspension, revocation, impairment, forfeiture or nonrenewal of any Material Agreement, permit, license, authorization or approval applicable to the Company or the Subsidiaries, its business or operations or any of its assets or properties. The Company has avoided every condition, and has neither performed any act, the occurrence of which would result in the loss of any right granted to the Company or the Subsidiaries under any Material Agreement, nor failed to perform any act, the failure of which would result in the loss of any right granted to the Company or the Subsidiaries under any Material Agreementexcept as so disclosed.

Agreements; Action. Except as set forth on Schedule 5.6 or as disclosed in any Exchange Act Filings: (a) Except for agreements explicitly contemplated hereby and by the other Transaction Documents, there are no agreements, or proposed transactions between the Company or the Subsidiaries and any of their officersunderstandings, directors, employees, affiliates or, to the Company’s knowledge, any affiliate thereof. (b) There are no agreementsinstruments, contracts, instrumentsproposed transactions, judgments, orders, writs or decrees to which the Company or the Subsidiaries Borrower is a party or by which the Company or the Subsidiaries it is bound that which may involve involve: (i) obligations of (contingent or otherwise) of, or payments to to, the Company or the Subsidiaries, respectively, Borrower in excess of $500,00050,000 (other than obligations of, or payments to, the Borrower arising from purchase or sale agreements entered into in the ordinary course of business); or (ii) any the transfer or license of any Intellectual Property patent, copyright, trade secret or other proprietary right to or from the Company or the Subsidiaries Borrower (other than licenses arising from the license to purchase of “off the Company of standard, generally commercially available, “off-the-shelf” third-party or other standard products), ; or (iii) indemnification by the Company or the Subsidiaries with respect to infringements of proprietary rights, or (iv) provisions restricting the development, manufacture or distribution of the Borrower’s products or services services; or (iv) indemnification by the Borrower with respect to infringements of the Company or the Subsidiariesproprietary rights. (cb) The Company Since September 30, 2005 (the “Balance Sheet Date”), the Borrower has not not: (i) accrued, declared or paid any dividends dividends, or authorized or made any distribution upon or with respect to any class or series of its capital stock, ; (ii) incurred any liabilities or guaranteed any indebtedness for money borrowed or any other liabilities (other than ordinary course obligations) individually in excess of $500,000 50,000 or, in the case of indebtedness and/or liabilities individually less than $500,00050,000, in excess of $1,000,000 100,000 in the aggregate, ; (iii) made any loans or advances to any personperson or entity not in excess, individually or in the aggregate, of $100,000, other than ordinary reasonable course advances for travel expenses, ; or (iv) sold, exchanged or otherwise disposed of any of its assets or rights, other than the sale of its inventory in the ordinary course of business. (dc) For the purposes of subsections (ba) and (cb) above, all indebtedness, liabilities, agreements agreements, understandings, instruments, contracts and contracts proposed transactions involving the same person or entity (including persons or entities the Borrower has reason to believe are affiliated therewith) shall be aggregated for the purpose of meeting the individual minimum dollar amounts of such subsections. (e) Neither the Company nor the Subsidiaries is in violation or default of any term (including without limitation any diligence obligation) or of any provision of any of the agreements set forth in Schedule 2.13 of the Disclosure Schedule (the “Material Agreements”). The execution, delivery, and performance of and compliance with this Agreement, and the Transaction Documents, and the issuance and sale of the Series D Preferred Stock pursuant hereto and of the Common Stock issuable upon conversion of the Series D Preferred Stock pursuant to the Restated Certificate, will not, with or without the passage of time or giving of notice, result in any such violation, or be in conflict with or constitute a default under any such term or provision, or result in the creation of any mortgage, pledge, lien, encumbrance or charge upon any of the properties or assets of the Company or the Subsidiaries or the suspension, revocation, impairment, forfeiture or nonrenewal of any Material Agreement, permit, license, authorization or approval applicable to the Company or the Subsidiaries, its business or operations or any of its assets or properties. The Company has avoided every condition, and has neither performed any act, the occurrence of which would result in the loss of any right granted to the Company or the Subsidiaries under any Material Agreement, nor failed to perform any act, the failure of which would result in the loss of any right granted to the Company or the Subsidiaries under any Material Agreement.

Agreements; Action. (a) Except for agreements explicitly contemplated hereby and by the other Transaction Documents, as set forth on Schedule 4.6 or as disclosed in any SEC Reports: there are no agreements, or proposed transactions between the Company or the Subsidiaries and any of their officersunderstandings, directors, employees, affiliates or, to the Company’s knowledge, any affiliate thereof. (b) There are no agreementsinstruments, contracts, instrumentsproposed transactions, judgments, orders, writs or decrees to which the Company or the any of its Subsidiaries is a party or by which the Company or the Subsidiaries it is bound that which may involve involve: (i) obligations of (contingent or otherwise) of, or payments to to, the Company or the Subsidiaries, respectively, any of its Subsidiaries in excess of $500,00050,000 (other than obligations of, or payments to, the Company or any of its Subsidiaries arising from purchase or sale agreements entered into in the ordinary course of business); or (ii) any the transfer or license of any Intellectual Property patent, copyright, trade secret or other proprietary right to or from the Company or the any of its Subsidiaries (other than licenses arising from the license to purchase of "off the Company of standard, generally commercially available, “off-the-shelf” third-party " or other standard products), ; or (iii) indemnification by the Company or the Subsidiaries with respect to infringements of proprietary rights, or (iv) provisions restricting the development, manufacture or distribution of the Company's or any of its Subsidiaries products or services of services; or (iv) indemnification by the Company or any of its Subsidiaries with respect to infringements of proprietary rights. Since December 31, 2006 (the Subsidiaries. (c) The "Balance Sheet Date"), neither the Company has not nor any of its Subsidiaries has: (i) accrued, declared or paid any dividends dividends, or authorized or made any distribution upon or with respect to any class or series of its capital stock, ; (ii) incurred any liabilities or guaranteed any indebtedness for money borrowed or any other liabilities (other than ordinary course obligations) individually in excess of $500,000 50,000 or, in the case of indebtedness and/or liabilities individually less than $500,00050,000, in excess of $1,000,000 100,000 in the aggregate, ; (iii) made any loans or advances to any personperson or entity not in excess, individually or in the aggregate, of $100,000, other than ordinary reasonable course advances for travel expenses, ; or (iv) sold, exchanged or otherwise disposed of any of its assets or rights, other than the sale of its inventory in the ordinary course of business. (d) . For the purposes of subsections (ba) and (cb) above, all indebtedness, liabilities, agreements agreements, understandings, instruments, contracts and contracts proposed transactions involving the same person or entity (including persons or entities the Company or any Subsidiary of the Company has reason to believe are affiliated therewith) shall be aggregated for the purpose of meeting the individual minimum dollar amounts of such subsections. . The Company maintains disclosure controls and procedures (e"Disclosure Controls") Neither designed to ensure that information required to be disclosed by the Company nor in the Subsidiaries reports that it files or submits under the Securities Exchange Act of 1934, as amended (the "Exchange Act")is recorded, processed, summarized, and reported, within the time periods specified in the rules and forms of the Securities and Exchange Commission ("SEC"). The Company makes and keeps books, records, and accounts, that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the Company's assets in all material respects. The Company maintains internal control over financial reporting ("Financial Reporting Controls") designed by, or under the supervision of, the Company's principal executive and principal financial officers, and effected by the Company's board of directors, management, and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles ("GAAP"), including that: transactions are executed in accordance with management's general or specific authorization; unauthorized acquisition, use, or disposition of the Company's assets that would have a material effect on the financial statements are prevented or timely detected; transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that the Company's receipts and expenditures are being made only in accordance with authorizations of the Company's management and board of directors; transactions are recorded as necessary to maintain accountability for assets; and the recorded accountability for assets is compared with the existing assets at reasonable intervals, and appropriate action is taken with respect to any differences. There is no weakness in violation or default of any term (including without limitation any diligence obligation) or of any provision of any of the agreements set forth Company's Disclosure Controls or Financial Reporting Controls that is required to be disclosed in Schedule 2.13 of the Disclosure Schedule (the “Material Agreements”). The execution, delivery, and performance of and compliance with this Agreement, and the Transaction Documents, and the issuance and sale of the Series D Preferred Stock pursuant hereto and of the Common Stock issuable upon conversion of the Series D Preferred Stock pursuant to the Restated Certificate, will not, with or without the passage of time or giving of notice, result in any such violation, or be in conflict with or constitute a default under any such term or provision, or result in the creation of any mortgage, pledge, lien, encumbrance or charge upon any of the properties or assets of the Company or the Subsidiaries or the suspensionSEC Reports, revocation, impairment, forfeiture or nonrenewal of any Material Agreement, permit, license, authorization or approval applicable to the Company or the Subsidiaries, its business or operations or any of its assets or properties. The Company has avoided every condition, and has neither performed any act, the occurrence of which would result in the loss of any right granted to the Company or the Subsidiaries under any Material Agreement, nor failed to perform any act, the failure of which would result in the loss of any right granted to the Company or the Subsidiaries under any Material Agreementexcept as so disclosed.

Agreements; Action. Except as set forth on Schedule 4.6 or as disclosed in any Securities Filings: (a) Except for agreements explicitly contemplated hereby and by the other Transaction Documents, there are no agreements, or proposed transactions between the Company or the Subsidiaries and any of their officers, directors, employees, affiliates or, to the Company’s knowledge, any affiliate thereof. (b) There are no agreements, understandings, instruments, contracts, instrumentsproposed transactions, judgments, orders, writs or decrees to which the Company or the any of its Subsidiaries is a party or by which the Company or the Subsidiaries it is bound that may involve containing any: (i) obligations of (contingent or otherwise) of, or payments to to, the Company or the Subsidiaries, respectively, any of its Subsidiaries in excess of $500,00050,000 (other than (A) obligations of, or payments to, the Company or any of its Subsidiaries arising from purchase, lease, license or sale agreements entered into in the ordinary course of business, (B) Permitted Indebtedness and Permitted Guarantees (as defined in Section 6.12(e) hereof), and (C) the matters disclosed in Schedule 4.7); or (ii) any transfer or license of any Intellectual Property patent, copyright, trade secret or other proprietary right to or from the Company or the any of its Subsidiaries (other than licenses arising from the license to purchase of “off the Company of standard, generally commercially available, “off-the-shelf” third-party or other standard products), ; or (iii) indemnification by the Company or the Subsidiaries with respect to infringements of proprietary rights, or (iv) provisions restricting the development, manufacture or distribution of the Company’s or any of its Subsidiaries products or services of services; or (iv) indemnification by the Company or any of its Subsidiaries with respect to infringements of proprietary rights (other than indemnification provisions protecting the Subsidiarieslicensor of licenses arising from the purchase of “off the shelf” or other standard products). (cb) The Since March 31, 2006 (the “Balance Sheet Date”), neither the Company has not nor any of its Subsidiaries has: (i) accrued, declared or paid any dividends dividends, or authorized or made any distribution upon or with respect to any class or series of its capital stock, ; (ii) incurred any liabilities or guaranteed any indebtedness for money borrowed or any other liabilities (other than ordinary course obligations) individually in excess of $500,000 50,000 or, in the case of indebtedness and/or liabilities individually less than $500,00050,000, in excess of $1,000,000 100,000 in the aggregate, other than Permitted Indebtedness and Permitted Guarantees; (iii) made any loans or advances to any personperson or entity not in excess, individually or in the aggregate, of $100,000, other than ordinary reasonable course advances for travel expenses, and other than intercompany loans and advances among the Company and its Subsidiaries set forth on Schedule 4.6; or (iv) sold, exchanged or otherwise disposed of any of its assets or rights, other than the sale of its inventory in the ordinary course of business. (dc) For the purposes of subsections (ba) and (cb) above, all such indebtedness, liabilities, agreements and agreements, understandings, instruments, contracts or proposed transactions involving the same person or entity (including persons or entities the Company or any Subsidiary of the Company has reason to believe are affiliated therewith) shall be aggregated for the purpose of meeting the individual minimum dollar amounts of such subsections. (d) The Company maintains all disclosure controls and procedures required under applicable law (“Disclosure Controls”) designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized, and reported in accordance with and within the time periods specified in the rules and forms of the Securities and Exchange Commission (“SEC”). (e) Neither The Company makes and keep books, records, and accounts, that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the Company’s assets. The Company nor maintains internal control over financial reporting (“Financial Reporting Controls”) designed by, or under the Subsidiaries supervision of, the Company’s principal executive and principal financial officers, and effected by the Company’s board of directors, management, and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles (“GAAP”), including that: (i) material transactions are executed in accordance with management’s general or specific authorization or material deviations are timely detected; (ii) unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the financial statements are prevented or timely detected; (iii) transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that the Company’s receipts and expenditures are being made only in accordance with the general or specific authorizations of, or policies and procedures established by, the Company’s management and/or board of directors; (iv) transactions are recorded as necessary to maintain accountability for all material assets; and (v) the recorded accountability for assets is compared with the existing assets at reasonable intervals, and appropriate action is taken with respect to any differences. (f) There is no weakness in violation or default of any term (including without limitation any diligence obligation) or of any provision of any of the agreements set forth Company’s Disclosure Controls or Financial Reporting Controls that is required to be disclosed in Schedule 2.13 of the Disclosure Schedule (the “Material Agreements”). The execution, delivery, and performance of and compliance with this Agreement, and the Transaction Documents, and the issuance and sale of the Series D Preferred Stock pursuant hereto and of the Common Stock issuable upon conversion of the Series D Preferred Stock pursuant to the Restated Certificate, will not, with or without the passage of time or giving of notice, result in any such violation, or be in conflict with or constitute a default under any such term or provision, or result in the creation of any mortgage, pledge, lien, encumbrance or charge upon any of the properties or assets of the Company or the Subsidiaries or the suspensionSecurities Filings, revocation, impairment, forfeiture or nonrenewal of any Material Agreement, permit, license, authorization or approval applicable to the Company or the Subsidiaries, its business or operations or any of its assets or properties. The Company has avoided every condition, and has neither performed any act, the occurrence of which would result in the loss of any right granted to the Company or the Subsidiaries under any Material Agreement, nor failed to perform any act, the failure of which would result in the loss of any right granted to the Company or the Subsidiaries under any Material Agreementexcept as so disclosed.

Agreements; Action. (a) Except for agreements explicitly contemplated hereby and by hereby, to the other Transaction Documentsknowledge of Acquiror, there are no agreements, understandings or proposed transactions between the Company or the Subsidiaries Acquiror and any of their its officers, directors, employeesaffiliates, affiliates or, to the Company’s knowledge, or any affiliate thereof. (b) There To the knowledge of Acquiror, there are no agreements, understandings, instruments, contracts, instrumentsproposed transactions, judgments, orders, writs or decrees to which the Company or the Subsidiaries Acquiror is a party or by which the Company or the Subsidiaries it is bound that may involve (i) obligations of (contingent or otherwise) of, or payments to the Company or the Subsidiaries, respectively, Acquiror in excess of of, $500,00050,000, (ii) any the license of any Intellectual Property patent, copyright, trade secret or other proprietary right to or from the Company or the Subsidiaries Acquiror (other than the license to of Acquiror's software and products in the Company ordinary course of standard, generally commercially available, “off-the-shelf” third-party productsbusiness), or (iii) indemnification by the Company or the Subsidiaries with respect to infringements of proprietary rights, or (iv) provisions restricting or affecting the development, manufacture or distribution of the Acquiror's products or services of the Company or the Subsidiariesservices. (c) The Company To the knowledge of Acquiror, Acquiror has not (i) accrued, declared or paid any dividends or authorized or made any distribution upon or with respect to any class or series of its capital stock, (ii) incurred any liabilities or guaranteed any indebtedness for money borrowed or any other liabilities individually in excess of $500,000 50,000 or, in the case of indebtedness and/or liabilities individually less than $500,00050,000, in excess of $1,000,000 175,000 in the aggregate, (iii) made any loans or advances to any person, other than ordinary reasonable advances for travel expenses, or (iv) sold, exchanged or otherwise -35- 45 disposed of any of its assets or rights, other than the sale of its inventory in the ordinary course of business. (d) For the purposes of subsections (bsubsection 5.15(b) and (csubsection 5.15(c) above, all indebtedness, liabilities, agreements agreements, understandings, instruments, contracts and contracts proposed transactions involving the same person or entity (including persons or entities Acquiror has reason to believe are affiliated therewith) shall be aggregated for the purpose of meeting the individual minimum dollar amounts of such subsections. (e) Neither To the Company nor the Subsidiaries knowledge of Acquiror, Acquiror is in violation or default of any term (including without limitation any diligence obligation) or of any provision of any of the agreements set forth in Schedule 2.13 of the Disclosure Schedule (the “Material Agreements”). The execution, delivery, and performance of and compliance with this Agreement, and the Transaction Documents, and the issuance and sale of the Series D Preferred Stock pursuant hereto and of the Common Stock issuable upon conversion of the Series D Preferred Stock pursuant to the Restated Certificate, will not, with or without the passage of time or giving of notice, result in any such violationnot a party to, or be in conflict with is not bound by, any contract, agreement or constitute a default under any such term or provisioninstrument, or result in the creation of subject to any mortgagerestriction under its Restated Certificate or Bylaws that adversely affects its business as now conducted or as proposed to be conducted, pledge, lien, encumbrance or charge upon any of the its properties or assets its financial condition. (f) To the knowledge of Acquiror, Acquiror has not entered into any contracts that limit the Company ability of Acquiror, or the Subsidiaries or the suspension, revocation, impairment, forfeiture or nonrenewal of any Material Agreement, permit, license, authorization or approval applicable Person related to the Company or the Subsidiaries, its business or operations Acquiror or any of its assets affiliates, to compete in any line of business or properties. The Company with any person or in any geographic area or during any period of time, or to solicit any customer or client. (g) To the knowledge of Acquiror, Acquiror has avoided every conditionnot entered into any contracts pursuant to which Acquiror has agreed to supply products to a customer at specified prices, and whether directly or through a specific distributor, manufacturer's representative or deal. (h) Except as contemplated by this Agreement, Acquiror has neither performed any act, the occurrence of which would result not engaged in the loss past three (3) months in any discussion (i) with any representative of any right granted to corporation or corporations regarding the Company consolidation or merger of Acquiror with or into any such corporation or corporations, (ii) with any corporation, partnership, association or other business entity or any individual regarding the Subsidiaries under sale, conveyance or disposition of all or substantially all of the assets of Acquiror or a transaction or series of related transactions in which more than fifty percent (50%) of the voting power of Acquiror is disposed of, or (iii) regarding any Material Agreementother form of acquisition, nor failed to perform any actliquidation, the failure dissolution or winding up of which would result in the loss of any right granted to the Company or the Subsidiaries under any Material AgreementAcquiror.

Agreements; Action. (ai) Except for agreements explicitly contemplated hereby and by agreements between PBT and its employees with respect to the other Transaction Documentssale of PBT Common Stock and PBT Preferred Stock, there are no agreements, understandings or proposed transactions between the Company or the Subsidiaries PBT and any of their its officers, directors, employees, affiliates or, to the Company’s knowledge, or any affiliate thereof. (bii) There are no agreements, understandings, instruments, contracts, instrumentsproposed transactions, judgments, orders, writs or decrees to which the Company or the Subsidiaries PBT is a party or to its knowledge by which the Company or the Subsidiaries it is bound that may involve (iA) future obligations of (contingent or otherwise) of, or payments to the Company or the Subsidiariesto, respectively, PBT in excess of $500,000100,000 (other than obligations of, or payments to, PBT arising from purchase or sale agreements entered into in the ordinary course of business), or (iiB) any the transfer or license of any Intellectual Property patent, copyright, trade secret or other proprietary right to or from the Company or the Subsidiaries PBT (other than licenses by PBT of “off the license to the Company of standard, generally commercially available, “off-the-shelf” third-party or other standard products), ) or (iiiC) indemnification by the Company or the Subsidiaries PBT with respect to infringements of proprietary rightsrights (other than indemnification obligations arising from purchase, sale or (iv) provisions restricting license agreements entered into in the development, manufacture or distribution ordinary course of the products or services of the Company or the Subsidiariesbusiness). (ciii) The Company PBT has not (iA) accrued, declared or paid any dividends dividends, or authorized or made any distribution upon or with respect to any class or series of its capital stock, (iiB) incurred any liabilities or guaranteed any indebtedness for money borrowed or any other liabilities (other than with respect to dividend obligations, distributions, indebtedness and other obligations incurred in the ordinary course of business or as disclosed in the PBT Financial Statements) individually in excess of $500,000 100,000 or, in the case of indebtedness and/or liabilities individually less than $500,000100,000, in excess of $1,000,000 250,000 in the aggregate, (iiiC) made any loans or advances to any person, other than ordinary reasonable advances for travel expenses, or (ivD) sold, exchanged or otherwise disposed of any of its assets or rights, other than the sale of its inventory in the ordinary course of business. (div) For the purposes of subsections (bii) and (ciii) above, all indebtedness, liabilities, agreements agreements, understandings, instruments, contracts and contracts proposed transactions involving the same person or entity (including persons or entities PBT has reason to believe are affiliated therewith) shall be aggregated for the purpose of meeting the individual minimum dollar amounts of such subsections. (e) Neither the Company nor the Subsidiaries is in violation or default of any term (including without limitation any diligence obligation) or of any provision of any of the agreements set forth in Schedule 2.13 of the Disclosure Schedule (the “Material Agreements”). The execution, delivery, and performance of and compliance with this Agreement, and the Transaction Documents, and the issuance and sale of the Series D Preferred Stock pursuant hereto and of the Common Stock issuable upon conversion of the Series D Preferred Stock pursuant to the Restated Certificate, will not, with or without the passage of time or giving of notice, result in any such violation, or be in conflict with or constitute a default under any such term or provision, or result in the creation of any mortgage, pledge, lien, encumbrance or charge upon any of the properties or assets of the Company or the Subsidiaries or the suspension, revocation, impairment, forfeiture or nonrenewal of any Material Agreement, permit, license, authorization or approval applicable to the Company or the Subsidiaries, its business or operations or any of its assets or properties. The Company has avoided every condition, and has neither performed any act, the occurrence of which would result in the loss of any right granted to the Company or the Subsidiaries under any Material Agreement, nor failed to perform any act, the failure of which would result in the loss of any right granted to the Company or the Subsidiaries under any Material Agreement.

Agreements; Action. (aExcept as set forth on SCHEDULE 12(F) Except for agreements explicitly contemplated hereby and by the other Transaction Documents, there are no agreements, or proposed transactions between the Company or the Subsidiaries and as disclosed in any of their officers, directors, employees, affiliates or, to the Company’s knowledge, any affiliate thereof.Exchange Act Filings: (bi) There are no agreements, understandings, instruments, contracts, instrumentsproposed transactions, judgments, orders, writs or decrees to which the Company it or the any of its Subsidiaries is a party or to its knowledge by which the Company or the Subsidiaries it is bound that which may involve involve: (i) obligations of (contingent or otherwise) of, or payments to the Company to, it or the Subsidiaries, respectively, any of its Subsidiaries in excess of $500,000US$50,000 (other than obligations of, or payments to, it or any of its Subsidiaries arising from purchase or sale agreements entered into in the ordinary course of business); or (ii) any the transfer or license of any Intellectual Property patent, copyright, trade secret or other proprietary right to or from the Company or the Subsidiaries it (other than licenses arising from the license to purchase of "off the Company of standard, generally commercially available, “off-the-shelf” third-party " or other standard products), ; or (iii) indemnification by the Company or the Subsidiaries with respect to infringements of proprietary rights, or (iv) provisions restricting the development, manufacture or distribution of the its or any of its Subsidiaries' products or services services; or (iv) indemnification by it or any of the Company or the Subsidiariesits Subsidiaries with respect to infringements of proprietary rights. (cii) The Company has not Since December 31, 2004 (the "BALANCE SHEET DATE") neither it nor any of its Subsidiaries has: (i) accrued, declared or paid any dividends dividends, or authorized or made any distribution upon or with respect to any class or series of its capital stock, ; (ii) incurred any liabilities or guaranteed any indebtedness for money borrowed or any other liabilities (other than ordinary course obligations) individually in excess of $500,000 US$50,000 or, in the case of indebtedness and/or liabilities individually less than $500,000US$50,000, in excess of $1,000,000 US$100,000 in the aggregate, ; (iii) made any loans or advances to any personPerson not in excess, individually or in the aggregate, of US$100,000, other than ordinary reasonable advances for travel expenses, ; or (iv) sold, exchanged or otherwise disposed of any of its assets or rights, other than the sale of its inventory Inventory in the ordinary course of business. (diii) For the purposes of subsections (bi) and (cii) aboveof this Section 12(f), all indebtedness, liabilities, agreements agreements, understandings, instruments, contracts and contracts proposed transactions involving the same person Person (including Persons it or entity any of its applicable Subsidiaries has reason to believe are affiliated therewith or with any Subsidiary thereof) shall be aggregated for the purpose of meeting the individual minimum dollar amounts of such subsections. (eiv) Neither the Company nor Parent maintains disclosure controls and procedures ("DISCLOSURE CONTROLS") designed to ensure that information required to be disclosed by the Subsidiaries Parent in the reports that it files or submits under the Exchange Act and under the Securities Act (Ontario) (if any) is recorded, processed, summarized, and reported, within the time periods specified in violation the rules and forms of the SEC and the Ontario Securities Commission, as applicable. (v) The Parent makes and keeps books, records, and accounts, that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of its assets. It maintains internal control over financial reporting ("FINANCIAL REPORTING CONTROLS") designed by, or default under the supervision of, its principal executive and principal financial officers, and effected by its board of directors, management, and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP, including that: (1) transactions are executed in accordance with management's general or specific authorization; (2) unauthorized acquisition, use, or disposition of the Parent's assets that could have a material effect on the financial statements are prevented or timely detected; (3) transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that its receipts and expenditures are being made only in accordance with authorizations of the Parent's management and board of directors; (4) transactions are recorded as necessary to maintain accountability for assets; and (5) the recorded accountability for assets is compared with the existing assets at reasonable intervals, and appropriate action is taken with respect to any term differences. (including without limitation vi) There is no weakness in any diligence obligation) of its Disclosure Controls or of any provision of Financial Reporting Controls that is required to be disclosed in any of the agreements set forth in Schedule 2.13 of the Disclosure Schedule (the “Material Agreements”). The executionExchange Act Filings, delivery, and performance of and compliance with this Agreement, and the Transaction Documents, and the issuance and sale of the Series D Preferred Stock pursuant hereto and of the Common Stock issuable upon conversion of the Series D Preferred Stock pursuant to the Restated Certificate, will not, with or without the passage of time or giving of notice, result in any such violation, or be in conflict with or constitute a default under any such term or provision, or result in the creation of any mortgage, pledge, lien, encumbrance or charge upon any of the properties or assets of the Company or the Subsidiaries or the suspension, revocation, impairment, forfeiture or nonrenewal of any Material Agreement, permit, license, authorization or approval applicable to the Company or the Subsidiaries, its business or operations or any of its assets or properties. The Company has avoided every condition, and has neither performed any act, the occurrence of which would result in the loss of any right granted to the Company or the Subsidiaries under any Material Agreement, nor failed to perform any act, the failure of which would result in the loss of any right granted to the Company or the Subsidiaries under any Material Agreementexcept as so disclosed.

Agreements; Action. Except as set forth on Schedule 4.6 or as disclosed in any Exchange Act Filings: (a) Except for agreements explicitly contemplated hereby and by the other Transaction Documents, there are no agreements, or proposed transactions between the Company or the Subsidiaries and any of their officersunderstandings, directors, employees, affiliates or, to the Company’s knowledge, any affiliate thereof. (b) There are no agreementsinstruments, contracts, instrumentsproposed transactions, judgments, orders, writs or decrees to which the Company or the any of its Subsidiaries is a party or by which the Company or the Subsidiaries it is bound that which may involve involve: (i) obligations of (contingent or otherwise) of, or payments to to, the Company or the Subsidiaries, respectively, any of its Subsidiaries in excess of $500,000100,000 (other than obligations of, or payments to, the Company or any of its Subsidiaries arising from purchase or sale agreements entered into in the ordinary course of business); or (ii) any the transfer or license of any Intellectual Property patent, copyright, trade secret or other proprietary right to or from the Company or the any of its Subsidiaries (other than licenses arising from the license to purchase of "off the Company of standard, generally commercially available, “off-the-shelf” third-party " or other standard products), ; or (iii) indemnification by the Company or the Subsidiaries with respect to infringements of proprietary rights, or (iv) provisions restricting the development, manufacture or distribution of the Company's or any of its Subsidiaries products or services of services; or (iv) indemnification by the Company or the Subsidiariesany of its Subsidiaries with respect to infringements of proprietary rights. (cb) The Since December 31, 2004 (the "Balance Sheet Date"), neither the Company has not nor any of its Subsidiaries has: (i) accrued, declared or paid any dividends dividends, or authorized or made any distribution upon or with respect to any class or series of its capital stock, ; (ii) incurred any liabilities or guaranteed any indebtedness for money borrowed or any other liabilities (other than ordinary course obligations) individually in excess of $500,000 100,000 or, in the case of indebtedness and/or liabilities individually less than $500,000100,000, in excess of $1,000,000 200,000 in the aggregate, ; (iii) made any loans or advances to any personperson or entity not in excess, individually or in the aggregate, of $100,000, other than ordinary reasonable course advances for travel expenses, ; or (iv) sold, exchanged or otherwise disposed of any of its assets or rights, other than the sale of its inventory in the ordinary course of business. (dc) For the purposes of subsections (ba) and (cb) above, all indebtedness, liabilities, agreements agreements, understandings, instruments, contracts and contracts proposed transactions involving the same person or entity (including persons or entities the Company or any Subsidiary of the Company has reason to believe are affiliated therewith) shall be aggregated for the purpose of meeting the individual minimum dollar amounts of such subsections. (d) The Company maintains disclosure controls and procedures ("Disclosure Controls") designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized, and reported, within the time periods specified in the rules and forms of the Securities and Exchange Commission ("SEC"). (i) The Company makes and keep books, records, and accounts, that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the Company's assets. (e) Neither the Company nor the Subsidiaries There is no weakness in violation or default of any term (including without limitation any diligence obligation) or of any provision of any of the agreements set forth Company's Disclosure Controls that is required to be disclosed in Schedule 2.13 of the Disclosure Schedule (the “Material Agreements”). The execution, delivery, and performance of and compliance with this Agreement, and the Transaction Documents, and the issuance and sale of the Series D Preferred Stock pursuant hereto and of the Common Stock issuable upon conversion of the Series D Preferred Stock pursuant to the Restated Certificate, will not, with or without the passage of time or giving of notice, result in any such violation, or be in conflict with or constitute a default under any such term or provision, or result in the creation of any mortgage, pledge, lien, encumbrance or charge upon any of the properties Exchange Act Filings, except as so disclosed. (f) Except to the extent qualified by Schedule 4.6(f), the Company maintains such internal control over financial reporting as is required by the SEC, if applicable ("Financial Reporting Controls") designed by, or assets under the supervision of, the Company's principal executive and principal financial officers, and effected by the Company's board of directors, management, and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles ("GAAP"), including that: (i) transactions are executed in accordance with management's general or specific authorization; (ii) unauthorized acquisition, use, or disposition of the Company Company's assets that could have a material effect on the financial statements are prevented or the Subsidiaries or the suspension, revocation, impairment, forfeiture or nonrenewal timely detected; (iii) transactions are recorded as necessary to permit preparation of any Material Agreement, permit, license, authorization or approval applicable to the Company or the Subsidiaries, its business or operations or any of its assets or properties. The Company has avoided every conditionfinancial statements in accordance with GAAP, and has neither performed that the Company's receipts and expenditures are being made only in accordance with authorizations of the Company's management and board of directors; (iv) transactions are recorded as necessary to maintain accountability for assets; and (v) the recorded accountability for assets is compared with the existing assets at reasonable intervals, and appropriate action is taken with respect to any act, the occurrence of which would result in the loss of any right granted to the Company or the Subsidiaries under any Material Agreement, nor failed to perform any act, the failure of which would result in the loss of any right granted to the Company or the Subsidiaries under any Material Agreementdifferences.

Agreements; Action. Except as set forth on Schedule 4.6 or as ------------------- disclosed in any Exchange Act Filings: (a) Except for agreements explicitly contemplated hereby and by the other Transaction Documents, there are no agreements, or proposed transactions between the Company or the Subsidiaries and any of their officersunderstandings, directors, employees, affiliates or, to the Company’s knowledge, any affiliate thereof. (b) There are no agreementsinstruments, contracts, instrumentsproposed transactions, judgments, orders, writs or decrees to which the Company or the any of its Subsidiaries is a party or by which the Company or the Subsidiaries it is bound that which may involve involve: (i) obligations of (contingent or otherwise) of, or payments to to, the Company or the Subsidiaries, respectively, in excess of $500,00050,000 (other than obligations of, or payments to, the Company arising from agreements entered into in the ordinary course of business); or (ii) any the transfer or license of any Intellectual Property patent, copyright, trade secret or other proprietary right to or from the Company or the Subsidiaries (other than licenses arising from the license to purchase of "off the Company of standard, generally commercially available, “off-the-shelf” third-party " or other standard products), ; or (iii) indemnification by the Company or the Subsidiaries with respect to infringements of proprietary rights, or (iv) provisions restricting the development, manufacture or distribution of the Company's products or services of services; or (iv) indemnification by the Company or the Subsidiarieswith respect to infringements of proprietary rights. (cb) The Since December 31, 2003, except for Intercompany Transactions (as defined below), neither the Company has not nor any of its Subsidiaries has: (i) accrued, declared or paid any dividends dividends, or authorized or made any distribution upon or with respect to any class or series of its capital stock, ; (ii) incurred any liabilities or guaranteed any indebtedness for money borrowed or any other liabilities (other than ordinary course obligations) individually in excess of $500,000 50,000 or, in the case of indebtedness and/or liabilities individually less than $500,00050,000, in excess of $1,000,000 100,000 in the aggregate, ; (iii) made any loans or advances to any personperson not in excess, individually or in the aggregate, of $100,000, other than ordinary reasonable course advances for travel expenses, ; or (iv) sold, exchanged or otherwise disposed of any of its assets or rights, other than the sale of its inventory in the ordinary course of business. (d) . For the purposes of subsections (b) and (c) above, all indebtedness, liabilities, agreements and contracts involving the same person or entity shall be aggregated for the purpose of meeting the individual minimum dollar amounts of such subsections. (e) Neither the Company nor the Subsidiaries is in violation or default of any term (including without limitation any diligence obligation) or of any provision of any of the agreements set forth in Schedule 2.13 of the Disclosure Schedule (the “Material Agreements”). The execution, delivery, and performance of and compliance with this Agreement, "Intercompany Transactions" shall mean, collectively, (i) any dividends paid by any Subsidiary which is party to the Subsidiary Guaranty, the Master Security Agreement and the Transaction Documents, and the issuance and sale of the Series D Preferred Stock pursuant hereto and of the Common Stock issuable upon conversion of the Series D Preferred Stock pursuant to the Restated Certificate, will not, with or without the passage of time or giving of notice, result in Pledge Agreement (any such violationSubsidiary, a "Subsidiary Guarantor") to any other Subsidiary Guarantor or be in conflict with or constitute a default under the Company, (ii) any such term or provision, or result in the creation of any mortgage, pledge, lien, encumbrance or charge upon any of the properties or assets of loans made by the Company or the Subsidiaries or the suspension, revocation, impairment, forfeiture or nonrenewal of any Material Agreement, permit, license, authorization or approval applicable Subsidiary Guarantor to the Company or any Subsidiary Guarantor, (iii) any investments made by the Subsidiaries, its business or operations Company or any of its assets or properties. The Company has avoided every condition, and has neither performed any act, the occurrence of which would result Subsidiary Guarantor in the loss Company or any Subsidiary Guarantor and (iv) any transfer of assets by the Company or any right granted Subsidiary Guarantor to the Company or the Subsidiaries under any Material Agreement, nor failed to perform any act, the failure of which would result in the loss of any right granted to the Company or the Subsidiaries under any Material AgreementSubsidiary Guarantor.

Agreements; Action. (a) Except for (i) those agreements described on Schedule 3.10 attached hereto and (ii) agreements explicitly contemplated hereby and by the other Transaction Documentsthis Agreement, there are no agreements, or proposed transactions between the Company or the Subsidiaries and any of their officersunderstandings, directors, employees, affiliates or, to the Company’s knowledge, any affiliate thereof. (b) There are no agreementsinstruments, contracts, instruments, judgments, orders, writs writs, decrees or decrees proposed transactions to which the Company or the Subsidiaries Acquiree is a party or by which the Company or the Subsidiaries it is bound that may involve involve: (ix) obligations of (contingent or otherwise) of, or payments to to, the Company or the Subsidiaries, respectively, Acquiree in excess of $500,000, 50,000 or (iiy) any license contract, agreement, commitment, arrangement or understanding relating to any joint venture, partnership or sharing of profits or losses with any Person. The Acquiree is not a guarantor or indemnitor of any Intellectual Property to or from the Company or the Subsidiaries (indebtedness of any other than the license to the Company of standard, generally commercially available, “off-the-shelf” third-party products), (iii) indemnification by the Company or the Subsidiaries with respect to infringements of proprietary rights, or (iv) provisions restricting the development, manufacture or distribution of the products or services of the Company or the Subsidiariesperson. (cb) The Company Acquiree has not (i) accrued, declared or paid any dividends dividends, or authorized or made any distribution upon or with respect to any class or series of its capital stock, stock or (ii) incurred any liabilities or guaranteed any indebtedness for money borrowed or incurred any other liabilities individually in excess of $500,000 or, in the case of indebtedness and/or liabilities individually less than $500,000, 25,000 or in excess of $1,000,000 50,000 in the aggregate, except in connection with the issuance of the Notes. (c) Except as described on Schedule 3.10, the Acquiree has not engaged in the past three months in any discussion (i) with any representative of any corporation regarding the merger of the Acquiree with or into any such corporation, (ii) with any representative of any corporation, partnership, association or other business entity or any individual regarding the sale, conveyance or disposition of all or substantially all of the assets of the Acquiree or a transaction or series of related transactions in which more than fifty percent (50%) of the voting power of the Acquiree would be disposed of, or (iii) made regarding any loans other form of liquidation, dissolution or advances to any person, other than ordinary reasonable advances for travel expenses, or (iv) sold, exchanged or otherwise disposed winding up of any of its assets or rights, other than the sale of its inventory in the ordinary course of businessAcquiree. (d) For the purposes Copies of subsections (b) and (c) above, all indebtedness, liabilitiescontracts, agreements or instruments appearing on Schedule 3.10 (hereinafter collectively referred to as the "CONTRACTS") have been delivered to counsel to the Acquiror. Except as described on Schedule 3.10, the Acquiree has fulfilled and contracts involving performed in all material respects its obligations under each of the same person Contracts required to be performed prior to the date hereof, and the Acquiree is not in, or entity shall to the Knowledge of the Acquiree, alleged to be aggregated for the purpose of meeting the individual minimum dollar amounts of such subsections. (e) Neither the Company nor the Subsidiaries is in violation in, material breach or default under, nor is there to the Knowledge of the Acquiree, alleged to be any term (including without limitation any diligence obligation) or of any provision basis for termination of any of the agreements set forth in Schedule 2.13 Contracts or any loss of right thereunder and, to the Knowledge of the Disclosure Schedule (the “Material Agreements”). The executionAcquiree, delivery, and performance of and compliance with this Agreement, and the Transaction Documents, and the issuance and sale no other party to any of the Series D Preferred Stock pursuant hereto and Contracts has materially breached or defaulted thereunder. Except as described on Schedule 3.10, to the Knowledge of the Common Stock issuable upon conversion Acquiree, no event has occurred and no condition or state of the Series D Preferred Stock pursuant to the Restated Certificate, will notfacts exists which, with or without the passage of time or the giving of noticenotice or both, result in would constitute such a loss of right, material default or breach by the Acquiree or by any such violation, or be in conflict with or constitute a default under any such term or provision, or result in the creation of any mortgage, pledge, lien, encumbrance or charge upon any of the properties or assets of the Company or the Subsidiaries or the suspension, revocation, impairment, forfeiture or nonrenewal of any Material Agreement, permit, license, authorization or approval applicable to the Company or the Subsidiaries, its business or operations or any of its assets or properties. The Company has avoided every condition, and has neither performed any act, the occurrence of which would result in the loss of any right granted to the Company or the Subsidiaries under any Material Agreement, nor failed to perform any act, the failure of which would result in the loss of any right granted to the Company or the Subsidiaries under any Material Agreementother party.

Agreements; Action. Except as set forth on Schedule 4.6 or as disclosed in any Exchange Act Filings: (a) Except for agreements explicitly contemplated hereby and by the other Transaction Documents, there are no agreements, or proposed transactions between the Company or the Subsidiaries and any of their officersunderstandings, directors, employees, affiliates or, to the Company’s knowledge, any affiliate thereof. (b) There are no agreementsinstruments, contracts, instrumentsproposed transactions, judgments, orders, writs or decrees to which Each of the Company or the and its Subsidiaries is a party or by which the Company or the Subsidiaries it is bound that which may involve involve: (i) obligations of (contingent or otherwise) of, or payments to to, the Company or the Subsidiaries, respectively, any of its Subsidiaries in excess of $500,00050,000 (other than obligations of, or payments to, the Company or any of its Subsidiaries arising from purchase or sale agreements entered into in the ordinary course of business); or (ii) any the transfer or license of any Intellectual Property patent, copyright, trade secret or other proprietary right to or from the Company or the any of its Subsidiaries (other than licenses arising from the license to purchase of “off the Company of standard, generally commercially available, “off-the-shelf” third-party or other standard products), ; or (iii) indemnification by the Company or the Subsidiaries with respect to infringements of proprietary rights, or (iv) provisions restricting the development, manufacture or distribution of the Company’s or any of its Subsidiaries’ products or services of services; or (iv) indemnification by the Company or the Subsidiariesany of its Subsidiaries with respect to infringements of proprietary rights. (cb) The Since March 31, 2005 (the “Balance Sheet Date”), neither the Company nor any of its Subsidiaries has not : (i) accrued, declared or paid any dividends dividends, or authorized or made any distribution upon or with respect to any class or series of its capital stock, ; (ii) incurred any liabilities or guaranteed any indebtedness for money borrowed or any other liabilities (other than ordinary course obligations) individually in excess of $500,000 50,000 or, in the case of indebtedness and/or liabilities individually less than $500,00050,000, in excess of $1,000,000 100,000 in the aggregate, ; (iii) made any loans or advances to any personperson or entity not in excess, individually or in the aggregate, of $100,000, other than ordinary reasonable course advances for travel expenses, ; or (iv) sold, exchanged or otherwise disposed of any of its assets or rights, other than the sale of its inventory in the ordinary course of business. (dc) For the purposes of subsections (ba) and (cb) above, all indebtedness, liabilities, agreements agreements, understandings, instruments, contracts and contracts proposed transactions involving the same person or entity (including persons or entities the Company or any of its Subsidiaries has reason to believe are affiliated therewith) shall be aggregated for the purpose of meeting the individual minimum dollar amounts of such subsections. (d) The Company maintains disclosure controls and procedures (“Disclosure Controls”) designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized, and reported, within the time periods specified in the rules and forms of the Securities and Exchange Commission (“SEC”). (e) Neither The Company makes and keep books, records, and accounts, that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the Company’s assets. The Company nor maintains internal control over financial reporting (“Financial Reporting Controls”) designed by, or under the Subsidiaries supervision of, the Company’s principal executive and principal financial officers, and effected by the Company’s board of directors, management, and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles (“GAAP”), including that: (i) transactions are executed in accordance with management’s general or specific authorization; (ii) unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the financial statements are prevented or timely detected; (iii) transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that the Company’s receipts and expenditures are being made only in accordance with authorizations of the Company’s management and board of directors; (iv) transactions are recorded as necessary to maintain accountability for assets; and (v) the recorded accountability for assets is compared with the existing assets at reasonable intervals, and appropriate action is taken with respect to any differences. (f) There is no weakness in violation or default of any term (including without limitation any diligence obligation) or of any provision of any of the agreements set forth Company’s Disclosure Controls or Financial Reporting Controls that is required to be disclosed in Schedule 2.13 of the Disclosure Schedule (the “Material Agreements”). The execution, delivery, and performance of and compliance with this Agreement, and the Transaction Documents, and the issuance and sale of the Series D Preferred Stock pursuant hereto and of the Common Stock issuable upon conversion of the Series D Preferred Stock pursuant to the Restated Certificate, will not, with or without the passage of time or giving of notice, result in any such violation, or be in conflict with or constitute a default under any such term or provision, or result in the creation of any mortgage, pledge, lien, encumbrance or charge upon any of the properties or assets of the Company or the Subsidiaries or the suspensionExchange Act Filings, revocation, impairment, forfeiture or nonrenewal of any Material Agreement, permit, license, authorization or approval applicable to the Company or the Subsidiaries, its business or operations or any of its assets or properties. The Company has avoided every condition, and has neither performed any act, the occurrence of which would result in the loss of any right granted to the Company or the Subsidiaries under any Material Agreement, nor failed to perform any act, the failure of which would result in the loss of any right granted to the Company or the Subsidiaries under any Material Agreementexcept as so disclosed.

Agreements; Action. (aExcept as set forth on Schedule 12(f) Except for agreements explicitly contemplated hereby and by the other Transaction Documents, there are no agreements, or proposed transactions between the Company or the Subsidiaries and as disclosed in any of their officers, directors, employees, affiliates or, to the Company’s knowledge, any affiliate thereof. (b) Exchange Act Filings: There are no agreements, understandings, instruments, contracts, instrumentsproposed transactions, judgments, orders, writs or decrees to which the Company it or the any of its Subsidiaries is a party or to its knowledge by which the Company or the Subsidiaries it is bound that which may involve involve: (iA) obligations of (contingent or otherwise) of, or payments to the Company to, it or the Subsidiaries, respectively, any of its Subsidiaries in excess of $500,00050,000 (other than obligations of, or payments to, it or any of its Subsidiaries arising from purchase or sale agreements entered into in the ordinary course of business); or (iiB) any the transfer or license of any Intellectual Property patent, copyright, trade secret or other proprietary right to or from the Company or the Subsidiaries it (other than licenses arising from the license to purchase of "off the Company of standard, generally commercially available, “off-the-shelf” third-party " or other standard products), (iii) indemnification by the Company or the Subsidiaries with respect to infringements of proprietary rights, ; or (ivC) provisions restricting the development, manufacture or distribution of the its or any of its Subsidiaries' products or services services; or (iv) indemnification by it or any of its Subsidiaries with respect to infringements of proprietary rights. Since December 31, 2006 (the Company or the Subsidiaries. "Balance Sheet Date") neither it nor any of its Subsidiaries has: (cA) The Company has not (i) accrued, declared or paid any dividends dividends, or authorized or made any distribution upon or with respect to any class or series of its capital stock, ; (iiB) incurred any liabilities or guaranteed any indebtedness for money borrowed or any other liabilities (other than ordinary course obligations) individually in excess of $500,000 50,000 or, in the case of indebtedness and/or liabilities individually less than $500,00050,000, in excess of $1,000,000 100,000 in the aggregate, ; (iiiC) made any loans or advances to any personPerson not in excess, individually or in the aggregate, of $100,000, other than ordinary reasonable advances for travel expenses, ; or (ivD) sold, exchanged or otherwise disposed of any of its assets or rights, other than the sale of its inventory Inventory in the ordinary course of business. (d) . For the purposes of subsections (bi) and (cii) aboveof this Section 12(f), all indebtedness, liabilities, agreements agreements, understandings, instruments, contracts and contracts proposed transactions involving the same person Person (including Persons it or entity any of its applicable Subsidiaries has reason to believe are affiliated therewith or with any Subsidiary thereof) shall be aggregated for the purpose of meeting the individual minimum dollar amounts of such subsections. . the Parent maintains disclosure controls and procedures (e"Disclosure Controls") Neither designed to ensure that information required to be disclosed by the Company nor Parent in the Subsidiaries reports that it files or submits under the Exchange Act is recorded, processed, summarized, and reported, within the time periods specified in violation the rules and forms of the SEC. The Parent makes and keeps books, records, and accounts, that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of its assets. It maintains internal control over financial reporting ("Financial Reporting Controls") designed by, or default under the supervision of, its principal executive and principal financial officers, and effected by its board of directors, management, and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP, including that: transactions are executed in accordance with management's general or specific authorization; unauthorized acquisition, use, or disposition of the Parent's assets that could have a material effect on the financial statements are prevented or timely detected; transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that its receipts and expenditures are being made only in accordance with authorizations of the Parent's management and board of directors; transactions are recorded as necessary to maintain accountability for assets; and the recorded accountability for assets is compared with the existing assets at reasonable intervals, and appropriate action is taken with respect to any term (including without limitation differences. There is no weakness in any diligence obligation) of its Disclosure Controls or of any provision of Financial Reporting Controls that is required to be disclosed in any of the agreements set forth Exchange Act Filings, except as so disclosed in Schedule 2.13 of the Disclosure Schedule (the “Material Agreements”). The execution, delivery, and performance of and compliance with this Agreement, and the Transaction Documents, and the issuance and sale of the Series D Preferred Stock pursuant hereto and of the Common Stock issuable upon conversion of the Series D Preferred Stock pursuant to the Restated Certificate, will not, with or without the passage of time or giving of notice, result in any such violation, or be in conflict with or constitute a default under any such term or provision, or result in the creation of any mortgage, pledge, lien, encumbrance or charge upon any of the properties or assets of the Company or the Subsidiaries or the suspension, revocation, impairment, forfeiture or nonrenewal of any Material Agreement, permit, license, authorization or approval applicable to the Company or the Subsidiaries, its business or operations or any of its assets or properties. The Company has avoided every condition, and has neither performed any act, the occurrence of which would result in the loss of any right granted to the Company or the Subsidiaries under any Material Agreement, nor failed to perform any act, the failure of which would result in the loss of any right granted to the Company or the Subsidiaries under any Material AgreementExchange Act filings.

Agreements; Action. (aExcept as set forth on Schedule 12(f) Except for agreements explicitly contemplated hereby and by the other Transaction Documents, there are no agreements, or proposed transactions between the Company or the Subsidiaries and as disclosed in any of their officers, directors, employees, affiliates or, to the Company’s knowledge, any affiliate thereof.Exchange Act Filings: (bi) There are no agreements, understandings, instruments, contracts, instrumentsproposed transactions, judgments, orders, writs or decrees to which the Company it or the any of its Subsidiaries is a party or to its knowledge by which the Company or the Subsidiaries it is bound that which may involve involve: (i) obligations of (contingent or otherwise) of, or payments to the Company to, it or the Subsidiaries, respectively, any of its Subsidiaries in excess of $500,00050,000 (other than obligations of, or payments to, it or any of its Subsidiaries arising from purchase or sale agreements entered into in the ordinary course of business); or (ii) any the transfer or license of any Intellectual Property patent, copyright, trade secret or other proprietary right to or from the Company or the Subsidiaries it (other than licenses arising from the license to purchase of “off the Company of standard, generally commercially available, “off-the-shelf” third-party or other standard products), ; or (iii) indemnification by the Company or the Subsidiaries with respect to infringements of proprietary rights, or (iv) provisions restricting the development, manufacture or distribution of the its or any of its Subsidiaries’ products or services services; or (iv) indemnification by it or any of the Company or the Subsidiariesits Subsidiaries with respect to infringements of proprietary rights. (cii) The Company has not Since December 30, 2005 (the “Balance Sheet Date”) neither it nor any of its Subsidiaries has: (i) accrued, declared or paid any dividends dividends, or authorized or made any distribution upon or with respect to any class or series of its capital stock, ; (ii) incurred any liabilities or guaranteed any indebtedness for money borrowed or any other liabilities (other than ordinary course obligations) individually in excess of $500,000 50,000 or, in the case of indebtedness and/or liabilities individually less than $500,00050,000, in excess of $1,000,000 100,000 in the aggregate, ; (iii) made any loans or advances to any personPerson not in excess, individually or in the aggregate, of $100,000, other than ordinary reasonable advances for travel expenses, ; or (iv) sold, exchanged or otherwise disposed of any of its assets or rights, other than the sale of its inventory Inventory in the ordinary course of business. (diii) For the purposes of subsections (bi) and (cii) aboveof this Section 12(f), all indebtedness, liabilities, agreements agreements, understandings, instruments, contracts and contracts proposed transactions involving the same person Person (including Persons it or entity any of its applicable Subsidiaries has reason to believe are affiliated therewith or with any Subsidiary thereof) shall be aggregated for the purpose of meeting the individual minimum dollar amounts of such subsections. (eiv) Neither the Company nor Parent maintains disclosure controls and procedures (“Disclosure Controls”) designed to ensure that information required to be disclosed by the Subsidiaries Parent in the reports that it files or submits under the Exchange Act is recorded, processed, summarized, and reported, within the time periods specified in violation the rules and forms of the SEC. (v) The Parent makes and keeps books, records, and accounts, that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of its assets. It maintains internal control over financial reporting (“Financial Reporting Controls”) designed by, or default under the supervision of, its principal executive and principal financial officers, and effected by its board of directors, management, and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP, including that: (1) transactions are executed in accordance with management’s general or specific authorization; (2) unauthorized acquisition, use, or disposition of the Parent’s assets that could have a material effect on the financial statements are prevented or timely detected; (3) transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that its receipts and expenditures are being made only in accordance with authorizations of the Parent’s management and board of directors; (4) transactions are recorded as necessary to maintain accountability for assets; and (5) the recorded accountability for assets is compared with the existing assets at reasonable intervals, and appropriate action is taken with respect to any term differences. (including without limitation vi) There is no weakness in any diligence obligation) of its Disclosure Controls or of any provision of Financial Reporting Controls that is required to be disclosed in any of the agreements set forth in Schedule 2.13 of the Disclosure Schedule (the “Material Agreements”). The executionExchange Act Filings, delivery, and performance of and compliance with this Agreement, and the Transaction Documents, and the issuance and sale of the Series D Preferred Stock pursuant hereto and of the Common Stock issuable upon conversion of the Series D Preferred Stock pursuant to the Restated Certificate, will not, with or without the passage of time or giving of notice, result in any such violation, or be in conflict with or constitute a default under any such term or provision, or result in the creation of any mortgage, pledge, lien, encumbrance or charge upon any of the properties or assets of the Company or the Subsidiaries or the suspension, revocation, impairment, forfeiture or nonrenewal of any Material Agreement, permit, license, authorization or approval applicable to the Company or the Subsidiaries, its business or operations or any of its assets or properties. The Company has avoided every condition, and has neither performed any act, the occurrence of which would result in the loss of any right granted to the Company or the Subsidiaries under any Material Agreement, nor failed to perform any act, the failure of which would result in the loss of any right granted to the Company or the Subsidiaries under any Material Agreementexcept as so disclosed.

Agreements; Action. Except as set forth on Schedule 4.6 or as disclosed in the Exchange Filings: (a) Except for agreements explicitly contemplated hereby and by the other Transaction Documents, there are no agreements, or proposed transactions between the Company or the Subsidiaries and any of their officers, directors, employees, affiliates or, to the Company’s knowledge, any affiliate thereof. (b) There are no agreements, understandings, instruments, contracts, instrumentsproposed transactions, judgments, orders, writs or decrees to which the Company or the any of its Subsidiaries is a party or by which the Company or the Subsidiaries it is bound that which may involve involve: (i) obligations of (contingent or otherwise) of, or payments to to, the Company or the Subsidiaries, respectively, any of its Subsidiaries in excess of $500,000250,000 (other than obligations of, or payments to, the Company or any of its Subsidiaries arising from purchase or sale agreements, contracts for services, marketing and advertising related agreements, etc. entered into in the ordinary course of business); (ii) any the transfer or license of any Intellectual Property patent, copyright, trade secret or other proprietary right to or from the Company or the any of its Subsidiaries (other than licenses arising from the license to purchase of “off the Company of standard, generally commercially available, “off-the-shelf” third-party or other standard products), ; (iii) indemnification by the Company or the Subsidiaries with respect to infringements of proprietary rights, or (iv) provisions restricting the development, manufacture or distribution of the Company’s or any of its Subsidiaries' material products or services of services; or (iv) indemnification by the Company or the Subsidiariesany of its Subsidiaries with respect to infringements of material proprietary rights. (cb) The Except as set forth on Schedule 4.6, since December 31, 2005 (the “Balance Sheet Date”), neither the Company has not nor any of its Subsidiaries has: (i) accrued, declared or paid any dividends dividends, or authorized or made any distribution upon or with respect to any class or series of its capital stock, ; (ii) incurred any liabilities or guaranteed any indebtedness for money borrowed or any other liabilities (other than ordinary course obligations and intercompany loans) individually in excess of $500,000 250,000 or, in the case of indebtedness and/or liabilities individually less than $500,000250,000, in excess of $1,000,000 500,000 in the aggregate, ; (iii) made any loans or advances to any personin excess of $500,000, in the aggregate of all such loans and advances, other than ordinary reasonable course advances for travel expenses, ; or (iv) sold, exchanged or otherwise disposed of any of its assets or rights, other than the sale of its inventory in the ordinary course of business. (dc) For the purposes of subsections (ba) and (cb) above, all indebtedness, liabilities, agreements agreements, understandings, instruments, contracts and contracts proposed transactions involving the same person or entity (including persons or entities the Company or any Subsidiary of the Company has reason to believe are affiliated therewith) shall be aggregated for the purpose of meeting the individual minimum dollar amounts of such subsections. (d) The Company maintains disclosure controls and procedures (“Disclosure Controls”) designed to ensure that information required to be disclosed by the Company in its Exchange Act Filings is recorded, processed, summarized, and reported, within the time periods specified by the Exchange Act, and the applicable rules and forms promulgated by the Securities and Exchange Commission (“SEC”). (e) Neither The Company makes and keeps books, records, and accounts, that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the Company’s assets. The Company nor maintains internal control over financial reporting (“Financial Reporting Controls”) designed by, or under the Subsidiaries supervision of, the Company’s principal executive and principal financial officers, and effected by the Company’s board of directors, management, and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles (“GAAP”), including that: (i) transactions are executed in accordance with management’s general or specific authorization; (ii) unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the financial statements are prevented or timely detected; (iii) transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that the Company’s receipts and expenditures are being made only in accordance with authorizations of the Company’s management and board of directors; (iv) transactions are recorded as necessary to maintain accountability for assets; and (v) the recorded accountability for assets is compared with the existing assets at reasonable intervals, and appropriate action is taken with respect to any differences. (f) There is no weakness in violation or default of any term (including without limitation any diligence obligation) or of any provision of any of the agreements set forth Company’s Disclosure Controls or Financial Reporting Controls that is required to be disclosed in Schedule 2.13 of the Disclosure Schedule (the “Material Agreements”). The execution, delivery, and performance of and compliance with this Agreement, and the Transaction Documents, and the issuance and sale of the Series D Preferred Stock pursuant hereto and of the Common Stock issuable upon conversion of the Series D Preferred Stock pursuant to the Restated Certificate, will not, with or without the passage of time or giving of notice, result in any such violation, or be in conflict with or constitute a default under any such term or provision, or result in the creation of any mortgage, pledge, lien, encumbrance or charge upon any of the properties or assets of the Company or the Subsidiaries or the suspensionExchange Act Filings, revocation, impairment, forfeiture or nonrenewal of any Material Agreement, permit, license, authorization or approval applicable to the Company or the Subsidiaries, its business or operations or any of its assets or properties. The Company has avoided every condition, and has neither performed any act, the occurrence of which would result in the loss of any right granted to the Company or the Subsidiaries under any Material Agreement, nor failed to perform any act, the failure of which would result in the loss of any right granted to the Company or the Subsidiaries under any Material Agreementexcept as so disclosed.

Agreements; Action. (aExcept as set forth on Schedule 12(f) Except for agreements explicitly contemplated hereby and by the other Transaction Documents, there are no agreements, or proposed transactions between the Company or the Subsidiaries and as disclosed in any of their officers, directors, employees, affiliates or, to the Company’s knowledge, any affiliate thereof.Exchange Act Filings: (bi) There are no agreements, understandings, instruments, contracts, instrumentsproposed transactions, judgments, orders, writs or decrees to which the Company it or the any of its Subsidiaries is a party or to its knowledge by which the Company or the Subsidiaries it is bound that which may involve involve: (i) obligations of (contingent or otherwise) of, or payments to the Company to, it or the Subsidiaries, respectively, any of its Subsidiaries in excess of $500,00050,000 (other than obligations of, or payments to, it or any of its Subsidiaries arising from purchase or sale agreements entered into in the ordinary course of business); or (ii) any the transfer or license of any Intellectual Property patent, copyright, trade secret or other proprietary right to or from the Company or the Subsidiaries it (other than licenses arising from the license to purchase of "off the Company of standard, generally commercially available, “off-the-shelf” third-party " or other standard products), ; or (iii) indemnification by the Company or the Subsidiaries with respect to infringements of proprietary rights, or (iv) provisions restricting the development, manufacture or distribution of the its or any of its Subsidiaries' products or services services; or (iv) indemnification by it or any of the Company or the Subsidiariesits Subsidiaries with respect to infringements of proprietary rights. (cii) The Company has not Since September 20, 2005 (the "Balance Sheet Date"), neither it nor any of its Subsidiaries has: (i) accrued, declared or paid any dividends dividends, or authorized or made any distribution upon or with respect to any class or series of its capital stock, ; (ii) incurred any liabilities or guaranteed any indebtedness for money borrowed or any other liabilities (other than ordinary course obligations) individually in excess of $500,000 50,000 or, in the case of indebtedness and/or liabilities individually less than $500,00050,000, in excess of $1,000,000 100,000 in the aggregate, ; (iii) made any loans or advances to any personPerson not in excess, individually or in the aggregate, of $100,000, other than ordinary reasonable advances for travel expenses, ; or (iv) sold, exchanged or otherwise disposed of any of its assets or rights, other than the sale of its inventory Inventory in the ordinary course of business. (diii) For the purposes of subsections (bi) and (cii) aboveof this Section 12(f), all indebtedness, liabilities, agreements agreements, understandings, instruments, contracts and contracts proposed transactions involving the same person Person (including Persons it or entity any of its applicable Subsidiaries has reason to believe are affiliated therewith or with any Subsidiary thereof) shall be aggregated for the purpose of meeting the individual minimum dollar amounts of such subsections. (eiv) Neither the Company nor Parent maintains disclosure controls and procedures ("Disclosure Controls") designed to ensure that information required to be disclosed by the Subsidiaries Parent in the reports that it files or submits under the Exchange Act is recorded, processed, summarized, and reported, within the time periods specified in violation the rules and forms of the SEC. (v) The Parent makes and keeps books, records, and accounts, that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of its assets. It maintains internal control over financial reporting ("Financial Reporting Controls") designed by, or default under the supervision of, its principal executive and principal financial officers, and effected by its board of directors, management, and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP, including that: (1) transactions are executed in accordance with management's general or specific authorization; (2) unauthorized acquisition, use, or disposition of the Parent's assets that could have a material effect on the financial statements are prevented or timely detected; (3) transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that its receipts and expenditures are being made only in accordance with authorizations of the Parent's management and board of directors; (4) transactions are recorded as necessary to maintain accountability for assets; and (5) the recorded accountability for assets is compared with the existing assets at reasonable intervals, and appropriate action is taken with respect to any term differences. (including without limitation vi) There is no weakness in any diligence obligation) of its Disclosure Controls or of any provision of Financial Reporting Controls that is required to be disclosed in any of the agreements set forth in Schedule 2.13 of the Disclosure Schedule (the “Material Agreements”). The executionExchange Act Filings, delivery, and performance of and compliance with this Agreement, and the Transaction Documents, and the issuance and sale of the Series D Preferred Stock pursuant hereto and of the Common Stock issuable upon conversion of the Series D Preferred Stock pursuant to the Restated Certificate, will not, with or without the passage of time or giving of notice, result in any such violation, or be in conflict with or constitute a default under any such term or provision, or result in the creation of any mortgage, pledge, lien, encumbrance or charge upon any of the properties or assets of the Company or the Subsidiaries or the suspension, revocation, impairment, forfeiture or nonrenewal of any Material Agreement, permit, license, authorization or approval applicable to the Company or the Subsidiaries, its business or operations or any of its assets or properties. The Company has avoided every condition, and has neither performed any act, the occurrence of which would result in the loss of any right granted to the Company or the Subsidiaries under any Material Agreement, nor failed to perform any act, the failure of which would result in the loss of any right granted to the Company or the Subsidiaries under any Material Agreementexcept as so disclosed.

Agreements; Action. (a) Except for agreements explicitly contemplated hereby and by the other Transaction Documents, there are no agreements, or proposed transactions between the Company or the Subsidiaries and any of their officers, directors, employees, affiliates or, to the Company’s knowledge, any affiliate thereof.as set forth on Schedule 12(f): (bi) There are no agreements, understandings, instruments, contracts, instrumentsproposed transactions, judgments, orders, writs or decrees to which the Company it or the any of its Subsidiaries is a party or to its knowledge by which the Company or the Subsidiaries it is bound that which may involve involve: (i) obligations of (contingent or otherwise) of, or payments to the Company to, it or the Subsidiaries, respectively, any of its Subsidiaries in excess of $500,00050,000 (other than obligations of, or payments to, it or any of its Subsidiaries arising from purchase or sale agreements entered into in the ordinary course of business); or (ii) any the transfer or license of any Intellectual Property patent, copyright, trade secret or other proprietary right to or from the Company or the Subsidiaries it (other than licenses arising from the license to purchase of “off the Company of standard, generally commercially available, “off-the-shelf” third-party or other standard products), ; or (iii) indemnification by the Company or the Subsidiaries with respect to infringements of proprietary rights, or (iv) provisions restricting the development, manufacture or distribution of the its or any of its Subsidiaries’ products or services services; or (iv) indemnification by it or any of the Company or the Subsidiariesits Subsidiaries with respect to infringements of proprietary rights. (cii) The Company has not Since December 31, 2005 (the “Balance Sheet Date”) neither it nor any of its Subsidiaries has: (i) accrued, declared or paid any dividends dividends, or authorized or made any distribution upon or with respect to any class or series of its capital stock, ; (ii) incurred any liabilities or guaranteed any indebtedness for money borrowed or any other liabilities (other than ordinary course obligations) individually in excess of $500,000 50,000 or, in the case of indebtedness and/or liabilities individually less than $500,00050,000, in excess of $1,000,000 100,000 in the aggregate, ; (iii) made any loans or advances to any personPerson not in excess, individually or in the aggregate, of $100,000, other than ordinary reasonable advances for travel expenses, ; or (iv) sold, exchanged or otherwise disposed of any of its assets or rights, other than the sale of its inventory Inventory in the ordinary course of business.. Security and Purchase Agreement (diii) For the purposes of subsections (bi) and (cii) aboveof this Section 12(f), all indebtedness, liabilities, agreements agreements, understandings, instruments, contracts and contracts proposed transactions involving the same person Person (including Persons it or entity any of its applicable Subsidiaries has reason to believe are affiliated therewith or with any Subsidiary thereof) shall be aggregated for the purpose of meeting the individual minimum dollar amounts of such subsections. (eiv) Neither The Parent makes and keeps books, records, and accounts, that, in reasonable detail, accurately and fairly reflect the Company nor transactions and dispositions of its assets. It maintains internal control over financial reporting (“Financial Reporting Controls”) designed by, or under the Subsidiaries is supervision of, its principal executive and principal financial officers, and effected by its board of directors, management, and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in violation accordance with GAAP, including that: (1) transactions are executed in accordance with management’s general or default of any term specific authorization; (including without limitation any diligence obligation2) unauthorized acquisition, use, or of any provision of any disposition of the agreements set forth Parent’s assets that could have a material effect on the financial statements are prevented or timely detected; (3) transactions are recorded as necessary to permit preparation of financial statements in Schedule 2.13 accordance with GAAP, and that its receipts and expenditures are being made only in accordance with authorizations of the Disclosure Schedule Parent’s management and board of directors; (4) transactions are recorded as necessary to maintain accountability for assets; and (5) the “Material Agreements”). The execution, deliveryrecorded accountability for assets is compared with the existing assets at reasonable intervals, and performance of and compliance appropriate action is taken with this Agreement, and the Transaction Documents, and the issuance and sale of the Series D Preferred Stock pursuant hereto and of the Common Stock issuable upon conversion of the Series D Preferred Stock pursuant respect to the Restated Certificate, will not, with or without the passage of time or giving of notice, result in any such violation, or be in conflict with or constitute a default under any such term or provision, or result in the creation of any mortgage, pledge, lien, encumbrance or charge upon any of the properties or assets of the Company or the Subsidiaries or the suspension, revocation, impairment, forfeiture or nonrenewal of any Material Agreement, permit, license, authorization or approval applicable to the Company or the Subsidiaries, its business or operations or any of its assets or properties. The Company has avoided every condition, and has neither performed any act, the occurrence of which would result in the loss of any right granted to the Company or the Subsidiaries under any Material Agreement, nor failed to perform any act, the failure of which would result in the loss of any right granted to the Company or the Subsidiaries under any Material Agreementdifferences.

Agreements; Action. (a) Except for agreements explicitly contemplated hereby and by the other Transaction Documentshereby, there are no agreements, understandings or proposed transactions between the Company or the Subsidiaries and any of their its officers, directors, employees, affiliates or, to the Company’s knowledge, or any affiliate thereof. (b) There are no agreements, understandings, instruments, contracts, instrumentsproposed transactions, judgments, orders, writs or decrees to which the Company or the Subsidiaries is a party or to its knowledge by which the Company or the Subsidiaries it is bound that which may involve (i) obligations of (contingent or otherwise) of, or payments to to, the Company or the Subsidiaries, respectively, in excess of $500,00025,000 (other than obligations of, or payments to, the Company arising from purchase or sale agreements entered into in the ordinary course of business), or (ii) any the transfer or license of any Intellectual Property patent, copyright, trade secret or other proprietary right to or from the Company or the Subsidiaries (other than licenses arising from the license to purchase of "off the Company of standard, generally commercially available, “off-the-shelf” third-party " or other standard products), or (iii) indemnification by the Company or the Subsidiaries with respect to infringements of proprietary rights, or (iv) provisions restricting the development, manufacture or distribution of the Company's products or services of services, or (iv) indemnification by the Company with respect to infringements of proprietary rights (other than indemnification obligations arising from purchase, sale or license agreements entered into in the Subsidiariesordinary course of business). (c) The Company has not (i) accrued, declared or paid any dividends dividends, or authorized or made any distribution upon or with respect to any class or series of its capital stock, (ii) incurred any liabilities or guaranteed any indebtedness for money borrowed or any other liabilities (other than with respect to dividend obligations, distributions, indebtedness and other obligations incurred in the ordinary course of business or as disclosed in the Financial Statements) individually in excess of $500,000 25,000 or, in the case of indebtedness and/or liabilities individually less than $500,00025,000, in excess of $1,000,000 100,000 in the aggregate, (iii) made any loans or advances to any person, other than ordinary reasonable advances for travel expenses, or (iv) sold, exchanged or otherwise disposed of any of its assets or rights, other than the sale of its inventory in the ordinary course of business. (d) For the purposes of subsections (b) and (c) above, all indebtedness, liabilities, agreements agreements, understandings, instruments, contracts and contracts proposed transactions involving the same person or entity (including persons or entities the Company has reason to believe are affiliated therewith) shall be aggregated for the purpose of meeting the individual minimum dollar amounts of such subsections. (e) Neither the Company nor the Subsidiaries is in violation or default of any term (including without limitation any diligence obligation) or of any provision of any of the agreements set forth in Schedule 2.13 of the Disclosure Schedule (the “Material Agreements”). The execution, delivery, and performance of and compliance with this Agreement, and the Transaction Documents, and the issuance and sale of the Series D Preferred Stock pursuant hereto and of the Common Stock issuable upon conversion of the Series D Preferred Stock pursuant to the Restated Certificate, will not, with or without the passage of time or giving of notice, result in any such violation, or be in conflict with or constitute a default under any such term or provision, or result in the creation of any mortgage, pledge, lien, encumbrance or charge upon any of the properties or assets of the Company or the Subsidiaries or the suspension, revocation, impairment, forfeiture or nonrenewal of any Material Agreement, permit, license, authorization or approval applicable to the Company or the Subsidiaries, its business or operations or any of its assets or properties. The Company has avoided every condition, and has neither performed any act, the occurrence of which would result in the loss of any right granted to the Company or the Subsidiaries under any Material Agreement, nor failed to perform any act, the failure of which would result in the loss of any right granted to the Company or the Subsidiaries under any Material Agreement.

Agreements; Action. (aExcept as set forth on Schedule 12(f) Except for agreements explicitly contemplated hereby and by the other Transaction Documents, there are no agreements, or proposed transactions between the Company or the Subsidiaries and as disclosed in any of their officers, directors, employees, affiliates or, to the Company’s knowledge, any affiliate thereof.Exchange Act Filings: (bi) There are no agreements, understandings, instruments, contracts, instrumentsproposed transactions, judgments, orders, writs or decrees to which the Company it or the any of its Subsidiaries is a party or to its knowledge by which the Company or the Subsidiaries it is bound that which may involve involve: (i) obligations of (contingent or otherwise) of, or payments to the Company to, it or the Subsidiaries, respectively, any of its Subsidiaries in excess of $500,00050,000 (other than obligations of, or payments to, it or any of its Subsidiaries arising from (1) purchase or sale agreements entered into in the ordinary course of business consistent with past practice) and/or (2) agreements entered into in the ordinary course of business in connection with transportation, freight forwarding or other value added services purchased or provided by any Company or from or to others; or (ii) any the transfer or license of any Intellectual Property patent, copyright, trade secret or other proprietary right to or from the Company or the Subsidiaries it (other than licenses arising from the license to purchase of “off the Company of standard, generally commercially available, “off-the-shelf” third-party or other standard products), ; or (iii) indemnification by the Company or the Subsidiaries with respect to infringements of proprietary rights, or (iv) provisions restricting the development, manufacture or distribution of the its or any of its Subsidiaries’ products or services services; or (iv) indemnification by it or any of the Company or the Subsidiariesits Subsidiaries with respect to infringements of proprietary rights. (cii) The Company has not Since December 31, 2004 (the “Balance Sheet Date”) neither it nor any of its Subsidiaries has: (i) accrued, declared or paid any dividends dividends, or authorized or made any distribution upon or with respect to any class or series of its capital stock, ; (ii) except as set forth on Schedule 12(f)(ii)(a) and indebtedness and liabilities between and among any Company, incurred any liabilities or guaranteed any indebtedness for money borrowed or any other liabilities (other than ordinary course obligations) individually in excess of $500,000 50,000 or, in the case of such indebtedness and/or liabilities individually less than $500,00050,000, in excess of $1,000,000 100,000 in the aggregate, ; (iii) made any loans or advances to any personPerson not in excess, individually or in the aggregate, of $100,000, other than ordinary reasonable advances for travel expenses, and other than as set forth on Schedule 12(f)(ii)(b) or (iv) sold, exchanged or otherwise disposed of any of its assets or rights, other than the sale of its inventory Inventory in the ordinary course of business. (diii) For the purposes of subsections (bi) and (cii) aboveof this Section 12(f), all indebtedness, liabilities, agreements agreements, understandings, instruments, contracts and contracts proposed transactions involving the same person Person (including Persons it or entity any of its applicable Subsidiaries has reason to believe are affiliated therewith or with any Subsidiary thereof) shall be aggregated for the purpose of meeting the individual minimum dollar amounts of such subsections. (eiv) Neither The Parent maintains disclosure controls and procedures (“Disclosure Controls”) designed to ensure that information required to be disclosed by the Company nor Parent in the Subsidiaries reports that it files or submits under the Exchange Act is recorded, processed, summarized, and reported, within the time periods specified in violation the rules and forms of the SEC. (v) The Parent makes and keeps books, records, and accounts, that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of its assets. It maintains internal control over financial reporting (“Financial Reporting Controls”) designed by, or default under the supervision of, its principal executive and principal financial officers, and effected by its board of directors, management, and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP, including that: (1) transactions are executed in accordance with management’s general or specific authorization; (2) unauthorized acquisition, use, or disposition of the Parent’s assets that could have a material effect on the financial statements are prevented or timely detected; (3) transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that its receipts and expenditures are being made only in accordance with authorizations of the Parent’s management and board of directors; (4) transactions are recorded as necessary to maintain accountability for assets; and (5) the recorded accountability for assets is compared with the existing assets at reasonable intervals, and appropriate action is taken with respect to any term differences. (including without limitation vi) There is no weakness in any diligence obligation) of its Disclosure Controls or of any provision of Financial Reporting Controls that is required to be disclosed in any of the agreements set forth in Schedule 2.13 of the Disclosure Schedule (the “Material Agreements”). The executionExchange Act Filings, delivery, and performance of and compliance with this Agreement, and the Transaction Documents, and the issuance and sale of the Series D Preferred Stock pursuant hereto and of the Common Stock issuable upon conversion of the Series D Preferred Stock pursuant to the Restated Certificate, will not, with or without the passage of time or giving of notice, result in any such violation, or be in conflict with or constitute a default under any such term or provision, or result in the creation of any mortgage, pledge, lien, encumbrance or charge upon any of the properties or assets of the Company or the Subsidiaries or the suspension, revocation, impairment, forfeiture or nonrenewal of any Material Agreement, permit, license, authorization or approval applicable to the Company or the Subsidiaries, its business or operations or any of its assets or properties. The Company has avoided every condition, and has neither performed any act, the occurrence of which would result in the loss of any right granted to the Company or the Subsidiaries under any Material Agreement, nor failed to perform any act, the failure of which would result in the loss of any right granted to the Company or the Subsidiaries under any Material Agreementexcept as so disclosed.

Agreements; Action. Except as set forth on Schedule 12.6 or as disclosed in any Exchange Act Filings: (a) Except for agreements explicitly contemplated hereby and by the other Transaction Documents, there are no agreements, or proposed transactions between the Company or the Subsidiaries and any of their officers, directors, employees, affiliates or, to the Company’s knowledge, any affiliate thereof. (b) There are no agreements, understandings, instruments, contracts, instrumentsproposed transactions, judgments, orders, writs or decrees to which the Company or the any of its Subsidiaries is a party or to its knowledge by which the Company or the Subsidiaries it is bound that which may involve involve: (i) obligations of (contingent or otherwise) of, or payments to to, the Company or the Subsidiaries, respectively, any of its Subsidiaries in excess of $500,000US$50,000 (other than obligations of, or payments to, the Company or any of its Subsidiaries arising from purchase or sale agreements entered into in the ordinary course of business); or (ii) any the transfer or license of any Intellectual Property patent, copyright, trade secret or other proprietary right to or from the Company or the Subsidiaries it (other than licenses arising from the license to purchase of "off the Company of standard, generally commercially available, “off-the-shelf” third-party " or other standard products), ; or (iii) indemnification by the Company or the Subsidiaries with respect to infringements of proprietary rights, or (iv) provisions restricting the development, manufacture or distribution of the Company's or any of its Subsidiaries' products or services of services; or (iv) indemnification by the Company or the Subsidiariesany of its Subsidiaries with respect to infringements of proprietary rights. (cb) The Since July 31, 2004 (the "Balance Sheet Date") neither the Company has not nor any of its Subsidiaries has: (i) accrued, declared or paid any dividends dividends, or authorized or made any distribution upon or with respect to any class or series of its capital stock, ; (ii) incurred any liabilities or guaranteed any indebtedness for money borrowed or any other liabilities (other than ordinary course obligations) individually in excess of $500,000 US$50,000 or, in the case of indebtedness and/or liabilities individually less than $500,000US$50,000, in excess of $1,000,000 US$100,000 in the aggregate, ; (iii) made any loans or advances to any personPerson not in excess, individually or in the aggregate, of US$100,000, other than ordinary reasonable advances for travel expenses, ; or (iv) sold, exchanged or otherwise disposed of any of its assets or rights, other than the sale of its inventory Inventory in the ordinary course of business. (dc) For the purposes of subsections (ba) and (cb) aboveof this Section 12.6, all indebtedness, liabilities, agreements agreements, understandings, instruments, contracts and contracts proposed transactions involving the same person Person (including Persons it or entity any of its applicable Subsidiaries has reason to believe are affiliated therewith or with any Subsidiary thereof) shall be aggregated for the purpose of meeting the individual minimum dollar amounts of such subsections. (d) the Company maintains disclosure controls and procedures ("Disclosure Controls") designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized, and reported, within the time periods specified in the rules and forms of the SEC. (e) Neither the Company nor makes and keeps books, records, and accounts, that, in reasonable detail, accurately and fairly reflect the Subsidiaries transactions and dispositions of its assets. It maintains internal control over financial reporting ("Financial Reporting Controls") designed by, or under the supervision of, its principal executive and principal financial officers, and effected by its board of directors, management, and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP, including that: (i) transactions are executed in accordance with management's general or specific authorization; (ii) unauthorized acquisition, use, or disposition of the Company's assets that could have a material effect on the financial statements are prevented or timely detected; (iii) transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that its receipts and expenditures are being made only in accordance with authorizations of the Company's management and board of directors; (iv) transactions are recorded as necessary to maintain accountability for assets; and (v) the recorded accountability for assets is compared with the existing assets at reasonable intervals, and appropriate action is taken with respect to any differences. (f) To the Company's knowledge, there is no material weakness in violation or default of any term (including without limitation any diligence obligation) or of any provision of any of the agreements set forth Company's Disclosure Controls or Financial Reporting Controls that is required to be disclosed in Schedule 2.13 of the Disclosure Schedule (the “Material Agreements”). The execution, delivery, and performance of and compliance with this Agreement, and the Transaction Documents, and the issuance and sale of the Series D Preferred Stock pursuant hereto and of the Common Stock issuable upon conversion of the Series D Preferred Stock pursuant to the Restated Certificate, will not, with or without the passage of time or giving of notice, result in any such violation, or be in conflict with or constitute a default under any such term or provision, or result in the creation of any mortgage, pledge, lien, encumbrance or charge upon any of the properties or assets of the Company or the Subsidiaries or the suspensionExchange Act Filings, revocation, impairment, forfeiture or nonrenewal of any Material Agreement, permit, license, authorization or approval applicable to the Company or the Subsidiaries, its business or operations or any of its assets or properties. The Company has avoided every condition, and has neither performed any act, the occurrence of which would result in the loss of any right granted to the Company or the Subsidiaries under any Material Agreement, nor failed to perform any act, the failure of which would result in the loss of any right granted to the Company or the Subsidiaries under any Material Agreementexcept as so disclosed.

Agreements; Action. (aExcept as set forth on Schedule 12(f) Except for agreements explicitly contemplated hereby and by the other Transaction Documents, there are no agreements, or proposed transactions between the Company or the Subsidiaries and as disclosed in any of their officers, directors, employees, affiliates or, to the Company’s knowledge, any affiliate thereof.Exchange Act Filings: (bi) There are no agreements, understandings, instruments, contracts, instrumentsproposed transactions, judgments, orders, writs or decrees to which the Company it or the any of its Subsidiaries is a party or to its knowledge by which the Company or the Subsidiaries it is bound that which may involve involve: (i) obligations of (contingent or otherwise) of, or payments to the Company to, it or the Subsidiaries, respectively, any of its Subsidiaries in excess of $500,00050,000 (other than obligations of, or payments to, it or any of its Subsidiaries arising from purchase or sale agreements entered into in the ordinary course of business); or (ii) any the transfer or license of any Intellectual Property patent, copyright, trade secret or other proprietary right to or from the Company or the Subsidiaries it (other than licenses arising from the license to purchase of “off the Company of standard, generally commercially available, “off-the-shelf” third-party or other standard products), ; or (iii) indemnification by the Company or the Subsidiaries with respect to infringements of proprietary rights, or (iv) provisions restricting the development, manufacture or distribution of the its or any of its Subsidiaries’ products or services services; or (iv) indemnification by it or any of the Company or the Subsidiariesits Subsidiaries with respect to infringements of proprietary rights. (cii) The Company has not Since June 30, 2005 (the “Balance Sheet Date”) neither it nor any of its Subsidiaries has: (i) accrued, declared or paid any dividends dividends, or authorized or made any distribution upon or with respect to any class or series of its capital stock, ; (ii) incurred any liabilities or guaranteed any indebtedness for money borrowed or any other liabilities (other than ordinary course obligations) individually in excess of $500,000 50,000 or, in the case of indebtedness and/or liabilities individually less than $500,00050,000, in excess of $1,000,000 100,000 in the aggregate, ; (iii) made any loans or advances to any personPerson not in excess, individually or in the aggregate, of $100,000, other than ordinary reasonable advances for travel expenses, ; or (iv) sold, exchanged or otherwise disposed of any of its assets or rights, other than the sale of its inventory Inventory in the ordinary course of business. (diii) For the purposes of subsections (bi) and (cii) aboveof this Section 12(f), all indebtedness, liabilities, agreements agreements, understandings, instruments, contracts and contracts proposed transactions involving the same person Person (including Persons it or entity any of its applicable Subsidiaries has reason to believe are affiliated therewith or with any Subsidiary thereof) shall be aggregated for the purpose of meeting the individual minimum dollar amounts of such subsections. (eiv) Neither the Company nor Parent maintains disclosure controls and procedures (“Disclosure Controls”) designed to ensure that information required to be disclosed by the Subsidiaries Parent in the reports that it files or submits under the Exchange Act is recorded, processed, summarized, and reported, within the time periods specified in violation the rules and forms of the SEC. (v) The Parent makes and keeps books, records, and accounts, that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of its assets. It maintains internal control over financial reporting (“Financial Reporting Controls”) designed by, or default under the supervision of, its principal executive and principal financial officers, and effected by its management, and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP, including that: (1) transactions are executed in accordance with management’s general or specific authorization; (2) unauthorized acquisition, use, or disposition of the Parent’s assets that could have a material effect on the financial statements are prevented or timely detected; (3) transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that its receipts and expenditures are being made only in accordance with authorizations of the Parent’s management and board of directors; (4) transactions are recorded as necessary to maintain accountability for assets; and (5) the recorded accountability for assets is compared with the existing assets at reasonable intervals, and appropriate action is taken with respect to any term differences. (including without limitation vi) There is no weakness in any diligence obligation) of its Disclosure Controls or of any provision of Financial Reporting Controls that is required to be disclosed in any of the agreements set forth in Schedule 2.13 of the Disclosure Schedule (the “Material Agreements”). The executionExchange Act Filings, delivery, and performance of and compliance with this Agreement, and the Transaction Documents, and the issuance and sale of the Series D Preferred Stock pursuant hereto and of the Common Stock issuable upon conversion of the Series D Preferred Stock pursuant to the Restated Certificate, will not, with or without the passage of time or giving of notice, result in any such violation, or be in conflict with or constitute a default under any such term or provision, or result in the creation of any mortgage, pledge, lien, encumbrance or charge upon any of the properties or assets of the Company or the Subsidiaries or the suspension, revocation, impairment, forfeiture or nonrenewal of any Material Agreement, permit, license, authorization or approval applicable to the Company or the Subsidiaries, its business or operations or any of its assets or properties. The Company has avoided every condition, and has neither performed any act, the occurrence of which would result in the loss of any right granted to the Company or the Subsidiaries under any Material Agreement, nor failed to perform any act, the failure of which would result in the loss of any right granted to the Company or the Subsidiaries under any Material Agreementexcept as so disclosed.

Agreements; Action. Except as set forth on Schedule 4.6 or as disclosed in any Exchange Act Filing: (a) Except for agreements explicitly contemplated hereby and by the other Transaction Documents, there are no agreements, or proposed transactions between the Company or the Subsidiaries and any of their officers, directors, employees, affiliates or, to the Company’s knowledge, any affiliate thereof. (b) There are no agreements, contractsunderstandings, instruments, contracts, judgments, orders, writs or decrees to which the either Company or the any of its Subsidiaries is a party or by which the Company or the Subsidiaries it is bound that which may involve involve: (i) obligations of (contingent or otherwise) of, or payments to the to, either Company or the Subsidiaries, respectively, any of its Subsidiaries in excess of $500,000250,000 (other than obligations of, or payments to, either Company or any of its Subsidiaries arising from purchase or sale agreements, contracts for services, marketing and advertising related agreements, etc. entered into in the ordinary course of business); or (ii) any the transfer or license of any Intellectual Property patent, copyright, trade secret or other proprietary right to or from the either Company or the any of its Subsidiaries (other than licenses arising from the license to purchase of “off the Company of standard, generally commercially available, “off-the-shelf” third-party or other standard products), ; or (iii) indemnification by the Company or the Subsidiaries with respect to infringements of proprietary rights, or (iv) provisions restricting the development, manufacture or distribution of the either Company’s or any of its Subsidiaries’ material products or services of the services; or (iv) indemnification by either Company or the Subsidiariesany of its Subsidiaries with respect to infringements of material proprietary rights. (cb) The Since September 30, 2007 (the “Balance Sheet Date”) to the date hereof, other than repayments of indebtedness by M▇▇▇ to CHIP, dividends or distributions by M▇▇▇ to CHIP and/or the repayment of indebtedness by M▇▇▇ to CHIP, neither Company has not nor any of their Subsidiaries has: (i) accrued, declared or paid any dividends dividends, or authorized or made any distribution upon or with respect to any class or series of its capital stock, ; (ii) incurred any liabilities or guaranteed any indebtedness for money borrowed or any other liabilities (other than ordinary course obligations) individually in excess of $500,000 150,000 or, in the case of indebtedness and/or liabilities individually less than $500,000150,000, in excess of $1,000,000 250,000 in the aggregate, ; (iii) made any loans or advances to any personin excess of $150,000, individually or $250,000 in the aggregate of all such loans and advances, other than ordinary reasonable course advances for travel expenses, ; or (iv) sold, exchanged or otherwise disposed of any of its assets or rights, other than the sale of its inventory in the ordinary course of business. (dc) For the purposes of subsections (ba) and (cb) above, all indebtedness, liabilities, agreements agreements, understandings, instruments, contracts and contracts proposed transactions involving the same person or entity (including persons or entities either Company or any Subsidiary of either Company has reason to believe are affiliated therewith) shall be aggregated for the purpose of meeting the individual minimum dollar amounts of such subsections. (d) CHIP maintains disclosure controls and procedures (“Disclosure Controls”) designed to ensure that information required to be disclosed by CHIP in its Exchange Act Filings is recorded, processed, summarized, and reported, within the time periods specified in the Exchange Act and the applicable rules and forms promulgated by the Securities and Exchange Commission (“SEC”). (e) Neither Each Company makes and keeps books, records, and accounts, that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of such Company’s assets. Each Company nor maintains internal control over financial reporting (“Financial Reporting Controls”) designed by, or under the Subsidiaries supervision of, such Company’s principal executive and principal financial officers, and effected by such Company’s board of directors, management, and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles in the United States of America (“GAAP”), including that: (i) transactions are executed in accordance with management’s general or specific authorization; (ii) unauthorized acquisition, use, or disposition of such Company’s assets that could have a material effect on the financial statements are prevented or timely detected; (iii) transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that such Company’s receipts and expenditures are being made only in accordance with authorizations of such Company’s management and board of directors; (iv) transactions are recorded as necessary to maintain accountability for assets; and (v) the recorded accountability for assets is compared with the existing assets at reasonable intervals, and appropriate action is taken with respect to any differences. (f) There is no weakness in violation any of CHIP’s Disclosure Controls or default of any term (including without limitation any diligence obligation) or of any provision of Financial Reporting Controls that is required to be disclosed in any of the agreements set forth in Schedule 2.13 of the Disclosure Schedule (the “Material Agreements”). The executionExchange Act Filings, delivery, and performance of and compliance with this Agreement, and the Transaction Documents, and the issuance and sale of the Series D Preferred Stock pursuant hereto and of the Common Stock issuable upon conversion of the Series D Preferred Stock pursuant to the Restated Certificate, will not, with or without the passage of time or giving of notice, result in any such violation, or be in conflict with or constitute a default under any such term or provision, or result in the creation of any mortgage, pledge, lien, encumbrance or charge upon any of the properties or assets of the Company or the Subsidiaries or the suspension, revocation, impairment, forfeiture or nonrenewal of any Material Agreement, permit, license, authorization or approval applicable to the Company or the Subsidiaries, its business or operations or any of its assets or properties. The Company has avoided every condition, and has neither performed any act, the occurrence of which would result in the loss of any right granted to the Company or the Subsidiaries under any Material Agreement, nor failed to perform any act, the failure of which would result in the loss of any right granted to the Company or the Subsidiaries under any Material Agreementexcept as so disclosed.

Agreements; Action. Except as set forth on Schedule 6.6: (a) Except for agreements explicitly contemplated hereby and by the other Transaction Documents, there are no agreements, or proposed transactions between the Company or the Subsidiaries and any of their officers, directors, employees, affiliates or, to the Company’s knowledge, any affiliate thereof. (b) There are no agreements, contractsunderstandings, instruments, contracts, judgments, orders, writs or decrees to which the any Company or the any of its Subsidiaries is a party or by which the Company or the Subsidiaries it is bound that which may involve involve: (i) obligations of (contingent or otherwise) of, or payments to the to, any Company or the Subsidiaries, respectively, any of its Subsidiaries in excess of $500,00050,000 (other than obligations of, or payments to, any Company or any of its Subsidiaries arising from purchase or sale agreements, contracts for services, marketing and advertising related agreements, etc. entered into in the ordinary course of business); or (ii) any the transfer or license of any Intellectual Property patent, copyright, trade secret or other proprietary right to or from the any Company or the any of its Subsidiaries (other than licenses arising from the license to purchase of “off the Company of standard, generally commercially available, “off-the-shelf” third-party or other standard products), ; or (iii) indemnification by the Company or the Subsidiaries with respect to infringements of proprietary rights, or (iv) provisions restricting the development, manufacture or distribution of the any Company’s or any of its Subsidiaries’ products or services of the services; or (iv) indemnification by any Company or the Subsidiariesany of its Subsidiaries with respect to infringements of proprietary rights. (cb) The Since September 30, 2016 (the “Measurement Date”), no Company has not nor any of its Subsidiaries has: (i) accrued, declared or paid any dividends dividends, or authorized or made any distribution upon or with respect to any class or series of its capital stock, stock or equity; (ii) incurred any liabilities or guaranteed any indebtedness for money borrowed Indebtedness individually in excess of $500,000 50,000 or, in the case of indebtedness and/or liabilities Indebtedness individually less than $500,00050,000, in excess of $1,000,000 100,000 in the aggregate, ; (iii) made any loans or advances to any personPerson not in excess, individually or in the aggregate, of $100,000, other than ordinary reasonable course advances for travel expenses, ; or (iv) sold, exchanged or otherwise disposed of any of its assets or rights, other than the sale of its inventory in the ordinary course of business. ; and as of the date of this Agreement, no Company nor any of its Subsidiaries has any outstanding Indebtedness other than Indebtedness for borrowed money owing by Companies under the BAM Facility (as hereafter defined) which shall be paid in full on the Closing Date. For purposes of this Agreement, “Indebtedness” of any Person means, without duplication: (a) all indebtedness for borrowed money; (b) all obligations issued, undertaken or assumed as the deferred purchase price of property or services, including earn-outs; (c) the face amount of all letters of credit issued for the account of such Person and without duplication, all drafts drawn thereunder and all reimbursement or payment obligations with respect to letters of credit, surety bonds and other similar instruments issued by such Person; (d) For all obligations evidenced by notes, bonds, debentures or similar instruments, including obligations so evidenced incurred in connection with the purposes acquisition of subsections (b) and (c) aboveproperty, all indebtedness, liabilities, agreements and contracts involving the same person assets or entity shall be aggregated for the purpose of meeting the individual minimum dollar amounts of such subsections. businesses; (e) Neither all indebtedness created or arising under any conditional sale or other title retention agreement, or incurred as financing, in either case with respect to property acquired by the Company nor Person (even though the Subsidiaries rights and remedies of the seller or bank under such agreement in the event of default are limited to repossession or sale of such property); (f) all Capital Lease Obligations; (g) the principal balance outstanding under any synthetic lease, off-balance sheet loan or similar off balance sheet financing product; (h) all obligations, whether or not contingent, to purchase, redeem, retire, defease or otherwise acquire for value any of its own stock or stock equivalents (or any stock or stock equivalent of a direct or indirect parent entity thereof) prior to the date that is 180 days after the Maturity Date, valued at, in violation the case of redeemable preferred stock, the greater of the voluntary liquidation preference and the involuntary liquidation preference of such stock plus accrued and unpaid dividends; (i) all indebtedness referred to in clauses (a) through (h) above secured by (or default for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any term Lien upon or in property (including without limitation any diligence obligationaccounts and contracts rights) owned by such Person, even though such Person has not assumed or become liable for the payment of any provision such Indebtedness (and for purposes of any this Agreement, if such Person is not liable for the payment of such Indebtedness, the amount of Indebtedness of such Person shall be deemed to be the fair market value of such property); and (j) all Contingent Obligations in respect of indebtedness or obligations of others of the agreements set forth kinds referred to in Schedule 2.13 clauses (a) through (i) above. As used in this Agreement, “Capital Lease Obligation” means, as to any Person, any obligation that is required to be classified and accounted for as a capital lease on a balance sheet of such Person prepared in accordance with GAAP (as defined below), and the amount of such obligation shall be the capitalized amount thereof, determined in accordance with GAAP; and “Contingent Obligation” means, as to any Person, any direct or indirect liability, contingent or otherwise, of that Person with respect to any indebtedness, lease, dividend or other obligation of another Person if the primary purpose or intent of the Disclosure Schedule Person incurring such liability, or the primary effect thereof, is to provide assurance to the obligee of such liability that such liability will be paid or discharged, or that any agreements relating thereto will be complied with, or that the holders of such liability will be protected (in whole or in part) against loss with respect thereto. As used in this Agreement, “BAM Facility” means the note purchase facility provided to Companies under the Note Purchase Agreement dated as of October 23, 2015 by and among Senior Health Insurance Company of Pennsylvania, BRE WNIC 2013 LTC Primary (collectively, the “BAM Purchasers”), BAM Administrative Services LLC, as agent for the BAM Purchasers (the “Material AgreementsBAM Agent”). The execution) and Companies, deliveryas amended, modified and performance of and compliance with this Agreement, and the Transaction Documents, and the issuance and sale of the Series D Preferred Stock pursuant hereto and of the Common Stock issuable upon conversion of the Series D Preferred Stock pursuant supplemented from time to the Restated Certificate, will not, with or without the passage of time or giving of notice, result in any such violation, or be in conflict with or constitute a default under any such term or provision, or result in the creation of any mortgage, pledge, lien, encumbrance or charge upon any of the properties or assets of the Company or the Subsidiaries or the suspension, revocation, impairment, forfeiture or nonrenewal of any Material Agreement, permit, license, authorization or approval applicable to the Company or the Subsidiaries, its business or operations or any of its assets or properties. The Company has avoided every condition, and has neither performed any act, the occurrence of which would result in the loss of any right granted to the Company or the Subsidiaries under any Material Agreement, nor failed to perform any act, the failure of which would result in the loss of any right granted to the Company or the Subsidiaries under any Material Agreementtime.

Agreements; Action. Except as set forth on the Supplemental SCHEDULE or as disclosed in any Exchange Act Filings: (a) Except for agreements explicitly contemplated hereby and by the other Transaction Documents, there are no agreements, or proposed transactions between the Company or the Subsidiaries and any of their officersunderstandings, directors, employees, affiliates or, to the Company’s knowledge, any affiliate thereof. (b) There are no agreementsinstruments, contracts, instrumentsproposed transactions, judgments, orders, writs or decrees to which the Company or the any of its Subsidiaries is a party or by which the Company or the Subsidiaries it is bound that which may involve involve: (i) obligations of (contingent or otherwise) of, or payments to to, the Company or the Subsidiaries, respectively, any of its Subsidiaries in excess of $500,00050,000 (other than obligations of, or payments to, the Company or any of its Subsidiaries arising from purchase or sale agreements entered into in the ordinary course of business); or (ii) any the transfer or license of any Intellectual Property patent, copyright, trade secret or other proprietary right to or from the Company or the any of its Subsidiaries (other than licenses arising from the license to purchase of "off the Company of standard, generally commercially available, “off-the-shelf” third-party " or other standard products), ; or (iii) indemnification by the Company or the Subsidiaries with respect to infringements of proprietary rights, or (iv) provisions restricting the development, manufacture or distribution of the Company's or any of its Subsidiaries products or services of services; or (iv) indemnification by the Company or the Subsidiariesany of its Subsidiaries with respect to infringements of proprietary rights. (cb) The Since March 31, 2007 and except as may be set forth in the Exchange Act Filings or the Supplemental Schedule (the "BALANCE SHEET DATE"), neither the Company has not nor any of its Subsidiaries has: (i) accrued, declared or paid any dividends dividends, or authorized or made any distribution upon or with respect to any class or series of its capital stock, ; (ii) incurred any liabilities or guaranteed any indebtedness for money borrowed or any other liabilities (other than ordinary course obligations) individually in excess of $500,000 50,000 or, in the case of indebtedness and/or liabilities individually less than $500,00050,000, in excess of $1,000,000 100,000 in the aggregate, ; (iii) made any loans or advances to any personperson or entity not in excess, individually or in the aggregate, of $100,000, other than ordinary reasonable course advances for travel expenses, ; or (iv) sold, exchanged or otherwise disposed of any of its assets or rights, other than the sale of its inventory in the ordinary course of business. (dc) For the purposes of subsections (ba) and (cb) above, all indebtedness, liabilities, agreements agreements, understandings, instruments, contracts and contracts proposed transactions involving the same person or entity (including persons or entities the Company or any Subsidiary of the Company has reason to believe are affiliated therewith) shall be aggregated for the purpose of meeting the individual minimum dollar amounts of such subsections. (d) The Company maintains disclosure controls and procedures ("DISCLOSURE Controls") designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized, and reported, within the time periods specified in the rules and forms of the SEC. (e) Neither The Company makes and keep books, records, and accounts, that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the Company's assets. The Company nor maintains internal control over financial reporting ("FINANCIAL REPORTING CONTROLS") designed by, or under the Subsidiaries supervision of, the Company's principal executive and principal financial officers, and effected by the Company's board of directors, management, and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles ("GAAP"), including that: (i) transactions are executed in accordance with management's general or specific authorization; (ii) unauthorized acquisition, use, or disposition of the Company's assets that could have a material effect on the financial statements are prevented or timely detected; (iii) transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that the Company's receipts and expenditures are being made only in accordance with authorizations of the Company's management and board of directors; (iv) transactions are recorded as necessary to maintain accountability for assets; and (v) the recorded accountability for assets is compared with the existing assets at reasonable intervals, and appropriate action is taken with respect to any differences. (f) There is no weakness in violation or default of any term (including without limitation any diligence obligation) or of any provision of any of the agreements set forth Company's Disclosure Controls or Financial Reporting Controls that is required to be disclosed in Schedule 2.13 of the Disclosure Schedule (the “Material Agreements”). The execution, delivery, and performance of and compliance with this Agreement, and the Transaction Documents, and the issuance and sale of the Series D Preferred Stock pursuant hereto and of the Common Stock issuable upon conversion of the Series D Preferred Stock pursuant to the Restated Certificate, will not, with or without the passage of time or giving of notice, result in any such violation, or be in conflict with or constitute a default under any such term or provision, or result in the creation of any mortgage, pledge, lien, encumbrance or charge upon any of the properties or assets of the Company or the Subsidiaries or the suspensionExchange Act Filings, revocation, impairment, forfeiture or nonrenewal of any Material Agreement, permit, license, authorization or approval applicable to the Company or the Subsidiaries, its business or operations or any of its assets or properties. The Company has avoided every condition, and has neither performed any act, the occurrence of which would result in the loss of any right granted to the Company or the Subsidiaries under any Material Agreement, nor failed to perform any act, the failure of which would result in the loss of any right granted to the Company or the Subsidiaries under any Material Agreementexcept as so disclosed.

Agreements; Action. (ai) Except for agreements explicitly contemplated hereby and by the other Transaction Documentshereby, there are no agreements, understandings or proposed transactions between the Company or the Subsidiaries and any of their its officers, directors, employees, affiliates or, to the Company’s knowledge, or any affiliate thereof. (bii) There are no agreements, understandings, instruments, contracts, instrumentsproposed transactions, judgments, orders, writs or decrees to which the Company or the Subsidiaries is a party or to its knowledge by which the Company or the Subsidiaries it is bound that which may involve (i) obligations of (contingent or otherwise) of, or payments to the to, Company or the Subsidiaries, respectively, Group in excess of Twenty-Five Thousand Dollars ($500,00025,000) (other than obligations of, or payments to, Company Group arising from purchase or sale agreements entered into in the ordinary course of business), or (ii) any the license of any Intellectual Property patent, copyright, trade secret or other proprietary right to or from the Company or the Subsidiaries Group (other than licenses arising from the license to purchase of "off the Company of standard, generally commercially available, “off-the-shelf” third-party " or other standard products), or (iii) indemnification by the Company or the Subsidiaries Group with respect to infringements of proprietary rights, rights (other than indemnification obligations arising from purchase or (iv) provisions restricting sale agreements entered into in the development, manufacture or distribution ordinary course of the products or services of the Company or the Subsidiariesbusiness). (ciii) The Company Group has not (i) accrued, declared or paid any dividends or authorized or made any distribution upon or with respect to any class or series of its capital stock, (iiA) incurred any Indebtedness or any other liabilities or guaranteed any indebtedness for money borrowed (other than trade obligations incurred in the ordinary course of business) individually in excess of Twenty-Five Thousand Dollars ($500,000 25,000) or, in the case of indebtedness Indebtedness and/or liabilities individually less than Twenty-Five Thousand Dollars ($500,00025,000), in excess of Fifty Thousand Dollars ($1,000,000 50,000) in the aggregate, (iiiB) made any loans or advances to any personPerson, other than ordinary reasonable advances for travel expenses, or (ivC) sold, exchanged or otherwise disposed of any of its assets or rights, other than the sale of its inventory in the ordinary course of business. (div) For the purposes of subsections (bii) and (ciii) above, all indebtednessIndebtedness, liabilities, agreements agreements, understandings, instruments, contracts and contracts proposed transactions involving the same person or entity Person (including Persons Company has reason to believe are Affiliates of Company) shall be aggregated for the purpose of meeting the individual minimum dollar amounts of such subsections. (e) Neither the Company nor the Subsidiaries is in violation or default of any term (including without limitation any diligence obligation) or of any provision of any of the agreements set forth in Schedule 2.13 of the Disclosure Schedule (the “Material Agreements”). The execution, delivery, and performance of and compliance with this Agreement, and the Transaction Documents, and the issuance and sale of the Series D Preferred Stock pursuant hereto and of the Common Stock issuable upon conversion of the Series D Preferred Stock pursuant to the Restated Certificate, will not, with or without the passage of time or giving of notice, result in any such violation, or be in conflict with or constitute a default under any such term or provision, or result in the creation of any mortgage, pledge, lien, encumbrance or charge upon any of the properties or assets of the Company or the Subsidiaries or the suspension, revocation, impairment, forfeiture or nonrenewal of any Material Agreement, permit, license, authorization or approval applicable to the Company or the Subsidiaries, its business or operations or any of its assets or properties. The Company has avoided every condition, and has neither performed any act, the occurrence of which would result in the loss of any right granted to the Company or the Subsidiaries under any Material Agreement, nor failed to perform any act, the failure of which would result in the loss of any right granted to the Company or the Subsidiaries under any Material Agreement.

Agreements; Action. Except as set forth on SCHEDULE 4.6 or as disclosed in any Exchange Act Filings: (a) Except for agreements explicitly contemplated hereby and by the other Transaction DocumentsDebtors or where the existence of any of the following could not be reasonably expect to have a Material Adverse Effect, there are no agreements, or proposed transactions between the Company or the Subsidiaries and any of their officersunderstandings, directors, employees, affiliates or, to the Company’s knowledge, any affiliate thereof. (b) There are no agreementsinstruments, contracts, instrumentsproposed transactions, judgments, orders, writs or decrees to which the Company or the Subsidiaries any Guarantor is a party or to its knowledge by which the Company it or the Subsidiaries any Guarantor is bound that which may involve (i) obligations of (contingent or otherwise) of, or payments to to, the Company or the Subsidiaries, respectively, and/or any Guarantor in excess of $500,00050,000 in the aggregate for the Company and the Guarantors (other than obligations of, or payments to, the Company and/or any Guarantor arising from purchase or sale agreements entered into in the ordinary course of business), or (ii) any the transfer or license of any Intellectual Property patent, copyright, trade secret or other proprietary right to or from the Company or the Subsidiaries any Guarantor (other than licenses arising from the license to purchase of "off the Company of standard, generally commercially available, “off-the-shelf” third-party " or other standard products), or (iii) indemnification by the Company or the Subsidiaries with respect to infringements of proprietary rights, or (iv) provisions restricting the development, manufacture or distribution of the Company's or any Guarantor's products or services of services, or (iv) indemnification by the Company or the Subsidiariesany Guarantor's with respect to infringements of proprietary rights. (cb) The Since December 31, 2003, the Company has not (i) accrued, declared or paid any dividends dividends, or authorized or made any distribution upon or with respect to any class or series of its capital stock, (ii) incurred any liabilities or guaranteed any indebtedness for money borrowed or any other liabilities (other than ordinary course obligations) individually in excess of $500,000 100,000 or, in the case of indebtedness and/or liabilities individually less than $500,000100,000, in excess of $1,000,000 250,000 in the aggregate, (iii) made any loans or advances to any personperson not in excess, individually or in the aggregate, of $50,000, other than ordinary reasonable advances for travel expenses, or (iv) sold, exchanged or otherwise disposed of any of its assets or rights, other than the sale of its inventory in the ordinary course of business. (dc) For the purposes of subsections (ba) and (cb) above, all indebtedness, liabilities, agreements agreements, understandings, instruments, contracts and contracts proposed transactions involving the same person or entity (including persons or entities the Company has reason to believe are affiliated therewith) shall be aggregated for the purpose of meeting the individual minimum dollar amounts of such subsections. (e) Neither the Company nor the Subsidiaries is in violation or default of any term (including without limitation any diligence obligation) or of any provision of any of the agreements set forth in Schedule 2.13 of the Disclosure Schedule (the “Material Agreements”). The execution, delivery, and performance of and compliance with this Agreement, and the Transaction Documents, and the issuance and sale of the Series D Preferred Stock pursuant hereto and of the Common Stock issuable upon conversion of the Series D Preferred Stock pursuant to the Restated Certificate, will not, with or without the passage of time or giving of notice, result in any such violation, or be in conflict with or constitute a default under any such term or provision, or result in the creation of any mortgage, pledge, lien, encumbrance or charge upon any of the properties or assets of the Company or the Subsidiaries or the suspension, revocation, impairment, forfeiture or nonrenewal of any Material Agreement, permit, license, authorization or approval applicable to the Company or the Subsidiaries, its business or operations or any of its assets or properties. The Company has avoided every condition, and has neither performed any act, the occurrence of which would result in the loss of any right granted to the Company or the Subsidiaries under any Material Agreement, nor failed to perform any act, the failure of which would result in the loss of any right granted to the Company or the Subsidiaries under any Material Agreement.

Agreements; Action. (a) Except for (i) those agreements described on Schedule 2.8 attached hereto and (ii) agreements explicitly contemplated hereby and by the other Transaction Documentsthis Agreement, there are no agreements, or proposed transactions between the Company or the Subsidiaries and any of their officersunderstandings, directors, employees, affiliates or, to the Company’s knowledge, any affiliate thereof. (b) There are no agreementsinstruments, contracts, instruments, judgments, orders, writs writs, decrees or decrees proposed transactions to which the Company or the Subsidiaries Acquiror is a party or by which the Company or the Subsidiaries it is bound that may involve involve: (ix) obligations of (contingent or otherwise) of, or payments to to, the Company Acquiror or the Subsidiaries, respectively, in excess of $500,000, (iiy) any license contract, agreement, commitment, arrangement or understanding relating to any joint venture, partnership or sharing of profits or losses with any Person. The Acquiror is not a guarantor or indemnitor of any Intellectual Property to or from the Company or the Subsidiaries (indebtedness of any other than the license to the Company of standard, generally commercially available, “off-the-shelf” third-party products), (iii) indemnification by the Company or the Subsidiaries with respect to infringements of proprietary rights, or (iv) provisions restricting the development, manufacture or distribution of the products or services of the Company or the SubsidiariesPerson. (cb) The Company Acquiror has not (i) accrued, declared or paid any dividends dividends, or authorized or made any distribution upon or with respect to any class or series of its capital stock, stock or (ii) incurred any liabilities or guaranteed any indebtedness for money borrowed or incurred any other liabilities individually in excess of $500,000 or, in the case of indebtedness and/or liabilities individually less than $500,000, 25,000 or in excess of $1,000,000 50,000 in the aggregate, except as provided herein. (c) Except for the transactions contemplated herein, the Acquiror has not engaged in the past three months in any discussion (i) with any representative of any corporation regarding the merger of the Acquiror with or into any such corporation, (ii) with any representative of any corporation, partnership, association or other business entity or any individual regarding the sale, conveyance or disposition of all or substantially all of the assets of the Acquiror or a transaction or series of related transactions in which more than fifty percent (50%) of the voting power of the Acquiror would be disposed of, or (iii) made regarding any loans other form of liquidation, dissolution or advances to any person, other than ordinary reasonable advances for travel expenses, or (iv) sold, exchanged or otherwise disposed of any of its assets or rights, other than the sale of its inventory in the ordinary course of business. (d) For the purposes of subsections (b) and (c) above, all indebtedness, liabilities, agreements and contracts involving the same person or entity shall be aggregated for the purpose of meeting the individual minimum dollar amounts of such subsections. (e) Neither the Company nor the Subsidiaries is in violation or default of any term (including without limitation any diligence obligation) or of any provision of any winding up of the agreements set forth in Schedule 2.13 of the Disclosure Schedule (the “Material Agreements”). The execution, delivery, and performance of and compliance with this Agreement, and the Transaction Documents, and the issuance and sale of the Series D Preferred Stock pursuant hereto and of the Common Stock issuable upon conversion of the Series D Preferred Stock pursuant to the Restated Certificate, will not, with or without the passage of time or giving of notice, result in any such violation, or be in conflict with or constitute a default under any such term or provision, or result in the creation of any mortgage, pledge, lien, encumbrance or charge upon any of the properties or assets of the Company or the Subsidiaries or the suspension, revocation, impairment, forfeiture or nonrenewal of any Material Agreement, permit, license, authorization or approval applicable to the Company or the Subsidiaries, its business or operations or any of its assets or properties. The Company has avoided every condition, and has neither performed any act, the occurrence of which would result in the loss of any right granted to the Company or the Subsidiaries under any Material Agreement, nor failed to perform any act, the failure of which would result in the loss of any right granted to the Company or the Subsidiaries under any Material AgreementAcquiror.

Agreements; Action. Except as set forth on Schedule 4.6 or as disclosed in any Exchange Act Filings: (a) Except for agreements explicitly contemplated hereby and by the other Transaction Documents, there are no agreements, or proposed transactions between the Company or the Subsidiaries and any of their officersunderstandings, directors, employees, affiliates or, to the Company’s knowledge, any affiliate thereof. (b) There are no agreementsinstruments, contracts, instrumentsproposed transactions, judgments, orders, writs or decrees to which the Company or the any of its Subsidiaries is a party or by which the Company or the Subsidiaries it is bound that which may involve involve: (i) obligations of (contingent or otherwise) of, or payments to to, the Company or the Subsidiaries, respectively, any of its Subsidiaries in excess of $500,00050,000 (other than obligations of, or payments to, the Company or any of its Subsidiaries arising from purchase or sale agreements entered into in the ordinary course of business); or (ii) any the transfer or license of any Intellectual Property patent, copyright, trade secret or other proprietary right to or from the Company or the any of its Subsidiaries (other than licenses arising from the license to purchase of “off the Company of standard, generally commercially available, “off-the-shelf” third-party or other standard products), ; or (iii) indemnification by the Company or the Subsidiaries with respect to infringements of proprietary rights, or (iv) provisions restricting the development, manufacture or distribution of the Company’s or any of its Subsidiaries products or services of services; or (iv) indemnification by the Company or the Subsidiariesany of its Subsidiaries with respect to infringements of proprietary rights. (cb) The Since June 30, 2006 (the “Balance Sheet Date”), neither the Company has not nor any of its Subsidiaries has: (i) accrued, declared or paid any dividends dividends, or authorized or made any distribution upon or with respect to any class or series of its capital stock, stock and/or membership interests; (ii) incurred any liabilities or guaranteed any indebtedness for money borrowed or any other liabilities (other than ordinary course obligations) individually in excess of $500,000 50,000 or, in the case of indebtedness and/or liabilities individually less than $500,00050,000, in excess of $1,000,000 100,000 in the aggregate, ; (iii) made any loans or advances to any personperson or entity not in excess, individually or in the aggregate, of $100,000, other than ordinary reasonable course advances for travel expenses, ; or (iv) sold, exchanged or otherwise disposed of any of its assets or rights, other than the sale of its inventory in the ordinary course of business. (dc) For the purposes of subsections (ba) and (cb) above, all indebtedness, liabilities, agreements agreements, understandings, instruments, contracts and contracts proposed transactions involving the same person or entity (including persons or entities the Company or any Subsidiary of the Company has reason to believe are affiliated therewith) shall be aggregated for the purpose of meeting the individual minimum dollar amounts of such subsections. (d) The Company maintains disclosure controls and procedures (“Disclosure Controls”) designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized, and reported, within the time periods specified in the rules and forms of the Securities and Exchange Commission (“SEC”). (e) Neither The Company makes and keep books, records, and accounts, that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the Company’s assets. The Company nor maintains internal control over financial reporting (“Financial Reporting Controls”) designed by, or under the Subsidiaries supervision of, the Company’s principal executive and principal financial officers, and effected by the Company’s board of directors, management, and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles (“GAAP”), including that: (i) transactions are executed in accordance with management’s general or specific authorization; (ii) unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the financial statements are prevented or timely detected; (iii) transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that the Company’s receipts and expenditures are being made only in accordance with authorizations of the Company’s management and board of directors; (iv) transactions are recorded as necessary to maintain accountability for assets; and (v) the recorded accountability for assets is compared with the existing assets at reasonable intervals, and appropriate action is taken with respect to any differences. (f) There is no weakness in violation or default of any term (including without limitation any diligence obligation) or of any provision of any of the agreements set forth Company’s Disclosure Controls or Financial Reporting Controls that is required to be disclosed in Schedule 2.13 of the Disclosure Schedule (the “Material Agreements”). The execution, delivery, and performance of and compliance with this Agreement, and the Transaction Documents, and the issuance and sale of the Series D Preferred Stock pursuant hereto and of the Common Stock issuable upon conversion of the Series D Preferred Stock pursuant to the Restated Certificate, will not, with or without the passage of time or giving of notice, result in any such violation, or be in conflict with or constitute a default under any such term or provision, or result in the creation of any mortgage, pledge, lien, encumbrance or charge upon any of the properties or assets of the Company or the Subsidiaries or the suspensionExchange Act Filings, revocation, impairment, forfeiture or nonrenewal of any Material Agreement, permit, license, authorization or approval applicable to the Company or the Subsidiaries, its business or operations or any of its assets or properties. The Company has avoided every condition, and has neither performed any act, the occurrence of which would result in the loss of any right granted to the Company or the Subsidiaries under any Material Agreement, nor failed to perform any act, the failure of which would result in the loss of any right granted to the Company or the Subsidiaries under any Material Agreementexcept as so disclosed.

Agreements; Action. (aExcept as set forth on Schedule 12(f) Except for agreements explicitly contemplated hereby and by the other Transaction Documents, there are no agreements, or proposed transactions between the Company or the Subsidiaries and as disclosed in any of their officers, directors, employees, affiliates or, to the Company’s knowledge, any affiliate thereof.Exchange Act Filings: (bi) There are no agreements, understandings, instruments, contracts, instrumentsproposed transactions, judgments, orders, writs or decrees to which the Company it or the any of its Subsidiaries is a party or to its knowledge by which the Company or the Subsidiaries it is bound that which may involve involve: (iA) obligations of (contingent or otherwise) of, or payments to the Company to, it or the Subsidiaries, respectively, any of its Subsidiaries in excess of $500,00050,000 (other than obligations of, or payments to, it or any of its Subsidiaries arising from purchase or sale agreements entered into in the ordinary course of business); or (iiB) any the transfer or license of any Intellectual Property patent, copyright, trade secret or other proprietary right to or from the Company or the Subsidiaries it (other than licenses arising from the license to purchase of “off the Company of standard, generally commercially available, “off-the-shelf” third-party or other standard products), (iii) indemnification by the Company or the Subsidiaries with respect to infringements of proprietary rights, ; or (ivC) provisions restricting the development, manufacture or distribution of the its or any of its Subsidiaries’ products or services services; or (D) indemnification by it or any of the Company or the Subsidiariesits Subsidiaries with respect to infringements of proprietary rights. (cii) The Company has not Since June 30, 2007 (ithe “Balance Sheet Date”), neither it nor any of its Subsidiaries has: (A) accrued, declared or paid any dividends dividends, or authorized or made any distribution upon or with respect to any class or series of its capital stock, ; (iiB) incurred any liabilities or guaranteed any indebtedness for money borrowed or any other liabilities (other than ordinary course obligations) individually in excess of $500,000 50,000 or, in the case of indebtedness and/or liabilities individually less than $500,00050,000, in excess of $1,000,000 100,000 in the aggregate, ; (iiiC) made any loans or advances to any personPerson not in excess, individually or in the aggregate, of $100,000, other than ordinary reasonable advances for travel expenses, ; or (ivD) sold, exchanged or otherwise disposed of any of its assets or rights, other than the sale of its inventory Inventory or obsolete Equipment in the ordinary course of business. (diii) Each Company maintains disclosure controls and procedures (“Disclosure Controls”) designed to ensure that information required to be disclosed by the Parent in the reports that it files or submits under the Exchange Act is recorded, processed, summarized, and reported, within the time periods specified in the rules and forms of the SEC. (iv) Each Company makes and keeps books, records, and accounts, that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of its assets. Each Company maintains internal control over financial reporting (“Financial Reporting Controls”) designed by, or under the supervision of, its principal executive and principal financial officers, and effected by its board of directors, management, and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP, including that: (1) transactions are executed in accordance with management’s general or specific authorization; (2) unauthorized acquisition, use, or disposition of the Parent’s assets that could have a material effect on the financial statements are prevented or timely detected; (3) transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that its receipts and expenditures are being made only in accordance with authorizations of the Parent’s management and board of directors; (4) transactions are recorded as necessary to maintain accountability for assets; and (5) the recorded accountability for assets is compared with the existing assets at reasonable intervals, and appropriate action is taken with respect to any differences. (v) There is no weakness in any of its Disclosure Controls or Financial Reporting Controls that is required to be disclosed in any of the Exchange Act Filings, except as so disclosed. For the purposes of subsections (bi) and (cii) aboveof this Section 12(f), all indebtedness, liabilities, agreements agreements, understandings, instruments, contracts and contracts proposed transactions involving the same person Person (including Persons it or entity any of its applicable Subsidiaries has reason to believe are affiliated therewith or with any Subsidiary thereof) shall be aggregated for the purpose of meeting the individual minimum dollar amounts of such subsections. (e) Neither the Company nor the Subsidiaries is in violation or default of any term (including without limitation any diligence obligation) or of any provision of any of the agreements set forth in Schedule 2.13 of the Disclosure Schedule (the “Material Agreements”). The execution, delivery, and performance of and compliance with this Agreement, and the Transaction Documents, and the issuance and sale of the Series D Preferred Stock pursuant hereto and of the Common Stock issuable upon conversion of the Series D Preferred Stock pursuant to the Restated Certificate, will not, with or without the passage of time or giving of notice, result in any such violation, or be in conflict with or constitute a default under any such term or provision, or result in the creation of any mortgage, pledge, lien, encumbrance or charge upon any of the properties or assets of the Company or the Subsidiaries or the suspension, revocation, impairment, forfeiture or nonrenewal of any Material Agreement, permit, license, authorization or approval applicable to the Company or the Subsidiaries, its business or operations or any of its assets or properties. The Company has avoided every condition, and has neither performed any act, the occurrence of which would result in the loss of any right granted to the Company or the Subsidiaries under any Material Agreement, nor failed to perform any act, the failure of which would result in the loss of any right granted to the Company or the Subsidiaries under any Material Agreement.