Common use of Agreements; Action Clause in Contracts

Agreements; Action. (a) 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 its Subsidiaries' contracts, agreements, leases or other instruments to which the Company or 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 its Subsidiaries during any fiscal year of more than $250,000, (iii) 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 any Person or in any geographical area, and (xi) all contracts restricting the payment of interest upon, or the redemption or conversion of, the Notes (collectively, the "Contracts"). (b) Except as set forth on Schedule 3.7(b) to the Disclosure Letter, 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 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 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 Company or such Subsidiary in accordance with its terms (subject 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) and an implied covenant of good faith and fair dealing) and neither the Company nor any of its Subsidiaries has any knowledge that any Contract is not a legal, valid and binding obligation of the other parties thereto.

Agreements; Action. (a) Attached hereto as Schedule 3.7(a) Except for agreements explicitly contemplated hereby and agreements between the Company and its employees with respect 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 sale of the Company's and its Subsidiaries' contractsCommon Stock, there are no agreements, leases understandings or other instruments to which proposed transactions between the Company or and any of its Subsidiaries is a party or by which the Companyofficers, its Subsidiaries or its properties are bounddirectors, which involve payments by or to a Company or its Subsidiaries during any fiscal year of more than $250,000, (iii) 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 affiliates 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 any Person or in any geographical area, and (xi) all contracts restricting the payment of interest upon, or the redemption or conversion of, the Notes (collectively, the "Contracts")affiliate thereof. (b) Except as set forth on Schedule 3.7(b) There are no agreements, understandings, instruments, contracts, proposed transactions, judgments, orders, writs or decrees to the Disclosure Letter, neither which the Company nor is a party or to its knowledge by which it is bound which may involve (i) obligations (contingent or otherwise) of, or payments to, the Company in excess of twenty five thousand dollars ($25,000) (other than obligations of, or payments to, the Company arising from agreements entered into in the ordinary course of business or to support research being conducted at the University of California, San Diego), or (ii) the license of any patent, copyright, trade secret or other proprietary right to or from the Company (other than licenses arising from the purchase of "off the shelf" or other standard products) and licenses of certain patents from the Regents of the University of California, or (iii) provisions restricting or affecting the development, manufacture or distribution of the Company's products or services, or (iv) indemnification by the Company with respect to infringements of proprietary rights (other than indemnification obligations arising from purchase or sale agreements entered into in the ordinary course of business). (c) The Company has not (i) 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 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 one hundred thousand dollars ($100,000) and in excess of two hundred fifty thousand dollars ($250,000) in the aggregate, (iii) made any loans or advances to any person, other than ordinary advances for travel expenses, or (iv) sold, exchanged or otherwise disposed of any of its Subsidiaries isassets or rights, nor to other than the Company's knowledge is any other party to any Contractsale of its inventory in the ordinary course of business. (d) For the purposes of subsections (b) and (c) above, in default underall indebtedness, liabilities, agreements, understandings, instruments, contracts and proposed transactions involving the same person or in breach entity (including persons 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 entities the Company or, has reason to believe are affiliated therewith) shall be aggregated for the Company's knowledge, purpose of meeting the individual minimum dollar amounts of such subsections. (e) The Company has not engaged in any other party under discussion (i) with any Contract. Other than Contracts which have terminated representative of any corporation or expired in accordance with their terms, each of corporations regarding the Contracts is in full force and effect and (assuming due execution and delivery by the counterparties thereto) is a legal, valid and binding obligation consolidation or merger of the Company with or its Subsidiary into any such corporation or corporations, (as applicableii) enforceable against with 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 a transaction or series of related transactions in which more than fifty percent (50%) of the voting power of the Company is disposed of, or such Subsidiary in accordance with its terms (subject to the effects iii) regarding any other form of bankruptcyacquisition, insolvencyliquidation, fraudulent conveyance, reorganization, moratorium and other similar laws relating to dissolution or affecting creditors' rights generally, general equitable principles (whether considered in a proceeding in equity or at law) and an implied covenant of good faith and fair dealing) and neither the Company nor any of its Subsidiaries has any knowledge that any Contract is not a legal, valid and binding obligation winding up of the other parties theretoCompany.

Agreements; Action. Except as set forth on Schedule 4.6 or as disclosed in any Exchange Act Filings: (a) 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 SECThere are no agreements, (ii) all of the Company's and its Subsidiaries' understandings, instruments, contracts, agreementsproposed transactions, leases judgments, orders, writs or other instruments decrees to which the Company or any of its Subsidiaries is a party or by which the Companyit is bound which may involve: (i) obligations (contingent or otherwise) of, its Subsidiaries or its properties are boundpayments to, which involve payments by or to a Company or its Subsidiaries during any fiscal year of more than $250,000, (iii) 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 partyin excess of $100,000 (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 (vii) all contracts for the employment transfer or license of any officer patent, copyright, trade secret or employeeother proprietary right to or from the Company or any of its Subsidiaries (other than licenses arising from the purchase of “off the shelf” or other standard products); or (iii) provisions restricting the development, manufacture or distribution of the Company’s or any of its Subsidiaries products or services; or (viiv) all material consulting agreements, (vii) any guarantees indemnification 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 Subsidiaries with respect to infringements of its Subsidiaries from engaging in any line of business or competing with any Person or in any geographical area, and (xi) all contracts restricting the payment of interest upon, or the redemption or conversion of, the Notes (collectively, the "Contracts")proprietary rights. (b) Except as set forth on Schedule 3.7(b) to Since December 31, 2004 (the Disclosure Letter“Balance Sheet Date”), neither the Company nor any of its Subsidiaries ishas: (i) declared or paid any dividends, nor or authorized or made any distribution upon or with respect to the Company's knowledge is any class or series of its capital stock; (ii) incurred any indebtedness for money borrowed or any other party liabilities (other than ordinary course obligations) individually in excess of $50,000 or, in the case of indebtedness and/or liabilities individually less than $50,000, in excess of $100,000 in the aggregate; (iii) made any loans or advances to any Contractperson or entity not in excess, in default under, individually or in breach the aggregate, of $100,000, other than ordinary course advances for travel expenses; or violation of(iv) sold, exchanged or otherwise disposed of any Contract of its assets or rights, other than the sale of its inventory in the ordinary course of business. (c) For the purposes of subsections (a) and no event (b) above, all indebtedness, liabilities, agreements, understandings, instruments, contracts and proposed transactions involving the same person or entity (including persons or entities the Company or any Subsidiary of the Company has occurred which, with reason to believe are affiliated therewith) shall be aggregated for the giving purpose of notice or passage meeting the individual minimum dollar amounts of time or both would constitute a default such subsections. (d) The Company maintains disclosure controls and procedures (“Disclosure Controls”) designed to ensure that information required to be disclosed by the Company orin 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) 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 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 Company's knowledge, any other party under any Contract. Other than Contracts which have terminated or expired reliability of financial reporting and the preparation of financial statements for external purposes in accordance with their termsgenerally accepted accounting principles (“GAAP”), each of the Contracts is in full force and effect and including that: (assuming due execution and delivery by the counterparties theretoi) is a legal, valid and binding obligation of the Company or its Subsidiary (as applicable) enforceable against the Company or such Subsidiary transactions are executed in accordance with its terms management’s general or specific authorization; (subject 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 effects Company’s receipts and expenditures are being made only in accordance with authorizations of bankruptcythe 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, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating appropriate action is taken with respect to or affecting creditors' rights generally, general equitable principles any differences. (whether considered f) There is no weakness in a proceeding in equity or at law) and an implied covenant of good faith and fair dealing) and neither the Company nor any of its Subsidiaries has the Company’s Disclosure Controls or Financial Reporting Controls that is required to be disclosed in any knowledge that any Contract is not a legal, valid and binding obligation of the other parties theretoExchange Act Filings, except as so disclosed.

Agreements; Action. (a) 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 its Subsidiaries' contracts, agreements, leases or other instruments to which the Company or 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 its Subsidiaries during any fiscal year of more than $250,000, (iii) 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 any Person or in any geographical area, and (xi) all contracts restricting the payment of interest upon, or the redemption or conversion of, the Notes (collectively, the "Contracts"). (b) Except as set forth on Schedule 3.7(b4.6 or as disclosed in any Exchange Act Filings: (a) There are no agreements, understandings, instruments, contracts, proposed transactions, judgments, orders, writs or decrees to the Disclosure Letter, neither which the Company nor is a party or to its knowledge by which it is bound which may involve (i) obligations (contingent or otherwise) of, or payments to, the Company in excess of $50,000 (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) the transfer or license of any patent, copyright, trade secret or other proprietary right to or from the Company (other than licenses arising from the purchase of “off the shelf” or other standard products), or (iii) provisions restricting the development, manufacture or distribution of the Company’s products or services, or (iv) indemnification by the Company with respect to infringements of proprietary rights. (b) Since September 30, 2005, the Company has not (i) 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 indebtedness for money borrowed or any other liabilities (other than ordinary course obligations) individually in excess of $50,000 or, in the case of indebtedness and/or liabilities individually less than $50,000, in excess of $100,000 in the aggregate, (iii) made any loans or advances to any person not in excess, individually or in the aggregate, of $100,000, other than ordinary advances for travel expenses, or (iv) sold, exchanged or otherwise disposed of any of its Subsidiaries isassets or rights, nor to other than the Company's knowledge is any other party to any Contractsale of its inventory in the ordinary course of business. (c) For the purposes of subsections (a) and (b) above, in default underall indebtedness, liabilities, agreements, understandings, instruments, contracts and proposed transactions involving the same person or in breach entity (including persons 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 entities the Company or, has reason to believe are affiliated therewith) shall be aggregated for the Company's knowledge, any other party under any Contract. Other than Contracts which have terminated or expired in accordance with their terms, each purpose of meeting the Contracts is in full force and effect and (assuming due execution and delivery by the counterparties thereto) is a legal, valid and binding obligation individual minimum dollar amounts of the Company or its Subsidiary (as applicable) enforceable against the Company or such Subsidiary in accordance with its terms (subject 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) and an implied covenant of good faith and fair dealing) and neither the Company nor any of its Subsidiaries has any knowledge that any Contract is not a legal, valid and binding obligation of the other parties theretosubsections.

Agreements; Action. (a) Attached hereto Except for agreements explicitly contemplated hereby and as Schedule 3.7(a) set forth in Section 3.13(a)of the Disclosure Schedule, there are no agreements, understandings, transactions or proposed transactions between the Company and any of its officers, directors, or Affiliates, or any Affiliate thereof of a nature required to be disclosed pursuant to the Disclosure Letter is a list of (i) all "material contracts" within the meaning of Item 601 provisions of Regulation S-K of the SECK, (ii) all of the Company's and its Subsidiaries' contracts, agreements, leases or other instruments to which the Company or 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 its Subsidiaries during any fiscal year of more than $250,000, (iii) 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 none of any officer such individuals or employee, (vi) all material consulting agreements, (vii) entities has 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 interest in any line of business party to any such agreement, understanding, transaction or competing with any Person or in any geographical area, and (xi) all contracts restricting the payment of interest upon, or the redemption or conversion of, the Notes (collectively, the "Contracts")proposed transaction. (b) Except as set forth on Schedule 3.7(bin Section 3.13(b) to of the Disclosure LetterSchedule, neither the Company nor has not (i) 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) made any loans or advances to any person, other than ordinary advances to employees for travel expenses, or (iii) sold, exchanged or otherwise disposed of any of its Subsidiaries isassets or rights, nor other than in the ordinary course of business. (c) The Company has not admitted in writing its inability to pay its debts generally as they become due, filed or consented to the filing against it of a petition in bankruptcy or a petition to take advantage of any insolvency act, made an assignment for the benefit of creditors, consented to the appointment of a receiver for itself or for the whole or any substantial part of its property, or had a petition in bankruptcy filed against it, been adjudicated a bankrupt, or filed a petition or answer seeking reorganization or arrangement under the federal bankruptcy laws or any other laws of the United States or any other jurisdiction. (d) The Company is in compliance with all obligations, agreements and conditions contained in any evidence of indebtedness or any loan agreement or other contract or agreement (whether or not relating to indebtedness) to which the Company is a party or is subject (collectively, the "Obligations"), the lack of compliance with which could afford to any person the right to (i) accelerate any indebtedness or (ii) terminate any right or agreement of the Company, the termination of which would have a Material Adverse Effect. To the best of the Company's knowledge is any and belief, all other party parties to any Contract, such Obligations are in default under, or in breach or violation of, any Contract and no event has occurred which, compliance with the giving terms and conditions 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 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 Company or such Subsidiary in accordance with its terms (subject 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) and an implied covenant of good faith and fair dealing) and neither the Company nor any of its Subsidiaries has any knowledge that any Contract is not a legal, valid and binding obligation of the other parties theretoObligations.

Agreements; Action. (aExcept as set forth on Schedule 12(f) Attached hereto or as Schedule 3.7(a) to the Disclosure Letter is a list of disclosed in any Exchange Act Filings: (i) all "material contracts" within the meaning of Item 601 of Regulation S-K of the SECThere are no agreements, (ii) all of the Company's and its Subsidiaries' understandings, instruments, contracts, agreementsproposed transactions, leases judgments, orders, writs or other instruments decrees to which the Company it or any of its Subsidiaries is a party or to its knowledge by which the Companyit is bound which may involve: (i) obligations (contingent or otherwise) of, its Subsidiaries or its properties are boundpayments to, which involve payments by or to a Company or its Subsidiaries during any fiscal year of more than $250,000, (iii) 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 it or any of its Subsidiaries is a partyin excess of $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 (vii) all contracts for the employment transfer or license of any officer patent, copyright, trade secret or employeeother proprietary right to or from it (other than licenses arising from the purchase of "off the shelf" or other standard products); or (iii) provisions restricting the development, (vi) all material consulting agreements, (vii) any guarantees by the Company manufacture or distribution of its or any of its Subsidiaries, ' products or services; or (viiiiv) all material distributor and sales agency agreements, (ix) all IP Contracts (as defined in Section 3.11), (x) all contracts restricting the Company indemnification by it or any of its Subsidiaries from engaging in any line with respect to infringements of business or competing with any Person or in any geographical area, and (xi) all contracts restricting the payment of interest upon, or the redemption or conversion of, the Notes (collectively, the "Contracts")proprietary rights. (bii) Except as set forth on Schedule 3.7(bSince December 31, 2004 (the "Balance Sheet Date") to the Disclosure Letter, neither the Company it nor any of its Subsidiaries ishas: (i) declared or paid any dividends, nor or authorized or made any distribution upon or with respect to the Company's knowledge is any class or series of its capital stock; (ii) incurred any indebtedness for money borrowed or any other party liabilities (other than ordinary course obligations) individually in excess of $50,000 or, in the case of indebtedness and/or liabilities individually less than $50,000, in excess of $100,000 in the aggregate; (iii) made any loans or advances to any ContractPerson not in excess, individually or in the aggregate, of $100,000, other than 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. (iii) For the purposes of subsections (i) and (ii) of this Section 12(f), all indebtedness, liabilities, agreements, understandings, instruments, contracts and proposed transactions involving the same Person (including Persons it or 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. (iv) 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 SEC. (v) The Parent makes and keeps books, records, and accounts, that, in default underreasonable 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 in breach or violation under the supervision of, any Contract its principal executive and no event has occurred whichprincipal financial officers, with the giving and effected by its board of notice or passage of time or both would constitute a default by the Company ordirectors, management, and other personnel, to provide reasonable assurance regarding the Company's knowledge, any other party under any Contract. Other than Contracts which have terminated or expired reliability of financial reporting and the preparation of financial statements for external purposes in accordance with their termsGAAP, each of the Contracts is in full force and effect and including that: (assuming due execution and delivery by the counterparties thereto1) is a legal, valid and binding obligation of the Company or its Subsidiary (as applicable) enforceable against the Company or such Subsidiary 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 terms receipts and expenditures are being made only in accordance with authorizations of the Parent's management and board of directors; (subject 4) transactions are recorded as necessary to maintain accountability for assets; and (5) the effects of bankruptcyrecorded accountability for assets is compared with the existing assets at reasonable intervals, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating appropriate action is taken with respect to or affecting creditors' rights generally, general equitable principles any differences. (whether considered vi) There is no weakness in a proceeding in equity or at law) and an implied covenant of good faith and fair dealing) and neither the Company nor any of its Subsidiaries has Disclosure Controls or Financial Reporting Controls that is required to be disclosed in any knowledge that any Contract is not a legal, valid and binding obligation of the other parties theretoExchange Act Filings, except as so disclosed.

Agreements; Action. (a) 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 its Subsidiaries' contracts, agreements, leases or other instruments to which the Company or 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 its Subsidiaries during any fiscal year of more than $250,000, (iii) 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 any Person or in any geographical area, and (xi) all contracts restricting the payment of interest upon, or the redemption or conversion of, the Notes (collectively, the "Contracts"). (b) Except as set forth on Schedule 3.7(b12(f) or as disclosed in any Exchange Act Filings: (i) There are no agreements, understandings, instruments, contracts, proposed transactions, judgments, orders, writs or decrees to which it or any of its Eligible Subsidiaries is a party or to its knowledge by which it is bound which may involve: (i) obligations (contingent or otherwise) of, or payments to, it or any of its Eligible Subsidiaries in excess of $250,000 (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 other proprietary right material to the Disclosure Letterbusiness of the Parent to or from it (other than licenses arising from the 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 IP Security Agreement); or (iii) provisions restricting the development, manufacture or distribution of its or any of its Eligible Subsidiaries’ products or services; or (iv) indemnification by it or any of its Eligible Subsidiaries with respect to infringements of proprietary rights. (ii) Since June 30, 2007 (the “Balance Sheet Date”) neither the Company it nor any of its Eligible Subsidiaries ishas: (i) declared or paid any dividends, nor or authorized or made any distribution upon or with respect to the Company's knowledge is any class or series of its capital stock; (ii) incurred any indebtedness for money borrowed or any other party liabilities (other than ordinary course obligations) individually in excess of $250,000 or, in the case of indebtedness and/or liabilities individually less than $250,000, in excess of $500,000 in the aggregate; (iii) made any loans or advances to any ContractPerson not in excess, individually or in the aggregate, of $100,000, other than 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. (iii) For the purposes of subsections (i) and (ii) of this Section 12(f), all indebtedness, liabilities, agreements, understandings, instruments, contracts and proposed transactions involving the same Person (including Persons it or 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. (iv) 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 SEC. (v) The Parent makes and keeps books, records, and accounts, that, in default underreasonable 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 in breach or violation under the supervision of, any Contract its principal executive and no event has occurred whichprincipal financial officers, with the giving and effected by its board of notice or passage of time or both would constitute a default by the Company ordirectors, management, and other personnel, to provide reasonable assurance regarding the Company's knowledge, any other party under any Contract. Other than Contracts which have terminated or expired reliability of financial reporting and the preparation of financial statements for external purposes in accordance with their termsGAAP, each of the Contracts is in full force and effect and including that: (assuming due execution and delivery by the counterparties thereto1) is a legal, valid and binding obligation of the Company or its Subsidiary (as applicable) enforceable against the Company or such Subsidiary 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 terms receipts and expenditures are being made only in accordance with authorizations of the Parent’s management and board of directors; (subject 4) transactions are recorded as necessary to maintain accountability for assets; and (5) the effects of bankruptcyrecorded accountability for assets is compared with the existing assets at reasonable intervals, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating appropriate action is taken with respect to or affecting creditors' rights generally, general equitable principles any differences. (whether considered vi) There is no weakness in a proceeding in equity or at law) and an implied covenant of good faith and fair dealing) and neither the Company nor any of its Subsidiaries has Disclosure Controls or Financial Reporting Controls that is required to be disclosed in any knowledge that any Contract is not a legal, valid and binding obligation of the other parties theretoExchange Act Filings, except as so disclosed.

Agreements; Action. (a) 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 its Subsidiaries' contracts, agreements, leases or other instruments to which the Company or 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 its Subsidiaries during any fiscal year of more than $250,000, (iii) 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 any Person or in any geographical area, and (xi) all contracts restricting the payment of interest upon, or the redemption or conversion of, the Notes (collectively, the "Contracts"). (b) Except as set forth on Schedule 3.7(b4.6 or as disclosed in any Exchange Act Filings: (a) There are no agreements, understandings, instruments, contracts, proposed transactions, judgments, orders, writs or decrees to the Disclosure Letter, neither which the Company nor is a party or to its knowledge by which it is bound which involve: (i) obligations (contingent or otherwise) of, or payments to, the Company in excess of $50,000 (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) the transfer or license of any patent, copyright, trade secret or other proprietary right to or from the Company (other than licenses arising from the purchase of "off the shelf" or other standard products); or (iii) provisions restricting the development, manufacture or distribution of the Company's products or services; or (iv) indemnification by the Company with respect to infringements of proprietary rights. (b) Since June 30, 2004, the Company has not: (i) 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 indebtedness for money borrowed or any other liabilities (other than ordinary course obligations) individually in excess of $50,000 or, in the case of indebtedness and/or liabilities individually less than $50,000, in excess of $100,000 in the aggregate; (iii) made any loans or advances to any person not in excess, individually or in the aggregate, of $100,000, other than ordinary advances for travel expenses; or (iv) sold, exchanged or otherwise disposed of any of its Subsidiaries isassets or rights, nor to other than the Company's knowledge is any other party to any Contractsale of its inventory in the ordinary course of business. (c) For the purposes of subsections (a) and (b) above, in default underall indebtedness, liabilities, agreements, understandings, instruments, contracts and proposed transactions involving the same person or in breach entity (including persons 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 entities the Company or, has reason to believe are affiliated therewith) shall be aggregated for the Company's knowledge, any other party under any Contract. Other than Contracts which have terminated or expired in accordance with their terms, each purpose of meeting the Contracts is in full force and effect and (assuming due execution and delivery by the counterparties thereto) is a legal, valid and binding obligation individual minimum dollar amounts of the Company or its Subsidiary (as applicable) enforceable against the Company or such Subsidiary in accordance with its terms (subject 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) and an implied covenant of good faith and fair dealing) and neither the Company nor any of its Subsidiaries has any knowledge that any Contract is not a legal, valid and binding obligation of the other parties theretosubsections.

Agreements; Action. (a) Attached hereto as Schedule 3.7(aExcept for agreements explicitly contemplated hereby and by the Investors' Rights Agreement, there are no agreements, understandings or proposed transactions between the Company and any of its officers, directors, affiliates, or any affiliate thereof. (b) to the Disclosure Letter is a list of (i) all "material contracts" within the meaning of Item 601 of Regulation S-K of the SECThere are no agreements, (ii) all of the Company's and its Subsidiaries' understandings, instruments, contracts, agreementsproposed transactions, leases judgments, orders, writs or other instruments decrees to which the Company or any of its Subsidiaries is a party or by which it is bound which may involve obligations (contingent or otherwise) of, or payments to, the CompanyCompany in excess of $50,000. (c) The Company has not (i) declared or paid any dividends, or authorized or made any distribution upon or with respect to any class or series of its Subsidiaries capital stock, (ii) incurred any indebtedness for money borrowed or its properties are boundany other liabilities individually in excess of $10,000 (except for trade credit incurred in the ordinary course of business) or, which involve payments by or to a Company or its Subsidiaries during any fiscal year in the case of more indebtedness and/or liabilities individually less than $250,00010,000, in excess of $50,000 in the aggregate (except for trade credit incurred in the ordinary course of business), (iii) all of Company's and its Subsidiaries' loan agreementsmade any loans or advances to any person, 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 ordinary advances for borrowed money representing payment obligations of $250,000 travel expenses or more, (iv) all material operating sold, exchanged or capital leases for equipment to which the Company or otherwise disposed of any of its Subsidiaries is a party, (v) all contracts for the employment of any officer assets 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 any Person or in any geographical area, and (xi) all contracts restricting the payment of interest upon, or the redemption or conversion of, the Notes (collectively, the "Contracts")rights. (d) For the purposes of subsections (b) Except as set forth on Schedule 3.7(band (c) to above, all indebtedness, liabilities, agreements, understandings, instruments, contracts and proposed transactions involving the Disclosure Letter, neither same person or entity (including persons or entities the Company nor has reason to believe are affiliated therewith) shall be aggregated for the purpose of meeting the individual minimum dollar amounts of such subsections. (e) The Company is not a party to and is not bound by any contract, agreement or instrument, or subject to any restriction under its Amended and Restated Articles of Incorporation or Bylaws, which adversely affects its Subsidiaries isbusiness as now conducted or as proposed to be conducted, nor to its properties or its financial condition. (f) The Company has not engaged in the past three (3) months in any discussion (i) with any corporation or corporations regarding the consolidation or merger of the Company with or into any such corporation or corporations, (ii) with 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's knowledge is , (iii) with any corporation, partnership, association or other business entity or any individual regarding any transaction or series of related transactions in which more than fifty percent (50%) of the voting power of the Company would be disposed of, or (iv) regarding any other party to any Contractform of acquisition, in default underliquidation, dissolution or 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 Contracts is in full force and effect and (assuming due execution and delivery by the counterparties thereto) is a legal, valid and binding obligation winding up of the Company or its Subsidiary (as applicable) enforceable against the Company or such Subsidiary in accordance with its terms (subject 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) and an implied covenant of good faith and fair dealing) and neither the Company nor any of its Subsidiaries has any knowledge that any Contract is not a legal, valid and binding obligation of the other parties theretoassets.

Agreements; Action. (a) Attached hereto as Schedule 3.7(a) Except for agreements explicitly contemplated hereby and agreements between the Company and its individual employees with respect 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 sale of the Company's Common Stock, there are no agreements, understandings or proposed transactions between the Company and any of its Subsidiaries' officers, directors, affiliates or any affiliate thereof. (b) There are no agreements, understandings, instruments, contracts, agreementsproposed transactions, leases judgments, orders, writs or other instruments decrees to which the Company or any of its Subsidiaries is a party or by which it is bound which may involve (i) obligations (contingent or otherwise) of, or payments to, the CompanyCompany in excess of $25,000 (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) the transfer or license of any patent, copyright, trade secret or other proprietary right to or from the Company (other than licenses arising from the purchase of "off the shelf" or other standard products), or (iii) 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 by the Company for the benefit of its Subsidiaries customers in the ordinary course of business). (c) The Company has not (i) declared or paid any dividends, or authorized or made any distribution upon or with respect to any class or series of its properties are boundcapital stock, which involve payments by (ii) incurred any indebtedness for money borrowed or any other liabilities (other than with respect to a Company or its Subsidiaries during any fiscal year dividend obligations, distributions, indebtedness and other obligations incurred in the ordinary course of more business) individually in excess of $25,000 or, in the case of indebtedness and/or liabilities individually less than $250,00025,000, in excess of $50,000 in the aggregate, (iii) all of Company's and its Subsidiaries' loan agreementsmade any loans or advances to any person, 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 ordinary advances for borrowed money representing payment obligations of $250,000 travel expenses, or more, (iv) all material operating sold, exchanged or capital leases for equipment to which the Company or otherwise disposed of any of its Subsidiaries is a partyassets or rights, (v) all contracts for other than the employment of any officer or employee, (vi) all material consulting agreements, (vii) any guarantees by the Company or any sale of its Subsidiaries, (viii) all material distributor and sales agency agreements, (ix) all IP Contracts (as defined inventory in Section 3.11), (x) all contracts restricting the Company or any ordinary course of its Subsidiaries from engaging in any line of business or competing with any Person or in any geographical area, and (xi) all contracts restricting the payment of interest upon, or the redemption or conversion of, the Notes (collectively, the "Contracts")business. (d) For the purposes of subsections (b) Except as set forth on Schedule 3.7(band (c) to above, all indebtedness, liabilities, agreements, understandings, instruments, contracts and proposed transactions involving the Disclosure Letter, neither same person or entity (including persons or entities the Company nor any has reason to believe are affiliated therewith) shall be aggregated for the purpose of its Subsidiaries is, nor to meeting the Company's knowledge is any other party to any Contract, in default under, or in breach or violation of, any Contract and no event has occurred which, with the giving individual minimum dollar amounts 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 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 Company or such Subsidiary in accordance with its terms (subject 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) and an implied covenant of good faith and fair dealing) and neither the Company nor any of its Subsidiaries has any knowledge that any Contract is not a legal, valid and binding obligation of the other parties theretosubsections.

Agreements; Action. Except as set forth on Schedule 4.6 or as disclosed in any Exchange Act Filings: (a) 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 SECthere are no agreements, (ii) all of the Company's and its Subsidiaries' understandings, instruments, contracts, agreementsproposed transactions, leases judgments, orders, writs or other instruments decrees to which the Company or any of its Subsidiaries is a party or by which the Companyit is bound which may involve: (i) obligations (contingent or otherwise) of, its Subsidiaries or its properties are boundpayments to, which involve payments by or to a Company or its Subsidiaries during any fiscal year of more than $250,000, (iii) 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 Subsidiary in excess of its Subsidiaries is a party$50,000 (other than obligations of, or payments to, the Company or any Subsidiary arising from purchase or sale agreements entered into in the ordinary course of business); or (vii) all contracts for the employment transfer or license of any officer patent, copyright, trade secret or employeeother proprietary right to or from the Company or any Subsidiary (other than licenses arising from the purchase of "off the shelf" or other standard products); or (iii) provisions restricting the development, manufacture or distribution of the Company's or any Subsidiary's products or services; or (viiv) all material consulting agreements, (vii) any guarantees indemnification by the Company or any Subsidiary with respect to infringements 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 any Person or in any geographical area, and (xi) all contracts restricting the payment of interest upon, or the redemption or conversion of, the Notes (collectively, the "Contracts")proprietary rights. (b) Except as set forth on Schedule 3.7(b) to the Disclosure LetterSince December 31, 2004, neither the Company nor any of its Subsidiaries ishas: (i) declared or paid any dividends, nor or authorized or made any distribution upon or with respect to any class or series of its capital stock; (ii) incurred any indebtedness for money borrowed or any other liabilities (other than ordinary course obligations) individually in excess of $50,000 or, in the case of indebtedness and/or liabilities individually less than $50,000, in excess of $100,000 in the aggregate; (iii) made any loans or advances to any person not in excess, individually or in the aggregate, of $100,000, other than ordinary 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) For the purposes of subsections (a) and (b) above, all indebtedness, liabilities, agreements, understandings, instruments, contracts and proposed transactions involving the same person or entity (including persons or entities the Company or any Subsidiary 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) 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 knowledge is any other party to any Contract, in default underassets. The Company maintains internal control over financial reporting ("Financial Reporting Controls") designed by, or in breach or violation under the supervision 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 knowledgeprincipal executive and principal financial officers, any and effected by the Company's board of directors, management and other party under any Contract. Other than Contracts which have terminated or expired personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with their termsgenerally accepted accounting principles ("GAAP"), each of the Contracts is in full force and effect and including that: (assuming due execution and delivery by the counterparties theretoi) is a legal, valid and binding obligation of the Company or its Subsidiary (as applicable) enforceable against the Company or such Subsidiary transactions are executed in accordance with its terms management's general or specific authorization; (subject 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 effects Company's receipts and expenditures are being made only in accordance with authorizations of bankruptcythe Company's management and board of directors; (iv) transactions are recorded as necessary to maintain accountability for assets; (v) the recorded accountability for assets is compared with the existing assets at reasonable intervals, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating appropriate action is taken with respect to or affecting creditors' rights generally, general equitable principles any differences. (whether considered f) There is no weakness in a proceeding in equity or at law) and an implied covenant of good faith and fair dealing) and neither the Company nor any of its Subsidiaries has the Company's Disclosure Controls or Financial Reporting Controls that is required to be disclosed in any knowledge that any Contract is not a legal, valid and binding obligation of the other parties theretoExchange Act Filings, except as so disclosed.

Agreements; Action. Except as set forth on Schedule 4.6 or as disclosed in any Exchange Act Filings: (a) Attached hereto as Schedule 3.7(a) to Other than in connection with the Disclosure Letter is a list of (i) all "material contracts" within June Purchase Agreement and the meaning of Item 601 of Regulation S-K of the SECJune Related Agreements, (ii) all of the Company's and its Subsidiaries' there are no agreements, instruments, contracts, agreementsjudgments, leases orders, writs or other instruments decrees to which the Company or any of its Subsidiaries is a party or by which the Companyit is bound which may involve: (i) obligations (contingent or otherwise) of, its Subsidiaries or its properties are boundpayments to, which involve payments by or to a Company or its Subsidiaries during any fiscal year of more than $250,000, (iii) 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 partyin excess of $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 (vii) all contracts for the employment transfer or license of any officer patent, copyright, trade secret or employeeother proprietary right to or from the Company or any of its Subsidiaries (other than licenses arising from the purchase of "off the shelf" or other standard products); or (iii) provisions restricting the development, manufacture or distribution of the Company's or any of its Subsidiaries products or services; or (viiv) all material consulting agreements, (vii) any guarantees indemnification 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 Subsidiaries with respect to infringements of its Subsidiaries from engaging in any line of business or competing with any Person or in any geographical area, and (xi) all contracts restricting the payment of interest upon, or the redemption or conversion of, the Notes (collectively, the "Contracts")proprietary rights. (b) Except as set forth on Schedule 3.7(b) to Since December 31, 2006 (the Disclosure Letter"Balance Sheet Date"), neither the Company nor any of its Subsidiaries ishas: (i) declared or paid any dividends, nor or authorized or made any distribution upon or with respect to any class or series of its capital stock; (ii) incurred any indebtedness for money borrowed or any other liabilities (other than ordinary course obligations) individually in excess of $50,000 or, in the case of indebtedness and/or liabilities individually less than $50,000, in excess of $100,000 in the aggregate; (iii) made any loans or advances to any person or entity not in excess, individually or in the aggregate, of $100,000, other than ordinary 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) For the purposes of subsections (a) and (b) above, all indebtedness, liabilities, agreements, instruments and contracts 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) 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 knowledge is any other party to any Contract, in default underassets. The Company maintains internal control over financial reporting ("Financial Reporting Controls") designed by, or in breach or violation under the supervision 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 knowledgeprincipal executive and principal financial officers, any and effected by the Company's board of directors, management, and other party under any Contract. Other than Contracts which have terminated or expired personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with their termsgenerally accepted accounting principles ("GAAP"), each of the Contracts is in full force and effect and including that: (assuming due execution and delivery by the counterparties theretoi) is a legal, valid and binding obligation of the Company or its Subsidiary (as applicable) enforceable against the Company or such Subsidiary transactions are executed in accordance with its terms management's general or specific authorization; (subject 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 effects Company's receipts and expenditures are being made only in accordance with authorizations of bankruptcythe 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, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating appropriate action is taken with respect to or affecting creditors' rights generally, general equitable principles any differences. (whether considered f) There is no weakness in a proceeding in equity or at law) and an implied covenant of good faith and fair dealing) and neither the Company nor any of its Subsidiaries has the Company's Disclosure Controls or Financial Reporting Controls that is required to be disclosed in any knowledge that any Contract is not a legal, valid and binding obligation of the other parties theretoExchange Act Filings, except as so disclosed.

Agreements; Action. Except as set forth on Schedule 4.6 or as disclosed in any Exchange Act Filings: (a) 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 SECthere are no agreements, (ii) all of the Company's and its Subsidiaries' understandings, instruments, contracts, agreementsproposed transactions, leases judgments, orders, writs or other instruments decrees to which the Company or any of its Subsidiaries is a party or by which the Companyit is bound which may involve: (i) obligations (contingent or otherwise) of, its Subsidiaries or its properties are boundpayments to, which involve payments by or to a Company or its Subsidiaries during any fiscal year of more than $250,000, (iii) 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 partyin excess of $75,000 (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 (vii) all contracts for the employment transfer or license of any officer patent, copyright, trade secret or employeeother proprietary right to or from the Company or any of its Subsidiaries (other than licenses arising from the purchase of "off the shelf" or other standard products); or (iii) provisions restricting the development, manufacture or distribution of the Company's or any of its Subsidiaries products or services; or (viiv) all material consulting agreements, (vii) any guarantees indemnification 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 Subsidiaries with respect to infringements of its Subsidiaries from engaging in any line of business or competing with any Person or in any geographical area, and (xi) all contracts restricting the payment of interest upon, or the redemption or conversion of, the Notes (collectively, the "Contracts")proprietary rights. (b) Except as set forth on Schedule 3.7(b) to since June 29, 2004 (the Disclosure Letter"Balance Sheet Date"), neither the Company nor any of its Subsidiaries ishas: (i) declared or paid any dividends, nor or authorized or made any distribution upon or with respect to any class or series of its capital stock; (ii) incurred any indebtedness for money borrowed or any other liabilities (other than ordinary course obligations) individually in excess of $75,000 or, in the case of indebtedness and/or liabilities individually less than $75,000, in excess of $100,000 in the aggregate; (iii) made any loans or advances to any person or entity not in excess, individually or in the aggregate, of $100,000, other than ordinary 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) For the purposes of subsections (a) and (b) above, all indebtedness, liabilities, agreements, understandings, instruments, contracts and 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) 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 knowledge is any other party to any Contract, in default underassets. The Company maintains internal control over financial reporting ("Financial Reporting Controls") designed by, or in breach or violation under the supervision 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 knowledgeprincipal executive and principal financial officers, any and effected by the Company's board of directors, management, and other party under any Contract. Other than Contracts which have terminated or expired personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with their termsgenerally accepted accounting principles ("GAAP"), each of the Contracts is in full force and effect and including that: (assuming due execution and delivery by the counterparties theretoi) is a legal, valid and binding obligation of the Company or its Subsidiary (as applicable) enforceable against the Company or such Subsidiary transactions are executed in accordance with its terms management's general or specific authorization; (subject 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 effects Company's receipts and expenditures are being made only in accordance with authorizations of bankruptcythe 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, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating appropriate action is taken with respect to or affecting creditors' rights generally, general equitable principles any differences. (whether considered f) There is no material weakness in a proceeding in equity or at law) and an implied covenant of good faith and fair dealing) and neither the Company nor any of its Subsidiaries has the Company's Disclosure Controls or Financial Reporting Controls that is required to be disclosed in any knowledge that any Contract is not a legal, valid and binding obligation of the other parties theretoExchange Act Filings, except as so disclosed.

Agreements; Action. (a) Attached hereto as Schedule 3.7(a) Except for agreements explicitly contemplated hereby and agreements between the Company and its employees with respect 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 sale of the Company's and its Subsidiaries' contractsCommon Stock, there are no agreements, leases understandings or other instruments to which proposed transactions between the Company or and any of its Subsidiaries is a party or by which the Companyofficers, its Subsidiaries or its properties are bounddirectors, which involve payments by or to a Company or its Subsidiaries during any fiscal year of more than $250,000, (iii) 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 affiliates 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 any Person or in any geographical area, and (xi) all contracts restricting the payment of interest upon, or the redemption or conversion of, the Notes (collectively, the "Contracts")affiliate thereof. (b) Except as set forth on Schedule 3.7(b) There are no agreements, understandings, instruments, contracts, proposed transactions, judgments, orders, writs or decrees to the Disclosure Letter, neither which the Company nor is a party or to its knowledge by which it is bound which may involve (i) obligations (contingent or otherwise) of, or payments to, the Company in excess of fifty thousand dollars ($50,000) (other than obligations of, or payments to, the Company arising from agreements entered into in the ordinary course of business or to support research being conducted at the University of California, San Diego), or (ii) the license of any patent, copyright, trade secret or other proprietary right to or from the Company (other than licenses arising from the purchase of "off the shelf" or other standard products) and licenses of certain patents from the Regents of the University of California, or (iii) provisions restricting or affecting the development, manufacture or distribution of the Company's products or services, or (iv) indemnification by the Company with respect to infringements of proprietary rights (other than indemnification obligations arising from purchase or sale agreements entered into in the ordinary course of business). (c) The Company has not (i) 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 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 one hundred thousand dollars ($100,000) and in excess of two hundred fifty thousand dollars ($250,000) in the aggregate, (iii) made any loans or advances to any person, other than ordinary advances for travel expenses, or (iv) sold, exchanged or otherwise disposed of any of its Subsidiaries isassets or rights, nor to other than the Company's knowledge is any other party to any Contractsale of its inventory in the ordinary course of business. (d) For the purposes of subsections (b) and (c) above, in default underall indebtedness, liabilities, agreements, understandings, instruments, contracts and proposed transactions involving the same person or in breach entity (including persons 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 entities the Company or, has reason to believe are affiliated therewith) shall be aggregated for the Company's knowledge, purpose of meeting the individual minimum dollar amounts of such subsections. (e) The Company has not engaged in any other party under discussion (i) with any Contract. Other than Contracts which have terminated representative of any corporation or expired in accordance with their terms, each of corporations regarding the Contracts is in full force and effect and (assuming due execution and delivery by the counterparties thereto) is a legal, valid and binding obligation consolidation or merger of the Company with or its Subsidiary into any such corporation or corporations, (as applicableii) enforceable against with 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 a transaction or series of related transactions in which more than fifty percent (50%) of the voting power of the Company is disposed of, or such Subsidiary in accordance with its terms (subject to the effects iii) regarding any other form of bankruptcyacquisition, insolvencyliquidation, fraudulent conveyance, reorganization, moratorium and other similar laws relating to dissolution or affecting creditors' rights generally, general equitable principles (whether considered in a proceeding in equity or at law) and an implied covenant of good faith and fair dealing) and neither the Company nor any of its Subsidiaries has any knowledge that any Contract is not a legal, valid and binding obligation winding up of the other parties theretoCompany.

Agreements; Action. Except as set forth on Schedule 4.6 or as disclosed in any Exchange Act Filings: (a) 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 SECthere are no agreements, (ii) all of the Company's and its Subsidiaries' understandings, instruments, contracts, agreementsproposed transactions, leases judgments, orders, writs or other instruments decrees to which the Company or any of its Subsidiaries is a party or by which the Companyit is bound which may involve: (i) obligations (contingent or otherwise) of, its Subsidiaries or its properties are boundpayments to, which involve payments by or to a Company or its Subsidiaries during any fiscal year of more than $250,000, (iii) 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 partyin excess of $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 (vii) all contracts for the employment transfer or license of any officer patent, copyright, trade secret or employeeother proprietary right to or from the Company or any of its Subsidiaries (other than licenses arising from the purchase of “off the shelf” or other standard products); or (iii) provisions restricting the development, manufacture or distribution of the Company’s or any of its Subsidiaries products or services; or (viiv) all material consulting agreements, (vii) any guarantees indemnification 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 Subsidiaries with respect to infringements of its Subsidiaries from engaging in any line of business or competing with any Person or in any geographical area, and (xi) all contracts restricting the payment of interest upon, or the redemption or conversion of, the Notes (collectively, the "Contracts")proprietary rights. (b) Except as set forth on Schedule 3.7(b) to Since June 30, 2006 (the Disclosure Letter“Balance Sheet Date”), neither the Company nor any of its Subsidiaries ishas: (i) declared or paid any dividends, nor or authorized or made any distribution upon or with respect to the Company's knowledge is any class or series of its capital stock and/or membership interests; (ii) incurred any indebtedness for money borrowed or any other party liabilities (other than ordinary course obligations) individually in excess of $50,000 or, in the case of indebtedness and/or liabilities individually less than $50,000, in excess of $100,000 in the aggregate; (iii) made any loans or advances to any Contractperson or entity not in excess, in default under, individually or in breach the aggregate, of $100,000, other than ordinary course advances for travel expenses; or violation of(iv) sold, exchanged or otherwise disposed of any Contract of its assets or rights, other than the sale of its inventory in the ordinary course of business. (c) For the purposes of subsections (a) and no event (b) above, all indebtedness, liabilities, agreements, understandings, instruments, contracts and proposed transactions involving the same person or entity (including persons or entities the Company or any Subsidiary of the Company has occurred which, with reason to believe are affiliated therewith) shall be aggregated for the giving purpose of notice or passage meeting the individual minimum dollar amounts of time or both would constitute a default such subsections. (d) The Company maintains disclosure controls and procedures (“Disclosure Controls”) designed to ensure that information required to be disclosed by the Company orin 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) 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 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 Company's knowledge, any other party under any Contract. Other than Contracts which have terminated or expired reliability of financial reporting and the preparation of financial statements for external purposes in accordance with their termsgenerally accepted accounting principles (“GAAP”), each of the Contracts is in full force and effect and including that: (assuming due execution and delivery by the counterparties theretoi) is a legal, valid and binding obligation of the Company or its Subsidiary (as applicable) enforceable against the Company or such Subsidiary transactions are executed in accordance with its terms management’s general or specific authorization; (subject 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 effects Company’s receipts and expenditures are being made only in accordance with authorizations of bankruptcythe 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, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating appropriate action is taken with respect to or affecting creditors' rights generally, general equitable principles any differences. (whether considered f) There is no weakness in a proceeding in equity or at law) and an implied covenant of good faith and fair dealing) and neither the Company nor any of its Subsidiaries has the Company’s Disclosure Controls or Financial Reporting Controls that is required to be disclosed in any knowledge that any Contract is not a legal, valid and binding obligation of the other parties theretoExchange Act Filings, except as so disclosed.

Agreements; Action. (a) 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 its Subsidiaries' contracts, agreements, leases or other instruments to which the Company or 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 its Subsidiaries during any fiscal year of more than $250,000, (iii) 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 any Person or in any geographical area, and (xi) all contracts restricting the payment of interest upon, or the redemption or conversion of, the Notes (collectively, the "Contracts"). (b) Except as set forth on Schedule 3.7(b12(f) or as disclosed in any Exchange Act Filings: (i) There are no agreements, understandings, instruments, contracts, proposed transactions, judgments, orders, writs or decrees to which Company is a party or to its knowledge by which it is bound which may involve: (i) obligations (contingent or otherwise) of, or payments to, Company in excess of $50,000 (other than obligations of, or payments to, Company arising from purchase or sale agreements entered into in the Disclosure Letterordinary course of business); or (ii) the transfer or license of any patent, neither copyright, trade secret or other proprietary right to or from Company (other than licenses arising from the purchase of "off the shelf" or other standard products); or (iii) provisions restricting the development, manufacture or distribution of Company's products or services; or (iv) indemnification by Company nor with respect to infringements of proprietary rights. (ii) Since June 30, 2004, Company has not: (i) 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 indebtedness for money borrowed or any other liabilities (other than ordinary course obligations) individually in excess of $50,000 or, in the case of indebtedness and/or liabilities individually less than $50,000, in excess of $100,000 in the aggregate; (iii) made any loans or advances to any person not in excess, individually or in the aggregate, of $100,000, other than ordinary advances for travel expenses; or (iv) sold, exchanged or otherwise disposed of any of its Subsidiaries isassets or rights, nor to other than the Company's knowledge is any other party to any Contract, sale of its inventory in default under, or in breach or violation of, any Contract and no event has occurred which, with the giving ordinary course of notice or passage business. (iii) For the purposes 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 Contracts is in full force and effect subsections (i) and (assuming due execution ii) of this Section 12(f) above, all indebtedness, liabilities, agreements, understandings, instruments, contracts and delivery by proposed transactions involving the counterparties theretosame person or entity (including persons or entities Company has reason to believe are affiliated therewith) is a legal, valid and binding obligation shall be aggregated for the purpose of meeting the Company or its Subsidiary (as applicable) enforceable against the Company or individual minimum dollar amounts of such Subsidiary in accordance with its terms (subject 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) and an implied covenant of good faith and fair dealing) and neither the Company nor any of its Subsidiaries has any knowledge that any Contract is not a legal, valid and binding obligation of the other parties theretosubsections.

Agreements; Action. (a) Attached hereto as Schedule 3.7(a) Except for the documents listed in the Exhibit Index to the Disclosure Letter is a list of (i) all "material contracts" within the meaning of Item 601 of Regulation SAnnual Report on Form 10-K of for the SECyear ended December 31, (ii) all of the Company's and its Subsidiaries' contracts2008, 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 referred to or contemplated herein or therein, there are no material agreements, leases understandings or other instruments to which proposed transactions between the Company or and any of its Subsidiaries is a party or by which the Companyofficers, its Subsidiaries or its properties are bounddirectors, which involve payments by or to a Company or its Subsidiaries during any fiscal year of more than $250,000, (iii) 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 affiliates 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 any Person or in any geographical area, and (xi) all contracts restricting the payment of interest upon, or the redemption or conversion of, the Notes (collectively, the "Contracts")affiliate thereof. (b) Except as set forth on Schedule 3.7(b) to Since the Disclosure LetterStatement Date, neither the Company nor has not (i) 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 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 $50,000 or, in the case of indebtedness and/or liabilities individually less than $50,000, in excess of $200,000 in the aggregate, (iii) made any loans or advances to any person, other than ordinary advances for travel expenses, or (iv) sold, exchanged or otherwise disposed of any of its Subsidiaries isassets or rights, nor other than the sale of its inventory in the ordinary course of business. For the purposes of this subsection, all indebtedness, liabilities, agreements, understandings, instruments, contracts and 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 Company's knowledge purpose of meeting the individual minimum dollar amounts of such subsections. (c) Other than as described in the Schedule of Exceptions, the Company is not under any other party binding obligation to any Contract, third party (other than obligations to keep information or discussions confidential) as a result of any discussion or negotiation undertaken in default under, the past twelve months relating to (i) the consolidation or 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 Contracts is in full force and effect and (assuming due execution and delivery by the counterparties thereto) is a legal, valid and binding obligation merger of the Company with or its Subsidiary into any such corporation or corporations, (as applicableii) enforceable against the sale, conveyance, or disposition of all or substantially all of the assets of the Company, or a transaction or series of related transactions in which more than 50% of the voting power of the Company is disposed of, or such Subsidiary in accordance with its terms (subject to the effects iii) any other form of bankruptcyacquisition, insolvencyliquidation, fraudulent conveyancedissolution, reorganizationor winding up, 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) and an implied covenant of good faith and fair dealing) and neither the Company nor any of its Subsidiaries has any knowledge that any Contract is not a legal, valid and binding obligation of the other parties theretoCompany.

Agreements; Action. (a) Attached hereto as Schedule 3.7(a) Except for agreements explicitly contemplated hereby and agreements between the Company and its employees with respect 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 sale of the Company's and its Subsidiaries' contractsCommon Stock, there are no agreements, leases understandings or other instruments to which proposed transactions between the Company or and any of its Subsidiaries is a party or by which the Companyofficers, its Subsidiaries or its properties are bounddirectors, which involve payments by or to a Company or its Subsidiaries during any fiscal year of more than $250,000, (iii) 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 affiliates 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 any Person or in any geographical area, and (xi) all contracts restricting the payment of interest upon, or the redemption or conversion of, the Notes (collectively, the "Contracts")affiliate thereof. (b) Except as set forth on Schedule 3.7(b) There are no agreements, understandings, instruments, contracts, proposed transactions, judgments, orders, writs or decrees to the Disclosure Letter, neither which the Company nor is a party or to its knowledge by which it is bound which may involve (i) obligations (contingent or otherwise) of, or payments to, the Company in excess of $50,000 (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) the transfer or license of any patent, copyright, trade secret or other proprietary right to or from the Company (other than licenses arising from the purchase of "off the shelf" or other standard products), or (iii) 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 ordinary course of business). (c) The Company has not (i) 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 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 $50,000 or, in the case of indebtedness and/or liabilities individually less than $50,000, in excess of $100,000 in the aggregate, (iii) made any loans or advances to any person, other than ordinary advances for travel expenses, or (iv) sold, exchanged or otherwise disposed of any of its Subsidiaries isassets or rights, nor to other than the Company's knowledge is any other party to any Contractsale of its inventory in the ordinary course of business. (d) For the purposes of subsections (b) and (c) above, in default underall indebtedness, liabilities, agreements, understandings, instruments, contracts and proposed transactions involving the same person or in breach entity (including persons 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 entities the Company or, has reason to believe are affiliated therewith) shall be aggregated for the Company's knowledge, any other party under any Contract. Other than Contracts which have terminated or expired in accordance with their terms, each purpose of meeting the Contracts is in full force and effect and (assuming due execution and delivery by the counterparties thereto) is a legal, valid and binding obligation individual minimum dollar amounts of the Company or its Subsidiary (as applicable) enforceable against the Company or such Subsidiary in accordance with its terms (subject 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) and an implied covenant of good faith and fair dealing) and neither the Company nor any of its Subsidiaries has any knowledge that any Contract is not a legal, valid and binding obligation of the other parties theretosubsections.

Agreements; Action. (a) Attached hereto as Schedule 3.7(a) to Except for agreements explicitly contemplated hereby, by the Disclosure Letter is a list of (i) all "material contracts" within Investors' Rights Agreement, the meaning of Item 601 of Regulation SCo-K of Sale Agreement, the SECStockholders' Agreement, (ii) all of any Ancillary Agreements and that certain Stockholders' Agreement dated April 18, 1995 among the Company's , the Series A Preferred Stockholders and its Subsidiaries' contractsthe other parties named therein, there are no agreements, leases understandings or other instruments to which proposed transactions between the Company or and any of its Subsidiaries is a party or by which the Companyofficers, its Subsidiaries or its properties are bounddirectors, which involve payments by or to a Company or its Subsidiaries during any fiscal year of more than $250,000affiliates, (iii) 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 any Person or in any geographical area, and (xi) all contracts restricting the payment of interest upon, or the redemption or conversion of, the Notes (collectively, the "Contracts")affiliate thereof. (b) Except as set forth The Company does not have any contract, agreement, lease, commitment or proposed transaction, written or oral, absolute or contingent, other than (i) contracts for the purchase of supplies and services that were entered into in the ordinary course of business and that do not involve more than $50,000, and do not extend for more than one (1) year beyond the date hereof, (ii) sales contracts entered into in the ordinary course of business, and (iii) contracts terminable at will by the Company on Schedule 3.7(bno more than thirty (30) days notice without cost or liability to the Disclosure LetterCompany and that do not involve any employment or consulting arrangement and are not material to the conduct of the Company's business. For the purpose of this Section, neither employment and consulting contracts and contracts with labor unions, and license agreements and any other agreements relating to the acquisition or disposition of the Company's technology, shall not be considered to be contracts entered into in the ordinary course of business. (c) The Company nor has not (i) 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 indebtedness for money borrowed or any other liabilities individually in excess of $50,000 or, in the case of indebtedness and/or liabilities individually less than $50,000, in excess of $150,000 in the aggregate, (iii) made any loans or advances to any person, other than ordinary advances for travel expenses, or (iv) sold, exchanged or otherwise disposed of any of its Subsidiaries isassets or rights, nor to other than the Company's knowledge is any other party to any Contractsale of its inventory in the ordinary course of business. (d) For the purposes of subsections (b) and (c) above, in default underall indebtedness, liabilities, agreements, understandings, instruments, contracts and proposed transactions involving the same person or in breach entity (including persons 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 entities the Company or, has reason to believe are affiliated therewith) shall be aggregated for the Company's knowledge, any other party under any Contract. Other than Contracts which have terminated or expired in accordance with their terms, each purpose of meeting the Contracts is in full force and effect and (assuming due execution and delivery by the counterparties thereto) is a legal, valid and binding obligation individual minimum dollar amounts of the Company or its Subsidiary (as applicable) enforceable against the Company or such Subsidiary in accordance with its terms (subject 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) and an implied covenant of good faith and fair dealing) and neither the Company nor any of its Subsidiaries has any knowledge that any Contract is not a legal, valid and binding obligation of the other parties theretosubsections.

Agreements; Action. (a) Attached hereto Except as set forth on Schedule 3.7(a) to the Disclosure Letter is a list of 12(f): (i) all "material contracts" within the meaning of Item 601 of Regulation S-K of the SECThere are no agreements, (ii) all of the Company's and its Subsidiaries' understandings, instruments, contracts, agreementsproposed transactions, leases judgments, orders, writs or other instruments decrees to which the Company it or any of its Subsidiaries is a party or to its knowledge by which the Companyit is bound which may involve: (i) obligations (contingent or otherwise) of, its Subsidiaries or its properties are boundpayments to, which involve payments by or to a Company or its Subsidiaries during any fiscal year of more than $250,000, (iii) 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 it or any of its Subsidiaries is a partyin excess of $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 (vii) all contracts for the employment transfer or license of any officer patent, copyright, trade secret or employeeother proprietary right to or from it (other than licenses arising from the purchase of “off the shelf” or other standard products); or (iii) provisions restricting the development, (vi) all material consulting agreements, (vii) any guarantees by the Company manufacture or distribution of its or any of its Subsidiaries, ’ products or services; or (viiiiv) all material distributor and sales agency agreements, (ix) all IP Contracts (as defined in Section 3.11), (x) all contracts restricting the Company indemnification by it or any of its Subsidiaries from engaging in any line with respect to infringements of business or competing with any Person or in any geographical area, and (xi) all contracts restricting the payment of interest upon, or the redemption or conversion of, the Notes (collectively, the "Contracts")proprietary rights. (bii) Except as set forth on Schedule 3.7(bSince December 31, 2005 (the “Balance Sheet Date”) to the Disclosure Letter, neither the Company it nor any of its Subsidiaries ishas: (i) declared or paid any dividends, nor or authorized or made any distribution upon or with respect to the Company's knowledge is any class or series of its capital stock; (ii) incurred any indebtedness for money borrowed or any other party liabilities (other than ordinary course obligations) individually in excess of $50,000 or, in the case of indebtedness and/or liabilities individually less than $50,000, in excess of $100,000 in the aggregate; (iii) made any loans or advances to any ContractPerson not in excess, individually or in the aggregate, of $100,000, other than 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. Security and Purchase Agreement (iii) For the purposes of subsections (i) and (ii) of this Section 12(f), all indebtedness, liabilities, agreements, understandings, instruments, contracts and proposed transactions involving the same Person (including Persons it or 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. (iv) The Parent makes and keeps books, records, and accounts, that, in default underreasonable 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 in breach or violation under the supervision of, any Contract its principal executive and no event has occurred whichprincipal financial officers, with the giving and effected by its board of notice or passage of time or both would constitute a default by the Company ordirectors, management, and other personnel, to provide reasonable assurance regarding the Company's knowledge, any other party under any Contract. Other than Contracts which have terminated or expired reliability of financial reporting and the preparation of financial statements for external purposes in accordance with their termsGAAP, each of the Contracts is in full force and effect and including that: (assuming due execution and delivery by the counterparties thereto1) is a legal, valid and binding obligation of the Company or its Subsidiary (as applicable) enforceable against the Company or such Subsidiary transactions are executed in accordance with its terms management’s general or specific authorization; (subject to the effects of bankruptcy2) unauthorized acquisition, insolvencyuse, 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) and an implied covenant of good faith and fair dealing) and neither the Company nor any of its Subsidiaries has any knowledge that any Contract is not a legal, valid and binding obligation disposition of the other parties theretoParent’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.

Agreements; Action. (a) 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 its Subsidiaries' contracts, There are no agreements, leases understandings or other instruments to which proposed transactions between the Company or and any of its Subsidiaries is a party directors, employees, contractors or by which the Company, its Subsidiaries or its properties are bound, which involve payments by or to a Company or its Subsidiaries during any fiscal year of more than $250,000, (iii) 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 consultants that provide for money borrowed and all such instruments or agreements other than for borrowed money representing payment obligations compensation in excess 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 any Person or in any geographical area, and (xi) all contracts restricting the payment of interest upon, or the redemption or conversion of, the Notes (collectively, the "Contracts")350,000. (b) Except as set forth on Schedule 3.7(bThere are no agreements, understandings, instruments, contracts, proposed transactions, judgments, orders, writs or decrees to which the Company is a party, or to its Knowledge, by which it is bound, which may involve (i) future obligations (contingent or otherwise) of, or payments to, the Company in excess of $250,000, or (ii) the transfer or license of any patent, copyright, trade secret or other proprietary right to or from the Company (other than licenses to the Disclosure LetterCompany of “off the shelf” software or other standard products), neither 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 nor with respect to infringements of proprietary rights. (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 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 $250,000 or, in the case of indebtedness and/or liabilities individually less than $250,000, in excess of $250,000 in the aggregate, (iii) made any loans or advances to any person, other than ordinary advances for travel expenses, or (iv) sold, exchanged or otherwise disposed of any of its Subsidiaries isassets or rights. (d) For the purposes of subsections (b) and (c) above, nor to all indebtedness, liabilities, agreements, understandings, instruments, contracts and proposed transactions involving the Company's knowledge is any other party to any Contract, in default under, same person or in breach entity (including persons 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 entities the Company or, has reason to believe are affiliated therewith) shall be aggregated for the Company's knowledge, any other party under any Contract. Other than Contracts which have terminated or expired in accordance with their terms, each purpose of meeting the Contracts is in full force and effect and individual minimum dollar amounts of such subsections. (assuming due execution and delivery by the counterparties theretoe) is a legal, valid and binding obligation of the The Company or its Subsidiary (as applicable) enforceable against the Company or such Subsidiary in accordance with its terms (subject 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) and an implied covenant of good faith and fair dealing) and neither the Company nor any of its Subsidiaries has any knowledge that any Contract is not a legal, valid and binding obligation guarantor or indemnitor of the any indebtedness of any other parties theretoperson.

Agreements; Action. (aExcept as set forth on SCHEDULE 12(F) Attached hereto or as Schedule 3.7(a) to the Disclosure Letter is a list of disclosed in any Exchange Act Filings: (i) all "material contracts" within the meaning of Item 601 of Regulation S-K of the SECThere are no agreements, (ii) all of the Company's and its Subsidiaries' understandings, instruments, contracts, agreementsproposed transactions, leases judgments, orders, writs or other instruments decrees to which the Company it or any of its Subsidiaries is a party or to its knowledge by which the Companyit is bound which may involve: (i) obligations (contingent or otherwise) of, its Subsidiaries or its properties are boundpayments to, which involve payments by or to a Company or its Subsidiaries during any fiscal year of more than $250,000, (iii) 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 it or any of its Subsidiaries is a partyin excess of US$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 (vii) all contracts for the employment transfer or license of any officer patent, copyright, trade secret or employeeother proprietary right to or from it (other than licenses arising from the purchase of "off the shelf" or other standard products); or (iii) provisions restricting the development, (vi) all material consulting agreements, (vii) any guarantees by the Company manufacture or distribution of its or any of its Subsidiaries, ' products or services; or (viiiiv) all material distributor and sales agency agreements, (ix) all IP Contracts (as defined in Section 3.11), (x) all contracts restricting the Company indemnification by it or any of its Subsidiaries from engaging in any line with respect to infringements of business or competing with any Person or in any geographical area, and (xi) all contracts restricting the payment of interest upon, or the redemption or conversion of, the Notes (collectively, the "Contracts")proprietary rights. (bii) Except as set forth on Schedule 3.7(bSince December 31, 2004 (the "BALANCE SHEET DATE") to the Disclosure Letter, neither the Company it nor any of its Subsidiaries ishas: (i) declared or paid any dividends, nor or authorized or made any distribution upon or with respect to the Company's knowledge is any class or series of its capital stock; (ii) incurred any indebtedness for money borrowed or any other party liabilities (other than ordinary course obligations) individually in excess of US$50,000 or, in the case of indebtedness and/or liabilities individually less than US$50,000, in excess of US$100,000 in the aggregate; (iii) made any loans or advances to any ContractPerson not in excess, individually or in the aggregate, of US$100,000, other than 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. (iii) For the purposes of subsections (i) and (ii) of this Section 12(f), all indebtedness, liabilities, agreements, understandings, instruments, contracts and proposed transactions involving the same Person (including Persons it or 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. (iv) 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 and under the Securities Act (Ontario) (if any) is recorded, processed, summarized, and reported, within the time periods specified in 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 default underreasonable 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 in breach or violation under the supervision of, any Contract its principal executive and no event has occurred whichprincipal financial officers, with the giving and effected by its board of notice or passage of time or both would constitute a default by the Company ordirectors, management, and other personnel, to provide reasonable assurance regarding the Company's knowledge, any other party under any Contract. Other than Contracts which have terminated or expired reliability of financial reporting and the preparation of financial statements for external purposes in accordance with their termsGAAP, each of the Contracts is in full force and effect and including that: (assuming due execution and delivery by the counterparties thereto1) is a legal, valid and binding obligation of the Company or its Subsidiary (as applicable) enforceable against the Company or such Subsidiary 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 terms receipts and expenditures are being made only in accordance with authorizations of the Parent's management and board of directors; (subject 4) transactions are recorded as necessary to maintain accountability for assets; and (5) the effects of bankruptcyrecorded accountability for assets is compared with the existing assets at reasonable intervals, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating appropriate action is taken with respect to or affecting creditors' rights generally, general equitable principles any differences. (whether considered vi) There is no weakness in a proceeding in equity or at law) and an implied covenant of good faith and fair dealing) and neither the Company nor any of its Subsidiaries has Disclosure Controls or Financial Reporting Controls that is required to be disclosed in any knowledge that any Contract is not a legal, valid and binding obligation of the other parties theretoExchange Act Filings, except as so disclosed.

Agreements; Action. Except as disclosed in any Exchange Act Filings: (a) 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 SECthere are no agreements, (ii) all of the Company's and its Subsidiaries' understandings, instruments, contracts, agreementsproposed transactions, leases judgments, orders, writs or other instruments decrees to which the Company or any of its Subsidiaries the Subsidiary is a party or by which it is bound which may involve: (i) obligations (contingent or otherwise) of, or payments to, the CompanyCompany in excess of $20,000 (other than obligations of, its Subsidiaries or its properties are boundpayments to, which involve payments by the Company arising from purchase or sale agreements entered into in the ordinary course of business); or (ii) the transfer or license of any patent, copyright, trade secret or other proprietary right to a or from the Company (other than licenses arising from the purchase of "off the shelf" or its Subsidiaries during any fiscal year of more than $250,000, other standard products); or (iii) all restricting the development, manufacture or distribution 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 products or other debt instruments evidencing indebtedness for money borrowed and all such instruments services; 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 indemnification by the Company or any with respect to infringements 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 any Person or in any geographical area, and (xi) all contracts restricting the payment of interest upon, or the redemption or conversion of, the Notes (collectively, the "Contracts")proprietary rights. (b) Except as set forth on Schedule 3.7(b) to the Disclosure LetterSince June 30, 2005, neither the Company nor the Subsidiary has: (i) 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 indebtedness for money borrowed or any other liabilities (other than ordinary course obligations) individually in excess of $25,000 or, in the case of indebtedness and/or liabilities individually less than $25,000, in excess of $50,000 in the aggregate; (iii) made any loans or advances to any person not in excess, individually or in the aggregate, of $50,000, other than ordinary course advances for travel expenses; or (iv) sold, exchanged or otherwise disposed of any of its Subsidiaries isassets or rights, nor to other than the Company's knowledge is any other party to any Contractsale of its inventory in the ordinary course of business. (c) For the purposes of subsections (a) and (b) above, in default underall indebtedness, liabilities, agreements, understandings, instruments, contracts and proposed transactions involving the same person or in breach entity (including persons 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 entities the Company or, has reason to believe are affiliated therewith) shall be aggregated for the Company's knowledge, any other party under any Contract. Other than Contracts which have terminated or expired in accordance with their terms, each purpose of meeting the Contracts is in full force and effect and (assuming due execution and delivery by the counterparties thereto) is a legal, valid and binding obligation individual minimum dollar amounts of the Company or its Subsidiary (as applicable) enforceable against the Company or such Subsidiary in accordance with its terms (subject 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) and an implied covenant of good faith and fair dealing) and neither the Company nor any of its Subsidiaries has any knowledge that any Contract is not a legal, valid and binding obligation of the other parties theretosubsections.

Agreements; Action. (aExcept as set forth on Schedule 12(f) Attached hereto or as Schedule 3.7(a) to the Disclosure Letter is a list of disclosed in any Exchange Act Filings: (i) all "material contracts" within the meaning of Item 601 of Regulation S-K of the SECThere are no agreements, (ii) all of the Company's and its Subsidiaries' understandings, instruments, contracts, agreementsproposed transactions, leases judgments, orders, writs or other instruments decrees to which the Company it or any of its Subsidiaries is a party or to its knowledge by which the Companyit is bound which may involve: (i) obligations (contingent or otherwise) of, its Subsidiaries or its properties are boundpayments to, which involve payments by or to a Company or its Subsidiaries during any fiscal year of more than $250,000, (iii) 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 it or any of its Subsidiaries is a partyin excess of $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 (vii) all contracts for the employment transfer or license of any officer patent, copyright, trade secret or employeeother proprietary right to or from it (other than licenses arising from the purchase of “off the shelf” or other standard products); or (iii) provisions restricting the development, (vi) all material consulting agreements, (vii) any guarantees by the Company manufacture or distribution of its or any of its Subsidiaries, ’ products or services; or (viiiiv) all material distributor and sales agency agreements, (ix) all IP Contracts (as defined in Section 3.11), (x) all contracts restricting the Company indemnification by it or any of its Subsidiaries from engaging in any line with respect to infringements of business or competing with any Person or in any geographical area, and (xi) all contracts restricting the payment of interest upon, or the redemption or conversion of, the Notes (collectively, the "Contracts")proprietary rights. (bii) Except as set forth on Schedule 3.7(bSince June 30, 2005 (the “Balance Sheet Date”) to the Disclosure Letter, neither the Company it nor any of its Subsidiaries ishas: (i) declared or paid any dividends, nor or authorized or made any distribution upon or with respect to the Company's knowledge is any class or series of its capital stock; (ii) incurred any indebtedness for money borrowed or any other party liabilities (other than ordinary course obligations) individually in excess of $50,000 or, in the case of indebtedness and/or liabilities individually less than $50,000, in excess of $100,000 in the aggregate; (iii) made any loans or advances to any ContractPerson not in excess, individually or in the aggregate, of $100,000, other than 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. (iii) For the purposes of subsections (i) and (ii) of this Section 12(f), all indebtedness, liabilities, agreements, understandings, instruments, contracts and proposed transactions involving the same Person (including Persons it or 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. (iv) 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 SEC. (v) The Parent makes and keeps books, records, and accounts, that, in default underreasonable 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 in breach or violation under the supervision of, any Contract its principal executive and no event has occurred whichprincipal financial officers, with the giving of notice or passage of time or both would constitute a default and effected by the Company orits management, and other personnel, to provide reasonable assurance regarding the Company's knowledge, any other party under any Contract. Other than Contracts which have terminated or expired reliability of financial reporting and the preparation of financial statements for external purposes in accordance with their termsGAAP, each of the Contracts is in full force and effect and including that: (assuming due execution and delivery by the counterparties thereto1) is a legal, valid and binding obligation of the Company or its Subsidiary (as applicable) enforceable against the Company or such Subsidiary 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 terms receipts and expenditures are being made only in accordance with authorizations of the Parent’s management and board of directors; (subject 4) transactions are recorded as necessary to maintain accountability for assets; and (5) the effects of bankruptcyrecorded accountability for assets is compared with the existing assets at reasonable intervals, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating appropriate action is taken with respect to or affecting creditors' rights generally, general equitable principles any differences. (whether considered vi) There is no weakness in a proceeding in equity or at law) and an implied covenant of good faith and fair dealing) and neither the Company nor any of its Subsidiaries has Disclosure Controls or Financial Reporting Controls that is required to be disclosed in any knowledge that any Contract is not a legal, valid and binding obligation of the other parties theretoExchange Act Filings, except as so disclosed.

Agreements; Action. (aExcept as set forth on Schedule 12(f) Attached hereto or as Schedule 3.7(a) to the Disclosure Letter is a list of disclosed in any Exchange Act Filings: (i) all "material contracts" within the meaning of Item 601 of Regulation S-K of the SECThere are no agreements, (ii) all of the Company's and its Subsidiaries' understandings, instruments, contracts, agreementsproposed transactions, leases judgments, orders, writs or other instruments decrees to which the Company it or any of its Subsidiaries is a party or to its knowledge by which the Companyit is bound which may involve: (i) obligations (contingent or otherwise) of, its Subsidiaries or its properties are boundpayments to, which involve payments by or to a Company or its Subsidiaries during any fiscal year of more than $250,000, (iii) 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 it or any of its Subsidiaries is a partyin excess of $50,000 (other than obligations of, or payments to, it or any of its Subsidiaries arising from purchase or sale agreements or agreements evidencing Purchase Money Indebtedness, in each case, entered into in the ordinary course of business); or (vii) all contracts for the employment transfer or license of any officer patent, copyright, trade secret or employeeother proprietary right to or from it (other than (x) licenses arising from the purchase of "off the shelf" or other standard products and (y) licenses of Intellectual Property from Avaya pursuant to reseller agreements entered into with Avaya which have been provided to Laurus); or (iii) provisions restricting the development, (vi) all material consulting agreements, (vii) any guarantees by the Company manufacture or distribution of its or any of its Subsidiaries, ' products or services other than restrictions contained in certain reseller agreements with Avaya which relate to the use of Avaya Intellectual Property; or (viiiiv) all material distributor and sales agency agreements, (ix) all IP Contracts (as defined in Section 3.11), (x) all contracts restricting the Company indemnification by it or any of its Subsidiaries from engaging in any line with respect to infringements of business or competing with any Person or in any geographical area, and (xi) all contracts restricting the payment of interest upon, or the redemption or conversion of, the Notes (collectively, the "Contracts")proprietary rights. (bii) Except as set forth on Schedule 3.7(bSince September 30, 2004 (the "Balance Sheet Date") to the Disclosure Letter, neither the Company it nor any of its Subsidiaries ishas: (i) declared or paid any dividends, nor or authorized or made any distribution upon or with respect to the Company's knowledge is any class or series of its capital stock; (ii) incurred any indebtedness for money borrowed or any other party liabilities (other than ordinary course obligations) individually in excess of $50,000 or, in the case of indebtedness and/or liabilities individually less than $50,000, in excess of $100,000 in the aggregate; (iii) made any loans or advances to any ContractPerson not in excess, individually or in the aggregate, of $100,000, other than 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 and/or disposition of outdated, surplus or worn out Equipment, so long as, in default undereach case, such sale or disposition is in the ordinary course of business. (iii) For the purposes of subsections (i) and (ii) of this Section 12(f), all indebtedness, liabilities, agreements, understandings, instruments, contracts and proposed transactions involving the same Person (including Persons it or 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. (iv) 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 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 in breach or violation under the supervision of, any Contract its principal executive and no event has occurred whichprincipal financial officers, with the giving and effected by its board of notice or passage of time or both would constitute a default by the Company ordirectors, management, and other personnel, to provide reasonable assurance regarding the Company's knowledge, any other party under any Contract. Other than Contracts which have terminated or expired reliability of financial reporting and the preparation of financial statements for external purposes in accordance with their termsGAAP, each of the Contracts is in full force and effect and including that: (assuming due execution and delivery by the counterparties thereto1) is a legal, valid and binding obligation of the Company or its Subsidiary (as applicable) enforceable against the Company or such Subsidiary 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 terms receipts and expenditures are being made only in accordance with authorizations of the Parent's management and board of directors; (subject 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. (vi) To the extent that the rules issued by the SEC implementing Section 404 of the Sarbanes-Oxley Act of 2002 are applicable to the effects of bankruptcyParent, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors' rights generally, general equitable principles (whether considered there axx xx xxxxxxxxes in a proceeding in equity or at law) and an implied covenant of good faith and fair dealing) and neither the Company nor any of its Subsidiaries has Disclosure Controls or Financial Reporting Controls that is required to be disclosed in any knowledge that any Contract is not a legal, valid and binding obligation of the other parties theretoExchange Act Filings, except as so disclosed.

Agreements; Action. Except as set forth on Schedule 4.6 or, in the case of TNEC, as disclosed in any Exchange Act Filing: (a) 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 SECThere are no agreements, (ii) all of the Company's and its Subsidiaries' understandings, instruments, contracts, agreementsproposed transactions, leases judgments, orders, writs or other instruments decrees to which the any Company or any of its Subsidiaries is a party or by which the Companyit is bound which may involve: (i) obligations (contingent or otherwise) of, its Subsidiaries or its properties are boundpayments to, which involve payments by or to a Company or its Subsidiaries during any fiscal year of more than $250,000, (iii) 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 partyin excess of $75,000 (other than obligations of, (v) all contracts for the employment of or payments to, 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 arising from engaging purchase or sale agreements entered into in the ordinary course of business); or (ii) the transfer or license of any line patent, copyright, trade secret or other proprietary right to or from any Company or any of business its Subsidiaries (other than licenses arising from the purchase of “off the shelf” or competing with any Person other standard products); or in any geographical area, and (xiiii) all contracts provisions restricting the payment development, manufacture or distribution of interest upon, any Company’s or the redemption any of its Subsidiaries products or conversion of, the Notes services; or (collectively, the "Contracts")iv) indemnification by any Company or any of its Subsidiaries with respect to infringements of proprietary rights. (b) Except Since its date of formation (with respect to ICF) and April 30, 2007 (with respect to TNEC) (as set forth on Schedule 3.7(b) applicable, with respect to such Company, the Disclosure Letter“Measurement Date”), neither the no Company nor any of its Subsidiaries ishas: (i) declared or paid any dividends, nor or authorized or made any distribution upon or with respect to the Company's knowledge is any class or series of its capital stock; (ii) incurred any indebtedness for money borrowed or any other party liabilities (other than ordinary course obligations) individually in excess of $75,000 or, in the case of indebtedness and/or liabilities individually less than $75,000, in excess of $75,000 in the aggregate; (iii) made any loans or advances to any Contractperson or entity not in excess, individually or in the aggregate, of $200,000, other than ordinary 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) For the purposes of subsections (a) and (b) above, all indebtedness, liabilities, agreements, understandings, instruments, contracts and proposed transactions involving the same person or entity (including persons or entities any Company or any Subsidiary of such 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) TNEC maintains disclosure controls and procedures (“Disclosure Controls”) designed to ensure that information required to be disclosed by TNEC 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) Each Company makes and keep books, records, and accounts, that, in default underreasonable detail, accurately and fairly reflect the transactions and dispositions of such Company’s assets. Each Company maintains internal control over financial reporting (“Financial Reporting Controls”) designed by, or in breach or violation under the supervision of, any Contract such Company’s principal executive and no event has occurred whichprincipal financial officers, with the giving and effected by such Company’s board of notice or passage of time or both would constitute a default by the Company ordirectors, management, and other personnel, to provide reasonable assurance regarding the Company's knowledge, any other party under any Contract. Other than Contracts which have terminated or expired reliability of financial reporting and the preparation of financial statements for external purposes in accordance with their termsgenerally accepted accounting principles (“GAAP”), each of the Contracts is in full force and effect and including that: (assuming due execution and delivery by the counterparties theretoi) is a legal, valid and binding obligation of the Company or its Subsidiary (as applicable) enforceable against the Company or such Subsidiary transactions are executed in accordance with its terms management’s general or specific authorization; (subject 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 effects of bankruptcyrecorded accountability for assets is compared with the existing assets at reasonable intervals, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating appropriate action is taken with respect to or affecting creditors' rights generally, general equitable principles any differences. (whether considered vi) there is no weakness in a proceeding in equity or at law) and an implied covenant of good faith and fair dealing) and neither the Company nor any of its Subsidiaries has TNEC’s Disclosure Controls or Financial Reporting Controls that is required to be disclosed in any knowledge that any Contract is not a legal, valid and binding obligation of the other parties theretoExchange Act Filings, except as so disclosed.

Agreements; Action. (aExcept as set forth on Schedule 12(f) Attached hereto or as Schedule 3.7(a) to the Disclosure Letter is a list of disclosed in any Exchange Act Filings: (i) all "material contracts" within the meaning of Item 601 of Regulation S-K of the SECThere are no agreements, (ii) all of the Company's and its Subsidiaries' understandings, instruments, contracts, agreementsproposed transactions, leases judgments, orders, writs or other instruments decrees to which the Company it or any of its Subsidiaries is a party or to its knowledge by which the Companyit is bound which may involve: (i) obligations (contingent or otherwise) of, its Subsidiaries or its properties are boundpayments to, which involve payments by or to a Company or its Subsidiaries during any fiscal year of more than $250,000, (iii) 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 it or any of its Subsidiaries is a partyin excess of $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 (vii) all contracts for the employment transfer or license of any officer patent, copyright, trade secret or employeeother proprietary right to or from it (other than licenses arising from the purchase of “off the shelf” or other standard products); or (iii) provisions restricting the development, (vi) all material consulting agreements, (vii) any guarantees by the Company manufacture or distribution of its or any of its Subsidiaries, ’ products or services; or (viiiiv) all material distributor and sales agency agreements, (ix) all IP Contracts (as defined in Section 3.11), (x) all contracts restricting the Company indemnification by it or any of its Subsidiaries from engaging in any line with respect to infringements of business or competing with any Person or in any geographical area, and (xi) all contracts restricting the payment of interest upon, or the redemption or conversion of, the Notes (collectively, the "Contracts")proprietary rights. (bii) Except as set forth on Schedule 3.7(bSince September 30, 2005 (the “Balance Sheet Date”) to the Disclosure Letter, neither the Company it nor any of its Subsidiaries ishas: (i) declared or paid any dividends, nor or authorized or made any distribution upon or with respect to the Company's knowledge is any class or series of its capital stock; (ii) incurred any indebtedness for money borrowed or any other party liabilities (other than ordinary course obligations) individually in excess of $50,000 or, in the case of indebtedness and/or liabilities individually less than $50,000, in excess of $100,000 in the aggregate; (iii) made any loans or advances to any ContractPerson not in excess, individually or in the aggregate, of $100,000, other than 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. (iii) For the purposes of subsections (i) and (ii) of this Section 12(f), all indebtedness, liabilities, agreements, understandings, instruments, contracts and proposed transactions involving the same Person (including Persons it or 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. (iv) 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 SEC. (v) The Parent makes and keeps books, records, and accounts, that, in default underreasonable 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 in breach or violation under the supervision of, any Contract its principal executive and no event has occurred whichprincipal financial officers, with the giving and effected by its board of notice or passage of time or both would constitute a default by the Company ordirectors, management, and other personnel, to provide reasonable assurance regarding the Company's knowledge, any other party under any Contract. Other than Contracts which have terminated or expired reliability of financial reporting and the preparation of financial statements for external purposes in accordance with their termsGAAP, each of the Contracts is in full force and effect and including that: (assuming due execution and delivery by the counterparties thereto1) is a legal, valid and binding obligation of the Company or its Subsidiary (as applicable) enforceable against the Company or such Subsidiary 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 terms receipts and expenditures are being made only in accordance with authorizations of the Parent’s management and board of directors; (subject 4) transactions are recorded as necessary to maintain accountability for assets; and (5) the effects of bankruptcyrecorded accountability for assets is compared with the existing assets at reasonable intervals, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating appropriate action is taken with respect to or affecting creditors' rights generally, general equitable principles any differences. (whether considered vi) There is no weakness in a proceeding in equity or at law) and an implied covenant of good faith and fair dealing) and neither the Company nor any of its Subsidiaries has Disclosure Controls or Financial Reporting Controls that is required to be disclosed in any knowledge that any Contract is not a legal, valid and binding obligation of the other parties theretoExchange Act Filings, except as so disclosed.

Agreements; Action. Except as set forth on Schedule 5.6 or as disclosed in any Exchange Act Filings: (a) 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 SECthere are no agreements, (ii) all of the Company's and its Subsidiaries' understandings, instruments, contracts, agreementsproposed transactions, leases judgments, orders, writs or other instruments decrees to which the Company or any of its Subsidiaries Borrower is a party or by which it is bound which may involve: (i) obligations (contingent or otherwise) of, or payments to, the CompanyBorrower in excess of $50,000 (other than obligations of, its Subsidiaries or its properties are boundpayments to, which involve payments by the Borrower arising from purchase or sale agreements entered into in the ordinary course of business); or (ii) the transfer or license of any patent, copyright, trade secret or other proprietary right to a Company or its Subsidiaries during any fiscal year from the Borrower (other than licenses arising from the purchase of more than $250,000, “off the shelf” or other standard products); or (iii) all provisions restricting the development, manufacture or distribution 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 the Borrower’s products or other debt instruments evidencing indebtedness for money borrowed and all such instruments services; 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 indemnification by the Company or any Borrower with respect to infringements 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 any Person or in any geographical area, and (xi) all contracts restricting the payment of interest upon, or the redemption or conversion of, the Notes (collectively, the "Contracts")proprietary rights. (b) Except as set forth on Schedule 3.7(bSince September 30, 2005 (the “Balance Sheet Date”), the Borrower has not: (i) 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 indebtedness for money borrowed or any other liabilities (other than ordinary course obligations) individually in excess of $50,000 or, in the Disclosure Lettercase of indebtedness and/or liabilities individually less than $50,000, neither in excess of $100,000 in the Company nor aggregate; (iii) made any loans or advances to any person or entity not in excess, individually or in the aggregate, of $100,000, other than ordinary course advances for travel expenses; or (iv) sold, exchanged or otherwise disposed of any of its Subsidiaries isassets or rights, nor to other than the Company's knowledge is any other party to any Contract, sale of its inventory in default under, or in breach or violation of, any Contract and no event has occurred which, with the giving ordinary course of notice or passage business. (c) For the purposes 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 Contracts is in full force and effect subsections (a) and (assuming due execution b) above, all indebtedness, liabilities, agreements, understandings, instruments, contracts and delivery by proposed transactions involving the counterparties theretosame person or entity (including persons or entities the Borrower has reason to believe are affiliated therewith) is a legal, valid and binding obligation shall be aggregated for the purpose of meeting the Company or its Subsidiary (as applicable) enforceable against the Company or individual minimum dollar amounts of such Subsidiary in accordance with its terms (subject 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) and an implied covenant of good faith and fair dealing) and neither the Company nor any of its Subsidiaries has any knowledge that any Contract is not a legal, valid and binding obligation of the other parties theretosubsections.

Agreements; Action. (a) Attached hereto To the Knowledge of Public Disclosure and Xxxx X. Xxxxxx and Xxxxxxx X. Xxxxxxx, and except as set forth in 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 SEC2.7, (ii) all of the Company's and its Subsidiaries' there are no agreements, understandings, instruments, contracts, agreementsproposed transactions, leases judgments, orders, writs or other instruments decrees to which the Company or any of its Subsidiaries Public Disclosure is a party or by is bound which may involve (i) obligations (contingent or otherwise) of, or payments to, Public Disclosure in excess of $10,000, or (ii) the Companylicense of any patent, its Subsidiaries copyright, trade secret or its properties are boundother proprietary right to or from Public Disclosure (other than licenses arising from the purchase of "off the shelf" or other standard products), which involve payments by or to a Company or its Subsidiaries during any fiscal year of more than $250,000, (iii) all provisions restricting or affecting the development, manufacture or distribution of CompanyPublic Disclosure'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 products or other debt instruments evidencing indebtedness for money borrowed and all such instruments services or agreements other than for borrowed money representing payment obligations of $250,000 or more, (iv) all material operating or capital leases for equipment indemnification by Public Disclosure with respect to which the Company or any infringements 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 any Person or in any geographical area, and (xi) all contracts restricting the payment of interest upon, or the redemption or conversion of, the Notes (collectively, the "Contracts")proprietary rights. (b) Except Public Disclosure has not (i) incurred 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 set forth on Schedule 3.7(bdisclosed in the Public Disclosure Financial Statements) individually in excess of $10,000 or, in excess of $15,000 in the aggregate, (ii) made any loans or advances to the Disclosure Letterany person, neither the Company nor other than ordinary advances for travel expenses or (iii) sold, exchanged or otherwise disposed of any of its Subsidiaries isassets or rights, nor to other than the Company's knowledge is any other party to any Contract, sale of its inventory in default under, or in breach or violation of, any Contract and no event has occurred which, with the giving Ordinary Course of notice or passage Business. (c) For the purposes 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 Contracts is in full force and effect subsections (a) and (assuming due execution b) above, all indebtedness, liabilities, agreements, understandings, instruments, contracts and delivery by proposed transactions involving the counterparties theretosame person or entity (including persons or entities Public Disclosure has reason to believe are affiliated therewith) is a legal, valid and binding obligation shall be aggregated for the purpose of meeting the Company or its Subsidiary (as applicable) enforceable against the Company or individual minimum dollar amounts of such Subsidiary in accordance with its terms (subject 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) and an implied covenant of good faith and fair dealing) and neither the Company nor any of its Subsidiaries has any knowledge that any Contract is not a legal, valid and binding obligation of the other parties theretosubsections.

Agreements; Action. (a) Attached hereto as Schedule 3.7(a) Except for agreements explicitly contemplated hereby and agreements between the Company and its employees with respect 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 sale of the Company's and its Subsidiaries' contracts’s Preferred Stock, there are no agreements, leases understandings or other instruments to which proposed transactions between the Company or and any of its Subsidiaries is a party or by which the Companyofficers, its Subsidiaries or its properties are bounddirectors, which involve payments by or to a Company or its Subsidiaries during any fiscal year of more than $250,000employees, (iii) 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 affiliates 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 any Person or in any geographical area, and (xi) all contracts restricting the payment of interest upon, or the redemption or conversion of, the Notes (collectively, the "Contracts")affiliate thereof. (b) Except as set forth on Schedule 3.7(b) There are no agreements, understandings, instruments, contracts, proposed transactions, judgments, orders, writs or decrees to the Disclosure Letter, neither which the Company nor is a party or to its knowledge by which it is bound which may involve (i) future obligations (contingent or otherwise) of, or payments to, the Company in excess of $50,000, or (ii) the transfer or license of any patent, copyright, trade secret or other proprietary right to or from the Company (other than licenses by the Company of “off the shelf” or other standard products), or (iii) provisions restricting the development, manufacture or distribution of the Company’s products or 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 ordinary course of business). (c) The Company has not (i) 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 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 $50,000 or, in the case of indebtedness and/or liabilities individually less than $50,000, in excess of $250,000 in the aggregate, (iii) made any loans or advances to any person, other than ordinary advances for travel expenses, or (iv) sold, exchanged or otherwise disposed of any of its Subsidiaries isassets or rights, nor 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, understandings, instruments, contracts and 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 Company's knowledge is purpose of meeting the individual minimum dollar amounts of such subsections. (e) Other than as disclosed in Section 5.7(e) of the Schedule of Exceptions, the Company has not engaged in the past three (3) months in any discussion (i) with any representative of any other party to any Contract, in default under, business or in breach businesses regarding the consolidation 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 Contracts is in full force and effect and (assuming due execution and delivery by the counterparties thereto) is a legal, valid and binding obligation merger of the Company with or its Subsidiary into any such other business or businesses, (as applicableii) enforceable against 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 assets of the Company, or a transaction or series of related transactions in which more than fifty percent (50%) of the voting power of the Company is disposed of, or such Subsidiary in accordance with its terms (subject to the effects iii) regarding any other form of bankruptcyacquisition, insolvencyliquidation, fraudulent conveyancedissolution or winding up, 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) and an implied covenant of good faith and fair dealing) and neither the Company nor any of its Subsidiaries has any knowledge that any Contract is not a legal, valid and binding obligation of the other parties theretoCompany.

Agreements; Action. (aExcept as set forth on Schedule 12(f) Attached hereto or as Schedule 3.7(a) to the Disclosure Letter is a list of disclosed in any Exchange Act Filings: (i) all "material contracts" within All of the meaning of agreements, understandings, instruments, contracts and proposed transactions, to which the Parent is a party or by which it is bound, that are required to be filed under Item 601 of Regulation S-K of SB promulgated under the Exchange Act have been so filed by the Parent with the SEC. All material judgments, (ii) all of the Company's and its Subsidiaries' contractsorders, agreements, leases writs or other instruments decrees to which the Company Parent is a party or to its knowledge by which it is bound, have been disclosed by the Parent on a current report on Form 8-K pursuant to the Exchange Act. Notwithstanding the foregoing, there are no agreements, understandings, instruments, contracts, proposed transactions, judgments, orders, writs or decrees to which it or any of its Subsidiaries is a party or to its knowledge by which it is bound which may involve: (i) the Companytransfer or license of any patent, copyright, trade secret or other proprietary right to or from it (other than licenses arising from the purchase of “off the shelf” or other standard products); (ii) provisions restricting the development, manufacture or distribution of its Subsidiaries or any of its properties are bound, which involve payments by Subsidiaries’ products or to a Company services; or its Subsidiaries during any fiscal year of more than $250,000, (iii) 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 indemnification by it or any of its Subsidiaries is a party, (v) all contracts for the employment with respect to infringements 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 any Person or in any geographical area, and (xi) all contracts restricting the payment of interest upon, or the redemption or conversion of, the Notes (collectively, the "Contracts")proprietary rights. (bii) Except as set forth on Schedule 3.7(b) to Since March 31, 2006 (the Disclosure Letter“Balance Sheet Date”), neither the Company it nor any of its Subsidiaries ishas: (i) declared or paid any dividends, nor or authorized or made any distribution upon or with respect to the Company's knowledge is any class or series of its capital stock; (ii) incurred any indebtedness for money borrowed or any other party liabilities (other than ordinary course obligations) individually in excess of $250,000 or, in the case of indebtedness and/or liabilities individually less than $50,000, in excess of $150,000 in the aggregate; (iii) made any loans or advances to any ContractPerson not in excess, individually or in the aggregate, of $100,000, other than 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. (iii) For the purposes of subsections (i) and (ii) of this Section 12(f), all indebtedness, liabilities, agreements, understandings, instruments, contracts and proposed transactions involving the same Person (including Persons it or 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. (iv) 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 SEC. (v) The Parent makes and keeps books, records, and accounts, that, in default underreasonable 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 in breach or violation under the supervision of, any Contract its principal executive and no event has occurred whichprincipal financial officers, with the giving and effected by its board of notice or passage of time or both would constitute a default by the Company ordirectors, management, and other personnel, to provide reasonable assurance regarding the Company's knowledge, any other party under any Contract. Other than Contracts which have terminated or expired reliability of financial reporting and the preparation of financial statements for external purposes in accordance with their termsGAAP, each of the Contracts is in full force and effect and including that: (assuming due execution and delivery by the counterparties thereto1) is a legal, valid and binding obligation of the Company or its Subsidiary (as applicable) enforceable against the Company or such Subsidiary transactions are executed in accordance with its terms management’s general or specific authorization; (subject to the effects of bankruptcy2) unauthorized acquisition, insolvencyuse, 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) and an implied covenant of good faith and fair dealing) and neither the Company nor any of its Subsidiaries has any knowledge that any Contract is not a legal, valid and binding obligation disposition of the other parties theretoParent’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.

Agreements; Action. Except as set forth on Schedule 4.6 or as disclosed in any Exchange Act Filings: (a) 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 SECthere are no agreements, (ii) all of the Company's and its Subsidiaries' understandings, instruments, contracts, agreementsproposed transactions, leases judgments, orders, writs or other instruments decrees to which the Company or any of its Subsidiaries is a party or to its knowledge by which the Companyit is bound which involves: (i) obligations (contingent or otherwise) of, its Subsidiaries or its properties are boundpayments to, which involve payments by or to a Company or its Subsidiaries during any fiscal year of more than $250,000, (iii) 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 partyin excess of $100,000 (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 (vii) all contracts for the employment transfer or license of any officer patent, copyright, trade secret or employeeother proprietary right to or from the Company or any of its Subsidiaries (other than licenses arising from the purchase of “off the shelf” or other standard products); or (iii) provisions restricting the development, manufacture or distribution of the Company’s or any of its Subsidiaries products or services; or (viiv) all material consulting agreements, (vii) any guarantees indemnification 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 Subsidiaries with respect to infringements of its Subsidiaries from engaging in any line of business or competing with any Person or in any geographical area, and (xi) all contracts restricting the payment of interest upon, or the redemption or conversion of, the Notes (collectively, the "Contracts")proprietary rights. (b) Except as set forth on Schedule 3.7(b) to Since September 30, 2005, (the Disclosure Letter“Balance Sheet Date”), neither the Company nor any of its Subsidiaries ishas: (i) declared or paid any dividends, nor or authorized or made any distribution upon or with respect to the Company's knowledge is any class or series of its capital stock; (ii) incurred any indebtedness for money borrowed or any other party liabilities (other than ordinary course obligations) individually in excess of $100,000 or, in the case of indebtedness and/or liabilities individually less than $100,000, in excess of $100,000 in the aggregate; (iii) made any loans or advances to any Contractperson or entity not in excess, in default under, individually or in breach the aggregate, of $100,000, other than ordinary course advances for travel expenses; or violation of(iv) sold, exchanged or otherwise disposed of any Contract of its assets or rights, other than the sale of its inventory in the ordinary course of business. (c) For the purposes of subsections (a) and no event (b) above, all indebtedness, liabilities, agreements, understandings, instruments, contracts and proposed transactions involving the same person or entity (including persons or entities the Company or any Subsidiary of the Company has occurred which, with reason to believe are affiliated therewith) shall be aggregated for the giving purpose of notice or passage meeting the individual minimum dollar amounts of time or both would constitute a default such subsections. (d) The Company maintains disclosure controls and procedures (“Disclosure Controls”) as required by the Securities and Exchange Commission (“SEC”) for companies the size of the Company designed to ensure that information required to be disclosed by the Company orin the reports that it files or submits under the Exchange Act is recorded, to processed, summarized, and reported, within the time periods specified in the rules and forms of the 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 knowledge, any other party under any Contract’s assets. Other than Contracts which have terminated or expired in accordance with their terms, each of the Contracts is in full force and effect and The Company maintains internal control over financial reporting (assuming due execution and delivery “Financial Reporting Controls”) as required by the counterparties thereto) is a legal, valid and binding obligation of the Company or its Subsidiary (as applicable) enforceable against the Company or such Subsidiary in accordance with its terms (subject 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) and an implied covenant of good faith and fair dealing) and neither the Company nor any SEC for entities of its Subsidiaries has any knowledge that any Contract is not a legal, valid and binding obligation of the other parties theretosize.

Agreements; Action. (a) Attached hereto as Schedule 3.7(aExcept for agreements explicitly contemplated hereby, there are no agreements, understandings or proposed transactions between the Company and any of its stockholders, directors, officers, affiliates, or any affiliate thereof, or between either Subsidiary and any of its members, stockholders, directors, officers, affiliates, or any affiliate thereof. (b) to the Disclosure Letter is a list of (i) all "material contracts" within the meaning of Item 601 of Regulation S-K of the SECThere are no agreements, (ii) all of the Company's and its Subsidiaries' understandings, instruments, contracts, agreementsproposed transactions, leases judgments, orders, writs or other instruments decrees to which the Company or any of its Subsidiaries is are a party or by which they are bound which may involve (i) obligations (contingent or otherwise) of the Company or Subsidiaries in excess of $25,000 (excluding net auction proceeds payable by the Company to customers and maintained in the Company's trust account or auction or other sale proceeds payable pursuant to the contracts set forth in Section 2.3(d) of the Disclosure Schedule), its or payments to the Company or Subsidiaries in excess of $50,000 (excluding gross auction revenues payable to the Company in connection with concluded auction sales), or (ii) the license of any patent, copyright, trade secret or other proprietary right to or from the Company or Subsidiaries or its properties are bound(iii) provisions restricting or affecting the development, which involve payments by manufacture or to a distribution of the Company or its Subsidiaries' products or services, or (iv) indemnification by the Company or Subsidiaries during with respect to infringement of proprietary rights. (c) The Company has not, except as expressly contemplated by this Agreement or disclosed in the financial statements delivered to the Investors or set forth in Section 2.10 of the Disclosure Schedule, (i) since December 31, 1998, authorized or made any fiscal year distribution upon or with respect to any class of more shares, (ii) incurred any outstanding indebtedness for money borrowed or any other outstanding fixed, noncontingent liabilities, other than in the ordinary course of business, individually in excess of $25,000 or, in the case of such indebtedness and/or such liabilities individually less than $250,00025,000, in excess of $50,000 in the aggregate, (iii) all made any outstanding loans or advances to any person, other than ordinary advances for business-related expenses, or (iv) since December 31, 1998, sold, exchanged or otherwise disposed of any of its assets or rights, other than in the ordinary course of business. (d) Neither Subsidiary has, except as disclosed in the financial statements delivered to the Investors or set forth in Section 2.10 of the Disclosure Schedule, (i) since December 31, 1998, declared or paid any dividends, or authorized or made any distribution upon or with respect to any class or series of its equity interests, in each case other than to 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 (ii) incurred any outstanding indebtedness for money borrowed and all or any other outstanding fixed, non contingent liabilities individually in excess of $25,000 or, in the case of such instruments indebtedness and/or such liabilities individually less than $25,000, in excess of $50,000 in the aggregate, (iii) made any outstanding loans or agreements advances to any person, other than ordinary advances for borrowed money representing payment obligations of $250,000 business related expenses, or more, (iv) since December 31, 1998, sold, exchanged or otherwise disposed of any of its assets or rights, other than in the ordinary course of business. (e) For the purposes of subsections (b), (c) and (d) above, all material operating applicable indebtedness, liabilities, agreements, understandings, instruments, contracts and proposed transactions involving the same person or capital leases for equipment to which entity (including persons or entities the Company or any of its Subsidiaries is a party, (vhave reason to believe are affiliated therewith) all contracts shall be aggregated for the employment purpose of any officer or employee, (vi) all material consulting agreements, (vii) any guarantees by meeting the Company or any individual minimum dollar amounts 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 any Person or in any geographical area, and (xi) all contracts restricting the payment of interest upon, or the redemption or conversion of, the Notes (collectively, the "Contracts")such subsections. (bf) Except as set forth on Schedule 3.7(b) to the Disclosure Letter, neither Neither the Company nor either Subsidiary has engaged in the past six months in any of its Subsidiaries isdiscussion regarding the liquidation, nor to the Company's knowledge is any other party to any Contract, in default underdissolution, or 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 Contracts is in full force and effect and (assuming due execution and delivery by the counterparties thereto) is a legal, valid and binding obligation winding up of the Company or its Subsidiary (as applicable) enforceable against the Company or such Subsidiary in accordance with its terms (subject 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) and an implied covenant of good faith and fair dealing) and neither the Company nor any of its Subsidiaries has any knowledge that any Contract is not a legal, valid and binding obligation of the other parties theretoSubsidiary.

Agreements; Action. Except as set forth on Schedule 4.6 or as disclosed in any Securities Filings: (a) 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 SECThere are no agreements, (ii) all of the Company's and its Subsidiaries' understandings, instruments, contracts, agreementsproposed transactions, leases judgments, orders, writs or other instruments decrees to which the Company or any of its Subsidiaries is a party or by which the Companyit is bound containing any: (i) obligations (contingent or otherwise) of, its Subsidiaries or its properties are boundpayments to, which involve payments by or to a Company or its Subsidiaries during any fiscal year of more than $250,000, (iii) 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 partyin excess of $50,000 (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, (vB) all contracts for Permitted Indebtedness and Permitted Guarantees (as defined in Section 6.13(e) hereof), and (C) the employment matters disclosed in Schedule 4.7); or (ii) transfer or license of any officer patent, copyright, trade secret or employeeother proprietary right to or from the Company or any of its Subsidiaries (other than licenses arising from the purchase of “off the shelf” or other standard products); or (iii) provisions restricting the development, manufacture or distribution of the Company’s or any of its Subsidiaries products or services; or (viiv) all material consulting agreements, (vii) any guarantees indemnification by the Company or any of its Subsidiaries, Subsidiaries with respect to infringements of proprietary rights (viii) all material distributor and sales agency agreements, (ix) all IP Contracts (as defined in Section 3.11), (x) all contracts restricting other than indemnification provisions protecting the Company licensor of licenses arising from the purchase of “off the shelf” or any of its Subsidiaries from engaging in any line of business or competing with any Person or in any geographical area, and (xi) all contracts restricting the payment of interest upon, or the redemption or conversion of, the Notes (collectively, the "Contracts"other standard products). (b) Except as set forth on Schedule 3.7(b) to Since March 31, 2007 (the Disclosure Letter“Balance Sheet Date”), neither the Company nor any of its Subsidiaries ishas: (i) declared or paid any dividends, nor or authorized or made any distribution upon or with respect to the Company's knowledge is any class or series of its capital stock; (ii) incurred any indebtedness for money borrowed or any other party liabilities (other than ordinary course obligations) individually in excess of $50,000 or, in the case of indebtedness and/or liabilities individually less than $50,000, in excess of $100,000 in the aggregate, other than Permitted Indebtedness and Permitted Guarantees; (iii) made any loans or advances to any Contractperson or entity not in excess, in default under, individually or in breach the aggregate, of $100,000, other than ordinary 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 violation of(iv) sold, exchanged or otherwise disposed of any Contract of its assets or rights, other than the sale of its inventory in the ordinary course of business. (c) For the purposes of subsections (a) and no event (b) above, all such indebtedness, liabilities, 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 occurred which, with reason to believe are affiliated therewith) shall be aggregated for the giving purpose of notice or passage meeting the individual minimum dollar amounts of time or both would constitute a default 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 orin the reports that it files or submits under the Exchange Act is recorded, to the Company's knowledgeprocessed, any other party under any Contract. Other than Contracts which have terminated or expired summarized, and reported in accordance with their terms, each and within the time periods specified in the rules and forms of the Contracts is Securities and Exchange Commission (“SEC”). (e) The Company makes and keep books, records, and accounts, that, in full force reasonable detail, accurately and effect fairly reflect the transactions and dispositions of the Company’s assets. The Company maintains internal control over financial reporting (assuming due execution “Financial Reporting Controls”) designed by, or under the supervision of, the Company’s principal executive and delivery principal financial officers, and effected by the counterparties thereto) is a legalCompany’s board of directors, valid management, and binding obligation other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the Company or its Subsidiary (as applicable) enforceable against the Company or such Subsidiary preparation of financial statements for external purposes in accordance with its terms (subject to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors' rights generally, general equitable generally accepted accounting principles (whether considered “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 proceeding material effect on the financial statements are prevented or timely detected; (iii) transactions are recorded as necessary to permit preparation of financial statements in equity 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 lawreasonable intervals, and appropriate action is taken with respect to any differences. (f) and an implied covenant of good faith and fair dealing) and neither the Company nor There is no weakness in any of its Subsidiaries has the Company’s Disclosure Controls or Financial Reporting Controls that is required to be disclosed in any knowledge that any Contract is not a legal, valid and binding obligation of the other parties theretoSecurities Filings, except as so disclosed.

Agreements; Action. (aExcept as set forth on Schedule 12(f) Attached hereto or Permitted ------------------- -------------- Liens or as Schedule 3.7(a) to the Disclosure Letter is a list of disclosed in any Exchange Act Filings: (i) all "material contracts" within the meaning of Item 601 of Regulation S-K of the SECThere are no agreements, (ii) all of the Company's and its Subsidiaries' understandings, instruments, contracts, agreementsproposed transactions, leases judgments, orders, writs or other instruments decrees to which the Company it or any of its Subsidiaries is a party or to its knowledge by which the Companyit is bound which may involve: (i) obligations (contingent or otherwise) of, its Subsidiaries or its properties are boundpayments to, which involve payments by or to a Company or its Subsidiaries during any fiscal year of more than $250,000, (iii) 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 it or any of its Subsidiaries is a partyin excess of $75,000 (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 (vii) all contracts for the employment transfer or license of any officer patent, copyright, trade secret or employeeother proprietary right to or from it (other than licenses arising from the purchase of "off the shelf" or other standard products); or (iii) provisions restricting the development, (vi) all material consulting agreements, (vii) any guarantees by the Company manufacture or distribution of its or any of its Subsidiaries, ' products or services; or (viiiiv) all material distributor and sales agency agreements, (ix) all IP Contracts (as defined in Section 3.11), (x) all contracts restricting the Company indemnification by it or any of its Subsidiaries from engaging in any line with respect to infringements of business or competing with any Person or in any geographical area, and (xi) all contracts restricting the payment of interest upon, or the redemption or conversion of, the Notes (collectively, the "Contracts")proprietary rights. (bii) Except as set forth on Schedule 3.7(bfor Permitted Liens, since June 30, 2005 (the "Balance Sheet ------------- Date") to the Disclosure Letter, neither the Company it nor any of its Subsidiaries ishas: (i) declared or paid any dividends, nor or authorized or made any distribution upon or with respect to the Company's knowledge is any class or series of its capital stock; (ii) incurred any indebtedness for money borrowed or any other party liabilities (other than ordinary course obligations) individually in excess of $50,000 or, in the case of indebtedness and/or liabilities individually less than $50,000, in excess of $100,000 in the aggregate; (iii) made any loans or advances to any ContractPerson not in excess, individually or in the aggregate, of $100,000, other than 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. (iii) For the purposes of subsections (i) and (ii) of this Section 12(f), all indebtedness, liabilities, agreements, understandings, instruments, contracts and proposed transactions involving the same Person (including Persons it or 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. (iv) 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 SEC. (v) The Parent makes and keeps books, records, and accounts that, in default underreasonable 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 in breach or violation under the supervision ---------------------------- of, any Contract its principal executive and no event has occurred whichprincipal financial officers, with the giving and effected by its board of notice or passage of time or both would constitute a default by the Company ordirectors, management, and other personnel, to provide reasonable assurance regarding the Company's knowledge, any other party under any Contract. Other than Contracts which have terminated or expired reliability of financial reporting and the preparation of financial statements for external purposes in accordance with their termsGAAP, each of the Contracts is in full force and effect and including that: (assuming due execution and delivery by the counterparties thereto1) is a legal, valid and binding obligation of the Company or its Subsidiary (as applicable) enforceable against the Company or such Subsidiary 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 terms receipts and expenditures are being made only in accordance with authorizations of the Parent's management and board of directors; (subject 4) transactions are recorded as necessary to maintain accountability for assets; and (5) the effects of bankruptcyrecorded accountability for assets is compared with the existing assets at reasonable intervals, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating appropriate action is taken with respect to or affecting creditors' rights generally, general equitable principles any differences. (whether considered vi) There is no weakness in a proceeding in equity or at law) and an implied covenant of good faith and fair dealing) and neither the Company nor any of its Subsidiaries has Disclosure Controls or Financial Reporting Controls that is required to be disclosed in any knowledge that any Contract is not a legal, valid and binding obligation of the other parties theretoExchange Act Filings, except as so disclosed.

Agreements; Action. Except as set forth on Schedule 2.7: (a) 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 SECThere are no agreements, (ii) all of the Company's and its Subsidiaries' understandings, instruments, contracts, agreementsproposed transactions, leases judgments, orders, writs or other instruments decrees to which the Company Debtor or any of its Subsidiaries is a party or to its knowledge by which it is bound which may involve: (i) obligations (contingent or otherwise) of, or payments to, the Company, its Subsidiaries or its properties are bound, which involve payments by or to a Company or its Subsidiaries during any fiscal year of more than $250,000, (iii) 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 Debtor or any of its Subsidiaries is a partyin excess of $65,000 (other than obligations of, or payments to, the Debtor or any of its Subsidiaries arising from purchase or sale agreements entered into in the ordinary course of business); or (vii) all contracts for the employment transfer or license of any officer patent, copyright, trade secret or employeeother proprietary right to or from the Debtor or any of its Subsidiaries (other than licenses arising from the purchase of “off the shelf” or other standard products); or (iii) provisions restricting the development, (vi) all material consulting agreements, (vii) any guarantees by manufacture or distribution of the Company Debtor’s or any of its Subsidiaries, ’ products or services; or (viiiiv) all material distributor and sales agency agreements, (ix) all IP Contracts (as defined in Section 3.11), (x) all contracts restricting indemnification by the Company Debtor or any of its Subsidiaries from engaging in any line with respect to infringements of business or competing with any Person or in any geographical area, and (xi) all contracts restricting the payment of interest upon, or the redemption or conversion of, the Notes (collectively, the "Contracts").proprietary rights; (b) Except as set forth on Schedule 3.7(b) to the Disclosure LetterSince October 1, 2004, neither the Company Debtor nor any of its Subsidiaries ishas: (i) declared or paid any dividends, nor or authorized or made any distribution upon or with respect to the Company's knowledge is any class or series of its capital stock; (ii) incurred any indebtedness for money borrowed or any other party liabilities (other than ordinary course obligations) individually in excess of $65,000 or, in the case of indebtedness and/or liabilities individually less than $65,000, in excess of $125,000 in the aggregate; (iii) made any loans or advances to any Contractperson not in excess, in default under, individually or in breach the aggregate, of $125,000, other than ordinary advances for travel expenses; or violation of(iv) sold, any Contract and no event has occurred which, with the giving exchanged or otherwise disposed 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 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 Company or such Subsidiary in accordance with its terms (subject 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) and an implied covenant of good faith and fair dealing) and neither the Company nor any of its Subsidiaries assets or rights, other than the sale of its inventory in the ordinary course of business; and (c) For the purposes of subsections (a) and (b) of this Section 2.7 above, all indebtedness, liabilities, agreements, understandings, instruments, contracts and proposed transactions involving the same person or entity (including persons or entities the Debtor has reason to believe are affiliated therewith or with any knowledge that any Contract is not a legal, valid and binding obligation Subsidiary thereof) shall be aggregated for the purpose of meeting the other parties theretoindividual minimum dollar amounts of such subsections.

Agreements; Action. (aExcept as set forth on Schedule 12(f) Attached hereto or as Schedule 3.7(a) to the Disclosure Letter is a list of disclosed in any SEC Reports or Exchange Act Filings: (i) all "material contracts" within the meaning of Item 601 of Regulation S-K of the SECThere are no agreements, (ii) all of the Company's and its Subsidiaries' understandings, instruments, contracts, agreementsproposed transactions, leases judgments, orders, writs or other instruments decrees to which the Company it or any of its Subsidiaries is a party or to its knowledge by which the Companyit is bound which may involve: (i) obligations (contingent or otherwise) of, its Subsidiaries or its properties are boundpayments to, which involve payments by or to a Company or its Subsidiaries during any fiscal year of more than $250,000, (iii) 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 it or any of its Subsidiaries is a partyin excess of $100,000 (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 (vii) all contracts for the employment transfer or license of any officer patent, copyright, trade secret or employeeother proprietary right to or from it (other than licenses arising from the purchase of "off the shelf" or other standard products); or (iii) provisions restricting the development, (vi) all material consulting agreements, (vii) any guarantees by the Company manufacture or distribution of its or any of its Subsidiaries, ' products or services; or (viiiiv) all material distributor and sales agency agreements, (ix) all IP Contracts (as defined in Section 3.11), (x) all contracts restricting the Company indemnification by it or any of its Subsidiaries from engaging in any line with respect to infringements of business or competing with any Person or in any geographical area, and (xi) all contracts restricting the payment of interest upon, or the redemption or conversion of, the Notes (collectively, the "Contracts")proprietary rights. (bii) Except as set forth on Schedule 3.7(bSince December 31, 2004 (the "Balance Sheet Date") to the Disclosure Letter, neither the Company it nor any of its Subsidiaries ishas: (i) declared or paid any dividends, nor or authorized or made any distribution upon or with respect to the Company's knowledge is any class or series of its capital stock; (ii) incurred any indebtedness for money borrowed or any other party liabilities (other than ordinary course obligations) individually in excess of $100,000 or, in the case of indebtedness and/or liabilities individually less than $75,000, in excess of $150,000 in the aggregate; (iii) made any loans or advances to any ContractPerson not in excess, individually or in the aggregate, of $150,000, other than 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. (iii) For the purposes of subsections (i) and (ii) of this Section 12(f), all indebtedness, liabilities, agreements, understandings, instruments, contracts and proposed transactions involving the same Person (including Persons it or 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. (iv) 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 SEC. (v) The Parent makes and keeps books, records, and accounts, that, in default underreasonable 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 in breach or violation under the supervision of, any Contract its principal executive and no event has occurred whichprincipal financial officers, with the giving and effected by its board of notice or passage of time or both would constitute a default by the Company ordirectors, management, and other personnel, to provide reasonable assurance regarding the Company's knowledge, any other party under any Contract. Other than Contracts which have terminated or expired reliability of financial reporting and the preparation of financial statements for external purposes in accordance with their termsGAAP, each of the Contracts is in full force and effect and including that: (assuming due execution and delivery by the counterparties thereto1) is a legal, valid and binding obligation of the Company or its Subsidiary (as applicable) enforceable against the Company or such Subsidiary 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 terms receipts and expenditures are being made only in accordance with authorizations of the Parent's management and board of directors; (subject 4) transactions are recorded as necessary to maintain accountability for assets; and (5) the effects of bankruptcyrecorded accountability for assets is compared with the existing assets at reasonable intervals, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating appropriate action is taken with respect to or affecting creditors' rights generally, general equitable principles any differences. (whether considered vi) There is no weakness in a proceeding in equity or at law) and an implied covenant of good faith and fair dealing) and neither the Company nor any of its Subsidiaries has Disclosure Controls or Financial Reporting Controls that is required to be disclosed in any knowledge that any Contract is not a legal, valid and binding obligation of the other parties theretoExchange Act Filings, except as so disclosed.

Agreements; Action. (a) Attached hereto as Schedule 3.7(a) Except for agreements explicitly contemplated hereby and agreements between the Company and its employees with respect 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 sale of the Company's and its Subsidiaries' contractsCommon Stock, there are no agreements, leases understandings or other instruments to which proposed transactions between the Company or and any of its Subsidiaries is a party or by which the Companyofficers, its Subsidiaries or its properties are bounddirectors, which involve payments by or to a Company or its Subsidiaries during any fiscal year of more than $250,000, (iii) 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 affiliates 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 any Person or in any geographical area, and (xi) all contracts restricting the payment of interest upon, or the redemption or conversion of, the Notes (collectively, the "Contracts")affiliate thereof. (b) Except as set forth on Schedule 3.7(b) There are no agreements, understandings, instruments, contracts, proposed transactions, judgments, orders, writs or decrees to the Disclosure Letter, neither which the Company nor is a party or to its knowledge by which it is bound which may involve (i) obligations (contingent or otherwise) of, or payments to, the Company in excess of $10,000 or (ii) the license of any patent, copyright, trade secret or other proprietary right to or from the Company (other than licenses arising from the purchase of "off the shelf" or other standard products), or (iii) provisions restricting or affecting the development, manufacture or distribution of the Company's products or services, or (iv) indemnification by the Company with respect to infringements of proprietary rights (other than indemnification obligations arising from purchase or sale agreements entered into in the ordinary course of business). (c) The Company has not (i) 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 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 $10,000 or, in the case of indebtedness and/or liabilities individually less than $10,000, in excess of $25,000 in the aggregate, (iii) made any loans or advances to any person, other than ordinary advances for travel expenses, or (iv) sold, exchanged or otherwise disposed of any of its Subsidiaries isassets or rights, nor to other than the Company's knowledge is any other party to any Contractsale of its inventory in the ordinary course of business. (d) For the purposes of subsections (b) and (c) above, in default underall indebtedness, liabilities, agreements, understandings, instruments, contracts and proposed transactions involving the same person or in breach entity (including persons 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 entities the Company or, has reason to believe are affiliated therewith) shall be aggregated for the Company's knowledge, purpose of meeting the individual minimum dollar amounts of such subsections. (e) The Company has not engaged in the past three (3) months in any other party under discussion (i) with any Contract. Other than Contracts which have terminated representative of any corporation or expired in accordance with their terms, each of corporations regarding the Contracts is in full force and effect and (assuming due execution and delivery by the counterparties thereto) is a legal, valid and binding obligation consolidation or merger of the Company with or its Subsidiary into any such corporation or corporations, (as applicableii) enforceable against with 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 a transaction or series of related transactions in which more than fifty percent (50%) of the voting power of the Company is disposed of, or such Subsidiary in accordance with its terms (subject to the effects iii) regarding any other form of bankruptcyacquisition, insolvencyliquidation, fraudulent conveyance, reorganization, moratorium and other similar laws relating to dissolution or affecting creditors' rights generally, general equitable principles (whether considered in a proceeding in equity or at law) and an implied covenant of good faith and fair dealing) and neither the Company nor any of its Subsidiaries has any knowledge that any Contract is not a legal, valid and binding obligation winding up of the other parties theretoCompany.

Agreements; Action. (aExcept as set forth on Schedule 12(f) Attached hereto or as Schedule 3.7(a) to the Disclosure Letter is a list of disclosed in any Exchange Act Filings: (i) all "material contracts" within the meaning of Item 601 of Regulation S-K of the SECThere are no agreements, (ii) all of the Company's and its Subsidiaries' understandings, instruments, contracts, agreementsproposed transactions, leases judgments, orders, writs or other instruments decrees to which the Company it or any of its Subsidiaries is a party or to its knowledge by which the Companyit is bound which may involve: (i) obligations (contingent or otherwise) of, its Subsidiaries or its properties are boundpayments to, which involve payments by or to a Company or its Subsidiaries during any fiscal year of more than $250,000, (iii) 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 it or any of its Subsidiaries is a partyin excess of $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 (vii) all contracts for the employment transfer or license of any officer patent, copyright, trade secret or employeeother proprietary right to or from it (other than licenses arising from the purchase of “off the shelf” or other standard products); or (iii) provisions restricting the development, (vi) all material consulting agreements, (vii) any guarantees by the Company manufacture or distribution of its or any of its Subsidiaries, ’ products or services; or (viiiiv) all material distributor and sales agency agreements, (ix) all IP Contracts (as defined in Section 3.11), (x) all contracts restricting the Company indemnification by it or any of its Subsidiaries from engaging in any line with respect to infringements of business or competing with any Person or in any geographical area, and (xi) all contracts restricting the payment of interest upon, or the redemption or conversion of, the Notes (collectively, the "Contracts")proprietary rights. (bii) Except as set forth on Schedule 3.7(b) to 12(f)(ii), since December 31, 2004 (the Disclosure Letter“Balance Sheet Date”), neither the Company it nor any of its Subsidiaries ishas: (i) declared or paid any dividends, nor or authorized or made any distribution upon or with respect to the Company's knowledge is any class or series of its capital stock; (ii) incurred any indebtedness for money borrowed or any other party liabilities (other than ordinary course obligations) individually in excess of $50,000 or, in the case of indebtedness and/or liabilities individually less than $50,000, in excess of $100,000 in the aggregate; (iii) made any loans or advances to any ContractPerson not in excess, individually or in the aggregate, of $100,000, other than 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. (iii) For the purposes of subsections (i) and (ii) of this Section 12(f), all indebtedness, liabilities, agreements, understandings, instruments, contracts and proposed transactions involving the same Person (including Persons it or 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. (iv) 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 SEC. (v) The Parent makes and keeps books, records, and accounts, that, in default underreasonable 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 in breach or violation under the supervision of, any Contract its principal executive and no event has occurred whichprincipal financial officers, with the giving and effected by its board of notice or passage of time or both would constitute a default by the Company ordirectors, management, and other personnel, to provide reasonable assurance regarding the Company's knowledge, any other party under any Contract. Other than Contracts which have terminated or expired reliability of financial reporting and the preparation of financial statements for external purposes in accordance with their termsGAAP, each of the Contracts is in full force and effect and including that: (assuming due execution and delivery by the counterparties thereto1) is a legal, valid and binding obligation of the Company or its Subsidiary (as applicable) enforceable against the Company or such Subsidiary 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 terms receipts and expenditures are being made only in accordance with authorizations of the Parent’s management and board of directors; (subject 4) transactions are recorded as necessary to maintain accountability for assets; and (5) the effects of bankruptcyrecorded accountability for assets is compared with the existing assets at reasonable intervals, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating appropriate action is taken with respect to or affecting creditors' rights generally, general equitable principles any differences. (whether considered vi) There is no weakness in a proceeding in equity or at law) and an implied covenant of good faith and fair dealing) and neither the Company nor any of its Subsidiaries has Disclosure Controls or Financial Reporting Controls that is required to be disclosed in any knowledge that any Contract is not a legal, valid and binding obligation of the other parties theretoExchange Act Filings, except as so disclosed.

Agreements; Action. (a) Attached hereto Except as set forth in the SEC Reports and 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 SEC4.6 hereto, (ii) all of the Company's and its Subsidiaries' there are no agreements, understandings, instruments, contracts, agreementsproposed transactions, leases judgments, orders, writs or other instruments decrees to which either the Company or any of its Subsidiaries is a party or to its knowledge by which the Companyit is bound which may involve (i) obligations (contingent or otherwise) of, its Subsidiaries or its properties are boundpayments to, which involve payments by or to a Company or its Subsidiaries during any fiscal year of more than $250,000, (iii) 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 partyin excess of $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 (vii) all contracts for the employment transfer or license of any officer patent, copyright, trade secret or employeeother proprietary right to or from the Company or any of its Subsidiaries (other than licenses arising from the purchase of “off the shelf” or other standard products), or (viiii) all material consulting agreementsprovisions restricting the development, manufacture or distribution of the Company’s or any of its Subsidiaries’ products or services, or (viiiv) any guarantees indemnification 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 Subsidiaries with respect to infringements of its Subsidiaries from engaging in any line of business or competing with any Person or in any geographical area, and (xi) all contracts restricting the payment of interest upon, or the redemption or conversion of, the Notes (collectively, the "Contracts")proprietary rights. (b) Except as set forth on Schedule 3.7(b) to in the Disclosure LetterSEC Reports, 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 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 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 Company or such Subsidiary in accordance with its terms (subject 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) and an implied covenant of good faith and fair dealing) and neither the Company nor any of its Subsidiaries has (i) declared or paid any knowledge dividends, or authorized or made any distribution upon or with respect to any class or series of its capital stock, (ii) incurred any indebtedness for money borrowed or any other liabilities individually in excess of $50,000 or, in the case of indebtedness and/or liabilities individually less than $50,000, in excess of $100,000 in the aggregate, (iii) made any loans or advances to any person, other than 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. (c) For the purposes of subsections (a) and (b) above, all indebtedness, liabilities, agreements, understandings, instruments, contracts and 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 any Contract information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is not a legalrecorded, valid processed, summarized, and binding obligation reported, within the time periods specified in the rules and forms of the Securities and Exchange Commission (“SEC”). (e) 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 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 parties theretopersonnel, 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 any of the Company’s Disclosure Controls or Financial Reporting Controls that is required to be disclosed in any of the Exchange Act Filings, except as so disclosed. (g) 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 with or into any such corporation or corporations, (ii) with 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 a transaction or series of related transactions in which more than 50% of the voting power of the Company is disposed of or (iii) regarding any other form of acquisition, liquidation, dissolution or winding up of the Company.

Agreements; Action. Except as set forth on Schedule 4.6 or as disclosed in any Exchange Act Filings: (a) 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 SECthere are no agreements, (ii) all of the Company's and its Subsidiaries' understandings, instruments, contracts, agreementsproposed transactions, leases judgments, orders, writs or other instruments decrees to which the Company or any of its Subsidiaries is a party or by which the Companyit is bound which may involve: (i) obligations (contingent or otherwise) of, its Subsidiaries or its properties are boundpayments to, which involve payments by or to a Company or its Subsidiaries during any fiscal year of more than $250,000, (iii) 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 partyin excess of $100,000 (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 (vii) all contracts for the employment transfer or license of any officer patent, copyright, trade secret or employeeother proprietary right to or from the Company or any of its Subsidiaries (other than licenses arising from the purchase of "off the shelf" or other standard products); or (iii) provisions restricting the development, manufacture or distribution of the Company's or any of its Subsidiaries products or services; or (viiv) all material consulting agreements, (vii) any guarantees indemnification 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 Subsidiaries with respect to infringements of its Subsidiaries from engaging in any line of business or competing with any Person or in any geographical area, and (xi) all contracts restricting the payment of interest upon, or the redemption or conversion of, the Notes (collectively, the "Contracts")proprietary rights. (b) Except as set forth on Schedule 3.7(b) to Since December 31, 2004 (the Disclosure Letter"Balance Sheet Date"), neither the Company nor any of its Subsidiaries ishas: (i) declared or paid any dividends, nor or authorized or made any distribution upon or with respect to any class or series of its capital stock; (ii) incurred any indebtedness for money borrowed or any other liabilities (other than ordinary course obligations) individually in excess of $100,000 or, in the case of indebtedness and/or liabilities individually less than $100,000, in excess of $200,000 in the aggregate; (iii) made any loans or advances to any person or entity not in excess, individually or in the aggregate, of $100,000, other than ordinary 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) For the purposes of subsections (a) and (b) above, all indebtedness, liabilities, agreements, understandings, instruments, contracts and 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 knowledge assets. (e) There is no weakness in any other party to any Contract, in default under, or 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 knowledgeDisclosure Controls that is required to be disclosed in any of the Exchange Act Filings, any 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 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 party under any Contract. Other than Contracts which have terminated or expired personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with their termsgenerally accepted accounting principles ("GAAP"), each of the Contracts is in full force and effect and including that: (assuming due execution and delivery by the counterparties theretoi) is a legal, valid and binding obligation of the Company or its Subsidiary (as applicable) enforceable against the Company or such Subsidiary transactions are executed in accordance with its terms management's general or specific authorization; (subject to the effects of bankruptcyii) unauthorized acquisition, insolvencyuse, 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) and an implied covenant of good faith and fair dealing) and neither the Company nor any of its Subsidiaries has any knowledge that any Contract is not a legal, valid and binding obligation disposition of the other parties theretoCompany'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.

Agreements; Action. Except as set forth on Schedule 4.6 or as ------------------- disclosed in any Exchange Act Filings: (a) 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 SECthere are no agreements, (ii) all of the Company's and its Subsidiaries' understandings, instruments, contracts, agreementsproposed transactions, leases judgments, orders, writs or other instruments decrees to which the Company or any of its Subsidiaries is a party or by which it is bound which may involve: (i) obligations (contingent or otherwise) of, or payments to, the CompanyCompany in excess of $50,000 (other than obligations of, its Subsidiaries or its properties are boundpayments to, which involve payments by the Company arising from agreements entered into in the ordinary course of business); or (ii) the transfer or license of any patent, copyright, trade secret or other proprietary right to a or from the Company (other than licenses arising from the purchase of "off the shelf" or its Subsidiaries during any fiscal year of more than $250,000, other standard products); or (iii) all provisions restricting the development, manufacture or distribution 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 products or other debt instruments evidencing indebtedness for money borrowed and all such instruments services; 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 indemnification by the Company or any with respect to infringements 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 any Person or in any geographical area, and (xi) all contracts restricting the payment of interest upon, or the redemption or conversion of, the Notes (collectively, the "Contracts")proprietary rights. (b) Except Since December 31, 2003, except for Intercompany Transactions (as set forth on Schedule 3.7(b) to the Disclosure Letterdefined below), neither the Company nor any of its Subsidiaries ishas: (i) declared or paid any dividends, nor or authorized or made any distribution upon or with respect to any class or series of its capital stock; (ii) incurred any indebtedness for money borrowed or any other liabilities (other than ordinary course obligations) individually in excess of $50,000 or, in the case of indebtedness and/or liabilities individually less than $50,000, in excess of $100,000 in the aggregate; (iii) made any loans or advances to any person not in excess, individually or in the aggregate, of $100,000, other than ordinary 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. For the purposes of this Agreement, "Intercompany Transactions" shall mean, collectively, (i) any dividends paid by any Subsidiary which is party to the Company's knowledge is Subsidiary Guaranty, the Master Security Agreement and the Stock Pledge Agreement (any such Subsidiary, a "Subsidiary Guarantor") to any other party to Subsidiary Guarantor or the Company, (ii) any Contract, in default under, or 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 loans made by the Company or, or any Subsidiary Guarantor 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 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 any Subsidiary Guarantor, (as applicableiii) enforceable against any investments made by the Company or such any Subsidiary Guarantor in accordance with its terms the Company or any Subsidiary Guarantor and (subject iv) any transfer of assets by the Company or any Subsidiary Guarantor to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to Company or affecting creditors' rights generally, general equitable principles (whether considered in a proceeding in equity or at law) and an implied covenant of good faith and fair dealing) and neither the Company nor any of its Subsidiaries has any knowledge that any Contract is not a legal, valid and binding obligation of the other parties theretoSubsidiary Guarantor.

Agreements; Action. Except as set forth on Schedule 2.6: (a) 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 All of the SEC, (ii) all of the Company's and its Subsidiaries' contracts, agreements, leases or other instruments understandings, instruments, contracts and proposed transactions, to which the Company or any of its Subsidiaries is a party or by which the Company, its Subsidiaries or its properties are it is bound, which involve payments that are required to be filed under Item 601 of Regulation SB promulgated under the Securities Exchange Act of 1934 (the “Exchange Act”) have been so filed by the Company with the SEC. All material judgments, orders, writs or to a Company or its Subsidiaries during any fiscal year of more than $250,000, (iii) 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 decrees to which the Company or any of its Subsidiaries is a partyparty or to its knowledge by which it is bound, (v) all contracts for the employment of any officer or employee, (vi) all material consulting agreements, (vii) any guarantees have been disclosed by the Company or any of its Subsidiarieson a current report on Form 8-K pursuant to the Exchange Act. Notwithstanding the foregoing, (viii) all material distributor and sales agency there are no agreements, understandings, instruments, contracts, proposed transactions, judgments, orders, writs or decrees to which the Company is a party or to its knowledge by which it is bound which may involve (ixi) all IP Contracts the transfer or license of any patent, copyright, trade secret or other proprietary right to or from the Company (as defined in Section 3.11other than licenses arising from the purchase of “off the shelf” or other standard products), or (xii) all contracts provisions restricting the Company development, manufacture or any distribution of its Subsidiaries from engaging in any line of business the Company’s products or competing with any Person or in any geographical area, and (xi) all contracts restricting the payment of interest uponservices, or (iii) indemnification by the redemption or conversion of, the Notes (collectively, the "Contracts")Company with respect to infringements of proprietary rights. (b) Except as set forth on Schedule 3.7(bThe Company has not (i) 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) since December 31, 2004, incurred any indebtedness for money borrowed or any other liabilities individually in excess of $250,000 or, in the Disclosure Lettercase of indebtedness and/or liabilities individually less than $50,000, neither in excess of $150,000 in the aggregate, (iii) made any loans or advances to any person or entity in excess, individually or in the aggregate, of $100,000, other than 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. Neither the Company nor any of its Subsidiaries is, nor to the Company's knowledge subsidiary is any other party in default with respect to any Contractindebtedness. (c) For the purposes of subsections (a) and (b) above, in default underall indebtedness, liabilities, agreements, understandings, instruments, contracts and proposed transactions involving the same person or in breach entity (including persons 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 entities the Company or, has reason to believe are affiliated therewith) shall be aggregated for the Company's knowledge, any other party under any Contract. Other than Contracts which have terminated or expired in accordance with their terms, each purpose of meeting the Contracts is in full force and effect and (assuming due execution and delivery by the counterparties thereto) is a legal, valid and binding obligation individual minimum dollar amounts of the Company or its Subsidiary (as applicable) enforceable against the Company or such Subsidiary in accordance with its terms (subject 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) and an implied covenant of good faith and fair dealing) and neither the Company nor any of its Subsidiaries has any knowledge that any Contract is not a legal, valid and binding obligation of the other parties theretosubsections.

Agreements; Action. Except as set forth on Schedule 4.6 or as disclosed in any Exchange Act Filings: (a) 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 SECthere are no agreements, (ii) all of the Company's and its Subsidiaries' understandings, instruments, contracts, agreementsproposed transactions, leases judgments, orders, writs or other instruments decrees to which the Company or any of its Subsidiaries is a party or by which the Companyit is bound which may involve: (i) obligations (contingent or otherwise) of, its Subsidiaries or its properties are boundpayments to, which involve payments by or to a Company or its Subsidiaries during any fiscal year of more than $250,000, (iii) 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 partyin excess of $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 (vii) all contracts for the employment transfer or license of any officer patent, copyright, trade secret or employeeother proprietary right to or from the Company or any of its Subsidiaries (other than licenses arising from the purchase of “off the shelf” or other standard products); or (iii) provisions restricting the development, manufacture or distribution of the Company’s or any of its Subsidiaries products or services; or (viiv) all material consulting agreements, (vii) any guarantees indemnification 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 Subsidiaries with respect to infringements of its Subsidiaries from engaging in any line of business or competing with any Person or in any geographical area, and (xi) all contracts restricting the payment of interest upon, or the redemption or conversion of, the Notes (collectively, the "Contracts")proprietary rights. (b) Except as set forth on Schedule 3.7(b) to Since December 31, 2005 (the Disclosure Letter“Balance Sheet Date”), neither the Company nor any of its Subsidiaries ishas: (i) declared or paid any dividends, nor or authorized or made any distribution upon or with respect to the Company's knowledge is any class or series of its capital stock; (ii) incurred any indebtedness for money borrowed or any other party liabilities (other than ordinary course obligations) individually in excess of $50,000 or, in the case of indebtedness and/or liabilities individually less than $50,000, in excess of $100,000 in the aggregate; (iii) made any loans or advances to any Contractperson or entity not in excess, in default under, individually or in breach the aggregate, of $100,000, other than ordinary course advances for travel expenses; or violation of(iv) sold, exchanged or otherwise disposed of any Contract of its assets or rights, other than the sale of its inventory in the ordinary course of business. (c) For the purposes of subsections (a) and no event (b) above, all indebtedness, liabilities, agreements, understandings, instruments, contracts and proposed transactions involving the same person or entity (including persons or entities the Company or any Subsidiary of the Company has occurred which, with reason to believe are affiliated therewith) shall be aggregated for the giving purpose of notice or passage meeting the individual minimum dollar amounts of time or both would constitute a default such subsections. (d) The Company maintains disclosure controls and procedures (“Disclosure Controls”) designed to ensure that information required to be disclosed by the Company orin 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) 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 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 Company's knowledge, any other party under any Contract. Other than Contracts which have terminated or expired reliability of financial reporting and the preparation of financial statements for external purposes in accordance with their termsgenerally accepted accounting principles (“GAAP”), each of the Contracts is in full force and effect and including that: (assuming due execution and delivery by the counterparties theretoi) is a legal, valid and binding obligation of the Company or its Subsidiary (as applicable) enforceable against the Company or such Subsidiary transactions are executed in accordance with its terms management’s general or specific authorization; (subject 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 effects Company’s receipts and expenditures are being made only in accordance with authorizations of bankruptcythe 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, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating appropriate action is taken with respect to or affecting creditors' rights generally, general equitable principles any differences. (whether considered f) There is no weakness in a proceeding in equity or at law) and an implied covenant of good faith and fair dealing) and neither the Company nor any of its Subsidiaries has the Company’s Disclosure Controls or Financial Reporting Controls that is required to be disclosed in any knowledge that any Contract is not a legal, valid and binding obligation of the other parties theretoExchange Act Filings, except as so disclosed.

Agreements; Action. Except as set forth on Schedule 4.6 or as ------------------- disclosed in any Exchange Act Filings: (a) 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 SECthere are no agreements, (ii) all of the Company's and its Subsidiaries' understandings, instruments, contracts, agreementsproposed transactions, leases judgments, orders, writs or other instruments decrees to which the Company or any of its Subsidiaries is a party or by which the Companyit is bound which may involve: (i) obligations (contingent or otherwise) of, its Subsidiaries or its properties are boundpayments to, which involve payments by or to a Company or its Subsidiaries during any fiscal year of more than $250,000, (iii) 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 partyin excess of $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 (vii) all contracts for the employment transfer or license of any officer patent, copyright, trade secret or employeeother proprietary right to or from the Company or any of its Subsidiaries (other than licenses arising from the purchase of "off the shelf" or other standard products); or (iii) provisions restricting the development, manufacture or distribution of the Company's or any of its Subsidiaries' products or services; or (viiv) all material consulting agreements, (vii) any guarantees indemnification 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 Subsidiaries with respect to infringements of its Subsidiaries from engaging in any line of business or competing with any Person or in any geographical area, and (xi) all contracts restricting the payment of interest upon, or the redemption or conversion of, the Notes (collectively, the "Contracts")proprietary rights. (b) Except as set forth on Schedule 3.7(b) to Since December 31, 2004 (the Disclosure Letter"Balance Sheet Date"), neither the Company nor any of its Subsidiaries ishas: (i) declared or paid any dividends, nor or authorized or made any distribution upon or with respect to any class or series of its capital stock; (ii) incurred any indebtedness for money borrowed or any other liabilities (other than ordinary course obligations) individually in excess of $50,000 or, in the case of indebtedness and/or liabilities individually less than $50,000, in excess of $100,000 in the aggregate; (iii) made any loans or advances to any person or entity in excess, individually or in the aggregate, of $100,000, other than ordinary 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) For the purposes of subsections (a) and (b) above, all indebtedness, liabilities, agreements, understandings, instruments, contracts and 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) 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 knowledge is any other party to any Contract, in default underassets. The Company maintains internal control over financial reporting ("Financial Reporting Controls") designed by, or in breach or violation under the supervision 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 knowledgeprincipal executive and principal financial officers, any and effected by the Company's board of directors, management, and other party under any Contract. Other than Contracts which have terminated or expired personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with their termsgenerally accepted accounting principles ("GAAP"), each of the Contracts is in full force and effect and including that: (assuming due execution and delivery by the counterparties theretoi) is a legal, valid and binding obligation of the Company or its Subsidiary (as applicable) enforceable against the Company or such Subsidiary transactions are executed in accordance with its terms management's general or specific authorization; (subject 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 effects Company's receipts and expenditures are being made only in accordance with authorizations of bankruptcythe 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, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating appropriate action is taken with respect to or affecting creditors' rights generally, general equitable principles any differences. (whether considered f) There is no weakness in a proceeding in equity or at law) and an implied covenant of good faith and fair dealing) and neither the Company nor any of its Subsidiaries has the Company's Disclosure Controls or Financial Reporting Controls that is required to be disclosed in any knowledge that any Contract is not a legal, valid and binding obligation of the other parties theretoExchange Act Filings, except as so disclosed.

Agreements; Action. Except as set forth on Schedule 2.6: (a) 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 All of the SEC, (ii) all of the Company's and its Subsidiaries' contracts, agreements, leases or other instruments understandings, instruments, contracts and proposed transactions, to which the Company or any of its Subsidiaries is a party or by which the Company, its Subsidiaries or its properties are it is bound, which involve payments that are required to be filed under Item 601 of Regulation SB promulgated under the Securities Exchange Act of 1934 (the “Exchange Act”) have been so filed by the Company with the SEC. All material judgments, orders, writs or to a Company or its Subsidiaries during any fiscal year of more than $250,000, (iii) 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 decrees to which the Company or any of its Subsidiaries is a partyparty or to its knowledge by which it is bound, (v) all contracts for the employment of any officer or employee, (vi) all material consulting agreements, (vii) any guarantees have been disclosed by the Company or any of its Subsidiarieson a current report on Form 8-K pursuant to the Exchange Act. Notwithstanding the foregoing, (viii) all material distributor and sales agency there are no agreements, understandings, instruments, contracts, proposed transactions, judgments, orders, writs or decrees to which the Company is a party or to its knowledge by which it is bound which may involve (ixi) all IP Contracts the transfer or license of any patent, copyright, trade secret or other proprietary right to or from the Company (as defined in Section 3.11other than licenses arising from the purchase of “off the shelf” or other standard products), or (xii) all contracts provisions restricting the Company development, manufacture or any distribution of its Subsidiaries from engaging in any line of business the Company’s products or competing with any Person or in any geographical area, and (xi) all contracts restricting the payment of interest uponservices, or (iii) indemnification by the redemption or conversion of, the Notes (collectively, the "Contracts")Company with respect to infringements of proprietary rights. (b) Except as set forth on Schedule 3.7(bThe Company has not (i) 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) since December 31, 2006, incurred any indebtedness for money borrowed or any other liabilities individually in excess of $250,000 or, in the Disclosure Lettercase of indebtedness and/or liabilities individually less than $50,000, neither in excess of $150,000 in the aggregate, (iii) made any loans or advances to any person or entity in excess, individually or in the aggregate, of $100,000, other than 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. Neither the Company nor any of its Subsidiaries is, nor to the Company's knowledge subsidiary is any other party in default with respect to any Contractindebtedness. (c) For the purposes of subsections (a) and (b) above, in default underall indebtedness, liabilities, agreements, understandings, instruments, contracts and proposed transactions involving the same person or in breach entity (including persons 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 entities the Company or, has reason to believe are affiliated therewith) shall be aggregated for the Company's knowledge, any other party under any Contract. Other than Contracts which have terminated or expired in accordance with their terms, each purpose of meeting the Contracts is in full force and effect and (assuming due execution and delivery by the counterparties thereto) is a legal, valid and binding obligation individual minimum dollar amounts of the Company or its Subsidiary (as applicable) enforceable against the Company or such Subsidiary in accordance with its terms (subject 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) and an implied covenant of good faith and fair dealing) and neither the Company nor any of its Subsidiaries has any knowledge that any Contract is not a legal, valid and binding obligation of the other parties theretosubsections.

Agreements; Action. (a) 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 SECThere are no instruments, (ii) all of the Company's and its Subsidiaries' contractsjudgments, orders, writs, agreements, leases decrees or other instruments contracts to which the Company or any of its Subsidiaries is a party or by which it is bound (including purchase orders to the Company or placed by the Company) that may involve (i) obligations (contingent or otherwise) of, or payments to the Company in excess of $50,000, or (ii) the license of any patent, copyright, trade secret or other proprietary right to or from the Company, its Subsidiaries or its properties are bound, which involve payments by or to a Company or its Subsidiaries during any fiscal year of more than $250,000, (iii) all provisions restricting the development or distribution of the Company's and its Subsidiaries' loan agreementsproducts or services, bank lines except those set forth on the Schedule of credit agreementsExceptions, indentures, mortgages, deeds copies 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, which contracts have been made available to special counsel to the Purchasers (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 any Person or in any geographical area, and (xi) all contracts restricting the payment of interest upon, or the redemption or conversion of, the Notes (collectively, 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 best knowledge of the Company, no other party to any of the Contracts is in material default thereunder. (b) Except The Company has not (i) 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 indebtedness for money borrowed or any other liabilities individually in excess of $50,000 or, in the case of indebtedness and/or liabilities individually less than $50,000, in excess of $100,000 in the aggregate, (iii) made any loans or advances to any person, other than ordinary advances for travel expenses, (iv) sold, exchanged or otherwise disposed of any of its assets or rights; or (v) incurred any obligation, contingent or otherwise, to redeem or repurchase any equity securities or any security that is a combination of debt and equity, except as set forth on Schedule 3.7(bin this Agreement or in the Restated Articles. (c) to For the Disclosure Letterpurposes of subsections (a) and (b) above, neither all indebtedness, liabilities, agreements, understandings, instruments, contracts and proposed transactions involving the same person or entity (including persons or entities the Company nor any has reason to believe are affiliated therewith) shall be aggregated for the purpose of its Subsidiaries is, nor to meeting the Company's knowledge is any other party to any Contract, in default under, or in breach or violation of, any Contract and no event has occurred which, with the giving individual minimum dollar amounts 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 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 Company or such Subsidiary in accordance with its terms (subject 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) and an implied covenant of good faith and fair dealing) and neither the Company nor any of its Subsidiaries has any knowledge that any Contract is not a legal, valid and binding obligation of the other parties theretosubsections.

Agreements; Action. Except as set forth on Schedule 4.6 or as disclosed in any Exchange Act Filings: (a) 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 SECthere are no agreements, (ii) all of the Company's and its Subsidiaries' understandings, instruments, contracts, agreementsproposed transactions, leases judgments, orders, writs or other instruments decrees to which the Company or any of its Subsidiaries is a party or by which the Companyit is bound which may involve: (i) obligations (contingent or otherwise) of, its Subsidiaries or its properties are boundpayments to, which involve payments by or to a Company or its Subsidiaries during any fiscal year of more than $250,000, (iii) 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 partyin excess of $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 (vii) all contracts for the employment transfer or license of any officer patent, copyright, trade secret or employeeother proprietary right to or from the Company or any of its Subsidiaries (other than licenses arising from the purchase of "off the shelf" or other standard products); or (iii) provisions restricting the development, manufacture or distribution of the Company's or any of its Subsidiaries products or services; or (viiv) all material consulting agreements, (vii) any guarantees indemnification 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 Subsidiaries with respect to infringements of its Subsidiaries from engaging in any line of business or competing with any Person or in any geographical area, and (xi) all contracts restricting the payment of interest upon, or the redemption or conversion of, the Notes (collectively, the "Contracts")proprietary rights. (b) Except as set forth on Schedule 3.7(b) to Since December 31, 2005 (the Disclosure Letter"Balance Sheet Date"), neither the Company nor any of its Subsidiaries ishas: (i) declared or paid any dividends, nor or authorized or made any distribution upon or with respect to any class or series of its capital stock; (ii) incurred any indebtedness for money borrowed or any other liabilities (other than ordinary course obligations) individually in excess of $50,000 or, in the case of indebtedness and/or liabilities individually less than $50,000, in excess of $100,000 in the aggregate; (iii) made any loans or advances to any person or entity not in excess, individually or in the aggregate, of $100,000, other than ordinary 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) For the purposes of subsections (a) and (b) above, all indebtedness, liabilities, agreements, understandings, instruments, contracts and 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 consolidated 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) 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 knowledge is any other party to any Contractassets. To the extent required by federal securities laws, in default underthe Company maintains internal control over financial reporting ("Financial Reporting Controls") designed by, or in breach or violation under the supervision 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 knowledgeprincipal executive and principal financial officers, any and effected by the Company's board of directors, management, and other party under any Contract. Other than Contracts which have terminated or expired personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with their termsgenerally accepted accounting principles ("GAAP"), each of the Contracts is in full force and effect and including that: (assuming due execution and delivery by the counterparties theretoi) is a legal, valid and binding obligation of the Company or its Subsidiary (as applicable) enforceable against the Company or such Subsidiary transactions are executed in accordance with its terms management's general or specific authorization; (subject 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 effects Company's receipts and expenditures are being made only in accordance with authorizations of bankruptcythe 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, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating appropriate action is taken with respect to or affecting creditors' rights generally, general equitable principles any differences. (whether considered f) There is no weakness in a proceeding in equity or at law) and an implied covenant of good faith and fair dealing) and neither the Company nor any of its Subsidiaries has the Company's Disclosure Controls or Financial Reporting Controls that is required to be disclosed in any knowledge that any Contract is not a legal, valid and binding obligation of the other parties theretoExchange Act Filings, except as so disclosed.

Agreements; Action. Except as set forth on Schedule 4.6 or as disclosed in any Exchange Act Filings: (a) 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 SECthere are no agreements, (ii) all of the Company's and its Subsidiaries' instruments, contracts, agreementsjudgments, leases orders, writs or other instruments decrees to which the Company or any of its Subsidiaries is a party or by which the Company, its Subsidiaries or its properties are bound, it is bound which involve (i) obligations (contingent or otherwise) of, or payments by or to a Company or its Subsidiaries during any fiscal year of more than $250,000to, (iii) 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 such Subsidiary in excess of its Subsidiaries is a party$50,000 (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 and insurance policies issued in the ordinary course of business); or (vii) all contracts for the employment transfer or license of any officer patent, copyright, trade secret or employeeother proprietary right to or from the Company or any such Subsidiary (other than licenses arising from the purchase of “off the shelf” or other standard products); or (iii) provisions restricting the development, manufacture or distribution of the Company’s or any such Subsidiary’s products or services; or (viiv) all material consulting agreements, (vii) any guarantees indemnification by the Company or any such Subsidiary with respect to infringements 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 any Person or in any geographical area, and (xi) all contracts restricting the payment of interest upon, or the redemption or conversion of, the Notes (collectively, the "Contracts").proprietary rights; (b) Except as set forth on Schedule 3.7(b) to 4.6, since December 31, 2003 (the Disclosure Letter“Balance Sheet Date”), neither the Company nor any of its Subsidiaries ishas: (i) declared or paid any dividends, nor or authorized or made any distribution upon or with respect to the Company's knowledge is any class or series of its capital stock; (ii) incurred any indebtedness for money borrowed or any other party liabilities (other than ordinary course obligations) individually in excess of $50,000 or, in the case of indebtedness and/or liabilities individually less than $50,000, in excess of $100,000 in the aggregate; (iii) made any loans or advances to any Contractperson or entity not in excess, in default under, individually or in breach the aggregate, of $100,000, other than ordinary course advances for travel and other business expenses; or violation of(iv) sold, exchanged or otherwise disposed of a material portion of any Contract of its assets or rights, other than the in the ordinary course of business or for reasonably equivalent value. (c) For the purposes of subsections (a) and no event (b) above, all indebtedness, liabilities, agreements, instruments, and contracts involving the same person or entity (including persons or entities the Company or any applicable Subsidiary of the Company has occurred which, with reason to believe are affiliated therewith) shall be aggregated for the giving purpose of notice or passage meeting the individual minimum dollar amounts of time or both would constitute a default such subsections. (d) The Company maintains disclosure controls and procedures (“Disclosure Controls”) designed to ensure that information required to be disclosed by the Company orin 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) The Company makes and keep books, records, and accounts, that, in reasonable detail, accurately and fairly reflect (in all material respects) the transactions and dispositions of the Company’s assets. 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 Company's knowledge, any other party under any Contract. Other than Contracts which have terminated or expired reliability of financial reporting and the preparation of financial statements for external purposes in accordance with their termsgenerally accepted accounting principles (“GAAP”), each of the Contracts is in full force and effect and including that: (assuming due execution and delivery by the counterparties theretoi) is a legal, valid and binding obligation of the Company or its Subsidiary (as applicable) enforceable against the Company or such Subsidiary transactions are executed in accordance with its terms management’s general or specific authorization; (subject 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 effects Company’s receipts and expenditures are being made only in accordance with authorizations of bankruptcythe 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, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating appropriate action is taken with respect to or affecting creditors' rights generally, general equitable principles any differences. (whether considered f) There is no material weakness in a proceeding in equity or at law) and an implied covenant of good faith and fair dealing) and neither the Company nor any of its Subsidiaries has the Company’s Disclosure Controls or Financial Reporting Controls that is required to be disclosed in any knowledge that any Contract is not a legal, valid and binding obligation of the other parties theretoExchange Act Filings, except as so disclosed.

Agreements; Action. Except as set forth on Schedule 6.6: (a) 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 SECThere are no agreements, (ii) all of the Company's and its Subsidiaries' understandings, instruments, contracts, agreementsjudgments, leases orders, writs or other instruments decrees to which the any Company or any of its Subsidiaries is a party or by which the Companyit is bound which may involve: (i) obligations (contingent or otherwise) of, its Subsidiaries or its properties are boundpayments to, which involve payments by or to a Company or its Subsidiaries during any fiscal year of more than $250,000, (iii) 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 partyin excess of $50,000 (other than obligations of, (v) all contracts for the employment of or payments to, 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 arising from engaging purchase or sale agreements, contracts for services, marketing and advertising related agreements, etc. entered into in the ordinary course of business); or (ii) the transfer or license of any line patent, copyright, trade secret or other proprietary right to or from any Company or any of business its Subsidiaries (other than licenses arising from the purchase of “off the shelf” or competing with any Person other standard products); or in any geographical area, and (xiiii) all contracts provisions restricting the payment development, manufacture or distribution of interest upon, any Company’s or the redemption any of its Subsidiaries’ products or conversion of, the Notes services; or (collectively, the "Contracts")iv) indemnification by any Company or any of its Subsidiaries with respect to infringements of proprietary rights. (b) Except Since June 30, 2015 (as set forth on Schedule 3.7(bto WE SELL and BST) and September 30, 2015 as to USELL (the Disclosure Letter“Measurement Date”), neither the no Company nor any of its Subsidiaries ishas: (i) declared or paid any dividends, nor to the Company's knowledge is or authorized or made any other party distribution upon or with respect to any Contractclass or series of its capital stock or equity; (ii) incurred any Indebtedness individually in excess of $50,000 or, in default underthe case of Indebtedness individually less than $50,000, in excess of $100,000 in the aggregate; (iii) made any loans or advances to any Person not in excess, individually or in breach the aggregate, of $100,000, other than ordinary course advances for travel expenses; or violation of(iv) sold, exchanged or otherwise disposed of any Contract of its assets or rights, other than the sale of its inventory in the ordinary course of business; 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 as of the Contracts is in full force and effect and (assuming due execution and delivery by the counterparties thereto) is a legaldate of this Agreement, valid and binding obligation of the Company or its Subsidiary (as applicable) enforceable against the Company or such Subsidiary in accordance with its terms (subject 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) and an implied covenant of good faith and fair dealing) and neither the no Company nor any of its Subsidiaries has any knowledge outstanding Indebtedness. 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 (other than accrued expenses incurred in the ordinary course of business and trade payables entered into in the ordinary course of business); (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) all obligations evidenced by notes, bonds, debentures or similar instruments, including obligations so evidenced incurred in connection with the acquisition of property, assets or businesses; (e) 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 Person (even though the 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 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 for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien upon or in property (including accounts and contracts rights) owned by such Person, even though such Person has not assumed or become liable for the payment of such Indebtedness (and for purposes of 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 kinds referred to in 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 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 Contract is not a legalagreements relating thereto will be complied with, valid and binding obligation or that the holders of the other parties such liability will be protected (in whole or in part) against loss with respect thereto.

Agreements; Action. (a) Attached hereto as Schedule 3.7(aExcept for agreements explicitly contemplated hereby, there are no agreements, understandings or proposed transactions between BuyGolf and any of its officers, directors, affiliates or any affiliate thereof. (b) There are no agreements, understandings, instruments, contracts, proposed transactions, judgments, orders, writs or decrees to the Disclosure Letter which BuyGolf is a list of party or to its knowledge by which it is bound which may involve (i) all obligations (contingent or otherwise) of, or payments to, BuyGolf (other than obligations of, or payments to, BuyGolf arising in the ordinary course of business), or (ii) the license of any patent, copyright, trade secret or other proprietary right to or from BuyGolf (other than licenses arising from the purchase of "material contractsoff the shelf" within or other standard products), or (iii) provisions restricting or affecting the meaning development, manufacture or distribution of Item 601 BuyGolf's products or services, or (iv) indemnification by BuyGolf with respect to infringements of Regulation S-K proprietary rights. (c) BuyGolf has not (i) declared or paid any dividends, or authorized or made any distribution upon or with respect to any class or series of the SECits capital stock, (ii) all incurred 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 Company's and its Subsidiaries' contractsFinancial Statements), agreements(iii) made any loans or advances to any person, leases other than ordinary advances for travel expenses, (iv) sold, exchanged or other instruments to which the Company or otherwise disposed of any of its Subsidiaries assets or rights, other than the sale of its inventory in the ordinary course of business, (v) entered into any material contract, other than in the ordinary course of business and as provided to BC, and there has not occurred any amendment, termination or default under any material contract to which BuyGolf is a party or by which the Company, its Subsidiaries or its properties are it is bound, which involve payments by or to a Company or its Subsidiaries during any fiscal year of more than $250,000, (iii) 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 agreementsmade any change in its accounting practices or made any revaluation of its assets, (vii) made any guarantees by purchase or other acquisition of, sale, lease, disposition, or 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 Company ordinary course of business, or any of its Subsidiaries, (viii) all material distributor and sales agency agreementsmade any sale, (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 any Person or in any geographical area, and (xi) all contracts restricting the payment of interest uponassignment, or transfer of any patents, trademarks, copyrights, trade secrets or other intangible assets, other than in the redemption or conversion of, the Notes (collectively, the "Contracts")ordinary course of business. (b) Except as set forth on Schedule 3.7(b) to the Disclosure Letter, 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 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 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 Company or such Subsidiary in accordance with its terms (subject 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) and an implied covenant of good faith and fair dealing) and neither the Company nor any of its Subsidiaries has any knowledge that any Contract is not a legal, valid and binding obligation of the other parties thereto.

Agreements; Action. (a) Attached hereto as Schedule 3.7(a2.7(a) to the Disclosure Letter hereto 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 its Subsidiaries' contracts, agreements, leases or other instruments to which the Company or 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 its Subsidiaries during any fiscal year of more than $250,000, (iii) 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 3.112.11), (x) all contracts restricting the Company or any of its Subsidiaries from engaging in any line of business or competing with any Person or in any geographical area, and (xi) all contracts restricting the payment of interest upon, or the redemption or conversion of, the PIK Preferred Shares and the Amended Notes (collectively, the "Contracts"). (b) Except as set forth on Schedule 3.7(b2.7(b) to the Disclosure Letterhereto, 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 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 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 Company or such Subsidiary in accordance with its terms (subject 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) and an implied covenant of good faith and fair dealing) and neither the Company nor any of its Subsidiaries has any knowledge that any Contract is not a legal, valid and binding obligation of the other parties thereto.

Agreements; Action. Except as set forth on Schedule 4.6 or as disclosed in any Exchange Act Filings: (a) 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 SECthere are no agreements, (ii) all of the Company's and its Subsidiaries' understandings, instruments, contracts, agreementsproposed transactions, leases judgments, orders, writs or other instruments decrees to which the Company or any of its Subsidiaries is a party or by which the Companyit is bound which may involve: (i) obligations (contingent or otherwise) of, its Subsidiaries or its properties are boundpayments to, which involve payments by or to a Company or its Subsidiaries during any fiscal year of more than $250,000, (iii) 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 such Subsidiary in excess of its Subsidiaries is a party$100,000 (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 (vii) all contracts for the employment transfer or license of any officer patent, copyright, trade secret or employeeother proprietary right to or from the Company or any such Subsidiary (other than licenses arising from the purchase of “off the shelf” or other standard products); or (iii) provisions restricting the development, manufacture or distribution of the Company’s or any such Subsidiary’s products or services; or (viiv) all material consulting agreements, (vii) any guarantees indemnification by the Company or any such Subsidiary with respect to infringements 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 any Person or in any geographical area, and (xi) all contracts restricting the payment of interest upon, or the redemption or conversion of, the Notes (collectively, the "Contracts")proprietary rights. (b) Except as set forth on Schedule 3.7(b) to Since April 30, 2004 (the Disclosure Letter“Balance Sheet Date”), neither the Company nor any of its Subsidiaries ishas: (i) declared or paid any dividends, nor or authorized or made any distribution upon or with respect to the Company's knowledge is any class or series of its capital stock; (ii) incurred any indebtedness for money borrowed or any other party liabilities (other than ordinary course obligations) individually in excess of $50,000 or, in the case of indebtedness and/or liabilities individually less than $50,000, in excess of $100,000 in the aggregate; (iii) made any loans or advances to any Contractperson or entity not in excess, in default under, individually or in breach the aggregate, of $100,000, other than ordinary course advances for travel expenses; or violation of(iv) sold, exchanged or otherwise disposed of any Contract of its assets or rights, other than the sale of its inventory in the ordinary course of business. (c) For the purposes of subsections (a) and no event (b) above, all indebtedness, liabilities, agreements, understandings, instruments, contracts and proposed transactions involving the same person or entity (including persons or entities the Company or any applicable Subsidiary of the Company has occurred which, with reason to believe are affiliated therewith) shall be aggregated for the giving purpose of notice or passage meeting the individual minimum dollar amounts of time or both would constitute a default such subsections. (d) The Company maintains disclosure controls and procedures (“Disclosure Controls”) designed to ensure that information required to be disclosed by the Company orin 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) 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 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 Company's knowledge, any other party under any Contract. Other than Contracts which have terminated or expired reliability of financial reporting and the preparation of financial statements for external purposes in accordance with their termsgenerally accepted accounting principles (“GAAP”), each of the Contracts is in full force and effect and including that: (assuming due execution and delivery by the counterparties theretoi) is a legal, valid and binding obligation of the Company or its Subsidiary (as applicable) enforceable against the Company or such Subsidiary transactions are executed in accordance with its terms management’s general or specific authorization; (subject 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 effects Company’s receipts and expenditures are being made only in accordance with authorizations of bankruptcythe 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, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating appropriate action is taken with respect to or affecting creditors' rights generally, general equitable principles any differences. (whether considered f) There is no weakness in a proceeding in equity or at law) and an implied covenant of good faith and fair dealing) and neither the Company nor any of its Subsidiaries has the Company’s Disclosure Controls or Financial Reporting Controls that is required to be disclosed in any knowledge that any Contract is not a legal, valid and binding obligation of the other parties theretoExchange Act Filings, except as so disclosed.

Agreements; Action. (a) Attached hereto as Schedule 3.7(a) to Except for agreements explicitly contemplated by this Agreement and the Disclosure Letter is a list of (i) all "material contracts" within the meaning of Item 601 of Regulation S-K of the SECTransaction Documents, (ii) all of the Company's and its Subsidiaries' contracts, there are no agreements, leases understandings or other instruments to which the Company or proposed transactions between Calico and any of its Subsidiaries officers, directors, Affiliates, or any Affiliate thereof. (b) There are no agreements, understandings, instruments, contracts, proposed transactions, judgments, orders, writs or decrees to which Calico is a party or by which it is bound (other than those in the Companyordinary course of business) that may involve (i) obligations (whether accrued, its Subsidiaries absolute, contingent, liquidated, unliquidated or its properties are bound, which involve payments by otherwise due or to a Company become due) of, or its Subsidiaries during payments to, Calico in excess of $50,000, or (ii) the license of any fiscal year of more than $250,000patent, copyright, trade secret or other proprietary right to or from Calico, or (iii) all provisions restricting or affecting the development, manufacture or distribution of CompanyCalico's and its Subsidiaries' loan agreementsproducts or services, 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 indemnification by Calico with respect to infringements of proprietary rights, or capital leases for equipment to which the Company or any of its Subsidiaries is a party, (v) all contracts for the any written or oral employment of bonus or consulting arrangement between Calico and any officer person, or employee, (vi) all material consulting agreements, (vii) any guarantees by limiting the Company or any freedom 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 Calico to compete in any line of business or competing in any geographic area or with any Person or in any geographical area, and (xi) all contracts restricting the payment of interest upon, or the redemption or conversion of, the Notes (collectively, the "Contracts")person. (bc) Except as set forth on Schedule 3.7(bCalico has not (i) 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 indebtedness for money borrowed or any other liabilities individually in excess of $50,000 or, in the Disclosure Lettercase of indebtedness and/or liabilities individually less than $50,000, neither in excess of $100,000 in the Company nor aggregate, (iii) made any loans or advances to any person, other than ordinary advances for travel expenses, or (iv) sold, exchanged or otherwise disposed of any of its Subsidiaries isassets or rights, nor to other than the Company's knowledge is any other party to any Contract, sale of its inventory in default under, or in breach or violation of, any Contract and no event has occurred which, with the giving ordinary course of notice or passage business. (d) For the purposes 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 Contracts is in full force and effect subsections (b) and (assuming due execution c) above, all indebtedness, liabilities, agreements, understandings, instruments, contracts and delivery by proposed transactions involving the counterparties theretosame person or entity (including persons or entities Calico has reason to believe are affiliated therewith) is a legal, valid and binding obligation shall be aggregated for the purpose of meeting the Company or its Subsidiary individual minimum dollar amounts of such subsections. (as applicablee) enforceable against the Company or such Subsidiary in accordance with its terms (subject 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) and an implied covenant of good faith and fair dealing) and neither the Company nor any of its Subsidiaries has any knowledge that any Contract Calico is not a legalparty to and is not bound by any contract, valid agreement or instrument, or subject to any restriction under its Restated Articles of Incorporation (the "Calico Restated Articles") or Bylaws, that materially and binding obligation adversely affects its business as now conducted or as proposed to be conducted, its properties or its financial condition. (f) Calico 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 Calico with or into any such corporation or corporations, (ii) with 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 Calico or a transaction or series of related transactions in which more than fifty percent (50%) of the voting power of Calico is disposed of, or (iii) regarding any other parties theretoform of acquisition, liquidation, dissolution or winding up of Calico.

Agreements; Action. Except as set forth on Schedule 4.6 or as disclosed in the Exchange Filings: (a) 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 SECThere are no agreements, (ii) all of the Company's and its Subsidiaries' understandings, instruments, contracts, agreementsproposed transactions, leases judgments, orders, writs or other instruments decrees to which the Company or any of its Subsidiaries is a party or by which the Companyit is bound which may involve: (i) obligations (contingent or otherwise) of, its Subsidiaries or its properties are boundpayments to, which involve payments by or to a Company or its Subsidiaries during any fiscal year of more than $250,000, (iii) 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 partyin excess of $250,000 (other than obligations of, (v) all 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 employment ordinary course of business); (ii) the transfer or license of any officer patent, copyright, trade secret or employeeother proprietary right to or from the Company or any of its Subsidiaries (other than licenses arising from the purchase of “off the shelf” or other standard products); (iii) provisions restricting the development, manufacture or distribution of the Company’s or any of its Subsidiaries’ material products or services; or (viiv) all material consulting agreements, (vii) any guarantees indemnification by the Company or any of its Subsidiaries, (viii) all Subsidiaries with respect to infringements of 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 any Person or in any geographical area, and (xi) all contracts restricting the payment of interest upon, or the redemption or conversion of, the Notes (collectively, the "Contracts")proprietary rights. (b) Except as set forth on Schedule 3.7(b) to 4.6, since June 30, 2007 (the Disclosure Letter“Balance Sheet Date”), neither the Company nor any of its Subsidiaries ishas: (i) declared or paid any dividends, nor or authorized or made any distribution upon or with respect to the Company's knowledge is any class or series of its capital stock; (ii) incurred any indebtedness for money borrowed or any other party to any Contractliabilities (other than ordinary course obligations and intercompany loans) individually in excess of $250,000 or, in default underthe case of indebtedness and/or liabilities individually less than $250,000, in excess of $500,000 in the aggregate; (iii) made any loans or advances in breach excess of $500,000, in the aggregate of all such loans and advances, other than ordinary course advances for travel expenses; or violation of(iv) sold, exchanged or otherwise disposed of any Contract of its assets or rights, other than the sale of its inventory in the ordinary course of business. (c) For the purposes of subsections (a) and no event (b) above, all indebtedness, liabilities, agreements, understandings, instruments, contracts and proposed transactions involving the same person or entity (including persons or entities the Company or any Subsidiary of the Company has occurred which, with reason to believe are affiliated therewith) shall be aggregated for the giving purpose of notice or passage meeting the individual minimum dollar amounts of time or both would constitute a default such subsections. (d) The Company maintains disclosure controls and procedures (“Disclosure Controls”) designed to ensure that information required to be disclosed by the Company orin 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) 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 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 Company's knowledge, any other party under any Contract. Other than Contracts which have terminated or expired reliability of financial reporting and the preparation of financial statements for external purposes in accordance with their termsgenerally accepted accounting principles (“GAAP”), each of the Contracts is in full force and effect and including that: (assuming due execution and delivery by the counterparties theretoi) is a legal, valid and binding obligation of the Company or its Subsidiary (as applicable) enforceable against the Company or such Subsidiary transactions are executed in accordance with its terms management’s general or specific authorization; (subject 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 effects Company’s receipts and expenditures are being made only in accordance with authorizations of bankruptcythe 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, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating appropriate action is taken with respect to or affecting creditors' rights generally, general equitable principles any differences. (whether considered f) There is no weakness in a proceeding in equity or at law) and an implied covenant of good faith and fair dealing) and neither the Company nor any of its Subsidiaries has the Company’s Disclosure Controls or Financial Reporting Controls that is required to be disclosed in any knowledge that any Contract is not a legal, valid and binding obligation of the other parties theretoExchange Act Filings, except 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) 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 SECthere are no agreements, (ii) all of the Company's and its Subsidiaries' understandings, instruments, contracts, agreementsproposed transactions, leases judgments, orders, writs or other instruments decrees to which the Company or any of its Subsidiaries is a party or by which the Companyit is bound which may involve: (i) obligations (contingent or otherwise) of, its Subsidiaries or its properties are boundpayments to, which involve payments by or to a Company or its Subsidiaries during any fiscal year of more than $250,000, (iii) 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 such Subsidiary in excess of its Subsidiaries is a party$50,000 (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 (vii) all contracts for the employment transfer or license of any officer patent, copyright, trade secret or employeeother proprietary right to or from the Company or any such Subsidiary (other than licenses arising from the purchase of “off the shelf” or other standard products); or (iii) provisions restricting the development, manufacture or distribution of the Company’s or any such Subsidiary’s products or services; or (viiv) all material consulting agreements, (vii) any guarantees indemnification by the Company or any such Subsidiary with respect to infringements 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 any Person or in any geographical area, and (xi) all contracts restricting the payment of interest upon, or the redemption or conversion of, the Notes (collectively, the "Contracts")proprietary rights. (b) Except as set forth on Schedule 3.7(b) to Since December 31, 2004 (the Disclosure Letter“Balance Sheet Date”), neither the Company nor any of its Subsidiaries ishas: (i) declared or paid any dividends, nor or authorized or made any distribution upon or with respect to the Company's knowledge is any class or series of its capital stock; (ii) incurred any indebtedness for money borrowed or any other party liabilities (other than ordinary course obligations) individually in excess of $50,000 or, in the case of indebtedness and/or liabilities individually less than $50,000, in excess of $100,000 in the aggregate; (iii) made any loans or advances to any Contractperson or entity not in excess, in default under, individually or in breach the aggregate, of $100,000, other than ordinary course advances for travel and other business expenses; or violation of(iv) sold, exchanged or otherwise disposed of any Contract of its assets or rights, other than the sale of its inventory in the ordinary course of business. (c) For the purposes of subsections (a) and no event (b) above, all indebtedness, liabilities, agreements, understandings, instruments, contracts and proposed transactions involving the same person or entity (including persons or entities the Company or any applicable Subsidiary of the Company has occurred which, with reason to believe are affiliated therewith) shall be aggregated for the giving purpose of notice or passage meeting the individual minimum dollar amounts of time or both would constitute a default such subsections. (d) The Company maintains disclosure controls and procedures (“Disclosure Controls”) designed to ensure that information required to be disclosed by the Company orin 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) 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 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 Company's knowledge, any other party under any Contract. Other than Contracts which have terminated or expired reliability of financial reporting and the preparation of financial statements for external purposes in accordance with their termsgenerally accepted accounting principles (“GAAP”), each of the Contracts is in full force and effect and including that: (assuming due execution and delivery by the counterparties theretoi) is a legal, valid and binding obligation of the Company or its Subsidiary (as applicable) enforceable against the Company or such Subsidiary transactions are executed in accordance with its terms management’s general or specific authorization; (subject 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 effects Company’s receipts and expenditures are being made only in accordance with authorizations of bankruptcythe 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, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating appropriate action is taken with respect to or affecting creditors' rights generally, general equitable principles any differences. (whether considered f) There is no weakness in a proceeding in equity or at law) and an implied covenant of good faith and fair dealing) and neither the Company nor any of its Subsidiaries has the Company’s Disclosure Controls or Financial Reporting Controls that would be required to be disclosed in any knowledge that any Contract is not a legal, valid and binding obligation of the other parties theretoExchange Act Filings, except as so disclosed.

Agreements; Action. (a) Attached hereto as Schedule 3.7(aExcept for agreements explicitly contemplated hereby and any Ancillary Agreements, there are no agreements, understandings or proposed transactions between the Company and any of its officers, directors, affiliates or any affiliate thereof. (b) to the Disclosure Letter is a list of (i) all "material contracts" within the meaning of Item 601 of Regulation S-K of the SECThere are no agreements, (ii) all of the Company's and its Subsidiaries' understandings, instruments, contracts, agreementsproposed transactions, leases judgments, orders, writs or other instruments decrees to which the Company or any of its Subsidiaries is a party or by which it is bound which may involve (i) obligations (contingent or otherwise) of, or payments to the Company in excess of, $25,000, or (ii) the license of any patent, copyright, trade secret, or other proprietary right to or from the Company, or (iii) provisions restricting or affecting the development, manufacture or distribution of the Company's products or services or (iv) indemnification by the Company with respect to infringements of proprietary rights. (c) The Company has not (i) declared or paid any dividends, or authorized or made any distribution upon or with respect to any class or series of its Subsidiaries capital stock, (ii) incurred any indebtedness for money borrowed or its properties are boundany other liabilities individually in excess of $25,000 or, which involve payments by or to a Company or its Subsidiaries during any fiscal year in the case of more indebtedness and/or liabilities individually less than $250,00025,000, in excess of $100,000 in the aggregate, (iii) all of Company's and its Subsidiaries' loan agreementsmade any loans or advances to any person, 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 ordinary advances for borrowed money representing payment obligations of $250,000 travel expenses or more, (iv) all material operating sold, exchanged or capital leases for equipment to which the Company or otherwise disposed of any of its Subsidiaries is a partyassets or rights, (v) all contracts for other than the employment of any officer or employee, (vi) all material consulting agreements, (vii) any guarantees by the Company or any sale of its Subsidiaries, (viii) all material distributor and sales agency agreements, (ix) all IP Contracts (as defined inventory in Section 3.11), (x) all contracts restricting the Company or any ordinary course of its Subsidiaries from engaging in any line of business or competing with any Person or in any geographical area, and (xi) all contracts restricting the payment of interest upon, or the redemption or conversion of, the Notes (collectively, the "Contracts")business. (d) For the purposes of subsections (b) Except as set forth on Schedule 3.7(band (c) to above, all indebtedness, liabilities, agreements, understandings, instruments, contracts and proposed transactions involving the Disclosure Letter, neither same person or entity (including persons or entities the Company nor any has reason to believe are affiliated therewith) shall be aggregated for the purpose of its Subsidiaries is, nor to meeting the Company's knowledge is any other party to any Contract, in default under, or in breach or violation of, any Contract and no event has occurred which, with the giving individual minimum dollar amounts 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 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 Company or such Subsidiary in accordance with its terms (subject 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) and an implied covenant of good faith and fair dealing) and neither the Company nor any of its Subsidiaries has any knowledge that any Contract is not a legal, valid and binding obligation of the other parties theretosubsections.

Agreements; Action. (a) Attached hereto Except for agreements explicitly contemplated hereby, there are no agreements, understandings or proposed transactions between the Company or the Company Subsidiary and any of their respective officers, directors, affiliates, or any affiliate thereof except as Schedule 3.7(aset forth on the Balance Sheet. (b) to the Disclosure Letter is a list of (i) all "material contracts" within the meaning of Item 601 of Regulation S-K of the SECThere are no agreements, (ii) all of the Company's and its Subsidiaries' understandings, instruments, contracts, agreementsproposed transactions, leases judgments, orders, writs or other instruments decrees to which the Company or any of its Subsidiaries Seller is a party or by which it is bound that may involve (i) future obligations (contingent or otherwise) of, or payments to the CompanySeller in excess of U.S. $50,000 (other than obligations arising from purchase or sale agreements entered into in the ordinary course of business), its Subsidiaries (ii) the license of any patent, copyright, trade secret or its properties are bound, which involve payments other proprietary or intellectual property right to or from the Seller (other than the license of the Seller’s software and products in the ordinary course of business and other than licenses by the Seller of “off the shelf” or to a Company or its Subsidiaries during any fiscal year of more than $250,000other standard products), (iii) all provisions restricting or affecting the development, manufacture or distribution of Company's and the Seller’s products or services, or (iv) indemnification by the Seller with respect to infringements of proprietary rights (other than indemnification obligations arising from purchase, sale or license agreements entered into in the ordinary course of business). (c) The Company has not (i) declared or paid any dividends or authorized or made any distribution upon or with respect to any class or series of its Subsidiaries' loan agreementscapital stock (except as disclosed in the Company Financial Statements), 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 (ii) incurred any indebtedness for money borrowed and all such instruments or agreements 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 Company Financial Statements (as defined below)) individually in excess of U.S. $50,000 or, in the case of indebtedness and/or liabilities individually less than U.S. $50,000, in excess of U.S. $100,000 in the aggregate, (iii) made any loans or advances to any person, other than ordinary advances for borrowed money representing payment obligations of $250,000 travel expenses (except as specifically disclosed in the Company Financial Statements), or more, (iv) all material operating sold, exchanged or capital leases for equipment to which the Company or otherwise disposed of any of its Subsidiaries is a partyassets or rights, (v) all contracts for other than the employment of any officer or employee, (vi) all material consulting agreements, (vii) any guarantees by the Company or any sale of its Subsidiaries, (viii) all material distributor and sales agency agreements, (ix) all IP Contracts (as defined inventory in Section 3.11), (x) all contracts restricting the Company or any ordinary course of its Subsidiaries from engaging in any line of business or competing with any Person or in any geographical area, and (xi) all contracts restricting the payment of interest upon, or the redemption or conversion of, the Notes (collectively, the "Contracts")business. (d) For the purposes of subsections (b) Except as set forth on Schedule 3.7(band (c) above, all indebtedness, liabilities, agreements, understandings, instruments, contracts and proposed transactions involving the same person or entity (including persons or entities the Seller has reason to believe are affiliated therewith) shall be aggregated for the Disclosure Letterpurpose of meeting the individual minimum dollar amounts of such subsections. (e) Other than with Buyer, 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 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 Subsidiary has engaged in the Company's knowledge, past three (3) months in any discussion (i) with any representative of any corporation or corporations (or other party under any Contract. Other than Contracts which have terminated Person) regarding the consolidation or expired in accordance with their terms, each of the Contracts is in full force and effect and (assuming due execution and delivery by the counterparties thereto) is a legal, valid and binding obligation merger of the Company or its Subsidiary (as applicable) enforceable against the Company Subsidiary with or into any such Subsidiary in accordance corporation or corporations (or other Person), (ii) with its terms (subject to any corporation, partnership, association or other business entity or any individual regarding the effects sale, conveyance or disposition of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to all or affecting creditors' rights generally, general equitable principles (whether considered in a proceeding in equity or at law) and an implied covenant substantially all of good faith and fair dealing) and neither the assets of the Company nor any and/or the Company Subsidiary or a transaction or series of its Subsidiaries has any knowledge that any Contract is not a legal, valid and binding obligation related transactions in which more than fifty percent (50%) of the voting power of the Company and/or the Company Subsidiary is disposed of, or (iii) regarding any other parties theretoform of acquisition, liquidation, dissolution or winding up of the Company and/or the Company Subsidiary.

Agreements; Action. (a) Attached hereto as Schedule 3.7(a) Except with respect to the Disclosure Letter is a list of (i) all the outstanding Bridge Loan Debenture dated December 14, 2006 (as amended), in the original principal amount of $172,500 (" FCP Debenture "material contracts" within the meaning of Item 601 of Regulation S-K of the SEC) with Fountainhead Capital Partners ("FCP"), (ii) all 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) There are no agreements, understandings or proposed transactions between the Company and any of its Subsidiaries' officers, directors, shareholders, affiliates or any affiliate thereof. (b) There are no contracts, agreements, leases instruments, leases, commitments, understandings, proposed transactions, judgments, orders, writs or other instruments decree to which the Company or any of its Subsidiaries is a party or by which it is bound that may involve (i) obligations (contingent or otherwise) of, or payments to, the Company in excess of $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 patent, copyright, trade secret or other proprietary right to or from the Company; or (v) the indemnification by the Company with respect to infringements of proprietary rights. (c) The Company has not (i) declared or paid any dividend or distribution upon or with respect to any class or series of its Subsidiaries equity securities, (ii) incurred any indebtedness from money borrowed or its properties are boundany other liabilities individually in excess of $10,000 or, which involve payments by or to a Company or its Subsidiaries during any fiscal year in the case of more indebtedness and/or liabilities individually less than $250,00010,000, in excess of $25,000 in the aggregate, (iii) all of Company's and its Subsidiaries' loan agreementsmade any loans or advances to any person, 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 ordinary advances for borrowed money representing payment obligations of $250,000 travel expenses, or more, (iv) all material operating sold, exchanged or capital leases for equipment to which the Company or otherwise disposed of any of its Subsidiaries is a party, (v) all contracts for assets or rights except in the employment of any officer or employee, (vi) all material consulting agreements, (vii) any guarantees by the Company or any ordinary course 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 any Person or in any geographical area, and (xi) all contracts restricting the payment of interest upon, or the redemption or conversion of, the Notes (collectively, the "Contracts")business. (d) For the purposes of subsections (b) Except as set forth on Schedule 3.7(band (c) to above, all indebtedness, liabilities, agreements, understandings, instruments, contracts and proposed transactions involving the Disclosure Letter, neither same person or entity (including persons or entities the Company nor any has reason to believe are affiliated therewith) shall be aggregated for the purpose of its Subsidiaries is, nor to meeting the Company's knowledge is any other party to any Contract, in default under, or 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, minimum dollar amounts for each of the 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 Company or such Subsidiary in accordance with its terms (subject 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) and an implied covenant of good faith and fair dealing) and neither the Company nor any of its Subsidiaries has any knowledge that any Contract is not a legal, valid and binding obligation of the other parties theretosubsection.

Agreements; Action. (a) Attached hereto Except as set forth on 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 SEC4.6 or as disclosed in any SEC Reports: there are no agreements, (ii) all of the Company's and its Subsidiaries' understandings, instruments, contracts, agreementsproposed transactions, leases judgments, orders, writs or other instruments decrees to which the Company or any of its Subsidiaries is a party or by which the Companyit is bound which may involve: (i) obligations (contingent or otherwise) of, its Subsidiaries or its properties are boundpayments to, which involve payments by or to a Company or its Subsidiaries during any fiscal year of more than $250,000, (iii) 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 partyin excess of $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 (vii) all contracts for the employment transfer or license of any officer patent, copyright, trade secret or employeeother proprietary right to or from the Company or any of its Subsidiaries (other than licenses arising from the purchase of "off the shelf" or other standard products); or (iii) provisions restricting the development, manufacture or distribution of the Company's or any of its Subsidiaries products or services; or (viiv) all material consulting agreements, (vii) any guarantees indemnification by the Company or any of its SubsidiariesSubsidiaries with respect to infringements of proprietary rights. Since December 31, 2006 (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 any Person or in any geographical area, and (xi) all contracts restricting the payment of interest upon, or the redemption or conversion of, the Notes (collectively, the "ContractsBalance Sheet Date"). (b) Except as set forth on Schedule 3.7(b) to the Disclosure Letter, neither the Company nor any of its Subsidiaries ishas: (i) declared or paid any dividends, nor or authorized or made any distribution upon or with respect to any class or series of its capital stock; (ii) incurred any indebtedness for money borrowed or any other liabilities (other than ordinary course obligations) individually in excess of $50,000 or, in the case of indebtedness and/or liabilities individually less than $50,000, in excess of $100,000 in the aggregate; (iii) made any loans or advances to any person or entity not in excess, individually or in the aggregate, of $100,000, other than ordinary 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. For the purposes of subsections (a) and (b) above, all indebtedness, liabilities, agreements, understandings, instruments, contracts and 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 ("Disclosure Controls") designed to ensure that information required to be disclosed by the Company in the 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 knowledge is any other party to any Contract, assets in default underall material respects. The Company maintains internal control over financial reporting ("Financial Reporting Controls") designed by, or in breach or violation under the supervision 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 knowledgeprincipal executive and principal financial officers, any and effected by the Company's board of directors, management, and other party under any Contract. Other than Contracts which have terminated or expired personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with their termsgenerally accepted accounting principles ("GAAP"), each of the 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 Company or such Subsidiary including that: transactions are executed in accordance with its terms (subject 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 effects Company's receipts and expenditures are being made only in accordance with authorizations of bankruptcythe 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, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating appropriate action is taken with respect to or affecting creditors' rights generally, general equitable principles (whether considered any differences. There is no weakness in a proceeding in equity or at law) and an implied covenant of good faith and fair dealing) and neither the Company nor any of its Subsidiaries has the Company's Disclosure Controls or Financial Reporting Controls that is required to be disclosed in any knowledge that any Contract is not a legal, valid and binding obligation of the other parties theretoSEC Reports, except as so disclosed.

Agreements; Action. (a) Attached hereto as The Disclosure Schedule 3.7(a) to the Disclosure Letter is a list of (i) sets forth all "material contracts" within the meaning of Item 601 of Regulation S-K of the SEC, (ii) all of the Company's and its Subsidiaries' contracts, agreements, leases understandings or other instruments to which the Company or proposed transactions between any Obligor and any of its Subsidiaries employees, officers, directors, members, managers, partners, or Affiliates, or any Affiliate thereof, including without limitation any loans or advances to any such Person in excess of $10,000, other than ordinary advances to employees for travel expenses, and other than employment, confidentiality, stock option and inventions agreements. (b) The Disclosure Schedule lists all agreements, understandings, instruments, contracts, proposed transactions, judgments, orders, writs or decrees to which any Obligor is a party or by which it is bound that may involve (the Company“Material Contracts”): (i) obligations (contingent or otherwise) of, its Subsidiaries or its properties are bound, which involve payments by any Obligor in excess of, $350,000; or (ii) the license of any patent, copyright, trade secret or other proprietary right to a Company or its Subsidiaries during from any fiscal year Obligor outside of more than $250,000, the ordinary course of business; or (iii) all the granting of Companyany rights related to the development, manufacture, production, assembly, licensing, marketing, sate or distribution of any Obligor's and its Subsidiaries' loan agreements, bank lines products or services outside the ordinary course of credit agreements, indentures, mortgages, deeds of trust, pledge and security agreements, factoring agreements, conditional sales contracts, letters of credit business; 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 those five (5) individual (x) licenses of any patent, copyright, trade secret or capital leases for equipment other proprietary right to or from any Obligor in the ordinary course of business or (y) grants of any rights related to the development, manufacture, production, assembly, licensing, marketing, sale or distribution of any Obligor's products or services in the ordinary course of business, which constitute the Company top five (5) deals based upon the aggregate amounts payable or paid to or from any of its Subsidiaries is a party, Obligor with respect thereto in the consecutive 12-month period preceding the Closing Date; or (v) all contracts for indemnification by any Obligor with respect to infringements of proprietary rights, except those listed in. To the employment best 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 any Person or in any geographical area, and (xi) all contracts restricting the payment of interest upon, or the redemption or conversion of, the Notes (collectively, the "Contracts"). (b) Except as set forth on Schedule 3.7(b) to the Disclosure Letter, neither the Company nor any of its Subsidiaries is, nor to the Company's knowledge (without investigation), all Material Contracts are valid and binding, and each party thereto is in compliance therewith. None of the Obligors has received any other party written indication of an intention to terminate any Material Contract by any of the parties to any such Material Contract. (c) Since the date of the Financial Statements, the Company has not incurred any Indebtedness in default underexcess of $350,000, individually or 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 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 Company or such Subsidiary in accordance with its terms (subject 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) and an implied covenant of good faith and fair dealing) and neither the Company nor any of its Subsidiaries has any knowledge that any Contract is not a legal, valid and binding obligation of the other parties theretoaggregate.

Agreements; Action. Except, in each case, as set forth on Schedule 4.6 or as disclosed in any Exchange Act Filings: (a) 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 SECthere are no agreements, (ii) all of the Company's and its Subsidiaries' understandings, instruments, contracts, agreementsproposed transactions, leases judgments, orders, writs or other instruments decrees to which the Company or any of its Subsidiaries is a party or by which the Companyit is bound which may involve: (i) obligations (contingent or otherwise) of, its Subsidiaries or its properties are boundpayments to, which involve payments by or to a Company or its Subsidiaries during any fiscal year of more than $250,000, (iii) 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 such Subsidiary in excess of its Subsidiaries is a party$50,000 (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 (vii) all contracts for the employment transfer or license of any officer patent, copyright, trade secret or employeeother proprietary right to or from the Company or any such Subsidiary (other than licenses arising from the purchase of “off the shelf” or other standard products); or (iii) provisions restricting the development, manufacture or distribution of the Company’s or any such Subsidiary’s products or services; or (viiv) all material consulting agreements, (vii) any guarantees indemnification by the Company or any such Subsidiary with respect to infringements 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 any Person or in any geographical area, and (xi) all contracts restricting the payment of interest upon, or the redemption or conversion of, the Notes (collectively, the "Contracts")proprietary rights. (b) Except as set forth on Schedule 3.7(b) to Since December 31, 2003 (the Disclosure Letter“Balance Sheet Date”), neither the Company nor any of its Subsidiaries ishas: (i) declared or paid any dividends, nor or authorized or made any distribution upon or with respect to the Company's knowledge is any class or series of its capital stock; (ii) incurred any indebtedness for money borrowed or any other party liabilities (other than ordinary course obligations) individually in excess of $50,000 or, in the case of indebtedness and/or liabilities individually less than $50,000, in excess of $100,000 in the aggregate; (iii) made any loans or advances to any Contractperson or entity not in excess, in default under, individually or in breach the aggregate, of $100,000, other than ordinary course advances for travel expenses; or violation of(iv) sold, exchanged or otherwise disposed of any Contract of its assets or rights, other than the sale of its inventory in the ordinary course of business. (c) For the purposes of subsections (a) and no event (b) above, all indebtedness, liabilities, agreements, understandings, instruments, contracts and proposed transactions involving the same person or entity (including persons or entities the Company or any applicable Subsidiary of the Company has occurred which, with reason to believe are affiliated therewith) shall be aggregated for the giving purpose of notice or passage meeting the individual minimum dollar amounts of time or both would constitute a default such subsections. (d) The Company maintains disclosure controls and procedures (“Disclosure Controls”) designed to ensure that information required to be disclosed by the Company orin 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) 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 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 Company's knowledge, any other party under any Contract. Other than Contracts which have terminated or expired reliability of financial reporting and the preparation of financial statements for external purposes in accordance with their termsgenerally accepted accounting principles (“GAAP”), each of the Contracts is in full force and effect and including that: (assuming due execution and delivery by the counterparties theretoi) is a legal, valid and binding obligation of the Company or its Subsidiary (as applicable) enforceable against the Company or such Subsidiary transactions are executed in accordance with its terms management’s general or specific authorization; (subject 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 effects Company’s receipts and expenditures are being made only in accordance with authorizations of bankruptcythe 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, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating appropriate action is taken with respect to or affecting creditors' rights generally, general equitable principles any differences. (whether considered f) There is no weakness in a proceeding in equity or at law) and an implied covenant of good faith and fair dealing) and neither the Company nor any of its Subsidiaries has the Company’s Disclosure Controls or Financial Reporting Controls that would be required to be disclosed in any knowledge that any Contract is not a legal, valid and binding obligation of the other parties theretoExchange Act Filings, except as so disclosed.

Agreements; Action. (a) Attached hereto as Schedule 3.7(a) to Except for agreements explicitly contemplated hereby, by the Disclosure Letter is a list of (i) all "material contracts" within Investors' Rights Agreement, the meaning of Item 601 of Regulation S-K of the SECStockholders' Agreement, (ii) all of any Ancillary Agreements, and that certain Stockholders' Agreement dated April 18, 1995 among the Company's , the Series A Preferred Stockholders and its Subsidiaries' contractsthe other parties named therein and Amendment No. 1 thereto dated as of February 20, 1996, there are no agreements, leases understandings or other instruments to which proposed transactions between the Company or and any of its Subsidiaries is a party or by which the Companyofficers, its Subsidiaries or its properties are bounddirectors, which involve payments by or to a Company or its Subsidiaries during any fiscal year of more than $250,000affiliates, (iii) 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 any Person or in any geographical area, and (xi) all contracts restricting the payment of interest upon, or the redemption or conversion of, the Notes (collectively, the "Contracts")affiliate thereof. (b) Except as set forth The Company does not have any contract, agreement, lease, commitment or proposed transaction, written or oral, absolute or contingent, other than (i) contracts for the purchase of supplies and services that were entered into in the ordinary course of business and that do not involve more than $50,000, and do not extend for more than one (1) year beyond the date hereof, (ii) sales contracts entered into in the ordinary course of business, and (iii) contracts terminable at will by the Company on Schedule 3.7(bno more than thirty (30) days notice without cost or liability to the Disclosure LetterCompany and that do not involve any employment or consulting arrangement and are not material to the conduct of the Company's business. For the purpose of this Section, neither employment and consulting contracts and contracts with labor unions, and license agreements and any other agreements relating to the acquisition or disposition of the Company's technology, shall not be considered to be contracts entered into in the ordinary course of business. (c) The Company nor has not (i) 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 indebtedness for money borrowed or any other liabilities individually in excess of $50,000, in the case of indebtedness and/or liabilities individually less than $50,000, in excess of $150,000 in the aggregate, (iii) made any loans or advances to any person, other than ordinary advances for travel expenses, or (iv) sold, exchanged or otherwise disposed of any of its Subsidiaries isassets or rights, nor to other than the Company's knowledge is any other party to any Contractsale of its inventory in the ordinary course of business. (d) For the purposes of subsections (b) and (c) above, in default underall indebtedness, liabilities, agreements, understandings, instruments, contracts and proposed transactions involving the same person or in breach entity (including persons 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 entities the Company or, has reason to believe are affiliated therewith) shall be aggregated for the Company's knowledge, any other party under any Contract. Other than Contracts which have terminated or expired in accordance with their terms, each purpose of meeting the Contracts is in full force and effect and (assuming due execution and delivery by the counterparties thereto) is a legal, valid and binding obligation individual minimum dollar amounts of the Company or its Subsidiary (as applicable) enforceable against the Company or such Subsidiary in accordance with its terms (subject 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) and an implied covenant of good faith and fair dealing) and neither the Company nor any of its Subsidiaries has any knowledge that any Contract is not a legal, valid and binding obligation of the other parties theretosubsections.

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) 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 SECthere are no agreements, (ii) all of the Company's and its Subsidiaries' understandings, instruments, contracts, agreementsproposed transactions, leases judgments, orders, writs or other instruments decrees to which the Company Parent or any of its Subsidiaries is a party or by which it is bound which may involve: (i) obligations (contingent or otherwise) of, or payments to, the Company, its Subsidiaries or its properties are bound, which involve payments by or to a Company or its Subsidiaries during any fiscal year of more than $250,000, (iii) 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 Parent or any of its Subsidiaries is a partyin excess of $50,000 (other than obligations of, (v) all contracts for or payments to, 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 Parent or any of its Subsidiaries arising from engaging purchase or sale agreements entered into in the ordinary course of business); or (ii) the transfer or license of any line patent, copyright, trade secret or other proprietary right to or from the Parent or any of business its Subsidiaries (other than licenses arising from the purchase of “off the shelf” or competing with any Person other standard products); or in any geographical area, and (xiiii) all contracts provisions restricting the payment development, manufacture or distribution of interest upon, the Parent’s or any of its Subsidiaries products or services; or (iv) indemnification by the redemption Parent or conversion of, the Notes (collectively, the "Contracts")any of its Subsidiaries with respect to infringements of proprietary rights. (b) Except as set forth on Schedule 3.7(b) to in the Disclosure LetterParent’s quarterly unaudited financial statements for its fiscal quarter ended December 31, 2004, since September 30, 2004 (the “Balance Sheet Date”), neither the Company Parent nor any of its Subsidiaries ishas: (i) declared or paid any dividends, nor or authorized or made any distribution upon or with respect to the Company's knowledge is any class or series of its capital stock; (ii) incurred any indebtedness for money borrowed or any other party liabilities (other than ordinary course obligations) individually in excess of $50,000 or, in the case of indebtedness and/or liabilities individually less than $50,000, in excess of $100,000 in the aggregate; (iii) made any loans or advances to any Contractperson or entity not in excess, individually or in the aggregate, of $100,000, other than ordinary 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) For the purposes of subsections (a) and (b) above, all indebtedness, liabilities, agreements, understandings, instruments, contracts and 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) The Parent makes and keep books, records, and accounts, that, in default underreasonable detail, accurately and fairly reflect the transactions and dispositions of the Parent’s assets. The Parent maintains internal control over financial reporting (“Financial Reporting Controls”) designed by, or in breach or violation under the supervision of, any Contract the Parent’s principal executive and no event has occurred whichprincipal financial officers, with the giving of notice or passage of time or both would constitute a default and effected by the Company orParent’s board of directors, management, and other personnel, to provide reasonable assurance regarding the Company's knowledge, any other party under any Contract. Other than Contracts which have terminated or expired reliability of financial reporting and the preparation of financial statements for external purposes in accordance with their termsgenerally accepted accounting principles (“GAAP”), each of the Contracts is in full force and effect and including that: (assuming due execution and delivery by the counterparties theretoi) is a legal, valid and binding obligation of the Company or its Subsidiary (as applicable) enforceable against the Company or such Subsidiary transactions are executed in accordance with its terms management’s general or specific authorization; (subject 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 effects Parent’s receipts and expenditures are being made only in accordance with authorizations of bankruptcythe 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, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating appropriate action is taken with respect to or affecting creditors' rights generally, general equitable principles any differences. (whether considered f) There is no weakness in a proceeding in equity or at law) and an implied covenant of good faith and fair dealing) and neither the Company nor any of its Subsidiaries has the Parent’s Disclosure Controls or Financial Reporting Controls that is required to be disclosed in any knowledge that any Contract is not a legal, valid and binding obligation of the other parties theretoExchange Act Filings, except as so disclosed.

Agreements; Action. (aExcept as set forth on Schedule 12(f) Attached hereto or as Schedule 3.7(a) to the Disclosure Letter is a list of disclosed in any SEC Reports or Exchange Act Filings: (i) all "material contracts" within the meaning of Item 601 of Regulation S-K of the SECThere are no agreements, (ii) all of the Company's and its Subsidiaries' understandings, instruments, contracts, agreementsproposed transactions, leases judgments, orders, writs or other instruments decrees to which the Company it or any of its Subsidiaries is a party or to its knowledge by which the Companyit is bound which may involve: (i) obligations (contingent or otherwise) of, its Subsidiaries or its properties are boundpayments to, which involve payments by or to a Company or its Subsidiaries during any fiscal year of more than $250,000, (iii) 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 it or any of its Subsidiaries is a partyin excess of $100,000 (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 (vii) all contracts for the employment transfer or license of any officer patent, copyright, trade secret or employeeother proprietary right to or from it (other than licenses arising from the purchase of "off the shelf" or other standard products); or (iii) provisions restricting the development, (vi) all material consulting agreements, (vii) any guarantees by the Company manufacture or distribution of its or any of its Subsidiaries, ' products or services; or (viiiiv) all material distributor and sales agency agreements, (ix) all IP Contracts (as defined in Section 3.11), (x) all contracts restricting the Company indemnification by it or any of its Subsidiaries from engaging in any line with respect to infringements of business or competing with any Person or in any geographical area, and (xi) all contracts restricting the payment of interest upon, or the redemption or conversion of, the Notes (collectively, the "Contracts")proprietary rights. (bii) Except as set forth on Schedule 3.7(bSince December 31, 2005 (the "Balance Sheet Date") to the Disclosure Letter, neither the Company it nor any of its Subsidiaries ishas: (i) declared or paid any dividends, nor or authorized or made any distribution upon or with respect to the Company's knowledge is any class or series of its capital stock; (ii) incurred any indebtedness for money borrowed or any other party liabilities (other than ordinary course obligations) individually in excess of $100,000 or, in the case of indebtedness and/or liabilities individually less than $75,000, in excess of $150,000 in the aggregate; (iii) made any loans or advances to any ContractPerson not in excess, individually or in the aggregate, of $150,000, other than 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. (iii) For the purposes of subsections (i) and (ii) of this Section 12(f), all indebtedness, liabilities, agreements, understandings, instruments, contracts and proposed transactions involving the same Person (including Persons it or 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. (iv) 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 SEC. (v) The Parent makes and keeps books, records, and accounts, that, in default underreasonable 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 in breach or violation under the supervision of, any Contract its principal executive and no event has occurred whichprincipal financial officers, with the giving and effected by its board of notice or passage of time or both would constitute a default by the Company ordirectors, management, and other personnel, to provide reasonable assurance regarding the Company's knowledge, any other party under any Contract. Other than Contracts which have terminated or expired reliability of financial reporting and the preparation of financial statements for external purposes in accordance with their termsGAAP, each of the Contracts is in full force and effect and including that: (assuming due execution and delivery by the counterparties thereto1) is a legal, valid and binding obligation of the Company or its Subsidiary (as applicable) enforceable against the Company or such Subsidiary 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 terms receipts and expenditures are being made only in accordance with authorizations of the Parent's management and board of directors; (subject 4) transactions are recorded as necessary to maintain accountability for assets; and (5) the effects of bankruptcyrecorded accountability for assets is compared with the existing assets at reasonable intervals, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating appropriate action is taken with respect to or affecting creditors' rights generally, general equitable principles any differences. (whether considered vi) There is no weakness in a proceeding in equity or at law) and an implied covenant of good faith and fair dealing) and neither the Company nor any of its Subsidiaries has Disclosure Controls or Financial Reporting Controls that is required to be disclosed in any knowledge that any Contract is not a legal, valid and binding obligation of the other parties theretoExchange Act Filings, except as so disclosed.

Agreements; Action. Except as set forth on Schedule 4.6 or as disclosed in any Exchange Act Filings: (a) 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 SECthere are no agreements, (ii) all of the Company's and its Subsidiaries' understandings, instruments, contracts, agreementsproposed transactions, leases judgments, orders, writs or other instruments decrees to which the Company or any of its Subsidiaries is a party or by which the Companyit is bound which may involve: (i) obligations (contingent or otherwise) of, its Subsidiaries or its properties are boundpayments to, which involve payments by or to a Company or its Subsidiaries during any fiscal year of more than $250,000, (iii) 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 partyin excess of $ 250,000 (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 (vii) all contracts for the employment transfer or license of any officer patent, copyright, trade secret or employeeother proprietary right to or from the Company or any of its Subsidiaries (other than licenses arising from the purchase of "off the shelf" or other standard products); or (iii) provisions restricting the development, manufacture or distribution of the Company's or any of its Subsidiaries products or services; or (viiv) all material consulting agreements, (vii) any guarantees indemnification by the Company or any of its SubsidiariesSubsidiaries with respect to infringements of proprietary rights. (b) Since June 30, 2005 (viii) all material distributor and sales agency agreements, (ix) all IP Contracts (as defined in Section 3.11the "Balance Sheet Date"), (x) all contracts restricting the Company has not: (i) 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 indebtedness for money borrowed or any other liabilities (other than ordinary course obligations) individually in excess of $50,000 or, in the case of indebtedness and/or liabilities individually less than $50,000, in excess of $100,000 in the aggregate; (iii) made any loans or advances to any person or entity not in excess, individually or in the aggregate, of $100,000, other than ordinary course advances for travel expenses; or (iv) sold, exchanged or otherwise disposed of any of its Subsidiaries from engaging assets or rights, other than the sale of its inventory in any line the ordinary course of business business. (c) For the purposes of subsections (a) and (b) above, all indebtedness, liabilities, agreements, understandings, instruments, contracts and proposed transactions involving the same person or competing with any Person 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. (d) The Company maintains disclosure controls and procedures ("Disclosure Controls") designed to ensure that information required to be disclosed by the Company in any geographical areathe 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 (xi) all contracts restricting the payment of interest upon, or the redemption or conversion of, the Notes (collectively, the "ContractsSEC"). (be) Except as set forth on Schedule 3.7(b) to The Company makes and keep books, records, and accounts, that, in reasonable detail, accurately and fairly reflect the Disclosure Letter, neither the Company nor any transactions and dispositions of its Subsidiaries is, nor to the Company's knowledge is any other party to any Contract, in default underassets. The Company maintains internal control over financial reporting ("Financial Reporting Controls") designed by, or in breach or violation under the supervision 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 knowledgeprincipal executive and principal financial officers, any and effected by the Company's board of directors, management, and other party under any Contract. Other than Contracts which have terminated or expired personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with their termsgenerally accepted accounting principles ("GAAP"), each of the Contracts is in full force and effect and including that: (assuming due execution and delivery by the counterparties theretoi) is a legal, valid and binding obligation of the Company or its Subsidiary (as applicable) enforceable against the Company or such Subsidiary transactions are executed in accordance with its terms management's general or specific authorization; (subject 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 effects Company's receipts and expenditures are being made only in accordance with authorizations of bankruptcythe 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, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating appropriate action is taken with respect to or affecting creditors' rights generally, general equitable principles any differences. (whether considered f) There is no weakness in a proceeding in equity or at law) and an implied covenant of good faith and fair dealing) and neither the Company nor any of its Subsidiaries has the Company's Disclosure Controls or Financial Reporting Controls that is required to be disclosed in any knowledge that any Contract is not a legal, valid and binding obligation of the other parties theretoExchange Act Filings, except as so disclosed.

Agreements; Action. (aExcept as set forth on Schedule 12(f) Attached hereto or as Schedule 3.7(a) to the Disclosure Letter is a list of disclosed in any Exchange Act Filings: (i) all "material contracts" within the meaning of Item 601 of Regulation S-K of the SECThere are no agreements, (ii) all of the Company's and its Subsidiaries' understandings, instruments, contracts, agreementsproposed transactions, leases judgments, orders, writs or other instruments decrees to which the Company it or any of its Subsidiaries is a party or to its knowledge by which the Companyit is bound which may involve: (i) obligations (contingent or otherwise) of, its Subsidiaries or its properties are boundpayments to, which involve payments by or to a Company or its Subsidiaries during any fiscal year of more than $250,000, (iii) 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 it or any of its Subsidiaries is a partyin excess of $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 (vii) all contracts for the employment transfer or license of any officer patent, copyright, trade secret or employeeother proprietary right to or from it (other than licenses arising from the purchase of "off the shelf" or other standard products); or (iii) provisions restricting the development, (vi) all material consulting agreements, (vii) any guarantees by the Company manufacture or distribution of its or any of its Subsidiaries, ' products or services; or (viiiiv) all material distributor and sales agency agreements, (ix) all IP Contracts (as defined in Section 3.11), (x) all contracts restricting the Company indemnification by it or any of its Subsidiaries from engaging in any line with respect to infringements of business or competing with any Person or in any geographical area, and (xi) all contracts restricting the payment of interest upon, or the redemption or conversion of, the Notes (collectively, the "Contracts")proprietary rights. (bii) Except as set forth on Schedule 3.7(bSince September 30, 2005 (the "Balance Sheet Date") to the Disclosure Letter, neither the Company it nor any of its Subsidiaries ishas: (i) declared or paid any dividends, nor or authorized or made any distribution upon or with respect to the Company's knowledge is any class or series of its capital stock; (ii) incurred any indebtedness for money borrowed or any other party liabilities (other than ordinary course obligations) individually in excess of $50,000 or, in the case of indebtedness and/or liabilities individually less than $50,000, in excess of $100,000 in the aggregate; (iii) made any loans or advances to any ContractPerson not in excess, individually or in the aggregate, of $100,000, other than 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. (iii) For the purposes of subsections (i) and (ii) of this Section 12(f), all indebtedness, liabilities, agreements, understandings, instruments, contracts and proposed transactions involving the same Person (including Persons it or 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. (iv) 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 SEC. (v) The Parent makes and keeps books, records, and accounts, that, in default underreasonable 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 in breach or violation under the supervision of, any Contract its principal executive and no event has occurred whichprincipal financial officers, with the giving and effected by its board of notice or passage of time or both would constitute a default by the Company ordirectors, management, and other personnel, to provide reasonable assurance regarding the Company's knowledge, any other party under any Contract. Other than Contracts which have terminated or expired reliability of financial reporting and the preparation of financial statements for external purposes in accordance with their termsGAAP, each of the Contracts is in full force and effect and including that: (assuming due execution and delivery by the counterparties thereto1) is a legal, valid and binding obligation of the Company or its Subsidiary (as applicable) enforceable against the Company or such Subsidiary 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 terms receipts and expenditures are being made only in accordance with authorizations of the Parent's management and board of directors; (subject 4) transactions are recorded as necessary to maintain accountability for assets; and (5) the effects of bankruptcyrecorded accountability for assets is compared with the existing assets at reasonable intervals, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating appropriate action is taken with respect to or affecting creditors' rights generally, general equitable principles any differences. (whether considered vi) There is no weakness in a proceeding in equity or at law) and an implied covenant of good faith and fair dealing) and neither the Company nor any of its Subsidiaries has Disclosure Controls or Financial Reporting Controls that is required to be disclosed in any knowledge that any Contract is not a legal, valid and binding obligation of the other parties theretoExchange Act Filings, except as so disclosed.

Agreements; Action. Except as set forth on Schedule 4.6 or as disclosed in any Exchange Act Filings: (a) 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 SECthere are no agreements, (ii) all of the Company's and its Subsidiaries' understandings, instruments, contracts, agreementsproposed transactions, leases judgments, orders, writs or other instruments decrees to which the Company or any of its Subsidiaries is a party or by which the Companyit is bound which may involve: (i) obligations (contingent or otherwise) of, its Subsidiaries or its properties are boundpayments to, which involve payments by or to a Company or its Subsidiaries during any fiscal year of more than $250,000, (iii) 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 such Subsidiary in excess of its Subsidiaries is a party$100,000 (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 (vii) all contracts for the employment transfer or license of any officer patent, copyright, trade secret or employeeother proprietary right to or from the Company or any such Subsidiary (other than licenses arising from the purchase of “off the shelf” or other standard products); or (iii) provisions restricting the development, manufacture or distribution of the Company’s or any such Subsidiary’s products or services; or (viiv) all material consulting agreements, (vii) any guarantees indemnification by the Company or any such Subsidiary with respect to infringements 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 any Person or in any geographical area, and (xi) all contracts restricting the payment of interest upon, or the redemption or conversion of, the Notes (collectively, the "Contracts")proprietary rights. (b) Except as set forth on Schedule 3.7(b) to Since December 31, 2003 (the Disclosure Letter“Balance Sheet Date”), neither the Company nor any of its Subsidiaries ishas: (i) declared or paid any dividends, nor or authorized or made any distribution upon or with respect to the Company's knowledge is any class or series of its capital stock; (ii) incurred any indebtedness for money borrowed or any other party liabilities (other than ordinary course obligations) individually in excess of $100,000 or, in the case of indebtedness and/or liabilities individually less than $100,000, in excess of $250,000 in the aggregate; (iii) made any loans or advances to any Contractperson or entity not in excess, in default under, individually or in breach the aggregate, of $250,000, other than ordinary course advances for travel expenses; or violation of(iv) sold, exchanged or otherwise disposed of any Contract of its assets or rights, other than the sale of its inventory in the ordinary course of business. (c) For the purposes of subsections (a) and no event (b) above, all indebtedness, liabilities, agreements, understandings, instruments, contracts and proposed transactions involving the same person or entity (including persons or entities the Company or any applicable Subsidiary of the Company has occurred which, with reason to believe are affiliated therewith) shall be aggregated for the giving purpose of notice or passage meeting the individual minimum dollar amounts of time or both would constitute a default such subsections. (d) The Company maintains disclosure controls and procedures (“Disclosure Controls”) designed to ensure that information required to be disclosed by the Company orin 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) 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 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 Company's knowledge, any other party under any Contract. Other than Contracts which have terminated or expired reliability of financial reporting and the preparation of financial statements for external purposes in accordance with their termsgenerally accepted accounting principles (“GAAP”), each of the Contracts is in full force and effect and including that: (assuming due execution and delivery by the counterparties theretoi) is a legal, valid and binding obligation of the Company or its Subsidiary (as applicable) enforceable against the Company or such Subsidiary transactions are executed in accordance with its terms management’s general or specific authorization; (subject 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 effects Company’s receipts and expenditures are being made only in accordance with authorizations of bankruptcythe 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, insolvencyand appropriate action is taken with respect to any differences. (f) To the Company’s knowledge, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors' rights generally, general equitable principles (whether considered there is no weakness in a proceeding in equity or at law) and an implied covenant of good faith and fair dealing) and neither the Company nor any of its Subsidiaries has the Company’s Disclosure Controls or Financial Reporting Controls that is required to be disclosed in any knowledge that any Contract is not a legal, valid and binding obligation of the other parties theretoExchange Act Filings, except as so disclosed.

Agreements; Action. (a) Attached hereto as Schedule 3.7(a) to the Disclosure Letter is a list of (i) all "material contracts" within the meaning Except for agreements explicitly contemplated hereby, there are no agreements, understandings or proposed transactions between Company and any of Item 601 of Regulation S-K of the SECits officers, directors, affiliates or any affiliate thereof. (ii) all of the Company's and its Subsidiaries' There are no agreements, understandings, instruments, contracts, agreementsproposed transactions, leases judgments, orders, writs or other instruments decrees to which the Company or any of its Subsidiaries is a party or to its knowledge by which it is bound which may involve (i) obligations (contingent or otherwise) of, or payments to, Company Group in excess of Twenty-Five Thousand Dollars ($25,000) (other than obligations of, or payments to, Company Group arising from purchase or sale agreements entered into in the Companyordinary course of business), its Subsidiaries or its properties are bound(ii) the license of any patent, which involve payments by copyright, trade secret or other proprietary right to a or from Company Group (other than licenses arising from the purchase of "off the shelf" or its Subsidiaries during any fiscal year of more than $250,000other standard products), or (iii) all indemnification by Company Group with respect to infringements 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 proprietary rights (other than for borrowed money representing payment indemnification obligations arising from purchase or sale agreements entered into in the ordinary course 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 any Person or in any geographical area, and (xi) all contracts restricting the payment of interest upon, or the redemption or conversion of, the Notes (collectively, the "Contracts"business). (biii) Except as set forth on Schedule 3.7(bCompany Group has not (A) incurred any Indebtedness or any other liabilities (other than trade obligations incurred in the ordinary course of business) individually in excess of Twenty-Five Thousand Dollars ($25,000) or, in the case of Indebtedness and/or liabilities individually less than Twenty-Five Thousand Dollars ($25,000), in excess of Fifty Thousand Dollars ($50,000) in the aggregate, (B) made any loans or advances to the Disclosure Letterany Person, neither the Company nor other than ordinary advances for travel expenses, or (C) sold, exchanged or otherwise disposed of any of its Subsidiaries isassets or rights, nor to other than the Company's knowledge is any other party to any Contract, sale of its inventory in default under, or in breach or violation of, any Contract and no event has occurred which, with the giving ordinary course of notice or passage business. (iv) For the purposes 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 Contracts is in full force and effect subsections (ii) and (assuming due execution iii) above, all Indebtedness, liabilities, agreements, understandings, instruments, contracts and delivery by proposed transactions involving the counterparties theretosame Person (including Persons Company has reason to believe are Affiliates of Company) is a legal, valid and binding obligation shall be aggregated for the purpose of meeting the Company or its Subsidiary (as applicable) enforceable against the Company or individual minimum dollar amounts of such Subsidiary in accordance with its terms (subject 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) and an implied covenant of good faith and fair dealing) and neither the Company nor any of its Subsidiaries has any knowledge that any Contract is not a legal, valid and binding obligation of the other parties theretosubsections.

Agreements; Action. Except as set forth on Schedule 4.6: ------------------- (a) 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 SECthere are no agreements, (ii) all of the Company's and its Subsidiaries' understandings, instruments, contracts, agreementsproposed transactions, leases judgments, orders, writs or other instruments decrees to which the Company or any of its Subsidiaries is a party or by which the Companyit is bound which may involve: (i) obligations (contingent or otherwise) of, its Subsidiaries or its properties are boundpayments to, which involve payments by or to a Company or its Subsidiaries during any fiscal year of more than $250,000, (iii) 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 partyin excess of $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 (vii) all contracts for the employment transfer or license of any officer patent, copyright, trade secret or employeeother proprietary right to or from the Company or any of its Subsidiaries (other than licenses arising from the purchase of "off the shelf" or other standard products); or (iii) provisions restricting the development, manufacture or distribution of the Company's or any of its Subsidiaries products or services; or (viiv) all material consulting agreements, (vii) any guarantees indemnification 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 Subsidiaries with respect to infringements of its Subsidiaries from engaging in any line of business or competing with any Person or in any geographical area, and (xi) all contracts restricting the payment of interest upon, or the redemption or conversion of, the Notes (collectively, the "Contracts")proprietary rights. (b) Except as set forth on Schedule 3.7(b) to the Disclosure Letter, neither Neither the Company nor any of its Subsidiaries ishas: (i) declared or paid any dividends, nor or authorized or made any distribution upon or with respect to any class or series of its capital stock; (ii) incurred any indebtedness for money borrowed or any other liabilities (other than ordinary course obligations) individually in excess of $50,000 or, in the case of indebtedness and/or liabilities individually less than $50,000, in excess of $100,000 in the aggregate; (iii) made any loans or advances to any person or entity not in excess, individually or in the aggregate, of $100,000, other than ordinary 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) For the purposes of subsections (a) and (b) above, all indebtedness, liabilities, agreements, understandings, instruments, contracts and 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 makes and keeps books, records, and accounts, that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the Company's knowledge is any other party to any Contract, in default underassets. The Company maintains internal control over financial reporting ("Financial Reporting Controls") designed by, or in breach or violation under the supervision 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 knowledgeprincipal executive and principal financial officers, any and effected by the Company's board of directors, management, and other party under any Contract. Other than Contracts which have terminated or expired personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with their termsgenerally accepted accounting principles ("GAAP"), each of the Contracts is in full force and effect and including that: (assuming due execution and delivery by the counterparties theretoi) is a legal, valid and binding obligation of the Company or its Subsidiary (as applicable) enforceable against the Company or such Subsidiary transactions are executed in accordance with its terms management's general or specific authorization; (subject to the effects of bankruptcyii) unauthorized acquisition, insolvencyuse, 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) and an implied covenant of good faith and fair dealing) and neither the Company nor any of its Subsidiaries has any knowledge that any Contract is not a legal, valid and binding obligation disposition of the other parties theretoCompany'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.

Agreements; Action. (a) 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 its Subsidiaries' contracts, agreements, leases or other instruments to which the Company or 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 its Subsidiaries during any fiscal year of more than $250,000, (iii) 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 any Person or in any geographical area, and (xi) all contracts restricting the payment of interest upon, or the redemption or conversion of, the Notes (collectively, the "Contracts"). (b) Except as set forth on Schedule 3.7(b4.6 or as disclosed in any Exchange Act Filings: (a) Except for that certain Loan and Security Agreement by and among the Subsidiary and Foothill Capital Corporation (“Foothill”) dated as of December 19, 2001, as the same may be amended, revised or supplemented thereafter (the “Foothill Agreement”) pursuant to which, among other things, Foothill agreed to make revolving credit advances to the Disclosure LetterSubsidiary based upon the Subsidiary’s Borrowing Base (as such term is defined in the Foothill Agreement) there are no agreements, neither understandings, instruments, contracts, proposed transactions, judgments, orders, writs or decrees to which the Company nor Borrower is a party or to its knowledge by which it is bound which may involve (i) obligations (contingent or otherwise) of, or payments to, the Borrower in excess of $50,000 (other than obligations of, or payments to, the Borrower arising from purchase or sale agreements and loan agreements entered into in the ordinary course of business), or (ii) the transfer or license of any patent, copyright, trade secret or other proprietary right to or from the Borrower (other than licenses arising from the purchase of “off the shelf” or other standard products), or (iii) provisions restricting the development, manufacture or distribution of the Borrower’s products or services, or (iv) indemnification by the Borrower with respect to infringements of proprietary rights. (b) Since September 30, 2003, the Borrower has not (i) 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 indebtedness for money borrowed or any other liabilities (other than ordinary course obligations, including, without limitation, money borrowed from Foothill Capital Corp. (“Foothill”) pursuant to the Loan and Security Agreement dated as of December 19, 2001 between the Subsidiary and Foothill ) individually in excess of $50,000 or, in the case of indebtedness and/or liabilities individually less than $50,000, in excess of $100,000 in the aggregate, (iii) made any loans or advances to any person not in excess, individually or in the aggregate, of $100,000, other than ordinary advances for travel expenses and loans or advances made in the ordinary course of business pursuant to loan or purchase and sale agreements, or (iv) sold, exchanged or otherwise disposed of any of its Subsidiaries isassets or rights, nor to other than the Company's knowledge is any other party to any Contractsale of its inventory in the ordinary course of business and loans or advances made, or participations entered into, in default underthe ordinary course of business pursuant to loan, purchase and sale or in breach or violation of, any Contract and no event has occurred which, with participation agreements. (c) For the giving purposes 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 Contracts is in full force and effect subsections (a) and (assuming due execution b) above, all indebtedness, liabilities, agreements, understandings, instruments, contracts and delivery by proposed transactions involving the counterparties theretosame person or entity (including persons or entities the Borrower has reason to believe are affiliated therewith) is a legal, valid and binding obligation shall be aggregated for the purpose of meeting the Company or its Subsidiary (as applicable) enforceable against the Company or individual minimum dollar amounts of such Subsidiary in accordance with its terms (subject 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) and an implied covenant of good faith and fair dealing) and neither the Company nor any of its Subsidiaries has any knowledge that any Contract is not a legal, valid and binding obligation of the other parties theretosubsections.

Agreements; Action. (a) Attached hereto Except 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 set forth in Section 7.7 of the SECCompany Disclosure Letter, (ii) all of the Company's and its Subsidiaries' contracts, there are no agreements, leases understandings or other instruments to which proposed transactions between the Company or and any of its Subsidiaries is a party or by which the Companyofficers, its Subsidiaries or its properties are bounddirectors, which involve payments by or to a Company or its Subsidiaries during any fiscal year of more than $250,000employees, (iii) 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 affiliates 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 any Person or in any geographical area, and (xi) all contracts restricting the payment of interest upon, or the redemption or conversion of, the Notes (collectively, the "Contracts")affiliate thereof. (b) Except as set forth on Schedule 3.7(b) to in Section 7.7 of the Company Disclosure Letter, neither there are no agreements, understandings, instruments, contracts, proposed transactions, judgments, orders, writs or decrees to which the Company nor is a party or by which it is bound which may involve (i) future obligations (contingent or otherwise) of, or payments to, the Company in excess of $10,000, (ii) the transfer or license of any patent, copyright, trade secret or other proprietary right to or from the Company (other than licenses by the Company of “off the shelf” or other standard products),(iii) provisions restricting the development, manufacture or distribution of the Company’s products or services, or (iv) indemnification by the Company with respect to infringements of proprietary rights. (c) Since January 1, 2008, except for dividends accrued with respect to shares of the Company Series C Preferred Stock and the Company Series C-1 Preferred Stock in accordance with the Company Certificate of Incorporation and as otherwise set forth in Section 7.7 of the Company Disclosure Letter, 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 or guaranteed any indebtedness for money borrowed or any other liabilities (other than the Company Convertible Notes and trade payables incurred in the ordinary course of business or as disclosed in the Financial Statements) individually in excess of $10,000 or, in the case of indebtedness and/or liabilities individually less than $10,000, in excess of $25,000 in the aggregate, (iii) made any loans or advances to any person, other than ordinary advances for travel expenses, or (iv) sold, exchanged or otherwise disposed of any of its Subsidiaries isassets or rights, nor to other than the Company's knowledge is any other party to any Contractsale of its inventory in the ordinary course of business. (d) For the purposes of subsections (b) and (c) above, in default underall indebtedness, or in breach or violation ofliabilities, any Contract agreements, understandings, instruments, contracts and no event has occurred which, with proposed transactions involving the giving of notice or passage of time or both would constitute a default by same Person (including Persons the Company or, has reason to believe are affiliated therewith) shall be aggregated for the Company's knowledge, any other party under any Contract. Other than Contracts which have terminated or expired in accordance with their terms, each purpose of meeting the Contracts is in full force and effect and (assuming due execution and delivery by the counterparties thereto) is a legal, valid and binding obligation individual minimum dollar amounts of the Company or its Subsidiary (as applicable) enforceable against the Company or such Subsidiary in accordance with its terms (subject 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) and an implied covenant of good faith and fair dealing) and neither the Company nor any of its Subsidiaries has any knowledge that any Contract is not a legal, valid and binding obligation of the other parties theretosubsections.

Agreements; Action. (a) Attached hereto Except as Schedule 3.7(a) set forth in the SEC Reports, there are no agreements, understandings, instruments, contracts, proposed transactions, judgments, orders, writs or decrees to which the Disclosure Letter Company is a list of party, or to its knowledge, by which it is bound which may involve (i) all "material contracts" within obligations (contingent or otherwise) of, or payments to, the meaning Company in excess of Item 601 $50,000 (other than obligations of, or payments to, the Company arising from purchase or sale agreements entered into in the ordinary course of Regulation S-K of the SECbusiness), or (ii) all the transfer or license of any patent, copyright, trade secret or other proprietary right to or from the Company (other than licenses arising from the purchase of "off the shelf" or other standard products), or (iii) provisions restricting the development, manufacture or distribution of the Company's and its Subsidiaries' contractsproducts or services, agreements, leases or other instruments to which the Company or 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 its Subsidiaries during any fiscal year of more than $250,000, (iii) 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 those with respect to the Softalk license, 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 indemnification by the Company or any with respect to infringements 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 any Person or in any geographical area, and (xi) all contracts restricting the payment of interest upon, or the redemption or conversion of, the Notes (collectively, the "Contracts")proprietary rights. (b) Except as set forth on Schedule 3.7(bSCHEDULE 3.6(b) to hereto, since the Disclosure Letter, neither date of the Company's most recent Form 10-QSB the Company nor has not (i) 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 indebtedness for money borrowed or any other liabilities individually in excess of $50,000 or, in the case of indebtedness and/or liabilities individually less than $50,000, in excess of $100,000 in the aggregate, (iii) made any loans or advances to any person, other than ordinary advances for travel expenses, or (iv) sold, exchanged or otherwise disposed of any of its Subsidiaries isassets or rights, nor to other than the Company's knowledge is any other party to any Contractsale of its inventory in the ordinary course of business. (c) For the purposes of subsections (a) and (b) above, in default underall indebtedness, liabilities, agreements, understandings, instruments, contracts and proposed transactions involving the same person or in breach entity (including persons 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 entities the Company or, has reason to believe are affiliated therewith) shall be aggregated for the Company's knowledge, purpose of meeting the individual minimum dollar amounts of such subsections. (d) The Company has not engaged in the past two years in any other party under discussion (i) with any Contract. Other than Contracts which have terminated representative of any corporation or expired in accordance with their terms, each of corporations regarding the Contracts is in full force and effect and (assuming due execution and delivery by the counterparties thereto) is a legal, valid and binding obligation consolidation or merger of the Company with or its Subsidiary into any such corporation or corporations, (as applicableii) enforceable against with 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 a transaction or series of related transactions in which more than 50% of the voting power of the Company is disposed of or such Subsidiary in accordance with its terms (subject to the effects iii) regarding any other form of bankruptcyacquisition, insolvencyliquidation, fraudulent conveyance, reorganization, moratorium and other similar laws relating to dissolution or affecting creditors' rights generally, general equitable principles (whether considered in a proceeding in equity or at law) and an implied covenant of good faith and fair dealing) and neither the Company nor any of its Subsidiaries has any knowledge that any Contract is not a legal, valid and binding obligation winding up of the other parties theretoCompany.

Agreements; Action. (aExcept as set forth on Schedule 12(f) Attached hereto or as Schedule 3.7(a) to the Disclosure Letter is a list of disclosed in any Exchange Act Filings: (i) all "material contracts" within the meaning of Item 601 of Regulation S-K of the SECThere are no agreements, (ii) all of the Company's and its Subsidiaries' understandings, instruments, contracts, agreementsproposed transactions, leases judgments, orders, writs or other instruments decrees to which the Company it or any of its Subsidiaries is a party or to its knowledge by which the Companyit is bound which may involve: (i) obligations (contingent or otherwise) of, its Subsidiaries or its properties are boundpayments to, which involve payments by or to a Company or its Subsidiaries during any fiscal year of more than $250,000, (iii) 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 it or any of its Subsidiaries is a partyin excess of $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 (vii) all contracts for the employment transfer or license of any officer patent, copyright, trade secret or employeeother proprietary right to or from it (other than licenses arising from the purchase of “off the shelf” or other standard products); or (iii) provisions restricting the development, (vi) all material consulting agreements, (vii) any guarantees by the Company manufacture or distribution of its or any of its Subsidiaries, ’ products or services; or (viiiiv) all material distributor and sales agency agreements, (ix) all IP Contracts (as defined in Section 3.11), (x) all contracts restricting the Company indemnification by it or any of its Subsidiaries from engaging in any line with respect to infringements of business or competing with any Person or in any geographical area, and (xi) all contracts restricting the payment of interest upon, or the redemption or conversion of, the Notes (collectively, the "Contracts")proprietary rights. (bii) Except as set forth on Schedule 3.7(bSince December 30, 2005 (the “Balance Sheet Date”) to the Disclosure Letter, neither the Company it nor any of its Subsidiaries ishas: (i) declared or paid any dividends, nor or authorized or made any distribution upon or with respect to the Company's knowledge is any class or series of its capital stock; (ii) incurred any indebtedness for money borrowed or any other party liabilities (other than ordinary course obligations) individually in excess of $50,000 or, in the case of indebtedness and/or liabilities individually less than $50,000, in excess of $100,000 in the aggregate; (iii) made any loans or advances to any ContractPerson not in excess, individually or in the aggregate, of $100,000, other than 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. (iii) For the purposes of subsections (i) and (ii) of this Section 12(f), all indebtedness, liabilities, agreements, understandings, instruments, contracts and proposed transactions involving the same Person (including Persons it or 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. (iv) 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 SEC. (v) The Parent makes and keeps books, records, and accounts, that, in default underreasonable 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 in breach or violation under the supervision of, any Contract its principal executive and no event has occurred whichprincipal financial officers, with the giving and effected by its board of notice or passage of time or both would constitute a default by the Company ordirectors, management, and other personnel, to provide reasonable assurance regarding the Company's knowledge, any other party under any Contract. Other than Contracts which have terminated or expired reliability of financial reporting and the preparation of financial statements for external purposes in accordance with their termsGAAP, each of the Contracts is in full force and effect and including that: (assuming due execution and delivery by the counterparties thereto1) is a legal, valid and binding obligation of the Company or its Subsidiary (as applicable) enforceable against the Company or such Subsidiary 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 terms receipts and expenditures are being made only in accordance with authorizations of the Parent’s management and board of directors; (subject 4) transactions are recorded as necessary to maintain accountability for assets; and (5) the effects of bankruptcyrecorded accountability for assets is compared with the existing assets at reasonable intervals, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating appropriate action is taken with respect to or affecting creditors' rights generally, general equitable principles any differences. (whether considered vi) There is no weakness in a proceeding in equity or at law) and an implied covenant of good faith and fair dealing) and neither the Company nor any of its Subsidiaries has Disclosure Controls or Financial Reporting Controls that is required to be disclosed in any knowledge that any Contract is not a legal, valid and binding obligation of the other parties theretoExchange Act Filings, except as so disclosed.

Agreements; Action. Except as set forth on Schedule 4.6 or as disclosed in any Exchange Act Filings: (a) 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 SECthere are no agreements, (ii) all of the Company's and its Subsidiaries' understandings, instruments, contracts, agreementsproposed transactions, leases judgments, orders, writs or other instruments decrees to which the Company or any of its Subsidiaries is a party or by which the Companyit is bound which may involve: (i) obligations (contingent or otherwise) of, its Subsidiaries or its properties are boundpayments to, which involve payments by or to a Company or its Subsidiaries during any fiscal year of more than $250,000, (iii) 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 partyin excess of $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 (vii) all contracts for the employment transfer or license of any officer patent, copyright, trade secret or employeeother proprietary right to or from the Company or any of its Subsidiaries (other than licenses arising from the purchase of “off the shelf” or other standard products); or (iii) provisions restricting the development, manufacture or distribution of the Company’s or any of its Subsidiaries products or services; or (viiv) all material consulting agreements, (vii) any guarantees indemnification 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 Subsidiaries with respect to infringements of its Subsidiaries from engaging in any line of business or competing with any Person or in any geographical area, and (xi) all contracts restricting the payment of interest upon, or the redemption or conversion of, the Notes (collectively, the "Contracts")proprietary rights. (b) Except as set forth on Schedule 3.7(b) to Since November 30, 2006 (the Disclosure Letter“Balance Sheet Date”), neither the Company nor any of its Subsidiaries ishas: (i) declared or paid any dividends, nor or authorized or made any distribution upon or with respect to the Company's knowledge is any class or series of its capital stock; (ii) incurred any indebtedness for money borrowed or any other party liabilities (other than ordinary course obligations) individually in excess of $50,000 or, in the case of indebtedness and/or liabilities individually less than $50,000, in excess of $100,000 in the aggregate; (iii) made any loans or advances to any Contractperson or entity not in excess, in default under, individually or in breach the aggregate, of $100,000, other than ordinary course advances for travel expenses; or violation of(iv) sold, exchanged or otherwise disposed of any Contract of its assets or rights, other than the sale of its inventory in the ordinary course of business. (c) For the purposes of subsections (a) and no event (b) above, all indebtedness, liabilities, agreements, understandings, instruments, contracts and proposed transactions involving the same person or entity (including persons or entities the Company or any Subsidiary of the Company has occurred which, with reason to believe are affiliated therewith) shall be aggregated for the giving purpose of notice or passage meeting the individual minimum dollar amounts of time or both would constitute a default such subsections. (d) The Company maintains disclosure controls and procedures (“Disclosure Controls”) designed to ensure that information required to be disclosed by the Company orin the reports that it files or submits under the Exchange Act is recorded, forms of the Securities and Exchange Commission (“SEC”). (e) 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 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 Company's knowledge, any other party under any Contract. Other than Contracts which have terminated or expired reliability of financial reporting and the preparation of financial statements for external purposes in accordance with their termsgenerally accepted accounting principles (“GAAP”), each of the Contracts is in full force and effect and including that: (assuming due execution and delivery by the counterparties theretoi) is a legal, valid and binding obligation of the Company or its Subsidiary (as applicable) enforceable against the Company or such Subsidiary transactions are executed in accordance with its terms management’s general or specific authorization; (subject 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 effects Company’s receipts and expenditures are being made only in accordance with authorizations of bankruptcythe 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, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating appropriate action is taken with respect to or affecting creditors' rights generally, general equitable principles any differences. (whether considered f) There is no weakness in a proceeding in equity or at law) and an implied covenant of good faith and fair dealing) and neither the Company nor any of its Subsidiaries has the Company’s Disclosure Controls or Financial Reporting Controls that is required to be disclosed in any knowledge that any Contract is not a legal, valid and binding obligation of the other parties theretoExchange Act Filings, except as so disclosed.

Agreements; Action. (aExcept as set forth on Schedule 12(f) Attached hereto or as Schedule 3.7(a) to the Disclosure Letter is a list of disclosed in any Exchange Act Filings: (i) all "material contracts" within the meaning of Item 601 of Regulation S-K of the SECThere are no agreements, (ii) all of the Company's and its Subsidiaries' understandings, instruments, contracts, agreementsproposed transactions, leases judgments, orders, writs or other instruments decrees to which the Company it or any of its Subsidiaries is a party or to its knowledge by which the Companyit is bound which may involve: (i) obligations (contingent or otherwise) of, its Subsidiaries or its properties are boundpayments to, which involve payments by or to a Company or its Subsidiaries during any fiscal year of more than $250,000, (iii) 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 it or any of its Subsidiaries is a partyin excess of $50,000 (other than obligations of, or payments to, it or any of its Subsidiaries arising from (v1) all contracts for purchase or sale agreements entered into in the employment 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) the transfer or license of any officer patent, copyright, trade secret or employeeother proprietary right to or from it (other than licenses arising from the purchase of “off the shelf” or other standard products); or (iii) provisions restricting the development, (vi) all material consulting agreements, (vii) any guarantees by the Company manufacture or distribution of its or any of its Subsidiaries, ’ products or services; or (viiiiv) all material distributor and sales agency agreements, (ix) all IP Contracts (as defined in Section 3.11), (x) all contracts restricting the Company indemnification by it or any of its Subsidiaries from engaging in any line with respect to infringements of business or competing with any Person or in any geographical area, and (xi) all contracts restricting the payment of interest upon, or the redemption or conversion of, the Notes (collectively, the "Contracts")proprietary rights. (bii) Except Since December 31, 2004 (the “Balance Sheet Date”) neither it nor any of its Subsidiaries has: (i) 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) except as set forth on Schedule 3.7(b12(f)(ii)(a) and indebtedness and liabilities between and among any Company, incurred any indebtedness for money borrowed or any other liabilities (other than ordinary course obligations) individually in excess of $50,000 or, in the case of such indebtedness and/or liabilities individually less than $50,000, in excess of $100,000 in the aggregate; (iii) made any loans or advances to any Person not in excess, individually or in the Disclosure Letteraggregate, neither the Company nor of $100,000, other than ordinary 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 in the ordinary course of business. (iii) For the purposes of subsections (i) and (ii) of this Section 12(f), all indebtedness, liabilities, agreements, understandings, instruments, contracts and proposed transactions involving the same Person (including Persons it or any of its applicable Subsidiaries ishas 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. (iv) 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, nor to processed, summarized, and reported, within the Company's knowledge is any other party to any Contracttime periods specified in the rules and forms of the SEC. (v) The Parent makes and keeps books, records, and accounts, that, in default underreasonable 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 in breach or violation under the supervision of, any Contract its principal executive and no event has occurred whichprincipal financial officers, with the giving and effected by its board of notice or passage of time or both would constitute a default by the Company ordirectors, management, and other personnel, to provide reasonable assurance regarding the Company's knowledge, any other party under any Contract. Other than Contracts which have terminated or expired reliability of financial reporting and the preparation of financial statements for external purposes in accordance with their termsGAAP, each of the Contracts is in full force and effect and including that: (assuming due execution and delivery by the counterparties thereto1) is a legal, valid and binding obligation of the Company or its Subsidiary (as applicable) enforceable against the Company or such Subsidiary 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 terms receipts and expenditures are being made only in accordance with authorizations of the Parent’s management and board of directors; (subject 4) transactions are recorded as necessary to maintain accountability for assets; and (5) the effects of bankruptcyrecorded accountability for assets is compared with the existing assets at reasonable intervals, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating appropriate action is taken with respect to or affecting creditors' rights generally, general equitable principles any differences. (whether considered vi) There is no weakness in a proceeding in equity or at law) and an implied covenant of good faith and fair dealing) and neither the Company nor any of its Subsidiaries has Disclosure Controls or Financial Reporting Controls that is required to be disclosed in any knowledge that any Contract is not a legal, valid and binding obligation of the other parties theretoExchange Act Filings, except as so disclosed.

Agreements; Action. Except as set forth on Schedule 4.6 and except for Employee Change of Control Payments (as defined in the Stock Purchase Agreement) provided for in the Change of Control and Severance Plan referenced in Schedule 4.23 to the Stock Purchase Agreement: (a) 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 SECthere are no agreements, (ii) all of the Company's and its Subsidiaries' understandings, instruments, contracts, agreementsproposed transactions, leases judgments, orders, writs or other instruments decrees to which the any Company or any of its Subsidiaries is a party or by which the Companyit is bound which may involve: (i) obligations (contingent or otherwise) of, its Subsidiaries or its properties are boundpayments to, which involve payments by or to a Company or its Subsidiaries during any fiscal year of more than $250,000, (iii) 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 partyin excess of $100,000 (other than obligations of, (v) all contracts for the employment of or payments to, 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 arising from engaging purchase or sale agreements entered into in the ordinary course of business); or (ii) the transfer or license of any line patent, copyright, trade secret or other proprietary right to or from any Company or any of business its Subsidiaries (other than licenses arising from the purchase of "off the shelf" or competing with any Person other standard products); or in any geographical area, and (xiiii) all contracts provisions restricting the payment development, manufacture or distribution of interest upon, any Company's or the redemption any of its Subsidiaries products or conversion of, the Notes services; or (collectively, the "Contracts")iv) indemnification by any Company or any of its Subsidiaries with respect to infringements of proprietary rights. (b) Except as set forth on Schedule 3.7(b) to Since March 31, 2006 (the Disclosure Letter"Balance Sheet Date"), neither the no Company nor any of its Subsidiaries ishas: (i) declared or paid any dividends, nor or authorized or made any distribution upon or with respect to the Company's knowledge is any class or series of its capital stock; (ii) incurred any indebtedness for money borrowed or any other party liabilities (other than ordinary course obligations) individually or in the aggregate in excess of $100,000; (iii) made any loans or advances to any Contractperson or entity not in excess, in default under, individually or in breach the aggregate, of $100,000, other than ordinary course advances for travel expenses; or violation of(iv) sold, any Contract and no event has occurred which, with the giving exchanged or otherwise disposed 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 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 Company or such Subsidiary in accordance with its terms (subject 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) and an implied covenant of good faith and fair dealing) and neither the Company nor any of its Subsidiaries assets or rights, other than the sale of its inventory in the ordinary course of business. (c) For the purposes of subsections (a) and (b) above, all indebtedness, liabilities, agreements, understandings, instruments, contracts and proposed transactions involving the same person or entity (including persons or entities any Company or any Subsidiary of such Company has any knowledge that any Contract is not a legal, valid and binding obligation reason to believe are affiliated therewith) shall be aggregated for the purpose of meeting the other parties theretoindividual minimum dollar amounts of such subsections.

Agreements; Action. (a) Attached hereto as Schedule 3.7(a) There are no agreements, understandings, instruments, contracts, proposed transactions, judgments, orders, writs or decrees to which the Disclosure Letter Company is a list of party or to its knowledge by which it is bound which may involve (i) all "material contracts" within obligations (contingent or otherwise) of, or payments to, the meaning Company in excess of Item 601 $10,000 (other than obligations of, or payments to, the Company arising from purchase or sale agreements entered into in the ordinary course of Regulation S-K of the SECbusiness), or (ii) all the license of any patent, copyright, trade secret or other proprietary right to or from the Company (other than licenses arising from the purchase of "off the shelf" or other standard products), or (iii) provisions restricting or affecting the development, manufacture or distribution of the Company's and its Subsidiaries' contractsproducts or services, agreements, leases or other instruments to which the Company or 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 its Subsidiaries during any fiscal year of more than $250,000, (iii) 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 indemnification by the Company with respect to infringements of proprietary rights (other than indemnification obligations arising from purchase or any sale or license agreements entered into in the ordinary course 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 any Person or in any geographical area, and (xi) all contracts restricting the payment of interest upon, or the redemption or conversion of, the Notes (collectively, the "Contracts"business). (b) Except as set forth on Schedule 3.7(bThe Company has not (i) 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 indebtedness for money borrowed or any other liabilities (other than with respect to dividend obligations, distributions, indebtedness and other obligations incurred in the Disclosure Letterordinary course of business) individually in excess of $10,000 or, neither in the Company nor case of indebtedness and/or liabilities individually less than $10,000, in excess of $25,000 in the aggregate, (iii) made any loans or advances to any person, other than ordinary advances for travel expenses, or (iv) sold, exchanged or otherwise disposed of any of its Subsidiaries isassets or rights, nor to other than the Company's knowledge is any other party to any Contractsale of its inventory in the ordinary course of business. (c) For the purposes of subsections (a) and (b) above, in default underall indebtedness, liabilities, agreements, understandings, instruments, contracts and proposed transactions involving the same person or in breach entity (including persons 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 entities the Company or, has reason to believe are affiliated therewith) shall be aggregated for the Company's knowledge, purpose of meeting the individual minimum dollar amounts of such subsections. (d) The Company has not engaged in the past three (3) months in any other party under discussion (i) with any Contract. Other than Contracts which have terminated representative of any corporation or expired in accordance with their terms, each of corporations regarding the Contracts is in full force and effect and (assuming due execution and delivery by the counterparties thereto) is a legal, valid and binding obligation consolidation or merger of the Company with or its Subsidiary into any such corporation or corporations, (as applicableii) enforceable against with 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 a transaction or series of related transactions in which more than fifty percent (50%) of the voting power of the Company is disposed of, or such Subsidiary in accordance with its terms (subject to the effects iii) regarding any other form of bankruptcyacquisition, insolvencyliquidation, fraudulent conveyance, reorganization, moratorium and other similar laws relating to dissolution or affecting creditors' rights generally, general equitable principles (whether considered in a proceeding in equity or at law) and an implied covenant of good faith and fair dealing) and neither the Company nor any of its Subsidiaries has any knowledge that any Contract is not a legal, valid and binding obligation winding up of the other parties theretoCompany.

Agreements; Action. (aExcept as set forth on Schedule 12(f) Attached hereto or as Schedule 3.7(a) to the Disclosure Letter is a list of disclosed in any Exchange Act Filings: (i) all "material contracts" within the meaning of Item 601 of Regulation S-K of the SECThere are no agreements, (ii) all of the Company's and its Subsidiaries' understandings, instruments, contracts, agreementsproposed transactions, leases judgments, orders, writs or other instruments decrees to which the Company it or any of its Subsidiaries is a party or to its knowledge by which the Companyit is bound which may involve: (i) obligations (contingent or otherwise) of, its Subsidiaries or its properties are boundpayments to, which involve payments by or to a Company or its Subsidiaries during any fiscal year of more than $250,000, (iii) 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 it or any of its Subsidiaries is a partyin excess of $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 (vii) all contracts for the employment transfer or license of any officer patent, copyright, trade secret or employeeother proprietary right to or from it (other than licenses arising from the purchase of “off the shelf” or other standard products); or (iii) provisions restricting the development, (vi) all material consulting agreements, (vii) any guarantees by the Company manufacture or distribution of its or any of its Subsidiaries, ’ products or services; or (viiiiv) all material distributor and sales agency agreements, (ix) all IP Contracts (as defined in Section 3.11), (x) all contracts restricting the Company indemnification by it or any of its Subsidiaries from engaging in any line with respect to infringements of business or competing with any Person or in any geographical area, and (xi) all contracts restricting the payment of interest upon, or the redemption or conversion of, the Notes (collectively, the "Contracts")proprietary rights. (bii) Except as set forth on Schedule 3.7(b) to Since June 30, 2007 (the Disclosure Letter“Balance Sheet Date”), neither the Company it nor any of its Subsidiaries ishas: (i) declared or paid any dividends, nor or authorized or made any distribution upon or with respect to the Company's knowledge is any class or series of its capital stock; (ii) incurred any indebtedness for money borrowed or any other party liabilities (other than ordinary course obligations) individually in excess of $50,000 or, in the case of indebtedness and/or liabilities individually less than $50,000, in excess of $100,000 in the aggregate; (iii) made any loans or advances to any ContractPerson not in excess, individually or in the aggregate, of $100,000, other than 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 or obsolete equipment in the ordinary course of business. (iii) For the purposes of subsections (i) and (ii) of this Section 12(f), all indebtedness, liabilities, agreements, understandings, instruments, contracts and proposed transactions involving the same Person (including Persons it or 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. (iv) 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 SEC. (v) The Parent makes and keeps books, records, and accounts, that, in default underreasonable 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 in breach or violation under the supervision of, any Contract its principal executive and no event has occurred whichprincipal financial officers, with the giving and effected by its board of notice or passage of time or both would constitute a default by the Company ordirectors, management, and other personnel, to provide reasonable assurance regarding the Company's knowledge, any other party under any Contract. Other than Contracts which have terminated or expired reliability of financial reporting and the preparation of financial statements for external purposes in accordance with their termsGAAP, each of the Contracts is in full force and effect and including that: (assuming due execution and delivery by the counterparties thereto1) is a legal, valid and binding obligation of the Company or its Subsidiary (as applicable) enforceable against the Company or such Subsidiary 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 terms receipts and expenditures are being made only in accordance with authorizations of the Parent’s management and board of directors; (subject 4) transactions are recorded as necessary to maintain accountability for assets; and (5) the effects of bankruptcyrecorded accountability for assets is compared with the existing assets at reasonable intervals, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating appropriate action is taken with respect to or affecting creditors' rights generally, general equitable principles any differences. (whether considered vi) There is no weakness in a proceeding in equity or at law) and an implied covenant of good faith and fair dealing) and neither the Company nor any of its Subsidiaries has Disclosure Controls or Financial Reporting Controls that is required to be disclosed in any knowledge that any Contract is not a legal, valid and binding obligation of the other parties theretoExchange Act Filings, except as so disclosed.