Common use of Due Organization and Qualification; Subsidiaries Clause in Contracts

Due Organization and Qualification; Subsidiaries. (a) Borrower is duly organized and existing and in good standing under the laws of the jurisdiction of its incorporation and qualified and licensed to do business in, and in good standing in, any state where the failure to be so licensed or qualified reasonably 46 could be expected to have a Material Adverse Change. (b) Set forth on Schedule 5.8, is a complete and accurate description of the authorized capital Stock of Borrower, by class, and, as of the Closing Date, a description of the number of shares of each such class that are issued and outstanding and the number of such shares that are held in Borrower's treasury. All such outstanding shares have been validly issued and, as of the Closing Date, are fully paid, nonassessable shares free of contractual preemptive rights. The issuance and sale of all such shares have been in compliance with all applicable federal and state securities laws. Other than as described on Schedule 5.8, as of the Closing Date, there are no subscriptions, options, warrants, or calls relating to any shares of Borrower's capital Stock, including any right of conversion or exchange under any outstanding security or other instrument. Borrower is not subject to any obligation (contingent or otherwise) to repurchase or otherwise acquire or retire any shares of its capital Stock or any security convertible into or exchangeable for any of its capital Stock. (c) Set forth on Schedule 5.8, is a complete and accurate list of Borrower's direct and indirect Subsidiaries as of the Closing Date, showing: (i) the jurisdiction of their incorporation; (ii) the number of shares of each class of common and preferred Stock authorized for each of such Subsidiaries; and (iii) the number and the percentage of the outstanding shares of each such class owned directly or indirectly by Borrower. All of the outstanding capital Stock of each such Subsidiary has been validly issued and is fully paid and non-assessable. (d) Except as set forth on Schedule 5.8, as of the Closing Date, no capital Stock (or any securities, instruments, warrants, options, purchase rights, conversion or exchange rights, calls, commitments or claims of any character convertible into or exercisable for Stock) of any direct or indirect Subsidiary of Borrower is subject to the issuance of any security, instrument, warrant, option, purchase right, conversion or exchange right, call, commitment or claim of any right, title, or interest therein or thereto.

Due Organization and Qualification; Subsidiaries. (a) Borrower is duly organized and existing and in good standing under the laws of the jurisdiction of its incorporation organization and qualified and licensed to do business in, and in good standing in, any state where the failure to be so licensed or qualified reasonably 46 could be expected to have result in a Material Adverse Change. (b) Set forth on Schedule 5.85.8(b), is a complete and accurate description of the authorized capital Stock of Borrower, by class, and, as of March 31, 2004 and to the Closing Datebest knowledge of Borrower, a description of the number of shares of each such class that are issued, outstanding and held by a Person holding at least ten percent (10%) of all such issued and outstanding and the number of such shares that are held in Borrower's treasury. All such outstanding shares have been validly issued and, as of the Closing Date, are fully paid, nonassessable shares free of contractual preemptive rights. The issuance and sale of all such shares have been in compliance with all applicable federal and state securities lawscapital Stock. Other than as described on Schedule 5.8, as of the Closing Date5.8(b), there are no subscriptions, options, warrants, or calls relating to any shares of Borrower's capital Stock, including any right of conversion or exchange under any outstanding security or other instrument. Borrower is not subject to any obligation (contingent or otherwise) to repurchase or otherwise acquire or retire any shares of its capital Stock or any security convertible into or exchangeable for any of its capital Stock. (c) Set forth on Schedule 5.85.8(c), is a complete and accurate list of Borrower's direct and indirect Subsidiaries as of the Closing DateSubsidiaries, showing: (i) the jurisdiction of their incorporation; organization, (ii) the number of shares of each class of common and preferred Stock authorized for each of such Subsidiaries; , and (iii) the number and the percentage of the outstanding shares of each such class owned directly or indirectly by Borrower. All of the outstanding capital Stock of each such corporate Subsidiary has been validly issued and is fully paid and non-assessable. (d) Except as set forth on Schedule 5.85.8(c), as of the Closing Datethere are no subscriptions, no capital Stock (or any securities, instrumentsoptions, warrants, optionsor calls relating to any shares of Borrower's Subsidiaries' capital Stock, purchase rights, including any right of conversion or exchange rights, calls, commitments under any outstanding security or claims other instrument. Neither Borrower nor any of its Subsidiaries is subject to any character obligation (contingent or otherwise) to repurchase or otherwise acquire or retire any shares of Borrower's Subsidiaries' capital Stock or any security convertible into or exercisable exchangeable for any such capital Stock) of any direct or indirect Subsidiary of Borrower is subject to the issuance of any security, instrument, warrant, option, purchase right, conversion or exchange right, call, commitment or claim of any right, title, or interest therein or thereto.

Due Organization and Qualification; Subsidiaries. (a) Borrower is duly organized and existing and in good standing under the laws of the jurisdiction of its incorporation organization and qualified and licensed to do business in, and in good standing in, any state where the failure to be so licensed or qualified reasonably 46 could reasonably be expected to have result in a Material Adverse Change. (b) Set forth on Schedule 5.8, 5.7(b) (as such Schedule may be updated from time to time to reflect changes resulting from transactions not prohibited by this Agreement) is a complete and accurate description of (i) the authorized capital Stock of Horizon, by class, and a description of the interests of each such class that are issued and outstanding as of the Closing Date, and (ii) the authorized capital Stock of Borrower, by class, and, as of the Closing Date, a description of the number of shares interests of each such class that are issued and outstanding and the number of such shares that are held in Borrower's treasury. All such outstanding shares have been validly issued and, as of the Closing Date, are fully paid, nonassessable shares free of contractual preemptive rights. The issuance Date and sale of at all such shares have been in compliance with all applicable federal and state securities lawstimes thereafter. Other than as described on Schedule 5.8, as of the Closing Date5.7(b), there are no subscriptions, options, warrants, or calls relating to any shares capital Stock of Borrower's capital Stock, including any right of conversion or exchange under any outstanding security or other instrument. Borrower is not subject to any obligation (contingent or otherwise) to repurchase or otherwise acquire or retire any shares of its capital Stock or any security convertible into or exchangeable for any of its capital Stock. (c) Set forth on Schedule 5.8, 5.7(c) is a complete and accurate list of Borrower's Horizon’s direct and indirect Subsidiaries as of the Closing Date, showing: (i) the jurisdiction of their incorporation; organization, (ii) the number of shares of each class of common and preferred Stock authorized for each of such Subsidiaries; , and (iii) the number and the percentage of the outstanding shares of each such class owned directly or indirectly by BorrowerHorizon. All of the outstanding capital Stock of each such Subsidiary has been validly issued The Borrower does not and is fully paid and non-assessablewill not, at any time, have any direct or indirect Subsidiaries. (d) Except as set forth on Schedule 5.85.7(c), as of the Closing Datethere are no subscriptions, no capital Stock (or any securities, instrumentsoptions, warrants, optionsor calls relating to any shares of capital Stock of Borrower, purchase rights, including any right of conversion or exchange rights, calls, commitments under any outstanding security or claims of any character convertible into or exercisable for Stock) of any direct or indirect Subsidiary of Borrower is subject to the issuance of any security, other instrument, warrant, option, purchase right, conversion or exchange right, call, commitment or claim of any right, title, or interest therein or thereto.

Due Organization and Qualification; Subsidiaries. (a) Borrower (i) is duly organized and existing and in good standing under the laws of the jurisdiction of its incorporation and organization, (ii) qualified and licensed to do business in, and in good standing in, any state where the failure to be so licensed or qualified reasonably 46 could be expected to have result in a Material Adverse Change, and (iii) has all requisite power and authority to own and operate its properties, to carry on its business as now conducted and as proposed to be conducted, to enter into the Loan Documents to which it is a party and to carry out the transactions contemplated thereby. (b) Set forth on Schedule 5.8, 4.1(b) is a complete and accurate description of the authorized capital Stock of Borrower, by class, and, as of the Closing Date, a description of the number of shares of each such class that are issued and outstanding and the number of such shares that are held in Borrower's treasury. All such outstanding shares have been validly issued and, as of the Closing Date, are fully paid, nonassessable shares free of contractual preemptive rights. The issuance and sale of all such shares have been in compliance with all applicable federal and state securities lawsoutstanding. Other than as described on Schedule 5.8, as of the Closing Date4.1(b), there are no subscriptions, options, warrants, or calls relating to any shares of Borrower's ’s capital Stock, including any right of conversion or exchange under any outstanding security or other instrument. Borrower is not subject to any obligation (contingent or otherwise) to repurchase or otherwise acquire or retire any shares of its capital Stock or any security convertible into or exchangeable for any of its capital Stock. (c) Set forth on Schedule 5.84.1(c) (as such Schedule may be updated from time to time to reflect changes permitted to be made under Section 5.11), is a complete and accurate list of the Borrower's ’s direct and indirect Subsidiaries as of the Closing DateSubsidiaries, showing: (i) the jurisdiction of their incorporation; (ii) the number of shares of each class of common and preferred Stock authorized for each of such Subsidiaries; and (iii) the number and showing the percentage of the outstanding shares of each class of Stock of each such class Subsidiary owned directly or indirectly by Borrower. All of the outstanding capital Stock of each such Subsidiary has been validly issued and is fully paid and non-assessable. (d) Except as set forth on Schedule 5.84.1(c), as of the Closing Datethere are no subscriptions, no capital Stock (or any securities, instrumentsoptions, warrants, optionsor calls relating to any shares of Borrower’s Subsidiaries’ capital Stock, purchase rights, including any right of conversion or exchange rights, calls, commitments under any outstanding security or claims other instrument. Neither Borrower nor any of its Subsidiaries is subject to any character obligation (contingent or otherwise) to repurchase or otherwise acquire or retire any shares of Borrower’s Subsidiaries’ capital Stock or any security convertible into or exercisable exchangeable for any such capital Stock) of any direct or indirect Subsidiary of Borrower is subject to the issuance of any security, instrument, warrant, option, purchase right, conversion or exchange right, call, commitment or claim of any right, title, or interest therein or thereto.

Due Organization and Qualification; Subsidiaries. (a) Parent and each Borrower is duly organized and existing and in good standing under the laws of the jurisdiction of its incorporation organization and qualified and licensed to do business in, and in good standing in, any state where the failure to be so licensed or qualified reasonably 46 could be expected to have a Material Adverse Change. (b) Set forth on Schedule 5.85.8(b), is a complete and accurate description of the authorized capital Stock of Parent and each Borrower, by class, and, as of the Closing Date, a description of the number of shares of each such class that are issued and outstanding and the number of such shares that are held in Borrower's treasury. All such outstanding shares have been validly issued and, as of the Closing Date, are fully paid, nonassessable shares free of contractual preemptive rights. The issuance and sale of all such shares have been in compliance with all applicable federal and state securities lawsoutstanding. Other than as described on Schedule 5.8, as of the Closing Date5.8(b), there are no subscriptions, options, warrants, or calls relating to any shares of each Borrower's capital Stock, including any right of conversion or exchange under any outstanding security or other instrument. Except as may be required to comply with Applicable Gaming Laws, neither Parent nor any Borrower is not subject to any obligation (contingent or otherwise) to repurchase or otherwise acquire or retire any shares of its capital Stock or any security convertible into or exchangeable for any of its capital Stock. (c) Set forth on Schedule 5.85.8(c), is a complete and accurate list of Parent and each Borrower's direct and indirect Subsidiaries as of the Closing DateSubsidiaries, showing: (i) the jurisdiction of their incorporation; organization, (ii) the number of shares of each class of common and preferred Stock authorized for each of such Subsidiaries; , and (iii) the number and the percentage of the outstanding shares of each such class owned directly or indirectly by Parent or the applicable Borrower. All of the outstanding capital Stock of each such Subsidiary has been validly issued and is fully paid and non-assessable. (d) Except as set forth on Schedule 5.85.8(c), as of the Closing Datethere are no subscriptions, no capital Stock (or any securities, instrumentsoptions, warrants, optionsor calls relating to any shares of Parent's or any Borrower's Subsidiaries' capital Stock, purchase rights, including any right of conversion or exchange rightsunder any outstanding security or other instrument. Except as may be required to comply with Applicable Gaming Laws, calls, commitments neither Parent nor any Borrower nor any of their Subsidiaries is subject to any obligation (contingent or claims otherwise) to repurchase or otherwise acquire or retire any shares of any character Guarantor or any Borrower's Subsidiaries' capital Stock or any security convertible into or exercisable exchangeable for any such capital Stock) of any direct or indirect Subsidiary of Borrower is subject to the issuance of any security, instrument, warrant, option, purchase right, conversion or exchange right, call, commitment or claim of any right, title, or interest therein or thereto.

Due Organization and Qualification; Subsidiaries. (a) Borrower is duly organized and existing and in good standing under the laws of the jurisdiction of its incorporation organization and qualified and licensed to do business in, and in good standing in, any state where the failure to be so licensed or qualified reasonably 46 could be expected to have a Material Adverse Change; provided that until such time as the condition subsequent set forth in Section 3.2(b) is satisfied, it is hereby acknowledged that Borrower is not qualified to do business in the state of Illinois. (b) Set forth on Schedule 5.85.8(b), is a complete and accurate description of the authorized capital Stock of Borrower, by class, and, as of the Closing Date, a description of the number of shares of each such class that are issued and outstanding and the number of such shares that are held in Borrower's treasury. All such outstanding shares have been validly issued and, as of the Closing Date, are fully paid, nonassessable shares free of contractual preemptive rights. The issuance and sale of all such shares have been in compliance with all applicable federal and state securities lawsoutstanding. Other than as described on Schedule 5.8, as of the Closing Date5.8(b), there are no subscriptions, options, warrants, or calls relating to any shares of Borrower's capital Stock, including any right of conversion or exchange under any outstanding security or other instrument. Borrower is not subject to any obligation (contingent or otherwise) to repurchase or otherwise acquire or retire any shares of its capital Stock or any security convertible into or exchangeable for any of its capital Stock. (c) Set forth on Schedule 5.85.8(c), is a complete and accurate list of Borrower's direct and indirect Subsidiaries as of the Closing DateSubsidiaries, showing: (i) the jurisdiction of their incorporation; organization, (ii) the number of shares of each class of common and preferred Stock authorized for each of such Subsidiaries; the Restricted Subsidiaries and HRC, and (iii) the number and the percentage of the outstanding shares of each such class owned directly or indirectly by Borrower. All of the outstanding capital Stock of each such Subsidiary has been validly issued and is fully paid and non-assessable. (d) Except as set forth on Schedule 5.85.8(c), as of the Closing Datethere are no subscriptions, no capital Stock (or any securities, instrumentsoptions, warrants, optionsor calls relating to any shares of Borrower's Subsidiaries' capital Stock, purchase rights, including any right of conversion or exchange rights, calls, commitments under any outstanding security or claims other instrument. Neither Borrower nor any of its Subsidiaries is subject to any character obligation (contingent or otherwise) to repurchase or otherwise acquire or retire any shares of Borrower's Subsidiaries' capital Stock or any security convertible into or exercisable exchangeable for any such capital Stock) of any direct or indirect Subsidiary of Borrower is subject to the issuance of any security, instrument, warrant, option, purchase right, conversion or exchange right, call, commitment or claim of any right, title, or interest therein or thereto.

Due Organization and Qualification; Subsidiaries. (a) Borrower Each Obligor is duly organized and existing and in good standing under the laws of the jurisdiction of its incorporation organization and qualified and licensed to do business in, and in good standing in, any state where the failure to be so licensed or qualified would reasonably 46 could be expected to have cause a Material Adverse Change. (b) Set forth on Schedule 5.8, is a complete and accurate description of the authorized capital Stock of Borrowereach Obligor (other than GCI) as of the Closing Date, by class, and, as of the Closing Date, a description of the number of shares of each such class that are issued and outstanding and the number of such shares that are held in Borrower's treasury. All such outstanding shares have been validly issued and, as of the Closing Date, are fully paid, nonassessable shares free of contractual preemptive rights. The issuance and sale of all such shares have been in compliance with all applicable federal and state securities lawsoutstanding. Other than as described on Schedule 5.8, as of the Closing Date, there are no subscriptions, options, warrants, or calls relating to any shares of Borrower's the capital StockStock of any Obligor (other than GCI) as of the Closing Date, including any right of conversion or exchange under any outstanding security or other instrument. Borrower No Obligor is not subject to any obligation (contingent or otherwise) to repurchase or otherwise acquire or retire any shares of its capital Stock or any security convertible into or exchangeable for any of its capital Stock. (c) Set forth on Schedule 5.8, is a complete and accurate list of BorrowerGCI's direct and indirect Subsidiaries as of the Closing DateSubsidiaries, showing: (i) the jurisdiction of their incorporation; (ii) the number of shares of each class of common and preferred Stock authorized for each of such Subsidiaries; and (iii) the number and the percentage of the outstanding shares of each such class owned directly or indirectly by BorrowerGCI. All of the outstanding capital Stock of each such Subsidiary has been validly issued and is fully paid and non-assessable. (d) Except (i) as set forth on Schedule 5.8, as 5.8 and (ii) issuance to management or employees of the Closing DateObligors of up to 20% of the outstanding Stock of MCI, no capital Stock (or any securities, instruments, warrants, options, purchase rights, conversion or exchange rights, calls, commitments or claims of any character convertible into or exercisable for Stock) of any direct or indirect Subsidiary of Borrower GCI is subject to the issuance of any security, instrument, warrant, option, purchase right, conversion or exchange right, call, commitment or claim of any right, title, or interest therein or thereto.

Due Organization and Qualification; Subsidiaries. (a) Each Borrower is duly organized and existing and in good standing under the laws of the jurisdiction of its incorporation organization and qualified and licensed to do business in, and in good standing in, any state where the failure to be so licensed or qualified reasonably 46 could be expected to have result in a Material Adverse Change. (b) Set forth on Schedule 5.8, 4.8(b) is a complete and accurate description of the authorized capital Stock of each Borrower, by class, and, as of the Closing Date, a description of the number of shares of each such class that are issued and outstanding and the number of such shares that are held in Borrower's treasury. All such outstanding shares have been validly issued and, as of the Closing Date, are fully paid, nonassessable shares free of contractual preemptive rights. The issuance and sale of all such shares have been in compliance with all applicable federal and state securities lawsoutstanding. Other than as described on Schedule 5.8, as of the Closing Date4.8(b), there are no subscriptions, options, warrants, or calls relating to any shares of each Borrower's ’s capital Stock, including any right of conversion or exchange under any outstanding security or other instrument. No Borrower is not subject to any obligation (contingent or otherwise) to repurchase or otherwise acquire or retire any shares of its capital Stock or any security convertible into or exchangeable for any of its capital Stock. (c) Set forth on Schedule 5.8, 4.8(c) is a complete and accurate list of each Borrower's ’s direct and indirect Subsidiaries as of the Closing DateSubsidiaries, showing: (i) the jurisdiction of their incorporation; its organization and (ii) the number of shares of each class of common and preferred Stock authorized for each of such Subsidiaries; and (iii) the number and the percentage of the outstanding shares of each such class owned directly or indirectly by the applicable Borrower. All of the outstanding capital Stock of each such Subsidiary has been validly issued and is fully paid and non-assessable. (d) Except as set forth on Schedule 5.84.8(c), as of the Closing Datethere are no subscriptions, no capital Stock (or any securities, instrumentsoptions, warrants, optionsor calls relating to any shares of any Borrower’s Subsidiaries’ capital Stock, purchase rights, including any right of conversion or exchange rights, calls, commitments under any outstanding security or claims other instrument. No Borrower or any of its Subsidiaries is subject to any obligation (contingent or otherwise) to repurchase or otherwise acquire or retire any shares of any character Borrower’s Subsidiaries’ capital Stock or any security convertible into or exercisable exchangeable for any such capital Stock) , except with respect to Foreign Subsidiaries, an immaterial number or percentage of any direct shares of Stock thereof which is held by local Persons in accordance with the applicable laws or indirect Subsidiary regulations of Borrower is subject to the issuance jurisdictions of any security, instrument, warrant, option, purchase right, conversion or exchange right, call, commitment or claim of any right, title, or interest therein or theretosuch Foreign Subsidiaries.

Due Organization and Qualification; Subsidiaries. (a) Borrower is duly organized and existing and in good standing under the laws of the jurisdiction of its incorporation and qualified and licensed to do business in, and in good standing in, any state where the failure to be so licensed or qualified reasonably 46 could be expected to have constitute a Material Adverse Change. (b) Set forth on Schedule 5.8, is a complete and accurate description of the authorized capital Stock of Borrower, by class, and, as of the Closing Date, a description of the number of shares of each such class that are issued and outstanding and the number of such shares that are held in Borrower's treasury. All such outstanding shares have been validly issued and, as of the Closing Date, are fully paid, nonassessable shares free of contractual preemptive rights. The issuance and sale of all such shares have been in compliance with all applicable federal and state securities laws. Other than as described on Schedule 5.8, as of the Closing Date, there are no subscriptions, options, warrants, or calls relating to any shares of Borrower's capital Stock, including any right of conversion or exchange under any outstanding security or other instrument. Borrower is not subject to any obligation (contingent or otherwise) to repurchase or otherwise acquire or retire any shares of its capital Stock or any security convertible into or exchangeable for any of its capital Stock. (c) Set forth on Schedule 5.8, is a complete and accurate list of Borrower's direct and indirect Subsidiaries as of the Closing DateSubsidiaries, showing: : (i) the jurisdiction of their incorporation; (ii) the number of shares of each class of common and preferred Stock authorized for each of such Subsidiaries; and (iii) the number and the percentage of the outstanding shares of each such class owned directly or indirectly by Borrower. All of the outstanding capital Stock of each such Subsidiary has been validly issued and is fully paid and non-assessable. (d) Except as set forth on Schedule 5.8, as of the Closing Date, no capital Stock (or any securities, instruments, warrants, options, purchase rights, conversion or exchange rights, calls, commitments or claims of any character convertible into or exercisable for capital Stock) of any direct or indirect Subsidiary of Borrower is subject to the issuance of any security, instrument, warrant, option, purchase right, conversion or exchange right, call, commitment or claim of any right, title, or interest therein or thereto.

Due Organization and Qualification; Subsidiaries. (a) Each Borrower is duly organized and existing and in good standing under the laws of the jurisdiction of its incorporation and qualified and licensed to do business in, and in good standing in, any state where the failure to be so licensed or qualified reasonably 46 could be expected to have constitute a Material Adverse Change. Each Subsidiary is duly organized and existing and in good standing under the laws of the jurisdiction of its incorporation or organization and qualified and licensed to do business in, and in good standing in, any state where the failure to be so licensed or qualified could be expected to constitute a Material Adverse Change. (b) Set forth on Schedule 5.8, is a complete and accurate description of the authorized capital Stock of Borrower, by class, and, as of the Closing Date, a description of the number of shares of each such class that are issued and outstanding and the number of such shares that are held in Borrower's treasury. All such outstanding shares have been validly issued and, as of the Closing Date, are fully paid, nonassessable shares free of contractual preemptive rights. The issuance and sale of all such shares have been in compliance with all applicable federal and state securities laws. Other than as described on Schedule 5.8, as of the Closing Date, there are no subscriptions, options, warrants, or calls relating to any shares of Borrower's capital Stock, including any right of conversion or exchange under any outstanding security or other instrument. Borrower is not subject to any obligation (contingent or otherwise) to repurchase or otherwise acquire or retire any shares of its capital Stock or any security convertible into or exchangeable for any of its capital Stock. (c) Set forth on Schedule 5.85.3(b), is a complete and accurate list of Borrower's Parent’s direct and indirect Subsidiaries as of the Closing Date, showing: (i) the jurisdiction of their incorporationincorporation or organization; (ii) the number of shares of each class of common and preferred Capital Stock authorized for each of such Subsidiaries; and (iii) the number and the percentage of the outstanding shares of each such class owned directly or indirectly by BorrowerParent. All of the outstanding capital Capital Stock of each such Subsidiary has been validly issued and is fully paid and non-assessable. (d) . Except as set forth provided on Schedule 5.85.3(b), as of the Closing Date, the Loan Parties have no capital direct or indirect equity interest in (and no joint venture interest with or in) any Person. Except as set forth on Schedule 5.3(b), no Capital Stock (or any securities, instruments, warrants, options, purchase rights, conversion or exchange rights, calls, commitments or claims of any character convertible into or exercisable for Capital Stock) of any direct or indirect Subsidiary of Borrower Parent is subject to the issuance of any security, instrument, warrant, option, purchase right, conversion or exchange right, call, commitment or claim of any right, title, or interest therein or thereto. No Loan Party is subject to any obligation (contingent or otherwise) to repurchase or otherwise acquire or retire any shares of Capital Stock or any security convertible into or exchangeable for any of Capital Stock.

Due Organization and Qualification; Subsidiaries. (a) Borrower Each Obligor is duly organized and existing and in good standing under the laws of the jurisdiction of its incorporation organization and qualified and licensed to do business in, and in good standing in, any state where the failure to be so licensed or qualified would reasonably 46 could be expected to have cause a Material Adverse Change. (b) Set forth on Schedule SCHEDULE 5.8, is a complete and accurate description of the authorized capital Stock of Borrowereach Obligor (other than Guitar) as of the Closing Date, by class, and, as of the Closing Date, a description of the number of shares of each such class that are issued and outstanding and the number of such shares that are held in Borrower's treasury. All such outstanding shares have been validly issued and, as of the Closing Date, are fully paid, nonassessable shares free of contractual preemptive rights. The issuance and sale of all such shares have been in compliance with all applicable federal and state securities lawsoutstanding. Other than as described on Schedule SCHEDULE 5.8, as of the Closing Date, there are no subscriptions, options, warrants, or calls relating to any shares of Borrower's the capital StockStock of any Obligor (other than Guitar) as of the Closing Date, including any right of conversion or exchange under any outstanding security or other instrument. Borrower No Obligor is not subject to any obligation (contingent or otherwise) to repurchase or otherwise acquire or retire any shares of its capital Stock or any security convertible into or exchangeable for any of its capital Stock. (c) Set forth on Schedule SCHEDULE 5.8, is a complete and accurate list of each Borrower's direct and indirect Subsidiaries as of the Closing DateSubsidiaries, showing: : (i) the jurisdiction of their incorporation; (ii) the number of shares of each class of common and preferred Stock authorized for each of such Subsidiaries; and (iii) the number and the percentage of the outstanding shares of each such class owned directly or indirectly by BorrowerBorrowers. All of the outstanding capital Stock of each such Subsidiary has been validly issued and is fully paid and non-assessable. (d) Except as set forth on Schedule SCHEDULE 5.8, as of the Closing Date, no capital Stock (or any securities, instruments, warrants, options, purchase rights, conversion or exchange rights, calls, commitments or claims of any character convertible into or exercisable for Stock) of any direct or indirect Subsidiary of Borrower Borrowers is subject to the issuance of any security, instrument, warrant, option, purchase right, conversion or exchange right, call, commitment or claim of any right, title, or interest therein or thereto.

Due Organization and Qualification; Subsidiaries. (a) Borrower is duly organized and existing and in good standing under the laws of the jurisdiction of its incorporation organization and qualified and licensed to do business in, and in good standing in, any state where the failure to be so licensed or qualified reasonably 46 could be expected to have result in a Material Adverse Change. (b) Set As of the date hereof, set forth on Schedule 5.85.8(b), is a complete and accurate description of the authorized capital Stock of Borrower, by class, and, as of the Closing Date, a description of the number of shares of each such class that are issued and outstanding and the number of such shares that are held in Borrower's treasuryoutstanding. All such outstanding shares have been validly issued and, as As of the Closing Datedate hereof, are fully paid, nonassessable shares free of contractual preemptive rights. The issuance and sale of all such shares have been in compliance with all applicable federal and state securities laws. Other other than as described on Schedule 5.8, as of the Closing Date5.8(b), there are no subscriptions, options, warrants, or calls relating to any shares of Borrower's capital Stock, including any right of conversion or exchange under any outstanding security or other instrument. Except as set forth on Schedule 5.8(b) or as otherwise provided in the Stockholders Agreement, Borrower is not subject to any obligation (contingent or otherwise) to repurchase or otherwise acquire or retire any shares of its capital Stock or any security convertible into or exchangeable for any of its capital Stock. (c) Set As of the date hereof, set forth on Schedule 5.85.8(c), is a complete and accurate list of Borrower's direct and indirect Subsidiaries as of the Closing DateSubsidiaries, showing: : (i) the jurisdiction of their incorporationorganization; (ii) the number of shares of each class of common and preferred Stock authorized for each of such Subsidiaries; and (iii) the number and the percentage of the outstanding shares of each such class owned directly or indirectly by Borrower. All of the outstanding capital Stock of each such Subsidiary has been validly issued and is fully paid and non-assessable. (d) Except As of the date hereof, except as set forth on Schedule 5.85.8(c), as of the Closing Datethere are no subscriptions, no capital Stock (or any securities, instrumentsoptions, warrants, optionsor calls relating to any shares of Borrower's Subsidiaries' capital Stock, purchase rights, including any right of conversion or exchange rights, calls, commitments under any outstanding security or claims other instrument. Neither Borrower nor any of its Subsidiaries is subject to any character obligation (contingent or otherwise) to repurchase or otherwise acquire or retire any shares of Borrower's Subsidiaries' capital Stock or any security convertible into or exercisable exchangeable for any such capital Stock) of any direct or indirect Subsidiary of Borrower is subject to the issuance of any security, instrument, warrant, option, purchase right, conversion or exchange right, call, commitment or claim of any right, title, or interest therein or thereto.

Due Organization and Qualification; Subsidiaries. (a) Borrower is duly organized and existing and in good standing under the laws of the jurisdiction of its incorporation and qualified and licensed to do business in, and in good standing in, any state where the failure to be so licensed or qualified reasonably 46 could be expected to have a Material Adverse Change. (b) Set forth on Schedule 5.8, Each Guarantor is a complete duly organized and accurate description existing and in good standing under the laws of the authorized capital Stock jurisdiction of Borrowerits incorporation and qualified and licensed to do business in, by classand in good standing in, and, as of any state where the Closing Date, failure to be so licensed or qualified reasonably could be expected to have a description of the number of shares of each such class that are issued and outstanding and the number of such shares that are held in Borrower's treasury. All such outstanding shares have been validly issued and, as of the Closing Date, are fully paid, nonassessable shares free of contractual preemptive rights. The issuance and sale of all such shares have been in compliance with all applicable federal and state securities lawsMaterial Adverse Change. Other than as described on Schedule 5.8with respect to StarPress' internet business located in Venice, as of California, neither Guarantor currently engages in any business, nor intends in the Closing Date, there are no subscriptions, options, warrants, or calls relating future to engage in any shares of Borrower's capital Stock, including any right of conversion or exchange under any outstanding security or other instrument. Borrower is not subject to any obligation (contingent or otherwise) to repurchase or otherwise acquire or retire any shares of its capital Stock or any security convertible into or exchangeable for any of its capital Stockbusiness. (c) Set forth on Schedule 5.8, is a complete and accurate list of ------------ Borrower's direct and indirect Subsidiaries as of the Closing DateSubsidiaries, showing: : (i) the jurisdiction of their incorporation; (ii) the number of shares of each class of common and preferred Stock authorized for each of such Subsidiaries; and (iii) the number and the percentage of the outstanding shares of each such class owned directly or indirectly by Borrower. All of the outstanding capital Stock of each such Subsidiary has been validly issued and is fully paid and non-assessable. (d) Except as set forth on Schedule 5.8, as of the Closing Date, no capital Stock (or any ------------ securities, instruments, warrants, options, purchase rights, conversion or exchange rights, calls, commitments or claims of any character convertible into or exercisable for capital Stock) of any direct or indirect Subsidiary of Borrower is subject to the issuance of any security, instrument, warrant, option, purchase right, conversion or exchange right, call, commitment or claim of any right, title, or interest therein or thereto. (e) As to each Inactive Subsidiary: each such Subsidiary does not own any property or assets of any consequential value, does not currently engage in any business, and does not intend in the future to engage in any business.

Due Organization and Qualification; Subsidiaries. (a) Borrower Each Obligor is duly organized and existing and in good standing under the laws of the jurisdiction of its incorporation organization and qualified and licensed to do business in, and in good standing in, any state where the failure to be so licensed or qualified reasonably 46 could be expected to have result in a Material Adverse Change. (b) Set forth on Schedule 5.8, is a complete and accurate description description, as of the Closing Date, of the authorized capital Stock of Borrowereach Obligor, by class, and, as of the Closing Date, a description of the number of shares of each such class that are issued and outstanding and the number of such shares that are held in Borrower's treasury. All such outstanding shares have been validly issued and, as of the Closing Date, are fully paid, nonassessable shares free of contractual preemptive rights. The issuance and sale of all such shares have been in compliance with all applicable federal and state securities lawsoutstanding. Other than as described on Schedule 5.8, as of the Closing Date, there are no subscriptions, options, warrants, or calls relating to any shares of Borrower's the Obligors' capital Stock, including any right of conversion or exchange under any outstanding security or other instrument. Borrower is The Obligors are not subject to any obligation (contingent or otherwise) to repurchase or otherwise acquire or retire any shares of its their capital Stock or any security convertible into or exchangeable for any of its their capital Stock. (c) Set forth on Schedule 5.8, is a complete and accurate list of Borrower's direct and indirect Subsidiaries list, as of the Closing Date, of each Obligor's direct and indirect Subsidiaries, showing: : (i) the jurisdiction of their incorporationformation; (ii) the number of shares of each class of common and preferred Stock authorized for each of such Subsidiaries; and (iii) the number and the percentage of the outstanding shares of each such class owned directly or indirectly by Borroweran Obligor. All of the outstanding capital Stock of each such Subsidiary has been validly issued and is fully paid and non-assessable. (d) Except as set forth on Schedule 5.8, as of the Closing Date, no capital Stock (or any securities, instruments, warrants, options, purchase rights, conversion or exchange rights, calls, commitments or claims of any character convertible into or exercisable for Stock) of any direct or indirect Subsidiary of Borrower is subject to the issuance of any security, instrument, warrant, option, purchase right, conversion or exchange right, call, commitment or claim of any right, title, or interest therein or thereto.or

Due Organization and Qualification; Subsidiaries. (a) Borrower is duly organized and existing and in good standing under the laws of the jurisdiction of its incorporation and qualified and licensed to do business in, and in good standing in, any state where the failure to be so licensed or qualified reasonably 46 could be expected to have a Material Adverse Change. (b) Set forth on Schedule 5.8, is a complete and accurate description ------------ of the authorized capital Stock of Borrower, by class, and, as of the Closing Date, a description of the number of shares of each such class that are issued and outstanding and the number of such shares that are held in Borrower's treasury. All such outstanding shares have been validly issued and, as of the Closing Date, are fully paid, nonassessable shares free of contractual preemptive rights. The issuance and sale of all such shares have been in compliance with all applicable federal and state securities laws. Other than Except as described on Schedule 5.8, as disclosed in Section 8.g. of the Closing DateSecurities Issuance Agreement, there are no subscriptions, options, warrants, or calls relating to any shares of Borrower's capital Stock, including any right of conversion or exchange under any outstanding security or other instrument. Borrower is not subject to any obligation (contingent or otherwise) to repurchase or otherwise acquire or retire any shares of its capital Stock or any security convertible into or exchangeable for any of its capital Stock. (c) Set forth on Schedule 5.8, is a complete and accurate list of ------------ Borrower's direct and indirect Subsidiaries as of the Closing DateSubsidiaries, showing: : (i) the jurisdiction of their incorporation; (ii) the number of shares of each class of common and preferred Stock authorized for each of such Subsidiaries; and (iii) the number and the percentage of the outstanding shares of each such class owned directly or indirectly by Borrower. All of the outstanding capital Stock of each such Subsidiary has been validly issued and is fully paid and non-assessable. (d) Except as set forth on Schedule 5.8, as of the Closing Date, no capital Stock (or any ------------ securities, instruments, warrants, options, purchase rights, conversion or exchange rights, calls, commitments or claims of any character convertible into or exercisable for capital Stock) of any direct or indirect Subsidiary of Borrower is subject to the issuance of any security, instrument, warrant, option, purchase right, conversion or exchange right, call, commitment or claim of any right, title, or interest therein or thereto.

Due Organization and Qualification; Subsidiaries. (a) Borrower is duly organized and existing and in good standing under the laws of the jurisdiction of its incorporation and qualified and licensed to do business in, and in good standing in, any state where the failure to be so licensed or qualified reasonably 46 could be expected to have a Material Adverse Change. (b) Set forth on Schedule 5.84.1, is a complete and accurate description of the authorized capital Stock of Borrower, by class, and, as of the Closing Date, a description of the number of shares of each such class that are issued and outstanding and the number of such shares that are held in Borrower's treasury. All Other than as described on Schedule 4.1, all such outstanding shares have been validly issued and, as of the Closing Date, are fully paid, paid and nonassessable shares free of as to which there are no contractual preemptive rights. The issuance and sale of all such shares have been in compliance with all applicable federal and state securities laws. Other than as described on Schedule 5.84.1, as of on the Closing Date, there are no subscriptions, options, warrants, or calls relating to any shares of Borrower's capital Stock, including any right of conversion or exchange under any outstanding security or other instrument. Other than as described on Schedule 4.1, Borrower is not subject to any obligation (contingent or otherwise) to repurchase or otherwise acquire or retire any shares of its capital Stock or any security convertible into or exchangeable for any of its capital Stock. (c) Set forth on Schedule 5.84.1, is a complete and accurate list of Borrower's direct and indirect Subsidiaries as of the Closing DateSubsidiaries, showing: : (i) the jurisdiction of their incorporation; (ii) the number of shares of each class of common and preferred Stock authorized for each of such Subsidiaries; and (iii) the number and the percentage of the outstanding shares of each such class owned directly or indirectly by Borrower. All of the outstanding capital Stock of each such Subsidiary has been validly issued and is fully paid and non-assessable. (d) Except as set forth on Schedule 5.8, as of the Closing Date4.1, no capital Stock (or any securities, instruments, warrants, options, purchase rights, conversion or exchange rights, calls, commitments or claims of any character convertible into or exercisable for Stock) of any direct or indirect Subsidiary of Borrower is subject to the issuance of any security, instrument, warrant, option, purchase right, conversion or exchange right, call, commitment or claim of any right, title, or interest therein or thereto. (e) VA Sub is the only Subsidiary of the Borrower and it exists solely for the purpose of complying with regulatory requirements of Virginia law, has no material assets other than governmental licenses and permits, and does not engage in active business operations other than proposed sales operations. As of the date hereof, the fair market value of the Borrower's investment in VA Sub (measured as of the time such investment or investments were made) is less than $100,000.

Due Organization and Qualification; Subsidiaries. (a) Borrower is duly organized and existing and in good standing under the laws of the jurisdiction of its incorporation and qualified and licensed to do business in, and in good standing in, any state where the failure to be so licensed or qualified reasonably 46 could be expected to have constitute a Material Adverse Change. (b) Set forth on Schedule 5.8, is a complete and accurate description of the authorized capital Stock of Borrower, by class, and, as of the Closing Effective Date, a description of the number of shares of each such class that are issued and outstanding and the number of such shares that are held in Borrower's treasury. All such outstanding shares have been validly issued and, as of the Closing Effective Date, are fully paid, nonassessable shares free of contractual preemptive rights. The issuance and sale of all such shares have been in compliance with all applicable federal and state securities laws. Other than as described on Schedule 5.8, as of the Closing Effective Date, there are no subscriptions, options, warrants, or calls relating to any shares of Borrower's capital Stock, including any right of conversion or exchange under any outstanding security or other instrument. Borrower is not subject to any obligation (contingent or otherwise) to repurchase or otherwise acquire or retire any shares of its capital Stock or any security convertible into or exchangeable for any of its capital Stock. (c) Set forth on Schedule 5.8, is a complete and accurate list of Borrower's direct and indirect Subsidiaries as of the Closing DateSubsidiaries, showing: : (i) the jurisdiction of their incorporation; (ii) the number of shares of each class of common and preferred Stock authorized for each of such Subsidiaries; and (iii) the number and the percentage of the outstanding shares of each such class owned directly or indirectly by Borrower. All of the outstanding capital Stock of each such Subsidiary has been validly issued and is fully paid and non-assessable. (d) Except as set forth on Schedule 5.8, as of the Closing Date, no capital Stock (or any securities, instruments, warrants, options, purchase rights, conversion or exchange rights, calls, commitments or claims of any character convertible into or exercisable for capital Stock) of any direct or indirect Subsidiary of Borrower is subject to the issuance of any security, instrument, warrant, option, purchase right, conversion or exchange right, call, commitment or claim of any right, title, or interest therein or thereto. (e) Each Non-Material Subsidiary (i) does not individually own any property or assets with a book value in excess of $200,000 or, together with all other Non-Material Subsidiaries, own any property or assets with a book value in excess of $500,000 in the aggregate, (ii) does not currently engage in any material business activity, and (iii) does not intend in the future to engage in any material business activity.

Due Organization and Qualification; Subsidiaries. (a) Borrower is duly organized and existing and in good standing under the laws of the jurisdiction of its incorporation and qualified and licensed to do business in, and in good standing in, any state where the failure to be so licensed or qualified reasonably 46 could be expected to have a Material Adverse Change. (b) Set forth on Schedule 5.8, is a complete and accurate description of the authorized capital Stock of Borrower, by class, and, as of the Closing Date, a description of the number of shares of each such class that are issued and outstanding and the number of such shares that are held in Borrower's treasury. All Other than as described on Schedule 5.8, all such outstanding shares have been validly issued and, as of the Closing Date, are fully paid, paid and nonassessable shares free of as to which there are no contractual preemptive rights. The issuance and sale of all such shares have been in compliance with all applicable federal and state securities laws. Other than as described on Schedule 5.8, as of on the Closing Date, there are no subscriptions, options, warrants, or calls relating to any shares of Borrower's capital Stock, including any right of conversion or exchange under any outstanding security or other instrument. Other than as described on Schedule 5.8, Borrower is not subject to any obligation (contingent or otherwise) to repurchase or otherwise acquire or retire any shares of its capital Stock or any security convertible into or exchangeable for any of its capital Stock. (c) Set forth on Schedule 5.8, is a complete and accurate list of Borrower's direct and indirect Subsidiaries as of the Closing DateSubsidiaries, showing: : (i) the jurisdiction of their incorporation; (ii) the number of shares of each class of common and preferred Stock authorized for each of such Subsidiaries; and (iii) the number and the percentage of the outstanding shares of each such class owned directly or indirectly by Borrower. All of the outstanding capital Stock of each such Subsidiary has been validly issued and is fully paid and non-assessable. (d) Except as set forth on Schedule 5.8, as of the Closing Date, no capital Stock (or any securities, instruments, warrants, options, purchase rights, conversion or exchange rights, calls, commitments or claims of any character convertible into or exercisable for Stock) of any direct or indirect Subsidiary of Borrower is subject to the issuance of any security, instrument, warrant, option, purchase right, conversion or exchange right, call, commitment or claim of any right, title, or interest therein or thereto. (e) VA Sub exists solely for the purpose of complying with regulatory requirements of Virginia law, has no material assets other than governmental licenses and permits, and does not engage in active business operations other than proposed sales operations.

Due Organization and Qualification; Subsidiaries. (a) Each Borrower is duly organized and existing and in good standing under the laws of the jurisdiction of its incorporation and qualified and licensed to do business in, and in good standing in, any state where the failure to be so licensed or qualified reasonably 46 could be expected to have a Material Adverse Change. (b) Set forth on Schedule 5.8, is a complete and accurate description of the authorized capital Stock stock of BorrowerParent, by class, and, as of the Closing Date, a description of the number of shares of each such class that are issued and outstanding and the number of such shares that are held in BorrowerParent's treasury. All such outstanding shares have been validly issued and, as of the Closing Date, are fully paid, nonassessable shares free of contractual preemptive rights. The issuance and sale of all such shares have been in compliance with all applicable federal and state securities laws. Other than as described on Schedule 5.8, as of the Closing Date, there are no subscriptions, options, warrants, or calls relating to any shares of BorrowerParent's capital Stockstock, including any right of conversion or exchange under any outstanding security or other instrument. Borrower Parent is not subject to any obligation (contingent or otherwise) to repurchase or otherwise acquire or retire any shares of its capital Stock stock or any security convertible into or exchangeable for any of its capital stock, except as otherwise set forth on Schedule 5.8 with respect to the 9% Convertible Subordinated Debentures and the Parent's 9% Cumulative Convertible Exchangeable Preferred Stock. (c) Set forth on Schedule 5.8, is a complete and accurate list of each Borrower's direct and indirect Subsidiaries as of the Closing DateSubsidiaries, showing: (i) the jurisdiction of their incorporation; (ii) the number of shares of each class of common and preferred Stock authorized for each of such Subsidiaries; and (iii) the number and the percentage of the outstanding shares of each such class owned directly or indirectly by Borrower. All of the outstanding capital Stock of each such Subsidiary has been validly issued and is fully paid and non-assessable. (d) Except as set forth on Schedule 5.8, as of the Closing Date, no capital Stock (or any securities, instruments, warrants, options, purchase rights, conversion or exchange rights, calls, commitments or claims of any character convertible into or exercisable for Stock) of any direct or indirect Subsidiary of Borrower is subject to the issuance of any security, instrument, warrant, option, purchase right, conversion or exchange right, call, commitment or claim of any right, title, or interest therein or thereto.;

Due Organization and Qualification; Subsidiaries. (a) Each Borrower is duly organized and existing and in good standing under the laws of the jurisdiction of its incorporation organization and qualified and licensed to do business in, and in good standing in, any state where the failure to be so licensed or qualified reasonably 46 could be expected to have a Material Adverse Change. (b) Set forth on Schedule 5.8, 5.8(b) to the Parent Disclosure Letter is a complete and accurate description of the authorized capital Stock of each Borrower, by class, and, as of the Closing Date, a description of the number of shares of each such class that are issued and outstanding and the number of such shares that are held in Borrower's treasury. All such outstanding shares have been validly issued and, as of the Closing Date, are fully paid, nonassessable shares free of contractual preemptive rights. The issuance and sale of all such shares have been in compliance with all applicable federal and state securities lawsoutstanding. Other than as described on Schedule 5.8, as of 5.8(b) to the Closing DateParent Disclosure Letter, there are no subscriptions, options, warrants, or calls relating to any shares of each Borrower's capital Stock, including any right of conversion or exchange under any outstanding security or other instrument. No Borrower is not subject to any obligation (contingent or otherwise) to repurchase or otherwise acquire or retire any shares of its capital Stock or any security convertible into or exchangeable for any of its capital Stock. (c) Set forth on Schedule 5.85.8(c) to the Parent Disclosure Letter, is a complete and accurate list of each Borrower's direct and indirect Subsidiaries as of the Closing DateSubsidiaries, showing: : (i) the jurisdiction of their incorporation; organization, (ii) the number of shares of each class of common and preferred Stock authorized for each of such Subsidiaries; , and (iii) the number and the percentage of the outstanding shares of each such class owned directly or indirectly by the applicable Borrower. All of the outstanding capital Stock of each such Subsidiary has been validly issued and is fully paid and non-assessable. (d) Except as set forth on Schedule 5.85.8(c) to the Parent Disclosure Letter, as of the Closing Datethere are no subscriptions, no capital Stock (or any securities, instrumentsoptions, warrants, optionsor calls relating to any shares of any Borrower's Subsidiaries' capital Stock, purchase rights, including any right of conversion or exchange rights, calls, commitments under any outstanding security or claims other instrument. No Borrower or any of its respective Subsidiaries is subject to any obligation (contingent or otherwise) to repurchase or otherwise acquire or retire any shares of any character Borrower's Subsidiaries' capital Stock or any security convertible into or exercisable exchangeable for any such capital Stock) of any direct or indirect Subsidiary of Borrower is subject to the issuance of any security, instrument, warrant, option, purchase right, conversion or exchange right, call, commitment or claim of any right, title, or interest therein or thereto.

Due Organization and Qualification; Subsidiaries. (a) Borrower Each Company is duly organized and existing and in good standing under the laws of the jurisdiction of its incorporation and qualified and licensed to do business in, and in good standing in, any state jurisdiction where the failure to be so licensed or qualified reasonably 46 could be expected to have constitute a Material Adverse Change. (b) Set forth on Schedule SCHEDULE 5.8, is a complete and accurate description of the authorized capital Stock of Borrowereach Company, by class, and, as of the Closing Date, a description of the number of shares of each such class that are issued and outstanding and the number of such shares that are held in Borrowereach Company's treasury. All such outstanding shares have been validly issued and, as of the Closing Date, are fully paid, nonassessable shares free of contractual preemptive rights. The issuance and sale of all such shares have been in compliance with all applicable federal and federal, state securities and foreign laws. Other than as described on Schedule SCHEDULE 5.8, as of the Closing Date, there are no subscriptions, options, warrants, or calls relating to any shares of Borrowerany Company's capital Stock, including any right of conversion or exchange under any outstanding security or other instrument. Borrower No Company is not subject to any obligation (contingent or otherwise) -57- 58 to repurchase or otherwise acquire or retire any shares of its capital Stock or any security convertible into or exchangeable for any of its capital Stock. (c) Set forth on Schedule SCHEDULE 5.8, is a complete and accurate list of Borrowereach Company's direct and indirect Subsidiaries as of the Closing DateSubsidiaries, showing: (i) the jurisdiction of their incorporation; (ii) the number of shares of each class of common and preferred Stock authorized for each of such Subsidiaries; and (iii) the number and the percentage of the outstanding shares of each such class owned directly or indirectly by Borrowereach Company. All of the outstanding capital Stock of each such Subsidiary has been validly issued and is fully paid and non-assessable. (d) Except as set forth on Schedule SCHEDULE 5.8, as of the Closing Date, no capital Stock (or any securities, instruments, warrants, options, purchase rights, conversion or exchange rights, calls, commitments or claims of any character convertible into or exercisable for capital Stock) of any direct or indirect Subsidiary of Borrower any Company is subject to the issuance of any security, instrument, warrant, option, purchase right, conversion or exchange right, call, commitment or claim of any right, title, or interest therein or thereto.

Due Organization and Qualification; Subsidiaries. (a) Borrower is duly organized and existing and in good standing under the laws of the jurisdiction of its incorporation and qualified and licensed to do business in, and in good standing in, any state where the failure to be so licensed or qualified could reasonably 46 could be expected to have constitute a Material Adverse Change. Each of Borrower's Subsidiaries is duly organized and existing and in good standing under the laws of the jurisdiction of its incorporation and qualified and licensed to do business in, and in good standing in, any state where the failure to be so licensed or qualified could reasonably be expected to constitute a Material Adverse Change. (b) Set forth on Schedule 5.8, is a complete and accurate description of the authorized capital Stock of Borrower, by class, and, as of the Closing Date, a description of the number of shares of each such class that are issued and outstanding and the number of such shares that are held in Borrower's treasury. All such outstanding shares have been validly issued and, as of the Closing Date, are fully paid, nonassessable shares free of contractual preemptive rights. The issuance and sale of all such shares have been in compliance with all applicable federal and state securities laws. Other than as described on Schedule 5.8, as of the Closing Date, there are no subscriptions, options, warrants, or calls relating to any shares of Borrower's capital Stock, including any right of conversion or exchange under any outstanding security or other instrument. Neither Borrower nor any of its Subsidiaries is not subject to any obligation (contingent or otherwise) to repurchase or otherwise acquire or retire any shares of its capital Stock or any security convertible into or exchangeable for any of its capital Stock. (c) Set forth on Schedule 5.8, is a complete and accurate list of Borrower's direct and indirect Subsidiaries as of the Closing Date, showing: (i) the jurisdiction of their incorporation; (ii) the number of shares of each class of common and preferred Stock authorized for each of such Subsidiaries; and (iii) the number and the percentage of the outstanding shares of each such class owned directly or indirectly by Borrower. All of the outstanding capital Stock of each such Subsidiary Borrower has been validly issued and is fully paid and non-assessable. (d) Except as set forth on Schedule 5.8, as of the Closing Date, no capital Stock (or any securities, instruments, warrants, options, purchase rights, conversion or exchange rights, calls, commitments or claims of any character convertible into or exercisable for Stock) of any direct or indirect Subsidiary of Borrower is subject to the issuance of any security, instrument, warrant, option, purchase right, conversion or exchange right, call, commitment or claim of any right, title, or interest therein or theretoSubsidiaries.

Due Organization and Qualification; Subsidiaries. (a) Each Borrower is duly organized and existing and in good standing under the laws of the jurisdiction of its incorporation and qualified and licensed to do business in, and in good standing in, any state where the failure to be so licensed or qualified reasonably 46 could be expected to have cause a Material Adverse Change. (b) Set forth on Schedule 5.8, 5.8 is a complete and accurate description of the authorized capital Stock of each Borrower, by class, and, as of the Closing Restatement Date, a description of the number of shares of each such class that are issued and outstanding and the number of such shares that are held in Borrower's treasury. All such outstanding shares have been validly issued and, as of the Closing Date, are fully paid, nonassessable shares free of contractual preemptive rights. The issuance and sale of all such shares have been in compliance with all applicable federal and state securities lawsoutstanding. Other than as described on Schedule 5.8, as of the Closing Date, there are no subscriptions, options, warrants, or calls relating to any shares of such Borrower's ’s capital Stock, including any right of conversion or exchange under any outstanding security or other instrument. Borrower Poolmart is not subject to any obligation (contingent or otherwise) to repurchase or otherwise acquire or retire any shares of its capital Stock or any security convertible into or exchangeable for any of its capital Stock. (c) . Set forth on Schedule 5.8, 5.8 is a complete and accurate list of each Borrower's ’s direct and indirect Subsidiaries as of the Closing DateSubsidiaries, showing: (i) the jurisdiction of their incorporation; (ii) the number of shares of each class of common and preferred Stock stock authorized for each of such Subsidiaries; and (iii) the number and the percentage of the outstanding shares of each such class owned directly or indirectly by such Borrower. All of the outstanding capital Stock of each such Subsidiary has been validly issued and is fully paid and non-assessable. (dc) Except as set forth on Schedule 5.8, as of the Closing Date, no capital Stock stock (or any subscriptions, securities, instruments, warrants, options, purchase rights, conversion or exchange rights, calls, commitments or claims of any character convertible into or exercisable for Stockcapital stock) of any direct or indirect Subsidiary of any Borrower is subject to the issuance of any security, instrument, warrant, option, purchase right, conversion or exchange right, call, commitment or claim of any right, title, or interest therein or thereto.

Due Organization and Qualification; Subsidiaries. (a) Borrower Each Credit Party is duly organized and existing and in good standing under the laws of the jurisdiction of its incorporation organization and qualified and licensed to do business in, and in good standing in, any state where the failure to be so licensed or qualified reasonably 46 could be expected to have a Material Adverse Change. (b) Set forth on Schedule 5.8, is a complete and accurate description of the authorized capital Stock of Borrower, by class, and, as As of the Closing Date, a description of the number of shares of each such class that are issued and outstanding and the number of such shares that are held in Borrower's treasury. All such outstanding shares have been validly issued and, as of the Closing Date, are fully paid, nonassessable shares free of contractual preemptive rights. The issuance and sale of all such shares have been in compliance with all applicable federal and state securities laws. Other other than as described on Schedule 5.8, as of 5.7(b) to the Closing DateCompliance Certificate, and except for employee stock options, there are no subscriptions, options, warrants, or calls relating to any shares of Borrower's any Credit Party’s capital Stock, including any right of conversion or exchange under any outstanding security or other instrument. Borrower Except as set forth on Schedule 5.7(b) to the Closing Compliance Certificate, as of the Closing Date, no Credit Party is not subject to any obligation (contingent or otherwise) to repurchase or otherwise acquire or retire any shares of its capital Stock or any security convertible into or exchangeable for any of its capital Stock. (c) Set forth on Schedule 5.8, 5.7(c) to the Closing Compliance Certificate is a complete and accurate list of Borrower's each Credit Party’s direct and indirect Subsidiaries as of the Closing Date, showing: showing (i) with respect to all Subsidiaries other than Excluded Subsidiaries and Unrestricted Subsidiaries, (A) the jurisdiction of their incorporation; organization, (iiB) the number of shares of each class of common and preferred Stock authorized for each of such Subsidiaries; Credit Party, and (iiiC) the number and the percentage of the outstanding shares of each such class owned directly or indirectly by Borrowersuch Credit Party and (ii) with respect to all Excluded Subsidiaries and Unrestricted Subsidiaries, (x) the jurisdiction of their organization and (y) the percentage of Stock owned directly or indirectly by any Credit Party in such Excluded Subsidiaries. All of the outstanding capital Stock of each such Restricted Subsidiary has been validly issued and is fully paid and non-assessable. (d) Except as set forth on Schedule 5.8, as of the Closing Date, no capital Stock (or any securities, instruments, warrants, options, purchase rights, conversion or exchange rights, calls, commitments or claims of any character convertible into or exercisable for Stock) of any direct or indirect Subsidiary of Borrower is subject to the issuance of any security, instrument, warrant, option, purchase right, conversion or exchange right, call, commitment or claim of any right, title, or interest therein or thereto.

Due Organization and Qualification; Subsidiaries. (a) Borrower is duly organized and existing and in good standing under the laws of the jurisdiction of its incorporation organization and qualified and licensed to do business in, and in good standing in, any state where the failure to be so licensed or qualified reasonably 46 could be expected to have a Material Adverse Change. (b) Set forth on Schedule 5.85.8(b), is a complete and accurate description of the authorized capital Stock of Borrower, by class, and, as of the Closing Date, a description of the number of shares of each such class that are issued and outstanding and the number of such shares that are held in Borrower's treasury. All such outstanding shares have been validly issued and, as of the Closing Date, are fully paid, nonassessable shares free of contractual preemptive rights. The issuance and sale of all such shares have been in compliance with all applicable federal and state securities lawsoutstanding. Other than as described on Schedule 5.8, as of the Closing Date5.8(b), there are no subscriptions, options, warrants, or calls relating to any shares of Borrower's capital Stock, including any right of conversion or exchange under any outstanding security or other instrument. Borrower is not subject to any obligation (contingent or otherwise) to repurchase or otherwise acquire or retire any shares of its capital Stock or any security convertible into or exchangeable for any of its capital Stock, other than the capital Stock held by the Junior Secured Creditors pursuant to the terms of the Junior Secured Creditors Put Right Agreement. (c) Set forth on Schedule 5.85.8(c), is a complete and accurate list of Borrower's direct and indirect Subsidiaries as of the Closing DateSubsidiaries, showing: (i) the jurisdiction of their incorporation; organization, (ii) the number of shares of each class of common and preferred Stock authorized for each of such Subsidiaries; , and (iii) the number and the percentage of the outstanding shares of each such class owned directly or indirectly by Borrower. All of the outstanding capital Stock of each such Subsidiary has been validly issued and is fully paid and non-assessable. (d) Except as set forth on Schedule 5.85.8(c), as of the Closing Datethere are no subscriptions, no capital Stock (or any securities, instrumentsoptions, warrants, optionsor calls relating to any shares of Borrower's Subsidiaries' capital Stock, purchase rights, including any right of conversion or exchange rights, calls, commitments under any outstanding security or claims other instrument. Neither Borrower nor any of its Subsidiaries is subject to any obligation (contingent or otherwise) to repurchase or otherwise acquire or retire any shares of capital Stock of any character Subsidiaries of Borrower or any security convertible into or exercisable exchangeable for any such capital Stock) of any direct or indirect Subsidiary of Borrower is subject to the issuance of any security, instrument, warrant, option, purchase right, conversion or exchange right, call, commitment or claim of any right, title, or interest therein or thereto.

Due Organization and Qualification; Subsidiaries. (a) Borrower is duly organized and existing and in good standing under the laws of the jurisdiction of its incorporation and qualified and licensed to do business in, and in good standing in, any state where the failure to be so licensed or qualified reasonably 46 could be expected to have a Material Adverse Change. (b) Set forth on Schedule 5.8, Each Guarantor is a complete duly organized and accurate description existing and in good standing under the laws of the authorized capital Stock of Borrower, by class, and, as of the Closing Date, a description of the number of shares of each such class that are issued and outstanding and the number of such shares that are held in Borrower's treasury. All such outstanding shares have been validly issued and, as of the Closing Date, are fully paid, nonassessable shares free of contractual preemptive rights. The issuance and sale of all such shares have been in compliance with all applicable federal and state securities laws. Other than as described on Schedule 5.8, as of the Closing Date, there are no subscriptions, options, warrants, or calls relating to any shares of Borrower's capital Stock, including any right of conversion or exchange under any outstanding security or other instrument. Borrower is not subject to any obligation (contingent or otherwise) to repurchase or otherwise acquire or retire any shares jurisdiction of its capital Stock incorporation and qualified and licensed to do business in, and in good standing in, any state where the failure to be so licensed or any security convertible into or exchangeable for any of its capital Stockqualified reasonably could be expected to have a Material Adverse Change. (c) Set forth on Schedule 5.8, is a complete and accurate list of Borrower's direct and indirect Subsidiaries as of the Closing DateSubsidiaries, showing: : (i) the jurisdiction of their incorporation; (ii) the number of shares of each class of common and preferred Stock authorized for each of such Subsidiaries; and (iii) the number and the percentage of the outstanding shares of each such class owned directly or indirectly by Borrower. All of the outstanding capital Stock of each such Subsidiary has been validly issued and is fully paid and non-assessable. (d) Except as set forth on Schedule 5.8, as of the Closing Date, no capital Stock (or any securities, instruments, warrants, options, purchase rights, conversion or exchange rights, calls, commitments or claims of any character convertible into or exercisable for capital Stock) of any direct or indirect Subsidiary of Borrower is subject to the issuance of any security, instrument, warrant, option, purchase right, conversion or exchange right, call, commitment or claim of any right, title, or interest therein or thereto. (e) As to each Inactive Subsidiary: It does not own any property or assets of any consequential value (after giving effect to any transfers being made by it on the Closing Date pursuant to Section 4.7), does not currently engage in any business, and does not intend in the future to engage in any business.

Due Organization and Qualification; Subsidiaries. (a) Borrower is duly organized and existing and in good standing under the laws of the jurisdiction of its incorporation organization and qualified and licensed to do business in, and in good standing in, any state where the failure to be so licensed or qualified reasonably 46 could be expected to have a Material Adverse Change. (b) Set forth on Schedule 5.85.8(b), is a complete and accurate description of the authorized capital Stock of Borrower, by class, and, as of the Closing Date, a description of the number of shares of each such class that are issued and outstanding and the number of such shares that are held in Borrower's treasury. All such outstanding shares have been validly issued and, as of the Closing Date, are fully paid, nonassessable shares free of contractual preemptive rights. The issuance and sale of all such shares have been in compliance with all applicable federal and state securities lawsoutstanding. Other than as described on Schedule 5.8, as of the Closing Date5.8(b), there are no subscriptions, options, warrants, or calls relating to any shares of Borrower's capital Stock, including any right of conversion or exchange under any outstanding security or other instrument. Except in connection with dissenter's rights under the Share Exchange, Borrower is not subject to any obligation (contingent or otherwise) to repurchase or otherwise acquire or retire any shares of its capital Stock or any security convertible into or exchangeable for any of its capital Stock. (c) Set forth on Schedule 5.85.8(c), is a complete and accurate list of Borrower's direct and indirect Subsidiaries as of the Closing DateSubsidiaries, showing: : (i) the jurisdiction of their incorporationorganization; (ii) the number of shares of each class of common and preferred Stock or membership interests, as applicable, authorized for each of such Subsidiaries; and (iii) the number and the percentage of the outstanding shares of each such class owned directly or indirectly by Borrower. All of the outstanding capital Stock of each such Subsidiary has been validly issued and is fully paid and non-assessable. The membership interests in Fresh Foods Properties, LLC are uncertificated. (d) Except as set forth on Schedule 5.85.8(c), as of the Closing Datethere are no subscriptions, no capital Stock (or any securities, instrumentsoptions, warrants, optionsor calls relating to any shares of Borrower's Subsidiaries' capital Stock, purchase rights, including any right of conversion or exchange rights, calls, commitments under any outstanding security or claims other instrument. Neither Borrower nor any of its respective Subsidiaries is subject to any character obligation (contingent or otherwise) to repurchase or otherwise acquire or retire any shares of Borrower's Subsidiaries' capital Stock or any security convertible into or exercisable exchangeable for any such capital Stock) of any direct or indirect Subsidiary of Borrower is subject to the issuance of any security, instrument, warrant, option, purchase right, conversion or exchange right, call, commitment or claim of any right, title, or interest therein or thereto.

Due Organization and Qualification; Subsidiaries. (a) Borrower Each Company (other than MSC) is duly organized and existing and in good standing under the laws of the jurisdiction of its incorporation organization and qualified and licensed to do business in, and in good standing in, any state where the failure to be so licensed or qualified reasonably 46 could be expected to have a Material Adverse Change. (b) Set forth on Schedule 5.8SCHEDULE 5.8(b), is a complete and accurate description of the authorized capital Stock of Borrowereach Company, by class, and, as of the Closing Date, a description of the number of shares of each such class that are issued and outstanding and the number of such shares that are held in Borrower's treasury. All such outstanding shares have been validly issued and, as of the Closing Date, are fully paid, nonassessable shares free of contractual preemptive rights. The issuance and sale of all such shares have been in compliance with all applicable federal and state securities lawsoutstanding. Other than as described on Schedule 5.8, as of the Closing DateSCHEDULE 5.8(b), there are no subscriptions, options, warrants, or calls relating to any shares of Borrowereach Company's (other than the Parent) capital Stock, including any right of conversion or exchange under any outstanding security or other instrument. Borrower Except as described on SCHEDULE 5.8(b), no Company is not subject to any obligation (contingent or otherwise) to repurchase or otherwise acquire or retire any shares of its capital Stock or any security convertible into or exchangeable for any of its capital Stock. (c) Set forth on Schedule 5.8SCHEDULE 5.8(c), is a complete and accurate list of Borrowereach Company's direct and indirect Subsidiaries as of the Closing DateSubsidiaries, showing: (i) the jurisdiction of their incorporationorganization; (ii) the number of shares of each class of common and preferred Stock authorized for each of such Subsidiaries; and (iii) the number and the percentage of the outstanding shares of each such class owned directly or indirectly by Borrowerthe applicable Company. All of the outstanding capital Stock of each such Subsidiary has been validly issued and is fully paid and non-assessable. (d) Except as set forth on Schedule 5.8SCHEDULE 5.8(d), as of the Closing Datethere are no subscriptions, no capital Stock (or any securities, instrumentsoptions, warrants, optionsor calls relating to any shares of any Companies' Subsidiaries' capital Stock, purchase rights, including any right of conversion or exchange rights, calls, commitments under any outstanding security or claims other instrument. No Company or any of its respective Subsidiaries is subject to any obligation (contingent or otherwise) to repurchase or otherwise acquire or retire any shares of any character Companies' Subsidiaries' capital Stock or any security convertible into or exercisable exchangeable for any such capital Stock) of any direct or indirect Subsidiary of Borrower is subject to the issuance of any security, instrument, warrant, option, purchase right, conversion or exchange right, call, commitment or claim of any right, title, or interest therein or thereto.

Due Organization and Qualification; Subsidiaries. (a) Borrower is duly organized and existing and in good standing under the laws of the jurisdiction of its incorporation and qualified and licensed to do business in, and in good standing in, any state where the failure to be so licensed or qualified reasonably 46 could be expected to have constitute a Material Adverse Change. Each of Borrower’s Subsidiaries is duly organized and existing and in good standing under the laws of the jurisdiction of its incorporation or organization and qualified and licensed to do business in, and in good standing in, any state where the failure to be so licensed or qualified could be expected to constitute a Material Adverse Change. (b) Set forth on Schedule 5.85.5(b), is a complete and accurate description as of the Closing Date of the authorized capital Stock of Borrower, by class, and, as of the Closing Date, a description of the number of shares of each such class that are issued and outstanding and the number of such shares that are held in Borrower's ’s treasury. All such outstanding shares have been validly issued and, as of the Closing Date, are fully paid, nonassessable shares free of contractual preemptive rights. The issuance and sale of all such shares have been in compliance with all applicable federal and state securities laws. Other than as described on Schedule 5.85.5(b), as of the Closing Date, there are no subscriptions, options, warrants, or calls relating to any shares of Borrower's ’s capital Stock, including any right of conversion or exchange under any outstanding security or other instrument. Except as provided on Schedule 5.5(b), Borrower is not subject to any obligation (contingent or otherwise) to repurchase or otherwise acquire or retire any shares of its capital Stock or any security convertible into or exchangeable for any of its capital Stock. (c) Set forth on Schedule 5.85.5(c), is a complete and accurate list of Borrower's ’s direct and indirect Subsidiaries as of the Closing DateDate and the Xxxxxx 2009 Partnership, showing: (i) the jurisdiction of their incorporationincorporation or organization; (ii) the number of shares of each class of common and preferred Stock authorized for each of such SubsidiariesSubsidiaries and the Xxxxxx 2009 Partnership; and (iii) the number and the percentage of the outstanding shares of each such class owned directly or indirectly by Borrower. All of the outstanding capital Stock of each such Subsidiary and the Xxxxxx 2009 Partnership has been validly issued and is fully paid and non-assessable. (d) . Except as provided on Schedule 5.5(c), as of the Closing Date, Borrower has no direct or indirect equity interest in any Person other than Borrower’s Subsidiaries, the Pellissippi Pointe Entities and the Xxxxxx 2009 Partnership. Except as set forth on Schedule 5.8, as of the Closing Date5.5(c), no capital Stock (or any securities, instruments, warrants, options, purchase rights, conversion or exchange rights, calls, commitments or claims of any character convertible into or exercisable for capital Stock) of any direct or indirect Subsidiary of Borrower or of the Xxxxxx 2009 Partnership is subject to the issuance of any security, instrument, warrant, option, purchase right, conversion or exchange right, call, commitment or claim of any right, title, or interest therein or thereto. None of Borrower, any of its Subsidiaries or the Xxxxxx 2009 Partnership is subject to any obligation (contingent or otherwise) to repurchase or otherwise acquire or retire any shares of capital Stock or any security convertible into or exchangeable for any of capital Stock.

Due Organization and Qualification; Subsidiaries. (a) Borrower Each Obligor is duly organized and existing and in good standing under the laws of the jurisdiction of its incorporation and qualified and licensed to do business in, and in good standing in, any state where the failure to be so licensed or qualified reasonably 46 could be expected to have constitute a Material Adverse Change. (b) Set forth on Schedule 5.8, is a complete and accurate ------------ description of the authorized capital Stock of BorrowerComputervision, by class, and, as of the Closing Date, a description of the number of shares of each such class that are issued and outstanding and the number of such shares that are held in BorrowerComputervision's treasury. All such outstanding shares have been validly issued and, as of the Closing Date, are fully paid, nonassessable shares free of contractual preemptive rights. The issuance and sale of all such shares have been in compliance with all applicable federal and state securities laws. Other than Except as described on disclosed in Schedule 5.8, as of the Closing Date, there are no subscriptions, options, warrants, or ------------ calls relating to any shares of BorrowerComputervision's capital Stock, including any right of conversion or exchange under any outstanding security or other instrument. Borrower Computervision is not subject to any obligation (contingent or otherwise) to repurchase or otherwise acquire or retire any shares of its capital Stock or any security convertible into or exchangeable for any of its capital Stock. (c) Set forth on Schedule 5.8, is a complete and accurate list of Borrower------------ Computervision's direct and indirect Subsidiaries as of the Closing DateSubsidiaries, showing: : (i) the jurisdiction of their incorporation; (ii) the number of shares of each class of common and preferred Stock stock authorized for each of such Subsidiaries; and (iii) the number and the percentage of the outstanding shares of each such class owned directly or indirectly by each Borrower. All of the outstanding capital Stock of each such Subsidiary has been validly issued ; and is fully paid and non-assessable. (d) Except as set forth on Schedule 5.8, as of the Closing Date, no capital Stock (or any securities, instruments, warrants, options, purchase rights, conversion or exchange rights, calls, commitments or claims of any character convertible into or exercisable for Stock) of any direct or indirect Subsidiary of Borrower is subject to the issuance of any security, instrument, warrant, option, purchase right, conversion or exchange right, call, commitment or claim of any right, title, or interest therein or thereto.

Due Organization and Qualification; Subsidiaries. (a) Borrower is duly organized and existing and in good standing under the laws of the jurisdiction of its incorporation and qualified and licensed to do business in, and in good standing in, any state where the failure to be so licensed or qualified reasonably 46 could be expected to have constitute a Material Adverse Change. Each of Borrower's Subsidiaries is duly organized and existing and in good standing under the laws of the jurisdiction of its incorporation or organization and qualified and licensed to do business in, and in good standing in, any state where the failure to be so licensed or qualified could be expected to constitute a Material Adverse Change. (b) Set forth on Schedule 5.85.5(b), is a complete and accurate description as of the Closing Date of the authorized capital Stock of Borrower, by class, and, as of the Closing Date, a description of the number of shares of each such class that are issued and outstanding and the number of such shares that are held in Borrower's treasury. All such outstanding shares have been validly issued and, as of the Closing Date, are fully paid, nonassessable shares free of contractual preemptive rights. The issuance and sale of all such shares have been in compliance with all applicable federal and state securities laws. Other than as described on Schedule 5.85.5(b), as of the Closing Date, there are no subscriptions, options, warrants, or calls relating to any shares of Borrower's capital Stock, including any right of conversion or exchange under any outstanding security or other instrument. Except as provided on Schedule 5.5(b), Borrower is not subject to any obligation (contingent or otherwise) to repurchase or otherwise acquire or retire any shares of its capital Stock or any security convertible into or exchangeable for any of its capital Stock. (c) Set forth on Schedule 5.85.5(c), is a complete and accurate list of Borrower's direct and indirect Subsidiaries as of the Closing DateDate and the Xxxxxx 2009 Partnership, showing: (i) the jurisdiction of their incorporationincorporation or organization; (ii) the number of shares of each class of common and preferred Stock authorized for each of such SubsidiariesSubsidiaries and the Xxxxxx 2009 Partnership; and (iii) the number and the percentage of the outstanding shares of each such class owned directly or indirectly by Borrower. All of the outstanding capital Stock of each such Subsidiary and the Xxxxxx 2009 Partnership has been validly issued and is fully paid and non-assessable. (d) . Except as provided on Schedule 5.5(c), as of the Closing Date, Borrower has no direct or indirect equity interest in any Person other than Borrower's Subsidiaries, the Pellissippi Pointe Entities and the Xxxxxx 2009 Partnership. Except as set forth on Schedule 5.8, as of the Closing Date5.5(c), no capital Stock (or any securities, instruments, warrants, options, purchase rights, conversion or exchange rights, calls, commitments or claims of any character convertible into or exercisable for capital Stock) of any direct or indirect Subsidiary of Borrower or of the Xxxxxx 2009 Partnership is subject to the issuance of any security, instrument, warrant, option, purchase right, conversion or exchange right, call, commitment or claim of any right, title, or interest therein or thereto. None of Borrower, any of its Subsidiaries or the Xxxxxx 2009 Partnership is subject to any obligation (contingent or otherwise) to repurchase or otherwise acquire or retire any shares of capital Stock or any security convertible into or exchangeable for any of capital Stock.

Due Organization and Qualification; Subsidiaries. (a) Borrower and each other Loan Party is duly organized and existing and in good standing under the laws of the jurisdiction of its incorporation and qualified and licensed to do business in, and in good standing in, any state where the failure to be so licensed or qualified reasonably 46 could be expected to have constitute a Material Adverse Change. (b) Set forth on Schedule 5.8, is a complete and accurate ------------ description of the authorized capital Stock of Borrower, by class, and, as of the Closing Date, a description of the number of shares of each such class that are issued and outstanding and the number of such shares that are held in Borrower's treasury. All such outstanding shares have been validly issued and, as of the Closing Date, are fully paid, nonassessable shares free of contractual preemptive rights. The issuance and sale of all such shares have been in compliance with all applicable federal and state securities laws. Other than as described on Schedule 5.8, as of the Closing Date, there are no subscriptions, options, warrants, or ------------ calls relating to any shares of Borrower's or any of its Subsidiaries' capital Stock, including any right of conversion or exchange under any outstanding security or other instrument. Except as set forth on Schedule 5.8, neither ------------ Borrower nor any of its Subsidiaries is not subject to any obligation (contingent or otherwise) to repurchase or otherwise acquire or retire any shares of its capital Stock or any security convertible into or exchangeable for any of its capital Stock. (c) Set forth on Schedule 5.8, is a complete and accurate ------------ list of Borrower's and each other Loan Party's direct and indirect Subsidiaries Subsidiaries, as of the Closing Date, showing: (i) the jurisdiction of their incorporation; (ii) the number of shares of each class of common and preferred Stock authorized for each of such Subsidiaries; and (iii) the number and the percentage of the outstanding shares of each such class owned directly or indirectly by BorrowerBorrower and such Loan Party, as the case may be. All of the outstanding capital Stock of each such Subsidiary has been validly issued and is fully paid and non-non- assessable. (d) Except as set forth on Schedule 5.8, as of the Closing Date, no capital Stock ------------ (or any securities, instruments, warrants, options, purchase rights, conversion or exchange rights, calls, commitments or claims of any character convertible into or exercisable for capital Stock) of any direct or indirect Subsidiary of Borrower or any of its Subsidiaries is subject to the issuance of any security, instrument, warrant, option, purchase right, conversion or exchange right, call, commitment or claim of any right, title, or interest therein or thereto.

Due Organization and Qualification; Subsidiaries. (a) Each Borrower is duly organized and existing and in good standing under the laws of the jurisdiction of its incorporation and qualified and licensed to do business in, and in good standing in, any state where the failure to be so licensed or qualified reasonably 46 could be expected to have a Material Adverse Change. (b) Set forth on Schedule 5.8, is a complete and accurate description of the authorized capital Stock of BorrowerBorrowers, by class, and, as of the Closing Date, a description of the number of shares of each such class that are issued and outstanding and the number of such shares that are held in each Borrower's treasury. All such outstanding shares have been validly issued and, as of the Closing Date, are fully paid, nonassessable shares free of contractual preemptive rights. The issuance and sale of all such shares have been in compliance with all applicable federal and state securities laws. Other than as described on Schedule 5.8, as of the Closing Date, there are no subscriptions, options, warrants, or calls relating to any shares of Borrower's any Borrowers' capital Stock, including any right of conversion or exchange under any outstanding security or other instrument. Borrower is Borrowers are not subject to any obligation (contingent or otherwise) to repurchase or otherwise acquire or retire any shares of its capital Stock or any security convertible into or exchangeable for any of its capital Stock. (c) Set forth on Schedule 5.8, is a complete and accurate list of Borrower's Borrowers' direct and indirect Subsidiaries as of the Closing DateSubsidiaries, showing: (i) the jurisdiction of their incorporation; (ii) the number of shares of each class of common and preferred Stock authorized for each of such Subsidiaries; and (iii) the number and the percentage of the outstanding shares of each such class owned directly or indirectly by BorrowerBorrowers. All of the outstanding capital Stock of each such Subsidiary has been validly issued and is fully paid and non-non- assessable. (d) Except as set forth on Schedule 5.8, as of the Closing Date, no capital Stock (or any securities, instruments, warrants, options, purchase rights, conversion or exchange rights, calls, commitments or claims of any character convertible into or exercisable for capital Stock) of any direct or indirect Subsidiary of Borrower is Borrowers are subject to the issuance of any security, instrument, warrant, option, purchase right, conversion or exchange right, call, commitment or claim of any right, title, or interest therein or thereto.