Common use of Opinion of Company's Counsel Clause in Contracts

Opinion of Company's Counsel. The Company shall have delivered to the Purchaser an opinion of Xxxxxx and Xxxxxx, P.A., counsel for the Company, dated as of the Closing Date, to the effect that: (a) The Company is a duly and validly organized and existing corporation in good standing under the laws of the State of Minnesota; has the corporate power and authority to enter into this Agreement and the Warrants, to issue and sell the Preferred Shares and the Warrants as contemplated by this Agreement, and to carry out the provisions of this Agreement; and has the corporate power and authority to own and hold its properties owned and leased and to carry on the business in which it is engaged. (b) This Agreement and the Warrants have been duly authorized, executed and delivered by the Company. This Agreement and the Warrants are legal, valid and binding agreements of the Company enforceable in accordance with their respective terms, except as the enforceability thereof may be limited by bankruptcy, insolvency, moratorium, reorganization or similar laws affecting the enforcement of creditors' rights generally, and except for judicial limitations on the enforcement of the remedy of specific performance and other equitable remedies; provided, however, that the issuance of the Warrant Stock is subject to the approval of the Company's Amended Articles as set forth in Section 8.8 hereof and the filing thereof with the Minnesota Secretary of State in the manner prescribed by law. (c) The Certificate of Designation, substantially in the form set forth as Exhibit 1 hereto, has been duly adopted by all necessary corporate action, and has been duly filed with the Secretary of State of the State of Minnesota (no other or additional filing or recording being necessary in order to perfect the rights and privileges of the holders of the Preferred Shares). (d) The Preferred Shares are entitled to the rights, preferences and provisions of the Certificate of Designation, subject to any limitations contained therein. (e) The Preferred Shares have been duly authorized, validly issued and delivered by the Company and are fully paid and nonassessable. The Conversion Stock issuable upon conversion of the Preferred Shares has been reserved for issuance, and when issued upon conversion will be fully paid and nonassessable. (f) All corporate proceedings required by law or by the provisions of this Agreement to be taken by the Board of Directors and the stockholders of the Company on or prior to the Closing Date in connection with the execution and delivery of this Agreement and the Warrants have been duly and validly taken.

Opinion of Company's Counsel. The Company shall have delivered to the each Purchaser an opinion of Xxxxxx and Xxxxxx, P.A., counsel for the Company, dated as of the Closing Date, to the effect that: (a) The Company is a duly and validly organized and existing corporation in good standing under the laws of the State of Minnesota; has the corporate power and authority to enter into this Agreement, the Escrow Agreement, the Proceeds Agreement and the Warrants, to issue and sell the Preferred Shares Shares, the Warrants, the Conversion Stock and the Warrants Warrant Stock as contemplated by this Agreement, and to carry out the provisions of this Agreement, the Escrow Agreement and the Proceeds Agreement; and has the corporate power and authority to own and hold its properties owned and leased and to carry on the business in which it is engaged. (b) Neither the execution nor delivery of, nor the performance of or compliance with, the Agreement, the Escrow Agreement or the Proceeds Agreement nor the consummation of the transactions contemplated therein will violate the Articles of Incorporation or Bylaws of the Company. (c) To our knowledge, there are no legal actions, suits, arbitration or other legal, administrative or governmental proceedings or investigations pending or threatened against the Company, except for the pending NASDAQ inquiry into the continued listing of the Company's Common Stock on the NASDAQ SmallCap Market. (d) This Agreement, the Warrants, the Escrow Agreement and the Warrants Proceeds Agreement have been duly authorized, executed and delivered by the Company. This Agreement , and the Warrants are legal, valid and binding agreements of the Company enforceable in accordance with their respective terms, except as the enforceability thereof may be limited by bankruptcy, insolvency, moratorium, reorganization or similar laws affecting the enforcement of creditors' rights generally, and except for judicial limitations on the enforcement of the remedy of specific performance and other equitable remedies; provided, however, that the issuance of the Warrant Stock is subject to the approval of the Company's Amended Articles as set forth in Section 8.8 hereof and the filing thereof with the Minnesota Secretary of State in the manner prescribed by law. (ce) The Certificate of Designation, substantially in the form set forth as Exhibit 1 hereto, has been duly adopted by all necessary corporate action, and has been duly filed with the Secretary of State of the State of Minnesota (no other or additional filing or recording being necessary in order to perfect the rights and privileges of the holders of the Preferred Shares). (df) The Preferred Shares are entitled to the rights, preferences and provisions of the Certificate of Designation, subject to any limitations contained therein. (eg) The Preferred Shares have been duly authorized, validly issued and delivered by the Company and are fully paid and nonassessable. The Conversion Stock issuable upon conversion of the Preferred Shares has been reserved for issuance, and when issued upon conversion will be duly authorized, validly issued, fully paid and nonassessable. The Warrant Stock issuable upon exercise of the Warrants has been reserved for issuance, and when issued upon exercise will be duly authorized, validly issued, fully paid and nonassessable. (fh) All corporate proceedings required by law or by the provisions of this Agreement, the Escrow Agreement and the Proceeds Agreement to be taken by the Board of Directors and the stockholders of the Company on or prior to the Closing Date in connection with the execution and delivery of this Agreement, the Escrow Agreement, the Proceeds Agreement and the Warrants have been duly and validly taken. (i) Assuming the accuracy of the representations of the Purchasers set forth in Section 6 hereof, the execution and delivery of the Warrants, the offer, sale, issuance and delivery of the Preferred Shares and the Warrants and the offer of the Conversion Stock and the Warrant Stock to the Purchasers through conversion or exercise by them of the Preferred Shares or the Warrants under the circumstances contemplated by the Certificate of Designation, the Warrants and this Agreement are exempt from the registration and prospectus delivery requirements of the Securities Act, and all registrations, qualifications, permits and approvals, if any, required under applicable state securities laws for the lawful execution and delivery of the Warrants and offer, sale, issuance and delivery of the Preferred Shares, the Warrants, the Conversion Stock and the Warrant Stock, have been obtained.

Opinion of Company's Counsel. The Company shall have delivered to each of the Purchaser Purchasers an opinion or opinions of Xxxxxx and Xxxxxx& Xxxxxxx LLP, P.A., special counsel for the Company, dated as of the Closing Date, to the effect that: (a) The Company is a duly incorporated, validly existing and validly organized and existing corporation in good standing under the laws of the State of Minnesota; has Minnesota with the corporate power and authority to enter into this Agreement, the Warrants and the First Amendment to 1996 Agreement and the WarrantsWaiver, to issue and sell the Preferred Shares Shares, the Conversion Stock, the Warrants and the Warrants Warrant Stock as contemplated by this Agreement, and to carry out the provisions of this Agreement, the Warrants and the First Amendment to 1996 Agreement and Waiver and to conduct any lawful business activity; and has qualified to do business as a foreign corporation in good standing in any state or jurisdiction wherein the corporate power and authority to own and hold nature of its activities or of its properties owned or leased makes such qualification necessary and leased and failure to carry on be so qualified would have a material adverse effect upon the business in which it is engagedCompany. (b) This Agreement, the First Amendment to 1996 Agreement and Waiver, and the Warrants have been duly authorizedauthorized by all requisite corporate action, executed and delivered by the Company. This Agreement , and the Warrants are legal, valid and binding agreements of the Company enforceable in accordance with their respective terms, except as the enforceability thereof may be limited by bankruptcy, insolvency, moratorium, reorganization or similar laws affecting the enforcement of creditors' rights generally, and except for judicial limitations on the enforcement of the remedy of specific performance and other equitable remedies; provided, however, that the issuance of the Warrant Stock is subject to the approval of the Company's Amended Articles as set forth in Section 8.8 hereof and the filing thereof with the Minnesota Secretary of State in the manner prescribed by law. (c) The Certificate of Designation, substantially in and the form set forth Amended and Restated Series A Certificate (as Exhibit 1 hereto, has hereinafter defined) have been duly adopted by all necessary corporate action, action and has have been duly filed with the Secretary of State of the State of Minnesota (no other or additional filing or recording being necessary in order to perfect create the Series B Preferred Stock or to amend the terms of the Series A Preferred Stock). No holder of capital stock of the Company has dissenters' rights under Chapter 302A of the Minnesota Statutes in connection with the adoption and privileges filing of the Certificate or the Amended and Restated Series A Certificate, except for the holders of the Series A Preferred Shares)Stock. (d) The Preferred Shares are entitled to the rights, preferences and provisions of the Certificate Certificate. The Series A Preferred Stock is entitled to the rights, preferences and provisions of Designation, subject the Amended and Restated Series A Certificate. The Preferred Shares and the Warrants are entitled to any limitations contained thereinthe benefits of this Agreement applicable thereto. (e) The Preferred Shares are duly authorized and validly issued, fully paid and nonassessable. The Warrants are duly authorized and issued in accordance with the Minnesota Business Corporation Act, and no additional corporate action is required for their issuance. The certificates for the Preferred Shares are in valid and sufficient form. (f) The shares initially issuable upon conversion of the Preferred Shares and the exercise of the Warrants have been duly authorized and reserved for issuance and when issued upon such conversion or exercise in accordance with the terms and conditions of the Preferred Shares or the Warrants will be duly authorized, validly issued issued, fully paid and delivered nonassessable. (g) The Company is authorized by its Articles of Incorporation to issue 60,000,000 shares of capital stock, of which 50,000,000 shares have been designated Common Stock, 958,487 shares have been designated Series A Preferred Stock, 1,000,000 shares are designated Series B Preferred Stock, and 8,041,513 shares are undesignated as to rights and preferences. The outstanding shares of capital stock of the Company have been duly authorized and validly issued and are fully paid and nonassessable. The Based solely upon a review of the minute books of the Company and the contracts, agreements, leases, documents, commitments and arrangements disclosed in Exhibit 5 to this Agreement, there are no outstanding securities convertible into common shares of the Company or outstanding options, warrants or other rights to acquire securities of the Company, other than (i) the Preferred Shares and the Warrants, (ii) options and warrants disclosed in Exhibit 3 to this Agreement, and (iii) the outstanding shares of Series A Preferred Stock. None of the contracts, agreements, leases, documents, commitments or arrangements disclosed in Exhibit 5 to this Agreement (except the 1996 Agreement) grants or creates any right with respect to the registration of any securities of the Company under the Securities Act or creates any obligation on the part of the Company to purchase or redeem any outstanding shares of capital stock of the Company. (h) Based solely upon a review of the minute books of the Company and the contracts, agreements, leases, documents, commitments and arrangements disclosed in Exhibit 5 to this Agreement, no security holder of the Company is entitled to preemptive or similar rights to subscribe for or to purchase any shares of capital stock of the Company except as otherwise contemplated by this Agreement and the 1996 Agreement, nor will any security holder of the Company be entitled to any such rights as a result of the execution or delivery of this Agreement or the issuance of the Preferred Shares, the Conversion Stock, the Warrants, or the Warrant Stock issuable upon conversion other than as contemplated by this Agreement and the 1996 Agreement. (i) Assuming the accuracy of the representations of the Purchasers set forth in Section 6 hereof, the Company has obtained the approval or consent of all governmental agencies or bodies required to be obtained by it for the valid offer, issuance and sale of the Preferred Shares has been reserved for issuance, and when issued upon conversion will be fully paid and nonassessable. (f) All corporate proceedings required by law or by the provisions of this Agreement to be taken by the Board of Directors and the stockholders Warrants and the offer of the Company on or prior Conversion Stock and the Warrant Stock to the Closing Date in connection with Purchasers through conversion by them of the execution Preferred Shares or exercise of the Warrants. The execution, delivery and delivery performance of this Agreement and the First Amendment to the 1996 Agreement and Waiver, the offer, issuance and sale of the Preferred Shares, the Conversion Stock, the Warrants and the Warrant Stock, and the consummation of the transactions contemplated by this Agreement will not result in any breach or violation of the terms or provisions of, or constitute a default under, the Articles of Incorporation or the Bylaws or a violation of any contract, agreement, lease, document, commitment or arrangement listed in Exhibit 5 to this Agreement or any judgment, decree or order known to such counsel and applicable to the Company or to such counsel's knowledge any statute, rule or regulation of the United States or the State of Minnesota or any governmental authority or regulatory body thereof. (j) Assuming the accuracy of the representations of the Purchasers set forth in Section 6 hereof, the offer, sale, issuance and delivery of the Preferred Shares and the Warrants, and the offer of the Conversion Stock and the Warrant Stock to the Purchasers through conversion or exercise by them of the Preferred Shares or the Warrants under the circumstances contemplated by the Certificate, the Warrants and this Agreement, are exempt from the registration and prospectus delivery requirements of the Securities Act, and all registrations, qualifications, permits and approvals required under applicable state securities laws for the lawful offer, sale, issuance and delivery of the Preferred Shares, the Conversion Stock, the Warrants and the Warrant Stock have been duly obtained, other than the filing of a notice on Form D by the Company with the Commission which may be made subsequent to such offer, sale, issuance and validly takendelivery and any filings that may be required to be made subsequent to the Closing under any applicable state securities laws. (k) Other than as disclosed on Exhibit 3 to this Agreement, such counsel have no knowledge of any litigation, proceeding or governmental investigation pending or threatened against the Company, its key management employees in their capacity as employees, properties or business.

Opinion of Company's Counsel. The Company Purchasers shall have delivered to the Purchaser received an opinion dated the Closing Date of Xxxxxx and XxxxxxMessrs. Jonex, P.A.Xxey & Bayley, counsel for the Company, dated as of satisfactory to the Closing DatePurchasers and their special counsel, to Reavxx & XcGrxxx, xx the effect that: (a) The the Company is a corporation duly organized, validly existing and validly organized and existing corporation in good standing under the laws of the State of Minnesota; has the Delaware with full corporate power and authority to enter into this Agreement conduct its business as now being conducted and presently proposed to be conducted; and the Warrants, Company is duly qualified as a foreign corporation to issue and sell do business in each jurisdiction in which the Preferred Shares and character of the Warrants as contemplated by this Agreement, and to carry out the provisions of this Agreement; and has the corporate power and authority to own and hold its properties owned and leased and to carry on the business by it therein or in which it is engaged.the transaction of its business makes such qualification necessary; (b) This this Agreement and the Warrants have has been authorized by all necessary corporate action, has been duly authorized, executed and delivered by the Company. This Agreement Company and the Warrants are is a legal, valid and binding agreements obligation of the Company in accordance with its terms; (c) the Company has duly authorized the issuance and sale of the Notes, Sale Stock and Warrants, and the Notes, Sale Stock and Warrants, when issued in accordance with the terms hereof, will be duly and validly issued and in the case of the Sale Stock will be fully paid and non-assessable; the Notes when issued will constitute the legal, valid obligations of the Company enforceable in accordance with their respective terms, except subject, as the enforceability thereof may be limited by to enforcement of remedies, to applicable bankruptcy, insolvencyreorganization, moratorium, reorganization or insolvency and similar laws affecting the enforcement rights of creditors' rights generally, creditors generally and except for judicial limitations on the enforcement of the remedy of specific performance and other equitable remedies; provided, however, that the issuance of the Warrant Stock is subject to the approval of the Company's Amended Articles as set forth moratorium laws from time to time in Section 8.8 hereof and the filing thereof with the Minnesota Secretary of State in the manner prescribed by law. (c) The Certificate of Designation, substantially in the form set forth as Exhibit 1 hereto, has been duly adopted by all necessary corporate action, and has been duly filed with the Secretary of State of the State of Minnesota (no other or additional filing or recording being necessary in order to perfect the rights and privileges of the holders of the Preferred Shares)effect. (d) The Preferred Shares are entitled to the rights, preferences and provisions Company has duly authorized the issuance of the Certificate Underlying Shares and has duly reserved for such purpose the full number of Designationshares of Common Stock initially issuable upon the exercise thereof, subject to any limitations contained therein.and, when issued and paid for in accordance with the terms of the Warrants, the Underlying Shares will be duly and validly issued, fully paid and non-assessable; (e) The Preferred Shares have been duly authorized, validly issued and delivered by the Company and are fully paid and nonassessable. The Conversion Stock issuable upon conversion of the Preferred Shares has been reserved for issuance, and when issued upon conversion will be fully paid and nonassessable. (f) All corporate proceedings required by law or by the provisions of this Agreement to be taken by the Board of Directors and the stockholders of the Company on or prior to the Closing Date in connection with the execution and delivery of this Agreement did not, and the consummation of the transactions contemplated herein and compliance with the terms and provisions hereof and of the Notes, Sale Stock and Warrants will not, violate any provisions of law, any order of any Court or other agency of government or of the Certificate of Incorporation or by-laws of the Company, and will not conflict with or result in any breach of any condition or provision of, or constitute a default under, any agreement or instrument which is binding upon the Company and all necessary consents under any such agreements or instruments in this connection have been duly obtained, and validly takenwill not result in the creation or imposition of any lien, charge or encumbrance of any nature whatsoever upon any of the properties or assets of the Company; (f) no consent, approval or other order of any governmental or administrative board or body is required for the execution and delivery by the Company of this Agreement or the Notes, Sale Stock, Warrants or Underlying Shares; (g) there are no actions, suits, proceedings, investigations or claims pending or, to the knowledge of such counsel, threatened against or affecting the Company or its subsidiary, which in the opinion of such counsel might result in any material adverse change in the business, properties or condition, financial or otherwise, of the Company or its subsidiary; (h) the statement of the capitalization of the Company set forth in Section 4.3 hereof and the information set forth therein as to numbers of shares of Common Stock reserved for issuance, is complete and correct; (i) to the knowledge of such counsel, there is no material contract, to which the Company or its subsidiary is a party or by which it may be bound, except as listed in Schedule 4 hereto; (j) to the knowledge of such counsel, the Company is not in default under any provision of its Certificate of Incorporation or by-laws or any agreement or instrument to which it is a party or by which it may be bound; (k) to the best of such counsel's knowledge, the matters specified in Sections 4.15, 4.16, 4.17 (second sentence only) and 4.18 are true and correct; (1) based on the facts and circumstances contemplated by this Agreement, and in reliance on the accuracy of the representations of each Purchaser under Section 5 hereof, it is not necessary, in connection with the offer, issuance, sale and delivery of the Notes, Sale Stock and Warrants to you and the other Purchasers, to register the Notes, Sale Stock, Warrants or Underlying Shares under the Act or any applicable Blue Sky laws; (m) the Company qualifies as a "small business concern" within the meaning of the Small Business Investment Act of 1958; (n) Upon the filing of the amendment to the Company's Certificate of Incorporation provided for in Section 6.4 hereof, the holders of Common Stock will be entitled to and will have the full benefit of the cumulative voting and preemptive rights contained in the amended Certificate of Incorporation. (o) Upon the due execution and delivery of the Shareholders' Agreement provided for in Section 6.5, that agreement will constitute a legal, valid obligation of the parties thereto, enforceable in accordance with its terms.

Opinion of Company's Counsel. The On the Closing Date coincident with the date of this Agreement only, the Company shall have delivered to the Purchaser Investors an opinion of Xxxxxx and Xxxxxx, P.A.Xxxx & Xxxxxxx, counsel for the Company, dated as of the Closing Date, to the effect that: (a) The Company has been duly incorporated and is validly existing as a duly and validly organized and existing corporation in good standing under the laws of the State of Minnesota; has the corporate power and authority to enter into this Agreement and the WarrantsTransaction Agreements, to issue and sell the Preferred Shares and the Warrants Securities as contemplated by this Agreementthe Transaction Agreements, and to carry out the provisions of this Agreementthe Transaction Agreements; and has the corporate power and authority to own and hold its properties owned and leased and to carry on the business in which it is engaged; and has not failed to qualify to do business as a foreign corporation in good standing in any state or jurisdiction wherein the nature of its activities or of its properties owned or leased makes such qualification necessary and failure to be so qualified would have a material adverse effect upon the Company. (b) This Agreement and the Warrants The Transaction Agreements have been duly authorized, executed and delivered by the Company. This Agreement , and the Warrants are constitute legal, valid and binding agreements of the Company enforceable in accordance with their respective terms, except as the enforceability thereof may be limited by bankruptcy, insolvency, moratorium, reorganization or similar laws affecting the enforcement of creditors' rights generally, and except for judicial limitations on the enforcement of the remedy of specific performance and other equitable remedies; provided, however, that the issuance of the Warrant Stock is subject to the approval of the Company's Amended Articles as set forth in Section 8.8 hereof and the filing thereof with the Minnesota Secretary of State in the manner prescribed by law. (c) The Certificate Statement of Designation, substantially in the form set forth as in Exhibit 1 1C hereto, has have been duly adopted by all necessary corporate action, and has have been duly filed with the Secretary of State of the State of Minnesota (no other or additional filing or recording being necessary in order for the holders of the Preferred Shares to perfect obtain the rights and privileges of the holders Preferred Shares provided in the Articles of the Preferred SharesIncorporation). (d) The Company is authorized by its Articles of Incorporation to issue 75,000,000 shares of Common Stock, 3,200,000 shares of Series A Preferred Stock and 21,800,000 undesignated shares. Other than the Series A Preferred Stock to be issued pursuant to this Agreement, there are no shares of Series A Preferred Stock issued and outstanding. There are 2,293,300 shares of Common Stock duly issued and outstanding, all of which are, to our knowledge, fully paid and nonassessable. The issuance and sale of such outstanding shares of Common Stock were exempt from registration under the Securities Act and such shares were issued in conformity with the permit or qualification requirements of all applicable state securities laws. Except for such preferred shares and such common shares, the Company has no other authorized or outstanding series or class of capital stock. Except for (i) the conversion privileges of the Series A Preferred Stock, (ii) the Warrants and the 1,600,000 shares of Series A Preferred Stock reserved for issuance pursuant to the exercise of the Warrants to be issued pursuant to this Agreement and (iii) 600,000 shares of Common Stock reserved for issuance pursuant to the Company's 2001 Equity Incentive Plan there are no preemptive rights or, to our knowledge, options, warrants, conversion privileges or other rights (or agreements for any such rights) outstanding to purchase or otherwise obtain from the Company any of the Company's equity securities. To the knowledge of such counsel, except as set forth on Exhibit 3 hereto, there are no agreements or understandings on the part of the Company with respect to the registration of any securities of the Company under the Securities Act, other than those granted under this Agreement, and there are no obligations on the part of the Company to purchase or redeem any outstanding shares of capital stock of the Company. (e) The respective rights, privileges, restrictions and preferences of the Series A Preferred Stock are as stated in the Statement of Designation. (f) The Preferred Shares to be purchased at the Closing have been duly authorized and, upon payment for and delivery of such securities in accordance with the terms of this Agreement, will be validly issued, fully paid and nonassessable. The certificates for the Preferred Shares when issued, will be in valid and sufficient form, and the Preferred Shares are entitled to the rights, preferences and provisions benefits of the Certificate of Designation, subject to any limitations contained therein. (e) The Preferred Shares have been duly authorized, validly issued and delivered by the Company and are fully paid and nonassessablethis Agreement applicable thereto. The Conversion Stock issuable has been duly authorized and reserved for issuance upon conversion of the Series A Preferred Shares has been reserved for issuance, Stock and when issued upon such conversion in accordance with the terms and conditions of the Statement of Designation, the Conversion Stock will be duly authorized and issued and will be fully paid and nonassessable. (fg) The Warrants have been duly authorized and, when issued in accordance with the terms and conditions of this Agreement, will be duly authorized and issued. The Warrant Stock has been duly authorized and reserved for issuance upon exercise of the Warrants and when issued upon such exercise in accordance with the terms and conditions of the Warrants and those of this Agreement, the Warrant Stock will be duly authorized and issued and will be fully paid and nonassessable. (h) All corporate proceedings required by law or by the provisions of this Agreement the Transaction Agreements to be taken by the Board of Directors and the stockholders of the Company on or prior to the Closing Date in connection with the execution and delivery of this Agreement the Transaction Agreement, the offer, issuance and sale of the Warrants Securities, and in connection with the consummation of the transactions contemplated by the Transaction Agreements, have been duly and validly taken. (i) All consents, approvals, permits, orders or authorizations of, and all qualifications, registrations, designations or declarations with, any federal or Minnesota corporate authority on the part of the Company required in connection with the execution and delivery of the Transaction Agreements and consummation of the transactions contemplated thereby have been obtained, and are effective, and we are not aware of any proceedings, or written threat of any proceedings, that question the validity thereof. (j) The Company's execution and delivery of, and its performance and compliance as of the date hereof with the terms of, the Transaction Agreements do not violate any provision of any federal, or Minnesota corporate law, rule or regulation applicable to the Company or any provision of the Company's Articles of Incorporation or Bylaws and do not conflict with or constitute a default under the provisions of any judgment, writ, decree or order to which the Company is bound or any material agreement to which the Company is a party. (k) Assuming the accuracy of the representations of the Investors set forth in Section 4 hereof, the offer, sale, issuance and delivery of the Preferred Shares, the grant and issuance of the Warrants and the offer of the Conversion Stock and Warrant Stock to the Investors through conversion by it of the Preferred Shares or Warrant Stock or exercise by it of the Warrants under the circumstances contemplated by the Articles of Incorporation, the Warrants and this Agreement are exempt from the registration and prospectus delivery requirements of the Securities Act, and all registrations, qualifications, permits and approvals required under applicable state securities laws for the lawful offer, sale, issuance and delivery of the Preferred Shares, the grant and issuance of the Warrants and the offer of the Conversion Stock and Warrant Stock shall have been obtained. (m) Such counsel has no knowledge of any litigation, proceeding or governmental investigation pending or threatened against the Company, its key management employees, properties or business which, if determined adversely to the Company, would have a material adverse effect upon the financial condition, operations, results of operations or business of the Company.

Opinion of Company's Counsel. The Company shall have delivered to the Purchaser an opinion or opinions of Xxxxxx and Xxxxxx, P.A., counsel for the Company, dated as of the Closing Date, to the effect that: (a) The Company is a duly and validly organized and existing corporation in good standing under the laws of the State of Minnesota; has the corporate power and authority to enter into this Agreement and the WarrantsAgreement, to issue and sell the Preferred Class B Shares and the Warrants Conversion Stock as contemplated by this Agreement, and to carry out the provisions of this Agreement; and has the corporate power and authority to own and hold its properties owned and leased and to carry on the business in which it is engaged; and has not failed to qualify to do business as a foreign corporation in good standing in any state or jurisdiction wherein the nature of its activities or of its properties owned or leased makes such qualification necessary and failure to be so qualified would have a material adverse effect upon the Company. (b) This Agreement and the Warrants have has been duly authorized, executed and delivered by the Company. This Agreement , and the Warrants are is a legal, valid and binding agreements agreement of the Company enforceable in accordance with their respective its terms, except as the enforceability thereof may be limited by bankruptcy, insolvency, moratorium, reorganization or similar laws affecting the enforcement of creditors' rights generally, and except for judicial limitations on the enforcement of the remedy of specific performance and other equitable remedies; provided, however, that the issuance of the Warrant Stock is subject to the approval of the Company's Amended Articles as set forth in Section 8.8 hereof and the filing thereof with the Minnesota Secretary of State in the manner prescribed by law. (c) The A Certificate of Designation, substantially in Designation containing the form set forth as Exhibit 1 hereto, Class B Stock Provisions has been duly adopted by all necessary corporate action, and has been duly filed with the Secretary of State of the State of Minnesota (no other or additional filing or recording being is necessary in order to perfect the rights and privileges of the holders of the Preferred Class B Shares). (d) The Preferred Class B Shares are entitled to the rights, preferences and provisions of the Certificate Class B Stock Provisions subject, however, to bankruptcy, insolvency, moratorium or reorganization laws and judicial limitations on the enforcement of Designation, subject to any limitations contained thereinthe remedy of specific performance and other equitable remedies. (e) The Preferred Class B Shares have been duly authorized, validly issued and delivered by the Company and are fully paid and nonassessable. , and the certificates for the Class B Shares are in valid and sufficient form. (f) The Conversion Stock issuable has been duly authorized and reserved for issuance upon conversion of the Preferred Class B Shares has been reserved for issuancebased upon the initial Conversion Price, and when issued upon such conversion in accordance with the terms and conditions of the Class B Shares and those of this Agreement the Conversion Stock will be duly authorized and issued and will be fully paid and nonassessable. (fg) All corporate proceedings required by law or by the provisions of this Agreement to be taken by the Board of Directors and the stockholders of the Company on or prior to the Closing Date in connection with the execution and delivery of this Agreement Agreement, the offer, issuance and sale of the Class B Shares and the Warrants Conversion Stock, and in connection with the consummation of the transactions contemplated by this Agreement, have been duly and validly taken. (h) The Company is authorized by its Articles of Incorporation to issue 10,000,000 shares, of which 1,227,273 shares have been designated class B common shares. The Class B Shares are the only class B common shares that are issued and outstanding. There are 4,971,174 common shares duly issued and outstanding, all of which are fully paid and nonassessable. The issuance and sale of such outstanding common shares were registered under, or exempt from registration under, the Securities Act and such shares were issued in conformity with the permit or qualification requirements of all applicable state securities laws. Except for such class B common shares and such common shares, the Company has no other authorized or outstanding series or class of capital stock, and, to the knowledge of such counsel, there are no outstanding securities convertible into common shares of the Company or outstanding options, warrants or other rights to acquire securities of the Company, other than (a) the Class B Shares, and (b) options and warrants granted under this Agreement or disclosed in Section 5.11 above and Exhibit 2 to this Agreement. To the knowledge of such counsel, there are no agreements or understandings on the part of the Company with respect to the registration of any securities of the Company under the Securities Act, other than those granted under this Agreement, and there are no obligations on the part of the Company to purchase or redeem any outstanding shares of capital stock of the Company. (i) The Articles of Incorporation of the Company do not provide for any security holder preemptive or similar rights to subscribe for or purchase any shares of capital stock of the Company, and, no security holder of the Company has been granted preemptive or similar rights to subscribe for or to purchase any shares of capital stock of the Company pursuant to any agreement of which such counsel has knowledge, nor will any security holder of the Company be entitled to any such rights as a result of the execution or delivery of this Agreement or the issuance of the Class B Shares or the Conversion Stock. (j) Assuming the accuracy of the representations of the Purchaser set forth in Section 6 hereof, the Company has obtained the approval or consent of all governmental agencies or bodies required to be obtained by it for the legal and valid execution and delivery of this Agreement and the legal and valid offer, issuance and sale of the Class B Shares and the offer of the Conversion Stock to the Purchaser through conversion by it of the Class B Shares and for the performance of the obligations of the Company under any provisions of this Agreement. The Company is not in violation of any term, provision or condition of its Articles of Incorporation or Bylaws, or, to the best of such counsel's actual knowledge, in violation of any material term, provision or condition of any agreement or other instrument to which the Company is a party or by which it is bound or to which any of its properties, assets or business is subject or any judgment, decree or order known to such counsel or to the best of such counsel's actual knowledge any statute, rule or regulation; and the execution, delivery and performance of this Agreement, the offer, issuance and sale of the Class B Shares and the Conversion Stock and the consummation of the transactions contemplated by this Agreement will not result in any breach or violation of the terms or provisions of, or constitute a default under, the Articles of Incorporation or the Bylaws of the Company or, to the best of such counsel's actual knowledge, in violation of any material term, provision or condition of any agreement or other instrument to which the Company is a party or by which it is bound or to which any of its properties, assets or business is subject or any judgment, decree or order known to such counsel or to the best of such counsel's actual knowledge any statute, rule or regulation. (k) Assuming the accuracy of the representations of the Purchaser set forth in Section 6 hereof, the offer, sale, issuance and delivery of the Class B Shares and the offer of the Conversion Stock to the Purchaser through conversion by it of the Class B Shares under the circumstances contemplated by the Amendment and this Agreement are exempt from the registration and prospectus delivery requirements of the Securities Act, and all registrations, qualifications, permits and approvals required under applicable state securities laws for the lawful offer, sale, issuance and delivery of the Class B Shares and the Conversion Stock have been obtained. (l) Such counsel have no knowledge of any litigation, proceeding or governmental investigation pending or threatened against the Company, its key management employees, properties or business which, if determined adversely to the Company, would have a material adverse effect upon the financial condition, operations, results of operations or business of the Company.

Opinion of Company's Counsel. (a) The Company shall have delivered to the Purchaser an opinion or opinions of Xxxxxx and Xxxxxx, P.A.Faegre & Bxxxxx, counsel for the Company, dated as of the Closing Date, to the effect that: (ai) The Company is a duly and validly organized and existing corporation in good standing under the laws of the State of Minnesota; has the corporate power and authority to enter into this Agreement and the WarrantsDebenture, to issue and sell the Preferred Shares Debenture and the Warrants Conversion Stock as contemplated by this Agreement, and to carry out the provisions of this Agreement; Agreement and the Debenture, has the corporate power and authority to own and hold its properties owned and leased and to carry on the business in which it is engaged. (bii) This Agreement and the Warrants Debenture have been duly authorized, executed and delivered by the Company. This Agreement , and the Warrants are legal, valid and binding agreements of the Company enforceable in accordance with their respective terms, except as the enforceability thereof may be limited by bankruptcy, insolvency, moratorium, reorganization or similar laws affecting the enforcement of creditors' ’ rights generally, and except for judicial limitations on the enforcement of the remedy of specific performance and other equitable remedies; provided, however, that the issuance of the Warrant Stock is subject to the approval of the Company's Amended Articles as set forth in Section 8.8 hereof and the filing thereof with the Minnesota Secretary of State in the manner prescribed by law. (ciii) The Certificate of Designation, substantially in the form set forth as Exhibit 1 hereto, Conversion Stock has been duly adopted by all necessary corporate action, authorized and has been duly filed with the Secretary of State of the State of Minnesota (no other or additional filing or recording being necessary in order to perfect the rights and privileges of the holders of the Preferred Shares). (d) The Preferred Shares are entitled to the rights, preferences and provisions of the Certificate of Designation, subject to any limitations contained therein. (e) The Preferred Shares have been duly authorized, validly issued and delivered by the Company and are fully paid and nonassessable. The Conversion Stock issuable reserved for issuance upon conversion of the Preferred Shares has been reserved for issuance, Debenture based upon the initial Conversion calculations and when issued upon such conversion in accordance with the terms and conditions of the Debenture, the Conversion Stock will be duly authorized and issued and will be fully paid and nonassessable. (fiv) All corporate proceedings required by law or by the provisions of this Agreement to be taken by the Board of Directors and the stockholders of the Company on or prior to the Closing Date in connection with the execution and delivery of this Agreement and the Warrants Debenture, the offer, issuance and sale of the Debenture and in connection with the consummation of the transactions contemplated by this Agreement, have been duly and validly taken. (v) The Company is authorized by its Articles of Incorporation to issue 75,000,000 common shares and 25,000,000 preferred shares. (vi) No security holder of the Company is entitled to preemptive or similar rights to subscribe for or to purchase any shares of capital stock of the Company pursuant to the Company’s Articles of Incorporation, nor will any security holder of the Company be entitled to any such rights pursuant to the Company’s Articles of Incorporation as a result of the execution or delivery of this Agreement or the issuance of the Debenture or the Conversion Stock. (vii) Assuming the accuracy of the representations of the Purchaser set forth in Section 6 hereof, the Company has obtained the approval or consent of all governmental agencies or bodies required to be obtained by it for the legal and valid execution and delivery of this Agreement and the Debenture and the legal and valid offer, issuance and sale of the Debenture and the offer of the Conversion Stock to the Purchaser through conversion and for the performance of the obligations of the Company under any provisions of this Agreement or the Debenture. The Company is not in violation of any term, provision or condition of its Articles of Incorporation or Bylaws, and the consummation of the transactions contemplated by this Agreement will not result in any breach or violation of the terms or provisions of, or constitute a default under, the Articles of Incorporation or the Bylaws of the Company or to the best of such counsel’s knowledge any statute, rule or regulation known to such counsel to be applicable to the Company. (viii) Upon due and diligent inquiry, the primary lawyers have no actual knowledge of any litigation, proceeding or governmental investigation pending or threatened against the Company, its key management employees, properties or business which, if determined adversely to the Company; would have a material adverse effect upon the financial condition, operations, results of operations or business of the Company. (b) The Company shall have delivered to the Purchaser an opinion Txxx Xxxxxxxxxxx, Executive Vice President and Chief Legal Counsel for the Company, dated the Closing Date, to the effect that: (i) The Company is a duly and validly organized and existing corporation in good standing under the laws of the State of Minnesota; has the corporate power and authority to enter into this Agreement and the Debenture, to issue and sell the Debenture and the Conversion Stock as contemplated by this Agreement, and to carry out the provisions of this Agreement and the Debenture, has the corporate power and authority to own and hold its properties owned and leased and to carry on the business in which it is engaged; and has not failed to qualify to do business as a foreign corporation in good standing in any state or jurisdiction wherein the nature of its activities or of its properties owned or leased makes such qualification necessary and failure to be so qualified would have a material adverse effect upon the Company. (ii) This Agreement and the Debenture have been duly authorized, executed and delivered by the Company, and are legal, valid and binding agreements of the Company enforceable in accordance with their respective terms, except as the enforceability thereof may be limited by bankruptcy, insolvency, moratorium, reorganization or similar laws affecting the enforcement of creditors’ rights generally, and except for judicial limitations on the enforcement of the remedy of specific performance and other equitable remedies. (iii) The Conversion Stock has been duly authorized and reserved for issuance upon conversion of the Debenture based upon the initial Conversion calculations and when issued upon such conversion in accordance with the terms and conditions of the Debenture and those of this Agreement the Conversion Stock will be duly authorized and issued and will be fully paid and nonassessable. (iv) All corporate proceedings required by law or by the provisions of this Agreement to be taken by the Board of Directors and the stockholders of the Company on or prior to the Closing Date in connection with the execution and delivery of this Agreement and the Debenture, the offer, issuance and sale of the Debenture and in connection with the consummation of the transactions contemplated by this Agreement, have been duly and validly taken. (v) The Company is authorized by its Articles of Incorporation to issue 75,000,000 common shares and 25,000,000 preferred shares. There are 5,207,007 common shares duly issued and outstanding, all of which are fully paid and nonassessable. None of the preferred shares have ever been issued and outstanding. The issuance and sale of such outstanding shares were exempt from registration under the Securities Act and such shares were issued in conformity with the permit or qualification requirements of all applicable state securities laws. Except for such common shares, the Company has no other authorized or outstanding series or class of capital stock, and, to the knowledge of such counsel, there are no outstanding securities convertible into common shares of the Company or outstanding options, warrants or other rights to acquire securities of the Company, other than the convertible notes, options and warrants disclosed in the Private Placement Memorandum attached to this Agreement as Exhibit D or set forth in the schedules attached to this Agreement as Exhibit C. To the knowledge of such counsel, there are no obligations on the part of the Company to purchase or redeem any outstanding shares of capital stock of the Company. (vi) No security holder of the Company is entitled to preemptive or similar rights to subscribe for or to purchase any shares of capital stock of the Company, nor will any security holder of the Company be entitled to any such rights as a result of the execution or delivery of this Agreement or the issuance of the Debenture or the Conversion Stock. (vii) Assuming the accuracy of the representations of the Purchaser set forth in Section 6 hereof, the Company has obtained the approval or consent of all governmental agencies or bodies required to be obtained by it for the legal and valid execution and delivery of this Agreement and the Debenture and the legal and valid offer, issuance and sale of the Debenture and the offer of the Conversion Stock to the Purchaser through conversion and for the performance of the obligations of the Company under any provisions of this Agreement or the Debenture. The Company is not in violation of any term, provision or condition of its Articles of Incorporation or Bylaws, or, to the best of such counsel’s knowledge, in violation of any agreement or other instrument known to such counsel to which the Company is a party or by which it is bound or to which any of its properties, assets or business is subject or any judgment, decree or order known to such counsel or to the best of such counsel’s knowledge any statute, rule or regulation; and the execution, delivery and performance of this Agreement and the Debenture, the offer, issuance and sale of the Debenture and the Conversion Stock, and the consummation of the transactions contemplated by this Agreement will not result in any breach or violation of the terms or provisions of, or constitute a default under, the Articles of Incorporation or the Bylaws of the Company or, to the best of such counsel’s knowledge, in violation of any agreement or other instrument known to such counsel to which the Company is a party or by which it is bound or to which any of its properties, assets or business is subject or any judgment, decree or order known to such counsel or to the best of such counsel’s knowledge any statute, rule or regulation. (viii) Assuming the accuracy of the representations of the Purchaser set forth in Section 6 hereof, the offer, sale, issuance and delivery of the Debenture and the offer of the Conversion Stock to the Purchaser through conversion of the Debenture under the circumstances contemplated by this Agreement and the Debenture are exempt from the registration and prospectus delivery requirements of the Securities Act, and all registrations, qualifications, permits and approvals required under applicable state securities laws for the lawful offer, sale, issuance and delivery of the Debenture and the Conversion Stock have been obtained. (ix) Upon due and diligent inquiry, such counsel has no knowledge of any litigation, proceeding or governmental investigation pending or threatened against the Company, its key management employees, properties or business which, if determined adversely to the Company, would have a material adverse effect upon the financial condition, operations, results of operations or business of the Company.

Opinion of Company's Counsel. The Company shall have delivered to each of the Purchaser Purchasers an opinion or opinions of Faegre & Xxxxxx and XxxxxxLLP, P.A., special counsel for the Company, dated as of the Closing Date, to the effect that: (a) The Company is a duly incorporated, validly existing and validly organized and existing corporation in good standing under the laws of the State of Minnesota; has Minnesota with the corporate power and authority to enter into this Agreement, the First Amendment to 2000 Agreement and Waiver, the WarrantsFirst Amendment to 1998 Agreement and Waiver, the Second Amendment to 1998 Agreement and Waiver; the First Amendment to 1996 Agreement and Waiver, the Second Amendment to 1996 Agreement and Waiver, the Third Amendment to 1996 Agreement and Waiver and the Shareholders Agreement (as defined in Section 7A.8 herein), to issue and sell the Preferred Shares and the Warrants Conversion Stock as contemplated by this Agreement, and to carry out the provisions of this Agreement, the First Amendment to 2000 Agreement and Waiver, the First Amendment to 1998 Agreement and Waiver, the Second Amendment to 1998 Agreement and Waiver, the First Amendment to 1996 Agreement and Waiver, the Second Amendment to 1996 Agreement and Waiver, the Third Amendment to 1996 Agreement and Waiver and the Shareholders Agreement and to conduct any lawful business activity; and has qualified to do business as a foreign corporation in good standing in any state or jurisdiction wherein the corporate power and authority to own and hold nature of its activities or of its properties owned or leased makes such qualification necessary and leased and failure to carry on be so qualified would have a material adverse effect upon the business in which it is engagedCompany. (b) This Agreement(1), the First Amendment to 2000 Agreement, the First Amendment to 1998 Agreement and Waiver, the Warrants Second Amendment to 1998 Agreement, the First Amendment to 1996 Agreement and Waiver, the Second Amendment to 1996 Agreement and Waiver, the Third Amendment to 1996 Agreement and Waiver and the Shareholders Agreement (as defined in Section 7A.8 herein) have been duly authorizedauthorized by all requisite corporate action, executed and delivered by the Company. This Agreement , and the Warrants are legal, valid and binding agreements of the Company enforceable in accordance with their respective terms, except as the enforceability thereof may be limited by bankruptcy, insolvency, moratorium, reorganization or similar laws affecting the enforcement of creditors' rights generally, and except for judicial limitations on the enforcement of the remedy of specific performance and other equitable remedies; provided, however, that the issuance of the Warrant Stock is subject to the approval of the Company's Amended Articles as set forth in Section 8.8 hereof and the filing thereof with the Minnesota Secretary of State in the manner prescribed by law. (c) The Certificate, the Amended and Restated Series A Certificate of Designation(as hereinafter defined), substantially in the form set forth Amended and Restated Series B Certificate (as Exhibit 1 hereto, has hereinafter defined) and the Amended and Restated Series C Certificate (as hereinafter defined) have been duly adopted by all necessary corporate action, action and has have been duly filed with the Secretary of State of the State of Minnesota (no other or additional filing or or (1) For this purpose, counsel may assume that the laws of Minnesota and New York are the same. recording being necessary in order to perfect create the Series D Preferred Stock or to amend the terms of the Series A Preferred Stock, the Series B Preferred Stock or the Series C Preferred Stock). No holder of capital stock of the Company has dissenters' rights under Chapter 302A of the Minnesota Statutes in connection with the adoption and privileges filing of the Certificate, the Amended and Restated Series A Certificate, the Amended and Restated Series B Certificate or the Amended and Restated Series C Certificate, except for the holders of Series A Preferred Stock, Series B Preferred Stock and Series C Preferred Stock and all such holders have waived any such rights by failing to give notice of such holders' intent to dissent from the Preferred Shares)adoption of the Amended and Restated Series A Certificate, the Amended and Restated Series B Certificate or the Amended and Restated Series C Certificate, as the case may be. (d) The Preferred Shares are entitled to the rights, preferences and provisions of the Certificate Certificate. The Series A Preferred Stock is entitled to the rights, preferences and provisions of Designationthe Amended and Restated Series A Certificate. The Series B Preferred Stock is entitled to the rights, subject preferences and provisions of the Amended and Restated Series B Certificate. The Series C Preferred Stock is entitled to any limitations contained thereinthe rights, preferences and provisions of the Amended and Restated Series C Certificate. The Preferred Shares are entitled to the benefits of this Agreement applicable thereto. (e) The Preferred Shares are duly authorized and validly issued, fully paid and nonassessable. The certificates for the Preferred Shares are in valid and sufficient form. (f) The shares initially issuable upon conversion of the Preferred Shares have been duly authorized and reserved for issuance and when issued upon such conversion in accordance with the terms and conditions of the Preferred Shares will be duly authorized, validly issued issued, fully paid and delivered nonassessable. (g) The Company is authorized by its Articles of Incorporation to issue 60,000,000 shares of capital stock, of which 50,000,000 shares have been designated Common Stock, 958,487 shares have been designated Series A Preferred Stock, 1,000,000 shares are designated Series B Preferred Stock, 4,500,000 shares are designated Series C Preferred Stock, 2,000,000 shares are designated Series D Preferred Stock and 1,541,513 shares are undesignated as to rights and preferences. The outstanding shares of capital stock of the Company have been duly authorized and validly issued and are fully paid and nonassessable. The Conversion Such counsel have no knowledge of any outstanding securities convertible into common shares of the Company or outstanding options, warrants or other rights to acquire securities of the Company, other than (i) the Preferred Shares, (ii) options and warrants disclosed in Exhibit 2 to this Agreement, (iii) the outstanding shares of Series A Preferred Stock, (iv) the outstanding shares of Series B Preferred Stock issuable upon conversion and (v) the outstanding shares of Series C Preferred Stock. Such counsel have no knowledge of any contracts, agreements, leases, documents, commitments or arrangements (except the 2000 Agreement, the 1998 Agreement and the 1996 Agreement) that grant or create any right with respect to the registration of any securities of the Company under the Securities Act or creates any obligation on the part of the Company to purchase or redeem any outstanding shares of capital stock of the Company. (h) To such counsel's knowledge, except as provided in the 1996 Agreement, the 1998 Agreement and the 2000 Agreement, no security holder of the Company is entitled to preemptive or similar rights to subscribe for or to purchase any shares of capital stock of the Company in connection with the transactions contemplated hereby, nor will any security holder of the Company be entitled to any such rights as a result of the execution or delivery of this Agreement or the issuance of the Preferred Shares has been reserved for issuance, and when issued upon conversion will be fully paid and nonassessableor the Conversion Stock. (fi) All corporate proceedings Assuming the accuracy of the representations of the Purchasers set forth in Section 6 hereof, the Company has obtained the approval or consent of all governmental agencies or bodies required to be obtained by law it for the valid offer, issuance and sale of the Preferred Shares and the offer of the Conversion Stock to the Purchasers through conversion by them of the Preferred Shares. The execution, delivery and performance of this Agreement, the First Amendment to 2000 Agreement and Waiver, the First Amendment to 1998 Agreement and Waiver, the Second Amendment to 1998 Agreement and Waiver, the First Amendment to 1996 Agreement and Waiver, the Second Amendment to 1996 Agreement and Waiver, the Third Amendment to 1996 Agreement and Waiver and the Shareholders Agreement, the offer, issuance and sale of the Preferred Shares and the Conversion Stock, and the consummation of the transactions contemplated by this Agreement will not result in any breach or violation of the terms or provisions of, or constitute a default under, the Articles of Incorporation or the Bylaws or a violation of any contract, agreement, lease, document, commitment or arrangement known to such counsel or any judgment, decree or order known to such counsel and applicable to the Company or to such counsel's knowledge any statute, rule or regulation of the United States or the State of Minnesota or any governmental authority or regulatory body thereof. (j) Assuming the accuracy of the representations of the Purchasers set forth in Section 6 hereof, the offer, sale, issuance and delivery of the Preferred Shares, and the offer of the Conversion Stock to the Purchasers through conversion by them of the Preferred Shares under the circumstances contemplated by the provisions Certificate and this Agreement, are exempt from the registration and prospectus delivery requirements of this Agreement the Securities Act, and all registrations, qualifications, permits and approvals required under applicable state securities laws for the lawful offer, sale, issuance and delivery of the Preferred Shares and the Conversion Stock have been obtained, other than the filing of a notice on Form D by the Company with the Commission which may be made subsequent to such offer, sale, issuance and delivery and any filings that may be required to be taken by the Board of Directors and the stockholders of the Company on or prior made subsequent to the Closing Date under any applicable state securities laws. (k) Other than as disclosed on Exhibit 2 to this Agreement, such counsel have no knowledge of any litigation, proceeding or governmental investigation pending or threatened against the Company, its key management employees in connection with the execution and delivery of this Agreement and the Warrants have been duly and validly takentheir capacity as employees, properties or business.

Opinion of Company's Counsel. The Company shall have delivered to each of the Purchaser Purchasers an opinion or opinions of Faegre & Xxxxxx and Xxxxxx, P.A.LLP, counsel for the Company, dated as of the such Closing Date, to the effect that: (a) The Company and each of its Subsidiaries is a duly and validly organized incorporated and existing corporation in good standing under the laws of the State state of Minnesotaits incorporation; has the corporate power and authority to enter into this Agreement and the Warrants, to issue and sell the Preferred Shares and the Warrants as contemplated by this Agreement, and to carry out the provisions of this Agreement; and has the corporate power and authority to own and hold its properties owned and leased and to carry on the business in which it is engaged.engaged and has the corporate power and authority to enter into this Agreement, to issue and sell the Series B Preferred Shares and the Conversion Stock as contemplated by this Agreement, and to carry out the provisions of this Agreement; and (b) This Agreement and the Warrants have has been duly authorized, executed and delivered by the Company. This Agreement , and the Warrants are is a legal, valid and binding agreements agreement of the Company enforceable in accordance with their respective its terms, except as the enforceability thereof may be limited by bankruptcy, insolvency, moratorium, reorganization or similar laws affecting the enforcement of creditors' rights generally, and except for judicial limitations on the enforcement of the remedy of specific performance and other equitable remedies; provided, however, that the issuance of the Warrant Stock is subject to the approval of the Company's Amended Articles as set forth in Section 8.8 hereof and the filing thereof with the Minnesota Secretary of State in the manner prescribed by law. (c) The Certificate of DesignationCapital Stock Provisions, substantially in the form set forth as Exhibit 1 hereto, has have been duly adopted by all necessary corporate action, and has have been duly filed with the Secretary of State of the State of Minnesota (no other or additional filing or recording being necessary in order to perfect the rights and privileges of the holders of the Series B Preferred Shares)Shares contained in the Capital Stock Provisions) as an amendment to the Company's Articles of Incorporation. (d) The Series B Preferred Shares are entitled to the rights, preferences and provisions of the Certificate of Designation, subject to any limitations contained thereinCapital Stock Provisions. (e) The Series B Preferred Shares have been duly authorized, validly issued and delivered by the Company and are fully paid and nonassessable. , and the certificates for the Series B Preferred Shares are in valid and sufficient form, and the Series B Preferred Shares are entitled to the benefits of this Agreement applicable thereto. (f) The Conversion Stock issuable has been duly authorized and reserved for issuance upon conversion of the Series B Preferred Shares has been reserved for issuancebased upon the initial Conversion Price, and when issued upon such conversion in accordance with the terms and conditions of the Series B Preferred Shares and those of this Agreement the Conversion Stock will be duly authorized and issued and will be fully paid and nonassessable. (fg) All corporate proceedings required by law or by the provisions of this Agreement to be taken by the Board of Directors and the stockholders shareholders of the Company on or prior to the Closing Date in connection with the execution and delivery of this Agreement Agreement, the offer, issuance and sale of the Series B Preferred Shares and the Warrants Conversion Stock and in connection with the consummation of the transactions contemplated by this Agreement, have been duly and validly taken. (h) The Company is authorized by its Articles of Incorporation to issue 22,000,000 shares, of which 17,000,000 are designated common shares, 2,396,800 are designated series A convertible preferred Shares, 2,100,000 are designated series B convertible preferred shares and 503,200 are undesignated. Except for such Series A Preferred Shares, such common shares and the Series B Preferred Shares, the Company has no other authorized or outstanding series or class of capital stock, and, to the knowledge of such counsel, there are no outstanding securities convertible into common shares of the Company or outstanding options, warrants or other rights to acquire securities of the Company, other than (a) the Preferred Shares, and (b) options, warrants and Convertible Securities disclosed in Exhibit 2 to this Agreement. To the knowledge of such counsel, there are no agreements or understandings on the part of the Company with respect to the registration of any securities of the Company under the Securities Act, other than those granted under this Agreement and as otherwise disclosed in Exhibit 2 to this Agreement, and there are no obligations on the part of the Company to purchase or redeem any outstanding shares of capital stock of the Company, other than as set forth in the Capital Stock Provisions and as otherwise disclosed in Exhibit 2 to this Agreement. (i) No security holder of the Company is entitled to preemptive or, to the best of such counsel's knowledge, similar rights to subscribe for or to purchase any shares of capital stock of the Company except as otherwise contemplated by this Agreement, nor will any security holder of the Company be entitled to any such rights as a result of the execution or delivery of this Agreement or the issuance of the Series B Preferred Shares or the Conversion Stock. (j) Assuming the accuracy of the representations of the Purchasers set forth in Section 6 hereof and assuming that the limitations on the manner of offering contained in Rule 502(c) of the Securities Act have been complied with, the Company has obtained the approval or consent of all governmental agencies or bodies required to be obtained by it for the legal and valid execution and delivery of this Agreement and the legal and valid offer, issuance and sale of the Series B Preferred Shares and the offer of the Conversion Stock to the Purchasers through conversion by them of the Series B Preferred Shares and for the performance of the obligations of the Company under any provisions of this Agreement. To the best of such counsel's knowledge, neither the Company nor any of its Subsidiaries is in violation of any term, provision or condition of its Articles of Incorporation or Bylaws; and the execution, delivery and performance of this Agreement by the Company, the offer, issuance and sale of the Series B Preferred Shares and the Conversion Stock and the consummation of the transactions contemplated by this Agreement by the Company will not result in any breach or violation of the terms or provisions of, or constitute a default under, the Articles of Incorporation or the Bylaws of the Company or its Subsidiaries or in violation of any agreement listed on Schedule A attached to this Agreement, or any judgement, decree or order specifically directed to the Company or any Subsidiary listed in Exhibit 2 to this Agreement, or any statute, rule or regulation. (k) Assuming the accuracy of the representations of the Purchasers set forth in Section 6 hereof and assuming that the limitations on the manner of offering contained in Rule 502(c) of the Securities Act have been complied with, the offer, sale, issuance and delivery of the Series B Preferred Shares and the offer of the Conversion Stock to the Purchasers through conversion by them of the Series B Preferred Shares under the circumstances contemplated by the Capital Stock Provisions and this Agreement are exempt from the registration and prospectus delivery requirements of the Securities Act, and all registrations, qualifications, permits and approvals required under applicable state securities laws for the lawful offer, sale, issuance and delivery of the Series B Preferred Shares and the Conversion Stock have been obtained. (l) Such counsel have no knowledge of any litigation, proceeding or governmental investigation pending or threatened in writing against the Company or its Subsidiaries, its key management employees, properties or business which, if determined adversely to the Company or its Subsidiaries, would have a Material Adverse Effect.

Opinion of Company's Counsel. The Company shall have delivered to ---------------------------- each of the Purchaser Purchasers an opinion or opinions of Faegre & Xxxxxx and Xxxxxx, P.A.LLP, counsel for the Company, dated as of the Phase I Closing Date, to the effect that: (a) The Company and each of its Subsidiaries is a duly and validly organized and existing corporation in good standing under the laws of the State state of Minnesotaits incorporation; has the corporate power and authority to enter into this Agreement and the Warrants, to issue and sell the Preferred Shares and the Warrants as contemplated by this Agreement, and to carry out the provisions of this Agreement; and has the corporate power and authority to own and hold its properties owned and leased and to carry on the business in which it is engaged; and has the corporate power and authority to enter into this Agreement, to issue and sell the Series C Preferred Shares and the Conversion Stock as contemplated by this Agreement, and to carry out the provisions of this Agreement. (b) This Agreement and the Warrants have has been duly authorized, executed and delivered by the Company. This Agreement , and the Warrants are is a legal, valid and binding agreements obligation of the Company enforceable in accordance with their respective its terms, except as the enforceability thereof may be limited by bankruptcy, insolvency, moratorium, reorganization or similar laws affecting the enforcement of creditors' rights generally, and except for judicial limitations on the enforcement of the remedy of specific performance and other equitable remedies; provided, however, that the issuance of the Warrant Stock is subject to the approval of the Company's Amended Articles as set forth in Section 8.8 hereof and the filing thereof with the Minnesota Secretary of State in the manner prescribed by law. (c) The Certificate of DesignationStockholders' Agreement, substantially in the form set forth as Exhibit 2 hereto, and the Articles, substantially in the form set forth as Exhibit 1 hereto, has have been duly adopted by all necessary corporate action, and has have been duly filed with the Secretary of State of the State of Minnesota (no other or additional filing or recording being necessary in order to perfect the rights and privileges of the holders of the Series C Preferred SharesShares contained therein). (d) The Series C Preferred Shares are entitled to the rights, preferences and provisions of the Certificate of Designation, subject to any limitations contained thereinArticles. (e) The Preferred Shares Purchased Securities have been duly authorized, validly issued authorized and delivered by the Company and are fully paid and nonassessable. , and the certificates for the Purchased Securities are in valid and sufficient form, and the Purchased Securities are entitled to the benefits of this Agreement applicable thereto. (f) The Conversion Stock issuable has been duly authorized and reserved for issuance upon conversion of the Series C Preferred Shares has been reserved for issuancebased upon the initial Series C Conversion Price, and when issued upon such conversion in accordance with the terms and conditions of the Series C Preferred Shares and those of this Agreement the Conversion Stock will be duly authorized and validly issued and will be fully paid and nonassessable. (fg) The CVR Stock has been duly authorized and reserved for issuance pursuant to the CVRs, and when issued in accordance with the terms and conditions of the CVRs and those of this Agreement the CVR Stock will be duly authorized and validly issued and will be fully paid and nonassessable. (h) All corporate proceedings required by law or by the provisions of this Agreement to be taken by the Board of Directors and the stockholders shareholders of the Company on or prior to the Phase I Closing Date in connection with the execution and delivery of this Agreement Agreement, the offer, issuance and sale of the Purchased Securities, the Conversion Stock and the Warrants CVR Stock and in connection with the consummation of the transactions contemplated by this Agreement, have been duly and validly taken. (i) Immediately upon giving effect to the Articles and the issuance and sale of the Purchased Securities at the Phase I Closing pursuant to this Agreement, the Company is authorized by its Articles of Incorporation to issue 28,500,000 shares, of which 19,650,000 are designated common shares, 2,396,800 are designated series A convertible preferred shares, 2,100,000 are designated as series B convertible preferred shares, 3,679,053 are designated series C convertible preferred shares and 674,147 are undesignated. Except for such Series A Preferred Shares, Series B Preferred Shares, Series C Preferred Shares and such common shares, the Company has no other authorized or outstanding series or class of capital stock, and, to the knowledge of such counsel, there are no outstanding securities convertible into common shares of the Company or outstanding options, warrants or other rights to acquire securities of the Company, other than (a) the Preferred Shares, and (b) options, warrants and Convertible Securities disclosed in Schedule 5.13 to this Agreement. To ------------- the knowledge of such counsel, there are no agreements or understandings on the part of the Company with respect to the registration of any securities of the Company under the Securities Act, other than those granted under this Agreement and as otherwise disclosed in Schedule 5.21 to this ------------- Agreement, and there are no obligations on the part of the Company to purchase or redeem any outstanding shares of capital stock of the Company, other than as set forth in the Articles and as otherwise disclosed in Schedule 5.13 to this Agreement. ------------- (j) No security holder of the Company is entitled to preemptive or, to the best of such counsel's knowledge, similar rights to subscribe for or to purchase any shares of capital stock of the Company except as otherwise contemplated by this Agreement, the 1997 Stock Purchase Agreement and the stock purchase warrants issued in connection with the Company's Senior Subordinated Loan and Security Agreement dated as of October 31, 1997 and the First Amendment thereto dated as of May 19, 1998, nor will any security holder of the Company be entitled to any such rights as a result of the execution or delivery of this Agreement or the issuance of the Purchased Securities, the Conversion Stock or the CVR Stock. (k) Assuming the accuracy of the representations of the Purchasers set forth in Section 6 hereof and assuming that the limitations on the manner of offering contained in Rule 502(c) of the Securities Act have been complied with, the Company has obtained the approval or consent of all governmental agencies or bodies required to be obtained by it for the legal and valid execution and delivery of this Agreement and the legal and valid offer, issuance and sale of the Purchased Securities, the offer of the Conversion Stock to the Purchasers through conversion by them of the Series C Preferred Shares and the offer of the CVR Stock to the Purchasers issuable pursuant to the CVRs and for the performance of the obligations of the Company under any provisions of this Agreement. To the best of such counsel's knowledge, neither the Company nor any of its Subsidiaries is in violation of any term, provision or condition of its Articles of Incorporation or Bylaws; and the execution, delivery and performance of this Agreement by the Company, the offer, issuance and sale of the Purchased Securities, the Conversion Stock and the CVR Stock and the consummation of the transactions contemplated by this Agreement by the Company will not result in any breach or violation of the terms or provisions of, or constitute a default under, the Articles of Incorporation or the Bylaws of the Company or its Subsidiaries; or in violation of any agreement listed on Schedule 5.15 attached to this Agreement or any ------------- judgment, decree or order specifically directed to the Company or any Subsidiary listed on Schedule 5.8 to this Agreement, or any statute, rule ------------ or regulation. (l) Assuming the accuracy of the representations of the Purchasers set forth in Section 6 hereof and assuming that the limitations on the manner of offering contained in Rule 502(c) of the Securities Act have been complied with, the offer, sale, issuance and delivery of the Purchased Securities, the offer of the Conversion Stock to the Purchasers through conversion by them of the Series C Preferred Shares and the offer of the CVR Stock to the Purchasers issuable pursuant to the CVRs under the circumstances contemplated by the CVRs, the Articles and this Agreement are exempt from the registration and prospectus delivery requirements of the Securities Act, and all registrations, qualifications, permits and approvals required under applicable state securities laws for the lawful offer, sale, issuance and delivery of the Purchased Securities, the Conversion Stock and the CVR Stock have been obtained. (m) Except as otherwise disclosed in Schedule 5.8 to this Agreement, such counsel have no knowledge of any litigation, proceeding or governmental investigation pending or threatened in writing against the Company or its Subsidiaries, its key management employees, properties or business which, if determined adversely to the Company or its Subsidiaries, would have a Material Adverse Effect.