OF THE BUSINESS, OPERATIONS OR ADMINISTRATION OF SUCH
ENTITY) ARE ENTITIES DULY ORGANIZED AND VALIDLY EXISTING IN GOOD STANDING UNDER
THE LAWS OF THE JURISDICTION IN WHICH THEY ARE FORMED, AND HAVE THE REQUISITE
POWER AND AUTHORIZATION TO OWN THEIR PROPERTIES AND TO CARRY ON THEIR BUSINESS
AS NOW BEING CONDUCTED.
EACH OF THE COMPANY AND ITS SUBSIDIARIES IS DULY
QUALIFIED AS A FOREIGN ENTITY TO DO BUSINESS AND IS IN GOOD STANDING IN EVERY
JURISDICTION IN WHICH ITS OWNERSHIP OF PROPERTY OR THE NATURE OF THE BUSINESS
CONDUCTED BY IT MAKES SUCH QUALIFICATION NECESSARY, EXCEPT TO THE EXTENT THAT
THE FAILURE TO BE SO QUALIFIED OR BE IN GOOD STANDING WOULD NOT REASONABLY BE
EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT.
AS USED IN THIS AGREEMENT,
"MATERIAL ADVERSE EFFECT" MEANS ANY MATERIAL ADVERSE EFFECT ON THE BUSINESS,
PROPERTIES, ASSETS, OPERATIONS, RESULTS OF OPERATIONS, CONDITION (FINANCIAL OR
OTHERWISE) OR PROSPECTS OF THE COMPANY AND ITS SUBSIDIARIES, TAKEN AS A WHOLE,
OR ON THE TRANSACTIONS CONTEMPLATED HEREBY AND THE OTHER TRANSACTION DOCUMENTS
OR BY THE AGREEMENTS AND INSTRUMENTS TO BE ENTERED INTO IN CONNECTION HEREWITH
OR THEREWITH, OR ON THE AUTHORITY OR ABILITY OF THE COMPANY TO PERFORM ITS
OBLIGATIONS UNDER THE TRANSACTION DOCUMENTS (AS DEFINED BELOW).
THE COMPANY HAS
NO SUBSIDIARIES EXCEPT AS SET FORTH ON SCHEDULE 3(A).
(B)
AUTHORIZATION; ENFORCEMENT; VALIDITY.
THE COMPANY HAS THE
REQUISITE POWER AND AUTHORITY TO ENTER INTO AND PERFORM ITS OBLIGATIONS UNDER
THIS AGREEMENT, THE COMMON SHARES, THE REGISTRATION RIGHTS AGREEMENT, THE
IRREVOCABLE TRANSFER AGENT INSTRUCTIONS (AS DEFINED IN SECTION 5(B)), THE
WARRANTS AND EACH OF THE OTHER AGREEMENTS ENTERED INTO BY
6
THE PARTIES HERETO IN CONNECTION WITH THE TRANSACTIONS CONTEMPLATED BY THIS
AGREEMENT (COLLECTIVELY, THE "TRANSACTION DOCUMENTS") AND TO ISSUE THE
SECURITIES IN ACCORDANCE WITH THE TERMS HEREOF AND THEREOF.
THE EXECUTION AND
DELIVERY OF THE TRANSACTION DOCUMENTS BY THE COMPANY AND THE CONSUMMATION BY THE
COMPANY OF THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY, INCLUDING, WITHOUT
LIMITATION, THE ISSUANCE OF THE COMMON SHARES AND THE WARRANTS, THE RESERVATION
FOR ISSUANCE AND ISSUANCE OF WARRANT SHARES ISSUABLE UPON EXERCISE OF THE
WARRANTS HAVE BEEN DULY AUTHORIZED BY THE COMPANY'S BOARD OF DIRECTORS AND OTHER
THAN (I) THE FILING OF A FORM D UNDER REGULATION D OF THE 1933 ACT, (II) THE
FILING WITH THE SEC OF ONE OR MORE REGISTRATION STATEMENTS IN ACCORDANCE WITH
THE REQUIREMENTS OF THE REGISTRATION RIGHTS AGREEMENT, (III) SUCH FILINGS AS ARE
REQUIRED BY THE PRINCIPAL MARKET (AS DEFINED BELOW) AND (IV) SUCH FILINGS
REQUIRED UNDER APPLICABLE SECURITIES OR "BLUE SKY" LAWS OF THE STATES OF THE
UNITED STATES, NO FURTHER FILING, CONSENT, OR AUTHORIZATION IS REQUIRED BY THE
COMPANY, ITS BOARD OF DIRECTORS OR ITS STOCKHOLDERS.
THIS AGREEMENT AND THE
OTHER TRANSACTION DOCUMENTS OF EVEN DATE HEREWITH HAVE BEEN DULY EXECUTED AND
WHEN DELIVERED BY THE COMPANY WILL CONSTITUTE THE LEGAL, VALID AND BINDING
OBLIGATIONS OF THE COMPANY, ENFORCEABLE AGAINST THE COMPANY IN ACCORDANCE WITH
THEIR RESPECTIVE TERMS, EXCEPT AS SUCH ENFORCEABILITY MAY BE LIMITED BY GENERAL