OF SECURITIES.
(IV)
THE RIGHTS, PREFERENCES, PRIVILEGES AND
RESTRICTIONS OF THE SHARES OF THE COMMON STOCK ARE AS STATED IN THE PARENT'S
CERTIFICATE OF INCORPORATION (THE "CHARTER").
THE NOTE SHARES AND THE WARRANT
SHARES HAVE BEEN DULY AND VALIDLY RESERVED FOR ISSUANCE.
WHEN ISSUED IN
COMPLIANCE WITH THE PROVISIONS OF THIS AGREEMENT AND THE PARENT'S CHARTER, THE
SECURITIES WILL BE VALIDLY ISSUED, FULLY PAID AND NONASSESSABLE, AND WILL BE
FREE OF ANY LIENS OR ENCUMBRANCES; PROVIDED, HOWEVER, THAT THE SECURITIES MAY BE
SUBJECT TO RESTRICTIONS ON TRANSFER UNDER STATE AND/OR FEDERAL SECURITIES LAWS
AS SET FORTH HEREIN OR AS OTHERWISE REQUIRED BY SUCH LAWS AT THE TIME A TRANSFER
IS PROPOSED.
(D)
AUTHORIZATION; BINDING OBLIGATIONS.
ALL
CORPORATE, PARTNERSHIP OR LIMITED LIABILITY COMPANY, AS THE CASE MAY BE, ACTION
ON ITS AND ITS SUBSIDIARIES' PART (INCLUDING THEIR RESPECTIVE OFFICERS AND
DIRECTORS) NECESSARY FOR THE AUTHORIZATION OF THIS AGREEMENT AND THE ANCILLARY
AGREEMENTS, THE PERFORMANCE OF ALL OF ITS AND ITS SUBSIDIARIES' OBLIGATIONS
HEREUNDER AND UNDER THE ANCILLARY AGREEMENTS ON THE CLOSING DATE AND, THE
AUTHORIZATION, ISSUANCE AND DELIVERY OF THE NOTES AND THE WARRANT HAS BEEN TAKEN
OR WILL BE TAKEN PRIOR TO THE CLOSING DATE.
THIS AGREEMENT AND THE ANCILLARY
AGREEMENTS, WHEN EXECUTED AND DELIVERED AND TO THE EXTENT IT IS A PARTY THERETO,
WILL BE ITS AND ITS SUBSIDIARIES' VALID AND BINDING OBLIGATIONS ENFORCEABLE
AGAINST EACH SUCH PERSON IN ACCORDANCE WITH THEIR TERMS, EXCEPT:
(I)
AS LIMITED BY APPLICABLE BANKRUPTCY,
INSOLVENCY, REORGANIZATION, MORATORIUM OR OTHER LAWS OF GENERAL APPLICATION
AFFECTING ENFORCEMENT OF CREDITORS' RIGHTS; AND
13
(II)
GENERAL PRINCIPLES OF EQUITY THAT RESTRICT
THE AVAILABILITY OF EQUITABLE OR LEGAL REMEDIES.
The issuance of the Notes and the subsequent conversion of the Notes into Note
Shares are not and will not be subject to any preemptive rights or rights of
first refusal that have not been properly waived or complied with.
The issuance
of the Warrants and the subsequent exercise of the Warrants for Warrant Shares
are not and will not be subject to any preemptive rights or rights of first
refusal that have not been properly waived or complied with.
(E)
LIABILITIES.
NEITHER IT NOR ANY OF ITS
SUBSIDIARIES HAS ANY LIABILITIES, EXCEPT CURRENT LIABILITIES INCURRED IN THE
ORDINARY COURSE OF BUSINESS AND LIABILITIES DISCLOSED IN ANY EXCHANGE ACT
FILINGS AND THOSE LIABILITIES LISTED ON SCHEDULE 12(E).
(F)
AGREEMENTS; ACTION.
EXCEPT AS SET FORTH
ON SCHEDULE 12(F) OR AS DISCLOSED IN ANY EXCHANGE ACT FILINGS:
(I)
THERE ARE NO AGREEMENTS, UNDERSTANDINGS,
INSTRUMENTS, CONTRACTS, PROPOSED TRANSACTIONS, JUDGMENTS, ORDERS, WRITS OR
DECREES TO WHICH IT OR ANY OF ITS SUBSIDIARIES IS A PARTY OR TO ITS KNOWLEDGE BY
WHICH IT IS BOUND WHICH MAY INVOLVE:
(I) OBLIGATIONS (CONTINGENT OR OTHERWISE)
OF, OR PAYMENTS TO, IT OR ANY OF ITS SUBSIDIARIES IN EXCESS OF $50,000 (OTHER
THAN OBLIGATIONS OF, OR PAYMENTS TO, IT OR ANY OF ITS SUBSIDIARIES ARISING FROM
PURCHASE OR SALE AGREEMENTS ENTERED INTO IN THE ORDINARY COURSE OF BUSINESS); OR
(II) THE TRANSFER OR LICENSE OF ANY PATENT,