provisions of the
Registration Rights Agreement. All shares of Common Stock delivered upon
conversion of the Shares or exercise of the Warrants shall, upon conversion or
exercise pursuant to the terms thereof, be duly authorized and validly issued,
fully paid and nonassessable, free from all taxes, liens and charges with
respect to the issue thereof. Any shares of Common Stock issuable upon
conversion of the Shares (and such shares when issued) are herein referred to as
the "Conversion Shares". Any shares of Common Stock issuable upon exercise of
the Warrants (and such shares when issued) are herein referred to as the
"Warrant Shares". The Shares, the Conversion Shares, the Warrants and the
Warrant Shares are sometimes collectively referred to herein as the
"Securities".
ARTICLE II
REPRESENTATIONS AND WARRANTIES
Section 2.1
Representations and Warranties
of the Company. In order to induce the Purchasers to enter into this Agreement
and to purchase the Shares and Warrants, the Company hereby makes the following
representations and warranties to the Purchasers:
(A)
ORGANIZATION, GOOD STANDING AND POWER. THE
COMPANY IS A CORPORATION DULY INCORPORATED, VALIDLY EXISTING AND IN GOOD
STANDING UNDER THE LAWS OF THE STATE OF DELAWARE AND HAS THE REQUISITE CORPORATE
POWER TO OWN, LEASE AND OPERATE ITS PROPERTIES AND ASSETS AND TO CONDUCT ITS
BUSINESS AS IT IS NOW BEING CONDUCTED EXCEPT TO THE EXTENT THAT ANY FAILURE WILL
NOT HAVE A MATERIAL ADVERSE EFFECT. THE COMPANY AND EACH SUCH SUBSIDIARY IS DULY
QUALIFIED AS A FOREIGN CORPORATION TO DO BUSINESS AND IS IN GOOD STANDING IN
EVERY JURISDICTION IN WHICH THE NATURE OF THE BUSINESS CONDUCTED OR PROPERTY
OWNED BY IT MAKES SUCH QUALIFICATION NECESSARY, EXCEPT FOR ANY JURISDICTION(S)
(ALONE OR IN THE AGGREGATE) IN WHICH THE FAILURE TO BE SO QUALIFIED WILL NOT
HAVE A MATERIAL ADVERSE EFFECT. FOR THE PURPOSES OF THIS AGREEMENT, "MATERIAL
ADVERSE EFFECT" MEANS ANY ADVERSE EFFECT ON THE BUSINESS, OPERATIONS, ASSETS OR
FINANCIAL CONDITION OF THE COMPANY OR ITS SUBSIDIARIES AND WHICH IS MATERIAL TO
SUCH ENTITY OR OTHER ENTITIES CONTROLLING OR CONTROLLED BY SUCH ENTITY OR THE
COMPANY OR WHICH IS LIKELY TO MATERIALLY HINDER THE PERFORMANCE
2
BY THE COMPANY OF ITS OBLIGATIONS HEREUNDER AND UNDER THE OTHER TRANSACTION
DOCUMENTS (AS DEFINED IN SECTION 2.1(B) HEREOF), BUT SHALL NOT INCLUDE ANY OF
THE FOLLOWING, EITHER ALONE OR IN COMBINATION: (I) ANY EFFECT OR CHANGE
OCCURRING AS A RESULT OF (A) GENERAL ECONOMIC OR FINANCIAL CONDITIONS OR (B)
OTHER DEVELOPMENTS WHICH ARE NOT UNIQUE TO THE COMPANY BUT ALSO AFFECT OTHER
PERSONS OR ENTITIES IN THE COMPANY'S INDUSTRY; (II) ANY CHANGE OR EFFECT
RESULTING FROM A DELAY IN THE CLOSING NOT CAUSED DIRECTLY OR INDIRECTLY BY THE
COMPANY; OR (III) FAILURE OF THE COMPANY'S RESULTS OF OPERATIONS TO MEET ANY
INTERNAL OR EXTERNAL PROJECTIONS, PREDICTIONS, ESTIMATES OR EXPECTATIONS.
(B)
AUTHORIZATION; ENFORCEMENT. THE COMPANY HAS
THE REQUISITE CORPORATE POWER AND AUTHORITY TO ENTER INTO AND PERFORM THIS
AGREEMENT, THE REGISTRATION RIGHTS AGREEMENT, THE WARRANTS, AND THE OTHER
AGREEMENTS AND DOCUMENTS CONTEMPLATED HEREBY AND THEREBY