hereto, the Company represents and warrants to the Buyer, that:
3
(A)
ORGANIZATION AND QUALIFICATION.
THE
COMPANY AND ITS "SUBSIDIARIES" (WHICH FOR PURPOSES OF THIS AGREEMENT MEANS ANY
ENTITY IN WHICH THE COMPANY, DIRECTLY OR INDIRECTLY, OWNS CAPITAL STOCK OR HOLDS
A MAJORITY OR SIMILAR INTEREST) ARE CORPORATIONS DULY ORGANIZED AND VALIDLY
EXISTING IN GOOD STANDING UNDER THE LAWS OF THE JURISDICTION IN WHICH THEY ARE
INCORPORATED, AND HAVE THE REQUISITE CORPORATE 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 CORPORATION 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 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,
FINANCIAL CONDITION OR PROSPECTS OF THE COMPANY AND ITS SUBSIDIARIES, IF ANY,
TAKEN AS A WHOLE, OR ON THE TRANSACTIONS CONTEMPLATED HEREBY OR BY THE
AGREEMENTS AND INSTRUMENTS TO BE ENTERED INTO IN CONNECTION HEREWITH, OR ON THE
AUTHORITY OR ABILITY OF THE COMPANY TO PERFORM ITS OBLIGATIONS UNDER THE
TRANSACTION DOCUMENTS (AS DEFINED BELOW).
(B)
AUTHORIZATION; ENFORCEMENT; VALIDITY.
THE
COMPANY HAS THE REQUISITE CORPORATE POWER AND AUTHORITY TO ENTER INTO AND
PERFORM THIS AGREEMENT AND THE REGISTRATION RIGHTS AGREEMENT, (TOGETHER, THE
"TRANSACTION DOCUMENTS") AND TO FILE, AND PERFORM ITS OBLIGATIONS UNDER, THE
TRANSACTION DOCUMENTS, AND TO ISSUE THE SHARES 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 SHARES,
HAVE BEEN DULY AUTHORIZED BY THE COMPANY'S BOARD OF DIRECTORS AND NO FURTHER
CONSENT OR AUTHORIZATION IS REQUIRED BY THE COMPANY, ITS BOARD OF DIRECTORS OR
ITS STOCKHOLDERS (INCLUDING, WITHOUT LIMITATION, PURSUANT TO RULE 4350 OF THE
NASDAQ MARKETPLACE RULES).
THE TRANSACTION DOCUMENTS OF EVEN DATE HEREWITH HAVE
BEEN DULY EXECUTED AND DELIVERED BY THE COMPANY, AND CONSTITUTE THE VALID AND
BINDING OBLIGATIONS OF THE COMPANY ENFORCEABLE AGAINST THE COMPANY IN ACCORDANCE
WITH THEIR TERMS, EXCEPT AS SUCH ENFORCEABILITY MAY BE LIMITED BY GENERAL
PRINCIPLES OF EQUITY OR APPLICABLE BANKRUPTCY, INSOLVENCY, REORGANIZATION,
MORATORIUM, LIQUIDATION OR SIMILAR LAWS RELATING TO, OR AFFECTING GENERALLY, THE
ENFORCEMENT OF CREDITORS' RIGHTS AND REMEDIES.
(C)
CAPITALIZATION.
THE AUTHORIZED CAPITAL
STOCK OF THE COMPANY CONSISTS OF (I) 250,000,000 SHARES OF COMMON STOCK OF WHICH
(A) 54,078,713 SHARES WERE ISSUED AND OUTSTANDING AS OF AUGUST 31, 2003 AND (B)
13,088,045 SHARES WERE RESERVED FOR ISSUANCE UPON THE EXERCISE OR CONVERSION, AS
THE CASE MAY BE, OF OUTSTANDING OPTIONS, WARRANTS OR OTHER CONVERTIBLE
SECURITIES AS OF AUGUST 31, 2002 AND (II) 10,000,000 SHARES OF CONVERTIBLE
REDEEMABLE PREFERRED STOCK, OF