ADVERSE EFFECT.
THE (I) EXECUTION, DELIVERY AND
PERFORMANCE OF THIS AGREEMENT AND THE OTHER TRANSACTION DOCUMENTS AND
(II) CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY (INCLUDING
WITHOUT LIMITATION, THE ISSUANCE OF THE SHARES AND THE WARRANTS AND THE
RESERVATION FOR ISSUANCE AND ISSUANCE OF THE WARRANT SHARES) WILL NOT RESULT IN
ANY VIOLATION OF ANY PROVISIONS OF THE COMPANY'S CHARTER, BYLAWS OR ANY OTHER
GOVERNING DOCUMENT OR IN A DEFAULT UNDER ANY PROVISION OF ANY MATERIAL
INSTRUMENT OR CONTRACT TO WHICH IT IS A PARTY OR BY WHICH IT OR ANY OF ITS
PROPERTY IS BOUND, OR IN VIOLATION OF ANY PROVISION OF ANY GOVERNMENTAL
REQUIREMENT APPLICABLE TO THE COMPANY (OTHER THAN ANY PROVISION UNDER THE
RULES OF THE PRINCIPAL MARKET REQUIRING PRIOR NOTICE TO THE PRINCIPAL MARKET OF
THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT AND THE OTHER TRANSACTION
DOCUMENTS) OR BE IN CONFLICT WITH OR CONSTITUTE, WITH OR WITHOUT THE PASSAGE OF
TIME AND GIVING OF NOTICE, EITHER A DEFAULT UNDER ANY SUCH PROVISION, INSTRUMENT
OR CONTRACT OR AN EVENT WHICH RESULTS IN THE CREATION OF ANY LIEN UPON ANY
ASSETS OF THE COMPANY OR THE TRIGGERING OF ANY PREEMPTIVE OR ANTI-DILUTION
RIGHTS (INCLUDING WITHOUT LIMITATION PURSUANT TO ANY "RESET" OR SIMILAR
PROVISIONS) OR RIGHTS OF FIRST REFUSAL OR FIRST OFFER, OR ANY OTHER RIGHTS THAT
WOULD ALLOW OR PERMIT THE HOLDERS OF THE COMPANY'S SECURITIES TO PURCHASE SHARES
OF COMMON STOCK OR OTHER SECURITIES OF THE COMPANY (WHETHER PURSUANT TO A
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shareholder rights plan provision or otherwise), on the part of holders of the
Company's securities.
3.8
FINANCIAL CONDITION; TAXES; LITIGATION.
3.8.1
THE FINANCIAL CONDITION OF THE COMPANY AND EACH
COMPANY SUBSIDIARY IS, IN ALL MATERIAL RESPECTS, AS DESCRIBED IN THE DISCLOSURE
DOCUMENTS, EXCEPT FOR CHANGES IN THE ORDINARY COURSE OF BUSINESS AND NORMAL
YEAR-END ADJUSTMENTS THAT ARE NOT, IN THE AGGREGATE, MATERIALLY ADVERSE TO THE
CONSOLIDATED BUSINESS OR FINANCIAL CONDITION OF THE COMPANY AND ITS SUBSIDIARIES
TAKEN AS A WHOLE.
THERE HAS BEEN NO (I) MATERIAL ADVERSE CHANGE TO THE
BUSINESS, OPERATIONS, PROPERTIES, FINANCIAL CONDITION, OR RESULTS OF OPERATIONS
OF THE COMPANY AND ITS SUBSIDIARIES TAKEN AS A WHOLE SINCE THE DATE OF THE
COMPANY'S MOST RECENT AUDITED FINANCIAL STATEMENTS CONTAINED IN THE DISCLOSURE
DOCUMENTS OR (II) CHANGE BY THE COMPANY IN ITS ACCOUNTING PRINCIPLES, POLICIES
AND METHODS EXCEPT AS REQUIRED BY CHANGES IN GAAP.
3.8.2
THE COMPANY HAS PREPARED IN GOOD FAITH AND DULY AND
TIMELY FILED ALL TAX RETURNS REQUIRED TO BE FILED BY IT AND SUCH RETURNS ARE
COMPLETE AND ACCURATE IN ALL MATERIAL RESPECTS AND THE COMPANY HAS PAID ALL
TAXES REQUIRED TO HAVE BEEN PAID BY IT, EXCEPT FOR TAXES WHICH IT REASONABLY
DISPUTES IN GOOD FAITH OR THE FAILURE OF WHICH TO PAY HAS NOT HAD OR WOULD NOT
REASONABLY BE EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT.
3.8.3
THE COMPANY IS NOT THE SUBJECT OF ANY PENDING OR,
TO THE COMPANY'S KNOWLEDGE, THREATENED INQUIRY, INVESTIGATION OR ADMINISTRATIVE
OR LEGAL PROCEEDING BY THE INTERNAL REVENUE SERVICE, THE TAXING