SUBSIDIARIES HAS THE CORPORATE, LIMITED LIABILITY COMPANY OR
PARTNERSHIP, AS THE
CASE MAY BE, POWER AND AUTHORITY TO OWN AND OPERATE ITS
PROPERTIES AND ASSETS AND, INSOFAR AS IT IS OR SHALL BE A PARTY THERETO, TO
(I) EXECUTE AND DELIVER THIS AGREEMENT AND THE ANCILLARY AGREEMENTS, (II) TO
ISSUE THE NOTES AND THE SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION OF THE
NOTES (THE "NOTE SHARES"), (III) TO ISSUE THE WARRANTS AND THE SHARES OF COMMON
STOCK ISSUABLE UPON CONVERSION OF THE WARRANTS (THE "WARRANT SHARES"), AND TO
(IV) CARRY OUT THE PROVISIONS OF THIS AGREEMENT AND THE ANCILLARY AGREEMENTS AND
TO CARRY ON ITS BUSINESS AS PRESENTLY CONDUCTED.
IT AND EACH OF ITS
SUBSIDIARIES IS DULY QUALIFIED AND IS AUTHORIZED TO DO BUSINESS AND IS IN GOOD
STANDING AS A FOREIGN CORPORATION, PARTNERSHIP OR LIMITED LIABILITY COMPANY, AS
THE CASE MAY BE, IN ALL JURISDICTIONS IN WHICH THE NATURE OR LOCATION OF ITS
ACTIVITIES AND OF ITS PROPERTIES (BOTH OWNED AND LEASED) MAKES SUCH
QUALIFICATION NECESSARY, EXCEPT FOR THOSE JURISDICTIONS IN WHICH FAILURE TO DO
SO HAS NOT HAD, OR COULD NOT REASONABLY BE EXPECTED TO HAVE, INDIVIDUALLY OR IN
THE AGGREGATE, A MATERIAL ADVERSE EFFECT.
(B)
SUBSIDIARIES.
EACH OF ITS DIRECT AND
INDIRECT SUBSIDIARIES, THE DIRECT OWNER OF EACH SUCH SUBSIDIARY AND ITS
PERCENTAGE OWNERSHIP THEREOF, IS SET FORTH ON SCHEDULE 12(B).
12
(C)
CAPITALIZATION; VOTING RIGHTS.
(I)
THE AUTHORIZED CAPITAL STOCK OF THE
PARENT, AS OF THE DATE HEREOF CONSISTS OF (X) 100,000,000 SHARES OF COMMON
STOCK, PAR VALUE $0.001 PER SHARE OF WHICH THE NUMBER OF SHARES SET FORTH ON
SCHEDULE 12(C) ARE ISSUED AND OUTSTANDING, AND (Y) 25,000,000 ARE SHARES OF
PREFERRED STOCK, PAR VALUE $0.001 PER SHARE OF WHICH NO SHARES ARE ISSUED AND
OUTSTANDING.
THE AUTHORIZED, ISSUED AND OUTSTANDING CAPITAL STOCK OF EACH
SUBSIDIARY OF EACH COMPANY IS SET FORTH ON SCHEDULE 12(C).
(II)
EXCEPT AS DISCLOSED ON SCHEDULE 12(C),
OTHER THAN:
(I) THE SHARES RESERVED FOR ISSUANCE UNDER THE PARENT'S STOCK
OPTION PLANS; AND (II) SHARES WHICH MAY BE ISSUED PURSUANT TO THIS AGREEMENT AND
THE ANCILLARY AGREEMENTS, THERE ARE NO OUTSTANDING OPTIONS, WARRANTS, RIGHTS
(INCLUDING CONVERSION OR PREEMPTIVE RIGHTS AND RIGHTS OF FIRST REFUSAL), PROXY
OR STOCKHOLDER AGREEMENTS, OR ARRANGEMENTS OR AGREEMENTS OF ANY KIND FOR THE
PURCHASE OR ACQUISITION FROM THE PARENT OF ANY OF ITS SECURITIES.
EXCEPT AS
DISCLOSED ON SCHEDULE 12(C), NEITHER THE OFFER OR ISSUANCE OF ANY OF THE NOTES
OR THE WARRANTS, OR THE ISSUANCE OF ANY OF THE NOTE SHARES OR THE WARRANT
SHARES, NOR THE CONSUMMATION OF ANY TRANSACTION CONTEMPLATED HEREBY WILL RESULT
IN A CHANGE IN THE PRICE OR NUMBER OF ANY SECURITIES OF THE PARENT OUTSTANDING,
UNDER ANTI-DILUTION OR OTHER SIMILAR PROVISIONS CONTAINED IN OR AFFECTING ANY
SUCH SECURITIES.
(III)
ALL ISSUED AND OUTSTANDING SHARES OF THE
PARENT'S COMMON STOCK:
(I) HAVE BEEN DULY AUTHORIZED AND VALIDLY ISSUED AND ARE
FULLY PAID AND NONASSESSABLE; AND (II) WERE ISSUED IN COMPLIANCE WITH ALL
APPLICABLE STATE AND FEDERAL LAWS CONCERNING THE ISSUANCE