COMPANY HAS
AUTHORIZED AND HAS RESERVED AND COVENANTS TO CONTINUE TO RESERVE, FREE OF
PREEMPTIVE RIGHTS AND OTHER SIMILAR CONTRACTUAL RIGHTS OF STOCKHOLDERS, A NUMBER
OF ITS AUTHORIZED BUT UNISSUED SHARES OF COMMON STOCK EQUAL TO THE AGGREGATE
NUMBER OF SHARES OF COMMON STOCK TO EFFECT THE CONVERSION OF THE NOTES AND ANY
INTEREST ACCRUED AND OUTSTANDING THEREON AND EXERCISE OF THE WARRANTS.
ANY
SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION OF THE NOTES AND ANY INTEREST
ACCRUED AND OUTSTANDING THEREON AND EXERCISE OF THE WARRANTS (AND SUCH SHARES
WHEN ISSUED) ARE HEREIN REFERRED TO AS THE "CONVERSION SHARES" AND THE "WARRANT
SHARES," RESPECTIVELY.
THE NOTES, THE WARRANTS, THE CONVERSION SHARES 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.
THE
COMPANY HEREBY REPRESENTS AND WARRANTS TO THE PURCHASERS, AS OF THE DATE HEREOF
AND THE CLOSING DATE (EXCEPT AS SET FORTH ON THE SCHEDULE OF EXCEPTIONS ATTACHED
HERETO WITH EACH NUMBERED SCHEDULE CORRESPONDING TO THE SECTION NUMBER HEREIN),
AS FOLLOWS:
(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.
THE COMPANY DOES NOT HAVE ANY SUBSIDIARIES (AS DEFINED IN
SECTION 2.1(G)) OR OWN SECURITIES OF ANY KIND IN ANY OTHER ENTITY EXCEPT AS SET
FORTH ON SCHEDULE 2.1(G) HERETO.
THE COMPANY AND EACH SUCH SUBSIDIARY (AS
DEFINED IN SECTION 2.1(G)) 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 EFFECT ON THE
BUSINESS (INCLUDING A MATERIAL CHANGE IN MANAGEMENT), RESULTS OF OPERATIONS,
PROSPECTS, PROPERTIES, ASSETS OR CONDITION (FINANCIAL OR OTHERWISE) OF THE
COMPANY THAT IS MATERIAL AND ADVERSE TO THE COMPANY AND ITS SUBSIDIARIES, TAKEN
AS A WHOLE, AND/OR ANY CONDITION, CIRCUMSTANCE, FACTOR OR SITUATION (INCLUDING,
WITHOUT LIMITATION, AN INVESTIGATION BY THE SECURITIES AND EXCHANGE COMMISSION
(THE "COMMISSION")) THAT WOULD PROHIBIT OR OTHERWISE MATERIALLY INTERFERE WITH
THE ABILITY OF THE COMPANY FROM
2
ENTERING INTO AND PERFORMING ANY OF ITS OBLIGATIONS UNDER THE TRANSACTION
DOCUMENTS (AS DEFINED BELOW) IN ANY MATERIAL RESPECT.
(B)
AUTHORIZATION; ENFORCEMENT.
THE COMPANY HAS THE REQUISITE
CORPORATE POWER AND AUTHORITY TO ENTER INTO AND PERFORM THIS AGREEMENT, THE
NOTES, THE WARRANTS, THE REGISTRATION RIGHTS AGREEMENT BY AND AMONG THE COMPANY
AND THE PURCHASERS, DATED AS OF THE DATE HEREOF, SUBSTANTIALLY IN THE FORM OF
EXHIBIT D ATTACHED HERETO (THE "REGISTRATION RIGHTS AGREEMENT") AND THE
IRREVOCABLE TRANSFER AGENT INSTRUCTIONS
(AS DEFINED IN SECTION