"ACT"), OR UNDER APPLICABLE STATE
SECURITIES LAWS, AND MAY NOT BE SOLD, ASSIGNED, PLEDGED OR OTHERWISE TRANSFERRED
EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION UNDER THE ACT OR IN A TRANSACTION
WHICH QUALIFIES AS AN EXEMPT TRANSACTION UNDER THE ACT, THE RULES AND
REGULATIONS PROMULGATED THEREUNDER AND THE SECURITIES LAW OF ANY APPLICABLE
STATE."
6.2.
LEGEND REMOVAL.
IF ANY RESTRICTED SECURITIES
BECOME ELIGIBLE FOR SALE PURSUANT TO RULE 144(K), THE COMPANY SHALL, UPON THE
REQUEST OF THE HOLDER OF SUCH RESTRICTED SECURITIES, REMOVE THE LEGEND SET FORTH
IN SECTION 6.1 FROM THE CERTIFICATES FOR SUCH RESTRICTED SECURITIES.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
As an inducement to the Investor to enter into this Agreement and to the
purchase of the Series A Preferred Shares, and except as set forth on the
Disclosure Schedule attached hereto (the disclosures in any Schedule of the
Disclosure Schedule shall qualify other Schedules only to the extent it its
reasonably clear from a reading of the disclosure that such disclosure is
applicable to such other Schedules), the Company hereby represents and warrants
to the Investor and agrees as follows:
15
7.1.
ORGANIZATION, QUALIFICATIONS AND CORPORATE
POWER.
(A)
THE COMPANY IS A CORPORATION DULY INCORPORATED, VALIDLY EXISTING
AND IN GOOD STANDING UNDER THE LAWS OF THE STATE OF DELAWARE.
THE COMPANY HAS
FULL LEGAL AND CORPORATE POWER AND AUTHORITY TO OWN OR LEASE AND TO OPERATE AND
USE ITS PROPERTIES AND ASSETS AND TO CARRY ON ITS BUSINESS AS NOW CONDUCTED.
THE COMPANY IS DULY QUALIFIED OR LICENSED TO TRANSACT BUSINESS AS A FOREIGN
CORPORATION AND IS IN GOOD STANDING IN EACH OF THE JURISDICTIONS IN WHICH THE
OWNERSHIP OR LEASING OF ITS ASSETS OR THE CONDUCT OF ITS BUSINESS REQUIRES SUCH
QUALIFICATION OR LICENSING, EXCEPT WHERE THE FAILURE TO BE SO QUALIFIED OR
LICENSED OR IN GOOD STANDING, WOULD NOT, INDIVIDUALLY OR IN THE AGGREGATE, HAVE
A MATERIAL ADVERSE EFFECT.
(B)
THE COMPANY HAS FULL LEGAL AND CORPORATE
POWER AND AUTHORITY (I) TO EXECUTE, DELIVER AND PERFORM EACH OF THIS AGREEMENT,
THE REGISTRATION RIGHTS AGREEMENT AND THE WARRANT, (II) TO ISSUE, SELL AND
DELIVER THE SERIES A PREFERRED SHARES AND THE CONVERSION COMMON SHARES, (III) TO
CARRY OUT FULLY AND PERFORM ITS OBLIGATIONS UNDER THE TERMS HEREOF AND THEREOF,
AND (IV) TO FILE THE CERTIFICATE OF DESIGNATION WITH THE SECRETARY OF STATE OF
THE STATE OF DELAWARE.
(C)
THE COMPANY IS IN COMPLIANCE IN ALL
MATERIAL RESPECTS WITH ALL OF THE TERMS AND PROVISIONS OF ITS CERTIFICATE OF
INCORPORATION AND BY-LAWS.
7.2.
AUTHORIZATION; NO CONFLICTS.
(A)
THE
EXECUTION, DELIVERY AND PERFORMANCE BY THE COMPANY OF EACH OF THIS AGREEMENT,
THE REGISTRATION RIGHTS AGREEMENT AND THE WARRANT, THE FILING OF THE CERTIFICATE
OF DESIGNATION WITH THE SECRETARY OF STATE OF THE STATE OF DELAWARE, AND THE
ISSUANCE, SALE AND DELIVERY OF THE SERIES A PREFERRED SHARES AND THE CONVERSION
COMMON SHARES (I) HAVE BEEN DULY AUTHORIZED AND APPROVED BY ALL REQUISITE ACTION
ON THE PART OF THE COMPANY AND THE BOARD OF DIRECTORS (INCLUDING