IN WHICH THE OWNERSHIP OF PROPERTY OR THE CONDUCT
OF ITS BUSINESS REQUIRES SUCH LICENSING OR QUALIFICATION, EXCEPT FOR FAILURES TO
BE SO LICENSED OR QUALIFIED WHICH, WHEN TAKEN TOGETHER WITH ALL OTHER SUCH
FAILURES, TO BE SO LICENSED OR QUALIFIED WOULD NOT REASONABLY BE EXPECTED TO
HAVE A MATERIAL ADVERSE EFFECT.
BORROWER HAS MADE AVAILABLE TO LENDER TRUE,
COMPLETE, AND ACCURATE COPIES OF ITS RESPECTIVE FORMATION DOCUMENTS, EACH AS
AMENDED TO, AND AS IN EFFECT ON, THE DATE HEREOF, AND ITS RESPECTIVE
ORGANIZATIONAL DOCUMENTS, MINUTES, CORPORATE RECORDS AND STOCK REGISTER AND
TRANSFER RECORDS.
4.2.
POWER AND AUTHORITY.
BORROWER HAS ALL THE REQUISITE LEGAL AND OTHER POWER
AND AUTHORITY TO EXECUTE AND DELIVER THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS
TO WHICH IT IS A PARTY, TO CONSUMMATE THE TRANSACTIONS CONTEMPLATED HEREBY AND
THEREBY AND TO PERFORM ITS OBLIGATIONS HEREUNDER AND THEREUNDER, INCLUDING THE
ISSUANCE, SALE AND DELIVERY OF THE NOTE AND THE WARRANTS. EACH OF THE LOAN
DOCUMENTS TO WHICH BORROWER IS A PARTY CONSTITUTES A LEGAL, VALID AND BINDING
OBLIGATION OF BORROWER, ENFORCEABLE AGAINST BORROWER, IN ACCORDANCE WITH ITS
TERMS, EXCEPT AS MAY BE LIMITED BY (A) APPLICABLE BANKRUPTCY, INSOLVENCY,
REORGANIZATION, MORATORIUM, OR OTHER SIMILAR LAWS RELATING TO OR AFFECTING THE
ENFORCEMENT OF CREDITORS' RIGHTS GENERALLY AND (B) THE EFFECT OF RULES OF LAW
GOVERNING THE AVAILABILITY OF EQUITABLE REMEDIES.
4.3.
SUBSIDIARIES AND AFFILIATES.
BORROWER DOES NOT OWN OR CONTROL, DIRECTLY
OR INDIRECTLY, ANY EQUITY INTEREST OR INVESTMENT IN ANY CORPORATION,
ASSOCIATION, PARTNERSHIP, JOINT VENTURE, LIMITED LIABILITY COMPANY, OR OTHER
FORM OF BUSINESS OR SIMILAR ENTITY EXCEPT AS SET FORTH ON SCHEDULE 4.3.
4.4.
CAPITALIZATION.
(A)
EXCEPT AS SET FORTH ON SCHEDULE 4.4(A), THE CAPITALIZATION OF
BORROWER IS AS SET FORTH IN ITS MOST RECENT APPLICABLE FILINGS WITH THE SEC.
(B)
EXCEPT AS SET FORTH IN ITS MOST RECENT APPLICABLE FILINGS WITH THE
SEC AND THE WARRANTS, THERE ARE NO OUTSTANDING, ISSUED OR AUTHORIZED OPTIONS,
WARRANTS, PURCHASE AGREEMENTS, PARTICIPATION AGREEMENTS, SUBSCRIPTION RIGHTS,
CONVERSION RIGHTS, EXCHANGE RIGHTS OR OTHER SECURITIES, CONTRACTS, ARRANGEMENTS,
UNDERSTANDINGS OR COMMITMENTS THAT COULD REQUIRE BORROWER TO ISSUE, SELL OR
OTHERWISE CAUSE TO BECOME OUTSTANDING ANY OF THEIR RESPECTIVE AUTHORIZED BUT
UNISSUED SHARES OR ANY SECURITIES CONVERTIBLE INTO, EXCHANGEABLE FOR OR CARRYING
A RIGHT OR OPTION TO PURCHASE ANY SHARE, OR TO
11
CREATE, AUTHORIZE, ISSUE, SELL OR OTHERWISE CAUSE TO BECOME OUTSTANDING ANY NEW
CLASS OF STOCK.
EXCEPT FOR THE WARRANTS AND THIS AGREEMENT, THERE ARE NO
OUTSTANDING STOCKHOLDERS' AGREEMENTS, REGISTRATION RIGHTS AGREEMENTS, OR RIGHTS
OF FIRST REFUSAL PERTAINING TO THE SHARES OF BORROWER. NONE OF THE ISSUED AND
OUTSTANDING SHARES OF COMMON STOCK OF BORROWER HAVE BEEN ISSUED IN VIOLATION OF
ANY RIGHTS OF ANY PERSON OR IN VIOLATION OF THE REGISTRATION REQUIREMENTS OF ANY
APPLICABLE SECURITIES LAW.
(C)
ALL SHARES AND OTHER SECURITIES ISSUED BY BORROWER PRIOR TO THE
DATE HEREOF HAVE BEEN ISSUED IN ACCORDANCE WITH THE REQUIREMENTS OF THE
SECURITIES ACT, OR IN TRANSACTIONS EXEMPT FROM REGISTRATION UNDER THE SECURITIES
ACT, ALL APPLICABLE STATE SECURITIES OR "BLUE SKY" LAWS, AND