OWNS OR LEASES PROPERTY OR TRANSACTS BUSINESS AND WHERE
THE FAILURE TO BE SO QUALIFIED WOULD HAVE A MATERIAL ADVERSE EFFECT UPON THE
COMPANY OR THE BUSINESS, FINANCIAL CONDITION, PROPERTIES, OPERATIONS OR ASSETS
OF THE COMPANY OR THE COMPANY'S ABILITY TO PERFORM ITS OBLIGATIONS UNDER THE
AGREEMENTS IN ALL MATERIAL RESPECTS ("MATERIAL ADVERSE EFFECT").
THE COMPANY
HAS NO "SUBSIDIARIES" (AS DEFINED IN RULE 405 UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT")).
THE COMPANY DOES NOT OWN ANY REAL
PROPERTY.
TO THE COMPANY'S KNOWLEDGE, THE COMPANY IS IN POSSESSION OF AND
OPERATING IN MATERIAL COMPLIANCE WITH ALL AUTHORIZATIONS, LICENSES,
CERTIFICATES, CONSENTS, ORDERS AND PERMITS FROM STATE, FEDERAL AND OTHER
REGULATORY AUTHORITIES THAT ARE MATERIAL TO THE CONDUCT OF ITS BUSINESS, ALL OF
WHICH ARE VALID AND IN FULL FORCE AND EFFECT.
THE COMPANY HAS GOOD AND
MARKETABLE TITLE IN FEE SIMPLE TO, OR HAS VALID RIGHTS TO LEASE OR OTHERWISE
USE, ALL ITEMS OF REAL AND PERSONAL PROPERTY THAT ARE MATERIAL TO THE BUSINESS
OF THE COMPANY FREE AND CLEAR OF ALL LIENS, ENCUMBRANCES, CLAIMS AND DEFECTS AND
IMPERFECTIONS OF TITLE EXCEPT THOSE THAT (I) DO NOT MATERIALLY INTERFERE WITH
THE USE OF SUCH PROPERTY BY THE COMPANY OR (II) WOULD NOT REASONABLY BE EXPECTED
TO HAVE A MATERIAL ADVERSE EFFECT.
3.2
DUE AUTHORIZATION.
THE COMPANY HAS THE
REQUISITE POWER AND AUTHORITY TO EXECUTE, DELIVER AND PERFORM ITS OBLIGATIONS
UNDER THE AGREEMENT AND THE WARRANTS (TOGETHER, THE "TRANSACTION DOCUMENTS").
THE EXECUTION AND DELIVERY OF THE TRANSACTION DOCUMENTS, AND THE CONSUMMATION BY
THE COMPANY OF THE TRANSACTIONS CONTEMPLATED HEREBY, HAVE BEEN DULY AUTHORIZED
BY ALL NECESSARY CORPORATE ACTION AND NO FURTHER ACTION ON THE PART OF THE
COMPANY OR ITS BOARD OF DIRECTORS OR STOCKHOLDERS IS REQUIRED.
THE TRANSACTION
DOCUMENTS HAVE BEEN (OR
3
UPON DELIVERY WILL HAVE BEEN) VALIDLY EXECUTED AND DELIVERED BY THE COMPANY AND
CONSTITUTE LEGAL, VALID AND BINDING AGREEMENTS OF THE COMPANY ENFORCEABLE
AGAINST THE COMPANY IN ACCORDANCE WITH THEIR TERMS, EXCEPT TO THE EXTENT
(I) RIGHTS TO INDEMNITY AND CONTRIBUTION MAY BE LIMITED BY STATE OR FEDERAL
SECURITIES LAWS OR THE PUBLIC POLICY UNDERLYING SUCH LAWS, (II) SUCH
ENFORCEABILITY MAY BE LIMITED BY APPLICABLE BANKRUPTCY, INSOLVENCY,
REORGANIZATION, MORATORIUM OR SIMILAR LAWS AFFECTING CREDITORS' AND CONTRACTING
PARTIES' RIGHTS GENERALLY AND (III) SUCH ENFORCEABILITY MAY BE SUBJECT TO
GENERAL PRINCIPLES OF EQUITY (REGARDLESS OF WHETHER SUCH ENFORCEABILITY IS
CONSIDERED IN A PROCEEDING IN EQUITY OR AT LAW).
3.3
NON-CONTRAVENTION.
THE EXECUTION AND DELIVERY
OF THE TRANSACTION DOCUMENTS, THE ISSUANCE AND SALE OF THE SECURITIES TO BE SOLD
BY THE COMPANY UNDER THE TRANSACTION DOCUMENTS, AND THE ISSUANCE OF THE WARRANT
SHARES UPON THE EXERCISE OF THE WARRANT, AND THE FULFILLMENT OF THE TERMS OF THE
TRANSACTION DOCUMENTS AND THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED
THEREBY WILL NOT (A) RESULT IN CONFLICT WITH OR CONSTITUTE A VIOLATION OF, OR
DEFAULT (WITH THE PASSAGE OF TIME OR OTHERWISE) UNDER, RESULT IN THE
ACCELERATION OF, OR CREATE IN ANY PARTY THE RIGHT TO ACCELERATE, TERMINATE,
MODIFY OR