OF THE COMPANY, (II) ANY DIRECTOR, OFFICER OR SIMILAR
REPRESENTATIVE OF THE COMPANY, (III) ANY NATURAL PERSON RELATED BY BLOOD,
ADOPTION OR MARRIAGE TO ANY PARTY DESCRIBED IN (I) OR (II), OR (IV) ANY ENTITY
IN WHICH ANY OF THE FOREGOING PARTIES HAS, DIRECTLY OR INDIRECTLY, AT LEAST A
FIVE PERCENT (5%) BENEFICIAL INTEREST (A "RELATED PARTY").
WITHOUT LIMITING THE
GENERALITY OF THE FOREGOING, NO RELATED PARTY, DIRECTLY OR INDIRECTLY, OWNS OR
CONTROLS ANY MATERIAL ASSETS OR MATERIAL PROPERTIES WHICH ARE USED IN THE
COMPANY'S BUSINESS AND TO THE ACTUAL KNOWLEDGE OF THE COMPANY, NO RELATED PARTY,
DIRECTLY OR INDIRECTLY, ENGAGES IN OR HAS ANY SIGNIFICANT INTEREST IN OR
CONNECTION WITH ANY BUSINESS WHICH IS, OR HAS BEEN WITHIN THE LAST TWO YEARS, A
COMPETITOR, CUSTOMER OR SUPPLIER OF THE COMPANY OR HAS DONE BUSINESS WITH THE
COMPANY OR WHICH CURRENTLY SELLS OR PROVIDES PRODUCTS OR SERVICES WHICH ARE
SIMILAR OR RELATED TO THE PRODUCTS OR SERVICES SOLD OR PROVIDED IN CONNECTION
WITH THE BUSINESS.
2.18
BROKERS.
THE COMPANY WILL PAY A PLACEMENT FEE OF
UP TO 7% OF THE GROSS PROCEEDS FROM THE SALE OF THE SHARES TO INVESTORS AND
ISSUE WARRANTS TO PURCHASE 100,000 SHARES TO MORGAN KEEGAN & COMPANY, INC. (THE
"PLACEMENT AGENT").
EXCEPT FOR SUCH PAYMENTS THE COMPANY HAS NOT AGREED TO PAY
OR INCURRED ANY OBLIGATION IN RESPECT OF ANY FINDER'S FEE, BROKERAGE FEE OR
OTHER COMMISSION IN CONNECTION WITH THE SALE OF SHARES CONTEMPLATED BY THIS
AGREEMENT.
2.19
SECURITIES LAW MATTERS.
SINCE SEPTEMBER 10,
2004, AND TO THE BEST OF ITS KNOWLEDGE FROM JANUARY 1, 2004 UNTIL SEPTEMBER 9,
2004, THE COMPANY HAS FILED ALL REPORTS, REGISTRATION STATEMENTS, PROXY
STATEMENTS AND OTHER MATERIALS, TOGETHER WITH ANY AMENDMENTS REQUIRED TO BE MADE
WITH RESPECT THERETO, THAT WERE REQUIRED TO BE FILED WITH (I) THE SEC UNDER THE
SECURITIES ACT, OR THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED (THE
"EXCHANGE ACT"),
8
AND (II) ANY APPLICABLE STATE SECURITIES AUTHORITIES.
NO SUCH FILING, AS OF THE
DATE IT WAS FILED, AND AS OF THE DATE HEREOF AND AS OF THE CLOSING DATE,
CONTAINED OR WILL CONTAIN ANY UNTRUE STATEMENT OF A MATERIAL FACT OR OMITTED TO
STATE A MATERIAL FACT NECESSARY IN ORDER TO MAKE THE STATEMENTS THEREIN, IN
LIGHT OF THE CIRCUMSTANCES UNDER WHICH THEY WERE MADE, NOT MISLEADING.
SUBJECT
TO THE ACCURACY OF THE REPRESENTATIONS AND WARRANTIES OF THE INVESTORS SET FORTH
IN SECTION 3, THE OFFER, SALE AND ISSUANCE OF THE SHARES TO THE INVESTORS WILL
BE EXEMPT FROM REGISTRATION UNDER THE SECURITIES ACT.
2.20
NO ANTI-DILUTION RIGHTS.
EXCEPT AS SET FORTH ON
SCHEDULE 2.20, THE TRANSACTIONS CONTEMPLATED HEREBY WILL NOT TRIGGER ANY
ANTI-DILUTION PROVISIONS CONTAINED IN ANY EXISTING AGREEMENTS.
2.21
FULL DISCLOSURE.
NO REPRESENTATION, WARRANTY,
SCHEDULE OR CERTIFICATE OF THE COMPANY MADE OR DELIVERED PURSUANT TO THIS
AGREEMENT OR IN THE PRIVATE PLACEMENT MEMORANDUM CONTAINS OR WILL CONTAIN ANY
UNTRUE STATEMENT OF FACT, OR OMITS OR WILL OMIT TO STATE A MATERIAL FACT THE
ABSENCE OF WHICH MAKES SUCH REPRESENTATION, WARRANTY