OF THE ISSUANCE OF THE REPLACEMENT NOTES (THE
"CLOSING") SHALL BE HELD AT THE OFFICES OF TROY & GOULD IN LOS ANGELES,
CALIFORNIA, OR AT SUCH OTHER LOCATION AS SHALL BE AGREED UPON BY THE PARTIES
HERETO ON OR BEFORE JUNE 5, 2006. AT THE CLOSING, THE COMPANY SHALL DELIVER THE
REPLACEMENT NOTES TO PURCHASER, AND PAY TO PURCHASER THE PREPAYMENT AMOUNT AND
PURCHASER SHALL RETURN TO THE COMPANY THE SECOND RESTATED NOTE. THE DATE OF THE
CLOSING IS REFERRED TO HEREIN AS THE CLOSING DATE.
2.
PURCHASER'S REPRESENTATIONS AND
WARRANTIES.
Purchaser understands, agrees with, and represents and warrants to the Company
with respect to the purchase hereunder that:
(A)
INVESTMENT PURPOSES; COMPLIANCE WITH SECURITIES ACT. PURCHASER IS
ACQUIRING THE REPLACEMENT NOTES FOR PURCHASER'S OWN ACCOUNT, FOR INVESTMENT ONLY
AND NOT WITH A VIEW TOWARDS, OR IN CONNECTION WITH, THE PUBLIC SALE OR
DISTRIBUTION THEREOF, EXCEPT PURSUANT TO SALES REGISTERED UNDER OR EXEMPT FROM
THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT").
(B)
ACCREDITED PURCHASER STATUS. PURCHASER IS AN "ACCREDITED
PURCHASER" AS THAT TERM IS DEFINED IN RULE 501(A) OF REGULATION D. PURCHASER IS
A SOPHISTICATED PURCHASER AND HAS SUCH KNOWLEDGE AND EXPERIENCE IN FINANCIAL AND
BUSINESS MATTERS THAT THE PURCHASER IS CAPABLE OF EVALUATING THE MERITS AND
RISKS OF AN INVESTMENT MADE PURSUANT TO THIS AGREEMENT.
(C)
RELIANCE ON EXEMPTIONS. PURCHASER UNDERSTANDS THE REPLACEMENT
NOTES ARE BEING OFFERED AND SOLD TO IN RELIANCE ON SPECIFIC EXEMPTIONS FROM THE
REGISTRATION REQUIREMENTS OF THE APPLICABLE UNITED STATES FEDERAL AND STATE
SECURITIES LAWS AND THAT THE COMPANY IS RELYING UPON THE TRUTH AND ACCURACY OF,
AND PURCHASER'S COMPLIANCE WITH, THE REPRESENTATIONS, WARRANTIES,
ACKNOWLEDGMENTS, UNDERSTANDINGS, AGREEMENTS AND COVENANTS OF THE PURCHASER SET
FORTH HEREIN IN ORDER TO DETERMINE THE AVAILABILITY OF SUCH EXEMPTIONS AND THE
ELIGIBILITY OF PURCHASER TO ACQUIRE THE REPLACEMENT NOTES.
(D)
INFORMATION. PURCHASER AND THE ADVISORS OF THE PURCHASER, IF ANY,
HAVE BEEN FURNISHED WITH ALL MATERIAL INFORMATION RELATING TO THE BUSINESS,
FINANCES AND OPERATIONS OF THE COMPANY AND MATERIAL INFORMATION RELATING TO THE
OFFER AND SALE OF THE REPLACEMENT NOTES THAT HAVE BEEN REQUESTED BY THE
PURCHASER. PURCHASER AND PURCHASER'S ADVISORS, IF ANY, HAVE BEEN AFFORDED THE
OPPORTUNITY TO ASK ALL SUCH QUESTIONS OF THE COMPANY AS THEY HAVE IN THEIR
DISCRETION DEEMED ADVISABLE.
(E)
TRANSFER OR RESALE. PURCHASER UNDERSTANDS THAT:
(I)
THE NOTE
SHARES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OR ANY STATE SECURITIES
LAWS, AND MAY NOT BE OFFERED FOR SALE, SOLD, ASSIGNED OR TRANSFERRED UNLESS
EITHER (A) SUBSEQUENTLY REGISTERED THEREUNDER OR (B) PURCHASER SHALL HAVE
DELIVERED TO THE COMPANY AN OPINION BY COUNSEL REASONABLY SATISFACTORY TO THE
COMPANY, IN FORM, SCOPE AND SUBSTANCE REASONABLY SATISFACTORY TO THE COMPANY, TO
THE EFFECT THAT THE NOTE SHARES TO BE SOLD, ASSIGNED OR TRANSFERRED MAY BE SOLD,
ASSIGNED OR TRANSFERRED PURSUANT TO AN EXEMPTION FROM SUCH REGISTRATION, AND
(II) EXCEPT AS EXPRESSLY PROVIDED HEREIN, NEITHER THE COMPANY NOR ANY OTHER
PERSON IS UNDER ANY OBLIGATION TO REGISTER THE NOTE
2
SHARES UNDER THE SECURITIES