NOTICE OR CORRESPONDENCE FROM ANY
ACCOUNTANT IDENTIFYING A MATERIAL WEAKNESS IN ANY PART OF THE SYSTEM OF INTERNAL
ACCOUNTING CONTROLS OF THE COMPANY OR ANY OF ITS SUBSIDIARIES WHICH IS NOT
SPECIFIED IN THE COMPANY'S ANNUAL REPORT ON FORM 10-KSB FOR THE FISCAL YEAR
ENDED DECEMBER 31, 2005.
(DD)
OFF BALANCE SHEET ARRANGEMENTS.
THERE IS NO TRANSACTION,
ARRANGEMENT, OR OTHER RELATIONSHIP BETWEEN THE COMPANY AND AN UNCONSOLIDATED OR
OTHER OFF BALANCE SHEET ENTITY THAT IS REQUIRED TO BE DISCLOSED BY THE COMPANY
IN ITS EXCHANGE ACT FILINGS AND IS NOT SO DISCLOSED OR THAT OTHERWISE WOULD BE
REASONABLY LIKELY TO HAVE A MATERIAL ADVERSE EFFECT.
(EE)
FORM SB-2 ELIGIBILITY.
THE COMPANY IS ELIGIBLE TO REGISTER THE
WARRANT SHARES FOR RESALE BY THE BUYERS USING FORM SB-2 PROMULGATED UNDER THE
1933 ACT.
(FF)
TRANSFER TAXES.
ON THE CLOSING DATE, ALL STOCK TRANSFER OR OTHER
TAXES (OTHER THAN INCOME OR SIMILAR TAXES) WHICH ARE REQUIRED TO BE PAID IN
CONNECTION WITH THE SALE AND TRANSFER OF THE SECURITIES TO BE SOLD TO EACH BUYER
HEREUNDER WILL BE, OR WILL HAVE BEEN, FULLY PAID OR PROVIDED FOR BY THE COMPANY,
AND ALL LAWS IMPOSING SUCH TAXES WILL BE OR WILL HAVE BEEN COMPLIED WITH.
(GG)
MANIPULATION OF PRICE.
THE COMPANY HAS NOT, AND TO ITS KNOWLEDGE
NO ONE ACTING ON ITS BEHALF HAS, (I) TAKEN, DIRECTLY OR INDIRECTLY, ANY ACTION
DESIGNED TO CAUSE OR TO RESULT IN THE STABILIZATION OR MANIPULATION OF THE PRICE
OF ANY SECURITY OF THE COMPANY TO FACILITATE THE SALE OR RESALE OF ANY OF THE
SECURITIES, (II) SOLD, BID FOR, PURCHASED, OR PAID ANY COMPENSATION FOR
SOLICITING PURCHASES OF, ANY OF THE SECURITIES, OR (III) PAID OR AGREED TO PAY
TO ANY PERSON ANY COMPENSATION FOR SOLICITING ANOTHER TO PURCHASE ANY OTHER
SECURITIES OF THE COMPANY.
(HH)
ACKNOWLEDGEMENT REGARDING BUYERS' TRADING ACTIVITY.
IT IS
UNDERSTOOD AND ACKNOWLEDGED BY THE COMPANY (I) THAT FOLLOWING THE PUBLIC
DISCLOSURE OF THE TRANSACTIONS CONTEMPLATED BY THE TRANSACTION DOCUMENTS IN
ACCORDANCE WITH THE TERMS HEREOF, NONE OF THE BUYERS HAVE BEEN ASKED TO AGREE,
NOR HAS ANY BUYER AGREED, TO DESIST FROM PURCHASING OR SELLING, LONG AND/OR
SHORT, SECURITIES OF THE COMPANY, OR "DERIVATIVE" SECURITIES BASED ON SECURITIES
ISSUED BY THE COMPANY OR TO HOLD THE SECURITIES FOR ANY SPECIFIED TERM (II) THAT
ANY BUYER, AND COUNTER PARTIES IN "DERIVATIVE" TRANSACTIONS TO WHICH ANY SUCH
BUYER IS A PARTY, DIRECTLY OR INDIRECTLY, WHICH WERE ESTABLISHED PRIOR TO THEIR
LEARNING OF THE TRANSACTIONS CONTEMPLATED BY THE TRANSACTION DOCUMENTS,
PRESENTLY MAY HAVE A "SHORT" POSITION IN THE COMMON STOCK, AND (III) THAT EACH
BUYER SHALL NOT BE DEEMED TO HAVE ANY AFFILIATION WITH OR CONTROL OVER ANY ARM'S
LENGTH COUNTER-PARTY IN ANY "DERIVATIVE" TRANSACTION.
THE COMPANY FURTHER
UNDERSTANDS AND ACKNOWLEDGES THAT, FOLLOWING THE PUBLIC DISCLOSURE OF THE
TRANSACTIONS CONTEMPLATED BY THE
16
TRANSACTION DOCUMENTS IN ACCORDANCE WITH THE TERMS HEREOF, (A) ONE OR MORE
BUYERS MAY ENGAGE IN HEDGING AND/OR TRADING ACTIVITIES AT VARIOUS TIMES DURING
THE PERIOD THAT THE SECURITIES ARE OUTSTANDING, INCLUDING,