ISSUANCE AND SALE OF THE SHARES AND THE WARRANTS HEREUNDER.
NEITHER
THE COMPANY NOR ANYONE ACTING ON ITS BEHALF, DIRECTLY OR INDIRECTLY, HAS OR WILL
SELL, OFFER TO SELL OR SOLICIT OFFERS TO BUY ANY OF THE SHARES OR SIMILAR
SECURITIES TO, OR SOLICIT OFFERS WITH RESPECT THERETO FROM, OR ENTER INTO ANY
PRELIMINARY CONVERSATIONS OR NEGOTIATIONS RELATING THERETO WITH, ANY PERSON, OR
HAS TAKEN OR WILL TAKE ANY ACTION SO AS TO BRING THE ISSUANCE AND SALE OF ANY OF
THE SHARES AND THE WARRANTS UNDER THE REGISTRATION PROVISIONS OF THE SECURITIES
ACT AND APPLICABLE STATE SECURITIES LAWS, AND NEITHER THE COMPANY NOR ANY OF ITS
AFFILIATES, NOR ANY PERSON ACTING ON ITS OR THEIR BEHALF, HAS ENGAGED IN ANY
FORM OF GENERAL SOLICITATION OR GENERAL ADVERTISING (WITHIN THE MEANING OF
REGULATION D UNDER THE SECURITIES ACT) IN CONNECTION WITH THE OFFER OR SALE OF
ANY OF THE SHARES AND THE WARRANTS.
9
(X)
GOVERNMENTAL APPROVALS.
EXCEPT FOR THE FILING OF ANY NOTICE
PRIOR OR SUBSEQUENT TO THE CLOSING DATE THAT MAY BE REQUIRED UNDER APPLICABLE
STATE AND/OR FEDERAL SECURITIES LAWS (WHICH IF REQUIRED, SHALL BE FILED ON A
TIMELY BASIS), INCLUDING THE FILING OF A FORM D AND A REGISTRATION STATEMENT OR
STATEMENTS PURSUANT TO THE REGISTRATION RIGHTS AGREEMENT, AND THE FILING OF THE
CERTIFICATE OF DESIGNATION WITH THE SECRETARY OF STATE FOR THE STATE OF NEVADA,
NO AUTHORIZATION, CONSENT, APPROVAL, LICENSE, EXEMPTION OF, FILING OR
REGISTRATION WITH ANY COURT OR GOVERNMENTAL DEPARTMENT, COMMISSION, BOARD,
BUREAU, AGENCY OR INSTRUMENTALITY, DOMESTIC OR FOREIGN, IS OR WILL BE NECESSARY
FOR, OR IN CONNECTION WITH, THE EXECUTION OR DELIVERY OF THE PREFERRED SHARES
AND THE WARRANTS, OR FOR THE PERFORMANCE BY THE COMPANY OF ITS OBLIGATIONS UNDER
THE TRANSACTION DOCUMENTS.
(Y)
EMPLOYEES.
NEITHER THE COMPANY NOR ANY SUBSIDIARY HAS ANY
COLLECTIVE BARGAINING ARRANGEMENTS OR AGREEMENTS COVERING ANY OF ITS EMPLOYEES.
NEITHER THE COMPANY NOR ANY SUBSIDIARY HAS ANY EMPLOYMENT CONTRACT, AGREEMENT
REGARDING PROPRIETARY INFORMATION, NON-COMPETITION AGREEMENT, NON-SOLICITATION
AGREEMENT, CONFIDENTIALITY AGREEMENT, OR ANY OTHER SIMILAR CONTRACT OR
RESTRICTIVE COVENANT, RELATING TO THE RIGHT OF ANY OFFICER, EMPLOYEE OR
CONSULTANT TO BE EMPLOYED OR ENGAGED BY THE COMPANY OR SUCH SUBSIDIARY.
NO
OFFICER, CONSULTANT OR KEY EMPLOYEE OF THE COMPANY OR ANY SUBSIDIARY WHOSE
TERMINATION, EITHER INDIVIDUALLY OR IN THE AGGREGATE, COULD HAVE A MATERIAL
ADVERSE EFFECT, HAS TERMINATED OR, TO THE KNOWLEDGE OF THE COMPANY, HAS ANY
PRESENT INTENTION OF TERMINATING HIS OR HER EMPLOYMENT OR ENGAGEMENT WITH THE
COMPANY OR ANY SUBSIDIARY.
(Z)
ABSENCE OF CERTAIN DEVELOPMENTS.
SINCE DECEMBER 31, 2006,
NEITHER THE COMPANY NOR ANY SUBSIDIARY HAS:
(I)
ISSUED ANY STOCK, BONDS OR OTHER CORPORATE SECURITIES OR ANY
RIGHTS, OPTIONS OR WARRANTS WITH RESPECT THERETO;
(II)
BORROWED ANY AMOUNT OR INCURRED OR BECOME SUBJECT TO ANY
LIABILITIES (ABSOLUTE OR CONTINGENT) EXCEPT CURRENT LIABILITIES INCURRED IN THE
ORDINARY COURSE OF BUSINESS WHICH ARE COMPARABLE IN NATURE AND AMOUNT TO THE
CURRENT LIABILITIES INCURRED IN THE ORDINARY COURSE OF BUSINESS DURING THE
COMPARABLE PORTION OF ITS PRIOR FISCAL YEAR, AS ADJUSTED