ISSUE ANY
STOP TRANSFER ORDER OR OTHER ORDER IMPEDING THE SALE AND DELIVERY OF ANY OF THE
SECURITIES AT SUCH TIME AS THE SECURITIES ARE REGISTERED FOR PUBLIC SALE,
WHETHER AS A RESULT OF THE REGISTRATION RIGHTS AGREEMENT OR OTHERWISE, OR AN
EXEMPTION FROM REGISTRATION IS AVAILABLE, EXCEPT AS REQUIRED BY FEDERAL
SECURITIES LAWS.
2.26
DILUTION.
THE COMPANY UNDERSTANDS THE NATURE OF THE
SECURITIES BEING SOLD HEREBY AND RECOGNIZES THAT THEY MAY HAVE A POTENTIAL
DILUTIVE EFFECT.
THE COMPANY SPECIFICALLY ACKNOWLEDGES THAT ITS OBLIGATION TO
ISSUE THE SHARES OF COMMON STOCK UPON CONVERSION OF THE NOTE AND EXERCISE OF THE
WARRANT IS BINDING UPON THE COMPANY AND ENFORCEABLE REGARDLESS OF THE DILUTION
SUCH ISSUANCE MAY HAVE ON THE OWNERSHIP INTERESTS OF OTHER SHAREHOLDERS OF THE
COMPANY.
2.27
MATERIAL AGREEMENTS.
THERE IS NO AGREEMENT THAT HAS
NOT BEEN FILED WITH THE SEC AS AN EXHIBIT TO A REGISTRATION STATEMENT OR OTHER
APPLICABLE FORM THE BREACH OF WHICH COULD HAVE A MATERIAL ADVERSE EFFECT AS TO
THE COMPANY AND ITS SUBSIDIARIES, OR WOULD PROHIBIT OR OTHERWISE INTERFERE WITH
THE ABILITY OF THE COMPANY TO ENTER INTO AND PERFORM AND OF ITS OBLIGATIONS
UNDER THIS AGREEMENT IN ANY MATERIAL RESPECT.
2.28
ERISA.
BASED UPON THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974 ("ERISA"), AND THE REGULATIONS AND PUBLISHED
INTERPRETATIONS THEREUNDER: (I) THE COMPANY HAS NOT ENGAGED IN ANY PROHIBITED
TRANSACTIONS AS DEFINED IN SECTION 406 OF ERISA AND SECTION 4975 OF THE INTERNAL
REVENUE CODE, AS AMENDED; (II) THE COMPANY HAS MET ALL APPLICABLE MINIMUM
FUNDING REQUIREMENTS UNDER SECTION 302 OF ERISA IN RESPECT OF ITS PLANS; (III)
THE COMPANY DOES NOT HAVE ANY KNOWLEDGE OF ANY EVENT OR OCCURRENCE WHICH WOULD
CAUSE THE PENSION BENEFIT GUARANTY CORPORATION TO INSTITUTE PROCEEDINGS UNDER
TITLE IV OF ERISA TO TERMINATE ANY EMPLOYEE BENEFIT PLAN(S); (IV) THE COMPANY
DOES NOT HAVE ANY FIDUCIARY RESPONSIBILITY FOR INVESTMENTS WITH RESPECT TO ANY
PLAN EXISTING FOR THE BENEFIT OF PERSONS OTHER THAN COMPANIES' EMPLOYEES; AND
(V) THE COMPANY HAS NOT WITHDRAWN, COMPLETELY OR PARTIALLY, FROM ANY
MULTI-EMPLOYER PENSION PLAN SO AS TO INCUR LIABILITY UNDER THE MULTIEMPLOYER
PENSION PLAN AMENDMENTS ACT OF 1980.
11
2.29
SOLVENCY.
THE COMPANY IS SOLVENT, ABLE TO PAY ITS
DEBTS AS THEY MATURE, HAS CAPITAL SUFFICIENT TO CARRY ON ITS BUSINESS AND ALL
BUSINESSES IN WHICH SUCH COMPANY IS ABOUT TO ENGAGE AND THE FAIR SALEABLE VALUE
OF ITS ASSETS (CALCULATED ON A GOING CONCERN BASIS) IS IN EXCESS OF THE AMOUNT
OF ITS LIABILITIES.
3.
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER.
The Purchaser hereby represents and warrants to the Company as follows:
3.1
REQUISITE POWER AND AUTHORITY.
THE PURCHASER
HAS ALL NECESSARY POWER AND AUTHORITY UNDER ALL APPLICABLE PROVISIONS OF LAW TO
EXECUTE AND DELIVER THIS AGREEMENT AND THE TRANSACTION DOCUMENTS AND TO CARRY
OUT THEIR PROVISIONS.
ALL CORPORATE ACTION ON PURCHASER'S PART REQUIRED FOR THE
LAWFUL EXECUTION AND DELIVERY OF THIS AGREEMENT AND THE TRANSACTION DOCUMENTS
HAVE BEEN OR WILL BE EFFECTIVELY TAKEN PRIOR TO THE CLOSING.
UPON THEIR
EXECUTION AND