NO UNDISCLOSED EVENTS, LIABILITIES, DEVELOPMENTS OR
CIRCUMSTANCES.
EXCEPT FOR THE ISSUANCE OF THE NOTES AND WARRANTS CONTEMPLATED
BY THIS AGREEMENT, NO EVENT, LIABILITY, DEVELOPMENT OR CIRCUMSTANCE HAS OCCURRED
OR EXISTS, OR IS CONTEMPLATED TO OCCUR, WITH RESPECT TO THE COMPANY OR ITS
SUBSIDIARIES OR THEIR RESPECTIVE BUSINESS, PROPERTIES, CREDIT WORTHINESS,
PROSPECTS, OPERATIONS OR FINANCIAL CONDITION, THAT WOULD BE REQUIRED TO BE
DISCLOSED BY THE COMPANY UNDER APPLICABLE SECURITIES LAWS AT THE TIME THIS
REPRESENTATION IS MADE ON A REGISTRATION STATEMENT ON FORM SB-2 FILED WITH THE
SEC RELATING TO AN ISSUANCE AND SALE BY THE COMPANY OF COMMON STOCK AND THAT HAS
NOT BEEN DISCLOSED IN AN SEC DOCUMENT FILED WITH THE SEC AT LEAST FIVE (5) DAYS
PRIOR TO THE DATE OF THIS AGREEMENT.
K.
NO GENERAL SOLICITATION.
NEITHER THE COMPANY, NOR ANY OF ITS
AFFILIATES, NOR ANY PERSON ACTING ON ITS OR THEIR BEHALF, HAS ENGAGED OR WILL
ENGAGE IN ANY FORM OF GENERAL SOLICITATION OR GENERAL ADVERTISING (WITHIN THE
MEANING OF REGULATION D UNDER THE 1933 ACT) IN CONNECTION WITH THE OFFER OR SALE
OF THE SECURITIES.
14
L.
NO INTEGRATED OFFERING.
NEITHER THE COMPANY, NOR ANY OF ITS
AFFILIATES, NOR ANY PERSON ACTING ON ITS OR THEIR BEHALF HAS, DIRECTLY OR
INDIRECTLY, MADE ANY OFFERS OR SALES OF ANY SECURITY OR SOLICITED ANY OFFERS TO
BUY ANY SECURITY UNDER CIRCUMSTANCES THAT WOULD REQUIRE REGISTRATION OF ANY OF
THE SECURITIES UNDER THE 1933 ACT OR CAUSE THIS OFFERING OF THE SECURITIES TO BE
INTEGRATED WITH PRIOR OFFERINGS BY THE COMPANY FOR PURPOSES OF THE 1933 ACT OR
ANY APPLICABLE STOCKHOLDER APPROVAL PROVISIONS OF ANY AUTHORITY, NOR WILL THE
COMPANY TAKE ANY ACTION OR STEPS THAT WOULD REQUIRE REGISTRATION OF THE ISSUANCE
OF ANY OF THE SECURITIES UNDER THE 1933 ACT OR CAUSE THE OFFERING OF THE
SECURITIES TO BE INTEGRATED WITH OTHER OFFERINGS FOR PURPOSES OF THE 1933 ACT
OTHER THAN AS CONTEMPLATED IN THE REGISTRATION RIGHTS AGREEMENT.
M.
DILUTIVE EFFECT.
THE COMPANY UNDERSTANDS AND ACKNOWLEDGES THAT
THE NUMBER OF CONVERSION SHARES ISSUABLE UPON CONVERSION OF THE NOTES AND THE
WARRANT SHARES ISSUABLE UPON EXERCISE OF THE WARRANTS WILL INCREASE IN CERTAIN
CIRCUMSTANCES.
THE COMPANY FURTHER ACKNOWLEDGES THAT ANY OBLIGATION TO ISSUE
CONVERSION SHARES UPON CONVERSION OF THE NOTES IN ACCORDANCE WITH THIS AGREEMENT
AND THE NOTES AND ITS OBLIGATION TO ISSUE THE WARRANT SHARES UPON EXERCISE OF
THE WARRANTS IN ACCORDANCE WITH THIS AGREEMENT AND THE WARRANTS IS, IN EACH
CASE, ABSOLUTE AND UNCONDITIONAL REGARDLESS OF THE DILUTIVE EFFECT THAT SUCH
ISSUANCE MAY HAVE ON THE OWNERSHIP INTERESTS OF OTHER STOCKHOLDERS OF THE
COMPANY.
TAKING THE FOREGOING INTO ACCOUNT, THE BOARD OF DIRECTORS HAS
DETERMINED IN ITS GOOD FAITH BUSINESS JUDGMENT THAT THE ISSUANCE OF THE NOTES
AND THE WARRANTS AND THE CONSUMMATION OF THE OTHER TRANSACTIONS CONTEMPLATED
HEREBY ARE IN THE BEST INTERESTS OF THE COMPANY AND ITS STOCKHOLDERS.
N.
EMPLOYEE RELATIONS.
NEITHER THE COMPANY NOR ANY OF ITS
SUBSIDIARIES IS INVOLVED IN ANY LABOR UNION DISPUTE NOR, TO THE KNOWLEDGE OF THE
COMPANY