THE RESALE OF THE SHARES, AND SHARES OF COMMON STOCK
UNDERLYING THE SHARES AND THE WARRANTS BY EACH SUBSCRIBER OR AT LEAST TWO (2)
YEARS AFTER THE SHARES HAVE BEEN CONVERTED AND THE WARRANTS HAVE BEEN EXERCISED,
THE COMPANY WILL USE REASONABLE EFFORTS TO CONTINUE THE LISTING OR QUOTATION OF
THE COMMON STOCK ON THE PRINCIPAL MARKET AND WILL COMPLY IN ALL RESPECTS WITH
THE COMPANY'S REPORTING, FILING AND OTHER OBLIGATIONS UNDER THE BYLAWS OR RULES
OF THE PRINCIPAL MARKET.
(E)
USE OF PROCEEDS.
THE PURCHASE PRICE WILL BE USED BY THE COMPANY
FOR WORKING CAPITAL AND ACQUISITIONS AND MAY NOT AND WILL NOT BE USED FOR
ACCRUED AND UNPAID OFFICER AND DIRECTOR SALARIES, PAYMENT OF FINANCING RELATED
DEBT, REDEMPTION OF REDEEMABLE NOTES OR EQUITY INSTRUMENTS OF THE COMPANY.
(F)
RESERVATION OF COMMON STOCK.
THE COMPANY UNDERTAKES TO RESERVE
FROM ITS AUTHORIZED BUT UNISSUED COMMON STOCK, AT ALL TIMES THAT SHARES AND
WARRANTS REMAIN OUTSTANDING, A NUMBER OF SHARES OF COMMON STOCK EQUAL TO THE
AMOUNT OF COMMON STOCK ISSUABLE UPON CONVERSION OF THE SHARES AND EXERCISE OF
THE WARRANTS.
(G)
TAXES.
THE COMPANY WILL PROMPTLY PAY AND DISCHARGE, OR CAUSE TO
BE PAID AND DISCHARGED, WHEN DUE AND PAYABLE, ALL LAWFUL TAXES, ASSESSMENTS AND
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GOVERNMENTAL CHARGES OR LEVIES IMPOSED UPON THE INCOME, PROFITS, PROPERTY OR
BUSINESS OF THE COMPANY; PROVIDED, HOWEVER, THAT ANY SUCH TAX, ASSESSMENT,
CHARGE OR LEVY NEED NOT BE PAID IF THE VALIDITY THEREOF SHALL CURRENTLY BE
CONTESTED IN GOOD FAITH BY APPROPRIATE PROCEEDINGS AND IF THE COMPANY SHALL HAVE
SET ASIDE ON ITS BOOKS ADEQUATE RESERVES WITH RESPECT THERETO, AND PROVIDED,
FURTHER, THAT THE COMPANY WILL PAY ALL SUCH TAXES, ASSESSMENTS, CHARGES OR
LEVIES FORTHWITH UPON THE COMMENCEMENT OF PROCEEDINGS TO FORECLOSE ANY LIEN
WHICH MAY HAVE ATTACHED AS SECURITY THEREFORE.
(H)
INSURANCE.
THE COMPANY IS INSURED BY INSURERS OF RECOGNIZED
FINANCIAL RESPONSIBILITY AGAINST SUCH LOSSES AND RISKS AND IN SUCH AMOUNTS AS
ARE PRUDENT AND CUSTOMARY IN THE BUSINESSES IN WHICH THE COMPANY IS ENGAGED.
THE COMPANY HAS NO REASON TO BELIEVE THAT IT WILL NOT BE ABLE TO RENEW ITS
EXISTING INSURANCE COVERAGE AS AND WHEN SUCH COVERAGE EXPIRES OR TO OBTAIN
SIMILAR COVERAGE FROM SIMILAR INSURERS AS MAY BE NECESSARY TO CONTINUE ITS
BUSINESS WITHOUT A SIGNIFICANT INCREASE IN COST.
THE COMPANY WILL KEEP ITS
ASSETS WHICH ARE OF AN INSURABLE CHARACTER INSURED BY FINANCIALLY SOUND AND
REPUTABLE INSURERS AGAINST LOSS OR DAMAGE BY FIRE, EXPLOSION AND OTHER RISKS
CUSTOMARILY INSURED AGAINST BY COMPANIES IN THE COMPANY'S LINE OF BUSINESS, IN
AMOUNTS SUFFICIENT TO PREVENT THE COMPANY FROM BECOMING A CO-INSURER AND NOT IN
ANY EVENT LESS THAN 100% OF THE INSURABLE VALUE OF THE PROPERTY INSURED; AND THE
COMPANY WILL MAINTAIN, WITH FINANCIALLY SOUND AND REPUTABLE INSURERS, INSURANCE
AGAINST OTHER HAZARDS AND RISKS AND LIABILITY TO PERSONS AND PROPERTY TO THE
EXTENT AND IN THE MANNER CUSTOMARY FOR COMPANIES IN SIMILAR BUSINESSES SIMILARLY
SITUATED AND TO THE EXTENT AVAILABLE ON COMMERCIALLY REASONABLE TERMS.
(I)
BOOKS AND RECORDS.
THE COMPANY