MAY BE INDICATED
IN THE NOTES THERETO OR, IN THE CASE OF INTERIM CONSOLIDATED FINANCIAL
STATEMENTS, WHERE INFORMATION AND FOOTNOTES CONTAINED IN SUCH FINANCIAL
STATEMENTS ARE NOT REQUIRED TO BE IN COMPLIANCE WITH GAAP). SUCH FINANCIAL
STATEMENTS INCLUDED IN THE SEC REPORTS WERE, AT THE TIME THEY WERE FILED,
CONSISTENT WITH THE BOOKS AND RECORDS OF THE COMPANY IN ALL MATERIAL RESPECTS
AND COMPLIED AS TO FORM IN ALL MATERIAL RESPECTS WITH THEN APPLICABLE ACCOUNTING
REQUIREMENTS AND WITH THE RULES AND REGULATIONS OF THE SEC WITH RESPECT THERETO.
THE COMPANY KEEPS ACCOUNTING RECORDS IN WHICH ALL MATERIAL ASSETS AND
LIABILITIES, AND ALL MATERIAL TRANSACTIONS, INCLUDING OFF-BALANCE SHEET
TRANSACTIONS, OF THE COMPANY ARE RECORDED IN ACCORDANCE WITH GAAP.
SECTION 2.06.
GOVERNMENTAL APPROVALS. SUBJECT
TO THE ACCURACY OF THE REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS SET
FORTH IN ARTICLE III, NO REGISTRATION OR FILING WITH, OR CONSENT OR APPROVAL OF
OR OTHER ACTION BY, ANY FEDERAL, STATE OR OTHER GOVERNMENTAL AGENCY OR
INSTRUMENTALITY IS OR WILL BE NECESSARY FOR THE VALID EXECUTION, DELIVERY AND
PERFORMANCE BY THE COMPANY OF THIS AGREEMENT, THE ISSUANCE, SALE AND DELIVERY OF
THE NOTES AND THE WARRANTS, OTHER THAN FILINGS PURSUANT TO STATE SECURITIES LAWS
(ALL OF WHICH FILINGS HAVE BEEN MADE BY THE COMPANY, OTHER THAN THOSE WHICH ARE
REQUIRED OR PERMITTED TO BE MADE AFTER THE CLOSING AND WHICH WILL BE DULY MADE
ON A TIMELY BASIS) IN CONNECTION WITH THE SALE OF THE NOTES AND THE WARRANTS.
8
SECTION 2.07.
OFFERING OF THE NOTES. EXCEPT
FOR THE FILING OF A REGISTRATION STATEMENT ON FORM S-1 WITH THE SEC ON
NOVEMBER 25, 2005 IN CONNECTION WITH A PROPOSED RIGHTS OFFERING, WHICH
REGISTRATION STATEMENT WAS WITHDRAWN AS OF FEBRUARY 3, 2006, NEITHER THE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 IN ANY SECURITY OR
SOLICITED ANY OFFERS TO BUY ANY SECURITY UNDER CIRCUMSTANCES THAT WOULD REQUIRE
REGISTRATION UNDER THE SECURITIES ACT OF THE ISSUANCE OF THE NOTES AND THE
WARRANTS TO THE PURCHASERS. BASED UPON THE POLICY POSITION OF THE SEC, AS
DESCRIBED IN THE SEC STAFF'S NO-ACTION LETTERS DATED JUNE 26, 1990 TO BLACK BOX
INCORPORATED AND FEBRUARY 28, 1992 TO SQUADRON, ELLENOFF, PLEASANT & LEHRER, AND
THE PURCHASERS' REPRESENTATIONS IN ARTICLE III, THE ISSUANCE OF THE NOTES AND
THE WARRANTS TO THE PURCHASERS WILL NOT BE INTEGRATED WITH ANY OTHER ISSUANCE OF
THE COMPANY'S SECURITIES (PAST, CURRENT OR FUTURE) FOR PURPOSES OF THE
SECURITIES ACT.
SECTION 2.08.
MATERIAL CHANGES. EXCEPT AS SET
FORTH IN SCHEDULE IV ATTACHED HERETO, SINCE JUNE 30, 2005, THERE HAS NOT BEEN
(I) ANY DIRECT OR INDIRECT REDEMPTION, PURCHASE OR OTHER ACQUISITION BY THE
COMPANY OF ANY SHARES OF COMMON STOCK; (II) ANY DECLARATION, SETTING ASIDE OR
PAYMENT OF ANY DIVIDEND OR OTHER DISTRIBUTION BY THE COMPANY WITH RESPECT TO THE
COMMON STOCK; (III) ANY MATERIAL LIABILITIES (ABSOLUTE, ACCRUED OR CONTINGENT)
INCURRED OR ASSUMED BY THE COMPANY, OTHER THAN CURRENT LIABILITIES INCURRED