THERETO OR (II) IN THE CASE OF UNAUDITED INTERIM STATEMENTS, TO THE EXTENT
THEY MAY NOT INCLUDE FOOTNOTES OR MAY BE CONDENSED) AND FAIRLY PRESENT IN ALL
MATERIAL RESPECTS THE FINANCIAL CONDITION, THE RESULTS OF OPERATIONS AND THE
CASH FLOWS OF THE COMPANY AND ITS SUBSIDIARIES, ON A CONSOLIDATED BASIS, AS OF,
AND FOR, THE PERIODS PRESENTED IN EACH SUCH SEC REPORT.
THE COMMON STOCK IS LISTED FOR TRADING ON THE NATIONAL ASSOCIATION OF SECURITIES
DEALERS,
INC. OVER THE COUNTER BULLETIN BOARD ("NASD OTCBB") AND SATISFIES ALL
REQUIREMENTS FOR THE CONTINUATION OF SUCH LISTING.
THE COMPANY HAS NOT RECEIVED
ANY NOTICE THAT ITS COMMON STOCK WILL BE DELISTED FROM THE NASD OTCBB OR THAT
THE COMMON STOCK DOES NOT MEET ALL REQUIREMENTS FOR THE CONTINUATION OF SUCH
LISTING.
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 CAUSE THE OFFERING OF THE SECURITIES PURSUANT TO THE SECURITY AGREEMENT TO
BE INTEGRATED WITH PRIOR OFFERINGS BY THE COMPANY FOR PURPOSES OF THE SECURITIES
ACT WHICH WOULD PREVENT THE COMPANY FROM SELLING THE COMMON STOCK PURSUANT TO
RULE 506 UNDER THE SECURITIES ACT, OR ANY APPLICABLE EXCHANGE-RELATED
STOCKHOLDER APPROVAL PROVISIONS, NOR WILL THE COMPANY OR ANY OF ITS AFFILIATES
OR SUBSIDIARIES TAKE ANY ACTION OR STEPS THAT WOULD CAUSE THE OFFERING OF THE
COMMON STOCK TO BE INTEGRATED WITH OTHER OFFERINGS (OTHER THAN SUCH CONCURRENT
OFFERING TO THE PURCHASER).
10EE-7
THE WARRANTS, THE NOTES AND THE SHARES OF COMMON STOCK WHICH THE PURCHASER MAY
ACQUIRE PURSUANT TO THE WARRANTS AND THE NOTES ARE ALL RESTRICTED SECURITIES
UNDER THE SECURITIES ACT AS OF THE DATE OF THIS AGREEMENT.
THE COMPANY WILL NOT
ISSUE ANY STOP TRANSFER ORDER OR OTHER ORDER IMPEDING THE SALE AND DELIVERY OF
ANY OF THE REGISTRABLE SECURITIES AT SUCH TIME AS SUCH REGISTRABLE SECURITIES
ARE REGISTERED FOR PUBLIC SALE OR AN EXEMPTION FROM REGISTRATION IS AVAILABLE,
EXCEPT AS REQUIRED BY FEDERAL OR STATE SECURITIES LAWS.
THE COMPANY UNDERSTANDS THE NATURE OF THE REGISTRABLE SECURITIES ISSUABLE UPON
THE CONVERSION OF EACH NOTE AND THE EXERCISE OF EACH WARRANT AND RECOGNIZES THAT
THE ISSUANCE OF SUCH REGISTRABLE SECURITIES MAY HAVE A POTENTIAL DILUTIVE
EFFECT.
THE COMPANY SPECIFICALLY ACKNOWLEDGES THAT ITS OBLIGATION TO ISSUE THE
REGISTRABLE SECURITIES 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.
EXCEPT FOR AGREEMENTS MADE IN THE ORDINARY COURSE OF BUSINESS, THERE IS NO
AGREEMENT THAT HAS NOT BEEN FILED WITH THE COMMISSION AS AN EXHIBIT TO A
REGISTRATION STATEMENT OR TO A FORM REQUIRED TO BE FILED BY THE COMPANY UNDER
THE EXCHANGE ACT, THE BREACH OF WHICH COULD REASONABLY BE EXPECTED TO HAVE A
MATERIAL AND ADVERSE EFFECT ON THE COMPANY AND ITS SUBSIDIARIES, OR WOULD
PROHIBIT OR OTHERWISE INTERFERE WITH THE ABILITY OF THE COMPANY