ACTION OR PROCEEDING BEING
MADE OR BROUGHT, OR TO THE KNOWLEDGE OF THE COMPANY, BEING THREATENED, AGAINST
THE COMPANY OR ITS SUBSIDIARIES REGARDING ITS INTELLECTUAL PROPERTY RIGHTS WHICH
COULD HAVE A MATERIAL ADVERSE EFFECT.
10
(U)
ENVIRONMENTAL LAWS.
THE COMPANY AND ITS
SUBSIDIARIES (I) ARE IN MATERIAL COMPLIANCE WITH ANY AND ALL ENVIRONMENTAL LAWS
(AS HEREINAFTER DEFINED), (II) HAVE RECEIVED ALL MATERIAL PERMITS, LICENSES OR
OTHER APPROVALS REQUIRED OF THEM UNDER APPLICABLE ENVIRONMENTAL LAWS TO CONDUCT
THEIR RESPECTIVE BUSINESSES AND (III) ARE IN MATERIAL COMPLIANCE WITH ALL TERMS
AND CONDITIONS OF ANY SUCH PERMIT, LICENSE OR APPROVAL WHERE, IN EACH OF THE
FOREGOING CLAUSES (I), (II) AND (III), THE FAILURE TO SO COMPLY COULD BE
REASONABLY EXPECTED TO HAVE, INDIVIDUALLY OR IN THE AGGREGATE, A MATERIAL
ADVERSE EFFECT.
THE TERM "ENVIRONMENTAL LAWS" MEANS ALL FEDERAL, STATE, LOCAL
OR FOREIGN LAWS RELATING TO POLLUTION OR PROTECTION OF HUMAN HEALTH OR THE
ENVIRONMENT (INCLUDING, WITHOUT LIMITATION, AMBIENT AIR, SURFACE WATER,
GROUNDWATER, LAND SURFACE OR SUBSURFACE STRATA), INCLUDING, WITHOUT LIMITATION,
LAWS RELATING TO EMISSIONS, DISCHARGES, RELEASES OR THREATENED RELEASES OF
CHEMICALS, POLLUTANTS, CONTAMINANTS, OR TOXIC OR HAZARDOUS SUBSTANCES OR WASTES
(COLLECTIVELY, "HAZARDOUS MATERIALS") INTO THE ENVIRONMENT, OR OTHERWISE
RELATING TO THE MANUFACTURE, PROCESSING, DISTRIBUTION, USE, TREATMENT, STORAGE,
DISPOSAL, TRANSPORT OR HANDLING OF HAZARDOUS MATERIALS, AS WELL AS ALL
AUTHORIZATIONS, CODES, DECREES, DEMANDS OR DEMAND LETTERS, INJUNCTIONS,
JUDGMENTS, LICENSES, NOTICES OR NOTICE LETTERS, ORDERS, PERMITS, PLANS OR
REGULATIONS ISSUED, ENTERED, PROMULGATED OR APPROVED THEREUNDER.
(V)
TAX STATUS.
THE COMPANY AND EACH OF ITS
SUBSIDIARIES (I) HAS MADE OR FILED ALL FEDERAL AND STATE INCOME AND ALL OTHER
TAX RETURNS, REPORTS AND DECLARATIONS REQUIRED BY ANY JURISDICTION IN WHICH SUCH
FILINGS ARE REQUIRED, (II) HAS PAID ALL TAXES AND OTHER GOVERNMENTAL ASSESSMENTS
AND CHARGES THAT ARE OWED BY IT, INCLUDING ALL TAXES SHOWN OR DETERMINED TO BE
DUE ON SUCH RETURNS, REPORTS AND DECLARATIONS, EXCEPT THOSE BEING CONTESTED IN
GOOD FAITH AND FOR WHICH ADEQUATE RESERVES HAVE BEEN ESTABLISHED ON THE
COMPANY'S BOOKS, AND (III) HAS SET ASIDE ON ITS BOOKS PROVISION REASONABLY
ADEQUATE FOR THE PAYMENT OF ALL TAXES FOR PERIODS SUBSEQUENT TO THE PERIODS TO
WHICH SUCH RETURNS, REPORTS OR DECLARATIONS APPLY.
THERE ARE NO UNPAID TAXES IN
ANY MATERIAL AMOUNT CLAIMED TO BE DUE BY THE TAXING AUTHORITY OF ANY
JURISDICTION.
(W)
WARRANT.
THE COMPANY ACKNOWLEDGES AND AGREES
THAT ON OR ABOUT THE DATE OF THIS AGREEMENT, CARLYLE LIQUID HOLDINGS, LLC (THE
"GRANTOR") HAS GRANTED OR WILL GRANT A WARRANT TO PURCHASE SHARES OF COMMON
STOCK (THE "WARRANT") TO THE UNDERSIGNED.
THE COMPANY HEREBY CONFIRMS THAT THE
GRANTOR IS THE RECORD OWNER OF 888,743 SHARES OF THE COMPANY'S SERIES A-2
PREFERRED STOCK, WHICH ARE CONVERTIBLE INTO 20,198,705 SHARES OF THE COMPANY'S
COMMON STOCK.
TO THE BEST OF THE COMPANY'S KNOWLEDGE, THE GRANTOR HAS THE
AUTHORITY TO ENTER INTO THE WARRANT AND PERFORM ITS OBLIGATIONS THEREUNDER AND
THE WARRANT WILL BE ENFORCEABLE AGAINST THE GRANTOR IN ACCORDANCE WITH ITS
TERMS.
THE COMPANY IS NOT AWARE OF ANY RESTRICTION THAT WOULD PREVENT THE