THE AGGREGATE TO THE COMPANY AND ITS SUBSIDIARIES ON A CONSOLIDATED
BASIS.
5.4.5.
THE INFORMATION WITH RESPECT TO THE COMPANY AND ITS SUBSIDIARIES
CONTAINED IN THE PRIVATE PLACEMENT MEMORANDUM DATED JANUARY, 2007 RELATING TO
$20,000,000 SENIOR UNSECURED SUBORDINATED NOTES (THE "SUBORDINATED NOTES") OF
THE COMPANY DUE 2012 (THE "PLACEMENT MEMORANDUM") WHEN TAKEN AS A WHOLE WITH THE
COMPANY SEC DOCUMENTS DID NOT AS OF THE DATE THEREOF CONTAIN AN UNTRUE STATEMENT
OF MATERIAL FACT OR OMIT TO STATE A MATERIAL FACT NECESSARY IN ORDER TO MAKE THE
STATEMENTS CONTAINED THEREIN NOT MATERIALLY MISLEADING IN LIGHT OF THE
CIRCUMSTANCES UNDER WHICH SUCH STATEMENTS WERE MADE.
THE INFORMATION CONTAINED
IN THE PLACEMENT MEMORANDUM WITH RESPECT TO CITYFOREST CORPORATION WAS PREPARED
IN GOOD FAITH BY THE COMPANY BASED ON INFORMATION OBTAINED FROM CITYFOREST
CORPORATION.
NOTWITHSTANDING THE FOREGOING, NO REPRESENTATION REGARDING
PROJECTIONS OR FORWARD LOOKING STATEMENTS IS BEING MADE IN THIS SECTION 5.4.5
AND THE DISCLAIMERS AND CAUTIONARY STATEMENTS WITH RESPECT THERETO SET FORTH IN
THE PLACEMENT MEMORANDUM ARE INCORPORATED HEREIN BY REFERENCE.
THE COMPANY AND
THE PURCHASER AGREE THAT THE NOTES ARE BEING PURCHASED IN LIEU OF THE
SUBORDINATED NOTES AND THAT NO REPRESENTATION IS BEING MADE WITH RESPECT TO ANY
PORTION OF THE PLACEMENT MEMORANDUM TO THE EXTENT THAT THE INFORMATION IN THE
PLACEMENT MEMORANDUM IS AFFECTED BY THE ISSUANCE OF THE NOTES IN LIEU OF THE
SUBORDINATED NOTES.
5.5.
MATERIAL ADVERSE EFFECT.
SINCE SEPTEMBER 30, 2006 NO EVENT OR
CONDITION HAS OCCURRED WHICH AFFECTS THE COMPANY OR ITS SUBSIDIARIES WHICH HAS
HAD OR COULD BE REASONABLY EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT.
5.6.
CONSENTS.
NO CONSENT, APPROVAL, ORDER OR AUTHORIZATION OF, OR
REGISTRATION, QUALIFICATION, DESIGNATION, DECLARATION OR FILING WITH, ANY
FEDERAL, STATE OR LOCAL GOVERNMENTAL AUTHORITY, OR ANY THIRD
4
PARTY IN CONNECTION WITH ANY AGREEMENT TO WHICH THE COMPANY OR ANY OF ITS
SUBSIDIARIES IS PARTY, IS REQUIRED TO BE OBTAINED OR MADE BY THE COMPANY OR ANY
OF ITS
SUBSIDIARIES IN CONNECTION WITH THE ISSUANCE OF THE NOTES OTHER THAN
SUCH OF THE FOREGOING AS HAVE BEEN OR WILL BE OBTAINED PRIOR TO THE CLOSING OR
WHERE THE FAILURE TO OBTAIN THE CONSENT OF A THIRD PARTY WOULD NOT AFFECT THE
ABILITY OF THE COMPANY TO ENTER INTO THE AGREEMENT, TO ISSUE THE NOTES AND
PERFORM ITS OBLIGATIONS UNDER THE NOTES, AND WOULD NOT RESULT IN A MATERIAL
ADVERSE EFFECT.
5.7.
LITIGATION.
EXCEPT AS DISCLOSED WITH THE COMPANY SEC DOCUMENTS,
THERE IS NO ACTION, SUIT, PROCEEDING OR INVESTIGATION PENDING OR, TO THE
COMPANY'S KNOWLEDGE, CURRENTLY THREATENED THAT QUESTIONS THE VALIDITY OF THIS
AGREEMENT OR THE RIGHT OF THE COMPANY OR ANY OF ITS SUBSIDIARIES TO ENTER INTO
THIS AGREEMENT AND TO ISSUE THE NOTES OR THAT WOULD REASONABLY BE EXPECTED TO
RESULT, EITHER INDIVIDUALLY OR IN THE AGGREGATE, IN A MATERIAL ADVERSE EFFECT.
5.8.
COMPLIANCE WITH OTHER INSTRUMENTS.
THE EXECUTION, DELIVERY AND
PERFORMANCE OF THIS AGREEMENT AND THE ISSUANCE OF THE NOTES WILL NOT RESULT IN
THE VIOLATION OF ANY INSTRUMENT, JUDGMENT, ORDER, WRIT, DECREE OR CONTRACT