OF THE COMPANY, ANY AGENT OR OTHER PERSON ACTING ON BEHALF
OF THE COMPANY, HAS (I) DIRECTLY OR INDIRECTLY, USED ANY FUNDS FOR UNLAWFUL
CONTRIBUTIONS, GIFTS, ENTERTAINMENT OR OTHER UNLAWFUL EXPENSES RELATED TO
FOREIGN OR DOMESTIC POLITICAL ACTIVITY, (II) MADE ANY UNLAWFUL PAYMENT TO
FOREIGN OR DOMESTIC GOVERNMENT OFFICIALS OR EMPLOYEES OR TO ANY FOREIGN OR
DOMESTIC POLITICAL PARTIES OR CAMPAIGNS FROM CORPORATE FUNDS, (III) FAILED TO
DISCLOSE FULLY ANY CONTRIBUTION MADE BY THE COMPANY (OR MADE BY ANY PERSON
ACTING ON ITS BEHALF OF WHICH THE COMPANY IS AWARE) WHICH IS
IN VIOLATION OF
LAW, OR (IV) VIOLATED IN ANY MATERIAL RESPECT ANY PROVISION OF THE FOREIGN
CORRUPT PRACTICES ACT OF 1977, AS AMENDED.
(EE)
ACCOUNTANTS.
THE COMPANY'S ACCOUNTANTS ARE SET
FORTH ON SCHEDULE 3.1(EE) OF THE DISCLOSURE SCHEDULE.
TO THE KNOWLEDGE OF THE
COMPANY, SUCH ACCOUNTANTS, WHO THE COMPANY EXPECTS WILL EXPRESS THEIR OPINION
WITH RESPECT TO THE FINANCIAL STATEMENTS TO BE INCLUDED IN THE COMPANY'S ANNUAL
REPORT ON FORM 10-KSB FOR THE YEAR ENDED DECEMBER 31, 2006 ARE A REGISTERED
PUBLIC ACCOUNTING FIRM AS REQUIRED BY THE SECURITIES ACT.
(FF)
SENIORITY.
AS OF THE CLOSING DATE, NO
INDEBTEDNESS OR OTHER EQUITY OF THE COMPANY IS SENIOR TO THE DEBENTURES IN RIGHT
OF PAYMENT, WHETHER WITH RESPECT TO INTEREST OR UPON LIQUIDATION OR DISSOLUTION,
OR OTHERWISE, OTHER THAN GENERAL UNSECURED INDEBTEDNESS INCURRED IN CONNECTION
WITH EQUIPMENT AND REAL ESTATE FINANCING CUSTOMARY
18
FOR RESEARCH AND DEVELOPMENT COMPANIES, ACCOUNTS PAYABLES AND INDEBTEDNESS
SECURED BY PURCHASE MONEY SECURITY INTERESTS (WHICH IS SENIOR ONLY AS TO
UNDERLYING ASSETS COVERED THEREBY) AND CAPITAL LEASE OBLIGATIONS (WHICH IS
SENIOR ONLY AS TO THE PROPERTY COVERED THEREBY), WHICH INDEBTEDNESS IS SET FORTH
ON SCHEDULE 3.1(FF).
(GG)
NO DISAGREEMENTS WITH ACCOUNTANTS AND LAWYERS.
THERE ARE NO DISAGREEMENTS OF ANY KIND PRESENTLY EXISTING, OR REASONABLY
ANTICIPATED BY THE COMPANY TO ARISE, BETWEEN THE ACCOUNTANTS AND LAWYERS
FORMERLY OR PRESENTLY EMPLOYED BY THE COMPANY AND THE COMPANY HAS FULLY ACCRUED
ALL AMOUNTS OWED TO ITS ACCOUNTANTS AND LAWYERS.
(HH)
ACKNOWLEDGMENT REGARDING PURCHASERS' PURCHASE OF
SECURITIES.
THE COMPANY ACKNOWLEDGES AND AGREES THAT EACH OF THE PURCHASERS IS
ACTING SOLELY IN THE CAPACITY OF AN ARM'S LENGTH PURCHASER WITH RESPECT TO THE
TRANSACTION DOCUMENTS AND THE TRANSACTIONS CONTEMPLATED HEREBY.
THE COMPANY
FURTHER ACKNOWLEDGES THAT NO PURCHASER IS ACTING AS A FINANCIAL ADVISOR OR
FIDUCIARY OF THE COMPANY (OR IN ANY SIMILAR CAPACITY) WITH RESPECT TO THIS
AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY AND ANY ADVICE GIVEN BY ANY
PURCHASER OR ANY OF THEIR RESPECTIVE REPRESENTATIVES OR AGENTS IN CONNECTION
WITH THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY IS MERELY
INCIDENTAL TO THE PURCHASERS' PURCHASE OF THE SECURITIES.
THE COMPANY FURTHER
REPRESENTS TO EACH PURCHASER THAT THE COMPANY'S DECISION TO ENTER INTO THIS
AGREEMENT HAS BEEN BASED SOLELY ON THE INDEPENDENT EVALUATION OF THE
TRANSACTIONS CONTEMPLATED HEREBY BY THE COMPANY AND ITS REPRESENTATIVES.
(II)
ACKNOWLEDGEMENT REGARDING PURCHASERS'
TRADING ACTIVITY.
ANYTHING IN THIS AGREEMENT OR ELSEWHERE HEREIN TO THE
CONTRARY NOTWITHSTANDING (EXCEPT FOR SECTION 4.16 HEREOF), IT IS UNDERSTOOD AND