holder of the
Conversion Shares upon which it is stamped, if, unless otherwise required by
state securities laws, (i) in connection with a sale transaction, provided the
Conversion Shares are registered under the Securities Act and the holder (any
broker-dealer engaged in the sale of the Conversion Shares) represents to the
Company that the Conversion Shares have been or will be sold in accordance with
the Plan of Distribution as set forth in the registration statement, or (ii) in
connection with a sale transaction, after such holder provides the Company with
an opinion of counsel, which opinion shall be in form, substance and scope
customary for opinions of counsel in comparable transactions, to the effect that
a public sale, assignment or transfer of the Conversion Shares may be made
without registration under the Securities Act.
(H)
AUTHORIZATION, ENFORCEMENT. THIS AGREEMENT HAS BEEN DULY AND
VALIDLY AUTHORIZED, EXECUTED AND DELIVERED ON BEHALF OF SUCH BUYER AND IS A
VALID AND BINDING AGREEMENT OF SUCH BUYER ENFORCEABLE IN ACCORDANCE WITH ITS
TERMS, EXCEPT AS SUCH ENFORCEABILITY MAY BE LIMITED BY GENERAL PRINCIPLES OF
EQUITY OR APPLICABLE BANKRUPTCY, INSOLVENCY, REORGANIZATION, MORATORIUM,
LIQUIDATION AND OTHER SIMILAR LAWS RELATING TO, OR AFFECTING GENERALLY, THE
ENFORCEMENT OF APPLICABLE CREDITORS' RIGHTS AND REMEDIES.
(I)
RECEIPT OF DOCUMENTS. EACH BUYER AND HIS OR ITS COUNSEL HAS
RECEIVED AND READ IN THEIR ENTIRETY:
(I) THIS AGREEMENT AND EACH
REPRESENTATION, WARRANTY AND COVENANT SET FORTH HEREIN AND THE TRANSACTION
DOCUMENTS (AS DEFINED HEREIN); (II) ALL DUE DILIGENCE AND OTHER INFORMATION
NECESSARY TO VERIFY THE ACCURACY AND COMPLETENESS OF SUCH REPRESENTATIONS,
WARRANTIES AND COVENANTS; (III) THE COMPANY'S FORM 10-KSB FOR THE FISCAL YEAR
ENDED APRIL 30, 2005; (IV) THE COMPANY'S FORM 10-QSB FOR THE FISCAL QUARTER
ENDED JULY 31, 2005, OCTOBER 31, 2005, AND JANUARY 31, 2006; (V) ALL FORMS 8-K
FILED SUBSEQUENT TO THE FLING OF THE COMPANY'S FORM 10-KSB FOR THE FISCAL YEAR
ENDED APRIL 30, 2005; AND (VI) ANSWERS TO ALL QUESTIONS EACH BUYER SUBMITTED TO
THE COMPANY REGARDING AN INVESTMENT IN THE COMPANY; AND EACH BUYER HAS RELIED ON
THE INFORMATION CONTAINED THEREIN AND HAS NOT BEEN FURNISHED ANY OTHER
DOCUMENTS, LITERATURE, MEMORANDUM OR PROSPECTUS.
(J)
DUE FORMATION OF CORPORATE AND OTHER BUYERS. IF THE BUYER(S) IS A
CORPORATION, TRUST, PARTNERSHIP OR OTHER ENTITY THAT IS NOT AN INDIVIDUAL
PERSON, IT HAS BEEN FORMED AND VALIDLY EXISTS AND HAS NOT BEEN ORGANIZED FOR THE
SPECIFIC PURPOSE OF PURCHASING THE CONVERTIBLE DEBENTURES AND IS NOT PROHIBITED
FROM DOING SO.
(K)
GOOD FUNDS. ALL PURCHASE PAYMENTS TRANSFERRED OR THAT MAY BE
TRANSFERRED TO THE COMPANY PURSUANT TO THIS AGREEMENT ORIGINATED DIRECTLY FROM A
BANK OR BROKERAGE ACCOUNT IN THE NAME OF THE INVESTOR LOCATED WITHIN THE UNITED
STATES OF AMERICA OR ANOTHER COMPLIANT JURISDICTION AS DEFINED IN BY THE
FINANCIAL ACTION TASK FORCE ON MONEY LAUNDERING (FOUND AT
).
5
(L)
NO LEGAL ADVICE FROM THE COMPANY. EACH BUYER ACKNOWLEDGES, THAT
IT HAD THE OPPORTUNITY TO REVIEW THIS AGREEMENT AND THE TRANSACTIONS
CONTEMPLATED BY THIS AGREEMENT WITH HIS