PROPERTY TO OR FROM, OR OTHERWISE REQUIRING PAYMENTS TO OR FROM ANY OFFICER,
DIRECTOR OR SUCH EMPLOYEE OR, TO THE KNOWLEDGE OF THE COMPANY, ANY ENTITY IN
WHICH ANY OFFICER, DIRECTOR, OR ANY SUCH EMPLOYEE HAS A SUBSTANTIAL INTEREST OR
IS AN OFFICER, DIRECTOR, TRUSTEE OR PARTNER.
4.19
INSURANCE.
THE COMPANY AND ITS SUBSIDIARIES HAVE INSURANCE
POLICIES IN FULL FORCE AND EFFECT OF A TYPE, COVERING SUCH RISKS AND IN SUCH
AMOUNTS, AND HAVING SUCH DEDUCTIBLES AND EXCLUSIONS AS ARE CUSTOMARY FOR
CONDUCTING BUSINESSES AND OWNING ASSETS SIMILAR IN NATURE AND SCOPE TO THOSE OF
THE COMPANY AND ITS SUBSIDIARIES.
THE AMOUNTS OF ALL SUCH INSURANCE POLICIES
AND THE RISKS COVERED THEREBY
12
ARE IN ACCORDANCE IN ALL MATERIAL RESPECTS WITH ALL MATERIAL CONTRACTS AND
AGREEMENTS TO WHICH THE COMPANY AND/OR ITS SUBSIDIARIES IS A PARTY AND WITH ALL
APPLICABLE LEGAL REQUIREMENTS.
WITH RESPECT TO EACH SUCH INSURANCE POLICY:
(I) THE POLICY IS VALID, OUTSTANDING AND ENFORCEABLE IN ACCORDANCE WITH ITS
TERMS, EXCEPT AS SUCH ENFORCEABILITY MAY BE LIMITED BY APPLICABLE BANKRUPTCY,
INSOLVENCY, REORGANIZATION, MORATORIUM OR OTHER SIMILAR LAWS IN EFFECT THAT
LIMIT CREDITORS' RIGHTS GENERALLY, EQUITABLE LIMITATIONS ON THE AVAILABILITY OF
SPECIFIC REMEDIES AND PRINCIPLES OF EQUITY (REGARDLESS OF WHETHER SUCH
ENFORCEMENT IS CONSIDERED IN A PROCEEDING IN LAW OR IN EQUITY); (II) NEITHER THE
COMPANY NOR ANY OF ITS SUBSIDIARIES IS IN BREACH OR DEFAULT WITH RESPECT TO ITS
OBLIGATIONS THEREUNDER IN ANY MATERIAL RESPECT; AND (III) NO PARTY TO THE POLICY
HAS REPUDIATED, OR GIVEN NOTICE OF AN INTENT TO REPUDIATE, ANY PROVISION
THEREOF.
4.20
APPROVED ACQUISITIONS OF SHARES AND CONVERSION SHARES; NO
ANTI-TAKEOVER PROVISIONS.
EXCEPT AS OTHERWISE SET FORTH IN SCHEDULE 4.2, THE
COMPANY HAS TAKEN ALL NECESSARY ACTION, IF ANY, REQUIRED UNDER THE LAWS OF THE
STATE OF NEVADA OR OTHERWISE TO ALLOW THE BUYERS TO ACQUIRE THE SHARES PURSUANT
TO THIS AGREEMENT AND TO ALLOW EACH NOTE HOLDER TO ACQUIRE THE CONVERSION
SHARES.
THE COMPANY HAS NO CONTROL SHARE ACQUISITION, BUSINESS COMBINATION,
POISON PILL (INCLUDING ANY DISTRIBUTION UNDER A RIGHTS AGREEMENT) OR OTHER
SIMILAR ANTI-TAKEOVER PROVISION UNDER THE COMPANY'S ARTICLES OF INCORPORATION OR
BYLAWS, EACH AS AMENDED (OR SIMILAR CHARTER DOCUMENTS), THAT IS OR COULD BECOME
APPLICABLE TO THE BUYERS OR THE NOTE HOLDERS AS A RESULT OF THE BUYERS, THE NOTE
HOLDERS AND THE COMPANY FULFILLING THEIR OBLIGATIONS OR EXERCISING THEIR RIGHTS
UNDER THIS AGREEMENT, INCLUDING WITHOUT LIMITATION THE COMPANY'S ISSUANCE OF THE
SHARES TO THE BUYERS AND THE CONVERSION SHARES TO THE NOTE HOLDERS AND THE
BUYERS' AND THE NOTE HOLDERS' RESPECTIVE OWNERSHIP OF THE SHARES AND THE
CONVERSION SHARES.
IN ADDITION, THE COMPANY HAS OPTED OUT OF THE PROVISIONS OF
THE NEVADA REVISED STATUTES ("NRS") PERTAINING TO THE ACQUISITION OF A
CONTROLLING INTEREST (NRS 78.378 THROUGH 78.3793).
AS OF THE DATE HEREOF, THE
COMPANY HAD LESS THAN 200 "STOCKHOLDERS OF RECORD" AND IS NOT CONSIDERED A
"RESIDENT DOMESTIC CORPORATION" FOR PURPOSES OF §78.411 THROUGH §78.444 OF THE
NRS.
4.21
ERISA.
BASED UPON THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF
1974,