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Consulting Agreement - Regarding Business Transaction

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Consulting Agreement - Regarding Business Transaction Powered By Docstoc
					                                CONSULTING AGREEMENT

       THIS AGREEMENT made this _____ day of ___________, 20__ by and between ________
_____________________________, a corporation organized and existing under the laws of the State
of ___________ (the “Consultant”), and _____________________________, a corporation organized
and existing under the laws of the State of __________ (the “Company”).

                                           RECITALS:

        A. Consultant is engaged in the business of advising companies regarding ____________
________________________________________________________________________________
[Insert Consulting Services to be performed]

       B. Company recognizes the expertise and special knowledge of Consultant and desires to
engage Consultant pursuant to the terms and conditions of this Agreement.

                                         AGREEMENT

       NOW THEREFORE, In consideration of the parties entering into this Agreement, the mutual
promises and covenants contained herein, and such other good and valuable consideration, the parties
each agree to all covenants, obligations, representations and promises contained in the following:

      1.      Introduction. Consultant shall confer with Company on matters pertaining to ____
      __________________________________________________________________________
Accordingly, the Company agrees with Consultant to the terms and conditions set forth in this
Agreement.


        2.      Engagement of Consultant. By entering into this Agreement, the Company agrees to
retain Consultant and the Consultant agrees to advise Company and provide such services as more
specifically identified and described in Exhibit A attached hereto and incorporated herein by reference
until such time as this Agreement terminates in accordance with Section 14 herein below. The
Company and Consultant agree that for the purposes of rendering these services, Consultant will rely
and is justified in relying on the accuracy of information or documents prepared and provided by the
Company. Consultant agrees to review, confer and advise Company regarding any necessary
documentation that Company or its attorneys prepare as a result of Consultants services, and prior to
negotiations with or such documents release to [public, company, brokers, investment advisors,
bankers, engineers . . .] Consultant hereby acknowledges and agrees that the Company is free to reject
any advice, introduction, referral, recommendation or otherwise presented to the Company by
Consultant.

       3.      Fees. In consideration of Consultants performance of the services described in herein,


                                                -1-
the Company agrees to pay Consultant certain fees, [either in cash or stock (the Shares)] and expenses
as specifically identified and described in Exhibit B attached hereto and incorporated herein by
reference.

       4.      Representations and Warranties of the Company. The Company represents and
warrants to and agrees with Consultant that:

                (a) The Company is a corporation duly incorporated, validly existing and in good
standing under the laws of the state of its incorporation, with corporate power and authority to own its
properties and conduct is business as now conducted, and is duly qualified to do business as a foreign
corporation in good standing in all other jurisdiction where the failure to so qualify would have a
material adverse effect upon the Company and that the Company holds all licenses, certificates, permits,
franchises and authorizations from any and all governmental authorities which are material to the
conduct of its business in all locations in which such business is currently being conducted.

               (b) The Company has full legal right, power and authority to enter into this Agreement
and to issue, sell and deliver any Securities or Shares to be sold by it to potential investors and/or
Consultant as provided herein, and this Agreement has been duly authorized, executed and delivered by
the Company and constitutes the valid and legally binding obligation of the Company, enforceable
against the Company in accordance with its terms.

                (c) The Company has only one class of equity securities authorized to be issued and, on
the effective date of this Agreement, the aggregate number of the Company's shares authorized to be
issued is _______________ shares of Common Stock, with a par value of $________ per share. As of
the effective date of this Agreement, there are _________ shares of the Company’s common stock
issued and outstanding.

                (d) The Securities and Shares will be validly authorized and, upon issuance and delivery
for payment therefor in accordance with this Agreement, will be validly issued, fully paid and
nonassessable, without any personal liability attaching to the ownership thereof, and will not be issued
in violation of any preemptive or similar rights of shareholders and Consultant and any potential
investors will receive good title to the Shares or Securities purchased by them, fee and clear al all liens,
security interest, pledges, charges, encumbrances, shareholders agreements, and voting trusts.

               (e) All documents prepared by the Company for purposes of any offering or to be used
in connection with any offering, including, but not limited to, a private placement memorandum, a
business plan or such other documents as may be provided to Consultant by the Company for purposes
of this Offering, any documents prepared by Consultant based upon information provided to
Consultant by the Company, the Company’s Subscription Agreement between prospective investors
and the Company, and any Confidential Investor Questionnaire (unless the information in the
Confidential Investor Questionnaire is included in the Subscription Agreement), and any amendments
or supplements thereto (Offering Documents), are and will be prepared in accordance with the 1933
Act and the Rules and Regulations of the SEC as necessary to comply with a Regulation D Exemption,


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and the Company either has or will timely file all required documentation with the SEC and any
applicable state securities commissions, if any, with jurisdiction over any such offering.

                (f) The Offering Documents do not and will not include any untrue statement of a
material fact or omit to state any material fact required to be stated therein or necessary to make the
statements therein not misleading, except that this representation and warranty does not apply to
statements or omissions made in reliance upon and in conformity with information furnished by
Consultant in writing to the Company in connection with the Offering Documents, or any amendment
or supplement thereto.

              (g) The Company and the Company’s counsel has reviewed the applicable registration
requirements of the 1933 Act and all applicable state securities laws and has determined that the
certain exemptions are available to the Company in the offering and that the Company has complied
with such exemptions.

               (h) The Company represents and warrants to Consultant that it has not, directly or
indirectly, made any offers or sales of the Securities, Shares or other securities, whether debt or equity,
within the past (12) twelve months from the effective date of this Agreement.

               (i) The Company represents and warrants to Consultant that it will not, directly or
indirectly, make any offers or sales of the Securities, Shares or other securities, whether debt or equity,
during the term of this Agreement or after completion of any private placement contemplated herein,
except for the offering of the Securities or Shares through the Company’s broker-dealer or other
qualified placement agents. As used herein, the terms offer and sale have the meanings specified in
Section 2(3) of the 1933 Act.

        5.      Representation and Warranties of Consultant. Consultant represents and warrants
to and agrees with the Company that Consultant is familiar or will make itself familiar with all
applicable federal and state securities laws and the regulations thereunder which restrict the public sale
and distribution of securities without either a registration statement, qualification or exemption being
in effect with respect thereto. In exercising its duties under this Agreement, Consultant will not cause
the Company to be engaged in a public offering.

        6.      Legal Opinion. With respect to any offer or sale of securities contemplated herein, the
Company agrees to provide Consultant, prior to commencement of any offering, a legal opinion
(Opinion) of its counsel which is reasonably satisfactory to Consultant, and that at a minimum provides
the representations and warranties delineated in Exhibit C attached hereto and incorporated herein by
reference.

        7.      Covenants of the Company. The Company agrees with Consultant that:

             (a) The Company will consult with Consultant regarding the drafting of any Offering
Documents and the approval of any subscription agreement associated with the offering.


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               (b) The Company will not distribute any Offering Documents that name Consultant in
any way, including as a placement agent, broker, investment banker or other like terms to any potential
investor.

               (c) The Company will furnish to Consultant copies of all Offering Documents in such
quantities as Consultant may reasonable request.

                (d) All potential investors will be given reasonable access to material information
regarding the Company and reasonable opportunity to ask questions of the Company’s executive
officers. Notwithstanding the foregoing, the Company shall not be required to disclose to Consultant or
any potential investors any of the Company’s trade secrets or other proprietary technical information.

                (e) The Company will not, directly or indirectly, make any offer or sale of any of the
Securities or any securities of the same or similar class as the Securities, the result of which would
cause the offer and sale of the Securities to fail to be entitled to the Exemptions.

                (f) The Company will not, directly or indirectly, without the prior written consent of
Consultant, engage any other professional or consulting services that may circumvent, interfere or
compete with the services of Consultant contemplated herein, including but not limited to, other
consultants, attorneys, broker-dealers, underwriters, banks, other lending institutions, whether foreign or
domestic, that engage in any way in any of the services contemplated herein.

                 (g) The Company agrees to take such action (if any) as Consultant may reasonable
request to qualify the Securities for offer and sale under the securities laws of such states as Consultant
may specify; provided that in connection therewith the company will not be required to qualify as a
foreign corporation or file a general consent to service of process. The Company agrees that it will
make any filings or take other actions required under applicable laws to permit the sale of the
Securities.

                (h) If any event occurs as a result of which any Offering Documents would include an
untrue statement of a material fact, or omit to state any material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not misleading, or if it is
necessary at any time to amend the Offering Documents to comply with the 1993 Act, the Company
will promptly prepare and, if so required, file with the SEC or any state securities commission any
amendment or supplement which will correct such statement or omission or an amendment of
supplement which will effect such compliance and will supply such amended or supplemented
Offering Documents to Consultant, in each case as soon as available and in such quantities as
Consultant may reasonable request.

                (i) During the period of this Agreement, an officer of the Company shall promptly
notify an officer of Consultant of any material events which would necessitate modification of any
financing transaction or Offering Documents, and shall be reasonable responsive to Consultants


                                                  -4-
inquiries about the Company’s ongoing operations as they relate to the Financing and the Offering
Documents. The Company shall permit Consultant to make such investigations of the business,
properties and financial and legal conditions of the Company and its subsidiaries as Consultant may
reasonable request. No such investigation by Consultant, if made, shall affect the representations and
warranties of the Company in Section 4.

                (j) The Company will not directly or indirectly circumvent Consultant or any of its
affiliates with respect to any investors introduced to Company as a direct or indirect result of this
Agreement, without the prior written consent of Consultant. In the event of a breach of this section by
any party to this Agreement, the other parties will have injunctive and equitable relief available, as well
as all other remedies at law or in equity.

               (k) The Company shall take all necessary action to properly authorize and approve the
issuance of the Securities and the Shares.

                (l) Consultant shall have full power and authority as an independent contractor to take
all actions and do all things necessary or reasonably proper to provide the services specified in this
Agreement and Company shall take all actions necessary to ensure such power and authority.

                (m) Company will at all times disclose any and all information pertaining in any way to
Consultants services contemplated herein, any fund raising, whether through the sale of equity or debt,
factoring receivables, inventory financing, or such other methods of procuring in any form capital for
the Company. This covenant shall also require the full and absolute disclosure of any and all
professionals or consultants that Company has or may receive advice in any form from that pertains in
any way to the subject matter of this Agreement.

               8.       Status of Consultant. The Company understands and acknowledges that
Consultant is acting as a consultant only, and is not a licensed securities or real estate broker or dealer,
and shall have no authority to enter into any commitments on the Company’s behalf, or to negotiate
the terms of Financing, or to hold any funds or securities in connection with Financing or to perform
any act which would require Consultant to become licensed as a securities or real estate broker or
dealer. The Company further understands and acknowledges that Consultant is not attorney,
accountant, investment advisor, investment company, broker-dealer or banking institution, and
Consultant will not perform any services requiring, and Consultants services should not be construed
by Company as those requiring, Consultant to be or become an attorney, accountant, investment
advisor, investment company, broker-dealer or banking institution. Where necessary, Consultant will
advise and refer Company to any such professional service providers.

               9.       Indemnification. (a) To the extent permissible by law, the Company will
indemnify Consultant, its directors, officers, partners, agents, consultants, employees and controlling
persons (within the meaning of the 1933 Act) against any losses, claims, damages or liabilities (or
actions or proceedings in respect thereof) related to or arising out of any failure to register the
Securities sold in the Offering with the SEC in accordance with the 1933 Act or with any state


                                                   -5-
securities commission in accordance with any applicable state securities laws, or related to or arising
out of any untrue statement or alleged untrue statement of any material fact contained in the Offering
Documents, or any amendment or supplement thereto, or related to or arising out of the omission or
alleged omission to state therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, or related to or arising out of the violation of any other statute,
regulation, rule or other law, whether federal or state, resulting from the Offering, and will reimburse
Consultant and each other person indemnified hereunder for all reasonable legal and other expenses
incurred in connection with investigating or defending any such losses, claims, damages, liabilities,
actions or approvals; provided, however, that the Company will not be liable in any such case for
losses, claims, damages, liabilities or expenses arising out of the gross negligence or willful
misconduct on the part of Consultant, its directors, officers, partners, agents, consultants, employees
and controlling persons (within the meaning of the 1933 Act.). In the event a claim for
indemnification is determined to be unenforceable by the final judgment of a court of competent
jurisdiction, then the Company shall contribute to the aggregate losses, claims, damages or liabilities to
which Consultant or Consultants directors, officers, partners, agents, consultants, employees or
controlling persons (within the meaning of the 1933 Act) may be subject in such amount as is
appropriate to reflect the relevant benefits received by each of the Company and the party seeking
contribution, on the one hand, and the relative faults of the Company and the party seeking
contribution on the other, as well as any relevant equitable contribution.

         (b) Promptly after receipt by an indemnified party under this Section 8 of the notice of the
assertion of any claim or the commencement of any action, if any indemnified party intends to make a
claim for indemnification against any indemnifying party under this Section 8, then the indemnified
party will notify the indemnifying party in writing of such assertion or commencement and will
provide the indemnifying party with copies of all pleadings with which the indemnified party has been
served or has otherwise obtained; provided however, the omission to so notify the indemnifying party
will not relieve the indemnifying party from any liability it may have to the indemnified party
otherwise than under this Section 8. In case any such action is brought against any indemnified party,
and it notifies the indemnifying party of the commencement thereof, the indemnifying party will be
entitled to participate therein and to assume the defense thereof, with counsel satisfactory to such
indemnified party (it being understood that the indemnifying party shall not be liable for the fees and
expenses of more than one separate firm of attorneys for all such indemnified parties). After notice
from the indemnifying party to such indemnified party of their election so to assume the defense
thereof, the indemnifying party will not be liable to such indemnified party under this Section for any
legal or other expenses subsequently incurred by such indemnified party in connection with the defense
thereof other than reasonable costs of investigation.

        10.     Confidentiality.

               (a) Consultant agrees that, for a period of three (3) years from the effective date of this
Agreement, Consultant will not disclose or make commercial use of any confidential information
provided to Consultant by the Company except with the Company’s prior written consent, or, after
taking reasonable action to protect the confidentiality of the information, as required by federal or state


                                                  -6-
laws or regulations or the by-laws or rules of any self-regulatory organization.

               (b) Company agrees that, for a period of three (3) years from the effective date of this
Agreement, Company will not disclose without the prior written consent or authorization of
Consultant, any confidential information regarding Consultant, including Consultants relationship to
Company, the terms and conditions of this Agreement and the fee arrangement contained in this
Agreement. As used herein, such confidential information shall also include, but is not limited to, any
information relating to the individuals or entities introduced to Company by Consultant in performance
of Consultant’s services contained herein.

       11.     Notice.

             (a) Whenever notice is required by the provisions of this Agreement to be given to the
Company, such notice shall be in writing addressed to the Company as follows:

                         ____________________________
                         ____________________________
                         ____________________________
                         ____________________________

               (b) Whenever notice is required by the provisions of this Agreement to be given to
Consultant, such notice shall be given in writing addressed to Consultant as follows:

                         ____________________________
                         ____________________________
                         ____________________________
                         ____________________________

                (c) If addressed or faxed in accordance with subsection (a) or (b) above, as the case may
be, notice shall be deemed properly given, if sent via U.S. mail, by the third business day following
placement of the notice is first class U.S. mail, postage prepaid, if sent via courier, upon confirmation
of delivery by such courier, and if via facsimile, upon confirmation of the successful facsimile.

        12.    Benefit and Non-Assignment. This Agreement is made solely for the benefit of
Consultant, the Company, their respective officers and directors and any controlling person referred to
in Section 15 of the 1933 Act, and their respective successors and assigns, and no other person shall
acquire or have any right under or by virtue of this Agreement. Notwithstanding the foregoing, this
Agreement may not be assigned by Consultant without the prior written consent of the Company or
assigned by the Company without the prior written consent of Consultant. The term successor or the
term successors and assigns as used in this Agreement shall not include any purchasers, as such, in the
Offering.




                                                 -7-
        13.     Survival. All representations and warranties of the Company contained in Section 4,
all covenants of the Company contained in Section 7 and the indemnify agreements of the Company
and Consultant contained in Section 9 hereof shall survive and remain in full force and effect for a
period of three (3) years following the termination of this Agreement, regardless of (i) any
investigation made by or on behalf of Consultant or any such officer or director thereof or any
controlling person of Consultant, (ii) full performance of the terms of this Agreement and (ii) delivery
of or payment for the Shares. Any successor of the Company or Consultant or any controlling person,
officer of director thereof, as the case may be, shall be entitled to the benefits hereof.

        14.    Termination. Consultant may terminate this Agreement (a) upon giving the Company
written notice in the event that the Company fails to cure any violation of the Company’s
representations and warranties in Section 4 within five (5) days after the Company receives written
notice of such violation from Consultant, (b) fails to provide Consultant with a legal opinion as
required by Section 6, (c) fails to comply with any of the Company’s covenants in Section 7 or (d) if
the Company and Consultant fail to agree as to the method, structure and terms of any financing in
accordance with Section 2. Consultant shall have the sole and absolute discretion to determine
whether any such presentation and warranty has been violated for purposes of termination only and
shall state such violation in each of the above notices. Notwithstanding any provision in this
Agreement to the contrary, this Agreement shall continue until the earlier to occur of either (i) the
mutual written agreement of the parties to terminate the Agreement, or (ii) one hundred and eighty
(180) days following the effective date of this Agreement.

        15.     Termination Benefits. Upon any such termination of this Agreement, unless otherwise
agreed by the parties in writing, the Consultant shall be entitled to receive any and all compensation
and expenses as defined herein, if any, unpaid on the date of termination. The Consultant shall not be
entitled to additional compensation or own any interest in the account receivable, work in process or
other assets of the Company except as expressly provided in this Agreement.

       16.     Amendments. This Agreement shall not be modified or amended except by a writing
signed by both parties.

        17.     Prior Agreements. This Agreement contains the entire Agreement of the parties and
supersedes and cancels any other agreement, representation, communication or understanding, whether
oral or written, between the parties hereto and relating to the transactions contemplated herein or the
subject matter hereof. This Agreement may not be changed or terminated orally, but may only be
changed by an Agreement in writing signed by the parties hereto.



                                                 -8-
        18.     Interpretation of Agreement. All parties have participated fully in the negotiation and
drafting of this Agreement. The Agreement has been prepared by all parties equally, and is to be
interpreted according to its terms. No inference shall be drawn that the Agreement was prepared by or
is the product of any particular party or parties.

        19.    Successors and Assigns. This Agreement shall be binding upon and inure to the
benefit of any successor to the Company and such successor shall be deemed substituted for the
Company under the terms of this Agreement. As used in this Agreement, the term "successor" shall
include any person, firm, employer or other business entity which at any time, whether by merger,
purchase or otherwise, acquires all or substantially all the assets of the business of the Company. This
Agreement shall also be binding upon and inure to the benefit of the Consultant, its successor and
assigns.

       20.     Captions. The captions or headings in this Agreement are made for convenience and
general reference only and shall not be construed to describe, define or limit the scope or intent of the
provisions of this Agreement.

        21.     Governing Law. The validity, interpretation and construction of this Agreement and of
each part hereof will be governed by the laws of the State of ___________, excepting its conflict of
laws statute. Each party hereto consents that the only proper jurisdiction and venue shall be the state
courts in __________ County, ___________, for a resolution of all disputes arising out of the
construction, interpretation or enforcement of any term or provision of this Agreement, and each party
hereby waives the claim or defense that such courts constitute an inconvenient forum.

       22.   Counterparts. This Agreement may be executed in any number of counterparts, each
of which may be deemed an original and all of which together will constitute one and the same
instrument.

         23.     Severability. The invalidity or enforce ability of any provision of this Agreement shall
not affect the invalidity or enforce ability of any other provision of this Agreement which shall remain
in full force and effect. If any term or provision of this Agreement shall be invalid or unenforceable to
any extent or application, then the remainder of this Agreement shall be valid and enforceable to the
fullest extent and the broadest application permitted by law.

        24.   Electronic Communication Systems. This Company acknowledges that various
communications systems and networks do not necessarily represent a secure environment in which to
conduct communications. These systems include certain telephone systems, computer networks and
the Internet. Nevertheless, the Company hereby authorizes Consultant to use any such systems
(including sending and receiving facsimiles and electronic mail) for communications of sensitive
information about the Company.


                                                 -9-
       IN WITNESS WHEREOF, the Company, by and through its duly authorized officers, and the
Consultant have caused this Agreement to be executed under seal on the ____ day of _____________,
20__.

[FIRST PARTY:]

                             IF BUSINESS ENTITY:

                             [Name of Company                                                   ]




                             By: ___________________________________

                             Name: _________________________________

                             Title: __________________________________


                             IF INDIVIDUAL:


                             Sign: __________________________________

                             Print Name: _____________________________


[SECOND PARTY:]


                             IF BUSINESS ENTITY:

                             [Name of Company                                                   ]




                             By: ___________________________________

                             Name: _________________________________

                             Title: __________________________________



                                             -10-
IF INDIVIDUAL:


Sign: __________________________________

Print Name: _____________________________




             -11-
                                       [Notary Seals, if needed]

[IF BUSINESS ENTITY]

STATE OF _____________ )

______________ COUNTY )

                 I, the undersigned, a Notary Public in and for said County, in said State, hereby certify
that ______________________ [Name], whose name as ________________ [Title] of
_____________________ [Name of Company], a _____________ [Entity Type] formed and existing
under the laws of the State of ___________ [State in which entity was formed], is signed to the
foregoing Agreement, and who is known to me, acknowledged before me on this day that, being
informed of the contents of said Agreement, ______ [he, she or it], as such officer or director and with
full authority, executed the same voluntarily for and as the act of said corporation on the day the same
bears date.

               Subscribed and sworn to before me on this ____ day of _____________, 20__.


                                               _________________________________________
                                               Notary Public
                                               My Commission Expires: ____________________
[IF INDIVIDUAL]

STATE OF _____________ )

______________ COUNTY )

               I, the undersigned, a Notary Public in and for said County, in said State, hereby certify
that ____________________________ is signed to the foregoing Agreement, and who is known to
me, acknowledged before me on this day that, being informed of the contents of said Agreement, ____
[he or she] executed the same voluntarily on the day the same bears date.


               Subscribed and sworn to before me on this ____ day of _____________, 20__.


                                               _________________________________________
                                               Notary Public
                                               My Commission Expires: ____________________




                                                 -12-
                                       EXHIBIT A

                                        SERVICES


            Consultant agrees to consult with Company regarding the following: __________
_____________________________________________________________________________
_____________________________________________________________________________




                                           -13-
    EXHIBIT B

FEES AND EXPENSES




      -14-
                                               EXHIBIT C

                                           LEGAL OPINION

                (a) The Company is a corporation duly incorporated, validly existing and in good
standing under the laws of the state of its incorporations, with corporate power and authority to own its
properties and conduct is business as now conducted, and is duly qualified to do business as a foreign
corporation in good standing in all other jurisdictions where the failure to so qualify would have a
material adverse effect upon the Company and that the Company holds all licenses, certificates,
permits, franchises and authorizations from governmental authorities which are material to the conduct
of its business in all locations in which are material to the conduct of its business in all locations in
which such business is currently being conducted;

                (b) The Company has full legal right, power and authority to enter into this Agreement
and to issue, sell and deliver the Securities and/or Shares to be sold by it to Potential Investors and the
Consultant as provided in the Agreement, and this Agreement has been duly authorized, executed and
delivered by the Company and constitutes the valid and legally binding obligation of the Company,
enforceable against the Company in accordance with its terms, except as rights to indemnity and
contribution thereunder may be limited under applicable law and except as enforce ability may be
limited by general equitable principles, bankruptcy, insolvency, reorganization, moratorium, fraudulent
transfer, fraudulent conveyance or other laws affecting creditors rights generally, including, without
limitation, the United States Bankruptcy Code and applicable state laws.

                (c) The Company has only one class of equity securities authorized to be issued and, on
the effective date of this Agreement, the aggregate number of the Company’s shares authorized to be
issued is _______________ shares of Common Stock, with a par value of $________ per share. As of
the effective date of this Agreement, there are _________ shares of the Company’s common stock
issued and outstanding.

                (d) The Securities and Shares are validly authorized and, upon issuance and delivery for
payment therefor in accordance with this Agreement and the Warrant, will be validly issued, fully paid
and non assessable, without any personal liability attaching to the ownership thereof, and will not be
issued in violation of an any preemptive or similar rights of shareholders and the Potential Investors
will receive good title to the Securities purchased by them, free and clear of all liens, security interests,
pledges, charges, encumbrances, shareholders agreements, and voting trusts.

                (e) To the best of Company Counsel knowledge, no consent, approval, authorization or
order of any court or governmental agency or body or third party, is required for performance of this
Agreement by the Company for the consummation by the Company of the transaction contemplated
thereby, except such as have been obtained and such as may be required by state securities or Blue Sky
laws in connection with the placement of the Securities. The performance of this Agreement by the
Company and the consummation by the Company of the transactions contemplated thereby will not


                                                   -15-
conflict with or result in a material breach or violation by the Company of any of the terms or
provisions of, or constitute a material default by the Company under, any indenture, mortgage, deed of
trust, loan agreement, lease or other agreement instrument known to us which the Company is a party
or to which the Company or its properties is subject, for a violation or breach of its articles or
incorporation or by-laws of the Company, any material breach or violation of any statute, or any
judgment, decree, order, rule or regulation known to us of any court or governmental agency or body
applicable to the Company or its properties.

                (f) To the best Company Counsel knowledge:

                        (i) The Offering Documents were prepared in all material respects in accordance
with the Exemptions, and that the Company has, or will in a timely manner file all necessary
documentation, including, but not limited to, a Form D, with the SEC and all state securities
commission, if any, with jurisdiction over the Offering and that the Company has not conducted any
other offerings within the last six months which may be integrated with the Offering pursuant to Rule
502 of Regulation D other than securities issued pursuant to a merger, acquisition or other business
combination involving the Company.

                        (ii) Neither the Offering Documents nor any amendment or supplement thereto,
as of thereto, as of the respective dates thereof and as the date of the Opinion, contained an untrue
statement of a material fact or omit to state any material fact required to be stated therein or necessary
to make the statements therein not misleading (except that the Opinion expresses no view as to
financial statements schedules and other financial information included therein).

                 (g) To the best of Company Counsel knowledge, there is not pending or threatened any
action, suit, proceeding inquiry, or investigation, to which the Company is a party, or to which the
party of the Company is subject, before or brought by an court or governmental agency or body, which,
if determined adversely to the Company, could result in any material adverse change in the business,
financial position, net worth or results of operations, or could materially adversely affect the properties
or assets, of the Company.

               (h) To the best of Company Counsel knowledge, the Company is not in material
violation of any law, ordinance, administrative or governmental rule or regulation applicable to the
Company and material to the Company taken as a whole, or any decree of any court of governmental
agency or body having jurisdiction over the Company.




                                                  -16-

				
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