OF
2002 WHICH ARE APPLICABLE TO IT AS OF THE CLOSING DATE. THE COMPANY HAS
ESTABLISHED DISCLOSURE CONTROLS AND PROCEDURES (AS DEFINED IN EXCHANGE ACT RULES
13A-15(E) AND 15D-15(E)) FOR THE COMPANY AND DESIGNED SUCH DISCLOSURE CONTROLS
AND PROCEDURES TO ENSURE THAT MATERIAL INFORMATION RELATING TO THE COMPANY IS
MADE KNOWN TO THE CERTIFYING OFFICERS BY OTHERS WITHIN THOSE ENTITIES,
PARTICULARLY DURING THE PERIOD IN WHICH THE COMPANY'S MOST RECENTLY FILED
PERIODIC REPORT UNDER THE EXCHANGE ACT IS BEING PREPARED. THE COMPANY'S
CERTIFYING OFFICERS HAVE EVALUATED THE EFFECTIVENESS OF THE COMPANY'S DISCLOSURE
CONTROLS AND PROCEDURES AS OF THE END OF THE MOST RECENT PERIODIC REPORTING
PERIOD UNDER THE EXCHANGE ACT (SUCH DATE, THE "EVALUATION DATE"). THE COMPANY
PRESENTED IN ITS MOST RECENTLY FILED PERIODIC REPORT UNDER THE EXCHANGE ACT THE
CONCLUSIONS OF THE CERTIFYING OFFICERS ABOUT THE EFFECTIVENESS OF THE DISCLOSURE
CONTROLS AND PROCEDURES BASED ON THEIR EVALUATIONS AS OF THE EVALUATION DATE.
SINCE THE EVALUATION DATE, THERE HAVE BEEN NO SIGNIFICANT CHANGES IN THE
COMPANY'S INTERNAL CONTROLS OVER FINANCIAL REPORTING (AS SUCH TERM IS DEFINED IN
EXCHANGE ACT RULES 13A-15(F) AND 15D-15(F)) OR, TO THE COMPANY'S KNOWLEDGE, IN
OTHER FACTORS THAT COULD REASONABLY BE EXPECTED TO MATERIALLY AFFECT THE
COMPANY'S INTERNAL CONTROLS OVER FINANCIAL REPORTING.
(W)
CERTAIN FEES. NO PERSON OR ENTITY WILL HAVE, AS A RESULT OF THE
TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT, ANY VALID RIGHT, INTEREST OR CLAIM
AGAINST OR UPON THE COMPANY OR A PURCHASER FOR ANY COMMISSION, FEE OR OTHER
COMPENSATION PURSUANT TO ANY AGREEMENT, ARRANGEMENT OR UNDERSTANDING ENTERED
INTO BY OR ON BEHALF OF THE COMPANY, OTHER THAN PIPER JAFFRAY & CO. AS PLACEMENT
AGENT WITH RESPECT TO THE OFFER AND SALE OF THE SECURITIES (WHICH PLACEMENT
AGENT FEES ARE BEING PAID BY THE COMPANY). THE COMPANY SHALL PAY, AND HOLD EACH
PURCHASER HARMLESS AGAINST, ANY LIABILITY, LOSS OR EXPENSE (INCLUDING, WITHOUT
LIMITATION, ATTORNEYS' FEES AND OUT-OF-POCKET EXPENSES) ARISING IN CONNECTION
WITH ANY SUCH RIGHT, INTEREST OR CLAIM.
(X)
PRIVATE PLACEMENT. ASSUMING THE ACCURACY OF THE PURCHASERS'
REPRESENTATIONS AND WARRANTIES SET FORTH IN SECTION 3.2 OF THIS AGREEMENT, NO
REGISTRATION UNDER THE SECURITIES ACT IS REQUIRED FOR THE OFFER AND SALE OF THE
SECURITIES BY THE COMPANY TO THE PURCHASERS UNDER THE TRANSACTION DOCUMENTS. AS
OF OCTOBER 26, 2006, THE COMPANY WILL BE ELIGIBLE TO REGISTER THE SHARES AND THE
WARRANT SHARES FOR RESALE BY THE PURCHASERS USING FORM S-3 PROMULGATED UNDER THE
SECURITIES ACT. OTHER THAN EACH OF THE PURCHASERS OR AS SET FORTH IN SCHEDULE
3.1(X) HERETO, NO PERSON HAS ANY RIGHT TO CAUSE THE COMPANY TO EFFECT THE
REGISTRATION UNDER THE SECURITIES ACT OF ANY SECURITIES OF THE COMPANY OTHER
THAN THOSE SECURITIES WHICH ARE CURRENTLY REGISTERED ON AN EFFECTIVE
REGISTRATION STATEMENT ON FILE WITH THE COMMISSION.
(Y)
NO DIRECTED SELLING EFFORTS OR GENERAL SOLICITATION. NEITHER THE
COMPANY, NOR ANY OF ITS AFFILIATES, NOR ANY PERSON ACTING ON ITS OR THEIR BEHALF
HAS CONDUCTED ANY "GENERAL SOLICITATION" OR
12
"GENERAL ADVERTISING" (AS THOSE TERMS ARE USED IN REGULATION D) IN