INVESTMENT IN THE COMPANY.
EACH BUYER COVENANTS THAT NEITHER IT NOR ANY PERSON ACTING ON ITS BEHALF OR
PURSUANT TO ANY UNDERSTANDING WITH IT WILL ENGAGE IN ANY TRANSACTION IN THE
SECURITIES OF THE COMPANY (INCLUDING SHORT SALES) PRIOR TO THE TIME THAT THE
TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT ARE PUBLICLY DISCLOSED PURSUANT TO
SECTION 4(I). SHORT SALES INCLUDE, WITHOUT LIMITATION, ALL "SHORT SALES" AS
DEFINED IN RULE 200 PROMULGATED UNDER REGULATION SHO UNDER THE 1934 ACT AND ALL
TYPES OF DIRECT AND INDIRECT STOCK PLEDGES, FORWARD SALE CONTRACTS, OPTIONS,
PUTS, CALLS, SWAPS AND SIMILAR ARRANGEMENTS (INCLUDING ON A TOTAL RETURN BASIS),
AND SALES AND OTHER TRANSACTIONS THROUGH NON-US BROKER DEALERS OR FOREIGN
REGULATED BROKERS.
(M)
GENERAL SOLICITATION. NO BUYER IS PURCHASING
THE SECURITIES AS A RESULT OF ANY ADVERTISEMENT, ARTICLE, NOTICE OR OTHER
COMMUNICATION (INCLUDING A RESEARCH REPORT ISSUED BY THE AGENT) REGARDING THE
SECURITIES PUBLISHED IN ANY NEWSPAPER, MAGAZINE OR SIMILAR MEDIA OR BROADCAST
OVER TELEVISION OR RADIO OR PRESENTED AT ANY SEMINAR.
5
3.
REPRESENTATIONS AND WARRANTIES OF THE
COMPANY.
The Company represents and warrants to each of the Buyers that:
(A)
ORGANIZATION AND QUALIFICATION. THE COMPANY
AND ITS "SUBSIDIARIES" (WHICH FOR PURPOSES OF THIS AGREEMENT MEANS ANY ENTITY IN
WHICH THE COMPANY, DIRECTLY OR INDIRECTLY, OWNS CAPITAL STOCK OR HOLDS AN EQUITY
OR SIMILAR INTEREST) ARE ENTITIES DULY ORGANIZED AND VALIDLY EXISTING AND IN
GOOD STANDING UNDER THE LAWS OF THE JURISDICTION IN WHICH THEY ARE FORMED, AND
HAVE THE REQUISITE POWER AND AUTHORIZATION TO OWN THEIR PROPERTIES AND TO CARRY
ON THEIR BUSINESS AS NOW BEING CONDUCTED. EACH OF THE COMPANY AND ITS
SUBSIDIARIES IS DULY QUALIFIED AS A FOREIGN ENTITY TO DO BUSINESS AND IS IN GOOD
STANDING IN EVERY JURISDICTION IN WHICH ITS OWNERSHIP OF PROPERTY OR THE NATURE
OF THE BUSINESS CONDUCTED BY IT MAKES SUCH QUALIFICATION NECESSARY, EXCEPT TO
THE EXTENT THAT THE FAILURE TO BE SO QUALIFIED OR BE IN GOOD STANDING WOULD NOT
HAVE A MATERIAL ADVERSE EFFECT. AS USED IN THIS AGREEMENT, "MATERIAL ADVERSE
EFFECT" MEANS ANY MATERIAL ADVERSE EFFECT ON THE BUSINESS, PROPERTIES, ASSETS,
OPERATIONS, RESULTS OF OPERATIONS, CONDITION (FINANCIAL OR OTHERWISE) OR CURRENT
PROSPECTS OF THE COMPANY AND ITS SUBSIDIARIES, BOTH TAKEN AS A WHOLE AND
INDIVIDUALLY AS TO ANY SUBSIDIARY THAT IS A SIGNIFICANT SUBSIDIARY (AS DEFINED
IN REGULATION S-X), OR ON THE TRANSACTIONS CONTEMPLATED HEREBY OR IN THE OTHER
TRANSACTION DOCUMENTS OR BY THE AGREEMENTS AND INSTRUMENTS TO BE ENTERED INTO IN
CONNECTION HEREWITH OR THEREWITH, OR ON THE AUTHORITY OR ABILITY OF THE COMPANY
TO PERFORM ITS OBLIGATIONS UNDER THE TRANSACTION DOCUMENTS (AS DEFINED BELOW).
THE COMPANY HAS NO SUBSIDIARIES, EXCEPT AS SET FORTH ON SCHEDULE 3(A).
(B)
AUTHORIZATION; ENFORCEMENT; VALIDITY. EXCEPT
AS SET FORTH IN SCHEDULE 3(B), THE COMPANY HAS THE REQUISITE CORPORATE POWER AND
AUTHORITY TO ENTER INTO AND PERFORM ITS OBLIGATIONS UNDER THIS AGREEMENT, THE
CERTIFICATE OF DESIGNATIONS, THE WARRANTS, THE REGISTRATION RIGHTS AGREEMENT,
THE IRREVOCABLE TRANSFER AGENT INSTRUCTIONS (AS DEFINED IN SECTION 5(B)), AND
EACH OF THE OTHER