SHALL NOT BE DEEMED TO BE A PART OF OR TO AFFECT THE MEANING
OR INTERPRETATION OF THIS AGREEMENT.
6
(B)
THIS AGREEMENT, THE REGISTRATION RIGHTS
AGREEMENT AND THE WARRANT WERE NEGOTIATED BY THE PARTIES WITH THE BENEFIT OF
LEGAL REPRESENTATION, AND NO RULE OF CONSTRUCTION OR INTERPRETATION OTHERWISE
REQUIRING THIS AGREEMENT, THE REGISTRATION RIGHTS AGREEMENT OR THE WARRANT TO BE
CONSTRUED OR INTERPRETED AGAINST ANY PARTY SHALL APPLY TO ANY CONSTRUCTION OR
INTERPRETATION HEREOF.
SUBJECT TO SECTION 9.6, THIS AGREEMENT SHALL BE
INTERPRETED AND CONSTRUED TO THE MAXIMUM EXTENT POSSIBLE SO AS TO UPHOLD THE
ENFORCEABILITY OF EACH OF THE TERMS AND PROVISIONS HEREOF, IT BEING UNDERSTOOD
AND ACKNOWLEDGED THAT THIS AGREEMENT WAS ENTERED INTO BY THE PARTIES AFTER
SUBSTANTIAL NEGOTIATIONS AND WITH FULL AWARENESS BY THE PARTIES OF THE TERMS AND
PROVISIONS HEREOF AND THE CONSEQUENCES THEREOF.
1.3.
ACCOUNTING PRINCIPLES.
THE CLASSIFICATION,
CHARACTER AND AMOUNT OF ALL ASSETS, LIABILITIES, CAPITAL ACCOUNTS AND RESERVES
AND OF ALL ITEMS OF INCOME AND EXPENSE TO BE DETERMINED, AND ANY CONSOLIDATION
OR OTHER ACCOUNTING COMPUTATION TO BE MADE, AND THE INTERPRETATION OF ANY
DEFINITION CONTAINING ANY FINANCIAL TERM, PURSUANT TO THIS AGREEMENT SHALL BE
DETERMINED AND MADE IN ACCORDANCE WITH GAAP, UNLESS SUCH PRINCIPLES ARE
INCONSISTENT WITH THE EXPRESS REQUIREMENTS OF THIS AGREEMENT; PROVIDED, THAT, IF
BECAUSE OF A CHANGE OF GAAP AFTER THE DATE OF THIS AGREEMENT THE COMPANY WOULD
BE REQUIRED TO ALTER A PREVIOUSLY UTILIZED ACCOUNTING PRINCIPLE, METHOD OR
POLICY IN ORDER TO REMAIN IN COMPLIANCE WITH GAAP, SUCH DETERMINATION SHALL
CONTINUE TO BE MADE IN ACCORDANCE WITH THE COMPANY'S PREVIOUS ACCOUNTING
PRINCIPLES, METHODS AND POLICIES.
ARTICLE II
PURCHASE AND SALE OF SERIES A PREFERRED SHARES; WARRANT
2.1.
AUTHORIZATION OF THE SERIES A PREFERRED SHARES;
FILING OF CERTIFICATE OF DESIGNATION.
PRIOR TO OR CONTEMPORANEOUSLY WITH THE
CLOSING (AS DEFINED BELOW), THE COMPANY SHALL (A) AUTHORIZE THE ISSUANCE AND
SALE TO THE INVESTOR OF UP TO 460,000 SHARES OF SERIES A PREFERRED STOCK, (B)
RESERVE FOR ISSUANCE A SUFFICIENT NUMBER OF SHARES OF SERIES A PREFERRED STOCK
TO PERMIT THE EXERCISE IN FULL OF THE WARRANT, (C) RESERVE FOR ISSUANCE A
SUFFICIENT NUMBER OF SHARES OF COMMON STOCK TO PERMIT CONVERSION OF ALL SUCH
SHARES OF SERIES A PREFERRED STOCK AND (D) FILE THE CERTIFICATE OF DESIGNATION
ATTACHED AS EXHIBIT A HERETO.
2.2.
PURCHASE AND SALE OF THE INITIAL SERIES A
PREFERRED SHARES; DELIVERY OF INITIAL SERIES A PREFERRED SHARES.
AT THE
CLOSING, SUBJECT TO THE TERMS AND THE CONDITIONS SET FORTH HEREIN, INCLUDING THE
REPRESENTATIONS AND WARRANTIES SET FORTH HEREIN AND THE CLOSING DOCUMENTS
DELIVERED PURSUANT HERETO, (A) THE COMPANY SHALL ISSUE, SELL AND DELIVER TO THE
INVESTOR, FREE AND CLEAR OF ALL LIENS, AND THE INVESTOR SHALL PURCHASE FROM THE
COMPANY AT A PURCHASE PRICE OF $22.50 PER SHARE, 270,000 SHARES OF SERIES A
PREFERRED STOCK (THE "INITIAL SERIES A PREFERRED SHARES") AGAINST DELIVERY TO
THE COMPANY BY THE INVESTOR OF SIX MILLION SEVENTY FIVE THOUSAND DOLLARS
($6,075,000) (THE "PURCHASE PRICE") BY WIRE TRANSFER OF IMMEDIATELY AVAILABLE