2
THE COMPANY'S REVOLVING CREDIT FACILITY WITH LAURUS PURSUANT TO THE WIRE
INSTRUCTIONS ANNEXED HERETO ON SCHEDULE 1(C) AND AS CONTEMPLATED PURSUANT TO
SECTION 4(D) BELOW.
THE AMOUNT FUNDED INTO ESCROW PLUS (A) THE NET AMOUNT
RECEIVED BY THE COMPANY AFTER DEDUCTING EXPENSES HEREUNDER AND (B) THE PAYMENT
TO LAURUS AS CONTEMPLATED IN THIS SECTION 1(C)(II), SHALL SATISFY IN FULL THE
BUYERS' OBLIGATION TO PAY THE AGGREGATE PURCHASE PRICE PURSUANT TO SECTION
1(C)(I).
2.
BUYER'S REPRESENTATIONS AND WARRANTIES.
EACH BUYER REPRESENTS
AND WARRANTS WITH RESPECT TO ONLY ITSELF THAT:
(A)
NO PUBLIC SALE OR DISTRIBUTION.
SUCH BUYER IS (I) ACQUIRING THE
PREFERRED SHARES AND WARRANTS AND (II) UPON CONVERSION OF THE PREFERRED SHARES
AND EXERCISE OF THE WARRANTS WILL ACQUIRE THE CONVERSION SHARES ISSUABLE UPON
CONVERSION OF THE PREFERRED SHARES AND THE WARRANT SHARES ISSUABLE UPON EXERCISE
OF THE WARRANTS, FOR ITS OWN ACCOUNT AND NOT WITH A VIEW TOWARDS, OR FOR RESALE
IN CONNECTION WITH, THE PUBLIC SALE OR DISTRIBUTION THEREOF, EXCEPT PURSUANT TO
SALES REGISTERED OR EXEMPTED UNDER THE 1933 ACT; PROVIDED, HOWEVER, THAT BY
MAKING THE REPRESENTATIONS HEREIN, SUCH BUYER DOES NOT AGREE TO HOLD ANY OF THE
SECURITIES FOR ANY MINIMUM OR OTHER SPECIFIC TERM AND RESERVES THE RIGHT TO
DISPOSE OF THE SECURITIES AT ANY TIME IN ACCORDANCE WITH OR PURSUANT TO A
REGISTRATION STATEMENT OR AN EXEMPTION UNDER THE 1933 ACT.
SUCH BUYER IS
ACQUIRING THE SECURITIES HEREUNDER IN THE ORDINARY COURSE OF ITS BUSINESS.
SUCH
BUYER PRESENTLY DOES NOT HAVE ANY AGREEMENT OR UNDERSTANDING, DIRECTLY OR
INDIRECTLY, WITH ANY PERSON (AS DEFINED IN SECTION 3(R)) TO DISTRIBUTE ANY OF
THE SECURITIES.
IN ADDITION, NOTWITHSTANDING ANY CONTRARY PROVISION IN ANY
TRANSACTION DOCUMENT, FOR A PERIOD OF FOUR (4) MONTHS AFTER THE CLOSING DATE,
NONE OF THE BUYERS OR ANY AFFILIATE DIRECTLY CONTROLLED BY A BUYER SHALL
DIRECTLY OR INDIRECTLY ENGAGE IN "SHORT SALES" OR OTHER SIMILAR HEDGING
STRATEGIES OF THE COMPANY'S COMMON STOCK.
(B)
ACCREDITED INVESTOR STATUS.
SUCH BUYER IS AN "ACCREDITED
INVESTOR" AS THAT TERM IS DEFINED IN RULE 501(A) OF REGULATION D.
(C)
RELIANCE ON EXEMPTIONS.
SUCH BUYER UNDERSTANDS THAT THE
SECURITIES ARE BEING OFFERED AND SOLD TO IT IN RELIANCE ON SPECIFIC EXEMPTIONS
FROM THE REGISTRATION REQUIREMENTS OF UNITED STATES FEDERAL AND STATE SECURITIES
LAWS AND THAT THE COMPANY IS RELYING IN PART UPON THE TRUTH AND ACCURACY OF, AND
SUCH BUYER'S COMPLIANCE WITH, THE REPRESENTATIONS, WARRANTIES, AGREEMENTS,
ACKNOWLEDGMENTS AND UNDERSTANDINGS OF SUCH BUYER SET FORTH HEREIN IN ORDER TO
DETERMINE THE AVAILABILITY OF SUCH EXEMPTIONS AND THE ELIGIBILITY OF SUCH BUYER
TO ACQUIRE THE SECURITIES.
(D)
INFORMATION.
SUCH BUYER AND ITS ADVISORS, IF ANY, HAVE BEEN
FURNISHED WITH ALL MATERIALS RELATING TO THE BUSINESS, FINANCES AND OPERATIONS
OF THE COMPANY AND MATERIALS RELATING TO THE OFFER AND SALE OF THE SECURITIES
WHICH HAVE BEEN REQUESTED BY SUCH BUYER.
SUCH BUYER AND ITS ADVISORS, IF ANY,
HAVE BEEN AFFORDED THE OPPORTUNITY TO ASK QUESTIONS OF THE COMPANY.
NEITHER
SUCH INQUIRIES NOR ANY OTHER DUE DILIGENCE INVESTIGATIONS CONDUCTED BY SUCH
BUYER