NONE OF
THE BUYERS HAVE BEEN ASKED BY THE COMPANY OR ITS SUBSIDIARIES TO AGREE, NOR HAS
ANY BUYER AGREED WITH THE COMPANY OR ITS SUBSIDIARIES, TO DESIST FROM PURCHASING
OR SELLING, LONG AND/OR SHORT, SECURITIES OF THE COMPANY, OR "DERIVATIVE"
16
SECURITIES BASED ON SECURITIES ISSUED BY THE COMPANY OR TO HOLD THE SECURITIES
FOR ANY SPECIFIED TERM; (II) THAT PAST OR FUTURE OPEN MARKET OR OTHER
TRANSACTIONS BY ANY BUYER, INCLUDING, WITHOUT LIMITATION, SHORT SALES OR
"DERIVATIVE" TRANSACTIONS, BEFORE OR AFTER THE CLOSING OF THIS OR FUTURE PRIVATE
PLACEMENT TRANSACTIONS, MAY NEGATIVELY IMPACT THE MARKET PRICE OF THE COMPANY'S
PUBLICLY-TRADED SECURITIES; (III) THAT ANY BUYER, AND COUNTER PARTIES IN
"DERIVATIVE" TRANSACTIONS TO WHICH ANY SUCH BUYER IS A PARTY, DIRECTLY OR
INDIRECTLY, PRESENTLY MAY HAVE A "SHORT" POSITION IN THE COMMON STOCK, AND (IV)
THAT EACH BUYER SHALL NOT BE DEEMED TO HAVE ANY AFFILIATION WITH OR CONTROL OVER
ANY ARM'S LENGTH COUNTER-PARTY IN ANY "DERIVATIVE" TRANSACTION.
THE COMPANY
FURTHER UNDERSTANDS AND ACKNOWLEDGES THAT (A) ONE OR MORE BUYERS MAY ENGAGE IN
HEDGING AND/OR TRADING ACTIVITIES AT VARIOUS TIMES DURING THE PERIOD THAT THE
SECURITIES ARE OUTSTANDING, INCLUDING, WITHOUT LIMITATION, DURING THE PERIODS
THAT THE VALUE OF THE CONVERSION SHARES, INTEREST SHARES AND THE WARRANT SHARES
DELIVERABLE WITH RESPECT TO SECURITIES ARE BEING DETERMINED AND (B) SUCH HEDGING
AND/OR TRADING ACTIVITIES, IF ANY, CAN REDUCE THE VALUE OF THE EXISTING
STOCKHOLDERS' EQUITY INTEREST IN THE COMPANY BOTH AT AND AFTER THE TIME THE
HEDGING AND/OR TRADING ACTIVITIES ARE BEING CONDUCTED.
THE COMPANY ACKNOWLEDGES
THAT SUCH AFOREMENTIONED HEDGING AND/OR TRADING ACTIVITIES DO NOT CONSTITUTE A
BREACH OF THIS AGREEMENT, THE NOTES, THE WARRANTS OR ANY OF THE DOCUMENTS
EXECUTED IN CONNECTION HEREWITH.
(JJ)
U.S. REAL PROPERTY HOLDING CORPORATION.
THE COMPANY IS NOT, NOR
HAS EVER BEEN, A U.S. REAL PROPERTY HOLDING CORPORATION WITHIN THE MEANING OF
SECTION 897 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED, AND THE COMPANY
SHALL SO CERTIFY UPON BUYER'S REQUEST.
(KK)
DISCLOSURE.
THE COMPANY CONFIRMS THAT NEITHER IT NOR ANY OTHER
PERSON ACTING ON ITS BEHALF HAS PROVIDED ANY OF THE BUYERS OR THEIR AGENTS OR
COUNSEL WITH ANY INFORMATION THAT CONSTITUTES OR COULD REASONABLY BE EXPECTED TO
CONSTITUTE MATERIAL, NONPUBLIC INFORMATION.
THE COMPANY UNDERSTANDS AND
CONFIRMS THAT EACH OF THE BUYERS WILL RELY ON THE FOREGOING REPRESENTATIONS IN
EFFECTING TRANSACTIONS IN SECURITIES OF THE COMPANY.
ALL DISCLOSURE PROVIDED TO
THE BUYERS REGARDING THE COMPANY OR ANY OF ITS SUBSIDIARIES, THEIR BUSINESS AND
THE TRANSACTIONS CONTEMPLATED HEREBY, INCLUDING THE SCHEDULES TO THIS AGREEMENT,
FURNISHED BY OR ON BEHALF OF THE COMPANY IS TRUE AND CORRECT AND DOES NOT
CONTAIN ANY UNTRUE STATEMENT OF A MATERIAL FACT OR OMIT TO STATE ANY MATERIAL
FACT NECESSARY IN ORDER TO MAKE THE STATEMENTS MADE THEREIN, IN THE LIGHT OF THE
CIRCUMSTANCES UNDER WHICH THEY WERE MADE, NOT MISLEADING.
EACH PRESS RELEASE
ISSUED BY THE COMPANY OR ANY OF ITS SUBSIDIARIES DURING THE TWELVE (12) MONTHS
PRECEDING THE DATE OF THIS AGREEMENT DID NOT AT THE