THE TRANSACTIONS CONTEMPLATED THEREBY IS
MERELY INCIDENTAL TO THE PURCHASERS' PURCHASE OF THE SECURITIES. THE COMPANY
FURTHER REPRESENTS TO EACH PURCHASER THAT THE COMPANY'S DECISION TO ENTER INTO
THIS AGREEMENT AND THE OTHER TRANSACTION DOCUMENTS HAS BEEN BASED SOLELY ON THE
19
INDEPENDENT EVALUATION OF THE TRANSACTIONS CONTEMPLATED HEREBY BY THE COMPANY
AND ITS REPRESENTATIVES.
(II)
ACKNOWLEDGMENT REGARDING PURCHASERS' TRADING ACTIVITY.
NOTWITHSTANDING ANYTHING IN THIS AGREEMENT OR ELSEWHERE HEREIN TO THE CONTRARY
(EXCEPT FOR SECTIONS 3.2(F) AND 4.15 HEREOF), IT IS UNDERSTOOD AND ACKNOWLEDGED
BY THE COMPANY THAT (I) NONE OF THE PURCHASERS HAS BEEN ASKED TO AGREE BY THE
COMPANY, NOR HAS ANY PURCHASER AGREED, TO DESIST FROM PURCHASING OR SELLING,
LONG AND/OR SHORT, SECURITIES OF THE COMPANY, OR "DERIVATIVE" SECURITIES BASED
ON SECURITIES ISSUED BY THE COMPANY OR TO HOLD THE SECURITIES FOR ANY SPECIFIED
TERM, (II) PAST OR FUTURE OPEN MARKET OR OTHER TRANSACTIONS BY ANY PURCHASER,
SPECIFICALLY 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) ANY PURCHASER, AND COUNTER-PARTIES IN
"DERIVATIVE" TRANSACTIONS TO WHICH ANY SUCH PURCHASER IS A PARTY, DIRECTLY OR
INDIRECTLY, MAY PRESENTLY HAVE A "SHORT" POSITION IN THE COMMON STOCK, AND (IV)
EACH PURCHASER 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 PURCHASERS MAY ENGAGE
IN HEDGING ACTIVITIES AT VARIOUS TIMES DURING THE PERIOD THAT THE SECURITIES ARE
OUTSTANDING, INCLUDING, WITHOUT LIMITATION, DURING THE PERIODS THAT THE VALUE OF
THE UNDERLYING SHARES DELIVERABLE WITH RESPECT TO SECURITIES ARE BEING
DETERMINED AND (B) SUCH HEDGING ACTIVITIES (IF ANY) COULD REDUCE THE VALUE OF
THE EXISTING STOCKHOLDERS' EQUITY INTERESTS IN THE COMPANY AT AND AFTER THE TIME
THAT THE HEDGING ACTIVITIES ARE BEING CONDUCTED.
THE COMPANY ACKNOWLEDGES THAT
SUCH AFOREMENTIONED HEDGING ACTIVITIES DO NOT CONSTITUTE A BREACH OF ANY OF THE
TRANSACTION DOCUMENTS.
(JJ)
REGULATION M COMPLIANCE.
THE COMPANY HAS NOT, AND TO ITS
KNOWLEDGE NO ONE ACTING ON ITS BEHALF HAS, (I) TAKEN, DIRECTLY OR INDIRECTLY,
ANY ACTION DESIGNED TO CAUSE OR TO RESULT IN THE STABILIZATION OR MANIPULATION
OF THE PRICE OF ANY SECURITY OF THE COMPANY TO FACILITATE THE SALE OR RESALE OF
ANY OF THE SECURITIES, (II) SOLD, BID FOR, PURCHASED, OR PAID ANY COMPENSATION
FOR SOLICITING PURCHASES OF, ANY OF THE SECURITIES OF THE COMPANY OR (III) PAID
OR AGREED TO PAY TO ANY PERSON ANY COMPENSATION FOR SOLICITING ANOTHER TO
PURCHASE ANY OTHER SECURITIES OF THE COMPANY, OTHER THAN, IN THE CASE OF CLAUSES
(II) AND (III), COMPENSATION PAID TO THE COMPANY'S PLACEMENT AGENT IN CONNECTION
WITH THE PLACEMENT OF THE SECURITIES.
3.2
REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS. EACH PURCHASER,
FOR ITSELF AND FOR NO OTHER PURCHASER HEREBY, REPRESENTS AND WARRANTS AS OF THE
DATE HEREOF AND AS OF THE CLOSING DATE TO THE COMPANY AS FOLLOWS:
(A)
ORGANIZATION; AUTHORITY.