BROKERS.
THE COMPANY HAS NO CONTRACT, ARRANGEMENT OR
UNDERSTANDING WITH ANY BROKER, FINDER OR SIMILAR AGENT WITH RESPECT TO THE
TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT.
SECTION 2.14.
NON-OPERATIONAL SUBSIDIARIES.
NEITHER BUGSOLVER.COM, INC.,
TEKINSIGHT E-GOVERNMENT SERVICES, INC. NOR TEKINSIGHT RESEARCH, INC. OPERATES
ANY BUSINESS NOR DOES ANY SUCH ENTITY OWN ANY ASSETS.
9
SECTION 2.15.
FEDERAL RESERVE REGULATIONS.
THE COMPANY IS NOT ENGAGED IN THE
BUSINESS OF EXTENDING CREDIT FOR THE PURPOSE OF PURCHASING OR CARRYING MARGIN
SECURITIES (WITHIN THE MEANING OF REGULATION G OF THE BOARD OF GOVERNORS OF THE
FEDERAL RESERVE SYSTEM), AND NO PART OF THE PROCEEDS OF THE NOTES OR WARRANTS
WILL BE USED TO PURCHASE OR CARRY ANY MARGIN SECURITY OR TO EXTEND CREDIT TO
OTHERS FOR THE PURPOSE OF PURCHASING OR CARRYING ANY MARGIN SECURITY OR IN ANY
OTHER MANNER WHICH WOULD INVOLVE A VIOLATION OF ANY OF THE REGULATIONS OF THE
BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM.
SECTION 2.16.
REPRESENTATIONS COMPLETE.
THE REPRESENTATIONS AND WARRANTIES
MADE BY THE COMPANY IN THIS AGREEMENT, THE STATEMENTS MADE IN ANY CERTIFICATES
FURNISHED BY THE COMPANY PURSUANT TO THIS AGREEMENT, AND THE STATEMENTS MADE BY
THE COMPANY IN ANY DOCUMENTS MAILED, DELIVERED OR FURNISHED TO THE PURCHASERS IN
CONNECTION WITH THIS AGREEMENT, TAKEN AS A WHOLE, DO NOT CONTAIN AND WILL NOT
CONTAIN, AS OF THEIR RESPECTIVE DATES AND AS OF THE CLOSING DATE, TO STATE ANY
MATERIAL FACT NECESSARY IN ORDER TO MAKE THE STATEMENTS CONTAINED HEREIN OR
THEREIN, IN THE LIGHT OF THE CIRCUMSTANCES UNDER WHICH THEY WERE MADE, NOT
MISLEADING.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS
Each Purchaser severally represents and warrants to the Company that:
(A)
IT IS AN "ACCREDITED INVESTOR" WITHIN THE MEANING OF RULE 501
UNDER THE SECURITIES ACT AND WAS NOT ORGANIZED FOR THE SPECIFIC PURPOSE OF
ACQUIRING THE NOTES OR WARRANTS;
(B)
IT HAS SUFFICIENT KNOWLEDGE AND EXPERIENCE IN INVESTING IN
COMPANIES SIMILAR TO THE COMPANY IN TERMS OF THE COMPANY'S STAGE OF DEVELOPMENT
SO AS TO BE ABLE TO EVALUATE THE RISKS AND MERITS OF ITS INVESTMENT IN THE
COMPANY AND IT IS ABLE FINANCIALLY TO BEAR THE RISKS THEREOF;
(C)
IT HAS HAD AN OPPORTUNITY TO DISCUSS THE COMPANY'S BUSINESS,
MANAGEMENT AND FINANCIAL AFFAIRS WITH THE COMPANY'S MANAGEMENT;
(D)
THE NOTES BEING PURCHASED BY IT AND THE WARRANTS BEING ISSUED TO
IT ARE BEING ACQUIRED FOR ITS OWN ACCOUNT FOR THE PURPOSE OF INVESTMENT AND NOT
WITH A VIEW TO OR FOR SALE IN CONNECTION WITH ANY DISTRIBUTION THEREOF;
(E)
IT UNDERSTANDS THAT (I) THE NOTES AND WARRANTS AND THE WARRANT
SHARES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT, BY REASON OF THEIR
ISSUANCE IN A TRANSACTION EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT PURSUANT TO SECTION 4(2) THEREOF OR RULE 505 OR 506 PROMULGATED
UNDER THE SECURITIES ACT, (II) THE NOTES AND WARRANTS AND, UPON CONVERSION
THEREOF, THE WARRANT SHARES MUST BE HELD INDEFINITELY UNLESS A SUBSEQUENT
DISPOSITION THEREOF IS REGISTERED UNDER THE SECURITIES ACT OR IS EXEMPT FROM