REGISTERED FOR PUBLIC SALE OR AN EXEMPTION FROM
REGISTRATION IS AVAILABLE, EXCEPT AS REQUIRED BY FEDERAL SECURITIES LAWS.
4.26
DILUTION.
THE COMPANY UNDERSTANDS THE NATURE OF THE SECURITIES
BEING SOLD HEREBY AND RECOGNIZES THAT THEY MAY HAVE A POTENTIAL DILUTIVE
EFFECT.
THE COMPANY SPECIFICALLY ACKNOWLEDGES THAT ITS OBLIGATION TO ISSUE THE
CONVERSION SHARES AND WARRANT SHARES IS BINDING UPON THE COMPANY AND ENFORCEABLE
REGARDLESS OF THE DILUTION SUCH ISSUANCE MAY HAVE ON THE OWNERSHIP INTERESTS OF
OTHER SHAREHOLDERS OF THE COMPANY.
5.
REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE PURCHASER.
THE PURCHASER HEREBY REPRESENTS AND WARRANTS TO THE COMPANY WITH RESPECT TO
ITSELF OR HIMSELF AS FOLLOWS (SUCH REPRESENTATIONS AND WARRANTIES DO NOT LESSEN
OR OBVIATE THE REPRESENTATIONS AND WARRANTIES OF THE COMPANY SET FORTH IN THIS
AGREEMENT):
5.1
REQUISITE POWER AND AUTHORITY.
PURCHASER HAS ALL NECESSARY POWER
AND AUTHORITY UNDER ALL APPLICABLE PROVISIONS OF LAW TO EXECUTE AND DELIVER THIS
AGREEMENT AND THE RELATED AGREEMENTS AND TO CARRY OUT THEIR PROVISIONS.
ALL
ACTION ON PURCHASER'S PART REQUIRED FOR THE LAWFUL EXECUTION AND DELIVERY OF
THIS AGREEMENT AND THE RELATED AGREEMENTS HAVE BEEN OR WILL BE EFFECTIVELY TAKEN
PRIOR TO THE CLOSING.
UPON THEIR EXECUTION AND DELIVERY, THIS AGREEMENT AND THE
RELATED AGREEMENTS WILL BE VALID AND BINDING OBLIGATIONS OF PURCHASER,
ENFORCEABLE IN ACCORDANCE WITH THEIR TERMS, EXCEPT (A) AS LIMITED BY APPLICABLE
BANKRUPTCY, INSOLVENCY, REORGANIZATION, MORATORIUM OR OTHER LAWS OF GENERAL
APPLICATION AFFECTING ENFORCEMENT OF CREDITORS' RIGHTS, AND (B) AS LIMITED BY
GENERAL PRINCIPLES OF EQUITY THAT RESTRICT THE AVAILABILITY OF EQUITABLE
REMEDIES.
5.2
INVESTMENT REPRESENTATIONS.
PURCHASER UNDERSTANDS THAT THE
SECURITIES ARE BEING OFFERED AND SOLD PURSUANT TO AN EXEMPTION FROM REGISTRATION
CONTAINED IN THE SECURITIES ACT BASED IN PART UPON PURCHASER'S REPRESENTATIONS
CONTAINED IN THE AGREEMENT.
5.3
PURCHASER BEARS ECONOMIC RISK.
PURCHASER HAS SUBSTANTIAL
EXPERIENCE IN EVALUATING AND INVESTING IN PRIVATE PLACEMENT TRANSACTIONS OF
SECURITIES IN COMPANIES SIMILAR TO THE COMPANY SO THAT IT IS CAPABLE OF
EVALUATING THE MERITS AND RISKS OF ITS INVESTMENT IN THE
11
Company and has the capacity to protect its own interests.
Purchaser must bear
the economic risk of this investment until the Securities are registered
pursuant to the Securities Act, or an exemption from registration is available.
5.4
ACQUISITION FOR OWN ACCOUNT.
PURCHASER IS ACQUIRING THE PREFERRED
STOCK FOR PURCHASER'S OWN ACCOUNT FOR INVESTMENT ONLY, AND NOT WITH A VIEW
TOWARDS THEIR DISTRIBUTION.
5.5
PURCHASER CAN PROTECT ITS INTEREST.
PURCHASER REPRESENTS THAT BY
REASON OF ITS, OR OF ITS MANAGEMENT'S, BUSINESS OR FINANCIAL EXPERIENCE,
PURCHASER HAS THE CAPACITY TO PROTECT ITS OWN INTERESTS IN CONNECTION WITH THE
TRANSACTIONS CONTEMPLATED IN THIS AGREEMENT, AND THE RELATED AGREEMENTS.
FURTHER, PURCHASER IS AWARE OF NO PUBLICATION OF ANY ADVERTISEMENT IN CONNECTION
WITH THE TRANSACTIONS CONTEMPLATED IN THE AGREEMENT.
5.6
ACCREDITED INVESTOR.
PURCHASER REPRESENTS THAT IT IS AN
ACCREDITED INVESTOR WITHIN THE MEANING OF REGULATION D UNDER THE SECURITIES ACT.
5.7
LEGENDS.
(A)
THE PREFERRED STOCK SHALL BEAR THE FOLLOWING LEGEND UNTIL THE
PREFERRED STOCK AND CONVERSION SHARES ARE SOLD PURSUANT TO AN EFFECTIVE
REGISTRATION