OF THE INVESTMENT
COMPANY ACT OF 1940, AS AMENDED.
(BB)
FORM S-3 ELIGIBILITY.
THE COMPANY IS ELIGIBLE TO
REGISTER THE COMPANY COMMON STOCK FOR RESALE BY THE BUYERS UNDER FORM S-3
PROMULGATED UNDER THE 1933 ACT.
(CC)
AVII COMMON STOCK.
(I)
THE TRANSFER OF THE AVII SHARES BY THE
COMPANY HAVE BEEN REGISTERED BY AVII UNDER THE 1933 ACT.
1,000,000 OF THE AVII
SHARES WERE REGISTERED BY AVII PURSUANT TO A REGISTRATION STATEMENT FILED ON
FORM S-3 ON DECEMBER 21, 1999, AS AMENDED ON JANUARY 25, 2000, AND 1,684,211 OF
THE AVII SHARES WERE REGISTERED BY AVII PURSUANT TO A REGISTRATION STATEMENT
FILED ON FORM S-3 ON SEPTEMBER 15, 2000 (THE "AVII REGISTRATION STATEMENTS").
THE "PLAN OF DISTRIBUTION" SECTION UNDER EACH OF THE AVII REGISTRATION
STATEMENTS PERMITS THE PLEDGE AND TRANSFER OF THE AVII SHARES AS REQUIRED
PURSUANT TO THE TRANSACTION DOCUMENTS.
(II)
THE COMPANY IS THE BENEFICIAL AND RECORD
OWNER OF ALL OF THE AVII SHARES, FREE AND CLEAR OF ANY LIENS, AND UPON TRANSFER
IN ACCORDANCE WITH THE APPLICABLE TRANSACTION DOCUMENTS, THE COMPANY WILL
TRANSFER TO THE BUYERS GOOD AND MARKETABLE TITLE TO SUCH AVII SHARES, FREE AND
CLEAR OF ANY LIENS.
UPON ANY SUCH TRANSFER IN ACCORDANCE WITH THE APPLICABLE
TRANSACTION DOCUMENTS TO THE BUYERS OF ANY AVII SHARES, THE AVII SHARES SHALL BE
UNRESTRICTED AND FREELY TRADABLE ON THE PRINCIPAL MARKET WITHOUT ANY DELIVERY OR
OTHER REQUIREMENTS WHATSOEVER AND WITHOUT THE NEED TO MAKE ANY REGISTRATION OR
OTHER FILING WITH THE SEC.
16
(III)
AFTER GIVING EFFECT TO THE TRANSACTIONS
CONTEMPLATED BY THE CONVERSION AND AMENDMENT AGREEMENTS, THE COMPANY HAS NO
LEGAL OBLIGATION, ABSOLUTE OR CONTINGENT, TO ANY OTHER PERSON TO TRANSFER OR
SELL ANY OF THE AVII SHARES.
THERE IS NO ACTION, CLAIM, SUIT, INVESTIGATION OR
PROCEEDING PENDING OR, TO THE KNOWLEDGE OF THE COMPANY, THREATENED BY OR AGAINST
OR AFFECTING THE COMPANY OR THE COMPANY'S OWNERSHIP OF THE AVII SHARES BEFORE
ANY COURT OR GOVERNMENTAL OR REGULATORY AUTHORITY OR BODY, THAT COULD EFFECT THE
ABILITY OF THE COMPANY TO PLEDGE AND TRANSFER TO THE BUYERS ANY AVII SHARES.
THERE ARE NO WRITS, DECREES, INJUNCTIONS OR ORDERS OF ANY COURT OR GOVERNMENTAL
OR REGULATORY AGENCY, AUTHORITY OR BODY OUTSTANDING AGAINST THE COMPANY WITH
RESPECT TO THE AVII SHARES.
4.
COVENANTS.
(A)
BEST EFFORTS.
EACH PARTY SHALL USE ITS
BEST EFFORTS TIMELY TO SATISFY EACH OF THE CONDITIONS TO BE SATISFIED BY IT AS
PROVIDED IN SECTIONS 6 AND 7 OF THIS AGREEMENT.
(B)
FORM D AND BLUE SKY.
THE COMPANY AGREES TO
FILE A FORM D WITH RESPECT TO THE SECURITIES AS REQUIRED UNDER REGULATION D AND
TO PROVIDE A COPY THEREOF TO EACH BUYER PROMPTLY AFTER SUCH FILING.
THE COMPANY
SHALL, ON OR BEFORE THE CLOSING DATE, TAKE SUCH ACTION AS THE COMPANY SHALL
REASONABLY DETERMINE IS NECESSARY IN ORDER TO OBTAIN AN EXEMPTION FOR OR TO
QUALIFY THE SECURITIES FOR SALE TO THE BUYERS AT THE CLOSING PURSUANT TO THIS
AGREEMENT UNDER APPLICABLE SECURITIES OR "BLUE SKY" LAWS OF THE STATES OF