THEREOF UNDER THE SECURITIES ACT OR APPLICABLE STATE SECURITIES LAWS IN RELIANCE
UPON SECTION 4(2) OF THE SECURITIES ACT AND TRANSACTIONAL EXEMPTIONS FROM
REGISTRATION UNDER APPLICABLE STATE SECURITIES LAWS BASED UPON APPROPRIATE
REPRESENTATIONS OF THE INVESTOR.
AS SUCH, THE CONVERSION SHARES WILL BE SUBJECT
TO TRANSFER RESTRICTIONS SIMILAR TO RESTRICTIONS APPLICABLE TO THE CONVERTIBLE
NOTES.
THE INVESTOR UNDERSTANDS (I) THAT AN EXEMPTION FROM SUCH REGISTRATION IS
NOT PRESENTLY AVAILABLE PURSUANT TO RULE 144 PROMULGATED UNDER THE SECURITIES
ACT BY THE SEC AND (II) THAT IN ANY EVENT THE INVESTOR MAY NOT SELL ANY
SECURITIES ACQUIRED HEREUNDER PURSUANT TO RULE 144 PRIOR TO THE EXPIRATION OF A
ONE-YEAR PERIOD (OR SUCH SHORTER PERIOD AS THE SEC MAY HEREAFTER ADOPT) AFTER
THE INVESTOR HAS ACQUIRED SUCH SECURITIES.
THE INVESTOR UNDERSTANDS THAT ANY
SALES PURSUANT TO RULE 144 CAN BE MADE ONLY IN FULL COMPLIANCE WITH THE
PROVISIONS OF RULE 144.
SECTION 5.4
RECEIPT OF INFORMATION.
THE INVESTOR REPRESENTS THAT THE COMPANY
HAS PROVIDED THE INVESTOR AT A REASONABLE TIME PRIOR TO THE EXECUTION OF THIS
AGREEMENT SUFFICIENT OPPORTUNITY TO ASK QUESTIONS AND RECEIVE ANSWERS FROM THE
COMPANY'S MANAGEMENT CONCERNING THE COMPANY'S BUSINESS, MANAGEMENT AND FINANCIAL
AFFAIRS AND THE TERMS AND CONDITIONS OF THE OFFERING OF THE PURCHASED SECURITIES
AND THE CONVERSION SHARES AND TO OBTAIN ANY ADDITIONAL INFORMATION (WHICH THE
COMPANY POSSESSES OR CAN ACQUIRE WITHOUT UNREASONABLE EFFORT OR EXPENSE) AS MAY
BE NECESSARY TO VERIFY THE ACCURACY OF INFORMATION FURNISHED TO THE INVESTOR.
THE INVESTOR HAS REVIEWED THE REPRESENTATIONS CONCERNING THE COMPANY CONTAINED
IN THIS AGREEMENT.
THE FOREGOING, HOWEVER, DOES NOT LIMIT OR MODIFY THE
REPRESENTATIONS AND WARRANTIES OF THE COMPANY IN THIS AGREEMENT OR THE RIGHT OF
THE INVESTOR TO RELY THEREON.
20
SECTION 5.5
INVESTMENT EXPERIENCE.
THE INVESTOR REPRESENTS THAT IT IS
EXPERIENCED IN EVALUATING AND INVESTING IN SECURITIES OF COMPANIES IN THE
DEVELOPMENT STAGE AND ACKNOWLEDGES THAT IT IS ABLE TO FEND FOR ITSELF, CAN BEAR
THE ECONOMIC RISK OF ITS INVESTMENT, AND HAS SUCH KNOWLEDGE AND EXPERIENCE IN
FINANCIAL OR BUSINESS MATTERS THAT IT IS CAPABLE OF EVALUATING THE MERITS AND
RISKS OF THE INVESTMENT IN THE NOTES AND THE CONVERSION SHARES.
IF OTHER THAN
AN INDIVIDUAL, INVESTOR ALSO REPRESENTS IT HAS NOT BEEN ORGANIZED FOR THE
PURPOSE OF ACQUIRING THE NOTES AND CONVERSION SHARES.
SECTION 5.6
ACCREDITED INVESTOR.
THE INVESTOR IS AN "ACCREDITED INVESTOR"
WITHIN THE MEANING OF SEC RULE 501 OF REGULATION D PROMULGATED UNDER THE ACT, AS
PRESENTLY IN EFFECT.
SECTION 5.7
LEGENDS.
TO THE EXTENT APPLICABLE, EACH CERTIFICATE OR OTHER
DOCUMENT EVIDENCING ANY OF THE PURCHASED SECURITIES SHALL BE ENDORSED WITH THE
LEGENDS SET FORTH BELOW, AND THE INVESTOR COVENANTS THAT, EXCEPT TO THE EXTENT
SUCH RESTRICTIONS ARE WAIVED BY THE COMPANY, THE INVESTOR SHALL NOT TRANSFER THE
SHARES REPRESENTED BY ANY SUCH CERTIFICATE WITHOUT COMPLYING WITH THE
RESTRICTIONS ON TRANSFER DESCRIBED IN THE LEGENDS ENDORSED ON SUCH CERTIFICATE:
"THE SHARES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD,