CLAIM IN WRITING OF A VIOLATION,
INFRINGEMENT, MISUSE OR MISAPPROPRIATION BY ANY THIRD PARTY (INCLUDING ANY
EMPLOYEE OR FORMER EMPLOYEE OF THE COMPANY) OF ITS RIGHTS TO, OR IN CONNECTION
WITH ANY INTELLECTUAL PROPERTY. THE COMPANY HAS NOT ENTERED INTO ANY AGREEMENT
TO INDEMNIFY ANY OTHER PERSON AGAINST ANY CHARGE OF INFRINGEMENT OF ANY
INTELLECTUAL PROPERTY, OTHER THAN INDEMNIFICATION PROVISIONS CONTAINED IN
PURCHASE ORDERS OR LICENSE AGREEMENTS ARISING IN THE ORDINARY COURSE OF
BUSINESS.
(D)
THE COMPANY HAS NOT DISCLOSED ANY OF ITS TRADE SECRETS, KNOW-HOW,
SOURCE CODES, DATABASES, CUSTOMER LISTS, SCHEMATICS, IDEAS, ALGORITHMS AND
PROCESSES OTHER THAN IN THE ORDINARY COURSE OF BUSINESS WITH REASONABLE
PRECAUTIONS BEING TAKEN (SUCH AS CONFIDENTIALITY AGREEMENTS). THE COMPANY HAS
NOT BREACHED ANY AGREEMENTS OF NON-DISCLOSURE OR CONFIDENTIALITY.
(E)
EACH OF THE MATERIAL COMPUTER SOFTWARE PROGRAMS USED OR HELD FOR
USE IN THE BUSINESS (I) ARE, TO THE KNOWLEDGE THE SELLER, FREE FROM ANY MATERIAL
SOFTWARE DEFECT OR MATERIAL PROGRAMMING ERROR FOR SO LONG AS SUCH SOFTWARE IS
BEING USED IN THE SAME MANNER FOR ITS CURRENT OPERATIONS (II) RUNS IN A
COMMERCIALLY REASONABLE MANNER, (III) CONFORMS IN ALL MATERIAL RESPECTS TO THE
SPECIFICATIONS THEREOF.
(F)
THE COMPANY'S INFORMATION SYSTEMS ARE ADEQUATE AND USABLE FOR THE
USE AND PURPOSES FOR WHICH THEY ARE CURRENTLY USED, ARE IN GOOD OPERATING
CONDITION, AND HAVE BEEN MAINTAINED IN ACCORDANCE WITH GOOD BUSINESS PRACTICE.
4.21
Inventories. The Inventory of the Company as reflected in the
Company Financials are in proper working order and of merchantable quality,
which can be sold in the ordinary course of the Business in a fashion consistent
with the historical sales results, efficiencies, terms, conditions, pricing, and
inventory turnover patterns of the Business.
4.22
Receivables. The Receivables of the Company as reflected in the
Company Financials, consist solely of bona fide accounts receivable generated by
the Business in the ordinary course, which can be collected in the ordinary
course of the Business in a fashion consistent with the historical collection
results, efficiencies, policies, procedures and patterns of the Business. The
Unaudited Financials make proper and adequate provision for all bad and doubtful
debts.
4.23
Residency; Investment Sophistication; Backgrounds.
(A)
THE SELLER IS NOT CONTRACTING HEREUNDER FOR ANY OTHER BENEFICIAL
PURCHASER. THE SELLER IS NOT A U.S. PERSON (AS DEFINED UNDER REGULATION S OF THE
SECURITIES ACT OF 1933, AS AMENDED) OR A PERSON WITHIN THE UNITED STATES AND IT
IS NOT ACQUIRING THE SHARES CONSIDERATION
FOR THE ACCOUNT OF A U.S. PERSON OR A
PERSON WITHIN THE UNITED STATES.
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(B)
THE SHARES CONSIDERATION HAVE NOT BEEN OFFERED TO THE SELLER IN
THE UNITED STATES, AND THE SELLER WAS NOT IN THE UNITED STATES WHEN THE ORDER
FOR THE SHARES CONSIDERATION WAS PLACED.
(C)
THE SELLER IS AWARE THAT THE SHARES CONSIDERATION HAVE NOT BEEN,
NOR WILL THEY BE REGISTERED UNDER THE SECURITIES ACT, OR THE SECURITIES LAWS OF
ANY STATE, EXCEPT AS EXPLICITLY PROVIDED FOR HEREIN AND IN THE REGISTRATION
RIGHTS AGREEMENT, AND THAT THE SHARES CONSIDERATION MAY NOT BE OFFERED OR