laws.
(D)
THE PARTIES UNDERSTAND AND AGREE THAT THE
COMMON STOCK PRICE HAS BEEN CALCULATED BASED UPON THE ACCURACY OF THE
REPRESENTATION AND WARRANTY SET FORTH IN SECTION 3.2(A) AND THAT, IN THE EVENT
THE NUMBER OF OUTSTANDING SHARES OF COMPANY COMMON STOCK OR THE NUMBER OF SHARES
OF COMPANY COMMON STOCK ISSUABLE UPON THE EXERCISE OR CONVERSION OF, OR SUBJECT
TO, OPTIONS, WARRANTS, SECURITIES OR OTHER AGREEMENTS EXCEEDS THE AMOUNTS
SPECIFICALLY SET FORTH IN SECTION 3.2(A) (INCLUDING WITHOUT LIMITATION AS A
RESULT OF ANY STOCK SPLIT, STOCK DIVIDEND, INCLUDING ANY DIVIDEND OR
DISTRIBUTION OF SECURITIES CONVERTIBLE INTO SHARES OF THE COMPANY COMMON STOCK,
RECAPITALIZATION, OR OTHER LIKE CHANGE OCCURRING AFTER THE DATE OF THIS
AGREEMENT) OR THE NUMBER OF OPTIONS AND EXERCISE PRICES THEREFOR SET FORTH IN
SECTION 3.2(A) OF THE COMPANY DISCLOSURE SCHEDULE ARE INACCURATELY STATED IN ANY
MANNER ADVERSE TO PARENT OR PURCHASER, THE COMMON STOCK PRICE SHALL BE
APPROPRIATELY ADJUSTED DOWNWARD.
THE PROVISIONS OF THIS PARAGRAPH (D) SHALL
NOT, HOWEVER, AFFECT THE REPRESENTATION SET FORTH IN SECTION 3.2(A).
NOTWITHSTANDING THE FOREGOING, THERE SHALL BE NO ADJUSTMENT PURSUANT TO THIS
PARAGRAPH (D) WITH RESPECT TO THE ISSUANCE OF SHARES OF COMPANY COMMON STOCK
UPON THE EXERCISE OF OPTIONS DISCLOSED ON SECTION 3.2(A) OF THE COMPANY
DISCLOSURE SCHEDULE.
SECTION 1.2.
COMPANY ACTIONS
(A)
THE COMPANY HEREBY CONSENTS TO THE OFFER
AND REPRESENTS AND WARRANTS THAT (I) ITS BOARD OF DIRECTORS, AT A MEETING DULY
CALLED AND HELD ON OCTOBER 10, 2003, HAS DULY AND BY UNANIMOUS VOTE ADOPTED
RESOLUTIONS APPROVING THE OFFER, THE MERGER, THIS AGREEMENT, THE TENDER AND
OPTION AGREEMENT, THE TOP-UP OPTION AGREEMENT AND THE OTHER TRANSACTIONS
CONTEMPLATED HEREBY AND THEREBY (COLLECTIVELY, THE "TRANSACTIONS"), DETERMINING
THAT THE TERMS OF THE OFFER AND THE MERGER ARE FAIR TO, ADVISABLE AND IN THE
BEST INTERESTS OF, THE COMPANY'S SHAREHOLDERS AND RECOMMENDING ACCEPTANCE OF THE
OFFER AND ADOPTION OF THE MERGER AND THIS AGREEMENT BY THE SHAREHOLDERS OF THE
COMPANY, (II) THE COMPANY HAS TAKEN ALL NECESSARY ACTION TO RENDER THE
PROVISIONS OF ANY ANTI-TAKEOVER STATUTE, RULE OR REGULATION THAT TO THE
COMPANY'S KNOWLEDGE MAY BE APPLICABLE TO THE TRANSACTIONS (INCLUDING SECTIONS
2538 THROUGH 2588, INCLUSIVE, OF THE PBCL) INAPPLICABLE WITH RESPECT TO THE
TRANSACTIONS, AND (III) BOENNING & SCATTERGOOD, INC. ("B&S") HAS DELIVERED TO
THE COMPANY'S BOARD OF DIRECTORS ITS OPINION (THE "FAIRNESS OPINION") THAT THE
COMMON STOCK PRICE TO BE RECEIVED BY THE COMPANY'S SHAREHOLDERS IS FAIR, FROM A
FINANCIAL POINT OF VIEW, TO SUCH SHAREHOLDERS AND A COMPLETE AND CORRECT SIGNED
COPY OF SUCH OPINION HAS BEEN DELIVERED BY THE COMPANY TO PARENT.
THE COMPANY
HAS BEEN AUTHORIZED BY B&S TO PERMIT THE INCLUSION OF THE FAIRNESS OPINION (AND,
SUBJECT TO PRIOR REVIEW AND CONSENT BY B&S, A REFERENCE THERETO) IN THE OFFER
DOCUMENTS AND IN THE SCHEDULE 14D-9 REFERRED TO BELOW AND THE PROXY STATEMENT.
THE COMPANY HEREBY CONSENTS TO THE INCLUSION IN THE OFFER DOCUMENTS OF THE
RECOMMENDATIONS OF THE COMPANY'S BOARD OF DIRECTORS DESCRIBED IN THIS SECTION
1.2.
THE COMPANY HAS BEEN ADVISED