ISSUED AND SOLD TO SUCH BUYER(S), MINUS THE FEES TO BE PAID DIRECTLY FROM THE
PROCEEDS THE CLOSINGS AS SET FORTH HEREIN, AND (II) THE COMPANY SHALL DELIVER TO
EACH BUYER, CONVERTIBLE DEBENTURES WHICH SUCH BUYER(S) IS PURCHASING IN AMOUNTS
INDICATED OPPOSITE SUCH BUYER'S NAME ON SCHEDULE I, DULY EXECUTED ON BEHALF OF
THE COMPANY.
2.
BUYER'S REPRESENTATIONS AND WARRANTIES.
Each Buyer represents and warrants, severally and not jointly, that:
(A)
INVESTMENT PURPOSE. EACH BUYER IS ACQUIRING THE CONVERTIBLE
DEBENTURES AND, UPON CONVERSION OF CONVERTIBLE DEBENTURES, THE BUYER WILL
ACQUIRE THE CONVERSION SHARES THEN ISSUABLE, FOR ITS OWN ACCOUNT FOR INVESTMENT
ONLY AND NOT WITH A VIEW TOWARDS, OR FOR RESALE IN CONNECTION WITH, THE PUBLIC
SALE OR DISTRIBUTION THEREOF, EXCEPT PURSUANT TO SALES REGISTERED OR EXEMPTED
UNDER THE SECURITIES ACT; PROVIDED, HOWEVER, THAT BY MAKING THE REPRESENTATIONS
HEREIN, SUCH BUYER RESERVES THE RIGHT TO DISPOSE OF THE CONVERSION SHARES AT ANY
TIME IN ACCORDANCE WITH OR PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
COVERING SUCH CONVERSION SHARES OR AN AVAILABLE EXEMPTION UNDER THE SECURITIES
ACT.
(B)
ACCREDITED INVESTOR STATUS. EACH BUYER IS AN "ACCREDITED INVESTOR"
AS THAT TERM IS DEFINED IN RULE 501(A)(3) OF REGULATION D.
(C)
RELIANCE ON EXEMPTIONS. EACH BUYER UNDERSTANDS THAT THE
CONVERTIBLE DEBENTURES ARE BEING OFFERED AND SOLD TO IT IN RELIANCE ON SPECIFIC
EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF UNITED STATES FEDERAL AND STATE
SECURITIES LAWS AND THAT THE COMPANY IS RELYING IN PART UPON THE TRUTH AND
ACCURACY OF, AND SUCH BUYER'S COMPLIANCE WITH, THE REPRESENTATIONS, WARRANTIES,
AGREEMENTS, ACKNOWLEDGMENTS AND UNDERSTANDINGS OF SUCH BUYER SET FORTH HEREIN IN
ORDER TO DETERMINE THE AVAILABILITY OF SUCH EXEMPTIONS AND THE ELIGIBILITY OF
SUCH BUYER TO ACQUIRE SUCH SECURITIES.
(D)
INFORMATION. EACH BUYER AND ITS ADVISORS (AND HIS OR, ITS
COUNSEL), IF ANY, HAVE BEEN FURNISHED WITH ALL MATERIALS RELATING TO THE
BUSINESS, FINANCES AND OPERATIONS OF THE COMPANY AND INFORMATION HE DEEMED
MATERIAL TO MAKING AN INFORMED INVESTMENT DECISION REGARDING HIS PURCHASE OF THE
CONVERTIBLE DEBENTURES AND THE CONVERSION SHARES, WHICH HAVE BEEN REQUESTED BY
SUCH BUYER. EACH BUYER AND ITS ADVISORS, IF ANY, HAVE BEEN AFFORDED THE
OPPORTUNITY TO ASK QUESTIONS OF THE COMPANY AND ITS MANAGEMENT. NEITHER SUCH
INQUIRIES NOR ANY OTHER DUE DILIGENCE INVESTIGATIONS CONDUCTED BY SUCH BUYER OR
ITS ADVISORS, IF ANY, OR ITS REPRESENTATIVES SHALL MODIFY, AMEND OR AFFECT SUCH
BUYER'S RIGHT TO RELY ON THE COMPANY'S REPRESENTATIONS AND WARRANTIES CONTAINED
IN SECTION 3 BELOW. EACH BUYER UNDERSTANDS THAT ITS
3
INVESTMENT IN THE CONVERTIBLE DEBENTURES AND THE CONVERSION SHARES INVOLVES A
HIGH DEGREE OF RISK. EACH BUYER IS IN A POSITION REGARDING THE COMPANY, WHICH,
BASED UPON EMPLOYMENT, FAMILY RELATIONSHIP OR ECONOMIC BARGAINING POWER, ENABLED
AND ENABLES SUCH BUYER TO OBTAIN INFORMATION FROM THE COMPANY IN ORDER TO
EVALUATE THE MERITS AND RISKS OF THIS INVESTMENT. EACH BUYER HAS SOUGHT SUCH
ACCOUNTING, LEGAL AND TAX ADVICE, AS IT HAS CONSIDERED NECESSARY TO MAKE AN
INFORMED INVESTMENT DECISION WITH RESPECT TO ITS ACQUISITION OF THE CONVERTIBLE
DEBENTURES AND THE CONVERSION