INFORMATION REASONABLY REQUESTED), AND TO THE BOOKS,
RECORDS AND PROPERTIES RELATING TO THE COMPANY'S BUSINESS AND OPERATIONS.
6.
PUBLIC ANNOUNCEMENTS/INFORMATION. IT IS UNDERSTOOD THAT THE
COMPANY IS SUBJECT TO THE PUBLIC REPORTING REQUIREMENTS OF THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED, AND, THEREFORE, MAY BE REQUIRED TO MAKE
APPROPRIATE PUBLIC ANNOUNCEMENTS OF THIS LETTER AGREEMENT AND THE TRANSACTIONS
PERTAINING THERETO. NO OTHER ANNOUNCEMENTS, EXCEPT AS MAY BE REQUIRED IN THE
OPINION OF LEGAL COUNSEL TO THE DISCLOSING PARTY TO COMPLY WITH APPLICABLE LAWS,
SHALL BE MADE OF THE TRANSACTION BY ANY PARTY OR THEIR REPRESENTATIVES WITHOUT
THE EXPRESS PRIOR WRITTEN CONSENT OF THE OTHER PARTY. IFL ACKNOWLEDGES THAT IT,
TOGETHER WITH ITS DIRECTORS, OFFICERS, EMPLOYEES AND REPRESENTATIVES WHO ARE
APPRISED OF THIS MATTER, HAVE BEEN ADVISED THAT THE UNITED STATES SECURITIES
LAWS PROHIBIT ANY PERSON WHO POSSESSES OR IS IN PRIVY WITH A PERSON WHO
POSSESSES MATERIAL NON-PUBLIC INFORMATION ABOUT A COMPANY FROM PURCHASING OR
SELLING SECURITIES OF SUCH COMPANY.
7.
CONDUCT OF BUSINESS. UPON ACCEPTANCE HEREOF AND PENDING THE
EXECUTION OF DEFINITIVE AGREEMENTS, EACH OF THE COMPANY AND IFL WILL CONDUCT ITS
BUSINESSES DILIGENTLY, IN GOOD FAITH AND IN THE ORDINARY COURSE OF BUSINESS
CONSISTENT WITH PRIOR PRACTICE. WITHOUT LIMITING THE FOREGOING, NEITHER THE
COMPANY NOR IFL SHALL, WITHOUT THE PRIOR WRITTEN CONSENT OF THE OTHER (WHICH
CONSENT SHALL NOT BE UNREASONABLY WITHHELD OR DELAYED):
3
(A)
DECLARE OR PAY ANY DIVIDEND OR OTHER DISTRIBUTION WITH RESPECT TO
ITS SHARES OF COMMON STOCK;
(B)
AMEND ITS CERTIFICATE OF INCORPORATION OR BY-LAWS; OR
(C)
ISSUE OR SELL OR AGREE TO ISSUE OR SELL ANY OF ITS SECURITIES OR
OPTIONS (IN EXCESS OF THE 2 MILLION COMMON STOCK OPTIONS PRESENTLY AUTHORIZED),
WARRANTS OR OTHER RIGHTS TO PURCHASE SUCH SECURITIES EXCEPT FOR SHARES ISSUED
UPON EXERCISE OF OPTIONS CURRENTLY AUTHORIZED OR OUTSTANDING AND WARRANTS
CURRENTLY OUTSTANDING.
8.
EXCLUSIVITY. THE COMPANY AND IFL AGREE THAT, UNTIL SUCH TIME AS
THIS LETTER AGREEMENT HAS TERMINATED IN ACCORDANCE WITH THE PROVISIONS OF
PARAGRAPH 11 HEREOF, NEITHER THEY NOR ANY OF THEIR REPRESENTATIVES, OFFICERS,
DIRECTORS, AGENTS, EQUITYHOLDERS OR AFFILIATES SHALL INITIATE, SOLICIT,
ENTERTAIN, NEGOTIATE, ACCEPT OR DISCUSS, DIRECTLY OR INDIRECTLY, ANY PROPOSAL OR
OFFER, INCLUDING ANY EXISTING OFFER OR PROPOSAL (AN "ACQUISITION PROPOSAL"), TO
ACQUIRE ALL OR ANY SIGNIFICANT PART OF THE BUSINESS AND PROPERTIES OF THE
COMPANY OR IFL, WHETHER BY MERGER, PURCHASE OF UNITS PURCHASE OF ASSETS OR
OTHERWISE, OR PROVIDE ANY NON-PUBLIC INFORMATION TO ANY THIRD PARTY IN
CONNECTION WITH AN ACQUISITION PROPOSAL OR ENTER INTO ANY AGREEMENT, ARRANGEMENT
OR UNDERSTANDING REQUIRING THEM TO ABANDON, TERMINATE OR FAIL TO CONSUMMATE THE
ACQUISITION. THE COMPANY AND IFL REPRESENT THAT NEITHER THEY NOR ANY OF THEIR
EQUITYHOLDERS OR AFFILIATES IS PARTY TO OR BOUND BY ANY AGREEMENT WITH RESPECT
TO AN ACQUISITION PROPOSAL OTHER THAN UNDER THIS LETTER AGREEMENT. IFL AGREES TO
IMMEDIATELY NOTIFY PALIGENT IF IFL OR ANY OF ITS REPRESENTATIVES, DIRECTORS,
OFFICERS OR AGENTS RECEIVE ANY INDICATIONS OF INTEREST OR ANY ACQUISITION
PROPOSAL, AND WILL COMMUNICATE TO PALIGENT IN REASONABLE DETAIL