EQUITY.
5.3.
VALID ISSUANCE OF THE NOTES.
THE NOTES, WHEN
ISSUED, SOLD AND DELIVERED IN ACCORDANCE WITH THE TERMS HEREOF FOR THE
CONSIDERATION EXPRESSED HEREIN, WILL BE DULY AND VALIDLY AUTHORIZED AND ISSUED,
FULLY PAID, FREE OF RESTRICTIONS ON TRANSFER, OTHER THAN RESTRICTIONS CONTAINED
OR REFERRED TO IN THE INDENTURE, THE NOTES OR THIS AGREEMENT AND ENFORCEABLE IN
ACCORDANCE WITH THEIR TERMS SUBJECT TO BANKRUPTCY LAWS AND GENERAL PRINCIPLES OF
EQUITY.
BASED IN PART UPON THE REPRESENTATIONS OF THE PURCHASER IN ARTICLE 4 OF
THIS AGREEMENT, THE NOTES WILL BE ISSUED IN COMPLIANCE WITH ALL APPLICABLE
UNITED STATES SECURITIES LAWS.
3
5.4.
FINANCIAL STATEMENTS AND OTHER INFORMATION.
5.4.1.
THE COMPANY HAS PREVIOUSLY FURNISHED TO THE
PURCHASER COPIES OF THE COMPANY'S FILING ON FORM 10-K FOR THE FISCAL YEAR ENDED
FEBRUARY 29, 2008 (THE "COMPANY SEC FILINGS").
5.4.2.
AS OF THE TIME IT WAS FILED WITH THE SEC (OR,
IF AMENDED OR SUPERSEDED BY A FILING PRIOR TO THE DATE OF THIS AGREEMENT, THEN
ON THE DATE OF SUCH FILING):
(I) EACH OF THE COMPANY SEC FILINGS COMPLIED IN
ALL MATERIAL RESPECTS WITH SUCH REQUIREMENTS OF THE SECURITIES ACT OR THE
EXCHANGE ACT AS WERE APPLICABLE THERETO; AND (II) NONE OF THE COMPANY SEC
FILINGS CONTAINED ANY UNTRUE STATEMENT OF A MATERIAL FACT OR OMITTED TO STATE A
MATERIAL FACT REQUIRED TO BE STATED THEREIN OR NECESSARY IN ORDER TO MAKE THE
STATEMENTS THEREIN, IN THE LIGHT OF THE CIRCUMSTANCES UNDER WHICH THEY WERE
MADE, NOT MISLEADING.
5.4.3.
THE FINANCIAL STATEMENTS (INCLUDING ANY
RELATED NOTES) CONTAINED IN THE COMPANY SEC FILINGS FAIRLY PRESENT, IN ALL
MATERIAL RESPECTS, THE CONSOLIDATED FINANCIAL POSITION OF THE COMPANY AND ITS
SUBSIDIARIES AS OF THE RESPECTIVE DATES THEREOF AND THE CONSOLIDATED RESULTS OF
OPERATIONS OF THE COMPANY AND ITS SUBSIDIARIES FOR THE PERIODS COVERED THEREBY
IN ACCORDANCE WITH GAAP APPLIED ON A CONSISTENT BASIS THROUGHOUT THE PERIODS
COVERED (EXCEPT AS MAY BE INDICATED IN THE NOTES TO SUCH FINANCIAL STATEMENTS
OR, IN THE CASE OF UNAUDITED STATEMENTS, AS PERMITTED BY FORM 10-Q OF THE SEC,
AND EXCEPT THAT UNAUDITED FINANCIAL STATEMENTS MAY NOT CONTAIN FOOTNOTES AND ARE
SUBJECT TO YEAR-END ADJUSTMENTS).
5.4.4.
AS OF THE DATE OF THIS AGREEMENT, NEITHER THE
COMPANY NOR ANY OF ITS SUBSIDIARIES HAS ANY LIABILITIES OF THE TYPE REQUIRED TO
BE DISCLOSED IN THE LIABILITIES COLUMN OF A BALANCE SHEET PREPARED IN ACCORDANCE
WITH GAAP, EXCEPT FOR:
(I) LIABILITIES DISCLOSED IN THE FINANCIAL STATEMENTS
(INCLUDING ANY RELATED NOTES) CONTAINED IN THE COMPANY SEC FILINGS;
(II) LIABILITIES INCURRED IN THE ORDINARY COURSE OF BUSINESS SINCE THE DATE
INCLUDED IN THE FINANCIAL STATEMENTS OF THE COMPANY SEC FILINGS; AND
(III) LIABILITIES THAT ARE NOT MATERIAL IN THE AGGREGATE TO THE COMPANY AND ITS
SUBSIDIARIES ON A CONSOLIDATED BASIS.
5.4.5.
THE INFORMATION WITH RESPECT TO THE COMPANY
AND ITS SUBSIDIARIES CONTAINED IN THE PRIVATE PLACEMENT MEMORANDUM DATED
APRIL 2008 RELATING TO $37,500,000 9 3/4% SENIOR SECURED NOTES (THE "SECURED
NOTES") OF THE COMPANY DUE 2010 (THE "PLACEMENT MEMORANDUM") WHEN TAKEN AS A
WHOLE