or of the
institution or threatened institution of any proceedings for any of such
purposes, and the Company will use commercially reasonable efforts to prevent
the issuance of any such order and, if issued, to obtain as soon as reasonably
possible the lifting thereof.
(C)
THE COMPANY SHALL COMPLY WITH THE SECURITIES ACT, THE REGULATIONS,
THE EXCHANGE ACT AND THE RULES AND REGULATIONS THEREUNDER, ALL APPLICABLE STATE
SECURITIES LAWS AND THE RULES AND REGULATIONS THEREUNDER IN THE STATES IN WHICH
THE PLACEMENT AGENT'S COUNSEL HAS ADVISED THE PLACEMENT AGENT THAT THE UNITS ARE
QUALIFIED OR REGISTERED FOR SALE OR EXEMPT FROM SUCH QUALIFICATION OR
REGISTRATION, SO AS TO PERMIT THE CONTINUANCE OF THE SALES OF THE UNITS, AND
WILL FILE WITH THE COMMISSION, AND SHALL PROMPTLY THEREAFTER FORWARD TO THE
PLACEMENT AGENT, ANY AND ALL REPORTS ON FORM D AS ARE REQUIRED.
(D)
THE COMPANY SHALL USE ITS BEST EFFORTS TO QUALIFY THE UNITS FOR
SALE UNDER THE SECURITIES LAWS OF SUCH JURISDICTIONS (WITHIN THE UNITED STATES
AND ITS TERRITORIES) AS MAY BE MUTUALLY AGREED TO BY THE COMPANY AND THE
PLACEMENT AGENT, AND THE COMPANY WILL MAKE SUCH APPLICATIONS AND FURNISH
INFORMATION AS MAY BE REQUIRED FOR SUCH PURPOSES, PROVIDED THAT THE COMPANY WILL
NOT BE REQUIRED TO QUALIFY AS A FOREIGN CORPORATION IN ANY JURISDICTION.
THE
COMPANY WILL, FROM TIME TO TIME, PREPARE AND FILE SUCH STATEMENTS AND REPORTS AS
ARE OR MAY BE REQUIRED TO CONTINUE SUCH QUALIFICATIONS IN EFFECT FOR SO LONG A
PERIOD AS THE PLACEMENT AGENT MAY REASONABLY REQUEST.
(E)
THE COMPANY SHALL PLACE A LEGEND ON THE CERTIFICATES REPRESENTING
THE SHARES AND THE WARRANT SHARES STATING THAT THE SECURITIES EVIDENCED THEREBY
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OR APPLICABLE STATE SECURITIES
LAWS, SETTING FORTH OR REFERRING TO THE APPLICABLE RESTRICTIONS ON
TRANSFERABILITY AND SALE OF SUCH SECURITIES UNDER THE SECURITIES ACT AND
APPLICABLE STATE LAWS.
(F)
THE COMPANY SHALL APPLY THE NET PROCEEDS FROM THE SALE OF THE
UNITS FOR THE PAYMENT OF INTEREST IN THE AGGREGATE AMOUNT OF $31,500 ON, AND THE
POTENTIAL REPAYMENT OR REDEMPTION OF, OUTSTANDING CONVERTIBLE DEBT, DUE DECEMBER
31, 2003, IN THE AMOUNT OF APPROXIMATELY $250,000 AND THE REMAINING PROCEEDS TO
GENERAL CORPORATE AND WORKING CAPITAL PURPOSES.
EXCEPT WITH RESPECT TO THE
CURRENTLY OUTSTANDING CONVERTIBLE DEBT, AND INTEREST ACCRUING THEREON, AND AS
SPECIFICALLY SET FORTH IN THE EXECUTIVE SUMMARY, THE NET PROCEEDS OF THE
OFFERING SHALL NOT BE USED TO REPAY INDEBTEDNESS TO OFFICERS, DIRECTORS OR
STOCKHOLDERS OF THE COMPANY WITHOUT THE PRIOR WRITTEN CONSENT OF THE PLACEMENT
AGENT, EXCEPT FOR THE REIMBURSEMENT FOR REASONABLE AND NECESSARY EXPENSES WHICH
ARE RELATED TO COMPANY BUSINESS OR WHICH ARE INCURRED IN CONNECTION WITH
ATTENDANCE AT BOARD, COMMITTEE OR STOCKHOLDER MEETINGS.
12
(G)
DURING THE OFFERING PERIOD, THE COMPANY SHALL MAKE AVAILABLE FOR
REVIEW BY PROSPECTIVE PURCHASERS OF THE UNITS DURING NORMAL BUSINESS HOURS AT
THE COMPANY'S OFFICES, UPON THEIR REQUEST, COPIES OF THE COMPANY'S MATERIAL
AGREEMENTS FILED WITH THE COMMISSION TO THE EXTENT THAT SUCH DISCLOSURE SHALL