Common use of UNDERSTANDING OF THE NATURE OF THE SHARES Clause in Contracts

UNDERSTANDING OF THE NATURE OF THE SHARES. Optionee understands and agrees that: (i) There can be no assurance that the Shares will be registered under the Securities Act or any state securities laws and if they are not so registered, they will only be issued and sold in reliance upon certain exemptions contained in the Securities Act and applicable state securities laws, and the representations and warranties of Optionee contained herein, which will have to be renewed as to the Shares at the times of exercise of the Options, are essential to any claim of exemption by the Company under the Securities Act and such state laws; (ii) If the Shares are not so registered, the Shares will be "restricted securities" as that term is defined in Rule 144 promulgated under the Securities Act; (iii) The Option cannot be exercised and the Shares will not be sold to Optionee and Optionee cannot resell or transfer the Shares without registration under the Securities Act and applicable state securities laws unless the Company receives an opinion of counsel acceptable to it (as to both counsel and the opinion) that such registration is not necessary, the cost of such opinion to be borne by the Company; (iv) Only the Company can register the Shares under the Securities Act and applicable state securities laws; (v) The Company has not made any representations to Optionee that the Company will register the Shares under the Securities Act or any applicable state securities laws, or with respect to compliance with any exemption therefrom; (vi) Optionee is aware of the conditions for Optionee's obtaining an exemption for the resale of the Shares under the Securities Act and any applicable state securities laws; and (vii) The Company may, from time to time, make stop transfer notations in its transfer records to ensure compliance with the Securities Act and any applicable state securities laws, and any additional restrictions imposed by state securities administrators.