Common use of UNDERSTANDINGS AND ACKNOWLEDGEMENTS Clause in Contracts

UNDERSTANDINGS AND ACKNOWLEDGEMENTS. a. The Purchaser acknowledges that the Shares have not been registered under the Act or qualified under the California Corporate Securities Law of 1968, as amended, or any other applicable blue sky laws in reliance, in part, on the representations and warranties herein. b. The Purchaser understands that (i) the Shares are restricted securities under the federal securities laws (e.g., the Act) insofar as the Shares will be acquired from the Company in a transaction not involving a public offering, (ii) under such laws and applicable regulations, the Shares may be resold without registration under the Act only in certain limited circumstances and (iii) in the absence of registration under the Act, the Shares must be held indefinitely. The Purchaser understands the resale limitations imposed by the Act and is familiar with Rule 144 under the Act, as presently in effect, and the conditions which must be met in order for Rule 144 to be available with respect to the resale of restricted securities. c. The Purchaser understands that any certificates evidencing the Shares may bear one or all of the following legends: (i) THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THEY MAY NOT BE SOLD, OFFERED FOR SALE, TRANSFERRED, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THE SECURITIES UNDER SUCH ACT OR AN OPINION OF COUNSEL OR OTHER EVIDENCE SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED OR UNLESS SOLD PURSUANT TO RULE 144 UNDER SUCH ACT. (ii) Any legend required by applicable state securities laws.

UNDERSTANDINGS AND ACKNOWLEDGEMENTS. a. The Purchaser Subscriber understands, ------------------------------------- acknowledges and agrees with the Company as follows: (a) Neither the execution of this Agreement nor the solicitation of the investment contemplated hereby shall create any obligation of the Company to accept any subscription or complete the Offering. (b) Except as required by law, the Subscriber is not entitled to cancel, terminate or revoke this Agreement or any agreements of the Subscriber hereunder and that this Agreement and such other agreements shall survive the death or disability of the Subscriber and shall be FINAL, DATED APRIL 11, 2005 --------------------------- binding upon and inure to the benefit of the parties and their heirs, executors, administrators, successors, legal representatives and permitted assigns. If the Subscriber is more than one person, the obligations of the Subscriber hereunder shall be joint and several and the agreements, representations, warranties and acknowledgments herein contained shall be deemed to be made by and be binding upon each such person and his/her heirs, executors, administrators, successors, legal representatives and permitted assigns. (c) No federal or state agency has made any finding or determination as to the accuracy or adequacy of the Preliminary Memorandum or the Memorandum or as to the suitability of the Offering for investment nor any recommendation or endorsement of the Shares. (d) The Offering is intended to be exempt from registration under the Securities Act by virtue of Section 4(2) of the Securities Act and the provisions of Regulation D thereunder, which is in part dependent upon the truth, completeness and accuracy of the statements made by the Subscriber herein. (e) There can be no assurance that the Subscriber will be able to sell or dispose of the Shares. It is understood that in order not to jeopardize the Offering's exempt status under Section 4(2) of the Securities Act and Regulation D, any transferee will, at a minimum, be required to fulfill the investor suitability requirements thereunder. (f) The Subscriber acknowledges that the Shares have information contained in each of the Preliminary Memorandum and the Memorandum is confidential and non-public and agrees that all such information shall be kept in confidence by the Subscriber and neither used for the Subscriber's personal benefit (other than in connection with this subscription) nor disclosed to any third party for any reason; provided, however, that this confidentiality obligation shall not been registered under the Act or qualified under the California Corporate Securities Law of 1968, as amended, or apply to any other applicable blue sky laws in reliance, in part, on the representations and warranties herein. b. The Purchaser understands such information that (i) is part of the Shares are restricted securities under the federal securities laws (e.g., the Act) insofar as the Shares will be acquired from the Company in a transaction not involving a public offeringknowledge or literature, (ii) under such laws and applicable regulations, becomes part of the Shares may be resold without registration under the Act only in certain limited circumstances and public knowledge or literature (except as a result of a breach of this provision) or (iii) is received from third parties (except third parties who disclose such information in violation of any confidentiality agreements or obligations, including, without limitation, any subscription agreement entered into with the absence of registration under the ActCompany). In addition, the Shares must Subscriber may disclose any information as may be held indefinitely. The Purchaser understands the resale limitations imposed required by the Act and is familiar with Rule 144 under the Actlaw or applicable legal process; provided, as presently in effecthowever, and the conditions which must be met in order for Rule 144 to be available with respect to the resale of restricted securities. c. The Purchaser understands that extent permitted by law or applicable legal process, the Subscriber shall provide the Company at least five business days prior written notice before making any certificates evidencing the Shares may bear one or all of the following legends: (i) THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THEY MAY NOT BE SOLD, OFFERED FOR SALE, TRANSFERRED, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THE SECURITIES UNDER SUCH ACT OR AN OPINION OF COUNSEL OR OTHER EVIDENCE SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED OR UNLESS SOLD PURSUANT TO RULE 144 UNDER SUCH ACTsuch disclosure. (iig) Any legend required by applicable state securities lawsThe representations and warranties of the Subscriber contained herein and in any other writing delivered in connection with the transactions contemplated hereby shall be true and correct in all respects on and as of the date of the Closing of any sale of Shares to the Subscriber if made on and as of such date and shall survive the execution and delivery of this Agreement and the purchase of Shares.

UNDERSTANDINGS AND ACKNOWLEDGEMENTS. a. The Each Purchaser acknowledges that the Shares Securities have not been registered under the Act or qualified under the California Corporate Securities Law of 1968, as amended, or any other applicable blue sky laws in reliance, in part, on the representations and warranties herein. b. The Each Purchaser understands that (i) the Shares Securities are “restricted securities securities” under the federal Federal securities laws (e.g., the Act) insofar as the Shares Securities will be acquired from the Company in a transaction not involving a public offering, (ii) under such laws and applicable regulations, the Shares Securities may be resold without registration under the Act only in certain limited circumstances and (iii) in the absence of registration under the Act, Act (which is not presently contemplated and with respect to which the Shares Company has no obligation) the Securities must be held indefinitely. The Each Purchaser understands the resale limitations imposed by the Act and is familiar with Rule 144 under the Act, as presently in effect, and the conditions which must be met in order for Rule 144 to be available with respect to the resale of “restricted securities”. c. The Each Purchaser understands that any certificates evidencing the Shares may and Warrants will bear one or all of the following legends: (i) THESE SECURITIES THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDEDAMENDED (THE “SECURITIES ACT”), OR ANY APPLICABLE STATE SECURITIES LAWS. THEY THE SHARES HAVE BEEN ACQUIRED FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TOWARD RESALE AND MAY NOT BE OFFERED, SOLD, OFFERED FOR DELIVERED AFTER SALE, TRANSFERRED, PLEDGED PLEDGED, HYPOTHECATED OR HYPOTHECATED OTHERWISE TRANSFERRED IN THE ABSENCE OF A AN EFFECTIVE REGISTRATION STATEMENT IN EFFECT FILED BY THE ISSUER WITH RESPECT THE U.S. SECURITIES AND EXCHANGE COMMISSION COVERING THE SHARES UNDER THE SECURITIES ACT OR AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SAID ACT THAT IS THEN APPLICABLE TO THE SECURITIES UNDER SUCH ACT OR SHARES. AN OPINION OF COUNSEL OR OTHER EVIDENCE SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT ISSUER MAY BE REQUIRED BY THE ISSUER OR UNLESS SOLD PURSUANT TO RULE 144 UNDER SUCH ACTTHE TRANSFER AGENT. (ii) Any legend required by applicable state securities laws. (iii) Any legend required by any applicable shareholders’ agreement.

UNDERSTANDINGS AND ACKNOWLEDGEMENTS. a. The A. Each Purchaser acknowledges that the Shares Units have not been registered under the Act or qualified under the California Corporate Securities Law of 1968, as amended, or any other applicable blue sky laws in reliance, in part, on the representations and warranties herein. b. The B. Each Purchaser understands that (i) the Shares securities offered as part of the Units, (the "Securities") are "restricted securities securities" under the federal securities laws (e.g.E.G., the Act) insofar as the Shares Securities will be acquired from the Company in a transaction not involving a public offering, (ii) under such laws and applicable regulations, the Shares Securities may be resold without registration under the Act only in certain limited circumstances and (iii) in the absence of registration under the Act, Act (which is not presently contemplated and with respect to which the Shares Company has no obligation) the Securities must be held indefinitely. The Each Purchaser understands the resale limitations imposed by the Act and is familiar with Rule 144 under the Act, as presently in effect, and the conditions which must be met in order for Rule 144 to be available with respect to the resale of "restricted securities". Each Purchaser understands that the Company does not presently meet conditions for the availability of Rule 144 under certain circumstances (E.G., the provision of current "public company" information.) c. The C. Each Purchaser understands that any certificates evidencing the Shares may Securities making up the Units will bear one or all of the following legends: (i) THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THEY MAY NOT BE SOLD, OFFERED FOR SALE, TRANSFERRED, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THE SECURITIES UNDER SUCH ACT OR AN OPINION OF COUNSEL OR OTHER EVIDENCE SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED OR UNLESS SOLD PURSUANT TO RULE 144 UNDER SUCH ACT." (ii) Any legend required by applicable state securities laws. (iii) Any legend required by any applicable shareholders' agreement.

UNDERSTANDINGS AND ACKNOWLEDGEMENTS. The Officer agrees as follows: a. The Purchaser acknowledges She or he understands that the Shares certificates or other instruments representing the Settlement Shares, until such time as the resale of the securities have not been registered under the Securities Act or qualified under the California Corporate Securities Law of 19681933, as amendedamended (the “Securities Act”) and all applicable “blue sky” securities laws of any state, or any other such legend is not otherwise required pursuant to applicable blue sky laws in reliancelaw, in part, on the representations and warranties herein. b. The Purchaser understands that (i) the Shares are restricted securities under the federal securities laws (e.g., the Act) insofar as the Shares will be acquired from the Company in a transaction not involving a public offering, (ii) under such laws and applicable regulations, the Shares may be resold without registration under the Act only in certain limited circumstances and (iii) in the absence of registration under the Act, the Shares must be held indefinitely. The Purchaser understands the resale limitations imposed by the Act and is familiar with Rule 144 under the Act, as presently in effect, and the conditions which must be met in order for Rule 144 to be available with respect to the resale of restricted securities. c. The Purchaser understands that any certificates evidencing the Shares may shall bear one or all of the following legends: (i) THESE legend: “THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED. THEY AMENDED (THE “SECURITIES ACT”), OR UNDER ANY OTHER APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES AND MAY NOT BE TRANSFERRED, SOLD, OFFERED FOR SALEASSIGNED, TRANSFERREDPLEDGED, PLEDGED HYPOTHECATED OR HYPOTHECATED IN THE ABSENCE OF OTHERWISE DISPOSED EXCEPT (A) PURSUANT TO A REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO EFFECTIVE UNDER THE SECURITIES UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS, OR AN OPINION OF COUNSEL OR OTHER EVIDENCE SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED OR UNLESS SOLD (B) PURSUANT TO RULE 144 UNDER AN EXEMPTION FROM REGISTRATION THEREUNDER. HEDGING TRANSACTIONS INVOLVING SUCH SECURITIES MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE SECURITIES ACT.” (iib. She or he acknowledges that the Settlement Shares are highly speculative in nature and that she or he has such sophistication and experience in business and financial matters as to be capable of evaluating the merits and risks of the investment. In connection with the delivery of the Settlement Shares, she or he has not relied upon the Company for investment, legal or tax advice, or other professional advice, and has in all cases sought or elected not to seek the advice of her or his own personal investment advisers, legal counsel and tax advisers. She or he is able, without impairing her or his financial conditions, to bear the economic risk of, and withstand a complete loss of the investment and can otherwise be reasonably assumed to have the capacity to protect her or his own interests in connection with her or his investment in the Settlement Shares. c. She or he acknowledges that the Settlement Shares have not been and will not be registered under Securities Act, or any applicable securities laws of any state of the United States, and the Settlement Shares are being issued to her or him in reliance upon Rule 506(b) Any legend required by of Regulation D under the Securities Act and/or Section 4(a)(2) under the Securities Act and similar exemptions under applicable securities laws of any state of the United States. d. She or he acknowledges that the Settlement Shares are “restricted securities”, as such term is defined under Rule 144 of the Securities Act, and may not be offered, sold, pledged, or otherwise transferred, directly or indirectly, without prior registration under the Securities Act and applicable state securities laws, or pursuant to an exemption from the registration requirements of the Securities Act and applicable securities laws of any state of the United States. Subject to compliance with applicable laws, upon request by the Officer, Company counsel shall issue an opinion to the Company’s transfer agent for the removal of any restrictions on the Settlement Shares, or the Officer can deliver an opinion from counsel satisfactory to the Company, acting reasonably, for the removal of any restrictions on the Settlement Shares, and the Company shall instruct its transfer agent to accept such opinion. e. She or he acknowledges that she or he is not acquiring the Settlement Shares as a result of “general solicitation” or “general advertising” (as such terms are used in Regulation D under the Securities Act).

UNDERSTANDINGS AND ACKNOWLEDGEMENTS. a. The Purchaser acknowledges that the Shares Securities have not been been: (i) registered under the Act Act, or qualified under the California Corporate Securities Law of 1968, as amended, or any other applicable blue sky laws in the United States in reliance, in part, on the representations and warranties herein; or (ii) qualified by a prospectus in any jurisdiction in Canada. b. The Purchaser understands that (i) the Shares Securities are “restricted securities securities” under the United States federal securities laws (e.g., the Act) insofar as the Shares Securities will be acquired from the Company in a transaction not involving a public offering, (ii) under such laws and applicable regulations, the Shares Securities may be resold without registration under the Act only in certain limited circumstances and (iii) in the absence of registration under the Act, Act (which is not presently contemplated and with respect to which the Shares Company has no obligation) the Securities must be held indefinitely. The Each Purchaser understands the resale limitations imposed by the Act and is familiar with Rule 144 under the Act, as presently in effect, and the conditions which must be met in order for Rule 144 to be available with respect to the resale of “restricted securities”. Each Purchaser understands that the Company does not presently meet conditions for the availability of Rule 144 under certain circumstances (e.g., the provision of current “public company” information). The Purchaser further understands that the Securities may not be transferred or resold in Canada unless a prospectus in respect of the Securities has been filed and receipted in their local jurisdiction except as permitted by National Instrument 45-102 Resale of Securities (adopted in Quebec as Regulation 45-102 respecting Resale of Securities). c. The Purchaser understands that any certificates evidencing the Shares may Securities will bear one or all of the following legends: (i) “THESE SECURITIES HAVE NOT BEEN REGISTERED WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THEY AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE SOLD, OFFERED FOR SALE, TRANSFERRED, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF A SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO UNDER THE SECURITIES UNDER SUCH ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL OR OTHER EVIDENCE SATISFACTORY TO THE COMPANY THAT TRANSFEROR TO SUCH REGISTRATION IS NOT REQUIRED OR UNLESS SOLD PURSUANT EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO RULE 144 UNDER SUCH ACTTHE COMPANY’S COUNSEL.” (ii) “THESE SECURITIES ARE BEING OFFERED TO INVESTORS WHO ARE NOT U.S.PERSONS (AS DEFINED IN REGULATION S UNDER THE SECURITIES ACT) AND WITHOUT REGISTRATION WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION UNDER THE SECURITIES ACT IN RELIANCE UPON REGULATION S PROMULGATED UNDER THE SECURITIES ACT, TRANSFER OF THESE SHARES IS PROHIBITED, EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF REGULATION S, PURSUANT TO REGISTRATION UNDER THE SECURITIES ACT, OR PURSUANT TO AVAILABLE EXEMPTION FROM REGISTRATION. HEDGING TRANSACTIONS MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE SECURITIES ACT. THIS CERTIFICATE MAY NOT BE TRANSFERRED UNTIL AFTER ONE YEAR FROM THE DATE OF THIS CERTIFICATE.” (iii) Any legend required by applicable state securities laws. (iv) Any legend required by any applicable shareholders’ agreement.