III. REPRESENTATIONS BY THE PURCHASERS
3.1 The Purchasers recognize that the purchase of Securities involves a
high degree of risk and is suitable only for persons of adequate financial means
who have no need for liquidity in this investment in that (i) the Purchasers may
not be able to liquidate the Purchasers' investment in the event of an
emergency; (ii) transferability is extremely limited; and (iii) in the event of
a disposition, the Purchasers could sustain a complete loss of the Purchasers'
entire investment.
3.2 The Purchasers represent that (i) the Purchasers are competent to
understand and do understand the nature of the investment; and (ii) the
Purchasers are able to bear the economic risk of this investment.
3.3 The Purchasers hereby represent that the Purchasers have been
furnished by the Company during the course of this transaction with all
information regarding Sector, Histech and DBE which the Purchasers had requested
or desired to know; that all other documents which could be reasonably provided
have been made available for the Purchasers' inspection and review; and that the
Purchasers have been afforded the opportunity to ask questions of and receive
answers from duly authorized officers or other representatives of Sector,
Histech and DBE concerning the terms and conditions of the Agreement, and any
additional information that the Purchasers had requested.
3.4 The Purchasers hereby acknowledge that this sale of Securities has
not been reviewed by the Securities and Exchange Commission (the "SEC") because
of the Company's representations that this is intended to be a private sale
pursuant to Section 4(1) of the 1933 Act. The Purchasers represent that the
Securities are being purchased for the Purchasers' own account, for investment
purposes and not for distribution or resale to others. The Purchasers agree that
the Purchasers will not sell, transfer or otherwise dispose of any of the
Securities unless they are registered under the 1933 Act or unless an exemption
from such registration is available.
3.5 The Purchasers understand that the Securities have not been
registered under the 1933 Act by reason of a claimed exemption under the
provisions of the 1933 Act which depends, in part, upon the Purchasers'
investment intention. In this connection, the Purchasers understand that it is
the position of the SEC that the statutory basis for such exemption would not be
present if the Purchasers' representation merely meant that the Purchasers'
present intention was to hold the Securities for a short period, for a deferred
sale, for a market rise, assuming that a market develops and is maintained, or
for any other fixed period. The Purchasers realize that, in the view of the SEC,
a purchase now with an intent to resell would represent a purchase with an
intent inconsistent with the Purchasers' representation to the Company, and the
SEC might regard such a sale, transfer or other disposition as a deferred sale
for which no exemption from registration is available.
3.6 The Purchasers agree that Sector, Histech and DBE may, if they
desire, permit the transfer of the Securities by the Purchasers out of the
Purchasers' name only when the Purchasers' request for transfer is accompanied
by an opinion of counsel reasonably satisfactory to Sector, Histech and DBE that
the proposed sale, transfer or disposition does not result in a violation of the
1933 Act or any applicable state "Blue Sky" laws (collectively, "Securities
Laws"). The Purchasers agree to hold the Sector, Histech and DBE and their
respective directors, officers and controlling persons and their respective
heirs, representatives, successors and assigns harmless
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and to indemnify them against all liabilities, costs and expenses incurred by
them as a result of any sale, transfer or other disposition of the Securities by
the undersigned Purchasers in violation of any Securities Laws or any
misrepresentation herein.
3.7 The Purchasers consent to the placement of a legend on the
certificates evidencing the Securities stating that they have not been
registered under the 1933 Act and setting forth or referring to the restrictions
on the sale, transfer or other disposition thereof. The Purchasers are aware
that the Company will make a notation in its appropriate records with respect to
the restrictions on the sale, transfer or other disposition of the Securities.
3.8 The Purchasers acknowledge and agree that the Company is relying on
the Purchasers' representations contained in this Agreement and the related
subscription documents in determining whether to sell the Securities to
Purchasers. The Purchasers hereby give the Company authority to call the
Purchasers' bank or place of employment or otherwise review the financial
standing of the Purchasers.
3.9 The Purchasers represent and warrant that all representations made by
Purchasers hereunder are true and correct in all material respects as of the
date of execution hereof, and Purchasers further agree that until the closing on
the Securities subscribed for the Purchasers shall inform the Company
immediately of any changes in any of the representations provided by the
Purchasers hereunder.
3.10 The Purchasers represent and warrant that the Purchasers shall
undertake to complete all filings required by the Securities Exchange Act of
1934, as amended, and any other laws on a timely basis.
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