Exhibit 10.1

EXECUTION COPY

 

AMENDED AND RESTATED

 

SECURITIES PURCHASE AGREEMENT

 

BY AND AMONG

 

TONTINE CAPITAL PARTNERS, L.P.,

 

TONTINE PARTNERS, L.P.,

 

TONTINE 25 OVERSEAS MASTER FUND, L.P.

 

AND

 

TOWER TECH HOLDINGS INC.

 

 

 

JANUARY 3, 2008

 

 

 

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TABLE OF CONTENTS

 

 

 

 

 

Page

 

 

 

 

ARTICLE 1   Definitions

1

 

 

 

 

ARTICLE 2   Purchase and Sale of Shares

4

 

 

 

 

 

2.1

Purchase of Shares

4

 

2.2

Purchase Price for Shares and Form of Payment; Delivery

4

 

2.3

Closing Date

4

 

 

 

 

ARTICLE 3   Buyers’ Representations and Warranties

4

 

 

 

 

 

3.1

Organization and Qualification

4

 

3.2

Authorization; Enforcement

4

 

3.3

Securities Matters

5

 

3.4

Information

5

 

3.5

Restrictions on Transfer

5

 

3.6

Consents

6

 

 

 

 

ARTICLE 4   Representations and Warranties of the Company

6

 

 

 

 

 

4.1

Organization and Qualification

6

 

4.2

Authorization; Enforcement

6

 

4.3

Capitalization; Valid Issuance of Securities

7

 

4.4

No Conflicts

7

 

4.5

SEC Documents; Financial Statements

8

 

4.6

Absence of Certain Changes

9

 

4.7

Absence of Litigation

9

 

4.8

Intellectual Property

9

 

4.9

Tax Status

9

 

4.10

Permits; Compliance

10

 

4.11

Environmental Matters

10

 

4.12

Title to Property

11

 

4.13

No Investment Company or Real Property Holding Company

11

 

4.14

No Brokers

11

 

4.15

Registration Rights

11

 

4.16

Exchange Act Registration

11

 

4.17

Labor Relations

11

 

4.18

Transactions with Affiliates and Employees

12

 

4.19

Insurance

12

 

4.20

Approved Acquisitions of Shares; No Anti-Takeover Provisions

12

 

4.21

ERISA

12

 

4.22

Disclosure

13

 

 

 

 

ARTICLE 5   Covenants

13

 

 

 

 

 

5.1

Form D; Blue Sky Laws

13

 

5.2

Use of Proceeds

13

 

5.3

Expenses

13

 

5.4

No Integration

13

 

5.5

Board Designee(s)

13

 

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5.6

Observation Rights

13

 

5.7

Approval of Acquisition

13

 

5.8

Participation in Future Issuances

14

 

 

 

 

ARTICLE 6   Conditions To The Company’s Obligation

14

 

 

 

 

 

6.1

Delivery of Transaction Documents

14

 

6.2

Payment of Purchase Price

14

 

6.3

Representations and Warranties

14

 

6.4

Litigation

14

 

6.5

Acquisition of Target

14

 

6.6

No Prohibition

14

 

 

 

 

ARTICLE 7   Conditions to The Buyers’ Obligation

14

 

 

 

 

 

7.1

Delivery of Transaction Documents; Issuance of Shares

15

 

7.2

Representations and Warranties

15

 

7.3

Consents

15

 

7.4

Litigation

15

 

7.5

Opinion

15

 

7.6

No Material Adverse Change

15

 

7.7

Acquisition of Target

15

 

7.8

No Prohibition

15

 

 

 

 

ARTICLE 8   Termination

15

 

 

 

 

 

8.1

Termination Provisions

15

 

8.2

Effect of Termination

16

 

 

 

 

ARTICLE 9   Indemnification

16

 

 

 

 

 

9.1

Indemnification by the Company

16

 

9.2

Notification

16

 

 

 

 

ARTICLE 10   Governing Law; Miscellaneous

17

 

 

 

 

 

10.1

Governing Law

17

 

10.2

Counterparts; Electronic Signatures

17

 

10.3

Headings

17

 

10.4

Severability

17

 

10.5

Entire Agreement; Amendments

17

 

10.6

Notices

18

 

10.7

Successors and Assigns

19

 

10.8

Third Party Beneficiaries

19

 

10.9

Publicity

19

 

10.10

Further Assurances

19

 

10.11

No Strict Construction

19

 

10.12

Rights Cumulative

19

 

10.13

Survival

19

 

10.14

Knowledge

19

 

10.15

Assignment to T25

19

 

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Amended and Restated Securities Purchase Agreement

 

 

This AMENDED AND RESTATED SECURITIES PURCHASE AGREEMENT, dated as of January 3,
2008, is entered into by and among TOWER TECH HOLDINGS INC., a Nevada
corporation (the “Company”), Tontine Capital Partners, L.P. (“TCP”), Tontine
Partners, L.P. (“TP” and a “Buyer”), and Tontine 25 Overseas Master Fund, L.P. 
(“T25,” a “Buyer,” and collectively with TP, the “Buyers”).

 

RECITALS:

 

A.            In connection with providing financing for the Company’s proposed
acquisition of Energy Maintenance Services, LLC (“Target”), TCP and TP entered
into a Securities Purchase Agreement with the Company, dated as of December 28,
2007 (the “Original Agreement”).

 

B.            The parties to the Original Agreement desire to amend and restate
the Original Agreement to provide for T25’s assumption of TCP’s obligations
under the Original Agreement and for the increase in the number of Shares (as
defined below) to be purchased by TP.

 

C.            The total financing being provided by the Buyers to the Company
hereunder shall consist of the purchase by the Buyers of 2,031,250 shares (the
“Shares”) of common stock, $0.001 par value per share at $8.48 per share, for a
total purchase price of $17,225,000; and

 

D.            The Company and the Buyers are executing and delivering this
Agreement in reliance upon the exemptions from securities registration afforded
by Section 4(2) of the 1933 Act and Rule 506.

 

AGREEMENT

 

NOW THEREFORE, the Company, TCP and the Buyers hereby agree as follows:

 

ARTICLE 1
DEFINITIONS

 

“1933 Act” means the Securities Act of 1933, as amended.

 

“1934 Act” means the Securities Exchange Act of 1934, as amended.

 

“2006-2007 SEC Documents” has the meaning set forth in Section 3.4.

 

“Acquisition” means the proposed acquisition by the Company of the Target
pursuant to that certain Member Interest Purchase Agreement dated December 9,
2007 among the Company, Target and the members of the Target (the “Target
MIPA”).

 

“Action” means any action, suit claim, inquiry, notice of violation, proceeding
(including any partial proceeding such as a deposition) or investigation against
or affecting the Company, any of its Subsidiaries or any of their respective
properties before or by any court, arbitrator, governmental or administrative
agency, regulatory authority (federal, state, county, local or foreign), public
board, stock market, stock exchange or trading facility.

 

“Agreement” means this Amended and Restated Securities Purchase Agreement.

 

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“August 2007 Securities Purchase Agreement” means that certain Securities
Purchase Agreement dated August 22, 2007, by and among the Company, TCP, TCOMF,
T25, TOF and TP.

 

“BF Registration Rights Agreement” means that certain Registration Rights
Agreement by and among the Company and certain shareholders of Brad Foote Gear
Works, Inc.

 

“Buyer” and “Buyers” have the meaning set forth in the preamble.

 

“Claim” has the meaning set forth in Section 9.2.

 

“Closing” has the meaning set forth in Section 2.3.

 

“Closing Date” has the meaning set forth in Section 2.3.

 

“Code” has the meaning set forth in Section 4.13.

 

“Common Stock” means the Company’s common stock, $0.001 par value per share.

 

“Company” has the meaning set forth in the preamble.

 

“Consent” means any approval, consent, ratification, waiver, or other
authorization (including any Governmental Authorization).

 

“Environmental Laws” has the meaning set forth in Section 4.11.

 

“ERISA” has the meaning set forth in Section 4.21.

 

“GAAP” has the meaning set forth in Section 4.5.

 

“Governmental Authorization” means any approval, consent, license, permit,
waiver, or other authorization issued, granted, given, or otherwise made
available by or under the authority of any Governmental Body or pursuant to any
Legal Requirement.

 

“Governmental Body” means any: (a) nation, state, province, county, city, town,
village, district, or other jurisdiction of any nature; (b) federal, state,
provincial, local, municipal, foreign, or other government; (c) governmental or
quasi-governmental authority of any nature (including any governmental agency,
branch, department, official, or entity and any court or other tribunal);
(d) multi-national organization or body; or (e) body exercising, or entitled to
exercise, any administrative, executive, judicial, legislative, police,
regulatory, or taxing authority or power of any nature.

 

“Hazardous Materials” has the meaning set forth in Section 4.11.

 

“Indemnified Party” has the meaning set forth in Section 9.2.

 

“Initial Securities Purchase Agreement” means that certain Securities Purchase
Agreement dated March 1, 2007, by and among the Company, TCP and TCOMF.

 

“Intellectual Property” has the meaning set forth in Section 4.8.

 

“Investment Company” has the meaning set forth in Section 4.13.

 

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“Legal Requirement” means any federal, state, local, municipal, foreign,
international, multinational or other law, rule, regulation, order, judgment,
decree, ordinance, policy or directive, including those entered, issued, made,
rendered or required by any court, administrative or other governmental body,
agency or authority, or any arbitrator that has jurisdiction over the Company or
the Buyers.

 

“Material Adverse Effect” means any material adverse effect on the business,
operations, assets, financial condition or prospects of the Company.

 

 “NRS” has the meaning set forth in Section 4.20.

 

“Original Agreement” has the meaning set forth in the Recitals.

 

“Per Share Price” means $8.48 per Share.

 

“Permits” has the meaning set forth in Section 4.10.

 

“Purchase Price” has the meaning set forth in Section 2.2.

 

 “Registration Rights Agreement” means the Registration Rights Agreement dated
March 1, 2007, by and among the Company, TCP and TCOMF, T25, TOF and TP, as
amended on October 19, 2007 pursuant to which the Company has agreed under
certain circumstances to register the resale of the Shares under the 1933 Act
and the rules and regulations promulgated thereunder, and applicable state
securities laws.

 

“Rule 506” means Rule 506 of Regulation D promulgated under the 1933 Act.

 

“SEC” means the United States Securities and Exchange Commission.

 

“SEC Documents” has the meaning set forth in Section 4.5.

 

 “Shares” has the meaning set forth in the Recitals.

 

“Subsidiaries” means with respect to the Company, Tower Tech Systems, Inc, a
Wisconsin corporation, Brad Foote Gear Works, Inc., an Illinois corporation, and
R.B.A. Inc., a Wisconsin corporation.

 

“T25” has the meaning set forth in the preamble.

 

 “Target” has the meaning set forth in the Recitals.

 

“Target MIPA” has the meaning set forth in the definition of Acquisition.

 

 “TCOMF” means Tontine Capital Overseas Master Fund, L.P.

 

“TCP” has the meaning set forth in the preamble.

 

“TOF” means Tontine Overseas Fund, Ltd.

 

“TP” has the meaning set forth in the preamble.

 

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“Transaction Documents” means this Agreement and any other documents
contemplated by this Agreement.

 

“Transfer Instructions” has the meaning set forth in Section 2.2.

 

ARTICLE 2
PURCHASE AND SALE OF SHARES

 

2.1           PURCHASE OF SHARES.  SUBJECT TO THE TERMS AND CONDITIONS OF THIS
AGREEMENT, ON THE CLOSING DATE, THE COMPANY SHALL ISSUE AND SELL THE SHARES, AND
THE BUYERS SHALL PURCHASE THE SHARES.  THE NUMBER OF SHARES TO BE PURCHASED BY
EACH BUYER  IS IDENTIFIED IN SCHEDULE 1 ATTACHED HERETO.

 

2.2           PURCHASE PRICE FOR SHARES AND FORM OF PAYMENT; DELIVERY.  ON THE
CLOSING DATE THE BUYERS SHALL PAY THE PER SHARE PRICE FOR THE SHARES, FOR A
TOTAL PRICE OF $17,225,000 (THE “PURCHASE PRICE”).  THE PURCHASE PRICE SHALL BE
PAID BY WIRE TRANSFER OF IMMEDIATELY AVAILABLE FUNDS IN ACCORDANCE WITH THE
COMPANY’S WRITTEN INSTRUCTIONS.  AT THE CLOSING, UPON PAYMENT OF THE PURCHASE
PRICE THE COMPANY WILL DELIVER IRREVOCABLE WRITTEN INSTRUCTIONS (“TRANSFER
INSTRUCTIONS”) TO THE TRANSFER AGENT FOR THE COMPANY’S COMMON STOCK TO ISSUE
CERTIFICATES REPRESENTING THE SHARES REGISTERED IN THE NAME OF EACH BUYER AND TO
DELIVER SUCH CERTIFICATES TO OR AT THE DIRECTION OF EACH BUYER.  THE COMPANY
SHALL NOT HAVE THE POWER TO REVOKE OR AMEND THE TRANSFER INSTRUCTIONS WITHOUT
THE WRITTEN CONSENT OF THE BUYERS.

 

2.3           CLOSING DATE.  SUBJECT TO THE TERMS OF THIS AGREEMENT, THE CLOSING
OF THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT SHALL BE HELD ON OR BEFORE
THE LATER OF (I) THE DATE THAT IS THREE (3) BUSINESS DAYS AFTER THE DATE THAT
THE LAST OF THE CONDITIONS IN ARTICLE 6 AND ARTICLE 7 HAVE BEEN SATISFIED, OR
SUCH OTHER TIME AS MAY BE MUTUALLY AGREED UPON BY THE PARTIES TO THIS AGREEMENT;
OR (II) THE CLOSING DATE OF THE ACQUISITION SO LONG AS ALL OF CONDITIONS IN
ARTICLE 6 AND ARTICLE 7 HAVE BEEN SATISFIED (THE “CLOSING DATE”), AT THE OFFICES
OF BARACK FERRAZZANO KIRSCHBAUM & NAGELBERG LLP, 200 WEST MADISON STREET,
SUITE 3900, CHICAGO, ILLINOIS 60606 OR AT SUCH OTHER LOCATION OR BY SUCH OTHER
METHOD (INCLUDING EXCHANGE OF SIGNED DOCUMENTS) AS MAY BE MUTUALLY AGREED UPON
BY THE PARTIES TO THIS AGREEMENT (“CLOSING”).

 

ARTICLE 3
BUYERS’ REPRESENTATIONS AND WARRANTIES

 

Each Buyer represents and warrants to the Company that:

 

3.1           ORGANIZATION AND QUALIFICATION.  EACH OF THE BUYERS IS AN ENTITY
OF THE TYPE IDENTIFIED ON SCHEDULE 1 ATTACHED HERETO, DULY ORGANIZED, VALIDLY
EXISTING AND IN GOOD STANDING UNDER THE LAWS OF THE JURISDICTION OF ITS
ORGANIZATION, WITH FULL POWER AND AUTHORITY TO PURCHASE THE SHARES AND OTHERWISE
PERFORM ITS OBLIGATIONS UNDER THIS AGREEMENT AND THE OTHER TRANSACTION
DOCUMENTS.

 

3.2           AUTHORIZATION; ENFORCEMENT.  EACH BUYER HAS THE REQUISITE POWER
AND AUTHORITY TO ENTER INTO THIS AGREEMENT AND CONSUMMATE THE TRANSACTIONS
CONTEMPLATED HEREBY.  THIS AGREEMENT AND EACH OF THE OTHER TRANSACTION DOCUMENTS
TO BE EXECUTED BY THE BUYERS AND THE CONSUMMATION OF THE TRANSACTIONS
CONTEMPLATED HEREBY AND THEREBY HAVE BEEN DULY AND VALIDLY AUTHORIZED BY, AND
DULY EXECUTED AND DELIVERED ON BEHALF OF, SUCH BUYER.  THIS AGREEMENT AND EACH
OF THE OTHER TRANSACTION DOCUMENTS TO BE EXECUTED BY THE BUYERS CONSTITUTES THE
VALID AND BINDING AGREEMENT OF SUCH BUYER ENFORCEABLE IN ACCORDANCE WITH ITS
TERMS, EXCEPT AS SUCH ENFORCEABILITY MAY BE LIMITED BY:  (I) APPLICABLE
BANKRUPTCY, INSOLVENCY, REORGANIZATION, MORATORIUM OR OTHER SIMILAR LAWS IN
EFFECT THAT LIMIT CREDITORS’ RIGHTS GENERALLY; (II) EQUITABLE LIMITATIONS ON THE
AVAILABILITY OF SPECIFIC REMEDIES; AND (III) PRINCIPLES OF EQUITY.

 

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3.3           SECURITIES MATTERS.  IN CONNECTION WITH THE COMPANY’S COMPLIANCE
WITH APPLICABLE SECURITIES LAWS:

 

a.             Such Buyer understands that the Shares are being offered and sold
to it in reliance upon specific exemptions from the registration requirements of
United States and state securities laws and that the Company is relying upon the
truth and accuracy of, and such Buyer’s compliance with, the representations,
warranties, agreements, acknowledgments and understandings of such Buyer set
forth herein in order to determine the availability of such exemption and the
eligibility of such Buyer to acquire the Shares.

 

b.             Such Buyer is purchasing the Shares for its own account, not as a
nominee or agent, for investment purposes and not with a present view towards
resale, except pursuant to sales exempted from registration under the 1933 Act,
or registered under the 1933 Act as contemplated by the Registration Rights
Agreement.

 

c.             Such Buyer is an “accredited investor” as that term is defined in
Rule 501(a) of Regulation D under the 1933 Act, and has such knowledge and
experience in financial and business matters as to be capable of evaluating the
merits and risks of an investment in the Shares.  Such Buyer understands that
its investment in the Shares involves a significant degree of risk and that,
except as set forth in this Agreement, the Company has made no representations
or assurances concerning the present or prospective value of the Shares being
purchased hereunder.  Such Buyer understands that no United States federal or
state agency or any other government or governmental agency has passed upon or
made any recommendation or endorsement of the Shares.

 

3.4           INFORMATION.  SUCH BUYER HAS CONDUCTED ITS OWN DUE DILIGENCE
EXAMINATION OF THE COMPANY’S BUSINESS, FINANCIAL CONDITION, RESULTS OF
OPERATIONS, AND PROSPECTS.  IN CONNECTION WITH SUCH INVESTIGATION, SUCH BUYER
AND ITS REPRESENTATIVES (I) HAVE REVIEWED THE COMPANY’S FORM 10-KSB FOR THE
FISCAL YEARS ENDED DECEMBER 31, 2005 AND DECEMBER 31, 2006, THE COMPANY’S
QUARTERLY REPORT ON FORM 10-QSB FOR THE THREE MOST RECENTLY CONCLUDED INTERIM
PERIODS AND THE COMPANY’S CURRENT REPORTS ON FORM 8-K OR FORM 8-K/A FILED IN
2006 AND 2007 (AND ALL EXHIBITS INCLUDED THEREIN AND FINANCIAL STATEMENTS AND
SCHEDULES THERETO AND DOCUMENTS (OTHER THAN EXHIBITS TO SUCH DOCUMENTS)
INCORPORATED BY REFERENCE THEREIN, BEING HEREINAFTER REFERRED TO HEREIN AS THE
“2006-2007 SEC DOCUMENTS”), (II) HAVE PARTICIPATED IN BOARD OF DIRECTOR MEETINGS
OF THE COMPANY PURSUANT TO (A) ITS OBSERVATION RIGHTS (AS DEFINED IN THE INITIAL
PURCHASE AGREEMENT) AND (B) THROUGH ITS NOMINEES TO THE COMPANY’S BOARD OF
DIRECTORS APPOINTED PURSUANT TO THE TERMS OF THE AUGUST 2007 SECURITIES PURCHASE
AGREEMENT, (III)  HAVE BEEN GIVEN AN OPPORTUNITY TO ASK QUESTIONS, TO THE EXTENT
SUCH BUYER CONSIDERED NECESSARY, AND HAVE RECEIVED ANSWERS FROM, OFFICERS OF THE
COMPANY CONCERNING THE BUSINESS, FINANCES AND OPERATIONS OF THE COMPANY AND
INFORMATION RELATING TO THE OFFER AND SALE OF THE SHARES, AND (IV) HAVE RECEIVED
OR HAD AN OPPORTUNITY TO OBTAIN SUCH ADDITIONAL INFORMATION AS THEY DEEM
NECESSARY TO MAKE AN INFORMED INVESTMENT DECISION WITH RESPECT TO THE PURCHASE
OF THE SHARES.

 

3.5           RESTRICTIONS ON TRANSFER.  SUCH BUYER UNDERSTANDS THAT EXCEPT AS
PROVIDED IN THE REGISTRATION RIGHTS AGREEMENT, THE ISSUANCE OF THE SHARES HAS
NOT BEEN AND IS NOT BEING REGISTERED UNDER THE 1933 ACT OR ANY APPLICABLE STATE
SECURITIES LAWS. SUCH BUYER MAY BE REQUIRED TO HOLD THE SHARES INDEFINITELY AND
THE SHARES MAY NOT BE TRANSFERRED UNLESS (I) THE SHARES ARE SOLD PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE 1933 ACT, OR (II) SUCH BUYER SHALL
HAVE DELIVERED TO THE COMPANY AN OPINION OF COUNSEL TO THE EFFECT THAT THE
SHARES TO BE SOLD OR TRANSFERRED MAY BE SOLD OR TRANSFERRED PURSUANT TO AN
EXEMPTION FROM SUCH REGISTRATION, WHICH OPINION SHALL BE REASONABLY ACCEPTABLE
TO THE COMPANY. SUCH BUYER UNDERSTANDS THAT UNTIL SUCH TIME AS THE RESALE OF THE
SHARES HAS BEEN REGISTERED UNDER THE 1933 ACT AS CONTEMPLATED BY THE
REGISTRATION RIGHTS AGREEMENT, OR OTHERWISE MAY BE SOLD

 

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PURSUANT TO AN EXEMPTION FROM REGISTRATION, CERTIFICATES EVIDENCING THE SHARES
MAY BEAR A RESTRICTIVE LEGEND IN SUBSTANTIALLY THE FOLLOWING FORM (AND A
STOP-TRANSFER ORDER MAY BE PLACED AGAINST TRANSFER OF THE CERTIFICATES
EVIDENCING SUCH SHARES):

 

“THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 (THE “ACT”).  THE SHARES MAY NOT BE OFFERED FOR SALE,
SOLD, OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE ACT, OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
ACT, THE AVAILABILITY OF WHICH IS TO BE ESTABLISHED TO THE SATISFACTION OF THE
CORPORATION.”

 

3.6           CONSENTS.  EXCEPT FOR SUCH CONSENTS AS BUYERS MAY BE REQUIRED TO
OBTAIN PRIOR TO CLOSING AND DESCRIBED IN SCHEDULE 3.6, NO BUYER WILL BE REQUIRED
TO OBTAIN ANY CONSENT FROM ANY PERSON OR ENTITY IN CONNECTION WITH THE EXECUTION
AND DELIVERY OF THIS AGREEMENT OR THE CONSUMMATION OR PERFORMANCE OF ANY OF THE
TRANSACTIONS CONTEMPLATED HEREBY.

 

ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE COMPANY

 

Except as set forth in the Company’s Disclosure Schedule attached hereto, the
Company represents and warrants to the Buyers that:

 

4.1           ORGANIZATION AND QUALIFICATION.  THE COMPANY HAS NO SUBSIDIARIES
OTHER THAN THE SUBSIDIARIES.  THE COMPANY AND EACH OF ITS SUBSIDIARIES IS A
CORPORATION, LIMITED PARTNERSHIP, LIMITED LIABILITY COMPANY, OR JOINT VENTURE AS
APPLICABLE, DULY ORGANIZED, VALIDLY EXISTING AND IN GOOD STANDING UNDER THE LAWS
OF THE JURISDICTION IN WHICH IT IS INCORPORATED OR ORGANIZED, WITH CORPORATE,
LIMITED LIABILITY OR LIMITED PARTNERSHIP POWER AND AUTHORITY TO OWN, LEASE, USE
AND OPERATE ITS PROPERTIES AND TO CARRY ON ITS BUSINESS AS NOW OPERATED AND
CONDUCTED.  THE COMPANY AND EACH OF ITS SUBSIDIARIES IS DULY QUALIFIED AS A
FOREIGN CORPORATION, LIMITED LIABILITY COMPANY OR LIMITED PARTNERSHIP TO DO
BUSINESS AND IS IN GOOD STANDING IN EACH JURISDICTION IN WHICH ITS OWNERSHIP OR
USE OF PROPERTY OR THE NATURE OF THE BUSINESS CONDUCTED BY IT MAKES SUCH
QUALIFICATION NECESSARY, EXCEPT WHERE THE FAILURE TO BE SO QUALIFIED OR IN GOOD
STANDING WOULD NOT HAVE A MATERIAL ADVERSE EFFECT.  NEITHER THE COMPANY NOR ANY
SUBSIDIARY IS IN VIOLATION OF ANY PROVISION OF ITS RESPECTIVE CERTIFICATE OR
ARTICLES OF INCORPORATION, PARTNERSHIP AGREEMENT, BYLAWS OR OTHER ORGANIZATIONAL
OR CHARTER DOCUMENTS, AS THE SAME MAY HAVE BEEN AMENDED.

 

4.2           AUTHORIZATION; ENFORCEMENT.  THE COMPANY HAS ALL REQUISITE
CORPORATE POWER AND AUTHORITY TO ENTER INTO AND PERFORM THIS AGREEMENT AND EACH
OF THE OTHER TRANSACTION DOCUMENTS AND TO CONSUMMATE THE TRANSACTIONS
CONTEMPLATED HEREBY AND THEREBY AND TO ISSUE THE SHARES, IN ACCORDANCE WITH THE
TERMS HEREOF AND THEREOF.  THE EXECUTION AND DELIVERY OF THIS AGREEMENT AND EACH
OF THE OTHER TRANSACTION DOCUMENTS BY THE COMPANY AND THE CONSUMMATION BY IT OF
THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY (INCLUDING WITHOUT LIMITATION,
THE ISSUANCE OF THE SHARES) HAVE BEEN DULY AUTHORIZED BY THE COMPANY’S BOARD OF
DIRECTORS AND NO FURTHER CONSENT OR AUTHORIZATION OF THE COMPANY, ITS BOARD OF
DIRECTORS, OR ITS STOCKHOLDERS IS REQUIRED.  THIS AGREEMENT AND EACH OF THE
OTHER TRANSACTION DOCUMENTS HAVE BEEN DULY EXECUTED AND DELIVERED BY THE
COMPANY.  THIS AGREEMENT AND EACH OF THE OTHER TRANSACTION DOCUMENTS WILL
CONSTITUTE UPON EXECUTION AND DELIVERY BY THE COMPANY, A LEGAL, VALID AND
BINDING OBLIGATION OF THE COMPANY ENFORCEABLE AGAINST THE COMPANY IN ACCORDANCE
WITH ITS TERMS, EXCEPT AS SUCH ENFORCEABILITY MAY BE LIMITED BY:  (I) APPLICABLE
BANKRUPTCY, INSOLVENCY, REORGANIZATION, MORATORIUM OR OTHER SIMILAR LAWS IN
EFFECT THAT LIMIT CREDITORS’ RIGHTS GENERALLY; (II) EQUITABLE LIMITATIONS ON THE
AVAILABILITY OF SPECIFIC REMEDIES; (III) PRINCIPLES OF EQUITY (REGARDLESS OF
WHETHER SUCH ENFORCEMENT

 

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IS CONSIDERED IN A PROCEEDING IN LAW OR IN EQUITY); AND (IV) TO THE EXTENT
RIGHTS TO INDEMNIFICATION AND CONTRIBUTION MAY BE LIMITED BY FEDERAL SECURITIES
LAWS OR THE PUBLIC POLICY UNDERLYING SUCH LAWS.

 

4.3           CAPITALIZATION; VALID ISSUANCE OF SECURITIES .  AS OF THE DATE
HEREOF, THE AUTHORIZED CAPITAL STOCK OF THE COMPANY CONSISTS OF 100,000,000
SHARES OF COMMON STOCK, OF WHICH 76,275,912 SHARES ARE ISSUED AND OUTSTANDING,
AND NO SHARES ARE HELD BY THE COMPANY AS TREASURY SHARES, AND 10,000,000 SHARES
OF PREFERRED STOCK, OF WHICH NO SHARES ARE ISSUED AND OUTSTANDING.  ALL OF SUCH
OUTSTANDING SHARES OF COMMON STOCK ARE DULY AUTHORIZED, VALIDLY ISSUED, FULLY
PAID AND NONASSESSABLE.  THE SHARES HAVE BEEN DULY AUTHORIZED AND WHEN ISSUED
PURSUANT TO THE TERMS HEREOF WILL BE VALIDLY ISSUED, FULLY PAID AND
NONASSESSABLE AND WILL NOT BE SUBJECT TO ANY ENCUMBRANCES, PREEMPTIVE RIGHTS OR
ANY OTHER SIMILAR CONTRACTUAL RIGHTS OF THE STOCKHOLDERS OF THE COMPANY OR ANY
OTHER PERSON.  NO SHARES OF CAPITAL STOCK OF THE COMPANY ARE SUBJECT TO
PREEMPTIVE RIGHTS OF THE STOCKHOLDERS OF THE COMPANY OR ANY LIENS OR
ENCUMBRANCES IMPOSED THROUGH THE ACTIONS OR FAILURE TO ACT OF THE COMPANY.  AS
OF THE DATE OF THIS AGREEMENT, EXCEPT TO THE EXTENT DESCRIBED IN THE PRECEDING
SENTENCE AND SCHEDULE 4.3 ATTACHED HERETO, (I) THERE ARE NO OUTSTANDING OPTIONS,
WARRANTS, SCRIP, RIGHTS TO SUBSCRIBE FOR, PUTS, CALLS, RIGHTS OF FIRST REFUSAL,
AGREEMENTS, UNDERSTANDINGS, CLAIMS OR OTHER COMMITMENTS OR RIGHTS OF ANY
CHARACTER WHATSOEVER RELATING TO, OR SECURITIES OR RIGHTS CONVERTIBLE INTO OR
EXCHANGEABLE FOR ANY SHARES OF CAPITAL STOCK OF THE COMPANY OR ANY OF ITS
SUBSIDIARIES, OR ARRANGEMENTS BY WHICH THE COMPANY OR ANY OF ITS SUBSIDIARIES IS
OR MAY BECOME BOUND TO ISSUE ADDITIONAL SHARES OF CAPITAL STOCK, (II) THERE ARE
NO AGREEMENTS OR ARRANGEMENTS UNDER WHICH THE COMPANY OR ANY OF ITS SUBSIDIARIES
IS OBLIGATED TO REGISTER THE SALE OF ANY OF ITS OR THEIR SECURITIES UNDER THE
1933 ACT (EXCEPT THE REGISTRATION RIGHTS AGREEMENT AND THE BF REGISTRATION
RIGHTS AGREEMENT) AND (III) THERE ARE NO ANTI-DILUTION OR PRICE ADJUSTMENT
PROVISIONS CONTAINED IN ANY SECURITY ISSUED BY THE COMPANY (OR IN ANY AGREEMENT
PROVIDING RIGHTS TO SECURITY HOLDERS OTHER THAN THE INITIAL SECURITIES PURCHASE
AGREEMENT AND AUGUST 2007 SECURITIES PURCHASE AGREEMENT) THAT WILL BE TRIGGERED
BY THE ISSUANCE OF THE SHARES.  EXCEPT AS MAY BE DESCRIBED IN ANY DOCUMENTS
WHICH HAVE BEEN PUBLICLY FILED BY ANY OF THE COMPANY’S STOCKHOLDERS, TO THE
COMPANY’S KNOWLEDGE, THERE ARE NO AGREEMENTS BETWEEN THE COMPANY’S STOCKHOLDERS
WITH RESPECT TO THE VOTING OR TRANSFER OF THE COMPANY’S CAPITAL STOCK OR WITH
RESPECT TO ANY OTHER ASPECT OF THE COMPANY’S AFFAIRS.

 

4.4           NO CONFLICTS.  THE EXECUTION, DELIVERY AND PERFORMANCE OF THIS
AGREEMENT AND EACH OF THE OTHER TRANSACTION DOCUMENTS BY THE COMPANY AND THE
CONSUMMATION BY THE COMPANY OF THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY
(INCLUDING, WITHOUT LIMITATION, THE ISSUANCE OF SHARES) WILL NOT (I) CONFLICT
WITH OR RESULT IN A VIOLATION OF ANY PROVISION OF THE ARTICLES OF INCORPORATION,
AS AMENDED, OF THE COMPANY OR THE BYLAWS, AS AMENDED, OF THE COMPANY,
(II) VIOLATE OR CONFLICT WITH, OR RESULT IN A BREACH OF ANY PROVISION OF, OR
CONSTITUTE A DEFAULT (OR AN EVENT WHICH WITH NOTICE OR LAPSE OF TIME OR BOTH
COULD BECOME A DEFAULT) UNDER, OR GIVE TO OTHERS ANY RIGHTS OF TERMINATION,
AMENDMENT, ACCELERATION OR CANCELLATION OF, ANY MATERIAL AGREEMENT, INDENTURE,
PATENT, PATENT LICENSE OR INSTRUMENT TO WHICH THE COMPANY OR ANY OF ITS
SUBSIDIARIES IS A PARTY, OR (III) RESULT IN A VIOLATION OF ANY LEGAL REQUIREMENT
(INCLUDING FEDERAL AND STATE SECURITIES LAWS AND REGULATIONS AND REGULATIONS OF
ANY SELF-REGULATORY ORGANIZATIONS TO WHICH THE COMPANY OR ITS SECURITIES ARE
SUBJECT) APPLICABLE TO THE COMPANY OR ANY OF ITS SUBSIDIARIES OR BY WHICH ANY
PROPERTY OR ASSET OF THE COMPANY OR ANY OF ITS SUBSIDIARIES IS BOUND OR AFFECTED
(EXCEPT FOR SUCH CONFLICTS, DEFAULTS, TERMINATIONS, AMENDMENTS, ACCELERATIONS,
CANCELLATIONS AND VIOLATIONS AS WOULD NOT, INDIVIDUALLY OR IN THE AGGREGATE,
HAVE A MATERIAL ADVERSE EFFECT).  EXCEPT AS SET FORTH IN SCHEDULE 4.4, NEITHER
THE COMPANY NOR ANY OF ITS SUBSIDIARIES IS IN VIOLATION OF ITS CERTIFICATE OR
ARTICLES OF INCORPORATION, BYLAWS OR OTHER ORGANIZATIONAL DOCUMENTS AND NEITHER
THE COMPANY NOR ANY OF ITS SUBSIDIARIES IS IN DEFAULT (AND NO EVENT HAS OCCURRED
WHICH WITH NOTICE OR LAPSE OF TIME WOULD RESULT IN A DEFAULT) UNDER, AND NEITHER
THE COMPANY NOR ANY OF ITS SUBSIDIARIES HAS TAKEN ANY ACTION OR FAILED TO TAKE
ANY ACTION THAT WOULD GIVE TO OTHERS ANY RIGHTS OF TERMINATION, AMENDMENT,
ACCELERATION OR CANCELLATION OF, ANY AGREEMENT OR INSTRUMENT TO WHICH THE
COMPANY OR ANY OF ITS SUBSIDIARIES IS A PARTY OR BY WHICH ANY PROPERTY OR ASSETS
OF THE COMPANY OR ANY OF ITS SUBSIDIARIES IS BOUND OR AFFECTED, EXCEPT FOR
POSSIBLE DEFAULTS AS WOULD NOT, INDIVIDUALLY OR IN THE AGGREGATE, HAVE A
MATERIAL ADVERSE EFFECT.  EXCEPT WITH

 

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RESPECT TO ANY FILINGS OR NOTICES RELATED TO THE ISSUANCE OF THE SHARES TO BE
FILED WITH THE OTC BULLETIN BOARD, IF ANY, AND AS REQUIRED UNDER THE 1933 ACT
AND ANY APPLICABLE STATE SECURITIES LAWS, THE COMPANY IS NOT REQUIRED TO OBTAIN
ANY CONSENT, AUTHORIZATION OR ORDER OF, OR MAKE ANY FILING OR REGISTRATION WITH,
ANY COURT, GOVERNMENTAL AGENCY, REGULATORY AGENCY, SELF REGULATORY ORGANIZATION
OR STOCK MARKET OR ANY THIRD PARTY IN ORDER FOR IT TO EXECUTE, DELIVER OR
PERFORM ANY OF ITS OBLIGATIONS UNDER THE TRANSACTION DOCUMENTS.  ALL CONSENTS,
AUTHORIZATIONS, ORDERS, FILINGS AND REGISTRATIONS THAT THE COMPANY IS REQUIRED
TO EFFECT OR OBTAIN PURSUANT TO THE PRECEDING SENTENCE HAVE BEEN OBTAINED OR
EFFECTED ON OR PRIOR TO THE DATE HEREOF.

 

4.5           SEC DOCUMENTS; FINANCIAL STATEMENTS.

 

A.     EXCEPT AS SET FORTH ON SCHEDULE 4.5, SINCE DECEMBER 31, 2005, THE COMPANY
HAS TIMELY FILED ALL REPORTS, SCHEDULES, FORMS, STATEMENTS AND OTHER DOCUMENTS
REQUIRED TO BE FILED BY IT WITH THE SEC PURSUANT TO THE REPORTING REQUIREMENTS
OF THE 1933 ACT AND THE 1934 ACT (ALL OF THE FOREGOING FILED PRIOR TO THE DATE
HEREOF AND ALL EXHIBITS INCLUDED THEREIN AND FINANCIAL STATEMENTS AND SCHEDULES
THERETO AND DOCUMENTS (OTHER THAN EXHIBITS TO SUCH DOCUMENTS) INCORPORATED BY
REFERENCE THEREIN, BEING HEREINAFTER REFERRED TO HEREIN AS THE “SEC DOCUMENTS”),
OR HAS TIMELY FILED FOR A VALID EXTENSION OF SUCH TIME OF FILING AND HAS FILED
ANY SUCH SEC DOCUMENTS PRIOR TO THE EXPIRATION OF ANY SUCH EXTENSION.  AS OF
THEIR RESPECTIVE DATES, THE SEC DOCUMENTS COMPLIED IN ALL MATERIAL RESPECTS WITH
THE REQUIREMENTS OF THE SECURITIES ACT AND THE EXCHANGE ACT AND THE RULES AND
REGULATIONS OF THE SEC PROMULGATED THEREUNDER APPLICABLE TO THE SEC DOCUMENTS,
AND NONE OF THE SEC DOCUMENTS, AT THE TIME THEY WERE FILED WITH THE SEC,
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 LIGHT OF THE CIRCUMSTANCES UNDER WHICH THEY WERE MADE, NOT
MISLEADING, EXCEPT AS SUBSEQUENTLY DISCLOSED IN LATER-FILED SEC DOCUMENTS.

 

B.     AS OF THEIR RESPECTIVE DATES, THE FINANCIAL STATEMENTS OF THE COMPANY
INCLUDED IN THE SEC DOCUMENTS COMPLIED AS TO FORM IN ALL MATERIAL RESPECTS WITH
APPLICABLE ACCOUNTING REQUIREMENTS AND THE PUBLISHED RULES AND REGULATIONS OF
THE SEC WITH RESPECT THERETO.  SUCH FINANCIAL STATEMENTS HAVE BEEN PREPARED IN
ACCORDANCE WITH UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (“GAAP”),
CONSISTENTLY APPLIED, DURING THE PERIODS INVOLVED (EXCEPT (I) AS MAY BE
OTHERWISE INDICATED IN SUCH FINANCIAL STATEMENTS OR THE NOTES THERETO, OR
(II) IN THE CASE OF UNAUDITED INTERIM STATEMENTS, TO THE EXTENT THEY MAY NOT
INCLUDE FOOTNOTES, YEAR END ADJUSTMENTS OR MAY BE CONDENSED OR SUMMARY
STATEMENTS) AND FAIRLY PRESENT IN ALL MATERIAL RESPECTS THE CONSOLIDATED
FINANCIAL POSITION OF THE COMPANY AND ITS CONSOLIDATED SUBSIDIARIES AS OF THE
DATES THEREOF AND THE CONSOLIDATED RESULTS OF THEIR OPERATIONS AND CASH FLOWS
FOR THE PERIODS THEN ENDED (SUBJECT, IN THE CASE OF UNAUDITED STATEMENTS, TO
NORMAL YEAR-END AUDIT ADJUSTMENTS).  EXCEPT AS SET FORTH IN THE FINANCIAL
STATEMENTS OF THE COMPANY INCLUDED IN THE SEC DOCUMENTS, THE COMPANY HAS NO
LIABILITIES, CONTINGENT OR OTHERWISE, OTHER THAN (I) LIABILITIES INCURRED IN THE
ORDINARY COURSE OF BUSINESS SUBSEQUENT TO DECEMBER 31, 2006, AND
(II) OBLIGATIONS UNDER CONTRACTS AND COMMITMENTS INCURRED IN THE ORDINARY COURSE
OF BUSINESS AND NOT REQUIRED UNDER GENERALLY ACCEPTED ACCOUNTING PRINCIPLES TO
BE REFLECTED IN SUCH FINANCIAL STATEMENTS, WHICH, INDIVIDUALLY OR TAKEN IN THE
AGGREGATE WOULD NOT REASONABLY BE EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT.

 

C.     THE COMPANY HAS ESTABLISHED AND MAINTAINS DISCLOSURE CONTROLS AND
PROCEDURES (AS SUCH TERM IS DEFINED IN RULE 13A-15(E) UNDER THE 1934 ACT).  SUCH
DISCLOSURE CONTROLS AND PROCEDURES:  (A) ARE DESIGNED TO ENSURE THAT MATERIAL
INFORMATION RELATING TO THE COMPANY AND ITS SUBSIDIARIES IS MADE KNOWN TO THE
COMPANY’S CHIEF EXECUTIVE OFFICER, PRESIDENT, CHIEF OPERATING OFFICER AND ITS
CHIEF FINANCIAL OFFICER BY OTHERS WITHIN THOSE ENTITIES, PARTICULARLY DURING THE
PERIODS IN WHICH THE COMPANY’S REPORTS AND FILINGS UNDER THE 1934 ACT ARE BEING
PREPARED, (B) HAVE BEEN EVALUATED FOR EFFECTIVENESS AS OF THE END OF THE MOST
RECENT ANNUAL PERIOD REPORTED TO THE SEC, AND (C) ARE EFFECTIVE TO PERFORM THE
FUNCTIONS FOR WHICH THEY WERE ESTABLISHED.  EXCEPT AS SET FORTH ON SCHEDULE 4.5,
NEITHER THE AUDITORS OF THE COMPANY NOR THE BOARD OF DIRECTORS OF THE COMPANY
HAS BEEN ADVISED OF: (X) ANY SIGNIFICANT DEFICIENCIES OR MATERIAL WEAKNESSES IN
THE DESIGN OR OPERATION OF THE INTERNAL CONTROLS OVER FINANCIAL REPORTING (AS
SUCH

 

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TERM IS DEFINED IN RULE 13A-15(F) UNDER THE 1934 ACT) OF THE COMPANY THAT HAVE
MATERIALLY AFFECTED THE COMPANY’S INTERNAL CONTROL OVER FINANCIAL REPORTING; OR
(Y) ANY FRAUD, WHETHER OR NOT MATERIAL, THAT INVOLVES MANAGEMENT OR OTHER
EMPLOYEES WHO HAVE A ROLE IN THE INTERNAL CONTROLS OVER FINANCIAL REPORTING OF
THE COMPANY.

 

4.6           ABSENCE OF CERTAIN CHANGES.  EXCEPT WITH RESPECT TO THE
ACQUISITION, TRANSACTIONS DISCLOSED IN THE SEC DOCUMENTS, AND THE TRANSACTIONS
CONTEMPLATED HEREBY AND BY EACH OF THE OTHER TRANSACTION DOCUMENTS, SINCE
DECEMBER 31, 2006, (I) THE COMPANY AND EACH OF ITS SUBSIDIARIES HAS CONDUCTED
ITS BUSINESS ONLY IN THE ORDINARY COURSE, CONSISTENT WITH PAST PRACTICE, AND
SINCE THAT DATE, NO CHANGES HAVE OCCURRED WHICH WOULD REASONABLY BE EXPECTED TO
HAVE A MATERIAL ADVERSE EFFECT; AND (II) THE COMPANY HAS NOT INCURRED ANY
LIABILITIES (CONTINGENT OR OTHERWISE) OTHER THAN (A) TRADE PAYABLES, ACCRUED
EXPENSES AND OTHER LIABILITIES INCURRED IN THE ORDINARY COURSE OF BUSINESS
CONSISTENT WITH PAST PRACTICE AND (B) LIABILITIES NOT REQUIRED TO BE REFLECTED
ON THE COMPANY’S FINANCIAL STATEMENTS PURSUANT TO GAAP OR REQUIRED TO BE
DISCLOSED IN FILINGS MADE WITH THE SEC.

 

4.7           ABSENCE OF LITIGATION.  EXCEPT AS SET FORTH IN SCHEDULE 4.7, THERE
IS NO ACTION PENDING OR, TO THE KNOWLEDGE OF THE COMPANY OR ANY OF ITS
SUBSIDIARIES, THREATENED AGAINST OR AFFECTING THE COMPANY OR ANY OF ITS
SUBSIDIARIES THAT (I) ADVERSELY AFFECTS OR CHALLENGES THE LEGALITY, VALIDITY OR
ENFORCEABILITY OF THIS AGREEMENT, OR (II) WOULD, IF THERE WERE AN UNFAVORABLE
DECISION, HAVE OR REASONABLY BE EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT. 
NEITHER THE COMPANY NOR ANY OF ITS SUBSIDIARIES, NOR ANY DIRECTOR OR OFFICER
THEREOF (IN HIS OR HER CAPACITY AS SUCH), IS OR HAS BEEN THE SUBJECT OF ANY
ACTION INVOLVING A CLAIM OF VIOLATION OF OR LIABILITY UNDER FEDERAL OR STATE
SECURITIES LAWS OR A CLAIM OF BREACH OF FIDUCIARY DUTY.  THERE HAS NOT BEEN, AND
TO THE KNOWLEDGE OF THE COMPANY, THERE IS NOT PENDING ANY INVESTIGATION BY THE
SEC INVOLVING THE COMPANY OR ANY CURRENT OR FORMER DIRECTOR OR OFFICER OF THE
COMPANY (IN HIS OR HER CAPACITY AS SUCH).  THE SEC HAS NOT ISSUED ANY STOP ORDER
OR OTHER ORDER SUSPENDING THE EFFECTIVENESS OF ANY REGISTRATION STATEMENT FILED
BY THE COMPANY UNDER THE 1934 ACT OR THE 1933 ACT.

 

4.8           INTELLECTUAL PROPERTY.  THE COMPANY AND EACH OF ITS SUBSIDIARIES
OWNS OR POSSESSES THE REQUISITE LICENSES OR RIGHTS TO USE ALL PATENTS, PATENT
APPLICATIONS, PATENT RIGHTS, INVENTIONS, KNOW-HOW, TRADE SECRETS, COPYRIGHTS,
TRADEMARKS, TRADEMARK APPLICATIONS, SERVICE MARKS, SERVICE NAMES, TRADE NAMES
AND COPYRIGHTS (“INTELLECTUAL PROPERTY”) NECESSARY TO ENABLE IT TO CONDUCT ITS
BUSINESS AS NOW OPERATED (AND, TO THE COMPANY’S KNOWLEDGE, AS PRESENTLY
CONTEMPLATED TO BE OPERATED IN THE FUTURE); THERE IS NO CLAIM OR ACTION BY ANY
PERSON PERTAINING TO, OR PROCEEDING PENDING, OR TO THE COMPANY’S KNOWLEDGE
THREATENED, WHICH CHALLENGES THE RIGHT OF THE COMPANY OR OF A SUBSIDIARY WITH
RESPECT TO ANY INTELLECTUAL PROPERTY NECESSARY TO ENABLE IT TO CONDUCT ITS
BUSINESS AS NOW OPERATED AND TO THE COMPANY’S KNOWLEDGE, THE COMPANY’S OR ITS
SUBSIDIARIES’ CURRENT PRODUCTS AND PROCESSES DO NOT INFRINGE ON ANY INTELLECTUAL
PROPERTY OR OTHER RIGHTS HELD BY ANY PERSON, EXCEPT WHERE ANY SUCH INFRINGEMENT
WOULD NOT REASONABLY BE EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT.

 

4.9           TAX STATUS.  THE COMPANY AND EACH OF ITS SUBSIDIARIES HAS MADE OR
FILED ALL FEDERAL, STATE AND FOREIGN INCOME AND ALL OTHER MATERIAL TAX RETURNS,
REPORTS AND DECLARATIONS REQUIRED BY ANY JURISDICTION TO WHICH IT IS SUBJECT
(UNLESS AND ONLY TO THE EXTENT THAT THE COMPANY AND EACH OF ITS SUBSIDIARIES HAS
SET ASIDE ON ITS BOOKS PROVISIONS REASONABLY ADEQUATE FOR THE PAYMENT OF ALL
UNPAID AND UNREPORTED TAXES) AND HAS PAID ALL TAXES AND OTHER GOVERNMENTAL
ASSESSMENTS AND CHARGES THAT ARE MATERIAL IN AMOUNT, SHOWN OR DETERMINED TO BE
DUE ON SUCH RETURNS, REPORTS AND DECLARATIONS, EXCEPT THOSE BEING CONTESTED IN
GOOD FAITH AND HAS SET ASIDE ON ITS BOOKS PROVISIONS REASONABLY ADEQUATE FOR THE
PAYMENT OF ALL TAXES FOR PERIODS SUBSEQUENT TO THE PERIODS TO WHICH SUCH
RETURNS, REPORTS OR DECLARATIONS APPLY.  THERE ARE NO UNPAID TAXES IN ANY
MATERIAL AMOUNT CLAIMED TO BE DUE BY THE TAXING AUTHORITY OF ANY JURISDICTION,
AND THE OFFICERS OF THE COMPANY KNOW OF NO BASIS FOR ANY SUCH CLAIM.  THE
COMPANY HAS NOT EXECUTED A WAIVER WITH RESPECT TO THE STATUTE OF LIMITATIONS
RELATING TO THE ASSESSMENT OR COLLECTION OF ANY FOREIGN, FEDERAL, STATE OR LOCAL
TAX.

 

9

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4.10                           PERMITS; COMPLIANCE.

 

A.               THE COMPANY AND EACH OF ITS SUBSIDIARIES IS IN POSSESSION OF
ALL FRANCHISES, GRANTS, AUTHORIZATIONS, LICENSES, PERMITS, EASEMENTS, VARIANCES,
EXEMPTIONS, CONSENTS, CERTIFICATES, APPROVALS AND ORDERS NECESSARY TO OWN, LEASE
AND OPERATE ITS PROPERTIES AND TO CARRY ON ITS BUSINESS AS IT IS NOW BEING
CONDUCTED (COLLECTIVELY, “PERMITS”), AND THERE IS NO ACTION PENDING OR, TO THE
KNOWLEDGE OF THE COMPANY, THREATENED REGARDING SUSPENSION OR CANCELLATION OF ANY
OF THE PERMITS.  NEITHER THE COMPANY NOR ANY OF ITS SUBSIDIARIES IS IN CONFLICT
WITH, OR IN DEFAULT OR VIOLATION OF, ANY OF THE PERMITS, EXCEPT FOR ANY SUCH
CONFLICTS, DEFAULTS OR VIOLATIONS WHICH, INDIVIDUALLY OR IN THE AGGREGATE, WOULD
NOT REASONABLY BE EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT.

 

B.              SINCE DECEMBER 31, 2006, NO EVENT HAS OCCURRED OR, TO THE
KNOWLEDGE OF THE COMPANY, CIRCUMSTANCE EXISTS THAT (WITH OR WITHOUT NOTICE OR
LAPSE OF TIME): (A) WOULD REASONABLY BE EXPECTED TO CONSTITUTE OR RESULT IN A
VIOLATION BY THE COMPANY OR ANY OF ITS SUBSIDIARIES, OR A FAILURE ON THE PART OF
THE COMPANY OR ITS SUBSIDIARIES TO COMPLY WITH, ANY LEGAL REQUIREMENT; OR
(B) WOULD REASONABLY BE EXPECTED TO GIVE RISE TO ANY OBLIGATION ON THE PART OF
THE COMPANY OR ANY OF ITS SUBSIDIARIES TO UNDERTAKE, OR TO BEAR ALL OR ANY
PORTION OF THE COST OF, ANY REMEDIAL ACTION OF ANY NATURE IN CONNECTION WITH A
FAILURE TO COMPLY WITH ANY LEGAL REQUIREMENT, EXCEPT IN EITHER CASE THAT WOULD
NOT REASONABLY BE EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT.  NEITHER THE
COMPANY NOR ANY OF ITS SUBSIDIARIES HAS RECEIVED ANY NOTICE OR OTHER
COMMUNICATION FROM ANY REGULATORY AUTHORITY OR ANY OTHER PERSON, NOR DOES THE
COMPANY HAVE ANY KNOWLEDGE REGARDING: (X) ANY ACTUAL, ALLEGED, POSSIBLE OR
POTENTIAL VIOLATION OF, OR FAILURE TO COMPLY WITH, ANY LEGAL REQUIREMENT, OR
(Y) ANY ACTUAL, ALLEGED, POSSIBLE OR POTENTIAL OBLIGATION ON THE PART OF THE
COMPANY OR ANY OF ITS SUBSIDIARIES TO UNDERTAKE, OR TO BEAR ALL OR ANY PORTION
OF THE COST OF, ANY REMEDIAL ACTION OF ANY NATURE IN CONNECTION WITH A FAILURE
TO COMPLY WITH ANY LEGAL REQUIREMENT, EXCEPT IN EITHER CASE THAT WOULD NOT
REASONABLY BE EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT.

 

C.               THE COMPANY IS IN COMPLIANCE IN ALL MATERIAL RESPECTS WITH THE
PROVISIONS OF THE SARBANES-OXLEY ACT OF 2002 AND THE RULES AND REGULATIONS
PROMULGATED THEREUNDER THAT ARE APPLICABLE TO IT AND HAS TAKEN REASONABLE STEPS
SUCH THAT THE COMPANY EXPECTS TO BE IN A POSITION TO COMPLY WITH THE
REQUIREMENTS OF SECTION 404 OF THE SARBANES-OXLEY ACT OF 2002 AND THE RULES AND
REGULATIONS PROMULGATED THEREUNDER AT SUCH TIME AS SECTION 404 BECOMES
APPLICABLE TO THE COMPANY.

 

D.              THE COMPANY IS, AND HAS REASON TO BELIEVE THAT FOR THE
FORESEEABLE FUTURE IT WILL CONTINUE TO BE, IN COMPLIANCE WITH ALL APPLICABLE
RULES OF THE OTC BULLETIN BOARD.  THE COMPANY HAS NOT RECEIVED NOTICE FROM THE
OTC BULLETIN BOARD THAT THE COMPANY IS NOT IN COMPLIANCE WITH THE RULES OR
REQUIREMENTS THEREOF.  THE ISSUANCE AND SALE OF THE SHARES UNDER THIS AGREEMENT
DOES NOT CONTRAVENE THE RULES AND REGULATIONS OF THE OTC BULLETIN BOARD, AND NO
APPROVAL OF THE STOCKHOLDERS OF THE COMPANY IS REQUIRED FOR THE COMPANY TO ISSUE
THE SHARES AS CONTEMPLATED BY THIS AGREEMENT.

 

4.11                           ENVIRONMENTAL MATTERS.  “ENVIRONMENTAL LAWS”
SHALL MEAN, COLLECTIVELY, ALL LEGAL REQUIREMENTS, INCLUDING ANY FEDERAL, STATE,
LOCAL OR FOREIGN STATUTE, LAWS, RULE, REGULATION, ORDINANCE, CODE, POLICY OR
RULE OF COMMON LAW OR ANY JUDICIAL OR ADMINISTRATIVE INTERPRETATION THEREOF,
INCLUDING ANY JUDICIAL OR ADMINISTRATIVE ORDER, CONSENT, DECREE OR JUDGMENT,
RELATING TO POLLUTION OR PROTECTION OF HUMAN HEALTH, THE ENVIRONMENT (INCLUDING,
WITHOUT LIMITATION, AMBIENT AIR, SURFACE WATER, GROUNDWATER, LAND SURFACE OR
SUBSURFACE STRATA) OR WILDLIFE, INCLUDING, WITHOUT LIMITATION, LAWS AND
REGULATIONS RELATING TO THE RELEASE OR THREATENED RELEASE OF CHEMICALS,
POLLUTANTS, CONTAMINANTS, WASTES, TOXIC SUBSTANCES, HAZARDOUS SUBSTANCES,
PETROLEUM OR PETROLEUM PRODUCTS (COLLECTIVELY, “HAZARDOUS MATERIALS”) OR TO THE
MANUFACTURE, PROCESSING, DISTRIBUTION, USE, TREATMENT, STORAGE, DISPOSAL,
TRANSPORT OR HANDLING OF HAZARDOUS MATERIALS.  EXCEPT FOR SUCH MATTERS AS COULD
NOT, SINGLY OR IN THE AGGREGATE, REASONABLY BE EXPECTED TO RESULT IN A MATERIAL
ADVERSE EFFECT OR AS SET FORTH ON SCHEDULE 4.11: (I) THE COMPANY AND ITS
SUBSIDIARIES HAVE COMPLIED AND ARE IN COMPLIANCE WITH ALL APPLICABLE
ENVIRONMENTAL LAWS; (II) WITHOUT

 

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LIMITING THE GENERALITY OF THE FOREGOING, THE COMPANY AND ITS SUBSIDIARIES HAVE
OBTAINED, HAVE COMPLIED, AND ARE IN COMPLIANCE WITH ALL PERMITS THAT ARE
REQUIRED PURSUANT TO ENVIRONMENTAL LAWS FOR THE OCCUPATION OF THEIR RESPECTIVE
FACILITIES AND THE OPERATION OF THEIR RESPECTIVE BUSINESSES; (III) NONE OF THE
COMPANY OR ITS SUBSIDIARIES HAS RECEIVED ANY WRITTEN NOTICE, REPORT OR OTHER
INFORMATION REGARDING ANY ACTUAL OR ALLEGED VIOLATION OF ENVIRONMENTAL LAWS, OR
ANY LIABILITIES OR POTENTIAL LIABILITIES (INCLUDING FINES, PENALTIES, COSTS AND
EXPENSES), INCLUDING ANY INVESTIGATORY, REMEDIAL OR CORRECTIVE OBLIGATIONS,
RELATING TO ANY OF THEM OR THEIR RESPECTIVE FACILITIES ARISING UNDER
ENVIRONMENTAL LAWS, NOR, TO THE KNOWLEDGE OF THE COMPANY IS THERE ANY FACTUAL
BASIS THEREFORE; (IV) THERE ARE NO UNDERGROUND STORAGE TANKS, POLYCHLORINATED
BIPHENYLS, UREA FORMALDEHYDE OR OTHER HAZARDOUS SUBSTANCES (OTHER THAN SMALL
QUANTITIES OF HAZARDOUS SUBSTANCES FOR USE IN THE ORDINARY COURSE OF THE
OPERATION OF THE COMPANY’S AND ITS SUBSIDIARIES’ RESPECTIVE BUSINESSES, WHICH
ARE STORED AND MAINTAINED IN ACCORDANCE AND IN COMPLIANCE WITH ALL APPLICABLE
ENVIRONMENTAL LAWS), IN, ON, OVER, UNDER OR AT ANY REAL PROPERTY OWNED OR
OPERATED BY THE COMPANY AND/OR ITS SUBSIDIARIES; (V) THERE ARE NO CONDITIONS
EXISTING AT ANY REAL PROPERTY OR WITH RESPECT TO THE COMPANY OR ANY OF ITS
SUBSIDIARIES THAT REQUIRE REMEDIAL OR CORRECTIVE ACTION, REMOVAL, MONITORING OR
CLOSURE PURSUANT TO THE ENVIRONMENTAL LAWS AND (VI) TO THE KNOWLEDGE OF THE
COMPANY, NEITHER THE COMPANY NOR ANY OF ITS SUBSIDIARIES HAS CONTRACTUALLY, BY
OPERATION OF LAW, OR OTHERWISE AMENDED OR SUCCEEDED TO ANY LIABILITIES ARISING
UNDER ANY ENVIRONMENTAL LAWS OF ANY PREDECESSORS OR ANY OTHER PERSON.

 

4.12                           TITLE TO PROPERTY.  EXCEPT FOR ANY LIEN FOR
CURRENT TAXES NOT YET DELINQUENT OR WHICH ARE BEING CONTESTED IN GOOD FAITH AND
BY APPROPRIATE PROCEEDINGS, THE COMPANY AND ITS SUBSIDIARIES HAVE GOOD AND
MARKETABLE TITLE TO ALL REAL PROPERTY AND ALL PERSONAL PROPERTY OWNED BY THEM
WHICH IS MATERIAL TO THE BUSINESS OF THE COMPANY AND ITS SUBSIDIARIES.  ANY
LEASES OF REAL PROPERTY AND FACILITIES OF THE COMPANY AND ITS SUBSIDIARIES ARE
VALID AND EFFECTIVE IN ACCORDANCE WITH THEIR RESPECTIVE TERMS, EXCEPT AS WOULD
NOT HAVE A MATERIAL ADVERSE EFFECT.

 

4.13                           NO INVESTMENT COMPANY OR REAL PROPERTY HOLDING
COMPANY.  THE COMPANY IS NOT, AND UPON THE ISSUANCE AND SALE OF THE SHARES AS
CONTEMPLATED BY THIS AGREEMENT WILL NOT BE, AN “INVESTMENT COMPANY” AS DEFINED
UNDER THE INVESTMENT COMPANY ACT OF 1940 (“INVESTMENT COMPANY”).  THE COMPANY IS
NOT CONTROLLED BY AN INVESTMENT COMPANY.  THE COMPANY IS NOT A UNITED STATES
REAL PROPERTY HOLDING COMPANY, AS DEFINED UNDER THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE “CODE”).

 

4.14                           NO BROKERS.  THE COMPANY HAS TAKEN NO ACTION
WHICH WOULD GIVE RISE TO ANY CLAIM BY ANY PERSON FOR BROKERAGE COMMISSIONS,
TRANSACTION FEES OR SIMILAR PAYMENTS RELATING TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY.

 

4.15                           REGISTRATION RIGHTS.  EXCEPT PURSUANT TO THE
REGISTRATION RIGHTS AGREEMENT, THE BF REGISTRATION RIGHTS AGREEMENT AND AS
OTHERWISE SET FORTH IN SCHEDULE 4.15 EFFECTIVE UPON THE CLOSING, NEITHER THE
COMPANY NOR ANY SUBSIDIARY IS CURRENTLY SUBJECT TO ANY AGREEMENT PROVIDING ANY
PERSON OR ENTITY ANY RIGHTS (INCLUDING PIGGYBACK REGISTRATION RIGHTS) TO HAVE
ANY SECURITIES OF THE COMPANY OR ANY SUBSIDIARY REGISTERED WITH THE SEC OR
REGISTERED OR QUALIFIED WITH ANY OTHER GOVERNMENTAL AUTHORITY.

 

4.16                           EXCHANGE ACT REGISTRATION.  THE COMMON STOCK IS
REGISTERED PURSUANT TO SECTION 12(B) OF THE 1934 ACT, AND THE COMPANY HAS TAKEN
NO ACTION DESIGNED TO, OR WHICH, TO THE KNOWLEDGE OF THE COMPANY, IS LIKELY TO
HAVE THE EFFECT OF, DELISTING THE REGISTRATION OF THE COMMON STOCK UNDER THE
1934 ACT.

 

4.17                           LABOR RELATIONS.  NO LABOR OR EMPLOYMENT DISPUTE
EXISTS OR, TO THE KNOWLEDGE OF THE COMPANY, IS IMMINENT OR THREATENED, WITH
RESPECT TO ANY OF THE EMPLOYEES OF THE COMPANY THAT HAS, OR COULD REASONABLY BE
EXPECTED TO HAVE, INDIVIDUALLY OR IN THE AGGREGATE, A MATERIAL ADVERSE EFFECT.

 

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4.18                           TRANSACTIONS WITH AFFILIATES AND EMPLOYEES. 
EXCEPT AS SET FORTH IN THE SEC DOCUMENTS, AND SCHEDULE 4.18, NONE OF THE
OFFICERS OR DIRECTORS OF THE COMPANY, AND TO THE KNOWLEDGE OF THE COMPANY, NONE
OF THE EMPLOYEES OF THE COMPANY, IS PRESENTLY A PARTY TO ANY TRANSACTION OR
AGREEMENT WITH THE COMPANY (OTHER THAN FOR SERVICES AS EMPLOYEES, OFFICERS AND
DIRECTORS) EXCEEDING $60,000, INCLUDING ANY CONTRACT, AGREEMENT OR OTHER
ARRANGEMENT PROVIDING FOR THE FURNISHING OF SERVICES TO OR BY, PROVIDING FOR
RENTAL OF REAL OR PERSONAL PROPERTY TO OR FROM, OR OTHERWISE REQUIRING PAYMENTS
TO OR FROM ANY OFFICER, DIRECTOR OR SUCH EMPLOYEE OR, TO THE KNOWLEDGE OF THE
COMPANY, ANY ENTITY IN WHICH ANY OFFICER, DIRECTOR, OR ANY SUCH EMPLOYEE HAS A
SUBSTANTIAL INTEREST OR IS AN OFFICER, DIRECTOR, TRUSTEE OR PARTNER.

 

4.19                           INSURANCE.  THE COMPANY AND ITS SUBSIDIARIES HAVE
INSURANCE POLICIES IN FULL FORCE AND EFFECT OF A TYPE, COVERING SUCH RISKS AND
IN SUCH AMOUNTS, AND HAVING SUCH DEDUCTIBLES AND EXCLUSIONS AS ARE CUSTOMARY FOR
CONDUCTING BUSINESSES AND OWNING ASSETS SIMILAR IN NATURE AND SCOPE TO THOSE OF
THE COMPANY AND ITS SUBSIDIARIES.  THE AMOUNTS OF ALL SUCH INSURANCE POLICIES
AND THE RISKS COVERED THEREBY ARE IN ACCORDANCE IN ALL MATERIAL RESPECTS WITH
ALL MATERIAL CONTRACTS AND AGREEMENTS TO WHICH THE COMPANY AND/OR ITS
SUBSIDIARIES IS A PARTY AND WITH ALL APPLICABLE LEGAL REQUIREMENTS.  WITH
RESPECT TO EACH SUCH INSURANCE POLICY:  (I) THE POLICY IS VALID, OUTSTANDING AND
ENFORCEABLE IN ACCORDANCE WITH ITS TERMS, EXCEPT AS SUCH ENFORCEABILITY MAY BE
LIMITED BY APPLICABLE BANKRUPTCY, INSOLVENCY, REORGANIZATION, MORATORIUM OR
OTHER SIMILAR LAWS IN EFFECT THAT LIMIT CREDITORS’ RIGHTS GENERALLY, EQUITABLE
LIMITATIONS ON THE AVAILABILITY OF SPECIFIC REMEDIES AND PRINCIPLES OF EQUITY
(REGARDLESS OF WHETHER SUCH ENFORCEMENT IS CONSIDERED IN A PROCEEDING IN LAW OR
IN EQUITY); (II) NEITHER THE COMPANY NOR ANY OF ITS SUBSIDIARIES IS IN BREACH OR
DEFAULT WITH RESPECT TO ITS OBLIGATIONS THEREUNDER IN ANY MATERIAL RESPECT; AND
(III) NO PARTY TO THE POLICY HAS REPUDIATED, OR GIVEN NOTICE OF AN INTENT TO
REPUDIATE, ANY PROVISION THEREOF.

 

4.20                           APPROVED ACQUISITIONS OF SHARES; NO ANTI-TAKEOVER
PROVISIONS.  EXCEPT AS OTHERWISE SET FORTH IN SCHEDULE 4.2, AND SUBJECT TO AND
CONTINGENT ON THE BUYER’S COVENANT IN SECTION 5.7 THE COMPANY HAS TAKEN ALL
NECESSARY ACTION, IF ANY, REQUIRED UNDER THE LAWS OF THE STATE OF NEVADA OR
OTHERWISE TO ALLOW THE BUYER TO ACQUIRE THE SHARES PURSUANT TO THIS AGREEMENT. 
THE COMPANY HAS NO CONTROL SHARE ACQUISITION, BUSINESS COMBINATION, POISON PILL
(INCLUDING ANY DISTRIBUTION UNDER A RIGHTS AGREEMENT) OR OTHER SIMILAR
ANTI-TAKEOVER PROVISION UNDER THE COMPANY’S ARTICLES OF INCORPORATION OR BYLAWS,
EACH AS AMENDED (OR SIMILAR CHARTER DOCUMENTS), THAT IS OR COULD BECOME
APPLICABLE TO THE BUYERS AS A RESULT OF THE BUYERS AND THE COMPANY FULFILLING
THEIR OBLIGATIONS OR EXERCISING THEIR RIGHTS UNDER THIS AGREEMENT, INCLUDING
WITHOUT LIMITATION THE COMPANY’S ISSUANCE OF THE SHARES AND THE BUYERS’
OWNERSHIP OF THE SHARES.  IN ADDITION, THE COMPANY HAS OPTED OUT OF THE
PROVISIONS OF THE NEVADA REVISED STATUTES (“NRS”) PERTAINING TO THE ACQUISITION
OF A CONTROLLING INTEREST (NRS 78.378 THROUGH 78.3793).  AS OF THE DATE HEREOF,
THE COMPANY HAD LESS THAN 200 “STOCKHOLDERS OF RECORD” AND IS NOT CONSIDERED A
“RESIDENT DOMESTIC CORPORATION” FOR PURPOSES OF §78.411 THROUGH §78.444 OF THE
NRS.

 

4.21                           ERISA.  BASED UPON THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED (“ERISA”), AND THE REGULATIONS AND PUBLISHED
INTERPRETATIONS THEREUNDER: (I) NEITHER THE COMPANY NOR ANY OF ITS SUBSIDIARIES
HAS ENGAGED IN ANY PROHIBITED TRANSACTIONS (AS DEFINED IN SECTION 406 OF ERISA
AND SECTION 4975 OF THE CODE); (II) THE COMPANY AND EACH OF ITS SUBSIDIARIES HAS
MET ALL APPLICABLE MINIMUM FUNDING REQUIREMENTS UNDER SECTION 302 OF ERISA IN
RESPECT TO ITS PLANS; (III) NEITHER THE COMPANY NOR ANY OF ITS SUBSIDIARIES HAS
ANY KNOWLEDGE OF ANY EVENT OR OCCURRENCE WHICH WOULD CAUSE THE PENSION BENEFIT
GUARANTY CORPORATION TO INSTITUTE PROCEEDINGS UNDER TITLE IV OF ERISA TO
TERMINATE ANY EMPLOYEE BENEFIT PLAN(S); NEITHER THE COMPANY NOR ANY OF ITS
SUBSIDIARIES HAS ANY FIDUCIARY RESPONSIBILITY FOR INVESTMENTS WITH RESPECT TO
ANY PLAN EXISTING FOR THE BENEFIT OF PERSONS OTHER THAN ITS OR SUCH SUBSIDIARY’S
EMPLOYEES; AND (V) NEITHER THE COMPANY NOR ANY OF ITS SUBSIDIARIES HAS
WITHDRAWN, COMPLETELY OR PARTIALLY, FROM ANY MULTI-EMPLOYER PENSION PLAN SO AS
TO INCUR LIABILITY UNDER THE MULTIEMPLOYER PENSION PLAN AMENDMENTS ACT OF 1980.

 

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4.22                           DISCLOSURE.  THE COMPANY UNDERSTANDS AND CONFIRMS
THAT THE BUYERS WILL RELY ON THE REPRESENTATIONS AND COVENANTS CONTAINED HEREIN
IN EFFECTING THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT AND THE OTHER
TRANSACTION DOCUMENTS.  ALL REPRESENTATIONS AND WARRANTIES PROVIDED TO THE
BUYERS INCLUDING THE DISCLOSURES IN THE COMPANY’S DISCLOSURE SCHEDULES ATTACHED
HERETO FURNISHED BY OR ON BEHALF OF THE COMPANY, TAKEN AS A WHOLE ARE TRUE AND
CORRECT AND DO NOT CONTAIN ANY UNTRUE STATEMENT OF MATERIAL FACT OR OMIT TO
STATE ANY MATERIAL FACT NECESSARY IN ORDER TO MAKE THE STATEMENTS MADE THEREIN,
IN THE LIGHT OF THE CIRCUMSTANCES UNDER WHICH THEY WERE MADE, NOT MISLEADING. 
NO EVENT OR CIRCUMSTANCE HAS OCCURRED OR INFORMATION EXISTS WITH RESPECT TO THE
COMPANY OR ITS SUBSIDIARIES OR ITS OR THEIR BUSINESSES, PROPERTIES, PROSPECTS,
OPERATIONS OR FINANCIAL CONDITIONS, WHICH, UNDER APPLICABLE LAW, RULE OR
REGULATION, REQUIRES PUBLIC DISCLOSURE OR ANNOUNCEMENT BY THE COMPANY BUT WHICH
HAS NOT BEEN SO PUBLICLY ANNOUNCED OR DISCLOSED.

 

ARTICLE 5
COVENANTS

 

5.1                                 FORM D; BLUE SKY LAWS.  UPON COMPLETION OF
THE CLOSING, THE COMPANY SHALL FILE WITH THE SEC A FORM D WITH RESPECT TO THE
SHARES AS REQUIRED UNDER REGULATION D AND EACH APPLICABLE STATE SECURITIES
COMMISSION AND WILL PROVIDE A COPY THEREOF TO THE BUYERS PROMPTLY AFTER SUCH
FILING.

 

5.2                                 USE OF PROCEEDS.  THE COMPANY SHALL USE THE
PROCEEDS FROM THE SALE OF THE SHARES TO COMPLETE THE ACQUISITION.

 

5.3                                 EXPENSES.  THE COMPANY SHALL REIMBURSE THE
BUYERS FOR ALL REASONABLE EXPENSES INCURRED BY THEM IN CONNECTION WITH THEIR DUE
DILIGENCE REVIEW OF THE COMPANY AND THE TARGET, AND THE NEGOTIATION,
PREPARATION, EXECUTION, DELIVERY AND PERFORMANCE OF THIS AGREEMENT AND THE OTHER
TRANSACTION DOCUMENTS AND THE TRANSACTIONS HEREUNDER AND THEREUNDER,  INCLUDING,
WITHOUT LIMITATION, REASONABLE ATTORNEYS’ FEES AND EXPENSES, AND OUT-OF-POCKET
TRAVEL COSTS AND EXPENSES.

 

5.4                                 NO INTEGRATION.  THE COMPANY SHALL NOT MAKE
ANY OFFERS OR SALES OF ANY SECURITY (OTHER THAN THE SHARES) UNDER CIRCUMSTANCES
THAT WOULD REQUIRE REGISTRATION OF THE SHARES BEING OFFERED OR SOLD HEREUNDER
UNDER THE 1933 ACT OR CAUSE THE OFFERING OF THE SHARES TO BE INTEGRATED WITH ANY
OTHER OFFERING OF SECURITIES BY THE COMPANY IN SUCH A MANNER AS WOULD REQUIRE
THE COMPANY TO SEEK THE APPROVAL OF ITS STOCKHOLDERS FOR THE ISSUANCE OF THE
SHARES UNDER ANY STOCKHOLDER APPROVAL PROVISION APPLICABLE TO THE COMPANY OR ITS
SECURITIES.

 

5.5                                 BOARD DESIGNEE(S).  THE PARTIES HERETO
ACKNOWLEDGE AND AFFIRM THAT THE BUYERS SHALL HAVE  THE RIGHT TO APPOINT MEMBERS
OF THE COMPANY’S BOARD OF DIRECTORS AS SET FORTH IN SECTION 5.5 OF THE
AUGUST 2007 SECURITIES PURCHASE AGREEMENT.

 

5.6                                 OBSERVATION RIGHTS.  THE PARTIES HERETO
ACKNOWLEDGE AND AFFIRM THAT THE BUYERS SHALL HAVE OBSERVATION RIGHTS (AS DEFINED
IN THE INITIAL SECURITIES PURCHASE AGREEMENT) AS SET FORTH IN SECTION 5.6 OF THE
INITIAL SECURITIES PURCHASE AGREEMENT.

 

5.7                                 APPROVAL OF ACQUISITION.  THE COMPANY SHALL
NOT REVOKE ITS APPROVAL OF THE ACQUISITION OF THE SHARES BY THE BUYERS.  THE
COMPANY SHALL USE ITS BEST EFFORTS TO ENSURE THAT THE ACQUISITION OF THE SHARES
BY THE BUYERS SHALL NOT BE MADE SUBJECT TO THE PROVISIONS OF ANY ANTI-TAKEOVER
LAWS AND REGULATIONS OF ANY GOVERNMENTAL AUTHORITY, INCLUDING WITHOUT
LIMITATION, THE APPLICABLE PROVISIONS OF THE NEVADA REVISED STATUTES, AND ANY
PROVISIONS OF AN ANTI-TAKEOVER NATURE ADOPTED BY THE COMPANY OR ANY OF ITS
SUBSIDIARIES OR CONTAINED IN THE COMPANY’S ARTICLES OF INCORPORATION, BYLAWS, OR
THE ORGANIZATIONAL DOCUMENTS OF ANY OF ITS SUBSIDIARIES, EACH AS AMENDED.

 

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5.8                                 PARTICIPATION IN FUTURE ISSUANCES.  THE
PARTIES HERETO ACKNOWLEDGE AND AFFIRM THAT THE BUYERS SHALL CONTINUE TO HAVE THE
RIGHT TO PARTICIPATE IN FUTURE ISSUANCES (AS DEFINED IN THE INITIAL SECURITIES
PURCHASE AGREEMENT) SET FORTH IN SECTION 5.7 OF THE INITIAL SECURITIES PURCHASE
AGREEMENT.

 

ARTICLE 6
CONDITIONS TO THE COMPANY’S OBLIGATION

 

The obligation of the Company hereunder to issue and sell the Shares to the
Buyers at the Closing is subject to the satisfaction, at or before the Closing
Date, of each of the following conditions thereto, provided that these
conditions are for the Company’s sole benefit and may be waived by the Company
at any time in its sole discretion:

 

6.1                                 DELIVERY OF TRANSACTION DOCUMENTS.  THE
BUYERS SHALL HAVE EXECUTED AND DELIVERED THE TRANSACTION DOCUMENTS TO WHICH THEY
ARE A PARTY TO THE COMPANY.

 

6.2                                 PAYMENT OF PURCHASE PRICE.  THE BUYERS SHALL
HAVE DELIVERED THE PURCHASE PRICE IN ACCORDANCE WITH SECTION 2.2 ABOVE.

 

6.3                                 REPRESENTATIONS AND WARRANTIES.  THE
REPRESENTATIONS AND WARRANTIES OF THE BUYERS SHALL BE TRUE AND CORRECT IN ALL
MATERIAL RESPECTS (PROVIDED, HOWEVER, THAT SUCH QUALIFICATION SHALL ONLY APPLY
TO REPRESENTATIONS OR WARRANTIES NOT OTHERWISE QUALIFIED BY MATERIALITY) AS OF
THE DATE WHEN MADE AND AS OF THE CLOSING DATE AS THOUGH MADE AT THAT TIME
(EXCEPT FOR REPRESENTATIONS AND WARRANTIES THAT SPEAK AS OF A SPECIFIC DATE),
AND THE APPLICABLE BUYER SHALL HAVE PERFORMED, SATISFIED AND COMPLIED IN ALL
MATERIAL RESPECTS WITH THE COVENANTS, AGREEMENTS AND CONDITIONS REQUIRED BY THIS
AGREEMENT TO BE PERFORMED, SATISFIED OR COMPLIED WITH BY THE APPLICABLE BUYER AT
OR PRIOR TO THE CLOSING DATE.

 

6.4                                 LITIGATION.  NO LITIGATION, STATUTE, RULE,
REGULATION, EXECUTIVE ORDER, DECREE, RULING OR INJUNCTION SHALL HAVE BEEN
ENACTED, ENTERED, PROMULGATED OR ENDORSED BY OR IN ANY COURT OR GOVERNMENTAL
AUTHORITY OF COMPETENT JURISDICTION OR ANY SELF-REGULATORY ORGANIZATION HAVING
AUTHORITY OVER THE MATTERS CONTEMPLATED HEREBY WHICH PROHIBITS THE CONSUMMATION
OF ANY OF THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT.

 

6.5                                 ACQUISITION OF TARGET.  ALL OF THE
CONDITIONS NECESSARY FOR THE ACQUISITION TO BE CONSUMMATED SHALL HAVE BEEN
SATISFIED AND THE COMPANY AND THE PARTIES TO THE TARGET MIPA ARE PROCEEDING TO
CLOSING THEREUNDER, SUBJECT TO THE PURCHASE OF THE SHARES UNDER THIS AGREEMENT.

 

6.6                                 NO PROHIBITION.  NEITHER THE CONSUMMATION
NOR THE PERFORMANCE OF THE ACQUISITION OF THE SHARES HEREUNDER WILL MATERIALLY
CONTRAVENE, OR CONFLICT WITH, OR RESULT IN A MATERIAL VIOLATION OF (A) ANY
APPLICABLE LEGAL REQUIREMENT, OR (B) ANY LEGAL REQUIREMENT THAT HAS BEEN
PUBLISHED, INTRODUCED, OR OTHERWISE PROPOSED BY OR BEFORE ANY GOVERNMENTAL BODY.

 

ARTICLE 7
CONDITIONS TO THE BUYERS’ OBLIGATION

 

The obligation of the Buyers hereunder to purchase the Shares at the Closing is
subject to the satisfaction, at or before the Closing Date, of each of the
following conditions, provided that these conditions are for the Buyers’ sole
benefit and may be waived by the Buyers at any time in its sole discretion:

 

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7.1                                 DELIVERY OF TRANSACTION DOCUMENTS; ISSUANCE
OF SHARES.  THE COMPANY SHALL HAVE EXECUTED AND DELIVERED THE TRANSACTION
DOCUMENTS TO THE BUYERS AND SHALL DELIVER THE TRANSFER INSTRUCTIONS TO THE
TRANSFER AGENT FOR THE COMPANY’S COMMON STOCK TO ISSUE CERTIFICATES IN THE NAME
OF EACH BUYER REPRESENTING THE SHARES BEING PURCHASED BY SUCH BUYER.  THE
COMPANY SHALL DELIVER A COPY OF THE TRANSFER INSTRUCTIONS TO THE BUYERS AT THE
CLOSING.

 

7.2                                 REPRESENTATIONS AND WARRANTIES.  THE
REPRESENTATIONS AND WARRANTIES OF THE COMPANY SHALL BE TRUE AND CORRECT IN ALL
MATERIAL RESPECTS (PROVIDED, HOWEVER, THAT SUCH QUALIFICATION SHALL ONLY APPLY
TO REPRESENTATIONS OR WARRANTIES NOT OTHERWISE QUALIFIED BY MATERIALITY) AS OF
THE DATE WHEN MADE AND AS OF THE CLOSING DATE AS THOUGH MADE AT SUCH TIME
(EXCEPT FOR REPRESENTATIONS AND WARRANTIES THAT SPEAK AS OF A SPECIFIC DATE) AND
THE COMPANY SHALL HAVE PERFORMED, SATISFIED AND COMPLIED IN ALL MATERIAL
RESPECTS WITH THE COVENANTS, AGREEMENTS AND CONDITIONS REQUIRED BY THIS
AGREEMENT TO BE PERFORMED, SATISFIED OR COMPLIED WITH BY THE COMPANY AT OR PRIOR
TO THE CLOSING DATE.

 

7.3                                 CONSENTS.  ANY CONSENTS OR APPROVALS
REQUIRED TO BE SECURED BY THE COMPANY FOR THE CONSUMMATION OF THE TRANSACTIONS
CONTEMPLATED BY THE TRANSACTION DOCUMENTS SHALL HAVE BEEN OBTAINED AND SHALL BE
REASONABLY SATISFACTORY TO THE BUYERS.

 

7.4                                 LITIGATION.  NO ACTION SHALL HAVE BEEN
ENACTED, ENTERED, PROMULGATED OR ENDORSED BY OR IN ANY COURT OR GOVERNMENTAL
AUTHORITY OF COMPETENT JURISDICTION OR ANY SELF-REGULATORY ORGANIZATION HAVING
AUTHORITY OVER THE MATTERS CONTEMPLATED HEREBY WHICH PROHIBITS THE CONSUMMATION
OF ANY OF THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT.

 

7.5                                 OPINION.  THE BUYERS SHALL HAVE RECEIVED AN
OPINION OF THE COMPANY’S COUNSEL, DATED AS OF THE CLOSING DATE, IN FORM, SCOPE
AND SUBSTANCE REASONABLY SATISFACTORY TO THE BUYERS WITH RESPECT TO THE MATTERS
SET FORTH IN EXHIBIT A ATTACHED HERETO.

 

7.6                                 NO MATERIAL ADVERSE CHANGE.  THERE SHALL
HAVE BEEN NO MATERIAL ADVERSE CHANGE IN THE ASSETS, LIABILITIES (CONTINGENT OR
OTHERWISE), AFFAIRS, BUSINESS, OPERATIONS, PROSPECTS OR CONDITION (FINANCIAL OR
OTHERWISE) OF THE COMPANY PRIOR TO THE CLOSING DATE.

 

7.7                                 ACQUISITION OF TARGET.  ALL OF THE
CONDITIONS NECESSARY FOR THE ACQUISITION TO BE CONSUMMATED SHALL HAVE BEEN
SATISFIED AND THE COMPANY AND THE PARTIES TO THE TARGET MIPA ARE PROCEEDING TO
CLOSING THEREUNDER, SUBJECT TO THE PURCHASE OF THE SHARES UNDER THIS AGREEMENT.

 

7.8                                 NO PROHIBITION.  NEITHER THE CONSUMMATION
NOR THE PERFORMANCE OF THE ACQUISITION OF THE SHARES HEREUNDER WILL MATERIALLY
CONTRAVENE, OR CONFLICT WITH, OR RESULT IN A MATERIAL VIOLATION OF (A) ANY
APPLICABLE LEGAL REQUIREMENT, OR (B) ANY LEGAL REQUIREMENT THAT HAS BEEN
PUBLISHED, INTRODUCED, OR OTHERWISE PROPOSED BY OR BEFORE ANY GOVERNMENTAL BODY.

 

ARTICLE 8
TERMINATION

 

8.1                                 TERMINATION PROVISIONS.  THIS AGREEMENT MAY
BE TERMINATED AT ANY TIME BEFORE THE CLOSING DATE:

 

A.               BY MUTUAL CONSENT OF THE COMPANY AND THE BUYERS;

 

B.              BY EITHER THE COMPANY OR THE BUYERS AS APPLICABLE, IN THE EVENT
THAT ANY OF THE CONDITIONS PRECEDENT TO THEIR RESPECTIVE OBLIGATIONS TO
CONSUMMATE THE TRANSACTIONS CONTEMPLATED HEREBY

 

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AS SET FORTH IN ARTICLE 6 OR ARTICLE 7, THROUGH NO FAULT OF THE TERMINATING
PARTY, HAVE NOT BEEN MET AND SATISFIED AND HAVE BECOME IMPOSSIBLE OF
FULFILLMENT;

 

C.               BY EITHER THE COMPANY OR THE BUYERS IF THE CLOSING DATE DOES
NOT OCCUR WITHIN ONE HUNDRED TWENTY (120) DAYS AFTER THE DATE HEREOF, OR SUCH
LATER DATE AS THE PARTIES MAY MUTUALLY AGREE UPON (PROVIDED THAT THE TERMINATING
PARTY IS NOT THEN IN MATERIAL BREACH OF ANY REPRESENTATION, WARRANTY, COVENANT
OR OTHER AGREEMENT CONTAINED HEREIN);

 

D.              BY THE BUYERS IF THERE HAS BEEN ANY MATERIAL BREACH OF ANY
REPRESENTATION, WARRANTY, AGREEMENT OR COVENANT IN THIS AGREEMENT BY THE
COMPANY, WHICH BREACH CANNOT BE OR HAS NOT BEEN CURED WITHIN THIRTY (30) DAYS
AFTER GIVING WRITTEN NOTICE THEREOF TO THE COMPANY; AND

 

E.               BY THE COMPANY IF THERE HAS BEEN ANY MATERIAL BREACH OF ANY
REPRESENTATION, WARRANTY, AGREEMENT OR COVENANT IN THIS AGREEMENT BY THE BUYERS,
WHICH BREACH CANNOT BE OR HAS NOT BEEN CURED WITHIN THIRTY (30)  DAYS AFTER
GIVING WRITTEN NOTICE THEREOF TO THE BUYERS.

 

8.2                                 EFFECT OF TERMINATION.  UPON THE TERMINATION
OF THIS AGREEMENT PURSUANT TO THE TERMS HEREOF, THIS AGREEMENT WILL BE VOID AND
NEITHER PARTY WILL HAVE ANY FURTHER LIABILITY OBLIGATIONS WITH RESPECT HEREOF,
EXCEPT AS OTHERWISE PROVIDED IN THIS AGREEMENT OR EXCEPT AND TO THE EXTENT
TERMINATION RESULTS FROM THE INTENTIONAL BREACH BY A PARTY OF ANY OF ITS
REPRESENTATIONS, WARRANTIES OR COVENANTS HEREUNDER.

 

ARTICLE 9
INDEMNIFICATION

 

9.1                                 INDEMNIFICATION BY THE COMPANY.   THE
COMPANY AGREES TO INDEMNIFY EACH BUYER AND ITS AFFILIATES AND HOLD EACH BUYER
AND ITS AFFILIATES HARMLESS FROM AND AGAINST ANY AND ALL LIABILITIES, LOSSES,
DAMAGES, COSTS AND EXPENSES OF ANY KIND (INCLUDING, WITHOUT LIMITATION, THE
REASONABLE FEES AND DISBURSEMENTS OF SUCH BUYER’S COUNSEL IN CONNECTION WITH ANY
INVESTIGATIVE, ADMINISTRATIVE OR JUDICIAL PROCEEDING), WHICH MAY BE INCURRED BY
SUCH BUYER OR SUCH AFFILIATES AS A RESULT OF ANY CLAIMS MADE AGAINST SUCH BUYER
OR SUCH AFFILIATES BY ANY PERSON THAT RELATE TO OR ARISE OUT OF (I) ANY BREACH
BY THE COMPANY OF ANY OF ITS REPRESENTATIONS, WARRANTIES OR COVENANTS CONTAINED
IN THIS AGREEMENT OR IN THE TRANSACTION DOCUMENTS (OTHER THAN THE REGISTRATION
RIGHTS AGREEMENT, WHICH CONTAINS SEPARATE INDEMNIFICATION PROVISIONS), OR
(II) ANY LITIGATION, INVESTIGATION OR PROCEEDING INSTITUTED BY ANY PERSON WITH
RESPECT TO THIS AGREEMENT OR THE SHARES (EXCLUDING, HOWEVER, ANY SUCH
LITIGATION, INVESTIGATION OR PROCEEDING WHICH ARISES SOLELY FROM THE ACTS OR
OMISSIONS OF SUCH BUYER OR ITS AFFILIATES).

 

9.2                                 NOTIFICATION.  ANY PERSON ENTITLED TO
INDEMNIFICATION HEREUNDER (“INDEMNIFIED PARTY”) WILL (I) GIVE PROMPT NOTICE TO
THE COMPANY, OF ANY THIRD PARTY CLAIM, ACTION OR SUIT WITH RESPECT TO WHICH IT
SEEKS INDEMNIFICATION (THE “CLAIM”) (BUT OMISSION OF SUCH NOTICE SHALL NOT
RELIEVE THE COMPANY FROM LIABILITY HEREUNDER EXCEPT TO THE EXTENT IT IS ACTUALLY
PREJUDICED BY SUCH FAILURE TO GIVE NOTICE), SPECIFYING IN REASONABLE DETAIL THE
FACTUAL BASIS FOR THE CLAIM, THE AMOUNT THEREOF, ESTIMATED IN GOOD FAITH, AND
THE METHOD OF COMPUTATION OF THE CLAIM, ALL WITH REASONABLE PARTICULARITY AND
CONTAINING A REFERENCE TO THE PROVISIONS OF THIS AGREEMENT IN RESPECT OF WHICH
SUCH INDEMNIFICATION IS SOUGHT WITH RESPECT TO THE CLAIM, AND (II) UNLESS IN
SUCH INDEMNIFIED PARTY’S REASONABLE JUDGMENT A CONFLICT OF INTEREST MAY EXIST
BETWEEN SUCH INDEMNIFIED PARTY AND THE COMPANY WITH RESPECT TO SUCH CLAIM,
PERMIT THE COMPANY TO ASSUME THE DEFENSE OF THE CLAIM WITH COUNSEL REASONABLY
SATISFACTORY TO THE INDEMNIFIED PARTY.  THE INDEMNIFIED PARTY SHALL COOPERATE
FULLY WITH THE COMPANY WITH RESPECT TO THE DEFENSE OF THE CLAIM AND, IF THE
COMPANY ELECTS TO ASSUME CONTROL OF THE DEFENSE OF THE CLAIM, THE INDEMNIFIED
PARTY SHALL HAVE THE RIGHT TO PARTICIPATE IN THE DEFENSE OF THE CLAIM AT ITS OWN
EXPENSE.  IF THE COMPANY DOES NOT ELECT TO

 

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ASSUME CONTROL OR OTHERWISE PARTICIPATE IN THE DEFENSE OF THE CLAIM, THEN THE
INDEMNIFIED PARTY MAY DEFEND THROUGH COUNSEL OF ITS OWN CHOOSING.  IF SUCH
DEFENSE IS NOT ASSUMED BY THE COMPANY, THE COMPANY WILL NOT BE SUBJECT TO ANY
LIABILITY UNDER THIS AGREEMENT OR OTHERWISE FOR ANY SETTLEMENT MADE WITHOUT ITS
CONSENT (BUT SUCH CONSENT WILL NOT BE UNREASONABLY WITHHELD OR DELAYED). IF THE
COMPANY ELECTS NOT TO OR IS NOT ENTITLED TO ASSUME THE DEFENSE OF A CLAIM, IT
WILL NOT BE OBLIGATED TO PAY THE FEES AND EXPENSES OF MORE THAN ONE COUNSEL FOR
ALL INDEMNIFIED PARTIES WITH RESPECT TO THE CLAIM, UNLESS AN ACTUAL CONFLICT OF
INTEREST EXISTS BETWEEN SUCH INDEMNIFIED PARTY AND ANY OTHER OF SUCH INDEMNIFIED
PARTIES WITH RESPECT TO THE CLAIM, IN WHICH EVENT THE COMPANY WILL BE OBLIGATED
TO PAY THE FEES AND EXPENSES OF SUCH ADDITIONAL COUNSEL OR COUNSELS.

 

ARTICLE 10
GOVERNING LAW; MISCELLANEOUS

 

10.1                           GOVERNING LAW.  THIS AGREEMENT SHALL BE ENFORCED,
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF WISCONSIN
APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE,
WITHOUT REGARD TO THE PRINCIPLES OF CONFLICT OF LAWS.  THE PARTIES HERETO HEREBY
SUBMIT TO THE EXCLUSIVE JURISDICTION OF THE UNITED STATES FEDERAL COURTS LOCATED
IN THE STATE OF WISCONSIN WITH RESPECT TO ANY DISPUTE ARISING UNDER THIS
AGREEMENT, THE AGREEMENTS ENTERED INTO IN CONNECTION HEREWITH OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.  ALL PARTIES IRREVOCABLY WAIVE THE
DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH SUIT OR PROCEEDING. 
ALL PARTIES FURTHER AGREE THAT SERVICE OF PROCESS UPON A PARTY MAILED BY FIRST
CLASS MAIL SHALL BE DEEMED IN EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON
THE PARTY IN ANY SUCH SUIT OR PROCEEDING.  NOTHING HEREIN SHALL AFFECT ANY
PARTY’S RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW. ALL PARTIES
AGREE THAT A FINAL NON-APPEALABLE JUDGMENT IN ANY SUCH SUIT OR PROCEEDING SHALL
BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON SUCH
JUDGMENT OR IN ANY OTHER LAWFUL MANNER.  THE PARTY WHICH DOES NOT PREVAIL IN ANY
DISPUTE ARISING UNDER THIS AGREEMENT SHALL BE RESPONSIBLE FOR ALL REASONABLE
FEES AND EXPENSES, INCLUDING REASONABLE ATTORNEYS’ FEES, INCURRED BY THE
PREVAILING PARTY IN CONNECTION WITH SUCH DISPUTE.

 

10.2                           COUNTERPARTS; ELECTRONIC SIGNATURES.  THIS
AGREEMENT MAY BE EXECUTED IN ONE OR MORE COUNTERPARTS, EACH OF WHICH SHALL BE
DEEMED AN ORIGINAL BUT ALL OF WHICH SHALL CONSTITUTE ONE AND THE SAME AGREEMENT
AND SHALL BECOME EFFECTIVE WHEN COUNTERPARTS HAVE BEEN SIGNED BY EACH PARTY AND
DELIVERED TO THE OTHER PARTY.  THIS AGREEMENT, ONCE EXECUTED BY A PARTY, MAY BE
DELIVERED TO THE OTHER PARTY HERETO BY ELECTRONIC TRANSMISSION OF A COPY OF THIS
AGREEMENT BEARING THE SIGNATURE OF THE PARTY SO DELIVERING THIS AGREEMENT.

 

10.3                           HEADINGS.  THE HEADINGS OF THIS AGREEMENT ARE FOR
CONVENIENCE OF REFERENCE ONLY AND SHALL NOT FORM PART OF, OR AFFECT THE
INTERPRETATION OF, THIS AGREEMENT.

 

10.4                           SEVERABILITY.  IN THE EVENT THAT ANY PROVISION OF
THIS AGREEMENT IS INVALID OR UNENFORCEABLE UNDER ANY APPLICABLE STATUTE OR
RULE OF LAW, THEN SUCH PROVISION SHALL BE DEEMED INOPERATIVE TO THE EXTENT THAT
IT MAY CONFLICT THEREWITH AND SHALL BE DEEMED MODIFIED TO CONFORM TO SUCH
STATUTE OR RULE OF LAW.  ANY PROVISION HEREOF WHICH MAY PROVE INVALID OR
UNENFORCEABLE UNDER ANY LAW SHALL NOT AFFECT THE VALIDITY OR ENFORCEABILITY OF
ANY OTHER PROVISION HEREOF.

 

10.5                           ENTIRE AGREEMENT; AMENDMENTS.  THIS AGREEMENT
AMENDS AND RESTATES IN ITS ENTIRETY THE ORIGINAL AGREEMENT AND TOGETHER WITH THE
INSTRUMENTS REFERENCED HEREIN CONTAINS THE ENTIRE UNDERSTANDING OF THE PARTIES
WITH RESPECT TO THE MATTERS COVERED HEREIN AND THEREIN AND SUPERSEDES ALL
PREVIOUS UNDERSTANDINGS OR AGREEMENTS BETWEEN THE PARTIES WITH RESPECT TO SUCH
MATTERS, INCLUDING BUT NOT LIMITED TO ORIGINAL AGREEMENT.  NO PROVISION OF THIS
AGREEMENT MAY BE WAIVED OTHER THAN BY AN INSTRUMENT IN

 

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WRITING SIGNED BY THE PARTY TO BE CHARGED WITH ENFORCEMENT.  THE PROVISIONS OF
THIS AGREEMENT MAY BE AMENDED ONLY BY A WRITTEN INSTRUMENT SIGNED BY THE COMPANY
AND THE BUYERS.

 

10.6                           NOTICES.  ANY NOTICES REQUIRED OR PERMITTED TO BE
GIVEN UNDER THE TERMS OF THIS AGREEMENT SHALL BE SENT BY CERTIFIED OR REGISTERED
MAIL (RETURN RECEIPT REQUESTED) OR DELIVERED PERSONALLY OR BY COURIER (INCLUDING
A RECOGNIZED OVERNIGHT DELIVERY SERVICE) OR BY FACSIMILE AND SHALL BE EFFECTIVE
FIVE DAYS AFTER BEING PLACED IN THE MAIL, IF MAILED BY REGULAR UNITED STATES
MAIL, OR UPON RECEIPT, IF DELIVERED PERSONALLY OR BY COURIER (INCLUDING A
RECOGNIZED OVERNIGHT DELIVERY SERVICE) OR BY FACSIMILE, IN EACH CASE ADDRESSED
TO A PARTY.  THE ADDRESSES FOR SUCH COMMUNICATIONS SHALL BE:

 

If to the Company:

 

Tower Tech Holdings, Inc.

100 Maritime Drive, Suite 3C

Manitowoc, Wisconsin 54220

Telephone: (920) 684-5531

Facsimile:  (920) 684-5579

Attention:  J. Cameron Drecoll

 

With copy to:

 

Fredrikson & Byron, P.A.

4000 U.S. Bank Plaza

200 South Sixth Street

Minneapolis, MN  55402-1425

Telephone: (612) 492-7000

Facsimile:  (612) 492-7077

Attention:  Daniel A. Yarano

 

If to the Buyers:

 

Tontine Partners, L.P.

55 Railroad Avenue, 1st Floor

Greenwich, Connecticut 06830

Attention: Mr. Jeffrey L. Gendell

Telephone: (203) 769-2000

Facsimile: (203) 769-2010

 

With copy to:

 

Barack Ferrazzano Kirschbaum & Nagelberg LLP

200 W. Madison Street, Suite 3900

Chicago, Illinois  60606

Attention: Sarah M. Bernstein, Esq.

Telephone:                                    (312) 984-3100

Facsimile:                                            (312) 984-3150

 

Each party shall provide notice to the other party of any change in address.

 

18

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10.7                           SUCCESSORS AND ASSIGNS.  THIS AGREEMENT SHALL BE
BINDING UPON AND INURE TO THE BENEFIT OF THE PARTIES AND THEIR SUCCESSORS AND
ASSIGNS.  THE COMPANY SHALL NOT ASSIGN THIS AGREEMENT OR ANY RIGHTS OR
OBLIGATIONS HEREUNDER WITHOUT THE PRIOR WRITTEN CONSENT OF THE BUYERS.

 

10.8                           THIRD PARTY BENEFICIARIES.  THIS AGREEMENT IS
INTENDED FOR THE BENEFIT OF THE PARTIES HERETO AND THEIR RESPECTIVE PERMITTED
SUCCESSORS AND ASSIGNS, AND IS NOT FOR THE BENEFIT OF, NOR MAY ANY PROVISION
HEREOF BE ENFORCED BY, ANY OTHER PERSON.

 

10.9                           PUBLICITY.  THE COMPANY AND THE BUYERS SHALL HAVE
THE RIGHT TO REVIEW A REASONABLE PERIOD OF TIME BEFORE ISSUING ANY PRESS
RELEASES OR ANY OTHER PUBLIC STATEMENTS WITH RESPECT TO THE TRANSACTIONS
CONTEMPLATED HEREBY; PROVIDED, HOWEVER, THAT THE COMPANY SHALL BE ENTITLED,
WITHOUT THE PRIOR APPROVAL OF THE BUYERS, TO MAKE ANY PRESS RELEASE WITH RESPECT
TO SUCH TRANSACTIONS AS IS REQUIRED BY APPLICABLE LAW AND REGULATIONS (ALTHOUGH
THE BUYERS SHALL BE CONSULTED BY THE COMPANY IN CONNECTION WITH ANY SUCH PRESS
RELEASE PRIOR TO ITS RELEASE AND SHALL BE PROVIDED WITH A COPY THEREOF AND BE
GIVEN AN OPPORTUNITY TO COMMENT THEREON).  NOTWITHSTANDING THE FOREGOING, THE
COMPANY SHALL FILE WITH THE SEC A FORM 8-K DISCLOSING THE TRANSACTIONS HEREIN
WITHIN FOUR (4) BUSINESS DAYS OF THE CLOSING DATE AND ATTACH THE RELEVANT
AGREEMENTS AND INSTRUMENTS THERETO, AND THE BUYERS MAY MAKE SUCH FILINGS AS MAY
BE REQUIRED UNDER SECTION 13 AND SECTION 16 OF THE 1934 ACT.

 

10.10                     FURTHER ASSURANCES.  EACH PARTY SHALL DO AND PERFORM,
OR CAUSE TO BE DONE AND PERFORMED, ALL SUCH FURTHER ACTS AND THINGS, AND SHALL
EXECUTE AND DELIVER ALL SUCH OTHER AGREEMENTS, CERTIFICATES, INSTRUMENTS AND
DOCUMENTS, AS THE OTHER PARTY MAY REASONABLY REQUEST IN ORDER TO CARRY OUT THE
INTENT AND ACCOMPLISH THE PURPOSES OF THIS AGREEMENT AND THE CONSUMMATION OF THE
TRANSACTIONS CONTEMPLATED HEREBY.

 

10.11                     NO STRICT CONSTRUCTION.  THE LANGUAGE USED IN THIS
AGREEMENT WILL BE DEEMED TO BE THE LANGUAGE CHOSEN BY THE PARTIES TO EXPRESS
THEIR MUTUAL INTENT, AND NO RULES OF STRICT CONSTRUCTION WILL BE APPLIED AGAINST
ANY PARTY.

 

10.12                     RIGHTS CUMULATIVE.  EACH AND ALL OF THE VARIOUS
RIGHTS, POWERS AND REMEDIES OF THE PARTIES SHALL BE CONSIDERED CUMULATIVE WITH
AND IN ADDITION TO ANY OTHER RIGHTS, POWERS AND REMEDIES WHICH OR THE
TRANSACTION DOCUMENTS SUCH PARTIES MAY HAVE AT LAW OR IN EQUITY IN THE EVENT OF
THE BREACH OF ANY OF THE TERMS OF THIS AGREEMENT.  THE EXERCISE OR PARTIAL
EXERCISE OF ANY RIGHT, POWER OR REMEDY SHALL NEITHER CONSTITUTE THE EXCLUSIVE
ELECTION THEREOF NOR THE WAIVER OF ANY OTHER RIGHT, POWER OR REMEDY AVAILABLE TO
SUCH PARTY.

 

10.13                     SURVIVAL.  ANY COVENANT OR AGREEMENT IN THIS AGREEMENT
REQUIRED TO BE PERFORMED FOLLOWING THE CLOSING DATE, SHALL SURVIVE THE CLOSING
DATE. WITHOUT LIMITATION OF THE FOREGOING, THE RESPECTIVE REPRESENTATIONS AND
WARRANTIES GIVEN BY THE PARTIES HERETO SHALL SURVIVE THE CLOSING DATE AND THE
CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED HEREIN, BUT ONLY FOR A PERIOD OF
THE EARLIER OF (I) THREE (3) YEARS FOLLOWING THE CLOSING DATE AND (II) THE
APPLICABLE STATUTE OF LIMITATIONS WITH RESPECT TO EACH REPRESENTATION AND
WARRANTY, AND THEREAFTER SHALL EXPIRE AND HAVE NO FURTHER FORCE AND EFFECT..

 

10.14                     KNOWLEDGE.  THE TERM “KNOWLEDGE OF THE COMPANY” OR ANY
SIMILAR FORMULATION OF KNOWLEDGE SHALL MEAN, THE ACTUAL KNOWLEDGE AFTER DUE
INQUIRY OF AN EXECUTIVE OFFICER OF THE COMPANY.

 

10.15                     ASSIGNMENT TO T25.  BY EXECUTION OF THIS AGREEMENT,
EACH OF THE UNDERSIGNED HEREBY CONFIRMS ITS AGREEMENT THAT TCP SHALL NOT BE
ENTITLED TO THE RIGHTS AND PRIVILEGES AND SHALL NOT BE BOUND BY THE OBLIGATIONS
OF A “BUYER,” OR OTHERWISE, UNDER THIS AGREEMENT AND TCP DOES HEREBY ASSIGN TO
T25 ANY AND ALL OF ITS RIGHTS AND OBLIGATIONS UNDER THE ORIGINAL AGREEMENT AND
T25 DOES HEREBY ASSUME AND AGREES TO DISCHARGE ANY AND ALL OF TCP’S OBLIGATIONS
UNDER ORIGINAL AGREEMENT.

 

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                IN WITNESS WHEREOF, the undersigned have caused this Agreement
to be duly executed as of the date first above written.

 

 

COMPANY:

 

 

 

TOWER TECH HOLDINGS INC.

 

 

 

By:

/s/ Steven A. Huntington

 

 

Name:

Steven A. Huntington

 

 

Title:

CFO

 

 

 

 

TCP:

 

 

 

TONTINE CAPITAL PARTNERS, L.P.

 

 

 

By:

Tontine Capital Management, L.L.C, its general partner

 

 

 

By:

/s/ Jeffrey L. Gendell

 

 

 

Jeffrey L. Gendell, as managing member

 

 

 

BUYERS:

 

 

 

TONTINE 25 OVERSEAS MASTER FUND, L.P.

 

 

 

By:

Tontine Capital Management, L.L.C, its general partner

 

 

 

By:

/s/ Jeffrey L. Gendell

 

 

 

Jeffrey L. Gendell, as managing member

 

 

 

TONTINE PARTNERS, L.P.

 

 

 

By:

Tontine Management, L.L.C., its general partner

 

 

 

By:

/s/ Jeffrey L. Gendell

 

 

 

Jeffrey L. Gendell, as managing member

 

 

S-1

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SCHEDULE 1

 

NAME

 

JURISDICTION OF ORGANIZATION AND
FORM OF ENTITY

 

NUMBER OF
SHARES

 

PURCHASE
PRICE

Tontine Partners, L.P.

 

Delaware Limited Partnership

 

1,531,250

 

$

12,985,000

Tontine 25 Overseas Master Fund, L.P.

 

Cayman Islands Limited Partnership

 

500,000

 

$

4,240,000

 

 

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EXHIBIT A

 

FORM OF LEGAL OPINION

 

                1.  The Company and each of its Subsidiaries is a corporation,
validly existing and in good standing under the laws of the state of the
jurisdiction in which it is incorporated.  The Company and each of its
Subsidiaries are duly qualified as a foreign corporation to do business and are
in good standing in the States of Wisconsin or Illinois.

 

                2.  The Company has all necessary corporate power and authority
to execute, deliver and perform its obligations under each of the Transaction
Documents. The execution, delivery and performance of each of the Transaction
Documents have been duly authorized by all necessary corporate action on the
part of the Company.

 

                3.  The Company has all requisite corporate power and authority
to own and operate its property and to conduct the business in which it is
currently engaged.

 

                4.  Each of the Transaction Documents has been duly executed and
delivered by the Company and constitutes the legal, valid and binding obligation
of the Company, enforceable against the Company in accordance with its terms.

 

                5.  Except as set forth in Section [    ] of the Disclosure
Schedules, the issuance, sale and delivery of the Shares and the execution,
delivery and performance by the Company of the Transaction Documents and the
consummation by the Company of the transactions contemplated thereby do not
violate or result in a breach of or default under the Articles of Incorporation,
as amended, or the Bylaws or any requirement of law that to our knowledge, is
applicable to the performance by the Company of the transactions contemplated by
the Transaction Documents.

 

                6.  To our knowledge, there are no legal actions, suits,
proceedings, or disputes pending or threatened against, or affecting, the
Company, at law, in equity, in arbitration or before any governmental authority
that contest the execution, validity or performance of the Transaction
Documents.

 

                7.  Except for filings, authorizations or approvals contemplated
by the Agreement, to our knowledge no authorizations or approvals of, and no
filings with, any governmental authority are necessary or required for the
execution, delivery or performance by, or enforcement against, the Company of
any of the Transaction Documents.

 

                8.  The Shares are duly authorized and, when issued and sold to
the Buyers after payment therefor in accordance with the terms of the
Transaction Documents, will be validly issued, fully paid and non-assessable.

 

                9.  To our knowledge, there are no contractual preemptive
rights, rights of first refusal or similar rights with respect to the issuance
and sale of the Shares.

 

                10.  Assuming that the representations made by the Buyers in the
Agreement are true and correct and that any required filings are made pursuant
to Rule 503 of Regulation D as promulgated under the Securities Act of 1933, the
offering, sale and issuance of the Shares pursuant to the Agreement do not
require registration under the Securities Act of 1933, as amended and the
rules promulgated thereunder as they currently exist or registration or
qualification under any state securities laws.

 

 

A-1

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