Unassociated Document


     

    RESERVE EQUITY FINANCING
AGREEMENT

     

    THIS AGREEMENT dated as of the
10th
day of May 2010 (the “Agreement”), between
AGS Capital Group, LLC,
a New York limited liability company (the “Investor”), and Vertro, Inc., a corporation
organized and existing under the laws of the State of Delaware (the “Company”).

     

    WHEREAS, the parties desire
that, upon the terms and subject to the conditions contained herein, the Company
may issue and sell to the Investor, from time to time as provided herein, and
the Investor shall purchase from the Company shares of the Company’s common
stock, par value $.001 per share (the “Common Stock”) for an
aggregate purchase price up to Two Million Dollars ($2,000,000) on a private
placement basis pursuant to an exemption from registration under Section 4(2) of
the Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder (the “Securities Act”),
and/or pursuant to the provisions and rules of Regulation D (“Regulation D”) that
has been promulgated under the Securities Act; and

     

    WHEREAS, the Investors shall
be entitled to resell shares of Common Stock acquired hereunder pursuant to a
resale registration statement established by the Company pursuant to the terms
of the Registration Rights Agreement between the Company and the Investor which
shall be declared effective prior to the delivery of an Advance Notice
hereunder.

     

    NOW, THEREFORE, the parties hereto
agree as follows:

     

    ARTICLE
I.

    Certain
Definitions

     

    Section 1.1.  “Advance” shall mean
each occasion the Company elected to exercise its rights to deliver an Advance
Notice required the Investor to purchase the Common Stock as specified in such
Advance Notice, subject to the terms and conditions of this
Agreement.

     

    Section 1.2.  “Advance Date” shall
mean the first Trading Day after expiration of the applicable Pricing Period for
each Advance.

     

    Section 1.3.  “Advance Notice” shall
mean a written notice in the form of Exhibit A attached
hereto to the Investor executed by an officer of the Company and setting forth
the Advance amount in dollars that the Company intends to sell to the Investor
in accordance with the terms and conditions of this Agreement.

     

    Section 1.4.  “Advance Notice Date”
shall mean each date the Company delivers (in accordance with
Section 2.2(b) of this Agreement) to the Investor an Advance Notice
requiring the Investor to purchase the dollar amount of Common Stock specified
in the Advance Notice, subject to the terms and conditions of this Agreement. No
Advance Notice Date shall be less than five (5) Trading Days after the
prior Advance Notice Date.

     

    Section
1.5.  “Agreement” shall have
the meaning set forth in the introductory paragraph of this
Agreement.

     

    Section 1.6.  “Bid Price” shall
mean, on any date, the closing bid price (as reported by Bloomberg L.P. or other
comparable reporting service) of the Common Stock on or reported by the
Principal Market or if the Common Stock is not traded on a Principal Market, the
highest reported bid price for the Common Stock, as furnished by the Financial
Industry Regulatory Authority.

     

    Section 1.7.  “Closing” shall mean
one of the closings of a purchase and sale of Common Stock pursuant to
Section 2.3.

     

    Section 1.8.  “Commitment Amount”
shall mean Two Million Dollars ($2,000,000).

     

    Section 1.9.  “Commitment Period”
shall mean the period commencing on the Effective Date, and expiring upon the
termination of this Agreement in accordance with
Section 10.2.


    
      
         


      

      
         


        
          

        

      

      
         


      

    

     

    Section 1.10.  “Common Stock” shall
mean the meaning set forth in the Recitals of this Agreement.

     

    Section
1.11.  “Company” shall have
the meaning set forth in the introductory paragraph of this
Agreement.

     

    Section 1.12.  “Condition Satisfaction
Date” shall have the meaning set forth in Section 7.2.

     

    Section 1.13.  “Damages” shall mean
any loss, claim, damage, liability, costs and expenses (including, without
limitation, reasonable attorney’s fees and disbursements and costs and expenses
of expert witnesses and investigation).

     

    Section 1.14.
“Effective
Date” shall mean the date on which the SEC first declares effective a
Registration Statement registering the resale of the Registrable Securities as
set forth in Section 7.2(a).

     

    Section 1.15.  “Exchange Act” shall
mean the Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder.

     

    Section 1.16.  “FINRA” shall mean the
Financial Industry Regulatory Authority.

     

    Section
1.17.  “Investor” shall have
the meaning set forth in the introductory paragraph of this
Agreement.

     

    Section 1.18.  “Material Adverse
Effect” shall mean any condition, circumstance, or situation that may
result in, or reasonably be expected to result in, (i) a material adverse
effect on the legality, validity or enforceability of the Agreement, (ii) a
material adverse effect on the results of operations, assets, business or
condition (financial or otherwise) of the Company, taken as a whole, or
(iii) a material adverse effect on the Company’s ability to perform in any
material respect on a timely basis its obligations under the
Agreement.

     

    Section 1.19.  “Market Price” shall
mean the lowest VWAP of the Common Stock during the Pricing Period.

     

    Section 1.20.  “Maximum Advance
Amount” shall equal the greater of (i) $500,000 or (ii) 500% of the
quotient obtained by dividing (x) the average daily trading volume, as reported
by Bloomberg or comparable financial news service (U.S market only), for the 10
days immediately preceding the Advance Notice Date by (y) the VWAP.

     

    Section 1.21.  “Person” shall mean an
individual, a corporation, a partnership, an association, a trust or other
entity or organization, including a government or political subdivision or an
agency or instrumentality thereof.

     

    Section 1.22.  “Pricing Period” shall
mean the five (5) consecutive Trading Days after the Advance Notice
Date.

     

    Section 1.23.  “Principal Market”
shall mean the Nasdaq Global Select Market, the Nasdaq Global Market, the Nasdaq
Capital Market, the American Stock Exchange, the OTC Bulletin Board, or the New
York Stock Exchange, or any successors to any of the above, whichever is at the
time the principal trading exchange, market, or quotations service for the
Common Stock.

     

    Section 1.24.  “Purchase Price” shall
mean ninety two percent (92%) of the Market Price during the Pricing
Period.

     

    Section 1.25.  “Registrable
Securities” shall mean the shares of Common Stock to be issued hereunder
(i) in respect of which the Registration Statement has not been declared
effective by the SEC, (ii) which have not been sold under circumstances
meeting all of the applicable conditions of Rule 144 (or any similar
provision then in force) under the Securities Act (“Rule 144”) or
(iii) which have not been otherwise transferred to a holder who may trade
such shares without restriction under the Securities Act, and the Company has
delivered a new certificate or other evidence of ownership for such securities
not bearing a restrictive legend.


    
      
         


      

      
         


        
          

        

      

      
         


      

    

     

    Section 1.26.  “Registration Rights
Agreement” shall mean the Registration Rights Agreement dated the date
hereof, regarding the filing of the Registration Statement for the resale of the
Registrable Securities, entered into between the Company and the
Investor.

     

    Section 1.27.  “Registration
Statement” shall mean a registration statement on Form S-1 or Form S-3
(if use of such form is then available to the Company pursuant to the rules of
the SEC and, if not, on such other form promulgated by the SEC for which the
Company then qualifies and which counsel for the Company shall deem appropriate,
and which form shall be available for the resale of the Registrable Securities
to be registered thereunder in accordance with the provisions of this Agreement
and the Registration Rights Agreement, and in accordance with the intended
method of distribution of such securities), for the registration of the resale
by the Investor of the Registrable Securities under the Securities
Act.

     

    Section 1.28.  “Regulation D”
shall have the meaning set forth in the recitals of this Agreement.

     

    Section 1.29.  “SEC” shall mean the
United States Securities and Exchange Commission.

     

    Section 1.30.  “Securities Act” shall
have the meaning set forth in the recitals of this Agreement.

     

    Section 1.31.  “Trading Day” shall
mean any day during which the Nasdaq Stock Exchange shall be open for
business.

     

    Section 1.32.  “VWAP” shall mean,
with respect to the Common Stock, as of any date, the daily dollar
volume-weighted average price per share for the Common Stock as reported by
Bloomberg, LP through its “Historical Price Table Screen (HP)” with Market:
Weighted Ave function selected (or comparable financial news service (U.S market
only), or, if no dollar volume-weighted average price is reported for such
security by Bloomberg, LP (or comparable financial news service (U.S market
only), the average of the highest closing bid price and the lowest closing ask
price per share of any of the market makers for the Common Stock as reported in
the “pink sheets” by Pink Sheets LLC.

     

    ARTICLE
II.

    Advances

     

    Section 2.1. Advances.

     

    Subject to the terms and conditions of
this Agreement (including, without limitation, the provisions of
Article VII hereof), the Company, at its sole and exclusive option, may
issue and sell to the Investor, and the Investor shall purchase from the
Company, shares of the Company’s Common Stock by the delivery, in the Company’s
sole discretion, of Advance Notices.  The number of shares of Common
Stock that the Investor shall purchase pursuant to each Advance shall be
determined by dividing the amount of the Advance by the Purchase Price. No
fractional shares shall be issued. Fractional shares shall be rounded to the
next higher whole number of shares.  The aggregate maximum amount of
all Advances that the Investor shall be obligated to make under this Agreement
shall not exceed the Commitment Amount.

     

    Section 2.2.
Mechanics.

     

    (a)   Advance Notice. At
any time during the Commitment Period, the Company may require the Investor to
purchase shares of Common Stock by delivering an Advance Notice to the Investor,
subject to the conditions set forth in Section 7.2; provided, however, the
amount for each Advance as designated by the Company in the applicable Advance
Notice shall not be more than the Maximum Advance Amount and the aggregate
amount of the Advances pursuant to this Agreement shall not exceed the
Commitment Amount. Except as otherwise set forth in this Agreement and except as
prohibited by applicable law, the Company acknowledges that the Investor has the
right to sell shares of the Company’s Common Stock at any time.  There
shall be a minimum of five (5) Trading Days between each Advance
Notice.


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    (b)    Date of Delivery of Advance
Notice. An Advance Notice shall be deemed delivered on (i) the
Trading Day it is received by email (to the address set forth in Section 11.1
herein) by the Investor if such notice is received prior to 5:00 pm Eastern
Time, or (ii) the immediately succeeding Trading Day if it is received by
email after 5:00 pm Eastern Time on a Trading Day or at any time on a day which
is not a Trading Day. No Advance Notice may be deemed delivered on a day that is
not a Trading Day.  

     

    Section 2.3. Closings.

     

    (a)           On
the Advance Date, the Company shall deliver, or cause to be delivered, to the
Investor such number of shares of Common Stock (delivered electronically, and
credited to the account of Investor’s designated broker with The Depository
Trust Company through its Deposit/Withdrawal At Custodian or DWAC system), as
shall equal the number of shares of Common Stock  that Investor has
been deemed to have purchased from the Company pursuant to Section 2.1 hereof,
or such lesser number of shares of Common Stock as results from any reduction as
set forth in Section 7.2(g), against delivery by the Investor of payment
immediately thereafter of the amount of the Advance by wire transfer of
immediately available funds to an account designated by the
Company.  On or prior to the Advance Date, each of the Company and the
Investor shall deliver to the other all documents, instruments and writings
required to be delivered by either of them pursuant to Section 2.3(b) below in
order to implement and effect the transactions contemplated herein. To the
extent the Company has not paid the fees, expenses, and disbursements of the
Investor in accordance with Section 12.4, the amount of such fees,
expenses, and disbursements may be deducted by the Investor (and shall be paid
to the relevant party) directly out of the proceeds of the Advance with no
reduction in the amount of shares of the Company’s Common Stock to be delivered
on such Advance Date.

     

                          (b)    Obligations Upon
Closing. The Investor agrees to advance the amount corresponding to the
Advance Notice to the Company upon completion of each of the following
conditions:

     

    (i)           The
Company shall deliver to the Investor the shares of Common Stock applicable to
the Advance in accordance with Section 2.3(a).

     

    (ii)          The
Registration Statement filed pursuant to the Registration Rights Agreement shall
be effective and available for the resale of all applicable shares of Common
Stock to be issued in connection with the Advance;

     

    (iii)         the
Company shall have obtained all permits and qualifications required by any
applicable state that are material for the offer and sale of the Registrable
Securities, or shall have the availability of exemptions therefrom. The sale and
issuance of the Registrable Securities shall be legally permitted by all laws
and regulations to which the Company is subject;

     

    (iv)         the
Company shall have filed with the SEC in a timely manner all reports, notices
and other documents required of a “reporting company” under the Exchange Act and
applicable Commission regulations;

     

    (v)          the
Company shall pay any unpaid fees as set forth in Section 12.4 below or
withhold such amounts as provided in Section 2.3; and

     

    (vi)         the
Company’s transfer agent shall be DWAC eligible.

     

    (vii)        the
conditions in Section 7.2 and 2.3(a) are satisfied or waived.

     

    Section 2.4.
Hardship. In
the event the Investor sells shares of the Company’s Common Stock after receipt
of an Advance Notice and the Company fails to perform its obligations as
mandated in Section 2.3, and specifically the Company fails to deliver to
the Investor on the Advance Date the shares of Common Stock corresponding to the
applicable Advance pursuant to Section 2.3(a)(i), the Company acknowledges
that the Investor shall suffer financial hardship and therefore shall be liable
for any and all losses, commissions, fees, or financial hardship caused to the
Investor.


    
      
         


      

      
         


        
          

        

      

      
         


      

    

     

    ARTICLE
III.

    Representations
of Investor

     

    Investor
hereby represents and warrants to, and agrees with, the Company that the
following are true and correct as of the date hereof and as of each Advance
Date:

     

    Section 3.1.
Organization and
Authorization. The Investor is duly incorporated or organized and validly
existing in the jurisdiction of its incorporation or organization and has all
requisite power and authority to purchase and hold the securities issuable
hereunder. The decision to invest and the execution and delivery of this
Agreement by such Investor, the performance by such Investor of its obligations
hereunder and the consummation by such Investor of the transactions contemplated
hereby have been duly authorized and requires no other proceedings on the part
of the Investor. The undersigned has the right, power and authority to execute
and deliver this Agreement and all other instruments (including, without
limitations, the Registration Rights Agreement), on behalf of the Investor. This
Agreement has been duly executed and delivered by the Investor and, assuming the
execution and delivery hereof and acceptance thereof by the Company, will
constitute the legal, valid and binding obligations of the Investor, enforceable
against the Investor in accordance with its terms.

     

    Section 3.2.
Evaluation of
Risks. The Investor has such knowledge and experience in financial, tax
and business matters as to be capable of evaluating the merits and risks of, and
bearing the economic risks entailed by, an investment in the Company and of
protecting its interests in connection with this transaction. The Investor
recognizes that its investment in the Company involves a high degree of
risk.

     

    Section 3.3.
No Legal Advice From
the Company. The Investor acknowledges that it had the opportunity to
review this Agreement and the transactions contemplated by this Agreement with
his or its own legal counsel and investment and tax advisors. The Investor is
relying solely on such counsel and advisors and not on any statements or
representations of the Company or any of its representatives or agents for
legal, tax or investment advice with respect to this investment, the
transactions contemplated by this Agreement or the securities laws of any
jurisdiction.

     

    Section 3.4.
Investment
Purpose. The securities are being purchased by the Investor for its own
account, and for investment purposes. The Investor agrees not to assign or in
any way transfer the Investor’s rights to the securities or any interest therein
and acknowledges that the Company will not recognize any purported assignment or
transfer except in accordance with applicable Federal and state securities laws.
No other person has or will have a direct or indirect beneficial interest in the
securities. The Investor agrees not to sell, hypothecate or otherwise transfer
the Investor’s securities unless the securities are registered under Federal and
applicable state securities laws or unless, in the opinion of counsel
satisfactory to the Company, an exemption from such laws is
available.

     

    Section 3.5.
Accredited
Investor. The Investor is an “Accredited Investor”
as that term is defined in Rule 501(a) of Regulation D of the
Securities Act.

     

    Section 3.6.
Information.
The Investor and its advisors (and its counsel), if any, have been furnished
with all materials relating to the business, finances and operations of the
Company and information it deemed material to making an informed investment
decision. The Investor and its advisors, if any, have been afforded the
opportunity to ask questions of the Company and its management. Neither such
inquiries nor any other due diligence investigations conducted by such Investor
or its advisors, if any, or its representatives shall modify, amend or affect
the Investor’s right to rely on the Company’s representations and warranties
contained in this Agreement. The Investor understands that its investment
involves a high degree of risk. The Investor is in a position regarding the
Company, which, based upon employment, family relationship or economic
bargaining power, enabled and enables such Investor to obtain information from
the Company in order to evaluate the merits and risks of this investment. The
Investor has sought such accounting, legal and tax advice, as it has considered
necessary to make an informed investment decision with respect to this
transaction.

     

    Section 3.7.
Receipt of
Documents. The Investor and its counsel have received and read in their
entirety: (i) this Agreement and the Exhibits annexed hereto; (ii) all
due diligence and other information necessary to verify the accuracy and
completeness of such representations, warranties and covenants; (iii) the
Company’s Form 10-K for the period ended December 31, 2009 and other SEC
filings; and (iv) answers to all questions the Investor submitted to the
Company regarding an investment in the Company; and the Investor has relied on
the information contained therein and has not been furnished any other
documents, literature, memorandum or prospectus.


    
      
         


      

      
         


        
          

        

      

      
         


      

    

     

    Section 3.8.
No General
Solicitation. Neither the Company, nor any of its affiliates, nor any
person acting on its or their behalf, has engaged in any form of general
solicitation or general advertising (within the meaning of Regulation D
under the Securities Act) in connection with the offer or sale of the shares of
Common Stock offered hereby.

     

    Section 3.9.
Not an
Affiliate. The Investor is not an officer, director or a person that
directly, or indirectly through one or more intermediaries, controls or is
controlled by, or is under common control with the Company or any “Affiliate” of the
Company (as that term is defined in Rule 405 of the Securities
Act).

     

    Section 3.10.
Trading
Activities. The Investor’s trading activities with respect to the
Company’s Common Stock shall be in compliance with all applicable federal and
state securities laws, rules and regulations and the rules and regulations of
the Principal Market on which the Company’s Common Stock is listed or
traded.  Investor makes no representations or covenants that it will
not engage in trading in the securities of the Company, other than the Investor
will not engage in any Short Sales of the Company's common stock at any time
during the Agreement.  The Investor covenants that neither the
Investor nor any of its affiliates nor any entity managed or controlled by the
Investor will, or cause or assist any person to, enter into or execute any
“short sale” (as such term is defined in Rule 200 of Regulation SHO, or any
successor regulation, promulgated by the Commission under the Exchange Act) of
any securities of the Company, and that the Investor and its affiliates shall
comply with all other applicable law.

     

    Section
3.11. Statutory
Underwriter Status. The Investor acknowledges that, pursuant to the
Commission’s current interpretations of the Securities Act, the Investor will be
disclosed as an “underwriter” within the meaning of the Securities Act in the
Registration Statement (and amendments thereto) and in any Prospectus contained
therein to the extent required by applicable law.

     

    Section
3.12. Prospectus
Delivery. The Investor agrees that unless the Registrable Securities are
eligible for resale pursuant to all the conditions of Rule 144 without volume or
manner of sale limitations, it will resell the Registrable Securities only
pursuant to the Registration Statement, in a manner described under the caption
“Plan of Distribution” in the Registration Statement, and in a manner in
compliance with all applicable securities laws, including, without limitation,
any applicable prospectus delivery requirements of the Securities Act and any
other trading restrictions of the Exchange Act.

     

    Section
3.13. Financial
Capability. The Investor has the current financial capability to perform
all of its obligations under this Agreement, including the capability to
purchase the Registrable Securities in accordance with the terms
hereof.

     

    Section
3.14. No
Conflicts. The execution, delivery and performance of this Agreement, the
Registration Rights Agreement and any other document or instrument contemplated
hereby, by the Investor and the consummation of the transactions contemplated
thereby do not (i) violate any provision of the Investor’s charter documents or
bylaws, (ii) conflict with, or constitute a default (or an event which with
notice or lapse of time or both would become a default) under, or give to others
any rights of termination, amendment, acceleration or cancellation of, any
material agreement, mortgage, deed of trust, indenture, note, bond, license,
lease agreement, instrument or obligation to which the Investor is a party,
(iii) create or impose a lien, charge or encumbrance on any property of the
Investor under any agreement or any commitment to which the Investor is a party
or by which the Investor is bound or by which any of its respective properties
or assets are bound, (iv) result in a violation of any federal, state, local or
foreign statute, rule, regulation, order, writ, judgment or decree (including
federal and state securities laws and regulations) applicable to the Investor or
by which any property or asset of the Investor are bound or affected, or (v)
require the consent of any third-party that has not been obtained pursuant to
any material contract to which Investor is subject or to which any of its
assets, operations or management may be subject. The Investor is not required
under federal, state, foreign or local law, rule or regulation to obtain any
consent, authorization or order of, or make any filing or registration with, any
court or governmental agency in order for it to execute, deliver or perform any
of its obligations under this Agreement or to purchase the Registrable
Securities in accordance with the terms hereof.


    
      
         


      

      
         


        
          

        

      

      
         


      

    

     

    ARTICLE
IV.

    Representations
and Warranties of the Company

     

    Except as
stated below, on the disclosure schedules attached hereto or in the SEC
Documents (as defined herein), the Company hereby represents and warrants to,
and covenants with, the Investor that the following are true and correct as of
the date hereof:

     

    Section 4.1.
Organization and
Qualification. The Company is duly incorporated or organized and validly
existing in the jurisdiction of its incorporation or organization and has all
requisite corporate power to own its properties and to carry on its business as
now being conducted. Each of the Company and its subsidiaries is duly qualified
as a foreign corporation to do business and is in good standing in every
jurisdiction in which the nature of the business conducted by it makes such
qualification necessary, except to the extent that the failure to be so
qualified or be in good standing would not have a Material Adverse Effect on the
Company and its subsidiaries taken as a whole.

     

    Section 4.2.
Authorization,
Enforcement, Compliance with Other Instruments. (i) The Company has
the requisite corporate power and authority to enter into and perform this
Agreement, the Registration Rights Agreement and any related agreements, in
accordance with the terms hereof and thereof, (ii) the execution and
delivery of this Agreement, the Registration Rights Agreement and any related
agreements by the Company and the consummation by it of the transactions
contemplated hereby and thereby, have been duly authorized by the Company’s
Board of Directors and no further consent or authorization is required by the
Company, its Board of Directors or its stockholders, (iii) this Agreement,
the Registration Rights Agreement and any related agreements have been duly
executed and delivered by the Company, (iv) this Agreement, the
Registration Rights Agreement and assuming the execution and delivery thereof
and acceptance by the Investor and any related agreements constitute the valid
and binding obligations of the Company enforceable against the Company in
accordance with their terms, except as such enforceability may be limited by
general principles of equity or applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation or similar laws relating to, or
affecting generally, the enforcement of creditors’ rights and
remedies.  include

     

    Section 4.3.
Capitalization.  The
authorized capital stock of the Company consists of 200,000,000 shares of Common
Stock, of which 34,438,657 shares of Common Stock are issued and outstanding,
and 500,000 shares of authorized Preferred Stock, of which no shares are issued
and outstanding  All of such outstanding shares have been validly
issued and are fully paid and nonassessable. Except as disclosed in the SEC
Documents (as defined in paragraph 4.5), no shares of Common Stock are subject
to preemptive rights or any other similar rights or any liens or encumbrances
suffered or permitted by the Company. Except as disclosed in the SEC Documents
and on Schedule 4.3, as of the date hereof, there are no outstanding
options, warrants, scrip, rights to subscribe to, calls or commitments of any
character whatsoever relating to, or securities or rights convertible into, any
shares of capital stock of the Company or any of its subsidiaries, or contracts,
commitments, understandings or arrangements by which the Company or any of its
subsidiaries is or may become bound to issue additional shares of capital stock
of the Company or any of its subsidiaries or options, warrants, scrip, rights to
subscribe to, calls or commitments of any character whatsoever relating to, or
securities or rights convertible into, any shares of capital stock of the
Company or any of its subsidiaries, except pursuant to the terms of an agreement
between the Company and the Investor. There are no securities or instruments
containing anti-dilution or similar provisions that will be triggered by this
Agreement or any related agreement or the consummation of the transactions
described herein or therein. The Company has furnished to the Investor true and
correct copies of the Company’s Certificate of Incorporation, as amended and as
in effect on the date hereof (the “Certificate of
Incorporation”), and the Company’s By-laws, as in effect on the date
hereof (the “By-laws”), and the
terms of all securities convertible into or exercisable for Common Stock and the
material rights of the holders thereof in respect thereto.


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    Section 4.4.
No Conflict.
The execution, delivery and performance of this Agreement by the Company and the
consummation by the Company of the transactions contemplated hereby will not
(i) result in a violation of the Certificate of Incorporation, any
certificate of designations of any outstanding series of preferred stock of the
Company or By-laws, or (ii) conflict with or constitute a default (or an
event which with notice or lapse of time or both would become a default) under,
or give to others any rights of termination, amendment, acceleration or
cancellation of, any agreement, indenture or instrument to which the Company or
any of its subsidiaries is a party, or result in a violation of any law, rule,
regulation, order, judgment or decree (including federal and state securities
laws and regulations and the rules and regulations of the Principal Market on
which the Common Stock is quoted) applicable to the Company or any of its
subsidiaries or by which any material property or asset of the Company or any of
its subsidiaries is bound or affected, or (iii) conflict with or violate the
terms of any material contract, agreement, mortgage, indebtedness, indenture,
instrument, judgment, decree or order or any statute, rule or regulation
applicable to the Company or its subsidiaries, or (iv) conflict with or result
in a violation of any law, ordinance, regulation of any governmental entity to
which the Company or any of its subsidiaries is bound, other than, in the case
of  clauses (ii), (iii) and (iv) above, any such item that,
individually or in the aggregate, have not had and would not reasonably be
expected to have a Material Adverse Effect.  Except as specifically
contemplated by this Agreement and as required under the Securities 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 or governmental agency in order for it to execute, deliver or perform any
of its obligations under or contemplated by this Agreement or the Registration
Rights Agreement in accordance with the terms hereof or thereof. All consents,
authorizations, orders, filings and registrations which the Company is required
to obtain pursuant to the preceding sentence have been obtained or effected on
or prior to the date hereof.

     

    Section 4.5.
SEC Documents;
Financial Statements. The Company has filed all reports, schedules,
forms, statements and other documents required to be filed by it with the SEC
under the Securities Exchange Act for the two years preceding the date hereof
(or such shorter period as the Company was required by law or regulation to file
such material) (all of the foregoing filed prior to the date hereof or amended
after the date hereof and all exhibits include therein and financial statements
and schedules thereto and documents incorporated by reference therein, being
hereinafter referred to as the “SEC Documents”) on
timely basis or has received a valid extension of such time of filing and has
filed any such SEC Document prior to the expiration of any such extension. The
Company has delivered to the Investor or its representatives, or made available
through the SEC’s website at http://www.sec.gov., true and complete copies of
the SEC Documents. As of their respective dates, the SEC Documents complied in
all material respects with the requirements of 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 the light of the circumstances under which they were
made, not misleading. 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 generally accepted accounting principles,
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
exclude footnotes or may be condensed or summary statements) and fairly present
in all material respects the financial position of the Company as of the dates
thereof and the results of its operations and cash flows for the periods then
ended (subject, in the case of unaudited statements, to normal year-end audit
adjustments).

     

    Section 4.6. Absence of Events of
Default . Except for matters described in the SEC Documents and/or this
Agreement, no Event of Default, as defined in the respective agreement to which
the Company is a party, and no event which, with the giving of notice or the
passage of time or both, would become an Event of Default (as so defined), has
occurred and is continuing, which would have a Material Adverse Effect on the
Company’s business, properties, prospects, financial condition or results of
operations.

     

    Section 4.7.
Intellectual Property
Rights. To its knowledge, the Company and its subsidiaries own or possess
adequate rights or licenses to use all material trademarks, trade names, service
marks, service mark registrations, service names, patents, patent rights,
copyrights, inventions, licenses, approvals, governmental authorizations, trade
secrets and rights necessary to conduct their respective businesses as now
conducted. The Company and its subsidiaries do not have any knowledge of any
infringement by the Company or its subsidiaries of trademark, trade name rights,
patents, patent rights, copyrights, inventions, licenses, service names, service
marks, service mark registrations, trade secret or other similar rights of
others, and, to the knowledge of the Company, there is no claim, action or
proceeding being made or brought against, or to the Company’s knowledge, being
threatened against, the Company or its subsidiaries regarding trademark, trade
name, patents, patent rights, invention, copyright, license, service names,
service marks, service mark registrations, trade secret or other infringement;
and the Company and its subsidiaries are unaware of any facts or circumstances
which might give rise to any of the foregoing.


    
      
         


      

      
         


        
          

        

      

      
         


      

    

     

    Section 4.8.
Employee
Relations. Neither the Company nor any of its subsidiaries is involved in
any material labor dispute nor, to the knowledge of the Company or any of its
subsidiaries, is any such material labor dispute threatened. None of the
Company’s or its subsidiaries’ is a party to a collective bargaining
agreement.

     

    Section 4.9.
Environmental
Laws. Except as set forth in the SEC Documents, the Company and its
subsidiaries are (i) in compliance with any and all applicable material
foreign, federal, state and local laws and regulations relating to the
protection of human health and safety, the environment or hazardous or toxic
substances or wastes, pollutants or contaminants (“Environmental Laws”),
(ii) have received all permits, licenses or other approvals required of
them under applicable Environmental Laws to conduct their respective businesses
and (iii) are in compliance with all terms and conditions of any such
permit, license or approval.

     

    Section 4.10.
Title. Except
as set forth in the SEC Documents, the Company has good and marketable title to
its properties and material assets owned by it, free and clear of any pledge,
lien, security interest, encumbrance, claim or equitable interest other than
such as are not material to the business of the Company or do not materially
affect the value of such property, and except for liens for taxes, assessments
and governmental charges or levies not yet due and payable, liens imposed by
applicable law, easements, covenants, and rights of way (unrecorded and
recorded) and other similar restrictions of record that do not materially
adversely affect the current use of the applicable property owned, leased or
held for use by the Company or its subsidiaries, liens in favor of vendors,
carriers, warehousemen, repairmen, mechanics, workmen, materialmen, construction
or similar liens or other encumbrances arising by operation of law, and zoning,
building or other similar restrictions that do not adversely affect the in any
material respect the use of applicable company property.

     

    Section 4.11.
Insurance. The
Company and each of its subsidiaries are insured by insurers of recognized
financial responsibility against such losses and risks and in such amounts as
management of the Company believes to be prudent and customary in the businesses
in which the Company and its subsidiaries are engaged. Neither the Company nor
any such subsidiary has been refused any insurance coverage sought or applied
for and neither the Company nor any such subsidiary has any reason to believe
that it will not be able to renew its existing insurance coverage as and when
such coverage expires or to obtain similar coverage from similar insurers as may
be necessary to continue its business at a cost that would not materially and
adversely affect the condition, financial or otherwise, or the earnings,
business or operations of the Company and its subsidiaries, taken as a
whole.

     

    Section 4.12.
Regulatory
Permits. The Company and its subsidiaries possess all material
certificates, authorizations and permits issued by the appropriate federal,
state or foreign regulatory authorities necessary to conduct their respective
businesses and neither the Company nor any such subsidiary has received any
notice of proceedings relating to the revocation or modification of any such
certificate, authorization or permit.

     

    Section 4.13.
Internal Accounting
Controls. The Company and each of its subsidiaries maintain a system of
internal accounting controls sufficient to provide reasonable assurance that
(i) transactions are executed in accordance with management’s general or
specific authorizations, (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally accepted
accounting principles and the rules and regulations as promulgated by the SEC to
maintain asset accountability, (iii) access to assets is permitted only in
accordance with management’s general or specific authorization and (iv) the
recorded accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.

     

    Section 4.14.
No Material Adverse
Breaches, etc. Except as set forth in the SEC Documents, neither the
Company nor any of its subsidiaries is subject to any charter, corporate or
other legal restriction, or any judgment, decree, order, rule or regulation
which in the judgment of the Company’s officers has or is expected in the future
to have a Material Adverse Effect on the business, properties, operations,
financial condition, results of operations or prospects of the Company or its
subsidiaries. Except as set forth in the SEC Documents, neither the Company nor
any of its subsidiaries is in breach of any contract or agreement which breach,
in the judgment of the Company’s officers, has or is expected to have a Material
Adverse Effect on the business, properties, operations, financial condition,
results of operations or prospects of the Company or its
subsidiaries.


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    Section 4.15.
Absence of
Litigation. Except as set forth in the SEC Documents, there is no action,
suit, proceeding, inquiry or investigation before or by any court, public board,
government agency, self-regulatory organization or body pending against or
affecting the Company, the Common Stock or any of the Company’s subsidiaries,
wherein an unfavorable decision, ruling or finding would (i) have a
Material Adverse Effect on the transactions contemplated hereby (ii) adversely
affect the validity or enforceability of, or the authority or ability of the
Company to perform its obligations under, this Agreement or any of the documents
contemplated herein, or (iii) have a Material Adverse Effect on the business,
operations, properties, financial condition or results of operation of the
Company and its subsidiaries taken as a whole.

     

    Section 4.16.
Subsidiaries.
Except as disclosed in the SEC Documents, the Company does not presently own or
control, directly or indirectly, any interest in any other corporation,
partnership, association or other business entity.

     

    Section 4.17.
Tax Status.
Except as disclosed in the SEC Documents, the Company and each of its
subsidiaries has made or filed all federal and state income and all other tax
returns, reports and declarations required by any jurisdiction to which it is
subject and (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) has paid all material 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 provision
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.

     

    Section 4.18.
Certain
Transactions. Except as set forth in the SEC Documents, none of the
officers, directors, or employees of the Company is presently a party to any
transaction with the Company (other than for services as employees, officers and
directors), 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 corporation,
partnership, trust or other entity in which any officer, director, or any such
employee has a substantial interest or is an officer, director, trustee or
partner.

     

    Section 4.19.
Rights of First
Refusal. The Company is not obligated to offer the securities offered
hereunder on a right of first refusal basis or otherwise to any third parties
including, but not limited to, current or former shareholders of the Company,
underwriters, brokers, agents or other third parties.

     

    Section 4.20.
Dilution. The
Company is aware and acknowledges that issuance of shares of the Company’s
Common Stock could cause dilution to existing shareholders and could
significantly increase the outstanding number of shares of Common
Stock.

     

    Section 4.21.
Acknowledgment
Regarding Investor’s Purchase of Shares. The Company acknowledges and
agrees that the Investor is acting solely in the capacity of an arm’s length
investor with respect to this Agreement and the transactions contemplated
hereunder. The Company further acknowledges that the Investor is not acting as a
financial advisor or fiduciary of the Company (or in any similar capacity) with
respect to this Agreement and the transactions contemplated hereunder and any
advice given by the Investor or any of its representatives or agents in
connection with this Agreement and the transactions contemplated hereunder is
merely incidental to the Investor’s purchase of the Common Stock hereunder. The
Company is aware and acknowledges that it may not be able to request Advances
under this Agreement if it cannot obtain an effective Registration Statement or
if any issuances of Common Stock pursuant to any Advances would violate any
rules of the Principal Market. The Company further is aware and acknowledges
that any fees paid pursuant to Section 12.4 hereunder or shares issued
pursuant to Section 12.4(b) hereunder shall be earned on the date hereof
and not refundable or returnable under any circumstances.

     

    Section 4.22.
No Legal Advice From
the Investor. The Company acknowledges that it had the opportunity to
review this Agreement and the transactions contemplated by this Agreement with
his or its own legal counsel and investment and tax advisors. The Company is
relying solely on such counsel and advisors and not on any statements or
representations of the Investor or any of its representatives or agents for
legal, tax or investment advice with respect to this investment, the
transactions contemplated by this Agreement or the securities laws of any
jurisdiction.  The Company is not relying on any representation except
for the representations of the Investor contained in this
Agreement.


    
      
         


      

      
         


        
          

        

      

      
         


      

    

     

    Section
4.23.  No
Similar Transactions. The Company has not entered into any transaction
similar in nature to the one described in this Agreement.

     

    ARTICLE
V.

    Indemnification

     

    The
Investor and the Company represent to the other the following with respect to
itself:

     

    Section 5.1.
Indemnification.

     

    (a)  In consideration of the
Investor’s execution and delivery of this Agreement, and in addition to all of
the Company’s other obligations under this Agreement, the Company shall defend,
protect, indemnify and hold harmless the Investor, and all of its officers,
directors, partners, employees and agents (including, without limitation, those
retained in connection with the transactions contemplated by this Agreement)
(collectively, the “Investor
Indemnitees”) from and against any and all actions, causes of action,
suits, claims, losses, costs, penalties, fees, liabilities and damages, and
expenses in connection therewith (irrespective of whether any such Investor
Indemnitee is a party to the action for which indemnification hereunder is
sought), and including reasonable attorneys’ fees and disbursements (the “Indemnified
Liabilities”), incurred by the Investor Indemnitees or any of them as a
result of, or arising out of, or relating to (i) any misrepresentation or
breach of any representation or warranty made by the Company in this Agreement
or the Registration Rights Agreement or any other certificate, instrument or
document contemplated hereby or thereby, (ii) any breach of any covenant,
agreement or obligation of the Company contained in this Agreement or the
Registration Rights Agreement or any other certificate, instrument or document
contemplated hereby or thereby, or (iii) any cause of action, suit or claim
brought or made against such Investor Indemnitee not arising out of any action
or inaction of an Investor Indemnitee, and arising out of or resulting from the
execution, delivery, performance or enforcement of this Agreement or any other
instrument, document or agreement executed pursuant hereto by any of the
Investor Indemnitees. To the extent that the foregoing undertaking by the
Company may be unenforceable for any reason, the Company shall make the maximum
contribution to the payment and satisfaction of each of the Indemnified
Liabilities, which is permissible under applicable law.

     

    (b)           In
consideration of the Company’s execution and delivery of this Agreement, and in
addition to all of the Investor’s other obligations under this Agreement, the
Investor shall defend, indemnify and hold harmless the Company and all of its
officers, directors, shareholders, employees and agents (including, without
limitation, those retained in connection with the transactions contemplated by
this Agreement) (collectively, the “Company Indemnitees”)
from and against any and all Indemnified Liabilities incurred by the Company
Indemnitees or any of them as a result of, arising out of, or relating to
(i) any misrepresentation or breach of any representation or warranty made
by the Investor in this Agreement or the Registration Rights Agreement or any
other certificate, instrument or document contemplated hereby or thereby,
(ii) any breach of any covenant, agreement or obligation of the Investor
contained in this Agreement or the Registration Rights Agreement or any other
certificate, instrument or document contemplated hereby or thereby, or (iii) any
cause of action, suit or claim brought or made against such Company Indemnitee
not arising out of any action or inaction of an Company Indemnitee, and arising
out of or resulting from the execution, delivery, performance or enforcement of
this Agreement or any other instrument, document or agreement executed pursuant
hereto by any of the Company Indemnitees provided, however, that the Investor
shall not be liable under this Section 5.1 to a Company Indemnitee to the extent
that such Indemnified Liabilities resulted or arose from the breach by a Company
Indemnitee of any representation, warranty, covenant or agreement of a Company
Indemnitee contained in this Agreement or the Registration Rights Agreement or
the negligence, recklessness, willful misconduct or bad faith of a Company
Indemnitee.  To the extent that the foregoing undertaking by the
Investor may be unenforceable for any reason, the Investor shall make the
maximum contribution to the payment and satisfaction of each of the Indemnified
Liabilities , which is permissible under applicable law.

     

    (c)  The obligations of the
parties to indemnify or make contribution under this Section 5.1 shall
survive termination.


    
      
         


      

      
         


        
          

        

      

      
         


      

    

     

    Section
5.2.  Notification of Claims for
Indemnification. Each party entitled to indemnification under this
Article V (an “Indemnified Party”)
shall, promptly after the receipt of notice of the commencement of any claim
against such Indemnified Party in respect of which indemnity may be sought from
the party obligated to indemnify such Indemnified Party under this Article V
(the “Indemnifying
Party”), notify the Indemnifying Party in writing of the commencement
thereof. Any such notice shall describe the claim in reasonable detail. The
failure of any Indemnified Party to so notify the Indemnifying Party of any such
action shall not relieve the Indemnifying Party from any liability which it may
have to such Indemnified Party (a) other than pursuant to this Article V or
(b) under this Article V unless, and only to the extent that, such failure
results in the Indemnifying Party’s forfeiture of substantive rights or defenses
or the Indemnifying Party is prejudiced by such delay. The procedures listed
below shall govern the procedures for the handling of indemnification
claims.

     

    (a)   Any claim for
indemnification for Indemnified Liabilities that do not result from a Third
Party Claim as defined in the following paragraph, shall be asserted by written
notice given by the Indemnified Party to the Indemnifying Party. Such
Indemnifying Party shall have a period of thirty (30) days after the
receipt of such notice within which to respond thereto. If such Indemnifying
Party does not respond within such thirty (30) day period, such
Indemnifying Party shall be deemed to have refused to accept responsibility to
make payment as set forth in Section 5.1. If such Indemnifying Party does
not respond within such thirty (30) day period or rejects such claim in
whole or in part, the Indemnified Party shall be free to pursue such remedies as
specified in this Agreement.

     

    (b)   If an Indemnified
Party shall receive notice or otherwise learn of the assertion by a person or
entity not a party to this Agreement of any threatened legal action or claim
(collectively a “Third
Party Claim”), with respect to which an Indemnifying Party may be
obligated to provide indemnification, the Indemnified Party shall give such
Indemnifying Party written notice thereof within twenty (20) days after
becoming aware of such Third Party Claim.

     

    (c)   An Indemnifying
Party may elect to defend (and, unless the Indemnifying Party has specified any
reservations or exceptions, to seek to settle or compromise) at such
Indemnifying Party’s own expense and by such Indemnifying Party’s own counsel,
any Third Party Claim. Within thirty (30) days after the receipt of notice
from an Indemnified Party (or sooner if the nature of such Third Party Claim so
requires), the Indemnifying Party shall notify the Indemnified Party whether the
Indemnifying Party will assume responsibility for defending such Third Party
Claim, which election shall specify any reservations or exceptions. If such
Indemnifying Party does not respond within such thirty (30) day period or
rejects such claim in whole or in part, the Indemnified Party shall be free to
pursue such remedies as specified in this Agreement. In case any such Third
Party Claim shall be brought against any Indemnified Party, and it shall notify
the Indemnifying Party of the commencement thereof, the Indemnifying Party shall
be entitled to assume the defense thereof at its own expense, with counsel
satisfactory to such Indemnified Party in its reasonable judgment; provided,
however, that any Indemnified Party may, at its own expense, retain separate
counsel to participate in such defense at its own expense. Notwithstanding the
foregoing, in any Third Party Claim in which both the Indemnifying Party, on the
one hand, and an Indemnified Party, on the other hand, are, or are reasonably
likely to become, a party, such Indemnified Party shall have the right to employ
separate counsel and to control its own defense of such claim if, in the
reasonable opinion of counsel to such Indemnified Party, either (x) one or
more significant defenses are available to the Indemnified Party that are not
available to the Indemnifying Party or (y) a conflict or potential conflict
exists between the Indemnifying Party, on the one hand, and such Indemnified
Party, on the other hand, that would make such separate representation
advisable; provided, however, that in such circumstances the Indemnifying Party
(i) shall not be liable for the fees and expenses of more than one counsel
to all Indemnified Parties and (ii) shall reimburse the Indemnified Parties
for such reasonable fees and expenses of such counsel incurred in any such Third
Party Claim, as such expenses are incurred, provided that the Indemnified
Parties agree to repay such amounts if it is ultimately determined that the
Indemnifying Party was not obligated to provide indemnification under this
Article IX. The Indemnifying Party agrees that it shall not, without the prior
written consent of the Indemnified Party, settle, compromise or consent to the
entry of any judgment in any pending or threatened claim relating to the matters
contemplated hereby (if any Indemnified Party is a party thereto or has been
actually threatened to be made a party thereto) unless such settlement,
compromise or consent includes an unconditional release of such Indemnified
Party from all liability arising or that may arise out of such claim. The
Indemnifying Party shall not be liable for any settlement of any claim effected
against an Indemnified Party without the Indemnifying Party’s written consent,
which consent shall not be unreasonably withheld, conditioned or delayed. The
rights accorded to an Indemnified Party hereunder shall be in addition to any
rights that any Indemnified Party may have at common law, by separate agreement
or otherwise; provided, however, that notwithstanding the foregoing or anything
to the contrary contained in this Agreement, nothing in this Article V shall
restrict or limit any rights that any Indemnified Party may have to seek
equitable relief.


    
      
         


      

      
         


        
          

        

      

      
         


      

    

     

    ARTICLE
VI.

    Covenants
of the Company

     

    Section 6.1.
Registration
Rights. The Company shall cause the Registration Rights Agreement to
remain in full force and effect in accordance with its terms and the Company
shall comply in all material respects with the terms thereof.

     

    Section 6.2.
Quotation of Common
Stock. The Company shall maintain the Common Stock’s listing or
authorization for quotation on a Principal Market.

     

    Section 6.3.
Exchange Act
Registration. The Company will cause its Common Stock to continue to be
registered under Section 12(g) of the Exchange Act, will file in a timely manner
all reports and other documents required of it as a reporting company under the
Exchange Act and will not take any action or file any document (whether or not
permitted by Exchange Act or the rules thereunder) to terminate or suspend such
registration or to terminate or suspend its reporting and filing obligations
under said Exchange Act.

     

    Section 6.4.
Transfer Agent
Instructions. On or prior to the Advance Date, the Company shall deliver
instructions to its transfer agent to issue shares of Common Stock to the
Investor in accordance with the provisions of Section 2.3, if so required by
Section 2.3.

     

    Section 6.5.
Corporate
Existence. The Company will take all steps necessary to preserve and
continue the corporate existence of the Company.

     

    Section 6.6.
Notice of Certain
Events Affecting Registration; Suspension of Right to Make an Advance.
The Company will immediately notify the Investor upon its becoming aware of the
occurrence of any of the following events in respect of a registration statement
or related prospectus relating to an offering of Registrable Securities:
(i) receipt of any request for additional information by the SEC or any
other Federal or state governmental authority during the period of effectiveness
of the Registration Statement for amendments or supplements to the registration
statement or related prospectus; (ii) the issuance by the SEC or any other
Federal or state governmental authority of any stop order suspending the
effectiveness of the Registration Statement or the initiation of any proceedings
for that purpose; (iii) receipt of any notification with respect to the
suspension of the qualification or exemption from qualification of any of the
Registrable Securities for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose; (iv) the happening of any
event that makes any statement made in the Registration Statement or related
prospectus of any document incorporated or deemed to be incorporated therein by
reference untrue in any material respect or that requires the making of any
changes in the Registration Statement, related prospectus or documents so that,
in the case of the Registration Statement, it will not contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not misleading, and
that in the case of the related prospectus, it will not contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; and (v) the
Company’s reasonable determination that a post-effective amendment to the
Registration Statement would be appropriate; and the Company will promptly make
available to the Investor any such supplement or amendment to the related
prospectus. The Company shall not deliver to the Investor any Advance Notice
during the continuation of any of the foregoing events. Consolidation;
Merger. The Company shall not, at any time after the delivery of an
Advance Notice and before the Advance Date applicable to such Advance Notice,
effect any merger or consolidation of the Company with or into, or a transfer of
all or substantially all the assets of the Company to another entity (a “Consolidation Event”)
unless the resulting successor or acquiring entity (if not the Company) assumes
by written instrument the obligation to deliver to the Investor such shares of
stock and/or securities as the Investor is entitled to receive pursuant to this
Agreement.


    
      
         


      

      
         


        
          

        

      

      
         


      

    

     

    Section 6.7. Prohibited
Transactions. Nothing in this Agreement shall be construed to restrict
the right of the Company to offer, sell and/or issue securities of any kind
whatsoever, provided such transaction is not a Prohibited Transaction (as
defined below) (any such transaction that is not a Prohibited Transaction is
referred to in this Agreement as a “Permitted Transaction”). Without limiting
the generality of the preceding sentence, the Company may, without the prior
written consent of the Investor, (i) establish stock option, stock
purchase, stock bonus or other equity incentive or award plans or agreements
(for directors, employees, consultants and/or advisors), and issue securities
thereunder, and amend such plans or agreements, including increasing the number
of shares available thereunder, (ii) issue equity securities to finance, or
otherwise in connection with, the acquisition, license or sale of one or more
other companies, equipment, technologies or lines of business, (iii) issue
shares of Common Stock and/or other securities in connection with the Company’s
option, equity incentive or award plans, stock purchase plans, stock bonus
programs, rights plans, warrants or options, (iv) issue shares of Common
Stock and/or other securities in connection with the acquisition, license or
sale of products, licenses, equipment or other assets and strategic
collaborations, partnerships, joint ventures or similar transactions;
(v) issue shares of Common and/or other securities to employees,
consultants and/or advisors as consideration for services rendered or to be
rendered, (vi) issue and sell equity or debt securities in a public
offering, (vii) issue and sell any equity or debt securities in a private
placement (other than in connection with any Prohibited Transaction),
(viii) issue equity securities to equipment lessors, equipment vendors,
banks or similar lending institutions in connection with leases or loans, or in
connection with strategic commercial or licensing transactions, (ix) issue
securities in connection with any stock split, stock dividend, recapitalization,
reclassification or similar event by the Company and (x) issue shares of
Common Stock to the Investor under any other agreement entered into between the
Investor and the Company.  During the term of this Agreement, the
Company shall not enter into any Prohibited Transaction without the prior
written consent of the Investor, which consent may be withheld at the sole
discretion of the Investor. For the purposes of this Agreement, the term “Prohibited
Transaction” shall refer to the issuance by the Company of any “future
priced securities,” which shall mean the issuance of shares of Common Stock or
securities of any type whatsoever that are, or may become, convertible or
exchangeable into shares of Common Stock where the purchase, conversion or
exchange price for such Common Stock is determined using any floating
discount  or other post-issuance adjustable discount to the market
price of Common Stock, including, without limitation, pursuant to any equity
line financing that is substantially similar to the financing provided for under
this Agreement, provided that any future issuance by the Company of (i) a
convertible security (“Convertible
Security”) that (A) contains provisions that adjust the conversion price
of such Convertible Security in the event of stock splits, dividends,
distributions, reclassifications or similar events or pursuant to anti-dilution
provisions or (B) is issued in connection with the Company obtaining debt
financing for research and development purposes where the issuance of
Convertible Securities is conditioned upon the Company meeting certain defined
clinical milestones, (ii) securities in a registered direct public offering
or an unregistered private placement where the price per share of such
securities is fixed concurrently with the execution of definitive documentation
relating to the offering or placement, as applicable and (iii) securities
issued in connection with a secured debt financing, shall not be a Prohibited
Transaction.

     

    Section 6.8.
Issuance of the
Company’s Common Stock. The sale of the shares of Common Stock shall be
made in accordance with the provisions and requirements of Regulation D or
Section 4(2) of the Securities Act and any applicable state securities
law.

     

    Section 6.9. Market Activities.
The Company will not, directly or indirectly take any action designed to cause
or result in, or that constitutes or might reasonably be expected to constitute,
the stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Common Stock or sell, bid for or purchase
the Common Stock, or pay anyone any compensation for soliciting purchases of the
Common Stock.

     

    ARTICLE
VII.

    Conditions
for Advance and Conditions to Closing

     

    Section 7.1.
Conditions Precedent
to the Obligations of the Company. The obligation hereunder of the
Company to issue and sell the shares of Common Stock to the Investor incident to
each Closing is subject to the satisfaction, or waiver by the Investor in
writing, at or before each such Closing, of each of the conditions set forth
below.

     

    
      
         


      

      
         


        
          

        

      

      
         


      

    

     

    (a)   Accuracy of the Investor’s
Representations and Warranties. The representations and warranties of the
Investor shall be true and correct in all material respects.

     

    (b)  Performance by the
Investor. The Investor shall have performed, satisfied and complied in
all respects with all covenants, agreements and conditions required by this
Agreement and the Registration Rights Agreement to be performed, satisfied or
complied with by the Investor at or prior to such Closing.

     

    Section 7.2.
Conditions Precedent
to the Right of the Company to Deliver an Advance Notice. The right of
the Company to deliver an Advance Notice is subject to the fulfillment by the
Company, on such Advance Notice Date (a “Condition Satisfaction
Date”), of each of the following conditions, any of which may be waived
in writing by the Investor:

     

    (a)  Registration of the Common
Stock with the SEC. The Company shall have filed with the SEC a
Registration Statement with respect to the resale of the Registrable Securities
in accordance with and subject to the terms of the Registration Rights
Agreement. As set forth in the Registration Rights Agreement, the Registration
Statement shall have previously become effective and shall remain effective on
each Condition Satisfaction Date and (i) neither the Company nor the
Investor shall have received notice that the SEC has issued or intends to issue
a stop order with respect to the Registration Statement or that the SEC
otherwise has suspended or withdrawn the effectiveness of the Registration
Statement, either temporarily or permanently, or intends or has threatened to do
so (unless the SEC’s concerns have been addressed and the Investor is reasonably
satisfied that the SEC no longer is considering or intends to take such action),
and (ii) no other suspension of the use or withdrawal of the effectiveness
of the Registration Statement or related prospectus shall exist. The
Registration Statement must have been declared effective by the SEC prior to the
first Advance Notice Date.

     

    (b)  Authority. The
Company shall have obtained all permits and qualifications required by any
applicable state in accordance with the Registration Rights Agreement for the
offer and sale of the shares of Common Stock, or shall have the availability of
exemptions therefrom. The sale and issuance of the shares of Common Stock shall
be legally permitted by all laws and regulations to which the Company is
subject.

     

    (c)  Fundamental Changes.
There shall not exist any fundamental changes to the information set forth in
the Registration Statement which would require the Company to file a
post-effective amendment to the Registration Statement.

     

    (d)  Performance by the
Company. The Company shall have performed, satisfied and complied in all
material respects with all covenants, agreements and conditions required by this
Agreement and the Registration Rights Agreement to be performed, satisfied or
complied with by the Company at or prior to each Condition Satisfaction
Date.

     

    (e)  No Injunction. No
statute, rule, regulation, executive order, decree, ruling or injunction shall
have been enacted, entered, promulgated or endorsed by any court or governmental
authority of competent jurisdiction that prohibits or directly and adversely
affects any of the transactions contemplated by this Agreement, and no
proceeding shall have been commenced that may have the effect of prohibiting or
adversely affecting  any of the transactions contemplated by this
Agreement.

     

    (f)  No Suspension of Trading in
or Delisting of Common Stock. The Common Stock is trading or quoted on a
Principal Market. The trading of the Common Stock is not suspended by the SEC or
the Principal Market. The issuance of shares of Common Stock with respect to the
applicable Closing will not violate the shareholder approval requirements of the
Principal Market.


    
      
         


      

      
         


        
          

        

      

      
         


      

    

     

    (g)  Maximum Advance Amount;
Floor Price. The amount of an Advance corresponding to the Advance Notice
shall not exceed the Maximum Advance Amount. The Floor Price shall be 98% of the
average closing price of the Common Stock for the ten (10) Trading Days prior to
the Advance Notice Date (the “Floor Price”). In
addition to the Floor Price, the Company shall be able to set a hard Floor Price
for each Advance in the Advance Notice (the “Hard Floor
Price”).  Unless otherwise agreed to in writing by Investor and
the Company, for each day during the Pricing Period that the VWAP of the Common
Stock falls below the Floor Price, the Advance amount will be reduced by 40%. By
way of example, if the Advance amount is $500,000, and the VWAP of the Common
Stock falls below the Floor Price during the Pricing Period, then the Advance
amount would be reduced as follows depending on the number of Pricing Period
days that the VWAP of the Common Stock was below the Floor Price:  1
day below reduces the Advance amount to $300,000; 2 days below reduces the
Advance amount to $180,000; 3 days below reduces the Advance Amount to $108,000;
4 days below reduces the Advance Amount to $64,800; and 5 days below reduces the
Advance Amount to $38,880. If trading in the Company’s Common Stock is suspended
for any reason during trading hours on the Principal Market on any Trading Day
during a Pricing Period, the Advance Amount in respect of such Pricing Period
shall be reduced by one fifth of the initial Advance Amount specified in the
Advance Notice. In addition, if on any day during the Pricing Period, the VWAP
of the Common Stock falls below the Hard Floor Price, then, unless otherwise
agreed to by the parties in writing, the corresponding Advance shall be deemed
null and void, and the Investor and the Company shall have no further
obligations with respect to such Advance.  In addition, in no event
shall the number of shares issuable to the Investor pursuant to an Advance cause
the aggregate number of shares of Common Stock beneficially owned by the
Investor and its affiliates to exceed 9.99% of the then outstanding shares of
Common Stock of the Company (“Ownership
Limitation”). If the Floor Price Common Stock is less than twelve cents,
then no Advances shall be permitted. Any portion of an Advance that would cause
the Investor to exceed the Ownership Limitation shall automatically be
withdrawn. For the purposes of this section, beneficial ownership shall be
calculated in accordance with Section 13(d) of the Exchange Act. As required by
the Principal Market, until the Company obtains the requisite approval of its
shareholders in accordance with the corporate laws of the state of Delaware, no
more than 19.9% of the Company’s Common Stock (measured as of the date prior to
the date of this Agreement) may be issued and sold to Investor pursuant to this
Agreement.

     

    (h)  No Knowledge. The
Company has no knowledge of any event which would be more likely than not to
have the effect of causing such Registration Statement to be suspended or
otherwise ineffective at Closing.

     

    (i)  Executed Advance
Notice. The Investor shall have received the Advance Notice executed by
an officer of the Company and the representations contained in such Advance
Notice shall be true and correct as of each Condition Satisfaction
Date.

    


    ARTICLE
VIII.

    Due
Diligence Review; Non-Disclosure of Non-Public Information

     

    Section 8.1.
Non-Disclosure of
Non-Public Information.

     

     (a)  Subject to Section 6.6
and except as otherwise provided in this Agreement or the Registration Rights
Agreement, the Company shall refrain from disclosing, and shall cause its
officers, directors, employees and agents to refrain from disclosing, any
material non-public information to the Investor without also disseminating such
information to the public.

     

    (b) Nothing herein shall require
the Company to disclose material, non-public information to the Investor or its
advisors or representatives, and the Company represents that it does not
disseminate material, non-public information to any investors who purchase stock
in the Company in a public offering, to money managers or to securities analysts
in violation of Regulation FD of the Exchange Act, provided, however, that
notwithstanding anything herein to the contrary, the Company will, as
hereinabove provided and subject to compliance with Regulation FD, immediately
notify the advisors and representatives of the Investor and, if any,
underwriters, of any event or the existence of any circumstance (without any
obligation to disclose the specific event or circumstance) of which it becomes
aware, constituting material, non-public information (whether or not requested
of the Company specifically or generally during the course of due diligence by
such persons or entities), which, if not disclosed in the prospectus included in
the Registration Statement would cause such prospectus to include a material
misstatement or to omit a material fact required to be stated therein in order
to make the statements, therein, in light of the circumstances in which they
were made, not misleading. Nothing contained in this Section 8.1 shall be
construed to mean that such persons or entities other than the Investor (without
the written consent of the Investor prior to disclosure of such information) may
not obtain material, non-public information in the course of conducting due
diligence in accordance with the terms of this Agreement and nothing herein
shall prevent any such persons or entities from notifying the Company of their
opinion that based on such due diligence by such persons or entities, that the
Registration Statement contains an untrue statement of material fact or omits a
material fact required to be stated in the Registration Statement or necessary
to make the statements contained therein, in light of the circumstances in which
they were made, not misleading.


    
      
         


      

      
         


        
          

        

      

      
         


      

    

     

    ARTICLE
IX.

    Choice
of Law/Jurisdiction

     

    Section 9.1.
Governing Law.
This Agreement shall be governed by and interpreted in accordance with the laws
of the State of New York without regard to the principles of conflict of
laws.

     

    Section 9.2.
Arbitration.  Any
dispute arising out of or in connection with this Agreement or otherwise
relating to the parties relationship that cannot be settled by the Company and
the Investor after discussion shall be settled solely by arbitration. Any such
arbitration shall be fully and finally resolved in binding arbitration in a
proceeding in the State of New York, City of New York, in accordance with the
rules of the American Arbitration Association before a single arbitrator who is
a securities lawyer.  The arbitrator shall not have the authority to modify
or change any of the terms of this Agreement.  The arbitrator may award
interim relief and grant specific performance in addition to monetary
damages.  The Company and the Investor further agree that no demand
for punitive or exemplary damages shall be made in any arbitration
proceeding.  Any monetary award shall be in U.S. dollars.  The
arbitrator's award shall be final and binding upon the parties, and judgment
upon the award may be entered in any court of competent jurisdiction in any
state of the United States or country or application may be made to such court
for a judicial acceptance of the award and an enforcement as the law of such
jurisdiction may require or allow.  No party to this agreement will
challenge the jurisdiction or venue provisions as provided in this
section.  No party to this agreement will challenge the jurisdiction
or venue provisions as provided in this section.  

     

    ARTICLE
X.

    Assignment;
Termination

     

    Section 10.1.
Assignment.
Neither this Agreement nor any rights or obligations of the Company or the
Investor hereunder may be assigned to any other Person.

     

    Section 10.2.
Termination.

     

    (a) Unless
earlier terminated as provided hereunder, this Agreement shall terminate
automatically on the earliest of (i) the first day of the month next
following the 24-month anniversary of the Effective Date, or (ii) the date
on which the Investor shall have made payment of Advances pursuant to this
Agreement in the aggregate amount of the Commitment Amount.

     

    (b) The Company may terminate this
Agreement effective upon fifteen Trading Days’ prior written notice to the
Investor; provided that (i) there are no Advances outstanding, and
(ii) the Company has paid all amounts owed to the Investor pursuant to this
Agreement. This Agreement may be terminated at any time by the mutual written
consent of the parties, effective as of the date of such mutual written consent
unless otherwise provided in such written consent. In the event of any
termination of this Agreement by the Company hereunder, so long as the Investor
owns any shares of Common Stock issued hereunder, unless all of such shares of
Common Stock may be resold by the Investor without registration and without any
time, volume or manner of sale limitations pursuant to Rule 144, the Company
shall not (i) cancel the common stock issued to Investor or suspend (except as
provided for in the Registration Rights Agreement) or  withdraw the
Registration Statement or otherwise cause the Registration Statement to become
ineffective, or voluntarily delist the Common Stock from, the Principal Market
without listing the Common Stock on another Principal Market.

     

    (c) The obligation of the Investor
to make an Advance to the Company pursuant to this Agreement shall terminate
permanently (including with respect to an Advance Date that has not yet
occurred) in the event that (i) there shall occur any stop order or
suspension of the effectiveness of the Registration Statement for an aggregate
of fifty (50) Trading Days, during the Commitment Period, or (ii) the
Company shall at any time fail materially to comply with the requirements of
Article VI and such failure is not cured within thirty (30) days after
receipt of written notice from the Investor, provided, however, that this
paragraph (c) shall not apply to any period commencing upon the filing of a
post-effective amendment to such Registration Statement and ending upon the date
on which such post effective amendment is declared effective by the
SEC.


    
      
         


      

      
         


        
          

        

      

      
         


      

    

     

    (d) Nothing in this
Section 10.2 shall be deemed to release the Company or the Investor from
any liability for any breach under this Agreement, or to impair the rights of
the Company and the Investor to compel specific performance by the other party
of its obligations under this Agreement. The indemnification provisions
contained in Sections 5.1 and 5.2 shall survive termination
hereunder.

     

    ARTICLE
XI.

    Notices

     

    Section 11.1.
Notices. Any
notices, consents, waivers, or other communications required or permitted to be
given under the terms of this Agreement must be in writing and will be deemed to
have been delivered (i) upon receipt, when delivered personally;
(ii) three (3) days after being sent by U.S. certified mail, return
receipt requested, (iii) one (1) day after deposit with a nationally
recognized overnight delivery service, in each case properly addressed to the
party to receive the same or (iv) or upon confirmation of receipt of email by
the recipient emailing back the sender that they are in receipt of the email.
The addresses and emails for such communications shall be:

     

    
      
        
          	
                  If
      to the Company, to:

                	
                  Vertro,
      Inc.

                  143
      Varick Street

                  New
      York, New York

                  Attention:  John
      B. Pisaris

                
	 
      	 
      
	
                  With
      a copy to:

                	
                  Porter,
      Wright, Morris & Arthur LLP

                  41
      S. High St., Suite 2800

                  Columbus,
      OH 43215

                  Attn:  William
      J. Kelly, Jr.

                
	 
      	 
      
	
                  If
      to the Investor(s):

                	
                  AGS
      Capital Group, LLC

                
	 
      	
                  2
      Water Street, 17th
      Floor

                
	 
      	
                  New
      York, New York

                
	 
      	
                  Attention:
      Allen Silberstein

                
	 
      	
                  Telephone:
      212-217-9139

                
	 
      	
                  Email:
      asilberstein@agscapitalgroup.com

                


        

      

    

     

    Each
party shall provide five (5) days’ prior written notice to the other party
of any change in address or email.

     

    ARTICLE
XII.

    Miscellaneous

     

    Section 12.1.
Counterparts.
This Agreement may be executed in two or more identical counterparts, all of
which shall be considered one and the same agreement and shall become effective
when counterparts have been signed by each party and delivered to the other
party.

     

    Section 12.2.
Entire Agreement;
Amendments. This Agreement and the Registration Rights Agreement
supersedes all other prior oral or written agreements between the Investor, the
Company, their affiliates and persons acting on their behalf with respect to the
matters discussed herein, and this Agreement, the Registration Rights Agreement
and the instruments referenced herein and therein contain the entire
understanding of the parties with respect to the matters covered herein and
therein and, except as specifically set forth herein or therein, neither the
Company nor the Investor makes any representation, warranty, covenant or
undertaking with respect to such matters. No provision of this Agreement may be
waived or amended other than by an instrument in writing signed by the party to
be charged with enforcement.  The provisions of this agreement shall
be construed in favor of the Investor.


    
      
         


      

      
         


        
          

        

      

      
         


      

    

     

    Section 12.3.
Reporting Entity for
the Common Stock. The reporting entity relied upon for the determination
of the trading price or trading volume of the Common Stock on any given Trading
Day for the purposes of this Agreement shall be Bloomberg, L.P. or any successor
thereto. The written mutual consent of the Investor and the Company shall be
required to employ any other reporting entity.

     

    Section 12.4.
Fees and
Expenses. Each of the parties shall pay its own fees and expenses
(including the fees of any attorneys, accountants, appraisers or others engaged
by such party) in connection with this Agreement and the transactions
contemplated hereby, except that the Company shall pay a Due Diligence Fee of
Fifteen Thousand Dollars ($15,000) to Investor. Company shall transfer to
Investor $80,000 worth of Common Stock (delivered electronically, and credited
to the account of Investor’s designated broker with The Depository Trust Company
through its DWAC system) on or prior to the first business day following the
Effective Date (“Commitment Shares”). The pricing for the Commitment Shares will
be based on the average closing price for the 10 trading days preceding the date
of this Agreement.

     

    Section
12.5. Severability. If any
provision of this Agreement becomes or is declared by a court of competent
jurisdiction to be illegal, unenforceable or void, this Agreement shall continue
in full force and effect without said provision; provided that, if the severance
of such provision materially changes the economic benefits of this Agreement to
either party as such benefits are anticipated as of the date hereof, then such
party may terminate this Agreement on five (5) business days prior written
notice to the other party.

     

    Section 12.6.
Confidentiality. If
for any reason the transactions contemplated by this Agreement are not
consummated, each of the parties hereto shall keep confidential any information
obtained from any other party (except information publicly available or in such
party’s domain prior to the date hereof, and except as required by court order)
and shall promptly return to the other parties all schedules, documents,
instruments, work papers or other written information without retaining copies
thereof, previously furnished by it as a result of this Agreement or in
connection herein.

     

    Section
12.7. Publicity. The
Company and the Investor shall consult with each other in issuing any press
releases or otherwise making public statements with respect to the transactions
contemplated hereby and no party shall issue any such press release or otherwise
make any such public statement without the prior consent of the other party,
which consent shall not be unreasonably withheld or delayed, except that no
prior consent shall be required if such disclosure is required by law, in which
such case the disclosing party shall provide the other party with prior notice
of such public statement. Notwithstanding the foregoing, the Company shall not
publicly disclose the name of the Investor without the prior consent of the
Investor, except to the extent required by law. The Investor acknowledges that
this Agreement and all or part of the Reserve Equity Financing Documents may be
deemed to be "material contracts" as that term is defined by Item 601(b)(10) of
Regulation S-B, and that the Company may therefore be required to file such
documents as exhibits to reports or registration statements filed under the 1933
Act or the 1934 Act.  The Investor further agrees that the status of
such documents and materials as material contracts shall be determined solely by
the Company, in consultation with its counsel.

     

    [REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]


    
      
         


      

      
         


        
          

        

      

      
         


      

    

     

    IN WITNESS WHEREOF, the
parties hereto have caused this Reserve Equity Financing Agreement to be
executed by the undersigned, thereunto duly authorized, as of the date first set
forth above.

     

    
      
        
          
            
              
                	 
      	
                        COMPANY:

                      
	 
      	
                        Vertro,
      Inc.

                      
	 
      	 
      	 
      
	 
      	
                        By:

                      	/s/
      John B. Pisaris
	 
      	 
      	 
      
	 
      	
                        Name:   John
      B. Pisaris

                      
	 
      	 
      
	 
      	
                        Title:   General
      Counsel & Secretary

                      
	 
      	 
      	 
      
	 
      	
                        INVESTOR:

                      
	 
      	
                        AGS
      Capital Group, LLC

                      
	 
      	 
      	 
      
	 
      	
                        By:

                      	/s/
      Allen Silberstein
	 
      	 
      	 
      
	 
      	
                        Name:
      Allen Silberstein

                      
	 
      	 
      
	 
      	
                        Title:
      Chief Executive
Officer

                      


              

            

          

        

      

    


    
      
         


      

      
         


        
          

        

      

      
         


      

    

     

    EXHIBIT
A

     

    ADVANCE
NOTICE

     

    Vertro,
Inc.

     

    The
undersigned, __________hereby certifies, with respect to the sale of shares of
Common Stock of Vertro, Inc.
(the “Company”) issuable in
connection with this Advance Notice, delivered pursuant to the Reserve Equity
Financing Agreement (the “Agreement”), as
follows:

     

    1. The
undersigned is the duly elected Officer of the Company, its Chief Executive,
President or Chief Financial Officer.

     

    2. There
are no fundamental changes to the information set forth in the Registration
Statement which would require the Company to file a post effective amendment to
the Registration Statement.

     

    3. The
Company has performed in all material respects all covenants and agreements to
be performed by the Company and has complied in all material respects with all
obligations and conditions contained in the Agreement on or prior to the Advance
Notice Date, and shall continue to perform in all material respects all
covenants and agreements to be performed by the Company through the applicable
Advance Date. All conditions to the delivery of this Advance Notice are
satisfied as of the date hereof.

     

    4. The
undersigned hereby represents, warrants and covenants that it has made all
filings (“SEC
Filings”) required to be made by it pursuant to applicable securities
laws (including, without limitation, all filings required under the Securities
Exchange Act of 1934, which include Forms 10-Q or, 10-K or, 8-K, etc.). All SEC
Filings and other public disclosures made by the Company, including, without
limitation, all press releases, analysts meetings and calls, etc. (collectively,
the “Public
Disclosures”), have been reviewed and approved for release by the
Company’s attorneys and, if containing financial information, the Company’s
independent certified public accountants. None of the Company’s Public
Disclosures contain, as of their respective dates, any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading.

     

    5. The
Advance requested is  $_________ .

     

    6. The
Hard Floor Price is $________ per share.

     

    The
undersigned has executed this Certificate this  _____  day of
 _____.


     

    
      
        
          
            
              
                
                  
                    
                      	 
      	 
      	 
      	 
      
	 	 	 	 
	 
      	
                              By:  

                            	 
      	 
      
	 	 	 	 	 
	 
      	 
      	
                              Name:  

                            	 
      	 
      
	 	 	 	 	 
	 
      	 
      	
                              Title:  

                            	 
      	 
      


                    

                  

                

              

            

          

        

      

    

     

    If
Returning This Advance Notice via email Please Send To: asilberstein@agscapitalgroup.com

     

    
      
        	
                If
      by Mail, via Federal Express To:

              	
                AGS
      Capital Group, LLC, Attention Allen Silberstein

              
	 
      	
                2
      Water Street, 17th
      Floor, New York, New York,
10004

              


      

    

     

    
      
         


      

      
         


        
          

        

      

      
         


      

    

     

    SCHEDULE
4.3


     

    There are 3,926,305 shares subject to
issuance pursuant to either (i) outstanding awards, or (ii) awards available for
grant under the Company’s 1999 Stock Inventive Plan, 2004 Stock Inventive Plan
or 2006 Stock Award and Incentive Plan.