TURBONETICS ENERGY, INC., A
NEW YORK CORPORATION ("TURBONETICS") WHOLLY-OWNED BY THE COMPANY THAT CURRENTLY
DOES NOT CONDUCT BUSINESS.
THE COMPANY ALSO OWNS A FORTY-SEVEN AND ONE-HALF
PERCENT (47.5%) EQUITY INTEREST IN MEOH POWER, INC., A DELAWARE CORPORATION
("MEOH POWER").
(B)
AUTHORIZATION; ENFORCEMENT; VALIDITY. THE COMPANY HAS THE
REQUISITE CORPORATE POWER AND AUTHORITY TO ENTER INTO AND PERFORM ITS
OBLIGATIONS UNDER THIS AGREEMENT, THE REGISTRATION RIGHTS AGREEMENT AND EACH OF
THE OTHER AGREEMENTS AND OTHER INSTRUMENTS TO BE ENTERED INTO BY ANY OF THE
PARTIES HERETO IN CONNECTION WITH ANY OF THE TRANSACTIONS CONTEMPLATED BY THIS
AGREEMENT (COLLECTIVELY, THE "TRANSACTION DOCUMENTS") AND TO ISSUE THE COMMON
SHARES IN ACCORDANCE WITH THE TERMS HEREOF AND THEREOF. THE EXECUTION AND
DELIVERY OF THE TRANSACTION DOCUMENTS BY THE COMPANY, THE PERFORMANCE OF ITS
OBLIGATIONS THEREUNDER AND THE CONSUMMATION BY THE COMPANY OF THE TRANSACTIONS
CONTEMPLATED HEREBY AND THEREBY, INCLUDING, WITHOUT LIMITATION, THE ISSUANCE OF
THE COMMON SHARES, HAVE BEEN DULY AUTHORIZED BY THE COMPANY'S BOARD OF DIRECTORS
(THE "BOARD") AND (OTHER THAN (I) THE FILING WITH THE SEC OF ONE OR MORE
REGISTRATION STATEMENTS (AS DEFINED IN THE REGISTRATION RIGHTS AGREEMENT) IN
ACCORDANCE WITH THE REQUIREMENTS OF THE REGISTRATION RIGHTS AGREEMENT, (II) THE
FILING OF A NOTICE OF EXEMPT OFFERING OF SECURITIES ON FORM D WITH THE SEC UNDER
REGULATION D PROMULGATED UNDER THE 1933 ACT, (III) THE FILING OF AN INTERIM
OTCQB CERTIFICATION WITH THE OTC MARKETS AND (IV) OTHER FILINGS AS MAY BE
REQUIRED BY STATE SECURITIES AGENCIES) NO FURTHER FILING, CONSENT, OR
AUTHORIZATION IS REQUIRED BY THE COMPANY OR ITS BOARD.
THIS AGREEMENT AND THE
OTHER TRANSACTION DOCUMENTS HAVE BEEN DULY EXECUTED AND DELIVERED BY THE
COMPANY, AND CONSTITUTE THE LEGAL, VALID AND BINDING OBLIGATIONS OF THE COMPANY,
ENFORCEABLE AGAINST THE COMPANY IN ACCORDANCE WITH THEIR RESPECTIVE TERMS,
EXCEPT AS SUCH ENFORCEABILITY MAY BE LIMITED BY GENERAL PRINCIPLES OF EQUITY,
APPLICABLE BANKRUPTCY, INSOLVENCY, REORGANIZATION, MORATORIUM, LIQUIDATION OR
SIMILAR LAWS RELATING TO, OR AFFECTING GENERALLY, THE ENFORCEMENT OF APPLICABLE
CREDITORS' RIGHTS AND REMEDIES, OR LIMITS ON INDEMNIFICATION UNDER APPLICABLE
FEDERAL SECURITIES LAWS.
7
(C)
ISSUANCE OF COMMON SHARES. THE ISSUANCE OF THE COMMON SHARES
IS DULY AUTHORIZED AND, UPON ISSUANCE IN ACCORDANCE WITH THE TERMS HEREOF, SHALL
BE VALIDLY ISSUED AND FREE FROM ALL PREEMPTIVE OR SIMILAR RIGHTS AND TAXES,
LIENS AND CHARGES WITH RESPECT TO THE ISSUE THEREOF AND THE COMMON SHARES SHALL
BE FULLY PAID AND NONASSESSABLE WITH THE HOLDERS BEING ENTITLED TO ALL RIGHTS
ACCORDED TO A HOLDER OF COMMON STOCK. AS OF IMMEDIATELY PRIOR TO THE CLOSING,
THERE ARE 69,751,518 SHARES OF COMMON STOCK THAT ARE AUTHORIZED AND UNISSUED.
ASSUMING THE ACCURACY OF EACH OF THE REPRESENTATIONS AND WARRANTIES OF THE BUYER
SET FORTH IN SECTION 2, THE OFFER AND ISSUANCE BY THE COMPANY OF THE COMMON
SHARES TO THE BUYER PURSUANT TO AND IN ACCORDANCE WITH THE TERMS OF THIS
AGREEMENT ARE AND WILL BE EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE 1933
ACT.
(D)
NO CONFLICTS.
EXCEPT AS SET FORTH IN SCHEDULE 3(D), THE
EXECUTION,