COMPANY UNDERSTANDS THAT A DELAY IN THE DELIVERY OF THE NOTE
SHARES IN THE FORM REQUIRED PURSUANT TO SECTION 9 HEREOF BEYOND THE DELIVERY
DATE COULD RESULT IN ECONOMIC LOSS TO THE PURCHASER.
IN THE EVENT THAT THE
COMPANY FAILS TO DIRECT ITS TRANSFER AGENT TO DELIVER THE NOTE SHARES TO THE
PURCHASER VIA THE DWAC SYSTEM WITHIN THE TIME FRAME SET FORTH IN
SECTION 9.1(B) ABOVE AND THE NOTE SHARES ARE NOT DELIVERED TO THE PURCHASER BY
THE DELIVERY DATE, AS COMPENSATION TO THE PURCHASER FOR SUCH LOSS, THE COMPANY
AGREES TO PAY LATE PAYMENTS TO THE PURCHASER FOR LATE ISSUANCE OF THE NOTE
27
SHARES IN THE FORM REQUIRED PURSUANT TO SECTION 9 HEREOF UPON CONVERSION OF THE
NOTE IN THE AMOUNT EQUAL TO: $250 PER BUSINESS DAY AFTER THE DELIVERY DATE.
THE
COMPANY SHALL PAY ANY PAYMENTS INCURRED UNDER THIS SECTION IN IMMEDIATELY
AVAILABLE FUNDS UPON DEMAND.
10.
REGISTRATION RIGHTS.
10.1
REGISTRATION RIGHTS GRANTED.
THE COMPANY HEREBY GRANTS
REGISTRATION RIGHTS TO THE PURCHASER PURSUANT TO THE REGISTRATION RIGHTS
AGREEMENT.
10.2
OFFERING RESTRICTIONS.
EXCEPT AS PREVIOUSLY DISCLOSED IN THE SEC
REPORTS, OR STOCK OR STOCK OPTIONS GRANTED TO EMPLOYEES OR DIRECTORS OF THE
COMPANY (THESE EXCEPTIONS HEREINAFTER REFERRED TO AS THE "EXCEPTED ISSUANCES"),
NEITHER THE COMPANY NOR ANY OF ITS SUBSIDIARIES WILL, PRIOR TO THE FULL
REPAYMENT OR CONVERSION OF THE NOTE (TOGETHER WITH ALL ACCRUED AND UNPAID
INTEREST AND FEES RELATED THERETO), (X) ENTER INTO ANY EQUITY LINE OF CREDIT
AGREEMENT OR SIMILAR AGREEMENT OR (Y) ISSUE, OR ENTER INTO ANY AGREEMENT TO
ISSUE, ANY SECURITIES WITH A VARIABLE/FLOATING CONVERSION AND/OR PRICING FEATURE
WHICH ARE OR COULD BE (BY CONVERSION OR REGISTRATION) FREE-TRADING SECURITIES
(I.E.
COMMON STOCK SUBJECT TO A REGISTRATION STATEMENT).
11.
MISCELLANEOUS.
11.1
GOVERNING LAW, JURISDICTION AND WAIVER OF JURY TRIAL.
(A)
THIS AGREEMENT AND THE OTHER RELATED AGREEMENTS SHALL BE GOVERNED
BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH STATE, WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAWS.
(B)
THE COMPANY HEREBY CONSENTS AND AGREES THAT THE STATE OR FEDERAL
COURTS LOCATED IN THE COUNTY OF NEW YORK, STATE OF NEW YORK SHALL HAVE EXCLUSIVE
JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN THE COMPANY,
ON THE ONE HAND, AND THE PURCHASER, ON THE OTHER HAND, PERTAINING TO THIS
AGREEMENT OR ANY OF THE RELATED AGREEMENTS OR TO ANY MATTER ARISING OUT OF OR
RELATED TO THIS AGREEMENT OR ANY OF THE OTHER RELATED AGREEMENTS; PROVIDED, THAT
THE PURCHASER AND THE COMPANY ACKNOWLEDGE THAT ANY APPEALS FROM THOSE COURTS
MAY HAVE TO BE HEARD BY A COURT LOCATED OUTSIDE OF THE COUNTY OF NEW YORK, STATE
OF NEW YORK; AND FURTHER PROVIDED, THAT NOTHING IN THIS AGREEMENT SHALL BE
DEEMED OR OPERATE TO PRECLUDE THE PURCHASER FROM BRINGING SUIT OR TAKING OTHER
LEGAL ACTION IN ANY OTHER JURISDICTION TO COLLECT THE OBLIGATIONS, TO REALIZE ON
THE COLLATERAL (AS DEFINED IN THE MASTER SECURITY AGREEMENT) OR