OF THE
COMPANY'S COMMON STOCK, (II) SHARES ISSUABLE IN PAYMENT OF INTEREST ON THE
DEBENTURES; (III) SHARES ISSUABLE AS LIQUIDATED DAMAGES PURSUANT TO THE INVESTOR
REGISTRATION RIGHTS AGREEMENT; AND (IV) ISSUANCE OF THE WARRANT SHARES (THE
"TOTAL TRANSACTION SHARES").
UNTIL THE COMPANY OBTAINS SUCH SHAREHOLDER
APPROVAL, THE MAXIMUM NUMBER OF SHARES THAT THE COMPANY CAN ISSUE UPON EXERCISE
OF THE WARRANT, CONVERSION OF PRINCIPAL AND INTEREST ON THE DEBENTURE, AND IN
PAYMENT OF LIQUIDATED DAMAGES WILL NOT EXCEED 2,526,617 SHARES (BEING 19.99% OF
THE SHARES CURRENTLY OUTSTANDING).
5.
TRANSFER AGENT INSTRUCTIONS.
(A)
THE COMPANY SHALL ISSUE THE IRREVOCABLE TRANSFER AGENT
INSTRUCTIONS IN THE FORM ATTACHED HERETO.
6.
CONDITIONS TO THE COMPANY'S OBLIGATION TO SELL.
The obligation of the Company hereunder to issue and sell the Convertible
Debentures to the Buyer(s) at the Closings is subject to the satisfaction, at or
before the Closing Dates, of each of the following conditions, provided that
these conditions are for the Company's sole benefit and may be waived by the
Company at any time in its sole discretion:
(A)
EACH BUYER SHALL HAVE EXECUTED THE TRANSACTION DOCUMENTS AND
DELIVERED THEM TO THE COMPANY.
(B)
THE BUYER(S) SHALL HAVE DELIVERED TO THE COMPANY THE PURCHASE
PRICE FOR THE CONVERTIBLE DEBENTURES AND WARRANTS IN THE RESPECTIVE AMOUNTS AS
SET FORTH NEXT TO EACH BUYER AS SET FORTH ON SCHEDULE I ATTACHED HERETO, MINUS
ANY FEES TO BE PAID DIRECTLY FROM THE PROCEEDS THE CLOSINGS AS SET FORTH HEREIN,
BY WIRE TRANSFER OF IMMEDIATELY AVAILABLE U.S. FUNDS PURSUANT TO THE WIRE
INSTRUCTIONS PROVIDED BY THE COMPANY.
(C)
THE REPRESENTATIONS AND WARRANTIES OF THE BUYER(S) SHALL BE TRUE
AND CORRECT IN ALL MATERIAL RESPECTS AS OF THE DATE WHEN MADE AND AS OF THE
CLOSING DATES AS THOUGH MADE AT THAT TIME (EXCEPT FOR REPRESENTATIONS AND
WARRANTIES THAT SPEAK AS OF A SPECIFIC DATE), AND THE BUYER(S) SHALL HAVE
PERFORMED, SATISFIED AND COMPLIED IN ALL MATERIAL RESPECTS WITH THE COVENANTS,
AGREEMENTS AND CONDITIONS REQUIRED BY THIS AGREEMENT TO BE PERFORMED, SATISFIED
OR COMPLIED WITH BY THE BUYER(S) AT OR PRIOR TO THE CLOSING DATES.
17
7.
CONDITIONS TO THE BUYER'S OBLIGATION TO PURCHASE.
(A)
THE OBLIGATION OF THE BUYER(S) HEREUNDER TO PURCHASE THE
CONVERTIBLE DEBENTURES AT THE CLOSING IS SUBJECT TO THE SATISFACTION, AT OR
BEFORE THE FIRST CLOSING DATE, OF EACH OF THE FOLLOWING CONDITIONS:
(I)
THE COMPANY SHALL HAVE EXECUTED THE TRANSACTION DOCUMENTS AND
DELIVERED THE SAME TO THE BUYERS.
(II)
THE COMMON STOCK SHALL BE AUTHORIZED FOR QUOTATION OR TRADING ON
ONE OF THE DESIGNATED PRIMARY MARKETS, TRADING IN THE COMMON STOCK SHALL NOT
HAVE BEEN SUSPENDED FOR ANY REASON, AND ALL THE CONVERSION SHARES ISSUABLE UPON
THE CONVERSION OF THE CONVERTIBLE DEBENTURES SHALL BE APPROVED FOR LISTING OR
TRADING ON THE PRIMARY MARKET.
(III)
THE REPRESENTATIONS AND WARRANTIES OF THE COMPANY SHALL BE TRUE
AND CORRECT IN ALL MATERIAL RESPECTS (EXCEPT TO THE EXTENT THAT ANY OF SUCH
REPRESENTATIONS AND WARRANTIES IS ALREADY QUALIFIED AS TO MATERIALITY IN SECTION
3 ABOVE, IN WHICH