EACH PURCHASER SEVERALLY AND NOT JOINTLY WITH ANY OTHER
PURCHASER UNDERSTANDS AND ACKNOWLEDGES, AND AGREES, TO ACT IN A MANNER THAT WILL
NOT VIOLATE THE POSITIONS OF THE COMMISSION AS SET FORTH IN ITEM 65, SECTION A,
OF THE MANUAL OF PUBLICLY AVAILABLE TELEPHONE INTERPRETATIONS, DATED JULY 1997,
COMPILED BY THE OFFICE OF CHIEF COUNSEL, DIVISION OF CORPORATION FINANCE.
NOTWITHSTANDING THE FOREGOING, NO PURCHASER MAKES ANY REPRESENTATION, WARRANTY
OR COVENANT HEREBY THAT IT WILL NOT ENGAGE IN SHORT SALES IN THE SECURITIES OF
THE COMPANY AFTER THE TIME THAT THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT
ARE FIRST PUBLICLY ANNOUNCED AS DESCRIBED IN SECTION 4.6.
NOTWITHSTANDING THE
FOREGOING, IN THE CASE OF A PURCHASER THAT IS A MULTI-MANAGED INVESTMENT VEHICLE
WHEREBY SEPARATE PORTFOLIO MANAGERS MANAGE SEPARATE PORTIONS OF SUCH PURCHASER'S
ASSETS AND THE PORTFOLIO MANAGERS HAVE NO DIRECT KNOWLEDGE OF THE INVESTMENT
DECISIONS MADE BY THE PORTFOLIO MANAGERS MANAGING OTHER PORTIONS OF SUCH
PURCHASER'S ASSETS, THE COVENANT SET FORTH ABOVE SHALL ONLY APPLY WITH RESPECT
TO THE PORTION OF ASSETS MANAGED BY THE PORTFOLIO MANAGER THAT MADE THE
INVESTMENT DECISION TO PURCHASE THE SECURITIES COVERED BY THIS AGREEMENT.
4.16
FORM D; BLUE SKY FILINGS. THE COMPANY AGREES TO TIMELY FILE A FORM
D WITH RESPECT TO THE SECURITIES AS REQUIRED UNDER REGULATION D AND TO PROVIDE A
COPY THEREOF, PROMPTLY UPON REQUEST OF ANY PURCHASER. THE COMPANY SHALL TAKE
SUCH ACTION AS THE COMPANY SHALL REASONABLY DETERMINE IS NECESSARY IN ORDER TO
OBTAIN AN EXEMPTION FOR, OR TO QUALIFY THE SECURITIES FOR, SALE TO THE
PURCHASERS AT THE CLOSING UNDER APPLICABLE SECURITIES OR "BLUE SKY" LAWS OF THE
STATES OF THE UNITED STATES, AND SHALL PROVIDE EVIDENCE OF SUCH ACTIONS PROMPTLY
UPON REQUEST OF ANY PURCHASER.
4.17
CAPITAL CHANGES. UNTIL SUCH TIME THAT THE DEBENTURES ARE NO LONGER
OUTSTANDING, THE COMPANY SHALL NOT UNDERTAKE A REVERSE OR FORWARD STOCK SPLIT OR
RECLASSIFICATION OF THE COMMON STOCK WITHOUT THE PRIOR WRITTEN CONSENT OF THE
PURCHASERS HOLDING 75% OF THE PRINCIPAL AMOUNT OUTSTANDING OF THE DEBENTURES.
4.18
SHAREHOLDER APPROVAL. THE COMPANY SHALL USE ITS BEST EFFORTS TO
EFFECT THE SHAREHOLDER APPROVAL AS SOON AS PRACTICABLE FOLLOWING THE CLOSING
DATE. IT SHALL BE AN "EVENT OF DEFAULT" (AS DEFINED IN THE DEBENTURES) IN THE
EVENT THAT ANY OF THE FOLLOWING ITEMS DO NOT OCCUR ON OR BEFORE JANUARY 5,
2008:
(I) THE SHAREHOLDER APPROVAL DOES NOT OCCUR FOR ANY REASON; (II) THE
COMPANY HAS NOT DELIVERED EACH PURCHASER EVIDENCE OF THE FILING OF THE AMENDMENT
WITH THE SECRETARY OF STATE OF THE STATE OF NEVADA AND THE ACCEPTANCE OF THE
AMENDMENT BY THE SECRETARY OF STATE OF THE STATE OF NEVADA; OR (III) THE COMPANY
FAILS TO CAUSE ITS COUNSEL TO ISSUE EACH PURCHASER A LEGAL OPINION REGARDING THE
CAPITALIZATION OF THE COMPANY, INCLUDING THE DUE RESERVATION OF ALL SHARES OF
COMMON STOCK ISSUED AND ISSUABLE UNDER THE TRANSACTION DOCUMENTS, WHICH OPINION
SHALL BE IN FORM AND SUBSTANCE REASONABLY SATISFACTORY THE PURCHASERS.
4.19
SECURED OBLIGATION. AS AN INDUCEMENT FOR THE PURCHASERS TO PURCHASE
THE