EFFECTIVE AS SOON THEREAFTER AS POSSIBLE, BUT NO LATER THAN
DECEMBER 31, 2006.
(N) AMENDMENT OF REGISTRATION STATEMENT. WITHIN THIRTY (30) CALENDAR DAYS OF
OBTAINING SHAREHOLDER APPROVAL OUTLINED IN SECTION (N) ABOVE AND INCREASING ITS
AUTHORIZED SHARES OF COMMON STOCK AS OUTLINED IN SECTION (M) ABOVE THE COMPANY
BUT IN NO EVENT LATER THAN NOVEMBER 30, 2006
FILE AN AMENDED REGISTRATION
STATEMENT TO INCREASE THE NUMBER OF SHARES REGISTERED TO THE TOTAL TRANSACTION
SHARES. THE COMPANY SHALL USE ITS BEST EFFORTS TO HAVE SUCH AMENDED REGISTRATION
STATEMENT DECLARED EFFECTIVE WITHIN FORTY FIVE (45)
CALENDAR DAYS OF ITS FILING
BUT IN NO EVENT LATER THAN JANUARY 15, 2007.
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 CONVERTIBLE DEBENTURES IN RESPECTIVE AMOUNTS AS SET FORTH NEXT TO EACH
BUYER AS OUTLINED ON SCHEDULE I ATTACHED HERETO, MINUS ANY FEES TO BE PAID
DIRECTLY FROM THE PROCEEDS OF THE CLOSINGS AS SET FORTH HEREIN, BY WIRE TRANSFER
OF IMMEDIATELY AVAILABLE U.S. FUNDS PURSUANT TO THE WIRE INSTRUCTIONS PROVIDED
BY THE COMPANY.
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.
7.
CONDITIONS TO THE BUYER'S OBLIGATION TO PURCHASE.
(A)
THE OBLIGATION OF THE BUYER(S) HEREUNDER TO PURCHASE THE
CONVERTIBLE DEBENTURES AT THE FIRST CLOSING IS SUBJECT TO THE SATISFACTION, AT
OR BEFORE THE FIRST CLOSING DATE, OF EACH OF THE FOLLOWING CONDITIONS:
16
(I)
THE COMPANY SHALL HAVE EXECUTED THE TRANSACTION DOCUMENTS AND
DELIVERED THE SAME TO THE BUYER(S).
(II)
THE COMMON STOCK SHALL BE AUTHORIZED FOR QUOTATION ON THE NASDAQ
CAPITAL MARKETS, TRADING IN THE COMMON STOCK SHALL NOT HAVE BEEN SUSPENDED FOR
ANY REASON, THE COMPANY SHALL HAVE MADE ALL FILINGS NECESSARY FOR THE CONVERSION
SHARES WITH THE NASDAQ CAPITAL MARKETS, SUBJECT TO THE UNDERSTANDING THAT, UNTIL
THE COMPANY OBTAINS SHAREHOLDER APPROVAL AS CONTEMPLATED IN SECTION 4(M), THE
COMPANY HAS INSUFFICIENT AUTHORIZED SHARES.
(III)
THE REPRESENTATIONS AND WARRANTIES OF THE COMPANY SHALL BE TRUE
AND CORRECT