WARRANTS ARE HEREIN
REFERRED TO AS THE "WARRANT PREFERRED SHARES".
ANY SHARES OF COMMON STOCK
ISSUABLE UPON CONVERSION OF THE PREFERRED SHARES AND ISSUABLE UPON THE
CONVERSION OF THE WARRANT PREFERRED SHARES (AND SUCH SHARES WHEN ISSUED) ARE
HEREIN REFERRED TO AS THE "CONVERSION SHARES" AND THE "WARRANT SHARES",
RESPECTIVELY.
THE PREFERRED SHARES, WARRANT PREFERRED SHARES, THE CONVERSION
SHARES AND THE WARRANT SHARES ARE SOMETIMES COLLECTIVELY REFERRED TO AS THE
"SHARES".
SECTION 1.4
PURCHASE PRICE AND CLOSING.
SUBJECT TO THE TERMS AND
CONDITIONS HEREOF, THE COMPANY AGREES TO ISSUE AND SELL TO THE PURCHASERS AND,
IN CONSIDERATION OF AND IN EXPRESS RELIANCE UPON THE REPRESENTATIONS,
WARRANTIES, COVENANTS, TERMS AND CONDITIONS OF THIS AGREEMENT, THE PURCHASERS,
SEVERALLY BUT NOT JOINTLY, AGREE TO PURCHASE THE PREFERRED SHARES AND THE
WARRANTS FOR AN AGGREGATE PURCHASE PRICE OF UP TO $8,000,000 (THE "PURCHASE
PRICE").
THE PREFERRED SHARES AND THE WARRANTS SHALL BE SOLD AND FUNDED IN ONE
OR MORE CLOSINGS (EACH, A "CLOSING").
THE CLOSING OF THE PURCHASE AND SALE OF
THE PREFERRED SHARES AND THE WARRANTS TO BE ACQUIRED BY THE PURCHASERS FROM THE
COMPANY UNDER THIS AGREEMENT SHALL TAKE PLACE AT THE OFFICES OF KRAMER LEVIN
NAFTALIS & FRANKEL LLP, 1177 AVENUE OF THE AMERICAS, NEW YORK, NEW YORK 10036
(THE "CLOSING") AT 10:00 A.M., NEW YORK TIME ON SUCH DATE AS THE PURCHASERS AND
THE COMPANY MAY AGREE UPON; PROVIDED, THAT ALL OF THE CONDITIONS SET FORTH IN
ARTICLE IV HEREOF AND APPLICABLE TO THE CLOSING SHALL HAVE BEEN FULFILLED OR
WAIVED IN ACCORDANCE HEREWITH (THE "CLOSING DATE").
SUBJECT TO THE TERMS AND
CONDITIONS OF THIS AGREEMENT, AT THE CLOSING THE COMPANY SHALL DELIVER OR CAUSE
TO BE DELIVERED TO EACH PURCHASER (X) A CERTIFICATE FOR THE NUMBER OF PREFERRED
SHARES SET FORTH OPPOSITE THE NAME OF SUCH PURCHASER ON EXHIBIT A HERETO AND (Y)
ITS WARRANTS TO PURCHASE SUCH NUMBER OF PREFERRED SHARES AS IS SET FORTH
OPPOSITE THE NAME OF SUCH PURCHASE ON EXHIBIT A ATTACHED HERETO AND (Z) ANY
OTHER DOCUMENTS REQUIRED TO BE DELIVERED PURSUANT TO ARTICLE IV HEREOF.
AT THE
CLOSING, EACH PURCHASER SHALL DELIVER ITS PURCHASE PRICE BY WIRE TRANSFER TO THE
COMPANY.
ARTICLE II
Representations and Warranties
SECTION 2.1
REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
THE
COMPANY HEREBY REPRESENTS AND WARRANTS TO THE PURCHASERS, AS OF THE DATE HEREOF
AND THE CLOSING DATE (EXCEPT AS SET FORTH ON THE SCHEDULE OF EXCEPTIONS ATTACHED
HERETO WITH EACH NUMBERED SCHEDULE CORRESPONDING TO THE SECTION NUMBER HEREIN),
AS FOLLOWS:
(A)
ORGANIZATION, GOOD STANDING AND POWER.
THE COMPANY IS A
CORPORATION DULY INCORPORATED, VALIDLY EXISTING AND IN GOOD STANDING UNDER THE
LAWS OF THE STATE OF NEVADA AND HAS THE REQUISITE CORPORATE POWER TO OWN, LEASE
AND OPERATE ITS PROPERTIES AND ASSETS AND TO CONDUCT ITS BUSINESS AS IT IS NOW
BEING CONDUCTED.
THE COMPANY DOES NOT HAVE ANY SUBSIDIARIES EXCEPT AS SET FORTH
IN THE COMPANY'S FORM 10-KSB FOR THE YEAR ENDED DECEMBER 31, 2006, INCLUDING THE
ACCOMPANYING FINANCIAL STATEMENTS (THE "FORM 10-KSB"), OR IN THE COMPANY'S