AGREEMENTS ENTERED INTO BY THE PARTIES HERETO IN CONNECTION
WITH THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT (COLLECTIVELY, THE
"TRANSACTION DOCUMENTS") AND TO ISSUE THE SECURITIES IN ACCORDANCE WITH THE
TERMS HEREOF AND THEREOF. THE EXECUTION AND DELIVERY OF THE TRANSACTION
DOCUMENTS BY THE COMPANY AND THE CONSUMMATION BY THE COMPANY OF THE TRANSACTIONS
CONTEMPLATED HEREBY AND THEREBY, INCLUDING, WITHOUT LIMITATION, THE ISSUANCE OF
THE PREFERRED SHARES, THE RESERVATION FOR ISSUANCE AND THE ISSUANCE OF THE
CONVERSION SHARES ISSUABLE UPON CONVERSION OF THE PREFERRED SHARES, THE ISSUANCE
OF THE WARRANTS AND THE RESERVATION FOR ISSUANCE AND ISSUANCE OF THE WARRANT
SHARES ISSUABLE UPON EXERCISE OF THE WARRANTS, HAVE BEEN DULY AUTHORIZED BY THE
COMPANY'S BOARD OF DIRECTORS AND (OTHER THAN THE FILING WITH THE SEC OF ONE OR
MORE REGISTRATION STATEMENTS IN ACCORDANCE WITH THE REQUIREMENTS OF THE
REGISTRATION RIGHTS AGREEMENT AND ANY OTHER FILINGS AS MAY BE REQUIRED BY ANY
STATE SECURITIES AGENCIES) NO FURTHER FILING, CONSENT, OR AUTHORIZATION IS
REQUIRED BY THE COMPANY, ITS BOARD OF DIRECTORS OR ITS STOCKHOLDERS. THIS
AGREEMENT AND THE OTHER TRANSACTION DOCUMENTS OF EVEN DATE HEREWITH HAVE BEEN
DULY EXECUTED AND DELIVERED BY THE COMPANY, AND CONSTITUTE THE LEGAL, VALID AND
BINDING OBLIGATIONS OF THE COMPANY, ENFORCEABLE AGAINST THE COMPANY IN
ACCORDANCE WITH THEIR RESPECTIVE TERMS, EXCEPT AS SUCH ENFORCEABILITY MAY BE
LIMITED BY GENERAL PRINCIPLES OF EQUITY OR APPLICABLE BANKRUPTCY, INSOLVENCY,
REORGANIZATION, MORATORIUM, LIQUIDATION OR SIMILAR LAWS RELATING TO, OR
AFFECTING GENERALLY, THE ENFORCEMENT OF APPLICABLE CREDITORS' RIGHTS AND
REMEDIES AND EXCEPT AS RIGHTS TO INDEMNIFICATION AND TO CONTRIBUTION MAY BE
LIMITED BY FEDERAL OR STATE SECURITIES LAW. THE CERTIFICATE OF DESIGNATIONS IN
THE FORM ATTACHED
6
HERETO AS EXHIBIT A SHALL BE FILED WITH THE SECRETARY OF STATE OF THE STATE OF
NEVADA ON OR PRIOR TO CLOSING.
(C)
ISSUANCE OF SECURITIES. THE ISSUANCE OF THE
PREFERRED SHARES AND THE WARRANTS ARE DULY AUTHORIZED AND UPON ISSUANCE IN
ACCORDANCE WITH THE TERMS OF THE TRANSACTION DOCUMENTS SHALL BE FREE FROM ALL
TAXES, LIENS AND CHARGES WITH RESPECT TO THE ISSUE THEREOF, AND THE PREFERRED
SHARES SHALL BE ENTITLED TO THE RIGHTS AND PREFERENCES SET FORTH IN THE
CERTIFICATE OF DESIGNATIONS. AS OF THE CLOSING, THE COMPANY SHALL HAVE RESERVED
FROM ITS DULY AUTHORIZED CAPITAL STOCK NOT LESS THAN THE SUM OF (I) THE MAXIMUM
NUMBER OF SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION OF THE PREFERRED
SHARES (WITHOUT TAKING INTO ACCOUNT ANY LIMITATIONS ON THE CONVERSION OF THE
PREFERRED SHARES SET FORTH IN THE CERTIFICATE OF DESIGNATIONS) AND (II) THE
MAXIMUM NUMBER OF SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF THE WARRANTS
(ASSUMING FOR PURPOSES HEREOF THAT THE EXERCISE PRICE (AS DEFINED IN THE
WARRANTS) IS EQUAL TO $2.00, SUBJECT TO ADJUSTMENT FOR STOCK DIVIDENDS AND STOCK
SPLITS AND WITHOUT TAKING INTO ACCOUNT ANY LIMITATIONS ON THE EXERCISE OF THE
WARRANTS SET FORTH IN THE WARRANTS). UPON ISSUANCE OR CONVERSION IN ACCORDANCE
WITH THE CERTIFICATE OF DESIGNATIONS OR EXERCISE IN ACCORDANCE WITH THE
WARRANTS, AS THE CASE MAY BE, THE