CERTIFICATE OF
DESIGNATION FOR THE SERIES F CONVERTIBLE PREFERRED STOCK IN THE FORM OF EXHIBIT
A HERETO, THE FILING OF ANY REGISTRATION STATEMENT THAT MAY BE REQUIRED PURSUANT
TO THE REGISTRATION RIGHTS AGREEMENTS, AND THE TRANSACTIONS CONTEMPLATED HEREBY;
(II) THE CERTIFICATE OF INCORPORATION AND BYLAWS OF THE COMPANY, EACH AS
AMENDED, AND COPIES OF THE THIRD PARTY CONSENTS, APPROVALS AND FILINGS REQUIRED
IN CONNECTION WITH THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED BY THE
AGREEMENTS; AND (III) SUCH OTHER DOCUMENTS RELATING TO THE TRANSACTIONS
CONTEMPLATED BY THE AGREEMENTS AS PURCHASERS MAY REASONABLY REQUEST.
6.9.
REGISTRATION RIGHTS AGREEMENT. THE COMPANY AND SUCH PURCHASER SHALL
HAVE EXECUTED, ENTERED INTO AND DELIVERED A REGISTRATION RIGHTS AGREEMENT, IN
SUBSTANTIALLY THE FORM ATTACHED HERETO AS EXHIBIT B.
6.10.
Certificate of Designation. The Company shall have filed with the
North Dakota Secretary of State's Office the Certificate of Designation for the
Series F Convertible Preferred Stock in the form of Exhibit A hereto and
provided evidence of such filing to the Purchasers.
6.11
Financial Documents. Such Purchaser shall have received copies of
the financial statements of the Company through December 31, 2006 and annual
budget of the Company for the fiscal year ending July 31, 2007, each reflecting
no Material Adverse Effect from the Company's financial statements for twelve
months ending October 31, 2006, which were previously provided to each
Purchaser.
6.12
New Debt Financing. The Company shall have secured an amount of new
debt financing which, when combined with the funds received from the Purchasers
for their purchase of securities hereunder, is sufficient to fund the Repurchase
and the expenses incurred or reimbursed by the Company in connection with the
Repurchase and Purchasers' purchase of securities hereunder (the "New Debt
Financing").
6.13
Simultaneous Funding. The other Purchaser shall have funded the
purchase of the Shares to be purchased by such other Purchaser hereunder.
6.14.
TENDER OFFER/SHARE REPURCHASE. THE COMPANY SHALL HAVE PROVIDED
EVIDENCE TO THE REASONABLE SATISFACTION OF PURCHASERS THAT ANY CONDITIONS TO THE
REPURCHASE HAVE BEEN SATISFIED OR IRREVOCABLY WAIVED.
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6.15.
OTHER DOCUMENTS. THE COMPANY SHALL HAVE DELIVERED TO SUCH PURCHASER
SUCH OTHER DOCUMENTS RELATING TO THE TRANSACTIONS CONTEMPLATED BY THE AGREEMENTS
AS PURCHASERS OR THEIR COUNSEL MAY REASONABLY REQUEST.
6.16.
Opinion of Counsel. At the Closing, such Purchaser shall have
received the opinion of Lindquist & Vennum PLLP, dated as of Closing in the form
and substance attached hereto as Exhibit C.
SECTION 7
CONDITIONS TO CLOSING OF THE COMPANY
The Company's obligation to sell and issue the Shares at the Closing is, at the
option of the Company, subject to the fulfillment as of the Closing of the
following conditions:
7.1.
REPRESENTATIONS. THE REPRESENTATIONS AND WARRANTIES MADE BY EACH
PURCHASER HEREIN SHALL BE TRUE AND CORRECT IN ALL MATERIAL RESPECTS ON THE DATES
MADE AND ON THE DATE OF CLOSING.
7.2.
PERFORMANCE BY PURCHASERS. PURCHASERS SHALL HAVE PERFORMED,
SATISFIED AND COMPLIED IN ALL MATERIAL RESPECTS WITH ALL COVENANTS, AGREEMENTS
AND CONDITIONS REQUIRED BY THE AGREEMENTS TO BE PERFORMED, SATISFIED OR COMPLIED