DEFINED BELOW) OR WITH ANY INDIVIDUAL RELATED BY BLOOD,
MARRIAGE, OR ADOPTION TO ANY SUCH INDIVIDUAL OR WITH ANY ENTITY IN WHICH ANY
SUCH ENTITY OR INDIVIDUAL OWNS A FIVE PERCENT (5%) OR MORE BENEFICIAL INTEREST
(EACH A "RELATED PARTY"), EXCEPT FOR (A) CUSTOMARY EMPLOYMENT ARRANGEMENTS AND
BENEFIT PROGRAMS ON REASONABLE TERMS, (B) ANY INVESTMENT IN AN AFFILIATE OF THE
COMPANY,
(C) ANY AGREEMENT, TRANSACTION, COMMITMENT, OR ARRANGEMENT ON AN
ARMS-LENGTH BASIS ON TERMS NO LESS FAVORABLE THAN TERMS WHICH WOULD HAVE BEEN
OBTAINABLE FROM A PERSON OTHER THAN SUCH RELATED PARTY, (D) ANY AGREEMENT,
TRANSACTION, COMMITMENT, OR ARRANGEMENT WHICH IS APPROVED BY A MAJORITY OF THE
DISINTERESTED DIRECTORS OF THE COMPANY; FOR PURPOSES HEREOF, ANY DIRECTOR WHO IS
ALSO AN OFFICER OF THE COMPANY OR ANY SUBSIDIARY OF THE COMPANY SHALL NOT BE A
DISINTERESTED DIRECTOR WITH RESPECT TO ANY SUCH AGREEMENT, TRANSACTION,
COMMITMENT, OR ARRANGEMENT.
"AFFILIATE" FOR PURPOSES HEREOF MEANS,
WITH RESPECT TO ANY PERSON OR ENTITY, ANOTHER PERSON OR ENTITY THAT, DIRECTLY OR
INDIRECTLY, (I) HAS A TEN PERCENT (10%) OR MORE EQUITY INTEREST IN THAT PERSON
OR ENTITY, (II) HAS TEN PERCENT (10%) OR MORE COMMON OWNERSHIP WITH THAT PERSON
OR ENTITY, (III) CONTROLS THAT PERSON OR ENTITY, OR (IV) SHARES COMMON CONTROL
WITH THAT PERSON OR ENTITY.
"CONTROL" OR "CONTROLS" FOR PURPOSES HEREOF MEANS
THAT A PERSON OR ENTITY HAS THE POWER, DIRECT OR INDIRECT, TO CONDUCT OR GOVERN
THE POLICIES OF ANOTHER PERSON OR ENTITY.
(J)
TRANSFER AGENT.
THE COMPANY COVENANTS AND AGREES THAT, IN THE
EVENT THAT THE COMPANY'S AGENCY RELATIONSHIP WITH THE TRANSFER AGENT SHOULD BE
TERMINATED FOR ANY REASON PRIOR TO A DATE WHICH IS TWO (2) YEARS AFTER THE
CLOSING DATE, THE COMPANY SHALL IMMEDIATELY APPOINT A NEW TRANSFER AGENT AND
SHALL REQUIRE THAT THE NEW TRANSFER AGENT EXECUTE AND AGREE TO BE BOUND BY THE
TERMS OF THE IRREVOCABLE TRANSFER AGENT INSTRUCTIONS (AS DEFINED HEREIN).
(K)
RESTRICTION ON ISSUANCE OF THE CAPITAL STOCK. SO LONG AS ANY NOTES
ARE OUTSTANDING, THE COMPANY SHALL NOT, WITHOUT THE PRIOR WRITTEN CONSENT OF THE
BUYER(S) AND EXCEPT FOR EXCLUDED SECURITIES, (I) ISSUE OR SELL SHARES OF COMMON
STOCK OR PREFERRED STOCK WITHOUT CONSIDERATION OR FOR A CONSIDERATION PER SHARE
LESS THAN THE BID PRICE OF THE COMMON STOCK DETERMINED IMMEDIATELY PRIOR TO ITS
ISSUANCE, (II) ISSUE ANY PREFERRED STOCK, WARRANT, OPTION, RIGHT, CONTRACT,
CALL, OR OTHER SECURITY OR INSTRUMENT GRANTING THE HOLDER THEREOF THE RIGHT TO
ACQUIRE COMMON STOCK WITHOUT CONSIDERATION OR FOR A CONSIDERATION LESS THAN SUCH
COMMON STOCK'S BID PRICE DETERMINED IMMEDIATELY PRIOR TO IT'S ISSUANCE,
(III) ENTER INTO ANY SECURITY INSTRUMENT GRANTING THE HOLDER A SECURITY INTEREST
IN ANY AND ALL ASSETS OF THE COMPANY, OR (IV) FILE ANY REGISTRATION STATEMENT ON
FORM S-8.
FOR THE PURPOSES OF THIS SECTION, "EXCLUDED SECURITIES" MEANS SHARES
OF COMMON STOCK ISSUED OR DEEMED TO BE ISSUED BY THE COMPANY UPON THE EXERCISE
OF ANY OPTION OR WARRANT, OR THE CONVERSION OF ANY CONVERTIBLE SECURITY, ISSUED
OR DEEMED TO HAVE BEEN ISSUED