AND WARRANTS IN THE RESPECTIVE AMOUNTS SET FORTH OPPOSITE
EACH BUYER'S NAME ON SCHEDULE I ATTACHED HERETO.
(V)
THE BUYERS SHALL HAVE RECEIVED AN OPINION OF COUNSEL FROM COUNSEL
TO THE COMPANY IN A FORM SATISFACTORY TO THE BUYERS.
(VI)
THE COMPANY SHALL HAVE PROVIDED TO THE BUYERS A TRUE COPY OF A
CERTIFICATE OF GOOD STANDING EVIDENCING THE FORMATION AND GOOD STANDING OF THE
COMPANY FROM THE SECRETARY OF STATE (OR COMPARABLE OFFICE) FROM THE JURISDICTION
IN WHICH THE COMPANY IS INCORPORATED, AS OF A DATE WITHIN 10 DAYS OF THE FIRST
CLOSING DATE.
(VII)
THE COMPANY SHALL HAVE DELIVERED TO THE BUYERS A CERTIFICATE,
EXECUTED BY THE SECRETARY OF THE COMPANY AND DATED AS OF THE FIRST CLOSING DATE,
AS TO (I) THE RESOLUTIONS CONSISTENT WITH SECTION 3(C) AS ADOPTED BY THE
COMPANY'S BOARD OF DIRECTORS IN A FORM REASONABLY ACCEPTABLE TO SUCH BUYER, (II)
THE CERTIFICATE OF INCORPORATION AND (III) THE BYLAWS, EACH AS IN EFFECT AT THE
FIRST CLOSING.
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(VIII)
THE COMPANY SHALL HAVE PROVIDED TO THE BUYER AN ACKNOWLEDGEMENT,
TO THE SATISFACTION OF THE BUYER, FROM THE COMPANY'S INDEPENDENT CERTIFIED
PUBLIC ACCOUNTANTS.
(IX)
A FORM UCC-1, ANY APPROPRIATE FILINGS TO BE MADE WITH THE PATENT
AND TRADEMARK OFFICE, OR SUCH OTHER FORMS AS MAY BE REQUIRED TO PERFECT THE
BUYER'S INTEREST IN THE PLEDGED PROPERTY AS DETAILED IN THE SECURITY AGREEMENT
AND THE PATENT SECURITY AGREEMENT SHALL HAVE BEEN FILED.
(X)
THE COMPANY SHALL HAVE CREATED THE INITIAL SHARE RESERVE.
(XI)
THE IRREVOCABLE TRANSFER AGENT INSTRUCTIONS, IN FORM AND
SUBSTANCE SATISFACTORY TO THE BUYER, SHALL HAVE BEEN DELIVERED TO AND
ACKNOWLEDGED IN WRITING BY THE COMPANY'S TRANSFER AGENT.
(XII)
THE COMPANY SHALL HAVE ENTERED INTO DEFINITIVE DOCUMENTS WITH
RESPECT TO THE STANFORD CLOSING FOR AN ADDITIONAL INVESTMENT OF $5,000,000
SUBJECT TO THE CONDITIONS THEREIN AND IN THE EVENT THE STANFORD CLOSING OCCURS,
THE BUYER AND STANFORD SHALL HAVE ENTERED INTO AN INTERCREDITOR AGREEMENT IN A
FORM SATISFACTORY TO THE BUYER.
(B)
THE OBLIGATION OF THE BUYER(S) HEREUNDER TO ACCEPT THE CONVERTIBLE
DEBENTURES AT THE SECOND CLOSING IS SUBJECT TO THE SATISFACTION, AT OR BEFORE
THE SECOND CLOSING DATE, OF EACH OF THE FOLLOWING CONDITIONS:
(I)
THE COMMON STOCK SHALL BE AUTHORIZED FOR QUOTATION OR TRADING ON
THE PRIMARY MARKET, TRADING IN THE COMMON STOCK SHALL NOT HAVE BEEN SUSPENDED
FOR ANY REASON, AND ALL THE CONVERSION SHARES ISSUABLE UPON THE CONVERSION OF
THE CONVERTIBLE DEBENTURES SHALL BE APPROVED FOR LISTING OR TRADING ON THE
PRIMARY MARKET.
(II)
THE REPRESENTATIONS AND WARRANTIES OF THE COMPANY SHALL BE TRUE
AND CORRECT IN ALL MATERIAL RESPECTS (EXCEPT TO THE EXTENT THAT ANY OF SUCH
REPRESENTATIONS AND WARRANTIES IS ALREADY QUALIFIED AS TO MATERIALITY IN SECTION
3 ABOVE, IN WHICH CASE, SUCH REPRESENTATIONS AND WARRANTIES SHALL BE TRUE AND
CORRECT WITHOUT FURTHER QUALIFICATION) AS OF THE DATE WHEN MADE AND AS OF THE
SECOND CLOSING DATE AS THOUGH MADE AT THAT TIME (EXCEPT FOR REPRESENTATIONS AND
WARRANTIES THAT SPEAK AS OF A SPECIFIC DATE) AND THE COMPANY