Document:

mit8kasher020911ex1022.htm - Generated by SEC Publisher for SEC Filing

 

SECURITIES PURCHASE AGREEMENT

This SECURITIES PURCHASE AGREEMENT (the “Agreement”), dated as of January 26, 2011, by and between MICRO IMAGING TECHNOLOGY, INC., a California corporation, with headquarters located at 970 Calle Amanecer - Suite F, San Clemente, CA 92673 (the “Company”), and ASHER ENTERPRISES, INC., a Delaware corporation, with its address at 1 Linden Place, Suite 207, Great Neck, NY 11021 (the “Buyer”).

 

WHEREAS:

 

A.                The Company and the Buyer is executing and delivering this Agreement in reliance upon the exemption from securities registration afforded by the rules and regulations as promulgated by the United States Securities and Exchange Commission (the “SEC”) under the Securities Act of 1933, as amended (the “1933 Act”);
  
 B.                 Buyer desires to purchase and the Company desires to issue and sell, upon the terms and conditions set forth in this Agreement an 8% convertible note of the Company, in the form attached hereto as Exhibit A, in the aggregate principal amount of $32,500.00 (together with any note(s) issued in replacement thereof or as a dividend thereon or otherwise with respect thereto in accordance with the terms thereof, the “Note”), convertible into shares of common stock, $0.01 par value per share, of the Company (the “Common Stock”), upon the terms and subject to the limitations and conditions set forth in such Note.

 

C.                 The Buyer wishes to purchase, upon the terms and conditions stated in this Agreement, such principal amount of Note as is set forth immediately below its name on the signature pages hereto; and

 

NOW THEREFORE, the Company and the Buyer severally (and not jointly) hereby agree as follows:

 

1.                  Purchase and Sale of Note.

 

a.                   Purchase of Note.  On the Closing Date (as defined below), the Company shall issue and sell to the Buyer and the Buyer agrees to purchase from the Company such principal amount of Note as is set forth immediately below the Buyer’s name on the signature pages hereto.

 

b.                  Form of Payment.  On the Closing Date (as defined below), (i) the Buyer shall pay the purchase price for the Note to be issued and sold to it at the Closing (as defined below) (the “Purchase Price”) by wire transfer of immediately available funds to the Company, in accordance with the Company’s written wiring instructions, against delivery of the Note in the principal amount equal to the Purchase Price as is set forth immediately below the Buyer’s name on the signature pages hereto, and (ii) the Company shall deliver such duly executed Note on behalf of the Company, to the Buyer, against delivery of such Purchase Price. 

 

 

 

 c.                   Closing Date.  Subject to the satisfaction (or written waiver) of the conditions thereto set forth in Section 6 and Section 7 below, the date and time of the issuance and sale of the Note pursuant to this Agreement (the “Closing Date”) shall be 12:00 noon, Eastern Standard Time on January 28, 2011, or such other mutually agreed upon time.  The closing of the transactions contemplated by this Agreement (the “Closing”) shall occur on the Closing Date at such location as may be agreed to by the parties.

 

2.                  Buyer’s Representations and Warranties.  The Buyer represents and warrants to the Company that:

 

a.                   Investment Purpose.  As of the date hereof, the Buyer is purchasing the Note and the shares of Common Stock issuable upon conversion of or otherwise pursuant to the Note (including, without limitation, such additional shares of Common Stock, if any, as are issuable (i) on account of interest on the Note, (ii) as a result of the events described in Sections 1.3 and 1.4(g) of the Note or (iii) in payment of the Standard Liquidated Damages Amount (as defined in Section 2(f) below) pursuant to this Agreement, such shares of Common Stock being collectively referred to herein as the “Conversion Shares” and, collectively with the Note, the “Securities”) for its own account and not with a present view towards the public sale or distribution thereof, except pursuant to sales registered or exempted from registration under the 1933 Act; provided, however, that by making the representations herein, the Buyer does not agree to hold any of the Securities for any minimum or other specific term and reserves the right to dispose of the Securities at any time in accordance with or pursuant to a registration statement or an exemption under the 1933 Act.

 

b.                  Accredited Investor Status.  The Buyer is an “accredited investor” as that term is defined in Rule 501(a) of Regulation D (an “Accredited Investor”).

 

c.                   Reliance on Exemptions.  The Buyer understands that the Securities are being offered and sold to it in reliance upon specific exemptions from the registration requirements of United States federal and state securities laws and that the Company is relying upon the truth and accuracy of, and the Buyer’s compliance with, the representations, warranties, agreements, acknowledgments and understandings of the Buyer set forth herein in order to determine the availability of such exemptions and the eligibility of the Buyer to acquire the Securities.

 

d.                  Information.  The Buyer and its advisors, if any, have been, and for so long as the Note remain outstanding will continue to be, furnished with all materials relating to the business, finances and operations of the Company and materials relating to the offer and sale of the Securities which have been requested by the Buyer or its advisors.  The Buyer and its advisors, if any, have been, and for so long as the Note remain outstanding will continue to be, afforded the opportunity to ask questions of the Company.  Notwithstanding the foregoing, the Company has not disclosed to the Buyer any material nonpublic information and will not disclose such information unless such information is disclosed to the public prior to or promptly following such disclosure to the Buyer.  Neither such inquiries nor any other due diligence investigation conducted by Buyer or any of its advisors or representatives shall modify, amend or affect Buyer’s right to rely on the Company’s representations and warranties contained in 

 

 

                                                                                                       2

 

 Section 3 below.  The Buyer understands that its investment in the Securities involves a significant degree of risk. The Buyer is not aware of any facts that may constitute a breach of any of the Company's representations and warranties made herein.

 

e.                   Governmental Review.  The Buyer understands that no United States federal or state agency or any other government or governmental agency has passed upon or made any recommendation or endorsement of the Securities.

 

f.                   Transfer or Re-sale.  The Buyer understands that (i) the sale or re-sale of the Securities has not been and is not being registered under the 1933 Act or any applicable state securities laws, and the Securities may not be transferred unless (a) the Securities are sold pursuant to an effective registration statement under the 1933 Act, (b) the Buyer shall have delivered to the Company, at the cost of the Buyer, an opinion of counsel that shall be in form, substance and scope customary for opinions of counsel in comparable transactions to the effect that the Securities to be sold or transferred may be sold or transferred pursuant to an exemption from such registration, which opinion shall be accepted by the Company, (c) the Securities are sold or transferred to an “affiliate” (as defined in Rule 144 promulgated under the 1933 Act (or a successor rule) (“Rule 144”)) of the Buyer who agrees to sell or otherwise transfer the Securities only in accordance with this Section 2(f) and who is an Accredited Investor, (d) the Securities are sold pursuant to Rule 144, or (e) the Securities are sold pursuant to Regulation S under the 1933 Act (or a successor rule) (“Regulation S”), and the Buyer shall have delivered to the Company, at the cost of the Buyer, an opinion of counsel that shall be in form, substance and scope customary for opinions of counsel in corporate transactions, which opinion shall be accepted by the Company; (ii) any sale of such Securities made in reliance on Rule 144 may be made only in accordance with the terms of said Rule and further, if said Rule is not applicable, any re-sale of such Securities under circumstances in which the seller (or the person through whom the sale is made) may be deemed to be an underwriter (as that term is defined in the 1933 Act) may require compliance with some other exemption under the 1933 Act or the rules and regulations of the SEC thereunder; and (iii) neither the Company nor any other person is under any obligation to register such Securities under the 1933 Act or any state securities laws or to comply with the terms and conditions of any exemption thereunder (in each case).  Notwithstanding the foregoing or anything else contained herein to the contrary, the Securities may be pledged as collateral in connection with a bona fide margin account or other lending arrangement.  In the event that the Company does not accept the opinion of counsel provided by the Buyer with respect to the transfer of Securities pursuant to an exemption from registration, such as Rule 144 or Regulation S, within three (3) business days of delivery of the opinion to the Company, the Company shall pay to the Buyer liquidated damages of five percent (5%) of the outstanding amount of the Note per day plus accrued and unpaid interest on the Note, prorated for partial months, in cash or shares at the option of the Buyer (“Standard Liquidated Damages Amount”).  If the Buyer elects to be pay the Standard Liquidated Damages Amount in shares of Common Stock, such shares shall be issued at the Conversion Price (as defined in the Note) at the time of payment.

 

g.                  Legends.  The Buyer understands that the Note and, until such time as the Conversion Shares have been registered under the 1933 Act may be sold pursuant to Rule 144 or Regulation S without any restriction as to the number of securities as of a particular date 

 

 

                                                                                                       3

 

that can then be immediately sold, the Conversion Shares may bear a restrictive legend in substantially the following form (and a stop-transfer order may be placed against transfer of the certificates for such Securities):

 

“NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS.  THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT.  NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.”

 

The legend set forth above shall be removed and the Company shall issue a certificate without such legend to the holder of any Security upon which it is stamped, if, unless otherwise required by applicable state securities laws, (a) such Security is registered for sale under an effective registration statement filed under the 1933 Act or otherwise may be sold pursuant to Rule 144 or Regulation S without any restriction as to the number of securities as of a particular date that can then be immediately sold, or (b) such holder provides the Company with an opinion of counsel, in form, substance and scope customary for opinions of counsel in comparable transactions, to the effect that a public sale or transfer of such Security may be made without registration under the 1933 Act, which opinion shall be accepted by the Company so that the sale or transfer is effected or (c) such holder provides the Company with reasonable assurances that such Security can be sold pursuant to Rule 144 or Regulation S.  The Buyer agrees to sell all Securities, including those represented by a certificate(s) from which the legend has been removed, in compliance with applicable prospectus delivery requirements, if any.

 

h.                  Authorization; Enforcement. This Agreement has been duly and validly authorized.  This Agreement has been duly executed and delivered on behalf of the Buyer, and this Agreement constitutes a valid and binding agreement of the Buyer enforceable in accordance with its terms.
 i.                    Residency.  The Buyer is a resident of the jurisdiction set forth immediately below the Buyer’s name on the signature pages hereto. 

 

3.                  Representations and Warranties of the Company.  The Company represents and warrants to the Buyer that:

 

 

 

                                                                                                       4

 

 

a.                   Organization and Qualification.  The Company and each of its Subsidiaries (as defined below), if any, is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction in which it is incorporated, with full power and authority (corporate and other) to own, lease, use and operate its properties and to carry on its business as and where now owned, leased, used, operated and conducted.  Schedule 3(a) sets forth a list of all of the Subsidiaries of the Company and the jurisdiction in which each is incorporated.  The Company and each of its Subsidiaries is duly qualified as a foreign corporation to do business and is in good standing in every jurisdiction in which its ownership or use of property or the nature of the business conducted by it makes such qualification necessary except where the failure to be so qualified or in good standing would not have a Material Adverse Effect.  “Material Adverse Effect” means any material adverse effect on the business, operations, assets, financial condition or prospects of the Company or its Subsidiaries, if any, taken as a whole, or on the transactions contemplated hereby or by the agreements or instruments to be entered into in connection herewith.  “Subsidiaries” means any corporation or other organization, whether incorporated or unincorporated, in which the Company owns, directly or indirectly, any equity or other ownership interest.

 

b.                  Authorization; Enforcement.  (i) The Company has all requisite corporate power and authority to enter into and perform this Agreement, the Note and to consummate the transactions contemplated hereby and thereby and to issue the Securities, in accordance with the terms hereof and thereof, (ii) the execution and delivery of this Agreement, the Note by the Company and the consummation by it of the transactions contemplated hereby and thereby (including without limitation, the issuance of the Note and the issuance and reservation for issuance of the Conversion Shares issuable upon conversion or exercise thereof) have been duly authorized by the Company’s Board of Directors and no further consent or authorization of the Company, its Board of Directors, or its shareholders is required, (iii) this Agreement has been duly executed and delivered by the Company by its authorized representative, and such authorized representative is the true and official representative with authority to sign this Agreement and the other documents executed in connection herewith and bind the Company accordingly, and (iv) this Agreement constitutes, and upon execution and delivery by the Company of the Note, each of such instruments will constitute, a legal, valid and binding obligation of the Company enforceable against the Company in accordance with its terms.
 c.                   Capitalization.  As of the date hereof, the authorized capital stock of the Company consists of: (i) 500,000,000 shares of Common Stock, $0.01 par value per share, of which 161,754,187 shares are issued and outstanding; and (ii) 2,600,000 shares of Preferred Stock, $0.01 par value per share, of which 2,600,000 shares are issued and outstanding; no shares are reserved for issuance pursuant to the Company’s stock option plans, no shares are reserved for issuance pursuant to securities (other than the Note and three (3) prior convertible promissory notes in favor of the Buyer (a) convertible promissory note in favor of the Buyer  dated August 16, 2010 in the amount of $50,000.00 for which 20,155,872 shares of Common Stock are presently reserved;  (b) convertible promissory note in favor of the Buyer dated October 5, 2010 in the amount of $37,500.00 for which 17,076,502 shares of Common Stock are presently reserved and (c) prior convertible promissory note in favor of the Buyer dated November 19, 2010 in the amount of $35,000.00 for which 31,410,793 shares of Common Stock are presently reserved) exercisable for, or convertible into or exchangeable for shares of Common Stock and 

 

 

                                                                                                       5

 

 

42,042,123 shares are reserved for issuance upon conversion of the Note (subject to adjustment pursuant to the Company’s covenant set forth in Section 4(g) below).  All of such outstanding shares of capital stock are, or upon issuance will be, duly authorized, validly issued, fully paid and non-assessable.  No shares of capital stock of the Company are subject to preemptive rights or any other similar rights of the shareholders of the Company or any liens or encumbrances imposed through the actions or failure to act of the Company.  Except as disclosed in Schedule 3(c), as of the effective date of this Agreement, (i) there are no outstanding options, warrants, scrip, rights to subscribe for, puts, calls, rights of first refusal, agreements, understandings, claims or other commitments or rights of any character whatsoever relating to, or securities or rights convertible into or exchangeable for any shares of capital stock of the Company or any of its Subsidiaries, or arrangements by which the Company or any of its Subsidiaries is or may become bound to issue additional shares of capital stock of the Company or any of its Subsidiaries, (ii) there are no agreements or arrangements under which the Company or any of its Subsidiaries is obligated to register the sale of any of its or their securities under the 1933 Act and (iii) there are no anti-dilution or price adjustment provisions contained in any security issued by the Company (or in any agreement providing rights to security holders) that will be triggered by the issuance of the Note or the Conversion Shares.  The Company has furnished to the Buyer true and correct copies of the Company’s Certificate of Incorporation as in effect on the date hereof (“Certificate of Incorporation”), the Company’s By-laws, as in effect on the date hereof (the “By-laws”), and the terms of all securities convertible into or exercisable for Common Stock of the Company and the material rights of the holders thereof in respect thereto.  The Company shall provide the Buyer with a written update of this representation signed by the Company’s Chief Executive on behalf of the Company as of the Closing Date.

 

d.                  Issuance of Shares.  The Conversion Shares are duly authorized and reserved for issuance and, upon conversion of the Note in accordance with its respective terms, will be validly issued, fully paid and non-assessable, and free from all taxes, liens, claims and encumbrances with respect to the issue thereof and shall not be subject to preemptive rights or other similar rights of shareholders of the Company and will not impose personal liability upon the holder thereof.

 

e.                   Acknowledgment of Dilution.  The Company understands and acknowledges the potentially dilutive effect to the Common Stock upon the issuance of the Conversion Shares upon conversion of the Note.  The Company further acknowledges that its obligation to issue Conversion Shares upon conversion of the Note in accordance with this Agreement, the Note is absolute and unconditional regardless of the dilutive effect that such issuance may have on the ownership interests of other shareholders of the Company.

 

f.                   No Conflicts.  The execution, delivery and performance of this Agreement, the Note by the Company and the consummation by the Company of the transactions contemplated hereby and thereby (including, without limitation, the issuance and reservation for issuance of the Conversion Shares) will not (i) conflict with or result in a violation of any provision of the Certificate of Incorporation or By-laws or (ii) violate or conflict with, or result in a breach of any provision of, or constitute a default (or an event which with notice or lapse of time or both could become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture, patent, patent license or 

 

 

                                                                                                       6

 

 

instrument to which the Company or any of its Subsidiaries is a party, or (iii)  result in a violation of any law, rule, regulation, order, judgment or decree (including federal and state securities laws and regulations and regulations of any self-regulatory organizations to which the Company or its securities are subject) applicable to the Company or any of its Subsidiaries or by which any property or asset of the Company or any of its Subsidiaries is bound or affected (except for such conflicts, defaults, terminations, amendments, accelerations, cancellations and violations as would not, individually or in the aggregate, have a Material Adverse Effect).  Neither the Company nor any of its Subsidiaries is in violation of its Certificate of Incorporation, By-laws or other organizational documents and neither the Company nor any of its Subsidiaries is in default (and no event has occurred which with notice or lapse of time or both could put the Company or any of its Subsidiaries in default) under, and neither the Company nor any of its Subsidiaries has taken any action or failed to take any action that would give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument to which the Company or any of its Subsidiaries is a party or by which any property or assets of the Company or any of its Subsidiaries is bound or affected, except for possible defaults as would not, individually or in the aggregate, have a Material Adverse Effect. The businesses of the Company and its Subsidiaries, if any, are not being conducted, and shall not be conducted so long as a Buyer owns any of the Securities, in violation of any law, ordinance or regulation of any governmental entity.  Except as specifically contemplated by this Agreement and as required under the 1933 Act and any applicable state securities laws, the Company is not required to obtain any consent, authorization or order of, or make any filing or registration with, any court, governmental agency, regulatory agency, self regulatory organization or stock market or any third party in order for it to execute, deliver or perform any of its obligations under this Agreement, the Note in accordance with the terms hereof or thereof or to issue and sell the Note in accordance with the terms hereof and to issue the Conversion Shares upon conversion of the Note.  All consents, authorizations, orders, filings and registrations which the Company is required to obtain pursuant to the preceding sentence have been obtained or effected on or prior to the date hereof.  The Company is not in violation of the listing requirements of the Over-the-Counter Bulletin Board (the “OTCBB”) and does not reasonably anticipate that the Common Stock will be delisted by the OTCBB in the foreseeable future.  The Company and its Subsidiaries are unaware of any facts or circumstances which might give rise to any of the foregoing.  

 

g.                  SEC Documents; Financial Statements.  The Company has timely filed all reports, schedules, forms, statements and other documents required to be filed by it with the SEC pursuant to the reporting requirements of the Securities Exchange Act of 1934, as amended (the “1934 Act”) (all of the foregoing filed prior to the date hereof and all exhibits included therein and financial statements and schedules thereto and documents (other than exhibits to such documents) incorporated by reference therein, being hereinafter referred to herein as the “SEC Documents”).  The Company has delivered to the Buyer true and complete copies of the SEC Documents, except for such exhibits and incorporated documents.  As of their respective dates, the SEC Documents complied in all material respects with the requirements of the 1934 Act and the rules and regulations of the SEC promulgated thereunder applicable to the SEC Documents, and none of the SEC Documents, at the time they were filed with the SEC, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances 

 

 

                                                                                                       7

 

 

under which they were made, not misleading.  None of the statements made in any such SEC Documents is, or has been, required to be amended or updated under applicable law (except for such statements as have been amended or updated in subsequent filings prior the date hereof).  As of their respective dates, the financial statements of the Company included in the SEC Documents complied as to form in all material respects with applicable accounting requirements and the published rules and regulations of the SEC with respect thereto.  Such financial statements have been prepared in accordance with United States generally accepted accounting principles, consistently applied, during the periods involved  and fairly present in all material respects the consolidated financial position of the Company and its consolidated Subsidiaries as of the dates thereof and the consolidated results of their operations and cash flows for the periods then ended (subject, in the case of unaudited statements, to normal year-end audit adjustments).  Except as set forth in the financial statements of the Company included in the SEC Documents, the Company has no liabilities, contingent or otherwise, other than (i) liabilities incurred in the ordinary course of business subsequent to July 31, 2010, and (ii) obligations under contracts and commitments incurred in the ordinary course of business and not required under generally accepted accounting principles to be reflected in such financial statements, which, individually or in the aggregate, are not material to the financial condition or operating results of the Company. The Company is subject to the reporting requirements of the 1934 Act.

 

h.                  Absence of Certain Changes.  Since July 31, 2010, there has been no material adverse change and no material adverse development in the assets, liabilities, business, properties, operations, financial condition, results of operations, prospects or 1934 Act reporting status of the Company or any of its Subsidiaries.

 

i.                    Absence of Litigation.  There is no action, suit, claim, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the Company or any of its Subsidiaries, threatened against or affecting the Company or any of its Subsidiaries, or their officers or directors in their capacity as such, that could have a Material Adverse Effect.  Schedule 3(i) contains a complete list and summary description of any pending or, to the knowledge of the Company, threatened proceeding against or affecting the Company or any of its Subsidiaries, without regard to whether it would have a Material Adverse Effect.  The Company and its Subsidiaries are unaware of any facts or circumstances which might give rise to any of the foregoing.

 

j.                    Patents, Copyrights, etc.  The Company and each of its Subsidiaries owns or possesses the requisite licenses or rights to use all patents, patent applications, patent rights, inventions, know-how, trade secrets, trademarks, trademark applications, service marks, service names, trade names and copyrights (“Intellectual Property”) necessary to enable it to conduct its business as now operated (and, as presently contemplated to be operated in the future); there is no claim or action by any person pertaining to, or proceeding pending, or to the Company’s knowledge threatened, which challenges the right of the Company or of a Subsidiary with respect to any Intellectual Property necessary to enable it to conduct its business as now operated (and, as presently contemplated to be operated in the future); to the best of the Company’s knowledge, the Company’s or its Subsidiaries’ current and intended products, services and processes do not infringe on any Intellectual Property or other rights held 

 

 

                                                                                                       8

 

 

by any person; and the Company is unaware of any facts or circumstances which might give rise to any of the foregoing.  The Company and each of its Subsidiaries have taken reasonable security measures to protect the secrecy, confidentiality and value of their Intellectual Property.

 

k.                  No Materially Adverse Contracts, Etc.  Neither the Company nor any of its Subsidiaries is subject to any charter, corporate or other legal restriction, or any judgment, decree, order, rule or regulation which in the judgment of the Company’s officers has or is expected in the future to have a Material Adverse Effect.  Neither the Company nor any of its Subsidiaries is a party to any contract or agreement which in the judgment of the Company’s officers has or is expected to have a Material Adverse Effect.

 

l.                    Tax Status.  The Company and each of its Subsidiaries has made or filed all federal, state and foreign income and all other tax returns, reports and declarations required by any jurisdiction to which it is subject (unless and only to the extent that the Company and each of its Subsidiaries has set aside on its books provisions reasonably adequate for the payment of all unpaid and unreported taxes) and has paid all taxes and other governmental assessments and charges that are material in amount, shown or determined to be due on such returns, reports and declarations, except those being contested in good faith and has set aside on its books provisions reasonably adequate for the payment of all taxes for periods subsequent to the periods to which such returns, reports or declarations apply.  There are no unpaid taxes in any material amount claimed to be due by the taxing authority of any jurisdiction, and the officers of the Company know of no basis for any such claim.  The Company has not executed a waiver with respect to the statute of limitations relating to the assessment or collection of any foreign, federal, state or local tax.  None of the Company’s tax returns is presently being audited by any taxing authority.

 

m.                Certain Transactions.  Except for arm’s length transactions pursuant to which the Company or any of its Subsidiaries makes payments in the ordinary course of business upon terms no less favorable than the Company or any of its Subsidiaries could obtain from third parties and other than the grant of stock options disclosed on Schedule 3(c), none of the officers, directors, or employees of the Company is presently a party to any transaction with the Company or any of its Subsidiaries (other than for services as employees, officers and directors), including any contract, agreement or other arrangement providing for the furnishing of services to or by, providing for rental of real or personal property to or from, or otherwise requiring payments to or from any officer, director or such employee or, to the knowledge of the Company, any corporation, partnership, trust or other entity in which any officer, director, or any such employee has a substantial interest or is an officer, director, trustee or partner.

 

n.                  Disclosure.  All information relating to or concerning the Company or any of its Subsidiaries set forth in this Agreement and provided to the Buyer pursuant to Section 2(d) hereof and otherwise in connection with the transactions contemplated hereby is true and correct in all material respects and the Company has not omitted to state any material fact necessary in order to make the statements made herein or therein, in light of the circumstances under which they were made, not misleading.  No event or circumstance has occurred or exists with respect to the Company or any of its Subsidiaries or its or their business, 

 

 

                                                                                                       9

 

 

properties, prospects, operations or financial conditions, which, under applicable law, rule or regulation, requires public disclosure or announcement by the Company but which has not been so publicly announced or disclosed (assuming for this purpose that the Company’s reports filed under the 1934 Act are being incorporated into an effective registration statement filed by the Company under the 1933 Act).

 

o.                  Acknowledgment Regarding Buyer’ Purchase of Securities.  The Company acknowledges and agrees that the Buyer is acting solely in the capacity of arm’s length purchasers with respect to this Agreement and the transactions contemplated hereby.  The Company further acknowledges that no Buyer is acting as a financial advisor or fiduciary of the Company (or in any similar capacity) with respect to this Agreement and the transactions contemplated hereby and any statement made by any Buyer or any of their respective representatives or agents in connection with this Agreement and the transactions contemplated hereby is not advice or a recommendation and is merely incidental to the Buyer’ purchase of the Securities.  The Company further represents to the Buyer that the Company’s decision to enter into this Agreement has been based solely on the independent evaluation of the Company and its representatives.

 

p.                  No Integrated Offering.  Neither the Company, nor any of its affiliates, nor any person acting on its or their behalf, has directly or indirectly made any offers or sales in any security or solicited any offers to buy any security under circumstances that would require registration under the 1933 Act of the issuance of the Securities to the Buyer.  The issuance of the Securities to the Buyer will not be integrated with any other issuance of the Company’s securities (past, current or future) for purposes of any shareholder approval provisions applicable to the Company or its securities.

 

q.                  No Brokers.  The Company has taken no action which would give rise to any claim by any person for brokerage commissions, transaction fees or similar payments relating to this Agreement or the transactions contemplated hereby. 

 

r.                    Permits; Compliance.  The Company and each of its Subsidiaries is in possession of all franchises, grants, authorizations, licenses, permits, easements, variances, exemptions, consents, certificates, approvals and orders necessary to own, lease and operate its properties and to carry on its business as it is now being conducted (collectively, the “Company Permits”), and there is no action pending or, to the knowledge of the Company, threatened regarding suspension or cancellation of any of the Company Permits.  Neither the Company nor any of its Subsidiaries is in conflict with, or in default or violation of, any of the Company Permits, except for any such conflicts, defaults or violations which, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect.  Since July 31, 2010, neither the Company nor any of its Subsidiaries has received any notification with respect to possible conflicts, defaults or violations of applicable laws, except for notices relating to possible conflicts, defaults or violations, which conflicts, defaults or violations would not have a Material Adverse Effect.

 

 

 

 

 

                                                                                                      10

 

 

s.                   Environmental Matters.

 

(i)                       There are, to the Company’s knowledge, with respect to the Company or any of its Subsidiaries or any predecessor of the Company, no past or present violations of Environmental Laws (as defined below), releases of any material into the environment, actions, activities, circumstances, conditions, events, incidents, or contractual obligations which may give rise to any common law environmental liability or any liability under the Comprehensive Environmental Response, Compensation and Liability Act of 1980 or similar federal, state, local or foreign laws and neither the Company nor any of its Subsidiaries has received any notice with respect to any of the foregoing, nor is any action pending or, to the Company’s knowledge, threatened in connection with any of the foregoing.  The term “Environmental Laws” means all federal, state, local or foreign laws relating to pollution or protection of human health or the environment (including, without limitation, ambient air, surface water, groundwater, land surface or subsurface strata), including, without limitation, laws relating to emissions, discharges, releases or threatened releases of chemicals, pollutants contaminants, or toxic or hazardous substances or wastes (collectively, “Hazardous Materials”) into the environment, or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Materials, as well as all authorizations, codes, decrees, demands or demand letters, injunctions, judgments, licenses, notices or notice letters, orders, permits, plans or regulations issued, entered, promulgated or approved thereunder.

 

(ii)                     Other than those that are or were stored, used or disposed of in compliance with applicable law, no Hazardous Materials are contained on or about any real property currently owned, leased or used by the Company or any of its Subsidiaries, and no Hazardous Materials were released on or about any real property previously owned, leased or used by the Company or any of its Subsidiaries during the period the property was owned, leased or used by the Company or any of its Subsidiaries, except in the normal course of the Company’s or any of its Subsidiaries’ business.

 

(iii)                   There are no underground storage tanks on or under any real property owned, leased or used by the Company or any of its Subsidiaries that are not in compliance with applicable law.
   
 t.                    Title to Property.  The Company and its Subsidiaries have good and marketable title in fee simple to all real property and good and marketable title to all personal property owned by them which is material to the business of the Company and its Subsidiaries, in each case free and clear of all liens, encumbrances and defects except such as are described in Schedule 3(t) or such as would not have a Material Adverse Effect.  Any real property and facilities held under lease by the Company and its Subsidiaries are held by them under valid, subsisting and enforceable leases with such exceptions as would not have a Material Adverse Effect.

 

u.                  Insurance.  The Company and each of its Subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as management of the Company believes to be prudent and customary in the businesses 

 

 

                                                                                                      11

 

 

in which the Company and its Subsidiaries are engaged.  Neither the Company nor any such Subsidiary has any reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business at a cost that would not have a Material Adverse Effect.  The Company has provided to Buyer true and correct copies of all policies relating to directors’ and officers’ liability coverage, errors and omissions coverage, and commercial general liability coverage.

 

v.                  Internal Accounting Controls.  The Company and each of its Subsidiaries maintain a system of internal accounting controls sufficient, in the judgment of the Company’s board of directors, to provide reasonable assurance that (i) transactions are executed in accordance with management’s general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles and to maintain asset accountability, (iii) access to assets is permitted only in accordance with management’s general or specific authorization and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences.

 

w.                Foreign Corrupt Practices.  Neither the Company, nor any of its Subsidiaries, nor any director, officer, agent, employee or other person acting on behalf of the Company or any Subsidiary has, in the course of his actions for, or on behalf of, the Company, used any corporate funds for any unlawful contribution, gift, entertainment or other unlawful expenses relating to political activity; made any direct or indirect unlawful payment to any foreign or domestic government official or employee from corporate funds; violated or is in violation of any provision of the U.S. Foreign Corrupt Practices Act of 1977, as amended, or made any bribe, rebate, payoff, influence payment, kickback or other unlawful payment to any foreign or domestic government official or employee.

 

x.                  Solvency.  The Company (after giving effect to the transactions contemplated by this Agreement) is solvent (i.e., its assets have a fair market value in excess of the amount required to pay its probable liabilities on its existing debts as they become absolute and matured) and currently the Company has no information that would lead it to reasonably conclude that the Company would not, after giving effect to the transaction contemplated by this Agreement, have the ability to, nor does it intend to take any action that would impair its ability to, pay its debts from time to time incurred in connection therewith as such debts mature.  The Company did not receive a qualified opinion from its auditors with respect to its most recent fiscal year end and, after giving effect to the transactions contemplated by this Agreement, does not anticipate or know of any basis upon which its auditors might issue a qualified opinion in respect of its current fiscal year.

 

y.                  No Investment Company.  The Company is not, and upon the issuance and sale of the Securities as contemplated by this Agreement will not be an “investment company” required to be registered under the Investment Company Act of 1940 (an “Investment Company”).  The Company is not controlled by an Investment Company.

 

 

 

                                                                                                      12

 

 

z.                   Breach of Representations and Warranties by the Company.  If the Company breaches any of the representations or warranties set forth in this Section 3, and in addition to any other remedies available to the Buyer pursuant to this Agreement, the Company shall pay to the Buyer the Standard Liquidated Damages Amount in cash or in shares of Common Stock at the option of the Company, until such breach is cured.  If the Company elects to pay the Standard Liquidated Damages Amounts in shares of Common Stock, such shares shall be issued at the Conversion Price at the time of payment.

 

4.                  COVENANTS.

 

a.                   Best Efforts.  The parties shall use their best efforts to satisfy timely each of the conditions described in Section 6 and 7 of this Agreement.  

 

b.                  Form D; Blue Sky Laws.  The Company agrees to file a Form D with respect to the Securities as required under Regulation D and to provide a copy thereof to the Buyer promptly after such filing.  The Company shall, on or before the Closing Date, take such action as the Company shall reasonably determine is necessary to qualify the Securities for sale to the Buyer at the applicable closing pursuant to this Agreement under applicable securities or “blue sky” laws of the states of the United States (or to obtain an exemption from such qualification), and shall provide evidence of any such action so taken to the Buyer on or prior to the Closing Date.

 

c.                   Use of Proceeds.  The Company shall use the proceeds from the sale of the Note in the manner set forth in Schedule 4(d) attached hereto and made a part hereof and shall not, directly or indirectly, use such proceeds for any loan to or investment in any other corporation, partnership, enterprise or other person (except in connection with its currently existing direct or indirect Subsidiaries).

 

d.                  Right of First Refusal.  Unless it shall have first delivered to the Buyer, at least seventy two (72) hours prior to the closing of such Future Offering (as defined herein), written notice describing the proposed Future Offering, including the terms and conditions thereof and proposed definitive documentation to be entered into in connection therewith, and providing the Buyer an option during the seventy two (72) hour period following delivery of such notice to purchase the securities being offered in the Future Offering on the same terms as contemplated by such Future Offering (the limitations referred to in this sentence and the preceding sentence are collectively referred to as the “Right of First Refusal”) (and subject to the exceptions described below), the Company will not conduct any equity financing (including debt with an equity component) (“Future Offerings”) during the period beginning on the Closing Date and ending twelve (12) months following the Closing Date.  In the event the terms and conditions of a proposed Future Offering are amended in any respect after delivery of the notice to the Buyer concerning the proposed Future Offering, the Company shall deliver a new notice to the Buyer describing the amended terms and conditions of the proposed Future Offering and the Buyer thereafter shall have an option during the seventy two (72) hour period following delivery of such new notice to purchase its pro rata share of the securities being offered on the same terms as contemplated by such proposed Future Offering, as amended.  The foregoing sentence shall apply to successive amendments to the terms and conditions of any 

 

 

                                                                                                      13

 

 

 proposed Future Offering.  The Right of First Refusal shall not apply to any transaction involving (i) issuances of securities in a firm commitment underwritten public offering (excluding a continuous offering pursuant to Rule 415 under the 1933 Act) or (ii) issuances of securities as consideration for a merger, consolidation or purchase of assets, or in connection with any strategic partnership or joint venture (the primary purpose of which is not to raise equity capital), or in connection with the disposition or acquisition of a business, product or license by the Company.  The Right of First Refusal also shall not apply to the issuance of securities upon exercise or conversion of the Company’s options, warrants or other convertible securities outstanding as of the date hereof or to the grant of additional options or warrants, or the issuance of additional securities, under any Company stock option or restricted stock plan approved by the shareholders of the Company.  

 

e.                   Expenses.  At the Closing, the Company shall reimburse Buyer for expenses incurred by them in connection with the negotiation, preparation, execution, delivery and performance of this Agreement and the other agreements to be executed in connection herewith (“Documents”), including, without limitation, reasonable attorneys’ and consultants’ fees and expenses, transfer agent fees, fees for stock quotation services, fees relating to any amendments or modifications of the Documents or any consents or waivers of provisions in the Documents, fees for the preparation of opinions of counsel, escrow fees, and costs of restructuring the transactions contemplated by the Documents.  When possible, the Company must pay these fees directly, otherwise the Company must make immediate payment for reimbursement to the Buyer for all fees and expenses immediately upon written notice by the Buyer or the submission of an invoice by the Buyer Notwithstanding anything herein to the contrary, the Company’s obligation to reimburse Buyer’ expenses shall be $2,500.

 

f.                   Financial Information.  The Company agrees to send or make available the following reports to the Buyer until the Buyer transfers, assigns, or sells all of the Securities: (i) within ten (10) days after the filing with the SEC, a copy of its Annual Report on Form 10-K its Quarterly Reports on Form 10-Q and any Current Reports on Form 8-K; (ii) within one (1) day after release, copies of all press releases issued by the Company or any of its Subsidiaries; and (iii) contemporaneously with the making available or giving to the shareholders of the Company, copies of any notices or other information the Company makes available or gives to such shareholders.

 

g.                  Authorization and Reservation of Shares.  The Company shall at all times have authorized, and reserved for the purpose of issuance, a sufficient number of shares of Common Stock to provide for the full conversion or exercise of the outstanding Note and issuance of the Conversion Shares in connection therewith (based on the Conversion Price of the Note in effect from time to time) and as otherwise required by the Note.  The Company shall not reduce the number of shares of Common Stock reserved for issuance upon conversion of Note without the consent of the Buyer.  The Company shall at all times maintain the number of shares of Common Stock so reserved for issuance at an amount (“Reserved Amount”) equal to five times the number that is then actually issuable upon full conversion of the Note and Additional Note (based on the Conversion Price of the Note in effect from time to time).  If at any time the number of shares of Common Stock authorized and reserved for issuance (“Authorized and Reserved Shares”) is below the Reserved Amount, the Company will promptly take all corporate 

 

 

                                                                                                      14

 

action necessary to authorize and reserve a sufficient number of shares, including, without limitation, calling a special meeting of shareholders to authorize additional shares to meet the Company’s obligations under this Section 4(g), in the case of an insufficient number of authorized shares, obtain shareholder approval of an increase in such authorized number of shares, and voting the management shares of the Company in favor of an increase in the authorized shares of the Company to ensure that the number of authorized shares is sufficient to meet the Reserved Amount.  If the Company fails to obtain such shareholder approval within thirty (30) days following the date on which the number of Reserved Amount exceeds the Authorized and Reserved Shares, the Company shall pay to the Buyer the Standard Liquidated Damages Amount, in cash or in shares of Common Stock at the option of the Buyer.  If the Buyer elects to be paid the Standard Liquidated Damages Amount in shares of Common Stock, such shares shall be issued at the Conversion Price at the time of payment.  In order to ensure that the Company has authorized a sufficient amount of shares to meet the Reserved Amount at all times, the Company must deliver to the Buyer at the end of every month a list detailing (1) the current amount of shares authorized by the Company and reserved for the Buyer; and (2) amount of shares issuable upon conversion of the Note and as payment of interest accrued on the Note for one year.  If the Company fails to provide such list within five (5) business days of the end of each month, the Company shall pay the Standard Liquidated Damages Amount, in cash or in shares of Common Stock at the option of the Buyer, until the list is delivered.  If the Buyer elects to be paid the Standard Liquidated Damages Amount in shares of Common Stock, such shares shall be issued at the Conversion Price at the time of payment.

 

h.                  Listing.  The Company shall promptly secure the listing of the Conversion Shares upon each national securities exchange or automated quotation system, if any, upon which shares of Common Stock are then listed (subject to official notice of issuance) and, so long as any Buyer owns any of the Securities, shall maintain, so long as any other shares of Common Stock shall be so listed, such listing of all Conversion Shares from time to time issuable upon conversion of the Note.  The Company will obtain and, so long as any Buyer owns any of the Securities, maintain the listing and trading of its Common Stock on the OTCBB or any equivalent replacement exchange, the Nasdaq National Market (“Nasdaq”), the Nasdaq SmallCap Market (“Nasdaq SmallCap”), the New York Stock Exchange (“NYSE”), or the American Stock Exchange (“AMEX”) and will comply in all respects with the Company’s reporting, filing and other obligations under the bylaws or rules of the Financial Industry Regulatory Authority (“FINRA”) and such exchanges, as applicable.  The Company shall promptly provide to the Buyer copies of any notices it receives from the OTCBB and any other exchanges or quotation systems on which the Common Stock is then listed regarding the continued eligibility of the Common Stock for listing on such exchanges and quotation systems.

 

i.                    Corporate Existence.  So long as a Buyer beneficially owns any Note, the Company shall maintain its corporate existence and shall not sell all or substantially all of the Company’s assets, except in the event of a merger or consolidation or sale of all or substantially all of the Company’s assets, where the surviving or successor entity in such transaction (i) assumes the Company’s obligations hereunder and under the agreements and instruments entered into in connection herewith and (ii) is a publicly traded corporation whose Common Stock is listed for trading on the OTCBB, Nasdaq, Nasdaq SmallCap, NYSE or AMEX.
 

 

 

                                                                                                      15

 

 

 

j.                    No Integration.  The Company shall not make any offers or sales of any security (other than the Securities) under circumstances that would require registration of the Securities being offered or sold hereunder under the 1933 Act or cause the offering of the Securities to be integrated with any other offering of securities by the Company for the purpose of any stockholder approval provision applicable to the Company or its securities.

 

k.                  Breach of Covenants.  If the Company breaches any of the covenants set forth in this Section 4, and in addition to any other remedies available to the Buyer pursuant to this Agreement, the Company shall pay to the Buyer the Standard Liquidated Damages Amount, in cash or in shares of Common Stock at the option of Buyer, until such breach is cured.  If the Buyer elects to pay the Standard Liquidated Damages Amount in shares, such shares shall be issued at the Conversion Price at the time of payment.
  
 l.                    Failure to Comply with the 1934 Act.  So long as the Buyer beneficially owns the Note, the Company shall comply with the reporting requirements of the 1934 Act; and the Company shall continue to be subject to the reporting requirements of the 1934 Act.
  
 m.                Trading Activities.  Neither the Buyer nor their affiliates has an open short position in the common stock of the Company and the Buyer agree that they shall not, and that they will cause their affiliates not to, engage in any short sales of or hedging transactions with respect to the common stock of the Company.  

 

5.                  Transfer Agent Instructions.  The Company shall issue irrevocable instructions to its transfer agent to issue certificates, registered in the name of the Buyer or its nominee, for the Conversion Shares in such amounts as specified from time to time by the Buyer to the Company upon conversion of the Note in accordance with the terms thereof (the “Irrevocable Transfer Agent Instructions”).  In the event that the Borrower proposes to replace its transfer agent, the Borrower shall provide, prior to the effective date of such replacement, a fully executed Irrevocable Transfer Agent Instructions in a form as initially delivered pursuant to the Purchase Agreement (including but not limited to the provision to irrevocably reserve shares of Common Stock in the Reserved Amount) signed by the successor transfer agent to Borrower and the Borrower. Prior to registration of the Conversion Shares under the 1933 Act or the date on which the Conversion Shares may be sold pursuant to Rule 144 without any restriction as to the number of Securities as of a particular date that can then be immediately sold, all such certificates shall bear the restrictive legend specified in Section 2(g) of this Agreement.  The Company warrants that: (i) no instruction other than the Irrevocable Transfer Agent Instructions referred to in this Section 5, and stop transfer instructions to give effect to Section 2(f) hereof (in the case of the Conversion Shares, prior to registration of the Conversion Shares under the 1933 Act or the date on which the Conversion Shares may be sold pursuant to Rule 144 without any restriction as to the number of Securities as of a particular date that can then be immediately sold), will be given by the Company to its transfer agent and that the Securities shall otherwise be freely transferable on the books and records of the Company as and to the extent provided in this Agreement and the Note; (ii) it will not direct its transfer agent not to transfer or delay, impair, and/or hinder its transfer agent in transferring (or issuing)(electronically or in certificated 

 

 

                                                                                                      16

 

 

form) any certificate for Conversion Shares to be issued to the Buyer upon conversion of or otherwise pursuant to the Note as and when required by the Note and this Agreement; and (iii) it will not fail to remove (or directs its transfer agent not to remove or impairs, delays, and/or hinders its transfer agent from removing) any restrictive legend (or to withdraw any stop transfer instructions in respect thereof) on any certificate for any Conversion Shares issued to the Buyer upon conversion of or otherwise pursuant to the Note as and when required by the Note and this Agreement.  Nothing in this Section shall affect in any way the Buyer’s obligations and agreement set forth in Section 2(g) hereof to comply with all applicable prospectus delivery requirements, if any, upon re-sale of the Securities.  If a Buyer provides the Company, at the cost of the Buyer, with (i) an opinion of counsel in form, substance and scope customary for opinions in comparable transactions, to the effect that a public sale or transfer of such Securities may be made without registration under the 1933 Act and such sale or transfer is effected or (ii) the Buyer provides reasonable assurances that the Securities can be sold pursuant to Rule 144, the Company shall permit the transfer, and, in the case of the Conversion Shares, promptly instruct its transfer agent to issue one or more certificates, free from restrictive legend, in such name and in such denominations as specified by the Buyer.  The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Buyer, by vitiating the intent and purpose of the transactions contemplated hereby.  Accordingly, the Company acknowledges that the remedy at law for a breach of its obligations under this Section 5 may be inadequate and agrees, in the event of a breach or threatened breach by the Company of the provisions of this Section, that the Buyer shall be entitled, in addition to all other available remedies, to an injunction restraining any breach and requiring immediate transfer, without the necessity of showing economic loss and without any bond or other security being required.

 

6.                  Conditions to the Company’s Obligation to Sell.  The obligation of the Company hereunder to issue and sell the Note to a Buyer at the Closing is subject to the satisfaction, at or before the Closing Date of each of the following conditions thereto, provided that these conditions are for the Company’s sole benefit and may be waived by the Company at any time in its sole discretion:

 

a.                   The Buyer shall have executed this Agreement and delivered the same to the Company.

 

b.                  The Buyer shall have delivered the Purchase Price in accordance with Section 1(b) above.

 

c.                   The representations and warranties of the applicable Buyer shall be true and correct in all material respects as of the date when made and as of the Closing Date as though made at that time (except for representations and warranties that speak as of a specific date), and the applicable Buyer shall have performed, satisfied and complied in all material respects with the covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied with by the applicable Buyer at or prior to the Closing Date. 

 

d.                  No litigation, statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by or in any court or governmental authority of competent jurisdiction or any self-regulatory organization having 

 

 

                                                                                                      17

 

 

authority over the matters contemplated hereby which prohibits the consummation of any of the transactions contemplated by this Agreement.

 

7.                  Conditions to The Buyer’s Obligation to Purchase.  The obligation of the Buyer hereunder to purchase the Note at the Closing is subject to the satisfaction, at or before the Closing Date of each of the following conditions, provided that these conditions are for the Buyer’s sole benefit and may be waived by the Buyer at any time in its sole discretion:

 

a.                   The Company shall have executed this Agreement and delivered the same to the Buyer.

 

b.                  The Company shall have delivered to the Buyer duly executed Note (in such denominations as the Buyer shall request) in accordance with Section 1(b) above.

 

c.                   The Irrevocable Transfer Agent Instructions, in form and substance satisfactory to a majority-in-interest of the Buyer, shall have been delivered to and acknowledged in writing by the Company’s Transfer Agent.

 

d.                  The representations and warranties of the Company shall be true and correct in all material respects as of the date when made and as of the Closing Date as though made at such time (except for representations and warranties that speak as of a specific date) and the Company shall have performed, satisfied and complied in all material respects with the covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied with by the Company at or prior to the Closing Date.  The Buyer shall have received a certificate or certificates, executed by the chief executive officer of the Company, dated as of the Closing Date, to the foregoing effect and as to such other matters as may be reasonably requested by the Buyer including, but not limited to certificates with respect to the Company’s Certificate of Incorporation, By-laws and Board of Directors’ resolutions relating to the transactions contemplated hereby.

 

e.                   No litigation, statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by or in any court or governmental authority of competent jurisdiction or any self-regulatory organization having authority over the matters contemplated hereby which prohibits the consummation of any of the transactions contemplated by this Agreement.

 

f.                   No event shall have occurred which could reasonably be expected to have a Material Adverse Effect on the Company including but not limited to a change in the 1934 Act reporting status of the Company or the failure of the Company to be timely in its 1934 Act reporting obligations.

 

g.                  The Conversion Shares shall have been authorized for quotation on the OTCBB and trading in the Common Stock on the OTCBB shall not have been suspended by the SEC or the OTCBB.

 

 

 

                                                                                                      18

 

 

h.                  The Buyer shall have received an officer’s certificate described in Section 3(c) above, dated as of the Closing Date.

 

8.                  Governing Law; Miscellaneous.
  
 a.                   Governing Law.  This Agreement shall be governed by and construed in accordance with the laws of the State of New York without regard to principles of conflicts of laws.  Any action brought by either party against the other concerning the transactions contemplated by this Agreement shall be brought only in the state courts of New York or in the federal courts located in the state and county of Nassau.  The parties to this Agreement hereby irrevocably waive any objection to jurisdiction and venue of any action instituted hereunder and shall not assert any defense based on lack of jurisdiction or venue or based upon forum non conveniens.  The Company and Buyer waive trial by jury.  The prevailing party shall be entitled to recover from the other party its reasonable attorney's fees and costs.  In the event that any provision of this Agreement or any other agreement delivered in connection herewith is invalid or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform with such statute or rule of law.  Any such provision which may prove invalid or unenforceable under any law shall not affect the validity or enforceability of any other provision of any agreement.   Each party hereby irrevocably waives personal service of process and consents to process being served in any suit, action or proceeding in connection with this Agreement or any other Transaction Document by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof.  Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law.

 

b.                  Counterparts; Signatures by Facsimile.  This Agreement may be executed in one or more counterparts, each of which shall be deemed an original but all of which shall constitute one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party.  This Agreement, once executed by a party, may be delivered to the other party hereto by facsimile transmission of a copy of this Agreement bearing the signature of the party so delivering this Agreement.

 

c.                   Headings.  The headings of this Agreement are for convenience of reference only and shall not form part of, or affect the interpretation of, this Agreement.
  
 d.                  Severability.  In the event that any provision of this Agreement is invalid or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform with such statute or rule of law.  Any provision hereof which may prove invalid or unenforceable under any law shall not affect the validity or enforceability of any other provision hereof.

 

e.                   Entire Agreement; Amendments.  This Agreement and the instruments referenced herein contain the entire understanding of the parties with respect to the 

 

 

                                                                                                      19

 

 

matters covered herein and therein and, except as specifically set forth herein or therein, neither the Company nor the Buyer makes any representation, warranty, covenant or undertaking with respect to such matters.  No provision of this Agreement may be waived or amended other than by an instrument in writing signed by the majority in interest of the Buyer.

 

f.                   Notices.  All notices, demands, requests, consents, approvals, and other communications required or permitted hereunder shall be in writing and, unless otherwise specified herein, shall be (i) personally served, (ii) deposited in the mail, registered or certified, return receipt requested, postage prepaid, (iii) delivered by reputable air courier service with charges prepaid, or (iv) transmitted by hand delivery, telegram, or facsimile, addressed as set forth below or to such other address as such party shall have specified most recently by written notice.  Any notice or other communication required or permitted to be given hereunder shall be deemed effective (a) upon hand delivery or delivery by facsimile, with accurate confirmation generated by the transmitting facsimile machine, at the address or number designated below (if delivered on a business day during normal business hours where such notice is to be received), or the first business day following such delivery (if delivered other than on a business day during normal business hours where such notice is to be received) or (b) on the second business day following the date of mailing by express courier service, fully prepaid, addressed to such address, or upon actual receipt of such mailing, whichever shall first occur.  The addresses for such communications shall be:  

 

If to the Company, to: 

 

MICRO IMAGING TECHNOLOGY, INC.

970 Calle Amanecer - Suite F

San Clemente, CA 92673

Attn: MICHAEL W. BRENNAN, Chief Executive Officer

facsimile: [enter fax number]

 

With a copy by fax only to (which copy shall not constitute notice): 

 

[enter name of law firm]

Attn: [attorney name]

[enter address line 1]

[enter city, state, zip]

facsimile: [enter fax number]

 

If to the Buyer:

 

                        ASHER ENTERPRISES, INC.

1 Linden Pl., Suite 207

Great Neck, NY. 11021

                        Attn: Curt Kramer, President 

facsimile: 516-498-9894

 

 

 

 

                                                                                                      20

 

 

With a copy by fax only to (which copy shall not constitute notice):

 

            Naidich Wurman Birnbaum & Maday, LLP

            80 Cuttermill Road, Suite 410

            Great Neck, NY 11021

            Attn: Bernard S. Feldman, Esq.

facsimile: 516-466-3555

 

Each party shall provide notice to the other party of any change in address.

 

g.                  Successors and Assigns.  This Agreement shall be binding upon and inure to the benefit of the parties and their successors and assigns.  Neither the Company nor any Buyer shall assign this Agreement or any rights or obligations hereunder without the prior written consent of the other.  Notwithstanding the foregoing, subject to Section 2(f), any Buyer may assign its rights hereunder to any person that purchases Securities in a private transaction from a Buyer or to any of its “affiliates,” as that term is defined under the 1934 Act, without the consent of the Company.

 

h.                  Third Party Beneficiaries.  This Agreement is intended for the benefit of the parties hereto and their respective permitted successors and assigns, and is not for the benefit of, nor may any provision hereof be enforced by, any other person.

 

i.                    Survival.  The representations and warranties of the Company and the agreements and covenants set forth in this Agreement shall survive the closing hereunder notwithstanding any due diligence investigation conducted by or on behalf of the Buyer.  The Company agrees to indemnify and hold harmless each of the Buyer and all their officers, directors, employees and agents for loss or damage arising as a result of or related to any breach or alleged breach by the Company of any of its representations, warranties and covenants set forth in this Agreement or any of its covenants and obligations under this Agreement, including advancement of expenses as they are incurred.

 

j.                    Publicity.  The Company, and each of the Buyer shall have the right to review a reasonable period of time before issuance of any press releases, SEC, OTCBB or FINRA filings, or any other public statements with respect to the transactions contemplated hereby; provided, however, that the Company shall be entitled, without the prior approval of each of the Buyer, to make any press release or SEC, OTCBB (or other applicable trading market) or FINRA filings with respect to such transactions as is required by applicable law and regulations (although each of the Buyer shall be consulted by the Company in connection with any such press release prior to its release and shall be provided with a copy thereof and be given an opportunity to comment thereon).

 

k.                  Further Assurances.  Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver all such other agreements, certificates, instruments and documents, as the other party may reasonably request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.
 

 

 

                                                                                                      21

 

 

 

l.                    No Strict Construction.  The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and no rules of strict construction will be applied against any party.

 

m.                Remedies.  The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Buyer by vitiating the intent and purpose of the transaction contemplated hereby.  Accordingly, the Company acknowledges that the remedy at law for a breach of its obligations under this Agreement will be inadequate and agrees, in the event of a breach or threatened breach by the Company of the provisions of this Agreement, that the Buyer shall be entitled, in addition to all other available remedies at law or in equity, and in addition to the penalties assessable herein, to an injunction or injunctions restraining, preventing or curing any breach of this Agreement and to enforce specifically the terms and provisions hereof, without the necessity of showing economic loss and without any bond or other security being required.

 

IN WITNESS WHEREOF, the undersigned Buyer and the Company have caused this Agreement to be duly executed as of the date first above written.

 

 

MICRO IMAGING TECHNOLOGY, INC.

 

By:________________________________

            MICHAEL W. BRENNAN

Chief Executive Officer 

 

ASHER ENTERPRISES, INC.

 

 

By:_________________________________ 

Name: Curt Kramer 

Title:   President

 

1 Linden Pl., Suite 207

Great Neck, NY. 11021

 

 

AGGREGATE SUBSCRIPTION AMOUNT:

 

Aggregate Principal Amount of Note:                                                            $32,500.00

 

Aggregate Purchase Price:                                                                              $32,500.00

 

 

                                                                                                      22Exhibit
4.1

    SERIES A WARRANT
AGREEMENT

     

    This
SERIES A WARRANT AGREEMENT (this “Agreement”), dated as of February 8, 2011, is
entered into among Repros Therapeutics Inc., a Delaware corporation (the
“Company”), Computershare, Inc., a Delaware corporation and its fully owned
subsidiary Computershare Trust Company, N.A., a national banking association
(collectively, the “Warrant Agent” or individually “Computershare” and the
“Trust Company,” respectively).

    

    WITNESSETH

     

    WHEREAS,
the Company, at or about the time that it is entering into this Agreement,
proposes to issue and sell to public investors Series A Warrants (the
“Warrants”) entitling the holder or holders thereof to purchase an aggregate of
2,070,000 shares of common stock, par value $.001 per share, of the Company (the
“Common Stock”) upon the terms and subject to the conditions hereinafter set
forth;

     

    WHEREAS,
the Company has filed with the Securities and Exchange Commission (the “SEC”) a
Registration Statement on Form S-1, No. 333-171196 (“Registration Statement”),
for the registration, under the Securities Act of 1933, as amended, of, among
other securities, the Warrants and the shares of Common Stock issuable upon
exercise of the Warrants (the “Warrant Shares”); and

    

    WHEREAS,
the Company wishes the Warrant Agent to act on behalf of the Company, and the
Warrant Agent is willing so to act, in connection with the issuance, transfer,
exchange and exercise of the Warrants;

     

    NOW,
THEREFORE, in consideration of the premises and the mutual agreements herein set
forth, the parties hereby agree as follows:

     

    Section 1.     
   Certain
Definitions.       For
purposes of this Agreement, the following terms have the meanings
indicated:

     

    (a)          “Affiliate”
has the meaning ascribed to it in Rule 12b-2 under the Securities Exchange Act
of 1934, as amended (the “Exchange Act”).

     

    (b)          “Business
Day” means any day other than a Saturday, Sunday or a day on which the New York
Stock Exchange  is authorized or obligated by law or executive order
to close.

     

    (c)          “Close
of Business” on any given date means 5:00 p.m., New York City time, on such
date; provided,
however, that
if such date is not a Business Day it means 5:00 p.m., New York City time, on
the next succeeding Business Day.

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    (d)          “Current
Market Price”, as of any date, with respect to a share of Common Stock, shall be
deemed to be the average closing price for the ten consecutive trading days
immediately preceding such date on the principal national securities exchange or
Nasdaq system on which the shares of Common Stock are listed or admitted to
trading or, if not listed or admitted to trading on any national securities
exchange or Nasdaq system, the average of the reported bid and asked prices
during such 10 trading day period in the over-the-counter market as furnished by
the Pink Sheets LLC, or, if such firm is not then engaged in the business of
reporting such prices, as furnished by any similar firm then engaged in such
business selected by the Company, or, if there is no such firm, as furnished by
any member of the Financial Industry Regulatory Authority selected by the
Company or, if the shares of Common Stock are not publicly traded, the Current
Market Price shall be determined in good faith by the Board of Directors of the
Company.

     

    (e)          “Effective
Date” means February 8, 2011.

     

    (f)          
“Exercise Price” means the Initial Exercise Price as adjusted from time to time
pursuant to Section 10 hereof.

     

    (g)          “Initial
Exercise Price” means $0.01 per share of Common Stock.

     

    (h)          “Person”
means an individual, corporation, association, partnership, limited liability
company, joint venture, trust, unincorporated organization, government or
political subdivision thereof or governmental agency or other
entity.

     

    (i)          
“Warrant Certificate” means a certificate in substantially the form attached as
Exhibit 1 hereto representing such number of Warrants as is indicated on the
face thereof.

     

    Section
2.         Appointment of Warrant
Agent.  The
Company hereby appoints the Warrant Agent to act as agent for the Company in
accordance with the terms and conditions hereof, and the Warrant Agent hereby
accepts such appointment.  The Company may from time to time appoint
such Co-Warrant Agents as it may, in its sole discretion, deem necessary or
desirable. In no event will the Warrant Agent be liable for the acts or
omissions of any such Co-Warrant Agent.

     

    Section
3.         Form of Warrant
Certificates.  The
Warrant Certificates (together with the form of election to purchase Common
Stock (the “Exercise Notice”) and the form of assignment to be printed on the
reverse thereof) shall be substantially in the form of Exhibit 1 hereto and
may have such marks of identification or designation and such legends, summaries
or endorsements printed thereon as the Company may deem appropriate and as are
not inconsistent with the provisions of this Agreement or as may be required to
comply with any law or with any rule or regulation made pursuant thereto, or to
conform to usage.

     

    Section
4.         Countersignature and
Registration.  The
Warrant Certificates shall be executed on behalf of the Company by its Chairman,
its President or a Vice President, either manually or by facsimile signature,
and have affixed thereto the Company’s seal or a facsimile thereof which shall
be attested by the Secretary or an Assistant Secretary of the Company, either
manually or by facsimile signature.  The Warrant Certificates shall be
countersigned by the Warrant Agent either manually or by facsimile signature and
shall not be valid for any purpose unless so countersigned.  In case
any officer of the Company who shall have signed any of the Warrant Certificates
shall cease to be such officer of the Company before countersignature by the
Warrant Agent and issuance and delivery by the Company, such Warrant
Certificates, nevertheless, may be countersigned by the Warrant Agent, issued
and delivered with the same force and effect as though the person who signed
such Warrant Certificate had not ceased to be such officer of the Company; and
any Warrant Certificate may be signed on behalf of the Company by any person
who, at the actual date of the execution of such Warrant Certificate, shall be a
proper officer of the Company to sign such Warrant Certificate, although at the
date of the execution of this Warrant Agreement any such person was not such an
officer.

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    The
Warrant Agent will keep or cause to be kept, at one of its offices in Canton,
Massachusetts, or at the office of one of its agents, books for registration and
transfer of the Warrant Certificates issued hereunder.  Such books
shall show the names and addresses of the respective holders of the Warrant
Certificates, the number of warrants evidenced on the face of each of such
Warrant Certificate and the date of each of such Warrant
Certificate.

     

    The
Warrant Agent will create a special account for the issuance of Warrants and the
Warrant Shares.  The Company shall provide an opinion of counsel dated
as of the Effective Date to set up reserve of Warrants and reserve of shares of
Common Stock for issuance upon exercise of the Warrants, upon which opinion the
recipients of the Warrants and Warrant Shares shall be entitled to
rely.  The opinion shall state that:

     

    (1)           The
Warrants and Warrant Shares are registered under the Securities Act of 1933, as
amended;

     

    (2)           The
Warrants, when issued in accordance with the terms of the Warrant
Agreement, will be valid and binding obligations of the Company, enforceable
against the Company in accordance with their terms and are free and clear of all
liens and encumbrances; and

     

     (3)           Upon
the valid exercise in accordance with the terms of the Warrants and payment of
the consideration required in connection therewith, the Warrant Shares will be
validly issued, fully paid and non-assessable, free and clear of all liens and
encumbrances.

     

    Section
5.         Transfer, Split Up,
Combination and Exchange of Warrant Certificates; Mutilated, Destroyed, Lost or
Stolen Warrant Certificates.  Subject
to the provisions of Section 13 hereof and the last sentence of this first
paragraph of Section 5 and subject to applicable law, rules or regulations,
restrictions on transferability that may appear on Warrant Certificates in
accordance with the terms hereof or any “stop transfer” instructions the Company
may give to the Warrant Agent, at any time after the Close of Business on the
date hereof, at or prior to the Close of Business on the Expiration Date (as
such term is hereinafter defined), any Warrant Certificate or Warrant
Certificates may be transferred, split up, combined or exchanged for another
Warrant Certificate or Warrant Certificates, entitling the registered holder to
purchase a like number of shares of Common Stock as the Warrant Certificate or
Warrant Certificates surrendered then entitled such holder to
purchase.  Any registered holder desiring to transfer, split up,
combine or exchange any Warrant Certificate shall make such request in writing
delivered to the Warrant Agent, and shall surrender the Warrant Certificate or
Warrant Certificates to be transferred, split up, combined or exchanged at the
principal office of the Warrant Agent.  Thereupon the Warrant Agent
shall, subject to the last sentence of this first paragraph of Section 5,
countersign and deliver to the person entitled thereto a Warrant Certificate or
Warrant Certificates, as the case may be, as so requested.  The
Company may require payment of a sum sufficient to cover any tax or governmental
charge that may be imposed in connection with any transfer, split up,
combination or exchange of Warrant Certificates, together with reimbursement to
the Company and the Warrant Agent of all reasonable expenses incidental
thereto.

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    Upon
receipt by the Company and the Warrant Agent of evidence reasonably satisfactory
to them of the loss, theft, destruction or mutilation of a Warrant Certificate,
and, in case of loss, theft or destruction, of indemnity or security in
customary form and amount which shall include a corporate bond of indemnity
satisfactory to the Warrant Agent, and reimbursement to the Company and the
Warrant Agent of all reasonable expenses incidental thereto, and upon surrender
to the Warrant Agent and cancellation of the Warrant Certificate if mutilated,
the Company will make and deliver a new Warrant Certificate of like tenor to the
Warrant Agent for delivery to the registered holder in lieu of the Warrant
Certificate so lost, stolen, destroyed or mutilated.

     

    Section
6.         Exercise of Warrants;
Exercise Price; Expiration Date  The
Warrants shall be exercisable in whole or in part immediately upon and after
issuance.  The Warrants shall cease to be exercisable and shall
terminate and become void, and all rights thereunder and under this Agreement
shall cease, at the Close of Business on the date which is the five year
anniversary of the Effective Date (the “Expiration Date”).  Subject to
the foregoing and to Section 6(b) below, the registered holder of any
Warrant Certificate may exercise the Warrants evidenced thereby in whole or in
part upon surrender of the Warrant Certificate, with the Exercise Notice duly
executed, to the Warrant Agent, or Computershare, as applicable,  at
the principal office of the Warrant Agent in Canton, Massachusetts or to the
office of one of its agents as may be designated by the Warrant Agent from time
to time, together with payment of the Exercise Price, which may be made, at the
option of the holder, (i) in cash in United States dollars or by certified or
official bank check, (ii) in the event that the Current Market Price exceeds the
Exercise Price, by a Cashless Exercise (as defined below) or (iii) by any
combination of (i) and (ii), to the principal office of the Warrant Agent where
the Warrant Certificate is being surrendered.  A "Cashless Exercise"
shall mean an exercise of a Warrant in accordance with the immediately following
two sentences.  To effect a Cashless Exercise, the holder may exercise
a Warrant or Warrants without payment of the Exercise Price in cash by
surrendering such Warrant or Warrants (represented by one or more Warrant
Certificates) and, in exchange therefor, receiving such number of shares of
Common Stock equal to the product of (1) that number of shares of Common Stock
for which such Warrants are exercisable and which would be issuable in the event
of an exercise with payment in cash of the Exercise Price and (2) the Cashless
Exercise Ratio (as defined below).  The "Cashless Exercise Ratio"
shall equal a fraction, the numerator of which is the excess of the Current
Market Price (calculated as set forth in this agreement) per share of Common
Stock on the date of exercise over the Exercise Price per share of Common Stock
as of the date of exercise and the denominator of which is the Current Market
Price per share of Common Stock on the date of exercise.  Upon
surrender of a Warrant Certificate representing more than one Warrant in
connection with a holder's option to elect a Cashless Exercise, such holder must
specify the number of Warrants for which such Warrant Certificate is to be
exercised (without giving effect to such Cashless Exercise).  All
provisions of this Agreement shall be applicable with respect to a Cashless
Exercise of a Warrant Certificate of less than the full number of Warrants
represented thereby.  No payment or adjustment shall be made on
account of any distributions or dividends on the Common Stock issued upon
exercise of a Warrant.

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    The
Company shall calculate and transmit to the Warrant Agent, and the Warrant Agent
shall have no obligation under this section to calculate, the Cashless Exercise
Ratio (and the basis for such calculation (which the Warrant Agent shall have no
obligation under this section to recalculate)).

     

    (b)          Upon
receipt of a Warrant Certificate at or prior to the Close of Business on the
Expiration Date, with the form of election to purchase duly executed,
accompanied by payment of the Exercise Price for the shares to be purchased (or
election of the Cashless Exercise option) and an amount equal to any applicable
tax or governmental charge referred to in Section 5 in cash, or by
certified check or bank draft payable to the order of the Company, the Warrant
Agent shall thereupon promptly (i) requisition from any transfer agent of
the Common Stock certificates for the number of whole shares of Common Stock to
be purchased, and the Company hereby irrevocably authorizes its transfer agent
to comply with all such requests and (ii)  after receipt of such
certificates, use its best efforts to cause the same to be delivered to or upon
the order of the registered holder of such Warrant Certificate, registered in
such name or names as may be designated by such holder, within three (3) trading
days following exercise of such Warrants (the “Delivery Date”).  Upon
receipt by the Company of a Warrant Certificate at the principal office of the
Warrant Agent, with the form of election to purchase duly executed, and payment
of the applicable Exercise Price as required hereby, the holder of such Warrant
Certificate shall be deemed to be the holder of record of the shares of Common
Stock issuable upon such exercise, notwithstanding that the stock transfer books
of the Company shall then be closed or that certificates representing such
shares of Common Stock shall not then be actually delivered to the holder of
such Warrant Certificate.

     

    (c)          In
case the registered holder of any Warrant Certificate shall exercise fewer than
all Warrants evidenced thereby, a new Warrant Certificate evidencing the number
of Warrants equivalent to the number of Warrants remaining unexercised shall be
issued by the Warrant Agent to the registered holder of such Warrant Certificate
or to his duly authorized assigns, subject to the provisions of Sections 5,
6(b) and 13 hereof.

     

    (d)          In
addition to a holder’s other available remedies, the Company shall pay to such a
holder, in cash, as liquidated damages and not as a penalty, for non-delivery by
the Delivery Date, an amount equal to the difference between the closing price
of the Common Stock on the Delivery Date and the closing price of the Common
Stock on the date the Common Stock is actually delivered multiplied by the
number of Warrant Shares so exercised.

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    (e)          The registered holder shall not have the right to
exercise any portion of such holder’s Warrants,
pursuant to Section 6 or otherwise, to the
extent that after giving effect to such issuance after exercise as set forth on the applicable
Exercise Notice duly executed, such holder (together with such
holder’s Affiliates, and any other person or entity acting as a
group together with such holder or any of such holder’s Affiliates),
would beneficially own in excess of the Beneficial Ownership
Limitation (as defined below).  For purposes of the foregoing
sentence, the number of shares of Common Stock beneficially owned by such holder
and its Affiliates shall include the number of shares of Common Stock issuable
upon exercise of such holder’s Warrants with respect to which such determination is
being made, but shall exclude the number of shares of Common Stock which would
be issuable upon (A) exercise of the remaining, nonexercised portion of
such
holder’s Warrants beneficially owned by such holder or any of
its Affiliates and (B) exercise or conversion of the unexercised or nonconverted
portion of any other securities of the Company (including, without limitation,
any other Common Stock equivalents) subject to a
limitation on conversion or exercise analogous to the limitation contained
herein beneficially owned by such holder or any of its
Affiliates.  Except as set forth in the preceding sentence, for
purposes of this Section 6(e), beneficial ownership shall be
calculated in accordance with Section 13(d) of the Exchange Act and the rules
and regulations promulgated thereunder, it being acknowledged by such holder
that the Company is not representing to such holder that such calculation is in
compliance with Section 13(d) of the Exchange Act and such
holder is solely responsible for any schedules required to be filed in
accordance therewith.   To the extent that the limitation
contained in this Section 6(e) applies, the determination of whether
such holder’s Warrants are exercisable (in relation to other
securities owned by such holder together with any Affiliates) and of which
portion of such holder’s Warrants are exercisable shall be in the sole
discretion of such holder, and the submission of an Exercise Notice
shall be deemed to be such holder’s determination of
whether its Warrants are exercisable (in relation to other securities owned by
such holder together with any Affiliates) and of which portion of such
holder’s Warrants are exercisable, in each case subject
to the Beneficial Ownership Limitation, and the Company shall have no obligation
to verify or confirm the accuracy of such determination or any liability under
this Section 6(e).  In addition, a determination as to any
group status as contemplated above shall be determined in the sole
discretion of such holder in accordance with Section 13(d) of the Exchange Act
and the rules and regulations promulgated thereunder, and the acquisition by any
or all holders of the Common Stock and the Warrants and the
execution of this Agreement shall not, by itself, cause any such holders to be
considered a group for purposes of the Exchange Act.  For purposes of
determining the Beneficial Ownership Limitation, in determining the number of
outstanding shares of Common Stock, a holder may rely on the number of
outstanding shares of Common Stock as reflected in (x) the Company’s most recent
Annual Report on Form 10-K or Quarterly Report on Form 10-Q, or such similar
form, as the case may be, or (y) any other written notice by
the Company or the Company’s transfer agent setting forth the number of shares of
Common Stock outstanding.  In any case, the number of outstanding
shares of Common Stock shall be determined after giving effect to the conversion
or exercise of securities of the Company, including such
holder’s Warrants, by such holder or its Affiliates since the
date as of which such number of outstanding shares of Common Stock was
reported.  The “Beneficial
Ownership Limitation” shall be 9.999% of
the number of shares of the Common Stock outstanding immediately
after giving effect to the issuance of shares of Common Stock (net of the
effects of any Cashless Exercise) issuable upon exercise of such
holder’s Warrants.  Subject to the 20% Limitation (as
defined below), the Beneficial Ownership Limitation provisions
of this Section 6(e) may be waived by such holder, at the election of such
holder, upon not less than sixty-one (61) days’ prior notice to
the Company to waive the Beneficial Ownership
Limitation.  So long as the Beneficial Ownership Limitation has not
been waived by such holder, the shares of Common Stock underlying such
holder’s Warrants in excess of the Beneficial Ownership
Limitation shall not be deemed to be beneficially owned by such holder for
purposes of Section 16 of the Exchange
Act.  Notwithstanding anything contained herein to the contrary, in no
event may a holder have the right to exercise such holder’s Warrants (or
otherwise have the right to acquire capital stock of the Company as a
result
of holding Warrants or Warrant
Shares) to the extent (and only to the
extent) that, following such exercise or acquisition, such holder would own or
beneficially own 20% or more of the outstanding shares of Common Stock or would
otherwise cause such holder to be an
“Acquiring Person” (as defined under that certain Rights Agreement dated
September 1, 1999, as amended through the date hereof (the “Rights Agreement”),
by and between the Company and Computershare Trust Company, N.A.) after giving effect to such exercise or acquisition (the “20% Limitation”),
and any such exercise or acquisition in excess of the 20% Limitation or attempt
to so exercise or acquire shall be void ab initio.  Each holder of Warrants covenants that such
holder will not exercise such
holder’s Warrant in violation of the 20% Limitation and, in the
event any holder violates such covenant by so exercising or attempting to so
exercise its Warrants, such holder shall indemnify and hold the Company harmless
from and against any and all losses, damages,
costs, charges, counsel fees, payments, expenses and liability arising out of
such violation of such covenant.  The limitations contained in this
paragraph shall apply to a successor holder of Warrant
Certificates.

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

    

    Section
7.         Cancellation and Destruction
of Warrant Certificates.  All
Warrant Certificates surrendered for the purpose of exercise, transfer, split
up, combination or exchange shall, if surrendered to the Company or to any of
its agents, be delivered to the Warrant Agent for cancellation or in canceled
form, or, if surrendered to the Warrant Agent, shall be canceled by it, and no
Warrant Certificates shall be issued in lieu thereof except as expressly
permitted by any of the provisions of this Warrant Agreement.  The
Company shall deliver to the Warrant Agent for cancellation and retirement, and
the Warrant Agent shall so cancel and retire, any other Warrant Certificate
purchased or acquired by the Company otherwise than upon the exercise
thereof.  The Warrant Agent shall deliver all canceled Warrant
Certificates to the Company, or shall, at the written request of the Company,
destroy such canceled Warrant Certificates, and in such case shall deliver a
certificate of destruction thereof to the Company, subject to any applicable
law, rule or regulation requiring the Warrant Agent to retain such canceled
certificates.

     

    Section
8.         Certain Representations;
Reservation and Availability of Shares of Common Stock or
Cash.

     

    (a)          The
Company represents and warrants that this Agreement has been duly authorized,
executed and delivered by the Company and, assuming due authorization, execution
and delivery hereof by the Warrant Agent, constitutes a valid and legally
binding obligation of the Company enforceable against the Company in accordance
with its terms, and the Warrants and, when issued, the Warrant Shares, in each
case, are free and clear of all liens and encumbrances, are fully paid and
non-assessable and have been duly authorized, executed and issued by the Company
and, assuming due authentication of the Warrants by the Warrant Agent pursuant
hereto, constitute valid and legally binding obligations of the Company
enforceable against the Company in accordance with their terms and entitled to
the benefits hereof; in each case except as enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium and other similar laws
relating to or affecting creditors’ rights generally or by general equitable
principles (regardless of whether such enforceability is considered in a
proceeding in equity or at law).

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

    (b)          The
Company represents and warrants that, immediately prior to the consummation of
the offering described in the Registration Statement, the authorized capital
stock of the Company consists of (i) 75,000,000 shares of Common Stock, of which
9,216,209 shares of Common Stock are issued and outstanding, 2,070,000 shares of
Common Stock are reserved for issuance upon exercise of the Series A Warrants,
1,690,500 shares of Common Stock upon exercise of Series B Warrants and not more
than 827,004 shares of Common Stock are reserved for issuance upon exercise of
employee or other stock options and (ii) 5,000,000 shares of preferred stock,
$.001 par value per share, of which no shares are
outstanding.   The Company represents and warrants that the
shares of Common Stock issued to the holder under the Registration Statement,
when issued, were free and clear of all liens and encumbrances, fully paid and
non-assessable and were duly authorized by the Company.

     

    (c)          The
Company covenants and agrees that it will cause to be reserved and kept
available out of its authorized and unissued shares of Common Stock or its
authorized and issued shares of Common Stock held in its treasury, free from
preemptive rights, the number of shares of Common Stock that will be sufficient
to permit the exercise in full of all outstanding Warrants and all other
convertible securities, options and other instruments of the
Company.

    

    (d)          The
Company further covenants and agrees that it will pay when due and payable any
and all federal and state transfer taxes and charges which may be payable in
respect of the original issuance or delivery of the Warrant Certificates or
certificates evidencing Common Stock upon exercise of the
Warrants.  The Company shall not, however, be required to pay any tax
or governmental charge which may be payable in respect of any transfer involved
in the transfer or delivery of Warrant Certificates or the issuance or delivery
of certificates for Common Stock in a name other than that of the registered
holder of the Warrant Certificate evidencing Warrants surrendered for exercise
or to issue or deliver any such certificate for such shares of Common Stock to
such other person upon the exercise of any Warrants until any such tax or
governmental charge shall have been paid (any such tax or governmental charge
being payable by the holder of such Warrant Certificate at the time of
surrender) or until it has been established to the Company’s reasonable
satisfaction that no such tax or governmental charge is due.

     

    (e)          The
Company acknowledges that the bank accounts maintained by Computershare in
connection with the services provided under this Agreement will be in its name
and that Computershare may receive investment earnings in connection with the
investment at Computershare risk and for its benefit of the funds held in those
accounts from time to time.  Neither the Company nor the Holders will
receive interest on any deposits or Exercise Price payments.

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

    (f)           For
purposes of determining whether a holder is an “Acquiring Person” under the
Rights Agreement, the Company acknowledges, and the Company represents and
warrants that it has taken all necessary action, if any, to ensure, that, as a
result of the provisions of Section 6(e), holders shall not be deemed the
“Beneficial Owner” (as defined in the Rights Agreement) of such holder’s
Warrants (and shares of Common Stock issuable upon exercise thereof) to the
extent that such Warrants (and shares of Common Stock issuable upon exercise
thereof) would exceed the 20% Limitation.  The Company represents and
warrants that the Board of Directors of the Company has taken all necessary
action in order to ensure that, notwithstanding any holder becoming an
“interested person” under Delaware General Corporation Law Section 203 or other
similar anti-takeover provision under the Company’s certificate of incorporation
(or similar charter documents) or the laws of its state of incorporation that is
or could become applicable to the holders as a result of the execution and
delivery of this Agreement, such holder shall not be prohibited from exercising such holder’s Warrants (or
otherwise having the right to acquire capital stock of the Company as a result
of holding Warrants or Warrant
Shares), except to the extent that
exercising such Warrants or otherwise acquiring capital stock of the Company as
a result of holding Warrants or Warrant Shares would cause such holder to exceed
the 20% Limitation.

     

    Section
9.         Common Stock Record
Date.  Each
person in whose name any certificate for shares of Common Stock is issued upon
the exercise of Warrants shall for all purposes be deemed to have become the
holder of record for the Common Stock represented thereby on, and such
certificate shall be dated, the date upon which the Warrant Certificate
evidencing such Warrants was duly surrendered and payment of the Exercise Price
(and any applicable transfer taxes) was made; provided, however, that,
subject to Section 6(b) of this Agreement, if the date of such surrender and
payment is a date upon which the Common Stock transfer books of the Company are
closed, such person shall be deemed to have become the record holder of such
shares on, and such certificate shall be dated, the next succeeding day on which
the Common Stock transfer books of the Company are open.

     

    Section
10.       Adjustment of Exercise
Price, Number of Shares of Common Stock or Number of the Company
Warrants.  The
Exercise Price, the number of shares covered by each Warrant and the number of
Warrants outstanding are subject to adjustment from time to time as provided in
this Section 10.

     

    (a)          In
the event the Company shall at any time after the date of this Agreement
(i) declare a dividend on shares of Common Stock payable in shares of any
class of capital stock of the Company, (ii) subdivide the outstanding
shares of Common Stock into a greater number of shares of Common Stock,
(iii) combine the outstanding shares of Common Stock into a smaller number
of shares, or (iv) issue any shares of capital stock in a reclassification
of shares of the Common Stock (including any such reclassification in connection
with a consolidation or merger in which the Company is the continuing
corporation), the Exercise Price in effect at the time of the record date for
such dividend or distribution or of the effective date of such subdivision,
combination or reclassification, and the number and kind of shares of capital
stock issuable on such date, shall be proportionately adjusted so that the
holder of any Warrant exercised after such time shall be entitled to receive the
aggregate number and kind of shares of capital stock which, if such Warrant had
been exercised immediately prior to such date and at a time when the Common
Stock transfer books of the Company were open, such holder would have owned upon
such exercise and been entitled to receive by virtue of such dividend,
subdivision, combination or reclassification.

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

    (b)          In
the event the Company shall fix a record date for the issuance of rights,
options or warrants to all holders of Common Stock (such rights, options or
warrants not being available to holders of Warrants) entitling them (for a
period expiring within 45 calendar days after such date of issue) to subscribe
for or purchase Common Stock (or securities convertible into or exercisable or
exchangeable for Common Stock), at a price per share of Common Stock (or having
a conversion, exercise or exchange price per share of Common Stock, in the case
of a security convertible into or exercisable or exchangeable for Common Stock)
less than the Current Market Price per share of Common Stock on such record date
(or, if there has been no such determination, then the Company must promptly
cause such determination to be made as contemplated by the definition of
“Current Market Price” set forth herein, and any proposed record date must be
postponed until after such determination has been made), the Exercise Price to
be in effect after such record date shall be determined by multiplying the
Exercise Price in effect immediately prior to such record date by a fraction of
which the numerator shall be the number of shares of Common Stock outstanding on
such record date plus the number of shares of Common Stock which the aggregate
offering price of the total number of shares of Common Stock so to be offered
(or the aggregate initial conversion, exercise or exchange price of the
convertible, exercisable or exchangeable securities so to be offered) would
purchase at such Current Market Price and of which the denominator shall be the
number of shares of Common Stock outstanding on such record date plus the number
of additional shares of Common Stock to be offered for subscription or purchase
(or into which the convertible, exercisable or exchangeable securities so to be
offered are initially convertible, exercisable or exchangeable).  In
case such subscription price may be paid in a consideration part or all of which
shall be in a form other than cash, the value of such consideration shall be as
determined in good faith by the Board of Directors of the
Company.  Such adjustment shall be made successively whenever such a
record date is fixed, and in the event that such rights or warrants are not so
issued the Exercise Price shall be adjusted to be the Exercise Price which would
then be in effect if such record date had not been fixed. 

     

    (c)          In
the event the Company shall fix a record date for the making of a dividend or
distribution to all holders of Common Stock of any evidences of indebtedness or
assets or subscription rights or warrants (excluding those referred to in
Section 10(a) or (b) or other dividends paid out of retained earnings), the
Exercise Price to be in effect after such record date shall be determined by
multiplying the Exercise Price in effect immediately prior to such record date
by a fraction of which the numerator shall be the Current Market Price per share
of Common Stock on such record date, less the fair market value (as determined
in good faith by the Board of Directors of the Company) of such distribution
applicable to one share of Common Stock, and of which the denominator shall be
such Current Market Price per share of Common Stock.  Such adjustment
shall be made successively whenever such a record date is fixed, and in the
event that such distribution is not so made, the Exercise Price shall again be
adjusted to be the Exercise Price which would then be in effect if such record
date had not been fixed.

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

    (d)          In
the event the Company shall consummate a tender offer for or otherwise
repurchase or redeem Common Stock, to the extent that the cash and value of any
other consideration included in such payment per share of Common Stock exceeds
the Current Market Price per share of Common Stock on the trading day next
succeeding the Expiration Time (as defined below), unless the Company tenders
for the Warrants on terms which give effect to such excess consideration, the
Exercise Price shall be reduced so that the same shall equal the price
determined by multiplying the Exercise Price in effect immediately prior to the
last time tenders or repurchases or redemptions may be made pursuant to such
tender or repurchase or redemption (the “Expiration Time”) by a fraction of
which the numerator shall be the number of shares of Common Stock outstanding
(including any tendered, repurchased or redeemed shares) at the Expiration Time
multiplied by the Current Market Price per share of the Common Stock on the
trading day next succeeding the Expiration Time, and the denominator shall be
the sum of (A) the fair market value of the aggregate consideration payable
to shareholders based on the acceptance of all shares validly tendered,
repurchased or redeemed and not withdrawn as of the Expiration Time (the shares
deemed so accepted being referred to as the “Purchased Shares”) and (B) the
product of the number of shares of Common Stock outstanding (less any Purchased
Shares) at the Expiration Time and the Current Market Price per share of the
Common Stock on the trading day next succeeding the Expiration Time, such
reduction to become effective immediately prior to the opening of business on
the day following the Expiration Time.  For purposes of this
paragraph (d), the value of non cash-consideration shall be as determined
in good faith by the Board of Directors of the Company.

     

    (e)          Notwithstanding
the foregoing paragraphs (a), (b), (c) and (d), no adjustment in the
Exercise Price pursuant to such paragraphs shall be required unless such
adjustment would require an increase or decrease of at least 1% in such price;
provided, however, that any
adjustments which by reason of this Section 10(e) are not required to be
made shall be carried forward and taken into account in any subsequent
adjustment.  All calculations under this Section 10 shall be made
to the nearest cent or the nearest hundredth of a share, as the case may
be.

     

    (f)          In
the event that at any time, as a result of an adjustment made pursuant to
Section 10(a), the holder of any Warrant thereafter exercised shall become
entitled to receive any shares of capital stock of the Company other than shares
of Common Stock, thereafter the number of such other shares so receivable upon
exercise of any Warrant shall be subject to adjustment from time to time in a
manner and on terms as nearly equivalent as practicable to the provisions with
respect to the shares contained in Section 10(a), (b), (c) and (d), and the
provisions of Sections 6, 8, 9 and 12 with respect to the shares of Common
Stock shall apply on like terms to any such other shares.

     

    (g)          All
Warrants originally issued by the Company subsequent to any adjustment made to
the Exercise Price hereunder shall evidence the right to purchase, at the
adjusted Exercise Price, the number of shares of Common Stock purchasable from
time to time hereunder upon exercise of the Warrants, all subject to further
adjustment as provided herein.

     

    (h)          Unless
the Company shall have exercised its election as provided in Section 10(i),
upon each adjustment of the Exercise Price as a result of the calculations made
in Section 10(b), (c) and (d), each Warrant outstanding immediately prior
to the making of such adjustment shall thereafter evidence the right to
purchase, at the adjusted Exercise Price, that number of shares (calculated to
the nearest hundredth) obtained by (i) multiplying (x) the number of
shares covered by a Warrant immediately prior to such adjustment by (y) the
Exercise Price in effect immediately prior to such adjustment of the Exercise
Price and (ii) dividing the product so obtained by the Exercise Price in
effect immediately after such adjustment of the Exercise Price.

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

    (i)          The
Company may elect on or after the date of any adjustment of the Exercise Price
to adjust the number of Warrants, in substitution for any adjustment in the
number of shares of Common Stock purchasable upon the exercise of a
Warrant.  Each of the Warrants outstanding after such adjustment of
the number of Warrants shall be exercisable for one share of Common
Stock.  Each Warrant held of record prior to such adjustment of the
number of Warrants shall become that number of Warrants (calculated to the
nearest hundredth) obtained by dividing the Exercise Price in effect prior to
adjustment of the Exercise Price by the Exercise Price in effect after
adjustment of the Exercise Price.  The Company shall instruct the
Warrant Agent to notify each of the record holders of Warrants of its election
to adjust the number of Warrants, indicating the record date for the adjustment,
and, if known at the time, the amount of adjustment to be made.  Such
record date may be the date on which the Exercise Price is adjusted or any day
thereafter, but shall be at least 10 days later than the date of the public
announcement.  Upon each adjustment of the number of Warrants pursuant
to this Section 10(i), the Company shall instruct the Warrant Agent to
distribute, as promptly as practicable, to holders of record of Warrant
Certificates on such record date Warrant Certificates evidencing, subject to
Section 13, the additional Warrants to which such holders shall be entitled
as a result of such adjustment, or, at the option of the Company, instruct the
Warrant Agent to distribute to such holders of record in substitution and
replacement for the Warrant Certificates held by such holders prior to the date
of adjustment, and upon surrender thereof, if required by the Company, new
Warrant Certificates evidencing all the Warrants to which such holders shall be
entitled after such adjustment.  Warrant Certificates so to be
distributed shall be issued, executed and countersigned in the manner provided
for herein (and may bear, at the option of the Company, the adjusted Exercise
Price) and shall be registered in the names of the holders of record of Warrant
Certificates on the record date specified in the public
announcement.

     

    (j)          Irrespective
of any adjustment or change in the Exercise Price or the number of shares of
Common Stock issuable upon the exercise of the Warrants, the Warrant
Certificates theretofore and thereafter issued may continue to express the
Exercise Price per share and the number of shares which were expressed upon the
initial Warrant Certificates issued hereunder.

     

    (k)          The
Company agrees that it will not, by amendment of its Certificate of
Incorporation or through reorganization, consolidation, merger, dissolution or
sale of assets, or by any other voluntary act, avoid or seek to avoid the
observance or performance of any of the covenants, stipulations or conditions to
be observed or performed hereunder by the Company.  

     

    (l)          In
any case in which this Section 10 shall require that an adjustment in the
Exercise Price be made effective as of a record date for a specified event, if
any holder of a Warrant exercises such Warrant after such record date, the
Company may elect to defer, until the occurrence of such event, the issuance of
the shares of Common Stock and other capital stock of the Company in excess of
the shares of Common Stock and other capital stock of the Company, if any,
issuable upon such exercise on the basis of the Exercise Price in effect prior
to such adjustment; provided, however, that the
Company shall deliver to such holder a due bill or other appropriate instrument
evidencing such holder’s right to receive such additional shares and/or other
capital securities upon the occurrence of the event requiring such
adjustment.

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

    Section
11.       Certification of Adjusted
Exercise Price or Number of Shares of Common Stock.  Whenever
the Exercise Price or the number of shares of Common Stock issuable upon the
exercise of each Warrant is adjusted as provided in Section 10 or 12, the
Company shall (a) promptly prepare a certificate setting forth the Exercise
Price and number of shares of Common Stock issuable upon exercise of each
Warrant as so adjusted, and a brief statement of the facts accounting for such
adjustment, (b) promptly file with the Warrant Agent and with each transfer
agent for the Common Stock a copy of such certificate and (c) instruct the
Warrant Agent to mail a brief summary thereof to each holder of a Warrant
Certificate.

     

    Section
12.       Reclassification,
Consolidation, Purchase, Combination, Sale or Conveyance.  In
case any of the following shall occur while any Warrants are outstanding:
(i)  any reclassification of the Common Stock or any compulsory share
exchange pursuant to which the Common Stock is effectively converted into or
exchanged for other securities, cash or property, or (ii) any
consolidation, merger or combination of the Company with or into another
corporation as a result of which holders of Common Stock shall be entitled to
receive stock, securities or other property or assets (including cash) with
respect to or in exchange for such Common Stock, or (iii) any sale or
conveyance of the property or assets of the Company as, or substantially as, an
entirety to any other entity as a result of which holders of Common Stock shall
be entitled to receive stock, securities or other property or assets (including
cash) with respect to or in exchange for such Common Stock, then the Company, or
such successor corporation or transferee, as the case may be, shall make
appropriate provision by amendment of this Agreement or by the successor
corporation or transferee executing with the Warrant Agent an agreement so that
the holders of the Warrants then outstanding shall have the right at any time
thereafter, upon exercise of such Warrants (in lieu of the number of shares of
Common Stock theretofore deliverable) to receive the kind and amount of
securities, cash and other property receivable upon such reclassification,
change, consolidation, merger, combination, sale or conveyance as would be
received by a holder of the number of shares of Common Stock issuable upon
exercise of such Warrant immediately prior to such reclassification, change,
consolidation, merger, sale or conveyance.

     

    If the
holders of the Common Stock may elect from choices the kind or amount of
securities or cash receivable upon such reclassification, change, consolidation,
merger, combination, sale or conveyance, then for the purpose of this
Section 12 the kind and amount of securities or cash receivable upon such
reclassification, change, consolidation, merger, combination, sale or conveyance
shall be deemed to be the choice specified by the holder of the Warrant, which
specification shall be made by the holder of the Warrant by the later of
(A) 20 calendar days after the holder of the Warrant is provided with a
final version of all information required by law or regulation to be furnished
to holders of Common Stock concerning such choice, or if no
such  information is required, 20 days after the Company notified the
holder of the Warrant of all material facts concerning such specification and
(B) the last time at which holders of Common Stock are permitted to make
their specification known to the Company.  If the holder of the
Warrant fails to make any specification, the holder’s choice shall be deemed to
be whatever choice is made by a plurality of holders of Common Stock not
affiliated with the Company or any other party to the reclassification, change,
consolidation, merger, combination, sale or conveyance.  Such adjusted
Warrants shall provide for adjustments which, for events subsequent to the
effective date of such new Warrants, shall be as nearly equivalent as may be
practicable to the adjustments provided for in Section 10 and this
Section 12.  The above provisions of this Section 12 shall
similarly apply to successive reclassifications, changes, consolidations,
mergers, combinations, sales and conveyances of the kind described
above.

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

    The
Company shall instruct the Warrant Agent to mail by first class mail, postage
prepaid, to each registered holder of a Warrant, written notice of the execution
of any such amendment, supplement or agreement.  Any supplemented or
amended agreement entered into by the successor corporation or transferee shall
provide for adjustments, which shall be as nearly equivalent as may be
practicable to the adjustments provided for in Section 10 and this Section
12.  The Warrant Agent shall be under no responsibility to determine
the correctness of any provisions contained in such agreement relating either to
the kind or amount of securities or other property receivable upon exercise of
warrants or with respect to the method employed and provided therein for any
adjustments and shall be entitled to rely upon the provisions contained in any
such agreement.  The provisions of this Section 12 shall
similarly apply to successive reclassifications, changes, consolidations,
mergers, sales and conveyances of the kind described above.

     

    Section
13.       Fractional Shares of Common
Stock.

     

    (a)          The
Company shall not issue fractions of Warrants or distribute Warrant Certificates
which evidence fractional Warrants.  Whenever any fractional Warrant
would otherwise be required to be issued or distributed, the actual issuance or
distribution shall reflect a rounding of such fraction down to the nearest whole
Warrant.

     

    (b)          The
Company shall not issue fractions of shares of Common Stock upon exercise of
Warrants or distribute stock certificates which evidence fractional shares of
Common Stock.  Whenever any fraction of a share of Common Stock would
otherwise be required to be issued or distributed, the actual issuance or
distribution made shall reflect a rounding of such fraction down to the nearest
whole share.

     

    (c)          The
holder of a Warrant by the acceptance of the Warrant expressly waives his right
to receive any fractional Warrant or any fractional share of Common Stock upon
exercise of a Warrant.

     

    Section
14.       Agreement of Warrant
Certificate Holders.  Every
holder of a Warrant Certificate by accepting the same consents and agrees with
the Company and the Warrant Agent and with every other holder of a Warrant
Certificate that:

     

    (a)          the
Warrant Certificates are transferable only on the registry books of the Warrant
Agent if surrendered at the principal office of the Warrant Agent, duly endorsed
or accompanied by a proper instrument of transfer and any reasonable evidence of
authority that may be required by the Warrant Agent. Such evidence shall include
a signature guarantee from an eligible guarantor institution participating in a
signature guarantee program approved by the Securities Transfer Association;
and

    
      
         

      

      
        14

        
          

        

      

      
         

      

    

    (b)          the
Company and the Warrant Agent may deem and treat the person in whose name the
Warrant Certificate is registered as the absolute owner thereof and of the
Warrants evidenced thereby (notwithstanding any notations of ownership or
writing on the Warrant Certificates made by anyone other than the Company or the
Warrant Agent) for all purposes whatsoever, and neither the Company nor the
Warrant Agent shall be affected by any notice to the contrary.

     

    Section
15.       Warrant Certificate Holder
Not Deemed a Shareholder.  No
holder, as such, of any Warrant Certificate shall be entitled to vote, receive
dividends or distributions on, or be deemed for any purpose the holder of Common
Stock or any other securities of the Company which may at any time be issuable
on the exercise of the Warrants represented thereby, nor shall anything
contained herein or in any Warrant Certificate be construed to confer upon the
holder of any Warrant Certificate, as such, any of the rights of a shareholder
of the Company or any right to vote for the election of directors or upon any
matter submitted to shareholders at any meeting thereof, or to give or withhold
consent to any corporate action, or to receive notice of meetings or other
actions affecting shareholders, or to receive dividends or distributions or
subscription rights, or otherwise, until the Warrant or Warrants evidenced by
such Warrant Certificate shall have been exercised in accordance with the
provisions hereof

     

    Section
16.       Concerning the Warrant
Agent.

     

    (a)          The
Company agrees to pay to the Warrant Agent reasonable compensation for all
services rendered by it hereunder and, from time to time, on demand of the
Warrant Agent, its reasonable expenses and counsel fees and other disbursements
incurred in the administration and execution of this Agreement and the exercise
and performance of its duties hereunder.

     

    (b)          The
Company covenants and agrees to indemnify and to hold the Warrant Agent harmless
against any costs, expenses (including reasonable fees of its legal counsel),
losses or damages, which may be paid, incurred or suffered by or to which it may
become subject, arising from or out of, directly or indirectly, any claims or
liability resulting from its actions as Warrant Agent pursuant hereto; provided,
that such covenant and agreement does not extend to, and the Warrant Agent shall
not be indemnified with respect to, such costs, expenses, losses and damages
incurred or suffered by the Warrant Agent as a result of, or arising out of, its
gross negligence, bad faith, or willful misconduct.

     

    (c)          Promptly
after the receipt by the Warrant Agent of notice of any demand or claim or the
commencement of any action, suit, proceeding or investigation, the Warrant Agent
shall, if a claim in respect thereof is to be made against the Company, notify
the Company thereof in writing.   The Company shall be entitled
to participate at its own expense in the defense of any such claim or
proceeding, and, if it so elects at any time after receipt of such notice, it
may assume the defense of any suit brought to enforce any such claim or of any
other legal action or proceeding. For the purposes of this Section 16, the term
“expense or loss” means any amount paid or payable to satisfy any claim, demand,
action, suit or proceeding settled with the express written consent of the
Warrant Agent, and all reasonable costs and expenses, including, but not limited
to, reasonable counsel fees and disbursements, paid or incurred in investigating
or defending against any such claim, demand, action, suit, proceeding or
investigation.

    
      
         

      

      
        15

        
          

        

      

      
         

      

    

    (d)          The
Warrant Agent shall be responsible for and shall indemnify and hold the Company
harmless from and against any and all losses, damages, costs, charges, counsel
fees, payments, expenses and liability arising out of or attributable to the
Warrant Agent’s refusal or failure to comply with the terms of this Agreement,
or which arise out of Warrant Agent’s negligence or willful misconduct or which
arise out of the breach of any representation or warranty of the Warrant Agent
hereunder, for which the Warrant Agent is not entitled to indemnification under
this Agreement; provided, however, that Warrant Agent’s aggregate liability
during any term of this Agreement with respect to, arising from, or arising in
connection  with  this  Agreement, or from all
services provided or omitted to be provided under this Agreement, whether in
contract, or in tort, or otherwise, is limited to, and shall not exceed, the
amounts paid under this Agreement by the Company to Warrant Agent as fees and
charges, but not including reimbursable expenses.

     

    (e)          Promptly
after the receipt by the Company of notice of any demand or claim or the
commencement of any action, suit, proceeding or investigation, the Company
shall, if a claim in respect thereof is to be made against the Warrant Agent,
notify the Warrant Agent thereof in writing.  The Warrant Agent shall
be entitled to participate at its own expense in the defense of any such claim
or proceeding, and, if it so elects at any time after receipt of such notice, it
may assume the defense of any suit brought to enforce any such claim or of any
other legal action or proceeding.  For the purposes of this Section
16, the term “expense or loss” means any amount paid or payable to satisfy any
claim, demand, action, suit or proceeding settled with the express written
consent of the Company, and all reasonable costs and expenses, including, but
not limited to, reasonable counsel fees and disbursements, paid or incurred in
investigating or defending against any such claim, demand, action, suit,
proceeding or investigation.

     

    (f)          Neither
party to this Agreement shall be liable to the other party for any
consequential, indirect, special or incidental damages under any provision of
this Agreement or for any consequential, indirect, penal, special or incidental
damages arising out of any act or failure to act hereunder even if that party
has been advised of or has foreseen the possibility of such
damages.

     

    Section
17.       Purchase or Consolidation or
Change of Name of Warrant Agent.  Any
corporation into which the Warrant Agent or any successor Warrant Agent may be
merged or with which it may be consolidated, or any corporation resulting from
any merger or consolidation to which the Warrant Agent or any successor Warrant
Agent shall be party, or any corporation succeeding to the corporate trust
business of the Warrant Agent or any successor Warrant Agent, shall be the
successor to the Warrant Agent under this Agreement without the execution or
filing of any paper or any further act on the part of any of the parties hereto,
provided that such corporation would be eligible for appointment as a successor
Warrant Agent under the provisions of Section 19.  In case at the
time such successor Warrant Agent shall succeed to the agency created by this
Agreement any of the Warrant Certificates shall have been countersigned but not
delivered, any such successor Warrant Agent may adopt the countersignature of
the predecessor Warrant Agent and deliver such Warrant Certificates so
countersigned; and in case at that time any of the Warrant Certificates shall
not have been countersigned, any successor Warrant Agent may countersign such
Warrant Certificates either in the name of the predecessor Warrant Agent or in
the name of the successor Warrant Agent; and in all such cases such Warrant
Certificates shall have the full force provided in the Warrant Certificates and
in this Agreement.

    
      
         

      

      
        16

        
          

        

      

      
         

      

    

    In case
at any time the name of the Warrant Agent shall be changed and at such time any
of the Warrant Certificates shall have been countersigned but not delivered, the
Warrant Agent may adopt the countersignature under its prior name and deliver
Warrant Certificates so countersigned; and in case at that time any of the
Warrant Certificates shall not have been countersigned, the Warrant Agent may
countersign such Warrant Certificates either in its prior name or in its changed
name; and in all such cases such Warrant Certificates shall have the full force
provided in the Warrant Certificates and in this Agreement.

     

    Section
18.       Duties of Warrant
Agent.  The
Warrant Agent undertakes the duties and obligations imposed by this Agreement
upon the following terms and conditions, by all of which the Company and the
holders of Warrant Certificate, by their acceptance thereof, shall be
bound:

     

    (a)          The
Warrant Agent may consult with legal counsel (who may be legal counsel for the
Company), and the opinion of such counsel shall be full and complete
authorization and protection to the Warrant Agent as to any action taken or
omitted by it in good faith and in accordance with such opinion.

     

    (b)          Whenever
in the performance of its duties under this Agreement the Warrant Agent shall
deem it necessary or desirable that any fact or matter be proved or established
by the Company prior to taking or suffering any action hereunder, such fact or
matter (unless other evidence in respect thereof be herein specifically
prescribed) may be deemed to be conclusively proved and established by a
certificate signed by the Chairman, President or any Vice President of the
Company and by the Treasurer or any Assistant Treasurer or the Secretary of the
Company and delivered to the Warrant Agent; and such certificate shall be full
authentication to the Warrant Agent for any action taken or suffered in good
faith by it under the provisions of this Agreement in reliance upon such
certificate.

     

    (c)          The
Warrant Agent shall be liable hereunder only for its own gross negligence, bad
faith or willful misconduct, pursuant to Section 16, above.

     

    (d)          The
Warrant Agent shall not be liable for or by reason of any of the statements of
fact or recitals contained in this Agreement or in the Warrant Certificates
(except its countersignature thereof) or be required to verify the same, but all
such statements and recitals are and shall be deemed to have been made by the
Company only.

     

    (e)          The
Warrant Agent shall not be under any responsibility in respect of the validity
of this Agreement or the execution and delivery hereof (except the due execution
hereof by the Warrant Agent) or in respect of the validity or execution of any
Warrant Certificate (except its countersignature thereof); nor shall it be
responsible for any breach by the Company of any covenant or condition contained
in this Agreement or in any Warrant Certificate; nor shall it be responsible for
the adjustment of the Exercise Price or the making of any change in the number
of shares of Common Stock required under the provisions of Sections 10 or
12 or responsible for the manner, method or amount of any such change or the
ascertaining of the existence of facts that would require any such adjustment or
change (except with respect to the exercise of Warrants evidenced by Warrant
Certificates after actual notice of any adjustment of the Exercise Price); nor
shall it by any act hereunder be deemed to make any representation or warranty
as to the authorization or reservation of any shares of Common Stock to be
issued pursuant to this Agreement or any Warrant Certificate or as to whether
any shares of Common Stock will, when issued, be duly authorized, validly
issued, fully paid and nonassessable.

    
      
         

      

      
        17

        
          

        

      

      
         

      

    

    (f)          The
Company agrees that it will perform, execute, acknowledge and deliver or cause
to be performed, executed, acknowledged and delivered all such further and other
acts, instruments and assurances as may reasonably be required by the Warrant
Agent for the carrying out or performing by the Warrant Agent of the provisions
of this Agreement.

     

    (g)          The
Warrant Agent is hereby authorized to accept instructions with respect to the
performance of its duties hereunder from the Chairman or the President or any
Vice President or the Secretary of the Company, and to apply to such officers
for advice or instructions in connection with its duties, and it shall not be
liable and shall be indemnified and held harmless for any action taken or
suffered to be taken by it in good faith in accordance with instructions of any
such officer, provided Warrant Agent carries out such instructions without gross
negligence, bad faith or willful misconduct.

     

    (h)          The
Warrant Agent and any shareholder, director, officer or employee of the Warrant
Agent may buy, sell or deal in any of the Warrants or other securities of the
Company or become pecuniarily interested in any transaction in which the Company
may be interested, or contract with or lend money to the Company or otherwise
act as fully and freely as though it were not Warrant Agent under this
Agreement.  Nothing herein shall preclude the Warrant Agent from
acting in any other capacity for the Company or for any other legal
entity.

     

    (i)          The
Warrant Agent may execute and exercise any of the rights or powers hereby vested
in it or perform any duty hereunder either itself or by or through its attorney
or agents, and the Warrant Agent shall not be answerable or accountable for any
act, default, neglect or misconduct of any such attorney or agents or for any
loss to the Company resulting from any such act, default, neglect or misconduct,
provided reasonable care was exercised in the selection and continued employment
thereof.

    
      
         

      

      
        18

        
          

        

      

      
         

      

    

    Section
19.       Change of Warrant
Agent.  The
Warrant Agent may resign and be discharged from its duties under this Agreement
upon 30 days’ notice in writing mailed to the Company and to each transfer agent
of the Common Stock by registered or certified mail, and to the holders of the
Warrant Certificates by first-class mail.  The Company may remove the
Warrant Agent or any successor Warrant Agent upon 30 days’ notice in writing,
mailed to the Warrant Agent or successor Warrant Agent, as the case may be, and
to each transfer agent of the Common Stock by registered or certified mail, and
to the holders of the Warrant Certificates by first-class mail.  If
the Warrant Agent shall resign or be removed or shall otherwise become incapable
of acting, the Company shall appoint a successor to the Warrant
Agent.  If the Company shall fail to make such appointment within a
period of 30 days after such removal or after it has been notified in writing of
such resignation or incapacity by the resigning or incapacitated Warrant Agent
or by the holder of a Warrant Certificate (who shall, with such notice, submit
his Warrant Certificate for inspection by the Company), then the registered
holder of any Warrant Certificate may apply to any court of competent
jurisdiction for the appointment of a new Warrant Agent.  Any
successor Warrant Agent, whether appointed by the Company or by such a court,
shall be a corporation organized and doing business under the laws of the United
States or of a state thereof, in good standing, which is authorized under such
laws to exercise corporate trust powers and is subject to supervision or
examination by federal or state authority and which has at the time of its
appointment as Warrant Agent a combined capital and surplus of at least
$50,000,000.  After appointment, the successor Warrant Agent shall be
vested with the same powers, rights, duties and responsibilities as if it had
been originally named as Warrant Agent without further act or deed; but the
predecessor Warrant Agent shall deliver and transfer to the successor Warrant
Agent any property at the time held by it hereunder, and execute and deliver any
further assurance, conveyance, act or deed necessary for the
purpose.  Not later than the effective date of any such appointment,
the Company shall file notice thereof in writing with the predecessor Warrant
Agent and each transfer agent of the Common Stock, and mail a notice thereof in
writing to the registered holders of the Warrant
Certificates.  However, failure to give any notice provided for in
this Section 19, or any defect therein, shall not affect the legality or
validity of the resignation or removal of the Warrant Agent or the appointment
of the successor Warrant Agent, as the case may be.

     

    Section
20.       Issuance of New Warrant
Certificates.  Notwithstanding
any of the provisions of this Agreement or of the Warrants to the contrary, the
Company may, at its option, issue new Warrant Certificates evidencing Warrants
in such form as may be approved by its Board of Directors to reflect any
adjustment or change in the Exercise Price per share and the number or kind or
class of shares of stock or other securities or property purchasable under the
several Warrant Certificates made in accordance with the provisions of this
Agreement.

     

    Section
21.       Covenants.

     

    (a)          For
so long as any of the Warrants remain outstanding, the Company shall use its
best efforts to maintain the effectiveness of the Registration Statement for the
issuance thereunder of the Warrant Shares.  If at any time following
the date hereof the Registration Statement is not effective or is not otherwise
available for the issuance of the Warrant Shares, the Company shall immediately
notify the holders of the Warrants in writing that the Registration Statement is
not then effective and thereafter shall promptly notify such holders when the
Registration Statement is effective again and available for the issuance of the
Warrant Shares.

     

    (b)          During
the period from the Effective Date until the date on which no Warrants are
outstanding, the Company shall timely file all reports required to be filed with
the SEC pursuant to the Exchange Act, and the Company shall not terminate its
status as an issuer required to file reports under the Exchange Act even if the
Exchange Act or the rules and regulations thereunder would no longer require or
otherwise permit such termination.

    
      
         

      

      
        19

        
          

        

      

      
         

      

    

    (c)          So
long as any Warrants remain outstanding, the Company shall use its reasonable
best efforts to at all times have authorized, and reserved for the purpose of
issuance, no less than 100% of the maximum number of shares of Common Stock
issuable upon exercise of all the Warrants (without regard to any limitations on
the exercise of the Warrants set forth therein), less the number of Warrant
Shares represented by any such Warrants that have been exercised, and all other
convertible securities, options and other instruments of the
Company.

     

    Section
22.       Notices.  Notices
or demands authorized by this Agreement to be given or made (i) by the
Warrant Agent or by the holder of any Warrant Certificate to or on the Company,
(ii) subject to the provisions of Section 19, by the Company or by the
holder of any Warrant Certificate to or on the Warrant Agent or (iii) by
the Company or the Warrant Agent to the holder of any Warrant Certificate, shall
be deemed given (x) on the date delivered, if delivered personally,
(y) on the first Business Day following the deposit thereof with Federal
Express or another recognized overnight courier, if sent by Federal Express or
another recognized overnight courier, and (z) on the fourth Business Day
following the mailing thereof with postage prepaid, if mailed by registered or
certified mail (return receipt requested), in each case to the parties at the
following addresses (or at such other address for a party as shall be specified
by like notice):

     

    (a)          If
to the Company, to:

     

    Repros
Therapeutics, Inc.

    2408
Timberloch Place. B-7

    The
Woodlands, Texas 77380

    Attention:
Joseph S. Podolski

    Telecopy:
(281) 719-3446

     

    (b)          If
to the Warrant Agent, to:

     

    Computershare
Trust Company, N.A.

    250
Royall Street

    Canton,
Massachusetts 02021

    Attention:
Client Administration

    Telecopy:  (781)
575-2549

     

    (c)          If
to the holder of any Warrant Certificate, to the address of such holder as shown
on the registry books of the Company.  Any notice required to be
delivered by the Company to the registered holder of any Warrant may be given by
the Warrant Agent on behalf of the Company.

    
      
         

      

      
        20

        
          

        

      

      
         

      

    

    Section
23.       Supplements and
Amendments.

     

    (a)          The
Company and the Warrant Agent may from time to time supplement or amend this
Agreement without the approval of any holders of Warrant Certificates in order
to cure any ambiguity, to correct or supplement any provision contained herein
which may be defective or inconsistent with any other provisions herein, or to
make any other provisions with regard to matters or questions arising hereunder
which the Company and the Warrant Agent may deem necessary or desirable and
which shall not adversely affect the interests of the holders of Warrant
Certificates.

     

    (b)          In
addition to the foregoing, with the consent of holders of Warrants entitled,
upon exercise thereof, to receive not less than 66 2/3% of the shares of Common
Stock issuable thereunder, the Company and the Warrant Agent may modify this
Agreement for the purpose of adding any provisions to or changing in any manner
or eliminating any of the provisions of this Warrant Agreement or modifying in
any manner the rights of the holders of the Warrant Certificates; provided, however, that no
modification of the terms (including but not limited to the adjustments
described in Section 10) upon which the Warrants are exercisable or
reducing the percentage required for consent to modification of this Agreement
may be made without the consent of the holder of each outstanding Warrant
Certificate affected thereby.

     

    Section
24.       Successors.  All
covenants and provisions of this Agreement by or for the benefit of the Company
or the Warrant Agent shall bind and inure to the benefit of their respective
successors and assigns hereunder.

     

    Section
25.       Benefits of this
Agreement .  Nothing
in this Agreement shall be construed to give any Person, other than the Company,
the Warrant Agent and the registered holders of the Warrant Certificates, any
legal or equitable right, remedy or claim under this Agreement; but this
Agreement shall be for the sole and exclusive benefit of the Company, the
Warrant Agent and the registered holders of the Warrant
Certificates.

     

    Section
26.       Governing
Law.  This
Agreement and each Warrant Certificate issued hereunder shall be governed by,
and construed in accordance with, the laws of New York without giving effect to
the conflicts of law principles thereof.

     

    Section
27.       Counterparts.  This
Agreement may be executed in any number of counterparts and each of such
counterparts shall for all purposes be deemed to be an original, and all such
counterparts shall together constitute but one and the same
instrument.

     

    Section
28.       Captions.  The
captions of the sections of this Agreement have been inserted for convenience
only and shall not control or affect the meaning or construction of any of the
provisions hereof.

     

    Section 29.       Information.  The
Company agrees to promptly provide the registered holders of the Warrants the
information it is required to provide to the holders of the Common
Stock.

     

    Section
30.       Force
Majeure.  Notwithstanding
anything to the contrary contained herein, Warrant Agent shall not be liable for
any delays or failures in performance resulting from acts beyond its reasonable
control including, without limitation, acts of God, terrorist acts, shortage of
supply, breakdowns or malfunctions, interruptions or malfunction of computer
facilities, or loss of data due to power failures or mechanical difficulties
with information storage or retrieval systems, labor difficulties, war, or civil
unrest.

    
      
         

      

      
        21

        
          

        

      

      
         

      

    

    Section
31.       Confidentiality.

     

    The
Warrant Agent (or Co-Warrant Agent, if any) and the Company agree that all
books, records, information and data pertaining to the business of the other
party, including inter alia, personal, non-public  warrant holder
information, which are exchanged or received pursuant to the negotiation or the
carrying out of this Agreement including the fees for services set forth in the
attached schedule shall remain confidential, and shall not be voluntarily
disclosed to any other person, except as may be required by law.

     

    [Remainder
of Page Intentionally Left Blank]

    
      
         

      

      
        22

        
          

        

      

      
         

      

    

    IN
WITNESS WHEREOF, the parties hereto have caused this Series A Warrant Agreement
to be duly executed as of the day and year first above written.

     

    
      
        
          
            
              	 
      	
                      REPROS
      THERAPEUTICS INC.

                    
	 
      	 
      	 
      
	 
      	
                      By:

                    	
                      /s/ Joseph S. Podolski

                    
	 
      	 
      	
                      Name:
      Joseph S. Podolski

                    
	 
      	 
      	
                      Title:  President
      and Chief Executive Officer

                    
	 
      	 
      	 
      
	 
      	
                      COMPUTERSHARE
      TRUST COMPANY, N.A.

                    
	 
      	 
      
	 
      	
                      By:

                    	
                      /s/ Thomas Borbely

                    
	 
      	 
      	
                      Name:
      Thomas Borbely

                    
	 
      	 
      	
                      Title:
      Manager, Corporate Actions

                    
	 
      	 
      	 
      
	 
      	
                      COMPUTERSHARE
      INC.

                    
	 
      	 
      	 
      
	 
      	
                      By:

                    	
                      /s/ Thomas Borbely

                    
	 
      	 
      	
                      Name:
      Thomas Borbely

                    
	 
      	 
      	
                      Title:
      Manager, Corporate
Actions

                    

            

          

        

      

    

    
      
         

      

      
        23

        
          

        

      

      
         

      

    

    
      
        

Company

    

    
       

      and

       

      Computershare
Trust Company, N.A.,

       

      Warrant
Agent

       

      
        
 

    

    Series A
Warrant Agreement

     

    Dated as
of February 8, 2011

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    TABLE OF
CONTENTS

     

    
      
        
          
            
              
                	 
      	 
      	 	
                        Page

                      
	 
      	 
      	 	 
      
	
                        Section
      1.

                      	
                        Certain
      Definitions

                      	 	
                        1

                      
	 
      	 
      	 	 
      
	
                        Section
      2.

                      	
                        Appointment
      of Warrant Agent

                      	 	
                        2

                      
	 
      	 
      	 	 
      
	
                        Section
      3.

                      	
                        Form
      of Warrant Certificates

                      	 	
                        2

                      
	 
      	 
      	 	 
      
	
                        Section
      4.

                      	
                        Countersignature
      and Registration

                      	 	
                        2

                      
	 
      	 
      	 	 
      
	
                        Section
      5.

                      	
                        Transfer,
      Split Up, Combination and Exchange of Warrant Certificates; Mutilated,
      Destroyed, Lost or Stolen Warrant Certificates

                      	 	
                        3

                      
	 
      	 
      	 	 
      
	
                        Section
      6.

                      	
                        Exercise
      of Warrants; Exercise Price; Expiration Date

                      	 	
                        4

                      
	 
      	 
      	 	 
      
	
                        Section
      7.

                      	
                        Cancellation
      and Destruction of Warrant Certificates

                      	 	
                        7

                      
	 
      	 
      	 	 
      
	
                        Section
      8.

                      	
                        Certain
      Representations; Reservation and Availability of Shares of Common Stock or
      Cash

                      	 	
                        7

                      
	 
      	 
      	 	 
      
	
                        Section
      9.

                      	
                        Common
      Stock Record Date

                      	 	
                        9

                      
	 
      	 
      	 	 
      
	
                        Section
      10.

                      	
                        Adjustment
      of Exercise Price, Number of Shares of Common Stock or Number of the
      Company Warrants

                      	 	
                        9

                      
	 
      	 
      	 	
                         
      

                      
	
                        Section
      11.

                      	
                        Certification
      of Adjusted Exercise Price or Number of Shares of Common
    Stock

                      	 	
                        13

                      
	 
      	 
      	 	 
      
	
                        Section
      12.

                      	
                        Reclassification,
      Consolidation, Purchase, Combination, Sale or Conveyance

                      	 	
                        13

                      
	 
      	 
      	 	 
      
	
                        Section
      13.

                      	
                        Fractional
      Shares of Common Stock.

                      	 	
                        14

                      
	 
      	 
      	 	 
      
	
                        Section
      14.

                      	
                        Agreement
      of Warrant Certificate Holders

                      	 	
                        14

                      
	 
      	 
      	 	 
      
	
                        Section
      15.

                      	
                        Warrant
      Certificate Holder Not Deemed a Shareholder

                      	 	
                        15

                      
	 
      	 
      	 	 
      
	
                        Section
      16.

                      	
                        Concerning
      the Warrant Agent.

                      	 	
                        15

                      
	 
      	 
      	 	 
      
	
                        Section
      17.

                      	
                        Purchase
      or Consolidation or Change of Name of Warrant Agent

                      	 	
                        16

                      
	 
      	 
      	 	 
      
	
                        Section
      18.

                      	
                        Duties
      of Warrant Agent

                      	 	
                        17

                      
	 
      	 
      	 	 
      
	
                        Section
      19.

                      	
                        Change
      of Warrant Agent

                      	 	
                        19

                      

              

            

          

        

      

    

    
      
         

      

      
        i

        
          

        

      

      
         

      

    

    

    
      
        
          
            	 
      	 
      	 	
                    Page

                  
	 
      	 
      	 	 
      
	
                    Section
      20.

                  	
                    Issuance
      of New Warrant Certificates

                  	 	
                    19

                  
	 
      	 
      	 	 
      
	
                    Section
      21.

                  	
                    Covenants.

                  	 	
                    19

                  
	 
      	 
      	 	 
      
	
                    Section
      22.

                  	
                    Notices

                  	 	
                    20

                  
	 
      	 
      	 	 
      
	
                    Section
      23.

                  	
                    Supplements
      and Amendments

                  	 	
                    21

                  
	 
      	 
      	 	 
      
	
                    Section
      24.

                  	
                    Successors

                  	 	
                    21

                  
	 
      	 
      	 	 
      
	
                    Section
      25.

                  	
                    Benefits
      of this Agreement

                  	 	
                    21

                  
	 
      	 
      	 	 
      
	
                    Section
      26.

                  	
                    Governing
      Law

                  	 	
                    21

                  
	 
      	 
      	 	 
      
	
                    Section
      27.

                  	
                    Counterparts

                  	 	
                    21

                  
	 
      	 
      	 	 
      
	
                    Section
      28.

                  	
                    Captions

                  	 	
                    21

                  
	 
      	 
      	 	 
      
	
                    Section
      29.

                  	
                    Information

                  	 	
                    21

                  
	 
      	 
      	 	 
      
	
                    Section
      30.

                  	
                    Force
      Majeure

                  	 	
                    21

                  

          

        

      

    

    
      
         

      

      
        ii

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00184-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00184-of-00352.parquet"}]]