Document:

Unassociated Document

    Exhibit
10.3

     

    [Insert
Name and Address]

    

    

    Dear
[Insert Name],

    

    Provident Community Bancshares, Inc.
(the “Company”)
anticipates entering into a letter agreement (“Agreement”) with the United
States Department of the Treasury (“Treasury”) that provides for
the Company’s participation in the Treasury’s Capital Purchase Program (the
“CPP”).  If
the Company does not participate in the CPP, this letter shall be of no further
force and effect.

    

    For the Company to participate in the
CPP and as a condition to the closing of the investment contemplated by the
Agreement, the Company is required to meet specified standards for incentive
compensation to its senior executive officers and to make changes to its
compensation arrangements. To comply with these requirements, and in
consideration of the benefits that you will receive as a result of the Company’s
participation in the CPP, you agree as follows:

    

    (1)           No Golden Parachute Payments.
The Company shall not make any golden parachute payment to you during any period
during which (A) you are a senior executive officer and (B) Treasury
holds an equity or debt position acquired from the Company in the CPP (a “CPP Covered
Period”).

    

    (2)           Recovery of Bonus and Incentive
Compensation. Any bonus and incentive compensation paid to you during a
CPP Covered Period is subject to recovery or “clawback” by the Company if the
payments were based on materially inaccurate financial statements or any other
materially inaccurate performance metric criteria.

    

    (3)           Compensation Program Amendments.
Each of the Company’s compensation, bonus, incentive and other benefit
plans, arrangements and agreements (including golden parachute, severance and
employment agreements) (collectively, “Benefit Plans”) with respect to you
is hereby amended to the extent necessary to give effect to provisions
(1) and (2). For reference, certain affected Benefit Plans are set forth in
Appendix A to
this letter. If the payments and benefits provided under the Benefit Plans would
exceed the golden parachute limitations of the CPP, the payments and benefits
shall be reduced or revised, in the manner determined by you (subject to the
next sentence), by the amount, if any, which is the minimum necessary to result
in no portion of the payments and benefits exceeding the
limitations.  The Company, at its expense, will determine the extent
of any reduction in the payments and benefits to be made pursuant to this
letter.  In addition, the Company is required to review its Benefit
Plans to ensure that they do not encourage senior executive officers to take
unnecessary and excessive risks that threaten the value of the Company. To the
extent any such review requires revisions to any Benefit Plan with respect to
you, you and the Company agree to negotiate such changes promptly and in good
faith.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (4)           Definitions and
Interpretation. This letter shall be interpreted as follows:

     

    (i)           “Senior
executive officer” means the Company’s “senior executive officers” as defined in
subsection 111(b)(3) of EESA and 31 C.F.R. § 30.2.

     

    (ii)           “Golden
parachute payment” has the meaning given to such term in
Section 111(b)(2)(C) of EESA and 31 C.F.R. § 30.9.

    

    (iii)           “EESA”
means the Emergency Economic Stabilization Act of 2008.

     

    (iv)           The
term “Company” includes any entities treated as a single employer with the
Company under 31 C.F.R. § 30.1(b).  You are also delivering a waiver
pursuant to the Agreement, and, as between the Company and you, the term
“employer” in that waiver will be deemed to mean the Company as used in this
letter.

     

    (v)           The
term “CPP Covered Period” shall be limited by, and interpreted in a manner
consistent with, 31 C.F.R. § 30.11.

     

    (vi)           Provisions
(1) and (2) of this letter are intended to, and will be interpreted,
administered and construed to, comply with Section 111 of EESA (and, to the
maximum extent consistent with the preceding, to permit operation of the Benefit
Plans in accordance with their terms before giving effect to this
letter).

     

    (5)           Miscellaneous. To the extent
not subject to federal law, this letter will be governed by and construed in
accordance with the laws of Delaware. This letter may be executed in two or more
counterparts, each of which will be deemed to be an original. A signature
transmitted by facsimile will be deemed an original signature.

                 

    
      
        
          	 
      	
                  Yours
      sincerely,

                
	 
      	 
      
	 
      	
                  PROVIDENT
      COMMUNITY BANCSHARES, INC.

                
	 
      	 
      
	 
      	 
      
	 
      	__________________________________________
	 
      	
                  Name:

                
	 
      	
                  Title:

                

        

      

    

    

    Intending
to be legally bound, I agree with and accept the foregoing terms on the date set
forth below.

    

    ___________________________________

    [Insert
Name]

    

    Date:_______________________________STANDBY EQUITY DISTRIBUTION
AGREEMENT

    

    THIS AGREEMENT dated as of the
12 day of March 2009 (this “Agreement”) between
YA GLOBAL MASTER SPV
LTD., a Cayman Islands exempt limited partnership (the “Investor”), and JAG MEDIA HOLDINGS, INC., a
corporation organized and existing under the laws of the State of Nevada (the
“Company”).

    

    WHEREAS, the parties desire
that, upon the terms and subject to the conditions contained herein, the Company
shall issue and sell to the Investor, from time to time as provided herein, and
the Investor shall purchase from the Company up to $5,000,000 of the Company’s
common stock, par value $0.00001 per share (the “Common Stock”);
and

    

    WHEREAS, such investments will
be made in reliance upon the provisions of Regulation D (“Regulation D”) of the
Securities Act of 1933, as amended, and the regulations promulgated thereunder
(the “Securities
Act”), and or upon such other exemption from the registration
requirements of the Securities Act as may be available with respect to any or
all of the investments to be made hereunder.

    

    NOW, THEREFORE, the parties hereto
agree as follows:

    

    

    Article
I. Certain Definitions

    

    Section
1.01  “Acquisition” shall
have the meaning set forth in Section 12.04.

    

    Section
1.02  “Advance” shall mean
the portion of the Commitment Amount requested by the Company in the Advance
Notice.

    

    Section
1.03  “Advance
Date” shall mean the 1st Trading
Day after expiration of the applicable Pricing Period for each
Advance.

    

    Section
1.04  “Advance
Notice” shall mean a written notice in the form of Exhibit A attached
hereto to the Investor executed by an officer of the Company and setting forth
the Advance amount that the Company requests from the Investor.

    

    Section
1.05  “Advance
Notice Date” shall mean each date the Company delivers (in accordance
with Section 2.02(b) of this Agreement) to the Investor an Advance Notice
requiring the Investor to advance funds to the Company, subject to the terms of
this Agreement.  No Advance Notice Date shall be less than 5 Trading
Days after the prior Advance Notice Date.

    

    Section
1.06  “Affiliate” shall have
the meaning set forth in Section 3.09.

    

    Section
1.07  “By-laws” shall have
the meaning set forth in Section 4.03.

    

    Section
1.08  “Certificate of
Incorporation” shall have the meaning set forth in Section
4.03.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Section
1.09  “Closing” shall mean
one of the closings of a purchase and sale of Common Stock pursuant to Section
2.03.

    

    Section
1.10  “Commitment
Amount” shall mean the aggregate amount of up to $5,000,000 which the
Investor has agreed to provide to the Company in order to purchase the Company’s
Common Stock pursuant to the terms and conditions of this
Agreement.

    

    Section
1.11  “Commitment
Period” shall mean the period commencing on the Effective Date, and
expiring upon the termination of this Agreement in accordance with Section
10.02.

    

    Section
1.12  “Common
Stock” shall have the meaning set forth in the recitals of this
Agreement.

    

    Section
1.13  “Company
Indemnitees” shall have the meaning set forth in Section
5.01(b).

    

    Section
1.14  “Condition
Satisfaction Date” shall have the meaning set forth in Section
7.01.

    

    Section
1.15  “Consolidation Event”
shall have the meaning set forth in Section 6.06.

    

    Section
1.16  “Damages” shall mean
any loss, claim, damage, liability, costs and expenses (including, without
limitation, reasonable attorney’s fees and disbursements and costs and expenses
of expert witnesses and investigation).

    

    Section
1.17  “Effective
Date” shall mean the date on which the SEC first declares effective a
Registration Statement registering the resale of the Shares of Common Stock
that, but for the Registration Statement, would be Registrable Securities, as
set forth in Section 7.01(a).

    

    Section
1.18  “Environmental Laws”
shall have the meaning set forth in Section 4.11.

    

    Section
1.19  “Exchange
Act” shall mean the Securities Exchange Act of 1934, as amended, and the
rules and regulations promulgated thereunder.

    

    Section
1.20  “Indemnified
Liabilities” shall have the meaning set forth in Section
5.01(a).

    

    Section
1.21  “Investor
Indemnitees” shall have the meaning set forth in Section
5.01(a).

    

    Section
1.22  “Investor’s
Shares” shall have the meaning set forth in Section 12.04.

    

    Section
1.23  “Material
Adverse Effect” shall mean any condition, circumstance, or situation that
may result in, or reasonably be expected to result in (i) a material adverse
effect on the legality, validity or enforceability of this Agreement or the
transactions contemplated herein, (ii) a material adverse effect on the results
of operations, assets, business or condition (financial or otherwise) of the
Company, taken as a whole, or (iii) a material adverse effect on the Company’s
ability to perform in any material respect on a timely basis its obligations
under this Agreement.

    

    Section
1.24  “Market
Price” shall mean the lowest daily VWAP of the Common Stock during the
relevant Pricing Period.

    

    Section
1.25  “Maximum
Advance Amount” shall be $250,000 per Advance Notice.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Section
1.26  “Ownership
Limitation” shall have the meaning set forth in Section
2.02(a).

    

    Section
1.27  “Person” shall mean an
individual, a corporation, a partnership, an association, a trust or other
entity or organization, including a government or political subdivision or an
agency or instrumentality thereof.

    

    Section
1.28  “Pricing
Period” shall mean the 5 consecutive Trading Days after the Advance
Notice Date.

    

    Section
1.29  “Principal
Market” shall mean the Nasdaq Global Select Market, the Nasdaq Global
Market, the Nasdaq Capital Market, the NYSE Euronext, the OTC Bulletin Board or
the New York Stock Exchange, whichever is at the time the principal trading
exchange or market for the Common Stock.

    

    Section
1.30  “Purchase
Price” shall be set at 95% of the Market Price during the Pricing
Period.

    

    Section
1.31  “Registrable
Securities” shall mean (i) the shares of Common Stock that are or may be
purchased by the Investor hereunder, (ii) the Investor’s Shares, and (iii) any
securities issued or issuable with respect to any of the foregoing by way of
exchange, stock dividend or stock split or in connection with a combination of
shares, recapitalization, merger, consolidation or other reorganization or
otherwise.  As to any particular Registrable Securities, once issued
such securities shall cease to be Registrable Securities when (a) the
Registration Statement has been declared effective by the SEC and such
Registrable Securities have been disposed of pursuant to the Registration
Statement, (b) such Registrable Securities have been sold under circumstances
under which all of the applicable conditions of Rule 144 (or any similar
provision then in force) under the Securities Act (“Rule 144”) are met,
or (c) in the opinion of counsel to the Company such Registrable Securities may
permanently be sold without registration or without any time, volume or manner
limitations pursuant to Rule 144.

    

    Section
1.32  “Registration Rights
Agreement” shall mean the Registration Rights Agreement dated the date
hereof, regarding the filing of the Registration Statement for the resale of the
Registrable Securities, entered into between the Company and the
Investor.

    

    Section
1.33  “Registration
Statement” shall mean a registration statement on Form S-1 or Form S-3 or
on such other form promulgated by the SEC for which the Company then qualifies
and which counsel for the Company shall deem appropriate, and which form shall
be available for the resale of the Registrable Securities to be registered
thereunder in accordance with the provisions of this Agreement and the
Registration Rights Agreement, and in accordance with the intended method of
distribution of such securities), for the registration of the resale by the
Investor of the Registrable Securities under the Securities Act.

    

    Section
1.34  “Regulation
D” shall have the meaning set forth in the recitals of this
Agreement.

    

    Section
1.35  “SEC” shall have the
meaning set forth in the recitals of this Agreement.

    

    Section
1.36  “SEC
Documents” shall have the meaning set forth in Section 4.05.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Section
1.37  “Securities
Act” shall have the meaning set forth in the recitals of this
Agreement.

    

    Section
1.38  “Settlement
Document” shall have the meaning set forth in Section
2.03(a).

    

    Section
1.39  “Shares” shall mean
the shares of Common Stock to be issued from time to time hereunder pursuant to
Advances and the Investor’s Shares.

    

    Section
1.40  “Trading
Day” shall mean any day during which the Principal Market shall be open
for business.

    

    Section
1.41  “VWAP” means, for any
Trading Day, the daily dollar volume-weighted average price for such security as
reported by Bloomberg, LP through its “Historical Price Table Screen (HP)” with
Market: Weighted Ave function selected, or, if no dollar volume-weighted average
price is reported for such security by Bloomberg, LP, then the average of the
highest closing bid price and the lowest closing ask price of any of the market
makers for such security.

    

    Article
II. Advances

    

    Section
2.01  Advances. Subject to
the terms and conditions of this Agreement (including, without limitation, the
provisions of Article VII hereof), the Company, at its sole and exclusive
option, may issue and sell to the Investor, and the Investor shall purchase from
the Company, shares of the Company’s Common Stock by the delivery, in the
Company’s sole discretion, of Advance Notices.  

    

    Section
2.02  Mechanics.

     

    
    

    
      	
            	
              (a)

            	
              Advance
      Notice.  At any time during the Commitment Period, the
      Company may require the Investor to purchase shares of Common Stock by
      delivering an Advance Notice to the Investor, subject to the conditions
      set forth in Section 7.01; provided, however, that (i) the amount for each
      Advance as designated by the Company in the applicable Advance Notice
      shall not be more than the Maximum Advance Amount, (ii) the aggregate
      amount of the Advances pursuant to this Agreement shall not exceed the
      Commitment Amount, and (iii) in no event shall the number of shares of
      Common Stock issuable to the Investor pursuant to an Advance cause the
      aggregate number of shares of Common Stock beneficially owned (as
      calculated pursuant to Section 13(d) of the Exchange Act) by the Investor
      and its affiliates to exceed 9.99% of the then outstanding Common Stock
      (the “Ownership
      Limitation”).  There shall be a minimum of 5 Trading Days
      between each Advance Notice Date.  Notwithstanding any other
      provision in this Agreement, the Company acknowledges and agrees that upon
      receipt of an Advance Notice, the Investor may sell shares that it is
      unconditionally obligated to purchase under such Advance Notice prior to
      taking possession of such shares.

            

    

     

    
    

    
      	
            	
              (b)

            	
              Date of Delivery of
      Advance Notice.  Advance Notices shall be delivered in
      accordance with the instructions set forth on the bottom of Exhibit
      A.  An Advance Notice shall be deemed delivered on (i) the
      Trading Day it is received by facsimile or otherwise by the Investor if
      such notice is received prior to 5:00 pm Eastern Time, or (ii) the
      immediately succeeding Trading Day if it is received by facsimile or
      otherwise after 5:00 pm Eastern Time on a Trading Day or at any time on a
      day which is not a Trading Day.  No Advance Notice may be deemed
      delivered on a day that is not a Trading
Day.

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
    

    
      	
            	
              (c)

            	
              Ownership
      Limitation.  In connection with each Advance Notice
      delivered by the Company, any portion of an Advance that would cause the
      Investor to exceed the Ownership Limitation shall automatically be
      withdrawn.

            

    

    

    Section
2.03  Closings.  Each
Closing shall take place as soon as practicable after each Advance Date in
accordance with the procedures set forth below.  In connection with each
Closing the Company and the Investor shall fulfill each of its obligations as
set forth below:

     

    
    

    
      	
            	
              (a)

            	
              Within
      1 Trading Day after each Advance Date, the Investor shall deliver to the
      Company a written document (each a “Settlement
      Document”) setting forth the amount of the Advance (taking into
      account any adjustments pursuant to Section 2.02(c)), the Purchase Price,
      the number of shares of Common Stock to be issued and subscribed for
      (which in no event will be greater than the Ownership Limitation), and a
      report by Bloomberg, LP indicating the VWAP for each of the Trading Days
      during the Pricing Period, in each case taking into account the terms and
      conditions of this Agreement.

            

    

     

    
    

    
      	
            	
              (b)

            	
              Upon
      receipt of the Settlement Document with respect to each Advance, the
      Company shall confirm that it has obtained all material permits and
      qualifications required for the issuance and transfer of the shares of
      Common Stock applicable to such Advance, or shall have the availability of
      exemptions therefrom and that the sale and issuance of such shares of
      Common Stock shall be legally permitted by all laws and regulations to
      which the Company is subject.

            

    

    

    
      	
            	
              (c)

            	
              Promptly
      after receipt of the Settlement Document with respect to each Advance
      (and, in any event, not later than three Trading Days after each Advance
      Date), the Company will, or will cause its transfer agent to,
      electronically transfer such number of shares of Common Stock registered
      in the name of the Investor as shall equal (x) the amount of the Advance
      specified in such Advance Notice (as may be reduced according to the terms
      of this Agreement), divided by (y) the Purchase Price by crediting the
      Investor’s account or its designee’s account at the Depository Trust
      Company through its Deposit Withdrawal Agent Commission System or by such
      other means of delivery as may be mutually agreed upon by the parties
      hereto (which in all cases shall be freely tradable, registered shares in
      good deliverable form) against payment of the Purchase Price in same day
      funds to an account designated by the Company.  No fractional
      shares shall be issued, and any fractional amounts shall be rounded to the
      next higher whole number of shares.  Any certificates evidencing
      shares of Common Stock delivered pursuant hereto shall be free of
      restrictive legends.

            

    

    

    
      	
            	
              (d)

            	
              On
      or prior to the Advance Date, each of the Company and the Investor shall
      deliver to the other all documents, instruments and writings required to
      be delivered by either of them pursuant to this Agreement in order to
      implement and effect the transactions contemplated
  herein.

            

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Section
2.04  Hardship.  In
the event the Investor sells shares of the Company’s Common Stock after receipt
of an Advance Notice and the Company fails to perform its obligations as
mandated in Section 2.03, the Company agrees that in addition to and in no way
limiting the rights and obligations set forth in Section 5.01 hereto and in
addition to any other remedy to which the Investor is entitled at law or in
equity, including, without limitation, specific performance, it will hold the
Investor harmless against any loss, claim, damage, or expense (including
reasonable legal fees and expenses), as incurred, arising out of or in
connection with such default by the Company and acknowledges that irreparable
damage would occur in the event of any such default.  It is
accordingly agreed that the Investor shall be entitled to an injunction or
injunctions to prevent such breaches of this Agreement and to specifically
enforce, without the posting of a bond or other security, the terms and
provisions of this Agreement.

    

    Article
III. Representations and Warranties of Investor

    

    Investor
hereby represents and warrants to, and agrees with, the Company that the
following are true and correct as of the date hereof and as of each Advance
Date:

    

    Section
3.01  Organization and
Authorization.  The Investor is duly incorporated or organized
and validly existing in the jurisdiction of its incorporation or organization
and has all requisite power and authority to purchase and hold the securities
issuable hereunder.  The decision to invest and the execution and
delivery of this Agreement by such Investor, the performance by such Investor of
its obligations hereunder and the consummation by such Investor of the
transactions contemplated hereby have been duly authorized and requires no other
proceedings on the part of the Investor.  The undersigned has the
right, power and authority to execute and deliver this Agreement and all other
instruments (including, without limitations, the Registration Rights Agreement),
on behalf of the Investor.  This Agreement has been duly executed and
delivered by the Investor and, assuming the execution and delivery hereof and
acceptance thereof by the Company, will constitute the legal, valid and binding
obligations of the Investor, enforceable against the Investor in accordance with
its terms.

    

    Section
3.02  Evaluation
of Risks.  The Investor has such knowledge and experience in
financial, tax and business matters as to be capable of evaluating the merits
and risks of, and bearing the economic risks entailed by, an investment in the
Company and of protecting its interests in connection with this
transaction.  It recognizes that its investment in the Company
involves a high degree of risk.

    

    Section
3.03  No Legal
Advice From the Company.  The Investor acknowledges that it had
the opportunity to review this Agreement and the transactions contemplated by
this Agreement with his or its own legal counsel and investment and tax
advisors.  The Investor is relying solely on such counsel and advisors
and not on any statements or representations of the Company or any of its
representatives or agents for legal, tax or investment advice with respect to
this investment, the transactions contemplated by this Agreement or the
securities laws of any jurisdiction.

    

    Section
3.04  Investment
Purpose. The securities are being purchased by the Investor for its own
account, and for investment purposes.  The Investor agrees not to
assign or in any way transfer the Investor’s rights to the securities or any
interest therein and acknowledges that the Company will not recognize any
purported assignment or transfer except in accordance with applicable Federal
and state securities laws.  No other person has or will have a direct
or indirect beneficial interest in the securities.  The Investor
agrees not to sell, hypothecate or otherwise transfer the Investor’s securities
unless the securities are registered under Federal and applicable state
securities laws or unless, in the opinion of counsel satisfactory to the
Company, an exemption from such laws is available.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Section
3.05  Accredited
Investor.  The Investor is an “Accredited Investor”
as that term is defined in Rule 501(a)(3) of Regulation D of the Securities
Act.

    

    Section
3.06  Information.  The
Investor and its advisors (and its counsel), if any, have been furnished with
all materials relating to the business, finances and operations of the Company
and information it deemed material to making an informed investment
decision.  The Investor and its advisors, if any, have been afforded
the opportunity to ask questions of the Company and its
management.  Neither such inquiries nor any other due diligence
investigations conducted by such Investor or its advisors, if any, or its
representatives shall modify, amend or affect the Investor’s right to rely on
the Company’s representations and warranties contained in this
Agreement.  The Investor understands that its investment involves a
high degree of risk.  The Investor is in a position regarding the
Company, which, based upon employment, family relationship or economic
bargaining power, enabled and enables such Investor to obtain information from
the Company in order to evaluate the merits and risks of this
investment.  The Investor has sought such accounting, legal and tax
advice, as it has considered necessary to make an informed investment decision
with respect to this transaction.

    

    Section
3.07  Receipt of
Documents. The Investor and its counsel have received and read in their
entirety:  (i) this Agreement and the Exhibits annexed hereto; (ii)
all due diligence and other information requested by them to verify the accuracy
and completeness of such representations, warranties and covenants; (iii) the
Company’s Form 10-K for the year ended July 31, 2008 and Form 10-Q for the
period ended October 31, 2008 and (iv) answers to all questions the
Investor submitted to the Company regarding an investment in the Company; and
the Investor has relied on the information contained therein and has not been
furnished any other documents, literature, memorandum or
prospectus.

    

    Section
3.08  No General
Solicitation.  Neither the Company, nor any of its affiliates,
nor any person acting on its or their behalf, has engaged in any form of general
solicitation or general advertising (within the meaning of Regulation D under
the Securities Act) in connection with the offer or sale of the shares of Common
Stock offered hereby.

    

    Section
3.09  Not an
Affiliate.  The Investor is not an officer, director or a
person that directly, or indirectly through one or more intermediaries, controls
or is controlled by, or is under common control with the Company or any “Affiliate” of the
Company (as that term is defined in Rule 405 of the Securities
Act).

    

    Section 3.10  Trading
Activities.  The
Investor’s trading activities with respect to the Company’s Common Stock shall
be in compliance with all applicable federal and state securities laws, rules
and regulations and the rules and regulations of the Principal Market on which
the Company’s Common Stock is listed or traded. Neither the Investor nor
its affiliates has an open short position in the Common Stock of the Company,
the Investor agrees that it shall not, and that it will cause its affiliates not
to, engage in any short sales of or hedging transactions with respect to the
Common Stock provided that
the Company acknowledges and agrees that upon receipt of an Advance Notice the
Investor has the right to sell the shares to be issued to the Investor pursuant
to the Advance Notice prior to receiving such shares.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    Article
IV. Representations and Warranties of the Company

    

    Except as
stated below, on the disclosure schedules attached hereto or in the SEC
Documents, the Company hereby represents and warrants to, the Investor that the
following are true and correct as of the date hereof:

    

    Section
4.01  Organization and
Qualification.  The Company is duly incorporated or organized
and validly existing in the jurisdiction of its incorporation or organization
and has all requisite corporate power to own its properties and to carry on its
business as now being conducted.  Each of the Company and its
subsidiaries is duly qualified as a foreign corporation to do business and is in
good standing in every jurisdiction in which the nature of the business
conducted by it makes such qualification necessary, except to the extent that
the failure to be so qualified or be in good standing would not have a Material
Adverse Effect on the Company and its subsidiaries taken as a
whole.

    

    Section
4.02  Authorization, Enforcement,
Compliance with Other Instruments.  (i) The Company has the
requisite corporate power and authority to enter into and perform this
Agreement, the Registration Rights Agreement and any related agreements, in
accordance with the terms hereof and thereof, (ii) the execution and delivery of
this Agreement, the Registration Rights Agreement and any related agreements by
the Company and the consummation by it of the transactions contemplated hereby
and thereby, have been duly authorized by the Company’s Board of Directors and
no further consent or authorization is required by the Company, its Board of
Directors or its stockholders, (iii) this Agreement, the Registration
Rights Agreement and any related agreements have been duly executed and
delivered by the Company, (iv) this Agreement, the Registration Rights Agreement
and assuming the execution and delivery thereof and acceptance by the Investor
and any related agreements constitute the valid and binding obligations of the
Company enforceable against the Company in accordance with their terms, except
as such enforceability may be limited by general principles of equity or
applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or
similar laws relating to, or affecting generally, the enforcement of creditors’
rights and remedies.

    

    Section
4.03  Capitalization.  The
authorized capital stock of the Company consists of 500,000,000 shares of Common
Stock and 50,000,000 shares of Preferred Stock, $0.00001 par value per share
(“Preferred
Stock”), of which 63,503,004 shares of Common Stock and no shares of
Preferred Stock are issued and outstanding.  All of such outstanding
shares have been validly issued and are fully paid and
nonassessable.  Except as disclosed in the SEC Documents, no shares of
Common Stock are subject to preemptive rights or any other similar rights or any
liens or encumbrances suffered or permitted by the Company.  Except as
disclosed in the SEC Documents, as of the date hereof, (i) there are no
outstanding options, warrants, scrip, rights to subscribe to, calls or
commitments of any character whatsoever relating to, or securities or rights
convertible into, any shares of capital stock of the Company or any of its
subsidiaries, or contracts, commitments, understandings 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 or
options, warrants, scrip, rights to subscribe to, calls or commitments of any
character whatsoever relating to, or securities or rights convertible into, any
shares of capital stock of the Company or any of its subsidiaries, (ii) there
are no outstanding debt securities (iii) there are no
outstanding registration statements other than on Form S-8 and (iv) there are no
agreements or arrangements under which the Company or any of its subsidiaries is
obligated to register the sale of any of their securities under the Securities
Act (except pursuant to the Registration Rights Agreement).  There are
no securities or instruments containing anti-dilution or similar provisions that
will be triggered by this Agreement or any related agreement or the consummation
of the transactions described herein or therein.  The Company has
furnished or made available to the Investor true and correct copies of the
Company’s Certificate of Incorporation, as amended and as in effect on the date
hereof (the “Certificate of
Incorporation”), and 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 and the
material rights of the holders thereof in respect thereto.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Section
4.04  No
Conflict.  The execution, delivery and performance of this
Agreement by the Company and the consummation by the Company of the transactions
contemplated hereby will not (i) result in a violation of the Certificate of
Incorporation, any certificate of designations of any outstanding series of
preferred stock of the Company or By-laws or (ii) conflict with or constitute a
default (or an event which with notice or lapse of time or both would become a
default) under, or 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 result in a violation of
any law, rule, regulation, order, judgment or decree (including federal and
state securities laws and regulations and the rules and regulations of the
Principal Market on which the Common Stock is quoted) applicable to the Company
or any of its subsidiaries or by which any material property or asset of the
Company or any of its subsidiaries is bound or affected and which would cause a
Material Adverse Effect.  Except as disclosed in the SEC Documents,
neither the Company nor its subsidiaries is in violation of any term of or in
default under its Articles of Incorporation or By-laws or their organizational
charter or by-laws, respectively, or any material contract, agreement, mortgage,
indebtedness, indenture, instrument, judgment, decree or order or any statute,
rule or regulation applicable to the Company or its subsidiaries.  The
business of the Company and its subsidiaries is not being conducted in violation
of any material law, ordinance, regulation of any governmental
entity.  Except as specifically contemplated by this Agreement and as
required under the Securities 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 or governmental agency in order
for it to execute, deliver or perform any of its obligations under or
contemplated by this Agreement or the Registration Rights Agreement in
accordance with the terms hereof or thereof.  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 and its subsidiaries are
unaware of any fact or circumstance which might give rise to any of the
foregoing.

    

    Section
4.05  SEC
Documents; Financial Statements.  The Company has filed all
reports, schedules, forms, statements and other documents required to be filed
by it with the SEC under the Securities Exchange Act for the two years preceding
the date hereof (or such shorter period as the Company was required by law or
regulation to file such material) (all of the foregoing filed prior to the date
hereof or amended after the date hereof and all exhibits included therein and
financial statements and schedules thereto and documents incorporated by
reference therein, being hereinafter referred to as the “SEC Documents”) on
timely basis or has received a valid extension of such time of filing and has
filed any such SEC Document prior to the expiration of any such
extension.  The Company has delivered to the Investors or their
representatives, or made available through the SEC’s website at
http://www.sec.gov, true and complete copies of the SEC Documents.  As
of their respective dates, the SEC Documents complied in all material respects
with the requirements of the Exchange 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 the
light of the circumstances under which they were made, not
misleading.  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 generally accepted accounting
principles, consistently applied, during the periods involved (except (i) as may
be otherwise indicated in such financial statements or the notes thereto, or
(ii) in the case of unaudited interim statements, to the extent they may exclude
footnotes or may be condensed or summary statements) and fairly present in all
material respects the financial position of the Company as of the dates thereof
and the results of its operations and cash flows for the periods then ended
(subject, in the case of unaudited statements, to normal year-end audit
adjustments).  No other information provided by or on behalf of the
Company to the Investors which is not included in the SEC Documents contains any
untrue statement of a material fact or omits to state any material fact
necessary in order to make the statements therein, in the light of the
circumstance under which they are or were made and not misleading.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Section
4.06  10b-5.  The
SEC Documents do not include any untrue statements of material fact, nor do they
omit to state any material fact required to be stated therein necessary to make
the statements made, in light of the circumstances under which they were made,
not misleading.

    

    Section
4.07  No
Default.  Except as disclosed in the SEC Documents, the Company
is not in default in the performance or observance of any material obligation,
agreement, covenant or condition contained in any indenture, mortgage, deed of
trust or other material instrument or agreement to which it is a party or by
which it is or its property is bound and neither the execution, nor the delivery
by the Company, nor the performance by the Company of its obligations under this
Agreement or any of the exhibits or attachments hereto will conflict with or
result in the breach or violation of any of the terms or provisions of, or
constitute a default or result in the creation or imposition of any lien or
charge on any assets or properties of the Company under its Certificate of
Incorporation, By-Laws, any material indenture, mortgage, deed of trust or other
material agreement applicable to the Company or instrument to which the Company
is a party or by which it is bound, or any statute, or any decree, judgment,
order, rules or regulation of any court or governmental agency or body having
jurisdiction over the Company or its properties, in each case which default,
lien or charge is likely to cause a Material Adverse Effect.

    

    Section
4.08  Absence of
Events of Default.  Except for matters described in the SEC
Documents and/or this Agreement, no Event of Default, as defined in the
respective agreement to which the Company is a party, and no event which, with
the giving of notice or the passage of time or both, would become an Event of
Default (as so defined), has occurred and is continuing, which would have a
Material Adverse Effect.

    

    Section
4.09  Intellectual Property
Rights.  The Company and its subsidiaries own or possess
adequate rights or licenses to use all material trademarks, trade names, service
marks, service mark registrations, service names, patents, patent rights,
copyrights, inventions, licenses, approvals, governmental authorizations, trade
secrets and rights necessary to conduct their respective businesses as now
conducted.   The Company and its subsidiaries do not have any
knowledge of any infringement by the Company or its subsidiaries of trademark,
trade name rights, patents, patent rights, copyrights, inventions, licenses,
service names, service marks, service mark registrations, trade secret or other
similar rights of others, and, to the knowledge of the Company, there is no
claim, action or proceeding being made or brought against, or to the Company’s
knowledge, being threatened against, the Company or its subsidiaries regarding
trademark, trade name, patents, patent rights, invention, copyright, license,
service names, service marks, service mark registrations, trade secret or other
infringement; and the Company and its subsidiaries are unaware of any facts or
circumstances which might give rise to any of the foregoing.

    

    Section
4.10   Employee
Relations.  Neither the Company nor any of its subsidiaries is
involved in any labor dispute nor, to the knowledge of the Company or any of its
subsidiaries, is any such dispute threatened.  None of the Company’s
or its subsidiaries’ employees is a member of a union and the Company and its
subsidiaries believe that their relations with their employees are
good.

    

    Section
4.11  Environmental
Laws.  The Company and its subsidiaries are (i) in compliance
with any and all applicable material foreign, federal, state and local laws and
regulations relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants (“Environmental Laws”),
(ii) have received all permits, licenses or other approvals required of them
under applicable Environmental Laws to conduct their respective businesses and
(iii) are in compliance with all terms and conditions of any such permit,
license or approval.

    

    Section
4.12  Title.  Except
as set forth in the SEC Documents, the Company has good and marketable title to
its properties and material assets owned by it, free and clear of any pledge,
lien, security interest, encumbrance, claim or equitable interest other than
such as are not material to the business of the Company.  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 are not material and do not interfere with the use made and proposed to be
made of such property and buildings by the Company and its
subsidiaries.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Section
4.13  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
in which the Company and its subsidiaries are engaged.  Neither the
Company nor any such subsidiary has been refused any insurance coverage sought
or applied for and 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.

    

    Section
4.14  Regulatory
Permits.  The Company and its subsidiaries possess all material
certificates, authorizations and permits issued by the appropriate federal,
state or foreign regulatory authorities necessary to conduct their respective
businesses, and neither the Company nor any such subsidiary has received any
notice of proceedings relating to the revocation or modification of any such
certificate, authorization or permit.

    

    Section
4.15  Internal
Accounting Controls.  The Company and each of its subsidiaries
maintain a system of internal accounting controls sufficient 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.

    

    Section
4.16  No Material
Adverse Breaches, etc.  Except as set forth in the SEC
Documents, 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 on the business,
properties, operations, financial condition, results of operations or prospects
of the Company or its subsidiaries.  Except as set forth in the SEC
Documents, neither the Company nor any of its subsidiaries is in breach of any
contract or agreement which breach, in the judgment of the Company’s officers,
has or is expected to have a Material Adverse Effect on the business,
properties, operations, financial condition, results of operations or prospects
of the Company or its subsidiaries.

    

    Section
4.17  Absence of
Litigation.  Except as set forth in the SEC Documents, there is
no action, suit, proceeding, inquiry or investigation before or by any court,
public board, government agency, self-regulatory organization or body pending
against or affecting the Company, the Common Stock or any of the Company’s
subsidiaries, wherein an unfavorable decision, ruling or finding would (i) have
a Material Adverse Effect on the transactions contemplated hereby (ii) adversely
affect the validity or enforceability of, or the authority or ability of the
Company to perform its obligations under, this Agreement or any of the documents
contemplated herein, or (iii) except as expressly disclosed in the SEC
Documents, have a Material Adverse Effect.

    
      

      Section
4.18  Subsidiaries.  Except
as disclosed in the SEC Documents, the Company does not presently own or
control, directly or indirectly, any interest in any other corporation,
partnership, association or other business entity.

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      Section
4.19  Tax
Status.  Except as disclosed in the SEC Documents, the Company
and each of its subsidiaries has made or filed all federal and state income and
all other tax returns, reports and declarations required by any jurisdiction to
which it is subject and (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) 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 provision
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.

      

      Section
4.20  Certain
Transactions.  Except as set forth in the SEC Documents none of
the officers, directors, or employees of the Company is presently a party to any
transaction with the Company (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.

      

      Section
4.21  Fees
and Rights of First Refusal.  The Company is not obligated to
offer the securities offered hereunder on a right of first refusal basis or
otherwise to any third parties including, but not limited to, current or former
shareholders of the Company, underwriters, brokers, agents or other third
parties.

      

      Section
4.22  Use of
Proceeds.  The Company shall use the net proceeds from this
offering for working capital and other general corporate purposes.

      

      Section
4.23  Further Representation and
Warranties of the Company.  For so long as any securities
issuable hereunder held by the Investor remain outstanding, the Company
acknowledges, represents, warrants and agrees that it will maintain the listing
of its Common Stock on the Principal Market.

      

      Section
4.24  Dilution.  The
Company is aware and acknowledges that issuance of shares of the Company’s
Common Stock could cause dilution to existing shareholders and could
significantly increase the outstanding number of shares of Common
Stock.

      

      Section
4.25  Acknowledgment Regarding
Investor’s Purchase of Shares. The Company acknowledges and agrees that
the Investor is acting solely in the capacity of an arm’s length investor with
respect to this Agreement and the transactions contemplated hereunder. The
Company further acknowledges that the Investor is not acting as a financial
advisor or fiduciary of the Company (or in any similar capacity) with respect to
this Agreement and the transactions contemplated hereunder and any advice given
by the Investor or any of its representatives or agents in connection with this
Agreement and the transactions contemplated hereunder is merely incidental to
the Investor’s purchase of the Common Stock hereunder.  The Company is
aware and acknowledges that it may not be able to request Advances under this
Agreement if it cannot obtain an effective Registration Statement or if any
issuances of Common Stock pursuant to any Advances would violate any rules of
the Principal Market.  The Company further is aware and acknowledges
that any fees paid hereunder or shares issued pursuant to 12.04. hereunder shall
be earned on the date hereof and not refundable or returnable under any
circumstances.

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

      Article
V.   Indemnification

      

      The
Investor and the Company represent to the other the following with respect to
itself:

      

      Section
5.01  Indemnification.

       

      
      

      
        
          	
                	
                  (a) 

                	
                  In
      consideration of the Investor’s execution and delivery of this Agreement,
      and in addition to all of the Company’s other obligations under this
      Agreement, the Company shall defend, protect, indemnify and hold harmless
      the Investor, and all of its officers, directors, partners, employees and
      agents (including, without limitation, those retained in connection with
      the transactions contemplated by this Agreement) (collectively, the
      “Investor
      Indemnitees”) from and against any and all actions, causes of
      action, suits, claims, losses, costs, penalties, fees, liabilities and
      damages, and expenses in connection therewith (irrespective of whether any
      such Investor Indemnitee is a party to the action for which
      indemnification hereunder is sought), and including reasonable attorneys’
      fees and disbursements (the “Indemnified
      Liabilities”), incurred by the Investor Indemnitees or any of them
      as a result of, or arising out of, or relating to (a) any
      misrepresentation or breach of any representation or warranty made by the
      Company in this Agreement or the Registration Rights Agreement or any
      other certificate, instrument or document contemplated hereby or thereby,
      (b) any breach of any covenant, agreement or obligation of the Company
      contained in this Agreement or the Registration Rights Agreement or any
      other certificate, instrument or document contemplated hereby or thereby,
      or (c) any cause of action, suit or claim brought or made against such
      Investor Indemnitee not arising out of any action or inaction of an
      Investor Indemnitee, and arising out of or resulting from the execution,
      delivery, performance or enforcement of this Agreement or any other
      instrument, document or agreement executed pursuant hereto by any of the
      Investor Indemnitees.  To the extent that the foregoing
      undertaking by the Company may be unenforceable for any reason, the
      Company shall make the maximum contribution to the payment and
      satisfaction of each of the Indemnified Liabilities, which is permissible
      under applicable law.

                

        

         

      

      
      

      
        
          	
                	
                  (b) 

                	
                  In
      consideration of the Company’s execution and delivery of this Agreement,
      and in addition to all of the Investor’s other obligations under this
      Agreement, the Investor shall defend, protect, indemnify and hold harmless
      the Company and all of its officers, directors, shareholders, employees
      and agents (including, without limitation, those retained in connection
      with the transactions contemplated by this Agreement) (collectively, the
      “Company
      Indemnitees”) from and against any and all Indemnified Liabilities
      incurred by the Company Indemnitees or any of them as a result of, or
      arising out of, or relating to (a) any misrepresentation or breach of any
      representation or warranty made by the Investor in this Agreement, the
      Registration Rights Agreement, or any instrument or document contemplated
      hereby or thereby executed by the Investor, (b) any breach of any
      covenant, agreement or obligation of the Investor(s) contained in this
      Agreement,  the Registration Rights Agreement or any other
      certificate, instrument or document contemplated hereby or thereby
      executed by the Investor, or (c) any cause of action, suit or claim
      brought or made against such Company Indemnitee not arising out of any
      action or inaction of a Company Indemnitee and arising out of or resulting
      from the execution, delivery, performance or enforcement of this Agreement
      or any other instrument, document or agreement executed pursuant hereto by
      any of the Company Indemnitees.  To the extent that the
      foregoing undertaking by the Investor may be unenforceable for any reason,
      the Investor shall make the maximum contribution to the payment and
      satisfaction of each of the Indemnified Liabilities, which is permissible
      under applicable law.

                

        

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

      

      
      

      
        
          	
                	
                  (c) 

                	
                  Promptly
      after receipt by an Investor Indemnitee or Company Indemnitee under this
      Section 5.01 of notice of the commencement of any action or proceeding
      (including any governmental action or proceeding) involving an Indemnified
      Liability, such Investor Indemnitee or Company Indemnitee shall, if an
      Indemnified Liability in respect thereof is to be made against any
      indemnifying party under this Section 5.01 deliver to the indemnifying
      party a written notice of the commencement thereof, and the indemnifying
      party shall have the right to participate in, and, to the extent the
      indemnifying party so desires, jointly with any other indemnifying party
      similarly noticed, to assume control of the defense thereof with counsel
      mutually satisfactory to the indemnifying party and the Investor
      Indemnitee or Company Indemnitee, as the case may be; provided, however,
      that an Investor Indemnitee or Company Indemnitee shall have the right to
      retain its own counsel with the fees and expenses of not more than one
      counsel for such Investor Indemnitee or Company Indemnitee to be paid by
      the indemnifying party, if, in the reasonable opinion of counsel retained
      by the indemnifying party, the representation by such counsel of the
      Investor Indemnitee or Company Indemnitee and the indemnifying party would
      be inappropriate due to actual or potential differing  interests
      between such Investor Indemnitee or Company Indemnitee and any other party
      represented by such counsel in such proceeding. The Investor Indemnitee or
      Company Indemnitee shall cooperate fully with the indemnifying party in
      connection with any negotiation or defense of any such action or claim by
      the indemnifying party and shall furnish to the indemnifying party all
      information reasonably available to the Investor Indemnitee or Company
      Indemnitee which relates to such action or claim.  The
      indemnifying party shall keep the Investor Indemnitee or Company
      Indemnitee fully apprised at all times as to the status of the defense or
      any settlement negotiations with respect thereto.  No
      indemnifying party shall be liable for any settlement of any action, claim
      or proceeding effected without its prior written consent, provided,
      however, that the indemnifying party shall not unreasonably withhold,
      delay or condition its consent.  No indemnifying party shall,
      without the prior written consent of the Investor Indemnitee or Company
      Indemnitee, consent to entry of any judgment or enter into any settlement
      or other compromise which does not include as an unconditional term
      thereof the giving by the claimant or plaintiff to such Investor
      Indemnitee or Company Indemnitee of a release from all liability in
      respect to such claim or litigation.  Following indemnification
      as provided for hereunder, the indemnifying party shall be subrogated to
      all rights of the Investor Indemnitee or Company Indemnitee with respect
      to all third parties, firms or corporations relating to the matter for
      which indemnification has been made.  The failure to deliver
      written notice to the indemnifying party within a reasonable time of the
      commencement of any such action shall not relieve such indemnifying party
      of any liability to the Investor Indemnitee or Company Indemnitee under
      this Section 5.01, except to the extent that the indemnifying party is
      prejudiced in its ability to defend such
action.

                

        

      

      

      
        
          	
                	
                  (d) 

                	
                  The
      indemnification required by this Section 5.01 shall be made by periodic
      payments of the amount thereof during the course of the investigation or
      defense, as and when bills are
received.

                

        

      

      

      
        
          	
                	
                  (e)

                	
                  The indemnity agreements contained herein
      shall be in addition to (i) any cause of action or similar right of the
      Investor Indemnitee or Company Indemnitee against the indemnifying party
      or others, and (ii) any liabilities the indemnifying party may be subject
      to pursuant to the law.

                

        

      

      

      
        
          	
                	
                  (f)

                	
                  The
      obligations of the
      parties to indemnify or make contribution under this Section 5.01 shall survive
      termination.

                

        

      

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

      Article
VI.

      Covenants
of the Company

      

      Section
6.01  Registration
Rights.  The Company shall comply in all material respects with
the terms of the Registration Rights Agreement.

      

      Section
6.02  Listing of Common
Stock.  The Company shall at all times maintain the Common
Stock’s authorization for quotation on the Principal Market.

      

      Section
6.03  Exchange Act
Registration.  The Company will cause its Common Stock to
continue to be registered under Section 12(g) of the Exchange Act, will file in
a timely manner all reports and other documents required of it as a reporting
company under the Exchange Act and will not take any action or file any document
(whether or not permitted by Exchange Act or the rules thereunder) to terminate
or suspend such registration or to terminate or suspend its reporting and filing
obligations under said Exchange Act.

      

      Section
6.04  Transfer Agent
Instructions.  Upon effectiveness of the Registration Statement
the Company shall deliver instructions to its transfer agent to issue shares of
Common Stock to the Investor free of restrictive legends on or before each
Advance Date.

      

      Section
6.05  Corporate
Existence.  The Company will take all steps necessary to
preserve and continue the corporate existence of the Company.

      

      Section
6.06  Notice
of Certain Events Affecting Registration; Suspension of Right to Make an
Advance.  The Company will immediately notify the Investor upon
its becoming aware of the occurrence of any of the following events in respect
of a Registration Statement or related prospectus relating to an offering of
Registrable Securities: (i) receipt of any request for additional information by
the SEC or any other Federal or state governmental authority during the period
of effectiveness of the Registration Statement for amendments or supplements to
the Registration Statement or related prospectus; (ii) the issuance by the SEC
or any other Federal or state governmental authority of  any stop
order suspending the effectiveness of the Registration Statement or the
initiation of any proceedings for that purpose; (iii) receipt of any
notification with respect to the suspension of the qualification or exemption
from qualification of any of the Registrable Securities for sale in any
jurisdiction or the initiation or threatening of any proceeding for such
purpose; (iv) the happening of any event that makes any statement made in the
Registration Statement or related prospectus of any document incorporated or
deemed to be incorporated therein by reference untrue in any material respect or
that requires the making of any changes in the Registration Statement, related
prospectus or documents so that, in the case of the Registration Statement, it
will not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading, and that in the case of the related prospectus, it will
not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; and (v) the Company’s reasonable determination that a post-effective
amendment to the Registration Statement would be appropriate; and the Company
will promptly make available to the Investor any such supplement or amendment to
the related prospectus.  The Company shall not deliver to the Investor
any Advance Notice, and the Investor shall not sell any Shares pursuant to a
Registration Statement, during the continuation of any of the foregoing
events.

      

      Section
6.07  Restriction on Registration
Statement.  During the Commitment Period, the Company shall
not, without the prior written consent of the Investor, file any registration
statement on Form S-8, provided however, this restriction shall not apply to the
Company’s current 1999 Long-Term Incentive Plan nor any additional incentive
plans created by the Company and approved by the board of directors provided
that the number of shares of Common Stock covered by any additional plans do not
exceed 10,000,000 shares in the aggregate.

      

      Section
6.08  Consolidation;
Merger.  If an Advance Notice has been delivered to the
Investor and the transaction contemplated in such Advance Notice has not yet
been closed in accordance with Section 2.03 hereof, then the Company shall not
effect any merger or consolidation of the Company with or into, or a transfer of
all or substantially all the assets of the Company to another entity (a “Consolidation Event”)
unless the resulting successor or acquiring entity (if not the Company) assumes
by written instrument the obligation to deliver to the Investor such shares of
stock and/or securities as the Investor is entitled to receive pursuant to such
Advance Notice.

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      Section
6.09  Issuance of the Company’s
Common Stock.  The sale of the shares of Common Stock shall be
made in accordance with the provisions and requirements of Regulation D and
any applicable state securities law.

      

      Section
6.10  Review
of Public Disclosures.  All SEC filings (including, without
limitation, all filings required under the Exchange Act, which include Forms
10-Q and 10-QSB, 10-K and 10K-SB, 8-K, etc) and other public disclosures made by
the Company, including, without limitation, all press releases, investor
relations materials, and scripts of analysts meetings and calls, shall be
reviewed and approved for release by the Company’s attorneys and, if containing
financial information, the Company’s independent certified public
accountants.

      

      Section
6.11  Market
Activities.  The Company will not, directly or indirectly, take
any action designed to cause or result in, or that constitutes or might
reasonably be expected to constitute, the stabilization or manipulation of the
price of any security of the Company under applicable laws and regulations to
facilitate the sale or resale of the Common Stock.

      

      Section
6.12  Opinion of Counsel
Concerning Resales.  Provided that the Investor’s resale of
Common Stock received pursuant to this Agreement may be freely sold by the
Investor either pursuant to an effective Registration Statement, in accordance
with Rule 144, or otherwise, the Company shall obtain for the Investor, at the
Company’s expense, any and all opinions of counsel which may be required by the
Company’s transfer agent to issue such shares free of restrictive legends, or to
remove legends from such shares.

      

      

      Article
VII.

      Conditions
for Advance and Conditions to Closing

      

      Section
7.01  Conditions Precedent to the
Right of the Company to Deliver an Advance Notice.  The right
of the Company to deliver an Advance Notice is subject to the fulfillment by the
Company, on such Advance Notice Date (a “Condition Satisfaction
Date”), of each of the following conditions:

       

      
      

      
        
          	
                	
                  (a) 

                	
                  Accuracy of the
      Company’s Representations and Warranties.  The
      representations and warranties of the Company shall be true and correct in
      all material respects (except for representations and warranties that
      speak as of a specific date).

                

        

      

      

      
        
          	
                	
                  (b) 

                	
                  Registration of the
      Common Stock with the SEC.  There is an effective
      Registration Statement pursuant to which the Investor is permitted to
      utilize the prospectus thereunder to resell all of the shares of Common
      Stock issuable pursuant to such Advance
Notice.

                

        

      

      

      
        
          	
                	
                  (c) 

                	
                  Authority.  The
      Company shall have obtained all permits and qualifications required by any
      applicable state in accordance with the Registration Rights Agreement for
      the offer and sale of the shares of Common Stock, or shall have the
      availability of exemptions therefrom.  The sale and issuance of
      the shares of Common Stock shall be legally permitted by all laws and
      regulations to which the Company is
subject.

                

        

      

      

      
        
          	
                	
                  (d) 

                	
                  No Material
      Notices. None of the following events shall have occurred and be
      continuing:  (i) receipt by the Company of any request for
      additional information from the SEC or any other federal or state
      governmental, administrative or self regulatory authority during the
      period of effectiveness of the Registration Statement, the response to
      which would require any amendments or supplements to the Registration
      Statement or related prospectus; (ii) the issuance by the SEC or any other
      federal or state governmental authority of any stop order suspending the
      effectiveness of the Registration Statement or the initiation of any
      proceedings for that purpose; (iii) receipt by the Company of any
      notification with respect to the suspension of the qualification or
      exemption from qualification of any of the Registrable Securities for sale
      in any jurisdiction or the initiation or threatening of any proceeding for
      such purpose; (iv) the occurrence of any event that makes any statement
      made in the Registration Statement or related prospectus or any document
      incorporated or deemed to be incorporated therein by reference untrue in
      any material respect or that requires the making of any changes in the
      Registration Statement, related prospectus or documents so that, in the
      case of the Registration Statement, it will not contain any untrue
      statement of a material fact or omit to state any material fact required
      to be stated therein or necessary to make the statements therein not
      misleading, and that in the case of the related prospectus, it will not
      contain any untrue statement of a material fact or omit to state any
      material fact required to be stated therein or necessary to make the
      statements therein, in the light of the circumstances under and as of the
      date which they were made, not misleading; and (v) the Company’s
      reasonable determination that a post-effective amendment to the
      Registration Statement would be required. There shall not exist any
      fundamental changes to the information set forth in the Registration
      Statement which would require the Company to file a post-effective
      amendment to the Registration
Statement.

                

        

      

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
        
          	
                	
                  (e) 

                	
                  Performance by the
      Company.  The Company shall have performed, satisfied and
      complied in all material respects with all covenants, agreements and
      conditions required by this Agreement and the Registration Rights
      Agreement to be performed, satisfied or complied with by the Company at or
      prior to each Condition Satisfaction
Date.

                

        

      

      

      
        
          	
                	
                  (f) 

                	
                  No
      Injunction.  No statute, rule, regulation, executive
      order, decree, ruling or injunction shall have been enacted, entered,
      promulgated or endorsed by any court or governmental authority of
      competent jurisdiction that prohibits or directly and adversely affects
      any of the transactions contemplated by this Agreement, and no proceeding
      shall have been commenced that may have a Material Adverse
      Effect.

                

        

      

      

      
        
          	
                	
                  (g) 

                	
                  No Suspension of
      Trading in or Delisting of Common Stock.  The Common
      Stock is trading on a Principal Market and all of the shares issuable
      pursuant to such Advance Notice will be listed or quoted for trading on
      such Principal Market and the Company believes, in good faith, that
      trading of the Common Stock on a Principal Market will continue
      uninterrupted for the foreseeable future.  The issuance of
      shares of Common Stock with respect to the applicable Advance Notice will
      not violate the shareholder approval requirements of the Principal
      Market.  The Company shall not have received any notice
      threatening the continued listing of the Common Stock on the Principal
      Market.

                

        

      

      

      
        
          	
                	
                  (h) 

                	
                  Maximum Advance
      Amount.  The amount of an Advance requested by the
      Company shall not exceed the Maximum Advance
  Amount.

                

        

      

      

      
        
          	
                	
                  (i) 

                	
                  Authorized.  There
      shall be a sufficient number of authorized but unissued and otherwise
      unreserved shares of Common Stock for the issuance of all of the shares
      issuable pursuant to such Advance
Notice.

                

        

      

      

      
        
          	
                	
                  (j) 

                	
                  Opinion of Counsel at
      Closing.  Investor shall have received an opinion letter
      from counsel to the Company in the form attached hereto as Exhibit
      B.

                

        

      

      

      
        
          	
                	
                  (k) 

                	
                  Executed Advance
      Notice.  The Investor shall have received the Advance
      Notice executed by an officer of the Company and the representations
      contained in such Advance Notice shall be true and correct as of each
      Condition Satisfaction Date.

                

        

      

       

      Article
VIII.

      Non-Disclosure
of Non-Public Information

      

      The
Company covenants and agrees that it shall refrain from disclosing, and shall
cause its officers, directors, employees and agents to refrain from disclosing,
any material non-public information to the Investor without also disseminating
such information to the public, unless prior to disclosure of such information
the Company identifies such information as being material non-public information
and provides the Investor with the opportunity to accept or refuse to accept
such material non-public information for review.

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      Article
IX.

      Choice
of Law/Jurisdiction

      

      This
Agreement shall be governed by and interpreted in accordance with the laws of
the State of New Jersey without regard to the principles of conflict of
laws.  The parties further agree that any action between them shall be
heard in Hudson County, New Jersey, and expressly consent to the jurisdiction
and venue of the Superior Court of New Jersey, sitting in Hudson County, New
Jersey and the United States District Court of New Jersey, sitting in Newark,
New Jersey, for the adjudication of any civil action asserted pursuant to this
paragraph.

      

      Article
X. Assignment; Termination

      

      Section
10.01  Assignment.  Neither
this Agreement nor any rights of the Company hereunder may be assigned to any
other Person.

      

      Section
10.02  Termination.

      

      
        
          	
                	
                  (a) 

                	
                  Unless
      earlier terminated as provided hereunder, this Agreement shall terminate
      automatically on the earliest of (i) the first day of the month next
      following the 36-month anniversary of the Effective Date, or (ii) the date
      on which the Investor shall have made payment of Advances pursuant to this
      Agreement in the aggregate amount of the Commitment
  Amount.

                

        

      

      

      
        
          	
                	
                  (b) 

                	
                  The
      Company may terminate this Agreement effective upon fifteen Trading Days’
      prior written notice to the Investor; provided that (i) there are no
      Advances outstanding, and (ii) the Company has paid all amounts owed to
      the Investor pursuant to this Agreement.  This Agreement may be
      terminated at any time by the mutual written consent of the parties,
      effective as of the date of such mutual written consent unless otherwise
      provided in such written consent.  In the event of any
      termination of this Agreement by the Company hereunder, so long as the
      Investor owns any shares of Common Stock issued hereunder, unless all of
      such shares of Common Stock may be resold by the Investor without
      registration and without any time, volume or manner limitations pursuant
      to Rule 144, the Company shall not suspend (except as provided for in
      the Registration Rights Agreement) or withdraw the Registration Statement
      or otherwise cause the Registration Statement to become ineffective, or
      voluntarily delist the Common Stock from, the Principal Market without
      listing the Common Stock on another Principal
  Market.

                

        

      

      

      
        
          	
                	
                  (c) 

                	
                  The
      obligation of the Investor to make an Advance to the Company pursuant to
      this Agreement shall terminate permanently (including with respect to an
      Advance Date that has not yet occurred) in the event that (i) there shall
      occur any stop order or suspension of the effectiveness of the
      Registration Statement for an aggregate of 50 Trading Days, other than due
      to the acts of the Investor, during the Commitment Period, or (ii) the
      Company shall at any time fail materially to comply with the requirements
      of Article VI and such failure is not cured within 30 days after receipt
      of written notice from the Investor,provided, however, that
      this termination provision shall not apply to any period commencing upon
      the filing of a post-effective amendment to such Registration Statement
      and ending upon the date on which such post effective amendment is
      declared effective by the SEC

                

        

      

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
        
          	
                	
                  (d) 

                	
                  Nothing
      in this Section 10.02 shall be deemed to release the Company or the
      Investor from any liability for any breach under this Agreement, or to
      impair the rights of the Company and the Investor to compel specific
      performance by the other party of its obligations under this
      Agreement.  The indemnification provisions contained in Section
      5.01 shall survive termination
hereunder.

                

        

      

      

      Article
XI. Notices

      

      Any
notices, consents, waivers, or other communications required or permitted to be
given under the terms of this Agreement must be in writing and will be deemed to
have been delivered (i) upon receipt, when delivered personally; (ii) upon
receipt, when sent by facsimile, provided a copy is mailed by U.S. certified
mail, return receipt requested; (iii) 3 days after being sent by U.S. certified
mail, return receipt requested, or (iv) 1 day after deposit with a nationally
recognized overnight delivery service, in each case properly addressed to the
party to receive the same.  The addresses and facsimile numbers for
such communications, except for advance Notices which shall be delivered in
accordance with Section 2.02 hereof, shall be:

       

      
        	
                If
      to the Company, to:

              	
                JAG
      Media Holdings, Inc.

              
	 
      	
                6865
      SW 18th
      Street, Suite B13

              
	 
      	
                Boca
      Raton, Florida 33433

              
	 
      	
                Attention:    Mr.
      Stephen Schoepfer

              
	 
      	
                Telephone:  (866)
      300-7410 Ext. 112

              
	 
      	
                Facsimile:  (866)
      488-0894

              
	 
      	 
      
	
                With
      a copy to:

              	
                JAG
      Media Holdings, Inc.

              
	 
      	
                6865
      SW 18th
      Street, Suite B13

              
	 
      	
                Boca
      Raton, Florida 33433

              
	 
      	
                Attention:  Thomas
      J. Mazzarisi

              
	 
      	
                Telephone:  (866)
      300-7410 Ext. 111

              
	 
      	
                Facsimile:  (866)
      654-2837

              
	 
      	 
      
	
                If
      to the Investor(s):

              	
                YA
      Global Master SPV Ltd.

              
	 
      	
                101
      Hudson Street –Suite 3700

              
	 
      	
                Jersey
      City, NJ 07302

              
	 
      	
                Attention:  Mark
      Angelo

              
	 
      	
                                   
      Portfolio Manager

              
	 
      	
                Telephone:  (201)
      985-8300

              
	 
      	
                Facsimile:  (201)
      985-8266

              
	 
      	 
      
	
                With
      a Copy to:

              	
                David
      Gonzalez, Esq.

              
	 
      	
                101
      Hudson Street – Suite 3700

              
	 
      	
                Jersey
      City, NJ 07302

              
	 
      	
                Telephone:  (201)
      985-8300

              
	 
      	
                Facsimile:  (201)
      985-8266

              

      

      

      Each
party shall provide 5 days’ prior written notice to the other party of any
change in address or facsimile number.

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

      Article
XII. Miscellaneous

      

      Section
12.01  Counterparts.  This
Agreement may be executed in two or more identical counterparts, all of which
shall be considered one and the same agreement and shall become effective when
counterparts have been signed by each party and delivered to the other
party.  In the event any signature page is delivered by facsimile
transmission, the party using such means of delivery shall cause 4 additional
original executed signature pages to be physically delivered to the other party
within 5 days of the execution and delivery hereof, though failure to deliver
such copies shall not affect the validity of this Agreement.

      

      Section
12.02  Entire Agreement;
Amendments.  This Agreement supersedes all other prior oral or
written agreements between the Investor, the Company, their affiliates and
persons acting on their behalf with respect to the matters discussed herein, and
this Agreement, the Registration Rights Agreement and the instruments referenced
herein contain the entire understanding of the parties with respect to the
matters covered herein and therein and, except as specifically set forth herein
or therein, neither the Company nor the Investor 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 party to be charged with enforcement.

      

      Section
12.03  Reporting Entity for the
Common Stock.  The reporting entity relied upon for the
determination of the trading price or trading volume of the Common Stock on any
given Trading Day for the purposes of this Agreement shall be Bloomberg, L.P. or
any successor thereto.  The written mutual consent of the Investor and
the Company shall be required to employ any other reporting entity.

      

      Section
12.04    Commitment
Fee.  On the 11th Trading
Day immediately following the effective date of the Company’s acquisition of
CardioGenics, Inc. (the “Acquisition”)
(provided that the Commencement Date as defined in the Registration Rights
Agreement has occurred) the Company shall issue to the Investor shares of Common
Stock in an amount equal to $250,000 divided by the average of the VWAPs for
each of the 10 Trading Days following the effective date of the Acquisition (the
“Investor’s
Shares”).  The Investor’s Shares shall be deemed fully earned
as of the date they are issued regardless of the amount of Advances, if any,
that the Company is able to, or chooses to, request hereunder.  The
Investor’s Shares shall be included on any registration statement filed by the
Company after the date hereof, unless such shares may be resold without any
limitation pursuant to Rule 144.

      

      Section
12.05  Brokerage.  Each
of the parties hereto represents that it has had no dealings in connection with
this transaction with any finder or broker who will demand payment of any fee or
commission from the other party.  The Company on the one hand, and the
Investor, on the other hand, agree to indemnify the other against and hold the
other harmless from any and all liabilities to any person claiming brokerage
commissions or finder’s fees on account of services purported to have been
rendered on behalf of the indemnifying party in connection with this Agreement
or the transactions contemplated hereby.

      

      Section
12.06  Confidentiality.  If
for any reason the transactions contemplated by this Agreement are not
consummated, each of the parties hereto shall keep confidential any information
obtained from any other party (except information publicly available or in such
party’s domain prior to the date hereof, and except as required by court order)
and shall promptly return to the other parties all schedules, documents,
instruments, work papers or other written information without retaining copies
thereof, previously furnished by it as a result of this Agreement or in
connection herein.

      

      [REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

      

      IN WITNESS WHEREOF, the
parties hereto have caused this Standby Equity Distribution Agreement to be
executed by the undersigned, thereunto duly authorized, as of the date first set
forth above.

       

       

      
        
          	 
      	
                  COMPANY:

                
	 
      	
                  JAG
      Media Holdings, Inc.

                
	 
      	 
      	 
      	 
      
	 
      	
                  By:

                	      
                  /s/
      Thomas J. Mazzarisi

                	 
      
	 
      	
                  Name:  
      

                	
                  Thomas
      J. Mazzarisi

                	 
      
	 
      	
                  Title:

                	
                  Chairman
      & CEO

                	 
      
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	 
      	
                  INVESTOR:

                
	 
      	
                  YA
      Global  Master SPV Ltd.

                
	 
      	 
      	 
      	 
      
	 
      	
                  By:

                	
                  Yorkville
      Advisors, LLC

                	 
      
	 
      	
                  Its:

                	
                  Investment
      Manager

                	 
      
	 
      	 
      	 
      	 
      
	 
      	
                  By:

                	      
                  /s/
      Mark Angelo

                	 
      
	 
      	
                  Name:

                	
                  Mark
      Angelo

                	 
      
	 
      	
                  Title:

                	
                  Portfolio
      Manager

                	 
      

        

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

      EXHIBIT
A

      

      ADVANCE
NOTICE

      

      JAG
MEDIA HOLDINGS, INC.

      

      The
undersigned, _______________________ hereby certifies, with respect to the sale
of shares of Common Stock of JAG MEDIA HOLDINGS, INC. (the
“Company”)
issuable in connection with this Advance Notice, delivered pursuant to the
Standby Equity Purchase Agreement (the “Agreement”), as
follows:

      

      1.  The
undersigned is the duly elected ______________ of the Company.

      

      2.  There
are no fundamental changes to the information set forth in the Registration
Statement which would require the Company to file a post effective amendment to
the Registration Statement.

      

      3.   The
Company has performed in all material respects all covenants and agreements to
be performed by the Company and has complied in all material respects with all
obligations and conditions contained in this Agreement on or prior to the
Advance Notice Date, and shall continue to perform in all material respects all
covenants and agreements to be performed by the Company through the applicable
Advance Date.  All conditions to the delivery of this Advance Notice
are satisfied as of the date hereof.

      

      4.  The
undersigned hereby represents, warrants and covenants that it has made all
filings (“SEC
Filings”) required to be made by it pursuant to applicable securities
laws (including, without limitation, all filings required under the Securities
Exchange Act of 1934, which include Forms 10-Q or 10-QSB, 10-K or 10-KSB, 8-K,
etc.).  All SEC Filings and other public disclosures made by the
Company, including, without limitation, all press releases, analysts meetings
and calls, etc. (collectively, the “Public Disclosures”),
have been reviewed and approved for release by the Company’s attorneys and, if
containing financial information, the Company’s independent certified public
accountants.  None of the Company’s Public Disclosures contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading.

      

      5.  The
Advance requested is _____________________.

      

      The
undersigned has executed this Certificate this ____ day of
_________________.

       

      
        	 	
                JAG
      MEDIA HOLDINGS, INC.

                

                By:_____________________________________

                Name:

                Title:

              

      

       

       

      
        If
Returning This Advance Notice via Facsimile Please Send To:  (201)
946-0851

         

        
          
            	
                    If
      by Mail, via Federal Express To:

                  	
                    YA
      Global Master SPV Ltd., c/o Yorkville Advisors, LLC

                    101
      Hudson Street, Suite 3700, Jersey City, NJ
07302

                  

          

        

         

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      EXHIBIT
B

      

      FORM
OF OPINION

      

      1.  The
Company is a corporation validly existing and in good standing under the laws of
the State of Delaware, with corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the Company’s
public filings, including reports filed or furnished by the Company under the
Securities Exchange Act of 1934, as amended, (the “Exchange Act”) and
the rules and regulations of the Commission thereunder (the “Public Filings”) and
to enter into and perform its obligations under the Transaction
Documents.

      

      2.  The
Company has the requisite corporate power and authority to enter into and
perform its obligations under the Transaction Documents and to issue the Common
Shares in accordance with their terms.  The execution and delivery of
the Transaction Documents by the Company and the consummation by it of the
transactions contemplated thereby have been duly authorized by all necessary
corporate action, and no further consent or authorization of the Company or its
Board of Directors or stockholders is required.  Each of the
Transaction Documents has been duly executed and delivered, and each of the
Transaction Documents constitute valid and binding obligations of the Company
enforceable against the Company in accordance with their respective
terms.

      

      3.  The
Common Shares are duly authorized and, upon issuance in accordance with the
terms of the Transaction Documents, will be duly and validly issued, fully paid
and nonassessable, free of any liens, encumbrances and preemptive or similar
rights contained in the Company’s Certificate of Incorporation or By-laws or, to
our knowledge, in any agreement filed by the Company as an exhibit to the
Company’s Public Filings.

      

      4.  The
execution, delivery and performance of the Transaction Documents by the Company
and the consummation by the Company of the transactions contemplated thereby
(other than performance by the Company of its obligations under the
indemnification sections of such agreements, as to which no opinion need be
rendered) will not (i) result in a violation of the Company’s Certificate of
Incorporation or By-Laws; (ii) conflict with, or constitute a default (or an
event that with notice or lapse of time or both would become a default) under,
or give to others any rights of termination, amendment, acceleration or
cancellation of, any agreement or, indenture filed by the Company as an exhibit
to the Company's Public Filings; or (iii) to our knowledge, result in a
violation of any federal or Nevada law, rule or regulation, order, judgment or
decree applicable to the Company or by which any property or asset of the
Company is bound or affected.

      

      5.  Based
upon your representations, warranties and covenants contained in the Transaction
Documents, the Common Shares may be issued to you without registration under the
Securities Act of 1933, as amended.

       

      6.  To
our knowledge and other then as set forth in the Public Filings, there are no
legal or governmental proceedings pending to which the Company is a party or of
which any property or assets of the Company is subject which is required to be
disclosed in any Public Filings.

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