Reservation of Shares Issuable Upon Conversion

Reservation of Shares Issuable Upon Conversion. The Company covenants that it will at all times reserve and keep available out of its authorized and unissued shares of Common Stock for the sole purpose of issuance under this Section 2, free from preemptive rights or any other actual contingent purchase rights of Persons other than the Holders, not less than such aggregate number of shares of the Common Stock as shall be issuable under this Section 2 (taking into account the adjustments and restrictions of Section 3). The Company covenants... that all shares of Common Stock that shall be so issuable shall, upon issue, be duly authorized, validly issued, fully paid and nonassessable. The Company also covenants that the underlying shares of Common Stock that will be issued upon conversion of the Debenture and the common stock underlying warrants (the "Warrants") to be issued upon conversion will be fully registered as part of the anticipated firm commitment stock offering the Company intends to conduct to raise three million dollars ($3,000,000) (the "Offering"). Further, we acknowledge that if the Offering either is not filed within four weeks from the Original Issue Date or if the Offering is not declared effective by the Securities and Exchange Commission (the "SEC") within 2 months from the date of filing the registration statement, then the Company will immediately offer registration and piggy-back rights to our potential investors (the "Investors") for any subsequent offering if the Offering is not consummated. View More