Common use of Shareholder Authorization Clause in Contracts

Shareholder Authorization. The Company currently has 25,000,000 shares of Common Stock authorized, 24,099,381 of which are issued and outstanding, and 900,619 of which the Company has reserved or agrees to reserve for issuance upon exercise of the Commitment Warrant. The Company shall. at its next annual shareholder meeting, or at a special meeting to be held before its next annual shareholder meeting, use its best efforts to obtain approval of its shareholders to (i) authorize the issuance of the full number of shares of Common Stock which would be issuable upon exercise of the Commitment Warrant or would otherwise be issuable under this Agreement and eliminate any prohibitions under applicable law or the rules or regulations of any stock exchange, interdealer quotation system or other self-regulatory organization with jurisdiction over the Company or any of its securities with respect to the Company's ability to issue shares of Common Stock in excess of the Cap Amount (such approvals being the "20% Approval") and (ii) the increase in the number of authorized shares of Common Stock of the Company (the "Share Authorization Increase Approval") such that at least 10,000,000 shares can be reserved for this Offering. In connection with such shareholder vote, the Company shall use its best efforts to cause all officers and directors of the Company to promptly enter into irrevocable agreements to vote all of their shares in favor of eliminating such prohibitions. As soon as practicable after the 20% Approval and the Share Authorization Increase Approval, the Company agrees to use its best efforts to reserve 10,000,000 shares of Common Stock for issuance under this Agreement, which shall first be reserved toward the Warrant Shares issuable upon exercise of the Commitment Warrant until an aggregate of 1,000,000 shares are so reserved, with the remainder to be reserved for issuance as Put Shares and Warrant Shares issuable upon exercise of the Purchase Warrants. The Company shall not file the Registration Statement required by the Registration Rights Agreement until the Share Authorization Increase Approval has been obtained, and the parties understand that this may delay the Company's ability to initiate Puts indefinitely, provided that nothing in this sentence shall limit the Company's obligations under this Agreement or any of the agreements referred to herein.