Common use of Protective Provisions Clause in Contracts

Protective Provisions. Until the closing by the Company of an additional $5,000,000 equity financing from institutional investors, approval of the holders of at least 2/3 of the outstanding shares of the Series A-1 Preferred voting together separately as a class will be required for: a) a merger, sale of all, or substantially all of the assets or intellectual property, recapitalization, or reorganization the Company; b) the authorization or issuance of any equity security having any right, preference or priority superior to or on parity with the Series A-1 Preferred (excluding debt not convertible into any such senior or pari passu equity security); c) the redemption, repurchase or acquisition, directly or indirectly, through subsidiaries or otherwise, of any equity securities (other than the repurchase of equity securities of the Company at cost upon termination of employment or service pursuant to vesting agreements or stockholder agreements or a repurchase of the Series A-1 Preferred) or the payment of dividends or other distributions on equity securities by the Company (other than on the Series A-1 Preferred); d) any amendment or repeal of any provision of the Company’s certificate of incorporation or by-laws that would adversely affect the rights, preferences, or privileges of the Series A-1 Preferred; e) a significant change in the principal business of the Company as conducted at the time of the consummation of the closing of the Merger; f) the making of any loan or advance to any entity other than in the ordinary course of business unless it is wholly owned by the Company; g) the making of any loan or advance to any person, including, without limitation, any employee or director of the Company or any subsidiary, except advances and similar expenditures in the ordinary course of business or under the terms of an employee stock or option plan approved by the Board of Directors and Investor; or h) the guarantee, directly or indirectly, of any indebtedness or obligations, except for trade accounts of any subsidiary arising in the ordinary course of business. Any liquidation, dissolution, recapitalization or reorganization of the Company would require a unanimous vote of the Board Closing Condition- Series D: The Company further agrees to release approximately $780,000 held in Escrow to SDS Merchant Fund upon closing. SDS shall in lieu ‘put’ back the equivalent Series D stock as per the agreement laid out in the Series-D Securities Purchase Agreement dated March, 2003.

Protective Provisions. Until the closing by the Company of an additional $5,000,000 equity financing from institutional investors, approval So long as any of the holders shares of at least 2/3 Series E Preferred Stock are outstanding, the Corporation shall not, without first obtaining the approval (by vote or written consent) of the Holders of a majority of the then outstanding shares of the Series A-1 E Preferred voting together separately as a class will be required for: aStock (i) a merger, sale of all, or substantially all of the assets or intellectual property, recapitalization, or reorganization the Company; b) the authorization or issuance of any equity security having any right, preference or priority superior to or on parity with the Series A-1 Preferred (excluding debt not convertible into any such senior or pari passu equity security); c) the redemption, repurchase or acquisition, directly or indirectly, through subsidiaries or otherwise, of any equity securities (other than the repurchase of equity securities of the Company at cost upon termination of employment or service pursuant to vesting agreements or stockholder agreements or a repurchase of the Series A-1 Preferred) or the payment of dividends or other distributions on equity securities by the Company (other than on the Series A-1 Preferred); d) any amendment or repeal of any provision of the Company’s certificate of incorporation or by-laws that would adversely affect amend the rights, preferences, preferences or privileges of the Series A-1 PreferredE Preferred Stock set forth in this Statement With Respect to Shares; e(ii) a significant change in create any new class or series of capital stock that would constitute Senior Securities or Pari Passu Securities; (iii) redeem, or declare or pay any dividend or other distribution on account of, any shares of Common Stock or Junior Securities (other than pursuant to the principal business terms of any stock option plan for directors, officers, employees, advisors or consultants approved by the Board of Directors); (iv) amend, alter or repeal any provision of the Company as conducted at the time Articles of Incorporation or Bylaws of the consummation Corporation; (v) effect any transaction that would be deemed a Liquidation Event (as defined in Section 6(a)) or Corporate Change (as defined in Section 7(b) hereof); (vi) authorize or enter into any transaction or series or related transactions in which the holder or holders of capital stock of the closing Corporation immediately prior to such transaction or series of transactions will hold, immediately after such transaction or series of transactions, less than a majority of the Mergeraggregate voting power of the outstanding capital stock of the surviving entity; f(vii) increase or decrease the making authorized number of directors constituting the Board of Directors; (viii) decrease the number of authorized shares of Preferred Stock; (ix) redeem or offer to redeem any loan shares of Series E Preferred Stock; (x) authorize or advance to effect a transaction in which the Corporation would incur any entity debt secured by the assets of the Corporation or amend its current secured debt facility; or (xi) enter into any transaction, other than employment or consulting agreements in the ordinary course of business unless it is wholly owned by the Company; gon a basis consistent with past practices, with any officer, director or beneficial owner of five percent (5%) the making of any loan or advance to any person, including, without limitation, any employee or director more of the Company Common Stock or any subsidiaryaffiliate of the foregoing. Notwithstanding the foregoing, except advances no consent or approval of the Holders will be required for, and similar expenditures in the ordinary course of business or under the terms of an employee stock or option plan approved by the Board of Directors and Investor; or h) is expressly authorized to provide for, the guaranteeissuance of shares of Preferred Stock if such series would constitute Junior Securities, directly or indirectly, of any indebtedness or obligations, except for trade accounts of any subsidiary arising in by filing a certificate pursuant to the ordinary course of business. Any liquidation, dissolution, recapitalization or reorganization applicable law of the Company would require a unanimous vote Commonwealth of Pennsylvania, to establish from time to time the number of shares to be included in each such series, and to fix the designation, powers, preferences and rights of the Board Closing Condition- Series D: The Company further agrees to release approximately $780,000 held in Escrow to SDS Merchant Fund upon closing. SDS shall in lieu ‘put’ back the equivalent Series D stock as per the agreement laid out in the Series-D Securities Purchase Agreement dated Marchshares of each such series and any qualifications, 2003limitations or restrictions thereon.

Protective Provisions. Until For so long as any shares of Series A Preferred Stock remain outstanding, the closing Corporation shall not (including, without limitation by amendment to the Company of an additional $5,000,000 equity financing from institutional investorsCharter or through a merger or consolidation, approval or otherwise), without the consent or the affirmative vote of the holders of at least 2/3 fifty-one percent (51%) of the outstanding shares of the Series A-1 A Preferred Stock outstanding at the time (the “Series A Majority”), given in person or by proxy, either in writing or at a meeting (with the Series A Preferred Stock voting together separately as a class will be required for: aclass), (i) a mergervoluntarily or involuntarily liquidate, sale of alldissolve or wind up the Corporation, or substantially all of the assets effect any merger or intellectual property, recapitalization, consolidation or reorganization the Company; b) the authorization or issuance of any equity security having any right, preference or priority superior to or on parity with the Series A-1 Preferred (excluding debt not convertible into any such senior or pari passu equity security); c) the redemption, repurchase or acquisition, directly or indirectly, through subsidiaries or otherwise, of any equity securities other liquidation event (other than the repurchase of equity securities merger between an affiliate of the Company at cost upon termination of employment Corporation and Xxxxx Watermark Investors Incorporated on the Original Issue Date); provided, however, that the consent or service pursuant to vesting agreements or stockholder agreements or a repurchase the affirmative vote of the Series A-1 PreferredA Majority shall not be required if, at the effective time of consummation of such transaction described in this clause (i) or (except to the payment of dividends or other distributions on equity securities by the Company (other than on extent as otherwise provided in Section 6(b) above), the Series A-1 Preferred)A Preferred receive the then-due full redemption price pursuant to Section 6(b) above; d(ii) any amendment amend, alter, or repeal of any provision of the CompanyCorporation’s certificate Charter or bylaws or the governing documents of incorporation or by-laws its operating partnership in a manner that would affects adversely affect the rights, preferences, privileges or voting rights of the holders of the Series A Preferred; (iii) authorize, create or issue shares of any class or series of stock of the Corporation or any other security convertible into or exercisable for any equity security, having rights, preferences or privileges senior to the Series A Preferred, or increase the authorized number of shares of Series A Preferred; provided, however, that any amendment to the Charter to authorize any increase in the number of authorized shares of Preferred Stock or Common Stock or the creation or issuance of any other class or series of Parity Securities or Junior Securities, shall not be deemed to adversely affect any right, preference, privilege or voting right of shares of Series A Preferred Stock; or (iv) purchase or redeem capital stock of the Corporation (excluding shares purchased pursuant to the Corporation’s share redemption plan to the extent funded with proceeds from the Corporation’s dividend reinvestment plan, or DRIP),3 except with respect to this clause (iv) as necessary to maintain the REIT status of the Corporation. For purposes of this Section 8(b), the filing in accordance with applicable law of articles supplementary or any similar document setting forth or changing the designations, preferences, conversion or other rights, voting powers, restrictions, limitation as to dividends and other distributions, qualifications or other terms of any class or series of stock of the Corporation shall be deemed an amendment to the Charter. Except as set forth herein, the holders of the Series A Preferred Stock shall not have any voting rights with respect to, and the consent of the holders of shares of the Series A Preferred Stock shall not be required for, the taking of any corporate action that is required to maintain the REIT status of the Corporation, regardless of the effect that such corporate action or event may have upon the powers, preferences, voting power or other rights or privileges of the Series A-1 Preferred; e) a significant change in the principal business of the Company as conducted at the time of the consummation of the closing of the Merger; f) the making of any loan or advance to any entity other than in the ordinary course of business unless it is wholly owned by the Company; g) the making of any loan or advance to any person, including, without limitation, any employee or director of the Company or any subsidiary, except advances and similar expenditures in the ordinary course of business or under the terms of an employee stock or option plan approved by the Board of Directors and Investor; or h) the guarantee, directly or indirectly, of any indebtedness or obligations, except for trade accounts of any subsidiary arising in the ordinary course of business. Any liquidation, dissolution, recapitalization or reorganization of the Company would require a unanimous vote of the Board Closing Condition- Series D: The Company further agrees to release approximately $780,000 held in Escrow to SDS Merchant Fund upon closing. SDS shall in lieu ‘put’ back the equivalent Series D stock as per the agreement laid out in the Series-D Securities Purchase Agreement dated March, 2003A Preferred Stock.

Protective Provisions. Until So long as the closing by Series B Preferred Stock remains outstanding, the Company of an additional $5,000,000 equity financing shall not, without the vote or written consent from institutional investors, approval of the holders of at least 2/3 of the outstanding shares a majority of the Series A-1 B Preferred voting together separately as a class will be required for: a) a mergerStock, sale of allincluding XL (the “Series B Majority”), or substantially all take any of the assets or intellectual property, recapitalization, or reorganization actions described requiring the Company; b) the authorization or issuance of any equity security having any right, preference or priority superior to or on parity with the Series A-1 Preferred (excluding debt not convertible into any such senior or pari passu equity security); c) the redemption, repurchase or acquisition, directly or indirectly, through subsidiaries or otherwise, of any equity securities (other than the repurchase of equity securities of the Company at cost upon termination of employment or service pursuant to vesting agreements or stockholder agreements or a repurchase approval of the Series A-1 PreferredA Preferred Director pursuant to the Current Charter, as well as (i) adversely and disproportionately alter or change the payment rights, preferences or privileges of dividends or other distributions on equity securities by the Company (other than on the Series A-1 Preferred); dB Preferred Stock, (ii) any amendment amend or repeal of waive any provision of the Company’s certificate Certificate of incorporation Incorporation or byBy-laws in a manner that would adversely affect and disproportionately alter or change the rights, preferences, preferences or privileges of the Series A-1 PreferredB Preferred Stock, or (iii) increase or decrease the authorized number of shares of Series B Preferred Stock. It is understood that the creation of a senior to or pari passu series or class of stock shall not, by itself, trigger clauses (i) or (ii); e) a significant change nor shall the proportional differences in the principal business amounts of respective issue prices, liquidation preferences, and conversion prices arising out of differences in the original issue price vis-à-vis other series or class of stock. The Company’s charter will provide that, except as provided by law and indicated above, each series of Preferred Stock will vote together with all other series of Preferred Stock on all matters, and not as a separate series or class. Drag-Along: In connection with any Deemed Liquidation Event, all of the Company as conducted at Company’s stockholders shall vote for any such Deemed Liquidation Event approved by (i) the time Board; (ii) the approval of the consummation holders of a majority of the closing Common Stock; and (iii) the holders of a majority of the Merger; f) the making of any loan or advance Preferred Stock, which shall include XL for so long as it holds Preferred Stock, voting together as a separate class. The Company’s equity incentive plan will contain provisions binding all optionees to any entity other than in the ordinary course of business unless it is wholly owned by the Company; g) the making of any loan or advance to any person, including, without limitation, any employee or director of the Company or any subsidiary, except advances and similar expenditures in the ordinary course of business or under the terms of an employee stock or option plan approved by the Board of Directors and Investor; or h) the guarantee, directly or indirectly, of any indebtedness or obligations, except for trade accounts of any subsidiary arising in the ordinary course of business. Any liquidation, dissolution, recapitalization or reorganization of the Company would require a unanimous vote of the Board Closing Condition- Series D: The Company further agrees to release approximately $780,000 held in Escrow to SDS Merchant Fund upon closing. SDS shall in lieu ‘put’ back the equivalent Series D stock as per the agreement laid out in the Series-D Securities Purchase Agreement dated March, 2003this provision.

Protective Provisions. Until So long as any of Series B Preferred Shares are outstanding, the closing Corporation shall not without first obtaining the approval (by the Company of an additional $5,000,000 equity financing from institutional investors, approval vote or written consent) of the holders of at least 2/3 of the outstanding shares a majority of the Series A-1 B Preferred Shares then outstanding, voting together separately as a class will be required forseparate class: a) a merger8.1. sell, sale lease, exchange, transfer, convey, exclusively license or otherwise dispose of all, all or substantially all of the Corporation's assets or intellectual propertymerge into or consolidate with any other corporation (other than a wholly-owned subsidiary corporation provided that the Corporation is the surviving corporation) or effect any transaction or series of related transactions in which 50% or more of the voting power of the Corporation is transferred or otherwise disposed of; 8.2. amend, recapitalizationalter, or reorganization repeal any provision of the CompanyCorporation's certificate of incorporation or Bylaws (whether by merger, consolidation or otherwise) if such amendment, alteration or repeal would alter or change the powers, preferences or special rights of the Series B Preferred Shares so as to effect them adversely; b) 8.3. authorize, create or issue any class or series of stock or any other securities convertible into or exercisable for or issued in connection with equity securities of the authorization Corporation having rights, preferences or issuance of any equity security having any right, preference or priority privileges superior to or on parity with the Series A-1 B Preferred (excluding debt not convertible into Shares; 8.4. increase or decrease the number of authorized shares of Series B Preferred Stock; 8.5. pay any such senior dividend or pari passu equity security); c) the redemptionother distribution on, or make any repurchase or acquisitionredemption of, directly or indirectly, through subsidiaries or otherwise, any shares(s) of any equity securities (class or series of stock or other than the repurchase of equity securities of the Company at cost upon termination of employment Corporation; provided, however, that this restriction shall not apply to the redemption described in Section 4; 8.6. incur any debt obligations or service pursuant to vesting agreements or stockholder agreements or a repurchase of the Series A-1 Preferred) or the payment of dividends or any other distributions on equity securities by the Company liabilities (other than beyond those existing on the Series A-1 PreferredB Issuance Date), provided such restrictions will apply only with respect to: (A) the funding of merger, consolidation and acquisition transactions (or the portion thereof) undertaken by the Corporation or its affiliates that are paid in cash; dand (B) financings by the Corporation and/or any amendment or repeal of any provision its subsidiaries (collectively, the "CBH Group") that are undertaken outside of the Company’s certificate of incorporation or by-laws that would adversely affect the rights, preferences, or privileges of the Series A-1 Preferred; e) a significant change in the principal business of the Company as conducted at the time of the consummation of the closing of the Merger; f) the making of any loan or advance to any entity other than in the ordinary normal course of business unless it is wholly owned such as capital expenditure, bank financing or refinancing, or similar funding normally undertaken by the CompanyCBH Group pursuant to prior board approvals or within pre-approved operating budgets; g) 8.7. asset disposals by the making CBH Group over cumulative amount of $10,000,000 or resulting in total remaining carrying cost of net property, plant and equipment and other long-term tangible assets of the CBH Group decreasing below $15,000,000; 8.8. diversifications into ventures not related to the Corporation's core business on the Series B Issuance Date; 11 <PAGE> 8.9. the departure of Xx. Xxx Mingsheng or Mm. Xxxxx Xxxx from the CBH Group (voluntary or otherwise); or 8.10. the occurrence of any loan transaction or advance series of related transaction pursuant to any person, including, without limitation, any employee or director which stockholders of the Corporation comprising members of its senior management and directors on the Series B Issuance Date, and those shareholders affiliated with Suzhou Erye Pharmaceutical Company Ltd., sell, exchange, transfer, convey, pledge or otherwise dispose in full or in part any subsidiary, except advances and similar expenditures of their securities in the ordinary course Corporation to an unrelated third party who then as a result will have the ability to exert control of business or under the terms Corporation by virtue of an employee stock or option plan approved by gaining control of the Board of Directors and Investor; or h) the guarantee, directly or indirectly, of any indebtedness or obligations, except for trade accounts of any subsidiary arising in the ordinary course of businessthrough other similar means. Any liquidation, dissolution, recapitalization or reorganization of the Company would require a unanimous vote of the Board Closing Condition- Series D: The Company further agrees to release approximately $780,000 held in Escrow to SDS Merchant Fund upon closing. SDS shall in lieu ‘put’ back the equivalent Series D stock as per the agreement laid out in the Series-D Securities Purchase Agreement dated March, 20039.

Protective Provisions. Until fewer than 1,000,000 shares of Convertible Preferred Stock are outstanding (as adjusted for stock splits, stock dividends and the closing by like), the Company shall not, without the approval of an additional $5,000,000 equity financing from institutional investors, approval the Board of Directors and the affirmative vote or written consent of the holders of at least 2/3 a majority of the then outstanding shares of Convertible Preferred Stock: (i) authorize or issue (including, without limitation, by way of recapitalization), or obligate itself to authorize or issue, any equity security of the Series A-1 Corporation, or any other security exercisable for or convertible into an equity security of the Corporation, that has redemption rights or that is senior to or on parity with the Convertible Preferred Stock as to dividend rights, voting together separately as a class will be required for: arights, liquidation preferences or any other rights, preferences or privileges; (ii) a mergerincrease or decrease (other than by conversion) the total number of authorized shares of Convertible Preferred Stock or Common Stock; (iii) effect any sale, sale lease, assignment, transfer or other conveyance or encumbrance of all, all or substantially all of the assets of the Corporation or intellectual property, recapitalizationany of its subsidiaries in one or more related transactions, or reorganization any consolidation or merger resulting in a change in control of the Company; b) the authorization , or issuance any reclassification, recapitalization or other change of any equity security having any right, preference capital stock of the Corporation; (iv) change the authorized number of directors of the Corporation; (v) amend or priority superior to or on parity with repeal the Series A-1 Preferred Certificate (excluding debt not convertible into any such senior or pari passu equity security); c) the redemption, repurchase or acquisition, directly or indirectly, through subsidiaries or otherwise, including by way of any equity securities Certificate of Designation) or the Corporation’s Bylaws; (other than vi) redeem, purchase or otherwise acquire (or pay into or set aside for a sinking fund for such purpose) any of the Common Stock or common stock equivalents; provided, however, that this restriction shall not apply to the repurchase of equity securities up to a maximum of $100,000 of Common Stock per year from employees, officers, directors, consultants, advisors or other persons performing services for the Company Corporation, pursuant to agreements under which the Corporation has the option to repurchase such shares at cost upon the occurrence of certain events, such as the termination of employment employment; (vii) effect the liquidation, dissolution or service pursuant to vesting agreements or stockholder agreements or a repurchase winding up of the Series A-1 PreferredCorporation; or (viii) agree, promise, commit or the payment of dividends or other distributions on equity securities by the Company (other than on the Series A-1 Preferred); d) undertake to do any amendment or repeal of any provision of the Company’s certificate of incorporation or by-laws that would adversely affect the rights, preferences, or privileges of the Series A-1 Preferred; e) a significant change in the principal business of the Company as conducted at the time of the consummation of the closing of the Merger; f) the making of any loan or advance to any entity other than in the ordinary course of business unless it is wholly owned by the Company; g) the making of any loan or advance to any person, including, without limitation, any employee or director of the Company or any subsidiary, except advances and similar expenditures in the ordinary course of business or under the terms of an employee stock or option plan approved by the Board of Directors and Investor; or h) the guarantee, directly or indirectly, of any indebtedness or obligations, except for trade accounts of any subsidiary arising in the ordinary course of business. Any liquidation, dissolution, recapitalization or reorganization of the Company would require a unanimous vote of the Board Closing Condition- Series D: The Company further agrees to release approximately $780,000 held in Escrow to SDS Merchant Fund upon closing. SDS shall in lieu ‘put’ back the equivalent Series D stock as per the agreement laid out in the Series-D Securities Purchase Agreement dated March, 2003foregoing.

Protective Provisions. Until Subject to Delaware law, so long as at least 500,000 shares of the closing Series A Preferred Stock remain outstanding and owned by the Investor, the Company of an additional $5,000,000 equity financing from institutional investorsshall not, approval without the approval, by vote or written consent of the holders Investor and a majority of at least 2/3 the Board of Directors of the Company and, if required under Delaware law, a majority of the outstanding shares of voting equity securities of the Company, voting as a single class (1) liquidate, dissolve or wind up the affairs of the Company, or effect any merger or consolidation or any other Deemed Liquidation Event; (2) amend, alter, or repeal any provision of the Company’s Certificate of Incorporation or Bylaws in a manner materially adverse to the Series A-1 A Preferred voting together separately as a class will be required for: aStock; (3) a merger, sale create or authorize the creation of all, or substantially all of the assets issue any other security convertible into or intellectual property, recapitalization, or reorganization the Company; b) the authorization or issuance of exercisable for any equity security security, having any rightrights, preference preferences or priority superior privileges senior to or on parity with the Series A-1 A Preferred Stock, or increase the authorized number of shares of Series A Preferred Stock; (excluding debt 4) purchase or redeem or pay any dividend on any capital stock prior to the Series A Preferred Stock, other than stock repurchased from former employees or consultants in connection with the cessation of their employment/services, at the lower of fair market value or cost, other than as approved by the Board, including the approval of the Series A Directors; (5) adopt any equity incentive plan, unless approved by a majority of the Board of Directors of the Company; (6) sell or dispose of the whole or a substantial part of the assets of the Company and/or any subsidiary; (7) approve or make adjustments or modifications to terms of transactions involving the interest of any director or shareholder of the Company and/or affiliate, including but not convertible into limited to the making of any such senior loans or pari passu equity security); c) the redemptionadvances, repurchase or acquisition, whether directly or indirectly, through subsidiaries or otherwise, the provision of any equity securities (other than the repurchase guarantee, indemnity or security for or in connection with any indebtedness of equity securities liabilities of any director or shareholder of the Company at cost upon termination of employment or service pursuant to vesting agreements or stockholder agreements or a repurchase of the Series A-1 Preferred) or the payment of dividends or other distributions on equity securities by and/or affiliates, except any such transactions between the Company (other than on the Series A-1 Preferred); d) any amendment or repeal of any provision of the Company’s certificate of incorporation or by-laws that would adversely affect the rightsand PESI, preferences, or privileges of the Series A-1 Preferred; e) a significant change in the principal business of the Company as conducted at the time of the consummation of the closing of the Merger; f) the making of any loan and Digirad or advance to any entity other than in the ordinary course of business unless it is wholly owned by the Company; g) the making of any loan or advance to any person, including, without limitation, any employee or director of the Company or any subsidiary, except advances and similar expenditures in the ordinary course of business or under the terms of an employee stock or option plan those transactions that have been approved by a majority of the Board of Directors and Investorof the Company; or h) (8) increase or decrease the guarantee, directly or indirectly, of any indebtedness or obligations, except for trade accounts of any subsidiary arising in the ordinary course of business. Any liquidation, dissolution, recapitalization or reorganization size of the Company would require Board; If at any time the Investor owns a unanimous vote majority of the Board Closing Condition- Series D: The outstanding voting shares of the Company, the Company further agrees to release approximately $780,000 held shall not, without approval, by vote or written consent of the non-Investor shareholders of the Company, carry out or perform any of the actions listed above in Escrow to SDS Merchant Fund upon closing. SDS shall in lieu ‘put’ back the equivalent Series D stock as per the agreement laid out in the Series-D Securities Purchase Agreement dated March, 2003this paragraph “Protective Provisions”.

Protective Provisions. Until the closing by the Company of an additional $5,000,000 equity financing from institutional investors, approval of the holders of at least 2/3 of the outstanding shares of the Series A-1 Preferred voting together separately as a class will be required for: a) a merger, sale of all, or substantially all of the assets or intellectual property, recapitalization, or reorganization of the Company; b) the authorization or issuance of any equity security having any right, preference or priority superior to or on parity with the Series A-1 Preferred (excluding debt not convertible into any such senior or pari passu equity security); c) the redemption, repurchase or acquisition, directly or indirectly, through subsidiaries or otherwise, of any equity securities (other than the repurchase of equity securities of the Company at cost upon termination of employment or service pursuant to vesting agreements or stockholder agreements or a repurchase of the Series A-1 Preferred) or the payment of dividends or other distributions on equity securities by the Company (other than on the Series A-1 Preferred); d) any amendment or repeal of any provision of the Company’s certificate of incorporation or by-laws that would adversely affect the rights, preferences, or privileges of the Series A-1 Preferred; e) a significant change in the principal business of the Company as conducted at the time of the consummation of the closing of the Merger; f) the making of any loan or advance to any entity other than in the ordinary course of business unless it is wholly owned by the Company; g) the making of any loan or advance to any person, including, without limitation, any employee or director of the Company or any subsidiary, except advances and similar expenditures in the ordinary course of business or under the terms of an employee stock or option plan approved by the Board of Directors and Investor; or h) the guarantee, directly or indirectly, of any indebtedness or obligations, except for trade accounts of any subsidiary arising in the ordinary course of business. Any liquidation, dissolution, recapitalization or reorganization of the Company would require a unanimous vote of the Board Closing Condition- Series D: The Company further agrees to release approximately $780,000 held in Escrow to SDS Merchant Fund upon closing. SDS shall in lieu ‘put’ back the equivalent Series D stock as per the agreement laid out in the Series-D Securities Purchase Agreement dated March, 2003.Other Terms

Protective Provisions. Until the closing by the Company of an additional $5,000,000 equity financing from institutional investors, approval of the holders of at least 2/3 of the outstanding shares of the Series A-1 Preferred voting together separately as a class will be required for: (a) a mergerThe Company shall not, sale without the consent of alleach Shareholder: (i) amend, or substantially all of the assets or intellectual property, recapitalization, or reorganization the Company; b) the authorization or issuance of any equity security having any right, preference or priority superior to or on parity with the Series A-1 Preferred (excluding debt not convertible into any such senior or pari passu equity security); c) the redemption, repurchase or acquisition, directly or indirectly, through subsidiaries or otherwise, of any equity securities (other than the repurchase of equity securities of the Company at cost upon termination of employment or service pursuant to vesting agreements or stockholder agreements or a repurchase of the Series A-1 Preferred) or the payment of dividends or other distributions on equity securities by the Company (other than on the Series A-1 Preferred); d) any amendment alter or repeal of any provision of the Company’s certificate Memorandum and Articles of incorporation or by-laws Association in a manner that would adversely affect the rightseffect any Shareholder; (ii) sell, preferencestransfer or lease, whether in a single transaction or privileges pursuant to a series of related transactions or plan, all or a substantial portion of the Series A-1 Preferred; e) a significant change in the principal business of the Company as conducted at the time of the consummation of the closing of the Merger; f) the making of any loan or advance to any entity other than in the ordinary course of business unless it is wholly owned by the Company; g) the making of any loan or advance to any person, including, without limitation, any employee or director assets of the Company or any subsidiaryof its material Subsidiaries; (iii) effect a voluntary liquidation, dissolution or winding up of the Company or any of its material Subsidiaries; (iv) approve any merger, scheme of amalgamation or similar transaction in connection with which (i) the Shares held immediately prior to a transaction by a Shareholder will be diluted disproportionately to any other Shareholders (except where this arises in a transaction involving the issuance of Shares by the Company and a Shareholder has not exercised its pre-emptive rights set out in Article IV) or (ii) any Shareholder would not receive the same form of consideration as any other Shareholders; or (v) convert (by merger or otherwise) the Company from an exempted company incorporated in the Cayman Islands with limited liability to any other entity, other than an entity with the same tax attributes in another jurisdiction. (b) The Company shall not, without Supermajority Consent: (i) appoint outside independent auditors for the Company or replace such auditors; (ii) materially change the nature of the business of the Company and its Subsidiaries; or (iii) issue equity incentive awards (either in the form of options, restricted stock or other similar awards) to directors, officers or employees, which awards represent in the aggregate in excess of 10% of the outstanding Shares, calculated as of December 29, 2006 (giving effect to any stock splits, combinations or similar transactions effected after such date). (c) The Company shall not enter into any Related Party Transaction unless approved by the Shareholders representing a majority of the outstanding Shares (other than those Shares Beneficially Owned by any Shareholder who may have an interest (other than as a Shareholder) in such Related Party Transaction, either directly or indirectly through such Shareholder’s Affiliates or a Significant Shareholder Debtor, as the case may be). (d) The Company shall not redeem Capital Securities other than on a pro rata basis from every Shareholder holding such Capital Securities and the Company shall not redeem debt securities held by any Shareholder or any of its Affiliates, except advances and similar expenditures in as required by the ordinary course of business Note Purchase Agreement or under the terms of an employee stock the Notes; provided that the foregoing shall not prohibit the redemption or option plan approved by the Board repurchase of Directors and Investor; Capital Securities issued to directors, officers or h) the guarantee, directly or indirectly, of any indebtedness or obligations, except for trade accounts of any subsidiary arising in the ordinary course of business. Any liquidation, dissolution, recapitalization or reorganization employees of the Company would require a unanimous vote of the Board Closing Condition- Series D: The Company further agrees to release approximately $780,000 held in Escrow to SDS Merchant Fund upon closing. SDS shall in lieu ‘put’ back the equivalent Series D stock as per the agreement laid out in the Series-D Securities Purchase Agreement dated MarchCompany, 2003.whether originally issued

Protective Provisions. Until 10.1 Acts of the closing Group Companies Requiring Approval of Requisite Preferred Holders. Regardless of anything else contained herein or in the Charter Documents of any Group Company, no Group Company shall take, permit to occur, approve, authorize, or agree or commit to do any of the following, and each Party shall procure each Group Company not to, and the shareholders of the Company shall procure the Company not to, take, permit to occur, approve, authorize, or agree or commit to do any of the following, whether in a single transaction or a series of related transactions, whether directly or indirectly, and whether or not by amendment, merger, consolidation, scheme of arrangement, amalgamation, or otherwise, unless approved in writing by the Company Requisite Preferred Holders in advance; provided that (i) if any of an additional $5,000,000 equity financing the following affects adversely the Series C Preferred Shares specifically or affects adversely the Series C Preferred Shares differently from institutional investorsany other series of the Preferred Shares, such approval shall also include the approval of the holders of at least 2/3 a majority of the then-outstanding shares Series C Preferred Shares, (ii) if any of the following affects adversely the Series A-1 B Preferred Shares differently from any other series of the Preferred Shares, such approval shall also include the approval of the holders of a majority of the then-outstanding Series B Preferred Shares, and (iii) if any of the following affects adversely any series of Series A Preferred Shares differently from any other series of the Preferred Shares, such approval shall also include the approval of the holders of a majority of the then-outstanding Series A Preferred Shares (voting together separately as a single class will be required for: a) a merger, sale of all, or substantially all of the assets or intellectual property, recapitalization, or reorganization the Company; b) the authorization or issuance of any equity security having any right, preference or priority superior to or and on parity with the Series A-1 Preferred (excluding debt not convertible into any such senior or pari passu equity security); c) the redemption, repurchase or acquisition, directly or indirectly, through subsidiaries or otherwise, of any equity securities (other than the repurchase of equity securities of the Company at cost upon termination of employment or service pursuant to vesting agreements or stockholder agreements or a repurchase of the Series A-1 Preferred) or the payment of dividends or other distributions on equity securities by the Company (other than on the Series A-1 Preferred); d) any amendment or repeal of any provision of the Company’s certificate of incorporation or byan as-laws that would adversely affect the rights, preferences, or privileges of the Series A-1 Preferred; e) a significant change in the principal business of the Company as conducted at the time of the consummation of the closing of the Merger; f) the making of any loan or advance to any entity other than in the ordinary course of business unless it is wholly owned by the Company; g) the making of any loan or advance to any person, including, without limitation, any employee or director of the Company or any subsidiary, except advances and similar expenditures in the ordinary course of business or under the terms of an employee stock or option plan approved by the Board of Directors and Investor; or h) the guarantee, directly or indirectly, of any indebtedness or obligations, except for trade accounts of any subsidiary arising in the ordinary course of business. Any liquidation, dissolution, recapitalization or reorganization of the Company would require a unanimous vote of the Board Closing Condition- Series D: The Company further agrees to release approximately $780,000 held in Escrow to SDS Merchant Fund upon closing. SDS shall in lieu ‘put’ back the equivalent Series D stock as per the agreement laid out in the Series-D Securities Purchase Agreement dated March, 2003.converted basis):

Protective Provisions. Until fewer than 1,000,000 shares of Convertible Preferred Stock are outstanding (as adjusted for stock splits, stock dividends and the closing by like), the Company shall not, without the approval of an additional $5,000,000 equity financing from institutional investors, approval the Board of Directors and the affirmative vote or written consent of the holders of at least 2/3 a majority of the then outstanding shares of Convertible Preferred Stock: (i) authorize or issue (including, without limitation, by way of recapitalization), or obligate itself to authorize or issue, any equity security of the Series A-1 Corporation, or any other security exercisable for or convertible into an equity security of the Corporation, that has redemption rights or that is senior to or on parity with the Convertible Preferred Stock as to dividend rights, voting together separately as a class will be required for: arights, liquidation preferences or any other rights, preferences or privileges; (ii) a mergerincrease or decrease (other than by conversion) the total number of authorized shares of Convertible Preferred Stock or Common Stock; (iii) effect any sale, sale lease, assignment, transfer or other conveyance or encumbrance of all, all or substantially all of the assets of the Corporation or intellectual property, recapitalizationany of its subsidiaries in one or more related transactions, or reorganization any consolidation or merger resulting in a change in control of the Company; b) the authorization , or issuance any reclassification, recapitalization or other change of any equity security having any right, preference capital stock of the Corporation; (iv) change the authorized number of directors of the Corporation; (v) amend or priority superior to or on parity with repeal the Series A-1 Preferred Certificate (excluding debt not convertible into any such senior or pari passu equity security); c) the redemption, repurchase or acquisition, directly or indirectly, through subsidiaries or otherwise, including by way of any equity securities Certificate of Designation) or the Corporation's Bylaws; (other than vi) redeem, purchase or otherwise acquire (or pay into or set aside for a sinking fund for such purpose) any of the Common Stock or common stock equivalents; provided, however, that this restriction shall not apply to the repurchase of equity securities up to a maximum of $100,000 of Common Stock per year from employees, officers, directors, consultants, advisors or other persons performing services for the Company Corporation, pursuant to agreements under which the Corporation has the option to repurchase such shares at cost upon the occurrence of certain events, such as the termination of employment employment; (vii) effect the liquidation, dissolution or service pursuant to vesting agreements or stockholder agreements or a repurchase winding up of the Series A-1 PreferredCorporation; or (viii) agree, promise, commit or the payment of dividends or other distributions on equity securities by the Company (other than on the Series A-1 Preferred); d) undertake to do any amendment or repeal of any provision of the Company’s certificate of incorporation or by-laws that would adversely affect the rights, preferences, or privileges of the Series A-1 Preferred; e) a significant change in the principal business of the Company as conducted at the time of the consummation of the closing of the Merger; f) the making of any loan or advance to any entity other than in the ordinary course of business unless it is wholly owned by the Company; g) the making of any loan or advance to any person, including, without limitation, any employee or director of the Company or any subsidiary, except advances and similar expenditures in the ordinary course of business or under the terms of an employee stock or option plan approved by the Board of Directors and Investor; or h) the guarantee, directly or indirectly, of any indebtedness or obligations, except for trade accounts of any subsidiary arising in the ordinary course of business. Any liquidation, dissolution, recapitalization or reorganization of the Company would require a unanimous vote of the Board Closing Condition- Series D: The Company further agrees to release approximately $780,000 held in Escrow to SDS Merchant Fund upon closing. SDS shall in lieu ‘put’ back the equivalent Series D stock as per the agreement laid out in the Series-D Securities Purchase Agreement dated March, 2003foregoing.

Protective Provisions. Until So long as shares of Series A Preferred Stock are outstanding, the closing Corporation shall not, without first obtaining the approval (by vote or written consent, as provided by the Company of an additional $5,000,000 equity financing from institutional investors, approval CO-CORP LAW) of the holders of at least 2/3 a majority of the then outstanding shares of the Series A-1 A Preferred voting together separately as a class will be required forStock: a) a merger, sale of all, alter or substantially all of the assets or intellectual property, recapitalization, or reorganization the Company; b) the authorization or issuance of any equity security having any right, preference or priority superior to or on parity with the Series A-1 Preferred (excluding debt not convertible into any such senior or pari passu equity security); c) the redemption, repurchase or acquisition, directly or indirectly, through subsidiaries or otherwise, of any equity securities (other than the repurchase of equity securities of the Company at cost upon termination of employment or service pursuant to vesting agreements or stockholder agreements or a repurchase of the Series A-1 Preferred) or the payment of dividends or other distributions on equity securities by the Company (other than on the Series A-1 Preferred); d) any amendment or repeal of any provision of the Company’s certificate of incorporation or by-laws that would adversely affect change the rights, preferences, preferences or privileges of the Series A-1 Preferred; e) a significant change in the principal business A Preferred Stock or any capital stock of the Company Corporation so as conducted at to affect adversely the time Series A Preferred Stock; create any new class or series of capital stock having a preference over the Series A Preferred Stock as to distribution of assets upon liquidation, dissolution or winding up of the consummation Corporation (as previously defined in Article II hereof, "Senior Securities"); create any new class or series of capital stock ranking pari passu with the Series A Preferred Stock as to distribution of assets upon liquidation, dissolution or winding up of the closing Corporation (as previously defined in Article II hereof, "Pari Passu Securities"); increase the authorized number of shares of Series A Preferred Stock; issue any Senior Securities or Pari Passu Securities; increase the par value of the Merger; f) the making Common Stock, or do any act or thing not authorized or contemplated by this Certificate of any loan or advance to any entity other than Designation which would result in the ordinary course of business unless it is wholly owned by the Company; g) the making of any loan or advance to any person, including, without limitation, any employee or director taxation of the Company holders of shares of the Series A Preferred Stock under Section 305 of the Internal Revenue Code of 1986, as amended (or any subsidiarycomparable provision of the Internal Revenue Code as hereafter from time to time amended). In the event holders of at least a majority of the then outstanding shares of Series A Preferred Stock agree to allow the Corporation to alter or change the rights, except advances preferences or privileges of the shares of Series A Preferred Stock, pursuant to subsection (a) above, so as to affect the Series A Preferred Stock, then the Corporation will deliver notice of such approved change to the holders of the Series A Preferred Stock that did not agree to such alteration or change (the "Dissenting Holders") and similar expenditures in Dissenting Holders shall have the ordinary course right of business or Dissenting Stockholders under the terms of an employee stock or option plan approved by NVGCL to petition for the Board of Directors and Investor; or h) the guarantee, directly or indirectly, of any indebtedness or obligations, except for trade accounts of any subsidiary arising in the ordinary course of business. Any liquidation, dissolution, recapitalization or reorganization payment of the Company would require a unanimous vote fair value of the Board Closing Condition- their shares as it exists prior to such alteration or change or continue to hold their shares of Series D: The Company further agrees to release approximately $780,000 held in Escrow to SDS Merchant Fund upon closing. SDS shall in lieu ‘put’ back the equivalent Series D stock as per the agreement laid out in the Series-D Securities Purchase Agreement dated March, 2003A Preferred Stock.