a Cayman Islands company (the "Purchaser").
RECITALS
WHEREAS, the Company has authorized the sale to the Purchaser of a Secured
Convertible Term Note in the aggregate principal amount of Two Million Dollars
($2,000,000.00) in the form of Exhibit A hereto (as amended, modified and/or
supplemented from time to time, the "Note"), which Note is convertible into
shares of the Company's common stock, $0.001 par value per share (the "Common
Stock") at an initial fixed conversion price of $2.17 per share of Common Stock
("Fixed Conversion Price");
WHEREAS, the Company wishes to issue to the Purchaser a warrant in the form of
Exhibit B hereto (as amended, modified and/or supplemented from time to time,
the "Warrant") to purchase up to 460,829 shares of the Company's Common Stock
(subject to adjustment as set forth therein) in connection with the Purchaser's
purchase of the Note;
WHEREAS, at Closing (as defined herein),
the Company wishes to grant 221,198
shares of Common Stock (the "Interest Shares") to the Purchaser;
WHEREAS, the Purchaser desires to purchase the Note and the Warrant on the terms
and conditions set forth herein; and
WHEREAS, the Company desires to issue and sell the Note and Warrant to the
Purchaser on the terms and conditions set forth herein.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing recitals and the mutual
promises, representations, warranties and covenants hereinafter set forth and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:
1.
AGREEMENT TO SELL AND PURCHASE.
PURSUANT TO THE TERMS AND CONDITIONS SET FORTH IN THIS AGREEMENT, ON THE CLOSING
DATE (AS DEFINED IN SECTION 3), THE COMPANY SHALL SELL TO THE PURCHASER, AND THE
PURCHASER SHALL PURCHASE FROM THE COMPANY, THE NOTE AND THE WARRANT.
THE SALE
OF THE NOTE ON THE CLOSING DATE SHALL BE KNOWN AS THE "OFFERING."
THE NOTE WILL
MATURE ON THE MATURITY DATE (AS DEFINED IN THE NOTE).
COLLECTIVELY, THE NOTE,
THE WARRANT, THE INTEREST SHARES AND THE COMMON STOCK ISSUABLE UPON CONVERSION
OF THE NOTE AND UPON EXERCISE OF THE WARRANT ARE REFERRED TO AS THE
"SECURITIES."
2.
FEES AND WARRANT.
ON THE CLOSING DATE:
(A)
THE COMPANY WILL ISSUE AND DELIVER TO THE
PURCHASER THE WARRANT TO PURCHASE UP TO 460,829 SHARES OF COMMON STOCK (SUBJECT
TO ADJUSTMENT AS SET FORTH THEREIN) IN CONNECTION WITH THE OFFERING, PURSUANT TO
SECTION 1 HEREOF.
ALL THE REPRESENTATIONS, COVENANTS, WARRANTIES, UNDERTAKINGS,
AND INDEMNIFICATION, AND OTHER RIGHTS MADE OR GRANTED TO OR FOR THE BENEFIT OF
THE PURCHASER BY THE COMPANY ARE HEREBY ALSO MADE AND GRANTED FOR THE BENEFIT OF
THE HOLDER OF THE WARRANT AND SHARES OF THE COMPANY'S COMMON STOCK ISSUABLE UPON
EXERCISE OF THE WARRANT (THE "WARRANT SHARES").
(B)
SUBJECT TO THE TERMS OF SECTION 2(D) BELOW,
THE COMPANY SHALL PAY TO LAURUS CAPITAL MANAGEMENT, LLC, THE MANAGER OF THE
PURCHASER, A CLOSING PAYMENT IN AN AMOUNT EQUAL TO THREE AND ONE HALF PERCENT
(3.50%) OF THE AGGREGATE PRINCIPAL AMOUNT OF THE