HEREOF, GENAISSANCE SHALL ISSUE AND DELIVER TO EACH OF THE
PURCHASERS ON THE CLOSING DATE, AS PART OF ITS INDUCEMENT TO THE PURCHASERS TO
PURCHASE THE NOTES, WARRANTS, INITIALLY HAVING AN EXERCISE PRICE OF $2.25 PER
SHARE, ENTITLING EACH OF THE PURCHASERS TO PURCHASE THE NUMBER OF SHARES OF
COMMON STOCK SET FORTH OPPOSITE SUCH PURCHASER'S NAME ON SCHEDULE I ANNEXED
HERETO AND MADE A PART HEREOF (THE "WARRANTS").
THE WARRANTS SHALL BE IN THE
FORM OF THE WARRANT ATTACHED HERETO AS EXHIBIT F.
2.3
NOTES.
(A)
SECURITY.
EACH NOTE AND THE OBLIGATIONS OF
EACH CO-BORROWER AND ITS SUBSIDIARIES UNDER THE TRANSACTION DOCUMENTS SHALL BE
SECURED IN ACCORDANCE WITH THE TERMS OF THE SECURITY DOCUMENTS.
(B)
MATURITY DATE.
THE ENTIRE UNPAID PRINCIPAL
AMOUNT OF THE NOTES AND ANY ACCRUED AND UNPAID INTEREST THEREON SHALL BE DUE AND
PAYABLE ON APRIL 21, 2007 (THE "MATURITY DATE"), UNLESS SUCH AMOUNTS BECOME DUE
AND PAYABLE EARLIER UPON ACCELERATION AS PROVIDED HEREIN OR IN THE NOTES OR AS
OTHERWISE PROVIDED PURSUANT TO THE TERMS OF THE NOTES.
(C)
INTEREST.
(I)
INTEREST.
THE OUTSTANDING PRINCIPAL
AMOUNT OF EACH NOTE SHALL BEAR INTEREST AT THE RATE OF FIVE PERCENT (5%) PER
ANNUM, WHICH INTEREST SHALL BE PAYABLE IN ARREARS IN CASH ON EACH QUARTERLY
INTEREST PAYMENT DATE.
(II)
POST-DEFAULT INTEREST.
NOTWITHSTANDING
CLAUSE (I) ABOVE, UPON THE OCCURRENCE AND DURING THE CONTINUANCE OF ANY DEFAULT
OR EVENT OF DEFAULT, THE OUTSTANDING PRINCIPAL AMOUNT ON EACH NOTE SHALL BEAR
INTEREST AT A MAXIMUM RATE OF TEN PERCENT (10%) PER ANNUM OVER THE INTEREST RATE
OTHERWISE PROVIDED FOR HEREIN.
(III)
COMPUTATION.
ALL COMPUTATIONS OF INTEREST
PAYABLE HEREUNDER SHALL BE ON THE BASIS OF A 365-DAY YEAR AND ACTUAL NUMBER OF
DAYS ELAPSED IN THE PERIOD OF WHICH SUCH INTEREST IS PAYABLE.
2.4
CLOSING.
THE CLOSING OF THE PURCHASE AND SALE
OF THE NOTES AND WARRANTS HEREUNDER (THE "CLOSING") SHALL TAKE PLACE AT THE
OFFICES OF LOWENSTEIN SANDLER PC, 1251 AVENUE OF THE AMERICAS, NEW YORK, NY, AT
10:00 A.M. ON THE SECOND (2ND) BUSINESS DAY FOLLOWING THE SATISFACTION (OR
WAIVER, AS THE CASE MAY BE) OF THE CONDITIONS TO EACH PARTY'S OBLIGATIONS SET
FORTH
11
HEREIN (THE "CLOSING DATE"), OR AT SUCH OTHER TIME AND PLACE AS THE GENAISSANCE
AND THE PURCHASERS MUTUALLY AGREE UPON IN WRITING.
AT THE CLOSING: (A) THE
CO-BORROWERS SHALL DELIVER TO THE PURCHASERS THE NOTES PURSUANT TO SECTION 2.1;
(B) GENAISSANCE SHALL DELIVER TO THE PURCHASERS THE WARRANTS PURSUANT TO
SECTION 2.2; AND (C) THE PURCHASERS SHALL CAUSE TO BE DELIVERED TO THE
CO-BORROWERS BY WIRE TRANSFER OF IMMEDIATELY AVAILABLE FUNDS THE AGGREGATE
AMOUNT OF FOUR MILLION FIVE HUNDRED THOUSAND DOLLARS ($4,500,000) TO THE ACCOUNT
SPECIFIED BY GENAISSANCE, REPRESENTING THE PURCHASE PRICE FOR THE NOTES AND THE
WARRANTS.
2.5
PREPAYMENT.
(A)
OPTIONAL PREPAYMENT.
THE CO-BORROWERS MAY,
AT THEIR JOINT WRITTEN ELECTION, PREPAY THE NOTES IN WHOLE (OR IN PART TO THE
EXTENT PERMITTED UNDER SECTION 2.5(B)) AND IN CASH ONLY UPON 30 DAYS PRIOR
WRITTEN NOTICE.
(B)
MANDATORY PREPAYMENT.
SUBJECT TO
SECTION 5.6