SECTION 1.7.
"COMMITMENT AMOUNT" SHALL MEAN
THE AGGREGATE AMOUNT OF UP TO FOUR MILLION DOLLARS ($4,000,000) WHICH THE
INVESTOR HAS AGREED TO PROVIDE TO THE COMPANY IN ORDER TO PURCHASE THE COMMON
STOCK PURSUANT TO THE TERMS AND CONDITIONS OF THIS AGREEMENT, PROVIDED THAT THE
COMPANY SHALL NOT HAVE THE RIGHT TO REQUEST AN ADVANCE IF THE ISSUANCE OF THE
FULL NUMBER OF SHARES OF COMMON STOCK ISSUABLE IN CONNECTION WITH SUCH ADVANCE
WOULD, TOGETHER WITH ALL SHARES OF COMMON STOCK PREVIOUSLY ISSUED UNDER THIS
AGREEMENT, EXCEED 2,378,726 SHARES OF COMMON STOCK (WHICH IS NO MORE THAN 19.99%
OF THE 11,953,398 OUTSTANDING SHARES OF COMMON STOCK AS OF THE DATE OF THIS
AGREEMENT) UNLESS THE NECESSARY SHAREHOLDER APPROVAL OR CONSENT HAS BEEN
RECEIVED PRIOR TO SUCH REQUEST.
SECTION 1.8.
"COMMITMENT PERIOD" SHALL MEAN
THE PERIOD COMMENCING ON THE EARLIER TO OCCUR OF (I) THE EFFECTIVE DATE, OR (II)
SUCH EARLIER DATE AS THE COMPANY AND THE INVESTOR MAY MUTUALLY AGREE IN WRITING,
AND EXPIRING ON THE EARLIEST TO OCCUR OF (X) THE DATE ON WHICH THE INVESTOR
SHALL HAVE MADE PAYMENT OF ADVANCES PURSUANT TO THIS AGREEMENT IN THE AGGREGATE
AMOUNT OF FOUR MILLION DOLLARS ($4,000,000), (Y) THE DATE THIS AGREEMENT IS
TERMINATED PURSUANT TO SECTION 2.4, OR (Z) THE DATE OCCURRING TWENTY-FOUR (24)
MONTHS AFTER THE EFFECTIVE DATE.
SECTION 1.9.
"COMMON STOCK" SHALL MEAN THE
COMPANY'S COMMON STOCK, PAR VALUE $0.005 PER SHARE.
SECTION 1.10.
"CONDITION SATISFACTION DATE" SHALL
HAVE THE MEANING SET FORTH IN SECTION 7.2.
SECTION 1.11.
"DAMAGES" SHALL MEAN ANY LOSS, CLAIM,
DAMAGE, LIABILITY, COSTS AND EXPENSES (INCLUDING, WITHOUT LIMITATION, REASONABLE
ATTORNEY'S FEES AND DISBURSEMENTS AND COSTS AND EXPENSES OF EXPERT WITNESSES AND
INVESTIGATION).
SECTION 1.12.
"EFFECTIVE DATE" SHALL MEAN THE DATE
ON WHICH THE SEC FIRST DECLARES EFFECTIVE A REGISTRATION STATEMENT REGISTERING
THE RESALE OF THE REGISTRABLE SECURITIES AS SET FORTH IN SECTION 7.2(A).
SECTION 1.13.
"ESCROW AGREEMENT" SHALL MEAN THE
ESCROW AGREEMENT AMONG THE COMPANY, THE INVESTOR, AND DAVID GONZALEZ, ESQ.,
DATED THE DATE HEREOF.
SECTION 1.14.
"EXCHANGE ACT" SHALL MEAN THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, AND THE RULES AND REGULATIONS
PROMULGATED THEREUNDER.
SECTION 1.15.
"MATERIAL ADVERSE EFFECT" SHALL MEAN
ANY CONDITION, CIRCUMSTANCE, OR SITUATION THAT WOULD PROHIBIT OR OTHERWISE
MATERIALLY INTERFERE WITH THE ABILITY OF THE COMPANY TO ENTER INTO AND PERFORM
ANY OF ITS OBLIGATIONS UNDER THIS AGREEMENT OR THE REGISTRATION RIGHTS AGREEMENT
IN ANY MATERIAL RESPECT.
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SECTION 1.16.
"MARKET PRICE" SHALL MEAN THE LOWEST
VWAP OF THE COMMON STOCK DURING THE PRICING PERIOD.
SECTION 1.17.
"MAXIMUM ADVANCE AMOUNT" SHALL BE
THREE HUNDRED FIFTY THOUSAND DOLLARS ($350,000) PER ADVANCE NOTICE.
SECTION 1.18.
"NASD" SHALL MEAN THE NATIONAL
ASSOCIATION OF SECURITIES DEALERS, INC.
SECTION 1.19.
"PERSON" SHALL MEAN AN INDIVIDUAL, A
CORPORATION, A PARTNERSHIP, AN ASSOCIATION, A TRUST OR OTHER ENTITY OR
ORGANIZATION, INCLUDING A GOVERNMENT OR POLITICAL SUBDIVISION OR AN AGENCY OR
INSTRUMENTALITY THEREOF.
SECTION 1.20.
"PLACEMENT AGENT" SHALL MEAN NEWBRIDGE
SECURITIES CORPORATION, A REGISTERED BROKER-DEALER.
SECTION 1.21.
"PRICING PERIOD" SHALL MEAN THE FIVE
(5) CONSECUTIVE TRADING