"Note"), which Note is convertible into
shares of the Company's common stock, $0.01 par value per share (the "Common
Stock"), in accordance with the terms and conditions set forth in the Note, at
an initial fixed conversion price of $1.05 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") in connection with the Purchaser's purchase of the Note;
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.
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 AND WARRANT AND 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 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 NINE-TENTHS PERCENT (3.90%) OF THE
AGGREGATE PRINCIPAL AMOUNT OF THE NOTE, WHICH EQUALS $78,000.
THE FOREGOING FEE
IS REFERRED TO HEREIN AS THE "CLOSING PAYMENT."
(C)
THE COMPANY SHALL REIMBURSE THE PURCHASER FOR ITS REASONABLE
EXPENSES (INCLUDING LEGAL FEES AND EXPENSES) INCURRED IN CONNECTION WITH THE
PREPARATION AND NEGOTIATION OF THIS AGREEMENT AND THE RELATED AGREEMENTS (AS
HEREINAFTER DEFINED), AND EXPENSES INCURRED IN CONNECTION WITH THE PURCHASER'S
DUE DILIGENCE REVIEW OF THE COMPANY AND ITS SUBSIDIARIES (AS DEFINED IN
SECTION 4.2) AND ALL RELATED MATTERS.
AMOUNTS REQUIRED TO BE PAID UNDER THIS
SECTION 2(C) WILL BE PAID ON THE CLOSING DATE AND SHALL BE $44,500 FOR SUCH
EXPENSES REFERRED TO IN THIS