(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 EACH CREDITOR PARTY BY
THE COMPANY ARE HEREBY ALSO MADE AND GRANTED FOR THE BENEFIT OF THE HOLDER OF
THE RELATED WARRANT AND SHARES OF THE COMMON STOCK ISSUABLE UPON EXERCISE OF
SUCH WARRANT (THE "WARRANT SHARES").
SUBJECT TO THE TERMS OF SECTION 2(C) BELOW, THE COMPANY SHALL PAY TO VALENS
CAPITAL MANAGEMENT, LLC, THE INVESTMENT MANAGER OF THE PURCHASERS ("VCM"), A
NON-REFUNDABLE PAYMENT IN AN AMOUNT EQUAL TO $70,000.00; (II) TO THE PURCHASERS,
A NON-REFUNDABLE PAYMENT IN AN AMOUNT EQUAL TO $35,000.00; (III) TO THE
PURCHASERS, AN ADVANCE PREPAYMENT DISCOUNT DEPOSIT EQUAL TO $35,000.00; AND
(IV) TO VCM, A NON-REFUNDABLE STRUCTURING PAYMENT IN AN AMOUNT EQUAL TO
$30,000.00.
EACH OF THE FOREGOING PAYMENTS IN CLAUSES (I), (II) AND (IV) SHALL
BE DEEMED FULLY EARNED ON THE CLOSING DATE AND SHALL NOT BE SUBJECT TO REBATE OR
PRORATION FOR ANY REASON.
THE PAYMENTS AND THE EXPENSES REFERRED TO IN THE PRECEDING CLAUSE (B) (NET OF
DEPOSITS PREVIOUSLY PAID BY THE COMPANY) SHALL BE PAID AT CLOSING OUT OF FUNDS
HELD PURSUANT TO THE ESCROW AGREEMENT (AS DEFINED BELOW) AND A DISBURSEMENT
LETTER (THE "DISBURSEMENT LETTER").
CLOSING, DELIVERY AND PAYMENT.
CLOSING.
SUBJECT TO THE TERMS AND CONDITIONS HEREIN, THE CLOSING OF THE
TRANSACTIONS CONTEMPLATED HEREBY (THE "CLOSING"), SHALL TAKE PLACE ON THE DATE
HEREOF, AT SUCH TIME OR PLACE AS THE COMPANY AND THE AGENT MAY MUTUALLY AGREE
(SUCH DATE IS HEREINAFTER REFERRED TO AS THE "CLOSING DATE").
DELIVERY.
PURSUANT TO THE ESCROW AGREEMENT, AT THE CLOSING ON THE CLOSING DATE,
THE COMPANY WILL DELIVER TO EACH PURCHASER, AMONG OTHER THINGS, THE APPLICABLE
NOTE AND WARRANT AND SUCH PURCHASER WILL DELIVER TO THE COMPANY, AMONG OTHER
THINGS, THE AMOUNTS SET FORTH OPPOSITE ITS NAME IN THE DISBURSEMENT LETTER BY
CERTIFIED FUNDS OR WIRE TRANSFER (IT BEING UNDERSTOOD THAT $2,303,500.00 OF THE
PROCEEDS OF THE NOTES SHALL BE PLACED IN THE RESTRICTED ACCOUNT (AS DEFINED IN
THE RESTRICTED ACCOUNT AGREEMENT REFERRED TO BELOW). THE COMPANY HEREBY
ACKNOWLEDGES AND AGREES THAT EACH PURCHASER'S OBLIGATION TO PURCHASE THE
APPLICABLE NOTE FROM THE COMPANY ON THE CLOSING DATE SHALL BE CONTINGENT UPON
THE SATISFACTION (OR WAIVER BY THE AGENT IN ITS SOLE DISCRETION) OF THE ITEMS
AND MATTERS SET FORTH IN THE CLOSING CHECKLIST PROVIDED BY THE AGENT TO THE
COMPANY ON OR PRIOR TO THE CLOSING DATE.
REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
THE COMPANY HEREBY REPRESENTS
AND WARRANTS TO EACH CREDITOR PARTY AS FOLLOWS:
ORGANIZATION, GOOD STANDING AND QUALIFICATION.
THE COMPANY AND EACH OF ITS
SUBSIDIARIES IS A CORPORATION, PARTNERSHIP OR LIMITED LIABILITY COMPANY, AS THE
CASE MAY BE, DULY ORGANIZED, VALIDLY EXISTING AND IN GOOD STANDING UNDER THE
LAWS OF ITS JURISDICTION OF ORGANIZATION.
THE COMPANY AND EACH OF ITS
SUBSIDIARIES HAS THE CORPORATE, LIMITED LIABILITY COMPANY OR PARTNERSHIP, AS THE
CASE MAY BE,