"Company"), and LAURUS MASTER FUND, LTD., a Cayman
Islands company (the "Purchaser").
RECITALS
WHEREAS, the Company has authorized the sale to the Purchaser of a Secured Term
Note in the aggregate principal amount of One Million Dollars ($1,000,000) in
the form of Exhibit A hereto (as amended, modified and/or supplemented from time
to time, the "Note");
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 5,000,000 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, 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:
2.
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 EXERCISE OF THE WARRANT ARE REFERRED TO AS THE "SECURITIES."
3.
FEES AND WARRANT.
ON THE CLOSING DATE:
(A)
THE COMPANY WILL ISSUE AND DELIVER TO THE PURCHASER THE WARRANT TO
PURCHASE UP TO 5,000,000 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 INVESTMENT MANAGER OF THE PURCHASER
("LCM"), A NON-REFUNDABLE PAYMENT IN AN AMOUNT EQUAL TO THREE AND ONE HALF
PERCENT (3.50%) OF THE AGGREGATE PRINCIPAL AMOUNT OF THE NOTE.
THE FOREGOING
PAYMENT IS REFERRED TO HEREIN AS THE "LCM PAYMENT."
SUCH PAYMENT SHALL BE
DEEMED FULLY EARNED ON THE CLOSING DATE AND SHALL NOT BE SUBJECT TO REBATE OR
PRORATION FOR ANY REASON.
(C)
[INTENTIONALLY DELETED].
(D)
THE LCM PAYMENT AND THE EXPENSES REFERRED TO IN THE PRECEDING
CLAUSE (C) (NET OF DEPOSITS PREVIOUSLY PAID BY THE COMPANY) SHALL BE PAID