SHARES AND WARRANTS.
(A)
PURCHASE OF PREFERRED SHARES AND WARRANTS.
(I)
PREFERRED SHARES AND WARRANTS.
SUBJECT TO THE SATISFACTION (OR
WAIVER) OF THE CONDITIONS SET FORTH IN SECTIONS 6 AND 7 BELOW, THE COMPANY SHALL
ISSUE AND SELL TO EACH BUYER, AND EACH BUYER SEVERALLY, BUT NOT JOINTLY, AGREES
TO PURCHASE FROM THE COMPANY ON THE CLOSING DATE (AS DEFINED BELOW), THE NUMBER
OF PREFERRED SHARES, AS IS SET FORTH OPPOSITE SUCH BUYER'S NAME IN COLUMN (3) ON
THE SCHEDULE OF BUYERS, ALONG WITH THE WARRANTS TO ACQUIRE THE WARRANT SHARES
(THE "CLOSING").
(II)
CLOSING.
THE CLOSING SHALL OCCUR ON THE CLOSING DATE AT THE
OFFICES OF SCHULTE ROTH & ZABEL LLP, 919 THIRD AVENUE, NEW YORK, NEW YORK 10022.
(III)
PURCHASE PRICE.
THE PURCHASE PRICE FOR EACH BUYER (THE "PURCHASE
PRICE") OF THE PREFERRED SHARES AND RELATED WARRANTS TO BE PURCHASED BY EACH
SUCH BUYER AT THE CLOSING SHALL BE EQUAL TO $2.20 FOR EACH PREFERRED SHARE AND
RELATED WARRANTS BEING PURCHASED BY SUCH BUYER AT THE CLOSING.
(B)
CLOSING DATE.
THE DATE AND TIME OF THE CLOSING (THE "CLOSING
DATE") SHALL BE 10:00 A.M., NEW YORK CITY TIME, ON THE DATE OF THIS AGREEMENT,
SUBJECT TO NOTIFICATION OF SATISFACTION (OR WAIVER) OF THE CONDITIONS TO THE
CLOSING SET FORTH IN SECTIONS 6 AND 7 BELOW (OR SUCH LATER DATE AS IS MUTUALLY
AGREED TO BY THE COMPANY AND EACH BUYER).
(C)
FORM OF PAYMENT.
(I)
ON THE CLOSING DATE, (A) SUBJECT TO SECTION
1(C)(II) BELOW, EACH BUYER SHALL PAY ITS PRO RATA PORTION OF $4.5 MILLION TO THE
COMPANY FOR THE PREFERRED SHARES AND WARRANTS TO BE ISSUED AND SOLD TO SUCH
BUYER AT THE CLOSING, BY WIRE TRANSFER OF IMMEDIATELY AVAILABLE FUNDS IN
ACCORDANCE WITH THE COMPANY'S WRITTEN WIRE INSTRUCTIONS, AND (B) THE COMPANY
SHALL DELIVER TO EACH BUYER THE PREFERRED SHARES (IN THE DENOMINATIONS AS SUCH
BUYER SHALL REQUEST) WHICH SUCH BUYER IS THEN PURCHASING HEREUNDER ALONG WITH
THE WARRANTS (IN THE AMOUNTS AS SUCH BUYER SHALL REQUEST) SUCH BUYER IS
PURCHASING, DULY EXECUTED ON BEHALF OF THE COMPANY AND REGISTERED IN THE NAME OF
SUCH BUYER OR ITS DESIGNEE.
$2,157,630 OF THE AGGREGATE PURCHASE PRICE SHALL BE
FUNDED IN ACCORDANCE WITH SECTION 1(C) (II) BELOW.
THE REMAINING $2,342,370
MILLION OF THE AGGREGATE PURCHASE PRICE SHALL BE DEPOSITED IN AN ESCROW ACCOUNT
WITH WACHOVIA BANK AND THE DISBURSEMENT OF SUCH FUNDS SHALL BE GOVERNED IN
ACCORDANCE WITH THE TERMS AND CONDITIONS OF AN ESCROW AGREEMENT, IN
SUBSTANTIALLY THE FORM ATTACHED HERETO AS EXHIBIT D (THE "ESCROW AGREEMENT").
(II)
NOTWITHSTANDING ANY CONTRARY PROVISION SET FORTH HEREIN, THE
BUYERS SHALL BE ENTITLED TO NET FUND THE AGGREGATE PURCHASE PRICE LESS THE
AMOUNT OF THE EXPENSE REIMBURSEMENT (AS DEFINED IN SECTION 4(G)) LESS THE AMOUNT
OF ANY ADVANCES (AS DEFINED IN SECTION 4(G)).
IN ADDITION, THE BUYERS SHALL
PAY, ON BEHALF OF THE COMPANY, $2,157,630 OF THE AGGREGATE PURCHASE PRICE
DIRECTLY TO LAURUS MASTER FUND LTD. ("LAURUS") TO SETTLE IN FULL THE AMOUNT OF
THE OVERADVANCE CURRENTLY OUTSTANDING UNDER