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 Two Million Dollars ($2,000,000.00) 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 333,333 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:
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 AND THE WARRANT. 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, THE WARRANT, AND
THE COMMON STOCK ISSUABLE 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 TO
PURCHASE UP TO 333,333 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 MANAGER OF THE PURCHASER, A CLOSING
PAYMENT IN AN AMOUNT EQUAL TO 2.80% OF THE AGGREGATE PRINCIPAL AMOUNT OF THE
NOTE. 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