TWENTY THOUSAND DOLLARS ($4,620,000) BEARING INTEREST AT THE
RATE OF SEVEN PERCENT (7%) PER ANNUM, CONVERTIBLE INTO SHARES OF THE COMPANY'S
COMMON STOCK, PAR VALUE $0.01 PER SHARE (THE "COMMON STOCK"), IN SUBSTANTIALLY
THE FORM ATTACHED HERETO AS EXHIBIT B (THE "NOTES").
THE COMPANY AND THE
PURCHASERS ARE EXECUTING AND DELIVERING THIS AGREEMENT IN ACCORDANCE WITH AND IN
RELIANCE UPON THE EXEMPTION FROM SECURITIES REGISTRATION AFFORDED BY SECTION
4(2) OF THE U.S. SECURITIES ACT OF 1933, AS AMENDED, AND THE RULES AND
REGULATIONS PROMULGATED THEREUNDER (THE "SECURITIES ACT"), INCLUDING REGULATION
D ("REGULATION D") AND REGULATION S ("REGULATION S"), AND/OR UPON SUCH OTHER
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AS MAY BE
AVAILABLE WITH RESPECT TO ANY OR ALL OF THE INVESTMENTS TO BE MADE HEREUNDER.
(B)
UPON THE FOLLOWING TERMS AND CONDITIONS, EACH OF THE PURCHASERS
SHALL BE ISSUED WARRANTS, IN SUBSTANTIALLY THE FORM ATTACHED HERETO AS EXHIBIT C
(THE "WARRANTS"), TO PURCHASE THE NUMBER OF SHARES OF COMMON STOCK SET FORTH
OPPOSITE SUCH PURCHASER'S NAME ON EXHIBIT A ATTACHED HERETO.
THE WARRANTS SHALL
HAVE AN EXERCISE PRICE EQUAL TO THE WARRANT PRICE (AS DEFINED IN THE WARRANTS)
AND SHALL BE EXERCISABLE AS STATED THEREIN.
THE WARRANTS SHALL EXPIRE FIVE (5)
YEARS FROM THE CLOSING DATE (AS DEFINED BELOW).
SECTION 1.2
PURCHASE PRICE AND CLOSING.
SUBJECT TO THE TERMS AND
CONDITIONS HEREOF, THE COMPANY AGREES TO ISSUE AND SELL TO THE PURCHASERS AND,
IN CONSIDERATION OF AND IN EXPRESS RELIANCE UPON THE REPRESENTATIONS,
WARRANTIES, COVENANTS, TERMS AND CONDITIONS OF THIS AGREEMENT, THE PURCHASERS,
SEVERALLY BUT NOT JOINTLY, AGREE TO PURCHASE THE NOTES AND WARRANTS FOR AN
AGGREGATE PURCHASE PRICE OF UP TO FOUR MILLION SIX HUNDRED TWENTY THOUSAND
DOLLARS ($4,620,000) (THE "PURCHASE PRICE").
THE CLOSING OF THE PURCHASE AND
SALE OF THE NOTES AND WARRANTS TO BE ACQUIRED BY THE PURCHASERS FROM THE COMPANY
UNDER THIS AGREEMENT SHALL TAKE PLACE AT THE OFFICES OF JENKENS & GILCHRIST
PARKER CHAPIN LLP, THE CHRYSLER BUILDING, 405 LEXINGTON AVENUE, NEW YORK, NEW
YORK 10174 (THE "CLOSING") AT 10:00 A.M., NEW YORK TIME (I) ON OR BEFORE OCTOBER
28, 2004; PROVIDED, THAT ALL OF THE CONDITIONS SET FORTH IN ARTICLE IV
1
HEREOF AND APPLICABLE TO THE CLOSING SHALL HAVE BEEN FULFILLED OR WAIVED IN
ACCORDANCE HEREWITH, OR (II) AT SUCH OTHER TIME AND PLACE OR ON SUCH DATE AS THE
PURCHASERS AND THE COMPANY MAY AGREE UPON (THE "CLOSING DATE").
SUBJECT TO THE
TERMS AND CONDITIONS OF THIS AGREEMENT, AT THE CLOSING THE COMPANY SHALL DELIVER
OR CAUSE TO BE DELIVERED TO EACH PURCHASER (X) ITS NOTE FOR THE PRINCIPAL AMOUNT
SET FORTH OPPOSITE THE NAME OF SUCH PURCHASER ON EXHIBIT A HERETO AND (Y) A
WARRANT TO PURCHASE SUCH NUMBER OF SHARES OF COMMON STOCK AS IS SET FORTH
OPPOSITE THE NAME OF SUCH PURCHASER ON EXHIBIT A ATTACHED HERETO.
AT THE
CLOSING, EACH PURCHASER SHALL DELIVER ITS PURCHASE PRICE BY WIRE TRANSFER TO AN
ACCOUNT DESIGNATED BY THE COMPANY.
SECTION 1.3
CONVERSION SHARES / WARRANT SHARES.
THE