(EACH AS DEFINED
BELOW).
THE TERM "VARIABLE RATE TRANSACTION" SHALL MEAN A TRANSACTION IN WHICH
THE COMPANY ISSUES OR SELLS (I) ANY DEBT OR EQUITY SECURITIES THAT ARE
CONVERTIBLE INTO, EXCHANGEABLE OR EXERCISABLE FOR, OR INCLUDE THE RIGHT TO
RECEIVE ADDITIONAL SHARES OF COMMON STOCK EITHER (A) AT A CONVERSION, EXERCISE
OR EXCHANGE RATE OR OTHER PRICE THAT IS BASED UPON AND/OR VARIES WITH THE
TRADING PRICES OF OR QUOTATIONS FOR THE SHARES OF COMMON STOCK AT ANY TIME AFTER
THE INITIAL
23
ISSUANCE OF SUCH DEBT OR EQUITY SECURITIES, OR (B) WITH A CONVERSION, EXERCISE
OR EXCHANGE PRICE THAT IS SUBJECT TO BEING RESET AT SOME FUTURE DATE AFTER THE
INITIAL ISSUANCE OF SUCH DEBT OR EQUITY SECURITY OR UPON THE OCCURRENCE OF
SPECIFIED OR CONTINGENT EVENTS DIRECTLY OR INDIRECTLY RELATED TO THE BUSINESS OF
THE COMPANY OR THE MARKET FOR THE COMMON STOCK.
THE TERM "MFN TRANSACTION"
SHALL MEAN A TRANSACTION IN WHICH THE COMPANY ISSUES OR SELLS ANY SECURITIES IN
A CAPITAL RAISING TRANSACTION OR SERIES OF RELATED TRANSACTIONS WHICH GRANTS TO
AN INVESTOR THE RIGHT TO RECEIVE ADDITIONAL SHARES BASED UPON FUTURE
TRANSACTIONS OF THE COMPANY ON TERMS MORE FAVORABLE THAN THOSE GRANTED TO THE
SUCH INVESTOR IN SUCH OFFERING.
ARTICLE V
MISCELLANEOUS
5.1
TERMINATION.
THIS AGREEMENT MAY BE
TERMINATED BY ANY PURCHASER, BY WRITTEN NOTICE TO THE OTHER PARTIES, IF THE
CLOSING HAS NOT BEEN CONSUMMATED ON OR BEFORE AUGUST 29, 2003; PROVIDED THAT NO
SUCH TERMINATION WILL AFFECT THE RIGHT OF ANY PARTY TO SUE FOR ANY BREACH BY THE
OTHER PARTY (OR PARTIES).
5.2
FEES AND EXPENSES.
THE COMPANY HAS AGREED
TO REIMBURSE $40,000 TO MIDSUMMER CAPITAL, LLC ("MIDSUMMER") (OF WHICH $15,000
HAS BEEN RECEIVED) AS REIMBURSEMENT FOR ITS LEGAL, ADMINISTRATIVE AND DUE
DILIGENCE FEES AND EXPENSES INCURRED TO PREPARE AND NEGOTIATE THE TRANSACTION
DOCUMENTS.
ON THE CLOSING DATE, THE COMPANY SHALL WIRE $25,000 TO MIDSUMMER AS
PAYMENT OF THE REMAINING PORTION OF THE $40,000 REFERENCED ABOVE.
EXCEPT AS
EXPRESSLY SET FORTH IN THE TRANSACTION DOCUMENTS TO THE CONTRARY, EACH PARTY
SHALL PAY THE FEES AND EXPENSES OF ITS ADVISERS, COUNSEL, ACCOUNTANTS AND OTHER
EXPERTS, IF ANY, AND ALL OTHER EXPENSES INCURRED BY SUCH PARTY INCIDENT TO THE
NEGOTIATION, PREPARATION, EXECUTION, DELIVERY AND PERFORMANCE OF THIS
AGREEMENT.
THE COMPANY SHALL PAY ALL TRANSFER AGENT FEES, STAMP TAXES AND OTHER
TAXES AND DUTIES LEVIED IN CONNECTION WITH THE ISSUANCE OF ANY SECURITIES.
5.3
ENTIRE AGREEMENT.
THE TRANSACTION
DOCUMENTS, TOGETHER WITH THE EXHIBITS AND SCHEDULES THERETO, CONTAIN THE ENTIRE
UNDERSTANDING OF THE PARTIES WITH RESPECT TO THE SUBJECT MATTER HEREOF AND
SUPERSEDE ALL PRIOR AGREEMENTS AND UNDERSTANDINGS, ORAL OR WRITTEN, WITH RESPECT
TO SUCH MATTERS, WHICH THE PARTIES ACKNOWLEDGE HAVE BEEN MERGED INTO SUCH
DOCUMENTS, EXHIBITS AND SCHEDULES.
5.4
NOTICES.
ANY AND ALL NOTICES OR OTHER
COMMUNICATIONS OR DELIVERIES REQUIRED OR PERMITTED TO BE PROVIDED HEREUNDER
SHALL BE IN WRITING AND SHALL BE DEEMED GIVEN AND EFFECTIVE ON THE EARLIEST OF
(A) THE DATE OF TRANSMISSION, IF SUCH NOTICE OR COMMUNICATION IS DELIVERED VIA