the Common Stock
are then reported in the "Pink Sheets" published by the Pink Sheets, LLC (or a
similar organization or agency succeeding to its functions of reporting prices),
the most recent bid price per share of the Common Stock so reported; or (c) in
all other cases, the fair market value of a share of Common Stock as determined
by an independent appraiser selected in good faith by the Purchasers and
reasonably acceptable to the Company.
"Warrants" means collectively the Common Stock purchase warrants, in the form of
Exhibit D delivered to the Purchasers at the Closing in accordance with Section
2.2(a) hereof, which Warrants shall be exercisable immediately and have a term
of exercise equal to six years.
"Warrant Shares" means the shares of Common Stock issuable upon exercise of the
Warrants.
ARTICLE II.
PURCHASE AND SALE
2.1
CLOSING.
ON THE CLOSING DATE, UPON THE TERMS AND SUBJECT TO THE
CONDITIONS SET FORTH HEREIN, THE COMPANY AGREES TO SELL, AND EACH PURCHASER
AGREES TO PURCHASE, A DEBENTURE IN THE PRINCIPAL AMOUNT EQUAL TO SUCH
PURCHASER'S SUBSCRIPTION AMOUNT, AND A WARRANT AS DESCRIBED IN SECTION 2.2(A).
IN NO EVENT WILL THE AGGREGATE PRINCIPAL AMOUNT OF THE DEBENTURES SOLD HEREUNDER
IN COMBINATION WITH ANY OTHER AGREEMENTS FOR DEBENTURES AND WARRANTS ON THE SAME
TERMS AND CONDITIONS AS THE DEBENTURES AND WARRANTS PRIOR TO THE FILING DATE AS
PERMITTED PURSUANT TO SECTION 4.14 EXCEED $2,200,000, WITHOUT THE CONSENT OF THE
COMPANY AND PURCHASERS THAT HAVE THERETOFORE EXECUTED A COUNTERPART OF THIS
AGREEMENT.
PRIOR TO OR AT THE CLOSING, EACH PURCHASER SHALL DELIVER TO THE
COMPANY VIA WIRE TRANSFER OR A CERTIFIED CHECK TO THE TRUST ACCOUNT OF THE
COMPANY'S COUNSEL SET FORTH ON ANNEX A HERETO, IMMEDIATELY AVAILABLE FUNDS (OR
VIA SURRENDER OF EXISTING DEBT OBLIGATIONS) EQUAL TO THEIR SUBSCRIPTION AMOUNT,
AND THE COMPANY SHALL DELIVER TO EACH PURCHASER THEIR RESPECTIVE DEBENTURE AND
WARRANTS AS DETERMINED PURSUANT TO SECTION 2.2(A) AND THE OTHER ITEMS SET FORTH
IN SECTION 2.2 ISSUABLE AT THE CLOSING.
UPON SATISFACTION OF THE CONDITIONS SET
FORTH IN SECTIONS 2.2 AND 2.3, THE CLOSING SHALL OCCUR AT THE OFFICES OF LEHMAN
& EILEN, LLP, 50 CHARLES LINDBERGH BLVD., SUITE 505, UNIONDALE, NY 11553, OR
SUCH OTHER LOCATION AS THE PARTIES SHALL MUTUALLY AGREE.
2.2
Deliveries.
(A)
ON THE CLOSING DATE, THE COMPANY SHALL DELIVER OR CAUSE TO BE
DELIVERED TO EACH PURCHASER AT THE ABOVE ADDRESS THE FOLLOWING:
(I)
THIS AGREEMENT DULY EXECUTED BY THE COMPANY;
(II)
A LEGAL OPINION OF COMPANY COUNSEL, IN THE FORM OF EXHIBIT E
ATTACHED HERETO;
6
(III)
A DEBENTURE WITH A PRINCIPAL AMOUNT EQUAL TO SUCH PURCHASER'S
SUBSCRIPTION AMOUNT, REGISTERED IN THE NAME OF SUCH PURCHASER;
(IV)
A WARRANT REGISTERED IN THE NAME OF SUCH PURCHASER TO PURCHASE UP
TO A NUMBER OF SHARES OF COMMON STOCK EQUAL TO 100% OF SUCH PURCHASER'S
SUBSCRIPTION AMOUNT DIVIDED BY $0.55, WITH AN EXERCISE PRICE EQUAL TO $0.70
SUBJECT TO ADJUSTMENT THEREIN;
(V)
A LOCK-UP AGREEMENT, IN THE FORM OF EXHIBIT F ATTACHED HERETO,