COMPANY SHALL REIMBURSE THE PURCHASER FOR ITS REASONABLE LEGAL
FEES FOR SERVICES RENDERED TO THE PURCHASER IN PREPARATION OF THIS AGREEMENT AND
THE RELATED AGREEMENTS, AND EXPENSES IN CONNECTION WITH THE PURCHASER'S DUE
DILIGENCE REVIEW OF THE COMPANY AND RELEVANT MATTERS.
AMOUNTS REQUIRED TO BE
PAID HEREUNDER WILL BE PAID AT THE CLOSING AND SHALL BE
$10,000.
(C)
THE COMPANY WILL PAY A CASH FEE IN THE AMOUNT OF THREE AND ONE
HALF
PERCENT (3.5%) OF THE AGGREGATE GROSS PURCHASE PRICE TO BE PAID TO THE
COMPANY FROM THE SALE OF THE PREFERRED STOCK IN THE OFFERING (THE "FUND
MANAGEMENT FEE") TO LAURUS CAPITAL MANAGEMENT, L.L.C., A DELAWARE LIMITED
LIABILITY COMPANY.
THE FUND MANAGEMENT FEE MUST BE PAID ON THE CLOSING DATE.
THE AFOREMENTIONED FUND MANAGEMENT FEE AND LEGAL FEES WILL BE PAYABLE AT THE
CLOSING OUT OF FUNDS HELD PURSUANT TO A FUNDS ESCROW AGREEMENT TO BE ENTERED
INTO BY THE COMPANY, PURCHASER AND AN ESCROW AGENT.
3.
CLOSING, DELIVERY AND PAYMENT.
3.1
CLOSING.
SUBJECT TO THE TERMS AND CONDITIONS HEREIN, THE CLOSING
OF THE TRANSACTIONS CONTEMPLATED HEREBY (THE "CLOSING"), WHICH CLOSING IS
COMPRISED OF PURCHASER'S PURCHASE OF THE PREFERRED STOCK IN THE AGGREGATE
PRINCIPAL AMOUNT OF $2,500,000, SHALL TAKE PLACE ON THE DATE HEREOF, AT THE
OFFICES OF JOHN TUCKER, ESQ., 825 THIRD AVENUE, 14TH FLOOR, NEW YORK, NEW YORK
10022, OR AT SUCH OTHER TIME OR PLACE AS THE COMPANY AND PURCHASER MAY MUTUALLY
AGREE (SUCH DATE IS HEREINAFTER REFERRED TO AS THE "CLOSING DATE").
3.2
DELIVERY.
AT THE CLOSING, SUBJECT TO THE TERMS AND CONDITIONS
HEREOF, THE COMPANY WILL DELIVER TO THE PURCHASER THE CERTIFICATE OF VOTE OF
DIRECTORS IN THE FORM ATTACHED AS EXHIBIT A REPRESENTING THE STATED AMOUNT OF
$2,500,000 OF PREFERRED STOCK AND A COMMON STOCK PURCHASE WARRANT IN THE FORM
ATTACHED AS EXHIBIT B IN THE PURCHASER'S NAME REPRESENTING THE RIGHT TO PURCHASE
UP TO 100,000 WARRANT SHARES AND THE PURCHASER WILL DELIVER TO THE COMPANY
$2,500,000, LESS FEES AND EXPENSES SET FORTH IN SECTION 2 HEREOF, BY CERTIFIED
FUNDS OR WIRE TRANSFER MADE PAYABLE TO THE ORDER OF THE COMPANY.
4.
REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company hereby represents and warrants to the Purchaser as of the date of
this Agreement as set forth below.
As used herein, the term SEC Reports shall
mean the Company's (i) Annual Report on Form 10-KSB for the fiscal year ended
June 30, 2003 and (ii) Quarterly Reports on Form 10-QSB for the fiscal quarters
ended September 30, 2003.
2
4.1
ORGANIZATION, GOOD STANDING AND QUALIFICATION.
THE COMPANY IS A
CORPORATION DULY ORGANIZED, VALIDLY EXISTING AND IN GOOD STANDING UNDER THE LAWS
OF THE COMMONWEALTH OF MASSACHUSETTS.
THE COMPANY HAS ALL REQUISITE CORPORATE
POWER AND AUTHORITY TO OWN AND OPERATE ITS PROPERTIES AND ASSETS, TO EXECUTE AND
DELIVER THIS AGREEMENT, THE WARRANT TO BE ISSUED IN CONNECTION WITH THIS
AGREEMENT, THE FUNDS ESCROW AGREEMENT, AND ALL OTHER AGREEMENTS REFERRED TO
HEREIN (COLLECTIVELY, THE "RELATED AGREEMENTS"), TO ISSUE AND SELL THE PREFERRED
STOCK