Document:

CONSULTING AGREEMENT, dated as of November 1, 2005, between
 

Greenwich Solutions Inc.,   having an office at 8 Four Oaks Road, Bedminster, New Jersey 07921 (the “Company”) and BEDMINSTER NATIONAL CORP. , a 

Delaware corporation with executive offices located at 90 Washington Valley Road,

Bedminster, New Jersey, 07921 (the “Consultant”).

 

 

	
            WITNESSETH:
 

 

	
            WHEREAS, the Company, through its affiliates and principals, has
 

extensive experience in its areas of expertise, including, without limitation,

financial consulting, capital sourcing, strategic consulting, investment banking

and other business matters; and

 

	
            WHEREAS,  the Consultant has expertise in the assisting in the
 

development and expansion of companies such as the Company; and

 

	
            WHEREAS, the Company desires to retain the services of the Consultant
 

to render strategic advice with respect to the development of the Company; and

 

	
            WHEREAS, the Consultant wishes to render such services to the Company
 

upon the terms, conditions and covenants set forth in this Agreement.

 

	
            NOW, THEREFORE, in consideration of the mutual promises and covenants
 

hereinafter set forth, and subject to the conditions contained herein, the

parties hereto hereby agree as follows:

 

I. Terms of Service.

 

	
            Section 1.01 Duties. The Consultant will advise the Company’s
 

management, employees, and agents with respect to the Company’s field of

interest and business, and strategic and commercial matters related to the

Consultant’s expertise. The Consultant will use best efforts to assist the

Company in overall financial and business strategy and capital investment(s). 

 Consultant will assist the Company in structuring a business plan and the 

development of acquisition and financing  plans, including, without limitation,

structuring and negotiation of acquisitions and dispositions of assets. Upon

reasonable notice to the Consultant, the Company will have access to the

Consultant at reasonable times in order to discuss matters related to the

Company’s business. The services to be provided by the Consultant pursuant to

the terms hereof, whether such services are performed verbally or in writing,

shall be reasonable in terms of hours per month. If no such services are

requested, the consulting fees provided for herein shall still be paid.

 

 

 

 

 

 

Section 1.02 Term; Termination. The term (the “Term”) of this Agreement

shall be six (6) months, commencing on the date hereof; which may be terminated                                          by either party upon 10 days notice. In the event of any

earlier termination of this Agreement, the parties hereto agree that the

Consultant shall be entitled to the amounts  due hereunder

until the date of  such termination .

 

	
            Section 1.03 Consulting Fee. In consideration of the services to be
 

performed hereunder, the Consultant shall receive the fee of $3,000 per month

in accordance with the terms hereof. Such amount shall be paid in cash, net of

taxes, excises and other governmental and other charges, payable monthly on the

first of each month in advance. 

 

	
            Section 1.04 Expenses. If the Company requests the Consultant to
 

provide any specific services hereunder that cause the Consultant to incur

expenses, the Company shall reimburse the Consultant for all reasonable expenses

upon presentation of expense vouchers or statements or such other supporting

information as the Company may require. However, notwithstanding anything

contained in the foregoing to the contrary, the Consultant shall not incur any

reimbursable expense in excess of $500.00 without the prior written consent of

the Company.

 

II. Confidentiality.

 

	
            Section 2.01 Acknowledgments. The Consultant acknowledges that, during
 

the course of performing services hereunder, the Company may be disclosing

information to the Consultant related to the Company’s business, projects, and

plans, as well as other Information (collectively, the “Confidential

Information”). The Consultant acknowledges that the Company’s business is

extremely competitive, dependent in part upon the maintenance of secrecy, and

that any disclosure of the Confidential Information would result in serious harm

to the Company.

 

	
            Section 2.02 Use of Confidential Information. The Consultant agrees
 

that the Confidential Information will be used by the Consultant only in

connection with consulting activities hereunder and will not be used in any way

that is detrimental to the Company.

 

	
            Section 2.03 Non-Disclosure. The Consultant agrees not to disclose,
 

directly or indirectly, the Confidential Information to any third person or

entity, other than representatives or agents of the Company or legal advisors,

expert consultants, and other advisors utilized by the Consultant in connection

with consulting activities hereunder; provided, however, that each such advisor

agrees to keep such information confidential and to use it only in connection

with such consulting activities. The Consultant will treat all such Confidential

Information as confidential and proprietary property of the Company.

 

 

 

 

 

	
            Section 2.04 Confidential Information. The term “Confidential
 

Information” does not include information that (a) is or becomes generally

available to the public other than by disclosure in violation of this Agreement,

(b) becomes available to the Consultant on a nonconfidential basis (it being

understood that information that the Consultant obtained as a result of any

officer, director, or employer thereof being previously employed by, or

otherwise serving , the Company, shall be deemed to be Confidential Information,

unless otherwise exempt under this Section 2,04, or (c) was independently

developed by the Consultant after the date hereof without reference to the

information provided by the Company.

 

	
            Section 2.05 Permitted Disclosure. The Consultant may disclose any
 

Confidential Information that is required to be disclosed by law, government

regulation, or court or administrative order or process. If disclosure is

required, the Consultant will give the Company advance notice so that the

Company may seek a protective order or take other action reasonable under the

circumstances.

 

	
            Section 2.06 Return of Confidential Information. Upon termination of
 

this Agreement, the Consultant will promptly return to the Company all materials

containing Confidential Information, including, but not limited to, data,

records, reports, and other property furnished by the Company to the Consultant

or produced by the Consultant in connection with services rendered hereunder.

 

III.  Miscellaneous.

 

	
            Section 3.01 No Violation of Other Agreements. Each of the parties
 

hereto represents and warrants that execution, delivery, or performance of this

Agreement does not conflict with, or violate the terms of, any other agreement

to which it is a party or by which it is bound.

 

 

	
            Section 3.02  
 	
            Independent Contractor; Limitation of Liability.
 

 

	
            (a)The Consultant is an independent contractor to the Company,
 

and nothing herein shall be deemed to constitute the Consultant or its agents as

an employee or agent of the Company.

 

 

	
            (b) The Company acknowledges that it remains solely
 

responsible for the conduct and operation of its business and that the

Consultant makes no representation or warranty and assumes no liability with

respect to the outcome or result of any particular course of action or operation

of the Company’s business.

 

	
            Section 3.03 Notices. Any notice provided under this Agreement shall be
 

in writing and shall be deemed to have been effectively given when delivered

 

 

 

 

 

personally, sent by private express mail service (such as Federal Express), or

sent by registered or certified mail (return receipt requested) to the address

set forth in the introductory paragraph hereof (or to other address as any party

has furnished in writing to the other parties in accordance with the provisions

of this Section 3.03).

 

	
            Section 3.04 Assignment. None of the parties may assign its interest in
 

this Agreement or delegate its responsibilities hereunder without prior written

consent of the other party.

 

	
            Section 3.05 Severability. The invalidity or unenforceability of any
 

particular provision of this Agreement or portion thereof shall not affect the

validity or unenforceability of any other provision thereof. If any provision of

this Agreement is adjudicated to be so broad as to be unenforceable, it shall be

interpreted to be only as broad as is enforceable.

 

	
            Section 3.06 Counterparts; Governing Law. This Agreement may be
 

executed in any number of counterparts, each of which shall be deemed an

original, but all of which together shall constitute one and the same

instrument. This Agreement shall be governed by, and construed in accordance

with, the laws of the State of New Jersey, without giving effect to conflict of

laws.

 

	
            Section 3.07 Headings. The article and section headings in this
 

Agreement are solely for convenience of reference and shall be given no effect

in the construction or interpretation of this Agreement.

 

 

	
            IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
 

of the date first above written.

 

 

	
            GREENWICH SOLUTIONS INC.
 

 

 

	
            By:  
 	
            /s/ Thomas J. Filep  
 	
             

	
            Name:  Thomas J. Filep ,  Chief Executive Officer
 

 

 

	
            BEDMINSTER NATIONAL CORP.
 

 

 

	
            By:  
 	
            /s/ Paul Patrizio  
 	
             

	
             
	
            Paul Patrizio,  ChairmanExhibit 10.1

COMMITMENT LETTER

November 15, 2005

CONFIDENTIAL

Rentech Development Corporation
 1331 17th Street, Suite 720
 Denver, CO 80202

          Re:     Mezzanine Financing for Acquisition of Royster-Clark Nitrogen, Inc.

Ladies and Gentlemen:

                       Rentech Development
Corporation (the “Borrower”), a wholly owned
subsidiary of Rentech, Inc. (“Parent”), has advised
M.A.G. Capital, LLC (“MAG”) and its managed funds
Mercator Momentum Fund, LP, Mercator Momentum Fund III, LP, and
Monarch Pointe Fund, Ltd. (collectively, “M.A.G.
Funds”) and Pentagon Bernini Fund, Ltd.
(“Pentagon” and together with M.A.G. Funds, the
“Purchasers”) that Parent and Borrower intend to effect
certain transactions in connection with the all-cash acquisition of 100% of the
stock of Royster-Clark Nitrogen, Inc. (the “Target”) by
Parent and the Borrower (the
“Transaction”).   

                       
You have further advised us that the total funds needed to finance the
Transaction (including, without limitation, fees and expenses related thereto)
will be approximately $50,000,000 and such funds are intended to be obtained
from the following sources: (i) borrowings by the Borrower under senior secured
convertible debentures (the “Debentures”) to be
purchased by the Purchasers in an aggregate amount equal to $35,000,000, and
(ii) cash equity contributions by Parent to the Borrower in an aggregate amount
equal to $15,000,000.

                       This letter
agreement (together with the Term Sheet attached hereto as Exhibit A, the
“Commitment Letter”) will confirm the understanding and
agreement among the Borrower and the Purchasers with respect to the Transaction,
the Debentures and the other matters contemplated hereby.  For purposes of
this Commitment Letter, “Purchasers” shall mean the
Purchasers and/or any affiliates thereof as the Purchasers shall determine to be
appropriate to provide the commitments and services contemplated
herein.

          1.          The Debentures Commitment.

                       (a)         You have requested that the Purchasers commit to purchase the entire amount of the Debentures upon the terms and subject to the conditions set forth or referred to in this Commitment Letter.

                       (b)         Based on the foregoing and in reliance on the description of the Transaction and the financing thereof set forth above, the Purchasers are pleased to confirm by this Commitment Letter their commitment to you (the “Debenture Commitment”) to purchase or cause their respective affiliates to purchase all of the Debentures upon the terms and subject to the conditions set forth or referred to in this Commitment Letter.

                       (c)          It is agreed that the Purchasers will act as the sole and exclusive purchasers of the Debentures.  You agree that no other purchasers will be solicited and no other purchasers will purchase Debentures, unless the Purchasers shall so agree.

                       (d)         The commitments and agreements of the Purchasers described herein are subject to (i) the negotiation, execution and delivery on or before April 1, 2006 of definitive documentation in accordance with the Term Sheet with respect to the Debentures reasonably satisfactory to the Purchasers, (ii) there not having occurred or become known to the Purchasers any event, development or circumstance since the date of this Commitment Letter that (A) has caused or could reasonably be expected to cause a material adverse change in or a material adverse effect on (1) the Transaction or (2) the condition (financial or otherwise), results of operation, assets, liabilities, prospects or value of (I) the Borrower and its subsidiaries, taken as a whole, or (II) the Transaction, or (B)
calls into question in any material respect the Projections (as defined below) or any of the material assumptions on which such Projections were prepared, and (iii) the satisfaction or waiver on the date that definitive documentation related to the Debentures is executed and delivered by each of the parties thereto of the other conditions set forth or referred to in the section of the Term Sheet entitled “Conditions Precedent to Closing”.  

                       (e)          The terms and conditions of the commitments hereunder and of the Debentures are not limited to those set forth herein and in the Term Sheet; those matters that are not covered by the provisions hereof or of the Term Sheet shall be subject to the approval and agreement of the Purchasers and the Borrower.

          2.          Fees and Expenses; Limitation on Liability.  

                       (a)          In consideration of the execution and delivery of this Commitment Letter by the Purchasers, you jointly and severally agree to pay the fees and expenses set forth in the Term Sheet.  All payments by you under this Commitment Letter shall be made free and clear of any set-off, claims or withholding or other applicable taxes and shall be made in immediately available funds in United States dollars.  

                       (b)          The Purchasers have no liability or obligation of any kind to pay any brokers fee, finders fee or other fee relating to the Debentures, and you hereby agree to pay any and all such fees with your funds.  Each party agrees that no party shall be liable for any indirect, special, punitive or consequential damages arising out of or relating to this Commitment Letter and the transactions contemplated hereby and thereby.

          3.          Indemnification.  

                       (a)          Parent
and the Borrower hereby agree, jointly and severally, to indemnify and hold
harmless the Purchasers and their respective affiliates and each of their
respective officers, directors, partners, trustees, employees, affiliates,
shareholders, advisors, agents, attorneys-in-fact, controlling persons and
successors and permitted assigns (each, an “indemnified
person”) from and against any and all losses, claims, damages and
liabilities to which any such indemnified person may become subject arising out
of or in connection with this Commitment Letter, the Debentures, the use of the
proceeds therefrom, the Transaction, brokers fees, finders fees or any other
fees relating to the Debentures, any of the other transactions contemplated by
this Commitment Letter, any other transaction related thereto or any claim,
litigation, investigation or proceeding relating to any of the foregoing,
regardless of whether any indemnified person is a party thereto, and to
reimburse each indemnified person promptly upon written demand for all legal and
other expenses reasonably incurred by it in connection with investigating,
preparing to defend or defending, or providing evidence in or preparing to serve
or serving as a witness with respect to, any lawsuit, investigation, claim or
other proceeding relating to any of the foregoing (including, without
limitation, in connection with the enforcement of the indemnification
obligations set forth herein); provided, however, that no indemnified
person shall be entitled to indemnity hereunder in respect of any loss, claim,
damage, liability or expense to the extent that it is found by a final,
non-appealable judgment of a court of competent jurisdiction that such loss,
claim, damage, liability or expense resulted directly from the gross negligence
or willful misconduct of such indemnified person.  In no event will any
party hereto be liable for consequential, indirect, punitive or special damages
as a result of any failure to fund the purchase of, or to issue, any of the
Debentures contemplated hereby or otherwise in connection with this Commitment
Letter or the Debentures.  No party hereto shall be liable for any damages
arising from the use by unauthorized persons of Information or other materials
sent through electronic, telecommunications or other information transmission
systems that are intercepted by other persons.

-2-

                       (b)          The
Borrower, Parent and the Purchasers agree that if any indemnification or
reimbursement sought pursuant to this Section 3 is judicially determined
to be unavailable for a reason other than the gross negligence or willful
misconduct of such indemnified person, then Parent and the Borrower, on the one
hand, and the Purchasers, on the other hand, in each case on a joint and several
basis, shall contribute to the losses, claims, damages, liabilities and expenses
for which such indemnification or reimbursement is held unavailable (i) in such
proportion as is appropriate to reflect the relative benefits to Parent and the
Borrower, on the one hand, and the Purchasers, on the other hand, in connection
with the transactions to which such indemnification or reimbursement relates, or
(ii) if the allocation provided by clause (i) above is judicially determined not
to be permitted, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) but also the relative faults of
Parent and the Borrower, on the one hand, and the Purchasers, on the other hand,
as well as any other equitable considerations.

          4.          Termination of Commitment Letter.  

                       (a)          This
Commitment Letter shall automatically terminate on the earlier of: (i) April 1,
2006; and (ii) the date the Borrower or any of its affiliates closes the
Transaction (or a transaction substantially similar) without the use of the
Debentures. Without limiting the foregoing, if, prior to Closing, Parent or the
Borrower shall (A) institute a voluntary case seeking liquidation or
reorganization under applicable federal or state bankruptcy laws, or consent to
the institution of an involuntary case thereunder against it, (B) file a
petition or consent or shall otherwise institute any similar proceeding under
any other applicable federal or state law, or shall consent thereto, (C) apply
for, or by consent or acquiescence there shall be an appointment, of a receiver,
liquidator, sequestrator, trustee or other officer with similar powers for
itself or any substantial part of its assets, (D) make an assignment for the
benefit of its creditors, (E) admit in writing its inability to pay its debts
generally as they become due, or (F) become the subject of an involuntary case
seeking liquidation or reorganization under applicable federal or state
bankruptcy laws, this Commitment Letter shall automatically terminate. 

                       (b)          Notwithstanding anything to the contrary herein, you may terminate this Commitment Letter for cause upon ten days notice, in which case no fees shall be due at any time.   For the purposes of this Commitment Letter, a termination for “cause” shall mean any termination arising directly out of a breach by the Purchasers of any of their material obligations hereunder.

-3-

          5.          Information.  

                       (a)          You
agree promptly to prepare and provide to the Purchasers all information with
respect to Parent, the Borrower and the Transaction, including without
limitation, all financial information and projections (the
“Projections”), as the Purchasers may reasonably
request.  You hereby represent and covenant that (i) to the best of our
knowledge (only with respect to information made available to the Purchasers by
or on behalf of the Target), all information (the
“Information”) that has been or will be made available
to the Purchasers by you or any of your representatives is or will be, when
furnished, complete and correct in all material respects and does not or will
not, when furnished, contain any untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements contained
therein not misleading in light of the circumstances under which such statements
are made and (ii) the Projections that have been or will be made available to
the Purchasers by you or any of your representatives have been or will be
prepared in good faith based upon reasonable assumptions.  You understand
that the Purchasers (A) may use and rely on the Information and Projections
without independent verification thereof and that you will promptly notify the
Purchasers of any changes in circumstances that could be expected to call into
question the continued reasonableness of any assumption underlying the
Projections and (B) may terminate this Commitment Letter if any such
representations and warranties shall be incorrect in any material
respect.

          6.         Survival. 
The provisions of Sections 2, 3, and 4(b) above and
Section 7 below and the paragraph entitled Break Up Fee in Appendix A shall survive the expiration or termination of any
commitment hereunder or this Commitment Letter (including any extensions) and
the execution and delivery of definitive financing documentation.

          7.          Choice
of Law; Jurisdiction; Waivers.  This Commitment Letter shall be
governed by and construed in accordance with the laws of the State of New
York.  To the fullest extent permitted by applicable law, you hereby
irrevocably submit to the non-exclusive jurisdiction of any New York State court
or federal court sitting in the Borough of Manhattan in respect of any suit,
action or proceeding arising out of or relating to the provisions of this
Commitment Letter and irrevocably agree that all claims in respect of any such
suit, action or proceeding may be heard and determined in any such court. 
The parties hereto hereby waive, to the fullest extent permitted by applicable
law, any objection that they may now or hereafter have to the laying of venue of
any such suit, action or proceeding brought in any such court, and any claim
that any such suit, action or proceeding brought in any such court has been
brought in an inconvenient forum.  The parties hereto hereby waive, to the
fullest extent permitted by applicable law, any right to trial by jury with
respect to any action or proceeding arising out of or relating to this
Commitment Letter.

          8.          Miscellaneous. 

                       (a)          This
Commitment Letter may be executed in one or more counterparts, each of which
will be deemed an original, but all of which taken together will constitute one
and the same instrument.  Delivery of an executed signature page of this
Commitment Letter by facsimile transmission shall be effective as delivery of a
manually executed counterpart hereof.

                       (b)          No
party may assign any of its rights, or be relieved of any of its obligations
hereunder, without the prior written consent of the other party.

                       (c)          This Commitment Letter sets forth the entire understanding of the parties hereto as to the scope of the Debenture Commitment and the obligations of the Purchasers hereunder.  This Commitment Letter shall supersede all prior understandings and proposals, whether written or oral, between the Purchasers and you relating to any financing or the transactions contemplated hereby.  

-4-

                       (d)          This
Commitment Letter has been and is made solely for the benefit of the parties
hereto, the indemnified persons, and their respective successors and assigns,
and nothing in this Commitment Letter, expressed or implied, is intended to
confer or does confer on any other person or entity any rights or remedies under
or by reason of this Commitment Letter or the agreements of the parties
contained herein.

                       (e)          Each
of the parties hereto represents and warrants to each of the other parties hereto
and their respective successors and permitted assigns that (i) it has all
requisite power and authority to enter into this Commitment Letter and (ii) this
Commitment Letter has been duly and validly authorized by all necessary action
on the part of such party, has been duly executed and delivered by such party
and constitutes a legally valid and binding agreement of such party, enforceable
against it in accordance with its terms, except as enforcement may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other similar
laws relating to or affecting the rights of creditors generally or by general
principles of equity.  

[signature page follows]

-5-

                    If
the foregoing correctly sets forth our agreement, please indicate your
acceptance of the terms hereof and of the Term Sheet by returning to us executed
counterparts hereof, in each case not later than 5:00 p.m., Los Angeles,
California time, on November 15, 2005.  This Commitment Letter shall
automatically terminate at such time in the event the Purchasers have not
received such executed counterparts in accordance with the immediately preceding
sentence.

                    The
Purchasers are pleased to have been given the opportunity to assist you in
connection with this important financing.

	
  
 
  	
  
Very truly yours,
  
	
  
 
  	
  
 
  
	
  
 
  	
  
 
  
	
  
 
  	
  
M.A.G. CAPITAL, LLC
  
	
   
  	
  
MERCATOR MOMENTUM   FUND, LP
  
	
  
 
  	
  
MERCATOR MOMENTUM   FUND III, LP
  
	
  
 
  	
  
MONARCH POINTE   FUND, LTD.
  
	
  
 
  	
  
 
  
	
  
 
  	
  
 
  
	
  
 
  	
  
By:
  	
  
/s/ David Firestone
  
	
  
 
  	
  
 
  	
  

  
	
  
 
  	
  
 
  	
  
David Firestone
  
	
   
  	
  
 
  	
  
Managing Partner
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
PENTAGON BERNINI   FUND, LTD.
  
	
  
 
  	
  
 
  
	
  
 
  	
  
 
  
	
  
 
  	
  
By:
  	
  
/s/ Lewis Chester
  
	
  
 
  	
  
 
  	
  

  
	
  
 
  	
  
 
  	
  
Lewis Chester
  
	
   
  	
  
 
  	
  
Investment Manager
  

Accepted and agreed to as of the
      date first above written:

	
  
RENTECH, INC.
  
	
  
 
  	
  
 
  
	
  
 
  	
  
 
  
	
  
By: 
  	
  
/s/ Hunt Ramsbottom
  	
  
 
  
	
  
 
  	
  

  	
  
 
  
	
  
Name:
  	
  
D. Hunt Ramsbottom
  	
  
 
  
	
  Title:
  	
  
President
  	
  
 
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
 
  
	
  
RENTECH DEVELOPMENT CORPORATION
  
	
  
 
  
	
  
 
  
	
  
By: 
  	
  
/s/ Richard O. Sheppard
  	
  
 
  
	
  
 
  	
  

  	
  
 
  
	
  
Name:
  	
  
Richard O. Sheppard
  	
  
 
  
	
  Title:
  	
  
President
  	
  
 
  

S-1

EXHIBIT A

M.A.G. Capital, LLC
 TERM SHEET

Terms used herein and not defined herein shall have the meanings set forth in the attached Commitment Letter between the Borrower and the Purchasers.

	
  
Borrower:
  	
  
Rentech Development Corporation
  
	
  
 
  	
  
 
  
	
  
Purchasers:
  	
  
M.A.G. Funds and Pentagon
  
	
  
 
  	
  
 
  
	
  
Security to be Issued:
  	
  
Secured Convertible Debentures (the “Debentures”)
  
	
  
 
  	
  
 
  
	
  Purchase Price
  	
  
$35 million.
  
	
  
 
  	
  
 
  
	
  
Interest Rate:
  	
  
14% per year, payable quarterly in arrears in cash
  
	
  
 
  	
  
 
  
	
  
Security / Guarantees:
  	
  
Perfected first security interest (subject to   customary permitted liens) in all assets of the Borrower, excluding inventory   and accounts receivable, plus guarantees by each of Parent and its   subsidiaries other than Borrower.
  
	
  
 
  	
  
 
  
	
  
Maturity:
  	
  
The principal amount outstanding under the   Debentures shall be payable in full on the earlier of (i) the third   anniversary of the closing of the sale of the Debentures, (ii) the closing of   any debt or mezzanine financing in which the Borrower or any subsidiary   thereof receives more than $35,000,000 or (iii) the closing of any sale or   merger resulting in a change of control of the Borrower or its business (the   “Maturity Date”).
  
	
  
 
  	
  
 
  
	
  Quarterly Commitment Fee:
  	
  
In addition to the Interest Rate payable in cash   quarterly, Borrower shall pay a quarterly commitment fee equal to 0.75% of   the aggregate principal amount of Debentures, payable quarterly in arrears in   cash.
  
	
  
 
  	
  
 
  
	
  
Due Diligence Fee:
  	
  
MAG shall receive a Due Diligence Fee of $350,000, of which $250,000 shall be due and payable upon  execution of this Commitment Letter and $100,000 shall be due and payable upon the Purchasers’ written confirmation of the completion of their due diligence.
  
	
  
 
  	
  
 
  
	
  
Conversion Rate:
  	
  
Each Debenture shall be convertible any time, in   whole or in part, at the holder’s sole discretion into that number of shares   of Common Stock of Parent (the “Common Stock”) as is determined by dividing   the principal amount being converted by a Conversion Price, which shall be   $3.50.  The Conversion Price shall be   subject to equitable adjustment in the event of any stock splits, stock   dividends, recapitalizations and the like.
  
	
  
 
  	
  
 
  
	
  
Prepayment Right:
  	
  
The Borrower may prepay the Debentures, in whole or   in part in cash, at any time, provided that (i) the Borrower shall give the   Purchasers at least 15 days prior written notice of any prepayment so that   the Purchasers will have the opportunity to convert the Debentures in whole   or in part, and (ii) the Borrower shall pay a prepayment fee to the   Purchasers equal to 3% of the amount of the principal prepaid.
  

A-1

	
  
Warrants:
  	
  
Parent shall issue Common Stock purchase warrants   (the “Warrants”) to the Purchasers and MAG covering 3,500,000 shares of   Common Stock.  The exercise price per   share shall be $3.50, subject to equitable adjustment in the event of any   stock splits, stock dividends, recapitalizations and the like.  The Warrants shall have a ten year term.
  
	
  
 
  	
  
 
  
	
  
Beneficial Ownership Limit:
  	
  
The Debentures and Warrants shall provide that the   beneficial ownership, as determined under Rule 13d-3, as adopted by the SEC,   of the Purchasers and their respective affiliates, shall remain below 9.99%   of the total outstanding shares of Common Stock of Parent at all times.
  
	
  
 
  	
  
 
  
	
  
Registration:
  	
  
Within 90 Days after the Closing, Parent shall file   a Registration Statement on Form S-3 with the SEC registering the maximum   number of shares of Common Stock issuable upon conversion of the Debentures   and exercise of the Warrants.  Parent   shall use its best efforts to have the Registration Statement declared   effective within 180 days after the initial filing with the SEC.
  
	
   
  	
  
 
  
	
  
 
  	
  
If Parent fails to file the Registration Statement   with the SEC within 90 days after the Closing or the Registration Statement is   not deemed effective within 180 days after filing, Parent shall pay the   Purchasers an amount equal to $15,000 for each day that filing or   effectiveness is late.
  
	
  
 
  	
  
 
  
	
  
Debt Covenants:
  	
  
Customary covenants for secured debt, including a   prohibition on the incurrence of additional indebtedness for borrowed money   without the consent of the Purchasers, which the Purchasers may withhold in   their sole discretion.
  
	
  
 
  	
  
 
  
	
  
Events of Default:
  	
  
An Event of Default shall include the commencement   by Parent or the Borrower of a voluntary case or proceeding under the   bankruptcy laws or the failure of Parent or the Borrower, as applicable,   to:  (i) make any payment of principal   or interest under the Debentures when due; (ii) observe any other covenant   contained in the Debentures or any related agreement; (iii) file the   Registration Statement with the SEC within 90 days after the Closing   Date; (iv) maintain the listing of the Common Stock on the American   Stock Exchange; (v) have the Registration Statement deemed effective by   the SEC within 180 days after filing; (vi) discharge or stay an involuntary   bankruptcy proceeding brought with respect to Parent or the Borrower within   60 days of such action being taken against Parent or the Borrower; or   (vii) pay the Due Diligence Fee or legal fees within 3 days after the Closing   Date.
  
	
   
  	
  
 
  
	
  
Late Payment Fee:
  	
  
If any payment or principal or interest due under   the Debentures is not paid when due, the Borrower shall pay, in addition to   the amount due, a late payment fee equal to 7% of the amount of the payment.
  
	
  
 
  	
  
 
  
	
  
Remedies upon an Event of Default:
  	
  
If an Event of Default occurs and is continuing, the   Purchasers may exercise any or all of their rights under the Debentures or   any related agreement as well as any other right or remedy to which they may   be entitled by law.
  

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Short Selling:
  	
  
The Purchasers and their affiliates shall not engage   in any short selling of Parent’s securities.
  
	
  
 
  	
  
 
  
	
  
Conditions Precedent to Closing:
  	
  
        Customary conditions, including
        (a) the satisfactory completion of due diligence, including legal,
        financial, tax, business and operational diligence, relating to the
        Transaction and the Target, which shall be satisfactory to the
        Purchasers in their sole discretion, (b) the delivery of audited
        financial statements of the Target for years 2002, 2003, and 2004 and
        the most recently available unaudited financial statements of the
        Target, (c) the delivery of unaudited pro forma financial statements for
        the Borrower pro forma for the Transaction, (d) appropriate definitive
        documentation, (e) the opinion of Parent’s counsel in a form
        acceptable to Purchasers, and (f) concurrent consummation of the
        acquisition of the Target in accordance with the terms of the applicable
        purchase and sale agreement.  In addition, the Borrower shall cause
        the holders of all indebtedness of Parent and the Borrower to execute
        agreements acceptable to the Purchasers subordinating their rights to
        receive payment from the Borrower to the rights of the Purchasers under
        the Debentures.  The working capital line of credit, which will be
        secured by inventory and accounts receivable, shall not be
        subordinated.
 
	
   
  	
  
 
  
	
  
Legal Expenses:
  	
  
Borrower shall reimburse MAG for legal expenses   incurred in connection with this transaction in the amount of $20,000.  Upon execution of Commitment Letter,   $5,000 of the legal expenses shall be due and payable. The balance shall be   due and payable on the Closing Date.
  
	
  
 
  	
  
 
  
	
  
Break Up Fee:
  	
  
In the event that the Borrower enters into an   agreement with a third party to provide debt or mezzanine financing in   connection with the Transaction or any other transaction involving the   Target, then, unless waived by the Purchasers in writing, Borrower shall pay   the Purchasers a break up fee in the aggregate amount of $1,000,000. If the   Purchasers withdraw their commitment under this Commitment Letter or are   otherwise unable to purchase the Debentures (other than as a result of a   wrongful act or breach by the Borrower or its affiliates), no break up fee is   due and payable.
  
	
  
 
  	
  
 
  
	
  
Confidentiality:
  	
  
This Term Sheet is confidential and proprietary to   MAG and the Purchasers.  The Borrower   and its affiliates shall not disclose this Term Sheet or its contents to   third parties without the prior written consent of the Purchasers; provided,   however, that Borrower may disclose the Commitment Letter, including this   Term Sheet, to its directors, advisors and attorneys and to the Target).
  
	
   
  	
   
  
	
  Governing Law:
  	
  New York.
  

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