Common use of Initial Financing Clause in Contracts

Initial Financing. (a) As consideration for Huntingdon Corporation ("Huntingdon") advancing to the Company an aggregate of $1,000,000 through the date hereof (collectively, the "Initial Financing") for working capital purposes, on the date hereof, the Company shall deliver to Huntingdon a $1,000,000 principal amount convertible senior promissory note secured by all of the assets (other than cash, accounts receivable and inventory) of the Company and containing such other terms as set forth in Exhibit B annexed hereto (the "Initial Financing Note"). (b) As further consideration for the Initial Financing, on the date hereof, the Company shall issue to Huntingdon warrants to purchase up to 250,000 shares of common stock, no par value, of the Company (the "Common Stock") at an initial exercise price of $2.00 per share pursuant to a warrant agreement (the "Warrant Agreement") in the form of Exhibit C annexed hereto (the "Initial Financing Warrants").