Common use of Purchase and Sale of Notes and Warrants Clause in Contracts

Purchase and Sale of Notes and Warrants. The Borrower hereby agrees to sell to you and, subject to the terms and conditions herein set forth, you agree to purchase from the Borrower, Notes in the initial aggregate principal amount of $12,000,000, at a purchase price of 100% of the principal amount thereof less transaction costs paid or incurred by the Investor in connection with the Transaction. Commencement of the closing of the purchase and delivery of the Notes and Warrants to be purchased by you hereunder shall take place at the offices of Manatt, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, LLP at 10:00, Los Angeles time on a date which is within 15 calendar days of the satisfaction of the last to occur of the conditions set forth in Section 6 of this Agreement, except for the conditions set forth in Sections 6.4 and 6.11 (or such other time and place as the parties shall agree) (herein called the "Commencement Date") provided that, unless the parties shall otherwise agree, the Commencement Date shall occur on or prior to the later of (i) January 31, 2002, and (ii) four (4) days after the stockholders of Borrower approve the Transactions, as contemplated in Sections 6.8 and 9.8 of this Agreement. The Closing Date shall be the date which, in accordance with the terms of that certain Escrow Agreement (the "Escrow Agreement"), which is incorporated by reference herein in its entirety, dated of even date herewith, among the Borrower, the Investor and the Escrow Agent (the "Escrow Agent"), (i) the Borrower will deliver to you a Note or Notes registered in your name or in the name of your nominee, each such Note to be duly executed and dated the Closing Date, in the aggregate principal amount to be purchased by you as specified above, in such denominations (not less than $500,000 and multiples of $100,000 in excess thereof) as you may specify by timely notice to the Borrower (or, in the absence of such notice, one Note registered in your name in a principal amount equal to the aggregate principal amount of Notes to be purchased by you hereunder), against your delivery to the Borrower of immediately available funds in the amount of the aggregate purchase price of such Note or Notes, and (ii) the Borrower will deliver to you Warrants issued in your name or in the name of your nominee, in such denominations (of not less than 10,000 shares) as you may specify by timely notice (or in the absence of such notice to the Borrower, one Warrant issued in your name exercisable to purchase the aggregate number of shares of Warrant Stock for which all Warrants to be purchased by you hereunder shall be exercisable on 30 days notice), against your delivery to the Borrower of immediately available funds in the amount of the aggregate purchase price of such Warrants (the "Closing Date").

Purchase and Sale of Notes and Warrants. The Borrower hereby agrees to (a) Upon the following terms and conditions, the Company shall issue and sell to you andthe Purchasers, subject to and the terms and conditions herein set forth, you agree to Purchasers shall purchase from the Borrower, Notes in the initial aggregate principal amount of $12,000,000, at a purchase price of 100% of the principal amount thereof less transaction costs paid or incurred by the Investor in connection with the Transaction. Commencement of the closing of the purchase and delivery of the Notes and Warrants to be purchased by you hereunder shall take place at the offices of Manatt, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, LLP at 10:00, Los Angeles time on a date which is within 15 calendar days of the satisfaction of the last to occur of the conditions set forth in Section 6 of this Agreement, except for the conditions set forth in Sections 6.4 and 6.11 (or such other time and place as the parties shall agree) (herein called the "Commencement Date") provided that, unless the parties shall otherwise agree, the Commencement Date shall occur on or prior to the later of (i) January 31, 2002, and (ii) four (4) days after the stockholders of Borrower approve the Transactions, as contemplated in Sections 6.8 and 9.8 of this Agreement. The Closing Date shall be the date which, in accordance with the terms of that certain Escrow Agreement (the "Escrow Agreement"), which is incorporated by reference herein in its entirety, dated of even date herewith, among the Borrower, the Investor and the Escrow Agent (the "Escrow Agent")Company, (i) the Borrower will deliver to you a Note or Notes registered in your name or in the name of your nominee, each such Note to be duly executed and dated the Closing Date, 10% senior secured convertible promissory notes in the aggregate principal amount of up to $5,750,000, convertible into shares of the Company’s common stock, par value $0.001 per share (the “Common Stock”), in substantially the form attached hereto as Exhibit B (the “Notes”). The Company and the Purchasers are executing and delivering this Agreement in accordance with and in reliance upon the exemption from securities registration afforded by Section 4(2) of the U.S. Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder (the “Securities Act”), including Regulation D (“Regulation D”), and/or upon such other exemption from the registration requirements of the Securities Act as may be available with respect to any or all of the investments to be purchased by you made hereunder. All share numbers and per share, exercise and conversion prices set forth in this Agreement and the Transaction Documents assume the effectuation, prior to the date hereof, of the reverse split of the Company as specified abovedisclosed in the Company’s Information Statement filed with the Commission on February 28, 2007; to the extent such reverse split was not effected prior to the date hereof, appropriate and proportional adjustment shall be made to all share numbers and per share, exercise and conversion prices set forth herein and in the other Transaction Documents. (b) Upon the following terms and conditions, the Purchasers shall be issued (i) Warrants, in such denominations substantially the form attached hereto as Exhibit C (not less than $500,000 and multiples the “Long Term Warrants”), to purchase a number of $100,000 in excess thereofshares of Common Stock equal to one hundred percent (100%) as you may specify by timely notice to of the Borrower (or, in the absence number of Conversion Shares issuable upon conversion of such notice, one Purchaser’s Note registered in your name in a principal amount at an exercise price per share equal to the aggregate principal amount of Notes to be purchased by you hereunder), against your delivery to the Borrower of immediately available funds Warrant Price (as defined in the amount Long Term Warrants) for a term of five (5) years following the aggregate purchase price of such Note or Notes, Closing Date and (ii) the Borrower will deliver to you Warrants issued in your name or in the name of your nomineeWarrants, in such denominations substantially the form attached hereto as Exhibit D (of not less than 10,000 shares) as you may specify by timely notice (or in the absence of such notice to “Short Term Warrants” and, together with the BorrowerLong Term Warrants, one Warrant issued in your name exercisable the “Warrants”), to purchase the aggregate a number of shares of Warrant Common Stock for which all Warrants equal to be purchased by you hereunder shall be exercisable on 30 days notice), against your delivery one hundred percent (100%) of the number of Conversion Shares issuable upon conversion of such Purchaser’s Note at an exercise price per share equal to the Borrower of immediately available funds Warrant Price (as defined in the amount Short Term Warrants) for a term that expires on the later of (a) one (1) year following the Closing Date and (b) the date that is the 90th continuous day of effectiveness of the aggregate purchase price Registration Statement permitting the resale of all of the Warrant Shares pursuant to the Registration Statement. The number of shares of Common Stock issuable upon exercise of the Warrants issuable to each Purchaser is set forth opposite such Warrants (the "Closing Date")Purchaser’s name on Exhibit A attached hereto.

Purchase and Sale of Notes and Warrants. The Borrower hereby agrees to sell to you and, subject Subject to the terms and conditions herein set forth, you agree the Company hereby agrees to sell to the Purchasers and each Purchaser agrees to purchase from the Borrower, Notes in the initial aggregate principal amount of $12,000,000, at a purchase price of 100% of the principal amount thereof less transaction costs paid or incurred by the Investor in connection with the Transaction. Commencement of the closing of the purchase and delivery of the Notes and Warrants to be purchased by you hereunder shall take place Company at the offices of Manatt, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, LLP at 10:00, Los Angeles time on a date which is within 15 calendar days of the satisfaction of the last to occur of the conditions set forth in Section 6 of this Agreement, except for the conditions set forth in Sections 6.4 and 6.11 Closing (or such other time and place as the parties shall agree) (herein called the "Commencement Date") provided that, unless the parties shall otherwise agree, the Commencement Date shall occur on or prior to the later of (i) January 31, 2002, and (ii) four (4) days after the stockholders of Borrower approve the Transactions, as contemplated in Sections 6.8 and 9.8 of this Agreement. The Closing Date shall be the date which, in accordance with the terms of that certain Escrow Agreement (the "Escrow Agreement"), which is incorporated by reference herein in its entirety, dated of even date herewith, among the Borrower, the Investor and the Escrow Agent (the "Escrow Agent"defined below), (i) Notes in the Borrower amount set forth on the signature pages hereof below its name at 100% of principal amount; provided, however, that all such issuances of Notes (exclusive of Additional Notes which may be issued to satisfy interest payment Obligations) shall not result in originally issued Notes with an aggregate principal amount exceeding $28,000,000 and (ii) Warrants in the amount set forth on the signature pages hereof below its name for no additional consideration; provided, however, that total of all such Warrants shall not exceed 5.75% of the fully diluted common equity of the Company on the Date of Closing (as defined below). The Company will deliver to you a Note each Purchaser one or more Notes in the form attached as Exhibit A hereto registered in your name or in the name of your such Purchaser (or its nominee), each such Note to be duly executed and dated the Closing Date, in the aggregate principal amount to be purchased by you as specified above, in such denominations (not less than $500,000 and multiples of $100,000 in excess thereof) as you may specify by timely notice to the Borrower (or, in the absence of such notice, one Note registered in your name in a principal amount equal to evidencing the aggregate principal amount of Notes to be purchased by you hereunder), against your delivery to the Borrower of immediately available funds such Purchaser and in the amount of denomination or denominations specified by such Purchaser and one or more Warrants in the aggregate purchase price of such Note or Notes, and (ii) the Borrower will deliver to you Warrants issued in your name or form attached as Exhibit B hereto registered in the name of your nominee, in such denominations (of not less than 10,000 shares) as you may specify by timely notice Purchaser (or in its nominee), evidencing the absence of such notice to the Borrower, one Warrant issued in your name exercisable to purchase the aggregate number of shares of Warrant Stock for which all common stock of the Company to be issued upon exercise of the Warrants to be purchased by you hereunder shall be exercisable on 30 days notice), such Purchaser and in the denomination or denominations specified by such Purchaser against your delivery to payment of the Borrower purchase price thereof by transfer of immediately available funds in on the amount date of the aggregate purchase price of such Warrants closing, which shall be June 25, 2002 (the "Closing DateClosing"; the "Date of Closing"), to accounts specified by the Company in a funds flow memorandum to be delivered by the Company to the Purchasers not later than one Business Day prior to the Date of Closing. To the extent Additional Notes are issued, the Company will deliver to each then holder of the Notes the Additional Notes registered in the name of such holder (or its nominee). The issuance of Additional Notes shall not require the issuance of additional Warrants.

Purchase and Sale of Notes and Warrants. The Borrower hereby agrees (a) Upon the following terms and subject to the conditions contained herein, the Company shall issue and sell to you andthe Purchasers, and the Purchasers shall purchase from the Company, convertible promissory notes in the aggregate principal amount of four million, two hundred thousand dollars ($4,200,000) (the "Purchase Price"), bearing interest at a rate of six percent (6%) per annum, in substantially the form attached hereto as Exhibit B (the "Notes"). The outstanding principal amount of the Notes, together with all accrued and unpaid interest, shall be due and payable on or before the Maturity Date (as defined in the Notes) in cash; provided, however, that at any time while the Notes are outstanding and subject to any limitations or other provisions on conversion contained in the Notes, the Purchasers shall have the option to convert the outstanding principal amount of such Notes plus any and all accrued but unpaid interest into such number of shares of common stock of the Company, par value $.001 per share (the "Common Stock"), at a conversion price of thirty cents ($.30) per share, subject to the conversion provisions in the Note; provided, further, however, that, if, at any time following the date hereof while the Notes are outstanding the average closing sale price of the Common Stock for the ten (10) trading days immediately prior to the date of conversion (as determined by the Bloomberg volume weighted average price function), is equal to or greater than forty cents ($0.40) per share, then, subject to any limitations or other provisions on conversion contained in the Notes, the Company shall have the option to convert the outstanding principal amount of such Notes plus any and all accrued but unpaid interest into such number of shares of Common Stock, at a conversion price of thirty cents ($.30) per share. (b) In consideration of and in express reliance upon the representations, warranties, covenants, terms and conditions herein set forthof this Agreement, you the Company agrees to issue and sell to the Purchasers and the Purchasers agree to purchase from the Borrower, Notes in Notes. The closing under this Agreement (the initial aggregate principal amount of $12,000,000, at a purchase price of 100% of the principal amount thereof less transaction costs paid or incurred by the Investor in connection with the Transaction. Commencement of the closing of the purchase and delivery of the Notes and Warrants to be purchased by you hereunder "Closing") shall take place at the offices of ManattJenkens & Gilchrist Parker Chapin LLP, The Chrysler Building, 405 Lexington Av▇▇▇▇, ▇▇w ▇▇▇▇, ▇▇▇ & ▇▇rk 10174 upon the satisfaction ▇▇ ▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, LLP at 10:00, Los Angeles time on a date which is within 15 calendar days of the satisfaction of the last to occur of the conditions set forth in Section 6 of this Agreement, except for the conditions set forth in Sections 6.4 ▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇ons 4 and 6.11 (or such other time and place as the parties shall agree) (herein called the "Commencement Date") provided that, unless the parties shall otherwise agree, the Commencement Date shall occur on or prior to the later of (i) January 31, 2002, and (ii) four (4) days after the stockholders of Borrower approve the Transactions, as contemplated in Sections 6.8 and 9.8 of this Agreement. The Closing Date shall be the date which, in accordance with the terms of that certain Escrow Agreement (the "Escrow Agreement"), which is incorporated by reference herein in its entirety, dated of even date herewith, among the Borrower, the Investor and the Escrow Agent (the "Escrow Agent"), (i) the Borrower will deliver to you a Note or Notes registered in your name or in the name of your nominee, each such Note to be duly executed and dated the Closing Date, in the aggregate principal amount to be purchased by you as specified above, in such denominations (not less than $500,000 and multiples of $100,000 in excess thereof) as you may specify by timely notice to the Borrower (or, in the absence of such notice, one Note registered in your name in a principal amount equal to the aggregate principal amount of Notes to be purchased by you hereunder), against your delivery to the Borrower of immediately available funds in the amount of the aggregate purchase price of such Note or Notes, and (ii) the Borrower will deliver to you Warrants issued in your name or in the name of your nominee, in such denominations (of not less than 10,000 shares) as you may specify by timely notice (or in the absence of such notice to the Borrower, one Warrant issued in your name exercisable to purchase the aggregate number of shares of Warrant Stock for which all Warrants to be purchased by you hereunder shall be exercisable on 30 days notice), against your delivery to the Borrower of immediately available funds in the amount of the aggregate purchase price of such Warrants 5 hereof (the "Closing Date"). (c) As an inducement for the purchase of the Notes by the Purchasers, the Company shall issue and deliver to the Purchasers (pro rata in proportion to the Purchase Price paid by each Purchaser) certificates representing warrants (the "Warrants") to purchase shares of the Company's Common Stock (the "Warrant Shares") as follows: (i) Warrants to purchase 9,367,646 shares of Common Stock at an exercise price of forty cents ($0.40) per share, (ii) Warrants to purchase 9,367,646 shares of Common Stock at an exercise price of thirty-five cents ($0.35) per share, (iii) Warrants to purchase 9,367,646 shares of Common Stock at an exercise price of fifteen cents ($0.15) per share and (iv) Warrants to purchase 9,367,646 shares of Common Stock at an exercise price of eleven cents ($0.11) per share. (d) On or prior to the Closing Date, each Purchaser shall fund its portion of the Purchase Price into an escrow account maintained by the law offices of Jenkens & Gilchrist Parker Chapin LLP, as escrow agent (the "Escrow Agent"). ▇▇▇▇ ▇▇▇▇sf▇▇▇▇▇▇ ▇▇ ▇▇▇▇ of the conditions set forth in Sections 4 and 5 hereof and delivery of the Purchase Price to the Escrow Agent, the Escrow Agent shall promptly wire transfer the escrowed funds to an account designated by the Company pursuant to its written instructions. (e) The Company shall authorize and reserve, free of preemptive rights and other similar contractual rights of stockholders, a number of authorized but unissued shares of Common Stock to effect the conversion, if any, of the Notes and the exercise of the Warrants. The shares of Common Stock issuable by the Company upon conversion of the Notes and all accrued but unpaid interest thereon are referred to herein as the "Conversion Shares". The Notes, Conversion Shares, Warrants and Warrant Shares are sometimes collectively referred to herein as the "Securities".