Purchase and Sale of Notes
NEITHER THE NOTES NOR THE UNDERLYING COMMON SHARES FOR THE NOTES OR WARRANTS HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"). NEITHER THE NOTES NOR THE WARRANTS MAY BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT. INVESTMENT IN THE SECURITIES OFFERED HEREBY INVOLVES A HIGH DEGREE OF RISK AND IMMEDIATE SUBSTANTIAL DILUTION. PLEASE REVIEW THE RISK FACTOR DOCUMENT ATTACHED TO THE TERM SHEET.
Purchase and Sale of Notes. Subject to the terms and conditions set forth herein, the Company is offering to each Purchaser the number of Units set forth opposite such Purchaser's name as set forth on Exhibit A hereto, consisting of up to $1,500,000 secured convertible Notes, in substantially the form attached hereto as Exhibit C and the Warrant, substantially in the form attached hereto as Exhibit D. The Notes are convertible into shares of the Company's common stock, par value $0.01 per share (the "Common Stock" and the shares of Common Stock underlying the Notes are referred to as the "Note Shares") at a conversion price of $2.00 per share, subject to adjustment, and the three year warrant (the "Warrant") to purchase shares of Common Stock is exercisable at an exercise price of $2.50 per share (the shares of Common Stock underlying the Warrants are referred to as the "Warrant Shares," together with the Note Shares, the "Shares"). The terms and provisions of the Notes and Warrants are set forth therein. The Notes, Units, Warrants and Shares are sometimes collectively referred to herein as the "Securities." The purchase price of each Note shall be equal to the principal amount of such Note (the "Purchase Price") and a minimum Purchase Price of $25,000 is necessary to participate in this Offering, subject to smaller investments with the consent of the Company.