Purchase and Sale of Notes and Common Stock. (a) Upon the following terms and conditions, the Company shall issue and sell to the Purchasers, and the Purchasers shall purchase from the Company, units (each, a “Unit”), in an aggregate amount equal to $3,000,000, consisting of (i) 8.00% unsecured subordinated convertible promissory notes in the aggregate principal amount of $2,100,000, convertible into shares of Common Stock (as defined below), in substantially the form attached hereto as Exhibit B (the “Notes”), and (ii) shares of the Company’s common stock, par value $0.001 per share (the “Common Stock”), in an aggregate amount of $900,000, at a price per share equal to 25% of the VWAP (as defined below) for the five Trading Days (as defined below) immediately preceding the Closing, subject to a minimum price per share of $0.10) (the “Per Share Purchase Price”). At the Closing (as defined below), the Company shall deliver to each Purchaser (i) a Note in the principal amount equal to 70% of the portion of the Purchase Price paid by such Purchaser for such Unit and (ii) shares of Common Stock, the purchase price of which equals 30% of the portion of the Purchase Price paid by such Purchaser for such Unit. (b) 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 made hereunder. For purposes of this Section 1.1, “VWAP” means, for any date, (i) the volume weighted average price of the Common Stock for such date on the principal Trading Market for the Common Stock as reported by Bloomberg Financial L.P. (based on a Trading Day from 9:30 a.m. Eastern Time to 4:02 p.m. Eastern Time); (ii) if the Common Stock is not then listed or quoted on a Trading Market and if prices for the Common Stock are then reported in the “Pink Sheets” published by the Pink Sheets, LLC (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common Stock so reported; or (iii) in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected in good faith by the Purchaser and reasonably acceptable to the Company.
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Purchase and Sale of Notes and Common Stock. (a) Upon the following terms and conditions, the Company shall issue and sell to the Purchasers, and the Purchasers shall purchase from the Company, units (each, a “Unit”), in an aggregate amount equal to $3,000,00010,000,000, consisting of (i) 8.00% unsecured subordinated convertible promissory notes in the aggregate principal amount of $2,100,0007,000,000, convertible into shares of Common Stock (as defined below), in substantially the form attached hereto as Exhibit B (the “Notes”), and (ii) shares of the Company’s common stock, par value $0.001 per share (the “Common Stock”), in an aggregate amount of $900,0003,000,000, at a price per share equal to 25% of the VWAP (as defined below) for the five Trading Days (as defined below) immediately preceding the each Closing, subject to a minimum price per share of $0.100.002 (which price is set before the reverse stock split announced by the Company in June of 2009 and shall be adjusted to reflect such stock split) (the “Per Share Purchase Price”). The Per Share Purchase Price for the First Closing shall be $0.002. At the each Closing (as defined below), the Company shall deliver to each Purchaser (i) a Note in the principal amount equal to 70% of the portion of the Purchase Price paid by such Purchaser for such Unit and (ii) shares of Common Stock, the purchase price of which equals 30% of the portion of the Purchase Price paid by such Purchaser for such Unit.
(b) 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 made hereunder. For purposes of this Section 1.1, “VWAP” means, for any date, (i) the volume weighted average price of the Common Stock for such date on the principal Trading Market for the Common Stock as reported by Bloomberg Financial L.P. (based on a Trading Day from 9:30 a.m. Eastern Time to 4:02 p.m. Eastern Time); (ii) if the Common Stock is not then listed or quoted on a Trading Market and if prices for the Common Stock are then reported in the “Pink Sheets” published by the Pink Sheets, LLC (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common Stock so reported; or (iii) in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected in good faith by the Purchaser and reasonably acceptable to the Company.
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