Common use of SALE AND ISSUANCE OF THE NOTE Clause in Contracts

SALE AND ISSUANCE OF THE NOTE. Upon the terms and subject to the conditions contained in this Agreement, the Company has authorized the sale and issuance (the "Issuance") of convertible promissory notes. At the Closing (as defined in Section 2.1), the Company shall sell to the Purchaser, and the Purchaser shall purchase from the Company, upon the terms set forth in this Agreement, one such convertible promissory note, substantially in the form of EXHIBIT B attached hereto (the "Note"), in the aggregate principal amount set forth on the signature page hereto. The Company intends to enter into this same form of purchase agreement with certain other investors and expects to complete sales of its convertible promissory notes to them. The Purchaser's obligations hereunder are expressly not subject to or conditioned on the purchase of notes by any or all of such other investors. The Purchaser shall have the right and option, exercisable in its sole discretion to convert the outstanding principal amount due hereunder into that number of shares of Common Stock equal to the quotient obtained by dividing (A) the outstanding principal amount of this Note by (B) $0.50. Additionally, upon conversion, the Purchaser shall receive a warrant substantially in the form of EXHIBIT C attached hereto (the "Warrant") to purchase two shares of the Company's Common Stock for every one share of Common Stock converted pursuant to Section 2 of the Note, such Warrant providing for exercise prices of $0.75 per share for half of the shares underlying the Warrant and $1.00 per share for the remaining shares underlying the Warrant. The Purchaser shall only have the right to convert, if the Company's shareholders approve, at the Company's Annual Meeting to be held on March 23, 2004, or such other date determined by the Company's Board of Directors, the issuance by the Company of Common Stock equal to 20% or more of the Common Stock outstanding before the issuance for less than the greater of book or market value of the stock.

SALE AND ISSUANCE OF THE NOTE. Upon the terms and subject to the conditions contained in this Agreement, the Company has authorized the sale and issuance (the "IssuanceISSUANCE") of convertible promissory notes. At the Closing (as defined in Section SECTION 2.1), the Company shall sell to the Purchaser, and the Purchaser shall purchase from the Company, upon the terms set forth in this Agreement, one such convertible promissory note, substantially in the form of EXHIBIT B attached hereto (the "NoteNOTE"), in the aggregate principal amount set forth on the signature page hereto. The Company intends to enter into this same form of purchase agreement with certain other investors and expects to complete sales of its convertible promissory notes to them. The Purchaser's obligations hereunder are expressly not subject to or conditioned on the purchase of notes by any or all of such other investors. The Purchaser shall have the right and option, exercisable in its sole discretion to convert the outstanding principal amount due hereunder into that number of shares of Common Stock equal to the quotient obtained by dividing (A) the outstanding principal amount of this Note by (B) $0.50. Additionally, upon conversion, the Purchaser shall receive a warrant substantially in the form of EXHIBIT C attached hereto (the "WarrantWARRANT") to purchase two shares of the Company's Common Stock for every one share of Common Stock converted pursuant to Section SECTION 2 of the Note, such Warrant providing for exercise prices of $0.75 per share for half of the shares underlying the Warrant and $1.00 per share for the remaining shares underlying the Warrant. The Purchaser shall only have the right to convert, if the Company's shareholders approve, at the Company's Annual Meeting to be held on March 23, 2004, or such other date determined by the Company's Board of Directors, the issuance by the Company of Common Stock equal to 20% or more of the Common Stock outstanding before the issuance for less than the greater of book or market value of the stock.