UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. __)
HYDRON TECHNOLOGIES, INC.
-------------------------
(Name of Issuer)
Common Stock, par value $.01 per share
--------------------------------------
(Title of Class of Securities)
449020-10-6000
--------------
(CUSIP Number)
Ronald J. Saul and William A. Fagot
Antonette G. Saul Hydron Technologies, Inc.
3999 Benden Circle 2201 West Sample Road, Bldg 9, Suite 7B
Murrysville, PA 15669 Pompano Beach, FL 33073
(724) 327-4036 (954) 861-6400
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(Name, Address and Telephone Number of Person Authorized to Receive
Notices and Communications)
August 6, 2003
-------------------------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(e), 13d-1(b) or 13d-1(g), check the following box
[ ].
SCHEDULE 13D
CUSIP NO. 449020-10-6000
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1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS
Ronald J. Saul and
Antonette G. Saul
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
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(b) [ ]
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Joint filing pursuant to Rule 13d-1(k)(1) Ronald J. Antonette G.
Saul Saul
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3 SEC USE ONLY
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4 SOURCE OF FUNDS* PF PF
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e) [ ] [ ]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
UNITED STATES
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7 SOLE VOTING POWER 60,000 8,500
NUMBER OF (see items 3 and 5)
SHARES -----------------------------------------------------------
BENEFICIALLY
OWNED BY 8 SHARED VOTING POWER 555,000 555,000
EACH -----------------------------------------------------------
REPORTING
PERSON 9 SOLE DISPOSITIVE POWER 60,000 8,500
WITH (see items 3 and 5)
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10 SHARED DISPOSITIVE POWER 555,000 555,000
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
(see items 3 and 5) 615,000 563,500
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* [ ] [ ]
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
(see items 3 and 5) 8.4% 7.7%
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14 TYPE OF REPORTING PERSON*
IN IN
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*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE AND THE SIGNATURE ATTESTATION.
2
Item 1. Security and Issuer
The Security and Issuer to which this Schedule 13D (as defined below) relates is
the common stock, par value $.01 per share (the "Common Stock") of Hydron
Technologies, Inc., a New York corporation (the "Issuer"). The address of the
principal executive office of the Issuer is 2201 West Sample Road, Building 9,
Suite 7B, Pompano Beach, Florida 33073. This Schedule 13D relates to the event
date of August 6, 2003 and the event date of December 11, 2002 which was
previously reported on Schedule 13G.
Item 3. Source and Amount of Funds and Other Consideration
Pursuant to a Subscription Agreement dated December 10, 2002 (the "Subscription
Agreement") with the Issuer, the Reporting Persons subscribed for and purchased
125,000 units ("Units"), each Unit comprised of one share of Common Stock and
one option to purchase one share of Common Stock, exercisable for three years
from the date of issue, at a purchase price of $.20 per share ("Option"). The
purchase price for each Unit was $.20 totaling an aggregate price of $25,000.00.
The Reporting Persons purchased the Units for cash using personal funds. See
Item 6 for additional information regarding the Subscription Agreement.
On August 6, 2003 the Reporting Persons provided $100,000 of personal funds as
an interim loan (Bridge Loan) for Company operations until the Company can
arrange for financing the development of its tissue oxygenation technology. The
non-interest bearing Bridge Loan is an unsecured debt obligation convertible
into shares of common stock of the Company at any time at the election of the
holder on or after the maturity date of the Bridge Loan together with a right to
purchase 125,000 shares of Common Stock (Warrants). The loans mature when
financing is obtained or in six months which ever occurs first.
Item 4. Purpose of the Transaction
The Reporting Persons acquired the Units and the included shares of Common Stock
and Options pursuant to the Subscription Agreement for purposes of investment.
The Reporting Persons acquired the Warrants for purposes of investment. The
Bridge Loan was made for the purpose of investment and any shares of the Common
Stock acquired upon conversion of the Bridge Loan will be acquired for
investment.
The Reporting Persons may acquire additional shares of Common Stock, from time
to time, in open market transactions or in privately negotiated transactions, or
through the exercise of options, warrants, or other derivative securities. The
Reporting Persons may also sell shares of Common Stock based on market
conditions and other conditions, which the Reporting Persons may deem relevant.
Item 5. Interest in Securities of the Issuer
Following completion of the Subscription Agreement, Ronald J. Saul owned 365,000
shares and Antonette G. Saul owned 313,500 shares of the 7,050,136 outstanding
shares of common stock of the Issuer, (approximately 5.2% and 4.4%, respectively
of the total outstanding shares) and had the right to acquire an additional
125,000 shares jointly subject to the option included in the Units, bringing
Ronald J. Saul's and Antonette G. Saul's beneficial ownership of shares to
490,000 shares and 438,500 shares, respectively (approximately 6.8% and 6.1%,
respectively).
Following completion of the Bridge Loan, Ronald J. Saul owned 365,000 shares and
Antonette G. Saul owned 313,500 shares of the 7,050,136 outstanding shares of
common stock of the Issuer, (approximately 5.2% and 4.4% of the total
outstanding shares) and had the right to jointly acquire an additional 250,000
shares, including 125,000 shares subject to the right to acquire shares under
the Warrants, but not including any shares that might be acquired upon
conversion of the Bridge Loan, bringing the Ronald J. Saul's and Antonette G.
Saul's beneficial ownership of shares to 615,000 shares and 563,500 shares,
respectively (approximately 8.4% and 7.7%, respectively ).
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect
to Securities of the Issuer
The Reporting Persons, one of whom, Ronald J. Saul is a Director of the Issuer,
entered into the Subscription Agreement with the Issuer on December 10, 2002 and
pursuant to the Subscription Agreement acquired 125,000 Units for an aggregate
purchase price of $25,000 as part of a private placement of the Units to a
limited number of accredited investors in a transaction exemption exempt from
registration under the Securities Act of 1933, as amended. A copy of the
3
Subscription Agreement is filed as Exhibit A hereto and in incorporated herein
and made a part hereof. The foregoing description of the Subscription Agreement
is qualified in its entirety by reference to the copy of the Subscription
Agreement attached.
The Reporting Persons provided $100,000 of interim loans (Bridge Loan) for
Company operations until the Company can arrange for financing the development
of its tissue oxygenation technology. The non-interest bearing Bridge Loan is an
unsecured debt obligation convertible into shares of common stock of the Company
together with a right to purchase 125,000 shares of Common Stock (Warrants). The
loans mature when financing is obtained or in six months which ever occurs
first. The exercise price of the Warrants shall be the lower of the offering
price of the financing or $0.67.
If the loans are not repaid when mature, the loans will automatically convert to
"on demand" obligations at a Prime interest rate. The holder may covert the
loans into shares of Common Stock at a conversion price of $0.64 at any time
after the maturity date. A copy of the Bridge Loan Term Sheet is filed as
Exhibit A hereto and incorporated herein and made a part hereof. The foregoing
description of the Bridge Loan is qualified in its entirety by reference to the
Bridge Loan Term Sheet attached hereto and incorporated herein by reference.
Item 7. Materials to be Filed as Exhibits
Description of Exhibit Exhibit No.
---------------------- -----------
Subscription Agreement dated November 27, 2002
Between Hydron Technologies, Inc. and Ronald J. Saul and
Antonette G. Saul A
Bridge Loan Term Sheet incorporated in the minutes
of the Board of Directors Meeting, dated August 4, 2003 B
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SIGNATURES
After reasonable inquiry and to the best of the undersigned's knowledge and
belief, the undersigned certifies that the information set forth in this
statement is true, complete and correct.
Dated: August 18, 2003
/s/ RONALD J. SAUL
----------------------
Ronald J. Saul
/s/ ANTONETTE G. SAUL
----------------------
Antonette G. Saul
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EXHIBIT INDEX
Description of Exhibit Exhibit No. Page No.
---------------------- ----------- --------
Subscription Agreement dated November 27, 2002
Between Hydron Technologies, Inc. and Richard Banakus. A 7
Bridge Loan Term Sheet incorporated in the minutes
of the Board of Directors Meeting, dated August 4, 2003 B 13
6
November 16, 2002
Hydron Technologies, Inc.
2201 West Sample Road
Building 9, Suite 7B
Pompano Beach FL 33073
Attn: Mr. William A. Fagot
Chief Financial Officer
Re: Subscription Agreement and Investment Letter
--------------------------------------------
Gentlemen:
The undersigned (the "Subscriber") hereby subscribes to purchase the
number of Units (each a "Unit" and collectively, the "Units") set forth on the
signature page of this Subscription Agreement comprised of (i) one (1) Share
(each a "Share" and collectively the "Shares") of Common Stock, $.01 par value
per share, of Hydron Technologies, Inc. (the "Company") and (ii) an Option to
purchase one (1) share of Common Stock (each an "Option" and collectively, the
"Options") at any time or from time to time exercisable in whole or in part for
a three (3) year period ending on the third anniversary of the date of this
letter agreement at an exercise price of $0.20 per share, at the purchase price
of $0.20 per Unit as follows:
1. The aggregate purchase price for the Units subscribed as set forth
on the signature page is hereby tendered herewith; by delivery of a
check payable to Hydron Technologies, Inc. or by confirmation of a wire
transfer to the Company of immediately available funds through the
United States Federal Reserve System.
2. PRIVATE PLACEMENT. THE OFFER AND SALE OF THE UNITS, COMPRISED OF
THE SHARES, THE OPTIONS AND THE SHARES OF COMMON STOCK ISSUABLE UPON
EXERCISE OF THE OPTIONS (THE "SECURITIES"), HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT, OR ANY STATE SECURITIES OR "BLUE SKY" LAWS
(COLLECTIVELY "SECURITIES LAWS"), AND THE SECURITIES ARE BEING OFFERED
AND SOLD IN RELIANCE ON EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS
OF THE SECURITIES LAWS. THE SECURITIES HAVE NOT BEEN APPROVED OR
DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION, ANY STATE
SECURITIES COMMISSION OR ANY OTHER REGULATORY AUTHORITY, NOR HAVE ANY
OF THE FOREGOING AUTHORITIES PASSED UPON OR ENDORSED THE MERITS OF THE
OFFER AND SALE OF THE SECURITIES OR THE ACCURACY OR ADEQUACY OF ANY
INFORMATION PROVIDED TO THE SUBSCRIBER. ANY REPRESENTATION TO THE
CONTRARY IS UNLAWFUL.
THE SUBSCRIBER RECOGNIZES AND ACKNOWLEDGES THAT THE RELIANCE BY THE
COMPANY AND ITS OFFICERS AND DIRECTORS UPON SUCH EXEMPTIONS FROM
REGISTRATION ARE, IN PART, BASED UPON THE ACCURACY OF THE
REPRESENTATIONS AND AGREEMENTS OF THE SUBSCRIBER SET FORTH IN THIS
SUBSCRIPTION AGREEMENT.
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3. Representations and Warranties of the Undersigned. The undersigned
acknowledges, represents and warrants to, and agrees with, the Company
as follows:
a. The undersigned has adequate means of providing for
current needs and possible contingencies, and
anticipates no need now or in the foreseeable future to
sell the Securities;
b. The undersigned has such knowledge and experience in
financial and business matters that makes the
undersigned capable of evaluating the merits and risks
of investment in the Company and of making an informed
investment decision;
c. The undersigned is aware that no federal or state
agency has passed upon the Units or any of the
Securities or made any finding or determination
concerning the fairness of this investment;
d. The undersigned has had an opportunity to ask questions
of and receive answers from representatives of the
Company, concerning the terms and conditions of this
investment, and all such questions have been answered
to the full satisfaction of the undersigned. Such
representatives have not, however, rendered any
investment advice to the undersigned with respect to
the suitability of an investment in the Units;
e. The Units for which the undersigned hereby subscribes,
the Shares, the Options, and the Shares of Common Stock
for which such Options may be exercised will be
acquired for the undersigned's own account, for
investment only and not with a view toward resale or
distribution in a manner which would require
registration under the Securities Act of 1933, as
amended;
f. The undersigned has been made aware by the Company that
investment in the Units involves a high degree of risk
and the possible loss of the total amount invested;
g. The undersigned acknowledges that neither the Company
nor any representative of the Company has made any
representations or warranties in respect of the
Company's business or profitability;
h. The undersigned, if a corporation, partnership, trust
or other form of business entity is authorized and
otherwise duly qualified to purchase and hold the
subscribed for Units. Such entity has its principal
place of business as set forth on the signature page
hereof and if such entity has been formed for the
specific purpose of acquiring the Units subscribed to
hereunder, it hereby agrees to supply any additional
written information that may be required by the
Company;
i. All of the information that the undersigned has
furnished in this Subscription Agreement and in the
reports of the Company filed with the Securities and
exchange Commission pursuant to Section 13(a) of the
Securities Exchange Act of 1934, as amended, including
without limitation, the Company's annual report on Form
8
10-K for the year ended December 31, 2001 and its
quarterly report on Form 10Q for the period ended
September 30, 2002 (the "SEC Reports"), including
without limitation, those with respect to the
undersigned's financial position and business status is
correct and complete as of the date of this
Subscription Agreement. In the event that there is a
material change in such information prior to the time
Units are sold to the Subscriber pursuant to this
Subscription Agreement, the undersigned will
immediately furnish the revised or corrected
information to the Company;
j. The Subscriber understands that the Company has no
obligation to register the Securities, except as
expressly hereinafter set forth, and the Company may
not be able to effect such registration;
k. The Subscriber acknowledges that he has had the
opportunity to ask questions of, and receive answers
from, the Company concerning the business and financial
condition of the Company; and the opportunity to review
the Company's Annual Report on Form 10-K for Fiscal
Year ended December 31, 2001 together with all other
reports filed by the Company pursuant to Section 13 of
the Securities Exchange Act of 1934 subsequent to the
filing of such Form 10-K through the date of the
execution and delivery of this agreement;
l. No warranties or representations have been made to the
Subscriber by any officer, director, employee or agent
of the Company, except as expressly set forth herein;
m. The Subscriber has evaluated the risks of purchasing
the Units; determined that the purchase of the Shares
is a suitable investment; has adequate financial
resources for an investment of such character; the
Subscriber alone or with its representative, has such
knowledge and experience in financial and business
matters that the Subscriber is capable of evaluating
the merits and risks of the purchase of the Units; and
n. The warranties and representations made herein by the
Subscriber are accurate, true and correct, and may be
relied upon by the Company in connection with the
issuance of the Units hereunder to the Subscriber.
4. Registration Rights. The Company hereby grants to the Subscriber
the following registration rights:
a. The Company hereby grants to the Subscriber the right,
exercisable at any time and from time to time during
the term of this Agreement, if it proposes to file a
registration statement with respect to any class of
security under the Securities Act of 1933, as amended
(the "Act"), to include in such registration
statements, any or all of the Shares or the Shares of
Common Stock issuable upon exercise of the options (the
"Registrable Securities");
b. The Company shall bear any and all expenses of the
registrations referred to above, including, but not
limited to, legal, accounting and printing fees;
providing, however, that the Company shall not be
obligated to pay any fees and disbursements of counsel
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for holder of Registrable Securities, any underwriters'
discount or commission in respect of such Registrable
Securities, payment of which shall, in each case, be
the sole responsibility of the Subscriber; and
c. The registration rights granted hereby are not
applicable to a registration statement filed by the
Company under the Act on Form S-4 or S-8 or any
successor forms.
5. Limitation on Transfer of Shares. THERE ARE SUBSTANTIAL
RESTRICTIONS ON THE TRANSFERABILITY OF THE SHARES OF COMMON STOCK AND
THE SUBSCRIBER MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THE
INVESTMENT FOR AN INDEFINITE PERIOD OF TIME. The undersigned
acknowledges that the shares of Units to be acquired pursuant to this
Subscription Agreement and the shares of Common Stock to be issued upon
conversion of such shares may not be sold unless such sale is exempt
from registration under the Securities Act. The undersigned further
agrees to be responsible for compliance with all conditions on transfer
imposed by any applicable State Blue Sky or securities law. Each stock
certificate representing shares of Units or shares of Common Stock to
be received upon conversion shall bear a legend in the form of Annex A
hereto stating that such shares are subject to restrictions on transfer
pursuant to applicable federal and state securities law.
6. Indemnification. The undersigned understands the meaning and legal
consequences of the representations and warranties in this Subscription
Agreement, and hereby agrees to indemnify and hold harmless the
Company, its officers, directors, attorneys and agents, from and
against any and all loss, damage or liability due to or arising out of
a breach of any such representations or warranties;
7. Miscellaneous.
a. This Agreement constitutes the entire agreement and
understanding of the parties hereto and no amendment,
modification of waiver of any provision herein shall be
effective unless in writing, executed by the party
charged therewith.
b. This Agreement shall be construed, interpreted and
enforced in accordance with and shall be governed by
the laws of the State of New York without regard to the
principles of conflicts of laws.
c. No party has incurred, nor will incur any liability for
brokerage fees or commissions in connection with the
transactions contemplated hereby, and all parties
warrant that no third party was instrumental in
consummating this transaction so as to earn any such
fee.
d. Any notice or other communication under the provisions
of this Agreement shall be in writing, and shall be
given by postage prepaid, registered or certified mail,
return receipt requested, by hand delivery with an
acknowledgement copy requested, or by the Express Mail
service offered by the United States Post Office,
directed to the addresses set forth herein, or to any
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new address of which any party hereto shall have
informed the others by the giving of notice in the
manner provided herein. Such notice or communications
shall be effective, if sent by mail, three (3) days
after it is mailed within the continental United
States; if sent by Express Mail Service, one (1) day
after it is mailed; or by hand delivery, upon receipt.
IN WITNESS WHEREOF, the undersigned has executed this Subscription Agreement for
the following number of Units:
Number of Units subscribed for: 125,000
Total purchase price (number of shares x $0.20): $25,000.00
/s/ RONALD J. SAUL /s/ ANTONETTE G. SAUL
------------------------- -------------------------
(Signature of Subscriber) (Signature of Subscriber)
Ronald J. Saul Antonette G. Saul
------------------------- -------------------------
(Please print name, if signing for corporation or other entity, please also
print title of signature and name of entity)
181-38-5208
-----------
(Social Security or Tax Identification Number, if applicable)
Execution Date: November 16, 2002
-----------------
Mailing address of Subscriber (please print):
3999 Benden Circle
------------------
Murrysville PA 15668
----------------------------
(City) (State) (Zip Code)
724-327-4036
------------------
(Telephone Number)
Accepted: If less than the entire subscription is accepted:
Number of Units accepted: __________________
Total purchase price (number of Units x $0.20) $_________________
HYDRON TECHNOLOGIES, INC.
/s/ WILLIAM A. FAGOT
------------------------------
Name: William A. Fagot
Title: Chief Financial Officer
11
ANNEX A
RESTRICTIVE STOCK LEGEND
The number of units (each a "Unit" and collectively, the "Units") set
forth on the signature page of this Subscription Agreement comprised of (i) one
(1) Shares of the Common Stock, $0.01 par value per share ("Common Stock") of
Hydron Technologies, Inc., a Florida corporation (the "Corporation"), and (ii)
an option to purchase one (1) share of Common Stock (each and "Option" and
collectively, the "Options") at any time or from time to time exercisable in
whole or in part for a three (3) year period ending on the third anniversary of
the date of this letter agreement at an exercise price of $0.20 per share, are
subject to certain restrictions on transfer under federal and applicable state
securities law. Certificates evidencing Shares and shares of Common Stock to be
issued upon exercise of the Options shall both bear the following restrictive
legends with respect to such restrictions:
"These securities have not been registered under the
Securities Act of 1933, as amended (the "Act"), or applicable
state securities laws. They may not be sold, offered for sale,
pledged or hypothecated in the absence of a registration in
effect with respect to the securities under the Act and
registration or qualification under applicable state
securities laws or, if reasonably requested by the
Corporation, an opinion of counsel satisfactory to the
Corporation that such registration or qualification is not
required."
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HYDRON TECHNOLOGIES, INC.
BRIDGE LOAN TERM SHEET
Description of Securities: The bridge loan (the "Loan") is an
unsecured debt obligation of Hydron
Technologies, Inc. (the "Company")
convertible ("Conversion") into shares
of common stock of the Company (the
"Common Stock") on the terms described
under "Conversion of Loan," together
with a right to purchase 125,0000 shares
of Common Stock (a "Warrant") for each
$100,000 principal amount of the Loan.
Terms of the Loan:
Interest: No interest will be payable prior to
-------- maturity of the Loan.
Maturity Date: The Loan will mature on the earlier of
------------- (x) the closing of an equity financing
having gross proceeds of not less than
$500,000 (the "Equity Financing") or (y)
six (6) months after funding; provided,
however, that the Loan will
automatically convert into a demand
obligation of the Company if not paid or
converted into shares of Common Stock on
the Maturity Date. The Company may
prepay the Loan at anytime prior to the
Maturity Date without penalty.
Conditional Extension: Holders of the Loan will agree not to
--------------------- require repayment of the Loan, provided
that the Chief Financial Officer of the
Company has certified in writing that
payment of the Loan would have a
material adverse affect on the business
or financial condition of the Company.
Holders of the Loan will be entitled to
require updated certifications from the
Chief Financial Officer of the Company
each month the Loan remains outstanding.
Payment in Kind Interest: During the period following the Maturity
------------------------ Date until payment or Conversion, the
Loan shall accrue interest at the Prime
Rate in effect at the maturity date
payable in shares of Common Stock valued
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at the Average Market Price (as defined
below). Shares issued in payment of
interest shall be issued each month on
the first business day of the month
commencing with the month following the
Maturity Date. The Company will only
issue whole shares and will round to the
nearest whole share (e.g., .50 or less,
down; .51 or more, up). For purposes of
this Term Sheet, the term "Average
Market Price" means the closing sale
price for a share of Common Stock
measured over the last ten trading days
of the preceding month.
Conversion of the Loan: The holders may convert the Loan into
---------------------- shares of Common Stock at any time on or
after the Maturity Date at a conversion
price equal to the average of the last
sale price for a share of Common Stock
calculated over the five (5) trading
days immediately following the funding
of the Loan.
Meeting of Board if No New The Company shall use its best efforts
-------------------------- to secure new debt or equity financing
Financing: to pay the Loan. However, if the Company
--------- is unable to repay the Loan within 90
days after the Maturity Date, the
Company shall call a meeting of the
Board of Directors for the purpose of
considering the reorganization or
dissolution of the Company.
If a majority of the members of the
Board of Directors, excluding members
holding the Loan or who are affiliated
with a holder of the Loan, vote in favor
of the reorganization or dissolution of
the Company, the Loan shall
automatically convert into shares of
Common Stock at a price equal to the
lower of (x) $.10 per share or (y) the
public bid price for a share of Common
Stock on the fifth day after the public
announcement of the decision of the
Board to reorganize or dissolve.
If the Board, acting pursuant to a
quorum, has not voted upon the
reorganization or dissolution of the
14
Company by or before 120 days after the
Maturity Date, the Loan, if still
outstanding, shall automatically convert
into shares of Common Stock at $.10 per
share.
Warrants:
Number of Shares Subject to Each Warrant shall be exercisable for
--------------------------- 125,000 shares of Common Stock with one
Warrants: Warrant to be issued for each $100,000
-------- in principal amount of the Loan.
Term: The Warrants shall be exercisable in
---- whole or in part at any time for five
years from the date of the funding of
the Loan.
Exercise Price: The exercise price of the Warrants shall
-------------- be equal to the lower of (x) the price
per share of a share of Common Stock in
an Equity Financing or (y) the average
of the high and low sale price for a
share of Common Stock on each of the ten
trading days preceding the funding of
the Loan.
15