Satisfaction of Lease Obligation and Stock Purchase. The Company and EVL agree that the amount of Variable Rent that has accrued but remains unpaid under the Lease Agreement with respect to the calendar year 2002 ("Deferred 2002 Variable Rent") is $2,172,000 and that the amount of Variable Rent that has accrued but remains unpaid under the Lease Agreement during the portion of the calendar year 2003 ending on October 31, 2003 is $1,868,750 ("Deferred 2003 Variable Rent"). The Company and EVL agree that the Company's obligation to pay Deferred 2002 Variable Rent and Deferred 2003 Variable Rent, (such amounts, excluding any interest due thereon, collectively "Total Deferred 2002 and 2003 Variable Rent") shall be deemed discharged and paid in full by the issuance by the Company to EVL of such number of shares of Common Stock (the "Shares") as have a value, based on the higher of (i) $31.75 per share or (ii) the closing sale price of Common Stock as quoted on NASDAQ on the effective date of this Agreement, equal to the Total Deferred 2002 and 2003 Variable Rent. Notwithstanding anything to the contrary in this Agreement, the shares of Common Stock that may be issued under this Section 1 together with the shares of Common Stock that may be issued under that certain CAP Line Conversion Agreement between the Company and LCO Investments Limited, a Guernsey corporation, of even date herewith shall under no circumstances (A) in the aggregate equal or exceed in number 10% of the number of shares of Common Stock outstanding immediately before such issuance or (B) represent 10% or more of the voting power of the shares of BriteSmile Common Stock outstanding immediately before such issuance. If the number of Shares otherwise issuable to EVL pursuant to this Section 1 is limited by the foregoing provision, then (A) the portion of Total Deferred 2002 and 2003 Variable Rent in excess of the value of the Shares actually issued (based on the higher of (i) $31.75 per share or (ii) the closing sale price of Common Stock on Nasdaq on the effective date of this Agreement) shall remain due and payable in cash by BriteSmile, and (B) the portion of the Total Deferred 2002 and 2003 Variable Rent deemed cancelled by the issuance of such Shares shall be first Deferred 2003 Variable Rent and next Deferred 2002 Variable Rent.
