Blueprint




   











 Exhibit
10.2



 



REGISTRATION RIGHTS AGREEMENT

 


REGISTRATION RIGHTS AGREEMENT (this
"Agreement"), dated as of
January 22, 2018, by and among GT Biopharma, Inc., a Delaware
corporation, with headquarters located at 1825 K Street, Suite 510,
Washington, D.C. 20006 (the "Company"), and the investors listed on
the Schedule of Buyers attached hereto (each, a "Buyer" and collectively, the
"Buyers").

 


WHEREAS:

 


A.           In
connection with the Securities Purchase Agreement by and among the
parties hereto of even date herewith (the "Securities Purchase Agreement"), the
Company has agreed, upon the terms and subject to the conditions of
the Securities Purchase Agreement, to issue and sell to each Buyer
(i) senior convertible notes of the Company (the "Notes"), which will, among other things,
be convertible into the Company's common stock, par value $0.001
per share (the "Common
Stock") (the shares of Common Stock issuable pursuant to the
terms of the Notes, collectively, the "Conversion Shares") and (ii) warrants
(the "Warrants") which will
be exercisable to purchase shares of Common Stock (as exercised,
collectively, the "Warrant
Shares") in accordance with the terms of the
Warrants.

 


B.           In
accordance with the terms of the Securities Purchase Agreement, the
Company has agreed to provide certain registration rights under the
Securities Act of 1933, as amended, and the rules and regulations
thereunder, or any similar successor statute (collectively, the
"1933 Act"), and applicable
state securities laws.

 


NOW, THEREFORE, in consideration of the
premises and the mutual covenants contained herein and other good
and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the Company and each of the Buyers hereby
agree as follows:

 


1.           Definitions.

 


Capitalized terms
used herein and not otherwise defined herein shall have the
respective meanings set forth in the Securities Purchase Agreement.
As used in this Agreement, the following terms shall have the
following meanings:

 


(a)           "Additional
Effective Date" means the date the Additional Registration
Statement is declared effective by the SEC.

 


(b)           "Additional
Effectiveness Deadline" means the date which is the earlier
of (x) (i) in the event that the Additional Registration Statement
is not subject to a full review by the SEC, thirty (30) calendar
days after the earlier of the
Additional Filing Date and the Additional Filing Deadline or
(ii) in the event that the Additional Registration Statement is
subject to a full review by the SEC, sixty (60) calendar days after
the earlier of the Additional Filing
Date and the Additional Filing Deadline and (y) the fifth
(5th)
Business Day after the date the Company is notified (orally or in
writing, whichever is earlier) by the SEC that such Additional
Registration Statement will not be reviewed or will not be subject
to further review; provided, however, that if the Additional
Effectiveness Deadline falls on a Saturday, Sunday or other day
that the SEC is closed for business, the Additional Effectiveness
Deadline shall be extended to the next Business Day on which the
SEC is open for business.

 



 

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(c)           "Additional
Filing Date" means the date on which the Additional
Registration Statement is filed with the SEC.

 


(d)           "Additional
Filing Deadline" means if Cutback Shares are required to be
included in any Additional Registration Statement, the later of (i)
the date sixty (60) days after the date substantially all of the
Registrable Securities registered under the immediately preceding
Registration Statement are sold and (ii) the date six (6) months
from the Initial Effective Date or the most recent Additional
Effective Date, as applicable.

 


(e)           "Additional
Registrable Securities" means, (i) any Cutback Shares not
previously included on a Registration Statement and (ii) any
capital stock of the Company issued or issuable with respect to the
Notes, the Conversion Shares, the Warrants, the Warrant Shares, or
the Cutback Shares, as applicable, as a result of any stock split,
stock dividend, recapitalization, exchange or similar event or
otherwise, without regard to any limitations on the issuance of
shares of Common Stock pursuant to the terms of the Notes or
exercise of the Warrants.

 


(f)           "Additional
Registration Statement" means a registration statement or
registration statements of the Company filed under the 1933 Act
covering the resale of any Additional Registrable
Securities.

 


(g)           "Additional
Required Registration Amount" means any Cutback Shares not
previously included on a Registration Statement, all subject to
adjustment as provided in Section 2(f), without regard to any
limitations on the issuance of shares of Common Stock pursuant to
the terms of the Notes or exercise of the Warrants.

 


(h)           "Business
Day" means any day other than Saturday, Sunday or any other
day on which commercial banks in the City of New York are
authorized or required by law to remain closed.

 


(i)           "Closing
Date" shall have the meaning set forth in the Securities
Purchase Agreement.

 


(j)           "Cutback
Shares" means any of the Initial Required Registration
Amount or the Additional Required Registration Amount of
Registrable Securities not included in all Registration Statements
previously declared effective hereunder as a result of a limitation
on the maximum number of shares of Common Stock of the Company
permitted to be registered by the staff of the SEC pursuant to Rule
415. For the purpose of determining the Cutback Shares, in order to
determine any applicable Required Registration Amount, unless an
Investor gives written notice to the Company to the contrary with
respect to the allocation of its Cutback Shares, first the Warrant
Shares shall be excluded on a pro rata basis among the Investors
until all of the Warrant Shares have been excluded, and second the
Conversion Shares shall be excluded on a pro rata basis among the
Investors until all of the Conversion Shares have been
excluded.

 



 

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 (l)           "Effective
Date" means the Initial Effective Date and the Additional
Effective Date, as applicable.

 


(m)           "Effectiveness
Deadline" means the Initial Effectiveness Deadline and the
Additional Effectiveness Deadline, as applicable.

 


(n)           "Eligible
Market" means the Principal Market, the OTC QX, The New York
Stock Exchange, Inc., the NYSE American, the Nasdaq Global Select
Market, the NASDAQ Global Market or the NASDAQ Capital
Market.

 


(o)           "Filing
Deadline" means the Initial Filing Deadline and the
Additional Filing Deadline, as applicable.

 


(p)           "Initial
Effective Date" means the date that the Initial Registration
Statement has been declared effective by the SEC.

 


(q)           "Initial
Effectiveness Deadline" means the date which is the earlier
of (x) (i) in the event that the Initial Registration Statement is
not subject to a full review by the SEC, sixty-five (65) calendar
days after the Closing Date or (ii) in the event that the Initial
Registration Statement is subject to a full review by the SEC,
ninety-five (95) calendar days after the Closing Date and (y) the
fifth (5th) Business Day after
the date the Company is notified (orally or in writing, whichever
is earlier) by the SEC that such Initial Registration Statement
will not be reviewed or will not be subject to further review;
provided, however, that if the Initial Effectiveness Deadline falls
on a Saturday, Sunday or other day that the SEC is closed for
business, the Initial Effectiveness Deadline shall be extended to
the next Business Day on which the SEC is open for
business.

 


(r)           "Initial
Filing Date" means the date on which the Initial
Registration Statement is filed with the SEC.

 


(s)           "Initial
Filing Deadline" means the date which is forty (40) calendar
days after the Closing Date.

 


(t)           "Initial
Registrable Securities" means (i) the Conversion Shares
issued or issuable pursuant to the terms of the Notes, (ii) the
Warrant Shares issued or issuable upon exercise of the Warrants and
(iii) any capital stock of the Company issued or issuable with
respect to the Notes, the Conversion Shares, the Warrant Shares or
the Warrants as a result of any stock split, stock dividend,
recapitalization, exchange or similar event or otherwise, in each
case without regard to any limitations on the issuance of shares of
Common Stock pursuant to the terms of the Notes or exercise of the
Warrants.

 


(u)           "Initial
Registration Statement" means a registration statement or
registration statements of the Company filed under the 1933 Act
covering the resale of the Initial Registrable
Securities.

 


(v)           "Initial
Required Registration Amount" means the sum of (i) 200% of the maximum
number of Conversion Shares issued and issuable pursuant to the
Notes and (ii) the maximum number of Warrant Shares issued and
issuable pursuant to the Warrants, each as of the Trading Day
immediately preceding the applicable date of determination and all
subject to adjustment as provided in Section 2(f), without regard
to any limitations on the issuance of shares of Common Stock
pursuant to the terms of the Notes or exercise of the
Warrants.

 



 

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(w)           "Investor"
means a Buyer or any transferee or assignee thereof to whom a Buyer
assigns its rights under this Agreement and who agrees to become
bound by the provisions of this Agreement in accordance with
Section 9 and any transferee or assignee thereof to whom a
transferee or assignee assigns its rights under this Agreement and
who agrees to become bound by the provisions of this Agreement in
accordance with Section 9.

 


 (x)           "Person"
means an individual, a limited liability company, a partnership, a
joint venture, a corporation, a trust, an unincorporated
organization and a government or any department or agency
thereof.

 


(y)           "Principal
Market" means the OTC QB.

 


(z)           "register,"
"registered," and
"registration" refer to a
registration effected by preparing and filing one or more
Registration Statements (as defined below) in compliance with the
1933 Act and pursuant to Rule 415, and the declaration or ordering
of effectiveness of such Registration Statement(s) by the
SEC.

 


(aa)           "Registrable
Securities" means the Initial Registrable Securities and the
Additional Registrable Securities.

 


(bb)           "Registration
Statement" means the Initial Registration Statement and the
Additional Registration Statement, as applicable.

 


(cc)           "Required
Holders" means the holders of at least a majority of the
Registrable Securities and shall include (i) affiliates of Empery
Asset Management, LP ("Empery") so long as Empery or any of its
affiliates holds any Registrable Securities and (ii) affiliates of
Ayrton Capital LLC ("Ayrton") so long as Ayrton or any of its
affiliates holds any Registrable Securities.

 


(dd)           "Required
Registration Amount" means either the Initial Required
Registration Amount or the Additional Required Registration Amount,
as applicable.

 


(ee)           "Rule
415" means Rule 415 promulgated under the 1933 Act or any
successor rule providing for offering securities on a continuous or
delayed basis.

 


(ff)           "SEC"
means the United States Securities and Exchange
Commission.


 


(gg)           "Trading
Day" means any day on which the
Common Stock is traded on the Principal Market, or, if the
Principal Market is not the principal trading market for the Common
Stock, then on the principal securities exchange or securities
market on which the Common Stock is then
traded.

 



 

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2.           Registration.

 


(a)           Initial
Mandatory Registration. The Company shall prepare, and, as
soon as practicable but in no event later than the Initial Filing
Deadline, file with the SEC the Initial Registration Statement on
Form S-3 covering the resale of all of the Initial Registrable
Securities. In the event that Form S-3 is unavailable for such a
registration, the Company shall use such other form as is available
for such a registration on another appropriate form reasonably
acceptable to the Required Holders, subject to the provisions of
Section 2(e). The Initial Registration Statement prepared pursuant
hereto shall register for resale at least the number of shares of
Common Stock equal to the Initial Required Registration Amount
determined as of the date the Initial Registration Statement is
initially filed with the SEC, subject to adjustment as provided in
Section 2(f). The Initial Registration Statement shall contain
(except if otherwise directed by the Required Holders) the
"Plan of
Distribution" and "Selling Stockholders" sections
in substantially the form attached hereto as Exhibit B. The Company shall
use its best efforts to have the Initial Registration Statement
declared effective by the SEC as soon as practicable, but in no
event later than the Initial Effectiveness Deadline. By 9:30 a.m.
New York time on the Business Day following the Initial Effective
Date, the Company shall file with the SEC in accordance with Rule
424 under the 1933 Act the final prospectus to be used in
connection with sales pursuant to such Initial Registration
Statement.

 


(b)           Additional
Mandatory Registrations. The Company shall prepare, and, as
soon as practicable but in no event later than the Additional
Filing Deadline, file with the SEC an Additional Registration
Statement on Form S-3 covering the resale of all of the Additional
Registrable Securities not previously registered on an Additional
Registration Statement hereunder. To the extent the staff of the
SEC does not permit the Additional Required Registration Amount to
be registered on an Additional Registration Statement, the Company
shall file Additional Registration Statements successively trying
to register on each such Additional Registration Statement the
maximum number of remaining Additional Registrable Securities until
the Additional Required Registration Amount has been registered
with the SEC. In the event that Form S-3 is unavailable for such a
registration, the Company shall use such other form as is available
for such a registration on another appropriate form reasonably
acceptable to the Required Holders, subject to the provisions of
Section 2(e). Each Additional Registration Statement prepared
pursuant hereto shall register for resale at least that number of
shares of Common Stock equal to the Additional Required
Registration Amount determined as of the date such Additional
Registration Statement is initially filed with the SEC, subject to
adjustment as provided in Section 2(f). Each Additional
Registration Statement shall contain (except if otherwise directed
by the Required Holders) the "Plan of Distribution" and
"Selling
Stockholders" sections in substantially the form attached
hereto as Exhibit
B. The Company shall use its best efforts to have each
Additional Registration Statement declared effective by the SEC as
soon as practicable, but in no event later than the Additional
Effectiveness Deadline. By 9:30 a.m. New York time on the Business
Day following the Additional Effective Date, the Company shall file
with the SEC in accordance with Rule 424 under the 1933 Act the
final prospectus to be used in connection with sales pursuant to
such Additional Registration Statement.

 


(c)           Allocation
of Registrable Securities. The initial number of Registrable
Securities included in any Registration Statement and any increase
or decrease in the number of Registrable Securities included
therein shall be allocated pro rata among the Investors based on
the number of Registrable Securities held by each Investor at the
time the Registration Statement covering such initial number of
Registrable Securities or increase or decrease thereof is declared
effective by the SEC. In the event that an Investor sells or
otherwise transfers any of such Investor's Registrable Securities,
each transferee shall be allocated a pro rata portion of the then
remaining number of Registrable Securities included in such
Registration Statement for such transferor. Any shares of Common
Stock included in a Registration Statement and which remain
allocated to any Person which ceases to hold any Registrable
Securities covered by such Registration Statement shall be
allocated to the remaining Investors, pro rata based on the number
of Registrable Securities then held by such Investors which are
covered by such Registration Statement. In no event shall the
Company include any securities other than Registrable Securities on
any Registration Statement without the prior written consent of the
Required Holders.

 



 

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(d)           Legal
Counsel. Subject to Section 5 hereof, the Required Holders
shall have the right to select one legal counsel to review and
oversee any registration pursuant to this Section 2 ("Legal Counsel"), which shall be Schulte
Roth & Zabel LLP or such other counsel as thereafter designated
by the Required Holders. The Company and Legal Counsel shall
reasonably cooperate with each other in performing the Company's
obligations under this Agreement.

 


(e)           Ineligibility
for Form S-3. In the event that Form S-3 is not available
for the registration of the resale of Registrable Securities
hereunder, the Company shall (i) register the resale of the
Registrable Securities on Form S-1 or another appropriate form
reasonably acceptable to the Required Holders and (ii) undertake to
register the Registrable Securities on Form S-3 as soon as such
form is available, provided that the Company shall maintain the
effectiveness of the Registration Statement then in effect until
such time as a Registration Statement on Form S-3 covering the
Registrable Securities has been declared effective by the
SEC.

 


(f)           Sufficient
Number of Shares Registered. In the event the number of
shares available under a Registration Statement filed pursuant to
Section 2(a) or Section 2(b) is insufficient to cover the Required
Registration Amount of Registrable Securities required to be
covered by such Registration Statement or an Investor's allocated
portion of the Registrable Securities pursuant to Section 2(c), the
Company shall amend the applicable Registration Statement, or file
a new Registration Statement (on the short form available therefor,
if applicable), or both, so as to cover at least the Required
Registration Amount as of the Trading Day immediately preceding the
date of the filing of such amendment or new Registration Statement,
in each case, as soon as practicable, but in any event not later
than fifteen (15) days after the necessity therefor arises. The
Company shall use its best efforts to cause such amendment and/or
new Registration Statement to become effective as soon as
practicable following the filing thereof. For purposes of the
foregoing provision, the number of shares available under a
Registration Statement shall be deemed "insufficient to cover all
of the Registrable Securities" if at any time the number of shares
of Common Stock available for resale under the Registration
Statement is less than the Required Registration Amount. The
calculation set forth in the foregoing sentence shall be made
without regard to any limitations on the issuance of shares of
Common Stock pursuant to the terms of the Notes or exercise of the
Warrants and such calculation shall assume (i) that the Notes are
then convertible in full into shares of Common Stock at the then
prevailing Conversion Rate (as defined in the Notes), (ii) the
initial outstanding principal amount of the Notes remains
outstanding through the scheduled Maturity Date (as defined in the
Notes) and no redemptions of the Notes occur prior to the scheduled
Maturity Date and (iii) the Warrants are then exercisable in full
into shares of Common Stock at the then prevailing Exercise Price
(as defined in the Warrants).

 



 

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(g)           Effect
of Failure to File and Obtain and Maintain Effectiveness of
Registration Statement. If (i) the Initial Registration
Statement when declared effective fails to register the Initial
Required Registration Amount of Initial Registrable Securities (a
"Registration Failure"),
(ii) a Registration Statement covering all of the Registrable
Securities required to be covered thereby and required to be filed
by the Company pursuant to this Agreement is (A) not filed with the
SEC on or before the applicable Filing Deadline (a "Filing Failure") or (B) not declared
effective by the SEC on or before the applicable Effectiveness
Deadline, (an "Effectiveness
Failure") or
(iii) on any day after the applicable Effective Date, sales of all
of the Registrable Securities required to be included on such
Registration Statement cannot be made (other than during an
Allowable Grace Period (as defined in Section 3(r)) pursuant to
such Registration Statement or otherwise (including, without
limitation, because of the suspension of trading or any other
limitation imposed by an Eligible Market, a failure to keep such
Registration Statement effective, a failure to disclose such
information as is necessary for sales to be made pursuant to such
Registration Statement, a failure to register a sufficient number
of shares of Common Stock or a failure to maintain the listing of
the Common Stock) (a "Maintenance
Failure") then, as partial relief for the damages to any
holder by reason of any such delay in or reduction of its ability
to sell the underlying shares of Common Stock (which remedy shall
not be exclusive of any other remedies available at law or in
equity, including, without limitation, specific performance or the
additional obligation of the Company to register any Cutback
Shares), the Company shall pay to each holder of Registrable
Securities relating to such Registration Statement an amount in
cash equal to two percent (2.0%) of the aggregate Purchase Price
(as such term is defined in the Securities Purchase Agreement) of
such Investor's Registrable Securities, whether or not included in
such Registration Statement, on each of the following dates: (i)
the day of a Registration Failure, (ii) the day of a Filing
Failure; (iii) the day of an Effectiveness Failure; (iv) the
initial day of a Maintenance Failure; (v) on the thirtieth day
after the date of a Registration Failure and every thirtieth day
thereafter (pro rated for periods totaling less than thirty days)
until such Registration Failure is cured; (vi) on the thirtieth day
after the date of a Filing Failure and every thirtieth day
thereafter (pro rated for periods totaling less than thirty days)
until such Filing Failure is cured; (vii) on the thirtieth day
after the date of an Effectiveness Failure and every thirtieth day
thereafter (pro rated for periods totaling less than thirty days)
until such Effectiveness Failure is cured; and (viii) on the
thirtieth day after the initial date of a Maintenance Failure and
every thirtieth day thereafter (pro rated for periods totaling less
than thirty days) until such Maintenance Failure is cured. The
payments to which a holder shall be entitled pursuant to this
Section 2(g) are referred to herein as "Registration Delay Payments."
Registration Delay Payments shall be paid on the earlier of (I) the
dates set forth above and (II) the third Business Day after the
event or failure giving rise to the Registration Delay Payments is
cured. In the event the Company fails to make Registration Delay
Payments in a timely manner, such Registration Delay Payments shall
bear interest at the rate of one and one-half percent (1.5%) per
month (prorated for partial months) until paid in
full.

 



 

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3.           Related
Obligations.

 


At such
time as the Company is obligated to file a Registration Statement
with the SEC pursuant to Section 2(a), 2(b), 2(e) or 2(f), the
Company will use its best efforts to effect the registration of the
Registrable Securities in accordance with the intended method of
disposition thereof and, pursuant thereto, the Company shall have
the following obligations:

 


(a)           The
Company shall promptly prepare and file with the SEC a Registration
Statement with respect to the Registrable Securities and use its
best efforts to cause such Registration Statement relating to the
Registrable Securities to become effective as soon as practicable
after such filing (but in no event later than the Effectiveness
Deadline). The Company shall keep each Registration Statement
effective pursuant to Rule 415 at all times until the earlier of
(i) the date as of which the Investors may sell all of the
Registrable Securities covered by such Registration Statement
without restriction or limitation pursuant to Rule 144 and without
the requirement to be in compliance with Rule 144(c)(1) (or any
successor thereto) promulgated under the 1933 Act or (ii) the date
on which the Investors shall have sold all of the Registrable
Securities covered by such Registration Statement (the
"Registration Period"). The
Company shall ensure that each Registration Statement (including
any amendments or supplements thereto and prospectuses contained
therein) shall not contain any untrue statement of a material fact
or omit to state a material fact required to be stated therein, or
necessary to make the statements therein (in the case of
prospectuses, in the light of the circumstances in which they were
made) not misleading. The term "best efforts" shall mean, among
other things, that the Company shall submit to the SEC, within two
(2) Business Days after the later of the date that (i) the Company
learns that no review of a particular Registration Statement will
be made by the staff of the SEC or that the staff has no further
comments on a particular Registration Statement, as the case may
be, and (ii) the approval of Legal Counsel pursuant to Section 3(c)
(which approval is immediately sought), a request for acceleration
of effectiveness of such Registration Statement to a time and date
not later than two (2) Business Days after the submission of such
request. The Company shall respond in writing to comments made by
the SEC in respect of a Registration Statement as soon as
practicable, but in no event later than fifteen (15) days after the
receipt of comments by or notice from the SEC that an amendment is
required in order for a Registration Statement to be declared
effective.

 


(b)           The
Company shall prepare and file with the SEC such amendments
(including post-effective amendments) and supplements to a
Registration Statement and the prospectus used in connection with
such Registration Statement, which prospectus is to be filed
pursuant to Rule 424 promulgated under the 1933 Act, as may be
necessary to keep such Registration Statement effective at all
times during the Registration Period, and, during such period,
comply with the provisions of the 1933 Act with respect to the
disposition of all Registrable Securities of the Company covered by
such Registration Statement until such time as all of such
Registrable Securities shall have been disposed of in accordance
with the intended methods of disposition by the seller or sellers
thereof as set forth in such Registration Statement. In the case of
amendments and supplements to a Registration Statement which are
required to be filed pursuant to this Agreement (including pursuant
to this Section 3(b)) by reason of the Company filing a report on
Form 10-K, Form 10-Q, Form 8-K or any analogous report under the
Securities Exchange Act of 1934, as amended (the "1934 Act"), the Company shall have
incorporated such report by reference into such Registration
Statement, if applicable, or shall file such amendments or
supplements with the SEC on the same day on which the 1934 Act
report is filed which created the requirement for the Company to
amend or supplement such Registration Statement.

 



 

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(c)           The
Company shall (A) permit Legal Counsel to review and comment upon
(i) a Registration Statement at least five (5) Business Days prior
to its filing with the SEC and (ii) all amendments and supplements
to all Registration Statements (except for Annual Reports on Form
10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K,
and any similar or successor reports) within a reasonable number of
days prior to their filing with the SEC, and (B) not file any
Registration Statement or amendment or supplement thereto in a form
to which Legal Counsel reasonably objects. The Company shall not
submit a request for acceleration of the effectiveness of a
Registration Statement or any amendment or supplement thereto
without the prior approval of Legal Counsel, which consent shall
not be unreasonably withheld, conditioned or delayed. The Company
shall furnish to Legal Counsel, without charge, (i) copies of any
correspondence from the SEC or the staff of the SEC to the Company
or its representatives relating to any Registration Statement, (ii)
promptly after the same is prepared and filed with the SEC, one
copy of any Registration Statement and any amendment(s) thereto,
including financial statements and schedules, all documents
incorporated therein by reference, if requested by an Investor, and
all exhibits and (iii) upon the effectiveness of any Registration
Statement, one copy of the prospectus included in such Registration
Statement and all amendments and supplements thereto. The Company
shall reasonably cooperate with Legal Counsel in performing the
Company's obligations pursuant to this Section 3.

 


(d)           Upon
request, the Company shall furnish to each Investor whose
Registrable Securities are included in any Registration Statement,
without charge, (i) promptly after the same is prepared and filed
with the SEC, at least one copy of such Registration Statement and
any amendment(s) thereto, including financial statements and
schedules, all documents incorporated therein by reference, if
requested by an Investor, all exhibits and each preliminary
prospectus, (ii) upon the effectiveness of any Registration
Statement, ten (10) copies of the prospectus included in such
Registration Statement and all amendments and supplements thereto
(or such other number of copies as such Investor may reasonably
request) and (iii) such other documents, including copies of any
preliminary or final prospectus, as such Investor may reasonably
request from time to time in order to facilitate the disposition of
the Registrable Securities owned by such Investor.

 


(e)           The
Company shall use its best efforts to (i) register and qualify,
unless an exemption from registration and qualification applies,
the resale by Investors of the Registrable Securities covered by a
Registration Statement under such other securities or "blue sky"
laws of all applicable jurisdictions in the United States, (ii)
prepare and file in those jurisdictions such amendments (including
post-effective amendments) and supplements to such registrations
and qualifications as may be necessary to maintain the
effectiveness thereof during the Registration Period, (iii) take
such other actions as may be necessary to maintain such
registrations and qualifications in effect at all times during the
Registration Period, and (iv) take all other actions reasonably
necessary or advisable to qualify the Registrable Securities for
sale in such jurisdictions; provided, however, that the Company
shall not be required in connection therewith or as a condition
thereto to (x) qualify to do business in any jurisdiction where it
would not otherwise be required to qualify but for this Section
3(e), (y) subject itself to general taxation in any such
jurisdiction, or (z) file a general consent to service of process
in any such jurisdiction. The Company shall promptly notify Legal
Counsel and each Investor who holds Registrable Securities of the
receipt by the Company of any notification with respect to the
suspension of the registration or qualification of any of the
Registrable Securities for sale under the securities or "blue sky"
laws of any jurisdiction in the United States or its receipt of
actual notice of the initiation or threatening of any proceeding
for such purpose.

 



 

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(f)           The
Company shall notify Legal Counsel and each Investor in writing of
the happening of any event, as promptly as practicable after
becoming aware of such event, as a result of which the prospectus
included in a Registration Statement, as then in effect, includes
an untrue statement of a material fact or omission to state a
material fact required to be stated therein or necessary to make
the statements therein, in the light of the circumstances under
which they were made, not misleading (provided that in no event
shall such notice contain any material, nonpublic information),
and, subject to Section 3(r), promptly prepare a supplement or
amendment to such Registration Statement to correct such untrue
statement or omission, and, upon request, deliver ten (10) copies
of such supplement or amendment to Legal Counsel and each Investor
(or such other number of copies as Legal Counsel or such Investor
may reasonably request). The Company shall also promptly notify
Legal Counsel and each Investor in writing (i) when a prospectus or
any prospectus supplement or post-effective amendment has been
filed, and when a Registration Statement or any post-effective
amendment has become effective (notification of such effectiveness
shall be delivered to Legal Counsel and each Investor by facsimile
or email on the same day of such effectiveness and by overnight
mail), (ii) of any request by the SEC for amendments or supplements
to a Registration Statement or related prospectus or related
information, and (iii) of the Company's reasonable determination
that a post-effective amendment to a Registration Statement would
be appropriate. By 9:30 a.m. New York City time on the date
following the date any post-effective amendment has become
effective, the Company shall file with the SEC in accordance with
Rule 424 under the 1933 Act the final prospectus to be used in
connection with sales pursuant to such Registration
Statement.

 


(g)           The
Company shall use its best efforts to prevent the issuance of any
stop order or other suspension of effectiveness of a Registration
Statement, or the suspension of the qualification of any of the
Registrable Securities for sale in any jurisdiction and, if such an
order or suspension is issued, to obtain the withdrawal of such
order or suspension at the earliest possible moment and to notify
Legal Counsel and each Investor who holds Registrable Securities
being sold of the issuance of such order and the resolution thereof
or its receipt of actual notice of the initiation or threat of any
proceeding for such purpose.

 


(h)           If
any Investor is required under applicable securities laws to be
described in the Registration Statement as an underwriter or an
Investor believes that it could reasonably be deemed to be an
underwriter of Registrable Securities, at the reasonable request of
such Investor, the Company shall furnish to such Investor, on the
date of the effectiveness of the Registration Statement and
thereafter from time to time on such dates as an Investor may
reasonably request (i) a letter, dated such date, from the
Company's independent certified public accountants in form and
substance as is customarily given by independent certified public
accountants to underwriters in an underwritten public offering,
addressed to the Investors, and (ii) an opinion, dated as of such
date, of counsel representing the Company for purposes of such
Registration Statement, in form, scope and substance as is
customarily given in an underwritten public offering, addressed to
the Investors.

 



 

10







 





 


(i)           If
any Investor is required under applicable securities laws to be
described in the Registration Statement as an underwriter or an
Investor believes that it could reasonably be deemed to be an
underwriter of Registrable Securities, the Company shall make
available for inspection by (i) such Investor, (ii) Legal Counsel
and (iii) one firm of accountants or other agents retained by the
Investors (collectively, the "Inspectors"), all pertinent financial
and other records, and pertinent corporate documents and properties
of the Company (collectively, the "Records"), as shall be reasonably deemed
necessary by each Inspector, and cause the Company's officers,
directors and employees to supply all information which any
Inspector may reasonably request; provided, however, that each
Inspector shall agree to hold in strict confidence and shall not
make any disclosure (except to an Investor) or use of any Record or
other information which the Company determines in good faith to be
confidential, and of which determination the Inspectors are so
notified, unless (a) the disclosure of such Records is necessary to
avoid or correct a misstatement or omission in any Registration
Statement or is otherwise required under the 1933 Act, (b) the
release of such Records is ordered pursuant to a final,
non-appealable subpoena or order from a court or government body of
competent jurisdiction, or (c) the information in such Records has
been made generally available to the public other than by
disclosure in violation of this Agreement. Each Investor agrees
that it shall, upon learning that disclosure of such Records is
sought in or by a court or governmental body of competent
jurisdiction or through other means, give prompt notice to the
Company and allow the Company, at its expense, to undertake
appropriate action to prevent disclosure of, or to obtain a
protective order for, the Records deemed confidential. Nothing
herein (or in any other confidentiality agreement between the
Company and any Investor) shall be deemed to limit the Investors'
ability to sell Registrable Securities in a manner which is
otherwise consistent with applicable laws and
regulations.

 


(j)           The
Company shall hold in confidence and not make any disclosure of
information concerning an Investor provided to the Company unless
(i) disclosure of such information is necessary to comply with
federal or state securities laws, (ii) the disclosure of such
information is necessary to avoid or correct a misstatement or
omission in any Registration Statement, (iii) the release of such
information is ordered pursuant to a subpoena or other final,
non-appealable order from a court or governmental body of competent
jurisdiction, or (iv) such information has been made generally
available to the public other than by disclosure in violation of
this Agreement or any other agreement. The Company agrees that it
shall, upon learning that disclosure of such information concerning
an Investor is sought in or by a court or governmental body of
competent jurisdiction or through other means, give prompt written
notice to such Investor and allow such Investor, at the Investor's
expense, to undertake appropriate action to prevent disclosure of,
or to obtain a protective order for, such information.

 


(k)           The
Company shall use its best efforts either to (i) cause all of the
Registrable Securities covered by a Registration Statement to be
listed on each securities exchange on which securities of the same
class or series issued by the Company are then listed, if any, if
the listing of such Registrable Securities is then permitted under
the rules of such exchange or (ii) secure the inclusion for
quotation of all of the Registrable Securities on the Principal
Market or (iii) if, despite the Company's best efforts, the Company
is unsuccessful in satisfying the preceding clauses (i) and (ii),
to secure the inclusion for quotation on another Eligible Market
for such Registrable Securities and, without limiting the
generality of the foregoing, to use its best efforts to arrange for
at least two market makers to register with the Financial Industry
Regulatory Authority, Inc. ("FINRA") as such with respect to such
Registrable Securities. The Company shall pay all fees and expenses
in connection with satisfying its obligation under this Section
3(k).

 



 

11







 





 


(l)           The
Company shall cooperate with the Investors who hold Registrable
Securities being offered and, to the extent applicable, facilitate
the timely preparation and delivery of certificates (not bearing
any restrictive legend) representing the Registrable Securities to
be offered pursuant to a Registration Statement and enable such
certificates to be in such denominations or amounts, as the case
may be, as the Investors may reasonably request and registered in
such names as the Investors may request.

 


(m)           If
requested by an Investor, the Company shall as soon as practicable
(i) incorporate in a prospectus supplement or post-effective
amendment such information as an Investor reasonably requests to be
included therein relating to the sale and distribution of
Registrable Securities, including, without limitation, information
with respect to the number of Registrable Securities being offered
or sold, the purchase price being paid therefor and any other terms
of the offering of the Registrable Securities to be sold in such
offering; (ii) make all required filings of such prospectus
supplement or post-effective amendment after being notified of the
matters to be incorporated in such prospectus supplement or
post-effective amendment; and (iii) supplement or make amendments
to any Registration Statement if reasonably requested by an
Investor holding any Registrable Securities.

 


(n)           The
Company shall use its best efforts to cause the Registrable
Securities covered by a Registration Statement to be registered
with or approved by such other governmental agencies or authorities
as may be necessary to consummate the disposition of such
Registrable Securities.

 


(o)           The
Company shall make generally available to its security holders as
soon as practical, but not later than ninety (90) days after the
close of the period covered thereby, an earnings statement (in form
complying with, and in the manner provided by, the provisions of
Rule 158 under the 1933 Act) covering a twelve-month period
beginning not later than the first day of the Company's fiscal
quarter next following the applicable Effective Date of a
Registration Statement.

 


(p)           The
Company shall otherwise use its best efforts to comply with all
applicable rules and regulations of the SEC in connection with any
registration hereunder.

 


(q)           Within
two (2) Business Days after a Registration Statement which covers
Registrable Securities is ordered effective by the SEC, the Company
shall deliver, and shall cause legal counsel for the Company to
deliver, to the transfer agent for such Registrable Securities
(with copies to the Investors whose Registrable Securities are
included in such Registration Statement) confirmation that such
Registration Statement has been declared effective by the SEC in
the form attached hereto as Exhibit A.

 



 

12







 





 


(r)           Notwithstanding
anything to the contrary herein, at any time after the Effective
Date, the Company may delay the disclosure of material, non-public
information concerning the Company the disclosure of which at the
time is not, in the good faith opinion of the Board of Directors of
the Company and its counsel, in the best interest of the Company
and, in the opinion of counsel to the Company, otherwise required
(a "Grace Period");
provided, that the Company shall promptly (i) notify the Investors
in writing of the existence of material, non-public information
giving rise to a Grace Period (provided that in each notice the
Company will not disclose the content of such material, non-public
information to the Investors) and the date on which the Grace
Period will begin, and (ii) notify the Investors in writing of the
date on which the Grace Period ends; and, provided further, that no
Grace Period shall exceed five (5) consecutive Trading Days and
during any three hundred sixty five (365) day period such Grace
Periods shall not exceed an aggregate of twenty (20) Trading Days
and the first day of any Grace Period must be at least five (5)
Trading Days after the last day of any prior Grace Period (each, an
"Allowable Grace Period").
For purposes of determining the length of a Grace Period above, the
Grace Period shall begin on and include the date the Investors
receive the notice referred to in clause (i) and shall end on and
include the later of the date the Investors receive the notice
referred to in clause (ii) and the date referred to in such notice.
The provisions of Section 3(g) hereof shall not be applicable
during the period of any Allowable Grace Period. Upon expiration of
the Grace Period, the Company shall again be bound by the first
sentence of Section 3(f) with respect to the information giving
rise thereto unless such material, non-public information is no
longer applicable. Notwithstanding anything to the contrary, the
Company shall cause its transfer agent to deliver unlegended shares
of Common Stock to a transferee of an Investor in accordance with
the terms of the Securities Purchase Agreement in connection with
any sale of Registrable Securities with respect to which an
Investor has entered into a contract for sale, prior to the
Investor's receipt of the notice of a Grace Period and for which
the Investor has not yet settled.

 


(s)           Neither
the Company nor any Subsidiary or affiliate thereof shall identify
any Investor as an underwriter in any public disclosure or filing
with the SEC, the Principal Market or any Eligible Market and any Buyer
being deemed an underwriter by the SEC shall not relieve the
Company of any obligations it has under this Agreement or any other
Transaction Document (as defined in
the Securities Purchase Agreement); provided,
however,
that the foregoing shall not prohibit the Company from including
the disclosure found in the "Plan of Distribution" section attached
hereto as Exhibit B
in the Registration
Statement.

 


(t)           Neither
the Company nor any of its Subsidiaries has entered, as of the date
hereof, nor shall the Company or any of its Subsidiaries, on or
after the date of this Agreement, enter into any agreement with
respect to its securities, that would have the effect of impairing
the rights granted to the Buyers in this Agreement or otherwise
conflicts with the provisions hereof.

 


4.           Obligations
of the Investors.

 


(a)           At
least five (5) Business Days prior to the first anticipated Filing
Date of a Registration Statement, the Company shall notify each
Investor in writing of the information the Company requires from
each such Investor if such Investor elects to have any of such
Investor's Registrable Securities included in such Registration
Statement. It shall be a condition precedent to the obligations of
the Company to complete any registration pursuant to this Agreement
with respect to the Registrable Securities of a particular Investor
that such Investor shall furnish to the Company such information
regarding itself, the Registrable Securities held by it and the
intended method of disposition of the Registrable Securities held
by it as shall be reasonably required to effect and maintain the
effectiveness of the registration of such Registrable Securities
and shall execute such documents in connection with such
registration as the Company may reasonably request.

 



 

13







 





 


(b)           Each
Investor, by such Investor's acceptance of the Registrable
Securities, agrees to cooperate with the Company as reasonably
requested by the Company in connection with the preparation and
filing of any Registration Statement hereunder, unless such
Investor has notified the Company in writing of such Investor's
election to exclude all of such Investor's Registrable Securities
from such Registration Statement.

 


(c)           Each
Investor agrees that, upon receipt of any notice from the Company
of the happening of any event of the kind described in Section 3(g)
or the first sentence of Section 3(f), such Investor will
immediately discontinue disposition of Registrable Securities
pursuant to any Registration Statement(s) covering such Registrable
Securities until such Investor's receipt of copies of the
supplemented or amended prospectus as contemplated by Section 3(g)
or the first sentence of Section 3(f) or receipt of notice that no
supplement or amendment is required. Notwithstanding anything to
the contrary, the Company shall cause its transfer agent to deliver
unlegended shares of Common Stock to a transferee of an Investor in
accordance with the terms of the Securities Purchase Agreement in
connection with any sale of Registrable Securities with respect to
which an Investor has entered into a contract for sale prior to the
Investor's receipt of a notice from the Company of the happening of
any event of the kind described in Section 3(g) or the first
sentence of Section 3(f) and for which the Investor has not yet
settled.

 


(d)           Each
Investor covenants and agrees that it will comply with the
prospectus delivery requirements of the 1933 Act as applicable to
it or an exemption therefrom in connection with sales of
Registrable Securities pursuant to the Registration
Statement.

 


5.           Expenses
of Registration.

 


All
reasonable expenses, other than underwriting discounts and
commissions, incurred in connection with registrations, filings or
qualifications pursuant to Sections 2 and 3, including, without
limitation, all registration, listing and qualifications fees,
printers and accounting fees, and fees and disbursements of counsel
for the Company shall be paid by the Company. The Company shall
also reimburse the Investors for the fees and disbursements of
Legal Counsel in connection with registration, filing or
qualification pursuant to Sections 2 and 3 of this Agreement which
amount shall be limited to $10,000 for
each such registration, filing or
qualification.

 


6.           Indemnification.

 


In the
event any Registrable Securities are included in a Registration
Statement under this Agreement:

 



 

14







 





 


(a)           To
the fullest extent permitted by law, the Company will, and hereby
does, indemnify, hold harmless and defend each Investor, the
directors, officers, partners, members, employees, agents,
representatives of, and each Person, if any, who controls any
Investor within the meaning of the 1933 Act or the 1934 Act (each,
an "Indemnified Person"),
against any losses, claims, damages, liabilities, judgments, fines,
penalties, charges, costs, reasonable attorneys' fees, amounts paid
in settlement or expenses, joint or several (collectively,
"Claims"), incurred in
investigating, preparing or defending any action, claim, suit,
inquiry, proceeding, investigation or appeal taken from the
foregoing by or before any court or governmental, administrative or
other regulatory agency, body or the SEC, whether pending or
threatened, whether or not an indemnified party is or may be a
party thereto ("Indemnified
Damages"), to which any of them may become subject insofar
as such Claims (or actions or proceedings, whether commenced or
threatened, in respect thereof) arise out of or are based upon: (i)
any untrue statement or alleged untrue statement of a material fact
in a Registration Statement or any post-effective amendment thereto
or in any filing made in connection with the qualification of the
offering under the securities or other "blue sky" laws of any
jurisdiction in which Registrable Securities are offered
("Blue Sky Filing"), or the
omission or alleged omission to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading, (ii) any untrue statement or alleged untrue statement
of a material fact contained in any preliminary prospectus if used
prior to the effective date of such Registration Statement, or
contained in the final prospectus (as amended or supplemented, if
the Company files any amendment thereof or supplement thereto with
the SEC) or the omission or alleged omission to state therein any
material fact necessary to make the statements made therein, in
light of the circumstances under which the statements therein were
made, not misleading, (iii) any violation or alleged violation by
the Company of the 1933 Act, the 1934 Act, any other law,
including, without limitation, any state securities law, or any
rule or regulation thereunder relating to the offer or sale of the
Registrable Securities pursuant to a Registration Statement or (iv)
any violation of this Agreement (the matters in the foregoing
clauses (i) through (iv) being, collectively, "Violations"). Subject to Section 6(c),
the Company shall reimburse the Indemnified Persons, promptly as
such expenses are incurred and are due and payable (upon the
presentation of invoices or other reasonably requested
documentation), for any legal fees or other reasonable expenses
incurred by them in connection with investigating or defending any
such Claim. Notwithstanding anything to the contrary contained
herein, the indemnification agreement contained in this Section
6(a): (i) shall not apply to a Claim by an Indemnified Person
arising out of or based upon a Violation which occurs in reliance
upon and in conformity with information furnished in writing to the
Company by such Indemnified Person for such Indemnified Person
expressly for use in connection with the preparation of the
Registration Statement or any such amendment thereof or supplement
thereto, if such prospectus was timely made available by the
Company pursuant to Section 3(d); and (ii) shall not apply to
amounts paid in settlement of any Claim if such settlement is
effected without the prior written consent of the Company, which
consent shall not be unreasonably withheld or delayed. Such
indemnity shall remain in full force and effect regardless of any
investigation made by or on behalf of the Indemnified Person and
shall survive the transfer of the Registrable Securities by the
Investors pursuant to Section 9.

 


(b)           In
connection with any Registration Statement in which an Investor is
participating, each such Investor agrees to severally and not
jointly indemnify, hold harmless and defend, to the same extent and
in the same manner as is set forth in Section 6(a), the Company,
each of its directors, each of its officers who signs the
Registration Statement and each Person, if any, who controls the
Company within the meaning of the 1933 Act or the 1934 Act (each,
an "Indemnified Party"),
against any Claim or Indemnified Damages to which any of them may
become subject, under the 1933 Act, the 1934 Act or otherwise,
insofar as such Claim or Indemnified Damages arise out of or are
based upon any Violation, in each case to the extent, and only to
the extent, that such Violation occurs in reliance upon and in
conformity with written information furnished to the Company by
such Investor expressly for use in connection with such
Registration Statement; and, subject to Section 6(c), such Investor
shall reimburse the Indemnified Party for any legal or other
expenses reasonably incurred by an Indemnified Party in connection
with investigating or defending any such Claim; provided, however,
that the indemnity agreement contained in this Section 6(b) and the
agreement with respect to contribution contained in Section 7 shall
not apply to amounts paid in settlement of any Claim if such
settlement is effected without the prior written consent of such
Investor, which consent shall not be unreasonably withheld or
delayed; provided, further, however, that the Investor shall be
liable under this Section 6(b) for only that amount of a Claim or
Indemnified Damages as does not exceed the net proceeds to such
Investor as a result of the sale of Registrable Securities pursuant
to such Registration Statement. Such indemnity shall remain in full
force and effect regardless of any investigation made by or on
behalf of such Indemnified Party and shall survive the transfer of
the Registrable Securities by the Investors pursuant to Section
9.

 



 

15







 





 


(c)           Promptly
after receipt by an Indemnified Person or Indemnified Party under
this Section 6 of notice of the commencement of any action or
proceeding (including any governmental action or proceeding)
involving a Claim, such Indemnified Person or Indemnified Party
shall, if a Claim in respect thereof is to be made against any
indemnifying party under this Section 6, deliver to the
indemnifying party a written notice of the commencement thereof,
and the indemnifying party shall have the right to participate in,
and, to the extent the indemnifying party so desires, jointly with
any other indemnifying party similarly noticed, to assume control
of the defense thereof with counsel mutually satisfactory to the
indemnifying party and the Indemnified Person or the Indemnified
Party, as the case may be; provided, however, that an Indemnified
Person or Indemnified Party shall have the right to retain its own
counsel with the fees and expenses of not more than one counsel for
all such Indemnified Person or Indemnified Party to be paid by the
indemnifying party, if, in the reasonable opinion of counsel
retained by the Indemnified Person or Indemnified Party, as
applicable, the representation by such counsel of the Indemnified
Person or Indemnified Party, as the case may be, and the
indemnifying party would be inappropriate due to actual or
potential differing interests between such Indemnified Person or
Indemnified Party and any other party represented by such counsel
in such proceeding. In the case of an Indemnified Person, legal
counsel referred to in the immediately preceding sentence shall be
selected by the Investors holding at least a majority in interest
of the Registrable Securities included in the Registration
Statement to which the Claim relates. The Indemnified Party or
Indemnified Person shall reasonably cooperate with the indemnifying
party in connection with any negotiation or defense of any such
action or Claim by the indemnifying party and shall furnish to the
indemnifying party all information reasonably available to the
Indemnified Party or Indemnified Person which relates to such
action or Claim. The indemnifying party shall keep the Indemnified
Party or Indemnified Person fully apprised at all times as to the
status of the defense or any settlement negotiations with respect
thereto. No indemnifying party shall be liable for any settlement
of any action, claim or proceeding effected without its prior
written consent, provided, however, that the indemnifying party
shall not unreasonably withhold, delay or condition its consent. No
indemnifying party shall, without the prior written consent of the
Indemnified Party or Indemnified Person, consent to entry of any
judgment or enter into any settlement or other compromise which
does not include as an unconditional term thereof the giving by the
claimant or plaintiff to such Indemnified Party or Indemnified
Person of a release from all liability in respect to such Claim or
litigation and such settlement shall not include any admission as
to fault on the part of the Indemnified Party. Following
indemnification as provided for hereunder, the indemnifying party
shall be subrogated to all rights of the Indemnified Party or
Indemnified Person with respect to all third parties, firms or
corporations relating to the matter for which indemnification has
been made. The failure to deliver written notice to the
indemnifying party within a reasonable time of the commencement of
any such action shall not relieve such indemnifying party of any
liability to the Indemnified Person or Indemnified Party under this
Section 6, except to the extent that the indemnifying party is
prejudiced in its ability to defend such action.

 



 

16







 





 


(d)           The
indemnification required by this Section 6 shall be made by
periodic payments of the amount thereof during the course of the
investigation or defense, as and when bills are received or
Indemnified Damages are incurred.

 


(e)           The
indemnity agreements contained herein shall be in addition to (i)
any cause of action or similar right of the Indemnified Party or
Indemnified Person against the indemnifying party or others, and
(ii) any liabilities the indemnifying party may be subject to
pursuant to the law.

 


7.           Contribution.

 


To the
extent any indemnification by an indemnifying party is prohibited
or limited by law, the indemnifying party agrees to make the
maximum contribution with respect to any amounts for which it would
otherwise be liable under Section 6 to the fullest extent permitted
by law; provided, however, that: (i) no Person involved in the sale
of Registrable Securities which Person is guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the 1933
Act) in connection with such sale shall be entitled to contribution
from any Person involved in such sale of Registrable Securities who
was not guilty of fraudulent misrepresentation; and (ii)
contribution by any seller of Registrable Securities shall be
limited in amount to the amount of net proceeds received by such
seller from the sale of such Registrable Securities pursuant to
such Registration Statement.

 


8.           Reports
Under the 1934 Act.

 


With a
view to making available to the Investors the benefits of Rule 144
promulgated under the 1933 Act or any other similar rule or
regulation of the SEC that may at any time permit the Investors to
sell securities of the Company to the public without registration
("Rule 144"), the Company
agrees to:

 


(a)           make
and keep public information available, as those terms are
understood and defined in Rule 144;

 


(b)           file
with the SEC in a timely manner all reports and other documents
required of the Company under the 1933 Act and the 1934 Act so long
as the Company remains subject to such requirements and the filing
of such reports and other documents is required for the applicable
provisions of Rule 144; and

 



 

17







 





 


(c)           furnish
to each Investor so long as such Investor owns Registrable
Securities, promptly upon request, (i) a written statement by the
Company, if true, that it has complied with the reporting
requirements of Rule 144, the 1933 Act and the 1934 Act, (ii) a
copy of the most recent annual or quarterly report of the Company
and such other reports and documents so filed by the Company, and
(iii) such other information as may be reasonably requested to
permit the Investors to sell such securities pursuant to Rule 144
without registration.

 


9.           Assignment
of Registration Rights.

 


The
rights under this Agreement shall be automatically assignable by
the Investors to any transferee of all or any portion of such
Investor's Registrable Securities if: (i) the Investor agrees in
writing with the transferee or assignee to assign such rights, and
a copy of such agreement is furnished to the Company within a
reasonable time after such assignment; (ii) the Company is, within
a reasonable time after such transfer or assignment, furnished with
written notice of (a) the name and address of such transferee or
assignee, and (b) the securities with respect to which such
registration rights are being transferred or assigned; (iii)
immediately following such transfer or assignment the further
disposition of such securities by the transferee or assignee is
restricted under the 1933 Act or applicable state securities laws;
(iv) at or before the time the Company receives the written notice
contemplated by clause (ii) of this sentence the transferee or
assignee agrees in writing with the Company to be bound by all of
the provisions contained herein; and (v) such transfer shall have
been made in accordance with the applicable requirements of the
Securities Purchase Agreement.

 


10.           Amendment
of Registration Rights.

 


Provisions of this
Agreement may be amended and the observance thereof may be waived
(either generally or in a particular instance and either
retroactively or prospectively), only with the written consent of
the Company and the Required Holders; provided that any such
amendment or waiver that complies with the foregoing but that
disproportionately, materially and adversely affects the rights and
obligations of any Investor relative to the comparable rights and
obligations of the other Investors shall require the prior written
consent of such adversely affected Investor. Any amendment or
waiver effected in accordance with this Section 10 shall be binding
upon each Investor and the Company. No such amendment shall be
effective to the extent that it applies to less than all of the
holders of the Registrable Securities. No consideration shall be
offered or paid to any Person to amend or consent to a waiver or
modification of any provision of this Agreement unless the same
consideration (other than the reimbursement of legal fees) also is
offered to all of the parties to this Agreement.

 


11.           Miscellaneous.

 


(a)           A
Person is deemed to be a holder of Registrable Securities whenever
such Person owns or is deemed to own of record such Registrable
Securities. If the Company receives conflicting instructions,
notices or elections from two or more Persons with respect to the
same Registrable Securities, the Company shall act upon the basis
of instructions, notice or election received from such record owner
of such Registrable Securities.

 



 

18







 





 


(b)           Any
notices, consents, waivers or other communications required or
permitted to be given under the terms of this Agreement must be in
writing and will be deemed to have been delivered: (i) upon
receipt, when delivered personally; (ii) upon delivery, when sent
by facsimile (provided confirmation of transmission is mechanically
or electronically generated and kept on file by the sending party);
(iii) upon delivery, when sent by electronic mail (provided that
the sending party does not receive an automated rejection notice)
or (iv) one Business Day after deposit with a nationally recognized
overnight delivery service, in each case properly addressed to the
party to receive the same. The addresses, facsimile numbers and
email addresses for such communications shall be:

 


If to
the Company:

 


GT
Biopharma, Inc.


1825 K
Street, Suite 510


Washington, D.C.
20006


Telephone: (800)
304-9888


Facsimile:
202-785-0529


Attention: Steven
Weldon


E-mail:
sww@gtbiopharma.com


 


With a
copy (for informational purposes only) to:


 


DLA
Piper LLP (US)


401
Congress Ave., Suite 2500


Austin,
Texas 78701


Telephone:
512-457-7037


Facsimile:
512-721-2212


Attention: Jenifer
Smith


E-mail:
jenifer.smith@dlapiper.com


 


If to
the Transfer Agent:

 


ComputerShare Trust
Company, N.A.


8742
Lucent Blvd, Suite 225


Telephone:
303-262-0787


Facsimile:
303-262-0610


Attention: Stevie
Marcus


E-mail
stevie.marcus@computershare.com

 



 

19







 





 


If to
Legal Counsel:

 


Schulte
Roth & Zabel LLP


919
Third Avenue


New
York, New York 10022


Telephone: (212)
756-2000


Facsimile: (212)
593-5955


Attention: Eleazer
Klein, Esq.


Email:
eleazer.klein@srz.com

 


If to a
Buyer, to its address, facsimile number and/or email address set
forth on the Schedule of Buyers attached hereto, with copies to
such Buyer's representatives as set forth on the Schedule of
Buyers, or to such other address, facsimile number and/or email
address to the attention of such other Person as the recipient
party has specified by written notice given to each other party
five (5) days prior to the effectiveness of such change. Written
confirmation of receipt (A) given by the recipient of such notice,
consent, waiver or other communication, (B) mechanically or
electronically generated by the sender's facsimile machine or email
containing the time, date, recipient facsimile number or email
address and, with respect to a facsimile, an image of the first
page of such transmission or (C) provided by a courier or overnight
courier service shall be rebuttable evidence of personal service,
receipt by facsimile or receipt from a nationally recognized
overnight delivery service in accordance with clause (i), (ii) or
(iii) above, respectively.

 


(c)           Failure
of any party to exercise any right or remedy under this Agreement
or otherwise, or delay by a party in exercising such right or
remedy, shall not operate as a waiver thereof.

 


(d)           All
questions concerning the construction, validity, enforcement and
interpretation of this Agreement shall be governed by the internal
laws of the State of New York, without giving effect to any choice
of law or conflict of law provision or rule (whether of the State
of New York or any other jurisdictions) that would cause the
application of the laws of any jurisdictions other than the State
of New York. Each party hereby irrevocably submits to the exclusive
jurisdiction of the state and federal courts sitting in The City of
New York, Borough of Manhattan, for the adjudication of any dispute
hereunder or in connection herewith or with any transaction
contemplated hereby or discussed herein, and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding,
any claim that it is not personally subject to the jurisdiction of
any such court, that such suit, action or proceeding is brought in
an inconvenient forum or that the venue of such suit, action or
proceeding is improper. Each party hereby irrevocably waives
personal service of process and consents to process being served in
any such suit, action or proceeding by mailing a copy thereof to
such party at the address for such notices to it under this
Agreement and agrees that such service shall constitute good and
sufficient service of process and notice thereof. Nothing contained
herein shall be deemed to limit in any way any right to serve
process in any manner permitted by law. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT
IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE
ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR
ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED
HEREBY.

 



 

20







 





 


(e)           If
any provision of this Agreement is prohibited by law or otherwise
determined to be invalid or unenforceable by a court of competent
jurisdiction, the provision that would otherwise be prohibited,
invalid or unenforceable shall be deemed amended to apply to the
broadest extent that it would be valid and enforceable, and the
invalidity or unenforceability of such provision shall not affect
the validity of the remaining provisions of this Agreement so long
as this Agreement as so modified continues to express, without
material change, the original intentions of the parties as to the
subject matter hereof and the prohibited nature, invalidity or
unenforceability of the provision(s) in question does not
substantially impair the respective expectations or reciprocal
obligations of the parties or the practical realization of the
benefits that would otherwise be conferred upon the parties. The
parties will endeavor in good faith negotiations to replace the
prohibited, invalid or unenforceable provision(s) with a valid
provision(s), the effect of which comes as close as possible to
that of the prohibited, invalid or unenforceable
provision(s).

 


(f)           This
Agreement, the other Transaction Documents (as defined in the
Securities Purchase Agreement) and the instruments referenced
herein and therein constitute the entire agreement among the
parties hereto with respect to the subject matter hereof and
thereof. There are no restrictions, promises, warranties or
undertakings, other than those set forth or referred to herein and
therein. This Agreement, the other Transaction Documents and the
instruments referenced herein and therein supersede all prior
agreements and understandings among the parties hereto with respect
to the subject matter hereof and thereof.

 


(g)           Subject
to the requirements of Section 9, this Agreement shall inure to the
benefit of and be binding upon the permitted successors and assigns
of each of the parties hereto.

 


(h)           The
headings in this Agreement are for convenience of reference only
and shall not limit or otherwise affect the meaning
hereof.

 


(i)           This
Agreement may be executed in identical counterparts, each of which
shall be deemed an original but all of which shall constitute one
and the same agreement. This Agreement, once executed by a party,
may be delivered to the other party hereto by facsimile
transmission of a copy of this Agreement bearing the signature of
the party so delivering this Agreement.

 


(j)           Each
party shall do and perform, or cause to be done and performed, all
such further acts and things, and shall execute and deliver all
such other agreements, certificates, instruments and documents, as
any other party may reasonably request in order to carry out the
intent and accomplish the purposes of this Agreement and the
consummation of the transactions contemplated hereby.

 


(k)           All
consents and other determinations required to be made by the
Investors pursuant to this Agreement shall be made, unless
otherwise specified in this Agreement, by the Required Holders,
determined as if all of the outstanding Notes then held by the
Investors have been converted for Registrable Securities without
regard to any limitations on the issuance of shares of Common Stock
pursuant to the terms of the Notes and the outstanding Warrants
then held by Investors have been exercised for Registrable
Securities without regard to any limitations on exercise of the
Warrants.

 



 

21







 





 


(l)           The
language used in this Agreement will be deemed to be the language
chosen by the parties to express their mutual intent and no rules
of strict construction will be applied against any
party.

 


(m)           This
Agreement is intended for the benefit of the parties hereto and
their respective permitted successors and assigns, and is not for
the benefit of, nor may any provision hereof be enforced by, any
other Person.

 


(n)           The
obligations of each Investor hereunder are several and not joint
with the obligations of any other Investor, and no provision of
this Agreement is intended to confer any obligations on any
Investor vis-à-vis any other Investor. Nothing contained
herein, and no action taken by any Investor pursuant hereto, shall
be deemed to constitute the Investors as a partnership, an
association, a joint venture or any other kind of entity, or create
a presumption that the Investors are in any way acting in concert
or as a group with respect to such obligations or the transactions
contemplated herein.

 


* * * *
* *

 



[Signature Page Follows]




	
 

	
 

	










 

22








 





 


IN WITNESS WHEREOF, each Buyer and the
Company have caused their respective signature page to this
Registration Rights Agreement to be duly executed as of the date
first written above.


 


 


	

 

	
COMPANY:

	

 


	

 

	
 

	

 


	

 

	GT
BIOPHARMA, INC.	

 


	

 

	

 

	

 

	

 


	
 

	
By:  

	
/s/ 

	

 


	

 

	

 

	
Name: 

	

 


	

 

	

 

	

Title: 

	

 







 


 




	
 

	
	










 

23








 





 

 


IN WITNESS WHEREOF, each Buyer and the
Company have caused their respective signature page to this
Registration Rights Agreement to be duly executed as of the date
first written above.


 


 







 


	

 

	
BUYERS:

	

 


	

 

	

 

	

 

	

 


	
 

	
By:  

	
/s/ 

	

 


	

 

	

 

	
Name: 

	

 


	

 

	

 

	

Title: 

	

 







 

  




 


 


 




	
 

	
	










 

24








 





 


SCHEDULE
OF BUYERS


 


	
 Buyer

	
Buyer
Addressand Facsimile Number

	
Buyer's
Representative's Address and Facsimile Number


	


Empery Asset Master Ltd.

	

c/o
Empery Asset Management, LP1 Rockefeller Plaza, Suite 1205New York,
NY 10020Attention: Ryan M. LaneFacsimile: (212) 608 3307Telephone:
(212) 608 3300Email: notices@emperyam.com


 

	

Schulte
Roth & Zabel LLP


919
Third Avenue


New
York, NY 10022


Attn:
Eleazer Klein, Esq.


Facsimile:
(212) 593-5955


Telephone:
(212) 756-2000


Email:
eleazer.klein@srz.com


	


Empery Tax Efficient, LP

	

c/o
Empery Asset Management, LP1 Rockefeller Plaza, Suite 1205New York,
NY 10020Attention: Ryan M. LaneFacsimile: (212) 608 3307Telephone:
(212) 608 3300Email: notices@emperyam.com


 

	

Schulte
Roth & Zabel LLP


919
Third Avenue


New
York, NY 10022


Attn:
Eleazer Klein, Esq.


Facsimile:
(212) 593-5955


Telephone:
(212) 756-2000


Email:
eleazer.klein@srz.com


	


Empery Tax Efficient II, LP

	

c/o
Empery Asset Management, LP1 Rockefeller Plaza, Suite 1205New York,
NY 10020Attention: Ryan M. LaneFacsimile: (212) 608 3307Telephone:
(212) 608 3300Email: notices@emperyam.com


 

	

Schulte
Roth & Zabel LLP


919
Third Avenue


New
York, NY 10022


Attn:
Eleazer Klein, Esq.


Facsimile:
(212) 593-5955


Telephone:
(212) 756-2000


Email:
eleazer.klein@srz.com


	


Siesta Fiesta Holdings, LLC

	

c/o
Siesta Fiesta Holdings, LLC


7924
Midnight Pass Road


Sarasota,
FL 34242


Attention:
Scott Williams


Facsimile:
407-657-4280


Telephone
: 941-724-3504


Email:
scoot61@comcast.net

	
 


	


James Heavener

	

James
W. Heavener


3300
University Blvd., Suite 218


Winter
Park, FL 32792


Facsimile:
407-657-4280


Telephone
: 407-865-4875


Email:
bheavener@fullsail.com

	
 






 



 

25







 





 

 


	


Alto Opportunity Master Fund, SPC - Segregated Master Portfolio
B

	

c/o
Ayrton Capital LLC


1180
Avenue of Americas, Suite 842


New
York, NY 10036


Telephone:
+1-646-793-9056


Email:
wk@ayrtonllc.com

	
 


	


Adam Kasower

	

25170
Jim Bridger Road


Hidden
Hills, CA 91302


Telephone:
818-429-1551


Email:
adam@kasower.com

	
 


	


Red Mango Enterprises Limited

	

Pictet
& Cie (Europe) S.A. Hong Kong Branch, 9/F Chater House 8
Connaught Road Central, Hong Kong


Facsimile:
852 3131 1808


Telephone:
852 3191 1805


Email:
mchow@pictet.com

	
 


	


The Rosalinde and Arthur Gilbert Foundation

	

2730
Wilshire Blvd., Suite 301


Santa
Monica, CA 90403


Attention:
Martin H. Blank, Jr.


Telephone:
310-736-1617


Email:
marty@mblank.com

	
 


	


The RSZ Trust

	

11620
Wilshire Blvd., Suite 1000


Los
Angeles, CA 90025


Attention:
Richard S. Ziman


Telephone:
310-966-3802


Email:
rziman@rexfordindustrial.com

	
 


	


Jeffrey Bronfman Revocable Living Trust

	

1000
Cordova Place #710


Santa
Fe, NM 87505


Attention:
Jeffrey Bronfman


Telephone:
505-988-5924


Email:
jeffreyudv@aol.com

	
 


	


Lipp Irrevocable Trust

	

270
18th St.


Santa
Monica, CA 90402


Attention:
Diane S. Lipp


Telephone:
310-395-2679


Email:
dedelipp@gmail.com

	
 


	


Robert H. Lipp Separate Property Trust

	

270
18th St.


Santa
Monica, CA 90402


Attention:
Robert H. Lipp


Telephone:
310-395-2679


Email:
roblipp@gam-llc.com

	
 


	


Diane S. Lipp Separate Property Trust

	

270
18th St.


Santa
Monica, CA 90402


Attention:
Diane S. Lipp


Telephone:
310-395-2679


Email:
dedelipp@gmail.com

	
 







 




	
 

	
	










 

26








 







EXHIBIT A

 



FORM OF NOTICE OF EFFECTIVENESS

 



OF REGISTRATION STATEMENT

 


 


ComputerShare
Trust Company, N.A.


[______]


[______]


Attention:
[______]

 



Re:            


GT Biopharma, Inc.





 


Ladies
and Gentlemen:

 


[We
are][I am] counsel to GT Biopharma, Inc., a Delaware corporation
(the "Company"), and have
represented the Company in connection with that certain Securities
Purchase Agreement, dated as of January [●], 2018 (the "Securities Purchase Agreement"), entered into by
and among the Company and the buyers named therein (collectively,
the "Holders") pursuant to
which the Company issued to the Holders senior convertible notes
(the "Notes") pursuant to
which shares of the Company's common stock, par value $0.001 per
share (the "Common Stock")
are issuable thereunder and warrants exercisable for shares of
Common Stock (the "Warrants"). Pursuant to the Securities
Purchase Agreement, the Company also has entered into a
Registration Rights Agreement with the Holders (the "Registration Rights Agreement") pursuant
to which the Company agreed, among other things, to register the
resale of the Registrable Securities (as defined in the
Registration Rights Agreement), including the shares of Common
Stock issuable pursuant to the terms of the Notes and upon exercise
of the Warrants under the Securities Act of 1933, as amended (the
"1933 Act"). In connection
with the Company's obligations under the Registration Rights
Agreement, on ____________ ___, 2014, the Company filed a
Registration Statement on Form S-3 (File No. 333-_____________)
(the "Registration
Statement") with the Securities and Exchange Commission (the
"SEC") relating to the
Registrable Securities which names each of the Holders as a selling
stockholder thereunder.

 


In
connection with the foregoing, [we][I] advise you that a member of
the SEC's staff has advised [us][me] by telephone that the SEC has
entered an order declaring the Registration Statement effective
under the 1933 Act at [ENTER
TIME OF EFFECTIVENESS] on
[ENTER DATE OF
EFFECTIVENESS] and [we][I]
have no knowledge, after telephonic inquiry of a member of the
SEC's staff, that any stop order suspending its effectiveness has
been issued or that any proceedings for that purpose are pending
before, or threatened by, the SEC and the Registrable Securities
are available for resale under the 1933 Act pursuant to the
Registration Statement.

 


This
letter shall serve as our standing instruction to you that the
shares of Common Stock are freely transferable by the Holders
pursuant to the Registration Statement. You need not require
further letters from us to effect any future legend-free issuance
or reissuance of shares of Common Stock to the Holders as
contemplated by the Company's Irrevocable Transfer Agent
Instructions dated January [●], 2018.

 


Very
truly yours,

 


[ISSUER'S COUNSEL]

 


By:_____________________

 



CC:            

[LIST NAMES OF HOLDERS]








	
 

	
	










 

27








 







EXHIBIT B



SELLING STOCKHOLDERS

 


The
shares of common stock being offered by the selling stockholders
are those issuable to the selling stockholders pursuant to the
terms of the convertible notes and upon exercise of the warrants.
For additional information regarding the issuance of those
convertible notes and warrants, see "Private Placement of
Convertible Notes and Warrants" above. We are registering the
shares of common stock in order to permit the selling stockholders
to offer the shares for resale from time to time. Except for the
ownership of the convertible notes and the warrants issued pursuant
to the Securities Purchase Agreement, the selling stockholders have
not had any material relationship with us within the past three
years.

 


The
table below lists the selling stockholders and other information
regarding the beneficial ownership of the shares of common stock by
each of the selling stockholders. The second column lists the
number of shares of common stock beneficially owned by each selling
stockholder, based on its ownership of the convertible notes and
warrants, as of January 23, 2018, assuming conversion of all
convertible notes and exercise of all warrants held by the selling
stockholders on that date, without regard to any limitations on the
issuance of shares of Common Stock pursuant to the terms of the
Notes or exercise of the Warrants.

 


The
third column lists the shares of common stock being offered by this
prospectus by the selling stockholders.

 


In
accordance with the terms of a registration rights agreement with
the selling stockholders, this prospectus generally covers the
resale of at least the sum of (i) 200% of the maximum number of
shares of common stock issued and issuable pursuant to the
convertible notes as of the Trading Day immediately preceding the
date the registration statement is initially filed with the SEC,
and (ii) the maximum number of shares of common stock issued and
issuable upon exercise of the related warrants as of the Trading
Day immediately preceding the date the registration statement is
initially filed with the SEC. Because the conversion price of
the convertible notes, the number of shares that will actually be
issued may be more or less than the number of shares being offered
by this prospectus. The fourth column assumes the sale of all of
the shares offered by the selling stockholders pursuant to this
prospectus. The fifth column lists the percentage ownership of our
common stock by each selling stockholder after completion of this
offering, assuming that each selling stockholder sells all of the
shares covered by this prospectus, to the extent such percentage
will exceed 1% of the total number of shares of common stock
outstanding.

 


Under
the terms of the convertible notes and the warrants, a selling
stockholder may not convert the convertible notes or exercise the
warrants to the extent such conversion or exercise would cause such
selling stockholder, together with its affiliates, to beneficially
own a number of shares of common stock which would exceed 4.99% of
our then outstanding shares of common stock following such
conversion or exercise, excluding for purposes of such
determination shares of common stock issuable pursuant to the terms
of the convertible notes which have not been converted and upon
exercise of the warrants which have not been exercised. The number
of shares in the second column does not reflect this limitation.
The selling stockholders may sell all, some or none of their shares
in this offering. See "Plan of Distribution."

 


 




	

DOC ID
- 27225227.3

	
	










 

28








 






 

 


	


Name of Selling Stockholder

	


Number of Shares



of Common Stock



Beneficially Owned



Prior to Offering

	


Maximum Number



of Shares



of Common Stock



to be Sold



Pursuant to



this Prospectus

	


Number of Shares



of Common Stock



Beneficially Owned



After Offering

	


Percentage of



Shares of Common



Stock Owned



After Offering


	


Empery Asset Master, Ltd. (1)

	
 

	
 

	
 

	
 


	


Empery Tax Efficient, LP (2)

	
 

	
 

	
 

	
 


	


Empery Tax Efficient II, LP (3)

	
 

	
 

	
 

	
 


	


[Other Buyers]

	
 

	
 

	
 

	
 







 

 


(1)
Empery Asset Management LP, the authorized agent of Empery Asset
Master Ltd ("EAM"), has discretionary authority to vote and dispose
of the shares held by EAM and may be deemed to be the beneficial
owner of these shares. Martin Hoe and Ryan Lane, in their capacity
as investment managers of Empery Asset Management LP, may also be
deemed to have investment discretion and voting power over the
shares held by EAM. EAM, Mr. Hoe and Mr. Lane each disclaim any
beneficial ownership of these shares. The business address for each
of EAM, Empery Asset Management LP and Messrs. Hoe and Lane is c/o
Empery Asset Management, LP, 1 Rockefeller Plaza, Suite 1205, New
York, NY 10020.

 


(2)
Empery Asset Management LP, the authorized agent of Empery Tax
Efficient, LP ("ETE"), has discretionary authority to vote and
dispose of the shares held by ETE and may be deemed to be the
beneficial owner of these shares. Martin Hoe and Ryan Lane, in
their capacity as investment managers of Empery Asset Management
LP, may also be deemed to have investment discretion and voting
power over the shares held by ETE. ETE, Mr. Hoe and Mr. Lane each
disclaim any beneficial ownership of these shares. The business
address for each of ETE, Empery Asset Management LP and Messrs. Hoe
and Lane is c/o Empery Asset Management, LP, 1 Rockefeller Plaza,
Suite 1205, New York, NY 10020.

 


(3)
Empery Asset Management LP, the authorized agent of Empery Tax
Efficient II, LP ("ETE II"), has discretionary authority to vote
and dispose of the shares held by ETE II and may be deemed to be
the beneficial owner of these shares. Martin Hoe and Ryan Lane, in
their capacity as investment managers of Empery Asset Management
LP, may also be deemed to have investment discretion and voting
power over the shares held by ETE II. ETE II, Mr. Hoe and Mr. Lane
each disclaim any beneficial ownership of these shares. The
business address for each of ETE II, Empery Asset Management LP and
Messrs. Hoe and Lane is c/o Empery Asset Management, LP, 1
Rockefeller Plaza, Suite 1205, New York, NY 10020.


 


(4)
[Other Buyers]

 



 

29







 





 



PLAN OF DISTRIBUTION

 


We are
registering the shares of common stock issuable pursuant to the
terms of the convertible notes and upon exercise of the warrants to
permit the resale of these shares of common stock by the holders of
the convertible notes and warrants from time to time after the date
of this prospectus. We will not receive any of the proceeds from
the sale by the selling stockholders of the shares of common stock.
We will bear all fees and expenses incident to our obligation to
register the shares of common stock.

 


The
selling stockholders may sell all or a portion of the shares of
common stock beneficially owned by them and offered hereby from
time to time directly or through one or more underwriters,
broker-dealers or agents. If the shares of common stock are sold
through underwriters or broker-dealers, the selling stockholders
will be responsible for underwriting discounts or commissions or
agent's commissions. The shares of common stock may be sold in one
or more transactions at fixed prices, at prevailing market prices
at the time of the sale, at varying prices determined at the time
of sale, or at negotiated prices. These sales may be effected in
transactions, which may involve crosses or block
transactions,

 




●

on any national
securities exchange or quotation service on which the securities
may be listed or quoted at the time of sale;





 




●

in the
over-the-counter market;





 




●

in transactions
otherwise than on these exchanges or systems or in the
over-the-counter market;





 




●

through the writing
of options, whether such options are listed on an options exchange
or otherwise;





 




●

ordinary
brokerage transactions and transactions in which the broker-dealer
solicits purchasers;





 




●

block
trades in which the broker-dealer will attempt to sell the shares
as agent but may position and resell a portion of the block as
principal to facilitate the transaction;





 




●

purchases
by a broker-dealer as principal and resale by the broker-dealer for
its account;





 




●

an
exchange distribution in accordance with the rules of the
applicable exchange;





 




●

privately
negotiated transactions;





 




●

short
sales;





 




●

sales
pursuant to Rule 144;





 




●

broker-dealers
may agree with the selling securityholders to sell a specified
number of such shares at a stipulated price per share;





 



 

30







 





 




●

a
combination of any such methods of sale; and





 




●

any
other method permitted pursuant to applicable law.





 


If the
selling stockholders effect such transactions by selling shares of
common stock to or through underwriters, broker-dealers or agents,
such underwriters, broker-dealers or agents may receive commissions
in the form of discounts, concessions or commissions from the
selling stockholders or commissions from purchasers of the shares
of common stock for whom they may act as agent or to whom they may
sell as principal (which discounts, concessions or commissions as
to particular underwriters, broker-dealers or agents may be in
excess of those customary in the types of transactions involved).
In connection with sales of the shares of common stock or
otherwise, the selling stockholders may enter into hedging
transactions with broker-dealers, which may in turn engage in short
sales of the shares of common stock in the course of hedging in
positions they assume. The selling stockholders may also sell
shares of common stock short and deliver shares of common stock
covered by this prospectus to close out short positions and to
return borrowed shares in connection with such short sales. The
selling stockholders may also loan or pledge shares of common stock
to broker-dealers that in turn may sell such shares.

 


The
selling stockholders may pledge or grant a security interest in
some or all of the convertible notes, warrants or shares of common
stock owned by them and, if they default in the performance of
their secured obligations, the pledgees or secured parties may
offer and sell the shares of common stock from time to time
pursuant to this prospectus or any amendment to this prospectus
under Rule 424(b)(3) or other applicable provision of the
Securities Act of 1933, as amended, amending, if necessary, the
list of selling stockholders to include the pledgee, transferee or
other successors in interest as selling stockholders under this
prospectus. The selling stockholders also may transfer and donate
the shares of common stock in other circumstances in which case the
transferees, donees, pledgees or other successors in interest will
be the selling beneficial owners for purposes of this
prospectus.

 


The
selling stockholders and any broker-dealer participating in the
distribution of the shares of common stock may be deemed to be
"underwriters" within the meaning of the Securities Act, and any
commission paid, or any discounts or concessions allowed to, any
such broker-dealer may be deemed to be underwriting commissions or
discounts under the Securities Act. At the time a particular
offering of the shares of common stock is made, a prospectus
supplement, if required, will be distributed which will set forth
the aggregate amount of shares of common stock being offered and
the terms of the offering, including the name or names of any
broker-dealers or agents, any discounts, commissions and other
terms constituting compensation from the selling stockholders and
any discounts, commissions or concessions allowed or reallowed or
paid to broker-dealers.

 


Under
the securities laws of some states, the shares of common stock may
be sold in such states only through registered or licensed brokers
or dealers. In addition, in some states the shares of common stock
may not be sold unless such shares have been registered or
qualified for sale in such state or an exemption from registration
or qualification is available and is complied with.

 



 

31







 





 


There
can be no assurance that any selling stockholder will sell any or
all of the shares of common stock registered pursuant to the
registration statement, of which this prospectus forms a
part.

 


The
selling stockholders and any other person participating in such
distribution will be subject to applicable provisions of the
Securities Exchange Act of 1934, as amended, and the rules and
regulations thereunder, including, without limitation, Regulation M
of the Exchange Act, which may limit the timing of purchases and
sales of any of the shares of common stock by the selling
stockholders and any other participating person. Regulation M may
also restrict the ability of any person engaged in the distribution
of the shares of common stock to engage in market-making activities
with respect to the shares of common stock. All of the foregoing
may affect the marketability of the shares of common stock and the
ability of any person or entity to engage in market-making
activities with respect to the shares of common stock.

 


We will
pay all expenses of the registration of the shares of common stock
pursuant to the registration rights agreement, estimated to be
$[     ] in total, including, without
limitation, Securities and Exchange Commission filing fees and
expenses of compliance with state securities or "blue sky" laws;
provided, however, that a selling stockholder will pay all
underwriting discounts and selling commissions, if any. We will
indemnify the selling stockholders against liabilities, including
some liabilities under the Securities Act, in accordance with the
registration rights agreements, or the selling stockholders will be
entitled to contribution. We may be indemnified by the selling
stockholders against civil liabilities, including liabilities under
the Securities Act, that may arise from any written information
furnished to us by the selling stockholder specifically for use in
this prospectus, in accordance with the related registration rights
agreement, or we may be entitled to contribution.

 


Once
sold under the registration statement, of which this prospectus
forms a part, the shares of common stock will be freely tradable in
the hands of persons other than our affiliates.

 


 

 


 


 


 


 




	
 

	
	










 

32