convnotepurchaseagreement.htm


     

    
      
        

      




    EXHIBIT
10.1

    


    CONVERTIBLE
NOTE PURCHASE AGREEMENT

    


    This Convertible Note Purchase
Agreement (this "Agreement") is made as of December __, 2008 between Applied
NeuroSolutions, Inc., a Delaware corporation (the "Company"), and each of the
purchasers listed on Schedule I hereto
(each a “Purchaser” and, collectively, the "Purchasers").

    


    The Company and the Purchasers hereby
agree as follows:

     

    SECTION
1

     

    Purchase and Sale of the
Units

    


    1.1                      Authorization of Issuance
and Sale of the Units.  Prior to the Closing (as defined
herein), the Company will have authorized the issuance and sale of 12%
Convertible Promissory Notes up to an aggregate principal amount of $2,000,000
(the “Notes”).  The Notes will be in the form annexed hereto as Exhibit
A.

    


    1.2                      Sale and Purchase of the
Units.  At the Closing, subject to the terms and conditions
hereof and in reliance upon the representations, warranties and agreements
contained herein, each of the Purchasers will purchase the Note(s) in the
principal amount(s) set forth opposite such Purchaser’s name on Schedule I annexed
hereto at a purchase price set forth opposite such Purchaser’s name on Schedule I annexed
hereto (the “Purchase Price”).

     

     

    SECTION
2

     

    Closing, Payment and
Delivery

    


    2.1                      Closing.  The
Closing of the sale of the Notes will occur on December 31, 2008 or on such
later date as the parties may mutually determine (the “Closing”).

    


    2.2                      Payment and
Delivery.  At the Closing, (a) the Purchasers will pay to the
Company by check or wire funds transfer the Purchase Price set forth opposite
such Purchaser’s name on Schedule I annexed
hereto, and (b) the Company will deliver to the Purchasers the Note(s) in the
principal amount(s) set forth opposite each such Purchasers name on Schedule I annexed
hereto registered in such name or names as each such Purchaser may reasonably
designate.

     

    
      
        
        

      

      
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    SECTION
3

     

    Representations and
Warranties of the Company

    


    The Company hereby represents and
warrants to the Purchasers that:

    


    3.1                      Corporate Power,
Qualification and Standing.  The Company is validly existing
and in good standing under the laws of the State of Delaware and is qualified to
transact business in each jurisdiction in which its ownership of property or
conduct of activities requires such qualification.  The Company has
all requisite corporate power and authority to enter into this Agreement, to
sell the Notes, to execute and deliver the Notes and to carry out and perform
its other obligations under this Agreement and under the Notes.

    


    3.2                      Authorization; No Conflict; Enforceability.  Execution
and delivery of this Agreement, the Notes, the issuance and sale of the Notes
and the issuance of the Common Stock upon the conversion of the Notes and/or the
payment of interest on the Notes (collectively, the “Note Shares”) have been
duly authorized by all necessary corporation action of the
Company.  Performance by the Company of its obligations under this
Agreement and the Notes will not conflict with or violate the charter documents
or bylaws of the Company, or conflict with or violate, in any material respect,
(i) any indenture, loan agreement, lease, mortgage or other agreement binding on
the Company, (ii) any order of a court or administrative agency binding on the
Company, or (iii) any applicable law or governmental regulation, the effect of
any of which would have a material adverse effect on the Company or materially
impair or restrict the Company's power to perform its obligations as
contemplated hereby.  This Agreement and the Notes are valid and
binding obligations of the Company, enforceable against the Company in
accordance with their terms, except as enforcement thereof may be limited by
bankruptcy, insolvency, fraudulent conveyance and transfer, reorganization or
other similar laws affecting the enforcement of creditors’ rights generally and
by general equitable principles (regardless of whether the issue of
enforceability is considered in a proceeding in equity or at law).

    


    3.3               Valid
Issuance.  Upon the due conversion of the Notes or the issuance
by the Company of shares of Common Stock in payment of interest on the Notes,
the Note Shares issuable thereupon will be validly issued, fully paid and
non-assessable free and clear of all encumbrances and restrictions, except for
restrictions on transfer set forth in this Agreement or imposed by applicable
securities laws.  On the maturity date of the Notes, the Company shall
have a sufficient number of authorized shares of Common Stock reserved for
issuance upon the conversion of the principal of the Notes by the
Purchasers.  Prior to the maturity date of the Notes, the Company
shall take such steps as are reasonably necessary to provide for a sufficient
number of authorized shares of Common Stock available for issuance upon the
conversion of the principal of the Notes by the Purchasers.

    


    3.4               Delivery of SEC Filings;
Business.  The Company has made available to the Purchasers
through the EDGAR system, true and complete copies of the Company’s most recent
Annual Report on Form 10-KSB for the fiscal year ended December 31, 2007 (the
“10-KSB”), and all other reports filed by the Company pursuant to the 1934 Act
since the filing of the 10-KSB and prior to the date hereof (collectively, the
“SEC Filings”).

    


    3.5               Brokers and
Finders.  No person will have, as a result of the transactions
contemplated by this Agreement, any valid right, interest or claim against or
upon the Company, or any Purchaser for any commission, fee or other compensation
pursuant to any agreement, arrangement or understanding entered into by or on
behalf of the Company.

    


    
      
        
        

      

      
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    3.6               Private
Placement.  The offer and sale of the Notes to the Purchasers
as contemplated hereby are exempt from the registration requirements of the
Securities Act of 1933 (the “Securities Act”).

     

    


    SECTION
4

     

    Representations and
Warranties of the Purchasers

    


    Each Purchaser, severally and not
jointly, represents and warrants to the Company that:

    


    4.1               Purchase Entirely for Own
Account.  The Note(s) to be received by the Purchaser hereunder
will be acquired for the Purchaser’s own account, not as nominee or agent, and
not with a view to the resale or distribution of any part thereof in violation
of the Securities Act, and the Purchaser has no present intention of selling,
granting any participation in, or otherwise distributing the same in violation
of the Securities Act.  The Purchaser is not a registered broker
dealer or an entity engaged in the business of being a broker or
dealer.

    


    4.2               Investment
Experience.  The Purchaser acknowledges that it can bear the
economic risk and complete loss of its investment in the Note(s) and has such
knowledge and experience in financial or business matters that it is capable of
evaluating the merits and risks of the investment contemplated
hereby.

    


    4.3               Disclosure of
Information.  Each Purchaser has had an opportunity to receive
all additional information related to the Company requested by it and to ask
questions of and receive answers from the Company regarding the Company, its
business and the terms and conditions of the offering of the
Notes.  The Purchaser acknowledges that it has access to, and an
opportunity to inspect, the SEC Filings.

    


    4.4               Accredited
Purchaser.  The Purchaser is an accredited Purchaser as defined
in Rule 501(a) of Regulation D, as amended, under the Securities
Act.

    


    4.5               Brokers and
Finders.  No Person will have, as a result of the transactions
contemplated by this Agreement, any valid right, interest or claim against or
upon the Company or the Purchaser for any commission, fee or other compensation
pursuant to any agreement, arrangement or understanding entered into by or on
behalf of the Purchaser.

     

     

    SECTION
5

     

    Registration Rights; Legend;
Restrictions on Transfer

    


    5.1                      Registration
Rights.  The Purchasers shall have the demand registration
rights set forth on Schedule II annexed
hereto with respect to the shares of Common Stock issued upon any conversion of
principal of the Notes.  The Purchasers shall have piggyback
registration rights, but not any demand registration rights, set forth on
Schedule III annexed hereto with respect to Note Shares issued by the Company in
payment of interest on the Notes pursuant to Section 2 thereof (the “Interest
Shares”).

    


    
      
        
        

      

      
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    5.2               Legend.  Each
Note and each certificate representing Note Shares shall be stamped or otherwise
imprinted with a legend substantially in the following form (in addition to any
legend required under any applicable state securities laws):

    


    
      	
               
      

            	
              THESE
      SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR
      ANY STATE SECURITIES LAWS.  THEY MAY NOT BE SOLD OR OFFERED FOR
      SALE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THE
      SECURITIES UNDER SAID ACT AND ANY APPLICABLE STATE SECURITIES LAW OR AN
      OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS
      NOT REQUIRED.

            


    

    


        5.3               Restriction on
Transfer.  Notwithstanding anything to the contrary set forth
in this Agreement, the Notes and the Note Shares are “restricted securities”
under the Securities Act inasmuch as they are being acquired from the Company in
a transaction not involving a public offering and that under such laws and
applicable regulations such securities may not be resold without registration
under the Securities Act or pursuant to an exemption from such
registration.

     

     

    SECTION
6

     

    Miscellaneous

    


    6.1             Governing Law; Consent to
Jurisdiction; Waiver of Jury Trial.  This Agreement shall be
governed by, and construed in accordance with, the internal laws of the State of
New York without regard to the choice of law principles thereof.  Each
of the parties hereto irrevocably submits to the exclusive jurisdiction of the
courts of the State of New York located in New York County and the United States
District Court for the Southern District of New York for the purpose of any
suit, action, proceeding or judgment relating to or arising out of this
Agreement and the transactions contemplated hereby.  Service of
process in connection with any such suit, action or proceeding may be served on
each party hereto anywhere in the world by the same methods as are specified for
the giving of notices under this Agreement.  Each of the parties
hereto irrevocably consents to the jurisdiction of any such court in any such
suit, action or proceeding and to the laying of venue in such
court.  Each party hereto irrevocably waives any objection to the
laying of venue of any such suit, action or proceeding brought in such courts
and irrevocably waives any claim that any such suit, action or proceeding
brought in any such court has been brought in an inconvenient forum. EACH OF THE PARTIES HERETO WAIVES ANY
RIGHT TO REQUEST A TRIAL BY JURY IN ANY LITIGATION WITH RESPECT TO THIS
AGREEMENT AND REPRESENTS THAT COUNSEL HAS BEEN CONSULTED SPECIFICALLY AS TO THIS
WAIVER.

    


    


    
      
        
        

      

      
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    6.2             Successors and
Assigns.  Except as otherwise expressly provided herein, this
Agreement shall inure to the benefit of and be binding upon the successors and
permitted assigns of the parties.  No Purchaser shall transfer this
Agreement without the prior written consent of the Company.

    


    6.3             Entire Agreement;
Amendment.  This Agreement (including any schedules or exhibits
annexed hereto) and the other documents delivered pursuant hereto constitute the
full and entire understanding and agreement between the parties with regard to
the subjects hereof and thereof.  Neither this Agreement nor any term
hereof may be amended, waived, discharged or terminated except by a written
instrument signed by the Company and by the Purchasers holding Notes with a
majority of the outstanding principal of all Notes.

    


    6.4             Notices.  All
notices and other communications required or permitted hereunder shall be mailed
by either an express mail carrier, first-class mail, postage prepaid, or
facsimile, or delivered either by hand or by messenger, addressed (a) if to the
Purchasers, as indicated on Schedule I hereto, or
at such other address as the Purchasers shall have furnished to the Company in
writing, or (b) if to the Company, at its address set forth on the signature
page hereto (with copy to:  Eilenberg Krause & Paul LLP, 11 East
44th
Street, 19th Floor, New York, NY  10017, Attn.: Adam D. Eilenberg,
Esq.) or at such other address as the Company shall have furnished to the
Purchasers and each such other holder in writing.  All such notices or
communications shall be deemed given when actually delivered by hand, messenger,
express mail carrier or facsimile or, if mailed, three days after deposit in the
U.S. mail.

    


    6.5             Delays or
Omission.  No delay or omission to exercise any right, power or
remedy accruing to any party to this Agreement, upon any breach or default of
another party under this Agreement, shall impair any such right, power or remedy
of such party nor shall it be construed to be a waiver of any such breach or
default, or an acquiescence therein, or of or in any similar breach or default
thereafter occurring; nor shall any waiver of any single breach or default be
deemed a waiver of any other breach or default theretofore or thereafter
occurring.  All remedies, either under this Agreement or by law or
otherwise afforded to any party, shall be cumulative and not
alternative.

    


    6.6             Severability.  In
case any provision of the Agreement shall be invalid, illegal or unenforceable,
the validity, legality and enforceability of the remaining provisions shall not
in any way be affected or impaired thereby.

    


    6.7             Expenses.  The
parties hereto shall pay their own costs and expenses in connection herewith,
including, but not limited to, accountants’ and attorneys’ fees and
disbursements, in connection with any amendment, modification or waiver of this
Agreement and the Notes.

    


    
      
        
        

      

      
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    6.8             Counterparts.  This
Agreement may be executed in any number of counterparts, each of which shall be
an original, but all of which together shall constitute one
instrument.

    


    


    [Signatures
appear on next page]


    
      
        
          


           

          


          


          
            	 


          

          


        

         


      

      
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    IN
WITNESS WHEREOF, the parties have caused this Note Purchase Agreement to be
executed and delivered by their duly authorized officers or partners, as the
case may be, as of the day and year first above written.

    


    APPLIED
NEUROSOLUTIONS, INC.

    


    By:
_________________________________

    Title:
____________________________

    


    Address:
50 Lakeview Parkway, Suite 111

       Vernon
Hills, IL 60061

    


    


    PURCHASER

    


    


    ________________________________

    Signature

    


    _________________________________

    Print
Name

    


    _________________________________

    Street
Address

    


    ________________________________

    City,
State, Zip Code

    


    _________________________________

    Date

    


    _________________________________

    Principal
Amount of Note

    


    


    _________________________________

    Purchase
Price

    


    


    



    
      
        
          


           

          


          


          
            	 


          

          


        

         


      

      
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    SCHEDULE
I

    


    


    
      	
              Name
      and Address of Purchaser

            	 
      	
              Principal
      Amount of Note

            	 
      	
              Purchase
      Price

            
	 
      	 
      	
              $___________________

            	 
      	 
      
	 
      	 
      	
              $___________________

            	 
      	 
      
	 
      	 
      	
              $___________________

            	 
      	 
      
	 
      	 
      	
              $___________________

            	 
      	 
      
	 
      	 
      	
              $___________________

            	 
      	 
      
	 
      	 
      	
              $___________________

            	 
      	 
      
	 
      	 
      	
              $___________________

            	 
      	 
      
	 
      	 
      	
              $___________________

            	 
      	 
      
	 
      	 
      	
              $___________________

            	 
      	 
      


    

    


    TOTAL  $______________________

    


    


    



    
      
        
          


           

          


          


          
            	 


          

          


        

         


      

      
         
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    SCHEDULE II – DEMAND
REGISTRATION RIGHTS

    


    (a)           Demand
Registration. Upon delivery to the
Company of a written demand from the Purchaser(s) holding the Notes with a
majority of the outstanding principal thereof (“Demand Notice”), the Company
shall prepare and file with the Securities and Exchange Commission (the “Commission”) within 60 days
after the delivery of such  Demand Notice to the Company (the “Filing Deadline”) a
registration statement on Form S-1 (the “Registration Statement”),
covering the resale of all or such portion of the shares of Common Stock issued
upon any conversion of principal of the Notes as specified in the Demand Notice
(the “Registrable
Securities”) as permitted by any publicly available written or oral
guidance, comments, requirements or requests of the
Commission’s  staff and (ii) the Securities Act (the “SEC Guidance”) (provided that
the Company shall use diligent efforts to advocate with the Commission for the
registration of all of the Registrable Securities in accordance with the SEC
Guidance, including without limitation, the Manual of Publicly Available
Telephone Interpretations D.29) that are not then registered on an effective
Registration Statement for an offering to be made on a continuous basis pursuant
to Rule 415.  Such Registration Statement also shall cover, to the
extent allowable under the Securities Act and the rules promulgated thereunder
(including Rule 416), such indeterminate number of additional shares of Common
Stock resulting from stock splits, stock dividends or similar transactions with
respect to the Registrable Securities.  The Company shall include in a
Registration Statement only the Registrable Securities.  If the
initial Registration Statement covering the Registrable Securities is not filed
with the SEC on or prior to the initial Filing Deadline, the Company will make
payments to the Purchasers, as liquidated damages and not as a penalty, in an
amount equal to 1.0% of the aggregate principal amount of the Notes then
outstanding (paid on a pro-rata basis to each Purchaser based on the amount of
principal of such Purchaser’s Note(s) then outstanding) for each 30-day period
or pro rata for any portion thereof following the date by which such
Registration Statement should have been filed for which no Registration
Statement is filed with respect to the Registrable Securities.  Such
payments shall constitute the Purchasers’ exclusive remedy for such events;
provided, however, that the
Purchasers shall retain the right to pursue any equitable remedies available to
it with respect to such events. Such payments shall be made to the Purchaser in
cash.  The maximum aggregate liquidated damages payable to the
Purchasers under these registration rights provisions (including paragraphs (a)
and (c) hereof) shall be 5.0% of the aggregate purchase price paid by the
Purchasers for the Notes pursuant to the Purchase
Agreement.  Notwithstanding any other provision of this Agreement, if
any SEC Guidance sets forth a limitation on the number of Registrable Securities
permitted to be registered in the Registration Statement (and notwithstanding
that the Company used diligent efforts to advocate with the Commission for the
registration of all or a greater number of Registrable Securities), unless
otherwise directed in writing by the Purchasers as to its Registrable
Securities, the number of Registrable Securities to be registered on such
Registration Statement will be reduced pro rata among the Purchasers based on
the principal amount of their respective Notes.  In the event of such
reduction, the Company shall file one or more Registration Statements covering
the remaining Registrable Securities to the extent permitted by SEC Guidance
(and such additional Registration Statement(s) shall be filed within a
reasonable time after the earliest date permitted by SEC Guidance).

    


    (b)      Expenses. The Company
will pay all expenses associated with the registration, including filing and
printing fees, the Company’s counsel and accounting fees and expenses, costs
associated with clearing the Registrable Securities for sale under applicable
state securities laws, listing fees, but excluding fees and expenses of
counsel(s) to the Purchasers, discounts, commissions, fees of underwriters,
selling brokers, dealer managers or similar securities industry professionals
with respect to the Registrable Securities being sold.

     

    
      
        
        

      

      
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    (c)      Effectiveness.

     

        (i)     The Company
shall use reasonable best efforts to have the initial Registration Statement
required to be filed hereunder declared effective by the 120th calendar
day after the initial Filing Deadline (150th calendar
day if the SEC reviews the Registration Statement) and have any additional
Registration Statements which may be required pursuant to paragraph (a) above
declared effective by the 120th calendar
day following the date on which such additional Registration Statement is
required to be filed hereunder (each an “Effectiveness
Deadline”).  The Company shall telephonically request
effectiveness of a Registration Statement as of 5:00 p.m. New York City time on
a business day.  The Company shall immediately notify the Investor via
facsimile or by e-mail delivery of the effectiveness of a Registration Statement
on the same business day that the Company telephonically confirms effectiveness
of a Registration Statement with the Commission, which shall be the date
requested for effectiveness of such Registration Statement (“Effective Date”). The Company
shall, by 9:30 a.m. New York City time on the second business day after the
Effective Date, file a final Prospectus with the Commission as required by Rule
424.  If (A) a Registration Statement covering the Registrable
Securities is not declared effective by the SEC by the applicable Effectiveness
Deadline, or (B) after a Registration Statement has been declared effective by
the Commission, sales cannot be made pursuant to such Registration Statement for
any reason (including without limitation by reason of a stop order, or the
Company’s failure to update the Registration Statement), but excluding (x) the
inability of any Purchaser to sell the Registrable Securities covered thereby
due to market conditions, (y) an Allowed Delay (as defined below) and (z)
the 45 day period following the date on which the Company files its annual
report on Form 10-K and during which the Company’s post effective amendment to
such Registration Statement has not yet been declared effective, then
the Company will make payments to the Purchasers, as liquidated damages and not
as a penalty, in an amount equal to 1.0%, of the aggregate principal amount of
the Notes  then outstanding (paid on a pro-rata basis to each
Purchaser based on the amount of principal of such Purchaser’s Note(s) then
outstanding) for each 30- day period or pro rata for any portion thereof
following the date by which such Registration Statement should have been
effective (the “Blackout
Period”). Such payments shall constitute the Purchasers’ exclusive remedy
for such events; provided, however, that the
Purchasers shall retain the right to pursue any equitable remedies available to
it with respect to such events. The amounts payable as liquidated damages
pursuant to this paragraph shall be paid monthly within three (3) Business Days
of the last day of each month following the commencement of the Blackout Period
until the termination of the Blackout Period.  Such payments shall be
made to the Investor in cash. The maximum aggregate liquidated damages payable
to the Purchasers under these registration rights provisions (including
paragraphs (a) and (c) hereof) shall be 5.0% of the aggregate purchase price
paid by the Purchasers for the Notes pursuant to the Purchase
Agreement.

     

            (ii)     Not more than
twenty (20) consecutive days or for a total of not more than forty-five (45)
days in any twelve (12) month period, the Company may delay the disclosure of
material non-public information concerning the Company, by suspending the use of
any prospectus included in any registration contemplated by these registration
rights provisions containing such information, the disclosure of which at the
time is not, in the good faith opinion of the Company, in the best interests of
the Company (an “Allowed
Delay”); provided, that the
Company shall promptly (a) notify the Purchasers in writing of the existence of
(but in no event, without the prior written consent of any such Purchaser, shall
the Company disclose to the Investor any of the facts or circumstances
regarding) material non-public information giving rise to an Allowed Delay, (b)
advise the Purchasers in writing to cease all sales under the Registration
Statement until the end of the Allowed Delay and (c) use best efforts to
terminate an Allowed Delay as promptly as practicable.

    


    
      
        
        

      

      
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    (d)           Company Obligations.
The Company will use reasonable best efforts to effect the registration of the
Registrable Securities in accordance with the terms hereof, and pursuant thereto
the Company will, as expeditiously as possible:

     

                (i)           use
reasonable best efforts to cause such Registration Statement to become effective
and to remain continuously effective for a period that will terminate upon the
earliest of (i) the first anniversary of the Maturity Date (as defined in the
Notes), (ii) the date on which all Registrable Securities covered by such
Registration Statement as amended from time to time, have been sold, and (iii)
the date on which all Registrable Securities covered by such Registration
Statement may be sold pursuant to Rule 144(b)(1)(i) (the “Effectiveness Period”)
and advise the Purchasers in writing when the Effectiveness Period has
expired;

     

     
(ii)      prepare and
file with the SEC such amendments and post-effective amendments to a
Registration Statement and the prospectus as may be necessary to keep such
Registration Statement effective for the applicable Effectiveness Period and to
comply with the provisions of the Securities Act and the Exchange Act with
respect to the distribution of all of the Registrable Securities covered
thereby;

     

     
(iii)            use
reasonable best efforts to (i) prevent the issuance of any stop order or other
suspension of effectiveness and, (ii) if such order is issued, obtain the
withdrawal of any such order at the earliest possible moment;

     

     
(iv)           otherwise
use reasonable best efforts to comply with all applicable rules and regulations
of the SEC under the Securities Act and the 1934 Act, take such other actions as
may be reasonably necessary to facilitate the registration of the Registrable
Securities hereunder;

     

    (e)           Obligations of the
Purchasers.

     

    (i)  The
Purchasers shall furnish in writing 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 the registration of such Registrable Securities and shall
execute such documents in connection with such registration as the Company may
reasonably request.

     

    
      
        
        

      

      
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    (ii)           The
Purchasers, by their respective 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 any such Purchaser has notified the Company in writing of its
election to exclude all of its Registrable Securities from such Registration
Statement.

     

    (iii)           The
Purchasers agree that, upon receipt of any notice from the Company of either (i)
the commencement of an Allowed Delay or notice from the Company that a
Registration Statement contains an untrue statement of a material fact or omits
to state any material fact required to be stated therein or necessary to make
the statements therein not misleading in light of the circumstances then
existing, the Purchasers will immediately discontinue disposition of Registrable
Securities pursuant to any Registration Statement covering such Registrable
Securities, until the Purchasers’ receipt of the copies of the supplemented or
amended prospectus filed with the Commission and until any related
post-effective amendment is declared effective.

     

    



    
      
        
          


           

          


          


          
            	 


          

          


        

         


      

      
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    SCHEDULE III – PIGGYBACK
REGISTRATION RIGHTS

    


    


    Piggyback
Registration.   

    


    (a)           If
(and on each occasion that) the Company proposes to register any of its
securities under the Securities Act, either for the Company’s own account or for
the account of any of its security holders (each such registration not withdrawn
or abandoned prior to the effective date thereof, a “Piggyback
Registration”), the Company will give written notice to each of the
Purchasers at least ten (10) business days prior to the anticipated filing date
of such Piggyback Registration. Notwithstanding the foregoing, the Company will
not be obligated to give notice to Purchasers as to or to include any Interest
Shares in any registration (i) on Form S-8 or similar limited-purpose form of
registration statement effected solely to implement an employee benefit plan,
(ii) on Form S-4 or similar limited-purpose form of registration statement
effected solely to implement an acquisition or (iii) any registration for which
the Company is not permitted to include the securities of other persons (such as
the Interest Shares) , whether pursuant to contract, law or
otherwise.

     

    (b)           Subject
to the provisions contained in paragraphs (c) and (d) of this Schedule III and
in the last sentence of this paragraph (b): (A) the Company will be obligated to
include in each Piggyback Registration all Interest Shares with respect to which
the Company receives, within 10 business days after the date on which the
Company gives written notice of such Piggyback Registration to the Purchasers
pursuant to Section (a) above, the written requests of such Purchasers for
inclusion in such Piggyback Registration, and (B) the Company will use its
reasonable efforts to effect promptly the registration of all such Interest
Shares. The Company and its underwriters will be permitted, on any registration
initiated by the Company, to terminate or withdraw such registration or to
reduce the total number of shares proposed to be registered
thereunder.

    


    (c)           
If a Piggyback Registration is an underwritten registration, and the managing
underwriters thereof give written advice to the Company that the total amount of
securities, including the Interest Shares and other securities to be registered
pursuant to the Piggyback Registration exceeds the amount of securities that the
underwriters reasonably believe compatible with the success of the offering (the
“Underwriters’ Maximum
Number”), then:

    


    (i)  If
such registration was initiated by the Company, (x) the Company will be entitled
to include in such registration that number of securities that the Company
proposes to offer and sell for its own account in such registration and which
does not exceed the Underwriters’ Maximum Number and, to the extent such
securities are less than the Underwriters’ Maximum Number (y) the Company will
be obligated to include in such registration that number of Interest Shares of
the Company that are requested by the Purchasers and by other persons and which
does not exceed the difference between the Underwriters’ Maximum Number and the
number of securities of the Company that the Company is entitled under clause
(x) above to include in such registration, and such number of securities of the
Company will be allocated pro
rata among the Purchasers and other persons in proportion to the number
of securities of the Company held by each such Purchaser or other
person.

     

    
      
        
        

      

      
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    (ii)  If
such registration was initiated by a person other than the Company or a
Purchaser, (w) the Company will be obligated to include in such registration
that number of securities that are requested by the person(s) initiating such
registration and which is not more than the Underwriters’ Maximum Number, and
such number of securities will be allocated pro rata among such other
person(s) in proportion to the number of securities of the Company held by each
such other person; (x) the Company will be entitled to include in such
registration that number of securities that the Company proposes to offer and
sell for its own account in such registration and which does not exceed the
difference between the Underwriters’ Maximum Number and the number of securities
that the Company is required under clause (w) above to include in such
registration; (y) and thereafter the Company will be obligated to include in
such registration that number of Interest Shares that are requested by the
Purchasers requesting registration and which is not more than the Underwriters’
Maximum Number, and such number of securities will be allocated pro rata among the Purchasers
requesting registration in proportion to the number of Interest Shares held by
each such Purchaser; and (z) if the Underwriters’ Maximum Number exceeds the sum
of the number of securities that the Company is obligated to include in such
registration for the account of other persons pursuant to clause (w) above and
the number of securities that the Company proposes to offer and sell for its own
account in such registration, then the Company may include in such registration
that number of other securities that persons referred to in clause (w) above
have requested be included in such registration and which is not greater than
such excess.

     

    For
purposes of this Section (c), the numbers of securities of the Company held by
any Purchaser or other person will be calculated on a fully diluted basis
assuming the full exercise, conversion, or exchange of all outstanding
securities that are exercisable, convertible or exchangeable for shares of the
Company’s Common Stock.

     

    (d)           In
any Piggyback Registration, the Company will select, in its sole discretion, the
investment bankers and managing underwriters in such registration.

     

    (e)           Each
Purchaser, if the Company or the managing underwriters so request of such
Purchasers in connection with such registration, will not, without the prior
written consent of the Company or such underwriters, effect any sale or other
distribution of any equity securities of the Company, including any sale
pursuant to Rule 144, during the seven days prior to, and during the 180-day
period, commencing on the effective date of such underwritten registration,
except pursuant to such underwritten registration.

    


    


    


    



    
      
        
          


           

          


          


          
            	
                     

                  


          

          


        

         


      

      
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