exv10w46



 





Exhibit 10.46



THIS INSTRUMENT AND THE RIGHTS AND OBLIGATIONS EVIDENCED HEREBY ARE SUBORDINATE IN THE MANNER AND
TO THE EXTENT SET FORTH IN THAT CERTAIN SUBORDINATION AGREEMENT (AS AMENDED, FROM TIME TO TIME, THE
“SUBORDINATION AGREEMENT”) DATED AS OF JUNE 1, 2007, AMONG BANK OF AMERICA, N.A., LCC
INTERNATIONAL, INC. AND CERTAIN OF ITS SUBSIDIARIES AND WIRELESS FACILITIES, INC., AND THE HOLDER
OF THIS NOTE, BY ITS ACCEPTANCE HEREOF, IRREVOCABLY AGREES TO BE BOUND BY THE PROVISIONS OF THE
SUBORDINATION AGREEMENT.




SUBORDINATED PROMISSORY NOTE




			
	$21,583,651
	 	June 1, 2007






          FOR VALUE RECEIVED, LCC International, Inc., a Delaware corporation (the “Maker”),
promises to pay to SPCP Group, L.L.C., a Delaware limited liability company (the “Holder”),
at Two Greenwich Plaza, First Floor, Greenwich, CT 06830, or at such other place as the Holder of
this Note may from time to time designate, on June 1, 2010 (the “Maturity Date”), the
principal amount of Twenty-One Million Five Hundred Eighty-three Thousand Six Hundred Fifty-one
Dollars ($21,583,651) (which amount may be increased or decreased from time to time without further
consent of the Maker and the Holder pursuant to the terms of the Purchase Agreement, as defined
below, as reflected on Schedule 1 attached hereto), or such lesser amount as may be
outstanding under this Note on the Maturity Date, together with interest on the unpaid principal
amount hereof from the date hereof, until paid in full, said interest to be computed and paid as
set forth below. For purposes of clarification, (i) any increase to the principal amount under
this Note pursuant to the terms of the Purchase Agreement shall be deemed to be outstanding as of
the date hereof and interest shall accrue on such principal amount from the date of this Note and
(ii) any decrease to the principal amount under this Note pursuant to the terms of the Purchase
Agreement shall be deemed to be made as of the date hereof and the interest under this Note shall
be calculated accordingly. All payments hereunder shall be made in lawful money of the United
States of America.




          Interest on the unpaid principal amount hereof shall be computed on the basis of actual days
elapsed over a 360-day year, at a floating rate of one-month LIBOR (LIBOR to reset on the first
Business Day of each month) plus





(a) from the date of this Note to and including June 30, 2007, 4% per annum,




(b) from July 1, 2007 to and including July 31, 2007, 5% per annum,




(c) from August 1, 2007 to and including August 31, 2007, 6% per annum,




(d) from September 1, 2007 to and including September 30, 2007, 7% per annum,



 









 






(e) from October 1, 2007 to and including December 31, 2007, 8% per annum,




(f) from January 1, 2008 to and including June 30, 2008, 9% per annum,




(g) from July 1, 2008 to and including December 31, 2008, 10% per annum,




(h) from January 1, 2009 to and including June 30, 2009, 11% per annum,




(i) from July 1, 2009 to and including December 31, 2009, 12% per annum,




(j) from January 1, 2010 to (but not including) the Maturity Date, 13% per annum, and




(k) if the principal amount and interest accrued thereon under this Note is not paid in full
on or prior to the Maturity Date, an increase of 1% per annum to the then applicable rate
determined hereunder for each six month period beginning on July 1 and January 1 of each
year, until the Note is paid in full.


For purposes of this Note, “LIBOR” means, for any interest period described above, the rate
per annum equal to the British Bankers Association LIBOR Rate (“BBA LIBOR”), as published
by Reuters at approximately 11:00 a.m., London time, two Business Days prior to the commencement of
such interest period, for dollar deposits (for delivery on the first day of such interest period)
with a term most closely approximating such interest period.




          Subject to the terms of the Subordination Agreement, interest payments shall be due (i) with
respect to the period commencing on the Closing Date and ending on June 30, 2007, in arrears on the
fifth (5th) Business Day following the date on which the Maker shall have delivered to
the lenders the financial statements for, and the Compliance Certificate (as defined in the Credit
Agreement (as defined below)) with respect to, calendar quarter ended June 30, 2007 required to be
delivered under the Credit Agreement and (ii) with respect to each calendar quarter commencing on
or after July 1, 2007, in arrears on the fifth (5th) Business Day following the date on
which the Maker shall have delivered to the Lenders the financial statements for, and the
Compliance Certificate with respect to, such calendar quarter required to be delivered under the
Credit Agreement (each an “Interest Payment Date”). All accrued and unpaid interest shall
be paid in full on the Maturity Date.




          In the event the Maker fails to pay interest under this Note within five (5) Business Days
following the date on which the Maker is required to deliver quarterly or annual financial
statements, as applicable, under the Credit Agreement (i) with respect to any two (2) consecutive
Interest Payment Dates during the period commencing on July 1, 2007 and ending on June 30, 2008 or
(ii) with respect to any one Interest Payment Date occurring after July 1, 2008, the Holder shall
be entitled, by delivery of written notice to the Maker within forty-five (45) days following such
Interest Payment Date (the “Election Notice”), to convert the total amount of interest due
on such Interest Payment Date, or in the case of the foregoing clause (i), such two (2) Interest
Payment Dates (the “Total Unpaid Interest”) into a number of shares of the Maker’s Class A
Common Stock, par value $0.01 per share (the “Maker Common Stock”) equal to the quotient
obtained by dividing (a) the Total Unpaid Interest on the date of the Election




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Notice by (b) the average of the closing prices of the Maker Common Stock as reported on the NASDAQ
Global Market or other national stock exchange for the last ten (10) trading day period ending two
(2) days prior to the delivery of the Election Notice in accordance with the terms hereof (the
“Common Stock Price”). No fractional shares will be issued upon the conversion of the
Total Unpaid Interest. In lieu of any fractional shares to which Holder would otherwise be
entitled, Maker shall pay Holder in cash that amount of the unconverted Total Unpaid Interest equal
to such fraction multiplied by the Common Stock Price. Maker shall issue and deliver to Holder
within seven (7) Business Days after the date of the Election Notice a certificate for the number
of shares of Maker Common Stock to which Holder is entitled upon such conversion of the Total
Unpaid Interest, including a check payable to Holder for any cash amounts payable in lieu of
fractional shares as described above. Holder’s Election Notice shall contain such representations
as the Maker shall reasonably request to satisfy itself that the issuance of such shares to the
Holder is exempt from registration under the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder (the “1933 Act”) and applicable state securities laws.
Notwithstanding the foregoing, in accordance with NASDAQ Marketplace Rule 4350(i) (the
“Marketplace Rule”), Maker shall not issue any shares which shall result in the aggregate
number of shares of Maker Common Stock issued pursuant to this Note to exceed of 19.999% of the
shares of Maker Common Stock outstanding on the date hereof (taking into account any stock splits
or reverse stock splits in the Maker Common Stock occurring after the date hereof) without first
obtaining the required stockholder consent pursuant to the Marketplace Rule; provided, however,
that Maker shall use its commercially reasonable best efforts to obtain any required stockholder
approval as soon as possible following receipt of any Election Notice. Any shares of Maker Common
Stock issued pursuant to this paragraph, including any Maker Common Stock issued as a dividend or
other distribution with respect to, or in exchange for, or in replacement of such Maker Common
Stock, shall be subject to registration for resale under the 1933 Act upon the terms and conditions
set forth in Exhibit A hereto.




          Subject to the terms of the Subordination Agreement, the unpaid principal amount of, and any
accrued interest on, this Note must be prepaid:




     (a) with the one hundred percent (100%) of the Net Cash Proceeds received by the Maker or its
Subsidiaries (as defined in the Credit Agreement), until this Note is paid in full, in respect of
any issuance of equity security for cash (other than pursuant to employee benefit plans) or debt
financing that is subordinated to the obligations of the Maker and its Subsidiaries under the
Credit Agreement, other than (i) any debt financing under the Credit Agreement, (ii) a refinancing
of existing debt financing or (iii) debt financing for working capital of one or more Foreign
Subsidiaries; and



     (b) upon a Change of Control (as defined below) of the Maker, provided that no event of
default under the Credit Agreement (other than an event of default as a result of such Change of
Control) has occurred and is continuing.


Any prepayment, including under subsections (a) or (b) above, shall be without premium or penalty.




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          Subject to the Subordination Agreement, the unpaid principal amount of, and any accrued
interest on, this Note may be prepaid in whole or in part at any time or times without premium or
penalty.




          For purposes of this Note, a “Change of Control” means (a) an event or series of
events by which any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder
(the “1934 Act”) but excluding any employee benefit plan of such person or its
subsidiaries, and any person or entity acting in its capacity as trustee, agent or other fiduciary
or administrator of any such plan) becomes the “beneficial owner” (as defined in Rules 13d-3 and
13d-5 under the Securities Exchange Act of 1934, except that a person or group shall be deemed to
have “beneficial ownership” of all Equity Interests that such person or group has the right to
acquire, whether such right is exercisable immediately or only after the passage of time (such
right, an “option right”)), directly or indirectly, of fifty-one percent (51%) of the Equity
Interests of the Maker entitled to vote for members of the board of directors or equivalent
governing body of the Maker on a fully diluted basis (and taking into account all such securities
that such person or group has the right to acquire pursuant to any option right) or (b) the sale or
transfer of all or substantially all of the assets of the Maker, whether in a single transaction or
a series of related transactions.




          For purposes of this Note, the following defined terms shall have the meanings provided for
such terms in that certain Amended and Restated Credit Agreement (as amended, modified, restated,
supplemented or refinanced from time to time, the “Credit Agreement”), dated as of May 29,
2007, among the Maker, certain Subsidiaries of the Maker, the lenders party thereto and Bank of
America, N.A. as administrative agent, as in effect on May 29, 2007: “Net Cash Proceeds,”
“Foreign Subsidiaries” and “Equity Interests.”




          Each prepayment shall be applied first to the payment of all interest and other amounts
accrued hereunder on the date of any such prepayment, and the balance of any such prepayment shall
be applied to the principal amount hereof. No prepayment shall entitle any person to be
subrogated to the rights of the Holder unless and until this Note has been paid in full.




          This Note is made and delivered pursuant to and in accordance with the terms and conditions of
that certain Asset Purchase Agreement (the “Purchase Agreement”), dated as of May 29, 2007,
by and between the Maker and the Holder and is subject to the terms and conditions of the Purchase
Agreement, which are, by this reference incorporated herein and made a part hereof. Capitalized
terms used but not defined herein shall have the meanings given to such terms in the Purchase
Agreement.




          So long as any principal or interest payments are outstanding hereunder, the Maker agrees to
provide to the Holder of this Note, at such Holder’s election, the following:




     (a) A copy of each quarterly and annual Compliance Certificate delivered by the Maker to Bank
of America, N.A. pursuant to the requirements of the Credit Agreement;



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     (b) Notice of any default or event of default given or received under the Credit Agreement;
and



     (c) In the event that the Maker ceases to be a public company, (i) a consolidated and
consolidating balance sheet of the Maker and its Subsidiaries as of the end of each fiscal year
thereafter, and the related consolidated and consolidating statements of income or operations,
shareholders’ equity and cash flows for such fiscal year, and (ii) a consolidated balance sheet of
the Maker and its Subsidiaries as of the end of each of the first three fiscal quarters of each
fiscal year thereafter, and the related consolidated statements of income or operations,
shareholders’ equity and cash flows for such fiscal year.



          The occurrence of any one or more of the following events with respect to the Maker shall
constitute an event of default (“Event of Default”) hereunder:




     (a) Failure to pay, when due, the principal or any interest payable hereunder, and continuance
of such failure for fifteen (15) business days after the Holder notifies the Maker thereof in
writing; provided, however, that the exercise by the Maker in good faith of its right of setoff
pursuant to this Note, whether or not ultimately determined to be justified, shall not constitute
an Event of Default;



     (b) The admission by the Maker in writing of its inability to pay its debts as such debts
become due, or the making by the Maker of any general assignment for the benefit of creditors;



     (c) The commencement by the Maker of any case, proceeding, or other action seeking
reorganization, arrangement, adjustment, liquidation, dissolution, or composition of it or its
debts under any law relating to bankruptcy, insolvency, or reorganization, or relief of debtors, or
seeking appointment of a receiver, trustee, custodian, or other similar official for it or for all
or any substantial part of its property; or



     (d) The commencement of any case, proceeding, or other action against the Maker seeking to
have any order for relief entered against the Maker as debtor, or seeking reorganization,
arrangement, adjustment, liquidation, dissolution, or composition of the Maker or its debts under
any law relating to bankruptcy, insolvency, reorganization, or relief of debtors, or seeking
appointment of a receiver, trustee, custodian, or other similar official for the Maker or for all
or any substantial part of the property of the Maker, and (i) the Maker shall, by any act or
omission, indicate its consent to, approval of, or acquiescence in such case, proceeding, or
action, or (ii) such case, proceeding, or action results in the entry of an order for relief which
is not fully stayed within seven (7) Business Days after the entry thereof, or (iii) such case,
proceeding, or action remains undismissed for a period of sixty (60) days or more or is dismissed
or suspended only pursuant to Section 305 of the United States Bankruptcy Code or any corresponding
provision of any future United States bankruptcy law.



          Subject to the subordination provisions of the Subordination Agreement, upon the occurrence of
any such Event of Default hereunder, the entire principal amount hereof, and all accrued and unpaid
interest thereon, shall, at the option of the Holder, be accelerated, and shall thereupon become
immediately due and payable and the Holder shall be entitled to exercise any




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one or more of the rights and remedies provided by applicable law; provided that in the
case of clauses (b), (c) and (d) above, such acceleration shall occur automatically without demand
or notice. Failure to exercise said option or to pursue such other remedies shall not constitute a
waiver of such option or such other remedies or of the right to exercise any of the same in the
event of any subsequent Event of Default hereunder.




          The Holder of this Note, by acceptance hereof, agrees that the Note and the indebtedness
represented hereby, and the payment of principal of and all present and future interest hereon, is
expressly subordinated and junior in right of payment to the prior payment in full of the Senior
Debt (as defined in the Subordination Agreement).




          The Holder of this Note may at any time assign all (but not less than all) of its rights and
obligations under this Note to an assignee; provided, however, that prior to June 1, 2008, the
Holder may assign its rights and obligations under this Note to an assignee only upon (a) a
consolidation or merger of the Holder with and into another entity or (b) a sale by the Holder of
all or substantially all of its assets. Subject to the preceding sentence, this Note will be
binding in all respects upon the Maker and inure to the benefit of the Holder and its successors
and assigns.




          Any payment on this Note coming due on a Saturday, a Sunday, or a day which is a legal holiday
in the place at which a payment is to be made hereunder shall be made on the next succeeding day
which is a Business Day, and any such extension of the time of payment shall be included in the
computation of interest hereunder.




          Except as explicitly provided herein, the Maker hereby waives presentment, protest, demand,
notice of dishonor, and all other notices, and all defenses and pleas on the grounds of any
extension or extensions of the time of payments or the due dates of this Note, in whole or in part,
before or after maturity, with or without notice.




          No single or partial exercise by the Holder of any right hereunder shall preclude any other or
further exercise thereof or the exercise of any other rights. No delay or omission on the part of
the Holder in exercising any right hereunder shall operate as a waiver of such right or of any
other right under this Note.




          This Note and all agreements between the Maker and the Holder relating hereto are hereby
expressly limited so that in no contingency or event whatsoever, whether by reason of acceleration
or otherwise, shall the amount paid or agreed to be paid to the Holder for the use, forbearance or
detention of money hereunder exceed the maximum amount permissible under applicable law. If from
any circumstance whatsoever fulfillment of any provision hereof, at the time performance of such
provision shall be due, shall involve transcending the limit of validity prescribed by law, then,
ipso facto, the obligation to be fulfilled shall be reduced to the limit of such
validity, and if from any such circumstance the Holder shall ever receive interest, or anything
which might be deemed interest under applicable law, which would exceed the highest lawful rate,
such amount which would be excessive interest shall be applied to the reduction of the principal
amount owing on account of this Note and not to the payment of interest, or if such excessive
interest exceeds the unpaid balance of principal of this Note, such excess shall be




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refunded to the Maker. All sums paid or agreed to be paid to the Holder for the use, forbearance
or detention of the indebtedness of the Maker to the Holder shall, to the extent permitted by
applicable law, be deemed to be amortized, prorated, allocated and spread throughout the full term
of such indebtedness until payment in full so that the actual rate of interest on account of such
indebtedness is uniform throughout the term thereof. The terms and provisions of this paragraph
shall control and supersede every other provision of this Note and all other agreements between the
Maker and the Holder.




          Except as otherwise provided in Exhibit A, this Note shall be governed by the laws of
the State of New York, without regard to the conflicts of law principles that would result in the
application of any law other than the law of the State of New York.




          Except as otherwise provided in this Note, including without limitation in Exhibit A,
(a) all notices, communications and deliveries required or made pursuant to this Note shall be made
in accordance with the procedures specified in Section 12.1 of the Purchase Agreement and
(b) any dispute arising out of or relating to this Note shall be resolved in accordance with the
procedures specified in Section 12.7 of the Purchase Agreement.




          This Note has been issued by the Maker pursuant to the Assignment Agreement, dated as of July
3, 2007, by and among Wireless Facilities, Inc., a Delaware corporation (“WFI”), the Holder
and the Maker and, with respect to certain provisions thereof, Bank of America, N.A.. (the
“Assignment Agreement”) in exchange for the “Note” assigned by WFI to the Holder pursuant
to the Assignment Agreement.





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          IN WITNESS WHEREOF, the Maker has executed this Note as of the date first set forth above.




	 	 	 	 	 
	 	LCC INTERNATIONAL, INC.

 	 
	 	By:  	/s/ LOUIS SALAMONE, JR.
 	 
	 	 	Name:  	Louis Salamone, Jr. 	 
	 	 	Title:  	Executive Vice President, CFO 	 
	 



Acknowledged and Agreed

as of the date first set forth above:




	 	 	 	 	 
	SPCP GROUP, L.L.C.

 	 
	By:  	/s/ RICHARD PETRILLI
 	 
	 	Name: Richard Petrilli	 	 
	 	           Authorized Signatory 	 
	 
















 





Exhibit A




HOLDER REGISTRATION RIGHTS




     1. Certain Definitions.



     Capitalized terms used herein which are defined in the main text of this Note shall have the
meanings set forth in therein, unless otherwise defined herein. As used in this Exhibit A,
the following terms shall have the following meanings:



     “Affiliate” means, with respect to any Person, any other Person which directly or
indirectly controls, is controlled by, or is under common control with, such Person.



     “Business Day” means a day, other than a Saturday or Sunday, on which banks in New
York City are open for the general transaction of business.



     “Common Stock” means the Maker’s Common Stock.



     “Company” means LCC International, Inc., a Delaware corporation.



     “Investors” means the Holder and any Affiliate or permitted transferee of any Holder
who is a subsequent holder of any Registrable Securities.



     “Person” means any individual, corporation, partnership, joint venture, limited
liability company, trust, unincorporated organization or governmental entity.



     “Proceeding” means an action, claim, suit, investigation or proceeding (including,
without limitation, an investigation or partial proceeding, such as a deposition), whether
commenced or threatened.



     “Prospectus” means the prospectus included in any Registration Statement, as amended
or supplemented by any prospectus supplement, with respect to the terms of the offering of any
portion of the Registrable Securities covered by such Registration Statement and by all other
amendments and supplements to the prospectus, including post-effective amendments and all material
incorporated by reference in such prospectus.



     “Register,” “registered” and “registration” refer to a registration
made by preparing and filing a Registration Statement or similar document in compliance with the
1933 Act, and the declaration or ordering of effectiveness of such Registration Statement or
document.



     “Registrable Securities” means (i) the Shares, and (ii) any other securities issued or
issuable with respect to or in exchange for Registrable Securities; provided, that, a security
shall cease to be a Registrable Security (A) upon sale pursuant to a Registration Statement or Rule
144 under the 1933 Act, or (B) at such time that all such securities are eligible for sale by the
Investors pursuant to Rule 144(k).



     “Registration Statement” shall mean any registration statement of the Company filed
under the 1933 Act that covers the resale of any of the Registrable Securities pursuant to the
provisions of this Exhibit A (including the Registration Statement referred to in Section 2
of this Exhibit A), amendments and supplements to such Registration Statement(s), including
the Prospectus, post-effective amendments, all exhibits and all material filed and incorporated by
reference in such Registration Statement.



     “Required Investors” mean the Investors holding a majority of the Registrable
Securities.



 









 





     “Rule 144”, “Rule 144(k)”, “Rule 172”, “Rule 401”, “Rule
415”, “Rule 416”, “Rule 424(b)(3)”, “Rule 429” and “Rule 461”
mean Rule 144, Rule 144(k), Rule 172, Rule 401, Rule 415, Rule 416, Rule 424(b)(3), Rule 429 and
Rule 461, respectively, each as promulgated by the SEC pursuant to the 1933 Act, as such Rule may
be amended from time to time, or any similar rule or regulation hereafter adopted by the SEC having
substantially the same effect as such Rule.



     “SEC” means the U.S. Securities and Exchange SEC.” 



     “Shares” means the shares of Common Stock issued pursuant to this Note.



     2. Registration.



          (a) Registration Statement. Within 45 days following the delivery by an Investor of
an Election Notice with respect to any Shares (the “Filing Deadline”), the Company shall
prepare and file with the SEC a registration statement covering all Registrable Securities for a
secondary or resale offering to be made on a continuous basis pursuant to Rule 415. Such
registration statement shall be on Form S-3 or on such other form appropriate for such purpose (the
“Registration Statement”) and shall include the plan of distribution attached hereto as
Schedule 1. Such Registration Statement also shall cover, to the extent allowable under
the 1933 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. Such Registration Statement shall not
include any shares of Common Stock or other securities for the account of any other holder without
the prior written consent of the Required Investors, except for shares of Common Stock held by the
Company’s stockholders having “piggyback” registration rights expressly set forth in registration
rights agreements entered into by the Company prior to the date of this Note (the “Piggyback
Shares”); provided, however, that the inclusion of any Piggyback Shares on the Registration
Statement shall not result in the exclusion of the Registrable Securities from any such
Registration Statement. A copy of the initial filing of the Registration Statement (and each
pre-effective amendment thereto) shall be provided to the Investors and their counsel prior to
filing.




          (b) Expenses. The Company will pay all expenses incurred by it associated with the
Registration Statement or incident to its performance or compliance with this Exhibit A,
including filing and printing fees, the Company’s counsel and accounting fees and expenses, NASD
(as defined below) and Nasdaq filing fees, and costs associated with clearing the Registrable
Securities for sale under applicable state securities laws, but the Company shall not be liable for
fees and expenses incurred by the Investors (including any Investors’ counsel fees), or any
discounts, commissions, fees of underwriters, selling brokers, dealer managers or similar
securities industry professionals with respect to the Registrable Securities being offered unless
such underwriter, broker or similar industry professional is engaged at the sole election of the
Company.




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          (c) Effectiveness.




          (i) The Company shall use reasonable best efforts to have the Registration Statement declared
effective prior to 45 days following the Filing Deadline; provided, however, that, if the SEC
reviews and has written comments to the filed Registration Statement that would require the filing
of a pre-effective amendment thereto with the SEC, then the date under this clause (c)(i) shall be
the 75th day following the Filing Deadline. The Company shall notify the Investors by
facsimile or e-mail as promptly as practicable, and in any event, within twenty-four (24) hours,
after the Registration Statement is declared effective and shall simultaneously provide the
Investors with copies of any related Prospectus to be used in connection with the sale or other
disposition of the securities covered thereby.




          (ii) For not more than thirty (30) consecutive days or for a total of not more than sixty (60)
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 this Section, if such disclosure 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 Investors in writing of the existence of
(but in no event, without the prior written consent of an Investor, shall the Company disclose to
such Investor any of the facts or circumstances regarding) an Allowed Delay, (b) advise the
Investors in writing to cease all sales under the Registration Statement until the end of the
Allowed Delay and (c) use reasonable best efforts to terminate an Allowed Delay as promptly as
practicable.




     3. 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 (but subject to Section 2(c)(ii) of this
Exhibit A):



          (a) (i) furnish to the Investors, copies of all such documents proposed to be filed, which
documents will be subject to their review of such Investors, and (ii) cause its officers and
directors, counsel and independent certified public accountants to respond to such inquiries as
shall be necessary, to conduct a reasonable review of such documents. The Company shall not file
the Registration Statement or any such Prospectus or any amendments or supplements thereto to which
the holders of a majority of the Registrable Securities shall reasonably object in writing within
three (3) Business Days of their receipt thereof.




          (b) respond as promptly as possible to any comments received from the SEC with respect to the
Registration Statement or any amendment thereto and as promptly as possible provide the Investors
true and complete copies of all correspondence from and to the SEC relating to the Registration
Statement.




          (c) notify the Investors as promptly as possible (and, in the case of (i)(A) below, not less
than three (3) days prior to such filing) and (if requested by any such Person) confirm such notice
in writing no later than two (2) Business Days following the day (i)(A) when a Prospectus or any
Prospectus supplement or post-effective amendment to the Registration Statement is filed; (B) when
the SEC notifies the Company whether there will be a




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“review” of such Registration Statement and whenever the SEC comments in writing on such
Registration Statement and (C) with respect to the Registration Statement or any post-effective
amendment, when the same has become effective; (ii) of any request by the SEC or any other Federal
or state governmental authority for amendments or supplements to the Registration Statement or
Prospectus or for additional information; (iii) of the issuance by the SEC of any stop order
suspending the effectiveness of the Registration Statement covering any or all of the Registrable
Securities or the initiation or threatening of any Proceedings for that purpose; (iv) if at any
time any of the representations and warranties of the Company contained in any agreement
contemplated hereby ceases to be true and correct in all material respects; (v) of the receipt by
the Company of any notification with respect to the suspension of the qualification or exemption
from qualification of any of the Registrable Securities for sale in any jurisdiction, or the
initiation of any Proceeding for such purpose; and (vi) of the occurrence of any event or passage
of time that makes the financial statements included in a Registration Statement ineligible for
inclusion therein or any statement made in the Registration Statement or Prospectus or any document
incorporated or deemed to be incorporated therein by reference untrue in any material respect or
that requires any revisions to the Registration Statement, Prospectus or other documents so that,
in the case of the Registration Statement or the Prospectus, as the case may be, it will not
contain any untrue statement of a material fact or omit to state any 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.




          (d) if requested by the Required Investors, (i) promptly incorporate in a Prospectus
supplement or post-effective amendment to the Registration Statement such information as the
Company reasonably agrees should be included therein and (ii) make all required filings of such
Prospectus supplement or such post-effective amendment as soon as practicable after the Company has
received notification of the matters to be incorporated in such Prospectus supplement or
post-effective amendment.




          (e) promptly deliver to each Investor, without charge, at least one conformed copy of the
Registration Statement and as many copies of the Prospectus or Prospectuses (including each form of
prospectus) and each amendment or supplement thereto as such Persons may reasonably request




          (f) cooperate with the Investors to facilitate the timely preparation and delivery of
certificates representing Registrable Securities to be sold pursuant to a Registration Statement,
which certificates, to the extent permitted by applicable federal and state securities laws, shall
be free of all restrictive legends, and to enable such Registrable Securities to be in such
denominations and registered in such names as any Investor may request in connection with any sale
of Registrable Securities.




          (g) 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 earlier of (i) the date
on which all Registrable Securities covered by such Registration Statement as amended from time to
time, have been sold, and (ii) the date on which all Registrable Securities covered by such
Registration Statement may be sold pursuant to Rule 144(k) (and the Company shall use reasonable
best efforts to provide a written opinion letter from Company



4









 






counsel to the Company’s transfer agent to such effect and to remove the restrictive legend
from the certificates of the Registrable Securities) (the “Effectiveness Period”) and
advise the Investors in writing when the Effectiveness Period has expired;




          (h) prepare and file with the SEC such amendments and post-effective amendments to the
Registration Statement and the Prospectus as may be necessary to keep the Registration Statement
effective for the Effectiveness Period and to comply with the provisions of the 1933 Act and the
1934 Act with respect to the distribution of all of the Registrable Securities covered thereby in
accordance with the intended method of disposition as set forth in the Registration Statement,
Prospectus or Prospectus supplement;




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




          (j) prior to any public offering of Registrable Securities, use reasonable best efforts to
register or qualify or cooperate with the Investors and their counsel in connection with the
registration or qualification of such Registrable Securities for offer and sale under the
securities or blue sky laws of such jurisdictions requested by the Investors, to keep such
registration or qualification effective during the Effective Period and do any and all other
commercially reasonable acts or things necessary or advisable to enable the distribution in such
jurisdictions of the Registrable Securities covered by the Registration Statement; provided,
however, that the Company shall not be required in connection therewith or as a condition thereto
to (i) qualify to do business in any jurisdiction where it would not otherwise be required to
qualify but for this Section 3(j), (ii) subject itself to general taxation in any jurisdiction
where it would not otherwise be so subject but for this Section 3(j), or (iii) file a general
consent to service of process in any such jurisdiction;




          (k) use reasonable best efforts to cause all Registrable Securities covered by a Registration
Statement to be listed on each securities exchange, interdealer quotation system or other market on
which similar securities issued by the Company are then listed;




          (l) promptly notify the Investors, at any time when a Prospectus relating to Registrable
Securities is required to be delivered under the 1933 Act (including during any period when the
Company is in compliance with Rule 172), upon discovery that, or upon the happening of any event as
a result of which, the Registration Statement (including the Prospectus), as then in effect,
includes 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, and at the request of any such holder, promptly prepare, file with the
SEC pursuant to Rule 172 and furnish to such holder a supplement to or an amendment of such
Prospectus or post-effective amendment to such Registration Statement (and have it declared
effective as promptly as practicable) as may be necessary so that such Prospectus shall not include
an 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 not misleading in light of the circumstances
then existing;




5









 








          (m) otherwise use reasonable best efforts to comply with all applicable rules and regulations
of the SEC under the 1933 Act and the 1934 Act, including Rule 172, notify the Investors promptly
if the Company no longer satisfies the conditions of Rule 172 and take such other actions as may be
reasonably necessary to facilitate the registration of the Registrable Securities hereunder; and
make available to its security holders, as soon as reasonably practicable, but not later than the
Availability Date (as defined below), an earning statement covering a period of at least twelve
(12) months, beginning after the effective date of each Registration Statement, which earning
statement shall satisfy the provisions of Section 11(a) of the 1933 Act, including Rule 158
promulgated thereunder (for the purpose of this Section 3(m), “Availability Date” means the
45th day following the end of the fourth fiscal quarter that includes the effective date of such
Registration Statement, except that, if such fourth fiscal quarter is the last quarter of the
Company’s fiscal year, “Availability Date” means the 90th day after the end of such fourth
fiscal quarter); and




          (n) upon written notice from an Investor that such Investor has a legal obligation to make a
filing with the National Association of Securities Dealers, Inc. (“NASD”) Corporate
Financing Department pursuant to NASD Rule 2710(b)(10)(A)(i) with respect to the public offering
contemplated by the Registration Statement (an “Issuer Filing”), the Company agrees it will
effect such filing prior to the later to occur of the expiration of five days after receipt of the
written notice on each of which days shares of Common Stock have been trading on the principal
exchange on which such shares are trading at such time (each, a “Trading Day”) after
receipt of the written notice and one Trading Day after the date that the Registration Statement is
first filed with the SEC. The Company shall use reasonable best efforts to pursue the Issuer
Filing until the NASD issues a letter confirming that it does not object to the terms of the
offering contemplated by the Registration Statement. The Company will pay any filing fees and
expenses in connection with the Issuer Filing.




          (o) With a view to making available to the Investors the benefits of Rule 144 (or its
successor rule) and any other rule or regulation of the SEC that may at any time permit the
Investors to sell shares of Common Stock to the public without registration, the Company covenants
and agrees to: (i) make and keep public information available, as those terms are understood and
defined in Rule 144, until the earlier of (A) six months after such date as all of the Registrable
Securities may be resold pursuant to Rule 144(k) or any other rule of similar effect or (B) such
date as all of the Registrable Securities shall have been resold; (ii) file with the SEC in a
timely manner all reports and other documents required of the Company under the 1934 Act; and (iii)
furnish to each Investor upon request, as long as such Investor owns any Registrable Securities,
(A) a written statement by the Company that it has complied with the reporting requirements of the
1934 Act, and (B) such other information as may be reasonably requested in order to avail such
Investor of any rule or regulation of the SEC that permits the selling of any such Registrable
Securities without registration.




     4. Due Diligence Review; Information.



          (a) Subject to paragraph (b) of this Section 4, upon reasonable prior notice, the Company
shall make available, during normal business hours, for inspection and review by the Investors,
advisors to and representatives of the Investors (who may or may not be



6









 






affiliated with the Investors and who are reasonably acceptable to the Company), all financial
and other records, all filings of the Company with the SEC, and all other corporate documents and
properties of the Company as may be reasonably necessary for the purpose of such review, and cause
the Company’s officers, directors, employees and independent accountants, within a reasonable time
period, to supply all such information reasonably requested by the Investors or any such
representative, advisor or underwriter in connection with such Registration Statement (including,
without limitation, in response to all questions and other inquiries reasonably made or submitted
by any of them), prior to and from time to time after the filing and effectiveness of the
Registration Statement for the sole purpose of enabling the Investors and such representatives,
advisors and underwriters and their respective accountants and attorneys to conduct initial and
ongoing due diligence with respect to the Company and the accuracy of such Registration Statement.




          (b) Except as otherwise provided in the Note, the Company shall not disclose material
nonpublic information to the Investors, or to advisors to or representatives of the Investors,
unless prior to disclosure of such information the Company identifies such information as being
material nonpublic information and provides the Investors, such advisors and representatives with
the opportunity to accept or refuse to accept such material nonpublic information for review and
any Investor wishing to obtain such information enters into an appropriate confidentiality
agreement with the Company with respect thereto.




     5. Obligations of the Investors.



          (a) Each Investor shall promptly 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. At least ten (10) Business Days prior to the first
anticipated filing date of the Registration Statement, the Company shall notify each Investor of
the information the Company requires from such Investor if such Investor elects to have any of the
Registrable Securities included in the Registration Statement. An Investor shall provide such
information to the Company at least two (2) Business Days prior to the first anticipated filing
date of such Registration Statement if such Investor elects to have any of the Registrable
Securities included in the Registration Statement.




          (b) Each Investor agrees that, upon receipt of any notice from the Company of either (i) the
commencement of an Allowed Delay or (ii) the happening of an event pursuant to Section 3(c)(vi)
hereof, such Investor will immediately discontinue disposition of Registrable Securities pursuant
to the Registration Statement covering such Registrable Securities, until the Investor is advised
by the Company that the Allowed Delay has terminated or that the Registration Statement or
Prospectus, as the case may be, no longer contains any untrue statement of a material fact or omit
to state any 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.




7









 








     6. Indemnification.



          (a) Indemnification by the Company. To the fullest extent permitted by law, the
Company will indemnify and hold harmless each Investor and its officers, directors, members,
partners, employees, attorneys and agents, successors and assigns, and each other Person, if any,
who controls such Investor within the meaning of the 1933 Act or Section 20 of the 1934 Act (and
their officers, directors, partners, members and employees), against any losses, claims, damages,
expenses, costs (including reasonable attorney fees) or liabilities, joint or several, to which
they may become subject under the 1933 Act or otherwise, insofar as such losses, claims, damages,
expenses, costs or liabilities (or actions in respect thereof) arise out of or are based upon: (i)
any untrue statement or alleged untrue statement of any material fact contained in the Registration
Statement, any preliminary prospectus or final prospectus contained therein, or any amendment or
supplement thereof; (ii) any blue sky application or other document executed by the Company
specifically for that purpose or based upon written information furnished by the Company filed in
any state or other jurisdiction in order to qualify any or all of the Registrable Securities under
the securities laws thereof (any such application, document or information herein called a “Blue
Sky Application”); (iii) the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading; (iv) any violation by the Company or its agents of any
rule or regulation promulgated under the 1933 Act applicable to the Company or its agents and
relating to action or inaction required of the Company in connection with such registration; or (v)
any failure to register or qualify the Registrable Securities included in any such Registration in
any state where the Company or its agents has affirmatively undertaken or agreed in writing that
the Company will undertake such registration or qualification on an Investor’s behalf and will
reimburse such Investor, and each such officer, director or member and each such controlling Person
for any legal or other expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action, which reimbursement shall be made as
such expenses are incurred if such Investor has delivered a written undertaking to the Company to
repay such reimbursement promptly following any final determination that such Investor was not
entitled thereto; provided, however, that the Company will not be liable in any
such case if and to the extent that any such loss, claim, damage or liability arises out of or is
based upon an untrue statement or alleged untrue statement or omission or alleged omission so made
in conformity with information furnished by such Investor or any such controlling Person in writing
specifically for use in such Registration Statement or Prospectus.




          (b) Indemnification by the Investors. Each Investor agrees, severally but not
jointly, to indemnify and hold harmless, to the fullest extent permitted by law, the Company, its
directors, officers, employees, stockholders and each Person who controls the Company (within the
meaning of the 1933 Act) against any losses, claims, damages, liabilities and reasonable expense
(including reasonable attorney fees) resulting from any untrue statement of a material fact
contained in the Registration Statement, any preliminary prospectus or final prospectus contained
therein, or any amendment or supplement thereof or any omission of a material fact required to be
stated in the Registration Statement or Prospectus or preliminary prospectus or amendment or
supplement thereto or necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading, to the extent, but only to



8









 






the extent that such untrue statement or omission is contained in any information furnished in
writing by such Investor to the Company specifically for inclusion in such Registration Statement
or Prospectus or amendment or supplement thereto. In no event shall the liability of an Investor
be greater in amount than the dollar amount of the net proceeds received by such Investor upon the
sale of the Registrable Securities giving rise to such indemnification obligation.




          (c) Conduct of Indemnification Proceedings. Any Person entitled to indemnification
hereunder shall (i) give prompt notice to the indemnifying party of any claim with respect to which
it seeks indemnification and (ii) permit such indemnifying party to assume the defense of such
claim with counsel reasonably satisfactory to the indemnified party; provided that any
Person entitled to indemnification hereunder shall have the right to employ separate counsel and to
participate in the defense of such claim, but the fees and expenses of such counsel shall be at the
expense of such Person unless (a) the indemnifying party has agreed to pay such fees or expenses,
or (b) the indemnifying party shall have failed to assume the defense of such claim and employ
counsel reasonably satisfactory to such Person or (c) in the reasonable judgment of any such
Person, based upon written advice of its counsel, a conflict of interest exists between such person
and the indemnifying party with respect to such claims (in which case, if the Person notifies the
indemnifying party in writing that such Person elects to employ separate counsel at the expense of
the indemnifying party, the indemnifying party shall not have the right to assume the defense of
such claim on behalf of such Person); and provided, further, that the failure of
any indemnified party to give notice as provided herein shall not relieve the indemnifying party of
its obligations hereunder, except to the extent that such failure to give notice shall materially
adversely affect the indemnifying party in the defense of any such claim or litigation. It is
understood that the indemnifying party shall not, in connection with any proceeding in the same
jurisdiction, be liable for fees or expenses of more than one separate firm of attorneys at any
time for all such indemnified parties. No indemnifying party will, except with the consent of the
indemnified party, consent to entry of any judgment or enter into any settlement that does not
include as an unconditional term thereof the giving by the claimant or plaintiff to such
indemnified party of a release from all liability in respect of such claim or litigation, does not
impose any injunction or similar restriction on such indemnified party and does not include a
statement as to or an admission of fault, liability, culpability or failure to act with respect to
any law by an indemnified party.




          (d) Contribution. If for any reason the indemnification provided for in the preceding
paragraphs (a) and (b) is unavailable to an indemnified party or insufficient to hold it harmless,
other than as expressly specified therein, then the indemnifying party shall contribute to the
amount paid or payable by the indemnified party as a result of such loss, claim, damage or
liability in such proportion as is appropriate to reflect the relative fault of the indemnified
party and the indemnifying party, as well as any other relevant equitable considerations. The
relative fault of such indemnifying party and indemnified party shall be determined by
reference to, among other things, whether any action in question, including any untrue or alleged
untrue statement of a material fact or omission or alleged omission of a material fact, has been
taken or made by, or relates to information supplied by, such indemnifying, party or
indemnified party, and the parties’ relative intent, knowledge, access to information and
opportunity to correct or prevent such action, statement or omission. The



9









 






parties hereto agree that it would not be just and equitable if contribution pursuant to
this section were determined by pro rata allocation or by any other method of allocation that
does not take into account the foregoing equitable considerations. No Person guilty of fraudulent
misrepresentation within the meaning of Section 11(f) of the 1933 Act shall be entitled to
contribution from any Person not guilty of such fraudulent misrepresentation. In no event shall
the contribution obligation of a holder of Registrable Securities be greater in amount than the
dollar amount of the proceeds (net of all expenses paid by such holder in connection with any claim
relating to this Section 6 and the amount of any damages such holder has otherwise been required to
pay by reason of such untrue or alleged untrue statement or omission or alleged omission) received
by it upon the sale of the Registrable Securities giving rise to such contribution obligation.




          (e) The obligations of the Company and the Investors under this Section 6 shall survive the
completion of any offering of Registrable Securities in a Registration Statement filed pursuant to
the terms of this Exhibit A.




     7. Miscellaneous.



          (a) Amendments and Waivers. This Exhibit A may be amended, modified or waived
only by a writing signed by the Company and the Required Investors; provided that if any
such amendment, modification or waiver would adversely affect in any material respect any Investor
or group of Investors who have comparable rights under this Exhibit A disproportionately to
the other Investors having such comparable rights, such amendment, modification, or waiver shall
also require the written consent of the Investor(s) so adversely affected.




          (b) Notices. All notices and other communications provided for or permitted hereunder
shall be made as set forth in Section 12.1 of the Purchase Agreement.




          (c) Assignments and Transfers by Investors. The provisions of this Exhibit A
shall be binding upon and inure to the benefit of the Investors and their respective successors and
assigns. An Investor may transfer or assign, in whole or from time to time in part, to one or more
Persons its rights hereunder in connection with the transfer of Registrable Securities by such
Investor to such Person, provided that (i) after such assignment or transfer, such Person holds at
least twenty-five percent (25%) of the Registrable Securities, (ii) such Investor complies with all
laws applicable thereto and provides written notice of assignment to the Company promptly after
such assignment is effected and (iii) the transferee agrees in writing to be bound by this
Exhibit A as if it were a party hereto; provided, however, that the limitation set forth in
subsection (c)(i) shall not apply to assignments or transfers to a subsidiary, parent or affiliate
of the Investor.




          (d) Assignments and Transfers by the Company. This Exhibit A may not be
assigned by the Company (whether by operation of law or otherwise) without the prior written
consent of the Required Investors, provided, however, that the Company may assign its rights and
delegate its duties hereunder to any surviving or successor corporation in connection with a merger
or consolidation of the Company with another corporation, or a sale, transfer or



10









 






other disposition of all or substantially all of the Company’s assets to another corporation,
without the prior written consent of the Required Investors, after notice duly given by the Company
to each Investor.




          (e) Benefits of this Exhibit A. The terms and conditions of this Exhibit A
shall inure to the benefit of and be binding upon the respective permitted successors and assigns
of the parties. Nothing in this Exhibit A , express or implied, is intended to confer upon
any party other than the parties hereto or their respective successors and assigns any rights,
remedies, obligations, or liabilities under or by reason of this Exhibit A, except as
expressly provided in this Exhibit A.




          (f) Titles and Subtitles. The titles and subtitles used in this Exhibit A are
used for convenience only and are not to be considered in construing or interpreting this
Exhibit A.




          (g) Severability. Any provision of this Exhibit A that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining provisions hereof but shall
be interpreted as if it were written so as to be enforceable to the maximum extent permitted by
applicable law, and any such prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other jurisdiction. To the extent
permitted by applicable law, the parties hereby waive any provision of law which renders any
provisions hereof prohibited or unenforceable in any respect.




          (h) Further Assurances. The parties shall execute and deliver all such further
instruments and documents and take all such other actions as may reasonably be required to carry
out the transactions contemplated hereby and to evidence the fulfillment of the agreements herein
contained.




          (i) Entire Agreement. This Exhibit A is intended by the parties as a final
expression of their agreement and intended to be a complete and exclusive statement of the
agreement and understanding of the parties hereto in respect of the subject matter contained
herein. This Exhibit A supersedes all prior agreements and understandings between the
parties with respect to such subject matter.




          (k) Governing Law; Consent to Jurisdiction; Waiver of Jury Trial. This Exhibit
A 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, provided, however,
that corporate matters shall be governed by the Delaware General Corporation Law. 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 Exhibit A 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 Exhibit A. 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



11









 






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 EXHIBIT A AND
REPRESENTS THAT COUNSEL HAS BEEN CONSULTED SPECIFICALLY AS TO THIS WAIVER.




          (l) Obligations of Investors. The Company acknowledges that the obligations of each
Investor under this Exhibit A are several and not joint with the obligations of any other
Investor, and no Investor shall be responsible in any way for the performance of the obligations of
any other Investor under this Exhibit A. The decision of each Investor to enter into to
this Exhibit A has been made by such Investor independently of any other Investor. The
Company further acknowledges that nothing contained in this Exhibit A, 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 hereby. Each Investor shall be entitled to independently protect and
enforce its rights, including without limitation, the rights arising out of this Exhibit A,
and it shall not be necessary for any other Investor to be joined as an additional party in any
proceeding for such purpose.




12









 








Schedule 1




Plan of Distribution




     The selling stockholders, which as used herein includes donees, pledgees, transferees or other
successors-in-interest selling shares of common stock or interests in shares of common stock
received after the date of this prospectus from a selling stockholder as a gift, pledge,
partnership distribution or other transfer, may, from time to time, sell, transfer or otherwise
dispose of any or all of their shares of common stock or interests in shares of common stock on any
stock exchange, market or trading facility on which the shares are traded or in private
transactions. These dispositions may be at fixed prices, at prevailing market prices at the time
of sale, at prices related to the prevailing market price, at varying prices determined at the time
of sale, or at negotiated prices.



     The selling stockholders may use any one or more of the following methods when disposing of
shares or interests therein:




	 	•	 	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 effected after the date the registration statement of which this Prospectus is a
part is declared effective by the SEC;
	 
	 	•	 	through the writing or settlement of options or other hedging transactions, whether through
an options exchange or otherwise;
	 
	 	•	 	broker-dealers may agree with the selling stockholders to sell a specified number of such
shares at a stipulated price per share; and
	 
	 	•	 	a combination of any such methods of sale.





     The selling stockholders may, from time to time, pledge or grant a security interest in some
or all of the 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, under this prospectus, or under an amendment or supplement to this prospectus
under Rule 424(b)(3) or other applicable provision of the 1933 Act amending the list of selling
stockholders to include the pledgee, transferee or other successors in interest as



13









 







selling stockholders under this prospectus. The selling stockholders also may transfer the shares
of common stock in other circumstances, in which case the transferees, pledgees or other successors
in interest will be the selling beneficial owners for purposes of this prospectus.



     In connection with the sale of our common stock or interests therein, the selling stockholders
may enter into hedging transactions with broker-dealers or other financial institutions, which may
in turn engage in short sales of the common stock in the course of hedging the positions they
assume. The selling stockholders may also sell shares of our common stock short and deliver these
securities to close out their short positions, or loan or pledge the common stock to broker-dealers
that in turn may sell these securities. The selling stockholders may also enter into option or
other transactions with broker-dealers or other financial institutions or the creation of one or
more derivative securities which require the delivery to such broker-dealer or other financial
institution of shares offered by this prospectus, which shares such broker-dealer or other
financial institution may resell pursuant to this prospectus (as supplemented or amended to reflect
such transaction).



     The aggregate proceeds to the selling stockholders from the sale of the common stock offered
by them will be the purchase price of the common stock less discounts or commissions if any. Each
of the selling stockholders reserves the right to accept and, together with their agents from time
to time, to reject, in whole or in part, any proposed purchase of common stock to be made directly
or through agents. We will not receive any of the proceeds from this offering.



     The selling stockholders also may resell all or a portion of the shares in open market
transactions in reliance upon Rule 144 under the 1933 Act, provided that they meet the criteria and
conform to the requirements of that rule.



     The selling stockholders and any underwriters, broker-dealers or agents that participate in
the sale of the common stock or interests therein may be “underwriters” within the meaning of
Section 2(11) of the Securities Act. Any discounts, commissions, concessions or profit they earn
on any resale of the shares may be underwriting discounts and commissions under the 1933 Act.
Selling stockholders who are “underwriters” within the meaning of Section 2(11) of the 1933 Act
will be subject to the prospectus delivery requirements of the Securities Act.



     To the extent required, the shares of our common stock to be sold, the names of the selling
stockholders, the respective purchase prices and public offering prices, the names of any agents,
dealer or underwriter, any applicable commissions or discounts with respect to a particular offer
will be set forth in an accompanying prospectus supplement or, if appropriate, a post-effective
amendment to the registration statement that includes this prospectus.



     In order to comply with the securities laws of some states, if applicable, the common stock
may be sold in these jurisdictions only through registered or licensed brokers or dealers. In
addition, in some states the common stock may not be sold unless it has been registered or
qualified for sale or an exemption from registration or qualification requirements is available and
is complied with.



14









 





     We have advised the selling stockholders that the anti-manipulation rules of Regulation M
under the 1934 Act may apply to sales of shares in the market and to the activities of the selling
stockholders and their affiliates. In addition, the Company has advised each Selling Stockholder
that the Commission currently takes the position that coverage of short sales “against the box”
prior to the effective date of the registration statement of which this prospectus is a part would
be a violation of Section 5 of the Securities Act, as described in Item 65, Section A, of the
Manual of Publicly Available Telephone Interpretations, dated July 1997, compiled by the Office of
Chief Counsel, Division of Corporate Finance. Further, we will make copies of this prospectus (as
it may be supplemented or amended from time to time) available to the selling stockholders for the
purpose of satisfying the prospectus delivery requirements of the Securities Act. The selling
stockholders may indemnify any broker-dealer that participates in transactions involving the sale
of the shares against certain liabilities, including liabilities arising under the Securities Act.



     We have agreed to indemnify the selling stockholders against liabilities, including
liabilities under the 1933 Actand state securities laws, relating to the registration of the shares
offered by this prospectus.



     We have agreed with the selling stockholders to keep the registration statement of which this
prospectus constitutes a part effective until the earlier of (1) such time as all of the shares
covered by this prospectus have been disposed of pursuant to and in accordance with the
registration statement or (2) the date on which the shares may be sold pursuant to Rule 144(k) of
the Securities Act.




15