PERCENTAGE INTEREST (AS DEFINED BELOW), BUT SOLELY TO THE EXTENT THAT
ANY SUCH ISSUANCE OF SHARES OF COVERED SECURITIES WOULD NOT RESULT IN THE
ISSUANCE OF COVERED SECURITIES THAT WOULD REQUIRE A VOTE OF THE STOCKHOLDERS OF
THE COMPANY PURSUANT TO THE LISTING STANDARDS OF THE NASDAQ STOCK MARKET AND
PROVIDED, HOWEVER, THAT THIS SECTION 7.1 SHALL NOT APPLY TO ANY QUALIFIED
OFFERING THE GROSS PROCEEDS OF WHICH, TOGETHER WITH THE AGGREGATE GROSS PROCEEDS
OF ANY OTHER QUALIFIED OFFERING OF COVERED SECURITIES AFTER THE DATE HEREOF, DO
NOT EXCEED $1,000,000.
AS USED IN THIS SECTION 7.1, (I) "PURCHASER PERCENTAGE
INTEREST" MEANS, AS OF ANY DATE, THE PERCENTAGE EQUAL TO (A) THE AGGREGATE
NUMBER OF SHARES OF COMPANY COMMON STOCK BENEFICIALLY OWNED (WITH THE TERM
"BENEFICIAL OWNERSHIP" HAVING THE MEANING ASCRIBED IN SECTION 13(D)(3) AND
RULE 13D-3 UNDER THE EXCHANGE ACT) OR OTHERWISE HELD BY PURCHASER AS OF SUCH
DATE DIVIDED BY (B) THE TOTAL NUMBER OF OUTSTANDING SHARES OF COMPANY COMMON
STOCK AS OF SUCH DATE AND
20
(II) "COVERED SECURITIES" MEANS COMMON STOCK AND ANY SECURITIES CONVERTIBLE INTO
OR EXERCISABLE OR EXCHANGEABLE FOR COMMON STOCK, OTHER THAN SECURITIES THAT ARE
(A) ISSUED BY THE COMPANY PURSUANT TO ANY EMPLOYMENT CONTRACT, EMPLOYEE OR
BENEFIT PLAN, STOCK PURCHASE PLAN, STOCK OWNERSHIP PLAN, STOCK OPTION OR EQUITY
COMPENSATION PLAN OR OTHER SIMILAR PLAN WHERE STOCK IS BEING ISSUED OR OFFERED
TO A TRUST, OTHER ENTITY TO OR FOR THE BENEFIT OF ANY EMPLOYEES, POTENTIAL
EMPLOYEES, CONSULTANTS, OFFICERS OR DIRECTOR OF THE COMPANY, (B) ISSUED BY THE
COMPANY IN CONNECTION WITH A BUSINESS COMBINATION OR OTHER MERGER, ACQUISITION
OR DISPOSITION TRANSACTION, (C) ISSUED WITH REFERENCE TO THE COMMON STOCK OF A
SUBSIDIARY (I.E., A CARVE-OUT TRANSACTION), (D) ISSUED AS A DIVIDEND OR IN
CONNECTION WITH A DIVIDEND INVESTMENT OR STOCKHOLDER PURCHASE PLAN OR (E) ISSUED
IN EXCHANGE FOR CURRENTLY OUTSTANDING SECURITIES.
(B)
NOTICE.
PRIOR TO MAKING ANY QUALIFIED OFFERING OF COVERED
SECURITIES, THE COMPANY SHALL GIVE PURCHASER WRITTEN NOTICE OF ITS INTENTION
(INCLUDING, IN THE CASE OF A REGISTERED PUBLIC OFFERING AND TO THE EXTENT
POSSIBLE, A COPY OF THE PROSPECTUS INCLUDED IN THE REGISTRATION STATEMENT FILED
IN RESPECT OF SUCH), DESCRIBING, TO THE EXTENT THEN KNOWN, THE ANTICIPATED
AMOUNT OF SECURITIES, PRICE (OR, IN THE CASE OF A REGISTERED PUBLIC OFFERING, AN
ESTIMATED RANGE OF PRICES) AND OTHER MATERIAL TERMS UPON WHICH THE COMPANY
PROPOSES TO OFFER THE SAME.
PURCHASER SHALL HAVE TEN (10) DAYS FROM THE
PROVISION OF SUCH NOTICE TO NOTIFY THE COMPANY IN WRITING THAT IT INTENDS TO
EXERCISE SUCH PREEMPTIVE PURCHASE RIGHTS AND AS TO THE AMOUNT OF COVERED
SECURITIES PURCHASER DESIRES TO PURCHASE, UP TO THE MAXIMUM AMOUNT CALCULATED
PURSUANT TO SECTION 7.1(A) (THE "DESIGNATED SECURITIES").
SUCH NOTICE SHALL
CONSTITUTE A NON-BINDING INDICATION OF INTEREST OF PURCHASER TO PURCHASE THE
AMOUNT OF DESIGNATED SECURITIES SO SPECIFIED (OR A PROPORTIONATELY LESSER AMOUNT
IF THE AMOUNT OF COVERED SECURITIES TO BE OFFERED IN SUCH QUALIFIED OFFERING IS
SUBSEQUENTLY REDUCED) AT THE PRICE (OR RANGE OF PRICES) AND OTHER