MEANS ANY PERSON FROM WHOM
INDEMNIFICATION IS SOUGHT PURSUANT TO SECTION 2.6.
1.16.
"INDEMNITEES" HAS THE MEANING SET FORTH IN
SECTION 2.6(A).
1.17.
"INITIATING HOLDER" MEANS THE PARTY OR PARTIES
DELIVERING A HOLDER DEMAND AS PROVIDED FOR UNDER SECTION 2.1(A).
1.18.
"LOSSES" HAS THE MEANING SET FORTH IN SECTION 2.6(A).
1.19.
"MAJORITY PARTICIPATING HOLDERS" MEANS, AT ANY TIME,
PARTICIPATING HOLDERS HOLDING MORE THAN 50% OF THE REGISTRABLE SECURITIES
PROPOSED TO BE INCLUDED IN ANY OFFERING OF REGISTRABLE SECURITIES BY SUCH
PARTICIPATING HOLDERS PURSUANT TO SECTION 2.1 OR SECTION 2.2.
1.20.
"NASD" MEANS NATIONAL ASSOCIATION OF SECURITIES
DEALERS, INC.
1.21.
"NASDAQ" MEANS THE NASDAQ STOCK MARKET, INC.
1.22.
"PARTICIPATING HOLDERS" MEANS ANY HOLDER PARTICIPATING
IN ANY OFFERING OF REGISTRABLE SECURITIES PURSUANT TO SECTION 2.1 OR
SECTION 2.2.
1.23.
"PERSON" MEANS AN INDIVIDUAL, A CORPORATION, A
PARTNERSHIP, A LIMITED LIABILITY COMPANY, A BUSINESS, AN ASSOCIATION, A TRUST,
AN INDIVIDUAL, OR ANY OTHER ENTITY OR ORGANIZATION, INCLUDING A GOVERNMENT OR
POLITICAL SUBDIVISION OR AN AGENCY OR INSTRUMENTALITY THEREOF.
1.24.
"POSTPONEMENT PERIOD" HAS THE MEANING SET FORTH IN
SECTION 2.1(I).
1.25.
"PURCHASE AGREEMENT" HAS THE MEANING SET FORTH IN THE
RECITALS.
1.26.
"PURCHASER" HAS THE MEANING SET FORTH IN THE
INTRODUCTION AND INCLUDES ANY SUCCESSOR THERETO BY MERGER, CONSOLIDATION,
ACQUISITION OF SUBSTANTIALLY ALL THE ASSETS THEREOF, OR OTHERWISE.
1.27.
"QUALIFIED INDEPENDENT UNDERWRITER" HAS THE MEANING
SET FORTH IN NASD RULE 2720(B)(15).
2
1.28.
"REGISTRABLE SECURITIES" MEANS ANY OF THE FOLLOWING
WHEN HELD BY A HOLDER: (I) ANY SHARES OF COMMON STOCK ISSUED UPON THE CONVERSION
OF THE CONVERTIBLE NOTE, AND (II) ANY SHARES OF COMMON STOCK ACQUIRED BY THE
HOLDERS FROM THE COMPANY AFTER THE DATE HEREOF, INCLUDING SHARES OF COMMON STOCK
ACQUIRED UPON EXERCISE OR CONVERSION OF CONVERTIBLE SECURITIES THAT ARE ACQUIRED
BY THE HOLDERS FROM THE COMPANY AFTER THE DATE HEREOF.
FOR PURPOSES OF THIS
AGREEMENT, A PERSON WILL BE DEEMED TO A HOLDER OF REGISTRABLE SECURITIES
WHENEVER SUCH PERSON HAS THE RIGHT TO ACQUIRE, DIRECTLY OR INDIRECTLY, SUCH
REGISTRABLE SECURITIES (UPON CONVERSION, EXERCISE OR EXCHANGE OF THE CONVERTIBLE
NOTE OR ANY OTHER CONVERTIBLE SECURITIES BUT DISREGARDING ANY RESTRICTIONS OR
LIMITATIONS UPON THE EXERCISE OF SUCH RIGHT), WHETHER OR NOT SUCH ACQUISITION
HAS ACTUALLY BEEN EFFECTED, AND SUCH PERSON SHALL NOT BE REQUIRED TO CONVERT,
EXERCISE OR EXCHANGE SUCH CONVERTIBLE SECURITY (OR OTHERWISE ACQUIRE SUCH
REGISTRABLE SECURITY) TO PARTICIPATE ON ANY REGISTERED OFFERING HEREUNDER UNTIL
THE CLOSING OF SUCH OFFERING.
AS TO ANY PARTICULAR REGISTRABLE SECURITIES, SUCH
SECURITIES SHALL CEASE TO BE REGISTRABLE SECURITIES WHEN (A) A REGISTRATION
STATEMENT WITH RESPECT TO THE SALE OF SUCH SECURITIES SHALL HAVE BECOME
EFFECTIVE UNDER THE SECURITIES ACT AND SUCH SECURITIES SHALL HAVE BEEN DISPOSED
OF IN ACCORDANCE WITH SUCH REGISTRATION STATEMENT OR (B) WHEN SUCH SECURITIES
SHALL HAVE BEEN SOLD PURSUANT TO RULE 144 UNDER THE SECURITIES ACT OR SIMILAR
RULE THEN IN EFFECT.
1.29.
"REGISTRATION EXPENSES" MEANS ALL FEES AND EXPENSES
INCURRED IN CONNECTION WITH THE COMPANY'S PERFORMANCE OF OR COMPLIANCE WITH
SECTION 2 HEREOF, INCLUDING, WITHOUT LIMITATION, (I) ALL REGISTRATION, FILING