EACH SECURITYHOLDER THAT IS AN ACCREDITED
INVESTOR IN WRITING OF THE PRICE OF AND ANY MATERIAL TERMS RELATING TO THE
PROPOSED ISSUANCE OR SALE (TO THE EXTENT THEN KNOWN). EACH SECURITYHOLDER MAY
ELECT TO PURCHASE HIS, HER OR ITS PRO RATA PORTION OF THE SECURITIES TO BE
ISSUED IN SUCH ISSUANCE OR SALE AT THE SAME PRICE AND ON THE TERMS IDENTIFIED IN
THE NOTICE. IF ELECTING TO PARTICIPATE, EACH SECURITYHOLDER SHALL BE REQUIRED TO
PURCHASE THE SAME STRIP OF SECURITIES, ON THE SAME TERMS AND CONDITIONS, THAT
THE ACQUIRING SECURITYHOLDER IN SUCH ISSUANCE IS PURCHASING. EACH
SECURITYHOLDER'S ELECTION TO PARTICIPATE IN ANY SUCH ADDITIONAL FINANCING MUST
BE MADE IN WRITING AND BE DELIVERED TO THE COMPANY WITHIN 15 DAYS AFTER SUCH
SECURITYHOLDER'S RECEIPT OF THE NOTICE FROM THE COMPANY PROVIDED UNDER THIS
SECTION 4; PROVIDED THAT IF THERE IS A MATERIAL CHANGE IN THE TERMS INCLUDED IN
SUCH NOTICE, EACH SECURITYHOLDER WILL HAVE 10 DAYS AFTER RECEIPT OF NOTICE OF
THE REVISED TERMS TO RECONFIRM SUCH SECURITYHOLDER'S INTENTION TO INVEST. IF
AFTER NOTIFYING THE SECURITYHOLDERS, THE COMPANY ELECTS NOT TO PROCEED WITH THE
ISSUANCE OR SALE, ANY ELECTIONS MADE BY SECURITYHOLDERS SHALL BE DEEMED
RESCINDED.
(B)
UPON THE EXPIRATION OF THE OFFERING PERIODS
DESCRIBED ABOVE, THE COMPANY SHALL BE ENTITLED TO SELL SUCH SECURITIES WHICH THE
SECURITYHOLDERS HAVE NOT ELECTED TO PURCHASE DURING THE 180 CALENDAR DAYS
FOLLOWING SUCH EXPIRATION AT A PRICE NOT LESS THAN, AND ON OTHER TERMS AND
CONDITIONS SUBSTANTIALLY SIMILAR TO THOSE OFFERED TO SUCH SECURITYHOLDERS. ANY
SECURITIES OFFERED OR SOLD BY THE COMPANY AFTER SUCH 180 DAY PERIOD (OR, IF
PRIOR TO SUCH 180-DAY PERIOD, AT A PRICE LESS THAN, OR ON OTHER TERMS AND
CONDITIONS NOT SUBSTANTIALLY SIMILAR TO THOSE OFFERED TO SUCH SECURITYHOLDERS)
MUST BE REOFFERED TO SUCH SECURITYHOLDERS PURSUANT TO THE TERMS OF THIS SECTION
4.
(C)
NOTWITHSTANDING ANYTHING HEREIN TO THE
CONTRARY, IF THE BOARD DETERMINES THAT COMPLIANCE WITH THE TIME PERIODS
DESCRIBED IN THIS SECTION 4 WOULD NOT BE IN THE BEST INTERESTS OF THE COMPANY
AND ITS SUBSIDIARIES BECAUSE OF THE LIQUIDITY NEEDS OF THE COMPANY AND ITS
SUBSIDIARIES, THEN, IN LIEU OF OFFERING ANY SECURITIES TO THE SECURITYHOLDERS AT
THE TIME SUCH SECURITIES ARE OTHERWISE BEING ISSUED OR SOLD, THE COMPANY MAY
COMPLY WITH THE PROVISIONS OF THIS SECTION 4 BY MAKING AN OFFER TO SELL TO THE
SECURITYHOLDERS THEIR PRO RATA PORTION OF SUCH SECURITIES PROMPTLY, AND IN NO
EVENT LATER THAN 10 DAYS, AFTER A SALE TO THE ACQUIRING SECURITYHOLDER IS
CONSUMMATED. IN SUCH EVENT, FOR ALL PURPOSES OF THIS SECTION 4, EACH
SECURITYHOLDER'S PRO RATA PORTION SHALL BE DETERMINED TAKING INTO CONSIDERATION
THE ACTUAL NUMBER OF SECURITIES SOLD SO AS TO ACHIEVE THE SAME ECONOMIC EFFECT
AS IF SUCH OFFER WOULD HAVE BEEN MADE PRIOR TO SUCH SALE.
(D)
THIS SECTION 4 SHALL TERMINATE UPON THE
FIRST TO OCCUR OF (I) THE CONSUMMATION OF A SALE OF THE COMPANY AND (II) THE
CONSUMMATION OF A QUALIFIED PUBLIC OFFERING.
6
5.
SALE OF THE