NOTICE IS NOT
CONSUMMATED FOR ANY REASON ON THE TERMS SET FORTH IN SUCH SUBSEQUENT FINANCING
NOTICE WITHIN 60 TRADING DAYS AFTER THE DATE OF THE INITIAL SUBSEQUENT FINANCING
NOTICE.
(G)
NOTWITHSTANDING THE FOREGOING, THIS
SECTION 4.12 SHALL NOT APPLY IN RESPECT OF (I) AN EXEMPT ISSUANCE, OR (II) AN
UNDERWRITTEN PUBLIC OFFERING OF COMMON STOCK.
27
4.13
SUBSEQUENT EQUITY SALES.
(A)
FROM THE DATE HEREOF UNTIL 90 DAYS AFTER
THE EFFECTIVE DATE, NEITHER THE COMPANY NOR ANY SUBSIDIARY SHALL ISSUE SHARES OF
COMMON STOCK OR COMMON STOCK EQUIVALENTS; PROVIDED, HOWEVER, THE 90 DAY PERIOD
SET FORTH IN THIS SECTION 4.13 SHALL BE EXTENDED FOR THE NUMBER OF TRADING DAYS
DURING SUCH PERIOD IN WHICH (I) TRADING IN THE COMMON STOCK IS SUSPENDED BY ANY
TRADING MARKET, OR (II) FOLLOWING THE EFFECTIVE DATE, THE REGISTRATION STATEMENT
IS NOT EFFECTIVE OR THE PROSPECTUS INCLUDED IN THE REGISTRATION STATEMENT MAY
NOT BE USED BY THE PURCHASERS FOR THE RESALE OF THE UNDERLYING SHARES.
(B)
FROM THE DATE HEREOF UNTIL THE DATE THE
DEBENTURES AND WARRANTS ARE NO LONGER OUTSTANDING, THE COMPANY SHALL BE
PROHIBITED FROM EFFECTING OR ENTERING INTO AN AGREEMENT TO EFFECT ANY SUBSEQUENT
FINANCING INVOLVING A VARIABLE RATE TRANSACTION. "VARIABLE RATE TRANSACTION"
MEANS A TRANSACTION IN WHICH THE COMPANY ISSUES OR SELLS (I) ANY DEBT OR EQUITY
SECURITIES THAT ARE CONVERTIBLE INTO, EXCHANGEABLE OR EXERCISABLE FOR, OR
INCLUDE THE RIGHT TO RECEIVE ADDITIONAL SHARES OF COMMON STOCK EITHER (A) AT A
CONVERSION, EXERCISE OR EXCHANGE RATE OR OTHER PRICE THAT IS BASED UPON AND/OR
VARIES WITH THE TRADING PRICES OF OR QUOTATIONS FOR THE SHARES OF COMMON STOCK
AT ANY TIME AFTER THE INITIAL ISSUANCE OF SUCH DEBT OR EQUITY SECURITIES, OR
(B) WITH A CONVERSION, EXERCISE OR EXCHANGE PRICE THAT IS SUBJECT TO BEING RESET
AT SOME FUTURE DATE AFTER THE INITIAL ISSUANCE OF SUCH DEBT OR EQUITY SECURITY
OR UPON THE OCCURRENCE OF SPECIFIED OR CONTINGENT EVENTS DIRECTLY OR INDIRECTLY
RELATED TO THE BUSINESS OF THE COMPANY OR THE MARKET FOR THE COMMON STOCK OR
(II) ENTERS INTO ANY AGREEMENT, INCLUDING, BUT NOT LIMITED TO, AN EQUITY LINE OF
CREDIT, WHEREBY THE COMPANY MAY SELL SECURITIES AT A FUTURE DETERMINED PRICE.
(C)
SO LONG AS ANY PURCHASER BENEFICIALLY OWNS
ANY DEBENTURES, THE COMPANY WILL NOT ISSUE ANY DEBENTURES OTHER THAN UP TO AN
ADDITIONAL $5 MILLION OF DEBENTURES ON THE TERMS DESCRIBED IN THIS AGREEMENT AS
CONTEMPLATED HEREBY AND THE COMPANY SHALL NOT ISSUE ANY OTHER SECURITIES THAT
WOULD CAUSE A BREACH OR DEFAULT UNDER THE DEBENTURES.
(D)
NOTWITHSTANDING THE FOREGOING, THIS
SECTION 4.13 SHALL NOT APPLY IN RESPECT OF AN EXEMPT ISSUANCE.
4.14
EQUAL TREATMENT OF PURCHASERS. NO CONSIDERATION
SHALL BE OFFERED OR PAID TO ANY PERSON TO AMEND OR CONSENT TO A WAIVER OR
MODIFICATION OF ANY PROVISION OF ANY OF THE TRANSACTION DOCUMENTS UNLESS THE
SAME CONSIDERATION IS ALSO OFFERED TO ALL OF THE PARTIES TO THE TRANSACTION
DOCUMENTS. FURTHER, THE COMPANY SHALL NOT MAKE ANY PAYMENT OF PRINCIPAL OR
INTEREST ON THE DEBENTURES