SECURITIES ACT
OF 1933, AS AMENDED, AND THE RULES AND REGULATIONS PROMULGATED THEREUNDER.
1.17.
THE TERM "VIOLATION" MEANS LOSSES, CLAIMS, DAMAGES,
OR LIABILITIES (JOINT OR SEVERAL) TO WHICH A PARTY HERETO MAY BECOME SUBJECT
UNDER THE SECURITIES ACT, THE EXCHANGE ACT OR OTHER FEDERAL OR STATE LAW,
INSOFAR AS SUCH LOSSES, CLAIMS, DAMAGES, OR LIABILITIES (OR ACTIONS IN RESPECT
THEREOF) ARISE OUT OF OR ARE BASED UPON ANY OF THE FOLLOWING STATEMENTS,
OMISSIONS OR VIOLATIONS:
(I) ANY UNTRUE STATEMENT OR ALLEGED UNTRUE STATEMENT
OF A MATERIAL FACT CONTAINED IN SUCH REGISTRATION STATEMENT, INCLUDING ANY
PRELIMINARY PROSPECTUS OR FINAL PROSPECTUS CONTAINED THEREIN OR ANY AMENDMENTS
OR SUPPLEMENTS THERETO, (II) THE OMISSION OR ALLEGED OMISSION TO STATE THEREIN A
MATERIAL FACT REQUIRED TO BE STATED THEREIN, OR NECESSARY TO MAKE THE STATEMENTS
THEREIN NOT MISLEADING, OR (III) ANY VIOLATION OR ALLEGED VIOLATION BY ANY OTHER
PARTY HERETO, OF THE SECURITIES ACT, THE EXCHANGE ACT, ANY STATE SECURITIES LAW
OR ANY RULE OR REGULATION PROMULGATED UNDER THE SECURITIES ACT, THE EXCHANGE ACT
OR ANY STATE SECURITIES LAW.
1.18.
THE TERM "WARRANTS" MEANS ANY OF THOSE CERTAIN
STOCK PURCHASE WARRANTS ISSUED BY THE COMPANY TO THE INVESTORS PURSUANT TO THE
LOAN AGREEMENT.
2
1.19.
THE TERM "WARRANT SHARES" MEANS THE SHARES OF
COMMON STOCK ISSUED OR ISSUABLE UPON EXERCISE OF THE WARRANTS, INCLUDING ANY
ADDITIONAL SHARES ISSUABLE IN CONNECTION WITH ANY ANTI-DILUTION PROVISIONS IN
THE WARRANTS (WITHOUT GIVING EFFECT TO ANY LIMITATIONS ON CONVERSION SET FORTH
IN THE WARRANTS).
2.
REGISTRATION RIGHTS.
THE COMPANY COVENANTS AND AGREES AS
FOLLOWS:
2.1.
REQUEST FOR REGISTRATION.
(A)
AT ANY TIME FOLLOWING THE SIX MONTH ANNIVERSARY OF THE DATE OF THE
LOAN AGREEMENT, IF ANY HOLDER THAT OWNS, BENEFICIALLY OR OF RECORD, OR HAS THE
RIGHT TO ACQUIRE REGISTRABLE SECURITIES, SUCH HOLDER MAY DELIVER A WRITTEN
REQUEST THAT THE COMPANY FILE A REGISTRATION STATEMENT UNDER THE SECURITIES ACT,
THEN THE COMPANY SHALL:
(I)
WITHIN 10 DAYS OF THE RECEIPT OF SUCH WRITTEN
REQUEST, GIVE WRITTEN NOTICE OF SUCH REQUEST TO ALL HOLDERS THAT SUCH
REGISTRATION IS TO BE EFFECTED (THE "REGISTRATION NOTICE");
(II)
AS SOON AS PRACTICABLE, AND IN ANY EVENT WITHIN 90
DAYS OF THE RECEIPT OF SUCH REQUEST, FILE A REGISTRATION STATEMENT UNDER THE
SECURITIES ACT COVERING ALL REGISTRABLE SECURITIES WHICH THE HOLDERS REQUEST TO
BE REGISTERED, SUBJECT TO THE LIMITATIONS OF SUBSECTION 2.1(C); AND
(III)
USE ITS COMMERCIALLY REASONABLE EFFORTS TO CAUSE SUCH
REGISTRATION STATEMENT TO BE DECLARED EFFECTIVE BY THE SEC AS SOON AS
PRACTICABLE.
Subject to Section 2.1(c), the Company shall be obligated to file only one such
registration statement pursuant to this Section 2.1.
(B)
IF THE HOLDERS INTEND TO DISTRIBUTE THE REGISTRABLE SECURITIES
COVERED BY ITS REQUEST BY MEANS OF AN UNDERWRITING, THEY SHALL SO ADVISE THE
COMPANY AS A PART OF ITS REQUEST MADE PURSUANT TO SUBSECTION 2.1(A). IF AN
UNDERWRITER IS WILLING TO SELL THE REGISTRABLE SECURITIES, THE UNDERWRITER WILL
BE SELECTED BY THE COMPANY AND SHALL BE REASONABLY ACCEPTABLE TO HOLDERS OF A
MAJORITY OF THE PARTICIPATING