OF THIS AGREEMENT FOR THAT WORD IN RULE 405 PROMULGATED
BY THE COMMISSION UNDER THE SECURITIES ACT.
1.2.
THE TERM "BOARD" MEANS THE BOARD OF DIRECTORS
OF THE COMPANY.
1.3.
THE TERM "COMMON STOCK" SHALL MEAN SHARES OF
THE COMPANY'S COMMON STOCK, PAR VALUE $0.01 PER SHARE.
1.4.
THE TERM "CONVERSION SHARES" MEANS THE SHARES
OF COMMON STOCK ISSUED OR ISSUABLE UPON CONVERSION OF THE NOTES (WITHOUT GIVING
EFFECT TO ANY LIMITATIONS ON CONVERSION SET FORTH IN THE NOTES).
1.5.
THE TERM "EXCHANGE ACT" SHALL MEAN THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, AND THE RULES AND REGULATIONS
PROMULGATED THEREUNDER.
1.6.
THE TERM "FORM S-3" MEANS SUCH FORM UNDER THE
SECURITIES ACT AS IN EFFECT ON THE DATE HEREOF OR ANY REGISTRATION FORM UNDER
THE SECURITIES ACT SUBSEQUENTLY ADOPTED BY THE SEC WHICH PERMITS INCLUSION OR
INCORPORATION OF SUBSTANTIAL INFORMATION BY REFERENCE TO OTHER DOCUMENTS FILED
BY THE COMPANY WITH THE SEC.
1.7.
THE TERM "GAAP" SHALL MEAN GENERALLY ACCEPTED
ACCOUNTING PRINCIPLES.
1.8.
THE TERM "HOLDER" MEANS ANY PERSON OWNING OR
HAVING THE RIGHT TO ACQUIRE REGISTRABLE SECURITIES OR ANY ASSIGNEE THEREOF WHO
HAS BECOME A PARTY TO THIS AGREEMENT IN ACCORDANCE WITH SECTION 2.10 HEREOF.
1.9.
THE TERM "NEW SECURITIES" SHALL MEAN COMMON
STOCK OF THE COMPANY, WHETHER NOW AUTHORIZED OR NOT, OR RIGHTS, OPTIONS, OR
WARRANTS TO PURCHASE SAID EQUITY
1
SECURITIES, OR SECURITIES OF ANY TYPE WHATSOEVER THAT ARE, OR MAY BECOME,
CONVERTIBLE INTO OR EXCHANGEABLE INTO OR EXERCISABLE FOR SAID EQUITY SECURITIES.
1.10.
THE TERM "NOTES" MEANS ANY OF THOSE CERTAIN
CONVERTIBLE PROMISSORY NOTES ISSUED BY COMPANY TO THE INVESTORS PURSUANT TO THE
LOAN AGREEMENT.
1.11.
THE TERM "REGISTER," "REGISTERED," AND
"REGISTRATION" REFER TO A REGISTRATION EFFECTED BY PREPARING AND FILING A
REGISTRATION STATEMENT OR SIMILAR DOCUMENT IN COMPLIANCE WITH THE SECURITIES ACT
AND PURSUANT TO RULE 415, AND THE DECLARATION OR ORDERING OF EFFECTIVENESS OF
SUCH REGISTRATION STATEMENT OR DOCUMENT.
1.12.
"REGISTRABLE SECURITIES" MEANS ALL OF (I) THE
CONVERSION SHARES, (II) THE WARRANT SHARES ISSUED OR ISSUABLE UPON THE 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 EXERCISE SET FORTH IN THE WARRANT), AND (III) ANY SECURITIES
ISSUED OR ISSUABLE UPON ANY STOCK SPLIT, DIVIDEND OR OTHER DISTRIBUTION,
RECAPITALIZATION OR SIMILAR EVENT; PROVIDED, THAT A HOLDER'S SECURITY SHALL
CEASE TO BE REGISTRABLE SECURITIES UPON THE EARLIEST TO OCCUR OF THE FOLLOWING:
(A) SALE PURSUANT TO A REGISTRATION STATEMENT OR SEC RULE 144 (IN WHICH CASE,
ONLY SUCH SECURITY SOLD SHALL CEASE TO BE A REGISTRABLE SECURITY); OR (B) SUCH
SECURITY BECOMING ELIGIBLE FOR SALE BY THE HOLDER WITHOUT VOLUME RESTRICTIONS
PURSUANT TO SEC RULE 144.
1.13.
THE TERM "SEC" MEANS THE SECURITIES AND EXCHANGE
COMMISSION.
1.14.
THE TERM "SEC RULE 144" MEANS RULE 144 PROMULGATED
BY THE SEC UNDER THE SECURITIES ACT.
1.15.
THE TERM "SEC RULE 145" MEANS RULE 145 PROMULGATED
BY THE SEC UNDER THE SECURITIES ACT.
1.16.
THE TERM "SECURITIES ACT" MEANS THE