statement filed by the
Company with the U.S. Securities and Exchange Commission for a public offering
and sale of securities of the Company (other than a Registration Statement on
Form S-4 or S-8 or any successor form for securities to be offered in a
transaction of the type referred to in Rule 145 under the Securities Act or to
employees of Company pursuant to any employee benefit plan, respectively).
"Warrants" shall mean the warrants to purchase shares of the Company's common
stock issued to the Purchasers on the date hereof.
2.
MANDATORY REGISTRATION / PENALTIES FOR
DELAYED EFFECTIVENESS.
WITHIN 90 DAYS FROM THE DATE HEREOF, THE COMPANY SHALL
FILE A REGISTRATION STATEMENT COVERING THE RESALE OF THE REGISTRABLE SECURITIES
AND SHALL THEREAFTER USE ITS BEST EFFORTS TO EFFECT THE REGISTRATION UNDER THE
SECURITIES ACT OF THE REGISTRABLE SECURITIES FOR SALE WITHIN 90 DAYS AFTER SUCH
FILING, ALL TO THE EXTENT REQUIRED TO PERMIT THE DISPOSITION OF THE REGISTRABLE
SECURITIES SO REGISTERED FOR A PERIOD OF UP TO TWO YEARS AFTER THE REGISTRABLE
SHARES FIRST BECOME ISSUABLE UPON CONVERSION OR EXERCISE OF THE SERIES B-1
PREFERRED STOCK AND THE RELATED WARRANTS.
IN ADDITION, IF THE NUMBER OF
REGISTRABLE SECURITIES INCREASES AS A RESULT OF AN ADJUSTMENT TO THE CONVERSION
PRICE, THEN THE COMPANY SHALL BE REQUIRED TO FILE AN ADDITIONAL REGISTRATION
STATEMENT COVERING SUCH ADDITIONAL SHARES (THE "ADDITIONAL REGISTRABLE
SECURITIES") WITHIN 15 DAYS OF SUCH INCREASE AND SHALL THEREAFTER USE ITS BEST
EFFORTS TO EFFECT THE REGISTRATION WITHIN 90 DAYS AFTER SUCH FILING.
IF (A) THE
REGISTRATION STATEMENT COVERING REGISTRABLE SECURITIES IS NOT FILED WITHIN 90
DAYS FOLLOWING THE CLOSING DATE (THE "FILING DATE") OR IS NOT DECLARED EFFECTIVE
BY THE SEC WITHIN 180 DAYS FOLLOWING THE CLOSING DATE, OR WITHIN 90 DAYS OF
FILING IN THE CASE OF ADDITIONAL REGISTRABLE SECURITIES (THE "REGISTRATION
DATE"), OR (B) EXCEPT AS MAY BE PROVIDED IN SECTION 7(A) BELOW FOR AN ALLOWED
SUSPENSION PERIOD, AFTER A REGISTRATION STATEMENT HAS BEEN DECLARED EFFECTIVE BY
THE SEC, SALES CANNOT BE MADE PURSUANT TO SUCH REGISTRATION STATEMENT FOR ANY
REASON (INCLUDING WITHOUT LIMITATION BY REASON OF A STOP ORDER, OR THE COMPANY'S
FAILURE TO UPDATE THE REGISTRATION STATEMENT) BUT EXCEPT AS EXCUSED PURSUANT TO
7(A) BELOW OR IN THE EVENT THE REGISTRABLE SECURITIES ARE NOT THEN ISSUABLE,
THEN THE COMPANY WILL PAY TO THE PURCHASER, AS LIQUIDATED DAMAGES AND NOT AS A
PENALTY, CASH IN
the amount of one percent (1%) of the purchase price paid by the Purchaser for
the Shares for each 30 day calendar period during which any of the events
described in (A) or (B) above occurs and is continuing (the "Blackout Period").
Each such issuance shall be made within five (5) days of the end of each month
of the Blackout Period until the termination of the Blackout Period.
The
Blackout Period shall terminate upon the effectiveness of the applicable
Registration Statement in the case of (A) and (B) above.
3.
PIGGY-BACK REGISTRATION.
IF THE
COMPANY AT ANY TIME PROPOSES TO