AS THE COMPANY SHALL REASONABLY
DETERMINE IS NECESSARY TO QUALIFY THE SECURITIES FOR SALE TO THE BUYER AT THE
APPLICABLE CLOSING PURSUANT TO THIS AGREEMENT UNDER APPLICABLE SECURITIES OR
"BLUE SKY" LAWS OF THE STATES OF THE UNITED STATES (OR TO OBTAIN AN EXEMPTION
FROM SUCH QUALIFICATION), AND SHALL PROVIDE EVIDENCE OF ANY SUCH ACTION SO TAKEN
TO THE BUYER ON OR PRIOR TO THE CLOSING DATE.
C.
USE OF PROCEEDS.
THE COMPANY SHALL USE THE PROCEEDS FROM
THE SALE OF THE NOTE IN THE MANNER SET FORTH IN SCHEDULE 4(D) ATTACHED HERETO
AND MADE A PART HEREOF AND SHALL NOT, DIRECTLY OR INDIRECTLY, USE SUCH PROCEEDS
FOR ANY LOAN TO OR INVESTMENT IN ANY OTHER CORPORATION, PARTNERSHIP, ENTERPRISE
OR OTHER PERSON (EXCEPT IN CONNECTION WITH ITS CURRENTLY EXISTING DIRECT OR
INDIRECT SUBSIDIARIES).
D.
RIGHT OF FIRST REFUSAL.
UNLESS IT SHALL HAVE FIRST
DELIVERED TO THE BUYER, AT LEAST SEVENTY TWO (72) HOURS PRIOR TO THE CLOSING OF
SUCH FUTURE OFFERING (AS DEFINED HEREIN), WRITTEN NOTICE DESCRIBING THE PROPOSED
FUTURE OFFERING, INCLUDING THE TERMS AND CONDITIONS THEREOF AND PROPOSED
DEFINITIVE DOCUMENTATION TO BE ENTERED INTO IN CONNECTION THEREWITH, AND
PROVIDING THE BUYER AN OPTION DURING THE SEVENTY TWO (72) HOUR PERIOD FOLLOWING
DELIVERY OF SUCH NOTICE TO PURCHASE THE SECURITIES BEING OFFERED IN THE FUTURE
OFFERING ON THE SAME TERMS AS CONTEMPLATED BY SUCH FUTURE OFFERING (THE
LIMITATIONS REFERRED TO IN THIS SENTENCE AND THE PRECEDING SENTENCE ARE
COLLECTIVELY REFERRED TO AS THE "RIGHT OF FIRST REFUSAL") (AND SUBJECT TO THE
EXCEPTIONS DESCRIBED BELOW), THE COMPANY WILL NOT CONDUCT ANY EQUITY FINANCING
(INCLUDING DEBT WITH AN EQUITY COMPONENT) ("FUTURE OFFERINGS") DURING THE PERIOD
BEGINNING ON THE CLOSING DATE AND ENDING TWELVE (12) MONTHS FOLLOWING THE
CLOSING DATE.
IN THE EVENT THE TERMS AND CONDITIONS OF A PROPOSED FUTURE
OFFERING ARE AMENDED IN ANY RESPECT AFTER DELIVERY OF THE NOTICE TO THE BUYER
CONCERNING THE PROPOSED FUTURE OFFERING, THE COMPANY SHALL DELIVER A NEW NOTICE
TO THE BUYER DESCRIBING THE AMENDED TERMS AND CONDITIONS OF THE PROPOSED FUTURE
OFFERING AND THE BUYER THEREAFTER SHALL HAVE AN OPTION DURING THE SEVENTY TWO
(72) HOUR PERIOD FOLLOWING DELIVERY OF SUCH NEW NOTICE TO PURCHASE ITS PRO RATA
SHARE OF THE SECURITIES BEING OFFERED ON THE SAME TERMS AS CONTEMPLATED BY SUCH
PROPOSED FUTURE OFFERING, AS AMENDED.
THE FOREGOING SENTENCE SHALL APPLY TO
SUCCESSIVE AMENDMENTS TO THE TERMS AND CONDITIONS OF ANY
13
PROPOSED FUTURE OFFERING.
THE RIGHT OF FIRST REFUSAL SHALL NOT APPLY TO ANY
TRANSACTION INVOLVING (I) ISSUANCES OF SECURITIES IN A FIRM COMMITMENT
UNDERWRITTEN PUBLIC OFFERING (EXCLUDING A CONTINUOUS OFFERING PURSUANT TO RULE
415 UNDER THE 1933 ACT) OR (II) ISSUANCES OF SECURITIES AS CONSIDERATION FOR A
MERGER, CONSOLIDATION OR PURCHASE OF ASSETS, OR IN CONNECTION WITH ANY STRATEGIC
PARTNERSHIP OR JOINT VENTURE (THE PRIMARY PURPOSE OF WHICH IS NOT TO RAISE
EQUITY CAPITAL), OR IN CONNECTION WITH THE DISPOSITION OR ACQUISITION OF A
BUSINESS, PRODUCT OR LICENSE BY THE COMPANY.
THE RIGHT OF FIRST REFUSAL ALSO
SHALL NOT APPLY