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
(SUCH NUMBER OF REGISTRABLE SECURITIES TO BE BASED ON THE CONVERSION PRICE AFTER
GIVING EFFECT TO THE PRICE RESET) 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.
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, 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 FILE A REGISTRATION STATEMENT UNDER THE
SECURITIES ACT ON ANY FORM (OTHER THAN