with or prior to the
Closing Date, the Company shall have sold securities to third party purchasers,
who are not acting in concert with the Purchasers, for an aggregate of a minimum
of $3,500,000 and a maximum of $5,500,000. The securities sold to any such third
party purchasers shall be on, and have, such terms and conditions as the Company
shall determine in its sole discretion.
REGISTRATION RIGHTS
SHELF REGISTRATION
AS PROMPTLY AS POSSIBLE, AND IN ANY EVENT ON OR PRIOR TO THE FILING DATE, THE
COMPANY SHALL PREPARE AND FILE WITH THE COMMISSION A "SHELF" REGISTRATION
STATEMENT COVERING THE RESALE OF ALL REGISTRABLE SECURITIES FOR AN OFFERING TO
BE MADE ON A CONTINUOUS BASIS PURSUANT TO RULE 415.
THE REGISTRATION STATEMENT
SHALL BE ON FORM S-3 (EXCEPT IF THE COMPANY IS NOT THEN ELIGIBLE TO REGISTER FOR
RESALE THE REGISTRABLE SECURITIES ON FORM S-3, IN WHICH CASE SUCH REGISTRATION
SHALL BE ON ANOTHER APPROPRIATE FORM IN ACCORDANCE HEREWITH AS THE PURCHASERS
MAY CONSENT IN WRITING) AND SHALL CONTAIN (EXCEPT IF OTHERWISE DIRECTED BY THE
PURCHASERS) THE "PLAN OF DISTRIBUTION" ATTACHED HERETO AS EXHIBIT C.
THE COMPANY SHALL USE COMMERCIALLY REASONABLE EFFORTS TO CAUSE THE REGISTRATION
STATEMENT TO BE DECLARED EFFECTIVE BY THE COMMISSION AS PROMPTLY AS POSSIBLE
AFTER THE FILING THEREOF, BUT IN ANY EVENT PRIOR TO THE REQUIRED EFFECTIVENESS
DATE, AND SHALL USE COMMERCIALLY REASONABLE EFFORTS TO KEEP THE REGISTRATION
STATEMENT CONTINUOUSLY EFFECTIVE UNDER THE SECURITIES ACT UNTIL THE EARLIER OF
(I) THE DATE WHEN ALL REGISTRABLE SECURITIES COVERED BY SUCH REGISTRATION
STATEMENT HAVE BEEN RESOLD EITHER UNDER THE REGISTRATION STATEMENT OR PURSUANT
TO RULE 144, AND (II) THE
18
DATE ON WHICH ALL REGISTRABLE SECURITIES MAY BE SOLD WITHOUT RESTRICTION OR
LIMITATION PURSUANT TO PARAGRAPH (K) OF RULE 144 ("EFFECTIVENESS PERIOD").
THE COMPANY SHALL NOTIFY EACH PURCHASER IN WRITING PROMPTLY (AND IN ANY EVENT
WITHIN ONE TRADING DAY) AFTER RECEIVING NOTIFICATION FROM THE COMMISSION THAT
THE REGISTRATION STATEMENT HAS BEEN DECLARED EFFECTIVE.
COMMENCING UPON THE OCCURRENCE OF ANY EVENT (AS DEFINED BELOW) AND UNTIL THE
APPLICABLE EVENT IS CURED, AS PARTIAL RELIEF FOR THE DAMAGES SUFFERED THEREFROM
BY THE PURCHASERS (WHICH REMEDY SHALL NOT BE EXCLUSIVE OF ANY OTHER REMEDIES
AVAILABLE UNDER THIS AGREEMENT, AT LAW OR IN EQUITY), THE COMPANY SHALL PAY UPON
THE OCCURRENCE OF SUCH EVENT AND ON EVERY MONTHLY ANNIVERSARY THEREOF TO EACH
PURCHASER AN AMOUNT IN CASH, AS DAMAGES AND NOT AS A PENALTY, EQUAL TO 1.5% OF
THE GREATER OF (I) THE AGGREGATE PURCHASE PRICE PAID BY SUCH PURCHASER HEREUNDER
AND (II) THE MARKET VALUE OF THE SHARES THEN OUTSTANDING, IN EACH CASE, PRORATED
FOR ANY PARTIAL MONTH.
THE PAYMENTS TO WHICH A PURCHASER SHALL BE ENTITLED
PURSUANT TO THIS SECTION 6.1(D) ARE REFERRED TO HEREIN AS "EVENT PAYMENTS".
ANY
EVENT PAYMENTS PAYABLE PURSUANT TO THE TERMS HEREOF SHALL APPLY ON A PRO-RATA
BASIS FOR ANY PORTION OF A MONTH PRIOR TO THE CURE OF AN EVENT. IN THE EVENT THE
COMPANY FAILS TO MAKE EVENT PAYMENTS IN A TIMELY