EFFECTIVE DATE (THE "BLOCKOUT PERIOD"), THE COMPANY WILL NOT, DIRECTLY OR
INDIRECTLY, OFFER, SELL, GRANT ANY OPTION TO PURCHASE, OR OTHERWISE DISPOSE OF
(OR ANNOUNCE ANY OFFER, SALE, GRANT OR ANY OPTION TO PURCHASE OR OTHER
DISPOSITION OF) ANY OF ITS OR THE SUBSIDIARIES' EQUITY OR EQUITY EQUIVALENT
SECURITIES, INCLUDING, WITHOUT LIMITATION, ANY DEBT, PREFERRED STOCK OR OTHER
INSTRUMENT OR SECURITY THAT IS, AT ANY TIME DURING ITS LIFE AND UNDER ANY
CIRCUMSTANCES, CONVERTIBLE INTO OR EXCHANGEABLE OR EXERCISABLE FOR COMMON STOCK
OR COMMON STOCK EQUIVALENTS (ANY SUCH OFFER, SALE, GRANT, DISPOSITION OR
ANNOUNCEMENT BEING REFERRED TO AS A "SUBSEQUENT PLACEMENT").
(B)
THE BLOCKOUT PERIOD SET FORTH IN THE PRECEDING PARAGRAPH (A)
SHALL BE EXTENDED FOR THE NUMBER OF TRADING DAYS DURING SUCH PERIOD IN WHICH (I)
TRADING IN THE COMMON STOCK IS SUSPENDED BY ANY TRADING MARKET, (II) THE
REGISTRATION STATEMENT IS NOT EFFECTIVE, OR (III) THE PROSPECTUS INCLUDED IN THE
REGISTRATION STATEMENT MAY NOT BE USED BY THE PURCHASERS FOR THE RESALE OF
REGISTRABLE SECURITIES THEREUNDER, PROVIDED THAT THIS SECTION 4.7(B) SHALL NOT
APPLY ONCE THE BLOCKOUT PERIOD HAS EXPIRED.
(C)
FROM THE END OF THE BLOCKOUT PERIOD AND FOR SO LONG AS A
PURCHASER HOLDS 20% OF THE SHARES ORIGINALLY PURCHASED BY SUCH PURCHASER, THE
COMPANY WILL NOT,
23
DIRECTLY OR INDIRECTLY, EFFECT ANY SUBSEQUENT PLACEMENT UNLESS THE COMPANY SHALL
HAVE FIRST COMPLIED WITH THIS SECTION 4.7(C).
(I)
THE COMPANY SHALL DELIVER TO EACH
PURCHASER A WRITTEN NOTICE (THE "OFFER") OF ANY PROPOSED OR INTENDED ISSUANCE OR
SALE OR EXCHANGE OF THE SECURITIES BEING OFFERED (THE "OFFERED SECURITIES") IN A
SUBSEQUENT PLACEMENT, WHICH OFFER SHALL (W) IDENTIFY AND DESCRIBE THE OFFERED
SECURITIES, (X) DESCRIBE THE PRICE AND OTHER TERMS UPON WHICH THEY ARE TO BE
ISSUED, SOLD OR EXCHANGED, AND THE NUMBER OR AMOUNT OF THE OFFERED SECURITIES TO
BE ISSUED, SOLD OR EXCHANGED, (Y) IF KNOWN, IDENTIFY THE PERSONS OR ENTITIES TO
WHICH OR WITH WHICH THE OFFERED SECURITIES ARE TO BE OFFERED, ISSUED, SOLD OR
EXCHANGED AND (Z) OFFER TO ISSUE AND SELL TO OR EXCHANGE WITH EACH PURCHASER (A)
A PRO RATA PORTION OF FIFTY PERCENT (50%) OF THE OFFERED SECURITIES, BASED ON
SUCH PURCHASER'S PRO RATA PORTION OF THE AGGREGATE PURCHASE PRICE PAID BY THE
PURCHASERS FOR ALL OF THE SHARES PURCHASED HEREUNDER (THE "BASIC AMOUNT"), AND
(B) WITH RESPECT TO EACH PURCHASER THAT ELECTS TO PURCHASE ITS BASIC AMOUNT, ANY
ADDITIONAL PORTION OF THE OFFERED SECURITIES ATTRIBUTABLE TO THE BASIC AMOUNTS
OF OTHER PURCHASERS AS SUCH PURCHASER SHALL INDICATE IT WILL PURCHASE OR ACQUIRE
SHOULD THE OTHER PURCHASERS SUBSCRIBE FOR LESS THAN THEIR BASIC AMOUNTS (THE
"UNDERSUBSCRIPTION AMOUNT").
(II)
TO ACCEPT AN OFFER, IN WHOLE OR IN PART, A
PURCHASER MUST DELIVER A WRITTEN NOTICE TO THE COMPANY PRIOR TO THE END OF THE
FIFTH (5) TRADING DAY FROM THE DELIVERY OF THE OFFER, SETTING FORTH THE PORTION
OF THE PURCHASER'S BASIC AMOUNT THAT SUCH PURCHASER ELECTS TO PURCHASE AND, IF
SUCH PURCHASER SHALL ELECT TO PURCHASE ALL OF ITS BASIC