any Investor Shares.
6.
Investor Rights.
6.1
Preemptive Rights.
(A)
INVESTOR RIGHT.
SUBJECT TO THE TERMS AND CONDITIONS CONTAINED IN
THIS SECTION 6.1, IN THE EVENT THAT THE COMPANY OFFERS ANY EQUITY SECURITIES FOR
SALE (INCLUDING, WITHOUT LIMITATION, SECURITIES CONVERTIBLE INTO OR EXCHANGEABLE
FOR EQUITY SECURITIES OF THE COMPANY) (THE "NEW SECURITIES"), THE INVESTOR HAS
THE RIGHT TO PURCHASE ITS PRO RATA PORTION OF THE NEW SECURITIES ON THE SAME
TERMS AND CONDITIONS AS OFFERED TO ANY THIRD PARTY.
(B)
NOTICE OF RIGHT.
IN THE EVENT THE COMPANY PROPOSES TO UNDERTAKE
AN ISSUANCE OF NEW SECURITIES, IT SHALL GIVE THE INVESTOR WRITTEN NOTICE OF ITS
INTENTION, DESCRIBING IN REASONABLE DETAIL THE TYPE OF SECURITIES AND THE PRICE
AND TERMS UPON WHICH THE COMPANY PROPOSES TO ISSUE THE SAME. THE INVESTOR SHALL
HAVE TEN (10) DAYS FROM THE DATE OF DELIVERY OF ANY SUCH NOTICE TO AGREE TO
PURCHASE UP TO ITS PRO RATA PORTION OF SUCH NEW
11
SECURITIES, FOR THE PRICE AND UPON THE TERMS SPECIFIED IN THE NOTICE, BY
DELIVERING WRITTEN NOTICE TO THE COMPANY AND STATING THEREIN THE QUANTITY OF NEW
SECURITIES TO BE PURCHASED.
(C)
LAPSE AND REINSTATEMENT OF RIGHT.
THE COMPANY SHALL HAVE SIXTY
(60) DAYS FOLLOWING THE TEN- (10-) DAY PERIOD DESCRIBED IN SECTION 6.1(B) TO
SELL OR ENTER INTO AN AGREEMENT (PURSUANT TO WHICH THE SALE OF NEW SECURITIES
COVERED THEREBY SHALL BE CLOSED, IF AT ALL, WITHIN FORTY-FIVE (45) DAYS FROM THE
DATE OF SAID AGREEMENT) TO SELL THE NEW SECURITIES WITH RESPECT TO WHICH THE
INVESTOR'S PREEMPTIVE RIGHT WAS NOT EXERCISED, AT A PRICE AND UPON TERMS NO MORE
FAVORABLE TO THE PURCHASERS OF SUCH SECURITIES THAN SPECIFIED IN THE COMPANY'S
NOTICE.
IN THE EVENT THE COMPANY HAS NOT SOLD THE NEW SECURITIES OR ENTERED
INTO AN AGREEMENT TO SELL THE NEW SECURITIES WITHIN SAID SIXTY- (60-) DAY PERIOD
(OR SOLD AND ISSUED NEW SECURITIES IN ACCORDANCE WITH THE FOREGOING WITHIN
FORTY-FIVE (45) DAYS FROM THE DATE OF SAID AGREEMENT), THE COMPANY SHALL NOT
THEREAFTER ISSUE OR SELL ANY NEW SECURITIES WITHOUT FIRST OFFERING SUCH
SECURITIES TO THE INVESTOR IN THE MANNER PROVIDED ABOVE.
(D)
EXCLUDED SECURITIES.
NOTWITHSTANDING THE FOREGOING, AND PROVIDED
THAT SUCH ISSUANCES SHALL NOT RESULT IN OR CAUSE THE INVESTOR TO HOLD LESS THAN
TWENTY PERCENT (20%) OF THE THEN OUTSTANDING COMMON STOCK, ASSUMING FULL
EXERCISE AND/OR CONVERSION OF ALL THE THEN OUTSTANDING COMPANY SECURITIES
(INCLUDING OPTIONS, WARRANTS, STOCK UNITS AND SIMILAR INSTRUMENTS) EXERCISABLE
AND/OR CONVERTIBLE INTO THE COMPANY'S COMMON STOCK, THE FOLLOWING ISSUANCES
SHALL CONSTITUTE "EXCLUDED SECURITIES" AND SHALL NOT TRIGGER THE PREEMPTIVE
RIGHTS SET FORTH IN SECTION 6.1(A) ABOVE:
(I)
THE INVESTOR SHARES;
(II)
COMMON STOCK ISSUED IN CONNECTION WITH ANY STOCK SPLIT, STOCK
DIVIDEND, OR ANY SUBDIVISION OF SHARES OF COMMON STOCK BY THE COMPANY OR THE
CONVERSION OF COMMON STOCK INTO ANOTHER CLASS OF CAPITAL STOCK;
(III)
COMMON STOCK (OR OPTIONS TO PURCHASE SUCH SHARES OF COMMON STOCK)
ISSUED OR ISSUABLE TO CURRENT, FORMER OR FUTURE EMPLOYEES OR DIRECTORS OF, OR
CONSULTANTS TO,