PURPOSES OF THIS
AGREEMENT (INCLUDING THIS SECTION 1.1(D)).
(E)
DEFERRAL OR SUSPENSION DURING A BLACKOUT PERIOD.
NOTWITHSTANDING THE
PROVISIONS OF SECTION 1.1(D), IF IN THE GOOD FAITH JUDGMENT OF THE COMPANY,
FOLLOWING CONSULTATION WITH LEGAL COUNSEL, IT WOULD BE DETRIMENTAL TO THE
COMPANY OR ITS STOCKHOLDERS FOR THE REGISTRATION STATEMENT TO BE FILED OR FOR
RESALES OF REGISTRABLE SECURITIES TO BE MADE PURSUANT TO THE REGISTRATION
STATEMENT DUE TO (I) THE EXISTENCE OF A MATERIAL DEVELOPMENT OR POTENTIAL
MATERIAL DEVELOPMENT INVOLVING THE COMPANY THAT THE COMPANY WOULD BE OBLIGATED
TO DISCLOSE OR INCORPORATE BY REFERENCE IN THE REGISTRATION STATEMENT AND WHICH
THE COMPANY HAS NOT
2
DISCLOSED, OR WHICH DISCLOSURE WOULD BE PREMATURE OR OTHERWISE INADVISABLE AT
SUCH TIME OR WOULD HAVE A MATERIAL ADVERSE EFFECT ON THE COMPANY OR ITS
STOCKHOLDERS, OR (II) A FILING OF A COMPANY-INITIATED REGISTRATION OF ANY CLASS
OF ITS EQUITY SECURITIES, WHICH, IN THE GOOD FAITH JUDGMENT OF THE COMPANY,
WOULD ADVERSELY AFFECT OR REQUIRE PREMATURE DISCLOSURE OF THE FILING OF SUCH
COMPANY-INITIATED REGISTRATION (NOTICE THEREOF, A "BLACKOUT NOTICE"), THE
COMPANY SHALL HAVE THE RIGHT TO (A) IMMEDIATELY DEFER THE FILING OF THE
REGISTRATION STATEMENT FOR A PERIOD OF NOT MORE THAN SIXTY (60) DAYS BEYOND THE
DATE BY WHICH SUCH REGISTRATION STATEMENT WAS OTHERWISE REQUIRED HEREUNDER TO BE
FILED OR (B) SUSPEND USE OF SUCH REGISTRATION STATEMENT FOR A PERIOD OF NOT MORE
THAN THIRTY (30) DAYS (ANY SUCH DEFERRAL OR SUSPENSION PERIOD, A "BLACKOUT
PERIOD").
THE INVESTOR ACKNOWLEDGES THAT IT WOULD BE SERIOUSLY DETRIMENTAL TO
THE COMPANY AND ITS STOCKHOLDERS FOR SUCH REGISTRATION STATEMENT TO BE FILED (OR
REMAIN IN EFFECT) DURING A BLACKOUT PERIOD AND THEREFORE ESSENTIAL TO DEFER SUCH
FILING (OR SUSPEND THE USE THEREOF) DURING SUCH BLACKOUT PERIOD AND AGREES TO
CEASE ANY DISPOSITION OF THE REGISTRABLE SECURITIES DURING SUCH BLACKOUT
PERIOD.
THE COMPANY MAY NOT UTILIZE ANY OF ITS RIGHTS UNDER THIS
SECTION 1.1(E) TO DEFER THE FILING OF A REGISTRATION STATEMENT (OR SUSPEND ITS
EFFECTIVENESS) MORE THAN SIX (6) TIMES IN ANY TWELVE (12) MONTH PERIOD.
IN THE
EVENT THAT, WITHIN FIFTEEN (15) TRADING DAYS FOLLOWING ANY SETTLEMENT DATE, THE
COMPANY GIVES A BLACKOUT NOTICE TO THE INVESTOR AND THE VWAP ON THE TRADING DAY
IMMEDIATELY PRECEDING SUCH BLACKOUT PERIOD ("OLD VWAP") IS GREATER THAN THE VWAP
ON THE FIRST TRADING DAY FOLLOWING SUCH BLACKOUT PERIOD THAT THE INVESTOR MAY
SELL ITS REGISTRABLE SECURITIES PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
("NEW VWAP"), THEN THE COMPANY SHALL PAY TO THE INVESTOR, BY WIRE TRANSFER OF
IMMEDIATELY AVAILABLE FUNDS TO AN ACCOUNT DESIGNATED BY THE INVESTOR, THE
"BLACKOUT AMOUNT."
FOR THE PURPOSES OF THIS AGREEMENT, BLACKOUT AMOUNT MEANS A
PERCENTAGE EQUAL TO: (1) ONE HUNDRED PERCENT (100%) IF SUCH BLACKOUT NOTICE IS
DELIVERED PRIOR TO THE FIFTH (5TH) TRADING DAY FOLLOWING SUCH SETTLEMENT DATE;
(2) SEVENTY-FIVE PERCENT (75%) IF SUCH BLACKOUT NOTICE IS DELIVERED ON OR AFTER
THE FIFTH (5TH) TRADING DAY FOLLOWING SUCH SETTLEMENT DATE, BUT PRIOR TO THE
TENTH (10TH) TRADING DAY FOLLOWING SUCH SETTLEMENT DATE;