SECURITIES OR "BLUE
SKY" LAWS OF THE STATES OF THE UNITED STATES FOLLOWING THE CLOSING DATE;
PROVIDED, HOWEVER, THAT THE COMPANY
16
SHALL NOT FOR ANY SUCH PURPOSE BE REQUIRED TO QUALIFY GENERALLY TO TRANSACT
BUSINESS AS A FOREIGN CORPORATION IN ANY JURISDICTION WHERE IT IS NOT SO
QUALIFIED OR TO CONSENT TO GENERAL SERVICE OF PROCESS IN ANY SUCH JURISDICTION.
(C)
REPORTING STATUS.
UNTIL THE DATE ON WHICH
THE INVESTORS (AS DEFINED IN THE REGISTRATION RIGHTS AGREEMENT) SHALL HAVE SOLD
ALL THE CONVERSION SHARES, WARRANT SHARES AND INTEREST SHARES AND NONE OF THE
NOTES, WARRANTS OR ADDITIONAL INVESTMENT RIGHTS IS OUTSTANDING (THE "REPORTING
PERIOD"), AND OTHER THAN IN ACCORDANCE WITH THE NOTES, WARRANTS AND THE
ADDITIONAL INVESTMENT RIGHTS, THE COMPANY SHALL TIMELY FILE ALL REPORTS REQUIRED
TO BE FILED WITH THE SEC PURSUANT TO THE 1934 ACT, AND THE COMPANY SHALL
CONTINUE TO TIMELY FILE REPORTS UNDER THE 1934 ACT EVEN IF THE 1934 ACT OR THE
RULES AND REGULATIONS THEREUNDER WOULD OTHERWISE NO LONGER REQUIRE SUCH FILINGS.
(D)
USE OF PROCEEDS.
THE COMPANY WILL USE THE
PROCEEDS FROM THE SALE OF THE SECURITIES FOR GENERAL WORKING CAPITAL PURPOSES
AND TO FUND THE COMPANY'S LEASE RESTRUCTURING EFFORTS.
THE COMPANY WILL NOT USE
THE PROCEEDS FROM THE SALE OF THE SECURITIES FOR THE (I) REPAYMENT OF ANY
OUTSTANDING INDEBTEDNESS OF THE COMPANY OR ANY OF ITS SUBSIDIARIES OR (II)
REDEMPTION OR REPURCHASE OF ANY OF ITS EQUITY SECURITIES.
(E)
FINANCIAL INFORMATION.
THE COMPANY AGREES
TO SEND THE FOLLOWING TO EACH INVESTOR DURING THE REPORTING PERIOD (I) UNLESS
THE FOLLOWING ARE FILED WITH THE SEC THROUGH EDGAR AND ARE AVAILABLE TO THE
PUBLIC THROUGH THE EDGAR SYSTEM, WITHIN ONE (1) BUSINESS DAY AFTER THE FILING
THEREOF WITH THE SEC, A COPY OF ITS ANNUAL REPORTS ON FORM 10-K OR 10-KSB, ANY
INTERIM REPORTS OR ANY CONSOLIDATED BALANCE SHEETS, INCOME STATEMENTS,
STOCKHOLDERS' EQUITY STATEMENTS AND/OR CASH FLOW STATEMENTS FOR ANY PERIOD OTHER
THAN ANNUAL, ANY CURRENT REPORTS ON FORM 8-K AND ANY REGISTRATION STATEMENTS
(OTHER THAN ON FORM S-8) OR AMENDMENTS FILED PURSUANT TO THE 1933 ACT, (II) ON
THE SAME DAY AS THE RELEASE THEREOF, FACSIMILE COPIES OF ALL PRESS RELEASES
ISSUED BY THE COMPANY OR ANY OF ITS SUBSIDIARIES, AND (III) COPIES OF ANY
NOTICES AND OTHER INFORMATION MADE AVAILABLE OR GIVEN TO THE STOCKHOLDERS OF THE
COMPANY GENERALLY, CONTEMPORANEOUSLY WITH THE MAKING AVAILABLE OR GIVING THEREOF
TO THE STOCKHOLDERS; PROVIDED, HOWEVER, THAT THE COMPANY SHALL HAVE NO
OBLIGATION HEREUNDER TO PROVIDE COPIES OF ANY CORRESPONDENCE FILED WITH THE SEC,
INCLUDING, WITHOUT LIMITATION, ANY CONFIDENTIAL TREATMENT REQUESTS. FOR PURPOSES
OF THIS AGREEMENT, "BUSINESS DAY" MEANS ANY DAY OTHER THAN SATURDAY, SUNDAY OR
OTHER DAY ON WHICH COMMERCIAL BANKS IN THE CITY OF NEW YORK ARE AUTHORIZED OR
REQUIRED BY LAW TO REMAIN CLOSED.
(F)
LISTING.
THE COMPANY SHALL PROMPTLY
SECURE THE LISTING OF ALL OF THE REGISTRABLE SECURITIES (AS DEFINED IN THE
REGISTRATION RIGHTS AGREEMENT) UPON EACH NATIONAL SECURITIES EXCHANGE AND
AUTOMATED QUOTATION SYSTEM, IF ANY, UPON WHICH THE