CONVERTIBLE SECURITY) OR (III) ANY
OPTION, WARRANT OR RIGHT TO ACQUIRE AN EQUITY SECURITY.
3.2
EXERCISE OF RIGHTS.
IF THE COMPANY PROPOSES
TO ISSUE ANY EQUITY SECURITIES IN ANY SALE THAT IS EXEMPT FROM REGISTRATION
UNDER THE SECURITIES ACT, IT SHALL GIVE THE INVESTOR WRITTEN NOTICE OF ITS
INTENTION, DESCRIBING THE EQUITY SECURITIES, THE PRICE AND THE TERMS AND
CONDITIONS UPON WHICH THE COMPANY PROPOSES TO ISSUE THE SAME.
THE INVESTOR
SHALL HAVE TWENTY (20) DAYS FROM THE GIVING OF SUCH WRITTEN NOTICE TO AGREE TO
PURCHASE UP TO ITS EQUITY PERCENTAGE OF THE EQUITY SECURITIES FOR THE PRICE AND
UPON THE TERMS AND CONDITIONS SPECIFIED IN THE COMPANY'S NOTICE BY GIVING NOTICE
TO THE COMPANY AND STATING THEREIN THE QUANTITY OF EQUITY SECURITIES (UP TO AN
AMOUNT NOT TO EXCEED INVESTOR'S EQUITY PERCENTAGE) IT AGREES TO PURCHASE.
IF
THE INVESTOR DECIDES TO WAIVE ITS PRE-EMPTIVE RIGHTS WITH RESPECT TO ANY SUCH
TRANSACTION, AND THE COMPANY DOES NOT ENTER INTO AN AGREEMENT FOR THE SALE OF
THE EQUITY SECURITIES WITHIN NINETY (90) DAYS OF SUCH WAIVER, OR IF SUCH
AGREEMENT IS NOT CONSUMMATED WITHIN SIXTY (60) DAYS OF THE EXECUTION THEREOF,
THE RIGHT PROVIDED HEREUNDER SHALL BE DEEMED TO BE REVIVED AND SUCH EQUITY
SHARES SHALL NOT BE OFFERED UNLESS FIRST REOFFERED TO THE INVESTOR IN ACCORDANCE
HEREWITH.
3.3
NO TERMINATION UPON WAIVER OF PRE-EMPTIVE
RIGHTS.
THE PRE-EMPTIVE RIGHTS ESTABLISHED BY THIS SECTION 3 SHALL NOT
TERMINATE NOR BE DEEMED TO BE WAIVED WITH RESPECT TO ANY SUBSEQUENT PRIVATE
PLACEMENT TRANSACTIONS IF THE INVESTOR OR ITS ASSIGNEES DO NOT EXERCISE THEIR
RIGHTS AS PROVIDED IN SECTION 3.2 TO PURCHASE EQUITY SECURITIES OFFERED TO THEM
PURSUANT TO SECTION 3.1.
THE PROVISIONS OF THIS SECTION 3 MAY BE AMENDED OR
WAIVED ONLY BY THE AGREEMENT OF THE COMPANY AND THE INVESTOR.
3.4
TRANSFER OF PRE-EMPTIVE RIGHTS.
THE INVESTOR
MAY ASSIGN ITS PRE-EMPTIVE RIGHTS UNDER THIS SECTION 3 IN WHOLE OR IN PART
PROVIDED THAT (I) EACH SUCH ASSIGNMENT SHALL BE IN CONNECTION WITH A TRANSFER TO
ONE INDIVIDUAL OR ENTITY OF A MINIMUM OF 500,000 SHARES ISSUED PURSUANT TO THE
SECURITIES PURCHASE AGREEMENT AND (II) THE INVESTOR MAY NOT ASSIGN ITS
PRE-EMPTIVE RIGHTS UNDER THIS SECTION 3 IN WHOLE OR IN PART TO (A) ANY
INDIVIDUALS OR ENTITIES WHOSE BUSINESS IS COMPETITIVE, IN WHOLE OR IN
SUBSTANTIAL PART, WITH THE BUSINESS OF THE COMPANY (EXCEPT TO THE EXTENT SUCH
TRANSFER IS TO PBL OR ANY OF ITS DIRECT OR INDIRECT WHOLLY-OWNED SUBSIDIARIES),
(B) INDIVIDUALS, ENTITIES OR ORGANIZATIONS (INCLUDING GOVERNMENTS OR
GOVERNMENTAL AGENCIES OR ORGANIZATIONS) THEN APPEARING ON THE LIST OF SPECIALLY
DESIGNATED NATIONAL AND BLOCKED PERSONS MAINTAINED BY THE U.S. OFFICE OF FOREIGN
ASSETS CONTROL ("OFAC") OR ENTITIES OR INDIVIDUALS, TRANSFER OF SUCH RIGHTS TO
WHOM MIGHT REASONABLY BE EXPECTED TO HAVE AN ADVERSE EFFECT ON THE ABILITY OF
THE COMPANY TO BID FOR AND RECEIVE GRANTS OR CONTRACTS FROM THE UNITED STATES
GOVERNMENT, AND (C) ENTITIES OR ORGANIZATIONS THEN CONTROLLED BY SUCH
INDIVIDUALS OR HAVING THEIR REGISTERED OFFICE, HEADQUARTERS OR PRIMARY