THE WARRANTS, AND RESALE OF THE SHARES OF COMMON STOCK UNDERLYING
SUCH SECURITIES.
7.
REISSUANCE OF SECURITIES.
THE COMPANY AGREES TO REISSUE
CERTIFICATES REPRESENTING THE SHARES AND THE WARRANT SHARES WITHOUT THE LEGENDS
SET FORTH IN SECTIONS 4(E) AND 4(F) ABOVE AT SUCH TIME AS (A) THE HOLDER THEREOF
IS PERMITTED TO AND DISPOSES OF THE SECURITIES PURSUANT TO RULE 144(D) AND/OR
RULE 144(K) UNDER THE 1933 ACT IN THE OPINION OF COUNSEL REASONABLY SATISFACTORY
TO THE COMPANY, OR (B) UPON RESALE SUBJECT TO AN EFFECTIVE
11
REGISTRATION STATEMENT AFTER THE SHARES OF COMMON STOCK UNDERLYING THE SERIES B
PREFERRED STOCK AND THE WARRANTS ARE REGISTERED UNDER THE 1933 ACT.
THE COMPANY
AGREES TO COOPERATE WITH EACH SUBSCRIBER IN CONNECTION WITH ALL RESALES PURSUANT
TO RULE 144(D) AND RULE 144(K) AND PROVIDE LEGAL OPINIONS AT THE COMPANY'S
EXPENSE NECESSARY TO ALLOW SUCH RESALES PROVIDED THE COMPANY AND ITS COUNSEL
RECEIVE REASONABLY REQUESTED WRITTEN REPRESENTATIONS FROM EACH SUBSCRIBER AND
SELLING BROKER, IF ANY.
PROVIDED EACH SUBSCRIBER PROVIDES REQUIRED
CERTIFICATIONS AND REPRESENTATION LETTERS, IF ANY, IF THE COMPANY FAILS TO
REMOVE ANY LEGEND AS REQUIRED BY THIS SECTION 7 (A "LEGEND REMOVAL FAILURE"),
THEN BEGINNING ON THE TENTH (10TH) DAY FOLLOWING THE DATE THAT EACH SUBSCRIBER
HAS REQUESTED THE REMOVAL OF THE LEGEND AND DELIVERED ALL ITEMS REASONABLY
REQUIRED BY THE COMPANY TO BE DELIVERED BY EACH SUBSCRIBER, THAT THE COMPANY
CONTINUES TO FAIL TO REMOVE SUCH LEGEND, THE COMPANY SHALL PAY TO EACH
SUBSCRIBER OR ASSIGNEE HOLDING SHARES OF COMMON STOCK UNDERLYING THE SHARES AND
WARRANTS, SUBJECT TO A LEGEND REMOVAL FAILURE, AS LIQUIDATED DAMAGES AND NOT A
PENALTY AN AMOUNT EQUAL TO TEN PERCENT (10%) OF THE PURCHASE PRICE OF THE SHARES
AND SHARES OF COMMON STOCK UNDERLYING THE SHARES SUBJECT TO A LEGEND REMOVAL
FAILURE FOR EACH 15-DAY PERIOD OR PART THEREOF THAT SUCH FAILURE CONTINUES.
IF
DURING ANY TWELVE (12) MONTH PERIOD, THE COMPANY FAILS TO REMOVE ANY LEGEND AS
REQUIRED BY THIS SECTION 7 FOR AN AGGREGATE OF THIRTY (30) DAYS, EACH SUBSCRIBER
OR ASSIGNEE HOLDING SECURITIES SUBJECT TO A LEGEND REMOVAL FAILURE MAY, AT ITS
OPTION, REQUIRE THE COMPANY TO PURCHASE ALL OR ANY PORTION OF THE SHARES OR
SHARES OF COMMON STOCK UNDERLYING THE SHARES AND WARRANTS SUBJECT TO A LEGEND
REMOVAL FAILURE HELD BY EACH SUBSCRIBER OR ASSIGNEE AT A PRICE PER SHARE EQUAL
TO 110% OF THE PURCHASE PRICE OF SUCH SHARES.
8.
NASD MEMBER FIRM COMPENSATION.
THE COMPANY ON THE ONE HAND, AND
EACH SUBSCRIBER ON THE OTHER HAND, AGREE TO INDEMNIFY THE OTHER AGAINST AND HOLD
THE OTHER HARMLESS FROM ANY AND ALL LIABILITIES TO ANY PERSONS CLAIMING
BROKERAGE COMMISSIONS ON ACCOUNT OF SERVICES PURPORTED TO HAVE BEEN RENDERED ON
BEHALF OF THE INDEMNIFYING PARTY IN CONNECTION WITH THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY AND ARISING OUT OF SUCH PARTY'S ACTIONS.
9.
COVENANTS OF THE COMPANY.
THE COMPANY COVENANTS AND AGREES WITH
THE SUBSCRIBERS THAT FROM THE CLOSING DATE UNTIL THE EARLIER OF (I) THE
SUBSCRIBERS OWN LESS THAN