Common use of Nasdaq Rule Clause in Contracts

Nasdaq Rule. The Purchasers shall, in the aggregate, be entitled to convert Notes and exercise Warrants into a total of up to 19.99% of the Company's outstanding common stock issued and outstanding on the date hereof (which number shall at least equal 9,270,639 shares) (the "MAXIMUM SHARE AMOUNT"), which number shall be subject to readjustment for any stock split, stock dividend or reclassification of the Common Stock) (the "NASDAQ CAP"). Each Purchaser shall be entitled to convert that amount of its Notes and exercise that amount of its Warrants into such total number of Common Stock equal to such Purchaser's pro rata share of the Nasdaq Cap. Once a Purchaser has received its total pro rata share upon conversion of its Notes and exercise of its Warrants, it may cause (but only if the Company has failed by November 15, 2000 to receive shareholder approval to authorize and issue all shares of Common Stock issuable upon exercise of the Warrants and conversion of the Notes (the "REQUISITE VOTE")) the Company to redeem its remaining Notes at a price equal to the Premium Redemption Price (as defined in the Investors' Rights Agreement) plus accrued but unpaid interest and default payments in effect at that time. If Purchaser has converted all of its Notes and exercised all of its Warrants, but has not depleted the total number of pro rata shares allocated to it, its remaining pro rata shares shall be reallocated amongst the Purchasers still holding Notes on a pro rata basis based on Relative Percentages. The restrictions and redemption obligations set forth in this Section 5.15 shall cease to apply if (a) the Company obtains the Requisite Vote to issue all Common Shares issuable upon exercise of the Warrants and conversion of the Notes or (b) the Company provides the Purchasers with irrevocable written notice, based upon the advice of its counsel, that any such issuance of Common Shares upon conversion of the Notes and exercise of the Warrants is not subject to the Nasdaq Cap pursuant to Nasdaq Rule 4460. The Company will use its best efforts promptly to obtain either the Requisite Vote or the irrevocable notice described in the preceding sentence and to provide the Purchasers with a copy of same. Without limiting the foregoing, the Company shall solicit and use its best efforts to obtain the Requisite Vote no later than November 15, 2000, will solicit proxies in favor of issuing all Common Shares issuable upon exercise of the Warrants and conversion of the Notes and will use its best efforts to have all affiliates of the Company which own or control shares of Common Stock to vote their shares in favor of such resolution. If the Company shall fail to obtain the Requisite Vote by November 15, 2000, then any Purchaser may but shall not be obligated to cause the Company to repurchase all its Notes, Conversion Shares, Warrants and Warrant Shares at the applicable Premium Redemption Price.

Nasdaq Rule. The Purchasers shallNotwithstanding anything contained herein, the Preferred Stock and Warrants shall not be convertible and exercisable to the extent that in the aggregate, be entitled to convert Notes and exercise Warrants into a total excess of up to 2,817,296 shares of Common Stock (19.99% of the Company's outstanding common stock Common Stock issued and outstanding on the date hereof (which number shall at least equal 9,270,639 shares) (the "MAXIMUM SHARE AMOUNT")hereof, which number shall be subject to readjustment for any stock split, stock dividend or reclassification of the Common Stock) (the "NASDAQ CAP20% Cap")) would be issued thereon, unless the Company receives stockholder approval for such issuance. Each Purchaser shall be entitled to convert that amount of its Notes and exercise that amount of its Warrants into such total receive the number of Common Stock Registrable Securities equal to such Purchaser's pro rata share of the Nasdaq Cap20% Cap (based upon its aggregate Purchase Price hereunder). Once a Purchaser has received its total pro rata share upon conversion of its Notes Preferred Shares and exercise of its Warrants, it may cause (but only and if the Company has failed shall not have complied with its obligations to obtain the stockholder approval described below by November 15the date set forth below, 2000 it shall have the right to receive shareholder approval to authorize and issue all shares of Common Stock issuable upon exercise of the Warrants and conversion of the Notes (the "REQUISITE VOTE")) compel the Company to redeem its remaining Notes Preferred Shares and Warrants at a price equal to the Premium Redemption Price (as defined in the Investors' Registration Rights Agreement) plus accrued but unpaid interest dividends and default payments liquidated damages in effect at that time. If a Purchaser has converted all of its Notes and exercised all of its Preferred Shares and Warrants, but has not depleted the total number of pro rata shares allocated to it, its remaining pro rata shares shall be reallocated amongst the Purchasers still holding Notes Preferred Shares and Purchasers Warrants on a pro rata basis based on Relative Percentagesbasis. The restrictions and redemption obligations set forth Company agrees that if at any point in this Section 5.15 shall cease to apply if time (athe "Trigger Date") the Company obtains the Requisite Vote to issue all number of Common Shares issuable upon full conversion of all the Preferred Shares and full exercise of all the Warrants and then outstanding (without regard to any limitations on beneficial ownership contained in the Certificate or Warrants), together with the number of Common Shares already issued by the Company upon conversion of Preferred Shares and exercise of Warrants, would exceed 85% of the Notes or (b) 20% Cap, then the Company provides shall promptly call a shareholders meeting to obtain shareholder approval for the Purchasers with irrevocable written notice, based upon the advice of its counsel, that any such issuance of Common Shares upon conversion hereunder in excess of the Notes and exercise 20% Cap. If such shareholder approval is not obtained within 60 days of the Trigger Date, then each holder of Preferred Shares and Warrants is not subject shall have the right to sell to the Nasdaq Company such number of Preferred Shares and/or Warrants which cannot be converted or exercised due to such 20% Cap pursuant limitation at a redemption price equal to Nasdaq Rule 4460the Premium Redemption Price. The Company will use its best efforts promptly Subject to obtain either any consent or approval rights of the Requisite Vote or the irrevocable notice described Purchasers hereunder, in the preceding sentence and to provide event the Purchasers with a copy Company contemplates an offering of same. Without limiting its equity or debt securities within six months of the foregoingdate hereof, the Company agrees that, upon the reasonable request of at least 75% of the Purchasers, the Company shall solicit first disclose the terms and use its best efforts conditions and other relevant facts of such proposed transaction to Nasdaq and seek to obtain from Nasdaq its assurance that such transaction will not be integrated with the Requisite Vote no later than November 15, 2000, will solicit proxies in favor offering which is the subject of issuing all Common Shares issuable upon exercise this Agreement for purposes of the Warrants and conversion Nasdaq rules requiring shareholder approval of the Notes and will use its best efforts to have all affiliates issuance of 20% or more of an issuer's outstanding common stock. In the event that (i) the Company which own fails to seek such assurances, or control shares (ii) the Company proceeds with such other transaction after not receiving a response from Nasdaq and such other transaction is integrated with this offering, then, at the election of Common Stock to vote their shares in favor of such resolution. If a Purchaser, the Company shall fail to obtain the Requisite Vote by November 15, 2000, then redeem within five (5) days any Purchaser may but shall not be obligated to cause the Company to repurchase or all its Notes, Conversion Shares, Warrants and Warrant Shares Securities at the applicable Premium Redemption Price.