Common use of Right of Clause in Contracts

Right of. First Refusal ---------------------- 3.1 Rights of Investor ------------------ (a) Until the first date on which the Investor or any Permitted Transferee (as defined below) owns less than a majority, by voting power, of the outstanding shares of capital stock of the Company (assuming the exercise and conversion of all outstanding options, warrants and convertible securities), the Company shall not issue or sell (i) any shares of its Common Stock, (ii) any other voting equity securities of the Company, including, without limitation, shares of preferred stock, (iii) any option, warrant or other right to subscribe for, purchase or otherwise acquire any voting equity securities of the Company, or (iv) any debt securities convertible into voting capital stock of the Company (collectively, the "Offered Securities"), unless in each such case the Company shall have first complied with this Section 3.1. The Company shall deliver to the Investor a written notice of any proposed or intended issuance or sale of Offered Securities (the "Offer"), which Offer shall (i) identify and describe the Offered Securities, (ii) describe the price and other terms upon which they are to be issued or sold, and the number or amount of the Offered Securities to be issued or sold, (iii) identify the persons or entities (if known) to which or with which the Offered Securities are to be offered, issued or sold and (iv) offer to issue and sell to the Investor a number of the Offered Securities (the "Available Amount") such that, after the issuance and sale of all of the Offered Securities, including the purchase of the Available Amount by the Investor, the Investor would own at least a majority, by voting power, of the outstanding capital stock of the Company (assuming the exercise and conversion of all outstanding options, warrants and convertible securities). The Company shall not be required to offer any Offered Securities to the Investor hereunder if, after the issuance and sale thereof, the Investor (or the Permitted Transferee) would continue to own at least a majority, by voting power, of the outstanding capital stock of the Company (assuming the exercise and conversion of all outstanding options, warrants and convertible securities). (b) To accept an Offer, in whole or in part, the Investor must deliver a written notice to the Company within 20 days after its receipt of the Offer, setting forth the portion of the Available Amount that the Investor elects to purchase (the "Notice of Acceptance"). (c) The Company shall have 180 days from the expiration of the period set forth in Section 3.1(b) above to issue or sell all or any part of such Offered Securities as to which a Notice of Acceptance has not been given by the Investor, upon terms and conditions which are not more favorable, in the aggregate, to the acquiring person or persons or less favorable to the Company than those set forth in the Offer. If the consideration to be received by the Company from the sale of Offered Securities consists of anything other than cash, the Board of Directors of the Company shall in good faith determine the cash equivalent of such non-cash consideration and the Investor may pay an equivalent portion of its purchase price for the Offered Securities in cash. (d) The purchase by the Investor of any Offered Securities is subject in all cases to the preparation, execution and delivery by the Company and the Investor of a purchase agreement relating to such Offered Securities reasonably satisfactory in form and substance to the Investor. (e) The rights of the Investor under this Section 3 shall not apply to the grant of options to officers, directors, consultants and employees of the Company or any subsidiary pursuant to any plan, agreement or arrangement approved by a vote of not less than a majority of the members of the Board of Directors of the Company, provided, however, that if the exercise of any such -------- options results in the reduction of the Investor's, or Permitted Transferee's, ownership to less than a majority, by voting power, of the outstanding capital stock of the Company, the Company shall so notify the Investor (or Permitted Transferee), and the Investor or Permitted Transferee shall have the right, within 30 days after such notice, to purchase from the Company, at a price equal to the then Fair Market Value (as defined below) thereof, such number of shares of Common Stock as would increase its ownership to a majority, by voting power, of the outstanding capital stock of the Company. "Fair Market Value" shall mean the average closing price of the Common Stock, on the NASDAQ National Market (or other principal securities exchange on which the Common Stock is traded), during the 10-day period ending on the day prior to the date of purchase.

Right of. First Refusal ---------------------- 3.1 Rights of Investor ------------------ (a) Until the first date on which the Investor or any Permitted Transferee (as defined below) owns less than a majority, by voting power, of the outstanding shares of capital stock of the Company (assuming the exercise and conversion of all outstanding options, warrants and convertible securities), the Company shall not issue or sell (i) any shares of its Common Stock, (ii) any other voting equity securities of the Company, including, without limitation, shares of preferred stock, (iii) any option, warrant or other right to subscribe for, purchase or otherwise acquire any voting equity securities of the Company, Company or (iv) any debt securities convertible into voting capital stock of the Company (collectively, the "Offered Securities"), unless in each such case the Company shall have first complied with this Section 3.1. The Company shall deliver to the Investor a written notice of any proposed or intended issuance or sale of Offered Securities (the "Offer"), which Offer shall (iA) identify and describe the Offered Securities, (iiB) describe the price and other terms upon which they are to be issued or sold, and the number or amount of the Offered Securities to be issued or sold, (iiiC) identify the persons or entities (if known) to which or with which the Offered Securities are to be offered, issued or sold and (ivD) offer to issue and sell to the Investor a number of the Offered Securities (the "Available Amount") such that, after the issuance and sale of all of the Offered Securities, including the purchase of the Available Amount by the Investor, the Investor would own at least a majority, by voting power, of the outstanding capital stock of the Company (assuming the exercise and conversion of all outstanding options, warrants and convertible securities). The Company shall not be required to offer any Offered Securities to the Investor hereunder if, after the issuance and sale thereof, the Investor (or the Permitted Transferee) would continue to own at least a majority, by voting power, of the outstanding capital stock of the Company (assuming the exercise and conversion of all outstanding options, warrants and convertible securities). (b) To accept an Offer, in whole or in part, the Investor must deliver a written notice to the Company within 20 days after its receipt of the Offer, setting forth the portion of the Available Amount that the Investor elects to purchase (the "Notice of Acceptance"). (c) The Company shall have 180 days from the expiration of the period set forth in Section 3.1(b) above to issue or sell all or any part of such Offered Securities as to which a Notice of Acceptance has not been given by the Investor, upon terms and conditions which are not more favorable, in the aggregate, to the acquiring person or persons or less favorable to the Company than those set forth in the Offer. If the consideration to be received by the Company from the sale of Offered Securities consists of anything other than cash, the Board of Directors of the Company shall in good faith determine the cash equivalent of such non-cash consideration and the Investor may pay an equivalent portion of its purchase price for the Offered Securities elected portion of the Available Amount in cash. (d) The purchase by the Investor of any Offered Securities is subject in all cases to the preparation, execution and delivery by the Company and the Investor of a purchase agreement relating to such Offered Securities reasonably satisfactory in form and substance to the Investor. (e) The rights of the Investor under this Section 3 3.1 shall not apply to the grant of options to officers, directors, consultants and employees of the Company or any subsidiary pursuant to any plan, agreement or arrangement approved by a vote of not less than a majority of the members of the Board of Directors of the Company, provided, however, that if the exercise of any such -------- options results in the reduction of the Investor's, or Permitted Transferee's, ownership to less than a majority, by voting power, of the outstanding capital stock of the Company, the Company shall so notify the Investor (or Permitted Transferee), and the Investor or Permitted Transferee shall have the right, within 30 days after such notice, to purchase from the Company, at a price equal to the then Fair Market Value (as defined below) thereof, such number of shares of Common Stock as would increase its ownership to a majority, by voting power, of the outstanding capital stock of the Company. "Fair Market Value" shall mean the average closing price of the Common Stock, on the NASDAQ National Market (or other principal securities exchange on which the Common Stock is traded), during the 10-day period ending on the day prior to the date of purchase.pur-