TRADING DAY THAT IS DISREGARDED FOR THE PURPOSES OF CALCULATING THE
NUMBER OF SHARES TO BE ISSUED IN CONNECTION WITH A DRAW DOWN IN ACCORDANCE WITH
THE FOREGOING SHALL ONLY REDUCE SUCH NUMBER OF SHARES BY ONE EIGHTH (1/8TH),
NOTWITHSTANDING THAT SUCH TRADING DAY MAY BE SO DISREGARDED FOR MORE THAN ONE OF
THE REASONS SPECIFIED ABOVE.
SECTION 3.7
FAILURE TO DELIVER SHARES.
IF ON ANY SETTLEMENT DATE, THE
COMPANY FAILS TO CAUSE THE DELIVERY OF THE SHARES PURCHASED BY THE INVESTOR, AND
SUCH FAILURE IS NOT CURED WITHIN TWO (2) TRADING DAYS FOLLOWING SUCH SETTLEMENT
DATE, THE COMPANY SHALL PAY TO THE INVESTOR ON DEMAND IN CASH BY WIRE TRANSFER
OF IMMEDIATELY AVAILABLE FUNDS TO AN ACCOUNT DESIGNATED BY THE INVESTOR THE
"MAKE WHOLE AMOUNT;" PROVIDED, HOWEVER, THAT IN THE EVENT THAT THE COMPANY IS
PREVENTED FROM DELIVERING SHARES IN RESPECT OF ANY SUCH SETTLEMENT DATE IN A
TIMELY MANNER BY ANY FACT OR CIRCUMSTANCE THAT IS NOT REASONABLY WITHIN THE
CONTROL OF, OR DIRECTLY ATTRIBUTABLE TO, THE COMPANY, OR IS OTHERWISE REASONABLY
WITHIN THE CONTROL OF, OR DIRECTLY ATTRIBUTABLE TO, THE INVESTOR, THEN SUCH TWO
(2) TRADING DAY PERIOD SHALL BE AUTOMATICALLY EXTENDED UNTIL SUCH TIME AS SUCH
FACT OR CIRCUMSTANCE IS CURED.
AS USED HEREIN, THE MAKE WHOLE AMOUNT SHALL BE
AN AMOUNT EQUAL TO THE SUM OF (I) THE DRAW DOWN AMOUNT ACTUALLY PAID BY THE
INVESTOR IN RESPECT OF SUCH SHARES PLUS (II) AN AMOUNT EQUAL TO THE ACTUAL LOSS
SUFFERED BY THE INVESTOR IN RESPECT OF SALES TO SUBSEQUENT PURCHASERS, PURSUANT
TO TRANSACTIONS ENTERED INTO BEFORE THE SETTLEMENT DATE, OF THE SHARES THAT WERE
REQUIRED TO BE DELIVERED BY THE COMPANY, WHICH SHALL BE BASED UPON DOCUMENTATION
REASONABLY SATISFACTORY TO THE COMPANY DEMONSTRATING THE DIFFERENCE (IF GREATER
THAN ZERO) BETWEEN (A) THE PRICE PER SHARE PAID BY THE INVESTOR TO PURCHASE SUCH
NUMBER OF SHARES OF COMMON STOCK NECESSARY FOR THE INVESTOR TO MEET ITS SHARE
DELIVERY OBLIGATIONS TO SUCH SUBSEQUENT PURCHASERS MINUS (B) THE AVERAGE DRAW
DOWN DISCOUNT PRICE DURING THE APPLICABLE DRAW DOWN PRICING PERIOD.
IN THE
EVENT THAT THE MAKE WHOLE AMOUNT IS NOT PAID WITHIN TWO (2) TRADING DAYS
FOLLOWING A DEMAND THEREFOR FROM THE INVESTOR, THE MAKE WHOLE AMOUNT SHALL
ACCRUE ANNUAL INTEREST (ON THE BASIS OF THE 365 DAY YEAR) COMPOUNDED DAILY AT A
RATE EQUAL TO THE GREATER OF (I) THE PRIME RATE OF INTEREST THEN IN EFFECT AS
PUBLISHED BY THE WALL STREET JOURNAL PLUS THREE PERCENT (3%) AND (II) TEN
PERCENT (10%), UP TO AND INCLUDING THE DATE ON WHICH THE MAKE WHOLE AMOUNT IS
ACTUALLY PAID.
FOR THE PURPOSES OF THIS SECTION 3.7 FACTS OR CIRCUMSTANCES THAT
ARE REASONABLY WITHIN THE CONTROL OF THE COMPANY INCLUDE SUCH FACTS AND
CIRCUMSTANCES SOLELY ATTRIBUTABLE TO ACTS OR OMISSIONS OF THE COMPANY, ITS
OFFICERS, DIRECTORS, EMPLOYEES, AGENTS AND REPRESENTATIVES, INCLUDING, WITHOUT
LIMITATION, ANY TRANSFER AGENT(S) AND/OR ACCOUNTANT(S) ENGAGED BY THE COMPANY IN
CONNECTION WITH THE COMPANY'S PERFORMANCE OF ITS OBLIGATIONS HEREUNDER.
NOTWITHSTANDING ANYTHING TO THE CONTRARY SET