TO
CONVERT THIS NOTE INTO COMMON STOCK, THE HOLDER SHALL GIVE NOTICE OF SUCH
ELECTION BY DELIVERING AN EXECUTED AND COMPLETED NOTICE OF CONVERSION ("NOTICE
OF CONVERSION") TO THE BORROWER AND SUCH NOTICE OF CONVERSION SHALL PROVIDE A
BREAKDOWN IN REASONABLE DETAIL OF THE PRINCIPAL AMOUNT, ACCRUED INTEREST AND
FEES THAT ARE BEING
10CC-2
CONVERTED.
ON EACH CONVERSION DATE (AS HEREINAFTER DEFINED) AND IN ACCORDANCE
WITH ITS NOTICE OF CONVERSION, THE HOLDER SHALL MAKE THE APPROPRIATE REDUCTION
TO THE PRINCIPAL AMOUNT, ACCRUED INTEREST AND FEES AS ENTERED IN ITS RECORDS AND
SHALL PROVIDE WRITTEN NOTICE THEREOF TO THE BORROWER WITHIN TWO (2) BUSINESS
DAYS AFTER THE CONVERSION DATE.
EACH DATE ON WHICH A NOTICE OF CONVERSION IS
DELIVERED OR TELECOPIED TO THE BORROWER IN ACCORDANCE WITH THE PROVISIONS HEREOF
SHALL BE DEEMED A CONVERSION DATE (THE "CONVERSION DATE").
A FORM OF NOTICE OF
CONVERSION TO BE EMPLOYED BY THE HOLDER IS ANNEXED HERETO AS EXHIBIT A.
(B)
PURSUANT TO THE TERMS OF THE NOTICE OF CONVERSION, THE BORROWER
WILL ISSUE INSTRUCTIONS TO THE TRANSFER AGENT ACCOMPANIED BY AN OPINION OF
COUNSEL WITHIN ONE (1) BUSINESS DAY OF THE DATE OF THE DELIVERY TO BORROWER OF
THE NOTICE OF CONVERSION AND SHALL CAUSE THE TRANSFER AGENT TO TRANSMIT THE
CERTIFICATES REPRESENTING THE CONVERSION SHARES TO THE HOLDER BY CREDITING THE
ACCOUNT OF THE HOLDER'S DESIGNATED BROKER WITH THE DEPOSITORY TRUST CORPORATION
("DTC") THROUGH ITS DEPOSIT WITHDRAWAL AGENT COMMISSION ("DWAC") SYSTEM WITHIN
THREE (3) BUSINESS DAYS AFTER RECEIPT BY THE BORROWER OF THE NOTICE OF
CONVERSION (THE "DELIVERY DATE").
IN THE CASE OF THE EXERCISE OF THE CONVERSION
RIGHTS SET FORTH HEREIN THE CONVERSION PRIVILEGE SHALL BE DEEMED TO HAVE BEEN
EXERCISED AND THE CONVERSION SHARES ISSUABLE UPON SUCH CONVERSION SHALL BE
DEEMED TO HAVE BEEN ISSUED UPON THE DATE OF RECEIPT BY THE BORROWER OF THE
NOTICE OF CONVERSION.
THE HOLDER SHALL BE TREATED FOR ALL PURPOSES AS THE
RECORD HOLDER OF SUCH COMMON STOCK, UNLESS THE HOLDER PROVIDES THE BORROWER
WRITTEN INSTRUCTIONS TO THE CONTRARY.
(C) THE BORROWER UNDERSTANDS THAT A DELAY IN THE DELIVERY OF THE SHARES OF
COMMON STOCK ISSUABLE UPON CONVERSION OF THE NOTE (THE "NOTE SHARES") IN THE
FORM REQUIRED PURSUANT TO THIS SECTION 3 BEYOND THE DELIVERY DATE COULD RESULT
IN ECONOMIC LOSS TO THE HOLDER.
IN THE EVENT THAT THE BORROWER FAILS TO DIRECT
ITS TRANSFER AGENT TO DELIVER THE NOTE SHARES TO THE HOLDER VIA THE DWAC SYSTEM
WITHIN THE TIME FRAME SET FORTH IN SECTION 2.3(B) ABOVE AND THE NOTE SHARES ARE
NOT DELIVERED TO THE HOLDER BY THE DELIVERY DATE, AS COMPENSATION TO THE HOLDER
FOR SUCH LOSS, THE BORROWER AGREES TO PAY LATE PAYMENTS TO THE HOLDER FOR LATE
ISSUANCE OF THE NOTE SHARES IN THE FORM REQUIRED PURSUANT TO THIS SECTION 3 UPON
CONVERSION OF THE NOTE IN THE AMOUNT EQUAL TO THE GREATER OF:
(I) $500 PER
BUSINESS DAY AFTER THE DELIVERY DATE; OR (II) THE HOLDER'S ACTUAL DAMAGES FROM
SUCH DELAYED DELIVERY. NOTWITHSTANDING THE FOREGOING, THE