BORROWER WILL NOT OWE
THE HOLDER ANY LATE PAYMENTS IF THE DELAY IN THE DELIVERY OF THE NOTE SHARES
BEYOND THE DELIVERY DATE IS SOLELY OUT OF THE CONTROL OF THE BORROWER AND THE
BORROWER IS ACTIVELY TRYING TO CURE THE CAUSE OF THE DELAY.
THE BORROWER SHALL
PAY ANY PAYMENTS INCURRED UNDER THIS SECTION 2.3 IN IMMEDIATELY AVAILABLE FUNDS
UPON DEMAND AND, IN THE CASE OF ACTUAL DAMAGES, ACCOMPANIED BY REASONABLE
DOCUMENTATION OF THE AMOUNT OF SUCH DAMAGES.
SUCH DOCUMENTATION SHALL SHOW THE
NUMBER OF SHARES OF COMMON STOCK THE HOLDER IS FORCED TO PURCHASE (IN AN OPEN
MARKET TRANSACTION) WHICH THE HOLDER ANTICIPATED RECEIVING UPON SUCH CONVERSION,
AND SHALL BE CALCULATED AS THE AMOUNT BY WHICH (A) THE HOLDER'S TOTAL PURCHASE
PRICE (INCLUDING CUSTOMARY BROKERAGE COMMISSIONS, IF ANY) FOR THE SHARES OF
COMMON STOCK SO PURCHASED EXCEEDS (B) THE AGGREGATE PRINCIPAL AND/OR INTEREST
AMOUNT OF THE NOTE, FOR WHICH SUCH NOTICE OF NOTICE WAS NOT TIMELY HONORED.
Nothing contained herein or in any document referred to herein or delivered in
connection herewith shall be deemed to establish or require the payment of a
rate of interest or other charges in excess of the maximum permitted by
applicable law.
In the event that the rate of interest or dividends required to
be paid or other charges hereunder exceed the maximum amount permitted by such
law, any payments in excess of such maximum shall be credited against amounts
owed by the Borrower to the Holder and thus refunded to the Borrower.
LATE PAYMENTS. THE BORROWER UNDERSTANDS THAT A DELAY IN THE DELIVERY OF THE
SHARES OF COMMON STOCK IN THE FORM REQUIRED PURSUANT TO THIS ARTICLE BEYOND THE
DELIVERY DATE COULD RESULT IN ECONOMIC LOSS TO THE
10CC-3
HOLDER.
AS COMPENSATION TO THE HOLDER FOR SUCH LOSS, THE BORROWER AGREES TO PAY
LATE PAYMENTS TO THE HOLDER FOR LATE ISSUANCE OF SUCH SHARES IN THE FORM
REQUIRED PURSUANT TO THIS ARTICLE II UPON CONVERSION OF THE NOTE, IN THE AMOUNT
EQUAL TO $500 PER BUSINESS DAY AFTER THE DELIVERY DATE.
THE BORROWER SHALL PAY
ANY PAYMENTS INCURRED UNDER THIS SECTION IN IMMEDIATELY AVAILABLE FUNDS UPON
DEMAND.
ADJUSTMENT PROVISIONS. THE FIXED CONVERSION PRICE AND NUMBER AND KIND OF SHARES
OR OTHER SECURITIES TO BE ISSUED UPON CONVERSION DETERMINED PURSUANT TO
SECTION 2.1 SHALL BE SUBJECT TO ADJUSTMENT FROM TIME TO TIME UPON THE HAPPENING
OF CERTAIN EVENTS WHILE THIS CONVERSION RIGHT REMAINS OUTSTANDING, AS FOLLOWS:
RECLASSIFICATION, ETC.
IF THE BORROWER AT ANY TIME SHALL, BY RECLASSIFICATION
OR OTHERWISE, CHANGE THE COMMON STOCK INTO THE SAME OR A DIFFERENT NUMBER OF
SECURITIES OF ANY CLASS OR CLASSES, THIS NOTE, AS TO THE UNPAID PRINCIPAL AMOUNT
AND ACCRUED INTEREST THEREON, SHALL THEREAFTER BE DEEMED TO EVIDENCE THE RIGHT
TO PURCHASE AN ADJUSTED NUMBER OF SUCH SECURITIES AND KIND OF SECURITIES AS
WOULD HAVE BEEN ISSUABLE AS THE RESULT OF SUCH CHANGE WITH RESPECT TO THE COMMON
STOCK IMMEDIATELY PRIOR TO SUCH RECLASSIFICATION OR OTHER CHANGE.
STOCK SPLITS, COMBINATIONS AND DIVIDENDS.
IF THE