AND PAYABLE ON A SATURDAY, SUNDAY OR OTHER DAY ON WHICH BANKS
IN THE STATE OF NEW YORK ARE AUTHORIZED TO REMAIN CLOSED, THE DUE DATE HEREOF
SHALL BE EXTENDED TO THE NEXT SUCCEEDING FULL BUSINESS DAY (AS DEFINED IN
SECTION 4.1 HEREOF).
ALL PAYMENTS RECEIVED BY THE HOLDER SHALL BE APPLIED FIRST
TO THE PAYMENT OF ALL ACCRUED INTEREST PAYABLE HEREUNDER.
(C)
PREPAYMENT.
THE COMPANY MAY PREPAY THE PRINCIPAL AMOUNT OF THIS
DEBENTURE AND ANY ACCRUED AND UNPAID INTEREST THEREON MAY BE PREPAID, IN WHOLE
OR IN PART, AT ANY TIME AND FROM TIME TO TIME WITHOUT PENALTY OR PREMIUM,
SUBJECT TO FIRST OFFERING THE HOLDER THE OPTION TO CONVERT THIS DEBENTURE INTO
COMMON STOCK IN ACCORDANCE WITH SECTION 2.1.
THE COMPANY MUST PROVIDE WRITTEN
NOTICE TO THE HOLDER OF ITS INTENTION TO PREPAY THIS DEBENTURE AND ALLOW THE
HOLDER THIRTY (30) DAYS AFTER RECEIPT OF SUCH NOTICE TO CONVERT.
ALL PAYMENTS
ON THIS DEBENTURE SHALL BE APPLIED FIRST TO ACCRUED INTEREST HEREON, IF ANY, AND
THE BALANCE TO THE PAYMENT OF OUTSTANDING PRINCIPAL HEREOF.
2. CONVERSION AND OTHER RIGHTS
(A)
CONVERSION INTO COMMON STOCK AT OPTION OF HOLDER.
AT ANY TIME AND
FROM TIME TO TIME UNTIL THE MATURITY DATE, THIS DEBENTURE IS CONVERTIBLE IN
WHOLE OR IN PART AT THE HOLDER'S OPTION INTO SHARES OF THE COMPANY'S COMMON
STOCK, PAR VALUE $0.01 PER SHARE ("COMMON STOCK"), UPON SURRENDER OF THIS
DEBENTURE, AT THE OFFICE OF THE COMPANY, ACCOMPANIED BY A WRITTEN NOTICE OF
CONVERSION IN THE FORM OF ATTACHMENT I HERETO, OR OTHERWISE IN FORM REASONABLY
SATISFACTORY TO THE COMPANY, DULY EXECUTED BY THE REGISTERED HOLDER OR HIS, HER
OR ITS DULY AUTHORIZED ATTORNEY.
THE AGGREGATE PRINCIPAL AMOUNT OF THIS
DEBENTURE SHALL BE CONVERTIBLE AT ANY TIME FROM THE ISSUANCE DATE UNTIL THE
MATURITY DATE INTO SHARES OF COMMON STOCK AT A PRICE PER SHARE EQUAL TO $0.092
("CONVERSION PRICE"), SUBJECT TO THE ADJUSTMENTS AS PROVIDED FOR IN SECTION
2.4.
INTEREST SHALL ACCRUE TO AND INCLUDE THE DAY PRIOR TO THE DATE OF
CONVERSION AND SHALL BE PAID BY CHECK OR IN SHARES OF COMMON STOCK, AT THE
OPTION OF THE COMPANY, ON THE LAST DAY OF THE MONTH IN WHICH CONVERSION RIGHTS
HEREUNDER ARE EXERCISED.
NO FRACTIONAL SHARES OR SCRIP REPRESENTING FRACTIONAL
SHARES WILL BE ISSUED UPON ANY CONVERSION, BUT A PAYMENT IN CASH WILL BE MADE,
IN RESPECT OF ANY FRACTION OF A SHARE WHICH WOULD OTHERWISE BE ISSUABLE UPON THE
SURRENDER OF THIS DEBENTURE FOR CONVERSION.
AS SOON AS PRACTICABLE FOLLOWING
CONVERSION AND UPON THE HOLDER'S COMPLIANCE WITH THE CONVERSION PROCEDURES
DESCRIBED IN SECTION 2.2 HEREOF, THE COMPANY SHALL DELIVER A CERTIFICATE FOR THE
NUMBER OF FULL SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION AND A CHECK FOR
ANY FRACTIONAL SHARE AND, IN THE EVENT THIS DEBENTURE IS CONVERTED IN PART, A
NEW DEBENTURE OF LIKE TENOR IN THE PRINCIPAL AMOUNT EQUAL TO THE REMAINING
PRINCIPAL BALANCE OF THIS DEBENTURE AFTER GIVING EFFECT TO SUCH PARTIAL
CONVERSION.
11
(B)
TRANSFER OF DEBENTURE; CONVERSION