COLLATERAL; TO DEMAND, COLLECT, ISSUE
RECEIPT FOR, COMPROMISE, SETTLE AND SUE FOR MONIES DUE IN RESPECT OF THE
COLLATERAL; TO NOTIFY PERSONS AND
10
ENTITIES OBLIGATED WITH RESPECT TO THE COLLATERAL TO MAKE PAYMENTS DIRECTLY TO
LENDER; AND, GENERALLY, TO DO, AT LENDER'S OPTION AND AT BORROWER'S EXPENSE, AT
ANY TIME, OR FROM TIME TO TIME, ALL ACTS AND THINGS WHICH LENDER DEEMS NECESSARY
TO PROTECT, PRESERVE AND REALIZE UPON THE COLLATERAL AND LENDER'S SECURITY
INTEREST THEREIN TO EFFECT THE INTENT OF THE LOAN DOCUMENTS, ALL AS FULLY AND
EFFECTUALLY AS BORROWER MIGHT OR COULD DO; AND BORROWER HEREBY RATIFIES ALL THAT
SAID ATTORNEY SHALL LAWFULLY DO OR CAUSE TO BE DONE BY VIRTUE HEREOF.
THIS
POWER OF ATTORNEY SHALL BE IRREVOCABLE AS LONG AS ANY OF THE SECURED OBLIGATIONS
ARE OUTSTANDING.
(E)
ALL OF LENDER'S RIGHTS AND REMEDIES WITH
RESPECT TO THE COLLATERAL, WHETHER ESTABLISHED HEREBY OR BY ANY OTHER
AGREEMENTS, INSTRUMENTS OR DOCUMENTS OR BY LAW SHALL BE CUMULATIVE AND MAY BE
EXERCISED SINGLY OR CONCURRENTLY.
K.
CONVERSION RIGHT.
1.
CONVERSION RIGHT.
LENDER SHALL HAVE
THE RIGHT (THE "CONVERSION RIGHT"), IN ITS SOLE DISCRETION, AT ANY TIME AND FROM
TIME TO TIME TO ELECT TO CONVERT ALL OR ANY PART OF THE SECURED OBLIGATIONS INTO
THAT NUMBER OF SHARES OF COMMON STOCK OF BORROWER AS IS OBTAINED BY DIVIDING
(A) THE TOTAL AMOUNT OF SECURED OBLIGATIONS BY (B) THE LESSER OF THE (I) EIGHTY
PERCENT (80%) OF THE FIVE-DAY MOVING AVERAGE PRICE PER SHARE OF THE COMMON STOCK
ON THE DATE OF THE LENDER'S ELECTION TO EXERCISE ITS CONVERSION RIGHT OR
(II) EIGHTY PERCENT (80%) OF THE FIVE-DAY MOVING AVERAGE PRICE PER SHARE OF THE
COMMON STOCK ON THE DATE HEREOF.
2.
EXERCISE OF CONVERSION RIGHT.
TO
CONVERT ANY OF THE SECURED OBLIGATIONS INTO SHARES OF COMMON STOCK, LENDER SHALL
DELIVER TO BORROWER A WRITTEN NOTICE OF ELECTION TO EXERCISE THE CONVERSION
RIGHT (THE "CONVERSION NOTICE").
BORROWER SHALL, AS SOON AS PRACTICABLE
THEREAFTER, ISSUE AND DELIVER TO LENDER A CERTIFICATE OR CERTIFICATES,
REGISTERED IN LENDER'S NAME, FOR THE NUMBER OF SHARES OF COMMON STOCK TO WHICH
LENDER SHALL BE ENTITLED BY VIRTUE OF SUCH EXERCISE.
THE CONVERSION OF THE
SECURED OBLIGATIONS SHALL BE DEEMED TO HAVE BEEN MADE ON THE DATE THAT BORROWER
RECEIVES THE CONVERSION NOTICE (THE "CONVERSION DATE") AND LENDER SHALL BE
TREATED FOR ALL PURPOSES AS THE RECORD HOLDER OF THE CONVERSION SHARES AS OF
SUCH DATE.
3.
FRACTIONAL SHARES.
BORROWER SHALL NOT
ISSUE FRACTIONAL SHARES OF COMMON STOCK OR SCRIP REPRESENTING FRACTIONAL SHARES
OF COMMON STOCK UPON EXERCISE OF THE CONVERSION RIGHT.
AS TO ANY FRACTIONAL
SHARE OF COMMON STOCK WHICH LENDER WOULD OTHERWISE BE ENTITLED TO PURCHASE FROM
BORROWER UPON SUCH EXERCISE, BORROWER SHALL PURCHASE FROM LENDER SUCH FRACTIONAL
SHARE AT A PRICE EQUAL TO AN AMOUNT CALCULATED BY MULTIPLYING SUCH FRACTIONAL
SHARE (CALCULATED TO THE NEAREST 1/100TH OF A SHARE) BY THE PRICE PER SHARE OF
COMMON STOCK ON THE CONVERSION DATE.
PAYMENT OF SUCH AMOUNT SHALL BE MADE IN
CASH