A
SHARE OF COMMON STOCK, THE COMPANY SHALL ROUND SUCH FRACTION OF A SHARE OF
COMMON STOCK UP TO THE NEAREST WHOLE SHARE.
THE COMPANY SHALL PAY ANY AND ALL
TRANSFER, STAMP AND SIMILAR TAXES THAT MAY BE PAYABLE WITH RESPECT TO THE
ISSUANCE AND DELIVERY OF COMMON STOCK UPON CONVERSION OF ANY CONVERSION AMOUNT.
(I)
"CONVERSION AMOUNT" MEANS THE PORTION OF THE PRINCIPAL AND
INTEREST TO BE CONVERTED, REDEEMED OR OTHERWISE WITH RESPECT TO WHICH THIS
DETERMINATION IS BEING MADE.
(II)
"CONVERSION PRICE" MEANS, AS OF ANY CONVERSION DATE (AS DEFINED
BELOW) OR OTHER DATE OF DETERMINATION, $0.50, SUBJECT TO ADJUSTMENT AS PROVIDED
HEREIN;
(B)
MECHANICS OF CONVERSION.
(I)
OPTIONAL CONVERSION.
TO CONVERT ANY CONVERSION AMOUNT INTO
SHARES OF COMMON STOCK ON ANY DATE (A "CONVERSION DATE"), THE HOLDER SHALL (A)
TRANSMIT BY FACSIMILE (OR OTHERWISE DELIVER), FOR RECEIPT ON OR PRIOR TO 11:59
P.M., NEW YORK TIME, ON SUCH DATE, A COPY OF AN EXECUTED NOTICE OF CONVERSION IN
THE FORM ATTACHED HERETO AS EXHIBIT I (THE "CONVERSION NOTICE") TO THE COMPANY
AND (B) IF REQUIRED BY SECTION 4(B)(IV), SURRENDER THIS DEBENTURE TO A
NATIONALLY RECOGNIZED OVERNIGHT DELIVERY SERVICE FOR DELIVERY TO THE COMPANY (OR
AN INDEMNIFICATION UNDERTAKING REASONABLY SATISFACTORY TO THE COMPANY WITH
RESPECT TO THIS DEBENTURE IN THE CASE OF ITS LOSS, THEFT OR DESTRUCTION).
ON OR
BEFORE THE THIRD BUSINESS DAY FOLLOWING THE DATE OF RECEIPT OF A CONVERSION
NOTICE (THE "SHARE DELIVERY DATE"), THE COMPANY SHALL (X) IF LEGENDS ARE NOT
REQUIRED TO BE PLACED ON CERTIFICATES OF COMMON STOCK PURSUANT TO THE NOTE AND
WARRANT PURCHASE AGREEMENT AND PROVIDED THAT THE TRANSFER AGENT IS PARTICIPATING
IN THE DEPOSITORY TRUST COMPANY'S ("DTC") FAST AUTOMATED SECURITIES TRANSFER
PROGRAM, CREDIT SUCH AGGREGATE NUMBER OF SHARES OF COMMON STOCK TO WHICH THE
HOLDER SHALL BE ENTITLED TO THE HOLDER'S OR HIS DESIGNEE'S BALANCE ACCOUNT WITH
DTC THROUGH ITS DEPOSIT WITHDRAWAL AGENT COMMISSION SYSTEM OR (Y) IF THE
TRANSFER AGENT IS NOT PARTICIPATING IN THE DTC FAST AUTOMATED SECURITIES
TRANSFER PROGRAM, ISSUE AND DELIVER TO THE ADDRESS AS SPECIFIED IN THE
CONVERSION NOTICE, A CERTIFICATE, REGISTERED IN THE NAME OF THE HOLDER OR HIS
DESIGNEE, FOR THE NUMBER OF SHARES OF COMMON STOCK TO WHICH THE HOLDER SHALL BE
ENTITLED WHICH CERTIFICATES SHALL NOT BEAR ANY RESTRICTIVE LEGENDS UNLESS
REQUIRED PURSUANT TO SECTION 2(G) OF THE NOTE AND WARRANT PURCHASE AGREEMENT.
IF THIS DEBENTURE IS PHYSICALLY SURRENDERED FOR CONVERSION AND THE OUTSTANDING
PRINCIPAL OF THIS DEBENTURE IS GREATER THAN THE PRINCIPAL PORTION OF THE
CONVERSION AMOUNT BEING CONVERTED, THEN THE COMPANY SHALL AS SOON AS PRACTICABLE
AND IN NO EVENT LATER THAN THREE (3) BUSINESS DAYS AFTER RECEIPT OF THIS
DEBENTURE AND AT ITS OWN EXPENSE, ISSUE AND DELIVER TO THE HOLDER A NEW
DEBENTURE REPRESENTING THE OUTSTANDING PRINCIPAL NOT CONVERTED.
THE PERSON OR
PERSONS ENTITLED TO RECEIVE THE SHARES OF COMMON STOCK ISSUABLE UPON A
CONVERSION OF THIS DEBENTURE SHALL BE TREATED FOR ALL PURPOSES AS THE RECORD
HOLDER OR HOLDERS OF SUCH SHARES OF COMMON