CONVERSION IS TELECOPIED OR DELIVERED TO THE COMPANY IN ACCORDANCE WITH THE
PROVISIONS HEREOF SHALL BE DEEMED A "CONVERSION DATE."
PURSUANT TO THE TERMS OF
THE NOTICE OF CONVERSION, THE BORROWER WILL USE ITS BEST EFFORTS TO ISSUE
INSTRUCTIONS TO THE TRANSFER AGENT ACCOMPANIED BY AN OPINION OF COUNSEL WITHIN
TWO (2) 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
PURCHASER'S PRIME BROKER WITH THE DEPOSITORY TRUST COMPANY ("DTC") THROUGH ITS
DEPOSIT WITHDRAWAL AGENT COMMISSION ("DWAC") SYSTEM WITHIN THREE (3) BUSINESS
DAYS AFTER RECEIPT BY THE COMPANY OF THE NOTICE OF CONVERSION (THE "DELIVERY
DATE").
(C)
THE COMPANY UNDERSTANDS THAT A DELAY IN THE
DELIVERY OF THE NOTE SHARES IN THE FORM REQUIRED PURSUANT TO SECTION 9 HEREOF
BEYOND THE DELIVERY DATE COULD RESULT IN ECONOMIC LOSS TO THE PURCHASER.
IN THE
EVENT THAT THE COMPANY FAILS TO DIRECT ITS TRANSFER AGENT TO DELIVER THE NOTE
SHARES TO THE PURCHASER VIA THE DWAC SYSTEM WITHIN THE TIME FRAME SET FORTH IN
SECTION 9.1(B) ABOVE AND THE NOTE SHARES ARE NOT DELIVERED TO THE PURCHASER BY
THE DELIVERY DATE, AS COMPENSATION TO THE PURCHASER FOR SUCH LOSS, THE COMPANY
AGREES TO PAY LATE PAYMENTS TO THE PURCHASER FOR LATE ISSUANCE OF THE NOTE
SHARES IN THE FORM REQUIRED PURSUANT TO SECTION 9 HEREOF UPON CONVERSION OF THE
NOTE IN THE AMOUNT EQUAL TO THE GREATER OF:
(I) $250 PER BUSINESS DAY AFTER THE
DELIVERY DATE; OR (II) THE PURCHASER'S ACTUAL DAMAGES FROM SUCH DELAYED
DELIVERY. NOTWITHSTANDING THE FOREGOING, THE COMPANY WILL NOT OWE THE PURCHASER
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 COMPANY AND THE COMPANY IS
ACTIVELY TRYING TO CURE THE CAUSE OF THE DELAY.
THE COMPANY SHALL PAY ANY
PAYMENTS INCURRED UNDER THIS SECTION 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 PURCHASER IS FORCED TO PURCHASE (IN AN OPEN MARKET
TRANSACTION) WHICH THE PURCHASER ANTICIPATED RECEIVING UPON SUCH CONVERSION, AND
SHALL BE CALCULATED AS THE AMOUNT BY WHICH (A) THE PURCHASER'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 CONVERSION 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