SECTION
3(A), THE COMPANY SHALL NOT BE DEEMED TO HAVE SATISFIED THIS CLAUSE (I)), OR
(II) THE COMPANY FAILS TO FILE WITH THE SEC A REQUEST FOR ACCELERATION IN
ACCORDANCE WITH RULE 461 PROMULGATED UNDER THE SECURITIES ACT, WITHIN FIVE
TRADING DAYS OF THE DATE THAT THE COMPANY IS NOTIFIED (ORALLY OR IN WRITING,
WHICHEVER IS EARLIER) BY THE SEC THAT A REGISTRATION STATEMENT WILL NOT BE
"REVIEWED," OR NOT SUBJECT TO FURTHER REVIEW, OR (III) A REGISTRATION STATEMENT
FILED OR REQUIRED TO BE FILED HEREUNDER IS NOT DECLARED EFFECTIVE BY THE SEC BY
ITS EFFECTIVENESS DEADLINE, OR (IV) AFTER THE EFFECTIVENESS, A REGISTRATION
STATEMENT CEASES FOR ANY REASON TO REMAIN CONTINUOUSLY EFFECTIVE AS TO ALL
REGISTRABLE SECURITIES FOR WHICH IT IS REQUIRED TO BE EFFECTIVE, OR THE HOLDERS
ARE OTHERWISE NOT PERMITTED TO UTILIZE THE PROSPECTUS THEREIN TO RESELL SUCH
REGISTRABLE SECURITIES FOR MORE THAN 30 CONSECUTIVE CALENDAR DAYS OR MORE THAN
AN AGGREGATE OF 40 CALENDAR DAYS DURING ANY 12-MONTH PERIOD (WHICH NEED NOT BE
CONSECUTIVE CALENDAR DAYS) (ANY SUCH FAILURE OR BREACH BEING REFERRED TO AS AN
"EVENT"), THEN IN ADDITION TO ANY OTHER RIGHTS THE HOLDERS OF THE CONVERTIBLE
DEBENTURE MAY HAVE HEREUNDER OR UNDER APPLICABLE LAW, ON EACH SUCH EVENT DATE
AND ON EACH MONTHLY ANNIVERSARY OF EACH SUCH EVENT DATE (IF THE APPLICABLE EVENT
SHALL NOT HAVE BEEN CURED BY SUCH DATE) UNTIL THE APPLICABLE EVENT IS CURED, THE
COMPANY SHALL PAY TO EACH HOLDER OF CONVERTIBLE DEBENTURE AN AMOUNT IN CASH, AS
PARTIAL LIQUIDATED DAMAGES ("LIQUIDATED DAMAGES") AND NOT AS A PENALTY, EQUAL TO
2.0% OF THE AGGREGATE PURCHASE PRICE PAID BY SUCH HOLDER PURSUANT TO THE NOTE
AND WARRANT PURCHASE AGREEMENT FOR ANY CONVERTIBLE DEBENTURE THEN HELD BY SUCH
HOLDER.
THE PARTIES AGREE THAT (1) THE COMPANY SHALL NOT BE LIABLE FOR
LIQUIDATED DAMAGES UNDER THIS AGREEMENT WITH RESPECT TO ANY DEFAULT WARRANT OR
DEFAULT WARRANT SHARES AND (2) THE MAXIMUM AGGREGATE LIQUIDATED DAMAGES PAYABLE
TO A HOLDER OF CONVERTIBLE DEBENTURE UNDER THIS AGREEMENT SHALL BE TWELVE
PERCENT (12%) OF THE AGGREGATE PURCHASE PRICE PAID BY SUCH HOLDER PURSUANT TO
THE NOTE AND WARRANT PURCHASE AGREEMENT.
THE PARTIAL LIQUIDATED DAMAGES
PURSUANT TO THE TERMS HEREOF SHALL APPLY ON A DAILY PRO-RATA BASIS FOR ANY
PORTION OF A MONTH PRIOR TO THE CURE OF AN EVENT.
(D)
LIQUIDATED DAMAGES.
THE COMPANY AND THE HOLDER HERETO ACKNOWLEDGE
AND AGREE THAT THE SUMS PAYABLE UNDER SUBSECTION 2(C) ABOVE SHALL CONSTITUTE
LIQUIDATED DAMAGES AND NOT PENALTIES AND ARE IN ADDITION TO ALL OTHER RIGHTS OF
THE HOLDER, INCLUDING THE RIGHT TO CALL A DEFAULT.
THE PARTIES FURTHER
ACKNOWLEDGE THAT (I) THE AMOUNT OF LOSS OR DAMAGES LIKELY TO BE INCURRED IS
INCAPABLE OR IS DIFFICULT TO PRECISELY ESTIMATE, (II) THE AMOUNTS SPECIFIED IN
SUCH SUBSECTIONS BEAR A REASONABLE RELATIONSHIP TO, AND ARE NOT PLAINLY OR
GROSSLY DISPROPORTIONATE TO, THE PROBABLE LOSS LIKELY TO BE INCURRED IN
CONNECTION WITH ANY FAILURE BY THE COMPANY TO OBTAIN OR MAINTAIN THE
EFFECTIVENESS OF A REGISTRATION STATEMENT, (III) ONE OF