HOLDER PURCHASES COMMON
STOCK HAVING A TOTAL PURCHASE PRICE OF $11,000 TO COVER A BUY-IN WITH RESPECT TO
AN ATTEMPTED CONVERSION OF SHARES OF COMMON STOCK WITH AN AGGREGATE SALE PRICE
GIVING RISE TO SUCH PURCHASE OBLIGATION OF $10,000, UNDER CLAUSE (1) OF THE
IMMEDIATELY PRECEDING SENTENCE THE COMPANY SHALL BE REQUIRED TO PAY TO THE
HOLDER $1,000. THE HOLDER SHALL PROVIDE THE COMPANY WRITTEN
8
NOTICE INDICATING THE AMOUNTS PAYABLE TO THE HOLDER IN RESPECT OF THE BUY-IN,
TOGETHER WITH APPLICABLE CONFIRMATIONS AND OTHER EVIDENCE REASONABLY REQUESTED
BY THE COMPANY.
NOTHING HEREIN SHALL LIMIT A HOLDER'S RIGHT TO PURSUE ANY OTHER
REMEDIES AVAILABLE TO IT HEREUNDER, AT LAW OR IN EQUITY INCLUDING, WITHOUT
LIMITATION, A DECREE OF SPECIFIC PERFORMANCE AND/OR INJUNCTIVE RELIEF WITH
RESPECT TO THE COMPANY'S FAILURE TO TIMELY DELIVER CERTIFICATES REPRESENTING
SHARES OF COMMON STOCK UPON CONVERSION OF THE SERIES A PREFERRED STOCK AS
REQUIRED PURSUANT TO THE TERMS HEREOF.
(C)
INTENTIONALLY OMITTED.
(D)
­CONVERSION PRICE.
(I)
THE TERM "CONVERSION PRICE" SHALL MEAN $0.40, SUBJECT TO
ADJUSTMENT UNDER SECTION 5(E) HEREOF.
NOTWITHSTANDING ANY ADJUSTMENT HEREUNDER,
AT NO TIME SHALL THE CONVERSION PRICE BE GREATER THAN $0.40 PER SHARE EXCEPT IF
IT IS ADJUSTED PURSUANT TO SECTION 5(E)(I).
(II)
NOTWITHSTANDING THE FOREGOING TO THE CONTRARY, IF DURING ANY
PERIOD (A "BLACK-OUT PERIOD"), A HOLDER OF SERIES A PREFERRED STOCK IS UNABLE TO
TRADE ANY COMMON STOCK ISSUED OR ISSUABLE UPON CONVERSION OF THE SERIES A
PREFERRED STOCK IMMEDIATELY DUE TO THE POSTPONEMENT OF FILING OR DELAY OR
SUSPENSION OF EFFECTIVENESS OF THE REGISTRATION STATEMENT OR BECAUSE THE COMPANY
HAS OTHERWISE INFORMED SUCH HOLDER OF SERIES A PREFERRED STOCK THAT AN EXISTING
PROSPECTUS CANNOT BE USED AT THAT TIME IN THE SALE OR TRANSFER OF SUCH COMMON
STOCK (PROVIDED THAT SUCH POSTPONEMENT, DELAY, SUSPENSION OR FACT THAT THE
PROSPECTUS CANNOT BE USED IS NOT DUE TO FACTORS SOLELY WITHIN THE CONTROL OF THE
HOLDER OF SERIES A PREFERRED STOCK OR DUE TO THE COMPANY EXERCISING ITS RIGHTS
UNDER SECTION 3(N) OF THE REGISTRATION RIGHTS AGREEMENT (AS DEFINED IN THE
PURCHASE AGREEMENT)), SUCH HOLDER OF SERIES A PREFERRED STOCK SHALL HAVE THE
OPTION BUT NOT THE OBLIGATION ON ANY CONVERSION DATE WITHIN TEN (10) TRADING
DAYS FOLLOWING THE EXPIRATION OF THE BLACK-OUT PERIOD OF USING THE CONVERSION
PRICE APPLICABLE ON SUCH CONVERSION DATE OR ANY CONVERSION PRICE SELECTED BY
SUCH HOLDER OF SERIES A PREFERRED STOCK THAT WOULD HAVE BEEN APPLICABLE HAD SUCH
CONVERSION DATE BEEN AT ANY EARLIER TIME DURING THE BLACK-OUT PERIOD OR WITHIN
THE TEN (10) TRADING DAYS THEREAFTER.
(E)
­ADJUSTMENTS OF CONVERSION PRICE.
(I)
­ADJUSTMENTS FOR STOCK SPLITS AND COMBINATIONS.
IF THE COMPANY
SHALL AT ANY TIME OR FROM TIME TO TIME AFTER THE ORIGINAL ISSUE DATE, EFFECT A
STOCK SPLIT OF THE OUTSTANDING COMMON STOCK, THE CONVERSION PRICE SHALL BE
PROPORTIONATELY DECREASED.
IF THE COMPANY SHALL AT ANY TIME OR FROM TIME TO
TIME AFTER THE ORIGINAL ISSUE DATE, COMBINE THE OUTSTANDING SHARES OF COMMON
STOCK, THE CONVERSION PRICE SHALL BE PROPORTIONATELY INCREASED.
ANY