TO
THE EFFECT THAT THE PROPOSED TRANSFER MAY BE EFFECTED WITHOUT REGISTRATION UNDER
THE SECURITIES ACT AND WITHOUT REGISTRATION OR QUALIFICATION UNDER APPLICABLE
STATE OR OTHER SECURITIES LAWS.
EACH CERTIFICATE FOR ANY CONVERSION SHARES
SHALL BEAR A LEGEND
SIMILAR TO THAT SET FORTH ON PAGE 1 OF THIS NOTE (INSOFAR
AS APPLICABLE) AND OTHERWISE REFERRING TO REITERATING THE RESTRICTIONS ON
TRANSFER AND OTHER TERMS HEREOF APPLICABLE TO THE CONVERSION SHARES UPON
ISSUANCE.
(K)
HOLDER UNDERSTANDS THAT NO U.S. FEDERAL OR
STATE GOVERNMENT OR AGENCY HAS PASSED ON OR MADE ANY RECOMMENDATION OR
ENDORSEMENT OF OFFERING FOR SALE OR THE SALE OF THIS NOTE, OR WITH RESPECT TO
THE CONVERSION SHARES.
(L)
HOLDER ACKNOWLEDGES THAT THIS NOTE IS
ONE OF SEVERAL SIMILAR NOTES (COLLECTIVELY THE "OFFERED NOTES") IN THE AGGREGATE
PRINCIPAL AMOUNT OF UP TO $20,000,000, OR AT THE OPTION OF THE COMPANY, A
GREATER AMOUNT; AND THAT THERE IS NO RESTRICTION IMPOSED HEREBY UPON THE COMPANY
IN RESPECT OF THE INCURRING BY THE COMPANY OF ADDITIONAL DEBT OR THE ISSUANCE BY
THE COMPANY OF ADDITIONAL DEBT OR EQUITY SECURITIES, OR OTHERWISE.
5
11.
ANTI-DILUTION.
IF THE COMPANY EXECUTES A STOCK SPLIT, REVERSE
STOCK SPLIT, OR RE-CAPITALIZATION, OR MAKES A DIVIDEND OR OTHER DISTRIBUTION IN
CASH OR SHARES ON COMMON STOCK, OR RECLASSIFIES ALL OR PART OF ITS OUTSTANDING
COMMON STOCK (ANY OF THE FOREGOING A "DILUTION TRANSACTION"), THE NOTE
CONVERSION RATE AND THRESHOLD AMOUNT SPECIFIED IN SECTION 3(A) ABOVE SHALL EACH
BE EQUITABLY AND PROPORTIONATELY ADJUSTED SO THAT THIS NOTE SHALL BE CONVERTED
AS OF THE SAME DATE AS IT WOULD HAVE OTHERWISE CONVERTED HAD SUCH DILUTION
TRANSACTION NOT OCCURRED, AND SO THAT THE HOLDER OF THIS NOTE SHALL UPON
CONVERSION FOLLOWING A DILUTION EVENT BE ENTITLED TO RECEIVE THE NUMBER AND KIND
OF SHARES OF COMMON STOCK THAT SUCH HOLDER WOULD HAVE OWNED OR HAVE BEEN
ENTITLED TO RECEIVE IMMEDIATELY PRIOR TO THE HAPPENING OF A DILUTION TRANSACTION
AND THEN, FOLLOWING SUCH CONVERSION, SUBSEQUENTLY SUBJECTED TO THE EFFECT
THEREOF.
12.
REGISTRATION.
UPON THE REQUEST OF HOLDER OR OF ANY HOLDER OF ANY
OF THE OTHER OFFERED NOTES (COLLECTIVELY, THE "OFFERED NOTEHOLDERS") FOLLOWING
THE FIRST TO OCCUR OF THE CONVERSION OF THIS NOTE AND THE CONVERSION OF ANY OF
THE OFFERED NOTES AND THE ISSUANCE OF CONVERSION SHARES HEREUNDER OR THEREUNDER
AND AS DEFINED THEREIN, AND PROVIDED THAT THE COMPANY SHALL THEN BE, OR IF NOT,
AT SUCH TIME THEREAFTER AS THE COMPANY SHALL BECOME, ELIGIBLE TO EFFECT THE
REGISTRATION PURSUANT TO THE SECURITIES ACT OF THE SHARES OF COMMON STOCK ISSUED
OR ISSUABLE HEREUNDER OR UPON CONVERSION OF THE OTHER OFFERED NOTES
(COLLECTIVELY, THE "REGISTRABLE SECURITIES") ON FORM S-3 OR ON ANOTHER
"SHORT
FORM" REGISTRATION STATEMENT, THE COMPANY SHALL USE COMMERCIALLY REASONABLE
EFFORTS TO EFFECT REGISTRATION PURSUANT TO THE SECURITIES ACT, OF THE
REGISTRABLE SECURITIES OR THE RESALE THEREOF BY THE OFFERED HOLDERS ON FORM S-3
OR ON ANOTHER SHORT FORM REGISTRATION STATEMENT.
THE COMPANY SHALL HAVE NO
OBLIGATION HEREUNDER TO EFFECT ANY SUCH REGISTRATION AT ANY TIME