LESS THAN SUCH NUMBER OF SHARES OF THE COMMON STOCK AS SHALL (SUBJECT TO ANY
ADDITIONAL REQUIREMENTS OF THE COMPANY AS TO RESERVATION OF SUCH SHARES SET
FORTH IN THIS DEBENTURE OR IN THE TRANSACTION DOCUMENTS) BE ISSUABLE (TAKING
INTO ACCOUNT THE ADJUSTMENTS AND RESTRICTIONS SET FORTH HEREIN) UPON THE
CONVERSION OF THE OUTSTANDING PRINCIPAL AMOUNT OF THIS DEBENTURE AND PAYMENT OF
INTEREST HEREUNDER.
THE COMPANY COVENANTS THAT ALL SHARES OF COMMON STOCK THAT
SHALL BE SO ISSUABLE SHALL, UPON
ISSUE, BE DULY AND VALIDLY AUTHORIZED, ISSUED AND FULLY PAID, NONASSESSABLE AND,
IF THE UNDERLYING SHARES REGISTRATION STATEMENT HAS BEEN DECLARED EFFECTIVE
UNDER THE SECURITIES ACT, REGISTERED FOR PUBLIC SALE IN ACCORDANCE WITH SUCH
UNDERLYING SHARES REGISTRATION STATEMENT.
(IV)
NOTHING HEREIN SHALL LIMIT A HOLDER'S RIGHT TO PURSUE ACTUAL
DAMAGES OR DECLARE AN EVENT OF DEFAULT PURSUANT TO SECTION 2 HEREIN FOR THE
COMPANY 'S FAILURE TO DELIVER CERTIFICATES REPRESENTING SHARES OF COMMON STOCK
UPON CONVERSION WITHIN THE PERIOD SPECIFIED HEREIN AND SUCH HOLDER SHALL HAVE
THE RIGHT TO PURSUE ALL REMEDIES AVAILABLE TO HIM AT LAW OR IN EQUITY INCLUDING,
WITHOUT LIMITATION, A DECREE OF SPECIFIC PERFORMANCE AND/OR INJUNCTIVE RELIEF,
IN EACH CASE WITHOUT THE NEED TO POST A BOND OR PROVIDE OTHER SECURITY.
THE
EXERCISE OF ANY SUCH RIGHTS SHALL NOT PROHIBIT THE HOLDER FROM SEEKING TO
ENFORCE DAMAGES PURSUANT TO ANY OTHER SECTION HEREOF OR UNDER APPLICABLE LAW.
(5)
ADJUSTMENTS TO CONVERSION PRICE
(A)
ADJUSTMENT OF CONVERSION PRICE UPON ISSUANCE OF COMMON STOCK.
IF THE
COMPANY, AT ANY TIME WHILE THIS DEBENTURE IS OUTSTANDING, ISSUES OR SELLS, OR IN
ACCORDANCE WITH THIS SECTION 5(A) IS DEEMED TO HAVE ISSUED OR SOLD, ANY SHARES
OF COMMON STOCK, EXCLUDING SHARES OF COMMON STOCK DEEMED TO HAVE BEEN ISSUED OR
SOLD BY THE COMPANY IN CONNECTION WITH ANY EXCLUDED SECURITIES, FOR A
CONSIDERATION PER SHARE (THE "NEW ISSUANCE PRICE") LESS THAN A PRICE EQUAL TO
THE CONVERSION PRICE IN EFFECT IMMEDIATELY PRIOR TO SUCH ISSUE OR SALE (SUCH
PRICE THE "APPLICABLE PRICE") (THE FOREGOING A "DILUTIVE ISSUANCE"), THEN
IMMEDIATELY AFTER SUCH DILUTIVE ISSUANCE THE CONVERSION PRICE THEN IN EFFECT
SHALL BE REDUCED TO AN AMOUNT EQUAL TO THE NEW ISSUANCE PRICE.
FOR PURPOSES OF
DETERMINING THE ADJUSTED CONVERSION PRICE UNDER THIS SECTION 5(A), THE FOLLOWING
SHALL BE APPLICABLE:
(I)
ISSUANCE OF OPTIONS.
IF THE COMPANY IN ANY MANNER GRANTS OR
SELLS ANY OPTIONS AND THE LOWEST PRICE PER SHARE FOR WHICH ONE SHARE OF COMMON
STOCK IS ISSUABLE UPON THE EXERCISE OF ANY SUCH OPTION OR UPON CONVERSION OR
EXCHANGE OR EXERCISE OF ANY CONVERTIBLE SECURITIES ISSUABLE UPON EXERCISE OF
SUCH OPTION IS LESS THAN THE APPLICABLE PRICE, THEN SUCH SHARE OF COMMON STOCK
SHALL BE DEEMED TO BE OUTSTANDING AND TO HAVE BEEN ISSUED AND SOLD BY THE
COMPANY AT THE TIME OF THE GRANTING OR SALE OF SUCH OPTION FOR SUCH PRICE PER
SHARE.
FOR PURPOSES OF THIS SECTION, THE "LOWEST PRICE PER SHARE FOR WHICH ONE
SHARE OF COMMON STOCK IS ISSUABLE UPON THE EXERCISE OF