OF COMMON STOCK
PURSUANT TO SECTION 2.1(B)), SHALL BE THE NUMBER DETERMINED BY DIVIDING (I) THE
PORTION OF THE MONTHLY AMOUNT CONVERTED INTO SHARES OF COMMON STOCK, BY (II) THE
THEN APPLICABLE FIXED CONVERSION PRICE.
FOR PURPOSES HEREOF, SUBJECT TO
SECTION 3.6 HEREOF, THE INITIAL "FIXED CONVERSION PRICE" MEANS $ 1.05 [WHICH HAS
BEEN DETERMINED ON THE DATE OF THIS NOTE AS AN AMOUNT EQUAL TO 103% OF THE
AVERAGE CLOSING PRICE OF THE COMMON STOCK FOR THE TEN (10)
2
trading days immediately prior to the Closing Date; provided that the Fixed
Conversion Price shall not exceed 110% of the closing price on the date
immediately prior to the Closing Date].
(B)
MONTHLY AMOUNT CONVERSION CONDITIONS.
SUBJECT TO SECTIONS 2.1(A),
2.2, AND 3.2 HEREOF, THE HOLDER SHALL CONVERT INTO SHARES OF COMMON STOCK ALL OR
A PORTION OF THE MONTHLY AMOUNT DUE ON EACH AMORTIZATION DATE IF THE FOLLOWING
CONDITIONS (THE "CONVERSION CRITERIA") ARE SATISFIED: (I) THE AVERAGE CLOSING
PRICE OF THE COMMON STOCK AS REPORTED BY BLOOMBERG, L.P. ON THE PRINCIPAL MARKET
FOR THE FIVE (5) TRADING DAYS IMMEDIATELY PRECEDING SUCH AMORTIZATION DATE SHALL
BE GREATER THAN OR EQUAL TO 115% OF THE FIXED CONVERSION PRICE AND (II) THE
AMOUNT OF SUCH CONVERSION DOES NOT EXCEED TWENTY FIVE PERCENT (25%) OF THE
AGGREGATE DOLLAR TRADING VOLUME OF THE COMMON STOCK FOR THE PERIOD OF TWENTY-TWO
(22) TRADING DAYS IMMEDIATELY PRECEDING SUCH AMORTIZATION DATE.
IF
SUBSECTION (I) OF THE CONVERSION CRITERIA IS MET BUT SUBSECTION (II) OF THE
CONVERSION CRITERIA IS NOT MET AS TO THE ENTIRE MONTHLY AMOUNT, THE HOLDER SHALL
CONVERT ONLY SUCH PART OF THE MONTHLY AMOUNT THAT MEETS SUBSECTION (II) OF THE
CONVERSION CRITERIA.
ANY PORTION OF THE MONTHLY AMOUNT DUE ON AN AMORTIZATION
DATE THAT THE HOLDER HAS NOT BEEN ABLE TO CONVERT INTO SHARES OF COMMON STOCK
DUE TO THE FAILURE TO MEET THE CONVERSION CRITERIA, SHALL BE PAID IN CASH BY THE
COMPANY AT THE RATE OF 103% OF THE MONTHLY AMOUNT OTHERWISE DUE ON SUCH
AMORTIZATION DATE, WITHIN FIVE (5) BUSINESS DAYS OF SUCH AMORTIZATION DATE.
2.2
NO EFFECTIVE REGISTRATION.
NOTWITHSTANDING ANYTHING TO THE
CONTRARY HEREIN, THE HOLDER ACKNOWLEDGES THAT THE COMPANY HAS NOT, AS OF THE
DATE HEREOF, REGISTERED ANY SECURITIES ISSUED OR ISSUABLE PURSUANT TO THIS NOTE,
AND NONE OF THE COMPANY'S OBLIGATIONS TO THE HOLDER MAY BE CONVERTED INTO COMMON
STOCK UNLESS (A) EITHER (I) AN EFFECTIVE CURRENT REGISTRATION STATEMENT (AS
DEFINED IN THE REGISTRATION RIGHTS AGREEMENT) COVERING THE SHARES OF COMMON
STOCK TO BE ISSUED IN CONNECTION WITH SATISFACTION OF SUCH OBLIGATIONS EXISTS OR
(II) AN EXEMPTION FROM REGISTRATION FOR RESALE OF ALL OF THE COMMON STOCK ISSUED
AND ISSUABLE IS AVAILABLE PURSUANT TO RULE 144 OF THE SECURITIES ACT AND (B) NO
EVENT OF DEFAULT (AS HEREINAFTER DEFINED) EXISTS AND IS CONTINUING, UNLESS SUCH
EVENT OF DEFAULT IS CURED WITHIN ANY APPLICABLE CURE PERIOD OR OTHERWISE WAIVED
IN WRITING BY THE HOLDER.
2.3
OPTIONAL REDEMPTION IN CASH.
THE COMPANY MAY PREPAY THE
OUTSTANDING PRINCIPAL AMOUNT