Common use of Limitation on Number of Conversion Shares Clause in Contracts

Limitation on Number of Conversion Shares. (a) Notwithstanding any other provision herein, the Company shall not be obligated to issue any shares of Common Stock upon conversion of the Series A Preferred Stock if the issuance of such shares of Common Stock would exceed that number of shares of Common Stock which the Company may issue upon conversion of the Series A Preferred Stock (the "Exchange Cap") without breaching the Company's obligations under the rules and regulations of The Nasdaq Stock Market, Inc., except that such limitation shall not apply in the event that the Company (a) obtains the approval of its stockholders as required by applicable rules of The Nasdaq Sock Market, Inc., for issuances of Common Stock in excess of such amount or (b) obtains a written opinion from outside counsel to the Company that such approval is not required, which opinion shall be reasonably satisfactory to the holders of a majority of the shares of Series A Preferred Stock then outstanding; provided, however, that notwithstanding anything herein to the contrary, the Company will issue such number of shares of Common Stock issuable upon conversion of the Series A Preferred Stock at the then current Conversion Price up to the Exchange Cap. Until such approval or written opinion is obtained, no holder of Series A Preferred Stock pursuant to the Securities Purchase Agreement ("Purchase Agreement") shall be issued, upon conversion of Series A Preferred Stock, shares of Common Stock in an amount greater than the product of (i) the Exchange Cap amount multiplied by (ii) a fraction, the numerator of which is the number of shares of Series A Preferred Stock issued to such holder pursuant to the Purchase Agreement and the denominator of which is the aggregate amount of all the shares of Series A Preferred Stock issued to all holders pursuant to the Purchase Agreement (the "Cap Allocation Amount"). In the event that any holder of Series A Preferred Stock shall convert all of such holder's shares of Series A Preferred Stock into a number of shares of Common Stock which, in the aggregate, is less than such holder's Cap Allocation Amount, then the difference between such holder's Cap Allocation Amount and the number of shares of Common Stock actually issued to such holder shall be allocated to the respective Cap Allocation Amounts of the remaining holders of Series A Preferred Stock on a pro rata basis in proportion to the number of shares of Series Preferred Stock then held by each such holder. The provisions of this paragraph will apply only in the event the Company becomes listed for trading on the NASDAQ stock market (either Small Cap or National Market).

Limitation on Number of Conversion Shares. (a) Notwithstanding any other provision anything to the contrary contained herein, the Company shall not be obligated to issue any shares of Common Stock upon conversion of the Series A Preferred Stock Shares if the issuance of such shares of Common Stock would exceed that number of shares of Common Stock which the Company may issue upon conversion of the Series A Preferred Stock (the "Exchange Cap") Shares without breaching the Company's ’s obligations under the rules and or regulations of The Nasdaq Stock the Principal Market, Inc.or the market or exchange where the Common Stock is then traded (the “Exchange Cap”), except that such limitation shall not apply in the event that the Company (a) obtains the approval of its stockholders Stockholder Approval as required by the applicable rules of The Nasdaq Sock Market, Inc., the Principal Market (and any successor rule or regulation) for issuances of Common Stock in excess of such amount amount, or (b) obtains a written opinion from outside counsel to the Company that such approval is not required, which opinion shall be reasonably satisfactory to the holders of a majority of the shares of Series A Preferred Stock then outstanding; provided, however, that notwithstanding anything herein to the contrary, the Company will issue such number of shares of Common Stock issuable upon conversion of the Series A Preferred Stock at the then current Conversion Price up to the Exchange CapRequired Holders. Until such approval or written opinion is obtained, no holder purchaser of Series A Preferred Stock Shares pursuant to the Securities Purchase Agreement ("Purchase Agreement"the “Purchasers”) shall be issued, in the aggregate, upon conversion of Series A Preferred StockShares, shares of Common Stock in an amount greater than the product of (i) the Exchange Cap amount multiplied by (ii) a fraction, the numerator of which is the number of shares of Series A Preferred Stock Shares issued to such holder Purchaser pursuant to the Securities Purchase Agreement on the Initial Issuance Date and the denominator of which is the aggregate amount of all of the shares of Series A Preferred Stock Shares issued to all holders the Purchasers on the Initial Issuance Date pursuant to the Securities Purchase Agreement (the "“Exchange Cap Allocation Amount"Allocation”). In the event that any holder Purchaser shall sell or otherwise transfer any of Series A such Purchaser’s Preferred Stock Shares, the transferee shall be allocated a pro rata portion of such Purchaser’s Exchange Cap Allocation. In the event that any Holder shall convert all of such holder's shares of Series A Holder’s Preferred Stock Shares into a number of shares of Common Stock which, in the aggregate, is less than such holder's Holder’s Exchange Cap Allocation AmountAllocation, then the difference between such holder's Holder’s Exchange Cap Allocation Amount and the number of shares of Common Stock actually issued to such holder Holder shall be allocated to the respective Exchange Cap Allocation Amounts Allocations of the remaining holders of Series A Preferred Stock Holders on a pro rata basis in proportion to the number of shares of Series Preferred Stock Shares then held by each such holder. The provisions of this paragraph will apply only in the event the Company becomes listed for trading on the NASDAQ stock market (either Small Cap or National Market)Holder.

Limitation on Number of Conversion Shares. (a) Notwithstanding any other provision anything to the contrary contained herein, the Company shall not be obligated to issue any shares of Common Stock upon conversion of the Series A Preferred Stock Shares or exercise of the Warrants if the issuance of such shares of Common Stock would exceed that number of shares of Common Stock which the Company may issue upon conversion of the Series A Preferred Stock (Shares or exercise of the "Exchange Cap") Warrants without breaching the Company's obligations under the rules and or regulations of The Nasdaq Stock the Principal Market, Inc.or the market or exchange where the Common Stock is then traded (the "EXCHANGE CAP"), which number of shares of Common Stock was equal to 8,250,115 in the aggregate as of April 28, 2005, except that such limitation shall not apply in the event that the Company (a) obtains the approval of its stockholders as required by the applicable rules of The Nasdaq Sock Market, Inc., the Principal Market (or any successor rule or regulation) for issuances of Common Stock in excess of such amount amount, or (b) obtains a written opinion from outside counsel to the Company that such approval is not required, which opinion shall be reasonably satisfactory to the holders of a majority of the shares of Series A Preferred Stock then outstanding; provided, however, that notwithstanding anything herein to the contrary, the Company will issue such number of shares of Common Stock issuable upon conversion of the Series A Preferred Stock at the then current Conversion Price up to the Exchange CapRequired Holders. Until such approval or written opinion is obtained, no holder purchaser of Series A Preferred Stock Shares pursuant to the Securities Purchase Agreement (the "Purchase AgreementPURCHASERS") shall be issued, in the aggregate, upon conversion of Series A Preferred StockShares or exercise of the Warrants, shares of Common Stock in an amount greater than the product of (i) the Exchange Cap amount multiplied by (ii) a fraction, the numerator of which is the number of shares of Series A Preferred Stock Shares issued to such holder Purchaser pursuant to the Securities Purchase Agreement on the Initial Issuance Date and the denominator of which is the aggregate amount of all the shares of Series A Preferred Stock Shares issued to all holders the Purchasers pursuant to the Securities Purchase Agreement on the Initial Issuance Date (the "Cap Allocation AmountEXCHANGE CAP ALLOCATION"). In the event that any holder Purchaser shall sell or otherwise transfer any of Series A such Purchaser's Preferred Stock Shares, the transferee shall be allocated a pro rata portion of such Purchaser's Exchange Cap Allocation. In the event that any Holder shall convert all of such holderHolder's shares of Series A Preferred Stock Shares into a number of shares of Common Stock which, in the aggregate, is less than such holderHolder's Exchange Cap Allocation AmountAllocation, then the difference between such holderHolder's Exchange Cap Allocation Amount and the number of shares of Common Stock actually issued to such holder Holder shall be allocated to the respective Exchange Cap Allocation Amounts Allocations of the remaining holders of Series A Preferred Stock Holders on a pro rata basis in proportion to the number of shares of Series Preferred Stock Shares then held by each such holder. The provisions of this paragraph will apply only in the event the Company becomes listed for trading on the NASDAQ stock market (either Small Cap or National Market)Holder.

Limitation on Number of Conversion Shares. (a) Notwithstanding any other provision anything to the contrary contained herein, the Company shall not be obligated to issue any shares of Common Stock upon conversion of the Series A Preferred Stock Shares if the issuance of such shares of Common Stock would exceed that number of shares of Common Stock which the Company may issue upon conversion of the Series A Preferred Stock (the "Exchange Cap") Shares without breaching the Company's obligations under the rules and or regulations of The Nasdaq Stock the Principal Market, Inc.or the market or exchange where the Common Stock is then traded (the "Exchange Cap"), except that such limitation shall not apply in the event that the Company (a) obtains the stockholder approval of its stockholders as required by the applicable rules of The Nasdaq Sock Market, Inc., the Principal Market (and any successor rule or regulation) for issuances of Common Stock in excess of such amount amount, or (b) obtains a written opinion from outside counsel to the Company that such approval is not required, which opinion shall be reasonably satisfactory to the holders of a majority of the shares of Series A Preferred Stock then outstanding; provided, however, that notwithstanding anything herein to the contrary, the Company will issue such number of shares of Common Stock issuable upon conversion of the Series A Preferred Stock at the then current Conversion Price up to the Exchange CapRequired Holders. Until such approval or written opinion is obtained, no holder of Series A Preferred Stock pursuant to Holder on the Securities Purchase Agreement Initial Issuance Date (the "Purchase AgreementPurchasers") shall be issued, in the aggregate, upon conversion of Series A Preferred StockShares, shares of Common Stock in an amount greater than the product of (i) the Exchange Cap amount multiplied by (ii) a fraction, the numerator of which is the number of shares of Series A Preferred Stock issued to Shares owned by such holder pursuant to Purchaser on the Purchase Agreement Initial Issuance Date and the denominator of which is the aggregate amount of all of the shares Preferred Shares owned by all of Series A Preferred Stock issued to all holders pursuant to the Purchase Agreement Purchasers on the Initial Issuance Date (the "Exchange Cap Allocation AmountAllocation"). In the event that any holder Purchaser shall sell or otherwise transfer any of Series A such Purchaser's Preferred Stock Shares, the transferee shall be allocated a pro rata portion of such Purchaser's Exchange Cap Allocation. In the event that any Holder shall convert all of such holderHolder's shares of Series A Preferred Stock Shares into a number of shares of Common Stock which, in the aggregate, is less than such holderHolder's Exchange Cap Allocation AmountAllocation, then the difference between such holderHolder's Exchange Cap Allocation Amount and the number of shares of Common Stock actually issued to such holder Holder shall be allocated to the respective Exchange Cap Allocation Amounts Allocations of the remaining holders of Series A Preferred Stock Holders on a pro rata basis in proportion to the number of shares of Series Preferred Stock Shares then held by each such holder. The provisions of this paragraph will apply only in the event the Company becomes listed for trading on the NASDAQ stock market (either Small Cap or National Market)Holder.

Limitation on Number of Conversion Shares. (a) Notwithstanding any other provision herein, the Company shall not be obligated to issue any shares of Common Stock upon conversion of the Series A Preferred Stock Convertible Debentures if the issuance of such shares of Common Stock would exceed that number of plus shares of Common Stock which issued upon the Company may issue upon conversion exercise of the Series A Preferred Warrants issued under the Securities Purchase Agreement would exceed 19.9% of the shares of Common Stock issued and outstanding on the date of the Purchase Agreement (the "Exchange Cap") without breaching the Company's obligations under violating the corporate governance rules and regulations of The Nasdaq Stock the Principal Market, Inc., except that such limitation shall not apply in the event that the Company (ai) obtains the approval of its stockholders as required by applicable the corporate governance rules of The Nasdaq Sock Market, Inc., the Principal Market for issuances of Common Stock in excess of such amount Stock, or (bii) obtains a written opinion from outside counsel to the Company that such approval is not required, which opinion shall be reasonably satisfactory to the holders of a majority more than fifty percent (50%) of the shares Principal Amount of Series A Preferred Stock the Convertible Debentures then outstanding; provided, however, that notwithstanding anything herein to the contrary, the Company will issue such number of shares of Common Stock issuable upon conversion of the Series A Preferred Stock at the then current Conversion Price up to the Exchange Cap. Until such approval or written opinion is obtainedobtained or such action has been taken by the required number of holders, no holder purchaser of Series A Preferred Stock Convertible Debentures pursuant to the Securities Purchase Agreement ("Purchase Agreement, collectively, (the "Investors" and, individually, an "Investor") shall be issued, upon conversion of Series A Preferred StockConvertible Debentures, shares of Common Stock in an amount greater than the product of (ix) the Exchange Cap amount multiplied by (iiy) a fraction, the numerator of which is the number Principal Amount of shares of Series A Preferred Stock issued to Convertible Debentures purchased by such holder Investor pursuant to the Purchase Agreement and the denominator of which is the aggregate amount Principal Amount of all the shares of Series A Preferred Stock issued to all holders Convertible Debentures purchased by the Investors pursuant to the Purchase Agreement (the "Cap Allocation Amount"). In the event that any Investor shall sell or otherwise transfer any of such Investor's Convertible Debentures, the transferee shall be allocated a pro rata portion of such Investor's Cap Allocation Amount. In the event that any holder of Series A Preferred Stock a Convertible Debenture shall convert all of such holder's shares of Series A Preferred Stock Convertible Debenture into a number of shares of Common Stock whichthat, in the aggregate, is less than such holder's Cap Allocation Amount, then the difference between such holder's Cap Allocation Amount and the number of shares of Common Stock actually issued to such holder shall be allocated to the respective Cap Allocation Amounts of the remaining holders of Series A Preferred Stock Convertible Debentures on a pro rata basis in proportion to the number Principal Amount of shares of Series Preferred Stock Convertible Debentures then held by each such holder. The provisions of this paragraph will apply only in the event the Company becomes listed for trading on the NASDAQ stock market (either Small Cap or National Market)Holder.

Limitation on Number of Conversion Shares. (a) Notwithstanding any other provision anything to the contrary contained herein, the Company shall not be obligated to issue any shares of Common Stock upon conversion of the Series A Preferred Stock Shares or exercise of the Warrants if the issuance of such shares of Common Stock would exceed that number of shares of Common Stock which the Company may issue upon conversion of the Series A Preferred Stock (the "Exchange Cap") Shares without breaching the Company's ’s obligations under the rules and or regulations of The Nasdaq Stock Market, Inc.the Principal Market (the “Exchange Cap”), except that such limitation shall not apply in the event that the Company (a) obtains the approval of its stockholders shareholders as required by the applicable rules of The Nasdaq Sock Market, Inc., the Principal Market (or any successor rule or regulation) for issuances of Common Stock in excess of such amount amount, or (b) obtains a written opinion from outside counsel to the Company that such approval is not required, which opinion shall be reasonably satisfactory to the holders of a majority of the shares of Series A Preferred Stock then outstanding; provided, however, that notwithstanding anything herein to the contrary, the Company will issue such number of shares of Common Stock issuable upon conversion of the Series A Preferred Stock at the then current Conversion Price up to the Exchange CapRequired Holders. Until such approval or written opinion is obtained, no holder purchaser of Series A Preferred Stock Shares pursuant to the Securities Purchase Agreement ("Purchase Agreement"the “Purchasers”) shall be issued, in the aggregate, upon conversion of Series A Preferred StockShares or exercise of the Warrants, shares of Common Stock in an amount greater than the product of (i) the Exchange Cap amount multiplied by (ii) a fraction, the numerator of which is the number of shares of Series A Preferred Stock Shares issued to such holder Purchaser pursuant to the Securities Purchase Agreement on the Initial Issuance Date and the denominator of which is the aggregate amount of all the shares of Series A Preferred Stock Shares issued to all holders the Purchasers pursuant to the Securities Purchase Agreement on the Initial Issuance Date (the "“Exchange Cap Allocation Amount"Allocation”). In the event that any holder Purchaser shall sell or otherwise transfer any of Series A such Purchaser’s Preferred Stock Shares, the transferee shall be allocated a pro rata portion of such Purchaser’s Exchange Cap Allocation. In the event that any Holder shall convert all of such holder's shares of Series A Holder’s Preferred Stock Shares into a number of shares of Common Stock which, in the aggregate, is less than such holder's Holder’s Exchange Cap Allocation AmountAllocation, then the difference between such holder's Holder’s Exchange Cap Allocation Amount and the number of shares of Common Stock actually issued to such holder Holder shall be allocated to the respective Exchange Cap Allocation Amounts Allocations of the remaining holders of Series A Preferred Stock Holders on a pro rata basis in proportion to the number of shares of Series Preferred Stock Shares then held by each such holder. The provisions of this paragraph will apply only in the event the Company becomes listed for trading on the NASDAQ stock market (either Small Cap or National Market)Holder.

Limitation on Number of Conversion Shares. (a) Notwithstanding any other provision herein, the Company The Corporation shall not be obligated to issue any issue, in the aggregate, more than 7,420,000 shares of Common Stock as presently constituted (the "NASD Cap") upon conversion of the Series A Preferred, if issuance of a larger number of shares would constitute a breach of the Rules of NASD. Subject to the obligation to effect certain redemptions pursuant to the last four sentences of this Section, if further issuances of shares of Common Stock upon conversion of the Series A Preferred would constitute a breach of the NASD Rules (i.e., all of the shares permitted to be issued under the NASD Cap shall have been so issued), then so long thereafter as such limitation shall continue to be applicable and any shares of Series A Preferred are submitted for conversion such shares shall receive in cash an amount equal to the Cash Conversion Amount determined as provided in Section 4(f) hereof, in lieu of the Common Stock if which such shares would otherwise be entitled to receive upon conversion. Payment of the Cash Conversion Amount shall be made no later than as specified in Section 4(f) and shall bear daily interest thereafter at the rate of one-tenth of one percent per day until paid. The NASD Cap shall be proportionately and equitably adjusted in the event of stock splits, stock dividends, reverse stock splits, reclassifications or other such events, in such manner as the Board of Directors of the Corporation shall reasonably determine. If (A) the Corporation is unable to obtain shareholder approval concerning the issuance of such shares of Common Stock would exceed that number of shares of Common Stock which the Company may issue upon conversion of the Series A Preferred Stock at a meeting of shareholders of the Corporation held not later than June 30, 1998, then (B) the Corporation shall immediately redeem, at a "Exchange Cap") without breaching Special Redemption Price" equal to 110% of the Company's obligations under liquidation preference of such shares, the rules and regulations smallest number of The Nasdaq Stock MarketShares which is sufficient, Inc., except that such limitation shall not apply in the event Corporation's reasonable judgment, such that the Company (a) obtains the approval of its stockholders as required by applicable rules of The Nasdaq Sock Marketfollowing such redemption, Inc., for issuances of Common Stock in excess of such amount or (b) obtains a written opinion from outside counsel to the Company that such approval is not required, which opinion shall be reasonably satisfactory to the holders of a majority conversion of the remaining shares of Series A Preferred Stock then outstanding; provided, however, that notwithstanding anything herein to the contrary, the Company will issue such number of shares of Common Stock issuable upon conversion would not constitute a breach of the Series A Preferred Stock at Corporation's obligations under the then current Conversion Price up to the Exchange CapNASD Rules. Until such approval or written opinion is obtained, no holder of Series A Preferred Stock Any redemption effected pursuant to the Securities Purchase Agreement ("Purchase Agreement") preceding sentence shall require 15 days notice and the Redemption Date shall be issued, upon conversion not more than 15 days after the date specified in Clause A of Series A Preferred Stock, shares the preceding sentence. Such redemption shall be made pro-rata. If there shall be a default in payment of Common Stock in an amount greater than the product of (i) the Exchange Cap amount multiplied by (ii) a fractionSpecial Redemption Price, the numerator amount so payable shall bear daily interest from and after the Redemption Date at the rate of which is the number one-twentieth of shares of Series A Preferred Stock issued to such holder pursuant to the Purchase Agreement and the denominator of which is the aggregate amount of all the shares of Series A Preferred Stock issued to all holders pursuant to the Purchase Agreement (the "Cap Allocation Amount"). In the event that any holder of Series A Preferred Stock shall convert all of such holder's shares of Series A Preferred Stock into a number of shares of Common Stock which, in the aggregate, is less than such holder's Cap Allocation Amount, then the difference between such holder's Cap Allocation Amount and the number of shares of Common Stock actually issued to such holder shall be allocated to the respective Cap Allocation Amounts of the remaining holders of Series A Preferred Stock on a pro rata basis in proportion to the number of shares of Series Preferred Stock then held by each such holder. The provisions of this paragraph will apply only in the event the Company becomes listed for trading on the NASDAQ stock market (either Small Cap or National Market)one percent per day until paid.

Limitation on Number of Conversion Shares. (a) Notwithstanding any other provision herein, the Company The Corporation shall ------------------------------------------ not be obligated to issue any issue, in the aggregate, more than 3,717,529 shares of Common Stock as presently constituted (the "NASDAQ Cap") upon (1) conversion of the Series A 5% Preferred, (2) exercise of the warrants issued to Xxxxxxxx & Xxxxxx Capital Corp. or its designees in connection with the sale of the 5% Preferred Stock if and the sale of stock to entities advised by Dimensional Fund Advisors, and (3) the issuance of 600,000 shares on or about July 17, 1996 to entities advised by Dimensional Fund Advisors, if issuance of a larger number of shares would constitute a breach of the Corporation's obligations under its agreements with the NASD or NASDAQ or the rules of such organizations. Subject to the obligation to effect certain redemptions pursuant to the last three sentences of this subsection (l), if further issuances of shares of Common Stock pursuant to clauses (1) through (3) would exceed that constitute a breach of the Corporation's obligations under any applicable agreements with the NASD or NASDAQ or the rules of such organizations (i.e., all of the shares permitted to be issued under the NASDAQ Cap shall have been so issued), then so long thereafter as such limitation shall continue to be applicable and any shares of 5% Preferred are submitted for conversion, such shares shall receive in cash an amount equal to the greater of (i) 111.11% of the Liquidation Preference of such shares or (ii) the current value of the Common Stock which such shares would otherwise be entitled to receive upon conversion (such value per share to be the closing price of such shares as reported by NASDAQ on the Conversion Date), in lieu of the Common Stock which such shares would otherwise be entitled to receive upon conversion, and such shares will be deemed cancelled. Payment of said cash amount shall be made no later than one business day after the time specified in Section 4(b) for the delivery of Common Stock upon conversion, and shall bear daily interest thereafter at the rate of one-tenth of one percent per day until paid. Such maximum number of shares of Common Stock which the Company may issue upon conversion of the Series A Preferred Stock (the "Exchange Cap") without breaching the Company's obligations under the rules shall be proportionately and regulations of The Nasdaq Stock Market, Inc., except that such limitation shall not apply equitably adjusted in the event that of stock splits, stock dividends, reverse stock splits, reclassifications or other such events, in such manner as the Company (a) obtains the approval Board of its stockholders as required by applicable rules of The Nasdaq Sock Market, Inc., for issuances of Common Stock in excess of such amount or (b) obtains a written opinion from outside counsel to the Company that such approval is not required, which opinion shall be reasonably satisfactory to the holders of a majority Directors of the shares of Series A Preferred Stock then outstanding; provided, however, that notwithstanding anything herein Corporation shall reasonably determine. If the Corporation is unable to obtain the contrary, requisite shareholder approval concerning the Company will issue such number issuance of shares of Common Stock issuable upon conversion in connection with the events specified in clauses (1) through (3) above to satisfy all NASD and NASDAQ requirements prior to 91 days after the date of issuance (the "Redemption Date"), the Corporation shall then redeem, at a "Special Redemption Price" equal to 111.11% of the Series A Preferred Stock at Liquidation Preference of such shares, a number of shares equal to $75,000,000 (plus any earnings accumulated thereon from the then current Conversion Price up to Closing Date until the Exchange CapRedemption Date) divided by the Special Redemption Price. Until such approval or written opinion is obtained, no holder of Series A Preferred Stock Any redemption effected pursuant to the Securities Purchase Agreement ("Purchase Agreement") preceding sentence shall require no notice except the notification of pro-rata allocation provided for in the following sentence. Such redemption shall be issued, upon conversion of Series A Preferred Stock, shares of Common Stock in an amount greater than the product of (i) the Exchange Cap amount multiplied by (ii) a fraction, the numerator of which is made pro rata based on the number of shares of Series A the 5% Preferred Stock issued to such holder pursuant outstanding at 11:59 p.m. on the day prior to the Purchase Agreement Redemption Date, and as early as practicable on the denominator Redemption Date the Corporation shall notify each holder of which is 5% Preferred by the aggregate amount most rapid means of all the shares of Series A Preferred Stock issued to all holders pursuant communication available to the Purchase Agreement (Corporation, which may be facsimile transmission, of the "Cap Allocation Amount"). In the event that any holder of Series A Preferred Stock shall convert all of such holder's shares of Series A Preferred Stock into a pro rata number of shares of Common Stock which, in the aggregate, is less than such to be redeemed from each holder's Cap Allocation Amount, then the difference between such holder's Cap Allocation Amount and the number of shares of Common Stock actually issued to such holder . Such notice shall be allocated binding upon holders who have submitted their stock certificates for redemption prior to the respective Cap Allocation Amounts receipt of the remaining such notice, as well as on holders of Series A Preferred Stock on a pro rata basis in proportion to the number of shares of Series Preferred Stock then held by each such holder. The provisions of this paragraph will apply only in the event the Company becomes listed for trading on the NASDAQ stock market (either Small Cap or National Market).who submit their stock

Limitation on Number of Conversion Shares. (a) Notwithstanding any other provision herein, the Company The Corporation shall not be obligated to issue any issue, in the aggregate, more than 2,016,163 shares of Common Stock as presently constituted (the "NASD Cap") upon conversion of the 6% Preferred, if issuance of a larger number of shares would constitute a breach of the Rules of the NASD. Subject to the obligation to effect certain redemptions pursuant to the last four sentences of this Section, if further issuances of shares of Common Stock upon conversion of the Series A 6% Preferred would constitute a breach of the NASD Rules (i.e., all of the shares permitted to be issued under the NASD Cap shall have been so issued), then so long thereafter as such limitation shall continue to be applicable and any shares of 6% Preferred are submitted for conversion such shares shall receive in cash an amount equal to the Cash Conversion Amount determined as provided in Section 4(f) hereof, in lieu of the Common Stock if which such shares would otherwise be entitled to receive upon conversion. Payment of the Cash Conversion Amount shall be made no later than as specified in Section 4(f) and shall bear daily interest thereafter at the rate of one-tenth of one percent per day until paid. The NASD Cap shall be proportionately and equitably adjusted in the event of stock splits, stock dividends, reverse stock splits, reclassifications or other such events, in such manner as the Board of Directors of the Corporation shall reasonably determine. If (A) the Corporation is unable to obtain the requisite shareholder approval concerning the issuance of such shares of Common Stock upon conversion of the 6% Preferred to satisfy the NASD Rules prior to March 15, 1998, then (B) the Corporation shall immediately redeem, at a "Special Redemption Price" equal to 110% of the liquidation preference of such shares, the smallest number of Shares which is sufficient, in the Corporation's reasonable judgment, such that following such redemption, conversion of the remaining shares of 6% Preferred would exceed not constitute a breach of the Corporation's obligations under the NASD Rules. Any redemption effected pursuant to the preceding sentence shall require 15 days' notice and the Redemption Date shall be not more than 15 days after the date specified in Clause A of the preceding sentence. Such redemption shall be made pro-rata. If there shall be a default in payment of the Special Redemption Price, the amount so payable shall bear daily interest from and after the Redemption Date at the rate of one-twentieth of one percent per day until paid. EXHIBIT A As of November 30, 1997, options to purchase an aggregate of approximately 1,175,933 shares of Common Stock were outstanding. The Company is in various stages of negotiations with potential corporate partners concerning joint ventures and corporate partnerships, any of which, if consummated, could include the issuance by the Company of equity securities or rights to equity securities. December 19, 1997 To: Prospective Purchasers of 6% Preferred Stock of Oravax, Inc. Ladies and Gentlemen: The undersigned are stockholders of Oravax, Inc. (the "Company"). This letter is written with the understanding that in purchasing shares of the 6% Preferred Stock of the Company, you will rely on the promises contained in this letter. The stock which you are purchasing is convertible into Common Stock of the Company. We approve of the issuance to you of the full number of shares of Common Stock to which the Company you may issue be entitled upon conversion of your 6% Preferred Stock, and we hereby undertake to cause a meeting of the Series A Preferred shareholders of the Company to be held as soon as practicable and no later than March 15, 1998 for the purpose of approving such issuance and removing any limitation on the number of shares of Common Stock (the "Exchange Cap") without breaching the Company's obligations under the rules so issuable. We will vote our personal shares in favor of approving such matters and regulations of The Nasdaq Stock Market, Inc., except that such limitation shall not apply in the event that the Company (ai) obtains the approval one or all of its stockholders as required by applicable rules of The Nasdaq Sock Marketus are not present at any stockholders' meeting, Inc., for issuances of Common Stock in excess of such amount or (bii) obtains prior to such a meeting, we have not given a written opinion from outside counsel to the Company that such approval is not required, which opinion shall be reasonably satisfactory to the holders proxy in favor of a majority approving issuance of the shares of Series A Preferred Stock then outstanding; provided, however, that notwithstanding anything herein to the contrary, the Company will issue such full number of shares of Common Stock issuable upon conversion of the Series A 6% Preferred Stock at the then current Conversion Price up to the Exchange Cap. Until such approval or written opinion is obtained, no holder of Series A Preferred Stock pursuant to the Securities Purchase Agreement ("Purchase Agreement") shall be issued, upon conversion of Series A Preferred Stock, shares of Common Stock in an amount greater than the product of (i) the Exchange Cap amount multiplied by (ii) a fraction, the numerator of which is the number of shares of Series A Preferred Stock issued to such holder pursuant to the Purchase Agreement and the denominator of which is the aggregate amount of all the shares of Series A Preferred Stock issued to all holders pursuant to the Purchase Agreement (the "Cap Allocation Amount"). In the event that removing any holder of Series A Preferred Stock shall convert all of such holder's shares of Series A Preferred Stock into a number of shares of Common Stock which, in the aggregate, is less than such holder's Cap Allocation Amount, then the difference between such holder's Cap Allocation Amount and limitation on the number of shares of Common Stock actually issued to such so issuable, then each of us hereby irrevocably authorizes any holder shall be allocated to the respective Cap Allocation Amounts of the remaining holders of Series A 6% Preferred Stock on (a) to vote as proxy for each of the undersigned all the shares the undersigned are entitled to vote in favor of such matters, and (b) to introduce as proxy for the undersigned a pro rata basis in proportion motion to that effect at any meeting of the number of shares of Series Preferred Stock then held by each such holderCompany's stockholders. The provisions of this paragraph will apply only in the event the Company becomes listed for trading on the NASDAQ stock market (either Small Cap or National Market).Very truly yours, ---------------------------- -------------------------- Lancx X. Xxxxxx Jean X. Xxxxxxx ---------------------------- Andrx X. Xxxxxxx XEDICAL SCIENCE PARTNERS, L.P. By: ------------------------- EXHIBIT B

Limitation on Number of Conversion Shares. (a) Notwithstanding any other provision anything to the contrary contained herein, the Company shall not be obligated to issue any shares of Common Stock upon conversion of the Series A Preferred Stock Shares or exercise of the Warrants if the issuance of such shares of Common Stock would exceed that number of shares of Common Stock which the Company may issue upon conversion of the Series A Preferred Stock (Shares or upon exercise of the "Exchange Cap") Warrants without breaching the Company's ’s obligations under the rules and or regulations of The Nasdaq the NASDAQ Stock Market in addition to the applicable Principal Market, Inc.or the market or exchange where the Common Stock is then traded (the “Exchange Cap”), except that such limitation shall not apply in the event that the Company (a) obtains the approval of its stockholders as required by the applicable rules of The Nasdaq Sock Market, Inc., the NASDAQ Stock Market and the Principal Market (and any successor rule or regulation) for issuances of Common Stock in excess of such amount amount, or (b) obtains a written opinion from outside counsel to the Company that such approval is not required, which opinion shall be reasonably satisfactory to the holders of a majority of the shares of Series A Preferred Stock then outstanding; provided, however, that notwithstanding anything herein to the contrary, the Company will issue such number of shares of Common Stock issuable upon conversion of the Series A Preferred Stock at the then current Conversion Price up to the Exchange CapRequired Holders. Until such approval or written opinion is obtained, no holder purchaser of Series A Preferred Stock Shares pursuant to the Securities Purchase Agreement ("Purchase Agreement"the “Purchasers”) shall be issued, in the aggregate, upon conversion of Series A Preferred StockShares or exercise of the Warrants, shares of Common Stock in an amount greater than the product of (i) the Exchange Cap amount multiplied by (ii) a fraction, the numerator of which is the number of shares of Series A Preferred Stock Shares issued to such holder Purchaser pursuant to the Securities Purchase Agreement on the Initial Issuance Date and the denominator of which is the aggregate amount of all of the shares of Series A Preferred Stock Shares issued to all holders the Purchasers on the Initial Issuance Date pursuant to the Securities Purchase Agreement (the "“Exchange Cap Allocation Amount"Allocation”). In the event that any holder Purchaser shall sell or otherwise transfer any of Series A such Purchaser’s Preferred Stock Shares, the transferee shall be allocated a pro rata portion of such Purchaser’s Exchange Cap Allocation. In the event that any Holder shall convert all of such holder's shares of Series A Holder’s Preferred Stock Shares into a number of shares of Common Stock which, in the aggregate, is less than such holder's Holder’s Exchange Cap Allocation AmountAllocation, then the difference between such holder's Holder’s Exchange Cap Allocation Amount and the number of shares of Common Stock actually issued to such holder Holder shall be allocated to the respective Exchange Cap Allocation Amounts Allocations of the remaining holders of Series A Preferred Stock Holders on a pro rata basis in proportion to the number of shares of Series Preferred Stock Shares then held by each such holder. The provisions of this paragraph will apply only in the event the Company becomes listed for trading on the NASDAQ stock market (either Small Cap or National Market)Holder.

Limitation on Number of Conversion Shares. (a) Notwithstanding any other provision herein, the The Company shall not be obligated to issue any shares of Common Stock Shares upon conversion of the Series A Preferred Stock Notes if the issuance of such shares of Common Stock Shares would exceed that number of shares of Common Stock Shares which the Company may issue upon conversion of the Series A Preferred Stock Notes (the "Exchange CapEXCHANGE CAP") without breaching the Company's obligations under the rules and regulations of The Nasdaq Stock the Principal Market, Inc., except that such limitation shall not apply in the event that the Company (a) obtains the approval of its stockholders as required by the applicable rules of The Nasdaq Sock Market, Inc., the Principal Market (or any successor rule or regulation) for issuances of Common Stock Shares in excess of such amount or (b) obtains a written opinion from outside counsel to the Company that such approval is not required, which opinion shall be reasonably satisfactory to the holders of a majority of the shares of Series A Preferred Stock then outstanding; provided, however, that notwithstanding anything herein to the contrary, the Company will issue such number of shares of Common Stock issuable upon conversion of the Series A Preferred Stock at the then current Conversion Price up to the Exchange Capamount. Until such approval or written opinion is obtained, no holder purchaser of Series A Preferred Stock the Notes pursuant to the Securities Purchase Agreement (the "Purchase AgreementPURCHASERS") shall be issued, upon conversion of Series A Preferred Stockthe Notes, shares of Common Stock Shares in an amount greater than the product of (i) the Exchange Cap amount then in effect multiplied by (ii) a fraction, the numerator of which is the number principal amount of shares of Series A Preferred Stock the Notes issued to such holder Purchaser pursuant to the Securities Purchase Agreement and the denominator of which is the aggregate principal amount of all the shares of Series A Preferred Stock Notes issued to all holders the Purchasers pursuant to the Securities Purchase Agreement (the "Cap Allocation AmountCAP ALLOCATION AMOUNT"). In the event that any Purchaser shall sell or otherwise transfer any of such Purchaser's Notes, the transferee shall be allocated a pro rata portion of such Purchaser's Cap Allocation Amount. In the event that any holder of Series A Preferred Stock the Notes shall convert and exercise, as the case may be, all of such holder's shares of Series A Preferred Stock Notes into a number of shares of Common Stock Shares which, in the aggregate, is less than such holder's Cap Allocation Amount, then the difference between such holder's Cap Allocation Amount and the number of shares of Common Stock Shares actually issued to such holder shall be allocated to the respective Cap Allocation Amounts of the remaining holders of Series A Preferred Stock Notes on a pro rata basis in proportion to the number of shares of Series Preferred Stock Shares then issuable under the Notes then held by each such holder. The provisions of this paragraph will apply only in the event the Company becomes listed for trading on the NASDAQ stock market (either Small Cap or National Market).

Limitation on Number of Conversion Shares. (a) Notwithstanding any other provision herein, the The Company shall not be obligated to issue any shares of Common Stock upon conversion of the Series A Preferred Stock Shares if the issuance of such shares of Common Stock would exceed that number of shares of Common Stock which the Company may issue upon conversion Conversion of the Series A Preferred Stock Shares (the "Exchange Cap") without breaching the Company's obligations under the rules and or regulations of The Nasdaq Stock the Principal Market, Inc.or the market or exchange where the Common Stock is then traded, except that such limitation shall not apply in the event that the Company (a) obtains the approval of its stockholders as required by the applicable rules of The Nasdaq Sock the Principal Market, Inc.or the market or exchange where the Common Stock is then traded, (or any successor rule or regulation) for issuances of Common Stock in excess of such amount or (b) obtains a written opinion from outside counsel to the Company that such approval is not required, which opinion shall be reasonably satisfactory to the holders Holders of a majority of the shares of Series A Preferred Stock Shares then outstanding; provided, however, that notwithstanding anything herein to the contrary, the Company will issue such number of shares of Common Stock issuable upon conversion of the Series A Preferred Stock at the then current Conversion Price up to the Exchange Cap. Until such approval or written opinion is obtained, no holder purchaser of Series A Preferred Stock Shares pursuant to the Securities Purchase Agreement (the "Purchase AgreementPurchasers") shall be issued, upon conversion of Series A Preferred StockShares, shares of Common Stock in an amount greater than the product of (i) the Exchange Cap amount multiplied by (ii) a fraction, the numerator of which is the number of shares of Series A Preferred Stock Shares issued to such holder Purchaser pursuant to the Securities Purchase Agreement and the denominator of which is the aggregate amount of all the shares of Series A Preferred Stock Shares issued to all holders the Purchasers pursuant to the Securities Purchase Agreement (the "Cap Allocation Amount"). In the event that any holder Purchaser shall sell or otherwise transfer any of Series A such Purchaser's Preferred Stock Shares, the transferee shall be allocated a pro rata portion of such Purchaser's Cap Allocation Amount. In the event that any Holder of Preferred Shares shall convert all of such holderHolder's shares of Series A Preferred Stock Shares into a number of shares of Common Stock which, in the aggregate, is less than such holderHolder's Cap Allocation Amount, then the difference between such holderHolder's Cap Allocation Amount and the number of shares of Common Stock actually issued to such holder Holder shall be allocated to the respective Cap Allocation Amounts of the remaining holders Holders of Series A Preferred Stock Shares on a pro rata basis in proportion to the number of shares of Series Preferred Stock Shares then held by each such holder. The provisions of this paragraph will apply only in the event the Company becomes listed for trading on the NASDAQ stock market (either Small Cap or National Market)Holder.

Limitation on Number of Conversion Shares. (a) Notwithstanding any other provision herein, the The Company shall not be obligated to issue any shares of Common Stock upon conversion of the Series A Preferred Stock this Note if the issuance of such shares of Common Stock would exceed that number of shares of Common Stock which the Company may issue upon conversion of the Series A Preferred Stock Notes (the "Exchange Cap") without breaching the Company's obligations under the rules and or regulations of The Nasdaq Stock the Principal Market, Inc.or the market or exchange where the Common Stock is then traded, except that such limitation shall not apply in the event that the Company (a) obtains the approval of its stockholders as required by the applicable rules of The Nasdaq Sock the Principal Market, Inc.or the market or exchange where the Common Stock is then traded, (or any successor rule or regulation) for issuances of Common Stock in excess of such amount or (b) obtains a written opinion from outside counsel to the Company that such approval is not required, which opinion shall be reasonably satisfactory to the holders of a majority of the shares Conversion Amount of Series A Preferred Stock the Notes then outstanding; provided, however, that notwithstanding anything herein to the contrary, the Company will issue such number of shares of Common Stock issuable upon conversion of the Series A Preferred Stock at the then current Conversion Price up to the Exchange Cap. Until such approval or written opinion is obtained, no holder purchaser of Series A Preferred Stock Notes pursuant to the Securities Purchase Agreement (the "Purchase AgreementPurchasers") shall be issued, upon conversion of Series A Preferred Stockthe Notes, shares of Common Stock in an amount greater than the product of (i) the Exchange Cap amount multiplied by (ii) a fraction, the numerator of which is the number principal amount of shares of Series A Preferred Stock the Notes issued to such holder Purchaser pursuant to the Securities Purchase Agreement and the denominator of which is the aggregate principal amount of all the shares of Series A Preferred Stock Notes issued to all holders the Purchasers pursuant to the Securities Purchase Agreement (the "Cap Allocation Amount"). In the event that any Purchaser shall sell or otherwise transfer any of such Purchaser's Notes, the transferee shall be allocated a pro rata portion of such Purchaser's Cap Allocation Amount. In the event that any holder of Series A Preferred Stock Notes, shall convert all of such holder's shares of Series A Preferred Stock Notes into a number of shares of Common Stock which, in the aggregate, is less than such holder's Cap Allocation Amount, then the difference between such holder's Cap Allocation Amount and the number of shares of Common Stock actually issued to such holder shall be allocated to the respective Cap Allocation Amounts of the remaining holders Holders of Series A Preferred Stock Notes on a pro rata basis in proportion to the number Conversion Amount of shares of Series Preferred Stock Notes then held by each such holder. The provisions of this paragraph will apply only in the event the Company becomes listed for trading on the NASDAQ stock market (either Small Cap or National Market)Holder.

Limitation on Number of Conversion Shares. (a) Notwithstanding any other provision herein, the The Company shall not be obligated to issue any shares of Common Stock upon conversion of the Series A Preferred Stock if Debentures, in the issuance of such shares of Common Stock would exceed that aggregate, more than a number of shares of Common Stock which the Company may issue upon conversion equal to 19.99% of the Series A Preferred number of shares of Common Stock outstanding on the Issuance Date (such amount to be proportionately and equitably adjusted from time to time in the event of stock splits, stock dividends, combinations, reverse stock splits, reclassification, capital reorganization and similar events relating to the Common Stock) (the "Exchange CapEXCHANGE CAP") without breaching ), if issuance of a larger number of shares of Common Stock would constitute a breach of the Company's obligations under the rules and or regulations of NASDAQ or any other principal securities exchange or market upon which the Common Stock is or becomes traded. The Nasdaq Stock MarketExchange Cap shall be allocated among the Holders pro rata based on the total principal amount outstanding of the Debentures. Assuming the Company has not previously obtained (or attempted to obtain) Shareholder Approval (as defined below), Inc., except that such limitation then the Company shall not apply issue to any Holder so requesting conversion of Debentures its pro rata portion of the Exchange Cap in the event same ratio that the Company (a) obtains the approval principal amount of its stockholders as required Debentures held by applicable rules of The Nasdaq Sock Market, Inc., for issuances of Common Stock in excess of any such amount or (b) obtains a written opinion from outside counsel Holder bears to the aggregate principal amount of Debentures then outstanding and, with respect to the aggregate principal amount of the Debentures that remains outstanding after such issuance (the "REMAINING PRINCIPAL AMOUNT"), the Company that shall at the Holder's request, (x) as promptly as possible but in no event later than 60 days after such approval is not requiredConversion Date, which opinion shall be reasonably satisfactory to convene a meeting of the holders of the Common Stock and use its best efforts to obtain the Shareholder Approval or a majority waiver of such approval from the shares of Series A Preferred Stock then outstanding; providedappropriate exchange and (y) as promptly as possible from time to time, howeverafter a written request by the Holder, that notwithstanding anything herein to the contrary, the Company will issue such number of shares of Common Stock issuable upon conversion of the Series A Preferred Stock at the then current a Conversion Price up equal to the Exchange Cap. Until such approval or written opinion is obtained, no holder of Series A Preferred Stock pursuant to the Securities Purchase Agreement ("Purchase Agreement") shall be issued, upon conversion of Series A Preferred Stock, shares of Common Stock in an amount greater than the product of (i) the Exchange Cap amount multiplied by (ii) a fraction, the numerator of which is the number of shares of Series A Preferred Stock issued to such holder pursuant to the Purchase Agreement and the denominator of which is the aggregate amount of all the shares of Series A Preferred Stock issued to all holders pursuant to the Purchase Agreement (the "Cap Allocation Amount"). In the event that any holder of Series A Preferred Stock shall convert all of such holder's shares of Series A Preferred Stock into a number of shares of Common Stock which, in the aggregate, is less than such holder's Cap Allocation Amount, then the difference between such holder's Cap Allocation Amount and the number of shares of Common Stock actually issued to such holder shall be allocated to the respective Cap Allocation Amounts of the remaining holders of Series A Preferred Stock on a pro rata basis in proportion to the number of shares of Series Preferred Stock then held by each such holder. The provisions of this paragraph will apply only in the event the Company becomes listed for trading Closing Price on the NASDAQ stock market (either Small Cap or National Market).trading day immediately preceding the date of such

Limitation on Number of Conversion Shares. (a) Notwithstanding any other provision anything to the contrary contained herein, the Company shall not be obligated to issue any shares of Common Stock upon conversion of the Series A Preferred Stock Shares or exercise of the Warrants if the issuance of such shares of Common Stock would exceed that number of shares of Common Stock which the Company may issue upon conversion of the Series A Preferred Stock (the "Exchange Cap") Shares without breaching the Company's obligations under the rules and or regulations of The Nasdaq Stock Market, Inc.the Principal Market (the "Exchange Cap"), except that such limitation shall not apply in the event that the Company (a) obtains the approval of its stockholders as required by the applicable rules of The Nasdaq Sock Market, Inc., the Principal Market (or any successor rule or regulation) for issuances of Common Stock in excess of such amount amount, or (b) obtains a written opinion from outside counsel to the Company that such approval is not required, which opinion shall be reasonably satisfactory to the holders of a majority of the shares of Series A Preferred Stock then outstanding; provided, however, that notwithstanding anything herein to the contrary, the Company will issue such number of shares of Common Stock issuable upon conversion of the Series A Preferred Stock at the then current Conversion Price up to the Exchange CapRequired Holders. Until such approval or written opinion is obtained, no holder purchaser of Series A Preferred Stock Shares pursuant to the Securities Purchase Agreement (the "Purchase AgreementPurchasers") shall be issued, in the aggregate, upon conversion of Series A Preferred StockShares or exercise of the Warrants, shares of Common Stock in an amount greater than the product of (i) the Exchange Cap amount multiplied by (ii) a fraction, the numerator of which is the number of shares of Series A Preferred Stock Shares issued to such holder Purchaser pursuant to the Securities Purchase Agreement on the Initial Issuance Date and the denominator of which is the aggregate amount of all the shares of Series A Preferred Stock Shares issued to all holders the Purchasers pursuant to the Securities Purchase Agreement on the Initial Issuance Date (the "Exchange Cap Allocation AmountAllocation"). In the event that any holder Purchaser shall sell or otherwise transfer any of Series A such Purchaser's Preferred Stock Shares, the transferee shall be allocated a pro rata portion of such Purchaser's Exchange Cap Allocation. In the event that any Holder shall convert all of such holderHolder's shares of Series A Preferred Stock Shares into a number of shares of Common Stock which, in the aggregate, is less than such holderHolder's Exchange Cap Allocation AmountAllocation, then the difference between such holderHolder's Exchange Cap Allocation Amount and the number of shares of Common Stock actually issued to such holder Holder shall be allocated to the respective Exchange Cap Allocation Amounts Allocations of the remaining holders of Series A Preferred Stock Holders on a pro rata basis in proportion to the number of shares of Series Preferred Stock Shares then held by each such holder. The provisions of this paragraph will apply only in the event the Company becomes listed for trading on the NASDAQ stock market (either Small Cap or National Market)Holder.

Limitation on Number of Conversion Shares. (a) Notwithstanding any other provision herein, the The Company shall not be obligated to issue any shares of Common Stock upon conversion of the Series A Preferred Stock this Note if the issuance of such shares of Common Stock would exceed that number of shares of Common Stock which the Company may issue upon conversion of the Series A Preferred Stock Notes (the "Exchange Cap") without breaching the Company's obligations under the rules and or regulations of The Nasdaq Stock the Principal Market, Inc.or the market or exchange where the Common Stock is then traded, except that such limitation shall not apply in the event that the Company (a) obtains the approval of its stockholders as required by the applicable rules of The Nasdaq Sock the Principal Market, Inc.or the market or exchange where the Common Stock is then traded, (or any successor rule or regulation) for issuances of Common Stock in excess of such amount or (b) obtains a written opinion from outside counsel to the Company that such approval is not required, which opinion shall be reasonably satisfactory to the holders of a majority of the shares Conversion Amount of Series A Preferred Stock the Notes then outstanding; provided, however, that notwithstanding anything herein to the contrary, the Company will issue such number of shares of Common Stock issuable upon conversion of the Series A Preferred Stock at the then current Conversion Price up to the Exchange Cap. Until such approval or written opinion is obtained, no holder of Series A Preferred Stock pursuant to Purchaser (as that term is defined in the Securities Purchase Agreement ("Purchase Agreement") shall be issued, upon conversion of Series A Preferred Stockthe Notes, shares of Common Stock in an amount greater than the product of (i) the Exchange Cap amount multiplied by (ii) a fraction, the numerator of which is the number principal amount of shares of Series A Preferred Stock the Notes issued to such holder Purchaser pursuant to the Securities Purchase Agreement and the denominator of which is the aggregate principal amount of all the shares of Series A Preferred Stock Notes issued to all holders the Purchasers pursuant to the Securities Purchase Agreement (the "Cap Allocation Amount"). In If any Purchaser shall sell or otherwise transfer any of such Purchaser's Notes, the event that transferee shall be allocated a pro rata portion of such Purchaser's Cap Allocation Amount. If any holder of Series A Preferred Stock Notes, shall convert all of such holder's shares of Series A Preferred Stock Notes into a number of shares of Common Stock which, in the aggregate, is less than such holder's Cap Allocation Amount, then the difference between such holder's Cap Allocation Amount and the number of shares of Common Stock actually issued to such holder shall be allocated to the respective Cap Allocation Amounts of the remaining holders of Series A Preferred Stock Notes on a pro rata basis in proportion to the number Conversion Amount of shares of Series Preferred Stock Notes then held by each such holder. The provisions of this paragraph will apply only in the event the Company becomes listed for trading on the NASDAQ stock market (either Small Cap or National Market).

Limitation on Number of Conversion Shares. (a) Notwithstanding any other provision herein, the Company shall not be obligated to issue any shares of Common Stock upon conversion of the Series A B Preferred Stock if the issuance of such shares of Common Stock would exceed that number of shares of Common Stock which the Company may issue upon conversion of the Series A B Preferred Stock (the "Exchange Cap") without breaching the Company's obligations under the rules and regulations of The Nasdaq Stock Market, Inc., except that such limitation shall not apply in the event that the Company (a) obtains the approval of its stockholders as required by applicable rules of The Nasdaq Sock Stock Market, Inc., for issuances of Common Stock in excess of such amount or (b) obtains a written opinion from outside counsel to the Company that such approval is not required, which opinion shall be reasonably satisfactory to the holders of a majority of the shares of Series A B Preferred Stock then outstanding; provided, however, that notwithstanding anything herein to the contrary, the Company will issue such number of shares of Common Stock issuable upon conversion of the Series A B Preferred Stock at the then current Conversion Price up to the Exchange Cap. Until such approval or written opinion is obtained, no holder of Series A B Preferred Stock pursuant to the Securities Purchase Agreement ("Purchase Agreement") shall be issued, upon conversion of Series A B Preferred Stock, shares of Common Stock in an amount greater than the product of (i) the Exchange Cap amount multiplied by (ii) a fraction, the numerator of which is the number of shares of Series A B Preferred Stock issued to such holder pursuant to the Purchase Agreement and the denominator of which is the aggregate amount of all the shares of Series A B Preferred Stock issued to all holders pursuant to the Purchase Agreement (the "Cap Allocation Amount"). In the event that any holder of Series A B Preferred Stock shall convert all of such holder's shares of Series A B Preferred Stock into a number of shares of Common Stock which, in the aggregate, is less than such holder's Cap Allocation Amount, then the difference between such holder's Cap Allocation Amount and the number of shares of Common Stock actually issued to such holder shall be allocated to the respective Cap Allocation Amounts of the remaining holders of Series A B Preferred Stock on a pro rata basis in proportion to the number of shares of Series Preferred Stock then held by each such holder. The provisions of this paragraph will apply only in the event the Company becomes listed for trading on the NASDAQ stock market (either Small Cap or National Market).

Limitation on Number of Conversion Shares. (a) Notwithstanding any other provision herein, the Company The Corporation shall not be obligated to issue any issue, in the aggregate, more than 3,150,000 shares of Common Stock as presently constituted (the "Nasdaq Cap") upon conversion of the 6% Preferred, if issuance of a larger number of shares would constitute a breach of the Rules or Designation Criteria of the NASDAQ Stock Market (the "NASDAQ Rules"). Subject to the obligation to effect certain redemptions pursuant to the last three sentences of this Section, if further issuances of shares of Common Stock upon conversion of the Series A 6% Preferred would constitute a breach of the NASDAQ Rules (i.e., all of the shares permitted to be issued under the Nasdaq Cap shall have been so issued), then so long thereafter as such limitation shall continue to be applicable and any shares of 6% Preferred are submitted for conversion such shares shall receive in cash an amount equal to the Cash Conversion Amount determined as provided in Section 4(f) hereof, in lieu of the Common Stock if which such shares would otherwise be entitled to receive upon conversion. Payment of the Cash Conversion Amount shall be made no later than as specified in Section 4(f) and shall bear daily interest thereafter at the rate of one-tenth of one percent per day until paid. The NASDAQ Cap shall be proportionately and equitably adjusted in the event of stock splits, stock dividends, reverse stock splits, reclassifications or other such events, in such manner as the Board of Directors of the Corporation shall reasonably determine. If (A) the Corporation is unable to obtain the requisite shareholder approval concerning the issuance of such shares of Common Stock would exceed that number of shares of Common Stock which the Company may issue upon conversion of the Series A 6% Preferred Stock to satisfy the NASDAQ Rules prior to December 31, 1997, then (B) the Corporation shall immediately redeem, at a "Exchange Cap") without breaching Special Redemption Price" equal to 110% of the Companyliquidation preference of such shares, the smallest number of Shares which is sufficient, in the Corporation's reasonable judgment, such that following such redemption, conversion of the remaining shares of 6% Preferred would not constitute a breach of the Corporation's obligations under the rules and regulations of The Nasdaq Stock Market, Inc., except that such limitation shall not apply in the event that the Company (a) obtains the approval of its stockholders as required by applicable rules of The Nasdaq Sock Market, Inc., for issuances of Common Stock in excess of such amount or (b) obtains a written opinion from outside counsel to the Company that such approval is not required, which opinion shall be reasonably satisfactory to the holders of a majority of the shares of Series A Preferred Stock then outstanding; provided, however, that notwithstanding anything herein to the contrary, the Company will issue such number of shares of Common Stock issuable upon conversion of the Series A Preferred Stock at the then current Conversion Price up to the Exchange CapNASDAQ Rules. Until such approval or written opinion is obtained, no holder of Series A Preferred Stock Any redemption effected pursuant to the Securities Purchase Agreement ("Purchase Agreement") preceding sentence shall require 15 days' notice and the Redemption Date shall be issued, upon conversion not more than 15 days after the date specified in Clause A of Series A Preferred Stock, shares the preceding sentence. Such redemption shall be made pro-rata. If there shall be a default in payment of Common Stock in an amount greater than the product of (i) the Exchange Cap amount multiplied by (ii) a fractionSpecial Redemption Price, the numerator amount so payable shall bear daily interest from and after the Redemption Date at the rate of which is the number one-tenth of shares of Series A Preferred Stock issued to such holder pursuant to the Purchase Agreement and the denominator of which is the aggregate amount of all the shares of Series A Preferred Stock issued to all holders pursuant to the Purchase Agreement (the "Cap Allocation Amount")one percent per day until paid. In the event that any holder of Series A Preferred Stock shall convert all of such holder's shares of Series A Preferred Stock into a number of shares of Common Stock which, in the aggregate, is less than such holder's Cap Allocation Amount, then the difference between such holder's Cap Allocation Amount and the number of shares of Common Stock actually issued to such holder shall be allocated to the respective Cap Allocation Amounts of the remaining holders of Series A Preferred Stock on a pro rata basis in proportion to the number of shares of Series Preferred Stock then held by each such holder. The provisions of this paragraph will apply only in the event the Company becomes listed for trading on the NASDAQ stock market (either Small Cap or National Market).8

Limitation on Number of Conversion Shares. (a) Notwithstanding any other provision anything to the contrary contained herein, the Company shall not be obligated to issue any shares of Common Stock upon conversion of the Series A Preferred Stock Shares if the issuance of such shares of Common Stock would exceed that number of shares of Common Stock which the Company may issue upon conversion of the Series A Preferred Stock (the "Exchange Cap") Shares without breaching the Company's ’s obligations under the rules and or regulations of The Nasdaq Stock the Principal Market, Inc.or the market or exchange where the Common Stock is then traded (the “Exchange Cap”), except that such limitation shall not apply in the event that the Company (a) obtains the stockholder approval of its stockholders as required by the applicable rules of The Nasdaq Sock Market, Inc., the Principal Market (and any successor rule or regulation) for issuances of Common Stock in excess of such amount amount, or (b) obtains a written opinion from outside counsel to the Company that such approval is not required, which opinion shall be reasonably satisfactory to the holders of a majority of the shares of Series A Preferred Stock then outstanding; provided, however, that notwithstanding anything herein to the contrary, the Company will issue such number of shares of Common Stock issuable upon conversion of the Series A Preferred Stock at the then current Conversion Price up to the Exchange CapRequired Holders. Until such approval or written opinion is obtained, no holder purchaser of Series A Preferred Stock Shares pursuant to the Securities Purchase Agreement ("Purchase Agreement"the “Purchasers”) shall be issued, in the aggregate, upon conversion of Series A Preferred StockShares, shares of Common Stock in an amount greater than the product of (i) the Exchange Cap amount multiplied by (ii) a fraction, the numerator of which is the number of shares of Series A Preferred Stock Shares issued to such holder Purchaser pursuant to the Securities Purchase Agreement on the Initial Issuance Date and the denominator of which is the aggregate amount of all of the shares of Series A Preferred Stock Shares issued to all holders the Purchasers on the Initial Issuance Date pursuant to the Securities Purchase Agreement (the "“Exchange Cap Allocation Amount"Allocation”). In the event that any holder Purchaser shall sell or otherwise transfer any of Series A such Purchaser’s Preferred Stock Shares, the transferee shall be allocated a pro rata portion of such Purchaser’s Exchange Cap Allocation. In the event that any Holder shall convert all of such holder's shares of Series A Holder’s Preferred Stock Shares into a number of shares of Common Stock which, in the aggregate, is less than such holder's Holder’s Exchange Cap Allocation AmountAllocation, then the difference between such holder's Holder’s Exchange Cap Allocation Amount and the number of shares of Common Stock actually issued to such holder Holder shall be allocated to the respective Exchange Cap Allocation Amounts Allocations of the remaining holders of Series A Preferred Stock Holders on a pro rata basis in proportion to the number of shares of Series Preferred Stock Shares then held by each such holder. The provisions of this paragraph will apply only in the event the Company becomes listed for trading on the NASDAQ stock market (either Small Cap or National Market)Holder.]

Limitation on Number of Conversion Shares. The Company (a1) Notwithstanding any other provision herein, the Company shall not be obligated to issue any shares of Common Stock Conversion Shares upon conversion of this Debenture and (2) shall not be permitted to issue Interest Shares (but instead shall make Cash Interest Payments) to the Series A Preferred Stock if extent that the issuance of such shares of Common Stock would cause the Company to exceed that number of shares of Common Stock which the Company may issue upon conversion of the Series A Preferred Stock under this Debenture (the "Exchange Cap") without breaching the Company's obligations under the rules and or regulations of The Nasdaq Stock the Principal Market, Inc., except that such limitation shall not apply in the event that the Company (a) obtains the approval of its stockholders as required by applicable rules of The Nasdaq Sock Market, Inc., the Principal Market (or any successor rule or regulation) for issuances of Common Stock in excess of such amount or (b) obtains a written opinion from outside counsel to the Company that such approval is not required, which opinion shall be reasonably satisfactory to the holders of a majority of the shares of Series A Preferred Stock then outstanding; provided, however, that notwithstanding anything herein to the contrary, the Company will issue such number of shares of Common Stock issuable upon conversion of the Series A Preferred Stock at the then current Conversion Price up to the Exchange Capamount. Until such approval or written opinion is obtained, no the holder of Series A Preferred Stock pursuant to the Securities Purchase Agreement ("Purchase Agreement") this Debenture shall not be issued, upon conversion of Series A Preferred Stockthis Debenture, shares of Common Stock Conversion Shares in an amount greater than the difference between (i) the product of (ix) the Exchange Cap amount multiplied by (iiy) a fraction, the numerator of which is the number aggregate principal amount of shares of Series A Preferred Stock Debentures issued to such holder Holder pursuant to the Securities Purchase Agreement and the denominator of which is the aggregate principal amount of all the shares of Series A Preferred Stock Debentures issued to all Debenture holders pursuant to the Securities Purchase Agreement and (ii) the sum of (A) the aggregate number of Interest Shares issued to the holder of this Debenture (and all predecessor holders) as of the date of such conversion plus (B) the aggregate number of shares of Common Stock issued to the holder of this Debenture (and all predecessor holders) upon the exercise of any Warrants held by such holder (and all predecessor holders) as of the date of such conversion (such difference, the "Cap Allocation Amount"). In If at any time when the event that Holder shall deliver a Conversion Notice pursuant to Section 4 hereof the Company shall be prohibited pursuant to the provisions of this Section 26 from issuing all or any holder portion of Series A Preferred Stock shall convert all of the Conversion Shares issuable pursuant to such holder's shares of Series A Preferred Stock into a number of shares of Common Stock which, in the aggregate, is less than such holder's Cap Allocation AmountConversion Notice, then the difference between Company shall pay in immediately available funds to the holder of this Debenture within two (2) Business Days of the date of delivery of such holder's Cap Allocation Amount and Conversion Notice, an amount in cash equal to the product of (X) the number of shares of Common Stock actually which could not be issued to by virtue of the limitations contained in this Section 26 multiplied by (Y) the average of the Closing Sale Prices of the Common Stock on each of the five (5) trading days ending on the third trading day immediately preceding the date the date of delivery of such holder Conversion Notice. The Outstanding Principal Amount of this Debenture shall be allocated reduced by an amount equal to the respective Cap Allocation Amounts Outstanding Principal Amount of this Debenture designated in the Conversion Notice that could not be converted by virtue of the remaining holders of Series A Preferred Stock on a pro rata basis limitations set forth in proportion this Section 26 and for which the Company has made payment pursuant to the number of shares of Series Preferred Stock then held by each such holder. The provisions of this paragraph will apply only in the event the Company becomes listed for trading on the NASDAQ stock market (either Small Cap or National Market)immediately preceding sentence.