Common use of LIMITATION ON SHARES ISSUABLE ON CONVERSION; MANDATORY REDEMPTION Clause in Contracts

LIMITATION ON SHARES ISSUABLE ON CONVERSION; MANDATORY REDEMPTION. (1) to all Interest Notes and Other Notes held by the Holder at the close of business on the Conversion Date for such conversion, based on the outstanding principal amounts thereof, and (2) if the Holder does not hold any Interest Notes or Other Notes at the close of business on such Conversion Date, to the Other Notes, based on the principal amounts thereof outstanding at the close of business on such Conversion Date. If any Other Note is converted in full, repaid, repurchased or redeemed, all of the portion of the Maximum Share Amount (as defined in such Other Note) of such Other Note not re-allocated to Other Notes held by the holder of such Other Note and which remains unissued after such conversion, repayment, repurchase or redemption shall be re-allocated to this Note, the Interest Notes and the Other Notes outstanding at the close of business on the date of such conversion, repayment, repurchase or redemption of the Other Note so converted, repaid, repurchased or redeemed pro rata based on the principal amounts outstanding at the close of business on such date. (1) If on or after December 16, 1998 and on or prior to September 4, 2001 a Maximum Share Amount Inconvertibility occurs, then the Company shall promptly, but in no event later than five Business Days after each such occurrence, give an Inconvertibility Notice to the Holder (by telephone line facsimile transmission at such number as the Holder has specified in writing to the Company for such purposes or, if the Holder shall not have specified any such number, by overnight courier at the Holder's address as the same appears on the records of the Company) and the Holder may at any time after such occurrence give an Inconvertibility Notice to the Company. If the Company shall have given or been required to give any Inconvertibility Notice, or if the Holder shall have given any Inconvertibility Notice, then within the applicable Redemption Election Period the Holder shall have the right by a Redemption Election given to the Company (which may be contained in the Inconvertibility Notice given by the Holder) to direct the Company to redeem the portion of this Note (which, if applicable, shall be all of this Note) as shall not, on the Business Day prior to the applicable Share Limitation Redemption Date be convertible into shares of Common Stock by reason of the limitations set forth in Section 2.4(a) on the applicable Share Limitation Redemption Date, at a price equal to the Share Limitation Redemption Price, payable on the date which is five Business Days after the Holder gives such Redemption Election. If the Holder directs the Company to redeem this Note or any portion hereof and, prior to the date the Company is required to redeem this Note or such portion hereof, the Company would have been able, within the limitations set forth in Section 2.4(a), to convert all of this Note (determined without regard to the limitation, if any, on beneficial ownership of shares of Common Stock by the Holder contained in the second sentence of Section 2.1) on any ten Trading Days within any period of 15 consecutive Trading Days commencing after the period of 20 consecutive Trading Days which gave rise to the applicable Inconvertibility Notice from the Company or the Holder, as the case may be, had the Holder exercised its right to convert this Note in full on each of such ten Trading Days within such 15 Trading Day period, then the Company shall not be required to redeem any of this Note by reason of such Inconvertibility Notice. (2) An Inconvertibility Notice or a Redemption Election given by the Holder shall be deemed for all purposes to be in proper form unless the Company notifies the Holder in writing within three Business Days after an Inconvertibility Notice or a Redemption Election has been given (which notice shall specify all defects in the Inconvertibility Notice or Redemption Election), and any Inconvertibility Notice or Redemption Election containing any such defect shall nonetheless be effective on the date given if the Holder promptly undertakes to correct all such defects. Whether or not the Holder has given such undertaking, no such claim of error shall limit or delay performance of the Company's obligation to redeem the full amount of the portion of this Note as to which a Redemption Election has been given and which is not in dispute. (c) Notwithstanding the giving of any Inconvertibility Notice by the Company to the Holder or the giving or the absence of any Inconvertibility Notice or Redemption Election by the Holder or any redemption of an inconvertible portion of this Note pursuant to Section 2.4(b), thereafter the provision of Section 2.4(b) shall continue to be applicable on any occasion unless the Stockholder Approval shall have been obtained or waived by the Nasdaq. (d) On each Share Limitation Redemption Date, the Company shall make payment in immediately available funds of the applicable Share Limitation Redemption Price to or upon the order of the Holder as specified by the Holder in writing to the Company at least one Business Day prior to such Share Limitation

LIMITATION ON SHARES ISSUABLE ON CONVERSION; MANDATORY REDEMPTION. (a) Notwithstanding any other provision herein, unless the Stockholder Approval shall have been obtained from the stockholders of the Company or waived by Nasdaq (or other appropriate stock exchange or market), so long as the Common Stock is listed on the Nasdaq, the Nasdaq SmallCap, the NYSE or the AMEX the Company shall not be required to issue upon conversion of this Note and the Interest Notes a number of shares of Common Stock in excess of the Maximum Share Amount. The Company shall maintain records which show the number of shares of Common Stock issued by the Company upon conversion from time to time of this Note and any Interest Notes, which records shall be controlling in the absence of manifest error. The Company shall maintain records which show the principal amount of Interest Notes issued by the Company pursuant to Section 1. 1 in payment of interest on this Note and issued pursuant to any Interest Note in payment of interest thereon, which records shall be controlling in the absence of manifest error. Each Interest Note shall be allocated a portion of the Maximum Share Amount allocated to this Note and the other Interest Notes outstanding at the time of issuance of such Interest Note, based on the outstanding principal amounts thereof at the time of such issuance, and the certificate for such Interest Note shall bear a notation as to the certificate number of this Note. Upon surrender of this Note for transfer or re-registration hereof (or, at the option of the Holder, for conversion pursuant to Section 2. 1 (a) of less than all of this Note), the Company shall make a notation on the new Note issued upon such transfer or re-registration or evidencing such unconverted portion of this Note, as the case may be, as to the remaining number of shares of Common Stock from the Maximum Share Amount remaining available for conversion of the Note evidenced by such new certificate. If this Note is surrendered for split-up into two or more Notes representing an aggregate principal amount equal to the principal amount of this Note at the time so surrendered (as reduced by any contemporaneous conversion of this Note), each Note issued on such split-up shall bear a notation of the portion of the Maximum Share Amount allocated thereto determined by pro rata allocation from among the remaining Maximum Share Amount at the time this Note is so surrendered. If this Note is converted in full, repaid, repurchased or redeemed, all of the Maximum Share Amount which remains unissued after such conversion, repayment, repurchase or redemption shall be re-allocated (1) to all Interest Notes and Other Notes held by the Holder at the close of business on the Conversion Date for such conversion, based on the outstanding principal amounts thereof, and (2) if the Holder does not hold any Interest Notes or Other Notes at the close of business on such Conversion Date, to the Other Notes, based on the principal amounts thereof outstanding at the close of business on such Conversion Date. If any Other Note is converted in full, repaid, repurchased or redeemed, all of the portion of the Maximum Share Amount (as defined in such Other Note) of such Other Note not re-allocated to Other Notes held by the holder of such Other Note and which remains unissued after such conversion, repayment, repurchase or redemption shall be re-allocated to this Note, the Interest Notes and the Other Notes outstanding at the close of business on the date of such conversion, repayment, repurchase or redemption of the Other Note so converted, repaid, repurchased or redeemed pro rata based on the principal amounts outstanding at the close of business on such date. (1) If on or after December 16, 1998 and on or prior to September 4, 2001 a Maximum Share Amount Inconvertibility occurs, then the Company shall promptly, but in no event later than five Business Days after each such occurrence, give an Inconvertibility Notice to the Holder (by telephone line facsimile transmission at such number as the Holder has specified in writing writing, to the Company for such purposes or, if the Holder shall not have specified any such number, by overnight courier at the Holder's address as the same appears on the records of the Company) and the Holder may at any time after such occurrence give an Inconvertibility Notice to the Company. If the Company shall have given or been required to give any Inconvertibility Notice, or if the Holder shall have given any Inconvertibility Inconvertability Notice, then within the applicable Redemption Election Period the Holder shall have the right by a Redemption Election given to the Company (which may be contained in the Inconvertibility Inconvertability Notice given by the Holder) to direct the Company to redeem the portion of this Note (which, if applicable, shall be all of this Note) as shall not, on the Business Day prior to the applicable Share Limitation Redemption Date be convertible into shares of Common Stock by reason of the limitations set forth in Section 2.4(a) on the applicable Share Limitation Redemption Date, at a price equal to the Share Limitation Redemption Price, payable on the date which is five Business Days after the Holder gives such Redemption Election. If the Holder directs the Company to redeem this Note or any portion hereof and, prior to the date the Company is required to redeem this Note or such portion hereof, the Company would have been able, within the limitations set forth in Section 2.4(a), to convert all of this Note (determined without regard to the limitation, if any, on beneficial ownership of shares of Common Stock by the Holder contained in the second sentence of Section 2.12. 1) on any ten Trading Days within any period of 15 consecutive Trading Days commencing after the period of 20 consecutive Trading Days which gave rise to the applicable Inconvertibility Notice from the Company or the Holder, as the case may be, had the Holder exercised its right to convert this Note in full on each of such ten Trading Days within such 15 Trading Day period, then the Company shall not be required to redeem any of this Note by reason of such Inconvertibility Notice. (2) An Inconvertibility Notice or a Redemption Election given by b the Holder shall be deemed for all purposes to be in proper form unless the Company notifies the tie Holder in writing within three Business Days after an Inconvertibility Notice or a Redemption Election has been given (which notice shall specify all defects in the Inconvertibility Notice or Redemption Election), and any Inconvertibility Notice or Redemption Election containing any such defect shall nonetheless be effective on the date given if the Holder promptly undertakes to correct all such defects. Whether or not the Holder has given such undertaking, no such claim of error shall limit or delay performance of the Company's obligation to redeem the full amount of the portion of this Note as to which a Redemption Election has been given and which is not in dispute. (c) Notwithstanding the giving of any Inconvertibility Notice by the Company to the Holder or the giving or the absence of any Inconvertibility Notice or Redemption Election by the Holder or any redemption of an inconvertible portion of this Note pursuant to Section 2.4(b), thereafter the provision of Section 2.4(b) shall continue to be applicable on any occasion unless the Stockholder Approval shall have been obtained or waived by the Nasdaq. (d) On each Share Limitation Redemption Date, the Company shall make payment in immediately available funds of the applicable Share Limitation Redemption Price to or upon the order of the Holder as specified by the Holder in writing to the Company at least one Business Day prior to such Share LimitationLimitation Redemption Date. If the Company is required to redeem this Note or any portion hereof pursuant to this Section 2.4, the Company shall make payment to the Holder of an amount equal to the Share Limitation Redemption Price. Upon redemption of less than all of this Note, promptly, but in no event later than three Business Days after surrender of this Note to the Company, the Company shall issue a replacement Note of like tenor having a principal amount equal to the principal amount of this Note remaining after such redemption.

LIMITATION ON SHARES ISSUABLE ON CONVERSION; MANDATORY REDEMPTION. (1a) Notwithstanding any other provision herein, the Company shall not be required to all Interest Notes and Other Notes held issue upon conversion of this Note more than [INSERT PRO RATA PORTION OF THE NUMBER OF SHARES REGISTERED AT THE TIME THE NOTE IS ISSUED] shares, or such greater number of shares as shall be included in the Registration Statement for resale by the Holder and which the Company shall specify by notice to the Holder from time to time (in each such case such amount to be subject to equitable adjustment from time to time on terms reasonably acceptable to the Majority Holders for stock splits, stock dividends, combinations, capital reorganizations and similar events relating to the Common Stock occurring after the date of the Note Purchase Agreement) of Common Stock (the "Maximum Share Amount"), upon conversion of this Note unless the Company shall have defaulted in its obligation to redeem any portion of this Note in accordance with this Section 2.5 or its obligation to pay the Repurchase Price in full as and when due (such events referred to hereto as "Maximum Share Amount Exception Events"). In the case of any such default, the Holder shall be entitled to convert this Note without regard to the Maximum Share Amount upon the terms and subject to the limitations in Section 2.5(e). If this Note is surrendered for split-up into two or more Notes representing an aggregate principal amount equal to the principal amount of this Note at the close time so surrendered (as reduced by any contemporaneous conversion of business on the Conversion Date for such conversionthis Note), based on the outstanding principal amounts thereof, and (2) if the Holder does not hold any Interest Notes or Other Notes at the close of business each Note issued on such Conversion Date, to the Other Notes, based on the principal amounts thereof outstanding at the close of business on such Conversion Date. If any Other Note is converted in full, repaid, repurchased or redeemed, all split-up shall bear a notation of the portion of the Maximum Share Amount (as defined in such Other Note) allocated thereto determined by pro rata allocation from among the remaining portion of such Other Note not re-allocated to Other Notes held by the holder of such Other Note and which remains unissued after such conversion, repayment, repurchase or redemption shall be re-Maximum Share Amount allocated to this Note, the Interest Notes and the Other Notes outstanding Note at the close of business on the date of such conversion, repayment, repurchase or redemption of the Other Note time so converted, repaid, repurchased or redeemed pro rata based on the principal amounts outstanding at the close of business on such datesurrendered. (1b) If on or after December 16, 1998 and on or prior to September 4, 2001 a Maximum Share Amount Inconvertibility occurs, then the The Company shall promptly, but in no event later than five three Business Days after each such the occurrence, give an Inconvertibility Notice notice to the Holder in the form attached hereto as EXHIBIT B (by telephone line facsimile transmission at such number as the Holder has specified in writing to the Company for such purposes or, if the Holder shall not have specified any such number, by overnight courier or first class mail, postage prepaid, at the Holder's address as the same appears on the records of the Company) and the Holder may at any time after such the occurrence give an Inconvertibility Notice to the Company. If the Company shall have given or been required to give any Inconvertibility Notice, or if the Holder shall have given any Inconvertibility Notice, then within the applicable Redemption Election Period the Holder shall have the right by a Redemption Election given notice to the Company (which may be contained in the Inconvertibility Notice given by form attached hereto as EXHIBIT C, in either case, if on any five trading days ending on or after the Holder) to direct 76th day after the Company to redeem date of the portion original issuance of this Note (which, if applicable, shall be all of this Note) as shall not, on the Business Day prior to the applicable Share Limitation Redemption Date be convertible into shares of Common Stock by reason of the limitations set forth in Section 2.4(a) on the applicable Share Limitation Redemption Date, at a price equal to the Share Limitation Redemption Price, payable on the date which is five Business Days after the Holder gives such Redemption Election. If the Holder directs the Company to redeem this Note or any portion hereof and, prior to the date the Company is required to redeem this Note or such portion hereof, the Company would have been able, within the limitations set forth in Section 2.4(a), to convert all of this Note (determined without regard to the limitation, if any, on beneficial ownership of shares of Common Stock by the Holder contained in the second sentence of Section 2.1) on any ten Trading Days within any period of 15 consecutive Trading Days commencing after the period of 20 consecutive Trading Days which gave rise to the applicable Inconvertibility Notice from the Company or the Holder, as the case may be, had the Holder exercised its right to convert this Note in full on each of such ten Trading Days within such 15 Trading Day period, then the Company shall not be required to redeem any of this Note by reason of such Inconvertibility Notice. (2) An Inconvertibility Notice or a Redemption Election given by the Holder shall be deemed for all purposes to be in proper form unless the Company notifies the Holder in writing within three Business Days after an Inconvertibility Notice or a Redemption Election has been given (which notice shall specify all defects in the Inconvertibility Notice or Redemption Election), and any Inconvertibility Notice or Redemption Election containing any such defect shall nonetheless be effective on the date given if the Holder promptly undertakes to correct all such defects. Whether or not the Holder has given such undertaking, no such claim of error shall limit or delay performance of the Company's obligation to redeem the full amount of the portion of this Note as to which a Redemption Election has been given and which is not in dispute. (c) Notwithstanding the giving of any Inconvertibility Notice by the Company to the Holder or the giving or the absence of any Inconvertibility Notice or Redemption Election by the Holder or any redemption of an inconvertible portion of this Note pursuant to Section 2.4(b), thereafter the provision of Section 2.4(b) shall continue to be applicable on any occasion unless the Stockholder Approval shall have been obtained or waived by the Nasdaq. (d) On each Share Limitation Redemption Date, the Company shall make payment in immediately available funds of the applicable Share Limitation Redemption Price to or upon the order of the Holder as specified by the Holder in writing to the Company at least one Business Day prior to such Share Limitationthe

LIMITATION ON SHARES ISSUABLE ON CONVERSION; MANDATORY REDEMPTION. (1a) Notwithstanding any other provision herein, unless the Stockholder Approval shall have been obtained from the stockholders of the Company or waived by Nasdaq, the Company shall not be required to all Interest Notes and Other Notes held issue upon conversion of this Note a number of shares of Common Stock in excess of the Maximum Share Amount less the number of shares of Common Stock issued pursuant to Section 1.1 from time to time in payment of interest on this Note. The Company shall maintain records which show the number of shares of Common Stock issued by the Holder Company upon conversion from time to time of this Note and issued by the Company pursuant to Section 1.1 in payment of interest on this Note, which records shall be controlling in the absence of manifest error. Upon surrender of this Note for transfer or re-registration hereof (or, at the close option of business the Holder, for conversion pursuant to Section 2.1 of less than all of this Note), the Company shall make a notation on the Conversion Date new Note issued upon such transfer or re-registration or evidencing such unconverted portion of this Note, as the case may be, as to the remaining number of shares of Common Stock from the Maximum Share Amount remaining available for conversion of the Note evidenced by such conversionnew certificate (including, based without limitation, by taking into account the number of shares of Common Stock issued by the Company pursuant to Section 1.1 in payment of interest on this Note and not previously reflected on the outstanding Note so surrendered, as shown on the records maintained by the Company). If this Note is surrendered for split-up into two or more Notes representing an aggregate principal amounts thereof, and (2) if amount equal to the Holder does not hold any Interest Notes or Other Notes principal amount of this Note at the close time so surrendered (as reduced by any contemporaneous conversion of business this Note), each Note issued on such Conversion Date, split-up shall bear a notation of the portion of the Maximum Share Amount allocated thereto determined by pro rata allocation from among the remaining portion of the Maximum Share Amount allocated to the Other Notes, based on the principal amounts thereof outstanding this Note at the close of business on such Conversion Datetime so surrendered. If any Other Note is converted in full, repaid, repurchased or redeemed, all of the portion of the Maximum Share Amount (as defined in such Other Note) of allocated to such Other Note not re-allocated to Other Notes held by the holder of such Other Note and which remains unissued after such conversion, repayment, repurchase or redemption shall be re-allocated to this Note, the Interest Notes Note and the Other Notes outstanding at the close of business on the date of such conversion, repayment, repurchase or redemption of the Other Note so converted, repaid, repurchased or redeemed pro rata based on the principal amounts outstanding at the close of business on such date. (1) If on or after December 16, 1998 any Trading Day the Company shall have then issued upon conversion of and in payment of interest on or prior this Note a number of shares of Common Stock at least equal to September 4, 2001 a the Maximum Share Amount Inconvertibility occurs(a "Maximum Share Issuance"), then the Company shall promptly, but in no event later than five three Business Days after each such the occurrence, give an Inconvertibility Notice notice to the Holder in the form attached hereto as EXHIBIT B (by telephone line facsimile transmission at such number as the Holder has specified in writing to the Company for such purposes or, if the Holder shall not have specified any such number, by overnight courier or first class mail, postage prepaid, at the Holder's address as the same appears on the records of the Company) and the Holder may at any time after such occurrence give an Inconvertibility Notice notice to the CompanyCompany in the form attached hereto as EXHIBIT C (any such notice, whether given by the Company or the Holder, a "Maximum Share Issuance Notice"). If (x) on any five Trading Days ending on or after the fifth Trading Day after the Issuance Date (the "Inconvertibility Days") within any period of ten consecutive Trading Days the Company would not have been required to convert this Note in full as a consequence of the limitations set forth in Section 2.4(a) had this Note been converted in full into Common Stock on each such day, determined at the Conversion Price applicable on each such Trading Day and without regard to the limitation, if any, on the Holder contained in the second sentence of Section 2.1 (a "Maximum Share Amount Inconvertibility") or (y) on any five Inconvertibility Days within any period of ten consecutive Trading Days, notwithstanding Rule 416 under the Act or the provisions of Section 8(b) of the Note Purchase Agreement, the Registration Statement is not deemed to cover such indeterminate number of shares of Common Stock as shall be issuable upon conversion of this Note based on changes from time to time in the Computed Price, the number of shares of Common Stock issuable upon conversion of this Note in full had this Note been converted in full into Common Stock on each such Trading Day and without regard to the limitation if any on the Holder contained in the second sentence of Section 2.1, would exceed the number of shares of Common Stock covered by the Registration Statement and available for sale by the Holder pursuant to the Registration Statement (a "Registration Restriction Inconvertibility") the Company shall promptly, but in no event later than three Business Days after the occurrence, give notice to the Holder in the form attached hereto as EXHIBIT D (by telephone line facsimile transmission at such number as the Holder has specified in writing to the Company for such purposes or, if the Holder shall not have specified any such number, by overnight courier or first class mail, postage prepaid, at the Holder's address as the same appears on the records of the Company) and the Holder may at any time after such occurrence give notice to the Company in the form attached hereto as EXHIBIT E (any such notice, whether given by the Company or the Holder, an "Inconvertibility Notice"). (2) Within five Business Days after the occurrence of a Maximum Share Issuance, the Company shall redeem the outstanding portion of this Note at a price equal to the Redemption Price. If by reason of a Maximum Share Amount Inconvertibility or a Registration Restriction Inconvertibility the Company shall have given or been required to give any Inconvertibility Notice, or if the Holder shall have given any Inconvertibility Notice, then within five Business Days after the applicable Redemption Election Period date such Inconvertibility Notice is given, the Holder shall have the right by a Redemption Election given notice to the Company (which may be contained in the form attached hereto as EXHIBIT F, or by including such notice in the Inconvertibility Notice given by the Holder in the form attached hereto as EXHIBIT E (whether given in the form of Exhibit F or included in any Inconvertibility Notice given by a Holder, a "Holder Redemption Notice") to direct the Company to redeem (A) up to the specified portion of this Note (which, if applicable, shall be all of this Note) as shall not, on the Business Day prior to immediately preceding the applicable Share Limitation Redemption Date date of such redemption, be convertible into shares of Common Stock by reason of the limitations set forth in Section 2.4(a) (determined without regard to the limitation, if any, on the applicable Share Limitation Redemption DateHolder contained in the second sentence of Section 2.1) or (B) up to the specified portion of this Note (which, if applicable, shall be all of this Note) as shall not, on the Business Day immediately preceding the date of such redemption, be convertible into shares of Common Stock which are covered by the Registration Statement and available for sale by the Holder pursuant to the Registration Statement, in either the case of the preceding clause (A) or clause (B) at a price equal to the Share Limitation Redemption PricePrice (such portion, payable on the date which is "Inconvertible Portion") and within five Business Days (the "Mandatory Redemption Period") after a Holder Redemption Notice is given the Company shall redeem such portion of this Note; provided, however, that (1) no such redemption shall be made if prior to the expiration of the applicable Mandatory Redemption Period the Company and the Holder shall, by mutual agreement in the form attached hereto as EXHIBIT G (a "Mandatory Redemption Waiver"), waive the Company's obligation to make such redemption and (2) during the period ending six months after the Holder gives Execution Date, the Company shall only be required to redeem that portion of the Note which is requested to be converted into shares of Common Stock pursuant to a pending Conversion Notice and which cannot be so converted by reason of the limitations set forth in Section 2.4(a) if and so long as the following conditions are met from the date such Redemption ElectionInconvertibility Notice is given or is required to have been given until the end of such six-month period: (I) the Registration Statement is effective and available for use by the selling stockholders named therein and (II) the Company maintains Net Cash and Cash Equivalent Balances equal to at least 200% of the aggregate principal amounts of this Note and the Other Notes outstanding from time to time and which in no event shall be less than $10,000,000. If the Holder directs the Company shall have become obligated to redeem this Note all or any portion hereof of this Note pursuant to this Section 2.4 by reason of a Maximum Share Amount Inconvertibility and, prior to the date expiration of the Company is required to redeem this Note or such portion hereofMandatory Redemption Period with respect thereto, the Company would have been able, within the limitations set forth in Section 2.4(a), to satisfy its obligations to the Holder to convert all of this Note (determined without regard to the limitation, if any, on beneficial ownership of shares of Common Stock by the Holder contained in the second sentence of Section 2.1) on any ten two Trading Days within any period of 15 five consecutive Trading Days commencing after the period of 20 ten consecutive Trading Days which gave rise to the applicable Inconvertibility Notice from the Company or the Holder, as the case may be, had the Holder exercised its right to convert this Note been surrendered for conversion in full into Common Stock on each of such ten two Trading Days within such 15 Trading five-Trading-Day period, then the Company shall not be required to redeem any of this Note by reason of such Inconvertibility Notice. (23) The Company shall notify the Holder of any claim by the Company of manifest error in an Inconvertibility Notice or Holder Redemption Notice given by a Holder within three Business Days after the Holder gives such Inconvertibility Notice or Holder Redemption Notice and no such claim or error shall limit or delay performance of the Company's obligation to redeem any Inconvertible Portion which is not in dispute. An Inconvertibility Notice or a Holder Redemption Election Notice given by the a Holder shall be deemed for all purposes to be in proper form unless the Company notifies the Holder in writing within three Business Days after an Inconvertibility Notice or a Holder Redemption Election Notice has been given (which notice shall specify all defects in the Inconvertibility Notice or Holder Redemption Election), Notice) and any Inconvertibility Notice or Holder Redemption Election Notice containing any such defect shall nonetheless be effective on the date given if the Holder promptly undertakes in writing to correct all such defects. Whether or not the Holder has given such undertaking, no such claim of error shall limit or delay performance of the Company's obligation to redeem the full amount of the portion of this Note as to which a Redemption Election has been given and which is not in dispute. (c) Notwithstanding the giving of any Inconvertibility Notice by the Company to the Holder or the giving or the absence of any Inconvertibility Notice or Redemption Election by the Holder or any redemption of an inconvertible any portion of this Note pursuant to Section 2.4(b)Note, thereafter the provision provisions of Section 2.4(b) shall continue to be applicable on any occasion unless unless, in the case of a Maximum Share Amount Inconvertibility, the Stockholder Approval shall have been obtained or waived by the Nasdaq. (d) On each Share Limitation Redemption Date, the Company shall make payment in immediately available funds of the applicable Share Limitation Redemption Price of the portion of this Note to be redeemed on such Redemption Date to the Holder or upon the order of the Holder as specified by the Holder in writing to the Company at least one Business Day prior to such Redemption Date. Upon redemption of less than all of this Note, promptly, but in no event later than three Business Days after surrender of this Note to the Company, the Company shall issue a replacement Note of like tenor for the portion of this Note which has not been redeemed. (e) If the Company shall have failed to pay in full the Redemption Price (other than by reason of a Maximum Share LimitationAmount Inconvertibility or a Maximum Share Issuance) or the Repurchase Price, without in any way relieving the Company of its obligation to pay such amount in accordance with Section 2.4(g), for any portion (which, if applicable, may be all) of this Note when the same is due and payable, the Holder shall have the right to convert such portion of this Note into Common Stock in accordance with Section 2.1 (subject to the numerical limit contained in the second sentence of Section 2.1); provided, however, that the shares of Common Stock received by the Holder upon any such conversion may be subject to restrictions on resale by the Holder arising under applicable securities laws to the extent not registered for resale by the Holder pursuant to the Registration Statement. (f) If the Company shall have failed to pay in full the Redemption Price for any portion (which, if applicable, may be all) of this Note when the same is due and payable by reason of a Maximum Share Amount Inconvertibility or a Maximum Share Issuance and the Stockholder Approval shall not have been obtained, without in any way relieving the Company of its obligation to pay the applicable Redemption Price, upon the written request of the Majority Holders, the Company shall use its best efforts to obtain a waiver from the NASD of the requirement for Stockholder Approval. If such waiver, in form reasonably satisfactory to the Majority Holders, is not obtained within 15 days after the Company's receipt of such request from the Majority Holders, the Company promptly shall call a special meeting of its stockholders, to be held not later than 60 days after the expiration of the foregoing 15-day period, to seek Stockholder Approval for issuance of all shares of Common Stock issuable upon conversion of this Note and the Other Notes in accordance with Section 2.1. (g) If the Holder converts all or any portion of this Note pursuant to Section 2.4(e), the amount of the Redemption Price or Repurchase Price, as the case may be, due to the Holder with respect to the principal amount of this Note so converted shall be reduced by the principal amount of this Note so converted.

LIMITATION ON SHARES ISSUABLE ON CONVERSION; MANDATORY REDEMPTION. (1a) Notwithstanding any other provision herein, unless the Stockholder Approval shall have been obtained from the stockholders of the Company or waived by Nasdaq, the Company shall not be required to all Interest Notes and Other Notes held issue upon conversion of this Note a number of shares of Common Stock in excess of the Maximum Share Amount less the number of shares of Common Stock issued pursuant to Section 1.1 from time to time in payment of interest on this Note. The Company shall maintain records which show the number of shares of Common Stock issued by the Holder Company upon conversion from time to time of this Note and issued by the Company pursuant to Section 1.1 in payment of interest on this Note, which records shall be controlling in the absence of manifest error. Upon surrender of this Note for transfer or re-registration hereof (or, at the close option of business the Holder, for conversion pursuant to Section 2.1 of less than all of this Note), the Company shall make a notation on the Conversion Date new Note issued upon such transfer or re-registration or evidencing such unconverted portion of this Note, as the case may be, as to the remaining number of shares of Common Stock from the Maximum Share Amount remaining available for conversion of the Note evidenced by such conversionnew certificate (including, based without limitation, by taking into account the number of shares of Common Stock issued by the Company pursuant to Section 1.1 in payment of interest on this Note and not previously reflected on the outstanding Note so surrendered, as shown on the records maintained by the Company). If this Note is surrendered for split-up into two or more Notes representing an aggregate principal amounts thereof, and (2) if amount equal to the Holder does not hold any Interest Notes or Other Notes principal amount of this Note at the close time so surrendered (as reduced by any contemporaneous conversion of business this Note), each Note issued on such Conversion Date, split-up shall bear a notation of the portion of the Maximum Share Amount allocated thereto determined by pro rata allocation from among the remaining portion of the Maximum Share Amount allocated to the Other Notes, based on the principal amounts thereof outstanding this Note at the close of business on such Conversion Datetime so surrendered. If any Other Note is converted in full, repaid, repurchased or redeemed, all of the portion of the Maximum Share Amount (as defined in such Other Note) of allocated to such Other Note not re-allocated to Other Notes held by the holder of such Other Note and which remains unissued after such conversion, repayment, repurchase or redemption shall be re-allocated to this Note, the Interest Notes Note and the Other Notes outstanding at the close of business on the date of such conversion, repayment, repurchase or redemption of the Other Note so converted, repaid, repurchased or redeemed pro rata based on the principal amounts outstanding at the close of business on such date. (1) If on or after December 16, 1998 and on or prior to September 4, 2001 a Maximum Share Amount Inconvertibility or a Registration Restriction Inconvertibility occurs, then the Company shall promptly, but in no event later than five three Business Days after each such occurrence, give an Inconvertibility Notice to the Holder (by telephone line facsimile transmission at such number as the Holder has specified in writing to the Company for such purposes or, if the Holder shall not have specified any such number, by overnight courier or first class mail, postage prepaid, at the Holder's address as the same appears on the records of the Company) and the Holder may at any time after such occurrence give an Inconvertibility Notice to the Company. If the Company shall have given or been required to give any Inconvertibility Notice, or if the Holder shall have given any Inconvertibility Notice, then within the applicable Redemption Election Period the Holder shall have the right by a Redemption Election given to the Company (which may be contained in the Inconvertibility Notice given by the Holder) to direct the Company to redeem the portion of this Note (which, if applicable, shall be all of this Note) as shall not, on the Business Day prior to the applicable Share Limitation Redemption Date Date, (x) be convertible into shares of Common Stock by reason of a Maximum Share Amount Inconvertibility or (y) be available for sale by the limitations set forth Holder pursuant to the Registration Statement by reason of a Registration Restriction Inconvertibility, in Section 2.4(a) each such case, on the applicable Share Limitation Redemption Date, at a price equal to the Share Limitation Redemption Price; provided, payable on however, that (1) no such redemption shall be made with respect to a Registration Restriction Inconvertibility if, prior to the expiration of the applicable Redemption Election Period, the Company and the Holder shall, by a Mandatory Redemption Waiver, waive the Company's obligation to make such redemption and (2) no such redemption shall be made with respect to a Registration Restriction Inconvertibility if (i) the Registration Statement is effective and available for use by the Holder for resale of the shares of Common Stock which are covered by the Registration Statement, (ii) the Company files with an additional Registration Statement as and when required by Section 8(b)(1) and (iii) the Company maintains Net Cash, Cash Equivalent and Short-Term Investment Balances of at least $15,000,000, then the Company shall not be required to redeem any portion of this Note prior to the date which is five Business Days 30 days after the Holder gives such Redemption ElectionRegistration Restriction Inconvertibility occurs. If the Holder directs gives a Redemption Election to the Company to redeem this Note or any portion hereof by reason of a Maximum Share Amount Inconvertibility and, prior to the date the Company is required to redeem this Note or such any portion hereof, the Company would have been able, within the limitations set forth in Section 2.4(a), to convert all of this Note (determined without regard to the limitation, if any, on beneficial ownership of shares of Common Stock by the Holder contained in the second sentence of Section 2.12.1 and regardless of whether this Note is, by its terms, convertible at such time) on any ten two Trading Days within any period of 15 three consecutive Trading Days commencing after the period of 20 ten consecutive Trading Days which gave rise to the applicable Inconvertibility Notice from the Company or the Holder, as the case may be, had the Holder exercised its right to convert given a Conversion Notice for conversion in full of this Note in full on each of such ten two Trading Days within such 15 three-Trading Day period, then the Company shall not be required to redeem any of this Note by reason of such Inconvertibility NoticeRedemption Election. (2) An Inconvertibility Notice or a Redemption Election given by the Holder shall be deemed for all purposes to be in proper form unless the Company notifies the Holder in writing within three Business Days after an Inconvertibility Notice or a Redemption Election has been given (which notice shall specify all defects in the Inconvertibility Notice or Redemption Election), and any Inconvertibility Notice or Redemption Election containing any such defect shall nonetheless be effective on the date given if the Holder promptly undertakes in writing to correct all such defects. Whether or not In the Holder has given absence of any such undertakingundertaking from the Holder, no such claim of error shall limit or delay performance of the Company's obligation to redeem the full amount of the portion of this Note Inconvertible Portion as to which a Redemption Election has been given and which is not in dispute. (c) Notwithstanding the giving of any Inconvertibility Notice by the Company to the Holder or the giving or the absence of any Inconvertibility Notice or Redemption Election by the Holder Holders or any redemption of an inconvertible portion of this Note Inconvertible Portion pursuant to Section 2.4(b), thereafter the provision of Section 2.4(b) shall continue to be applicable on any occasion unless unless, in the case of a Maximum Share Amount Inconvertibility, the Stockholder Approval shall have been obtained or waived by the Nasdaq. (d) On each Share Limitation Redemption Date, the Company shall make payment in immediately available funds of the applicable Share Limitation Redemption Price to or upon the order of the Holder as specified by the Holder in writing to the Company at least one Business Day prior to such Redemption Date. If the Company is required to redeem any Inconvertible Portion pursuant to this Section 2.4, the Company shall make payment to the Holder of an amount equal to the Redemption Price. Upon redemption of less than all of this Note, promptly, but in no event later than three Business Days after surrender of this Note to the Company, the Company shall issue a replacement Note of like tenor having a principal amount equal to the principal amount of this Note remaining after such redemption. (e) If the Company shall have failed to pay in full the Redemption Price (other than by reason of a Maximum Share LimitationAmount Inconvertibility) or the Registration Redemption Price when the same is due and payable, without in any way relieving the Company of its obligation to pay such amount, the Holder shall have the right to convert into Common Stock the portion of this Note in respect of which such payment was not made into Common Stock in accordance with Section 2.1 (subject to the numerical limit contained in the second sentence of Section 2.1); provided, however, that the shares of Common Stock received by the Holder upon any such conversion in certain circumstances may be subject to restrictions on resale by the Holder arising under applicable securities laws to the extent not registered for resale by the Holder pursuant to the Registration Statement. (f) If the Company shall have failed to pay in full the Redemption Price for any portion (which, if applicable, may be all) of any Inconvertible Portion when the same is due and payable by reason of a Maximum Share Amount Inconvertibility and the Stockholder Approval shall not have been obtained, without in any way relieving the Company of its obligation to pay such amount in accordance with Sections 2.4(b) and 2.4(d), upon the written request of the Majority Holders, the Company shall use its commercially reasonable best efforts to obtain a waiver from the NASD of the requirement for Stockholder Approval for issuance of all shares of Common Stock issuable upon conversion of this Note and the Other Notes. If such a waiver, in form reasonably satisfactory to the Majority Holders, is not obtained within 15 days after the Company's receipt of such request from the Majority Holders, the Company promptly shall call a special meeting of its stockholders, to be held not later than 60 days after the expiration of the foregoing 15-day period, to seek the Stockholder Approval for issuance of all shares of Common Stock issuable upon conversion of this Note and the Other Notes in accordance with Section 2.1. (g) If the Holder converts all or any portion of this Note pursuant to Section 2.4(e), the amount of the Redemption Price or the Registration Redemption Price, as the case may be, due to the Holder with respect to the portion of this Note so converted shall be reduced by the principal amount of this Note so converted and the Company shall remain liable for payment of the premium, if any, included in such Redemption Price or Registration Repurchase Price, as the case may be.

LIMITATION ON SHARES ISSUABLE ON CONVERSION; MANDATORY REDEMPTION. (a) Notwithstanding any other provision herein, unless the Stockholder Approval shall have been obtained from the stockholders of the Company or waived by Nasdaq (or other appropriate stock exchange or market), so long as the Common Stock is listed on the Nasdaq, the Nasdaq SmallCap, the NYSE or the AMEX the Company shall not be required to issue upon conversion of this Note and the Interest Notes a number of shares of Common Stock in excess of the Maximum Share Amount. The Company shall maintain records which show the number of shares of Common Stock issued by the Company upon conversion from time to time of this Note and any Interest Notes, which records shall be controlling in the absence of manifest error. The Company shall maintain records which show the principal amount of Interest Notes issued by the Company pursuant to Section 1.1 in payment of interest on this Note and issued pursuant to any Interest Note in payment of interest thereon, which records shall be controlling in the absence of manifest error. Each Interest Note shall be allocated a portion of the Maximum Share Amount allocated to this Note and the other Interest Notes outstanding at the time of issuance of such Interest Note, based on the outstanding principal amounts thereof at the time of such issuance, and the certificate for such Interest Note shall bear a notation as to the certificate number of this Note. Upon surrender of this Note for transfer or re-registration hereof (or, at the option of the Holder, for conversion pursuant to Section 2.1(a) of less than all of this Note), the Company shall make a notation on the new Note issued upon such transfer or re-registration or evidencing such unconverted portion of this Note, as the case may be, as to the remaining number of shares of Common Stock from the Maximum Share Amount remaining available for conversion of the Note evidenced by such new certificate. If this Note is surrendered for split-up into two or more Notes representing an aggregate principal amount equal to the principal amount of this Note at the time so surrendered (as reduced by any contemporaneous conversion of this Note), each Note issued on such split-up shall bear a notation of the portion of the Maximum Share Amount allocated thereto determined by pro rata allocation from among the remaining Maximum Share Amount at the time this Note is so surrendered. If this Note is converted in full, repaid, repurchased or redeemed, all of the Maximum Share Amount which remains unissued after such conversion, repayment, repurchase or redemption shall be re-allocated (1) to all Interest Notes and Other Notes held by the Holder at the close of business on the Conversion Date for such conversion, based on the outstanding principal amounts thereof, and (2) if the Holder does not hold any Interest Notes or Other Notes at the close of business on such Conversion Date, to the Other Notes, based on the principal amounts thereof outstanding at the close of business on such Conversion Date. If any Other Note is converted in full, repaid, repurchased or redeemed, all of the portion of the Maximum Share Amount (as defined in such Other Note) of such Other Note not re-allocated to Other Notes held by the holder of such Other Note and which remains unissued after such conversion, repayment, repurchase or redemption shall be re-allocated to this Note, the Interest Notes and the Other Notes outstanding at the close of business on the date of such conversion, repayment, repurchase or redemption of the Other Note so converted, repaid, repurchased or redeemed pro rata based on the principal amounts outstanding at the close of business on such date. (1) If on or after December 16, 1998 and on or prior to September 4, 2001 a Maximum Share Amount Inconvertibility occurs, then the Company shall promptly, but in no event later than five Business Days after each such occurrence, give an Inconvertibility Notice to the Holder (by telephone line facsimile transmission at such number as the Holder has specified in writing to the Company for such purposes or, if the Holder shall not have specified any such number, by overnight courier at the Holder's address as the same appears on the records of the Company) and the Holder may at any time after such occurrence give an Inconvertibility Notice to the Company. If the Company shall have given or been required to give any Inconvertibility Notice, or if the Holder shall have given any Inconvertibility Notice, then within the applicable Redemption Election Period the Holder shall have the right by a Redemption Election given to the Company (which may be contained in the Inconvertibility Notice given by the Holder) to direct the Company to redeem the portion of this Note (which, if applicable, shall be all of this Note) as shall not, on the Business Day prior to the applicable Share Limitation Redemption Date be convertible into shares of Common Stock by reason of the limitations set forth in Section 2.4(a) on the applicable Share Limitation Redemption Date, at a price equal to the Share Limitation Redemption Price, payable on the date which is five Business Days after the Holder gives such Redemption Election. If the Holder directs the Company to redeem this Note or any portion hereof and, prior to the date the Company is required to redeem this Note or such portion hereof, the Company would have been able, within the limitations set forth in Section 2.4(a), to convert all of this Note (determined without regard to the limitation, if any, on beneficial ownership of shares of Common Stock by the Holder contained in the second sentence of Section 2.1) on any ten Trading Days within any period of 15 consecutive Trading Days commencing after the period of 20 consecutive Trading Days which gave rise to the applicable Inconvertibility Notice from the Company or the Holder, as the case may be, had the Holder exercised its right to convert this Note in full on each of such ten Trading Days within such 15 Trading Day period, then the Company shall not be required to redeem any of this Note by reason of such Inconvertibility Notice. (2) An Inconvertibility Notice or a Redemption Election given by the Holder shall be deemed for all purposes to be in proper form unless the Company notifies the Holder in writing within three Business Days after an Inconvertibility Notice or a Redemption Election has been given (which notice shall specify all defects in the Inconvertibility Notice or Redemption Election), and any Inconvertibility Notice or Redemption Election containing any such defect shall nonetheless be effective on the date given if the Holder promptly undertakes to correct all such defects. Whether or not the Holder has given such undertaking, no such claim of error shall limit or delay performance of the Company's obligation to redeem the full amount of the portion of this Note as to which a Redemption Election has been given and which is not in dispute. (c) Notwithstanding the giving of any Inconvertibility Notice by the Company to the Holder or the giving or the absence of any Inconvertibility Notice or Redemption Election by the Holder or any redemption of an inconvertible portion of this Note pursuant to Section 2.4(b), thereafter the provision of Section 2.4(b) shall continue to be applicable on any occasion unless the Stockholder Approval shall have been obtained or waived by the Nasdaq. (d) On each Share Limitation Redemption Date, the Company shall make payment in immediately available funds of the applicable Share Limitation Redemption Price to or upon the order of the Holder as specified by the Holder in writing to the Company at least one Business Day prior to such Share LimitationLimitation Redemption Date. If the Company is required to redeem this Note or any portion hereof pursuant to this Section 2.4, the Company shall make payment to the Holder of an amount equal to the Share Limitation Redemption Price. Upon redemption of less than all of this Note, promptly, but in no event later than three Business Days after surrender of this Note to the Company, the Company shall issue a replacement Note of like tenor having a principal amount equal to the principal amount of this Note remaining after such redemption.