Common use of Conversion Limitation Clause in Contracts

Conversion Limitation. Notwithstanding anything contained herein to the contrary, the Holder shall not be entitled to convert pursuant to the terms of the Note an amount that would (a) be convertible into that number of shares of Common Stock which, when added to the number of shares of Common Stock otherwise beneficially owned by such Holder including those issuable upon exercise of warrants held by such Holder would exceed 4.99% of the outstanding shares of Common Stock of the Borrower at the time of conversion or (b) exceed thirty-five percent (35%) of the aggregate dollar trading volume of the Common Stock for the twenty-two (22) day trading period immediately preceding delivery of a Notice of Conversion to the Borrower. For the purposes of the immediately preceding sentence, beneficial ownership shall be determined in accordance with Section 13(d) of the Exchange Act and Regulation 13d-3 thereunder. The conversion limitation described in this Section 3.2 shall automatically become null and void without any notice to Borrower upon the occurrence and during the continuance beyond any applicable grace period of an Event of Default which has had, or could reasonably be expected to have a Material Adverse Effect, or upon 75 days prior notice to the Borrower, except that at no time shall the beneficial ownership exceed 19.99% of the Common Stock. Notwithstanding anything contained herein to the contrary, the number of shares of Common Stock issuable by the Borrower and acquirable by the Holder at a price below $1.75 per share pursuant to the terms of this Note, the Purchase Agreement or any Related Agreement, shall not exceed an aggregate of 4,457,995 shares of the Borrower’s Common Stock (subject to appropriate adjustment for stock splits, stock dividends, or other similar recapitalizations affecting the Common Stock) (the “Maximum Common Stock Issuance”), unless the issuance of shares hereunder in excess of the Maximum Common Stock Issuance shall first be approved by the Borrower’s shareholders, if required by applicable law or regulation. If at any point in time and from time to time the number of shares of Common Stock issued pursuant to the terms of this Note or the Warrant, would exceed the Maximum Common Stock Issuance but for this Section 3.2, the Borrower shall promptly call a shareholders meeting to solicit shareholder approval for the issuance of the shares of Common Stock hereunder in excess of the Maximum Common Stock Issuance.

Conversion Limitation. Notwithstanding anything contained herein to the contrary, the Holder shall not be entitled to convert pursuant to the terms of the this Note an amount that would (a) be convertible into that number of shares of Common Stock which, when added to Conversion Shares which would exceed the difference between the number of shares of Common Stock otherwise beneficially owned by such Holder including those or issuable upon exercise of warrants held by such Holder would exceed and 4.99% of the outstanding shares of Common Stock of the Borrower at the time of conversion or (b) exceed thirty-five percent (35%) of the aggregate dollar trading volume of the Common Stock for the twenty-two (22) day trading period immediately preceding delivery of a Notice of Conversion to the Borrower. For the purposes of the immediately preceding sentence, beneficial ownership shall be determined in accordance with Section 13(d) of the Exchange Act and Regulation 13d-3 thereunder. The conversion Holder may void the Conversion Share limitation described in this Section 3.2 shall automatically become null and void without any notice to Borrower upon the occurrence and during the continuance beyond any applicable grace period of an Event of Default which has had, or could reasonably be expected to have a Material Adverse Effect, or upon 75 days prior notice to the Borrower, except that at no time shall the beneficial ownership exceed 19.99% Borrower or without any notice requirement upon an Event of the Common StockDefault. Notwithstanding anything contained herein to the contrary, the number of shares of Common Stock issuable by the Borrower and acquirable by the Holder at a price below $1.75 2.48 per share pursuant to the terms of this Note, the Purchase Agreement or any Related Agreement, when aggregated with (i) the shares of Common Stock issuable upon conversion of all or a portion of the Note referred to in the January 2005 Purchase Agreement (as defined below) plus (ii) the shares of Common Stock issuable upon exercise of all or a portion of the Warrant plus (iii) the shares of Common Stock issuable upon exercise of all or a portion of the Warrant issued on the Closing Date under the January 2005 Purchase Agreement, shall not exceed an aggregate of 4,457,995 436,012 shares of the Borrower’s 's Common Stock (subject to appropriate adjustment for stock splits, stock dividends, or other similar recapitalizations affecting the Common Stock) (the “"Maximum Common Stock Issuance”"), unless the issuance of shares hereunder in excess of the Maximum Common Stock Issuance shall first be approved by the Borrower’s 's shareholders, if required by applicable law or regulation. If at any point in time and from time to time the number of shares of Common Stock issued pursuant to the terms of this Note Note, the Purchase Agreement or any Related Agreement, together with the Warrantnumber of shares of Common Stock that would then be issuable by the Borrower to the Holder in the event of a conversion or exercise pursuant to the terms of this Note, the Purchase Agreement or any Related Agreement, would exceed the Maximum Common Stock Issuance but for this Section 3.2, the Borrower shall promptly call a shareholders meeting to solicit shareholder approval for the issuance of the shares of Common Stock hereunder in excess of the Maximum Common Stock Issuance.

Conversion Limitation. Notwithstanding anything contained herein to the contrary, the Holder shall not be entitled to convert pursuant to the terms of the this Note an amount that would (a) be convertible into that number of shares of Common Stock which, when added to the number of shares of Common Stock otherwise beneficially owned by such Holder including those issuable upon exercise of warrants held by such Holder Conversion Shares which would exceed the difference between (i) 4.99% of the outstanding shares of Common Stock and (ii) the number of the Borrower at the time shares of conversion or (b) exceed thirty-five percent (35%) of the aggregate dollar trading volume of the Common Stock for beneficially owned by the twenty-two (22) day trading period immediately preceding delivery of a Notice of Conversion to the BorrowerHolder. For the purposes of the immediately preceding sentence, beneficial ownership shall be determined in accordance with Section 13(d) of the Exchange Act and Regulation 13d-3 thereunder. The conversion Conversion Shares limitation described in this Section 3.2 shall automatically become null and void without any following notice to Borrower any Company upon the occurrence and during the continuance beyond any applicable grace period of an Event of Default which has had, or could reasonably be expected to have a Material Adverse EffectDefault, or upon 75 days prior notice to the BorrowerParent, except that at no time shall the beneficial ownership number of shares of Common Stock beneficially owned by the Holder exceed 19.99% of the outstanding shares of Common Stock. Notwithstanding anything contained herein to the contrary, the number of shares of Common Stock issuable by the Borrower Parent and acquirable by the Holder at a an average price below $1.75 1.295 per share pursuant to the terms of this Note, the Purchase Security Agreement or any Related other Ancillary Agreement, shall not exceed an aggregate of 4,457,995 2,520,966 shares of the Borrower’s Common Stock (subject to appropriate adjustment for stock splits, stock dividends, or other similar recapitalizations affecting the Common Stock) (the “Maximum Common Stock Issuance”), unless the issuance of shares Common Stock hereunder in excess of the Maximum Common Stock Issuance shall first be approved by the BorrowerParent’s shareholders, if required by applicable law or regulation. If at any point in time and from time to time the number of shares of Common Stock issued pursuant to the terms of this Note Note, the Security Agreement or any other Ancillary Agreement, together with the Warrantnumber of shares of Common Stock that would then be issuable by the Parent to the Holder in the event of a conversion or exercise pursuant to the terms of this Note, the Security Agreement or any other Ancillary Agreement, would exceed be limited by the Maximum Common Stock Issuance but for this Section 3.2preceding sentence, the Borrower Parent shall promptly call a shareholders meeting to solicit shareholder approval for the issuance of the shares of Common Stock hereunder in excess of the Maximum Common Stock Issuance. Notwithstanding anything contained herein to the contrary, the provisions of this Section 3.2 are irrevocable and may not be waived by the Holder or any Company.

Conversion Limitation. Notwithstanding anything contained herein In order to give effect to the contrary, the Holder shall not be entitled to convert pursuant to the terms of the Note an amount that would (a) be convertible into that number of shares of Common Stock which, when added to the number of shares of Common Stock otherwise beneficially owned by such Holder including those issuable upon exercise of warrants held by such Holder would exceed 4.99% of the outstanding shares of Common Stock of the Borrower at the time of conversion or (b) exceed thirty-five percent (35%) of the aggregate dollar trading volume of the Common Stock for the twenty-two (22) day trading period immediately preceding delivery of a Notice of Conversion to the Borrower. For the purposes of the immediately preceding sentence, beneficial ownership shall be determined in accordance with Section 13(d) of the Exchange Act and Regulation 13d-3 thereunder. The conversion limitation described in this Section 3.2 shall automatically become null and void without any notice to Borrower upon the occurrence and during the continuance beyond any applicable grace period of an Event of Default which has had, or could reasonably be expected to have a Material Adverse Effect, or upon 75 days prior notice to the Borrower, except that at no time shall the beneficial ownership exceed 19.99% of the Common Stock. Notwithstanding anything contained herein to the contraryFPI Restriction, the number of shares Common Shares issuable to a holder of Common Stock issuable Proportionate Voting Shares upon exercise by such holder of the Borrower and acquirable by the Holder at a price below $1.75 per share pursuant Proportionate Share Conversion Right will be subject to the terms 40% Threshold based on the number of this Note, the Purchase Agreement or any Related Agreement, shall not exceed an aggregate of 4,457,995 shares Proportionate Voting Shares held by such holder as of the Borrowerdate of issuance of Proportionate Voting Shares to such holder, and thereafter at the end of each of the Company’s Common Stock subsequent fiscal quarters (subject to appropriate adjustment for stock splitseach, stock dividends, or other similar recapitalizations affecting the Common Stock) (the a “Maximum Common Stock IssuanceDetermination Date”), unless calculated as follows: X = [(0.4A + 0.6D - B) / (0.6)] x (C/D) Where, on the issuance Determination Date and prior to the exercise of shares hereunder in excess such holder’s Proportionate Share Conversion Right: X = Maximum Number of Common Shares which may be issued upon exercise of the Maximum Proportionate Share Conversion Right. A = Aggregate number of Common Stock Issuance Shares and Proportionate Voting Shares issued and outstanding. B = Aggregate number of Common Shares and Proportionate Voting Shares held of record, directly or indirectly, by U.S. Residents. C = Aggregate Number of Proportionate Voting Shares held by such holder. D = Aggregate Number of All Proportionate Voting Shares. The Conversion Limitation Officer shall first determine as of each Determination Date, in his or her sole discretion acting reasonably, the aggregate number of Common Shares and Proportionate Voting Shares held of record, directly or indirectly, by U.S. Residents, the maximum number of Common Shares which may be approved issued upon exercise of the Proportionate Share Conversion Right, generally in accordance with the formula set forth immediately above. Upon request by a holder of Proportionate Voting Shares, the Company will provide each holder of Proportionate Voting Shares with notice of such maximum number as at the most recent Determination Date, or a more recent date as may be determined by the Borrower’s shareholdersConversion Limitation Officer in its discretion. To the extent that issuances of Common Shares on exercise of the Proportionate Share Conversion Right would result in the 40% Threshold being exceeded, if required by applicable law or regulation. If at any point in time and from time to time the number of shares Common Shares to be issued will be pro-rated among each holder of Common Stock issued pursuant to Proportionate Voting Shares exercising the terms Proportionate Share Conversion Right. Notwithstanding the provisions of this Note or the Warrant, would exceed the Maximum Common Stock Issuance but for this Section 3.2Article 2.7(a) (iii) and (iv), the Borrower shall promptly call a shareholders meeting to solicit shareholder approval for Board of Directors may by resolution waive the issuance application of the shares of Common Stock hereunder in excess Conversion Limitation to any exercise or exercises of the Maximum Common Stock IssuanceProportionate Share Conversion Right to which the Conversion Limitation would otherwise apply, or to future Conversion Limitation generally, including with respect to a period of time.

Conversion Limitation. Notwithstanding anything contained herein to the contrary, the Holder shall not be entitled to convert pursuant to the terms of the this Note an amount that would (a) be convertible into that number of shares of Common Stock which, when added to Conversion Shares which would exceed the difference between the number of shares of Common Stock otherwise beneficially owned by such Holder including those or issuable upon exercise of warrants held by such Holder would exceed and 4.99% of the outstanding shares of Common Stock of the Borrower at the time of conversion or (b) exceed thirty-five percent (35%) of the aggregate dollar trading volume of the Common Stock for the twenty-two (22) day trading period immediately preceding delivery of a Notice of Conversion to the Borrower. For the purposes of the immediately preceding sentence, beneficial ownership shall be determined in accordance with Section 13(d) of the Exchange Act and Regulation 13d-3 thereunder. The conversion Holder may void the Conversion Share limitation described in this Section 3.2 shall automatically become null and void without any notice to Borrower upon the occurrence and during the continuance beyond any applicable grace period of an Event of Default which has had, or could reasonably be expected to have a Material Adverse Effect, or upon 75 days prior notice to the Borrower, except that at no time shall the beneficial ownership exceed 19.99% Borrower or without any notice requirement upon an Event of the Common StockDefault. Notwithstanding anything contained herein to the contrary, the number of shares of Common Stock issuable by the Borrower and acquirable by the Holder at a price below $1.75 2.48 per share pursuant to the terms of this Note, the Purchase Agreement or any Related Agreement, shall not exceed an aggregate of 4,457,995 436,012 shares of the Borrower’s 's Common Stock (subject to appropriate adjustment for stock splits, stock dividends, or other similar recapitalizations affecting the Common Stock) (the “"Maximum Common Stock Issuance”"), unless the issuance of shares hereunder in excess of the Maximum Common Stock Issuance shall first be approved by the Borrower’s 's shareholders, if required by applicable law or regulation. If at any point in time and from time to time the number of shares of Common Stock issued pursuant to the terms of this Note Note, the Purchase Agreement or any Related Agreement, together with the Warrantnumber of shares of Common Stock that would then be issuable by the Borrower to the Holder in the event of a conversion or exercise pursuant to the terms of this Note, the Purchase Agreement or any Related Agreement, would exceed the Maximum Common Stock Issuance but for this Section 3.2, the Borrower shall promptly call a shareholders meeting to solicit shareholder approval for the issuance of the shares of Common Stock hereunder in excess of the Maximum Common Stock Issuance.

Conversion Limitation. Notwithstanding anything contained herein to the contrary, the Holder shall not be entitled to convert pursuant to the terms of the this Note an amount that would (a) be convertible into that number of shares of Common Stock which, when added to the number of shares of Common Stock otherwise beneficially owned by such Holder including those issuable upon exercise of warrants held by such Holder Conversion Shares which would exceed the difference between (i) 4.99% of the outstanding shares of Common Stock and (ii) the number of the Borrower at the time shares of conversion or (b) exceed thirty-five percent (35%) of the aggregate dollar trading volume of the Common Stock for beneficially owned by the twenty-two (22) day trading period immediately preceding delivery of a Notice of Conversion to the BorrowerHolder. For the purposes of the immediately preceding sentence, beneficial ownership shall be determined in accordance with Section 13(d) of the Exchange Act and Regulation 13d-3 thereunder. The conversion Conversion Shares limitation described in this Section 3.2 shall automatically become null and void without any following written notice to Borrower any Company upon the occurrence and during the continuance beyond any applicable grace period of an Event of Default which has had, or could reasonably be expected to have a Material Adverse EffectDefault, or upon 75 days prior written notice to the BorrowerParent, except that at no time shall the beneficial ownership number of shares of Common Stock beneficially owned by the Holder exceed 19.99% of the outstanding shares of Common Stock, or such lesser amount as required by the applicable Principal Market on which the Parent's Common Stock is listed, unless such shall first be approved by the Parent's stockholders. Notwithstanding anything contained herein to the contrary, the number of shares of Common Stock issuable by the Borrower Parent and acquirable by the Holder at a price below $1.75 .81 per share pursuant to the terms of this Note, the Purchase Security Agreement or any Related other Ancillary Agreement, shall not exceed an aggregate of 4,457,995 5,095,933 shares of the Borrower’s Common Stock (subject to appropriate adjustment for stock splits, stock dividends, or other similar recapitalizations affecting the Common Stock) (the “"Maximum Common Stock Issuance”"), unless the issuance of shares Common Stock hereunder in excess of the Maximum Common Stock Issuance shall first be approved by the Borrower’s Parent's shareholders, if required by applicable law or regulation. If at any point in time and from time to time the number of shares of Common Stock issued pursuant to the terms of this Note Note, the Security Agreement or any other Ancillary Agreement, together with the Warrantnumber of shares of Common Stock that would then be issuable by the Parent to the Holder in the event of a conversion or exercise pursuant to the terms of this Note, the Security Agreement or any other Ancillary Agreement, would exceed the Maximum Common Stock Issuance but for this Section 3.2, the Borrower Parent shall promptly call a shareholders meeting to solicit shareholder approval for the issuance of the shares of Common Stock hereunder in excess of the Maximum Common Stock Issuance. Notwithstanding anything contained herein to the contrary, the provisions of this Section 3.2 are irrevocable and may not be waived by the Holder or any Company.

Conversion Limitation. Notwithstanding anything contained herein to the contrary, the Holder shall not be entitled to convert pursuant to the terms of the this Note an amount that would (a) be convertible into that number of shares of Common Stock which, when added to the number of shares of Common Stock otherwise beneficially owned by such Holder including those issuable upon exercise of warrants held by such Holder Conversion Shares which would exceed the difference between 4.99% of the outstanding shares of Common Stock of the Borrower at and the time number of conversion shares of Common Stock beneficially owned by such Holder or (b) exceed thirty-five percent (35%) issuable upon exercise of warrants held by such Holder. The Holder shall not take a long position in the aggregate dollar trading volume of the Borrower’s Common Stock for the twenty-two (22) day trading period immediately preceding delivery purpose, or any other reason, that would result in the Holder’s inability to convert this Note into Common Stock because of a Notice of Conversion to the Borrowerlimitations contained in this provision. For the purposes of the immediately preceding sentence, beneficial ownership shall be determined in accordance with Section 13(d) of the Exchange Act and Regulation 13d-3 thereunder. The conversion Holder may void the Conversion Share limitation described in this Section 3.2 shall automatically become null and void without any notice to Borrower upon the occurrence and during the continuance beyond any applicable grace period of an Event of Default which has had, or could reasonably be expected to have a Material Adverse Effect, or upon 75 days prior notice to the BorrowerBorrower or upon an Event of Default, except that at without any notice requirement beyond any applicable grace period. At no time shall the beneficial ownership exceed 19.99% of the issued and outstanding Common Stock. Notwithstanding anything contained herein to the contrary, the number of shares of Common Stock issuable by the Borrower and acquirable by the Holder at a price below $1.75 0.49 per share pursuant to the terms of this Note, the Purchase Agreement or any Related Agreement, shall not exceed an aggregate of 4,457,995 shares of the Borrower’s Common Stock (subject to appropriate adjustment for stock splits, stock dividends, or other similar recapitalizations affecting the Common Stock) (the “Maximum Common Stock Issuance”), unless the issuance of shares hereunder in excess of the Maximum Common Stock Issuance shall first be approved by the Borrower’s shareholders, if required by applicable law or regulation. If at any point in time and from time to time the number of shares of Common Stock issued pursuant to the terms of this Note Note, the Purchase Agreement or any Related Agreement, together with the Warrantnumber of shares of Common Stock that would then be issuable by the Borrower to the Holder in the event of a conversion or exercise pursuant to the terms of this Note, the Purchase Agreement or any Related Agreement, would exceed the Maximum Common Stock Issuance but for this Section 3.2, the Borrower Holder’s actions shall be stayed, and Xxxxxxxx shall promptly call a shareholders meeting within (90) ninety days of Xxxxxx’s notice to Borrower of such an event to solicit shareholder approval for the issuance of the shares of Common Stock hereunder in excess of the Maximum Common Stock Issuance.

Conversion Limitation. Notwithstanding anything contained herein to the contrary, the Holder shall not be entitled to convert pursuant to the terms of the this Note an amount that would (a) be convertible into that number of shares of Common Stock which, when added to the number of shares of Common Stock otherwise beneficially owned by such Holder including those issuable upon exercise of warrants held by such Holder would exceed 4.99% of the outstanding shares of Common Stock of the Borrower at the time of conversion or (b) exceed thirty-five percent (35%) of the aggregate dollar trading volume of the Common Stock for the twenty-two (22) day trading period immediately preceding delivery of a Notice of Conversion to the Borrowerconversion. For the purposes of the immediately preceding sentence, beneficial ownership shall be determined in accordance with Section 13(d) of the Exchange Act and Regulation 13d-3 thereunder. The conversion limitation described in the first sentence of this Section 3.2 shall automatically become null and void without any notice to Borrower upon the occurrence and during the continuance beyond any applicable grace period of an Event of Default which has had, or could reasonably be expected to have a Material Adverse EffectDefault, or upon 75 days prior notice to the Borrower, except that at no time shall the beneficial ownership exceed 19.99% of the Common Stock. Notwithstanding anything contained herein to the contrary, the number of shares of Common Stock issuable by the Borrower Company and acquirable by the Holder at a price below $1.75 per share pursuant to the terms of this Note, the Purchase Agreement Agreement, the Warrant (as defined in the Purchase Agreement) or any Related Agreement (as defined in the Purchase Agreement) at a weighted average issue price of below $0.47 taking into account all such issuances, shall not exceed an aggregate of 4,457,995 6,491,440 shares of the Borrower’s Company's Common Stock (subject to appropriate adjustment for stock splits, stock dividends, or other similar recapitalizations affecting the Common Stock) (the “"Maximum Common Stock Issuance”"), unless the issuance of shares hereunder in excess of the Maximum Common Stock Issuance shall first be approved by the Borrower’s Company's shareholders, if required by applicable law or regulation. If at any point in time and from time to time the number of shares of Common Stock issued pursuant to the terms of this Note Note, the Purchase Agreement, the Warrant or any Related Agreement, together with the Warrantnumber of shares of Common Stock that would then be issuable by the Borrower to the Holder in the event of a conversion or exercise pursuant to the terms of this Note, the Purchase Agreement, the Warrant or any Related Agreement, would exceed the Maximum Common Stock Issuance but for this Section 3.2, the Borrower shall promptly call a shareholders meeting to solicit shareholder approval for the issuance of the shares of Common Stock hereunder in excess of the Maximum Common Stock Issuance. Notwithstanding anything contained herein to the contrary, from the date hereof until such time as the Borrower's shareholders have approved an increase in the number of authorized shares of Common Stock, the number of shares of Common Stock issuable by the Borrower pursuant to the term of this Note or any Related Agreement shall not exceed an aggregate of 8,202,012 shares of Common Stock (subject to appropriate adjustment for stock splits, stock dividends, or other similar recapitalizations affecting the Common Stock). The Borrower shall promptly after the date hereof call a shareholders meeting to solicit shareholder approval of an increase in its authorized number of shares of Common Stock.

Conversion Limitation. Notwithstanding anything contained herein to the contrary, the Holder shall not be entitled to convert pursuant to the terms of the this Note an amount that would (a) be convertible into that number of Conversion Shares which would exceed the difference between (i) 4.99% of the issued and outstanding shares of Common Stock which, when added to and (ii) the number of shares of Common Stock otherwise beneficially owned by such Holder including those issuable upon exercise of warrants held by such Holder would exceed 4.99% of the outstanding shares of Common Stock of the Borrower at the time of conversion or (b) exceed thirty-five percent (35%) of the aggregate dollar trading volume of the Common Stock for the twenty-two (22) day trading period immediately preceding delivery of a Notice of Conversion to the BorrowerHolder. For the purposes of the immediately preceding sentence, beneficial ownership shall be determined in accordance with Section 13(d) of the Exchange Act and Regulation 13d-3 thereunder. The conversion Conversion Share limitation described in this Section 3.2 shall automatically become null and void without any following notice to Borrower the Company upon the occurrence and during the continuance beyond any applicable grace period of an Event of Default which has hadDefault, or could reasonably be expected to have a Material Adverse Effect, or upon 75 days prior notice to the BorrowerCompany, or upon receipt by the Holder of a Notice of Redemption, except that at no time shall the beneficial ownership number of shares of Common Stock beneficially owned by the Holder exceed 19.99% of the outstanding shares of Common Stock. Notwithstanding anything contained herein to the contrary, the number of shares of Common Stock issuable by the Borrower Company and acquirable by the Holder at a price below $1.75 update Friday $4.95 per share pursuant to the terms of this Note, the Purchase Agreement or any other Related Agreement, shall not exceed an aggregate of 4,457,995 2,108,764 shares of the Borrower’s Common Stock (subject to appropriate adjustment for stock splits, stock dividends, or other similar recapitalizations affecting the Common Stock) (the “Maximum Common Stock Issuance”"MAXIMUM COMMON STOCK ISSUANCE"), unless the issuance of shares Common Stock hereunder in excess of the Maximum Common Stock Issuance shall first be approved by the Borrower’s Company's shareholders, if required by applicable law or regulation. If at any point in time and from time to time the number of shares of Common Stock issued pursuant to the terms of this Note Note, the Purchase Agreement or any other Related Agreement, together with the Warrantnumber of shares of Common Stock that would then be issuable by the Company to the Holder in the event of a conversion or exercise pursuant to the terms of this Note, the Purchase Agreement or any other Related Agreement, would exceed the Maximum Common Stock Issuance but for this Section 3.2, the Borrower Company shall promptly call a shareholders meeting to solicit shareholder approval for the issuance of the shares of Common Stock hereunder in excess of the Maximum Common Stock Issuance. Notwithstanding anything contained herein to the contrary, the provisions of this Section 3.2 are irrevocable and may not be waived by the Holder or the Company.]

Conversion Limitation. Notwithstanding anything contained herein to the contrary, the Holder shall not be entitled to convert pursuant to the terms of the this Note an amount that would (a) be convertible into that number of Conversion Shares which would exceed the difference between (i) 4.99% of the issued and outstanding shares of Common Stock which, when added to and (ii) the number of shares of Common Stock otherwise beneficially owned by such the Holder including those and issuable to the Holder upon exercise of warrants held by such Holder would exceed 4.99% of the outstanding shares of Common Stock of the Borrower at the time of conversion or (b) exceed thirty-five percent (35%) of the aggregate dollar trading volume of the Common Stock for the twenty-two (22) day trading period immediately preceding delivery of a Notice of Conversion to the BorrowerWarrants. For the purposes of the immediately preceding sentence, beneficial ownership shall be determined in accordance with Section 13(d) of the Exchange Act and Regulation 13d-3 thereunder. The conversion Conversion Shares limitation described in this Section 3.2 2.2 shall automatically become null and void without any following written notice to Borrower any Company upon the occurrence and during the continuance beyond any applicable grace period of an Event of Default which has had, or could reasonably be expected to have a Material Adverse EffectDefault, or upon 75 days prior notice to the BorrowerParent, except that at no time shall the beneficial ownership number of shares of Common Stock beneficially owned by the Holder exceed 19.99% of the outstanding shares of Common Stock, or such lesser amount as required by the applicable Principal Market on which the Parent's Common Stock is listed, unless such shall first be approved by the Parent's stockholders. Notwithstanding anything contained herein to the contrary, the number of shares of Common Stock issuable by the Borrower Parent and acquirable by the Holder at a price below $1.75 .81 per share pursuant to the terms of this Note, the Purchase Security Agreement or any Related other Ancillary Agreement, shall not exceed an aggregate of 4,457,995 5,095,933 shares of the Borrower’s Common Stock (subject to appropriate adjustment for stock splits, stock dividends, or other similar recapitalizations affecting the Common Stock) (the “"Maximum Common Stock Issuance”"), unless the issuance of shares Common Stock hereunder in excess of the Maximum Common Stock Issuance shall first be approved by the Borrower’s Parent's shareholders, if required by applicable law or regulation. If at any point in time and from time to time the number of shares of Common Stock issued pursuant to the terms of this Note Note, the Security Agreement or any other Ancillary Agreement, together with the Warrantnumber of shares of Common Stock that would then be issuable by the Parent to the Holder in the event of a conversion or exercise pursuant to the terms of this Note, the Security Agreement or any other Ancillary Agreement, would exceed the Maximum Common Stock Issuance but for this Section 3.22.2, the Borrower Parent shall promptly call a shareholders meeting to solicit shareholder approval for the issuance of the shares of Common Stock hereunder in excess of the Maximum Common Stock Issuance. Notwithstanding anything contained herein to the contrary, the provisions of this Section 2.2 are irrevocable and may not be waived by the Holder or any Company.

Conversion Limitation. Notwithstanding anything contained herein to the contrary, the Holder shall not be entitled to convert pursuant to the terms of the this Note an amount that would (a) be convertible into that number of shares of Common Stock which, when added to Conversion Shares which would (i) exceed the difference between the number of shares of Common Stock otherwise beneficially owned by such Holder including those or issuable upon exercise of warrants held by such Holder would exceed and 4.99% of the outstanding shares of Common Stock of the Borrower at the time of conversion or (bii) exceed thirty-twenty five percent (3525%) of the aggregate dollar trading volume of the Common Stock for the twenty-two ten (2210) day trading period immediately preceding delivery of a Notice of Conversion any conversion made pursuant to the Borrowerterms of this Note. For the purposes of the immediately preceding sentence, beneficial ownership shall be determined in accordance with Section 13(d) of the Exchange Act and Regulation 13d-3 thereunder. The conversion Holder may void the Conversion Share limitation described in this Section 3.2 shall automatically become null and void without any notice to Borrower upon the occurrence and during the continuance beyond any applicable grace period of an Event of Default which has had, or could reasonably be expected to have a Material Adverse Effect, or upon 75 days prior notice to the Borrower, except that at no time shall the beneficial ownership exceed 19.99% Borrower or without any notice requirement upon an Event of the Common StockDefault. Notwithstanding anything contained herein to the contrary, the number of shares of Common Stock issuable by the Borrower and acquirable by the Holder at a price below $1.75 $ 1.06 [market price of the stock at closing] per share pursuant to the terms of this Note, Note and/or the Warrant issued by the Borrower to the Holder pursuant to that certain Securities Purchase Agreement or any Related Agreementdated April 26, 2004 (the "April Transaction Documents"), shall not exceed an aggregate of 4,457,995 459,770 shares of the Borrower’s 's Common Stock Stock, (subject to appropriate adjustment for stock splits, stock dividends, or other similar recapitalizations affecting the Common Stock) (the “Stock)(the "Maximum Common Stock Issuance”"), unless the issuance of shares hereunder in excess of the Maximum Common Stock Issuance shall first be approved by the Borrower’s 's shareholders, if required by applicable law or regulation. If at any point in time and from time to time the number of shares of Common Stock issued pursuant to the terms of this Note or the Warrant, April Transaction Documents would exceed the Maximum Common Stock Issuance but for this Section 3.2, the Borrower shall promptly promptly, but no later than July 31, 2004, call a shareholders meeting to solicit shareholder approval for the issuance of the shares of Common Stock hereunder in excess of the Maximum Common Stock Issuance.

Conversion Limitation. Notwithstanding anything contained herein to the contrary, the Holder shall not be entitled to convert pursuant to the terms of the this Note an amount that would (a) be convertible into that number of Conversion Shares which would exceed the difference between (i) 4.99% of the issued and outstanding shares of Common Stock which, when added to and (ii) the number of shares of Common Stock otherwise beneficially owned by such the Holder including those and issuable to the Holder upon exercise of warrants held by such Holder would exceed 4.99% of the outstanding shares of Common Stock of the Borrower at the time of conversion or (b) exceed thirty-five percent (35%) of the aggregate dollar trading volume of the Common Stock for the twenty-two (22) day trading period immediately preceding delivery of a Notice of Conversion to the BorrowerWarrants. For the purposes of the immediately preceding sentence, beneficial ownership shall be determined in accordance with Section 13(d) of the Exchange Act and Regulation 13d-3 thereunder. The conversion Conversion Shares limitation described in this Section 3.2 2.2 shall automatically become null and void without any notice to Borrower any Company upon the occurrence and during the continuance beyond any applicable grace period of an Event of Default which has had, or could reasonably be expected to have a Material Adverse EffectDefault, or upon 75 days prior notice to the BorrowerParent, except that at no time shall the beneficial ownership number of shares of Common Stock beneficially owned by the Holder exceed 19.99% of the outstanding shares of Common Stock. Notwithstanding anything contained herein to the contrary, the number of shares of Common Stock issuable by the Borrower Parent and acquirable by the Holder at a price below $1.75 2.30 [insert the greater of market price or book value of the Common Stock as of the date hereof] per share pursuant to the terms of this Note, the Purchase Security Agreement or any Related other Ancillary Agreement, shall not exceed an aggregate of 4,457,995 664,104 shares of the Borrower’s Common Stock (subject to appropriate adjustment for stock splits, stock dividends, or other similar recapitalizations affecting the Common Stock) (the “"Maximum Common Stock Issuance”"), unless the issuance of shares Common Stock hereunder in excess of the Maximum Common Stock Issuance shall first be approved by the Borrower’s Parent's shareholders, if required by applicable law or regulation. If at any point in time and from time to time the number of shares of Common Stock issued pursuant to the terms of this Note Note, the Security Agreement or any other Ancillary Agreement, together with the Warrantnumber of shares of Common Stock that would then be issuable by the Parent to the Holder in the event of a conversion or exercise pursuant to the terms of this Note, the Security Agreement or any other Ancillary Agreement, would exceed the Maximum Common Stock Issuance but for this Section 3.22.2, the Borrower Parent shall promptly call a shareholders meeting to solicit shareholder approval for the issuance of the shares of Common Stock hereunder in excess of the Maximum Common Stock Issuance. Notwithstanding anything contained herein to the contrary, the provisions of this Section 2.2 are irrevocable and may not be waived by the Holder or any Company.

Conversion Limitation. Notwithstanding anything contained herein to the contrary, the Holder shall not be entitled to convert pursuant to the terms of this Note an amount that would be convertible into that number of Conversion Shares which would exceed the difference between 4.99% of the outstanding shares of Common Stock of the Borrower and the number of shares of Common Stock beneficially owned by such Holder or issuable upon exercise of warrants held by such Holder. For the purposes of the immediately preceding sentence, beneficial ownership shall be determined in accordance with Section 13(d) of the Exchange Act and Regulation 13d-3 thereunder. The Holder may void the Conversion Share limitation described in this Section 3.2 upon 75 days prior notice to the Borrower or without any notice requirement upon an Event of Default. Notwithstanding anything contained herein to the contrary, the Holder shall not be entitled to convert pursuant to the terms of the Note an amount that would (a) be convertible into that number of shares of Common Stock which, when added to the number of shares of Common Stock otherwise beneficially owned by such Holder including those issuable upon exercise of warrants held by such Holder would exceed 4.99% of the outstanding shares of Common Stock of the Borrower at the time of conversion or (b) exceed thirty-five percent (35%) of the aggregate dollar trading volume of the Common Stock for the twenty-two (22) day trading period immediately preceding delivery of a Notice of Conversion to the Borrowerconversion. For the purposes of the immediately preceding sentence, beneficial ownership shall be determined in accordance with Section 13(d) of the Exchange Act and Regulation 13d-3 thereunder. The conversion limitation described in this Section 3.2 shall automatically become null and void without any notice to Borrower upon the occurrence and during the continuance beyond any applicable grace period of an Event of Default which has had, or could reasonably be expected to have a Material Adverse EffectDefault, or upon 75 days prior notice to the Borrower, except that at no time shall the beneficial ownership exceed 19.99% of the Common Stock. Notwithstanding anything contained herein to the contrary, the number of shares of Common Stock issuable by the Borrower and acquirable by the Holder at a price below $1.75 0.60 per share pursuant to the terms of this Note, the Purchase Agreement or any Related Agreement, shall not exceed an aggregate of 4,457,995 3,898,136 shares of the Borrower’s 's Common Stock (subject to appropriate adjustment for stock splits, stock dividends, or other similar recapitalizations affecting the Common Stock) (the “"Maximum Common Stock Issuance”"), unless the issuance of shares hereunder in excess of the Maximum Common Stock Issuance shall first be approved by the Borrower’s 's shareholders, if required by applicable law or regulation. If at any point in time and from time to time the number of shares of Common Stock issued pursuant to the terms of this Note Note, the Purchase Agreement or any Related Agreement, together with the Warrantnumber of shares of Common Stock that would then be issuable by the Borrower to the Holder in the event of a conversion or exercise pursuant to the terms of this Note, the Purchase Agreement or any Related Agreement, would exceed the Maximum Common Stock Issuance but for this Section 3.2, the Borrower shall promptly call a shareholders meeting to solicit shareholder approval for the issuance of the shares of Common Stock hereunder in excess of the Maximum Common Stock Issuance.

Conversion Limitation. Notwithstanding anything contained herein to the contrary, the Holder shall not be entitled to convert pursuant to the terms of the this Note an amount that would (a) be convertible into that number of shares of Common Stock Conversion Shares which, when added to the number of shares of Common Stock otherwise beneficially owned by such Holder including those issuable upon exercise of warrants held by such Holder would exceed 4.99% of the outstanding shares of Common Stock of the Borrower at the time of conversion or (b) exceed thirty-five percent (35%) of the aggregate dollar trading volume of the Common Stock for the twenty-two (22) day trading period immediately preceding delivery of a Notice of Conversion to the Borrowerconversion. For the purposes of the immediately preceding sentence, beneficial ownership shall be determined in accordance with Section 13(d) of the Exchange Act and Regulation 13d-3 thereunder. The conversion Conversion Shares limitation described in this Section 3.2 shall automatically become null and void without any notice to Borrower upon the occurrence and during the continuance beyond any applicable grace period of an Event of Default which has had, or could reasonably be expected to have a Material Adverse EffectDefault, or upon 75 days prior notice to the Borrower, except that at no time shall the beneficial ownership exceed 19.99% of the Common Stock. Notwithstanding anything contained herein to the contrary, the number of shares of Common Stock issuable by the Borrower and acquirable by the Holder at a price below $1.75 2.65 per share pursuant to the terms of this Note, the Secured Convertible Term Note and/or Warrants issued by the Borrower to the Holder pursuant to that certain Securities Purchase Agreement or any Related Agreementdated February 19, 2004 (the “February Transaction Documents”), shall not exceed an aggregate of 4,457,995 5,776,614 shares of the Borrower’s Common Stock Stock, (subject to appropriate adjustment for stock splits, stock dividends, or other similar recapitalizations affecting the Common Stock) (the “Maximum Common Stock Issuance”), unless the issuance of shares hereunder in excess of the Maximum Common Stock Issuance shall first be approved by the Borrower’s shareholders, if required by applicable law or regulation. If at any point in time and from time to time the number of shares of Common Stock issued pursuant to the terms of this Note the February Transaction Documents, together with the number of shares of Common Stock that would then be issuable by the Borrower to the Holder in the event of a conversion or exercise pursuant to the Warrantterms of the February Transaction Documents, would exceed the Maximum Common Stock Issuance but for this Section 3.2Section, the Borrower shall promptly call a shareholders meeting to solicit shareholder approval for the issuance of the shares of Common Stock hereunder in excess of the Maximum Common Stock Issuance.”

Conversion Limitation. Notwithstanding anything contained herein to the contrary, the Holder shall not be entitled to convert pursuant to the terms of the this Note an amount that would (a) be convertible into that number of Conversion Shares which would exceed the difference between (i) 4.99% of the issued and outstanding shares of Common Stock which, when added to and (ii) the number of shares of Common Stock otherwise beneficially owned by such Holder including those issuable upon exercise of warrants held by such Holder would exceed 4.99% of the outstanding shares of Common Stock of the Borrower at the time of conversion or (b) exceed thirty-five percent (35%) of the aggregate dollar trading volume of the Common Stock for the twenty-two (22) day trading period immediately preceding delivery of a Notice of Conversion to the BorrowerHolder. For the purposes of the immediately preceding sentence, beneficial ownership shall be determined in accordance with Section 13(d) of the Exchange Act and Regulation 13d-3 thereunder. The conversion Conversion Share limitation described in this Section 3.2 shall automatically become null and void without any following notice to Borrower the Company upon the occurrence and during the continuance beyond any applicable grace period of an Event of Default which has hadDefault, or could reasonably be expected to have a Material Adverse Effect, or upon 75 days prior notice to the BorrowerCompany, or upon receipt by the Holder of a Notice of Redemption, except that at no time shall the beneficial ownership number of shares of Common Stock beneficially owned by the Holder exceed 19.99% of the outstanding shares of Common Stock. Notwithstanding anything contained herein to the contrary, the number of shares of Common Stock issuable or issued by the Borrower and acquirable by the Holder Company at a price below $1.75 2.55 per share pursuant to the terms of this Note, the Purchase Agreement Agreement, or any other Related Agreement, shall not exceed an aggregate of 4,457,995 1,454,593 shares of the Borrower’s Common Stock (subject to appropriate adjustment for stock splits, stock dividends, or other similar recapitalizations affecting the Common Stock) (the “Maximum Common Stock Issuance”), unless the issuance of shares Common Stock hereunder in excess of the Maximum Common Stock Issuance shall first be approved by the BorrowerCompany’s shareholders, if required by applicable law or regulation. If at any point in time and from time to time the number of shares of Common Stock issued pursuant to the terms of this Note Note, the Purchase Agreement, any other Related Agreement or otherwise, together with the Warrantnumber of shares of Common Stock that would then be issuable by the Company to the Holder in the event of a conversion or exercise pursuant to the terms of this Note, the Purchase Agreement or any other Related Agreement, would exceed the Maximum Common Stock Issuance but for this Section 3.2, the Borrower Company shall promptly call a shareholders meeting to solicit shareholder approval for the issuance of the shares of Common Stock hereunder in excess of the Maximum Common Stock Issuance. Notwithstanding anything contained herein to the contrary, the provisions of this Section 3.2 are irrevocable and may not be waived by the Holder or the Company.

Conversion Limitation. Notwithstanding anything contained herein to the contrary, the Holder shall not be entitled to convert pursuant to the terms of the this Note an amount that would (a) be convertible into that number of shares of Common Stock which, when added to the number of shares of Common Stock otherwise beneficially owned by such Holder including those issuable upon exercise of warrants held by such Holder Conversion Shares which would exceed the difference between (i) 4.99% of the outstanding shares of Common Stock and (ii) the number of the Borrower at the time shares of conversion or (b) exceed thirty-five percent (35%) of the aggregate dollar trading volume of the Common Stock for beneficially owned by the twenty-two (22) day trading period immediately preceding delivery of a Notice of Conversion to the BorrowerHolder. For the purposes of the immediately preceding sentence, beneficial ownership shall be determined in accordance with Section 13(d) of the Exchange Act and Regulation 13d-3 thereunder. The conversion Conversion Shares limitation described in this Section 3.2 shall automatically become null and void without any following notice to Borrower any Company upon the occurrence and during the continuance beyond any applicable grace period of an Event of Default which has had, or could reasonably be expected to have a Material Adverse EffectDefault, or upon 75 120 days prior notice to the BorrowerParent, except that at no time shall the beneficial ownership number of shares of Common Stock beneficially owned by the Holder exceed 19.99% of the outstanding shares of Common Stock. Notwithstanding anything contained herein to the contrary, the total number of shares of Common Stock issuable by the Borrower Parent and acquirable by the Holder at a price below $1.75 2.65 per share pursuant to the terms of this Note, the Purchase Security Agreement or any Related other Ancillary Agreement, shall not exceed an aggregate of 4,457,995 2,339,050 shares of the Borrower’s Common Stock (subject to appropriate adjustment for stock splits, stock dividends, or other similar recapitalizations affecting the Common Stock) (the “Maximum Common Stock Issuance”), unless the issuance of shares Common Stock hereunder in excess of the Maximum Common Stock Issuance shall first be approved by the BorrowerParent’s shareholders, if required by shareholders in accordance with applicable law or regulationstate and federal laws. If at any point in time and from time to time the number of shares of Common Stock issued pursuant to the terms of this Note Note, the Security Agreement or any other Ancillary Agreement, together with the Warrantnumber of shares of Common Stock that would then be issuable by the Parent to the Holder in the event of a conversion or exercise pursuant to the terms of this Note, the Security Agreement or any other Ancillary Agreement, would exceed the Maximum Common Stock Issuance but for this Section 3.2, the Borrower Parent shall promptly call a shareholders meeting to solicit shareholder approval for the issuance of the shares of Common Stock hereunder in excess of the Maximum Common Stock Issuance. Notwithstanding anything contained herein to the contrary, the provisions of this Section 3.2 are irrevocable and may not be waived by the Holder or any Company.

Conversion Limitation. Notwithstanding anything contained herein to the contrary, the Holder shall not be entitled to convert pursuant to the terms of the Note an amount that would (a) be convertible into that number of shares of Common Stock which, when added to the number of shares of Common Stock otherwise beneficially owned by such Holder including those issuable upon exercise of warrants held by such Holder would exceed 4.99% of the outstanding shares of Common Stock of the Borrower at the time of conversion or (b) exceed thirty-five percent (35%) of the aggregate dollar trading volume of the Common Stock for the twenty-two (22) day trading period immediately preceding delivery of a Notice of Conversion to the Borrowerconversion. For the purposes of the immediately preceding sentence, beneficial ownership shall be determined in accordance with Section 13(d) of the Exchange Act and Regulation 13d-3 thereunder. The conversion limitation described in this Section 3.2 shall automatically become null and void without any notice to Borrower upon the occurrence and during the continuance beyond any applicable grace period of an Event of Default which has had, or could reasonably be expected to have a Material Adverse EffectDefault, or upon 75 days prior notice to the Borrower, except that at no time shall the beneficial ownership exceed 19.998.33% of the Common Stock. Notwithstanding anything contained herein to the contrary, the number of shares of Common Stock issuable by the Borrower and acquirable by the Holder at a price below $1.75 per share pursuant to the terms of this Note, the Purchase Agreement or any Related AgreementAgreement at a price below the market price of the Common Stock on the date of this Note, shall not exceed an aggregate of 4,457,995 shares 8.33% of the Borrower’s Common Stock shares outstanding (subject to appropriate adjustment for stock splits, stock dividends, or other similar recapitalizations affecting the Common Stock) (the “Maximum Common Stock Issuance”), unless the issuance of shares hereunder in excess of the Maximum Common Stock Issuance shall first be approved by the Borrower’s shareholders, if required by applicable law or regulation. If at any point in time and from time to time the number of shares of Common Stock issued pursuant to the terms of this Note Note, the Purchase Agreement or any Related Agreement, together with the Warrantnumber of shares of Common Stock that would then be issuable by the Borrower to the Holder in the event of a conversion or exercise pursuant to the terms of this Note, the Purchase Agreement or any Related Agreement, would exceed the Maximum Common Stock Issuance but for this Section 3.2, the Borrower shall promptly call a shareholders meeting to solicit shareholder approval for the issuance of the shares of Common Stock hereunder in excess of the Maximum Common Stock Issuance.

Conversion Limitation. Notwithstanding anything contained herein to the contrary, the Holder shall not be entitled to convert pursuant to the terms of the this Note an amount that would (a) be convertible into that number of shares of Common Stock which, when added to the number of shares of Common Stock otherwise beneficially owned by such Holder including those issuable upon exercise of warrants held by such Holder Conversion Shares which would exceed the difference between (i) 4.99% of the outstanding shares of Common Stock and (ii) the number of the Borrower at the time shares of conversion or (b) exceed thirty-five percent (35%) of the aggregate dollar trading volume of the Common Stock for beneficially owned by the twenty-two (22) day trading period immediately preceding delivery of a Notice of Conversion to the BorrowerHolder. For the purposes of the immediately preceding sentence, beneficial ownership shall be determined in accordance with Section 13(d) of the Exchange Act and Regulation 13d-3 thereunder. The conversion Conversion Shares limitation described in this Section 3.2 shall automatically become null and void without any notice to Borrower any Company upon the occurrence and during the continuance beyond any applicable grace period of an Event of Default which has had, or could reasonably be expected to have a Material Adverse EffectDefault, or upon 75 days prior notice to the BorrowerParent, except that at no time shall the beneficial ownership number of shares of Common Stock beneficially owned by the Holder exceed 19.99% of the outstanding shares of Common Stock. Notwithstanding anything contained herein to the contrary, the number of shares of Common Stock issuable by the Borrower Parent and acquirable by the Holder at a price below $1.75 2.30 [insert the greater of market price or book value of the Common Stock as of the date hereof] per share pursuant to the terms of this Note, the Purchase Security Agreement or any Related other Ancillary Agreement, shall not exceed an aggregate of 4,457,995 664,104 shares of the Borrower’s Common Stock (subject to appropriate adjustment for stock splits, stock dividends, or other similar recapitalizations affecting the Common Stock) (the “"Maximum Common Stock Issuance”"), unless the issuance of shares Common Stock hereunder in excess of the Maximum Common Stock Issuance shall first be approved by the Borrower’s Parent's shareholders, if required by applicable law or regulation. If at any point in time and from time to time the number of shares of Common Stock issued pursuant to the terms of this Note Note, the Security Agreement or any other Ancillary Agreement, together with the Warrantnumber of shares of Common Stock that would then be issuable by the Parent to the Holder in the event of a conversion or exercise pursuant to the terms of this Note, the Security Agreement or any other Ancillary Agreement, would exceed the Maximum Common Stock Issuance but for this Section 3.2, the Borrower Parent shall promptly call a shareholders meeting to solicit shareholder approval for the issuance of the shares of Common Stock hereunder in excess of the Maximum Common Stock Issuance. Notwithstanding anything contained herein to the contrary, the provisions of this Section 3.2 are irrevocable and may not be waived by the Holder or any Company.

Conversion Limitation. Notwithstanding anything contained herein to the contrary, the Holder shall not be entitled to convert pursuant to the terms of the this Note an amount that would (a) be convertible into that number of shares of Common Stock which, when added to the number of shares of Common Stock otherwise beneficially owned by such Holder including those issuable upon exercise of warrants held by such Holder Conversion Shares which would exceed the difference between 4.99% of the outstanding shares of Common Stock of the Borrower at and the time number of conversion shares of Common Stock beneficially owned by such Holder or (b) exceed thirty-five percent (35%) issuable upon exercise of warrants held by such Holder. The Holder shall not take a long position in the aggregate dollar trading volume of the Borrower’s Common Stock for the twenty-two (22) day trading period immediately preceding delivery purpose, or any other reason, that would result in the Holder’s inability to convert this Note into Common Stock because of a Notice of Conversion to the Borrowerlimitations contained in this provision. For the purposes of the immediately preceding sentence, beneficial ownership shall be determined in accordance with Section 13(d) of the Exchange Act and Regulation 13d-3 thereunder. The conversion Holder may void the Conversion Share limitation described in this Section 3.2 shall automatically become null and void without any notice to Borrower upon the occurrence and during the continuance beyond any applicable grace period of an Event of Default which has had, or could reasonably be expected to have a Material Adverse Effect, or upon 75 days prior notice to the BorrowerBorrower or upon an Event of Default, except that at without any notice requirement beyond any applicable grace period. At no time shall the beneficial ownership exceed 19.99% of the issued and outstanding Common Stock. Notwithstanding anything contained herein to the contrary, the number of shares of Common Stock issuable by the Borrower and acquirable by the Holder at a price below $1.75 0.49 per share pursuant to the terms of this Note, the Purchase Agreement or any Related Agreement, shall not exceed an aggregate of 4,457,995 shares of the Borrower’s Common Stock (subject to appropriate adjustment for stock splits, stock dividends, or other similar recapitalizations affecting the Common Stock) (the “Maximum Common Stock Issuance”), unless the issuance of shares hereunder in excess of the Maximum Common Stock Issuance shall first be approved by the Borrower’s shareholders, if required by applicable law or regulation. If at any point in time and from time to time the number of shares of Common Stock issued pursuant to the terms of this Note Note, the Purchase Agreement or any Related Agreement, together with the Warrantnumber of shares of Common Stock that would then be issuable by the Borrower to the Holder in the event of a conversion or exercise pursuant to the terms of this Note, the Purchase Agreement or any Related Agreement, would exceed the Maximum Common Stock Issuance but for this Section 3.2, the Borrower Holder’s actions shall be stayed, and Bxxxxxxx shall promptly call a shareholders meeting within (90) ninety days of Hxxxxx’s notice to Borrower of such an event to solicit shareholder approval for the issuance of the shares of Common Stock hereunder in excess of the Maximum Common Stock Issuance.

Conversion Limitation. Notwithstanding anything contained herein to the contrary, the Holder shall not be entitled to convert pursuant to the terms of the this Note an amount that would (a) be convertible into that number of Conversion Shares which would exceed the difference between (i) 4.99% of the issued and outstanding shares of Common Stock which, when added to and (ii) the number of shares of Common Stock otherwise beneficially owned by such Holder including those issuable upon exercise of warrants held by such Holder would exceed 4.99% of the outstanding shares of Common Stock of the Borrower at the time of conversion or (b) exceed thirty-five percent (35%) of the aggregate dollar trading volume of the Common Stock for the twenty-two (22) day trading period immediately preceding delivery of a Notice of Conversion to the BorrowerHolder. For the purposes of the immediately preceding sentence, beneficial ownership shall be determined in accordance with Section 13(d) of the Exchange Act and Regulation 13d-3 thereunder. The conversion Conversion Share limitation described in this Section 3.2 shall automatically become null and void without any following notice to Borrower the Company upon the occurrence and during the continuance beyond any applicable grace period of an Event of Default which has had, or could reasonably be expected to have a Material Adverse EffectDefault, or upon 75 days prior notice to the BorrowerCompany, except that at no time shall the beneficial ownership number of shares of Common Stock beneficially owned by the Holder a exceed 19.99% of the outstanding shares of Common Stock. Notwithstanding anything contained herein to the contrary, the number of shares of Common Stock issuable by the Borrower Company and acquirable by the Holder at a price below $1.75 3.10 per share pursuant to the terms of this Note, the Purchase Agreement or any other Related Agreement, shall not exceed an aggregate of 4,457,995 1,377,533 shares of the Borrower’s Common Stock (subject to appropriate adjustment for stock splits, stock dividends, or other similar recapitalizations affecting the Common Stock) (the “Maximum Common Stock Issuance”), unless the issuance of shares Common Stock hereunder in excess of the Maximum Common Stock Issuance shall first be approved by the BorrowerCompany’s shareholders, if required by applicable law or regulation. If at any point in time and from time to time the number of shares of Common Stock issued pursuant to the terms of this Note Note, the Purchase Agreement or any other Related Agreement, together with the Warrantnumber of shares of Common Stock that would then be issuable by the Company to the Holder in the event of a conversion or exercise pursuant to the terms of this Note, the Purchase Agreement or any other Related Agreement, would exceed the Maximum Common Stock Issuance but for this Section 3.2, the Borrower Company shall promptly call a shareholders meeting to solicit shareholder approval for the issuance of the shares of Common Stock hereunder in excess of the Maximum Common Stock Issuance. Notwithstanding anything contained herein to the contrary, the provisions of this Section 3.2 are irrevocable and may not be waived by the Holder or the Company. Except for conversions of lesser amounts made pursuant to Section 2.1(a) above, the Holder shall not, pursuant to any Notice of Conversion (defined below) convert an amount less than Ten Thousand Dollars (US$10,000).

Conversion Limitation. Notwithstanding anything contained herein to the contrary, the Holder shall not be entitled to convert pursuant to the terms of the this Note an amount that would (a) be convertible into that number of Conversion Shares which would exceed the difference between (i) 4.99% of the issued and outstanding shares of Common Stock which, when added to and (ii) the number of shares of Common Stock otherwise beneficially owned by such Holder including those issuable upon exercise of warrants held by such Holder would exceed 4.99% of the outstanding shares of Common Stock of the Borrower at the time of conversion or (b) exceed thirty-five percent (35%) of the aggregate dollar trading volume of the Common Stock for the twenty-two (22) day trading period immediately preceding delivery of a Notice of Conversion to the BorrowerHolder. For the purposes of the immediately preceding sentence, beneficial ownership shall be determined in accordance with Section 13(d) of the Exchange Act and Regulation 13d-3 thereunder. The conversion Conversion Shares limitation described in this Section 3.2 2.2 shall automatically become null and void without any following notice to Borrower any Company upon the occurrence and during the continuance beyond any applicable grace period of an Event of Default which has had, or could reasonably be expected to have a Material Adverse EffectDefault, or upon 75 120 days prior notice to the BorrowerParent, except that at no time shall the beneficial ownership number of shares of Common Stock beneficially owned by the Holder exceed 19.99% of the outstanding shares of Common Stock. Notwithstanding anything contained herein to the contrary, the total number of shares of Common Stock issuable by the Borrower Parent and acquirable by the Holder at a price below $1.75 2.65 per share pursuant to the terms of this Note, the Purchase Security Agreement or any Related other Ancillary Agreement, shall not exceed an aggregate of 4,457,995 2,339,050 shares of the Borrower’s Common Stock (subject to appropriate adjustment for stock splits, stock dividends, or other similar recapitalizations affecting the Common Stock) (the “Maximum Common Stock Issuance”), unless the issuance of shares Common Stock hereunder in excess of the Maximum Common Stock Issuance shall first be approved by the BorrowerParent’s shareholders, if required by shareholders in accordance with applicable law or regulationstate and federal laws. If at any point in time and from time to time the number of shares of Common Stock issued pursuant to the terms of this Note Note, the Security Agreement or any other Ancillary Agreement, together with the Warrantnumber of shares of Common Stock that would then be issuable by the Parent to the Holder in the event of a conversion or exercise pursuant to the terms of this Note, the Security Agreement or any other Ancillary Agreement, would exceed the Maximum Common Stock Issuance but for this Section 3.22.2, the Borrower Parent shall promptly call a shareholders meeting to solicit shareholder approval for the issuance of the shares of Common Stock hereunder in excess of the Maximum Common Stock Issuance. Notwithstanding anything contained herein to the contrary, the provisions of this Section 2.2 are irrevocable and may not be waived by the Holder or any Company.

Conversion Limitation. Notwithstanding anything contained herein to the contrarycontrary set forth in the Agreement, the Holder Note, the Warrants, or any other agreement, security or instrument between Borrower and a PFG Party, Borrower shall not be entitled to convert pursuant to the terms effect any Conversion of the Note an amount that or any Warrant or any other Convertible Security held or beneficially owned by the PFG Parties, and no PFG Party shall have the right to Convert the Note, any Warrant or any other Convertible Security in whole or in part to the extent that, after giving effect to such attempted Conversion, as set forth in the relevant Conversion Notice, the PFG Parties would (a) be convertible into that collectively beneficially own a number of shares of Common Stock whichof Borrower in excess of the Beneficial Ownership Limitation (as hereinafter defined). For purposes of the foregoing sentence, when added to the number of shares of Common Stock otherwise beneficially owned by such Holder including those issuable upon exercise the PFG Parties shall include the number of warrants held by such Holder would exceed 4.99% of the outstanding shares of Common Stock issuable upon Conversion of the Borrower at Note and Warrants subject to a Conversion Notice with respect to which such determination is being made, but shall exclude the time number of conversion or (b) exceed thirty-five percent (35%) shares of Common Stock which would be issuable upon Conversion of the aggregate dollar trading volume of remaining, non-converted Convertible Securities held or beneficially owned by the Common Stock for PFG Parties. Except as set forth in the twenty-two (22) day trading period immediately preceding delivery of a Notice of Conversion to the Borrower. For the purposes of the immediately preceding sentence, beneficial ownership shall be determined calculated in accordance with Section 13(d) of the Exchange Act and Regulation 13d-3 the rules and regulations promulgated thereunder. The conversion limitation described in this Section 3.2 “Beneficial Ownership Limitation” shall automatically become null and void without any notice to Borrower upon the occurrence and during the continuance beyond any applicable grace period of an Event of Default which has had, or could reasonably be expected to have a Material Adverse Effect, or upon 75 days prior notice to the Borrower, except that at no time shall the beneficial ownership exceed 19.999.9% of the Common Stock. Notwithstanding anything contained herein to the contrary, the number of shares of Common Stock issuable by the Borrower and acquirable by the Holder at a price below $1.75 per share pursuant outstanding immediately after giving effect to the terms of this Note, the Purchase Agreement or any Related Agreement, shall not exceed an aggregate of 4,457,995 shares of the Borrower’s Common Stock (subject to appropriate adjustment for stock splits, stock dividends, or other similar recapitalizations affecting the Common Stock) (the “Maximum Common Stock Issuance”), unless the issuance of shares hereunder in excess of the Maximum Common Stock Issuance shall first be approved by the Borrower’s shareholders, if required by applicable law or regulation. If at any point in time and from time to time the number of shares of Common Stock issued issuable upon Conversion of that portion of the Convertible Securities proposed to be Converted pursuant to a Conversion Notice (to the terms of this Note or the Warrant, would exceed the Maximum Common Stock Issuance but for extent permitted pursuant to this Section 3.2, the Borrower shall promptly call a shareholders meeting 1(d)). Partners for Growth Schedule to solicit shareholder approval for the issuance of the shares of Common Stock hereunder in excess of the Maximum Common Stock Issuance.Amended and Restated Loan and Security Agreement

Conversion Limitation. Notwithstanding anything contained herein to the contrary, the Holder shall not be entitled to convert pursuant to the terms of the Note an amount that would (a) be convertible into that number of shares of Common Stock Ordinary Shares which, when added to the number of shares of Common Stock Ordinary Shares otherwise beneficially owned by such Holder including those issuable upon exercise of warrants held by such Holder would exceed 4.99% of the outstanding shares of Common Stock Ordinary Shares of the Borrower at the time of conversion or (b) (ii) exceed thirty-twenty five percent (3525%) of the aggregate dollar trading volume of the Common Stock Ordinary Shares for the twenty-two thirty (2230) day trading period immediately preceding delivery of a Notice of Conversion to the Borrower. For the purposes of the immediately preceding sentence, beneficial ownership shall be determined in accordance with Section 13(d) of the Exchange Act and Regulation 13d-3 thereunder. The conversion limitation described in this Section 3.2 shall automatically become null and void without any notice to Borrower upon the occurrence and during the continuance beyond any applicable grace period of an Event of Default which has had, or could reasonably be expected to have a Material Adverse EffectDefault, or upon 75 days prior notice to the Borrower, except that at no time shall the beneficial ownership exceed 19.99% of the Common StockBorrower’s outstanding Ordinary Shares as of the date hereof. Notwithstanding anything contained herein to the contrary, (i) the number of shares of Common Stock Ordinary Shares issuable by the Borrower and acquirable by the Holder at a price below $1.75 per share pursuant to the terms of this NoteNote and/or the Warrant issued by the Borrower to the Holder pursuant to the Securities Purchase Agreement, plus (ii) the number of Ordinary Shares issuable by the Borrower and acquirable by the Holder pursuant to the terms of the Note and/or Warrant issued by the Borrower to the Holder pursuant to that Securities Purchase Agreement or any Related Agreemententered into by and among the Borrower, BOScom Ltd. and the Holder as of September 29, 2005, shall not exceed an aggregate of 4,457,995 shares 1,270,720 of the Borrower’s Common Stock Ordinary Shares (subject to appropriate adjustment for stock splits, stock dividends, or other similar recapitalizations affecting the Common Stock) (the “Maximum Common Stock Issuance”Ordinary Shares), unless the issuance of shares hereunder in excess of the Maximum Common Stock Issuance shall first be approved by the Borrower’s shareholders, if required by applicable law or regulation. If at any point in time and from time to time the number of shares of Common Stock issued pursuant to the terms of this Note or the Warrant, would exceed the Maximum Common Stock Issuance but for this Section 3.2, the Borrower shall promptly call a shareholders meeting to solicit shareholder approval for the issuance of the shares of Common Stock hereunder in excess of the Maximum Common Stock Issuance.

Conversion Limitation. Notwithstanding anything contained herein to the contrary, the Holder shall not be entitled to convert exercise pursuant to the terms of the this Note an amount that would (a) be convertible into that number of shares of Common Stock which, when added to which would exceed the difference between the number of shares of Common Stock otherwise beneficially owned by such Holder including those or issuable upon exercise of warrants any option or warrant held by such Holder would exceed and 4.99% of the outstanding shares of Common Stock of the Borrower at the time of conversion or (b) exceed thirty-five percent (35%) of the aggregate dollar trading volume of the Common Stock for the twenty-two (22) day trading period immediately preceding delivery of a Notice of Conversion to the BorrowerCompany. For the purposes of the immediately preceding sentence, beneficial ownership shall be determined in accordance with Section 13(d) of the Exchange Act and Regulation 13d-3 thereunder. The conversion limitation described in this Section 3.2 2.2 shall automatically become null and void without any notice to Borrower the Company upon the occurrence and during the continuance beyond any applicable grace period of an Event of Default which has had, or could reasonably be expected to have a Material Adverse EffectDefault, or upon 75 65 days prior notice to the BorrowerCompany, except that at no time shall the beneficial ownership exceed 19.99% of the Common Stock. Notwithstanding anything contained herein to the contrary, the number of shares of Common Stock issuable by the Borrower Company and acquirable by the Holder at a price below $1.75 1.10 per share pursuant to the terms of this Note, the Security Agreement, any Ancillary Agreement, the Secured Convertible Term Note made by the Company to the Holder dated the date hereof (as amended, modified and/or supplemented from time to time, the "TERM NOTE"), the Purchase Agreement (as defined in the Term Note) or any Related Agreement, Agreement (as defined in the Term Note) shall not exceed an aggregate of 4,457,995 754,492 shares of the Borrower’s Company's Common Stock (subject to appropriate adjustment for stock splits, stock dividends, or other similar recapitalizations affecting the Common Stock) (the “Maximum Common Stock Issuance”"MAXIMUM COMMON STOCK ISSUANCE"), unless the issuance of shares hereunder in excess of the Maximum Common Stock Issuance shall first be approved by the Borrower’s Company's shareholders, if required by applicable law or regulation. If at any point in time and from time to time the number of shares of Common Stock issued pursuant to the terms of this Note Note, the Security Agreement, any Ancillary Agreement, the Term Note, the Purchase Agreement or any Related Agreement together with the Warrantnumber of shares of Common Stock that would then be issuable by the Company to the Holder in the event of a conversion or exercise pursuant to the terms of this Note, the Security Agreement, any Ancillary Agreement, the Term Note, the Purchase Agreement or any Related Agreement would exceed the Maximum Common Stock Issuance but for this Section 3.2paragraph, the Borrower Company shall promptly call a shareholders meeting to solicit shareholder approval for the issuance of the shares of Common Stock hereunder in excess of the Maximum Common Stock Issuance. Shares of Common Stock which may not be issued due to the limitations set forth in this Section 2.2 shall not be deemed to be Conversion Shares under this Note unless and until their issuance is otherwise permitted as contemplated herein.

Conversion Limitation. Notwithstanding anything contained herein to the contrary, the Holder shall not be entitled to convert pursuant to the terms of the this Note an amount that would (a) be convertible into that number of shares of Common Stock which, when added to the number of shares of Common Stock otherwise beneficially owned by such Holder including those issuable upon exercise of warrants held by such Holder would exceed 4.99% of the outstanding shares of Common Stock of the Borrower at the time of conversion or (b) exceed thirty-five percent (35%) of the aggregate dollar trading volume of the Common Stock for the twenty-two (22) day trading period immediately preceding delivery of a Notice of Conversion to the Borrowerconversion. For the purposes of the immediately preceding sentence, beneficial ownership shall be determined in accordance with Section 13(d) of the Exchange Act and Regulation 13d-3 thereunder. The conversion limitation described in the first sentence of this Section 3.2 shall automatically become null and void without any notice to Borrower upon the occurrence and during the continuance beyond any applicable grace period of an Event of Default which has had, or could reasonably be expected to have a Material Adverse EffectDefault, or upon 75 days prior notice to the Borrower, except that at no time shall the beneficial ownership exceed 19.99% of the Common Stock. Notwithstanding anything contained herein to the contrary, the number of shares of Common Stock issuable by the Borrower Company and acquirable by the Holder at a price below $1.75 per share pursuant to the terms of this Note, the Purchase Agreement Agreement, the Warrant (as defined in the Purchase Agreement), the Warrant issued to the Holder on May 5, 2005 (as amended, modified or supplemented from time to time, the “Additional Warrant”) or any Related Agreement (as defined in the Purchase Agreement) at a weighted average issue price of below $0.47 taking into account all such issuances, shall not exceed an aggregate of 4,457,995 6,491,440 shares of the BorrowerCompany’s Common Stock (subject to appropriate adjustment for stock splits, stock dividends, or other similar recapitalizations affecting the Common Stock) (the “Maximum Common Stock Issuance”), unless the issuance of shares hereunder in excess of the Maximum Common Stock Issuance shall first be approved by the BorrowerCompany’s shareholders, if required by applicable law or regulation. If at any point in time and from time to time the number of shares of Common Stock issued pursuant to the terms of this Note or Note, the Purchase Agreement, the Warrant, the Additional Warrant or any Related Agreement, together with the number of shares of Common Stock that would then be issuable by the Borrower to the Holder in the event of a conversion or exercise pursuant to the terms of this Note, the Purchase Agreement, the Warrant, the Additional Warrant or any Related Agreement, would exceed the Maximum Common Stock Issuance but for this Section 3.2, the Borrower shall promptly call a shareholders meeting to solicit shareholder approval for the issuance of the shares of Common Stock hereunder in excess of the Maximum Common Stock Issuance.”

Conversion Limitation. Notwithstanding anything contained herein to the contrary, the Holder shall not be entitled to convert pursuant to the terms of the this Note an amount that would (a) be convertible into that number of shares of Common Stock which, when added to the number of shares of Common Stock otherwise beneficially owned by such Holder including those issuable upon exercise of warrants held by such Holder Conversion Shares which would exceed the difference between (i) 4.99% of the outstanding shares of Common Stock and (ii) the number of the Borrower at the time shares of conversion or (b) exceed thirty-five percent (35%) of the aggregate dollar trading volume of the Common Stock for beneficially owned by the twenty-two (22) day trading period immediately preceding delivery of a Notice of Conversion to the BorrowerHolder. For the purposes of the immediately preceding sentence, beneficial ownership shall be determined in accordance with Section 13(d) of the Exchange Act and Regulation 13d-3 thereunder. The conversion Conversion Shares limitation described in the first sentence of this Section 3.2 shall automatically become null and void without any following notice to Borrower any Company upon the occurrence and during the continuance beyond any applicable grace period of an Event of Default which has had, or could reasonably be expected to have a Material Adverse EffectDefault, or upon 75 days prior notice to the BorrowerParent, except that at no time shall the beneficial ownership number of shares of Common Stock beneficially owned by the Holder exceed 19.99% of the outstanding shares of Common Stock. Notwithstanding anything contained herein to the contrary, the number of shares of Common Stock issuable by the Borrower Parent and acquirable by the Holder at a price below $1.75 0.91 per share pursuant to the terms of this Note, the Purchase Security Agreement or any Related other Ancillary Agreement, shall not exceed an aggregate of 4,457,995 8,738,173 shares of the Borrower’s Common Stock (subject to appropriate adjustment for stock splits, stock dividends, or other similar recapitalizations affecting the Common Stock) (the “Maximum Common Stock Issuance”), unless the issuance of shares Common Stock hereunder in excess of the Maximum Common Stock Issuance shall first be approved by the BorrowerParent’s shareholders, if required by applicable law or regulation. If at any point in time and from time to time the number of shares of Common Stock issued pursuant to the terms of this Note Note, the Security Agreement or any other Ancillary Agreement, together with the Warrantnumber of shares of Common Stock that would then be issuable by the Parent to the Holder in the event of a conversion or exercise pursuant to the terms of this Note, the Security Agreement or any other Ancillary Agreement, would exceed the Maximum Common Stock Issuance but for this Section 3.2, the Borrower Parent shall promptly call a shareholders meeting to solicit consider the shareholder approval approval. The Holder shall not be entitled to vote its shares for any proposal for the issuance of the shares of Common Stock hereunder in excess of the Maximum Common Stock Issuance. Notwithstanding anything contained herein to the contrary, the provisions of this Section 3.2 are irrevocable and may not be waived by the Holder or any Company.

Conversion Limitation. Notwithstanding anything contained herein to the contrary, the Holder shall not be entitled to convert pursuant to the terms of the Note an amount that would (a) be convertible into that number of shares of Common Stock which, when added to the number of shares of Common Stock otherwise beneficially owned by such Holder including those issuable upon exercise of warrants held by such Holder would exceed 4.99% of the outstanding shares of Common Stock of the Borrower at the time of conversion or (b) exceed thirty-five percent (35%) of the aggregate dollar trading volume of the Common Stock for the twenty-two (22) day trading period immediately preceding delivery of a Notice of Conversion to the Borrowerconversion. For the purposes of the immediately preceding sentence, beneficial ownership shall be determined in accordance with Section 13(d) of the Exchange Act and Regulation 13d-3 thereunder. The conversion limitation described in this Section 3.2 shall automatically become null and void without any notice to Borrower upon the occurrence and during the continuance beyond any applicable grace period of an Event of Default which has had, or could reasonably be expected to have a Material Adverse EffectDefault, or upon 75 days prior notice to the Borrower, except that at no time shall the beneficial ownership exceed 19.998.33% of the Common Stock. Notwithstanding anything contained herein to the contrary, the number of shares of Common Stock issuable by the Borrower and acquirable by the Holder at a price below $1.75 per share pursuant to the terms of this Note, the Purchase Agreement or any Related AgreementAgreement at a price below the market price of the Common Stock on the date of this Note, shall not exceed an aggregate of 4,457,995 shares 8.33% of the Borrower’s Common Stock shares outstanding (subject to appropriate adjustment for stock splits, stock dividends, or other similar recapitalizations affecting the Common Stock) (the “"Maximum Common Stock Issuance”"), unless the issuance of shares hereunder in excess of the Maximum Common Stock Issuance shall first be approved by the Borrower’s shareholders, if required by applicable law or regulation. If at any point in time and from time to time the number of shares of Common Stock issued pursuant to the terms of this Note Note, the Purchase Agreement or any Related Agreement, together with the Warrantnumber of shares of Common Stock that would then be issuable by the Borrower to the Holder in the event of a conversion or exercise pursuant to the terms of this Note, the Purchase Agreement or any Related Agreement, would exceed the Maximum Common Stock Issuance but for this Section 3.2, the Borrower shall promptly call a shareholders meeting to solicit shareholder approval for the issuance of the shares of Common Stock hereunder in excess of the Maximum Common Stock Issuance.

Conversion Limitation. Notwithstanding anything contained herein to the contrary, the Holder shall not be entitled to convert pursuant to the terms of the this Note an amount that would (a) be convertible into that number of shares of Common Stock Conversion Shares which, when added to the number of shares of Common Stock otherwise beneficially owned by such Holder including those issuable upon exercise of warrants held by such Holder would exceed 4.99% of the outstanding shares of Common Stock of the Borrower at the time of conversion or (b) exceed thirty-five percent (35%) of the aggregate dollar trading volume of the Common Stock for the twenty-two (22) day trading period immediately preceding delivery of a Notice of Conversion to the Borrowerconversion. For the purposes of the immediately preceding sentence, beneficial ownership shall be determined in accordance with Section 13(d) of the Exchange Act and Regulation 13d-3 thereunder. The conversion Conversion Shares limitation described in this Section 3.2 shall automatically become null and void without any notice to Borrower upon the occurrence and during the continuance beyond any applicable grace period of an Event of Default which has had, or could reasonably be expected to have a Material Adverse EffectDefault, or upon 75 days prior notice to the Borrower, except that at no time shall the beneficial ownership exceed 19.99% of the Common Stock. Notwithstanding anything contained herein to the contrary, the number of shares of Common Stock issuable by the Borrower and acquirable by the Holder at a price below $1.75 1.80 per share pursuant to the terms of this Notethe Secured Convertible Minimum Borrowing Notes, Secured Revolving Note and/or Warrants issued by the Purchase Borrower to the Holder pursuant to that certain Security Agreement or any Related Agreementdated December 3, 2003 (the “December Transaction Documents”), shall not exceed an aggregate of 4,457,995 5,595,705 shares of the Borrower’s Common Stock Stock, (subject to appropriate adjustment for stock splits, stock dividends, or other similar recapitalizations affecting the Common Stock) (the “Maximum Common Stock Issuance”), unless the issuance of shares hereunder in excess of the Maximum Common Stock Issuance shall first be approved by the Borrower’s shareholders, if required by applicable law or regulation. If at any point in time and from time to time the number of shares of Common Stock issued pursuant to the terms of this Note the December Transaction Documents, together with the number of shares of Common Stock that would then be issuable by the Borrower to the Holder in the event of a conversion or exercise pursuant to the Warrantterms of the December Transaction Documents, would exceed the Maximum Common Stock Issuance but for this Section 3.2Section, the Borrower shall promptly call a shareholders meeting to solicit shareholder approval for the issuance of the shares of Common Stock hereunder in excess of the Maximum Common Stock Issuance.