Common use of Failure Payments Clause in Contracts

Failure Payments. The Company understands that any Event of Failure (as defined above) could result in economic loss to the Holder. In the event that any Event of Failure occurs, as compensation to the Holder for such loss, the Company agrees to pay (as liquidated damages and not as a penalty) to the Holder payments (“Failure Payments”) at a rate of 18% per annum (or the maximum rate permitted by applicable law, whichever is less) of the Black-Scholes value (as defined below) of the remaining unexercised portion of this Warrant on the date of such request (as recalculated on the first business day of each month thereafter for as long as Failure Payments shall continue to accrue), which shall accrue daily from the date of such Event of Failure through and including the date of payment in full. The Company shall pay any payments incurred under this Section in cash or cash equivalent upon demand or, if not demanded sooner, within five business (5) days of the end of each calendar month. Failure Payments are in addition to any Shares that the Holder is entitled to receive upon Exercise of this Warrant. Notwithstanding anything to the contrary herein, to the extent that any Failure Payments accrue solely as a result of a Registration Failure for failure to obtain timely initial effectiveness of the Registration Statement (“INITIAL EFFECTIVENESS FAILURE PAYMENTS”), such Initial Effectiveness Failure Payments shall cease to accrue at any time when the Holder is eligible, in the Company’s reasonable opinion, to resell the shares that would be issuable upon a Cashless Exercise of its Warrant, pursuant to Rule 144, subject to the volume limitations of such Rule. For purposes hereof, the “Black-Scholes” value of a Warrant shall be determined by use of the Black Scholes Option Pricing Model reflecting (A) a risk-free interest rate corresponding to the U.S. Treasury rate for a period equal to the remaining term of this Warrant as of such date of request and (B) an expected volatility equal to the greater of 60% and the 100 day volatility obtained from the HVT function on Bloomberg.

Failure Payments. The Company understands that any Event of Failure (as defined above) could result in economic loss to the Holder. In the event that any Event of Failure occurs, as compensation to the Holder for such loss, the Company agrees to pay (as liquidated damages and not as a penalty) to the Holder payments (“Failure PaymentsFAILURE PAYMENTS”) at a rate of 18% per annum (or the maximum rate permitted by applicable law, whichever is less) of the Black-Scholes value (as defined below) of the remaining unexercised portion of this Warrant on the date of such request (as recalculated on the first business day of each month thereafter for as long as Failure Payments shall continue to accrue), which shall accrue daily from the date of such Event of Failure through until the Event of Failure is cured, accruing daily and including compounded monthly. For purposes of clarification, it is agreed and understood that Failure Payments shall continue to accrue following any Event of Default until the date of payment applicable Default Amount is paid in full. Notwithstanding the above, in the event that the Company (i) has, by the Filing Deadline (as defined the Registration Rights Agreement) filed a Registration Statement (as defined in the Registration Rights Agreement) covering the number of shares required by the Registration Rights Agreement, and (ii) has responded in writing to any comments to the Registration Statement that the Company has received from the SEC, within seven (7) Business Days of such receipt, and nevertheless the SEC has not declared effective a Registration Statement covering the full number of Warrant Shares issuable upon exercise of the Warrants by the Effectiveness Deadline (as defined in the Registration Rights Agreement) (items (i) and (ii) immediately above are collectively referred to herein as the “Good Faith Filing Requirements”) then, the Failure Payments attributable to such late Registration Effectiveness shall be reduced from 18% to 15% (calculated as set forth above). The Company shall pay any payments incurred under this Section in cash or cash equivalent upon demand or, if not demanded sooner, within five business (5) days of the end of each calendar month. Failure Payments are in addition to any Shares that the Holder is entitled to receive upon Exercise of this Warrant. Notwithstanding anything to the contrary herein, to the extent that any Failure Payments accrue solely as a result of a Registration Failure for failure to obtain timely initial effectiveness of the Registration Statement (“INITIAL EFFECTIVENESS FAILURE PAYMENTS”), such Initial Effectiveness Failure Payments shall cease to accrue at any time when the Holder is eligible, in the Company’s reasonable opinion, to resell the shares that would be issuable upon a Cashless Exercise of its Warrant, pursuant to Rule 144, subject to the volume limitations of such Rule. For purposes hereof, the “Black-Scholes” value of a Warrant shall be determined by use of the Black Scholes Option Pricing Model reflecting (A) a risk-free interest rate corresponding to the U.S. Treasury rate for a period equal to the remaining term of this Warrant as of such date of request and (B) an expected volatility equal to the greater of 60% and the 100 day volatility obtained from the HVT function on Bloomberg.