Common use of Automatic Conversion Clause in Contracts

Automatic Conversion. Subject to Section 5 below and, at the Company’s election and request, Holder’s reaffirmation of Holder’s representations and warranties under Section 3 of the Convertible Note Purchase Agreement, the principal amount of this Note (and all interest accrued on this Note at the option of the Payor) shall be converted into the number of shares of common stock as follows: (a) In the event of a next equity financing by the Company in one transaction or series of related transactions which raises an aggregate amount of at least One Million Five Hundred Thousand Dollars ($1,500,000) (the “Next Equity Financing”), the principal amount on this Note shall automatically be converted (regardless of whether or not the Note is surrendered to Payor) into the equity securities issued in the Payor’s Next Equity Financing (the “Next Equity Financing Stock”). Any accrued interest outstanding at the time of the conversion shall be paid in cash by the Company. This Note shall convert into the number of shares at the time of the “Next Equity Financing” equals to ___,000 shares of the Company’s Common Stock at an exercise price of $0.60 per share (the “Exercise Price”) This Note shall be deemed automatically cancelled immediately upon such conversion. As a condition precedent to the issuance of the Next Equity Financing Stock to Holder upon such conversion, Holder shall execute and deliver such agreements, instruments and other documents as are executed and delivered by the other investors in connection with their purchase of the Next Equity Financing Stock. (b) In the event of the “Company’s Sale”, defined below, at the option of Payor, the principal hereunder and, at the option of the Payor, shall automatically be converted (regardless of whether or not the Note is surrendered to Payor) into the number of shares (the “Company’s Sale Stock”) equals to ____,000 shares of the Company’s Common Stock at an exercise price of $0.60 per share (the “Exercise Price”). This Note shall be deemed automatically cancelled immediately upon such conversion.

Automatic Conversion. Subject to Section 5 below and(a) Immediately upon the consummation of a Qualified IPO, at the Company’s election and request, Holder’s reaffirmation each share of Holder’s representations and warranties under Section 3 of the Convertible Note Purchase Agreement, the principal amount of this Note (and all interest accrued on this Note at the option of the Payor) Exchangeable Preferred Stock shall automatically be converted into the right to receive (such conversion, a “ERPS Conversion Event”): (i) an amount of cash equal to (I) the ERPS Liquidation Value; multiplied by (II) the Discount Ratio; multiplied by (III) 0.85 and (ii) that number of shares of Common Stock (valued at the initial Qualified IPO offering price to the public) equal to (I) the ERPS Liquidation Value; multiplied by (II) the Discount Ratio; multiplied by (III) 0.15; provided, however no fractional shares of Common Stock shall be issued upon an ERPS Conversion Event but, in lieu thereof, the holder shall be entitled to receive an amount of cash equal to the fair market value of a share of Common Stock (valued at the initial Qualified IPO offering price to the public) at the time of such ERPS Conversion Event multiplied by such fractional amount (rounded to the nearest cent). (b) The Corporation shall promptly notify the holders of Exchangeable Preferred Stock in writing of the occurrence of an ERPS Conversion Event; provided, that, the Corporation’s failure to provide such notice, or its failure to be received, shall not alter or affect the automatic conversion of the Exchangeable Preferred Stock occurring in connection therewith. In addition to any information that is required by law, such notice shall state: (i) the date of the ERPS Conversion Event; (ii) the amount of cash per share to be paid to each holder of shares of Exchangeable Preferred Stock in connection with the ERPS Conversion Event; (iii) the number of shares of common stock Common Stock per share of Exchangeable Preferred Stock to be issued to each holder of shares of Exchangeable Preferred Stock in connection with the ERPS Conversion Event; (iv) the place or places where the certificates representing shares of Exchangeable Preferred Stock are to be surrendered (or a Statement of Loss as follows:defined in paragraph 8(c) of this Section 5.4 in lieu thereof) in connection with the ERPS Conversion Event; and (v) that payment of the foregoing cash sum (including any payment for fractional shares) and issuance of Common Stock will be made upon presentation and surrender of certificates representing shares of the Exchangeable Preferred Stock (or a Statement of Loss in lieu thereof) without any other obligation or deliverable required of any holder of shares of Exchangeable Preferred Stock in order to receive such cash and Common Stock. (ac) In Upon an ERPS Conversion Event, the event of a next equity financing outstanding Exchangeable Preferred Stock shall be converted automatically without any further action by the Company in one transaction holders thereof or series of related transactions which raises an aggregate amount of at least One Million Five Hundred Thousand Dollars ($1,500,000) (by the “Next Equity Financing”), the principal amount on this Note shall automatically be converted (regardless of Corporation and whether or not the Note is certificates evidencing such Exchangeable Preferred Stock are surrendered to Payor) into the equity securities issued in Corporation or its transfer agent upon the Payor’s Next Equity Financing occurrence of an ERPS Conversion Event; provided, that, the Corporation shall not be obligated to pay cash payable or issue certificates evidencing the Common Stock issuable upon such ERPS Conversion Event unless the certificates evidencing such Exchangeable Preferred Stock are delivered to the Corporation or its transfer agent, or the holder notifies the Corporation or its transfer agent that such certificates have been lost, stolen or destroyed and executes an agreement reasonably satisfactory to the Corporation solely to indemnify the Corporation from any claim that may be made against the Corporation on account of the alleged loss, theft or destruction of such certificate (the a “Next Equity Financing StockStatement of Loss”). Any accrued interest outstanding . (d) Upon receipt of notice of the occurrence of an ERPS Conversion Event, the holders of Exchangeable Preferred Stock shall promptly surrender the certificates evidencing such shares (or a Statement of Loss in lieu thereof) at the time office of the conversion Corporation or any transfer agent for the Exchangeable Preferred Stock. Thereupon, (i) there shall be paid issued and delivered to such holder promptly at such office and in cash by its name as shown on such surrendered certificate or certificates or on the Company. This Note shall convert into Statement of Loss in lieu thereof, a certificate or certificates for the number of shares of Common Stock, as applicable, to which such holder is entitled in connection with such ERPS Conversion Event; and (ii) the cash consideration described in paragraph 8(a) of this Section 5.4. (e) Any Common Stock issued upon an ERPS Conversion Event shall be validly issued, fully paid and non-assessable. The Corporation shall endeavor to take any action necessary to ensure that any Common Stock issued upon an ERPS Conversion Event are freely transferable and not subject to any resale restrictions under the Securities Act of 1933, as amended (the “Securities Act”) or any applicable state securities or blue sky laws (in each case other than any shares of Common Stock that may be held by an “affiliate” (as defined in Rule 144 promulgated under the Securities Act) of the Corporation). No share of Common Stock issuable or issued to the holders of Exchangeable Preferred Stock in connection with an ERPS Conversion Event under this paragraph 8 shall be encumbered by, or subject to, any agreement, term or condition imposed by the Corporation, any underwriter or other agent of the Corporation restricting: (i) the sale, tradability, distribution, pledge or other disposition of such Common Stock; (ii) the ability to offer to sell, trade, distribute, pledge or dispose such Common Stock; (iii) the ability to contract to sell, trade, distribute, pledge or dispose (including any short sale) such Common Stock; and/or (iv) the right to grant any option to purchase such Common Stock or enter into any hedging or similar transaction with the same economic effect as a sale, trade, distribution, pledge or disposition of such Common Stock. Without limiting the generality of the foregoing, no holder of the shares of Common Stock that are issuable or issued in connection with an ERPS Conversion Event shall be subject to any lock-up agreement or market standoff agreement imposed by the Corporation, any underwriter or other agent of the Corporation with respect to such shares. The Corporation shall use its best efforts to list the Common Stock required to be delivered upon an ERPS Conversion Event on the Nasdaq Stock Market at or prior to the time of the “Next Equity Financing” equals to ___,000 shares of the Company’s Common Stock at an exercise price of $0.60 per share (the “Exercise Price”) This Note shall be deemed automatically cancelled immediately upon such conversion. As a condition precedent to the issuance of the Next Equity Financing Stock to Holder upon such conversion, Holder shall execute and deliver such agreements, instruments and other documents as are executed and delivered by the other investors in connection with their purchase of the Next Equity Financing Stockdelivery. (b) In the event of the “Company’s Sale”, defined below, at the option of Payor, the principal hereunder and, at the option of the Payor, shall automatically be converted (regardless of whether or not the Note is surrendered to Payor) into the number of shares (the “Company’s Sale Stock”) equals to ____,000 shares of the Company’s Common Stock at an exercise price of $0.60 per share (the “Exercise Price”). This Note shall be deemed automatically cancelled immediately upon such conversion.

Automatic Conversion. Subject In the event that a Lender has elected to Section 5 below anddemand the repayment of its applicable amount of the Loan Amount in accordance with subsection (c)(i) above, at and the Company does not have available cash for the repayment of the outstanding Loan Amount due to such Lender or any part thereof (as shall be determined by the Company’s election and requestBoard of Directors), Holder’s reaffirmation of Holder’s representations and warranties under Section 3 of the Convertible Note Purchase Agreement, the principal amount of this Note (and all interest accrued on this Note at the option of the Payor) shall be converted into the number of shares of common stock as follows: (a) In the event of a next equity financing by such Loan Amount or any part thereof which the Company in one transaction or series of related transactions which raises an aggregate amount of at least One Million Five Hundred Thousand Dollars ($1,500,000) (the “Next Equity Financing”)is unable to repay, the principal amount on this Note shall automatically be converted into A-1 Shares based on the A-1 Price or, in case the Company has consummated a New Equity financing (regardless of whether or not the Note is surrendered to Payor) as defined above), into the equity securities issued in the Payor’s Next Equity Financing (the “Next Equity Financing Stock”). Any accrued interest outstanding at the time of the conversion shall be paid in cash by the Company. This Note shall convert into the number of shares at the time of the “Next Equity Financing” equals to ___,000 shares of the Company’s Common Stock equity securities which have been issued and sold at an exercise the closing of such New Equity Financing, unless the Lender has decided to defer the Maturity Date of such Loan Amount or any part thereof which the Company is unable to repay. In case of conversion of the Loan Amount either under this subsection (ii) or subsection (i) above into the Company’s equity securities which have been issued and sold at the closing of a New Equity Financing and if more than one class or series of equity securities are issued as part of the New Equity Financing, then the Lenders shall be entitled to the most favorable class or series of equity securities issued in such financing, and in the event that the New Equity Financing includes issuances of shares of the same class at different prices per share, then the Lenders shall be entitled to receive the lowest of such prices. The number of shares to be issued to each Lender upon such conversion shall be equal to the quotient obtained by dividing (x) the outstanding Loan Amount (and any Interest accrued thereon) provided by such Lender by (y) the price of $0.60 per share of the equity securities paid by investors in the New Equity Financing, rounded to the nearest whole share, and such shares shall be of the same class and have such rights (including with respect to original issuance price, liquidation preference, conversion price and with respect to any other securities, warrants or other rights issued or provided as part of the “Exercise Price”New Equity Financing) This Note as those of the New Equity Financing, and the Lenders shall be deemed automatically cancelled immediately upon such conversion. As a condition precedent to be investors in the issuance of the Next New Equity Financing Stock to Holder upon such conversion, Holder shall execute and deliver such agreements, instruments and other documents as are executed and delivered by the other investors in connection with their purchase of the Next Equity Financing Stock. (b) In the event of the “Company’s Sale”, defined below, at the option of Payor, the principal hereunder and, at the option of the Payor, shall automatically be converted (regardless of whether or not the Note is surrendered to Payor) into the number of shares (the “Company’s Sale Stock”) equals to ____,000 shares of the Company’s Common Stock at an exercise price of $0.60 per share (the “Exercise Price”). This Note shall be deemed automatically cancelled immediately upon such conversion.for all purposes

Automatic Conversion. Subject The Company may elect to automatically convert (“Automatic Conversion”) the Securities on or prior to maturity if the Daily Market Price of the Common Stock has exceeded 150% of the Conversion Price for at least 20 Trading Days out of the 30 consecutive Trading Days ending within five Trading Days prior to the date of (the “Notice Date”) the notice of automatic conversion (the “Automatic Conversion Notice”). In order to effect an Automatic Conversion, the Company shall give to the holder of each Security to be so converted an Automatic Conversion Notice. Such Automatic Conversion Notice shall state: (i) the date on which the Securities identified in the Automatic Conversion Notice will be converted (the “Automatic Conversion Date”); (ii) the CUSIP number or numbers of such Securities; (iii) the place or places where such Securities in certificated form are to be surrendered for exchange of the shares of Common Stock to be issued upon conversion thereof; (iv) the lowest Daily Market Price of the Common Stock for at least 20 Trading Days out of the 30 consecutive Trading Days ending within five Trading Days prior to the giving of the Automatic Conversion Notice; and (v) the Conversion Price at which such Automatic Conversion is to be effected. If the Company elects to effect an Automatic Conversion Notice in respect of fewer than all the Securities, the Automatic Conversion Notice relating to such Automatic Conversion shall reference this Section 5 below and5.15 and shall identify the Securities to be converted. In case any Security is to be converted in part only, the Automatic Conversion Notice relating thereto shall state the portion of the principal amount thereof to be converted and shall state that on and after the date fixed for conversion, upon surrender of such Security, a new Securities in principal amount equal to the portion thereof not converted will be issued. In the case where the Company elects to effect an Automatic Conversion in respect of any portion of the Security evidenced by the Global Security, the beneficial interests in the Global Security to be subject to such Automatic Conversion shall be selected by the Depositary in accordance with the applicable standing procedures of the Depositary’s book-entry conversion program, and in connection with such Automatic Conversion the Depositary shall arrange in accordance with such procedures for appropriate endorsements and transfer documents, if required by the Company or the Trustee or conversion agent, and payment of any transfer taxes if required hereunder. The Company or, at the Company’s election request and request, Holder’s reaffirmation of Holder’s representations and warranties under Section 3 expense of the Convertible Note Purchase AgreementCompany, the principal amount of this Note (and all interest accrued on this Note at Trustee, upon ten Business Days’ notice prior to the option date of the Payorrequested mailing (or upon such shorter notice period as may be reasonably acceptable to the Trustee) shall give to each holder of Securities to be converted into in an Automatic Conversion, at its last address as the number same shall appear on the Registrar, an Automatic Conversion Notice in respect thereof. The date of shares Automatic Conversion of common stock as follows: (a) In the event of a next equity financing Securities shall be not less than 7 days nor more than 15 days from the Notice Date. Such Automatic Conversion Notice shall be irrevocable and shall be mailed by first class mail and, if mailed in the Company in one transaction or series of related transactions which raises an aggregate amount of at least One Million Five Hundred Thousand Dollars ($1,500,000) (the “Next Equity Financing”)manner herein provided, the principal amount on this Note shall automatically be converted (regardless of conclusively presumed to have been given, whether or not the Note is surrendered holder receives it. In any case, failure to Payor) into the equity securities issued give such notice or any defect in the Payor’s Next Equity Financing (notice to the “Next Equity Financing Stock”). Any accrued interest outstanding at holder of any Security designated for Automatic Conversion in whole or in part shall not affect the time validity of the conversion proceedings for the Automatic Conversion of any such Security. The Company shall be paid in cash also deliver a copy of each Automatic Conversion Notice given by the Company. This Note shall convert into the number of shares at the time of the “Next Equity Financing” equals to ___,000 shares of the Company’s Common Stock at an exercise price of $0.60 per share (the “Exercise Price”) This Note shall be deemed automatically cancelled immediately upon such conversion. As a condition precedent it to the issuance of the Next Equity Financing Stock to Holder upon such conversion, Holder shall execute and deliver such agreements, instruments and other documents as are executed and delivered by the other investors in connection with their purchase of the Next Equity Financing StockTrustee. (b) In the event of the “Company’s Sale”, defined below, at the option of Payor, the principal hereunder and, at the option of the Payor, shall automatically be converted (regardless of whether or not the Note is surrendered to Payor) into the number of shares (the “Company’s Sale Stock”) equals to ____,000 shares of the Company’s Common Stock at an exercise price of $0.60 per share (the “Exercise Price”). This Note shall be deemed automatically cancelled immediately upon such conversion.

Automatic Conversion. Subject (i) Upon the earlier of (x) immediately prior to Section 5 below and, at the Company’s election consummation of a Qualified IPO and request, Holder’s reaffirmation of Holder’s representations and warranties under Section 3 (y) the receipt of the Convertible Note Purchase Agreement, the principal amount of this Note (and all interest accrued on this Note at the option approval of the Payor) holders of 66 2/3% of the then outstanding Preference Shares (each an (“Automatic Conversion Date”), all of the Preference Shares shall be automatically converted into the number of shares fully paid and non-assessable Ordinary Shares equal to the product of common stock (1) the number of Preference Shares being converted, multiplied by (2) the Conversion Ratio calculated as follows: (a) In of the event date of a next equity financing by such automatic conversion and the register of members of the Company in one transaction or series of related transactions which raises an aggregate amount of at least One Million Five Hundred Thousand Dollars ($1,500,000) (shall be updated to reflect the “Next Equity Financing”), conversion. At the principal amount on this Note shall automatically be converted (regardless of whether or not the Note is surrendered to Payor) into the equity securities issued in the Payor’s Next Equity Financing (the “Next Equity Financing Stock”). Any accrued interest outstanding at the time option of the conversion Company, any accrued and unpaid dividends as of the Automatic Conversion Date in respect to the Preference Shares being converted shall (i) be added to the Accreted Value, (ii) be paid in cash by to the holder of such Preference Shares or (iii) be paid in cash or added to the Accreted Value in any combination thereof. For the avoidance of doubt, for purposes of calculating the Conversion Ratio in connection with any automatic conversion, the Accreted Value of the Preference Shares that are being converted shall include the amount of any dividends which have been accreted, compounded and added to the Preference Share Issue Amount pursuant to clause (b) of the definition of “Accreted Value” through the last Dividend Payment Date. (ii) Immediately upon conversion as provided in clause 13(b)(i), each holder of Preference Shares shall be registered in the Company’s register of members as the holder of record of the Ordinary Shares issuable upon conversion of such holder’s Preference Shares, notwithstanding that certificates evidencing the Ordinary Shares shall not then actually be delivered to such person. This Note Upon written notice and instructions from the Company, each holder of Preference Shares so converted shall convert into promptly surrender to the Company at its principal place of business (or at such other office or agency of the Company as the Company may designate by such notice to the holders of Preference Shares) certificates representing the Preference Shares so converted. As promptly as practicable after such conversion, the Company shall deliver to the holder of such Preference Shares so surrendered, certificate(s) evidencing the number of shares at the time of the “Next Equity Financing” equals fully paid and non-assessable Ordinary Shares into which such Preference Shares are entitled to ___,000 shares of the Company’s Common Stock at an exercise price of $0.60 per share (the “Exercise Price”) This Note shall be deemed automatically cancelled immediately upon such conversion. As a condition precedent to the issuance of the Next Equity Financing Stock to Holder upon such conversion, Holder shall execute and deliver such agreements, instruments and other documents as are executed and delivered by the other investors in connection with their purchase of the Next Equity Financing Stockconverted. (b) In the event of the “Company’s Sale”, defined below, at the option of Payor, the principal hereunder and, at the option of the Payor, shall automatically be converted (regardless of whether or not the Note is surrendered to Payor) into the number of shares (the “Company’s Sale Stock”) equals to ____,000 shares of the Company’s Common Stock at an exercise price of $0.60 per share (the “Exercise Price”). This Note shall be deemed automatically cancelled immediately upon such conversion.

Automatic Conversion. Subject to Section 5 below andOn and after the Initial Convertibility Date, at each share of Preferred Stock shall automatically be converted into shares of Common Stock (an "Automatic Conversion"), based on the Company’s then-effective applicable Conversion Price (A) five (5) Trading Days following the affirmative election and request, Holder’s reaffirmation of Holder’s representations and warranties under Section 3 of the Convertible Note Purchase AgreementRequired Holders, or (B) provided that there is no Equity Conditions Failure, five (5) Trading Days following (I) the principal amount closing of this Note (and all interest accrued an underwritten public offering on this Note at the option a firm commitment basis with a nationally recognized underwriter of Common Stock of the PayorCompany pursuant to an effective registration statement under the Securities Act, with an anticipated aggregate offering price to the public of not less than $20,000,000 (before deduction of underwriters commissions, fees and expenses) at a price per share that equals or exceeds $1.61 (as adjusted for any stock dividend, stock split, reverse stock split, stock combination, reclassification or similar transaction after the Subscription Date), as determined on the applicable date of determination, that results in the listing of Common Stock of the Company on a national securities exchange and (II) the redemption in full of those certain senior secured notes issued by Inventergy, Inc., a Delaware corporation, on May 10, 2013. Upon the occurrence of either of the events specified in this Section 2(f), all of the outstanding shares of Preferred Stock shall be converted automatically without any further action by the holders of such shares and whether or not the certificates representing such shares are surrendered to the Company or the Transfer Agent; provided, however, that to the extent that an Automatic Conversion would result in a Holder and its other Attribution Parties exceeding the Maximum Percentage (as defined in Section 9(i)), if applicable, then such Holder's Series B Preferred Stock shall not be automatically converted into Common Stock (and such Holder's shares of Series B Preferred Stock shall remain outstanding and benefit from all preferences and rights set forth in this Certificate of Designations (except that the provisions set forth in Sections 4 and 12 shall immediately terminate and be of no further force and effect) to such extent (and shall not be entitled to beneficial ownership of such shares of Common Stock as a result of such Automatic Conversion (and beneficial ownership) to such extent) and the shares of Common Stock issuable upon the automatic conversion of Series B Preferred Stock to such extent shall be held in abeyance for such Holder until such time or times as conversion of such Series B Preferred Stock would not result in such Holder and its other Attribution Parties exceeding the Maximum Percentage, at which time or times such Holder shall be issued such shares of Common Stock (and any shares of Common Stock granted or issued with respect to the shares of Common Stock issuable upon conversion of Series B Preferred Stock to be held similarly in abeyance) to the same extent as if there had been no such limitation; provided, further, that the Company shall not be obligated to issue certificates evidencing the shares of Common Stock issuable upon such conversion unless the certificates evidencing such shares of Preferred Stock are either delivered to the Company or the Transfer Agent as provided below, or the Holder provides evidence that such certificates have been lost, stolen or destroyed in accordance with Section 16. Upon the occurrence of such Automatic Conversion of the Preferred Stock, the holders of Preferred Stock shall surrender the certificates representing such shares at the office of the Company or any Transfer Agent for the Preferred Stock. Thereupon, there shall be issued and delivered to such holder promptly at such office and in its name as shown on such surrendered certificate or certificates, a certificate or certificates for the number of shares of common stock as follows: (a) In Common Stock into which the event of a next equity financing by the Company in one transaction or series of related transactions which raises an aggregate amount of at least One Million Five Hundred Thousand Dollars ($1,500,000) (the “Next Equity Financing”), the principal amount on this Note shall automatically be converted (regardless of whether or not the Note is surrendered to Payor) into the equity securities issued in the Payor’s Next Equity Financing (the “Next Equity Financing Stock”). Any accrued interest outstanding at the time of the conversion shall be paid in cash by the Company. This Note shall convert into the number of shares at the time of the “Next Equity Financing” equals to ___,000 shares of Preferred Stock surrendered were convertible on the Company’s Common Stock at an exercise price of $0.60 per share (the “Exercise Price”) This Note shall be deemed automatically cancelled immediately upon date on which such conversion. As a condition precedent to the issuance of the Next Equity Financing Stock to Holder upon such conversion, Holder shall execute and deliver such agreements, instruments and other documents as are executed and delivered by the other investors in connection with their purchase of the Next Equity Financing StockAutomatic Conversion occurred. (b) In the event of the “Company’s Sale”, defined below, at the option of Payor, the principal hereunder and, at the option of the Payor, shall automatically be converted (regardless of whether or not the Note is surrendered to Payor) into the number of shares (the “Company’s Sale Stock”) equals to ____,000 shares of the Company’s Common Stock at an exercise price of $0.60 per share (the “Exercise Price”). This Note shall be deemed automatically cancelled immediately upon such conversion.

Automatic Conversion. Subject Immediately upon (a) the effectiveness of the corporation's registration statement on Form S-1 pursuant to Section 5 below andwhich Common Stock is sold to the public by the corporation (or selling stockholders, if any) in a public offering registered under the Securities Act of 1933, as amended, at a per share public offering price of not less than $3.50 (equitably adjusted for any stock split, combination or similar event) and an aggregate public offering price not less than $15,000,000, or (b) the Company’s election and requestconversion of at least fifty percent (50%) of [ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, Holder’s reaffirmation MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED. the then outstanding shares of Holder’s representations and warranties under Section 3 Preferred Stock, each share of the Convertible Note Purchase Agreement, the principal amount of this Note (and all interest accrued on this Note at the option of the Payor) Preferred Stock shall automatically be converted into shares of Common Stock at the Conversion Price for such Preferred Stock then in effect. On and after said conversion date, notwithstanding that any certificates for the shares of Preferred Stock shall not have been surrendered for conversion, the shares of Preferred Stock evidenced thereby shall be deemed to be no longer outstanding, and all rights with respect thereto shall forthwith cease and terminate, except only the rights of the holder (i) to receive the shares of Common Stock to which such holder shall be entitled upon conversion thereof, (ii) to receive the amount of cash payable in respect of any fractional share of Common Stock to which such holder shall be entitled, and (iii) with respect to dividends declared but unpaid on Preferred Stock prior to such conversion date, in the event that any holder of Preferred Stock presents such holder's certificate therefor for surrender to the Company or its transfer agent upon such conversion, a certificate for the number of shares of common stock as follows: (a) In Common Stock into which the event of a next equity financing by the Company in one transaction or series of related transactions which raises an aggregate amount of at least One Million Five Hundred Thousand Dollars ($1,500,000) (the “Next Equity Financing”), the principal amount on this Note shall automatically be converted (regardless of whether or not the Note is surrendered to Payor) into the equity securities issued in the Payor’s Next Equity Financing (the “Next Equity Financing Stock”). Any accrued interest outstanding at the time of the conversion shall be paid in cash by the Company. This Note shall convert into the number of shares at the time of the “Next Equity Financing” equals to ___,000 shares of the Company’s Common Preferred Stock at an exercise price of $0.60 per share (the “Exercise Price”) This Note shall surrendered were convertible on such conversion date promptly will be deemed automatically cancelled immediately upon such conversion. As a condition precedent to the issuance of the Next Equity Financing Stock to Holder upon such conversion, Holder shall execute and deliver such agreements, instruments and other documents as are executed issued and delivered by the other investors in connection with their purchase of the Next Equity Financing Stockto such holder. (b) In the event of the “Company’s Sale”, defined below, at the option of Payor, the principal hereunder and, at the option of the Payor, shall automatically be converted (regardless of whether or not the Note is surrendered to Payor) into the number of shares (the “Company’s Sale Stock”) equals to ____,000 shares of the Company’s Common Stock at an exercise price of $0.60 per share (the “Exercise Price”). This Note shall be deemed automatically cancelled immediately upon such conversion.

Automatic Conversion. Subject to Section 5 below andAt any time, at the Company’s election and request, Holder’s reaffirmation each share of Holder’s representations and warranties under Section 3 of the Convertible Note Purchase Agreement, the principal amount of this Note (and all interest accrued on this Note at the option of the Payor) Series 5-A Preferred Stock outstanding shall be converted into such number of fully paid and non-assessable shares of Common Stock as is determined by dividing (i) the Original Issue Price of such share plus any declared but unpaid dividend on such share by (ii) the Conversion Price then in effect immediately upon the date specified by a written notice (“Automatic Election Notice”) delivered to the Company by the holders of not less than the majority of the outstanding shares of the Series 5-A Preferred Stock electing to effect the conversion. The Automatic Election Notice shall be delivered to the Company not less than ten (10) business days prior to the specified date of the automatic conversion. Within three (3) business days of receipt of the Automatic Election Notice, the Company shall provide written notice to all record holders of Series 5-A Preferred Stock of the election of such automatic conversion. Such notice shall state the date on which the automatic conversion shall occur and shall call upon the holders of Series 5-A Preferred Stock to deliver to the Company the certificates representing shares of Series 5-A Preferred Stock so converted (or, in lieu thereof, materials contemplated by Section VII.J., if applicable). Upon the delivery of such certificates (or, in lieu thereof, materials contemplated by Section VII.J., if applicable), the Company shall as soon as practicable, deliver to the transmitting holders (or at their direction) that number of shares of common stock Common Stock issuable upon conversion of such shares of Series 5-A Preferred Stock being converted, dated as follows: (a) In the event of a next equity financing by the Company in one transaction or series of related transactions which raises an aggregate amount of at least One Million Five Hundred Thousand Dollars ($1,500,000) (the “Next Equity Financing”), the principal amount on this Note shall automatically be converted (regardless of whether or not the Note is surrendered to Payor) into the equity securities issued in the Payor’s Next Equity Financing (the “Next Equity Financing Stock”). Any accrued interest outstanding at the time of the date of such conversion. Such conversion shall be paid in cash by deemed to have been made (and the Company. This Note shall convert into shares of Common Stock issued) on the number date of shares at such automatic conversion, and the time holders of the “Next Equity Financing” equals to ___,000 shares Series 5-A Preferred Stock so converted shall be treated for all purposes as the record holder or holders of such Common Stock as of the Company’s Common Stock at an exercise price date of $0.60 per share (such conversion specified in the “Exercise Price”) This Note shall be deemed automatically cancelled immediately upon such conversion. As a condition precedent to the issuance of the Next Equity Financing Stock to Holder upon such conversion, Holder shall execute and deliver such agreements, instruments and other documents as are executed and delivered by the other investors in connection with their purchase of the Next Equity Financing StockAutomatic Election Notice. (b) In the event of the “Company’s Sale”, defined below, at the option of Payor, the principal hereunder and, at the option of the Payor, shall automatically be converted (regardless of whether or not the Note is surrendered to Payor) into the number of shares (the “Company’s Sale Stock”) equals to ____,000 shares of the Company’s Common Stock at an exercise price of $0.60 per share (the “Exercise Price”). This Note shall be deemed automatically cancelled immediately upon such conversion.

Automatic Conversion. Subject to Section 5 below andEach share of Series A Convertible Preferred Stock shall, at the Company’s election and requestupon issuance, Holder’s reaffirmation automatically convert into shares of Holder’s representations and warranties under Section 3 Common Stock as set forth in Paragraph 2 of the Letter Agreement to which this Exhibit A is attached; provided that the aggregate number of shares of Series A Convertible Note Purchase AgreementPreferred Stock that automatically convert shall not exceed, and shall be limited to, the principal amount number of this Note (authorized shares of Common Stock pursuant to the Certificate, and all interest accrued on this Note at the option of the Payor) shall be converted into the number of shares so converted shall be determined on a pro rata basis. In addition, if at any time after the initial issuance of common stock the Series A Convertible Preferred Stock there are additional authorized shares pursuant to the Certificate, each share of Series A Convertible Preferred Stock shall automatically convert into the respective number of shares of Common Stock pursuant to Paragraph 2 of the Letter Agreement; provided that the aggregate number of shares of Series A Convertible Preferred Stock that automatically convert shall not exceed, and shall be limited to, the number of authorized shares of Common Stock pursuant to the Certificate, and the number of shares so converted shall be determined on a pro rata basis. Greenlight Capital, L.P. 5.2 % Greenlight Capital Qualified, L.P. 19.9 % Greenlight Capital Offshore Partners 29.4 % Greenlight Reinsurance, Ltd. 8.1 % Greenlight Capital Offshore Master (Gold), Ltd. 1.3 % Greenlight Capital (Gold), LP 2.7 % Third Point Loan LLC 33.3 % This VOTING AGREEMENT (this “Agreement”) dated September 24, 2010, is entered into by and among Biofuel Energy Corp., a Delaware corporation (the “Company”), and each of the Persons listed on Schedule I attached hereto (including, with their permitted transferees or assigns, collectively, the “Stockholders”). This Agreement shall become effective as follows: of the Closing (aas defined therein) In the event of a next equity financing by that certain proposed registered rights offering for Series A Convertible Preferred Stock of the Company (or depository interests in one transaction or series of related transactions which raises an aggregate amount of at least One Million Five Hundred Thousand Dollars ($1,500,000respect thereof) (the “Next Equity FinancingRights Offering”)) as further described in that certain Loan Agreement and Rights Offering Letter Agreement, each dated as of even date herewith by and among the principal amount on this Note shall automatically be converted (regardless Company, each of whether or not the Note is surrendered to Payor) into Stockholders and the equity securities issued in the Payor’s Next Equity Financing other signatories thereto (the “Next Equity Financing Stock”). Any accrued interest outstanding at the time of the conversion shall be paid in cash by the Company. This Note shall convert into the number of shares at the time of Loan Agreement” and the “Next Equity Financing” equals to ___,000 shares of the Company’s Common Stock at an exercise price of $0.60 per share (the “Exercise Price”) This Note shall be deemed automatically cancelled immediately upon such conversion. As a condition precedent to the issuance of the Next Equity Financing Stock to Holder upon such conversion, Holder shall execute and deliver such agreements, instruments and other documents as are executed and delivered by the other investors in connection with their purchase of the Next Equity Financing Stock. (b) In the event of the “Company’s SaleRights Offering Letter Agreement”, defined below, at the option of Payor, the principal hereunder and, at the option of the Payor, shall automatically be converted (regardless of whether or not the Note is surrendered to Payor) into the number of shares (the “Company’s Sale Stock”) equals to ____,000 shares of the Company’s Common Stock at an exercise price of $0.60 per share (the “Exercise Price”respectively). This Note shall be deemed automatically cancelled immediately upon such conversion.

Automatic Conversion. Subject to Section 5 below andUpon the Effective Date of the Reverse Split (the “Automatic Conversion Date”), each share of Series C Preferred Stock will automatically convert into shares of the Corporation’s post-Reverse Split Common Stock (the “Automatic Conversion”), at the Company’s election and request, Holder’s reaffirmation rate of Holder’s representations and warranties under Section 3 of the Convertible Note Purchase Agreement, the principal amount of this Note Nine (and all interest accrued on this Note at the option of the Payor9) shall be converted into the number of shares of common stock as follows: (a) In the event of a next equity financing by the Company in one transaction or series of related transactions which raises an aggregate amount of at least One Million Five Hundred Thousand Dollars ($1,500,000) (the “Next Equity Financing”), the principal amount on this Note shall automatically be converted (regardless of whether or not the Note is surrendered to Payor) into the equity securities issued in the Payor’s Next Equity Financing (the “Next Equity Financing Stock”). Any accrued interest outstanding at the time of the conversion shall be paid in cash by the Company. This Note shall convert into the number of shares at the time of the “Next Equity Financing” equals to ___,000 shares post-Reverse Split share of the Company’s Common Stock at an exercise price for each One (1) share of $0.60 per share Series C Preferred held by each Holder of Series C Preferred (the “Exercise PriceConversion Rate”) This Note shall be deemed automatically cancelled immediately upon such conversion), without any required action by the Holder thereof. As a condition precedent to soon as practicable after the issuance Automatic Conversion, each stock certificate (if any) evidencing ownership of the Next Equity Financing Stock to Holder upon such conversion, Holder shall execute and deliver such agreements, instruments and other documents as are executed and delivered by the other investors in connection with their purchase of the Next Equity Financing Stock. (b) In the event of the “Company’s Sale”, defined below, at the option of Payor, the principal hereunder and, at the option of the Payor, shall automatically be converted (regardless of whether or not the Note is surrendered to Payor) into the number of Series C Preferred shares (the “Company’s Sale Series C Preferred Stock Certificate(s)”), shall be surrendered to the Corporation for exchange by the Holders thereof. Upon receipt of the Series C Preferred Stock Certificates, duly endorsed, or certifications confirming the ownership of such Series C Preferred Stock”, the Corporation (itself, or through its transfer agent) equals shall promptly issue to ____,000 the exchanging Holder that number of shares of the Company’s Common Stock at an exercise price issuable upon conversion of $0.60 per share such shares of Series C Preferred Stock being converted, under the Conversion Rate (the “Exercise PriceConversion Shares”). This Note All Common Stock issued to the exchanging Holder will be issued as Restricted Shares. In the event that the Series C Preferred Stock Certificates are not surrendered to the Corporation within Five (5) Business Days of the Automatic Conversion Date, each Series C Preferred Stock Certificate shall automatically, and without any required action by the Holders thereof be cancelled and terminated and the Conversion Shares shall be deemed automatically cancelled immediately upon issued to the prior Holders of the Series C Preferred Stock Certificates pursuant to and in connection with the Conversion Rate and mailed to such conversionHolders at their address of record as provided by such Holders to the Corporation. All Common Stock issued to the exchanging Holder will be issued as Restricted shares.

Automatic Conversion. Subject At its option, at any time, the Company may cause the Notes to be converted in whole or in part, on a pro rata basis, into fully paid and nonassessable shares of Common Stock at the then effective Conversion Rate if the Market Price of the Common Stock is equal to or greater than 240% of the Conversion Price for the 30 trading days immediately preceding the delivery of the Mandatory Conversion Notice (as defined below), provided that, during such 30 trading day period, the average daily volume of shares traded is at least 35,000 (subject to adjustment for any Change of Shares); provided that no Default or Event of Default shall have occurred and be continuing on the date on which the Mandatory Conversion Notice is given; and, provided, that if such conversion is prior to a Stockholder Approval, such conversion shall be limited to the extent necessary to ensure that no Registered Holder receives a number of shares which, together with such Converting Holder’s Previous Shares, would exceed such Converting Holder’s Maximum. Any Notes so converted shall be treated as having been surrendered by the holder thereof for conversion pursuant to Section 5 below and, at 3 on the Company’s election and request, Holder’s reaffirmation date of Holder’s representations and warranties under Section 3 of the Convertible Note Purchase Agreement, the principal amount of this Note such mandatory conversion (and all interest accrued on this Note unless previously converted at the option of the Payorholder) and shall be converted into subject to the number limitations of shares Section 3(i). No greater than 60 nor fewer than 20 days prior to the date of common any such mandatory conversion, notice (the “Mandatory Conversion Notice”) by first class mail, postage prepaid, shall be given to the Registered Holders of the Notes to be converted, addressed to such Registered Holders at their last addresses as shown on the stock transfer books of the Company. Each such Mandatory Conversion Notice shall specify the date fixed for conversion, the place or places for surrender of Notes, and the then effective Conversion Rate pursuant to Section 3. Any Mandatory Conversion Notice which is mailed as follows: (a) In the event of a next equity financing herein provided shall be conclusively presumed to have been duly given by the Company on the date deposited in one transaction or series of related transactions which raises an aggregate amount of at least One Million Five Hundred Thousand Dollars ($1,500,000) (the “Next Equity Financing”)mail, the principal amount on this Note shall automatically be converted (regardless of whether or not the Registered Holder receives such notice; and failure properly to give such notice by mail, or any defect in such notice, to the Registered Holders of any Note is surrendered to Payor) into be converted shall not affect the equity securities issued validity of the proceedings for the conversion of any other Notes. On or after the date fixed for conversion as stated in the Payor’s Next Equity Financing (Mandatory Conversion Notice, each holder of Notes called to be converted shall surrender such Notes to the “Next Equity Financing Stock”). Any accrued interest outstanding Company at the time place designated in such Mandatory Conversion Notice for conversion. Notwithstanding that the Notes properly called for conversion shall not have been surrendered, the Notes shall no longer be deemed outstanding and all rights whatsoever with respect to the Notes so called for conversion (except the right of the conversion holders to convert such Notes upon surrender thereof) shall be paid in cash by the Company. This Note shall convert into the number of shares at the time of the “Next Equity Financing” equals to ___,000 shares of the Company’s Common Stock at an exercise price of $0.60 per share (the “Exercise Price”) This Note shall be deemed automatically cancelled immediately upon such conversion. As a condition precedent to the issuance of the Next Equity Financing Stock to Holder upon such conversion, Holder shall execute and deliver such agreements, instruments and other documents as are executed and delivered by the other investors in connection with their purchase of the Next Equity Financing Stockterminate. (b) In the event of the “Company’s Sale”, defined below, at the option of Payor, the principal hereunder and, at the option of the Payor, shall automatically be converted (regardless of whether or not the Note is surrendered to Payor) into the number of shares (the “Company’s Sale Stock”) equals to ____,000 shares of the Company’s Common Stock at an exercise price of $0.60 per share (the “Exercise Price”). This Note shall be deemed automatically cancelled immediately upon such conversion.

Automatic Conversion. Subject to Section 5 below and, at the Company’s election and request, Holder’s reaffirmation (i) Each share of Holder’s representations and warranties under Section 3 of the Convertible Note Purchase Agreement, the principal amount of this Note (and all interest accrued on this Note at the option of the Payor) shall be converted into the number of shares of common stock as follows: (a) In the event of a next equity financing by the Company in one transaction or series of related transactions which raises an aggregate amount of at least One Million Five Hundred Thousand Dollars ($1,500,000) (the “Next Equity Financing”), the principal amount on this Note Preferred Stock shall automatically be converted (regardless into shares of whether Common Stock at the applicable Preferred Conversion Price then in effect, as the case may be, and any declared but unpaid dividends or not the Note is surrendered to Payor) into the equity securities issued in the Payor’s Next Equity Financing (the “Next Equity Financing case of Series B Preferred Stock”). Any , accrued interest outstanding at the time but unpaid dividends elected to be paid in cash in accordance with Section 2(a) of the conversion this Article FOURTH, shall be paid in cash cash, upon the closing of a firm commitment underwritten public offering pursuant to an effective registration statement under the Securities Act of 1933, as amended, underwritten by a nationally recognized underwriter that is satisfactory to the Company. This Note shall convert into the number holders of shares at the time least a majority of the “Next Equity Financing” equals to ___,000 then outstanding shares of Series B Preferred Stock, covering the Company’s offer and sale of Common Stock for the account of the Corporation to the public at an exercise offering price of $0.60 per share (after all underwriters’ discounts and commissions, if any) of at least three (3) times the “Exercise Price”Series B Original Issue Price with net proceeds to the Corporation of not less than $40,000,000 (in the event of which offering, the person(s) This Note entitled to receive the Common Stock issuable upon such conversion of the Preferred Stock shall not be deemed automatically cancelled immediately upon to have converted the Preferred Stock until the closing of such conversion. As offering) (such public offering, a condition precedent to the issuance of the Next Equity Financing Stock to Holder upon such conversion, Holder shall execute and deliver such agreements, instruments and other documents as are executed and delivered by the other investors in connection with their purchase of the Next Equity Financing Stock“Qualified IPO”). (bii) In the event Each share of the “Company’s Sale”, defined below, at the option of Payor, the principal hereunder and, at the option of the Payor, Seed Preferred Stock and Series A Preferred Stock shall automatically be converted into shares of Common Stock at the applicable Preferred Conversion Price then in effect, as the case may be, and any declared but unpaid dividends thereon shall be paid, upon the written election of the holders of at least sixty percent (regardless 60%) of whether the then outstanding shares of Series A Preferred Stock to require such mandatory conversion on the date or not event specified by such stockholders. Each share of Series B Preferred Stock shall automatically be converted into shares of Common Stock at the Note Series B Preferred Conversion Price then in effect, and any accrued but unpaid dividends thereon elected to be paid in cash in accordance with Section 2(a) of this Article FOURTH shall be paid, upon the written election of the holders of at least sixty percent (60%) of the then outstanding shares of Series B Preferred Stock to require such mandatory conversion on the date or event specified by such stockholders. (iii) Each share of Series B Preferred Stock held by any Investor (as such term is surrendered to Payor) into defined in that certain Series B Convertible Preferred Stock Purchase Agreement by and among the number Corporation and certain purchasers of shares Series B Preferred Stock dated on or about December 17, 2010 (the “CompanyPurchase Agreement”)), or any successor-in-interest to any Investor, that fails to purchase the amount of Series B Preferred Stock required to be purchased by such Investor (or such Investor’s Sale Stock”successor-in-interest) equals at a Second Closing (as defined in the Purchase Agreement) pursuant to ____,000 the Purchase Agreement, shall immediately following the Second Closing be automatically converted into shares of the Company’s Common Stock at an exercise price of $0.60 per share (the “Exercise Price”). This Note Series B Preferred Conversion Price then in effect and all dividends thereon shall be deemed automatically cancelled immediately upon such conversioncanceled.

Automatic Conversion. Subject to Section 5 below and(A) Each share of Series E Preferred Stock shall automatically be converted into shares of Common Stock, based on the then-effective Series E Preferred Stock Conversion Price (I) at any time upon the Company’s election and request, Holder’s reaffirmation of Holder’s representations and warranties under Section 3 affirmative vote or written consent of the Convertible Note Purchase Agreementholders of at least fifty percent (50%) of the outstanding shares of the Series E Preferred Stock, (II) in the event that there shall occur a merger or consolidation of the Corporation with or into another entity as a consequence of which the holder of the Series E Preferred Stock shall own 50% or less of the equity (on a fully diluted basis) of the surviving entity of such merger or consolidation EXHIBIT E than the holders of the Series E Preferred Stock did of the Corporation prior thereto, or (III) immediately upon the closing of an initial public offering of the Corporation's Common Stock (an "IPO"). (B) Upon the occurrence of any of the events specified in Section 5(iv)(A) above, the principal amount outstanding shares of this Note (and all interest accrued on this Note at the option of the Payor) Series E Preferred Stock shall be converted into automatically without any further action by the holders of such shares and whether or not the certificates representing such shares are surrendered to the Corporation or its transfer agent; provided, however, that the Corporation shall not be obligated to issue certificates evidencing the shares of Common Stock issuable upon such conversion unless the certificates evidencing such shares of Series E Preferred Stock are either delivered to the Corporation or its transfer agent as provided below, or the holder notifies the Corporation or its transfer agent that such certificates have been lost, stolen or destroyed and executes an agreement satisfactory to the Corporation to indemnify the Corporation from any loss incurred by it in connection with such certificates. Upon the occurrence of such automatic conversion of the Series E Preferred Stock, the holders of Series E Preferred Stock shall surrender the certificates representing such shares at the office of the Corporation or any transfer agent for the Series E Preferred Stock. Thereupon, there shall be issued and delivered to such holder promptly at such office and in its name as shown on such surrendered certificate or certificates, a certificate or certificates for the number of shares of common stock as follows: (a) In Common Stock into which the event shares of a next equity financing by Series E Preferred Stock surrendered were convertible on the Company in one transaction or series of related transactions date on which raises an aggregate amount of at least One Million Five Hundred Thousand Dollars ($1,500,000) (the “Next Equity Financing”)such automatic conversion occurred, the principal amount on this Note shall automatically be converted (regardless of whether or not the Note is surrendered to Payor) into the equity securities issued in the Payor’s Next Equity Financing (the “Next Equity Financing Stock”). Any accrued interest outstanding at the time of the conversion and any declared and unpaid dividends shall be paid in cash by accordance with the Company. This Note shall convert into the number provisions of shares at the time of the “Next Equity Financing” equals to ___,000 shares of the Company’s Common Stock at an exercise price of $0.60 per share (the “Exercise Price”) This Note shall be deemed automatically cancelled immediately upon such conversion. As a condition precedent to the issuance of the Next Equity Financing Stock to Holder upon such conversion, Holder shall execute and deliver such agreements, instruments and other documents as are executed and delivered by the other investors in connection with their purchase of the Next Equity Financing StockSection 5(d). (b) In the event of the “Company’s Sale”, defined below, at the option of Payor, the principal hereunder and, at the option of the Payor, shall automatically be converted (regardless of whether or not the Note is surrendered to Payor) into the number of shares (the “Company’s Sale Stock”) equals to ____,000 shares of the Company’s Common Stock at an exercise price of $0.60 per share (the “Exercise Price”). This Note shall be deemed automatically cancelled immediately upon such conversion.

Automatic Conversion. Subject (a) Each share of Preferred Stock shall automatically be converted into fully paid and nonassessable shares of Common Stock, as provided herein: (i) immediately prior to Section 5 below andthe closing of a firm commitment underwritten public offering pursuant to an effective registration statement filed under the Securities Act of 1933, at as amended, covering the Company’s election offer and request, Holder’s reaffirmation sale of Holder’s representations and warranties under Section 3 Common Stock for the account of the Convertible Note Purchase AgreementCorporation in which the aggregate public offering price (before deduction of underwriters' discounts and commissions) equals or exceeds Twenty-Five Million Dollars ($25,000,000) and the public offering price per share of which equals or exceeds Five Dollars ($5.00) per share before deduction of underwriters' discounts and commissions (such price per share of Common Stock to be appropriately adjusted to reflect Common Stock Events (as defined in subsection 5.4); or (ii) upon the Corporation's receipt of the written consent of the holders of not less than sixty-six percent (66%) of the then outstanding shares of Preferred Stock to the conversion of all then outstanding Preferred Stock under this Section 5. (b) Upon the occurrence of an event specified in subparagraph 5.2(a) (i) or (ii) above, the principal amount outstanding shares of this Note (and all interest accrued on this Note at the option of the Payor) Preferred Stock shall be converted into Common Stock automatically without the need for any further action by the holders of such shares and whether or not the certificates representing such shares are surrendered to the Corporation or its transfer agent; provided, however, that the Corporation shall not be obligated to issue certificates evidencing the shares of Common Stock issuable upon such conversion unless the certificates evidencing such shares of Preferred Stock are either delivered to the Corporation or its transfer agent as provided below, or the holder notifies the Corporation or its transfer agent that such certificates have been lost, stolen or destroyed and executes an agreement satisfactory to the Corporation to indemnify the Corporation from any loss incurred by it in connection with such certificates. Upon the occurrence of such automatic conversion of the Preferred Stock, the holders of Preferred Stock shall surrender the certificates representing such shares at the office of the Corporation or any transfer agent for the Preferred Stock or Common Stock. Thereupon, there shall be issued and delivered to such holder promptly at such office and in its name as shown on such surrendered certificate or certificates, a certificate or certificates for the number of shares of common stock as follows: (a) In Common Stock into which the event of a next equity financing by the Company in one transaction or series of related transactions which raises an aggregate amount of at least One Million Five Hundred Thousand Dollars ($1,500,000) (the “Next Equity Financing”), the principal amount on this Note shall automatically be converted (regardless of whether or not the Note is surrendered to Payor) into the equity securities issued in the Payor’s Next Equity Financing (the “Next Equity Financing Stock”). Any accrued interest outstanding at the time of the conversion shall be paid in cash by the Company. This Note shall convert into the number of shares at the time of the “Next Equity Financing” equals to ___,000 shares of Preferred Stock surrendered were convertible on the Company’s Common Stock at an exercise price of $0.60 per share (the “Exercise Price”) This Note shall be deemed automatically cancelled immediately upon date on which such conversion. As a condition precedent to the issuance of the Next Equity Financing Stock to Holder upon such conversion, Holder shall execute and deliver such agreements, instruments and other documents as are executed and delivered by the other investors in connection with their purchase of the Next Equity Financing Stockautomatic conversion occurred. (b) In the event of the “Company’s Sale”, defined below, at the option of Payor, the principal hereunder and, at the option of the Payor, shall automatically be converted (regardless of whether or not the Note is surrendered to Payor) into the number of shares (the “Company’s Sale Stock”) equals to ____,000 shares of the Company’s Common Stock at an exercise price of $0.60 per share (the “Exercise Price”). This Note shall be deemed automatically cancelled immediately upon such conversion.

Automatic Conversion. Subject to Section 5 below and, Each share of Preferred Stock shall automatically be converted into shares of Common Stock at the Company’s then effective Conversion Price upon (i) the written election and request, Holder’s reaffirmation of Holder’s representations and warranties under Section 3 holders of sixty-seven percent (67%) of the Convertible Note Purchase AgreementPreferred Stock then outstanding, voting as a single class (an “Automatic Conversion Election”) or (ii) the closing of a public offering, underwritten by an investment banking firm approved by the holders of sixty-seven percent (67%) of the shares of Preferred Stock then outstanding, voting as a single class, pursuant to an effective registration statement under the Securities Act of 1933, as amended, covering the offer and sale of Common Stock for the account of the Corporation to the public for a total offering of at least $20,000,000 (a “Qualifying Initial Public Offering”). In the event of a Qualifying Initial Public Offering, the principal amount of this Note (and all interest accrued on this Note at person(s) entitled to receive the option Common Stock issuable upon such conversion of the Payor) Preferred Stock shall not be deemed to have converted their Preferred Stock until the closing of the Qualifying Initial Public Offering. Upon the effective date of an Automatic Conversion Election or the closing of the Qualifying Initial Public Offering, all shares of Preferred Stock shall be converted into automatically without any further action by the holders of such shares and whether or not the certificates representing such shares are surrendered to the Corporation or its transfer agent; provided, however, that the Corporation shall not be obligated to issue certificates evidencing the shares of Common Stock issuable upon such conversion unless certificates evidencing such shares of Preferred Stock being converted are either delivered to the Corporation or its transfer agent, or the holder of such shares notifies the Corporation or any transfer agent that such certificates have been lost, stolen, or destroyed and executes an agreement reasonably satisfactory to the Corporation to indemnify the Corporation from any loss incurred by it in connection therewith. Upon the automatic conversion of the Preferred Stock, the holders of such Preferred Stock shall surrender the certificates representing such shares at the office of the Corporation or of its transfer agent. Thereupon, there shall be issued and delivered to such holder, promptly at such office and in his name as shown on such surrendered certificate or certificates, a certificate or certificates for the number of shares of common stock as follows: (a) In Common Stock into which the event of a next equity financing by the Company in one transaction or series of related transactions which raises an aggregate amount of at least One Million Five Hundred Thousand Dollars ($1,500,000) (the “Next Equity Financing”), the principal amount on this Note shall automatically be converted (regardless of whether or not the Note is surrendered to Payor) into the equity securities issued in the Payor’s Next Equity Financing (the “Next Equity Financing Stock”). Any accrued interest outstanding at the time of the conversion shall be paid in cash by the Company. This Note shall convert into the number of shares at the time of the “Next Equity Financing” equals to ___,000 shares of the Company’s Preferred Stock surrendered were convertible on the date on which such automatic conversion occurred. No fractional shares of Common Stock at an exercise price of $0.60 per share (the “Exercise Price”) This Note shall be deemed automatically cancelled immediately issued upon such conversion. As a condition precedent to the issuance conversion of the Next Equity Financing Stock Preferred Stock. In lieu of any fractional shares to Holder upon which the holder would otherwise be entitled, the Corporation shall pay cash equal to such conversion, Holder shall execute and deliver such agreements, instruments and other documents as are executed and delivered fraction multiplied by the other investors in connection with their purchase of the Next Equity Financing Stockthen effective Conversion Price. (b) In the event of the “Company’s Sale”, defined below, at the option of Payor, the principal hereunder and, at the option of the Payor, shall automatically be converted (regardless of whether or not the Note is surrendered to Payor) into the number of shares (the “Company’s Sale Stock”) equals to ____,000 shares of the Company’s Common Stock at an exercise price of $0.60 per share (the “Exercise Price”). This Note shall be deemed automatically cancelled immediately upon such conversion.

Automatic Conversion. Subject to Section 5 below and, at the Company’s election and request, Holder’s reaffirmation (i) Each share of Holder’s representations and warranties under Section 3 of the Convertible Note Purchase Agreement, the principal amount of this Note (and all interest accrued on this Note at the option of the Payor) shall be converted into the number of shares of common stock as follows: (a) In the event of a next equity financing by the Company in one transaction or series of related transactions which raises an aggregate amount of at least One Million Five Hundred Thousand Dollars ($1,500,000) (the “Next Equity Financing”), the principal amount on this Note Preferred Stock shall automatically be converted into shares of Common Stock, based on the Conversion Price then in effect for such series of Preferred Stock, upon the closing of a firm commitment underwritten public offering (regardless a “Qualified Public Offering”) pursuant to an effective registration statement under the Securities Act of whether or not the Note is surrendered to Payor) into the equity securities issued in the Payor’s Next Equity Financing 1933, as amended (the “Next Equity Financing StockAct”). Any accrued interest outstanding at , covering the time offer and sale of Common Stock for the account of the conversion shall be paid in cash by Corporation to the Company. This Note shall convert into the number of shares at the time of the “Next Equity Financing” equals to ___,000 shares of the Company’s Common Stock public at an exercise offering price of $0.60 per share (prior to underwriter commissions and discounts) of not less than $4.29 (as adjusted to reflect any stock dividends, distributions, combinations, reclassifications or other like transactions effected by the “Exercise Price”Corporation in respect of its Common Stock) This Note and with proceeds (after deduction of underwriters’ commissions and expenses) to the Corporation of not less than $30,000,000.00 (in the event of which Qualified Public Offering, the person(s) entitled to receive the Common Stock issuable upon such conversion of the Preferred Stock shall not be deemed automatically cancelled immediately upon to have converted the Preferred Stock until the closing of such conversionQualified Public Offering). As Notwithstanding the foregoing, a condition precedent registration relating solely to a transaction under Rule 145 under the issuance Act (or any successor thereto) or to an employee benefit plan of the Next Equity Financing Stock Corporation shall not be deemed to Holder upon such conversion, Holder shall execute and deliver such agreements, instruments and other documents as are executed and delivered by be a Qualified Public Offering causing the other investors in connection with their purchase automatic conversion of the Next Equity Financing Preferred Stock into shares of Common Stock. (bii) In With respect to the event Series A Preferred Stock, each share of the “Company’s Sale”, defined below, at the option of Payor, the principal hereunder and, at the option of the Payor, Series A Preferred Stock shall automatically be converted (regardless of whether or not the Note is surrendered to Payor) into the number of shares (the “Company’s Sale Stock”) equals to ____,000 shares of Common Stock, based on the Company’s Conversion Price then in effect for the Series A Preferred Stock, upon the written election of the holders of not less than sixty percent (60%) of the then issued and outstanding shares of Series A Preferred Stock, voting as a separate class. With respect to the Series B Preferred Stock, each share of Series B Preferred Stock shall automatically be converted into shares of Common Stock at an exercise price Stock, based on the Conversion Price then in effect for the Series B Preferred Stock, upon the written election of $0.60 per share the holders of not less than fifty percent (50%) of the “Exercise Price”). This Note shall be deemed automatically cancelled immediately upon such conversionthen issued and outstanding shares of Series B Preferred Stock, voting as a separate class.

Automatic Conversion. Subject to Section 5 below and, at the Company’s election and request, Holder’s reaffirmation of Holder’s representations and warranties under Section 3 of the Convertible Note Purchase Agreement, the principal amount of this Note (and all interest accrued on this Note at the option of the Payor) shall be converted into the number of shares of common stock as follows: (a) In the event of a next equity financing by the Company in one transaction or series of related transactions which raises an aggregate amount of at least One Million Five Hundred Thousand Dollars ($1,500,000) (the “Next Equity Financing”), the principal amount on this Note shall automatically be converted (regardless of whether or not the Note is surrendered to Payor) into the equity securities issued in the Payor’s Next Equity Financing (the “Next Equity Financing Stock”). Any accrued interest outstanding at the time of the conversion shall be paid in cash by the Company. This Note shall convert into the number of shares at the time of the “Next Equity Financing” equals to ___,000 3,125 shares of the Company’s Common Stock at an exercise price of $0.60 8.00 per share (the “Exercise Price”) ). This Note shall be deemed automatically cancelled immediately upon such conversion. As a condition precedent to the issuance of the Next Equity Financing Stock to Holder upon such conversion, Holder shall execute and deliver such agreements, instruments and other documents as are executed and delivered by the other investors in connection with their purchase of the Next Equity Financing Stock. (b) In the event of the “Company’s Sale”, defined below, at the option of Payor, the principal hereunder and, at the option of the Payor, shall automatically be converted (regardless of whether or not the Note is surrendered to Payor) into the number of shares (the “Company’s Sale Stock”) equals to ____,000 3,125 shares of the Company’s Common Stock at an exercise price of $0.60 8.00 per share (the “Exercise Price”). This Note shall be deemed automatically cancelled immediately upon such conversion.

Automatic Conversion. Subject to Section 5 below andUpon the consummation of any Bona Fide Equity Financing, at the Company’s election and request, Holder’s reaffirmation of Holder’s representations and warranties under Section 3 of the Convertible Note Purchase Agreement, the principal amount of this Note (and all interest accrued on this Note at the option of the Payor) Repayment Amount owed hereunder shall automatically and simultaneously be converted into such number of shares of Company capital stock of the same class and series issued in such Bona Fide Equity Financing (the “Financing Shares”) that shall be equal to the quotient obtained by dividing (a) the Repayment Amount by (b) a price per share equal to 1.10 times the price per share paid for the Financing Shares in the Bona Fide Equity Financing (the “Conversion Price”); provided, however, that if the number of shares of common Company capital stock as follows: (a) In the event of a next equity financing by the Company in one transaction or series of related transactions which raises an aggregate amount of at least One Million Five Hundred Thousand Dollars ($1,500,000) (the “Next Equity Financing”), the principal amount on this Note shall automatically be converted (regardless of whether or not the Note is surrendered to Payor) into the equity securities issued in the Payor’s Next Equity Financing (the “Next Equity Financing Stock”). Any accrued interest outstanding at the time of the conversion shall be paid in cash by the Company. This Note shall convert into the number of shares at the time of the “Next Equity Financing” equals to ___,000 shares of the Company’s Common Stock at an exercise price of $0.60 per share (the “Exercise Price”) This Note shall be deemed automatically cancelled immediately upon such conversion. As a condition precedent to the issuance of the Next Equity Financing Stock to Holder issuable upon such conversion, Holder shall execute and deliver such agreements, instruments and together with any other documents as are executed and delivered shares of Company capital stock beneficially owned by the Holder (other investors than shares of Company capital stock issuable under this Note or any other convertible debt security), would in the aggregate exceed 19.99% of the outstanding shares of Common Stock on an as-converted basis, then this Note and the Repayment Amount owed hereunder shall not be automatically converted in connection with their purchase of such Bona Fide Equity Financing, although this Note and the Next Equity Financing Stock. (b) In the event of the “Company’s Sale”, defined below, at the option of Payor, the principal Repayment Amount hereunder and, at the option of the Payor, shall automatically be converted (regardless of whether or not the Note is surrendered to Payor) into the number of shares (the “Company’s Sale Stock”) equals to ____,000 shares of the Company’s Common Stock at an exercise price of $0.60 per share (the “Exercise Price”). This Note shall be deemed automatically cancelled immediately convertible in connection with any subsequent Bona Fide Equity Financing, subject to the foregoing proviso. For purposes of this Note, “Bona Fide Equity Financing” shall mean an issuance by Athersys for its own account of its capital stock, in a single transaction or a series of related transactions, in exchange for cash and as part of a bona fide equity financing of Athersys with financial investors in an aggregate amount equal to or greater than Fifteen Million Dollars ($15,000,000.00), excluding (x) the issuance of its capital stock upon such conversionthe exercise of any rights, options, warrants or other securities exercisable for its capital stock, (y) the issuance of its capital stock upon conversion of securities convertible into its capital stock and (z) the issuance of its securities that do not constitute capital stock that are exercisable for or convertible into its capital stock.

Automatic Conversion. Subject to Section 5 below and, at the Company’s election and request, Holder’s reaffirmation (i) Each share of Holder’s representations and warranties under Section 3 of the Convertible Note Purchase Agreement, the principal amount of this Note (and all interest accrued on this Note at the option of the Payor) shall be converted into the number of shares of common stock as follows: (a) In the event of a next equity financing by the Company in one transaction or series of related transactions which raises an aggregate amount of at least One Million Five Hundred Thousand Dollars ($1,500,000) (the “Next Equity Financing”), the principal amount on this Note Series A Preferred Stock shall automatically be converted into shares of Common Stock at the then applicable Conversion Price upon the earlier to occur of (regardless i) the date specified by written consent or agreement of whether stockholders holding at least a majority of the then outstanding shares of Series A Preferred Stock, voting together as a single class, or not (ii) immediately upon the Note is surrendered to Payor) into closing of the equity securities issued sale of the Company's Common Stock in a firm commitment, underwritten public offering registered under the Payor’s Next Equity Financing Securities Act of 1933, as amended (the “Next Equity Financing StockSecurities Act”), which results in aggregate proceeds to the Company (before deduction for underwriters' discounts and expenses relating to the issuance, including without limitation fees of the Company's counsel) equal to at least $30,000,000 (a “Qualified IPO”). Any accrued interest outstanding at the time of the conversion Upon such automatic conversion, any declared and unpaid dividends shall be paid in cash by accordance with the Company. This Note shall convert into the number provisions of shares at the time of the “Next Equity Financing” equals to ___,000 shares of the Company’s Common Stock at an exercise price of $0.60 per share (the “Exercise Price”) This Note shall be deemed automatically cancelled immediately upon such conversion. As a condition precedent to the issuance of the Next Equity Financing Stock to Holder upon such conversion, Holder shall execute and deliver such agreements, instruments and other documents as are executed and delivered by the other investors in connection with their purchase of the Next Equity Financing StockSection 1. (bii) In the event Each share of the “Company’s Sale”, defined below, at the option of Payor, the principal hereunder and, at the option of the Payor, Series B Preferred Stock shall automatically be converted (regardless of whether or not the Note is surrendered to Payor) into the number of shares (the “Company’s Sale Stock”) equals to ____,000 shares of the Company’s Common Stock at an exercise price the then applicable Conversion Price upon the earlier to occur of $0.60 per share (i) the “Exercise Price”)date specified by written consent or agreement of (A) stockholders holding at least a majority of the then outstanding shares of Preferred Stock, voting together as a single class, and (B) stockholders holding at least a majority of the then outstanding shares of Series B Preferred Stock, voting together as a single class, or (ii) immediately upon the closing of a Qualified IPO. This Note Upon such automatic conversion, any declared and unpaid dividends shall be deemed paid in accordance with the provisions of Section 1. (iii) Each share of Series B-1 Preferred Stock shall automatically cancelled be converted into shares of Common Stock at the then applicable Conversion Price upon the earlier to occur of (i) the date specified by written consent or agreement of (A) stockholders holding at least a majority of the then outstanding shares of Preferred Stock, voting together as a single class, and (B) stockholders holding at least a majority of the then outstanding shares of Series B-1 Preferred Stock, voting together as a single class, or (ii) immediately upon the closing of a Qualified IPO. Upon such automatic conversion, any declared and unpaid dividends shall be paid in accordance with the provisions of Section 1. (iv) Each share of Series C Preferred Stock shall automatically be converted into shares of Common Stock at the then applicable Conversion Price upon the earlier to occur of (i) the date specified by written consent or agreement of (A) stockholders holding at least a majority of the then outstanding shares of Preferred Stock, voting together as a single class, and (B) stockholders holding at least a majority of the then outstanding shares of Series C Preferred Stock, voting together as a single class, or (ii) immediately upon the closing of a Qualified IPO. Upon such automatic conversion, any declared and unpaid dividends shall be paid in accordance with the provisions of Section 1. (v) Each share of Series C-1 Preferred Stock shall automatically be converted into shares of Common Stock at the then applicable Conversion Price upon the earlier to occur of (i) the date specified by written consent or agreement of (A) stockholders holding at least a majority of the then outstanding shares of Preferred Stock, voting together as a single class, and (B) stockholders holding at least a majority of the then outstanding shares of Series C-1 Preferred Stock, voting together as a single class, or (ii) immediately upon the closing of a Qualified IPO. Upon such automatic conversion, any declared and unpaid dividends shall be paid in accordance with the provisions of Section 1.

Automatic Conversion. (a) Subject to Section 5 below andC.(viii) of this Article FOURTH, at a share of Class B Common Stock shall be automatically converted, without any action on the Company’s election and request, Holder’s reaffirmation of Holder’s representations and warranties under Section 3 part of the Convertible Note Purchase AgreementCorporation (other than the subsequent exchange of Class B Common Stock certificates for Common Stock certificates or, in the principal amount case of this Note (and all interest accrued on this Note at uncertificated shares of Class B Common Stock, upon receipt of proper transfer instructions from the option registered holder of the Payor) shall be converted into the number of shares of common stock as follows: (a) In the event Class B Common Stock or by his, her or its attorney lawfully constituted in writing, and upon payment of a next equity financing by the Company all necessary transfer taxes and compliance with appropriate procedures for transferring shares in one transaction or series of related transactions which raises an aggregate amount of at least One Million Five Hundred Thousand Dollars ($1,500,000) (the “Next Equity Financing”uncertificated form), the principal amount on this Note shall automatically be converted (regardless or any holder of whether or not the Note is surrendered to Payor) into the equity securities issued in the Payor’s Next Equity Financing (the “Next Equity Financing Stock”). Any accrued interest outstanding at the time of the conversion shall be paid in cash by the Company. This Note shall convert into the number of shares at the time of the “Next Equity Financing” equals to ___,000 shares of the Company’s Class B Common Stock at an exercise price or any other Person, into one fully paid and nonassessable share of $0.60 per share (the “Exercise Price”) This Note shall be deemed automatically cancelled immediately Common Stock upon a Third-Party Transfer of such conversion. As a condition precedent to the issuance of the Next Equity Financing Stock to Holder upon such conversion, Holder shall execute and deliver such agreements, instruments and other documents as are executed and delivered by the other investors in connection with their purchase of the Next Equity Financing Stockshare. (b) In the event of any automatic conversion pursuant to the terms of Section C.(vii)(a) of this Article FOURTH, the conversion shall be deemed to have been effected upon such Third-Party Transfer (the “CompanyClass B Common Stock Automatic Conversion Time”). At Class B Common Stock Automatic Conversion Time, the certificate or certificates that represented the shares of Class B Common Stock that were so converted immediately prior to such conversion (the “Converted Class B Common Stock”) shall, automatically and without further action, represent the same number of fully paid and non-assessable shares of Common Stock. Permitted Holders of the Converted Class B Common Stock shall deliver their certificates, duly endorsed in blank or accompanied by proper instruments of transfer, in form reasonably satisfactory to the Corporation, duly executed by such Permitted Holder or such Permitted Holder’s Sale”authorized attorney to the principal office of the Corporation (or such other office or agency (including the transfer agent, defined below, if applicable) of the Corporation as it may designate by notice in writing to the registered Permitted Holder at the option address of Payorsuch Permitted Holder appearing on the books of the Corporation), together with a written notice stating the name or names (with addresses) and denominations in which the certificate or certificates representing such shares of Common Stock are to be issued and including instructions for delivery thereof. Upon such delivery, the principal hereunder and, Corporation or its agent shall promptly issue and deliver at the option such stated address to such holder of the Payor, shall automatically be converted (regardless shares of whether Common Stock a certificate or not the Note is surrendered to Payor) into certificates representing the number of shares (the “Company’s Sale Stock”) equals of Common Stock to ____,000 which such holder is entitled by reason of such conversion, and shall cause such shares of Common Stock to be registered in the Company’s name of such holder. The Person entitled to receive the shares of Common Stock issuable upon such conversion shall be treated for all purposes as the record holder of such shares of Common Stock at an exercise price and as of $0.60 per share (Class B Common Stock Automatic Conversion Time, and the “Exercise Price”). This Note rights of such Person as a holder of shares of Class B Common Stock that have been converted shall be deemed automatically cancelled immediately upon cease and terminate at and as of Class B Common Stock Automatic Conversion Time, in each case without regard to any failure by such conversionPermitted Holder to deliver the certificates or the notice required by this Section.

Automatic Conversion. Subject This Bond shall automatically be converted into preferred stock of the Company with the terms and conditions set forth in Annex A upon the earlier to Section 5 below andoccur of (i) an initial public offering of the Common Stock and concurrent listing on a national securities exchange, including without limitation the New York Stock Exchange, NYSE American or the Nasdaq Stock Market (any tier), (ii) a direct listing of the Common Stock on a national securities exchange, including without limitation the New York Stock Exchange, NYSE American or the Nasdaq Stock Market (any tier) or (iii) upon Stockholder Approval (the “Conversion Event”). Written notice shall be delivered to the Investor at the Company’s election and request, Holder’s reaffirmation of Holder’s representations and warranties under Section 3 address last shown on the records of the Convertible Note Purchase AgreementCompany for the Investor or given by the Investor to the Company for the purpose of notice by at least ten (10) business days prior to the anticipated closing date of the Conversion Event, notifying the Investor of the conversion to be effected, specifying the anticipated Conversion Price, the principal amount of this Note (Bond to be converted, together with all accrued and all interest accrued unpaid Default Interest, if any, the date on this Note which such conversion is expected to occur and calling upon the Investor to surrender to the Company, in the manner and at the option place designated, this Bond. The Investor agrees to deliver the original of this Bond (or a notice to the effect that the original Bond has been lost, stolen or destroyed and an agreement acceptable to the Company whereby the holder agrees to indemnify the Company from any loss incurred by it in connection with this Bond) at the closing of the Payor) Conversion Event for cancellation; provided, however, that upon the closing of the Conversion Event, this Bond shall be deemed converted into and of no further force and effect, whether or not it is delivered for cancellation as set forth in this sentence. The Company shall, as soon as practicable thereafter, issue and deliver to the Investor a certificate or certificates (or a notice of issuance of uncertificated shares, if applicable) for the number of shares of common stock as follows: (a) In to which the event of a next equity financing by the Company in one transaction or series of related transactions which raises an aggregate amount of at least One Million Five Hundred Thousand Dollars ($1,500,000) (the “Next Equity Financing”), the principal amount on this Note shall automatically be converted (regardless of whether or not the Note is surrendered to Payor) into the equity securities issued in the Payor’s Next Equity Financing (the “Next Equity Financing Stock”). Any accrued interest outstanding at the time of the conversion Investor shall be paid in cash by the Company. This Note shall convert into the number of shares at the time of the “Next Equity Financing” equals to ___,000 shares of the Company’s Common Stock at an exercise price of $0.60 per share (the “Exercise Price”) This Note shall be deemed automatically cancelled immediately entitled upon such conversion. As a condition precedent Any conversion of this Bond pursuant to the issuance of the Next Equity Financing Stock to Holder upon such conversion, Holder shall execute and deliver such agreements, instruments and other documents as are executed and delivered by the other investors in connection with their purchase of the Next Equity Financing Stock. (bthis Section 5(d) In the event of the “Company’s Sale”, defined below, at the option of Payor, the principal hereunder and, at the option of the Payor, shall automatically be converted (regardless of whether or not the Note is surrendered to Payor) into the number of shares (the “Company’s Sale Stock”) equals to ____,000 shares of the Company’s Common Stock at an exercise price of $0.60 per share (the “Exercise Price”). This Note shall be deemed automatically cancelled to have been made immediately prior to the closing of the Conversion Event but immediately after the adjustment of the Conversion Price pursuant to Section 5(b)(iv), if applicable, and on and after such date the Persons entitled to receive the shares shall issuable upon such conversionconversion be treated for all purposes as the record holder of such shares.

Automatic Conversion. Subject to Section 5 below and(i) Each Preferred Share shall automatically be converted (an "Automatic Conversion Event") into shares of the Common Stock at the then applicable Conversion Price in effect for such Preferred Share if, at any time prior to December 31, 2003, the Company’s election and requestClosing Bid Price on the Principal Market for the Common Stock as reported by Bloomberg is greater than or equal to $0.80 per share of Common Stock for any period of at least fifteen consecutive trading days (the "Automatic Conversion Trigger Price"). Upon the occurrence of such an event, Holder’s reaffirmation the number of Holder’s representations and warranties under Section 3 Preferred Shares to be so automatically converted shall not exceed the amount that would result in the issuance to the Holders of such Preferred Shares of the Convertible Note Purchase Agreement, the principal amount lesser of this Note (and all interest accrued on this Note at the option i) twenty percent (20%) of the Payor) shall be converted into the number of shares of common stock Common Stock traded on the Principal Market as follows:reported by Bloomberg during the immediately preceding ninety (90) day period and (ii) 4.99% of the total shares of Common Stock then outstanding. (aii) In the event that an Automatic Conversion Event occurs during any one calendar year, or if any one calendar year beginning with 2003 concludes without the occurrence of a next equity financing an Automatic Conversion Event, the Automatic Conversion Trigger Price shall automatically, and without any further action on the part of ESAN or the Holders of the Preferred Shares, increase by $0.30 for each such occurrence or for each such completed calendar year. (iii) In the Company in one transaction or series of related transactions which raises an aggregate amount of at least One Million Five Hundred Thousand Dollars ($1,500,000) event that ESAN has given the Holders written notice (the “Next Equity Financing”)"Automatic Conversion Event Notice") in accordance with the provisions of this Certificate of Designation of an Automatic Conversion Event and if, upon the fifth business day immediately following the date of such Notice, the principal amount on this Note Holders have failed to tender all of the Preferred Shares subject to that Automatic Conversion Event, then ESAN shall automatically be converted (regardless of whether or have the right, but not the Note is surrendered obligation, to Payor) into repurchase from Holders such Preferred Shares as the equity securities issued in Holders have failed to tender, for the Payor’s Next Equity Financing (the “Next Equity Financing Stock”). Any accrued interest outstanding at the time of the conversion Original Series B Issue Price, which price shall be paid in cash by cash, provided, however, that the Company. This Note funds used to pay for such repurchase shall convert into not have been raised through the number sale of shares at the time any of the “Next Equity Financing” equals to ___,000 shares of the Company’s Common Stock at an exercise price of $0.60 per share ESAN's equity securities as described in Section 3 (the “Exercise Price”c)(ii) This Note shall be deemed automatically cancelled immediately upon such conversion. As a condition precedent to the issuance of the Next Equity Financing Stock to Holder upon such conversion, Holder shall execute and deliver such agreements, instruments and other documents as are executed and delivered by the other investors in connection with their purchase of the Next Equity Financing Stockabove. (b) In the event of the “Company’s Sale”, defined below, at the option of Payor, the principal hereunder and, at the option of the Payor, shall automatically be converted (regardless of whether or not the Note is surrendered to Payor) into the number of shares (the “Company’s Sale Stock”) equals to ____,000 shares of the Company’s Common Stock at an exercise price of $0.60 per share (the “Exercise Price”). This Note shall be deemed automatically cancelled immediately upon such conversion.

Automatic Conversion. Subject The Series G Preferred will automatically convert ("Automatic Conversion") upon the closing of an underwritten offering (the "Qualified Offering") by the Company pursuant to Section 5 below andwhich the Company receives aggregate gross proceeds of at least Ten Million Dollars (US$10,000,000) in consideration of the purchase of shares of Common Stock (the "Offering Securities") and/or which results in the listing of the Company's common stock on the Nasdaq National Market, the Nasdaq Capital Market, the New York Stock Exchange, or the NYSE MKT. Upon the closing of the Qualified Offering the aggregate Series G Stated Value of all shares of Series G Preferred owned by such Holder will convert into Common Stock at the Company’s election and request, Holder’s reaffirmation Conversion Price then in effect. Upon the triggering of Holder’s representations and warranties under Section 3 of the Convertible Note Purchase AgreementAutomatic Conversion, the principal amount Company shall send written notice (the "Automatic Conversion Notice") to each holder of this Note record of Series G Preferred specifying the date (the "Effective Date") upon which such conversion is to become effective (which Effective Date shall not be more than thirty (30) days after the event which causes such automatic conversion) and all interest accrued on this Note to surrender to the Company, in the manner and at the option of place designed in the Payor) shall be converted into Automatic Conversion Notice, the certificate or certificates, if applicable, representing the number of shares of common stock as follows: (a) Series G Preferred held by such Holder. In the event of an Automatic Conversion, (i) the Holder will execute and deliver, as a next equity financing condition to the Company's issuance and delivery of the shares underlying the Automatic Conversion, a lock-up agreement covering a period of 365 days beginning on the date of the Qualified Offering (the "Lock-up Period"), in form and substance reasonably required by the Company in one transaction and/or the underwriter for the Qualified Offering. On or series after the Effective Date, each holder of related transactions which raises an aggregate amount Series G Preferred shall surrender to the Company the certificate or certificates representing the Series G Preferred, if applicable, owned by such holder as of at least One Million Five Hundred Thousand Dollars ($1,500,000) (the “Next Equity Financing”), the principal amount on this Note shall automatically be converted (regardless of whether or not the Note is surrendered to Payor) into the equity securities issued Effective Date in the Payor’s Next Equity Financing (manner and place set forth in the “Next Equity Financing Stock”). Any accrued interest outstanding at Automatic Conversion Notice and thereupon the time Company shall, as soon as practicable thereafter, issue and deliver to the holders of the conversion shall be paid in Series G Preferred either cash by the Company. This Note shall convert into or certificate(s) for the number of shares at the time of the “Next Equity Financing” equals to ___,000 shares of the Company’s Common Stock at an exercise price of $0.60 per share (the “Exercise Price”) This Note shall be deemed automatically cancelled immediately upon such conversion. As a condition precedent to the issuance of the Next Equity Financing Stock to Holder upon such conversion, Holder shall execute and deliver such agreements, instruments and other documents as are executed and delivered by the other investors issuable in connection with their purchase of the Next Equity Financing Stocksuch Automatic Conversion. (b) In the event of the “Company’s Sale”, defined below, at the option of Payor, the principal hereunder and, at the option of the Payor, shall automatically be converted (regardless of whether or not the Note is surrendered to Payor) into the number of shares (the “Company’s Sale Stock”) equals to ____,000 shares of the Company’s Common Stock at an exercise price of $0.60 per share (the “Exercise Price”). This Note shall be deemed automatically cancelled immediately upon such conversion.

Automatic Conversion. Subject (a) The Company may elect to Section 5 below and, at the Company’s election and request, Holder’s reaffirmation of Holder’s representations and warranties under Section 3 automatically convert some or all of the Convertible Note Purchase Securities (an “Automatic Conversion”) at any time on or prior to Stated Maturity if the closing price of the Common Stock has exceeded 150% of the Conversion Price (referred to as the ‘‘Auto-Conversion Price’’) for at least 20 Trading Days during any consecutive 30-day Trading Day period ending within five Trading Days prior to the date of the Automatic Conversion Notice (as defined below); provided however, that until March 8, 2009, the Company may elect Automatic Conversion of the Securities only if, in accordance with the Registration Rights Agreement, a registration statement with respect to the principal amount of this Note (and all interest accrued on this Note at the option resale of the Payor) Common Stock issuable upon conversion has been declared effective under the Securities Act prior to the date of the Notice of such Automatic Conversion and such registration statement remains effective on the date of Automatic Conversion (the “Automatic Conversion Date”). Upon the Automatic Conversion Date, and without any requirement of further action by the Company or the Holders, the Securities subject to such Automatic Conversion shall be converted into Common Stock in accordance with Sections 6.03 and 6.04. If an Automatic Conversion occurs on or prior to March 15, 2010, the number Company will pay additional interest in an amount equal to three full years of shares of common stock as follows: interest on the Securities, less any interest actually paid or provided for on the Securities prior to such Automatic Conversion (a) the “Make-Whole Interest Payment”). The Company may, at its option, pay the Make-Whole Interest Payment in cash or in Common Stock. In the event that the Company elects to pay the Make-Whole Interest Payment in Common Stock, the shares of Common Stock will be valued at the Auto-Conversion Price. (b) The Company or, at the request of the Company, the Trustee, shall give to all Holders a next equity financing notice (the “Automatic Conversion Notice”) not more than 30 and not less than 20 days prior to the Automatic Conversion Date. The Company shall also deliver a copy of the Automatic Conversion Notice to the Trustee. (c) Each Automatic Conversion Notice shall state: (1) the Automatic Conversion Date, (2) whether the Make-Whole Interest Payment, if any, shall be paid by the Company in one transaction or series of related transactions which raises an aggregate amount of at least One Million Five Hundred Thousand Dollars ($1,500,000) (the “Next Equity Financing”)and, the principal amount on this Note shall automatically be converted (regardless of whether or not the Note is surrendered to Payor) into the equity securities issued in the Payor’s Next Equity Financing (the “Next Equity Financing Stock”). Any accrued interest outstanding at the time of the conversion if so, if it shall be paid in cash or by the Company. This Note shall convert into the number delivery of shares at of Common Stock, (3) the time of place or places where such Securities are to be surrendered for conversion and accrued and unpaid Make-Whole Interest Payment, if any, and (4) the “Next Equity Financing” equals to ___,000 shares of the Company’s Common Stock at an exercise price of $0.60 per share (the “Exercise Price”) This Note shall be deemed automatically cancelled immediately upon such conversion. As a condition precedent to the issuance of the Next Equity Financing Stock to Holder upon such conversion, Holder shall execute and deliver such agreements, instruments and other documents as are executed and delivered by the other investors Conversion Price then in connection with their purchase of the Next Equity Financing Stockeffect. (bd) In If the event Company elects Automatic Conversion of some, but not all, of the “Company’s Sale”, defined below, at the option of PayorSecurities, the principal hereunder and, at Trustee will select the option of the Payor, shall Securities to be automatically be converted (regardless of whether or not the Note is surrendered to Payor) into the number of shares (the “Company’s Sale Stock”) equals to ____,000 shares of the Company’s Common Stock at an exercise price in Principal Amount of $0.60 per share 1,000 or in whole multiples thereof, by lot or on a pro rata basis or by another method that the Trustee considers fair and appropriate. If any Securities are to be automatically converted in part only, the Company will issue a security or securities with a Principal Amount equal to the unconverted principal portion thereof. (e) If a portion of a Holders Securities are selected for partial Automatic Conversion and such Holders voluntarily converts a portion of such Securities, the “Exercise Price”). This Note shall voluntarily converted portion will be deemed automatically cancelled immediately upon such conversionto be taken from the portion selected for Automatic Conversion.

Automatic Conversion. Subject to Section 5 below and, at Immediately upon the Company’s election and request, Holder’s reaffirmation of Holder’s representations and warranties under Section 3 closing of the Convertible Note Purchase Agreementearlier of (i)(A) a transaction in which the Corporation, directly or indirectly, merges or consolidates (including by becoming a 90% or more owned subsidiary) with another company that has its common stock approved for quotation on the OTC Bulletin Board maintained by the Financial Industry Regulatory Authority, Inc., any over the counter market maintained by OTC Markets Group Inc. (or any successor), NASDAQ, the principal amount of this Note NYSE AMEX, the NYSE or any other domestic national stock exchange (“Pubco”) (such transaction, howsoever denominated, the “Reverse Merger”) and all interest accrued on this Note at the option of the Payor(B) shall be converted into the number of Pubco immediately thereafter issues and sells shares of common its capital stock as follows: and/or securities convertible, exercisable and/or exchangeable into or for shares of Pubco’s capital stock, or a combination thereof (a) In collectively, “Pubco Securities”), and Pubco receives no less than $5.0 million of aggregate gross proceeds from the event sale of a next equity financing by the Company in one transaction or series of related transactions which raises an aggregate amount of at least One Million Five Hundred Thousand Dollars ($1,500,000) such Pubco Securities (the “Next Equity Pubco Financing”), or (ii) a Qualified IPO, the principal amount outstanding shares of Series A Preferred Stock and all accrued but unpaid dividends thereon through and including the date of conversion shall be automatically converted into either Pubco Securities on this Note shall automatically be converted (regardless of whether or not the Note is surrendered same terms as are offered to Payor) into the equity securities issued investors in the Payor’s Next Equity Pubco Financing or the securities of the Corporation on the same terms as are offered to investors in the Qualified IPO (the “Next Equity Financing StockIPO Securities”). Any accrued interest outstanding , as the case may be; provided, however, that notwithstanding anything to the contrary herein or elsewhere, the price at which the time of the conversion shall be paid in cash by the Company. This Note Series A Preferred Stock shall convert into the number of shares at the time of the “Next Equity Financing” equals to ___,000 shares of the Company’s Common Stock at an exercise price of $0.60 per share (the “Exercise Price”) This Note Pubco Securities or IPO Securities, as applicable, shall be deemed automatically cancelled immediately upon such conversion. As at a condition precedent valuation calculated to be the issuance lesser of the Next Equity Financing Stock to Holder upon such conversion(a) $15 Million, Holder shall execute and deliver such agreements, instruments and other documents as are executed and delivered by the other investors in connection with their purchase of the Next Equity Financing Stock. post conversion or (b) In the event price of the “Company’s Sale”IPO Stock or Pubco Securities, defined belowas applicable, at in the option Pubco Financing or the Qualified IPO, as applicable. The securities issuable to the holders of Payor, Series A Preferred Stock upon the principal hereunder and, at the option conversion of the Payor, shall automatically be converted (regardless of whether or not the Note is surrendered Series A Preferred Stock are referred to Payor) into the number of shares (herein as the “Company’s Sale StockConversion Securities.”) equals to ____,000 shares of the Company’s Common Stock at an exercise price of $0.60 per share (the “Exercise Price”). This Note shall be deemed automatically cancelled immediately upon such conversion.

Automatic Conversion. Subject to Section 5 below and, at the Company’s election and request, Holder’s reaffirmation of Holder’s representations and warranties under Section 3 of the Convertible Note Purchase Agreement, the principal amount of this Note (and all interest accrued on this Note at the option of the Payor) shall be converted into the number of shares of common stock as follows: (a) In the event of a next equity financing by the Company in one transaction or series of related transactions which raises an aggregate amount of at least One Million Five Hundred Thousand Dollars ($1,500,000) (the “Next Equity Financing”), the principal amount on this This Note shall automatically be converted into shares of Common Stock (regardless an “Automatic Conversion”) upon (x) the listing of whether or Common Stock on a Qualified Eligible Market and (y) in connection with, but not later than, the Note is surrendered listing of the Common Stock on a Qualified Eligible Market, the consummation by the Company of a firm commitment underwritten public offering of Common Stock and/or Common Stock Equivalents of the Company pursuant to Payoran effective registration statement under the Securities Act, that results in gross proceeds to the Company of not less than $5 million; provided, that the Requisite Holders may waive the requirement set forth in this clause (y) into the equity securities issued in the Payor’s Next Equity Financing (the a “Next Equity Financing StockQualified Public Offering”). Any accrued interest outstanding at The Automatic Conversion shall be effected pursuant to Section 4 using a Conversion Price that is equal to the time lowest of (i) the then-effective applicable Conversion Price, (ii) 80% of the conversion shall be paid in cash by the Company. This Note shall convert into the number of shares at the time arithmetic average of the “Next Equity Financing” equals to ___,000 shares VWAPs of the Company’s Common Stock at an exercise during the three Trading Days immediately prior to the Uplisting Date and (iii) the issuance price of $0.60 per share the Qualified Public Offering, if any (which, for the avoidance of doubt, if more than one security is issued to an investor in connection therewith, will be deemed to be the “Exercise Price”) This Note shall be deemed automatically cancelled immediately upon such conversion. As a condition precedent to the issuance of the Next Equity Financing Stock to Holder upon such conversion, Holder shall execute and deliver such agreements, instruments and other documents as are executed and delivered by the other investors in connection with their purchase of the Next Equity Financing Stock. (b) In the event of the “Company’s Sale”, defined below, at the option of Payor, the principal hereunder and, at the option of the Payor, shall automatically be converted (regardless of whether or not the Note is surrendered to Payor) into the number of shares (the “Company’s Sale Stock”) equals to ____,000 shares of the Company’s Common Stock at an exercise price of $0.60 per share (the “Exercise Priceunit price”). This Note shall be converted automatically on the Uplisting Date, which date, for the avoidance of doubt, shall be deemed automatically cancelled immediately a Conversion Date for all purposes under this Note, without any further action by the Holder and whether or not this Note is surrendered to the Company or its Transfer Agent; provided that no such conversion shall occur unless the Common Stock issuable upon conversion of this Note have been registered under the Securities Act or are exempt from the registration requirements of the Securities Act. Upon the occurrence of such conversionAutomatic Conversion of this Note, including, without limitation, the delivery of the applicable Conversion Shares, this Note will be deemed converted in full on the Uplisting Date, and the Holder shall be deemed to have surrendered such Note to the Company.

Automatic Conversion. Subject to Section 5 below andUpon the occurrence of a Class B Automatic Conversion Event, at all the Company’s election then issued and request, Holder’s reaffirmation of Holder’s representations and warranties under Section 3 of the Convertible Note Purchase Agreement, the principal amount of this Note (and all interest accrued on this Note at the option of the Payor) outstanding Class B Non-Voting Common Shares shall be converted into the number of shares of common stock as follows: (a) In the event of a next equity financing automatically in accordance with Article 30.6 without any further action by the Company in one transaction or series of related transactions which raises an aggregate amount of at least One Million Five Hundred Thousand Dollars ($1,500,000) (the “Next Equity Financing”), the principal amount on this Note shall automatically be converted (regardless of holders thereof and whether or not the Note is certificates (if any) representing such shares are surrendered to Payorthe Company or its transfer agent. The Company shall provide all holders of the Class B Non-Voting Common Shares written notice as promptly as practicable following (a) into the equity securities issued date of a Class B Automatic Conversion Event informing the holders of the occurrence of a Class B Automatic Conversion Event or (b) the final date of the Earnout Period that a Class B Earnout Trigger Event was not satisfied as of the end of the Earnout Period and that the Class B Non-Voting Common Shares will be redeemed in accordance with these Articles. In the Payor’s Next Equity Financing case of a Class B Automatic Conversion Event (a) relating to the satisfaction of a Class B Earnout Trigger Event, the automatic conversion of the applicable Class B Non-Voting Common Shares shall be deemed to have occurred at the close of business on the date of the Class B Earnout Trigger Event or (b) relating to a Change of Control, the automatic conversion of the applicable Class B Non-Voting Common Shares shall be deemed to have occurred immediately prior to the consummation of such Change of Control (as applicable, the “Next Equity Financing StockClass B Automatic Conversion Time”). Any accrued interest outstanding The Company shall not be obligated to issue certificates evidencing the Common Shares issuable upon any automatic conversion (to the extent the Common Shares are certificated) unless the certificates evidencing such Class B Non-Voting Common Shares being converted, if any, are either delivered to the Company at the time registered office of the conversion shall be paid in cash by Company or to its transfer agent, or the Company. This Note shall convert into holder notifies the number of shares at the time of the “Next Equity Financing” equals to ___,000 shares of the Company’s Common Stock at Company or its transfer agent, that such certificates have been lost, stolen or destroyed and executes an exercise price of $0.60 per share (the “Exercise Price”) This Note shall be deemed automatically cancelled immediately upon such conversion. As a condition precedent agreement satisfactory to the issuance of Company to indemnify the Next Equity Financing Stock to Holder upon such conversionCompany (and its transfer agent, Holder shall execute and deliver such agreements, instruments and other documents as are executed and delivered if applicable) from any loss incurred by the other investors it in connection with their purchase of the Next Equity Financing Stocktherewith. (b) In the event of the “Company’s Sale”, defined below, at the option of Payor, the principal hereunder and, at the option of the Payor, shall automatically be converted (regardless of whether or not the Note is surrendered to Payor) into the number of shares (the “Company’s Sale Stock”) equals to ____,000 shares of the Company’s Common Stock at an exercise price of $0.60 per share (the “Exercise Price”). This Note shall be deemed automatically cancelled immediately upon such conversion.

Automatic Conversion. Subject to Section 5 below andEach share of Class B Common Stock shall automatically, at without further action by the Company’s election and requestCorporation or such holder, Holder’s reaffirmation of Holder’s representations and warranties under Section 3 of the Convertible Note Purchase Agreement, the principal amount of this Note (and all interest accrued on this Note at the option of the Payor) shall be converted into one (1) fully paid and nonassessable share of Class A Common Stock immediately prior to the close of business on the last day of any fiscal quarter of the Corporation (the “Conversion Date”) if the number of outstanding shares of Class B Common Stock and Class A Common Stock collectively held by Netmarble and its Affiliates on such date is equal to less than thirty percent (30%) of the aggregate number of shares of common stock as follows: (a) In Common Stock and Preferred Stock outstanding on the event last day of a next equity financing by the Company in one transaction or series immediately preceding fiscal quarter of related transactions which raises an aggregate amount of at least One Million Five Hundred Thousand Dollars ($1,500,000) the Corporation (the “Next Equity FinancingMeasurement Date” and such conversion, the “Automatic Conversion”); provided that, if Netmarble has delivered an “Exercise Notice” to purchase shares of Common Stock of the Corporation or has notified the Corporation of an intention to purchase “Financing Securities”, in either case, pursuant to the Stockholders Agreement dated on or about the Charter Date, by and among the Corporation and Netmarble (as the same may be amended, modified or restated form time to time, the “Stockholders Agreement”), but such purchase has not yet occurred for any reason other than the principal amount on this Note failure of Netmarble or any of its Affiliates to consummate such purchase when required, the Measurement Date shall automatically instead be converted the earliest to occur of (regardless i) the closing of whether such purchase and (ii) such time as Netmarble or not any of its Affiliates have had the Note is surrendered opportunity to Payor) into consummate such purchase pursuant to the equity securities issued in the Payor’s Next Equity Financing (the “Next Equity Financing Stock”). Any accrued interest outstanding at the time terms of the conversion Stockholders Agreement and failed to do so. If the Corporation has reason to believe that an Automatic Conversion has occurred, the Corporation shall provide notice of the Automatic Conversion of shares of Class B Common Stock pursuant to this Section 2 of Article V to record holders of such shares of Class B Common Stock as soon as practicable following the Automatic Conversion. Such notice shall be paid in cash provided by any means then permitted by the CompanyGeneral Corporation Law; provided, however, that no failure to give such notice nor any defect therein shall affect the validity of the Automatic Conversion. This Note Upon and after the Automatic Conversion, the Person registered on the Corporation’s books as the record holder of the shares of Class B Common Stock so converted immediately prior to the Automatic Conversion shall convert into be registered on the number Corporation’s books as the record holder of the shares of Class A Common Stock issued upon Automatic Conversion of such shares of Class B Common Stock, without further action on the part of the record holder thereof. Immediately upon the effectiveness of the Automatic Conversion, the rights of the holders of shares at the time of the “Next Equity Financing” equals to ___,000 Class B Common Stock so converted as holders of shares of the Company’s Class B Common Stock at an exercise price of $0.60 per share (the “Exercise Price”) This Note shall cease, and such holders shall be deemed automatically cancelled immediately upon treated for all purposes as having become the record holders of such conversion. As a condition precedent to the issuance of the Next Equity Financing Stock to Holder upon such conversion, Holder shall execute and deliver such agreements, instruments and other documents as are executed and delivered by the other investors in connection with their purchase of the Next Equity Financing Stock. (b) In the event of the “Company’s Sale”, defined below, at the option of Payor, the principal hereunder and, at the option of the Payor, shall automatically be converted (regardless of whether or not the Note is surrendered to Payor) into the number of shares (the “Company’s Sale Stock”) equals to ____,000 shares of the Company’s Class A Common Stock at an exercise price into which such shares of $0.60 per share (the “Exercise Price”). This Note shall be deemed automatically cancelled immediately upon such conversion.Class B Common Stock were converted pursuant to this Section 2 of Article V.

Automatic Conversion. Subject to Section 5 below andThis Note shall automatically convert, at upon the closing of the Company’s election and request, Holder’s reaffirmation issuance of Holder’s representations and warranties under Section 3 preferred stock of the Convertible Note Purchase Agreement, Company (the principal amount “Qualifying Preferred Stock”) for capital-raising purposes occurring on or prior to the Maturity Date resulting in gross proceeds (individually or in the aggregate) to the Company of this Note at least $1,000,000 (and all interest accrued on this Note at excluding any amounts deemed received in connection with the option conversion of the PayorNotes) shall be converted (a “Qualifying Financing”), into that number of shares of capital stock of the Company (the “Automatic Conversion Shares”), rounded down to the nearest whole share, equal to the quotient obtained by dividing the then-outstanding Loan Balance by 90% of the lowest purchase price per share paid by another investor in the Qualifying Financing. Of the Automatic Conversion Shares, the number of shares of common stock as follows:Qualifying Preferred Stock will equal (I) the then-outstanding Loan Balance, divided by (II) the price per share paid by the other investors purchasing the Qualifying Preferred Stock in the Qualifying Financing. Any remaining shares will be Common Stock. (a) In the event of a next equity financing the conversion of this Note pursuant to this Section 4.1: (i) ▇▇▇▇▇▇ agrees to surrender this Note, duly endorsed, for conversion at the closing of the Qualifying Financing and to execute all reasonably necessary documents in connection with the conversion of this Note (including any definitive stock purchase agreement) that are executed by the Company in one transaction or series of related transactions which raises an aggregate amount of at least One Million Five Hundred Thousand Dollars ($1,500,000) (the “Next Equity Financing”), the principal amount on this Note shall automatically be converted (regardless of whether or not the Note is surrendered to Payor) into the equity securities issued investors in the Payor’s Next Equity Financing Qualifying Financing; and (ii) the “Next Equity Financing Stock”). Any accrued interest outstanding Company shall, at the time of the conversion shall be paid in cash by the Company. This Note shall convert into its sole cost and reasonably promptly following such delivery, issue and deliver certificates representing the number of shares at the time fully paid and non-assessable Automatic Conversion Shares, and shall pay to Lender cash in an amount equal to that portion of the “Next Equity Financing” equals Loan Balance, if any, that would otherwise convert into a fractional share of Automatic Conversion Shares pursuant to ___,000 shares of the Company’s Common Stock at an exercise price of $0.60 per share (the “Exercise Price”) This Note shall be deemed automatically cancelled immediately upon such conversion. As a condition precedent to the issuance of the Next Equity Financing Stock to Holder upon such conversion, Holder shall execute and deliver such agreements, instruments and other documents as are executed and delivered by the other investors in connection with their purchase of the Next Equity Financing Stockthis Section 4.1. (b) In the event of the “Company’s Sale”, defined below, at the option of Payor, the principal hereunder and, at the option of the Payor, shall automatically be converted (regardless of whether or not the Note is surrendered to Payor) into the number of shares (the “Company’s Sale Stock”) equals to ____,000 shares of the Company’s Common Stock at an exercise price of $0.60 per share (the “Exercise Price”). This Note shall be deemed automatically cancelled immediately upon such conversion.

Automatic Conversion. Subject to Section 5 below and(i) Each share of Series A Preferred Stock and Series B Preferred Stock shall automatically be converted into shares of Class 1 Common Stock and each share of Series C Preferred Stock shall automatically be converted into shares of Class 2 Common Stock, based on the applicable then-effective Conversion Price, (A) at any time upon the Company’s affirmative election and request, Holder’s reaffirmation of Holder’s representations and warranties under Section 3 of the Convertible Note Purchase Agreementholders of a majority of the outstanding shares of the Preferred Stock, voting together as a single class on an as-if-converted basis, or (B) immediately upon the closing of a firmly underwritten public offering pursuant to an effective registration statement under the Securities Act of 1933, as amended, covering the offer and sale of Common Stock for the account of the Company (the “IPO”). In addition, each share of Series A Preferred Stock, Series B Preferred Stock and Series C Preferred Stock shall automatically be converted into shares of Class 2 Common Stock, based on the applicable then-effective Conversion Price, immediately prior to the closing of the Tilray Reorganization (as defined in Article IV(E) below). Upon any such automatic conversion, any declared and unpaid dividends shall be paid in accordance with the provisions of Section 4(b). (ii) Upon the occurrence of any of the events specified in Section 4(i)(i) above, the principal amount outstanding shares of this Note (and all interest accrued on this Note at the option of the Payor) Preferred Stock shall be converted into automatically without any further action by the holders of such shares and whether or not the certificates representing such shares are surrendered to the Company or its transfer agent; provided, however, that the Company shall not be obligated to issue certificates evidencing the shares of Voting Common Stock issuable upon such conversion unless the certificates evidencing such shares of Preferred Stock are either delivered to the Company or its transfer agent as provided below, or the holder notifies the Company or its transfer agent that such certificates have been lost, stolen or destroyed and executes an agreement satisfactory to the Company to indemnify the Company from any loss incurred by it in connection with such certificates. Upon the occurrence of such automatic conversion of the Preferred Stock, the holders of Preferred Stock shall surrender the certificates representing such shares at the office of the Company or any transfer agent for the Preferred Stock. Thereupon, there shall be issued and delivered to such holder promptly at such office and in its name as shown on such surrendered certificate or certificates, a certificate or certificates for the number of shares of common stock as follows: (a) In Voting Common Stock into which the event shares of a next equity financing by Preferred Stock surrendered were convertible on the Company in one transaction or series of related transactions date on which raises an aggregate amount of at least One Million Five Hundred Thousand Dollars ($1,500,000) (the “Next Equity Financing”)such automatic conversion occurred, the principal amount on this Note shall automatically be converted (regardless of whether or not the Note is surrendered to Payor) into the equity securities issued in the Payor’s Next Equity Financing (the “Next Equity Financing Stock”). Any accrued interest outstanding at the time of the conversion and any declared and unpaid dividends shall be paid in cash by accordance with the Company. This Note shall convert into the number provisions of shares at the time of the “Next Equity Financing” equals to ___,000 shares of the Company’s Common Stock at an exercise price of $0.60 per share (the “Exercise Price”) This Note shall be deemed automatically cancelled immediately upon such conversion. As a condition precedent to the issuance of the Next Equity Financing Stock to Holder upon such conversion, Holder shall execute and deliver such agreements, instruments and other documents as are executed and delivered by the other investors in connection with their purchase of the Next Equity Financing StockSection 4(b). (b) In the event of the “Company’s Sale”, defined below, at the option of Payor, the principal hereunder and, at the option of the Payor, shall automatically be converted (regardless of whether or not the Note is surrendered to Payor) into the number of shares (the “Company’s Sale Stock”) equals to ____,000 shares of the Company’s Common Stock at an exercise price of $0.60 per share (the “Exercise Price”). This Note shall be deemed automatically cancelled immediately upon such conversion.

Automatic Conversion. Subject The Company may elect to automatically convert (“Automatic Conversion”) the Securities on or prior to maturity if the Daily Market Price of the Common Stock has exceeded 150% of the Conversion Price for at least 20 Trading Days out of the 30 consecutive Trading Days ending within five Trading Days prior to the date of (the “Notice Date”) the notice of automatic conversion (the “Automatic Conversion Notice”). In order to effect an Automatic Conversion, the Company shall give to the holder of each Security to be so converted an Automatic Conversion Notice. Such Automatic Conversion Notice shall state: (i) the date on which the Securities identified in the Automatic Conversion Notice will be converted (the “Automatic Conversion Date”); (ii) the CUSIP number or numbers of such Securities; (iii) the place or places where such Securities in certificated form are to be surrendered for exchange of the shares of Common Stock to be issued upon conversion thereof; and (iv) the lowest Daily Market Price of the Common Stock for at least 20 Trading Days out of the 30 consecutive Trading Days ending within five Trading Days prior to the giving of the Automatic Conversion Notice; and If the Company elects to effect an Automatic Conversion Notice in respect of fewer than all the Securities, the Automatic Conversion Notice relating to such Automatic Conversion shall reference this Section 5 below and5.15 and shall identify the Securities to be converted. In case any Security is to be converted in part only, the Automatic Conversion Notice relating thereto shall state the portion of the principal amount thereof to be converted and shall state that on and after the date fixed for conversion, upon surrender of such Security, a new Securities in principal amount equal to the portion thereof not converted will be issued. In the case where the Company elects to effect an Automatic Conversion in respect of any portion of the Securities evidenced by the Global Security, the beneficial interests in the Global Security to be subject to such Automatic Conversion shall be selected by the Depositary in accordance with the applicable standing procedures of the Depositary’s book-entry conversion program, and in connection with such Automatic Conversion the Depositary shall arrange in accordance with such procedures for appropriate endorsements and transfer documents, if required by the Company or the Trustee or conversion agent, and payment of any transfer taxes if required pursuant hereunder. The Company or, at the Company’s election request and request, Holder’s reaffirmation of Holder’s representations and warranties under Section 3 expense of the Convertible Note Purchase AgreementCompany, the principal amount of this Note (and all interest accrued on this Note at Trustee, upon ten Business Days’ notice prior to the option date of the Payorrequested mailing (or upon such shorter notice period as may be reasonably acceptable to the Trustee) shall give to each holder of Securities to be converted into in an Automatic Conversion, at its last address as the number same shall appear on the Registrar, an Automatic Conversion Notice in respect thereof. The date of shares Automatic Conversion of common stock as follows: (a) In the event of a next equity financing Securities shall be not less than 7 days nor more than 15 days from the Notice Date. Such Automatic Conversion Notice shall be irrevocable and shall be mailed by first class mail and, if mailed in the Company in one transaction or series of related transactions which raises an aggregate amount of at least One Million Five Hundred Thousand Dollars ($1,500,000) (the “Next Equity Financing”)manner herein provided, the principal amount on this Note shall automatically be converted (regardless of conclusively presumed to have been given, whether or not the Note is surrendered holder receives it. In any case, failure to Payor) into the equity securities issued give such notice or any defect in the Payor’s Next Equity Financing (notice to the “Next Equity Financing Stock”). Any accrued interest outstanding at holder of any Security designated for Automatic Conversion in whole or in part shall not affect the time validity of the conversion proceedings for the Automatic Conversion of any such Security. The Company shall be paid in cash also deliver a copy of each Automatic Conversion Notice given by the Company. This Note shall convert into the number of shares at the time of the “Next Equity Financing” equals to ___,000 shares of the Company’s Common Stock at an exercise price of $0.60 per share (the “Exercise Price”) This Note shall be deemed automatically cancelled immediately upon such conversion. As a condition precedent it to the issuance of the Next Equity Financing Stock to Holder upon such conversion, Holder shall execute and deliver such agreements, instruments and other documents as are executed and delivered by the other investors in connection with their purchase of the Next Equity Financing StockTrustee. (b) In the event of the “Company’s Sale”, defined below, at the option of Payor, the principal hereunder and, at the option of the Payor, shall automatically be converted (regardless of whether or not the Note is surrendered to Payor) into the number of shares (the “Company’s Sale Stock”) equals to ____,000 shares of the Company’s Common Stock at an exercise price of $0.60 per share (the “Exercise Price”). This Note shall be deemed automatically cancelled immediately upon such conversion.

Automatic Conversion. Subject The Company may elect to automatically convert ("Automatic Conversion") the Securities on or prior to maturity if the Daily Market Price of the Common Stock has exceeded 150% of the Conversion Price for at least 20 Trading Days out of the 30 consecutive Trading Days ending within five Trading Days prior to the date of (the "Notice Date") the notice of automatic conversion (the "Automatic Conversion Notice"). In order to effect an Automatic Conversion, the Company shall give to the holder of each Security to be so converted an Automatic Conversion Notice. Such Automatic Conversion Notice shall state: (i) the date on which the Securities identified in the Automatic Conversion Notice will be converted (the "Automatic Conversion Date"); (ii) the CUSIP number or numbers of such Securities; (iii) the place or places where such Securities in certificated form are to be surrendered for exchange of the shares of Common Stock to be issued upon conversion thereof; (iv) the lowest Daily Market Price of the Common Stock for at least 20 Trading Days out of the 30 consecutive Trading Days ending within five Trading Days prior to the giving of the Automatic Conversion Notice; and (v) the Conversion Price at which such Automatic Conversion is to be effected. If the Company elects to effect an Automatic Conversion Notice in respect of fewer than all the Securities, the Automatic Conversion Notice relating to such Automatic Conversion shall reference this Section 5 below and5.15 and shall identify the Securities to be converted. In case any Security is to be converted in part only, the Automatic Conversion Notice relating thereto shall state the portion of the principal amount thereof to be converted and shall state that on and after the date fixed for conversion, upon surrender of such Security, a new Securities in principal amount equal to the portion thereof not converted will be issued. In the case where the Company elects to effect an Automatic Conversion in respect of any portion of the Security evidenced by the Global Security, the beneficial interests in the Global Security to be subject to such Automatic Conversion shall be selected by the Depositary in accordance with the applicable standing procedures of the Depositary's book-entry conversion program, and in connection with such Automatic Conversion the Depositary shall arrange in accordance with such procedures for appropriate endorsements and transfer documents, if required by the Company or the Trustee or conversion agent, and payment of any transfer taxes if required hereunder. The Company or, at the Company’s election request and request, Holder’s reaffirmation of Holder’s representations and warranties under Section 3 expense of the Convertible Note Purchase AgreementCompany, the principal amount of this Note (and all interest accrued on this Note at Trustee upon ten Business Days' notice prior to the option date of the Payor) requested mailing (or upon such shorter notice period as may be reasonably acceptable to the Trustee), shall give to each holder of Securities to be converted in an Automatic Conversion, at its last address as the same shall appear on the Registrar, an Automatic Conversion Notice in respect thereof. The date of Automatic Conversion of the Securities shall be converted into not less than 7 days nor more than 15 days from the number of shares of common stock as follows: (a) In Notice Date. Such Automatic Conversion Notice shall be irrevocable and shall be mailed by first class mail and, if mailed in the event of a next equity financing by the Company in one transaction or series of related transactions which raises an aggregate amount of at least One Million Five Hundred Thousand Dollars ($1,500,000) (the “Next Equity Financing”)manner herein provided, the principal amount on this Note shall automatically be converted (regardless of conclusively presumed to have been given, whether or not the Note is surrendered holder receives it. In any case, failure to Payor) into the equity securities issued give such notice or any defect in the Payor’s Next Equity Financing (notice to the “Next Equity Financing Stock”). Any accrued interest outstanding at holder of any Security designated for Automatic Conversion in whole or in part shall not affect the time validity of the conversion proceedings for the Automatic Conversion of any such Security. The Company shall be paid in cash also deliver a copy of each Automatic Conversion Notice given by the Company. This Note shall convert into the number of shares at the time of the “Next Equity Financing” equals to ___,000 shares of the Company’s Common Stock at an exercise price of $0.60 per share (the “Exercise Price”) This Note shall be deemed automatically cancelled immediately upon such conversion. As a condition precedent it to the issuance of the Next Equity Financing Stock to Holder upon such conversion, Holder shall execute and deliver such agreements, instruments and other documents as are executed and delivered by the other investors in connection with their purchase of the Next Equity Financing StockTrustee. (b) In the event of the “Company’s Sale”, defined below, at the option of Payor, the principal hereunder and, at the option of the Payor, shall automatically be converted (regardless of whether or not the Note is surrendered to Payor) into the number of shares (the “Company’s Sale Stock”) equals to ____,000 shares of the Company’s Common Stock at an exercise price of $0.60 per share (the “Exercise Price”). This Note shall be deemed automatically cancelled immediately upon such conversion.

Automatic Conversion. Subject (a) If at any time after February [ ], 2010 and on or prior to Maturity, the Closing Price of the Common Stock is equal to or greater than U.S.$1.72 per share for at least twenty (20) Trading Days in any thirty (30) consecutive Trading Day period, ending within five (5) Trading Days prior to the date of the Automatic Conversion Notice (as defined below) the Securities shall automatically convert as provided herein (an “Automatic Conversion”); provided, however, that such Automatic Conversion shall be subject to Section 5 below and9.02 hereof. In the event less than all of the Outstanding Securities can be automatically converted due to the beneficial ownership limitations of a Holder under Section 9.02, at the maximum amount of Outstanding Securities as to such Holder shall be so converted pursuant to the Automatic Conversion. (b) At the request and expense of the Company’s election and request, Holder’s reaffirmation the Trustee shall mail or cause to be mailed to each Holder of Holder’s representations and warranties under Section 3 Outstanding Securities a notice (the “Automatic Conversion Notice”), such notice to be prepared by the Company, of an Automatic Conversion not more than thirty (30) days but not less than twenty (20) days prior to the date on which the Securities will be Automatically Converted (the “Automatic Conversion Date”). If the Company gives such notice, it shall also deliver a copy of such Automatic Conversion Notice to the Trustee. Such mailing shall be by first class mail. Such notice, if mailed in the manner herein provided, shall be conclusively presumed to have been duly given, whether or not the holder receives such notice. In any case, failure to give such notice by mail or any defect in the notice to the Holder of any Security shall not affect the validity of the Convertible Note Purchase Agreement, proceedings for the Automatic Conversion of any other Security. (c) Each Automatic Conversion Notice shall state: (1) the aggregate principal amount of this Note Securities to be automatically converted, (and all interest accrued on this Note at 2) the option CUSIP, ISIN or similar number or numbers of the Payor) shall be converted into the number of shares of common stock as follows:Securities being automatically converted, if applicable, (a3) the Automatic Conversion Date, (4) the Make-Whole Payment, (5) the place or places where the Securities are to be surrendered for conversion, and (6) the Conversion Rate then in effect. (d) Prior to or contemporaneous with the mailing of an Automatic Conversion Notice to the Holders, the Company shall issue a press release containing the information contained in the Automatic Conversion Notice. (e) In the event of an Automatic Conversion, the Company shall issue and deliver a certificate or certificates for the number of Conversion Shares as promptly after the Automatic Conversion Date, as practicable in accordance with the provisions of this Article 9, but in no event later than the close of business on the fifth next equity financing succeeding Business Day following such Automatic Conversion Date. (f) All Securities subject to an Automatic Conversion shall be delivered to the Trustee or the Conversion Agent to be cancelled by or at the direction of the Trustee, which shall dispose of the same in accordance with Section 2.13. (g) If less than all the Securities are to be Automatically Converted, the particular Securities to be converted shall be selected by the Company in one transaction or series of related transactions which raises an aggregate amount of Trustee at least One Million Five Hundred Thousand Dollars five ($1,500,0005) New York Business Days prior to the date that the Automatic Conversion Notice is given from the Outstanding Securities by lot or such method as the Trustee may deem fair and appropriate. (h) Upon Automatic Conversion, interest on the “Next Equity Financing”)Securities shall cease to accrue and, except as provided in Section 5.06, to be entitled to any benefit or security under this Indenture, and the principal amount on Holders thereof shall have no right in respect of such Securities except the right to receive the Common Stock and cash, if any, to which they are entitled pursuant to this Note shall automatically be converted Section 9.13. (regardless i) If any of whether or not the Note is surrendered to Payor) into the equity securities issued in the Payor’s Next Equity Financing (the “Next Equity Financing Stock”). Any accrued interest outstanding provisions of this Section 9.13 are inconsistent with applicable law at the time of the conversion such Automatic Conversion, such law shall be paid in cash by the Company. This Note shall convert into the number of shares at the time of the “Next Equity Financing” equals to ___,000 shares of the Company’s Common Stock at an exercise price of $0.60 per share (the “Exercise Price”) This Note shall be deemed automatically cancelled immediately upon such conversion. As a condition precedent to the issuance of the Next Equity Financing Stock to Holder upon such conversion, Holder shall execute and deliver such agreements, instruments and other documents as are executed and delivered by the other investors in connection with their purchase of the Next Equity Financing Stockgovern. (bj) In Notwithstanding anything to the contrary, in the event of that the “Company’s Sale”, defined below, at the option of PayorCompany shall effect Automatic Conversion pursuant to this Section 9.13, the principal hereunder and, at the option of the Payor, Company shall automatically be converted (regardless of whether or not the Note is surrendered to Payor) into the number of shares (the “Company’s Sale Stock”) equals to ____,000 shares of the Company’s Common Stock at an exercise price of $0.60 per share (the “Exercise Price”). This Note shall be deemed automatically cancelled immediately upon such conversionprocure any required stockholder approvals.

Automatic Conversion. Subject to Section 5 below and, Each share of Preferred Stock shall automatically be converted into shares of Common Stock at the Company’s then effective Conversion Price upon (i) the written election and request, Holder’s reaffirmation of Holder’s representations and warranties under Section 3 holders of at least seventy-five percent (75%) of the Convertible Note Purchase AgreementPreferred Stock then outstanding, voting as a single class (an “Automatic Conversion Election”) or (ii) the closing of a public offering, underwritten by an investment banking firm approved by the holders of seventy-five percent (75%) of the shares of Preferred Stock then outstanding, voting as a single class, pursuant to an effective registration statement under the Securities Act of 1933, as amended, covering the offer and sale of Common Stock for the account of the Corporation to the public for a total offering of at least $20,000,000 (a “Qualifying Initial Public Offering”). In the event of a Qualifying Initial Public Offering, the principal amount of this Note (and all interest accrued on this Note at person(s) entitled to receive the option Common Stock issuable upon such conversion of the Payor) Preferred Stock shall not be deemed to have converted their Preferred Stock until the closing of the Qualifying Initial Public Offering. Upon the effective date of an Automatic Conversion Election or the closing of the Qualifying Initial Public Offering, all shares of Preferred Stock shall be converted into automatically without any further action by the holders of such shares and whether or not the certificates representing such shares are surrendered to the Corporation or its transfer agent; provided, however, that the Corporation shall not be obligated to issue certificates evidencing the shares of Common Stock issuable upon such conversion unless certificates evidencing such shares of Preferred Stock being converted are either delivered to the Corporation or its transfer agent, or the holder of such shares notifies the Corporation or any transfer agent that such certificates have been lost, stolen, or destroyed and executes an agreement reasonably satisfactory to the Corporation to indemnify the Corporation from any loss incurred by it in connection therewith. Upon the automatic conversion of the Preferred Stock, the holders of such Preferred Stock shall surrender the certificates representing such shares at the office of the Corporation or of its transfer agent. Thereupon, there shall be issued and delivered to such holder, promptly at such office and in his name as shown on such surrendered certificate or certificates, a certificate or certificates for the number of shares of common stock as follows: (a) In Common Stock into which the event of a next equity financing by the Company in one transaction or series of related transactions which raises an aggregate amount of at least One Million Five Hundred Thousand Dollars ($1,500,000) (the “Next Equity Financing”), the principal amount on this Note shall automatically be converted (regardless of whether or not the Note is surrendered to Payor) into the equity securities issued in the Payor’s Next Equity Financing (the “Next Equity Financing Stock”). Any accrued interest outstanding at the time of the conversion shall be paid in cash by the Company. This Note shall convert into the number of shares at the time of the “Next Equity Financing” equals to ___,000 shares of the Company’s Preferred Stock surrendered were convertible on the date on which such automatic conversion occurred. No fractional shares of Common Stock at an exercise price of $0.60 per share (the “Exercise Price”) This Note shall be deemed automatically cancelled immediately issued upon such conversion. As a condition precedent to the issuance conversion of the Next Equity Financing Stock Preferred Stock. In lieu of any fractional shares to Holder upon which the holder would otherwise be entitled, the Corporation shall pay cash equal to such conversion, Holder shall execute and deliver such agreements, instruments and other documents as are executed and delivered fraction multiplied by the other investors in connection with their purchase of the Next Equity Financing Stockthen effective Conversion Price. (b) In the event of the “Company’s Sale”, defined below, at the option of Payor, the principal hereunder and, at the option of the Payor, shall automatically be converted (regardless of whether or not the Note is surrendered to Payor) into the number of shares (the “Company’s Sale Stock”) equals to ____,000 shares of the Company’s Common Stock at an exercise price of $0.60 per share (the “Exercise Price”). This Note shall be deemed automatically cancelled immediately upon such conversion.

Automatic Conversion. Subject to Section 5 below and(i) Simultaneously with the closing of a Sale Transaction, at the Company’s election and request, Holder’s reaffirmation each outstanding share of Holder’s representations and warranties under Section 3 of the Convertible Note Purchase Agreement, the principal amount of this Note (and all interest accrued on this Note at the option of the Payor) Series F Preferred Stock shall be converted automatically converted, with no further action required to be taken by the Corporation or the holder thereof, into the following: (A) the Participation Payment; and (B) the number of fully paid and non-assessable shares of Common Stock equal to the product of the number of shares of common stock as follows: Series F Preferred Stock being converted and the quotient of (ax) In the event of a next equity financing Accreted Value divided by (y) the Company Conversion Price then in one transaction or series of related transactions which raises an aggregate amount of at least One Million Five Hundred Thousand Dollars effect ($1,500,000after giving effect to any adjustments pursuant to Section 7(d) (the “Next Equity Financing”below), the principal amount on this Note shall automatically be converted (regardless of whether or not the Note is surrendered to Payor) into the equity securities issued in the Payor’s Next Equity Financing (the “Next Equity Financing Stock”). Any accrued interest outstanding at the time of the conversion shall be paid in cash by the Company. This Note shall convert into the number of shares at the time of the “Next Equity Financing” equals to ___,000 shares of the Company’s Common Stock at an exercise price of $0.60 per share (the “Exercise Price”) This Note shall be deemed automatically cancelled immediately upon such conversion. As a condition precedent to the issuance of the Next Equity Financing Stock to Holder upon such conversion, Holder shall execute and deliver such agreements, instruments and other documents as are executed and delivered by the other investors in connection with their purchase of the Next Equity Financing Stock. (bii) In The Participation Payment set forth in Section 7(b)(i) above shall be in addition to and not in lieu of accrued and unpaid dividends, if any, payable in accordance with Section 3 above and shall be payable, to the event extent funds are legally available therefor, in the case of the “Company’s Sale”a Sale Transaction, defined below, at the option of Payor, the principal hereunder andin cash or, at the option of the Payor, shall automatically be converted (regardless holders of whether or not the Note is surrendered to Payor) into the number a majority of shares (the “Company’s Sale of Series F Preferred Stock”) equals to ____,000 , in shares of the Company’s Common Stock at an exercise price if such shares remain outstanding following the Sale Transaction or in the consideration to be received by holders of $0.60 per share shares of Common Stock. If the Participation Payment is to be paid in shares of Common Stock, the value of such shares of Common Stock shall be determined (A) in the “Exercise Price”case of a Sale Transaction (other than as set forth in clause (B). This Note , below), by the Net Per Share Price paid for shares of Common Stock in such Sale Transaction, or (B) in the case of a Sale Transaction in which no Net Per Share Price is paid for shares of Common Stock, in good faith by the Board of Directors. (iii) Any securities of the surviving Person to be delivered to the holders of shares of Series F Preferred Stock pursuant to this Section 7(b) shall be valued as follows: (A) With respect to securities that do not constitute "restricted securities," as such term is defined in Rule 144(a)(3) promulgated under the Securities Act, the value shall be deemed automatically cancelled immediately to be the Current Market Price of such securities as of three (3) days prior to the date of distribution. (B) With respect to securities that constitute "restricted securities," as such term is defined in Rule 144(a)(3) promulgated under the Securities Act, and that are of the same class or series as securities that are publicly traded, the value shall be adjusted to make an appropriate discount from the value as set forth in Section 7(b)(iii)(A) above to reflect the appropriate fair market value thereof, as mutually determined by the Board of Directors and the holders of a majority of the shares of Series F Preferred Stock, or if there is no active public market with respect to such class or series of securities, such securities shall be valued in accordance with Section 7(b)(iii)(A) above, giving appropriate weight, if any, to such restriction as determined in good faith by the Board of Directors. (iv) Immediately upon conversion as provided herein, each holder of shares of Series F Preferred Stock shall be deemed to be the holder of record of the Common Stock issuable upon conversion of such conversionholder's shares of Series F Preferred Stock, notwithstanding that the share register of the Corporation shall then be closed or that certificates representing the Common Stock shall not then actually be delivered to such Person. Upon written notice from the Corporation, each holder of shares of Series F Preferred Stock so converted shall promptly surrender to the Corporation at its principal place of business to be maintained by it (or at such other office or agency of the Corporation as the Corporation may designate by such notice to the holders of shares of Series F Preferred Stock) certificates representing the shares so converted.

Automatic Conversion. (i) Subject to the terms and conditions of this Section 5 below and7 (including without limitation the last sentence of this Section 7(b)(i)), at from and after the Company’s election and requestShare Threshold Condition Date, Holder’s reaffirmation of Holder’s representations and warranties under Section 3 the Corporation shall have the right, in accordance with the Conversion Notice delivered by the Corporation to all of the Convertible Note Purchase Agreementholders of Series C Preferred Stock, to convert all such shares of Series C Preferred Stock into such number of fully paid and nonassessable shares of Common Stock as is obtained by: (A) multiplying the number of shares of Series C Preferred Stock to be converted by the Series C Stated Value; and (B) dividing the result obtained pursuant to clause (A) above by the Series C Conversion Price then in effect; provided that the Corporation may exercise such right only by majority vote of the members of the Board not affiliated with the Series C Holder. The Corporation shall deliver written notice (the “Conversion Notice”) to the holders of Series C Preferred Stock at their addresses appearing on the books of the Corporation specifying the date of such automatic conversion (any such date, an “Automatic Conversion Date”), the principal amount of this Note (applicable Series C Conversion Price and all interest accrued on this Note at the option a calculation of the Payornumber of shares of Common Stock issuable upon such conversion. Notwithstanding anything in this Section 7(b)(i) to the contrary, the Corporation shall not be converted entitled to convert shares of Series C Preferred Stock into the number of shares of common stock as follows:Common Stock into which such shares of Series C Preferred Stock are then convertible until the Trigger Date. (aii) In Subject to the event terms and conditions of a next equity financing this Section 7 (including without limitation the last sentence of this Section 7(b)(ii)), on the date (or, to the extent applicable, the record date declared by the Company in one transaction or series of related transactions which raises an aggregate amount of at least One Million Five Hundred Thousand Dollars ($1,500,000Board) (such date, the “Next Equity FinancingLiquidity Event Conversion Date”)) immediately prior to a Liquidity Event Date, the principal amount on this Note all shares of Series C Preferred Stock shall automatically be converted into such number of fully paid and nonassessable shares of Common Stock as is obtained by: (regardless A) multiplying the number of whether or not the Note is surrendered shares of Series C Preferred Stock to Payor) into the equity securities issued in the Payor’s Next Equity Financing (the “Next Equity Financing Stock”). Any accrued interest outstanding at the time of the conversion shall be paid in cash converted by the Companyapplicable Liquidity Event Value; and (B) dividing the result obtained pursuant to clause (A) above by the Series C Conversion Price then in effect. This Note Notwithstanding anything in this Section 7(b)(ii) to the contrary, the shares of Series C Preferred Stock shall not automatically convert into the number of shares at the time of the “Next Equity Financing” equals to ___,000 Common Stock into which such shares of Series C Preferred Stock are then convertible until the Company’s Common Stock at an exercise price of $0.60 per share (the “Exercise Price”) This Note shall be deemed automatically cancelled immediately upon such conversion. As a condition precedent to the issuance of the Next Equity Financing Stock to Holder upon such conversion, Holder shall execute and deliver such agreements, instruments and other documents as are executed and delivered by the other investors in connection with their purchase of the Next Equity Financing StockTrigger Date. (b) In the event of the “Company’s Sale”, defined below, at the option of Payor, the principal hereunder and, at the option of the Payor, shall automatically be converted (regardless of whether or not the Note is surrendered to Payor) into the number of shares (the “Company’s Sale Stock”) equals to ____,000 shares of the Company’s Common Stock at an exercise price of $0.60 per share (the “Exercise Price”). This Note shall be deemed automatically cancelled immediately upon such conversion.

Automatic Conversion. Subject to Section 5 below andAt any time, at the Company’s election and request, Holder’s reaffirmation each share of Holder’s representations and warranties under Section 3 of the Convertible Note Purchase Agreement, the principal amount of this Note (and all interest accrued on this Note at the option of the Payor) Series 6-A Preferred Stock outstanding shall be converted into such number of fully paid and non-assessable shares of Common Stock as is determined by dividing (i) the Original Issue Price of such share plus any declared but unpaid dividend on such share by (ii) the Conversion Price then in effect immediately upon the date specified by a written notice (“Automatic Election Notice”) delivered to the Company by the holders of not less than the majority of the outstanding shares of the Series 6-A Preferred Stock electing to effect the conversion. The Automatic Election Notice shall be delivered to the Company not less than ten (10) business days prior to the specified date of the automatic conversion. Within three (3) business days of receipt of the Automatic Election Notice, the Company shall provide written notice to all record holders of Series 6-A Preferred Stock of the election of such automatic conversion. Such notice shall state the date on which the automatic conversion shall occur and shall call upon the holders of Series 6-A Preferred Stock to deliver to the Company the certificates representing shares of Series 6-A Preferred Stock so converted (or, in lieu thereof, materials contemplated by Section VII.J., if applicable). Upon the delivery of such certificates (or, in lieu thereof, materials contemplated by Section VII.J., if applicable), the Company shall as soon as practicable, deliver to the transmitting holders (or at their direction) that number of shares of common stock Common Stock issuable upon conversion of such shares of Series 6-A Preferred Stock being converted, dated as follows: (a) In the event of a next equity financing by the Company in one transaction or series of related transactions which raises an aggregate amount of at least One Million Five Hundred Thousand Dollars ($1,500,000) (the “Next Equity Financing”), the principal amount on this Note shall automatically be converted (regardless of whether or not the Note is surrendered to Payor) into the equity securities issued in the Payor’s Next Equity Financing (the “Next Equity Financing Stock”). Any accrued interest outstanding at the time of the date of such conversion. Such conversion shall be paid in cash by deemed to have been made (and the Company. This Note shall convert into shares of Common Stock issued) on the number date of shares at such automatic conversion, and the time holders of the “Next Equity Financing” equals to ___,000 shares Series 6-A Preferred Stock so converted shall be treated for all purposes as the record holder or holders of such Common Stock as of the Company’s Common Stock at an exercise price date of $0.60 per share (such conversion specified in the “Exercise Price”) This Note shall be deemed automatically cancelled immediately upon such conversion. As a condition precedent to the issuance of the Next Equity Financing Stock to Holder upon such conversion, Holder shall execute and deliver such agreements, instruments and other documents as are executed and delivered by the other investors in connection with their purchase of the Next Equity Financing StockAutomatic Election Notice. (b) In the event of the “Company’s Sale”, defined below, at the option of Payor, the principal hereunder and, at the option of the Payor, shall automatically be converted (regardless of whether or not the Note is surrendered to Payor) into the number of shares (the “Company’s Sale Stock”) equals to ____,000 shares of the Company’s Common Stock at an exercise price of $0.60 per share (the “Exercise Price”). This Note shall be deemed automatically cancelled immediately upon such conversion.

Automatic Conversion. Subject to Section 5 below and(A) At any time after December 9, at the Company’s election and request2012, Holder’s reaffirmation of Holder’s representations and warranties under Section 3 of the Convertible Note Purchase Agreement, the principal amount of this Note (and all interest accrued on this Note at the option of the Payor) shall be converted into the number of shares of common stock as follows: (a) In the event of a next equity financing by the Company in one transaction or series of related transactions which raises an aggregate amount of at least One Million Five Hundred Thousand Dollars ($1,500,000) (the “Next Equity Financing”), the principal amount on this Note each Series C Preferred Share then outstanding shall automatically be converted into Common Shares based on the then effective Series C Conversion Rate on the twentieth (regardless 20) consecutive trading day on which the Market Price of the Common Shares is greater than or equal to 135% of the then current Series C Conversion Price (such event, a “Series C Automatic Conversion Event”). The Trust shall promptly notify the holders of Series C Preferred Shares in writing of the occurrence of a Series C Automatic Conversion Event; provided, that, the Trust’s failure to provide such notice, or its failure to be received, shall not alter or affect the automatic conversion of the Series C Preferred Shares occurring in connection therewith, except to the extent that the holders of Series C Preferred Shares are prejudiced thereby. Upon a Series C Automatic Conversion Event, any declared but not yet payable Series C Participation Dividends or other cash dividends with respect to the Series C Preferred Shares shall be paid in accordance with the provisions of Section 6.5(i)(iv). (B) Upon a Series C Automatic Conversion Event, the outstanding Series C Preferred Shares shall be converted automatically without any further action by the holders thereof or by the Trust and whether or not the Note is certificates evidencing such Shares are surrendered to Payor) into the equity securities issued Trust or its transfer agent; provided, that, the Trust shall not be obligated to issue certificates evidencing the Common Shares issuable upon such conversion unless the certificates evidencing such Series C Preferred Shares are delivered to the Trust or its transfer agent as provided below, or the holder notifies the Trust or its transfer agent that such certificates have been lost, stolen or destroyed and executes an agreement reasonably satisfactory to the Trust to indemnify the Trust from any loss incurred by it in connection with such certificates. Upon receipt of notice of the Payor’s Next Equity Financing (occurrence of a Series C Automatic Conversion Event, the “Next Equity Financing Stock”). Any accrued interest outstanding holders of Series C Preferred Shares shall promptly surrender the certificates evidencing such shares at the time office of the conversion Trust or any transfer agent for the Series C Preferred Shares. Thereupon, there shall be paid issued and delivered to such holder promptly at such office and in cash by the Company. This Note shall convert into its name as shown on such surrendered certificate or certificates, a certificate or certificates for the number of shares at the time of the “Next Equity Financing” equals Common Shares to ___,000 shares of the Company’s Common Stock at an exercise price of $0.60 per share (the “Exercise Price”) This Note shall be deemed automatically cancelled immediately upon which such conversion. As a condition precedent to the issuance of the Next Equity Financing Stock to Holder upon such conversion, Holder shall execute and deliver such agreements, instruments and other documents as are executed and delivered by the other investors holder is entitled in connection with their purchase of the Next Equity Financing Stocksuch Series C Automatic Conversion Event. (b) In the event of the “Company’s Sale”, defined below, at the option of Payor, the principal hereunder and, at the option of the Payor, shall automatically be converted (regardless of whether or not the Note is surrendered to Payor) into the number of shares (the “Company’s Sale Stock”) equals to ____,000 shares of the Company’s Common Stock at an exercise price of $0.60 per share (the “Exercise Price”). This Note shall be deemed automatically cancelled immediately upon such conversion.

Automatic Conversion. Subject Without any action being required by the holder of such Share and whether or not the certificates representing such Share are surrendered to Section 5 below andthe Company or its transfer agent, at the Company’s election and request, Holder’s reaffirmation of Holder’s representations and warranties under Section 3 of the Convertible Note Purchase Agreement, the principal amount of this Note (and all interest accrued on this Note at the option of the Payor) each Preferred Share shall automatically be converted into the number of shares of common stock as follows: Common Shares (a) In immediately upon the event closing of a next equity financing by an IPO, based on the Company applicable Conversion Price in one transaction or series of related transactions which raises an aggregate amount of at least One Million Five Hundred Thousand Dollars ($1,500,000) (the “Next Equity Financing”), the principal amount on this Note shall automatically be converted (regardless of whether or not the Note is surrendered to Payor) into the equity securities issued in the Payor’s Next Equity Financing (the “Next Equity Financing Stock”). Any accrued interest outstanding effect at the time of the closing of such IPO; (b) at the election of holders of a majority of the Preferred Shares and their Conversion Shares if converted (which shall include the prior written consent or affirmative vote of Alibaba), voting as a single class on an as-converted to Common Share but not fully-diluted basis; or (c) if the Board duly approves in accordance with this Agreement and the Restated Articles the commencement of an IPO process by the Company in Taiwan (the “Taiwan IPO”) and the date on which Company is scheduled to submit the Taiwan IPO application (the “IPO Filing Date”), then on the date determined by the Board in good faith for the conversion of all Preferred Shares into Common Shares (the “Conversion Date”); provided that in the event of conversion pursuant to this Section 8.11(c), each of the following conditions must be satisfied before such conversion: (x) the IPO Filing Date shall not be earlier than June 1, 2020; (y) the Conversion Date shall not be earlier than the date that is three (3) months prior to the IPO Filing Date; and (z) a pre-IPO agreement reasonably satisfactory to Alibaba shall have been duly approved by the Board and duly executed by the parties thereto (which shall at least include the Company); provided that if any party fails to sign such pre-IPO agreement within thirty (30) days following the approval of the Board, this condition (z) shall be paid deemed to have been waived with respect to such party. The pre-IPO agreement shall provide the Series B Holders with substantially the same rights, privileges and preferences as that provided under this Agreement (but in cash by any event shall not exceed the Company. This Note shall convert into the number of shares at the time scope of the “Next Equity Financing” equals rights, privileges and preference provided hereunder) to ___,000 shares the extent that such rights, privileges and preferences, in accordance with the written advice of the Company’s underwriter(s) and external legal advisor for the Taiwan IPO, will not materially and adversely affect the Taiwan IPO. For illustrative purpose only, the pre-IPO agreement shall include, without limitation, the provisions regarding (i) re-conversion of all Common Shares converted from Preferred Shares pursuant to this Section 8.11(c) into Preferred Shares upon the earliest of (A) the Taiwan IPO is not consummated within ten (10) months after the IPO Filing Date, (B) the return or rejection from the Taiwan Stock at an exercise price Exchange or any other applicable Governmental Authority for the listing application for the Taiwan IPO, or (C) the Company withdraws or cancels the Taiwan IPO process; (ii) the automatically reinstatement or re-application of $0.60 per share this Agreement in full force and effect upon the foregoing re-conversion; and (iii) the “Exercise Price”remedies of Alibaba comparable to Alibaba’s redemption right under Section 11.1. Each Party agrees to act in good faith in negotiating and finalizing the pre-IPO agreement with the aim to assist the Taiwan IPO. The Company shall not be obligated to issue certificates for any Common Share issuable upon the automatic conversion of any Preferred Share unless the certificate(s) This Note shall be deemed automatically cancelled immediately upon evidencing such conversion. As a condition precedent Preferred Share is either delivered as provided below to the issuance of Company or any transfer agent for the Next Equity Financing Stock Preferred Shares, or the holder notifies the Company or its transfer agent that such certificate has been lost, stolen or destroyed and executes an agreement satisfactory to Holder upon such conversion, Holder shall execute and deliver such agreements, instruments and other documents as are executed and delivered the Company to indemnify the Company from any loss incurred by the other investors it in connection with their purchase such certificate. The Company shall, as soon as practicable after receipt of certificates for the Next Equity Financing Stock. (b) In Preferred Shares, or satisfactory agreement for indemnification in the event case of a lost certificate, promptly issue and deliver at its principal office to the “Company’s Sale”, defined below, at the option of Payor, the principal hereunder and, at the option of the Payor, shall automatically be converted (regardless of whether holder thereof a certificate or not the Note is surrendered to Payor) into certificates for the number of shares (the “Company’s Sale Stock”) equals Common Shares to ____,000 shares which the holder is entitled. No fractional Common Share shall be issued upon conversion of the Company’s Preferred Shares, and the number of Common Stock at an exercise price Shares to be so issued to a holder of $0.60 per the converting Preferred Shares (after aggregating all fractional Common Shares that would be issued to such holder) shall be rounded to the nearest whole share (the “Exercise Price”with one-half being rounded upward). This Note Any person entitled to receive Common Shares issuable upon the automatic conversion of the Preferred Shares shall be deemed automatically cancelled immediately upon treated for all purposes as the record holder of such Common Shares on the date of such conversion.

Automatic Conversion. Subject a. In the event that the Company completes an initial public offering (an “Offering”) of its common stock prior to Section 5 below and, at the Company’s election and request, Holder’s reaffirmation of Holder’s representations and warranties under Section 3 of the Convertible Note Purchase AgreementMaturity Date, the outstanding principal amount of this Note (the Loan, together with any and all accrued but unpaid interest accrued on this Note at the option of the Payor) shall be converted into the number of shares of common stock as follows: thereon (a) In the event of a next equity financing by the Company in one transaction or series of related transactions which raises an aggregate amount of at least One Million Five Hundred Thousand Dollars ($1,500,000including default interest, if applicable) (collectively, the “Next Equity FinancingLoan Balance”), the principal amount on this Note ) shall automatically be converted (regardless of whether or not the Note is surrendered to Payor) into the equity securities issued in the Payor’s Next Equity Financing (the “Next Equity Financing Stock”). Any accrued interest outstanding at the time of the conversion shall be paid in cash converted, without further action by the Company. This Note shall convert Lender, into the such number of shares at the time of the “Next Equity Financing” equals to ___,000 shares of the Company’s Common Stock at an exercise price of $0.60 per share common stock (the “Exercise PriceApplicable Number”) This Note as shall be deemed automatically cancelled immediately determined by dividing the Loan Balance as of the day upon which the Offering is completed by the Conversion Price. The Conversion Price shall be the amount determined by multiplying the final price in such conversionOffering by a factor of zero point seven five (0.75) . As The shares issued upon conversion of the Loan Balance are referred to herein as the “Conversion Shares”. b. The Company shall reserve out of its authorized and unissued Common Stock such number of shares of Common Stock as, in the judgment of the Company exercised in good faith, will be sufficient to permit the conversion of the Loan Balance. If at any time while the Note remains outstanding the Company does not have a condition precedent sufficient number of authorized and reserved shares of Common Stock to satisfy its obligations pursuant to the preceding sentence, then the Company shall immediately take all action necessary to increase the Company’s authorized shares of Common Stock to comply with such obligations. c. Not later than ten (10) Business Days following completion of the Offering, and subject to the Lender having complied with its obligations pursuant to clause d. of this paragraph, the Company shall cause its transfer agent to issue the Applicable Number of Conversion Shares to the Lender. Unless otherwise directed by Lender, such shares shall be issued in book entry form, in the name of Lender, with the Lender’s address specified in paragraph 7.a. (or such other address as Lender shall have furnished to the Company). Upon issuance of the Next Equity Financing Stock Applicable Number of Conversion Shares the Lender shall promptly surrender the Note to Holder upon such conversion, Holder the Company. Issuance of the Applicable Number of Conversion Shares to the Lender shall execute and deliver such agreements, instruments and other documents as are executed and delivered by fully discharge the other investors obligations of the Company under the Note. d. If in connection with their purchase an underwritten Offering any other stockholders of the Next Equity Financing Stock. (b) In Company are required to enter into a lock-up agreement with respect to their shares in the event of the “Company’s Sale”, defined below, at the option of Payor, the principal hereunder andLender shall, at the option of the Payor, shall automatically be converted (regardless of whether or not the Note is surrendered to Payor) into the number of shares (the “Company’s Sale Stock”) equals to ____,000 shares of upon request from the Company’s Common Stock at an exercise price of $0.60 per share (, enter into a lock-up agreement, on materially the “Exercise Price”). This Note shall be deemed automatically cancelled immediately upon such conversionsame terms and conditions, with respect to the Conversion Shares.

Automatic Conversion. Subject to Section 5 below andthe limitations set forth in Paragraph C (i) of this Article IV and provided all Ordinary Shares issuable upon conversion of all outstanding shares of Series B Preferred Shares are then (i) authorized and reserved for issuance, at (ii) registered under the Company’s election Securities Act of 1933, as amended (the "SECURITIES ACT") for resale by the holders of such shares of Series B Preferred Shares and request(iii) eligible to be traded on either the Nasdaq, Holder’s reaffirmation the New York Stock Exchange or the American Stock Exchange, each share of Holder’s representations Series B Preferred Shares issued and warranties under Section 3 outstanding on the second anniversary of the Convertible Note Purchase AgreementPreferred Issuance Date (the "AUTOMATIC CONVERSION DATE"), the principal amount of this Note (and all interest accrued on this Note at the option of the Payor) automatically shall be converted into the number of shares of common stock as follows: Ordinary Shares on such date in accordance with the conversion formulas set forth in Paragraph A of this Article IV (a) In the event "AUTOMATIC CONVERSION"). If the Automatic Conversion occurs, the Company and the holders of Series B Preferred Shares shall follow the applicable conversion procedures set forth in Paragraph B of this Article IV; PROVIDED, HOWEVER, that the holders of Series B Preferred Shares are not required to deliver a Notice of Conversion to the Company or its transfer agent. If the Automatic Conversion does not occur, each holder of Series B Preferred Shares shall thereafter have the option, exercisable in whole or in part at any time and from time to time by delivery of a next equity financing by Redemption Notice to the Company, to require the Company in one transaction or series to purchase for cash, at an amount per share equal to the Redemption Amount, the holder's Series B Preferred Shares. If the Company fails to redeem any of related transactions such shares within five (5) business days after the day on which raises an aggregate amount of at least One Million Five Hundred Thousand Dollars ($1,500,000) the Company receives such Redemption Notice (the “Next Equity Financing”"REDEMPTION DATE"), the principal amount on this Note shall automatically be converted (regardless of whether or not the Note is surrendered to Payor) into the equity securities issued in the Payor’s Next Equity Financing (the “Next Equity Financing Stock”). Any accrued interest outstanding at the time of the conversion then such holder shall be paid in cash by the Company. This Note shall convert into the number of shares at the time of the “Next Equity Financing” equals to ___,000 shares of the Company’s Common Stock at an exercise price of $0.60 per share (the “Exercise Price”) This Note shall be deemed automatically cancelled immediately upon such conversion. As a condition precedent entitled to the issuance of the Next Equity Financing Stock to Holder upon such conversion, Holder shall execute and deliver such agreements, instruments and other documents as are executed and delivered by the other investors remedies provided in connection with their purchase of the Next Equity Financing StockArticle VIII. (b) In the event of the “Company’s Sale”, defined below, at the option of Payor, the principal hereunder and, at the option of the Payor, shall automatically be converted (regardless of whether or not the Note is surrendered to Payor) into the number of shares (the “Company’s Sale Stock”) equals to ____,000 shares of the Company’s Common Stock at an exercise price of $0.60 per share (the “Exercise Price”). This Note shall be deemed automatically cancelled immediately upon such conversion.

Automatic Conversion. Subject (i) Each share of Preferred Stock shall automatically be converted into shares of Common Stock, based on the then-effective Conversion Price for such Preferred Stock, immediately upon the closing of a firmly underwritten public offering pursuant to an effective registration statement under the Securities Act of 1933, as amended, covering the offer and sale of Common Stock for the account of HBT in which (i) the per share price is at least Five Dollars ($5.00) (as adjusted for stock splits, dividends, recapitalizations and the like), and (ii) the gross cash proceeds to HBT (net of underwriting discounts, commissions and fees) are at least fifty million dollars ($50,000,000). Upon such automatic conversion, any declared and unpaid dividends shall be paid in accordance with the provisions of Section 5 below and4(d). (ii) Each outstanding share of a series of Preferred Stock shall automatically be converted into shares of Common Stock, at based on the Company’s election then-effective Conversion Price for such series of Preferred Stock upon the majority vote of all outstanding shares of such series of Preferred Stock, voting as a separate class. Upon such automatic conversion any declared and request, Holder’s reaffirmation unpaid dividends shall be paid in accordance with the provisions of Holder’s representations and warranties under Section 3 4(d). (iii) Upon the occurrence of the Convertible Note Purchase Agreementeither event specified in Section 4(l)(i) or (ii) above, the principal amount outstanding shares of this Note Preferred Stock (and all interest accrued on this Note at or a series of Preferred Stock, as the option of the Payorcase may be) shall be converted into automatically without any further action by the holders of such shares and whether or not the certificates representing such shares are surrendered to HBT or its transfer agent; PROVIDED, HOWEVER, that HBT shall not be obligated to issue certificates evidencing the shares of Common Stock issuable upon such conversion unless the certificates evidencing such shares of Preferred Stock are either delivered to HBT or its transfer agent as provided below, or the holder notifies HBT or its transfer agent that such certificates have been lost, stolen or destroyed and executes an agreement reasonably satisfactory to HBT to indemnify HBT from any loss incurred by it in connection with such certificates. Upon the occurrence of such automatic conversion of the Preferred Stock (or a series of Preferred Stock, as the case may be), the holders of Preferred Stock subject to such automatic conversion shall surrender the certificates representing such shares at the office of HBT or any transfer agent for the Preferred Stock. Thereupon, there shall be issued and delivered to such holder promptly at such office and in its name as shown on such surrendered certificate or certificates, a certificate or certificates for the number of shares of common stock as follows: (a) In Common Stock into which the event shares of a next equity financing by Preferred Stock surrendered were convertible on the Company in one transaction or series of related transactions date on which raises an aggregate amount of at least One Million Five Hundred Thousand Dollars ($1,500,000) (the “Next Equity Financing”)such automatic conversion occurred, the principal amount on this Note shall automatically be converted (regardless of whether or not the Note is surrendered to Payor) into the equity securities issued in the Payor’s Next Equity Financing (the “Next Equity Financing Stock”). Any accrued interest outstanding at the time of the conversion and any declared and unpaid dividends shall be paid in cash by accordance with the Company. This Note shall convert into the number provisions of shares at the time of the “Next Equity Financing” equals to ___,000 shares of the Company’s Common Stock at an exercise price of $0.60 per share (the “Exercise Price”) This Note shall be deemed automatically cancelled immediately upon such conversion. As a condition precedent to the issuance of the Next Equity Financing Stock to Holder upon such conversion, Holder shall execute and deliver such agreements, instruments and other documents as are executed and delivered by the other investors in connection with their purchase of the Next Equity Financing StockSection 4(d). (b) In the event of the “Company’s Sale”, defined below, at the option of Payor, the principal hereunder and, at the option of the Payor, shall automatically be converted (regardless of whether or not the Note is surrendered to Payor) into the number of shares (the “Company’s Sale Stock”) equals to ____,000 shares of the Company’s Common Stock at an exercise price of $0.60 per share (the “Exercise Price”). This Note shall be deemed automatically cancelled immediately upon such conversion.

Automatic Conversion. Subject to Section 5 below and, at the Company’s election and request, Holder’s reaffirmation of Holder’s representations and warranties under Section 3 of the Convertible Note Purchase Agreement, the principal amount of this Note (and all interest accrued on this Note at the option of the Payor) shall be converted into the number of shares of common stock as follows: (a) In All outstanding shares of Series A Preferred shall be automatically converted into fully paid and non-assessable shares of Common Stock, in the event of (i) an initial public offering of equity securities of the Corporation, (ii) a next equity financing by liquidation or dissolution and winding up of the Company in one Corporation, or (iii) the sale of the Corporation pursuant to a stock sale, merger, consolidation, recapitalization, reorganization, restructuring, sale of all or substantially all of the assets of the Corporation or similar transaction or series of related transactions which raises an aggregate amount (each of at least One Million Five Hundred Thousand Dollars ($1,500,000) (the “Next Equity Financing”i), (ii) and (iii) being a "Liquidity Transaction"), and provided the principal amount on this Note shall automatically be converted (regardless of whether or Corporation's value in such Liquidity Transaction is not the Note is surrendered to Payor) into the equity securities issued in the Payor’s Next Equity Financing (the “Next Equity Financing Stock”)less than $7,050,000. Any accrued interest outstanding at the time of the Such conversion shall be paid at the rate of one share of Common Stock for each $5.00, subject to adjustment as provided in cash Section 6 (the "Conversion Price") of an amount equal to the sum of (x) the Stated Value of the Series A Preferred duly surrendered for conversion and (y) any accrued and unpaid dividends thereon that the Corporation has elected to pay in Common Stock. Written notice of such automatic conversion shall be given by the Company. This Note shall convert into Corporation to the number holders of shares Series A Preferred at least 10 days prior to the time closing of the “Next Equity Financing” equals to ___,000 shares of the Company’s Common Stock at an exercise price of $0.60 per share Liquidity Transaction (the “Exercise Price”) This Note shall be deemed automatically cancelled immediately upon "Liquidity Transaction Closing"), unless the Corporation reasonably believes a holder of Series A Preferred has actual knowledge of such automatic conversion. As a condition precedent to the issuance of the Next Equity Financing Stock to Holder upon such conversion, Holder shall execute and deliver such agreements, instruments and other documents as are executed and delivered by the other investors in connection with their purchase of the Next Equity Financing Stock. (b) In order to receive certificates for shares of Common Stock into which Series A Preferred shall have been automatically converted, a holder of record of Series A Preferred shall surrender the event of the “Company’s Sale”certificate(s) representing such shares, defined belowendorsed in blank or accompanied by stock powers endorsed in blank, in either case with signature guaranteed, at the option principal office of Payorthe Corporation or the Corporation's transfer agent for its Common Stock, or at such other office as the Corporation may designate, and shall give written notice to the Corporation, that sets forth the name or names in which the certificate or certificates for shares of Common Stock are to be issued; provided, however, that nothing in this Certificate of Designations shall be deemed to permit any holder of Series A Preferred to designate another person to be the holder of Common Stock issuable upon conversion of the Series A Preferred if the issuance to such other person would violate Federal or state securities laws or any agreement a holder of Series A Preferred has with the Corporation regarding restrictions on transferability of any securities of the Corporation held by such holder. Within 10 business days after surrender of the certificate(s) representing the Series A Preferred and payment by the holder of any applicable transfer or similar taxes, the principal hereunder and, at the option of the Payor, Corporation shall automatically be converted issue and deliver (regardless of whether i) a certificate or not the Note is surrendered to Payor) into certificates for the number of shares (the “Company’s Sale Stock”) equals to ____,000 full shares of the Company’s Common Stock at an exercise price issuable upon conversion, in the name or names and to the address or addresses specified in the Conversion Notice, subject to any such restrictions on transferability, and (ii) a check in payment for any fractional shares pursuant to Section 10 and any accrued and unpaid dividends, if any, that the Corporation has elected to pay in cash pursuant to Section 2(b). (c) The conversion of $0.60 per share (the “Exercise Price”). This Note Series A Preferred shall be deemed automatically cancelled immediately to have been effected simultaneously with the consummation of the Liquidity Transaction Closing. Whereupon, each holder shall cease to be a stockholder with respect to the Series A Preferred and all rights whatsoever with respect to such shares shall terminate (except the rights of the holder to receive shares of Common Stock and cash in respect of fractional shares pursuant to Section 10 and to receive accrued and unpaid dividends pursuant to Section 2(b)), and the person or persons in whose name any certificate(s) for Common Stock are issuable upon such conversionconversion shall be deemed to have become the holder of record of the shares represented thereby.

Automatic Conversion. (a) Subject to Section 5 below and9.15, if at any time on or prior to Stated Maturity, the Closing Price of the Common Stock has exceeded two hundred percent (200%) of the Conversion Price then in effect for at least thirty (30) consecutive Trading Days, all Securities then Outstanding shall automatically convert as provided herein (an “Automatic Conversion”); provided, however, that such Automatic Conversion shall be subject to Section 9.02 and Section 9.15 hereof. Such Securities shall be converted as soon as practicable, but in no event later than the third Business Day following the Trading Day upon which this Automatic Conversion requirement is triggered (the date of such conversion, the “Automatic Conversion Date”). (b) The shares of Common Stock that the Holders shall receive upon Automatic Conversion shall include any shares of Common Stock required to be delivered in respect of a Make-Whole Premium in accordance with Section 9.05 hereof. (c) At the request and expense of the Company’s election , the Trustee shall mail or cause to be mailed to each Holder notice (the “Automatic Conversion Notice”) of an Automatic Conversion as soon as practicable and requestno later than the first Business Day following Automatic Conversion. If the Company gives such notice, Holder’s reaffirmation it shall also deliver a copy of Holder’s representations and warranties under Section 3 such Automatic Conversion Notice to the Trustee. Such mailing shall be by first class mail. Such notice, if mailed in the manner herein provided, shall be conclusively presumed to have been duly given, whether or not the holder receives such notice. In any case, failure to give such notice by mail or any defect in the notice to the holder of any Security shall not affect the validity of the Convertible Note Purchase Agreement, proceedings for the Automatic Conversion of any other Security. (d) Each Automatic Conversion Notice shall state: (1) the aggregate principal amount of this Note Securities to be automatically converted, (and all interest accrued on this Note at 2) the option CUSIP, ISIN or similar number or numbers of the PayorSecurities being automatically converted, (3) shall be converted into the Automatic Conversion Date, (4) that on and after said date Interest thereon will cease to accrue, (5) the number of shares of common stock as follows:Common Stock, if any, to be delivered in respect of a Make-Whole Premium pursuant Section 9.05 hereof, (a6) the place or places where the Securities are to be surrendered for conversion, and (7) the Conversion Price then in effect. (e) Prior to or contemporaneous with the mailing of an Automatic Conversion Notice to the Holders, the Company shall issue a press release containing the information contained in the Automatic Conversion Notice. (f) In the event of a next equity financing by an Automatic Conversion, the Company shall issue and deliver a certificate or certificates for the number of Conversion Shares and any shares of Common Stock required to be delivered in one transaction respect of a Make-Whole Premium for delivery to the Holders as promptly after the Automatic Conversion Date as practicable in accordance with the provisions of this Article 9, but in no event later than the close of business on the third next succeeding Business Day following such Automatic Conversion Date. (g) All Securities subject to an Automatic Conversion shall be delivered to the Trustee or series its agent to be cancelled by or at the direction of related transactions the Trustee, which raises an aggregate amount shall dispose of at least One Million Five Hundred Thousand Dollars the same as provided in Section 3.9 of the Original Indenture. ($1,500,000h) Upon Automatic Conversion, Interest on the Securities shall cease to accrue and shall cease to be entitled to any benefit or security hereunder, and the holders thereof shall have no right in respect of such Securities except the right to receive the Common Stock and cash, if any, to which they are entitled pursuant to this Section 9.14. (i) If any of the “Next Equity Financing”), the principal amount on provisions of this Note shall automatically be converted (regardless of whether or not the Note is surrendered to Payor) into the equity securities issued in the Payor’s Next Equity Financing (the “Next Equity Financing Stock”). Any accrued interest outstanding Section 9.14 are inconsistent with applicable law at the time of the conversion such Automatic Conversion, such law shall be paid in cash by the Company. This Note shall convert into the number of shares at the time of the “Next Equity Financing” equals to ___,000 shares of the Company’s Common Stock at an exercise price of $0.60 per share (the “Exercise Price”) This Note shall be deemed automatically cancelled immediately upon such conversion. As a condition precedent to the issuance of the Next Equity Financing Stock to Holder upon such conversion, Holder shall execute and deliver such agreements, instruments and other documents as are executed and delivered by the other investors in connection with their purchase of the Next Equity Financing Stockgovern. (b) In the event of the “Company’s Sale”, defined below, at the option of Payor, the principal hereunder and, at the option of the Payor, shall automatically be converted (regardless of whether or not the Note is surrendered to Payor) into the number of shares (the “Company’s Sale Stock”) equals to ____,000 shares of the Company’s Common Stock at an exercise price of $0.60 per share (the “Exercise Price”). This Note shall be deemed automatically cancelled immediately upon such conversion.

Automatic Conversion. Subject (a) If at any time after February 9, 2010 and on or prior to Maturity, the Closing Price of the Common Stock is equal to or greater than U.S.$1.70 per share for at least twenty (20) Trading Days in any thirty (30) consecutive Trading Day period, ending within five (5) Trading Days prior to the date of the Automatic Conversion Notice (as defined below) the Securities shall automatically convert as provided herein (an “Automatic Conversion”); provided, however, that such Automatic Conversion shall be subject to Section 5 below and9.02 hereof. In the event less than all of the Outstanding Securities can be automatically converted due to the beneficial ownership limitations of a Holder under Section 9.02, at the maximum amount of Outstanding Securities as to such Holder shall be so converted pursuant to the Automatic Conversion. (b) At the request and expense of the Company’s election and request, Holder’s reaffirmation the Trustee shall mail or cause to be mailed to each Holder of Holder’s representations and warranties under Section 3 Outstanding Securities a notice (the “Automatic Conversion Notice”), such notice to be prepared by the Company, of an Automatic Conversion not more than thirty (30) days but not less than twenty (20) days prior to the date on which the Securities will be Automatically Converted (the “Automatic Conversion Date”). If the Company gives such notice, it shall also deliver a copy of such Automatic Conversion Notice to the Trustee. Such mailing shall be by first class mail. Such notice, if mailed in the manner herein provided, shall be conclusively presumed to have been duly given, whether or not the holder receives such notice. In any case, failure to give such notice by mail or any defect in the notice to the Holder of any Security shall not affect the validity of the Convertible Note Purchase Agreement, proceedings for the Automatic Conversion of any other Security. (c) Each Automatic Conversion Notice shall state: (1) the aggregate principal amount of this Note Securities to be automatically converted, (and all interest accrued on this Note at 2) the option CUSIP, ISIN or similar number or numbers of the Payor) shall be converted into the number of shares of common stock as follows:Securities being automatically converted, if applicable, (a3) the Automatic Conversion Date, (4) the Make-Whole Payment, (5) the place or places where the Securities are to be surrendered for conversion, and (6) the Conversion Rate then in effect. (d) Prior to or contemporaneous with the mailing of an Automatic Conversion Notice to the Holders, the Company shall issue a press release containing the information contained in the Automatic Conversion Notice. (e) In the event of an Automatic Conversion, the Company shall issue and deliver a certificate or certificates for the number of Conversion Shares as promptly after the Automatic Conversion Date, as practicable in accordance with the provisions of this Article 9, but in no event later than the close of business on the fifth next equity financing succeeding Business Day following such Automatic Conversion Date. (f) All Securities subject to an Automatic Conversion shall be delivered to the Trustee or the Conversion Agent to be cancelled by or at the direction of the Trustee, which shall dispose of the same in accordance with Section 2.13. (g) If less than all the Securities are to be Automatically Converted, the particular Securities to be converted shall be selected by the Company in one transaction or series of related transactions which raises an aggregate amount of Trustee at least One Million Five Hundred Thousand Dollars five ($1,500,0005) New York Business Days prior to the date that the Automatic Conversion Notice is given from the Outstanding Securities by lot or such method as the Trustee may deem fair and appropriate. (h) Upon Automatic Conversion, interest on the “Next Equity Financing”)Securities shall cease to accrue and, except as provided in Section 5.06, to be entitled to any benefit or security under this Indenture, and the principal amount on Holders thereof shall have no right in respect of such Securities except the right to receive the Common Stock and cash, if any, to which they are entitled pursuant to this Note shall automatically be converted Section 9.13. (regardless i) If any of whether or not the Note is surrendered to Payor) into the equity securities issued in the Payor’s Next Equity Financing (the “Next Equity Financing Stock”). Any accrued interest outstanding provisions of this Section 9.13 are inconsistent with applicable law at the time of the conversion such Automatic Conversion, such law shall be paid in cash by the Company. This Note shall convert into the number of shares at the time of the “Next Equity Financing” equals to ___,000 shares of the Company’s Common Stock at an exercise price of $0.60 per share (the “Exercise Price”) This Note shall be deemed automatically cancelled immediately upon such conversion. As a condition precedent to the issuance of the Next Equity Financing Stock to Holder upon such conversion, Holder shall execute and deliver such agreements, instruments and other documents as are executed and delivered by the other investors in connection with their purchase of the Next Equity Financing Stockgovern. (bj) In Notwithstanding anything to the contrary, in the event of that the “Company’s Sale”, defined below, at the option of PayorCompany shall effect Automatic Conversion pursuant to this Section 9.13, the principal hereunder and, at the option of the Payor, Company shall automatically be converted (regardless of whether or not the Note is surrendered to Payor) into the number of shares (the “Company’s Sale Stock”) equals to ____,000 shares of the Company’s Common Stock at an exercise price of $0.60 per share (the “Exercise Price”). This Note shall be deemed automatically cancelled immediately upon such conversionprocure any required stockholder approvals.

Automatic Conversion. Subject to Section 5 below and, at the Company’s election and request, Holder’s reaffirmation of Holder’s representations and warranties under Section 3 of the Convertible Note Purchase Agreement, the principal amount of this Note (and all interest accrued on this Note at the option of the Payor) The Conversion Amount shall automatically be converted into shares of Common Stock based on the then-effective applicable Conversion Price (an “Automatic Conversion”) on the fifth (5th) Trading Day immediately following the first Trading Day after the Issuance Date (the “Automatic Conversion Date”) on which (i) the Weighted Average Price of the Common Stock for each Trading Day during a consecutive twenty (20) Trading Day period (the “Automatic Conversion Measuring Period”) equals or exceeds $5.00 (as adjusted for any stock dividend, stock split, stock combination, reclassification or similar transaction occurring after the Subscription Date) and (ii) no Equity Conditions Failure has occurred. The Company shall deliver within two (2) Trading Days following the end of such Automatic Conversion Measuring Period a written notice thereof by facsimile or electronic mail and overnight courier to all, but not less than all, of the holders of Notes and the Transfer Agent (the “Automatic Conversion Notice” and the date the Holder and all the holders of the Other Notes receive such notice is referred to as the “Automatic Conversion Notice Date”). The Automatic Conversion Notice shall (i) state (a) the Automatic Conversion Date, (b) the aggregate Conversion Amount of the Notes which shall be subject to Automatic Conversion from the Holder and all of the holders of the Other Notes pursuant to this Section 3(c)(v) (and analogous provisions under the Other Notes) and (c) the number of shares of common stock as follows: Common Stock to be issued to the Holder on the Automatic Conversion Date and (aii) In certify that there has been no Equity Conditions Failure on any day during the event period beginning on the first day of a next equity financing the Equity Conditions Measuring Period relating to the first date of the Automatic Conversion Measuring Period and ending on, and including, the Automatic Conversion Date. This Note and all of the outstanding Other Notes shall be converted automatically on the Automatic Conversion Date without any further action by the Company in one transaction or series Holder and the holders of related transactions which raises an aggregate amount of at least One Million Five Hundred Thousand Dollars ($1,500,000) (the “Next Equity Financing”), the principal amount on this Note shall automatically be converted (regardless of such Other Notes and whether or not this Note or the Note is Other Notes are surrendered to Payor) into the equity securities issued in Company or its Transfer Agent. Upon the Payor’s Next Equity Financing (occurrence of such Automatic Conversion of this Note and the “Next Equity Financing Stock”). Any accrued interest outstanding at Other Notes, including, without limitation, the time delivery of the conversion applicable Conversion Shares, this Note will be deemed converted in full on the Automatic Conversion Date, and the Holder and the holders of the Other Notes shall be paid in cash by deemed to have surrendered such Notes to the Company. This Note shall convert Notwithstanding anything to the contrary in this Section 3(c)(v), until the Automatic Conversion has occurred, the Conversion Amount subject to the Automatic Conversion may be converted, in whole or in part, by the Holder into the number of shares at the time of the “Next Equity Financing” equals to ___,000 shares of the Company’s Common Stock at an exercise price of $0.60 per share (the “Exercise Price”) This Note shall be deemed automatically cancelled immediately upon such conversionpursuant to Sections 3(c)(i). As a condition precedent to the issuance of the Next Equity Financing Stock to Holder upon such conversion, Holder shall execute and deliver such agreements, instruments and other documents as are executed and delivered All Conversion Amounts converted by the other investors in connection with their purchase Holder after the Automatic Conversion Notice Date shall reduce the Conversion Amount of the Next Equity Financing Stock. (b) In the event of the “Company’s Sale”, defined below, at the option of Payor, the principal hereunder and, at the option of the Payor, shall automatically this Note to be converted (regardless of whether or not on the Note is surrendered to Payor) into the number of shares (the “Company’s Sale Stock”) equals to ____,000 shares of the Company’s Common Stock at an exercise price of $0.60 per share (the “Exercise Price”). This Note shall be deemed automatically cancelled immediately upon such conversionAutomatic Conversion Date.

Automatic Conversion. Subject to Section 5 below and, at Immediately upon the Company’s election and request, Holder’s reaffirmation of Holder’s representations and warranties under Section 3 closing of the Convertible Note Purchase Agreementearlier of (i)(A) a transaction in which the Corporation, directly or indirectly, merges or consolidates (including by becoming a 90% or more owned subsidiary) with another company that has its common stock approved for quotation on the OTC Bulletin Board maintained by the Financial Industry Regulatory Authority, Inc., any over the counter market maintained by OTC Markets Group Inc. (or any successor), NASDAQ, the principal amount of this Note NYSE AMEX, the NYSE or any other domestic national stock exchange (“Pubco”) (such transaction, howsoever denominated, the “Reverse Merger”) and all interest accrued on this Note at the option of the Payor(B) shall be converted into the number of Pubco immediately thereafter issues and sells shares of common its capital stock as follows: and/or securities convertible, exercisable and/or exchangeable into or for shares of Pubco’s capital stock, or a combination thereof (a) In collectively, “Pubco Securities”), and Pubco receives no less than $5.0 million of aggregate gross proceeds from the event sale of a next equity financing by the Company in one transaction or series of related transactions which raises an aggregate amount of at least One Million Five Hundred Thousand Dollars ($1,500,000) such Pubco Securities (the “Next Equity Pubco Financing”), or (ii) a Qualified IPO, the principal amount outstanding shares of Series B Preferred Stock and all accrued but unpaid dividends thereon through and including the date of conversion shall be automatically converted into either Pubco Securities on this Note shall automatically be converted (regardless of whether or not the Note is surrendered same terms as are offered to Payor) into the equity securities issued investors in the Payor’s Next Equity Pubco Financing or the securities of the Corporation on the same terms as are offered to investors in the Qualified IPO (the “Next Equity Financing StockIPO Securities”). Any accrued interest outstanding , as the case may be; provided, however, that notwithstanding anything to the contrary herein or elsewhere, the price at which the time of the conversion shall be paid in cash by the Company. This Note Series B Preferred Stock shall convert into the number of shares at the time of the “Next Equity Financing” equals to ___,000 shares of the Company’s Common Stock at an exercise price of $0.60 per share (the “Exercise Price”) This Note Pubco Securities or IPO Securities, as applicable, shall be deemed automatically cancelled immediately upon such conversion. As at a condition precedent valuation calculated to be the issuance lesser of the Next Equity Financing Stock to Holder upon such conversion(a) $17.5 Million, Holder shall execute and deliver such agreements, instruments and other documents as are executed and delivered by the other investors in connection with their purchase of the Next Equity Financing Stock. post conversion or (b) In the event price of the “Company’s Sale”IPO Stock or Pubco Securities, as applicable, in the Pubco Financing or the Qualified IPO, as applicable. The securities issuable to the holders of Series B Preferred Stock upon the conversion of the Series B Preferred Stock, including the Conversion Shares defined in Section 5(b) below, at the option of Payor, the principal hereunder and, at the option of the Payor, shall automatically be converted (regardless of whether or not the Note is surrendered are referred to Payor) into the number of shares (herein as the “Company’s Sale StockConversion Securities.”) equals to ____,000 shares of the Company’s Common Stock at an exercise price of $0.60 per share (the “Exercise Price”). This Note shall be deemed automatically cancelled immediately upon such conversion.

Automatic Conversion. Subject to Section 5 below and, at Immediately upon the Company’s election and request, Holder’s reaffirmation of Holder’s representations and warranties under Section 3 closing of the Convertible Note Purchase Agreementearlier of (i)(A) a transaction in which the Corporation, directly or indirectly, merges or consolidates (including by becoming a 90% or more owned subsidiary) with another company that has its common stock approved for quotation on the OTC Bulletin Board maintained by the Financial Industry Regulatory Authority, Inc., any over the counter market maintained by OTC Markets Group Inc. (or any successor), NASDAQ, the principal amount of this Note NYSE AMEX, the NYSE or any other domestic national stock exchange (“Pubco”) (such transaction, howsoever denominated, the “Reverse Merger”) and all interest accrued on this Note at the option of the Payor(B) shall be converted into the number of Pubco immediately thereafter issues and sells shares of common its capital stock as follows: and/or securities convertible, exercisable and/or exchangeable into or for shares of Pubco’s capital stock, or a combination thereof (a) In collectively, “Pubco Securities”), and Pubco receives no less than $5.0 million of aggregate gross proceeds from the event sale of a next equity financing by the Company in one transaction or series of related transactions which raises an aggregate amount of at least One Million Five Hundred Thousand Dollars ($1,500,000) such Pubco Securities (the “Next Equity Pubco Financing”), or (ii) a Qualified IPO, the principal amount outstanding shares of Series A Preferred Stock and all accrued but unpaid dividends thereon through and including the date of conversion shall be automatically converted into either Pubco Securities on this Note shall automatically be converted (regardless of whether or not the Note is surrendered same terms as are offered to Payor) into the equity securities issued investors in the Payor’s Next Equity Pubco Financing or the securities of the Corporation on the same terms as are offered to investors in the Qualified IPO (the “Next Equity Financing StockIPO Securities”) as the case may be, shall be 90% of the purchase price of the (i) Pubco Securities (and if convertible, exercisable and/or exchangeable securities are issued by Pubco to investors, either as all of the Pubco Securities sold and/or issued to investors or as part of the Pubco Securities sold and/or issued to investors in the Pubco Financing, then the conversion price, exercise price and/or exchange price of any such convertible, exercisable or exchangeable Pubco Securities shall also have a 10% discount thereto) or (ii) IPO Securities (and if convertible, exercisable and/or exchangeable securities are sold and/or issued by Pubco, either as all of the IPO Securities sold and/or issued to investors or as part of the IPO Securities sold and/or issued to investors in the Qualified IPO, then the conversion price, exercise price and/or exchange price of any such convertible, exercisable or exchangeable IPO Securities sold in the Qualified IPO, shall also have a 10% discount thereto). Any accrued interest outstanding at The securities issuable to the time holders of Series A Preferred Stock upon the conversion of the conversion shall be paid in cash by the Company. This Note shall convert into the number of shares at the time of Series A Preferred Stock are referred to herein as the “Next Equity Financing” equals to ___,000 shares of the Company’s Common Stock at an exercise price of $0.60 per share (the “Exercise PriceConversion Securities.”) This Note shall be deemed automatically cancelled immediately upon such conversion. As a condition precedent to the issuance of the Next Equity Financing Stock to Holder upon such conversion, Holder shall execute and deliver such agreements, instruments and other documents as are executed and delivered by the other investors in connection with their purchase of the Next Equity Financing Stock. (b) In the event of the “Company’s Sale”, defined below, at the option of Payor, the principal hereunder and, at the option of the Payor, shall automatically be converted (regardless of whether or not the Note is surrendered to Payor) into the number of shares (the “Company’s Sale Stock”) equals to ____,000 shares of the Company’s Common Stock at an exercise price of $0.60 per share (the “Exercise Price”). This Note shall be deemed automatically cancelled immediately upon such conversion.

Automatic Conversion. Subject to Section 5 below andEach share of Series A Convertible Preferred Stock shall automatically, at and without any further action on the Company’s election and request, Holder’s reaffirmation of Holder’s representations and warranties under Section 3 part of the Convertible Note Purchase Agreementholder thereof, convert into 50 shares of Common Stock (as it may be adjusted in accordance with Section 7(b), the principal amount “Conversion Ratio”) immediately following the satisfaction of this Note (and all interest accrued on this Note at the option of the Payorfollowing conditions: (i) the approval of the Sixth Amended and Restated Certificate of Incorporation of the Corporation (the “New Charter”) by the stockholders of the Corporation (the “Stockholder Approval”), which shall increase the total authorized shares of Common Stock to 450,000,000 (the “Authorized Share Increase”), (ii) the adoption of the New Charter by the Board and (iii) the filing and acceptance of the New Charter with and by the Secretary of State of the State of Delaware, which shall be filed the same day as the date of Stockholder Approval (the “Conversion”). The Corporation shall within one (1) business day of Stockholder Approval (i) inform each holder of Series A Convertible Preferred Stock of the occurrence of the Stockholder Approval and (ii) confirm to each holder of Series A Convertible Preferred Stock the effective date of the Conversion. The shares of Common Stock to be issued upon Conversion (the “Conversion Shares”) shall be issued as follows: (a) Series A Convertible Preferred Stock that is registered in book-entry form shall be automatically cancelled on the date of Conversion and converted into the number of corresponding Conversion Shares, which shares of common stock as follows: (a) In the event of a next equity financing by the Company in one transaction or series of related transactions which raises an aggregate amount of at least One Million Five Hundred Thousand Dollars ($1,500,000) (the “Next Equity Financing”), the principal amount on this Note shall automatically be converted (regardless of whether or not the Note is surrendered to Payor) into the equity securities issued in book-entry form and without any action on the Payor’s Next Equity Financing (the “Next Equity Financing Stock”). Any accrued interest outstanding at the time part of the conversion holders thereof and shall be paid in cash by delivered to the Company. This Note shall convert into the number of shares at the time holders thereof within two (2) business days of the “Next Equity Financing” equals to ___,000 shares effectiveness of the Company’s Common Conversion; (b) Series A Convertible Preferred Stock at an exercise price of $0.60 per share (the “Exercise Price”) This Note that is issued in certificated form shall be deemed automatically cancelled immediately upon converted into the corresponding Conversion Shares on the date of Conversion and the holder’s rights as a holder of such conversionshares of Series A Convertible Preferred Stock shall cease and terminate on such date, excepting only the right to receive the Conversion Shares within two (2) business Days of the effectiveness of the Conversion. As a condition precedent The holder of Series A Convertible Preferred Stock shall surrender any stock certificate to the issuance Corporation for cancellation within three (3) business days of the Next Equity Financing date the Conversion. Notwithstanding the cancellation of the Series A Convertible Preferred Stock upon Conversion, holders of Series A Convertible Preferred Stock shall continue to Holder upon have any remedies provided herein or otherwise available at law or in equity to such conversion, Holder shall execute and deliver such agreements, instruments and other documents as are executed and delivered holder because of a failure by the other investors Corporation to comply with the terms of this Certificate of Designations, and in connection with their purchase of the Next Equity Financing Stock. (b) In the event of the “Company’s Sale”, defined below, at the option of Payorall cases, the principal hereunder and, at holder shall retain all of its rights and remedies for the option of Corporation’s failure to convert the Payor, shall automatically be converted (regardless of whether or not the Note is surrendered to Payor) into the number of shares (the “Company’s Sale Stock”) equals to ____,000 shares of the Company’s Common Series A Convertible Preferred Stock at an exercise price of $0.60 per share (the “Exercise Price”). This Note shall be deemed automatically cancelled immediately upon such conversionpursuant hereto.

Automatic Conversion. Subject Upon, and subject to Section 5 below andthe consummation of, at the Company’s election and requesta Subsequent Financing, Holder’s reaffirmation an amount of Holder’s representations and warranties under Section 3 this Note equal to fifty percent (50%) of the Convertible outstanding principal amount of this Note Purchase Agreementas of the Original Issue Date shall be automatically converted into shares of Common Stock; provided, that if a portion of this Note has previously been converted (voluntarily or otherwise), the principal amount of this Note (and all interest accrued on to be automatically converted pursuant to this Note at the option of the PayorSection 4(b) shall be reduced by the aggregate principal amount of this Note converted into in such previous conversion(s); and provided, further, that the principal amount of this Note to be automatically converted pursuant to this Section 4(b) shall be further reduced such that immediately after such conversion, the Holder and its affiliates would not in the aggregate beneficially own more than 9.9% of the Company's outstanding shares of Common Stock, giving effect to such conversion. Prior to the issuance of any Conversion Shares to the Holder pursuant to an automatic conversion under this Section 4(b), the Company shall notify the Holder by telephone and by facsimile of the number of shares of common stock as follows: (a) In Common Stock outstanding on such date and the event number of a next equity financing by Conversion Shares issuable to the Holder pursuant to such automatic conversion, whereupon, notwithstanding anything to the contrary set forth in this Note, the Holder may require the Company in one transaction or series of related transactions which raises an aggregate amount of at least One Million Five Hundred Thousand Dollars ($1,500,000) (the “Next Equity Financing”), to reduce the principal amount on of this Note shall being automatically be converted (regardless of whether or not converted, to the Note is surrendered to Payor) into the equity securities issued extent that such conversion would result in the Payor’s Next Equity Financing (Holder and its affiliates, in the “Next Equity Financing Stock”). Any accrued interest aggregate, beneficially owning more than 9.9% of the Company's outstanding shares of Common Stock at the time of such conversion by notifying the conversion shall be paid in cash Company by the Company. This Note shall convert into the number telephone or facsimile within one Trading Day of shares at the time of the “Next Equity Financing” equals to ___,000 shares its receipt of the Company’s Common Stock 's notice as required by this sentence. All or any portion of such reduced principal amount of this Note that is not automatically converted at an exercise price of $0.60 per share (the “Exercise Price”) This Note shall be deemed automatically cancelled immediately upon such conversion. As a condition precedent to the issuance election of the Next Equity Financing Stock to Holder upon such conversionpursuant the immediately preceding sentence, Holder shall execute and deliver such agreements, instruments and other documents as are executed and delivered by may be converted at the other investors in connection with their purchase sole discretion of the Next Equity Financing Stock. (b) In Company at any time, provided that such conversion will not result in the event of Holder and its affiliates, in the “Company’s Sale”aggregate, defined below, at the option of Payor, the principal hereunder and, at the option of the Payor, shall automatically be converted (regardless of whether or not the Note is surrendered to Payor) into the number of shares (the “Company’s Sale Stock”) equals to ____,000 shares beneficially owning more than 9.9% of the Company’s 's outstanding shares of Common Stock at an exercise price of $0.60 per share (the “Exercise Price”). This Note shall be deemed automatically cancelled immediately upon Stock, giving effect to such conversion.

Automatic Conversion. Subject to Section 5 below andUpon the occurrence of a Class C Automatic Conversion Event, at all the Company’s election then issued and request, Holder’s reaffirmation of Holder’s representations and warranties under Section 3 of the Convertible Note Purchase Agreement, the principal amount of this Note (and all interest accrued on this Note at the option of the Payor) outstanding Class C Non-Voting Common Shares shall be converted into the number of shares of common stock as follows: (a) In the event of a next equity financing automatically in accordance with Article 32.6 without any further action by the Company in one transaction or series of related transactions which raises an aggregate amount of at least One Million Five Hundred Thousand Dollars ($1,500,000) (the “Next Equity Financing”), the principal amount on this Note shall automatically be converted (regardless of holders thereof and whether or not the Note is certificates (if any) representing such shares are surrendered to Payorthe Company or its transfer agent. The Company shall provide all holders of the Class C Non-Voting Common Shares written notice as promptly as practicable following (a) into the equity securities issued date of a Class C Automatic Conversion Event informing the holders of the occurrence of a Class C Automatic Conversion Event or (b) the final date of the Earnout Period that a Class C Earnout Trigger Event was not satisfied as of the end of the Earnout Period and that the Class C Non-Voting Common Shares will be redeemed in accordance with these Articles. In the Payor’s Next Equity Financing case of a Class C Automatic Conversion Event (a) relating to the satisfaction of a Class C Earnout Trigger Event, the automatic conversion of the applicable Class C Non-Voting Common Shares shall be deemed to have occurred at the close of business on the date of the Class C Earnout Trigger Event or (b) relating to a Change of Control, the automatic conversion of the applicable Class C Non-Voting Common Shares shall be deemed to have occurred immediately prior to the consummation of such Change of Control (as applicable, the “Next Equity Financing StockClass C Automatic Conversion Time”). Any accrued interest outstanding The Company shall not be obligated to issue certificates evidencing the Common Shares issuable upon any automatic conversion (to the extent the Common Shares are certificated) unless the certificates evidencing such Class C Non-Voting Common Shares being converted, if any, are either delivered to the Company at the time registered office of the conversion shall be paid in cash by Company or to its transfer agent, or the Company. This Note shall convert into holder notifies the number of shares at the time of the “Next Equity Financing” equals to ___,000 shares of the Company’s Common Stock at Company or its transfer agent, that such certificates have been lost, stolen or destroyed and executes an exercise price of $0.60 per share (the “Exercise Price”) This Note shall be deemed automatically cancelled immediately upon such conversion. As a condition precedent agreement satisfactory to the issuance of Company to indemnify the Next Equity Financing Stock to Holder upon such conversionCompany (and its transfer agent, Holder shall execute and deliver such agreements, instruments and other documents as are executed and delivered if applicable) from any loss incurred by the other investors it in connection with their purchase of the Next Equity Financing Stocktherewith. (b) In the event of the “Company’s Sale”, defined below, at the option of Payor, the principal hereunder and, at the option of the Payor, shall automatically be converted (regardless of whether or not the Note is surrendered to Payor) into the number of shares (the “Company’s Sale Stock”) equals to ____,000 shares of the Company’s Common Stock at an exercise price of $0.60 per share (the “Exercise Price”). This Note shall be deemed automatically cancelled immediately upon such conversion.

Automatic Conversion. Subject to Section 5 below and, at Immediately upon the Company’s election and request, Holder’s reaffirmation of Holder’s representations and warranties under Section 3 closing of the Convertible Note Purchase Agreementnext round of equity financing in the Borrower, whether by way of a private placement, a public offering (including rights offering) or otherwise, in which the principal amount of this Note (and all interest accrued on this Note at the option Borrower issues equity securities of the Payor) shall be converted into Borrower for aggregate gross proceeds in excess of US$1,000,000 (including conversion of the number of shares of common stock as follows: (a) In the event of a next equity financing by the Company in one transaction or series of related transactions which raises an aggregate amount of at least One Million Five Hundred Thousand Dollars ($1,500,000outstanding Loan Amounts) (the “Next Qualified Equity Financing”), prior to the principal amount Maturity Date (as defined below), the outstanding Loan Amount shall be automatically converted, upon the closing of the Next Qualified Equity Financing, into such number of fully paid and non-assessable ordinary shares, par value NIS 0.1, of the Borrower (the “Ordinary Shares”) or other securities of the Borrower issued at such financing (collectively, the “Conversion Shares”), at the applicable Conversion Price (as defined below) and on this Note shall automatically be converted (regardless of whether the same terms and conditions at which such shares or not the Note is surrendered to Payor) into the equity securities are issued in the Payor’s Next Qualified Equity Financing Financing. Notwithstanding the foregoing (solely as it relates to the “Next Equity Financing Stock”conversion of Interest). Any accrued interest outstanding , at least ten (10) calendar days prior to such automatic conversion, the time Borrower shall provide a written notice to each Lender informing the Lender of the contemplated conversion and each Lender shall have five (5) calendar days following receipt of such notice to inform the Borrower, by providing written notice to Borrower within such 5-days period, that such Lender elected to be paid the Interest (rather than have such Interest converted into equity securities), in which case (i) the Principal Amount of such Lender shall be paid in cash by converted upon the Company. This Note shall convert into the number of shares at the time of the “Next Equity Financing” equals to ___,000 shares of the Company’s Common Stock at an exercise price of $0.60 per share (the “Exercise Price”) This Note shall be deemed automatically cancelled immediately upon such conversion. As a condition precedent to the issuance closing of the Next Qualified Equity Financing Stock and (ii) Borrower shall pay the Interest accrued to Holder upon such conversionLender upon, Holder shall execute and deliver such agreementsor promptly after, instruments and other documents as are executed and delivered by the other investors in connection with their purchase closing of the Next Qualified Equity Financing StockFinancing, but in any event not later than three (3) business days after such closing. (b) In the event of the “Company’s Sale”, defined below, at the option of Payor, the principal hereunder and, at the option of the Payor, shall automatically be converted (regardless of whether or not the Note is surrendered to Payor) into the number of shares (the “Company’s Sale Stock”) equals to ____,000 shares of the Company’s Common Stock at an exercise price of $0.60 per share (the “Exercise Price”). This Note shall be deemed automatically cancelled immediately upon such conversion.

Automatic Conversion. Subject to Section 5 below and, at the Company’s election and request, Holder’s reaffirmation of Holder’s representations and warranties under Section 3 of the Convertible Note Purchase Agreement, the principal amount of this Note (and all interest accrued on this Note at the option of the Payori) shall be converted into the number of All shares of common stock as follows: (a) In the event of a next equity financing by the Company in one transaction or series of related transactions which raises an aggregate amount of at least One Million Five Hundred Thousand Dollars ($1,500,000) (the “Next Equity Financing”), the principal amount on this Note Preferred Stock shall automatically be converted into shares of Common Stock at the applicable Conversion Price at the time in effect for such Preferred Stock, immediately prior to the earlier of: (regardless i) the closing of whether or not the Note is surrendered Corporation’s initial underwritten public offering of its Common Stock pursuant to Payor) into an effective registration statement under the equity securities issued in the Payor’s Next Equity Financing United States Securities Act of 1933, as amended (the “Next Equity Financing StockAct”). Any accrued interest outstanding , or equivalent law of another jurisdiction (an “IPO”) yielding at least US $30 million net to the time Corporation (a “Qualified IPO”); or (ii) the written election of the holders of the majority in interest of the Corporation’s issued and outstanding Senior Preferred Stock, provided that with respect to the conversion of Series G Preferred, as long as any originally issued shares of Series G Preferred remains outstanding the written consent of the holders of at least fifty-one percent (51 %) of the outstanding shares of Series G Preferred (the “Series G Investor Majority”) shall also be required, and provided further that with respect to the conversion of the Series F Preferred, as long as any of the originally issued shares of Series F Preferred remain outstanding the written consent of the holders of at least fifty-one percent (51%) of the outstanding shares of Series F Preferred (the “Series F Investor Majority”) shall also be required, and provided further that with respect to the conversion of the Series D Preferred, as long as any of the originally issued shares of Series D Preferred remain outstanding the written consent of the holders of at least sixty percent (60%) of the outstanding shares of Series D Preferred (the “Series D Investor Majority”) shall also be required. (ii) Notwithstanding the foregoing and without amending or derogating in any way from the definition of the term “Qualified IPO”, with respect to the conversion of the Series G Preferred, Series F Preferred and Series D Preferred upon a Qualified IPO (and with respect to the Series G Preferred, upon any IPO), the following provisions shall apply: (w) the Conversion Price of the Series G Preferred shall be paid in cash determined as follows: (A) if the price of the shares sold by the Company. This Note shall convert into underwriters to the number of shares at the time of public before deducting underwriting discounts and related offering costs for such Qualified IPO (the “Next Equity Financing” equals IPO Price”) is equal to ___,000 shares of or greater than $8.8243 (as adjusted for any stock splits, recapitalizations, stock dividends or the Company’s Common Stock at an exercise like including without limitation any adjustment pursuant to this subsection (ii)), the Conversion Price then in effect for the Series G Preferred shall not be affected thereby, and (B) if the IPO price of is less than $0.60 8.8243 per share (as adjusted for any stock splits, recapitalizations, stock dividends or the “Exercise Price”) This Note like including without limitation any adjustment pursuant to this subsection (ii)), the Conversion Price then in effect for the Series G Preferred shall be deemed automatically cancelled immediately upon such conversion. As a condition precedent reduced to the issuance IPO Price concurrently with the closing of the Next Equity Financing Stock to Holder upon such conversion, Holder shall execute and deliver such agreements, instruments and other documents as are executed and delivered by IPO; (x) the other investors in connection with their purchase Conversion Price of the Next Equity Financing Stock. Series F Preferred shall be determined as follows: (bA) In if the event IPO Price is at least two (2.0) times the Series F Original Issue Price, the Conversion Price then in effect for the Series F Preferred shall not be affected thereby; and (B) if the IPO Price is less than two (2.0) times the Series F Original Issue Price, the Conversion Price shall be the lower of (i) the Conversion Price then in effect for the Series F Preferred, and (ii) the Series F Original Issue Price multiplied by a fraction, the denominator of which is the Series F Preference and the numerator of which is the IPO Price; and (y) the Conversion Price of the “Company’s Sale”, defined below, Series D Preferred shall be determined as follows: (A) if the IPO Price is at least one and one-half (1.5) times the option of PayorSeries D Original Issue Price, the principal hereunder andConversion Price then in effect for the Series D Preferred shall not be affected thereby; (B) if the IPO Price is less than one and one-half (1.5) times the Series D Original Issue Price and the original Conversion Price has not otherwise been subject to adjustment, at the option Conversion Price shall be two-thirds (2/3) of the Payororiginal Conversion Price; and (C) if the IPO Price is less than one and one-half (1.5) times the Series D Original Issue Price and the original Conversion Price has otherwise been subject to adjustment, the Conversion Price shall automatically be converted the lower of (regardless of whether or not i) the Note is surrendered to PayorConversion Price then in effect for the Series D Preferred, and (ii) into the number of shares two-thirds (the “Company’s Sale Stock”2/3) equals to ____,000 shares of the Company’s Common Stock at an exercise price original Conversion Price. For the removal of $0.60 per share doubt, to the extent that Conversion Price for any of the Series G Preferred, Series F Preferred or Series D Preferred is adjusted pursuant to sub-sections (w)(B), (x)(B), (y)(B) or (y)(C) above respectively, then any such adjustment to the “Exercise Price”). This Note Conversion Price of the Series G Preferred, Series F Preferred or Series D Preferred shall be deemed automatically cancelled immediately upon iterative (i.e. a circular calculation shall be employed) so that each of the Series G Preferred, Series F Preferred and Series D Preferred shall following all such conversionadjustments receive its full entitlement pursuant to sub-sections (w)(B), (x)(B), (y)(B) or (y)(C) above.

Automatic Conversion. (a) Subject to Section 5 below and9.15, if at any time on or prior to Stated Maturity, the Closing Price of the Common Stock has exceeded two hundred percent (200%) of the Conversion Price then in effect for at least thirty (30) consecutive Trading Days, all Securities then Outstanding shall automatically convert as provided herein (an “Automatic Conversion”); provided, however, that such Automatic Conversion shall be subject to Section 9.02 and Section 9.15 hereof. Such Securities shall be converted as soon as practicable, but in no event later than the third Business Day following the Trading Day upon which this Automatic Conversion requirement is triggered (the date of such conversion, the “Automatic Conversion Date”). (b) The shares of Common Stock that the Holders shall receive upon Automatic Conversion shall include any shares of Common Stock required to be delivered in respect of a Make-Whole Premium in accordance with Section 9.05 hereof. (c) At the request and expense of the Company’s election , the Company shall mail or cause to be mailed to each Holder notice (the “Automatic Conversion Notice”) of an Automatic Conversion as soon as practicable and requestno later than the first Business Day following Automatic Conversion. If the Company gives such notice, Holder’s reaffirmation it shall also deliver a copy of Holder’s representations and warranties under Section 3 such Automatic Conversion Notice to the Trustee. Such mailing shall be by first class mail. Such notice, if mailed in the manner herein provided, shall be conclusively presumed to have been duly given, whether or not the holder receives such notice. In any case, failure to give such notice by mail or any defect in the notice to the holder of any Security shall not affect the validity of the Convertible Note Purchase Agreement, proceedings for the Automatic Conversion of any other Security. (d) Each Automatic Conversion Notice shall state: (1) the aggregate principal amount of this Note Securities to be automatically converted, (and all interest accrued on this Note at 2) the option CUSIP, ISIN or similar number or numbers of the PayorSecurities being automatically converted, (3) shall be converted into the Automatic Conversion Date, (4) that on and after said date Interest thereon will cease to accrue, (5) the number of shares of common stock as follows:Common Stock, if any, to be delivered in respect of a Make-Whole Premium pursuant Section 9.05 hereof, (a6) the place or places where the Securities are to be surrendered for conversion, and (7) the Conversion Price then in effect. (e) Prior to or contemporaneous with the mailing of an Automatic Conversion Notice to the Holders, the Company shall issue a press release containing the information contained in the Automatic Conversion Notice. (f) In the event of a next equity financing by an Automatic Conversion, the Company shall issue and deliver a certificate or certificates for the number of Conversion Shares and any shares of Common Stock required to be delivered in one transaction respect of a Make-Whole Premium for delivery to the Holders as promptly after the Automatic Conversion Date as practicable in accordance with the provisions of this Article 9, but in no event later than the close of business on the third next succeeding Business Day following such Automatic Conversion Date. (g) All Securities subject to an Automatic Conversion shall be delivered to the Trustee or series its agent to be cancelled by or at the direction of related transactions the Trustee, which raises an aggregate amount shall dispose of at least One Million Five Hundred Thousand Dollars the same as provided in Section 3.9 of the Original Indenture. ($1,500,000h) Upon Automatic Conversion, Interest on the Securities shall cease to accrue and shall cease to be entitled to any benefit or security hereunder, and the holders thereof shall have no right in respect of such Securities except the right to receive the Common Stock and cash, if any, to which they are entitled pursuant to this Section 9.14. (i) If any of the “Next Equity Financing”), the principal amount on provisions of this Note shall automatically be converted (regardless of whether or not the Note is surrendered to Payor) into the equity securities issued in the Payor’s Next Equity Financing (the “Next Equity Financing Stock”). Any accrued interest outstanding Section 9.14 are inconsistent with applicable law at the time of the conversion such Automatic Conversion, such law shall be paid in cash by the Company. This Note shall convert into the number of shares at the time of the “Next Equity Financing” equals to ___,000 shares of the Company’s Common Stock at an exercise price of $0.60 per share (the “Exercise Price”) This Note shall be deemed automatically cancelled immediately upon such conversion. As a condition precedent to the issuance of the Next Equity Financing Stock to Holder upon such conversion, Holder shall execute and deliver such agreements, instruments and other documents as are executed and delivered by the other investors in connection with their purchase of the Next Equity Financing Stockgovern. (b) In the event of the “Company’s Sale”, defined below, at the option of Payor, the principal hereunder and, at the option of the Payor, shall automatically be converted (regardless of whether or not the Note is surrendered to Payor) into the number of shares (the “Company’s Sale Stock”) equals to ____,000 shares of the Company’s Common Stock at an exercise price of $0.60 per share (the “Exercise Price”). This Note shall be deemed automatically cancelled immediately upon such conversion.

Automatic Conversion. Subject to Section 5 below and(i) Each share of Series A Preferred shall automatically be converted into shares of Common Stock, based on the then-effective Series A Preferred Conversion Price, (A) at any time upon the Company’s affirmative election and request, Holder’s reaffirmation of Holder’s representations and warranties under Section 3 of the Convertible Note Purchase Agreementholders of at least a majority of the outstanding shares of the Series A Preferred, or (B) immediately upon the closing of a firmly underwritten public offering pursuant to an effective registration statement under the Securities Act of 1933, as amended, covering the offer and sale of Common Stock for the account of the Company in which (x) the per share price is at least $3.00 (as adjusted for stock splits, dividends, recapitalizations and the like) and (y) the gross cash proceeds to the Company (before underwriting discounts, commissions and fees) are at least $7,500,000. Upon such automatic conversion, any declared and unpaid dividends shall be paid in accordance with the provisions of Section 4(d). (ii) Upon the occurrence of either of the events specified in Section 4(k)(i) above, the principal amount outstanding shares of this Note (and all interest accrued on this Note at the option of the Payor) Series A Preferred shall be converted into automatically without any further action by the holders of such shares and whether or not the certificates representing such shares are surrendered to the Company or its transfer agent; provided, however, that the Company shall not be obligated to issue certificates evidencing the shares of Common Stock issuable upon such conversion unless the certificates evidencing such shares of Series A Preferred are either delivered to the Company or its transfer agent as provided below, or the holder notifies the Company or its transfer agent that such certificates have been lost, stolen or destroyed and executes an agreement satisfactory to the Company to indemnify the Company from any loss incurred by it in connection with such certificates. Upon the occurrence of such automatic conversion of the Series A Preferred, the holders of Series A Preferred shall surrender the certificates representing such shares at the office of the Company or any transfer agent for the Series A Preferred. Thereupon, there shall be issued and delivered to such holder promptly at such office and in its name as shown on such surrendered certificate or certificates, a certificate or certificates for the number of shares of common stock as follows: (a) In Common Stock into which the event shares of a next equity financing by Series A Preferred surrendered were convertible on the Company in one transaction or series of related transactions date on which raises an aggregate amount of at least One Million Five Hundred Thousand Dollars ($1,500,000) (the “Next Equity Financing”)such automatic conversion occurred, the principal amount on this Note shall automatically be converted (regardless of whether or not the Note is surrendered to Payor) into the equity securities issued in the Payor’s Next Equity Financing (the “Next Equity Financing Stock”). Any accrued interest outstanding at the time of the conversion and any declared and unpaid dividends shall be paid in cash by accordance with the Company. This Note shall convert into the number provisions of shares at the time of the “Next Equity Financing” equals to ___,000 shares of the Company’s Common Stock at an exercise price of $0.60 per share (the “Exercise Price”) This Note shall be deemed automatically cancelled immediately upon such conversion. As a condition precedent to the issuance of the Next Equity Financing Stock to Holder upon such conversion, Holder shall execute and deliver such agreements, instruments and other documents as are executed and delivered by the other investors in connection with their purchase of the Next Equity Financing StockSection 4(d). (b) In the event of the “Company’s Sale”, defined below, at the option of Payor, the principal hereunder and, at the option of the Payor, shall automatically be converted (regardless of whether or not the Note is surrendered to Payor) into the number of shares (the “Company’s Sale Stock”) equals to ____,000 shares of the Company’s Common Stock at an exercise price of $0.60 per share (the “Exercise Price”). This Note shall be deemed automatically cancelled immediately upon such conversion.

Automatic Conversion. Subject The Company may elect to automatically convert (“Automatic Conversion”) the Securities on or prior to maturity if the Daily Market Price of the Common Stock has exceeded 150% of the Conversion Price for at least 20 Trading Days out of the 30 consecutive Trading Days ending within five Trading Days prior to the date of (the “Notice Date”) the notice of automatic conversion (the “Automatic Conversion Notice”). In order to effect an Automatic Conversion, the Company shall give to the holder of each Security to be so converted an Automatic Conversion Notice. Such Automatic Conversion Notice shall state: (i) the date on which the Securities identified in the Automatic Conversion Notice will be converted (the “Automatic Conversion Date”); (ii) the CUSIP number or numbers of such Securities; (iii) the place or places where such Securities in certificated form are to be surrendered for exchange of the shares of Common Stock to be issued upon conversion thereof; (iv) the lowest Daily Market Price of the Common Stock for at least 20 Trading Days out of the 30 consecutive Trading Days ending within five Trading Days prior to the giving of the Automatic Conversion Notice; and (v) the Conversion Price at which such Automatic Conversion is to be effected. If the Company elects to effect an Automatic Conversion Notice in respect of fewer than all the Securities, the Automatic Conversion Notice relating to such Automatic Conversion shall reference this Section 5 below and5.15 and shall identify the Securities to be converted. In case any Security is to be converted in part only, the Automatic Conversion Notice relating thereto shall state the portion of the principal amount thereof to be converted and shall state that on and after the date fixed for conversion, upon surrender of such Security, a new Securities in principal amount equal to the portion thereof not converted will be issued. In the case where the Company elects to effect an Automatic Conversion in respect of any portion of the Securities evidenced by the Global Security, the beneficial interests in the Global Security to be subject to such Automatic Conversion shall be selected by the Depositary in accordance with the applicable standing procedures of the Depositary’s book-entry conversion program, and in connection with such Automatic Conversion the Depositary shall arrange in accordance with such procedures for appropriate endorsements and transfer documents, if required by the Company or the Trustee or conversion agent, and payment of any transfer taxes if required pursuant hereunder. The Company or, at the Company’s election request and request, Holder’s reaffirmation of Holder’s representations and warranties under Section 3 expense of the Convertible Note Purchase AgreementCompany, the principal amount of this Note (and all interest accrued on this Note at Trustee, upon ten Business Days’ notice prior to the option date of the Payorrequested mailing (or upon such shorter notice period as may be reasonably acceptable to the Trustee) shall give to each holder of Securities to be converted into in an Automatic Conversion, at its last address as the number same shall appear on the Registrar, an Automatic Conversion Notice in respect thereof. The date of shares Automatic Conversion of common stock as follows: (a) In the event of a next equity financing Securities shall be not less than 7 days nor more than 15 days from the Notice Date. Such Automatic Conversion Notice shall be irrevocable and shall be mailed by first class mail and, if mailed in the Company in one transaction or series of related transactions which raises an aggregate amount of at least One Million Five Hundred Thousand Dollars ($1,500,000) (the “Next Equity Financing”)manner herein provided, the principal amount on this Note shall automatically be converted (regardless of conclusively presumed to have been given, whether or not the Note is surrendered holder receives it. In any case, failure to Payor) into the equity securities issued give such notice or any defect in the Payor’s Next Equity Financing (notice to the “Next Equity Financing Stock”). Any accrued interest outstanding at holder of any Security designated for Automatic Conversion in whole or in part shall not affect the time validity of the conversion proceedings for the Automatic Conversion of any such Security. The Company shall be paid in cash also deliver a copy of each Automatic Conversion Notice given by the Company. This Note shall convert into the number of shares at the time of the “Next Equity Financing” equals to ___,000 shares of the Company’s Common Stock at an exercise price of $0.60 per share (the “Exercise Price”) This Note shall be deemed automatically cancelled immediately upon such conversion. As a condition precedent it to the issuance of the Next Equity Financing Stock to Holder upon such conversion, Holder shall execute and deliver such agreements, instruments and other documents as are executed and delivered by the other investors in connection with their purchase of the Next Equity Financing StockTrustee. (b) In the event of the “Company’s Sale”, defined below, at the option of Payor, the principal hereunder and, at the option of the Payor, shall automatically be converted (regardless of whether or not the Note is surrendered to Payor) into the number of shares (the “Company’s Sale Stock”) equals to ____,000 shares of the Company’s Common Stock at an exercise price of $0.60 per share (the “Exercise Price”). This Note shall be deemed automatically cancelled immediately upon such conversion.

Automatic Conversion. Subject to Section 5 below and, at the Company’s election and request, Holder’s reaffirmation of Holder’s representations and warranties under Section 3 of the Convertible Note Purchase Agreement, the principal amount of this Note (and all interest accrued on this Note at the option of the Payor) shall i. The Conversion Amount will be automatically converted into the number type of shares of common stock as follows: (a) In the event of a next equity financing by the Company in one transaction or series of related transactions which raises an aggregate amount of at least One Million Five Hundred Thousand Dollars ($1,500,000) (the “Next Equity Financing”), the principal amount on this Note shall automatically be converted (regardless of whether or not the Note is surrendered to Payor) into the equity securities Securities issued in a Qualified Financing upon the Payor’s Next Equity Financing (the “Next Equity Financing Stock”). Any accrued interest outstanding closing of such Qualified Financing; provided, however, that if at the time of the closing of such Qualified Financing, an Event of Default shall exist, such conversion only shall occur at the election of the Lender. The number of shares of such Equity Securities to be issued upon such conversion shall be equal to the quotient obtained by dividing the Conversion Amount on the date of conversion by the lowest price per share paid in cash by or cash equivalents for the CompanyEquity Securities issued in the Qualified Financing. This Note At least five business days prior to the closing of the Qualified Financing the Company shall convert notify the Lender in writing of the terms under which the Equity Securities of the Company will be sold in such financing. ii. The Conversion Amount will be automatically converted into shares of Hightimes Common Stock upon the number consummation of shares a Qualified Public Offering; provided, however, that if at the time of the consummation of such Qualified Public Offering, an Event of Default shall exist, such conversion only shall occur at the election of the Lender. The number of shares of Hightimes Common Stock to be issued upon such conversion shall be equal to the quotient obtained by dividing the Conversion Amount on the date of the consummation of the Qualified Public Offering, by the price to public per share of the Hightimes Common Stock sold in the Qualified Public Offering. At least five business days prior to the consummation of the Qualified Public Offering, the Company shall notify the Lender in writing of the terms under which the Hightimes Common Stock of the Company will be issued in the Qualified Public Offering. Hightimes shall deliver a notice of conversion, the form of which is attached hereto as Annex A (the “Next Notice of Conversion”) promptly (and in any event within two business days) following the occurrence of the Qualified Public Offering. The Notice of Conversion shall specify therein the number of Conversion Shares and the applicable Conversion Price Per Share. iii. Immediately prior to the consummation of a Sale of the Company, the Conversion Amount will be automatically converted into the type of Equity Securities issued in the Company’s most recent round of financing that would otherwise meet the criteria of a Qualified Financing if it had occurred following the date this Note (a “Prior Qualified Financing” equals ”); provided, however, that if at the time of the consummation of a Sale of the Company, an Event of Default shall exist, such conversion only shall occur at the election of the Lender. The number of shares of such Equity Securities to ___,000 be issued upon such conversion shall be equal to the quotient obtained by dividing the Conversion Amount due on this Note on the date of conversion, by the lowest price per share of the Equity Securities issued in the Prior Qualified Financing. The Holder shall be afforded the right prior to the consummation of such Sale of the Company to timely exercise, convert or exchange any such Equity Securities so issued upon conversion of this Note. iv. The Conversion Amount will automatically and without any further action on the part of the Lender, convert into shares of Hightimes Common Stock following the consummation of the Reg A+ Offering Event on the Conversion Date. The number of shares of Hightimes Common Stock to be issued to the Holder upon such conversion of this Note shall be equal to the result of dividing (i) the applicable Conversion Amount, by (ii) the applicable Conversion Price Per Share. Hightimes shall deliver a Notice of Conversion promptly (and in any event within two business days) following the Conversion Determination Date. The Notice of Conversion shall specify therein the number of Conversion Shares and the applicable Conversion Price Per Share. v. If a Qualified Financing, a Qualified Public Offering, a Sale of the Company or the Reg A+ Offering Event has not occurred by the Maturity Date, then the Conversion Amount as of the Maturity Date shall either, at the Holder’s election, (A) be repaid in cash in full, or (B) convert into shares of the Company’s Common most senior type of Convertible Preferred Stock at an exercise price of $0.60 per share (the “Exercise Price”) This Note shall be deemed automatically cancelled immediately upon such conversion. As a condition precedent to the issuance outstanding as of the Next Equity Financing Maturity Date (or, if there is no Convertible Preferred Stock to Holder upon such conversion, Holder shall execute and deliver such agreements, instruments and other documents outstanding as are executed and delivered by the other investors in connection with their purchase of the Next Equity Financing Maturity Date, into shares of Hightimes Common Stock. (b) In the event of the “Company’s Sale”, defined below, at the option of Payor, the principal hereunder and, at the option of the Payor, shall automatically be converted (regardless of whether or not the Note is surrendered to Payor) into the ). The number of shares (of Convertible Preferred Stock or Hightimes Common Stock to be issued upon such conversion shall be equal to the “Company’s Sale Stock”) equals to ____,000 shares quotient obtained by dividing the Conversion Amount as of the Company’s Common Stock at an exercise price of $0.60 per share (Maturity Date, by the “Exercise Independent Valuation Price”). This Note shall be deemed automatically cancelled immediately upon such conversion.

Automatic Conversion. Subject to Section 5 below and, at the Company’s election and request, Holder’s reaffirmation of Holder’s representations and warranties under Section 3 of the Convertible Note Purchase Agreement, the principal amount of this Note (and all interest accrued on this Note at the option of the Payor) shall be converted into the number of shares of common stock as follows: (a) In the event of a next equity financing by the Company in one transaction or series of related transactions which raises an aggregate amount of at least One Million Five Hundred Thousand Dollars ($1,500,000) (the “Next Equity Financing”), the principal amount on this This Note shall automatically be converted into shares of Common Stock (regardless an “Automatic Conversion”) upon (x) the listing of whether or Common Stock on a Qualified Eligible Market, but only if no Equity Conditions Failure shall have occurred as of the Uplisting Date and (y) in connection with, but not later than, the Note is surrendered listing of the Common Stock on a Qualified Eligible Market, the consummation by the Company of a firm commitment underwritten public offering of Common Stock and/or Common Stock Equivalents of the Company pursuant to Payoran effective registration statement under the Securities Act, that results in gross proceeds to the Company of not less than $5,000,000; provided, that the Required Holders may waive the requirement set forth in this clause (y) into the equity securities issued in the Payor’s Next Equity Financing (the a “Next Equity Financing StockQualified Public Offering”). Any accrued interest outstanding at The Automatic Conversion shall be effected pursuant to Section 3 using a Conversion Price that is equal to the time lowest of (i) the then-effective applicable Conversion Price, (ii) 80% of the conversion shall be paid in cash by the Company. This Note shall convert into the number of shares at the time arithmetic average of the “Next Equity Financing” equals to ___,000 shares VWAPs of the Company’s Common Stock at an exercise during the three Trading Days immediately prior to the Uplisting Date and (iii) the issuance price of $0.60 per share the Qualified Public Offering, if any (which, for the avoidance of doubt, if more than one security is issued to an investor in connection therewith, will be deemed to be the “Exercise Price”) This Note shall be deemed automatically cancelled immediately upon such conversion. As a condition precedent to the issuance of the Next Equity Financing Stock to Holder upon such conversion, Holder shall execute and deliver such agreements, instruments and other documents as are executed and delivered by the other investors in connection with their purchase of the Next Equity Financing Stock. (b) In the event of the “Company’s Sale”, defined below, at the option of Payor, the principal hereunder and, at the option of the Payor, shall automatically be converted (regardless of whether or not the Note is surrendered to Payor) into the number of shares (the “Company’s Sale Stock”) equals to ____,000 shares of the Company’s Common Stock at an exercise price of $0.60 per share (the “Exercise Priceunit price”). This Note and all of the outstanding Other Notes shall be converted automatically on the Uplisting Date, which date, for the avoidance of doubt, shall be deemed automatically cancelled immediately upon a Conversion Date for all purposes under this Note, without any further action by the Holder and the holders of the Other Notes and whether or not this Note or the Other Notes are surrendered to the Company or its Transfer Agent. Upon the occurrence of such conversionAutomatic Conversion of this Note and the Other Notes, including, without limitation, the delivery of the applicable Conversion Shares, this Note will be deemed converted in full on the Uplisting Date, and the Holder and the holders of the Other Notes shall be deemed to have surrendered such Notes to the Company.

Automatic Conversion. Subject Each Stockholder agrees that immediately prior to Section 5 below andthe closing of a Qualified IPO, at the Company’s election and request, Holder’s reaffirmation each share of Holder’s representations and warranties under Section 3 Class C Voting Common Stock held by it shall be automatically converted (i) into a share of Class A Voting Common Stock on a one-for-one basis or (ii) into a share or shares of the Convertible Note Purchase Agreementclass of securities into which the Class A Voting Common Stock has been or is being converted into, as the principal amount case may be, with each share of this Note (and all interest accrued on this Note at the option of the Payor) shall be converted Class C Voting Common Stock converting into the same number of shares of common stock such securities as follows:each share of Class A Voting Common Stock has converted or will be converted into. Such conversion shall occur automatically and without any further action on the part of the applicable holder of Class C Voting Common Stock. (aSection 1.4 Amendment to Section 3.3(d)(i) – Second Round Subscribers. Section 3.3(d)(i) of the Stockholders Agreement is hereby amended to add the double underlined language below: “In the event that one or more Qualified Major Stockholders fail to give a properly completed Exercise Notice in respect of a next equity financing by all or part of the Company in one transaction Offered Securities offered to it, him or series of related transactions which raises an aggregate amount of at least One Million Five Hundred Thousand Dollars ($1,500,000) her pursuant to Section 3.3(a), the Offered Securities not subscribed for (the “Next Equity FinancingSecond Round Securities”)) shall be allocated among those Qualified Major Stockholders (together with and including the Qualified Stockholders as defined under the ▇▇▇▇ Stockholders Agreement) (if any) (“Second Round Subscribers”) who indicate in their respective Exercise Notices a desire to subscribe for more than their Proportionate Interest of the total Offered Securities offered pursuant to Section 3.3(a) up to any maximum number set out in the Exercise Notice. If the number or amount of Second Round Securities is less than the number or amount desired to be taken up by Second Round Subscribers, the principal amount Second Round Securities shall be allocated among the Second Round Subscribers on this Note shall automatically be converted a pro rata basis (regardless of whether or not such that all the Note is surrendered Second Round Securities are allocated) according to Payor) into their respective Proportionate Interests (rounded, as appropriate, to the equity securities issued in the Payor’s Next Equity Financing (the “Next Equity Financing Stock”nearest whole number). Any accrued interest outstanding at the time of the conversion shall be paid in cash by the Company. This Note shall convert into the number of shares at the time of the “Next Equity Financing” equals to ___,000 shares of the Company’s Common Stock at an exercise price of $0.60 per share (the “Exercise Price”) This Note shall be deemed automatically cancelled immediately upon such conversion. As a condition precedent to the issuance of the Next Equity Financing Stock to Holder upon such conversion, Holder shall execute and deliver such agreements, instruments and other documents as are executed and delivered by the other investors in connection with their purchase of the Next Equity Financing Stock. (b) In the event of that not all Second Round Securities are taken up and purchased by the “Company’s Sale”, defined below, at the option of PayorQualified Stockholders, the principal hereunder andCorporation may issue such Second Round Securities not so subscribed for at a price not less than that set out in the Offer Notice to such Persons as the Board may determine in its discretion, at the option of the Payor, shall automatically be converted (regardless of whether or not the Note is surrendered subject to Payorcompliance with Section 4.4 hereof. Section 1.5 Amendment to Section 3.3(e) into the number of shares (the “Company’s Sale Stock”) equals to ____,000 shares of the Company’s Common Stock at an exercise price of $0.60 per share (the “Exercise Price”). This Note shall be deemed automatically cancelled immediately upon such conversion.–

Automatic Conversion. Subject to Section 5 below and, (a) Neither this Note nor any portion of this Note shall be converted into shares of Common Stock at the Company’s election any time unless and request, Holder’s reaffirmation until a Forced Conversion Event shall have occurred. All of Holder’s representations and warranties under Section 3 of the Convertible Note Purchase Agreement, the principal amount of this Note and any accrued and unpaid interest due hereon shall automatically and without any action on the part of the Holder convert into fully paid and nonassessable shares of Common Stock on the Trading Day immediately following the occurrence of a Forced Conversion Event (the "Automatic Conversion Date"). On the Automatic Conversion Date, this Note and all interest accrued thereon shall automatically and with no action on the part of the Holder convert into such number of fully paid and nonassessable shares of Common Stock as is obtained by: (i) adding (A) the principal amount of this Note and (B) the amount of any accrued but unpaid interest on this Note at and (ii) dividing the option result obtained pursuant to clause (i) above by the Conversion Price then in effect (such shares, the "Conversion Shares"). The Company shall provide prompt written notice of the PayorAutomatic Conversion Date to the Holder. (b) Promptly after the Automatic Conversion Date, the Holder of this Note shall deliver this Note to the Company (or, in lieu thereof, an appropriate lost security affidavit in the event this Note shall have been lost or destroyed, together with a customary indemnity agreement) to the Company at its principal office (or such other office or agency of the Company as the Company may designate by notice in writing to the Holder), together with a statement of the name or names (with address) in which the certificate or certificates for the Conversion Shares issuable upon such conversion shall be converted issued. Promptly following the surrender of this Note (or, in lieu thereof, delivery of an appropriate lost security affidavit in the event this Note shall have been lost or destroyed, together with a customary indemnity agreement) as aforesaid, but in no event more than three (3) Business Days thereafter, the Company shall issue and deliver, or cause to be issued and delivered, to the Holder, registered in such name or names as the Holder may direct in writing, a certificate or certificates for the number of whole Conversion Shares issuable upon the conversion of this Note. To the extent permitted by law, such conversion shall be deemed to have been effected, and the Conversion Price shall be determined, as of the close of business on the Automatic Conversion Date, and at such time, the rights of the Holder shall cease with respect to the Note being converted, and the Person or Persons in whose name or names any certificate or certificates for Conversion Shares shall be issuable upon such conversion shall be deemed to have become the holder or holders of record of the Conversion Shares represented thereby. (c) No fractional shares shall be issued upon any conversion of this Note into Common Stock. If any fractional share of Common Stock would, except for the provisions of the first sentence of this Section 4(c), be delivered upon such conversion, the Company, in lieu of delivering such fractional share, shall pay to the Holder an amount in cash equal to the Market Price of such fractional share of Common Stock. (d) If the Company shall, at any time or from time to time while this Note is outstanding, pay a dividend or make a distribution on its Common Stock in shares of Common Stock, subdivide its outstanding shares of Common Stock into a greater number of shares or combine its outstanding shares of Common Stock into a smaller number of shares or issue by reclassification of its outstanding shares of Common Stock any shares of its capital stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing corporation), then (i) the Conversion Price in effect immediately prior to the date on which such change shall become effective shall be adjusted by multiplying such Conversion Price by a fraction, the numerator of which shall be the number of shares of common stock as follows:Common Stock outstanding immediately prior to such change and the denominator of which shall be the number of shares of Common Stock outstanding immediately after giving effect to such change and (ii) the number of Conversion Shares issuable upon conversion of this Note shall be adjusted by multiplying the number of Conversion Shares issuable upon conversion of this Note immediately prior to the date on which such change shall become effective by a fraction, the numerator of which is shall be the Conversion Price in effect immediately prior to the date on which such change shall become effective and the denominator of which shall be the Conversion Price in effect immediately after giving effect to such change, calculated in accordance with clause (i) above. Such adjustments shall be made successively whenever any event listed above shall occur. (ae) If any capital reorganization, reclassification of the capital stock of the Company, consolidation or merger of the Company with another corporation in which the Company is not the survivor, or sale, transfer or other disposition of all or substantially all of the Company's assets to another Person shall be effected, then, as a condition of such reorganization, reclassification, consolidation, merger, sale, transfer or other disposition, lawful and adequate provision shall be made whereby the Holder shall thereafter have the right to purchase and receive upon the basis and upon the terms and conditions herein specified and in lieu of the Conversion Shares immediately theretofore issuable upon conversion of this Note such shares of stock, securities or assets as would have been issuable or payable with respect to or in exchange for a number of Conversion Shares equal to the number of Conversion Shares immediately theretofore issuable upon conversion of this Note, had such reorganization, reclassification, consolidation, merger, sale, transfer or other disposition not taken place, and in any such case appropriate provision shall be made with respect to the rights and interests of the Holder to the end that the provisions hereof (including, without limitation, provision for adjustment of the Conversion Price) shall thereafter be applicable, as nearly equivalent as may be practicable in relation to any shares of stock, securities or assets thereafter deliverable upon the conversion hereof. The Company shall not effect any such consolidation, merger, sale, transfer or other disposition unless prior to or simultaneously with the consummation thereof the successor corporation (if other than the Company) resulting from such consolidation or merger, or the corporation purchasing or otherwise acquiring such assets or other appropriate corporation or entity shall assume the obligation to deliver to the Holder, at the last address of the Holder appearing on the books of the Company, such shares of stock, securities or assets as, in accordance with the foregoing provisions, the Holder may be entitled to purchase, without regard to any conversion limitation specified in Section 4, and the other obligations under this Note. The provisions of this paragraph (e) shall similarly apply to successive reorganizations, reclassifications, consolidations, mergers, sales, transfers or other dispositions. (f) In case the Company shall fix a payment date for the making of a distribution to all holders of Common Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness or assets (other than cash dividends or cash distributions payable out of consolidated earnings or earned surplus or dividends or distributions referred to in Section 4(d)), or subscription rights or warrants, the Conversion Price to be in effect after such payment date shall be determined by multiplying the Conversion Price in effect immediately prior to such payment date by a fraction, the numerator of which shall be the total number of shares of Common Stock outstanding multiplied by the Market Price of Common Stock immediately prior to such payment date, less the fair market value (as determined by the Board in good faith) of said assets or evidences of indebtedness so distributed, or of such subscription rights or warrants, and the denominator of which shall be the total number of shares of Common Stock outstanding multiplied by such Market Price immediately prior to such payment date. Such adjustment shall be made successively whenever such a payment date is fixed. (g) An adjustment to the Conversion Price shall become effective immediately after the payment date in the case of each dividend or distribution and immediately after the effective date of each other event which requires an adjustment. (h) In the event that, as a result of a next equity financing by an adjustment made pursuant to this Section 4, the Holder shall become entitled to receive any shares of capital stock of the Company in one transaction or series other than shares of related transactions which raises an aggregate amount of at least One Million Five Hundred Thousand Dollars ($1,500,000) (the “Next Equity Financing”)Common Stock, the principal amount on number of such other shares so receivable upon conversion of this Note shall automatically be converted subject thereafter to adjustment from time to time in a manner and on terms as nearly equivalent as practicable to the provisions contained in this Note. (regardless i) Except as provided in Section 4(j) hereof, if and whenever the Company shall issue or sell, or is, in accordance with any of whether Sections 4(i)(i) through 4(i)(vii) hereof, deemed to have issued or not sold, any Additional Shares of Common Stock (as defined below) for no consideration or for a consideration per share less than the Note is surrendered Conversion Price in effect immediately prior to Payor) into the equity securities issued in the Payor’s Next Equity Financing (the “Next Equity Financing Stock”). Any accrued interest outstanding at the time of such issuance or sale, then and in each such case (a "Trigger Issuance") the conversion then-existing Conversion Price, shall be paid in cash by reduced, as of the Company. This Note shall convert into close of business on the effective date of the Trigger Issuance, to a price determined as follows: Adjusted Conversion Price = (A x B) + D ----------- A+C where "A" equals the number of shares at the time of the “Next Equity Financing” equals to ___,000 shares of the Company’s Common Stock at an exercise price outstanding, including Additional Shares of $0.60 per share Common Stock (the “Exercise Price”) This Note shall be deemed automatically cancelled immediately upon such conversion. As a condition precedent to the issuance of the Next Equity Financing Stock to Holder upon such conversion, Holder shall execute and deliver such agreements, instruments and other documents as are executed and delivered by the other investors in connection with their purchase of the Next Equity Financing Stock. (b) In the event of the “Company’s Sale”, defined below) deemed to be issued hereunder, at the option of Payor, the principal hereunder and, at the option of the Payor, shall automatically be converted (regardless of whether or not the Note is surrendered to Payor) into the number of shares (the “Company’s Sale Stock”) equals to ____,000 shares of the Company’s Common Stock at an exercise price of $0.60 per share (the “Exercise Price”). This Note shall be deemed automatically cancelled immediately upon preceding such conversion.Trigger Issuance;

Automatic Conversion. Subject to Except as provided in this Section 5 below and3, at each share of Series B Convertible Preferred Stock shall automatically, and without any further action on the Company’s election and request, Holder’s reaffirmation of Holder’s representations and warranties under Section 3 part of the Convertible Note Purchase Agreementholder thereof, convert into fifty shares of Common Stock (as it may be adjusted in accordance with Section 7(b), the principal amount “Conversion Ratio”) immediately following the satisfaction of all of the following conditions: (i) the approval of the Seventh Amended and Restated Certificate of Incorporation of the Corporation (the “New Charter”) by the stockholders of the Corporation (the “Stockholder Approval”), which shall increase the total authorized shares of Common Stock to a number (A) at least equivalent to the number required to permit the immediate conversion of all of the then outstanding shares of Series B Convertible Preferred Stock pursuant to the terms of this Note (and all interest accrued on this Note at Certificate of Designations, without violating the option organizational documents of the PayorCorporation and (B) approved by all of the holders of Series B Convertible Preferred Stock (which approval shall not be converted into the number of shares of common stock as follows: (a) In the event of a next equity financing by the Company in one transaction unreasonably withheld, conditioned or series of related transactions which raises an aggregate amount of at least One Million Five Hundred Thousand Dollars ($1,500,000delayed) (the “Next Equity FinancingAuthorized Share Increase”), (ii) the principal amount on this Note adoption of the New Charter by the Board, and (iii) the filing and acceptance of the New Charter with and by the Secretary of State of the State of Delaware, which shall automatically be converted (regardless filed the same day as the date of whether or not the Note is surrendered to Payor) into the equity securities issued in the Payor’s Next Equity Financing Stockholder Approval (the “Next Equity Financing StockConversion”). Any accrued interest outstanding at the time of the ; provided, however, no such automatic conversion shall be paid in cash permitted until all consents, approvals or clearances with respect to, or termination or expiration of any applicable waiting period (and any extensions thereof) imposed under, The ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Antitrust Improvements Act of 1976, as amended (such consent, approval or clearance, “HSR Approval”) required for the conversion by the Companyholders of Series B Preferred Stock, if any, shall have been obtained, received, deemed to have been received or terminated or expired as the case may be. This Note shall convert into the number of shares at the time The holders of the “Next Equity Financing” equals Series B Convertible Preferred Stock shall inform the Corporation when HSR Approval has been received. The Corporation shall within one (1) business day of the later of Stockholder Approval and confirmation from the holders of the Series B Convertible Preferred Stock that any necessary HSR Approval has been received, inform each holder of Series B Convertible Preferred Stock that the conditions to ___,000 the Conversion have been satisfied and the effective date of the Conversion. The shares of the Company’s Common Stock at an exercise price of $0.60 per share to be issued upon Conversion (the “Exercise PriceConversion Shares”) This Note shall be issued as follows: (a) Series B Convertible Preferred Stock that is registered in book-entry form shall be automatically cancelled on the date of Conversion and converted into the corresponding Conversion Shares, which shares shall be issued in book-entry form and without any action on the part of the holders thereof and shall be delivered to the holders thereof within two (2) business days of the effectiveness of the Conversion; (b) Series B Convertible Preferred Stock that is issued in certificated form shall be deemed automatically cancelled immediately upon converted into the corresponding Conversion Shares on the date of Conversion and the holder’s rights as a holder of such conversionshares of Series B Convertible Preferred Stock shall cease and terminate on such date, excepting only the right to receive the Conversion Shares within two (2) business Days of the effectiveness of the Conversion. As a condition precedent The holder of Series B Convertible Preferred Stock shall surrender any stock certificate to the issuance Corporation for cancellation within three (3) business days of the Next Equity Financing date the Conversion. Notwithstanding the cancellation of the Series B Convertible Preferred Stock upon Conversion, holders of Series B Convertible Preferred Stock shall continue to Holder upon have any remedies provided herein or otherwise available at law or in equity to such conversion, Holder shall execute and deliver such agreements, instruments and other documents as are executed and delivered holder because of a failure by the other investors Corporation to comply with the terms of this Certificate of Designations, and in connection with their purchase of the Next Equity Financing Stock. (b) In the event of the “Company’s Sale”, defined below, at the option of Payorall cases, the principal hereunder and, at holder shall retain all of its rights and remedies for the option of Corporation’s failure to convert the Payor, shall automatically be converted (regardless of whether or not the Note is surrendered to Payor) into the number of shares (the “Company’s Sale Stock”) equals to ____,000 shares of the Company’s Common Series B Convertible Preferred Stock at an exercise price of $0.60 per share (the “Exercise Price”). This Note shall be deemed automatically cancelled immediately upon such conversionpursuant hereto.

Automatic Conversion. Subject The Series C Preferred will automatically convert (“Automatic Conversion”) upon the closing of an underwritten offering by the Company pursuant to Section 5 below andwhich (1) the Company receives aggregate gross proceeds of at least Twenty Million United States Dollars (US$20,000,000) in consideration of the purchase of shares of Common Stock (the “Offering Securities”) or (2) (a) the Company receives aggregate gross proceeds of at least Fifteen Million United States Dollars (US$15,000,000) in consideration of the Offering Securities and (b) the Common Stock becomes listed on The Nasdaq Capital Market, the New York Stock Exchange, or the NYSE MKT (the earlier to occur of (1) or (2) above, the “Qualified Offering”). Upon the closing of the Qualified Offering, all of the shares of Series C Preferred owned by such Holder will convert into Common Stock, where (a) the Conversion Price shall be the lower of (x) the Conversion Price, as adjusted, and (y) the amount calculated by multiplying the per share price of the Offering Securities by 0.80 and (b) the Holder shall receive for the Conversion Shares the same registration rights as are granted with respect to the Offering Securities pursuant to the Qualified Offering. Upon the triggering of Automatic Conversion, the Company shall send written notice (the “Automatic Conversion Notice”) to each holder of record of Series C Preferred specifying the date (the “Effective Date”) upon which such conversion is to become effective (which Effective Date shall not be more than ten (10) days after the event which causes such automatic conversion) and calling upon each Holder to surrender to the Company, in the manner and at the Company’s election and request, Holder’s reaffirmation of Holder’s representations and warranties under Section 3 of place designed in the Convertible Note Purchase AgreementAutomatic Conversion Notice, the principal amount of this Note (and all interest accrued on this Note at the option of the Payor) shall be converted into certificate or certificates representing the number of shares of common stock as follows: (a) Series C Preferred held by such Holder at such time. In the event of an Automatic Conversion, (i) the Holder will execute and deliver, as a next equity financing condition to the Company’s issuance and delivery of the shares underlying the Automatic Conversion, a lock-up agreement covering a period of 90 days beginning on the effective date of the registration statement in connection with the Qualified Offering (the “Lock-up Period”), in form and substance reasonably required by the Company in one transaction or series and/or the underwriter for the Qualified Offering; and (ii) during the period beginning on the date of related transactions which raises an aggregate amount the Automatic Conversion and ending on the last day of at least One Million Five Hundred Thousand Dollars ($1,500,000) (the “Next Equity Financing”)Lock-up Period, the principal amount on this Note Holder shall automatically be converted (regardless of whether or have the right, but not the Note is surrendered obligation, to Payor) into “put” all of the equity securities issued shares underlying the Automatic Conversion to the Company for redemption in cash, in the Payor’s Next Equity Financing (amount equal to the “Next Equity Financing Stock”). Any accrued interest outstanding at the time Investment Amount, payable within 5 days of the conversion shall be paid in cash Company’s receipt of written notice indicating such election by the CompanyHolder. This Note On or after the Effective Date, each Holder shall convert into surrender to the Company the certificate or certificates representing the Series C Preferred owned by such Holder as of the Effective Date in the manner and place set forth in the Automatic Conversion Notice and thereupon the Company shall, as soon as practicable thereafter, issue and deliver to the holders of the Series C Preferred certificate(s) for the number of shares at the time of the “Next Equity Financing” equals to ___,000 shares of the Company’s Common Stock at an exercise price of $0.60 per share (the “Exercise Price”) This Note shall be deemed automatically cancelled immediately upon such conversion. As a condition precedent to the issuance of the Next Equity Financing Stock to Holder upon such conversion, Holder shall execute and deliver such agreements, instruments and other documents as are executed and delivered by the other investors issuable in connection with their purchase of the Next Equity Financing Stock. (b) In the event of the “Company’s Sale”, defined below, at the option of Payor, the principal hereunder and, at the option of the Payor, shall automatically be converted (regardless of whether or not the Note is surrendered to Payor) into the number of shares (the “Company’s Sale Stock”) equals to ____,000 shares of the Company’s Common Stock at an exercise price of $0.60 per share (the “Exercise Price”). This Note shall be deemed automatically cancelled immediately upon such automatic conversion.