Common use of Conversion Rights Clause in Contracts

Conversion Rights. At any time prior to the Maturity Date, at the option of Holder in its sole discretion, all or any portion of the then outstanding Principal Amount of this Convertible Note may be converted (an "Optional Conversion") into a number of Common Stock (the "Optional Conversion Shares") equal to the amount of the then outstanding Principal Amount at a price of $.005 per share. In order to exercise the right of Optional Conversion, Holder shall surrender this Convertible Note at the principal office of Obligor and shall give written notice of such exercise, substantially in the form of Exhibit A attached hereto (the "Optional Conversion Notice"), to Obligor at such office. Such Optional Conversion shall be deemed to have been effected at the close of business on the date on which such Optional Conversion Notice, duly completed and executed, shall have been given as aforesaid, and, subject to the last sentence of this Section 7, at such time such portion of the Principal Amount as is subject to such Optional Conversion shall be applied by Obligor in full payment of the Optional Conversion Shares to be issued in consequence of the Conversion and that application shall discharge Obligor from all liability in respect of such portion of the Principal Amount converted, and Holder shall be deemed for all purposes to have become the holder of the Optional Conversion Shares. As promptly as practicable, but in no event later than seven (7) Business Days, after an Optional Conversion, Obligor, at its expense, shall cause (i) the Optional Conversion Notice presented by Holder to Obligor, and any other documents necessary for such Optional Conversion to be effected, to be filed as necessary and appropriate under the laws of the state of Nevada, (ii) Holder's name to be entered in the register of the members of Obligor in respect of the Optional Conversion Shares, and (iii) to be delivered to Holder a convertible note, in form and substance identical to this Convertible Note, for the remaining outstanding Principal Amount if such Optional Conversion was not for the entire portion of the then outstanding Principal Amount. Notwithstanding any provision of this Convertible Note to the contrary, no Optional Conversion shall be deemed to have occurred unless and until Obligor shall have complied with the obligations set forth in the immediately preceding sentence, whereupon such Optional Conversion shall be deemed to have been effective as of the date the Optional Conversion Notice is given to Obligor; provided, however, that no failure by Obligor to so comply with such obligations shall prohibit Holder from exercising its rights as the holder of the Optional Conversion Shares.

Conversion Rights. At any time on or prior to the Maturity Date, at the option of Holder Obligor in its sole discretion, all or any portion of the then outstanding Principal Amount and accrued but unpaid interest of this Convertible Note may be converted (an the "Optional Conversion") into a number of Common Stock shares of Obligor’s common stock (the "Optional Conversion Shares") equal to the amount of the then outstanding Principal Amount at a price of plus the then accrued but unpaid interest to be converted, divided by the Conversion Price (herein so called) which shall be $.005 1.00 per shareOptional Conversion Share. In order to exercise the right of Optional Conversion, Holder shall surrender this Convertible Note at the principal office of Obligor and shall give written notice to Holder of such exercise, substantially in the form of Exhibit A attached hereto (the "Optional Conversion Notice"), to Obligor ) and Holder shall surrender this Note within 5 business days of the date of the Optional Conversion Notice at such officethe principal office of Obligor. Such Optional Conversion shall be deemed to have been effected at the close of business on the date on which such Optional Conversion Notice, duly completed and executed, shall have been given as aforesaid, and, subject to the last sentence of this Section 7, at such which time such portion of the Principal Amount and accrued but unpaid interest as is subject to such Optional Conversion shall be applied by Obligor in full payment of the Optional Conversion Shares to be issued in consequence of the Conversion and that application shall discharge Obligor from all liability in respect of such portion of the Principal Amount and accrued but unpaid interest converted, and Holder shall be deemed for all purposes to have become the holder of the Optional Conversion Shares. As promptly as practicable, but in no event later than seven (7) Business Days, after an Optional Conversion, Obligor, at its expense, shall cause (i) the Optional Conversion Notice presented by Holder to Obligor, and any other documents necessary for such Optional Conversion to be effected, to be filed as necessary and appropriate under the laws of the state of Nevada, (ii) Holder's name to be entered in the register of the members of Obligor in respect of the Optional Conversion Shares, and (iii) to be delivered to Holder a convertible note, in form and substance identical to this Convertible Note, for the remaining outstanding Principal Amount if such Optional Conversion was not for the entire portion of the then outstanding Principal Amount. Notwithstanding any provision of this Convertible Note to the contrary, no Optional Conversion shall be deemed to have occurred unless and until Obligor shall have complied with the obligations set forth in the immediately preceding sentence, whereupon such Optional Conversion shall be deemed to have been effective as of the date the Optional Conversion Notice is given to Obligor; provided, however, that no failure by Obligor to so comply with such obligations shall prohibit Holder from exercising its rights as the holder of the Optional Conversion Shares.

Conversion Rights. At any time prior to the Maturity Date, at the sole option of the Holder except in its sole discretionthe event of the closing price threshold noted below, all or any portion but not less than all, of the then outstanding Principal Amount of this Convertible Note may be converted (an "Optional Conversion") into a number of Common Stock shares of Obligor’s common stock (the "Optional Conversion Shares") equal to the amount of the then outstanding Principal Amount to be converted divided by the Conversion Price (herein so called) which price shall be $1.50 (one dollar and fifty cents) per Optional Conversion Share. If the Obligor’s common stock has traded at $1.50 or above for 4 consecutive weeks on a price nationally recognized market (based on daily closing prices), then any Optional Conversion under this Section 8 may also occur at the option of $.005 per sharethe Obligor. In order to exercise the right of Optional Conversion, Holder shall surrender this Convertible Note at the principal office of Obligor and shall give written notice of such exercise, substantially in the form of Exhibit A attached hereto exercise (the "Optional Conversion Notice"), to Obligor at such office. Such Optional Conversion shall be deemed to have been effected at the close of business on the date on which such Optional Conversion Notice, duly completed and executed, shall have been given as aforesaid, and, subject to the last sentence of this Section 78, at such time such portion of the Principal Amount as is subject to such Optional Conversion shall be applied by Obligor in full payment of the Optional Conversion Shares to be issued in consequence of the Conversion and that application shall discharge Obligor from all liability in respect of such portion of the Principal Amount converted, and Holder shall be deemed for all purposes to have become the holder of the Optional Conversion Shares. As promptly as practicable, but in no event later than seven (7) Business Days, after an Optional Conversion, Obligor, at its expense, shall cause (i) the Optional Conversion Notice presented by Holder to Obligor, and any other documents necessary for such Optional Conversion to be effected, to be filed as necessary and appropriate under the laws of the state of Nevada, (ii) Holder's name to be entered in the register of the members of Obligor in respect of the Optional Conversion Shares, and (iii) to be delivered to Holder a convertible note, in form and substance identical to this Convertible Note, for the remaining outstanding Principal Amount if such Optional Conversion was not for the entire portion of the then outstanding Principal Amount. Notwithstanding any provision of this Convertible Note to the contrary, no Optional Conversion shall be deemed to have occurred unless and until Obligor shall have complied with the obligations set forth in the immediately preceding sentence, whereupon such Optional Conversion shall be deemed to have been effective as of the date the Optional Conversion Notice is given to Obligor; provided, however, that no failure by Obligor to so comply with such obligations shall prohibit Holder from exercising its rights as the holder of the Optional Conversion Shares.

Conversion Rights. At any time prior to the Maturity Date, at the sole option of the Holder except in its sole discretionthe event of the closing price threshold noted below, all or any portion but not less than all, of the then outstanding Principal Amount of this Convertible Note may be converted (an "Optional Conversion") into a number of Common Stock shares of Obligor’s common stock (the "Optional Conversion Shares") equal to the amount of the then outstanding Principal Amount at a to be converted divided by the Conversion Price (herein so called) which price of shall be $.005 1.00 (one dollar and zero cents) per shareOptional Conversion Share. In order to exercise the right of Optional Conversion, Holder shall surrender this Convertible Note at the principal office of Obligor and shall give written notice of such exercise, substantially in the form of Exhibit A attached hereto exercise (the "Optional Conversion Notice"), to Obligor at such office. Such Optional Conversion shall be deemed to have been effected at the close of business on the date on which such Optional Conversion Notice, duly completed and executed, shall have been given as aforesaid, and, subject to the last sentence of this Section 78, at such time such portion of the Principal Amount as is subject to such Optional Conversion shall be applied by Obligor in full payment of the Optional Conversion Shares to be issued in consequence of the Conversion and that application shall discharge Obligor from all liability in respect of such portion of the Principal Amount converted, and Holder shall be deemed for all purposes to have become the holder of the Optional Conversion Shares. As promptly as practicable, but in no event later than seven (7) Business Days, after an Optional Conversion, Obligor, at its expense, shall cause (i) the Optional Conversion Notice presented by Holder to Obligor, and any other documents necessary for such Optional Conversion to be effected, to be filed as necessary and appropriate under the laws of the state of Nevada, (ii) Holder's name to be entered in the register of the members of Obligor in respect of the Optional Conversion Shares, and (iii) to be delivered to Holder a convertible note, in form and substance identical to this Convertible Note, for the remaining outstanding Principal Amount if such Optional Conversion was not for the entire portion of the then outstanding Principal Amount. Notwithstanding any provision of this Convertible Note to the contrary, no Optional Conversion shall be deemed to have occurred unless and until Obligor shall have complied with the obligations set forth in the immediately preceding sentence, whereupon such Optional Conversion shall be deemed to have been effective as of the date the Optional Conversion Notice is given to Obligor; provided, however, that no failure by Obligor to so comply with such obligations shall prohibit Holder from exercising its rights as the holder of the Optional Conversion Shares.

Conversion Rights. At Provided no Event of Default specified in clause (v) of Section 8 has occurred and is continuing (and without giving effect to any time grace period specified therein), the Borrower may elect to satisfy, in whole or in part, the Principal Amount outstanding and accrued but unpaid interest on the Initial Maturity Date by issuing common shares in the capital of the Borrower (“HWDC Shares”). Each HWDC Share so issued will for these purposes be valued based on the 5 day volume-weighted average trading price of the HWDC Shares on the Toronto Stock Exchange (the “TSX”) prior to (but not including) the Initial Maturity DateDate less a discount of 10 %, at and the option amount satisfied through such issuance shall be calculated by multiplying the total number of Holder in its sole discretion, all or any portion HWDC Shares so issued by such discounted 5 day volume-weighted average trading price. The Borrower shall only be permitted to issue HWDC Shares to the Lender to satisfy repayment of the then outstanding Principal Amount of this Convertible Note may be converted (an "Optional Conversion") into a number of Common Stock (the "Optional Conversion Shares") equal outstanding and accrued but unpaid interest pursuant to the amount foregoing paragraph if HWDC Shares have been and are listed and posted for trading on TSX continuously from the date hereof to and including the Initial Maturity Date and shall only be permitted to issue HWDC Shares to (and up to) the extent that such issuance does not result in the Lender holding greater than 19.9% of the then issued and outstanding Principal Amount at a price of $.005 per shareHWDC Shares immediately following such issuance. In order the event that the Borrower elects to exercise the right of Optional Conversion, Holder shall surrender this Convertible Note at the principal office of Obligor and shall give written notice of such exercise, substantially in the form of Exhibit A attached hereto (the "Optional Conversion Notice"), to Obligor at such office. Such Optional Conversion shall be deemed to have been effected at the close of business on the date on which such Optional Conversion Notice, duly completed and executed, shall have been given as aforesaid, and, subject to the last sentence of this Section 7, at such time such satisfy a portion of the Principal Amount as is subject outstanding and accrued but unpaid interest pursuant to such Optional Conversion shall be applied by Obligor the foregoing paragraphs in full payment of HWDC Shares and notifies the Optional Conversion Shares Lender that based on its current cash balances, it has determined in good faith not to be issued in consequence of repay the Conversion and that application shall discharge Obligor from all liability in respect of such portion balance of the Principal Amount converted, outstanding and Holder shall be deemed for all purposes to have become accrued but unpaid interest on the holder of the Optional Conversion Shares. As promptly as practicableInitial Maturity Date, but in no event later than seven (7) Business Daysto extend the Maturity Date, after an Optional Conversion, Obligor, at its expense, the Maturity Date shall cause (i) the Optional Conversion Notice presented by Holder to Obligor, and any other documents necessary automatically be extended for such Optional Conversion to be effected, to be filed as necessary and appropriate under the laws a period of the state of Nevada, (ii) Holder's name to be entered in the register of the members of Obligor in respect of the Optional Conversion Shares, and (iii) to be delivered to Holder a convertible note, in form and substance identical to this Convertible Note, for the remaining outstanding Principal Amount if such Optional Conversion was not for the entire portion of the then outstanding Principal Amount. Notwithstanding any provision of this Convertible Note to the contrary, no Optional Conversion shall be deemed to have occurred unless and until Obligor shall have complied with the obligations set forth in the immediately preceding sentence, whereupon such Optional Conversion shall be deemed to have been effective as of the date the Optional Conversion Notice is given to Obligor; provided, however, that no failure by Obligor to so comply with such obligations shall prohibit Holder from exercising its rights as the holder of the Optional Conversion Shares180 days.

Conversion Rights. At Payee shall be entitled, at any time prior and from time to time and in its sole discretion, to convert all or a portion of the Maturity Dateprincipal amount and accrued interest due under this Note into shares of the Maker's Series C 8% Convertible Preferred Stock, $.01 par value, Stated Value $1,000 per share (the "PREFERRED STOCK") or, at the option of Holder in its sole discretionPayee, all or any portion of into the then outstanding Principal Amount of this Convertible Note may be converted (an "Optional Conversion") into a number of Maker's Common Stock (the "Optional Conversion SharesCOMMON STOCK"). Any such conversion into Preferred Stock shall be effected at the rate of one share of Preferred Stock for each $1,000 due hereunder which Payee has elected to convexx (the "CONVERSION RATE"). If Payee elects to convert all or a portion of the principal amount and accrued interest due under this Note directly into the Common Stock, the number of shares to be issued shall be calculated as if such amount had first been converted to Preferred Stock hereunder (calculated without regard to any insufficiency of authorized shares of Preferred Stock) and such resulting shares of Preferred Stock had, in turn, immediately been converted to Common Stock at a conversion price per share equal to the amount lowest of (a) $1.50, (b) 66.67% of the then outstanding Principal Amount Average Price (as hereafter defined), (c) the price per share at a price which the Maker, after the date of $.005 per share. In order to exercise this Allonge, issues and sells any Common Stock, or (d) where coupled with the right of Optional Conversionthe purchaser(s) thereof to demand that the Corporation register under the Securities Act of 1933 any Common Shares (not theretofore registered) for which any warrants or options may be exercised or any convertible, Holder shall surrender this Convertible Note at the principal office of Obligor and shall give written notice of such exercise, substantially in the form of Exhibit A attached hereto (the "Optional Conversion Notice"), to Obligor at such office. Such Optional Conversion shall exchangeable or exercisable securities may be deemed to have been effected at the close of business on the date on which such Optional Conversion Notice, duly completed and executed, shall have been given as aforesaid, and, subject to the last sentence of this Section 7, at such time such portion of the Principal Amount as is subject to such Optional Conversion shall be applied by Obligor in full payment of the Optional Conversion Shares to be issued in consequence of the Conversion and that application shall discharge Obligor from all liability in respect of such portion of the Principal Amount converted, and Holder shall be deemed for all purposes to have become the holder of the Optional Conversion Shares. As promptly as practicableexercised or exchanged, but in no event later than seven (7) Business Days, after an Optional Conversion, Obligor, at its expense, shall cause (i) the Optional exercise price of any such warrants or options issued by the Maker after the date of this Allonge, or (ii) the conversion rate, exchange rate or exercise price, respectively, of any such convertible, exchangeable or exercisable security issued by the Maker after the date of this Allonge, except for stock option agreements or stock incentive agreements issued pursuant to employee benefit plans. For purposes of this Paragraph 16, the term "Average Price" per share of Common Stock means the average of the closing bid prices as reported on the Nasdaq Stock Market (or if not then traded on such market, on such exchange or quotation system where such shares are then traded) for the lowest five of the twenty trading days immediately preceding the Conversion Notice presented Date. Payee may elect to convert by Holder delivering to ObligorMaker, and any by facsimile, telecopier or other documents necessary for such Optional Conversion expedient means of transmission, a notice of conversion stating (i) the principal amount and/or accrued interest to be effected, to be filed as necessary and appropriate under the laws of the state of Nevadaconverted, (ii) Holder's name the number of shares of Preferred Stock or Common Stock to be entered in the register issued as a result of the members of Obligor in respect of the Optional Conversion Shares, such conversion; and (iii) the person(s) in whose name the Preferred Stock or Common Stock is to be delivered issued. The conversion of any portion of this Note and the resulting issuance of Preferred Stock or Common Stock shall be effective upon the date that Maker receives the corresponding notice of conversion, and Maker shall deliver to Holder Payee one or more certificates evidencing such shares no later than five days following such effective date. Upon a convertible noteconversion of all amounts due hereunder, in form Payee shall deliver the orxxxxxl Note (including all Allonges), marked "PAID," to Maker no later than five days following the delivery to Maker of the conversion notice. In the event of a conversion of less than all amounts due hereunder, (A) no principal amount under the Note shall be deemed converted unless and substance identical to this Convertible Note, for until all accrued interest under the remaining outstanding Principal Amount if such Optional Conversion was not for Note shall be first converted; and (B) the entire portion of the then outstanding Principal Amount. Notwithstanding any provision of this Convertible Note to the contrary, no Optional Conversion amounts due hereunder that are so converted shall be deemed repaid. The parties shall mark on the grid attached to have occurred unless the Fourth Allonge to Secured Promissory Note dated May 10, 1999 the facts related to such partial conversion and until Obligor shall have complied with confirm the obligations set forth in the immediately preceding sentence, whereupon such Optional Conversion shall be deemed to have been effective as accuracy of the date the Optional Conversion Notice is given entry by signing next to Obligor; provided, however, that no failure by Obligor to so comply with each such obligations shall prohibit Holder from exercising its rights as the holder of the Optional Conversion Sharesentry.

Conversion Rights. At The Holder shall have the right to convert this Note as provided in Exhibit A hereto, which Exhibit shall be incorporated by reference herein. If the Closing Price (as hereinafter defined) of the Common Stock is at least 125%, 150%, 175% or 200%, as the case may be, of the Conversion Price (as hereinafter defined) on each Trading Day (as hereinafter defined) during any time prior to period of 20 consecutive Trading Days (each, a "QUALIFIED TRADING PERIOD") occurring within any six month period beginning on the Maturity DateExercise Date (as hereinafter defined) or any six month anniversary thereof and ending on the next six month anniversary of the Exercise Date (each, at a "SIX MONTH PERIOD"), then on any date on or after the option tenth Business Day following the last trading day of Holder in its sole discretion, all or any such Qualified Trading Period during such Six Month Period (each a "CONVERSION DATE") Gabelli may convert any portion of the then outstanding Unpaid Principal Amount which, together with the aggregate principal amount of this Convertible Note may be that has been converted by the Holder on or prior to such Conversion Date or by Gabelli pursuant to this provision with respect to such Six Month Period, does not exceed the Maximum Conversion Amount (an "Optional Conversion"as defined below) with respect to such Six Month Period, into a number fully paid and nonassessable shares of Common Stock (calculated as to each conversion to the nearest full share of Common Stock) at the Conversion Price in effect on the applicable Conversion Date by delivering written notice to that effect to the Holder on or prior to such Conversion Date; PROVIDED, HOWEVER, that notwithstanding the foregoing to the extent that any prior conversions by the Holder prevented Gabelli from converting the full Maximum Conversion Amount with respect to any Six Month Period and Gabelli caused the conversion of all of the Unpaid Principal Amount that it was permitted to convert with respect to such Six Month Period, then to such extent such prior conversions by the Holder shall not be taken into account in calculating the Unpaid Principal Amount that Gabelli is entitled to convert in any subsequent Six Month Period pursuant to the foregoing provisions. After any conversion pursuant to the foregoing, the Holder shall have the right and option (the "Optional Conversion SharesSHARE PUT OPTION"), but not the obligation, exercisable by delivering a written notice (the "SHARE PUT NOTICE") to Gabelli no later than the tenth day after the Conversion Date, to cause Gabelli to purchase up to 50% of the Conversion Shares issued in such conversion (the "FORCED CONVERSION SHARES") for a purchase price per share in cash equal to the amount average of the then outstanding Principal Amount at a price of $.005 per share. In order to exercise Closing Prices for the right of Optional Conversion, Holder shall surrender this Convertible Note at the principal office of Obligor and shall give written notice of such exercise, substantially in the form of Exhibit A attached hereto (the "Optional Conversion Notice"), to Obligor at such office. Such Optional Conversion shall be deemed to have been effected at the close of business on five Trading Days immediately following the date on which the Share Put Notice is delivered to Gabelli (the "SHARE PUT CONSIDERATION"). The closing of any Share Put Option will be held at 10:00 A.M. at the principal executive offices of the Holder on the ninth Trading Day immediately following the date on which the Share Put Notice is delivered to Gabelli, or at such Optional other time and place upon which the Holder and Gabelli shall agree. At such closing, Gabelli shall pay the Share Put Consideration to the Holder in cash by wire transfer of immediately available funds against the delivery to Gabelli of a certificate representing the Forced Conversion NoticeShares with respect to which the Share Put Option has been exercised, duly completed endorsed to Gabelli or in blank, and executedconcurrently with such delivery Gabelli shall, or shall have been given as aforesaidcause the applicable transfer agent for such shares to, and, subject duly execute and deliver to the last sentence Holder a new share certificate representing the number of this Section 7, at such time such portion of the Principal Amount as is subject to such Optional Conversion shall be applied by Obligor in full payment of the Optional Forced Conversion Shares with respect to be issued in consequence of which the Conversion and that application shall discharge Obligor from all liability in respect of such portion of the Principal Amount converted, and Holder shall be deemed for all purposes to have become the holder of the Optional Conversion Shares. As promptly as practicable, but in no event later than seven (7) Business Days, after an Optional Conversion, Obligor, at its expense, shall cause (i) the Optional Conversion Notice presented by Holder to Obligor, and any other documents necessary for such Optional Conversion to be effected, to be filed as necessary and appropriate under the laws of the state of Nevada, (ii) Holder's name to be entered in the register of the members of Obligor in respect of the Optional Conversion Shares, and (iii) to be delivered to Holder a convertible note, in form and substance identical to this Convertible Note, for the remaining outstanding Principal Amount if such Optional Conversion was Share Put Option has not for the entire portion of the then outstanding Principal Amount. Notwithstanding any provision of this Convertible Note to the contrary, no Optional Conversion shall be deemed to have occurred unless and until Obligor shall have complied with the obligations set forth in the immediately preceding sentence, whereupon such Optional Conversion shall be deemed to have been effective as of the date the Optional Conversion Notice is given to Obligor; provided, however, that no failure by Obligor to so comply with such obligations shall prohibit Holder from exercising its rights as the holder of the Optional Conversion Sharesexercised.

Conversion Rights. At any time prior to the Maturity Date, at the sole option of Holder in its sole discretionthe Holder, all or any portion but not less than all of the then outstanding Principal Amount of this Convertible Note may be converted (an "Optional Conversion") into a number of Common Stock shares of Obligor’s common stock (the "Optional Conversion Shares") equal to the amount of the then outstanding Principal Amount at a price of to be converted divided by the Conversion Price (herein so called) which shall be $.005 1.00 (one dollar) per shareOptional Conversion Share. In order to exercise the right of Optional Conversion, Holder shall surrender this Convertible Note at the principal office of Obligor and shall give written notice of such exercise, substantially in the form of Exhibit A attached hereto exercise (the "Optional Conversion Notice"), to Obligor at such office. Such Optional Conversion shall be deemed to have been effected at the close of business on the date on which such Optional Conversion Notice, duly completed and executed, shall have been given as aforesaid, and, subject to the last sentence of this Section 78, at such time such portion of the Principal Amount as is subject to such Optional Conversion shall be applied by Obligor in full payment of the Optional Conversion Shares to be issued in consequence of the Conversion and that application shall discharge Obligor from all liability in respect of such portion of the Principal Amount converted, and Holder shall be deemed for all purposes to have become the holder of the Optional Conversion Shares. As promptly as practicable, but in no event later than seven (7) Business Days, after an Optional Conversion, Obligor, at its expense, shall cause (i) the Optional Conversion Notice presented by Holder to Obligor, and any other documents necessary for such Optional Conversion to be effected, to be filed as necessary and appropriate under the laws of the state of Nevada, (ii) Holder's name to be entered in the register of the members of Obligor in respect of the Optional Conversion Shares, and (iii) to be delivered to Holder a convertible note, in form and substance identical to this Convertible Note, for the remaining outstanding Principal Amount if such Optional Conversion was not for the entire portion of the then outstanding Principal Amount. Notwithstanding any provision of this Convertible Note to the contrary, no Optional Conversion shall be deemed to have occurred unless and until Obligor shall have complied with the obligations set forth in the immediately preceding sentence, whereupon such Optional Conversion shall be deemed to have been effective as of the date the Optional Conversion Notice is given to Obligor; provided, however, that no failure by Obligor to so comply with such obligations shall prohibit Holder from exercising its rights as the holder of the Optional Conversion Shares.

Conversion Rights. At any time prior The Borrower hereby irrevocably grants to the Maturity Date, at Lender the option of Holder and right, exercisable from time to time in its the Lender’s sole discretiondiscretion during the Conversion Period, and upon three (3) Business Days prior written notice to the Borrower (the “Conversion Notice”) to convert all or any portion of the then Loan, together with any outstanding Principal Amount of this Convertible Note may be converted (an "Optional Conversion") interest thereon, into a number of Common Stock Conversion Shares at the Conversion Price (the "Optional “Conversion Shares"Rights”) equal whereupon the relevant portion of the Loan shall be deemed permanently repaid upon issuance of the Conversion Shares to the amount of the then outstanding Principal Amount at a price of $.005 per shareLender. In order to exercise the right of Optional Conversion, Holder The Conversion Notice shall surrender this Convertible Note at the principal office of Obligor and shall give written notice of such exercise, substantially be in the form of Exhibit A attached hereto Attachment I to Schedule 9 and shall specify (i) the principal amount of the Loan to be converted into Conversion Shares (the "Optional “Conversion Notice"Amount”); (ii) the accrued and unpaid interest due on the Conversion Amount; (iii) the effective date for the conversion and delivery of Conversion Shares to the Lender (the “Conversion Date”); (iv) the Conversion Price; and (v) the number of Conversion Shares to be issued by the Borrower in satisfaction of such conversion. The number of Conversion Shares to be issued by the Borrower to the Lender shall be determined by the Lender by calculating (x) the sum of (A) the Conversion Amount plus (B) the amount of accrued and unpaid interest on the Conversion Amount, divided by (B) the Conversion Price. The Lender may also specify in the Conversion Notice the denominations and number of certificates for the Conversion Shares to Obligor at be issued by the Borrower in connection with such officeconversion, the name in which such certificates should be titled and issued and delivery instructions with respect thereto. Such Optional Each Conversion Notice will be irrevocable when it is effective under the notice provisions of this Agreement. The Borrower shall promptly issue and deliver to the Lender the applicable number of Conversion Shares, and the Conversion Amount will be deemed to have been effected at repaid by the close of business on the date on which such Optional Conversion Notice, duly completed and executed, shall have been given as aforesaid, and, subject to the last sentence of this Section 7, at such time such portion of the Principal Amount as is subject to such Optional Conversion shall be applied by Obligor in full payment of the Optional Conversion Shares to be issued in consequence of the Conversion and that application shall discharge Obligor from all liability in respect Borrower upon irrevocable delivery of such portion of the Principal Amount converted, and Holder shall be deemed for all purposes to have become the holder of the Optional Conversion Shares. As promptly as practicable, but in no event later than seven (7) Business Days, after an Optional Conversion, Obligor, at its expense, shall cause (i) the Optional Conversion Notice presented by Holder to Obligor, and any other documents necessary for such Optional Conversion to be effected, to be filed as necessary and appropriate under the laws of the state of Nevada, (ii) Holder's name to be entered in the register of the members of Obligor in respect of the Optional Conversion Shares, and (iii) to be delivered to Holder a convertible note, issued in form and substance identical to this Convertible Note, for the remaining outstanding Principal Amount if such Optional Conversion was not for the entire portion name of the then outstanding Principal Amount. Notwithstanding any provision of this Convertible Note to the contrary, no Optional Conversion shall be deemed to have occurred unless and until Obligor shall have complied with the obligations set forth in the immediately preceding sentence, whereupon such Optional Conversion shall be deemed to have been effective as of the date the Optional Conversion Notice is given to Obligor; provided, however, that no failure by Obligor to so comply with such obligations shall prohibit Holder from exercising Lender (or its rights as the holder of the Optional Conversion Sharesdesignee).

Conversion Rights. At any time prior to the Maturity Date, at the option of Holder in its sole discretion, all or any portion of the then outstanding Principal Amount of this Convertible Note may be converted (an "Optional Conversion") into a number of Common Stock (the "Optional Conversion Shares") equal to the amount of the then outstanding Principal Amount at a price of $.005 per share. In order to exercise the right of Optional Conversion, Holder shall surrender this Convertible Note at the principal office of Obligor and shall give written notice of such exercise, substantially in the form of Exhibit A attached hereto (the "Optional Conversion Notice"), to Obligor at such office. Such Optional Conversion shall be deemed to have been effected at the close of business on the date on which such Optional Conversion Notice, duly completed and executed, shall have been given as aforesaid, and, subject to the last sentence of this Section 7, at such time such portion of the Principal Amount as is subject to such Optional Conversion shall be applied by Obligor in full payment of the Optional Conversion Shares to be issued in consequence of the Conversion and that application shall discharge Obligor from all liability in respect of such portion of the Principal Amount converted, and Holder shall be deemed for all purposes to have become the holder of the Optional Conversion Shares. As promptly as practicable, but in no event later than seven (7) Business Days, after an Optional Conversion, Obligor, at its expense, shall cause (i) the Optional Conversion Notice presented by Holder to Obligor, and any other documents necessary for such Optional Conversion to be effected, to be filed as necessary and appropriate under the laws of the state of NevadaCalifornia, (ii) Holder's name to be entered in the register of the members of Obligor in respect of the Optional Conversion Shares, and (iii) to be delivered to Holder a convertible note, in form and substance identical to this Convertible Note, for the remaining outstanding Principal Amount if such Optional Conversion was not for the entire portion of the then outstanding Principal Amount. Notwithstanding any provision of this Convertible Note to the contrary, no Optional Conversion shall be deemed to have occurred unless and until Obligor shall have complied with the obligations set forth in the immediately preceding sentence, whereupon such Optional Conversion shall be deemed to have been effective as of the date the Optional Conversion Notice is given to Obligor; provided, however, that no failure by Obligor to so comply with such obligations shall prohibit Holder from exercising its rights as the holder of the Optional Conversion Shares.