Common use of Conversion Clause in Contracts

Conversion. (A) This Debenture shall be convertible into shares of Common Stock at the option of the Holder, in whole or in part at any time and from time to time, after the Original Issue Date (subject to the limitations on conversion set forth in Section 4(a)(ii) hereof). The number of shares of Common Stock issuable upon a conversion hereunder shall be determined by adding the sum of (i) the quotient obtained by dividing (x) the outstanding principal amount of this Debenture to be converted and (y) the Conversion Price (as defined herein), and (ii) the amount equal to (I) the product of (x) the outstanding principal amount of this Debenture to be converted and (y) the product of (1) the quotient obtained by dividing .12 by 360 and (2) the number of days for which such principal amount was outstanding, divided by (II) the Conversion Price on the Conversion Date, provided, that if the Company shall have timely elected to pay the interest due on a Conversion Date in cash pursuant to the terms hereof, subsection (ii) shall not be used in the calculation of the number of shares of Common Stock issuable upon a conversion hereunder. (B) Notwithstanding anything to the contrary contained herein, if on any Conversion Date: (1) the number of shares of Common Stock at the time authorized, unissued and unreserved for all purposes, or held as treasury stock, is insufficient to pay interest hereunder in shares of Common Stock; (2) the Underlying Shares issuable for such conversion (including any interest payable in shares) (x) are not registered for resale pursuant to an effective Underlying Shares Registration Statement and (y) may not be sold without volume restrictions pursuant to Rule 144(k) promulgated under the Securities Act (as defined in Section 6); (3) the Common Stock is not listed or quoted for trading on the OTC or on a Subsequent Market; (4) the Company has failed to timely satisfy its conversion obligations hereunder; or (5) the issuance of such shares of Common Stock would result in a violation of Sections 4(a)(ii), then, the Company may not pay interest in kind and must pay interest in cash by delivering, within three Trading Days of each applicable Conversion Date, an amount in cash equal to the product of (a) the outstanding principal amount of the Debentures to be converted on such Conversion Date and (b) the product of (x) the quotient obtained by dividing .12 by 360 and (y) the number of days for which such principal amount was outstanding. (C) This Debenture shall be convertible into shares of Common Stock at the option of the Holder, in whole or in part at any time and from time to time, after the Original Issue Date (subject to the limitations on conversion set forth in Section 4(a)(ii) hereof). The Holder shall effect conversions by delivering to the Company a completed notice substantially in the form attached hereto as Exhibit A (a "Conversion Notice"). The Conversion Notice shall set forth the remaining principal amount of this Debenture and all accrued and unpaid interest thereon subsequent to the conversion at issue. The date on which a Conversion Notice is delivered is the "Conversion Date." Unless the Holder is converting the entire principal amount outstanding under this Debenture, the Holder is not be required to physically surrender this Debenture to the Company in order to effect conversions. Subject to Section 4(b), each Conversion Notice, once given, shall be irrevocable. Conversions hereunder shall have the effect of lowering the outstanding principal amount of this Debenture plus all accrued and unpaid interest thereon in an amount equal to the applicable conversion, which shall be evidenced by notations made in the Conversion Notice. The Holder and the Company shall maintain records showing the principal amount converted and the date of such conversions. In the event of any dispute or discrepancy, the records of the Holder shall be controlling and determinative in the absence of manifest error.

Conversion. (Aa) This Debenture Beginning with the earlier of (i) April 10, 2021 and (ii) immediately prior to a liquidation of the Company, each Holder shall be convertible into have the right to convert its shares of Common Stock at the option of the HolderSeries A Preferred Stock, in whole or in part part, at any time and from time to timetime upon the request of such Holder, after the Original Issue Date (subject into that number of whole shares of Common Stock equal to the limitations on conversion set forth in Section 4(a)(ii) hereof). The number of shares of Series A Preferred Stock to be converted multiplied by the Conversion Rate at such time; provided, however, that in no event shall the Company be obligated to honor such conversion request unless such conversion will involve an aggregate number of shares of Series A Preferred Stock with an underlying value of Common Stock equal to or greater than $20 million, taking into account and including any concurrent conversion requests by any Affiliates of such Holder, based on the Closing Sale Price on the Trading Day immediately preceding the Optional Conversion Notice Date (or a lesser underlying value if such conversion (i) will result in the conversion of all of the shares of Series A Preferred Stock held by such Holder or (ii) has been approved by the Board of Directors); provided, further, that each Holder and such Holder’s Affiliates shall together be entitled to a single conversion right per fiscal quarter. Notwithstanding anything to the contrary in this Section 6(a), if any lender, other creditor or counterparty under any Permitted Loan transaction (including any agent or trustee on their behalf) or any Affiliate of the foregoing exercises any rights or remedies under such Permitted Loan on foreclosure or other exercise of remedies or rights in respect of any pledged shares of Series A Preferred Stock, then such pledged shares of Series A Preferred Stock may be immediately converted by such lender, creditor or counterparty into shares of Common Stock. To convert shares of Series A Preferred Stock into shares of Common Stock pursuant to this Section 6(a), such Holder shall give written notice (the “Optional Conversion Notice” and the date of such notice, the “Optional Conversion Notice Date”) to the Secretary of the Company stating that such Holder elects to so convert shares of Series A Preferred Stock and shall state therein: (A) the number of shares of Series A Preferred Stock to be converted and (B) the name or names in which such Holder wishes the shares of Common Stock to be issued. If a Holder validly delivers an Optional Conversion Notice in accordance with this Section 6(a), the Company shall direct the Transfer Agent to issue the shares of Common Stock no later than two (2) Business Days thereafter (the date of issuance of such shares, the “Optional Conversion Date”). (b) At any time after April 10, 2021, if the Holders have not elected to convert all of their shares of Series A Preferred Stock pursuant to Section 6(a), the Company shall have the right to cause the outstanding shares of Series A Preferred Stock to be converted, in whole and not in part into that number of whole shares of Common Stock equal to the number of shares of Series A Preferred Stock to be converted multiplied by the Conversion Rate at such time; provided, however, that in order for the Company to exercise such right, (i) the shares of Common Stock must be listed or admitted for trading on a National Securities Exchange, (ii) the Closing Sale Price of the Common Stock must exceed $27.99 for the twenty (20) consecutive Trading Days immediately preceding the Forced Conversion Notice Date, (iii) the average daily trading volume of the shares of Common Stock on the principal National Securities Exchange on which the shares of Common Stock are then listed or admitted to trading must exceed 1,000,000 shares of Common Stock (as such amount may be adjusted to reflect any Common Stock split, combination or similar event) for the twenty (20) consecutive Trading Days immediately preceding the Forced Conversion Notice Date, (iv) the Company must have an effective registration statement on file with the SEC covering resales of the underlying shares of Common Stock to be received by the applicable Holder upon any such conversion and (v) all prior accumulated and unpaid dividends (including, for the avoidance of doubt, Accrued Dividends) have been paid in cash in full. To convert shares of Series A Preferred Stock into shares of Common Stock pursuant to this Section 6(b), the Company shall give written notice (the “Forced Conversion Notice” and the date of such notice, the “Forced Conversion Notice Date”) to each Holder stating that the Company elects to force conversion of such shares of Series A Preferred Stock pursuant to this Section 6(b) and shall state therein (A) the Company elects to so convert shares of Series A Preferred Stock pursuant to this Section 6(b) and (B) the number of shares of Series A Preferred Stock to be converted. If the Company validly delivers a Forced Conversion Notice in accordance with this Section 6(b), the Company shall issue the shares of Common Stock no later than five (5) Business Days thereafter (the date of issuance of such shares, the “Forced Conversion Date”). (c) Upon conversion, each Holder shall provide the Transfer Agent a written instrument or instruments of transfer in form reasonably satisfactory to the Transfer Agent duly executed by the Holder or its duly authorized legal representative and (ii) transfer tax stamps or funds therefor, if required pursuant to Section 6(i). (d) Immediately prior to the close of business on the Optional Conversion Date or the Forced Conversion Date, as applicable, with respect to a conversion, a Holder shall be deemed to be the holder of record of Common Stock issuable upon conversion of such Holder’s shares of Series A Preferred Stock notwithstanding that the share register of the Company shall then be closed or that certificates representing such Common Stock shall not then be actually delivered to such Holder. Except to the extent that a Holder is not able to convert its shares of Series A Preferred Stock into Common Stock as a result of the Company not having sufficient authorized capital under its Articles of Incorporation, on the Optional Conversion Date or the Forced Conversion Date, as applicable, dividends shall cease to accrue on the shares of Series A Preferred Stock so converted and all other rights with respect to the shares of Series A Preferred Stock so converted, including the rights, if any, to receive notices, will terminate, except only the rights of Holders thereof to receive the number of whole shares of Common Stock into which such shares of Series A Preferred Stock have been converted. As promptly as practical after the conversion hereunder of any shares of Series A Preferred Stock into shares of Common Stock, the Transfer Agent shall deliver to the applicable Holder an Ownership Notice identifying the number of full shares of Common Stock to which such Holder is entitled. (e) The Conversion Rate shall be determined by adding subject to the sum of following adjustments (except as provided in Section 6(f)): (i) If the quotient obtained by dividing Company pays a dividend (xor other distribution) in shares of Common Stock to holders of the outstanding principal amount Common Stock, in their capacity as holders of this Debenture to be converted and (y) Common Stock, then the Conversion Price Rate in effect immediately following the record date for such dividend (as defined herein), and (iior distribution) the amount equal to (I) the product of (x) the outstanding principal amount of this Debenture to shall be converted and (y) the product of (1) the quotient obtained by dividing .12 by 360 and (2) the number of days for which such principal amount was outstanding, divided by (II) the Conversion Price on the Conversion Date, provided, that if the Company shall have timely elected to pay the interest due on a Conversion Date in cash pursuant to the terms hereof, subsection (ii) shall not be used in the calculation of following fraction: OS0 where OS0 = the number of shares of Common Stock issuable upon a conversion hereunderoutstanding immediately prior to the record date for such dividend or distribution; and OS1 = the sum of (A) the number of shares of Common Stock outstanding immediately prior to the record date for such dividend or distribution and (B) the total number of shares of Common Stock constituting such dividend. (Bii) Notwithstanding anything If the Company subdivides or splits the shares of Common Stock into a greater or lesser number of shares of Common Stock, then the Conversion Rate in effect immediately following the effective date of such share subdivision or split shall be divided by the following fraction: OS0 where OS0 = the number of shares of Common Stock outstanding immediately prior to the contrary contained hereineffective date of such share subdivision or split; and OS1 = the number of shares of Common Stock outstanding immediately after the opening of business on the effective date of such share subdivision or split. (iii) If the Company combines or reclassifies the shares of Common Stock into a greater or lesser number of shares of Common Stock, if then the Conversion Rate in effect immediately following the effective date of such share combination or reclassification shall be divided by the following fraction: OS0 where OS0 = the number of shares of Common Stock outstanding immediately prior to the effective date of such share combination or reclassification; and OS1 = the number of shares of Common Stock outstanding immediately after the opening of business on the effective date of such share combination or reclassification. (iv) If the Company issues by reclassification of its shares of Common Stock any Equity Interests (including any reclassification in connection with a merger, consolidation or business combination in which the Company is the surviving Person), then the Conversion Date:Rate in effect immediately following the effective date of such reclassification shall be divided by the following fraction: OS0 where OS0 = the number of shares of Common Stock outstanding immediately prior to the effective date of such share issuance by reclassification; and OS1 = the number of shares of Common Stock outstanding immediately after the opening of business on the effective date of such share issuance by reclassification. (v) In the case the Company effects a Pro Rata Repurchase of Common Stock (in each case other than in connection with a Change of Control) then the Conversion Rate shall be adjusted to the rate determined by multiplying the Conversion Rate in effect immediately prior to the effective date of such Pro Rata Repurchase by a fraction of which the numerator shall be (A) the product of (1) the number of shares of Common Stock at the time authorized, unissued outstanding immediately before such Pro Rata Repurchase and unreserved for all purposes, or held as treasury stock, is insufficient to pay interest hereunder in shares of Common Stock; (2) the Underlying Shares issuable for Market Value of a share of Common Stock on the trading day immediately preceding the first public announcement by the Company or any of its Affiliates of the intent to effect such conversion Pro Rata Repurchase, minus (including any interest payable in shares) (x) are not registered for resale pursuant to an effective Underlying Shares Registration Statement and (y) may not be sold without volume restrictions pursuant to Rule 144(k) promulgated under the Securities Act (as defined in Section 6); (3B) the Common Stock is not listed or quoted for trading on aggregate purchase price of the OTC or on a Subsequent Market; Pro Rata Repurchase, and of which the denominator shall be the product of (41) the Company has failed to timely satisfy its conversion obligations hereunder; or (5) the issuance number of such shares of Common Stock would result in a violation of Sections 4(a)(ii), then, the Company may not pay interest in kind and must pay interest in cash by delivering, within three Trading Days of each applicable Conversion Date, an amount in cash equal outstanding immediately prior to the product of (a) the outstanding principal amount of the Debentures to be converted on such Conversion Date and (b) the product of (x) the quotient obtained by dividing .12 by 360 and (y) Pro Rata Repurchase minus the number of days for which shares of Common Stock so repurchased and (2) the Market Value per share of Common Stock on the trading day immediately preceding the first public announcement by the Company or any of its Affiliates of the intent to effect such principal amount was outstandingPro Rata Repurchase. (Cvi) This Debenture shall be convertible into Subject to clause (vii) below, if the Company issues to holders of shares of the Common Stock, in their capacity as holders of Common Stock, rights, options or warrants entitling them to subscribe for or purchase shares of Common Stock at less than the option Market Value determined on the Ex-Date for such issuance, then the Conversion Rate in effect immediately following the close of business on the Holder, in whole or in part at any time and from time to time, after the Original Issue Ex-Date (subject to the limitations on conversion set forth in Section 4(a)(ii) hereof). The Holder shall effect conversions by delivering to the Company a completed notice substantially in the form attached hereto as Exhibit A (a "Conversion Notice"). The Conversion Notice shall set forth the remaining principal amount of this Debenture and all accrued and unpaid interest thereon subsequent to the conversion at issue. The date on which a Conversion Notice is delivered is the "Conversion Date." Unless the Holder is converting the entire principal amount outstanding under this Debenture, the Holder is not be required to physically surrender this Debenture to the Company in order to effect conversions. Subject to Section 4(b), each Conversion Notice, once given, for such issuance shall be irrevocable. Conversions hereunder shall have divided by the effect following fraction: OS0 + X OS0 + Y where OS0 = the number of lowering shares of Common Stock outstanding at the outstanding principal amount close of this Debenture plus all accrued and unpaid interest thereon in an amount equal to business on the applicable conversion, which shall be evidenced by notations made in the Conversion Notice. The Holder and the Company shall maintain records showing the principal amount converted and the record date of for such conversions. In the event of any dispute or discrepancy, the records of the Holder shall be controlling and determinative in the absence of manifest error.issuance;

Conversion. (Aa) Conversion at Option of Holder. (i) This Debenture shall be convertible into shares of Common Stock at the option of the Holder, in whole or in part at any time and from time to time, after the Original Issue Date (as defined in Section 5) (subject to the limitations on conversion set forth in Section 4(a)(ii3(b) hereof). The number of shares of Common Stock issuable upon a conversion hereunder shall be determined by adding the sum of (i) equals the quotient obtained by dividing (x) the outstanding principal amount of this Debenture to be converted and by (y) the Conversion Price (as defined hereinin Section 3(c)(i), and ). The Obligor shall deliver Common Stock certificates to the Holder prior to the Fifth (ii5th) the amount equal to (I) the product of (x) the outstanding principal amount of this Debenture to be converted and (y) the product of (1) the quotient obtained by dividing .12 by 360 and (2) the number of days for which such principal amount was outstanding, divided by (II) the Conversion Price on the Trading Day after a Conversion Date, provided, that if the Company shall have timely elected to pay the interest due on a Conversion Date in cash pursuant to the terms hereof, subsection (ii) shall not be used in the calculation of the number of shares of Common Stock issuable upon a conversion hereunder. (Bii) Notwithstanding anything to the contrary contained herein, if on any Conversion Date: : (1) the number of shares of Common Stock at the time authorized, unissued and unreserved for all purposes, or held as treasury stock, is insufficient to pay principal and interest hereunder in shares of Common Stock; ; (2) the Underlying Shares issuable for such conversion (including any interest payable in shares) (x) are not registered for resale pursuant to an effective Underlying Shares Registration Statement and (y) may not be sold without volume restrictions pursuant to Rule 144(k) promulgated under the Securities Act (as defined in Section 6); (3) the Common Stock is not listed or quoted for trading on the OTC or on a Subsequent Market; ; (43) the Company Obligor has failed to timely satisfy its conversion obligations hereunderconversion; or or (54) the issuance of such shares of Common Stock would result in a violation of Sections 4(a)(iiSection 3(b), then, at the Company may not pay interest option of the Holder, the Obligor, in kind and must pay interest in cash by deliveringlieu of delivering shares of Common Stock pursuant to Section 3(a)(i), shall deliver, within three (3) Trading Days of each applicable Conversion Date, an amount in cash equal to the product of (a) the outstanding principal amount of the Debentures to be converted on plus any interest due therein divided by the Conversion Price, chosen by the Holder, and multiplied by the highest closing price of the stock from date of the conversion notice till the date that such cash payment is made. Further, if the Obligor shall not have delivered any cash due in respect of conversion of this Debenture or as payment of interest thereon by the fifth (5th) Trading Day after the Conversion Date and (b) Date, the product of (x) Holder may, by notice to the quotient obtained by dividing .12 by 360 and (y) Obligor, require the number of days for which such principal amount was outstanding. (C) This Debenture shall be convertible into Obligor to issue shares of Common Stock at pursuant to Section 3(c), except that for such purpose the option Conversion Price applicable thereto shall be the lesser of the Holder, in whole or in part at any time Conversion Price on the Conversion Date and from time to time, after the Original Issue Date (Conversion Price on the date of such Holder demand. Any such shares will be subject to the limitations on conversion set forth in Section 4(a)(iiprovisions of this Section. (iii) hereof). The Holder shall effect conversions by delivering to the Company Obligor a completed notice substantially in the form attached hereto as Exhibit A (a "Conversion Notice"). The Conversion Notice shall set forth the remaining principal amount of this Debenture and all accrued and unpaid interest thereon subsequent to the conversion at issue. The date on which a Conversion Notice is delivered is the "Conversion Date." Unless the Holder is converting the entire principal amount outstanding under this Debenture, the Holder is not be required to physically surrender this Debenture to the Company Obligor in order to effect conversions. Subject to Section 4(b), each Conversion Notice, once given, shall be irrevocable. Conversions hereunder shall have the effect of lowering the outstanding principal amount of this Debenture plus all accrued and unpaid interest thereon in an amount equal to the applicable conversion, which shall be evidenced by notations made in the Conversion Notice. The Holder and the Company Obligor shall maintain records showing the principal amount converted and the date of such conversions. In the event of any dispute or discrepancy, the records of the Holder shall be controlling and determinative in the absence of manifest error.

Conversion. (A) This Debenture If the Borrower shall elect to convert any particular Borrowing comprised of Loans denominated in Dollars pursuant to this Section 2.3 from one Type of Loan to the other Type only in part, then, from and after the date on which such conversion shall be convertible into shares effective, such particular Borrowing shall, for all purposes of Common Stock at this Agreement (including, without limitation, for purposes of subsequent application of this sentence), be deemed to instead constitute two Borrowings (each originally advanced on the option same date as such particular Borrowing), one comprised of the Holder, in whole or in part at any time and from time to time, after the Original Issue Date (subject to the limitations on subsequent conversion set forth in Section 4(a)(iiaccordance with this Agreement) hereof). The number of shares of Common Stock issuable upon a conversion hereunder shall be determined by adding the sum of (i) the quotient obtained by dividing (x) the outstanding principal amount of this Debenture to be converted and (y) the Conversion Price (as defined herein), and (ii) the amount equal to (I) the product of (x) the outstanding principal amount of this Debenture to be converted and (y) the product of (1) the quotient obtained by dividing .12 by 360 and (2) the number of days for which such principal amount was outstanding, divided by (II) the Conversion Price on the Conversion Date, provided, that if the Company shall have timely elected to pay the interest due on a Conversion Date in cash pursuant to the terms hereof, subsection (ii) shall not be used in the calculation of the number of shares of Common Stock issuable upon a conversion hereunder. (B) Notwithstanding anything to the contrary contained herein, if on any Conversion Date: (1) the number of shares of Common Stock at the time authorized, unissued and unreserved for all purposes, or held as treasury stock, is insufficient to pay interest hereunder in shares of Common Stock; (2) the Underlying Shares issuable for such conversion (including any interest payable in shares) (x) are not registered for resale pursuant to an effective Underlying Shares Registration Statement and (y) may not be sold without volume restrictions pursuant to Rule 144(k) promulgated under the Securities Act (as defined in Section 6); (3) the Common Stock is not listed or quoted for trading on the OTC or on a Subsequent Market; (4) the Company has failed to timely satisfy its conversion obligations hereunder; or (5) the issuance of such shares of Common Stock would result in a violation of Sections 4(a)(ii), then, the Company may not pay interest in kind and must pay interest in cash by delivering, within three Trading Days of each applicable Conversion Date, an amount in cash equal to the product of (a) the outstanding principal amount of the Debentures to be converted on such Conversion Date and (b) the product of (x) the quotient obtained by dividing .12 by 360 and (y) the number of days for which such principal amount was outstanding. (C) This Debenture shall be convertible into shares of Common Stock at the option of the Holder, in whole or in part at any time and from time to time, after the Original Issue Date (subject to the limitations on conversion set forth in Section 4(a)(ii) hereof). The Holder shall effect conversions by delivering to the Company a completed notice substantially in the form attached hereto as Exhibit A (a "Conversion Notice"). The Conversion Notice shall set forth the remaining principal amount of this Debenture and all accrued and unpaid interest thereon subsequent to the conversion at issue. The date on which a Conversion Notice is delivered is the "Conversion Date." Unless the Holder is converting the entire principal amount outstanding under this Debenture, the Holder is not be required to physically surrender this Debenture to the Company in order to effect conversions. Subject to Section 4(b), each Conversion Notice, once given, shall be irrevocable. Conversions hereunder shall have the effect of lowering the outstanding principal amount of this Debenture plus all accrued and unpaid interest thereon Eurocurrency Loans in an aggregate principal amount equal to the applicable conversionportion of such Borrowing so elected by the Borrower to be comprised of Eurocurrency Loans and the second comprised of (subject to subsequent conversion in accordance with this Agreement) Base Rate Loans in an aggregate principal amount equal to the portion of such particular Borrowing so elected by the Borrower to be comprised of Base Rate Loans. If the Borrower shall elect to have multiple Interest Periods apply to any particular Borrowing comprised of Eurocurrency Loans denominated in the same currency, which then, from and after the date such multiple Interest Periods commence, such particular Borrowing shall, for all purposes of this Agreement (including, without limitation, for purposes of subsequent application of this sentence), be deemed to constitute a number of separate Borrowings (each originally commencing on the same date as such particular Borrowing) equal to the number of, and corresponding to, the different Interest Periods so selected, each such deemed separate Borrowing corresponding to a particular selected Interest Period comprised of (subject to subsequent conversion in accordance with this Agreement) Eurocurrency Loans in an aggregate principal amount equal to the portion of such particular Borrowing so elected by the Borrower to have such Interest Period. This Section 2.3(f) shall be evidenced by notations made applied appropriately in the Conversion Notice. The Holder and event that the Company Borrower shall maintain records showing make the principal amount converted and the date of such conversions. In the event of any dispute or discrepancy, the records of the Holder shall be controlling and determinative elections described in the absence of manifest errortwo preceding sentences at the same time with respect to the same particular Borrowing.

Conversion. (Aa) This Debenture The Lender, upon pricing of the IPO, shall be convertible convert the outstanding balance of the Loan (including accrued interest) (the “Outstanding Balance”) into such number of ordinary shares of Common Stock at the option of Company (the Holder, in whole or in part at any time and from time “Conversion Shares”) that equals to time, after the Original Issue Date (subject to the limitations on conversion set forth in Section 4(a)(ii) hereof). The number of shares of Common Stock issuable upon a conversion hereunder shall be determined by adding the sum of (i) the quotient obtained by dividing (x) the outstanding principal amount of this Debenture to be converted and Outstanding Amount by (y) the Conversion Price per share offer price of the IPO. Following the conversion completed pursuant to this Section the Outstanding Balance shall be reduced to zero. (as defined herein)b) Upon the conversion pursuant to this Section, the Lender’s rights of repayment of the Outstanding Balance shall be extinguished. (c) No fractional shares shall be issued to the Lender, and (ii) the amount equal to (I) the product of (x) the outstanding principal amount of this Debenture to be converted and (y) the product of (1) the quotient obtained by dividing .12 by 360 and (2) the number of days for which such principal amount was outstanding, divided by (II) the Conversion Price on the Conversion Date, provided, that if the Company Shares shall have timely elected to pay the interest due on a Conversion Date in cash pursuant be rounded to the terms hereof, subsection (ii) shall not be used in the calculation of the number of shares of Common Stock issuable upon a conversion hereundernearest whole share. (Bd) Notwithstanding anything The Company and the Lender hereby undertake to execute any document as shall be required by the contrary contained herein, if on any Company in connection with the issuance of the Conversion Date:Shares. (1e) The Lender understands that the number of ordinary shares of Common Stock at the time authorized, unissued and unreserved for all purposes, or held as treasury stock, is insufficient to pay interest hereunder in shares Company issuable upon conversion of Common Stock; (2) the Underlying Shares issuable for such conversion (including any interest payable in shares) (x) are not registered for resale pursuant to an effective Underlying Shares Registration Statement and (y) may not Outstanding Balance will be sold without volume restrictions pursuant to “restricted securities” within the meaning of Rule 144(k) promulgated 144 under the Securities Act of 1933, as amended (as defined the “1933 Act”) and may not be sold, pledged, assigned or transferred and must be held indefinitely in Section 6); the absence of (3i) an effective registration statement under the Common Stock is not listed 1933 Act and applicable state securities laws with respect thereto or quoted for trading on the OTC (ii) an available exemption from, or on a Subsequent Market; (4) the Company has failed to timely satisfy its conversion obligations hereunder; or (5) the issuance of such shares of Common Stock would result in a violation of Sections 4(a)(ii), thentransaction not subject to, the Company may not pay interest in kind and must pay interest in cash by delivering, within three Trading Days of each applicable Conversion Date, an amount in cash equal to the product of (a) the outstanding principal amount registration requirements of the Debentures to be converted on such Conversion Date and (b) the product 1933 Act as evidenced by an opinion of (x) the quotient obtained by dividing .12 by 360 and (y) the number of days for which such principal amount was outstanding. (C) This Debenture shall be convertible into shares of Common Stock at the option of the Holder, in whole or in part at any time and from time to time, after the Original Issue Date (subject to the limitations on conversion set forth in Section 4(a)(ii) hereof). The Holder shall effect conversions by delivering counsel satisfactory to the Company a completed notice substantially in the form attached hereto as Exhibit A (a "Conversion Notice")that such registration is not required. The Conversion Notice certificates for the ordinary shares of the Company issuable upon conversion of the Outstanding Balance shall set forth bear the remaining principal amount of this Debenture and all accrued and unpaid interest thereon subsequent following or similar legend (in addition to such other restrictive legends as are required or deemed advisable under any applicable law or any other agreement to which the Company is a party) “THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR UNDER THE SECURITIES LAWS OF ANY STATES. THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE SOLD, DISTRIBUTED, OFFERED, PLEDGED, ENCUMBERED, ASSIGNED OR OTHERWISE TRANSFERRED EXCEPT AS PERMITTED UNDER THE SECURITIES ACT AND THE APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION, AN AVAILABLE EXEMPTION THEREFROM, OR A TRANSACTION NOT SUBJECT TO THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OR UNDER THE SECURITIES LAWS OF ANY STATES. UNLESS SOLD PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, THE ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY PROPOSED TRANSFER OR RESALE IS IN COMPLIANCE WITH THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS.” (f) The Lender consents to the conversion at issue. The date Company making a notation on which a Conversion Notice is delivered is its records or giving instructions to any transfer agent of the "Conversion Date." Unless the Holder is converting the entire principal amount outstanding under this Debenture, the Holder is not be required to physically surrender this Debenture to securities of the Company in order to effect conversions. Subject to Section 4(b), each Conversion Notice, once given, shall be irrevocable. Conversions hereunder shall have implement the effect of lowering the outstanding principal amount of this Debenture plus all accrued restrictions on transfer set forth and unpaid interest thereon in an amount equal to the applicable conversion, which shall be evidenced by notations made in the Conversion Notice. The Holder and the Company shall maintain records showing the principal amount converted and the date of such conversions. In the event of any dispute or discrepancy, the records of the Holder shall be controlling and determinative in the absence of manifest errordescribed herein.

Conversion. (ANotwithstanding any covenants in this Agreement requiring Cartus, CFC or ARSC to maintain its “corporate existence”, such entity may elect to convert their status from that of a Delaware corporation to that of a Delaware limited liability company, either by filing a certificate of conversion with the Delaware Secretary of State or by merging with and into a newly formed Delaware limited liability company(such conversion or merger, as applicable, being herein called a “Conversion”) This Debenture shall be convertible into shares of Common Stock at the option of the Holder, in whole or in part at any time and from time to time, after the Original Issue Date (subject to the limitations on conversion set forth in Section 4(a)(iiconditions that: (a) hereof). The number of shares of Common Stock issuable upon a conversion hereunder shall be determined by adding the sum of (i) the quotient obtained by dividing (x) the outstanding principal amount Person formed by such Conversion (any such Person, the “Surviving Entity”) is an entity organized and existing under the laws of this Debenture the United States of America or any State thereof, (y) such Surviving Entity expressly assumes, by an agreement in form and substance satisfactory to be converted the applicable transferee and its assignees, performance of every covenant and obligation of such Person under the Transaction Documents to which such Person is a party and (z) such Surviving Entity delivers to the other parties to the Fifth Omnibus Amendment hereto dated as of April 10, 2007 (such parties, the “Amendment Parties”) an opinion of counsel that such Surviving Entity is duly organized and validly existing under the laws of its organization, has duly executed and delivered such supplemental agreement, and such supplemental agreement is a valid and binding obligation of such Surviving Entity, enforceable against such Surviving Entity in accordance with its terms (subject to customary exceptions relating to bankruptcy and equitable principles) and covering such other matters as the Amendment Parties may reasonably request; (b) all actions necessary to maintain the perfection of the security interests or ownership interests created by such Person under the Transaction Documents to which such Person is a party in connection with such Conversion shall have been taken, as evidenced by an opinion of counsel reasonably satisfactory to the Amendment Parties; (c) so long as such Person is the Servicer, no Servicer Default or Unmatured Servicer Default is then occurring or would result from such Conversion; (d) in the case of a Conversion of CFC or ARSC, (x) the organizational documents of any Surviving Entity with respect to CFC or ARSC shall contain limitations on its business activities and requirements for independent directors or managers substantially equivalent to those set forth in its current organizational documents, and (y) the Conversion Price (as defined herein), and (ii) the amount equal to (I) the product of (x) the outstanding principal amount of this Debenture to be converted and (y) the product of (1) the quotient obtained by dividing .12 by 360 and (2) the number of days for which such principal amount was outstanding, divided by (II) the Conversion Price on the Conversion Date, provided, that if the Company ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ shall have timely elected to pay the interest due on a Conversion Date in cash pursuant delivered an opinion of counsel reasonably satisfactory to the terms hereofAmendment Parties that such Conversion will not, subsection in and of itself, alter the conclusions set forth in its opinions previously issued in connection with the Transaction Documents with respect to true sale matters, substantive consolidation matters and bankruptcy issues relating to “home sale proceeds” (iito the extent such opinions relate to such Person); and (e) each Amendment Party shall not have received such other documents as such Amendment Party may reasonably request. In connection with any such Conversion and the resulting change in name of such entity, Cartus, CFC and/or ARSC, as applicable, shall be used required to comply with the name change covenants in the calculation Transaction Documents, except that to the extent 30 days prior written notice of the number of shares of Common Stock issuable upon a conversion hereunder. (B) Notwithstanding anything name change is required, such notice period shall be reduced to five Business Days. From and after any such Conversion effected in compliance with the contrary contained hereinabove conditions, if on any Conversion Date: (1) the number of shares of Common Stock at the time authorized, unissued and unreserved for all purposes, or held as treasury stock, is insufficient to pay interest hereunder in shares of Common Stock; (2) the Underlying Shares issuable for such conversion (including any interest payable in shares) (x) are not registered for resale pursuant to an effective Underlying Shares Registration Statement and (y) may not be sold without volume restrictions pursuant to Rule 144(k) promulgated under the Securities Act (as defined in Section 6); (3) the Common Stock is not listed or quoted for trading on the OTC or on a Subsequent Market; (4) the Company has failed to timely satisfy its conversion obligations hereunder; or (5) the issuance of such shares of Common Stock would result in a violation of Sections 4(a)(ii), then, the Company may not pay interest in kind and must pay interest in cash by delivering, within three Trading Days of each applicable Conversion Date, an amount in cash equal to the product of (a) all references in the outstanding principal amount of the Debentures Transaction Documents to any Person which has altered its corporate structure to become a limited liability company shall be deemed to be converted on references to the Surviving Entity as successor to such Conversion Date and Person, (b) all representations, warranties and covenants in the product Transaction Documents which state that any of Cartus, CFC or ARSC is or is required to be a corporation shall be deemed to permit and require the Surviving Entity to be a limited liability company, (xc) all references to such Person’s certificate of incorporation, other organizational documents, capital stock, corporate action or other matters relating to its corporate form will be deemed to be references to the quotient obtained by dividing .12 by 360 organizational documents and analogous matters relating to limited liability companies, (d) all references to such Person’s directors or independent directors will be deemed to be references to the Surviving Entity’s directors, independent directors, managers or independent managers, as the case may be and (ye) the number of days for which such principal amount was outstanding. (C) This Debenture no representation, warranty or covenant in any Transaction Document shall be convertible into shares of Common Stock at the option deemed to be breached or violated solely as a result of the Holderfact that the Surviving Entity in any Conversion may be disregarded as a separate entity for state, in whole local or in part at any time and from time to time, after the Original Issue Date (subject to the limitations on conversion set forth in Section 4(a)(ii) hereof). The Holder shall effect conversions by delivering to the Company a completed notice substantially in the form attached hereto as Exhibit A (a "Conversion Notice"). The Conversion Notice shall set forth the remaining principal amount of this Debenture and all accrued and unpaid interest thereon subsequent to the conversion at issue. The date on which a Conversion Notice is delivered is the "Conversion Datefederal income tax purposes." Unless the Holder is converting the entire principal amount outstanding under this Debenture, the Holder is not be required to physically surrender this Debenture to the Company in order to effect conversions. Subject to Section 4(b), each Conversion Notice, once given, shall be irrevocable. Conversions hereunder shall have the effect of lowering the outstanding principal amount of this Debenture plus all accrued and unpaid interest thereon in an amount equal to the applicable conversion, which shall be evidenced by notations made in the Conversion Notice. The Holder and the Company shall maintain records showing the principal amount converted and the date of such conversions. In the event of any dispute or discrepancy, the records of the Holder shall be controlling and determinative in the absence of manifest error.

Conversion. (A) This Debenture shall Warrant may be convertible into shares of Common Stock at converted by the option of the Holderholder hereof, in whole or in part at part, into shares of Class A Common Stock, during normal business hours on any time and from time to time, after the Original Issue Date (subject Business Day on or prior to the limitations on conversion set forth in Expiration Date, by surrender of this Warrant to the Company at its office maintained pursuant to Section 4(a)(ii13.2(a) hereof). The , accompanied by a conversion notice in substantially the form attached to this Warrant (or a reasonable facsimile thereof) duly executed by such holder, and such holder shall thereupon be entitled to receive a number of duly authorized, validly issued, fully paid and nonassessable shares of Class A Common Stock issuable upon a conversion hereunder shall be determined by adding equal to the quotient of: (i) the excess of: (A) an amount equal to the sum of (i) the quotient obtained by dividing (x) the outstanding principal amount of this Debenture to be converted and (y) the Conversion Price (as defined herein), and (ii) the amount equal to (I) the product of (x) the outstanding principal amount of this Debenture to be converted and (y) the product of (1) the quotient obtained by dividing .12 by 360 and (2) the number of days for which such principal amount was outstanding, divided by (II) the Conversion Price on the Conversion Date, provided, that if the Company shall have timely elected to pay the interest due on a Conversion Date in cash pursuant to the terms hereof, subsection (ii) shall not be used in the calculation of the number of shares of Common Stock issuable upon a conversion hereunder. (B) Notwithstanding anything to the contrary contained herein, if on any Conversion Date: (1aa) the number of shares of Class A Common Stock at determined as provided in Section 2 hereof which such holder would be entitled to receive upon exercise of this Warrant for the time authorized, unissued and unreserved for all purposes, or held as treasury stock, is insufficient to pay interest hereunder in number of shares of Class A Common Stock; Stock designated in such conversion notice multiplied by (2bb) the Underlying Shares issuable for Current Market Price of each such conversion (including any interest payable in shares) (x) are not registered for resale pursuant to an effective Underlying Shares Registration Statement and (y) may not be sold without volume restrictions pursuant to Rule 144(k) promulgated under the Securities Act (as defined in Section 6); (3) the share of Class A Common Stock is not listed or quoted for trading on the OTC or on a Subsequent Market; (4) the Company has failed to timely satisfy its conversion obligations hereunder; or (5) the issuance of such shares of Common Stock would result in a violation of Sections 4(a)(ii), then, the Company may not pay interest in kind and must pay interest in cash by delivering, within three Trading Days of each applicable Conversion Date, an amount in cash equal to the product of (a) the outstanding principal amount of the Debentures to be converted on such Conversion Date and (b) the product of (x) the quotient obtained by dividing .12 by 360 so designated and (y) the Current Market Price of any Other Securities and the fair value of any other property (determined in good faith by the Board of Directors of the Company) such holder would be entitled to receive upon exercise of this Warrant for the number of days for which shares of Class A Common Stock designated in such principal amount was outstanding.conversion notice (CB) This Debenture shall be convertible into shares of Common Stock at the option of the Holder, in whole or in part at any time and from time to time, after the Original Issue Date (subject to the limitations on conversion set forth in Section 4(a)(ii) hereof). The Holder shall effect conversions by delivering to the Company a completed notice substantially in the form attached hereto as Exhibit A (a "Conversion Notice"). The Conversion Notice shall set forth the remaining principal amount of this Debenture and all accrued and unpaid interest thereon subsequent to the conversion at issue. The date on which a Conversion Notice is delivered is the "Conversion Date." Unless the Holder is converting the entire principal amount outstanding under this Debenture, the Holder is not be required to physically surrender this Debenture to the Company in order to effect conversions. Subject to Section 4(b), each Conversion Notice, once given, shall be irrevocable. Conversions hereunder shall have the effect of lowering the outstanding principal amount of this Debenture plus all accrued and unpaid interest thereon in an amount equal to (x) the applicable conversionnumber of shares of Class A Common Stock (without giving effect to any adjustment thereof) designated in such conversion notice multiplied by (y) the Exercise Price (ii) such Current Market Price of a share of Class A Common Stock. For all purposes of this Warrant (other than this Section 3.1), which any reference herein to the exercise of this Warrant shall be evidenced by notations made deemed to include a reference to the conversion of this Warrant into Class A Common Stock in accordance with the Conversion Notice. The Holder and the Company shall maintain records showing the principal amount converted and the date terms of such conversions. In the event of any dispute or discrepancy, the records of the Holder shall be controlling and determinative in the absence of manifest errorthis Section 3.1(b).

Conversion. Subject to and in compliance with, the provisions contained herein, the Holder is entitled, at his option, at any time prior to the Maturity Date, or in case this Note or some portion hereof shall have been called for prepayment prior to such date, then, in respect of this Note or such portion hereof, until and including, but not after, the close of business within 30 days of the date of notice of prepayment, to convert the original principal amount of this Note (Aor any portion thereof), together with accrued but unpaid interest thereon, into fully paid and nonassessable shares (calculated as to each conversion to the nearest share) This Debenture of common stock (the “Shares”) of the Borrower by surrender of this Note, duly endorsed (if so required by the Borrower) or assigned to the Borrower or in blank, to “PSM Holdings, Inc.” at its offices, accompanied by written notice to the Borrower, in the form set forth below, that the holder hereof selects to convert this Note or, if less than the entire principal amount hereof is to be converted, the portion hereof to be converted. Such conversion shall be convertible into shares effected at the per share rate of Common Stock at sold pursuant to a Qualified Offering by the option Borrower. For purposes of this Section 4, the term “Qualified Offering” shall mean one or more offerings (whether or not proceeds are received by the Borrower pursuant to such offering) of debt or equity securities of the Holder, Borrower to non-affiliates in whole or in part the aggregate amount of at any time and from time to time, least $1,000,000 commenced after the Original Issue Date (subject to the limitations on conversion set forth in Section 4(a)(ii) hereof)Issuance Date. The number of shares of Common Stock issuable upon a conversion hereunder price shall be determined by adding the sum of (i) the quotient obtained by dividing (x) the outstanding principal amount of this Debenture to be converted and (y) the Conversion Price (as defined herein), and (ii) the amount equal to (I) the product of (x) the outstanding principal amount of this Debenture to be converted and (y) the product of (1) the quotient obtained by dividing .12 by 360 and (2) the number of days for which such principal amount was outstanding, divided by (II) the Conversion Price on the Conversion Date, provided, that if the Company shall have timely elected to pay the interest due on a Conversion Date in cash pursuant to the terms hereof, subsection (ii) shall not be used in the calculation lowest of the number of shares of Common Stock issuable upon a conversion hereunder. (B) Notwithstanding anything to the contrary contained herein, if on any Conversion Date: (1) the number of shares of Common Stock at the time authorized, unissued and unreserved for all purposesoffering price per common share, or held as treasury the conversion or exercise price for common stock, is insufficient to pay interest hereunder in shares any such Qualified Offering. No fractions of Common Stock; (2) the Underlying Shares issuable for such conversion (including will be issued on conversion, but instead of any interest payable in shares) (x) are not registered for resale pursuant to an effective Underlying Shares Registration Statement and (y) may not be sold without volume restrictions pursuant to Rule 144(k) promulgated under the Securities Act (as defined in Section 6); (3) the Common Stock is not listed or quoted for trading on the OTC or on a Subsequent Market; (4) the Company has failed to timely satisfy its conversion obligations hereunder; or (5) the issuance of such shares of Common Stock would result in a violation of Sections 4(a)(ii), thenfractional interest, the Company may not Maker will pay interest in kind and must pay interest in cash by delivering, within three Trading Days of each applicable Conversion Date, an amount in cash equal to the product of (a) the outstanding principal amount of the Debentures to be converted on such Conversion Date and (b) the product of (x) the quotient obtained by dividing .12 by 360 and (y) the number of days for which such principal amount was outstandingadjustments as provided herein. (C) This Debenture shall be convertible into shares of Common Stock at the option of the Holder, in whole or in part at any time and from time to time, after the Original Issue Date (subject to the limitations on conversion set forth in Section 4(a)(ii) hereof). The Holder shall effect conversions by delivering to the Company a completed notice substantially in the form attached hereto as Exhibit A (a "Conversion Notice"). The Conversion Notice shall set forth the remaining principal amount of this Debenture and all accrued and unpaid interest thereon subsequent to the conversion at issue. The date on which a Conversion Notice is delivered is the "Conversion Date." Unless the Holder is converting the entire principal amount outstanding under this Debenture, the Holder is not be required to physically surrender this Debenture to the Company in order to effect conversions. Subject to Section 4(b), each Conversion Notice, once given, shall be irrevocable. Conversions hereunder shall have the effect of lowering the outstanding principal amount of this Debenture plus all accrued and unpaid interest thereon in an amount equal to the applicable conversion, which shall be evidenced by notations made in the Conversion Notice. The Holder and the Company shall maintain records showing the principal amount converted and the date of such conversions. In the event of any dispute or discrepancy, the records of the Holder shall be controlling and determinative in the absence of manifest error.

Conversion. (i) Conversion at Option of Holder. (A) This Debenture shall ------------------------------ be convertible into shares of Common Stock at the option of the Holder, in whole or in part at any time and from time to time, after the Original Issue Date (subject to the limitations on conversion set forth in Section 4(a)(ii) hereof). The number of shares of Common Stock issuable upon a conversion hereunder shall be determined by adding equals the sum of (i) the quotient obtained by dividing (x) the outstanding principal amount of this Debenture to be converted and by (y) the Conversion Price (as defined herein), and (ii) the amount equal to (I) the product of (x) the outstanding principal amount of this Debenture to be converted and (y) the product of (1) the quotient obtained by dividing .12 by 360 and (2) the number of days for which such principal amount was outstanding, divided by (II) the Conversion Price on the Conversion Date, provided, that if -------- the Company Holder shall have timely elected to pay receive the interest due on a Conversion Date in cash pursuant to the terms hereofcash, subsection (ii) shall not be used in the calculation of the number of shares of Common Stock issuable upon a conversion hereunder. (B) Notwithstanding anything to the contrary contained herein, if on any Conversion Date: (1) the number of shares of Common Stock at the time authorized, unissued and unreserved for all purposes, or held as treasury stock, is insufficient to pay interest hereunder in shares of Common Stock; (2) the Underlying Shares issuable for such conversion (including any interest payable in shares) (x) are not registered for resale pursuant to an effective Underlying Shares Registration Statement and (y) may not be sold without volume restrictions pursuant to Rule 144(k) promulgated under the Securities Act (as defined in Section 6); (3) the Common Stock is not listed or quoted for trading on the OTC or on a Subsequent Market; (4) the Company has failed to timely satisfy its conversion obligations hereunder; or (5) the issuance of such shares of Common Stock would result in a violation of Sections 4(a)(ii), then, the Company may not pay interest in kind and must pay interest in cash by delivering, within three Trading Days of each applicable Conversion Date, an amount in cash equal to the product of (a) the outstanding principal amount of the Debentures to be converted on such Conversion Date and (b) the product of (x) the quotient obtained by dividing .12 by 360 and (y) the number of days for which such principal amount was outstanding. (C) This Debenture shall be convertible into shares of Common Stock at the option of the Holder, in whole or in part at any time and from time to time, after the Original Issue Date (subject to the limitations on conversion set forth in Section 4(a)(ii) hereof). The Holder shall effect conversions by delivering to the Company a completed notice substantially in the form attached hereto as Exhibit A (a --------- "Conversion Notice") including a completed Conversion Schedule in the form of ----------------- Schedule 1 to the Conversion Notice (on each Conversion Date, the "Conversion ---------- ---------- Schedule"). The Conversion Notice Schedule shall set forth the remaining principal -------- amount of this Debenture and all accrued and unpaid interest thereon subsequent to the conversion at issue. The date on which a Conversion Notice is delivered is the "Conversion Date." Unless the Holder is converting the entire principal --------------- amount outstanding under this Debenture, the Holder is not be required to physically surrender this Debenture to the Company in order to effect conversions. Subject to Section 4(b), each Conversion Notice, once given, shall be irrevocable. Conversions hereunder shall have the effect of lowering the outstanding principal amount of this Debenture plus all accrued and unpaid interest thereon in an amount equal to the applicable conversion, which shall be evidenced by notations made entries set forth in the Conversion NoticeSchedule. The Holder and the Company shall maintain records showing the principal amount converted and the date of such conversions. In the event of any dispute or discrepancy, the records of the Holder shall be controlling and determinative in the absence of manifest error.

Conversion. (Aa) This Debenture shall be convertible into shares of Common Stock at the option Upon termination of the HolderMerger Agreement pursuant to Sections 8.2(d), in whole 8.3(a) or in part at any time 8.3(b) thereof (the "Conversion Date"), all Loans and from time to time, after the Original Issue Date (subject to the limitations on conversion set forth in Section 4(a)(ii) hereof). The number of shares of Common Stock issuable upon a conversion hereunder Obligations shall be determined by adding the sum of (i) the quotient obtained by dividing (x) the outstanding principal amount of this Debenture to automatically be converted and (ythe "Conversion") the Conversion Price (as defined herein), and (ii) the amount equal to (I) the product of (x) the outstanding principal amount of this Debenture to be converted and (y) the product of (1) the quotient obtained by dividing .12 by 360 and (2) the number of days for which such principal amount was outstanding, divided by (II) the Conversion Price on the Conversion Date, provided, that if the Company shall have timely elected to pay the interest due on a Conversion Date in cash pursuant to the terms hereof, subsection (ii) shall not be used in the calculation of into the number of shares of Common Stock issuable upon a conversion hereunderof Borrower equal to the aggregate amount of the Loans and Obligations (without duplication) then outstanding, divided by the Exchange Ratio calculated as of the Conversion Date, as such Exchange Ratio may have been adjusted pursuant to the terms of the Merger Agreement. (Bb) Notwithstanding anything The Conversion shall be deemed to have been made immediately before the contrary contained herein, if close of business on any the Conversion Date: , so that the rights of Lender under this Agreement and the Security Agreement shall cease at such time (1other than those rights that expressly survive the termination of this Agreement) and Lender shall be treated for all purposes as having become the record holder or holders of the Common Stock described in Section 3.6(a) at such time, and the number of shares of Common Stock to be received by Lender shall be determined at such time. (c) Borrower covenants that it will at all times reserve and keep available out of its authorized Common Stock, solely for the time authorizedpurpose of issuance upon conversion of the Loans and Obligations as herein provided, unissued such number of shares of Common Stock as shall be issuable upon the conversion of the entire Commitment. Borrower covenants that all shares of Common Stock which shall be so issuable shall be duly and unreserved validly issued and fully-paid and non-assessable. (d) Borrower covenants that if any shares of Common Stock required to be reserved for all purposesissuance upon conversion of the Loans and Obligations require registration with or approval of any Governmental Authority under any federal or state law before such shares may be issued upon conversion, Borrower will, at its expense and as expeditiously as possible, cause such shares to be duly registered or approved, as the case may be. (e) The issuance of certificates for shares of Common Stock upon the Conversion shall be made within one (1) Business Day of the Conversion Date without charge to Lender for any tax in respect of the issuance of such certificates, and such certificates shall be issued in the respective names of, or held in such names as treasury stockmay be directed by, is insufficient to pay interest hereunder in the holder of this Term Note. (f) To the extent that the Loans and Obligations are not converted into shares of Common Stock; (2) the Underlying Shares issuable for , such conversion (including any interest portion shall remain a secured debt of Borrower payable in shares) (x) are not registered for resale pursuant to an effective Underlying Shares Registration Statement and (y) may not be sold without volume restrictions pursuant to Rule 144(k) promulgated under accordance with the Securities Act (as defined in Section 6); (3) the Common Stock is not listed or quoted for trading on the OTC or on a Subsequent Market; (4) the Company has failed to timely satisfy its conversion obligations hereunder; or (5) the issuance of such shares of Common Stock would result in a violation of Sections 4(a)(ii), then, the Company may not pay interest in kind and must pay interest in cash by delivering, within three Trading Days of each applicable Conversion Date, an amount in cash equal to the product of (a) the outstanding principal amount of the Debentures to be converted on such Conversion Date and (b) the product of (x) the quotient obtained by dividing .12 by 360 and (y) the number of days for which such principal amount was outstanding. (C) This Debenture shall be convertible into shares of Common Stock at the option of the Holder, in whole or in part at any time and from time to time, after the Original Issue Date (subject to the limitations on conversion set forth in Section 4(a)(ii) hereof). The Holder shall effect conversions by delivering to the Company a completed notice substantially in the form attached hereto as Exhibit A (a "Conversion Notice"). The Conversion Notice shall set forth the remaining principal amount terms of this Debenture and all accrued and unpaid interest thereon subsequent to the conversion at issue. The date on which a Conversion Notice is delivered is the "Conversion Date." Unless the Holder is converting the entire principal amount outstanding under this Debenture, the Holder is not be required to physically surrender this Debenture to the Company in order to effect conversions. Subject to Section 4(b), each Conversion Notice, once given, shall be irrevocable. Conversions hereunder shall have the effect of lowering the outstanding principal amount of this Debenture plus all accrued and unpaid interest thereon in an amount equal to the applicable conversion, which shall be evidenced by notations made in the Conversion Notice. The Holder and the Company shall maintain records showing the principal amount converted and the date of such conversions. In the event of any dispute or discrepancy, the records of the Holder shall be controlling and determinative in the absence of manifest error.Agreement

Conversion. (a) Subject to the Ownership Cap, the Holder may, at its election, upon surrender (either in person, by mail (postage prepaid) or other means of delivery) of this Debenture along with a completed notice of conversion in the form attached hereto as Schedule "A" (the "Conversion Notice") This Debenture shall be convertible into shares of Common Stock at the option principal office of the HolderCompany in Toronto, in whole or in part Ontario at any time and from time to time, after time following the Original Issue Date (subject and prior to the limitations close of business on conversion set forth the Maturity Date, convert all or portions of the outstanding Principal Sum from time to time (the "Conversion Date") at the Conversion Price ("Holder Conversion"), in Section 4(a)(ii) hereofincrements of $1,000.00, unless there is less than $1,000.00 of the Principal Sum then outstanding (in which case the balance of the outstanding Principal Sum shall be convertible). The delivery of the Conversion Notice duly executed by the Holder and the surrender of this Debenture shall be deemed to constitute a valid and enforceable contract between the Holder and the Company whereby (i) the Holder subscribes for the number of shares Common Shares which the Holder shall be entitled to receive upon such Holder Conversion, (ii) the Holder releases the Company from all liability thereon or from all liability with respect to the portion of the Principal Sum converted, as the case may be, and (iii) the Company agrees that the surrender of this Debenture for Holder Conversion constitutes full payment of the subscription price for the Common Shares issuable on such Holder Conversion. To effect conversions hereunder, the Holder shall be required to physically surrender the Debenture to the Company. (b) As promptly as possible after receipt of the Conversion Notice and this Debenture, but subject to Section 4.5 hereof, the Company shall issue or cause to be issued a certificate, direct registration statement or entry into the CDS system in the name or names of the person or persons specified in the Conversion Notice for that number of Common Stock Shares deliverable upon the Holder Conversion. (c) If converted prior to the date that is 4 months and a day after the date hereof, the Holder acknowledges and agrees that a legend may be placed on the certificates, DRS Statements or CDS Position representing the Common Shares to the effect that the securities represented by such certificates, DRS Statements or CDS Position are subject to a hold period and may not be traded until the expiry of such hold period except as permitted by applicable securities legislation. (d) The number of Conversion Shares issuable upon a any conversion hereunder shall be determined by adding the sum of (i) the quotient obtained by dividing (x) by (y) where (x) is equal to the aggregate amount of the outstanding principal amount of this Debenture Principal Sum to be converted as of the Conversion Date and (y) is the Conversion Price Price. (as defined herein)e) Upon completion of the Holder Conversion, and (ii) the rights of the Holder to receive, in respect of the amount equal hereof so converted, the portion of the Principal Sum so converted shall cease and the Holder or the other person or persons in whose name or names any Common Shares shall be issuable upon such Holder Conversion shall be deemed to (I) the product of (x) the outstanding principal amount of this Debenture to be converted and (y) the product of (1) the quotient obtained by dividing .12 by 360 and (2) the number of days for which such principal amount was outstanding, divided by (II) the Conversion Price have become on the Conversion Date, provided, that if Date the Company shall have timely elected to pay the interest due on a Conversion Date in cash pursuant to the terms hereof, subsection (ii) shall not be used in the calculation holder or holders of the number record of shares of such Common Stock issuable upon a conversion hereunderShares represented thereby. (Bf) Notwithstanding anything to In the contrary contained herein, if on any Conversion Date: (1) the number of shares of Common Stock at the time authorized, unissued and unreserved for all purposes, or held as treasury stock, is insufficient to pay interest hereunder in shares of Common Stock; (2) the Underlying Shares issuable for such conversion (including any interest payable in shares) (x) are not registered for resale pursuant to an effective Underlying Shares Registration Statement and (y) may not be sold without volume restrictions pursuant to Rule 144(k) promulgated under the Securities Act (as defined in Section 6); (3) the Common Stock is not listed or quoted for trading on the OTC or on event that only a Subsequent Market; (4) the Company has failed to timely satisfy its conversion obligations hereunder; or (5) the issuance of such shares of Common Stock would result in a violation of Sections 4(a)(ii), then, the Company may not pay interest in kind and must pay interest in cash by delivering, within three Trading Days of each applicable Conversion Date, an amount in cash equal to the product of (a) the outstanding principal amount portion of the Debentures to be converted on such Conversion Date and (b) the product of (x) the quotient obtained by dividing .12 by 360 and (y) the number of days for which such principal amount was outstanding. (C) This Debenture shall be convertible into shares of Common Stock at the option of the Holder, in whole or in part at any time and from time to time, after the Original Issue Date (Principal Sum is subject to the limitations on conversion set forth in Section 4(a)(ii) hereof). The Holder shall effect conversions by delivering to the Company a completed notice substantially in the form attached hereto as Exhibit A (a "Conversion Notice"). The Conversion Notice shall set forth the remaining principal amount of this Debenture and all accrued and unpaid interest thereon subsequent to the conversion at issue. The date on which a Conversion Notice is delivered is the "Conversion Date." Unless the Holder is converting the entire principal amount outstanding under this DebentureConversion, the Holder is will be entitled to receive a replacement Debenture representing the Principal Sum not be required subject to physically surrender this Debenture to Holder Conversion on the Company in order to effect conversions. Subject to Section 4(b), each Conversion Notice, once given, shall be irrevocable. Conversions hereunder shall have the effect of lowering the outstanding principal amount of this Debenture plus all accrued same terms and unpaid interest thereon in an amount equal to the applicable conversion, which shall be evidenced by notations made in the Conversion Notice. The Holder and the Company shall maintain records showing the principal amount converted and the date of such conversions. In the event of any dispute or discrepancy, the records of the Holder shall be controlling and determinative in the absence of manifest errorprovisions contained herein.

Conversion. (A) This Debenture shall Stock Purchase Right may be convertible into shares of Common Stock at converted by the option of the Holderholder hereof, in whole or in part at part, into shares of Common Stock, during normal business hours on any time and from time to time, after the Original Issue Date (subject Business Day on or prior to the limitations on conversion set forth in Termination Date, by surrender of this Stock Purchase Right to the Company at its office maintained pursuant to Section 4(a)(ii10.2(a) hereof). The , accompanied by a conversion notice in substantially the form attached to this Stock Purchase Right (or a reasonable facsimile thereof) duly executed by such holder, and such holder shall thereupon be entitled to receive a number of duly authorized, validly issued, fully paid and nonassessable shares of Common Stock issuable upon a conversion hereunder shall be determined by adding the sum of (or Other Securities) equal to: (i) the quotient obtained by dividing an amount equal to: (xa) the outstanding principal amount of this Debenture to be converted and (y) the Conversion Price (as defined herein), and (ii) the an amount equal to (I) the product of (x) the outstanding principal amount of this Debenture to be converted and (y) the product of (1) the quotient obtained by dividing .12 by 360 and (2) the number of days for which such principal amount was outstanding, divided by (II) the Conversion Price on the Conversion Date, provided, that if the Company shall have timely elected to pay the interest due on a Conversion Date in cash pursuant to the terms hereof, subsection (ii) shall not be used in the calculation of the number of shares of Common Stock issuable upon a conversion hereunder. (B) Notwithstanding anything to the contrary contained herein, if on any Conversion Date: (1) the number of shares of Common Stock at the time authorized, unissued (or Other Securities) determined as provided in Sections 2 and unreserved for all purposes, or held as treasury stock, is insufficient 3 hereof which such holder would be entitled to pay interest hereunder in shares receive upon purchase of Common Stock; (2) the Underlying Shares issuable for such conversion (including any interest payable in shares) (x) are not registered for resale pursuant to an effective Underlying Shares Registration Statement and (y) may not be sold without volume restrictions pursuant to Rule 144(k) promulgated under the Securities Act (as defined in Section 6); (3) the Common Stock is not listed or quoted for trading on the OTC or on a Subsequent Market; (4) the Company has failed to timely satisfy its conversion obligations hereunder; or (5) the issuance of such shares of Common Stock would result pursuant to this Stock Purchase Right for the number of shares of Common Stock designated in a violation such conversion notice multiplied by (y) the Market Price on the date of Sections 4(a)(ii), then, the Company may not pay interest in kind and must pay interest in cash by delivering, within three Trading Days conversion of each applicable Conversion Date, an amount in cash equal to the product such share of Common Stock (aor such Other Securities) the outstanding principal amount of the Debentures to be converted on so receivable upon such Conversion Date and purchase minus (b) the product of an amount equal to (x) the quotient obtained number of shares of Common Stock (without giving effect to any adjustment thereof) designated in such conversion notice multiplied by dividing .12 by 360 and (y) the number of days for which such principal amount was outstanding.Deemed Purchase Price Per Share divided by (Cii) This Debenture shall be convertible into such Market Price of each such share of Common Stock (or Other Securities). For all purposes of this Stock Purchase Right (other than this Section 1.1), any reference herein to the purchase of shares of Common Stock at the option of the Holder, in whole or in part at any time and from time pursuant to time, after the Original Issue Date (subject this Stock Purchase Right shall be deemed to the limitations on conversion set forth in Section 4(a)(ii) hereof). The Holder shall effect conversions by delivering to the Company include a completed notice substantially in the form attached hereto as Exhibit A (a "Conversion Notice"). The Conversion Notice shall set forth the remaining principal amount of this Debenture and all accrued and unpaid interest thereon subsequent reference to the conversion at issue. The date on which a Conversion Notice is delivered is the "Conversion Date." Unless the Holder is converting the entire principal amount outstanding under this Debenture, the Holder is not be required to physically surrender this Debenture to the Company in order to effect conversions. Subject to Section 4(b), each Conversion Notice, once given, shall be irrevocable. Conversions hereunder shall have the effect of lowering the outstanding principal amount of this Debenture plus all accrued and unpaid interest thereon Stock Purchase Right into Common Stock (or other Securities) in an amount equal to accordance with the applicable conversion, which shall be evidenced by notations made in the Conversion Notice. The Holder and the Company shall maintain records showing the principal amount converted and the date terms of such conversions. In the event of any dispute or discrepancy, the records of the Holder shall be controlling and determinative in the absence of manifest errorthis Section 1.1.2.

Conversion. (Ai) This At any time after the Original Issue Date until this Debenture is no longer outstanding, this Debenture, including interest and principal, shall be convertible into shares of Common Stock ("Shares") at a price of eighty percent (80%) of the average of the five lowest volume weighted average prices ("VWAPs"), determined on the then current trading market for the Company's common stock, for ten (10) trading days prior to conversion (the "Set Price" and the "Pricing Period"), at the option of the Holder, in whole or in part at any time and from time to time, after the Original Issue Date (subject to the limitations on conversion set forth in Section 4(a)(ii) hereof). The number of shares of Common Stock issuable upon a conversion hereunder shall be determined by adding the sum of (i) the quotient obtained by dividing (x) the outstanding principal amount of this Debenture to be converted and (y) the Conversion Price (as defined herein), and (ii) the amount equal to (I) the product of (x) the outstanding principal amount of this Debenture to be converted and (y) the product of (1) the quotient obtained by dividing .12 by 360 and (2) the number of days for which such principal amount was outstanding, divided by (II) the Conversion Price on the Conversion Date, provided, that if the Company shall have timely elected to pay the interest due on a Conversion Date in cash pursuant to the terms hereof, subsection (ii) shall not be used in the calculation of the number of shares of Common Stock issuable upon a conversion hereunder. (B) Notwithstanding anything to the contrary contained herein, if on any Conversion Date: (1) the number of shares of Common Stock at the time authorized, unissued and unreserved for all purposes, or held as treasury stock, is insufficient to pay interest hereunder in shares of Common Stock; (2) the Underlying Shares issuable for such conversion (including any interest payable in shares) (x) are not registered for resale pursuant to an effective Underlying Shares Registration Statement and (y) may not be sold without volume restrictions pursuant to Rule 144(k) promulgated under the Securities Act (as defined in Section 6); (3) the Common Stock is not listed or quoted for trading on the OTC or on a Subsequent Market; (4) the Company has failed to timely satisfy its conversion obligations hereunder; or (5) the issuance of such shares of Common Stock would result in a violation of Sections 4(a)(ii), then, the Company may not pay interest in kind and must pay interest in cash by delivering, within three Trading Days of each applicable Conversion Date, an amount in cash equal to the product of (a) the outstanding principal amount of the Debentures to be converted on such Conversion Date and (b) the product of (x) the quotient obtained by dividing .12 by 360 and (y) the number of days for which such principal amount was outstanding. (C) This Debenture shall be convertible into shares of Common Stock at the option of the Holder, in whole or in part at any time and from time to time, after the Original Issue Date (subject to the limitations on conversion set forth in Section 4(a)(ii) hereof). The Holder shall effect conversions by delivering to the Company a completed notice substantially in the form of Notice of Conversion attached hereto as Exhibit Annex A (a "Notice of Conversion"), specifying the date on which such conversion (each a "Conversion") is to be effected (a "Conversion NoticeDate"). The If no Conversion Date is specified in a Notice of Conversion, the Conversion Date shall set forth be the remaining principal amount date that such Notice of this Debenture and all accrued and unpaid interest thereon subsequent to the conversion at issueConversion is provided hereunder. The date on which a Conversion Notice is delivered is the "Conversion Date." Unless the Holder is converting the entire principal amount outstanding under this DebentureTo effect conversions hereunder, the Holder is shall not be required to physically surrender this Debenture Debentures to the Company. The Company in order shall deliver any objection to effect conversionsany Notice of Conversion within five (5) Business Days of receipt of such notice. Subject to Section 4(b)The Holder and any assignee, each Conversion Noticeby acceptance of this Debenture, once givenacknowledge and agree that, shall be irrevocable. Conversions hereunder shall have by reason of the effect provisions of lowering this paragraph, following conversion of a portion of this Debenture, the outstanding unpaid and unconverted principal amount of this Debenture plus all accrued and unpaid interest thereon in an may be less than the amount equal stated on the face hereof. Any disagreement as to the applicable Set Price, Pricing Period, Shares due or any other issues relating to this Note shall be settled in accordance with the Dispute Resolution Procedures described below. ii) Shares from any such conversion delivered to Company by 4:00 pm EST will be delivered to Holder by 2:30 pm EST within five (5) business days of conversion notice delivery (see 4(i)). If those shares are not delivered in accordance with this timeframe stated in this Section 4(ii), at any time for any reason prior to offering those shares for sale in a private transaction or in the public market through its broker, Holder may rescind that particular conversion to have the conversion amount returned to the note balance with the conversion shares returned to the Borrower. The Company will make its commercially reasonable best efforts to deliver shares to Holder same day I next day. For each conversion, which shall be evidenced by notations made in the event that shares are not delivered by the third business day (inclusive of the day of the conversion), a penalty of $2,000 per day will be assessed for each day after the third business day (exclusive of the day of the conversion) until share delivery is made. Any such penalty will be added to the principal balance of the Note, under Holders expectation that any penalty amounts will tack back to the original date of the note). iii) The applicable portion of this Note shall not be convertible during any time that, and only to the extent that, the number of Shares to be issued to Holder upon such Conversion, when added to the number of shares of Common Stock, if any, that the Holder otherwise beneficially owns (outside of this Note, and not including any other securities of the Company held by Holder having a provision substantially similar to this paragraph) at the time of such Conversion, would exceed 4.99% (the “Maximum Percentage”) of the number of shares of Common Stock of the Company outstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon Conversion Noticeof this Note held by the Holder, as determined in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended (the “Beneficial Ownership Limitation”). The Holder and Beneficial Ownership Limitation provisions of this Section 4(iii) may be waived by ▇▇▇▇▇▇, at the Company shall maintain records showing the principal amount converted and the date election of such conversions. In Holder, upon not less than sixty-one (61) days prior written notice to the event of Company, to change the Beneficial Ownership Limitation to any dispute or discrepancy, the records other percentage of the Holder number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock upon Conversion of the Note held by the Holder. The provisions of this paragraph shall not be controlling construed and determinative implemented in a manner otherwise than in strict conformity with the absence terms of manifest errorthis Section 4(iii) to correct this paragraph (or any portion hereof) which may be defective or inconsistent with the intended Beneficial Ownership Limitation herein contained or to make changes or supplements necessary or desirable to properly give effect to such limitation.

Conversion. (Aa) This Debenture The Holder shall be convertible into shares of Common Stock have the right at any time prior to the option of the Holder, Maturity Date or a Prepayment Date to convert in whole or in part at any time the unpaid principal of this Note, and from time to timeaccrued and unpaid interest thereon, after the Original Issue Date (subject to the limitations on conversion set forth in Section 4(a)(ii) hereof). The into such number of fully-paid and nonassessable shares of Common Stock issuable upon a conversion hereunder shall be as is determined by adding dividing the sum of (i) the quotient obtained by dividing (x) the outstanding principal aggregate amount of this Debenture principal and interest to be converted and by the conversion price in effect on the date this Note is surrendered for conversion (y) the "Conversion Price (as defined hereinPrice"); provided, and (ii) that, following any Prepayment Date, a Holder shall continue to have the amount equal right to (I) the product of (x) the outstanding convert any principal amount of this Debenture to be converted and (y) the product of (1) the quotient obtained by dividing .12 by 360 and (2) the number of days for which such principal amount was outstandingNote that remains unpaid, divided by (II) the Conversion Price on the Conversion Date, provided, that if the Company shall have timely elected to pay the interest due on a Conversion Date in cash pursuant to the terms hereof, subsection (ii) shall not be used in the calculation of the number of shares of Common Stock issuable upon a conversion hereunder. (B) Notwithstanding anything to the contrary contained herein, if on any Conversion Date: (1) the number of shares of Common Stock at the time authorized, unissued and unreserved for all purposes, or held as treasury stock, is insufficient to pay interest hereunder in shares of Common Stock; (2) the Underlying Shares issuable for such conversion (including any interest payable in shares) (x) are not registered for resale pursuant to an effective Underlying Shares Registration Statement and (y) may not be sold without volume restrictions pursuant to Rule 144(k) promulgated under the Securities Act (as defined in Section 6); (3) the Common Stock is not listed or quoted for trading on the OTC or on a Subsequent Market; (4) the Company has failed to timely satisfy its conversion obligations hereunder; or (5) the issuance of such shares of Common Stock would result in a violation of Sections 4(a)(ii), then, the Company may not pay interest in kind and must pay interest in cash by delivering, within three Trading Days of each applicable Conversion Date, an amount in cash equal to the product of (a) the outstanding principal amount of the Debentures to be converted on such Conversion Date and (b) the product of (x) the quotient obtained by dividing .12 by 360 and (y) the number of days for which such principal amount was outstanding. (C) This Debenture shall be convertible into shares of Common Stock at the option of the Holder, in whole or in part at any time and from time to time, after the Original Issue Date (subject to the limitations on conversion set forth in Section 4(a)(ii) hereof). The Holder shall effect conversions by delivering to the Company a completed notice substantially in the form attached hereto as Exhibit A (a "Conversion Notice"). The Conversion Notice shall set forth the remaining principal amount of this Debenture and all together with accrued and unpaid interest thereon subsequent to the conversion at issuethereon. The date on which a initial Conversion Notice is delivered is the "Price shall be $2.75 per share of Common Stock. Such initial Conversion DatePrice shall be subject to adjustment as set forth in Paragraph 4." Unless the (b) The Holder is converting the entire principal amount outstanding under this Debenture, the Holder is not be required to physically surrender this Debenture to shall notify the Company in order of its intention to effect conversions. Subject to Section 4(b), each Conversion Notice, once given, shall be irrevocable. Conversions hereunder shall have the effect of lowering the outstanding principal amount convert all or a portion of this Debenture plus all accrued and unpaid interest thereon in an amount equal Note pursuant to the applicable conversion, which shall be evidenced by notations made in the Conversion Noticethis Paragraph 3. 1. The Holder and the Company shall maintain records showing the principal amount converted and Within five (5) Business Days after the date of such conversions. In notice of intention, the event Company shall deliver to the Holder a certificate, signed by the Company's Chief Executive Officer and Chief Financial Officer, to the effect that: (i) since the end of the Company's most recently completed fiscal year, there has been no material adverse change in the business, assets, properties, liabilities, condition (financial or otherwise) or results of operations of the Company or any of its subsidiaries; (ii) there is no material action, suit or proceeding, or governmental inquiry or investigation, pending, or, to the best of the Company's knowledge, threatened, against the Company or any of its subsidiaries; and (iii) neither the Company nor, to the best of the Company's knowledge, any other party thereto is in default in any material respect of any dispute of its obligations under any material agreement or discrepancycontract of the Company. If, for any reason, the records Company is unable to certify as to any of the above matters, it shall so notify the Holder, and shall deliver a certificate as to the remaining matters, within such five (5) Business Day period. The delivery of any certificate by the Company to the Holder pursuant to this Paragraph 3.1(b) shall be controlling and determinative in not obligate the absence of manifest errorHolder to convert this Note.

Conversion. 3.1 This Note, along with all accrued and unpaid interest, will be converted into Conversion Shares on the date (Athe “Conversion Date”) This Debenture shall be convertible into shares that the Company’s registration statement on Form S-1 filed in connection with the proposed acquisition of Common Stock at Virurl Inc. as set out in Letter of Intent dated April , 2014 (the option “Letter of Intent”), is declared effective by the Holder, in whole or in part at any time and from time to time, after the Original Issue Date (subject to the limitations on conversion set forth in Section 4(a)(ii) hereof). Securities Exchange Commission. 3.2 The number of shares of Common Stock Conversion Shares issuable upon a conversion hereunder of the Principal Amount under this Note shall be determined by adding the sum of (i) the quotient obtained by dividing (x) by (y) where (x) is equal to the Principal Amount and (y) is the Conversion Price (as hereinafter defined). 3.3 The number of Conversion Shares issuable upon a conversion of any accrued and outstanding principal interest on this Note (the “Accrued Interest”) shall be determined by the quotient obtained by dividing (x) by (y) where (x) is equal to the amount of this Debenture Accrued Interest to be converted and (y) is the Conversion Price. 3.4 Not later than five Trading Days after any Conversion Date, the Company will deliver to the Holder a certificate or certificates representing the Conversion Shares (bearing such legends as may be required by applicable law and those required by the Subscription Agreement) representing the aggregate number of Conversion Shares being acquired. 3.5 The conversion price (the “Conversion Price”) in effect on the Conversion Date shall be equal to $0.125 per share. 3.6 The Company covenants that it will at all times reserve and keep available out of its authorized and unissued shares of Common Stock such number of shares as is necessary in order to ensure that a sufficient number are available for the purpose of issuance of Conversion Shares upon conversion of this Note, free from pre-emptive rights or any other actual contingent purchase rights of Persons other than the Holder. The Company covenants that all Conversion Shares shall, upon issue, be duly and validly authorized, issued and fully paid and non-assessable. 3.7 Upon a conversion hereunder, the Company shall not be required to issue stock certificates representing fractions of any Conversion Shares, and the number of Conversion Shares shall be rounded down to the nearest whole number. 3.8 If the Company, at any time while this Note is outstanding: (A) pays a stock dividend or otherwise makes a distribution or distributions in shares of its Common Stock or any other equity or equity equivalent securities payable in shares of Common Stock, (B) subdivides outstanding shares of Common Stock into a larger number of shares, (C) combines (including by way of reverse stock split) outstanding shares of Common Stock into a smaller number of shares, or (D) issues by reclassification of shares of the Common Stock any shares of capital stock of the Company, then the Conversion Price (as defined herein), and (ii) shall be multiplied by a fraction of which the amount equal to (I) the product of (x) the outstanding principal amount of this Debenture to numerator shall be converted and (y) the product of (1) the quotient obtained by dividing .12 by 360 and (2) the number of days for which such principal amount was outstanding, divided by (II) the Conversion Price on the Conversion Date, provided, that if the Company shall have timely elected to pay the interest due on a Conversion Date in cash pursuant to the terms hereof, subsection (ii) shall not be used in the calculation of the number of shares of Common Stock issuable upon a conversion hereunder. (B) Notwithstanding anything to the contrary contained hereinexcluding treasury shares, if on any Conversion Date: (1any) outstanding before such event and of which the denominator shall be the number of shares of Common Stock at the time authorized, unissued and unreserved for all purposes, or held as treasury stock, is insufficient to pay interest hereunder in shares of Common Stock; (2) the Underlying Shares issuable for outstanding after such conversion (including any interest payable in shares) (x) are not registered for resale event. Any adjustment made pursuant to an this Section shall become effective Underlying Shares Registration Statement immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution and (y) may not be sold without volume restrictions pursuant shall become effective immediately after the effective date in the case of a subdivision, combination or re-classification. 3.9 The Holder acknowledges and agrees that it is a condition to Rule 144(k) promulgated under the Securities Act (as defined in Section 6); (3) the Common Stock is not listed or quoted for trading on the OTC or on a Subsequent Market; (4) the Company has failed to timely satisfy its conversion obligations hereunder; or (5) the issuance of such shares of Common Stock would result in a violation of Sections 4(a)(ii), then, the Company may not pay interest in kind and must pay interest in cash by delivering, within three Trading Days of each applicable Conversion Date, an amount in cash equal to the product of (a) the outstanding principal amount of the Debentures to be converted on such Conversion Date and (b) the product of (x) the quotient obtained by dividing .12 by 360 and (y) the number of days for which such principal amount was outstanding. (C) This Debenture shall be convertible into shares of Common Stock at the option of the Holder, in whole or in part at any time and from time to time, after the Original Issue Date (subject to the limitations on conversion set forth in Section 4(a)(ii) hereof). The Holder shall effect conversions by delivering to the Company a completed notice substantially in the form attached hereto as Exhibit A (a "Conversion Notice"). The Conversion Notice shall set forth the remaining principal amount of this Debenture and all accrued and unpaid interest thereon subsequent to the conversion at issue. The date on which a Conversion Notice is delivered is the "Conversion Date." Unless the Holder is converting the entire principal amount outstanding under this Debenture, the Holder is not be required to physically surrender this Debenture to the Company in order to effect conversions. Subject to Section 4(b), each Conversion Notice, once given, shall be irrevocable. Conversions hereunder shall have the effect of lowering the outstanding principal amount of this Debenture plus all accrued and unpaid interest thereon in an amount equal to the applicable conversion, which shall be evidenced by notations made in the Conversion Notice. The Holder and the Company shall maintain records showing the principal amount converted and Shares that all Conversion Shares will be placed into escrow with ▇▇▇▇▇ ▇▇▇▇▇▇ LLP for a period of 12 months from the date of such conversions. In the event of any dispute or discrepancy, the records issuance of the Conversion Shares subject to a Pooling Agreement (to be negotiated by the Company and the Holder shall in good faith and acting reasonably) to be controlling entered into between the Company and determinative the Holder in connection with and as a condition to the absence issuance of manifest errorthe Conversion Shares.

Conversion. (A) This Debenture shall be convertible into shares of Common Stock at the option of the Holder, in whole or in part at any time and from time to time, after the Original Issue Date (subject to the limitations on conversion set forth in Section 4(a)(ii) hereof). The number of shares of Common Stock issuable upon a conversion hereunder shall be determined by adding the sum of (i) the quotient obtained by dividing (x) the outstanding principal amount of this Debenture to be converted and (y) the Conversion Price (as defined herein), and (ii) the amount equal to (I) the product of (x) the outstanding principal amount of this Debenture to be converted and (y) the product of (1) the quotient obtained by dividing .12 by 360 and (2) the number of days for which such principal amount was outstanding, divided by (II) the Conversion Price on the Conversion Date, provided, that if the Company shall have timely elected to pay the interest due on a Conversion Date in cash pursuant Subject to the terms hereofand conditions of this Agreement, subsection (ii) the Investors shall not be used have the right to convert principal of their Convertible Notes into overseas shares of Cayman Co or equity interest in the calculation of Target Company based on the number of shares of Common Stock issuable upon a corresponding appraised value, in particular: 1.7.1 Investor 1 Note I conversion hereunder. (B) Notwithstanding anything to the contrary contained herein, if on any Conversion Date:and Investor 2 conversion (1) On the number of shares of Common Stock at fifth (5th) day immediately after the time authorized, unissued and unreserved for all purposes, or held as treasury stock, is insufficient following conditions precedent (the “Offshore Automatic Conversion Conditions”) applicable to pay interest hereunder in shares of Common Stock; an Investor (the condition precedent (c) below not applicable to Investor 2) are fully satisfied or waived by such Investor in writing (the Underlying Shares issuable for such conversion conditions precedent (including any interest payable a) to (c) below applicable with respect to Investor 1; and the conditions precedent (a) to (b) below applicable with respect to Investor 2) and the Offshore Automatic Conversion Conditions are waived jointly by the Investor and the Target Company (applicable to the condition precedent set out in shares(d) (xbelow) are not registered for resale pursuant to an effective Underlying Shares Registration Statement and (y) may not be sold without volume restrictions pursuant to Rule 144(k) promulgated under the Securities Act (as defined in Section 6); (3) the Common Stock is not listed or quoted for trading on the OTC or on a Subsequent Market; any such other date as the Investor and the Target Company agree upon in writing (4) the Company has failed to timely satisfy its conversion obligations hereunder; or (5) the issuance of such shares of Common Stock would result in a violation of Sections 4(a)(ii“Automatic Conversion Date”), then, the Company may not pay interest in kind and must pay interest in cash by delivering, within three Trading Days of each applicable Conversion Date, an amount in cash equal to the product of (a) the outstanding principal amount of Investor 1 Note equivalent to thirty million Chinese yuan (RMB30,000,000) (the Debentures “Investor 1 Note I”) shall be automatically converted into the corresponding number of series B+ preferred shares of Cayman Co (the “Overseas Shares I of Investor 1”) on basis that then fully-diluted pre-money valuation of Cayman Co is RMB900,000,000 (“Pre-money Valuation of Investor 1 Conversion I”, and for the avoidance of doubt, the calculation of such fully-diluted pre-money valuation shall include the incentive shares/options (including the First Tranche Reserved Incentive Shares (as defined below), but for the avoidance of doubt, excluding the Reserved Incentive Shares II (as defined below)) reserved, issued and enlarged by Cayman Co under the Restructuring Framework Agreement, and ordinary shares issued by Cayman Co to be converted on such Conversion Date the Founders or their wholly-owned holding entity or trust established by them); and (b) the product of (x) Investor 2 Note shall be automatically converted into the quotient obtained by dividing .12 by 360 and (y) the corresponding number of series B+ preferred shares of Cayman Co (the “Overseas Shares of Investor 2”, together with Overseas Shares I of Investor 1, collectively the “First Tranche Overseas Shares”; and the corresponding conversions collectively referred to as the “Offshore Automatic Conversion” ) on basis that the then fully-diluted pre-money valuation of Cayman Co is RMB1,000,000,000 (for the avoidance of doubt, the calculation of such fully-diluted pre-money valuation shall include the incentive shares/options (including the First Tranche Reserved Incentive Shares (as defined below), but for the avoidance of doubt, excluding the Reserved Incentive Shares II (as defined below)) reserved, issued and enlarged by Cayman Co under the Restructuring Framework Agreement, and ordinary shares issued by Cayman Co to the Founders or their wholly-owned holding entity or trust established by them). Cayman Co shall issue the First Tranche Overseas Shares to the aforementioned Investors (or their designated affiliates) on the Automatic Conversion Date, and shall provide those Investors with a scanned copy of the register of members, which shall specify such Investors (or their designated affiliates) as the holders of the corresponding First Tranche Overseas Shares and shall be certified by the registered office provider of Cayman Co, and shall also provide a scanned copy of the share certificate duly executed and affixed with the common seal of Cayman Co (the original share certificate shall be provided to the aforementioned Investors within fifteen (15) days after the Automatic Conversion Date): (a) pursuant to the Restructuring Framework Agreement, the Group has completed the Red Chip Restructuring and Cayman Co has completed the reservation of 150,000,000 ordinary shares (corresponding to the equity interest in the Target Company held in China by X-Charge Management as of the execution date of this Agreement, which, together with the Reserved Incentive Shares I (as defined below), are referred to as the “First Tranche Reserved Incentive Shares”); and no circumstance specified in paragraph 5.4.3 hereof occur; (b) Cayman Co, all of its then shareholders (including all existing shareholders of the Target Company other than X-Charge Management or its designated overseas affiliates), the Investors (or their designated affiliates), and the Offshore Investors (or their designated affiliates) have executed the Amended and Restated Investors' Rights Agreement of Cayman Co and the general meeting of Cayman Co has duly resolved to pass the Amended and Restated Memorandum and Articles, provided that these two documents shall reflect that the shareholders’ rights are substantially identical to the rights of the Investors in the Target Company under the Transition Agreement (including the rights of the Convertible Note Investor and rights of shareholders (if applicable)), and shall include the shareholders’ rights such as registration right and conversion right which are customary for overseas entities, and these two documents have been provided to the Investors; (c) with respect to Investor 1, a scanned copy of the register of members of Cayman Co as certified by the registered office provider of Cayman Co have been submitted to Investor 1, which shall show that one (1) director nominated by Investor 1 (or its designated affiliate) has been appointed as a director of Cayman Co, and Cayman Co has executed the director indemnification agreement to be signed by Cayman Co, Investor 1 (or its designated affiliate) and the director appointed by Investor 1 (or its designated affiliate), and such principal amount was outstandingdocuments have been provided to Investor 1; and (d) with respect to each Investor, the Investor has completed the ODI formalities in relation to its subscription for the corresponding First Tranche Overseas Shares in accordance with applicable laws, unless the Investor designates its affiliate to subscribe for the corresponding First Tranche Overseas Shares and such affiliate has completed all the required formalities in accordance with applicable laws (if any) in relation to its subscription for such First Tranche Overseas Shares. (C2) This Debenture In the event that (a) the Group Company has completed the Red Chip Restructuring, but the Offshore Automatic Conversion Conditions are not fully satisfied prior to the expiry of the Convertible Note Term due to the failure of Cayman Co or the Target Company to fulfill conditions set forth in points (a) to (c) of paragraph 1.7.1 (1) hereof (if applicable), and such Offshore Automatic Conversion Conditions have not been waived by the Investor in writing; or (b) the Group has not completed the Red Chip Restructuring prior to the expiry of the Convertible Note Term, then: (i) Investor 1 has the right (but is not obliged) to request to convert the outstanding principal of Investor 1 Note I into equity in the Target Company on the basis that the pre-money valuation of Investor 1 Conversion I represents the pre-money valuation of the Target Company (the “Investor 1 Onshore Conversion I”), (ii) Investor 2 shall have the right (but not be obliged) to request to convert the outstanding principal of Investor 2 Note into equity in the Target Company on basis that the pre-money valuation of the Target Company is RMB 1,000,000,000 (the “Investor 2 Onshore Conversion”, together with Investor 1 Onshore Conversion I, collectively the “First Tranche Onshore Conversion”), and the Target Company shall register such Investor as a shareholder with respect to the aforesaid equity interest in its register of members on the date of receipt of such notice, cause the relevant documents such as the shareholders’ agreement and articles of association of the Target Company to be amended to reflect the foregoing arrangements, and shall, within thirty (30) business days thereafter, complete the registration and filing formalities with its competent company registration authority in connection with the aforementioned onshore conversion and the appointment of a directors by Investor 1. (3) For the avoidance of doubt, if, prior to the occurrence of an Offshore Automatic Conversion, the conversion unit price of the Convertible Note to which the First Tranche Onshore Conversion is related is changed to the adjusted unit price of the investment contemplated hereunder pursuant to paragraph 5.8.3 of the Transition Agreement, the conversion unit price for the Offshore Automatic Conversion shall be convertible adjusted accordingly pursuant to Article 5.8 of the Transition Agreement so that the corresponding Investors are entitled to anti-dilution protection at Cayman Co level substantially identical to that at the Target Company level. 1.7.2 Investor 1 Note II conversion (1) Within fifteen (15) business days after all of the following conditions (the “Offshore Optional Conversion Conditions”) are satisfied or waived by Investor 1 in writing (applicable to the conditions precedent (a) to (b) below) and jointly waived by Investor 1 and the Target Company (applicable to the condition precedent (c) below) (or such later period as Investor 1 and the Target Company shall then otherwise agree) (the “Offshore Optional Conversion Time Limit”), Investor 1 has the right (but is not the obliged) to give a written notice to Cayman Co (the “Offshore Optional Conversion Notice”) requiring the conversion of the remaining notes (corresponding to the principal amount of the Convertible Note of twenty million Chinese yuan (RMB 20,000,000), the “Investor 1 Note II”) into a corresponding number of series B + preference shares of Common Stock Cayman Co at the option conversion unit price of the HolderOverseas Share II of Investor 1. Notwithstanding the foregoing, if, prior to the occurrence of the Offshore Optional Conversion, a new round of financing occurs to Cayman Co, in whole which the unit price per additional share is lower than the conversion unit price of the Overseas Share II of Investor 1 calculated on basis that the consolidated pre-money valuation (see the calculation formula below) is equal to RMB1 billion (except for the Red Chip Restructuring as agreed under the Restructuring Framework Agreement and the conversion following provision of note loan by the Offshore Co-investors to the Group Company under this Agreement and the Offshore Co-investor Note Agreement, the “New Financing of Cayman Co”), Investor 1 has the right to request converting Investor 1 Note II into the corresponding number of the preferred share class issued under the New Financing of Cayman Co whenever Investor 1 conducts the Offshore Optional Conversion at the conversion unit price of the Overseas Share II of Investor 1 defined in the point (b) of paragraph 1.7.2(2) in accordance with paragraph 1.7.2(2) (the aforesaid conversion shares referred to as “Overseas Share II of Investor 1”, and together with the First Tranche Overseas Shares, collectively or individually “Overseas Share”; and these conversions referred to as “Offshore Optional Conversion”, and together with Offshore Automatic Conversion, collectively or individually “Offshore Conversion”): (a) Offshore Automatic Conversion has occurred, and Investor 1 (or its designated affiliate) has been registered as the holder of the relevant First Tranche Overseas Shares in part at any time the register of members of Cayman Co; (b) The Group has submitted to the Investor the consolidated financial statements of the Group for the one (1) month immediately before the date of automatic conversion and the key operation data of the Group as set out in Exhibit V. If there is a material adjustment to the Principal Business of the Group, Investor 1 shall have the right to request the Group to update the key operation data set out in Exhibit V from time to time; and (c) Investor 1 has completed the ODI formalities in relation to its subscription for Overseas Shares II of Investor 1 in accordance with the applicable laws, after unless Investor 1 designates its affiliate recognized by the Original Issue Date Target Company to subscribe for Overseas Shares II of Investor 1 and such affiliate has completed all required formalities (subject to if any) for such subscription in accordance with applicable laws. (2) For the limitations on conversion set forth in Section 4(a)(ii) hereof). The Holder shall effect conversions by delivering to the Company a completed notice substantially in the form attached hereto as Exhibit A (a "Conversion Notice"). The Conversion Notice shall set forth the remaining principal amount purposes of this Debenture and all accrued and unpaid interest thereon subsequent to Agreement, the “Conversion Unit Price of Overseas Shares II of Investor 1” means: (a) the conversion at issue. The date on which unit price per Overseas Shares II of Investor 1 that is such calculated that the consolidated pre-money valuation under two investments made by Investor 1 constituting the Offshore Automatic Conversion and Offshore Optional Conversion (see calculation formula below); or (b) 90% of unit price per share under a Conversion Notice New Financing of Cayman Co if such new financing occurs prior to or concurrently with the Offshore Conversion, whichever is delivered is the "Conversion Datelower." Unless the Holder is converting the entire principal amount outstanding under this Debenture, the Holder is not be required to physically surrender this Debenture to the Company in order to effect conversions. Subject to Section 4(b), each Conversion Notice, once given, shall be irrevocable. Conversions hereunder shall have the effect of lowering the outstanding principal amount of this Debenture plus all accrued and unpaid interest thereon in an amount equal to the applicable conversion, which shall be evidenced by notations made in the Conversion Notice. The Holder and the Company shall maintain records showing the principal amount converted and the date of such conversions. In the event of any dispute or discrepancy, the records of the Holder shall be controlling and determinative in the absence of manifest error.

Conversion. (Aa) Conversion at Option of Holder. ---------------------------------- (i) This Debenture shall be convertible into shares of Common Stock at the option of the Holder, in whole or in part at any time and from time to time, after the Original Issue Date (as defined in Section 5) (subject to the limitations on conversion set forth in Section 4(a)(ii3(b) hereof). The number of shares of Common Stock issuable upon a conversion hereunder shall be determined by adding the sum of (i) equals the quotient obtained by dividing (x) the outstanding principal amount of this Debenture to be converted and by (y) the Conversion Price (as defined hereinin Section 3(c)(i), and ). The Obligor shall deliver Common Stock certificates to the Holder prior to the Fifth (ii5th) the amount equal to (I) the product of (x) the outstanding principal amount of this Debenture to be converted and (y) the product of (1) the quotient obtained by dividing .12 by 360 and (2) the number of days for which such principal amount was outstanding, divided by (II) the Conversion Price on the Trading Day after a Conversion Date, provided, that if the Company shall have timely elected to pay the interest due on a Conversion Date in cash pursuant to the terms hereof, subsection (ii) shall not be used in the calculation of the number of shares of Common Stock issuable upon a conversion hereunder. (Bii) Notwithstanding anything to the contrary contained herein, if on any Conversion Date: : (1) the number of shares of Common Stock at the time authorized, unissued and unreserved for all purposes, or held as treasury stock, is insufficient to pay principal and interest hereunder in shares of Common Stock; ; (2) the Underlying Shares issuable for such conversion (including any interest payable in shares) (x) are not registered for resale pursuant to an effective Underlying Shares Registration Statement and (y) may not be sold without volume restrictions pursuant to Rule 144(k) promulgated under the Securities Act (as defined in Section 6); (3) the Common Stock is not listed or quoted for trading on the OTC or on a Subsequent Market; ; (43) the Company Obligor has failed to timely satisfy its conversion obligations hereunderconversion; or or (54) the issuance of such shares of Common Stock would result in a violation of Sections 4(a)(iiSection 3(b), then, at the Company may not pay interest option of the Holder, the Obligor, in kind and must pay interest in cash by deliveringlieu of delivering shares of Common Stock pursuant to Section 3(a)(i), shall deliver, within three (3) Trading Days of each applicable Conversion Date, an amount in cash equal to the product of (a) the outstanding principal amount of the Debentures to be converted on plus any interest due therein divided by the Conversion Price, chosen by the Holder, and multiplied by the highest closing price of the stock from date of the conversion notice till the date that such cash payment is made. Further, if the Obligor shall not have delivered any cash due in respect of conversion of this Debenture or as payment of interest thereon by the fifth (5th) Trading Day after the Conversion Date and (b) Date, the product of (x) Holder may, by notice to the quotient obtained by dividing .12 by 360 and (y) Obligor, require the number of days for which such principal amount was outstanding. (C) This Debenture shall be convertible into Obligor to issue shares of Common Stock at pursuant to Section 3(c), except that for such purpose the option Conversion Price applicable thereto shall be the lesser of the Holder, in whole or in part at any time Conversion Price on the Conversion Date and from time to time, after the Original Issue Date (Conversion Price on the date of such Holder demand. Any such shares will be subject to the limitations on conversion set forth in Section 4(a)(iiprovisions of this Section. (iii) hereof). The Holder shall effect conversions by delivering to the Company Obligor a completed notice substantially in the form attached hereto as Exhibit A (a "Conversion Notice"). The Conversion Notice shall set forth the remaining principal amount of this Debenture and all accrued and unpaid interest thereon subsequent to the conversion at issue. The date on which a Conversion Notice is delivered is the "Conversion Date." Unless the Holder is converting the entire principal amount outstanding under this Debenture, the Holder is not be required to physically surrender this Debenture to the Company Obligor in order to effect conversions. Subject to Section 4(b), each Conversion Notice, once given, shall be irrevocable. Conversions hereunder shall have the effect of lowering the outstanding principal amount of this Debenture plus all accrued and unpaid interest thereon in an amount equal to the applicable conversion, which shall be evidenced by notations made in the Conversion Notice. The Holder and the Company Obligor shall maintain records showing the principal amount converted and the date of such conversions. In the event of any dispute or discrepancy, the records of the Holder shall be controlling and determinative in the absence of manifest error.

Conversion. (A) This Debenture A. Lender shall be convertible into shares have the right, subject to the terms and provisions of Common Stock this ARTICLE X, at the option of the HolderLender, (i) at any time, to convert, the unpaid principal amount of the Term Loans or any portion thereof, and any accrued and unpaid interest on such Term Loans, and (ii) at any time prior to the Termination Date, to simultaneously advance and convert all or any portion of the remaining Commitment, or after the Commitment Period, to simultaneously advance and convert an amount equal to the amount of the Commitment, if any, which was not advanced as a Term Loan during the Commitment Period (it being acknowledged that this does not extend the Commitment Period), into fully paid and non-assessable shares of Borrower Common Stock or any capital stock or other securities into which such Borrower Common Stock shall have been changed or any capital stock or other securities resulting from a reclassification thereof ("Shares"). Such conversion of Term Loans and simultaneous advance and conversion of the Commitment to Shares shall be made at an amount per Share which is equal to the then Current Conversion Price, as further described below. The Term Loans and Commitment shall continue to be convertible, in whole or in part at any time part, even though Borrower may have given notice of prepayment of the Term Loans or termination of the Commitment pursuant to Sections 2.01.D and from time 2.02.C, so long as Lender's notice of election to timeconvert has been delivered to Borrower within the Early Termination period. B. For convenience, after the Original Issue Date (subject conversion pursuant to this Article X of all or a portion of the limitations on conversion set forth in Section 4(a)(ii) hereof). The number of shares of Common Stock issuable upon a conversion hereunder shall be determined by adding the sum of (i) the quotient obtained by dividing (x) the outstanding principal amount of this Debenture to be converted and Term Loans (y) the Conversion Price (as defined herein), and (ii) the amount equal to (I) the product and/or of (x) the outstanding principal amount of this Debenture to be converted and (y) the product of (1) the quotient obtained by dividing .12 by 360 and (2) the number of days for which such principal amount was outstanding, divided by (II) the Conversion Price on the Conversion Date, provided, that if the Company shall have timely elected to pay the interest due on a Conversion Date in cash pursuant to the terms hereof, subsection (ii) shall not be used in the calculation of the number of shares of Common Stock issuable upon a conversion hereunder. (B) Notwithstanding anything to the contrary contained herein, if on any Conversion Date: (1) the number of shares of Common Stock at the time authorized, unissued and unreserved for all purposes, or held as treasury stock, is insufficient to pay interest hereunder in shares of Common Stock; (2) the Underlying Shares issuable for such conversion (including any interest payable in shares) (x) are not registered for resale pursuant to an effective Underlying Shares Registration Statement and (y) may not be sold without volume restrictions pursuant to Rule 144(k) promulgated under the Securities Act (as defined in Section 6); (3) the Common Stock is not listed or quoted for trading on the OTC or on a Subsequent Market; (4) the Company has failed to timely satisfy its conversion obligations hereunder; or (5) the issuance of such shares of Common Stock would result in a violation of Sections 4(a)(ii), then, the Company may not pay interest in kind and must pay interest in cash by delivering, within three Trading Days of each applicable Conversion Date, an amount in cash equal to the product of (a) the outstanding principal amount of the Debentures to be converted on such Conversion Date and (b) the product of (x) the quotient obtained by dividing .12 by 360 and (y) the number of days for which such principal amount was outstanding. (C) This Debenture shall be convertible into shares of Common Stock at the option of the Holder, in whole or in part at any time and from time to time, after the Original Issue Date (subject to the limitations on conversion set forth in Section 4(a)(ii) hereof). The Holder shall effect conversions by delivering to the Company a completed notice substantially in the form attached hereto as Exhibit A (a "Conversion Notice"). The Conversion Notice shall set forth the remaining principal amount of this Debenture and all accrued and unpaid interest thereon subsequent if elected by Lender) and/or Commitment into Shares is herein sometimes referred to the conversion at issue. The date on which a Conversion Notice is delivered is as the "Conversion Date.conversion" Unless the Holder is converting the entire principal amount outstanding under this Debenture, the Holder is not be required to physically surrender this Debenture to the Company in order to effect conversions. Subject to Section 4(b), each Conversion Notice, once given, shall be irrevocable. Conversions hereunder shall have the effect of lowering the outstanding principal amount of this Debenture plus all accrued and unpaid interest thereon in an amount equal to the applicable conversion, which shall be evidenced by notations made in the Conversion Notice. The Holder and the Company shall maintain records showing the principal amount converted and the date of such conversions. In the event of any dispute or discrepancy, the records of the Holder shall be controlling and determinative in the absence of manifest errorTerm Loans/Commitment.

Conversion. In accordance with and pursuant to such Certificate of Designations, the Holder hereby elects to convert the number of shares of the Corporation’s Series A Cumulative Convertible Preferred Stock (the “Series A”) This Debenture shall be convertible indicated below into shares of Common Stock at of the option Corporation (the “Common Shares”) as of the date specified below. Name of Holder: ___________________ Holder Conversion Date: ___________________ Number of Shares of Series A Held by ▇▇▇▇▇▇: _______________________ Amount Being Converted Hereby: _______________________ Series A Held After Conversion: _______________________ If the shares of Series A to be converted are held through a nominee, please provide details of the brokerage account: Broker: ___________________________________________ DTC No.: _____________________________________ Acct. Name: ______________________________________________ For Further Credit (if applicable): ___________________________________________ Delivery of Shares: Pursuant to this Notice of Conversion, the Corporation shall deliver the applicable number of Common Shares issuable in accordance with the terms of the Certificate of Designations as set forth below. If Common Shares are to be issued in the name of a person other than the Holder, the Holder will pay all transfer taxes payable with respect thereto and is delivering herewith such certificates and opinions as reasonably requested by the Corporation in whole or in part at any time and from time to time, after the Original Issue Date (subject accordance therewith. No fee will be charged to the limitations on conversion set forth in Section 4(a)(ii) hereof)Holder for any conversion, except for such transfer taxes, if any. The number Holder acknowledges and confirms that the Common Shares issued pursuant to this Notice of shares Conversion will, to the extent not previously registered by the Corporation under the U.S. Securities Act of 1933, as amended (the “Securities Act”) be “restricted securities” within the meaning of Rule 144 under the Securities Act, unless the Common Stock issuable upon Shares are covered by a conversion hereunder valid and effective registration statement under the Securities Act or this Notice of Conversion includes a valid opinion from an attorney stating that such Common Shares can be issued free of restrictive legend, which shall be determined by adding the sum of (i) Corporation in its sole discretion. If the quotient obtained by dividing (x) the outstanding principal amount of this Debenture Common Shares are to be converted and delivered through DWAC, please provide details of the brokerage account for delivery (y) Note: Common Shares that will be issued as “restricted securities” are not eligible for settlement through DWAC): Broker: ___________________________________________ DTC No.: _____________________________________ Acct. Name: ______________________________________________ For Further Credit (if applicable): ___________________________________________ The undersigned (collectively, the Conversion Price (as defined herein“Stockholders”), and being holders of Series A Cumulative Convertible Preferred Stock, par value $0.001 per share (iithe “Series A”) of ▇▇▇▇▇▇▇ Motion Inc., a Delaware corporation (the amount equal to (I) the product of (x) the outstanding principal amount of this Debenture to be converted and (y) the product of (1) the quotient obtained by dividing .12 by 360 and (2) the number of days for which such principal amount was outstanding, divided by (II) the Conversion Price on the Conversion Date, provided, that if the Company shall have timely elected to pay the interest due on a Conversion Date in cash pursuant to the terms hereof, subsection (ii) shall not be used in the calculation of the number of shares of Common Stock issuable upon a conversion hereunder. (B) Notwithstanding anything to the contrary contained herein, if on any Conversion Date: (1) the number of shares of Common Stock at the time authorized, unissued and unreserved for all purposes, or held as treasury stock, is insufficient to pay interest hereunder in shares of Common Stock; (2) the Underlying Shares issuable for such conversion (including any interest payable in shares) (x) are not registered for resale pursuant to an effective Underlying Shares Registration Statement and (y) may not be sold without volume restrictions pursuant to Rule 144(k) promulgated under the Securities Act (as defined in Section 6); (3) the Common Stock is not listed or quoted for trading on the OTC or on a Subsequent Market; (4) the Company has failed to timely satisfy its conversion obligations hereunder; or (5) the issuance of such shares of Common Stock would result in a violation of Sections 4(a)(ii), then, the Company may not pay interest in kind and must pay interest in cash by delivering, within three Trading Days of each applicable Conversion Date, an amount in cash equal to the product of (a) the outstanding principal amount of the Debentures to be converted on such Conversion Date and (b) the product of (x) the quotient obtained by dividing .12 by 360 and (y) the number of days for which such principal amount was outstanding. (C) This Debenture shall be convertible into shares of Common Stock at the option of the Holder, in whole or in part at any time and from time to time, after the Original Issue Date (subject to the limitations on conversion set forth in Section 4(a)(ii) hereof). The Holder shall effect conversions by delivering to the Company a completed notice substantially in the form attached hereto as Exhibit A (a "Conversion Notice"). The Conversion Notice shall set forth the remaining principal amount of this Debenture and all accrued and unpaid interest thereon subsequent to the conversion at issue. The date on which a Conversion Notice is delivered is the "Conversion Date." Unless the Holder is converting the entire principal amount outstanding under this Debenture, the Holder is not be required to physically surrender this Debenture to the Company in order to effect conversions. Subject to Section 4(b“Corporation”), each Conversion NoticeStockholder acting with respect to all shares of Series A owned by such Stockholder or over which such Stockholder otherwise possesses the authority to vote, once given, shall be irrevocable. Conversions hereunder shall have the effect of lowering the outstanding principal amount of this Debenture plus all accrued and unpaid interest thereon in an amount equal hereby consent to the applicable conversion, which shall be evidenced by notations made in the Conversion Notice. The Holder and the Company shall maintain records showing the principal amount converted and the date of such conversions. In the event of any dispute or discrepancy, the records adoption of the Holder shall be controlling and determinative in following resolutions by written consent pursuant to Section 228 of the absence General Corporation Law of manifest error.the State of Delaware:

Conversion. 3.1 The Lender has the right, at the Lender's option, at any time, to convert all but not less than all of the Loan (A"Conversion") This Debenture into shares in the Company having identical rights to the then most senior shares in the Company (if there shall be convertible into more than one class of shares of Common Stock at the option of the Holder, in whole or in part at any time and from time of Conversion) together with all rights provided by the Company to timepurchasers of such shares, after the Original Issue Date by contract or otherwise (subject to the limitations on conversion set forth in Section 4(a)(ii) hereof"Shares"). The number of shares of Common Stock issuable upon a conversion hereunder Shares into which the Loan may be converted shall be determined by adding dividing the sum of (i) the quotient obtained Loan by dividing (x) the outstanding principal amount of this Debenture to be converted and (y) the Conversion Price (as defined herein), and (ii) the amount a price equal to US$0.25 cents per share (I) the product of (x) "Conversion Price"). 3.2 In order to effect a Conversion the outstanding principal amount of this Debenture to be converted and (y) the product of (1) the quotient obtained by dividing .12 by 360 and (2) the number of days for which such principal amount was outstanding, divided by (II) the Conversion Price on the Conversion Date, provided, that if Lender shall provide the Company shall have timely elected to pay with written notice (the interest due on a Conversion Date in cash pursuant to the terms hereof, subsection (ii) shall not be used in the calculation of the number of shares of Common Stock issuable upon a conversion hereunder. (B) Notwithstanding anything to the contrary contained herein, if on any Conversion Date: (1) the number of shares of Common Stock at the time authorized, unissued and unreserved for all purposes, or held as treasury stock, is insufficient to pay interest hereunder in shares of Common Stock; (2) the Underlying Shares issuable for such conversion (including any interest payable in shares) (x) are not registered for resale pursuant to an effective Underlying Shares Registration Statement and (y) may not be sold without volume restrictions pursuant to Rule 144(k) promulgated under the Securities Act (as defined in Section 6); (3) the Common Stock is not listed or quoted for trading on the OTC or on a Subsequent Market; (4) the Company has failed to timely satisfy its conversion obligations hereunder; or (5) the issuance of such shares of Common Stock would result in a violation of Sections 4(a)(ii), then, the Company may not pay interest in kind and must pay interest in cash by delivering, within three Trading Days of each applicable Conversion Date, an amount in cash equal to the product of (a) the outstanding principal amount of the Debentures to be converted on such Conversion Date and (b) the product of (x) the quotient obtained by dividing .12 by 360 and (y) the number of days for which such principal amount was outstanding. (C) This Debenture shall be convertible into shares of Common Stock at the option of the Holder, in whole or in part at any time and from time to time, after the Original Issue Date (subject to the limitations on conversion set forth in Section 4(a)(ii) hereof). The Holder shall effect conversions by delivering to the Company a completed notice substantially in the form attached hereto as Exhibit A (a "Conversion Notice"). The Conversion Notice shall set forth ) of its election to convert the remaining principal amount of this Debenture and all accrued and unpaid interest thereon subsequent to the conversion at issue. The date on which a Conversion Notice is delivered is the "Conversion Date." Unless the Holder is converting the entire principal amount outstanding under this Debenture, the Holder is not be required to physically surrender this Debenture to the Company in order to effect conversions. Subject Loan pursuant to Section 4(b), each 3.1 above. As soon as practicable after receipt of the Conversion Notice, once giventhe Company shall report the issuance of shares to the Israeli Registrar of Companies, shall update its Shareholders Registry and shall issue a certificate in the name of the Lender for such class and number of shares to which the Lender shall be irrevocableentitled hereunder. Conversions hereunder No fractional shares shall have be issued. In lieu of the effect of lowering the outstanding principal amount of this Debenture plus all accrued and unpaid interest thereon in an amount equal Company issuing any fractional shares to the applicable conversionLender, which upon the Conversion hereunder, the Company shall pay to the Lender the balance of the Loan that is not so converted. Conversion shall be evidenced deemed to have been made immediately prior to the close of business on the date of receipt by notations made in the Company of the Conversion Notice, and Lender shall be treated for all purposes as the record holder or holders of such Shares as of such date. The Holder and election of the Company shall maintain records showing Lender to effect a Conversion immediately prior to the principal amount converted and closing of a Sale (as defined below), may be made conditional upon the date closing of such conversions. In the event of any dispute or discrepancySale. 3.3 Upon Conversion, the records Company's obligation of the Holder repayment hereunder shall automatically be controlling deemed null and determinative in the absence of manifest errorvoid concurrently with such Conversion.

Conversion. (A) This Debenture shall be convertible into shares of Common Stock at In the option of the Holder, in whole or in part at any time and from time event that this Note converts to time, after the Original Issue Date (subject to the limitations on conversion set forth in Section 4(a)(ii) hereof). The number of shares of Common Stock issuable upon a conversion hereunder shall be determined by adding the sum of (i) the quotient obtained by dividing (x) the outstanding principal amount of this Debenture to be converted and (y) the Conversion Price (as defined herein), and (ii) the amount equal to (I) the product of (x) the outstanding principal amount of this Debenture to be converted and (y) the product of (1) the quotient obtained by dividing .12 by 360 and (2) the number of days for which such principal amount was outstanding, divided by (II) the Conversion Price “Secured Convertible Demand Note” on the Conversion Date, providedthen commencing on the Maturity Date, the Borrower, upon demand by the Holder (the “Conversion Option”), shall be required to exchange and convert the Note into fully paid and non-assessable shares of the Borrower’s equity securities (the “Equity Securities”, it being understood that such Equity Securities may be in the form of membership interests if the Company remains a limited liability company at the time of conversion of this Note or stock, if the Company has converted to a corporation at the time of the conversion of this Note) as follows: (a) Concurrently with the closing of the next round of public or private financing secured by the Borrower that closes before June 30, 2009 (the “Financing Event”), the class of Equity Securities to be issued to Holder shall be of the same class offered as part of the Financing Event, and such Equity Securities shall be issued with accompanying rights and privileges materially similar to those offered as part of the Financing Event (the “Tag Along Conversion Stock”; for convenience, the use of this term assumes that the Company is a corporation at the time of conversion, it being understood that if the Company Equity Securities are converted into membership interests at the time of conversion, the term will refer to membership interests acquired in such conversion). Concurrently with a Financing Event, at the election of the Holder, as an alternative to its Demand Right set forth in Section 1.2(b), all amounts due under the Note shall have timely elected convert to pay the interest due on a Conversion Date in cash pursuant to the terms hereof, subsection (ii) shall not be used in the calculation of the number of shares of Common Tag Along Conversion Stock issuable upon a conversion hereunder. (B) Notwithstanding anything to as determined through whichever of the contrary contained herein, if on any Conversion Date: (1) following methods/formulas set forth below results in the highest number of shares of Common Tag Along Conversion Stock issued by the Borrower: A. total outstanding Principal ▇▇▇▇▇▇ and accrued interest due (and failed payment fee(s) if incurred) / ($31,600,000 / total outstanding capital stock of Borrower on an as-converted basis on date of conversion); or B. total outstanding Principal ▇▇▇▇▇▇ and accrued interest (and failed payment fee(s) if incurred) due X the price per share paid (ignoring the effect of any stock splits or other mechanisms adopted at the time authorized, unissued and unreserved for all purposes, of conversion to arrive at a per share value that do not change the economic substance or held as treasury stock, is insufficient to pay interest hereunder value of the converted Equity Securities) by the investor(s) participating in shares of Common Stock;the Financing Event. (2b) In the Underlying Shares issuable for such conversion event that no Financing Event occurs before June 30, 2009 and the Holder has not exercised its Conversion Option under Section 2.1(b)(ii), then on June 30, 2009 (including any interest payable in shares) (x) are not registered for resale pursuant to an effective Underlying Shares Registration Statement and (y) may not be sold without volume restrictions pursuant to Rule 144(k) promulgated under the Securities Act (as defined in Section 6“Final Conversion Date”); (3) the Common Stock is not listed or quoted for trading on the OTC or on a Subsequent Market; (4) the Company , provided Holder has failed to timely satisfy its conversion obligations hereunder; or given five (5) business days written notice of its desire to exercise the issuance of such shares of Common Stock would result in a violation of Sections 4(a)(ii), thenConversion Option, the Company may not pay interest in kind class of Equity Securities to be issued to Holder shall be common stock or membership interests, as applicable, and must pay interest in cash by delivering, within three Trading Days of each applicable Conversion Date, an the amount in cash equal to the product of (a) the outstanding principal amount be issued shall be determined though utilization of the Debentures to be converted on such Conversion Date and (b) the product of (x) the quotient obtained by dividing .12 by 360 and (y) the number of days for which such principal amount was outstanding. (C) This Debenture shall be convertible into shares of Common Stock at the option of the Holder, in whole or in part at any time and from time to time, after the Original Issue Date (subject to the limitations on conversion formula set forth in Section 4(a)(ii3.1(a)(A) hereof)above. The If Holder elects not to exercise its Conversion Option in accordance with Section 2.1(b)(ii) or Section 3.1, the Note shall effect conversions by delivering to become due and payable on the Company a completed notice substantially in Final Conversion Date. ▇▇▇▇▇▇▇▇ understands and agrees the form attached hereto as Exhibit A (a "Conversion Notice"). The Conversion Notice shall Option set forth the remaining principal amount of this Debenture herein is provided to Holder in addition to any other right or remedy set forth herein, including but not limited to its Demand Right, and all accrued and unpaid interest thereon subsequent to the conversion at issue. The date on which no time shall such Conversion Option be deemed a Conversion Notice is delivered is the "Conversion Date." Unless the Holder is converting the entire principal amount outstanding under this Debenture, the Holder is not be required to physically surrender this Debenture to the Company in order to effect conversions. Subject to Section 4(b), each Conversion Notice, once given, shall be irrevocable. Conversions hereunder shall have the effect of lowering the outstanding principal amount of this Debenture plus all accrued and unpaid interest thereon in an amount equal to the applicable conversion, which shall be evidenced by notations made in the Conversion Notice. The Holder and the Company shall maintain records showing the principal amount converted and the date of such conversions. In the event of any dispute or discrepancy, the records automatic obligation of the Holder shall be controlling and determinative in the absence of manifest errorHolder.

Conversion. A Holder of a Debenture may, subject to the terms and conditions of Article 5 of the Indenture, convert the principal amount of such Debenture (Aor any portion thereof equal to $1,000 or any integral multiple of $1,000 in excess thereof) This Debenture shall be convertible into shares of Common Stock at any time prior to the option close of business on the Business Day immediately preceding November 15, 2023 under the circumstances described in Article 5 of the HolderIndenture. On conversion of a Debenture, that portion of accrued and unpaid interest, including Contingent Interest, if any, on the converted Debenture attributable to the period from the most recent Interest Payment Date (or, if no Interest Payment Date has occurred, from November 10, 2003) through the date of conversion, and Tax Original Issue Discount accrued through the date of conversion with respect to the converted Debenture shall not be cancelled, extinguished or forfeited, but rather shall be deemed to be paid in full to the Holder thereof through delivery of the Common Stock (together with the Cash payment, if any, in whole or in part at any time and from time to time, after the Original Issue Date (subject to the limitations on conversion set forth in Section 4(a)(ii) hereof). The number lieu of shares of Common Stock issuable upon a conversion hereunder shall be determined by adding the sum of (i) the quotient obtained by dividing (x) the outstanding principal amount of this Debenture to be converted and (y) the Conversion Price (as defined hereinfractional shares), and (ii) in exchange for the amount equal to (I) the product of (x) the outstanding principal amount of this Debenture to be being converted and (y) the product of (1) the quotient obtained by dividing .12 by 360 and (2) the number of days for which such principal amount was outstanding, divided by (II) the Conversion Price on the Conversion Date, provided, that if the Company shall have timely elected to pay the interest due on a Conversion Date in cash pursuant to the terms provisions hereof, subsection (ii) shall not be used in and the calculation of the number of shares of Common Stock issuable upon a conversion hereunder. (B) Notwithstanding anything to the contrary contained herein, if on any Conversion Date: (1) the number of shares of Common Stock at the time authorized, unissued and unreserved for all purposes, or held as treasury stock, is insufficient to pay interest hereunder in shares of Common Stock; (2) the Underlying Shares issuable for such conversion (including any interest payable in shares) (x) are not registered for resale pursuant to an effective Underlying Shares Registration Statement and (y) may not be sold without volume restrictions pursuant to Rule 144(k) promulgated under the Securities Act (as defined in Section 6); (3) the Common Stock is not listed or quoted for trading on the OTC or on a Subsequent Market; (4) the Company has failed to timely satisfy its conversion obligations hereunder; or (5) the issuance fair market value of such shares of Common Stock would result (together with any such Cash payment in a violation lieu of Sections 4(a)(iifractional shares) shall be treated as issued, to the extent thereof, first in exchange for accrued and unpaid interest (including Contingent Interest, if any), thenand Tax Original Issue Discount accrued through the date of conversion and the balance, if any, of such fair market value of such Common Stock (and any such Cash payment) shall be treated as issued in exchange for the Company may not pay interest in kind and must pay interest in cash by delivering, within three Trading Days of each applicable Conversion Date, an amount in cash equal to the product of (a) the outstanding principal amount of the Debentures Debenture being converted pursuant to be converted on such Conversion Date the provisions hereof. The Company agrees, and (b) the product each Holder and any beneficial owner of (x) the quotient obtained a Debenture by dividing .12 by 360 and (y) the number of days for which such principal amount was outstanding. (C) This Debenture its purchase or acceptance thereof shall be convertible into shares deemed to agree, to treat, for United States federal income tax purposes, the fair market value of the Common Stock at the option of the Holder, in whole or in part at any time and from time to time, after the Original Issue Date (subject to the limitations on conversion set forth in Section 4(a)(ii) hereof). The Holder shall effect conversions by delivering to the Company a completed notice substantially in the form attached hereto as Exhibit A (a "Conversion Notice"). The Conversion Notice shall set forth the remaining principal amount of this Debenture and all accrued and unpaid interest thereon subsequent to received upon the conversion at issue. The date of a Debenture (together with any Cash payment in lieu of fractional shares) as a contingent payment on which a Conversion Notice is delivered is the "Conversion Date." Unless the Holder is converting the entire principal amount outstanding under this Debenture, the Holder is not be required to physically surrender this Debenture to the Company in order to effect conversions. Subject to for purposes of Treasury Regulation Section 1.1275-4(b), each Conversion Notice, once given, shall be irrevocable. Conversions hereunder shall have the effect of lowering the outstanding principal amount of this Debenture plus all accrued and unpaid interest thereon in an amount equal to the applicable conversion, which shall be evidenced by notations made in the Conversion Notice. The Holder and the Company shall maintain records showing the principal amount converted and the date of such conversions. In the event of any dispute or discrepancy, the records of the Holder shall be controlling and determinative in the absence of manifest error.

Conversion. (A1) This Debenture Provided that there are no unresolved claims for losses incurred by Parent pursuant to the indemnification provisions of Section 8 of the Purchase Agreement, the holder of this Instrument is entitled at any time after August 30, 2003 and from time to time before the close of business on the Maturity Date, to convert the principal amount of this Instrument (or any portion of the principal amount hereof that is an integral multiple of $1,000), into fully paid and nonassessable Common Stock (calculated as to each conversion to the nearest 1/100 of a share) of the Parent at the rate of 62.50 shares of Common Stock for each $1,000 principal amount of Instrument (or at the then current adjusted rate if an adjustment has been made as provided below) (the "Conversion Rate") by surrender of this Instrument, duly endorsed or assigned to the Company or in blank to the Company at the Designated Office, accompanied by written notice to the Company, in the form attached hereto, that the holder hereof elects to convert this Instrument (or if less than the entire principal amount hereof is to be converted, specifying the portion hereof to be converted). If the holder elects to exercise its conversion right hereunder, then the Company shall, within five (5) Business Days after receipt of written notice of such election, deliver or cause to be delivered to the holder at the address specified by the holder to the Company in the conversion notice a certificate or certificates for the Common Stock issued upon such conversion and any replacement Instrument issued as a result of any partial conversion of this Instrument. (2) Upon surrender of this Instrument for conversion, the holder will be entitled to payment in cash within three (3) Business Days thereafter of the interest accrued on the principal amount of this Instrument then being converted and unpaid to such date of conversion (a "Company Conversion Date"). (3) Subject to Section 2(b) below, no payment or adjustment is to be made on conversion for dividends on the Common Stock issued on conversion hereof. No fractions of shares or scrip representing fractions of shares will be issued on conversion, but instead of any fractional interest, the Company shall be convertible pay a cash adjustment, computed on the basis of the Closing Price of the Common Stock on the Trading Day immediately prior to the Company Conversion Date, or, at its option, the Company shall round up to the next higher whole share. (4) In the event that the conversion of this Instrument into shares of Common Stock at would require the option Parent and the holder of this Instrument to file notification and report forms with the Federal Trade Commission (the "FTC") and Antitrust Division of the Holder, in whole or in part at any time and from time to time, after Department of Justice (the Original Issue Date (subject "DOJ") pursuant to the limitations on conversion set forth in Section 4(a)(ii) hereofHart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "▇▇▇ ▇▇▇"). The number of shares of Common Stock issuable upon a conversion hereunder shall be determined by adding the sum of , ▇▇▇▇ (i) the quotient obtained by dividing (x) the outstanding principal amount holder of this Debenture Instrument shall, and the Company shall cause the Parent to be converted use best efforts to complete all applicable filings and (y) provide all necessary information as required pursuant to the Conversion Price (as defined herein)HSR Act, and (ii) the amount equal to (I) the product of (x) the outstanding principal amount holder of this Debenture Instrument and the Company agree that such conversion of this Instrument into shares of Common Stock shall not occur until such time as the required filings are made pursuant to the HSR Act and the required waiting period(s) have expired or early termination of the required waiting period(s) has been granted by the FTC or the DOJ. The Parent and the holder will each bear their own respective filing fees for any filings made pursuant to the HSR Act, and the Company shall cause the Parent to pay any such fees to be converted borne by it. The Company shall, if the holder so elects, and within the time period prescribed in Section 2(a)(1) hereof, deliver or cause to be delivered the Common Stock issuable upon conversion of this Instrument to any third party or parties designated by the holder, subject to compliance with Sections 2(f), 8(d) and 8(f) hereof. (yb) the product of The Conversion Rate will be subject to adjustments from time to time as follows: (1) In case the quotient obtained Parent shall pay or make a dividend or other distribution on Common Stock of the Parent payable in Common Stock, the Conversion Rate in effect at the opening of business on the day following the Determination Date (as hereinafter defined) for such dividend or other distribution shall be increased by dividing .12 such Conversion Rate by 360 and (2) a fraction of which the number of days for which such principal amount was outstanding, divided by (II) the Conversion Price on the Conversion Date, provided, that if the Company numerator shall have timely elected to pay the interest due on a Conversion Date in cash pursuant to the terms hereof, subsection (ii) shall not be used in the calculation of the number of shares of Common Stock outstanding at the close of business on such Determination Date and the denominator shall be the sum of such number of shares of Common Stock and the total number of shares of Common Stock constituting such dividend or other distribution, such increase to become effective immediately after the opening of business on the day following such Determination Date. For the purposes of this paragraph (1), the number of shares of Common Stock at any time outstanding shall not include Common Stock held in the treasury of the Parent but shall include Common Stock issuable upon a conversion hereunderin respect of scrip certificates issued in lieu of fractions of Common Stock. The Parent will not pay any dividend or make any distribution on Common Stock held in the treasury of the Parent. (B2) Notwithstanding anything In case the Parent shall issue rights, options or warrants to all holders of its Common Stock entitling them to subscribe for or purchase Common Stock at a price per share less than the current market price per share (determined as provided in paragraph (7) of this Section 2(b)) of the Common Stock on the Determination Date for such distribution, the Conversion Rate in effect at the opening of business on the day following such Determination Date shall be increased by dividing such Conversion Rate by a fraction of which the numerator shall be the number of shares of Common Stock outstanding at the close of business on such Determination Date plus the number of shares of Common Stock which the aggregate of the offering price of the total number of shares of Common Stock so offered for subscription or purchase would purchase at such current market price and the denominator shall be the number of shares of Common Stock outstanding at the close of business on such Determination Date plus the number of shares of Common Stock so offered for subscription or purchase, such increase to become effective immediately after the opening of business on the day following such Determination Date. For the purposes of this paragraph (2), the number of shares of Common Stock at any time outstanding shall not include Common Stock held in the treasury of the Parent but shall include Common Stock issuable in respect of scrip certificates issued in lieu of fractions of Common Stock. The Parent will not issue any rights, options or warrants in respect of Common Stock held in the treasury of the Parent. Upon the expiration of any right, option or warrant to purchase Common Stock the issuance of which resulted in an adjustment to the contrary contained hereinConversion Rate pursuant to this paragraph (2) of Section 2(b), if any such right, option or warrant shall expire and shall not have been exercised, the Conversion Rate shall immediately upon such expiration be recomputed to the Conversion Rate which would have been in effect had the adjustment of the Conversion Rate made upon the issuance of such right, option or warrant been made on any Conversion Date:the basis of offering for subscription or purchase only that number of shares of Common Stock actually purchased upon the exercise of such right, option and warrant actually exercised. (3) In case outstanding Common Stock shall be subdivided into a greater number of shares of Common Stock, the Conversion Rate in effect at the opening of business on the day following the day upon which such subdivision becomes effective shall be proportionately increased, and, conversely, in case outstanding Common Stock shall each be combined into a smaller number of shares of Common Stock, the Conversion Rate in effect at the opening of business on the day following the day upon which such combination becomes effective shall be proportionately reduced, such increase or reduction, as the case may be, to become effective immediately after the opening of business on the day following the day upon which such subdivision or combination becomes effective. (4) In case the Parent shall, by dividend or otherwise, distribute to all holders of its Common Stock evidences of its indebtedness, shares of any class of capital stock, or other property (including securities, but excluding (i) any rights, options or warrants referred to in paragraph (2) of this Section 2(b), (ii) any dividend or distribution paid exclusively in cash, (iii) any dividend or distribution referred to in paragraph (1) of this Section 2(b) and (iv) any merger or consolidation to which Section 2(h) applies (the "Distributed Property"), the Conversion Rate shall be adjusted so that the same shall equal the rate determined by dividing the Conversion Rate in effect immediately prior to the close of business on the Determination Date for such distribution by a fraction of which the numerator shall be the current market price per share (determined as provided in paragraph (7) of this Section 2(b)) of the Common Stock on such Determination Date less the then fair market value (as determined in good faith by the Board of Directors of the Parent in accordance with the provisions of this paragraph 4 of Section 2(b)) of the portion of the assets, shares or evidences of indebtedness so distributed applicable to one share of Common Stock and the denominator shall be such current market price per share of the Common Stock, such adjustment to become effective immediately prior to the opening of business on the day following such Determination Date; provided, however, that if the Distributed Property consists of shares of capital stock of a Subsidiary, the Parent may, at its option and in lieu of the foregoing adjustment to the Conversion Rate, elect to make adequate provision so that the holder of this Instrument shall have the right to receive upon conversion the amount of such shares of capital stock that such holder of this Instrument would have received if such holder of this Instrument had converted such Instrument on the record date. If the Board of Directors determines the fair market value of any distribution for purposes of this paragraph (4) by reference to the actual or when issued trading market for any securities constituting such distribution, it must in doing so consider the prices in such market over the same period used in computing the current market price per share pursuant to paragraph (7) of this Section 2(b). In the event the Parent implements a stockholder's rights plan (a "Rights Plan"), upon conversion of this Instrument into Common Stock, to the extent that the Rights Plan is still in effect upon such conversion, the holder of this Instrument will receive, in addition to the Common Stock, the rights described therein (whether or not the rights have separated from the Common Stock at the time of conversion), subject to the limitations set forth in the Rights Plan. Any distribution of rights or warrants pursuant to the Rights Plan in compliance with the requirements set forth in the immediately preceding sentence of this paragraph shall not constitute a distribution of rights or warrants pursuant to this Section 2(b). Rights or warrants distributed by the Parent to all holders of Common Stock entitling the holders thereof to subscribe for or purchase shares of the Parent's capital stock (either initially or under certain circumstances), which rights or warrants, until the occurrence of a specified event or events ("Trigger Event"): (i) are deemed to be transferred with such shares of Common Stock; (ii) are not exercisable; and (iii) are also issued in respect of future issuances of Common Stock, shall be deemed not to have been distributed for purposes of this Section 2(b) (and no adjustment to the Conversion Rate under this Section 2(b) will be required) until the occurrence of the earliest Trigger Event, whereupon such rights and warrants shall be deemed to have been distributed and an appropriate adjustment (if any is required) to the Conversion Rate shall be made under this Section 2(b). If any such right or warrant, including any such existing rights or warrants distributed prior to the original issue date of this Instrument, are subject to events, upon the occurrence of which such rights or warrants become exercisable to purchase different securities, evidences of indebtedness or other assets, then the date of the occurrence of any and each such event shall be deemed to be the date of distribution and record date with respect to new rights or warrants with such rights (and a termination or expiration of the existing rights or warrants without exercise by any of the holders thereof). In addition, in the event of any distribution (or deemed distribution) of rights or warrants, or any Trigger Event or other event (of the type described in the preceding sentence) with respect thereto that was counted for purposes of calculating a distribution amount for which an adjustment to the Conversion Rate under this section was made, (x) in the case of any such rights or warrants which shall all have been redeemed or repurchased without exercise by any holders thereof, the Conversion Rate shall be readjusted upon such final redemption or repurchase to give effect to such distribution or Trigger Event, as the case may be, as though it were a cash distribution, equal to the per share redemption or repurchase price received by a holder or holders of Common Stock with respect to such rights or warrants (assuming such holder had retained such rights or warrants), made to all holders of Common Stock as of the date of such redemption or repurchase, and (y) in the case of such rights or warrants which shall have expired or been terminated without exercise by any holders thereof, the Conversion Rate shall be readjusted as if such rights and warrants had not been issued. (5) In case the Parent shall, by dividend or otherwise, distribute to all holders of its Common Stock cash (excluding any cash that is distributed as part of a distribution referred to in paragraph (4) of Section 2(b)) in an aggregate amount that, combined with (I) the aggregate amount of any other cash distributions to all holders of its Common Stock made exclusively in cash within the twelve (12) months preceding the date of payment of such distribution and in respect of which no adjustment pursuant to this paragraph (5) of Section 2(b) has been made and (II) the aggregate of any cash plus the fair market value (as determined by the Parent's Board of Directors, whose determination shall be conclusive and described in a board resolution) of consideration payable in respect of any tender offer by the Parent or any of its subsidiaries for all or any portion of the Common Stock concluded within the twelve (12) months preceding the date of payment of such distribution and in respect of which no adjustment pursuant to paragraph (6) of Section 2(b) has been made (the "combined cash and tender amount"), exceeds ten percent (10%) of the product of the current market price per share of the Common Stock (determined as provided in paragraph (7) of this Section 2(b)) on the date for the determination of holders of shares of Common Stock entitled to receive such distribution times the number of shares of Common Stock outstanding on such date (the "aggregate current market price"), then, and in each such case, immediately after the close of business on such date for determination, the Conversion Rate shall be adjusted so that the same shall equal the rate determined by dividing the Conversion Rate in effect immediately prior to the close of business on the date fixed for determination of the stockholders entitled to receive such distribution by a fraction (i) the numerator of which shall be equal to the current market price per share of the Common Stock on the date fixed for such determination less an amount equal to the quotient of (x) the excess of such combined cash and tender amount over ten percent (10%) of such aggregate current market price divided by (y) the number of shares of Common Stock at the time authorized, unissued outstanding on such date for determination and unreserved for all purposes, or held as treasury stock, is insufficient to pay interest hereunder in shares of Common Stock; (2ii) the Underlying Shares issuable for such conversion (including any interest payable in shares) (x) are not registered for resale pursuant to an effective Underlying Shares Registration Statement and (y) may not be sold without volume restrictions pursuant to Rule 144(k) promulgated under the Securities Act (as defined in Section 6); (3) the Common Stock is not listed or quoted for trading on the OTC or on a Subsequent Market; (4) the Company has failed to timely satisfy its conversion obligations hereunder; or (5) the issuance of such shares of Common Stock would result in a violation of Sections 4(a)(ii), then, the Company may not pay interest in kind and must pay interest in cash by delivering, within three Trading Days of each applicable Conversion Date, an amount in cash equal to the product of (a) the outstanding principal amount of the Debentures to be converted on such Conversion Date and (b) the product of (x) the quotient obtained by dividing .12 by 360 and (y) the number of days for which such principal amount was outstanding. (C) This Debenture shall be convertible into shares of Common Stock at the option of the Holder, in whole or in part at any time and from time to time, after the Original Issue Date (subject to the limitations on conversion set forth in Section 4(a)(ii) hereof). The Holder shall effect conversions by delivering to the Company a completed notice substantially in the form attached hereto as Exhibit A (a "Conversion Notice"). The Conversion Notice shall set forth the remaining principal amount of this Debenture and all accrued and unpaid interest thereon subsequent to the conversion at issue. The date on which a Conversion Notice is delivered is the "Conversion Date." Unless the Holder is converting the entire principal amount outstanding under this Debenture, the Holder is not be required to physically surrender this Debenture to the Company in order to effect conversions. Subject to Section 4(b), each Conversion Notice, once given, shall be irrevocable. Conversions hereunder shall have the effect of lowering the outstanding principal amount of this Debenture plus all accrued and unpaid interest thereon in an amount equal to the applicable conversion, which shall be evidenced by notations made in the Conversion Notice. The Holder and the Company shall maintain records showing the principal amount converted and the date of such conversions. In the event of any dispute or discrepancy, the records of the Holder shall be controlling and determinative in the absence of manifest error.denominator

Conversion. (a) (i) Conversion at Option of Holder. (A) This Debenture shall be convertible into shares of Common Stock at the option of the Holder, in whole or in part at any time and from time to time, after the Original Issue Date (as defined in Section 4) (subject to the limitations on conversion set forth in Section 4(a)(ii3(a)(ii) hereof). The number of shares of Common Stock issuable upon a conversion hereunder shall be determined by adding the sum of (i) equals the quotient obtained by dividing (x) the outstanding principal amount of this Debenture to be converted and by (y) the Conversion Price (as defined hereinin Section 3(c)(i), and ). The Obligor shall deliver Common Stock certificates to the Holder prior to the Fifth (ii5th) the amount equal to (I) the product of (x) the outstanding principal amount of this Debenture to be converted and (y) the product of (1) the quotient obtained by dividing .12 by 360 and (2) the number of days for which such principal amount was outstanding, divided by (II) the Conversion Price on the Trading Day after a Conversion Date, provided, that if the Company shall have timely elected to pay the interest due on a Conversion Date in cash pursuant to the terms hereof, subsection (ii) shall not be used in the calculation of the number of shares of Common Stock issuable upon a conversion hereunder. (B) Notwithstanding anything to the contrary contained herein, if on any Conversion Date: : (1) the number of shares of Common Stock at the time authorized, unissued and unreserved for all purposes, or held as treasury stock, is insufficient to pay principal and interest hereunder in shares of Common Stock; ; (2) the Underlying Shares issuable for such conversion (including any interest payable in shares) (x) are not registered for resale pursuant to an effective Underlying Shares Registration Statement and (y) may not be sold without volume restrictions pursuant to Rule 144(k) promulgated under the Securities Act (as defined in Section 6); (3) the Common Stock is not listed or quoted for trading on the OTC or on a Subsequent Market; ; (43) the Company Obligor has failed to timely satisfy its conversion obligations hereunderconversion; or or (54) the issuance of such shares of Common Stock would result in a violation of Sections 4(a)(iiSection 3(a)(ii), then, at the Company may not pay interest option of the Holder, the Obligor, in kind and must pay interest in cash by deliveringlieu of delivering shares of Common Stock pursuant to Section 3(a)(i)(A), shall deliver, within three (3) Trading Days of each applicable Conversion Date, an amount in cash equal to the product of (a) the outstanding principal amount of the Debentures to be converted plus any interest due therein divided by the Conversion Price and multiplied by the highest closing price of the stock from date of the conversion notice till the date that such cash payment is made. Further, if the Obligor shall not have delivered any cash due in respect of conversion of this Debenture or as payment of interest thereon by the fifth (5th) Trading Day after the Conversion Date, the Holder may, by notice to the Obligor, require the Obligor to issue shares of Common Stock pursuant to Section 3(c), except that for such purpose the Conversion Price applicable thereto shall be the lesser of the Conversion Price on such the Conversion Date and (b) the product Conversion Price on the date of (x) such Holder demand. Any such shares will be subject to the quotient obtained by dividing .12 by 360 and (y) the number provisions of days for which such principal amount was outstandingthis Section. (C) This Debenture shall be convertible into shares of Common Stock at the option of the Holder, in whole or in part at any time and from time to time, after the Original Issue Date (subject to the limitations on conversion set forth in Section 4(a)(ii) hereof). The Holder shall effect conversions by delivering to the Company Obligor a completed notice substantially in the form attached hereto as Exhibit A (a "Conversion Notice"). The Conversion Notice shall set forth the remaining principal amount of this Debenture and all accrued and unpaid interest thereon subsequent to the conversion at issue. The date on which a Conversion Notice is delivered is the "Conversion Date." Unless the Holder is converting the entire principal amount outstanding under this Debenture, the Holder is not be required to physically surrender this Debenture to the Company Obligor in order to effect conversions. Subject to Section 4(b), each Conversion Notice, once given, shall be irrevocable. Conversions hereunder shall have the effect of lowering the outstanding principal amount of this Debenture plus all accrued and unpaid interest thereon in an amount equal to the applicable conversion, which shall be evidenced by notations made in the Conversion Notice. The Holder and the Company Obligor shall maintain records showing the principal amount converted and the date of such conversions. In the event of any dispute or discrepancy, the records of the Holder shall be controlling and determinative in the absence of manifest error.

Conversion. (i) Conversion at Option of Holder. (A) This Debenture shall be convertible into shares of Common Stock at the option of the Holder, in whole or in part at any time and from time to time, after the Original Issue Date (as defined in Section 4) (subject to the limitations on conversion set forth in Section 4(a)(ii3(a)(ii) hereof). The number of shares of Common Stock issuable upon a conversion hereunder shall be determined by adding the sum of (i) equals the quotient obtained by dividing (x) the outstanding principal amount of this Debenture to be converted and by (y) the Conversion Price (as defined hereinin Section 3(c)(i), and ). The Obligor shall deliver Common Stock certificates to the Holder prior to the Fifth (ii5th) the amount equal to (I) the product of (x) the outstanding principal amount of this Debenture to be converted and (y) the product of (1) the quotient obtained by dividing .12 by 360 and (2) the number of days for which such principal amount was outstanding, divided by (II) the Conversion Price on the Trading Day after a Conversion Date, provided, that if the Company shall have timely elected to pay the interest due on a Conversion Date in cash pursuant to the terms hereof, subsection (ii) shall not be used in the calculation of the number of shares of Common Stock issuable upon a conversion hereunder. (B) Notwithstanding anything to the contrary contained herein, if on any Conversion Date: : (1) the number of shares of Common Stock at the time authorized, unissued and unreserved for all purposes, or held as treasury stock, is insufficient to pay principal and interest hereunder in shares of Common Stock; ; (2) the Underlying Shares issuable for such conversion (including any interest payable in shares) (x) are not registered for resale pursuant to an effective Underlying Shares Registration Statement and (y) may not be sold without volume restrictions pursuant to Rule 144(k) promulgated under the Securities Act (as defined in Section 6); (3) the Common Stock is not listed or quoted for trading on the OTC or on a Subsequent Market; ; (43) the Company Obligor has failed to timely satisfy its conversion obligations hereunderconversion; or or (54) the issuance of such shares of Common Stock would result in a violation of Sections 4(a)(iiSection 3(a)(ii), then, at the Company may not pay interest option of the Holder, the Obligor, in kind and must pay interest in cash by deliveringlieu of delivering shares of Common Stock pursuant to Section 3(a)(i)(A), shall deliver, within three (3) Trading Days of each applicable Conversion Date, an amount in cash equal to the product of (a) the outstanding principal amount of the Debentures to be converted plus any interest due therein divided by the Conversion Price and multiplied by the highest closing price of the stock from date of the conversion notice till the date that such cash payment is made. Further, if the Obligor shall not have delivered any cash due in respect of conversion of this Debenture or as payment of interest thereon by the fifth (5th) Trading Day after the Conversion Date, the Holder may, by notice to the Obligor, require the Obligor to issue shares of Common Stock pursuant to Section 3(c), except that for such purpose the Conversion Price applicable thereto shall be the lesser of the Conversion Price on such the Conversion Date and (b) the product Conversion Price on the date of (x) such Holder demand. Any such shares will be subject to the quotient obtained by dividing .12 by 360 and (y) the number provisions of days for which such principal amount was outstandingthis Section. (C) This Debenture shall be convertible into shares of Common Stock at the option of the Holder, in whole or in part at any time and from time to time, after the Original Issue Date (subject to the limitations on conversion set forth in Section 4(a)(ii) hereof). The Holder shall effect conversions by delivering to the Company Obligor a completed notice substantially in the form attached hereto as Exhibit A (a "Conversion Notice"). The Conversion Notice shall set forth the remaining principal amount of this Debenture and all accrued and unpaid interest thereon subsequent to the conversion at issue. The date on which a Conversion Notice is delivered is the "Conversion Date." Unless the Holder is converting the entire principal amount outstanding under this Debenture, the Holder is not be required to physically surrender this Debenture to the Company Obligor in order to effect conversions. Subject to Section 4(b), each Conversion Notice, once given, shall be irrevocable. Conversions hereunder shall have the effect of lowering the outstanding principal amount of this Debenture plus all accrued and unpaid interest thereon in an amount equal to the applicable conversion, which shall be evidenced by notations made in the Conversion Notice. The Holder and the Company Obligor shall maintain records showing the principal amount converted and the date of such conversions. In the event of any dispute or discrepancy, the records of the Holder shall be controlling and determinative in the absence of manifest error.

Conversion. (Aa) This Debenture Subject to Section D(4)(b) of this Article 3, each share of Non-Voting Common Stock shall be convertible converted into one share of Common Stock (i) automatically, upon the permitted Transfer (as hereinafter defined) of such share of Non-Voting Common Stock, or (ii) at the election of the holder of such share of Non-Voting Common Stock. Each conversion of shares of Non-Voting Common Stock into shares of Common Stock at shall be effected by the option surrender of the Holdercertificate(s) evidencing book entry on the books and records of the Corporation’s transfer agent. (b) Notwithstanding Section D(4)(a) of this Article 3, no share of Non-Voting Common Stock shall be converted into Common Stock if, as a result of such conversion, the holder of such share of Common Stock would (or would be deemed to), directly or indirectly, own, control or have power to vote more than 9.9% of any class of the Corporation’s voting securities. If the Board of Directors of the Corporation determines in whole or in part at any time good faith, which determination shall be final and from time to time, after the Original Issue Date binding: (subject i) prior to the limitations on conversion set forth in Section 4(a)(ii) hereof). The number issuance of shares of Common Stock issuable upon a on conversion hereunder shall be determined by adding the sum of (i) the quotient obtained by dividing (x) the outstanding principal amount of this Debenture to be converted and (y) the Conversion Price (as defined herein), and (ii) the amount equal to (I) the product of (x) the outstanding principal amount of this Debenture to be converted and (y) the product of (1) the quotient obtained by dividing .12 by 360 and (2) the number of days for which such principal amount was outstanding, divided by (II) the Conversion Price on the Conversion Date, provided, that if the Company shall have timely elected to pay the interest due on a Conversion Date in cash pursuant to the terms hereof, subsection (ii) shall not be used in the calculation of the number of shares of Non-Voting Common Stock issuable upon a conversion hereunder. (B) Notwithstanding anything to the contrary contained herein, if on any Conversion Date: (1) the number of shares of Common Stock at the time authorized, unissued and unreserved for all purposes, or held as treasury stock, is insufficient to pay interest hereunder in shares of Common Stock; (2) the Underlying Shares issuable for such conversion (including any interest payable in shares) (x) are not registered for resale pursuant to an effective Underlying Shares Registration Statement and (y) may not be sold without volume restrictions pursuant to Rule 144(k) promulgated under the Securities Act (as defined in Section 6); (3) the Common Stock is not listed or quoted for trading on the OTC or on a Subsequent Market; (4) the Company has failed to timely satisfy its conversion obligations hereunder; or (5) that the issuance of such shares of Common Stock would result in a violation of Sections 4(a)(ii), thenthe ownership limitation contained in this Section (D)(4)(b) of this Article 3, the Company may not pay interest in kind and must pay interest in cash by delivering, within three Trading Days Board of each applicable Conversion Date, an amount in cash equal Directors shall be entitled to the product of (a) the outstanding principal amount of the Debentures refuse to be converted issue on such Conversion Date and (b) conversion the product of (x) the quotient obtained by dividing .12 by 360 and (y) the number of days for which such principal amount was outstanding. (C) This Debenture shall be convertible into shares of Common Stock at that would cause the option violation of such ownership limitation; and (ii) after the issuance of shares of Common Stock on conversion of Non-Voting Common Stock that the issuance of such shares of Common Stock has resulted in a violation of the Holderownership limitation contained in this Section (D)(4)(b) of this Article 3, in whole or in part at any time and from time to time, after the Original Issue Date (subject Board of Director of the Corporation shall rescind such conversion to the limitations extent it caused such violation, cancel the shares of Common Stock issued on conversion set forth that caused such violation and re-issue in respect of such canceled shares of Common Stock the shares of Non-Voting Common Stock that were canceled on conversion. (c) At least 15 calendar days before the record date for the annual meeting of holders of Common Stock, the Corporation shall provide to holders of Non-Voting Common Stock the total number of shares of the Corporation’s voting securities issued and outstanding as of a recent date. (d) Upon the issuance of the shares of Common Stock converted in accordance with this Section 4(a)(iiD(4) hereof)of this Article 3, such shares shall be deemed to be duly authorized, validly issued, fully paid and nonassessable, and shall be free and clear of all liens, claims, security interests, charges and other encumbrances other than restrictions on transfer arising under federal and state securities laws. When shares of Non-Voting Common Stock have been converted in accordance with this Section D(4) of this Article 3, they shall be canceled and become authorized but unissued shares of Non-Voting Common Stock. (e) The Holder issuance of shares of Common Stock upon conversion of shares of Non-Voting Common Stock shall effect conversions by delivering be made without charge to the Company a completed notice substantially holders of such shares for any issue tax in respect thereof or other cost incurred by the form attached hereto as Exhibit A (a "Conversion Notice"). The Conversion Notice shall set forth the remaining principal amount of this Debenture and all accrued and unpaid interest thereon subsequent to the conversion at issue. The date on which a Conversion Notice is delivered is the "Conversion Date." Unless the Holder is converting the entire principal amount outstanding under this DebentureCorporation in connection with such conversion; provided, however, the Holder is Corporation shall not be required to physically surrender pay any tax that may be payable in respect of any transfer involved in the issuance of shares of Common Stock to a person other than the holder of the Non-Voting Common Stock converted. (f) As used in this Debenture to Section D(4) of this Article 3, the Company in order to effect conversions. Subject to Section 4(b), each Conversion Notice, once given, shall be irrevocable. Conversions hereunder following terms shall have the effect of lowering the outstanding principal amount of this Debenture plus all accrued and unpaid interest thereon in an amount equal meaning ascribed to the applicable conversion, which shall be evidenced by notations made in the Conversion Notice. The Holder and the Company shall maintain records showing the principal amount converted and the date of such conversions. In the event of any dispute or discrepancy, the records of the Holder shall be controlling and determinative in the absence of manifest error.them below:

Conversion. (A1) This Debenture shall be convertible into shares Subject to receiving all required regulatory approvals, the Holder may, at its election, upon surrender (either in person, by mail (postage prepaid) or other means of Common Stock at the option of the Holder, in whole or in part at any time and from time to time, after the Original Issue Date (subject to the limitations on conversion set forth in Section 4(a)(iidelivery) hereof). The number of shares of Common Stock issuable upon a conversion hereunder shall be determined by adding the sum of (i) the quotient obtained by dividing (x) the outstanding principal amount of this Debenture to be converted and (y) the Conversion Price (as defined herein), and (ii) the amount equal to (I) the product of (x) the outstanding principal amount of this Debenture to be converted and (y) the product of (1) the quotient obtained by dividing .12 by 360 and (2) the number of days for which such principal amount was outstanding, divided by (II) the Conversion Price on the Conversion Date, provided, that if the Company shall have timely elected to pay the interest due on a Conversion Date in cash pursuant to the terms hereof, subsection (ii) shall not be used in the calculation of the number of shares of Common Stock issuable upon a conversion hereunder. (B) Notwithstanding anything to the contrary contained herein, if on any Conversion Date: (1) the number of shares of Common Stock at the time authorized, unissued and unreserved for all purposes, or held as treasury stock, is insufficient to pay interest hereunder in shares of Common Stock; (2) the Underlying Shares issuable for such conversion (including any interest payable in shares) (x) are not registered for resale pursuant to an effective Underlying Shares Registration Statement and (y) may not be sold without volume restrictions pursuant to Rule 144(k) promulgated under the Securities Act (as defined in Section 6); (3) the Common Stock is not listed or quoted for trading on the OTC or on a Subsequent Market; (4) the Company has failed to timely satisfy its conversion obligations hereunder; or (5) the issuance of such shares of Common Stock would result in a violation of Sections 4(a)(ii), then, the Company may not pay interest in kind and must pay interest in cash by delivering, within three Trading Days of each applicable Conversion Date, an amount in cash equal to the product of (a) the outstanding principal amount of the Debentures to be converted on such Conversion Date and (b) the product of (x) the quotient obtained by dividing .12 by 360 and (y) the number of days for which such principal amount was outstanding. (C) This Debenture shall be convertible into shares of Common Stock at the option of the Holder, in whole or in part at any time and from time to time, after the Original Issue Date (subject to the limitations on conversion set forth in Section 4(a)(ii) hereof). The Holder shall effect conversions by delivering to the Company along with a completed notice substantially of conversion (the “Conversion Notice”) in the form attached hereto as Exhibit A Schedule “B” at the principal office of the Company in the City of Vancouver, British Columbia at any time prior 5:00 p.m. (Vancouver Time) on the last Business Day immediately preceding the Maturity Date (“Holder Conversion”), convert all or a "portion of the then outstanding Principal Sum (including any payment of interest thereon in accordance with Section 3.02), from time to time on or prior to the Maturity Date, at the Conversion Notice")Price. The delivery of the Conversion Notice shall set forth duly executed by the remaining principal amount Holder and the surrender of this Debenture and all accrued and unpaid interest thereon subsequent to the conversion at issue. The date on which a Conversion Notice is delivered is the "Conversion Date." Unless the Holder is converting the entire principal amount outstanding under this Debenture, the Holder is not be required to physically surrender this Debenture to the Company in order to effect conversions. Subject to Section 4(b), each Conversion Notice, once given, shall be irrevocable. Conversions hereunder shall have deemed to constitute a contract between the effect of lowering the outstanding principal amount of this Debenture plus all accrued and unpaid interest thereon in an amount equal to the applicable conversion, which shall be evidenced by notations made in the Conversion Notice. The Holder and the Company shall maintain records showing whereby (i) the principal amount converted and Holder subscribes for the date number of such conversions. In the event of any dispute or discrepancy, the records of Common Shares which the Holder shall be controlling entitled to receive upon such Holder Conversion, (ii) the Holder releases the Company from all liability thereon or from all liability with respect to the portion of the Principal Sum converted, as the case may be, and determinative (iii) the Company agrees that the surrender of this Debenture for Holder Conversion constitutes full payment of the subscription price for the Common Shares issuable on such Holder Conversion. (2) As promptly as possible after receipt of the Conversion Notice and this Debenture, but subject to Section 4.03 hereto, the Company shall issue or cause to be issued and deliver or cause to be delivered to the Holder a certificate in the absence name of manifest errorthe Holder for the number of Common Shares deliverable upon the Holder Conversion. Upon completion of the conversion transaction, the rights of the Holder to receive, in respect of the amount hereof so converted, the Principal Sum shall cease and the Holder shall be deemed to have become on such date the holder of record of such Common Shares represented thereby. (3) In the event that only a portion of the Principal Sum is subject to Holder Conversion, the Holder will be entitled to receive a replacement Debenture representing the Principal Sum not subject to Holder Conversion on the same terms and provisions contained herein.

Conversion. (Aa) This Debenture If a Fundamental Change occurs, each Holder of a Note shall be convertible into shares have the right, at such Holder’s option, to convert all or any portion of Common Stock at the option of the Holder, in whole or in part such Note by giving a notice at any time and from time on or before the 4th Business Day preceding the Fundamental Change Repurchase Date (the “Conversion Notice”) relating to such Fundamental Change (the “Fundamental Change Conversion Cut-off Day”); provided that a Holder that, pursuant to Section 8.01, has exercised its Repurchase Option in connection with such Fundamental Change shall not be entitled to exercise this conversion right unless it irrevocably withdraws its election to exercise such Repurchase Option pursuant to Section 8.02 or the following proviso applies; provided further, that if a Mandatory Conversion Election has been made pursuant to Section 9.02(b), then any Holder that has not exercised this conversion right by the Fundamental Change Conversion Cut-off Day shall be deemed to have irrevocably exercised such conversion right as of 5:00 pm, New York time, after on the Original Issue Date Fundamental Change Conversion Cut-off Day and, if such Holder has previously elected to exercise its Repurchase Option pursuant to Section 8.01, then such Repurchase Option election shall as of such time be deemed automatically withdrawn, void and of no further force and effect. (subject to b) Without limiting the limitations on conversion set forth in rights provided under Section 4(a)(ii) hereof12.01(a). The number of shares of Common Stock issuable upon , if a conversion hereunder shall be determined by adding the sum of Scenario 1 Final Equity Distribution or a Scenario 2 Final Equity Distribution occurs (i) each Holder of a Series 1 Note shall have the quotient obtained right, at such Holder’s option, to convert all or any portion of such Note by dividing (x) giving a Conversion Notice at any time during the outstanding principal amount of this Debenture to be converted and (y) the Final Conversion Price (as defined herein)Period, and (ii) each Holder of a Series 2 Note shall have the amount equal right, at such Holder’s option, to convert all or any portion of such Note by giving a Conversion Notice at any time during the Final Conversion Period. (Ic) Notes converted under Section 12.01(a) shall cease to accrue interest on the product 30th day preceding the occurrence of (xthe relevant Fundamental Change. Notes converted under Section 12.01(b) shall cease to accrue interest on the outstanding first day of the Final Conversion Period. The accrued and unpaid interest on any Note being converted shall be added to the principal amount of this Debenture to be converted and such Note being converted. (yd) the product of (1) the quotient obtained by dividing .12 by 360 and (2) the number of days For each Note properly tendered for which such principal amount was outstandingconversion hereunder, divided by (II) the Conversion Price on the Conversion Date, provided, that if the Company shall have timely elected to pay the interest due on a Conversion Date in cash pursuant issue and deliver to the terms hereof, subsection (ii) shall not be used in the calculation of the converting Holder a number of shares equal to the Note Conversion Amount divided by the applicable Conversion Price (plus cash in lieu of fractional shares of Common Stock issuable upon a conversion hereunder. (B) Notwithstanding anything to the contrary contained herein, if on any Conversion Date: (1) the number in accordance with Section 12.03 and adjusted pro rata for amounts being converted in integral multiples of shares of Common Stock at the time authorized, unissued and unreserved for all purposes, or held as treasury stock, is insufficient to pay interest hereunder in shares of Common Stock; (2) the Underlying Shares issuable for such conversion (including any interest payable in shares) (x) are not registered for resale pursuant to an effective Underlying Shares Registration Statement and (y) may not be sold without volume restrictions pursuant to Rule 144(k) promulgated under the Securities Act (as defined in Section 6); (3) the Common Stock is not listed or quoted for trading on the OTC or on a Subsequent Market; (4) the Company has failed to timely satisfy its conversion obligations hereunder; or (5) the issuance of such shares of Common Stock would result in a violation of Sections 4(a)(ii), then, the Company may not pay interest in kind and must pay interest in cash by delivering, within three Trading Days of each applicable Conversion Date, an amount in cash equal to the product of (a) the outstanding principal amount of the Debentures to be converted on such Conversion Date and (b) the product of (x) the quotient obtained by dividing .12 by 360 and (y) the number of days for which such principal amount was outstanding. (C) This Debenture shall be convertible into shares of Common Stock at the option of the Holder, in whole or in part at any time and from time to time, after the Original Issue Date (subject to the limitations on conversion set forth in Section 4(a)(ii) hereof$1.00). The Holder Company shall effect conversions by delivering cause such issuance and delivery of shares issuable upon conversion to be made promptly and in no event later than fifteen (15) days following the Company a completed notice substantially in the form attached hereto as Exhibit A (a "applicable Conversion Notice"). The Conversion Notice shall set forth the remaining principal amount of this Debenture Calculation Date; provided that such issuance and all accrued and unpaid interest thereon subsequent to the conversion at issue. The date on which a Conversion Notice is delivered is the "Conversion Date." Unless the Holder is converting the entire principal amount outstanding under this Debenture, the Holder is not be required to physically surrender this Debenture to the Company in order to effect conversions. Subject to Section 4(b), each Conversion Notice, once given, delivery shall be irrevocable. Conversions hereunder shall have contingent on the effect of lowering the outstanding principal amount of this Debenture plus all accrued and unpaid interest thereon in an amount equal to the applicable conversion, which shall be evidenced by notations made in the Conversion Notice. The Holder and the Company shall maintain records showing the principal amount converted and the date of such conversions. In the event of any dispute or discrepancy, the records of the Holder shall be controlling and determinative in the absence of manifest error.Holder’s compliance with Section 12.01

Conversion. (A) This Debenture shall be convertible into shares of Common Stock at the option of the Holder, in whole or in part at any time and from time to time, after the Original Issue Date (subject to the limitations on conversion set forth in Section 4(a)(ii) hereof). The number of shares of Common Stock issuable upon a conversion hereunder shall be determined by adding the sum of (i) the quotient obtained by dividing (x) the outstanding principal amount of this Debenture to be converted and (y) the Conversion Price (as defined herein), and (ii) the amount equal to (I) the product of (x) the outstanding principal amount of this Debenture to be converted and (y) the product of (1) the quotient obtained by dividing .12 by 360 and (2) the number of days for which such principal amount was outstanding, divided by (II) the Conversion Price on the Conversion Date, provided, that if the Company shall have timely elected to pay the interest due on a Conversion Date in cash pursuant to the terms hereof, subsection (ii) shall not be used in the calculation of the number of shares of Common Stock issuable upon a conversion hereunder. (B) Notwithstanding anything to the contrary contained herein, if on any Conversion Date: (1) the number of shares of Common Stock at the time authorized, unissued and unreserved for all purposes, or held as treasury stock, is insufficient to pay interest hereunder in shares of Common Stock; (2) the Underlying Shares issuable for such conversion (including any interest payable in shares) (x) are not registered for resale pursuant to an effective Underlying Shares Registration Statement and (y) may not be sold without volume restrictions pursuant to Rule 144(k) promulgated under the Securities Act (as defined in Section 6); (3) the Common Stock is not listed or quoted for trading on the OTC or on a Subsequent Market; (4) the Company has failed to timely satisfy its conversion obligations hereunder; or (5) the issuance of such shares of Common Stock would result in a violation of Sections 4(a)(ii), then, the Company may not pay interest in kind and must pay interest in cash by delivering, within three Trading Days of each applicable Conversion Date, an amount in cash equal to the product of (a) the The outstanding principal amount of the Debentures to be converted on such Conversion Date and (b) the product of (x) the quotient obtained by dividing .12 by 360 and (y) the number of days for which such principal amount was outstanding. (C) This Debenture shall be convertible into shares of Common Stock at the option of the Holder, in whole or in part at any time and from time to time, after the Original Issue Date (subject to the limitations on conversion set forth in Section 4(a)(ii) hereof). The Holder shall effect conversions by delivering to the Company a completed notice substantially in the form attached hereto as Exhibit A (a "Conversion Notice"). The Conversion Notice shall set forth the remaining principal amount of this Debenture Principal and all accrued and unpaid interest thereon subsequent Interest on the Note may be converted into Securities pursuant to the terms set forth in Section 4.1(b) below (each, a “Conversion”). (b) Unless otherwise agreed to in writing by the parties, the outstanding Principal and accrued and unpaid Interest on the Note shall automatically be subject to a Conversion into Securities as soon as the Qualifying Transaction occurs as stated in the Plan of Arrangement approved by the Definitive Agreement without any other further action required on the part of the Purchaser and the Note shall be deemed to be surrendered for conversion at issue. The date on which a such time for purposes of Section 4.1(d). (c) Each Conversion Notice is delivered is under the "Conversion Date." Unless Note shall be effected in accordance with the Holder is converting following: (i) the entire principal amount outstanding under this Debenture, Principal and accrued and unpaid interest of the Holder is not Note to be required to physically surrender this Debenture converted shall be converted in full into such number of Securities equal to the Company in order to effect conversions. Subject to Section 4(b), each Conversion Notice, once given, shall be irrevocable. Conversions hereunder shall have quotient of: (A) the effect product of: (I) the aggregate of lowering all of the Principal outstanding principal amount of this Debenture plus and all accrued and unpaid interest thereon in Interest, multiplied by (II) an amount equal to Company Value divided by the applicable conversionValuation Cap, which divided by, (B) USD $10.00. (d) For the purposes hereof, the Note shall be evidenced by notations made deemed to be surrendered for conversion on the day that the Purchaser delivers the Conversion Notice and the surrendered Note to the Corporation, or if the Note is automatically converted pursuant to Section 0, the date on which such automatic Conversion occurs in accordance therewith (in each case, the “Date of Conversion”). (e) From and after the Date of Conversion, the Purchaser shall be entitled to be entered in the Conversion Noticebooks of the Corporation as the holder of the number of Securities into which the Note is convertible in accordance with the Section 4.1(a), and, as soon as practicable thereafter (and in any event, within five (5) Business Days), the Corporation shall deliver to the Purchaser a certificate or certificates for such Securities. The Holder and certificates representing the Company shall maintain records showing the principal amount converted and the date of such conversions. In the event of any dispute or discrepancy, the records Securities to be issued upon conversion of the Holder Note shall bear such restrictive or other legends as may be controlling required by applicable laws. (f) The Securities issued upon conversion shall rank pari passu in respect of dividends declared in favour of Purchaser on and determinative in after the absence Date of manifest errorConversion, from which applicable date they will for all purposes be and be deemed to be issued and outstanding as fully paid and non-assessable Securities.

Conversion. a. In connection with the Closing of the Merger Agreement and on the Closing Date, at the election of the Lender, all of the outstanding principal balance hereunder and the accrued interest thereon (Athe “Conversion Balance”) This Debenture shall be convertible converted into a number of fully paid and nonassessable shares of the Borrower’s Common Stock equal to the quotient of the Conversion Balance divided by the Per Share Merger Consideration (as defined in Merger Agreement). b. To convert the Conversion Balance into shares of Common Stock on the Closing Date, the Lender shall transmit by electronic mail at least three (3) Business Days prior to the option Closing Date, a copy of an executed notice of conversion (the “Conversion Notice”) to the Borrower. On the Closing Date, the Borrower shall issue and deliver to the address as specified in the Conversion Notice, a certificate, registered in the name of the HolderLender, in whole or in part at any time and from time to time, after the Original Issue Date (subject to the limitations on conversion set forth in Section 4(a)(ii) hereof). The number of shares of Common Stock issuable upon a conversion hereunder shall be determined by adding the sum of (i) the quotient obtained by dividing (x) the outstanding principal amount of this Debenture to be converted and (y) the Conversion Price (as defined herein), and (ii) the amount equal to (I) the product of (x) the outstanding principal amount of this Debenture to be converted and (y) the product of (1) the quotient obtained by dividing .12 by 360 and (2) the number of days for which such principal amount was outstanding, divided by (II) the Conversion Price on the Conversion Date, provided, that if the Company shall have timely elected to pay the interest due on a Conversion Date in cash pursuant to the terms hereof, subsection (ii) shall not be used in the calculation of the number of shares of Common Stock issuable upon a conversion hereunderto which the Lender shall be entitled. (B) Notwithstanding anything c. The Borrower shall not issue any fractional shares hereunder but instead shall round up or down any fractional shares as a result of the foregoing calculation to the contrary contained hereinnearest whole share. d. Upon any such conversion, if on this Note shall be deemed cancelled and shall be of no further force and effect, all indebtedness, liabilities and obligations owed by the Borrower under this Note shall be deemed to be satisfied and discharged in full and the Borrower will not be indebted to the Lender for any Conversion Date: (1) reason under this Note, such cancellation, satisfaction and discharge to be deemed to be effective automatically upon such conversion without the number necessity of shares of Common Stock any further action by the Lender, the Borrower or any other person or entity; provided that the Lender shall surrender this Note to the Borrower for cancellation at the time authorized, unissued and unreserved for all purposes, or held as treasury stock, is insufficient to pay interest hereunder in shares of Common Stock; (2) the Underlying Shares issuable for such conversion (including any interest payable in shares) (x) are not registered for resale pursuant to or provide an effective Underlying Shares Registration Statement and (y) may not be sold without volume restrictions pursuant to Rule 144(k) promulgated under the Securities Act (as defined in Section 6); (3) the Common Stock is not listed or quoted for trading on the OTC or on a Subsequent Market; (4) the Company has failed to timely satisfy its conversion obligations hereunder; or (5) the issuance of such shares of Common Stock would result in a violation of Sections 4(a)(ii), then, the Company may not pay interest in kind and must pay interest in cash by delivering, within three Trading Days of each applicable Conversion Date, an amount in cash equal indemnification undertaking reasonably satisfactory to the product of (a) the outstanding principal amount of the Debentures Borrower with respect to be converted on such Conversion Date and (b) the product of (x) the quotient obtained by dividing .12 by 360 and (y) the number of days for which such principal amount was outstanding. (C) This Debenture shall be convertible into shares of Common Stock at the option of the Holder, in whole or in part at any time and from time to time, after the Original Issue Date (subject to the limitations on conversion set forth in Section 4(a)(ii) hereof). The Holder shall effect conversions by delivering to the Company a completed notice substantially this Note in the form attached hereto as Exhibit A (a "Conversion Notice"case of its loss, theft or destruction). The Conversion Notice shall set forth the remaining principal amount of this Debenture and all accrued and unpaid interest thereon subsequent to the conversion at issue. The date on which a Conversion Notice is delivered is the "Conversion Date." Unless the Holder is converting the entire principal amount outstanding under this Debenture, the Holder is not be required to physically surrender this Debenture to the Company in order to effect conversions. Subject to Section 4(b), each Conversion Notice, once given, shall be irrevocable. Conversions hereunder shall have the effect of lowering the outstanding principal amount of this Debenture plus all accrued and unpaid interest thereon in an amount equal to the applicable conversion, which shall be evidenced by notations made in the Conversion Notice. The Holder and the Company shall maintain records showing the principal amount converted and the date of such conversions. In the event of any dispute or discrepancy, the records of the Holder shall be controlling and determinative in the absence of manifest error.

Conversion. (i) Conversion at Option of Holder. ---------------------------------- (A) This Debenture shall be convertible into shares of Common Stock at the option of the Holder, in whole or in part at any time and from time to time, after the Original Issue Date (as defined in Section 4) (subject to the limitations on conversion set forth in Section 4(a)(ii3(a)(ii) hereof). The number of shares of Common Stock issuable upon a conversion hereunder shall be determined by adding the sum of (i) equals the quotient obtained by dividing (x) the outstanding principal amount of this Debenture to be converted and by (y) the Conversion Price (as defined hereinin Section 3(c)(i), and ). The Obligor shall deliver Common Stock certificates to the Holder prior to the Fifth (ii5th) the amount equal to (I) the product of (x) the outstanding principal amount of this Debenture to be converted and (y) the product of (1) the quotient obtained by dividing .12 by 360 and (2) the number of days for which such principal amount was outstanding, divided by (II) the Conversion Price on the Trading Day after a Conversion Date, provided, that if the Company shall have timely elected to pay the interest due on a Conversion Date in cash pursuant to the terms hereof, subsection (ii) shall not be used in the calculation of the number of shares of Common Stock issuable upon a conversion hereunder. (B) Notwithstanding anything to the contrary contained herein, if on any Conversion Date: : (1) the number of shares of Common Stock at the time authorized, unissued and unreserved for all purposes, or held as treasury stock, is insufficient to pay principal and interest hereunder in shares of Common Stock; ; (2) the Underlying Shares issuable for such conversion (including any interest payable in shares) (x) are not registered for resale pursuant to an effective Underlying Shares Registration Statement and (y) may not be sold without volume restrictions pursuant to Rule 144(k) promulgated under the Securities Act (as defined in Section 6); (3) the Common Stock is not listed or quoted for trading on the OTC or on a Subsequent Market; ; (43) the Company Obligor has failed to timely satisfy its conversion obligations hereunderconversion; or or (54) the issuance of such shares of Common Stock would result in a violation of Sections 4(a)(iiSection 3(a)(ii), then, at the Company may not pay interest option of the Holder, the Obligor, in kind and must pay interest in cash by deliveringlieu of delivering shares of Common Stock pursuant to Section 3(a)(i)(A), shall deliver, within three (3) Trading Days of each applicable Conversion Date, an amount in cash equal to the product of (a) the outstanding principal amount of the Debentures to be converted plus any interest due therein divided by the Conversion Price and multiplied by the highest closing price of the stock from date of the conversion notice till the date that such cash payment is made. Further, if the Obligor shall not have delivered any cash due in respect of conversion of this Debenture or as payment of interest thereon by the fifth (5th) Trading Day after the Conversion Date, the Holder may, by notice to the Obligor, require the Obligor to issue shares of Common Stock pursuant to Section 3(c), except that for such purpose the Conversion Price applicable thereto shall be the lesser of the Conversion Price on such the Conversion Date and (b) the product Conversion Price on the date of (x) such Holder demand. Any such shares will be subject to the quotient obtained by dividing .12 by 360 and (y) the number provisions of days for which such principal amount was outstandingthis Section. (C) This Debenture shall be convertible into shares of Common Stock at the option of the Holder, in whole or in part at any time and from time to time, after the Original Issue Date (subject to the limitations on conversion set forth in Section 4(a)(ii) hereof). The Holder shall effect conversions by delivering to the Company Obligor a completed notice substantially in the form attached hereto as Exhibit A (a "Conversion ---------- Notice"). The Conversion Notice shall set forth the remaining principal amount of this Debenture and all accrued and unpaid interest thereon subsequent to the conversion at issue. The date on which a Conversion Notice is delivered is the "Conversion Date." Unless the Holder is converting the entire principal ---------------- amount outstanding under this Debenture, the Holder is not be required to physically surrender this Debenture to the Company Obligor in order to effect conversions. Subject to Section 4(b), each Conversion Notice, once given, shall be irrevocable. Conversions hereunder shall have the effect of lowering the outstanding principal amount of this Debenture plus all accrued and unpaid interest thereon in an amount equal to the applicable conversion, which shall be evidenced by notations made in the Conversion Notice. The Holder and the Company Obligor shall maintain records showing the principal amount converted and the date of such conversions. In the event of any dispute or discrepancy, the records of the Holder shall be controlling and determinative in the absence of manifest error.

Conversion. (A) This Debenture shall be convertible into shares of Common Stock The Lender may, at the option of the HolderLender’s option, in whole or in part at any time and from time to time, after the Original Issue Date (subject time prior to the limitations close of business of the Borrower on conversion set forth the fifth business day prior to the Maturity Date, elect to convert, in Section 4(a)(iiwhole or in part, the Principal Amount outstanding and accrued but unpaid interest into common shares (“Common Shares”) hereofin the capital of the Biologix Hair Inc. (the “Borrower Parent”). The number , a company incorporated under the laws of shares the State of Florida with its principal offices at ▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ 2H2.. Each Common Stock issuable upon Share so issued will for these purposes be valued based on a conversion hereunder shall be determined by adding price (the sum of “Conversion Price”) equal to: (i) if the quotient obtained by dividing Borrower Parent is a privately held company upon the Notice of Conversion, the greater of (xa) US$1 per Common Share and (b) the outstanding principal amount price per Common Share of this Debenture to be converted and (y) most recent private placement of securities completed by the Conversion Price (Borrower Parent as defined herein), and at the applicable Maturity Date less 20%; or (ii) if upon the amount equal to (I) Notice of Conversion the product of (x) the outstanding principal amount of this Debenture to be converted and (y) the product of (1) the quotient obtained by dividing .12 by 360 and (2) the number of days for which such principal amount was outstanding, divided by (II) the Conversion Price on the Conversion Date, provided, that if the Company shall have timely elected to pay the interest due Borrower Parent is a public company whose securities are listed on a Conversion Date in cash pursuant to the terms hereof, subsection stock exchange or quoted on an over-the-counter quotation system (ii) shall not be used in the calculation of the number of shares of Common Stock issuable upon whether directly or resulting from a conversion hereunder. (B) Notwithstanding anything to the contrary contained herein, if on any Conversion Date: (1) the number of shares of Common Stock at the time authorized, unissued and unreserved for all purposes, or held as treasury stock, is insufficient to pay interest hereunder in shares of Common Stock; (2) the Underlying Shares issuable for such conversion (including any interest payable in shares) (x) are not registered for resale pursuant to an effective Underlying Shares Registration Statement and (y) may not be sold without volume restrictions pursuant to Rule 144(k) promulgated under the Securities Act Capital Reorganization (as defined in Section 67 (b) (iv) below); (3) the Common Stock is not listed or quoted for trading on the OTC or on a Subsequent Market; (4) the Company has failed to timely satisfy its conversion obligations hereunder; or (5) the issuance of such shares of Common Stock would result in a violation of Sections 4(a)(ii), then, the Company may not pay interest in kind and must pay interest in cash by delivering, within three Trading Days of each applicable Conversion Date, an amount in cash a price per Common Share equal to the product of (a) the outstanding principal amount average daily closing price of the Debentures to be converted Common Shares during the 10 day period beginning on such Conversion Date and (b) the product of (x) the quotient obtained by dividing .12 by 360 and (y) the number of days for which such principal amount was outstanding. (C) This Debenture shall be convertible into shares of Common Stock at the option date of the Notice of Conversion, less 20%. The Lender, or the current holder of this Note (the “Holder”), in whole or in part at any time and from time to time, after the Original Issue Date shall give a minimum of five business days prior written notice (subject “Notice of Conversion”) to the limitations on conversion set forth in Borrower and the Borrower Parent at their address for purposes of notice under Section 4(a)(ii) hereof). The Holder shall effect conversions by delivering to 13 together with the Company a completed notice substantially in the form Conversion Form attached hereto as Exhibit A B exercising the right to convert this Note in accordance with the provisions hereof. Thereupon the Holder shall be entitled to be entered in the books of the Borrower Parent as at the date of conversion as the holder of the number of Common Shares into which this Note (a "Conversion Notice"). The Conversion Notice shall set forth or the remaining principal amount portion converted) is convertible in accordance with the provisions of this Debenture Section and, as soon as practicable thereafter and all accrued upon surrender of this Note to the Borrower, the Borrower Parent shall deliver to the Holder a certificate or certificates for such Common Shares. If the Lender provides a Notice of Conversion to the Borrower and unpaid interest thereon subsequent Borrower Parent with respect to the conversion at issue. The date on which of a Conversion Notice is delivered is portion of the "Conversion Date." Unless the Holder is converting the entire principal amount outstanding under this DebentureNote, the Borrower shall issue to the Lender a new convertible promissory note, having the same terms and conditions as this Note, representing the principal amount of the Note not converted. For the purposes of this Section, this Note shall be deemed to be surrendered for conversion on the date (herein called “Conversion Date”) which is five business days following the date on which Notice of Conversion is received by the Borrower and Borrower Parent, provided that if this Note is surrendered for conversion on a day on which the register of Common Shares is closed, the Holder shall become the holder of record of such Common Shares as at the date on which such register is next re-opened. The Borrower Parent shall not be required to physically surrender this Debenture issue fractional Common Shares upon the exercise of any conversion right. In lieu of fractional Common Shares, the number of Common Shares issuable on conversion shall be rounded up or down, as the case may be, to the Company in order to effect conversionsnearest whole Common Share. Subject to Section 4(b)For greater certainty, each Conversion Notice, once given, no cash payments shall be irrevocablemade by the Borrower or Borrower Parent in lieu of issuing any fractional interest in a Common Share. Conversions hereunder The Borrower Parent covenants that it will issue and deliver to the Lender certificates evidencing such number of Common Shares as shall have then be issuable upon the effect of lowering the outstanding principal amount conversion of this Debenture plus Note or such portion of it as is specified in the Notice of Conversion. The Borrower Parent covenants that all accrued and unpaid interest thereon in an amount equal to the applicable conversion, Common Shares which shall be evidenced so issuable shall be duly and validly issued as fully paid and non-assessable. The Lender acknowledges and agrees that such certificates may bear legends regarding applicable restrictions on transfers of the Common Shares under applicable Canadian and U.S. securities laws. The Borrower Parent represents and warrants that a sufficient number of Common Shares are authorized and have been reserved for issuance to satisfy the Borrower’s and Borrower Parent’s obligations on conversion of the Note. The Borrower Parent shall not declare or pay dividends in respect of the Common Shares following receipt by notations made in the Borrower Parent of the Notice of Conversion, until after the Conversion Notice. The Holder and the Company shall maintain records showing the principal amount converted and the date of such conversions. In the event of any dispute or discrepancy, the records of the Holder shall be controlling and determinative in the absence of manifest errorDate.

Conversion. (Aa) This Debenture At any time during the period commencing on October 1, 2011 and ending on the Maturity Date, at the option and upon the written election of the Company in accordance with Section 4(c) hereof, the outstanding principal and accrued but unpaid interest on this Note may be converted into Common Stock at a conversion price equal to $.05 per share. Upon such conversion, the Company shall be convertible into issue to the Holder a stock certificate representing the shares of Common Stock at the option of the Holder, in whole or in part at any time and from time issued pursuant to time, after the Original Issue Date (subject to the limitations on conversion set forth in this Section 4(a)(ii) hereof4(a). The number of shares of Common Stock issuable upon a conversion hereunder shall be determined by adding the sum of (i) the quotient obtained by dividing (x) the outstanding principal amount of this Debenture to be converted and (y) the Conversion Price (as defined herein), and (ii) the amount equal to (I) the product of (x) the outstanding principal amount of this Debenture to be converted and (y) the product of (1) the quotient obtained by dividing .12 by 360 and (2) the number of days for which such principal amount was outstanding, divided by (II) the Conversion Price on the Conversion Date, ; provided, however, that if the Company shall have timely elected to pay the interest due on a Conversion Date in cash pursuant to the terms hereof, subsection (ii) shall not be used in the calculation of the number of shares of Common Stock issuable upon a conversion hereunder. (B) Notwithstanding anything obligated to the contrary contained herein, if on any Conversion Date: (1) the number of shares of Common Stock at the time authorized, unissued and unreserved for all purposes, or held as treasury stock, is insufficient to pay interest hereunder in issue certificates evidencing such shares of Common Stock;, issued pursuant to this Section 4(a) unless this Note is delivered to the Company for cancellation, or the Holder notifies the Company that this Note has been lost, stolen or destroyed and executes an agreement reasonably satisfactory to the Company to indemnify the Company for any loss incurred by it in connection with the loss, theft or destruction of this Note. (2b) the Underlying Shares issuable for such No fractional shares shall be issued upon any conversion (including any interest payable in shares) (x) are not registered for resale of this Note into Common Stock, as applicable, pursuant to an effective Underlying Shares Registration Statement and (ySection 4(a) may not be sold without volume restrictions pursuant to Rule 144(k) promulgated under the Securities Act (as defined in Section 6); (3) the Common Stock is not listed or quoted for trading on the OTC or on a Subsequent Market; (4) the Company has failed to timely satisfy its conversion obligations hereunder; or (5) the issuance of such shares hereof. If any fractional share of Common Stock Stock, as applicable, would result in a violation of Sections 4(a)(ii), thenbe delivered upon such conversion, the Company may not Company, in lieu of delivering such fractional share, shall pay interest in kind and must pay interest in cash by delivering, within three Trading Days of each applicable Conversion Date, to the Holder an amount in cash equal to the product of (a) the outstanding principal amount allocable portion of the Debentures to be converted on price per share of such Conversion Date and (b) the product fractional share of (x) the quotient obtained by dividing .12 by 360 and (y) the number of days for which such principal amount was outstanding. (C) This Debenture shall be convertible into Common Stock. The Company covenants that all shares of Common Stock issued pursuant to Section 4(a) hereof will be duly and validly issued and fully paid and nonassessable, and free from all taxes, liens and charges with respect to the issue thereof. (c) In order to exercise its election to convert the outstanding principal and accrued but unpaid interest on this Note into Common Stock, the Company shall provide written notice to the Holder of its election (if Company so elects) to convert the outstanding principal and accrued but unpaid interest on this Note pursuant to Section 4(a) hereof at least two (2) business days prior to the option proposed date of such conversion. (d) Upon any taking by the Company of a record of the Holderholders of any class or series of securities for the purpose of determining the holders thereof who are entitled to vote with respect to any Liquidation Event, in whole or in part at any time and from time to time, after the Original Issue Date (subject Company shall provide notice to the limitations Holder at least ten (10) business days prior to the record date specified therein (or such shorter period approved by a Majority of Holders) specifying (i) the date on conversion set forth which any such record is to be taken for the purpose of determining stockholders entitled to vote with respect to any such Liquidation Event and (ii) the date, if any, that is to be fixed as to when the holders of record of Common Stock (or other securities) shall be entitled to exchange their shares of Common Stock (or other securities) for securities or other property deliverable upon such Liquidation Event. (e) In addition to the notice described in Section 4(a)(ii) hereof4(d). The Holder , the Company shall effect conversions by delivering provide notice to the Company a completed notice substantially in Holder of any Liquidation Event, as applicable, at least ten (10) business days prior to the form attached hereto as Exhibit A consummation of such event (a the "Conversion Corporate Event Notice"). The Conversion Corporate Event Notice shall set forth all material facts and terms relating to such Liquidation Event, including without limitation, as applicable: (i) the remaining principal amount nature, amount, terms and conditions of this Debenture and all accrued and unpaid interest thereon subsequent payment, if any, to the conversion at issue. The holders of Common Stock in connection with any such Liquidation Event, (ii) the date on which a Conversion Notice such Liquidation Event is delivered is expected to be consummated, (iii) the "Conversion Date." Unless procedures that must be followed (and the latest date that such procedures must be completed) in order for the Holder is converting to effect a conversion of this Note into shares of Common Stock, and (iv) a statement as to whether the entire principal amount outstanding under Company has elected to prepay this DebentureNote in connection with the Liquidation Event pursuant to Section 3(b) hereof. The Corporate Event Notice shall also provide the Holder with the option to require the Company to prepay this Note pursuant to Section 3(b) hereof. Upon receipt of the Corporate Event Notice, the Holder is not be required shall promptly (but in any event at least two (2) business days prior to physically surrender this Debenture the consummation of the Liquidation Event) provide written notice to the Company in order of its election (if Holder so elects) to effect conversions. Subject have this Note prepaid pursuant to Section 4(b), each Conversion Notice, once given, shall be irrevocable. Conversions hereunder shall have the effect of lowering the outstanding principal amount of this Debenture plus all accrued and unpaid interest thereon in an amount equal to the applicable conversion, which shall be evidenced by notations made in the Conversion Notice. The Holder and the Company shall maintain records showing the principal amount converted and the date of such conversions. In the event of any dispute or discrepancy, the records of the Holder shall be controlling and determinative in the absence of manifest error3(b) hereof.

Conversion. (AThe conversion price for any conversion pursuant to Section 2.7(a) This Debenture shall be convertible the lowest nominal or effective price per share paid by the Other Investors who purchase such Convertible Preferred Stock (with the exception of shares issuable upon exercise of the Bridge Warrants). The conversion price for any conversion into any Equity or Debt Security pursuant to Section 2.7(b) shall be the lowest of (i) the lowest nominal or effective price per share paid by any investor at any time on or after the date one year prior to the execution of this Agreement (with the exception of (x) purchases of up to 35,000 shares of the Company's Common Stock, $0.001 par value ("COMMON STOCK") pursuant to certain options to purchase, at a purchase price of $0.0001, that were outstanding on the Effective Date of this Agreement and held by members of the Board of Directors, as set forth in Schedule 2.7(d), and (y) shares issuable upon the exercise of the Bridge Warrants, each of which shall be excluded from consideration under this section), (ii) the lowest nominal or effective price at which any investor is entitled to acquire shares (including, without limitation, through purchase, exchange, conversion or exercise) pursuant to any other security, instrument, or promise, undertaking, commitment, agreement or letter of intent of the Company outstanding on or after the Effective Date of this Agreement or granted, issued, extended or otherwise made available by the Company at any time on or after the date one year prior to the Effective Date of this Agreement (regardless of whether currently exercisable or convertible) (with the exception of (x) certain options to purchase up to 35,000 shares of Common Stock at a purchase price of $0.0001 that were outstanding on the option Effective Date of this Agreement and held by members of the Holder, in whole or in part at any time and from time to time, after the Original Issue Date (subject to the limitations on conversion Board of Directors as set forth in Section 4(a)(ii) hereofSchedule 2.7(d). The number of shares of Common Stock issuable upon a conversion hereunder shall be determined by adding the sum of (i) the quotient obtained by dividing (x) the outstanding principal amount of this Debenture to be converted , and (y) the Conversion Price Bridge Warrants, each of which shall be excluded from consideration under this section); and (as defined hereiniii) the lesser of $0.10 per share or 35% discount to the average closing price per share of the Common Stock during any twenty consecutive trading days (beginning with the twenty consecutive trading days prior to the date of execution of this Agreement); provided, and however, that in no event shall the price per share calculated pursuant to this clause (iii) be less than $.04 per share. The calculation required by clause (ii) the amount equal to (Ihereof shall initially be based upon Schedule 2.7(d) the product of (x) the outstanding principal amount of this Debenture to be converted hereto. All other rights, preferences, privileges, terms and (y) the product of (1) the quotient obtained conditions received by dividing .12 Investor in connection with any conversion and/or any securities issued by 360 and (2) the number of days for which such principal amount was outstanding, divided by (II) the Conversion Price on the Conversion Date, provided, that if the Company to Investor upon conversion, shall have timely elected be no less favorable to pay Investor than the interest due on a Conversion Date rights, preferences, privileges, terms and conditions any other investor in cash pursuant to the terms hereof, subsection (ii) shall not be used in the calculation of the number of shares of Common Stock issuable upon a conversion hereunder. (B) Notwithstanding anything to the contrary contained herein, if on any Conversion Date: (1) the number of shares of Common Stock at the time authorized, unissued and unreserved for all purposes, or held as treasury stock, is insufficient to pay interest hereunder in shares of Common Stock; (2) the Underlying Shares issuable for such conversion (including any interest payable in shares) (x) are not registered for resale pursuant to an effective Underlying Shares Registration Statement and (y) may not be sold without volume restrictions pursuant to Rule 144(k) promulgated under the Securities Act (as defined in Section 6); (3) the Common Stock is not listed or quoted for trading on the OTC or on a Subsequent Market; (4) the Company has failed received or is entitled to timely satisfy its receive with respect to the security into which Investor is converting pursuant to any other security, instrument, promise, undertaking, commitment, agreement or letter of intent of the Company, whether or not such rights, preferences, privileges, terms and conditions for any other investor are incorporated into the agreements or documents relating to any conversion obligations hereunder; or (5) the or any issuance of such shares the security or other instrument to that investor or are provided separately, at any time on or after one year prior to the execution of Common Stock would result in a violation of Sections 4(a)(ii), thenthis Agreement. In regard to each conversion hereunder, the Company may not pay interest in kind hereby agrees to take and/or arrange for all necessary corporate and must pay interest in cash by delivering, within three Trading Days related action to enable the execution of each applicable Conversion Datesuch conversion elected by Investor. Except as set forth on Schedule 2.7(d) hereto, an amount in cash equal no subscription, warrant, option, convertible security, or other right (direct or indirect, contingent or otherwise) to the product of (a) the outstanding principal amount purchase or otherwise acquire any equity securities of the Debentures to be converted on such Conversion Date and (b) the product of (x) the quotient obtained by dividing .12 by 360 and (y) the number of days for which such principal amount was outstanding. (C) This Debenture shall be convertible into shares of Common Stock at the option of the Holder, in whole or in part at any time and from time to time, after the Original Issue Date (subject to the limitations on conversion set forth in Section 4(a)(ii) hereof). The Holder shall effect conversions by delivering to the Company a completed notice substantially in the form attached hereto as Exhibit A (a "Conversion Notice"). The Conversion Notice shall set forth the remaining principal amount of this Debenture and all accrued and unpaid interest thereon subsequent to the conversion at issue. The date on which a Conversion Notice is delivered is the "Conversion Date." Unless the Holder is converting the entire principal amount outstanding under this Debenture, the Holder is not be required to physically surrender this Debenture to the Company in order to effect conversions. Subject to Section 4(b), each Conversion Notice, once given, shall be irrevocable. Conversions hereunder shall have the effect of lowering the outstanding principal amount of this Debenture plus all accrued and unpaid interest thereon in an amount equal to the applicable conversion, which shall be evidenced by notations made in the Conversion Notice. The Holder and the Company shall maintain records showing the principal amount converted and the date of such conversions. In the event of any dispute or discrepancy, the records of the Holder shall be controlling and determinative in the absence of manifest error.Company

Conversion. (A) This Debenture shall be convertible into shares of Common Stock at the option of the Holder, in whole or in part at any time and from time to time, after the Original Issue Date (subject to the limitations on conversion set forth in Section 4(a)(ii) hereof). The number of shares of Common Stock issuable upon a conversion hereunder shall be determined by adding the sum of (i) the quotient obtained by dividing (x) the outstanding principal amount of this Debenture to be converted and (y) the Conversion Price (as defined herein), and (ii) the amount equal to (I) the product of (x) the outstanding principal amount of this Debenture to be converted and (y) the product of (1) the quotient obtained by dividing .12 by 360 and (2) the number of days for which such principal amount was outstanding, divided by (II) the Conversion Price on the Conversion Date, provided, that if the Company shall have timely elected to pay the interest due on a Conversion Date in cash pursuant to the terms hereof, subsection (ii) shall not be used in the calculation of the number of shares of Common Stock issuable upon a conversion hereunder. (B) Notwithstanding anything to the contrary contained hereinin this Section 10, if on any Conversion Date: (1) the number each Holder of shares of Preferred Stock to be redeemed by the Corporation may elect to convert all or any portion of the shares of Preferred Stock held by such Holder into Common Stock in accordance with the provisions of Section 6 (taking into account the limitation in the last sentence of Section 6(a)(i)(B) and any contingencies contemplated by Section 10(e)) at any time prior to the time authorizedRedemption Date, unissued and unreserved which election, for all purposesthe avoidance of doubt, may be made subject to the same or similar contingencies to which any such redemption by the Corporation is made subject. Without limiting the generality of the foregoing, in the event that any such conversion is being effected in connection with, or held as treasury stockpart of a Change of Control or any redemption by the Corporation in accordance with this Section 10 is otherwise made conditional on another event or happening (or the absence of any event or happening), is insufficient the Holder may condition such conversion on the effectiveness of such Change of Control (or such earlier time as the consideration payable to pay interest hereunder in shares holders of Common Stock; Stock in respect of such Change of Control is determined) or such other event or happening (2) or the Underlying Shares issuable for absence of such event or happening), in which case such conversion (including shall be deemed effective as of immediately prior to any interest payable in shares) (x) are not registered for resale pursuant to an effective Underlying Shares Registration Statement and (y) may not be sold without volume restrictions pursuant to Rule 144(k) promulgated under the Securities Act (as defined in Section 6); (3) the Common Stock is not listed or quoted for trading on the OTC or on a Subsequent Market; (4) the Company has failed to timely satisfy its conversion obligations hereunder; or (5) the issuance such redemption of such shares shares; provided that if such conversion in connection with any such redemption of Common the Preferred Stock would result in the issuance of any Excess Conversion Shares, such election to convert, solely with respect to such Excess Conversion Shares, shall be deemed an election by such Holder to (x) in the case of a violation Change of Sections 4(a)(ii)Control, thenreceive, the Company may not pay interest in kind and must pay interest in cash by delivering, within three Trading Days upon consummation of each applicable Conversion Datesuch Change of Control, an amount in cash equal to the product aggregate amount such Holder would have received had all such Excess Conversion Shares converted into Common Stock and such Holder received in respect of the shares of Common Stock issuable upon such conversion (aincluding for all purposes of this proviso Excess Conversion Shares and disregarding the limitation in the last sentence of Section 6(a)(i)(B)) the outstanding principal amount aggregate consideration payable to such holder in respect of the Debentures to be converted on all such Conversion Date and (b) the product shares of (x) the quotient obtained by dividing .12 by 360 Common Stock so issuable upon conversion and (y) the number in connection with any redemption that is not a Change of days for which such principal amount was outstanding. (C) This Debenture shall be convertible into shares of Common Stock Control Redemption, at the option of the HolderCorporation, in whole or in part at any time either (i) receive the greater of (A) the Redemption Price and from time to time, after (B) the Original Issue Common Stock Trading Price on the last Trading Day preceding the Redemption Date (subject to multiplied by the limitations on conversion set forth in Section 4(a)(ii) hereof). The Holder shall effect conversions by delivering to Excess Conversion Shares into which Preferred Stock would have converted but for the Company a completed notice substantially limitation in the form attached hereto as Exhibit A last sentence of Section 6(a)(i)(B) or (ii) continue to hold such Preferred Stock which would have converted into Common Stock but for the limitation in the last sentence of Section 6(a)(i)(B), with the Corporation having no right to redeem such Preferred Stock until the earlier of (I) a "Conversion Notice"). The Conversion Notice shall set forth Change of Control (in which case, upon election to redeem by the remaining principal amount of this Debenture Corporation, the foregoing clause (x) would apply) and all accrued and unpaid interest thereon subsequent to (II) a time at which the conversion at issue. The date on which a Conversion Notice is delivered is limitation in the "Conversion Date." Unless last sentence of Section 6(a)(i)(B) would not be applicable to limit any conversion by the Holder is converting the entire principal amount outstanding under this Debenture, the Holder is not be required to physically surrender this Debenture to the Company in order to effect conversions. Subject to Section 4(b), each Conversion Notice, once given, shall be irrevocable. Conversions hereunder shall have the effect of lowering the outstanding principal amount of this Debenture plus all accrued and unpaid interest thereon in an amount equal to the applicable conversion, which shall be evidenced by notations made in the Conversion Notice. The Holder and the Company shall maintain records showing the principal amount converted and the date of such conversions. In the event of any dispute or discrepancy, the records such remaining shares of the Holder shall be controlling and determinative in the absence of manifest errorPreferred Stock.

Conversion. On or after the date hereof, and prior to the maturity of the Convertible Notes or, if sooner, the Call Date (A) This Debenture as hereinafter defined), the holder of a Convertible Note shall be convertible into shares of Common Stock have the right, at the option of such holder (whether or not payment upon the HolderConvertible Notes is prohibited by the subordination provisions of Article 5) to convert, in whole or in part at any time and from time to time, after the Original Issue Date (subject to the limitations on conversion set forth terms and provisions of this Article 11, all or, subject to the proviso contained in this Section 4(a)(ii) hereof). The 11.1, any portion of the Convertible Notes held by such holder into the number of shares of Common Stock issuable upon a conversion hereunder fully paid and nonassessable Shares as shall be determined by adding equal to the sum of (i) the quotient obtained by dividing (x) the outstanding aggregate principal amount of this Debenture to be Convertible Notes then being converted and (y) divided by the Conversion Price (then in effect, by delivery of the Convertible Notes to the Company at the office of the Company provided for in Section 8.2 herein; provided, however, that no holder of a Convertible Note shall be permitted to exercise its rights with respect to partial conversions as defined herein), and (ii) the amount equal herein described unless each such holder of a Convertible Note elects to (I) the product convert a minimum of (x) the outstanding at least $500,000 principal amount of this Debenture to be converted and (y) the product its Convertible Note or any additional amounts in multiples of (1) the quotient obtained by dividing .12 by 360 and (2) the number of days for which such $250,000 principal amount was outstanding, divided by (II) the Conversion Price on the Conversion Date, of Convertible Notes; provided, further, that if the Company shall have timely elected to pay the interest due on a Conversion Date in cash pursuant to the terms hereof, subsection (ii) shall not be used in the calculation of the number of shares of Common Stock issuable upon a conversion hereunder. (B) Notwithstanding anything to the contrary contained herein, if on any Conversion Date: (1) the number of shares of Common Stock at the time authorized, unissued and unreserved for all purposes, or held as treasury stock, is insufficient to pay interest hereunder in shares of Common Stock; (2) the Underlying Shares issuable for such conversion (including any interest payable in shares) (x) are not registered for resale pursuant to an effective Underlying Shares Registration Statement and (y) may not be sold without volume restrictions pursuant to Rule 144(k) promulgated under the Securities Act (as defined in Section 6); (3) the Common Stock is not listed or quoted for trading on the OTC or on a Subsequent Market; (4) the Company has failed to timely satisfy its conversion obligations hereunder; or (5) the issuance of such shares of Common Stock would result in a violation of Sections 4(a)(ii), then, the Company may not pay interest in kind and must pay interest in cash by delivering, within three Trading Days of each applicable Conversion Date, an amount in cash equal to the product of (a) the outstanding principal amount of the Debentures to be converted on such Conversion Date and (b) the product of (x) the quotient obtained by dividing .12 by 360 and (y) the number of days for which such principal amount was outstanding. (C) This Debenture shall be convertible into shares of Common Stock at the option of the Holder, in whole or in part at any time and from time to time, after the Original Issue Date (subject to the limitations on conversion set forth in Section 4(a)(ii) hereof). The Holder shall effect conversions by delivering to the Company a completed notice substantially in the form attached hereto as Exhibit A (a "Conversion Notice"). The Conversion Notice shall set forth the remaining principal amount of this Debenture and all accrued and unpaid interest thereon subsequent to the conversion at issue. The date on which a Conversion Notice is delivered is the "Conversion Date." Unless the Holder is converting the entire principal amount outstanding under this Debenture, the Holder is not be required to physically surrender issue any fractional shares in connection with any conversion pursuant to this Debenture Article 11. In the event that any Purchaser shall exercise the Convertible Notes held by it with respect to less than the entire aggregate principal amount outstanding of such Convertible Notes held by such Purchaser, the Company shall, or shall direct its transfer agent to, issue to such Purchaser certificates for the Shares of Common Stock for which such Convertible Note is being exercised in order such denominations as are required for delivery to effect conversions. Subject such Purchaser, and the Company shall, or shall direct its transfer agent to, thereupon deliver such certificates to Section 4(b)or in accordance with the instructions of such Purchaser, each Conversion Notice, once given, shall be irrevocable. Conversions hereunder shall have the effect of lowering the outstanding principal amount of this Debenture plus all accrued and unpaid interest thereon in an amount equal to the applicable conversion, which shall be evidenced by notations made in the Conversion Notice. The Holder and the Company shall maintain records showing issue to such Purchaser a new Convertible Note, duly executed by the Company, in form and substance identical to the Convertible Note surrendered by such Purchaser, for the balance of the aggregate principal amount converted and the date of such conversions. In the event of any dispute or discrepancy, the records of the Holder shall be controlling and determinative in the absence of manifest errorConvertible Notes that have not been so converted.

Conversion. (A) This Debenture shall be convertible into shares of Common Stock at the option of the Holder, in whole or in part at any time and from time to time, after the Original Issue Date (subject to the limitations on conversion set forth in Section 4(a)(ii) hereof). The number of shares of Common Stock issuable upon a conversion hereunder shall be determined by adding the sum of (i) the quotient obtained by dividing (x) the outstanding principal amount of this Debenture to be converted and (y) the Conversion Price (as defined herein), and (ii) the amount equal to (I) the product of (x) the outstanding principal amount of this Debenture to be converted and (y) the product of (1) the quotient obtained by dividing .12 by 360 and (2) the number of days for which such principal amount was outstanding, divided by (II) the Conversion Price on the Conversion Date, provided, that if the Company shall have timely elected to pay the interest due on a Conversion Date in cash pursuant Subject to the terms hereofand conditions of this Agreement, subsection (ii) the Investors shall not be used have the right to convert principal of their Convertible Loans into overseas shares of Cayman Co or equity interest in the calculation of Target Company based on the number of shares of Common Stock issuable upon a corresponding appraised value, in particular: 1.7.1 Investor 1 Note I conversion hereunder. (B) Notwithstanding anything to the contrary contained herein, if on any Conversion Date:and Investor 2 conversion (1) On the number of shares of Common Stock at fifth (5th) day immediately after the time authorized, unissued and unreserved for all purposes, or held as treasury stock, is insufficient following conditions precedent (the “Offshore Automatic Conversion Conditions”) applicable to pay interest hereunder in shares of Common Stock; an Investor (the condition precedent (c) below not applicable to Investor 2) are fully satisfied or waived by such Investor in writing (the Underlying Shares issuable for such conversion conditions precedent (including any interest payable a) to (c) below applicable with respect to Investor 1; and the conditions precedent (a) to (b) below applicable with respect to Investor 2) and the Offshore Automatic Conversion Conditions are waived jointly by the Investor and the Target Company (applicable to the condition precedent set out in shares(d) (xbelow) are not registered for resale pursuant to an effective Underlying Shares Registration Statement and (y) may not be sold without volume restrictions pursuant to Rule 144(k) promulgated under the Securities Act (as defined in Section 6); (3) the Common Stock is not listed or quoted for trading on the OTC or on a Subsequent Market; any such other date as the Investor and the Target Company agree upon in writing (4) the Company has failed to timely satisfy its conversion obligations hereunder; or (5) the issuance of such shares of Common Stock would result in a violation of Sections 4(a)(ii“Automatic Conversion Date”), then, the Company may not pay interest in kind and must pay interest in cash by delivering, within three Trading Days of each applicable Conversion Date, an amount in cash equal to the product of (a) the outstanding principal amount of Investor 1 Note equivalent to thirty million Chinese yuan (RMB30,000,000) (the Debentures “Investor 1 Note I”) shall be automatically converted into the corresponding number of series B+ preferred shares of Cayman Co (the “Overseas Shares I of Investor 1”) on basis that then fully-diluted pre-money valuation of Cayman Co is RMB900,000,000 (“Pre-money Valuation of Investor 1 Conversion I”, and for the avoidance of doubt, the calculation of such fully-diluted pre-money valuation shall include the incentive shares/options (including the First Tranche Reserved Incentive Shares (as defined below), but for the avoidance of doubt, excluding the Reserved Incentive Shares II (as defined below)) reserved, issued and enlarged by Cayman Co under the Restructuring Framework Agreement, and ordinary shares issued by Cayman Co to be converted on such Conversion Date the Founders or their wholly-owned holding entity or trust established by them); and (b) the product of (x) Investor 2 Note shall be automatically converted into the quotient obtained by dividing .12 by 360 and (y) the corresponding number of series B+ preferred shares of Cayman Co (the “Overseas Shares of Investor 2”, together with Overseas Shares I of Investor 1, collectively the “First Tranche Overseas Shares”; and the corresponding conversions collectively referred to as the “Offshore Automatic Conversion” ) on basis that the then fully-diluted pre-money valuation of Cayman Co is RMB1,000,000,000 (for the avoidance of doubt, the calculation of such fully-diluted pre-money valuation shall include the incentive shares/options (including the First Tranche Reserved Incentive Shares (as defined below), but for the avoidance of doubt, excluding the Reserved Incentive Shares II (as defined below)) reserved, issued and enlarged by Cayman Co under the Restructuring Framework Agreement, and ordinary shares issued by Cayman Co to the Founders or their wholly-owned holding entity or trust established by them). Cayman Co shall issue the First Tranche Overseas Shares to the aforementioned Investors (or their designated affiliates) on the Automatic Conversion Date, and shall provide those Investors with a scanned copy of the register of members, which shall specify such Investors (or their designated affiliates) as the holders of the corresponding First Tranche Overseas Shares and shall be certified by the registered office provider of Cayman Co, and shall also provide a scanned copy of the share certificate duly executed and affixed with the common seal of Cayman Co (the original share certificate shall be provided to the aforementioned Investors within fifteen (15) days after the Automatic Conversion Date): (a) pursuant to the Restructuring Framework Agreement, the Group has completed the Red Chip Restructuring and Cayman Co has completed the reservation of 150,000,000 ordinary shares (corresponding to the equity interest in the Target Company held in China by X-Charge Management as of the execution date of this Agreement, which, together with the Reserved Incentive Shares I (as defined below), are referred to as the “First Tranche Reserved Incentive Shares”); and no circumstance specified in paragraph 5.4.3 hereof occur; (b) Cayman Co, all of its then shareholders (including all existing shareholders of the Target Company other than X-Charge Management or its designated overseas affiliates), the Investors (or their designated affiliates), and the Offshore Investors (or their designated affiliates) have executed the Amended and Restated Investors' Rights Agreement of Cayman Co and the general meeting of Cayman Co has duly resolved to pass the Amended and Restated Memorandum and Articles, provided that these two documents shall reflect that the shareholders’ rights are substantially identical to the rights of the Investors in the Target Company under the Transition Agreement (including the rights of the Convertible Loan Investor and rights of shareholders (if applicable)), and shall include the shareholders’ rights such as registration right and conversion right which are customary for overseas entities, and these two documents have been provided to the Investors; (c) with respect to Investor 1, a scanned copy of the register of members of Cayman Co as certified by the registered office provider of Cayman Co have been submitted to Investor 1, which shall show that one (1) director nominated by Investor 1 (or its designated affiliate) has been appointed as a director of Cayman Co, and Cayman Co has executed the director indemnification agreement to be signed by Cayman Co, Investor 1 (or its designated affiliate) and the director appointed by Investor 1 (or its designated affiliate), and such principal amount was outstandingdocuments have been provided to Investor 1; and (d) with respect to each Investor, the Investor has completed the ODI formalities in relation to its subscription for the corresponding First Tranche Overseas Shares in accordance with applicable laws, unless the Investor designates its affiliate to subscribe for the corresponding First Tranche Overseas Shares and such affiliate has completed all the required formalities in accordance with applicable laws (if any) in relation to its subscription for such First Tranche Overseas Shares. (C2) This Debenture In the event that (a) the Group Company has completed the Red Chip Restructuring, but the Offshore Automatic Conversion Conditions are not fully satisfied prior to the expiry of the Convertible Loan Term due to the failure of Cayman Co or the Target Company to fulfill conditions set forth in points (a) to (c) of paragraph 1.7.1 (1) hereof (if applicable), and such Offshore Automatic Conversion Conditions have not been waived by the Investor in writing; or (b) the Group has not completed the Red Chip Restructuring prior to the expiry of the Convertible Loan Term, then: (i) Investor 1 has the right (but is not obliged) to request to convert the outstanding principal of Investor 1 Note I into equity in the Target Company on the basis that the pre-money valuation of Investor 1 Conversion I represents the pre-money valuation of the Target Company (the “Investor 1 Onshore Conversion I”), (ii) Investor 2 shall have the right (but not be obliged) to request to convert the outstanding principal of Investor 2 Note into equity in the Target Company on basis that the pre-money valuation of the Target Company is RMB 1,000,000,000 (the “Investor 2 Onshore Conversion”, together with Investor 1 Onshore Conversion I, collectively the “First Tranche Onshore Conversion”), and the Target Company shall register such Investor as a shareholder with respect to the aforesaid equity interest in its register of members on the date of receipt of such notice, cause the relevant documents such as the shareholders’ agreement and articles of association of the Target Company to be amended to reflect the foregoing arrangements, and shall, within thirty (30) business days thereafter, complete the registration and filing formalities with its competent company registration authority in connection with the aforementioned onshore conversion and the appointment of a directors by Investor 1. (3) For the avoidance of doubt, if, prior to the occurrence of an Offshore Automatic Conversion, the conversion unit price of the Convertible Loan to which the First Tranche Onshore Conversion is related is changed to the adjusted unit price of the investment contemplated hereunder pursuant to paragraph 5.8.3 of the Transition Agreement, the conversion unit price for the Offshore Automatic Conversion shall be convertible adjusted accordingly pursuant to Article 5.8 of the Transition Agreement so that the corresponding Investors are entitled to anti-dilution protection at Cayman Co level substantially identical to that at the Target Company level. 1.7.2 Investor 1 Note II conversion (1) Within fifteen (15) business days after all of the following conditions (the “Offshore Optional Conversion Conditions”) are satisfied or waived by Investor 1 in writing (applicable to the conditions precedent (a) to (b) below) and jointly waived by Investor 1 and the Target Company (applicable to the condition precedent (c) below) (or such later period as Investor 1 and the Target Company shall then otherwise agree) (the “Offshore Optional Conversion Time Limit”), Investor 1 has the right (but is not the obliged) to give a written notice to Cayman Co (the “Offshore Optional Conversion Notice”) requiring the conversion of the remaining notes (corresponding to the principal amount of the Convertible Loan of twenty million Chinese yuan (RMB 20,000,000), the “Investor 1 Note II”) into a corresponding number of series B + preference shares of Common Stock Cayman Co at the option conversion unit price of the HolderOverseas Share II of Investor 1. Notwithstanding the foregoing, if, prior to the occurrence of the Offshore Optional Conversion, a new round of financing occurs to Cayman Co, in whole which the unit price per additional share is lower than the conversion unit price of the Overseas Share II of Investor 1 calculated on basis that the consolidated pre-money valuation (see the calculation formula below) is equal to RMB1 billion (except for the Red Chip Restructuring as agreed under the Restructuring Framework Agreement and the conversion following provision of loan by the Offshore Co-investors to the Group Company under this Agreement and the Offshore Co-investor Note Agreement, the “New Financing of Cayman Co”), Investor 1 has the right to request converting Investor 1 Note II into the corresponding number of the preferred share class issued under the New Financing of Cayman Co whenever Investor 1 conducts the Offshore Optional Conversion at the conversion unit price of the Overseas Share II of Investor 1 defined in the point (b) of paragraph 1.7.2(2) in accordance with paragraph 1.7.2(2) (the aforesaid conversion shares referred to as “Overseas Share II of Investor 1”, and together with the First Tranche Overseas Shares, collectively or individually “Overseas Share”; and these conversions referred to as “Offshore Optional Conversion”, and together with Offshore Automatic Conversion, collectively or individually “Offshore Conversion”): (a) Offshore Automatic Conversion has occurred, and Investor 1 (or its designated affiliate) has been registered as the holder of the relevant First Tranche Overseas Shares in part at any time the register of members of Cayman Co; (b) The Group has submitted to the Investor the consolidated financial statements of the Group for the one (1) month immediately before the date of automatic conversion and the key operation data of the Group as set out in Exhibit V. If there is a material adjustment to the Principal Business of the Group, Investor 1 shall have the right to request the Group to update the key operation data set out in Exhibit V from time to time; and (c) Investor 1 has completed the ODI formalities in relation to its subscription for Overseas Shares II of Investor 1 in accordance with the applicable laws, after unless Investor 1 designates its affiliate recognized by the Original Issue Date Target Company to subscribe for Overseas Shares II of Investor 1 and such affiliate has completed all required formalities (subject to if any) for such subscription in accordance with applicable laws. (2) For the limitations on conversion set forth in Section 4(a)(ii) hereof). The Holder shall effect conversions by delivering to the Company a completed notice substantially in the form attached hereto as Exhibit A (a "Conversion Notice"). The Conversion Notice shall set forth the remaining principal amount purposes of this Debenture and all accrued and unpaid interest thereon subsequent to Agreement, the “Conversion Unit Price of Overseas Shares II of Investor 1” means: (a) the conversion at issue. The date on which unit price per Overseas Shares II of Investor 1 that is such calculated that the consolidated pre-money valuation under two investments made by Investor 1 constituting the Offshore Automatic Conversion and Offshore Optional Conversion (see calculation formula below); or (b) 90% of unit price per share under a Conversion Notice New Financing of Cayman Co if such new financing occurs prior to or concurrently with the Offshore Conversion, whichever is delivered is the "Conversion Datelower." Unless the Holder is converting the entire principal amount outstanding under this Debenture, the Holder is not be required to physically surrender this Debenture to the Company in order to effect conversions. Subject to Section 4(b), each Conversion Notice, once given, shall be irrevocable. Conversions hereunder shall have the effect of lowering the outstanding principal amount of this Debenture plus all accrued and unpaid interest thereon in an amount equal to the applicable conversion, which shall be evidenced by notations made in the Conversion Notice. The Holder and the Company shall maintain records showing the principal amount converted and the date of such conversions. In the event of any dispute or discrepancy, the records of the Holder shall be controlling and determinative in the absence of manifest error.

Conversion. (A) This Debenture 5.1. At any time prior to the repayment in full of the Secured Amount, the Lead Lender shall be convertible entitled, at its sole and absolute discretion, by written notice to the Company, to demand (such demand shall bind and shall apply to all the Lender(s)), to convert the entire Secured Amount into shares of Common Stock at the option Ordinary Shares, par value NIS 0.1 each, of the HolderCompany (the “Ordinary Shares”), at a price per share equal to the lower of (a) US $0.20 (twenty US cents) per share (subject to appropriate adjustment in the event of any bonus shares, combinations or splits) and (b) a price per share reflecting a discount to the average closing bid price of an Ordinary Share over the twenty (20) trading days preceding the Initial Closing (the “Benchmark Price”) as follows: a) If conversion occurs no later than three (3) months after the Initial Closing, the discount shall be 20% (twenty percent) of the Benchmark Price; b) If conversion occurs more than three (3) months but no later than six (6) months after the Initial Closing, the discount shall be 30% (thirty percent) of the Benchmark Price; c) If conversion occurs more than six (6) months after the Initial Closing (to the extent extended in accordance with the terms hereof), the discount shall be 50% (fifty percent) of the Benchmark Price; and d) If conversion occurs upon an Event of Default (as defined below), the discount shall be 50% (fifty percent) of the Benchmark Price. 5.2. For the avoidance of any doubt and notwithstanding any other provision herein, other than being subject to Section 5.3, in any event in which the Company intends or is obligated to repay the Secured Amount, in whole or in part, in cash, under the terms hereof, the Company shall notify the Lead Lender of such intended repayment no less than ten (10) business days prior to any actual repayment, to allow the Lead Lender to demand conversion of the respective amount, or any part at any time and from time thereof, into Ordinary Shares pursuant to time, after Section 5.1 above. To the Original Issue Date extent that the repayment in cash is expected to be performed in connection with the completion or consummation of a Disposition or a Corporate Transaction (subject to Section 5.3), the limitations on conversion set forth in Section 4(a)(ii) hereof). The number of shares of Common Stock issuable upon Lead Lender shall be so advised and shall be entitled to provide a conversion hereunder notice that is contingent upon such completion or consummation. 5.3. This Section ‎5 shall be determined enter into effect only upon approval thereof by adding the sum shareholders of the Company in accordance with the requirements of the Companies Law, which approval shall apply to a controlling shareholder transaction that includes a private offering that may increase the holdings of a controlling shareholder to and above 45% (iforty five percent) of the quotient obtained by dividing share capital of the Company (x) the outstanding principal amount of this Debenture to be converted and (y) the Conversion Price (as defined hereina “Shareholders’ Approval”), and (ii) the amount equal to (I) the product of (x) the outstanding principal amount of except for this Debenture to be converted and (y) the product of (1) the quotient obtained by dividing .12 by 360 and (2) the number of days for which such principal amount was outstanding, divided by (II) the Conversion Price on the Conversion Date, provided, that if the Company shall have timely elected to pay the interest due on a Conversion Date in cash pursuant to the terms hereof, subsection (iiSection 5.3) shall not be used in the calculation deemed of the number of shares of Common Stock issuable upon a conversion hereunder. (B) Notwithstanding anything to the contrary contained herein, if on any Conversion Date: (1) the number of shares of Common Stock at the time authorized, unissued and unreserved for all purposes, no force or held as treasury stock, is insufficient to pay interest hereunder in shares of Common Stock; (2) the Underlying Shares issuable for such conversion (including any interest payable in shares) (x) are not registered for resale pursuant to an effective Underlying Shares Registration Statement and (y) may not be sold without volume restrictions pursuant to Rule 144(k) promulgated under the Securities Act (as defined in Section 6); (3) the Common Stock is not listed or quoted for trading on the OTC or on a Subsequent Market; (4) the Company has failed to timely satisfy its conversion obligations hereunder; or (5) the issuance of such shares of Common Stock would result in a violation of Sections 4(a)(ii), then, the Company may not pay interest in kind and must pay interest in cash by delivering, within three Trading Days of each applicable Conversion Date, an amount in cash equal to the product of (a) the outstanding principal amount of the Debentures to be converted on such Conversion Date and (b) the product of (x) the quotient obtained by dividing .12 by 360 and (y) the number of days for which such principal amount was outstanding. (C) This Debenture shall be convertible into shares of Common Stock at the option of the Holder, in whole or in part effect at any time and from time prior to timeobtaining such Shareholders’ Approval, after the Original Issue Date (subject to the limitations on conversion set forth in Section 4(a)(ii) hereof)if at all. The Holder shall effect conversions by delivering to the Company a completed notice substantially in the form attached hereto as Exhibit A (a "Conversion Notice"). The Conversion Notice shall set forth the remaining principal amount of this Debenture and all accrued and unpaid interest thereon subsequent to the conversion at issue. The date on which a Conversion Notice is delivered is the "Conversion Date." Unless the Holder is converting the entire principal amount outstanding under this Debenture, the Holder is not be required to physically surrender this Debenture to the Company in order to effect conversions. Subject to Section 4(b), each Conversion Notice, once given, shall be irrevocable. Conversions hereunder shall have the effect of lowering the outstanding principal amount of this Debenture plus all accrued and unpaid interest thereon in an amount equal to the applicable conversion, which shall be evidenced by notations made in the Conversion Notice. The Holder and the Company shall maintain records showing act to convene a shareholders meeting to obtain the principal amount converted and Shareholders’ Approval as soon as possible following the date of such conversions. In execution hereof, but in any event no later than fifty (50) days following the event of any dispute or discrepancy, the records of the Holder shall be controlling and determinative in the absence of manifest errorInitial Closing.

Conversion. (A) This Debenture shall be convertible ABC hereby converts $________ of the AmeriNet Debt into shares of Common Stock AmeriNet unregistered Preferred Stock, at a conversion price of $_____ per share, the option transaction being effected without registration under the Securities Act or the Florida Act, based on the exemption from registration provided by Section 4(6) of the Holder, in whole or in part at any time Securities Act and from time to time, after the Original Issue Date (subject to the limitations on conversion set forth in Section 4(a)(ii517.061(11) hereof). The number of shares of Common Stock issuable upon a conversion hereunder shall be determined by adding the sum of (i) the quotient obtained by dividing (x) the outstanding principal amount of this Debenture to be converted and (y) the Conversion Price (as defined herein), and (ii) the amount equal to (I) the product of (x) the outstanding principal amount of this Debenture to be converted and (y) the product of (1) the quotient obtained by dividing .12 by 360 and (2) the number of days for which such principal amount was outstanding, divided by (II) the Conversion Price on the Conversion Date, provided, that if the Company shall have timely elected to pay the interest due on a Conversion Date in cash pursuant to the terms hereof, subsection (ii) shall not be used in the calculation of the number of shares of Common Stock issuable upon a conversion hereunderFlorida Act. (B) Notwithstanding anything In consideration for ABC' conversion of the AmeriNet Debt, AmeriNet hereby agrees to issue to ABC the contrary contained herein____ shares of AmeriNet' Preferred Stock subscribed for hereby. (C) As a material inducement to AmeriNet's consideration of ABC' offer to convert AmeriNet Debts into the ABC' shares, if on any Conversion DateABC represents, warrants and covenants to AmeriNet, as follows: (1) ABC is familiar with the number requirements for treatment as an "accredited investor" under Regulation D and Section 4(6) of shares the Securities Act and meets one or more of Common Stock at the time authorizeddefinitions of an "accredited investor" contained in Rule 501(a) promulgated under authority of Securities Act and has, unissued alone or together with its advisors or representatives, if any, such knowledge and unreserved for all purposesexperience in financial matters that ABC is capable of evaluating the relative risks and merits of this subscription, or held as treasury stockthe text of Rule 501(a) being set forth, is insufficient to pay interest hereunder in shares of Common Stockfull, above; (2) ABC acknowledges that it has, based on its own substantial experience, the Underlying Shares issuable ability to evaluate the transactions contemplated hereby and the merits and risks thereof in general and the suitability of the transaction for such conversion (including any interest payable it in shares) (x) are not registered for resale pursuant to an effective Underlying Shares Registration Statement and (y) may not be sold without volume restrictions pursuant to Rule 144(k) promulgated under the Securities Act (as defined in Section 6)particular; (3a) ABC understands that the Common offer and issuance of AmeriNet Stock is not listed or quoted for trading being made in reliance on ABC's representation that it has reviewed AmeriNet's Exchange Act Reports and, has become familiar with the OTC or on a Subsequent Marketinformation disclosed therein, including that contained in exhibits filed therewith. (b) ABC is fully aware of the material risks associated with becoming an investor in AmeriNet and confirms that it was previously informed that all documents, records and books pertaining to this investment have been available from AmeriNet and that all documents, records and books pertaining to this transaction requested by it have been made available to it; (4) ABC has had an opportunity to ask questions of and receive answers from the Company has failed to timely satisfy its conversion obligations hereunder; orofficers of AmeriNet concerning the terms and conditions of this Agreement and the transactions contemplated hereby, as well as the affairs of AmeriNet and related matters; (5) ABC has had an opportunity to obtain additional information necessary to verify the accuracy of the information referred to in subparagraphs (a), (b), (c) and (d) hereof, as well as to supplement the information in the Exchange Act Reports; (6) ABC has represented to AmeriNet that it has the general ability to bear the risks of the subject trans action and that it is a suitable investor for a private offering and ABC hereby affirms the correctness of such information to AmeriNet, including, without limitation, the representations in the form of the investment letter annexed hereto and made a part hereof as exhibit 3(D)(6); (7) ABC acknowledges and is aware that: (a) The AmeriNet Stock is a speculative investment with no assurance that AmeriNet will be successful, or if successful, that such success will result in payments to ABC or to realization of capital gains by ABC on disposition of the AmeriNet Stock; and (b) The AmeriNet Stock to be issued to it has not been registered under the Securities Act or under any state securities laws, accordingly ABC may have to hold such Preferred Stock and may not be able to liquidate, pledge, hypothecate, assign or transfer it; (8) ABC has obtained its own opinion from its legal counsel to the effect that after an examination of the transactions associated herewith and the applicable law, no action needs to be taken by either ABC or AmeriNet in conjunction with this Agreement and the issuance of the AmeriNet Stock in conjunction therewith, other than such shares actions as have already been taken in order to comply with the securities law requirements of Common Stock would result ABC' state of domicile, including the safe harbor provided in a violation of Sections 4(a)(ii), then, conjunction with compliance with the Company may not pay interest in kind and must pay interest in cash by delivering, within three Trading Days of each applicable Conversion Date, an amount in cash equal to the product of Florida Rule; and (9) (a) The certificates for the outstanding principal amount AmeriNet Stock will bear restrictive legends and AmeriNet's transfer agent will be instructed not to transfer the subject securities unless they have been registered pursuant to Section 6 of the Debentures Securities Act or an opinion of counsel to be converted on such Conversion Date ABC satisfactory to legal counsel to AmeriNet and (b) the product of (x) the quotient obtained by dividing .12 by 360 and (y) the number of days for which such principal amount was outstanding. (C) This Debenture shall be convertible into shares of Common Stock at the option of the HolderAmeriNet's president has been provided, in whole or in part at any time and from time to time, after the Original Issue Date (subject to the limitations on conversion set forth in Section 4(a)(ii) hereof). The Holder shall effect conversions that the proposed transaction is exempt from registration requirements imposed by delivering to the Company a completed notice substantially in the form attached hereto as Exhibit A (a "Conversion Notice"). The Conversion Notice shall set forth the remaining principal amount of this Debenture and all accrued and unpaid interest thereon subsequent to the conversion at issue. The date on which a Conversion Notice is delivered is the "Conversion Date." Unless the Holder is converting the entire principal amount outstanding under this DebentureSecurities Act, the Holder is not be required to physically surrender this Debenture to the Company in order to effect conversions. Subject to Section 4(b), each Conversion Notice, once given, shall be irrevocable. Conversions hereunder shall have the effect of lowering the outstanding principal amount of this Debenture plus all accrued Exchange Act and unpaid interest thereon in an amount equal to the any applicable conversion, which shall be evidenced by notations made in the Conversion Notice. The Holder and the Company shall maintain records showing the principal amount converted and the date of such conversions. In the event of any dispute state or discrepancy, the records of the Holder shall be controlling and determinative in the absence of manifest errorforeign laws.

Conversion. Each Investor participating in the Offer shall, immediately upon execution of this Agreement and prior to the close of business on the business day immediately prior to any exercise of the underwriters' over-allotment option in the Offering (A) This Debenture shall each such exercise of the over-allotment option, the "Over-Allotment"), as applicable, deliver to the Custodian the certificate or certificates for the Series B Stock to be convertible converted into shares of Common Stock at and sold in the option Offering or the Over-Allotment, as applicable, duly endorsed, together with written notice stating that such Investor elects to convert such Series B Stock, all in compliance with Section 6(a)(i)(A) of the Holder, in whole or in part at any time Certificate of Designations (each such delivery of certificates and from time to time, after the Original Issue Date (subject to the limitations on conversion set forth in Section 4(a)(ii) hereof). The number of shares of Common Stock issuable upon a conversion hereunder shall be determined by adding the sum of (i) the quotient obtained by dividing (x) the outstanding principal amount of this Debenture to be converted and (y) the Conversion Price (as defined herein), and (ii) the amount equal to (I) the product of (x) the outstanding principal amount of this Debenture to be converted and (y) the product of (1) the quotient obtained by dividing .12 by 360 and (2) the number of days for which such principal amount was outstanding, divided by (II) the Conversion Price on the Conversion Date, provided, that if the Company shall have timely elected to pay the interest due on a Conversion Date in cash pursuant to the terms hereof, subsection (ii) shall not be used in the calculation of the number of shares of Common Stock issuable upon a conversion hereunder. (B) Notwithstanding anything to the contrary contained herein, if on any Conversion Date: (1) the number of shares of Common Stock at the time authorized, unissued and unreserved for all purposes, or held as treasury stock, is insufficient to pay interest hereunder in shares of Common Stock; (2) the Underlying Shares issuable for such conversion (including any interest payable in shares) (x) are not registered for resale pursuant to an effective Underlying Shares Registration Statement and (y) may not be sold without volume restrictions pursuant to Rule 144(k) promulgated under the Securities Act (as defined in Section 6); (3) the Common Stock is not listed or quoted for trading on the OTC or on a Subsequent Market; (4) the Company has failed to timely satisfy its conversion obligations hereunder; or (5) the issuance of such shares of Common Stock would result in a violation of Sections 4(a)(ii), thennotice, the Company may not pay interest in kind and must pay interest in cash by delivering, within three Trading Days of each applicable Conversion Date, an amount in cash equal to the product of (a) the outstanding principal amount of the Debentures to be converted on such Conversion Date and (b) the product of (x) the quotient obtained by dividing .12 by 360 and (y) the number of days for which such principal amount was outstanding. (C) This Debenture shall be convertible into shares of Common Stock at the option of the Holder, in whole or in part at any time and from time to time, after the Original Issue Date (subject to the limitations on conversion set forth in Section 4(a)(ii) hereof). The Holder shall effect conversions by delivering to the Company a completed notice substantially in the form attached hereto as Exhibit A (a "Conversion Notice"). The , and shall instruct the Custodian to deliver the Conversion Notice to the Company immediately upon receipt; provided, however, that no shares of Series B Stock delivered to the Custodian shall be deemed surrendered by such Investor, or converted into shares of Common Stock, until immediately prior to the close of business on the day immediately prior to the day on which the Offering or the Over-Allotment, as applicable, is consummated; and provided further, however, that if the underwriting agreement in connection with the Offering (the "Underwriting Agreement") is terminated, and the Offering or the Over-Allotment, as applicable, has not been consummated with respect to all of the shares of Common Stock proposed to be sold in the Offering and the Over-Allotment prior to the date of termination, (a) the surrender and conversion of the shares of Series B Stock subject to the Conversion Notice shall set forth the remaining principal amount of this Debenture be deemed null and all accrued and unpaid interest thereon subsequent void to the conversion at issue. The date on which a Conversion Notice is delivered is extent the "Conversion Date." Unless underlying shares of Common Stock have not been sold in the Holder is converting Offering or the entire principal amount outstanding under this DebentureOver-Allotment, as applicable (b) the Holder is not be required to physically surrender this Debenture parties hereto will deem the Offering or the Over-Allotment, as applicable, withdrawn to the Company in order to effect conversions. Subject to Section 4(b), each Conversion Notice, once given, shall be irrevocable. Conversions hereunder shall extent that such underlying shares of Common Stock have the effect of lowering the outstanding principal amount of this Debenture plus all accrued and unpaid interest thereon in an amount equal to the applicable conversion, which shall be evidenced by notations made not been sold in the Conversion Notice. The Holder Offering or the Over-Allotment, as applicable, and (c) the Company shall maintain records showing return to the principal amount converted and appropriate Investor any certificate or certificates , or issue replacement certificates, representing shares of Series B Stock for which the date underlying shares of such conversions. In the event of any dispute or discrepancy, the records of the Holder shall be controlling and determinative Common Stock were not sold in the absence of manifest errorOffering or the Over-Allotment, as applicable.

Conversion. (A) This 5.1. The holder of this Debenture shall be convertible have the right, at its option (the "Conversion Option"), at any time within not more than twenty (20) days, or less than ten (10) days, prior to the earliest to occur of the Maturity Date or the Prepayment Date, to convert, in whole but not in part, the principal amount of this Debenture, together with accrued unpaid interest thereon, outstanding at the close of business on the date Payor receives notice of such holder's exercise of the Conversion Option, into fully paid and nonassessable shares of Common Stock Stock, par value $.01 per share (the "Conversion Shares"), at the option of the Holdera conversion price per Conversion Share equal to $0.50, in whole or in part at any time and as such price may be adjusted from time to timetime in accordance with the provisions of this Section 5 (the "Conversion Price"), after such that the Original Issue Date (subject to the limitations on conversion set forth in Section 4(a)(ii) hereof). The number of shares of Common Stock issuable Conversion Shares obtained upon a conversion hereunder shall be determined by adding dividing the then Conversion Price into the sum of (i) the quotient obtained by dividing (x) then outstanding principal amount of, and accrued unpaid interest on, this Debenture. 5.2. To exercise the outstanding Conversion Option, the holder hereof shall give written notice to Payor that it elects to convert the principal amount of this Debenture to be converted and Debenture, together with accrued unpaid interest thereon, into Conversion Shares in accordance with the provisions of Section 5.1 above (y) the Conversion Price (as defined herein), and (ii) the amount equal to (I) the product of (x) the outstanding principal amount of this Debenture to be converted and (y) the product of (1) the quotient obtained by dividing .12 by 360 and (2) the number of days for which such principal amount was outstanding, divided by (II) the Conversion Price on the Conversion Date, provided, that if the Company shall have timely elected to pay the interest due on a Conversion Date in cash pursuant to the terms hereof, subsection (ii) shall not be used in the calculation of the number of shares of Common Stock issuable upon a conversion hereunder. (B) Notwithstanding anything to the contrary contained herein, if on any Conversion Date: (1) the number of shares of Common Stock at the time authorized, unissued and unreserved for all purposes, or held as treasury stock, is insufficient to pay interest hereunder in shares of Common Stock; (2) the Underlying Shares issuable for such conversion (including any interest payable in shares) (x) are not registered for resale pursuant to an effective Underlying Shares Registration Statement and (y) may not be sold without volume restrictions pursuant to Rule 144(k) promulgated under the Securities Act (as defined in Section 6); (3) the Common Stock is not listed or quoted for trading on the OTC or on a Subsequent Market; (4) the Company has failed to timely satisfy its conversion obligations hereunder; or (5) the issuance of such shares of Common Stock would result in a violation of Sections 4(a)(ii), then, the Company may not pay interest in kind and must pay interest in cash by delivering, within three Trading Days of each applicable Conversion Date, an amount in cash equal to the product of (a) the outstanding principal amount of the Debentures to be converted on such Conversion Date and (b) the product of (x) the quotient obtained by dividing .12 by 360 and (y) the number of days for which such principal amount was outstanding. (C) This Debenture shall be convertible into shares of Common Stock at the option of the Holder, in whole or in part at any time and from time to time, after the Original Issue Date (subject to the limitations on conversion set forth in Section 4(a)(ii) hereof). The Holder shall effect conversions by delivering to the Company a completed notice substantially in the form attached hereto as Exhibit A (a "Conversion Notice"). The Conversion Notice shall set forth specify the remaining name or names in which the holder wishes the certificates for the Conversion Shares to be registered, together with the address or addresses of the persons so named, provided such Conversion Shares may not be registered in the name of a person or persons other than the holder of this Debenture unless the Debenture, when surrendered for conversion, is accompanied by (i) instruments of transfer in form reasonably satisfactory to Payor, duly executed by the holder hereof and (ii) if requested by ▇▇▇▇▇, an instrument executed by such other person, in form reasonably satisfactory to Payor, representing that the Conversion Shares are being acquired for investment and not with a view to distribution within the meaning of the Securities Act of 1933, as amended. 5.3. Promptly after the delivery of the Conversion Notice to Payor, Payor shall cause to be delivered to the holder and/or the holder's designees certificates representing the number of Conversion Shares into which this Debenture is being converted and a cash adjustment in respect of any fraction of a Conversion Share to which the holder shall be entitled. No fractional Conversion Shares will be issued, but an amount of cash equal to the product of the fraction of a Conversion Share which would otherwise be issuable upon the surrender of this Debenture for conversion multiplied by the then existing Conversion Price per Conversion Share will be paid to the holder upon such conversion. Conversion of this Debenture shall be deemed to have been made at the close of business on the date the Conversion Notice is delivered to Payor (the "Conversion Date"), so that interest shall not accrue from and after such date on the principal amount of this Debenture converted and the person or persons entitled to receive Conversion Shares upon such conversion shall be treated for all accrued purposes as having been the record holder or holders thereof at such time and unpaid interest thereon subsequent such conversion shall be at the Conversion Price in effect at such time. The issuance of certificates for Conversion Shares upon conversion of this Debenture shall be made without charge to the conversion at issueholder of this Debenture for any tax in respect of the issuance of such certificates; provided, however, that Payor shall not be required to pay any tax which may be payable in respect of any transfer involved in the issuance and delivery of any such certificates in a name other than that of the Payee and Payor shall not be required to issue or deliver such certificates unless or until the person or persons requesting the issuance thereof shall have paid to Payor the amount of such tax or shall have established to the satisfaction of Payor that such tax has been paid. Upon Payor's (i) delivery of the certificates for the Conversion Shares to the holder of this Debenture and/or its designees and (ii) payment of the cash adjustment, if any, due to the holder of this Debenture pursuant to the terms of this Section 5, the holder of this Debenture shall surrender this Debenture to Payor. The date Certificates representing the Conversion Shares shall be executed on which a Conversion Notice is delivered is behalf of Payor by the manual or facsimile signature of those officers required to sign such certificates under applicable law, and shall bear legends substantially similar to the following: "The securities represented by this certificate and/or the securities issuable upon exercise thereof have not been registered under the Securities Act of 1933, as amended (the "Act"), and may not be offered or sold except (i) pursuant to an effective registration statement under the Act, (ii) to the extent applicable, pursuant to Rule 144 under the Act (or any similar rule under such Act relating to the disposition of securities), or (iii) upon the delivery by the holder to the Company of an opinion of counsel, satisfactory to counsel to the Company, stating that an exemption from registration under such Act is available." 5.4. Payor shall at all times keep available out of its authorized but unissued shares of Common Stock, solely for effecting the conversion of this Debenture, the full number of whole Conversion Date." Unless the Holder is converting Shares then deliverable upon conversion of the entire principal amount outstanding under of this Debenture, and accrued unpaid interest thereon, at the Holder is not time outstanding. Payor shall take at all times such corporate action as shall be required to physically surrender this Debenture to the Company necessary in order that Payor may validly and legally issue fully paid and nonassessable shares of Common Stock in accordance with the provisions of this Section 5. 5.5. In the event Payor shall at any time after the date hereof pay a dividend in shares of Common Stock or make a distribution in shares of Common Stock, then upon such dividend or distribution, the Conversion Price in effect immediately prior to effect conversions. Subject to Section 4(b), each Conversion Notice, once given, such dividend or distribution shall be irrevocable. Conversions hereunder shall have the effect of lowering the outstanding principal amount of this Debenture plus all accrued and unpaid interest thereon in reduced to a price determined by dividing an amount equal to the applicable conversiontotal number of shares of Common Stock outstanding immediately prior to such dividend or distribution multiplied by the Conversion Price in effect immediately prior to such dividend or distribution, which by the total number of shares of Common Stock outstanding immediately after such issuance or sale. For purposes of any computation to be made in accordance with the provisions of this Section 5.5, the shares of Common Stock issuable by way of dividend or distribution shall be evidenced by notations made in deemed to have been issued immediately after the Conversion Notice. The Holder and the Company shall maintain records showing the principal amount converted and opening of business on the date following the date fixed for determination of shareholders entitled to receive such conversionsdividend or distribution. 5.6. In the event the Payor shall at any time subdivide or combine the outstanding shares of Common Stock, the Conversion Price shall forthwith be proportionately decreased in the case of subdivision or increased in the case of combination. 5.7. In the event the Payor shall, at any time or from time to time after the date hereof, issue any shares of Common Stock or other securities convertible into, or exchangeable or exercisable for, Common Stock, in each case other than Excluded Shares (as hereinafter defined), for no consideration or for a consideration per share less than the Conversion Price in effect immediately prior to the issuance of such Common Stock or other securities, the Conversion Price in effect immediately prior to each such issuance shall automatically be lowered to a price equal to the consideration per share received by the Payor upon such issuance. In the case of the issuance of Common Stock for a consideration in whole or part in property other than cash, the value of such property shall be deemed to be the fair market value of such property as determined in good faith by the Board of Directors of the Payor. As used herein, the term "Excluded Shares" shall mean (i) shares of Common Stock issued in connection with transactions described in Sections 5.5 and 5.6 hereof, (ii) shares of Common Stock issued upon the exercise or conversion of any dispute options, rights, warrants or discrepancyother securities outstanding on the date hereof, and (iii) shares of Common Stock issued to officers, directors or employees of, or consultants to, the records Payor pursuant to any agreement, plan or arrangement approved prior to the date hereof by the Board of Directors of the Holder shall be controlling and determinative in the absence of manifest errorPayor or a committee thereof authorized to give such approval.

Conversion. (A) This Debenture shall be convertible Subject to the best price guarantees and anti-dilutive rights set forth below, the TFST hereby agrees to immediately convert all of its Class A Bonds into shares of Colmena's Common Stock at the option of the HolderStock, in whole or accordance with their terms, which Colmena hereby represents will result in part at any time and from time to time, after the Original Issue Date (subject issuance to the limitations on conversion set forth in Section 4(a)(ii) hereof). The number of shares of Common Stock issuable upon a conversion hereunder shall be determined by adding the sum of (i) the quotient obtained by dividing (x) the outstanding principal amount of this Debenture to be converted and (y) the Conversion Price (as defined herein), and (ii) the amount equal to (I) the product of (x) the outstanding principal amount of this Debenture to be converted and (y) the product of (1) the quotient obtained by dividing .12 by 360 and (2) the number of days for which such principal amount was outstanding, divided by (II) the Conversion Price on the Conversion Date, provided, that if the Company shall have timely elected to pay the interest due on a Conversion Date in cash pursuant to the terms hereof, subsection (ii) shall not be used in the calculation TFST of the number of shares of Common Stock issuable upon Colmena's common stock set forth in Exhibit 2 (A) annexed hereto and made a part hereof, the conversion hereunderbeing effected without registration under the Securities Act or the Florida Act, based on the exemption from registration provided by Section 4(6) of the Securities Act and Section 517.061(11) of the Florida Act. (B) Notwithstanding anything Subject to the contrary contained hereinbest price guarantees and anti-dilutive rights set forth below, if on any Conversion Date: (1) the number of TFST hereby converts the Colmena Debt into shares of Common Stock at the time authorized, unissued and unreserved for all purposes, or held as treasury stock, is insufficient to pay interest hereunder in shares of Colmena Common Stock; , at a conversion price of $0.01 per share, as set forth below on Exhibit 2 (2) B), the Underlying Shares issuable for such conversion (including any interest payable in shares) (x) are not registered for resale pursuant to an effective Underlying Shares Registration Statement and (y) may not be sold transaction being effected without volume restrictions pursuant to Rule 144(k) promulgated registration under the Securities Act (as defined in Section 6); (3) or the Common Stock is not listed or quoted for trading Florida Act, based on the OTC or on a Subsequent Market; (4exemption from registration provided by Section 4(6) the Company has failed to timely satisfy its conversion obligations hereunder; or (5) the issuance of such shares of Common Stock would result in a violation of Sections 4(a)(ii), then, the Company may not pay interest in kind and must pay interest in cash by delivering, within three Trading Days of each applicable Conversion Date, an amount in cash equal to the product of (a) the outstanding principal amount of the Debentures to be converted on such Conversion Date Securities Act and (bSection 517.061(11) of the product of (x) the quotient obtained by dividing .12 by 360 and (y) the number of days for which such principal amount was outstandingFlorida Act. (C) This Debenture shall be convertible into shares of Common Stock at In consideration for the option agreement by the TFST to accelerated conversion of the Holder, in whole or in part at any time Class A Bonds and from time to time, after the Original Issue Date (subject to the limitations on conversion set forth in Section 4(a)(ii) hereof). The Holder shall effect conversions by delivering to the Company a completed notice substantially in the form attached hereto as Exhibit A (a "Conversion Notice"). The Conversion Notice shall set forth the remaining principal amount of this Debenture and all accrued and unpaid interest thereon subsequent to the conversion at issue. The date of the Colmena Debt to Colmena common stock, which will result in the issuance of a materially smaller quantity of Colmena common stock to the TFST than would have otherwise been issuable based on which current Colmena business plans, Colmena hereby irrevocably covenants and agrees, as a Conversion Notice is delivered is material inducement to the entry into this Agreement by the TFST, that all of the shares issuable to the TFST pursuant to the terms of this Agreement, including, without limitation, the shares to be issued in exchange for conversion of the Colmena Debt and to be issued on conversion of the Class A Bonds (the "Conversion Date." Unless the Holder is converting the entire principal amount outstanding under this Debenture, the Holder is not be required to physically surrender this Debenture to the Company in order to effect conversions. Subject to Section 4(bCovered Shares"), each Conversion Notice, once givenwhether or not then still owned by the TFST, shall be irrevocable. Conversions hereunder shall have increased by the effect issuance of lowering additional shares of Colmena common stock to the outstanding principal amount TFST, to reflect the issuance of any common stock or common stock purchase rights at a price of less than $0.01 per share (in cash or in the net tangible book value in accordance with GAAP of any assets or services paid therefor) during the 730 days following the execution of this Debenture plus all accrued and unpaid interest thereon in an amount equal to the applicable conversionAgreement, which shall be evidenced by notations made in the Conversion Notice. The Holder and the Company shall maintain records showing the principal amount converted and the date of such conversions. In the event of any dispute or discrepancy, the records of the Holder shall be controlling and determinative in the absence of manifest error.as follows:

Conversion. (Aa) Conversion at Option of Holder. (i) This Debenture shall be convertible into shares of Common Stock at the option of the Holder, in whole or in part at any time and from time to time, after the Original Issue Date (as defined in SECTION 5) (subject to the limitations on conversion set forth in Section 4(a)(iiSECTION 3(B) hereof). The number of shares of Common Stock issuable upon a conversion hereunder shall be determined by adding the sum of (i) equals the quotient obtained by dividing (x) the outstanding principal amount of this Debenture to be converted and by (y) the Conversion Price (as defined hereinin SECTION 3(C)(I), and ). The Obligor shall deliver Common Stock certificates to the Holder prior to the Fifth (ii5th) the amount equal to (I) the product of (x) the outstanding principal amount of this Debenture to be converted and (y) the product of (1) the quotient obtained by dividing .12 by 360 and (2) the number of days for which such principal amount was outstanding, divided by (II) the Conversion Price on the Trading Day after a Conversion Date, provided, that if the Company shall have timely elected to pay the interest due on a Conversion Date in cash pursuant to the terms hereof, subsection (ii) shall not be used in the calculation of the number of shares of Common Stock issuable upon a conversion hereunder. (Bii) Notwithstanding anything to the contrary contained herein, if on any Conversion Date: : (1) the number of shares of Common Stock at the time authorized, unissued and unreserved for all purposes, or held as treasury stock, is insufficient to pay principal and interest hereunder in shares of Common Stock; ; (2) the Underlying Shares issuable for such conversion (including any interest payable in shares) (x) are not registered for resale pursuant to an effective Underlying Shares Registration Statement and (y) may not be sold without volume restrictions pursuant to Rule 144(k) promulgated under the Securities Act (as defined in Section 6); (3) the Common Stock is not listed or quoted for trading on the OTC or on a Subsequent Market; ; (43) the Company Obligor has failed to timely satisfy its conversion obligations hereunderconversion; or or (54) the issuance of such shares of Common Stock would result in a violation of Sections 4(a)(iiSECTION 3(B), then, at the Company may not pay interest option of the Holder, the Obligor, in kind and must pay interest in cash by deliveringlieu of delivering shares of Common Stock pursuant to SECTION 3(A)(I), shall deliver, within three (3) Trading Days of each applicable Conversion Date, an amount in cash equal to the product of (a) the outstanding principal amount of the Debentures to be converted on plus any interest due therein divided by the Conversion Price, chosen by the Holder, and multiplied by the highest closing price of the stock from date of the conversion notice till the date that such cash payment is made. Further, if the Obligor shall not have delivered any cash due in respect of conversion of this Debenture or as payment of interest thereon by the fifth (5th) Trading Day after the Conversion Date and (b) Date, the product of (x) Holder may, by notice to the quotient obtained by dividing .12 by 360 and (y) Obligor, require the number of days for which such principal amount was outstanding. (C) This Debenture shall be convertible into Obligor to issue shares of Common Stock at pursuant to SECTION 3(C), except that for such purpose the option Conversion Price applicable thereto shall be the lesser of the Holder, in whole or in part at any time Conversion Price on the Conversion Date and from time to time, after the Original Issue Date (Conversion Price on the date of such Holder demand. Any such shares will be subject to the limitations on conversion set forth in Section 4(a)(iiprovisions of this Section. (iii) hereof). The Holder shall effect conversions by delivering to the Company Obligor a completed notice substantially in the form attached hereto as Exhibit A (a "Conversion Notice"). The Conversion Notice shall set forth the remaining principal amount of this Debenture and all accrued and unpaid interest thereon subsequent to the conversion at issue. The date on which a Conversion Notice is delivered is the "Conversion Date." Unless the Holder is converting the entire principal amount outstanding under this Debenture, the Holder is not be required to physically surrender this Debenture to the Company Obligor in order to effect conversions. Subject to Section 4(b), each Conversion Notice, once given, shall be irrevocable. Conversions hereunder shall have the effect of lowering the outstanding principal amount of this Debenture plus all accrued and unpaid interest thereon in an amount equal to the applicable conversion, which shall be evidenced by notations made in the Conversion Notice. The Holder and the Company Obligor shall maintain records showing the principal amount converted and the date of such conversions. In the event of any dispute or discrepancy, the records of the Holder shall be controlling and determinative in the absence of manifest error.

Conversion. (Aa) This At any time from the original issue date hereof through the date that this Debenture is paid in full, Lender shall be convertible into shares of Common Stock at have the option right, in its sole discretion, but subject to the provisions of the HolderSecurities Purchase Agreement, to convert the principal balance of this Debenture then outstanding plus accrued but unpaid interest, in whole or in part part, into shares (each, a “Conversion Share”) of CSC Common Stock at any time and from time to time, after the Original Issue Date (subject a conversion price per Conversion Share equal to the limitations on conversion set forth in Section 4(a)(ii) hereof). The number closing trading price of shares of the CSC Common Stock issuable upon a conversion hereunder shall be determined by adding on the sum of (i) the quotient obtained by dividing (x) the outstanding principal amount of this Debenture to be converted and (y) the Conversion Price (as defined herein), and (ii) the amount equal to (I) the product of (x) the outstanding principal amount of this Debenture to be converted and (y) the product of (1) the quotient obtained by dividing .12 by 360 and (2) the number of days for which such principal amount was outstanding, divided by (II) the Conversion Price Principal Trading Market on the Conversion Date, provided, that if the Company shall have timely elected to pay the interest due on a Conversion Date in cash pursuant to the terms hereof, subsection (ii) shall not be used in the calculation of the number of shares of Common Stock issuable upon a conversion hereunder. (B) Notwithstanding anything to the contrary contained herein, if on any Conversion Date: (1) the number of shares of Common Stock at the time authorized, unissued and unreserved for all purposes, or held as treasury stock, is insufficient to pay interest hereunder in shares of Common Stock; (2) the Underlying Shares issuable for such conversion (including any interest payable in shares) (x) are not registered for resale pursuant to an effective Underlying Shares Registration Statement and (y) may not be sold without volume restrictions pursuant to Rule 144(k) promulgated under the Securities Act (as defined in Section 61(b) below);, but in no event less than $0.001 per share (the “Conversion Price”). (3b) Lender may convert this Debenture at the Common Stock is not listed or quoted for trading on then applicable Conversion Price by the OTC or on a Subsequent Market; surrender of this Debenture (4properly endorsed) to the Company has failed to timely satisfy its conversion obligations hereunder; or at the principal office of the Borrower, together with the form of Notice of Conversion attached hereto as Annex A (5a “Notice of Conversion”) duly completed, dated and executed, specifying therein the issuance of such shares of Common Stock would result in a violation of Sections 4(a)(ii), then, the Company may not pay interest in kind and must pay interest in cash by delivering, within three Trading Days of each applicable Conversion Date, an amount in cash equal to the product of (a) the outstanding principal amount of the Debentures Debenture and/or outstanding interest to be converted on converted. The “Conversion Date” shall be the date that such Notice of Conversion Date and this Debenture is duly provided to Borrower hereunder (b) or, at Lender's option, the product next interest payment date with respect to Lender's conversion of (x) the quotient obtained by dividing .12 by 360 and (y) the number of days for which such principal amount was outstandingany scheduled interest payment). (Cc) This Debenture shall be convertible into shares On the date of Common Stock at receipt by the option Company of the Holderduly completed, in whole or in part at any time dated and from time to time, after the Original Issue Date (subject to the limitations on conversion set forth in Section 4(a)(ii) hereof). The Holder shall effect conversions by delivering to the Company a completed notice substantially in the form attached hereto as Exhibit A (a "executed Notice of Conversion Notice"). The Conversion Notice shall set forth the remaining principal amount of and this Debenture and all accrued and unpaid interest thereon subsequent in accordance with Section 1(b) with respect to the a conversion at issue. The date on which a Conversion Notice is delivered is the "Conversion Date." Unless the Holder is converting the entire principal amount outstanding under of any portion of this Debenture, the Holder is Lender (and any person(s) receiving Conversion Shares in lieu of the Lender) shall be deemed to have become the holder of record for all purposes of the Conversion Shares to which such valid conversion relates. (d) As soon as practicable, but not in excess of five business days, after the valid conversion of any portion of this Debenture, the Company, at the Company’s expense (including the payment by Company of any applicable issuance and similar taxes), will cause to be required to physically surrender this Debenture issued in the name of and delivered to the Company Lender (and/or such other person(s) identified in order the Notice of Conversion with respect to effect conversions. Subject to Section 4(bsuch conversion), each certificates evidencing the number of duly authorized, validly issued, fully paid and non-assessable Conversion Notice, once givenShares to which the Lender (and/or such other person(s) identified in such Notice of Conversion, shall be irrevocable. Conversions hereunder shall have entitled to receive upon the effect conversion), such certificates to be in such reasonable denominations as Lender may request when delivering the Notice of lowering the outstanding principal amount of this Debenture plus all accrued and unpaid interest thereon in an amount equal to the applicable conversion, which shall be evidenced by notations made in the Conversion Notice. The Holder and the Company shall maintain records showing the principal amount converted and the date of such conversionsConversion. In the event the closing price of any dispute the Common Stock on the Principal Trading Market on the date the certificate(s) representing Conversion Shares are actually delivered to the Investor (the "Delivery Date") is less than the Conversion Price in effect as of the Conversion Date, then the Company shall issue to the Investor the number of additional of shares of its Common Stock (the "Guaranty Shares") equal to the difference between the number of Conversion Shares actually delivered to the Investor and the number of Conversion Shares which would have been delivered to the Investor had the Conversion Price been equal to the closing price of the Common Stock on the Principal Trading Market on the Delivery Date (or discrepancy$0.001 in the event said closing price is less than $0.001). (e) If less than the entire principal and accrued interest under this Debenture is being converted, the records Company shall execute and deliver to the Lender a new Debenture (dated as of the Holder shall be controlling and determinative in date hereof) evidencing the absence principal balance of manifest errorthis Debenture that has not been so converted.

Conversion. (A) This Debenture a)1. Except as provided in this paragraph (a)1, from and after the recommendation by the Special Committee in favor of the transactions contemplated by the Exchange Offer, including the payment of the Special Distribution and amendments to this Agreement and the Ancillary Agreements, Viacom shall be convertible into not sell, transfer or otherwise dispose of any shares of Blockbuster Class B Common Stock at or any shares of Blockbuster Class A Common Stock acquired upon the option of conversion thereof (collectively, the Holder, in whole “Class B Equivalents”) other than pursuant to an Exchange Offer or in part at any time and from time as a distribution to time, after the Original Issue Date Viacom’s shareholders (subject to the limitations on conversion set forth in Section 4(a)(iiwhich may or may not be preceded by an Exchange Offer) hereof(a “Spin-Off”). The number of shares of Common Stock issuable upon a conversion hereunder If an Exchange Offer is completed, Viacom shall be determined by adding the sum of as soon as practicable either (i) commence and consummate a Spin-Off of all its remaining Class B Equivalents or (ii) make an election not to conduct a Spin-Off and provide the quotient obtained notice contemplated by dividing (xSection 2.07(a)10. If Viacom elects to satisfy its obligations under Section 2.08(a) without conducting an Exchange Offer, it shall consummate a Spin-Off of all of its Class B Equivalents. Notwithstanding the outstanding principal amount foregoing, following the closing of this Debenture to be converted and (y) the Conversion Price an Exchange Offer and/or a Spin-Off in which Viacom shall have distributed “Voting Control” (as defined hereinbelow), and (ii) Viacom may elect not to distribute any or all remaining Class B Equivalents in the amount equal Spin Off, so long as any such election not to (I) distribute the product remaining Class B Equivalents would not result in any increase in the voting power of (x) the outstanding principal amount of this Debenture to be converted and (y) the product of (1) the quotient obtained by dividing .12 by 360 and (2) the number of days for which such principal amount was outstanding, divided by (II) the Conversion Price on the Conversion Date, provided, that if the Company shall have timely elected to pay the interest due on a Conversion Date in cash Blockbuster Class B Common Stock pursuant to the terms hereof, subsection provisions in paragraph (ii) shall not be used in a)11 hereof as compared to what the calculation of the number of shares of Common Stock issuable upon a conversion hereunder. (B) Notwithstanding anything to the contrary contained herein, voting power would have been if on any Conversion Date: (1) the number of shares of Common Stock at the time authorized, unissued and unreserved for all purposes, or held as treasury stock, is insufficient to pay interest hereunder in shares of Common Stock; (2) the Underlying Shares issuable for such conversion (including any interest payable in shares) (x) are not registered for resale pursuant to an effective Underlying Shares Registration Statement and (y) may not be sold without volume restrictions pursuant to Rule 144(k) promulgated under the Securities Act (as defined in Section 6); (3) the Common Stock is not listed or quoted for trading on the OTC or on a Subsequent Market; (4) the Company has failed to timely satisfy its conversion obligations hereunder; or (5) the issuance of such shares of Common Stock would result were distributed in a violation of Sections 4(a)(ii), then, the Company may not pay interest in kind and must pay interest in cash by delivering, within three Trading Days of each applicable Conversion Date, an amount in cash equal to the product of (a) the outstanding principal amount of the Debentures to be converted on such Conversion Date and (b) the product of (x) the quotient obtained by dividing .12 by 360 and (y) the number of days for which such principal amount was outstandingSpin-Off. (C) This Debenture shall be convertible into shares of Common Stock at the option of the Holder, in whole or in part at any time and from time to time, after the Original Issue Date (subject to the limitations on conversion set forth in Section 4(a)(ii) hereof). The Holder shall effect conversions by delivering to the Company a completed notice substantially in the form attached hereto as Exhibit A (a "Conversion Notice"). The Conversion Notice shall set forth the remaining principal amount of this Debenture and all accrued and unpaid interest thereon subsequent to the conversion at issue. The date on which a Conversion Notice is delivered is the "Conversion Date." Unless the Holder is converting the entire principal amount outstanding under this Debenture, the Holder is not be required to physically surrender this Debenture to the Company in order to effect conversions. Subject to Section 4(b), each Conversion Notice, once given, shall be irrevocable. Conversions hereunder shall have the effect of lowering the outstanding principal amount of this Debenture plus all accrued and unpaid interest thereon in an amount equal to the applicable conversion, which shall be evidenced by notations made in the Conversion Notice. The Holder and the Company shall maintain records showing the principal amount converted and the date of such conversions. In the event of any dispute or discrepancy, the records of the Holder shall be controlling and determinative in the absence of manifest error.

Conversion. (A) This 5.1 At the option of the Holder. The principal amount of this Debenture shall be then outstanding is convertible into shares of Common Stock at the Conversion Price (subject to limitations set forth in Section 5(d)), at the option of the Holder, in whole or in part at any time and from time to time, time from and after the Original Issue Date (subject Date. Holders shall effect conversions under this Section 5(a), by delivering to the limitations on conversion set forth Company a Holder Conversion Notice together with a schedule in Section 4(a)(ii) hereofthe form of Schedule 1 attached hereto (the "Conversion Schedule"). The number of shares of Common Stock Underlying Shares issuable upon a any conversion hereunder shall be determined by adding the sum of (isubject to limitations set forth in Section 5(d)) the quotient obtained by dividing (x) equal the outstanding principal amount of this Debenture to be converted divided by the Initial Conversion Price. If the Holder is converting less than all of the principal amount represented by this Debenture, or if a conversion hereunder may not be effected in full due to the application of Section 5(d)(i), the Company shall honor such conversion to the extent permissible hereunder and (yshall promptly deliver to the Holder a Conversion Schedule indicating the principal amount which has not been converted. 5.2 At the option of the Company. Subject to the conditions set forth in this Section 5(b) and Section 5(d), at any time after the first year anniversary of the Original Issue Date, the Company may require a conversion of principal amount of this Debenture, at the Conversion Price and on the Company Conversion Date, of all or a portion of the outstanding principal amount of this Debenture if: (as defined herein), i) the Closing Price for each of 20 consecutive Trading Days is equal to or greater than 135% of the Initial Conversion Price and (ii) all of the amount Equity Conditions are satisfied as of the Company Conversion Date with respect to all of the Underlying Shares potentially issuable in connection with such proposed conversion. The Company shall exercise its right to require conversions hereunder by delivering to the Holder a Company Conversion Notice together with a Conversion Schedule within 10 Business Days of the satisfaction of the condition set forth in clause (i) of the immediately preceding sentence. Notwithstanding anything herein to the contrary, if any of the conditions set forth in clauses (i) and (ii) herein shall cease to be in effect during the period between the date of the delivery of the Company Conversion Notice and the Company Conversion Date, then the Holder may elect, by written notice to the Company given at any time after any such conditions shall cease to be in effect, to invalidate ab initio such conversion. The number of Underlying Shares issuable upon any conversion hereunder shall (subject to limitations set forth in Section 5(d)) be equal to (I) the product of (x) the outstanding principal amount of this Debenture to be converted and (y) the product of (1) the quotient obtained by dividing .12 by 360 and (2) the number of days for which such including any interest payments accreted to principal amount was outstanding, divided by (II) the Conversion Price on the Conversion Date, provided, that if the Company shall have timely elected to pay the interest due on a Conversion Date in cash pursuant to the terms hereof, subsection (ii) shall not be used in divided by the calculation of the number of shares of Common Stock issuable upon a Conversion Price. The conversion hereunder. (B) Notwithstanding anything to the contrary contained herein, if on any Conversion Date: (1) the number of shares of Common Stock at the time authorized, unissued and unreserved for all purposes, or held as treasury stock, is insufficient to pay interest hereunder in shares of Common Stock; (2) the Underlying Shares issuable for such conversion (including any interest payable in shares) (x) are not registered for resale pursuant to an effective Underlying Shares Registration Statement and (y) may not be sold without volume restrictions pursuant to Rule 144(k) promulgated under the Securities Act (as defined in Section 6); (3) the Common Stock is not listed or quoted for trading on the OTC or on a Subsequent Market; (4) the Company has failed to timely satisfy its conversion obligations hereunder; or (5) the issuance of such shares of Common Stock would result in a violation of Sections 4(a)(ii), then, the Company may not pay interest in kind and must pay interest in cash by delivering, within three Trading Days of each applicable Conversion Date, an amount in cash equal to the product of (a) the outstanding principal amount of the Debentures to be converted on such Conversion Date and (b) the product of (x) the quotient obtained by dividing .12 by 360 and (y) the number of days for which such principal amount was outstanding. (C) This Debenture shall be convertible into shares of Common Stock at the option of the Holder, in whole or in part at any time and from time to time, after the Original Issue Date (subject to the limitations on conversion set forth in Section 4(a)(ii) hereof). The Holder shall effect conversions by delivering to the each Company a completed notice substantially in the form attached hereto as Exhibit A (a "Conversion Notice"). The Conversion Notice shall set forth the remaining principal amount of this Debenture and all accrued and unpaid interest thereon subsequent to the conversion at issue. The date on which a Conversion Notice is delivered is the "Conversion Date." Unless the Holder is converting the entire principal amount outstanding under this Debenture, the Holder is not be required to physically surrender this Debenture to the Company in order to effect conversions. Subject to Section 4(b), each Conversion Notice, once given, shall be irrevocableirrevocable as to the Company. Conversions hereunder If the conversion of a principal amount of Debentures indicated in a Company Conversion Notice would result in the issuance to the Holder of Underlying Shares in excess of the amount permitted pursuant to Section 5(d)(i) and/or Section 5(d)(ii), the Holder shall notify the Company of this fact and the Company shall: (x) honor the conversion for the maximum principal amount of Debentures permitted, pursuant to Section 5(d)(i) and/or Section 5(d)(ii), to be converted on such Company Conversion Date and (y) cancel the Company Conversion Notice with respect to the portion of the principal amount of Debentures the conversion of which would exceed the amount permitted under Section 5(d)(i) and/or Section 5(d)(ii). Notwithstanding anything herein to the contrary, the Company shall not be entitled to deliver a Company Conversion Notice prior to the 10th Business Day following the delivery of a Company Conversion Notice pursuant to this or any other Debenture or prior to the 10th Business Day following any Mandatory Conversion Date under Section 5(a). 5.3 Company's option to adjust Conversion Price and force conversion. Subject to the conditions set forth in this Section 5(c) and Section 5(d), at any time and from time to time after the Original Issue Date, the Company shall have the option, upon the delivery of an Adjustment Notice to the Holder, to adjust the Conversion Price then in effect with respect to the Mandatory Convertible Amount applicable to such Adjustment Notice to equal the lesser of: (A) the Initial Conversion Price and (B) 93% of lowering the outstanding Index Price. Subject to the terms hereof (including, without limitation, Section 5(d)(i) and (ii)), on each Adjustment Date immediately following the delivery of an Adjustment Notice, the applicable Mandatory Convertible Amount shall be converted into Underlying Shares at the Conversion Price as adjusted on such Adjustment Date pursuant to the terms of the immediately preceding sentence, provided, that such conversion shall only occur if all of the Equity Conditions are satisfied as of the Adjustment Date with respect to all of the Underlying Shares potentially issuable in connection with such proposed conversion. Notwithstanding anything herein to the contrary, the Company shall not be entitled to deliver an Adjustment Notice prior to the tenth (10th) Trading Day immediately following the immediately preceding Delivery Date hereunder or within 10 Trading Days of a Company Conversion Date under Section 5(b). If a conversion of the Mandatory Convertible Amount would result in the issuance to the Holder of Underlying Shares in excess of the amount permitted pursuant to Section 5(d)(i) and/or Section 5(d)(ii), the Holder shall notify the Company of this fact and the Company shall: (x) honor the conversion for the maximum principal amount of this Debenture plus all accrued Debentures permitted, pursuant to Section 5(d)(i) and/or Section 5(d)(ii), to be converted on the applicable Adjustment Date and unpaid interest thereon in an amount equal (y) cancel the Adjustment Notice and conversion as to the applicable conversion, which shall be evidenced by notations made in the Conversion Notice. The Holder and the Company shall maintain records showing the principal amount converted and the date of such conversions. In the event of any dispute or discrepancy, the records portion of the Holder shall be controlling and determinative in Mandatory Convertible Amount the absence conversion of manifest errorwhich would exceed the amount permitted pursuant to Section 5(d)(i) and/or Section 5(d)(ii).

Conversion. (Ai) This Debenture At any time after the Original Issue Date, the outstanding Principal Amount and all accrued but unpaid interest thereon shall be convertible into shares of Common Stock convertible, at the option of the Holder, in whole or in part at any time and from time to time, after the Original Issue Date into (subject to the limitations on conversion set forth in Section 4(a)(iii) hereof). The number of shares of Common Stock issuable upon a conversion hereunder and (ii) warrants to purchase up to One Million Five Hundred Thousand (1,500,000) shares of Common Stock (the "Target Warrant Shares"), in the latter case, on the terms and conditions set forth in the form of Common Stock Purchase Warrant attached hereto as Exhibit A (collectively, the "Warrants"); provided, that the Target Warrant Shares shall be determined by adding the sum of (i) the quotient obtained by dividing (x) subject to adjustment prior to the outstanding principal amount "Conversion Date" (as defined herein) to reflect any and all adjustments to the "Set Price" (as defined herein, and in accordance with Section 4(d) hereof) so that the number of this Debenture Target Warrant Shares (subject to be converted and clauses (y) and (z) hereof) is equal to the Conversion Price product of (A) two, multiplied by (B) the number of "Underlying Shares" (as defined herein), and (ii) the amount equal to (I) the product of (x) the outstanding principal amount of this Debenture to be converted and (y) the product of (1) the quotient obtained by dividing .12 by 360 and (2) the number of days for which such principal amount was outstanding, divided by (II) subject to adjustment prior to the Conversion Price on Date in the same manner as the shares purchasable under the Warrants are subject to adjustment from and after the Conversion Date, provided, that if the Company shall have timely elected to pay the interest due on a Conversion Date in cash pursuant to the terms hereof, subsection (ii) shall not be used in the calculation of the number of shares of Common Stock issuable upon a conversion hereunder. (B) Notwithstanding anything to the contrary contained herein, if on any Conversion Date: (1) the number of shares of Common Stock at the time authorized, unissued and unreserved for all purposes, or held as treasury stock, is insufficient to pay interest hereunder in shares of Common Stock; (2) the Underlying Shares issuable for such conversion (including any interest payable in shares) (x) are not registered for resale pursuant to an effective Underlying Shares Registration Statement and (yz) may not be sold without volume restrictions pursuant to Rule 144(k) promulgated under the Securities Act (as defined in Section 6); (3) the Common Stock is not listed or quoted for trading on the OTC or on a Subsequent Market; (4) the Company has failed to timely satisfy its conversion obligations hereunder; or (5) the issuance of such shares of Common Stock would result in a violation of Sections 4(a)(ii)pro-rated, then, the Company may not pay interest in kind and must pay interest in cash by delivering, within three Trading Days of each applicable Conversion Date, an amount in cash equal to the product of (a) the outstanding principal amount of the Debentures to be converted on such Conversion Date and (b) the product of (x) the quotient obtained by dividing .12 by 360 and (y) the number of days for which such principal amount was outstanding. (C) This Debenture shall be convertible into shares of Common Stock at the option of the Holder, in whole or in part at any time and from time to time, after in the Original Issue Date (subject event the Holder converts part but not all of the outstanding Principal Amount and accrued but unpaid interest thereon; provided, further, that in the event of any adjustment to the limitations on conversion number of Target Warrant Shares hereunder, the "Exercise Price" (as defined in the Warrants) with respect to fifty percent (50%) of such Target Warrant Shares (as so adjusted) shall be the amount set forth in Section 4(a)(iiclause (i) hereof). of the definition of Exercise Price in the Warrants, and the Exercise Price with respect to the remaining fifty percent (50%) of such Target Warrant Shares (as so adjusted) shall be the amount set forth in clause (ii) of such definition of Exercise Price. (ii) The Holder shall effect conversions by delivering to the Company written notice (a completed notice substantially in "Notice of Conversion"), specifying therein the form attached hereto as Exhibit A Principal Amount and accrued but unpaid interest thereon to be converted and the date on which such conversion is to be effected (a "Conversion NoticeDate"). The If no Conversion Date is specified in a Notice of Conversion, the Conversion Date shall set forth be the remaining principal amount date that such Notice of this Debenture and Conversion is provided hereunder. To effect conversions hereunder, the Holder shall not be required to physically surrender the Note to the Company unless the entire Principal Amount of the Note plus all accrued and unpaid interest thereon subsequent to the conversion at issue. The date on which a Conversion Notice is delivered is the "Conversion Date." Unless the Holder is converting the entire principal amount outstanding under this Debenture, the Holder is not be required to physically surrender this Debenture to the Company in order to effect conversions. Subject to Section 4(b), each Conversion Notice, once given, shall be irrevocablehas been so converted. Conversions hereunder shall have the effect of lowering the outstanding principal amount of this Debenture plus all Principal Amount and accrued and but unpaid interest thereon in an amount equal to the applicable conversion, which shall be evidenced by notations made in the Conversion Noticet▇ ▇▇▇ amount so converted. The Holder and the Company shall maintain records showing the principal amount Principal Amount and accrued but unpaid interest thereon converted and the date of such conversions. The Company shall deliver any objection to any Notice of Conversion within one Business Day after receipt of such notice. In the event of any dispute or discrepancy, the records of the Holder shall be controlling and determinative in the absence of manifest error. Each Holder, by acceptance of this Note, acknowledges and agrees that, by reason of the provisions of this paragraph, following conversion of a portion of this Note, the unpaid and unconverted Principal Amount of this Note may be less than the Original Principal Amount stated on the face hereof. (b) At any time, the number ▇▇ ▇▇ares of Common Stock issuable upon conversion (the "Underlying Shares") shall be determined by the quotient obtained by dividing (x) the outstanding Principal Amount and accrued but unpaid interest thereon to be converted by (y) the "Set Price" (as defined herein).

Conversion. (Aa) This Debenture Subject to the adjustments required by Section 3.2, the "Closing Merger Consideration" shall consist of: (i) Thirty-Two Million Dollars ($32,000,000) (the "Fixed Closing Merger Consideration"), plus (ii) the Unrestricted Cash as of the opening of business on the Closing Date (less the amount of checks written or drafts drawn on PBBC's accounts which are in transit or have yet to clear, and plus any funds deposited but not credited to PBBC's accounts as of such time) (the "Variable Closing Merger Consideration"). 18 (b) The Closing Merger Consideration shall be convertible into allocated among the holders of the shares of Company Common Stock at the option of the Holder, in whole or in part at any time and from time to time, after the Original Issue Date (subject to the limitations on conversion as set forth in this Section 4(a)(ii) hereof3.1(b). The At the Effective Time, by virtue of the Merger and without any action on the part of the holders of the shares of Company Common, each share of Company Common (other than any Dissenting Shares) issued and outstanding immediately prior to the Effective Time shall be converted into the right to receive the Cash per Common Share, and each holder of shares of Company Common (other than holders of Dissenting Shares) shall be entitled to receive a portion (the "Pro Rata Portion") of the Closing Merger Consideration equal to (i) the Cash per Common Share, multiplied by (ii) the aggregate number of shares of Company Common Stock issuable upon a conversion hereunder shall be determined (other than Dissenting Shares) held by adding such holder immediately prior to the sum Effective Time. (c) Immediately prior to the Effective Time, Sleepmaster will pay: (1) to the Representative, by wire transfer of immediately available funds, an amount (the "Funding Amount") equal to (i) the quotient obtained by dividing (x) Closing Merger Consideration, determined prior to giving effect to the outstanding principal amount of this Debenture to be converted and (y) the Conversion Price (as defined herein)adjustments provided for in Section 3.2, and minus (ii) the amount equal to (I) the product of (x) the outstanding principal amount number of this Debenture to be converted Dissenting Shares and (y) the product of Cash per Common Share, minus (1iii) One Million Dollars ($1,000,000) (the quotient obtained by dividing .12 by 360 "Adjustment Escrow Amount"), minus (iv) Two Million Eight Hundred Thousand Dollars ($2,800,000) (the "Indemnity Escrow Amount," and, together with the Adjustment Escrow Amount, the "Escrow Amounts"), to be held in two separate, segregated, interest-bearing escrow accounts (the "Adjustment Escrow" and the "Indemnity Escrow," respectively), and (2) to the number Escrow Agent, by wire transfer of days for which such principal immediately available funds, an amount was outstandingequal to the sum of the Escrow Amounts. Upon payment by Sleepmaster to the Representative of the Funding Amount and to the Escrow Agent of the Escrow Amounts, divided in accordance with this Section 3.1(c), Sleepmaster and the Surviving Corporation shall be deemed to have satisfied their obligations to make payments in respect of the Closing Merger Consideration other than (A) Sleepmaster's or the Surviving Corporation's obligation to make payments required by Section 3.2, if any, and (IIB) the Conversion Price on obligation of Sleepmaster or the Conversion Date, provided, that if the Company shall have timely elected to pay the interest due on a Conversion Date in cash Surviving Corporation under or pursuant to the terms hereofFlorida Law, subsection (ii) shall not be used in to make payments to the calculation holders of the number of shares of Common Stock issuable upon a conversion hereunderDissenting Shares following the Effective Time. (Bd) Notwithstanding anything After the Effective Time, each holder of an outstanding certificate or certificates evidencing shares of Company Common (the "Certificates"), other than any holder of Dissenting Shares, upon surrender of such Certificates to the contrary contained hereinRepresentative shall be entitled to receive an amount, if on any Conversion Date: without interest, equal to the Pro Rata Portion (1subject to the provisions of Section 3.2) allocable to such holder in exchange for the Certificates, less and except each holder's pro rata share ("Pro Rata Escrow Share") of the Escrow Amounts determined by dividing (A) the number of shares of Company Common held by such holder (exclusive of Dissenting Shares) by (B) the Aggregate Company Common (exclusive of Dissenting Shares), and then multiplying such fraction and the Escrow Amounts. Pending such surrender and exchange, a holder's Certificate 19 or Certificates shall be deemed for all purposes (other than the exchange contemplated by this Section 3. 1) to evidence such holder's Pro Rata Portion, less and except such holder's Pro Rata Escrow Share, which Pro Rata Escrow Share shall be retained in escrow and be distributed pursuant to terms of Article XIII. (e) At the Effective Time, the Surviving Corporation shall, pursuant to Florida Law, deliver to each holder of Dissenting Shares a written offer to pay to such holder of Dissenting Shares, an amount deemed by the Surviving Corporation to constitute the fair value of the aggregate of such holder's Dissenting Shares owned at the Effective Time. The Surviving Corporation's notice and offer shall be accompanied by a balance sheet of PBBC as of the latest available date that is not more than 12 months before the offer, and by a profit and loss statement of PBBC for the 12-month period ending on the date of the accompanying balance sheet. At and as of the Effective Time, each Dissenting Share shall be converted into the right to receive payment from the Surviving Corporation with respect thereto in accordance with the provisions of the Florida Law. Notwithstanding any other provision of this Agreement, the obligations created by this Section 3.1(e) shall survive the Closing until fulfilled. (f) At the Effective Time, all shares of the capital stock of PBBC which are held in PBBC's treasury shall be canceled and retired, without the payment of any consideration therefor. (g) From and after the Effective Time, there will be no transfers of Company Common on the stock transfer book of the Surviving Corporation. (h) At the Effective Time, each share of Common Stock at of Sub issued and outstanding immediately prior to the time authorized, unissued and unreserved for all purposes, or held as treasury stock, is insufficient to pay interest hereunder in shares Effective Time shall be converted into one share of Common Stock; (2) the Underlying Shares issuable for such conversion (including any interest payable in shares) (x) are not registered for resale pursuant to an effective Underlying Shares Registration Statement and (y) may not be sold without volume restrictions pursuant to Rule 144(k) promulgated under the Securities Act (as defined in Section 6); (3) the Common Stock is not listed or quoted for trading on the OTC or on a Subsequent Market; (4) the Company has failed to timely satisfy its conversion obligations hereunder; or (5) the issuance of such shares of Common Stock would result in a violation of Sections 4(a)(ii), thenpar value $5.00 per share, the Company may not pay interest in kind and must pay interest in cash by delivering, within three Trading Days of each applicable Conversion Date, an amount in cash equal to the product of (a) the outstanding principal amount of the Debentures to be converted on such Conversion Date and Surviving Corporation (b) the product of (x) the quotient obtained by dividing .12 by 360 and (y) the number of days for which such principal amount was outstanding. (C) This Debenture shall be convertible into shares of Common Stock at the option of the Holder, in whole or in part at any time and from time to time, after the Original Issue Date (subject to the limitations on conversion set forth in Section 4(a)(ii) hereof). The Holder shall effect conversions by delivering to the Company a completed notice substantially in the form attached hereto as Exhibit A (a "Conversion NoticeSurviving Corporation Common"). The Conversion Notice shall set forth the remaining principal amount of this Debenture and all accrued and unpaid interest thereon subsequent to the conversion at issue. The date on which a Conversion Notice is delivered is the "Conversion Date." Unless the Holder is converting the entire principal amount outstanding under this Debenture, the Holder is not be required to physically surrender this Debenture to the Company in order to effect conversions. Subject to Section 4(b), each Conversion Notice, once given, shall be irrevocable. Conversions hereunder shall have the effect of lowering the outstanding principal amount of this Debenture plus all accrued and unpaid interest thereon in an amount equal to the applicable conversion, which shall be evidenced by notations made in the Conversion Notice. The Holder and the Company shall maintain records showing the principal amount converted and the date of such conversions. In the event of any dispute or discrepancy, the records of the Holder shall be controlling and determinative in the absence of manifest error.

Conversion. (Aa) This Debenture The Holder shall be convertible into shares of Common Stock at the option of the Holder, in whole or in part entitled at any time prior to the Maturity Date (or, in the event this Note has been called for redemption or the Holder has exercised any of its rights pursuant to Section 3 below, then (only in respect of the principal amount to be redeemed or repurchased) until and including, but (unless the Company defaults in making the payment due upon redemption or repurchase, as the case may be) not after, the close of business on the second Business Day next preceding the Redemption Date or the date of the Repurchase Notice, as the case may be) to convert this Note as a whole, or from time to timetime in part (in any principal amount that is an integral multiple of $50,000,000 or, after if less, the Original Issue Date (subject to the limitations on conversion set forth in Section 4(a)(ii) hereofaggregate principal amount outstanding). The number of , into newly issued, fully paid and nonassessable shares of Class A Common Stock, par value $0.01 per share (the "Class A Common Stock"), of the Company at the conversion price per share of Class A Common Stock issuable upon a conversion hereunder shall be determined by adding the sum of (i) the quotient obtained by dividing (x) the outstanding principal amount of this Debenture to be converted and (y) the Conversion Price (as defined herein), and (ii) the amount equal to (I) the product of (x) the outstanding principal amount of this Debenture to be converted and (y) the product of (1) the quotient obtained by dividing .12 by 360 and (2) the number of days for which such principal amount was outstanding, divided by (II) the Conversion Price on the Conversion Date, provided, that if the Company shall have timely elected to pay the interest due on a Conversion Date in cash pursuant to the terms hereof, subsection (ii) shall not be used in the calculation of the number of shares of Common Stock issuable upon a conversion hereunder. (B) Notwithstanding anything to the contrary contained herein, if on any Conversion Date: (1) the number of shares of Common Stock at the time authorized, unissued and unreserved for all purposes, or held as treasury stock, is insufficient to pay interest hereunder in shares of Common Stock; (2) the Underlying Shares issuable for such conversion (including any interest payable each such share, a "Conversion Share" and such price per share, the "Conversion Price") in shares) (x) are not registered for resale pursuant to an effective Underlying Shares Registration Statement and (y) may not be sold without volume restrictions pursuant to Rule 144(k) promulgated under effect on the Securities Act applicable Satisfaction Date (as defined in Section 6); (3) the Common Stock is not listed or quoted for trading on the OTC or on a Subsequent Market; (4) the Company has failed to timely satisfy its conversion obligations hereunder; or (5) the issuance of such shares of Common Stock would result in a violation of Sections 4(a)(iiherein defined), then, the Company may not pay interest in kind and must pay interest in cash by delivering, within three Trading Days of each applicable Conversion Date, an amount in cash equal to the product of (a) the outstanding principal amount of the Debentures to be converted on such Conversion Date and (b) the product of (x) the quotient obtained by dividing .12 by 360 and (y) the number of days for which such principal amount was outstanding. (C) This Debenture shall be convertible into shares of Common Stock at the option of the Holder, in whole or in part at any time and from time to time, after the Original Issue Date (subject to the limitations on conversion set forth in Section 4(a)(ii) hereof). The Holder shall effect conversions by delivering to the Company a completed written notice substantially in the form attached hereto as Exhibit A of its election to convert this Note (a "Conversion Notice"), specifying the principal amount to be converted. The Conversion Price on the date of the Investment Agreement was $72.82 (the "Initial Conversion Price"), and the Conversion Price in effect on the applicable Satisfaction Date shall be the Initial Conversion Price as it shall have been adjusted from time to time pursuant to Section 1(g). (b) In connection with any conversion: (i) The Company shall (A) if requested by the Holder, file or cause to be filed, on or prior to the twentieth day following the date of the Conversion Notice, or as soon thereafter as may be reasonably practicable, with the United States Federal Trade Commission and the Antitrust Division of the United States Department of Justice, all reports and other documents required to be filed by it under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and ▇▇▇ ▇▇▇▇s and regulations thereunder (the "HSR Act") concerning the acquisition of securities pursuant to such conversion, (B) promptly comply with or cause to be complied with any requests by the United States Federal Trade Commission or the Antitrust Division of the United States Department of Justice for additional information, so that the waiting period applicable to the acquisition of securities pursuant to such conversion under the HSR Act shall expire as soon as reasonably practicable, and (C) if requested by the Holder, request early termination of such waiting period. Nothing in this Section 1(b)(i) shall be deemed to require the Company to (A) waive any rights or agree to any limitation on its operations or to dispose of any securities or assets or collection of securities or assets, or (B) incur any material out-of-pocket costs other than attorneys' fees and disbursements, it being understood that all HSR Act filing fees shall be paid by the Holder. (ii) Promptly following its receipt of the Conversion Notice and from time to time thereafter, the Company shall set forth take or cause to be taken all reasonable actions, and shall do or cause to be done, and shall assist and cooperate with the remaining principal amount Holder in doing, all things reasonably necessary to effect the conversion in the most expeditious manner practicable, including attempting to obtain all necessary actions or non-actions, waivers, consents and approvals from Governmental Authorities and the making of any necessary registrations and filings (including filings with Governmental Authorities, if any) and the taking of all reasonable steps as may be necessary to obtain an approval or waiver from, or to avoid any action or proceeding by, any Governmental Authority. Nothing in this Section 1(b)(ii) shall be deemed to require the Company to (A) waive any rights or agree to any limitation on its operations or to dispose of any securities or assets or collection of securities or assets, or (B) incur any material out-of-pocket costs other than attorneys' fees and disbursements and any filing fees required to be paid by the Company by applicable law. (iii) Prior to the issuance and delivery of the Conversion Shares, the Company shall (A) effect and/or maintain such registrations with Governmental Authorities, and obtain such approvals by Governmental Authorities, as may be necessary under any United States federal or state law (including the Securities Act of 1933, as amended (the "Securities Act"), the Securities Exchange Act of 1934, as amended (the "Exchange Act") and state securities and "blue sky" laws), in each case to the extent necessary, and only to the extent necessary, for the Conversion Shares to be lawfully issued and delivered as provided herein and listed or qualified for quotation as contemplated by clause (B) of this Debenture subsection 1(b)(iii), and all accrued (B) cause the Conversion Shares to be qualified for quotation, subject to notice of issuance, on the Nasdaq Stock Market or such other inter-dealer quotation system, if any, on which the Class A Common Stock is then quoted or cause the Conversion Shares to be listed, subject to notice of issuance, on each national securities exchange on which the Class A Common Stock is listed or traded at the time of such delivery, in each case to the extent permitted by the rules of the Nasdaq Stock Market or such securities exchange, as the case may be. (iv) It shall be a condition precedent to the effectiveness of such conversion that (A) any waiting period applicable thereto under the HSR Act shall have elapsed or been terminated, and unpaid interest thereon subsequent (B) any authorization, consent, order and approval of, or declaration or filing with, and any other waiting period imposed by, any Governmental Authority in connection therewith shall have been received or filed or shall have elapsed or been terminated, as the case may be. Not later than the second Business Day following the satisfaction of the foregoing conditions precedent (or, if no waiting period is applicable to the conversion at issue. The under the HSR Act and no authorization, consent, order, approval, declaration, filing or other waiting period is required or imposed, then the third Business Day following the date on which a of the Conversion Notice is delivered is Notice) (such second or third Business Day, as the case may be, the "Satisfaction Date"), the Company shall deliver to the Holder, upon the surrender of this Note, a certificate or certificates representing the Conversion Date." Unless Shares, registered in the name of the Holder is converting or its designee and containing such legends as the entire principal amount outstanding under this Debenture, Company and the Holder is not be required shall agree, and a replacement note identical to physically surrender this Debenture to the Company in order to effect conversions. Subject to Section 4(b), each Conversion Notice, once given, shall be irrevocable. Conversions hereunder shall have the effect of lowering the outstanding Note but having a principal amount of this Debenture plus all accrued and unpaid interest thereon in an amount equal to the applicable conversionprincipal amount not theretofore converted, which redeemed or repurchased (if any). Any conversion shall be evidenced by notations deemed to have been made as of the applicable Satisfaction Date, and the Holder shall be treated for all purposes as the record holder of the Conversion Shares as of such Satisfaction Date. (c) The Company will not issue fractional Conversion Shares upon conversion of this Note. In lieu thereof, the Company will pay an amount in cash based upon the Daily Market Price per share of the Class A Common Stock on the trading day prior to the Satisfaction Date or, at its option, shall round up to the next higher whole share. (d) The Company shall at all times reserve and keep available, free from preemptive rights, out of its authorized but unissued Class A Common Stock, for the purpose of effecting the conversion of this Note, the maximum number of shares of Class A Common Stock then issuable upon the conversion of this Note. (e) Except as provided in the Conversion Notice. The Holder and next sentence, the Company shall maintain records showing pay any and all transfer taxes, stamp taxes and similar taxes and duties that may be payable in respect of the principal issue or delivery of Conversion Shares on conversion of this Note. The Company shall not, however, be required to pay any tax or duty which may be payable in respect of any transfer involved in the issue and delivery of Conversion Shares in a name other than that of the Holder, and no such issue or delivery shall be made unless and until the person requesting such issue has paid to the Company the amount of any such tax or duty, or has established to the satisfaction of the Company that such tax or duty has been paid. (f) The Company agrees that all shares of Class A Common Stock which may be delivered upon conversion of this Note, upon such delivery, shall have been duly authorized and validly issued and shall be fully paid and nonassessable (and shall be issued out of the Company's authorized but unissued Class A Common Stock) . (g) The Conversion Price in effect on the date of any Conversion Notice shall reflect any and all adjustments to the Initial Conversion Price effected on or following the date of the Investment Agreement and on or prior to the applicable Satisfaction Date, in accordance with the following provisions: (i) In case the Company shall (1) pay a dividend in shares of Class A Common Stock to all holders of Class A Common Stock, (2) make a distribution in shares of Class A Common Stock to all holders of Class A Common Stock, (3) subdivide its outstanding shares of Class A Common Stock into a greater number of shares of Class A Common Stock or (4) combine its outstanding shares of Class A Common Stock into a smaller number of shares of Class A Common Stock, the Conversion Price in effect immediately prior to such action shall be adjusted so that the Holder shall upon the conversion of this Note be entitled to receive the number of shares of Class A Common Stock which the Holder would have owned immediately following such action had the Note been converted immediately prior thereto. Any adjustment made pursuant to this (g) (i) shall become effective immediately after the record date in the case of a dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision or combination. (ii) In case the Company shall issue rights or warrants to all or substantially all holders of Class A Common Stock entitling them (for a period commencing no earlier than the record date for the determination of holders of Class A Common Stock entitled to receive such rights or warrants and expiring not more than 45 days after such record date) to subscribe for or purchase shares of Class A Common Stock (or securities convertible into Class A Common Stock) at a price per share less than the current market price (as determined pursuant to subsection 1(g)(vi)) of the Class A Common Stock on such record date, the Conversion Price shall be adjusted so that the same shall equal the price determined by multiplying the Conversion Price in effect immediately prior to such record date by a fraction of which the numerator shall be the number of shares of Class A Common Stock outstanding on such record date, plus the number of shares of Class A Common Stock which the aggregate offering price of the offered shares of Class A Common Stock (or the aggregate conversion price of the convertible securities so offered) would purchase at such current market price, and of which the denominator shall be the number of shares of Class A Common Stock outstanding on such record date plus the number of additional shares of Class A Common Stock offered (or into which the convertible securities so offered are convertible). Such adjustment shall become effective immediately after such record date. (iii) In case the Company shall distribute to all or substantially all holders of Class A Common Stock shares of Capital Stock of the Company other than Class A Common Stock, evidences of Indebtedness or other assets (other than cash dividends out of current or retained earnings), or shall distribute to all or substantially all holders of Class A Common Stock, rights or warrants to subscribe for securities (other than those referred to in subsection 1(g)(ii)), then in each such case the Conversion Price shall be adjusted so that the same shall equal the price determined by multiplying the Conversion Price in effect immediately prior to the date of such conversionsdistribution by a fraction of which the numerator shall be the current market price (determined as provided in subsection 1(g)(vi)) of the Class A Common Stock on the record date mentioned below less the then fair market value (as determined by the Board of Directors or a duly authorized committee thereof, whose determination shall be conclusive evidence of such fair market value and described in a Board Resolution) of the portion of shares of Capital Stock, evidences of Indebtedness or other assets so distributed in respect of, or of such rights or warrants applicable to, one share of Class A Common Stock, and of which the denominator shall be such current market price of the Class A Common Stock. In Such adjustment shall become effective immediately after the record date for the determination of the holders of Class A Common Stock entitled to receive such distribution. Notwithstanding the foregoing, in the event that the Company shall distribute rights or warrants (other than those referred to in subsection 1(g)(ii)) ("Rights") pro rata to holders of any dispute or discrepancyClass A Common Stock, the records Company may, in lieu of making any adjustment pursuant to this subsection 1(g)(iii), make proper provision so that if the applicable Satisfaction Date occurs after the record date for such distribution and prior to the expiration or redemption of the Rights the Holder shall be controlling entitled to receive upon such conversion, in addition to the Conversion Shares, a number of Rights to be determined as follows: (i) if the Satisfaction Date occurs on or prior to the date for the distribution to the holders of Rights of separate certificates evidencing such Rights (the "Distribution Date"), the same number of Rights to which a holder of a number of shares of Class A Common Stock equal to the number of Conversion Shares is entitled at the Satisfaction Date in accordance with the terms and determinative provisions of and applicable to the Rights; and (ii) if the Satisfaction Date occurs after the Distribution Date, the same number of Rights to which a holder of the number of shares of Class A Common Stock into which the principal amount of the Note so converted was convertible immediately prior to the Distribution Date would have been entitled on the Distribution Date in accordance with the terms and provisions of and applicable to the Rights. (iv) In case the Company shall, by dividend or otherwise, at any time distribute to all or substantially all holders of its Class A Common Stock cash (including any distributions of cash out of current or retained earnings of the Company but excluding any cash that is distributed as part of a distribution requiring a Conversion Price adjustment pursuant to subsection 1(g)(iii)) in an aggregate amount that, together with the sum of (x) the aggregate amount of any other distributions to all or substantially all holders of its Class A Common Stock made in cash plus (y) all Excess Payments, in each case made within the 12 months preceding the date fixed for determining the stockholders entitled to such distribution (the "Distribution Record Date") and in respect of which no Conversion Price adjustment pursuant to subsection 1(g)(iii) or 1(g)(v) or this subsection 1(g)(iv) has been made, exceeds 10% of the product of the current market price per share (determined as provided in subsection 1(g)(vi)) of the Class A Common Stock on the Distribution Record Date times the number of shares of Class A Common Stock outstanding on the Distribution Record Date (excluding shares held in the absence treasury of manifest error.the Company), the Conversion Price shall be reduced so that the same shall equal the price determined by multiplying such Conversion Price in effect immediately prior to the effectiveness of the Conversion Price reduction contemplated by this subsection 1(g)(iv) by a fraction of which the numerator shall be the current market price per share (determined as provided in subsection 1(g)(vi)) of the Class A Common Stock on the Distribution Record Date less the amount of such cash distributions and Excess Payments applicable to one share (based on the pro rata portion of the aggregate amount of such cash distributions and

Conversion. Subject to Sections 1.9, 1.10 and 1.11, at the Effective Time, by virtue of the Merger and without any further action on the part of Parent, Merger Sub, the Company, any stockholder of the Company or any other Person: (i) each share of Company Capital Stock held in the Company’s treasury, owned by the Company or any direct or indirect wholly-owned Subsidiary of the Company or owned by Parent, Merger Sub or any subsidiary of Parent immediately prior to the Effective Time (each, a “Disregarded Share”), if any, shall be canceled without payment of any consideration with respect thereto; (ii) each share of Series A Preferred Stock that is not a Disregarded Share issued and outstanding immediately prior to the Effective Time shall be converted automatically into the right to receive (in each case of the foregoing clauses (1) through (5), as such portions are set forth in the Merger Consideration Spreadsheet): (1) an amount in cash equal to: (A) This Debenture shall be convertible into shares of Common Stock at the option applicable portion of the Holder, in whole or in part at any time and from time to time, after the Original Issue Date Aggregate Upfront Cash Consideration; minus (subject to the limitations on conversion set forth in Section 4(a)(ii) hereof). The number of shares of Common Stock issuable upon a conversion hereunder shall be determined by adding the sum of (iB) the quotient obtained by dividing (x) applicable portion of the outstanding principal amount of this Debenture to be converted and (y) the Conversion Price (as defined herein), and (ii) the amount equal to (I) the product of (x) the outstanding principal amount of this Debenture to be converted and (y) the product of (1) the quotient obtained by dividing .12 by 360 and Expense Fund Amount; plus (2) the number of days for which such principal amount was outstanding, divided by a certificate or book entry reflecting (IIA) the Conversion Price on applicable portion of the Conversion DateUpfront Stock Consideration minus (B) the applicable portion of the Indemnity Holdback Shares; plus (3) a contingent right to receive the applicable portion of the Milestone Payment in accordance with the terms of Section 1.7, provided, that if the Company shall have timely elected as and when such payments is required to pay the interest due on a Conversion Date in cash be made pursuant to the terms hereof; plus (4) a contingent right to receive any cash disbursements required to be made from the Expense Fund with respect to such share of Series A Preferred Stock to the former holder thereof in accordance with the terms of this Agreement, subsection as and when such disbursements are required to be made pursuant to the terms hereof; plus (ii5) a contingent right to receive a certificate or book entry reflecting the applicable portion of the Indemnity Holdback Shares that may be required to be issued with respect to such share to the former holder thereof in accordance with the terms of this Agreement, as and when such disbursements are required to be made pursuant to the terms hereof; and (iii) each share of Series A-1 Preferred Stock that is not a Disregarded Share issued and outstanding immediately prior to the Effective Time shall not be used converted automatically into the right to receive (in each case of the foregoing clauses (1) through (5), as such portions are set forth in the calculation of the number of shares of Common Stock issuable upon a conversion hereunder. (B) Notwithstanding anything to the contrary contained herein, if on any Conversion Date:Merger Consideration Spreadsheet): (1) the number of shares of Common Stock at the time authorized, unissued and unreserved for all purposes, or held as treasury stock, is insufficient to pay interest hereunder in shares of Common Stock; (2) the Underlying Shares issuable for such conversion (including any interest payable in shares) (x) are not registered for resale pursuant to an effective Underlying Shares Registration Statement and (y) may not be sold without volume restrictions pursuant to Rule 144(k) promulgated under the Securities Act (as defined in Section 6); (3) the Common Stock is not listed or quoted for trading on the OTC or on a Subsequent Market; (4) the Company has failed to timely satisfy its conversion obligations hereunder; or (5) the issuance of such shares of Common Stock would result in a violation of Sections 4(a)(ii), then, the Company may not pay interest in kind and must pay interest in cash by delivering, within three Trading Days of each applicable Conversion Date, an amount in cash equal to: (A) the applicable portion of the Aggregate Upfront Cash Consideration; minus (B) the applicable portion of the Expense Fund Amount; plus (2) a certificate or book entry reflecting (A) the applicable portion of the Upfront Stock Consideration minus (B) the applicable portion of the Indemnity Holdback Shares; plus (3) a contingent right to receive the applicable portion of the Milestone Payment in accordance with the terms of Section 1.7, as and when such payments is required to be made pursuant to the product terms hereof; plus (4) a contingent right to receive any cash disbursements required to be made from the Expense Fund with respect to such share of Series A-1 Preferred Stock to the former holder thereof in accordance with the terms of this Agreement, as and when such disbursements are required to be made pursuant to the terms hereof; plus (a5) a contingent right to receive a certificate or book entry reflecting the outstanding principal amount applicable portion of the Debentures to be converted on such Conversion Date and (b) the product of (x) the quotient obtained by dividing .12 by 360 and (y) the number of days for which such principal amount was outstanding. (C) This Debenture shall be convertible into shares of Common Stock at the option of the Holder, in whole or in part at any time and from time to time, after the Original Issue Date (subject to the limitations on conversion set forth in Section 4(a)(ii) hereof). The Holder shall effect conversions by delivering to the Company a completed notice substantially in the form attached hereto as Exhibit A (a "Conversion Notice"). The Conversion Notice shall set forth the remaining principal amount of this Debenture and all accrued and unpaid interest thereon subsequent to the conversion at issue. The date on which a Conversion Notice is delivered is the "Conversion Date." Unless the Holder is converting the entire principal amount outstanding under this Debenture, the Holder is not Indemnity Holdback Shares that may be required to physically surrender this Debenture be issued with respect to such share to the former holder thereof in accordance with the terms of this Agreement, as and when such disbursements are required to be made pursuant to the terms hereof; (iv) each share of Company in order Common Stock that is issued and outstanding immediately prior to effect conversions. Subject to Section 4(b), each Conversion Notice, once given, the Effective Time shall be irrevocable. Conversions hereunder cancelled and shall not have the effect right to receive any portion of lowering the Merger Consideration; and (v) each share of common stock, par value $0.0001 per share, of Merger Sub issued and outstanding principal amount of this Debenture plus all accrued and unpaid interest thereon in an amount equal immediately prior to the applicable conversion, which Effective Time shall be evidenced by notations made in the Conversion Notice. The Holder converted into and the Company shall maintain records showing the principal amount converted become one newly issued, fully paid, and the date non-assessable share of such conversions. In the event of any dispute or discrepancycommon stock, the records par value $0.0001 per share, of the Holder shall be controlling and determinative in the absence of manifest errorSurviving Company.

Conversion. (Aa) This Debenture shall be convertible into shares of Common Stock at the option Upon termination of the HolderMerger ---------- Agreement pursuant to Sections 8.2(d), in whole 8.3(a) or in part at any time 8.3(b) thereof (the "Conversion Date"), all Loans and from time to time, after the Original Issue Date (subject to the limitations on conversion set forth in Section 4(a)(ii) hereof). The number of shares of Common Stock issuable upon a conversion hereunder Obligations shall be determined by adding the sum of (i) the quotient obtained by dividing (x) the outstanding principal amount of this Debenture to automatically be converted and (ythe "Conversion") the Conversion Price (as defined herein), and (ii) the amount equal to (I) the product of (x) the outstanding principal amount of this Debenture to be converted and (y) the product of (1) the quotient obtained by dividing .12 by 360 and (2) the number of days for which such principal amount was outstanding, divided by (II) the Conversion Price on the Conversion Date, provided, that if the Company shall have timely elected to pay the interest due on a Conversion Date in cash pursuant to the terms hereof, subsection (ii) shall not be used in the calculation of into the number of shares of Common Stock issuable upon a conversion hereunderof Borrower equal to the aggregate amount of the Loans and Obligations (without duplication) then outstanding, divided by the Exchange Ratio calculated as of the Conversion Date, as such Exchange Ratio may have been adjusted pursuant to the terms of the Merger Agreement. (Bb) Notwithstanding anything The Conversion shall be deemed to have been made immediately before the contrary contained herein, if close of business on any the Conversion Date: , so that the rights of Lender under this Agreement and the Security Agreement shall cease at such time (1other than those rights that expressly survive the termination of this Agreement) and Lender shall be treated for all purposes as having become the record holder or holders of the Common Stock described in Section 3.6(a) at such time, and the number of shares of Common Stock to be received by Lender shall be determined at such time. (c) Borrower covenants that it will at all times reserve and keep available out of its authorized Common Stock, solely for the time authorizedpurpose of issuance upon conversion of the Loans and Obligations as herein provided, unissued such number of shares of Common Stock as shall be issuable upon the conversion of the entire Commitment. Borrower covenants that all shares of Common Stock which shall be so issuable shall be duly and unreserved validly issued and fully-paid and non- assessable. (d) Borrower covenants that if any shares of Common Stock required to be reserved for all purposesissuance upon conversion of the Loans and Obligations require registration with or approval of any Governmental Authority under any federal or state law before such shares may be issued upon conversion, Borrower will, at its expense and as expeditiously as possible, cause such shares to be duly registered or approved, as the case may be. (e) The issuance of certificates for shares of Common Stock upon the Conversion shall be made within one (1) Business Day of the Conversion Date without charge to Lender for any tax in respect of the issuance of such certificates, and such certificates shall be issued in the respective names of, or held in such names as treasury stockmay be directed by, is insufficient to pay interest hereunder in the holder of this Term Note. (f) To the extent that the Loans and Obligations are not converted into shares of Common Stock; (2) the Underlying Shares issuable for , such conversion (including any interest portion shall remain a secured debt of Borrower payable in shares) (x) are not registered for resale pursuant to an effective Underlying Shares Registration Statement and (y) may not be sold without volume restrictions pursuant to Rule 144(k) promulgated under accordance with the Securities Act (as defined in Section 6); (3) the Common Stock is not listed or quoted for trading on the OTC or on a Subsequent Market; (4) the Company has failed to timely satisfy its conversion obligations hereunder; or (5) the issuance of such shares of Common Stock would result in a violation of Sections 4(a)(ii), then, the Company may not pay interest in kind and must pay interest in cash by delivering, within three Trading Days of each applicable Conversion Date, an amount in cash equal to the product of (a) the outstanding principal amount of the Debentures to be converted on such Conversion Date and (b) the product of (x) the quotient obtained by dividing .12 by 360 and (y) the number of days for which such principal amount was outstanding. (C) This Debenture shall be convertible into shares of Common Stock at the option of the Holder, in whole or in part at any time and from time to time, after the Original Issue Date (subject to the limitations on conversion set forth in Section 4(a)(ii) hereof). The Holder shall effect conversions by delivering to the Company a completed notice substantially in the form attached hereto as Exhibit A (a "Conversion Notice"). The Conversion Notice shall set forth the remaining principal amount terms of this Debenture and all accrued and unpaid interest thereon subsequent to the conversion at issue. The date on which a Conversion Notice is delivered is the "Conversion Date." Unless the Holder is converting the entire principal amount outstanding under this Debenture, the Holder is not be required to physically surrender this Debenture to the Company in order to effect conversions. Subject to Section 4(b), each Conversion Notice, once given, shall be irrevocable. Conversions hereunder shall have the effect of lowering the outstanding principal amount of this Debenture plus all accrued and unpaid interest thereon in an amount equal to the applicable conversion, which shall be evidenced by notations made in the Conversion Notice. The Holder and the Company shall maintain records showing the principal amount converted and the date of such conversions. In the event of any dispute or discrepancy, the records of the Holder shall be controlling and determinative in the absence of manifest error.Agreement

Conversion. (i) Conversion at Option of Holder. (A) This Debenture ------------------------------ shall be convertible into shares of Common Stock at the option of the Holder, in whole or in part at any time and from time to time, after the Original Issue Date (subject to the limitations on conversion set forth in Section 4(a)(ii) hereof). The number of shares of Common Stock issuable upon a conversion hereunder shall be determined by adding equals the sum of (i) the quotient obtained by dividing (x) the outstanding principal amount of this Debenture to be converted and by (y) the Conversion Price (as defined herein), and (ii) the amount equal to (I) the product of (x) the outstanding principal amount of this Debenture to be converted and (y) the product of (1) the quotient obtained by dividing .12 by 360 and (2) the number of days for which such principal amount was outstanding, divided by (II) the Conversion Price on the Conversion Date, provided, that if -------- the Company Holder shall have timely elected to pay receive the interest due on a Conversion Date in cash pursuant to the terms hereofcash, subsection (ii) shall not be used in the calculation of the number of shares of Common Stock issuable upon a conversion hereunder. (B) Notwithstanding anything to the contrary contained herein, if on any Conversion Date: (1) the number of shares of Common Stock at the time authorized, unissued and unreserved for all purposes, or held as treasury stock, is insufficient to pay interest hereunder in shares of Common Stock; (2) the Underlying Shares issuable for such conversion (including any interest payable in shares) (x) are not registered for resale pursuant to an effective Underlying Shares Registration Statement and (y) may not be sold without volume restrictions pursuant to Rule 144(k) promulgated under the Securities Act (as defined in Section 6); (3) the Common Stock is not listed or quoted for trading on the OTC or on a Subsequent Market; (4) the Company has failed to timely satisfy its conversion obligations hereunder; or (5) the issuance of such shares of Common Stock would result in a violation of Sections 4(a)(ii), then, the Company may not pay interest in kind and must pay interest in cash by delivering, within three Trading Days of each applicable Conversion Date, an amount in cash equal to the product of (a) the outstanding principal amount of the Debentures to be converted on such Conversion Date and (b) the product of (x) the quotient obtained by dividing .12 by 360 and (y) the number of days for which such principal amount was outstanding. (C) This Debenture shall be convertible into shares of Common Stock at the option of the Holder, in whole or in part at any time and from time to time, after the Original Issue Date (subject to the limitations on conversion set forth in Section 4(a)(ii) hereof). The Holder shall effect conversions by delivering to the Company a completed notice substantially in the form attached hereto as Exhibit A (a --------- "Conversion Notice") including a completed Conversion Schedule in the form of ----------------- Schedule 1 to the Conversion Notice (on each Conversion Date, the "Conversion ---------- ---------- Schedule"). The Conversion Notice Schedule shall set forth the remaining principal -------- amount of this Debenture and all accrued and unpaid interest thereon subsequent to the conversion at issue. The date on which a Conversion Notice is delivered is the "Conversion Date." Unless the Holder is converting the entire principal --------------- amount outstanding under this Debenture, the Holder is not be required to physically surrender this Debenture to the Company in order to effect conversions. Subject to Section 4(b), each Conversion Notice, once given, shall be irrevocable. Conversions hereunder shall have the effect of lowering the outstanding principal amount of this Debenture plus all accrued and unpaid interest thereon in an amount equal to the applicable conversion, which shall be evidenced by notations made entries set forth in the Conversion NoticeSchedule. The Holder and the Company shall maintain records showing the principal amount converted and the date of such conversions. In the event of any dispute or discrepancy, the records of the Holder shall be controlling and determinative in the absence of manifest error.

Conversion. (Aa) This Debenture shall be convertible The holder of this Security is entitled at any time on or after December 7, 2001 and before the close of business on December 7, 2005 (or, in case the holder hereof has exercised his right to require the Company to repurchase this Security or a portion hereof pursuant to Section 3 hereof, then in respect of this Security or such portion hereof, as the case may be, until and including, but (unless the Company defaults in making the payment due upon repurchase) not after, the close of business on the Repurchase Date) to convert this Security (or any portion of the principal amount hereof that is an integral multiple of $1,000), into fully paid and nonassessable shares (calculated as to each conversion to the nearest 1/100 of a share) of Common Stock of the Company at the rate of 101.9025 shares of Common Stock for each $1,000 principal amount of Security (or at the option then current adjusted rate if an adjustment has been made as provided below) (the "Conversion Rate") by surrender of this Security, duly endorsed or assigned to the Company or in blank to the Company at the Designated Office, accompanied by written notice to the Company that the holder hereof elects to convert this Security (or if less than the entire principal amount hereof is to be converted, specifying the portion hereof to be converted). Notwithstanding the foregoing, unless the holder of this Security notifies the Company to the contrary, such holder shall be deemed for all purposes to have converted this Security, subject only to surrender of this Security against delivery of the Holder, in whole Shares and cash issuable upon such conversion (which surrender may take place before or in part at any time and from time to time, after the Original Issue Date (date of such deemed conversion, without affecting the availability thereof), immediately prior to the close of business on December 7, 2005, if the Closing Price of the Common Stock on the immediately preceding Trading Day exceeds 115% of the Conversion Price. Upon surrender of this Security for conversion, the holder will be entitled to receive the interest accruing on the principal amount of this Security then being converted and unpaid to such date of conversion. Subject to Section 2(b) below, no payment or adjustment is to be made on conversion for dividends on the Common Stock issued on conversion hereof. No fractions of shares or scrip representing fractions of shares will be issued on conversion, but instead of any fractional interest, the Company shall pay a cash adjustment, computed on the basis of the Closing Price of the Common Stock on the date of conversion, or, at its option, the Company shall round up to the next higher whole share. Notwithstanding any other provision of this Security, the Company shall, if the holder so elects, deliver the shares of Common Stock issuable upon conversion of this Security to any third party designated in writing by the holder. Notwithstanding the foregoing, no holder of this Security that is subject to the limitations on conversion set forth restrictions of Section 4 of the Bank Holding Company Act of 1956, as amended (the "BHCA") (a "BHCA Person") shall have the right to convert this Security if, after giving effect to such conversion, the BHCA Person and its affiliates and transferees would own or be deemed to own shares of Common Stock in Section 4(a)(ii) hereof). The excess of either the maximum number of shares of Common Stock issuable upon which the BHCA Person is permitted to own under the BHCA and the regulations of the Board of Governors of the Federal Reserve System thereunder or such lower number as the relevant BHCA Person may have requested in writing to the Company. Any Security held by an assignee or transferee of a holder subject to the restriction on conversion hereunder in this paragraph shall continue to be determined by adding subject to the sum of same restriction on conversion unless such Security was assigned or transferred (i) to the quotient obtained by dividing (x) public in an offering registered under the outstanding principal amount of this Debenture to be converted and (y) the Conversion Price (as defined herein)Securities Act, and (ii) in a transaction pursuant to Rule 144 or 144A under the amount equal to (I) the product Securities Act in which no person acquires Securities convertible into more than 2% of (x) the outstanding principal amount Common Stock, (iii) in a single transaction to a The holder of this Debenture Security, by acceptance thereof, shall be deemed to have agreed to the foregoing restriction on transfers. (b) The Conversion Rate shall be converted and (y) the product of subject to adjustments from time to time as follows: (1) the quotient obtained by dividing .12 by 360 and (2) the number of days for which such principal amount was outstanding, divided by (II) the Conversion Price on the Conversion Date, provided, that if In case the Company shall have timely elected to pay or make a dividend or other distribution on any class of capital stock of the interest due Company payable in shares of Common Stock, the Conversion Rate in effect at the opening of business on the day following the Determination Date for such dividend or other distribution shall be increased by dividing such Conversion Rate by a Conversion Date in cash pursuant to fraction of which the terms hereof, subsection (ii) numerator shall not be used in the calculation of the number of shares of Common Stock issuable upon a conversion hereunder. (B) Notwithstanding anything outstanding at the close of business on such Determination Date and the denominator shall be the sum of such number of shares and the total number of shares constituting such dividend or other distribution, such increase to become effective immediately after the contrary contained herein, if opening of business on any Conversion the day following such Determination Date: . For the purposes of this paragraph (1) ), the number of shares of Common Stock at any time outstanding shall not include shares held in the time authorizedtreasury of the Company or issuable upon the exercise or conversion of outstanding options, unissued and unreserved for all purposes, warrants or held as treasury stock, is insufficient to pay interest hereunder other securities but shall include shares issuable in respect of scrip certificates issued in lieu of fractions of shares of Common Stock;. The Company will not pay any dividend or make any distribution on shares of Common Stock held in the treasury of the Company. (2) Subject to the Underlying Shares issuable for such conversion last sentence of paragraph (including any interest payable 7) of this Section 2(b), in shares) (x) are not registered for resale pursuant case the Company shall issue rights, options or warrants to an effective Underlying Shares Registration Statement and (y) may not be sold without volume restrictions pursuant to Rule 144(k) promulgated under the Securities Act (as defined in Section 6); (3) the all holders of its Common Stock is not listed entitling them to subscribe for or quoted for trading on the OTC or on a Subsequent Market; (4) the Company has failed to timely satisfy its conversion obligations hereunder; or (5) the issuance of such shares of Common Stock would result in a violation of Sections 4(a)(ii), then, the Company may not pay interest in kind and must pay interest in cash by delivering, within three Trading Days of each applicable Conversion Date, an amount in cash equal to the product of (a) the outstanding principal amount of the Debentures to be converted on such Conversion Date and (b) the product of (x) the quotient obtained by dividing .12 by 360 and (y) the number of days for which such principal amount was outstanding. (C) This Debenture shall be convertible into purchase shares of Common Stock at a price per share less than the option current market price per share (determined as provided in paragraph (8) of this Section 2(b)) of the HolderCommon Stock on the Determination Date for such distribution, the Conversion Rate in whole effect at the opening of business on the day following such Determination Date shall be increased by dividing such Conversion Rate by a fraction of which the numerator shall be the number of shares of Common Stock outstanding at the close of business on such Determination Date plus the number of shares of Common Stock which the aggregate of the offering price of the total number of shares of Common Stock so offered for subscription or in part purchase would purchase at such current market price and the denominator shall be the number of shares of Common Stock outstanding at the close of business on such Determination Date plus the number of shares of Common Stock so offered for subscription or purchase, such increase to become effective immediately after the opening of business on the day following such Determination Date. For the purposes of this paragraph (2), the number of shares of Common Stock at any time and from time to timeoutstanding shall not include shares held in the treasury of the Company or issuable upon the exercise or conversion of outstanding options, after the Original Issue Date (subject to the limitations on conversion set forth warrants or other securities but shall include shares issuable in Section 4(a)(ii) hereof)respect of scrip certificates issued in lieu of fractions of shares of Common Stock. The Holder shall effect conversions by delivering to the Company a completed notice substantially will not issue any rights, options or warrants in respect of shares of Common Stock held in the form attached hereto as Exhibit A (a "Conversion Notice"). The Conversion Notice shall set forth the remaining principal amount of this Debenture and all accrued and unpaid interest thereon subsequent to the conversion at issue. The date on which a Conversion Notice is delivered is the "Conversion Date." Unless the Holder is converting the entire principal amount outstanding under this Debenture, the Holder is not be required to physically surrender this Debenture to the Company in order to effect conversions. Subject to Section 4(b), each Conversion Notice, once given, shall be irrevocable. Conversions hereunder shall have the effect of lowering the outstanding principal amount of this Debenture plus all accrued and unpaid interest thereon in an amount equal to the applicable conversion, which shall be evidenced by notations made in the Conversion Notice. The Holder and the Company shall maintain records showing the principal amount converted and the date of such conversions. In the event of any dispute or discrepancy, the records treasury of the Holder shall be controlling and determinative in the absence of manifest errorCompany.

Conversion. Subject to Sections 1.8, 1.9 1.10, 1.11, 1.12 and 11.1(f), at the Effective Time, by virtue of the Merger and without any further action on the part of Parent, Merger Sub, the Company, any stockholder of the Company or any other Person: (i) each share of Company Capital Stock held in the Company’s treasury or owned by Parent, Merger Sub, the Company or any direct or indirect wholly owned Subsidiary of Parent, Merger Sub or the Company immediately prior to the Effective Time (“Disregarded Shares”), if any, shall be extinguished and cancelled without payment of any consideration in respect thereof; (ii) each share of Outstanding Preferred Stock that is not a Disregarded Share or a Dissenting Share, shall be converted automatically into the right to receive: (A) This Debenture shall be convertible into shares of Common Stock at the option of the Holder, in whole or in part at any time and from time to time, after the Original Issue Date (subject to the limitations on conversion set forth in Section 4(a)(ii) hereof). The number of shares of Common Stock issuable upon a conversion hereunder shall be determined by adding the sum of (i) the quotient obtained by dividing (x) the outstanding principal amount of this Debenture to be converted and (y) the Conversion Price (as defined herein), and (ii) the amount equal to (I) the product of (x) the outstanding principal amount of this Debenture to be converted and (y) the product of (1) the quotient obtained by dividing .12 by 360 and (2) the number of days for which such principal amount was outstanding, divided by (II) the Conversion Price on the Conversion Date, provided, that if the Company shall have timely elected to pay the interest due on a Conversion Date in cash pursuant to the terms hereof, subsection (ii) shall not be used in the calculation of the number of shares of Common Stock issuable upon a conversion hereunder. (B) Notwithstanding anything to the contrary contained herein, if on any Conversion Date: (1) the number of shares of Common Stock at the time authorized, unissued and unreserved for all purposes, or held as treasury stock, is insufficient to pay interest hereunder in shares of Common Stock; (2) the Underlying Shares issuable for such conversion (including any interest payable in shares) (x) are not registered for resale pursuant to an effective Underlying Shares Registration Statement and (y) may not be sold without volume restrictions pursuant to Rule 144(k) promulgated under the Securities Act (as defined in Section 6); (3) the Common Stock is not listed or quoted for trading on the OTC or on a Subsequent Market; (4) the Company has failed to timely satisfy its conversion obligations hereunder; or (5) the issuance of such shares of Common Stock would result in a violation of Sections 4(a)(ii), then, the Company may not pay interest in kind and must pay interest in cash by delivering, within three Trading Days of each applicable Conversion Date, an amount in cash equal to the product of Per Share Amount, minus (a2) the outstanding principal Adjustment Escrow Contribution Amount applicable to such share of Outstanding Preferred Stock, minus (3) the Indemnification Escrow Contribution Amount applicable to such share of Outstanding Preferred Stock, minus (4) the Expense Fund Contribution Amount applicable to such share of Outstanding Preferred Stock; plus (B) any cash payments required to be made from the Adjustment Escrow Fund with respect to such share of Outstanding Preferred Stock in accordance with the terms of this Agreement, as and when such disbursements are required to be made; plus (C) any cash payments required to be made from the Indemnification Escrow Fund with respect to such share of Outstanding Preferred Stock in accordance with the terms of this Agreement, as and when such disbursements are required to be made; plus (D) any cash payment required to be made with respect to such share of Outstanding Preferred Stock to the former holder thereof in accordance with the terms of Section 1.7(d)(ii), as and when such payment is required to be made; plus (E) any cash payments required to be made from the Expense Fund with respect to such share of Outstanding Preferred Stock in accordance with Section 11.1(f), as and when such disbursements are required to be made; (iii) each share of Outstanding Common Stock that is not a Disregarded Share or a Dissenting Share, shall be converted automatically into the right to receive: (A) (1) an amount in cash equal to the Per Share Amount, minus (2) the Adjustment Escrow Contribution Amount applicable to such share of Outstanding Common Stock, minus (3) the Indemnification Escrow Contribution Amount applicable to such share of Outstanding Common Stock, minus (4) the Expense Fund Contribution Amount applicable to such share of Outstanding Common Stock; plus (B) any cash payments required to be made from the Adjustment Escrow Fund with respect to such share of Outstanding Common Stock in accordance with the terms of this Agreement, as and when such disbursements are required to be made; plus (C) any cash payments required to be made from the Indemnification Escrow Fund with respect to such share of Outstanding Common Stock in accordance with the terms of this Agreement, as and when such disbursements are required to be made; plus (D) any cash payment required to be made with respect to such share of Outstanding Common Stock to the former holder thereof in accordance with the terms of Section 1.7(d)(ii), as and when such payment is required to be made; plus (E) any cash payments required to be made from the Expense Fund with respect to such share of Outstanding Common Stock in accordance with Section 11.1(f), as and when such disbursements are required to be made; and (iv) each share of the Debentures common stock of Merger Sub issued and outstanding immediately prior to the Effective Time shall be converted on such Conversion Date automatically into one fully paid and non-assessable share of common stock of the Surviving Corporation. From and after the Effective Time, all certificates (bif any) representing the product common stock of (x) the quotient obtained by dividing .12 by 360 and (y) Merger Sub shall be deemed for all purposes to represent the number of days for which such principal amount was outstanding. (C) This Debenture shall be convertible into shares of Common Stock at the option common stock of the Holder, Surviving Corporation into which they were converted in whole or in part at any time and from time to time, after accordance with the Original Issue Date (subject to the limitations on conversion set forth in Section 4(a)(ii) hereof). The Holder shall effect conversions by delivering to the Company a completed notice substantially in the form attached hereto as Exhibit A (a "Conversion Notice"). The Conversion Notice shall set forth the remaining principal amount of this Debenture and all accrued and unpaid interest thereon subsequent to the conversion at issue. The date on which a Conversion Notice is delivered is the "Conversion Dateimmediately preceding sentence." Unless the Holder is converting the entire principal amount outstanding under this Debenture, the Holder is not be required to physically surrender this Debenture to the Company in order to effect conversions. Subject to Section 4(b), each Conversion Notice, once given, shall be irrevocable. Conversions hereunder shall have the effect of lowering the outstanding principal amount of this Debenture plus all accrued and unpaid interest thereon in an amount equal to the applicable conversion, which shall be evidenced by notations made in the Conversion Notice. The Holder and the Company shall maintain records showing the principal amount converted and the date of such conversions. In the event of any dispute or discrepancy, the records of the Holder shall be controlling and determinative in the absence of manifest error.

Conversion. (Aa) This Debenture Subject to the conditions described in clauses (b) through (f) below and to Section 7.10, and upon compliance with the provisions of this Article 7, a Noteholder shall have the right, at such Noteholder’s option, to convert all or any portion (if the portion to be convertible into converted is $1,000 principal amount or an integral multiple thereof) of such Notes at any time prior to June 15, 2027 at a rate (the “Conversion Rate”) of 39.3459 shares of Common Stock at (subject to adjustment by the option Issuer as provided in Section 7.03 and 7.01(f)) per $1,000 principal amount Note (the “Conversion Obligation”) under the circumstances and during the periods set forth below. On and after June 15, 2027, regardless of the Holderconditions described in clause (b) through (f) below, in whole but subject to Section 7.10 and upon compliance with the provisions of this Article 7, a Noteholder shall have the right, at such Noteholder’s option, to convert all or in part any portion (if the portion to be converted is $1,000 principal amount or an integral multiple thereof) of such Note at any time and from time to time, after the Original Issue Date (subject prior to the limitations Close of Business on conversion set forth the Business Day immediately preceding the Maturity Date. (b) A Noteholder shall have the right, at such Noteholder’s option, to convert its Notes prior to June 15, 2027, during the five Business Day period immediately after any 10 consecutive Trading Day period (the “Measurement Period”) in Section 4(a)(ii) hereof). The number of shares of Common Stock issuable upon a conversion hereunder shall be determined by adding which the sum of (i) the quotient obtained by dividing (x) the outstanding Trading Price per $1,000 principal amount of this Debenture Notes for each day of such Measurement Period was less than 98% of the product of the Closing Sale Price of the Common Stock on such date and the Conversion Rate on such date, all (except the Trading Price) as determined by the Trustee. The Trustee shall have no obligation to determine the Trading Price of the Notes unless the Issuer requests such determination. The Issuer shall have no obligation to make such request unless a Noteholder or group of Noteholders holding at least $1,000,000 aggregate principal amount of Notes provides the Issuer with reasonable evidence that the Trading Price per $1,000 principal amount of the Notes would be converted less than 98% of the product of the Closing Sale Price at such time and the then-applicable Conversion Rate, at which time the Issuer shall instruct the Trustee to determine the Trading Price of the Notes beginning on the next Trading Day and on each successive Trading Day until the Trading Price per $1,000 principal amount of the Notes is greater than or equal to 98% of the product of the Closing Sale Price on such date and the then-applicable Conversion Rate. If, to the Issuer’s knowledge, the Trading Price condition set forth above has been met, the Issuer shall so notify the Noteholders. If at any time after the Trading Price condition set forth above has been met, to the Issuer’s knowledge, the Trading Price per $1,000 principal amount of Notes is greater than 98% of the product of the Closing Sale Price on such date and the then-applicable Conversion Rate, the Issuer shall so notify the Noteholders. (yc) A Noteholder shall have the right, at such Noteholder’s option, to convert Notes during any calendar quarter after the quarter ending March 31, 2008, and only during such calendar quarter, if the Closing Sale Price for the Common Stock for at least 20 Trading Days during the period of 30 consecutive Trading Days ending on the last Trading Day of the previous calendar quarter exceeds 130% of the Conversion Price (as defined herein)the “Conversion Trigger Price”) on such last Trading Day, which Conversion Price shall be subject to adjustment in accordance with this Article 7. (d) In the event that the Issuer has delivered a notice of redemption in accordance with Section 11.4 of the Original Indenture and (ii) the amount equal to (I) the product of (x) the outstanding principal amount Section 3.03 of this Debenture Ninth Supplemental Indenture to be converted and (y) the product Noteholders, a Noteholder may convert Notes at any time prior to the Close of (1) the quotient obtained by dividing .12 by 360 and (2) the number of days for which such principal amount was outstanding, divided by (II) the Conversion Price Business on the Conversion second Business Day immediately preceding the corresponding Redemption Date, ; provided, however, that if a Noteholder who has delivered a Fundamental Change Repurchase Notice with respect to a Note may not convert such Note until the Company shall have timely elected to pay Noteholder has withdrawn the interest due on a Conversion Date Fundamental Change Repurchase Notice in cash pursuant to accordance with the terms hereof, subsection (ii) shall not be used in the calculation of the number of shares Note and this Ninth Supplemental Indenture. (e) (i) In the event that the Issuer elects to: (A) distribute to all holders of Common Stock issuable upon rights entitling them to purchase, for a conversion hereunder.period expiring within 60 days after the Record Date for such distribution, Common Stock at a price less than the Closing Sale Price of the Common Stock for the Trading Day immediately preceding the date of declaration of such distribution; or (B) Notwithstanding anything distribute to the contrary contained herein, if on any Conversion Date: (1) the number of shares of Common Stock at the time authorized, unissued and unreserved for all purposes, or held as treasury stock, is insufficient to pay interest hereunder in shares holders of Common Stock;, assets or debt securities of the Issuer or rights to purchase the Issuer’s securities, which distribution has a per share value (as determined by the Board of Directors) exceeding 15% of the Closing Sale Price of the Common Stock on the day immediately preceding the date of declaration of such distribution, then, in either case, Noteholders may surrender the Notes for conversion at any time on and after the date that the Issuer provides notice to Noteholders referred to in the next sentence until the earlier of the Close of Business on the Business Day immediately preceding the Ex-Dividend Date for such distribution or the date the Issuer announces that such distribution will not take place. The Issuer shall notify Noteholders of any distribution referred to in either clause (A) or clause (B) above and of the resulting conversion right no later than the 25th scheduled Trading Day prior to the Ex-Dividend Date for such distribution. (2ii) If the Underlying Shares issuable Issuer is a party to any transaction or event that constitutes a Fundamental Change, a Noteholder may surrender Notes for conversion at any time from and including the 25th scheduled Trading Day prior to the anticipated Effective Date of such conversion transaction or event until and including the related Fundamental Change Repurchase Date (including any interest payable the “Fundamental Change Conversion Period”) and, upon such surrender in sharesconnection with a Fundamental Change occurring on or prior to June 17, 2013, the Noteholder shall be entitled to the increase in the Conversion Rate, if any, specified in Section 7.01(g). The Issuer shall give notice to all record Noteholders and the Trustee, and issue a press release, no later than 30 scheduled Trading Days prior to the anticipated Effective Date of such transaction. (iii) (x) are not registered for resale If the Issuer is a party to a consolidation, merger, binding share exchange or sale or conveyance of all or substantially all of its properties and assets, in each case pursuant to an which the Common Stock would be exchanged for cash, securities and/or other property (whether or not such transaction or event constitutes a Fundamental Change), then the Noteholders shall have the right to convert Notes at any time from and including the 25th scheduled Trading Day prior to the date announced by the Issuer as the anticipated effective Underlying Shares Registration Statement date of the transaction and (yuntil and including the date that is 15 calendar days after the date that is the effective date of such transaction; provided such transaction does not otherwise constitute a Fundamental Change to which the provisions of Section 7.01(e)(ii) may not be sold without volume restrictions pursuant shall apply. The Issuer shall notify Noteholders at least 25 scheduled Trading Days prior to Rule 144(k) promulgated under the Securities Act (as defined in Section 6);anticipated effective date of such transaction. (3f) The Notes shall be convertible at any time beginning on the first Business Day after any 30 consecutive Trading Day period during which the Common Stock is not listed or quoted for trading on the OTC or on a Subsequent Market; (4) the Company has failed to timely satisfy its conversion obligations hereunder; or (5) the issuance of such shares of Common Stock would result in a violation of Sections 4(a)(ii), then, the Company may not pay interest in kind and must pay interest in cash by delivering, within three Trading Days of each applicable Conversion Date, an amount in cash equal to the product of (a) the outstanding principal amount of the Debentures to be converted on such Conversion Date and (b) the product of (x) the quotient obtained by dividing .12 by 360 and (y) the number of days for which such principal amount was outstandingU.S. national securities exchange. (C) This Debenture shall be convertible into shares of Common Stock at the option of the Holder, in whole or in part at any time and from time to time, after the Original Issue Date (subject to the limitations on conversion set forth in Section 4(a)(ii) hereof). The Holder shall effect conversions by delivering to the Company a completed notice substantially in the form attached hereto as Exhibit A (a "Conversion Notice"). The Conversion Notice shall set forth the remaining principal amount of this Debenture and all accrued and unpaid interest thereon subsequent to the conversion at issue. The date on which a Conversion Notice is delivered is the "Conversion Date." Unless the Holder is converting the entire principal amount outstanding under this Debenture, the Holder is not be required to physically surrender this Debenture to the Company in order to effect conversions. Subject to Section 4(b), each Conversion Notice, once given, shall be irrevocable. Conversions hereunder shall have the effect of lowering the outstanding principal amount of this Debenture plus all accrued and unpaid interest thereon in an amount equal to the applicable conversion, which shall be evidenced by notations made in the Conversion Notice. The Holder and the Company shall maintain records showing the principal amount converted and the date of such conversions. In the event of any dispute or discrepancy, the records of the Holder shall be controlling and determinative in the absence of manifest error.

Conversion. (Aa) This Debenture shall be convertible The holder of this Security is entitled at any time on or after March 21, 2002 and before the close of business on March 21, 2006 (or, in case the holder hereof has exercised his right to require the Company to repurchase this Security or a portion hereof pursuant to Section 3 hereof, then in respect of this Security or such portion hereof, as the case may be, until and including, but (unless the Company defaults in making the payment due upon repurchase) not after, the close of business on the Repurchase Date) to convert this Security (or any portion of the principal amount hereof that is an integral multiple of $1,000), into fully paid and nonassessable shares (calculated as to each conversion to the nearest 1/100 of a share) of Common Stock of the Company at the rate of 116.9152 shares of Common Stock for each $1,000 principal amount of Security (or at the option current adjusted rate if an adjustment has been made as provided below) (the "Conversion Rate") by surrender of this Security, duly endorsed or assigned to the Company or in blank to the Company at the Designated Office, accompanied by written notice to the Company that the holder hereof elects to convert this Security (or if less than the entire principal amount hereof is to be converted, specifying the portion hereof to be converted). Notwithstanding the foregoing, unless the holder of this Security notifies the Company to the contrary, such holder shall be deemed for all purposes to have converted this Security, subject only to surrender of this Security against delivery of the Holder, in whole Shares and cash issuable upon such conversion (which surrender may take place before or in part at any time and from time to time, after the Original Issue Date (date of such deemed conversion, without affecting the availability thereof), immediately prior to the close of business on March 21, 2006, if the Closing Price of the Common Stock on the immediately preceding Trading Day exceeds 115% of the Conversion Price. Subject to Section 2(b) below, no payment or adjustment is to be made on conversion for dividends on the Common Stock issued on conversion hereof. No fractions of shares or scrip representing fractions of shares will be issued on conversion, but instead of any fractional interest, the Company shall pay a cash adjustment, computed on the basis of the Closing Price of the Common Stock on the date of conversion, or, at its option, the Company shall round up to the next higher whole share. Notwithstanding any other provision of this Security, the Company shall, if the holder so elects, deliver the shares of Common Stock issuable upon conversion of this Security to any third party designated in writing by the holder. Notwithstanding the foregoing, no holder of this Security that is subject to the limitations on conversion set forth restrictions of Section 4 of the Bank Holding Company Act of 1956, as amended (the "BHCA") (a "BHCA Person") shall have the right to convert this Security if, after giving effect to such conversion, the BHCA Person and its affiliates and transferees would own or be deemed to own shares of Common Stock in Section 4(a)(ii) hereof). The excess of either the maximum number of shares of Common Stock issuable upon which the BHCA Person is permitted to own under the BHCA and the regulations of the Board of Governors of the Federal Reserve System thereunder or such lower number as the relevant BHCA Person may have requested in writing to the Company. Any Security held by an assignee or transferee of a holder subject to the restriction on conversion hereunder in this paragraph shall continue to be determined by adding subject to the sum of same restriction on conversion unless such Security was assigned or transferred (i) to the quotient obtained by dividing (x) public in an offering registered under the outstanding principal amount of this Debenture to be converted and (y) the Conversion Price (as defined herein)Securities Act, and (ii) in a transaction pursuant to Rule 144 or 144A under the amount equal to (I) the product Securities Act in which no person acquires Securities convertible into more than 2% of (x) the outstanding principal amount Common Stock, (iii) in a single transaction to a third party who acquires a majority of the Common Stock without regard to the conversion of any Security so transferred or, (iv) in any other manner permitted under the BHCA. The Company may rely on the representation of the relevant BHCA Person that a transfer has been made in a manner which permits conversion of such Security. The holder of this Debenture Security, by acceptance thereof, shall be deemed to be converted and (y) the product of (1) the quotient obtained by dividing .12 by 360 and (2) the number of days for which such principal amount was outstanding, divided by (II) the Conversion Price on the Conversion Date, provided, that if the Company shall have timely elected to pay the interest due on a Conversion Date in cash pursuant agreed to the terms hereof, subsection (ii) shall not be used in the calculation of the number of shares of Common Stock issuable upon a conversion hereunderforegoing restriction on transfers. (Bb) Notwithstanding anything The Conversion Rate shall be subject to the contrary contained herein, if on any Conversion Dateadjustments from time to time as follows: (1) In case the number Company shall pay or make a dividend or other distribution on any class of shares capital stock of Common Stock at the time authorized, unissued and unreserved for all purposes, or held as treasury stock, is insufficient to pay interest hereunder Company payable in shares of Common Stock; (2) , the Underlying Shares issuable Conversion Rate in effect at the opening of business on the day following the Determination Date for such conversion (including any interest payable in shares) (x) are not registered for resale pursuant to an effective Underlying Shares Registration Statement and (y) may not dividend or other distribution shall be sold without volume restrictions pursuant to Rule 144(k) promulgated under the Securities Act (as defined in Section 6); (3) the Common Stock is not listed or quoted for trading on the OTC or on a Subsequent Market; (4) the Company has failed to timely satisfy its conversion obligations hereunder; or (5) the issuance of such shares of Common Stock would result in a violation of Sections 4(a)(ii), then, the Company may not pay interest in kind and must pay interest in cash increased by delivering, within three Trading Days of each applicable Conversion Date, an amount in cash equal to the product of (a) the outstanding principal amount of the Debentures to be converted on dividing such Conversion Date and (b) Rate by a fraction of which the product of (x) the quotient obtained by dividing .12 by 360 and (y) numerator shall be the number of days for which such principal amount was outstanding. (C) This Debenture shall be convertible into shares of Common Stock at the option of the Holder, in whole or in part at any time and from time to time, after the Original Issue Date (subject to the limitations on conversion set forth in Section 4(a)(ii) hereof). The Holder shall effect conversions by delivering to the Company a completed notice substantially in the form attached hereto as Exhibit A (a "Conversion Notice"). The Conversion Notice shall set forth the remaining principal amount of this Debenture and all accrued and unpaid interest thereon subsequent to the conversion at issue. The date on which a Conversion Notice is delivered is the "Conversion Date." Unless the Holder is converting the entire principal amount outstanding under this Debenture, the Holder is not be required to physically surrender this Debenture to the Company in order to effect conversions. Subject to Section 4(b), each Conversion Notice, once given, shall be irrevocable. Conversions hereunder shall have the effect of lowering the outstanding principal amount of this Debenture plus all accrued and unpaid interest thereon in an amount equal to the applicable conversion, which shall be evidenced by notations made in the Conversion Notice. The Holder and the Company shall maintain records showing the principal amount converted and the date of such conversions. In the event of any dispute or discrepancy, the records of the Holder shall be controlling and determinative in the absence of manifest error.of

Conversion. (Aa) This Debenture Upon the closing of a Qualified Financing, the Outstanding Balance shall be convertible into shares automatically converted, in whole and not in part, without any further action on the part of Common Stock at the option of Company or the Holder, into Qualified Financing Securities on the same terms as investors in whole or the Qualified Financing, in part at any time and from time an amount equal to time, after quotient obtained by dividing the Original Issue Date (subject to Outstanding Balance by the limitations on conversion set forth in Section 4(a)(ii) hereof). The number of shares of Common Stock issuable upon a conversion hereunder shall be determined by adding the sum lesser of (i) seventy five percent (75%) of the quotient obtained by dividing (x) highest price per share paid for the outstanding principal amount of this Debenture to be converted and (y) the Conversion Price (as defined herein), Qualified Financing Securities and (ii) the price per share obtained by dividing $1,500,000 by the number of shares outstanding prior to the Qualified Financing, calculated on a fully diluted basis (excluding Qualified Financing Securities, shares issuable on the Notes, and shares reserved but unawarded and unallocated under the Company’s equity incentive plan). In no event shall the number of shares used in this calculation be fewer than the number of shares used in conjunction with the Qualified Financing to calculate, from the pre-money valuation of the business, the fully diluted per-share price of the Qualified Financing. (b) In the event that prior to a Qualified Financing there is a Change in Control, the Holder shall receive, in full satisfaction of any debts owing on this Note, an amount equal to (I) the product of (x) the outstanding principal amount of this Debenture to be converted and (y) the product of (1) the quotient obtained obtined by dividing .12 $1,500,000 by 360 and (2) the number of days for which such principal amount was outstanding, divided by (II) the Conversion Price on the Conversion Date, provided, that if the Company shall have timely elected to pay the interest due on a Conversion Date in cash pursuant to the terms hereof, subsection (ii) shall not be used in the calculation of the number of shares of Common Stock capital stock of the Company then-outstanding, calculated on a fully diluted basis (excluding Qualified Financing Securities, shares issuable upon a conversion hereunderon the Notes, and shares reserved and but unawarded and unallocated under the Company’s equity incentive plan). (Bc) Notwithstanding anything If, as of the Maturity Date, the Company has not consummated a Qualified Financing or a Change in Control, the Holder shall have the right (in lieu of repayment), but not the obligation, to the contrary contained hereinreceive, if in full satisfaction of any debts, owing on any Conversion Date: (1) the number of this Note, shares of Common Stock at the time authorized, unissued and unreserved for all purposes, or held as treasury stock, is insufficient to pay interest hereunder in shares of Common Stock; (2) the Underlying Shares issuable for such conversion (including any interest payable in shares) (x) are not registered for resale pursuant to an effective Underlying Shares Registration Statement and (y) may not be sold without volume restrictions pursuant to Rule 144(k) promulgated under the Securities Act (as defined in Section 6); (3) the Common Stock is not listed or quoted for trading on the OTC or on a Subsequent Market; (4) the Company has failed to timely satisfy its conversion obligations hereunder; or (5) the issuance of such shares of Common Stock would result in a violation of Sections 4(a)(ii), then, the Company may not pay interest in kind and must pay interest in cash by delivering, within three Trading Days of each applicable Conversion Date, an amount in cash equal to the product of (a) the outstanding principal amount of the Debentures to be converted on such Conversion Date and (b) the product of (x) the quotient obtained by dividing .12 by 360 and (y) the number of days for which such principal amount was outstanding. (C) This Debenture shall be convertible into shares of Common Stock at the option of the Holder, in whole or in part at any time and from time to time, after the Original Issue Date (subject to the limitations on conversion set forth in Section 4(a)(ii) hereof). The Holder shall effect conversions by delivering to the Company a completed notice substantially in the form attached hereto as Exhibit A (a "Conversion Notice"). The Conversion Notice shall set forth the remaining principal amount of this Debenture and all accrued and unpaid interest thereon subsequent to the conversion at issue. The date on which a Conversion Notice is delivered is the "Conversion Date." Unless the Holder is converting the entire principal amount outstanding under this Debenture, the Holder is not be required to physically surrender this Debenture to the Company in order to effect conversions. Subject to Section 4(b), each Conversion Notice, once given, shall be irrevocable. Conversions hereunder shall have the effect of lowering the outstanding principal amount of this Debenture plus all accrued and unpaid interest thereon in an amount equal to the applicable conversion, which shall be evidenced quotient obtined by notations made in dividing $1,500,000 by the Conversion Notice. The Holder and number of shares of capital stock of the Company shall maintain records showing then-outstanding, calculated on a fully diluted basis (excluding Qualified Financing Securities, shares issuable on the principal amount converted Notes, and shares reserved and but unawarded and unallocated under the date of such conversions. In Company’s equity incentive plan). (d) If prior to the event of any dispute Note’s conversion or discrepancyMaturity the Company consummates a bone fide equity financing that is not a Qualified Financing or a Change in Control, the records of the Holder shall be controlling at the time of the initial closing of such financing have the right (in lieu of repayment), but not the obligation, to receive, in full satisfaction of any debts owing on this Note, shares of the stock issued in such financing in an amount equal to the quotient obtined by dividing $1,500,000 by the number of shares of capital stock of the Company then-outstanding, calculated on a fully diluted basis (excluding Qualified Financing Securities, shares issuable on the Notes, and determinative in shares reserved and but unawarded and unallocated under the absence of manifest errorCompany’s equity incentive plan).

Conversion. (A) This Debenture shall be convertible into shares of Common Stock at the option of the Holder, in whole or in part at any time and from time to time, after the Original Issue Date (subject to the limitations on conversion set forth in Section 4(a)(ii) hereof). The number of shares of Common Stock issuable upon a conversion hereunder shall be determined by adding the sum of (i) the quotient obtained by dividing (x) the outstanding principal amount of this Debenture to be converted and (y) the Conversion Price (as defined herein), and (ii) the amount equal to (I) the product of (x) the outstanding principal amount of this Debenture to be converted and (y) the product of (1) the quotient obtained by dividing .12 by 360 and (2) the number of days for which such principal amount was outstanding, divided by (II) the Conversion Price on the Conversion Date, provided, that if the Company shall have timely elected to pay the interest due on a Conversion Date in cash pursuant to the terms hereof, subsection (ii) shall not be used in the calculation of the number of shares of Common Stock issuable upon a conversion hereunder. (B) Notwithstanding anything to the contrary contained herein, if on any Conversion Date: (1) the number of shares of Common Stock at the time authorized, unissued and unreserved for all purposes, or held as treasury stock, is insufficient to pay interest hereunder in shares of Common Stock; (2) the Underlying Shares issuable for such conversion (including any interest payable in shares) (x) are not registered for resale pursuant to an effective Underlying Shares Registration Statement and (y) may not be sold without volume restrictions pursuant to Rule 144(k) promulgated under the Securities Act (as defined in Section 6); ; (3) the Common Stock is not listed or quoted for trading on the OTC or on a Subsequent Market; (4) the Company has failed to timely satisfy its conversion obligations hereunder; or (5) the issuance of such shares of Common Stock would result in a violation of Sections 4(a)(ii), then, the Company may not pay interest in kind and must pay interest in cash by delivering, within three Trading Days of each applicable Conversion Date, an amount in cash equal to the product of (a) the outstanding principal amount of the Debentures to be converted on such Conversion Date and (b) the product of (x) the quotient obtained by dividing .12 by 360 and (y) the number of days for which such principal amount was outstanding. (C) This Debenture shall be convertible into shares of Common Stock at the option of the Holder, in whole or in part at any time and from time to time, after the Original Issue Date (subject to the limitations on conversion set forth in Section 4(a)(ii) hereof). The Holder shall effect conversions by delivering to the Company a completed notice substantially in the form attached hereto as Exhibit A (a "Conversion Notice"). The Conversion Notice shall set forth the remaining principal amount of this Debenture and all accrued and unpaid interest thereon subsequent to the conversion at issue. The date on which a Conversion Notice is delivered is the "Conversion Date." Unless the Holder is converting the entire principal amount outstanding under this Debenture, the Holder is not be required to physically surrender this Debenture to the Company in order to effect conversions. Subject to Section 4(b), each Conversion Notice, once given, shall be irrevocable. Conversions hereunder shall have the effect of lowering the outstanding principal amount of this Debenture plus all accrued and unpaid interest thereon in an amount equal to the applicable conversion, which shall be evidenced by notations made in the Conversion Notice. The Holder and the Company shall maintain records showing the principal amount converted and the date of such conversions. In the event of any dispute or discrepancy, the records of the Holder shall be controlling and determinative in the absence of manifest error.

Conversion. (Aa) This Debenture P▇▇▇▇'s right to Convert. Except as provided in Paragraph 3(g)(iii) below, Payee shall be convertible have the right, at any time commencing on the date that Maker shall have effected the Share Authorizarion defined in Section 3(h) below until the close of business on the day the Obligations are paid in full, to cause the conversion (a “Conversion”) of all or any portion (if such portion is Five Thousand ($5,000) Dollars or a whole multiple of Five Thousand ($5,000) Dollars) of the Principal, and Interest as provided in Section 2 above, outstanding at the time such Conversion is effected (the "Convertible Obligations") into shares of Common Stock at (the option of the Holder, in whole or in part at any time and from time to time, after the Original Issue Date (subject to the limitations on conversion set forth in Section 4(a)(ii) hereof"Underlying Shares"). The number of shares price for Conversion, subject to adjustment as provided in Section 4 below, shall be Fifty ($0.50) Cents per share (the “Conversion Rate”), subject to adjustment as provided below. Maker will not issue a fractional share of Common Stock issuable upon a conversion hereunder Conversion but will round any fractional share to the nearest share so that if the fraction is less than 0.5 no share shall be determined issued and if the fraction is 0.5 or higher Maker shall issue one full share. Noble Roman’s, Inc. __.__.16 (b) Manner of Conversion. Payee may exercise P▇▇▇▇’s Conversion right by adding completing, executing and sending to Maker a completed and executed Note Conversion Form appended hereto as Annex A (the sum of (i“Conversion Notice”) setting forth the quotient obtained by dividing (x) the outstanding principal amount of this Debenture the Convertible Obligations to be converted and (y) providing the other information required in the Conversion Price (as defined herein), and (ii) Notice. Maker shall issue the amount equal to (I) number of Underlying Shares into which the product of (x) the outstanding principal amount of this Debenture Convertible Obligations are to be converted in accordance with the Conversion Rate. If required by applicable federal or state securities laws or regulations, P▇▇▇▇ shall represent in writing to Maker prior to the receipt of the Underlying Shares that such Shares will be acquired by Payee for investment only and not for resale or with a view to the distribution thereof, and shall agree that any certificates representing the Shares may bear a legend, conspicuously noting such restriction, as Maker shall deem reasonably necessary or desirable to enable it to comply with any applicable federal and/or state laws or regulations. (yc) Delivery of Certificates Upon Conversion. Certificates for Underlying Shares to be issued upon Conversion shall be transmitted by Maker’s transfer agent (the product “Transfer Agent”) to Payee (A) by crediting the account of P▇▇▇▇’s prime broker with the Depository Trust Company through its Deposit Withdrawal Agent Commission (“DWAC”) system if Maker is then a participant in such system and there is either (1) an effective Registration Statement, as defined in Section 5 below, permitting the quotient obtained by dividing .12 by 360 and (2) the number of days for which such principal amount was outstanding, divided by (II) the Conversion Price on the Conversion Date, provided, that if the Company shall have timely elected to pay the interest due on a Conversion Date in cash pursuant to the terms hereof, subsection (ii) shall not be used in the calculation issuance of the number Underlying Shares to or resale of shares of Common Stock issuable upon a conversion hereunder. (B) Notwithstanding anything to the contrary contained herein, if on any Conversion Date: (1) the number of shares of Common Stock at the time authorized, unissued and unreserved for all purposes, Underlying Shares by Payee or held as treasury stock, is insufficient to pay interest hereunder in shares of Common Stock; (2) the Underlying Shares issuable for such conversion (including any interest payable in shares) (x) are not registered eligible for resale pursuant to an effective Underlying Shares Registration Statement and (y) may not be sold by Payee without volume restrictions or manner-of-sale limitations pursuant to Rule 144(k) promulgated 144 under the Securities Act Act, or (B) if Maker is not then a participant in the DWAC system and there is not an effective Registration Statement as defined aforesaid, by physical delivery of the certificates, bearing the restrictive legends required by Section 3(b) above if the Underlying Shares are otherwise not publicly tradable or without such restrictive legends if the Underlying Shares are otherwise publicly tradable or eligible for resale by the Maker without volume or manner-of-sale limitations pursuant to Rule 144, to the address specified by Payee in Section 6); the Conversion Notice by the date that is three (3) Business Days after the Common Stock is not listed or quoted for trading on the OTC or on a Subsequent Market; later of (4i) the Company has failed delivery to timely satisfy its conversion obligations hereunder; or Maker of the Conversion Notice or (5ii) the issuance surrender of this Note (such shares of Common Stock would result in a violation of Sections 4(a)(ii), thendate, the Company may not pay interest in kind and must pay interest in cash by delivering, within three Trading Days of each applicable Conversion “Underlying Share Delivery Date, an amount in cash equal to the product of (a) the outstanding principal amount of the Debentures to be converted on such Conversion Date and (b) the product of (x) the quotient obtained by dividing .12 by 360 and (y) the number of days for which such principal amount was outstanding”). (C) This Debenture shall be convertible into shares of Common Stock at the option of the Holder, in whole or in part at any time and from time to time, after the Original Issue Date (subject to the limitations on conversion set forth in Section 4(a)(ii) hereof). The Holder shall effect conversions by delivering to the Company a completed notice substantially in the form attached hereto as Exhibit A (a "Conversion Notice"). The Conversion Notice shall set forth the remaining principal amount of this Debenture and all accrued and unpaid interest thereon subsequent to the conversion at issue. The date on which a Conversion Notice is delivered is the "Conversion Date." Unless the Holder is converting the entire principal amount outstanding under this Debenture, the Holder is not be required to physically surrender this Debenture to the Company in order to effect conversions. Subject to Section 4(b), each Conversion Notice, once given, shall be irrevocable. Conversions hereunder shall have the effect of lowering the outstanding principal amount of this Debenture plus all accrued and unpaid interest thereon in an amount equal to the applicable conversion, which shall be evidenced by notations made in the Conversion Notice. The Holder and the Company shall maintain records showing the principal amount converted and the date of such conversions. In the event of any dispute or discrepancy, the records of the Holder shall be controlling and determinative in the absence of manifest error.

Conversion. (Aa) This Debenture Conversion of any portion of principal or interest that may be or become due on this Note shall be convertible subject to (i) the Offshore Securities Subscription Agreement between the Holder and the Corporation dated _________, 1997, (ii) the provisions of Article II of the Credit Agreement, reference to which is hereby made for a statement of the rights and obligations of the Company and the Holder with respect to conversion of this Note into shares Common Stock, and (iii) the following: Beginning on June 26, 1997, Holder may convert any balance due on this Note into such number of Common Stock at the option Shares of the HolderCompany $.01 par value (the "Conversion Shares") as is obtained by dividing the aggregate balance being so converted by Ninety-three and Three-quarter Cents ($0.9375) (the "Conversion Price"), which represents Seventy-five percent (75%) of the closing price of the Common Stock on May 7, 1997. (b) The conversion right provided by Section (a) hereof may be exercised only by the Holder of this Note, in whole or in part part, by the surrender of this Note at any time and from time to time, after the Original Issue Date principal office of the Corporation (subject or at such other place as the Corporation may designate in a written notice sent to the limitations holder by first-class mail, postage prepaid, at its address shown on conversion set forth in Section 4(a)(iithe books of the Corporation) hereof). The against delivery of that number of shares of whole Common Stock issuable upon a conversion hereunder Shares as shall be determined by adding the sum of (i) the quotient obtained computed by dividing (x) the outstanding principal amount of this Debenture to be converted and (y) the Conversion Price (as defined herein), and (ii) the amount equal to (I) the product of (x) the outstanding principal amount of this Debenture to be converted and (y) the product of (1) the quotient obtained balance of the Note so surrendered, if any, by dividing .12 by 360 and (2) the number of days for which such principal amount was outstanding, divided by (II) the Conversion Price on the Conversion Date, provided, that if the Company shall have timely elected to pay the interest due on a Conversion Date in cash pursuant to the terms hereof, subsection (ii) shall not be used in the calculation of the number of shares of Common Stock issuable upon a conversion hereunder. (B) Notwithstanding anything to the contrary contained herein, if on any Conversion Date: (1) the number of shares of Common Stock at the time authorized, unissued and unreserved for all purposes, or held as treasury stock, is insufficient to pay interest hereunder in shares of Common Stock; (2) the Underlying Shares issuable for such conversion (including any interest payable in shares) (x) are not registered for resale pursuant to an effective Underlying Shares Registration Statement and (y) may not be sold without volume restrictions pursuant to Rule 144(k) promulgated under the Securities Act (as defined in Section 6); (3) the Common Stock is not listed or quoted for trading on the OTC or on a Subsequent Market; (4) the Company has failed to timely satisfy its conversion obligations hereunder; or (5) the issuance of such shares of Common Stock would result in a violation of Sections 4(a)(ii), then, the Company may not pay interest in kind and must pay interest in cash by delivering, within three Trading Days of each applicable Conversion Date, an amount in cash equal to the product of (a) the outstanding principal amount of the Debentures to be converted on such Conversion Date and (b) the product of (x) the quotient obtained by dividing .12 by 360 and (y) the number of days for which such principal amount was outstanding. (C) This Debenture shall be convertible into shares of Common Stock at the option of the Holder, in whole or in part at any time and from time to time, after the Original Issue Date (subject to the limitations on conversion set forth in Section 4(a)(ii) hereof). The Holder shall effect conversions by delivering to the Company a completed notice substantially in the form attached hereto as Exhibit A (a "Conversion Notice"). The Conversion Notice shall set forth the remaining principal amount of this Debenture and all accrued and unpaid interest thereon subsequent to the conversion at issue. The date on which a Conversion Notice is delivered is the "Conversion Date." Unless the Holder is converting the entire principal amount outstanding under this Debenture, the Holder is not be required to physically surrender this Debenture to the Company in order to effect conversions. Subject to Section 4(b), each Conversion Notice, once given, shall be irrevocable. Conversions hereunder shall have the effect of lowering the outstanding principal amount of this Debenture plus all accrued and unpaid interest thereon in an amount equal to the applicable conversion, which shall be evidenced by notations made in the Conversion Notice. The Holder and the Company shall maintain records showing the principal amount converted and the date of such conversionsPrice. In the event of any dispute exercise of the conversion right of the Note granted herein (i) share certificates representing the Common Shares purchased by virtue of such exercise shall be delivered to the Holder within 5 days of notice of conversion free of restrictive legend or discrepancystop transfer orders, and (ii) unless the Note has been fully converted, a new note representing the balance of the Note not so converted, if any, shall also be delivered to the Holder within 5 days of notice of conversion, or carried on the Corporation's ledger, at Holder's option. The Holder may exercise its right to convert the Note by telecopying an executed and completed Notice of Conversion to the Corporation, and within 72 hours thereafter, delivering the original Notice of Conversion and the Note to the Corporation by express courier. Each date on which a telecopied Notice of Conversion is received by the Corporation in accordance with the provisions hereof shall be deemed a Conversion Date. The Corporation will transmit the Common Shares certificates issuable upon conversion of the Note (together with the note representing the balance not so converted) to the Holder via express courier within three business days after the conversion date if the Corporation has received the original Notice of Conversion and the Note being so converted by such date. (c) All Common Shares which may be issued upon conversion of the Note will, upon issuance, be duly issued, fully paid and nonassessable and free from all taxes, liens, and charges with respect to the issue thereof. At all times that any balance on the Note is outstanding, the records Corporation shall have authorized, and shall have reserved for the purpose of issuance upon such conversion, a sufficient number of Common Shares to provide for the conversion into Common Shares of the Holder balance of the Note then outstanding. (d) No fractional Common Shares shall be controlling and determinative issued in connection with any conversion of the absence Note, but in lieu of manifest errorsuch fractional shares, the Corporation shall make a cash payment therefor equal in amount to the product of the applicable fraction multiplied by the Conversion Price.

Conversion. (Ai) This Debenture shall be convertible into shares of Common Stock (subject to the limitation set forth in Section 4(a)(ii)) at the option of the Holder, Holder in whole or in part at any time and from time to time, time after the Original Issue Date (subject and prior to the limitations close of business on conversion set forth in Section 4(a)(ii) hereof)the Maturity Date. The number of shares of Common Stock issuable upon a conversion hereunder shall be determined by adding the sum of (i) the quotient obtained by dividing (x) the outstanding principal amount of this Debenture to be converted and (y) converted, plus all accrued but unpaid interest thereon, by the Conversion Price (Price, each as defined herein), and (ii) the amount equal to (I) the product of (x) the outstanding principal amount of this Debenture to be converted and (y) the product of (1) the quotient obtained by dividing .12 by 360 and (2) the number of days for which such principal amount was outstanding, divided by (II) the Conversion Price on the Conversion Date, provided, that if the Company shall have timely elected to pay the interest due on a Conversion Date in cash pursuant to the terms hereof, subsection (ii) shall not be used in the calculation of the number of shares of Common Stock issuable upon a conversion hereunder. (B) Notwithstanding anything to the contrary contained herein, if on any Conversion Date: (1) the number of shares of Common Stock at the time authorized, unissued and unreserved for all purposes, or held as treasury stock, is insufficient to pay interest hereunder in shares of Common Stock; (2) the Underlying Shares issuable for such conversion (including any interest payable in shares) (x) are not registered for resale pursuant to an effective Underlying Shares Registration Statement and (y) may not be sold without volume restrictions pursuant to Rule 144(k) promulgated under the Securities Act (as defined in Section 6); (3) the Common Stock is not listed or quoted for trading on the OTC or on a Subsequent Market; (4) the Company has failed to timely satisfy its conversion obligations hereunder; or (5) the issuance of such shares of Common Stock would result in a violation of Sections 4(a)(ii), then, the Company may not pay interest in kind and must pay interest in cash by delivering, within three Trading Days of each applicable Conversion Date, an amount in cash equal to the product of (a) the outstanding principal amount of the Debentures to be converted on such Conversion Date and (b) the product of (x) the quotient obtained by dividing .12 by 360 and (y) the number of days for which such principal amount was outstanding. (C) This Debenture shall be convertible into shares of Common Stock at the option of the Holder, in whole or in part at any time and from time to time, after the Original Issue Date (subject to the limitations on conversion set forth in Section 4(a)(ii) hereof)adjustment as provided hereunder. The Holder shall effect conversions by delivering surrendering the Debentures (or such portions thereof) to the Company a completed notice substantially in be converted, together with the form of conversion notice attached hereto as Exhibit A (a the "Conversion Notice")) to the Company. The Each Conversion Notice --------- ----------------- shall set forth specify the remaining principal amount of this Debenture Debentures to be converted and all accrued and unpaid interest thereon subsequent to the conversion at issue. The date on which a such conversion is to be effected, which date may not be prior to the date of such Conversion Notice is deemed to have been delivered is pursuant to Section 4(h) (the "Conversion Date." Unless the Holder "). If no Conversion Date is converting the entire principal amount outstanding under this Debenturespecified in a --------------- Conversion Notice, the Holder Conversion Date shall be the date that the Conversion Notice is not be required deemed delivered pursuant to physically surrender this Debenture to the Company in order to effect conversionsSection 4(h). Subject to Section 4(b)) hereof, each Conversion Notice, once given, shall be irrevocable. Conversions hereunder shall have If the effect Holder is converting less than all of lowering the outstanding principal amount of this Debenture plus all accrued and unpaid interest thereon in an amount equal to represented by the applicable conversion, which shall be evidenced Debenture(s) tendered by notations made in the Holder with the Conversion Notice. The Holder and , or if a conversion hereunder cannot be effected in full for any reason, the Company shall maintain records showing honor such conversion to the extent permissible hereunder and shall promptly deliver to such Holder (in the manner and within the time set forth in Section 4(b)) a new Debenture for such principal amount converted and the date of such conversions. In the event of any dispute or discrepancy, the records of the Holder shall be controlling and determinative in the absence of manifest erroras has not been converted.

Conversion. Subject to Sections 1.5(d), 1.10 and 1.11 and the consummation of the Closing, at the Effective Time, by virtue of the Merger and without any further action on the part of Parent, Merger Sub, the Company, any stockholder of the Company or any other Person: (i) each share of Company Capital Stock held in the Company’s treasury or owned by Parent, Merger Sub, the Company or any direct or indirect wholly-owned Subsidiary of Parent, Merger Sub or the Company immediately prior to the Effective Time (each, a “Disregarded Share”), if any, shall be canceled without payment of any consideration with respect thereto; (ii) each share of Company Preferred Stock that is not a Disregarded Share issued and outstanding immediately prior to the Effective Time shall be converted automatically into the right to receive: (A) This Debenture shall be convertible into shares of Common Stock at the option of the Holder, an amount in whole or in part at any time and from time to time, after the Original Issue Date (subject to the limitations on conversion set forth in Section 4(a)(ii) hereof). The number of shares of Common Stock issuable upon a conversion hereunder shall be determined by adding the sum of (i) the quotient obtained by dividing (x) the outstanding principal amount of this Debenture to be converted and (y) the Conversion Price (as defined herein), and (ii) the amount cash equal to (I) the product of (x) the outstanding principal amount of this Debenture to be converted and (y) the product of to: (1) the quotient obtained by dividing .12 by 360 and Upfront Per Share Amount; minus (2) the number Expense Fund Contribution Amount applicable to such share of days for which Company Preferred Stock; plus (B) any cash disbursements required to be made from the Expense Fund with respect to such principal share to the former holder thereof in accordance with the terms of this Agreement, as and when such disbursements are required to be made; plus (C) any cash amounts required to be paid by Parent with respect to such share to the former holder thereof in accordance with the terms of Section 1.9, as and when such payments are required to be made; (iii) each share of Company Common Stock that is not a Disregarded Share issued and outstanding immediately prior to the Effective Time shall be converted automatically into the right to receive: (A) an amount was outstanding, divided by in cash equal to: (II1) the Conversion Price on Upfront Per Share Amount; minus (2) the Conversion Date, provided, that if Expense Fund Contribution Amount applicable to such share of Company Common Stock; plus (B) any cash disbursements required to be made from the Company shall have timely elected Expense Fund with respect to pay the interest due on a Conversion Date in cash pursuant such share to the former holder thereof in accordance with the terms hereofof this Agreement, subsection as and when such disbursements are required to be made; plus (iiC) any cash amounts required to be paid by Parent with respect to such share to the former holder thereof in accordance with the terms of Section 1.9, as and when such payments are required to be made; and (iv) each share of the common stock of Merger Sub outstanding immediately prior to the Effective Time shall not be used in converted automatically into one share of common stock of the calculation Surviving Corporation. From and after the Effective Time, all certificates representing the common stock of Merger Sub shall be deemed for all purposes to represent the number of shares of common stock of the Surviving Corporation into which they were converted in accordance with the immediately preceding sentence. The amount of cash, if any, that each holder is entitled to receive pursuant to this Agreement for the shares of Company Capital Stock, the shares of Company Capital Stock subject to Company Options or the shares of Company Common Stock issuable upon a conversion hereunder. (B) Notwithstanding anything subject to Company Warrants, as the case may be, held by such holder shall be rounded to the contrary contained herein, if on any Conversion Date: nearest cent (1with $0.005 being rounded upward to $0.01) and computed after aggregating the number of cash amounts payable for all shares of each class and series of Company Capital Stock, all shares of Company Common Stock at the time authorized, unissued subject to Company Options and unreserved for all purposes, or held as treasury stock, is insufficient to pay interest hereunder in shares of Common Stock; (2) the Underlying Shares issuable for such conversion (including any interest payable in shares) (x) are not registered for resale pursuant to an effective Underlying Shares Registration Statement and (y) may not be sold without volume restrictions pursuant to Rule 144(k) promulgated under the Securities Act (as defined in Section 6); (3) the Company Common Stock is not listed or quoted for trading on the OTC or on a Subsequent Market; (4) the Company has failed to timely satisfy its conversion obligations hereunder; or (5) the issuance of such shares of Common Stock would result in a violation of Sections 4(a)(ii), then, the Company may not pay interest in kind and must pay interest in cash by delivering, within three Trading Days of each applicable Conversion Date, an amount in cash equal to the product of (a) the outstanding principal amount of the Debentures to be converted on such Conversion Date and (b) the product of (x) the quotient obtained by dividing .12 by 360 and (y) the number of days for which such principal amount was outstanding. (C) This Debenture shall be convertible into shares of Common Stock at the option of the Holder, in whole or in part at any time and from time to time, after the Original Issue Date (subject to the limitations on conversion set forth in Section 4(a)(ii) hereof). The Holder shall effect conversions Company Warrants held by delivering to the Company a completed notice substantially in the form attached hereto as Exhibit A (a "Conversion Notice"). The Conversion Notice shall set forth the remaining principal amount of this Debenture and all accrued and unpaid interest thereon subsequent to the conversion at issue. The date on which a Conversion Notice is delivered is the "Conversion Datesuch holder." Unless the Holder is converting the entire principal amount outstanding under this Debenture, the Holder is not be required to physically surrender this Debenture to the Company in order to effect conversions. Subject to Section 4(b), each Conversion Notice, once given, shall be irrevocable. Conversions hereunder shall have the effect of lowering the outstanding principal amount of this Debenture plus all accrued and unpaid interest thereon in an amount equal to the applicable conversion, which shall be evidenced by notations made in the Conversion Notice. The Holder and the Company shall maintain records showing the principal amount converted and the date of such conversions. In the event of any dispute or discrepancy, the records of the Holder shall be controlling and determinative in the absence of manifest error.

Conversion. (A) This Debenture shall The entire principal amount of this Note and accrued interest on this Note may be convertible into shares of Common Stock at the option converted, under discretion of the Holder, wholly or partially into shares of the Company’s equity securities (the “Equity Securities”) issued and sold at the close of the Company’s next equity financing in whole a single transaction or a series of related transactions yielding gross proceeds to the Company of at least $50,000,000.00 in part at any time and from time to timethe aggregate (excluding the conversion of the Note) (the “Next Equity Financing”) consummated prior to, on or after the Original Issue Date Maturity Date. Such conversion right shall expire if not exercised within three (subject to 3) months of the limitations closing of the Next Equity Financing. In the event that the lead investor in the Next Equity Financing is not a holder of Equity Securities of the Company on conversion set forth in Section 4(a)(ii) hereofthe date hereof or an affiliate thereof (a “Related Investor”). The , then the number of shares of Common Stock issuable Equity Securities to be issued upon a such conversion hereunder shall be determined by adding the sum of (i) equal to the quotient obtained by dividing (xi) the outstanding entire principal amount of this Debenture to be converted and (y) the Conversion Price (as defined herein), and Note plus accrued interest by (ii) 80% of the amount equal to (I) price per share of the product of (x) the outstanding principal amount of this Debenture to be converted and (y) the product of (1) the quotient obtained by dividing .12 by 360 and (2) the number of days for which such principal amount was outstandingEquity Securities, divided by (II) the Conversion Price on the Conversion Date, provided, that if the Company shall have timely elected to pay the interest due on a Conversion Date in cash pursuant rounded to the terms hereofnearest whole share, subsection (ii) shall not be used in the calculation of the number of shares of Common Stock issuable upon a conversion hereunder. (B) Notwithstanding anything to the contrary contained herein, if on any Conversion Date: (1) the number of shares of Common Stock at the time authorized, unissued and unreserved for all purposes, or held as treasury stock, is insufficient to pay interest hereunder in shares of Common Stock; (2) the Underlying Shares issuable for such conversion (including any interest payable in shares) (x) are not registered for resale pursuant to an effective Underlying Shares Registration Statement and (y) may not be sold without volume restrictions pursuant to Rule 144(k) promulgated under the Securities Act (as defined in Section 6); (3) the Common Stock is not listed or quoted for trading on the OTC or on a Subsequent Market; (4) the Company has failed to timely satisfy its conversion obligations hereunder; or (5) the issuance of such shares of Common Stock would result Equity Securities upon such conversion shall be upon the terms and subject to the conditions applicable to the Next Equity Financing; provided, however, that in a violation of Sections 4(a)(ii), thenthe event such Next Equity Financing is consummated after the Maturity Date, the Company entire principal amount of, and accrued interest on, this Note may not pay interest in kind and must pay interest in cash be converted into such number of Equity Securities as is obtained under discretion of the Holder by delivering, within three Trading Days of each applicable Conversion Date, an amount in cash equal to the product of dividing (ai) the outstanding entire principal amount of this Note plus accrued interest by (ii) 67% of the Debentures price per share of the Equity Securities, rounded to the nearest whole share, and the issuance of such shares of Equity Securities upon such conversion shall be upon the terms and subject to the conditions applicable to the Next Equity Financing. In the event that the lead investor in the Next Equity Financing is a Related Investor, then regardless of whether the Next Equity Financing is consummated before or after the Maturity Date, the number of shares of Equity Securities to be converted on issued upon such Conversion Date and (b) the product of (x) conversion shall be equal to the quotient obtained by dividing .12 by 360 and (y1) the number of days for which such principal amount was outstanding. (C) This Debenture shall be convertible into shares of Common Stock at the option of the Holder, in whole or in part at any time and from time to time, after the Original Issue Date (subject to the limitations on conversion set forth in Section 4(a)(ii) hereof). The Holder shall effect conversions by delivering to the Company a completed notice substantially in the form attached hereto as Exhibit A (a "Conversion Notice"). The Conversion Notice shall set forth the remaining entire principal amount of this Debenture and all Note plus accrued and unpaid interest thereon subsequent by (2) 100% of the price per share of the Equity Securities, rounded to the nearest whole share, and the issuance of such shares of Equity Securities upon such conversion at issueshall be upon the terms and subject to the conditions applicable to the Next Equity Financing. The date on which a Conversion Notice is delivered is the "Conversion Date." Unless the Holder is converting the entire principal amount outstanding under Upon such conversion of this DebentureNote, the Holder is not be required hereby agrees to physically surrender this Debenture execute and deliver to the Company all transaction documents related to the Next Equity Financing, including a purchase agreement and other ancillary agreements, with customary representations and warranties and transfer restrictions (including a lock-up agreement in order to effect conversions. Subject to Section 4(bconnection with an initial public offering), each Conversion Notice, once given, shall be irrevocable. Conversions hereunder shall have the effect of lowering the outstanding principal amount of this Debenture plus all accrued and unpaid interest thereon in an amount equal having terms and conditions not less favorable to the applicable conversion, which shall be evidenced by notations made Holder than those contained in the Conversion Notice. The Holder and agreements as may be entered into by the Company shall maintain records showing the principal amount converted and the date of such conversions. In the event of any dispute or discrepancy, the records other purchasers of the Holder shall be controlling and determinative Equity Securities in the absence of manifest errorNext Equity Financing.

Conversion. (Aa) This Debenture shall Note may be convertible into shares of Common Stock at the option of the Holderconverted, in whole or in part at any time and from time to timepart, after the Original Issue Date (subject to the limitations on conversion set forth in Section 4(a)(ii) hereof). The number of shares of Common Stock issuable upon a conversion hereunder shall be determined by adding the sum of (i) the quotient obtained by dividing (x) the outstanding principal amount of this Debenture to be converted and (y) the Conversion Price (as defined herein), and (ii) the amount equal to (I) the product of (x) the outstanding principal amount of this Debenture to be converted and (y) the product of (1) the quotient obtained by dividing .12 by 360 and (2) the number of days for which such principal amount was outstanding, divided by (II) the Conversion Price on the Conversion Date, provided, that if the Company shall have timely elected to pay the interest due on a Conversion Date in cash pursuant to the terms hereof, subsection (ii) shall not be used in the calculation of into the number of shares of Common Stock issuable upon a conversion hereunder. (B) Notwithstanding anything to the contrary contained herein, if on any Conversion Date: (1) the number of shares of Common Stock at the time authorized, unissued and unreserved for all purposes, or held as treasury stock, is insufficient to pay interest hereunder in shares of Common Stock; (2) the Underlying Shares issuable for such conversion (including any interest payable in shares) (x) are not registered for resale pursuant to an effective Underlying Shares Registration Statement and (y) may not be sold without volume restrictions pursuant to Rule 144(k) promulgated under the Securities Act (as defined in Section 6); (3) the Common Stock is not listed or quoted for trading on the OTC or on a Subsequent Market; (4) the Company has failed to timely satisfy its conversion obligations hereunder; or (5) the issuance of such shares of Common Stock would result in a violation of Sections 4(a)(ii), then, the Company may not pay interest in kind and must pay interest in cash by delivering, within three Trading Days of each applicable Conversion Date, an amount in cash equal to the product of (a) the outstanding principal amount of the Debentures to be converted on such Conversion Date and (b) the product of (x) the quotient as is obtained by dividing .12 by 360 and (yi) the number of days for which such principal amount was outstanding. (C) This Debenture shall be convertible into shares of Common Stock at the option of the Holder, in whole or in part at any time and from time to time, after the Original Issue Date (subject to the limitations on conversion set forth in Section 4(a)(ii) hereof). The Holder shall effect conversions by delivering to the Company a completed notice substantially in the form attached hereto as Exhibit A (a "Conversion Notice"). The Conversion Notice shall set forth the remaining principal amount of this Debenture unpaid Principal Amount and all accrued and unpaid interest thereon subsequent as of the Conversion Date (as defined below) by (ii) Three Dollars and 50/100 ($3.50) or such lesser price per share of Common Stock as may be offered to the Company's shareholders in connection with any rights offering effected within twelve (12) months from the date hereof (the "Conversion Price"). (b) Written notice of conversion at issue. The (the "Conversion Request") shall be delivered to the Company by the Holder specifying a date no less than sixty one (61) days after the date such notice is given on which a Conversion Notice this Note is delivered is to be converted into Common Stock (the "Conversion Date." Unless "). The Conversion Request shall be given to the Holder Company at the address provided in Section 15 below or, if no such address appears or is converting given, at the entire place where the principal executive office of the Company is located. In addition to specifying the Conversion Date, the Conversion Request shall specify the principal amount outstanding under this Debentureof the Note converted and the amount of accrued and unpaid interest converted. On the Conversion Date, the Holder is not be required to physically shall surrender this Debenture Note to the Company in order to effect conversions. Subject to Section 4(b)exchange for the Common Stock of the Company as provided herein, each Conversion Notice, once given, shall be irrevocable. Conversions hereunder shall have the effect of lowering the outstanding principal amount of this Debenture plus all accrued and unpaid interest thereon in an amount equal to the applicable conversion, which shall be evidenced by notations made in the manner and at the place designated by the Company. (c) As soon as practicable after the Conversion Notice. The Holder and Date, the Company shall maintain records showing issue and deliver to Holder, upon surrender of the Note, (i) a certificate or certificates for the number of full shares of Common Stock issuable upon conversion of the Note in accordance with the provisions hereof, and (ii) a check or cash in respect of any fraction of a share as provided in Section 1(d) hereof. Such conversion shall be deemed to have been effected immediately prior to the close of business on the Conversion Date, and as of the Conversion Date the Note (to the extent of principal amount converted repaid) shall be deemed cancelled and the Note (or the amount of principal repaid, if less than all) shall cease to accrue interest, and Holder shall be deemed to have become a shareholder of record; provided, however, that, in the event the Conversion Date falls on a date when the Company's securities transfer books are closed, Holder shall not be deemed to be a record holder of such conversionsthe Company's Common Stock for any purpose until the close of business on the next succeeding day on which the Company's securities transfer books shall be open. In the event of any dispute or discrepancya partial conversion, the records Company shall issue to Holder on the Conversion Date a new Note in the principal amount of unconverted principal. (d) No fractional shares of Common Stock shall be issued upon conversion of this Note, but an adjustment in check or cash will be made in respect of any fraction of a share which would otherwise be issuable upon conversion of the Note. (e) The Company will at all times reserve from its authorized but unissued shares a sufficient number of shares to provide for conversion of this Note. (f) The Holder shall represents, warrants, and covenants to the Company that he is acquiring this Note and any shares of Common Stock issuable upon conversion of this Note as an investment for his own account, and not for resale. The Holder further understands that the transferability of this Note and the shares of Common Stock that may be controlling issued upon conversion of this Note is limited and determinative that it is not anticipated that there will be any public market for this Note or for the shares of Common Stock that may be issued upon conversion of this Note, and that it may not be possible to sell or dispose of this Note or any shares of Common Stock that may be issued upon conversion of this Note. The Holder further acknowledges that neither this Note nor the shares of Common Stock issuable upon conversion of this Note have been registered under the Securities Act of 1933, as amended, or the securities laws of any state, and that a legend will be placed on the certificates representing any shares of Common Stock that may be issued upon conversion of this Note in substantially the absence of manifest errorfollowing form: THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT") OR QUALIFIED UNDER THE SECURITIES LAWS OF ANY STATE (THE "LAW"). SUCH SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND NEITHER SAID SECURITIES NOR ANY INTEREST THEREIN MAY BE SOLD OR OFFERED FOR SALE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE ACT AND QUALIFICATION UNDER THE LAW OR AN OPINION OF COUNSEL SATISFACTORY TO THE CORPORATION THAT SUCH REGISTRATION AND QUALIFICATION ARE NOT REQUIRED AS TO SAID SALE OR OFFER.

Conversion. (A) This Debenture Subject to the provisions of this Article III, at the Effective Time, by virtue of the Merger and without any action on the part of the shareholders of ABI or Murd▇▇▇, ▇▇e shares of the constituent corporations shall be convertible into converted as follows: (a) Except for shares of Common Murd▇▇▇ ▇▇▇mon Stock at issued and outstanding immediately prior to the option of the HolderEffective Time as to which dissenters' rights have been perfected and not withdrawn, in whole or in part at any time and from time to time, after the Original Issue Date (subject to Section 3.4 relating to fractional shares, each share of Murd▇▇▇ ▇▇▇mon Stock (excluding shares to be cancelled pursuant to Section 3.3 of this Agreement) issued and (b) If the limitations on conversion set forth in Section 4(a)(ii) hereof). The number Designated Price of shares of ABI Common Stock issuable upon a conversion hereunder Shares is less than $11.00 and the Closing Equity is at least $5,000,000, then the Exchange Ratio shall be determined by adding increased to equal the sum of (i) quotient, rounded to the quotient obtained by dividing third decimal point, of: (x) the outstanding principal amount product of this Debenture to be converted $11.00 and the Exchange Ratio divided by (y) the Conversion Designated Price. If the Designated Price shall be less than $10.00, then ABI and Murd▇▇▇ ▇▇▇ll in good faith attempt to negotiate a mutually acceptable Merger Consideration for the Murd▇▇▇ ▇▇▇mon Stock; provided, however, that if a mutually agreed upon Merger Consideration is not negotiated within four days following the Determination Date, then Murd▇▇▇ ▇▇▇ terminate this Agreement pursuant to Section 10.1(i) of this Agreement. If the Closing Equity shall be less than $5,000,000, then the Exchange Ratio shall be adjusted as follows: (as defined herein)i) if the Designated Price is $11.00 or more, and then the Exchange Ratio shall be decreased to equal the quotient, rounded to the third decimal point, of (A) the quotient of [Closing Equity multiplied by 2.25, divided by 385,015] divided by (B) 12.169, or (ii) if the amount Designated Price is less than $11.00, then the Exchange Ratio shall be adjusted to equal the quotient, rounded to (I) the product third decimal point, of (x) the outstanding principal amount of this Debenture to be converted and (y) the product of (1A) the quotient obtained of [Closing Equity multiplied by dividing .12 by 360 and (2) the number of days for which such principal amount was outstanding2.25, divided by 385,015] divided by (IIB) 11.00. If the Conversion Price on Closing Equity shall be less than $4,875,000, then ABI and Murd▇▇▇ ▇▇▇ll in good faith attempt to negotiate a mutually acceptable Merger Consideration for the Conversion DateMurd▇▇▇ ▇▇▇mon Stock; provided, providedhowever, that if a mutually agreed upon Merger Consideration is not negotiated within four days following the Company shall have timely elected to pay determination of Closing Equity, then ABI may terminate the interest due on a Conversion Date in cash Agreement pursuant to the terms hereof, subsection (iiSection 10.1(j) shall not be used in the calculation of the number of shares of Common Stock issuable upon a conversion hereunderthis Agreement. (Bc) Notwithstanding anything Each of the Surviving Corporation common shares, $1.175 par value per share, issued and outstanding immediately prior to the contrary contained herein, if on any Conversion Date: (1) Effective Time shall remain issued and outstanding from and after the number of shares of Common Stock at the time authorized, unissued and unreserved for all purposes, or held as treasury stock, is insufficient to pay interest hereunder in shares of Common Stock; (2) the Underlying Shares issuable for such conversion (including any interest payable in shares) (x) are not registered for resale pursuant to an effective Underlying Shares Registration Statement and (y) may not be sold without volume restrictions pursuant to Rule 144(k) promulgated under the Securities Act (as defined in Section 6); (3) the Common Stock is not listed or quoted for trading on the OTC or on a Subsequent Market; (4) the Company has failed to timely satisfy its conversion obligations hereunder; or (5) the issuance of such shares of Common Stock would result in a violation of Sections 4(a)(ii), then, the Company may not pay interest in kind and must pay interest in cash by delivering, within three Trading Days of each applicable Conversion Date, an amount in cash equal to the product of (a) the outstanding principal amount of the Debentures to be converted on such Conversion Date and (b) the product of (x) the quotient obtained by dividing .12 by 360 and (y) the number of days for which such principal amount was outstandingEffective Time. (Cd) This Debenture shall be convertible into shares of Common Stock at the option Each of the Holder, in whole or in part at any time ABI Common Shares issued and outstanding immediately prior to the Effective Time shall remain issued and outstanding from time to time, and after the Original Issue Date (subject to the limitations on conversion set forth in Section 4(a)(ii) hereof). The Holder shall effect conversions by delivering to the Company a completed notice substantially in the form attached hereto as Exhibit A (a "Conversion Notice"). The Conversion Notice shall set forth the remaining principal amount of this Debenture and all accrued and unpaid interest thereon subsequent to the conversion at issue. The date on which a Conversion Notice is delivered is the "Conversion DateEffective Time." Unless the Holder is converting the entire principal amount outstanding under this Debenture, the Holder is not be required to physically surrender this Debenture to the Company in order to effect conversions. Subject to Section 4(b), each Conversion Notice, once given, shall be irrevocable. Conversions hereunder shall have the effect of lowering the outstanding principal amount of this Debenture plus all accrued and unpaid interest thereon in an amount equal to the applicable conversion, which shall be evidenced by notations made in the Conversion Notice. The Holder and the Company shall maintain records showing the principal amount converted and the date of such conversions. In the event of any dispute or discrepancy, the records of the Holder shall be controlling and determinative in the absence of manifest error.

Conversion. (Aa) This Debenture shall be convertible into shares of Common Stock at Subject to and upon compliance with the option provisions of the HolderFiscal Agency Agreement, in whole or in part a holder of Securities is entitled, at its option, at any time and from time to time, on or after the Original Issue Date (subject to date that is the limitations on conversion set forth in Section 4(a)(ii) hereof). The number of shares of Common Stock issuable upon a conversion hereunder shall be determined by adding the sum later of (i) the quotient obtained by dividing Exchange Date and (xii) the outstanding date of the effectiveness of the Registration Statement to be filed by the Company under the Securities Act relating to the Common Stock issuable upon conversion of the Restricted Securities (the "Registration Date") and on or before the close of business on April 30, 2004 or in the case of a Security or portion thereof that is called for redemption by the Company, or the holder thereof elects to have such Security or portion thereof redeemed by the Company pursuant to Section 3(d) hereof, then in respect of such Security or such portion thereof until and including, but (unless the Company and the Guarantor default in making the payment due upon redemption) not after, the close of business on the 15th day next preceding the date fixed for redemption (or if such date is not a business day, as described in Section 11 hereof in New York City, then the next succeeding business day), to convert such Security (or any portion of the principal amount thereof which is U.S. $1,000 or an integral multiple thereof), at the principal amount thereof, or of this Debenture such portion, into fully paid and nonassessable shares ("Conversion Shares") (calculated as to be converted and each conversion to the nearest 1/1000 of a share) of common stock, par value $.10 per share of the Company (y) the "Common Stock"), at a Conversion Price equal to U.S. $31.415 aggregate principal PAGE amount of Securities for each Conversion Share (the "Conversion Price") (or at the current adjusted Conversion Price if an adjustment has been made as defined provided herein) by surrender of the Security, or in the case of a Security submitted for redemption pursuant to Section 3(d) hereof, satisfactory evidence of such submission, together with (i) if a Bearer Security, all unmatured coupons and any matured coupons in default appertaining thereto, and if a Registered Security (if so required by the Company or the Fiscal Agent), instruments of transfer in form satisfactory to the Company and the Fiscal Agent, duly executed by the registered holder or by his duly authorized attorney, and (ii) the conversion notice hereon duly executed (x) at the principal corporate trust office of the Fiscal Agent, or at such other office or agency of the Company as may be designated by it for such purpose in New York City, or (y) subject to any laws or regulations applicable thereto and subject to the right of the Company to terminate the appointment of any such conversion agency, at the office of the Principal Paying Agent in London, and if the Securities are listed on the Luxembourg Stock Exchange and so long as listed thereon, Bankers Trust Luxembourg, S.A, 14 Boulevard, F.D. Roosevelt, L-2450 Luxembourg, Luxembourg or ▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇encies as the Company may designate. In lieu of issuing shares of Common Stock upon such conversion, the Company may elect, in its sole discretion, to pay cash (including Additional Amounts, if any) in respect of all or a portion of the shares of Common Stock otherwise issuable upon such conversion based on the Market Price of such shares, all as provided in the Fiscal Agency Agreement. (b) In the case of a conversion after the close of business on a Record Date next preceding any interest payment date and before the opening of business on such interest payment date, the holder of record of a Registered Security at such Record Date is to receive an installment of interest on the interest payment date. No payment or adjustment shall be made upon any conversion for dividends on the Common Stock delivered on conversion. Except as set forth in the first sentence of this subsection (b), accrued interest from the immediately preceding interest payment date until the date of conversion (together with any Additional amounts, if any, thereon) will be paid to the holder within five business days after presentment for conversion on account of any interest accrued on the Securities surrendered for conversion, except that interest on Registered Securities surrendered for conversion after the close of business on a Record Date and before the opening of business on the next succeeding interest payment date shall be paid in an amount equal to (I) the product of (x) interest payable on such interest payment date on the outstanding principal amount being surrendered for conversion. No fractions of this Debenture to shares or scrip representing fractions of shares will be converted and issued or delivered on conversion, but instead of any fractional interest the Company shall pay a cash adjustment as provided in the Fiscal Agency Agreement. Such conversion shall be so effected by the Company, except payment of accrued interest (ytogether with Additional Amounts, if any, thereon) which will be paid by the product Paying Agent in accordance with the provisions for payment of interest (1together with Additional Amounts, if any, thereon) set forth herein. PAGE (i) In case at any time the quotient obtained by dividing .12 by 360 and (2) Company shall pay or make a dividend or other distribution on any class of capital stock of the number Company in shares of days for which such principal amount was outstandingCommon Stock, divided by (II) the Conversion Price in effect at the opening of business on the day following the date fixed for the determination of stockholders entitled to receive such dividend or other distribution shall be reduced so that the same shall equal the price determined by multiplying such Conversion Date, provided, that if Price by a fraction of which the Company numerator shall have timely elected to pay the interest due on a Conversion Date in cash pursuant to the terms hereof, subsection (ii) shall not be used in the calculation of the number of shares of Common Stock issuable upon a conversion hereunderoutstanding at the close of business on the date fixed for such determination and the denominator shall be the sum of such number of shares and the total number of shares of Common Stock constituting such dividend or other distribution, such adjustment to become effective immediately after the opening of business on the day following the date fixed for such determination. (ii) In the case at any time the Company shall (A) subdivide its outstanding shares of Common Stock, (B) Notwithstanding anything combine its outstanding shares of Common Stock into a smaller number of shares, or (C) issue by reclassification of its shares of Common Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing corporation) any shares of capital stock, the Conversion Price in effect at the effective date of such subdivision, combination or reclassification shall be proportionately adjusted so that the holder of any Security surrendered for conversion after such time shall be entitled to receive the contrary contained hereinaggregate number and kind of shares which, if on such Security had been converted immediately prior to such time, the holder would have owned upon such conversion and been entitled to receive upon such subdivision, combination or reclassification. Such adjustment shall become effective immediately after the effectiveness of such subdivision, combination or reclassification. Such adjustment shall be made successively whenever any Conversion Date:event listed above shall occur. (1iii) In case at any time the Company shall fix a record date for the issuance of rights or warrants to all holders of its Common Stock entitling them to subscribe for or purchase Common Stock at a price per share less than the current market price per share of Common Stock (determined as provided in paragraph (v) of this subsection (c)) on such record date, the Conversion Price in effect at the opening of business on the day following such record date shall be reduced so that the same shall equal the price determined by multiplying such Conversion Price by a fraction of which the numerator shall be the number of shares of Common Stock outstanding at the time authorized, unissued and unreserved for all purposes, or held as treasury stock, is insufficient to pay interest hereunder in close of business on such record date plus the number of shares of Common Stock;Stock which the aggregate of the offering price of the total number of shares so offered for subscription or purchase would purchase at such current market price per share of Common Stock and the denominator shall be the number of shares of Common Stock outstanding at the close of business on such record date plus the number of shares so offered for subscription or purchase, such reduction to become effective immediately after the opening of business on the day following such record date. Such reduction shall be made successively whenever such a record date is fixed; and in the event that such rights or warrants are not so issued, the Conversion Price shall again be adjusted to be the Conversion PAGE Price which would then be in effect if such record date had not been fixed. (2iv) In case at any time the Underlying Shares issuable Company shall fix a record date for such conversion the making of a distribution, by dividend or otherwise, to all holders of its shares if Common Stock, of evidences of its indebtedness or assets (including securities, but excluding any interest payable dividend or distribution referred to in sharesparagraph (i) of this subsection (xc), any rights or warrants referred to in paragraph (iii) are of this subsection (c), and any dividend or distribution paid in cash out of the retained earnings of the Company), then in each such case the Conversion Price in effect after such record date shall be determined by multiplying the Conversion Price in effect immediately prior to such record date by a fraction, of which numerator shall be the total number of outstanding shares of Common Stock multiplied by the current market price per share of Common Stock (determined as provided in paragraph (v) of this subsection (c)) on such record date, less the fair market value (as determined by the Board of Directors of the Company, whose determination shall be conclusive and described in a statement filed with the Fiscal Agent) of the portion of the assets or evidences of indebtedness so to be distributed, and of which denominator shall be the total number of outstanding shares of Common Stock multiplied by such current market price per share of Common Stock. Such adjustment shall be made successively whenever such a record date is fixed; and in the event that such distribution is not registered for resale pursuant so made, the Conversion Price shall again be adjusted to an effective Underlying Shares Registration Statement be the Conversion Price which would then be in effect if such record date has not been fixed. (v) For the purpose of any computation under paragraphs (iii) and (yiv) may not of this subsection (c), the current market price per share of Common Stock on any date shall be sold without volume restrictions pursuant deemed to Rule 144(k) promulgated under be the Securities Act average of the Closing Prices (as defined below) for the 15 consecutive trading days upon which the principal trading market for the Common Stock is open and selected by the Company commencing not less than 20 nor more than 30 days before the day in Section 6); (3) question. The _Closing Price_ for any day shall be the last reported sales prices regular way or, in case no such reported sale takes place on such day, the average of the reported closing bid and asked prices regular way, in either case on the American Stock Exchange or, if the Common Stock is not or admitted to trading on such exchange, on the principal national securities exchange on which the Common Stock is listed or quoted for admitted to trading or, if not listed or admitted to trading on any national securities exchange, the OTC closing sale price quoted on the Nasdaq National Market, or on a Subsequent Market;if not so quoted, as determined by the Company. (4vi) The Company may make such adjustments in the Conversion Price, in addition to those required by paragraphs (i), (ii) and, (iii) selected by the Company has failed of this section, as it considers to timely satisfy its conversion obligations hereunder; orbe advisable in order that any event treated for United States Federal income tax purposes as a dividend of stock or stock rights shall not be taxable to the recipients. (5vii) No adjustment in the issuance Conversion Price shall be required unless such adjustment would require an increase or decrease of at least U.S. $.25 in such Conversion Price; provided, however, that any adjustment which by reason of PAGE this paragraph (vii) is not required to be made shall be carried forward and taken into account in any subsequent adjustment. All calculations under this subsection (c) shall be made to the nearest cent or to the nearest 1/1000 of a share, as the case may be. (d) Whenever the Conversion Price is adjusted and in the event of certain other corporate actions, as herein provided, the Company shall give notice, all as provided in the Fiscal Agency Agreement. (e) The Company shall file, as soon as practicable following the Closing Date, a shelf registration statement with the United States Securities and Exchange Commission covering the resale of the shares of Common Stock would result in a violation issuable upon conversion of Sections 4(a)(iithe Securities ("Registrable Securities"), then, ; provided that any holder of any Securities or Registrable Securities shall not sell any shares pursuant to such registration statement unless and until it provides to the Company such information as the Company may not pay interest reasonably request for use in kind connection with the identification of such holder as a selling stockholder in such registration statement, or any prospectus included therein, and must pay interest no such sale shall be made by such holder pursuant to such registration statement unless and until such information is included by the Company in cash such registration statement or prospectus. The Company shall in good faith use its best efforts and at its cost to cause such registration statement to be declared effective as promptly as practicable thereafter and to include in such registration statement the information provided by delivering, within three Trading Days of each applicable Conversion Date, an amount in cash equal to a holder as a selling stockholder and shall notify the product of (a) the outstanding principal amount Fiscal Agent of the Debentures effectiveness thereof and agrees to use its best efforts to (i) cause all registrations with, and to obtain any approvals by, any governmental authority under any Federal or state law of the United States that may be converted on required in connection with the conversion of the Securities into Common Stock and the resale thereof, (ii) maintain the effectiveness of such Conversion Date and (bregistrations until the date that Rule 144(k) under the product Securities Act is available for the resale of (x) the quotient obtained by dividing .12 by 360 and (y) the number of days for which such principal amount was outstanding. (C) This Debenture shall be convertible into shares of Common Stock issuable upon conversion of the Restricted Securities (or other securities issuable upon conversion of the Securities) and (iii) to list the shares of Common Stock required to be issued or delivered upon conversion of Securities (or other securities issuable upon conversion of the Securities) prior to such issue or delivery on such national securities exchange or automated over-the-counter trading market where such Common Stock is listed or traded at the option time of such delivery. The Company and the HolderGuarantor, in whole or in part at any time jointly and from time severally, shall, without limitation as to time, after the Original Issue Date (subject indemnify and hold harmless, to the limitations on conversion set forth fullest extent permitted by law, each holder of Registrable Securities, the officers, directors and agents and employees of each of them, each person who controls such holder (within the meaning of Section 15 of the Securities Act or Section 20 of the Securities Exchange Act of 1934, as amended) and the officers, directors, agents and employees of any such controlling person, from and against all losses, claims, damages, liabilities, costs (including, without limitation, the costs of preparation and attorneys' fees) and expenses (collectively, "Losses"), as incurred, arising out of or based upon any untrue or alleged untrue statement of a material fact contained in Section 4(a)(ii) hereof). The Holder shall effect conversions by delivering any such registration statement, or related prospectus or in any amendment PAGE or supplement thereto, or arising out of or based upon any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, except insofar as the same are based solely upon information, if any, furnished in writing to the Company a completed notice substantially in the form attached hereto as Exhibit A (a "Conversion Notice"). The Conversion Notice shall set forth the remaining principal amount of this Debenture and all accrued and unpaid interest thereon subsequent to the conversion at issue. The date on which a Conversion Notice is delivered is the "Conversion Date." Unless the Holder is converting the entire principal amount outstanding under this Debentureby such holder expressly for use therein; provided, the Holder is not be required to physically surrender this Debenture to the Company in order to effect conversions. Subject to Section 4(b), each Conversion Notice, once given, shall be irrevocable. Conversions hereunder shall have the effect of lowering the outstanding principal amount of this Debenture plus all accrued and unpaid interest thereon in an amount equal to the applicable conversion, which shall be evidenced by notations made in the Conversion Notice. The Holder and that the Company shall maintain records showing not be liable to any holder of Registrable Securities to the principal amount converted and the date extent that any such Losses arise out of or are based upon an untrue statement or alleged untrue statement or omission or alleged omission made in any preliminary prospectus if either (a)(i) such conversions. In the event of any dispute holder failed to send or discrepancy, the records deliver as required a copy of the Holder shall be controlling final prospectus with or prior to the delivery of written confirmation of the sale by such holder of a Registrable Security to the person asserting the claim from which such Losses arise and determinative in (ii) the absence of manifest error.prospectus would have completely corrected such untrue statement or alleged untrue statement or such om

Conversion. (A) This Debenture shall be convertible into shares 6.1 At the Borrower’s election, in lieu of Common Stock at repayment, the option amount of the Holderdrawn down Loan (including the principal thereof and any accrued but unpaid interest thereon) may be converted, in whole or but not in part at any time except as provided in Clause 6.6, into a number of fully paid and from time non-assessable Shares, subject to timeand determined as provided in Clause 6.3 below, after as of the Original Issue Date (date of, and in all cases subject to the limitations on conversion set forth consummation of, a Qualified Offering provided, that no Event of Default shall at the time exist and be continuing. 6.2 In order to elect to convert the Loan into Shares in Section 4(a)(iiconnection with a Qualified Offering in accordance with this Clause 6, the Borrower shall give Lender notice of such election not less than five (5) hereof). The Business Days prior to the anticipated Conversion Date, specifying the anticipated Conversion Date, the anticipated aggregate proceeds to the Borrower and the other anticipated terms of the Qualified Offering. 6.3 Subject to Clause 6.6, the number of shares of Common Stock Shares or Units issuable upon a conversion hereunder of the Loan shall be determined by adding the sum of (i) the quotient obtained by dividing (x) the outstanding principal amount of this Debenture to be converted and (y) the Conversion Price (as defined herein), and (ii) the amount equal to (I) the product of (x) the outstanding principal amount of this Debenture to be converted and the Loan, plus any accrued but unpaid interest thereon, divided by (y) the product lowest price per Share or Unit paid by investors for Shares or Units in the Qualified Offering before deducting underwriting commissions and discounts, placement agent commissions and fees, and other expenses of (1) the quotient obtained by dividing .12 by 360 and (2) Qualified Offering. In lieu of any fractional Share or Unit to which the number of days for which such principal amount was outstandingLender would otherwise be entitled, divided by (II) the Conversion Price on the Conversion Date, provided, that if the Company shall have timely elected to pay the interest due on a Conversion Date in cash pursuant to the terms hereof, subsection (ii) shall not be used in the calculation of the number of shares of Common Stock issuable upon a conversion hereunder. (B) Notwithstanding anything to the contrary contained herein, if on any Conversion Date: (1) the number of shares of Common Stock at the time authorized, unissued and unreserved for all purposes, or held as treasury stock, is insufficient to pay interest hereunder in shares of Common Stock; (2) the Underlying Shares issuable for such conversion (including any interest payable in shares) (x) are not registered for resale pursuant to an effective Underlying Shares Registration Statement and (y) may not be sold without volume restrictions pursuant to Rule 144(k) promulgated under the Securities Act (as defined in Section 6); (3) the Common Stock is not listed or quoted for trading on the OTC or on a Subsequent Market; (4) the Company has failed to timely satisfy its conversion obligations hereunder; or (5) the issuance of such shares of Common Stock would result in a violation of Sections 4(a)(ii), then, the Company may not pay interest in kind and must pay interest in cash by delivering, within three Trading Days of each applicable Conversion Date, an amount in cash equal to the product of such fraction multiplied by the price of such Share or Unit in the Qualified Offering. 6.4 Subject to Clause 6.6, upon the consummation of a Qualified Offering, in the event that the Borrower does not elect to convert the Loan into Shares in accordance with Clause 6.1: (a) the outstanding principal amount of Availability Period shall terminate and the Debentures Lender will not be required to be converted on such Conversion Date make any further Advances; and (b) upon the product of Repayment Date (x) or any other date on which the quotient obtained by dividing .12 by 360 and (y) the number of days for which such principal amount was outstanding. (C) This Debenture shall Loan is to be convertible into shares of Common Stock at the option of the Holderrepaid, in whole or in part at part), the Lender shall have the right to elect to receive, in its sole discretion, in lieu of any time and from time to timecash repayment of the Loan, after a number of Shares (or Units, if Units are sold in the Original Issue Date (subject Qualified Offering) equal to the limitations on conversion set forth in Section 4(a)(ii) hereof). The Holder shall effect conversions by delivering to the Company a completed notice substantially in the form attached hereto as Exhibit A (a "Conversion Notice"). The Conversion Notice shall set forth the remaining principal amount of this Debenture the Loan being so repaid, divided by the lowest price per Share or Unit paid by investors for Shares or Units in the Qualified Offering before deducting underwriting commissions and all accrued discounts, placement agent commissions and unpaid interest thereon subsequent fees, and other expenses of the Qualified Offering. In lieu of any fractional Share or Unit to which the Lender would otherwise be entitled, the Borrower shall pay cash equal to the conversion at issueproduct of such fraction multiplied by the price of such Share or Unit in the Qualified Offering. The date on which a Conversion Notice is delivered is Borrower shall give the "Conversion Date." Unless Lender written notice five (5) Business Days prior to making any repayment of the Holder is converting the entire principal amount outstanding Loan under this Debenture, the Holder is not be required to physically surrender this Debenture to the Company Agreement in order to effect conversions. Subject permit the Lender to Section 4(b), each Conversion Notice, once given, shall be irrevocable. Conversions hereunder shall have make such an election. 6.5 Upon the effect conversion of lowering the outstanding principal amount of this Debenture plus all accrued Loan and unpaid interest thereon in an amount equal the issuance to the applicable conversionLender of the Shares or Units in accordance in accordance with Clause 6, which shall be evidenced by notations made and upon delivery to the Lender of a valid share certificate for the Shares and other securities comprising Units if Units are issued, (or in the Conversion Notice. The Holder and the Company shall maintain records showing the principal amount converted and the date lieu of such conversions. In the event certificates, evidence of any dispute or discrepancy, direct registration in the records of the Holder transfer agent in the case of the Shares and records of Borrower in the case of other securities comprising Units), this Agreement shall terminate and the Borrower shall be controlling forever released from its obligations under this Agreement, except to the extent that any obligations of the Borrower under Clauses 7 (Tax), 9 (Liability), 10 (Payments) and determinative 13 (Miscellaneous) shall survive such termination and remain be valid and effective. 6.6 If under the rules of the NYSE American or any other stock exchange on which the Shares are listed (an “Applicable Exchange”), approval by the stockholders of the Borrower would be required in connection with the issuance of Shares or Units upon any conversion under this Clause 6, then unless and until such stockholder approval has been obtained, the maximum amount of the Loan (including principal and any accrued interest) that may be converted into Shares or Units shall not exceed an amount that would result in the absence number of manifest errorShares (including Shares issued separately or as a part of a Unit) so issued (together with Shares issued upon the consummation of a Qualified Offering in the case of a conversion under Clause 6.1 or that is otherwise deemed by the Applicable Exchange to be in connection with the consummation of the Qualified Offering) exceeding 19.9% of the number of Shares outstanding immediately before such conversion (and before consummation of the Qualified Offering in the case of a conversion under Clause 6.1 or that is otherwise deemed by the Applicable Exchange to be in connection with the consummation of a Qualified Offering).

Conversion. At the Effective Time of the Merger: (Ai) This Debenture shall be convertible into all shares of Common Stock at the option of the HolderCompany (the “Company Common Stock”), that are owned directly or indirectly by the Company or any subsidiary of the Company shall be cancelled, and no securities of Parent or other consideration shall be delivered in whole exchange therefor; (ii) all shares of Common Stock of the Merger Sub (the "Merger Sub Common Stock"), that are owed directly or indirectly by the Merger Sub or any subsidiary of the Merger Sub shall be canceled without consideration, and no securities of Parent or other consideration shall be delivered in part at any time exchange therefor; (iii) each of the issued and from time to timeoutstanding shares of Parent shall remain outstanding as one validly issued, after fully paid and nonassessable share of the Original Issue Date capital stock of Parent; (subject iv) each share of Company Common Stock issued and outstanding immediately prior to the limitations on conversion set forth Effective Time (other than shares, if any, held by persons who have demanded and perfected dissenters’ rights for such shares in Section 4(a)(iiaccordance with the Corporations Code of the State of California and who, as of the Effective Time, have not effectively withdrawn or lost such dissenters’ rights, referred to hereinafter as “Dissenting Shares”, and those shares being cancelled pursuant to clause (i) hereof). The above) shall be converted automatically into the right to receive, (1) a number of shares (rounded down to the nearest whole share) of the common stock of Parent ("Parent Common Stock") equal to the quotient obtained from dividing (1) $1,245,609 by (2) $0.73, and then dividing such quotient by the total number of shares of Company Common Stock issuable upon issued and outstanding immediately prior to the Effective Time, plus, (2) if the Surviving Corporation produces at least $800,000 of net profit by the first anniversary of the Effective Time, a conversion hereunder shall be determined by adding number of additional shares (rounded down to the sum of (inearest whole share) equal to the quotient obtained by from dividing (x) the outstanding principal amount of this Debenture to be converted and (y) the Conversion Price (as defined herein), and (ii) the amount equal to (I) the product of (x) the outstanding principal amount of this Debenture to be converted and (y) the product of (1) the quotient obtained $300,000 by dividing .12 by 360 and (2) the number average closing price of days for which such principal amount was outstanding, divided by a share of Parent Common Stock (II) the Conversion Price as reported on the Conversion Date, provided, that if Over-the-Counter Bulletin Board (the Company shall have timely elected to pay "OTCBB") for the interest due on a Conversion Date in cash pursuant to five (5) trading days immediately preceding the terms hereof, subsection (ii) shall not be used in the calculation date of the Surviving Corporation's determination of its net profit) and then dividing such quotient by the total number of shares of Company Common Stock issuable upon a conversion hereunder.issued and outstanding immediately prior to the Effective Time, plus (B3) Notwithstanding anything if the Surviving Corporation produces at least $1,000,000 of net profit by the first anniversary of the Effective Time, a number of additional shares (rounded down to the contrary contained herein, if on any Conversion Date: nearest whole share) equal to the quotient obtained from dividing (1) $200,000 by (2) the average closing price of a share of Parent Common Stock (as reported on the OTCBB for the five (5) trading days immediately preceding the date of the Surviving Corporation's determination of its net profit) and then dividing such quotient by the total number of shares of Company Common Stock issued and outstanding immediately prior to the Effective Time, plus (4) if the Surviving Corporation produces at least $2,400,000 of additional net profit by the time authorizedsecond anniversary of the Effective Time, unissued and unreserved for all purposes, or held as treasury stock, is insufficient a number of additional shares (rounded down to pay interest hereunder in shares of Common Stock; the nearest whole share) equal to the quotient obtained from dividing (1) $300,000 by (2) the Underlying Shares issuable for such conversion (including any interest payable in shares) (x) are not registered for resale pursuant to an effective Underlying Shares Registration Statement and (y) may not be sold without volume restrictions pursuant to Rule 144(k) promulgated under the Securities Act average closing price of a share of Parent Common Stock (as defined in Section 6); reported on the OTCBB for the five (35) trading days immediately preceding the date of the Surviving Corporation's determination of its net profit) and then dividing such quotient by the total number of shares of Company Common Stock is not listed or quoted for trading on issued and outstanding immediately prior to the OTC or on a Subsequent Market; (4) Effective Time plus $300,000 in cash divided by the total number of shares of Company has failed Common Stock issued and outstanding immediately prior to timely satisfy its conversion obligations hereunder; orthe Effective Time, plus (5) if the issuance Surviving Corporation produces at least $3,000,000 of such additional net profit by the second anniversary of the Effective Time, a number of additional shares of Common Stock would result in a violation of Sections 4(a)(ii), then, (rounded down to the Company may not pay interest in kind and must pay interest in cash by delivering, within three Trading Days of each applicable Conversion Date, an amount in cash nearest whole share) equal to the product of quotient obtained from dividing (a1) $200,000 by (2) the outstanding principal amount average closing price of the Debentures to be converted on such Conversion Date and (b) the product a share of (x) the quotient obtained by dividing .12 by 360 and (y) the number of days for which such principal amount was outstanding. (C) This Debenture shall be convertible into shares of Parent Common Stock at (as reported on the option of OTCBB for the Holder, in whole or in part at any time and from time to time, after the Original Issue Date five (subject to the limitations on conversion set forth in Section 4(a)(ii5) hereof). The Holder shall effect conversions by delivering to the Company a completed notice substantially in the form attached hereto as Exhibit A (a "Conversion Notice"). The Conversion Notice shall set forth the remaining principal amount of this Debenture and all accrued and unpaid interest thereon subsequent to the conversion at issue. The date on which a Conversion Notice is delivered is the "Conversion Date." Unless the Holder is converting the entire principal amount outstanding under this Debenture, the Holder is not be required to physically surrender this Debenture to the Company in order to effect conversions. Subject to Section 4(b), each Conversion Notice, once given, shall be irrevocable. Conversions hereunder shall have the effect of lowering the outstanding principal amount of this Debenture plus all accrued and unpaid interest thereon in an amount equal to the applicable conversion, which shall be evidenced by notations made in the Conversion Notice. The Holder and the Company shall maintain records showing the principal amount converted and trading days immediately preceding the date of the Surviving Corporation's determination of its net profit) and then dividing such conversions. In quotient by the event total number of any dispute or discrepancyshares of Company Common Stock issued and outstanding immediately prior to the Effective Time, plus $200,000 in cash divided by the records total number of shares of Company Common Stock issued and outstanding immediately prior to the Holder shall be controlling and determinative in the absence of manifest errorEffective Time.

Conversion. (i) Conversion at Option of Holder. (A) This Debenture shall be ------------------------------ convertible into shares of Common Stock at the option of the Holder, in whole or in part at any time and from time to time, after the Original Issue Date (subject to the limitations on conversion set forth in Section 4(a)(ii) hereof). The number of shares of Common Stock issuable upon a conversion hereunder shall be determined by adding equals the sum of (i) the quotient obtained by dividing (x) the outstanding principal amount of this Debenture to be converted and by (y) the Conversion Price (as defined herein), and (ii) the amount equal to (I) the product of (x) the outstanding principal amount of this Debenture to be converted and (y) the product of (1) the quotient obtained by dividing .12 by 360 and (2) the number of days for which such principal amount was outstanding, divided by (II) the Conversion Price on the Conversion Date, provided, that if the Company Holder shall have timely elected to pay -------- receive the interest due on a Conversion Date in cash pursuant to the terms hereofcash, subsection (ii) shall not be used in the calculation of the number of shares of Common Stock issuable upon a conversion hereunder. (B) Notwithstanding anything to the contrary contained herein, if on any Conversion Date: (1) the number of shares of Common Stock at the time authorized, unissued and unreserved for all purposes, or held as treasury stock, is insufficient to pay interest hereunder in shares of Common Stock; (2) the Underlying Shares issuable for such conversion (including any interest payable in shares) (x) are not registered for resale pursuant to an effective Underlying Shares Registration Statement and (y) may not be sold without volume restrictions pursuant to Rule 144(k) promulgated under the Securities Act (as defined in Section 6); (3) the Common Stock is not listed or quoted for trading on the OTC or on a Subsequent Market; (4) the Company has failed to timely satisfy its conversion obligations hereunder; or (5) the issuance of such shares of Common Stock would result in a violation of Sections 4(a)(ii), then, the Company may not pay interest in kind and must pay interest in cash by delivering, within three Trading Days of each applicable Conversion Date, an amount in cash equal to the product of (a) the outstanding principal amount of the Debentures to be converted on such Conversion Date and (b) the product of (x) the quotient obtained by dividing .12 by 360 and (y) the number of days for which such principal amount was outstanding. (C) This Debenture shall be convertible into shares of Common Stock at the option of the Holder, in whole or in part at any time and from time to time, after the Original Issue Date (subject to the limitations on conversion set forth in Section 4(a)(ii) hereof). The Holder shall effect conversions by delivering to the Company a completed notice substantially in the form attached hereto as Exhibit A (a --------- "Conversion Notice") including a completed Conversion Schedule in the form of ----------------- Schedule 1 to the Conversion Notice (on each Conversion Date, the "Conversion ---------- ---------- Schedule"). The Conversion Notice Schedule shall set forth the remaining principal -------- amount of this Debenture and all accrued and unpaid interest thereon subsequent to the conversion at issue. The date on which a Conversion Notice is delivered is the "Conversion Date." Unless the Holder is converting the entire principal --------------- amount outstanding under this Debenture, the Holder is not be required to physically surrender this Debenture to the Company in order to effect conversions. Subject to Section 4(b), each Conversion Notice, once given, shall be irrevocable. Conversions hereunder shall have the effect of lowering the outstanding principal amount of this Debenture plus all accrued and unpaid interest thereon in an amount equal to the applicable conversion, which shall be evidenced by notations made entries set forth in the Conversion NoticeSchedule. The Holder and the Company shall maintain records showing the principal amount converted and the date of such conversions. In the event of any dispute or discrepancy, the records of the Holder shall be controlling and determinative in the absence of manifest error.

Conversion. (A) This 5.1. The holder of this Debenture shall be convertible have the right, at its option (the "Conversion Option"), at any time within not more than twenty (20) days, or less than ten (10) days, prior to the earliest to occur of the Maturity Date or the Prepayment Date, to convert, in whole but not in part, the principal amount of this Debenture, together with accrued unpaid interest thereon, outstanding at the close of business on the date Payor receives notice of such holder's exercise of the Conversion Option, into fully paid and nonassessable shares of Common Stock Stock, par value $.01 per share (the "Conversion Shares"), at the option of the Holdera conversion price per Conversion Share equal to $0.50, in whole or in part at any time and as such price may be adjusted from time to timetime in accordance with the provisions of this Section 5 (the "Conversion Price"), after such that the Original Issue Date (subject to the limitations on conversion set forth in Section 4(a)(ii) hereof). The number of shares of Common Stock issuable Conversion Shares obtained upon a conversion hereunder shall be determined by adding dividing the then Conversion Price into the sum of (i) the quotient obtained by dividing (x) then outstanding principal amount of, and accrued unpaid interest on, this Debenture. 5.2. To exercise the outstanding Conversion Option, the holder hereof shall give written notice to Payor that it elects to convert the principal amount of this Debenture to be converted and Debenture, together with accrued unpaid interest thereon, into Conversion Shares in accordance with the provisions of Section 5.1 above (y) the Conversion Price (as defined herein), and (ii) the amount equal to (I) the product of (x) the outstanding principal amount of this Debenture to be converted and (y) the product of (1) the quotient obtained by dividing .12 by 360 and (2) the number of days for which such principal amount was outstanding, divided by (II) the Conversion Price on the Conversion Date, provided, that if the Company shall have timely elected to pay the interest due on a Conversion Date in cash pursuant to the terms hereof, subsection (ii) shall not be used in the calculation of the number of shares of Common Stock issuable upon a conversion hereunder. (B) Notwithstanding anything to the contrary contained herein, if on any Conversion Date: (1) the number of shares of Common Stock at the time authorized, unissued and unreserved for all purposes, or held as treasury stock, is insufficient to pay interest hereunder in shares of Common Stock; (2) the Underlying Shares issuable for such conversion (including any interest payable in shares) (x) are not registered for resale pursuant to an effective Underlying Shares Registration Statement and (y) may not be sold without volume restrictions pursuant to Rule 144(k) promulgated under the Securities Act (as defined in Section 6); (3) the Common Stock is not listed or quoted for trading on the OTC or on a Subsequent Market; (4) the Company has failed to timely satisfy its conversion obligations hereunder; or (5) the issuance of such shares of Common Stock would result in a violation of Sections 4(a)(ii), then, the Company may not pay interest in kind and must pay interest in cash by delivering, within three Trading Days of each applicable Conversion Date, an amount in cash equal to the product of (a) the outstanding principal amount of the Debentures to be converted on such Conversion Date and (b) the product of (x) the quotient obtained by dividing .12 by 360 and (y) the number of days for which such principal amount was outstanding. (C) This Debenture shall be convertible into shares of Common Stock at the option of the Holder, in whole or in part at any time and from time to time, after the Original Issue Date (subject to the limitations on conversion set forth in Section 4(a)(ii) hereof). The Holder shall effect conversions by delivering to the Company a completed notice substantially in the form attached hereto as Exhibit A (a "Conversion Notice"). The Conversion Notice shall set forth specify the remaining name or names in which the holder wishes the certificates for the Conversion Shares to be registered, together with the address or addresses of the persons so named, provided such Conversion Shares may not be registered in the name of a person or persons other than the holder of this Debenture unless the Debenture, when surrendered for conversion, is accompanied by (i) instruments of transfer in form reasonably satisfactory to Payor, duly executed by the holder hereof and (ii) if requested by Payor, an instrument executed by such other person, in form reasonabl▇ ▇▇▇isfactory to Payor, representing that the Conversion Shares are being acquired for investment and not with a view to distribution within the meaning of the Securities Act of 1933, as amended. 5.3. Promptly after the delivery of the Conversion Notice to Payor, Payor shall cause to be delivered to the holder and/or the holder's designees certificates representing the number of Conversion Shares into which this Debenture is being converted and a cash adjustment in respect of any fraction of a Conversion Share to which the holder shall be entitled. No fractional Conversion Shares will be issued, but an amount of cash equal to the product of the fraction of a Conversion Share which would otherwise be issuable upon the surrender of this Debenture for conversion multiplied by the then existing Conversion Price per Conversion Share will be paid to the holder upon such conversion. Conversion of this Debenture shall be deemed to have been made at the close of business on the date the Conversion Notice is delivered to Payor (the "Conversion Date"), so that interest shall not accrue from and after such date on the principal amount of this Debenture converted and the person or persons entitled to receive Conversion Shares upon such conversion shall be treated for all accrued purposes as having been the record holder or holders thereof at such time and unpaid interest thereon subsequent such conversion shall be at the Conversion Price in effect at such time. The issuance of certificates for Conversion Shares upon conversion of this Debenture shall be made without charge to the conversion at issueholder of this Debenture for any tax in respect of the issuance of such certificates; provided, however, that Payor shall not be required to pay any tax which may be payable in respect of any transfer involved in the issuance and delivery of any such certificates in a name other than that of the Payee and Payor shall not be required to issue or deliver such certificates unless or until the person or persons requesting the issuance thereof shall have paid to Payor the amount of such tax or shall have established to the satisfaction of Payor that such tax has been paid. Upon Payor's (i) delivery of the certificates for the Conversion Shares to the holder of this Debenture and/or its designees and (ii) payment of the cash adjustment, if any, due to the holder of this Debenture pursuant to the terms of this Section 5, the holder of this Debenture shall surrender this Debenture to Payor. The date Certificates representing the Conversion Shares shall be executed on which a Conversion Notice is delivered is behalf of Payor by the manual or facsimile signature of those officers required to sign such certificates under applicable law, and shall bear legends substantially similar to the following: "The securities represented by this certificate and/or the securities issuable upon exercise thereof have not been registered under the Securities Act of 1933, as amended (the "Act"), and may not be offered or sold except (i) pursuant to an effective registration statement under the Act, (ii) to the extent applicable, pursuant to Rule 144 under the Act (or any similar rule under such Act relating to the disposition of securities), or (iii) upon the delivery by the holder to the Company of an opinion of counsel, satisfactory to counsel to the Company, stating that an exemption from registration under such Act is available." 5.4. Payor shall at all times keep available out of its authorized but unissued shares of Common Stock, solely for effecting the conversion of this Debenture, the full number of whole Conversion Date." Unless the Holder is converting Shares then deliverable upon conversion of the entire principal amount outstanding under of this Debenture, and accrued unpaid interest thereon, at the Holder is not time outstanding. Payor shall take at all times such corporate action as shall be required to physically surrender this Debenture to the Company necessary in order that Payor may validly and legally issue fully paid and nonassessable shares of Common Stock in accordance with the provisions of this Section 5. 5.5. In the event Payor shall at any time after the date hereof pay a dividend in shares of Common Stock or make a distribution in shares of Common Stock, then upon such dividend or distribution, the Conversion Price in effect immediately prior to effect conversions. Subject to Section 4(b), each Conversion Notice, once given, such dividend or distribution shall be irrevocable. Conversions hereunder shall have the effect of lowering the outstanding principal amount of this Debenture plus all accrued and unpaid interest thereon in reduced to a price determined by dividing an amount equal to the applicable conversiontotal number of shares of Common Stock outstanding immediately prior to such dividend or distribution multiplied by the Conversion Price in effect immediately prior to such dividend or distribution, which by the total number of shares of Common Stock outstanding immediately after such issuance or sale. For purposes of any computation to be made in accordance with the provisions of this Section 5.5, the shares of Common Stock issuable by way of dividend or distribution shall be evidenced by notations made in deemed to have been issued immediately after the Conversion Notice. The Holder and the Company shall maintain records showing the principal amount converted and opening of business on the date following the date fixed for determination of shareholders entitled to receive such conversionsdividend or distribution. 5.6. In the event the Payor shall at any time subdivide or combine the outstanding shares of Common Stock, the Conversion Price shall forthwith be proportionately decreased in the case of subdivision or increased in the case of combination. 5.7. In the event the Payor shall, at any time or from time to time after the date hereof, issue any shares of Common Stock or other securities convertible into, or exchangeable or exercisable for, Common Stock, in each case other than Excluded Shares (as hereinafter defined), for no consideration or for a consideration per share less than the Conversion Price in effect immediately prior to the issuance of such Common Stock or other securities, the Conversion Price in effect immediately prior to each such issuance shall automatically be lowered to a price equal to the consideration per share received by the Payor upon such issuance. In the case of the issuance of Common Stock for a consideration in whole or part in property other than cash, the value of such property shall be deemed to be the fair market value of such property as determined in good faith by the Board of Directors of the Payor. As used herein, the term "Excluded Shares" shall mean (i) shares of Common Stock issued in connection with transactions described in Sections 5.5 and 5.6 hereof, (ii) shares of Common Stock issued upon the exercise or conversion of any dispute options, rights, warrants or discrepancyother securities outstanding on the date hereof, and (iii) shares of Common Stock issued to officers, directors or employees of, or consultants to, the records Payor pursuant to any agreement, plan or arrangement approved prior to the date hereof by the Board of Directors of the Holder shall be controlling and determinative in the absence of manifest errorPayor or a committee thereof authorized to give such approval.

Conversion. (Ai) This At any time after the Original Issue Date until this Debenture is no longer outstanding, this Debenture, including interest and principal, shall be convertible into shares of Common Stock at the option lower of $0.01 per share or a price of seventy percent (70%) of the Holder, in whole or in part at any time and from time to time, after average of the Original Issue Date two lowest volume weighted average prices (subject to the limitations on conversion set forth in Section 4(a)(ii) hereof). The number of shares of Common Stock issuable upon a conversion hereunder shall be determined by adding the sum of (i) the quotient obtained by dividing (x) the outstanding principal amount of this Debenture to be converted and (y) the Conversion Price (as defined herein“VWAPs”), and (ii) the amount equal to (I) the product of (x) the outstanding principal amount of this Debenture to be converted and (y) the product of (1) the quotient obtained by dividing .12 by 360 and (2) the number of days for which such principal amount was outstanding, divided by (II) the Conversion Price determined on the Conversion Date, provided, that if then current trading market for the Company shall have timely elected to pay the interest due on a Conversion Date in cash pursuant to the terms hereof, subsection (ii) shall not be used in the calculation of the number of shares of Common Stock issuable upon a conversion hereunder. (B) Notwithstanding anything to the contrary contained herein, if on any Conversion Date: (1) the number of shares of Common Stock at the time authorized, unissued and unreserved for all purposes, or held as treasury Company’s common stock, is insufficient for ten (10) trading days prior to pay interest hereunder in shares of Common Stock; (2) the Underlying Shares issuable for such conversion (including any interest payable in shares) (x) are not registered for resale pursuant to an effective Underlying Shares Registration Statement and (y) may not be sold without volume restrictions pursuant to Rule 144(k) promulgated under the Securities Act (as defined in Section 6); (3) the Common Stock is not listed or quoted for trading on the OTC or on a Subsequent Market; (4) the Company has failed to timely satisfy its conversion obligations hereunder; or (5) the issuance of such shares of Common Stock would result in a violation of Sections 4(a)(ii“Set Price”), then, the Company may not pay interest in kind and must pay interest in cash by delivering, within three Trading Days of each applicable Conversion Date, an amount in cash equal to the product of (a) the outstanding principal amount of the Debentures to be converted on such Conversion Date and (b) the product of (x) the quotient obtained by dividing .12 by 360 and (y) the number of days for which such principal amount was outstanding. (C) This Debenture shall be convertible into shares of Common Stock at the option of the Holder, in whole or in part at any time and from time to time, after the Original Issue Date (subject to the limitations on conversion set forth in Section 4(a)(ii) hereof). The Holder shall effect conversions by delivering to the Company a completed notice substantially in the form of Notice of Conversion attached hereto as Exhibit Annex A (a "Notice of Conversion"), specifying the date on which such conversion is to be effected (a "Conversion NoticeDate"). The If no Conversion Date is specified in a Notice of Conversion, the Conversion Date shall set forth be the remaining principal amount date that such Notice of this Debenture and all accrued and unpaid interest thereon subsequent to the conversion at issueConversion is provided hereunder. The date on which a Conversion Notice is delivered is the "Conversion Date." Unless the Holder is converting the entire principal amount outstanding under this DebentureTo effect conversions hereunder, the Holder is shall not be required to physically surrender this Debenture Debentures to the Company in order to effect conversions. Subject to Section 4(b), each Conversion Notice, once given, shall be irrevocable. Conversions hereunder shall have the effect of lowering the outstanding principal amount of this Debenture plus all accrued and unpaid interest thereon in an amount equal to the applicable conversion, which shall be evidenced by notations made in the Conversion NoticeCompany. The Holder and the Company shall maintain records showing the principal amount converted and the date deliver any objection to any Notice of Conversion within 2 Business Days of receipt of such conversionsnotice. In the event of any dispute or discrepancy, the records of the Holder shall be controlling and determinative in the absence of manifest error. The Holder and any assignee, by acceptance of this Debenture, acknowledge and agree that, by reason of the provisions of this paragraph, following conversion of a portion of this Debenture, the unpaid and unconverted principal amount of this Debenture may be less than the amount stated on the face hereof. ii) Shares from any such conversion delivered to Company by 4:00pm EST will be delivered to Holder by 2:30pm EST within 2 (two) business days of conversion notice delivery (see 4(i)). If those shares are not delivered in accordance with this timeframe stated in this Section 4(ii), at any time for any reason prior to offering those shares for sale in a private transaction or in the public market through its broker, Holder may rescind that particular conversion to have the conversion amount returned to the note balance with the conversion shares returned to the Borrower. The Company will make its commercially reasonable best efforts to deliver shares to Holder same day / next day. For each conversion, in the event that shares are not delivered by the third business day (inclusive of the day of the conversion), a penalty of $2,000 per day will be assessed for each day after the third business day (inclusive of the day of the conversion) until share delivery is made. Any such penalty will be added to the principal balance of the Note, under Holders expectation that any penalty amounts will tack back to the original date of the note). If the Company does not request the issuance of the shares underlying this Debenture after receipt of a notice of conversion within three (3) business days following the period allowed for any objection, J▇▇▇ ▇▇▇▇▇▇ shall, in his personal capacity, be responsible for any differential in the value of the converted shares underlying this Debenture between the value of the closing price on the date the shares should have been delivered (the third business day following the submission of a conversion request) and the date the shares are actually delivered. The Holder and any assignee, by acceptance of this Debenture, acknowledge and agree that, by reason of the provisions of this paragraph, following conversion of a portion of this Debenture, the unpaid and unconverted principal amount of this Debenture may be less than the amount stated on the face hereof.

Conversion. 1. Holders of Series B Preferred Shares shall have the right, exercisable after _____, 1998 (A) This Debenture shall be convertible into shares of Common Stock at the option of the Holderunless otherwise exercisable earlier pursuant to this Subparagraph (D)(1)), in whole or in part at any time and from time to time, after to convert all or any Series B Preferred Shares (except that upon any dissolution, liquidation or winding up of the Original Issue Date (subject affairs of the Company the right of conversion shall terminate at the close of business on the Business Day fixed for payment of the liquidating distributions to the limitations on conversion set forth in Section 4(a)(iiwhich holders of Series B Preferred Shares are entitled) hereof). The into such number of shares of fully paid Common Stock issuable upon a conversion hereunder shall be determined by adding the sum of Shares as is obtained by: (i) multiplying the quotient obtained number of Series B Preferred Shares to be converted by $25.00 and (ii) dividing the result by the conversion price listed below that will be in effect during the corresponding date of conversion listed below: -11- Date of Conversion Conversion Price ------------------ ---------------- Prior to the occurrence of a Special Conversion Event: _____, 1998 to and including _____, 1999 $19.1750 _____, 1999 to and including _____, 2000 $18.6875 _____, 2000 to and including _____, 2001 $18.2000 _____, 2001 and thereafter $17.7125 At any time after a Special Conversion Event shall have occurred $17.7125 At any time after Notice of Redemption pursuant to Paragraph (G) hereof $16.2500 If, and each time, a conversion price listed above then in effect (the "Series B Conversion Price") shall be adjusted pursuant to the terms of these Paragraphs (A) through (N), all of the conversion prices listed above shall be so adjusted as though such conversion prices were in effect on the date of adjustment. The Series B Conversion Price shall be the conversion price as last adjusted and then in effect. Notwithstanding anything else to the contrary, (x) after any Special Conversion Event under clauses (i), (iv), (v), (vi), (vii), (viii) or (ix) of the outstanding principal amount of this Debenture to be converted definition thereof and (y) immediately prior to any Special Conversion Event under clauses (ii) or (iii) of the definition thereof, holders of Series B Preferred Shares shall have the right, exercisable at any time, to convert, in accordance with the terms of this Paragraph (D), all or any such Series B Preferred Shares (except that upon any dissolution, liquidation or winding up of the affairs of the Company the right of conversion shall terminate at the close of business on the Business Day fixed for payment of the liquidating distributions to which holders of Series B Preferred Shares are entitled) into such number of fully paid Common Shares as is obtained by: (x) multiplying the number of Series B Preferred Shares to be converted by $25.00 and (y) dividing the result by $17.7125, as adjusted pursuant to this Paragraph (D). Notwithstanding anything to the contrary, during the period from the date the Company resolves to take any action that would constitute a Special Conversion Price Event under clauses (ii) or (iii) of the definition thereof until the consummation of such Special Conversion Event, the holders of Series B Preferred Shares shall have the right to make an election to convert all or any Series B Preferred Shares conditional upon approval of such Special Conversion Event by the holders entitled to vote on such matter, in which case, if such Special Conversion Event is approved, conversion of such Series B Preferred Shares as defined herein)to which a conditional election has been made shall occur immediately prior to such Special Conversion Event. In the event that a tender offer or other similar offer shall have been commenced which if consummated would result in a Special Conversion Event under clause (iv) of the definition thereof, holders shall have the right to convert their Series B Preferred Shares pursuant to the terms hereof within the five business day period prior to the consummation of such tender offer or other similar offer; provided, however, if such tender offer or other similar offer is not consummated or, if consummated, does not result in a Special Conversion Event under clause (iv) of the definition thereof, then the Company shall have the right to redeem any and all Common Shares into which any Series B Preferred Shares were converted pursuant to such clause (iv) for the same number of Series B Preferred Shares converted pursuant thereto, upon written notice from the Company notifying such holder of the election of the Company to redeem such Series B Preferred Shares stating the number of Common Shares to be surrendered, the number of Series B Preferred Shares to be issued therefor and the date and the place(s) where the certificate(s) representing such Series B Preferred Shares are to be surrendered. On or after the date specified in such notice, each such holder shall present and surrender his certificate or certificates for such Common Shares to the Company at the place designated in such notice for redemption and thereupon such holder shall be issued the same number of Series B Preferred Shares converted and each surrendered certificate shall be cancelled. From and after the date of issuance of the number of Series B Preferred Shares set forth in the notice, (i) all distributions on the Common Shares to be redeemed shall cease to accrue, and (ii) all rights of the amount equal holders thereof as holders of Common Shares shall cease and terminate, except for the right to (I) receive the product number of (x) Series B Preferred Shares upon the outstanding principal amount surrender of this Debenture Common Shares certificates as set forth in the notice. In addition to any other notice required to be converted and given hereunder, (yi) if a Special Conversion Event shall have occurred, or, (ii) if, prior to _____, 1998, an Adjustment Event shall have occurred, the product Company shall, within five Business Days of such occurrence, send notice to all holders of Series B Preferred Shares (1) that the quotient obtained by dividing .12 by 360 Series B Preferred Shares are convertible and not subject to any waiting period with respect to the conversion thereof, (2) of the number date as of days for which such principal amount was outstandingthe Series B Preferred Shares became convertible, divided by (II3) of the ratio at which the Series B Preferred Shares are convertible and (4) a description of the nature of the Special Conversion Price on Event or Adjustment Event, as the Conversion Date, provided, that if the case may be. The Company shall have timely elected send notice to pay the interest due on all holders of Series B Preferred Shares describing any action that would constitute a Special Conversion Date in cash pursuant to the terms hereof, subsection Event under clauses (ii) shall not be used in the calculation or (iii) of the number definition thereof, together with a form of shares conversion notice, at least 30 calendar days prior to any vote of holders of the Common Stock issuable upon a conversion hereunder. (B) Notwithstanding anything Shares required to approve such action, or, if no such vote is so required, prior to the contrary contained hereinconsummation of the transaction. Notwithstanding the surrender of Series B Preferred Shares for conversion into Common Shares, if on all accrued distributions with respect to such Series B Preferred Shares for any Conversion Date: (1) the number of shares of Common Stock past Distribution Periods that are in arrears at the time authorized, unissued and unreserved for all purposes, or held as treasury stock, is insufficient to pay interest hereunder in shares of Common Stock; (2) the Underlying Shares issuable for such conversion (including shall be paid to the registered holder of such Series B Preferred Shares in the same manner as if such registered holder continued to be the registered holder of such converted Series B Preferred Shares following such conversion or, if upon conversion of such Series B Preferred Shares there will be no more Series B Preferred Shares outstanding, then at the time of such conversion. In addition, if any interest holder surrenders Series B Preferred Shares for conversion into Common Shares, such holder shall be entitled to receive a distribution on such Series B Preferred Shares converted for the portion of the current Distribution Period such holder owned the Series B Preferred Shares surrendered for conversion, notwithstanding that the record date for the distribution payable in shares) (x) are not registered for resale pursuant to an effective Underlying Shares Registration Statement and (y) the current Distribution Period may not be sold without volume restrictions pursuant to Rule 144(k) promulgated under the Securities Act (as defined have occurred, in Section 6); (3) the Common Stock is not listed or quoted for trading on the OTC or on a Subsequent Market; (4) the Company has failed to timely satisfy its conversion obligations hereunder; or (5) the issuance of such shares of Common Stock would result in a violation of Sections 4(a)(ii), then, the Company may not pay interest in kind and must pay interest in cash by delivering, within three Trading Days of each applicable Conversion Date, an amount in cash per Series B Preferred Share converted equal to the product of (ai) the outstanding principal amount distribution payable on each Series B Preferred Share converted for the current Distribution Period, multiplied by (ii) a fraction, the numerator of the Debentures to be converted on such Conversion Date and (b) the product of (x) the quotient obtained by dividing .12 by 360 and (y) which is the number of calendar days for which in such principal amount was outstanding. Distribution Period elapsed to (Cbut not including) This Debenture shall be convertible into shares of Common Stock at the option of the Holder, in whole or in part at any time and from time to time, after the Original Issue Date (subject to the limitations on conversion set forth in Section 4(a)(ii) hereof). The Holder shall effect conversions by delivering to the Company a completed notice substantially in the form attached hereto as Exhibit A (a "Conversion Notice"). The Conversion Notice shall set forth the remaining principal amount of this Debenture and all accrued and unpaid interest thereon subsequent to the conversion at issue. The date on which a Conversion Notice is delivered is the "Conversion Date." Unless the Holder is converting the entire principal amount outstanding under this Debenture, the Holder is not be required to physically surrender this Debenture to the Company in order to effect conversions. Subject to Section 4(b), each Conversion Notice, once given, shall be irrevocable. Conversions hereunder shall have the effect of lowering the outstanding principal amount of this Debenture plus all accrued and unpaid interest thereon in an amount equal to the applicable conversion, which shall be evidenced by notations made in the Conversion Notice. The Holder and the Company shall maintain records showing the principal amount converted and the date of conversion and the denominator of which is the total number of calendar days in such conversions. In the event of any dispute or discrepancy, the records of the Holder shall be controlling and determinative in the absence of manifest errorDistribution Period.

Conversion. (A1) This Debenture shall be convertible Provided that there are no unresolved claims for losses incurred by the Company pursuant to the indemnification provisions of Section 8 of the Purchase Agreement, the holder of this Security is entitled at any time after [12 MONTHS FROM CLOSING DATE], 2003 and from time to time before the close of business on the Maturity Date, to convert the principal amount of this Security (or any portion of the principal amount hereof that is an integral multiple of $1,000), into fully paid and nonassessable Common Stock (calculated as to each conversion to the nearest 1/100 of a share) of the Company at the rate of ________(1) shares of Common Stock for each $1,000 principal amount of Security (or at the option then current adjusted rate if an adjustment has been made as provided below) (the "Conversion Rate") by surrender of this Security, duly endorsed or assigned to the Company or in blank to the Company at the Designated Office, accompanied by written notice to the Company, in the form attached hereto, that the holder hereof elects to convert this Security (or if less than the entire principal amount hereof is to be converted, specifying the portion hereof to be converted). If the holder elects to exercise its conversion right hereunder, then the Company shall, within five (5) Business Days after receipt of written notice of such election, deliver or cause to be delivered to the holder at the address specified by the holder to the Company in the conversion notice a certificate or certificates for the Common Stock issued upon such conversion and any replacement Security issued as a result of any partial conversion of this Security. (2) Upon surrender of this Security for conversion, the holder will be entitled to payment in cash within three (3) Business Days thereafter of the Holder, in whole or in part at any time and from time to time, after interest accrued on the Original Issue Date (subject to the limitations on conversion set forth in Section 4(a)(ii) hereof). The number of shares of Common Stock issuable upon a conversion hereunder shall be determined by adding the sum of (i) the quotient obtained by dividing (x) the outstanding principal amount of this Debenture to be Security then being converted and (y) the Conversion Price (as defined herein), and (ii) the amount equal unpaid to (I) the product such date of (x) the outstanding principal amount of this Debenture to be converted and (y) the product of (1) the quotient obtained by dividing .12 by 360 and (2) the number of days for which such principal amount was outstanding, divided by (II) the Conversion Price on the Conversion Date, provided, that if the Company shall have timely elected to pay the interest due on a Conversion Date in cash pursuant to the terms hereof, subsection (ii) shall not be used in the calculation of the number of shares of Common Stock issuable upon a conversion hereunderconversion. (B) Notwithstanding anything to the contrary contained herein, if on any Conversion Date: (1) the number of shares of Common Stock at the time authorized, unissued and unreserved for all purposes, or held as treasury stock, is insufficient to pay interest hereunder in shares of Common Stock; (2) the Underlying Shares issuable for such conversion (including any interest payable in shares) (x) are not registered for resale pursuant to an effective Underlying Shares Registration Statement and (y) may not be sold without volume restrictions pursuant to Rule 144(k) promulgated under the Securities Act (as defined in Section 6); (3) Subject to Section 2(b) below, no payment or adjustment is to be made on conversion for dividends on the Common Stock is not listed or quoted for trading on the OTC or on a Subsequent Market; (4) the Company has failed to timely satisfy its conversion obligations hereunder; or (5) the issuance of such shares of Common Stock would result in a violation of Sections 4(a)(ii), then, the Company may not pay interest in kind and must pay interest in cash by delivering, within three Trading Days of each applicable Conversion Date, an amount in cash equal to the product of (a) the outstanding principal amount of the Debentures to be converted on such Conversion Date and (b) the product of (x) the quotient obtained by dividing .12 by 360 and (y) the number of days for which such principal amount was outstanding. (C) This Debenture shall be convertible into shares of Common Stock at the option of the Holder, in whole or in part at any time and from time to time, after the Original Issue Date (subject to the limitations issued on conversion set forth in Section 4(a)(ii) hereof). The Holder shall effect conversions by delivering to the Company a completed notice substantially in the form attached hereto as Exhibit A (a "Conversion Notice"). The Conversion Notice shall set forth the remaining principal amount No fractions of this Debenture and all accrued and unpaid interest thereon subsequent to the conversion at issue. The date shares or scrip representing fractions of shares will be issued on which a Conversion Notice is delivered is the "Conversion Date." Unless the Holder is converting the entire principal amount outstanding under this Debenture, the Holder is not be required to physically surrender this Debenture to the Company in order to effect conversions. Subject to Section 4(b), each Conversion Notice, once given, shall be irrevocable. Conversions hereunder shall have the effect of lowering the outstanding principal amount of this Debenture plus all accrued and unpaid interest thereon in an amount equal to the applicable conversion, which shall be evidenced by notations made in the Conversion Notice. The Holder and the Company shall maintain records showing the principal amount converted and the date but instead of such conversions. In the event of any dispute or discrepancy, the records of the Holder shall be controlling and determinative in the absence of manifest error.any

Conversion. (A) This Debenture 6.1 The Outstanding Loan Amount shall be convertible into shares of Common Stock at the option convert to Shares of the HolderBorrower (such date being the “Conversion Date”) unless agreed otherwise in writing by the Lender, in whole or in part at any time and from time to time, automatically on the Listing Date. 6.2 As soon as practicable after the Original Issue Date (subject to the limitations on conversion set forth in Section 4(a)(ii) hereof). The number of shares of Common Stock issuable upon a conversion hereunder shall be determined by adding the sum of (i) the quotient obtained by dividing (x) the outstanding principal amount of this Debenture to be converted and (y) the Conversion Price (as defined herein), and (ii) the amount equal to (I) the product of (x) the outstanding principal amount of this Debenture to be converted and (y) the product of (1) the quotient obtained by dividing .12 by 360 and (2) the number of days for which such principal amount was outstanding, divided by (II) the Conversion Price on the Conversion Date, provided, that if the Company shall have timely elected to pay the interest due and in any event on a Conversion Date in cash pursuant or prior to the terms hereof, subsection (ii) shall not be used in the calculation of the number of shares of Common Stock issuable upon a conversion hereunder. (B) Notwithstanding anything to the contrary contained herein, if on any Conversion Listing Date: 6.2.1 the Borrower shall issue to the Lender (1or its nominee) the that number of shares of Common Stock at the time authorized, unissued and unreserved for all purposes, or held as treasury stock, fully paid Shares that is insufficient to pay interest hereunder in shares of Common Stock; (2) the Underlying Shares issuable for such conversion (including any interest payable in shares) (x) are not registered for resale pursuant to an effective Underlying Shares Registration Statement and (y) may not be sold without volume restrictions pursuant to Rule 144(k) promulgated under the Securities Act (as defined in Section 6); (3) the Common Stock is not listed or quoted for trading on the OTC or on a Subsequent Market; (4) the Company has failed to timely satisfy its conversion obligations hereunder; or (5) the issuance of such shares of Common Stock would result in a violation of Sections 4(a)(ii), then, the Company may not pay interest in kind and must pay interest in cash by delivering, within three Trading Days of each applicable Conversion Date, an amount in cash equal to the product of (a) Conversion Amount divided by the outstanding principal amount Conversion Price, rounded upwards if necessary to the nearest whole Share: 6.2.2 the Borrower shall enter the name of the Debentures Lender (or its nominee) in its register of shareholders as the owner of those Shares; 6.2.3 the Borrower shall file a Form SH01 at Companies House in respect of the Shares being issued; and 6.2.4 the Borrower shall send a share certificate evidencing those Shares to be converted on such Conversion Date and the Lender (b) or its nominee), 6.3 If the product Borrower complies with all of (x) its obligations under this clause 6, the quotient obtained by dividing .12 by 360 and (y) the number of days for which such principal amount was outstanding. (C) This Debenture Loan shall be convertible into shares of Common Stock at the option of the Holder, in whole or in part at any time and from time to time, after the Original Issue Date (subject to the limitations on conversion set forth in Section 4(a)(ii) hereof). The Holder shall effect conversions reduced by delivering to the Company a completed notice substantially in the form attached hereto as Exhibit A (a "Conversion Notice"). The Conversion Notice shall set forth the remaining principal amount of this Debenture and all accrued and unpaid interest thereon subsequent to the conversion at issue. The date on which a Conversion Notice is delivered is the "Conversion Date." Unless the Holder is converting the entire principal amount outstanding under this Debenture, the Holder is not be required to physically surrender this Debenture to the Company in order to effect conversions. Subject to Section 4(b), each Conversion Notice, once given, shall be irrevocable. Conversions hereunder shall have the effect of lowering the outstanding principal amount of this Debenture plus all accrued and unpaid interest thereon in an amount equal to the applicable conversionConversion Amount. 6.4 The Borrower shall procure that it has sufficient unissued Shares and all necessary shareholder consents and approvals as may be required to issue Shares to the Lender pursuant to this clause 6. 6.5 If the Borrower makes: 6.5.1.1 an issue of shares by way of capitalisation of profits or reserves (including any share premium account or capital redemption reserve to the holders of Shares); 6.5.1.2 a sub-division or consolidation of Shares; 6.5.1.3 a distribution in specie; 6.5.1.4 a repayment, which return or distribution of capital (including a distribution of capital profits (whether realised or not) or capital reserves); or 6.5.1.5 any event similar to those described in the preceding paragraphs occurs, then the Conversion Price shall be evidenced adjusted in such manner as determined in good faith by notations made the Borrower to ensure that the Lender obtains the same economic benefit in the Conversion Notice. The Holder event that it exercises its conversion right under this Clause, as it would have done but for that event. 6.6 Where the Outstanding Loan Amount is converted into Shares in accordance with this clause 6, such conversion shall constitute a full and the Company shall maintain records showing the principal amount converted and the date of such conversions. In the event of any dispute or discrepancy, the records final discharge of the Holder shall be controlling and determinative in Borrower’s obligation to repay the absence of manifest errorrelevant Conversion Amount.

Conversion. (A) This Debenture 6.1 On the Completion Date, the Company shall be convertible simultaneously convert, or procure the Conversion of, such maximum amount of the BVFVNL Investment together with all accrued interest into shares of Common Stock fully paid New Shares at the option Share Price so as not to result in the Investor holding a Control Stake (as defined in the Articles of Association) and as such the number of New Shares allotted and issued under this clause 6.1 may be nil. 6.2 If after the conversion under clause 6.1 a portion of the Holderamount of the BVFVNL Investment and any accrued interest thereon remains outstanding, then on written demand of BVFVNL, the Company shall convert, or procure the Conversion of, the un-converted balance of the amount of the BVFVNL Investment and accrued interest in whole one or more tranches into fully paid New Shares of the Company at the Share Price, provided that in part at any time and from time case such conversion shall not result in the Investor holding a Control Stake. 6.3 If the calculation in clause 6.2 does not result in a round number of New Shares to timebe issued on the Completion Date, after then the Original Issue Date (subject Company shall issue to the limitations on conversion set forth in Section 4(a)(ii) hereof). The Investor the number of New Shares rounded down to the nearest whole number, as issuance of fractional shares is prohibited, provided, however, that the Company shall notify the Investor within three (3) Business Days of Common Stock issuable upon a conversion hereunder shall be determined by adding the sum Completion Date of its right to acquire one additional New Share if the Investor pays to the Company within ten (i10) Business Days of such notice from the quotient obtained by dividing Company the value of the difference between (x) the outstanding principal amount price of this Debenture to be converted a single New Share determined in accordance with clause 6.1 and (y) the Conversion Price (value of the fractional share the Investor otherwise would be entitled to receive where it not prohibited. 6.4 As soon as defined herein), and (ii) reasonably practicable after the amount equal to (I) the product of (x) the outstanding principal amount of this Debenture to be converted and (y) the product of (1) the quotient obtained by dividing .12 by 360 and (2) the number of days for which such principal amount was outstanding, divided by (II) the Conversion Price on the Conversion Completion Date, provided, that if the Company shall have timely elected to pay the interest due on a Conversion Date in cash pursuant dispatch to the terms hereof, subsection (ii) shall not be used in Investor the calculation of certificates for the relevant number of shares of Common Stock issuable upon a conversion hereunder. (B) Notwithstanding anything New Shares to which it is entitled under this clause 6. Each New Share arising on Conversion shall be issued and allotted at such premium to reflect the contrary contained herein, if on any Conversion Date: (1) difference between the number of shares of Common Stock at the time authorized, unissued and unreserved for all purposes, or held as treasury stock, is insufficient to pay interest hereunder in shares of Common Stock; (2) the Underlying Shares issuable for such conversion (including any interest payable in shares) (x) are not registered for resale pursuant to an effective Underlying Shares Registration Statement and (y) may not be sold without volume restrictions pursuant to Rule 144(k) promulgated under the Securities Act (as defined in Section 6); (3) the Common Stock is not listed or quoted for trading on the OTC or on a Subsequent Market; (4) the Company has failed to timely satisfy its conversion obligations hereunder; or (5) the issuance of such shares of Common Stock would result in a violation of Sections 4(a)(ii), then, the Company may not pay interest in kind and must pay interest in cash by delivering, within three Trading Days of each applicable Conversion Date, an amount in cash equal to the product of (a) the outstanding principal nominal amount of the Debentures to New Share and the price per share as determined above. 6.5 The New Shares shall be converted credited as fully paid and rank pari passu with shares of the same class in issue on such Conversion the Completion Date and (b) shall carry the product of (x) the quotient obtained by dividing .12 by 360 and (y) the number of days for which such principal amount was outstanding. (C) This Debenture shall be convertible into shares of Common Stock at the option of the Holder, in whole or in part at any time and from time to time, after the Original Issue Date (subject to the limitations on conversion rights as set forth in Section 4(a)(ii) hereof). The Holder shall effect conversions by delivering to the Company a completed notice substantially out in the form attached hereto as Exhibit A (a "Conversion Notice"). The Conversion Notice shall set forth the remaining principal amount Articles of this Debenture and all accrued and unpaid interest thereon subsequent to the conversion at issue. The date on which a Conversion Notice is delivered is the "Conversion DateAssociation." Unless the Holder is converting the entire principal amount outstanding under this Debenture, the Holder is not be required to physically surrender this Debenture to the Company in order to effect conversions. Subject to Section 4(b), each Conversion Notice, once given, shall be irrevocable. Conversions hereunder shall have the effect of lowering the outstanding principal amount of this Debenture plus all accrued and unpaid interest thereon in an amount equal to the applicable conversion, which shall be evidenced by notations made in the Conversion Notice. The Holder and the Company shall maintain records showing the principal amount converted and the date of such conversions. In the event of any dispute or discrepancy, the records of the Holder shall be controlling and determinative in the absence of manifest error.

Conversion. ‌ (Aa) This Debenture shall be convertible into shares If the Notice of Common Stock at Conversion is issued in the option timeframe required under the Construction Phase Financing Agreement and all conditions with respect thereto and with respect to the purchase of the HolderGovernmental Note are satisfied, Conversion will occur on the Conversion Date indicated in whole such Notice of Conversion. If the Notice of Conversion is not so issued or in part at any time all conditions with respect thereto and from time to time, after the Original Issue Date (subject with respect to the limitations funding of the Funding Loan are not so satisfied, then Conversion will not occur and neither the ▇▇▇▇▇▇▇ Mac Seller/Servicer nor ▇▇▇▇▇▇▇ ▇▇▇ will have any obligations with respect to the purchase of the Governmental Note or otherwise with respect to the Loan or the Project. (b) If the Conditions to Conversion are satisfied on conversion set forth in Section 4(a)(ii) hereof). The number of shares of Common Stock issuable upon a conversion hereunder shall be determined by adding or before the sum of Forward Commitment Maturity Date, Conversion will occur on the Conversion Date and, on such Conversion Date, (i) the quotient obtained by dividing (x) the outstanding principal amount of this Debenture Bonds shall be subject to be converted and (y) the Conversion Price (as defined herein)mandatory tender in accordance with Section 3.01 hereof, and (ii) the amount equal to purchase price of the Bonds shall be paid with amounts on deposit in the Collateral Fund (Iand/or other Eligible Funds hereunder), (iii) a portion of the product of (x) the outstanding principal amount of the Bonds shall be cancelled such that the principal amount outstanding equals the Actual Project Loan Amount (as determined by the ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇/Servicer at such time), (iv) the Bonds shall be removed from the Book-Entry System and converted into a physical Governmental Note (in the form attached to the Funding Loan Agreement) which shall be purchased by the ▇▇▇▇▇▇▇ ▇▇▇ Seller/Servicer, (v) the Funding Loan Agreement attached hereto as Appendix C and the Project Loan Agreement attached hereto as Appendix D shall be delivered by the respective parties and become effective and shall supersede this Debenture Indenture and the Loan Agreement, respectively, (vi) the proceeds of the ▇▇▇▇▇▇▇ ▇▇▇ Seller/Servicer Purchase Price shall be delivered to the Trustee for deposit into the Permanent Loan Purchase Fund, and certain funds of the Borrower shall be converted delivered to the Title Company, (vii) the Mortgage Loan shall be paid in part with amounts on deposit in the Collateral Fund (pursuant to Section 4.08(c) hereof) and in part with amounts held by the Title Company, as applicable and (yviii) all security related to the product Mortgage Loan shall be released or assigned to the ▇▇▇▇▇▇▇ ▇▇▇ Seller/Servicer. If the Conditions to Conversion are not satisfied on or before the Forward Commitment Maturity Date, the Loan will not convert from the Construction Phase to the Permanent Phase, and neither the ▇▇▇▇▇▇▇ ▇▇▇ Seller/Servicer nor ▇▇▇▇▇▇▇ ▇▇▇ will have any obligation with respect to the purchase of the Governmental Note. (1c) Provided all Conditions to Conversion are satisfied, the quotient obtained by dividing .12 by 360 Issuer and (2) Trustee agree to execute and deliver the number of days for which such principal amount was outstandingFunding Loan Agreement, divided by (II) the Conversion Price Governmental Note and Project Loan Agreement on the Conversion Date, provided, that if the Company shall have timely elected to pay the interest due on a Conversion Date in cash pursuant subject to the terms hereofcompletion of the attached forms, including filling in the Conversion Date, the Actual Project Loan Amount and attaching the final amortization schedule in accordance with subsection (iid) shall not be used in the calculation of the number of shares of Common Stock issuable upon a conversion hereunderbelow. (Bd) Notwithstanding anything The Governmental Note shall mature on the Maturity Date, subject to earlier prepayment as provided in the Funding Loan Agreement. The unpaid principal balance of the Governmental Note shall be paid on the dates and in the amounts set forth on the initial Funding Loan Amortization Schedule provided on the Closing Date and attached as Schedule 1 to the contrary contained hereinGovernmental Note (the “Funding Loan Amortization Schedule”) if the Conversion Date occurs on or prior to the initial Forward Commitment Maturity Date. If the Forward Commitment Maturity Date is extended by ▇▇▇▇▇▇▇ ▇▇▇ in accordance with the ▇▇▇▇▇▇▇ ▇▇▇ Commitment and the Construction Phase Financing Agreement, if on any Conversion Date: (1) the number of shares of Common Stock at the time authorized, unissued and unreserved for all purposes, or held as treasury stock, is insufficient to pay interest hereunder in shares of Common Stock; (2) the Underlying Shares issuable for such conversion (including any interest payable in shares) (x) are not registered for resale pursuant to an effective Underlying Shares Registration Statement and (y) may not be sold without volume restrictions pursuant to Rule 144(k) promulgated first principal payment date under the Securities Act Funding Loan Amortization Schedule shall automatically be extended to the first day of the month immediately succeeding the Conversion Date (as defined with the succeeding principal installments remaining consistent with the original schedule but for them occurring on later dates). Additionally, in Section 6); (3) the Common Stock is not listed or quoted for trading event the outstanding amount of the Funding Loan on the OTC or Conversion Date is less than the starting principal amount set forth in the initial Funding Loan Amortization Schedule, a new Funding Loan Amortization Schedule will be generated on a Subsequent Market; (4) the Company has failed to timely satisfy its conversion obligations hereunder; or (5) the issuance of Conversion Date at such shares of Common Stock would result in a violation of Sections 4(a)(ii), then, the Company may not pay interest in kind and must pay interest in cash by delivering, within three Trading Days of each applicable Conversion Date, an amount in cash equal to the product of (a) the lesser outstanding principal amount of based on the Debentures parameters set forth in the ▇▇▇▇▇▇▇ Mac Commitment. In the event the initial Funding Loan Amortization Schedule is modified in accordance with this Section 2.12(d), a replacement Funding Loan Amortization Schedule will be provided by the ▇▇▇▇▇▇▇ ▇▇▇ Seller/Servicer which will be attached to be converted the Governmental Note on such the Conversion Date and (b) the product of (x) the quotient obtained by dividing .12 by 360 and (y) the number of days for which such principal amount was outstandingDate. (Ce) This Debenture In addition to the Conditions to Conversion set forth in the ▇▇▇▇▇▇▇ ▇▇▇ Commitment and the Construction Phase Financing Agreement, Conversion shall be convertible into shares of Common Stock at conditioned upon the option delivery of the Holder, in whole or in part at any time and from time to time, after the Original Issue Date (subject to the limitations on conversion items set forth in Section 4(a)(ii) hereof). The Holder shall effect conversions by delivering to the Company a completed notice substantially in the form attached hereto as Exhibit A (a "Conversion Notice"). The Conversion Notice shall set forth the remaining principal amount of this Debenture and all accrued and unpaid interest thereon subsequent to the conversion at issue. The date on which a Conversion Notice is delivered is the "Conversion Date." Unless the Holder is converting the entire principal amount outstanding under this Debenture, the Holder is not be required to physically surrender this Debenture to the Company in order to effect conversions. Subject to Section 4(b), each Conversion Notice, once given, shall be irrevocable. Conversions hereunder shall have the effect of lowering the outstanding principal amount of this Debenture plus all accrued and unpaid interest thereon in an amount equal to the applicable conversion, which shall be evidenced by notations made in the Conversion Notice. The Holder and the Company shall maintain records showing the principal amount converted and the date of such conversions. In the event of any dispute or discrepancy, the records 2.10 of the Holder shall be controlling and determinative in the absence of manifest errorFunding Loan Agreement.

Conversion. (A) This Debenture Each CCBG Share issued and outstanding immediately prior to the Effective Time shall be convertible converted into shares of Common Stock at the option of right to receive the Holderfollowing, in whole or in part at any time and from time to time, after the Original Issue Date (subject to the limitations on conversion set forth in terms of this Agreement, including, but not limited to, the deliveries contemplated by Section 4(a)(ii7.03(g): (i) hereof). The that number of shares of Enterprises Common Stock issuable upon a conversion hereunder shall be determined (valued at the Notional Value) equal in value to: (1) $1,492,540 (the "Closing Adjustment Escrow Amount") multiplied by adding the sum of (i2) the quotient obtained by dividing percentage such CCBG Share represents of all of the CCBG Shares issued and outstanding immediately prior to the Effective Time (x) the outstanding principal amount of this Debenture "Per Share Percentage"), to be converted and (y) delivered to the Conversion Price (as defined herein), and Shareholders' Representative; (ii) that number of shares of Enterprises Common Stock (valued at the Notional Value) equal in value to: (1) $18,656,748 (the "Claims Escrow Amount") multiplied by (2) the Per Share Percentage, to be delivered to the Shareholders' Representative; (iii) to the extent cash has been designated in the Cash Election as provided in Section 1.02(c) by the holder of such share being converted, a cash amount equal to: (1) the Estimated Merger Consideration multiplied by the Per Share Percentage, multiplied by (2) the Cash Percentage of such holder (the "Cash Component"), to be delivered to the holder of the share being converted; (Iiv) that number of shares of Enterprises Common Stock (valued at the Notional Value) equal in value to: (1) the product of (x) the outstanding principal amount of this Debenture Per Share Percentage multiplied by the Remaining Estimated Merger Consideration, to be delivered to the holder of the share being converted and (y) the product of "Stock Component"). The "Remaining Estimated Merger Consideration" is (1) the quotient obtained Estimated Merger Consideration multiplied by dividing .12 by 360 the difference between such holder's Cash Percentage and 100%, less (2) the number of days for which such principal amount was outstanding, divided by (II) the Conversion Price on the Conversion Date, provided, that if the Company shall have timely elected to pay the interest due on a Conversion Date in cash pursuant to the terms hereof, subsection (ii) shall not be used in the calculation of the number of shares of Common Stock issuable upon a conversion hereunder. (B) Notwithstanding anything to the contrary contained herein, if on any Conversion Date: (1) the number of shares of Common Stock at the time authorized, unissued Claims Escrow Amount and unreserved for all purposes, or held as treasury stock, is insufficient to pay interest hereunder in shares of Common Stock; (2) the Underlying Shares issuable for such conversion (including any interest payable in shares) (x) are not registered for resale pursuant to an effective Underlying Shares Registration Statement and (y) may not be sold without volume restrictions pursuant to Rule 144(k) promulgated under the Securities Act (as defined in Section 6); less (3) the Common Stock is not listed or quoted for trading on the OTC or on a Subsequent Market; (4) the Company has failed to timely satisfy its conversion obligations hereunderClosing Adjustment Escrow Amount; or (5) the issuance of such shares of Common Stock would result in a violation of Sections 4(a)(ii), then, the Company may not pay interest in kind and must pay interest in cash by delivering, within three Trading Days of each applicable Conversion Date, an amount in cash equal to the product of (a) the outstanding principal amount of the Debentures to be converted on such Conversion Date and (b) the product of (x) the quotient obtained by dividing .12 by 360 and (y) the number of days for which such principal amount was outstanding. (C) This Debenture shall be convertible into shares of Common Stock at the option of the Holder, in whole or in part at any time and from time to time, after the Original Issue Date (subject to the limitations on conversion set forth in Section 4(a)(ii) hereof). The Holder shall effect conversions by delivering to the Company a completed notice substantially in the form attached hereto as Exhibit A (a "Conversion Notice"). The Conversion Notice shall set forth the remaining principal amount of this Debenture and all accrued and unpaid interest thereon subsequent to the conversion at issue. The date on which a Conversion Notice is delivered is the "Conversion Date." Unless the Holder is converting the entire principal amount outstanding under this Debenture, the Holder is not be required to physically surrender this Debenture to the Company in order to effect conversions. Subject to Section 4(b), each Conversion Notice, once given, shall be irrevocable. Conversions hereunder shall have the effect of lowering the outstanding principal amount of this Debenture plus all accrued and unpaid interest thereon in an amount equal to the applicable conversion, which shall be evidenced by notations made in the Conversion Notice. The Holder and the Company shall maintain records showing the principal amount converted and the date of such conversions. In the event of any dispute or discrepancy, the records of the Holder shall be controlling and determinative in the absence of manifest error.and

Conversion. (Aa) This Debenture Promptly following receipt by each Seller of the notice referred to in Section 4.1(c) hereof, each Seller shall prepare and deliver to the Company and the Transfer Agent a Conversion Notice in connection with the All Cash Sale of the Shares contemplated hereby (the “Conversion Notice”). Each such Conversion Notice shall set forth (i) the aggregate number of Class P Shares being Transferred by such Seller, which shall be convertible into shares equal to the amount set forth beside such Seller’s name in the second column of Common Stock at Annex A; (ii) the option “aggregate Net Sale Proceeds” receivable by such Seller, which shall be equal to the amount set forth beside such Seller’s name in the third column of the Holder, in whole or in part at any time and from time to time, after the Original Issue Date Annex A (subject to the limitations on conversion set forth adjustment contemplated by the second sentence of Section 1.2); and (iii) the “weighted average per share Net Sale Proceeds” in Section 4(a)(ii) hereof). The number of shares of Common Stock issuable upon a conversion hereunder connection with the Transfer by such Seller, which shall be determined by adding the sum of (i) the quotient obtained by dividing (x) the outstanding principal amount of this Debenture to be converted and (y) the Conversion Price (as defined herein), and (ii) the amount equal to (I) the product of (x) the outstanding principal amount of this Debenture to be converted and (y) the product of (1) the quotient obtained by dividing .12 by 360 and (2) the number of days for which such principal amount was outstanding, divided by (II) the Conversion Price on the Conversion Date, provided, that if the Company shall have timely elected to pay the interest due on a Conversion Date in cash pursuant to the terms hereof, subsection (ii) shall not be used in the calculation of the number of shares of Common Stock issuable upon a conversion hereunder. (B) Notwithstanding anything to the contrary contained herein, if on any Conversion Date: (1) the number of shares of Common Stock at the time authorized, unissued and unreserved for all purposes, or held as treasury stock, is insufficient to pay interest hereunder in shares of Common Stock; (2) the Underlying Shares issuable for such conversion (including any interest payable in shares) (x) are not registered for resale pursuant to an effective Underlying Shares Registration Statement and (y) may not be sold without volume restrictions pursuant to Rule 144(k) promulgated under the Securities Act (as defined in Section 6); (3) the Common Stock is not listed or quoted for trading on the OTC or on a Subsequent Market; (4) the Company has failed to timely satisfy its conversion obligations hereunder; or (5) the issuance of such shares of Common Stock would result in a violation of Sections 4(a)(ii), then, the Company may not pay interest in kind and must pay interest in cash by delivering, within three Trading Days of each applicable Conversion Date, an amount in cash equal to the product amount set forth beside such Seller’s name in the fourth column of (a) the outstanding principal amount of the Debentures to be converted on such Conversion Date and (b) the product of (x) the quotient obtained by dividing .12 by 360 and (y) the number of days for which such principal amount was outstanding. (C) This Debenture shall be convertible into shares of Common Stock at the option of the Holder, in whole or in part at any time and from time to time, after the Original Issue Date Annex A (subject to the limitations on conversion set forth in adjustment contemplated by the second sentence of Section 4(a)(ii) hereof). The Holder shall effect conversions by delivering to the Company a completed notice substantially in the form attached hereto as Exhibit A (a "Conversion Notice"1.2). The Conversion Notice shall also certify that the Transfer being effected in connection with the Conversion Notice will be effected in accordance with an exemption from the registration requirements of the Securities Act applicable to private resales and restricted securities, and shall instruct the Transfer Agent to affix to the certificates being issued in respect of the Shares a legend referenced in Section 3.2(g) hereof. (b) In the event the Closing is not consummated with respect to the purchase of Shares from a particular Seller within five (5) business days (or such longer period as may be agreed by such Seller and the Company) following Voluntary Conversion of Class A Shares into Class P Shares occurring pursuant to Section D.2(a)(iii) of the Certificate of Incorporation such that the Class P Shares would revert back to Class A Shares as contemplated by the Certificate of Incorporation, (i) the condition set forth the remaining principal amount of this Debenture and all accrued and unpaid interest thereon subsequent to the conversion at issue. The date on which a Conversion Notice is delivered is the "Conversion Date." Unless the Holder is converting the entire principal amount outstanding under this Debenture, the Holder is in Section 2.2(b)(vi) hereof shall not be required deemed to physically surrender this Debenture have been satisfied with respect to such Seller and (ii) such Seller shall cause a new Conversion Notice, in each case on the terms set forth in Section 4.3(a), to be promptly delivered to the Company in order and the Transfer Agent. (c) Buyer acknowledges and agrees, with respect to effect conversions. Subject to Section 4(b)the sale of the Shares by each Seller hereunder, each Conversion Notice, once given, (i) that the Transfer by such Seller contemplated by this Agreement shall be irrevocable. Conversions hereunder deemed an All Cash Sale; (ii) that the “aggregate Net Sale Proceeds” (as such term is contemplated by the Certificate of Incorporation) in connection with the Transfer by such Seller pursuant to this Agreement shall be the amount as set forth beside such Seller’s name in the third column of Annex A (subject to the adjustment contemplated by the second sentence of Section 1.2); and (iii) that the “weighted average per share Net Sale Proceeds” (as such term is contemplated by the Certificate of Incorporation) in connection with the Transfer by such Seller pursuant to this Agreement shall be the amount as set forth beside such Seller’s name in the fourth column of Annex A (subject to the adjustment contemplated by the second sentence of Section 1.2). (d) Capitalized terms used but not defined in this Section 4.3 shall have the effect of lowering the outstanding principal amount of this Debenture plus all accrued and unpaid interest thereon in an amount equal meanings given to the applicable conversion, which shall be evidenced by notations made such terms in the Conversion Notice. The Holder and the Company shall maintain records showing the principal amount converted and the date Certificate of such conversions. In the event of any dispute or discrepancy, the records of the Holder shall be controlling and determinative in the absence of manifest errorIncorporation.

Conversion. (Ai) This Debenture At any time after the Original Issue Date, the outstanding Principal Amount and all accrued but unpaid interest thereon shall be convertible into shares of Common Stock convertible, at the option of the Holder, in whole or in part at any time and from time to time, after the Original Issue Date into (subject to the limitations on conversion set forth in Section 4(a)(iii) hereof). The number of shares of Common Stock issuable upon a conversion hereunder and (ii) warrants to purchase up to One Million Six Hundred Sixty Thousand (1,660,000) shares of Common Stock (the "Target Warrant Shares"), in the latter case, on the terms and conditions set forth in the form of Common Stock Purchase Warrant attached hereto as Exhibit A (collectively, the "Warrants"); provided, that the Target Warrant Shares shall be determined by adding the sum of (i) the quotient obtained by dividing (x) subject to adjustment prior to the outstanding principal amount "Conversion Date" (as defined herein) to reflect any and all adjustments to the "Set Price" (as defined herein, and in accordance with Section 4(d) hereof) so that the number of this Debenture Target Warrant Shares (subject to be converted and clauses (y) and (z) hereof) is equal to the Conversion Price product of (A) two, multiplied by (B) the number of "Underlying Shares" (as defined herein), and (ii) the amount equal to (I) the product of (x) the outstanding principal amount of this Debenture to be converted and (y) the product of (1) the quotient obtained by dividing .12 by 360 and (2) the number of days for which such principal amount was outstanding, divided by (II) subject to adjustment prior to the Conversion Price on Date in the same manner as the shares purchasable under the Warrants are subject to adjustment from and after the Conversion Date, provided, that if the Company shall have timely elected to pay the interest due on a Conversion Date in cash pursuant to the terms hereof, subsection (ii) shall not be used in the calculation of the number of shares of Common Stock issuable upon a conversion hereunder. (B) Notwithstanding anything to the contrary contained herein, if on any Conversion Date: (1) the number of shares of Common Stock at the time authorized, unissued and unreserved for all purposes, or held as treasury stock, is insufficient to pay interest hereunder in shares of Common Stock; (2) the Underlying Shares issuable for such conversion (including any interest payable in shares) (x) are not registered for resale pursuant to an effective Underlying Shares Registration Statement and (yz) may not be sold without volume restrictions pursuant to Rule 144(k) promulgated under the Securities Act (as defined in Section 6); (3) the Common Stock is not listed or quoted for trading on the OTC or on a Subsequent Market; (4) the Company has failed to timely satisfy its conversion obligations hereunder; or (5) the issuance of such shares of Common Stock would result in a violation of Sections 4(a)(ii)pro-rated, then, the Company may not pay interest in kind and must pay interest in cash by delivering, within three Trading Days of each applicable Conversion Date, an amount in cash equal to the product of (a) the outstanding principal amount of the Debentures to be converted on such Conversion Date and (b) the product of (x) the quotient obtained by dividing .12 by 360 and (y) the number of days for which such principal amount was outstanding. (C) This Debenture shall be convertible into shares of Common Stock at the option of the Holder, in whole or in part at any time and from time to time, after the Original Issue Date (subject to the limitations on conversion set forth in Section 4(a)(ii) hereof). The Holder shall effect conversions by delivering to the Company a completed notice substantially in the form attached hereto as Exhibit A (a "Conversion Notice"). The Conversion Notice shall set forth event the remaining principal amount Holder converts part but not all of this Debenture the outstanding Principal Amount and all accrued and but unpaid interest thereon subsequent to the conversion at issue. The date on which a Conversion Notice is delivered is the "Conversion Date." Unless the Holder is converting the entire principal amount outstanding under this Debenturethereon; provided, the Holder is not be required to physically surrender this Debenture to the Company further, that in order to effect conversions. Subject to Section 4(b), each Conversion Notice, once given, shall be irrevocable. Conversions hereunder shall have the effect of lowering the outstanding principal amount of this Debenture plus all accrued and unpaid interest thereon in an amount equal to the applicable conversion, which shall be evidenced by notations made in the Conversion Notice. The Holder and the Company shall maintain records showing the principal amount converted and the date of such conversions. In the event of any dispute or discrepancy, adjustment to the records number of the Holder shall be controlling and determinative in the absence of manifest error.Target Warrant Shares

Conversion. a. As of the date hereof, the total amount owed under the Loans made pursuant to the Facility Agreement, including accrued and unpaid interest, is approximately USD 300.1 million (A) This Debenture the “Amount Owed”). Subject to the terms and conditions of this Agreement, the Holder and the Company agree to convert USD 300 million of the Amount Owed (the “Converted Amount”), in multiples of USD 1,000, being USD 250 million of the principal and USD 50 million of the interest accrued, into 465,356,773.50 Class A Ordinary Shares represented by 15,511,892 Class A ADSs (the “Conversion Shares”), at a conversion price equal to USD 19.34 per Class A ADS (the “Conversion Price”). b. The relevant number of Conversion Shares will be determined by dividing the Converted Amount by the Conversion Price, and rounding the result down to the nearest whole number of Class A Ordinary Shares. Fractions of Class A ADSs will not be delivered upon conversion; instead, the value of any such fractional Class A ADSs shall be convertible into shares deemed forgiven and of Common Stock at no further effect. The Holder shall have no right to receive any cash or other consideration in lieu of such fractional Class ADSs. c. The Company hereby agrees to issue to the option of Holder and ensure are credited to the Holder’s designated account, in whole the Conversion Shares free and clear of any liens or in part at any time other encumbrances (other than those arising under applicable securities laws), all on the terms, and from time to time, after the Original Issue Date (subject to the limitations on conversion set forth conditions provided for herein. Such Conversion Shares shall rank pari passu in Section 4(a)(ii) hereof). The number of shares of Common Stock issuable upon a conversion hereunder shall be determined by adding the sum of (i) the quotient obtained by dividing (x) the outstanding principal amount of this Debenture to be converted all respects with existing Class A Ordinary Shares and (y) the Conversion Price (as defined herein), and (ii) the amount equal to (I) the product of (x) the outstanding principal amount of this Debenture to be converted and (y) the product of (1) the quotient obtained by dividing .12 by 360 and (2) the number of days for which such principal amount was outstanding, divided by (II) the Conversion Price on the Conversion Date, provided, that if the Company shall have timely elected update its register of members and instruct the depositary to pay deliver the interest due on a Conversion Date Shares. In the event that any of the Closing Conditions are not satisfied, or in cash pursuant to the event of the termination of this Agreement in accordance with the terms hereof, subsection (ii) this Agreement shall not be used in the calculation have no further force or effect; provided, however, that any accrued rights, obligations, and liabilities of the number parties as of shares the date of Common Stock issuable upon a conversion hereundertermination, and any provisions of this Agreement which by their nature are intended to survive termination (including, without limitation, Section 9 (Miscellaneous), clauses a, b, and c; Section 10 (Governing Law); and Section 11 (Jurisdiction)), shall survive such termination and remain in full force and effect. The issuance and delivery of the Class A ADSs evidencing the Conversion Shares shall be effected in accordance with the terms of the deposit agreement relating to the Company’s American depositary share program, including the deposit of the Class A Ordinary Shares with the custodian, the satisfaction of any applicable procedures of the depositary and the application of any required legends, and the Holder acknowledges that the depositary may require such opinions of counsel or other documentation as it deems reasonably necessary in connection therewith. (B) Notwithstanding anything to the contrary contained herein, if on any Conversion Date: (1) the number of shares of Common Stock at the time authorized, unissued and unreserved for all purposes, or held as treasury stock, is insufficient to pay interest hereunder in shares of Common Stock; (2) the Underlying Shares issuable for such conversion (including any interest payable in shares) (x) are not registered for resale pursuant to an effective Underlying Shares Registration Statement and (y) may not be sold without volume restrictions pursuant to Rule 144(k) promulgated under the Securities Act (as defined in Section 6); (3) the Common Stock is not listed or quoted for trading on the OTC or on a Subsequent Market; (4) the Company has failed to timely satisfy its conversion obligations hereunder; or (5) the issuance of such shares of Common Stock would result in a violation of Sections 4(a)(ii), then, the Company may not pay interest in kind and must pay interest in cash by delivering, within three Trading Days of each applicable Conversion Date, an amount in cash equal to the product of (a) the outstanding principal amount d. Upon delivery of the Debentures Conversion Shares to be converted on such Conversion Date and (b) the product of (x) the quotient obtained by dividing .12 by 360 and (y) the number of days for which such principal amount was outstanding. (C) This Debenture shall be convertible into shares of Common Stock at the option of the Holder, and the payment of any accrued but unpaid interest (that is not included in whole the Converted Amount) up to (but excluding) the Closing Date, any Break Costs and any other fees or in part at any time and from time to time, after the Original Issue Date (subject to the limitations on conversion set forth in Section 4(a)(ii) hereof). The Holder shall effect conversions expenses payable by delivering to the Company a completed notice substantially in under the form attached hereto as Exhibit A (a "Conversion Notice"). The Conversion Notice shall set forth Facility Agreement, accrued but not paid by the remaining principal amount of this Debenture and all accrued and unpaid interest thereon subsequent to the conversion Company at issue. The date on which a Conversion Notice is delivered is the "Conversion Date." Unless the Holder is converting the entire principal amount outstanding under this Debenturesuch date, the Holder is not be required to physically surrender this Debenture to the Company in order to effect conversions. Subject to Section 4(b), each Conversion Notice, once given, Converted Amount shall be irrevocable. Conversions hereunder shall have the effect of lowering the outstanding principal amount of this Debenture plus all accrued deemed repaid and unpaid interest thereon in an amount equal to the applicable conversion, which shall be evidenced by notations made in the Conversion Notice. The Holder and the Company shall maintain records showing the principal amount converted and the date of such conversions. In the event of any dispute or discrepancy, the records of the Holder shall be controlling and determinative in the absence of manifest errordischarged.

Conversion. Upon the closing of a Qualified Financing (Aas defined below) This Debenture all principal and accrued but unpaid interest on this Note shall be convertible automatically convert into shares of Common Stock the same class and series of stock of the Company on the same terms and conditions, including per share price, as such shares are issued in one issue or a series of related issues (not including the value of the converted Loan) in a private offering to “Accredited Investors” (the “Qualified Financing Securities”). For purposes herein, a “Qualified Financing” means the first transaction or series of transactions pursuant to which the Company issues and sells shares of stock to Accredited Investors for aggregate gross proceeds to the Company of at least $5,000,000.00, excluding all proceeds from the option incurrence of indebtedness that is converted into such shares of stock, with the principal purpose of raising capital. If no Qualified Financing shall have been consummated before the Maturity Date, the Holder shall have the right, immediately upon written demand, to require repayment of all unpaid principal and accrued interest on this Note. As promptly as practicable after the conversion of this Note as provided above, the Holder shall surrender this Note to the Company for cancellation, whereupon the Company shall issue and deliver to the Holder, in the name of the Holder, in whole or in part at any time and from time to time, after evidence of the Original Issue Date (subject to equity of the limitations on conversion set forth in Section 4(a)(ii) hereof). The number of shares of Common Stock Company issuable upon a the conversion hereunder of this Note. No fractional shares shall be determined by adding the sum of (i) the quotient obtained by dividing (x) the outstanding principal amount issued upon conversion of this Debenture to be converted and (y) the Conversion Price (as defined herein), and (ii) the amount equal to (I) the product of (x) the outstanding principal amount Note. If conversion of this Debenture to be converted and (y) the product of (1) the quotient obtained by dividing .12 by 360 and (2) the number of days for which such principal amount was outstanding, divided by (II) the Conversion Price on the Conversion Date, provided, that if the Company shall have timely elected to pay the interest due on a Conversion Date Note would result in cash pursuant to the terms hereof, subsection (ii) shall not be used in the calculation of the number of shares of Common Stock issuable upon a conversion hereunder. (B) Notwithstanding anything to the contrary contained herein, if on any Conversion Date: (1) the number of shares of Common Stock at the time authorized, unissued and unreserved for all purposes, or held as treasury stock, is insufficient to pay interest hereunder in shares of Common Stock; (2) the Underlying Shares issuable for such conversion (including any interest payable in shares) (x) are not registered for resale pursuant to an effective Underlying Shares Registration Statement and (y) may not be sold without volume restrictions pursuant to Rule 144(k) promulgated under the Securities Act (as defined in Section 6); (3) the Common Stock is not listed or quoted for trading on the OTC or on a Subsequent Market; (4) the Company has failed to timely satisfy its conversion obligations hereunder; or (5) the issuance of such shares of Common Stock would result in a violation of Sections 4(a)(ii), thenfractional share, the Company may amount payable under this Note that therefore cannot pay interest in kind and must pay interest in cash by delivering, within three Trading Days of each applicable Conversion Date, an amount in cash equal be applied to the product of (a) the outstanding principal amount purchase of the Debentures to be converted on such Conversion Date and (b) the product of (x) the quotient obtained by dividing .12 by 360 and (y) the number of days for which such principal amount was outstanding. (C) This Debenture shares purchasable upon conversion shall be convertible into shares of Common Stock at the option of the Holder, in whole or in part at any time and from time to time, after the Original Issue Date (subject to the limitations on conversion set forth in Section 4(a)(ii) hereof). The Holder shall effect conversions forgiven by delivering to the Company a completed notice substantially in the form attached hereto as Exhibit A (a "Conversion Notice"). The Conversion Notice shall set forth the remaining principal amount of this Debenture and all accrued and unpaid interest thereon subsequent to the conversion at issue. The date on which a Conversion Notice is delivered is the "Conversion Date." Unless the Holder is converting without any further action on the entire principal amount outstanding under this Debenture, the Holder is not be required to physically surrender this Debenture to the Company in order to effect conversions. Subject to Section 4(b), each Conversion Notice, once given, shall be irrevocable. Conversions hereunder shall have the effect of lowering the outstanding principal amount of this Debenture plus all accrued and unpaid interest thereon in an amount equal to the applicable conversion, which shall be evidenced by notations made in the Conversion Notice. The Holder and the Company shall maintain records showing the principal amount converted and the date of such conversions. In the event of any dispute or discrepancy, the records part of the Holder shall be controlling and determinative in or the absence of manifest errorCompany.

Conversion. 6.1 On the Conversion Date, the Borrower shall simultaneously convert, or procure the conversion of, the Loan (Aor relevant portion thereof only in circumstances stipulated in clauses 5.1.1, 5.1.2 or 5.2) This Debenture shall be convertible together with all accrued interest into shares of Common Stock fully paid Ordinary Shares at the option Conversion Price. 6.2 If the calculation in clause 6.1 does not result in a round number of Ordinary Shares to be issued on the Conversion Date, then the Borrower shall issue to the Lender the number of Ordinary Shares rounded down to the nearest whole number, as issuance of fractional shares is prohibited, provided, however, that the Borrower shall notify the Lender within three (3) Business Days of the Holder, in whole or in part at any time and from time Conversion Date of its right to time, after acquire one additional Ordinary Share if the Original Issue Date (subject Lender pays to the limitations on conversion set forth in Section 4(a)(iiBorrower within ten (10) hereof). The number Business Days of shares such notice from the Borrower the value of Common Stock issuable upon a conversion hereunder shall be determined by adding the sum of (i) the quotient obtained by dividing difference between (x) the outstanding principal amount value of this Debenture the fractional share the Lender otherwise would be entitled to be converted receive where it not prohibited and (y) the Conversion Price Price. 6.3 As soon as reasonably practicable but in any event no later than five (as defined herein)5) Business Days after the date of actual Conversion, the Borrower shall dispatch to the Lender the certificates for the relevant number of Ordinary Shares to which it is entitled under this clause 6 together with certified copies of the corporate authorisations of the relevant share issuance and (ii) the amount equal updated register of members reflecting the Lender’s ownership of the relevant Ordinary Shares. Each Ordinary Share arising on Conversion shall be issued and allotted at such premium to (I) reflect the product of (x) difference between the outstanding principal nominal amount of this Debenture to the Ordinary Share and the price per share as determined above. 6.4 The Ordinary Shares shall be converted credited as fully paid and (y) rank pari passu with shares of the product of (1) the quotient obtained by dividing .12 by 360 and (2) the number of days for which such principal amount was outstanding, divided by (II) same class in issue on the Conversion Price on Date and shall carry the rights as set out in the Shareholders Agreement and the Articles of Association, which shall be amended to conform to the Shareholders Agreement. 6.5 On the Conversion Date, providedthe Borrower shall procure that the Lender is entitled to enter into and, that if provided the Company Borrower is in compliance with its obligation in this clause 6.5, the Lender shall execute the deed of adherence required under the Shareholders Agreement in a legally binding manner agreeing to comply with (and have timely elected to pay the interest due on a Conversion Date in cash pursuant to benefit of) the terms hereof, subsection (ii) shall not be used in the calculation of the number of shares of Common Stock issuable upon a conversion hereunderShareholders Agreement. (B) Notwithstanding anything to the contrary contained herein, if on any Conversion Date: (1) the number of shares of Common Stock at the time authorized, unissued and unreserved for all purposes, or held as treasury stock, is insufficient to pay interest hereunder in shares of Common Stock; (2) the Underlying Shares issuable for such conversion (including any interest payable in shares) (x) are not registered for resale pursuant to an effective Underlying Shares Registration Statement and (y) may not be sold without volume restrictions pursuant to Rule 144(k) promulgated under the Securities Act (as defined in Section 6); (3) the Common Stock is not listed or quoted for trading on the OTC or on a Subsequent Market; (4) the Company has failed to timely satisfy its conversion obligations hereunder; or (5) the issuance of such shares of Common Stock would result in a violation of Sections 4(a)(ii), then, the Company may not pay interest in kind and must pay interest in cash by delivering, within three Trading Days of each applicable Conversion Date, an amount in cash equal to the product of (a) the outstanding principal amount of the Debentures to be converted on such Conversion Date and (b) the product of (x) the quotient obtained by dividing .12 by 360 and (y) the number of days for which such principal amount was outstanding. (C) This Debenture shall be convertible into shares of Common Stock at the option of the Holder, in whole or in part at any time and from time to time, after the Original Issue Date (subject to the limitations on conversion set forth in Section 4(a)(ii) hereof). The Holder shall effect conversions by delivering to the Company a completed notice substantially in the form attached hereto as Exhibit A (a "Conversion Notice"). The Conversion Notice shall set forth the remaining principal amount of this Debenture and all accrued and unpaid interest thereon subsequent to the conversion at issue. The date on which a Conversion Notice is delivered is the "Conversion Date." Unless the Holder is converting the entire principal amount outstanding under this Debenture, the Holder is not be required to physically surrender this Debenture to the Company in order to effect conversions. Subject to Section 4(b), each Conversion Notice, once given, shall be irrevocable. Conversions hereunder shall have the effect of lowering the outstanding principal amount of this Debenture plus all accrued and unpaid interest thereon in an amount equal to the applicable conversion, which shall be evidenced by notations made in the Conversion Notice. The Holder and the Company shall maintain records showing the principal amount converted and the date of such conversions. In the event of any dispute or discrepancy, the records of the Holder shall be controlling and determinative in the absence of manifest error.

Conversion. (i) Conversion at Option of Holder. (A) This Debenture shall -------------------------------- be convertible into shares of Common Stock at the option of the Holder, in whole or in part at any time and from time to time, after the Original Issue Date (subject to the limitations on conversion set forth in Section 4(a)(ii) hereof). The number of shares of Common Stock issuable upon a conversion hereunder shall be determined by adding equals the sum of (i) the quotient obtained by dividing (x) the outstanding principal amount of this Debenture to be converted and by (y) the Conversion Price (as defined hereinsee (c)(i) for this section), and (ii) the amount equal to (I) the product of (x) the outstanding principal amount of this Debenture to be converted and (y) the product of (1) the quotient obtained by dividing .12 .08 by 360 and (2) the number of days for which such principal amount was outstanding, divided by (II) the Conversion Price on the Conversion Date, provided, that if the Company Holder shall have timely -------- elected to pay receive the interest due on a Conversion Date in cash pursuant to the terms hereofcash, subsection (ii) shall not be used in the calculation of the number of shares of Common Stock issuable upon a conversion hereunder. (B) Notwithstanding anything to the contrary contained herein, if on any Conversion Date: (1) the number of shares of Common Stock at the time authorized, unissued and unreserved for all purposes, or held as treasury stock, is insufficient to pay principal and interest hereunder in shares of Common Stock; (2) after the Underlying Shares issuable for Principal and Interest Effectiveness Date (the ninetieth day after closing) such conversion (including any interest payable in shares) shares of Common Stock (x) are not registered for resale pursuant to an effective Underlying Shares Registration Statement and (y) may May not be sold without volume restrictions pursuant to Rule 144(k) promulgated under the Securities Act (as defined in Section 6); , as determined by counsel to the Company pursuant to a written opinion letter, addressed to the Company's transfer agent in the form and substance acceptable to the applicable Holder and such transfer agent (3) if the shares of Common Stock is not listed or quoted are permitted by the Holder to be delivered under this clause (2) prior to the Effectiveness Date (as defined in the Registration Rights Agreement) and thereafter an Underlying Shares Registration Statement shall be declared effective by the Commission, the Company shall, within three Trading Days after the date of such declaration of effectiveness, exchange such shares for trading on the OTC or on a Subsequent Marketshares of Common Stock that are free of restrictive legends of any kind); (4) the Company has failed to timely satisfy its conversion obligations hereunder; or (5) the issuance of such shares of Common Stock would result in a violation of Sections 4(a)(ii), then, at the Company may not pay interest option of the Holder, the Company, in kind and must pay interest in cash by deliveringlieu of delivering shares of Common Stock pursuant to Section 4(a)(i), shall deliver, within three Trading Days of each applicable Conversion Date, an amount in cash equal to the product of (a) the outstanding principal amount of the Debentures to be converted on plus any interest due therein divided by the conversion price and multiplied by the highest closing price of the stock from date of the conversion notice till the date that such Conversion Date and (b) the product of (x) the quotient obtained by dividing .12 by 360 and (y) the number of days for which such principal amount was outstandingcash payment is made. (C) This Debenture shall be convertible into shares of Common Stock at the option of the Holder, in whole or in part at any time and from time to time, after the Original Issue Date (subject to the limitations on conversion set forth in Section 4(a)(ii) hereof). The Holder shall effect conversions by simultaneously delivering to the Company and the Escrow Agent a completed notice substantially in the form attached hereto as Exhibit A (a "Conversion Notice"), including a completed Conversion Schedule --------- ----------------- in the form of Schedule 1 to the Conversion Notice (on each Conversion Date, the ---------- "Conversion Schedule"). The Conversion Notice Schedule shall set forth the remaining -------------------- principal amount of this Debenture and all accrued and unpaid interest thereon subsequent to the conversion at issue. The date on which a Conversion Notice is delivered is the "Conversion Date." Unless the Holder is converting the entire --------------- principal amount outstanding under this Debenture, the Holder is not be required to physically surrender this Debenture to the Company in order to effect conversions. Subject to Section 4(b), each Conversion Notice, once given, shall be irrevocable. Conversions hereunder shall have the effect of lowering the outstanding principal amount of this Debenture plus all accrued and unpaid interest thereon in an amount equal to the applicable conversion, which shall be evidenced by notations made entries set forth in the Conversion NoticeSchedule. The Holder and the Company shall maintain records showing the principal amount converted and the date of such conversions. In the event of any dispute or discrepancy, the records of the Holder shall be controlling and determinative in the absence of manifest error.

Conversion. (Ai) This Debenture shall be convertible into shares of the Common Stock (subject to reduction pursuant to Section 4(a)(ii) below and Section 3.7 of the Purchase Agreement, at the option of the Holder, Holder in whole or in part at any time and from time to time, time after the Original Issue Date (subject and prior to the limitations on conversion set forth in Section 4(a)(ii) hereof). The number close of shares of Common Stock issuable upon a conversion hereunder shall be determined by adding the sum of (i) the quotient obtained by dividing (x) the outstanding principal amount of this Debenture to be converted and (y) the Conversion Price (as defined herein), and (ii) the amount equal to (I) the product of (x) the outstanding principal amount of this Debenture to be converted and (y) the product of (1) the quotient obtained by dividing .12 by 360 and (2) the number of days for which such principal amount was outstanding, divided by (II) the Conversion Price business on the Conversion Maturity Date, provided, that if the Company shall have timely elected to pay the interest due on a Conversion Date in cash pursuant to the terms hereof, subsection (ii) shall not be used in the calculation of the number of shares of Common Stock issuable upon a conversion hereunder. (B) Notwithstanding anything to the contrary contained herein, if on any Conversion Date: (1) the number of shares of Common Stock at the time authorized, unissued and unreserved for all purposes, or held as treasury stock, is insufficient to pay interest hereunder in shares of Common Stock; (2) the Underlying Shares issuable for such conversion (including any interest payable in shares) (x) are not registered for resale pursuant to an effective Underlying Shares Registration Statement and (y) may not be sold without volume restrictions pursuant to Rule 144(k) promulgated under the Securities Act (as defined in Section 6); (3) the Common Stock is not listed or quoted for trading on the OTC or on a Subsequent Market; (4) the Company has failed to timely satisfy its conversion obligations hereunder; or (5) the issuance of such shares of Common Stock would result in a violation of Sections 4(a)(ii), then, the Company may not pay interest in kind and must pay interest in cash by delivering, within three Trading Days of each applicable Conversion Date, an amount in cash equal to the product of (a) the outstanding principal amount of the Debentures to be converted on such Conversion Date and (b) the product of (x) the quotient obtained by dividing .12 by 360 and (y) the number of days for which such principal amount was outstanding. (C) This Debenture shall be convertible into shares of Common Stock at the option of the Holder, in whole or in part at any time and from time to time, after the Original Issue Date (subject to the limitations on conversion set forth in Section 4(a)(ii) hereof). The Holder shall effect conversions by delivering surrendering the Debentures (or such portions thereof) to the Company a completed notice substantially in be converted, together with the form of conversion notice attached hereto as Exhibit A (a the "Conversion Notice")) to the Company. The Each Conversion Notice shall set forth specify the remaining principal amount of this Debenture Debentures to be converted (which may not be less than $100,000 or such less principal amount of Debentures than held by such Holder) and all accrued and unpaid interest thereon subsequent to the conversion at issue. The date on which a such conversion is to be effected, which date may not be prior to the date such Conversion Notice is deemed to have been delivered is pursuant to Section 4(h) (the "Conversion Date." Unless the Holder "). If no Conversion Date is converting the entire principal amount outstanding under this Debenturespecified in a Conversion Notice, the Holder Conversion Date shall be the date that the Conversion Notice is not be required deemed delivered pursuant to physically surrender this Debenture to the Company in order to effect conversionsSection 4(h). Subject to Sections 4(a)(ii) and 4(b) hereof and Section 4(b)3.7 of the Purchase Agreement, each Conversion Notice, once given, shall be irrevocable. Conversions hereunder shall have If the effect Holder is converting less than all of lowering the outstanding principal amount of this Debenture plus all accrued and unpaid interest thereon in an amount equal to represented by the applicable conversion, which shall be evidenced Debenture(s) tendered by notations made in the Holder with the Conversion Notice. The Holder and , or if a conversion hereunder cannot be effected in full for any reason, the Company shall maintain records showing honor such conversion to the extent permissible hereunder and shall promptly deliver to such Holder (in the manner and within the time set forth in Section 5(b)) a new Debenture for such principal amount converted and the date of such conversions. In the event of any dispute or discrepancy, the records of the Holder shall be controlling and determinative in the absence of manifest erroras has not been converted.

Conversion. (Aa) This Debenture Such Purchaser covenants that, until the NYSE Shareholder Approval (as defined below) is obtained, it shall be convertible into shares of Common Stock at not exercise its right to convert the option of the Holder, in whole or in part at any time and from time to time, after the Original Issue Date (subject Notes issued pursuant hereto to the limitations on conversion set forth in Section 4(a)(ii) hereof). The extent that the aggregate number of shares of Common Stock that would be issuable by the Company upon a such conversion hereunder shall be determined by adding the sum of (i) the quotient obtained by dividing (x) the outstanding principal amount of this Debenture to be converted and (y) the Conversion Price (as defined herein), and (ii) the amount equal to (I) the product of (x) the outstanding principal amount of this Debenture to be converted and (y) the product of (1) the quotient obtained by dividing .12 by 360 and (2) the number of days for which such principal amount was outstanding, divided by (II) the Conversion Price on the Conversion Date, provided, that if the Company shall have timely elected were to pay the interest due on a Conversion Date in cash pursuant elect to the terms hereofsettle such conversion solely by delivering shares of Common Stock, subsection (ii) shall not be used in the calculation of together with the number of shares of Common Stock issuable issued by the Company upon a conversion hereunderof the Notes issued pursuant hereto concurrently with or prior to such conversion, would exceed 16,373,633 shares of Common Stock (such number to be adjusted from time to time for stock dividends, stock splits or stock combinations with respect to the Common Stock). (Bb) Notwithstanding anything Such Purchaser covenants that, until the Authorized Share Availability Date (as defined below) has occurred (including as a result of the receipt of the Authorized Share Approval), it shall not exercise its right to convert the Notes issued pursuant hereto to the contrary contained herein, extent that the aggregate number of shares of Common Stock that would be issuable by the Company upon such conversion if on any Conversion Date: (1) the Company were to elect to settle such conversion solely by delivering shares of Common Stock would exceed the number of shares of Common Stock at the time that are then authorized, unissued unreserved (for other issuances) and unreserved for all purposes, or held as treasury stock, is insufficient to pay interest hereunder in shares of Common Stock; (2) the Underlying Shares issuable for such conversion (including any interest payable in shares) (x) are not registered for resale pursuant to an effective Underlying Shares Registration Statement and (y) may not be sold without volume restrictions pursuant to Rule 144(k) promulgated under the Securities Act (as defined in Section 6); (3) the Common Stock is not listed or quoted for trading on the OTC or on a Subsequent Market; (4) the Company has failed to timely satisfy its conversion obligations hereunder; or (5) the issuance of such shares of Common Stock would result in a violation of Sections 4(a)(ii), then, the Company may not pay interest in kind and must pay interest in cash by delivering, within three Trading Days of each applicable Conversion Date, an amount in cash equal to the product of (a) the outstanding principal amount of the Debentures to be converted on such Conversion Date and (b) the product of (x) the quotient obtained by dividing .12 by 360 and (y) the number of days for which such principal amount was outstandingunissued. (Cc) This Debenture Such Purchaser covenants that it will not transfer the Notes to any person unless such transferee agrees in writing to be bound by the covenants set forth in Sections 3.2(a) and 3.2(b) (any such transferee, a “Successor Purchaser”), whereupon such Successor Person shall be convertible into shares entitled to the benefits of Common Stock at and to enforce the option representations, warranties and covenants of the Holder, in whole or in part at any time and from time to time, after the Original Issue Date (subject to the limitations on conversion Company set forth in Section 4(a)(ii) 2 and Section 4 hereof). The Holder shall effect conversions by delivering to the Company a completed notice substantially in the form attached hereto as Exhibit A (a "Conversion Notice"). The Conversion Notice shall set forth the remaining principal amount of this Debenture and all accrued and unpaid interest thereon subsequent to the conversion at issue. The date on which a Conversion Notice is delivered is the "Conversion Date." Unless the Holder is converting the entire principal amount outstanding under this Debenture, the Holder is not be required to physically surrender this Debenture to the Company in order to effect conversions. Subject to Section 4(b), each Conversion Notice, once given, shall be irrevocable. Conversions hereunder shall have the effect of lowering the outstanding principal amount of this Debenture plus all accrued and unpaid interest thereon in an amount equal to the applicable conversion, which shall be evidenced by notations made in the Conversion Notice. The Holder and the Company shall maintain records showing the principal amount converted and the date of such conversions. In the event of any dispute or discrepancy, the records of the Holder shall be controlling and determinative in the absence of manifest error.

Conversion. (A) This Debenture shall be convertible In lieu of exercising this Warrant pursuant to Section 4, the Holder may elect to convert this Warrant, without the payment by the Holder of any additional consideration, into shares of Common Stock at equal to the option value of this Warrant (or the portion thereof being canceled) by surrender of this Warrant to the Secretary of the HolderCompany at its principal office together with notice of such election, in whole or in part at any time and from time to time, after which event the Original Issue Date (subject Company shall issue to the limitations on conversion set forth in Section 4(a)(iiHolder a number of shares of Common Stock computed using the following formula: X = Y (A - B) hereof). Where: X = The number of shares of Common Stock issuable upon a conversion hereunder shall be determined by adding the sum of (i) the quotient obtained by dividing (x) the outstanding principal amount of this Debenture to be converted and (y) issued to the Conversion Price (as defined herein), and (ii) the amount equal Holder pursuant to (I) the product of (x) the outstanding principal amount of this Debenture to be converted and (y) the product of (1) the quotient obtained by dividing .12 by 360 and (2) the conversion; Y = The number of days for Shares in respect of which such principal amount was outstanding, divided by (II) the Conversion Price on the Conversion Date, provided, that if the Company shall have timely elected election to pay the interest due on a Conversion Date in cash pursuant to the terms hereof, subsection (ii) shall not be used in the calculation convert is made; A = The fair market value of one share of the number of shares of Common Stock issuable upon a conversion hereunder. (B) Notwithstanding anything to the contrary contained herein, if on any Conversion Date: (1) the number of shares of Common Stock at the time authorizedthe election to convert is made; B = The Exercise Price. For purposes of this Section 5, unissued and unreserved for all purposes, or held as treasury stock, is insufficient to pay interest hereunder in shares the fair market value of one share of Common Stock; Stock as of a particular date shall be: (2a) if applicable, the Underlying Shares issuable for such conversion (including average of the closing bid and asked prices of the Company’s common stock quoted in the over-the-counter market summary or the closing price quoted on any interest payable in shares) (x) are not registered for resale pursuant to an effective Underlying Shares Registration Statement and (y) may not be sold without volume restrictions pursuant to Rule 144(k) promulgated under the Securities Act (as defined in Section 6); (3) exchange on which the Common Stock is not listed or quoted for trading on listed, whichever is applicable, as published in the OTC or on a Subsequent Market; (4) the Company has failed to timely satisfy its conversion obligations hereunder; or (5) the issuance of such shares of Common Stock would result in a violation of Sections 4(a)(ii), then, the Company may not pay interest in kind and must pay interest in cash by delivering, within three Trading Days of each applicable Conversion Date, an amount in cash equal to the product of (a) the outstanding principal amount United States Edition of the Debentures Wall Street Journal for the ten (10) trading days immediately prior to be converted on such Conversion Date and but not including the date of determination of fair market value, (b) if the product conversion pursuant to this Section 5 is immediately prior to the closing of an acquisition of the Company (xas described Section 3(c) above), then the quotient obtained by dividing .12 by 360 and (y) price per share of the number of days for which such principal amount was outstanding. (C) This Debenture shall be convertible into shares of Common Stock at in such transaction, or (c) if 5(a) and 5(b) hereof are not applicable or if the option of price in the Holder, in whole or in part at any time and from time to time, after the Original Issue Date (subject to the limitations on conversion transaction set forth in Section 4(a)(ii5(b) hereof). The is not in cash, then as determined in good faith by the Company’s board of directors; provided that if Holder objects to such determination, then the value shall effect conversions be determined by delivering an appraiser chosen by the Board of Directors who is reasonably acceptable to Holder, and the cost of such appraisal shall be borne equally by the Company a completed notice substantially in the form attached hereto as Exhibit A (a "Conversion Notice"). The Conversion Notice shall set forth the remaining principal amount of this Debenture and all accrued and unpaid interest thereon subsequent to the conversion at issue. The date on which a Conversion Notice is delivered is the "Conversion Date." Unless the Holder is converting the entire principal amount outstanding under this Debenture, the Holder is not be required to physically surrender this Debenture to the Company in order to effect conversions. Subject to Section 4(b), each Conversion Notice, once given, shall be irrevocable. Conversions hereunder shall have the effect of lowering the outstanding principal amount of this Debenture plus all accrued and unpaid interest thereon in an amount equal to the applicable conversion, which shall be evidenced by notations made in the Conversion Notice. The Holder and the Company shall maintain records showing the principal amount converted and the date of such conversions. In the event of any dispute or discrepancy, the records of the Holder shall be controlling and determinative in the absence of manifest errorHolder.