Common use of Mechanics of Conversion Clause in Contracts

Mechanics of Conversion. At any time from the date hereof, Lender may at its option elect to convert all (but not less than all) of the outstanding Principal Amount and unpaid accrued interest thereon as of such date into shares of the Borrower's Common Stock, $0.001 par value per share in accordance with this Section 6. The Lender shall give at least 15 days prior notice to Borrower of the date on which such conversion is to be effectuated (such date, the "Conversion Date"). The number of shares of Common Stock to which Lender shall be entitled upon such conversion shall be determined by dividing (x) the outstanding Principal Amount and unpaid accrued interest thereon as of the Conversion Date by $0.035 (the "Conversion Price") On the Conversion Date, the outstanding Principal Amount and unpaid accrued interest xxxxxxn shall be converted automatically into the Common Stock without further action by the Lender and whether or not this Note has been surrendered to Borrower or its transfer agent, and Lender shall be deemed to be the shareholder of record as of the Conversion Date with respect to the Common Stock. Within fourteen (14) days subsequent to the Conversion Date Lender shall surrender this Note to Borrower or its transfer agent, duly marked cancelled and, in exchange therefor, Lender shall receive from Borrower share certificates evidencing the Common Stock in the name or names in which Lender wishes such certificate or certificates to be issued. If within fourteen (14) days of the Conversion Date, Lender is unable to deliver this Note, Lender shall notify Borrower or its transfer agent that such Note has been lost, stolen or destroyed and shall deliver to Borrower an acknowledgement that the obligations evidenced by this Note, shall have been upon the Conversion Date be deemed fully satisfied, and, if requested by Borrower, Lender shall execute an agreement reasonably satisfactory to Borrower to indemnify Borrower from any loss incurred by it in connection with inability of Lender to deliver such Note.

Mechanics of Conversion. At In order to convert this Debenture (in whole or in part) into full shares of Common Stock, the Holder (i) shall give written notice in the form of Exhibit 2 hereto (the "CONVERSION NOTICE") by facsimile to the Company that the Holder elects to convert the principal amount (plus accrued but unpaid interest and Monthly Delay Payments) specified therein, which such notice and election shall be revocable by the Holder at any time from the date hereof, Lender may at prior to its option elect to convert all (but not less than all) receipt of the outstanding Common Stock upon conversion, and (ii) if the entire Outstanding Principal Amount and unpaid accrued interest thereon is being converted, as soon as practicable after such notice, shall surrender this Debenture, duly endorsed, by either overnight courier or 2-day courier, to the principal office of such date into the Company; provided, however, that the Company shall not be obligated to issue certificates evidencing the shares of the Borrower's Common Stock, $0.001 par value per share in accordance with this Section 6. The Lender shall give at least 15 days prior notice to Borrower of the date on which such conversion is to be effectuated (such date, the "Conversion Date"). The number of shares of Common Stock to which Lender shall be entitled issuable upon such conversion shall be determined by dividing (x) where the outstanding entire Outstanding Principal Amount and unpaid accrued interest thereon as of is being converted) unless either the Conversion Date by $0.035 (Debenture evidencing the "Conversion Price") On the Conversion Date, the outstanding Principal Amount and unpaid accrued interest xxxxxxn shall be converted automatically into the Common Stock without further action by the Lender and whether or not this Note has been surrendered to Borrower or its transfer agent, and Lender shall be deemed to be the shareholder of record as of the Conversion Date with respect principal amount is delivered to the Common Stock. Within fourteen (14) days subsequent to Company as provided above, or the Conversion Date Lender shall surrender this Note to Borrower or its transfer agent, duly marked cancelled and, in exchange therefor, Lender shall receive from Borrower share certificates evidencing Holder notifies the Common Stock in the name or names in which Lender wishes such certificate or certificates to be issued. If within fourteen (14) days of the Conversion Date, Lender is unable to deliver this Note, Lender shall notify Borrower or its transfer agent Company that such Note has Debenture(s) have been lost, stolen or destroyed and shall deliver to Borrower an acknowledgement that the obligations evidenced by this Note, shall have been upon the Conversion Date be deemed fully satisfied, and, if requested by Borrower, Lender shall execute promptly executes an agreement reasonably satisfactory to Borrower the Company to indemnify Borrower the Company from any loss incurred by it in connection with inability of Lender such lost, stolen or destroyed Debentures. The Holder shall not be required to deliver such Note.physically surrender this Debenture to the Company unless the full Outstanding Principal Amount represented by this Debenture is being converted. The Holder and the Company shall maintain records showing the Outstanding Principal Amount

Mechanics of Conversion. At any time from the date hereof, Lender may at its option elect In order to convert all this Debenture (but not less than allin whole or in part) of the outstanding Principal Amount and unpaid accrued interest thereon as of such date into full shares of the Borrower's Common Stock, $0.001 par value per share in accordance with this Section 6. The Lender the Holder (i) shall give at least 15 days prior written notice to Borrower in the form of the date on which such conversion is to be effectuated (such date, the "Conversion Date"). The number of shares of Common Stock to which Lender shall be entitled upon such conversion shall be determined by dividing (x) the outstanding Principal Amount and unpaid accrued interest thereon as of the Conversion Date by $0.035 EXHIBIT 1 hereto (the "Conversion PriceNotice") On by facsimile to the Conversion DateCompany at such office that the Holder elects to convert the principal amount (plus accrued but unpaid interest and default payments) specified therein, the outstanding Principal Amount which such notice and unpaid accrued interest xxxxxxn election shall be converted automatically into revocable by the Holder at any time prior to its receipt of the Common Stock without further action by the Lender and whether or not this Note has been surrendered to Borrower or its transfer agentupon conversion, and Lender shall be deemed to be the shareholder of record (ii) as of the Conversion Date with respect to the Common Stock. Within fourteen (14) days subsequent to the Conversion Date Lender soon as practicable after such notice, shall surrender this Note to Borrower or its transfer agentDebenture, duly marked cancelled andendorsed, in exchange thereforby either overnight courier or 2-day courier, Lender to the principal office of the Company; PROVIDED, HOWEVER, that the Company shall receive from Borrower share not be obligated to issue certificates evidencing the shares of the Common Stock in issuable upon such conversion unless either the name Debenture evidencing the principal amount is delivered to the Company as provided above, or names in which Lender wishes such certificate or certificates to be issued. If within fourteen (14) days of the Conversion Date, Lender is unable to deliver this Note, Lender shall notify Borrower or its transfer agent Holder notifies the Company that such Note has Debenture(s) have been lost, stolen or destroyed and shall deliver to Borrower an acknowledgement that the obligations evidenced by this Note, shall have been upon the Conversion Date be deemed fully satisfied, and, if requested by Borrower, Lender shall execute promptly executes an agreement reasonably satisfactory to Borrower the Company to indemnify Borrower the Company from any loss incurred by it in connection with inability such lost, stolen or destroyed Debentures. If a Holder is converting less than the maximum number of Lender shares it may convert under its Debenture, the Company shall reissue the Debenture with the appropriate remaining principal amount as soon as practicable after the Company shall have received the Holder's surrendered Debenture. The Company shall issue and deliver within three business day of the delivery to deliver the Company of such NoteConversion Notice, to such Holder of Debenture(s) at the address of the Holder, or to its designee, a certificate or certificates for the number of shares of Common Stock to which the Holder shall be entitled as aforesaid, together with a calculation of the Conversion Rate and a Debenture or Debentures for the principal amount of Debentures not submitted for conversion. The date on which the Conversion Notice is given (the "Holder Conversion Date") shall be deemed to be the date the Company received by facsimile the Conversion Notice, and the person or persons entitled to receive the shares of Common Stock issuable upon such conversion shall be treated for all purposes as the record holder or holders of such shares of Common Stock on such date. In lieu of delivering physical certificates representing the Common Shares issuable upon conversion of Debentures or the Warrant Shares (as defined in the Purchase Agreement) deliverable upon exercise of Warrants (as defined in the Purchase Agreement), provided the Company's transfer agent is participating in the Depository Trust Company ("DTC") Fast Automated Securities Transfer ("FAST") program, upon request of the holder, the Company shall use its best efforts to cause its transfer agent to electronically transmit the Common Shares and Warrant Shares issuable upon conversion or exercise to the Holder, by crediting the account of Holder's prime broker with DTC through its Deposit Withdrawal Agent Commission ("DWAC") system. The time periods for delivery described above shall apply to the electronic transmittals through the DWAC system. The parties agree to coordinate with DTC to accomplish this objective. The conversions pursuant to Sections 5 shall be deemed to have been made immediately prior to the close of business on the Holder Conversion Date. The person or persons entitled to receive the Common Shares issuable upon such conversion shall be treated for all purposes as the record holder or holders of such Common Shares at the close of business on the Holder Conversion Date.

Mechanics of Conversion. At any time from the date hereof, Lender may at its option elect In order to convert all this Debenture (but not less than allin whole or in part) of the outstanding Principal Amount and unpaid accrued interest thereon as of such date into full shares of the Borrower's Common Stock, $0.001 par value per share in accordance with the Holder shall surrender this Section 6. The Lender Debenture, duly endorsed, by either overnight courier or 2-day courier, to the principal office of the Company, and shall give at least 15 days prior written notice to Borrower in the form of the date on which such conversion is to be effectuated (such date, the "Conversion Date"). The number of shares of Common Stock to which Lender shall be entitled upon such conversion shall be determined by dividing (x) the outstanding Principal Amount and unpaid accrued interest thereon as of the Conversion Date by $0.035 Exhibit 1 hereto (the "Conversion PriceNotice") On by facsimile (with the Conversion Date, original of such notice forwarded with the outstanding foregoing courier) to the Company at such office that the Holder elects to convert the Outstanding Principal Amount (plus accrued but unpaid interest) specified therein, which such notice and unpaid accrued interest xxxxxxn election shall be converted automatically into irrevocable by the Holder, subject to the conditional conversion rights afforded the Holder in paragraph 5A above and subject to the second paragraph of this paragraph 6(c), PROVIDED, HOWEVER, that the Company shall not be obligated to issue certificates evidencing the shares of the Common Stock without further action by issuable upon such conversion unless either the Lender and whether or not this Note has been surrendered to Borrower or its transfer agent, and Lender shall be deemed to be Debenture evidencing the shareholder of record as of the Conversion Date with respect Outstanding Principal Amount is delivered to the Common Stock. Within fourteen (14) days subsequent to Company as provided above, or the Conversion Date Lender shall surrender this Note to Borrower or its transfer agent, duly marked cancelled and, in exchange therefor, Lender shall receive from Borrower share certificates evidencing Holder notifies the Common Stock in the name or names in which Lender wishes such certificate or certificates to be issued. If within fourteen (14) days of the Conversion Date, Lender is unable to deliver this Note, Lender shall notify Borrower or its transfer agent Company that such Note has Debenture(s) have been lost, stolen or destroyed and shall deliver to Borrower an acknowledgement that the obligations evidenced by this Note, shall have been upon the Conversion Date be deemed fully satisfied, and, if requested by Borrower, Lender shall execute promptly executes an agreement reasonably satisfactory to Borrower the Company to indemnify Borrower the Company from any loss incurred by it in connection with inability such Debentures. The Company shall use its best efforts to issue and deliver within three (3) business days after delivery to the Company of Lender such Debenture(s), or after receipt of such agreement and indemnification, to deliver the Holder of such NoteDebenture(s) at the address of the Holder, or to its designee, a certificate or certificates for the number of shares of Common Stock to which the Holder shall be entitled as aforesaid, together with a calculation of the Conversion Rate and a Debenture or Debentures for the principal amount of Debentures not submitted for conversion. In addition to any other remedies which may be available to the Holder, in the event the Company fails to effect a delivery of such shares of Common Stock within five (5) business days after delivery to the Company of such Debentures for conversion, the Holder will be entitled to revoke the relevant Notice of Conversion by delivering a notice to such effect to the Company whereupon the Company and the Holder shall each be restored to their respective positions immediately prior to delivery of such Notice of Conversion. Unless otherwise specified in this Debenture, the effective date of conversion (the "Holder Conversion Date") shall be deemed to be the date on which the Company receives by facsimile the Conversion Notice, and the person or persons entitled to receive the shares of Common Stock issuable upon such conversion shall be treated for all purposes as the record holder or holders of such shares of Common Stock on such date.

Mechanics of Conversion. At any time from The conversion of this Note shall be conducted in the date hereof, Lender may at its option elect to following manner: Holder’s Conversion Requirements. To convert all (but not less than all) of the outstanding Principal Amount and unpaid accrued interest thereon as of such date this Note into shares of Common Stock on any date set forth in the Borrower's Common StockConversion Notice by the Holder (the “Conversion Date”), $0.001 par value per share the Holder hereof shall transmit by email, facsimile or otherwise deliver, for receipt on or prior to 11:59 p.m., Eastern Time, on such date or on the next business day, a copy of a fully executed notice of conversion in the form attached hereto as Exhibit 1 to the Company. Company’s Response. Upon receipt by the Company of a copy of a Conversion Notice, the Company shall as soon as practicable, but in no event later than one (1) Business Day after receipt of such Conversion Notice, send, via email, facsimile or overnight courier, a confirmation of receipt of such Conversion Notice to such Holder indicating that the Company will process such Conversion Notice in accordance with this Section 6the terms herein. The Lender Within two (2) Business Days after the date the Conversion Notice is delivered, the Company shall give at least 15 days prior notice have issued and electronically transferred the shares to Borrower the Broker indicated in the Conversion Notice; should the Company be unable to transfer the shares electronically, it shall, within two (2) Business Days after the date the Conversion was delivered, have surrendered to FedEx for delivery the next day to the address as specified in the Conversion Notice, a certificate, registered in the name of the date on which such conversion is to be effectuated (such dateHolder, for the "Conversion Date"). The number of shares of Common Stock to which Lender the Holder shall be entitled. Record Holder. The person or persons entitled to receive the shares of Common Stock issuable upon such a conversion of this Note shall be determined by dividing (x) treated for all purposes as the outstanding Principal Amount and unpaid accrued interest thereon as record holder or holders of the Conversion Date by $0.035 (the "Conversion Price") On such shares of Common Stock on the Conversion Date, the outstanding Principal Amount and unpaid accrued interest xxxxxxn shall be converted automatically into the Common Stock without further action by the Lender and whether or not this Note has been surrendered to Borrower or its transfer agent, and Lender shall be deemed to be the shareholder of record as of the Conversion Date with respect to the Common Stock. Within fourteen (14) days subsequent to the Conversion Date Lender shall surrender this Note to Borrower or its transfer agent, duly marked cancelled and, in exchange therefor, Lender shall receive from Borrower share certificates evidencing the Common Stock in the name or names in which Lender wishes such certificate or certificates to be issued. If within fourteen (14) days of the Conversion Date, Lender is unable to deliver this Note, Lender shall notify Borrower or its transfer agent that such Note has been lost, stolen or destroyed and shall deliver to Borrower an acknowledgement that the obligations evidenced by this Note, shall have been upon the Conversion Date be deemed fully satisfied, and, if requested by Borrower, Lender shall execute an agreement reasonably satisfactory to Borrower to indemnify Borrower from any loss incurred by it in connection with inability of Lender to deliver such Note.

Mechanics of Conversion. At any time from the date hereof, Lender may at its option elect In order to convert all (but not less than all) of the outstanding Principal Amount and unpaid accrued interest thereon as of such date this Debenture into shares of the Borrower's Common Stock, $0.001 par value per share in accordance with this Section 6. The Lender shall give at least 15 days prior notice to Borrower of the date on which such conversion is to be effectuated (such date, the "Conversion Date"). The number of shares of Common Stock pursuant to an Optional Conversion, the Holder shall: (x) deliver (by facsimile or otherwise) a copy of the fully executed Notice of Optional Conversion to the Corporation and (y) surrender or cause to be surrendered this Debenture along with a copy of the Notice of Optional Conversion as soon as practicable thereafter to the Corporation. At the request of the Holder and upon receipt by the Corporation of a facsimile copy of a Notice of Optional Conversion from the Holder, the Corporation shall immediately send, via facsimile, a confirmation to such holder stating that the Notice of Optional Conversion has been received, the date upon which Lender shall be entitled the Corporation expects to deliver the Common Stock issuable upon such conversion and the name and telephone number of a contact person at the Corporation regarding the conversion. In order to convert this Debenture into shares of Common Stock pursuant to a Mandatory Conversion, the Corporation shall be determined deliver (by dividing (xfacsimile or otherwise) the outstanding Principal Amount and unpaid accrued interest thereon as a copy of the fully executed Notice of Mandatory Conversion Date by $0.035 (to the "Conversion Price") On Holder, which notice shall specify the Conversion DateOutstanding Amount to be converted. Promptly following receipt of a Notice of Mandatory Conversion, the outstanding Principal Amount and unpaid accrued interest xxxxxxn Holder shall surrender or cause to be converted automatically into surrendered this Debenture as soon as practicable to the Corporation. The Corporation shall not be obligated to issue shares of Common Stock without further action by the Lender and whether issuable upon any Optional Conversion or not Mandatory Conversion unless either this Note has been surrendered to Borrower or its transfer agent, and Lender shall be deemed to be the shareholder of record as of the Conversion Date with respect Debenture is delivered to the Common Stock. Within fourteen (14) days subsequent to Corporation as provided above, or the Conversion Date Lender shall surrender this Note to Borrower or its transfer agent, duly marked cancelled and, in exchange therefor, Lender shall receive from Borrower share certificates evidencing holder notifies the Common Stock in the name or names in which Lender wishes such certificate or certificates to be issued. If within fourteen (14) days of the Conversion Date, Lender is unable to deliver this Note, Lender shall notify Borrower or its transfer agent Corporation that such Note has certificates have been lost, stolen or destroyed and shall deliver (subject to Borrower an acknowledgement that the obligations evidenced by this Note, shall have been upon the Conversion Date be deemed fully satisfied, and, if requested by Borrower, Lender shall execute an agreement reasonably satisfactory to Borrower to indemnify Borrower from any loss incurred by it in connection with inability requirements of Lender to deliver such NoteArticle IX.A).

Mechanics of Conversion. At any time from In order to convert this Debenture (in whole or in part) into full shares of Common Stock, the Holder (i) shall give written notice in the form of Exhibit 2 hereto (the "CONVERSION NOTICE") by facsimile to the Company at such office that the Holder elects to convert the principal amount (plus accrued but unpaid interest and Delay Payments (as defined in the Registration Rights Agreement) specified therein, which such notice and election shall be irrevocable by the Holder unless the Common Stock shall not have been delivered within five Trading Days of the date hereofthe Conversion Notice is delivered to the Company, Lender may at its option elect and (ii) if the entire Outstanding Principal Amount is being converted, as soon as practicable after such notice, shall surrender this Debenture, duly endorsed, by either overnight courier or 2-day courier, to convert all (but not less than all) the principal office of the outstanding Principal Amount and unpaid accrued interest thereon as of such date into Company; provided, however, that the Company shall not be obligated to issue certificates evidencing the shares of the Borrower's Common Stock, $0.001 par value per share in accordance with this Section 6. The Lender shall give at least 15 days prior notice to Borrower of the date on which such conversion is to be effectuated (such date, the "Conversion Date"). The number of shares of Common Stock to which Lender shall be entitled issuable upon such conversion shall be determined by dividing (x) where the outstanding entire Outstanding Principal Amount and unpaid accrued interest thereon as of is being converted) unless either the Conversion Date by $0.035 (Debenture evidencing the "Conversion Price") On the Conversion Date, the outstanding Principal Amount and unpaid accrued interest xxxxxxn shall be converted automatically into the Common Stock without further action by the Lender and whether or not this Note has been surrendered to Borrower or its transfer agent, and Lender shall be deemed to be the shareholder of record as of the Conversion Date with respect principal amount is delivered to the Common Stock. Within fourteen (14) days subsequent to Company as provided above, or the Conversion Date Lender shall surrender this Note to Borrower or its transfer agent, duly marked cancelled and, in exchange therefor, Lender shall receive from Borrower share certificates evidencing Holder notifies the Common Stock in the name or names in which Lender wishes such certificate or certificates to be issued. If within fourteen (14) days of the Conversion Date, Lender is unable to deliver this Note, Lender shall notify Borrower or its transfer agent Company that such Note has Debenture(s) have been lost, stolen or destroyed and shall deliver to Borrower an acknowledgement that the obligations evidenced by this Note, shall have been upon the Conversion Date be deemed fully satisfied, and, if requested by Borrower, Lender shall execute promptly executes an agreement reasonably satisfactory to Borrower the Company to indemnify Borrower the Company from any loss incurred by it in connection with inability such lost, stolen or destroyed Debentures. The Holder shall not be required to physically surrender this Debenture to the Company unless the full Outstanding Principal Amount represented by this Debenture is being converted. The Holder and the Company shall maintain records showing the Outstanding Principal Amount so converted and the dates of Lender such conversions or shall use such other method, reasonably satisfactory to the Holder and the Company, so as not to require physical surrender of this Debenture upon each such conversion. In the event of any dispute or discrepancy, such records of the Company shall be controlling and determinative in the absence of manifest error. Notwithstanding the foregoing, if this Debenture is converted as aforesaid, the Holder may not transfer this Debenture unless the Holder first physically surrenders this Debenture to the Company, whereupon the Company will forthwith issue and deliver such Note.upon the order of the Holder a new Debenture of like tenor, registered as the Holder may request, representing in the aggregate the remaining Outstanding Principal Amouxx xxxresented by this Debenture. The Holder and any assignee, by acceptance of this Debenture or a new Debenture,

Mechanics of Conversion. At any time from As a condition to affecting the date hereofconversion set forth in Section 1.1(b) above, Lender may at its option elect the Holder shall properly complete and deliver to convert all the Company a Notice of Conversion, a form of which is annexed hereto as Exhibit B (but not less than all) “Conversion Notice” or Notice of the outstanding Principal Amount and unpaid accrued interest thereon as of such date into shares of the Borrower's Common Stock, $0.001 par value per share in accordance with this Section 6Conversion”). The Lender Notice of Conversion shall give at least 15 days prior notice set forth the Outstanding Balance together with all unpaid interest accrued thereon of this Note to Borrower of be converted and the date on which such conversion is to shall be effectuated affected (such date, the "“Conversion Date"”). The If no Conversion Date is specified in a Notice of Conversion, the Conversion Date shall be the date that such Notice of Conversion is deemed delivered hereunder. Upon timely delivery to the Borrower of the Notice of Conversion, certificates evidencing that number of shares of Common Stock to which Lender for the portion of the Note converted in accordance herewith shall be entitled upon transmitted by the Company’s transfer agent to the Holder by crediting the account of the Holder’s broker with The Depository Trust Company through its Deposit / Withdrawal at Custodian system if the Company is then a participant in such conversion shall be determined by dividing system and either (xA) there is an effective registration statement permitting the outstanding Principal Amount and unpaid accrued interest thereon as issuance of the Conversion Date by $0.035 (the "Conversion Price") On the Conversion DateShares to, the outstanding Principal Amount and unpaid accrued interest xxxxxxn shall be converted automatically into the Common Stock without further action by the Lender and whether or not this Note has been surrendered to Borrower or its transfer agent, and Lender shall be deemed to be the shareholder of record as resale of the Conversion Date with respect Shares by, the Holder or (B) the shares are eligible for resale by the Holder without volume or manner-of-sale limitations pursuant to Rule 144, Rule 144A, Regulation S and otherwise by physical delivery to the Common Stock. Within fourteen (14) days subsequent to address specified by the Holder in the Notice of Conversion by the date that is two Trading Days after the Conversion Date Lender shall surrender this Note (such third day being the “Share Delivery Date”). The Borrower will not issue fraction shares or scrip representing fractions of shares upon conversion, but the Borrower will round the number of the shares up to Borrower the nearest whole share. Moreover, and notwithstanding anything to the contrary herein or its transfer agent, duly marked cancelled andin any other Transaction Document, in exchange therefor, Lender shall receive from Borrower share certificates evidencing the Common Stock in the name or names in which Lender wishes such certificate or certificates to be issued. If within fourteen (14) days of the Conversion Date, Lender is unable to deliver this Note, Lender shall notify event Borrower or its transfer agent refuses to deliver any Conversion Shares or shares without a restrictive securities legend to Lender on grounds that such Note has been lostissuance is in violation of Rule 144 under the Securities Act of 1933, stolen or destroyed and as amended (“Rule 144”), Borrower shall deliver or cause its transfer agent to Borrower an acknowledgement that deliver the obligations evidenced by applicable Conversion Shares to Lender with a restricted securities legend, but otherwise in accordance with the provisions of this Note. In conjunction therewith, shall have been upon Xxxxxxxx will also deliver to Lender a written explanation from its counsel or its transfer agent’s counsel opining as to why the issuance of the applicable Conversion Date be deemed fully satisfied, and, if requested by Borrower, Lender shall execute an agreement reasonably satisfactory to Borrower to indemnify Borrower from any loss incurred by it in connection with inability of Lender to deliver such NoteShares violates Rule 144.

Mechanics of Conversion. At (i) In order to exercise its rights pursuant to this subsection 4.1, the Holder shall deliver written notice to the Company in the form of EXHIBIT 2 to this Note stating that such Holder (A) owns this Note free and clear of any time from the date hereof, Lender may at its option elect Liens and (B) elects to convert all (but not less than all) or part of the outstanding Principal Face Amount of this Note, plus any accrued but unpaid Interest in respect of such amount. Such notice shall state the outstanding Face Amount of this Note, plus any accrued but unpaid Interest in respect of such amount, which the Holder seeks to convert. The date contained in the notice shall be the conversion date, unless such date is delayed while conversion is restricted pursuant to subsection 4.1(a)(ii) or subsection 4.1(a)(iii) (such later date, the "CONVERSION DATE") and unpaid accrued interest thereon the Holder shall be deemed to own the underlying Applicable Shares free and clear of all Liens as of such date into shares and shall be treated for all purposes as the record holder of such Applicable Shares at the Borrower's Common Stock, $0.001 par value per share in accordance with this Section 6. The Lender shall give at least 15 days prior notice to Borrower close of business on the date on which such conversion is to be effectuated (such date, the "Conversion Date"). The number of shares of Common Stock to which Lender shall be entitled upon such conversion shall be determined by dividing As soon as practicable (xbut no later than three business days) the outstanding Principal Amount and unpaid accrued interest thereon as of the Conversion Date by $0.035 (the "Conversion Price") On after the Conversion Date, the outstanding Principal Amount Company shall issue and unpaid accrued interest xxxxxxn shall be converted automatically into the Common Stock without further action by the Lender and whether or not this Note has been surrendered to Borrower or its transfer agent, and Lender shall be deemed to be the shareholder of record as of the Conversion Date with respect deliver to the Common Stock. Within fourteen (14) days subsequent Holder a certificate or certificates for the number of Applicable Shares to which the Conversion Date Lender Holder is entitled and the Holder shall surrender this Note to Borrower or its transfer agent, duly marked cancelled the Company in exchange for delivery of such certificates by the Company and, in exchange thereforthe case of a partial redemption, Lender a new Note with a Face Amount equal to the unconverted portion of the Note shall receive from Borrower share certificates evidencing be delivered to the Common Stock in Holder with the name or names in which Lender wishes such certificates. A notice of conversion by a Holder under this subsection 4.1(c)(i) shall be irrevocable until the later of (x) 30 days after its delivery and (y) the Conversion Date set forth therein and thereafter shall be revocable at any time upon delivery by the Holder of a written notice of revocation to the Company if a certificate or certificates for the number of Applicable Shares to be issued. If within fourteen (14) days of which the Conversion Date, Lender Holder is unable entitled with respect to deliver this Note, Lender shall notify Borrower or its transfer agent that the conversion specified in such Note notice has not been lost, stolen or destroyed issued and shall deliver delivered to Borrower an acknowledgement that the obligations evidenced by this Note, shall have been upon the Conversion Date be deemed fully satisfied, and, if requested by Borrower, Lender shall execute an agreement reasonably satisfactory to Borrower to indemnify Borrower from any loss incurred by it in connection with inability of Lender to deliver such NoteHolder.

Mechanics of Conversion. At any time from the date hereof, Lender may at its option elect to convert all (but not less than all) of the outstanding Principal Amount and unpaid accrued interest thereon as of such date into shares of the Borrower's Common Stock, $0.001 par value per share in accordance with this Section 6. The Lender shall give at least 15 days prior notice to Borrower of the date on which such conversion is to be effectuated (such date, the "Conversion Date"). The number of No fractional shares of Common Stock shall be issued upon any conversion of the principal indebtedness evidenced by the provisions of this Debenture. In lieu of any fractional shares to which Lender Holder would otherwise be entitled, Borrower shall pay Holder cash in the amount equal to the Conversion Price for such fractional shares. Before Holder shall be entitled to convert the indebtedness evidenced by the provisions of the Debenture into shares of Common Stock and to receive certificates thereof, Holder shall surrender the original copy of this Debenture, duly endorsed and cancelled, at the office of Borrower, and shall given written notice to Borrower at such office that Holder elects to convert the principal indebtedness evidenced by the provisions of this Debenture; provided, however, that Borrower shall not be obligated to issue certificates evidencing the shares of common stock issuable upon such conversion shall be determined by dividing (x) unless the outstanding Principal Amount original endorsed and unpaid accrued interest thereon cancelled original copy of this Debenture is either delivered to Borrower, as of the Conversion Date by $0.035 (the "Conversion Price") On the Conversion Datespecified above, the outstanding Principal Amount and unpaid accrued interest xxxxxxn shall be converted automatically into the Common Stock without further action by the Lender and whether or not this Note has been surrendered to Holder notifies Borrower or its transfer agent, and Lender shall be deemed to be the shareholder of record as of the Conversion Date with respect to the Common Stock. Within fourteen (14) days subsequent to the Conversion Date Lender shall surrender this Note to Borrower or its transfer agent, duly marked cancelled and, in exchange therefor, Lender shall receive from Borrower share certificates evidencing the Common Stock in the name or names in which Lender wishes such certificate or certificates to be issued. If within fourteen (14) days of the Conversion Date, Lender is unable to deliver this Note, Lender shall notify Borrower or its transfer agent that such Note original copy of this Debenture has been lost, stolen or destroyed and shall deliver to Borrower an acknowledgement that the obligations evidenced by this Note, shall have been upon the Conversion Date be deemed fully satisfied, and, if requested by Borrower, Lender shall execute executes an agreement reasonably satisfactory to Borrower to indemnify Borrower from any loss incurred by it Borrower in connection with inability such original copy of Lender this Debenture. Borrower shall, as soon as practical after such delivery of an original copy of this Debenture, or such agreement and indemnification, issue and deliver or cause to deliver be issued and delivered to Holder, a certificate or certificates for the number of shares of Common Stock to which Holder shall be entitled and a check payable to Holder in the amount of any cash amounts payable as a result of the conversion into fractional shares of Common Stock. The person or persons entitled to receive the shares of Common Stock issuable upon any such Noteconversion shall be treated for all purposes as the record holder or holders of such shares of Common Stock on such date.

Mechanics of Conversion. At No fractional shares of Common Stock shall be issued upon any time from conversion of the date hereofprincipal indebtedness evidenced by the provisions of this Debenture. In lieu of any fractional shares to which Holder would otherwise be entitled, Lender may at its option elect Borrower shall pay Holder cash in the amount equal to the Conversion Price for such fractional shares. Before Holder shall be entitled to convert all (but not less than all) the indebtedness evidenced by the provisions of the outstanding Principal Amount and unpaid accrued interest thereon as of such date this Debenture into shares of Common Stock and to receive certificates therefor, Holder shall surrender the original copy of this Debenture, duly endorsed and cancelled, at the office of Borrower's Common Stock, $0.001 par value per share in accordance with this Section 6. The Lender and shall give at least 15 seventy-six (76) days prior written notice to Borrower at such office that Holder elects to so convert the principal indebtedness evidenced by the provisions of this Debenture, which date shall be the conversion date on which (“Conversion Date”); and provided, further, however, that Borrower shall not be obligated to issue certificates evidencing the shares of Common Stock issuable unless the original endorsed and cancelled original copy of this Debenture is either delivered to Borrower, as specified above, or Holder notifies Borrower that such conversion is original copy of this Debenture has been lost, stolen or destroyed and executes an agreement to indemnify Borrower from any loss incurred by Borrower in connection with such original copy of this Debenture. Borrower shall, as soon as practicable after such delivery of an original copy of this Debenture, or such agreement and indemnification, issue and deliver or cause to be effectuated (issued and delivered at such dateoffice to Holder, a certificate or certificates for the "Conversion Date"). The number of shares of Common Stock to which Lender Holder shall be entitled and a check payable to Holder in the amount of any cash amounts payable as a result of the conversion into fractional shares of Common Stock. The person or persons entitled to receive the shares of Common Stock issuable upon any such conversion shall be determined by dividing (x) treated for all purposes as the outstanding Principal Amount and unpaid accrued interest thereon as record holder or holders of the Conversion Date by $0.035 (the "Conversion Price") On the Conversion Date, the outstanding Principal Amount and unpaid accrued interest xxxxxxn shall be converted automatically into the such shares of Common Stock without further action by the Lender and whether or not this Note has been surrendered to Borrower or its transfer agent, and Lender shall be deemed to be the shareholder of record as of the Conversion Date with respect to the Common Stock. Within fourteen (14) days subsequent to the Conversion Date Lender shall surrender this Note to Borrower or its transfer agent, duly marked cancelled and, in exchange therefor, Lender shall receive from Borrower share certificates evidencing the Common Stock in the name or names in which Lender wishes on such certificate or certificates to be issued. If within fourteen (14) days of the Conversion Date, Lender is unable to deliver this Note, Lender shall notify Borrower or its transfer agent that such Note has been lost, stolen or destroyed and shall deliver to Borrower an acknowledgement that the obligations evidenced by this Note, shall have been upon the Conversion Date be deemed fully satisfied, and, if requested by Borrower, Lender shall execute an agreement reasonably satisfactory to Borrower to indemnify Borrower from any loss incurred by it in connection with inability of Lender to deliver such Notedate.

Mechanics of Conversion. At In order to effect the conversion of any time from Security into Conversion Shares, the date hereof, Lender may at Holder of such Security shall surrender to the Trustee or its option elect agent the Security to be converted accompanied by a duly executed notice of conversion form set forth in the certificate representing such Security stating that such Holder elects to convert all (but not less than all) or a specified portion of the outstanding Principal Amount and unpaid accrued interest thereon as principal amount at maturity of such date into shares of the Borrower's Common Stock, $0.001 par value per share Security in accordance with this Section 6. The Lender shall give at least 15 days prior notice to Borrower of the date on which such conversion is to be effectuated (such date, the "Conversion Date"). The number of shares of Common Stock to which Lender shall be entitled upon such conversion shall be determined by dividing (x) the outstanding Principal Amount provisions hereof and unpaid accrued interest thereon as of the Conversion Date by $0.035 (the "Conversion Price") On the Conversion Date, the outstanding Principal Amount and unpaid accrued interest xxxxxxn shall be converted automatically into the Common Stock without further action by the Lender and whether or not this Note has been surrendered to Borrower or its transfer agent, and Lender shall be deemed to be the shareholder of record as of the Conversion Date with respect to the Common Stock. Within fourteen (14) days subsequent to the Conversion Date Lender shall surrender this Note to Borrower or its transfer agent, duly marked cancelled and, in exchange therefor, Lender shall receive from Borrower share certificates evidencing the Common Stock in specifying the name or names in which Lender such Holder wishes such certificate or certificates the Conversion Shares to be issued. If more than one Security shall be surrendered for conversion at one time by the same Holder, the number of full Conversion Shares issuable upon conversion thereof shall be computed on the basis of the aggregate Accreted Value of all of the Securities so surrendered by such Holder at such time. In case such notice shall specify a name or names other than that of such Holder, such notice shall be accompanied by payment of all transfer taxes payable upon the issuance of Conversion Shares in such name or names. Other than such taxes, the Company will pay any and all issue and other taxes (other than taxes based on income) that may be payable in respect of any issue or delivery of Conversion Shares upon conversion of Securities. As promptly as practicable and in any event within fourteen ten Business Days after surrender of the Securities to be converted and the receipt of such notice of conversion relating thereto and, if applicable, payment of all transfer taxes (14or the demonstration to the satisfaction of the Company that any such taxes have been paid), the Trustee or its agent will instruct the Company to deliver promptly to, or upon the written order of, the Holder of the Securities to be converted (i) days certificates representing the number of validly issued, fully paid and nonassessable whole Conversion Shares to which the Holder of the Securities being converted shall be entitled, (ii) any cash owing in lieu of a fractional Conversion Share, determined in accordance with Section 11.04 and (iii) if fewer than all the Securities surrendered are being converted, a new Security or Securities, of like tenor, evidencing a principal amount at maturity equal to the principal amount at maturity of the Securities surrendered for conversion less the principal amount at maturity of the Securities being converted. Such conversion shall be deemed to have been made immediately prior to the close of business on the date of such surrender of the Securities to be converted and the making of any such required payment. Upon such conversion, the rights of the Holder thereof as to the Securities being converted shall cease except for the right to receive Conversion Shares (or such other consideration as provided herein) in accordance herewith, and the Person entitled to receive the Conversion Shares shall be treated for all purposes as having become the record Holder of such Conversion Shares at such time. All Securities delivered for conversion to the Trustee or its agent shall be canceled by or at the direction of the Trustee, which shall thereafter dispose of the same. The Company shall not be required to convert any Securities, and no surrender of Securities shall be effective for that purpose, while stock transfer books of the Company for the Common Stock are closed for any purposes (but not for any period in excess of 15 days), but the surrender of Securities for conversion during any period while such books are so closed shall become effective for conversion immediately upon the reopening of such books, as if the conversion had been made on the date such books were reopened, and with the application of the Conversion DateRatio in effect at the date such books were reopened. The Holders of Securities are not entitled, Lender is unable as such, to deliver this Notereceive dividends or other distributions, Lender shall notify Borrower receive notice of any meeting of the stockholders, consent to any action of the stockholders, receive notice of any other stockholder proceedings, or its transfer agent that such Note has been lost, stolen or destroyed and shall deliver to Borrower an acknowledgement that any other rights as stockholders of the obligations evidenced by this Note, shall have been upon the Conversion Date be deemed fully satisfied, and, if requested by Borrower, Lender shall execute an agreement reasonably satisfactory to Borrower to indemnify Borrower from any loss incurred by it in connection with inability of Lender to deliver such NoteCompany.

Mechanics of Conversion. At (a) Not later than three (3) Trading Days after any time from Conversion Date (the date hereof“Delivery Date”), Lender the Maker or its designated transfer agent, as applicable, shall issue and deliver to the Holder or, at the request of the Holder (provided that a registration statement under the Securities Act providing for the resale of the Common Stock to which the Holder shall be entitled is then in effect or such shares may at its option elect be sold without the requirement to convert all (but not less than allbe in compliance with Rule 144(c)(1) of the outstanding Principal Amount Securities Act and unpaid accrued interest thereon as of such date into shares otherwise without restriction or limitation pursuant to Rule 144 of the Borrower's Common StockSecurities Act), $0.001 par value per share to the Depository Trust Company (“DTC”) account on the Holder’s behalf via the Deposit Withdrawal Agent Commission System (“DWAC”) as specified in accordance with this Section 6. The Lender shall give at least 15 days prior notice to Borrower the Conversion Notice, registered in the name of the date on which such conversion is to be effectuated (such dateHolder or its designee, for the "Conversion Date"). The number of shares of Common Stock to which Lender the Holder shall be entitled upon such conversion shall be determined by dividing (x) entitled. Notwithstanding the outstanding Principal Amount and unpaid accrued interest thereon as of foregoing to the Conversion Date by $0.035 (the "Conversion Price") On the Conversion Datecontrary, the outstanding Principal Amount and unpaid accrued interest xxxxxxn shall be converted automatically into the Common Stock without further action by the Lender and whether or not this Note has been surrendered to Borrower or its transfer agent, and Lender shall be deemed to be the shareholder of record as of the Conversion Date with respect to the Common Stock. Within fourteen (14) days subsequent to the Conversion Date Lender shall surrender this Note to Borrower or its transfer agent, duly marked cancelled and, in exchange therefor, Lender shall receive from Borrower share certificates evidencing the Common Stock in the name or names in which Lender wishes such certificate or certificates to be issued. If within fourteen (14) days of the Conversion Date, Lender is unable to deliver this Note, Lender shall notify Borrower Maker or its transfer agent that shall only be obligated to issue and deliver the shares to DTC on a Holder’s behalf via DWAC if (i) such Note has been lostshares may be issued without restrictive legends and (ii) the Maker and the transfer agent are participating in DTC through the DWAC system. If all of the conditions set forth in clauses (i) and (ii) above are not satisfied, stolen the Maker or destroyed and its designated transfer agent, as the case may be, shall deliver to Borrower an acknowledgement that physical certificates representing the obligations evidenced by number of shares of Common Stock being acquired upon the conversion of this Note. If in the case of any Conversion Notice, any shares of Common Stock to which a Holder is entitled to receive thereunder are not delivered to or as directed by the applicable Holder by the Delivery Date, the Holder shall have been upon be entitled by written notice to the Conversion Date Maker at any time on or before its receipt of such shares of Common Stock thereafter, to rescind such conversion, in which event the Maker shall immediately return this Note tendered for conversion, whereupon the Maker and the Holder shall each be deemed fully satisfiedrestored to their respective positions immediately prior to the delivery of such notice of revocation, and, if requested by Borrower, Lender except that any amounts described in Sections 3.03(b) and (c) shall execute an agreement reasonably satisfactory be payable through the date notice of rescission is given to Borrower to indemnify Borrower from any loss incurred by it in connection with inability of Lender to deliver such Notethe Maker.

Mechanics of Conversion. At any time from the date hereof, Lender may at its option elect In order to convert all this Debenture (but not less than allin whole or in part) of the outstanding Principal Amount and unpaid accrued interest thereon as of such date into full shares of the Borrower's Common Stock, $0.001 par value per share in accordance with this Section 6. The Lender the Holder (i) shall give at least 15 days prior written notice to Borrower in the form of the date on which such conversion is to be effectuated (such date, the "Conversion Date"). The number of shares of Common Stock to which Lender shall be entitled upon such conversion shall be determined by dividing (x) the outstanding Principal Amount and unpaid accrued interest thereon as of the Conversion Date by $0.035 Exhibit 2 hereto (the "Conversion PriceNotice") On by facsimile to the Conversion DateCompany at such office that the Holder elects to convert the principal amount (plus accrued but unpaid interest and delay payments) specified therein, the outstanding Principal Amount which such notice and unpaid accrued interest xxxxxxn election shall be converted automatically into revocable by the Holder at any time prior to its receipt of the Common Stock without further action by the Lender and whether or not this Note has been surrendered to Borrower or its transfer agentupon conversion, and Lender shall be deemed to be (ii) if the shareholder of record entire Outstanding Principal Amount is being converted, as of the Conversion Date with respect to the Common Stock. Within fourteen (14) days subsequent to the Conversion Date Lender soon as practicable after such notice, shall surrender this Note to Borrower or its transfer agentDebenture, duly marked cancelled andendorsed, in exchange thereforby either overnight courier or 2-day courier, Lender to the principal office of the Company; provided, however, that the Company shall receive from Borrower share not be obligated to issue certificates evidencing the shares of the Common Stock in issuable upon such conversion (where the name entire Outstanding Principal Amount is being converted) unless either the Debenture evidencing the principal amount is delivered to the Company as provided above, or names in which Lender wishes such certificate or certificates to be issued. If within fourteen (14) days of the Conversion Date, Lender is unable to deliver this Note, Lender shall notify Borrower or its transfer agent Holder notifies the Company that such Note has Debenture(s) have been lost, stolen or destroyed and shall deliver to Borrower an acknowledgement that the obligations evidenced by this Note, shall have been upon the Conversion Date be deemed fully satisfied, and, if requested by Borrower, Lender shall execute promptly executes an agreement reasonably satisfactory to Borrower the Company to indemnify Borrower the Company from any loss incurred by it in connection with inability such lost, stolen or destroyed Debentures. The Holder shall not be required to physically surrender this Debenture to the Company unless the full Outstanding Principal Amount represented by this Debenture is being converted. The Holder and the Company shall maintain records showing the Outstanding Principal Amount so converted and the dates of Lender such conversions or shall use such other method, reasonably satisfactory to the Holder and the Company, so as not to require physical surrender of this Debenture upon each such conversion. In the event of any dispute or discrepancy, such records of the Company shall be controlling and determinative in the absence of manifest error. Notwithstanding the foregoing, if this Debenture is converted as aforesaid, the Holder may not transfer this Debenture unless the Holder first physically surrenders this Debenture to the Company, whereupon the Company will forthwith issue and deliver upon the order of the Holder a new Debenture of like tenor, registered as the Holder may request, representing in the aggregate the remaining Outstanding Principal Amount represented by this Debenture. The Holder and any assignee, by acceptance of this Debenture or a new Debenture, acknowledge and agree that, by reason of the provisions of this paragraph, following conversion of any portion of this Debenture, the Outstanding Principal Amount represented by this Debenture may be less than the Outstanding Principal Amount and the accrued interest set forth on the face hereof. The Company shall issue and deliver within three Trading Days of the delivery to the Company of such NoteConversion Notice, to such Holder of Debenture(s) at the address of the Holder, or to its designee, a certificate or certificates for the number of shares of Common Stock to which the Holder shall be entitled as aforesaid, together with a calculation of the Conversion Rate and a Debenture or Debentures for the principal amount of Debentures not submitted for conversion. The date on which the Conversion Notice is given (the "Holder Conversion Date") shall be deemed to be the date the Company received by facsimile the Conversion Notice, and the person or persons entitled to receive the shares of Common Stock issuable upon such conversion shall be treated for all purposes as the record holder or holders of such shares of Common Stock on such date. In the event that such Holder or its designee has not received such certificate or certificates within ten (10) calendar days of the Company's receipt of the Conversion Notice, the Holder may, in addition to any other rights or remedies it may have, revoke its Conversion Notice. In lieu of delivering physical certificates representing the Common Shares issuable upon conversion of Debentures or the Warrant Shares (as defined in the Purchase Agreement) deliverable upon exercise of Warrants (as defined in the Purchase Agreement), provided the Company's transfer agent is participating in the Depository Trust Company ("DTC") Fast Automated Securities Transfer ("FAST") program, upon request of the holder, the Company shall use its best efforts to cause its transfer agent to electronically transmit the Common Shares and Warrant Shares issuable upon conversion or exercise to the Holder, by crediting the account of Holder's prime broker with DTC through its Deposit Withdrawal Agent Xxxxxssion ("DWAC") system. The time periods for delivery described above shall apply to the electronic transmittals through the DWAC system. The parties agree to coordinate with DTC to accomplish this objective. The conversions pursuant to Sections 5 shall be deemed to have been made immediately prior to the close of business on the Holder Conversion Date. The person or persons entitled to receive the Common Shares issuable upon such conversion shall be treated for all purposes as the record holder or holders of such Common Shares at the close of business on the Holder Conversion Date.

Mechanics of Conversion. At any time from the date hereof, Lender may at its option elect to convert all (but not less than all) of the outstanding Principal Amount and unpaid accrued interest thereon as of such date into shares of the Borrower's Common Stock, $0.001 par value per share in accordance with this Section 6. The Lender shall give at least 15 days prior notice to Borrower of the date on which such conversion is to be effectuated (such date, the "Conversion Date"). The number of No fractional shares of Common Stock to which Lender shall be entitled issued upon conversion of this Note. In lieu thereof, the Corporation shall round up to the nearest whole share. In the case of a dispute as to the calculation of the Conversion Price, the Corporation's calculation shall be deemed conclusive absent manifest error. In order to convert this Note into full shares of Common Stock, the Holder shall surrender this Note, duly endorsed, to the Escrow Agent, together with the Conversion Notice that it elects to convert the same, the amount of principal to be so converted, and a calculation of the Conversion Price (with an advance copy of the Note and the notice by facsimile); provided, however, that the Corporation shall not be obligated to issue certificates evidencing the shares of Common Stock issuable upon such conversion shall be determined by dividing (x) unless either the outstanding Principal Amount and unpaid accrued interest thereon as of the Conversion Date by $0.035 (the "Conversion Price") On the Conversion Date, the outstanding Principal Amount and unpaid accrued interest xxxxxxn shall be converted automatically into the Common Stock without further action by the Lender and whether or not this Note has been surrendered to Borrower or its transfer agent, and Lender shall be deemed to be the shareholder of record as of the Conversion Date with respect is delivered to the Common Stock. Within fourteen (14) days subsequent to Escrow Agent as provided above, or the Conversion Date Lender shall surrender this Note to Borrower or its transfer agent, duly marked cancelled and, in exchange therefor, Lender shall receive from Borrower share certificates evidencing Holder notifies the Common Stock in the name or names in which Lender wishes such certificate or certificates to be issued. If within fourteen (14) days of the Conversion Date, Lender is unable to deliver this Note, Lender shall notify Borrower or its transfer agent Corporation that such Note has been lost, stolen or destroyed and shall deliver to Borrower an acknowledgement that the obligations evidenced by this Note, shall have been upon the Conversion Date be deemed fully satisfied, and, if requested by Borrower, Lender shall execute executes an agreement reasonably satisfactory to Borrower the Corporation to indemnify Borrower the Corporation from any loss incurred by it in connection with inability of Lender to deliver such Note. Within three (3) business days after receiving a properly submitted Conversion Notice, the Escrow Agent shall instruct Continental Stock Transfer Corporation or any duly appointed transfer agent of the Corporation subsequently designated (the "Transfer Agent") to issue and deliver as promptly as practicable to the Escrow Agent at the address of the Escrow Agent as hereinafter set forth, a certificate or certificates for the number of shares of Common Stock and Warrants to which it shall be entitled (subject to the delivery of the original Note to the Escrow Agent). In the absence of an opinion of counsel to the Holder reasonably acceptable to the Corporation indicating that the securities underlying this Note may be issued without restrictive legends pursuant to an exemption from the Act, or the registration thereof, the certificate or certificates representing such underlying securities shall bear a legend substantially similar to that set forth on this Note. The date of conversion (the "Date of Conversion") shall be the date on which the Conversion Notice is received by the Escrow Agent and the Corporation and the person or persons entitled to receive the shares of Common Stock and Warrants issuable upon such conversion shall be treated for all purposes as the record Holder or Holders of such shares of Common Stock and Warrants on such date.

Mechanics of Conversion. At any time from (i) To convert Preferred Shares into Common Shares, the date hereof, Lender may at its option elect to convert all (but not less than all) of the outstanding Principal Amount and unpaid accrued interest thereon as of such date into shares of the Borrower's Common Stock, $0.001 par value per share in accordance with this Section 6. The Lender holder shall give at least 15 days prior written notice ("CONVERSION NOTICE") to Borrower the Corporation in the form of the date on page 1 of Exhibit A hereto (which such conversion is to Conversion Notice will be effectuated (such date, the "Conversion Date"). The number of shares of Common Stock to which Lender shall be entitled upon such conversion shall be determined given by dividing (x) the outstanding Principal Amount and unpaid accrued interest thereon as of facsimile transmission no later than the Conversion Date by $0.035 and sent via overnight delivery no later than one Trading Day (the "Conversion Price"as defined below) On after the Conversion Date, ) stating that such holder elects to convert the outstanding Principal Amount same and unpaid accrued interest xxxxxxn shall state therein the number of Preferred Shares to be converted automatically into the Common Stock without further action by the Lender and whether or not this Note has been surrendered to Borrower or its transfer agent, and Lender shall be deemed to be the shareholder of record as of the Conversion Date with respect to the Common Stock. Within fourteen (14) days subsequent to the Conversion Date Lender shall surrender this Note to Borrower or its transfer agent, duly marked cancelled and, in exchange therefor, Lender shall receive from Borrower share certificates evidencing the Common Stock in the name or names in which Lender such holder wishes such the certificate or certificates for Common Shares to be issuedissued (the date of such Conversion Notice shall be referred to herein as the "CONVERSION DATE"). If within fourteen (14) days Either simultaneously with the delivery of the Conversion DateNotice, Lender is unable or within one (1) Trading Day (as defined below) thereafter, the holder shall deliver (which also may be done by facsimile transmission) page 2 to deliver this NoteExhibit A hereto indicating the computation of the number of Common Shares to be received. As soon as possible after delivery of the Conversion Notice, Lender such holder shall notify Borrower surrender the certificate or its certificates representing the Preferred Shares being converted, duly endorsed, at the office of the Corporation or, if identified in writing to all the holders by the Corporation, at the offices of any transfer agent for such shares. In addition, if the Common Shares are to be issued in the name of a person other than the holder or an affiliate of the holder, the holder shall supply such additional documentation as the Corporation shall reasonably request, to establish that such Note has been losttransfer is in compliance with the Securities Act of 1933, stolen or destroyed as amended. If the Conversion Notice is delivered prior to the delivery to the holder by the Corporation of the Preferred Shares being converted, then the delivery of such Preferred Shares to such holder, and shall deliver surrender to Borrower an acknowledgement that the obligations evidenced by this NoteCorporation of the certificates representing Preferred Shares, shall have been upon the Conversion Date be deemed fully satisfied, and, if requested by Borrower, Lender to have occurred on the books of the Corporation and the holder shall execute an agreement reasonably satisfactory have no obligation to Borrower to indemnify Borrower from any loss incurred by it in connection with inability of Lender to deliver surrender certificates representing such NotePreferred Shares.

Mechanics of Conversion. At any time from the date hereof, Lender may at its option elect In order to convert all this Debenture (but not less than allin whole or in part) of the outstanding Principal Amount and unpaid accrued interest thereon as of such date into full shares of the Borrower's Common Stock, $0.001 par value per share in accordance with this Section 6. The Lender the Holder (i) shall give at least 15 days prior written notice to Borrower in the form of the date on which such conversion is to be effectuated (such date, the "Conversion Date"). The number of shares of Common Stock to which Lender shall be entitled upon such conversion shall be determined by dividing (x) the outstanding Principal Amount and unpaid accrued interest thereon as of the Conversion Date by $0.035 EXHIBIT 1 hereto (the "Conversion PriceNotice") On by facsimile to the Conversion DateCompany at such office that the Holder elects to convert the principal amount (plus accrued but unpaid interest and default payments) specified therein, the outstanding Principal Amount which such notice and unpaid accrued interest xxxxxxn election shall be converted automatically into revocable by the Holder at any time prior to its receipt of the Common Stock without further action by the Lender and whether or not this Note has been surrendered to Borrower or its transfer agentupon conversion, and Lender shall be deemed to be the shareholder of record (ii) as of the Conversion Date with respect to the Common Stock. Within fourteen (14) days subsequent to the Conversion Date Lender soon as practicable after such notice, shall surrender this Note to Borrower or its transfer agentDebenture, duly marked cancelled andendorsed, in exchange thereforby either overnight courier or 2-day courier, Lender to the principal office of the Company; provided, however, that the Company shall receive from Borrower share not be obligated to issue certificates evidencing the shares of the Common Stock in issuable upon such conversion unless either the name Debenture evidencing the principal amount is delivered to the Company as provided above, or names in which Lender wishes such certificate or certificates to be issued. If within fourteen (14) days of the Conversion Date, Lender is unable to deliver this Note, Lender shall notify Borrower or its transfer agent Holder notifies the Company that such Note has Xxxxxxxxx(s) have been lost, stolen or destroyed and shall deliver to Borrower an acknowledgement that the obligations evidenced by this Note, shall have been upon the Conversion Date be deemed fully satisfied, and, if requested by Borrower, Lender shall execute promptly executes an agreement reasonably satisfactory to Borrower the Company to indemnify Borrower the Company from any loss incurred by it in connection with inability such lost, stolen or destroyed Debentures. If a Holder is converting less than the maximum number of Lender shares it may convert under its Debenture, the Company shall reissue the Debenture with the appropriate remaining principal amount as soon as practicable after the Company shall have received the Holder's surrendered Debenture. The Company shall issue and deliver within one business day of the delivery to deliver the Company of such NoteConversion Notice, to such Holder of Debenture(s) at the address of the Holder, or to its designee, a certificate or certificates for the number of shares of Common Stock to which the Holder shall be entitled as aforesaid, together with a calculation of the Conversion Rate and a Debenture or Debentures for the principal amount of Debentures not submitted for conversion. The date on which the Conversion Notice is given (the "Holder Conversion Date") shall be deemed to be the date the Company received by facsimile the Conversion Notice, and the person or persons entitled to receive the shares of Common Stock issuable upon such conversion shall be treated for all purposes as the record holder or holders of such shares of Common Stock on such date. In lieu of delivering physical certificates representing the Common Shares issuable upon conversion of Debentures (as defined in the Purchase Agreement), provided the Company's transfer agent is participating in the Depository Trust Company ("DTC") Fast Automated Securities Transfer ("FAST") program, upon request of the holder, the Company shall use its best efforts to cause its transfer agent to electronically transmit the Common Shares issuable upon conversion or exercise to the Holder, by crediting the account of Holder's prime broker with DTC through its Deposit Withdrawal Agent Commission ("DWAC") system. The time periods for delivery described above shall apply to the electronic transmittals through the DWAC system. The parties agree to coordinate with DTC to accomplish this objective. The conversions pursuant to Sections 5 and 6 shall be deemed to have been made immediately prior to the close of business on the Holder Conversion Date. The person or persons entitled to receive the Common Shares issuable upon such conversion shall be treated for all purposes as the record holder or holders of such Common Shares at the close of business on the Holder Conversion Date.

Mechanics of Conversion. At any time from the date hereof, Lender may at its option elect to convert all (but not less than all) of the outstanding Principal Amount and unpaid accrued interest thereon as of such date Before this Debenture can be converted into shares of the Borrower's Common Stock, $0.001 par value per share the Debenture must be surrendered by Holder to the Company at its offices at the address following its signature below (or at such other address of which the Company shall have notified the Holder in accordance with this Section 6writing). The Lender In the event Holder elects to convert the Debenture pursuant to Holder's Conversion Right, Holder shall give at least 15 days prior written notice to Borrower the Company at such offices, that Holder elects to convert the Debenture, or, if less than the entire principal amount of the date on which such conversion Debenture is to be effectuated (such dateconverted, the "Conversion Date")portion thereof to be converted. The number of Such notice shall also state the name or names (with address or addresses) in which the certificate or certificates for shares of Common Stock to which Lender shall be entitled issuable upon such conversion shall be determined issued and shall contain such representations as may reasonably be required by dividing (x) the outstanding Principal Amount Company to the effect that the shares to be received upon conversion are not being acquired and unpaid accrued interest thereon as of will not be transferred in any way that might violate the then applicable laws. In the event the Company elects to convert the Debenture pursuant to the Company's Conversion Date by $0.035 (the "Conversion Price") On the Conversion DateRight, the outstanding Principal Amount and unpaid accrued interest xxxxxxn Company shall be converted automatically into notify the Common Stock without further action by the Lender and whether or not this Note has been surrendered to Borrower or its transfer agent, and Lender shall be deemed to be the shareholder Holder in writing of record as of the Conversion Date with respect to the Common Stocksuch election at Holder's address provided in Section 1 hereof. Within fourteen ten (14) days subsequent to the Conversion Date Lender shall surrender this Note to Borrower or its transfer agent, duly marked cancelled and, in exchange therefor, Lender shall receive from Borrower share certificates evidencing the Common Stock in the name or names in which Lender wishes such certificate or certificates to be issued. If within fourteen (1410) days of receipt of such notification from the Company, Holder shall surrender the Debenture and provide the Company with written notice that Holder elects to convert the Debenture in the principal amount as identified in the Company's notice, and such Holder's notice shall also set forth the issuance instructions and representations as if Holder had elected to exercise Holder's Conversion DateRight. Noncompliance by Holder shall subject Holder to the remedy addressed in Subsection 5.6 hereof. As promptly as practicable after the receipt of notice of conversion from Holder and the surrender of the Debenture as aforesaid, Lender is unable to deliver this Note, Lender shall notify Borrower or its transfer agent that such Note has been lost, stolen or destroyed and shall deliver to Borrower an acknowledgement that the obligations evidenced by this Note, shall have been upon the Conversion Date be deemed fully satisfied, and, if requested by Borrower, Lender shall execute an agreement reasonably satisfactory to Borrower to indemnify Borrower from any loss incurred by it in connection with inability of Lender to deliver such Note.Company

Mechanics of Conversion. At No fractional shares of Common Stock shall be issued upon conversion of this Debenture. In lieu of any time from fractional share to which the date hereofHolder would otherwise be entitled, Lender may at its option elect the Company shall pay cash to such Holder in an amount equal to such fraction multiplied by the Conversion Price then in effect. In order to convert all (but not less than all) of the outstanding Principal Amount and unpaid accrued interest thereon as of such date Debenture into full shares of the Borrower's Common Stock, $0.001 par value per share in accordance with this Section 6. The Lender the Holder shall surrender the certificate or certificates therefore, duly endorsed, by either overnight courier or 2-day courier, to the office of the Company or of any transfer agent for the Debenture, and shall give at least 15 days prior written notice to Borrower the Company at such office with a copy to President of Company, tel 000-000-0000 facsimile 000-000-0000, that he elects to convert the same, the number of Debenture so converted and a calculation of the date on which such conversion is to be effectuated (such date, the "Conversion Date"). The number of shares of Common Stock to which Lender be issued upon conversion (with an advance copy of the certificate(s) and the notice by facsimile); provided, however, that the Company shall not be entitled obligated to issue certificates evidencing the shares of Common Stock issuable upon such conversion shall be determined by dividing (x) unless either the outstanding Principal Amount and unpaid accrued interest thereon as of certificates evidencing such Debenture are delivered to the Conversion Date by $0.035 (the "Conversion Price") On the Conversion Date, the outstanding Principal Amount and unpaid accrued interest xxxxxxn shall be converted automatically into the Common Stock without further action by the Lender and whether or not this Note has been surrendered to Borrower Company or its transfer agentagent as provided above, and Lender shall be deemed to be or the shareholder of record as of Holder notifies the Conversion Date with respect to the Common Stock. Within fourteen (14) days subsequent to the Conversion Date Lender shall surrender this Note to Borrower or its transfer agent, duly marked cancelled and, in exchange therefor, Lender shall receive from Borrower share certificates evidencing the Common Stock in the name or names in which Lender wishes such certificate or certificates to be issued. If within fourteen (14) days of the Conversion Date, Lender is unable to deliver this Note, Lender shall notify Borrower Company or its transfer agent that such Note has certificates have been lost, stolen or destroyed and shall deliver to Borrower an acknowledgement that the obligations evidenced by this Note, shall have been upon the Conversion Date be deemed fully satisfied, and, if requested by Borrower, Lender shall execute executes an agreement reasonably satisfactory to Borrower the Company to indemnify Borrower the Company from any loss incurred by it in connection with inability such certificates. Notwithstanding the foregoing, the conversion right of Lender the Holder set forth herein shall be limited, solely to the extent required, from time to time, such that in no instance shall the maximum number of shares of Common Stock into which the Holder may convert this Debenture exceed, at any one time, an amount equal to the remainder of (i) 4.99% of the then issued and outstanding shares of Common Stock of the Company following such conversion, minus (ii) the number of shares of Common Stock of the Company then held by the Holder. The Company shall use its best efforts to issue and deliver to Holder or to Holder=s Counsel (AHolder=s Counsel@) within seven (7) business days after delivery to the Company of such Notecertificates, or after such agreement and indemnification, to such Holder of Debenture at the address of the Holder on the books of the Company, a certificate or certificates for the number of shares of Common Stock with legend to which the Holder shall be entitled as aforesaid. The date on which notice of conversion is given (the “Date of Conversion”) shall be deemed to be the date in such notice of conversion is received by the Company, provided that the original Debenture to be converted are received by the transfer agent or the Company within five business days thereafter and the person or persons entitled to receive the shares of Common Stock issuable upon such conversion shall be treated for all purposes as the record holder or holders of such shares of Common Stock on such date. If the original Debenture to be converted are not received by the transfer agent or the Company within five business days after the Date of Conversion, the notice of conversion shall become null and void. In the event of all said shares are not delivered as provided for herein, holder may at its own option declare the within Debenture in default and demand immediate payment of all principal and accrued interest. Following conversion of a Debenture, or a portion thereof, the principal and, upon payment thereof of the interest owed on that Debenture or portion of the Debenture so converted will be deemed paid in full and satisfied, and such Debenture or portion thereof will no longer be outstanding.

Mechanics of Conversion. At any time from The Lender shall notify the date hereofBorrower in writing (the "Conversion Notice"), Lender may at in the manner prescribed in Section 11(e) of the Purchase Agreement, of its option elect desire to convert all (but not less than all) or part of the outstanding Principal Amount and aggregate amount of principal of this Convertible Subordinated Promissory Note plus interest, if any, that has accrued but remains unpaid accrued interest thereon as thereon. The Conversion Notice shall be accompanied by the original of such date into shares this Convertible Subordinated Promissory Note (or reasonable written assurance of the Borrower's Common Stock, $0.001 par value per share in accordance with loss or destruction of the original of this Section 6Convertible Subordinated Promissory Note). The Lender Conversion Notice shall give at least 15 days prior notice specify (i) the aggregate amount of principal of this Convertible Subordinated Promissory Note plus interest, if any, that has accrued but remains unpaid thereon to Borrower be converted (the "Conversion Amount"), (ii) the date of the date on which such desired conversion is to be effectuated (such date, the "Conversion Date"). The number of shares of ) and (iii) the name(s) which should appear on the stock certificate(s) to be issued by the Borrower which represent the Common Stock to which acquired by the Lender shall be entitled upon such conversion. If reasonably required by the Borrower, certificates surrendered for conversion shall be determined accompanied by dividing (x) the outstanding Principal Amount and unpaid accrued interest thereon as a written instrument or instruments of the Conversion Date by $0.035 (the "Conversion Price") On the Conversion Date, the outstanding Principal Amount and unpaid accrued interest xxxxxxn shall be converted automatically into the Common Stock without further action by the Lender and whether or not this Note has been surrendered to Borrower or its transfer agent, and Lender shall be deemed to be the shareholder of record as of the Conversion Date with respect to the Common Stock. Within fourteen (14) days subsequent to the Conversion Date Lender shall surrender this Note to Borrower or its transfer agent, duly marked cancelled and, in exchange therefor, Lender shall receive from Borrower share certificates evidencing the Common Stock in the name or names in which Lender wishes such certificate or certificates to be issued. If within fourteen (14) days of the Conversion Date, Lender is unable to deliver this Note, Lender shall notify Borrower or its transfer agent that such Note has been lost, stolen or destroyed and shall deliver to Borrower an acknowledgement that the obligations evidenced by this Note, shall have been upon the Conversion Date be deemed fully satisfied, and, if requested by Borrower, Lender shall execute an agreement form reasonably satisfactory to the Borrower. The Borrower shall not be required to indemnify pay any tax that may be payable in respect of any transfer involving the issuance and delivery of such certificates upon conversion in a name other than that of the Lender, and the Borrower from any loss incurred by it in connection with inability of Lender shall not be required to issue or deliver such Notecertificates unless or until the persons requesting the issuance thereof shall have established to the Borrower's reasonable satisfaction that any such taxes have been paid or will be paid by parties other than the Borrower.

Mechanics of Conversion. At any time from the date hereof, Lender may at its option elect In order to convert all this Debenture (but not less than allin whole or in part) of the outstanding Principal Amount and unpaid accrued interest thereon as of such date into full shares of the Borrower's Common Stock, $0.001 par value per share in accordance with this Section 6. The Lender the Holder (i) shall give at least 15 days prior written notice to Borrower in the form of the date on which such conversion is to be effectuated (such date, the "Conversion Date"). The number of shares of Common Stock to which Lender shall be entitled upon such conversion shall be determined by dividing (x) the outstanding Principal Amount and unpaid accrued interest thereon as of the Conversion Date by $0.035 EXHIBIT 1 hereto (the "Conversion PriceNotice") On by facsimile to the Conversion DateCompany at such office that the Holder elects to convert the principal amount (plus accrued but unpaid interest and default payments) specified therein, the outstanding Principal Amount which such notice and unpaid accrued interest xxxxxxn election shall be converted automatically into revocable by the Holder at any time prior to its receipt of the Common Stock without further action by the Lender and whether or not this Note has been surrendered to Borrower or its transfer agentupon conversion, and Lender shall be deemed to be the shareholder of record (ii) as of the Conversion Date with respect to the Common Stock. Within fourteen (14) days subsequent to the Conversion Date Lender soon as practicable after such notice, shall surrender this Note to Borrower or its transfer agentDebenture, duly marked cancelled andendorsed, in exchange thereforby either overnight courier or 2-day courier, Lender to the principal office of the Company; PROVIDED, HOWEVER, that the Company shall receive from Borrower share not be obligated to issue certificates evidencing the shares of the Common Stock in issuable upon such conversion unless either the name Debenture evidencing the principal amount is delivered to the Company as provided above, or names in which Lender wishes such certificate or certificates to be issued. If within fourteen (14) days of the Conversion Date, Lender is unable to deliver this Note, Lender shall notify Borrower or its transfer agent Holder notifies the Company that such Note has Debexxxxx(x) have been lost, stolen or destroyed and shall deliver to Borrower an acknowledgement that the obligations evidenced by this Note, shall have been upon the Conversion Date be deemed fully satisfied, and, if requested by Borrower, Lender shall execute promptly executes an agreement reasonably satisfactory to Borrower the Company to indemnify Borrower the Company from any loss incurred by it in connection with inability such lost, stolen or destroyed Debentures. If a Holder is converting less than the maximum number of Lender shares it may convert under its Debenture, the Company shall reissue the Debenture with the appropriate remaining principal amount as soon as practicable after the Company shall have received the Holder's surrendered Debenture. The Company shall issue and deliver within one business day of the delivery to deliver the Company of such Note.Conversion Notice, to such Holder of Debenture(s) at the address of the Holder, or to its designee, a certificate or certificates for the number of shares of Common Stock to which the Holder shall be entitled as aforesaid, together with a calculation of the Conversion Rate and a Debenture or Debentures for the principal amount of Debentures not submitted for conversion. The date on which the Conversion Notice is given (the "Holder Conversion Date") shall be deemed to be the date the Company received by facsimile the Conversion Notice, and the person or persons entitled to receive the shares of Common Stock issuable upon such conversion shall be treated for all purposes as the record holder or holders of such shares of Common Stock on such date. In lieu of delivering physical certificates representing the Common Shares issuable upon conversion of Debentures or the Warrant Shares (as defined in the Purchase Agreement) deliverable upon exercise of Warrants (as defined in the Purchase Agreement), provided the Company's transfer agent is participating in the Depository Trust Company ("DTC") Fast Automated Securities Transfer ("FAST") program, upon request of the holder, the Company shall use its best efforts to cause its transfer agent to electronically transmit the Common Shares and Warrant Shares issuable upon conversion or exercise to the Holder, by crediting the account of Holdxx'x xrime broker with

Mechanics of Conversion. At any time from The Lender shall notify the date hereofBorrower in writing (the "CONVERSION NOTICE"), Lender may at in the manner prescribed in Section 11(e) of the Purchase Agreement, of its option elect desire to convert all (but not less than all) or part of the outstanding Principal Amount aggregate amount of principal of this Convertible Subordinated Promissory Note plus interest, if any, that has accrued but remains unpaid thereon. The Conversion Notice shall be accompanied by the original of this Convertible Subordinated Promissory Note (or reasonable written assurance of the loss or destruction of the original of this Convertible Subordinated Promissory Note). The Conversion Notice shall specify (i) the aggregate amount of principal of this Convertible Subordinated Promissory Note plus interest, if any, that has accrued but remains unpaid thereon to be converted (the "CONVERSION AMOUNT"), (ii) the date of the desired conversion (the "CONVERSION DATE") and unpaid accrued interest thereon as (iii) the name(s) which should appear on the stock certificate(s) to be issued by the Borrower which represent the Common Stock acquired by the Lender upon conversion. If reasonably required by the Borrower, certificates surrendered for conversion shall be accompanied by a written instrument or instruments of transfer in form reasonably satisfactory to the Borrower. The Borrower shall not be required to pay any tax that may be payable in respect of any transfer involving the issuance and delivery of such date into shares certificates upon conversion in a name other than that of the Lender, and the Borrower shall not be required to issue or deliver such certificates unless or until the persons requesting the issuance thereof shall have established to the Borrower's Common Stock, $0.001 par value per share in accordance with this Section 6. The Lender shall give at least 15 days prior notice to Borrower of the date on which reasonable satisfaction that any such conversion is to be effectuated (such date, the "Conversion Date"). The number of shares of Common Stock to which Lender shall be entitled upon such conversion shall be determined by dividing (x) the outstanding Principal Amount and unpaid accrued interest thereon as of the Conversion Date by $0.035 (the "Conversion Price") On the Conversion Date, the outstanding Principal Amount and unpaid accrued interest xxxxxxn shall be converted automatically into the Common Stock without further action by the Lender and whether or not this Note has been surrendered to Borrower or its transfer agent, and Lender shall be deemed to be the shareholder of record as of the Conversion Date with respect to the Common Stock. Within fourteen (14) days subsequent to the Conversion Date Lender shall surrender this Note to Borrower or its transfer agent, duly marked cancelled and, in exchange therefor, Lender shall receive from Borrower share certificates evidencing the Common Stock in the name or names in which Lender wishes such certificate or certificates to be issued. If within fourteen (14) days of the Conversion Date, Lender is unable to deliver this Note, Lender shall notify Borrower or its transfer agent that such Note has been lost, stolen or destroyed and shall deliver to Borrower an acknowledgement that the obligations evidenced by this Note, shall taxes have been upon paid or will be paid by parties other than the Conversion Date be deemed fully satisfied, and, if requested by Borrower, Lender shall execute an agreement reasonably satisfactory to Borrower to indemnify Borrower from any loss incurred by it in connection with inability of Lender to deliver such Note.

Mechanics of Conversion. At any time from the date hereof, Lender may at its option elect In order to convert all this Debenture (but not less than allin whole or in part) of the outstanding Principal Amount and unpaid accrued interest thereon as of such date into full shares of the Borrower's Common Stock, $0.001 par value per share in accordance with this Section 6. The Lender the Holder (i) shall give at least 15 days prior written notice to Borrower in the form of the date on which such conversion is to be effectuated (such date, the "Conversion Date"). The number of shares of Common Stock to which Lender shall be entitled upon such conversion shall be determined by dividing (x) the outstanding Principal Amount and unpaid accrued interest thereon as of the Conversion Date by $0.035 Exhibit 2 hereto (the "Conversion PriceNotice") On by facsimile to the Conversion DateCompany at such office that the Holder elects to convert the principal amount (plus accrued but unpaid interest and delay payments) specified therein, the outstanding Principal Amount which such notice and unpaid accrued interest xxxxxxn election shall be converted automatically into revocable by the Holder at any time prior to its receipt of the Common Stock without further action by the Lender and whether or not this Note has been surrendered to Borrower or its transfer agentupon conversion, and Lender shall be deemed to be (ii) if the shareholder of record entire Outstanding Principal Amount is being converted, as of the Conversion Date with respect to the Common Stock. Within fourteen (14) days subsequent to the Conversion Date Lender soon as practicable after such notice, shall surrender this Note to Borrower or its transfer agentDebenture, duly marked cancelled andendorsed, in exchange thereforby either overnight courier or 2-day courier, Lender to the principal office of the Company; provided, however, that the Company shall receive from Borrower share not be obligated to issue certificates evidencing the shares of the Common Stock in issuable upon such conversion (where the name entire Outstanding Principal Amount is being converted) unless either the Debenture evidencing the principal amount is delivered to the Company as provided above, or names in which Lender wishes such certificate or certificates to be issued. If within fourteen (14) days of the Conversion Date, Lender is unable to deliver this Note, Lender shall notify Borrower or its transfer agent Holder notifies the Company that such Note has Debenture(s) have been lost, stolen or destroyed and shall deliver to Borrower an acknowledgement that the obligations evidenced by this Note, shall have been upon the Conversion Date be deemed fully satisfied, and, if requested by Borrower, Lender shall execute promptly executes an agreement reasonably satisfactory to Borrower the Company to indemnify Borrower the Company from any loss incurred by it in connection with inability such lost, stolen or destroyed Debentures. The Holder shall not be required to physically surrender this Debenture to the Company unless the full Outstanding Principal Amount represented by this Debenture is being converted. The Holder and the Company shall maintain records showing the Outstanding Principal Amount so converted and the dates of Lender such conversions or shall use such other method, reasonably satisfactory to the Holder and the Company, so as not to require physical surrender of this Debenture upon each such conversion. Notwithstanding the foregoing, if this Debenture is converted as aforesaid, the Holder may not transfer this Debenture unless the Holder first physically surrenders this Debenture to the Company, whereupon the Company will forthwith issue and deliver upon the order of the Holder a new Debenture of like tenor, registered as the Holder may request, representing in the aggregate the remaining Outstanding Principal Xxxxxx represented by this Debenture. The Holder and any assignee, by acceptance of this Debenture or a new Debenture, acknowledge and agree that, by reason of the provisions of this paragraph, following conversion of any portion of this Debenture, the Outstanding Principal Amount represented by this Debenture may be less than the Outstanding Principal Amount and the accrued interest set forth on the face hereof. The Company shall issue and deliver within three Trading Days of the delivery to the Company of such Note.Conversion Notice, to such Holder of Debenture(s) at the address of the Holder, or to its designee, a certificate or certificates for the number of shares of Common Stock to which the Holder shall be entitled as aforesaid, together with a Debenture or Debentures for the principal amount of Debentures not submitted for

Mechanics of Conversion. At any time from (i) Conversion at the date hereof, Lender may at its option elect to convert all (but not less than all) of the outstanding Principal Holder. To convert any Conversion Amount and unpaid accrued interest thereon as of such into Ordinary Shares on any date into shares of the Borrower's Common Stock, $0.001 par value per share in accordance with this Section 6. The Lender shall give at least 15 days prior notice to Borrower of the date on which such conversion is to be effectuated (such date, the a "Conversion Date") pursuant to Section (3)(a)(i). The number , the Holder shall (A) transmit by facsimile or email (or otherwise deliver), for receipt on or prior to 11:59 p.m., New York Time, on such date, a copy of shares an executed notice of Common Stock to which Lender shall be entitled upon such conversion shall be determined by dividing (x) in the outstanding Principal Amount and unpaid accrued interest thereon form attached hereto as of the Conversion Date by $0.035 Exhibit I (the "Conversion PriceNotice") to the Company and (B) if required by Section (3)(b)(iii), surrender this Debenture to a nationally recognized overnight delivery service for delivery to the Company (or an indemnification undertaking reasonably satisfactory to the Company with respect to this Debenture in the case of its loss, theft or destruction). On or before the third Business Day following the date of receipt of a Conversion Notice (the "Share Delivery Date"), the Company shall, (X) provided that the Transfer Agent is participating in the Depository Trust Company's ("DTC") Fast Automated Securities Transfer Program, credit such aggregate number of Ordinary Shares to which the Holder shall be entitled to the Holder's or its designee's balance account with DTC through its Deposit Withdrawal Agent Commission system or (Y) if the Transfer Agent is not participating in the DTC Fast Automated Securities Transfer Program, issue and deliver to the address as specified in the Conversion DateNotice, a certificate, registered in the name of the Holder or its designee, for the number of Ordinary Shares to which the Holder shall be entitled which certificates shall not bear any restrictive legends unless required pursuant to rules and regulations of the Commission. If this Debenture is physically surrendered for conversion and the outstanding Principal Amount and unpaid accrued interest xxxxxxn shall be converted automatically into of this Debenture is greater than the Common Stock without further action by the Lender and whether or not this Note has been surrendered to Borrower or its transfer agent, and Lender shall be deemed to be the shareholder of record as Principal portion of the Conversion Date with respect Amount being converted, then the Company shall as soon as practicable and in no event later than three (3) Business Days after receipt of this Debenture and at its own expense, issue and deliver to the Common StockHolder a new Debenture representing the outstanding principal not converted. Within fourteen (14) days subsequent The Person or Persons entitled to receive the Conversion Date Lender Ordinary Shares issuable upon a conversion of this Debenture shall surrender this Note to Borrower be treated for all purposes as the record holder or its transfer agent, duly marked cancelled and, in exchange therefor, Lender shall receive from Borrower share certificates evidencing the Common Stock in the name or names in which Lender wishes holders of such certificate or certificates to be issued. If within fourteen (14) days of the Conversion Date, Lender is unable to deliver this Note, Lender shall notify Borrower or its transfer agent that such Note has been lost, stolen or destroyed and shall deliver to Borrower an acknowledgement that the obligations evidenced by this Note, shall have been Ordinary Shares upon the transmission of a Conversion Date be deemed fully satisfied, and, if requested by Borrower, Lender shall execute an agreement reasonably satisfactory to Borrower to indemnify Borrower from any loss incurred by it in connection with inability of Lender to deliver such NoteNotice.

Mechanics of Conversion. At In order to convert this Debenture (in whole or in part) into full shares of Common Stock, the Holder (i) shall give written notice in the form of Exhibit 2 hereto (the "CONVERSION NOTICE") by facsimile to the Company at such office that the Holder elects to convert the principal amount (plus accrued but unpaid interest and delay payments) specified therein, which such notice and election shall, in the event that the Common Shares shall not have been delivered within three (3) Trading Days of the delivery to the Company of the Conversion Notice, be revocable by the Holder at any time from the date hereof, Lender may at prior to its option elect to convert all (but not less than all) receipt of the outstanding Common Stock upon conversion, and (ii) if the entire Outstanding Principal Amount and unpaid accrued interest thereon is being converted, as soon as practicable after such notice, shall surrender this Debenture, duly endorsed, by either overnight courier or 2-day courier, to the principal office of such date into the Company; provided, however, that the Company shall not be obligated to issue certificates evidencing the shares of the Borrower's Common Stock, $0.001 par value per share in accordance with this Section 6. The Lender shall give at least 15 days prior notice to Borrower of the date on which such conversion is to be effectuated (such date, the "Conversion Date"). The number of shares of Common Stock to which Lender shall be entitled issuable upon such conversion shall be determined by dividing (x) where the outstanding entire Outstanding Principal Amount and unpaid accrued interest thereon as of is being converted) unless either the Conversion Date by $0.035 (Debenture evidencing the "Conversion Price") On the Conversion Date, the outstanding Principal Amount and unpaid accrued interest xxxxxxn shall be converted automatically into the Common Stock without further action by the Lender and whether or not this Note has been surrendered to Borrower or its transfer agent, and Lender shall be deemed to be the shareholder of record as of the Conversion Date with respect principal amount is delivered to the Common Stock. Within fourteen (14) days subsequent to Company as provided above, or the Conversion Date Lender shall surrender this Note to Borrower or its transfer agent, duly marked cancelled and, in exchange therefor, Lender shall receive from Borrower share certificates evidencing Holder notifies the Common Stock in the name or names in which Lender wishes such certificate or certificates to be issued. If within fourteen (14) days of the Conversion Date, Lender is unable to deliver this Note, Lender shall notify Borrower or its transfer agent Company that such Note has Debenture(s) have been lost, stolen or destroyed and shall deliver to Borrower an acknowledgement that the obligations evidenced by this Note, shall have been upon the Conversion Date be deemed fully satisfied, and, if requested by Borrower, Lender shall execute promptly executes an agreement reasonably satisfactory to Borrower the Company to indemnify Borrower the Company from any loss incurred by it in connection with inability such lost, stolen or destroyed Debentures. The Holder shall not be required to physically surrender this Debenture to the Company unless the full Outstanding Principal Amount represented by this Debenture is being converted. The Holder and the Company shall maintain records showing the Outstanding Principal Amount so converted and the dates of Lender such conversions or shall use such other method, reasonably satisfactory to the Holder and the Company, so as not to require physical surrender of this Debenture upon each such conversion. Notwithstanding the foregoing, if this Debenture is converted as aforesaid, the Holder may not transfer this Debenture unless the Holder first physically surrenders this Debenture to the Company, whereupon the Company will forthwith issue and deliver upon the order of the Holder a new Debenture of like tenor, registered as the Holder may request, representing in the aggregate the remaining Outstanding Principal Amount represented by this Debenture. The Holder and any assignee, bx xxxxptance of this Debenture or a new Debenture, acknowledge and agree that, by reason of the provisions of this paragraph, following conversion of any portion of this Debenture, the Outstanding Principal Amount represented by this Debenture may be less than the Outstanding Principal Amount and the accrued interest set forth on the face hereof. The Company shall issue and deliver within three Trading Days of the delivery to the Company of such NoteConversion Notice, to such Holder of Debenture(s) at the address of the Holder, or to its designee, a certificate or certificates for the number of shares of Common Stock to which the Holder shall be entitled as aforesaid, together with a Debenture or Debentures for the principal amount of Debentures not submitted for conversion. The date on which the Conversion Notice is given (the "HOLDER CONVERSION DATE") shall be deemed to be the date the Company received by facsimile the Conversion Notice, and the person or persons entitled to receive the shares of Common Stock issuable upon such conversion shall be treated for all purposes as the record holder or holders of such shares of Common Stock on such date. In the event that such Holder or its designee has not received such certificate or certificates within ten (10) calendar days of the Company's receipt of the Conversion Notice, the Holder shall, in addition to any other rights or remedies it may have be entitled to receive a cash payment at the rate of 1% per month of the amount submitted for conversion (such cash payment due on demand by the Holder) for each day, after the third Trading Day following the Holder Conversion Date, that the certificates have not been received. The conversions pursuant to Sections 5 shall be deemed to have been made immediately prior to the close of business on the Holder Conversion Date. The person or persons entitled to receive the Common Shares issuable upon such conversion shall be treated for all purposes as the record holder or holders of such Common Shares at the close of business on the Holder Conversion Date. Notwithstanding any provision herein to the contrary, this Debenture may not be converted, and Common Shares may not be issued, unless such conversion and issuance have been registered under the 1933 Act and applicable state securities laws or are exempt from registration thereunder.

Mechanics of Conversion. At any time from the date hereof, Lender may at its option elect In order to convert all this Debenture (but not less than allin whole or in part) of the outstanding Principal Amount and unpaid accrued interest thereon as of such date into full shares of the Borrower's Common Stock, $0.001 par value per share in accordance with the Holder shall surrender this Section 6. The Lender Debenture, duly endorsed, by either overnight courier or 2-day courier, to the principal office of the Company, and shall give at least 15 days prior written notice to Borrower in the form of the date on which such conversion is to be effectuated (such date, the "Conversion Date"). The number of shares of Common Stock to which Lender shall be entitled upon such conversion shall be determined by dividing (x) the outstanding Principal Amount and unpaid accrued interest thereon as of the Conversion Date by $0.035 EXHIBIT 1 hereto (the "Conversion PriceNotice") On by facsimile (with the Conversion Dateoriginal of such notice forwarded with the foregoing courier) to the Company at such office that the Holder elects to convert the principal amount (plus accrued but unpaid interest and default payments) specified therein, the outstanding Principal Amount which such notice and unpaid accrued interest xxxxxxn election shall be converted automatically into revocable by the Holder at any time prior to its receipt of the Common Stock without further action by upon conversion; PROVIDED, HOWEVER, that the Lender and whether or Company shall not this Note has been surrendered be obligated to Borrower or its transfer agent, and Lender shall be deemed to be the shareholder of record as of the Conversion Date with respect to the Common Stock. Within fourteen (14) days subsequent to the Conversion Date Lender shall surrender this Note to Borrower or its transfer agent, duly marked cancelled and, in exchange therefor, Lender shall receive from Borrower share issue certificates evidencing the shares of the Common Stock in issuable upon such conversion unless either the name Debenture evidencing the principal amount is delivered to the Company as provided above, or names in which Lender wishes such certificate or certificates to be issued. If within fourteen (14) days of the Conversion Date, Lender is unable to deliver this Note, Lender shall notify Borrower or its transfer agent Holder notifies the Company that such Note has Xxxxxxxxx(s) have been lost, stolen or destroyed and shall deliver to Borrower an acknowledgement that the obligations evidenced by this Note, shall have been upon the Conversion Date be deemed fully satisfied, and, if requested by Borrower, Lender shall execute promptly executes an agreement reasonably satisfactory to Borrower the Company to indemnify Borrower the Company from any loss incurred by it in connection with inability such lost, stolen or destroyed Debentures. The Company shall issue and deliver within T+3 after delivery to the Company of Lender such Conversion Notice, to deliver such NoteHolder of Debenture(s) at the address of the Holder, or to its designee, a certificate or certificates for the number of shares of Common Stock to which the Holder shall be entitled as aforesaid, together with a calculation of the Conversion Rate and a Debenture or Debentures for the principal amount of Debentures not submitted for conversion. The date on which the Conversion Notice is given (the "Holder Conversion Date") shall be deemed to be the date the Company received by facsimile the Conversion Notice, and the person or persons entitled to receive the shares of Common Stock issuable upon such conversion shall be treated for all purposes as the record holder or holders of such shares of Common Stock on such date. In lieu of delivering physical certificates representing the Common Shares issuable upon conversion of Debentures or the Warrant Shares (as defined in the Purchase Agreement) deliverable upon exercise of Warrants (as defined in the Purchase Agreement), provided the Company's transfer agent is participating in the Depository Trust Company ("DTC") Fast Automated Securities Transfer ("FAST") program, upon request of the holder, the Company shall use its best efforts to cause its transfer agent to electronically transmit the Common Shares and Warrant Shares issuable upon conversion or exercise to the Holder, by crediting the account of Xxxxxx's prime broker with DTC through its Deposit Withdrawal Agent Commission ("DWAC") system. The time periods for delivery described above shall apply to the electronic transmittals through the DWAC system. The parties agree to coordinate with DTC to accomplish this objective. The conversions pursuant to Sections 5 and 6 shall be deemed to have been made immediately prior to the close of business on the Holder Conversion Date. The person or persons entitled to receive the Common Shares issuable upon such conversion shall be treated for all purposes as the record holder or holders of such Common Shares at the close of business on the Holder Conversion Date.

Mechanics of Conversion. At Before any time from the date hereof, Lender may at its option elect Holder shall be entitled to convert all (but not less than all) of the outstanding Principal Amount and unpaid accrued interest thereon as of such date into shares of the Borrower's Common Stock, $0.001 par value per share in accordance with this Section 6. The Lender shall give at least 15 days prior notice to Borrower of the date on which such conversion is to be effectuated (such date, the "Conversion Date"). The number of Series A Preferred into shares of Common Stock and to which Lender receive certificates therefor, such Holder shall be entitled upon such conversion shall be determined by dividing (x) surrender the outstanding Principal Amount and unpaid accrued interest thereon as certificate or certificates therefor, duly endorsed, at the principal office of the Conversion Date by $0.035 (Corporation or of any transfer agent for the "Conversion Price"Series A Preferred, and shall give written notice to the Corporation at such office that such Holder elects to convert the same; PROVIDED, HOWEVER, that in the event of an automatic conversion pursuant to SECTION 4(B) On the Conversion Datehereof, the outstanding Principal Amount and unpaid accrued interest xxxxxxn shares of Series A Preferred shall be converted automatically into the Common Stock without any further action by the Lender Holders and whether or not this Note has been the certificates representing such shares are surrendered to Borrower the Corporation or its transfer agent, ; and Lender provided further that the Corporation shall not be deemed obligated to be issue certificates evidencing the shareholder shares of record as Class B Common Stock issuable upon such automatic conversion unless and until the certificates evidencing such shares of the Conversion Date with respect Series A Preferred are either delivered to the Common Stock. Within fourteen (14) days subsequent to the Conversion Date Lender shall surrender this Note to Borrower Corporation or its transfer agentagent as provided above, duly marked cancelled and, in exchange therefor, Lender shall receive from Borrower share certificates evidencing or the Common Stock in Holder notifies the name or names in which Lender wishes such certificate or certificates to be issued. If within fourteen (14) days of the Conversion Date, Lender is unable to deliver this Note, Lender shall notify Borrower Corporation or its transfer agent that such Note has certificates have been lost, stolen or destroyed and shall deliver to Borrower an acknowledgement that the obligations evidenced by this Note, shall have been upon the Conversion Date be deemed fully satisfied, and, if requested by Borrower, Lender shall execute executes an agreement reasonably satisfactory to Borrower the Corporation to indemnify Borrower the Corporation from any loss incurred by it in connection with inability such certificates. The Corporation shall as soon as practicable after such delivery, or after such agreement and indemnification, issue and deliver at such office to such Holder a certificate or certificates for the number of Lender shares of Common Stock or Class B Common Stock, as the case may be, to deliver which it, he or she shall be entitled and, at the option of such NoteHolder, either a check payable to the Holder in the amount of any accrued but unpaid dividends payable pursuant to SECTION 2 hereof, and any accrued and unpaid interest thereon, or the number of fully paid and nonassessable shares of Common Stock or Class B Common Stock, as the case may be, which results from dividing the Conversion Price in effect at such time into the aggregate of all such accrued but unpaid dividends and accrued and unpaid interest. Such conversion shall be deemed to have been made immediately prior to the close of business on the date of such surrender of the shares of Series A Preferred to be converted, or, in the case of automatic conversion, simultaneously upon the occurrence of the event leading to such automatic conversion, and the person or persons entitled to receive the shares of Common Stock or Class B Common Stock, as the case may be, issuable upon such conversion shall be treated for all purposes as the holder or holders of such shares of Common Stock or Class B Common Stock, as the case may be, on such date.

Mechanics of Conversion. At No fractional shares of Common Stock shall be issued upon conversion of the Series B Preferred; the number of shares of Common Stock issuable upon conversion of the Series B Preferred shall be rounded down to the nearest whole number of shares of Common Stock. Before any time from holder of the date hereof, Lender may at its option elect Series B Preferred shall be entitled to convert all (but not less than all) the same into full shares of Common Stock and to receive certificates therefor, such holder shall surrender the certificate or certificates therefor, duly endorsed, at the office of the Corporation or of any transfer agent for the Series B Preferred, and shall give written notice to the Corporation at such office that such holder elects to convert the same; PROVIDED, HOWEVER, that in the event of a conversion pursuant to Section 4(b), the outstanding Principal Amount and unpaid accrued interest thereon as of such date into shares of the Borrower's Series B Preferred shall be converted automatically without any further action by the holders of such shares and whether or not the certificates representing such shares are surrendered to the Corporation or its transfer agent; and PROVIDED, FURTHER, that the Corporation shall not be obligated to issue certificates evidencing the shares of Common StockStock issuable upon such conversion unless the certificates evidencing such shares of the Series B Preferred are either delivered to the Corporation or its transfer agent as provided above, $0.001 par value per share in accordance with this Section 6or the holder notifies the Corporation or its transfer agent that such certificates have been lost, stolen or destroyed and executes an agreement satisfactory to the Corporation to indemnify it for losses incurred as a result of the loss of such certificates. The Lender shall give Corporation shall, as soon as practicable after such delivery, or such agreement and indemnification in the case of a lost certificate, issue and deliver at least 15 days prior notice such office to Borrower such holder of the date on which such conversion is to be effectuated (such dateSeries B Preferred, a certificate or certificates for the "Conversion Date"). The number of shares of Common Stock to which Lender such holder shall be entitled upon such as aforesaid. Such conversion shall be determined by dividing (x) the outstanding Principal Amount and unpaid accrued interest thereon as of the Conversion Date by $0.035 (the "Conversion Price") On the Conversion Date, the outstanding Principal Amount and unpaid accrued interest xxxxxxn shall be converted automatically into the Common Stock without further action by the Lender and whether or not this Note has been surrendered to Borrower or its transfer agent, and Lender shall be deemed to be have been made immediately prior to the shareholder close of record as business on the date of such surrender of the Conversion Date with respect shares of the Series B Preferred to the Common Stock. Within fourteen (14) days subsequent to the Conversion Date Lender shall surrender this Note to Borrower or its transfer agentbe converted, duly marked cancelled andor, in exchange therefor, Lender shall receive from Borrower share certificates evidencing the Common Stock in the name or names in which Lender wishes such certificate or certificates to be issued. If within fourteen (14) days case of the Conversion Date, Lender is unable to deliver this Note, Lender shall notify Borrower or its transfer agent that such Note has been lost, stolen or destroyed and shall deliver to Borrower an acknowledgement that the obligations evidenced by this Note, shall have been upon the Conversion Date be deemed fully satisfied, and, if requested by Borrower, Lender shall execute an agreement reasonably satisfactory to Borrower to indemnify Borrower from any loss incurred by it in connection with inability of Lender to deliver such Note.automatic

Mechanics of Conversion. At (i) To convert any time from Conversion Amount into Conversion Shares on any date (a “Conversion Date”), the date hereofHolder shall (A) transmit by facsimile (or otherwise deliver), Lender may at its option elect to convert all (but not less than all) of the outstanding Principal Amount and unpaid accrued interest thereon as of such date into shares of the Borrower's Common Stockfor receipt on or before 5:00 p.m., $0.001 par value per share in accordance with this Section 6. The Lender shall give at least 15 days prior notice to Borrower of the date New York Time, on which such conversion is to be effectuated (such date, a copy of an executed notice of conversion in the "Conversion Date"). The number of shares of Common Stock to which Lender shall be entitled upon such conversion shall be determined by dividing (x) the outstanding Principal Amount and unpaid accrued interest thereon form attached as of the Conversion Date by $0.035 Exhibit I (the "“Conversion Price"Notice”) On the Conversion Date, the outstanding Principal Amount and unpaid accrued interest xxxxxxn shall be converted automatically into the Common Stock without further action by the Lender and whether or not this Note has been surrendered to Borrower or its transfer agent, and Lender shall be deemed to be the shareholder of record as of the Conversion Date with respect to the Common Stock. Within fourteen Maker and (14B) days subsequent to the Conversion Date Lender shall surrender this Note to Borrower a common carrier for delivery to the Maker as soon as practicable on or following such date (or provide an indemnification undertaking acceptable to the Maker with respect to this Note in the case of its loss, theft or destruction). On or before the second (2nd ) Business Day following the date of receipt of a Conversion Notice, the Maker shall transmit by facsimile a confirmation of receipt of such Conversion Notice to the Holder and the Maker’s transfer agent (the “Transfer Agent”). On or before the third (3rd) Trading Day following the date of receipt of a Conversion Notice, the Maker shall: (1) (x) provided that the Transfer Agent is participating in the Depository Trust Maker’s (“DTC”) Fast Automated Securities Transfer Program and provided that the Registration Condition is satisfied, credit such aggregate number of Conversion Shares to which the Holder shall be entitled to the Holder’s balance account with DTC through its Deposit/Withdrawal at Custodian system or (y) if (A) the Maker acts as its own transfer agent, duly marked cancelled andor (B) the Transfer Agent is not participating in the DTC Fast Automated Securities Transfer Program, or (C) if the Registration Condition is not satisfied, issue and deliver to the address as specified in exchange thereforthe Conversion Notice, Lender shall receive from Borrower share certificates evidencing the Common Stock a certificate, registered in the name or names in which Lender wishes such certificate or certificates to be issued. If within fourteen (14) days of the Holder, for the number of Conversion DateShares to which the Holder shall be entitled. Notwithstanding anything herein to the contrary, Lender the Maker shall not be obligated to issue any Conversion Shares until this Note is unable physically surrendered to deliver the Maker, or the Holder notifies the Maker that this Note, Lender shall notify Borrower or its transfer agent that such Note has been lost, stolen or destroyed and shall deliver provides an indemnification undertaking acceptable to Borrower an acknowledgement that the obligations evidenced by this Note, shall have been upon the Conversion Date be deemed fully satisfied, and, if requested by Borrower, Lender shall execute an agreement reasonably satisfactory to Borrower Maker to indemnify Borrower the Maker from any loss incurred by it in connection therewith. If the outstanding Principal of this Note is greater than the Principal portion of the Conversion Amount being converted, then the Maker shall as soon as practicable and in no event later than four (4) Trading Days after receipt of this Note and at its own expense, issue and deliver to the Holder a new Note (in accordance with inability Section 15(d)) representing the outstanding Principal not converted. The Person or Persons entitled to receive the Conversion Shares issuable upon a conversion of Lender to deliver this Note shall be treated for all purposes as the record holder or holders of such NoteConversion Shares.

Mechanics of Conversion. At In order to convert this Debenture (in whole or in part) into full shares of Common Stock, the Holder (i) shall give written notice in the form of Exhibit 2 hereto (the "CONVERSION NOTICE") by facsimile to the Company that the Holder elects to convert the principal amount (plus accrued but unpaid interest and Monthly Delay Payments) specified therein, which such notice and election shall be revocable by the Holder at any time from the date hereof, Lender may at prior to its option elect to convert all (but not less than all) receipt of the outstanding Common Stock upon conversion, and (ii) if the entire Outstanding Principal Amount and unpaid accrued interest thereon is being converted, as soon as practicable after such notice, shall surrender this Debenture, duly endorsed, by either overnight courier or 2-day courier, to the principal office of such date into the Company; provided, however, that the Company shall not be obligated to issue certificates evidencing the shares of the Borrower's Common Stock, $0.001 par value per share in accordance with this Section 6. The Lender shall give at least 15 days prior notice to Borrower of the date on which such conversion is to be effectuated (such date, the "Conversion Date"). The number of shares of Common Stock to which Lender shall be entitled issuable upon such conversion shall be determined by dividing (x) where the outstanding entire Outstanding Principal Amount and unpaid accrued interest thereon as of is being converted) unless either the Conversion Date by $0.035 (Debenture evidencing the "Conversion Price") On the Conversion Date, the outstanding Principal Amount and unpaid accrued interest xxxxxxn shall be converted automatically into the Common Stock without further action by the Lender and whether or not this Note has been surrendered to Borrower or its transfer agent, and Lender shall be deemed to be the shareholder of record as of the Conversion Date with respect principal amount is delivered to the Common Stock. Within fourteen (14) days subsequent to Company as provided above, or the Conversion Date Lender shall surrender this Note to Borrower or its transfer agent, duly marked cancelled and, in exchange therefor, Lender shall receive from Borrower share certificates evidencing Holder notifies the Common Stock in the name or names in which Lender wishes such certificate or certificates to be issued. If within fourteen (14) days of the Conversion Date, Lender is unable to deliver this Note, Lender shall notify Borrower or its transfer agent Company that such Note has Debenture(s) have been lost, stolen or destroyed and shall deliver to Borrower an acknowledgement that the obligations evidenced by this Note, shall have been upon the Conversion Date be deemed fully satisfied, and, if requested by Borrower, Lender shall execute promptly executes an agreement reasonably satisfactory to Borrower the Company to indemnify Borrower the Company from any loss incurred by it in connection with inability such lost, stolen or destroyed Debentures. The Holder shall not be required to physically surrender this Debenture to the Company unless the full Outstanding Principal Amount represented by this Debenture is being converted. The Holder and the Company shall maintain records showing the Outstanding Principal Amount so converted and the dates of Lender such conversions or shall use such other method, reasonably satisfactory to deliver the Holder and the Company, so as not to require physical surrender of this Debenture upon each such Note.conversion. In the event of any dispute or discrepancy, such records of the Company shall be controlling and determinative in the absence of manifest error. Notwithstanding

Mechanics of Conversion. At any time from the date hereof, Lender may at its option elect In order to convert all (but not less than all) of the outstanding Principal Amount and unpaid accrued interest thereon as of such date Debentures into full shares of the Borrower's Common Stock, $0.001 par value per share in accordance with this Section 6. The Lender the Holder shall give at least 15 days prior notice to Borrower (i) fax a copy of the date on fully executed notice of conversion in the form attached hereto ("Notice of Conversion") to the Company at the office of the Company and of its designated Transfer Agent for the Common Shares that the Holder elects to convert the same, which such conversion is notice shall specify the principal amount of the Debentures to be effectuated (such dateconverted, the "Conversion Date"). The applicable conversion price and a calculation of the number of shares of Common Stock to which Lender shall be entitled issuable upon such conversion shall be determined by dividing (x) the outstanding Principal Amount and unpaid accrued interest thereon as together with a copy of the Conversion Date by $0.035 first page of each certificate to be converted) prior to Midnight, New York City time (the "Conversion PriceNotice Deadline") On on the date of conversion specified on the Notice of Conversion Dateand (ii) surrender the original certificates representing the Debentures being converted (the "Debenture Certificates"), duly endorsed, along with a copy of the Notice of Conversion (together with the Debenture Certificates, the outstanding Principal Amount "Conversion Documents") no later than Midnight, New York city time the next business day, to a common courier for either overnight or 2-day delivery to the office of the Company or the Transfer Agent for the Debentures. The Company shall cause to be issued and unpaid accrued interest xxxxxxn shall delivered within five (5) business days after delivery to the Company of the facsimile copies of such Notice of Conversion and such Debenture Certificates to such Holder at the address of the Holder on the books of the Company or such other address as may be converted automatically into specified by such Holder), a certificate or certificates for the number of shares of Common Stock without further action by issuable upon such conversion; provided, however, that the Lender and whether or Company shall not this Note has been surrendered be obligated to Borrower or its transfer agent, and Lender shall be deemed to be the shareholder of record as of the Conversion Date with respect to the Common Stock. Within fourteen (14) days subsequent to the Conversion Date Lender shall surrender this Note to Borrower or its transfer agent, duly marked cancelled and, in exchange therefor, Lender shall receive from Borrower share issue certificates evidencing the shares of Common Stock in unless either the name or names in which Lender wishes such certificate or certificates to be issued. If within fourteen (14) days of original Debenture Certificates have been received by the Conversion Date, Lender is unable to deliver this Note, Lender shall notify Borrower Company or its transfer agent Transfer Agent, or the Holder notifies the Company or its Transfer Agent, or the Holder delivers to the Company an affidavit and indemnification to the effect that such Note has certificates have been lost, stolen or destroyed and shall deliver to Borrower destroyed, together with an acknowledgement that the obligations evidenced by this Note, shall have been upon the Conversion Date be deemed fully satisfied, and, if requested by Borrower, Lender shall execute an agreement reasonably satisfactory to Borrower to indemnify Borrower from any loss incurred by it in connection with inability of Lender to deliver such Noteappropriate indemnity bond.

Mechanics of Conversion. At UNDER SECTIONS 6(A) AND 6(B). Before any time from the date hereof, Lender may at its option elect holder of Class B Preferred Stock shall be entitled to convert all (but not less than all) of the outstanding Principal Amount and unpaid accrued interest thereon as of such date same into shares of the Borrower's Common Stock, $0.001 par value per share in accordance with this Section 6. The Lender shall give at least 15 days prior notice to Borrower of the date on which such conversion is to be effectuated (such date, the "Conversion Date"). The number of shares of Common Stock and to which Lender receive certificates therefor, such holder shall be entitled upon such conversion shall be determined by dividing (x) surrender the outstanding Principal Amount and unpaid accrued interest thereon as Class B Preferred Stock certificates, duly endorsed, at the office of the Conversion Date by $0.035 (Corporation or of any transfer agent for the "Conversion Price") On Class B Preferred Stock, and shall give written notice to the Conversion DateCorporation at such office that such holder elects to convert the same; PROVIDED, HOWEVER, that in the event of an automatic conversion pursuant to Section 6(b), the outstanding Principal Amount and unpaid accrued interest xxxxxxn shares of Class B Preferred Stock shall be converted automatically into the Common Stock without any further action by the Lender holders of such shares and whether or not this Note has been the certificates representing such shares are surrendered to Borrower the Corporation or its transfer agent; and PROVIDED, and Lender FURTHER that the Corporation shall not be deemed obligated to be issue certificates evidencing the shareholder shares of record as Common Stock issuable upon such automatic conversion unless the certificates evidencing such shares of the Conversion Date with respect Class B Preferred Stock are either delivered to the Common Stock. Within fourteen (14) days subsequent to the Conversion Date Lender shall surrender this Note to Borrower Corporation or its transfer agentagent as provided above, duly marked cancelled and, in exchange therefor, Lender shall receive from Borrower share certificates evidencing or the Common Stock in holder notifies the name or names in which Lender wishes such certificate or certificates to be issued. If within fourteen (14) days of the Conversion Date, Lender is unable to deliver this Note, Lender shall notify Borrower Corporation or its transfer agent that such Note has certificates have been lost, stolen or destroyed and shall deliver to Borrower an acknowledgement that the obligations evidenced by this Note, shall have been upon the Conversion Date be deemed fully satisfied, and, if requested by Borrower, Lender shall execute executes an agreement reasonably satisfactory to Borrower the Corporation to indemnify Borrower the Corporation from any loss incurred by it in connection with inability such certificates. The Corporation shall, as soon as practicable after such delivery, or execution of Lender such agreement in the case of a lost certificate, issue and deliver at such office to deliver such Noteholder of Class B Preferred Stock a certificate or certificates for the number of shares of Common Stock to which such holder shall be entitled as aforesaid and a check payable to the holder in the amount of any cash amounts payable as the result of a conversion into fractional shares of Common Stock plus all accrued and unpaid dividends on such holder's Class B Preferred Stock so converted; PROVIDED, HOWEVER, that in the event of a conversion prior to the Cash Payment Date, the Corporation shall issue fractional shares in lieu of the cash payments contemplated above except that the Corporation may pay cash for such fractional shares (a) to the extent permitted by its lending agreements and (b) as a result of a reverse stock split consummated for a legitimate business purpose (such as in preparation for an initial public offering) so long as the cash amount paid for such fractional shares is not material. Such conversion shall be deemed to have been made immediately prior to the close of business on the date of such surrender of the shares of Class B Preferred Stock to be converted, or in the case of automatic conversion immediately upon closing of the Liquidity Event, and the person entitled to receive the shares of Common Stock issuable upon such conversion shall be treated for all purposes as the record holder of such shares of Common Stock on such date.

Mechanics of Conversion. At any time from the date hereof, Lender may at its option elect In order to convert all the Loan (but not less than allin whole or in part) of the outstanding Principal Amount and unpaid accrued interest thereon as of such date into full shares of the Borrower's Common Stock, $0.001 par value per share in accordance with this Section 6. The the Lender (i) shall give at least 15 days prior written notice to Borrower in the form of the date on which such conversion is to be effectuated (such date, the "Conversion Date"). The number of shares of Common Stock to which Lender shall be entitled upon such conversion shall be determined by dividing (x) the outstanding Principal Amount and unpaid accrued interest thereon as of the Conversion Date by $0.035 Exhibit C hereto (the "Conversion PriceNotice") On by facsimile to the Conversion DateBorrower that the Lender elects to convert the principal amount (plus accrued but unpaid interest and default payments) specified therein, the outstanding Principal Amount which such notice and unpaid accrued interest xxxxxxn election shall be converted automatically into irrevocable (other than as described below), and (ii) as soon as practicable after such notice, shall surrender the Note, duly endorsed, by either overnight courier or 2-day courier, to the principal office of the Borrower; provided, however, that the Borrower shall not be obligated to issue certificates evidencing the shares of the Common Stock without further action by issuable upon such conversion unless either the Note evidencing the principal amount is delivered to the Borrower as provided above, or the Lender and whether or not this Note has been surrendered to notifies the Borrower or its transfer agent, and Lender shall be deemed to be the shareholder of record as of the Conversion Date with respect to the Common Stock. Within fourteen (14) days subsequent to the Conversion Date Lender shall surrender this Note to Borrower or its transfer agent, duly marked cancelled and, in exchange therefor, Lender shall receive from Borrower share certificates evidencing the Common Stock in the name or names in which Lender wishes such certificate or certificates to be issued. If within fourteen (14) days of the Conversion Date, Lender is unable to deliver this Note, Lender shall notify Borrower or its transfer agent that such Note has Note(s) have been lost, stolen or destroyed and shall deliver to Borrower an acknowledgement that the obligations evidenced by this Note, shall have been upon the Conversion Date be deemed fully satisfied, and, if requested by Borrower, Lender shall execute promptly executes an agreement reasonably satisfactory to the Borrower to indemnify the Borrower from any loss incurred by it in connection with inability such lost, stolen or destroyed Notes. If Lender is converting less than the maximum number of shares it may convert hereunder, the Borrower shall reissue the Note with the appropriate remaining principal amount as soon as practicable after the Borrower shall have received the Lender's surrendered Note. The Company shall issue and deliver within three (3) business days of the delivery to the Borrower of such Conversion Notice at the address of the Lender, or to its designee, a certificate or certificates for the number of shares of Common Stock to which the Lender shall be entitled as aforesaid, together with a Note or Notes for the principal amount of Notes not submitted for conversion. In the event that Lender or its designee has not received such certificate or certificates within ten (10) calendar days of the Borrower's receipt of the Conversion Notice, the Lender may, in addition to deliver any other rights or remedies it may have, revoke its Conversion Notice. The conversion pursuant to this Sections 2. 5 shall be deemed to have been made immediately prior to the close of business on the Conversion Date. The person or persons entitled to receive the Common Shares issuable upon such Noteconversion shall be treated for all purposes as the record holder of the Note or Notes being converted at the close of business on the Conversion Date.

Mechanics of Conversion. At any time from the date hereof, Lender may at its option elect In order to convert all this Debenture (but not less than allin whole or in part) of the outstanding Principal Amount and unpaid accrued interest thereon as of such date into full shares of the Borrower's Common Stock, $0.001 par value per share in accordance with the Holder shall surrender this Section 6. The Lender Debenture, duly endorsed, by either overnight courier or 2-day courier, to the principal office of the Company, and shall give at least 15 days prior written notice to Borrower in the form of the date on which such conversion is to be effectuated (such date, the "Conversion Date"). The number of shares of Common Stock to which Lender shall be entitled upon such conversion shall be determined by dividing (x) the outstanding Principal Amount and unpaid accrued interest thereon as of the Conversion Date by $0.035 EXHIBIT 1 hereto (the "Conversion PriceNotice") On by facsimile (with the Conversion Dateoriginal of such notice forwarded with the foregoing courier) to the Company at such office that the Holder elects to convert the principal amount (plus accrued but unpaid interest and default payments) specified therein, the outstanding Principal Amount which such notice and unpaid accrued interest xxxxxxn election shall be converted automatically into revocable by the Holder at any time prior to its receipt of the Common Stock without further action by upon conversion; provided, however, that the Lender and whether or Company shall not this Note has been surrendered be obligated to Borrower or its transfer agent, and Lender shall be deemed to be the shareholder of record as of the Conversion Date with respect to the Common Stock. Within fourteen (14) days subsequent to the Conversion Date Lender shall surrender this Note to Borrower or its transfer agent, duly marked cancelled and, in exchange therefor, Lender shall receive from Borrower share issue certificates evidencing the shares of the Common Stock in issuable upon such conversion unless either the name Debenture evidencing the principal amount is delivered to the Company as provided above, or names in which Lender wishes such certificate or certificates to be issued. If within fourteen (14) days of the Conversion Date, Lender is unable to deliver this Note, Lender shall notify Borrower or its transfer agent Holder notifies the Company that such Note Debenture(s) has been lost, stolen or destroyed and shall deliver to Borrower an acknowledgement that the obligations evidenced by this Note, shall have been upon the Conversion Date be deemed fully satisfied, and, if requested by Borrower, Lender shall execute promptly executes an agreement reasonably satisfactory to Borrower the Company to indemnify Borrower the Company from any loss incurred by it in connection with inability such lost, stolen or destroyed Xxxxxxxxx(s). Within three (3) Trading Days ("T+3") after delivery to the Company of Lender such Conversion Notice, the Company shall issue and deliver to deliver such NoteHolder of Debenture(s) at the address of the Holder, or to its designee, a certificate or certificates for the number of shares of Common Stock to which the Holder shall be entitled as aforesaid, together with a calculation of the Conversion Rate and a Debenture or Debentures for the principal amount of Debentures not submitted for conversion. The date on which the Conversion Notice is given (the "Holder Conversion Date") shall be deemed to be the date the Company received by facsimile the Conversion Notice duly executed by the Holder, and the Holder entitled to receive the shares of Common Stock issuable upon such conversion shall be treated for all purposes as the record holder or holders of such shares of Common Stock at the close of business on the Holder Conversion Date. In lieu of delivering physical certificates representing the Common Shares issuable upon conversion of Debentures or the Warrant Shares (as defined in the Purchase Agreement) deliverable upon exercise of Warrants (as defined in the Purchase Agreement), provided the Company's transfer agent is participating in the Depository Trust Company ("DTC") Fast Automated Securities Transfer ("FAST") program, upon request of the Holder, the Company shall use its best efforts to cause its transfer agent to electronically transmit the Common Shares and Warrant Shares issuable upon conversion or exercise of Debentures or Warrants to the Holder, by crediting the account of Xxxxxx's prime broker with DTC through its Deposit Withdrawal Agent Commission ("DWAC") system. The time periods for delivery described above shall apply to the electronic transmittals through the DWAC system. The parties agree to coordinate with DTC to accomplish this objective. The conversions pursuant to Sections 5 and 6 shall be deemed to have been made immediately prior to the close of business on the Holder Conversion Date. The person or persons entitled to receive the Common Shares issuable upon such conversion shall be treated for all purposes as the record holder or holders of such Common Shares at the close of business on the Holder Conversion Date.

Mechanics of Conversion. At any time Provided the Purchaser has notified the Company of the Purchaser's intention to sell the Note Shares and the Note Shares are included in an effective registration statement or are otherwise exempt from registration when sold: (i) upon the date hereofconversion of the Note or part thereof, Lender may the Company shall, at its option elect own cost and expense, take all necessary action (including the issuance of an opinion of counsel reasonably acceptable to convert all (but not less than allthe Purchaser following a request by the Purchaser) of to assure that the outstanding Principal Amount and unpaid accrued interest thereon as of such date into Company's transfer agent shall issue shares of the BorrowerCompany's Common Stock, $0.001 par value per share Stock in the name of the Purchaser (or its nominee) or such other persons as designated by the Purchaser in accordance with Section 9.1(b) hereof and in such denominations to be specified representing the number of Note Shares issuable upon such conversion; and (ii) the Company warrants that no instructions other than these instructions have been or will be given to the transfer agent of the Company's Common Stock and that after the Effectiveness Date (as defined in the respective Registration Rights Agreement) the Note Shares issued will be freely transferable subject to the prospectus delivery requirements of the Securities Act and the provisions of this Section 6Agreement, and will not contain a legend restricting the resale or transferability of the Note Shares. Purchaser will give notice of its decision to exercise its right to convert the Note or part thereof by telecopying or otherwise delivering an executed and completed notice of the number of shares to be converted to the Company (the "Notice of Conversion"). The Lender Purchaser will not be required to surrender the Note until the Purchaser receives a credit to the account of the Purchaser's prime broker through the DWAC system (as defined below), representing the Note Shares or until the Note has been fully satisfied. Each date on which a Notice of Conversion is telecopied or delivered to the Company in accordance with the provisions hereof shall give at least 15 days prior notice be deemed a "Conversion Date." Pursuant to Borrower the terms of the Notice of Conversion, the Company will issue instructions to the transfer agent accompanied by an opinion of counsel within one (1) business day of the date on which such conversion is of the delivery to be effectuated the Company of the Notice of Conversion and shall cause the transfer agent to transmit the certificates representing the Conversion Shares to the Purchaser by crediting the account of the Purchaser's prime broker with the Depository Trust Company (such date, "DTC") through its Deposit Withdrawal Agent Commission ("DWAC") system within three (3) business days after receipt by the Company of the Notice of Conversion (the "Conversion Delivery Date"). The Company understands that a delay in the delivery of the Note Shares in the form required pursuant to Section 9 hereof beyond the Delivery Date could result in economic loss to the Purchaser. In the event that the Company fails to direct its transfer agent to deliver the Note Shares to the Purchaser via the DWAC system within the time frame set forth in Section 9.1(b) above and the Note Shares are not delivered to the Purchaser by the Delivery Date, as compensation to the Purchaser for such loss, the Company agrees to pay late payments to the Purchaser for late issuance of the Note Shares in the form required pursuant to Section 9 hereof upon conversion of the Note in the amount equal to the greater of: (i) $500 per business day after the Delivery Date; or (ii) the Purchaser's actual damages from such delayed delivery. Notwithstanding the foregoing, the Company will not owe the Purchaser any late payments if the delay in the delivery of the Note Shares beyond the Delivery Date is solely out of the control of the Company and the Company is actively trying to cure the cause of the delay. The Company shall pay any payments incurred under this Section in immediately available funds upon demand and, in the case of actual damages, accompanied by reasonable documentation of the amount of such damages. Such documentation shall show the number of shares of Common Stock the Purchaser is forced to purchase (in an open market transaction) which Lender the Purchaser anticipated receiving upon such conversion, and shall be entitled upon such conversion shall be determined calculated as the amount by dividing which (xA) the outstanding Principal Amount and unpaid accrued Purchaser's total purchase price (including customary brokerage commissions, if any) for the shares of Common Stock so purchased exceeds (B) the aggregate principal and/or interest thereon as amount of the Note, for which such Conversion Date by $0.035 (the "Conversion Price") On the Conversion Date, the outstanding Principal Amount and unpaid accrued interest xxxxxxn shall be converted automatically into the Common Stock without further action by the Lender and whether Notice was not timely honored. Nothing contained herein or not this Note has been surrendered in any document referred to Borrower herein or its transfer agent, and Lender delivered in connection herewith shall be deemed to be establish or require the shareholder payment of record as a rate of interest or other charges in excess of the Conversion Date with respect maximum permitted by applicable law. In the event that the rate of interest or dividends required to be paid or other charges hereunder exceed the maximum amount permitted by such law, any payments in excess of such maximum shall be credited against amounts owed by the Company to a Purchaser and thus refunded to the Common Stock. Within fourteen (14) days subsequent to the Conversion Date Lender shall surrender this Note to Borrower or its transfer agent, duly marked cancelled and, in exchange therefor, Lender shall receive from Borrower share certificates evidencing the Common Stock in the name or names in which Lender wishes such certificate or certificates to be issued. If within fourteen (14) days of the Conversion Date, Lender is unable to deliver this Note, Lender shall notify Borrower or its transfer agent that such Note has been lost, stolen or destroyed and shall deliver to Borrower an acknowledgement that the obligations evidenced by this Note, shall have been upon the Conversion Date be deemed fully satisfied, and, if requested by Borrower, Lender shall execute an agreement reasonably satisfactory to Borrower to indemnify Borrower from any loss incurred by it in connection with inability of Lender to deliver such NoteCompany.

Mechanics of Conversion. At any time from the date hereof, Lender may at its option elect In order to convert all this Debenture (but not less than allin whole or in part) of the outstanding Principal Amount and unpaid accrued interest thereon as of such date into full shares of the Borrower's Common Stock, $0.001 par value per share in accordance with the Holder shall surrender this Section 6. The Lender Debenture, duly endorsed, by either overnight courier or 2-day courier, to the principal office of the Company, and shall give at least 15 days prior written notice to Borrower in the form of the date on which such conversion is to be effectuated (such date, the "Conversion Date"). The number of shares of Common Stock to which Lender shall be entitled upon such conversion shall be determined by dividing (x) the outstanding Principal Amount and unpaid accrued interest thereon as of the Conversion Date by $0.035 EXHIBIT 1 hereto (the "Conversion PriceNotice") On by facsimile (with the Conversion Dateoriginal of such notice forwarded with the foregoing courier) to the Company at such office that the Holder elects to convert the principal amount (plus accrued but unpaid interest and default payments) specified therein, the outstanding Principal Amount which such notice and unpaid accrued interest xxxxxxn election shall be converted automatically into revocable by the Holder at any time prior to its receipt of the Common Stock without further action by upon conversion; PROVIDED, HOWEVER, that the Lender and whether or Company shall not this Note has been surrendered be obligated to Borrower or its transfer agent, and Lender shall be deemed to be the shareholder of record as of the Conversion Date with respect to the Common Stock. Within fourteen (14) days subsequent to the Conversion Date Lender shall surrender this Note to Borrower or its transfer agent, duly marked cancelled and, in exchange therefor, Lender shall receive from Borrower share issue certificates evidencing the shares of the Common Stock in issuable upon such conversion unless either the name Debenture evidencing the principal amount is delivered to the Company as provided above, or names in which Lender wishes such certificate or certificates to be issued. If within fourteen (14) days of the Conversion Date, Lender is unable to deliver this Note, Lender shall notify Borrower or its transfer agent Holder notifies the Company that such Note has Debenture(s) have been lost, stolen or destroyed and shall deliver to Borrower an acknowledgement that the obligations evidenced by this Note, shall have been upon the Conversion Date be deemed fully satisfied, and, if requested by Borrower, Lender shall execute promptly executes an agreement reasonably satisfactory to Borrower the Company to indemnify Borrower the Company from any loss incurred by it in connection with inability such lost, stolen or destroyed Debentures. The Company shall issue and deliver within T+3 after delivery to the Company of Lender such Conversion Notice, to deliver such NoteHolder of Debenture(s) at the address of the Holder, or to its designee, a certificate or certificates for the number of shares of Common Stock to which the Holder shall be entitled as aforesaid, together with a calculation of the Conversion Rate and a Debenture or Debentures for the principal amount of Debentures not submitted for conversion. The date on which the Conversion Notice is given (the "Holder Conversion Date") shall be deemed to be the date the Company received by facsimile the Conversion Notice, and the person or persons entitled to receive the shares of Common Stock issuable upon such conversion shall be treated for all purposes as the record holder or holders of such shares of Common Stock on such date. In lieu of delivering physical certificates representing the Common Shares issuable upon conversion of Debentures or the Warrant Shares (as defined in the Purchase Agreement) deliverable upon exercise of Warrants (as defined in the Purchase Agreement), provided the Company's transfer agent is participating in the Depository Trust Company ("DTC") Fast Automated Securities Transfer ("FAST") program, upon request of the holder, the Company shall use its best efforts to cause its transfer agent to electronically transmit the Common Shares and Warrant Shares issuable upon conversion or exercise to the Holder, by crediting the account of Holder's prime broker with DTC through its Deposit Withdrawal Agent Commission ("DWAC") system. The time periods for delivery described above shall apply to the electronic transmittals through the DWAC system. The parties agree to coordinate with DTC to accomplish this objective. The conversions pursuant to Sections 5 and 6 shall be deemed to have been made immediately prior to the close of business on the Holder Conversion Date. The person or persons entitled to receive the Common Shares issuable upon such conversion shall be treated for all purposes as the record holder or holders of such Common Shares at the close of business on the Holder Conversion Date.

Mechanics of Conversion. At any time from the date hereof, Lender may at its option elect In order to convert all (but not less than all) shares of the outstanding Principal Amount and unpaid accrued interest thereon as of such date Series B Preferred Stock into shares of the Borrower's Common Stock, $0.001 par value per share in accordance with this Section 6. The Lender the holder of shares of Series B Preferred Stock shall give at least 15 days prior notice to Borrower (i) fax a copy of the date on fully executed notice of conversion in the form attached hereto ("Notice of Conversion") to the Corporation at its principal office and to the transfer agent for the Common Stock that such holder elects to convert the same, which such conversion is notice shall specify the number of shares of Series B Preferred Stock to be effectuated converted and shall contain a calculation of the Conversion Rate (such datetogether with a copy of the first page of each certificate to be converted) prior to 5:00 p.m., New York City time (the "Conversion DateNotice Deadline")) on the date of conversion specified on the Notice of Conversion and (ii) surrender the original certificate or certificates for the shares of Series B Preferred Stock to be converted, duly endorsed, and deliver the original Notice of Conversion by either overnight courier or two-day courier, to the principal office of the Corporation or the office of the transfer agent for the Common Stock; provided, however, that the Corporation shall not be obligated to issue certificates evidencing the shares of Common Stock issuable upon such conversion unless the certificates evidencing such shares of Series B Preferred Stock are delivered to the Corporation or its transfer agent as provided above. Upon receipt by the Corporation of evidence of the loss, theft, destruction or mutilation of any certificate representing shares of Series B Preferred Stock, and (in the case of loss, theft or destruction) of indemnity or security reasonably satisfactory to the Corporation, and upon surrender and cancellation of any certificate representing shares of Series B Preferred Stock, if mutilated, the Corporation shall execute and deliver a new certificate of like tenor and date. No fractional shares of Common Stock shall be issued upon conversion of the Series B Preferred Stock. In lieu of any fractional share to which the holder of shares of Series B Preferred Stock would otherwise be entitled, the Corporation shall pay cash to such holder in an amount equal to such fraction multiplied by the Conversion Price then in effect. In the case of a dispute as to the calculation of the Conversion Rate, the Corporation's calculation shall be deemed conclusive absent manifest error. The Corporation shall use all reasonable efforts to issue and deliver within seven (7) business days after delivery to the Corporation of such certificates, or after such agreement and indemnification, to such holder of Series B Preferred Stock at the address of the holder on the books of the Corporation, a certificate or certificates for the number of shares of Common Stock to which Lender the holder shall be entitled upon such as aforesaid. The date on which conversion shall be determined by dividing (x) the outstanding Principal Amount and unpaid accrued interest thereon as of the Conversion Date by $0.035 occurs (the "Conversion PriceDate of Conversion") On the Conversion Date, the outstanding Principal Amount and unpaid accrued interest xxxxxxn shall be converted automatically into the Common Stock without further action by the Lender and whether or not this Note has been surrendered to Borrower or its transfer agent, and Lender shall be deemed to be the shareholder date set forth in such Notice of record as Conversion, provided (i) that the advance copy of the Notice of Conversion Date with respect is faxed to the Common StockCorporation before 5:00 p.m., New York City time, on the Date of Conversion, and (ii) that the original stock certificates representing the shares of Series B Preferred Stock to be converted are received by the Corporation or the transfer agent within two (2) business days thereafter. Within fourteen (14) days subsequent The person or persons entitled to receive the Conversion Date Lender shares of Series B Preferred Stock issuable upon such conversion shall surrender this Note to Borrower be treated for all purposes as the record holder or its transfer agent, duly marked cancelled and, in exchange therefor, Lender shall receive from Borrower share certificates evidencing the holders of such shares of Common Stock in on such date. If the name or names in which Lender wishes such certificate or original certificates representing the shares of Series B Preferred Stock to be issued. If converted are not received by the Corporation or the transfer agent within fourteen two (142) business days after the Date of Conversion or if the facsimile of the Notice of Conversion Date, Lender is unable to deliver this Note, Lender shall notify Borrower not received by the Corporation or its transfer agent that such Note has been lost, stolen or destroyed and shall deliver prior to Borrower an acknowledgement that the obligations evidenced by this Note, shall have been upon the Conversion Date Notice Deadline, the Notice of Conversion, at the Corporation's option, may be deemed fully satisfieddeclared null and void. Following any conversion of shares of Series B Preferred Stock, and, if requested by Borrower, Lender such shares of Series B Preferred Stock shall execute an agreement reasonably satisfactory to Borrower to indemnify Borrower from any loss incurred by it in connection with inability of Lender to deliver such Noteno longer be outstanding.

Mechanics of Conversion. At any time from the date hereof, Lender may at its option elect In order to convert all the Loan (but not less than allin whole or in part) of the outstanding Principal Amount and unpaid accrued interest thereon as of such date into full shares of the Borrower's Common Stock, $0.001 par value per share in accordance with this Section 6. The the Lender (i) shall give at least 15 days prior written notice to Borrower in the form of the date on which such conversion is to be effectuated (such date, the "Conversion Date"). The number of shares of Common Stock to which Lender shall be entitled upon such conversion shall be determined by dividing (x) the outstanding Principal Amount and unpaid accrued interest thereon as of the Conversion Date by $0.035 Exhibit C hereto (the "Conversion PriceNotice") On by facsimile to the Conversion DateBorrower that the Lender elects to convert the principal amount (plus accrued but unpaid interest and default payments) specified therein, the outstanding Principal Amount which such notice and unpaid accrued interest xxxxxxn election shall be converted automatically into irrevocable (other than as described below), and (ii) as soon as practicable after such notice, shall surrender the Note, duly endorsed, by either overnight courier or 2-day courier, to the principal office of the Borrower; provided, however, that the Borrower shall not be obligated to issue certificates evidencing the shares of the Common Stock without further action by issuable upon such conversion unless either the Note evidencing the principal amount is delivered to the Borrower as provided above, or the Lender and whether or not this Note has been surrendered to notifies the Borrower or its transfer agent, and Lender shall be deemed to be the shareholder of record as of the Conversion Date with respect to the Common Stock. Within fourteen (14) days subsequent to the Conversion Date Lender shall surrender this Note to Borrower or its transfer agent, duly marked cancelled and, in exchange therefor, Lender shall receive from Borrower share certificates evidencing the Common Stock in the name or names in which Lender wishes such certificate or certificates to be issued. If within fourteen (14) days of the Conversion Date, Lender is unable to deliver this Note, Lender shall notify Borrower or its transfer agent that such Note has Note(s) have been lost, stolen or destroyed and shall deliver to Borrower an acknowledgement that the obligations evidenced by this Note, shall have been upon the Conversion Date be deemed fully satisfied, and, if requested by Borrower, Lender shall execute promptly executes an agreement reasonably satisfactory to the Borrower to indemnify the Borrower from any loss incurred by it in connection with inability such lost, stolen or destroyed Notes. If Lender is converting less than the maximum number of shares it may convert hereunder, the Borrower shall reissue the Note with the appropriate remaining principal amount as soon as practicable after the Borrower shall have received the Lender's surrendered Note. The Company shall issue and deliver within three (3) business days of the delivery to the Borrower of such Conversion Notice at the address of the Lender, or to its designee, a certificate or certificates for the number of shares of Common Stock to which the Lender shall be entitled as aforesaid, together with a Note or Notes for the principal amount of Notes not submitted for conversion. In the event that Lender or its designee has not received such certificate or certificates within ten (10) calendar days of the Borrower’s receipt of the Conversion Notice, the Lender may, in addition to deliver any other rights or remedies it may have, revoke its Conversion Notice. The conversion pursuant to this Sections 2.7 shall be deemed to have been made immediately prior to the close of business on the Conversion Date. The person or persons entitled to receive the Common Shares issuable upon such Noteconversion shall be treated for all purposes as the record holder of the Note or Notes being converted at the close of business on the Conversion Date.

Mechanics of Conversion. At any time from the date hereof, Lender may at its option elect In order to convert all this Debenture (but not less than allin whole or in part) of the outstanding Principal Amount and unpaid accrued interest thereon as of such date into full shares of the Borrower's Common Stock, $0.001 par value per share in accordance with this Section 6. The Lender the Holder (i) shall give at least 15 days prior written notice to Borrower in the form of the date on which such conversion is to be effectuated (such date, the "Conversion Date"). The number of shares of Common Stock to which Lender shall be entitled upon such conversion shall be determined by dividing (x) the outstanding Principal Amount and unpaid accrued interest thereon as of the Conversion Date by $0.035 Exhibit 2 hereto (the "Conversion PriceNotice") On by facsimile to the Conversion DateCompany at such office that the Holder elects to convert the principal amount (plus accrued but unpaid interest and delay payments) specified therein, the outstanding Principal Amount which such notice and unpaid accrued interest xxxxxxn election shall be converted automatically into revocable by the Holder at any time prior to its receipt of the Common Stock without further action by the Lender and whether or not this Note has been surrendered to Borrower or its transfer agentupon conversion, and Lender shall be deemed to be (ii) if the shareholder of record entire Outstanding Principal Amount is being converted, as of the Conversion Date with respect to the Common Stock. Within fourteen (14) days subsequent to the Conversion Date Lender soon as practicable after such notice, shall surrender this Note to Borrower or its transfer agentDebenture, duly marked cancelled andendorsed, in exchange thereforby either overnight courier or 2-day courier, Lender to the principal office of the Company; provided, however, that the Company shall receive from Borrower share not be obligated to issue certificates evidencing the shares of the Common Stock in issuable upon such conversion (where the name entire Outstanding Principal Amount is being converted) unless either the Debenture evidencing the principal amount is delivered to the Company as provided above, or names in which Lender wishes such certificate or certificates to be issued. If within fourteen (14) days of the Conversion Date, Lender is unable to deliver this Note, Lender shall notify Borrower or its transfer agent Holder notifies the Company that such Note has Debenture(s) have been lost, stolen or destroyed and shall deliver to Borrower an acknowledgement that the obligations evidenced by this Note, shall have been upon the Conversion Date be deemed fully satisfied, and, if requested by Borrower, Lender shall execute promptly executes an agreement reasonably satisfactory to Borrower the Company to indemnify Borrower the Company from any loss incurred by it in connection with inability such lost, stolen or destroyed Debentures. The Holder shall not be required to physically surrender this Debenture to the Company unless the full Outstanding Principal Amount represented by this Debenture is being converted. The Holder and the Company shall maintain records showing the Outstanding Principal Amount so converted and the dates of Lender such conversions or shall use such other method, reasonably satisfactory to the Holder and the Company, so as not to require physical surrender of this Debenture upon each such conversion. In the event of any dispute or discrepancy, such records of the Company shall be controlling and determinative in the absence of manifest error. Notwithstanding the foregoing, if this Debenture is converted as aforesaid, the Holder may not transfer this Debenture unless the Holder first physically surrenders this Debenture to the Company, whereupon the Company will forthwith issue and deliver upon the order of the Holder a new Debenture of like tenor, registered as the Holder may request, representing in the aggregate the remaining Outstanding Principal Amount represented by this Debenture. The Holder and any assignee, by acceptance of this Debenture or a new Debenture, acknowledge and agree that, by reason of the provisions of this paragraph, following conversion of any portion of this Debenture, the Outstanding Principal Amount represented by this Debenture may be less than the Outstanding Principal Amount and the accrued interest set forth on the face hereof. The Company shall issue and deliver within three Trading Days of the delivery to the Company of such NoteConversion Notice, to such Holder of Debenture(s) at the address of the Holder, or to its designee, a certificate or certificates for the number of shares of Common Stock to which the Holder shall be entitled as aforesaid, together with a calculation of the Conversion Rate and a Debenture or Debentures for the principal amount of Debentures not submitted for conversion. The date on which the Conversion Notice is given (the "Holder Conversion Date") shall be deemed to be the date the Company received by facsimile the Conversion Notice, and the person or persons entitled to receive the shares of Common Stock issuable upon such conversion shall be treated for all purposes as the record holder or holders of such shares of Common Stock on such date. In the event that such Holder or its designee has not received such certificate or certificates within ten (10) calendar days of the Company's receipt of the Conversion Notice, the Holder may, in addition to any other rights or remedies it may have, revoke its Conversion Notice. In lieu of delivering physical certificates representing the Common Shares issuable upon conversion of Debentures or the Warrant Shares (as defined in the Purchase Agreement) deliverable upon exercise of Warrants (as defined in the Purchase Agreement), provided the Company's transfer agent is participating in the Depository Trust Company ("DTC") Fast Automated Securities Transfer ("FAST") program, upon request of the holder, the Company shall use its best efforts to cause its transfer agent to electronically transmit the Common Shares and Warrant Shares issuable upon conversion or exercise to the Holder, by crediting the account of Xxxxxx's prime broker with DTC through its Deposit Withdrawal Agent Commission ("DWAC") system. The time periods for delivery described above shall apply to the electronic transmittals through the DWAC system. The parties agree to coordinate with DTC to accomplish this objective. The conversions pursuant to Sections 5 shall be deemed to have been made immediately prior to the close of business on the Holder Conversion Date. The person or persons entitled to receive the Common Shares issuable upon such conversion shall be treated for all purposes as the record holder or holders of such Common Shares at the close of business on the Holder Conversion Date.

Mechanics of Conversion. At any time from the date hereof, Lender may at its option elect In order to convert all this Debenture (but not less than allin ----------------------- whole or in part) of the outstanding Principal Amount and unpaid accrued interest thereon as of such date into full shares of the Borrower's Common Stock, $0.001 par value per share in accordance with this Section 6. The Lender the Holder (i) shall give at least 15 days prior written notice to Borrower in the form of the date on which such conversion is to be effectuated (such date, the "Conversion Date"). The number of shares of Common Stock to which Lender shall be entitled upon such conversion shall be determined by dividing (x) the outstanding Principal Amount and unpaid accrued interest thereon as of the Conversion Date by $0.035 Exhibit 2 hereto (the "Conversion PriceNotice") On by facsimile to the Conversion DateCompany at the Company's principal office that the Holder elects to convert the principal amount plus accrued but unpaid interest and Delay Payments (as defined in the Registration Rights Agreement) specified therein, the outstanding Principal Amount which such notice and unpaid accrued interest xxxxxxn election shall be converted automatically into irrevocable by the Holder unless the Common Stock without further action by shall not have been delivered within five Trading Days of the Lender and whether or not this Note has been surrendered date the Conversion Notice is delivered to Borrower or its transfer agentthe Company, and Lender shall be deemed to be (ii) if the shareholder of record entire Outstanding Principal Amount is being converted, as of the Conversion Date with respect to the Common Stock. Within fourteen (14) days subsequent to the Conversion Date Lender soon as practicable after such notice, shall surrender this Note to Borrower or its transfer agentDebenture, duly marked cancelled andendorsed, in exchange thereforby either overnight courier or 2-day courier, Lender to the principal office of the Company; provided, however, that the Company shall receive from Borrower share not be obligated to issue certificates -------- ------- evidencing the shares of the Common Stock in issuable upon such conversion (where the name entire Outstanding Principal Amount is being converted) unless either the Debenture evidencing the principal amount is delivered to the Company as provided above, or names in which Lender wishes such certificate or certificates to be issued. If within fourteen (14) days of the Conversion Date, Lender is unable to deliver this Note, Lender shall notify Borrower or its transfer agent Holder notifies the Company that such Note has Debenture(s) have been lost, stolen or destroyed and shall deliver to Borrower an acknowledgement that the obligations evidenced by this Note, shall have been upon the Conversion Date be deemed fully satisfied, and, if requested by Borrower, Lender shall execute promptly executes an agreement reasonably satisfactory to Borrower the Company to indemnify Borrower the Company from any loss incurred by it in connection with inability such lost, stolen or destroyed Xxxxxxxxx(s). The Holder shall not be required to physically surrender this Debenture to the Company unless the full Outstanding Principal Amount represented by this Debenture is being converted. The Holder and the Company shall maintain records showing the Outstanding Principal Amount so converted and the dates of Lender such conversions or shall use such other method, reasonably satisfactory to the Holder and the Company, so as not to require physical surrender of this Debenture upon each such conversion. In the event of any dispute or discrepancy, such records of the Company shall be controlling and determinative in the absence of manifest error. Notwithstanding the foregoing, if this Debenture is converted as aforesaid, the Holder may not transfer this Debenture unless the Holder first physically surrenders this Debenture to the Company, whereupon the Company will forthwith issue and deliver upon the order of the Holder a new Debenture of like tenor, registered as the Holder may request, representing in the aggregate the remaining Outstanding Principal Xxxxxx represented by this Debenture. The Holder and any assignee, by acceptance of this Debenture or a new Debenture, acknowledge and agree that, by reason of the provisions of this paragraph, following conversion of any portion of this Debenture, the Outstanding Principal Amount represented by this Debenture may be less than the Outstanding Principal Amount and the accrued interest set forth on the face hereof. The Company shall issue and deliver within three Trading Days of the delivery to the Company of such NoteConversion Notice, to such Holder of Debenture(s) at the address of the Holder, or to its designee, a certificate or certificates for the number of shares of Common Stock to which the Holder shall be entitled as aforesaid, together with a calculation of the Conversion Rate and, if the Debenture has been surrendered and is being converted in part only, a Debenture or Debentures for the principal amount of Debentures not submitted for conversion. The date on which the Conversion Notice is given (the "Holder Conversion Date") shall be deemed to be the date the Company received by facsimile the Conversion Notice provided that if not received by 5:00 p.m. on such date, the Holder Conversion Date shall be deemed to be the next Trading Day. In the event that such Holder or its designee has not received such certificate or certificates within five (5) calendar days of the Company's receipt of the Conversion Notice, the Holder may, in addition to any other rights or remedies it may have, revoke its Conversion Notice.

Mechanics of Conversion. At (a) Not later than three (3) Trading Days after any time from Conversion Date (the date hereof“Delivery Date”), Lender the Maker or its designated transfer agent, as applicable, shall issue and deliver to the Holder or, at the request of the Holder (provided that a registration statement under the Securities Act providing for the resale of the Common Stock to which the Holder shall be entitled is then in effect or such shares may at its option elect be sold without the requirement to convert all (but not less than allbe in compliance with Rule 144(c)(1) of the outstanding Principal Amount Securities Act and unpaid accrued interest thereon as of such date into shares otherwise without restriction or limitation pursuant to Rule 144 of the Borrower's Common StockSecurities Act), $0.001 par value per share to the Depository Trust Company (“DTC”) account on the Holder’s behalf via the Deposit Withdrawal Agent Commission System (“DWAC”) as specified in accordance with this Section 6. The Lender shall give at least 15 days prior notice to Borrower the Conversion Notice, registered in the name of the date on which such conversion is to be effectuated (such dateHolder or its designee, the "Conversion Date"). The number of shares of Common Stock to which Lender the Holder shall be entitled upon such conversion shall be determined by dividing (x) entitled. Notwithstanding the outstanding Principal Amount and unpaid accrued interest thereon as of foregoing to the Conversion Date by $0.035 (the "Conversion Price") On the Conversion Datecontrary, the outstanding Principal Amount and unpaid accrued interest xxxxxxn shall be converted automatically into the Common Stock without further action by the Lender and whether or not this Note has been surrendered to Borrower or its transfer agent, and Lender shall be deemed to be the shareholder of record as of the Conversion Date with respect to the Common Stock. Within fourteen (14) days subsequent to the Conversion Date Lender shall surrender this Note to Borrower or its transfer agent, duly marked cancelled and, in exchange therefor, Lender shall receive from Borrower share certificates evidencing the Common Stock in the name or names in which Lender wishes such certificate or certificates to be issued. If within fourteen (14) days of the Conversion Date, Lender is unable to deliver this Note, Lender shall notify Borrower Maker or its transfer agent that shall only be obligated to issue and deliver the shares to DTC on a Holder’s behalf via DWAC if (i) such Note has been lostshares may be issued without restrictive legends and (ii) the Maker and the transfer agent are participating in DTC through the DWAC system. If all of the conditions set forth in clauses (i) and (ii) above are not satisfied, stolen the Maker or destroyed and its designated transfer agent, as the case may be, shall deliver to Borrower an acknowledgement that physical certificates representing the obligations evidenced by number of shares of Common Stock being acquired upon the conversion of this Note. If in the case of any Conversion Notice, any shares of Common Stock to which the Holder is entitled to receive thereunder are not delivered to or as directed by the Holder by the Delivery Date, the Holder shall have been upon be entitled by written notice to the Conversion Date Maker at any time on or before its receipt of such shares of Common Stock thereafter, to rescind such conversion, in which event the Maker shall immediately return this Note tendered for conversion, whereupon the Maker and the Holder shall each be deemed fully satisfiedrestored to their respective positions immediately prior to the delivery of such notice of revocation, and, if requested by Borrower, Lender except that any amounts described in Sections 3.03(b) and (c) shall execute an agreement reasonably satisfactory be payable through the date notice of rescission is given to Borrower to indemnify Borrower from any loss incurred by it in connection with inability of Lender to deliver such Notethe Maker.

Mechanics of Conversion. At any time Provided the Purchaser has notified the Company of the Purchaser's intention to sell the Note Shares and the Note Shares are included in an effective registration statement or are otherwise exempt from registration when sold: (i) upon the date hereofconversion of the Note or part thereof, Lender may the Company shall, at its option elect own cost and expense, take all necessary action (including the issuance of an opinion of counsel reasonably acceptable to convert all (but not less than allthe Purchaser following a request by the Purchaser) of to assure that the outstanding Principal Amount and unpaid accrued interest thereon as of such date into Company's transfer agent shall issue shares of the BorrowerCompany's Common Stock, $0.001 par value per share Stock in the name of the Purchaser (or its nominee) or such other persons as designated by the Purchaser in accordance with Section 9.1(b) hereof and in such denominations to be specified representing the number of Note Shares issuable upon such conversion; and (ii) the Company warrants that no instructions other than these instructions have been or will be given to the transfer agent of the Company's Common Stock and that after the Effectiveness Date (as defined in the Registration Rights Agreement) the Note Shares issued will be freely transferable subject to the prospectus delivery requirements of the Securities Act and the provisions of this Section 6Agreement, and will not contain a legend restricting the resale or transferability of the Note Shares. The Lender Purchaser will give notice of its decision to exercise its right to convert the Note or part thereof by telecopying or otherwise delivering an executed and completed notice of the number of shares to be converted to the Company (the "Notice of Conversion"). The Purchaser will not be required to surrender the Note until the Purchaser receives a credit to the account of the Purchaser's prime broker through the DWAC system (as defined below), representing the Note Shares or until the Note has been fully satisfied. Each date on which a Notice of Conversion is telecopied or delivered to the Company in accordance with the provisions hereof shall give at least 15 days prior notice be deemed a "Conversion Date." Pursuant to Borrower the terms of the Notice of Conversion, the Company will issue instructions to the transfer agent accompanied by an opinion of counsel within one (1) business day of the date on which such conversion is of the delivery to be effectuated the Company of the Notice of Conversion and shall cause the transfer agent to transmit the certificates representing the Conversion Shares to the Holder by crediting the account of the Purchaser's prime broker with the Depository Trust Company (such date, "DTC") through its Deposit Withdrawal Agent Commission ("DWAC") system within three (3) business days after receipt by the Company of the Notice of Conversion (the "Conversion Delivery Date"). The Company understands that a delay in the delivery of the Note Shares in the form required pursuant to Section 9 hereof beyond the Delivery Date could result in economic loss to the Purchaser. In the event that the Company fails to direct its transfer agent to deliver the Note Shares to the Purchaser via the DWAC system within the time frame set forth in Section 9.1(b) above and the Note Shares are not delivered to the Purchaser by the Delivery Date, as compensation to the Purchaser for such loss, the Company agrees to pay late payments to the Purchaser for late issuance of the Note Shares in the form required pursuant to Section 9 hereof upon conversion of the Note in an amount equal to the Purchaser's actual damages from such delayed delivery. The Company shall pay any payments incurred under this Section in immediately available funds upon written demand, accompanied by reasonable documentation of the amount of such damages. Such documentation shall show the number of shares of Common Stock the Purchaser is forced to purchase (in an open market transaction) which Lender the Purchaser anticipated receiving upon such conversion, and shall be entitled upon such conversion shall be determined calculated as the amount by dividing which (xA) the outstanding Principal Amount and unpaid accrued Purchaser's total purchase price (including customary brokerage commissions, if any) for the shares of Common Stock so purchased exceeds (B) the aggregate principal and/or interest thereon as amount of the Conversion Date by $0.035 (the "Conversion Price") On the Conversion Date, the outstanding Principal Amount and unpaid accrued interest xxxxxxn shall be converted automatically into the Common Stock without further action by the Lender and whether or not this Note has been surrendered to Borrower or its transfer agent, and Lender shall be deemed to be the shareholder of record as of the Conversion Date with respect to the Common Stock. Within fourteen (14) days subsequent to the Conversion Date Lender shall surrender this Note to Borrower or its transfer agent, duly marked cancelled and, in exchange therefor, Lender shall receive from Borrower share certificates evidencing the Common Stock in the name or names in which Lender wishes such certificate or certificates to be issued. If within fourteen (14) days of the Conversion Date, Lender is unable to deliver this Note, Lender shall notify Borrower or its transfer agent that for which such Note has been lost, stolen or destroyed and shall deliver to Borrower an acknowledgement that the obligations evidenced by this Note, shall have been upon the Conversion Date be deemed fully satisfied, and, if requested by Borrower, Lender shall execute an agreement reasonably satisfactory to Borrower to indemnify Borrower from any loss incurred by it in connection with inability of Lender to deliver such NoteNotice was not timely honored.

Mechanics of Conversion. At No fractional shares of Common Stock shall be issued upon any time from conversion of the date hereofprincipal indebtedness evidenced by the provisions of this Debenture. In lieu of any fractional shares to which Holder would otherwise be entitled, Lender may at its option elect Borrower shall pay Holder cash in the amount equal to the Conversion Price for such fractional shares. Before Holder shall be entitled to convert all (but not less than all) the indebtedness evidenced by the provisions of the outstanding Principal Amount and unpaid accrued interest thereon as of such date this Debenture into shares of Common Stock and to receive certificates therefor, Xxxxxx shall surrender the original copy of this Debenture, duly endorsed and cancelled, at the office of Borrower's Common Stock, $0.001 par value per share in accordance with this Section 6. The Lender and shall give at least 15 thirty (30) days prior written notice to Borrower at such office that Holder elects to so convert the principal indebtedness evidenced by the provisions of this Debenture, which date shall be the conversion date on which (“Conversion Date”); and provided, further, however, that Borrower shall not be obligated to issue certificates evidencing the shares of Common Stock issuable unless the original endorsed and cancelled original copy of this Debenture is either delivered to Borrower, as specified above, or Holder notifies Borrower that such conversion is original copy of this Debenture has been lost, stolen or destroyed and executes an agreement to indemnify Borrower from any loss incurred by Borrower in connection with such original copy of this Debenture. Borrower shall, as soon as practicable after such delivery of an original copy of this Debenture, or such agreement and indemnification, issue and deliver or cause to be effectuated (issued and delivered at such dateoffice to Holder, a certificate or certificates for the "Conversion Date"). The number of shares of Common Stock to which Lender Holder shall be entitled upon such conversion shall be determined by dividing (x) the outstanding Principal Amount and unpaid accrued interest thereon as of the Conversion Date by $0.035 (the "Conversion Price") On the Conversion Date, the outstanding Principal Amount and unpaid accrued interest xxxxxxn shall be converted automatically into the Common Stock without further action by the Lender and whether or not this Note has been surrendered a check payable to Borrower or its transfer agent, and Lender shall be deemed to be the shareholder of record as of the Conversion Date with respect to the Common Stock. Within fourteen (14) days subsequent to the Conversion Date Lender shall surrender this Note to Borrower or its transfer agent, duly marked cancelled and, in exchange therefor, Lender shall receive from Borrower share certificates evidencing the Common Stock Holder in the name or names in which Lender wishes such certificate or certificates to be issued. If within fourteen (14) days amount of the Conversion Date, Lender is unable to deliver this Note, Lender shall notify Borrower or its transfer agent that such Note has been lost, stolen or destroyed and shall deliver to Borrower an acknowledgement that the obligations evidenced by this Note, shall have been upon the Conversion Date be deemed fully satisfied, and, if requested by Borrower, Lender shall execute an agreement reasonably satisfactory to Borrower to indemnify Borrower from any loss incurred by it in connection with inability of Lender to deliver such Note.cash amounts

Mechanics of Conversion. At any time from (i) Such right of conversion shall be exercised by the date hereofNoteholder by delivering to the Issuer a conversion notice in the form attached hereto as EXHIBIT A (the "CONVERSION NOTICE"), Lender may at its option elect to convert all appropriately completed and duly signed, and by surrender not later than two (but not less than all2) business days thereafter of this Note. The Conversion Notice shall also contain a statement of the outstanding Principal Amount name or names (with addresses and unpaid accrued interest thereon as of such date into shares tax identification or social security numbers) in which the certificate or certificates for Preferred Stock and Warrants shall be issued, if other than the name in which this Note are registered. Promptly after the receipt of the Borrower's Common StockConversion Notice, $0.001 par value per share in accordance with this Section 6. The Lender the Issuer shall give at least 15 days prior notice to Borrower of the date on which such conversion is issue and deliver, or cause to be effectuated (delivered, to the Noteholder or such dateNoteholder's nominee, a certificate or certificates for the "Conversion Date"). The number of shares of Common Preferred Stock to which Lender shall be entitled and Warrants issuable upon the such conversion. Such conversion shall be determined by dividing (x) the outstanding Principal Amount and unpaid accrued interest thereon as of the Conversion Date by $0.035 (the "Conversion Price") On the Conversion Date, the outstanding Principal Amount and unpaid accrued interest xxxxxxn shall be converted automatically into the Common Stock without further action by the Lender and whether or not this Note has been surrendered to Borrower or its transfer agent, and Lender shall be deemed to be the shareholder of record have been effected as of the close of business on the date of receipt by the Issuer of the Conversion Date with respect Notice (the "CONVERSION DATE"), and the person or persons entitled to receive the Common Stockshares of Preferred Stock and Warrants issuable upon conversion shall be treated for all purposes as the holder or holders of record of such shares of Preferred Stock and Warrants as of the close of business on the Conversion Date. Within fourteen (14) days subsequent If the Noteholder has not converted the entire amount of the Note pursuant to the Conversion Date Lender Notice, then the Company shall surrender this execute and deliver to the Noteholder a new Note instrument identical in terms to Borrower or its transfer agent, duly marked cancelled and, in exchange therefor, Lender shall receive from Borrower share certificates evidencing the Common Stock in the name or names in which Lender wishes such certificate or certificates to be issued. If within fourteen (14) days of the Conversion Date, Lender is unable to deliver this Note, Lender shall notify Borrower or its transfer agent that such Note has been lost, stolen or destroyed and shall deliver to Borrower an acknowledgement that but with a principal amount reflecting the obligations evidenced by unconverted portion of this Note, . The new Note instrument shall have been upon be delivered subject to the Conversion Date be deemed fully satisfied, and, if requested by Borrower, Lender shall execute an agreement reasonably satisfactory to Borrower to indemnify Borrower from any loss incurred by it in connection with inability of Lender to deliver such Notesame timing terms as the certificates for the Preferred Stock and Warrants.

Mechanics of Conversion. At any time from the date hereof, Lender may at its option elect In order to convert all this Debenture (but not less than allin whole or in part) of the outstanding Principal Amount and unpaid accrued interest thereon as of such date into full shares of the Borrower's Common Stock, $0.001 par value per share in accordance with the Holder shall surrender this Section 6. The Lender Debenture, duly endorsed, by either overnight courier or 2-day courier, to the principal office of the Company, and shall give at least 15 days prior written notice to Borrower in the form of the date on which such conversion is to be effectuated (such date, the "Conversion Date"). The number of shares of Common Stock to which Lender shall be entitled upon such conversion shall be determined by dividing (x) the outstanding Principal Amount and unpaid accrued interest thereon as of the Conversion Date by $0.035 EXHIBIT 1 hereto (the "Conversion PriceNotice") On by facsimile (with the Conversion Dateoriginal of such notice forwarded with the foregoing courier) to the Company at such office that the Holder elects t convert the principal amount (plus accrued but unpaid interest and default payments) specified therein, the outstanding Principal Amount which such notice and unpaid accrued interest xxxxxxn election shall be converted automatically into revocable by the Holder at any time prior to its receipt of the Common Stock without further action by upon conversion; provided, however, that the Lender and whether or Company shall not this Note has been surrendered be obligated to Borrower or its transfer agent, and Lender shall be deemed to be the shareholder of record as of the Conversion Date with respect to the Common Stock. Within fourteen (14) days subsequent to the Conversion Date Lender shall surrender this Note to Borrower or its transfer agent, duly marked cancelled and, in exchange therefor, Lender shall receive from Borrower share issue certificates evidencing the shares of the Common Stock in issuable upon such conversion unless either the name Debenture evidencing the principal amount is delivered to the Company as provided above, or names in which Lender wishes such certificate or certificates to be issued. If within fourteen (14) days of the Conversion Date, Lender is unable to deliver this Note, Lender shall notify Borrower or its transfer agent Holde notifies the Company that such Note Debenture(s) has been lost, stolen or destroyed and shall deliver to Borrower an acknowledgement that the obligations evidenced by this Note, shall have been upon the Conversion Date be deemed fully satisfied, and, if requested by Borrower, Lender shall execute promptly executes an agreement reasonably satisfactory to Borrower the Company to indemnify Borrower the Company from any loss incurred by it in connection with inability such lost, stolen or destroyed Xxxxxxxxx(s). Within three (3) Trading Days ("T+3") after delivery to the Company of Lender such Conversion Notice, the Company shall issue and deliver to deliver such NoteHolder of Debenture(s) at the address of the Holder, or to its designee, a certificate or certificates for the number of shares of Common Stock to which the Holder shall be entitled as aforesaid, together with a calculation of the Conversion Rate and a Debenture or Debentures for the principal amount of Debentures not submitted for conversion. The date on which the Conversion Notice is given (the "Holder Conversion Date") shall be deemed to be the date the Company received by facsimile the Conversion Notice duly executed by the Holder, and the Holder entitled to receive the shares of Common Stock issuable upon such conversion shall be treated for all purposes as the record holder or holders of such shares of Common Stock at the close of business on the Holder Conversion Date. In lieu of delivering physical certificates representing the Common Shares issuable upon conversion of Debentures or the Warrant Shares (as defined in the Purchase Agreement) deliverable upon exercise of Warrants (as defined in the Purchase Agreement), provided the Company's transfer agent is participating in the Depository Trust Company ("DTC") Fast Automated Securities Transfer ("FAST") program, upon request of the Holder, the Company shall use its best efforts to cause its transfer agent to electronically transmit the Common Shares and Warrant Shares issuable upon conversion or exercise of Debentures or Warrants to the Holder, by crediting the account of Xxxxxx's prime broker with DTC through its Deposit Withdrawal Agent Commission ("DWAC") system. The time periods for delivery described above shall apply to the electronic transmittals through the DWAC system. The parties agree to coordinate with DTC to accomplish this objective. The conversions pursuant to Sections 5 and 6 shall be deemed to have been made immediately prior to the close of business on the Holder Conversion Date. The person or persons entitled to receive the Common Shares issuable upon such conversion shall be treated for all purposes as the record holder or holders of such Common Shares at the close of business on the Holder Conversion Date.

Mechanics of Conversion. At any time from To convert this Note (or a portion thereof) the date hereof, Lender may at its option elect Holder must (i) complete and sign the Notice of Conversion set forth as Exhibit A to convert all this Note (but not less than allthe "Notice of Conversion") and deliver the Notice of Conversion to the outstanding Principal Amount Company as herein provided and unpaid accrued interest thereon as of such date into shares of the Borrower's Common Stock, $0.001 par value per share in accordance with this Section 6. The Lender shall give at least 15 days (ii) on or prior notice to Borrower of the date on which such conversion delivery of Common Stock is required to be effectuated made hereunder, (such datex) deliver this Note, duly endorsed, to the "Company and (y) pay any transfer or similar tax if required. The Holder shall surrender this Note and the Notice of Conversion Date"to the Company (with an advance copy by facsimile of the Notice of Conversion). The number date on which Notice of shares of Common Stock to which Lender shall be entitled upon such conversion shall be determined by dividing (x) the outstanding Principal Amount and unpaid accrued interest thereon as of the Conversion Date by $0.035 is given (the "Conversion PriceDate of Conversion") On the Conversion Date, the outstanding Principal Amount and unpaid accrued interest xxxxxxn shall be converted automatically into the Common Stock without further action by the Lender and whether or not this Note has been surrendered to Borrower or its transfer agent, and Lender shall be deemed to be the shareholder date of record as receipt by the Company of the Conversion Date with respect facsimile of the Notice of Conversion, provided that this Note is received by the Company within five (5) business days thereafter. The Company shall not be obligated to cause the transfer agent for the Common Stock. Within fourteen Stock (14the "Transfer Agent") days subsequent to the Conversion Date Lender shall surrender this Note to Borrower or its transfer agent, duly marked cancelled and, in exchange therefor, Lender shall receive from Borrower share issue certificates evidencing the shares of Common Stock in issuable upon such conversion unless either this Note has been received by the name or names in which Lender wishes such certificate or certificates to be issued. If within fourteen (14) days of the Conversion DateCompany or, Lender is unable to deliver if this Note, Lender shall notify Borrower or its transfer agent that such Note has been lost, stolen or destroyed and shall deliver to Borrower an acknowledgement that destroyed, the obligations evidenced by this Note, shall have been upon the Conversion Date be deemed fully satisfied, and, if requested by Borrower, Lender shall execute Holder executes an agreement reasonably satisfactory to Borrower the Company to indemnify Borrower the Company from any loss incurred by it in connection with inability this Note. XXXXXX ELECTRONICS CORPORATION 6% CONVERTIBLE NOTE DUE JUNE 10, 2000 The Company shall cause the Transfer Agent to issue and deliver within two (2) business days after delivery to the Company of Lender this Note to the Holder of this Note at the address of the Holder on the books of the Company, as contemplated by the Securities Purchase Agreement or as otherwise directed pursuant to the Notice of Conversion, a certificate or certificates for the number of shares of Common Stock to which such Holder shall be entitled as aforesaid. The person or persons entitled to receive the shares of Common Stock issuable upon such conversion shall be treated for all purposes as the record holder or holders of such shares of Common Stock on such date. Notwithstanding that the Holder is required to deliver this Note, duly endorsed, within five (5) business days after the Date of Conversion, if this Note is not received by the Company within ten (10) business days after the Date of Conversion, the Notice of Conversion shall become null and void. Following conversion of this Note, or a portion thereof, the principal, together with the interest payable on this Note, or portion thereof so converted, will be deemed paid in full and satisfied, and such NoteNote or portion thereof will no longer be outstanding. In the event this Note is converted in part, the Company will issue to the Holder a new Note in a principal amount equal to the portion of this Note not converted.

Mechanics of Conversion. At any time from the date hereof, Lender may at its option elect In order to convert all the Loan (but not less than allin whole or in part) of the outstanding Principal Amount and unpaid accrued interest thereon as of such date into full shares of the Borrower's Common Stock, $0.001 par value per share in accordance with this Section 6. The the Lender (i) shall give at least 15 days prior written notice to Borrower in the form of the date on which such conversion is to be effectuated (such date, the "Conversion Date"). The number of shares of Common Stock to which Lender shall be entitled upon such conversion shall be determined by dividing (x) the outstanding Principal Amount and unpaid accrued interest thereon as of the Conversion Date by $0.035 Exhibit C hereto (the "Conversion PriceNotice") On by facsimile to the Conversion DateBorrower that the Lender elects to convert the principal amount (plus accrued but unpaid interest and default payments) specified therein, the outstanding Principal Amount which such notice and unpaid accrued interest xxxxxxn election shall be converted automatically into irrevocable (other than as described below), and (ii) as soon as practicable after such notice, shall surrender the Note, duly endorsed, by either overnight courier or 2-day courier, to the principal office of the Borrower; provided, however, that the Borrower shall not be obligated to issue certificates evidencing the shares of the Common Stock without further action by issuable upon such conversion unless either the Note evidencing the principal amount is delivered to the Borrower as provided above, or the Lender and whether or not this Note has been surrendered to notifies the Borrower or its transfer agent, and Lender shall be deemed to be the shareholder of record as of the Conversion Date with respect to the Common Stock. Within fourteen (14) days subsequent to the Conversion Date Lender shall surrender this Note to Borrower or its transfer agent, duly marked cancelled and, in exchange therefor, Lender shall receive from Borrower share certificates evidencing the Common Stock in the name or names in which Lender wishes such certificate or certificates to be issued. If within fourteen (14) days of the Conversion Date, Lender is unable to deliver this Note, Lender shall notify Borrower or its transfer agent that such Note has Note(s) have been lost, stolen or destroyed and shall deliver to Borrower an acknowledgement that the obligations evidenced by this Note, shall have been upon the Conversion Date be deemed fully satisfied, and, if requested by Borrower, Lender shall execute promptly executes an agreement reasonably satisfactory to the Borrower to indemnify the Borrower from any loss incurred by it in connection with inability such lost, stolen or destroyed Notes. If Lender is converting less than the maximum number of shares it may convert hereunder, the Borrower shall reissue the Note with the appropriate remaining principal amount as soon as practicable after the Borrower shall have received the Lender's surrendered Note. The Company shall issue and deliver within three (3) business days of the delivery to the Borrower of such Conversion Notice at the address of the Lender, or to its designee, a certificate or certificates for the number of shares of Common Stock to which the Lender shall be entitled as aforesaid, together with a Note or Notes for the principal amount of Notes not submitted for conversion. In the event that Lender or its designee has not received such certificate or certificates within ten (10) calendar days of the Borrower’s receipt of the Conversion Notice, the Lender may, in addition to deliver any other rights or remedies it may have, revoke its Conversion Notice. The conversion pursuant to this Sections 2. 5 shall be deemed to have been made immediately prior to the close of business on the Conversion Date. The person or persons entitled to receive the Common Shares issuable upon such Noteconversion shall be treated for all purposes as the record holder of the Note or Notes being converted at the close of business on the Conversion Date.

Mechanics of Conversion. At any time from the date hereof, Lender may at its option elect In order to convert all this Debenture (but not less than allin whole or in part) of the outstanding Principal Amount and unpaid accrued interest thereon as of such date into full shares of the Borrower's Common Stock, $0.001 par value per share the Holder shall surrender this Debenture, duly endorsed, by either overnight courier or 2-day courier, to the Company, and, in accordance with this case of any conversion pursuant to Section 6. The Lender 5(a)(i), shall give at least 15 days prior written notice to Borrower in the form of the date on which such conversion is to be effectuated (such date, the "Conversion Date"). The number of shares of Common Stock to which Lender shall be entitled upon such conversion shall be determined by dividing (x) the outstanding Principal Amount and unpaid accrued interest thereon as of the Conversion Date by $0.035 Exhibit B hereto (the "Conversion PriceNotice") On by facsimile (with the Conversion Dateoriginal of such notice forwarded with the foregoing courier) to the Company that the Holder elects to convert the principal amount of this Debenture specified therein, the outstanding Principal Amount which notice and unpaid accrued interest xxxxxxn election shall be converted automatically into irrevocable by the Holder; provided, however, that the Company shall not be obligated to issue certificates evidencing the shares of the Common Stock without further action by issuable upon conversion unless (i) this Debenture evidencing the Lender and whether or not principal amount of this Note has been surrendered to Borrower or its transfer agent, and Lender shall be deemed Debenture to be the shareholder of record as of the Conversion Date with respect converted is delivered to the Common Stock. Within fourteen (14) days subsequent to Company as provided above, or the Conversion Date Lender shall surrender Holder notifies the Company that this Note to Borrower or its transfer agent, duly marked cancelled and, in exchange therefor, Lender shall receive from Borrower share certificates evidencing the Common Stock in the name or names in which Lender wishes such certificate or certificates to be issued. If within fourteen (14) days of the Conversion Date, Lender is unable to deliver this Note, Lender shall notify Borrower or its transfer agent that such Note Debenture has been lost, stolen or destroyed and shall deliver to Borrower an acknowledgement that the obligations evidenced by this Note, shall have been upon the Conversion Date be deemed fully satisfied, and, if requested by Borrower, Lender shall execute promptly executes an agreement reasonably satisfactory to Borrower the Company to indemnify Borrower the Company from any loss incurred by it in connection with inability this Debenture, and (ii) the Company is provided with a replacement Debenture which represents the portion of Lender the principal amount of this Debenture which is not being submitted for conversion; and provided, further, 7 - 7 - that each Conversion Notice shall provide for the Holder's election to convert either (A) at least $50,000 of the Outstanding Principal Amount of this Debenture, or (B) if such Outstanding Principal Amount shall then be less than $50,000, the entire Outstanding Principal Amount. Upon receipt of any Conversion Notice, the Company shall immediately verify the Holder's calculation of the Conversion Rate. In the case of any Conversion Notice given by the Holder or in the case of automatic conversion pursuant to Paragraph 5(a)(ii), the Company shall use its best efforts to issue and deliver within two (2) business days after delivery to the Company of the Debenture, or after receipt of such Noteagreement and indemnification, to such Holder or to its designee, a certificate or certificates for the number of shares of Common Stock to which the Holder shall be entitled, together with a Debenture for the principal amount not submitted for conversion, the form of which shall have been provided to the Company prior to the Company's delivery of a certificate or certificates for the number of shares of Common Stock to which the Holder shall be entitled. The date on which the Conversion Notice is given (the "Holder Conversion Date") shall be deemed to be the date the Company received by facsimile the Conversion Notice. The person or persons entitled to receive the shares of Common Stock issuable upon conversion shall be treated for all purposes as the record holder or holders of such shares of Common Stock on the Holder Conversion Date or on the Maturity Date, as the case may be.

Mechanics of Conversion. At any time from To convert this Debenture (or a portion thereof) the date hereof, Lender may at its option elect Holder must (i) complete and sign the Notice of Conversion set forth as Exhibit A to convert all this Debenture (but not less than allthe "Notice of Conversion") and deliver the Notice of Conversion to the outstanding Principal Amount Company as herein provided and unpaid accrued interest thereon as of such date into shares of the Borrower's Common Stock, $0.001 par value per share in accordance with this Section 6. The Lender shall give at least 15 days (ii) on or prior notice to Borrower of the date on which such conversion delivery of Common Stock is required to be effectuated made hereunder, (such datex) deliver this Debenture, duly endorsed, to the "Company and (y) pay any transfer or similar tax if required. The Holder shall surrender this Debenture and the Notice of Conversion Date"to the Company (with an advance copy by facsimile of the Notice of Conversion). The number date on which Notice of shares of Common Stock to which Lender shall be entitled upon such conversion shall be determined by dividing (x) the outstanding Principal Amount and unpaid accrued interest thereon as of the Conversion Date by $0.035 is given (the "Date of Conversion Price") On the Conversion Date, the outstanding Principal Amount and unpaid accrued interest xxxxxxn shall be converted automatically into the Common Stock without further action by the Lender and whether or not this Note has been surrendered to Borrower or its transfer agent, and Lender shall be deemed to be the shareholder date of record as receipt by the Company of the Conversion Date with respect facsimile of the Notice of Conversion, provided that this Debenture is received by the Company within five (5) business days thereafter. The Company shall not be obligated to cause the transfer agent for the Common Stock. Within fourteen Stock (14the "Transfer Agent") days subsequent to the Conversion Date Lender shall surrender this Note to Borrower or its transfer agent, duly marked cancelled and, in exchange therefor, Lender shall receive from Borrower share issue certificates evidencing the shares of Common Stock in issuable upon such conversion unless either this Debenture has been received by the name or names in which Lender wishes such certificate or certificates to be issued. If within fourteen (14) days of the Conversion DateCompany or, Lender is unable to deliver if this Note, Lender shall notify Borrower or its transfer agent that such Note Debenture has been lost, stolen or destroyed and shall deliver to Borrower an acknowledgement that destroyed, the obligations evidenced by this Note, shall have been upon the Conversion Date be deemed fully satisfied, and, if requested by Borrower, Lender shall execute Holder executes an agreement reasonably satisfactory to Borrower the Company to indemnify Borrower the Company from any loss incurred by it in connection with inability this Debenture. The Company shall cause the Transfer Agent to issue and deliver within two (2) business days after delivery to the Company of Lender this Debenture to the Holder of this Debenture at the address of the Holder on the books of the Company or as otherwise directed pursuant to the Notice of Conversion, a certificate or certificates for the number of shares of Common Stock to which such Holder shall be entitled as aforesaid. The person or persons entitled to receive the shares of Common Stock issuable upon such conversion shall be treated for all purposes as the record holder or holders of such shares of Common Stock on such date. Notwithstanding that the Holder is required to deliver such Note.this Debenture, duly endorsed, within five (5) business days after the Date of Conversion, if this Debenture is not received by the Company within ten 15W

Mechanics of Conversion. At (i) In order to exercise its rights pursuant to this subsection 4.1, the Holder shall deliver written notice to the Company in the form of EXHIBIT 1 to this Note stating that such Holder (A) owns this Note free and clear of any time from the date hereof, Lender may at its option elect Liens and (B) elects to convert all (but not less than all) or part of the outstanding Principal Face Amount of this Note, plus any accrued but unpaid Interest in respect of such amount. Such notice shall state the outstanding Face Amount of this Note, plus any accrued but unpaid Interest in respect of such amount, which the Holder seeks to convert. The date contained in the notice shall be the conversion date, unless such date is delayed while conversion is restricted pursuant to subsection 4.1(a)(ii) or subsection 4.1(a)(iii) (such later date, the "CONVERSION DATE") and unpaid accrued interest thereon the Holder shall be deemed to own the underlying Applicable Shares free and clear of all Liens as of such date into shares and shall be treated for all purposes as the record holder of such Applicable Shares at the Borrower's Common Stock, $0.001 par value per share in accordance with this Section 6. The Lender shall give at least 15 days prior notice to Borrower close of business on the date on which such conversion is to be effectuated (such date, the "Conversion Date"). The number of shares of Common Stock to which Lender shall be entitled upon such conversion shall be determined by dividing As soon as practicable (xbut no later than three business days) the outstanding Principal Amount and unpaid accrued interest thereon as of the Conversion Date by $0.035 (the "Conversion Price") On after the Conversion Date, the outstanding Principal Amount Company shall issue and unpaid accrued interest xxxxxxn shall be converted automatically into the Common Stock without further action by the Lender and whether or not this Note has been surrendered to Borrower or its transfer agent, and Lender shall be deemed to be the shareholder of record as of the Conversion Date with respect deliver to the Common Stock. Within fourteen (14) days subsequent Holder a certificate or certificates for the number of Applicable Shares to which the Conversion Date Lender Holder is entitled and the Holder shall surrender this Note to Borrower or its transfer agent, duly marked cancelled the Company in exchange for delivery of such certificates by the Company and, in exchange thereforthe case of a partial redemption, Lender a new Note with a Face Amount equal to the unconverted portion of the Note shall receive from Borrower share certificates evidencing be delivered to the Common Stock in Holder with the name or names in which Lender wishes such certificates. A notice of conversion by a Holder under this subsection 4.1(c)(i) shall be irrevocable until the later of (x) 30 days after its delivery and (y) the Conversion Date set forth therein and thereafter shall be revocable at any time upon delivery by the Holder of a written notice of revocation to the Company if a certificate or certificates for the number of Applicable Shares to be issued. If within fourteen (14) days of which the Conversion Date, Lender Holder is unable entitled with respect to deliver this Note, Lender shall notify Borrower or its transfer agent that the conversion specified in such Note notice has not been lost, stolen or destroyed issued and shall deliver delivered to Borrower an acknowledgement that the obligations evidenced by this Note, shall have been upon the Conversion Date be deemed fully satisfied, and, if requested by Borrower, Lender shall execute an agreement reasonably satisfactory to Borrower to indemnify Borrower from any loss incurred by it in connection with inability of Lender to deliver such NoteHolder.

Mechanics of Conversion. At The conversion of this Note shall be conducted in the following manner: upon any time from conversion of this Note (or any portion hereof): (i) the date hereofHolder shall deliver a completed and executed Notice of Conversion attached hereto as Exhibit A specifying, Lender may at its option elect inter alia, the principal amount of this Note that is to convert all be converted and shall surrender and deliver this Note (but not less than allduly endorsed and together with the Sister Vesting Warrant (as hereinafter defined)) of to the outstanding Principal Amount and unpaid accrued interest thereon as of Company’s office or such date into shares of other address that the Borrower's Common Stock, $0.001 par value per share in accordance with this Section 6. The Lender Company shall give at least 15 days prior notice to Borrower of designate (the date on which the Holder so delivers such conversion Notice of Conversion and so surrenders and delivers this Note and Vesting Warrant or the next following Business Day if such date is not a Business Day is hereinafter referred to be effectuated as the “Conversion Date”); (such dateii) in exchange for this Note as so surrendered, the "Conversion Date"). The Company shall prepare and deliver irrevocable instructions addressed to the Company’s transfer agent to issue to the Holder a number of shares Shares equal to the aggregate of Common Stock to which Lender shall be entitled upon such conversion shall be determined by dividing (xA) (I) the outstanding Principal Amount and principal amount of this Note then being converted divided by (II) the then applicable Conversion Price plus (B) (I) the amount of unpaid interest that has accrued interest thereon as on such principal amount through, but not including, the Conversion Date, divided by (II) the greater of the then applicable Conversion Date Price and such other price as may be required by $0.035 applicable law or stock exchange rule without requiring shareholder approval (which greater price, if determined in Canadian Dollars, shall be converted into United States Dollars by multiplying the "number of Canadian Dollars by the Deemed Currency Conversion Price"Rate), which Shares shall be delivered to the Holder within five (5) On Business Days following the Conversion Date; and (iv) in the event this Note is converted only in part, and not in full, within five (5) Business Days following the Conversion Date, the outstanding Principal Amount Company shall issue and unpaid accrued interest xxxxxxn shall be converted automatically into the Common Stock without further action by the Lender and whether or not this Note has been surrendered to Borrower or its transfer agent, and Lender shall be deemed to be the shareholder of record as of the Conversion Date with respect provide to the Common Stock. Within fourteen (14) days subsequent to the Conversion Date Lender shall surrender this Note to Borrower or its transfer agentHolder an 8% Unsecured Convertible Redeemable Note, duly marked cancelled and, in exchange therefor, Lender shall receive from Borrower share certificates evidencing the Common Stock substantially in the name or names in which Lender wishes such certificate or certificates to be issued. If within fourteen (14) days form of the Conversion Date, Lender is unable to deliver this Note, Lender shall notify Borrower or its transfer agent in a principal amount equal to the unconverted principal amount of this Note (any such new 8% Unsecured Convertible Redeemable Note, a “Replacement Note”) and (B) a new Vesting Warrant that such Note is substantially in the form of the Sister Vesting Warrant that has been lost, stolen or destroyed and shall deliver to Borrower an acknowledgement that the obligations evidenced by this Note, shall have been upon the Conversion Date be deemed fully satisfied, and, if requested by Borrower, Lender shall execute an agreement reasonably satisfactory to Borrower to indemnify Borrower from any loss incurred by it in connection with inability of Lender to deliver such Note.surrendered

Mechanics of Conversion. At any time from the date hereof, Lender may at its option elect In order to convert all this Debenture (but not less than allin whole or in part) of the outstanding Principal Amount and unpaid accrued interest thereon as of such date into full shares of the Borrower's Common Stock, $0.001 par value per share in accordance with this Section 6. The Lender the Holder (i) shall give written notice in the form of EXHIBIT 1 hereto (the "Conversion Notice") by facsimile to the Company at least 15 days such office that the Holder elects to convert the principal amount (plus accrued but unpaid interest and default payments) specified therein, which such notice and election shall be revocable by the Holder at any time prior notice to Borrower its receipt of the Common Stock upon conversion (the date on which such conversion notice is to be effectuated (such date, given being the "Holder Conversion Date"). The number , and (ii) as soon as practicable after such notice, shall surrender this Debenture, duly endorsed, by either overnight courier or 2-day courier, to the principal office of the Company; provided, however, that the Company shall not be obligated to issue certificates evidencing the shares of the Common Stock to which Lender shall be entitled issuable upon such conversion shall be determined by dividing (x) unless either the outstanding Principal Amount and unpaid accrued interest thereon as of Debenture evidencing the Conversion Date by $0.035 (the "Conversion Price") On the Conversion Date, the outstanding Principal Amount and unpaid accrued interest xxxxxxn shall be converted automatically into the Common Stock without further action by the Lender and whether or not this Note has been surrendered to Borrower or its transfer agent, and Lender shall be deemed to be the shareholder of record as of the Conversion Date with respect principal amount is delivered to the Common Stock. Within fourteen (14) days subsequent to Company as provided above, or the Conversion Date Lender shall surrender this Note to Borrower or its transfer agent, duly marked cancelled and, in exchange therefor, Lender shall receive from Borrower share certificates evidencing Holder notifies the Common Stock in the name or names in which Lender wishes such certificate or certificates to be issued. If within fourteen (14) days of the Conversion Date, Lender is unable to deliver this Note, Lender shall notify Borrower or its transfer agent Company that such Note has Debenture(s) have been lost, stolen or destroyed and shall deliver to Borrower an acknowledgement that the obligations evidenced by this Note, shall have been upon the Conversion Date be deemed fully satisfied, and, if requested by Borrower, Lender shall execute promptly executes an agreement reasonably satisfactory to Borrower the Company to indemnify Borrower the Company from any loss incurred by it in connection with inability such lost, stolen or destroyed Debentures. The Company shall issue and deliver within one business day of Lender the delivery to deliver the Company of such NoteConversion Notice, to such Holder of Debenture(s) at the address of the Holder, or to its designee, a certificate or certificates for the number of shares of Common Stock to which the Holder shall be entitled as aforesaid, together with a calculation of the Conversion Rate and a Debenture or Debentures for the principal amount of Debentures not submitted for conversion. The date on which the Conversion Notice is given (the "Holder Conversion Date") shall be deemed to be the date the Company received by facsimile the Conversion Notice, and the person or persons entitled to receive the shares of Common Stock issuable upon such conversion shall be treated for all purposes as the record holder or holders of such shares of Common Stock on such date.