Common use of Optional Conversion Clause in Contracts

Optional Conversion. At any time on or prior to the Maturity Date each Investor will have the option to convert all or a portion of the entire principal amount of the Notes outstanding into Common Stock immediately upon the Investor’s request; provided, however, that if, at the time of any particular conversion, the Company does not have the number of authorized shares of Common Stock sufficient to allow for such particular conversion as well as the issuance of the maximum amount of Common Stock permitted under the Company’s 2004 Equity Compensation Plan, the Investors may only convert that portion of their Notes outstanding for which the Company has a sufficient number of authorized shares of Common Stock. To the extent multiple Investors request conversion of their Notes on the same date, any limitations on conversion shall be applied on a pro rata basis. In such case, the Investors may request, in writing, that the Company call a special meeting of the stockholders of the Company specifically for the purpose of increasing the number of authorized shares of Common Stock to cover the remaining portion of the Notes outstanding, as well as the maximum issuances contemplated pursuant to the Company’s 2004 Equity Compensation Plan, within 90 calendar days after the Company’s receipt of the Investors’ written request. Notwithstanding the above, the Company shall use its best efforts to increase its number of authorized shares of Common Stock to 100,000,000 or such greater number so as to allow for the full conversion of any outstanding Notes on the earlier of: (1) promptly after the date on which a request for conversion, for which there are not sufficient shares available to effect such conversion, is received by the Company, or (2) the time of the next shareholder meeting. The number of shares of Common Stock that this Note may be converted into shall be determined by dividing the principal amount then outstanding by the Conversion Price at the time of conversion. If the Investor elects to convert this Note on demand, it shall provide the Company with written notice of its election at least one (1) day prior to the date selected for conversion. Upon conversion, the Investor shall deliver to the Company the original of this Note (or a notice to the effect that the original Note has been lost, stolen or destroyed and an agreement reasonably acceptable to the Company whereby the holder agrees to indemnify the Company from any loss incurred by it in connection with this Note). However, upon such conversion of this Note, this Note shall be deemed converted and of no further force and effect, whether or not the Note is delivered for cancellation as set forth in the preceding sentence. If there shall occur a Change of Control, the Company shall give written notice to the Investor at least five (5) days prior to any closing thereof and the Investor’s election to convert this Note shall be conditional upon the consummation thereof.

Optional Conversion. At any time on or prior to the Maturity Date each Investor will have the option to convert all or a portion of the entire principal amount of the Notes outstanding into Common Stock immediately upon the Investor’s request; provided, however, that if, at the time of any particular conversion, the Company does not have the number of authorized shares of Common Stock sufficient to allow for such particular conversion as well as the issuance of the maximum amount of Common Stock permitted under the Company’s 2004 Equity Compensation Planconversion, the Investors may only convert that portion of their Notes outstanding for which the Company has a sufficient number of authorized shares of Common Stock. To the extent multiple Investors Investors, under the Note Purchase Agreement, the 2007 Note Purchase Agreement (as defined in the Note Purchase Agreement), or both, request conversion of their Notes on the same date, any limitations on conversion shall be applied on a pro rata basis. In such case, the Investors may request, in writing, that the Company call a special meeting of the stockholders of the Company specifically for the purpose of increasing the number of authorized shares of Common Stock to cover the remaining portion of the Notes outstanding, as well as the maximum issuances contemplated pursuant to the Company’s 2004 Equity Compensation Plan, within 90 calendar days after the Company’s receipt of the Investors’ written request. Notwithstanding the above, the Company shall use its best efforts to increase its number of authorized shares of Common Stock to 100,000,000 or such greater number so as to allow for the full conversion of any outstanding Notes on the earlier of: (1) promptly after the date on which a request for conversion, for which there are not sufficient shares available to effect such conversion, is received by the Company, or (2) the time of the next shareholder meeting. The number of shares of Common Stock that this Note may be converted into shall be determined by dividing the principal amount then outstanding by the Conversion Price at the time of conversion. If the Investor elects to convert this Note on demand, it shall provide the Company with written notice of its election at least one (1) day prior to the date selected for conversion, by submission of the notice of conversion attached as Exhibit A hereto. Upon conversion, the Investor shall deliver to the Company the original of this Note (or a notice to the effect that the original Note has been lost, stolen or destroyed and an agreement reasonably acceptable to the Company whereby the holder agrees to indemnify the Company from any loss incurred by it in connection with this Note). However, upon such conversion of this Note, this Note shall be deemed converted and of no further force and effect, whether or not the Note is delivered for cancellation as set forth in the preceding sentence. If there shall occur a Change of Control, the Company shall give written notice to the Investor at least five (5) days prior to any closing thereof and the Investor’s election to convert this Note shall be conditional upon the consummation thereof.

Optional Conversion. At Each holder of Preference Shares shall have the right, at its option, at any time on or prior and from time to time, to convert, subject to the Maturity Date each Investor will have terms and provisions of this clause 13, any or all of such holder’s Preference Shares into such number of fully paid and non-assessable Ordinary Shares as is equal to the option to convert all or a portion product of the entire principal amount of the Notes outstanding into Common Stock immediately upon the Investor’s request; provided, however, that if, at the time of any particular conversion, the Company does not have (i) the number of authorized shares Preference Shares being so converted, multiplied by (ii) the quotient of Common Stock sufficient (x) the Accreted Value, divided by (y) the Preference Share Issue Amount, subject to allow adjustment as provided in clause 13(f) below (such price in subclause (y), the “Conversion Price” and such quotient in subclause (ii), the “Conversion Ratio”). At the option of the Company, any accrued and unpaid dividends as of the date of conversion in respect of the Preference Shares being converted shall (i) be added to the Accreted Value, (ii) be paid in cash to the holder of such Preference Shares or (iii) be paid in cash or added to the Accreted Value in any combination thereof. For the avoidance of doubt, for purposes of calculating the Conversion Ratio, the Accreted Value of the Preference Shares that are being converted shall include the amount of any dividends which have been accreted, compounded and added to the Preference Share Issue Amount pursuant to clause (b) of the definition of “Accreted Value” through the last Dividend Payment Date. Such conversion right shall be exercised by the surrender of certificate(s) evidencing the Preference Shares to be converted to the Company at any time during usual business hours at its principal place of business (or such particular conversion as well other office or agency of the Company as the issuance Company may designate by notice in writing to the holders of Preference Shares), accompanied by written notice that the maximum amount of Common Stock permitted under holder elects to convert such Preference Shares and specifying the name or names (with address) in which a certificate or certificates for Ordinary Shares are to be issued and (if so required by the Company’s 2004 Equity Compensation Plan, the Investors may only convert that portion ) by a written instrument or instruments of their Notes outstanding for which transfer in form reasonably satisfactory to the Company has a sufficient number of duly executed by the holder or its duly authorized shares of Common Stocklegal representative and transfer tax stamps or funds therefor, if required pursuant to clause 13(1) below. To the extent multiple Investors request conversion of their Notes on the same date, any limitations on All certificates evidencing Preference Shares surrendered for conversion shall be applied on a pro rata basis. In such case, the Investors may request, in writing, that delivered to the Company call a special meeting of the stockholders of the Company specifically for the purpose of increasing the number of authorized shares of Common Stock to cover the remaining portion of the Notes outstanding, cancellation and cancelled by it. As promptly as well as the maximum issuances contemplated pursuant to the Company’s 2004 Equity Compensation Plan, within 90 calendar days practicable after the Company’s receipt surrender of the Investors’ written request. Notwithstanding the aboveany Preference Shares, the Company shall use its best efforts (subject to increase its compliance with the applicable provisions of federal and state securities Laws) deliver to the holder of such Preference Shares so surrendered, certificate(s) evidencing the number of authorized shares fully paid and non-assessable Ordinary Shares into which such Preference Shares are entitled to be converted. Upon registration in the register of Common Stock to 100,000,000 or such greater number so as to allow for the full conversion of any outstanding Notes on the earlier of: (1) promptly after the date on which a request for conversion, for which there are not sufficient shares available to effect such conversion, is received by the Company, or (2) the time members of the next shareholder meeting. The number of shares of Common Stock that this Note may be converted into Company (which shall be determined by dividing subject to surrender of such share certificates) to reflect the principal amount then outstanding by the Conversion Price at the time of conversion. If the Investor elects to convert this Note on demand, it shall provide the Company with written notice of its election at least one (1) day prior to the date selected for conversion. Upon conversion, the Investor person in whose name any certificate(s) for Ordinary Shares shall deliver to the Company the original of this Note (or a notice to the effect that the original Note has been lost, stolen or destroyed and an agreement reasonably acceptable to the Company whereby the holder agrees to indemnify the Company from any loss incurred by it in connection with this Note). However, be issuable upon such conversion of this Note, this Note shall be deemed converted and the holder of no further force and effectrecord of such Ordinary Shares on such date, whether or notwithstanding that the certificates evidencing such Ordinary Shares shall not the Note is then be actually delivered for cancellation as set forth in the preceding sentence. If there shall occur a Change of Control, the Company shall give written notice to the Investor at least five (5) days prior to any closing thereof and the Investor’s election to convert this Note shall be conditional upon the consummation thereofsuch person.

Optional Conversion. At any time on or prior to the Maturity Date each Investor will The Lender shall have the option right, at his option, to convert all or a any portion of the entire outstanding principal amount of this Note into fully-paid and non-assessable shares of the Notes outstanding into Company’s $0.001 par value per share common stock, (“Common Stock”), at the conversion price of ten cents ($0.10) per share (the “Conversion Price”). The $0.10 Conversion Price shall be modified to the lower of (a) five cents ($0.05) on December 15, 2017 if the separate $146,000 Convertible Promissory Note between the Lender and the Company dated November 2, 2017 is not paid in full on or before December 15, 2017, or (b) the lowest price at which any party purchases Common Stock immediately upon or equivalents directly from the Investor’s request; Company, or the lowest stated or modified conversion price in any Note issued by the Company, or the lowest stated or modified exercise price in any option or warrant to purchase Common Stock issued by the Company (the foregoing a or b being the “Modified Conversion Price”). The Modified Conversion Price shall remain in full force and effect until the Note is fully paid. Upon conversion of the Note, subject to the provisions of Section 2(c) below, the Lender shall be entitled to that number of shares of Common Stock determined by dividing (x) the then outstanding principal amount of this Note by (y) the Conversion Price or the Modified Conversion Price (as the case may be) provided, however, that if, at in no event shall the time Lender be entitled to convert any portion of any particular conversion, this Note in excess of that portion of this Note upon conversion of which the Company does not have sum of (1) the number of authorized shares of Common Stock sufficient to allow for such particular conversion as well as beneficially owned by the issuance of the maximum amount of Common Stock permitted under the Company’s 2004 Equity Compensation PlanLender and his affiliates, the Investors may only convert that portion of their Notes outstanding for which the Company has a sufficient number of authorized shares of Common Stock. To the extent multiple Investors request conversion of their Notes on the same dateif any, any limitations on conversion shall be applied on a pro rata basis. In such case, the Investors may request, in writing, that the Company call a special meeting of the stockholders of the Company specifically for the purpose of increasing and (2) the number of authorized shares of Common Stock to cover issuable upon the remaining conversion of the portion of this Note with respect to which the Notes outstandingdetermination of this proviso is being made, as well as would result in beneficial ownership by the maximum issuances contemplated pursuant to the Company’s 2004 Equity Compensation PlanLender and his affiliates, within 90 calendar days after the Company’s receipt if any, of more than 4.99% of the Investors’ written request. Notwithstanding the above, the Company shall use its best efforts to increase its number of authorized outstanding shares of Common Stock to 100,000,000 or such greater number so as to allow for (the full conversion “Limitation”) without the written permission of any outstanding Notes on the earlier of: (1) promptly after the date on which a request for conversion, for which there are not sufficient shares available to effect such conversion, is received by the Company, which permission the Company may or (2) the time may not grant at its sole discretion. For purposes of the next shareholder meetingproviso in the immediately preceding sentence, beneficial ownership shall be determined in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Regulations 13D-G thereunder. The number of shares of Common Stock that to be issued upon conversion of this Note may be converted into shall be determined by dividing the Conversion Amount by the applicable Conversion Price then in effect on the date specified in the Conversion Notice, (as defined below). In order to exercise this optional conversion privilege, the Lender shall surrender this Note to the Company during usual business hours at the Company’s principal executive office, accompanied by written notice (a “Conversion Notice”) in form satisfactory to the Company that the Lender elects to convert all or any portion of the principal amount then outstanding by the Conversion Price at the time of conversion. If the Investor elects to convert this Note on demand, it shall provide the Company with written notice of its election at least one (1) day prior to the date selected for conversion. Upon conversion, the Investor shall deliver to the Company the original of this Note (or a notice to the effect that the original Note has been lost, stolen or destroyed and an agreement reasonably acceptable to the Company whereby the holder agrees to indemnify the Company from any loss incurred by it in connection with this Note). However, upon such conversion of this Note, this Note . Such notice shall also state the amount to be converted and the name or names (with address) in which the certificate or certificates for shares of Common Stock that shall be deemed converted and of no further force and effect, whether or not the Note is delivered for cancellation as set forth in the preceding sentenceissuable on such conversion shall be issued. If there shall occur a Change of Control, less than the entire principal amount then outstanding is converted the Company shall give written notice to the Investor at least five (5) days prior to any closing thereof and the Investor’s election to convert cancel this Note shall be conditional upon and reissue an identical note in the consummation thereofamount of the remaining principal amount outstanding after any such conversion.

Optional Conversion. At any time on or prior to the Maturity Date each Investor will have the option to convert all or a portion of the entire principal amount of the Notes outstanding into Common Stock immediately upon the Investor’s request; provided, however, that if, at the time of any particular conversion, the Company does not have the number of authorized shares of Common Stock sufficient to allow for such particular conversion as well as the issuance of the maximum amount of Common Stock permitted under the Company’s 2004 Equity Compensation Planconversion, the Investors may only convert that portion of their Notes outstanding for which the Company has a sufficient number of authorized shares of Common Stock. To the extent multiple Investors Investors, under the Note Purchase Agreement, the 2007 Note Purchase Agreement (as defined in the Note Purchase Agreement), or both, request conversion of their Notes on the same date, any limitations on conversion shall be applied on a pro rata basis. In such case, the Investors may request, in writing, that the Company call a special meeting of the stockholders of the Company specifically for the purpose of increasing the number of authorized shares of Common Stock to cover the remaining portion of the Notes outstanding, as well as the maximum issuances contemplated pursuant to the Company’s 2004 Equity Compensation Plan, within 90 calendar days after the Company’s receipt of the Investors’ written request. Notwithstanding the above, the Company shall use its best efforts to increase its number of authorized shares of Common Stock to 100,000,000 or such greater number so as to allow for the full conversion of any outstanding Notes on the earlier of: (1) promptly after the date on which a request for conversion, for which there are not sufficient shares available to effect such conversion, is received by the Company, or (2) the time of the next shareholder meeting. The number of shares of Common Stock that this Note may be converted into shall be determined by dividing the principal amount then outstanding by the Conversion Price at the time of conversion. If the Investor elects to convert this Note on demand, it shall provide the Company with written notice of its election at least one (1) day prior to the date selected for conversion, by submission of the notice of conversion attached as Exhibit A hereto. Upon conversion, the Investor shall deliver to the Company the original of this Note (or a notice to the effect that the original Note has been lost, stolen or destroyed and an agreement reasonably acceptable to acceptableto the Company whereby the holder agrees to indemnify the Company from any loss incurred by it in connection with this Note). However, upon such conversion of this Note, this Note shall be deemed converted and of no further force and effect, whether or not the Note is delivered for cancellation as set forth in the preceding sentence. If there shall occur a Change of Control, the Company shall give written notice to the Investor at least five (5) days prior to any closing thereof and the Investor’s election to convert this Note shall be conditional upon the consummation thereof.

Optional Conversion. At any time In the event that the Charter Amendment has not been filed with the Secretary of State of the State of New York and the Preferred Stock has not been created on or prior to June 30, 1989, any holder of the Maturity Date each Investor will outstanding Notes after that date shall have the option right, at its election, to require the Company to convert all or a any portion of the entire principal amount of and interest on the Notes held by such holder into shares of Common Stock upon application of the then effective Common Stock Conversion Value, by delivering written notice to the Company, which notice shall set forth the date and time for such optional conversion which shall be not less than five (5) days after the date such notice was delivered to the Company (the "Optional Conversion Date"). Within five (5) days of receipt of a notice of conversion, the Company shall send written notice to all other holders of the Notes outstanding into setting forth the identities of the converting holders, the number of shares of Common Stock immediately upon to be issued, and the Investor’s requestOptional Conversion Date. Upon the consummation of an optional conversion specified above, the Notes so converted shall cease to represent any obligation of the Company and shall be converted automatically without any further action by the holders of such Notes and whether or not the Notes are surrendered to the Company; provided, however, that if, at the time of any particular conversion, the Company does shall not have be obligated to issue certificates evidencing the number of authorized shares of Common Stock sufficient issuable upon such conversion or to allow for such particular conversion as well as the issuance of the maximum amount of Common Stock permitted under the Company’s 2004 Equity Compensation Plan, the Investors may only convert that portion of their Notes outstanding for which the Company has a sufficient number of authorized shares of Common Stock. To the extent multiple Investors request conversion of their Notes on the same date, make any limitations on conversion shall be applied on a pro rata basis. In such case, the Investors may request, in writing, that the Company call a special meeting of the stockholders of the Company specifically for the purpose of increasing the number of authorized shares of Common Stock to cover the remaining portion of interest payment unless the Notes outstanding, as well as the maximum issuances contemplated pursuant being converted are either delivered to the Company’s 2004 Equity Compensation Plan, within 90 calendar days after the Company’s receipt of the Investors’ written request. Notwithstanding the above, the Company shall use its best efforts to increase its number of authorized shares of Common Stock to 100,000,000 or such greater number so as to allow for the full conversion of any outstanding Notes on the earlier of: (1) promptly after the date on which a request for conversion, for which there are not sufficient shares available to effect such conversion, is received by the Company, or (2) the time of the next shareholder meeting. The number of shares of Common Stock that this Note may be converted into shall be determined by dividing the principal amount then outstanding by the Conversion Price at the time of conversion. If the Investor elects to convert this Note on demand, it shall provide holder notifies the Company with written notice of its election at least one (1) day prior to the date selected for conversion. Upon conversion, the Investor shall deliver to the Company the original of this Note (or a notice to the effect that the original such Note has been lost, stolen or destroyed and executes an agreement reasonably acceptable satisfactory to the Company whereby the holder agrees to indemnify the Company from any loss incurred by it in connection therewith; provided, however, if any Note of which any Purchaser, its nominee, or any of its partners is the registered holder is lost, stolen or destroyed, the affidavit of an executive officer or general partner of the registered holder setting forth the circumstances with this Noterespect to such loss, theft or destruction shall be accepted as satisfactory evidence thereof, and no indemnification bond or other security shall be required as a condition to the execution and delivery by the Company of such certificates evidencing shares of Common Stock. Upon the consummation of an optional conversion specified above, the holder of the Notes so converted shall surrender the Notes at the office of the Company. Thereupon, there shall be issued and delivered to such holder, a certificate or certificates for the number of shares of Common Stock into which the Notes surrendered were convertible on the Optional Conversion Date, cash in the amount of all accrued and unpaid interest on such Note up to and including the Optional Conversion Date in the case that the holder of a Note does not elect to convert such accrued and unpaid interest into shares of Common Stock, cash, as provided in subsection 1.10(e). However, in respect of any fraction of a share of Common Stock issuable upon such conversion of and any other securities or property to which the holder becomes entitled upon conversion pursuant to this Note, this Note Section 1.10. Such conversion shall be deemed converted to have been effected immediately upon the Optional Conversion Date, and at such time the rights of no further force and effect, whether or not the holder as holder of a Note is delivered for cancellation as set forth in the preceding sentence. If there shall occur a Change of Control, the Company shall give written notice to the Investor at least five (5) days prior to any closing thereof cease and the Investor’s election to convert this Note Person or Persons in whose name or names any certificate or certificates for shares of Common Stock shall be conditional issuable upon such conversion shall be deemed to have become the consummation thereofholder or holders of record of the shares of Common Stock represented thereby.

Optional Conversion. At Each Holder shall have the right, at any time commencing after the issuance, to convert the Stated Value of such shares, as well as accrued but unpaid declared dividends on or prior the Series C Preferred Stock (collectively “Conversion Amount”) into fully paid and non- assessable shares of Common Stock of the Company (“Conversion Shares”). The number of Conversion Shares issuable upon conversion of the Conversion Amount shall equal the Conversion Amount divided by the Conversion Price then in effect. The “Conversion Price” of the Series C Preferred shall be $1.12, subject to adjustment and except as otherwise set forth below. No fractional shares of Common Stock shall be issued upon conversion of Series C Preferred. In lieu of any fractional share to which the holder would otherwise be entitled, the Company shall round up to the Maturity Date each Investor will have the option nearest whole share. In order to convert all Series C Preferred into shares of Common Stock, the Holder shall surrender the certificate or a portion certificates therefor, duly endorsed, to the office of the entire principal amount Company, and shall give written notice to the Company at such office that the Holder elects to convert the same, the number of shares of Series C Preferred so converted and a calculation of the Notes outstanding into Common Stock immediately upon Conversion Price (with an advance copy of the Investor’s requestcertificate(s) and the notice by facsimile); provided, however, that if, at the time of any particular conversion, the Company does shall not have the number of authorized be obligated to issue certificates evidencing shares of Common Stock sufficient to allow for issuable upon such particular conversion as well as the issuance of the maximum amount of Common Stock permitted under the Company’s 2004 Equity Compensation Plan, the Investors may only convert that portion of their Notes outstanding for which the Company has a sufficient number of authorized unless such shares of Common Stock. To the extent multiple Investors request conversion of their Notes on the same date, any limitations on conversion shall be applied on a pro rata basis. In such case, the Investors may request, in writing, that the Company call a special meeting of the stockholders of the Company specifically for the purpose of increasing the number of authorized shares of Common Stock to cover the remaining portion of the Notes outstanding, as well as the maximum issuances contemplated pursuant to the Company’s 2004 Equity Compensation Plan, within 90 calendar days after the Company’s receipt of the Investors’ written request. Notwithstanding the above, the Company shall use its best efforts to increase its number of authorized shares of Common Stock to 100,000,000 or such greater number so as to allow for the full conversion of any outstanding Notes on the earlier of: (1) promptly after the date on which a request for conversion, for which there Series C Preferred are not sufficient shares available to effect such conversion, is received by the Company, or (2) the time of the next shareholder meeting. The number of shares of Common Stock that this Note may be converted into shall be determined by dividing the principal amount then outstanding by the Conversion Price at the time of conversion. If the Investor elects to convert this Note on demand, it shall provide the Company with written notice of its election at least one (1) day prior to the date selected for conversion. Upon conversion, the Investor shall deliver delivered to the Company as provided above, or the original of this Note (Holder notifies the Company or a notice to the effect its transfer agent that the original Note has such certificates have been lost, stolen or destroyed and executes an agreement reasonably acceptable satisfactory to the Company whereby the holder agrees and its transfer agent to indemnify the Company from any loss incurred by it in connection with this Note)such certificates. However, upon Notice of conversion may be given by a Holder at any time during the day up to 5:00 p.m. New York City time and such conversion of this Note, this Note shall be deemed converted and to have been made immediately prior to the close of no further force and effect, whether or not business on the Note date notice of conversion is received by the Company. Within three (3) business days after the notice of conversion is delivered for cancellation as in accordance with the procedures set forth in the preceding sentence. If there shall occur a Change of Controlabove, the Company shall give written notice instruct the transfer agent to issue shares of its Common Stock and to forward the same to the Investor at least five (5) days prior to any closing thereof and the Investor’s election to convert this Note shall be conditional upon the consummation thereofHolder.

Optional Conversion. At Up to One Hundred Fifty Thousand ------------------- Dollars ($150,000) of the principal of this Note shall be convertible at the option of the Holder, at any time on or prior to the Maturity Date each Investor will have Date, into a number of shares of common stock of the option Company, par value $.01 per share (the "Common Stock"), equal to the principal being converted divided by the Conversion Price. The "Conversion Price" shall be $.30; provided that such price shall be adjusted as and to the same extent as the exercise price of the Warrants is adjusted prior to the date of conversion of the shares. In order to exercise the conversion privilege, Holder shall surrender this Note and give written notice to the Company of its election so to convert all or a portion of the entire principal amount of the Notes outstanding into Common Stock immediately upon the Investor’s request; provided, however, that if, at the time of any particular conversionthis Note. Within five (5) business days after such notice is given, the Company does not have shall issue (or cause its transfer agent to issue), and deliver to Holder (i) a certificate or certificates for the number of authorized full shares issuable upon the conversion of this Note registered in the name of Holder in accordance with the provisions of this Section 3 and (ii) a new note, containing the same terms as this Note, for the portion of this Note that is not converted. Each conversion shall be deemed to have been effected on the date on which the conversion notice shall have been given, as aforesaid; and Holder shall be deemed to have become on said date the holder of record of the shares of Common Stock sufficient to allow for issuable upon such particular conversion as well as the issuance of the maximum amount of Common Stock permitted under the Company’s 2004 Equity Compensation Plan, the Investors may only convert that portion of their Notes outstanding for which the Company has a sufficient number of authorized shares of Common Stockconversion. To the extent multiple Investors request conversion of their Notes on the same date, any limitations on conversion shall be applied on a pro rata basis. In such case, the Investors may request, in writing, that the Company call a special meeting of the stockholders of the Company specifically for the purpose of increasing the number of authorized No fractional shares of Common Stock to cover the remaining portion or scrip representing fractional shares shall be issued upon conversion of the Notes outstanding, as well as the maximum issuances contemplated pursuant to the Company’s 2004 Equity Compensation Plan, within 90 calendar days after the Company’s receipt of the Investors’ written requestthis Note. Notwithstanding the above, the Company shall use its best efforts to increase its number of authorized shares If any fractional share of Common Stock to 100,000,000 or such greater number so as to allow for would be issuable upon the full conversion of any outstanding Notes on the earlier of: (1) promptly after the date on which a request for conversion, for which there are not sufficient shares available to effect such conversion, is received by the Company, or (2) the time of the next shareholder meeting. The number of shares of Common Stock that this Note may be converted into shall be determined by dividing the principal amount then outstanding by the Conversion Price at the time of conversion. If the Investor elects to convert this Note on demand, it shall provide the Company with written notice of its election at least one (1) day prior to the date selected for conversion. Upon conversion, the Investor shall deliver to the Company the original of this Note (or a notice to the effect that the original Note has been lost, stolen or destroyed and an agreement reasonably acceptable to the Company whereby the holder agrees to indemnify the Company from any loss incurred by it in connection with this Note). However, upon such conversion of this Note, this Note shall be deemed converted and of no further force and effect, whether or not the Note is delivered for cancellation as set forth in the preceding sentence. If there shall occur a Change of Control, the Company shall give written notice to make an adjustment therefor in cash at the Investor at least five (5) days prior to any closing thereof and the Investor’s election to convert this Note shall be conditional upon the consummation thereofconversion price.

Optional Conversion. At any time on or prior to the Maturity Date each Investor will have while this Bond is outstanding, at the option to convert all or a portion of the entire principal amount of the Notes outstanding Investor in such Investor’s sole discretion, this Bond may be converted, in whole or in part, into Common Stock immediately upon (or preferred stock of the Investor’s requestCompany with the terms and conditions set forth in Annex A; provided, ; however, that ifif the Investor desires to convert to preferred stock, at the time of any particular conversion, the Company does not have the number of authorized shares of Common Stock sufficient to allow for such particular conversion as well as the issuance of the maximum amount of Common Stock permitted under the Company’s 2004 Equity Compensation Plan, the Investors may only convert that portion of their Notes outstanding for which the Company has a sufficient number of authorized shares of Common Stock. To the extent multiple Investors it shall request conversion of their Notes on the same date, any limitations on conversion shall be applied on a pro rata basis. In such case, the Investors may request, in writing, that the Company call a special meeting of the stockholders of obtain Stockholder Approval and the Company specifically for the purpose will use commercially reasonable efforts to do so) (such stock issued upon conversion of increasing the number of authorized shares of Common Stock to cover the remaining portion of the Notes outstanding, as well as the maximum issuances contemplated pursuant to the Company’s 2004 Equity Compensation Plan, within 90 calendar days after the Company’s receipt of the Investors’ written request. Notwithstanding the abovethis Bond, the Company shall use “Conversion Stock”). To exercise its best efforts to increase its number of authorized shares of Common Stock to 100,000,000 or such greater number so as to allow for the full conversion of any outstanding Notes on the earlier of: (1) promptly after the date on which a request for conversion, for which there are not sufficient shares available to effect such conversion, is received by the Company, or (2) the time of the next shareholder meeting. The number of shares of Common Stock that this Note may be converted into shall be determined by dividing the principal amount then outstanding by the Conversion Price at the time of conversion. If the Investor elects to convert this Note on demand, it shall provide the Company with written notice of its election at least one (1) day prior to the date selected for conversion. Upon conversionright, the Investor shall deliver a written notice to the Company Company, specifying the principal amount of this Bond as well as the accrued and unpaid Default Interest, if any, to be converted, together with the original of this Note Bond to be converted (or a notice to the effect that the original Note Bond has been lost, stolen or destroyed and an agreement reasonably acceptable to the Company whereby the holder Investor agrees to indemnify the Company from any loss incurred by it in connection with this NoteBond). However, upon such conversion of If this Note, this Note shall be deemed converted and of no further force and effect, whether or not the Note Bond is delivered surrendered for cancellation as set forth in the preceding sentence. If there shall occur a Change of Controlpartial conversion, the Company shall give written execute and deliver to the Investor a new Bond in an aggregate principal amount equal to the unconverted portion of the surrendered Bond, without payment of any service charge borne by the Investor. The Company shall, as soon as practicable thereafter, issue and deliver to the Investor a certificate or certificates (or a notice of issuance of uncertificated shares, if applicable) for the number of shares to which the Investor shall be entitled upon such conversion. Any conversion of this Bond pursuant to this Section 5(c) shall be deemed to have been made on the date when the Investor’s notice referred to the previous provisions and the original Bond to be converted (or a notice to the effect that the original Bond has been lost, stolen or destroyed and an agreement acceptable to the Company whereby the Investor at least five (5agrees to indemnify the Company from any loss incurred by it in connection with this Bond) days prior are delivered to any closing thereof the Company and on and after such date the Investor’s election Persons entitled to convert this Note receive the shares issuable upon such conversion shall be conditional upon treated for all purposes as the consummation thereofrecord holder of such shares.

Optional Conversion. At The Holder shall have the right from and after the date which is ninety (90) days after the Issue Date and then at any time on or prior to the Maturity Date each Investor will have the option until this Note is fully paid, to convert all or a any outstanding and unpaid principal portion of the entire principal amount of the Notes outstanding into Common Stock immediately upon the Investor’s request; providedthis Note, however, that ifand accrued interest, at the time election of the Holder (the date of giving of such notice of conversion being a "Conversion Date") into fully paid and non-assessable shares of the Borrower’s common stock, par value $0.001 per share, (“Common Stock”) as such stock exists on the date of issuance of this Note, or any particular conversionshares of capital stock of Borrower into which such Common Stock shall hereafter be changed or reclassified, at the Company does not have conversion price as defined in Section 2.1(b) hereof (the "Conversion Price"), determined as provided herein. Upon delivery to the Borrower of a completed Notice of Conversion, a form of which is annexed hereto as Exhibit A, Borrower shall issue and deliver to the Holder within three (3) business days after the Conversion Date (such third day being the “Delivery Date”) that number of authorized shares of Common Stock sufficient to allow for such particular conversion as well as the issuance of the maximum amount of Common Stock permitted under the Company’s 2004 Equity Compensation Plan, the Investors may only convert that portion of their Notes outstanding for which the Company has a sufficient number of authorized shares of Common Stock. To the extent multiple Investors request conversion of their Notes on the same date, any limitations on conversion shall be applied on a pro rata basis. In such case, the Investors may request, in writing, that the Company call a special meeting of the stockholders of the Company specifically for the purpose of increasing the number of authorized shares of Common Stock to cover the remaining portion of the Notes outstandingNote converted in accordance with the foregoing. At the election of the Holder, as well as the maximum issuances contemplated pursuant Borrower will deliver accrued but unpaid interest on the Note, if any, through the Conversion Date directly to the Company’s 2004 Equity Compensation Plan, within 90 calendar days after Holder on or before the Company’s receipt of the Investors’ written request. Notwithstanding the above, the Company shall use its best efforts to increase its number of authorized shares of Common Stock to 100,000,000 or such greater number so as to allow for the full conversion of any outstanding Notes on the earlier of: (1) promptly after the date on which a request for conversion, for which there are not sufficient shares available to effect such conversion, is received by the Company, or (2) the time of the next shareholder meetingDelivery Date. The number of shares of Common Stock that to be issued upon each conversion of this Note may be converted into shall be determined by dividing that portion of the principal amount then outstanding of the Note and interest, if any, to be converted, by the Conversion Price at the time of conversion. If the Investor elects to convert this Note on demand, it shall provide the Company with written notice of its election at least one (1) day prior to the date selected for conversion. Upon conversion, the Investor shall deliver to the Company the original of this Note (or a notice to the effect that the original Note has been lost, stolen or destroyed and an agreement reasonably acceptable to the Company whereby the holder agrees to indemnify the Company from any loss incurred by it in connection with this Note). However, upon such conversion of this Note, this Note shall be deemed converted and of no further force and effect, whether or not the Note is delivered for cancellation as set forth in the preceding sentence. If there shall occur a Change of Control, the Company shall give written notice to the Investor at least five (5) days prior to any closing thereof and the Investor’s election to convert this Note shall be conditional upon the consummation thereofPrice.

Optional Conversion. At any time on or prior to the Maturity Date each Investor will have the option to convert all or a portion of the entire principal amount of the Notes outstanding into Common Stock immediately upon the Investor’s request; provided, ,however, that if, at the time of any particular conversion, the Company does not have the number of authorized shares of Common Stock sufficient to allow for such particular conversion as well as the issuance of the maximum amount of Common Stock permitted under the Company’s 2004 Equity Compensation Plan, the Investors may only convert that portion of their Notes outstanding for which the Company has a sufficient number of authorized shares of Common Stock. To the extent multiple Investors request conversion of their Notes on the same date, any limitations on conversion shall be applied on a pro rata basis. In such case, the Investors may request, in writing, that the Company call a special meeting of the stockholders of the Company specifically for the purpose of increasing the number of authorized shares of Common Stock to cover the remaining portion of the Notes outstanding, as well as the maximum issuances contemplated pursuant to the Company’s 2004 Equity Compensation Plan, within 90 calendar days after the Company’s receipt of the Investors’ written request. Notwithstanding the above, the Company shall use its best efforts to increase its number of authorized shares of Common Stock to 100,000,000 or such greater number so as to allow for the full conversion of any outstanding Notes on the earlier of: (1) promptly after the date on which a request for conversion, for which there are not sufficient shares available to effect such conversion, is received by the Company, or (2) the time of the next shareholder meeting. The number of shares of Common Stock that this Note may be converted into shall be determined by dividing the principal amount then outstanding by the Conversion Price at the time of conversion. If the Investor elects to convert this Note on demand, it shall provide the Company with written notice of its election at least one (1) day prior to the date selected for conversion. Upon conversion, the Investor shall deliver to the Company the original of this Note (or a notice to the effect that the original Note has been lost, stolen or destroyed and an agreement reasonably acceptable to the Company whereby the holder agrees to indemnify the Company from any loss incurred by it in connection with this Note). However, upon such conversion of this Note, this Note shall be deemed converted and of no further force and effect, whether or not the Note is delivered for cancellation as set forth in the preceding sentence. If there shall occur a Change of Control, the Company shall give written notice to the Investor at least five (5) days prior to any closing thereof and the Investor’s election to convert this Note shall be conditional upon the consummation thereof.

Optional Conversion. At any time on or prior to the Maturity Date each Investor will have the option to convert all or a portion of the entire principal amount of the Notes outstanding into Common Stock immediately upon the Investor’s request; provided, however, that if, at the time of any particular conversion, the Company does not have the number of authorized shares of Common Stock sufficient to allow for such particular conversion conversion, as well as as: (a) the issuance of the maximum amount of Common Stock permitted under the Company’s 2004 Equity Compensation Plan, (b) the shares to be issued in settlement of any outstanding class action lawsuit obligations and (c) an additional 2,000,000 shares of Common Stock unrelated to the foregoing (a) or (b), the Investors may only convert that portion of their Notes outstanding for which the Company has a sufficient number of authorized shares of Common Stock. To the extent multiple Investors request conversion of their Notes on the same date, any limitations on conversion shall be applied on a pro rata basis. In such case, the Investors may request, in writing, that the Company call a special meeting of the stockholders of the Company specifically for the purpose of increasing the number of authorized shares of Common Stock to cover the remaining portion of the Notes outstanding, as well as the maximum issuances contemplated pursuant to by the Company’s 2004 Equity Compensation Planforegoing clauses (a), (b) or (c), within 90 calendar days after the Company’s receipt of the Investors’ written request. Notwithstanding the above, the Company shall use its best efforts to increase its number of authorized shares of Common Stock to 100,000,000 or such greater number so as to allow for the full conversion of any outstanding Notes on the earlier of: (1) promptly after the date on which a request for conversionJune 30, for which there are not sufficient shares available to effect such conversion, is received by the Company, 2014 or (2) the time any special meeting of the next shareholder meetingCompany’s stockholders that has been called according to the Company’s bylaws. The number of shares of Common Stock that this Note may be converted into shall be determined by dividing the principal amount then outstanding by the Conversion Price at the time of conversion. If the Investor elects to convert this Note on demand, it shall provide the Company with written notice of its election at least one (1) day prior to the date selected for conversion. Upon conversion, the Investor shall deliver to the Company the original of this Note (or a notice to the effect that the original Note has been lost, stolen or destroyed and an agreement reasonably acceptable to the Company whereby the holder agrees to indemnify the Company from any loss incurred by it in connection with this Note). However, upon such conversion of this Note, this Note shall be deemed converted and of no further force and effect, whether or not the Note is delivered for cancellation as set forth in the preceding sentence. If there shall occur a Change of Control, the Company shall give written notice to the Investor at least five (5) days prior to any closing thereof and the Investor’s election to convert this Note shall be conditional upon the consummation thereof.

Optional Conversion. At any time on or prior to the Maturity Date each Investor will have the option to convert all or a portion of the entire principal amount of the Notes outstanding into Common Stock immediately upon the Investor’s request; providedrequest;provided, however, that if, at the time of any particular conversion, the Company does not have the number of authorized shares of Common Stock sufficient to allow for such particular conversion as well as the issuance of the maximum amount of Common Stock permitted under the Company’s 2004 Equity Compensation Plan, the Investors may only convert that portion of their Notes outstanding for which the Company has a sufficient number of authorized shares of Common Stock. To the extent multiple Investors request conversion of their Notes on the same date, any limitations on conversion shall be applied on a pro rata basis. In such case, the Investors may request, in writing, that the Company call a special meeting of the stockholders of the Company specifically for the purpose of increasing the number of authorized shares of Common Stock to cover the remaining portion of the Notes outstanding, as well as the maximum issuances contemplated pursuant to the Company’s 2004 Equity Compensation Plan, within 90 calendar days after the Company’s receipt of the Investors’ written request. Notwithstanding the above, the Company shall use its best efforts to increase its number of authorized shares of Common Stock to 100,000,000 or such greater number so as to allow for the full conversion of any outstanding Notes on the earlier of: (1) promptly after the date on which a request for conversion, for which there are not sufficient shares available to effect such conversion, is received by the Company, or (2) the time of the next shareholder meeting. The number of shares of Common Stock that this Note may be converted into shall be determined by dividing the principal amount then outstanding by the Conversion Price at the time of conversion. If the Investor elects to convert this Note on demand, it shall provide the Company with written notice of its election at least one (1) day prior to the date selected for conversion. Upon conversion, the Investor shall deliver to the Company the original of this Note (or a notice to the effect that the original Note has been lost, stolen or destroyed and an agreement reasonably acceptable to the Company whereby the holder agrees to indemnify the Company from any loss incurred by it in connection with this Note). However, upon such conversion of this Note, this Note shall be deemed converted and of no further force and effect, whether or not the Note is delivered for cancellation as set forth in the preceding sentence. If there shall occur a Change of Control, the Company shall give written notice to the Investor at least five (5) days prior to any closing thereof and the Investor’s election to convert this Note shall be conditional upon the consummation thereof.

Optional Conversion. At Each Holder of Series G Preferred shall have the right, at any time on or prior commencing after the issuance, to convert the Series G Stated Value of such shares (the "Conversion Amount") into fully paid and non-assessable shares of Common Stock of the Company ("Conversion Shares"). The number of Conversion Shares issuable upon conversion of the Conversion Amount shall equal the Conversion Amount divided by the Conversion Price then in effect. The "Conversion Price" of the Series G Preferred shall be $0.045, subject to adjustment and except as otherwise set forth below. No fractional shares of Common Stock shall be issued upon conversion of Series G Preferred. In lieu of any fractional share to which the holder would otherwise be entitled, the Company shall round up to the Maturity Date each Investor will have the option nearest whole share. In order to convert all Series G Preferred into shares of Common Stock, the Holder shall surrender the certificate or a portion certificates therefor, duly endorsed, to the office of the entire principal amount Company, and shall give written notice to the Company at such office that the holder elects to convert the same, the number of shares of Series G Preferred so converted and a calculation of the Notes outstanding into Common Stock immediately upon Conversion Price (with an advance copy of the Investor’s requestcertificate(s) and the notice by facsimile); provided, however, that if, at the time of any particular conversion, the Company does shall not have the number of authorized be obligated to issue certificates evidencing shares of Common Stock sufficient to allow for issuable upon such particular conversion as well as the issuance of the maximum amount of Common Stock permitted under the Company’s 2004 Equity Compensation Plan, the Investors may only convert that portion of their Notes outstanding for which the Company has a sufficient number of authorized unless such shares of Common Stock. To the extent multiple Investors request conversion of their Notes on the same date, any limitations on conversion shall be applied on a pro rata basis. In such case, the Investors may request, in writing, that the Company call a special meeting of the stockholders of the Company specifically for the purpose of increasing the number of authorized shares of Common Stock to cover the remaining portion of the Notes outstanding, as well as the maximum issuances contemplated pursuant to the Company’s 2004 Equity Compensation Plan, within 90 calendar days after the Company’s receipt of the Investors’ written request. Notwithstanding the above, the Company shall use its best efforts to increase its number of authorized shares of Common Stock to 100,000,000 or such greater number so as to allow for the full conversion of any outstanding Notes on the earlier of: (1) promptly after the date on which a request for conversion, for which there Series G Preferred are not sufficient shares available to effect such conversion, is received by the Company, or (2) the time of the next shareholder meeting. The number of shares of Common Stock that this Note may be converted into shall be determined by dividing the principal amount then outstanding by the Conversion Price at the time of conversion. If the Investor elects to convert this Note on demand, it shall provide the Company with written notice of its election at least one (1) day prior to the date selected for conversion. Upon conversion, the Investor shall deliver delivered to the Company as provided above, or the original of this Note (Holder notifies the Company or a notice to the effect its transfer agent that the original Note has such certificates have been lost, stolen or destroyed and executes an agreement reasonably acceptable satisfactory to the Company whereby the holder agrees and its transfer agent to indemnify the Company from any loss incurred by it in connection with this Note)such certificates. However, upon Notice of conversion may be given by a holder at any time during the day up to 5:00 p.m. New York City time and such conversion of this Note, this Note shall be deemed converted and to have been made immediately prior to the close of no further force and effect, whether or not business on the Note date notice of conversion is received by the Company. Within three (3) business days after the notice of conversion is delivered for cancellation as in accordance with the procedures set forth in the preceding sentence. If there shall occur a Change of Controlabove, the Company shall give written notice instruct the transfer agent to issue shares of its Common Stock and to forward the same to the Investor at least five (5) days prior to any closing thereof and the Investor’s election to convert this Note shall be conditional upon the consummation thereofHolder.

Optional Conversion. At The principal and interest owing ------------------- under this Note shall be convertible at the option of the Holder, at any time on or prior to the Maturity Date each Investor will have Date, into a number of shares of common stock of the option Company, par value $.01 per share (the "Common Stock"), equal to the principal being converted divided by the Conversion Price. The "Conversion Price" shall be $.01 above the closing market price of the Common Stock on the date of conversion. In order to exercise the conversion privilege, Holder shall surrender this Note and give written notice to the Company of its election so to convert all or a portion of the entire principal amount of the Notes outstanding into Common Stock immediately upon the Investor’s request; provided, however, that if, at the time of any particular conversionthis Note. Promptly after such notice is given, the Company does not have shall issue (or cause its transfer agent to issue), and deliver to Holder (i) a certificate or certificates for the number of authorized full shares issuable upon the conversion of this Note registered in the name of Holder in accordance with the provisions of this Section 6 and (ii) in the event of partial conversion, a new note, containing the same terms as this Note, for the portion of this Note that is not converted. Each conversion shall be deemed to have been effected on the date on which the conversion notice shall have been given, as aforesaid; and Holder shall be deemed to have become on said date the holder of record of the shares of Common Stock sufficient to allow for issuable upon such particular conversion as well as the issuance of the maximum amount of Common Stock permitted under the Company’s 2004 Equity Compensation Plan, the Investors may only convert that portion of their Notes outstanding for which the Company has a sufficient number of authorized shares of Common Stockconversion. To the extent multiple Investors request conversion of their Notes on the same date, any limitations on conversion shall be applied on a pro rata basis. In such case, the Investors may request, in writing, that the Company call a special meeting of the stockholders of the Company specifically for the purpose of increasing the number of authorized No fractional shares of Common Stock to cover the remaining portion or scrip representing fractional shares shall be issued upon conversion of the Notes outstanding, as well as the maximum issuances contemplated pursuant to the Company’s 2004 Equity Compensation Plan, within 90 calendar days after the Company’s receipt of the Investors’ written requestthis Note. Notwithstanding the above, the Company shall use its best efforts to increase its number of authorized shares If any fractional share of Common Stock to 100,000,000 or such greater number so as to allow for would be issuable upon the full conversion of any outstanding Notes on the earlier of: (1) promptly after the date on which a request for conversion, for which there are not sufficient shares available to effect such conversion, is received by the Company, or (2) the time of the next shareholder meeting. The number of shares of Common Stock that this Note may be converted into shall be determined by dividing the principal amount then outstanding by the Conversion Price at the time of conversion. If the Investor elects to convert this Note on demand, it shall provide the Company with written notice of its election at least one (1) day prior to the date selected for conversion. Upon conversion, the Investor shall deliver to the Company the original of this Note (or a notice to the effect that the original Note has been lost, stolen or destroyed and an agreement reasonably acceptable to the Company whereby the holder agrees to indemnify the Company from any loss incurred by it in connection with this Note). However, upon such conversion of this Note, this Note shall be deemed converted and of no further force and effect, whether or not the Note is delivered for cancellation as set forth in the preceding sentence. If there shall occur a Change of Control, the Company shall give written notice to make an adjustment therefor in cash at the Investor at least five (5) days prior to any closing thereof and the Investor’s election to convert this Note shall be conditional upon the consummation thereofconversion price.