Common use of Conversion Right Clause in Contracts

Conversion Right. Provided that the Merger is consummated, upon written notice to the Borrower, the Holder may, at its sole option, at the effective date of the Merger (as defined below), or at any time thereafter until the principal balance of this Note, together with all accrued and unpaid interest, is paid in full, convert the entire outstanding principal hereunder and all accrued and unpaid interest thereon into such number of shares of fully paid and non-assessable equity securities issued by the Borrower to its members in connection with the conversion of their Membership Interests in the Company pursuant to the Merger (the “New Securities”), that is equal to the quotient of (A) the outstanding principal hereunder plus all accrued and unpaid interest thereon divided by (B) the Conversion Price (as defined below). In addition, in connection with such conversion, the Holder shall receive rights as a purchaser and holder of New Securities (including, without limitation, customary registration rights) no less favorable in the aggregate and in any single instance than those granted to any other purchaser of New Securities. The Borrower agrees that it has no right to prevent the Holder from effecting such conversion without the Holder’s consent, whether by attempting to prepay this Note (whether or not there shall have been a default hereunder) or otherwise. The “Conversion Price” shall (i) if the New Securities are common stock, par value $0.001 per share (the “Common Stock”), be equal to the Common Stock Equivalent Price (as defined below) or (ii) if the New Securities are convertible capital stock, the Conversion Price shall be an amount equal to the Common Stock Equivalent Price multiplied by the number of shares of Common Stock into which one share of such convertible capital stock is convertible. The “Common Stock Equivalent Price” shall initially be the closing offering price in the Next Financing and shall be adjusted as set forth in Section 2.2(d) below.

Conversion Right. Provided that The Holder shall have the Merger is consummatedright, upon written notice to the Borroweron any calendar day, the Holder may, at its sole option, at the effective date of the Merger (as defined below), or at any time thereafter until on or following the principal balance Issue Date, to convert all or any portion of this Note, together with all accrued the then outstanding and unpaid interest, is paid in full, convert the entire outstanding principal hereunder Principal Amount and all accrued and unpaid interest thereon (including any Default Interest) into such number of shares of fully paid and non-assessable equity shares of Common Stock, as such Common Stock exists on the Issue Date, or any shares of capital stock or other securities issued by of the Borrower to its members in connection with the conversion of their Membership Interests in the Company pursuant to the Merger (the “New Securities”)into which such Common Stock shall hereafter be changed or reclassified, that is equal to the quotient of (A) the outstanding principal hereunder plus all accrued and unpaid interest thereon divided by (B) at the Conversion Price (as defined below) determined as provided herein (a “Conversion”). In addition, by submitting to the Borrower or Borrower’s transfer agent a Notice of Conversion (as defined in connection with such conversionthis Note) by facsimile, e-mail or other reasonable means of communication dispatched on the Conversion Date (as defined in this Note) prior to 11:59 p.m., New York, New York time; provided, however, that notwithstanding anything to the contrary contained herein, the Holder shall receive rights as a purchaser and holder of New Securities (including, without limitation, customary registration rights) no less favorable in not have the aggregate and in any single instance than those granted to any other purchaser of New Securities. The Borrower agrees that it has no right to prevent convert any portion of this Note, pursuant to Section 1 or otherwise, to the extent that after giving effect to such issuance after conversion as set forth on the applicable Notice of Conversion, the Holder from effecting such conversion without (together with the Holder’s consent, whether by attempting to prepay this Note (whether or not there shall have been a default hereunder) or otherwise. The “Conversion Price” shall (i) if the New Securities are common stock, par value $0.001 per share affiliates (the “Common StockAffiliates”), be equal to the Common Stock Equivalent Price and any other Persons (as defined below) acting as a group together with the Holder or any of the Holder’s Affiliates (ii) if such Persons, “Attribution Parties”)), would beneficially own in excess of the New Securities are convertible capital stockBeneficial Ownership Limitation (as defined below). For purposes of the foregoing sentence, the Conversion Price shall be an amount equal to the Common Stock Equivalent Price multiplied by the number of shares of Common Stock into which one share beneficially owned by the Holder and Attribution Parties shall include the number of such convertible capital stock is convertible. The “shares of Common Stock Equivalent Price” issuable upon conversion of this Note with respect to which such determination is being made, but shall initially exclude the number of shares of Common Stock which would be issuable upon (i) conversion of the closing offering price in remaining, nonconverted portion of this Note beneficially owned by the Next Financing Holder or any of its Affiliates or Attribution Parties and shall be adjusted (ii) exercise or conversion of the unexercised or nonconverted portion of any other securities of the Company subject to a limitation on conversion or exercise analogous to the limitation contained herein beneficially owned by the Holder or any of its Affiliates or Attribution Parties. Except as set forth in the preceding sentence, for purposes of this Section 2.2(d1.1, beneficial ownership shall be calculated in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended (the “1934 Act”) and the rules and regulations promulgated thereunder, it being acknowledged by the Holder that the Holder is solely responsible for any schedules required to be filed in accordance therewith. In addition, a determination as to any group status as contemplated above shall be determined in accordance with Section 13(d) of the 1934 Act and the rules and regulations promulgated thereunder. For purposes of this Section 1.1, in determining the number of outstanding shares of Common Stock, the Holder may rely on the number of outstanding shares of Common Stock as reflected in (A) the Company’s most recent periodic or annual report filed with the Commission, as the case may be, (B) a more recent public announcement by the Company or (C) a more recent written notice by the Company or the Transfer Agent setting forth the number of shares of Common Stock outstanding. Upon the written or oral request of the Holder, the Company shall within two Trading Days confirm orally and in writing to the Holder the number of shares of Common Stock then outstanding. In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise of securities of the Company, including this Note, by the Holder or its Affiliates or Attribution Parties since the date as of which such number of outstanding shares of Common Stock was reported. The “Beneficial Ownership Limitation” shall be 4.99% of the number of shares of the Common Stock outstanding at the time of the respective calculation hereunder. “Person” and “Persons” means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization, any other entity and any governmental entity or any department or agency thereof. The limitations contained in this paragraph shall apply to a successor holder of this Note. The number of Conversion Shares to be issued upon each conversion of this Note shall be determined by dividing the Conversion Amount (as defined below) by the applicable Conversion Price then in effect on the date specified in the notice of conversion, in the form attached hereto as Exhibit A (the “Notice of Conversion”), delivered to the Borrower or Borrower’s transfer agent by the Holder in accordance with the terms of this Note; provided that the Notice of Conversion is submitted by facsimile or e-mail (or by other means resulting in, or reasonably expected to result in, notice) to the Borrower or ▇▇▇▇▇▇▇▇’s transfer agent before 11:59 p.m., New York, New York time on such conversion date (the “Conversion Date”). The term “Conversion Amount” means, with respect to any conversion of this Note, the sum of (1) the Principal Amount of this Note to be converted in such conversion plus (2) at the Holder’s option, accrued and unpaid interest, if any, on such Principal Amount at the Interest Rate to the Conversion Date, plus (3) at the Holder’s option, Default Interest, if any, on the amounts referred to in the immediately preceding clauses (1) and/or (2). In addition to the beneficial ownership limitations provided in this Note, the sum of the number of shares of Common Stock that may be issued under this Note shall be limited to the amount described in Section 4(r) of the Purchase Agreement, unless the Shareholder Approval (as defined in the Purchase Agreement) (“Shareholder Approval”) is obtained by the Company.

Conversion Right. Provided that Subject to and upon compliance with the Merger is consummatedprovisions hereof, upon written notice and subject to the Borrower, the Holder may, at its sole option, at the effective date approval of the Merger (as defined below), or at any time thereafter until stockholders of Borrower with respect to the principal balance conversion feature of this Note, together with all accrued and unpaid interest, is paid in full, convert the entire outstanding principal hereunder and all accrued and unpaid interest thereon into such number but (provided that Borrower shall not have presented at a meeting of shares of fully paid and non-assessable equity securities issued by the Borrower to its members in connection with stockholders the conversion feature of their Membership Interests in the Company pursuant to the Merger this Note for approval by such stockholders) only if required under applicable Law, (the “New Securities”"Stockholder Approval"), that is equal to the quotient of (A) the outstanding principal hereunder plus all accrued and unpaid interest thereon divided by (B) the Conversion Price (as defined below). In addition, in connection with such conversion, the Holder shall receive rights have the right, at any time or from time to time, to convert all or any portion of the Total Convertible Amount into as a purchaser and holder many shares of New Securities (including, without limitation, customary registration rights) no less favorable in the aggregate and in any single instance than those granted to any other purchaser of New Securities. The Borrower agrees that it has no right to prevent the Holder from effecting such conversion without the Holder’s consent, whether by attempting to prepay this Note (whether or not there shall have been a default hereunder) or otherwise. The “Conversion Price” shall (i) if the New Securities are common stock, par value $0.001 .01 per share share, of Borrower (the “"Common Stock”)") as the portion of the Total Convertible Amount so converted is a multiple of the Initial Conversion Price or, be equal in case an adjustment of such price has taken place pursuant to the Common Stock Equivalent Price provisions of this Section 5, then at the price as last adjusted and in effect at the date this Note or portion thereof is surrendered for conversion (such price or such price as defined below) or (ii) if last adjusted, as the New Securities are convertible capital stockcase may be, the "Conversion Price shall be an amount equal Price"). Notwithstanding the preceding sentence, if, pursuant to Article I, Section 1.1(b) of the Common Stock Equivalent Price multiplied by Investment Agreement, the stockholders of the Borrower collectively subscribe for a number of Rights Shares that equals at least $2,000,000, then the Holder shall elect to convert the Total Convertible Amount in its entirety into shares of Common Stock into which one of the Borrower pursuant to this Section 5. For the purposes of this Note, the term "Total Convertible Amount" shall mean, on any date, the sum of the unpaid principal amount of this Note and the accrued and unpaid interest thereon on such date. For the purposes of this Note, the term "Initial Conversion Price" shall mean the lesser of (i) $1.50 and (ii) 85% of the weighted average price per share of such convertible capital stock is convertible. The “Borrower's Common Stock Equivalent Price” shall initially be as reported on the closing offering Nasdaq National Market for the fifteen trading day period ending three trading days before the conversion date (provided, that (1) if the shares of such Common Stock then are not traded on the Nasdaq National Market, the average of the highest reported bid and lowest reported asked price in the Next Financing and for each of such fifteen days as reported by NASDAQ shall be adjusted used; (2) if the shares of such Common Stock then are not listed and traded on the NASDAQ, the average closing prices for such fifteen days as set forth reported by the principal national securities exchange on which the shares are listed and traded shall be used; or (3) if the shares of such Common Stock are not then listed or traded on NASDAQ or a national securities exchange, the fair market value as determined jointly in Section 2.2(d) belowgood faith by the Holder and the Borrower shall be used).

Conversion Right. Provided that The Holder shall have the Merger is consummatedright from time to time, upon written notice to and at any time during the Borrower, period beginning on the Holder may, at its sole option, at the effective date of this Note and ending on the Merger later of: (i) the Maturity Date and (ii) the date of payment of the Default Amount (as defined below)in Article III) pursuant to Section 1.6(a) or Article III, or at any time thereafter until each in respect of the remaining outstanding principal balance amount of this Note, together with Note to convert all accrued or any part of the outstanding and unpaid interest, is paid in full, convert the entire outstanding principal hereunder and all accrued and unpaid interest thereon amount of this Note into such number of shares of fully paid and non-non- assessable equity shares of Common Stock, as such Common Stock exists on the Issue Date, or any shares of capital stock or other securities issued by of the Borrower to its members in connection with into which such Common Stock shall hereafter be changed or reclassified at the conversion of their Membership Interests in the Company pursuant to the Merger price (the “New SecuritiesConversion Price”) determined as provided herein (a “Conversion”), that is equal to the quotient of (A) the outstanding principal hereunder plus all accrued and unpaid interest thereon divided by (B) the Conversion Price (as defined below). In addition, in connection with such conversion, the Holder shall receive rights as a purchaser and holder of New Securities (including, without limitation, customary registration rights) no less favorable in the aggregate and in any single instance than those granted to any other purchaser of New Securities. ; The Borrower agrees that it has no right to prevent the Holder from effecting such conversion without the Holder’s consent, whether by attempting to prepay this Note (whether or not there shall have been a default hereunder) or otherwise. The “Conversion Price” shall (i) if the New Securities are common stock, par value $0.001 per share (the “Common Stock”), be equal to the Common Stock Equivalent Price (as defined below) or (ii) if the New Securities are convertible capital stock, the Conversion Price shall be an amount equal to the Common Stock Equivalent Price multiplied by the number of shares of Common Stock into which one share to be issued upon each conversion of this Note of any amounts due shall be determined by dividing the Conversion Amount (as defined below) by the applicable Conversion Price then in effect on the date specified in the notice of conversion, in the form attached hereto as Exhibit A (the “Notice of Conversion”), delivered to the Borrower by the Holder in accordance with Section 1.4 below; provided that the Notice of Conversion is submitted by facsimile or e-mail (or by other means resulting in, or reasonably expected to result in, notice) to the Borrower before 6:00 p.m., Pacific Time on such convertible capital stock is convertibleconversion date (the “Conversion Date”). The term “Common Stock Equivalent PriceConversion Amount” shall initially means, with respect to any conversion of any amounts due under this Note, the sum of (1) the principal amount of this Note to be converted in such conversion plus (2) at the closing offering price Borrower’s option, accrued and unpaid interest, if any, on such principal amount at the interest rates provided in this Note to the Conversion Date, plus (3) at the Borrower’s option, Default Interest, if any, on the amounts referred to in the Next Financing immediately preceding clauses (1) and/or (2) plus (4) at the Holder’s option, any amounts owed to the Holder pursuant to Sections 1.3 and shall be adjusted as set forth in Section 2.2(d1.4(g) belowhereof.

Conversion Right. Provided that The holder of this Debenture shall have the Merger is consummated, upon written notice to the Borrower, the Holder mayright, at its sole holder's option, at the effective date any time, to convert all, or, in multiples of the Merger (as defined below)$10,000, or at any time thereafter until the principal balance part of this Note, together with all accrued and unpaid interest, is paid in full, convert the entire outstanding principal hereunder and all accrued and unpaid interest thereon Debenture into such number of shares of fully paid and non-assessable equity securities nonassessable shares of common stock, $0.01 par value, of Integrated Security Systems, Inc. (the "Common Stock") as shall be provided herein. The holder of this Debenture may exercise the conversion right by giving written notice (the "Conversion Notice") to Borrower of the exercise of such right and stating the name or names in which the stock certificate or stock certificates for the shares of Common Stock are to be issued and the address to which such certificates shall be delivered. The Conversion Notice shall be accompanied by the Borrower to its members in connection with the Debenture. The number of shares of Common Stock that shall be issuable upon conversion of their Membership Interests in the Company pursuant to Debenture shall equal the Merger (face amount of the “New Securities”), that is equal to the quotient of (A) the outstanding principal hereunder plus all accrued and unpaid interest thereon Debenture divided by (B) the Conversion Price (as defined below). In additionbelow and in effect on the date the Conversion Notice is given; provided, in connection with such conversionhowever, the Holder shall receive rights as a purchaser and holder of New Securities (including, without limitation, customary registration rights) no less favorable that in the aggregate and in any single instance than those granted to any other purchaser of New Securities. The Borrower agrees event that it has no right to prevent the Holder from effecting such conversion without the Holder’s consent, whether by attempting to prepay this Note (whether or not there Debenture shall have been a default hereunder) or otherwisepartially redeemed, shares of Common Stock shall be issued pro rata, rounded to the nearest whole share. The “Conversion Price” shall (i) if be deemed to have been effected on the New Securities are common stock, par value $0.001 per share date the Conversion Notice is received (the “Common Stock”"Conversion Date"). Within 20 business days after receipt of the Conversion Notice, be equal Borrower shall issue and deliver by hand against a signed receipt therefor or by United States registered mail, return receipt requested, to the Common Stock Equivalent Price (as defined below) or (ii) if the New Securities are convertible capital stock, address designated in the Conversion Price shall be an amount equal to the Common Stock Equivalent Price multiplied by Notice, a stock certificate or stock certificates of Borrower representing the number of shares of Common Stock into to which one share Holder is entitled and a check or cash in payment of such convertible capital stock is convertibleall interest accrued and unpaid on the Debenture up to and including the Conversion Date. The “Common Stock Equivalent Price” shall initially conversion rights will be governed by the closing offering price in the Next Financing and shall be adjusted as set forth in Section 2.2(d) below.following provisions:

Conversion Right. Provided that (a) Subject to other provisions of Section 4 hereof, at any time or times on or after the Merger is consummated, upon written notice to the BorrowerIssuance Date, the Holder may, at its sole option, at the effective date shall be entitled to convert any portion of the Merger outstanding and unpaid Conversion Amount (as defined below)) into validly issued, or at any time thereafter until the principal balance of this Note, together with all accrued and unpaid interest, is paid in full, convert the entire outstanding principal hereunder and all accrued and unpaid interest thereon into such number of shares of fully paid and non-assessable equity securities issued by shares of the Borrower to its members in connection with the conversion of their Membership Interests in the Company pursuant to the Merger (the “New Securities”), that is equal to the quotient of (A) the outstanding principal hereunder plus all accrued and unpaid interest thereon divided by (B) the Conversion Price (as defined below). In addition, in connection with such conversion, the Holder shall receive rights as a purchaser and holder of New Securities (including, without limitation, customary registration rights) no less favorable in the aggregate and in any single instance than those granted to any other purchaser of New Securities. The Borrower agrees that it has no right to prevent the Holder from effecting such conversion without the HolderCompany’s consent, whether by attempting to prepay this Note (whether or not there shall have been a default hereunder) or otherwise. The “Conversion Price” shall (i) if the New Securities are common stock, par value per share $0.001 per share (the “Common Stock”), be equal to ) at the Common Stock Equivalent Price Conversion Rate (as defined below) (the “Conversion Shares”) by (i) delivering written notice to the Company that such Holder elects to exercise the conversion right pursuant to this Section 4(a) and specifying the Conversion Amount to be converted and the name or names (with address) in which a certificate or certificates for shares of Common Stock are to be issued (the “Conversion Notice”); and (ii) if the New Securities are convertible capital stock, the Conversion Price shall be an amount equal surrendering this Note to the Common Stock Equivalent Price multiplied by Company. For purpose of this Note, “Conversion Amount” means the portion of the Principal to be converted plus all accrued and unpaid Interest with respect to such portion of the Principal and accrued and unpaid late charges with respect to such portion of such Principal and such Interest, if any. For purposes of this Note, “Conversion Rate” means the number of shares of Common Stock issuable upon conversion of any Conversion Amount determined by dividing (x) such Conversion Amount by (y) fifty percent (50%) (the “Discount”) of the lowest closing bid price for the Company’s Common Stock, during the twenty (20) trading days immediately preceding a Conversion Date (as defined below), as reported by Bloomberg (the “Lowest Closing Bid Price”); provided however, that if the Company’s Common Stock becomes chilled by Deposit Trust Corporation (DTC) at the time of the Conversion Notice, the Discount shall be forty five percent (45%) (the “Initial Conversion Price”); The Initial Conversion Price shall be adjusted, if the closing bid price for the Company’s Common Stock on the Clearing Date (as defined below) (the “Clearing Date Closing Bid Price”) is lower than the Lowest Closing Bid Price, as such that the Lowest Closing Bid Price is replaced by the Clearing Date Closing Bid Price (the “Adjusted Conversion Price”, together with the Initial Conversion Price, the “Conversion Price”); The Conversion Price is subject to adjustment for stock splits or dividends paid on Common Stock and in shares of Common Stock; The maximum amount of the Conversion Price shall not exceed $0.007 per share, subject to adjustment as provided herein. For purpose of this Note, the “Clearing Date” means the date on which the Conversion Shares are deposited into which one share the Holder’s brokerage account and the Holder’s broker has confirmed that the Holder may execute trades of such convertible capital stock is convertible. The “Common Stock Equivalent Price” shall initially be the closing offering price in the Next Financing and shall be adjusted as set forth in Section 2.2(d) belowConversion Shares.

Conversion Right. Provided that The Holder shall have the Merger is consummatedright from time to time, upon written notice to and at any time during the Borrower, the Holder may, at its sole option, at period beginning on the effective date of the Merger Company’s Amendment to its Certificate of Incorporation increasing the Company’s authorized shares of Common Stock discussed in Section 1.3 below, and ending on the later of: (i) the Maturity Date and (ii) the date of payment of the Default Amount (as defined below), or at any time thereafter until in Article III) — each in respect of the remaining outstanding principal balance amount of this Note, together with Note — to convert all accrued or any part of the outstanding and unpaid interest, is paid in full, convert the entire principal amount of this Note and any outstanding principal hereunder and all accrued and unpaid interest thereon into such number of shares of fully paid and non-assessable equity shares of Common Stock, as such Common Stock exists on the Issue Date, or any shares of capital stock or other securities issued by of the Borrower to its members in connection with Company into which such Common Stock shall hereafter be changed or reclassified, at the conversion of their Membership Interests in the Company pursuant to the Merger price (the “New SecuritiesConversion Price”) determined as provided herein (a “Conversion”), that is equal to the quotient of (A) the outstanding principal hereunder plus all accrued and unpaid interest thereon divided by (B) the Conversion Price (as defined below). In addition, in connection with such conversion, the Holder shall receive rights as a purchaser and holder of New Securities (including, without limitation, customary registration rights) no less favorable in the aggregate and in any single instance than those granted to any other purchaser of New Securities. The Borrower agrees that it has no right to prevent the Holder from effecting such conversion without the Holder’s consent, whether by attempting to prepay this Note (whether or not there shall have been a default hereunder) or otherwise. The “Conversion Price” shall (i) if the New Securities are common stock, par value $0.001 per share (the “Common Stock”), be equal to the Common Stock Equivalent Price (as defined below) or (ii) if the New Securities are convertible capital stock, the Conversion Price shall be an amount equal to the Common Stock Equivalent Price multiplied by the number of shares of Common Stock into which one share to be issued upon each conversion of this Note shall be determined by dividing the Conversion Amount (as defined below) by the applicable Conversion Price then in effect on the date specified in the notice of conversion, in the form attached hereto as Exhibit A (the “Notice of Conversion”), delivered to the Company by the Holder in accordance with Section 1.4 below; provided that the Notice of Conversion is submitted by facsimile or e-mail to the Company before 6:00 p.m., New York, New York time on such convertible capital stock is convertibleconversion date (the “Conversion Date”). The term “Common Stock Equivalent PriceConversion Amount” shall initially means, with respect to any conversion of this Note, the sum of (1) the principal amount of this Note to be converted in such conversion plus (2) at the closing offering price Holder’s option, accrued and unpaid interest, if any, on such principal amount at the interest rates provided in this Note to the Conversion Date, plus (3) at the Holder’s option, Default Interest, if applicable, on the amounts referred to in the Next Financing and shall be adjusted as set forth in Section 2.2(dimmediately preceding clauses (1) belowand/or (2) plus (4) at the Holder’s option, any amounts owed to the Holder pursuant to this Note.

Conversion Right. Provided that 1.1. Subject to and upon compliance with these Conversion Provisions, the Merger is consummatedholder of any Note (a "Noteholder") will have the right at any time on and after May 1, upon written notice 1996 up to the Borrowerclose of business of banks in Lugano on December 31, 2000, or, in case the Notes are called for redemption in accordance with Section 4 of the Terms of the Notes, then prior to the close of business of banks in Lugano on the earlier of December 31, 2000 and the fifth business day preceding the date fixed for redemption, but in no event thereafter, to convert ten Notes or more Notes into freely transferable and non-restricted (such non-restriction being subject to the effectiveness of a registration statement under the U.S. securities laws covering such common stock) shares of common stock which are duly registered under the 1933 Securities Act, with par value USD 0.01 per share (such presently authorized capital stock and any other stock into which such presently authorized common stock may hereafter be changed, the Holder may"Common Stock"), at its sole optionof the Company, calculated as to each conversion to the greatest number of full Shares, disregarding fractions, at the effective date price of initially as determined pursuant to Section 3 of the Merger terms of the Notes for each Share, such price being subject to adjustment in certain instances as provided in Article 2 hereafter (as defined belowso adjusted from time to time, the "Conversion Price"). Fractions of a share will not be issued on conversion; provided, or however, that if a Noteholder at any one time thereafter until the principal balance of this Note, together with all accrued and unpaid interest, is paid in full, convert the entire outstanding principal hereunder and all accrued and unpaid interest thereon into such number of shares of fully paid and non-assessable equity securities issued by the Borrower to its members in connection with the conversion of their Membership Interests in the Company pursuant to the Merger (the “New Securities”), that is equal to the quotient of (A) the outstanding principal hereunder plus all accrued and unpaid interest thereon divided by (B) the Conversion Price (as defined below). In addition, in connection with such delivers more than one Note for conversion, the Holder number of Shares issued shall receive rights as a purchaser and holder be calculated on the basis of New Securities (including, without limitation, customary registration rights) no less favorable in the aggregate and principal amount of the Notes so delivered. A cash adjustment shall be paid in respect of any single instance than those granted to fractional Share which would otherwise be issuable upon conversion of any other purchaser Note in an amount in U.S. Dollars based upon the market price of New Securities. The Borrower agrees that it has no right to prevent the Holder from effecting such conversion without the Holder’s consent, whether by attempting to prepay this Note (whether or not there shall have been a default hereunder) or otherwise. The “Conversion Price” shall (i) if the New Securities are common stock, par value $0.001 per share (the “Common Stock”), be equal to the Common Stock Equivalent Price (as defined below) or (ii) if on the New Securities are convertible capital stock, the Conversion Price shall be an amount equal last trading day prior to the Common Stock Equivalent Price multiplied by the number date of conversion. Cash adjustments for fractional shares of Common Stock into which will not be made for amounts less than one share of such convertible capital stock is convertible. The “Common Stock Equivalent Price” shall initially be the closing offering price in the Next Financing and shall be adjusted as set forth in Section 2.2(d) below.U.S.

Conversion Right. Provided that In addition to and without limiting the Merger is consummated, upon written notice to rights of the BorrowerHolder under the terms of the Warrant Agreement, the Holder may, at its sole option, at shall have the effective date right (the "Conversion Right") during the Exercise Period to convert the Warrant evidenced by a certificate or any portion thereof into shares of the Merger (Common Stock as defined below), or provided in this Section 4.6 at any time thereafter until or from time to time prior to its expiration. (a) Upon exercise of the principal balance of this Note, together Conversion Right with all accrued and unpaid interest, is paid in full, convert the entire outstanding principal hereunder and all accrued and unpaid interest thereon into such respect to a particular number of shares of fully paid and non-assessable equity securities issued Common Stock (the "Converted Shares"), the Company shall deliver to the Holder, without payment by the Borrower to its members in connection with the conversion Holder of their Membership Interests in the Company pursuant to the Merger (the “New Securities”)any Exercise Price or any cash or other consideration, that is number of Converted Shares equal to the quotient obtained by dividing the Net Value (as hereinafter defined in this paragraph 4.6(a)) of (A) the outstanding principal hereunder plus all accrued and unpaid interest thereon divided Converted Shares by (B) the Current Market Price of a single Share, determined in each case as of the close of business on the Conversion Price Date (as defined belowhereinafter defined). In additionThe "Net Value" of the Converted Shares shall be determined by subtracting the aggregate Exercise Price of the Converted Shares from the aggregate Current Market Price of the Converted Shares on the Conversion Date. No fractional securities shall be issuable upon exercise of the Conversion Right, and if the number of securities to be issued in connection accordance with such conversionthe foregoing formula is other than a whole number, the Holder Company shall receive rights as a purchaser and holder of New Securities (including, without limitation, customary registration rights) no less favorable in the aggregate and in any single instance than those granted pay to any other purchaser of New Securities. The Borrower agrees that it has no right to prevent the Holder from effecting such conversion without the Holder’s consent, whether by attempting to prepay this Note (whether or not there shall have been a default hereunder) or otherwise. The “Conversion Price” shall (i) if the New Securities are common stock, par value $0.001 per share (the “Common Stock”), be an amount in cash equal to the Common Stock Equivalent Current Market Price of the resulting fractional share as provided in Section 4.7. (as defined belowb) The Conversion Right may be exercised by the Holder by the surrender of the Warrant Certificate at the principal office of the Company or (ii) at the office of the Company's stock transfer agent, if any, together with a written statement specifying that the New Securities are convertible capital stock, Holder thereby intends to exercise the Conversion Price shall be an amount equal to the Common Stock Equivalent Price multiplied by Right and indicating the number of shares of Common Stock into subject to the Warrants which one share are being surrendered (referred to in subparagraph 4(a) above as the Converted Shares), on the reverse side of the Warrant Certificate, in exercise of the Conversion Right. Such conversion shall be effective upon receipt by the Company of the Warrant Certificate, or on such convertible capital stock later date as is convertiblespecified therein (the "Conversion Date"), but not later than the Expiration Date. The “Common Stock Equivalent Price” shall initially be Certificates for the closing offering price Converted Shares issuable upon exercise of the Conversion Right, together with a check in payment of any fractional Converted Share and, in the Next Financing case of a partial exercise a new Warrant evidencing the Warrant Securities remaining subject to the Warrant, shall be issued as of the Conversion Date and shall be adjusted as set forth in Section 2.2(ddelivered to the Holder within seven (7) belowdays following the Conversion Date.

Conversion Right. Provided that (a) Subject to other provisions of Section 4 hereof, (i) at any time or times on or after the Merger is consummated, Issuance Date; and (ii) upon written notice to the Borrower, the Holder may, at its sole option, at the effective date occurrence of the Merger a Financing (as defined below), or at the Holder shall be entitled to convert any time thereafter until portion of the principal balance of this Note, together with all accrued outstanding and unpaid interestConversion Amount (as defined below) into validly issued, is paid in full, convert the entire outstanding principal hereunder and all accrued and unpaid interest thereon into such number of shares of fully paid and non-assessable equity securities issued by shares of the Borrower to its members in connection with the conversion of their Membership Interests in the Company pursuant to the Merger (the “New Securities”), that is equal to the quotient of (A) the outstanding principal hereunder plus all accrued and unpaid interest thereon divided by (B) the Conversion Price (as defined below). In addition, in connection with such conversion, the Holder shall receive rights as a purchaser and holder of New Securities (including, without limitation, customary registration rights) no less favorable in the aggregate and in any single instance than those granted to any other purchaser of New Securities. The Borrower agrees that it has no right to prevent the Holder from effecting such conversion without the HolderCompany’s consent, whether by attempting to prepay this Note (whether or not there shall have been a default hereunder) or otherwise. The “Conversion Price” shall (i) if the New Securities are common stock, par value per share $0.001 per share (the “Common Stock”), be equal to ) at the Common Stock Equivalent Price Conversion Rate (as defined below) by (i) delivering written notice to the Company that such Holder elects to exercise the conversion right pursuant to this Section 4(a) and specifying the Conversion Amount to be converted and the name or names (with address) in which a certificate or certificates for shares of Common Stock are to be issued (the “Conversion Notice”); and (ii) if surrendering this Note to the New Securities are convertible capital Company. For purpose of this Note, “Financing” means any issuance for cash consideration of a minimum of $250,000 by the Company of Common Stock, or any other securities of the Company which would entitle the holder thereof to acquire at any time Common Stock, including, without limitation, any debt, preferred stock, right, option, warrant or other instrument that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock. “Conversion Price shall Amount” means the portion of the Principal to be an amount equal converted plus all accrued and unpaid Interest with respect to such portion of the Common Stock Equivalent Price multiplied by Principal and accrued and unpaid late charges with respect to such portion of such Principal and such Interest, if any. For purposes of this Note, “Conversion Rate” means the number of shares of Common Stock into issuable upon conversion of any Conversion Amount determined by dividing (x) such Conversion Amount by (y) the price, at which one share of such convertible capital stock is convertible. The “the Common Stock Equivalent is sold or converted into or exercised or exchanged for in a Financing, subject to adjustment as provided herein (the “Conversion Price” shall initially be the closing offering price in the Next Financing and shall be adjusted as set forth in Section 2.2(d) below”).

Conversion Right. Provided that (i) Subject to and in accordance with the Merger is consummatedprovisions of this Section 6, upon written notice to each Holder of shares of Series B Preferred Stock shall have the Borrower, right (the Holder may, at its sole option, at the effective date of the Merger (as defined below“Conversion Right”), or at any time thereafter until and from time to time, at such Holder’s option, to convert all or any portion of such Holder’s shares of Series B Preferred Stock into fully paid and non-assessable shares of Common Stock or such other shares of capital stock of the principal balance Corporation identical in all material respects to the Common Stock (except that the Corporation shall be required to (1) pay a dividend or distribution on such capital stock whenever and to such an extent that a dividend or distribution is paid on the Common Stock and (2) pay a dividend or distribution on the Common Stock whenever and to such an extent that a dividend or distribution is paid on such capital stock) as shall have been approved or consented to, in addition to any vote required by law, by the holders of a majority of the then-outstanding shares of Series B Preferred Stock (“Other Capital Stock,” and for purposes of this NoteSection 6 (and otherwise throughout this Certificate where such inclusion is appropriate by the context) Common Stock and Other Capital Stock shall be collectively referred to as “Common Stock”); provided, together with all accrued that the Conversion Right shall be exercisable only to the extent that there is a sufficient number of authorized and unpaid interestunissued (or issued and included in treasury) and otherwise unreserved shares of Common Stock into which such shares of Series B Preferred Stock sought to be converted may convert. Upon a Holder’s election to exercise the Conversion Right, each share of Series B Preferred Stock for which the Conversion Right is paid in full, convert the entire outstanding principal hereunder and all accrued and unpaid interest thereon exercised shall be converted into such number of shares of fully paid and non-assessable equity securities issued by the Borrower Common Stock (calculated as to its members in connection with the each conversion of their Membership Interests in the Company pursuant to the Merger (the “New Securities”), that is nearest 1/10,000th of a share) equal to the quotient of (A) the outstanding principal hereunder plus all accrued sum of (1) the Liquidation Preference and unpaid interest thereon (2) the Accrued Dividends of such share as of the Conversion Date, divided by (B) the Conversion Price (as defined below). In addition, of such share in connection with such effect at the time of conversion, the Holder shall receive rights as a purchaser and holder of New Securities (including, without limitation, customary registration rights) no less favorable in the aggregate and in any single instance than those granted to any other purchaser of New Securities. The Borrower agrees that it has no right to prevent the Holder from effecting such conversion without the Holder’s consent, whether by attempting to prepay this Note (whether or not there shall have been a default hereunder) or otherwise. The “Conversion Price” shall (i) if the New Securities are common stock, par value $0.001 per share (the “Common Stock”), be equal to the Common Stock Equivalent Price (as defined below) or . (ii) if No fractional shares of Common Stock shall be issued upon the New Securities are convertible capital stockconversion of any shares of Series B Preferred Stock. If more than one share of Series B Preferred Stock shall be surrendered for conversion at one time by the same Holder, the Conversion Price number of full shares of Common Stock issuable upon conversion thereof shall be computed on the basis of the sum of (A) the aggregate Liquidation Preference and (B) the aggregate Accrued Dividends as of the Conversion Date, on all shares of Series B Preferred Stock so surrendered. If the conversion of any share or shares of Series B Preferred Stock results in a fractional share of Common Stock issuable after application of the immediately preceding sentence, as applicable, the Corporation shall pay a cash amount in lieu of issuing such fractional share in an amount equal to such fractional interest multiplied by the Closing Price on the Trading Day immediately prior to the Conversion Date. (iii) The Corporation will (to the extent and for so long as the shares of Series B Preferred Stock is convertible) at all times reserve and keep available out of its authorized and unissued Common Stock, solely for the purpose of effecting conversions of the Series B Preferred Stock into shares of Common Stock, a number of shares of Common Stock Equivalent Price multiplied by equal to 110% of the number of shares of Common Stock into which one share issuable upon conversion of all outstanding shares of Series B Preferred Stock. The Corporation shall take all action permitted by law, including calling meetings of stockholders of the Corporation and soliciting proxies for any necessary vote of the stockholders of the Corporation, to amend the Certificate of Incorporation to increase the number of authorized and unissued shares of Common Stock (or to otherwise comply with the provisions of Section 6.2 of the Stockholders Agreement) if at any time there shall be insufficient authorized and unissued shares of Common Stock to permit such reservation or to permit the conversion of all outstanding shares of Series B Preferred Stock. The Corporation covenants that the Series B Preferred Stock and all Common Stock that may be issued upon conversion of Series B Preferred Stock shall upon issuance be duly authorized, fully paid and non-assessable, will not subject the holders thereof to personal liability and will not be subject to preemptive rights or subscription rights of any other stockholder of the Corporation, other than the subscription rights provided in the Stockholders Agreement. The Corporation further covenants that, if at any time the Common Stock shall be listed on the New York Stock Exchange or any other securities exchange or quoted on an automated quotation system, the Corporation shall, if permitted by the rules of such convertible capital stock is convertiblenational exchange or automated quotation system, at its sole expense, cause to be authorized for listing or quotation on such exchange or automated quotation system, all Common Stock issuable upon conversion of the Series B Preferred Stock, subject to official notice of issuance. The “Corporation will use its best efforts to ensure that such Common Stock Equivalent Price” shall initially may be the closing offering price in the Next Financing and shall be adjusted as set forth in Section 2.2(d) belowissued without violation of any applicable law or regulation or any requirement of such securities exchange or automated quotation system.

Conversion Right. Provided that Subject to and upon compliance with the Merger is consummatedprovisions of this Indenture, upon written notice to each holder of Securities shall have the Borrower, the Holder mayright, at its sole his or her option, at any time on or before the effective date close of business on the Merger last trading day prior to the Maturity Date (as defined belowsubject to the next paragraph), or at any time thereafter until to convert the principal balance amount of this Noteany Security held by such holder, together with all accrued and unpaid interestor any portion of such principal amount which is $1,000 or an integral multiple thereof, is paid in fullinto (a) $598.47 per $1,000 principal amount of Securities (the “Cash Conversion Payment”), convert the entire outstanding principal hereunder and all accrued and unpaid interest thereon into such plus (b) that number of shares of fully paid and non-assessable equity securities issued by the Borrower to its members in connection with the conversion shares of their Membership Interests in the Company pursuant to the Merger (the “New Securities”), that is equal to the quotient of (A) the outstanding principal hereunder plus all accrued and unpaid interest thereon divided by (B) the Conversion Price Common Stock (as defined below). In addition, in connection with such conversion, the Holder shares shall receive rights as a purchaser and holder of New Securities (including, without limitation, customary registration rightsthen be constituted) no less favorable in the aggregate and in any single instance than those granted to any other purchaser of New Securities. The Borrower agrees that it has no right to prevent the Holder from effecting such conversion without the Holder’s consent, whether obtained by attempting to prepay this Note (whether or not there shall have been a default hereunder) or otherwise. The “Conversion Price” shall multiplying (i) if the New principal amount of the Securities are common stockor portion thereof to be converted by (ii) a conversion rate of 34.6144 shares per $1,000 principal amount of Securities (as adjusted from time to time as provided in this Article, par value the “Shares Portion of the Conversion Rate;” and together with the Cash Conversion Payment, the “Conversion Rate”). The initial Shares Portion of the Conversion Rate is equivalent to a conversion price of $0.001 28.8897 per share (the “Conversion Price”). Payment of the Conversion Rate, including the delivery of Common Stock”), will be equal made to holders surrendering Securities no later than the tenth business day following the applicable conversion date. Notwithstanding the foregoing paragraph, the holders’ right to conversion will terminate: (a) with respect to any Security or portion thereof which is called for redemption prior to the Common Stock Equivalent Price (as defined below) or (ii) if the New Securities are convertible capital stock, the Conversion Price shall be an amount equal last trading day prior to the Common Stock Equivalent Price multiplied by Maturity Date, on the number close of shares business on the last trading day preceding the Redemption Date (unless the Company defaults in payment of the redemption price in which case the conversion right will terminate at the close of business on the date such default is cured) and (b) with respect to any Security or portion thereof subject to a duly completed election for repurchase, on the close of business on the 30th day after the date of the Fundamental Change Notice (unless the Company defaults in the payment due upon repurchase or such holder elects to withdraw the submission of such election to repurchase in accordance with Section 3.14). A holder of Securities is not entitled to any rights of a holder of Common Stock into which one share until such holder of Securities has converted his or her Securities to Common Stock, and only to the extent such convertible capital stock is convertible. The “Securities are deemed to have been converted to Common Stock Equivalent Price” shall initially be the closing offering price in the Next Financing and shall be adjusted as set forth in Section 2.2(d) belowunder this Article 11.

Conversion Right. Provided that (a) Each Lender may, at any time subsequent to the consummation of the Merger is consummatedAgreement, upon regardless of whether or not any Event of Default shall have occurred, exchange all of the amount owed to such Lender hereunder for common shares of Tetragenex Pharmaceuticals, Inc. at the Conversion Price (such right a "CONVERSION RIGHT" and such shares received, the "CONVERSION SHARES"). (i) Any Lender that desires to exercise its Conversion Right shall provide written notice to the BorrowerAdministrative Agent and to each of the Borrowers stating that such Lender is exercising such right and stating the amount o▇▇▇ ▇▇ such Lender which is to be converted to Conversion Shares. As promptly as practical after, and in any case within 5 days of, receipt of such notice from any Lender, Tetragenex Pharmaceuticals, Inc. shall issue and deliver to such Lender a certificate or certificates for the Holder maynumber of Conversion Shares issuable upon such conversion (rounding up if any fractional shares would otherwise be due), at based upon the Conversion Price. (ii) The "Conversion Price" shall initially be $5.25 per Conversion Share and shall be adjusted to account for any and all stock splits, reverse stock splits, and recapitalizations (it being agreed that no sales of securities by either Borrower shall constitute a "recapitalization" for purposes of this SECTION 8) such that any Lender exercising its sole option, at Conversion Right shall receive Conversion Shares representing the effective date same percentage of total shares outstanding as such Lender would have been entitled to were such Lender to have exercised its Conversion Right immediately upon the effectiveness of the Merger Agreement. (as defined below)iii) Upon issuance of any Conversion Shares, or at any time thereafter until Tetragenex Pharmaceuticals, Inc. shall provide written notice of such issuance to the principal balance of this NoteAdministrative Agent, together with all accrued and unpaid interest, is paid in full, convert the entire outstanding principal hereunder and all accrued and unpaid interest thereon into a written acknowledgement of receipt of such number of shares of fully paid and non-assessable equity securities issued Conversion Shares by the Borrower to its members in connection applicable Lender. Upon receipt of such notice (together with the conversion of their Membership Interests in the Company pursuant to the Merger (the “New Securities”such acknowledgement), that is equal to the quotient of (A) the outstanding principal hereunder plus all accrued amount owed under this Note shall be reduced by the amount converted pursuant to the applicable Lender's request and unpaid interest thereon divided by (B) SCHEDULE 1 hereto shall be automatically amended to reflect the reduction in the amount owed to such Lender, and the reduction in such Lender's proportionate share of the amounts owed hereunder. (b) For so long this Note or any Conversion Shares remain outstanding, (a) on each occasion that Tetragenex Pharmaceuticals, Inc. registers under the Securities Act of 1933, as amended (the "Securities Act"), any shares of its common stock (other than any registration on Form S-8) Tetragenex Pharmaceuticals, Inc. shall include in such registration any and all Conversion Shares then outstanding that have previously not been so registered, and (b) Tetragenex Pharmaceuticals, Inc. shall use all commercially reasonable efforts to cause to become effective a shelf registration statement under the Securities Act with respect to the resale of any and all Conversion Shares previously not so registered no later than the first anniversary of the date on which Tetragenex Pharmaceuticals, Inc. first registered any of its securities under the Securities Act, provided that if the Conversion Price (as defined below). In addition, in connection with such conversionShares of each Lender holding Conversion Shares are eligible for sale under Rule 144(k) of the Securities Act, the Holder Lenders shall receive not have registration rights as a purchaser and holder at such time. This clause (b) shall survive termination of New Securities this Note. (including, without limitation, customary registration rightsc) no less favorable in the aggregate and in any single instance than those granted to any other purchaser of New Securities. The Borrower agrees that it has no right to prevent the Holder from effecting such conversion without the Holder’s consent, whether by attempting to prepay this Note (whether or not there shall have been a default hereunder) or otherwise. The “Any Conversion Price” shall (i) if the New Securities are common stock, par value $0.001 per share (the “Common Stock”), be equal to the Common Stock Equivalent Price (as defined below) or (ii) if the New Securities are convertible capital stock, the Conversion Price Shares issued hereunder shall be an amount equal subject to a voting proxy in favor of Tetragenex Pharmaceuticals, Inc. (d) Each certificate for Conversion Shares issued upon exercise by any Lender of its conversion right hereunder, unless at the Common Stock Equivalent Price multiplied by time of exercise such Conversion Shares are registered under the number of shares of Common Stock into which one share of such convertible capital stock is convertible. The “Common Stock Equivalent Price” Securities Act, shall initially be bear the closing offering price in the Next Financing and shall be adjusted as set forth in Section 2.2(dfollowing legend (or a substantively equivalent legend): "THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE "ACT") belowOR STATE SECURITIES LAWS AND NO TRANSFER OF THESE SECURITIES MAY BE MADE EXCEPT (A) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT AND THE RULES AND REGULATIONS THEREUNDER AND OF ALL APPLICABLE STATE SECURITIES OR "BLUE SKY" LAWS, OR (B) PURSUANT TO AN EXEMPTION THEREFROM UNDER SAID ACT AND ALL APPLICABLE STATE SECURITIES OR "BLUE SKY" LAWS."

Conversion Right. Provided that the Merger is consummated, upon written notice A. Subject to the Borrowerlimitations of clause B below, each Limited Partner who is an Original Limited Partner or an Affiliate of an Original Limited Partner (other than by virtue of clause (iv) of the Holder may, at its sole optiondefinition of Affiliate) shall have the right (the “Conversion Right”) to require the General Partner to convert on any Specified Conversion Date all or any portion of the Partnership Units held by such Limited Partner into REIT Shares or, at the effective date option of the Merger General Partner, to purchase (as defined below), or at to cause the Partnership to repurchase) all or any time thereafter until portion of the principal balance Partnership Units held by such Limited Partner for cash. The Conversion Right shall be exercised pursuant to a Notice of this Note, together with all accrued and unpaid interest, is paid in full, convert Conversion delivered to the entire outstanding principal hereunder and all accrued and unpaid interest thereon into such number of shares of fully paid and non-assessable equity securities issued General Partner by the Borrower to its members in connection with Limited Partner who is exercising the conversion of their Membership Interests in the Company pursuant to the Merger right (the “New SecuritiesConverting Partner”), that is equal accompanied by the certificate or certificates evidencing the Partnership Units to be converted. The General Partner shall inform the Converting Partner of its election with respect to the quotient manner in which the exercise of (A) the outstanding principal hereunder plus all accrued and unpaid interest thereon divided by (B) the Conversion Price (Right will be satisfied as defined provided in clause C below). In addition, in connection with such conversion, the Holder shall receive rights as a purchaser and holder of New Securities (including, without limitation, customary registration rights) no less favorable in the aggregate and in any single instance than those granted to any other purchaser of New Securities. The Borrower agrees that it has no right number of REIT Shares to prevent be issued to a Limited Partner upon exercise of the Holder from effecting such conversion without the Holder’s consent, whether by attempting to prepay this Note (whether or not there Conversion Right shall have been a default hereunder) or otherwise. The “Conversion Price” shall (i) if the New Securities are common stock, par value $0.001 per share (the “Common Stock”), be equal to the Common REIT Shares Conversion Amount. The amount of cash to be paid to a Limited Partner, at the option of the General Partner, upon exercise of the Conversion Right shall be equal to the Value of the REIT Shares Conversion Amount as of the Business Day on which the Conversion Right is duly exercised. B. Notwithstanding anything to the contrary contained in clause A above, no REIT Shares shall be issued to a Limited Partner pursuant to clause A above to the extent that the issuance of such REIT Shares would either: (1) cause the aggregate value of the Capital Stock Equivalent Price owned by the following Persons (either as defined belowdirect owners or Beneficial Owners): (i) or the Original Limited Partners and their Affiliates (excluding any Affiliate who is such by virtue of clause (iv) of the definition of Affiliate), and (ii) if any Person who has obtained REIT Shares directly from an Original Limited Partner or an Affiliate of an Original Limited Partner (excluding any Affiliate who is such by virtue of clause (iv) of the New Securities are convertible capital stockdefinition of Affiliate) or pursuant to Section 11.3.C hereof, or any transferee of such Person (but only to the extent that the value of the Capital Stock owned by such Person or transferee (as a direct owner or a Beneficial Owner) exceeds five percent (5%) of the aggregate value of the total Capital Stock issued and outstanding) to exceed twenty-four and 9/10 percent (24.9%) of the aggregate value of the total Capital Stock issued and outstanding as of the Specified Conversion Date; or (2) cause the General Partner to be considered to be closely held within the meaning of Section 856(a)(6) of the Code as of the Specified Conversion Date. C. Within twenty (20) Business Days after the Business Day on which the Conversion Right is duly exercised, the General Partner shall inform the Converting Partner, in writing, (i) whether it elects to purchase (or to cause the Partnership to repurchase) all or any portion of the Partnership Units to which the Notice of Conversion Price shall be an amount equal relates for cash, and (ii) whether the Converting Partner is not entitled to exercise the Common Stock Equivalent Price multiplied by the Conversion Right with respect to a specified number of shares Partnership Units by virtue of Common Stock into which one share clause B above and, if so, stating either that the General Partner will purchase (or will cause the Partnership to repurchase) such number of Partnership Units or that the Board of Directors of the General Partner, acting by a majority of its Independent Directors, has made the good faith determination that both the General Partner and the Partnership lack available funds, consistent with Section 5.2 hereof, to make such convertible capital stock is convertiblepurchase/repurchase. The “Common Stock Equivalent Price” shall initially be General Partner may elect the closing offering price in the Next Financing and shall be adjusted as option set forth in Section 2.2(dthe foregoing clause (i) belowonly to the extent it and/or the Partnership have available funds to make such purchase/repurchase. If the General Partner informs the Converting Partner pursuant to the foregoing clause (ii) that both it and the Partnership lack available funds to make such purchase/repurchase in full, it shall also inform the Converting Partner of the portion, if any, of the Partnership Units which it and/or the Partnership have available funds to purchase/repurchase. In the event the General Partner informs a Converting Partner that such Converting Partner is not entitled to convert any portion of the Partnership Units held by such Converting Partner into REIT Shares pursuant to clause B above, and in the further event that the General Partner informs such Converting Partner that it lacks available funds to purchase (or that the Partnership lacks available funds to repurchase) any portion of such Partnership Units which the Converting Partner is not entitled to convert into REIT Shares, such Converting Partner shall be deemed to have withdrawn his Notice of Conversion with respect to that portion of his Partnership Units as to which he is not entitled to exercise the Conversion Right by virtue of clause B above and which the General Partner and the Partnership lack adequate funds to purchase/repurchase.

Conversion Right. Provided The Holder shall have the right from time to time, and at any time during the period beginning on the date that is six months following the Merger is consummated, upon written notice to the Borrower, the Holder may, at its sole option, at the effective date of this Note and ending on the Merger later of: (i) the Maturity Date, or (ii) the date of payment of the Default Amount (as defined belowin Article III), or at any time thereafter until each in respect of the principal balance remaining outstanding amount of this Note, together with Note to convert all accrued or any part of the outstanding and unpaid interest, is paid in full, convert the entire outstanding principal hereunder and all accrued and unpaid interest thereon amount of this Note into such number of shares of fully paid and non-assessable equity shares of Common Stock, as such Common Stock exists on the Issue Date, or any shares of capital stock or other securities issued by of the Borrower to its members in connection with the conversion of their Membership Interests in the Company pursuant to the Merger into which such Common Stock shall hereafter be changed or reclassified (the “New SecuritiesConversion Shares”), that is equal to ) at the quotient of conversion price (A) the outstanding principal hereunder plus all accrued and unpaid interest thereon divided by (B) the Conversion Price (as defined below). In addition, in connection with such conversion, the Holder shall receive rights as a purchaser and holder of New Securities (including, without limitation, customary registration rights) no less favorable in the aggregate and in any single instance than those granted to any other purchaser of New Securities. The Borrower agrees that it has no right to prevent the Holder from effecting such conversion without the Holder’s consent, whether by attempting to prepay this Note (whether or not there shall have been a default hereunder) or otherwise. The “Conversion Price” shall ”) determined as provided herein (i) if the New Securities are common stock, par value $0.001 per share (the a “Common StockConversion”), be equal to the Common Stock Equivalent Price (as defined below) or (ii) if the New Securities are convertible capital stock, the Conversion Price shall be an amount equal to the Common Stock Equivalent Price multiplied by the . The number of shares of Common Stock into which one share to be issued upon each conversion of this Note shall be determined by dividing the Conversion Amount (as defined below) by the applicable Conversion Price then in effect on the date specified in the notice of conversion, in the form attached hereto as Exhibit A (the “Notice of Conversion”), delivered to the Borrower by the Holder in accordance with Section 1.4 below; provided that the Notice of Conversion is submitted by facsimile or e-mail (or by other means resulting in, or reasonably expected to result in, notice) to the Borrower before 6:00 p.m., New York, New York time on such convertible capital stock conversion date (the “Conversion Date”); however, if the Notice of Conversion is convertiblesent after 6:00 p.m., New York, New York time the Conversion Date shall be the next business day. The term “Common Stock Equivalent PriceConversion Amount” shall initially means, with respect to any conversion of this Note, the sum of: (1) the principal amount of this Note to be converted in such conversion plus; (2) at the closing offering price Holder’s option, accrued and unpaid interest, if any, on such principal amount at the interest rates provided in this Note to the Conversion Date, plus; (3) at the Holder’s option, Default Interest, if any, on the amounts referred to in the Next Financing and shall be adjusted as set forth in immediately preceding clauses (1) and/or (2) plus; (4) at the Holder’s option, any amounts owed to the Holder pursuant to Section 2.2(d) below1.4 hereof.

Conversion Right. Provided that The Holder shall have the Merger is consummated, upon written notice to right from and after the Borrower, the Holder may, at its sole option, at the effective date of the Merger (as defined below), or Issuance Date and then at any time thereafter until on or prior to the principal balance of date this Note, together with all accrued and unpaid interest, Note is paid in full, to convert at any time all or from time to time any part of the entire outstanding and unpaid principal hereunder amount of this Note of at least $10,000, or such lesser amount as shall remain unpaid at the time of the conversion or may be permitted from time to time by the Company in its discretion, and all accrued and unpaid interest on the principal amount to be converted and on any such interest, into fully paid and nonassessable shares of Common Stock at the Conversion Price in effect on the date the applicable Conversion Notice is given in accordance with this Note. Notwithstanding any other provision of this Note, in no event shall the Holder be entitled at any time to convert any portion of the principal amount of this Note (and accrued and unpaid interest thereon into and on any such number interest) in excess of shares that portion of fully paid the principal amount of this Note (and non-assessable equity securities issued by the Borrower to its members in connection with the conversion of their Membership Interests in the Company pursuant to the Merger (the “New Securities”), that is equal to the quotient of (A) the outstanding principal hereunder plus all accrued and unpaid interest thereon divided by and on any such interest) upon conversion of which the sum of (B1) the Conversion Price (as defined below). In addition, in connection with such conversion, the Holder shall receive rights as a purchaser and holder of New Securities (including, without limitation, customary registration rights) no less favorable in the aggregate and in any single instance than those granted to any other purchaser of New Securities. The Borrower agrees that it has no right to prevent the Holder from effecting such conversion without the Holder’s consent, whether by attempting to prepay this Note (whether or not there shall have been a default hereunder) or otherwise. The “Conversion Price” shall (i) if the New Securities are common stock, par value $0.001 per share (the “Common Stock”), be equal to the Common Stock Equivalent Price (as defined below) or (ii) if the New Securities are convertible capital stock, the Conversion Price shall be an amount equal to the Common Stock Equivalent Price multiplied by the number of shares of Common Stock into which one share beneficially owned by the Holder (including shares of such convertible capital stock is convertible. The “Common Stock Equivalent Price” beneficially owned by all Aggregated Persons) (other than shares of Common Stock deemed beneficially owned by the Holder or any Aggregated Person of the Holder through the ownership of (x) the unconverted portion of the principal amount of this Note and the Other Notes and accrued and unpaid interest thereon and on any such interest and (y) the unconverted or unexercised portion of any instrument which contains limitations similar to those set forth in this sentence) and (2) the number of shares of Common Stock issuable upon conversion of the portion of the principal amount of this Note and accrued and unpaid interest thereon and on any such interest with respect to which the determination in this sentence is being made, would result in beneficial ownership by the Holder and all Aggregated Persons of the Holder of more than 4.9% of the outstanding shares of Common Stock. For purposes of the immediately preceding sentence, beneficial ownership shall initially be determined in accordance with Section 13(d) of the closing offering price 1934 Act, and Regulation 13D-G thereunder, except as otherwise provided in clause (1) of the Next Financing immediately preceding sentence. For purposes of the second preceding sentence, the Company shall be entitled to rely, and shall be adjusted as set forth fully protected in Section 2.2(drelying, on any statement or representation made by the Holder to the Company in connection with a particular conversion, without any obligation on the part of the Company to make any inquiry or investigation or to examine its records or the records of any transfer agent for the Common Stock and without any liability of the Company with respect thereto. The number of shares of Common Stock to be issued upon each conversion of this Note shall be determined by dividing the sum of (1) belowthat portion of the principal amount of this Note to be converted plus (2) accrued and unpaid interest on such principal amount to the date the Conversion Notice for such conversion is given plus (3) Default Interest, if any, on the amount referred to in the immediately preceding clause (2) to the date such Conversion Notice is given, by the Conversion Price in effect on the date the Conversion Notice for such conversion is given.

Conversion Right. Provided that the Merger is consummated, upon written notice Subject to the Borrower(i) Borrower having obtained any required regulatory approvals, the Holder may, at its sole option, at the effective date failure of which to obtain prior to Lender owning 51% of the Merger Common Stock Outstanding would constitute a Material Adverse Effect (as defined belowin the Purchase Agreement), or and (ii) Lender having exercised the conversion right with respect to (A) the First Convertible Note and (B) the Second Convertible Note, Lender shall have the right (the "Conversion Right"), in its sole discretion, at any time thereafter until the principal balance of this Note, together with all accrued and unpaid interest, is paid in full, to elect to convert the entire outstanding principal hereunder and all accrued and unpaid interest thereon into such number of shares of fully paid and non-assessable equity securities issued nonassessable shares of Common Stock (such shares the "Conversion Shares") as determined by the Borrower to its members in connection with the conversion of their Membership Interests in the Company pursuant to the Merger (the “New Securities”), that is equal to the quotient of (A) dividing the outstanding principal hereunder plus all accrued and unpaid interest thereon divided by (B) the Conversion Price (as defined below). In addition; provided, in connection however, that Lender may convert the outstanding principal hereunder into Common Stock only to the extent that the Conversion Shares, when aggregated with such the Common Stock owned by Lender immediately prior to the conversion, would equal fifty-one percent (51%) of the Holder shall receive rights as a purchaser Common Stock Outstanding, accounting for all antidilution adjustments to then outstanding Convertible Securities and holder Options that would result from such issuance of New Securities (including, without limitation, customary registration rights) no less favorable in the aggregate and in any single instance than those granted to any other purchaser of New Securities. The Borrower agrees that it has no right to prevent the Holder from effecting such conversion without the Holder’s consent, whether by attempting to prepay this Note (whether or not there shall have been a default hereunder) or otherwiseConversion Shares. The “Conversion Price” shall (i) if be the New Securities are common stock, par value $0.001 per share (amount determined by dividing the “Common Stock”), be equal to the Common Stock Equivalent Price (as defined below) or (ii) if the New Securities are convertible capital stock, the Conversion Price shall be an amount equal to the Common Stock Equivalent Price multiplied outstanding principal hereunder by the number of shares of Common Stock into which one share that Lender needs to acquire in order to own 51% of such convertible capital stock is convertible. The “the Common Stock Equivalent Price” shall initially be Outstanding, accounting for all antidilution adjustments to then outstanding Convertible Securities and Options that would result from such issuance of the closing offering price in the Next Financing and shall be adjusted as set forth in Section 2.2(d) belowConversion Shares.

Conversion Right. Provided that (i) Subject to and in accordance with the Merger is consummatedprovisions of this Section 6, upon written notice to each Holder of shares of Series B Preferred Stock shall have the Borrower, right (the Holder may, at its sole option, at the effective date of the Merger (as defined below“Conversion Right”), or at any time thereafter until and from time to time, at such Holder’s option, to convert all or any portion of such Holder’s shares of Series B Preferred Stock into fully paid and non-assessable shares of Common Stock or such other shares of capital stock of the principal balance Corporation identical in all material respects to the Common Stock (except that the Corporation shall be required to (1) pay a dividend or distribution on such capital stock whenever and to such an extent that a dividend or distribution is paid on the Common Stock and (2) pay a dividend or distribution on the Common Stock whenever and to such an extent that a dividend or distribution is paid on such capital stock) as shall have been approved or consented to, in addition to any vote required by law, by the holders of a majority of the then issued and outstanding shares of Series B Preferred Stock (“Other Capital Stock,” and for purposes of this NoteSection 6 (and otherwise throughout this Certificate where such inclusion is appropriate by the context) Common Stock and Other Capital Stock shall be collectively referred to as “Common Stock”); provided, together with all accrued that the Conversion Right shall be exercisable only to the extent that there is a sufficient number of authorized and unpaid interestunissued (or issued and included in treasury) and otherwise unreserved shares of Common Stock into which such shares of Series B Preferred Stock sought to be converted may convert. Upon a Holder’s election to exercise the Conversion Right, each share of Series B Preferred Stock for which the Conversion Right is paid in full, convert the entire outstanding principal hereunder and all accrued and unpaid interest thereon exercised shall be converted into such number of shares of fully paid and non-assessable equity securities issued by the Borrower Common Stock (calculated as to its members in connection with the each conversion of their Membership Interests in the Company pursuant to the Merger (the “New Securities”), that is nearest 1/10,000th of a share) equal to the quotient of (A) the outstanding principal hereunder plus all accrued sum of (1) the Liquidation Preference and unpaid interest thereon (2) the Accrued Dividends of such share as of the Conversion Date, divided by (B) the Conversion Price (as defined below). In addition, of such share in connection with such effect at the time of conversion, the Holder shall receive rights as a purchaser and holder of New Securities (including, without limitation, customary registration rights) no less favorable in the aggregate and in any single instance than those granted to any other purchaser of New Securities. The Borrower agrees that it has no right to prevent the Holder from effecting such conversion without the Holder’s consent, whether by attempting to prepay this Note (whether or not there shall have been a default hereunder) or otherwise. The “Conversion Price” shall (i) if the New Securities are common stock, par value $0.001 per share (the “Common Stock”), be equal to the Common Stock Equivalent Price (as defined below) or . (ii) if No fractional shares of Common Stock shall be issued upon the New Securities are convertible capital stockconversion of any shares of Series B Preferred Stock. If more than one share of Series B Preferred Stock shall be surrendered for conversion at one time by the same Holder, the Conversion Price number of full shares of Common Stock issuable upon conversion thereof shall be computed on the basis of the sum of (A) the aggregate Liquidation Preference and (B) the aggregate Accrued Dividends as of the Conversion Date, on all shares of Series B Preferred Stock so surrendered. If the conversion of any share or shares of Series B Preferred Stock results in a fractional share of Common Stock issuable after application of the immediately preceding sentence, as applicable, the Corporation shall pay a cash amount in lieu of issuing such fractional share in an amount equal to such fractional interest multiplied by the Closing Price on the Trading Day immediately prior to the Conversion Date. (iii) The Corporation will (to the extent and for so long as the shares of Series B Preferred Stock is convertible) at all times reserve and keep available out of its authorized and unissued Common Stock, solely for the purpose of effecting conversions of the Series B Preferred Stock into shares of Common Stock, a number of shares of Common Stock Equivalent Price multiplied by equal to 110% of the number of shares of Common Stock into which one share issuable upon conversion of all outstanding shares of Series B Preferred Stock. The Corporation shall take all action permitted by law, including calling meetings of stockholders of the Corporation and soliciting proxies for any necessary vote of the stockholders of the Corporation, to amend the Certificate of Incorporation to increase the number of authorized and unissued shares of Common Stock (or to otherwise comply with the provisions of Section 6.2 of the Stockholders Agreement) if at any time there shall be insufficient authorized and unissued shares of Common Stock to permit such reservation or to permit the conversion of all outstanding shares of Series B Preferred Stock. The Corporation covenants that the Series B Preferred Stock and all Common Stock that may be issued upon conversion of Series B Preferred Stock shall upon issuance be duly authorized, fully paid and non-assessable, will not subject the holders thereof to personal liability and will not be subject to preemptive rights or subscription rights of any other stockholder of the Corporation, other than the subscription rights provided in the Stockholders Agreement. The Corporation further covenants that, if at any time the Common Stock shall be listed on the New York Stock Exchange or any other securities exchange or quoted on an automated quotation system, the Corporation shall, if permitted by the rules of such convertible capital stock is convertiblenational exchange or automated quotation system, at its sole expense, cause to be authorized for listing or quotation on such exchange or automated quotation system, all Common Stock issuable upon conversion of the Series B Preferred Stock, subject to official notice of issuance. The “Corporation will use its best efforts to ensure that such Common Stock Equivalent Price” shall initially may be the closing offering price in the Next Financing and shall be adjusted as set forth in Section 2.2(d) belowissued without violation of any applicable law or regulation or any requirement of such securities exchange or automated quotation system.

Conversion Right. Provided that The Holder shall have the Merger is consummatedright, upon written notice to the Borroweron any calendar day, the Holder may, at its sole option, at the effective date of the Merger (as defined below), or at any time thereafter until on or following the principal balance Issue Date, to convert all or any portion of this Note, together with all accrued the then outstanding and unpaid interest, is paid in full, convert the entire outstanding principal hereunder Principal Amount and all accrued and unpaid interest thereon (including any Default Interest) into such number of shares of fully paid and non-assessable equity shares of Common Stock, as such Common Stock exists on the Issue Date, or any shares of capital stock or other securities issued by of the Borrower to its members in connection with the conversion of their Membership Interests in the Company pursuant to the Merger (the “New Securities”)into which such Common Stock shall hereafter be changed or reclassified, that is equal to the quotient of (A) the outstanding principal hereunder plus all accrued and unpaid interest thereon divided by (B) at the Conversion Price (as defined below) determined as provided herein (a “Conversion”). In addition; by submitting to the Borrower or Borrower’s transfer agent a Notice of Conversion (as defined in this Note) by facsimile, e-mail or other reasonable means of communication dispatched on the Conversion Date (as defined in connection with this Note) prior to 11:59 p.m., New York, New York time; provided, however, that notwithstanding anything to the contrary contained herein, the a Holder shall not have the right to convert any portion of this Note, pursuant to Section 1 or otherwise, to the extent that after giving effect to such conversionissuance after conversion as set forth on the applicable Notice of Conversion, the Holder shall receive rights as a purchaser and holder of New Securities (including, without limitation, customary registration rights) no less favorable in the aggregate and in any single instance than those granted to any other purchaser of New Securities. The Borrower agrees that it has no right to prevent the Holder from effecting such conversion without together with the Holder’s consent, whether by attempting to prepay this Note (whether or not there shall have been a default hereunder) or otherwise. The “Conversion Price” shall (i) if the New Securities are common stock, par value $0.001 per share affiliates (the “Common StockAffiliates”), be equal to the Common Stock Equivalent Price and any other Persons (as defined below) acting as a group together with the Holder or any of the Holder’s Affiliates (ii) if such Persons, “Attribution Parties”)), would beneficially own in excess of the New Securities are convertible capital stockBeneficial Ownership Limitation (as defined below). For purposes of the foregoing sentence, the Conversion Price shall be an amount equal to the Common Stock Equivalent Price multiplied by the number of shares of Common Stock into which one share beneficially owned by the Holder and Attribution Parties shall include the number of such convertible capital stock is convertible. The “shares of Common Stock Equivalent Price” issuable upon conversion of this Note with respect to which such determination is being made, but shall initially exclude the number of shares of Common Stock which would be issuable upon (i) conversion of the closing offering price in remaining, nonconverted portion of this Note beneficially owned by the Next Financing Holder or any of its Affiliates or Attribution Parties and shall be adjusted (ii) exercise or conversion of the unexercised or nonconverted portion of any other securities of the Company subject to a limitation on conversion or exercise analogous to the limitation contained herein beneficially owned by the Holder or any of its Affiliates or Attribution Parties. Except as set forth in the preceding sentence, for purposes of this Section 2.2(d1.1, beneficial ownership shall be calculated in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended (the “1934 Act”) and the rules and regulations promulgated thereunder, it being acknowledged by the Holder that the Holder is solely responsible for any schedules required to be filed in accordance therewith. In addition, a determination as to any group status as contemplated above shall be determined in accordance with the 1934 Act and the rules and regulations promulgated thereunder. For purposes of this Section 1.1, in determining the number of outstanding shares of Common Stock, the Holder may rely on the number of outstanding shares of Common Stock as reflected in (A) the Company’s most recent periodic or annual report filed with the Commission, as the case may be, (B) a more recent public announcement by the Company or (C) a more recent written notice by the Company or the Transfer Agent setting forth the number of shares of Common Stock outstanding. Upon the written or oral request of the Holder, the Company shall within two Trading Days confirm orally and in writing to the Holder the number of shares of Common Stock then outstanding. In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise of securities of the Company, including this Note, by the Holder or its Affiliates or Attribution Parties since the date as of which such number of outstanding shares of Common Stock was reported. The “Beneficial Ownership Limitation” shall be 4.99% of the number of shares of the Common Stock outstanding at the time of the respective calculation hereunder. “Person” and “Persons” means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization, any other entity and any governmental entity or any department or agency thereof. The limitations contained in this paragraph shall apply to a successor holder of this Note. The number of Conversion Shares to be issued upon each conversion of this Note shall be determined by dividing the Conversion Amount (as defined below) by the applicable Conversion Price then in effect on the date specified in the notice of conversion, in the form attached hereto as Exhibit A (the “Notice of Conversion”), delivered to the Borrower or Borrower’s transfer agent by the Holder in accordance with the terms of this Note; provided that the Notice of Conversion is submitted by facsimile or e-mail (or by other means resulting in, or reasonably expected to result in, notice) to the Borrower or B▇▇▇▇▇▇▇’s transfer agent before 11:59 p.m., New York, New York time on such conversion date (the “Conversion Date”). The term “Conversion Amount” means, with respect to any conversion of this Note, the sum of (1) the Principal Amount of this Note to be converted in such conversion plus (2) at the Holder’s option, accrued and unpaid interest, if any, on such Principal Amount at the Interest Rate to the Conversion Date, plus (3) at the Holder’s option, Default Interest, if any, on the amounts referred to in the immediately preceding clauses (1) and/or (2). In addition to the beneficial ownership limitations provided in this Note, the sum of the number of shares of Common Stock that may be issued under this Note shall not exceed the Exchange Cap (as defined in the Purchase Agreement) as described in Section 4(p) of the Purchase Agreement, unless the Shareholder Approval (as defined in the Purchase Agreement) (“Shareholder Approval”) is obtained by the Company.

Conversion Right. Provided that the Merger is consummated, upon written notice to the Borrower, the Holder may, at its sole option, at the effective date of the Merger (as defined below), or at 1) At any time thereafter until after the principal balance earlier of this Note, together with all accrued and unpaid interest, is paid in full, convert the entire outstanding principal hereunder and all accrued and unpaid interest thereon into such number of shares of fully paid and non-assessable equity securities issued by the Borrower to its members in connection with the conversion of their Membership Interests in the Company pursuant to the Merger (the “New Securities”), that is equal to the quotient of (A) the outstanding principal hereunder plus all accrued and unpaid interest thereon divided by (B) the Conversion Price (as defined below). In addition, in connection with such conversion, the Holder shall receive rights as a purchaser and holder of New Securities (including, without limitation, customary registration rights) no less favorable in the aggregate and in any single instance than those granted to any other purchaser of New Securities. The Borrower agrees that it has no right to prevent the Holder from effecting such conversion without the Holder’s consent, whether by attempting to prepay this Note (whether or not there shall have been a default hereunder) or otherwise. The “Conversion Price” shall (i) if the New Securities are common stockJune 30, par value $0.001 per share (the “Common Stock”), be equal to the Common Stock Equivalent Price (as defined below) 2005 or (ii) if the New Securities are convertible following events (an "EARLY CONVERSION EVENT"): the execution of a definitive agreement relating to a merger, consolidation or reorganization of the Corporation with or into any other entity or entities in which the holders of the Corporation's capital stockstock receive cash, property or securities (other than securities issued by any party to the merger, consolidation or reorganization which result in the holders of the Corporation's voting capital stock prior to the merger, consolidation or reorganization holding not less than 66.67% of the voting power of the surviving entity) the execution of a definitive agreement relating to any sale, transfer or other disposition of all or substantially all the Corporation's assets, or adoption of any plan or arrangement relating to dissolution or liquidation of the Corporation (such merger, consolidation or reorganization, sale, transfer or disposition of assets or dissolution or liquidation being collectively referred to herein as a "TRANSACTION"), each holder of the Series B Preferred Stock will have the right, exercisable at the option of the holder, to convert some or all of such holder's shares of Series B Preferred Stock into Common Stock at the conversion price in effect at the time of conversion, determined as hereinafter provided. The price at which shares of Common Stock shall be delivered upon conversion (the "CONVERSION PRICE") shall initially be $7.04 per share of Common Stock; provided, however, that such initial Conversion Price shall be an amount equal subject to the Common Stock Equivalent Price multiplied by the adjustment from time to time in certain instances as hereinafter provided. The number of shares of Common Stock into which one to be issued upon conversion for each share of Series B Preferred shall be determined by dividing the Liquidation Amount per share then in effect by the Conversion Price then in effect. In the case of the call for redemption of the shares of Series B Preferred Stock, such convertible capital stock right of conversion shall cease and terminate as to the shares designated for redemption on the Redemption Date thereof; provided, however, that no such call for redemption shall affect a notice of conversion validly given by a holder prior to the Redemption Date. Within 10 days after an Early Conversion Event and at least 20 days prior to consummation of a Transaction, as defined below, and not less than 20 days prior to the record date or the date on which the Corporation's transfer books are closed in respect thereto, the Corporation shall give each holder of Series B Preferred Stock written notice, by first-class, postage prepaid, addressed to the registered holders of Series B Preferred Stock at the addresses of such holders as shown on the books of the Corporation, of an Early Conversion Event, which notice shall contain a summary of the principal terms of the proposed Transaction. If the notice of an Early Conversion Event is convertiblemailed prior to June 30, 2005, each holder of the Series B Preferred Stock shall have the right, exercisable at any time prior to the third business day prior to the closing of the Transaction, to request that its shares of Series B Preferred Stock be converted into shares of Common Stock. The “conversion shall be deemed to occur immediately prior to the Transaction. However, in the event that any Transaction scheduled to close prior to June 30, 2005 is not consummated for any reason, then the requested conversions will not be effected and each holder's Series B Preferred Stock stock certificate will be promptly returned to the holder. (2) To convert shares of Series B Preferred Stock into shares of Common Stock, the holder thereof shall surrender at the principal executive office of the Corporation both (i) the certificate or certificates therefor, duly endorsed to the Corporation or in blank, and (ii) provide written notice addressed to the Corporation that such holder elects to convert such shares. If the notice of conversion is received by the Corporation after June 30, 2005, the shares of Series B Preferred Stock shall be deemed to have been converted immediately prior to the close of business on the day of the surrender of such shares for conversion as herein provided, and the person entitled to receive the shares of Common Stock Equivalent Price” shall initially be the closing offering price in the Next Financing and issuable upon such conversion shall be adjusted treated for all purposes as set forth in Section 2.2(d) below.the record holder of such shares of Common Stock at such time. If the notice of conversion is received by the Corporation on or before June 30, 2005, such conversion shall be deemed effective in

Conversion Right. Provided that In addition to and without limiting the Merger is consummated, upon written notice to rights of the BorrowerWarrantholder under the terms of the Warrant, the Holder may, shall have the right (the "Conversion Right") to convert this Warrant or any portion thereof into Shares as provided in this Paragraph 2(c) at any time or from time to time prior to its sole option, at the effective date expiration. (a) Upon exercise of the Merger Conversion Right with respect to a particular number of Warrant (the "Converted Warrants"), the Company shall deliver to the Holder, without payment by the Holder of any Exercise Price or any cash or other consideration, that number of Shares computed using the following formula: X = Y(A-B) A Where: X = the number of Shares to be issued to the Holder; Y = the number of Shares to be converted under this Warrant; A = The average Current Market Price of a Share for the five Trading Days immediately preceding the Conversion Date (as defined below); or, or at any time thereafter until if the principal balance Shares are no longer trading as a Share, the combined average of this Note, together with all accrued the Current Market Prices of one share of Common Stock and unpaid interest, is paid in full, convert one Warrant for the entire outstanding principal hereunder and all accrued and unpaid interest thereon into such number of shares of fully paid and non-assessable equity securities issued by the Borrower to its members in connection with the conversion of their Membership Interests in the Company pursuant to the Merger (the “New Securities”), that is equal to the quotient of (A) the outstanding principal hereunder plus all accrued and unpaid interest thereon divided by (B) five Trading Days immediately preceding the Conversion Price Date (as defined below); and B = the Share Exercise Price. In addition, in connection with such conversionFor the purpose of this calculation, the Holder Current Market Price of a Share shall receive rights as be deemed to be the last sale price of the security on the primary trading market for the security on the day for which the price is being calculated. (b) No fractional Shares shall be issuable upon exercise of the Conversion Right, and if the number of Shares to be issued in accordance with the foregoing formula is other than a purchaser and holder of New Securities (includingwhole number, without limitation, customary registration rights) no less favorable in the aggregate and in any single instance than those granted Company shall pay to any other purchaser of New Securities. The Borrower agrees that it has no right to prevent the Holder from effecting such conversion without the Holder’s consent, whether by attempting to prepay this Note (whether or not there shall have been a default hereunder) or otherwise. The “Conversion Price” shall (i) if the New Securities are common stock, par value $0.001 per share (the “Common Stock”), be an amount in cash equal to the Common Stock Equivalent Price (as defined below) or (ii) if the New Securities are convertible capital stock, the Conversion Price shall be an amount equal to the Common Stock Equivalent Price such fraction multiplied by the Current Market Price. (c) The Conversion Right may be exercised by the Holder by the surrender of the Warrant at the principal office of the Company or at the office of the Company's stock transfer agent, if any, together with a written statement specifying that the Holder thereby intends to exercise the Conversion Right and indicating the number of shares Shares subject to the Warrant which are being surrendered on the reverse side of Common Stock into which one share the Warrant, in exercise of the Conversion Right. Such conversion shall be effective upon receipt by the Company of the Warrant, or on such convertible capital stock later date as is convertiblespecified therein (the "Conversion Date"), but not later than the Expiration Date. The “Common Stock Equivalent Price” shall initially be Certificates for the closing offering price Converted Shares issuable upon exercise of the Conversion Right, together with a check in payment of any fractional Warrant Share and, in the Next Financing case of a partial exercise a new Warrant evidencing the Shares remaining subject to the Warrant, shall be issued as of the Conversion Date and shall be adjusted as set forth in Section 2.2(ddelivered to the Holder within seven (7) belowdays following the Conversion Date.

Conversion Right. Provided that The Holder shall have the Merger is consummated, upon written notice to right from and after the Borrower, the Holder may, at its sole option, at the effective date of the Merger (as defined below), or original issuance of this Note and then at any time thereafter until on or prior to the principal balance of date this Note, together with all accrued and unpaid interest, Note is paid in full, to convert at any time all or from time to time any part of the entire outstanding and unpaid principal hereunder amount of this Note of at least $50,000, or such lesser amount as shall remain unpaid at the time of the conversion or may be permitted from time to time by the Company in its discretion, and all accrued and unpaid interest on the principal amount to be converted and on any such interest, into fully paid and nonassessable shares of Common Stock at the conversion price determined as provided herein (the "Conversion Price"). Notwithstanding any other provision of this Note, in no event shall the Holder be entitled at any time to convert any portion of the principal amount of this Note (and accrued and unpaid interest thereon into and on any such number interest) in excess of shares that portion of fully paid the principal amount of this Note (and non-assessable equity securities issued by the Borrower to its members in connection with the conversion of their Membership Interests in the Company pursuant to the Merger (the “New Securities”), that is equal to the quotient of (A) the outstanding principal hereunder plus all accrued and unpaid interest thereon divided by and on any such interest) upon conversion of which the sum of (B1) the Conversion Price (as defined below). In addition, in connection with such conversion, the Holder shall receive rights as a purchaser and holder of New Securities (including, without limitation, customary registration rights) no less favorable in the aggregate and in any single instance than those granted to any other purchaser of New Securities. The Borrower agrees that it has no right to prevent the Holder from effecting such conversion without the Holder’s consent, whether by attempting to prepay this Note (whether or not there shall have been a default hereunder) or otherwise. The “Conversion Price” shall (i) if the New Securities are common stock, par value $0.001 per share (the “Common Stock”), be equal to the Common Stock Equivalent Price (as defined below) or (ii) if the New Securities are convertible capital stock, the Conversion Price shall be an amount equal to the Common Stock Equivalent Price multiplied by the number of shares of Common Stock into which one share beneficially owned by the Holder (including shares of such convertible capital stock is convertible. The “Common Stock Equivalent Price” beneficially owned by any person whose beneficial ownership of shares of Common Stock would be aggregated with the Holder's beneficial ownership of shares of Common Stock for purposes of Section 13(d) of the Securities Exchange Act of 1934, as amended (the "1934 Act"), and Regulation 13D-G thereunder (each an "Aggregated Person" and collectively, the "Restricted Persons")) (other than shares of Common Stock deemed beneficially owned by the Holder or any Aggregated Person of the Holder through the ownership of (x) the unconverted portion of the principal amount of this Note and the Other Notes and accrued and unpaid interest thereon and on any such interest and (y) the unconverted or unexercised portion of any instrument which contains limitations similar to those set forth in this sentence) and (2) the number of shares of Common Stock issuable upon conversion of the portion of the principal amount of this Note and accrued and unpaid interest thereon and on any such interest with respect to which the determination in this sentence is being made, would result in beneficial ownership by the Holder and all Aggregated Persons of the Holder of more than 4.9% of the outstanding shares of Common Stock. For purposes of the immediately preceding sentence, beneficial ownership shall initially be determined in accordance with Section 13(d) of the closing offering price 1934 Act, and Regulation 13D-G thereunder, except as otherwise provided in clause (1) of the Next Financing immediately preceding sentence. For purposes of the second preceding sentence, the Company shall be entitled to rely, and shall be adjusted as set forth fully protected in Section 2.2(drelying, on any statement or representation made by the Holder to the Company in connection with a particular conversion, without any obligation on the part of the Company to make any inquiry or investigation or to examine its records or the records of any transfer agent for the Common Stock and without any liability of the Company with respect thereto. The number of shares of Common Stock to be issued upon each conversion of this Note shall be determined by dividing the sum of (1) below.that portion of the principal amount of this Note to be converted plus (2) accrued and unpaid interest on

Conversion Right. Provided that the Merger is consummated, upon written notice to the Borrower, the Holder may, at its sole option, at the effective date The holders of the Merger (as defined below), or Series D Preferred Stock may convert at any time thereafter until all or from time to time any part of their outstanding shares of Series D Preferred Stock into fully paid and nonassessable shares of Common Stock and such other securities and property as hereinafter provided. Commencing on the principal balance Issuance Date, and at any time thereafter, each share of this NoteSeries D Preferred Stock may be converted at the office of the Corporation or at such additional office or offices, together with all accrued and unpaid interestif any, is paid in fullas the Board of Directors may designate, convert the entire outstanding principal hereunder and all accrued and unpaid interest thereon into such number of shares of fully paid and non-assessable equity securities issued by the Borrower nonassessable shares of Common Stock (calculated as to its members in connection with the each conversion of their Membership Interests in the Company pursuant to the Merger nearest 1/100th of a share) determined by dividing (the “New Securities”), that is equal to the quotient of (Ax) the outstanding principal hereunder plus all accrued and unpaid interest thereon divided by (B) the Conversion Price (as defined below). In addition, in connection with such conversion, the Holder shall receive rights as a purchaser and holder sum of New Securities (including, without limitation, customary registration rights) no less favorable in the aggregate and in any single instance than those granted to any other purchaser of New Securities. The Borrower agrees that it has no right to prevent the Holder from effecting such conversion without the Holder’s consent, whether by attempting to prepay this Note (whether or not there shall have been a default hereunder) or otherwise. The “Conversion Price” shall (i) if the New Securities are common stock, par value $0.001 per share (the “Common Stock”), be equal to the Common Stock Equivalent Price (as defined below) or 1,000 plus (ii) if the New Securities are convertible capital stock, the Conversion Price shall be an amount equal to the Common accrued but unpaid dividends on the share of Series D Preferred Stock Equivalent being converted and any Arrearage Interest on dividends thereon in arrears to the applicable Conversion Date by (y) the Conversion Price multiplied by on the applicable Conversion Date; provided, however, that in no event shall any holder of shares of Series D Preferred Stock be entitled to convert any shares of Series D Preferred Stock in excess of that number of shares of Series D Preferred Stock upon conversion of which the sum of (1) the number of shares of Common Stock into which one share beneficially owned by such holder (including shares of Common Stock beneficially owned by all Aggregated Persons of such convertible capital stock is convertible. The “holder) (other than shares of Common Stock Equivalent Price” shall initially be deemed beneficially owned by such holder or any Aggregated Person of such holder through the closing offering price in ownership of (x) unconverted shares of Series D Preferred Stock and (y) the Next Financing and shall be adjusted as unconverted or unexercised portion of any instrument which contains limitations similar to those set forth in Section 2.2(dthis sentence) belowand (2) the number of shares of Common Stock issuable upon the conversion of the number of shares of Series D Preferred Stock with respect to which the determination in this proviso is being made, would result in beneficial ownership by such holder and all Aggregated Persons of such holder of more than 4.9% of the outstanding shares of Common Stock.

Conversion Right. Provided that The holder of this Debenture shall have the Merger is consummated, upon written notice to the Borrower, the Holder mayright, at its sole holder's option, at the effective date any time, to convert all, or, in multiples of the Merger (as defined below)$100,000, or at any time thereafter until the principal balance part of this Note, together with all accrued and unpaid interest, is paid in full, convert the entire outstanding principal hereunder and all accrued and unpaid interest thereon Debenture into such number of shares of fully paid and non-assessable equity securities nonassessable shares of common stock, $0.0001 par value, of Topro, Inc. (the "Common Stock") as shall be provided herein. The holder of this Debenture may exercise the conversion right by giving written notice (the "Conversion Notice") to Topro, Inc. of the exercise of such right and stating the name or names in which the stock certificate or stock certificates for the shares of Common Stock are to be issued and the address to which such certificates shall be delivered. The Conversion Notice shall be accompanied by the Borrower to its members in connection with the Debenture. The number of shares of Common Stock that shall be issuable upon conversion of their Membership Interests in the Company pursuant to Debenture shall equal the Merger (face amount of the “New Securities”), that is equal to the quotient of (A) the outstanding principal hereunder plus all accrued and unpaid interest thereon Debenture divided by (B) the Conversion Price (as defined below). In additionbelow and in effect on the date the Conversion Notice is given; provided, in connection with such conversionhowever, the Holder shall receive rights as a purchaser and holder of New Securities (including, without limitation, customary registration rights) no less favorable that in the aggregate and in any single instance than those granted to any other purchaser of New Securities. The Borrower agrees event that it has no right to prevent the Holder from effecting such conversion without the Holder’s consent, whether by attempting to prepay this Note (whether or not there Debenture shall have been a default hereunder) or otherwisepartially redeemed, shares of Common Stock shall be issued pro rata, rounded to the nearest whole share. The “Conversion Price” shall (i) if be deemed to have been effected on the New Securities are common stock, par value $0.001 per share date the Conversion Notice is received (the “Common Stock”"Conversion Date"). Within 20 business days after receipt of the Conversion Notice, be equal Borrower shall issue and deliver by hand against a signed receipt therefor or by United States registered mail, return receipt requested, to the Common Stock Equivalent Price (as defined below) or (ii) if the New Securities are convertible capital stock, address designated in the Conversion Price shall be an amount equal to the Common Stock Equivalent Price multiplied by Notice, a stock certificate or stock certificates of Borrower representing the number of shares of Common Stock into to which one share Holder is entitled and a check or cash in payment of such convertible capital stock is convertibleall interest accrued and unpaid on the Debenture up to and including the Conversion Date. The “Common Stock Equivalent Price” shall initially conversion rights will be governed by the closing offering price in the Next Financing and shall be adjusted as set forth in Section 2.2(d) below.following provisions:

Conversion Right. Provided that (1) Subject to regulatory approval, subsection 2.5(6) and Article 5 and any applicable restriction of the Merger is consummatedconversion of Debentures of such series), upon written notice commencing March 1, 2021, but subject to Section 6.5, a holder of the Borrower, Debentures shall have the Holder mayright, at its sole option, to require the Corporation to convert his Debentures into Subordinate Voting Shares or other securities o f the Corporation, at such conversion rate, and on the effective date of the Merger (as defined below)which expiring March 31, or at any time thereafter until the principal balance of this Note, together with all accrued and unpaid interest, is paid in full, convert the entire outstanding principal hereunder and all accrued and unpaid interest thereon into such number of shares of fully paid and non-assessable equity securities issued by the Borrower to its members in connection with the conversion of their Membership Interests in the Company pursuant to the Merger 2021 (the “New SecuritiesConversion Date”), that is all or any part of the Debentures held at a price equal to the quotient of (A) the outstanding principal hereunder plus all accrued and unpaid interest thereon divided by (B) the Conversion Price (as defined below)Price. In addition, in connection with such conversion, the Holder shall receive rights as a purchaser and Each holder of New Securities (including, without limitation, customary registration rights) no less favorable in Debentures who elects to have its Debentures converted by the aggregate and in any single instance than those granted to any other purchaser of New Securities. The Borrower agrees that it has no right to prevent Corporation shall so notify the Holder from effecting such conversion without the Holder’s consent, whether by attempting to prepay this Note (whether or not there shall have been Trustee during a default hereunder) or otherwise. The “Conversion Price” shall (i) if the New Securities are common stock, par value $0.001 per share period (the “Common StockConversion Notice Period”)) commencing on the Business Day immediately commencing on March 1, be equal 2021 and ending at 4:00 p.m. (Pacific time) on the date which is two Business Days prior to the Common Stock Equivalent Price Conversion Date. Any such notice (as defined belowa “Conversion Notice”) or (ii) if the New Securities are convertible capital stock, the Conversion Price shall be substantially in the form attached as Schedule “B” and when received by the Trustee from a holder shall be irrevocable. (2) Such right of conversion shall extend only to the maximum number of whole Subordinate Voting Shares into which the aggregate principal amount of the Debenture and any accrued or unpaid interests or Debentures surrendered for conversion at any one time by the holder thereof may be converted. Any such fraction shall be rounded down to the nearest whole Subordinate Voting Share. The Corporation will to pay cash to the Debenture holder in an amount equal to the Common Stock Equivalent Price any such fraction multiplied by the Conversion Price. If more than one Debenture shall be surrendered for conversion at one time by the same holder, the number of shares whole Subordinate Voting Shares issuable upon conversion thereof shall be computed on the basis of Common Stock into which one share the aggregate principal amount of such convertible capital stock is convertible. The “Common Stock Equivalent Price” shall initially Debentures to be the closing offering price in the Next Financing and shall be adjusted as set forth in Section 2.2(d) belowconverted.

Conversion Right. Provided that The Holder shall have the Merger is consummatedright, upon written notice to the Borroweron any calendar day, the Holder may, at its sole option, at the effective date of the Merger (as defined below), or at any time thereafter until on or following the principal balance Issue Date, to convert all or any portion of this Note, together with all accrued the then outstanding and unpaid interest, is paid in full, convert the entire outstanding principal hereunder Principal Amount and all accrued and unpaid interest thereon Default Interest (if any) into such number of shares of fully paid and non-assessable equity shares of Common Stock, as such Common Stock exists on the Issue Date, or any shares of capital stock or other securities issued by of the Borrower to its members in connection with the conversion of their Membership Interests in the Company pursuant to the Merger (the “New Securities”)into which such Common Stock shall hereafter be changed or reclassified, that is equal to the quotient of (A) the outstanding principal hereunder plus all accrued and unpaid interest thereon divided by (B) at the Conversion Price (as defined below) determined as provided herein (a “Conversion”). In addition, by submitting to the Borrower or Borrower’s transfer agent a Notice of Conversion (as defined in connection with such conversionthis Note) by facsimile, e-mail or other reasonable means of communication dispatched on the Conversion Date (as defined in this Note) prior to 11:59 p.m., New York, New York time; provided, however, that notwithstanding anything to the contrary contained herein, the Holder shall receive rights as a purchaser and holder of New Securities (including, without limitation, customary registration rights) no less favorable in not have the aggregate and in any single instance than those granted to any other purchaser of New Securities. The Borrower agrees that it has no right to prevent convert any portion of this Note, pursuant to Section 1 or otherwise, to the extent that after giving effect to such issuance after conversion as set forth on the applicable Notice of Conversion, the Holder from effecting such conversion without (together with the Holder’s consent, whether by attempting to prepay this Note (whether or not there shall have been a default hereunder) or otherwise. The “Conversion Price” shall (i) if the New Securities are common stock, par value $0.001 per share affiliates (the “Common StockAffiliates”), be equal to the Common Stock Equivalent Price and any other Persons (as defined below) acting as a group together with the Holder or any of the Holder’s Affiliates (ii) if such Persons, “Attribution Parties”)), would beneficially own in excess of the New Securities are convertible capital stockBeneficial Ownership Limitation (as defined below). For purposes of the foregoing sentence, the Conversion Price shall be an amount equal to the Common Stock Equivalent Price multiplied by the number of shares of Common Stock into which one share beneficially owned by the Holder and Attribution Parties shall include the number of such convertible capital stock is convertible. The “shares of Common Stock Equivalent Price” issuable upon conversion of this Note with respect to which such determination is being made, but shall initially exclude the number of shares of Common Stock which would be issuable upon (i) conversion of the closing offering price in remaining, nonconverted portion of this Note beneficially owned by the Next Financing Holder or any of its Affiliates or Attribution Parties and shall be adjusted (ii) exercise or conversion of the unexercised or nonconverted portion of any other securities of the Company subject to a limitation on conversion or exercise analogous to the limitation contained herein beneficially owned by the Holder or any of its Affiliates or Attribution Parties. Except as set forth in the preceding sentence, for purposes of this Section 2.2(d1.1, beneficial ownership shall be calculated in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended (the “1934 Act”) and the rules and regulations promulgated thereunder, it being acknowledged by the Holder that the Holder is solely responsible for any schedules required to be filed in accordance therewith. In addition, a determination as to any group status as contemplated above shall be determined in accordance with Section 13(d) of the 1934 Act and the rules and regulations promulgated thereunder. For purposes of this Section 1.1, in determining the number of outstanding shares of Common Stock, the Holder may rely on the number of outstanding shares of Common Stock as reflected in (A) the Company’s most recent periodic or annual report filed with the Commission, as the case may be, (B) a more recent public announcement by the Company or (C) a more recent written notice by the Company or the Transfer Agent setting forth the number of shares of Common Stock outstanding. Upon the written or oral request of the Holder, the Company shall within two Trading Days confirm orally and in writing to the Holder the number of shares of Common Stock then outstanding. In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise of securities of the Company, including this Note, by the Holder or its Affiliates or Attribution Parties since the date as of which such number of outstanding shares of Common Stock was reported. The “Beneficial Ownership Limitation” shall be 4.99% of the number of shares of the Common Stock outstanding at the time of the respective calculation hereunder. “Person” and “Persons” means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization, any other entity and any governmental entity or any department or agency thereof. The limitations contained in this paragraph shall apply to a successor holder of this Note. The number of Conversion Shares to be issued upon each conversion of this Note shall be determined by dividing the Conversion Amount (as defined below) by the applicable Conversion Price then in effect on the date specified in the notice of conversion, in the form attached hereto as Exhibit A (the “Notice of Conversion”), delivered to the Borrower or Borrower’s transfer agent by the Holder in accordance with the terms of this Note; provided that the Notice of Conversion is submitted by facsimile or e-mail (or by other means resulting in, or reasonably expected to result in, notice) to the Borrower or ▇▇▇▇▇▇▇▇’s transfer agent before 11:59 p.m., New York, New York time on such conversion date (the “Conversion Date”). The term “Conversion Amount” means, with respect to any conversion of this Note, the sum of (1) the Principal Amount of this Note to be converted in such conversion plus (2), at the Holder’s Option, Default Interest, if any, on the amount referred to in the immediately preceding clause (1). In addition to the beneficial ownership limitations provided in this Note, the sum of the number of shares of Common Stock that may be issued under this Note shall be limited to the amount described in Section 4(r) of the Purchase Agreement, unless the Shareholder Approval (as defined in the Purchase Agreement) (“Shareholder Approval”) is obtained by the Company.

Conversion Right. Provided that the Merger is consummated, upon Upon written notice to the Borrower, the Holder may, at its sole option, at upon the effective date initial closing of the Merger Borrower’s next round of equity financing (as defined belowthe “Next Financing”), or at any time thereafter until the principal balance of this Note, together with all accrued and unpaid interest, is paid in full, convert the entire outstanding principal hereunder and all interest accrued and unpaid interest thereon into such number of shares of fully paid and non-assessable equity securities issued by the Borrower to its members (or the parent of the Borrower, as the case may be) in connection with the conversion of their Membership Interests in the Company pursuant to the Merger such financing (the “New Securities”), that is equal to the quotient of (A) the outstanding principal hereunder plus all accrued and unpaid interest thereon divided by (B) the Conversion Price (as defined below). In addition, in connection with such conversion, the Holder shall receive rights as a purchaser and holder of New Securities (including, without limitation, customary registration rights) no less favorable in the aggregate and in any single instance than those granted to any other purchaser of New Securities. The Borrower agrees that it has no right to prevent the Holder from effecting such conversion without the Holder’s consent, whether by attempting to prepay this Note (whether or not there shall have been a default hereunder) or otherwise. The “Conversion Price” shall (i) if the New Securities are common stock, par value $0.001 per share of the Borrower (the “Common Stock”) (or the common stock of the parent of the Borrower, as the case may be), be equal to the Common Stock Equivalent Price (as defined below) or (ii) if the New Securities are convertible capital stockstock of the Borrower (or of the parent of the Borrower as the case may be), the Conversion Price shall be an amount equal to the Common Stock Equivalent Price multiplied by the number of shares of Common Stock into which one share of such convertible capital stock is convertible. If the Holder does not convert this Note into the Next Financing, then the conversion rights under this Section 2.1 shall lapse and be of no further force and effect, provided that the other provisions of this Note shall remain in full force and effect. The “Common Stock Equivalent Price” shall initially be the closing offering price in the Next Financing $0.80 and shall be adjusted as set forth in Section 2.2(d2.1(d) below.

Conversion Right. Provided that The Holder shall have the Merger right (a) during the ---------------- period from and after the Issuance Date and ending on the date which is consummated119 days after the Issuance Date, upon written notice to convert at any one time or from time to time up to an aggregate of 50% of the original principal amount of this Note and (b) on and after the date which is 120 days after the Issuance Date to the Borrower, the Holder may, at its sole option, at the effective date of the Merger (as defined below), or at any time thereafter until the principal balance of this Note, together with all accrued and unpaid interest, Note is paid in full, to convert at any time all or from time to time any part of the entire outstanding and unpaid principal hereunder amount of this Note, in each such case of at least $25,000, or such lesser amount as shall remain unpaid at the time of the conversion or may be permitted from time to time by the Company in its discretion, and all in each such case accrued and unpaid interest on the principal amount to be converted and on any such interest, into fully paid and nonassessable shares of Common Stock at the Conversion Price in effect on the date the applicable Conversion Notice is given in accordance with this Note. Notwithstanding any other provision of this Note, in no event shall the Holder be entitled at any time to convert any portion of the principal amount of this Note (and accrued and unpaid interest thereon into and on any such number interest) in excess of shares that portion of fully paid the principal amount of this Note (and non-assessable equity securities issued by the Borrower to its members in connection with the conversion of their Membership Interests in the Company pursuant to the Merger (the “New Securities”), that is equal to the quotient of (A) the outstanding principal hereunder plus all accrued and unpaid interest thereon divided by and on any such interest) upon conversion of which the sum of (B1) the Conversion Price (as defined below). In addition, in connection with such conversion, the Holder shall receive rights as a purchaser and holder of New Securities (including, without limitation, customary registration rights) no less favorable in the aggregate and in any single instance than those granted to any other purchaser of New Securities. The Borrower agrees that it has no right to prevent the Holder from effecting such conversion without the Holder’s consent, whether by attempting to prepay this Note (whether or not there shall have been a default hereunder) or otherwise. The “Conversion Price” shall (i) if the New Securities are common stock, par value $0.001 per share (the “Common Stock”), be equal to the Common Stock Equivalent Price (as defined below) or (ii) if the New Securities are convertible capital stock, the Conversion Price shall be an amount equal to the Common Stock Equivalent Price multiplied by the number of shares of Common Stock into which one share beneficially owned by the Holder (including shares of such convertible capital stock is convertible. The “Common Stock Equivalent Price” beneficially owned by all Aggregated Persons) (other than shares of Common Stock deemed beneficially owned by the Holder or any Aggregated Person of the Holder through the ownership of (x) the unconverted portion of the principal amount of this Note and the Other Notes and accrued and unpaid interest thereon and on any such interest and (y) the unconverted or unexercised portion of any instrument which contains limitations similar to those set forth in this sentence) and (2) the number of shares of Common Stock issuable upon conversion of the portion of the principal amount of this Note and accrued and unpaid interest thereon and on any such interest with respect to which the determination in this sentence is being made, would result in beneficial ownership by the Holder and all Aggregated Persons of the Holder of more than 4.9% of the outstanding shares of Common Stock. For purposes of the immediately preceding sentence, beneficial ownership shall initially be determined in accordance with Section 13(d) of the closing offering price 1934 Act, and Regulation 13D-G thereunder, except as otherwise provided in clause (1) of the Next Financing immediately preceding sentence. For purposes of the second preceding sentence, the Company shall be entitled to rely, and shall be adjusted as set forth fully protected in Section 2.2(drelying, on any statement or representation made by the Holder to the Company in connection with a particular conversion, without any obligation on the part of the Company to make any inquiry or investigation or to examine its records or the records of any transfer agent for the Common Stock and without any liability of the Company with respect thereto. The number of shares of Common Stock to be issued upon each conversion of this Note shall be determined by dividing the sum of (1) belowthat portion of the principal amount of this Note to be converted plus ---- (2) accrued and unpaid interest on such principal amount to the date the Conversion Notice for such conversion is given plus (3) accrued and unpaid ---- Default Interest, if any, on the amount referred to in the immediately preceding clause (2) to the date such Conversion Notice is given, by the Conversion Price in effect on the date the Conversion Notice for such conversion is given.

Conversion Right. Provided that (i) At any time or times on or after the Merger is consummated, upon written notice to the Borrowerdate hereof, the Holder may, at its sole option, at the effective date shall be entitled to convert any portion of the Merger outstanding and unpaid Conversion Amount (as defined below), or at any time thereafter until the principal balance of this Note, together with all accrued and unpaid interest, is paid in full, convert the entire outstanding principal hereunder and all accrued and unpaid interest thereon ) into such number of shares of fully paid and non-assessable equity securities issued by the Borrower to its members nonassessable shares of Common Stock in connection accordance with the conversion of their Membership Interests in the Company pursuant to the Merger (the “New Securities”Section 6(c), that is equal to the quotient of (A) the outstanding principal hereunder plus all accrued and unpaid interest thereon divided by (B) at the Conversion Price Rate (as defined below). In additionThe Company shall not issue any fraction of a share of Common Stock upon any conversion. If the issuance would result in the issuance of a fraction of a share of Common Stock equal to or in excess of one half of one share, the Company shall round such fraction of a share of Common Stock up to the nearest whole share. The Company shall pay any and all stock transfer, stamp, documentary and similar taxes (excluding any taxes on the income or gain of the Holder) that may be payable with respect to the issuance and delivery of shares of Common Stock to the Holder upon conversion of any Conversion Amount. (ii) If all or any of the principal and accrued but unpaid interest underlying this Note remains outstanding prior to the next sale by the Company, subsequent to the financing pursuant to which this Note was issued, to one or more investors of securities (the “Financing Securities”), in connection with such conversionone transaction or a series of related transactions (a “Qualified Financing”), the Holder shall receive rights as a purchaser and holder principal amount of New Securities (includingthis Note plus all accrued but unpaid interest thereon, without limitationor any portion thereof, customary registration rights) no less favorable in shall, at the aggregate and in any single instance than those granted to any other purchaser option of New Securities. The Borrower agrees that it has no right to prevent the Holder from effecting such conversion without the Holder’s consent, whether by attempting be converted into Financing Securities at a price per share equal to prepay this Note (whether or not there shall have been a default hereunder) or otherwise. The “Conversion Price” shall the lower of (i) if the New Securities are common stock, par value $0.001 per share (the “Common Stock”), be equal to the Common Stock Equivalent Conversion Price (as defined below) or (ii) if the New Securities are convertible capital stockprice per share payable by the investors in the Qualified Financing. As a precondition to the conversion of principal and accrued but unpaid interest under this Note, the Conversion Price Holder must, unless waived by the Company, satisfy all reasonable conditions established by the Company and the lead investor(s) in the applicable financing, including without limitation, qualifying as an “accredited investor” (if such qualification is a condition to participating in such offering) and the execution and delivery by the Holder of all documents reasonably required to be delivered in connection with such financing. The Company covenants that all shares of Financing Securities issued upon conversion will, upon issuance, be fully paid and non-assessable and free from all taxes, liens and charges caused or created by the Company with respect to the issue thereof. Notice of a Qualified Financing shall be an amount equal given by the Company to the Common Stock Equivalent Price multiplied by Holder at least five (5) days prior to the closing date of such financing. If this Note is converted into Financing Securities in such financing, this Note shall be surrendered to the Company within five (5) days of the closing of such financing at the Company’s registered office. The Holder or the Holder’s nominee or permitted assignee, shall be entitled to be entered in the books of the Company as the holder of the number of shares of Common Stock Financing Securities into which one share this Note is convertible in accordance with the provisions hereof and, as soon as practicable thereafter, the Company shall deliver to the Holder or, subject as aforesaid, its nominee or permitted assignee, a certificate for such Financing Securities. Any part of this Note may be converted as provided herein and all references in this Note to conversion of this Note shall be deemed to include conversion of such convertible capital stock is convertible. The “Common Stock Equivalent Price” shall initially be the closing offering price in the Next Financing and shall be adjusted as set forth in Section 2.2(d) belowpart.

Conversion Right. Provided that The Holder shall have the Merger right on and after the date which is consummated, upon written notice 90 days after the Issuance Date to the Borrower, the Holder may, at its sole option, at the effective date of the Merger (as defined below), or at any time thereafter until the principal balance of this Note, together with all accrued and unpaid interest, Note is paid in full, to convert at any time all or from time to time any part of the entire outstanding and unpaid principal hereunder amount of this Note, in each such case of at least $10,000, or such lesser amount as shall remain unpaid at the time of the conversion or shall be convertible within the limitation on beneficial ownership provided in the second sentence of Section 2.1 or may be permitted from time to time by the Company in its discretion, and all in each such case accrued and unpaid interest on the principal amount to be converted and Default Interest on any such interest, into fully paid and nonassessable shares of Common Stock at the Conversion Price in effect on the date the applicable Conversion Notice is given in accordance with this Note. Notwithstanding any other provision of this Note, in no event shall the Holder be entitled at any time to convert any portion of the principal amount of this Note (and accrued and unpaid interest thereon into and Default Interest on any such number interest) in excess of shares that portion of fully paid the principal amount of this Note (and non-assessable equity securities issued by the Borrower to its members in connection with the conversion of their Membership Interests in the Company pursuant to the Merger (the “New Securities”), that is equal to the quotient of (A) the outstanding principal hereunder plus all accrued and unpaid interest thereon divided by and Default Interest on any such interest) upon conversion of which the sum of (B1) the Conversion Price (as defined below). In addition, in connection with such conversion, the Holder shall receive rights as a purchaser and holder of New Securities (including, without limitation, customary registration rights) no less favorable in the aggregate and in any single instance than those granted to any other purchaser of New Securities. The Borrower agrees that it has no right to prevent the Holder from effecting such conversion without the Holder’s consent, whether by attempting to prepay this Note (whether or not there shall have been a default hereunder) or otherwise. The “Conversion Price” shall (i) if the New Securities are common stock, par value $0.001 per share (the “Common Stock”), be equal to the Common Stock Equivalent Price (as defined below) or (ii) if the New Securities are convertible capital stock, the Conversion Price shall be an amount equal to the Common Stock Equivalent Price multiplied by the number of shares of Common Stock into which one share beneficially owned by the Holder (including shares of such convertible capital stock is convertible. The “Common Stock Equivalent Price” beneficially owned by all Aggregated Persons) (other than shares of Common Stock deemed beneficially owned by the Holder or any Aggregated Person of the Holder through the ownership of (x) the unconverted portion of the principal amount of this Note and the Other Notes and accrued and unpaid interest thereon and on any such interest and (y) the unconverted or unexercised portion of any instrument which contains limitations similar to those set forth in this sentence) and (2) the number of shares of Common Stock issuable upon conversion of the portion of the principal amount of this Note and accrued and unpaid interest thereon and Default Interest on any such interest with respect to which the determination in this sentence is being made, would result in beneficial ownership by the Holder and all Aggregated Persons of the Holder of more than 4.9% of the outstanding shares of Common Stock. For purposes of the immediately preceding sentence, beneficial ownership shall initially be determined in accordance with Section 13(d) of the closing offering price 1934 Act, and Regulation 13D-G thereunder, except as otherwise provided in clause (1) of the Next Financing immediately preceding sentence. For purposes of the second preceding sentence, the Company shall be entitled to rely, and shall be adjusted as set forth fully protected in Section 2.2(drelying, on any statement or representation made by the Holder to the Company in connection with a particular conversion, without any obligation on the part of the Company to make any inquiry or investigation or to examine its records or the records of any transfer agent for the Common Stock and without any liability of the Company with respect thereto. The number of shares of Common Stock to be issued upon each conversion of this Note shall be determined by dividing the sum of (1) belowthat portion of the principal amount of this Note to be converted plus (2) accrued and unpaid interest on such principal amount to the date the Conversion Notice for such conversion is given plus (3) accrued and unpaid Default Interest, if any, on the amount referred to in the immediately preceding clause (2) to the date such Conversion Notice is given, by the Conversion Price in effect on the date the Conversion Notice for such conversion is given.

Conversion Right. Provided that The Holder shall have the Merger is consummatedright from time to time solely in an Event of Default, upon written notice to and ending on the Borrower, the Holder may, at its sole option, at the effective date of payment of the Merger Default Amount (as defined below)in Article III) pursuant to Section 1.6(a) or Article III, or at any time thereafter until each in respect of the remaining outstanding principal balance amount of this Note, together with Note to convert all accrued or any part of the outstanding and unpaid principal, interest, is paid in fullpenalties, convert the entire outstanding principal hereunder and all accrued and unpaid interest thereon other amounts under this Note into such number of shares of fully paid and non-assessable equity shares of Common Stock, as such Common Stock exists on the Issue Date, or any shares of capital stock or other securities issued by of the Borrower to its members in connection with the conversion of their Membership Interests in the Company pursuant to the Merger (the “New Securities”), that is equal to the quotient of (A) the outstanding principal hereunder plus all accrued and unpaid interest thereon divided by (B) into which such Common Stock shall hereafter be changed or reclassified at the Conversion Price (as defined below) determined as provided herein (a “Conversion”). In addition; provided, however, that in connection with such conversion, no event shall the Holder shall receive rights as a purchaser and holder be entitled to convert any portion of New Securities (including, without limitation, customary registration rights) no less favorable in the aggregate and in any single instance than those granted to any other purchaser of New Securities. The Borrower agrees that it has no right to prevent the Holder from effecting such conversion without the Holder’s consent, whether by attempting to prepay this Note in excess of that portion of this Note upon conversion of which the sum of (whether or not there shall have been a default hereunder1) or otherwise. The “Conversion Price” shall (i) if the New Securities are common stock, par value $0.001 per share (the “Common Stock”), be equal to the Common Stock Equivalent Price (as defined below) or (ii) if the New Securities are convertible capital stock, the Conversion Price shall be an amount equal to the Common Stock Equivalent Price multiplied by the number of shares of Common Stock into beneficially owned by the Holder and its affiliates (other than shares of Common Stock which one share may be deemed beneficially owned through the ownership of the unconverted portion of the Notes or the unexercised or unconverted portion of any other security of the Borrower subject to a limitation on conversion or exercise analogous to the limitations contained herein) and (2) the number of shares of Common Stock issuable upon the conversion of the portion of this Note with respect to which the determination of this proviso is being made, would result in beneficial ownership by the Holder and its affiliates of more than 4.99% of the outstanding shares of Common Stock. For purposes of the proviso to 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, except as otherwise provided in clause (1) of such convertible capital stock is convertibleproviso. The “number of shares of Common Stock Equivalent Price” to be issued upon each conversion of this Note shall initially be determined by dividing the closing offering price Conversion Amount (as defined below) by the applicable Conversion Price then in effect on the date specified in the Next Financing notice of conversion, in the form attached hereto as Exhibit A (the “Notice of Conversion”), delivered to the Borrower or Borrower’s transfer agent by the Holder in accordance with Section 1.4 below; provided that the Notice of Conversion is submitted by facsimile or e-mail (or by other means resulting in, or reasonably expected to result in, notice) to the Borrower or Borrower’s transfer agent before 11:59 p.m., New York, New York time on such conversion date (the “Conversion Date”). The term “Conversion Amount” means, with respect to any conversion of this Note, the sum of (1) the principal amount of this Note to be converted in such conversion plus (2) at the Holder’s option, accrued and unpaid interest, if any, on such principal amount at the interest rates provided in this Note to the Conversion Date, provided however, that the Borrower shall be adjusted as set forth have the right to pay any or all interest in Section 2.2(dcash plus (3) belowat the Holder’s option, Default Interest, if any, on the amounts referred to in the immediately preceding clauses (1) and/or (2) plus (4) at the Holder’s option, any amounts owed to the Holder pursuant to Sections 1.3 and 1.4(g) hereof.

Conversion Right. Provided Subject to the provisions of Sections 3(g) and 4(a) below, at any time or times on or after the earlier of (i) 90 days after the Issuance Date (as defined herein), (ii) 5 days after receiving a "no-review" status from the Securities and Exchange Commission (the "SEC") in connection with a registration statement ("Registration Statement") covering the resale of Common Stock issued upon conversion of the Series A Preferred Shares and required to be filed by the Corporation pursuant to the Registration Rights Agreement between the Corporation and its initial holders of Series A Preferred Shares (the "Registration Rights Agreement"), (iii) the date that the Merger Registration Statement is consummated, upon written notice declared effective by the SEC any holder of Series A Preferred Shares shall be entitled to convert any Series A Preferred Shares into fully paid and nonassessable shares (rounded to the Borrower, the Holder may, at its sole optionnearest whole share in accordance with Section 3(h) below) of Common Stock, at the effective date of the Merger Conversion Rate (as defined below); provided, however, that in no event other than upon a Mandatory Conversion pursuant to Section 3(g) hereof, or at upon a Triggering Event pursuant to Section 5(b) hereof, shall any time thereafter until holder be entitled to convert Series A Preferred Shares in excess of that number of Series A Preferred Shares which, upon giving effect to such conversion, would cause the principal balance of this Note, together with all accrued and unpaid interest, is paid in full, convert the entire outstanding principal hereunder and all accrued and unpaid interest thereon into such aggregate number of shares of fully paid and non-assessable equity securities issued Common Stock beneficially owned by the Borrower holder and its affiliates to its members in connection with exceed 4.9% of the conversion then issued and outstanding shares of their Membership Interests in Common Stock of the Company pursuant to the Merger (the “New Securities”), that is equal to the quotient of (A) the outstanding principal hereunder plus all accrued and unpaid interest thereon divided by (B) the Conversion Price (as defined below). In addition, in connection with Corporation following such conversion. For purposes of the foregoing proviso, the Holder shall receive rights as a purchaser and holder aggregate number of New Securities (including, without limitation, customary registration rights) no less favorable in the aggregate and in any single instance than those granted to any other purchaser shares of New Securities. The Borrower agrees that it has no right to prevent the Holder from effecting such conversion without the Holder’s consent, whether by attempting to prepay this Note (whether or not there shall have been a default hereunder) or otherwise. The “Conversion Price” shall (i) if the New Securities are common stock, par value $0.001 per share (the “Common Stock”), be equal to the Common Stock Equivalent Price (as defined below) or (ii) if beneficially owned by the New Securities are convertible capital stock, the Conversion Price holder and its affiliates shall be an amount equal to the Common Stock Equivalent Price multiplied by include the number of shares of Common Stock into issuable upon conversion of the Series A Preferred Shares with respect to which one share the determination of such convertible capital stock proviso is convertible. The “being made, but shall exclude the number of shares of Common Stock Equivalent Price” shall initially which would be issuable upon conversion of the closing offering price in remaining, non-converted Series A Preferred Shares beneficially owned by the Next Financing holder and shall be adjusted its affiliates. Except as set forth in the preceding sentence, for purposes of this paragraph, beneficial ownership shall be calculated in accordance with Section 2.2(d13(d) below.of the Securities Exchange Act of 1934, as amended ("Exchange Act"), and the rules thereunder;

Conversion Right. Provided that At any time or times on or after the Merger is consummated, upon written notice to the Borrower, the Holder may, at its sole option, at the effective date of the Merger Issuance Date (as defined below), or at any time thereafter until the principal balance holder of this Note, together with all accrued and unpaid interest, is paid in full, Preferred Shares shall be entitled to convert the entire outstanding principal hereunder and all accrued and unpaid interest thereon into such any whole number of shares of Preferred Shares into fully paid and non-assessable equity securities issued by the Borrower to its members in connection with the conversion of their Membership Interests in the Company pursuant nonassessable shares (rounded to the Merger (the “New Securities”nearest whole share in accordance with Section 2(h)) of Common Stock, that is equal to the quotient of (A) the outstanding principal hereunder plus all accrued and unpaid interest thereon divided by (B) at the Conversion Price Rate (as defined below). In addition; provided, however, that in connection with no event shall any holder be entitled or required to convert Preferred Shares for a number of Conversion Shares in excess of that number of Conversion Shares that, upon giving effect to such conversion, the Holder shall receive rights as a purchaser and holder of New Securities (including, without limitation, customary registration rights) no less favorable in would cause the aggregate number of shares of Common Stock beneficially owned by the holder and in any single instance than those granted to its Affiliates and any other purchaser persons or entities whose beneficial ownership of New Securities. The Borrower agrees that it has no right to prevent shares of Common Stock would be aggregated with the Holder from effecting such conversion without holder’s for purposes of Section 13(d) of the Holder’s consentSecurities Exchange Act of 1934, whether by attempting to prepay this Note (whether or not there shall have been a default hereunder) or otherwise. The “Conversion Price” shall (i) if the New Securities are common stock, par value $0.001 per share as amended (the “Common Stock1934 Act”), be equal including shares held by any “group” of which the holder is a member (any such other persons and entities being referred to herein as “Other Persons”), to exceed the Beneficial Ownership Limitation. For purposes of the foregoing proviso, the aggregate number of shares of Common Stock Equivalent Price (as defined below) or (ii) if beneficially owned by the New Securities are convertible capital stock, the Conversion Price holder and its Affiliates shall be an amount equal to the Common Stock Equivalent Price multiplied by include the number of shares of Common Stock into issuable upon conversion of the Preferred Shares with respect to which one share the determination of such convertible capital stock proviso is convertible. The “being made, but shall exclude the shares of Common Stock Equivalent Pricethat would be issuable upon (i) conversion of the remaining, nonconverted Preferred Shares beneficially owned by the holder and its Affiliates and any Other Persons and (ii) exercise, conversion or exchange of the unexercised, unconverted or unexchanged portion of any other securities of the Company beneficially owned by the holder and its Affiliates and any Other Persons (including any of the Warrants (as defined in the Securities Purchase Agreement) and any other warrants and any convertible preferred shares or notes) subject to a limitation on conversion, exercise or exchange analogous to the limitation contained herein. Subject to the immediately preceding sentence, for purposes of this Section 2(a), beneficial ownership shall be calculated in accordance with Section 13(d) of the 1934 Act and applicable regulations of the Securities and Exchange Commission (“SEC”), and “group” shall initially be have the closing offering price in the Next Financing and shall be adjusted as meaning set forth in Section 2.2(d13(d) belowof the 1934 Act and applicable regulations of the SEC. For purposes of this Certificate of Designations, in determining the number of outstanding shares Common Stock a holder may rely on the number of outstanding shares of Common Stock as reflected in (1) the Company’s most recent Form 10-Q or Form 10-K filed under the 1934 Act, as the case may be, (2) a more recent public announcement by the Company or (3) any other notice by the Company or its transfer agent setting forth the number of shares of Common Stock outstanding. Upon the written request of any holder, the Company shall promptly, but in no event later than two (2) Business Days following the receipt of such request, confirm in writing to any such holder the number of shares Common Stock then outstanding. In any case, the number of outstanding shares Common Stock shall be determined after giving effect to the conversion, exercise or exchange of securities of the Company and Preferred Shares by such holder and its Affiliates and any Other Persons, since the date as of which such number of outstanding shares of Common Stock was reported. Notwithstanding the foregoing, each holder of Preferred Shares shall have the sole right and obligation to determine whether the restrictions contained in this Section 2(a) apply to such holder. For purposes of determining the maximum number of shares of Common Stock that the Company may issue to a holder upon conversion of Preferred Shares, such holder’s delivery of a Conversion Notice (as defined in Section 2(e)) with respect to such conversion shall constitute a representation by such holder that the holder has determined, based on the most recent public filings by the Company under the 1934 Act (or any differing information received from the Company as provided above), that upon the issuance of the shares of Common Stock to be issued to such holder, the shares of Common Stock beneficially owned by such holder and its Affiliates and any Other Persons will not exceed the Beneficial Ownership Limitation. The “Beneficial Ownership Limitation” shall be 4.99% of the number of shares of Common Stock immediately after giving effect to the issuance of shares of Common Stock upon such conversion of Preferred Shares; provided, however, that a holder of Preferred Shares, upon not less than 61 days’ prior notice to the Company, may increase the Beneficial Ownership Limitation applicable to such holder (but, for the avoidance of doubt, not to any subsequent holder of such Preferred Shares or to any other holder of Preferred Shares) to 9.99% of the number of shares of Common Stock outstanding immediately after giving effect to the conversion of Preferred Shares. No such increase shall be effective prior to the 61st day after such notice is delivered to the Company.

Conversion Right. Provided that (i) Subject to and in accordance with the Merger is consummatedprovisions of this Section 6, upon written notice to each Holder of shares of Series B Preferred Stock shall have the Borrower, right (the Holder may, at its sole option, at the effective date of the Merger (as defined below“Conversion Right”), or at any time thereafter until and from time to time, at such Holder’s option, to convert all or any portion of such Holder’s shares of Series B Preferred Stock into fully paid and non-assessable shares of Common Stock or such other shares of capital stock of the principal balance Corporation identical in all material respects to the Common Stock (except that the Corporation shall be required to (1) pay a dividend or distribution on such capital stock whenever and to such an extent that a dividend or distribution is paid on the Common Stock and (2) pay a dividend or distribution on the Common Stock whenever and to such an extent that a dividend or distribution is paid on such capital stock) as shall have been approved or consented to, in addition to any vote required by law, by the holders of a majority of the then issued and outstanding shares of Series B Preferred Stock (“Other Capital Stock,” and for purposes of this NoteSection 6 (and otherwise throughout this Certificate where such inclusion is appropriate by the context) Common Stock and Other Capital Stock shall be collectively referred to as “Common Stock”); provided, together with all accrued that the Conversion Right shall be exercisable only to the extent that there is a sufficient number of authorized and unpaid interestunissued (or issued and included in treasury) and otherwise unreserved shares of Common Stock into which such shares of Series B Preferred Stock sought to be converted may convert. Upon a Holder’s election to exercise the Conversion Right, each share of Series B Preferred Stock for which the Conversion Right is paid in full, convert the entire outstanding principal hereunder and all accrued and unpaid interest thereon exercised shall be converted into such number of shares of fully paid and non-assessable equity securities issued by the Borrower Common Stock (calculated as to its members in connection with the each conversion of their Membership Interests in the Company pursuant to the Merger (the “New Securities”), that is nearest 1/10,000th of a share) equal to the quotient of (A) the outstanding principal hereunder plus all accrued sum of (1) the Liquidation Preference and unpaid interest thereon (2) the Accrued Dividends of such share as of the Conversion Date, divided by (B) the Conversion Price (as defined below). In addition, of such share in connection with such effect at the time of conversion, the Holder shall receive rights as a purchaser and holder of New Securities (including, without limitation, customary registration rights) no less favorable in the aggregate and in any single instance than those granted to any other purchaser of New Securities. The Borrower agrees that it has no right to prevent the Holder from effecting such conversion without the Holder’s consent, whether by attempting to prepay this Note (whether or not there shall have been a default hereunder) or otherwise. The “Conversion Price” shall (i) if the New Securities are common stock, par value $0.001 per share (the “Common Stock”), be equal to the Common Stock Equivalent Price (as defined below) or . (ii) if No fractional shares of Common Stock shall be issued upon the New Securities are convertible capital stockconversion of any shares of Series B Preferred Stock. If more than one share of Series B Preferred Stock shall be surrendered for conversion at one time by the same Holder, the Conversion Price number of full shares of Common Stock issuable upon conversion thereof shall be computed on the basis of the sum of (A) the aggregate Liquidation Preference and (B) the aggregate Accrued Dividends as of the Conversion Date, on all shares of Series B Preferred Stock so surrendered. If the conversion of any share or shares of Series B Preferred Stock results in a fractional share of Common Stock issuable after application of the immediately preceding sentence, as applicable, the Corporation shall pay a cash amount in lieu of issuing such fractional share in an amount equal to such fractional interest multiplied by the Closing Price on the Trading Day immediately prior to the Conversion Date. (iii) The Corporation will (to the extent and for so long as the shares of Series B Preferred Stock is convertible) at all times reserve and keep available out of its authorized and unissued Common Stock, solely for the purpose of effecting conversions of the Series B Preferred Stock into shares of Common Stock, a number of shares of Common Stock Equivalent Price multiplied by equal to 110% of the number of shares of Common Stock into which one share issuable upon conversion of all outstanding shares of Series B Preferred Stock. The Corporation shall take all action permitted by law, including calling meetings of stockholders of the Corporation and soliciting proxies for any necessary vote of the stockholders of the Corporation, to amend the Certificate of Incorporation to increase the number of authorized and unissued shares of Common Stock (or to otherwise comply with the provisions of Section 6.2 of the Stockholders Agreement) if at any time there shall be insufficient authorized and unissued shares of Common Stock to permit such reservation or to permit the conversion of all outstanding shares of Series B Preferred Stock. The Corporation covenants that the Series B Preferred Stock and all Common Stock that may be issued upon conversion of Series B Preferred Stock shall upon issuance be duly authorized, fully paid and non-assessable, will not subject the holders thereof to personal liability and will not be subject to preemptive rights or subscription rights of any other stockholder of the Corporation, other than the subscription rights provided in the Stockholders Agreement. The Corporation further covenants that, if at any time the Common Stock shall be listed on the New York Stock Exchange or any other securities exchange or quoted on an automated quotation system, the Corporation shall, if permitted by the rules of such convertible capital stock is convertiblenational exchange or automated quotation system, at its sole expense, cause to be authorized for listing or quotation on such exchange or automated quotation system, all Common Stock issuable upon conversion of the Series B Preferred Stock, subject to official notice of issuance. The “Corporation will use its best efforts to ensure that such Common Stock Equivalent Price” shall initially may be the closing offering price in the Next Financing and shall be adjusted as set forth in Section 2.2(d) belowissued without violation of any applicable law or regulation or any requirement of such securities exchange or automated quotation system.

Conversion Right. Provided that the Merger is consummated, upon written notice to the Borrower, the Holder may, at its sole option, (a) The Notes held by a Noteholder shall be convertible at the effective date option of the Merger (as defined below), or such Noteholder at any time thereafter until following the principal balance second anniversary of this Notethe Closing Date, together with all accrued and unpaid interest, is paid in full, convert the entire outstanding principal hereunder and all accrued and unpaid interest thereon into such number of shares of fully paid and non-assessable equity securities issued by shares of Common Stock at a conversion price per share of Common Stock as established pursuant to paragraph (b) of this Section 3.1, subject to adjustment pursuant to Section 3.5 below (as the Borrower same may be so adjusted from time to its members time, the "Conversion Price"). The shares of Common Stock deliverable upon conversion of a Note shall be Common Stock as constituted at the date of conversion. (b) The Conversion Price shall be the price established in connection accordance with the conversion of their Membership Interests in the Company pursuant to the Merger (the “New Securities”), that is equal to the quotient of (A) the outstanding principal hereunder plus all accrued and unpaid interest thereon divided by (B) the Conversion Price (as defined below). In addition, in connection with such conversion, the Holder shall receive rights as a purchaser and holder of New Securities (including, without limitation, customary registration rights) no less favorable in the aggregate and in any single instance than those granted to any other purchaser of New Securities. The Borrower agrees that it has no right to prevent the Holder from effecting such conversion without the Holder’s consent, whether by attempting to prepay this Note (whether or not there shall have been a default hereunder) or otherwise. The “Conversion Price” shall following provisions: (i) if the New Securities are common stock, par value $0.001 per share (the “Common Stock”), be equal at any time prior to the Common Stock Equivalent Price fifteenth (as defined below15th) or (ii) if business day after the New Securities are convertible capital stockclosing of an initial public offering by the Company, the Conversion Price shall be an amount equal $3,075.40 per share of Common Stock, subject to any adjustments made pursuant to Section 3.5 below; provided, however, if the Noteholder requests in writing at or prior to the Common Stock Equivalent time of such conversion that a valuation of the Company be obtained, the Company shall engage a qualified investment banking or valuation firm selected by mutual agreement of the Company and the Noteholder (or selected by arbitation in accordance with the procedures of the American Arbitration Association, if the Company and the Noteholder cannot agree upon such firm within 20 days of the Noteholder's request for a valuation) (the "Valuation Firm") to determine the then-current fair market value of the Company and to issue a written report with respect thereto, and if such written report states that such fair market value of the Company is less than $120 million, the Conversion Price shall be deemed to equal the Conversion Price that would have been in effect if such valuation had not been requested, multiplied by a fraction, the number numerator of shares which is the fair market value as determined by the Valuation Firm, and the denominator of which is $120 million. (ii) at any time on or after the fifteenth (15th) business day after the closing of an initial public offering by the Company, the Conversion Price shall be $2,321.180 per share of Common Stock into which one share Stock, subject to any adjustments made pursuant to Section 3.5 below; provided, however, if the Noteholder requests in writing at or prior to the time of such convertible capital stock conversion that a valuation of the Company be obtained, the Company shall engage a Valuation Firm to determine the then-current fair market value of the Company and to issue a written report with respect thereto, and if such written report states that such fair market value of the Company is convertible. The “Common Stock Equivalent Price” shall initially be less than $100 million, the closing offering price in the Next Financing and Conversion Price shall be adjusted deemed to equal the Conversion Price that would have been in effect if such valuation had not been requested, multiplied by a fraction, the numerator of which is the fair market value as set forth in Section 2.2(d) belowdetermined by the Valuation Firm, and the denominator of which is $100 million.

Conversion Right. Provided that Amounts outstanding from time to time hereunder will be converted into shares of common stock of the Merger is consummatedBorrower (the "Common Stock") as follows: (a) On the effective date (the "Effective Date") of the Debtors' Joint Plan of Reorganization (the "Plan") of the Borrower the first one hundred fifty thousand dollars ($150,000) of the principal owing hereunder shall be converted into (i) 150,000 shares of a new class of redeemable common stock ("New Common"); and (ii) 110,000 shares of Common Stock, upon written notice subject to adjustment pursuant to Section 5 hereof. Furthermore, on the Effective Date, each dollar of principal owing hereunder in excess of one hundred fifty thousand dollars ($150,000) shall be automatically converted into 1.0 share of New Common and 0.733 shares of Common Stock of the Borrower, subject to adjustment as provided in Section 5 hereof. (The conversion ratios established in the Holder may, at its sole option, at prior two sentences of this section shall be referred to as the effective date of the Merger (as defined below), or at any time thereafter until "Conversion Price.") Any amount converted shall be deemed to reduce the principal balance of this Note, together with all accrued amount outstanding herewith by the amount so converted and unpaid interest, is paid in full, convert shall proportionately reduce the entire outstanding principal hereunder and all accrued and unpaid interest thereon into such number of shares of fully paid and non-assessable equity securities issued amount available to be borrowed by the Borrower pursuant to its members in connection this Note and the Loan Agreement. The New Common will have the following rights, entitlements and privileges: it will have dividend rights on par with those of Common Stock holders; except as otherwise required by law, each share will vote share for share as a single class with the conversion Common Stock; the shares will be automatically redeemed at $1.00 per share upon the earlier of their Membership Interests the closing of a subsequent debt or equity offering in excess of three million dollars ($3,000,000) by the Borrower (or its successor) or the receipt of proceeds from the Leasehold Deed of Trust in the Company pursuant event of foreclosure; except as set forth hereinabove the class shall have liquidation rights that are subordinate to those of the Merger (the “New Securities”), that is equal to the quotient of (A) the outstanding principal hereunder plus all accrued and unpaid interest thereon divided by (B) the Conversion Price (as defined below). In addition, in connection with such conversion, the Holder shall receive rights as a purchaser and holder of New Securities (including, without limitation, customary registration rights) no less favorable Class 5 Preferred Stock referenced in the aggregate and in any single instance than those granted to any other purchaser of New SecuritiesPlan. The Borrower agrees that it has no right to prevent the Holder from effecting such conversion without the Holder’s consent, whether by attempting to prepay this Note (whether or not there shall have been a default hereunder) or otherwise. The “Conversion Price” shall (i) if the New Securities are common stock, par value $0.001 per share (the “Common Stock”), be equal to the Common Stock Equivalent Price (as defined below) or (ii) if the New Securities are convertible capital stock, the Conversion Price shall be an amount equal to the Common Stock Equivalent Price multiplied by the number numbers of shares of Common Stock into and New Common, respectively, issuable upon conversion shall be referred to as the "Conversion Price." (b) Notwithstanding any other provision hereof, the Conversion Right may not be exercised at any time during which one share a registration statement under the Securities Act of 1933 is filed but not effective, if such a conversion would constitute a violation of the registration provisions of such convertible capital stock is convertible. The “Common Stock Equivalent Price” shall initially be the closing offering price in the Next Financing and shall be adjusted as set forth in Section 2.2(d) belowAct.

Conversion Right. Provided At any time or times on or after the first date on which the Company's Certificate of Incorporation is validly amended such that the Merger is consummated, upon written notice to the Borrower, the Holder may, at its sole option, at the effective date of the Merger (as defined below), or at any time thereafter until the principal balance of this Note, together with all accrued and unpaid interest, is paid in full, convert the entire outstanding principal hereunder and all accrued and unpaid interest thereon into such number of authorized shares of fully paid and non-assessable equity securities issued by the Borrower to its members in connection with the conversion of their Membership Interests in the Company pursuant to the Merger Common Stock (the “New Securities”), that is equal to "Authorized Common") equals or exceeds the quotient sum (the "Common Equivalents") of (A) the outstanding principal hereunder plus all accrued and unpaid interest thereon divided by (B) the Conversion Price (as defined below). In addition, in connection with such conversion, the Holder shall receive rights as a purchaser and holder of New Securities (including, without limitation, customary registration rights) no less favorable in the aggregate and in any single instance than those granted to any other purchaser of New Securities. The Borrower agrees that it has no right to prevent the Holder from effecting such conversion without the Holder’s consent, whether by attempting to prepay this Note (whether or not there shall have been a default hereunder) or otherwise. The “Conversion Price” shall (i) if the New Securities are common stock, par value $0.001 per share (the “Common Stock”), be equal to the number of issued and outstanding shares of Common Stock Equivalent Price (as defined below) or plus (ii) if the New Securities are convertible capital stock, the Conversion Price shall be an amount equal to the Common Stock Equivalent Price multiplied by aggregate of the number of shares of Common Stock into which one all other issued and outstanding shares of any class of Company stock are at any time convertible (the period of time beginning on the date referred to above and continuing for so long as the Authorized Common equals or exceeds the Common Equivalents shall be referred to herein as the "Conversion Period"), any holder of Series H Preferred Shares shall be entitled to convert each Series H Preferred Share, in whole or in part, into fully paid and nonassessable shares (rounded to the nearest whole share in accordance with Section 2(e) below) of Common Stock at a rate, subject to adjustment as provided herein, of 10,000 Shares of Common Stock for each Series H Preferred Share (the "Conversion Rate") as and when the creation of such convertible capital stock is convertible. The “Common Stock Equivalent Price” is duly authorized by all necessary corporate action, at the Conversion Rate; PROVIDED, HOWEVER, that in no event shall initially any holder be entitled to convert Series H Preferred Shares in excess of that number of Series H Preferred Shares which, upon giving effect to such conversion, would cause the closing offering price in aggregate number of shares of Common Stock beneficially owned by the Next Financing holder and its affiliates to exceed 9.9% of the outstanding shares of the Common Stock following such conversion. For purposes of the foregoing proviso, the aggregate number of shares of Common Stock beneficially owned by the holder and its affiliates shall include the number of shares of Common Stock issuable upon conversion of the Series H Preferred Shares with respect to which the determination of such proviso is being made, but shall exclude the number of shares of Common Stock which would be adjusted issuable upon conversion of the remaining, nonconverted Series H Preferred Shares beneficially owned by the holder and its affiliates. Except as set forth in the preceding sentence, for purposes of this paragraph, beneficial ownership shall be calculated in accordance with Section 2.2(d13(d) belowof the Securities Exchange Act of 1934, as amended.

Conversion Right. Provided that the Merger is consummatedA Holder of a Convertible Note may convert such Convertible Note (or a portion thereof equal to US$1,000 or any integral multiple thereof) into Ordinary Shares or, upon written notice subject to the Borrowerlimitations set forth below, ADSs of the Company at any time after 40 days from the original issuance of the Convertible Notes and before the close of business on the seventh day preceding Maturity and the Redemption Date fixed for any early redemption, at the Share Conversion Price then in effect; provided, however, that, if such Convertible Note is called for redemption pursuant to Sections 1101(a) or (b) of this Indenture, such conversion right shall terminate at the close of business on the seventh day preceding the Redemption Date for such Convertible Note (unless the Company shall default in making the redemption payment when due, in which case the conversion right shall terminate at the close of business on the date such default is cured and such Convertible Note is redeemed) (such period during which the Convertible Notes are convertible, the "Conversion Period"). The number of Ordinary Shares issuable upon conversion of a Convertible Note (or a portion thereof equal to US$1,000 or any integral multiple thereof) will be determined by dividing the aggregate principal amount (translated into Singapore dollars at the Fixed Exchange Rate) of all the Convertible Notes or portion thereof to be converted by a Holder by the Share Conversion Price per Ordinary Share in effect on the Conversion Date, and, in the case of conversion to ADSs, applying the ratio of Ordinary Shares to ADSs in effect on the Conversion Date. A Holder may, at its sole optionsubject to the limitations set forth below, at elect to receive Ordinary Shares upon conversion in the effective date form of ADSs. Upon receipt of the Merger (Conversion Notice, the Company shall, on behalf of such Holder, as defined below)soon as practicable, deliver to and deposit with the ADS Depositary or at any time thereafter until its custodian, in accordance with the principal balance applicable terms and conditions of this Notethe ADS Deposit Agreement, together with all accrued and unpaid interest, is paid in full, convert the entire outstanding principal hereunder and all accrued and unpaid interest thereon into such number of shares the Ordinary Shares such Holder would have received upon conversion had such Holder not elected to receive such Ordinary Shares in the form of fully paid and non-assessable equity securities issued ADSs that is the maximum number of such Ordinary Shares issuable upon conversion that is divisible by the Borrower then current ratio of Ordinary Shares to its members in connection ADSs and shall issue to such Holder any remaining Ordinary Shares issuable upon conversion that if deposited with the conversion of their Membership Interests ADS Depositary or its custodian would result in the Company issuance of fractional ADSs to the converting holder. Such Ordinary Shares will be listed on the Singapore Exchange prior to deposit with the ADS Depositary or custodian and will be registered in the name of the ADS Depositary or its nominee. Subject to compliance with the terms of the ADS Deposit Agreement, including payment of the fees and expenses of the ADS Depositary by such Holder and completion of any additional documentation which may be required under the terms of the Deposit Agreement, the ADS Depositary will issue such number of ADSs representing the deposited Ordinary Shares to such Holder based on the applicable share-to-ADS ratio then in effect. A Convertible Note may not be converted if a Holder has delivered a Repayment Acceptance Notice form in respect of such Convertible Note pursuant to Article Twelve exercising the Merger (option of such Holder to require repayment by the “New Securities”)Company for such Convertible Note. Upon conversion, that is equal with effect from the Registration Date, the person designated in the Conversion Notice will be registered as the holder of record of the applicable number of Ordinary Shares, but beginning on the Conversion Date such converting Holder shall cease to have any right as a Holder with respect to the quotient of (A) the outstanding principal hereunder plus all accrued and unpaid interest thereon divided by (B) the Conversion Price (as defined below). In addition, in connection with such Convertible Notes surrendered for conversion, the Holder shall receive rights as a purchaser and holder of New Securities (including, without limitation, customary registration rights) no less favorable in the aggregate and in any single instance than those granted to any other purchaser of New Securities. The Borrower agrees that it has no right to prevent the Holder from effecting such conversion without the Holder’s consent, whether by attempting to prepay this Note (whether or not there shall have been a default hereunder) or otherwise. The “Conversion Price” shall (i) if the New Securities are common stock, par value $0.001 per share (the “Common Stock”), be equal to the Common Stock Equivalent Price (as defined below) or (ii) if the New Securities are convertible capital stock, the Conversion Price shall be an amount equal to the Common Stock Equivalent Price multiplied by the number of shares of Common Stock into which one share of such convertible capital stock is convertible. The “Common Stock Equivalent Price” shall initially be the closing offering price in the Next Financing and shall be adjusted as set forth in Section 2.2(d) below.

Conversion Right. Provided that The Holder shall have the Merger right from and after the earlier of (a) the SEC Effective Date; and (b) the date which is consummated, upon written notice to 90 days after the Borrower, the Holder may, at its sole option, at the effective date of the Merger (as defined below), or original issuance of this Note and then in either such case at any time thereafter until on or prior to the principal balance of date this Note, together with all accrued and unpaid interest, Note is paid in full, to convert at any time all or from time to time any part of the entire outstanding and unpaid principal hereunder amount of this Note of at least $50,000, or such lesser amount as shall remain unpaid at the time of the conversion, and all accrued and unpaid interest on the principal amount to be converted and on any such interest, into fully paid and nonassessable shares of Common Stock at the conversion price determined as provided herein (the "Conversion Price"); PROVIDED, HOWEVER, that in no event shall the Holder be entitled at any time to convert any portion of the principal amount of this Note (and accrued and unpaid interest thereon into and on any such number interest) in excess of shares that portion of fully paid the principal amount of this Note (and non-assessable equity securities issued by the Borrower to its members in connection with the conversion of their Membership Interests in the Company pursuant to the Merger (the “New Securities”), that is equal to the quotient of (A) the outstanding principal hereunder plus all accrued and unpaid interest thereon divided by and on any such interest) upon conversion of which the sum of (B1) the Conversion Price (as defined below). In addition, in connection with such conversion, the Holder shall receive rights as a purchaser and holder of New Securities (including, without limitation, customary registration rights) no less favorable in the aggregate and in any single instance than those granted to any other purchaser of New Securities. The Borrower agrees that it has no right to prevent the Holder from effecting such conversion without the Holder’s consent, whether by attempting to prepay this Note (whether or not there shall have been a default hereunder) or otherwise. The “Conversion Price” shall (i) if the New Securities are common stock, par value $0.001 per share (the “Common Stock”), be equal to the Common Stock Equivalent Price (as defined below) or (ii) if the New Securities are convertible capital stock, the Conversion Price shall be an amount equal to the Common Stock Equivalent Price multiplied by the number of shares of Common Stock into beneficially owned by the Holder and any person whose beneficial ownership of shares of Common Stock would be aggregated with the Holder's beneficial ownership of shares of Common Stock for purposes of Section 13(d) of the Securities Exchange Act of 1934, as amended (the "1934 Act"), and Regulation 13D-G thereunder (each a "Restricted Person" and collectively, the "Restricted Persons") (other than shares of Common Stock deemed beneficially owned through the ownership of the unconverted portion of the principal amount of this Note and accrued and unpaid interest thereon and on any such interest) and (2) the number of shares of Common Stock issuable upon conversion of the portion of the principal amount of this Note and accrued and unpaid interest thereon and on any such interest with respect to which one share the determination in this proviso is being made, would result in beneficial ownership by any Restricted Person of such convertible capital stock is convertiblemore than 4.9% of the outstanding shares of Common Stock. For purposes of the proviso to the immediately preceding sentence, beneficial ownership shall be determined in accordance with Section 13(d) of the 1934 Act, and Regulation 13D-G thereunder, except as otherwise provided in clause (1) of the proviso to the immediately preceding sentence. The “number of shares of Common Stock Equivalent Price” to be issued upon each conversion of this Note shall initially be determined by dividing the closing offering price sum of (1) that portion of the principal amount of this Note to be converted PLUS (2) accrued and unpaid interest on such principal amount to the date the Conversion Notice for such conversion is given to the Company PLUS (3) Default Interest, if any, on the amount referred to in the Next Financing and shall be adjusted as set forth immediately preceding clause (2) at the rate provided in Section 2.2(d) belowthis Note to the date such Conversion Notice is given to the Company, by the Conversion Price in effect on the date the Conversion Notice for such conversion is given to the Company.

Conversion Right. Provided that the Merger is consummated, upon written notice A. Subject to the Borrowerlimitations of clause B below, each Limited Partner who is an Original Limited Partner or an Affiliate of an Original Limited Partner (other than by virtue of clause (iv) of the Holder may, at its sole optiondefinition of Affiliate) shall have the right (the "Conversion Right") to require the General Partner to convert on any Specified Conversion Date all or any portion of the Partnership Units held by such Limited Partner into REIT Shares or, at the effective date option of the Merger General Partner, to purchase (as defined belowor to cause the Partnership to repurchase) all or any portion of the Partnership Units held by such Limited Partner for cash. The Conversion Right shall be exercised pursuant to a Notice of Conversion delivered to the General Partner by the Limited Partner who is exercising the conversion right (the "Converting Partner"), accompanied by the certificate or at any time thereafter until certificates evidencing the principal balance Partnership Units to be converted. The General Partner shall inform the Converting Partner of this Note, together its election with all accrued and unpaid interest, is paid respect to the manner in full, convert which the entire outstanding principal hereunder and all accrued and unpaid interest thereon into such exercise of the Conversion Right will be satisfied as provided in clause C below. The number of shares REIT Shares to be issued to a Limited Partner upon exercise of fully paid and non-assessable equity securities issued by the Borrower to its members in connection with the conversion of their Membership Interests in the Company pursuant to the Merger (the “New Securities”), that is equal to the quotient of (A) the outstanding principal hereunder plus all accrued and unpaid interest thereon divided by (B) the Conversion Price (as defined below). In addition, in connection with such conversion, the Holder Right shall receive rights as a purchaser and holder of New Securities (including, without limitation, customary registration rights) no less favorable in the aggregate and in any single instance than those granted to any other purchaser of New Securities. The Borrower agrees that it has no right to prevent the Holder from effecting such conversion without the Holder’s consent, whether by attempting to prepay this Note (whether or not there shall have been a default hereunder) or otherwise. The “Conversion Price” shall (i) if the New Securities are common stock, par value $0.001 per share (the “Common Stock”), be equal to the Common REIT Shares Conversion Amount. The amount of cash to be paid to a Limited Partner, at the option of the General Partner, upon exercise of the Conversion Right shall be equal to the Value of the REIT Shares Conversion Amount as of the Business Day on which the Conversion Right is duly exercised. B. Notwithstanding anything to the contrary contained in clause A above, no REIT Shares shall be issued to a Limited Partner pursuant to clause A above to the extent that the issuance of such REIT Shares would either: (1) cause the aggregate value of the Capital Stock Equivalent Price owned by the following Persons (either as defined belowdirect owners or Beneficial Owners): (i) or the Original Limited Partners and their Affiliates (excluding any Affiliate who is such by virtue of clause (iv) of the definition of Affiliate), and (ii) if any Person who has obtained REIT Shares di- rectly from an Original Limited Partner or an Affiliate of an Original Limited Partner (excluding any Affiliate who is such by vir- tue of clause (iv) of the New Securities are convertible capital stockdefinition of Af- filiate) or pursuant to Section 11.3.C here- of, or any transferee of such Person (but only to the extent that the value of the Capital Stock owned by such Person or trans- feree (as a direct owner or a Beneficial Owner) exceeds five percent (5%) of the ag- gregate value of the total Capital Stock issued and outstanding) to exceed twenty-four and 9/10 percent (24.9%) of the aggregate value of the total Capital Stock issued and outstanding as of the Specified Conversion Date; or (2) cause the General Partner to be considered to be closely held within the meaning of Section 856(a)(6) of the Code as of the Specified Conversion Date. C. Within twenty (20) Business Days after the Business Day on which the Conversion Right is duly exercised, the General Partner shall inform the Converting Partner, in writing, (i) whether it elects to purchase (or to cause the Partnership to repurchase) all or any portion of the Partnership Units to which the Notice of Conversion Price shall be an amount equal relates for cash, and (ii) whether the Converting Partner is not entitled to exercise the Common Stock Equivalent Price multiplied by the Conversion Right with respect to a specified number of shares Partnership Units by virtue of Common Stock into which one share clause B above and, if so, stating either that the General Partner will purchase (or will cause the Partnership to repurchase) such number of Partnership Units or that the Board of Directors of the General Partner, acting by a majority of its Independent Directors, has made the good faith determination that both the General Partner and the Partnership lack available funds, consistent with Section 5.2 hereof, to make such convertible capital stock is convertiblepur- chase/repurchase. The “Common Stock Equivalent Price” shall initially be General Partner may elect the closing offering price in the Next Financing and shall be adjusted as option set forth in Section 2.2(dthe foregoing clause (i) belowonly to the extent it and/or the Partnership have available funds to make such purchase/repurchase. If the General Partner informs the Converting Partner pursuant to the foregoing clause (ii) that both it and the Partnership lack available funds to make such purchase/repurchase in full, it shall also inform the Converting Partner of the portion, if any, of the Partnership Units which it and/or the Partnership have available funds to purchase/repurchase. In the event the General Partner informs a Converting Partner that such Converting Partner is not entitled to convert any portion of the Partnership Units held by such Converting Partner into REIT Shares pursuant to clause B above, and in the further event that the General Partner informs such Converting Partner that it lacks available funds to purchase (or that the Partnership lacks available funds to repurchase) any portion of such Partnership Units which the Converting Partner is not entitled to convert into REIT Shares, such Converting Partner shall be deemed to have withdrawn his Notice of Conversion with respect to that portion of his Partnership Units as to which he is not entitled to exercise the Conversion Right by virtue of clause B above and which the General Partner and the Partnership lack adequate funds to purchase/repurchase.