Common use of Conversion Clause in Contracts

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

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

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

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

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

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

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

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

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

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

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

Conversion. (A) This Debenture The holders of the Series C Preferred Stock shall have conversion rights as follows: A. Each share of Series C Preferred Stock shall be convertible at the direction of, and by notice to the Corporation from, (i) the holder thereof or (ii) the holders of a majority of the outstanding shares of Series C Preferred Stock, at any time, at the office of the Corporation or any transfer agent for such Series, into one thousand (1,000) fully paid and nonassessable shares of Common Stock at the option of the Holder, in whole or in part at any time and subject (x) to adjustment from time to timetime as provided below (as so adjusted, after the Original Issue Date "conversion ratio") and (subject y) (prior to the consummation of the Recapitalization) to limitations on conversion set forth in Section 4(a)(ii) hereof). The resulting from the available number of shares of Common Stock issuable which may be reserved for issuance upon a conversion hereunder shall be determined by adding the sum of (i) the quotient obtained by dividing (x) the outstanding principal amount of this Debenture to be converted and (y) the Conversion Price (as defined herein), and (ii) the amount equal to (I) the product of (x) the outstanding principal amount of this Debenture to be converted and (y) the product of (1) the quotient obtained by dividing .12 by 360 and (2) the number of days for which such principal amount was outstanding, divided by (II) the Conversion Price on the Conversion Dateconversion, provided, that if the Company shall have timely elected to pay the interest due on a Conversion Date in cash any conversion pursuant to the terms hereof, subsection clause (ii) shall not be used in the calculation above of less than all of the outstanding shares of Series C Preferred Stock shall be on a pro rata basis amongst all holders of Series C Preferred Stock. After consummation of the Recapitalization, the number "1,000" in this paragraph shall be "1", subject to adjustment as provided in paragraph VIII.G. B. If a holder of Series C Preferred Stock gives notice (an "Optional Conversion Notice") of conversion under paragraph A above, such holder shall surrender with such Optional Conversion Notice the duly endorsed certificate or certificates for the Series C Preferred Stock being converted, at the office of the Corporation or of any transfer agent for such Series, and shall state therein the name or names in which the certificate or certificates for shares of Common Stock issuable upon are to be issued. If the holders of a conversion hereunder. (B) Notwithstanding anything to majority of the contrary contained herein, if on any Conversion Date: (1) the number of outstanding shares of Common Series C Preferred Stock at the time authorized, unissued and unreserved for all purposes, or held as treasury stock, is insufficient to pay interest hereunder in shares give notice of Common Stock; (2) the Underlying Shares issuable for such conversion (including any interest payable in shares) (x) are not registered for resale pursuant to an effective Underlying Shares Registration Statement and (y) may not be sold without volume restrictions pursuant to Rule 144(k) promulgated under the Securities Act (as defined in Section 6); (3) the Common Stock is not listed or quoted for trading on the OTC or on a Subsequent Market; (4) the Company has failed to timely satisfy its conversion obligations hereunder; or (5) the issuance of such shares of Common Stock would result in a violation of Sections 4(a)(ii), thenparagraph A above, the Company may not pay interest in kind and must pay interest in cash by delivering, within three Trading Days Corporation shall notify all other record holders of each applicable Conversion Date, an amount in cash equal to the product of (a) the outstanding principal amount of the Debentures to be converted on such Conversion Date and (b) the product of (x) the quotient obtained by dividing .12 by 360 and (y) the number of days for which such principal amount was outstanding. (C) This Debenture shall be convertible into shares of Common Series C Preferred Stock at the option of the Holder, in whole or in part at any time and from time to time, after the Original Issue Date (subject to the limitations on conversion set forth in Section 4(a)(ii) hereof). The Holder shall effect conversions by delivering to the Company a completed notice substantially in the form attached hereto as Exhibit A (a "Mandatory Conversion Notice"). The Conversion Notice shall set forth the remaining principal amount Following receipt of this Debenture and all accrued and unpaid interest thereon subsequent to the conversion at issue. The date on which a Conversion Notice is delivered is the "Conversion Date." Unless the Holder is converting the entire principal amount outstanding under this Debenture, the Holder is not be required to physically surrender this Debenture to the Company in order to effect conversions. Subject to Section 4(b), each Mandatory Conversion Notice, once given, the holders of Series C Preferred Stock shall be irrevocable. Conversions hereunder shall have surrender the effect of lowering the outstanding principal amount of this Debenture plus all accrued and unpaid interest thereon in an amount equal to the applicable conversion, which shall be evidenced by notations made in the Conversion Notice. The Holder and the Company shall maintain records showing the principal amount converted and the date of such conversions. In the event of any dispute certificate or discrepancy, the records of the Holder shall be controlling and determinative in the absence of manifest error.certificates therefor duly

Conversion. (Aa) This Debenture shall be convertible The Holder of this Note is entitled at any time before the close of business on the date this Note is paid in full pursuant to the terms hereof, but prior to such payment (or, if the Holder has exercised his right to require the Company to redeem this Note or a portion hereof pursuant to Section 2 hereof, then in respect of this Note or such portion hereof, until and including, but (unless the Company defaults in making the payment due upon redemption) not after, 5:00 p.m., New York City time, on the Business Day prior to the Redemption Date), to convert this Note (or any portion of the principal amount hereof that is an integral multiple of $1,000), into fully paid and nonassessable Common Stock (as hereinafter defined) of the Company at the rate of 166.6667 shares of Common Stock for each $1,000 principal amount of this Note (or at the option then current adjusted rate if an adjustment has been made as provided below) (the "Conversion Rate") by surrender of this Note accompanied by written notice to the Company that the Holder hereof elects to convert this Note (or if less than the entire principal amount hereof is to be converted, specifying the portion hereof to be converted). If less than the entire principal amount of this Note is to be converted, it shall be surrendered to the Company at the Designated Office (with, if the Company so requires, due endorsement by, or a written instrument of transfer in form reasonably satisfactory to the Company duly executed by the Holder hereof or his attorney duly authorized in writing), and the Company shall execute and make available for delivery to the Holder without service charge, a new Note, containing identical terms and conditions, each in an authorized denomination in aggregate principal amount equal to and in exchange for the unconverted portion of the Holderprincipal of the Note so surrendered. The Company shall deliver to the Holder of this Note as soon as practicable after delivery by the Holder of this Note to the Company, but not more than fifteen (15) Trading Days after such delivery, the certificates representing shares of Common Stock issuable upon conversion of this Note and cash in whole or in part at lieu of any time and fractional shares. (b) The Conversion Rate will be subject to adjustments from time to timetime as follows: (1) If the Company shall pay or make a dividend or other distribution on Common Stock of the Company payable in Common Stock, after the Original Issue Conversion Rate in effect at the opening of business on the day following the Determination Date (subject to as hereinafter defined) for such dividend or other distribution shall be increased by dividing such Conversion Rate by a fraction of which the limitations on conversion set forth in Section 4(a)(ii) hereof). The numerator shall be the number of shares of Common Stock issuable upon a conversion hereunder outstanding at the close of business on such Determination Date and the denominator shall be determined by adding the sum of such number of shares of Common Stock and the total number of shares of Common Stock constituting such dividend or other distribution, such increase to become effective immediately after the opening of business on the day following such Determination Date. (2) If the Company shall issue rights, options or warrants to holders of its Common Stock entitling them to subscribe for or purchase Common Stock at a price per share less than the current market price per share (determined as provided in paragraph (7) of this Section 1(b)) of the Common Stock on the Determination Date for such distribution, the Conversion Rate in effect at the opening of business on the day following such Determination Date shall be increased by dividing such Conversion Rate by a fraction of which the numerator shall be the number of shares of Common Stock outstanding at the close of business on such Determination Date plus the number of shares of Common Stock which the aggregate of the offering price of the total number of shares of Common Stock so offered for subscription or purchase would purchase at such current market price and the denominator shall be the number of shares of Common Stock outstanding at the close of business on such Determination Date plus the number of shares of Common Stock so offered for subscription or purchase, such increase to become effective immediately after the opening of business on the day following such Determination Date. Upon the expiration of any right, option or warrant to purchase Common Stock the issuance of which resulted in an adjustment to the Conversion Rate pursuant to this paragraph (2) of Section 1(b), if any such right, option or warrant shall expire and shall not have been exercised, the Conversion Rate shall immediately upon such expiration be recomputed to the Conversion Rate which would have been in effect had the adjustment of the Conversion Rate made upon the issuance of such right, option or warrant been made on the basis of offering for subscription or purchase only that number of shares of Common Stock actually purchased upon the exercise of such right, option and warrant actually exercised. (3) If the outstanding Common Stock of the Company shall be subdivided into a greater number of shares of Common Stock, the Conversion Rate in effect at the opening of business on the day following the day upon which such subdivision becomes effective shall be proportionately increased, and, conversely, if outstanding Common Stock shall each be combined into a smaller number of shares of Common Stock, the Conversion Rate in effect at the opening of business on the day following the day upon which such combination becomes effective shall be proportionately reduced, such increase or reduction, as the case may be, to become effective immediately after the opening of business on the day following the day upon which such subdivision or combination becomes effective. (4) If the Company shall, by dividend or otherwise, distribute to all holders of its Common Stock evidences of its indebtedness, shares of any class of capital stock, or other property (including securities, but excluding (i) any rights, options or warrants referred to in paragraph (2) of this Section 1(b), (ii) any dividend or distribution paid exclusively in cash, (iii) any dividend or distribution referred to in paragraph (1) of this Section 1(b) and (iv) any merger or consolidation to which Section 1(f) applies (the "Distributed Property"), the Conversion Rate shall be adjusted so that the same shall equal the rate determined by dividing the Conversion Rate in effect immediately prior to the close of business on the Determination Date for such distribution by a fraction of which the numerator shall be the current market price per share (determined as provided in paragraph (7) of this Section 1(b)) of the Common Stock on such Determination Date less the then fair market value of the portion of the assets, shares or evidences of indebtedness so distributed applicable to one share of Common Stock and the denominator shall be such current market price per share of the Common Stock, such adjustment to become effective immediately prior to the opening of business on the day following such Determination Date; provided, however, that if the Distributed Property consists of shares of capital stock of a subsidiary, the Company will make adequate provision so that the Holder shall have the right to receive upon conversion the amount of such shares of capital stock that such Holder would have received if such Holder had converted such Note on the record date, in which case there will be no adjustment to the Conversion Price. Under the provisions of the Company's Rights Plan, upon conversion of the Note into Common Stock, to the extent that the Rights Plan is still in effect upon such conversion, the Holder will receive, in addition to the Common Stock, the rights described therein (whether or not the rights have separated from the Common Stock at the time of conversion), subject to the limitations set forth in the Rights Plan. Any distribution of rights or warrants pursuant to the Rights Plan in compliance with the requirements set forth in the immediately preceding sentence of this paragraph shall not constitute a distribution of rights or warrants pursuant to this Section 1(b). (5) If the Company shall, by dividend or otherwise, distribute to all holders of its Common Stock cash (excluding any cash that is distributed as part of a distribution referred to in paragraph (4) of Section 1(b)) in aggregate amount that, combined together with (I) the aggregate amount of any other cash distributions to all holders of its Common Stock made exclusively in cash within the twelve (12) months preceding the date of payment of such distribution and in respect of which no adjustment pursuant to this paragraph (5) of Section 1(b) has been made and (II) the aggregate of any cash plus the fair market value of consideration payable in respect of any tender offer by the Company or any of its subsidiaries for all or any portion of the Common Stock (other than Common Stock purchased by the Company at or below fair market value) concluded within the twelve (12) months preceding the date of payment of such distribution (the "combined cash amount"), exceeds fifty percent (50%) of the net earnings of the Company determined in accordance with GAAP for the trailing twelve month period preceding the date of such distribution (the "aggregate earnings"), then, and in each such case, immediately after the close of business on such date for determination, the Conversion Rate shall be adjusted so that the same shall equal the rate determined by dividing the Conversion Rate in effect immediately prior to the close of business on the date fixed for determination of the stockholders entitled to receive such distribution by a fraction (i) the numerator of which shall be equal to the current market price per share of the Common Stock on the date fixed for such determination less an amount equal to the quotient obtained by dividing of (x) the outstanding principal excess of such combined cash amount of this Debenture to be converted and over the aggregate earnings divided by (y) the Conversion Price (as defined herein), number of shares of Common Stock outstanding on such date for determination and (ii) the amount denominator of which shall be equal to the current market price per share of the Common Stock on such date for determination. (I6) If the product Company issues Common Stock or securities (including options and warrants) convertible into, or exchangeable for, Common Stock at a price per share (or having a conversion or exchange price per share) that is less than the fair market value per share of the Common Stock at the date of issuance (xbut excluding issuances: (a) pursuant to any bona fide plan for the outstanding principal amount benefit of this Debenture employees or directors of the Company now in effect or any comparable plans adopted in the future, provided such future plans contain terms and conditions that, taken as a whole, are no more favorable than the Company's current plans; (b) to be converted acquire all or any portion of a business in an arm's-length transaction between the Company and an unaffiliated third party including, if applicable, issuances upon exercise of options or warrants assumed in connection with such an acquisition; and (yc) the product of (1) the quotient obtained by dividing .12 by 360 and (2) the number of days for which such principal amount was outstanding, divided by (II) the Conversion Price on the Conversion Date, provided, that if the Company shall have timely elected to pay the interest due on a Conversion Date in cash pursuant to the terms exercise of warrants, rights or options, or upon the conversion of convertible securities, which are issued and outstanding on the date hereof, subsection (ii) shall not or which may be used issued in the calculation future at fair value and with an exercise price or conversion price at least equal to the current market price per share (determined as provided in paragraph (7) of this Section 1(b)) of the Common Stock at the time of issuance of such warrant, right, option or convertible security, the Conversion Rate in effect at the opening of business on the day following the date on which any such issuance is made shall be increased by multiplying such Conversion Rate by a fraction of which the numerator shall be the sum of the number of shares of Common Stock issuable upon a (assuming for purposes hereof the conversion hereunder. or exercise of all outstanding securities convertible into or exchangeable for Common Stock) outstanding on such date plus the number of additional shares of Common Stock issued (B) Notwithstanding anything to or into which the contrary contained hereinconvertible securities may convert), if on any Conversion Date: (1) and the denominator of which shall be the sum of the number of shares of Common Stock at (assuming for purposes hereof the time authorized, unissued and unreserved conversion or exercise of all outstanding securities convertible into or exchangeable for all purposes, or held as treasury stock, is insufficient to pay interest hereunder in shares of Common Stock; (2) outstanding on such date plus the Underlying Shares issuable for such conversion (including any interest payable in shares) (x) are not registered for resale pursuant to an effective Underlying Shares Registration Statement and (y) may not be sold without volume restrictions pursuant to Rule 144(k) promulgated under the Securities Act (as defined in Section 6); (3) the Common Stock is not listed or quoted for trading on the OTC or on a Subsequent Market; (4) the Company has failed to timely satisfy its conversion obligations hereunder; or (5) the issuance number of such shares of Common Stock which the aggregate consideration receivable by the Company for the total number of shares of Common Stock so issued (or into which the convertible securities may convert) would result in a violation purchase at the fair market value per share of Sections 4(a)(iithe Common Stock on such date. An adjustment made pursuant to this paragraph (6) shall be made on the next Business Day following the date on which any such issuance is made and shall be effective retroactively immediately after the close of business on such date. For purposes of this paragraph (6), then, the aggregate consideration receivable by the Company may not pay interest in kind and must pay interest in cash by delivering, within three Trading Days connection with the issuance of each applicable Conversion Date, an amount in cash equal to the product shares of (a) the outstanding principal amount Common Stock or of the Debentures to be converted on such Conversion Date and (b) the product of (x) the quotient obtained by dividing .12 by 360 and (y) the number of days for which such principal amount was outstanding. (C) This Debenture shall be securities convertible into shares of Common Stock at shall be deemed to be equal to the option sum of the Holderaggregate offering price (before deduction of underwriting discounts or commissions and expenses payable to third parties) of all such securities plus the minimum aggregate amount, if any, payable upon conversion of any such convertible securities into shares of Common Stock. (7) For the purpose of any computation under paragraphs (2), (4), (5) or (6) of this Section 1(b), the current market price per share of Common Stock on any date shall be deemed to be the average of the daily Closing Prices for the five (5) consecutive Trading Days commencing ten (10) Trading Days before the earlier of (i) the day in whole or in part at any time question and from time to time, after (ii) the Original Issue Date (subject day before the "ex" date with respect to the limitations on conversion set forth in Section 4(a)(ii) hereof)issuance or distribution requiring such computation. The Holder shall effect conversions by delivering to the Company a completed notice substantially in the form attached hereto as Exhibit A (a "Conversion Notice"). The Conversion Notice shall set forth the remaining principal amount For purposes of this Debenture and all accrued and unpaid interest thereon subsequent paragraph, the term "ex date", when used with respect to any issuance or distribution, means the conversion at issue. The first date on which a Conversion Notice is delivered is the "Conversion DateCommon Stock trades regular way in the applicable securities market or on the applicable securities exchange without the right to receive such issuance or distribution." Unless (c) The Company shall promptly notify the Holder is converting pursuant to Section 8(b) of any adjustment to the entire principal amount outstanding under Conversion Rate required by paragraphs (1), (2), (3), (4), (5) and (6) of this DebentureSection 1(b). (d) The Company shall at all times reserve and keep available, free from preemptive rights, out of its authorized but unissued Common Stock, for the purpose of effecting the conversion of the Note, the Holder is not full number of shares of Common Stock then issuable upon the conversion of this Note. (e) The Company agrees that all Common Stock which may be required to physically surrender this Debenture to delivered upon conversion of the Company in order to effect conversions. Subject to Section 4(b)Note, each Conversion Noticeupon such delivery, once given, will have been duly authorized and validly issued and will be fully paid and nonassessable and free of preemptive rights (and shall be irrevocable. Conversions hereunder shall have issued out of the effect of lowering the outstanding principal amount of this Debenture plus all accrued and unpaid interest thereon in an amount equal to the applicable conversion, which shall be evidenced by notations made in the Conversion Notice. The Holder and the Company shall maintain records showing the principal amount converted and the date of such conversions. Company's authorized but unissued Common Stock). (f) In the event of any dispute recapitalization or discrepancyreclassification of the Common Stock (other than a change in par value, or as a result of a subdivision or combination covered by paragraph (3) of this Section 1(b)) (collectively, a "Capital Reorganization"), the records Company shall execute and deliver to the Holder a supplemental agreement providing that the Holder has the right thereafter, during the period this Note shall be convertible as specified in Section 1(a), to convert this Note only into the kind and amount of securities, cash and other property receivable upon such Capital Reorganization by a holder of the number of shares of Common Stock of the Company into which this Note might have been converted immediately prior to such Capital Reorganization, and, if holders of the Company's Common Stock are given the right to elect the kind or amount of securities, cash or other property receivable upon such Capital Reorganization, then the Holder shall be controlling provided the right to so elect and determinative in notice of such right to elect on the absence same terms and conditions offered to the holders of manifest errorthe Company's Common Stock. (g) The Company shall not consummate a transaction pursuant to which it is acquired by or merged or consolidated into another Person or convey, transfer or sell all or substantially all of its assets (an "Acquisition Event"), unless the successor Person (or its ultimate parent, if applica

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

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

Conversion. (A) This Debenture shall be convertible into shares of Common Stock at the option Subject to adjustment as provided in Section 5.12(b)(ix), each of the Holderholders of the Class C Convertible Preferred Units shall have the right (the “Holder Conversion Right”), at any time (1) during any Holder Early Conversion Period or (2) following the second anniversary of the Class C Issue Date, to require conversion in whole or in part at any time and from time to timeof its Class C Convertible Preferred Units into Common Units, after the Original Issue Date (subject to the limitations on conversion conditions set forth in this Section 4(a)(ii) hereof5.12(b)(vii). The number of shares of Common Stock issuable upon a conversion hereunder shall be determined by adding the sum of (i) the quotient obtained by dividing (x) the outstanding principal amount of this Debenture to be converted and (y) the Conversion Price (as defined herein), and (ii) the amount equal to (I) the product of (x) the outstanding principal amount of this Debenture to be converted and (y) the product of (1) the quotient obtained by dividing .12 by 360 and (2) the number of days for which such principal amount was outstanding, divided by (II) the Conversion Price on the Conversion Date, provided, that if the Company shall have timely elected to pay the interest due on a Conversion Date in cash pursuant to the terms hereof, subsection (ii) shall not be used in the calculation of the number of shares of Common Stock issuable upon a conversion hereunder. (B) Notwithstanding anything Subject to adjustment as provided in Section 5.12(b)(ix), the Partnership (acting pursuant to direction and approval of the Conflicts Committee (following consultation with the full Board of Directors and the executive officers of the General Partner) with respect to any Class C Convertible Preferred Units then owned by any of the initial holders of Class C Convertible Preferred Units, as set forth on Schedule [X] hereto, or their Affiliates) shall have the right (the “Partnership Forced Conversion Right”), at any time during any Partnership Forced Conversion Period, to convert in whole or in part (but in no event shall a Partnership Forced Conversion Notice relate to Class C Convertible Preferred Units that are convertible into Common Units having a market value, based on the average trading price calculated in accordance with the first paragraph of the definition of “Partnership Forced Conversion Period,” of less than $100 million in the aggregate (provided, that if less than such amount remains outstanding, such Partnership Forced Conversion Notice must relate to all of the Class C Convertible Preferred Units then outstanding)) the Class C Convertible Preferred Units into Common Units, subject to the contrary contained herein, conditions set forth in this Section 5.12(b)(vii) and only if there is no accrued and unpaid distribution on any Conversion Date: (1) the number of shares of Common Stock Class C Convertible Preferred Units at the time authorized, unissued and unreserved for all purposes, or held as treasury stock, is insufficient to pay interest hereunder in shares of Common Stock; (2) giving the Underlying Shares issuable for such conversion (including any interest payable in shares) (x) are not registered for resale pursuant to an effective Underlying Shares Registration Statement and (y) may not be sold without volume restrictions pursuant to Rule 144(k) promulgated under the Securities Act (as defined in Section 6); (3) the Common Stock is not listed or quoted for trading on the OTC or on a Subsequent Market; (4) the Company has failed to timely satisfy its conversion obligations hereunder; or (5) the issuance of such shares of Common Stock would result in a violation of Sections 4(a)(ii), then, the Company may not pay interest in kind and must pay interest in cash by delivering, within three Trading Days of each applicable Partnership Forced Conversion Date, an amount in cash equal to the product of (a) the outstanding principal amount of the Debentures to be converted on such Conversion Date and (b) the product of (x) the quotient obtained by dividing .12 by 360 and (y) the number of days for which such principal amount was outstandingNotice. (C) This Debenture Any Common Units delivered as a result of conversion pursuant to this Section 5.12(b)(vii) shall be convertible into shares of Common Stock at the option validly issued, fully paid and non-assessable (except as such non-assessability may be affected by matters described in Sections 17-303, 17-607 and 17-804 of the HolderDelaware Act), in whole free and clear of any liens, claims, rights or in part at any time and from time to timeencumbrances other than those arising under the Delaware Act or this Agreement, after or created by the Original Issue Date (subject to the limitations on conversion set forth in Section 4(a)(ii) hereof). The Holder shall effect conversions by delivering to the Company a completed notice substantially in the form attached hereto as Exhibit A (a "Conversion Notice"). The Conversion Notice shall set forth the remaining principal amount of this Debenture and all accrued and unpaid interest thereon subsequent to the conversion at issue. The date on which a Conversion Notice is delivered is the "Conversion Date." Unless the Holder is converting the entire principal amount outstanding under this Debenture, the Holder is not be required to physically surrender this Debenture to the Company in order to effect conversionsholders thereof. Subject to Section 4(badjustment as provided in Sections 5.9 and 5.12(b)(ix), each Conversion Notice, once given, shall be irrevocable. Conversions hereunder shall have the effect of lowering the outstanding principal amount of this Debenture plus all accrued and unpaid interest thereon in an amount equal to the applicable conversion, which shall be evidenced by notations made in the Conversion Notice. The Holder and the Company shall maintain records showing the principal amount converted and the date of such conversions. In the event of any dispute or discrepancy, the records Class C Convertible Preferred Units will convert into Common Units on a one-for-one basis upon exercise of the Holder Conversion Right or the Partnership Forced Conversion Right. Immediately following any conversion, the rights of the holders of converted Class C Convertible Preferred Units, including, without limitation, any accrual of distributions, shall cease and the Persons entitled to receive the Common Units upon the conversion of Class C Convertible Preferred Units shall be controlling and determinative treated for all purposes as having become the owners of such Common Units. (D) In order to exercise the Holder Conversion Right, the holder of any Class C Convertible Preferred Unit to be converted shall surrender the Certificate representing such Class C Convertible Preferred Unit, duly endorsed or assigned to the Partnership or in the absence of manifest error.blank, at any

Conversion. (A) This Debenture 4.1 If the Merger Agreement is terminated, then, following such termination, each share of Series E Preferred Stock shall be convertible automatically convert into [__________] shares of Common Class A Stock at the option of the Holder, in whole or in part at any time and (as adjusted from time to timetime to appropriately reflect the effect of any stock splits, reverse splits, stock dividends, combinations and other similar events affecting the shares of Class A Stock and occurring after the Original Issue Date (subject date of issuance of the Series E Preferred Stock). 4.2 On the effective date of the conversion of the Series E Preferred Stock pursuant to Section 4.1, all rights with respect to the limitations on conversion set forth in Section 4(a)(ii) hereof). The number of shares of Common Series E Preferred Stock issuable upon a conversion hereunder shall be determined by adding so converted, including the sum rights, if any, to receive notices, will terminate, except the rights of (i) the quotient obtained by dividing (x) the outstanding principal amount of this Debenture Holders thereof to be converted and (y) the Conversion Price (as defined herein), and (ii) the amount equal to (I) the product of (x) the outstanding principal amount of this Debenture to be converted and (y) the product of (1) the quotient obtained by dividing .12 by 360 and (2) the number of days receive certificates for which such principal amount was outstanding, divided by (II) the Conversion Price on the Conversion Date, provided, that if the Company shall have timely elected to pay the interest due on a Conversion Date in cash pursuant to the terms hereof, subsection (ii) shall not be used in the calculation of the number of shares of Common Class A Stock issuable upon a conversion hereunderinto which such shares of Series E Preferred Stock have been converted; and (2) exercise the rights to which they are entitled as Holders of Class A Stock. (B) Notwithstanding anything 4.3 The Issuer shall at all times reserve and keep available for issuance upon the conversion of the Series E Preferred Stock, free from preemptive rights, such number of its authorized but unissued shares of Class A Stock as will from time to time be sufficient to permit the contrary contained hereinconversion of all outstanding shares of Series E Preferred Stock, if on any Conversion Date: (1) and shall take all action required to increase the authorized number of shares of Common each class of Class A Stock if at any time there shall be insufficient authorized unissued shares of Class A Stock to permit such reservation or to permit the conversion of all outstanding shares of Series E Preferred Stock. 4.4 If any shares of Class A Stock that would be issuable upon conversion pursuant to this Section 4 require registration with or approval of any Governmental Authority before such shares may be issued upon conversion, the Issuer will as expeditiously as possible cause such shares to be duly registered or approved, as the case may be. The Issuer will use commercially reasonable efforts to list the shares of Class A Stock required to be delivered upon conversion of shares of Series E Preferred Stock prior to such delivery upon the principal national securities exchange or association, if any, upon which the outstanding Class A Stock is listed at the time authorized, unissued and unreserved for all purposes, or held as treasury stock, is insufficient to pay interest hereunder in shares of Common Stock; (2) the Underlying Shares issuable for such conversion (including any interest payable in shares) (x) are not registered for resale pursuant to an effective Underlying Shares Registration Statement and (y) may not be sold without volume restrictions pursuant to Rule 144(k) promulgated under the Securities Act (as defined in Section 6); (3) the Common Stock is not listed or quoted for trading on the OTC or on a Subsequent Market; (4) the Company has failed to timely satisfy its conversion obligations hereunder; or (5) the issuance of such shares of Common Stock would result in a violation of Sections 4(a)(ii), then, the Company may not pay interest in kind and must pay interest in cash by delivering, within three Trading Days of each applicable Conversion Date, an amount in cash equal to the product of (a) the outstanding principal amount of the Debentures to be converted on such Conversion Date and (b) the product of (x) the quotient obtained by dividing .12 by 360 and (y) the number of days for which such principal amount was outstandingdelivery. (C) This Debenture shall be convertible into shares of Common Stock at the option of the Holder, in whole or in part at any time and from time to time, after the Original Issue Date (subject to the limitations on conversion set forth in Section 4(a)(ii) hereof). The Holder shall effect conversions by delivering to the Company a completed notice substantially in the form attached hereto as Exhibit A (a "Conversion Notice"). The Conversion Notice shall set forth the remaining principal amount of this Debenture and all accrued and unpaid interest thereon subsequent to the conversion at issue. The date on which a Conversion Notice is delivered is the "Conversion Date." Unless the Holder is converting the entire principal amount outstanding under this Debenture, the Holder is not be required to physically surrender this Debenture to the Company in order to effect conversions. Subject to Section 4(b), each Conversion Notice, once given, shall be irrevocable. Conversions hereunder shall have the effect of lowering the outstanding principal amount of this Debenture plus all accrued and unpaid interest thereon in an amount equal to the applicable conversion, which shall be evidenced by notations made in the Conversion Notice. The Holder and the Company shall maintain records showing the principal amount converted and the date of such conversions. In the event of any dispute or discrepancy, the records of the Holder shall be controlling and determinative in the absence of manifest error.

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

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

Conversion. (Aa) This Debenture In the event of an Initial Public Offering, Qualified Offering or Qualified Parent Sale by ▇▇▇▇▇ or any of its Affiliates of any entity (other than the Company) of which the Company and its Subsidiaries, taken as a whole, comprise 90% or more of the assets, revenues or income (such entity, a “Successor Entity”), then, immediately prior to the consummation of such Initial Public Offering, Qualified Offering or Qualified Parent Sale, all then-outstanding Management Shares shall be convertible into shares of Common Stock at the option of the Holderautomatically canceled and each Management Member shall receive, in whole exchange for the cancellation of his or in part at any time and from time to timeher Management Shares, after the Original Issue Date (subject to the limitations on conversion set forth in Section 4(a)(ii) hereof). The such number of shares of Common Stock issuable upon a conversion hereunder common stock (or equivalent class of securities) of the Successor Entity (“Successor Shares”) with an aggregate Fair Market Value equal to the aggregate Fair Market Value of such Management Member’s Management Shares (the Successor Shares so disbursed to the Management Members, and Successor Shares acquired by any Management Member thereafter, the “Converted Shares”) (such cancellation and exchange, the “Conversion”). All fractional Successor Shares shall be determined by adding paid in cash to the sum of applicable Management Member(s). ▇▇▇▇▇ agrees to (i) provide a written notice to the quotient obtained Management Members at least fifteen (15) Business Days prior to the date on which ▇▇▇▇▇ expects to consummate an Initial Public Offering, Qualified Offering or Qualified Parent Sale in which a Conversion shall occur and (ii) to the extent permitted by dividing Applicable Law, take any and all reasonable and necessary actions and comply with all necessary legal and regulatory requirements to permit the issuance of the Converted Shares to the Management Members; provided, however, that notwithstanding the foregoing, if (x) the outstanding principal amount of this Debenture an Initial Public Offering, Qualified Offering or Qualified Parent Sale in which a Conversion shall occur is to be converted consummated solely in the PRC, and (y) the then applicable legal and/or regulatory requirements of the PRC prohibit ▇▇▇▇▇ from issuing the Successor Shares to the Management Members (a “Non-Conversion Price (as defined hereinEvent”), then Management Members shall retain his or her outstanding Management Shares. Any such Successor Entity undertaking an Initial Public Offering or a Qualified Offering shall hereinafter be referred to as an “Offering Entity”, and any shares of such Offering Entity shall hereinafter be referred to as an “Offering Share”. (iib) No Management Member shall be obligated to pay any expenses incurred in connection with any Conversion that does not result in the amount equal receipt or ownership by such Management Member of Tradeable Securities; provided, however, that the foregoing clause shall not, and shall not be deemed or construed to, eliminate or otherwise limit any Management Member’s obligation to (I) bear the product of (x) the outstanding principal amount of this Debenture to be converted costs and (y) the product of (1) the quotient obtained by dividing .12 by 360 and (2) the number of days expenses for which such principal amount was outstanding, divided by (IIManagement Member is responsible as provided in Sections 7(c) the Conversion Price on the Conversion Date, provided, that if the Company shall have timely elected to pay the interest due on a Conversion Date in cash pursuant to the terms hereof, subsection (ii) shall not be used in the calculation of the number of shares of Common Stock issuable upon a conversion hereunderand 8(c). (B) Notwithstanding anything to the contrary contained herein, if on any Conversion Date: (1) the number of shares of Common Stock at the time authorized, unissued and unreserved for all purposes, or held as treasury stock, is insufficient to pay interest hereunder in shares of Common Stock; (2) the Underlying Shares issuable for such conversion (including any interest payable in shares) (x) are not registered for resale pursuant to an effective Underlying Shares Registration Statement and (y) may not be sold without volume restrictions pursuant to Rule 144(k) promulgated under the Securities Act (as defined in Section 6); (3) the Common Stock is not listed or quoted for trading on the OTC or on a Subsequent Market; (4) the Company has failed to timely satisfy its conversion obligations hereunder; or (5) the issuance of such shares of Common Stock would result in a violation of Sections 4(a)(ii), then, the Company may not pay interest in kind and must pay interest in cash by delivering, within three Trading Days of each applicable Conversion Date, an amount in cash equal to the product of (a) the outstanding principal amount of the Debentures to be converted on such Conversion Date and (b) the product of (x) the quotient obtained by dividing .12 by 360 and (y) the number of days for which such principal amount was outstanding. (C) This Debenture shall be convertible into shares of Common Stock at the option of the Holder, in whole or in part at any time and from time to time, after the Original Issue Date (subject to the limitations on conversion set forth in Section 4(a)(ii) hereof). The Holder shall effect conversions by delivering to the Company a completed notice substantially in the form attached hereto as Exhibit A (a "Conversion Notice"). The Conversion Notice shall set forth the remaining principal amount of this Debenture and all accrued and unpaid interest thereon subsequent to the conversion at issue. The date on which a Conversion Notice is delivered is the "Conversion Date." Unless the Holder is converting the entire principal amount outstanding under this Debenture, the Holder is not be required to physically surrender this Debenture to the Company in order to effect conversions. Subject to Section 4(b), each Conversion Notice, once given, shall be irrevocable. Conversions hereunder shall have the effect of lowering the outstanding principal amount of this Debenture plus all accrued and unpaid interest thereon in an amount equal to the applicable conversion, which shall be evidenced by notations made in the Conversion Notice. The Holder and the Company shall maintain records showing the principal amount converted and the date of such conversions. In the event of any dispute or discrepancy, the records of the Holder shall be controlling and determinative in the absence of manifest error.

Conversion. (Aa) This Debenture shall be convertible into shares of Common Stock at At the option of the Holder, at any time, subject to Section 3(e), the Debentures, in whole or in part at any time and from time to timepart, after may be converted on the Original Issue Conversion Date (subject as defined below) at the principal amount thereof, into fully paid and nonassessable shares (calculated as to each conversion to the limitations on conversion set forth nearest 1/100 of a share) of Common Stock, including the associated Rights (as defined in Section 4(a)(ii) hereofthe Debenture Purchase Agreement), at the Conversion Price (as defined below), in effect at the time of conversion. The price at which the number of shares of Common Stock issuable upon a conversion hereunder to be delivered shall be determined by adding upon conversion shall be $5.50 per share of Common Stock (the sum "Conversion Price"). The Conversion Price shall be adjusted in certain instances as provided in this Debenture, including paragraph (d) of this Section 3. (b) If the Holder elects to convert the Debentures, the Holder shall provide written notice (the "Conversion Notice") to the Company (at the Company's address) which states that the Holder elects to convert such Debenture. In order to exchange the securities, the Holder shall surrender the Debentures, duly endorsed or assigned to the Company or in blank. Subject to Section 3(e), each conversion shall be deemed to have been effected immediately prior to the close of business on the date the Holder delivers the Conversion Notice (the "Conversion Date"). If such day is not a business day, and a day on which the principal national securities exchange or market quotation system on which the Common Stock is then listed or admitted for trading is open (a "Trading Day"), then such conversion will be deemed to have been effected on the next succeeding Trading Day. As promptly as practicable on or after the Conversion Date, the Company shall issue and deliver the certificates representing the number of full shares of Common Stock, including the associated Rights, issuable upon conversion, together with payment in lieu of any fraction of a share, as provided in Section 3(c). (c) No fractional shares of Common Stock shall be issued upon conversion of Debentures. Instead of any fractional share of Common Stock which would otherwise be issuable upon conversion of any Debenture, the Company shall pay a cash adjustment in respect of such fraction in an amount equal to the same fraction of the market price per share of Common Stock at the close of business on the Conversion Date. (d) The Conversion Price shall be subject to the following adjustments: (i) If, on any Conversion Date, the quotient obtained by dividing (x) average closing price of the outstanding principal amount of this Debenture to be converted and (y) Common Stock during the twenty trading days immediately preceding the Conversion Date is less than the Conversion Price (as defined herein$5.50, before any anti-dilution adjustments pursuant to this Agreement including Section 3(d)(ii)-(vii)), and then the Conversion Price shall be reduced to such average closing price (the "Market Conversion Price"). Adjustments to the Conversion Price pursuant to this subsection (i) are referred to as "Market Adjustments"; all other adjustments to the Conversion Price provided in this Debenture are "Anti-Dilution Adjustments". (ii) In case outstanding shares of Common Stock shall be subdivided into a greater number of shares of Common Stock, the amount equal Conversion Price in effect at the opening of business on the day following the day upon which such subdivision becomes effective shall be proportionately reduced, and, conversely, in case outstanding shares of Common Stock shall each be combined into a smaller number of shares of Common Stock, the Conversion Price in effect at the opening of business on the day following the day upon which such combination becomes effective shall be proportionately increased, such reduction or increase, as the case may be, to become effective immediately after the opening of business on the day following the day upon which such subdivision or combination becomes effective. (Iiii) In case the product Company shall pay or make a dividend or other distribution on any class of (x) capital stock of the outstanding principal amount Company in Common Stock, the Conversion Price in effect at the opening of this Debenture business on the day following the date fixed for the determination of stockholders entitled to receive such dividend or other distribution shall be converted and (y) reduced by multiplying such Conversion Price by a fraction of which the product of (1) the quotient obtained by dividing .12 by 360 and (2) numerator shall be the number of days shares of Common Stock outstanding at the close of business on the date fixed for such determination and the denominator shall be the sum of such number of shares and the total number of shares constituting such dividend or other distribution, such reduction to become effective immediately after the opening of business on the day following the date fixed for such determination. (iv) In case the Company shall issue rights or warrants to all holders of its Common Stock entitling them to subscribe for or purchase shares of Common Stock at a price per share less than the Conversion Price, the Conversion Price in effect at the opening of business on the day following the date fixed for the determination of stockholders entitled to receive such rights or warrants shall be adjusted to such subscription or purchase price, such reduction to become effective immediately after the opening of business on the day following the date fixed for such determination. (v) In case the Company shall issue Common Stock (other than shares of Common Stock issued upon exercise of rights, options and warrants outstanding as of the date hereof), or rights, options or warrants convertible into, or exchangeable or exercisable for, Common Stock to any third party, or shall reprice or adjust the conversion, exchange or exercise price of rights, options or warrants outstanding as of the date hereof, at or to a price per share of Common Stock less than the Conversion Price, the Conversion Price in effect at the opening of business on the day following the date of such issuance, repricing or adjustment shall be adjusted to such issue, conversion, exchange or exercise price or, in the case of a repricing or adjustment, such conversion, exchange or exercise price as so adjusted, such reduction to become effective immediately after the opening of business on the day following the date of such issuance, repricing or adjustment, as the case may be, provided, no such adjustment shall be made with respect to: (A) up to 3,833,333 shares of Common Stock to be issued for $3 per share in connection with CHS's acquisition of SIS Distribution Ltd.; (B) up to 2,653,000 shares of Common Stock to be issued for $3 per share in connection with CHS's acquisition of Micro Informatica Corp.; or (C) shares of Common Stock or Preferred Stock issued pursuant to the Rights Agreement. (vi) In case the Company shall, by dividend or otherwise, distribute to all holders of its Common Stock evidences of its indebtedness or assets (including securities, but excluding any rights or warrants referred to in clause (iv) of this Section, any dividend or distribution paid in cash out of the retained earnings of the Company and any dividend or distribution referred to in clause (iii) of this Section), the Conversion Price in effect at the opening of business on the date fixed for the determination of stockholders entitled to receive such distribution shall be adjusted so that the same shall equal the price determined by multiplying the Conversion Price in effect immediately prior to the close of business on the date fixed for the determination of stockholders entitled to receive such distribution by a fraction of which such principal amount was outstanding, divided by (II) the numerator shall be the Conversion Price on the date fixed for such determination less the then fair market value of the portion of the assets or evidences of indebtedness so distributed applicable to one share of Common Stock and the denominator shall be such Conversion DatePrice, provided, that if the Company shall have timely elected such adjustment to pay the interest due on a Conversion Date in cash pursuant become effective immediately prior to the terms hereofopening of business on the day following the date fixed for such determination. (vii) The reclassification of Common Stock into securities including other than Common Stock shall be deemed to involve (A) a distribution of such securities other than Common Stock to all holders of Common Stock (and the effective date of such reclassification shall be deemed to be "the date fixed for the determination of stockholders entitled to receive such distribution" and "the date fixed for such determination" within the meaning of clause (vi) of this Section), subsection and (iiB) shall not be used in a subdivision or combination, as the calculation case may be, of the number of shares of Common Stock issuable upon a conversion hereunder. (B) Notwithstanding anything outstanding immediately prior to the contrary contained herein, if on any Conversion Date: (1) such reclassification into the number of shares of Common Stock at outstanding immediately thereafter (and the time authorizedeffective date of such reclassification shall be deemed to be "the day upon which such subdivision becomes effective" or "the day upon which such combination becomes effective", unissued as the case may be, and unreserved for all purposes, "the day upon which such subdivision or held as treasury stock, is insufficient to pay interest hereunder in shares combination becomes effective" within the meaning of Common Stock;clause (ii) of this Section). (2e) If the Underlying Shares issuable for such conversion (including any interest payable in shares) (x) are not registered for resale pursuant Holder elects to an effective Underlying Shares Registration Statement convert the Debenture and (y) may not be sold without volume restrictions pursuant deliver a Conversion Notice to Rule 144(k) promulgated under the Securities Act (as defined in Section 6); (3) the Common Stock is not listed or quoted for trading on the OTC or on a Subsequent Market; (4) the Company has failed to timely satisfy its which provides for conversion obligations hereunder; or (5) at a Conversion Price which is lower than the issuance of such shares of Common Stock would result in a violation of Sections 4(a)(ii)initial Conversion Price, thenas adjusted only for Anti-Dilution Adjustments, then the Company may not pay interest in kind and must pay interest in cash by delivering, within three Trading Days of each applicable Conversion Date, an amount in cash equal shall have the right to redeem the product of (a) the outstanding principal amount of the Debentures Debenture intended to be converted on such Conversion Date and (b) the product 60 days after delivery of (x) the quotient obtained by dividing .12 by 360 and (y) the number of days for which such principal amount was outstanding. (C) This Debenture shall be convertible into shares of Common Stock at the option of the Holder, in whole or in part at any time and from time to time, after the Original Issue Date (subject to the limitations on conversion set forth in Section 4(a)(ii) hereof). The Holder shall effect conversions by delivering to the Company a completed notice substantially in the form attached hereto as Exhibit A (a "Conversion Notice"). The Conversion Notice shall set forth the remaining principal amount of this Debenture and all accrued and unpaid interest thereon subsequent to the conversion at issue. The date on which a Conversion Notice is delivered is the "Conversion Date." Unless the Holder is converting the entire principal amount outstanding under this Debenture, the Holder is not be required to physically surrender this Debenture to the Company in order to effect conversions. Subject to Section 4(b), each Conversion Notice, once given, shall be irrevocable. Conversions hereunder shall have the effect of lowering the outstanding principal amount of this Debenture plus all accrued and unpaid interest thereon in an amount equal to the applicable conversion, which shall be evidenced by notations made in the Conversion Notice. The Closing of the redemption, if any, shall occur on the sixtieth day following delivery of the Conversion Notice. During the sixty day period the Holder shall have the right at any time to rescind the Conversion Notice by written notice to the Company; and consequently such redemption shall automatically be terminated. (f) Whenever the Conversion Price is adjusted pursuant to Section 3(d): (i) the Company shall maintain records compute the adjusted Conversion Price and shall prepare a certificate signed by the Company setting forth the adjusted Conversion Price showing in reasonable detail the principal amount converted facts upon which such adjustment is based; and (ii) a notice stating that the Conversion Price has been adjusted and setting forth the date of such conversions. In the event of any dispute or discrepancyadjusted Conversion Price shall forthwith be prepared, the records and as soon as practicable after it is prepared (together with a copy of the Holder certificate referred to in clause (i) above), such notice shall be controlling and determinative in mailed by the absence of manifest errorCompany to all Holders.

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

Conversion. Subject to Sections 1.5(g), 1.7 and 1.8, at the Effective Time, by virtue of the Merger and without any further action on the part of Parent, Merger Sub, the Company, any stockholder of the Company or any other Person: (i) each share of Capital Stock held in the Company’s treasury or owned by Parent, Merger Sub, the Company or any direct or indirect wholly-owned subsidiary of Parent, Merger Sub or the Company immediately prior to the Effective Time, if any, shall be extinguished and canceled without payment of any consideration with respect thereto; (ii) each share of Common Stock issued and outstanding immediately prior to the Effective Time (all such issued and outstanding shares, other than any share of Common Stock to be cancelled pursuant to Section 1.5(a)(i), the “Outstanding Capital Stock”) shall be converted automatically into the right to receive (following the surrender of the certificate representing such share of Common Stock or the delivery of an appropriate affidavit, in each case, in accordance with Section 1.8): (A) This Debenture shall be convertible into shares an amount in cash per share of Common Stock at the option of the Holder, in whole or in part at any time and from time to time, after the Original Issue Date (subject to the limitations on conversion set forth in Section 4(a)(ii) hereof). The number of shares of Common Stock issuable upon a conversion hereunder shall be determined by adding the sum of (i) the quotient obtained by dividing (x) the outstanding principal amount of this Debenture to be converted and (y) the Conversion Price (as defined herein), and (ii) the amount equal to (I) the product of (x) the outstanding principal amount of this Debenture to be converted and (y) the product of to: (1) the quotient obtained by dividing .12 by 360 and Per Share Amount; minus (2) the number of days for which such principal amount was outstanding, divided by Per Share Escrow Amount; minus (II3) the Conversion Price on Per Share Expense Amount; (B) any cash disbursements required to be made out of the Conversion Date, provided, that if the Company shall have timely elected Escrow Amount with respect to pay the interest due on a Conversion Date in cash pursuant such share to the terms hereofformer holder thereof in accordance with the Escrow Agreement, subsection as and when such disbursements are required to be made; (iiC) any cash disbursements required to be made out of the Expense Amount with respect to such share to the former holder thereof in accordance with this Agreement, as and when such disbursements are required to be made. (iii) each share of the common stock, par value $0.001 per share, of Merger Sub issued and outstanding immediately prior to the Effective Time shall not be used in converted automatically into one fully paid and nonassessable share of common stock of the calculation Surviving Corporation and shall constitute the only outstanding share of capital stock of the Surviving Corporation at the Effective Time. From and after the Effective Time, all certificates representing shares of common stock of Merger Sub shall be deemed for all purposes to represent the number of shares of Common Stock issuable upon a conversion hereunder. (B) Notwithstanding anything to common stock of the contrary contained hereinSurviving Corporation into which the shares of common stock of Merger Sub were converted in accordance with the immediately preceding sentence. The amount of cash, if on any, that each Effective Time Holder is entitled to receive at any Conversion Date: (1) particular time for the number of shares of Common Outstanding Capital Stock at held by such Effective Time Holder or the time authorized, unissued and unreserved for all purposes, or held as treasury stock, is insufficient to pay interest hereunder in shares of Common Stock; (2) the Underlying Shares issuable for such conversion (including any interest payable in shares) (x) are not registered for resale pursuant Capital Stock subject to an effective Underlying Shares Registration Statement and (y) may not be sold without volume restrictions pursuant to Rule 144(k) promulgated under the Securities Act Outstanding Vested Options (as defined in Section 61.6(a); ) shall be rounded to the nearest cent (3with $0.005 being rounded upward) and computed after aggregating the Common Stock is not listed or quoted cash amounts payable at such time for trading on the OTC or on a Subsequent Market; (4) the Company has failed to timely satisfy its conversion obligations hereunder; or (5) the issuance of such all shares of Common each class and series of Outstanding Capital Stock would result in represented by a violation of Sections 4(a)(ii), then, the Company may not pay interest in kind and must pay interest in cash by delivering, within three Trading Days of each applicable Conversion Date, an amount in cash equal to the product of (a) the outstanding principal amount of the Debentures to be converted on such Conversion Date and (b) the product of (x) the quotient obtained by dividing .12 by 360 and (y) the number of days for which such principal amount was outstanding. (C) This Debenture shall be convertible into shares of Common Stock at the option of the Holder, in whole or in part at any time and from time to time, after the Original Issue Date (subject to the limitations on conversion set forth in Section 4(a)(ii) hereof). The Holder shall effect conversions by delivering to the Company a completed notice substantially in the form attached hereto as Exhibit A (a "Conversion Notice"). The Conversion Notice shall set forth the remaining principal amount of this Debenture particular stock certificate and all accrued and unpaid interest thereon subsequent to the conversion at issue. The date on which Outstanding Vested Options held by such Effective Time Holder represented by a Conversion Notice is delivered is the "Conversion Dateparticular option grant." Unless the Holder is converting the entire principal amount outstanding under this Debenture, the Holder is not be required to physically surrender this Debenture to the Company in order to effect conversions. Subject to Section 4(b), each Conversion Notice, once given, shall be irrevocable. Conversions hereunder shall have the effect of lowering the outstanding principal amount of this Debenture plus all accrued and unpaid interest thereon in an amount equal to the applicable conversion, which shall be evidenced by notations made in the Conversion Notice. The Holder and the Company shall maintain records showing the principal amount converted and the date of such conversions. In the event of any dispute or discrepancy, the records of the Holder shall be controlling and determinative in the absence of manifest error.

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

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

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

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

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

Conversion. (A) This Debenture shall be convertible into shares If any and all amounts due hereunder are not paid in full on or before the closing of Common Stock a Qualified Financing, at the option election of Holder, the entire principal balance of this Note, together with any accrued and unpaid interest thereon, shall convert into fully paid and non-assessable shares (rounded up to the nearest whole share) of the Holderseries of preferred stock of the Company issued pursuant to such Qualified Financing (the “Conversion Shares”), in whole or in part at any time and from time such conversion to timeoccur promptly following the delivery by Holder of a Notice of Conversion, after the Original Issue Date form of which is attached hereto as Annex A (subject to the limitations on conversion set forth in Section 4(a)(ii) hereofeach, a “Notice of Conversion”). The number of shares Conversion Shares to be issued to Holder upon conversion of Common Stock issuable upon this Note pursuant to a conversion hereunder Qualified Financing shall be determined by adding the sum of (i) equal to the quotient obtained by dividing (x) the outstanding entire principal amount balance of this Debenture to be converted and (y) the Conversion Price (as defined herein)Note, and (ii) the amount equal to (I) the product of (x) the outstanding principal amount of this Debenture to be converted and (y) the product of (1) the quotient obtained by dividing .12 by 360 and (2) the number of days for which such principal amount was outstanding, divided by (II) the Conversion Price on the Conversion Date, provided, that if the Company shall have timely elected to pay the interest due on a Conversion Date in cash pursuant to the terms hereof, subsection (ii) shall not be used in the calculation of the number of shares of Common Stock issuable upon a conversion hereunder. (B) Notwithstanding anything to the contrary contained herein, if on together with any Conversion Date: (1) the number of shares of Common Stock at the time authorized, unissued and unreserved for all purposes, or held as treasury stock, is insufficient to pay interest hereunder in shares of Common Stock; (2) the Underlying Shares issuable for such conversion (including any interest payable in shares) (x) are not registered for resale pursuant to an effective Underlying Shares Registration Statement and (y) may not be sold without volume restrictions pursuant to Rule 144(k) promulgated under the Securities Act (as defined in Section 6); (3) the Common Stock is not listed or quoted for trading on the OTC or on a Subsequent Market; (4) the Company has failed to timely satisfy its conversion obligations hereunder; or (5) the issuance of such shares of Common Stock would result in a violation of Sections 4(a)(ii), then, the Company may not pay interest in kind and must pay interest in cash by delivering, within three Trading Days of each applicable Conversion Date, an amount in cash equal to the product of (a) the outstanding principal amount of the Debentures to be converted on such Conversion Date and (b) the product of (x) the quotient obtained by dividing .12 by 360 and (y) the number of days for which such principal amount was outstanding. (C) This Debenture shall be convertible into shares of Common Stock at the option of the Holder, in whole or in part at any time and from time to time, after the Original Issue Date (subject to the limitations on conversion set forth in Section 4(a)(ii) hereof). The Holder shall effect conversions by delivering to the Company a completed notice substantially in the form attached hereto as Exhibit A (a "Conversion Notice"). The Conversion Notice shall set forth the remaining principal amount of this Debenture and all accrued and unpaid interest thereon subsequent thereon, as of the date of conversion, by the Mandatory Conversion Price. A “Qualified Financing” shall mean sale (or series of related sales, all of which are consummated within ninety (90) days of each other) by the Company of shares of preferred stock after March 27, 2020 with the principal purpose of raising capital and with aggregate gross cash proceeds to the Company of not less than $3,600,000 (or such other amount approved in writing by Holder). The issuance of Conversion Shares pursuant to the conversion at issueof this Note in connection with a Qualified Financing shall be upon and subject to the same terms and conditions applicable to the Conversion Shares sold in the Qualified Financing. The date on which a No ink-original Notice of Conversion shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice is delivered is the "of Conversion Date." Unless the Holder is converting the entire principal amount outstanding under this Debenturefrom be required. To effect conversions hereunder, the Holder is not be required to shall physically surrender this Debenture Note to the Company as promptly as is reasonably practicable after Holder’s receipt of the Conversion Shares. Upon conversion of this Note in order to effect conversions. Subject to Section 4(b)full, each Conversion Notice, once given, Company shall be irrevocable. Conversions hereunder shall have the effect of lowering the outstanding principal amount of forever released from all its obligations and liabilities under this Debenture plus all accrued Note and unpaid interest thereon in an amount equal to the applicable conversion, which this Note shall be evidenced by notations made in the Conversion Notice. The Holder deemed to be cancelled as of such time and any collateral of the Company shall maintain records showing pledged under the principal amount converted and the date of such conversions. In the event of any dispute or discrepancy, the records of the Holder Security Agreement shall be controlling and determinative in the absence of manifest errorreleased.”

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

Conversion. (A) This Debenture shall be convertible The mode of carrying the Merger into effect and the manner and basis of converting the shares of ▇▇▇▇▇▇▇ into shares of Common Stock at the option of the Holder, in whole or in part at any time and from time to time, after the Original Issue Date (subject to the limitations on conversion set forth in Section 4(a)(ii) hereof)IS4B are as follows: 9.1. The aggregate number of shares of ▇▇▇▇▇▇▇ Common Stock issuable upon issued and outstanding on the Merger Date shall, by virtue of the Merger and without any action on the part of the holders thereof, be converted into an aggregate of 100,000 shares of IS4B Common Stock (the "IS4B shares") adjusted by any increase for fractional shares and reduced by any Dissenting Shares (defined below). The IS4B Common Stock to be issued hereunder ("the IS4B Shares") will be issued pursuant to Section 4(2) of the Securities Act of 1933 and/or Rule 506 of the General Rules and Regulations of the Securities and Exchange Commission, will be restricted as to transferability pursuant to Rule 144 thereof, and will bear substantially the following legend: "THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933 (THE "ACT") AND ARE "RESTRICTED SECURITIES" AS THAT TERM IS DEFINED IN RULE 144 UNDER THE ACT. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT, OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE ACT, THE AVAILABILITY OF WHICH IS TO BE ESTABLISHED TO THE SATISFACTION OF IS4B." IS4B agrees to register the re-offer and resale by the holders of the IS4B Shares pursuant to a conversion hereunder registration statement filed by IS4B with the Securities and Exchange Commission in connection with any offering of the IS4B Common Stock (excluding registration statements filed on Forms S-4 or S-8) 9.2. Upon completion of the Merger, there shall be determined by adding the sum 14,512,071 shares of (i) the quotient obtained by dividing (x) the outstanding principal amount of this Debenture to be converted IS4B Common Stock issued and (y) the Conversion Price (as defined herein), and (ii) the amount equal to (I) the product of (x) the outstanding principal amount of this Debenture to be converted and (y) the product of (1) the quotient obtained by dividing .12 by 360 and (2) the number of days for which such principal amount was outstanding, divided subject to such adjustments, held as follows: 100,000 common shares held by (II) the Conversion Price former shareholders of ▇▇▇▇▇▇▇ and 14,412,071 common shares held by the other shareholders of IS4B. 9.3. All outstanding Common or Preferred Stock of ▇▇▇▇▇▇▇ and all warrants, options or other rights to its Common or Preferred Stock shall be retired and canceled as of the Merger Date. 9.4. Each share of ▇▇▇▇▇▇▇ Common Stock that is owned by ▇▇▇▇▇▇▇ as treasury stock shall, by virtue of the Merger and without any action on the Conversion Datepart of ▇▇▇▇▇▇▇, provided, that if the Company shall have timely elected to pay the interest due on a Conversion Date in cash pursuant to the terms hereof, subsection (ii) shall not be used in the calculation retired and canceled as of the Merger Date. 9.5. Each certificate evidencing ownership of shares of IS4B Common Stock issued and outstanding on the Merger Date or held by IS4B in its treasury shall continue to evidence ownership of the same number of shares of IS4B Common Stock. 9.6. IS4B Common Stock issuable upon shall be issued to the holders of ▇▇▇▇▇▇▇ Common Stock in exchange for their shares on a conversion hereunderpro rata basis in accordance with each holder's relative ownership of the ▇▇▇▇▇▇▇ Common Stock that is being exchanged. (B) Notwithstanding anything 9.7. The shares of IS4B Common Stock to be issued in exchange for ▇▇▇▇▇▇▇ Common Stock hereunder shall be proportionately reduced by any shares owned by ▇▇▇▇▇▇▇ shareholders who shall have timely objected to the contrary contained herein, if on any Conversion Date: Merger (1the "Dissenting Shares") in accordance with the number of shares of Common Stock at the time authorized, unissued and unreserved for all purposes, or held as treasury stock, is insufficient to pay interest hereunder in shares of Common Stock; (2) the Underlying Shares issuable for such conversion (including any interest payable in shares) (x) are not registered for resale pursuant to an effective Underlying Shares Registration Statement and (y) may not be sold without volume restrictions pursuant to Rule 144(k) promulgated under the Securities Act (as defined in Section 6); (3) the Common Stock is not listed or quoted for trading on the OTC or on a Subsequent Market; (4) the Company has failed to timely satisfy its conversion obligations hereunder; or (5) the issuance of such shares of Common Stock would result in a violation of Sections 4(a)(ii), then, the Company may not pay interest in kind and must pay interest in cash by delivering, within three Trading Days of each applicable Conversion Date, an amount in cash equal to the product of (a) the outstanding principal amount provisions of the Debentures to be converted on such Conversion Date and (b) the product General Corporation Law of (x) the quotient obtained by dividing .12 by 360 and (y) the number of days for which such principal amount was outstandingDelaware, as provided therein. (C) This Debenture shall be convertible into shares of Common Stock at the option of the Holder, in whole or in part at any time and from time to time, after the Original Issue Date (subject to the limitations on conversion set forth in Section 4(a)(ii) hereof). The Holder shall effect conversions by delivering to the Company a completed notice substantially in the form attached hereto as Exhibit A (a "Conversion Notice"). The Conversion Notice shall set forth the remaining principal amount of this Debenture and all accrued and unpaid interest thereon subsequent to the conversion at issue. The date on which a Conversion Notice is delivered is the "Conversion Date." Unless the Holder is converting the entire principal amount outstanding under this Debenture, the Holder is not be required to physically surrender this Debenture to the Company in order to effect conversions. Subject to Section 4(b), each Conversion Notice, once given, shall be irrevocable. Conversions hereunder shall have the effect of lowering the outstanding principal amount of this Debenture plus all accrued and unpaid interest thereon in an amount equal to the applicable conversion, which shall be evidenced by notations made in the Conversion Notice. The Holder and the Company shall maintain records showing the principal amount converted and the date of such conversions. In the event of any dispute or discrepancy, the records of the Holder shall be controlling and determinative in the absence of manifest error.

Conversion. (Aa) This Debenture shall be convertible into shares of Common Stock at the option of the Holder, in whole or in part at any time and from time to time, after the Original Issue Date (subject to the limitations on conversion Except as set forth in Section 4(a)(ii3.16(a) hereof). The of the Loan Agreement, this Note may be converted into that number of shares of Common Stock issuable (rounded down to the nearest whole share) determined by dividing the Principal Amount (excluding interest) of this Note by $0.15 (the “Conversion Price”), subject to adjustment below, at any time upon the election of the Holder hereof as described in and subject to the conditions set forth in Section 1(c) of the Schedule to the Loan Agreement (the “Holder Conversion”) and upon the election of Maker as described in and subject to the conditions set forth in Section 1(e) of the Schedule to the Loan Agreement (the “Holder Conversion”), all in accordance with and subject to the terms and conditions of the Loan Agreement (each a conversion hereunder “Conversion Event”). (b) As soon as practicable after the occurrence of a Conversion Event, and in any event within the time periods specified in Section 1(c) of the Schedule to the Loan Agreement, Maker at its expense will cause to be issued in the name of and delivered to Holder, a certificate or certificates for the number of shares of Conversion Stock to which Holder shall be determined by adding the sum of (i) the quotient obtained by dividing (x) the outstanding principal amount entitled on such conversion. No fractional Conversion Stock shall be issued on conversion of this Debenture to be converted and (y) Note. If on conversion of this Note a fraction of a share of Conversion Stock results, Maker will pay the cash value of that fractional share based on the Conversion Price then in effect. (as defined herein), c) From and (ii) after the amount equal to (I) the product occurrence of (x) the outstanding principal amount of this Debenture to be converted and (y) the product of (1) the quotient obtained by dividing .12 by 360 and (2) the number of days for which such principal amount was outstanding, divided by (II) the Conversion Price on the Conversion Date, provided, that if the Company shall have timely elected to pay the interest due on a Conversion Date in cash pursuant to the terms hereofEvent, subsection (ii) Maker shall not be used in the calculation reserve and keep available out of the its authorized but unissued Common Stock such number of shares of Common Stock issuable upon a conversion hereunder. (B) Notwithstanding anything to the contrary contained herein, if on any Conversion Date: (1) the number of shares of Common Stock at the time authorized, unissued and unreserved for all purposes, or held as treasury stock, is insufficient to pay interest hereunder in shares of Common Stock; (2) the Underlying Shares issuable for such conversion (including any interest payable in shares) (x) are not registered for resale pursuant to an effective Underlying Shares Registration Statement and (y) may not be sold without volume restrictions pursuant to Rule 144(k) promulgated under the Securities Act (as defined in Section 6); (3) the Common Stock is not listed or quoted for trading on the OTC or on a Subsequent Market; (4) the Company has failed to timely satisfy its conversion obligations hereunder; or (5) the issuance of such shares of Common Stock would result in a violation of Sections 4(a)(ii), then, the Company may not pay interest in kind and must pay interest in cash by delivering, within three Trading Days of each applicable Conversion Date, an amount in cash equal to the product of (a) the outstanding principal amount of the Debentures to be converted on such Conversion Date and (b) the product of (x) the quotient obtained by dividing .12 by 360 and (y) the number of days for which such principal amount was outstanding. (C) This Debenture shall be convertible into shares of Common Stock at the option of the Holder, in whole or in part at any time and from time to timetime be sufficient to effect conversion of this Note and all other Notes. Maker will not, after by amendment of its Certificate of Incorporation or through any reorganization, recapitalization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities, dividend or other distribution of cash or property, or any other voluntary action, avoid or seek to avoid the Original Issue Date (subject observance or performance of any of the terms to the limitations on conversion set forth be observed or performed hereunder by Maker, but will at all times in Section 4(a)(ii) hereof). The Holder shall effect conversions by delivering to the Company a completed notice substantially good faith assist in the form attached hereto carrying out of all the provisions hereof, and in the taking of all such action as Exhibit A (a "Conversion Notice"). The Conversion Notice shall set forth the remaining principal amount of this Debenture and all accrued and unpaid interest thereon subsequent to the conversion at issue. The date on which a Conversion Notice is delivered is the "Conversion Date." Unless the Holder is converting the entire principal amount outstanding under this Debenture, the Holder is not may be required to physically surrender this Debenture to the Company necessary or appropriate in order to effect conversions. Subject to Section 4(b), each Conversion Notice, once given, shall be irrevocable. Conversions hereunder shall have protect the effect conversion rights of lowering the outstanding principal amount of this Debenture plus all accrued and unpaid interest thereon in an amount equal to the applicable conversion, which shall be evidenced by notations made in the Conversion Notice. The Holder and the Company shall maintain records showing the principal amount converted and the date of such conversions. In the event of any dispute or discrepancy, the records of the Holder shall be controlling and determinative in the absence of manifest erroras set forth herein against impairment.

Conversion. (Aa) This Debenture shall be convertible into shares of Common Stock at At the option of the HolderPayee’s option, in whole or in part at any time and from time prior to timepayment in full of the principal balance of this Note, after the Original Issue Date (subject Payee may elect to the limitations on conversion set forth in Section 4(a)(ii) hereof). The number convert all or any portion of shares of Common Stock issuable upon a conversion hereunder shall be determined by adding the sum of (i) the quotient obtained by dividing (x) the outstanding principal amount of this Debenture Note into that number of shares (the “Conversion Shares”) equal to: (i) the portion of the principal amount of the Note being converted pursuant to this Section 15, divided by (ii) $10.00, rounded up to the nearest whole number; provided, however, that the principal amount of any Working Capital Promissory Notes converted shall not exceed in the aggregate $300,000. Each Conversion Share shall have the same terms and conditions as the private placement shares issued by the Maker to the Payee pursuant to a private placement, as described in Maker’s Registration Statement on Form S-1 (333-253171). The Conversion Shares and any other equity security of Maker issued or issuable with respect to the foregoing by way of a share dividend or share split or in connection with a combination of shares, recapitalization, amalgamation, consolidation or reorganization, shall be entitled to the registration rights set forth in that certain Registration and Shareholder Rights Agreement, dated as of March 9, 2021, among the Company, the Payees and the other parties thereto. (b) Upon any complete or partial conversion of the principal amount of this Note, (i) such principal amount shall be so converted and (y) the Conversion Price (as defined herein)such converted portion of this Note shall become fully paid and satisfied, and (ii) the amount equal Payee shall surrender and deliver this Note, duly endorsed, to Maker or such other address which Maker shall designate against delivery of the Conversion Shares, (Iiii) Maker shall promptly deliver a new duly executed Note to the product of (x) Payee in the outstanding principal amount that remains outstanding, if any, after any such conversion and (iv) in exchange for all or any portion of the surrendered Note, Maker shall deliver to Payee the Conversion Shares, which shall bear such legends as are required, in the opinion of counsel to Maker or by any other agreement between Maker and the Payee and applicable state and federal securities laws. (c) The Payee shall pay any and all issue and other taxes that may be payable with respect to any issue or delivery of the Conversion Shares upon conversion of this Debenture to be converted and (y) the product of (1) the quotient obtained by dividing .12 by 360 and (2) the number of days for which such principal amount was outstanding, divided by (II) the Conversion Price on the Conversion Date, Note pursuant hereto; provided, however, that if the Company shall have timely elected to pay the interest due on a Conversion Date in cash pursuant to the terms hereof, subsection (ii) Payee shall not be used obligated to pay any transfer taxes resulting from any transfer requested by the Payee in the calculation of the number of shares of Common Stock issuable upon a conversion hereunderconnection with any such conversion. (Bd) Notwithstanding anything to the contrary contained herein, if on any The Conversion Date: (1) the number Shares shall not be issued upon conversion of shares of Common Stock at the time authorized, unissued this Note unless such issuance and unreserved for all purposes, or held as treasury stock, is insufficient to pay interest hereunder in shares of Common Stock; (2) the Underlying Shares issuable for such conversion (including any interest payable in shares) (x) are not registered for resale pursuant to an effective Underlying Shares Registration Statement and (y) may not be sold without volume restrictions pursuant to Rule 144(k) promulgated under the Securities Act (as defined in Section 6); (3) the Common Stock is not listed or quoted for trading on the OTC or on a Subsequent Market; (4) the Company has failed to timely satisfy its conversion obligations hereunder; or (5) the issuance comply with all applicable provisions of such shares of Common Stock would result in a violation of Sections 4(a)(ii), then, the Company may not pay interest in kind and must pay interest in cash by delivering, within three Trading Days of each applicable Conversion Date, an amount in cash equal to the product of (a) the outstanding principal amount of the Debentures to be converted on such Conversion Date and (b) the product of (x) the quotient obtained by dividing .12 by 360 and (y) the number of days for which such principal amount was outstandinglaw. (C) This Debenture shall be convertible into shares of Common Stock at the option of the Holder, in whole or in part at any time and from time to time, after the Original Issue Date (subject to the limitations on conversion set forth in Section 4(a)(ii) hereof). The Holder shall effect conversions by delivering to the Company a completed notice substantially in the form attached hereto as Exhibit A (a "Conversion Notice"). The Conversion Notice shall set forth the remaining principal amount of this Debenture and all accrued and unpaid interest thereon subsequent to the conversion at issue. The date on which a Conversion Notice is delivered is the "Conversion Date." Unless the Holder is converting the entire principal amount outstanding under this Debenture, the Holder is not be required to physically surrender this Debenture to the Company in order to effect conversions. Subject to Section 4(b), each Conversion Notice, once given, shall be irrevocable. Conversions hereunder shall have the effect of lowering the outstanding principal amount of this Debenture plus all accrued and unpaid interest thereon in an amount equal to the applicable conversion, which shall be evidenced by notations made in the Conversion Notice. The Holder and the Company shall maintain records showing the principal amount converted and the date of such conversions. In the event of any dispute or discrepancy, the records of the Holder shall be controlling and determinative in the absence of manifest error.

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

Conversion. (i) Subject to the provisions of this paragraph 8, (A) This Debenture shall be convertible into a holder of shares of Common Series A Preferred Stock shall have the right, on or after the date which is 30 days after the First Call Date (or, in the event that a Change of Control has occurred, at the option any time), at such holder's option, to convert any or all outstanding shares (and fractional shares) of the HolderSeries A Preferred Stock held by such holder, in whole or in part part, into fully paid and non-assessable shares of Common Stock. (ii) The number of shares of Common Stock deliverable upon conversion of a share of Series A Preferred Stock (including the Additional Shares), subject to adjustment as hereinafter provided, shall be 1.0 (the CONVERSION RATIO). In the event that at the time of conversion of a share of Series A Preferred Stock there are accrued and unpaid dividends on such share with respect to which Additional Shares have not been issued (including, with respect to any time interim period since the last Dividend Payment Date, the product of the full dividend payable for the current Dividend Period ending on the next Dividend Payment Date, multiplied by a fraction, the numerator of which is the number of days that have elapsed since the last Dividend Payment Date and from time the denominator of which is 360), then, upon such conversion, the holder thereof shall be entitled to timereceive such number of shares of Common Stock (in addition to the shares of Common Stock otherwise issuable upon the conversion of any such shares of Series A Preferred Stock and Additional Shares converted therewith) as would have been issued in accordance with the preceding sentence if Additional Shares had been issued in respect of such accrued and unpaid dividends and had been converted simultaneously therewith. (i) In connection with any Conversion pursuant to this paragraph 8, the holder of the shares of Series A Preferred Stock to be converted shall surrender the certificates representing such shares at the office of the Corporation with a written notice (a CONVERSION NOTICE) of election to convert completed and signed, specifying the number of shares to be converted. Unless the shares issuable on conversion are to be issued in the same name as the name in which such shares of Series A Preferred Stock are registered, each share surrendered for conversion shall be accompanied by instruments of transfer, in form satisfactory to the Corporation, duly executed by the holder or the holder's duly authorized attorney, and an amount sufficient to pay any transfer or similar tax. (ii) As promptly as practicable after the Original Issue Date (subject surrender by a holder of certificates for shares of Series A Preferred Stock under paragraph 8(b)(i), the Corporation shall issue and shall deliver to such holder, or on the holder's written order to the limitations on conversion set forth in Section 4(a)(iiholder's transferee, (w) hereof). The a certificate or certificates for the whole number of shares of Common Stock issuable upon the conversion of such shares in accordance with the provisions of this paragraph 8, (x) any cash adjustment required pursuant to paragraph 8(f) and (y) in the event of a conversion hereunder in part, a certificate or certificates for the whole number of Series A Preferred Stock not being so converted. (iii) Each conversion shall be determined by adding deemed to have been effected (the sum EFFECTIVE TIME) immediately prior to the close of business on the date of delivery of the Conversion Notice. At the Effective Time, the Person in whose name or names any certificate or certificates for shares of Common Stock shall be issuable upon such conversion shall be deemed to have become the holder of record of the shares of Common Stock represented thereby at such time on such date and such conversion shall be into a number of whole shares of Common Stock in the aggregate equal to the product of the number of shares of Series A Preferred Stock surrendered and the Conversion Ratio in effect at such time on such date. All shares of Common Stock delivered upon conversion of the Series A Preferred Stock will upon delivery be duly and validly issued and fully paid and non-assessable, free of all liens and charges and not subject to any preemptive rights. At the Effective Time, the shares to be so converted shall no longer be deemed to be outstanding and all rights of a holder with respect to such shares surrendered for conversion shall immediately terminate except the right to receive the Common Stock and other amounts payable pursuant to this paragraph 8 and a certificate or certificates representing the shares of Series A Preferred Stock not converted. (i) Upon delivery to the quotient obtained Corporation of a Conversion Notice by dividing a holder of shares of Series A Preferred Stock, the right of the Corporation to redeem such shares of Series A Preferred Stock shall terminate, regardless of whether a notice of redemption has been mailed pursuant to paragraph 7. (xii) Except as provided above and in paragraph 8(g), the outstanding principal amount Corporation shall make no payment or adjustment for accrued and unpaid dividends on shares of this Debenture Series A Preferred Stock, whether or not in arrears, on conversion of such shares or for dividends in cash on the shares of Common Stock issued upon such conversion. (i) The Corporation covenants that it will at all times reserve and keep available, free from preemptive rights, such number of its authorized but unissued shares of Common Stock as shall be required for the purpose of effecting conversions of the Series A Preferred Stock. (ii) Prior to the delivery of any securities which the Corporation shall be obligated to deliver upon conversion of the Series A Preferred Stock, the Corporation shall comply with all applicable federal and state laws and regulations which require action to be taken by the Corporation. (e) The Corporation will pay any and all documentary stamp or similar issue or transfer taxes payable in respect of the issue or delivery of shares of Common Stock on conversion of the Series A Preferred Stock pursuant hereto; provided that the Corporation shall not be required to pay any tax which may be payable in respect of any transfer involved in the issue or delivery of shares of Common Stock in a name other than that of the holder of the Series A Preferred Stock to be converted and no such issue or delivery shall be made unless and until the Person requesting such issue or delivery has paid to the Corporation the amount of any such tax or has established, to the satisfaction of the Corporation, that such tax has been paid. (yf) In connection with the Conversion Price (as defined herein)conversion by a holder of any shares of Series A Preferred Stock, and (ii) no fractions of shares of Common Stock shall be required to be issued to such holder, but in lieu thereof the Corporation shall pay a cash adjustment in respect of such fractional interest in an amount equal to such fractional interest on the business day on which such shares of Series A Preferred Stock are deemed to have been converted. (Ii) In case the product Corporation shall at any time after the date of issue of the Series A Preferred Stock (A) declare a dividend or make a distribution on Common Stock payable in Common Stock, (B) subdivide or split the outstanding Common Stock, (C) combine or reclassify the outstanding Common Stock into a smaller number of shares, (D) issue any shares of its Capital Stock in a reclassification of Common Stock (including any such reclassification in connection with a consolidation or merger in which the Corporation is the continuing corporation) or, (E) consolidate with, or merge with or into, any other Person, or engage in any reorganization, recapitalization, sale of all or substantially all of the Corporation's assets to any entity or any other transaction which, in the case of any of the transactions referred in this subclause (E), is effected in such a manner that the holders of Common Stock are entitled to receive stock, securities or assets with respect to or in exchange for Common Stock (any such transaction described in this subclause (E), an ORGANIC CHANGE), the Conversion Ratio in effect at the time of the record date for such dividend or distribution or of the effective date of such subdivision, split, combination, consolidation, merger, reclassification or Organic Change shall be proportionately adjusted, or other provision shall be made, so that the conversion of the Series A Preferred Stock after such time shall entitle the holder to receive the aggregate number of shares of Common Stock, or other securities of the Corporation (or shares of any security or cash or other property into which such shares of Common Stock have been combined, consolidated, merged, reclassified or changed, or which were otherwise receivable with respect to or in exchange for shares of Common Stock, pursuant to paragraph 8(g)(i)(C), 8(g)(i)(D) or 8(g)(i)(E) above) which, if the Series A Preferred Stock had been converted immediately prior to such time, such holder would have owned upon such conversion and been entitled to receive by virtue of such dividend, distribution, subdivision, split, combination, consolidation, merger, reclassification or Organic Change, assuming such holder of Common Stock of the Corporation (x) is not a Person with which the outstanding principal amount Corporation consolidated or into which the Corporation merged or which merged into the Corporation or in connection with which such reclassification or Organic Change was made, as the case may be (CONSTITUENT PERSON), or an affiliate of this Debenture to be converted a Constituent Person and (y) failed to exercise any rights of election as to the product kind or amount of securities, cash and other property receivable upon such reclassification, change, consolidation, merger or Organic Change (1) the quotient obtained by dividing .12 by 360 and (2) the number of days for which such principal amount was outstanding, divided by (II) the Conversion Price on the Conversion Date, provided, that if the Company kind or amount of securities, cash and other property receivable upon such reclassification, change, consolidation, merger or Organic Change, is not the same for each share of Common Stock of the Corporation held immediately prior to such reclassification, change, consolidation, merger or Organic Change by other than a Constituent Person or an affiliate thereof and in respect of which such rights of election shall not have timely elected been exercised (NON-ELECTING share), then for the purpose of this paragraph 8(g) the kind and amount of securities, cash and other property receivable upon such reclassification, change, consolidation, merger or Organic Change by each non-electing share shall be deemed to pay be the interest due on kind and amount so receivable per share by a Conversion Date in cash plurality of the non-electing shares). Such adjustment shall be made successively whenever any event listed above shall occur. (ii) In case the Corporation shall issue or sell any Common Stock (other than Common Stock issued (A) pursuant to the terms hereofCorporation's existing or future stock option plans or pursuant to any other existing or future Common Stock-related director or employee compensation plan of the Corporation approved by the Board of Directors, subsection (iiB) shall not be used as consideration for the acquisition of a business or of assets, (C) in a firmly committed underwritten public offering, (D) to the Corporation's joint venture partners in exchange for interests in the calculation relevant joint venture, (E) upon conversion of shares of any series of Preferred Stock or (F) upon exercise or conversion of any security the issuance of which caused an adjustment under paragraph 8(g)(i), 8(g)(iii) or 8(g)(iv) hereof or the issuance of which did not require adjustment hereunder) without consideration or for a consideration per share less than the 30 Day Market Price on the date of such issuance, or shall issue securities convertible into Common Stock (other than such securities paid as dividends on any class of Preferred Stock) having a conversion price per share less than the 30 Day Market Price at the date of issuance of such convertible security, the Conversion Ratio to be in effect after such issuance or sale shall be determined by multiplying the Conversion Ratio in effect immediately prior to such issuance or sale by a fraction, (1) the numerator of which shall be the sum of the number of shares of Common Stock issuable upon a conversion hereunder. outstanding immediately prior to such issuance or sale and the number of additional shares of Common Stock to be issued or sold (Bor, in the case of convertible securities, issued on conversion), and (2) Notwithstanding anything to the contrary contained herein, if on any Conversion Date: denominator of which shall be the sum of (1x) the number of shares of Common Stock at the time authorized, unissued and unreserved for all purposes, outstanding immediately prior to such issuance or held as treasury stock, is insufficient to pay interest hereunder in shares of Common Stock; (2) the Underlying Shares issuable for such conversion (including any interest payable in shares) (x) are not registered for resale pursuant to an effective Underlying Shares Registration Statement and (y) may not be sold without volume restrictions pursuant to Rule 144(k) promulgated under the Securities Act (as defined in Section 6); (3) the Common Stock is not listed or quoted for trading on the OTC or on a Subsequent Market; (4) the Company has failed to timely satisfy its conversion obligations hereunder; or (5) the issuance of such shares of Common Stock would result in a violation of Sections 4(a)(ii), then, the Company may not pay interest in kind and must pay interest in cash by delivering, within three Trading Days of each applicable Conversion Date, an amount in cash equal to the product of (a) the outstanding principal amount of the Debentures to be converted on such Conversion Date and (b) the product of (x) the quotient obtained by dividing .12 by 360 sale and (y) the number of days shares of Common Stock which the aggregate consideration receivable by the Corporation for which the total number of additional shares of Common Stock so issued or sold (or issuable on conversion) would purchase at the 30 Day Market Price in effect on the date of such principal amount was outstandingissuance or sale. In case any portion of the consideration to be received by the Corporation shall be in a form other than cash, the fair market value of such noncash consideration shall be utilized in the foregoing computation. Such fair market value shall be determined in good faith by the Board of Directors. (Ciii) This Debenture In case the Corporation shall be fix a record date for the issuance of rights, options or warrants to the holders of its Common Stock or other securities entitling such holders to subscribe for or purchase shares of Common Stock (or securities convertible into shares of Common Stock) at a price per share of Common Stock at (or having a conversion price per share of Common Stock, if a security convertible into shares of Common Stock) less than the option 30 Day Market Price on such record date, the maximum number of shares of Common Stock issuable upon exercise of such rights, options or warrants (or conversion of such convertible securities) shall be deemed to have been issued and outstanding as of such record date and the HolderConversion Ratio shall be adjusted pursuant to paragraph 8(g)(ii) hereof, as though such maximum number of shares of Common Stock had been so issued for an aggregate consideration payable by the holders of such rights, options, warrants or convertible securities prior to their receipt of such shares of Common Stock. In case any portion of such consideration shall be in a form other than cash, the fair market value of such noncash consideration shall be determined as set forth in paragraph 8(g)(ii) hereof. Such adjustment shall be made successively whenever such record date is fixed. In the event that after fixing a record date such rights, options or warrants are not so issued, the Conversion Ratio shall be readjusted to the Conversion Ratio that would then be in effect if such record date had not been fixed. In the event that such rights, options or warrants expire in whole or in part at any time unexercised or in the event of a change in the number of shares of Common Stock to which the holders of such rights, options or warrants are entitled (other than pursuant to adjustment provisions therein comparable to those contained in this paragraph 8(g)), the Conversion Ratio shall again be adjusted as follows: (A) in the event that all of such rights, options or warrants expire unexercised, the Conversion Ratio shall be the Conversion Ratio that would then be in effect if such record date had not been fixed; (B) in the event that less than all of such rights, options or warrants expire unexercised, the Conversion Ratio shall be adjusted pursuant to paragraph 8(g)(ii) to reflect the maximum number of shares of Common Stock issuable upon exercise of such rights, options or warrants that remain outstanding (without taking into effect shares of Common Stock issuable upon exercise of rights, options or warrants that have lapsed or expired); and from time (C) in the event of a change in the number of shares of Common Stock to timewhich the holders of such rights, after options or warrants are entitled, the Original Issue Date (subject Conversion Ratio shall be adjusted to reflect the Conversion Ratio which would then be in effect if such holder had initially been entitled to such changed number of shares of Common Stock. Notwithstanding anything herein to the limitations on conversion set forth in Section 4(a)(ii) hereof). The Holder shall effect conversions by delivering contrary, no further adjustment to the Company a completed notice substantially in the form attached hereto as Exhibit A (a "Conversion Notice"). The Conversion Notice shall set forth the remaining principal amount of this Debenture and all accrued and unpaid interest thereon subsequent to the conversion at issue. The date on which a Conversion Notice is delivered is the "Conversion Date." Unless the Holder is converting the entire principal amount outstanding under this Debenture, the Holder is not be required to physically surrender this Debenture to the Company in order to effect conversions. Subject to Section 4(b), each Conversion Notice, once given, Ratio shall be irrevocable. Conversions hereunder shall have made upon the effect issuance or sale of lowering Common Stock upon the outstanding principal amount exercise of this Debenture plus all accrued and unpaid interest thereon in an amount equal any rights, options or warrants to the applicable conversionsubscribe for or purchase Common Stock, which shall be evidenced by notations made if any adjustment in the Conversion Notice. The Holder and Ratio was made or required to be made upon the Company shall maintain records showing record date for the principal amount converted and the date issuance or sale of such conversions. rights, options or warrants under this clause 8(g)(iii). (iv) In case the event Corporation shall fix a record date for the making of any dispute or discrepancy, the records of the Holder shall be controlling and determinative in the absence of manifest error.a distribution to holders

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

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

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

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

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

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

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

Conversion. (A) This Debenture shall be convertible into If any holder of full or fractional shares of Common Series C Stock surrenders to the Corporation (at the option principal office of the Holder, in whole Corporation) certificate or in certificates representing all or part at any time and from time to time, after of the Original Issue Date holder's shares of Series C Stock together with either (subject 1) a certificate stating that the holder has received the advice of counsel to the limitations on effect that it is permissible under the federal banking laws and regulations applicable to the Corporation that the shares of Series C Stock represented by such certificate or certificates convert as contemplated by this Section 6 or (2) a certificate stating that the holder is transferring the holders' shares in a Widely Dispersed Offering (as defined below) and subsequently transfers the shares in a Widely Dispersed Offering, then the shares of Series C Stock represented by such certificate or certificates will convert as follows: (a) If at the time of conversion set forth the Series B junior voting preferred stock, par value $0.01 per share, of the Corporation (the "Series B Stock") has not converted into the "Reference Package" of the Series B Stock in Section 4(a)(iiaccordance with the terms of the certificate of incorporation of the Corporation relating to the Series B Stock, each share of Series C Stock of such holder will convert into one share (and any fractional share of such holder will convert into the same fraction of a share) hereofof Series B Stock; and (b) Otherwise, each share of Series C Stock of such holder will convert into the Reference Package (and any fractional share of such holder will convert into the same fraction of the Reference Package). The number of shares of Common Stock issuable upon a conversion hereunder shall holder will be determined by adding the sum of (i) the quotient obtained by dividing (x) the outstanding principal amount of this Debenture entitled to be converted and (y) the Conversion Price (receive, as defined herein)applicable, and (ii) the amount equal to (I) the product of (x) the outstanding principal amount of this Debenture to be converted and (y) the product of (1) a certificate or certificates representing the quotient obtained by dividing .12 by 360 and Series B Stock into which such shares have been converted or (2) a certificate or certificates representing any capital stock comprising a part of the number of days for Reference Package and into which such principal amount was outstandingtheir shares have been converted (and, divided by (II) the Conversion Price on the Conversion Date, provided, that if the Company shall have timely elected to pay the interest due on a Conversion Date in cash pursuant to the terms hereof, subsection (ii) shall not be used in the calculation case of the number of shares of Common Stock issuable upon a conversion hereunder. (B) Notwithstanding anything to the contrary contained herein, if on any Conversion Date: (1) the number of shares of Common Stock at the time authorized, unissued and unreserved for all purposes, or held as treasury stock, is insufficient to pay interest hereunder in shares of Common Stock; (2) the Underlying Shares issuable for such conversion (including any interest payable in shares) (x) are not registered for resale pursuant to an effective Underlying Shares Registration Statement and (y) may not be sold without volume restrictions pursuant to Rule 144(k) promulgated under the Securities Act (as defined in Section 6); (3) the Common Stock is not listed or quoted for trading on the OTC or on a Subsequent Market; (4) the Company has failed to timely satisfy its conversion obligations hereunder; or (5) the issuance of such shares of Common Stock would result in a violation of Sections 4(a)(ii), any cash or other property then, the Company may not pay interest in kind and must pay interest in cash by delivering, within three Trading Days of each applicable Conversion Date, an amount in cash equal to the product of (a) the outstanding principal amount of the Debentures to be converted on such Conversion Date and (b) the product of (x) the quotient obtained by dividing .12 by 360 and (y) the number of days for which such principal amount was outstanding. (C) This Debenture shall be convertible into shares of Common Stock at the option of the Holder, in whole or in part at any time and from time to time, after the Original Issue Date (subject to the limitations on conversion set forth in Section 4(a)(ii) hereof). The Holder shall effect conversions by delivering to the Company a completed notice substantially in the form attached hereto as Exhibit A (a "Conversion Notice"). The Conversion Notice shall set forth the remaining principal amount of this Debenture and all accrued and unpaid interest thereon subsequent to the conversion at issue. The date on which a Conversion Notice is delivered is the "Conversion Date." Unless the Holder is converting the entire principal amount outstanding under this Debenture, the Holder is not be required to physically surrender this Debenture to the Company in order to effect conversions. Subject to Section 4(b), each Conversion Notice, once given, shall be irrevocable. Conversions hereunder shall have the effect of lowering the outstanding principal amount of this Debenture plus all accrued and unpaid interest thereon in an amount equal to the applicable conversion, which shall be evidenced by notations made in the Conversion Notice. The Holder and the Company shall maintain records showing the principal amount converted and the date of such conversions. In the event of any dispute or discrepancy, the records of the Holder shall be controlling and determinative in the absence of manifest error.

Conversion. (A) This Debenture shall be convertible into shares of Common Stock at the option of the Holder, in whole or in part at any time and from time to time, after the Original Issue Date (subject to the limitations on conversion set forth in Section 4(a)(ii) hereof). The number of shares of Common Stock issuable upon a conversion hereunder shall be determined by adding the sum of (i) If a Change of Control occurs or a Qualified Initial Public Offering occurs prior to repayment of this Note in full, then Investor has the quotient obtained by dividing (x) right, at Investor’s option, to convert the outstanding principal amount of this Debenture Note and all accrued and unpaid interest on this Note immediately prior to be converted the closing of such Change of Control or Qualified Initial Public Offering into fully paid and (y) nonassessable shares of the Company’s Common Stock at a price per share equal to the Conversion Price (as defined herein), and Price. (ii) If the amount equal Company shall have delivered a Prepayment Notice, then the Investor has the right, at Investor’s option, to (I) the product of (x) convert the outstanding principal amount of this Debenture Note to be converted prepaid and (y) all accrued and unpaid interest thereon immediately prior to the product scheduled prepayment date into fully paid and nonassessable shares of (1) the quotient obtained by dividing .12 by 360 and (2) Company’s Common Stock at a price per share equal to the number conversion price of days for which such principal amount was outstanding, divided by (II) the Conversion Price on the Conversion Date, provided, that if series of preferred stock of the Company shall have timely elected to pay (other than Series A Preferred Stock) first issued by the interest due on a Conversion Date in cash pursuant Company subsequent to the terms hereof, subsection Initial Closing (as defined in the Purchase Agreement) or (ii) if no such shares shall have been issued, the fair market value per share of the Company’s Common Stock, as determined by the Board of Directors of the Company (the “Board”) in good faith (such determination of the fair market value of the Common Stock shall be not be used in based on any valuation report prepared for purposes of valuing Common Stock as provided under Section 409A of the calculation Internal Revenue Code of 1986, as amended, and the regulations and guidance thereunder (“Section 409A”); furthermore, any such valuation shall be based on a methodology for determination of the fair market value of the Common Stock which assumes that the number of shares of Common Stock issuable upon a outstanding includes the conversion hereunder. of all outstanding securities convertible into or exchangeable for Common Stock on an as-converted (B) Notwithstanding anything including, but not limited to, the preferred stock and any convertible debt instruments of the Company)); provided, however, that if the Investor disputes the Board’s determination of fair market value of the Company’s Common Stock, the Investor shall be entitled to have the fair market value of the Company’s Common Stock determined by an independent appraiser selected by the Investor and reasonably acceptable to the contrary contained herein, if Company (such determination of the fair market value of the Common Stock shall be not be based on any Conversion Date: (1) valuation report prepared for purposes of valuing Common Stock as provided under Section 409A; furthermore, any such valuation shall be based on a methodology for determination of the fair market value of the Common Stock which assumes that the number of shares of Common Stock at outstanding includes the time authorized, unissued and unreserved conversion of all outstanding securities convertible into or exchangeable for all purposes, or held as treasury stock, is insufficient to pay interest hereunder in shares of Common Stock; (2) the Underlying Shares issuable for such conversion (including any interest payable in shares) (x) are not registered for resale pursuant to an effective Underlying Shares Registration Statement and (y) may not be sold without volume restrictions pursuant to Rule 144(k) promulgated under the Securities Act (as defined in Section 6); (3) the Common Stock is on an as-converted (including, but not listed or quoted for trading on the OTC or on a Subsequent Market; (4) the Company has failed to timely satisfy its conversion obligations hereunder; or (5) the issuance of such shares of Common Stock would result in a violation of Sections 4(a)(ii), thenlimited to, the Company may not pay interest in kind preferred stock and must pay interest in cash by delivering, within three Trading Days of each applicable Conversion Date, an amount in cash equal to the product of (a) the outstanding principal amount any convertible debt instruments of the Debentures to be converted on such Conversion Date and (b) the product Company)). All costs of (x) the quotient obtained by dividing .12 by 360 and (y) the number of days for which such principal amount was outstanding. (C) This Debenture shall be convertible into shares of Common Stock at the option of the Holder, in whole or in part at any time and from time to time, after the Original Issue Date (subject to the limitations on conversion set forth in appraisal under this Section 4(a)(ii) hereof). The Holder shall effect conversions be paid equally by delivering to the Company a completed notice substantially in the form attached hereto as Exhibit A (a "Conversion Notice"). The Conversion Notice shall set forth the remaining principal amount of this Debenture and all accrued and unpaid interest thereon subsequent to the conversion at issue. The date on which a Conversion Notice is delivered is the "Conversion Date." Unless the Holder is converting the entire principal amount outstanding under this Debenture, the Holder is not be required to physically surrender this Debenture to the Company in order to effect conversions. Subject to Section 4(b), each Conversion Notice, once given, shall be irrevocable. Conversions hereunder shall have the effect of lowering the outstanding principal amount of this Debenture plus all accrued and unpaid interest thereon in an amount equal to the applicable conversion, which shall be evidenced by notations made in the Conversion Notice. The Holder and the Company shall maintain records showing the principal amount converted and the date of such conversions. In the event of any dispute or discrepancy, the records of the Holder shall be controlling and determinative in the absence of manifest errorInvestor.

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

Conversion. (Aa) This Debenture Upon the conversion of a Note or any part thereof, the Company shall, at its own sole cost and expense, take all action, including obtaining and delivering an opinion of counsel, to assure that the Company's transfer agent shall issue the appropriate stock certificates, in the name of Subscriber (or its permitted assignee) or such other Persons as designated by Subscriber and in such denominations to be convertible into shares of Common Stock specified at the option time of the Holderconversion, in whole or in part at any time and from time to time, after the Original Issue Date (subject to the limitations on conversion set forth in Section 4(a)(ii) hereof). The number of shares of Common Stock issuable upon a conversion hereunder shall be determined by adding the sum of (i) the quotient obtained by dividing (x) the outstanding principal amount of this Debenture to be converted and (y) the Conversion Price (as defined herein), and (ii) the amount equal to (I) the product of (x) the outstanding principal amount of this Debenture to be converted and (y) the product of (1) the quotient obtained by dividing .12 by 360 and (2) the number of days for which such principal amount was outstanding, divided by (II) the Conversion Price on the Conversion Date, provided, that if the Company shall have timely elected to pay the interest due on a Conversion Date in cash pursuant to the terms hereof, subsection (ii) shall not be used in the calculation of representing the number of shares of Common Stock issuable upon a conversion hereunder. (B) Notwithstanding anything such conversion. The Company represents and warrants that no instructions other than these instructions have been or shall be given to the contrary contained herein, if on any Conversion Date: (1) transfer agent for the number of shares of Company's Common Stock at and that the time authorized, unissued and unreserved for all purposes, or held as treasury stock, is insufficient to pay interest hereunder in shares of Common Stock; (2) the Underlying Shares issuable for such conversion (including any interest payable in shares) (x) are not registered for resale pursuant to an effective Underlying Shares Registration Statement and (y) may not be sold without volume restrictions pursuant to Rule 144(k) promulgated under the Securities Act (as defined in Section 6); (3) the Common Stock is not listed or quoted for trading on the OTC or on a Subsequent Market; (4) the Company has failed to timely satisfy its conversion obligations hereunder; or (5) the issuance of certificates representing such shares of Common Stock would result in a violation of Sections 4(a)(ii), then, shall contain no legend other than the Company may not pay interest in kind and must pay interest in cash by delivering, within three Trading Days of each applicable Conversion Date, an amount in cash equal to the product of (a) the outstanding principal amount of the Debentures to be converted on such Conversion Date and (b) the product of (x) the quotient obtained by dividing .12 by 360 and (y) the number of days for which such principal amount was outstanding. (C) This Debenture shall be convertible into shares of Common Stock at the option of the Holder, in whole or in part at any time and from time to time, after the Original Issue Date (subject to the limitations on conversion legend set forth in Section 4(a)(ii4(h) hereof). The Holder If and when a Subscriber sells the Conversion Shares, assuming (i) a registration statement including such Conversion Shares for registration has been filed with the Commission and is effective, and the prospectus, as supplemented or amended, contained therein is current and (ii) the Company or its agent confirms in writing to the transfer agent that the Company has complied with the prospectus delivery requirements, the Company shall effect conversions reissue the Conversion Shares without restrictive legend and such Conversion Shares shall be free-trading and freely transferable. In the event that the Conversion Shares are sold in a manner that complies with an exemption from registration, the Company shall promptly instruct its counsel to issue to the transfer agent an opinion permitting removal of the legend, if such sale is eligible and intended to be made in conformity with Rule 144(i)(2) of the 1933 Act, or for 90 days if pursuant to the other provisions of Rule 144 of the 1933 Act, provided that Subscriber delivers all reasonably requested representations in support of such opinion. (b) Each Subscriber shall give notice of its decision to exercise its right to convert its Note, interest, or part thereof by faxing or otherwise delivering a completed Notice of Conversion (a form of which is annexed as Exhibit A to the Note) to the Company a completed notice substantially in the form attached hereto as Exhibit A (a "Conversion Notice"). The Conversion Notice shall set forth the remaining principal amount via confirmed facsimile transmission or otherwise pursuant to Section 13(a) of this Debenture and all accrued and unpaid interest thereon subsequent Agreement. Subscriber shall not be required to surrender the conversion at issueNote until the Note has been fully converted or satisfied. The Each date on which a Notice of Conversion Notice is delivered is the "Conversion Date." Unless the Holder is converting the entire principal amount outstanding under this Debenture, the Holder is not be required to physically surrender this Debenture faxed to the Company in order to effect conversions. Subject to Section 4(b)accordance with the provisions hereof by 5 PM Eastern Time (“ET”) (or if received by the Company after 5 PM ET, each Conversion Notice, once given, then the next business day) shall be irrevocable. Conversions hereunder deemed a “Conversion Date.” The Company shall have itself or cause the effect of lowering Company’s transfer agent to transmit the outstanding principal amount of this Debenture plus all accrued and unpaid interest thereon in an amount equal to the applicable conversion, which shall be evidenced by notations made in Company’s Common Stock certificates representing the Conversion Notice. The Holder and Shares issuable upon conversion of the Company shall maintain records showing Note to Subscriber via express courier for receipt by Subscriber within four (4) business days after the principal amount converted and Conversion Date (such fourth day being the date of such conversions”Delivery Date”). In the event the Conversion Shares are electronically transferable, then delivery of any dispute or discrepancythe Conversion Shares must be made by electronic transfer, provided request for such electronic transfer has been made by the Subscriber. A Note representing the balance of the Note not so converted shall be provided by the Company to Subscriber if requested by Subscriber, provided Subscriber delivers the original Note to the Company. (c) The Company understands that a delay in the delivery of the Conversion Shares in the form required pursuant to Section 7.1 hereof could result in economic loss to the Subscriber. As compensation to Subscriber for such loss, the records Company agrees to pay (as liquidated damages and not as a penalty) to Subscriber for late issuance of Conversion Shares in the form required pursuant to Section 7.1 hereof upon Conversion of the Holder Note, the amount of $25 per business day after the Delivery Date for each $10,000 of Note principal amount and interest (and proportionately for other amounts) being converted of the corresponding Conversion Shares which are not timely delivered provided that the Subscriber has provided all the information reasonably necessary (as reasonably determined by the Company’s transfer agent and the opinion issuing counsel) to receive timely delivery of such Conversion Shares. The Company shall pay any payments incurred under this Section upon demand. Furthermore, in addition to any other remedies which may be available to the Subscriber, in the event that the Company fails for any reason to effect delivery of the Conversion Shares within seven (7) business days after the Delivery Date, Subscriber shall be controlling entitled to revoke all or part of the relevant Notice of Conversion by delivery of a notice to such effect to the Company whereupon the Company and determinative Subscriber shall each be restored to their respective positions immediately prior to the delivery of such notice, except that the damages payable in connection with the absence Company’s default shall be payable through the date notice of manifest errorrevocation or rescission is given to the Company.

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

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

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

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

Conversion. (Ai) This Debenture Each share of Preferred Stock shall be convertible into shares of Common Stock at the Conversion Ratio (subject to reduction under Section 5(a)(ii) and (iii), at the option of the Holder, holder in whole or in part at any time and from time to time, after the expiration of 45 days after the Original Issue Date (as defined in Section 7 below) (the "Conversion Term"). Any conversion under this Section 5(a)(i) shall be of a minimum amount of at least 12,500 shares of Preferred Stock. The holder shall effect conversions by delivering to the Company a written notice (the "Holder Conversion Notice"), accompanied by the certificate representing the shares of the Preferred Stock to be converted. Each Holder Conversion Notice shall specify the number of shares of Preferred Stock to be converted and the date on which such conversion is to be effected (the "Holder Conversion Date"), which shall in no event be earlier than the date such Holder Conversion Notice is given in accordance with Section 5(k) below. Each Holder Conversion Notice, once given, shall be irrevocable (subject to the limitations on conversion set forth in Section 4(a)(ii5(c) hereofbelow). The If the holder is converting less than all shares of Preferred Stock, the Company shall promptly deliver to the holder a certificate for such number of shares of Preferred Stock as have not been converted. (ii) If on the Conversion Date (as defined below) applicable to any conversion under Section 5(a) or 5(b), the Conversion Price (as defined below) then in effect is such that the aggregate number of shares of Common Stock that would then be issuable upon a conversion hereunder of all then-outstanding shares of Preferred Stock, when combined with any shares of Common Stock previously issued upon conversion of any shares of Preferred Stock, would equal or exceed 1,070,000 shares (the "Issuable Maximum"), then the Company shall be determined obligated to effect the conversion of only such portion of each share of Preferred Stock subject to such conversion as is represented by adding the sum of (i) the quotient obtained by dividing (x) the outstanding principal amount of this Debenture to be converted and (y) the Conversion Price Percentage (as defined hereinin the next sentence), and the remaining portion of such share shall be subject to the mandatory redemption provisions of Section 6. The "Conversion Percentage" shall be a fraction, the numerator of which is the "Allowable Conversion Maximum" (iias defined in the next sentence) and the amount equal to (I) denominator of which is the product of (x) the outstanding principal amount of this Debenture to be converted and (y) the product of (1) the quotient obtained by dividing .12 by 360 and (2) the total number of days for which shares of Preferred Stock outstanding prior to such principal amount was outstanding, divided by (II) conversion. The Allowable Conversion Maximum at any time shall be the Conversion Price on difference between the Conversion Date, provided, that if Issuable Maximum and the Company shall have timely elected to pay the interest due on a Conversion Date in cash pursuant to the terms hereof, subsection (ii) shall not be used in the calculation of the total number of shares of Common Stock issuable previously issued upon a conversion hereunderof shares of Preferred Stock. In the event of any stock split, stock dividend, recapitalization, reorganization or other similar action or event, appropriate adjustment shall be made to the Issuable Maximum and the Allowable Conversion Maximum. (Biii) Notwithstanding anything to the contrary contained herein, if If on any Conversion Date: Date for any shares of Preferred Stock applicable to any conversion under Section 5(a) or 5(b), the Per Share Market Value of the Common Stock on the immediately preceding date exceeds $7.75, the number of shares issued upon conversion of such shares of Preferred Stock shall be reduced by a number of shares equal to 50% of (1A) the amount by which such Per Share Market Value exceeds $7.75, divided by (B) such Per Share Market Value, times (C) the number of shares of Common Stock at which would otherwise be issued upon such conversion, but for the time authorized, unissued and unreserved reduction provided for all purposes, or held as treasury stock, is insufficient to pay interest hereunder in shares of Common Stock;this Section 5(a)(iii). (2) the Underlying Shares issuable for such conversion (including any interest payable in shares) (x) are not registered for resale pursuant to an effective Underlying Shares Registration Statement and (y) may not be sold without volume restrictions pursuant to Rule 144(k) promulgated under the Securities Act (as defined in Section 6); (3) the Common Stock is not listed or quoted for trading on the OTC or on a Subsequent Market; (4) the Company has failed to timely satisfy its conversion obligations hereunder; or (5) the issuance of such shares of Common Stock would result in a violation of Sections 4(a)(ii), then, the Company may not pay interest in kind and must pay interest in cash by delivering, within three Trading Days of each applicable Conversion Date, an amount in cash equal to the product of (a) the outstanding principal amount of the Debentures to be converted on such Conversion Date and (b) Each share of the product of (x) the quotient obtained by dividing .12 by 360 and (y) the number of days for which such principal amount was outstanding. (C) This Debenture Preferred Stock shall be convertible into shares of Common Stock at the Conversion Ratio (subject to reduction under Section 5(a)(ii) and (iii) above), at the option of the Holder, Company in whole or in part at any time and from time to time, on or after the expiration of 120 days after the Original Issue Date (subject to the limitations on conversion set forth in Section 4(a)(ii) hereof)Date. The Holder Company shall effect conversions such conversion by delivering to the holders of such shares of Preferred Stock to be converted a written notice (the "Company a completed notice substantially in the form attached hereto as Exhibit A (a "Conversion Notice"). The Conversion Notice shall set forth the remaining principal amount of this Debenture and all accrued and unpaid interest thereon subsequent to the conversion at issue. The date on , which a Conversion Notice is delivered is the "Conversion Date." Unless the Holder is converting the entire principal amount outstanding under this Debenture, the Holder is not be required to physically surrender this Debenture to the Company in order to effect conversions. Subject to Section 4(b), each Conversion Notice, once given, shall be irrevocable. Conversions hereunder shall have ; provided, however, that during the effect period of lowering two years after the outstanding principal amount of this Debenture plus all accrued and unpaid interest thereon in an amount equal to the applicable conversionOriginal Issue Date, which shall be evidenced by notations made in the Conversion Notice. The Holder and the Company shall maintain records showing have no right to deliver a Company Conversion Notice and effect the principal amount conversion of shares of Preferred Stock under this Section 5(b) unless either (i) all of such shares may be converted into shares of Common Stock in accordance with Section 5(a)(ii); or (ii) all of such shares may be either converted into shares of Common Stock in accordance with Section 5(a)(ii) or may be redeemed and the entire redemption price paid in full in accordance with Section 6 without violating the CGCL (as defined below in Section 6). Each Company Conversion Notice shall specify the number of shares of Preferred Stock to be converted and the date on which such conversion is to be effected (the "Company Conversion Date"). The Company shall give such Company Conversion Notice in accordance with Section 5(k) below at least two Trading Days before the Company Conversion Date. Any such conversion shall be effected on a pro rata basis among the holders of Preferred Stock. Upon the conversion of shares of Preferred Stock pursuant to a Company Conversion Notice, the holders of the Preferred Stock shall surrender the certificates representing such shares at the office of the Company or of any transfer agent for the Preferred Stock or Common Stock. If the Company is converting less than all shares of the Preferred Stock, the Company shall, upon conversion of such conversionsshares subject to such Company Conversion Notice and receipt of the certificate or certificates representing such shares of Preferred Stock, deliver to the holder or holders a certificate for such number of shares of Preferred Stock as have not been converted. Each of a Holder Conversion Notice and a Company Conversion Notice is sometimes referred to herein as a "Conversion Notice," and each of a "Holder Conversion Date" and a "Company Conversion Date" is sometimes referred to herein as a "Conversion Date." (c) Three Trading Days after the Conversion Date, the Company will deliver to the holder (i) a certificate or certificates which shall be free of restrictive legends and trading restrictions (other than those then required by law), representing the number of shares of Common Stock being acquired upon the conversion of shares of Preferred Stock (subject to any reduction required pursuant to Section 5(a)(ii) or (iii)), and (ii) subject to Section 6 below, the certificate representing the number of shares of Preferred Stock not converted; provided, however that the Company shall not be obligated to issue certificates evidencing the shares of Common Stock issuable upon conversion of any shares of Preferred Stock (or with respect to shares subject to redemption pursuant to Sections 5(a)(ii) and 6, to pay the redemption price payable under Section 6), until certificates evidencing such shares of Preferred Stock are either delivered to the Company or any transfer agent for the Preferred Stock or Common Stock, or the holder notifies the Company that such certificates have been lost, stolen or destroyed and provides a bond (or other adequate security acceptable to the Company) satisfactory to the Company to indemnify the Company from any loss incurred by it in connection therewith. The Company shall, upon request of the holder, use its best efforts to deliver any certificate or certificates required to be delivered by the Company under this Section 5(c) electronically through the Depository Trust Corporation or another established clearing corporation performing similar functions. In the case of a conversion pursuant to a Holder Conversion Notice, if such certificate or certificates are not delivered by the date required under this Section 5(c), the holder shall be entitled by written notice to the Company at any time on or before such holder's receipt of such certificate or certificates thereafter, to rescind such conversion, in which event the Company shall immediately return the certificates representing the shares of Preferred Stock tendered for conversion. (i) The Conversion Price (the "Conversion Price") in effect on any Conversion Date shall be the lesser of the Closing Price on the Trading Day immediately preceding the Original Issue Date or 82.5% of the average of the Closing Price on the three Trading Days immediately preceding the Conversion Date. For purposes of this Section, the "Closing Price" on any Trading Day shall mean the last reported closing price of the Common Stock of the Company on such day on the principal securities exchange on which the Common Stock is listed or, if the Common Stock is not so listed, the last reported bid price of the Common Stock as reported on The Nasdaq National Market on such date or, if the Common Stock is neither so listed nor so reported, the last reported bid price of the Common Stock as quoted by a registered broker-dealer for which such quotes are available on such date. (ii) If the Company, at any time while any shares of Preferred Stock are outstanding, (a) shall pay a stock dividend or otherwise make a distribution or distributions on shares of its Junior Stock payable in shares of its capital stock (whether payable in shares of its Common Stock or of capital stock of any class), (b) subdivide outstanding shares of Common Stock into larger number of shares, (c) combine outstanding shares of Common Stock into a smaller number of shares, or (d) issue by reclassification of shares of Common Stock any shares of capital stock of the Company, the Conversion Price designated in Section 5(d)(i) shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock of the Company outstanding before such event and of which the denominator shall be the number of shares of Common Stock outstanding after such event. Any adjustment made pursuant to this Section 5(d)(ii) shall become effective immediately after the record date in the case of a dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or re-classification. (iii) In case the Company, at any time while any shares of the Preferred Stock are outstanding, shall issue rights or warrants to all holders of Common Stock entitling them to subscribe for or purchase shares of Common Stock at a price per share less than the Per Share Market Value of Common Stock at the record date mentioned below, the Conversion Price designated in Section 5(d)(i) shall be multiplied by a fraction, of which the denominator shall be the number of shares of Common Stock (excluding treasury shares, if any) outstanding on the date of issuance of such rights or warrants plus the number of additional shares of Common Stock offered for subscription or purchase, and of which the numerator shall be the number of shares of Common Stock (excluding treasury shares, if any) outstanding on the date of issuance of such rights or warrants plus the number of shares which the aggregate offering price of the total number of shares so offered would purchase at such Per Share Market Value. Such adjustment shall be made whenever such rights or warrants are issued, and shall become effective immediately after the record date for the determination of stockholders entitled to receive such rights or warrants. However, upon the expiration of any right or warrant to purchase Common Stock the issuance of which resulted in an adjustment in the Conversion Price designated in Section 5(d)(i) pursuant to this Section 5(d)(iii), if any such right or warrant shall expire and shall not have been exercised, the Conversion Price designated in Section 5(d)(i) shall immediately upon such expiration be recomputed and effective immediately upon such expiration be increased to the price which it would have been (but reflecting any other adjustments in the Conversion Price made pursuant to the provisions of this Section 5 after the issuance of such rights or warrants) had the adjustment of the Conversion Price made upon the issuance of such rights or warrants been made on the basis of offering for subscription or purchase only that number of shares of Common Stock actually purchased upon the exercise of such rights or warrants actually exercised. (iv) In case the Company, at any time while shares of Preferred Stock are outstanding, shall distribute to all holders of Common Stock (and not to holders of Preferred Stock) evidences of its indebtedness or assets or rights or warrants, to subscribe for or purchase any security (excluding those referred to in Section 5(d)(iii) above) then in each such case the Conversion Price at which each share of the Preferred Stock shall thereafter be convertible shall be determined by multiplying the Conversion Price in effect prior to the record date fixed for determination of stockholders entitled to receive such distribution by a fraction of which the denominator shall be the Per Share Market Value of Common Stock determined as of the record date mentioned above, and of which the numerator shall be such Per Share Market Value of the Common Stock on such record date less the then fair market value at such record date of the portion of such assets or evidence of indebtedness so distributed applicable to one outstanding share of Common Stock as determined by the Board of Directors of the Company in good faith; provided, however that in the event of a distribution exceeding ten percent (10%) of the net assets of the Company, then such fair market value shall be determined by a nationally recognized or major regional investment banking firm or firm of independent certified public accountants of recognized standing (which may be the firm that regularly examines the financial statements of the Company) (an "Appraiser") selected in good faith by the holders of a majority in interest of the shares of Preferred Stock; and provided, further that the Company, after receipt of the determination by such Appraiser shall have the right to select an additional Appraiser, in which case the fair market value shall be equal to the average of the determinations by each such Appraiser. In either case the adjustments shall be described in a statement provided to all holders of Preferred Stock of the portion of assets or evidences of indebtedness so distributed or such subscription rights applicable to one share of Common Stock. Such adjustment shall be made whenever any dispute such distribution is made and shall become effective immediately after the record date mentioned above. (v) All calculations under this Section 6 shall be made to the nearest cent or discrepancythe nearest 1/100th of a share, as the case may be. (vi) Whenever the Conversion Price is adjusted pursuant to Section 5(d)(ii),(iii), (iv) or (v), the records Company shall promptly mail to each holder of shares of Preferred Stock, a notice setting forth the Conversion Price after such adjustment and setting forth a brief statement of the Holder facts requiring such adjustment. (vii) In case of any reclassification of the Common Stock, any consolidation or merger of the Company with or into another person, sale or transfer of all or substantially all of the assets of the Company or any compulsory share exchange pursuant to which share exchange the Common Stock is converted into other securities, cash or property, then the holders of the shares of Preferred Stock then outstanding shall have the right thereafter to convert such shares only into the kind and amount of shares of stock and other securities and property receivable upon or deemed to be controlling and determinative held following such reclassification, consolidation, merger, sale, transfer or share exchange by a holder of a number of shares of the Common Stock of the Company into which such shares Preferred Stock could have been converted immediately prior to such reclassification, consolidation, merger, sale, transfer or share exchange. The terms of any such consolidation, merger, sale, transfer or share exchange shall include such terms so as to continue to give to the holder of shares of Preferred Stock the right to receive the securities or property set forth in this Section 5(d)(vii) upon any conversion following such consolidation, merger, sale, transfer or share exchange. This provision shall similarly apply to successive reclassifications, consolidations, mergers, sales, transfers or share exchanges. (viii) In case: (A) the absence of manifest error.Company shall declare a

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

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

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

Conversion. (Aa) This Debenture At the option of the Holder, this Note shall be convertible into shares of Common Stock at of the option Maker on the terms and conditions set forth in this Section 2. Notwithstanding the foregoing, if the conversion of this Note pursuant to this Section 2 would otherwise result in the Holder, in whole together with its Affiliates, owning more than 9.99% of the outstanding Common Stock calculated on an as-converted, fully-diluted basis (including as outstanding shares of capital stock issuable upon exercise or in part at any time and from time to timeconversion of all outstanding Options, after Purchase Rights or other Convertible Securities of the Original Issue Date Maker), immediately following the conversion of the Note (subject to the limitations on conversion set forth in Section 4(a)(ii“9.99% Threshold”), the Outstanding Amount shall be converted into (i) hereof). The that number of shares of Common Stock issuable upon a conversion hereunder shall be determined by adding that would result in the sum of Maker reaching, but not exceeding, the 9.99% Threshold (i) the quotient obtained by dividing (x) the outstanding principal amount of this Debenture to be converted and (y) the Conversion Price (as defined herein“9.99% Shares”), and (ii) the an amount in cash equal to the difference between (I) the product of (x) the outstanding principal amount of this Debenture to be converted and (yA) the product of (1) the quotient obtained number of 9.99% Shares issued upon conversion, multiplied by dividing .12 by 360 and (2) the number of days for which such principal amount was outstanding, divided by Conversion Price and (IIB) the Outstanding Amount. (b) Subject to Sections 2(a), 2(c) and 2(d) hereof, at any time between the Issuance Date and 11:59 p.m. New York City time on the Business Day immediately preceding the Maturity Date (the “Conversion Price Deadline”), the Holder shall be entitled to convert all, but not less than all, of the then Outstanding Amount into shares of Common Stock based on the Conversion DateRate described in Section 2(c) below. All shares of Common Stock issued upon conversion of this Note (i) shall be duly issued, provided, that if the Company shall have timely elected to pay the interest due on a Conversion Date in cash pursuant to the terms hereof, subsection fully paid and non-assessable and (ii) shall not be used in subject to any Liens, preemptive rights or other transfer restrictions. The Maker shall pay any and all transfer, stamp and similar taxes that may be payable with respect to the calculation of the number issuance and delivery of shares of Common Stock issuable upon a conversion hereunder. (B) Notwithstanding anything to of this Note; provided, that the contrary contained herein, if on any Conversion Date: (1) the number of shares of Common Stock at the time authorized, unissued and unreserved for all purposes, or held as treasury stock, is insufficient to pay interest hereunder in shares of Common Stock; (2) the Underlying Shares issuable for such conversion (including any interest payable in shares) (x) are not registered for resale pursuant to an effective Underlying Shares Registration Statement and (y) may Maker shall not be sold without volume restrictions pursuant to Rule 144(k) promulgated under responsible for the Securities Act (payment of any income taxes that may be incurred by the Holder as defined in Section 6); (3) the Common Stock is not listed or quoted for trading on the OTC or on a Subsequent Market; (4) the Company has failed to timely satisfy its conversion obligations hereunder; or (5) the issuance result of such shares of Common Stock would result in a violation of Sections 4(a)(ii), then, the Company may not pay interest in kind and must pay interest in cash by delivering, within three Trading Days of each applicable Conversion Date, an amount in cash equal to the product of (a) the outstanding principal amount of the Debentures to be converted on such Conversion Date and (b) the product of (x) the quotient obtained by dividing .12 by 360 and (y) the number of days for which such principal amount was outstandingconversion. (C) This Debenture shall be convertible into shares of Common Stock at the option of the Holder, in whole or in part at any time and from time to time, after the Original Issue Date (subject to the limitations on conversion set forth in Section 4(a)(ii) hereof). The Holder shall effect conversions by delivering to the Company a completed notice substantially in the form attached hereto as Exhibit A (a "Conversion Notice"). The Conversion Notice shall set forth the remaining principal amount of this Debenture and all accrued and unpaid interest thereon subsequent to the conversion at issue. The date on which a Conversion Notice is delivered is the "Conversion Date." Unless the Holder is converting the entire principal amount outstanding under this Debenture, the Holder is not be required to physically surrender this Debenture to the Company in order to effect conversions. Subject to Section 4(b), each Conversion Notice, once given, shall be irrevocable. Conversions hereunder shall have the effect of lowering the outstanding principal amount of this Debenture plus all accrued and unpaid interest thereon in an amount equal to the applicable conversion, which shall be evidenced by notations made in the Conversion Notice. The Holder and the Company shall maintain records showing the principal amount converted and the date of such conversions. In the event of any dispute or discrepancy, the records of the Holder shall be controlling and determinative in the absence of manifest error.

Conversion. After the closing of the Company’s first equity financing after the Warrant Issue Date with aggregate gross offering proceeds of no less than twenty million dollars (A$20,000,000) This Debenture shall be convertible into shares (excluding amounts received on conversion of Common Stock any promissory notes to the Company or exercise of any warrants and excluding cash investments by existing Company investors) (the “Next Qualified Financing”), and on or prior to the Warrant Expiration Date, the then outstanding Value of this Warrant shall, at the option of the HolderMajority Holders’ option, be exercisable in whole or in part at any time and from time to time, after the Original Issue Date (subject to the limitations on conversion set forth in Section 4(a)(ii) hereof). The for that number of shares of Common Stock issuable upon a conversion hereunder shall be determined by adding the sum type of equity securities sold in the Next Qualified Financing (ithe “Series D Preferred” and, together with the Series C Preferred, the “Preferred Stock” or the “Warrant Shares”) equal to the quotient obtained by dividing (xi) the then outstanding principal amount of this Debenture to be converted and (y) the Conversion Price (as defined herein), and Value by (ii) the amount equal to (I) the product of (x) the outstanding principal amount of this Debenture to be converted and (y) the product of (1) the quotient obtained by dividing .12 by 360 and (2) the number of days for price per security at which such principal amount was outstandingequity securities are sold in such Next Qualified Financing (together with the Series C Exercise Price, divided by (II) as applicable, the Conversion Price on “Exercise Price”). Notwithstanding the Conversion Date, provided, that if the Company shall have timely elected to pay the interest due on a Conversion Date in cash pursuant to the terms foregoing or any other term hereof, subsection (ii) shall not be used in the calculation of the number of shares of Common Stock issuable upon a conversion hereunder. (B) Notwithstanding anything to the contrary contained herein, if on any Conversion Date: (1) the number of shares of Common Stock at the time authorized, unissued and unreserved for all purposes, or held as treasury stock, is insufficient to pay interest hereunder in shares of Common Stock; (2) the Underlying Shares issuable for such conversion (including any interest payable in shares) (x) are not registered for resale pursuant to an effective Underlying Shares Registration Statement and (y) may not be sold without volume restrictions pursuant to Rule 144(k) promulgated under the Securities Act (as defined in Section 6); (3) the Common Stock is not listed or quoted for trading on the OTC or on a Subsequent Market; (4) the Company has failed to timely satisfy its conversion obligations hereunder; or within five (5) business days after the issuance Holder’s receipt of such shares written notice from the Company that the closing of Common Stock would result the Next Qualified Financing has occurred, the Holder shall notify the Company in a violation of Sections 4(a)(iiwriting whether this Warrant shall thereafter be exercisable solely into Series C Preferred or solely into Series D Preferred (on the respective terms contained herein), then. At its option, the Company may not pay interest in kind and must pay interest in cash elect to restate this Warrant to account for such election by delivering, within three Trading Days of each applicable Conversion Date, an amount in cash equal to the product of (a) the outstanding principal amount of the Debentures to be converted on such Conversion Date and (b) the product of (x) the quotient obtained by dividing .12 by 360 and (y) the number of days for which such principal amount was outstanding. (C) This Debenture shall be convertible into shares of Common Stock at the option of the Holder, in whole or in part at any time specifying the applicable number of Warrant Shares and from time to timeExercise Price, after the Original Issue Date (subject to the limitations on conversion set forth in Section 4(a)(ii) hereof)adjustment hereunder. The Holder shall effect conversions by delivering to the Company a completed notice substantially in the form attached hereto as Exhibit A (a "Conversion Notice"). The Conversion Notice shall set forth the remaining principal amount cooperate with any such restatement of this Debenture Warrant, including without limitation, surrendering this Warrant for cancellation and all accrued and unpaid interest thereon subsequent to the conversion at issue. The date on which a Conversion Notice is delivered is the "Conversion Daterestatement." Unless the Holder is converting the entire principal amount outstanding under this Debenture, the Holder is not be required to physically surrender this Debenture to the Company in order to effect conversions. Subject to Section 4(b), each Conversion Notice, once given, shall be irrevocable. Conversions hereunder shall have the effect of lowering the outstanding principal amount of this Debenture plus all accrued and unpaid interest thereon in an amount equal to the applicable conversion, which shall be evidenced by notations made in the Conversion Notice. The Holder and the Company shall maintain records showing the principal amount converted and the date of such conversions. In the event of any dispute or discrepancy, the records of the Holder shall be controlling and determinative in the absence of manifest error.

Conversion. (Aa) This Debenture Subject to and upon compliance with the provisions of this Section 4, and subject to the Corporation's right to redeem shares of Series C surrendered for conversion pursuant to Section 3(h) hereof, on or after January 10, 1999, the holder of any shares of this Series C shall be convertible have the right, at its option, to convert the shares into a number of fully paid and nonassessable shares of Common Stock at (calculated as to each conversion to the option nearest 1/100th of a share) equal to $_____ for each share surrendered for conversion divided by the Conversion Price (as defined in paragraph (d) of this Section 4 below) by surrendering the shares to be converted, in the manner provided in paragraph (b) of this Section 4 below; provided however, that if the Corporation shall have called some or all of the Holdershares of this Series C for redemption, such right shall terminate on the close of business on the third business day next preceding the date fixed for redemption unless the Corporation has defaulted in whole making or in part at any time providing for the payment due on the date fixed for redemption. Anything herein to the contrary notwithstanding, the shares of this Series C shall become immediately convertible under the circumstances, and from time to time, after the Original Issue Date (subject to the limitations on conversion terms and conditions, set forth in paragraph (i) of this Section 4(a)(ii4. (1) hereofIn order to exercise the conversion privilege, the holder of each share of this Series C to be converted shall surrender the certificate representing such share to the Conversion Agent for this Series C appointed for such purpose by the Corporation (the "Conversion Agent"), or, if no Conversion Agent has been appointed or if the holder has not received notice of such appointment, then to the Corporation, with the Notice of Election to Convert on the back of said certificate duly completed and signed, together with funds equal to the Dividend Amount, if any, required to be paid under paragraph (b)(2) of this Section 4 below, at the principal office of the Conversion Agent or the Corporation, as the case may be. Unless the shares issuable on conversion are to be issued in the same name as the name in which the shares of this Series C are registered, each share surrendered for conversion shall be accompanied by instruments of transfer, in form satisfactory to the Corporation, duly executed by the holder or its duly authorized attorney and by funds in an amount sufficient to pay any transfer or similar tax. (2) The holders of shares of this Series C at the close of business on a Dividend Record Date shall be entitled to receive the dividend payable on those shares on the corresponding Dividend Payment Date notwithstanding the conversion of the shares after the Dividend Record Date or the Corporation's default in payment of the dividend due on the Dividend Payment Date. However, shares of this Series C surrendered for conversion during the period between the close of business on any Dividend Record Date and the opening of business on the corresponding Dividend Payment Date (except shares called for redemption on a date fixed for redemption during that period) must be accompanied by payment of an amount equal to the dividend payable on the shares on the Dividend Payment Date (the "Dividend Amount"). The dividend with respect to a share of this Series C called for redemption during the period from the close of business on the Record Date to the opening of business on the corresponding Dividend Payment Date will be payable upon such Dividend Payment Date, and the holder converting such share of this Series C need not include a payment of such dividend amount upon surrender of such share of this Series C. The holders of shares of this Series C on a Dividend Record Date who (or whose transferees) convert any of those shares on or after the corresponding Dividend Payment Date will receive the dividend payable by the Corporation on those shares of this Series C on the Dividend Payment Date, and need not include payment of the Dividend Amount upon surrender of those shares for conversion. Except as provided above, the Corporation shall make no payment or adjustment for accrued and unpaid dividends on shares of this Series C, whether or not in arrears, on conversion of those shares, or for dividends on the shares of Common Stock issued upon the conversion. (3) As promptly as practicable after the surrender by a holder of the certificates for shares of this Series C in accordance with this paragraph (b), and subject to the Corporation's right to redeem all or a part of such Series C shares as provided in Section 3(h) hereof, the Corporation shall issue and shall deliver at the office of the Conversion Agent to the holder, or on its written order, a certificate or certificates for the number of full shares of Common Stock issuable upon the conversion of those shares in accordance with the provisions of this paragraph (b)(3), and any fractional interest in respect of a share of Common Stock arising upon the conversion hereunder shall be determined by adding the sum of settled as provided in paragraph (ic) the quotient obtained by dividing (x) the outstanding principal amount of this Debenture Section 4 below. (4) Unless the Corporation shall have exercised its right to redeem the shares of Series C surrendered for conversion pursuant to this Section 4, each conversion shall be deemed to have been effected as of the close of business on the 10th business day after the date on which all of the conditions specified in paragraph (b)(1) of this Section 4 above shall have been satisfied, and, the person or persons in whose name or names any certificate or certificates for shares of Common Stock shall be issuable upon such conversion shall be deemed to have become the holder or holders of record of the shares of Common Stock represented by those certificates at such time on such date and such conversion shall be at the Conversion Price in effect at such time on such date, unless the stock transfer books of the Corporation shall be closed on that date, in which event such person or persons shall be deemed to have become such holder or holders of record at the close of business on the next succeeding day on which such stock transfer books are open, but such conversion shall be at the Conversion Price in effect on the 10th business day after the date upon which all of the conditions specified in paragraph (b)(1) of this Section 4 above shall have been satisfied. All shares of Common Stock delivered upon conversion of this Series C will upon delivery be duly and validly issued and fully paid and nonassessable, free of all liens and charges and not subject to any preemptive rights. Upon the surrender of certificates representing shares of this Series C to be converted and the failure of the Corporation to provide to the holder thereof a notice of redemption pursuant to paragraph (yh) of Section 3 hereof prior to the Conversion Price 10th business day after the date on which all of the conditions specified in paragraph (b)(1) of this Section 4 shall have been satisfied, the shares shall no longer be deemed to be outstanding and all rights of a holder with respect to the shares surrendered for conversion shall immediately terminate except the right to receive the Common Stock or other securities, cash or other assets as herein provided (including without limitation any dividend payable as specified in paragraph (b)(1) of this Section 4 above). (c) No fractional shares or securities representing fractional shares of Common Stock shall be issued upon conversion of this Series C. Any fractional interest in a share of Common Stock resulting from conversion of a share of this Series C shall be paid in cash (computed to the nearest cent) based on the price (as defined herein), and in paragraph (iid)(4) the amount equal to (I) the product of (x) the outstanding principal amount of this Debenture to Section 4 below) of the Common Stock on the Trading Day (as defined in paragraph (d)(4) below) next preceding the day of conversion. If more than one share shall be converted and (y) surrendered for conversion at one time by the product of (1) the quotient obtained by dividing .12 by 360 and (2) same holder, the number of days for which such principal amount was outstanding, divided by (II) the Conversion Price on the Conversion Date, provided, that if the Company shall have timely elected to pay the interest due on a Conversion Date in cash pursuant to the terms hereof, subsection (ii) shall not be used in the calculation of the number of whole shares of Common Stock issuable upon a the conversion hereunder. (B) Notwithstanding anything to shall be computed on the contrary contained herein, if on any Conversion Date: (1) basis of the number of shares of Common Stock at the time authorized, unissued and unreserved for all purposes, or held as treasury stock, is insufficient to pay interest hereunder in shares of Common Stock; (2) the Underlying Shares issuable for such conversion (including any interest payable in shares) (x) are not registered for resale pursuant to an effective Underlying Shares Registration Statement and (y) may not be sold without volume restrictions pursuant to Rule 144(k) promulgated under the Securities Act aggregate Liquidation Preference (as such term is defined in Section 6); (3) the Common Stock is not listed or quoted for trading on the OTC or on a Subsequent Market; (4) the Company has failed to timely satisfy its conversion obligations hereunder; or (5) the issuance of such shares of Common Stock would result in a violation of Sections 4(a)(ii), then, the Company may not pay interest in kind and must pay interest in cash by delivering, within three Trading Days of each applicable Conversion Date, an amount in cash equal to the product of paragraph (a) the outstanding principal amount of Section 7 below) of the Debentures to be converted on such Conversion Date and (b) the product of (x) the quotient obtained by dividing .12 by 360 and (y) the number of days for which such principal amount was outstanding. (C) This Debenture shall be convertible into shares of Common Stock at the option of the Holder, in whole or in part at any time and from time to time, after the Original Issue Date (subject to the limitations on conversion set forth in Section 4(a)(ii) hereof). The Holder shall effect conversions by delivering to the Company a completed notice substantially in the form attached hereto as Exhibit A (a "Conversion Notice"). The Conversion Notice shall set forth the remaining principal amount of this Debenture and all accrued and unpaid interest thereon subsequent to the conversion at issue. The date on which a Conversion Notice is delivered is the "Conversion DateSeries C so surrendered." Unless the Holder is converting the entire principal amount outstanding under this Debenture, the Holder is not be required to physically surrender this Debenture to the Company in order to effect conversions. Subject to Section 4(b), each Conversion Notice, once given, shall be irrevocable. Conversions hereunder shall have the effect of lowering the outstanding principal amount of this Debenture plus all accrued and unpaid interest thereon in an amount equal to the applicable conversion, which shall be evidenced by notations made in the Conversion Notice. The Holder and the Company shall maintain records showing the principal amount converted and the date of such conversions. In the event of any dispute or discrepancy, the records of the Holder shall be controlling and determinative in the absence of manifest error.

Conversion. At the Effective Time, by virtue of the Merger and without any action on the part of any party: (Aa) This Debenture Each limited liability company interest of Merger Subsidiary issued and outstanding immediately prior to the Effective Time shall be convertible converted into shares one limited liability company interest of Common Stock at the option of the HolderParascript, in whole or in part at any time and from time to timeso that, after the Original Issue Date Effective Time, Mitek shall be the holder of all of the issued and outstanding limited liability company interests of Parascript. (subject b) At the Effective Time, all of the Units collectively, by virtue of the Merger and without any action on the part of the holders thereof, shall be converted into the right to receive (collectively, the “Merger Consideration”): (i) Eighty Million Dollars ($80,000,000) in cash; plus (ii) Fifty-one Million, Eight Hundred Sixty-nine Thousand, Four Hundred Fifty-eight (51,869,458) shares of Mitek Common Stock. (c) The Merger Consideration shall be payable by Mitek, in amounts represented by Parascript to be correct, as follows: (i) the Parascript Payments to the limitations on conversion set forth in Section 4(a)(iiPersons entitled to receive the Parascript Payments, to the extent not paid by Parascript prior to the Closing; provided, however, that Merger Subsidiary and/or the Surviving Company may withhold and pay to any appropriate Governmental Body any amounts from such Parascript Payments required to be so withheld and paid for applicable Taxes or applicable law; (ii) hereof). The delivery of a number of shares of Common Stock issuable upon a conversion hereunder to the escrow agent pursuant to the Escrow Agreement, which number shall be determined by adding the sum of dividing (i) the quotient obtained Four Million Dollars ($4,000,000) by dividing (x) the outstanding principal amount of this Debenture to be converted and (y) the Conversion Price (as defined herein), and (ii) the average for the ten (10) Business Days prior to the Closing of the daily final closing price as reported on the OTC Bulletin Board or the daily final closing price on any other exchange upon which the Escrow Shares are listed. The Escrow Shares shall be titled in the name of the escrow agent under the Escrow Agreement and shall be subject to the terms and conditions of the Escrow Agreement, but shall be treated as owned by the Member Representative for purposes of voting and by the Members for purposes of the receipt of dividends, and as owned by Mitek for tax purposes, all subject to the terms of the Escrow Agreement; (iii) an amount of cash determined by Parascript, but which amount shall not be less than $2,000,000, to be paid, on behalf of the holders of Units as a contribution to capital, to AIS Holdings (the “AIS Cash Contribution”); and (iv) the balance of the Merger Consideration shall be delivered by Mitek, in amounts represented by Parascript to be correct, to the Members as follows: (A) first, to the Members holding Preferred Units and Persons holding Options, an aggregate amount of cash equal to Forty-Four Million Four Hundred Fifteen Thousand Dollars (I$44,415,000) the product of (x) the outstanding principal amount of this Debenture to be converted and (y) the product of (1) the quotient obtained by dividing .12 by 360 and (2) on an equal per-Preferred Unit basis, which shall include as Preferred Units the number of days for Preferred Units subject to the Options; and (B) second, to the Members holding Preferred Units, Persons holding Options and Members holding Common Units, the remainder of the Merger Consideration on an equal per-Unit basis, which will include as Units the number of Preferred Units subject to an Option; provided, that, the amount of Merger Consideration payable under either Section 2.6(c)(iv)(A) or under this Section 2.6(c)(iv)(B), without duplication, in cash to any Member or Option holder shall be: a. reduced by the amount of any Member Advance paid to such principal amount was outstanding, divided by (II) the Conversion Price on the Conversion DateMember, provided, that if any reduction in the Company shall have timely elected to pay the interest due on a Conversion Date in cash Merger Consideration for payment of Member Advances pursuant to this subparagraph will constitute full satisfaction of the terms hereof, subsection obligation of such Member to repay any Member Advances; and b. increased by such Member’s and Option holder’s pro rata portion (ii) shall not be used in the calculation of based upon the number of shares Preferred Units, Preferred Units subject to an Option and Common Units owned by such Member) of Common Stock issuable upon a conversion hereunderthe aggregate amount of the Member Advances. (Bv) Notwithstanding anything to the contrary contained herein, if on any Conversion Date: (1) the number The provisions of shares of Common Stock at the time authorized, unissued and unreserved for all purposes, or held as treasury stock, is insufficient to pay interest hereunder in shares of Common Stock; (2) the Underlying Shares issuable for such conversion (including any interest payable in shares) (xthis Section 2.6(c) are not registered for resale pursuant to an effective Underlying Shares Registration Statement and (y) may not be sold without volume restrictions pursuant to Rule 144(k) promulgated under the Securities Act (as defined illustrated in Section 6Exhibit 2.6(c)(v); (3) the Common Stock is not listed or quoted for trading on the OTC or on a Subsequent Market; (4) the Company has failed to timely satisfy its conversion obligations hereunder; or (5) the issuance of such shares of Common Stock would result in a violation of Sections 4(a)(ii), then, the Company may not pay interest in kind and must pay interest in cash by delivering, within three Trading Days of each applicable Conversion Date, an amount in cash equal to the product of (a) the outstanding principal amount of the Debentures to be converted on such Conversion Date and (b) the product of (x) the quotient obtained by dividing .12 by 360 and (y) the number of days for which such principal amount was outstanding. (Cd) This Debenture shall be convertible into shares At and as of Common Stock the Effective Time, the holders of Units at the option Effective Time shall cease to have any rights as members of Parascript, except the Holderright to receive Merger Consideration in accordance with Article II hereof and such rights, in whole or in part at any time and from time if any, as they may have pursuant to timeWyoming law. Except as provided above, until an executed letter of transmittal is submitted by a holder of Units, each such Unit shall, after the Original Issue Date (subject Effective Time, represent for all purposes only the right to receive the limitations on conversion set forth in Section 4(a)(ii) hereof). The Holder shall effect conversions by delivering to the Company a completed notice substantially in the form attached hereto Merger Consideration as Exhibit A (a "Conversion Notice"). The Conversion Notice shall set forth the remaining principal amount of this Debenture and all accrued and unpaid interest thereon subsequent to the conversion at issue. The date on which a Conversion Notice is delivered is the "Conversion Datereduced above." Unless the Holder is converting the entire principal amount outstanding under this Debenture, the Holder is not be required to physically surrender this Debenture to the Company in order to effect conversions. Subject to Section 4(b), each Conversion Notice, once given, shall be irrevocable. Conversions hereunder shall have the effect of lowering the outstanding principal amount of this Debenture plus all accrued and unpaid interest thereon in an amount equal to the applicable conversion, which shall be evidenced by notations made in the Conversion Notice. The Holder and the Company shall maintain records showing the principal amount converted and the date of such conversions. In the event of any dispute or discrepancy, the records of the Holder shall be controlling and determinative in the absence of manifest error.

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

Conversion. (A1) This Debenture shall The holder of this Security may convert all or any part of the principal amount of this Security (or any portion thereof equal to $10,000 or any integral multiple of $10,000 in excess thereof), plus all or any accrued and unpaid interest on such principal amount to be convertible converted (although Holder may elect to have accrued but unpaid interest paid in cash), into shares of Common Stock at the option of the Holder, in whole or in part at any time and from time to time, on or after the Original Issue Date (subject to Date, at the limitations on conversion set forth Conversion Price then in Section 4(a)(ii) hereof)effect. The number of shares of Common Stock issuable upon a conversion hereunder of this Security shall be determined by adding dividing the sum principal amount of this Security or portion hereof, plus any accrued and unpaid interest (although Holder may elect to have accrued but unpaid interest paid in cash) on such principal amount to be converted, surrendered for conversion by the Conversion Price in effect on the Conversion Date. The initial conversion price shall be the Conversion Price and shall be subject to adjustment as provided in this Section 3. To convert this Security, the Holder hereof shall send by email or facsimile (or otherwise deliver) a copy of the fully executed conversion notice in the form attached as Exhibit A hereto (the “Conversion Notice”) to the Company. Notwithstanding anything to the contrary set forth herein, upon conversion of any portion of this Security in accordance with the terms hereof, the Holder shall not be required to physically surrender this Security to the Company unless (i) the quotient obtained by dividing (x) the outstanding full principal amount of represented by this Debenture to be Security is being converted and (y) the Conversion Price (as defined herein), and or (ii) the amount equal to Holder has provided the Company with prior written notice (Iwhich notice may be included in a Conversion Notice) the product of (x) the outstanding principal amount requesting reissuance of this Debenture Security upon physical surrender of this Security, provided that the Holder shall instead deliver the documentation to be converted and (ythe Company required by Section 12(f)(3) hereof if it notifies the product Company that this Security has been lost, stolen or destroyed. Upon receipt by the Company of (1) an email or facsimile copy of a Conversion Notice from the quotient obtained by dividing .12 by 360 and (2) the number of days for which such principal amount was outstandingHolder, divided by (II) the Conversion Price on the Conversion Date, provided, that if the Company shall have timely elected promptly send, via email or facsimile, a confirmation to pay the interest due on Holder stating that the Conversion Notice has been received, the date upon which the Company expects to deliver the Common Stock issuable upon such conversion and the name and telephone number of a contact person at the Company regarding the conversion. On or before the second (2nd) Trading Day following the date of receipt of a Conversion Date Notice, the Company shall (a) provided that the Company’s transfer agent is participating in cash pursuant the DTC (“DTC”) Fast Automated Securities Transfer Program, credit such aggregate number of shares of Common Stock to which the Holder shall be entitled to the terms hereof, subsection Holder’s or its designee’s balance account with DTC through its Deposit/Withdrawal At Custodian system or (iib) shall if the Company’s transfer agent is not be used participating in the calculation DTC Fast Automated Securities Transfer Program, instruct the Company’s transfer agent to issue and deliver as promptly as practicable (but in no event later than five (5) Trading Days after such date) to the address as specified in the Conversion Notice, a certificate, registered in the name of the Holder or its designee, in each case, for that number of shares of Common Stock issuable upon conversion of the portion of this Security being converted and (c) if so requested by the Holder, issue a conversion hereunder. new Security in the form hereof representing the balance of the principal amount hereof not being converted, if any (Bthe applicable date under clauses (a) Notwithstanding anything and (b) above, the “Share Delivery Date”). If so requested in writing by the Holder, the Company shall deliver to the contrary contained hereinHolder physical certificates representing the Common Stock issuable upon conversion which shall, if required by the Purchase Agreement, bear the restrictive legend set forth in Section 5(e) of the Purchase Agreement. If the Company shall (x) fail on any Conversion Date: (1) or prior to the Share Delivery Date to provide instruction to the Company’s transfer agent to issue and deliver a certificate to the Holder or credit the Holder’s balance account with DTC for the number of shares of Common Stock to which the Holder is entitled upon the Holder’s conversion of any principal amount and accrued interest thereon or on any date of the Company’s obligation to instruct the Company’s transfer agent to deliver shares of Common Stock as contemplated pursuant to clause (ii) below or (y) otherwise fail to convert this Note in accordance with its terms (any such event under clauses (x) and (y), a “Conversion Failure”), and if on or after such Trading Day the Holder purchases (in an open market transaction or otherwise) Common Stock to deliver in satisfaction of a sale by the Holder of Common Stock issuable upon such conversion that the Holder anticipated receiving from the Company (a “Buy-In”), then the Company shall, within three (3) Trading Days after the Holder’s request and in the Holder’s discretion, either (i) pay cash to the Holder in an amount equal to the Holder’s total purchase price (including brokerage commissions and other out-of-pocket expenses, if any) for the shares of Common Stock so purchased (the “Buy-In Price”), at which point the time authorized, unissued Company’s obligation to issue and unreserved deliver such certificate or credit the Holder’s balance account with DTC for all purposesthe shares of Common Stock to which the Holder is entitled upon the Holder’s conversion of the applicable principal amount and accrued interest thereon shall terminate, or held as treasury stock, is insufficient (ii) promptly honor its obligation to deliver by instructing the Company’s transfer agent to deliver to the Holder a certificate or certificates representing such Common Stock and pay interest hereunder cash to the Holder in an amount equal to the excess (if any) of the Buy-In Price over the product of (1) such number of shares of Common Stock;, times (2) the closing bid price of the Common Stock on the Conversion Date. (2) Except as provided herein, the Underlying Shares issuable for such conversion (including Holder is not entitled to any interest payable in shares) (x) are not registered for resale rights of a holder of Common Stock until the Holder has delivered a Conversion Notice, and only to the extent this Security is deemed to have been converted into Common Stock pursuant to an effective Underlying Shares Registration Statement and (y) may not be sold without volume restrictions pursuant to Rule 144(k) promulgated under the Securities Act (as defined in this Section 6);3. (3) The Person or Persons entitled to receive the shares of Common Stock is not listed issuable upon a conversion of this Security shall be treated for all purposes as the record holder or quoted for trading on the OTC or on a Subsequent Market; (4) the Company has failed to timely satisfy its conversion obligations hereunder; or (5) the issuance holders of such shares of Common Stock would result in a violation of Sections 4(a)(ii), then, on the Company may not pay interest in kind and must pay interest in cash by delivering, within three Trading Days of each applicable Conversion Date, an amount in cash equal to the product of (a) the outstanding principal amount irrespective of the Debentures to be converted on date such Conversion Date and (b) the product of (x) the quotient obtained by dividing .12 by 360 and (y) the number of days for which such principal amount was outstanding. (C) This Debenture shall be convertible into shares of Common Stock at the option issuable upon such conversion of the Holder, in whole or in part at any time and from time to time, after the Original Issue Date (subject Security are credited to the limitations on Holder’s account with DTC or the date of delivery of the certificates evidencing such shares of Common Stock, as the case may be. (4) If this Security is physically surrendered for conversion set forth in Section 4(a)(ii) hereof). The Holder shall effect conversions by delivering to the Company a completed notice substantially in the form attached hereto as Exhibit A (a "Conversion Notice"). The Conversion Notice shall set forth the remaining principal amount of this Debenture and all accrued and unpaid interest thereon subsequent to the conversion at issue. The date on which a Conversion Notice is delivered is the "Conversion Date." Unless the Holder is converting the entire principal amount outstanding under this Debenture, the Holder is not be required to physically surrender this Debenture to the Company in order to effect conversions. Subject to Section 4(b), each Conversion Notice, once given, shall be irrevocable. Conversions hereunder shall have the effect of lowering the outstanding principal amount of this Debenture plus all accrued and unpaid interest thereon in an amount equal to Security is greater than the applicable conversionportion of this Security being converted, which shall be evidenced by notations made in the Conversion Notice. The Holder and then the Company shall maintain records showing as soon as practicable after receipt of this Security and at its own expense, issue and deliver to the Holder a new Security representing the outstanding principal amount converted and the date other amounts not converted. (5) The Company will not issue fractional shares of such conversionsCommon Stock upon conversion of this Security. In the event of any dispute or discrepancylieu thereof, the records Company shall round such fraction of a share of Common Stock to the nearest whole share. (6) The Company shall, if the Holder shall be controlling and determinative so elects, deliver the Common Stock issuable upon conversion of this Security to any third party designated in writing by the absence of manifest errorHolder.

Conversion. The Members will take all actions reasonably requested by the Board in connection with an Initial Public Offering to effect a reorganization (an “IPO Reorganization”) of the Company into a corporation or other Entity (such corporation or other Entity being referred to as the “Successor Entity”) and causing all of the Interests to be transferred, exchanged or converted (free and clear of all liens, encumbrances, restrictions and adverse claims (other than those created by this Agreement)), as determined by the Board, into securities of the same class as the Publicly Offered Securities; provided, however, that (A) This Debenture shall in the event of any such IPO Reorganization, each Member’s Interests will be convertible into shares of Common Stock at the option of the Holdertransferred for, in whole or in part at any time and from time to timeexchanged or converted into, after the Original Issue Date (subject to the limitations on conversion set forth in Section 4(a)(ii) hereof). The that number of shares of Common Stock issuable upon common stock having a conversion hereunder shall be determined by adding value (based on the sum of (iprice to the public in the Initial Public Offering) the quotient obtained by dividing (x) the outstanding principal amount of this Debenture equal to be converted and (y) the Conversion Price (as defined herein), and (ii) the amount equal that such Member would be deemed to (I) the product of (x) the outstanding principal amount of this Debenture to be converted and (y) the product of (1) the quotient obtained by dividing .12 by 360 and (2) the number of days for which such principal amount was outstanding, divided by (II) the Conversion Price on the Conversion Date, provided, that have received if the Company shall have timely elected to pay (or a successor thereto) had been liquidated following the interest due on a Conversion Date in cash pursuant to the terms hereof, subsection sale of 100% of its assets (iiand assumption of 100% of its liabilities) shall not be used in the calculation of the number of shares of Common Stock issuable upon a conversion hereunder. (B) Notwithstanding anything to the contrary contained herein, if on any Conversion Date: (1) the number of shares of Common Stock at the time authorized, unissued and unreserved for all purposes, or held as treasury stock, is insufficient to pay interest hereunder in shares of Common Stock; (2) the Underlying Shares issuable for such conversion (including any interest payable in shares) (x) are not registered for resale pursuant to an effective Underlying Shares Registration Statement and (y) may not be sold without volume restrictions pursuant to Rule 144(k) promulgated under the Securities Act (as defined in Section 6); (3) the Common Stock is not listed or quoted for trading on the OTC or on a Subsequent Market; (4) the Company has failed to timely satisfy its conversion obligations hereunder; or (5) the issuance of such shares of Common Stock would result in a violation of Sections 4(a)(ii), then, the Company may not pay interest in kind and must pay interest in cash by delivering, within three Trading Days of each applicable Conversion Date, an amount in cash equal to the product of (a) the outstanding principal amount of the Debentures to be converted on such Conversion Date and (b) the product of (x) the quotient obtained by dividing .12 by 360 and (y) the number of days for which such principal amount was outstanding. (C) This Debenture shall be convertible into shares of Common Stock at the option of the Holder, in whole or in part at any time and from time to time, after the Original Issue Date (subject to the limitations on conversion set forth in Section 4(a)(ii) hereof). The Holder shall effect conversions by delivering to the Company a completed notice substantially in the form attached hereto as Exhibit A (a "Conversion Notice"). The Conversion Notice shall set forth the remaining principal amount of this Debenture and all accrued and unpaid interest thereon subsequent to the conversion at issue. The date on which a Conversion Notice is delivered is the "Conversion Date." Unless the Holder is converting the entire principal amount outstanding under this Debenture, the Holder is not be required to physically surrender this Debenture to the Company in order to effect conversions. Subject to Section 4(b), each Conversion Notice, once given, shall be irrevocable. Conversions hereunder shall have the effect of lowering the outstanding principal amount of this Debenture plus all accrued and unpaid interest thereon consideration in an amount equal to the applicable conversionCompany’s value implied by the per share price to the public of the Initial Public Offering and such consideration was distributed under Section 10.02(a), which (B) any such IPO Reorganization shall be evidenced by notations made effective on, and conditioned upon the occurrence of, such Initial Public Offering and (C) the Company will not effect an IPO Reorganization without the approval of the Transaction Committee, unless the rights and obligations of the Tiger Member in the Conversion Notice. The Holder Successor Entity immediately following the IPO Reorganization are, in all material respects, the same as the rights and obligations of the Tiger Member in the Company prior to consummation of the IPO Reorganization. In connection with an IPO Reorganization, the parties hereto shall, and shall maintain records showing cause the principal amount converted and Successor Entity to, enter into a stockholders, partnership or similar agreement providing the date Members who became stockholders, partners or other holders of equity interests of the Successor Entity in connection with such IPO Reorganization with rights with respect to their investment in the Successor Entity that are equivalent to the rights of such conversionsMembers under Article VI and Article XI hereof and subjecting such Members to obligations with respect to their investment in the Successor Entity that are equivalent to the obligations of the Members under Article VI and Article XI hereof. In For the purpose of this Section 11.04, in the event of any dispute or discrepancyan IPO Reorganization, after the records occurrence of such IPO Reorganization, respectively, all references to the Holder shall Company in this Section 11.04 will be controlling and determinative in deemed to refer to the absence of manifest errorSuccessor Entity.

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

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

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

Conversion. (A) This Debenture (i) Upon the terms and in the manner set forth herein, each share of Series C Preferred Stock shall be convertible into shares of Common Stock convertible, at the option of the Holderholder thereof, at any time or from time to time, in whole or in part at any time and from time to timepart, after commencing on the Original Issue Date (subject effective date of the Charter Amendment upon surrender to the limitations transfer agent which may be maintained for such purpose (the “Conversion Agent”) of the certificate(s) for each share to be converted or, if the shares of Series C Preferred Stock are not in certificated form, upon delivery to the Conversion Agent of a written Notice of Conversion (the date on conversion set forth in Section 4(a)(iiwhich the Conversion Agent shall have received a written Notice of Conversion and, if applicable, a surrendered certificate, the “Conversion Date”), into (x) hereof). The a number of shares of Common Stock issuable upon a conversion hereunder equal to the Conversion Ratio (it being agreed that if there is more than one class or series of Common Stock the holder shall be determined by adding the sum of (i) the quotient obtained by dividing (x) the outstanding principal amount of this Debenture entitled to elect in its sole discretion which class or series, or combination thereof, shall be converted and issued upon conversion hereof), plus (y) to the extent the Conversion Price Date falls on or after the close of business on a record date (as defined hereinor record dates) for the related payment of dividends and before the relevant payment date(s), and (ii) the amount equal a right to (I) the product of (x) the outstanding principal amount of this Debenture to be converted and (y) the product of (1) the quotient obtained by dividing .12 by 360 and (2) the number of days for which such principal amount was outstanding, divided by (II) the Conversion Price receive on the Conversion Date, provided, that if the Company shall have timely elected to pay the interest due on a Conversion Date in cash pursuant to the terms hereof, subsection (ii) shall not be used in the calculation of the number of shares of Common Stock issuable upon a conversion hereunder. (B) Notwithstanding anything to the contrary contained herein, if on any Conversion Date: (1) the number of shares of Common Stock at the time authorized, unissued and unreserved for all purposes, or held as treasury stock, is insufficient to pay interest hereunder in shares of Common Stock; (2) the Underlying Shares issuable for such conversion (including any interest payable in shares) (x) are not registered for resale pursuant to an effective Underlying Shares Registration Statement and (y) may not be sold without volume restrictions pursuant to Rule 144(k) promulgated under the Securities Act (as defined in Section 6); (3) the Common Stock is not listed or quoted for trading on the OTC or on a Subsequent Market; (4) the Company has failed to timely satisfy its conversion obligations hereunder; or (5) the issuance of such shares of Common Stock would result in a violation of Sections 4(a)(ii), then, the Company may not pay interest in kind and must pay interest in cash by delivering, within three Trading Days of each applicable Conversion Date, related payment date an amount in cash equal to the product of (a) the outstanding principal amount of cash that would have been paid to the Debentures to be converted on such Conversion Date and (b) holder if the product of (x) the quotient obtained by dividing .12 by 360 and (y) the number of days for which such principal amount was outstanding. (C) This Debenture shall be convertible into shares of Common Stock at received upon conversion had been outstanding on the option record date (unless such dividends or distributions are payable in kind in which case they shall be so payable), it being understood and agreed that the Series C Preferred Stock so converted shall not be entitled to any dividends or distributions with respect to such related payment date. If the Company shall fail to deliver any of the Holder, amounts or property described in whole or in part at any time and from time to time, after the Original Issue Date clause (subject to the limitations on conversion set forth in Section 4(a)(ii) hereof). The Holder shall effect conversions by delivering to the Company a completed notice substantially in the form attached hereto as Exhibit A (a "Conversion Notice"). The Conversion Notice shall set forth the remaining principal amount of this Debenture and all accrued and unpaid interest thereon subsequent to the conversion at issue. The date on which a Conversion Notice is delivered is the "Conversion Date." Unless the Holder is converting the entire principal amount outstanding under this Debenture, the Holder is not be required to physically surrender this Debenture to the Company in order to effect conversions. Subject to Section 4(by), each Conversion Notice, once given, such failure shall be irrevocable. Conversions hereunder shall have not affect the effect validity of lowering the outstanding principal amount issuance of this Debenture plus all accrued and unpaid interest thereon in an amount equal any securities pursuant to the applicable conversion, which shall be evidenced by notations made in the Conversion Notice. The Holder clause (x) and the Company shall maintain records showing continue to be required to deliver the principal amount converted amounts or property contemplated by clause (y). Upon conversion by the holder of Series C Preferred Stock pursuant to this Section 11 and the date upon receipt of such conversions. In payments, such holder shall not be entitled to any future dividends, distributions or other payments otherwise payable on shares of Series C Preferred Stock pursuant to Section 2 hereof with respect to shares of Series C Preferred Stock so converted (for the event avoidance of doubt, nothing herein shall affect the right of such holder to receive dividends on any shares of Common Stock or other securities deliverable upon conversion of any dispute or discrepancyshares of Series C Preferred Stock, the records of record date for which occurs after the Holder shall be controlling and determinative in the absence of manifest errorConversion Date).

Conversion. (A) This Debenture shall be convertible into shares of Common Stock at the option of the Holder, in whole or in part at At any time upon and from time to time, after the Original Issue Date earliest of: (subject to the limitations on conversion set forth in Section 4(a)(iia) hereof). The number of shares of Common Stock issuable upon a conversion hereunder shall be determined by adding the sum of June 30, 1997; (i) the quotient obtained by dividing (x) the outstanding principal amount of this Debenture to be converted and (y) the Conversion Price (as defined herein), and (ii) the amount equal to (I) the product of (x) the outstanding principal amount of this Debenture to be converted and (y) the product of (1) the quotient obtained by dividing .12 by 360 and (2) the number of days for which such principal amount was outstanding, divided by (II) the Conversion Price on the Conversion Date, provided, that if the Company shall have timely elected to pay the interest due on a Conversion Date in cash pursuant to the terms hereof, subsection (ii) shall not be used in the calculation of the number of shares of Common Stock issuable upon a conversion hereunder. (B) Notwithstanding anything to the contrary contained herein, if on any Conversion Date: (1) the number of shares of Common Stock at the time authorized, unissued and unreserved for all purposes, or held as treasury stock, is insufficient to pay interest hereunder in shares of Common Stock; (2) the Underlying Shares issuable for such conversion (including any interest payable in shares) (x) are not registered for resale pursuant to an effective Underlying Shares Registration Statement and (y) may not be sold without volume restrictions pursuant to Rule 144(k) promulgated under the Securities Act (as defined in Section 6); (3) the Common Stock is not listed or quoted for trading on the OTC or on a Subsequent Market; (4b) the Company has failed to timely satisfy successfully completing an initial public offering of its conversion obligations hereunderCommon Stock; or (5c) the Company selling, leasing or otherwise disposing of all or any substantial portion of its assets other that in the ordinary course of business; (d) the Company merging or consolidating with or into another corporation, partnership or other entity (other than as expressly permitted under Section 6.13 above); (e) the Founders transferring, selling or otherwise disposing of any of their ownership interest in the Company other than as expressly permitted under Section 9, (f) the Company's issuance of such a written notice to the Lenders exercising its voluntary prepayment right; or (g) the occurrence of an Event of Default pursuant to subsection (f) or (g) of Section 8.1 hereof (following any applicable remedy period, including the 60 day period in which an Involuntary Petition may be dismissed or, stayed), Lenders holding a majority in interest of the Debentures may, upon 30 days prior written notice, require that all of the then outstanding Debentures be converted into 22,556.14 shares of Common Convertible Preferred Stock would result and for each $1,000 in a violation of Sections 4(a)(ii), then, the Company may not pay interest in kind and must pay interest in cash by delivering, within three Trading Days of each applicable Conversion Date, an amount in cash equal to the product of (a) the outstanding principal amount of the Debentures being converted one (1) share of Redeemable Preferred Stock; PROVIDED, HOWEVER, that in the event that any principal of the Debentures shall have been prepaid prior to conversion, such prepayment shall only reduce the amount of Redeemable Preferred Stock received upon conversion and shall not reduce the amount of Convertible Preferred Stock received upon such conversion. Except as contemplated by Section 9.3 hereof, no partial conversion of the Debentures shall be permitted. Notwithstanding anything in this Agreement to the contrary, the Debentures: (a) may be partially converted on such Conversion Date pursuant to Section 9.3 hereof; and (b) the product of (x) the quotient obtained by dividing .12 by 360 and (y) the number of days for which such principal amount was outstanding. (C) This Debenture shall may not be convertible into shares of Common Stock at the option prepaid as a result of the Holder, in whole or in part at any time and from time to time, after the Original Issue Date (subject to the limitations on conversion events set forth in Section 4(a)(ii1.2(f) hereof). The Holder hereof unless the Lenders shall effect conversions by delivering have (i) received at least sixty (60) days prior written notice of such event and the related prepayment of the Debentures and (ii) been afforded an opportunity to convert the Debentures prior to the Company a completed notice substantially in the form attached hereto as Exhibit A (a "Conversion Notice")consummation of such event. The Conversion Notice shall set forth the remaining principal amount of this Debenture and all accrued and unpaid interest thereon subsequent to In connection with the conversion at issue. The date on which a Conversion Notice is delivered is the "Conversion Date." Unless the Holder is converting the entire principal amount outstanding of Debentures under this DebentureSection 7, the Holder is not be required to physically surrender this Debenture to the Company in order to effect conversions. Subject to Section 4(b), each Conversion Notice, once given, shall be irrevocable. Conversions hereunder shall have the effect of lowering the outstanding principal amount of this Debenture plus all accrued and unpaid interest thereon in an amount equal to the applicable conversion, which shall be evidenced by notations made in the Conversion Notice. The Holder and the Company shall maintain records showing pay to the principal amount converted and Lenders, in cash, all accrued but unpaid Interest on the Debentures through the date of such conversionsconversion and each Leader shall surrender all of its Debentures, marked cancelled, and acknowledged by the Lenders to be paid-in-full, to the Company at the Company's principal office in exchange for the shares of Convertible Preferred Stock and Redeemable Preferred Stock and interest payments described above. In Upon delivery of the event of any dispute or discrepancyDebentures to the Company, marked cancelled, the records Lenders shall be deemed to be shareholders in the Company holding their respective shares of Convertible Preferred Stock and Redeemable Preferred Stock. The Company shall make such filings as are required and obtain all necessary consents and approvals necessary to consummate such conversion, including, if applicable, all necessary filings and approvals under Title 11 of the Holder Hart-▇▇▇▇▇-▇▇▇▇▇▇ ▇▇▇itrust Improvements Act of 1976, as amended. The Company shall take all other action that the Lenders may reasonably request to evidence and effectuate the Lenders becoming shareholders holding shares of Convertible Preferred Stock and Redeemable Preferred Stock in the Company. The Company will comply with all applicable state "blue sky" or securities laws in connection with the issuance and sale of the Debentures, any of the securities into which the Debentures may be converted and the other securities issued by the Company. Upon such conversion, the Company's Board of Directors shall be controlling and determinative expanded to include an additional two members in the absence of manifest erroraccordance with Section 6.11 hereof.

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

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

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

Conversion. Holders of Series B Preferred Shares shall have the right to convert all or a portion of such shares into Common Shares, as follows: (Aa) This Debenture shall be convertible into shares Subject to and upon compliance with the provisions of Common Stock at this Section 6 and the option provisions of Article VIII of the HolderCorporation's Articles of Incorporation, in whole a holder of Series B Preferred Shares shall have the right, at his or in part at any time and from time to timeher option, on or after the Original date 90 days after the Issue Date (subject Date, to convert such shares into the limitations on conversion set forth in Section 4(a)(ii) hereof). The number of shares of authorized but previously unissued fully paid and non-assessable Common Stock issuable upon a conversion hereunder shall be determined by adding the sum of (i) the quotient Shares obtained by dividing the aggregate Liquidation Preference of such shares (x) the outstanding principal amount exclusive of this Debenture accumulated, accrued, and unpaid dividends, which are to be converted and (ypaid in cash as provided below) by the Conversion Price (as defined hereinin effect at the time and on the date provided for in the last paragraph of paragraph (b) of this Section 6) by surrendering such shares to be converted, such surrender to be made in the manner provided in paragraph (b) of this Section 6. Notwithstanding any provision of Article VIII of the Corporation's Articles of Incorporation, a holder shall be entitled to convert shares of Series B Preferred Stock immediately prior to the record date for payments of distributions to holders of Common Shares upon any liquidation or winding up of the Company. (b) In order to exercise the conversion right, the holder of each Series B Preferred Share to be converted shall surrender the certificate representing such share, duly endorsed or assigned to the Corporation or in blank, at the office of the Transfer Agent, accompanied by written notice to the Corporation that the holder thereof elects to convert such Series B Preferred Shares. Unless the shares issuable on conversion are to be issued in the same name as the name in which such Series B Preferred Share is registered, each share surrendered for conversion shall be accompanied by instruments of transfer, in form satisfactory to the Corporation, duly executed by the holder or such holder's duly authorized attorney and an amount sufficient to pay any transfer or similar tax (or evidence reasonably satisfactory to the Corporation demonstrating that such taxes have been paid). Holders of Series B Preferred Shares at the close of business on a dividend payment record date shall be entitled to receive the dividend payable on such shares on the corresponding Dividend Payment Date notwithstanding the conversion thereof following such dividend payment record date and prior to such Dividend Payment Date. However, Series B Preferred Shares surrendered for conversion during the period between the close of business on any dividend payment record date with respect to the Series B Preferred Shares and the opening of business on the dividend payment record date with respect to the Common Shares for the corresponding Dividend Period (except shares converted after the issuance of notice of redemption with respect to a Call Date during such period, such Series B Preferred Shares being entitled to such dividend on the Dividend Payment Date) must be accompanied by payment of an amount equal to the dividend payable on such Common Shares on such Dividend Payment Date. A holder of Series B Preferred Shares on a dividend payment record date who (or whose transferee) tenders any such shares for conversion into Common Shares on the corresponding Dividend Payment Date will receive the dividend payable by the Corporation on such Series B Preferred Shares on such date, and the converting holder need not include payment of the amount of such dividend upon surrender of Series B Preferred Shares for conversion. Except as provided above, the Corporation shall make no payment or allowance for unpaid dividends, whether or not in arrears, on converted shares or for dividends on the Common Shares issued upon such conversion. As promptly as practicable after the surrender of certificates for Series B Preferred Shares as aforesaid, the Corporation shall issue and shall deliver at such office to such holder, or on his or her written order, a certificate or certificates for the number of full Common Shares issuable upon the conversion of such shares in accordance with provisions of this Section 6, and any fractional interest in respect of a Common Share arising upon such conversion shall be settled as provided in paragraph (c) of this Section 6. Each conversion shall be deemed to have been effected immediately prior to the close of business on the date on which the certificates for Series B Preferred Shares shall have been surrendered and such notice shall have been received by the Corporation as aforesaid (and if applicable, payment of an amount equal to the dividend payable on such shares shall have been received by the Corporation as described above), and the person or persons in whose name or names any certificate or certificates for Common Shares shall be issuable upon such conversion shall be deemed to have become the holder or holders of record of the shares represented thereby at such time on such date and such conversion shall be at the Conversion Price in effect at such time on such date unless the share transfer books of the Corporation shall be closed on that date, in which event such Exh. A-11 38 person or persons shall be deemed to have become such holder or holders of record at the close of business on the next succeeding day on which such share transfer books are open, but such conversion shall be at the Conversion Price in effect on the date on which such shares shall have been surrendered and such notice received by the Corporation. (c) No fractional shares or scrip representing fractions of Common Shares shall be issued upon conversion of the Series B Preferred Shares. Instead of any fractional interest in a Common Share that would otherwise be deliverable upon the conversion of a Series B Preferred Share, the Corporation shall pay to the holder of such share an amount in cash based upon the Current Market Price of the Common Shares on the Trading Day immediately preceding the date of conversion. If more than one share shall be surrendered for conversion at one time by the same holder, the number of full Common Shares issuable upon conversion thereof shall be computed on the basis of the aggregate number of Series B Preferred Shares so surrendered. (d) The Conversion Price shall be adjusted from time to time as follows: (i) If the Corporation shall after the Issue Date (A) pay a dividend or make a distribution on its capital shares in Common Shares, (B) subdivide its outstanding Common Shares into a greater number of shares, (C) combine its outstanding Common Shares into a smaller number of shares or (D) issue any shares of capital stock by reclassification of its Common Shares, the Conversion Price in effect at the opening of business on the day following the date fixed for the determination of stockholders entitled to receive such dividend or distribution or at the opening of business on the Business Day next following the day on which such subdivision, combination or reclassification becomes effective, as the case may be, shall be adjusted so that the holder of any Series B Preferred Share thereafter surrendered for conversion shall be entitled to receive the number of Common Shares that such holder would have owned or have been entitled to receive after the happening of any of the events described above as if such Series B Preferred Shares had been converted immediately prior to the record date in the case of a dividend or distribution or the effective date in the case of a subdivision, combination or reclassification. An adjustment made pursuant to this subparagraph (i) shall become effective immediately after the opening of business on the Business Day next following the record date (except as provided in paragraph (h) below) in the case of a dividend or distribution and shall become effective immediately after the opening of business on the Business Day next following the effective date in the case of a subdivision, combination or reclassification. (ii) If the amount Corporation shall issue after the Issue Date rights, options or warrants to all holders of Common Shares entitling them (for a period expiring within 45 days after the record date described below) to subscribe for or purchase Common Shares at a price per share less than 94% (100% if a stand-by underwriter is used and charges the Corporation a commission) of the Fair Market Value per Common Share on the record date for the determination of stockholders entitled to receive such rights, options or warrants, then the Conversion Price in effect at the opening of business on the Business Day next following such record date shall be adjusted to equal to the price determined by multiplying (IA) the product Conversion Price in effect immediately prior to the opening of business on the Business Day next following the date fixed for such determination by (B) a fraction, the numerator of which shall be the sum of (x) the outstanding principal amount of this Debenture to be converted and (y) the product of (1) the quotient obtained by dividing .12 by 360 and (2) the number of days for which such principal amount was outstanding, divided by (II) the Conversion Price Common Shares outstanding on the Conversion Date, provided, that if close of business on the Company shall have timely elected to pay the interest due on a Conversion Date in cash pursuant to the terms hereof, subsection (ii) shall not be used in the calculation of the number of shares of Common Stock issuable upon a conversion hereunder. (B) Notwithstanding anything to the contrary contained herein, if on any Conversion Date: (1) the number of shares of Common Stock at the time authorized, unissued and unreserved for all purposes, or held as treasury stock, is insufficient to pay interest hereunder in shares of Common Stock; (2) the Underlying Shares issuable date fixed for such conversion (including any interest payable in shares) (x) are not registered for resale pursuant to an effective Underlying Shares Registration Statement and (y) may not be sold without volume restrictions pursuant to Rule 144(k) promulgated under the Securities Act (as defined in Section 6); (3) the Common Stock is not listed or quoted for trading on the OTC or on a Subsequent Market; (4) the Company has failed to timely satisfy its conversion obligations hereunder; or (5) the issuance of such shares of Common Stock would result in a violation of Sections 4(a)(ii), then, the Company may not pay interest in kind and must pay interest in cash by delivering, within three Trading Days of each applicable Conversion Date, an amount in cash equal to the product of (a) the outstanding principal amount of the Debentures to be converted on such Conversion Date and (b) the product of (x) the quotient obtained by dividing .12 by 360 determination and (y) the number of days shares that the aggregate proceeds to the Corporation from the exercise of such rights, options or warrants for Common Shares would purchase at 94% of such Fair Market Value (or 100% in the case of a stand-by underwriting), and the denominator of which shall be the sum of (x) the number of Common Shares outstanding on the close of business on the date fixed for such principal amount was outstandingdetermination and (y) the number of additional Common Shares offered for subscription or purchase pursuant to such rights, options or warrants. Such adjustment shall become effective immediately after the opening of business on the day next following such record date (except as provided in paragraph (h) below). In determining whether any rights, options or warrants entitle the holders of Common Shares to subscribe for or purchase Common Shares at less than 94% of such Fair Market Value (or 100% in the case of a stand-by underwriting), there shall be taken into account any consideration received by the Corporation upon issuance and upon exercise of such rights, options or warrants, the value of such consideration, if other than cash, to be determined by the Board of Directors. (iii) If the Corporation shall distribute to all holders of its Common Shares any securities of the Corporation (other than Common Shares) or evidence of its indebtedness or assets (including cash other than cumulative cash dividends or cash distributions paid with respect to the Common Shares after December 31, 1996 which are not in excess of the following: the sum of (A) the Corporation's cumulative undistributed Funds from Operations at December 31, 1996, plus (B) the cumulative amount of Funds from Operations, as determined by the Board of Directors, after December 31, 1996, minus (C) This Debenture the cumulative amount of dividends accrued or paid in respect of the Series B Preferred Shares or any other class or series of preferred stock of the Corporation after the Issue Date) or rights, options or warrants to subscribe for or purchase any of its securities (excluding those rights, options and warrants issued to all holders of Common Shares entitling them for a period expiring within 45 days after the record date referred to in subparagraph (ii) above to subscribe for or purchase Common Shares, which rights and warrants are referred to in and treated under subparagraph (ii) above) (any of the foregoing being hereinafter in this subparagraph (iii) collectively called the "Distribution"), then in each such case the Conversion Price shall be convertible into shares adjusted so that it shall equal the price determined by multiplying (x) the Conversion Price in effect immediately prior to the close of business on the date fixed for the determination of stockholders entitled to receive such Distribution by (y) a fraction, the numerator of which shall be the Fair Market Value per Common Stock Share on the record date described below less the then fair market value (as determined by the Board of Directors, whose determination shall be conclusive and shall be described in a resolution of the Board of Directors), of the portion of the Distribution so distributed and applicable to one Common Share, and the denominator of which shall be the Fair Market Value per Common Share on the record date mentioned below. Such adjustment shall become effective immediately at the option opening of business on the Business Day next following (except as provided in paragraph (h) below) the record date for the determination of stockholders entitled to receive such Distribution. For the purposes of this subparagraph (iii), a Distribution, which is distributed not only to the holders of the HolderCommon Shares on the date fixed for the determination of stockholders entitled to such Distribution, in whole or in part at any time and from time but also is distributed with each Common Share delivered to timea Person converting a Series B Preferred Share after such determination date, after shall not require an adjustment of the Original Issue Date Conversion Price pursuant to this subparagraph (subject to iii); provided that on the limitations on conversion set forth in Section 4(a)(ii) hereof). The Holder shall effect conversions by delivering to the Company a completed notice substantially in the form attached hereto as Exhibit A (a "Conversion Notice"). The Conversion Notice shall set forth the remaining principal amount of this Debenture and all accrued and unpaid interest thereon subsequent to the conversion at issue. The date date, if any, on which a person converting a Series B Preferred Share would no longer be entitled to receive such Distribution with a Common Share (other than as a result of the termination of all such Distribution), such Distribution shall be deemed to have occurred and the Conversion Notice is delivered is Price shall be adjusted as provided in this subparagraph (iii) (and such day shall be deemed to be "the date fixed for the determination of the stockholders entitled to receive such Distribution" and "the record date" within the meaning of the two preceding sentences). (iv) In case a tender or exchange offer (which term shall not include open market repurchases by the Corporation) made by the Corporation or any subsidiary of the Corporation for all or any portion of the Common Shares shall expire and such tender or exchange offer shall involve the payment by the Corporation or such subsidiary of consideration per Common Share having a fair market value (as determined in good faith by the Board of Directors, whose determination shall be conclusive and described in a resolution of the Board of Directors), at the last time (the "Conversion Date." Unless Expiration Time") tenders or exchanges may be made pursuant to such tender or exchange offer, that exceeds the Holder is converting Current Market Price per Common Share on the entire principal amount outstanding under this DebentureTrading Day next succeeding the Expiration Time, the Holder is Conversion Price shall be reduced so that the same shall equal the price determined by multiplying the Conversion Price in effect immediately prior to the effectiveness of the Conversion Price reduction contemplated by this subparagraph, by a fraction of which the numerator shall be the number of Common Shares outstanding (including any tendered or exchanged shares) at the Expiration Time, multiplied by the Current Market Price per Common Share on the Trading Day next succeeding the Expiration Time, and the denominator shall be the sum of (A) the fair market value (determined as aforesaid) of the aggregate consideration payable to stockholders based upon the acceptance (up to any maximum specified in the terms of the tender or exchange offer) of all shares validly tendered or exchanged and not withdrawn as of the Expiration Time (the shares deemed so accepted, up to any maximum, being referred to as the "Purchased Shares") and (B) the product of the number of Common Shares outstanding (less any Purchased Shares) at the Expiration Time and the Current Market Price per Common Share on the Trading Day next succeeding the Expiration Time, such reduction to become effective immediately prior to the opening of business on the day following the Expiration Time. (v) No adjustment in the Conversion Price shall be required unless such adjustment would require a cumulative increase or decrease of at least 1% in such price; provided, however, that any adjustments that by reason of this subparagraph (v) are not required to physically surrender be made shall be carried forward and taken into account in any subsequent adjustment until made; and provided, further, that Exh. A-14 41 any adjustment shall be required and made in accordance with the provisions of this Debenture to the Company Section 6 (other than this subparagraph (v)) not later than such time as may be required in order to effect conversions. Subject to Section 4(b), each Conversion Notice, once given, shall be irrevocable. Conversions hereunder shall have preserve the effect tax-free nature of lowering the outstanding principal amount of this Debenture plus all accrued and unpaid interest thereon in an amount equal a distribution to the applicable conversion, which shall be evidenced by notations made in the Conversion Noticeholders of Common Shares. The Holder and the Company shall maintain records showing the principal amount converted and the date of such conversions. In the event of Notwithstanding any dispute or discrepancy, the records of the Holder shall be controlling and determinative in the absence of manifest error.other provisi

Conversion. (Aa) This Debenture Conversion Upon Closing of a Qualified Financing. If the Company shall consummate an equity financing (or series of related financings) involving the issuance and sale of Series C Convertible Preferred Stock (the rights, preferences and privileges of which are to be convertible designated by the Board of Directors of the Company) (the "Series C Preferred Stock") prior to the Demand Date, yielding aggregate proceeds of at least $12,000,000 (the "Qualified Financing"), then the principal amount of this Note shall automatically and without any action on the part of the Holder be converted into that number of fully paid and nonassessable shares of Common Series C Preferred Stock as are purchasable with the principal amount of this Note (the principal of this Note being treated as if it were cash consideration), on the identical terms and conditions and at the same price as the Series C Preferred Stock is issued and sold in the Qualified Financing (b) Conversion on or after Demand Date. ---------------------------------- (i) If the Company does not consummate a Qualified Financing before the Demand Date, then, if the Note shall not theretofore have been converted pursuant to Section 2(b)(ii) hereof, the principal amount of this Note shall, at the option of the Holder, in whole or in part exercisable at any time and from time to time, be convertible into that number of fully-paid and nonassessable shares of preferred stock (which may be Series C Preferred Stock issued in a Qualified Financing occurring after the Original Issue Date Demand Date) issued in connection with the first private placement of equity for cash completed by the Company (subject the "Non-Qualified Preferred Stock") on or after the date hereof, equal to the limitations on conversion set forth in Section 4(a)(ii) hereof). The number of shares of Common Stock issuable upon a conversion hereunder shall be determined by adding the sum of (i) the quotient obtained by dividing (x) the outstanding principal amount of this Debenture to be converted and (y) the Conversion Price (as defined herein), and (iiA) the amount equal to (I) of the product of (x) the then outstanding principal amount of this Debenture to be converted and (y) the product of (1) the quotient obtained by dividing .12 by 360 and (2) the number of days for which such principal amount was outstanding, hereof divided by (IIB) the Conversion Price on the Conversion Date, provided, that if price per share at which the Company shall have timely elected to pay the interest due on a Conversion Date in cash pursuant to the terms hereof, subsection issued and sold such shares of Non-Qualified Preferred Stock (ii) shall not be used Anything contained in the calculation of the number of shares of Common Stock issuable upon a conversion hereunder. Sections 2(a) or (Bb)(i) Notwithstanding anything to the contrary contained hereinnotwithstanding, if on any Conversion Date: (1) the number of shares of Common Stock at the time authorized, unissued and unreserved for all purposes, or held as treasury stock, is insufficient to pay interest hereunder in shares of Common Stock; (2) the Underlying Shares issuable for such conversion (including any interest payable in shares) (x) are not registered for resale pursuant to an effective Underlying Shares Registration Statement and (y) may not be sold without volume restrictions pursuant to Rule 144(k) promulgated under the Securities Act (as defined in Section 6); (3) the Common Stock is not listed or quoted for trading on the OTC or on a Subsequent Market; (4) the Company has failed to timely satisfy its conversion obligations hereunder; or (5) does not consummate a Qualified Financing before the issuance of such shares of Common Stock would result in a violation of Sections 4(a)(ii), thenDemand Date, the Company may not pay interest in kind and must pay interest in cash by deliveringprincipal of this Note shall, within three Trading Days of each applicable Conversion Date, an amount in cash equal to the product of (a) the outstanding principal amount of the Debentures to be converted on such Conversion Date and (b) the product of (x) the quotient obtained by dividing .12 by 360 and (y) the number of days for which such principal amount was outstanding. (C) This Debenture shall be convertible into shares of Common Stock at the option of the Holder, in whole or in part exercisable at any time and from time to time, after be convertible, in full and not in part, into that number of fully-paid and nonassessable shares of Senior Series B-2 Preferred Stock, $.0005 par value, of the Original Issue Date Company, equal to (subject to A) the limitations on conversion set forth in Section 4(a)(ii) hereof). The Holder shall effect conversions by delivering to the Company a completed notice substantially in the form attached hereto as Exhibit A (a "Conversion Notice"). The Conversion Notice shall set forth the remaining principal amount of this Debenture and all accrued and unpaid interest thereon subsequent to the conversion at issue. The date on which a Conversion Notice is delivered is the "Conversion Date." Unless the Holder is converting the entire principal amount outstanding under this Debenture, the Holder is not be required to physically surrender this Debenture to the Company in order to effect conversions. Subject to Section 4(b), each Conversion Notice, once given, shall be irrevocable. Conversions hereunder shall have the effect of lowering the then outstanding principal amount of this Debenture plus all accrued and unpaid interest thereon in an amount equal to the applicable conversion, which shall be evidenced hereof divided by notations made in the Conversion Notice. The Holder and the Company shall maintain records showing the principal amount converted and the date of such conversions. In the event of any dispute or discrepancy, the records of the Holder shall be controlling and determinative in the absence of manifest error(B) $2.50.

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

Conversion. (A) This Debenture The outstanding principal of this Note, all accrued and unpaid interest thereon and other amounts in respect thereto shall be convertible converted, if the Holder so elects, into NaviSite common stock, par value $0.01 per share (the "COMMON STOCK") in accordance with this Section 9. Subject to any express grace or cure periods set forth herein, upon the written election of the Holder and without payment of any additional consideration, this Note shall be converted into such whole number of fully paid and nonassessable shares of Common Stock at the option of as is determined by dividing (A) all or a portion, as elected by the Holder, of the then outstanding principal of this Note, accrued and unpaid interest thereon, and any other amounts due in respect thereto by (B) $4.642, (such formula, the "CONVERSION FORMULA"), with such Conversion Formula to be appropriately adjusted to account for stock dividends, stock splits, reverse stock splits, stock combinations or other events. No fractional shares shall be issued, and the number of shares resulting from the Conversion Formula shall be rounded down to the nearest whole share. Any election by the Holder pursuant to this Section 9 shall be made by written notice to NaviSite, and such notice may be given: (a) at any time following the first anniversary of the date hereof until the eighteen (18) month anniversary hereof if the combined principal amount of the Primary Note and the Escrow Note then outstanding as of the first anniversary is greater than or in part equal to $20,000,000; (b) at any time following the eighteen (18) month anniversary hereof if the combined principal amount of the Primary Note and the Escrow Note outstanding as of said date is greater than or equal to $10,000,000; (c) at any time and from time to time, time after the Original Issue Date second anniversary hereof; or (subject d) after the occurrence of an Event of Default, provided that if such Event of Default occurs prior to the limitations effectiveness of the stockholder's approval contemplated by Section 5.18 of the Purchase Agreement, then this Note and the Primary Note collectively shall not be convertible into a number of shares of NaviSite's Common Stock that is equal to or greater than the Share Cap unless and until NaviSite has obtained the effective approval of its stockholders of those matters described in Section 5.18 of the Purchase Agreement. Notwithstanding the foregoing, in the event the Holder desires to convert pursuant to Section 9(a) or 9(b), NaviSite may, within 5 days of receipt of the Holder's Conversion Notice, notify the Holder of its good faith intent to pay, within 30 days of NaviSite's receipt of the Conversion Notice, to the Holder an amount that would cause the $20,000,000 threshold in Section 9(a) or the $10,000,000 threshold in Section 9(b), as applicable, to be satisfied if such payment had been made on the applicable anniversary date. In such event, a Holder may only convert pursuant to Section 9(a) or 9(b), as applicable, in the 5 business day period following receipt of NaviSite's notice of its intent to pay. If the Holder does not convert, the restriction on conversion set forth in Section 4(a)(ii) hereof). The number of shares of Common Stock issuable upon a conversion hereunder the previous sentence shall be determined by adding expire on the sum earlier to occur of (i) the quotient obtained by dividing (x) the outstanding principal amount receipt from NaviSite of this Debenture notice that it will not be able to be converted and (y) the Conversion Price (as defined herein), pay such amounts and (ii) 30 days after NaviSite's receipt of the Conversion Notice. NaviSite shall act in good faith to promptly deliver the notice in clause (i) above in the event it becomes reasonably apparent to NaviSite that NaviSite will not be able to pay such amount equal in the 30 day period. Upon election to convert, the Holder shall surrender this Note, duly assigned or endorsed for transfer to NaviSite or shall deliver an affidavit of loss to NaviSite (I) together with an agreement to indemnify NaviSite in full with respect to any loss actually incurred with respect to the product of (x) lost Note), at its principal executive office or such other place as NaviSite may from time to time designate by notice to the outstanding principal amount Holders. Upon surrender of this Debenture Note or delivery of an affidavit of loss (together with an agreement to be converted and (y) the product of (1) the quotient obtained by dividing .12 by 360 and (2) the number of days for which such principal amount was outstanding, divided by (II) the Conversion Price on the Conversion Date, provided, that if the Company shall have timely elected indemnify NaviSite in full with respect to pay the interest due on a Conversion Date in cash pursuant any loss actually incurred with respect to the terms hereoflost Note), subsection NaviSite shall commence the issuance of, and shall send by hand delivery, by courier or by first class mail (iipostage prepaid) shall not be used in to the calculation of Holder, or to the Holder's designee, at the address designated by the Holder, certificates for the number of shares of Common Stock issuable to which the Holder shall be entitled upon a conversion. The issuance of certificates for Common Stock upon conversion hereunder. of this Note shall be deemed effective as of the date of surrender of this Note or delivery of such affidavit of loss (B) Notwithstanding anything together with an agreement to indemnify NaviSite in full with respect to any loss actually incurred with respect to the contrary contained hereinlost Note) and will be made without charge to the holder of this Note for any issuance tax in respect thereof or other costs incurred by NaviSite in connection with such conversion and the related issuance of such stock. In the event that the Holder elects to convert pursuant to this Section 9 less than all of the then outstanding principal of this Note, accrued and unpaid interest thereon, and any other amounts due in respect thereto, the Company shall issue a replacement note with the same terms as this Note and a principal equal to the amount of principal, interest and other amounts not converted into Common Stock by the Holder. NaviSite shall at all times reserve and keep available out of its authorized but unissued shares of Common Stock, solely for the purpose of effecting the conversion of this Note as provided hereunder, such number of its shares of Common Stock as shall from time to time be sufficient to effect the conversion of this Note as provided hereunder; and if on at any Conversion Date: (1) time the number of authorized but unissued shares of Common Stock shall not be sufficient to effect the conversion of this Note as provided hereunder, NaviSite will take such corporate action as may be necessary to increase the number of its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purpose, and to reserve the appropriate number of shares of Common Stock at the time authorized, unissued for issuance upon such conversion. NaviSite and unreserved for all purposes, or held as treasury stock, is insufficient to pay interest hereunder in shares of Common Stock; (2) the Underlying Shares issuable for such conversion (including any interest payable in shares) (x) are not registered for resale pursuant to an effective Underlying Shares Registration Statement and (y) may not be sold without volume restrictions pursuant to Rule 144(k) promulgated under the Securities Act (as defined in Section 6); (3) the Common Stock is not listed or quoted for trading on the OTC or on a Subsequent Market; (4) the Company has failed to timely satisfy its conversion obligations hereunder; or (5) the issuance of such shares of Common Stock would result in a violation of Sections 4(a)(ii), then, the Company may not pay interest in kind and must pay interest in cash by delivering, within three Trading Days of each applicable Conversion Date, an amount in cash equal to the product of (a) the outstanding principal amount of the Debentures to be converted on such Conversion Date and (b) the product of (x) the quotient obtained by dividing .12 by 360 and (y) the number of days for which such principal amount was outstanding. (C) This Debenture shall be convertible into shares of Common Stock at the option of the Holder, in whole or in part at any time and from time to time, after the Original Issue Date (subject to the limitations on conversion set forth in Section 4(a)(ii) hereof). The Holder shall effect conversions by delivering to the Company a completed notice substantially in the form attached hereto as Exhibit A (a "Conversion Notice"). The Conversion Notice shall set forth the remaining principal amount of this Debenture and all accrued and unpaid interest thereon subsequent to the conversion at issue. The date on which a Conversion Notice is delivered is the "Conversion Date." Unless the Holder is converting the entire principal amount outstanding under this Debenture, the Holder is not be required to physically surrender this Debenture to the Company in order to effect conversions. Subject to Section 4(b), each Conversion Notice, once given, shall be irrevocable. Conversions hereunder shall have the effect of lowering the outstanding principal amount of this Debenture plus all accrued and unpaid interest thereon in an amount equal to the applicable conversion, which shall be evidenced by notations made in the Conversion Notice. The Holder and the Company shall maintain records showing the principal amount converted and the date of such conversions. In the event of any dispute or discrepancy, the records of the Holder shall be controlling and determinative act in good faith in the absence performance of manifest errortheir respective covenants hereunder.

Conversion. (Aa) This Debenture Immediately prior to the consummation of the Qualified IPO on or before the Maturity Date, the whole of the Principal Amount then outstanding shall be convertible converted automatically into shares of Common Stock at the option of the Holder, in whole or in part at any time and from time to time, after the Original Issue Date (subject to the limitations on conversion set forth in Section 4(a)(ii) hereof). The number of shares of Common Stock issuable upon a conversion hereunder shall be determined by adding the sum of (i) the quotient obtained by dividing (x) the outstanding principal amount of this Debenture to be converted and (y) the Conversion Price (as defined herein), and (ii) the amount equal to (I) the product of (x) the outstanding principal amount of this Debenture to be converted and (y) the product of (1) the quotient obtained by dividing .12 by 360 and (2) the number of days for which such principal amount was outstanding, divided by (II) the Conversion Price on the Conversion Date, provided, that if the Company shall have timely elected to pay the interest due on a Conversion Date in cash pursuant to the terms hereof, subsection (ii) shall not be used in the calculation of the number of shares of Common Stock issuable upon a conversion hereunder. (B) Notwithstanding anything to the contrary contained herein, if on any Conversion Date: (1) the number of shares of Common Stock at the time authorized, unissued and unreserved for all purposes, or held as treasury stock, is insufficient to pay interest hereunder in shares of Common Stock; (2) the Underlying Shares issuable for such conversion (including any interest payable in shares) (x) are not registered for resale pursuant to an effective Underlying Shares Registration Statement and (y) may not be sold without volume restrictions pursuant to Rule 144(k) promulgated under the Securities Act (as defined in Section 6); (3) the Common Stock is not listed or quoted for trading on the OTC or on a Subsequent Market; (4) the Company has failed to timely satisfy its conversion obligations hereunder; or (5) the issuance of such shares of Common Stock would result in a violation of Sections 4(a)(ii), then, the Company may not pay interest in kind and must pay interest in cash by delivering, within three Trading Days of each applicable Conversion Date, an amount in cash equal to the product of (ai) 5 multiplied by (ii) the quotient of (A) the sum of (1) the then total outstanding principal amount number of ordinary shares of the Debentures Company (including all options, warrants or other securities or equity convertible into or exercisable for or which carry rights to be subscribe for or purchase ordinary shares of the Company (excluding the Notes), on an as-converted on such basis, but excluding any Qualified Equity Securities (as defined below) and all the Conversion Date and Shares then in issue (if any)) plus (2) the then reserved but unallocated ordinary shares under the Company’s stock option plan divided by (B) 48 multiplied by (iii) the quotient of (A) the whole of the Principal Amount then outstanding divided by (B) USD25,000,000.00. (b) Subject to Condition 6(a) above, the Noteholder shall have the right at any time but is not obliged to convert all or a portion of the Principal Amount into the amount of Conversion Shares equal to the product of (xi) 5 multiplied by (ii) the quotient obtained by dividing .12 by 360 and of (yA) the sum of (1) the then total outstanding number of days ordinary shares of the Company (including all options, warrants or other securities or equity convertible into or exercisable for or which such principal amount was outstandingcarry rights to subscribe for or purchase ordinary shares of the Company (excluding the Notes), on an as-converted basis, but excluding any Qualified Equity Securities (as defined below) and all the Conversion Shares then in issue (if any)) plus (2) the then reserved but unallocated ordinary shares under the Company’s stock option plan divided by (B) 48 multiplied by (iii) the quotient of (A) the portion of the Principal Amount being converted by the Noteholder divided by (B) USD25,000,000.00; provided that the Noteholder shall not be able to convert a portion of the Principal Amount that is less than USD250,000.00. (Cc) This Debenture shall be For purposes of this Condition 6, “Qualified Equity Securities” means (i) all Shares (including all options, warrants or other securities or equity convertible into or exercisable for or which carry rights to subscribe for or purchase ordinary shares of Common Stock at the option Company on an as-converted basis) issued for cash prior to a Conversion under Condition 6(a) or Condition 6(b) where the aggregate of the Holder, in whole or in part at issue price and any time and from time to time, after the Original Issue Date (subject to the limitations on exercise price/conversion set forth in Section 4(a)(ii) hereof). The Holder shall effect conversions by delivering to price reflects a pre-money valuation of the Company exceeding USD397,500,000.00 (if any) and (ii) all Shares to be issued and offered for purchase or subscription under a completed notice substantially in the form attached hereto as Exhibit A (a "Conversion Notice"). The Conversion Notice shall set forth the remaining principal amount of this Debenture and all accrued and unpaid interest thereon subsequent to the conversion at issue. The date on which a Conversion Notice is delivered is the "Conversion DateQualified IPO." Unless the Holder is converting the entire principal amount outstanding under this Debenture, the Holder is not be required to physically surrender this Debenture to the Company in order to effect conversions. Subject to Section 4(b), each Conversion Notice, once given, shall be irrevocable. Conversions hereunder shall have the effect of lowering the outstanding principal amount of this Debenture plus all accrued and unpaid interest thereon in an amount equal to the applicable conversion, which shall be evidenced by notations made in the Conversion Notice. The Holder and the Company shall maintain records showing the principal amount converted and the date of such conversions. In the event of any dispute or discrepancy, the records of the Holder shall be controlling and determinative in the absence of manifest error.

Conversion. (Aa) This Debenture shall be convertible into shares of Common Stock at the option of the HolderUnless this Note has earlier been paid in full or converted pursuant to its terms, in whole or in part if at any time and from time to time, after the Original Issue Date (subject prior to the limitations Maturity Date the Company has closed an Equity Financing, the Holder may elect to convert some or all of the principal and accrued interest due on this Note into fully paid and nonassessable shares of capital stock of the Company (i.e. common or preferred stock or any other equity convertible into common or preferred stock) sold to investors in the Equity Financing. Upon such election to convert in connection with an Equity Financing, the Holder shall be entitled to receive in respect of such conversion set forth in of this Note pursuant to this Section 4(a)(ii6(a) hereof). The a number of shares of Common Stock issuable upon a conversion hereunder shall be determined by adding capital stock of the sum Company sold to investors in the Equity Financing equal to the quotient of (i) the quotient obtained by dividing (x) the outstanding principal amount of this Debenture to be converted and (y) the Conversion Price (as defined herein), and (iiA) the amount equal of principal and accrued interest that Holder desires to (I) the product of (x) the outstanding principal amount of convert pursuant to this Debenture to be converted and (y) the product of (1) the quotient obtained by dividing .12 by 360 and (2) the number of days for which such principal amount was outstandingSection 6(a), divided by (IIB) the Conversion Price on the Conversion Date, provided, that if lowest price at which the Company shall have timely elected has sold shares of capital stock to pay investors in the interest due on a Conversion Date in cash pursuant Equity Financing, rounded down to the terms hereofnearest whole share. (b) As soon as practicable after conversion of this Note, subsection (ii) shall not the Company, at its expense, will cause to be used issued in the calculation name of and delivered to the Holder, a certificate or certificates representing the number of fully paid and nonassessable shares of Common Stock issuable upon a conversion hereunder. (B) Notwithstanding anything the securities to the contrary contained herein, if on any Conversion Date: (1) the number of shares of Common Stock at the time authorized, unissued and unreserved for all purposes, or held as treasury stock, is insufficient to pay interest hereunder in shares of Common Stock; (2) the Underlying Shares issuable for such conversion (including any interest payable in shares) (x) are not registered for resale pursuant to an effective Underlying Shares Registration Statement and (y) may not be sold without volume restrictions pursuant to Rule 144(k) promulgated under the Securities Act (as defined in Section 6); (3) the Common Stock is not listed or quoted for trading on the OTC or on a Subsequent Market; (4) the Company has failed to timely satisfy its conversion obligations hereunder; or (5) the issuance of such shares of Common Stock would result in a violation of Sections 4(a)(ii), then, the Company may not pay interest in kind and must pay interest in cash by delivering, within three Trading Days of each applicable Conversion Date, an amount in cash equal to the product of (a) the outstanding principal amount of the Debentures to be converted on such Conversion Date and (b) the product of (x) the quotient obtained by dividing .12 by 360 and (y) the number of days for which such principal amount was outstanding. (C) This Debenture shall be convertible into shares of Common Stock at the option of the Holder, in whole or in part at any time and from time to time, after the Original Issue Date (subject to the limitations on conversion set forth in Section 4(a)(ii) hereof). The Holder shall effect conversions by delivering to the Company a completed notice substantially in the form attached hereto as Exhibit A (a "Conversion Notice"). The Conversion Notice shall set forth the remaining principal amount of this Debenture and all accrued and unpaid interest thereon subsequent to the conversion at issue. The date on which a Conversion Notice is delivered is the "Conversion Date." Unless the Holder is converting the entire principal amount outstanding under this Debenture, the Holder is not be required to physically surrender this Debenture to the Company in order to effect conversions. Subject to Section 4(b), each Conversion Notice, once given, shall be irrevocable. Conversions hereunder shall have the effect of lowering the outstanding principal amount of this Debenture plus all accrued and unpaid interest thereon in an amount equal to the applicable conversion, which shall be evidenced by notations made in the Conversion Notice. The Holder and the Company shall maintain records showing the principal amount converted and the date of such conversions. In the event of any dispute or discrepancy, the records of the Holder shall be controlling and determinative entitled on such conversion. No fractional shares will be issued on conversion of this Note. If the Holder would otherwise be entitled to a fractional share, the Holder shall receive in lieu thereof a cash payment equal to the price per share of the equity security issued to the Holder in the absence transaction, multiplied by the fraction of manifest errora share the Holder would otherwise be entitled to receive.

Conversion. (Aa) This Debenture Subject to the provisions of this Article III and of Article I, at the Effective Time, by virtue of the Merger and without any action on the part of the holders thereof, the shares of each of Acquisition and MDJB shall be convertible into converted as follows: (i) Each of the shares of capital stock of Acquisition issued and outstanding immediately prior to the Effective Time shall remain outstanding; (ii) Subject to the provisions of Section 3.3, each share of MDJB Common Stock, no par value per share (collectively, the "Shares") issued and outstanding immediately prior to the Effective Time shall be converted into the right to receive the Per Share Stock Consideration; and (iii) Each outstanding share of MDJB Common Stock at the option as to which a written notice of election to dissent is filed in accordance with Title 7-113 of the Holder, in whole CBCA at or in part at any time and from time to time, after the Original Issue Date (subject prior to the limitations on conversion Stockholders' Meeting and not withdrawn at or prior to the Stockholders' Meeting and which is not voted in favor of the Merger shall not be converted into or represent a right to receive ▇▇▇▇▇▇▇ Common Stock hereunder unless and until the holder shall have failed to perfect, or shall have effectively withdrawn or lost his or her right to appraisal of and payment for his or her MDJB Common Stock under such Title, at which time his or her shares shall be converted into ▇▇▇▇▇▇▇ Common Stock as set forth in Section 4(a)(ii3.1(a) hereof(ii). All such shares of MDJB Common Stock as to which such a written demand for appraisal is so filed and not withdrawn at or prior to the time of such vote and which are not voted in favor of the Merger are herein called "Dissenting Stock." MDJB shall give ▇▇▇▇▇▇▇ prompt notice upon receipt by MDJB of any written demands for appraisal rights or withdrawal of such demands, and MDJB shall give ▇▇▇▇▇▇▇ the opportunity to direct all negotiations and proceedings with respect to such demands. MDJB shall not voluntarily make any payment with respect to any demands for appraisal rights and shall not, except with the prior written consent of ▇▇▇▇▇▇▇, settle or offer to settle any such demands. Each holder of MDJB Common Stock who becomes entitled, pursuant to provisions of said Title 7-113, to payment for his or her shares of MDJB Common Stock under the provisions of said title shall receive the fair market value (as determined pursuant to Title 7-113) for each share of Dissenting Stock in payment therefor from ▇▇▇▇▇▇▇ and such shares of MDJB Common Stock shall be canceled. (b) The number calculations of the computations required by this Article III shall be prepared by ▇▇▇▇▇▇▇ prior to the Closing date and shall be set forth in a statement furnished to MDJB not later than one day prior to Closing showing in reasonable detail the manner of calculation. (c) Each of the shares of MDJB capital stock held by ▇▇▇▇▇▇▇ or any of its wholly owned Subsidiaries or MDJB or any of its wholly owned Subsidiaries shall be canceled and retired at the Effective Time and no consideration shall be issued in exchange therefor. (d) Subject to the terms of Section 3.2 hereof, each holder of shares of MDJB Common Stock issuable upon a conversion hereunder shall be determined by adding the sum of (i) the quotient obtained by dividing (x) the outstanding principal amount of this Debenture to be converted and (y) the Conversion Price (as defined herein), and (ii) the amount equal to (I) the product of (x) the outstanding principal amount of this Debenture to be converted and (y) the product of (1) the quotient obtained by dividing .12 by 360 and (2) the number of days for which such principal amount was outstanding, divided by (II) the Conversion Price on the Conversion Date, provided, that if the Company shall have timely elected to pay the interest due on a Conversion Date in cash exchanged pursuant to the terms hereof, subsection Merger who would otherwise have been entitled to receive a fraction of a share of ▇▇▇▇▇▇▇ Common Stock (iiafter taking into account all certificates delivered by such holder) shall not be used in the calculation of the number of shares of Common Stock issuable upon a conversion hereunder. (B) Notwithstanding anything to the contrary contained herein, if on any Conversion Date: (1) the number of shares of Common Stock at the time authorized, unissued and unreserved for all purposes, or held as treasury stock, is insufficient to pay interest hereunder in shares of Common Stock; (2) the Underlying Shares issuable for such conversion (including any interest payable in shares) (x) are not registered for resale pursuant to an effective Underlying Shares Registration Statement and (y) may not be sold without volume restrictions pursuant to Rule 144(k) promulgated under the Securities Act (as defined in Section 6); (3) the Common Stock is not listed or quoted for trading on the OTC or on a Subsequent Market; (4) the Company has failed to timely satisfy its conversion obligations hereunder; or (5) the issuance of such shares of Common Stock would result in a violation of Sections 4(a)(ii), then, the Company may not pay interest in kind and must pay interest in cash by delivering, within three Trading Days of each applicable Conversion Date, an amount in cash equal to the product of (a) the outstanding principal amount of the Debentures to be converted on such Conversion Date and (b) the product of (x) the quotient obtained by dividing .12 by 360 and (y) the number of days for which such principal amount was outstanding. (C) This Debenture shall be convertible into shares of Common Stock at the option of the Holderreceive, in whole or in part at any time and from time to timelieu thereof, after the Original Issue Date cash (subject to the limitations on conversion set forth in Section 4(a)(iiwithout interest) hereof). The Holder shall effect conversions by delivering to the Company a completed notice substantially in the form attached hereto as Exhibit A (a "Conversion Notice"). The Conversion Notice shall set forth the remaining principal amount of this Debenture and all accrued and unpaid interest thereon subsequent to the conversion at issue. The date on which a Conversion Notice is delivered is the "Conversion Date." Unless the Holder is converting the entire principal amount outstanding under this Debenture, the Holder is not be required to physically surrender this Debenture to the Company in order to effect conversions. Subject to Section 4(b), each Conversion Notice, once given, shall be irrevocable. Conversions hereunder shall have the effect of lowering the outstanding principal amount of this Debenture plus all accrued and unpaid interest thereon in an amount equal to such fractional part of a share of ▇▇▇▇▇▇▇ Common Stock multiplied by the applicable conversionclosing price of the ▇▇▇▇▇▇▇ Common Stock on the trading day immediately preceding the Closing as reported by the American Stock Exchange (the "Fractional Share Consideration"). No such holder will be entitled to dividends, which voting rights or any other rights as a stockholder in respect of any fractional share. (e) At the Effective Time, the stock transfer books of MDJB shall be evidenced closed as to holders of MDJB Common Stock and no transfer of MDJB Common Stock by notations any such holder shall thereafter be made or recognized. If, after the Effective Time, certificates are properly presented in accordance with Article IV of this Agreement to ▇▇▇▇▇▇▇'▇ stock transfer agent or such other agent as the parties may agree (the "Exchange Agent"), such certificates shall be canceled and, subject to the terms of Section 3.2 and Article 7A hereof, exchanged for certificates representing the number of whole shares of ▇▇▇▇▇▇▇ and a check representing the amount of cash for fractional shares, if any, into which the MDJB Common Stock represented thereby was converted in the Conversion Notice. The Holder and the Company shall maintain records showing the principal amount converted and the date of such conversions. In the event of any dispute or discrepancy, the records of the Holder shall be controlling and determinative in the absence of manifest errorMerger.

Conversion. Upon the consummation of the Company’s immediate subsequent financing (Athe “New Financing”), the Principal of this Note then outstanding (including all accrued but unpaid Interest thereon) This Debenture shall automatically convert (an “Automatic Conversion”) into the same securities and contain the same terms offered in the New Financing except that the conversion price shall be convertible into equal to the lowest of: (i) the closing price of the Company’s shares of common stock (“Common Stock”) on the NYSE Amex (or on the principal trading market for the Common Stock if it is not then listed on the NYSE Amex) on the date on which the Company publicly announces the consummation of the transactions contemplated in the SPA, (ii) the closing price of the Company’s shares of Common Stock at on the option NYSE Amex (or on the principal trading market for the Common Stock if it is not then listed on the NYSE Amex) upon the Closing (as defined in the SPA) of the Holdertransactions contemplated in the SPA, or (iii) ninety percent (90%) of the price at which the securities are sold in whole or in part the New Financing. In addition, the Holder may, at any time and from time prior to timean Automatic Conversion, after convert the Original Issue Date Principal of this Note then outstanding (subject including all accrued but unpaid Interest thereon) (a “Voluntary Conversion” and, together with an Automatic Conversion, a “Conversion”) at a conversion equal to the limitations on conversion set forth in Section 4(a)(ii) hereof). The number of shares of Common Stock issuable upon a conversion hereunder shall be determined by adding the sum lower of (i) or (ii) above, by giving notice of a Voluntary Conversion to the quotient obtained by dividing (x) Company. Notwithstanding the outstanding principal amount of this Debenture foregoing, the Holder may not convert the Note pursuant to be converted and (y) a Voluntary Conversion prior to the Conversion Price Company obtaining Stockholder Approval (as defined herein), and (iibelow) without the amount equal to (I) the product of (x) the outstanding principal amount of this Debenture to be converted and (y) the product of (1) the quotient obtained by dividing .12 by 360 and (2) the number of days for which such principal amount was outstanding, divided by (II) the Conversion Price on the Conversion Date, provided, that if the Company shall have timely elected to pay the interest due on a Conversion Date in cash pursuant to the terms hereof, subsection (ii) shall not be used in the calculation prior written consent of the number of shares of Common Stock issuable upon a conversion hereunderMajority Noteholders. (B) Notwithstanding anything to the contrary contained herein, if on any Conversion Date: (1) the number of shares of Common Stock at the time authorized, unissued and unreserved for all purposes, or held as treasury stock, is insufficient to pay interest hereunder in shares of Common Stock; (2) the Underlying Shares issuable for such conversion (including any interest payable in shares) (x) are not registered for resale pursuant to an effective Underlying Shares Registration Statement and (y) may not be sold without volume restrictions pursuant to Rule 144(k) promulgated under the Securities Act (as defined in Section 6); (3) the Common Stock is not listed or quoted for trading on the OTC or on a Subsequent Market; (4) the Company has failed to timely satisfy its conversion obligations hereunder; or (5) the issuance of such shares of Common Stock would result in a violation of Sections 4(a)(ii), then, the Company may not pay interest in kind and must pay interest in cash by delivering, within three Trading Days of each applicable Conversion Date, an amount in cash equal to the product of (a) the outstanding principal amount of the Debentures to be converted on such Conversion Date and (b) the product of (x) the quotient obtained by dividing .12 by 360 and (y) the number of days for which such principal amount was outstanding. (C) This Debenture shall be convertible into shares of Common Stock at the option of the Holder, in whole or in part at any time and from time to time, after the Original Issue Date (subject to the limitations on conversion set forth in Section 4(a)(ii) hereof). The Holder shall effect conversions by delivering to the Company a completed notice substantially in the form attached hereto as Exhibit A (a "Conversion Notice"). The Conversion Notice shall set forth the remaining principal amount of this Debenture and all accrued and unpaid interest thereon subsequent to the conversion at issue. The date on which a Conversion Notice is delivered is the "Conversion Date." Unless the Holder is converting the entire principal amount outstanding under this Debenture, the Holder is not be required to physically surrender this Debenture to the Company in order to effect conversions. Subject to Section 4(b), each Conversion Notice, once given, shall be irrevocable. Conversions hereunder shall have the effect of lowering the outstanding principal amount of this Debenture plus all accrued and unpaid interest thereon in an amount equal to the applicable conversion, which shall be evidenced by notations made in the Conversion Notice. The Holder and the Company shall maintain records showing the principal amount converted and the date of such conversions. In the event of any dispute or discrepancy, the records of the Holder shall be controlling and determinative in the absence of manifest error.

Conversion. (Aa) This Debenture Subject to and upon compliance with the provisions of this Section 4, and subject to the Corporation's right to redeem shares of Series C surrendered for conversion pursuant to Section 3(h) hereof, on or after January 10, 1999, the holder of any shares of this Series C shall be convertible have the right, at its option, to convert the shares into a number of fully paid and nonassessable shares of Common Stock at (calculated as to each conversion to the option nearest 1/100th of a share) equal to $_____ for each share surrendered for conversion divided by the Conversion Price (as defined in paragraph (d) of this Section 4 below) by surrendering the shares to be converted, in the manner provided in paragraph (b) of this Section 4 below; PROVIDED HOWEVER, that if the Corporation shall have called some or all of the Holdershares of this Series C for redemption, such right shall terminate on the close of business on the third business day next preceding the date fixed for redemption unless the Corporation has defaulted in whole making or in part at any time providing for the payment due on the date fixed for redemption. Anything herein to the contrary notwithstanding, the shares of this Series C shall become immediately convertible under the circumstances, and from time to time, after the Original Issue Date (subject to the limitations on conversion terms and conditions, set forth in paragraph (i) of this Section 4(a)(ii4. (1) hereofIn order to exercise the conversion privilege, the holder of each share of this Series C to be converted shall surrender the certificate representing such share to the Conversion Agent for this Series C appointed for such purpose by the Corporation (the "Conversion Agent"), or, if no Conversion Agent has been appointed or if the holder has not received notice of such appointment, then to the Corporation, with the Notice of Election to Convert on the back of said certificate duly completed and signed, together with funds equal to the Dividend Amount, if any, required to be paid under paragraph (b)(2) of this Section 4 below, at the principal office of the Conversion Agent or the Corporation, as the case may be. Unless the shares issuable on conversion are to be issued in the same name as the name in which the shares of this Series C are registered, each share surrendered for conversion shall be accompanied by instruments of transfer, in form satisfactory to the Corporation, duly executed by the holder or its duly authorized attorney and by funds in an amount sufficient to pay any transfer or similar tax. (2) The holders of shares of this Series C at the close of business on a Dividend Record Date shall be entitled to receive the dividend payable on those shares on the corresponding Dividend Payment Date notwithstanding the conversion of the shares after the Dividend Record Date or the Corporation's default in payment of the dividend due on the Dividend Payment Date. However, shares of this Series C surrendered for conversion during the period between the close of business on any Dividend Record Date and the opening of business on the corresponding Dividend Payment Date (except shares called for redemption on a date fixed for redemption during that period) must be accompanied by payment of an amount equal to the dividend payable on the shares on the Dividend Payment Date (the "Dividend Amount"). The dividend with respect to a share of this Series C called for redemption during the period from the close of business on the Record Date to the opening of business on the corresponding Dividend Payment Date will be payable upon such Dividend Payment Date, and the holder converting such share of this Series C need not include a payment of such dividend amount upon surrender of such share of this Series C. The holders of shares of this Series C on a Dividend Record Date who (or whose transferees) convert any of those shares on or after the corresponding Dividend Payment Date will receive the dividend payable by the Corporation on those shares of this Series C on the Dividend Payment Date, and need not include payment of the Dividend Amount upon surrender of those shares for conversion. Except as provided above, the Corporation shall make no payment or adjustment for accrued and unpaid dividends on shares of this Series C, whether or not in arrears, on conversion of those shares, or for dividends on the shares of Common Stock issued upon the conversion. (3) As promptly as practicable after the surrender by a holder of the certificates for shares of this Series C in accordance with this paragraph (b), and subject to the Corporation's right to redeem all or a part of such Series C shares as provided in Section 3(h) hereof, the Corporation shall issue and shall deliver at the office of the Conversion Agent to the holder, or on its written order, a certificate or certificates for the number of full shares of Common Stock issuable upon the conversion of those shares in accordance with the provisions of this paragraph (b)(3), and any fractional interest in respect of a share of Common Stock arising upon the conversion hereunder shall be determined by adding the sum of settled as provided in paragraph (ic) the quotient obtained by dividing (x) the outstanding principal amount of this Debenture Section 4 below. (4) Unless the Corporation shall have exercised its right to redeem the shares of Series C surrendered for conversion pursuant to this Section 4, each conversion shall be deemed to have been effected as of the close of business on the 10th business day after the date on which all of the conditions specified in paragraph (b)(1) of this Section 4 above shall have been satisfied, and, the person or persons in whose name or names any certificate or certificates for shares of Common Stock shall be issuable upon such conversion shall be deemed to have become the holder or holders of record of the shares of Common Stock represented by those certificates at such time on such date and such conversion shall be at the Conversion Price in effect at such time on such date, unless the stock transfer books of the Corporation shall be closed on that date, in which event such person or persons shall be deemed to have become such holder or holders of record at the close of business on the next succeeding day on which such stock transfer books are open, but such conversion shall be at the Conversion Price in effect on the 10th business day after the date upon which all of the conditions specified in paragraph (b)(1) of this Section 4 above shall have been satisfied. All shares of Common Stock delivered upon conversion of this Series C will upon delivery be duly and validly issued and fully paid and nonassessable, free of all liens and charges and not subject to any preemptive rights. Upon the surrender of certificates representing shares of this Series C to be converted and the failure of the Corporation to provide to the holder thereof a notice of redemption pursuant to paragraph (yh) of Section 3 hereof prior to the Conversion Price 10th business day after the date on which all of the conditions specified in paragraph (b)(1) of this Section 4 shall have been satisfied, the shares shall no longer be deemed to be outstanding and all rights of a holder with respect to the shares surrendered for conversion shall immediately terminate except the right to receive the Common Stock or other securities, cash or other assets as herein provided (including without limitation any dividend payable as specified in paragraph (b)(1) of this Section 4 above). (c) No fractional shares or securities representing fractional shares of Common Stock shall be issued upon conversion of this Series C. Any fractional interest in a share of Common Stock resulting from conversion of a share of this Series C shall be paid in cash (computed to the nearest cent) based on the price (as defined herein), and in paragraph (iid)(4) the amount equal to (I) the product of (x) the outstanding principal amount of this Debenture to Section 4 below) of the Common Stock on the Trading Day (as defined in paragraph (d)(4) below) next preceding the day of conversion. If more than one share shall be converted and (y) surrendered for conversion at one time by the product of (1) the quotient obtained by dividing .12 by 360 and (2) same holder, the number of days for which such principal amount was outstanding, divided by (II) the Conversion Price on the Conversion Date, provided, that if the Company shall have timely elected to pay the interest due on a Conversion Date in cash pursuant to the terms hereof, subsection (ii) shall not be used in the calculation of the number of whole shares of Common Stock issuable upon a the conversion hereunder. (B) Notwithstanding anything to shall be computed on the contrary contained herein, if on any Conversion Date: (1) basis of the number of shares of Common Stock at the time authorized, unissued and unreserved for all purposes, or held as treasury stock, is insufficient to pay interest hereunder in shares of Common Stock; (2) the Underlying Shares issuable for such conversion (including any interest payable in shares) (x) are not registered for resale pursuant to an effective Underlying Shares Registration Statement and (y) may not be sold without volume restrictions pursuant to Rule 144(k) promulgated under the Securities Act aggregate Liquidation Preference (as such term is defined in Section 6); (3) the Common Stock is not listed or quoted for trading on the OTC or on a Subsequent Market; (4) the Company has failed to timely satisfy its conversion obligations hereunder; or (5) the issuance of such shares of Common Stock would result in a violation of Sections 4(a)(ii), then, the Company may not pay interest in kind and must pay interest in cash by delivering, within three Trading Days of each applicable Conversion Date, an amount in cash equal to the product of paragraph (a) the outstanding principal amount of Section 7 below) of the Debentures to be converted on such Conversion Date and (b) the product of (x) the quotient obtained by dividing .12 by 360 and (y) the number of days for which such principal amount was outstanding. (C) This Debenture shall be convertible into shares of Common Stock at the option of the Holder, in whole or in part at any time and from time to time, after the Original Issue Date (subject to the limitations on conversion set forth in Section 4(a)(ii) hereof). The Holder shall effect conversions by delivering to the Company a completed notice substantially in the form attached hereto as Exhibit A (a "Conversion Notice"). The Conversion Notice shall set forth the remaining principal amount of this Debenture and all accrued and unpaid interest thereon subsequent to the conversion at issue. The date on which a Conversion Notice is delivered is the "Conversion DateSeries C so surrendered." Unless the Holder is converting the entire principal amount outstanding under this Debenture, the Holder is not be required to physically surrender this Debenture to the Company in order to effect conversions. Subject to Section 4(b), each Conversion Notice, once given, shall be irrevocable. Conversions hereunder shall have the effect of lowering the outstanding principal amount of this Debenture plus all accrued and unpaid interest thereon in an amount equal to the applicable conversion, which shall be evidenced by notations made in the Conversion Notice. The Holder and the Company shall maintain records showing the principal amount converted and the date of such conversions. In the event of any dispute or discrepancy, the records of the Holder shall be controlling and determinative in the absence of manifest error.

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

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

Conversion. Holders of Series D Preferred Units shall have the right to convert all or a portion of such units into Common Units, as follows: (Aa) This Debenture Subject to and upon compliance with the provisions of this Section 6, a holder of Series D Preferred Units shall be convertible into shares of Common Stock have the right, at the option of the Holderhis or her option, in whole or in part at any time and from time to time, after the Original Issue Date (subject earliest to the limitations on conversion set forth in Section 4(a)(ii) hereof). The number of shares of Common Stock issuable upon a conversion hereunder shall be determined by adding the sum occur of (i) the quotient sixty first day after such holder provides the Partnership with written notice of its intent to convert Series D Preferred Units, (ii) the first day on which a Change of Control occurs, (iii) the occurrence of a REIT Termination Event, or (iv) such date as determined by the Partnership (the "Conversion Date"), to convert all or any portion of such units (or such units as determined by the General Partner if pursuant to clause (iv) above) into the number of Common Units obtained by dividing the aggregate Liquidation Preference of such units (xinclusive of accrued but unpaid distributions) the outstanding principal amount of this Debenture to be converted and (y) by the Conversion Price (as defined hereinin effect at the time and on the date provided for in the last paragraph of paragraph (b) of this Section 6), such conversion to be made in the manner provided in paragraph (b) of this Section 6; PROVIDED, HOWEVER, that the right to convert units called for redemption pursuant to Section 5 shall terminate at the close of business on the fifth Business Day prior to the Call Date fixed for such redemption, unless the Partnership shall default in making payment of the cash payable upon such redemption under Section 5. (b) In order to exercise the conversion right, the holder of each Series D Preferred Unit to be converted shall irrevocably instruct the General Partner in a writing duly executed by the holder or the holder's duly authorized attorney, with signature guaranteed, to convert such units into Common Units. The General Partner, in its sole discretion, may require such holder to provide additional instruments of transfer as its deems necessary or desirable to effect the conversion. Each instruction shall be accompanied by an amount sufficient to pay any transfer or similar tax (or evidence reasonably satisfactory to the General Partner demonstrating that such taxes have been paid). Each conversion shall be deemed to have been effected immediately prior to the close of business on the date on which such instruction and such notice shall have been received by the General Partner as aforesaid (and if applicable, payment of an amount equal to the distribution payable on such units shall have been received by the General Partner as described above) and such conversion shall be at the Conversion Price in effect at such time on such date. Holders of Series D Preferred Units at the close of business on a distribution payment record date shall be entitled to receive the distribution payable on such units on the corresponding Distribution Payment Date notwithstanding the conversion thereof following such distribution payment record date and prior to such Distribution Payment Date. However, the holder of Series D Preferred Units converted during the period between the close of business on any distribution payment record date and the opening of business on the corresponding Distribution Payment Date (except Series D Preferred Units converted after the issuance of notice of redemption with respect to a Call Date during such period, such Series D Preferred Units being entitled to such distribution on the Distribution Payment Date) must pay to the Partnership an amount equal to the distribution payable on such units on such Distribution Payment Date. A holder of Series D Preferred Units on a distribution payment record date who converts Series D Preferred Units into Common Units on the corresponding Distribution Payment Date will receive the distribution payable by the Partnership on such Series D Preferred Units on such date, and the converting holder need not pay the amount of such distribution upon conversion. Except as provided above, the Partnership shall make no payment or allowance for unpaid distributions, whether or not in arrears, on converted units or for distributions on the Common Units issued upon such conversion. (c) In lieu of any fractional interest in a Common Unit that would otherwise be deliverable upon the conversion of a Series D Preferred Share, the General Partner, in its sole discretion, may cause the Partnership to pay to the holder of such fractional unit an amount in cash based upon the Fair Market Value of the Common Units on the Trading Day immediately preceding the date of conversion. If more than one unit shall be surrendered for conversion at one time by the same holder, the number of full Common Units issuable upon conversion thereof shall be computed on the basis of the aggregate number of Series D Preferred Units so surrendered. (d) The Conversion Price shall be adjusted from time to time as follows: (i) If the Partnership shall after the Issue Date (A) make a distribution on its Partnership Units in Common Units, (B) subdivide its outstanding Common Units into a greater number of units, (C) combine its outstanding Common Units into a smaller number of units or (D) issue any Partnership Units by reclassification of its Common Units, the Conversion Price in effect at the opening of business on the day following the date fixed for the determination of unitholders entitled to receive such distribution or distribution or at the opening of business on the Business Day next following the day on which such subdivision, combination or reclassification becomes effective, as the case may be, shall be adjusted so that the holder of any Series D Preferred Units thereafter surrendered for conversion shall be entitled to receive the number of Common Units that such holder would have owned or have been entitled to receive after the happening of any of the events described above as if such Series D Preferred Units had been converted immediately prior to the record date in the case of a distribution or distribution or the effective date in the case of a subdivision, combination or reclassification. An adjustment made pursuant to this subparagraph (i) shall become effective immediately after the opening of business on the Business Day next following the record date (except as provided in paragraph (h) below) in the case of a distribution and shall become effective immediately after the opening of business on the Business Day next following the effective date in the case of a subdivision, combination or reclassification. (ii) If the amount Partnership shall issue after the Issue Date rights, options or warrants to all holders of Common Units entitling them (for a period expiring within 45 days after the record date mentioned below) to subscribe for or purchase Common Units at a price per share less than 95% (100% if a stand-by underwriter is used and charges the Partnership a commission) of the Fair Market Value per Common Unit on the record date for the determination of unitholders entitled to receive such rights, options or warrants, then the Conversion Price in effect at the opening of business on the Business Day next following such record date shall be adjusted to equal to the price determined by multiplying (IA) the product Conversion Price in effect immediately prior to the opening of business on the Business Day next following the date fixed for such determination by (B) a fraction, the numerator of which shall be the sum of (x) the outstanding principal amount of this Debenture to be converted and (y) the product of (1) the quotient obtained by dividing .12 by 360 and (2) the number of days for which such principal amount was outstanding, divided by (II) the Conversion Price Common Units outstanding on the Conversion Date, provided, that if close of business on the Company shall have timely elected to pay the interest due on a Conversion Date in cash pursuant to the terms hereof, subsection (ii) shall not be used in the calculation of the number of shares of Common Stock issuable upon a conversion hereunder. (B) Notwithstanding anything to the contrary contained herein, if on any Conversion Date: (1) the number of shares of Common Stock at the time authorized, unissued and unreserved for all purposes, or held as treasury stock, is insufficient to pay interest hereunder in shares of Common Stock; (2) the Underlying Shares issuable date fixed for such conversion (including any interest payable in shares) (x) are not registered for resale pursuant to an effective Underlying Shares Registration Statement and (y) may not be sold without volume restrictions pursuant to Rule 144(k) promulgated under the Securities Act (as defined in Section 6); (3) the Common Stock is not listed or quoted for trading on the OTC or on a Subsequent Market; (4) the Company has failed to timely satisfy its conversion obligations hereunder; or (5) the issuance of such shares of Common Stock would result in a violation of Sections 4(a)(ii), then, the Company may not pay interest in kind and must pay interest in cash by delivering, within three Trading Days of each applicable Conversion Date, an amount in cash equal to the product of (a) the outstanding principal amount of the Debentures to be converted on such Conversion Date and (b) the product of (x) the quotient obtained by dividing .12 by 360 determination and (y) the number of days shares that the aggregate proceeds to the Partnership from the exercise of such rights, options or warrants for Common Units would purchase at 95% of such Fair Market Value (or 100% in the case of a stand-by underwriting), and the denominator of which shall be the sum of (x) the number of Common Units outstanding on the close of business on the date fixed for such principal amount was outstandingdetermination and (y) the number of additional Common Units offered for subscription or purchase pursuant to such rights, options or warrants. Such adjustment shall become effective immediately after the opening of business on the day next following such record date (except as provided in paragraph (h) below). In determining whether any rights, options or warrants entitle the holders of Common Units to subscribe for or purchase Common Units at less than 95% of such Fair Market Value (or 100% in the case of a stand-by underwriting), there shall be taken into account any consideration received by the Partnership upon issuance and upon exercise of such rights, options or warrants, the value of such consideration, if other than cash, to be determined by the General Partner whose determination shall be conclusive. (iii) If the Partnership shall distribute to all holders of its Common Units any securities of the Partnership (other than Common Units) or evidence of its indebtedness or assets (excluding cumulative cash distributions or distributions paid with respect to the Common Units after December 31, 2000 which are not in excess of the following: the sum of (A) the Partnership's cumulative undistributed Funds from Operations at December 31, 2000, plus (B) the cumulative amount of Funds from Operations, as determined by the General Partner, after December 31, 2000, minus (C) This Debenture the cumulative amount of distributions accrued or paid in respect of the Series D Preferred Units or any other class or series of preferred units of the Partnership after the Issue Date or rights, options or warrants to subscribe for or purchase any of its securities (excluding those rights, options and warrants issued to all holders of Common Units entitling them for a period expiring within 45 days after the record date referred to in subparagraph (ii) above to subscribe for or purchase Common Units, which rights and warrants are referred to in and treated under subparagraph (ii) above) (any of the foregoing being hereinafter in this subparagraph (iii) collectively called the "SECURITIES" and individually a "SECURITY"), then in each such case the Conversion Price shall be convertible into shares adjusted so that it shall equal the price determined by multiplying (x) the Conversion Price in effect immediately prior to the close of business on the date fixed for the determination of unitholders entitled to receive such distribution by (y) a fraction, the numerator of which shall be the Fair Market Value per Common Stock Unit on the record date mentioned below less the then fair market value (as determined by the General Partner, whose determination shall be conclusive) of the portion of the Securities or assets or evidences of indebtedness so distributed or of such rights, options or warrants applicable to one Common Unit, and the denominator of which shall be the Fair Market Value per Common Unit on the record date mentioned below. Such adjustment shall become effective immediately at the option opening of business on the Business Day next following (except as provided in paragraph (h) below) the record date for the determination of unitholders entitled to receive such distribution. For the purposes of this subparagraph (iii), the distribution of a Security, which is distributed not only to the holders of the HolderCommon Units on the date fixed for the determination of unitholders entitled to such distribution of such Security, in whole or in part at any time and from time but also is distributed with each Common Unit delivered to timea Person converting a Series D Preferred Unit after such determination date, after shall not require an adjustment of the Original Issue Date Conversion Price pursuant to this subparagraph (subject to iii); PROVIDED that on the limitations on conversion set forth in Section 4(a)(ii) hereof). The Holder shall effect conversions by delivering to the Company a completed notice substantially in the form attached hereto as Exhibit A (a "Conversion Notice"). The Conversion Notice shall set forth the remaining principal amount of this Debenture and all accrued and unpaid interest thereon subsequent to the conversion at issue. The date date, if any, on which a person converting a Series D Preferred Unit would no longer be entitled to receive such Security with a Common Unit (other than as a result of the termination of all such Securities), a distribution of such Securities shall be deemed to have occurred and the Conversion Notice is delivered is Price shall be adjusted as provided in this subparagraph (iii) (and such day shall be deemed to be tithe date fixed for the determination of the unitholders entitled to receive such distribution" and "the record date" within the meaning of the two preceding sentences). (iv) In case a tender or exchange offer (which term shall not include open market repurchases by the Partnership) made by the Partnership or any subsidiary of the Partnership for all or any portion of the Common Units shall expire and such tender or exchange offer shall involve the payment by the Partnership or such subsidiary of consideration per Common Unit having a fair market value (as determined in good faith by the General Partner, whose determination shall be conclusive), at the last time (the "Conversion Date." Unless EXPIRATION TIME") tenders or exchanges may be made pursuant to such tender or exchange offer, that exceeds the Holder is converting Current Market Price per Common Unit on the entire principal amount outstanding under this DebentureTrading Day next succeeding the Expiration Time, the Holder is Conversion Price shall be reduced so that the same shall equal the price determined by multiplying the Conversion Price in effect immediately prior to the effectiveness of the Conversion Price reduction contemplated by this subparagraph, by a fraction of which the numerator shall be the number of Common Units outstanding (including any tendered or exchanged units) at the Expiration Time, multiplied by the Current Market Price per Common Unit on the Trading Day next succeeding the Expiration Time, and the denominator shall be the sum of (A) the fair market value (determined as aforesaid) of the aggregate consideration payable to unitholders based upon the acceptance (up to any maximum specified in the terms of the tender or exchange offer) of all shares validly tendered or exchanged and not withdrawn as of the Expiration Time (the shares deemed so accepted, up to any maximum, being referred to as the "PURCHASED UNITS") and (B) the product of the number of Common Units outstanding (less any Purchased Units) at the Expiration Time and the Current Market Price per Common Unit on the Trading Day next succeeding the Expiration Time, such reduction to become effective immediately prior to the opening of business on the day following the Expiration Time. (v) No adjustment in the Conversion Price shall be required unless such adjustment would require a cumulative increase or decrease of at least 1 % in such price; PROVIDED, HOWEVER, that any adjustments that by reason of this subparagraph (v) are not required to be made shall be carried forward and taken into account in any subsequent adjustment until made; and PROVIDED, FURTHER, that any adjustment shall be required and made in accordance with the provisions of this Section 6 (other than this subparagraph (v)) not later than such time as may be required in order to preserve the tax-free nature of a distribution to the holders of Common Units: Notwithstanding any other provisions of this Section 6, the Partnership shall not be required to physically surrender make any adjustment of the Conversion Price for the issuance of any Common Units pursuant to any plan providing for the reinvestment of distributions or interest payable on securities of the Partnership and the investment of additional optional amounts in Common Units under such plan. All calculations under this Debenture Section 6 shall be made to the Company in order nearest cent (with $.005 being rounded upward) or to effect conversions. Subject to Section 4(bthe nearest one-tenth of a unit (with .05 of a unit being rounded upward), each Conversion Noticeas the case may be. Anything in this paragraph (d) to the contrary notwithstanding, once given, the Partnership shall be irrevocable. Conversions hereunder shall have the effect of lowering the outstanding principal amount of this Debenture plus all accrued and unpaid interest thereon in an amount equal entitled, to the applicable conversionextent permitted by law, which shall be evidenced by notations made to make such reductions in the Conversion Notice. The Holder and Price, in addition to those required by this paragraph (d), as it in its discretion shall determine to be advisable in order that any share distributions, subdivision of shares, reclassification or combination of shares, distribution of rights or warrants to purchase shares or securities, or distribution of other assets (other than cash distributions) hereafter made by the Company Partnership to its partners shall maintain records showing not be taxable. (e) If the principal amount converted and the date Partnership shall be a party to any transaction (including without limitation a merger, consolidation, self tender offer for all or substantially all of such conversions. In the event its Common Units, sale of any dispute all or discrepancy, the records substantially all of the Holder shall be controlling Partnership's assets or recapitalization of the Common Units and determinative in excluding any transaction as to which subparagraph (d)(i) of this Section 6 applies) (each of the absence of manifest error.foregoing being referred to herein as a "TRANS

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

Conversion. Holders of shares of Series C Preferred Stock shall have the right to convert all or a portion of such shares into shares of Common Stock as follows: (a) Subject to and upon compliance with the provisions of this Section (7), a holder of shares of Series C Preferred Stock shall have the right, at his, her or its option, at any time after the eighteen month anniversary of the Issue Date, to convert such shares, in whole or in part, into the number of fully paid and nonassessable shares of Common Stock (calculated as to each conversion to the nearest 1/100th of a share) obtained by dividing the aggregate liquidation preference of such shares by the Conversion Price and by surrender of such shares so to be converted by the holder thereof, such surrender to be made in the manner provided in paragraph (b) of this Section (7); provided, however, that the right to convert shares called for redemption pursuant to Section (5) shall terminate at the close of business on the date fixed for such redemption, unless the Corporation shall default in making prompt payment of the amount payable upon such redemption. Any share of Series C Preferred Stock may be converted, at the request of its holder, in part into Common Stock. If a part of a share of Series C Preferred Stock is converted, then the Corporation will convert such share into the requested shares of Common Stock (subject to paragraph (c) of this Section (7)) and issue a fractional share of Series C Preferred Stock evidencing the remaining interest of such holder. (b) In order to exercise the conversion right, the holder of each share of Series C Preferred Stock to be converted shall surrender the certificate representing such share, duly endorsed or assigned to the Corporation or in blank, at the office of the Transfer Agent or, if no Transfer Agent has been appointed by the Corporation, at the principal office of the Corporation, accompanied by written notice to the Corporation that the holder thereof elects to convert its shares of Series C Preferred Stock or a specified portion thereof. Unless the shares issuable on conversion are to be issued in the same name as the name in which such share of Series C Preferred Stock is registered, each share surrendered for conversion shall be accompanied by instruments of transfer, in form satisfactory to the Corporation, duly executed by the holder or such holder's duly authorized attorney and an amount sufficient to pay any transfer or similar tax (or evidence reasonably satisfactory to the Corporation demonstrating that such taxes have been paid). Holders of shares of Series C Preferred Stock at the close of business on a dividend payment record date shall be entitled to receive the dividend payable on such shares (except that holders of shares called for redemption on a redemption date between such record date and the dividend payment date shall not be entitled to receive such dividend on such dividend payment date) on the corresponding dividend payment date notwithstanding the conversion thereof following such dividend payment record date and prior to such dividend payment date. As promptly as practicable after the surrender of certificates for shares of Series C Preferred Stock as aforesaid, the Corporation shall issue and shall deliver at such office to such holder, or on his, her or its written order, (i) a certificate or certificates for the number of full shares of Common Stock issuable upon the conversion of such shares in accordance with the provisions of this Section (7), (ii) if less than the full number of shares of Series C Preferred Stock evidenced by the surrendered certificates is being converted, a new certificate or certificates, of like tenor, for the number of shares evidenced by such surrendered certificates less the number of shares being converted, and (iii) any fractional interest in respect of a share of Common Stock arising upon such conversion shall be settled as provided in paragraph (c) of this Section (7). Each conversion shall be deemed to have been effected immediately prior to the close of business on the date on which the certificates for shares of Series C Preferred Stock shall have been surrendered and such notice received by the Corporation as aforesaid, and the person or persons in whose name or names any certificate or certificates for shares of Common Stock shall be issuable upon such conversion shall be deemed to have become the holder or holders of record of the shares represented thereby at such time on such date and such conversion shall be at the Conversion Price in effect at such time on such date, unless the stock transfer books of the Corporation shall be closed on that date, in which event such person or persons shall be deemed to have become such holder or holders of record at the close of business on the next succeeding day on which such stock transfer books are open, but such conversion shall be at the Conversion Price in effect on the date upon which such shares shall have been surrendered and such notice received by the Corporation. All shares of Common Stock delivered upon conversion of the Series C Preferred Stock shall upon delivery be duly and validly issued and fully paid and nonassessable. (c) No fractional shares or scrip representing fractions of shares of Common Stock shall be issued upon conversion of the Series C Preferred Stock. Instead of any fractional interest in a share of Common Stock which would otherwise be deliverable upon the conversion of a share of Series C Preferred Stock, the Corporation shall pay to the holder of such share an amount in cash (computed to the nearest cent) equal to such fraction of a share multiplied by the Current Market Price of one share of Common Stock on the Trading Day immediately preceding the date of conversion. If more than one share shall be surrendered for conversion at one time by the same holder, the number of full shares of Common Stock issuable upon conversion thereof shall be computed on the basis of the aggregate number of shares of Series C Preferred Stock so surrendered. (d) The Conversion Price shall be adjusted from time to time as follows: (i) In case the Corporation shall after the Issue Date (A) This Debenture pay a dividend or make a distribution on its Common Stock in shares of its Common Stock, (B) subdivide its outstanding Common Stock into a greater number of shares, (C) combine its outstanding Common Stock into a smaller number of shares or (D) issue any shares of capital stock by reclassification of its Common Stock, the Conversion Price in effect immediately prior thereto shall be adjusted so that the holder of any share of Series C Preferred Stock thereafter surrendered for conversion shall be entitled to receive the number of shares of Common Stock of the Corporation which such holder would have owned or have been entitled to receive after the happening of any of the events described above had such share of Series C Preferred Stock been converted immediately prior to the happening of such event or the record date therefor, whichever is earlier. An adjustment made pursuant to this subparagraph (i) shall become effective immediately after the close of business on the record date in the case of a dividend or distribution (except as provided in paragraph (h) below) and shall become effective immediately after the close of business on the record date in the case of a subdivision, combination or reclassification. (ii) In case the Corporation shall issue after the Issue Date (a) options, warrants or other rights to all holders of Common Stock as a class entitling them (for a period expiring within 180 days after the record date mentioned below) to subscribe for or purchase Common Stock at a price per share less than the Conversion Price at the record date for the determination of shareholders entitled to receive such options, warrants or other rights or (b) shares of Common Stock or securities exercisable for (including options, warrants or other rights other than those referred to in clause (a) above and subparagraph (iii) below) or exchangeable or convertible into shares of Common Stock at a price per share (or having an exercise, exchange or conversion price per share) less than the option then current Conversion Price (other than securities issued in a transaction in which a pro rata share of such securities have been reserved by the Holder, in whole or in part at any time and from time to time, after the Original Issue Date (subject Corporation for distribution to the limitations on conversion set forth holders of Series C Preferred Stock upon conversion), then in Section 4(a)(iieach such case the Conversion Price in effect immediately prior thereto shall be adjusted to equal the price determined by multiplying (I) hereof). The number the Conversion Price in effect immediately prior to the date of issuance of such options, warrants or other rights or shares of Common Stock issuable upon (or securities exercisable for or exchangeable or convertible into shares of Common Stock) by (II) a conversion hereunder fraction, the numerator of which shall be determined by adding the sum of (i) the quotient obtained by dividing (x) the outstanding principal amount of this Debenture to be converted and (y) the Conversion Price (as defined herein), and (ii) the amount equal to (I) the product of (x) the outstanding principal amount of this Debenture to be converted and (y) the product of (1) the quotient obtained by dividing .12 by 360 and (2) the number of days for which such principal amount was outstanding, divided by (II) the Conversion Price on the Conversion Date, provided, that if the Company shall have timely elected to pay the interest due on a Conversion Date in cash pursuant to the terms hereof, subsection (ii) shall not be used in the calculation of the number of shares of Common Stock issuable upon a conversion hereunder. (B) Notwithstanding anything to the contrary contained herein, if on any Conversion Date: (1A) the number of shares of Common Stock at outstanding on the time authorizeddate of issuance of such options, unissued and unreserved warrants or other rights or shares of Common Stock (or securities exercisable for all purposes, or held as treasury stock, is insufficient to pay interest hereunder in exchangeable or convertible into shares of Common Stock; (2) the Underlying Shares issuable for such conversion (including any interest payable in shares) (xwithout giving effect to any such issuance) are not registered for resale pursuant to an effective Underlying Shares Registration Statement and (yB), in the case of (a) may not be sold without volume restrictions pursuant to Rule 144(k) promulgated under above, the Securities Act (as defined in Section 6); (3) number of shares which the aggregate proceeds from the exercise of such options, warrants or other rights for Common Stock is not listed or quoted or, in the case of (b) above, the number of shares which the aggregate consideration receivable by the Corporation for trading on the OTC or on a Subsequent Market; (4) the Company has failed to timely satisfy its conversion obligations hereunder; or (5) the issuance total number of such shares of Common Stock (or securities exercisable for or exchangeable or convertible into shares of Common Stock) so issued would result purchase at the Conversion Price in a violation of Sections 4(a)(ii), then, the Company may not pay interest in kind and must pay interest in cash by delivering, within three Trading Days of each applicable Conversion Date, an amount in cash equal effect immediately prior to the product date of issuance, and the denominator of which shall be the sum of (a) the outstanding principal amount of the Debentures to be converted on such Conversion Date and (b) the product of (x) the quotient obtained by dividing .12 by 360 and (yA) the number of days shares of Common Stock outstanding on the date of such options, warrants or other rights or shares of Common Stock (or securities exercisable for or exchangeable or convertible into Common Stock) (without giving effect to any such issuance) and (B), in the case of clause (a) above, the number of additional shares of Common Stock offered for subscription or purchase or, in the case of clause (b) above, the number of shares of Common Stock so issued or into which such principal amount was outstanding. (C) This Debenture the exercisable, exchangeable or convertible securities may be exercised, exchanged or converted. Such adjustment shall be made successively whenever any such options, warrants or other rights or shares of Common Stock (or securities exercisable for or exchangeable or convertible into Common Stock) are issued, and shall become effective immediately after such record date or, in the case of the issuance of Common Stock, after the date of issuance thereof (or in the case of securities exercisable for or exchangeable or convertible into shares of Common Stock, the date on which holders may first exercise, exchange or convert the same in accordance with the respective terms thereof). In determining whether any options, warrants or other rights entitle the holders of Common Stock to subscribe for or purchase shares of Common Stock at less than the Conversion Price in effect immediately prior to the date of such issuance, and in determining the aggregate offering price of shares of Common Stock (or securities exercisable for or exchangeable or convertible into shares of Common Stock), there shall be taken into account any net consideration received or receivable by the Corporation upon issuance and upon exercise of such options, warrants or other rights or upon issuance of shares of Common Stock (or securities exercisable for or exchangeable or convertible into shares of Common Stock), the value of such consideration, if other than cash, to be determined by the Board of Directors in good faith or, if higher, the aggregate exercise, exchange or conversion price set forth in such exercisable, exchangeable or convertible securities. The aggregate consideration received by the Corporation in connection with the issuance of shares of Common Stock or of options, warrants or other rights or securities exercisable for or exchangeable or convertible into shares of Common Stock at the option of the Holder, in whole or in part at any time and from time to time, after the Original Issue Date (subject to the limitations on conversion set forth in Section 4(a)(ii) hereof). The Holder shall effect conversions by delivering to the Company a completed notice substantially in the form attached hereto as Exhibit A (a "Conversion Notice"). The Conversion Notice shall set forth the remaining principal amount of this Debenture and all accrued and unpaid interest thereon subsequent to the conversion at issue. The date on which a Conversion Notice is delivered is the "Conversion Date." Unless the Holder is converting the entire principal amount outstanding under this Debenture, the Holder is not be required to physically surrender this Debenture to the Company in order to effect conversions. Subject to Section 4(b), each Conversion Notice, once given, shall be irrevocable. Conversions hereunder shall have the effect of lowering the outstanding principal amount of this Debenture plus all accrued and unpaid interest thereon in an amount deemed to be equal to the applicable sum of the aggregate net offering price of all such securities plus the minimum aggregate amount, if any, payable upon the exercise of such options, warrants or other rights and conversion of any such exercisable, exchangeable or convertible securities into shares of Common Stock. (iii) In case the Corporation shall distribute to all holders of its Common Stock as a class any shares of capital stock of the Corporation (other than Common Stock) or evidences of its indebtedness or assets (other than a regular cash dividend that the Board of Directors determines, in good faith, can be maintained by the Corporation for at least four consecutive periods covering not less than one year and that the Board of Directors intends to maintain for at least four consecutive periods covering not less than one year, out of profits or surplus) or options, warrants or other rights to subscribe for or purchase any of its securities (excluding those referred to in subparagraph (ii)(a) above) (any of the foregoing being hereinafter in this subparagraph (iii) called the "Securities"), then in each such case, unless the Corporation elects to reserve shares or other units of such Securities for distribution to the holders of the Series C Preferred Stock upon the conversion of the shares of Series C Preferred Stock so that any such holder converting shares of Series C Preferred Stock will receive upon such conversion, in addition to the shares of the Common Stock to which such holder is entitled, the amount and kind of such Securities which such holder would have received if such holder had, immediately prior to the record date for the distribution of the Securities, converted his or her shares of Series C Preferred Stock into Common Stock (such election to be based upon a determination by the Board of Directors that such reservation will not materially adversely affect the interests of any holder of Series C Preferred Stock in any such reserved Securities), the Conversion Price shall be evidenced adjusted so that the same shall equal the price determined by notations made in multiplying (I) the Conversion Notice. The Holder and the Company shall maintain records showing the principal amount converted and Price in effect immediately prior to the date of such conversions. In the event of any dispute or discrepancydistribution by (II) a fraction, the records numerator of which shall be the Current Market Price per share of the Holder Common Stock on the record date mentioned below less the fair market value (as determined by the Board of Directors, whose determination shall, if made in good faith, be conclusive) of the portion of the capital stock or assets or evidences of indebtedness so distributed or of such rights or warrants applicable to one share of Common Stock, and the denominator of which shall be controlling and determinative the Current Market Price per share of the Common Stock. Such adjustment shall become effective immediately, except as provided in paragraph (h) below, after the record date for the determination of stockholders entitled to receive such distribution. (iv) No adjustment in the absence Conversion Price shall be required unless such adjustment would require an increase or decrease of manifest error.at least 1% in such price; provided, however, that any adjustments which by reason of this subparagraph (iv) are not required to be made shall be carried forward and taken into account in any subsequent adjustment; and provided further that any adjustment shall be required and made in accordance with the provisions of this Section (7) (other than this subparagraph (iv)) not later than such time as may be required in order to preserve the tax-free nature of a distribution to the holders of shares of Common Stock. All calculations under this Section (7) shall be made to the nearest cent (with $.005 being rounded upward) or to the nearest 1/100 of a share (with .005 of a share being rounded upward), as the case may be. Anything in this paragraph (d) to the contrary notwithstanding, the Corporation shall be entitled, to the extent permitted by law, to make such reductions in the Conversion Price, in addition to those required by this paragraph (d), as it in its discretion shall determine to be advisable in order that any stock dividends, subdivision of shares, distribution of rights or warrants to purchase stock or securities, or a distribution of other assets (other than cash divide

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