Common use of Payments of Principal Clause in Contracts

Payments of Principal. On the Maturity Date, the Company shall pay to the Holder an amount in cash representing all outstanding Principal, accrued and unpaid Interest. The “Maturity Date” shall be October [ ], 2014, except as may be extended at the option of the Holder (i) in the event that, and for so long as, an Event of Default (as defined in Section 4(a)) shall have occurred and be continuing on the Maturity Date (as may be extended pursuant to this Section 1) or any event shall have occurred and be continuing on the Maturity Date (as may be extended pursuant to this Section 1) that with the passage of time and the failure to cure would result in an Event of Default and (ii) through the date that is ten (10) Business Days after the consummation of a Change of Control in the event that a Change of Control is publicly announced or a Change of Control Notice (as defined in Section 5(b)) is delivered prior to the Maturity Date. Notwithstanding the above, at any time prior to the Maturity Date, the Company may notify Holders of its election to redeem all or part of the Bonds (a “Early Redemption Notice”) no more than 20 Business Days but not less than 5 Business Days prior to the proposed date of such redemption (the “Early Redemption Date”). On the Early Redemption Date, the Company shall redeem the principal amount of the Bonds specified in the Early Redemption Notice by paying in cash or by check to the Holder of this Bond as of the date of the Early Redemption Notice, an amount equal to (a) Principal amount of the Bonds being redeemed plus (b) the sum of any Make-Whole Amount and any accrued and unpaid Interest, in each case relating to portion of the Bond being redeemed (the “Early Redemption Price”). If the Company elects to redeem the Bonds in part (instead of in whole), then the Company shall pay to each Holder an amount equal to the product of (i) the Early Redemption Price multiplied by (ii) the fraction, the numerator of which is the outstanding principal amount of the Bond held by such Holder on the date of such Early Redemption Notice and the denominator of which is aggregate principal amount of Bonds held by all Holders as of date of such Early Redemption Notice.

Payments of Principal. (a) Provided there is no Default and the Holder has not elected either the Fundamental Change Option pursuant to Section 4 or the Dividend Recapitalization Option pursuant to Section 5, the entire unpaid Principal balance of the Note (together with any accrued and unpaid Interest thereon in respect of the period commencing on the last Interest Payment Date prior to the Maturity Date, and ending on the Maturity Date) will be due and payable on the Maturity Date. On the Maturity Date, the Company shall pay to the Holder an amount in cash representing all the entire outstanding Principal, Principal balance of the Note (together with any accrued and unpaid Interest) in (i) cash or (ii) at the election of the Holder, shares of common stock, par value US$0.003 per share (the “Common Stock”) of the Company, subject to the last sentence of this Section 1(a). If the Holder delivers a written notice to the Company on or before the Maturity Date requesting that payment of the entire outstanding Principal balance of the Note (together with any accrued and unpaid Interest) be made in Common Stock, the Company shall convert the Conversion Amount (as defined below) due on the Maturity Date into fully paid and nonassessable shares of Common Stock at the Conversion Rate (as defined below), subject to the last sentence of this Section 1(a). If the Holder makes an election as described in this Section 1(a), the Company shall be entitled to (i) deliver shares of Common Stock to the Holder, (ii) pay the Holder an amount in cash equal to the market price (or, if no such market price exists, the fair market value) (as determined in good faith by the Board of Directors, whose good faith determination shall be conclusive and described in a resolution of the Board of Directors) (as to any securities or other property, the “Fair Market Value”) of the Common Stock on the Maturity Date, or (iii) any combination thereof. 4 Rule 144A Note CUSIP: 16411R AF6 Rule 144A Note ISIN: US16411RAF64 Regulation S Note CUSIP: U16344 AB6 Regulation S Note ISIN: USU16344AB68 5 Include in Global Notes 6 Include in Global Notes (b) The “Maturity Date” shall be October [ ]May 28, 2014, except as may be extended at the option of the Holder (i) in the event that, and for so long as, an Event of Default (as defined in Section 4(a)) shall have occurred and be continuing on the Maturity Date (as may be extended pursuant to this Section 1) or any event shall have occurred and be continuing on the Maturity Date (as may be extended pursuant to this Section 1) that with the passage of time and the failure to cure would result in an Event of Default and (ii) through the date that is ten (10) Business Days after the consummation of a Change of Control in the event that a Change of Control is publicly announced or a Change of Control Notice (as defined in Section 5(b)) is delivered prior to the Maturity Date. Notwithstanding the above, at any time prior to the Maturity Date, the Company may notify Holders of its election to redeem all or part of the Bonds (a “Early Redemption Notice”) no more than 20 Business Days but not less than 5 Business Days prior to the proposed date of such redemption (the “Early Redemption Date”). On the Early Redemption Date, the Company shall redeem the principal amount of the Bonds specified in the Early Redemption Notice by paying in cash or by check to the Holder of this Bond as of the date of the Early Redemption Notice, an amount equal to (a) Principal amount of the Bonds being redeemed plus (b) the sum of any Make-Whole Amount and any accrued and unpaid Interest, in each case relating to portion of the Bond being redeemed (the “Early Redemption Price”). If the Company elects to redeem the Bonds in part (instead of in whole), then the Company shall pay to each Holder an amount equal to the product of (i) the Early Redemption Price multiplied by (ii) the fraction, the numerator of which is the outstanding principal amount of the Bond held by such Holder on the date of such Early Redemption Notice and the denominator of which is aggregate principal amount of Bonds held by all Holders as of date of such Early Redemption Notice2021.

Payments of Principal. (a) Provided there is no Default and the Holder has not elected either the Fundamental Change Option pursuant to Section 4 or the Dividend Recapitalization Option pursuant to Section 5, the entire unpaid Principal balance of the Note (together with any accrued and unpaid Interest thereon in respect of the period commencing on the last Interest Payment Due Date prior to the Maturity Date, and ending on the Maturity Date) will be due and payable on the Maturity Date. On the Maturity Date, the Company shall pay to the Holder an amount in cash representing all the entire outstanding Principal, Principal balance of the Note (together with any accrued and unpaid Interest) in (i) cash or (ii) at the election of the Holder, shares of common stock, par value US$0.003 per share (the “Common Stock”) of the Company. If the Holder delivers a written notice to the Company on or before the Maturity Date requesting that payment of the entire outstanding Principal balance of the Note (together with any accrued and unpaid Interest) be made in Common Stock, the Company shall convert the Conversion Amount (as defined below) due on the Maturity Date into fully paid and nonassessable shares of Common Stock at the Conversion Rate (as defined below). If the Holder makes an election as described in this Section 1(a), the Company shall be entitled to (i) deliver shares of Common Stock to the Holder, (ii) pay the Holder an amount in cash equal to the market price (or, if no such market price exists, the fair market value) (as determined in good faith by the Board of Directors, whose good faith determination shall be conclusive and described in a resolution of the Board of Directors) (as to any securities or other property, the “Fair Market Value”) of the Common Stock on the Maturity Date, or (iii) any combination thereof. (b) The “Maturity Date” shall be October [ ]May 28, 2014, except as may be extended at the option of the Holder (i) in the event that, and for so long as, an Event of Default (as defined in Section 4(a)) shall have occurred and be continuing on the Maturity Date (as may be extended pursuant to this Section 1) or any event shall have occurred and be continuing on the Maturity Date (as may be extended pursuant to this Section 1) that with the passage of time and the failure to cure would result in an Event of Default and (ii) through the date that is ten (10) Business Days after the consummation of a Change of Control in the event that a Change of Control is publicly announced or a Change of Control Notice (as defined in Section 5(b)) is delivered prior to the Maturity Date. Notwithstanding the above, at any time prior to the Maturity Date, the Company may notify Holders of its election to redeem all or part of the Bonds (a “Early Redemption Notice”) no more than 20 Business Days but not less than 5 Business Days prior to the proposed date of such redemption (the “Early Redemption Date”). On the Early Redemption Date, the Company shall redeem the principal amount of the Bonds specified in the Early Redemption Notice by paying in cash or by check to the Holder of this Bond as of the date of the Early Redemption Notice, an amount equal to (a) Principal amount of the Bonds being redeemed plus (b) the sum of any Make-Whole Amount and any accrued and unpaid Interest, in each case relating to portion of the Bond being redeemed (the “Early Redemption Price”). If the Company elects to redeem the Bonds in part (instead of in whole), then the Company shall pay to each Holder an amount equal to the product of (i) the Early Redemption Price multiplied by (ii) the fraction, the numerator of which is the outstanding principal amount of the Bond held by such Holder on the date of such Early Redemption Notice and the denominator of which is aggregate principal amount of Bonds held by all Holders as of date of such Early Redemption Notice2021.

Payments of Principal. On Borrower shall make the Maturity Datefollowing payments of principal, without prior demand by or notice from Lender, which payments shall be applied by Lender to reduce the Company then outstanding principal balance of the Line of Credit: (a) In the event a Loan constituting part of the Collateral is sold, Borrower shall pay to Lender, no later than the Holder an amount in cash representing all outstanding Principaldate of sale of such Loan, accrued and unpaid Interest. The “Maturity Date” the Loan Value of such Loan, provided that the following shall be October [ ], 2014, except as may be extended at the option of the Holder apply: (i) in In the event thatsuch Loan is sold to Lender, and the portion of the purchase price for so long assuch Loan that is equal to the amount due on the Line of Credit in respect of such Loan shall be directly applied by Lender to pay down the Line of Credit; provided, an Event of Default (as defined in Section 4(a)) however, that Lender shall have occurred and be continuing on the Maturity Date (as may be extended pursuant right to this Section 1) or any event shall have occurred and be continuing on apply the Maturity Date (as may be extended pursuant remainder of the respective purchase price to this Section 1) that with further pay down the passage Line of time and the failure to cure would result Credit in an Event of Default and its sole discretion. (ii) through In the date that event such Loan is ten sold to an Investor whereby Lender has delivered Loan Documents to such Investor under the cover of a Bailee Letter pursuant to Section 2.8(c), Borrower shall cause the appropriate principal payment to be made, or the return of the Loan Documents, to Lender, no later than two (102) Business Days after the consummation delivery by Lender of a Change of Control such Loan Documents; or, in the event Lender receives from the Investor a written notice that a Change defect in the Loan exists requiring cure by Borrower, and the Investor intends to have such defect cured, then the appropriate principal payment shall be made upon the earlier of Control is publicly announced cure of the defect or the expiration of twenty-one (21) days after Lender's delivery of such Loan Documents, unless such Loan Documents are sooner received by Lender. (b) In the event a Change of Control Notice (as defined in Section 5(b)) is delivered prior to the Maturity Date. Notwithstanding the above, at any time prior to the Maturity Date, the Company may notify Holders of its election to redeem all or Loan constituting part of the Bonds (a “Early Redemption Notice”) no more than 20 Business Days Collateral that is offered for sale to, but not less than 5 Business Days prior purchased by, Lender constitutes Collateral under this Agreement for a period in excess forty-five (45) days after notice to the proposed date Borrower by Lender of such redemption (the “Early Redemption Date”). On the Early Redemption Date, the Company shall redeem the principal amount of the Bonds specified in the Early Redemption Notice by paying in cash or by check its decision not to the Holder of this Bond as of the date of the Early Redemption Notice, an amount equal to (a) Principal amount of the Bonds being redeemed plus (b) the sum of any Make-Whole Amount and any accrued and unpaid Interest, in each case relating to portion of the Bond being redeemed (the “Early Redemption Price”). If the Company elects to redeem the Bonds in part (instead of in whole)purchase, then the Company Borrower shall pay make to each Holder Lender an immediate payment in an amount equal to the product Loan Value of such Loan. (ic) In the Early Redemption Price multiplied by (ii) the fraction, the numerator of which is event the outstanding balance on the Line of Credit exceeds the monetary limits set forth in Section 3.3(c), 3.3(d) or 3.3(e) of this Agreement, Borrower shall make to Lender an immediate payment in such amount as is necessary to reduce the outstanding balance to an amount which conforms to such limits. (d) In the event any Loan constituting part of the Collateral that is not offered for sale by Borrower to Lender constitutes Collateral for a period in excess of forty-five days, Borrower shall make to Lender an immediate payment in an amount equal to the Loan Value of such Loan. (e) Upon discovery by Borrower, or by Lender with notice to Borrower, of a breach of any representation or warranty under Article V, or that such representation or warranty no longer continues to be true, with respect to any particular Loan constituting part of the Collateral, Borrower shall make to Lender an immediate payment in an amount equal to the Loan Value of such Loan. (f) In the event there is any principal prepayment in whole or in part on a Loan constituting part of the Collateral, Borrower shall pay to Lender the amount of the Bond held such principal payment. Such prepayment by such Holder on the date Borrower shall constitute a prepayment of such Early Redemption Notice and the denominator of which is aggregate principal amount of Bonds held by all Holders as of date of such Early Redemption Noticetreated in accordance with Section 2.

Payments of Principal. On the Maturity Date(i) Borrower shall repay to each Lender according to such Lender’s Commitment Percentage, the Company shall pay to outstanding principal balance of the Holder an amount Advances in cash representing full, together with all accrued and unpaid Interest thereon, and all fees, expenses and other amounts outstanding Principalhereunder and under the other Transaction Documents, in twenty-four (24) equal monthly payments of principal plus accrued and unpaid Interest. The “Maturity Date” shall be October [ ], 2014payable on the last business day of each calendar month, except as may be extended at commencing on March 31, 2009 with respect to the option of the Holder (i) in the event thatOriginal Advances, and for so long asDecember 31, an Event of Default (as defined in Section 4(a)) shall have occurred 2009 with respect to the Additional Advances, and be continuing on the same day of each month thereafter through the Original Advances Maturity Date (or the Additional Advances Maturity Date, as may be extended pursuant to this Section 1) or any event shall have occurred and be continuing on the Maturity Date (as may be extended pursuant to this Section 1) that with the passage of time and the failure to cure would result in an Event of Default and applicable, (ii) through The entire outstanding principal balance of the date that is ten (10) Business Days after Loan, all accrued and unpaid Interest thereon, the consummation of a Change of Control in PIK Interest, and all fees, expenses and other amounts outstanding hereunder and under the event that a Change of Control is publicly announced or a Change of Control Notice (as defined in Section 5(b)) is delivered prior other Transaction Documents shall be immediately due and payable on March 22, 2011 with respect to the Maturity Date. Notwithstanding the above, at any time prior to the Maturity Date, the Company may notify Holders of its election to redeem all or part of the Bonds (a “Early Redemption Notice”) no more than 20 Business Days but not less than 5 Business Days prior to the proposed date of such redemption Original Advances (the “Early Redemption Original Advances Maturity Date”), and December 18, 2011 with respect to the Additional Advances (the “Additional Advances Maturity Date”). All payments shall be applied first to fees and expenses, then to Interest, then to PIK Interest, and then to principal. The Advances, once repaid, may not be reborrowed.” 5. The first sentence of Section 8 of the Agreement is hereby amended and restated in its entirely to read as follows, effective as of December 18, 2007: “On the Early Redemption Original Advances Maturity Date or the Additional Advances Maturity Date, as applicable, or, if earlier, the Company shall redeem date that the Advance and all accrued Interest thereon are paid in full, the Lenders will compute the total amount of Interest that has been contracted for, charged or received by the Lenders or payable by Borrower hereunder and compare such amount to the Maximum Lawful Amount that could have been contracted for, charged or received by each Lenders.” 6. Clause (h) of the defined term “Permitted Indebtedness” is hereby amended and restated in its entirety to read as follows, effective as of December 18, 2007: “(h) Extensions, refinancings, modifications, amendments and restatements of any items of Permitted Indebtedness (a) through (g) above, provided that (i) the principal amount thereof is not increased or the terms thereof are not modified to impose more burdensome terms upon Borrower or its Subsidiary, as the case may be, (ii) the Interest rate margins or any fixed Interest rates on such Indebtedness are not increased, (iii) restrictions are not added on the ability of the Bonds specified Borrower to repay the Advance, other than those in effect on the date hereof, (iv) the final maturity date of the Indebtedness is not extended to a date beyond the Additional Advances Maturity Date or (v) the amortization of any portion of the Senior Indebtedness is not shortened.” 7. Schedule B to the Agreement hereby is replaced in its entirety with Schedule B attached hereto. 8. No course of dealing on the part of Agent, Lenders or their officers, nor any failure or delay in the Early Redemption Notice exercise of any right by paying Agent or Lenders, shall operate as a waiver thereof, and any single or partial exercise of any such right shall not preclude any later exercise of any such right. Agent and Lender’s failure at any time to require strict performance by Borrower of any provision shall not affect any right of Agent and Lenders thereafter to demand strict compliance and performance. Any suspension or waiver of a right must be in cash writing signed by an officer of Agent and Lenders. 9. Unless otherwise defined, all initially capitalized terms in this Amendment shall be as defined in the Agreement. The Agreement, as amended hereby, shall be and remain in full force and effect in accordance with its respective terms and hereby is ratified and confirmed in all respects. Except as expressly set forth herein, the execution, delivery, and performance of this Amendment shall not operate as a waiver of, or by check as an amendment of, any right, power, or remedy of Agent or Lenders under the Agreement, as in effect prior to the Holder of this Bond date hereof. 10. Borrower represents and warrants that the Representations and Warranties contained in the Agreement are true and correct in all material respects as of the date of this Amendment, except to the Early Redemption Noticeextent such Representations and Warranties expressly refer to an earlier date, an amount equal in which case they shall be true and correct in all material respects as of such earlier date, and that no Event of Default has occurred and is continuing, 11. As a condition to the effectiveness of this Amendment, Agent and Lenders shall have received, in form and substance satisfactory to Agent, the following: (a) Principal amount of the Bonds being redeemed plus this Amendment, duly executed by Borrower; (b) Corporate Resolutions to Borrow in the sum form attached hereto, duly executed by Borrower; (c) promissory notes for the Additional Advances, dated of any Make-Whole Amount and any accrued and unpaid Interesteven date herewith, in each case relating to portion of the Bond being redeemed (the “Early Redemption Price”). If the Company elects to redeem the Bonds in part (instead of in whole), then the Company shall pay payable to each Holder an amount equal Lender, duly executed by Borrower; (d) warrants to the product purchase Borrower’s common stock, issuable to each Lender dated of even date herewith, duly executed by Borrower; (ie) the Early Redemption Price multiplied all reasonable expenses incurred by (ii) the fraction, the numerator of which is the outstanding principal amount of the Bond held by such Holder on Agent through the date of this Amendment, which may be debited from any of Borrower’s accounts in accordance with the terms of the Agreement; and (f) such Early Redemption Notice other documents, and the denominator completion of such other matters, as Agent may reasonably deem necessary or appropriate. 12. This Amendment may be executed in two or more counterparts, each of which is aggregate principal amount shall be deemed an original, but all of Bonds held by all Holders as of date of such Early Redemption Noticewhich together shall constitute one instrument.

Payments of Principal. (a) On the Maturity Date, each Installment Date the Company shall pay to the Holder an amount equal to the Installment Amount due on such Installment Date in cash representing all outstanding Principal, accrued and unpaid Interestaccordance with Section 8. The “On the Maturity Date” , the Holder shall be October [ ]surrender the Note to the Company and the Company shall pay to the Holder, 2014(i) an amount in Common Shares, except as may be extended or, at the option of the Company, in cash, representing all outstanding Principal and (ii) an amount in cash equal to the accrued and unpaid Interest thereon; provided that Principal shall be payable in Common Shares on the Maturity Date if, and only if, there has been no Equity Conditions Failure. On or prior to the eighth (8th) Trading Day prior to the Maturity Date (the "Maturity Election Notice Due Date"), the Company shall deliver a written notice to the Holder (ix) specifying whether the Principal shall be paid on the Maturity Date in Common Shares or cash and (y) if the event thatPrincipal is to be paid in Common Shares, certifying that there has been no Equity Conditions Failure. Principal to be paid on the Maturity Date and for so long as, an Event of Default on the Maturity Settlement Date (as defined below) in Common Shares shall be paid in a number of fully paid and nonassessable (rounded to the nearest whole share in accordance with Section 4(a3(a)) Common Shares. (b) If the Company shall have occurred and be continuing pay the Principal on the Maturity Date in Common Shares, then on the Maturity Date (as may i) (A) provided that Vasogen's transfer agent (the "Tra▇▇▇▇▇ Agent") is participating in the Depository Trust Company ("DTC") Fast Automated Securities Transfer Program, the Company shall direct Vasogen to, and upon such direction Vasogen shall or shall cause the Transfer Agent to, credit a number of Common Shares equal to the quotient of the outstanding Principal due on such date divided by the Initial Maturity Conversion Price (the "Pre-Maturity Conversion Shares") to which the Holder shall be extended entitled to the Holder's or its designee's balance account with DTC through its Deposit Withdrawal Agent Commission system, or (B) if the foregoing shall not apply, Vasogen shall issue and deliver, to the address set forth in the register maintained by Vasogen for such purpose pursuant to this Section 1the Securities Purchase Agreement or to such address as specified by the Holder in writing to Vasogen at least three (3) or any event shall have occurred and be continuing on the Maturity Date (as may be extended pursuant to this Section 1) that with the passage of time and the failure to cure would result in an Event of Default and (ii) through the date that is ten (10) Business Trading Days after the consummation of a Change of Control in the event that a Change of Control is publicly announced or a Change of Control Notice (as defined in Section 5(b)) is delivered prior to the Maturity Date. Notwithstanding the above, at any time prior to the Maturity Date, a certificate, registered in the Company may notify Holders of its election to redeem all or part name of the Bonds (a “Early Redemption Notice”) no more than 20 Business Days but not less than 5 Business Days prior Holder or its designee, for the number of Pre-Maturity Conversion Shares to the proposed date of such redemption (the “Early Redemption Date”). On the Early Redemption Date, the Company shall redeem the principal amount of the Bonds specified in the Early Redemption Notice by paying in cash or by check to which the Holder of this Bond as of the date of the Early Redemption Notice, an amount equal to shall be entitled and (aii) Principal amount of the Bonds being redeemed plus (b) the sum of any Make-Whole Amount and any accrued and unpaid Interest, in each case relating to portion of the Bond being redeemed (the “Early Redemption Price”). If the Company elects to redeem the Bonds in part (instead of in whole), then the Company shall pay to each the Holder, in cash by wire transfer of immediately available funds, the amount of any accrued and unpaid interest on such Principal. On the third (3rd) Trading Day immediately after the end of the Maturity Conversion Measuring Period (the "Maturity Settlement Date"), the Company shall direct Vasogen to, and upon such direction Vasogen shall or shall cause the Transfer Agent to, deliver to the Holder's account with DTC a number of additional Common Shares, if any, equal to the Maturity Balance Conversion Shares. If an Event of Default or Equity Conditions Failure occurs during the Maturity Conversion Measuring Period, then, at the Holder's option, either (x) the Holder may require the Company to pay the Principal amount of the Note outstanding on the Maturity Date (including any Principal amount represented by Pre-Maturity Conversion Shares that shall be returned to the Company and which Principal amount shall be reduced to the extent any such Common Shares are not returned to the Company) in cash on the Maturity Settlement Date and, in conjunction with receipt of such cash payment, shall return any Pre-Maturity Conversion Shares delivered to the Holder which the Holder has not otherwise sold, transferred or disposed of or (y) the Company shall pay to the Holder in cash on the Maturity Settlement Date an amount equal to the difference between (1) the Principal outstanding on the Maturity Date minus (2) the product of (iA) the Early Redemption Price Principal outstanding on the Maturity Date multiplied by (iiB) the fractionConversion Share Ratio and, notwithstanding Section 14(a), in the numerator case of which is this clause (y), such amount shall be paid by the outstanding principal amount Company to the Holder within five (5) Trading Days after the end of the Bond held by such Holder on the date Maturity Conversion Measuring Period. (c) No prepayment of such Early Redemption Notice and the denominator of which is aggregate principal amount of Bonds held by all Holders Principal shall be permitted except as of date of such Early Redemption Noticeexpressly provided herein.

Payments of Principal. On the Maturity Date, the Company shall pay to the Holder an amount in cash representing all outstanding Principal, accrued and unpaid Interest and accrued and unpaid Late Charges, if any, on such Principal and Interest. The “Maturity Date” shall be October [ ]December 21, 20142011; provided, except however, if the Company has not consummated a Qualified Financing Transaction (as defined below) on or before September 30, 2010, then the Maturity Date shall automatically be restored to its original date of December 21, 2010 without further notice or action by the Holder; and, provided further the Maturity Date may be extended at the option of the Holder (i) in the event that, and for so long as, an Event of Default (as defined in Section 4(a)) shall have occurred and be continuing on the Maturity Date (as may be extended pursuant to this Section 1) or any event that shall have occurred and be continuing on the Maturity Date (as may be extended pursuant to this Section 1) that with the passage of time and the failure to cure would result in an Event of Default and (ii) through the date that is ten (10) Business Days after the consummation of a Change of Control in the event that a Change of Control is publicly announced or a Change of Control Notice (as defined in Section 5(b)) is delivered prior to the Maturity Date. Other than as specifically permitted by this Note, the Company may not prepay any portion of the outstanding Principal, accrued and unpaid Interest or accrued and unpaid Late Charges on Principal and Interest, if any. Notwithstanding any provision of this Section 1 to the abovecontrary, the Holder may, at any time its option and in its sole discretion, deliver a written notice to the Company at least two (2) days prior to the Maturity Date, Date electing to have the Company may notify Holders payment of its election to redeem all or part of the Bonds (a “Early Redemption Notice”) no more than 20 Business Days but not less than 5 Business Days prior to the proposed date of such redemption (the “Early Redemption Date”). On the Early Redemption Date, the Company shall redeem the principal amount of the Bonds specified in the Early Redemption Notice by paying in cash or by check to the Holder of this Bond as of the date of the Early Redemption Notice, an amount equal to (a) Principal amount of the Bonds being redeemed plus (b) the sum of any Make-Whole Amount and any accrued and unpaid Interest, in each case relating to portion of the Bond being redeemed Principal and Interest payable on the Maturity Date deferred (such amount deferred, the “Early Redemption PriceDeferral Amount”)) up to a date that is two (2) years after the Maturity Date, which date shall thereafter be the “Maturity Date” for all purposes hereunder. If Any notice delivered by the Company elects Holder pursuant to redeem the Bonds in part (instead of in whole), then the Company this Section 1 shall pay to each Holder an amount equal to the product of set forth (i) the Early Redemption Price multiplied by Deferral Amount and (ii) the fractiondate that such Deferral Amount shall now be payable. For purposes of this Note, the numerator term "Qualified Financing Transaction" shall mean one or more or a series of financing transactions in which is the outstanding principal amount Company raises gross proceeds not less than $6,000,000 (Six Million Dollars) pursuant to the issuance of the Bond held by equity securities provided that such Holder on the date of such Early Redemption Notice and the denominator of which is aggregate principal amount of Bonds held by securities are junior in all Holders as of date of such Early Redemption Noticerights to this Note.

Payments of Principal. On the Maturity Date, the Company shall pay to the Holder an amount in cash representing all outstanding Principal, accrued and unpaid Interest and accrued and unpaid Late Charges, if any, on such Principal and Interest. The “Maturity Date” shall be October [ ]June 21, 20142012; provided, except however, if the Company has not consummated a Qualified Financing Transaction (as defined below) on or before December 31, 2010, then the Maturity Date shall automatically become December 31, 2010 without further notice or action by the Holder; and, provided further the Maturity Date may be extended at the option of the Holder (i) in the event that, and for so long as, an Event of Default (as defined in Section 4(a)) shall have occurred and be continuing on the Maturity Date (as may be extended pursuant to this Section 1) or any event that shall have occurred and be continuing on the Maturity Date (as may be extended pursuant to this Section 1) that with the passage of time and the failure to cure would result in an Event of Default and (ii) through the date that is ten (10) Business Days after the consummation of a Change of Control in the event that a Change of Control is publicly announced or a Change of Control Notice (as defined in Section 5(b)) is delivered prior to the Maturity Date. Other than as specifically permitted by this Note, the Company may not prepay any portion of the outstanding Principal, accrued and unpaid Interest or accrued and unpaid Late Charges on Principal and Interest, if any. Notwithstanding any provision of this Section 1 to the abovecontrary, the Holder may, at any time its option and in its sole discretion, deliver a written notice to the Company at least two (2) days prior to the Maturity Date, Date electing to have the Company may notify Holders payment of its election to redeem all or part of the Bonds (a “Early Redemption Notice”) no more than 20 Business Days but not less than 5 Business Days prior to the proposed date of such redemption (the “Early Redemption Date”). On the Early Redemption Date, the Company shall redeem the principal amount of the Bonds specified in the Early Redemption Notice by paying in cash or by check to the Holder of this Bond as of the date of the Early Redemption Notice, an amount equal to (a) Principal amount of the Bonds being redeemed plus (b) the sum of any Make-Whole Amount and any accrued and unpaid Interest, in each case relating to portion of the Bond being redeemed Principal and Interest payable on the Maturity Date deferred (such amount deferred, the “Early Redemption PriceDeferral Amount”)) up to a date that is two (2) years after the Maturity Date, which date shall thereafter be the “Maturity Date” for all purposes hereunder. If Any notice delivered by the Company elects Holder pursuant to redeem the Bonds in part (instead of in whole), then the Company this Section 1 shall pay to each Holder an amount equal to the product of set forth (i) the Early Redemption Price multiplied by Deferral Amount and (ii) the fractiondate that such Deferral Amount shall now be payable. For purposes of this Note, the numerator term "Qualified Financing Transaction" shall mean one or more or a series of financing transactions in which is the outstanding principal amount Company raises gross proceeds not less than $8,000,000 (Eight Million Dollars) pursuant to the issuance of equity securities provided that such securities are junior in all rights to this Note and are otherwise issued on terms satisfactory to the Bond held by such Holder on the date of such Early Redemption Notice and the denominator of which is aggregate principal amount of Bonds held by all Holders as of date of such Early Redemption Noticein its sole discretion.