Conversion. Holder shall have the right to convert, at any time during the Conversion Period, all or any portion of the principal amount, together with any unpaid and accrued interest, then outstanding under this Note into fully paid and non-assessable shares of Common Stock at a conversion price per share equal to the Conversion Price (as defined below). The number of shares of Common Stock into which such principal and interest then outstanding under this Note will be converted shall be determined by dividing the amount of principal, together with all unpaid and accrued interest, then outstanding under this Note to be converted (the “Conversion Amount”) by the Conversion Price. The holder will not convert the note into a number of common shares that would exceed the number of available authorized common shares calculated as of the date of conversion as follows: the number of authorized shares of common stock less the number of issued and outstanding shares of common stock less the number of shares of common stock issuable under all other outstanding convertible instruments of the [[Loan Agreement:Organization]].

Conversion Procedure. Before Holder shall be entitled to convert the Conversion Amount then outstanding under this Note into shares of Common Stock, Holder shall surrender this Note at the office of this [[Loan Agreement:Organization]], and shall give written notice (a form of which is attached to this Note, the “Conversion Notice”) to [[Loan Agreement:Organization]] at its principal corporate office, of the election to convert the same and shall state therein the total Conversion Amount. [[Loan Agreement:Organization]] shall not be obligated to issue certificates evidencing the shares of Common Stock issuable upon such conversion unless # Holder executes and delivers to [[Loan Agreement:Organization]] the Conversion Notice for the converted shares and # this Note is delivered to [[Loan Agreement:Organization]]. [[Loan Agreement:Organization]] shall, as soon as practicable after such delivery, issue and deliver certificates (bearing such legends as are required by applicable state and federal securities laws in the opinion of counsel to [[Loan Agreement:Organization]] and required by this Note and the Loan Agreement), representing the number of fully paid and non-assessable shares of the Common Stock into which the Conversion Amount will be converted in accordance with the provisions herein, and a new promissory note having like tenor as this Note for the principal amount and interest then outstanding under this Note that are not being so converted. Any conversion pursuant to this [Section 8] shall be deemed to have been made immediately prior to the close of business on the date of [[Loan Agreement:Organization]]’s receipt of the Conversion Notice, so that the rights of Holder under this Note to the extent of the Conversion Amount shall cease at such time and Holder shall be treated for all purposes as having become the record holder of such shares of Common Stock at such time.

Conversion Procedure. Before Holder shall be entitled to convert the Conversion Amount then outstanding under this Note into shares of Common Stock, Holder shall surrender this Note at the office of this [[Loan Agreement:Organization]], and shall give written notice (a form of which is attached to this Note, the “Conversion Notice”) to [[Loan Agreement:Organization]] at its principal corporate office, of the election to convert the same and shall state therein the total Conversion Amount. [[Loan Agreement:Organization]] shall not be obligated to issue certificates evidencing the shares of Common Stock issuable upon such conversion unless # Holder executes and delivers to [[Loan Agreement:Organization]] the Conversion Notice for the converted shares and # this Note is delivered to [[Loan Agreement:Organization]]. [[Loan Agreement:Organization]] shall, as soon as practicable after such delivery, issue and deliver certificates (bearing such legends as are required by applicable state and federal securities laws in the opinion of counsel to [[Loan Agreement:Organization]] and required by this Note and the Loan Agreement), representing the number of fully paid and non-assessable shares of the Common Stock into which the Conversion Amount will be converted in accordance with the provisions herein, and a new promissory note having like tenor as this Note for the principal amount and interest then outstanding under this Note that are not being so converted. Any conversion pursuant to this Section 8 shall be deemed to have been made immediately prior to the close of business on the date of [[Loan Agreement:Organization]]’s receipt of the Conversion Notice, so that the rights of Holder under this Note to the extent of the Conversion Amount shall cease at such time and Holder shall be treated for all purposes as having become the record holder of such shares of Common Stock at such time.

At any time and from time to time # prior to or upon and during the occurrence of an Event of Default, from the date of such Event of Default until such Event of Default is cured or waived or # as of the Maturity Date, at the written election of Holder, any outstanding Principal Amount and accrued and unpaid interest on this Note (the “Conversion Amount”) shall be converted into shares of Common Stock at a per share conversion price equal to $0.60 (subject to appropriate adjustment to reflect any stock split, stock dividend, reverse stock split or similar corporate event affecting the Common Stock) (all such shares into which the Note is converted into, the “Conversion Shares”). Upon any conversion election made in accordance with this Section 4, the Company shall authorize and approve, and make all filings necessary, to amend its certificate of incorporation as may be required to increase the number of authorized shares of Common Stock to enable it to comply herewith. In lieu of any fractional shares to which the Holder would otherwise be entitled, the Company shall issue one whole share of Common Stock.

(a) The Holder of this Note is entitled, at its option, at any time, to convert all or any amount of the principal face amount of this Note then outstanding into shares of the Company’s common stock (the “Common Stock”) at a price (“Conversion Price”) for each share of Common Stock equal to the greater of # $0.50 per share or # 60% of the lowest trading price of the Common Stock as reported on the National Quotations Bureau OTC Marketplace exchange which the Company’s shares are traded or any exchange upon which the Common Stock may be traded in the future (“Exchange”), for the twenty prior trading days including the day upon which a Notice of Conversion is received by the Company or its transfer agent (provided such Notice of Conversion is delivered by fax or other electronic method of communication to the Company or its transfer agent after 4 P.M. Eastern Standard or Daylight Savings Time if the Holder wishes to include the same day closing price). If the shares have not been delivered within 3 business days, the Notice of Conversion may be rescinded. Such conversion shall be effectuated by the Company delivering the shares of Common Stock to the Holder within 3 business days of receipt by the Company of the Notice of Conversion. Accrued but unpaid interest shall be subject to conversion. No fractional shares or scrip representing fractions of shares will be issued on conversion, but the number of shares issuable shall be rounded to the nearest whole share. To the extent the Conversion Price of the Company’s Common Stock closes below the par value per share, the Company will take all steps necessary to solicit the consent of the stockholders to reduce the par value to the lowest value possible under law. The Company agrees to honor all conversions submitted pending this increase. In the event the Company experiences a DTC “Chill” on its shares, the Conversion Price shall be decreased to 50% instead of 60% while that “Chill” is in effect. In no event shall the Holder be allowed to effect a conversion if such conversion, along with all other shares of Company Common Stock beneficially owned by the Holder and its affiliates would exceed 4.99% of the outstanding shares of the Common Stock of the Company (which may be increased up to 9.9% upon 60 days’ prior written notice by the Investor). The conversion discount and look back period will be adjusted on a ratchet basis if the Company offers a more favorable conversion discount, interest rate, (whether through a straight discount or in combination with an original issue discount), look back period or other more favorable term to another party for any financings with gross proceeds equal to or less than $200,000, while this note is in effect.

Authorized Shares. The Borrower covenants that during the period the conversion right exists, the Borrower will reserve from its authorized and unissued Common Stock a sufficient number of shares, free from preemptive rights, to provide for the issuance of Common Stock upon the full conversion of this Note. Method of Conversion. This Note may be converted by the Holder in whole or in part as described in Section 2.1(a) hereof. Upon partial conversion of this Note, a new Note containing the same date and provisions of this Note shall, at the request of the Holder, be issued by the Borrower to the Holder for the principal balance of this Note and interest which shall not have been converted or paid.

Conversions. On or prior to the Maturity Date, this Note shall be convertible, at the election of the Holder, into such number of shares of the Company’s common stock, par value $0.01 per share (“Common Stock”), equal to the quotient of all amounts due hereunder divided by the conversion rate of $0.54 per share (such number of shares, the “Conversion Shares”). As promptly as practicable after conversion of this Note, the Company shall, at its expense, issue and deliver to the Holder, upon surrender of this Note, a certificate or certificates for the number of full Conversion Shares issuable upon such conversion. No fractional shares of Common Stock shall be issued upon conversion of this Note. The Company shall, in lieu of issuing any fractional share, pay the Holder a sum in cash equal to the product of such number of fractional shares and $0.54.

Voluntary Conversion. This Note shall be convertible, in whole or in part, into shares of Common Stock at the option of the Holder, at any time and from time to time (subject to the conversion limitations set forth in Section 4(d) hereof), but only with the prior written consent of the Company. The Holder shall effect conversions by delivering to the Company a Notice of Conversion, the form of which is attached hereto as Annex A (each, a “Notice of Conversion”), specifying therein the principal amount of this Note to be converted, accrued and unpaid interest outstanding under this Note to be converted, and the date on which such conversion shall be effected (such date, the “Conversion Date”). If no Conversion Date is specified in a Notice of Conversion, the Conversion Date shall be the date that such Notice of Conversion is deemed delivered hereunder. No ink-original Notice of Conversion shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Conversion form be required. To effect conversions hereunder, the Holder shall not be required to physically surrender this Note to the Company unless the entire principal amount of this Note, plus all accrued and unpaid interest thereon, has been so converted. Conversions hereunder shall have the effect of lowering the outstanding principal amount of this Note in an amount equal to the applicable conversion. The Holder and the Company shall maintain a Conversion Schedule showing the principal amount(s) converted and the date of such conversion(s). The Company may deliver an objection to any Notice of Conversion within three (3) Business Days of delivery of such Notice of Conversion. In the event of any dispute or discrepancy, the records of the Holder shall be controlling and determinative in the absence of manifest error. The Holder, and any assignee by acceptance of this Note, acknowledge and agree 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 amount stated on the face hereof.

Calculation of Conversion Price. The per share conversion price into which Principal Amount and interest (including any Default Interest) under this Note shall be convertible into shares of Common Stock hereunder (the “Conversion Price”) shall equal $0.0002, subject to adjustment as provided in this Note. If at any time the Conversion Price as determined hereunder for any conversion would be less than the par value of the Common Stock, then at the sole discretion of the Holder, the Conversion Price hereunder may equal such par value for such conversion and the Conversion Amount for such conversion may be increased to include Additional Principal, where “Additional Principal” means such additional amount to be added to the Conversion Amount to the extent necessary to cause the number of conversion shares issuable upon such conversion to equal the same number of conversion shares as would have been issued had the Conversion Price not been adjusted by the Holder to the par value price. Holder shall be entitled to deduct $1,750.00 from the conversion amount in each Notice of Conversion to cover Holder’s fees associated with each Notice of Conversion. All such Conversion Price determinations are to be appropriately adjusted for any stock dividend, stock split, stock combination, rights offerings, reclassification or similar transaction that proportionately decreases or increases the Common Stock. If the Company, at any time while this Note is outstanding: # pays a stock dividend or otherwise makes a distribution or distributions payable in shares of Common Stock on shares of Common Stock or any Common Stock Equivalents, # subdivides outstanding shares of Common Stock into a larger number of shares, # combines (including by way of a reverse stock split) outstanding shares of Common Stock into a smaller number of shares or # issues, in the event of a reclassification of shares of the Common Stock, any shares of capital stock of the Company, then the Conversion Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock (excluding any treasury shares of the Company) outstanding immediately before such event, and of which the denominator shall be the number of shares of Common Stock outstanding immediately after such event. Any adjustment made pursuant to the immediately preceding sentence shall become effective immediately after the record date for the determination of shareholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or re-classification. “Common Stock Equivalents” means any securities of the Company or the Company’s subsidiaries which would entitle the holder thereof to acquire at any time Common Stock, including, without limitation, any debt, preferred stock, right, option, warrant or other instrument that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock.

Reservation of Shares Issuable Upon Conversion. The Company covenants that it will at all times reserve and keep available out of its authorized and unissued shares of Common Stock a number of shares of Common Stock at least equal to the Required Minimum for the sole purpose of issuance upon conversion of this Note and payment of interest on this Note, each as herein provided, free from preemptive rights or any other actual contingent purchase rights of Persons other than the Holder (and the other holders of the Notes), not less than such aggregate number of shares of the Common Stock as shall (subject to the terms and conditions set forth in the Purchase Agreement) be issuable (taking into account the adjustments and restrictions of Section 5) upon the conversion of the then outstanding principal amount of this Note and payment of interest hereunder. The Company covenants that all shares of Common Stock that shall be so issuable shall, upon issue, be duly authorized, validly issued, fully paid and nonassessable.

At any time prior to the payment in full by the Borrower of this Note, the Lender shall have the option to convert the then outstanding Principal Amount balance and any accrued interest under the Promissory Note (or any portion thereof), into shares of common stock (the “Shares” and the “Common Stock”) of the Borrower (the “Conversion Option”) at the Conversion Price (each a “Conversion” and the “Conversion Right”). The “Conversion Price” shall equal $0.75 per Share;