Common use of Conversion Price Clause in Contracts

Conversion Price. The conversion price for any conversion pursuant to Section 12.2 shall be the lowest nominal or effective price per share paid by the Other Investors who acquire such Convertible Preferred Stock (with the exception of shares issuable upon exercise of the Initial Bridge Warrants). The conversion price for any conversion into any equity or debt security pursuant to Section 12.1 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 Effective Date (with the exception of (x) purchases of up to 35,000 shares of Common Stock pursuant to certain options to purchase, at a purchase price of $0.0001, that were outstanding on the Effective Date and held by members of the Board of Directors, as set forth in Schedule 2.7(d) to the Recapitalization Agreement, and (y) shares issuable upon the exercise of the Initial 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 Maker outstanding on or after the Effective Date or granted, issued, extended or otherwise made available by the Maker at any time on or after the date one year prior to the Effective Date (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 Effective Date and held by members of the Board of Directors as set forth in Schedule 2.7(d) to the Recapitalization Agreement, and (y) the Initial Bridge Warrants, each of which shall be excluded from consideration under this section); and (iii) 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 Effective Date); provided, 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) hereof shall initially be based upon Schedule 2.7

Conversion Price. The conversion price for any conversion pursuant to Section 12.2 shall be the lowest nominal or effective price per share paid by the Other Investors who acquire such Convertible Preferred Stock (with the exception of shares issuable upon exercise of the Initial Bridge Warrants). The conversion price for any conversion into any equity or debt security pursuant to Section 12.1 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 Effective Date (with the exception of (x) purchases of up to 35,000 shares of Common Stock pursuant to certain options to purchase, at a purchase price of $0.0001, that were outstanding on the Effective Date and held by members of the Board of Directors, as set forth in Schedule 2.7(d) to the Recapitalization Agreement, and (y) shares issuable upon the exercise of the Initial 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 Maker outstanding on or after the Effective Date or granted, issued, extended or otherwise made available by the Maker at any time on or after the date one year prior to the Effective Date (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 Effective Date and held by members of the Board of Directors as set forth in Schedule 2.7(d) to the Recapitalization Agreement, and (y) the Initial Bridge Warrants, each of which shall be excluded from consideration under this section); and (iii) 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 Effective Date); provided, 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) hereof shall initially be based upon Schedule 2.72.7(d) to the Recapitalization Agreement. All other rights, preferences, privileges, terms and conditions received by Holder in connection with any conversion and/or any securities issued by the Maker to Holder upon conversion, shall be no less favorable to Holder than the rights, preferences, privileges, terms and conditions any other investor in the Maker has received or is entitled to receive with respect to the security into which Holder is converting pursuant to any other security, instrument, promise, undertaking, commitment, agreement or letter of intent of the Maker, 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 or any issuance of the security or other instrument to that investor or are provided separately, at any time on or after one year prior to the Effective Date. In regard to each conversion hereunder, the Maker hereby agrees to take and/or arrange for all necessary corporate and related action to enable the execution of each such conversion elected by Holder.

Conversion Price. i. The conversion Conversion Price shall be $0.20 per share of Common Stock, subject to adjustment from time to time in accordance with this Section 3 (the “Conversion Price”). ii. If and whenever, on or after the Date of Issuance, the Corporation issues or sells, or is deemed to have issued or sold, any shares of its Common Stock for consideration per share less than the Conversion Price in effect immediately prior to the time of such issuance or sale (an “Additional Stock Issuance”), then immediately upon such Additional Stock Issuance, the Conversion Price shall (except as otherwise provided in this Section 3) be reduced to a price for (calculated to the nearest 1/10th cent) equal to the product obtained by multiplying the Conversion Price in effect immediately prior to such Additional Stock Issuance by a fraction, the numerator of which is equal to the sum of (a) the total number of shares of Common Stock outstanding (including any conversion shares of Common Stock deemed to be issued pursuant to Section 12.2 shall be 3(c)(i) or Section 3(c)(ii) hereof) immediately prior to such Additional Stock Issuance plus (b) the lowest nominal or effective price per share paid number of shares of Common Stock that the aggregate consideration received by the Other Investors who acquire Corporation for such Convertible Preferred Additional Stock Issuance would purchase at the Conversion Price in effect immediately prior to such Additional Stock Issuance, and the denominator of which is equal to the sum of (with a) the exception total number of shares issuable upon exercise of the Initial Bridge Warrants). The conversion price for Common Stock outstanding (including any conversion into any equity or debt security shares of Common Stock deemed to be issued pursuant to Section 12.1 3(c)(i) or Section 3(c)(ii) hereof) immediately prior to such Additional Stock Issuance plus (b) the number of shares of Common Stock issued in such Additional Stock Issuance. iii. Notwithstanding the foregoing, the Corporation shall not be required to make any adjustment to the lowest Conversion Price as a result of an Additional Stock Issuance when such issuance is (a) in a transaction described in Section 3(d) and for which an adjustment has been made pursuant to Section 3(d); (b) any conversion of the Notes; (c) as a distribution on the Notes; (d) pursuant to any stock option plan or other incentive plan of the Corporation; (e) upon conversion or exercise of any Options or Convertible Securities outstanding as of the date of the amendment and restatement of this Note (i.e., the Date Amended on the first page of this Note); (f) made pursuant to the exercise of any of the Warrants; or (g) the issuance of the Tranche B Shares. iv. If any of the Cancelled Shares (as defined below) are treated as issued and outstanding or given comparable legal effect (a “Cancelled Share Effectiveness”), then immediately upon such Cancelled Share Effectiveness, the Conversion Price shall (except as otherwise provided in this Section 3) be reduced to a price (calculated to the nearest 1/10th cent) equal to the product obtained by multiplying the Conversion Price in effect immediately prior to such Cancelled Share Effectiveness by a fraction, the numerator of which is equal to the total number of shares of Common Stock outstanding immediately prior to such Cancelled Share Effectiveness, and the denominator of which is equal to the sum of (a) the total number of shares of Common Stock outstanding immediately prior to such Cancelled Share Effectiveness plus (b) the number of shares of Cancelled Shares treated as issued and outstanding or given comparable legal effect. To the extent that any Cancelled Share Effectiveness occurs after all or a portion of this Note has been converted into shares of Common Stock, the Corporation shall immediately distribute to the Holder the number of shares of Common Stock that the Holder would have received had such Cancelled Share Effectiveness occurred prior to such conversion. “Cancelled Shares” shall mean the Common Stock issued by the Corporation in connection with (i) the lowest nominal or effective price per share paid by any investor at any time acquisition of WEBiX Inc., which was subsequently rescinded on or after the date one year prior to the Effective Date (with the exception of (x) purchases of up to 35,000 shares of Common Stock pursuant to certain options to purchaseMarch 13, at a purchase price of $0.0001, that were outstanding on the Effective Date and held by members of the Board of Directors, as set forth in Schedule 2.7(d) to the Recapitalization Agreement, and (y) shares issuable upon the exercise of the Initial Bridge Warrants, each of which shall be excluded from consideration under this section)2003, (ii) the lowest nominal or effective price at acquisition of the business, operations and prospects of Kolt Oil and Gas, which any investor is entitled to acquire shares was subsequently rescinded, (including, without limitation, through purchase, exchange, conversion or exerciseiii) pursuant to the acquisition of furniture under a note with RHC and (iv) any other security, instrument, or promise, undertaking, commitment, agreement or letter issuance of intent of the Maker outstanding on or after the Effective Date or granted, issued, extended or otherwise made available by the Maker at any time on or after the date one year Common Stock prior to the Effective Date (regardless of whether currently exercisable or convertible) (with date hereof that would cause the exception of (x) certain options Corporation to purchase up to 35,000 have more than 31,589,501 shares of Common Stock at a purchase price of $0.0001 that were outstanding on the Effective Date and held by members as of the Board of Directors as set forth in Schedule 2.7(d) date hereof (other than shares deemed to the Recapitalization Agreement, and (y) the Initial Bridge Warrants, each of which shall be excluded from consideration under this section); and (iii) 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 Effective Date); provided, however, that in no event shall the price per share calculated issued pursuant to this clause (iiiSection 3(c)(i) be less than $.04 per share. The calculation required by clause (iior Section 3(c)(ii) hereof shall initially be based upon Schedule 2.7hereof) if such shares are treated as issued and outstanding or given comparable legal effect.

Conversion Price. The conversion price for any conversion pursuant to Section 12.2 shall be the lowest nominal or effective price per share paid by the Other Investors who acquire purchase such Convertible Preferred Stock (with the exception of shares issuable upon exercise of the Initial Bridge Warrants). The conversion price for any conversion into any equity or debt security pursuant to Section 12.1 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 Effective Date of the Recapitalization Agreement (with the exception of (x) purchases of up to 35,000 shares of Common Stock pursuant to certain options to purchase, at a purchase price of $0.0001, that were outstanding on the Effective Date of the Recapitalization Agreement and held by members of the Board of Directors, as set forth in Schedule 2.7(d) to the Recapitalization Agreement, and (y) shares issuable upon the exercise of the Initial 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 Maker outstanding on or after the Effective Date of the Recapitalization Agreement or granted, issued, extended or otherwise made available by the Maker at any time on or after the date one year prior to the Effective Date of the Recapitalization 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 Effective Date of the Recapitalization Agreement and held by members of the Board of Directors as set forth in Schedule 2.7(d) to the Recapitalization Agreement, and (y) the Initial Bridge Warrants, each of which shall be excluded from EXECUTION VERSION consideration under this section); and (iii) 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 Effective DateDate of the Recapitalization Agreement); provided, 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) hereof shall initially be based upon Schedule 2.72.7(d) to the Recapitalization Agreement. All other rights, preferences, privileges, terms and conditions received by Holder in connection with any conversion and/or any securities issued by the Maker to Holder upon conversion, shall be no less favorable to Holder than the rights, preferences, privileges, terms and conditions any other investor in the Maker has received or is entitled to receive with respect to the security into which Holder is converting pursuant to any other security, instrument, promise, undertaking, commitment, agreement or letter of intent of the Maker, 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 or any issuance of the security or other instrument to that investor or are provided separately, at any time on or after one year prior to the Effective Date of the Recapitalization Agreement. In regard to each conversion hereunder, the Maker hereby agrees to take and/or arrange for all necessary corporate and related action to enable the execution of each such conversion elected by Holder.

Conversion Price. The conversion price for any conversion pursuant to Section 12.2 shall be the lowest nominal or effective price per share paid by the Other Investors who acquire purchase such Convertible Preferred Stock (with the exception of shares issuable upon exercise of the Initial Bridge Warrants). The conversion price for any conversion into any equity or debt security pursuant to Section 12.1 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 Effective Date of the Recapitalization Agreement (with the exception of (x) purchases of up to 35,000 shares of Common Stock pursuant to certain options to purchase, at a purchase price of $0.0001, that were outstanding on the Effective Date of the Recapitalization Agreement and held by members of the Board of Directors, as set forth in Schedule 2.7(d) to the Recapitalization Agreement, and (y) shares issuable upon the exercise of the Initial 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 Maker outstanding on or after the Effective Date of the Recapitalization Agreement or granted, issued, extended or otherwise made available by the Maker at any time on or after the date one year prior to the Effective Date of the Recapitalization 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 Effective Date of the Recapitalization Agreement and held by members of the Board of Directors as set forth in Schedule 2.7(d) to the Recapitalization Agreement, and (y) the Initial Bridge Warrants, each of which shall be excluded from consideration under this section); and (iii) 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 Effective DateDate of the Recapitalization Agreement); provided, 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) hereof shall initially be based upon Schedule 2.7

Conversion Price. The conversion price for any conversion pursuant to Section 12.2 shall be the lowest nominal or effective price per share paid by the Other Investors who acquire purchase such Convertible Preferred Stock (with the exception of shares issuable upon exercise of the Initial Bridge Warrants). The conversion price for any conversion into any equity or debt security pursuant to Section 12.1 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 Effective Date of the Recapitalization Agreement (with the exception of (x) purchases of up to 35,000 shares of Common Stock pursuant to certain options to purchase, at a purchase price of $0.0001, that were outstanding on the Effective Date of the Recapitalization Agreement and held by members of the Board of Directors, as set forth in Schedule 2.7(d) to the Recapitalization Agreement, and (y) shares issuable upon the exercise of the Initial 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 Maker outstanding on or after the Effective Date of the Recapitalization Agreement or granted, issued, extended or otherwise made available by the Maker at any time on or after the date one year prior to the Effective Date of the Recapitalization 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 Effective Date of the Recapitalization Agreement and held by members of the Board of Directors as set forth in Schedule 2.7(d) to the Recapitalization Agreement, and (y) the Initial Bridge Warrants, each of which shall be excluded from consideration under this section); and (iii) 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 Effective DateDate of the Recapitalization Agreement); provided, 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) hereof shall initially be based upon Schedule 2.72.7(d) to the Recapitalization Agreement. All other rights, preferences, privileges, terms and conditions received by Holder in connection with any conversion and/or any securities issued by the Maker to Holder upon conversion, shall be no less favorable to Holder than the rights, preferences, privileges, terms and conditions any other investor in the Maker has received or is entitled to receive with respect to the security into which Holder is converting pursuant to any other security, instrument, promise, undertaking, commitment, agreement or letter of intent of the Maker, 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 or any issuance of the security or other instrument to that investor or are provided separately, at any time on or after one year prior to the Effective Date of the Recapitalization Agreement. In regard to each conversion hereunder, the Maker hereby agrees to take and/or arrange for all necessary corporate and related action to enable the execution of each such conversion elected by Holder.

Conversion Price. The conversion price for any conversion pursuant to Section 12.2 shall be the lowest nominal or effective price per share paid by the Other Investors who acquire such Convertible Preferred Stock (with the exception of shares issuable upon exercise of the Initial Bridge Warrants). The conversion price for any conversion into any equity or debt security pursuant to Section 12.1 shall be the lowest of (i) the lowest nominal or effective price The initial Series B Conversion Price shall be $3.00 per share paid by any investor at any of Common (subject to adjustment in the event of stock splits, stock dividends, stock combinations, recapitalizations and like occurrences). In order to prevent dilution of the conversion rights granted under this Section 7, the Series B Conversion Price shall be subject to adjustment from time to time pursuant to this Section 7(b). (ii) If and whenever on or after the date one year Series B Original Issuance Date the Corporation issues or sells or, in accordance with this Section 7, is deemed to have issued or sold, any shares of its Common for a consideration per share less than the Series B Conversion Price in effect immediately prior to the Effective Date time of such issuance, then immediately upon such issuance or sale or deemed issuance or sale the Series B Conversion Price shall be reduced to the conversion price determined by dividing (with A) the exception sum of (x1) purchases the product derived by multiplying the Series B Conversion Price in effect immediately prior to such issuance or sale by the number of up to 35,000 shares of Common Stock pursuant Deemed Outstanding immediately prior to certain options to purchasesuch issuance or sale, at plus (2) the consideration, if any, received by the Corporation upon such issuance or sale, by (B) the number of shares of Common Deemed Outstanding immediately after such issue or sale. (iii) Notwithstanding the foregoing, there shall be no adjustment in the Series B Conversion Price as a purchase price result of $0.0001, that were outstanding on the Effective Date and held by members any issuance or sale (or deemed issuance or sale) of: (A) shares of Common issued upon conversion of the Board of Directors, as set forth in Schedule 2.7(d) to the Recapitalization Agreement, and Pari Passu Preferred; (yB) shares issuable of Common issued upon the exercise of the Initial Bridge Warrants; (C) shares of Common issued upon the exercise of Options or other Convertible Securities outstanding as of the First Closing Date; (D) securities issued pursuant to a Board-approved (including at least one of the Investor Directors) bona fide acquisition of an entity by merger, each purchase of which shall be excluded from consideration substantially all of the assets or other reorganization; (E) shares of Common issued to Catalyst pursuant to the Options granted under this sectionthe Catalyst Letter Agreements; (F) shares of Common or other securities issued as a dividend or distribution on, or in connection with a split of or recapitalization of, any of the capital stock of the Corporation; (G) up to an aggregate of 250,000 shares of Common reserved for issuance per year pursuant to the Option Plan (subject to adjustment in the event of stock splits, stock dividends, stock combinations, recapitalizations and like occurrences) and shares of Common reserved for issuance pursuant to the Option Plan in lieu of the repayment of certain salary deferrals as approved by a majority of the Board (including at least one of the Investor Directors), which foregoing shares may be subject to Options or restricted stock awards granted under the Option Plan; provided that any Options that expire or terminate unexercised or any restricted stock awards that are repurchased by the Corporation pursuant to the terms of such award shall not be counted toward the maximum number set forth in this subparagraph (iiG) the lowest nominal unless and until such shares are subject to new restricted stock awards (or effective price at which any investor is entitled to acquire shares (including, without limitation, through purchase, exchange, conversion or exercisenew Options) pursuant to any other security, instrument, or promise, undertaking, commitment, agreement or letter of intent the terms of the Maker outstanding on or after the Effective Date or granted, issued, extended or otherwise made available by the Maker at any time on or after the date one year prior to the Effective Date Option Plan; (regardless of whether currently exercisable or convertibleH) (with the exception of (x) certain options to purchase up to 35,000 shares of Common Stock at issued or issuable (including options to acquire such shares of Common) .to suppliers or third-party service providers in connection with the provision of goods or services pursuant to transactions in the ordinary course of business and approved by a purchase price of $0.0001 that were outstanding on the Effective Date and held by members majority of the Board Board, including at least one of the Investor Directors; (I) shares of Common issued or issuable in connection with bona-fide sponsored research, collaboration, technology license, development, OEM, marketing or other similar agreements or strategic partnerships or joint ventures entered into in the ordinary course of business and approved by a majority of the Board, including at least one of the Investor Directors (and by at least a majority of the shares of Pari Passu Preferred and Conversion Common Shares, voting as set forth a single class on a Common Equivalent Basis, then outstanding, if required pursuant to Section 3(c)); (J) securities issued in Schedule 2.7(dconnection with a Qualified IPO; or (K) Permitted Issuances; provided that the aggregate number of shares of Common issued or issuable pursuant to the Recapitalization Agreement, clauses (H) and (yI) the Initial Bridge Warrants, each of which above shall be excluded from consideration under this section); and (iii) the lesser of $0.10 per share or 35% discount to the average closing price per share of the Common Stock during not exceed 100,000 in any twenty consecutive trading days (beginning with the twenty consecutive trading days prior to the Effective Date); provided, 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) hereof shall initially be based upon Schedule 2.7twelve-month period;

Conversion Price. The conversion price for any conversion pursuant to Section 12.2 shall be the lowest nominal or effective price per share paid by the Other Investors who acquire such Convertible Preferred Stock (with the exception of shares issuable upon exercise of the Initial Bridge Warrants). The conversion price for any conversion into any equity or debt security pursuant to Section 12.1 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 Effective Date (with the exception of (x) purchases of up to 35,000 shares of Common Stock pursuant to certain options to purchase, at a purchase price of $0.0001, that were outstanding on the Effective Date and held by members of the Board of Directors, as set forth in Schedule 2.7(d) to the Recapitalization Agreement, and (y) shares issuable upon the exercise of the Initial 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 Maker outstanding on or after the Effective Date or granted, issued, extended or otherwise made available by the Maker at any time on or after the date one year prior to the Effective Date (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 Effective Date and held by members of the Board of Directors as set forth in Schedule 2.7(d) to the Recapitalization Agreement, and (y) the Initial Bridge Warrants, each of which shall be excluded from consideration under this section); and (iii) the lesser of $0.10 per share or 35% discount to the average closing price per share of the Common Stock EXECUTION VERSION during any twenty consecutive trading days (beginning with the twenty consecutive trading days prior to the Effective Date); provided, 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) hereof shall initially be based upon Schedule 2.72.7(d) to the Recapitalization Agreement. All other rights, preferences, privileges, terms and conditions received by Holder in connection with any conversion and/or any securities issued by the Maker to Holder upon conversion, shall be no less favorable to Holder than the rights, preferences, privileges, terms and conditions any other investor in the Maker has received or is entitled to receive with respect to the security into which Holder is converting pursuant to any other security, instrument, promise, undertaking, commitment, agreement or letter of intent of the Maker, 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 or any issuance of the security or other instrument to that investor or are provided separately, at any time on or after one year prior to the Effective Date. In regard to each conversion hereunder, the Maker hereby agrees to take and/or arrange for all necessary corporate and related action to enable the execution of each such conversion elected by Holder.

Conversion Price. The conversion price for any conversion pursuant to Section 12.2 Conversion Price shall be (x) during the lowest nominal period of 75 days commencing on the SEC Effective Date, the greater of (1) $25.00 (subject to equitable adjustment from time to time on terms reasonably acceptable to the Majority Holders for (a) stock splits, (b) stock dividends, (c) combinations, (d) capital reorganizations, (e) issuance to all holders of Common Stock of rights or effective price per share paid warrants to purchase shares of Common Stock, (f) the distribution by the Other Investors who acquire such Convertible Preferred Company to all holders of Common Stock of evidences of indebtedness of the Company or cash (with other than regular quarterly cash dividends), (g) tender offers by the exception Company or any subsidiary of the Company for, or other repurchases of shares issuable upon exercise of, Common Stock in one or more transactions which, individually or in the aggregate, result in the purchase of more than ten percent of the Initial Bridge Warrants). The conversion price for any conversion into any equity or debt security pursuant Common Stock outstanding and (h) similar events relating to Section 12.1 shall be the lowest of (i) the lowest nominal or effective price per share paid by any investor at any time Common Stock, in each such case which occur on or after the date one year prior of the Note Purchase Agreement) and (2) the Computed Price for the date on which the applicable Conversion Notice is given to the Company and (y) from the date which is 76 days after the SEC Effective Date (and thereafter, the Computed Price for the date on which the applicable Conversion Notice is given to the Company. Notwithstanding any other provision of this Section 2.2, if in connection with a proposed acquisition of the exception Company or its business, whether by means of tender offer, merger, consolidation or purchase of all or substantially all of the assets of the Company the Company notifies the Holder as contemplated by Section 8(c)(5) of the Note Purchase Agreement that the Registration Statement may not be used for any period by the Holder for resale of the shares of Common Stock acquired upon conversion of this Note or of any Payment Shares, then for a period of six Trading Days commencing on the first full Trading Day that such Registration Statement once again is available for such resales, the Conversion Price shall be the lower of (x) purchases of up to 35,000 shares of Common Stock pursuant to certain options to purchase, at a purchase price of $0.0001, that were outstanding on the Effective Date and held by members of the Board of Directors, as set forth Conversion Price determined in Schedule 2.7(d) to the Recapitalization Agreement, and (y) shares issuable upon the exercise of the Initial 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 Maker outstanding on or after the Effective Date or granted, issued, extended or otherwise made available by the Maker at any time on or after the date one year prior to the Effective Date (regardless of whether currently exercisable or convertible) (accordance with the exception first sentence 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 Effective Date and held by members of the Board of Directors as set forth in Schedule 2.7(d) to the Recapitalization Agreement, this Section 2.2 and (y) the Initial Bridge Warrants, each of which shall be excluded from consideration under this section); and (iii) the lesser of $0.10 per share or 35% discount to the average closing last reported sale price per share of the Common Stock during any twenty consecutive on the Trading Day immediately preceding the date the Company so notified the Holder (or, if no trading days (beginning with of the twenty consecutive trading days prior to Common Stock occurred on such date, on the Effective Datethen most recent Trading Day next preceding the date the Company so notified the Holder on which Trading Date the Common Stock traded); provided, 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) hereof shall initially be based upon Schedule 2.7.

Conversion Price. The conversion price for any conversion pursuant to Section 12.2 shall be the lowest nominal or effective price per share paid by the Other Investors who acquire such Convertible Preferred Stock (with the exception of shares issuable upon exercise of the Initial Bridge Warrants). The conversion price for any conversion into any equity or debt security pursuant to Section 12.1 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 Effective Date (with the exception of (x) purchases of up to 35,000 shares of Common Stock pursuant to certain options to purchase, at a purchase price of $0.0001, that were outstanding on the Effective Date and held by members of the Board of Directors, as set forth in Schedule 2.7(d) to the Recapitalization Agreement, and (y) shares issuable upon the exercise of the Initial 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 Maker outstanding on or after the Effective Date or granted, issued, extended or otherwise made available by the Maker at any time on or after the date one year prior to the Effective Date (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 Effective Date and held by members of the Board of Directors as set forth in Schedule 2.7(d) to the Recapitalization Agreement, and (y) the Initial Bridge Warrants, each of which shall be excluded from consideration under this section); and (iii) 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 Effective Date); provided, 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) hereof shall initially be based upon Schedule 2.7EXECUTION VERSION

Conversion Price. The conversion price for any conversion pursuant to Section 12.2 shall be the lowest nominal or effective price per share paid by the Other Investors who acquire such Convertible Preferred Stock (with the exception of shares issuable upon exercise of the Initial Bridge Warrants). The conversion price for any conversion into any equity or debt security pursuant to Section 12.1 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 Effective Date (with the exception of (x) purchases of up to 35,000 shares of Common Stock pursuant to certain options to purchase, at a purchase price of $0.0001, that were outstanding on the Effective Date and held by members of the Board of Directors, as set forth in Schedule 2.7(d) to the Recapitalization Agreement, and (y) shares issuable upon the exercise of the Initial 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 Maker outstanding on or after the Effective Date or granted, issued, extended or otherwise made available by the Maker at any time on or after the date one year prior to the Effective Date (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 Effective Date and held by members of the Board of Directors as set forth in Schedule 2.7(d) to the Recapitalization Agreement, and (y) the Initial Bridge Warrants, each of which shall be excluded from consideration under this section); and (iii) 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 Effective Date); provided, 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) hereof shall initially be based upon Schedule 2.7Stock

Conversion Price. The (i) In order to prevent dilution of the conversion price for any conversion rights granted under this paragraph 5, the Conversion Price shall be subject to adjustment from time to time pursuant to Section 12.2 shall be this paragraph (f). (ii) With respect to shares of any Subseries if and whenever on or after the lowest nominal Original Date of Issue of shares of such Subseries the Corporation issues or effective sells, or in accordance with paragraph (g) is deemed to have issued or sold, any shares of its Common Stock without consideration or at a price per share paid less than the Conversion Price of shares of such Subseries in effect immediately prior to such issuance or sale (or deemed issuance or sale), then in each such case, such Conversion Price, upon each such issuance or sale, except as hereinafter provided, shall be lowered so as to be equal to an amount determined by multiplying such Conversion Price in effect immediately prior to such issuance or sale by the Other Investors who acquire such Convertible Preferred Stock (with following fraction: P + N ----------- P + F where P = the exception number of shares issuable upon of Common Stock outstanding immediately prior to such issuance or sale, assuming the exercise or conversion of the Initial Bridge Warrants). The conversion price all outstanding securities exercisable for any conversion or convertible into any equity or debt security pursuant to Section 12.1 shall be the lowest of (i) the lowest nominal or effective price per share paid by any investor Common Stock at any time on or after the date one year prior to of such calculation N = the Effective Date (with the exception number of (x) purchases of up to 35,000 shares of Common Stock which the net aggregate consideration, if any, received by the Corporation for the total number of such additional shares of Common Stock so issued or sold would purchase at such Conversion Price in effect immediately prior to such issuance or sale F = the number of additional shares of Common Stock so issued or sold. (iii) Notwithstanding the foregoing, there shall be no adjustment in the Conversion Price under this paragraph 5 as a result of (A) any issue or sale (or deemed issue or sale under paragraph (g)(i)) of Common Stock to employees, consultants, contractors, officers and directors of the Corporation, pursuant to certain options to purchase, at a purchase price (or upon exercise of $0.0001, that were outstanding on Options issued pursuant to) compensation plans or arrangements approved by the Effective Date and held Corporation's Board of Directors so long as the per share consideration determined in good faith by members of the Board of DirectorsDirectors to have been received for such shares or the exercise price of any such Options is not less than the fair market value (as determined in accordance with the applicable compensation plan or arrangement) of a share of Common Stock on the date such shares or Options are issued, (B) any issuance of shares of Common Stock upon conversion of any Preferred Stock, (C) the issuance of any rights ("Rights") under the Corporation's Rights Agreement dated as of February 11, 2000, as set forth amended (the "Rights Plan"), (D) with respect to any holder of Series C-1 Preferred Stock, the issuance of securities as contemplated by the Rights Plan as a result of such holder becoming an Acquiring Person within the meaning of the Rights Plan, (E) any issuance or exercise of warrants or other rights issued to banks or institutional lenders in Schedule 2.7(dconnection with debt financings, equipment financings or similar transactions or to strategic partners in primarily non-financing transactions, in all such cases as approved by the Board of Directors of the Corporation so long as the aggregate number of such shares of Common Stock does not exceed 400,000 (as adjusted for any stock splits, stock dividends, reverse stock splits, share consolidations or other similar transactions) to in the Recapitalization Agreementaggregate, and or (yF) shares issuable the issuance of Common Stock upon the exercise of the Initial 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 Maker outstanding on or after the Effective Date or granted, issued, extended or otherwise made available by the Maker at any time on or after the date one year prior to the Effective Date (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 Options outstanding on the Effective Original Date and held by members of the Board Issue of Directors as set forth in Schedule 2.7(d) to the Recapitalization Agreement, and (y) the Initial Bridge Warrants, each of which shall be excluded from consideration under this section); and (iii) 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 Effective Date); provided, 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) hereof shall initially be based upon Schedule 2.7such Subseries.

Conversion Price. The conversion price for any conversion pursuant to Section 12.2 shall be the lowest nominal or effective price per share paid by the Other Investors who acquire such Convertible Preferred Stock (with the exception of shares issuable upon exercise of the Initial Bridge Warrants). The conversion price for any conversion into any equity or debt security pursuant to Section 12.1 shall be the lowest of (i) Subject to and upon compliance with the lowest nominal or effective price per share paid by any investor provisions hereof, the holder of the Convertible Note shall have the right, at such holder's option, at any time after May 11, 2000 to convert all or any part of the principal amount of such Convertible Note into Common Stock, subject to the provisions of subsection 8A(ii) below, at the price of the lesser of (A) the average Market Price of the Common Stock as posted on the NASD OTC Bulletin Board over a period of twenty (20) trading days preceding any applicable date of conversion (the "Conversion Date") less a discount of 20%, or (B) the average Market Price of the Common Stock as posted on the NASD OTC Bulletin Board over a period of twenty (20) days preceding any applicable Conversion Date (such price being referred to herein as the "Initial Conversion Price"), provided that, in the event of (A) above, no discount shall apply unless such average market price of the Common Stock is at least $5.00 per share, or, in case an adjustment of such price has taken place pursuant to the further provisions of this Section 8, then at the price as last adjusted and in effect at the date such Convertible Note is surrendered for conversion (such Conversion Price or (if any adjustment has been made pursuant to this Section 8) such price as last adjusted, as the case may be, being referred to herein as the "Conversion Price"). (ii) Subject to and upon compliance with the provisions hereof, the holder of the Convertible Note shall have the right to convert, to the extent permissible under the Securities Act, (A) 40% of the aggregate principal amount of the Convertible Note into Registered Securities (as defined in the Registration Rights Agreement) on or after May 11, 2000, such percentage increasing by increments of 10% monthly on the date one year prior eleventh of each month until November 11, 2000, at which time the holder of Convertible Note shall have the right to convert all of the Effective Date principal amount of the Convertible Note into Registered Securities, or (B) all of the principal amount of the Convertible Note in the event that the Company enters into a registration rights agreement with Sands Brothers which contains terms more favorable than those provided herein; provided, that in the exception of (x) purchases of up event that the Company fails to 35,000 register the necessary shares of Common Stock to comply with the above, but not in the event that such registration is not permissible under the Securities Act in the opinion of the Securities and Exchange Commission after best efforts to register such shares have been made by the Company, the holder of the Convertible Note shall be entitled to receive the value in cash of an additional two percent (2%) of the Registered Securities such holder was entitled to receive pursuant to certain options to purchasethe terms hereof for the first thirty (30) days and three percent (3%) of such Registered Securities for each thirty (30) days thereafter until the Company has fully complied with this Section 8 and the terms and conditions of the Registration Rights Agreement. For example, at assuming a purchase price Conversion Price of $0.000116 per share, the Investor would be entitled to receive $4,000 in cash for the first thirty (30) days after May 11, 2000 calculated as follows: $200,000 (40% of the Convertible Note) divided by $16 (Conversion Price) equals 12,500 shares, multiplied by 2% penalty equals 250 additional shares of Registered Securities, multiplied by $16 equals $4,000. In accordance with the terms of the Registration Rights Agreement, the Company shall as expeditiously as practicable after the Closing Date prepare and file with the Securities and Exchange Commission a registration statement under the Securities Act, as more fully described in the Registration Rights Agreement. (iii) In order to exercise such conversion right the holder shall surrender (in person or by mail) the Convertible Note to the Company at its office designated in subsection 10E (or such other office or agency as the Company may designate by notice in writing to the holder of the Convertible Note), together with a written notice that were outstanding the holder elects to convert the Convertible Note, or a specified principal amount thereof, in accordance with the provisions of this Section 8. Such notice shall also state the name or names (with addresses) in which the certificate or certificates for Common Stock shall be issued. To the extent permitted by law, such conversion shall be deemed to have been effected and the Conversion Price shall be determined as of the close of business on the Effective Date and held date by members of which the Board of Directors, as events set forth in Schedule 2.7(dthis subsection 8A(iii) to the Recapitalization Agreement, and (y) shares issuable upon the exercise of the Initial Bridge Warrants, each of which have occurred. The Convertible Note surrendered for conversion 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 Maker outstanding on or after the Effective Date or granted, issued, extended or otherwise made available accompanied by the Maker at any time on or after the date one year prior to the Effective Date (regardless necessary instruments 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 Effective Date and held by members of the Board of Directors as set forth in Schedule 2.7(d) to the Recapitalization Agreement, and (y) the Initial Bridge Warrants, each of which shall be excluded from consideration under this section); and (iii) 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 Effective Date); provided, 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) hereof shall initially be based upon Schedule 2.7transfer thereof.

Conversion Price. The conversion price for any conversion pursuant If the Common Shares are (a) then admitted to Section 12.2 shall be trading on a Relevant Stock Exchange, the lowest nominal or effective price per share paid by the Other Investors who acquire such Convertible Preferred Stock (with the exception of shares issuable upon exercise of the Initial Bridge Warrants). The conversion price for any conversion into any equity or debt security pursuant to Section 12.1 shall be the lowest of higher of: (i) the lowest nominal or effective price per share paid by any investor Current Market Price of a Common Share, converted into U.S. dollars at any time on or after the date one year prior to the Effective Date (with the exception of (x) purchases of up to 35,000 shares of Common Stock pursuant to certain options to purchase, at a purchase price of $0.0001, that were outstanding on the Effective Date and held by members of the Board of Directors, as set forth in Schedule 2.7(d) to the Recapitalization Agreement, and (y) shares issuable upon the exercise of the Initial Bridge Warrants, each of which shall be excluded from consideration under this section), Prevailing Rate; (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 Maker outstanding on or after the Effective Date or granted, issued, extended or otherwise made available by the Maker at any time on or after the date one year prior to the Effective Date (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 Effective Date and held by members of the Board of Directors as set forth in Schedule 2.7(d) to the Recapitalization Agreement, and (y) the Initial Bridge Warrants, each of which shall be excluded from consideration under this section)Floor Price; and (iii) the lesser nominal value of $0.10 per share or 35% discount to a Common Share at the average closing price per share time of conversion (being EUR0.50 on the Common Stock during any twenty consecutive trading days (beginning with the twenty consecutive trading days prior to the Effective Settlement Date), converted into U.S. dollars at the Prevailing Rate; providedin each case on the Trigger Event Notice Date; or (b) not then admitted to trading on a Relevant Stock Exchange, however, that in no event shall the price per share calculated pursuant to this clause higher of (ii) and (iii) above. For the avoidance of doubt, the conversion into U.S. dollars at the Prevailing Rate described above shall in no circumstances imply that any Common Share will be issued at a price of less than $.04 its nominal value expressed in the Share Currency. Floor price: USD Floor price: USD 2.555 per sharecommon Share, approx. 66% of share price at 5th May 2021 closing. (EUR 3.225; exchange rate of 1.200 USD/EUR, 5th May 2021.) Pre-emptive Rights: The Dollar Notes do not grant holders pre-emption rights in respect of any possible future issues of Parity Securities or any other securities by Banco Santander or any Subsidiary. Waiver of Set-Off: Subject to applicable law, neither any holder or beneficial owner of the Dollar Notes nor the Trustee acting on behalf of the holders of the Dollar Notes may exercise, claim or plead any right of set-off, netting, compensation or retention in respect of any amount owed to it by Banco Santander in respect of, or arising under, or in connection with, the Dollar Notes or the Base Indenture and the First Supplemental Indenture and each holder and beneficial owner of the Dollar Notes, by virtue of its holding of any Dollar Notes or any interest therein, and the Trustee acting on behalf of such holders, shall be deemed to have waived all such rights of set-off, netting, compensation or retention. If, notwithstanding the above, any amounts due and payable to any holder or beneficial owner of a Dollar Note or any interest therein by Banco Santander in respect of, or arising under, the Dollar Notes are discharged by set-off, such holder or beneficial owner shall, subject to applicable law, immediately pay an amount equal to the amount of such discharge to Banco Santander (or, if a Liquidation Event shall have occurred, the liquidator or administrator of Banco Santander, as the case may be) and, until such time as payment is made, shall hold an amount equal to such amount in trust (where possible) or otherwise for Banco Santander (or the liquidator or administrator of Banco Santander, as the case may be) and, accordingly, any such discharge shall be deemed not to have taken place. Enforcement Events and Remedies: There are no events of default under the Dollar Notes. In addition, under the terms of the Base Indenture, as supplemented by the First Supplemental Indenture, neither the Trigger Conversion nor the exercise of the Bail-in Power by the Relevant Resolution Authority or any action in compliance therewith will be an Enforcement Event. The calculation required Dollar Notes are perpetual securities in respect of which there is no fixed redemption date or maturity date. Holders of the Dollar Notes may not require any redemption of the Dollar Notes at any time. U.S. Federal Income Tax Considerations: For a discussion of the material U.S. federal income tax considerations for the ownership and disposition of the Dollar Notes by clause (ii) hereof U.S. investors, see “Taxation—U.S. Federal Income Tax Considerations—Taxation of Contingent Convertible Capital Securities” in the base prospectus and in the prospectus supplement. That discussion does not describe all of the tax consequences that may be relevant in the light of a U.S. investor’s particular circumstances. Listing: New York Stock Exchange. Applicable Law: Law of the State of New York, except that the authorization and execution by Banco Santander of the Base Indenture, the First Supplemental Indenture and the Dollar Notes, and certain provisions of the Dollar Notes, the Base Indenture and the First Supplemental Indenture related to the subordination of the Dollar Notes, as well as the price at which Dollar Notes can be issued, certain minimum requirements with respect to the conversion price and the legal regime applicable for the exclusion of the pre-emptive rights shall initially be based upon Schedule 2.7governed by and construed in accordance with Spanish law. Risk Factors: Investors should read the Risk Factors in the preliminary prospectus supplement dated May 6, 2021 and base prospectus dated May 14, 2020. Trustee and Principal Paying Agent and Calculation Agent: The Bank of New York Mellon, London Branch.

Conversion Price. The (a) At the option of the Registered Holder hereof, all or any part of the unpaid principal amount of this Debenture may, upon execution of the Notice of Conversion attached hereto and the surrender of this Debenture to the Company for conversion in accordance with Section 5(b) of the Securities Purchase Agreement, be convertible into fully-paid, nonassessable shares of Common Stock, at a conversion price for any conversion pursuant (the "Conversion Price") equal to Section 12.2 shall be the lowest nominal or effective price per share paid by the Other Investors who acquire such Convertible Preferred Stock (with the exception of shares issuable upon exercise of the Initial Bridge Warrants). The conversion price for any conversion into any equity or debt security pursuant to Section 12.1 shall be the lowest lesser 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 Effective Date (with the exception of (x) purchases of up to 35,000 shares of Common Stock pursuant to certain options to purchase, at a purchase price of $0.0001, that were outstanding on the Effective Date and held by members 110% of the Board of Directors, as set forth in Schedule 2.7(d) to average Closing Bid Price for the Recapitalization Agreement, and (y) shares issuable upon the exercise of the Initial 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 Maker outstanding on or after the Effective Date or granted, issued, extended or otherwise made available by the Maker at any time on or after the date one year prior to the Effective Date (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 Effective Date and held by members of the Board of Directors as set forth in Schedule 2.7(d) to the Recapitalization Agreement, and (y) the Initial Bridge Warrants, each of which shall be excluded from consideration under this section); and (iii) 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 five trading days prior to the Effective Date); provided, however, that in no event shall the price per share calculated pursuant to this clause Closing Date (iii$3.40) be less than $.04 per share. The calculation required by clause or (ii) hereof 87.5% of the average of the three (3) lowest Closing Bid Prices of the Common Stock for the thirty (30) trading days prior to the date of the delivery of the Notice of Conversion (the "Applicable Conversion Price"). During any thirty trading day period in which the closing market price of the Common Stock on each trading day is less than two dollars per share, the Registered Holder may convert no more than 15% of the initial face amount of the debenture within any such thirty-day period. If, during any period following the issuance of this Debenture, as a result of (x) the Registration Statement not being effective by the Required Effective Date, as such terms are defined in the Registration Rights Agreement, or (y) the occurrence of any of the events set forth in Section 3(e) or 3(f) of the Registration Rights Agreement, dated as of the above date, by and between the Company and the Registered Holder (the "Registration Rights Agreement"), the Registered Holder is not able to sell shares of Common Stock issuable upon conversion of, or in lieu of interest payments on, this Debenture pursuant to a registration statement filed pursuant to such agreement, the Registered Holder shall initially be based upon Schedule 2.7have the right, for any purpose under this Debenture during such period and thereafter, to cancel any Notice of Conversion issued during the time period that the Registered Holder has not been able to sell shares of Common Stock because such registration statement is not effective. "Conversion Date" shall have the meaning given such term in Section 5(b) of the Securities Purchase Agreement.

Conversion Price. The conversion price for any conversion pursuant to Section 12.2 shall be the lowest nominal or effective price per share paid by the Other Investors who acquire such Convertible Preferred Stock (with the exception of shares issuable upon exercise of the Initial Bridge Warrants). The conversion price for any conversion into any equity or debt security pursuant to Section 12.1 shall be the lowest of (i) the lowest nominal or effective price The initial Series C Conversion Price shall be $3.00 per share paid by any investor at any of Common (subject to adjustment in the event of stock splits, stock dividends, stock combinations, recapitalizations and like occurrences). In order to prevent dilution of the conversion rights granted under this Section 7, the Series C Conversion Price shall be subject to adjustment from time to time pursuant to this Section 7(b). (ii) If and whenever on or after the date one year Series C Original Issuance Date the Corporation issues or sells or, in accordance with this Section 7, is deemed to have issued or sold, any shares of its Common for a consideration per share less than the Series C Conversion Price in effect immediately prior to the Effective Date time of such issuance, then immediately upon such issuance or sale or deemed issuance or sale the Series C Conversion Price shall be reduced to the conversion price determined by dividing (with A) the exception sum of (x1) purchases the product derived by multiplying the Series C Conversion Price in effect immediately prior to such issuance or sale by the number of up to 35,000 shares of Common Stock pursuant Deemed Outstanding immediately prior to certain options to purchasesuch issuance or sale, at plus (2) the consideration, if any, received by the Corporation upon such issuance or sale, by (B) the number of shares of Common Deemed Outstanding immediately after such issue or sale. (iii) Notwithstanding the foregoing, there shall be no adjustment in the Series C Conversion Price as a purchase price result of $0.0001, that were outstanding on the Effective Date and held by members any issuance or sale (or deemed issuance or sale) of: (A) shares of Common issued upon conversion of the Board of Directors, as set forth in Schedule 2.7(d) to the Recapitalization Agreement, and Pari Passu Preferred; (yB) shares issuable of Common issued upon the exercise of the Initial Bridge Warrants; (C) shares of Common issued upon the exercise of Options or other Convertible Securities outstanding as of the First Closing Date; (D) securities issued pursuant to a Board-approved (including at least one of the Investor Directors) bona fide acquisition of an entity by merger, each purchase of which shall be excluded from consideration substantially all of the assets or other reorganization; (E) shares of Common issued to Catalyst pursuant to the Options granted under this sectionthe Catalyst Letter Agreements; (F) shares of Common or other securities issued as a dividend or distribution on, or in connection with a split of or recapitalization of, any of the capital stock of the Corporation; (G) up to an aggregate of 250,000 shares of Common reserved for issuance per year pursuant to the Option Plan (subject to adjustment in the event of stock splits, stock dividends, stock combinations, recapitalizations and like occurrences) and shares of Common reserved for issuance pursuant to the Option Plan in lieu of the repayment of certain salary deferrals as approved by a majority of the Board (including at least one of the Investor Directors), which foregoing shares may be subject to Options or restricted stock awards granted under the Option Plan; provided that any Options that expire or terminate unexercised or any restricted stock awards that are repurchased by the Corporation pursuant to the terms of such award shall not be counted toward the maximum number set forth in this subparagraph (iiG) the lowest nominal unless and until such shares are subject to new restricted stock awards (or effective price at which any investor is entitled to acquire shares (including, without limitation, through purchase, exchange, conversion or exercisenew Options) pursuant to any other security, instrument, or promise, undertaking, commitment, agreement or letter of intent the terms of the Maker outstanding on or after the Effective Date or granted, issued, extended or otherwise made available by the Maker at any time on or after the date one year prior to the Effective Date Option Plan; (regardless of whether currently exercisable or convertibleH) (with the exception of (x) certain options to purchase up to 35,000 shares of Common Stock at issued or issuable (including options to acquire such shares of Common) to suppliers or third-party service providers in connection with the provision of goods or services pursuant to transactions in the ordinary course of business and approved by a purchase price of $0.0001 that were outstanding on the Effective Date and held by members majority of the Board Board, including at least one of the Investor Directors; (I) shares of Common issued or issuable in connection with bona-fide sponsored research, collaboration, technology license, development, OEM, marketing or other similar agreements or strategic partnerships or joint ventures entered into in the ordinary course of business and approved by a majority of the Board, including at least one of the Investor Directors (and by at least a majority of the shares of Pari Passu Preferred and Conversion Common Shares, voting as set forth a single class on a Common Equivalent Basis, then outstanding, if required pursuant to Section 3(c)); (J) securities issued in Schedule 2.7(dconnection with a Qualified IPO; or (K) Permitted Issuances; provided that the aggregate number of shares of Common issued or issuable pursuant to the Recapitalization Agreement, clauses (H) and (yI) the Initial Bridge Warrants, each of which above shall be excluded from consideration under this section); and (iii) the lesser of $0.10 per share or 35% discount to the average closing price per share of the Common Stock during not exceed 100,000 in any twenty consecutive trading days (beginning with the twenty consecutive trading days prior to the Effective Date); provided, 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) hereof shall initially be based upon Schedule 2.7twelve-month period;

Conversion Price. The conversion price for any conversion pursuant to Section 12.2 shall be the lowest nominal or effective price per share paid by the Other Investors who acquire such Convertible Preferred Stock (with the exception of shares issuable upon exercise of the Initial Bridge Warrants). The conversion price for any conversion into any equity or debt security pursuant to Section 12.1 shall be the lowest of (i) the lowest nominal or effective price The initial Series A Conversion Price shall be $3.7999696 per share paid by any investor at any of Common (subject to adjustment in the event of stock splits, stock dividends, stock combinations, recapitalizations and like occurrences). In order to prevent dilution of the conversion rights granted under this Section 7, the Series A Conversion Price shall be subject to adjustment from time to time pursuant to this Section 7(b). (ii) If and whenever on or after the date one year Series A Original Issuance Date the Corporation issues or sells or, in accordance with this Section 7, is deemed to have issued or sold, any shares of its Common for a consideration per share less than the Series A Conversion Price in effect immediately prior to the Effective Date time of such issuance, then immediately upon such issuance or sale or deemed issuance or sale the Series A Conversion Price shall be reduced to the conversion price determined by dividing (with A) the exception sum of (x1) purchases the product derived by multiplying the Series A Conversion Price in effect immediately prior to such issuance or sale by the number of up to 35,000 shares of Common Stock pursuant Deemed Outstanding immediately prior to certain options to purchasesuch issuance or sale, at plus (2) the consideration, if any, received by the Corporation upon such issuance or sale, by (B) the number of shares of Common Deemed Outstanding immediately after such issue or sale. (iii) Notwithstanding the foregoing, there shall be no adjustment in the Series A Conversion Price as a purchase price result of $0.0001, that were outstanding on the Effective Date and held by members any issuance or sale (or deemed issuance or sale) of: (A) shares of Common issued upon conversion of the Board of Directors, as set forth in Schedule 2.7(d) to the Recapitalization Agreement, and Series A Preferred; (yB) shares issuable of Common issued upon the exercise of Options or other Convertible Securities outstanding as of the Initial Bridge WarrantsFirst Closing Date; (C) securities issued pursuant to a Board-approved (including at least one of the Investor Directors) bona fide acquisition of an entity by merger, each purchase of which shall be excluded from consideration substantially all of the assets or other reorganization; (D) shares of Common issued to Catalyst pursuant to the Options granted under this sectionthe Catalyst Letter Agreements; (E) shares of Common or other securities issued as a dividend or distribution on, or in connection with a split of or recapitalization of, any of the capital stock of the Corporation; (F) up to an aggregate of 250,000 shares of Common reserved for issuance per year pursuant to the Option Plan (subject to adjustment in the event of stock splits, stock dividends, stock combinations, recapitalizations and like occurrences) and shares of Common reserved for issuance pursuant to the Option Plan in lieu of the repayment of certain salary deferrals as approved by a majority of the Board (including at least one of the Investor Directors), which foregoing shares may be subject to Options or restricted stock awards granted under the Option Plan; provided that any Options that expire or terminate unexercised or any restricted stock awards that are repurchased by the Corporation pursuant to the terms of such award shall not be counted toward the maximum number set forth in this subparagraph (iiF) the lowest nominal unless and until such shares are subject to new restricted stock awards (or effective price at which any investor is entitled to acquire shares (including, without limitation, through purchase, exchange, conversion or exercisenew Options) pursuant to any other security, instrument, or promise, undertaking, commitment, agreement or letter of intent the terms of the Maker outstanding on or after the Effective Date or granted, issued, extended or otherwise made available by the Maker at any time on or after the date one year prior to the Effective Date Option Plan; (regardless of whether currently exercisable or convertibleG) (with the exception of (x) certain options to purchase up to 35,000 shares of Common Stock at issued or issuable (including options to acquire such shares of Common) to suppliers or third-party service providers in connection with the provision of goods or services pursuant to transactions in the ordinary course of business and approved by a purchase price of $0.0001 that were outstanding on the Effective Date and held by members majority of the Board Board, including at least one of the Investor Directors; (H) shares of Common issued or issuable in connection with bona-fide sponsored research, collaboration, technology license, development, OEM, marketing or other similar agreements or strategic partnerships or joint ventures entered into in the ordinary course of business and approved by a majority of the Board, including at least one of the Investor Directors (and by at least a majority of the shares of Pari Passu Preferred and Conversion Common Shares, voting as set forth a single class on a Common Equivalent Basis, then outstanding, if required pursuant to Section 3(c)); or (I) securities issued in Schedule 2.7(dconnection with a Qualified IPO; provided that the aggregate number of shares of Common issued or issuable pursuant to clauses (G) to the Recapitalization Agreement, and (yH) the Initial Bridge Warrants, each of which above shall be excluded from consideration under this section); and (iii) the lesser of $0.10 per share or 35% discount to the average closing price per share of the Common Stock during not exceed 100,000 in any twenty consecutive trading days (beginning with the twenty consecutive trading days prior to the Effective Date); provided, 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) hereof shall initially be based upon Schedule 2.7twelve-month period;