Common use of Mandatory Conversion Clause in Contracts

Mandatory Conversion. Notwithstanding anything herein to the contrary, subject to the conversion limitations set forth in Section 3.2, if, after the date a registration statement covering the resale of the Conversion Shares is declared effective, and so long as such registration statement remains effective, (A) the closing price for any ten (10) consecutive trading days (a "Conversion Period") exceeds 135% of the then effective Fixed Conversion Price, the Holder will, within ten (10) trading days of any such Conversion Period, convert all or part of the then outstanding Principal Amount of this Note plus all accrued, but unpaid interest thereon. The Holder shall only be required to effect such a conversion referred to in the immediately preceding sentence if each of the following shall be true: (i) there is an effective registration statement pursuant to which the Holder is permitted to utilize the prospectus thereunder to resell all of the Conversion Shares issued to the Holder (or such Conversion Shares are eligible under Rule 144 of the Securities Act); (ii) there is a sufficient number of authorized but unissued and otherwise unreserved shares of Common Stock for the issuance of all the Conversion Shares as are issuable to the Holder upon such conversion of this Note pursuant to this Section 3.6 and (iii) the amount of this Note to be so converted pursuant to this Section 3.6 (when combined with the amount of the secured convertible minimum borrowing note issued by the Borrower to the Holder on the date hereof to be so converted pursuant to Section 3.6 thereof and the amount of any other promissory note issued by the Borrower to the Holder required to be similarly manditorily converted) does not exceed ten percent (10%) of the aggregate dollar trading volume of the Common Stock during the Conversion Period.

Mandatory Conversion. Notwithstanding anything herein Subject to the contraryRight of Revocation as described in Section 10(e) below, upon the occurrence of a Liquidity Event, all of the outstanding and unpaid principal amount of this Note shall convert into fully paid and non-assessable shares of Common Stock, as such Common Stock exists on the date hereof, or any shares of capital stock or other securities of the Company into which such Common Stock shall hereafter be changed or reclassified at the Conversion Price (as defined below) determined as provided herein (the “Conversion”); provided, however, that in no event shall this Note convert in excess of that portion of this Note upon conversion of which the sum of (1) the number of shares of Common Stock beneficially owned by the Holder and its affiliates (other than shares of Common Stock which may be deemed beneficially owned through the ownership of the unconverted portion of the Notes or the unexercised or unconverted portion of any other security of the Company subject to a limitation on conversion or exercise analogous to the limitations contained herein) and (2) the number of shares of Common Stock issued upon the conversion limitations set forth in Section 3.2, if, after the date a registration statement covering the resale of the Conversion Shares portion of this Note with respect to which the determination of this proviso is declared effectivebeing made, would result in beneficial ownership by the Holder and so long as such registration statement remains effective, (A) the closing price for any ten (10) consecutive trading days (a "Conversion Period") exceeds 135its affiliates of more than 4.99% of the then effective Fixed Conversion Priceoutstanding shares of Common Stock. For purposes of the proviso to the immediately preceding sentence, beneficial ownership shall be determined in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Regulations 13D-G thereunder, except as otherwise provided in clause (1) of such proviso, provided, further, however, that the limitations on conversion may be waived by the Holder will(up to a maximum of 9.99%) upon, within ten (10) trading days of any such Conversion Period, convert all or part at the election of the then outstanding Principal Amount Holder, not less than 61 days’ prior notice to the Company, and the provisions of the conversion limitation shall continue to apply until such 61st day (or such later date, as determined by the Holder, as may be specified in such notice of waiver). The number of shares of Common Stock to be issued upon conversion of this Note plus all accrued, but unpaid interest thereonshall be determined by dividing the Conversion Amount (as defined below) by the applicable Conversion Price on such conversion date (the “Conversion Date”). The Holder term “Conversion Amount” means, with respect to any conversion of this Note, the sum of (1) the principal amount of this Note to be converted in such conversion plus (2) at the Holder’s option, accrued and unpaid interest, if any, on such principal amount at the interest rates provided in this Note to the Conversion Date, provided however, that the Company shall only be required have the right to effect such a conversion pay any or all interest in cash plus (3) at the Holder’s option, Default Interest, if any, on the amounts referred to in the immediately preceding sentence if each of the following shall be true: clauses (i1) there is an effective registration statement pursuant to which the Holder is permitted to utilize the prospectus thereunder to resell all of the Conversion Shares issued to the Holder and/or (or such Conversion Shares are eligible under Rule 144 of the Securities Act2); (ii) there is a sufficient number of authorized but unissued and otherwise unreserved shares of Common Stock for the issuance of all the Conversion Shares as are issuable to the Holder upon such conversion of this Note pursuant to this Section 3.6 and (iii) the amount of this Note to be so converted pursuant to this Section 3.6 (when combined with the amount of the secured convertible minimum borrowing note issued by the Borrower to the Holder on the date hereof to be so converted pursuant to Section 3.6 thereof and the amount of any other promissory note issued by the Borrower to the Holder required to be similarly manditorily converted) does not exceed ten percent (10%) of the aggregate dollar trading volume of the Common Stock during the Conversion Period.

Mandatory Conversion. Notwithstanding anything herein The Preferred Stock shall be mandatorily convertible into shares of AA Group Common Stock at the times and in the amounts set forth below. On each of the 30th, 60th, 90th and 120th days following the Effective Date (each such date, a “Conversion Date”), Preferred Stock with an aggregate stated value equal to (i) 25% of the contraryTotal Initial Stated Value plus (ii) all dividends accrued through such date on all of the outstanding shares of Preferred Stock (the stated value of such shares and dividends, the “Mandatory Conversion Amount”), shall be automatically converted into shares of AA Group Common Stock at a conversion price equal to 96.5% of the VWAP, calculated as of such date, subject to the collar described below (the “Preferred Conversion Price”); provided, however, that the aggregate stated value of Preferred Stock to be converted on the final Conversion Date shall be reduced by an amount equal to the aggregate stated value of any Preferred Stock converted pursuant to the optional conversion limitations set forth described below. The Debtors shall cooperate with the counsel to Ad Hoc Committee of AMR Corporation Creditors to implement in Section 3.2good faith the conversion mechanics described in this “Mandatory Conversion” and in “Optional Conversion” below. Optional Conversion: Preferred Stock, ifup to $250 million (the “Maximum Optional Conversion Amount”), after the date a registration statement covering the resale may be converted at any time in each of the Conversion Shares is declared effectivePeriods by the holders thereof at the Preferred Conversion Price calculated as of such date; provided, and so long as such registration statement remains effectivehowever, that in no event shall the aggregate stated value of Preferred Stock converted (Aincluding pursuant to the mandatory conversion described above) during any Conversion Period exceed the closing price for any ten sum of (10x) consecutive trading days (a "Conversion Period") exceeds 13525% of the then effective Fixed Conversion PriceTotal Initial Stated Value plus all accrued dividends and (y) $250 million. In the event that, the Holder will, within ten (10) trading days of during any such Conversion Period, convert all or part the aggregate stated value of the then outstanding Principal Amount of this Note plus all accruedPreferred Stock for which such optional conversion is duly elected exceeds $250 million, but unpaid interest thereon. The Holder shall only such Preferred Stock will be required to effect such converted on a conversion referred to in the immediately preceding sentence if each of the following shall be true: “first come first serve” basis, and (i) there is an effective registration statement pursuant to which any such election made after the Holder is permitted to utilize the prospectus thereunder to resell all of the Optional Conversion Shares issued to the Holder (or such Conversion Shares are eligible under Rule 144 of the Securities Act); Cutoff Date shall not be given any effect and (ii) there is a sufficient number of authorized but unissued and otherwise unreserved shares of Common with respect to any Preferred Stock for which an optional conversion election is duly made by the issuance of all the Optional Conversion Shares as are issuable to the Holder upon such conversion of this Note pursuant to this Section 3.6 and (iii) Cutoff Date, the amount of this Note to such Preferred Stock that is converted shall be so converted pursuant to this Section 3.6 cut back pro rata (when combined with among all shares for which the amount of the secured convertible minimum borrowing note issued by the Borrower to the Holder election was duly made on the date hereof to be so converted pursuant to Section 3.6 thereof and the amount of any other promissory note issued by the Borrower to the Holder required to be similarly manditorily convertedsuch date) does not exceed ten percent (10%) of the aggregate dollar trading volume of the Common Stock during the Conversion Period.to

Mandatory Conversion. Notwithstanding anything herein to the contrary, subject to the conversion limitations set forth in Section 3.2, if, after the date a registration statement covering the resale of the Conversion Shares is declared effective, and so long as such registration statement remains effective, (A) the closing price for any ten (10) consecutive trading days (a "Conversion Period") exceeds 135% of the then effective Fixed Conversion Price, the Holder will, within ten (10) trading days of any such Conversion Period, convert all or part of the then outstanding Principal Amount of this Note plus all accrued, but unpaid interest thereon. The Holder shall only be required to effect such a conversion referred to in the immediately preceding sentence if each of the following shall be true: (i) there is an effective registration statement pursuant to which the Holder is permitted to utilize the prospectus thereunder to resell all of the Conversion Shares issued to the Holder (or such Conversion Shares are eligible under Rule 144 of the Securities Act); (ii) there is a sufficient number of authorized but unissued and otherwise unreserved shares of Common Stock for the issuance of all the Conversion Shares as are issuable to the Holder upon such conversion of this Note pursuant to this Section 3.6 3.8 and (iii) the amount of this Note to be so converted pursuant to this Section 3.6 3.8 (when combined with the amount of the secured convertible minimum borrowing term note issued by the Borrower to the Holder on the date hereof to be so converted pursuant to Section 3.6 thereof and the amount of any other promissory note issued by the Borrower to the Holder required to be similarly manditorily converted) does not exceed ten percent (10%) of the aggregate dollar trading volume of the Common Stock during the Conversion Period.

Mandatory Conversion. Notwithstanding anything herein to The Notes shall be automatically converted into Common Stock on the contrary, subject to first date (the conversion limitations set forth in Section 3.2, if, "Mandatory Conversion Date") on or after the date a registration statement covering the resale of the Conversion Shares is declared effective15th Trading Day following October 15, and so long as such registration statement remains effective2004, (A) the closing price for any ten (10) consecutive trading days (a "Conversion Period") exceeds 135% of the then effective Fixed Conversion Price, the Holder will, within ten (10) trading days of any such Conversion Period, convert all or part of the then outstanding Principal Amount of this Note plus all accrued, but unpaid interest thereon. The Holder shall only be required to effect such a conversion referred to in the immediately preceding sentence if each of the following shall be trueon which: (i) there the average of the Closing Price (as defined in Section 14.6(g)) of the Common Stock on 15 consecutive preceding Trading Days is an effective registration statement pursuant equal to which the Holder is permitted to utilize the prospectus thereunder to resell all or greater than 110% of the Conversion Shares issued to the Holder (or such Conversion Shares are eligible under Rule 144 of the Securities Act); Price and (ii) there is a the Company has sufficient number of authorized but unissued and otherwise unreserved shares of Common Stock for (or other securities into which the issuance Notes are then convertible) authorized to execute the Mandatory Conversion (as defined below). The Notes shall be converted into that number of all fully paid and nonassessable shares of Common Stock (or other securities into which the Conversion Shares as Notes are issuable to then convertible) obtained by dividing the Holder upon such conversion of this Note pursuant to this Section 3.6 and (iii) the amount of this Note to be so converted pursuant to this Section 3.6 (when combined with the aggregate principal amount of the secured convertible minimum borrowing note issued Notes by the Borrower Conversion Price in effect at such time rounded to the Holder on nearest 1/100,000th of a share (with 0.000005 being rolled upward)(the "Mandatory Conversion"). The Company will monitor the date hereof to be so converted pursuant to Section 3.6 thereof and the amount of any other promissory note issued by the Borrower to the Holder required to be similarly manditorily converted) does not exceed ten percent (10%) of the aggregate dollar trading volume Closing Price of the Common Stock. Upon the occurrence of Mandatory Conversion, the Company shall complete the appropriate instruction form for conversion pursuant to the Depository's book-entry conversion program and follow the other procedures set forth in such program. Any unpaid interest on the Notes accrued as of the Mandatory Conversion Date shall be paid in cash to the former holders of such Notes on the next succeeding interest payment date. After the Mandatory Conversion, the Notes will no longer represent Indebtedness of the Company, will no longer accrue interest or require the Company to make any payment of principal, and the Company's obligations to make any further payments with respect to the Notes will terminate (except for under this Section 14.3). The Company will cause to be issued in book-entry form shares of Common Stock during sufficient to effect the Mandatory Conversion. The shares of Common Stock issued as a result of the Mandatory Conversion Periodshall be credited through the Depository's book-entry conversion program to the respective account of each Noteholder as of the Mandatory Conversion Date.

Mandatory Conversion. Notwithstanding anything herein At any time on or after the Effective Date, Borrower’s Common Stock achieves a Closing Price of at least $27.00 per share for any four (4) Trading Days within an eight (8) Trading Day period, the outstanding principal on this Note shall automatically, without any further action by the Holder, convert into shares Common Stock at the Conversion Price then in effect (the “Mandatory Conversion”) provided, however, to the contraryextent that the Mandatory Conversion would result in the Holder exceeding the Beneficial Ownership Limitation, subject to the conversion limitations set forth in Section 3.2, if, after the date a registration statement covering the resale then only such portion of the outstanding principal on this Note shall automatically convert to such extent the issuance of such number of Conversion Shares is declared effective, and so long as such registration statement remains effective, (A) the closing price for any ten (10) consecutive trading days (a "Conversion Period") exceeds 135% of the then effective Fixed Conversion Price, issuable does not cause the Holder will, within ten (10) trading days of any such Conversion Period, convert all or part of to exceed the then outstanding Principal Amount of this Note plus all accrued, but unpaid interest thereon. The Holder shall only be required to effect such a conversion referred to in the immediately preceding sentence if each of the following shall be true: (i) there is an effective registration statement pursuant to which the Holder is permitted to utilize the prospectus thereunder to resell all of the Conversion Shares issued to the Holder Beneficial Ownership Limitation (or beneficial ownership of such Conversion Shares are eligible under Rule 144 of the Securities Act); (ii) there is a sufficient number of authorized but unissued and otherwise unreserved shares of Common Stock as a result of such Mandatory Conversion to such extent) and such further Mandatory Conversion to such extent shall be held in abeyance for the issuance of all the Conversion Shares Holder until such time, if ever, as are issuable to its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation) and shall be converted immediately upon such conversion of this Note pursuant to this Section 3.6 and (iii) either the amount of this Note to be so converted pursuant to this Section 3.6 (when combined with the amount waiver of the secured convertible minimum borrowing note issued Beneficial Ownership limitation by the Borrower Holder in accordance with its terms, or the time at which the Beneficial Ownership limitation would not them be exceeded. Notwithstanding the foregoing, if a Mandatory Conversion would be held in abeyance, the Company shall have the right to require the Holder on to convert into a newly designated class of Company Preferred Stock equivalent in all respects to Common Stock, which maintains the date hereof Beneficial Ownership limitation without further consent of the Holder provided all Note Holders are subject to be so converted pursuant to Section 3.6 thereof such Mandatory Conversion and the amount of any other promissory note issued by the Borrower to the Holder required to be similarly manditorily converted) does not exceed ten percent (10%) of the aggregate dollar trading volume of the Common Stock during the Conversion PeriodNotes and Other Notes are extinguished.

Mandatory Conversion. Notwithstanding anything herein to the contrary, subject to the conversion limitations set forth in Section 3.2, if, after the date a registration statement covering the resale of the Conversion Shares is declared effective, and so long as such registration statement remains effective, (A) the average closing price of the Common Stock as reported by Bloomberg, L.P. on the Principal Market for any ten six (106) consecutive trading days (a "Conversion PeriodCONVERSION PERIOD") exceeds 135% of the then effective Fixed Conversion Priceshall be greater than or equal to $27.50, the Holder will, within ten (10) trading days of any such Conversion Period, convert all or part of the then outstanding Principal Amount of this Note plus all accrued, but unpaid interest thereonthereon (the date of such mandatory conversion, a "MANDATORY CONVERSION DATE") . The Holder shall only be required to effect such a conversion referred to in the immediately preceding sentence at most once per month if each of the following shall be true: (i) there is an effective registration statement pursuant to which the Holder is permitted to utilize the prospectus thereunder to resell all of the Conversion Shares issued to the Holder (or such Conversion Shares are eligible under Rule 144 of the Securities Act); (ii) there is a sufficient number of authorized but unissued and otherwise unreserved shares of Common Stock for the issuance of all the Conversion Shares as are issuable to the Holder upon such conversion of this Note pursuant to this Section 3.6 and (iii) the amount of this Note to be so converted pursuant to this Section 3.6 (when combined with the amount of the secured convertible minimum borrowing note issued by the Borrower to the Holder on the date hereof to be so converted pursuant to Section 3.6 thereof and the amount of any other promissory note issued by the Borrower to the Holder required to be similarly manditorily convertedconverted on the Mandatory Conversion Date) does not exceed ten percent (10%) exceed20% of the aggregate dollar average daily trading volume of the Common Stock for the five (5) day trading period immediately preceding the applicable Mandatory Conversion Date. There shall be only one Conversion Period and Mandatory Conversion Date during the Conversion Periodany 30 trading day period.

Mandatory Conversion. Notwithstanding anything herein to the contrary, subject to the conversion limitations set forth in Section 3.2, if, after the date a registration statement covering the resale of the Conversion Shares is declared effective, and so long as such registration statement remains effective, (A) the average closing price for any ten eleven (1011) consecutive trading days (a "“Conversion Period"”) exceeds 135115% of the then effective Fixed Conversion Price, the Holder will, within ten eleven (1011) trading days of any such Conversion Period, convert all (or part a portion thereof if such conversion would be in excess of the volume limitations set forth in clause (iii) of the immediately succeeding sentence) of the then outstanding Principal Amount of this Note plus all accrued, but unpaid interest thereonrelated thereto. The Holder shall only be required to effect such a conversion referred to in the immediately preceding sentence if each of the following shall be true: (i) there is an effective registration statement pursuant to which the Holder is permitted to utilize the prospectus thereunder to resell all of the Conversion Shares issued to the Holder (or such Conversion Shares are eligible under Rule 144 of the Securities Act); (ii) there is a sufficient number of authorized but unissued and otherwise unreserved shares of Common Stock for the issuance of all the Conversion Shares as are issuable to the Holder upon such conversion of this Note pursuant to this Section 3.6 3.8 and (iii) the amount of this Note to be so converted pursuant to this Section 3.6 3.8 (when combined with the amount of the secured convertible minimum borrowing term note issued by the Borrower Company to the Holder on the date hereof dated September 11, 2003 to be so converted pursuant to Section 3.6 2.5 thereof and the amount of any other promissory note issued by the Borrower to the Holder required to be similarly or manditorily converted) does not exceed ten twenty five percent (1025%) of the aggregate dollar trading volume of the Common Stock during the Conversion Period. Notwithstanding anything to the contrary contained in this Section 3.8, the Holder shall not be required to effect such a conversion referred to in this Section 3.8 more than one time in any twenty-two (22) day trading period.

Mandatory Conversion. Notwithstanding anything herein to the contrary, subject to the conversion limitations set forth in Section 3.2, if, after the date a registration statement covering the resale of the Conversion Shares is declared effective, and so long as such registration statement remains effective, (A) the closing price for any ten sixty (1060) consecutive trading days (a "Conversion Period") exceeds 135200% of the then effective Fixed Conversion Price, the Holder will, within ten (10) trading days of any such Conversion Period, convert all or part of the then outstanding Principal Amount of this Note plus all accrued, but unpaid interest thereon. The Holder shall only be required to effect such a conversion referred to in the immediately preceding sentence if each of the following shall be true: (i) there is an effective registration statement pursuant to which the Holder is permitted to utilize the prospectus thereunder to resell all of the Conversion Shares issued to the Holder (or such Conversion Shares are eligible and unrestricted under Rule 144 of the Securities Act); (ii) there is a sufficient number of authorized but unissued and otherwise unreserved shares of Common Stock for the issuance of all the Conversion Shares as are issuable to the Holder upon such conversion of this Note pursuant to this Section 3.6 and (iii) the amount of this Note to be so converted pursuant to this Section 3.6 (when combined with the amount of the secured convertible minimum borrowing note issued by the Borrower to the Holder on the date hereof to be so converted pursuant to Section 3.6 3.8 thereof and the amount of any other promissory note issued by the Borrower to the Holder required to be similarly manditorily converted) does not exceed ten percent (10%) of the aggregate dollar trading volume of the Common Stock during the Conversion Period.

Mandatory Conversion. Notwithstanding anything herein to the contrary, subject to the conversion limitations set forth in Section 3.2, if, after the date a registration statement covering the resale of the Conversion Shares is declared effective, and so long as such registration statement remains effective, (A) the closing price for any ten sixty (1060) consecutive trading days (a "“Conversion Period"”) exceeds 135200% of the then effective Fixed Conversion Price, the Holder will, within ten (10) trading days of any such Conversion Period, convert all or part of the then outstanding Principal Amount of this Note plus all accrued, but unpaid interest thereon. The Holder shall only be required to effect such a conversion referred to in the immediately preceding sentence if each of the following shall be true: (i) there is an effective registration statement pursuant to which the Holder is permitted to utilize the prospectus thereunder to resell all of the Conversion Shares issued to the Holder (or such Conversion Shares are eligible and unrestricted under Rule 144 of the Securities Act); (ii) there is a sufficient number of authorized but unissued and otherwise unreserved shares of Common Stock for the issuance of all the Conversion Shares as are issuable to the Holder upon such conversion of this Note pursuant to this Section 3.6 3.8 and (iii) the amount of this Note to be so converted pursuant to this Section 3.6 3.8 (when combined with the amount of the secured convertible minimum borrowing term note issued by the Borrower to the Holder on the date hereof to be so converted pursuant to Section 3.6 thereof and the amount of any other promissory note issued by the Borrower to the Holder required to be similarly manditorily converted) does not exceed ten percent (10%) of the aggregate dollar trading volume of the Common Stock during the Conversion Period.

Mandatory Conversion. Notwithstanding anything herein to The Notes shall be automatically converted into Common Stock on the contrary, subject to first date (the conversion limitations set forth in Section 3.2, if, “Mandatory Conversion Date”) on or after the date a registration statement covering the resale of the Conversion Shares is declared effective15th Trading Day following October 15, and so long as such registration statement remains effective2005, (A) the closing price for any ten (10) consecutive trading days (a "Conversion Period") exceeds 135% of the then effective Fixed Conversion Price, the Holder will, within ten (10) trading days of any such Conversion Period, convert all or part of the then outstanding Principal Amount of this Note plus all accrued, but unpaid interest thereon. The Holder shall only be required to effect such a conversion referred to in the immediately preceding sentence if each of the following shall be trueon which: (i) there the average of the Closing Price (as defined in Section 14.6(g)) of the Common Stock on 15 consecutive preceding Trading Days is an effective registration statement pursuant equal to which the Holder is permitted to utilize the prospectus thereunder to resell all or greater than 110% of the Conversion Shares issued to the Holder (or such Conversion Shares are eligible under Rule 144 of the Securities Act); Price and (ii) there is a the Company has sufficient number of authorized but unissued and otherwise unreserved shares of Common Stock for (or other securities into which the issuance Notes are then convertible) authorized to execute the Mandatory Conversion (as defined below). The Notes shall be converted into that number of all fully paid and nonassessable shares of Common Stock (or other securities into which the Conversion Shares as Notes are issuable to then convertible) obtained by dividing the Holder upon such conversion of this Note pursuant to this Section 3.6 and (iii) the amount of this Note to be so converted pursuant to this Section 3.6 (when combined with the aggregate principal amount of the secured convertible minimum borrowing note issued Notes by the Borrower Conversion Price in effect at such time rounded to the Holder on nearest 1/100,000th of a share (with 0.000005 being rolled upward) (the date hereof to be so converted pursuant to Section 3.6 thereof and “Mandatory Conversion”). The Company will monitor the amount of any other promissory note issued by the Borrower to the Holder required to be similarly manditorily converted) does not exceed ten percent (10%) of the aggregate dollar trading volume Closing Price of the Common Stock. Upon the occurrence of Mandatory Conversion, the Company shall complete the appropriate instruction form for conversion pursuant to the Depository’s book-entry conversion program and follow the procedures set forth in such program. Any interest on the Notes accrued as of the Mandatory Conversion Date shall be paid in cash to the former holders of such Notes on the next succeeding interest payment date. After the Mandatory Conversion, the Notes will no longer represent Indebtedness of the Company, will no longer accrue interest or require the Company to make any payment of principal, and the Company’s obligations to make any further payments with respect to the Notes will terminate (except for under this Section 14.3). The Company will cause to be issued in book-entry form shares of Common Stock during sufficient to effect the Mandatory Conversion Periodand shall issue a check or cash in respect of any fractional interest in respect of a share of Common Stock arising upon such conversion, as provided in Section 14.4. The shares of Common Stock issued as a result of the Mandatory Conversion shall be credited through the Depository’s book-entry conversion program to the respective account of each Noteholder as of the Mandatory Conversion Date.

Mandatory Conversion. Notwithstanding anything herein Subject to the contraryprovisions of this Section 7, for so long as ADSs are listed on the Trading Market, if at any date and from time to time on or after the Original Issuance Date, (1) the Daily VWAP of each of twenty-four (24) or more Trading Days within a period of thirty (30) consecutive Trading Days ending on such date equals or exceeds the Conversion Threshold for the applicable Trading Day and (2) the Daily VWAP of the last Trading Day of such thirty (30)-day period equals or exceeds the Conversion Threshold for such last Trading Day (collectively, the “Mandatory Conversion Trigger Event”), the Company shall have the right to notify the holders of Series A-1 Preferred Shares in accordance with the requirements and procedures set out in Section 7.3(b), whereupon all but not less than all of the outstanding Series A-1 Preferred Shares (including any fraction of a Series A-1 Preferred Share) held by such holders, plus (a) any unpaid, accrued and accumulated dividends thereon as of the immediately preceding Dividend Payment Date and (b) unless the Company pays such amounts in cash on the Conversion Date, any unpaid, accrued and accumulated dividends thereon that have accrued from the immediately preceding Dividend Payment Date up to, but excluding, the Conversion Date, shall be converted into Conversion Securities; provided, that the Company shall not be entitled to exercise such mandatory conversion right under this Section 7.2 unless: all the Conversion Securities to be received upon conversion are either (A) available for resale under Rule 144 promulgated by the U.S. Securities and Exchange Commission under the Securities Act without volume limitations, or (B) registered for resale by the holders thereof on a delayed or continuous basis on an effective registration statement, there is no stop order with respect to such registration statement, the Conversion Securities will not be subject to any holdback or underwriter lock-up upon conversion, and the conversion limitations set forth Company reasonably believes that such availability for resale under Rule 144 or registration statement will be continuously available for resale of such Conversion Securities for the seven (7) Trading Days following the Conversion Securities Delivery Date (which 7 Trading Days cannot be the last seven Trading Days of August or December) (the “7-Day Period”); the public trading of such Conversion Securities on the Trading Market shall not be subject to any blackout restrictions under the Company’s xxxxxxx xxxxxxx policy or deferral (as such term is used in Section 3.21.2(d) of the Registration Rights Agreement) for at least the 7-Day Period following the Conversion Securities Delivery Date, if, after during the date a registration statement covering entirety of which the resale Company’s directors who are not executive officers are not subject to any trading restrictions under the Company’s xxxxxxx xxxxxxx policies; and any material non-public information that has been provided by the Company or its authorized representatives to the Holders’ Representative would no longer be material non-public information as of the Conversion Securities Delivery Date and for the duration of the 7-Day Period. For the avoidance of doubt, if the Company elects, at its sole discretion, for any unpaid, accrued and accumulated dividends that have accrued since the immediately preceding Dividend Payment Date with respect to Series A-1 Preferred Shares is declared effectivebeing converted to be paid in cash, the Company shall pay such unpaid, accrued and accumulated dividends to the holder(s) in cash on the Conversion Date. The number of Conversion Securities into which any holder’s Series A-1 Preferred Shares shall be converted shall be determined by (i) multiplying the number of Series A-1 Preferred Shares (including any fraction of a Series A-1 Preferred Share) to be converted by the sum of (x) the Liquidation Value plus (y) any unpaid, accrued and accumulated dividends as of the immediately preceding Dividend Payment Date with respect to such Series A-1 Preferred Shares plus (z) if the Company does not pay such amounts in cash on the Conversion Date, then all such unpaid, accrued and accumulated dividends that have accrued since the immediately preceding Dividend Payment Date up to, but excluding, the Conversion Date, with respect to such Series A-1 Preferred Shares and then (ii) dividing the result by the Conversion Price in effect immediately prior to such conversion, and so long in addition thereto, such holder shall receive cash in lieu of any fractional shares as such registration statement remains effective, (A) set out in Section 7.3(d). In the closing price for any ten (10) consecutive trading days (a "Conversion Period") exceeds 135% event that the listing of the Conversion Securities on an international securities exchange other than the Trading Market shall occur as to which the provisions of Section 7.2 above are not strictly applicable, then effective Fixed Conversion Price, the Holder will, within ten (10) trading days Company and holders of any such Conversion Period, convert all or part a majority of the then outstanding Principal Amount of this Note plus all accruedSeries A-1 Preferred Shares, but unpaid interest thereon. The Holder acting reasonably and in good faith, shall only be required to effect such a conversion referred to in determine the immediately preceding sentence if each of the following shall be true: (i) there is an effective registration statement pursuant to which the Holder is permitted to utilize the prospectus thereunder to resell all of the Conversion Shares issued to the Holder (or such Conversion Shares are eligible under Rule 144 of the Securities Act); (ii) there is a sufficient number of authorized but unissued and otherwise unreserved shares of Common Stock for the issuance of all the Conversion Shares as are issuable to the Holder upon such conversion of this Note pursuant to this Section 3.6 and (iii) the amount of this Note appropriate adjustment to be so converted pursuant to this Section 3.6 (when combined made, on a basis consistent with the amount of the secured convertible minimum borrowing note issued by the Borrower to the Holder on the date hereof to be so converted pursuant to essential intent and principles established in Section 3.6 thereof and the amount of any other promissory note issued by the Borrower to the Holder required to be similarly manditorily converted) does not exceed ten percent (10%) of the aggregate dollar trading volume of the Common Stock during the Conversion Period7.2 above.

Mandatory Conversion. Notwithstanding anything herein If at any time beginning with the fiscal quarter of the Company ending on June 30, 2007, (the "Mandatory Conversion Eligibility Date"), (i) the Company has (A) been Profitable for two (2) consecutive fiscal quarters (not taking into account any non-cash charges related to the contraryissuance and sale of the Preferred Shares) (each such quarter, a "Positive Quarter") and (B) filed 25 ANDAs including 12 from a list agreed upon by the Required Holders and the Company, and (ii) the Equity Conditions shall have been satisfied or waived in writing by the Holder on each day during the period commencing on the Mandatory Conversion Notice Date and ending on the Mandatory Conversion Date (each, as defined below), the Company shall have the right to require the Holder to convert up to all of the Conversion Amount into fully paid, validly issued and nonassessable shares of Common Stock in accordance with Section 3(c) hereof at the Conversion Rate as of the Mandatory Conversion Date (as defined below) (a "Mandatory Conversion"). The Company may exercise its right to require conversion under this Section 9(a) on one occasion by delivering within not more than two (2) Trading Days following the end of the public announcement of such second consecutive Positive Quarter a written notice thereof by facsimile and overnight courier to all, but not less than all, of the Holders of Preferred Shares and the Transfer Agent (the "Mandatory Conversion Notice" and the date all of the Holders received such notice by facsimile is referred to as the "Mandatory Conversion Notice Date"). The Mandatory Conversion Notice shall be irrevocable. The Mandatory Conversion Notice shall state (i) the Trading Day selected for the Mandatory Conversion in accordance with Section 9(a), which Trading Day shall be at least twenty (20) Business Days but not more than sixty (60) Business Days following the Mandatory Conversion Notice Date (the "Mandatory Conversion Date"), (ii) the number of Preferred Shares of such Holder subject to the Mandatory Conversion, (iii) the aggregate Conversion Amount of the Preferred Shares subject to Mandatory Conversion from all of the Holders of the Preferred Shares pursuant to this Section 9 and (iv) the number of shares of Common Stock to be issued to such Holder on the Mandatory Conversion Date. Notwithstanding the foregoing, the Company may not effect a Mandatory Conversion of any applicable Holder under this Section if the number of shares of Common Stock issuable upon conversion limitations of the Preferred Shares of any Holder subject to a Mandatory Conversion would cause such Holder's beneficial ownership of the Common Stock to exceed the Maximum Percentage as set forth in Section 3.2, if, after the date a registration statement covering the resale of the Conversion Shares is declared effective, and so long as such registration statement remains effective, (A) the closing price for any ten (10) consecutive trading days (a "Conversion Period") exceeds 135% of the then effective Fixed Conversion Price, the Holder will, within ten (10) trading days of any such Conversion Period, convert all or part of the then outstanding Principal Amount of this Note plus all accrued, but unpaid interest thereon. The Holder shall only be required to effect such a conversion referred to in the immediately preceding sentence if each of the following shall be true: (i) there is an effective registration statement pursuant to which the Holder is permitted to utilize the prospectus thereunder to resell all of the Conversion Shares issued to the Holder (or such Conversion Shares are eligible under Rule 144 of the Securities Act); (ii) there is a sufficient number of authorized but unissued and otherwise unreserved shares of Common Stock for the issuance of all the Conversion Shares as are issuable to the Holder upon such conversion of this Note pursuant to this Section 3.6 and (iii) the amount of this Note to be so converted pursuant to this Section 3.6 (when combined with the amount of the secured convertible minimum borrowing note issued by the Borrower to the Holder on the date hereof to be so converted pursuant to Section 3.6 thereof and the amount of any other promissory note issued by the Borrower to the Holder required to be similarly manditorily converted) does not exceed ten percent (10%) of the aggregate dollar trading volume of the Common Stock during the Conversion Period5.

Mandatory Conversion. Notwithstanding anything herein If, at any time after the second anniversary of the Issuance Date, all of the Required Conditions (as defined below) are satisfied, then, at the option of the Company exercised by the delivery of written notice to all, but not less than all, of the holders of the Notes (a “Mandatory Conversion Notice”), the Company may require the holders of the Notes to convert the remaining principal of the Notes into Common Stock pursuant to the contrary, subject applicable conversion procedures in Section 3(c)(i) (a “Mandatory Conversion”); provided that each holder of Notes shall only be required to convert its pro rata share (based on the ratio that the aggregate outstanding principal balance of the Notes then held by such holder bears to the conversion aggregate outstanding principal balance of all Notes then held by all holders) of an amount of principal of all Notes so converted in a Mandatory Conversion such that the number of shares of Common Stock issuable to all such holders of Notes in such Mandatory Conversion does not exceed, in the aggregate, the total daily trading volume as reported on Bloomberg of the Common Stock on the Principal Market (or such other Eligible Market on which the Common Stock is then principally traded) for the 20 consecutive Trading Days immediately preceding the Conversion Date specified in the Mandatory Conversion Notice; and, provided further, that no holder may be forced to convert any portion of its Notes in violation of the limitations set forth in Section 3.2, if, after 3(d) hereof. In the date a registration statement covering the resale event any holder of the Conversion Shares Notes is declared effective, and so long as such registration statement remains effective, (A) the closing price for any ten (10) consecutive trading days (a "Conversion Period") exceeds 135% of the then effective Fixed Conversion Price, the Holder will, within ten (10) trading days of any such Conversion Period, convert all or part of the then outstanding Principal Amount of this Note plus all accrued, but unpaid interest thereon. The Holder shall only be not required to effect convert the entire principal of its Notes due to the limitations set forth in this Section 3(c)(ii) or in Section 3(d) hereof, such a conversion referred to in the immediately preceding sentence if each of the following unconverted Notes shall be true: (i) there is an effective registration statement pursuant to which the Holder is permitted to utilize the prospectus thereunder to resell remain outstanding with all of the Conversion Shares issued to rights and privileges set forth herein or therein. As used in this Section 3(c)(ii), the Holder (or such Conversion Shares are eligible under Rule 144 “Required Conditions” shall consist of the Securities Act); (ii) there is a sufficient number of authorized but unissued and otherwise unreserved shares of Common Stock for the issuance of all the Conversion Shares as are issuable to the Holder upon such conversion of this Note pursuant to this Section 3.6 and (iii) the amount of this Note to be so converted pursuant to this Section 3.6 (when combined with the amount of the secured convertible minimum borrowing note issued by the Borrower to the Holder on the date hereof to be so converted pursuant to Section 3.6 thereof and the amount of any other promissory note issued by the Borrower to the Holder required to be similarly manditorily converted) does not exceed ten percent (10%) of the aggregate dollar trading volume of the Common Stock during the Conversion Period.following:

Mandatory Conversion. Notwithstanding anything herein If the price of the Company’s Common Stock shall remain at a closing price of $3.50 or more for a period of twenty consecutive Trading Days, the Company shall have the right to require the contraryHolder to convert all, subject to the conversion limitations set forth in Section 3.2or any part, if, after the date a registration statement covering the resale of the Conversion Shares is declared effective, and so long as such registration statement remains effective, (A) the closing price for any ten (10) consecutive trading days (a "Conversion Period") exceeds 135% of the then effective Fixed Conversion Price, the Holder will, within ten (10) trading days of any such Conversion Period, convert all or part of the then outstanding Principal Amount of this Note plus all accruedinto fully paid, but unpaid interest thereonvalidly issued and nonassessable shares of Common Stock in accordance with Section 3(c) hereof at the Conversion Rate with respect to the Conversion Amount (the “Mandatory Conversion”). The Holder shall Company may only be required to effect such a conversion referred to in the immediately preceding sentence Mandatory Conversion if each of the following Equity Conditions shall be true: have been met (iunless waived in writing by the Holder) and subject to the Holder’s Conversion Limitations set forth above in Section 3(d), if applicable. “Equity Conditions” means, during the period in question, (a) the Company shall have duly honored all conversions scheduled to occur or occurring by virtue of one or more Conversion Notices of the Holder, if any, (b)(i) there is an effective registration statement Registration Statement pursuant to which the Holder is permitted to utilize the prospectus thereunder to resell all of the shares of Common Stock issuable pursuant to the Note (and the Company believes, in good faith, that such effectiveness will continue uninterrupted for the foreseeable future) or (ii) all of the Conversion Shares issued issuable pursuant to the Holder (or such Conversion Shares are eligible under Note may be resold pursuant to Rule 144 without volume or manner-of-sale restrictions or current public information requirements as determined by the counsel to the Company as set forth in a written opinion letter to such effect, addressed and acceptable to the Transfer Agent and the Holder, (c) the Common Stock is trading on an Eligible Market and all of the Securities Actshares issuable pursuant to the Note are listed or quoted for trading on such Eligible Market (and the Company believes, in good faith, that trading of the Common Stock on a Eligible Market will continue uninterrupted for the foreseeable future); , (iid) there is a sufficient number of authorized but unissued and otherwise unreserved shares of Common Stock for the issuance of all of the Conversion Shares as are shares then issuable pursuant to the Note, (e) there is no existing Event of Default and no existing event which, with the passage of time or the giving of notice, would constitute an Event of Default and (f) the issuance of the shares in question to the Holder upon such would not violate the limitations set forth in Section 3(d) herein. The mechanics of conversion of this Note pursuant set forth in Section 3(c) shall apply to this Section 3.6 any Mandatory Conversion as if the Company and (iii) the amount of this Note to be so converted pursuant to this Section 3.6 (when combined with the amount of the secured convertible minimum borrowing note issued by the Borrower to Transfer Agent had received from the Holder on the date hereof Mandatory Conversion Date a Conversion Notice with respect to be so the Conversion Amount being converted pursuant to Section 3.6 thereof and the amount Mandatory Conversion. If the Holder is in possession of any other promissory note issued material non-public information at the time the Company exercises its right of Mandatory Conversion, the Company shall publicly disclose such material non-public information regarding the exercise of its right of Mandatory Conversion within one Trading Day of such exercise by the Borrower to the Holder required to be similarly manditorily converted) does not exceed ten percent (10%) of the aggregate dollar trading volume of the Common Stock during the Conversion PeriodCompany.”

Mandatory Conversion. Notwithstanding anything herein If the price of the Company’s Common Stock shall remain at a closing price of $3.50 or more for a period of twenty consecutive Trading Days, the Company shall have the right to require the contraryHolder to convert all, subject to the conversion limitations set forth in Section 3.2or any part, if, after the date a registration statement covering the resale of the Conversion Shares is declared effective, and so long as such registration statement remains effective, (A) the closing price for any ten (10) consecutive trading days (a "Conversion Period") exceeds 135% of the then effective Fixed Conversion Price, the Holder will, within ten (10) trading days of any such Conversion Period, convert all or part of the then outstanding Principal Amount of this Note plus all accruedinto fully paid, but unpaid interest thereonvalidly issued and nonassessable shares of Common Stock in accordance with Section 3(c) hereof at the Conversion Rate with respect to the Conversion Amount (the “Mandatory Conversion”). The Holder shall Company may only be required to effect such a conversion referred to in the immediately preceding sentence Mandatory Conversion if each of the following Equity Conditions shall be true: have been met (iunless waived in writing by the Holder) and subject to the Holder’s Conversion Limitations set forth above in Section 3(d), if applicable. “Equity Conditions” means, during the period in question, (a) the Company shall have duly honored all conversions scheduled to occur or occurring by virtue of one or more Conversion Notices of the Holder, if any, (b)(i) there is an effective registration statement Registration Statement pursuant to which the Holder is permitted to utilize the prospectus thereunder to resell all of the shares of Common Stock issuable pursuant to the Note (and the Company believes, in good faith, that such effectiveness will continue uninterrupted for the foreseeable future) or (ii) all of the Conversion Shares issued issuable pursuant to the Holder (or such Conversion Shares are eligible under Note may be resold pursuant to Rule 144 without volume or manner-of-sale restrictions or current public information requirements as determined by the counsel to the Company as set forth in a written opinion letter to such effect, addressed and acceptable to the Transfer Agent and the Holder, (c) the Common Stock is trading on an Eligible Market and all of the Securities Actshares issuable pursuant to the Note are listed or quoted for trading on such Eligible Market (and the Company believes, in good faith, that trading of the Common Stock on a Eligible Market will continue uninterrupted for the foreseeable future); , (iid) there is a sufficient number of authorized but unissued and otherwise unreserved shares of Common Stock for the issuance of all of the Conversion Shares as are shares then issuable pursuant to the Note, (e) there is no existing Event of Default and no existing event which, with the passage of time or the giving of notice, would constitute an Event of Default and (f) the issuance of the shares in question to the Holder upon such would not violate the limitations set forth in Section 3(d) herein. The mechanics of conversion of this Note pursuant set forth in Section 3(c) shall apply to this Section 3.6 any Mandatory Conversion as if the Company and (iii) the amount of this Note to be so converted pursuant to this Section 3.6 (when combined with the amount of the secured convertible minimum borrowing note issued by the Borrower to Transfer Agent had received from the Holder on the date hereof Mandatory Conversion Date a Conversion Notice with respect to be so the Conversion Amount being converted pursuant to Section 3.6 thereof and the amount Mandatory Conversion. If the Holder is in possession of any other promissory note issued material non-public information at the time the Company exercises its right of Mandatory Conversion, the Company shall publicly disclose such material non-public information regarding the exercise of its right of Mandatory Conversion within one Trading Day of such exercise by the Borrower to the Holder required to be similarly manditorily converted) does not exceed ten percent (10%) of the aggregate dollar trading volume of the Common Stock during the Conversion PeriodCompany.” -6-

Mandatory Conversion. Notwithstanding anything herein to the contrary, subject to the conversion limitations set forth in Section 3.2, if, after the date a registration statement covering the resale of the Conversion Shares is declared effective, and so long as such registration statement remains effective, (A) the closing price for any ten (10) consecutive trading days (a "“Conversion Period"”) exceeds 135400% of the then effective Fixed Conversion Price, which as of the date of this Agreement is $2.12, the Holder will, within ten (10) trading days of any such Conversion Period, convert all or part of the then outstanding Principal Amount of this Note plus all accrued, but unpaid interest thereon. The Holder shall only be required to effect such a conversion referred to in the immediately preceding sentence if each of the following shall be true: (i) there is an effective registration statement pursuant to which the Holder is permitted to utilize the prospectus thereunder to resell all of the Conversion Shares issued to the Holder (or such Conversion Shares are eligible under Rule 144 of the Securities Act); (ii) there is a sufficient number of authorized but unissued and otherwise unreserved shares of Common Stock for the issuance of all the Conversion Shares as are issuable to the Holder upon such conversion of this Note pursuant to this Section 3.6 and (iii) the amount of this Note to be so converted pursuant to this Section 3.6 (when combined with the amount of the secured convertible minimum borrowing note issued by the Borrower to the Holder on the date hereof to be so converted pursuant to Section 3.6 thereof and the amount of any other promissory note issued by the Borrower to the Holder required to be similarly manditorily converted) does not exceed ten percent (10%) 25% of the aggregate dollar trading volume of the Common Stock during the Conversion Period. There shall be only one Conversion Period during any 30 trading day period. For Example, Date Shares Traded Market Price Daily Dollar Volume 10/18 100,000 $ 0.63 63,000 10/19 70,000 $ 0.62 43,400 10/20 50,000 $ 0.63 31,500 10/21 80,000 $ 0.65 52,000 10/22 100,000 $ 0.67 67,000 10/25 70,000 $ 0.65 45,500 10/26 50,000 $ 0.63 31,500 10/27 80,000 $ 0.62 49,600 10/28 100,000 $ 0.65 65,000 10/29 100,000 $ 0.70 70,000 TOTAL 800,000 $ 518,500 @ 25.00% = $129,625 Determination Date: November 11 If the premium above the Fixed Conversion Price is greater than or equal to 400% for a consecutive 10-day period, the holder is required within 10 days of such period to convert all or part of the outstanding principal and accrued interest but limited to 25% of the cumulative daily dollar volume traded during such period.