Common use of Mandatory Redemptions Clause in Contracts

Mandatory Redemptions. Upon the occurrence of each Disposition or Liquidity Event (as the case may be), the Company shall use the Net Proceeds (as defined below) with respect to such Disposition or Liquidity Event (as the case may be) (the “Applicable Net Proceeds”) to redeem this Note in the manner and in such amounts as are set forth herein (each being a “Mandatory Redemption”). With respect to each Disposition and each Liquidity Event (as the case may be), the Company shall deliver a written notice by confirmed facsimile and overnight courier (with next day delivery specified) to the Holder of this Note (the “Mandatory Redemption Notice” and the date such notice is delivered to the Holder is referred to as the “Mandatory Redemption Notice Date”) stating (a) the date on which the applicable Mandatory Redemption shall occur (the “Mandatory Redemption Date”), which date shall be the date such Disposition or Liquidity Event (as the case may be) is consummated, (b) the amount of Applicable Net Proceeds with respect to such Disposition or Liquidity Event (as the case may be) and (c) the Mandatory Redemption Price (as defined below) with respect to such Disposition or Liquidity Event (as the case may be). The applicable Mandatory Redemption Notice shall be delivered as soon as practicable prior to the consummation of the applicable Disposition or Liquidity Event (as the case may be), and the Company shall make a public announcement containing the information set forth in such Mandatory Redemption Notice on or before the applicable Mandatory Redemption Notice Date to the extent that the notice contains any, or constitutes, material, non-public information. Redemptions required by this Section 6 shall be made in accordance with, and be subject to, the provisions of Section 7. To the extent redemptions required by this Section 6 are deemed or determined by a court of competent jurisdiction to be prepayments of this Note by the Company, such redemptions shall be deemed to be voluntary prepayments. The Company agrees that in the event of the Company’s redemption of any portion of this Note under this Section 6, the Holder’s damages would be

Mandatory Redemptions. Upon Beginning on February 6, 2007, and continuing on the occurrence first Trading Day of each Disposition or Liquidity Event calendar month (as the case may be)“Mandatory Redemption Due Date”) for twelve (12) months thereafter, the Company shall use make mandatory redemptions (“Mandatory Redemptions”) consisting of outstanding principal, accrued and unpaid interest and a Redemption Premium. The principal amount of each Mandatory Redemption shall be equal to the Net Proceeds amount of outstanding principal divided by twelve (12), plus accrued and unpaid interest as defined belowwell as the Redemption Premium per calendar month, until all amounts owed under this Debenture have been paid in full. The Company shall transmit a copy of a Redemption Notice in the form attached hereto as Exhibit A (the “Redemption Notice”) via facsimile (or other delivery) for receipt on or prior to 12:00 pm New York City time on the due date of such Mandatory Redemption (the “Redemption Date”) which shall (i) indicate the applicable Mandatory Redemption Amount, (ii) indicate the Company’s choice of settlement options (pursuant to Section 3(c)) with respect to such Disposition or Liquidity Event Redemption Notice, and (as iii) be signed by an officer of the case may be) Company. The Company shall settle all Mandatory Redemptions within 5 Trading Days of the Redemption Date (the “Applicable Net Proceeds”) to redeem this Note in the manner and in such amounts as are set forth herein (each being a “Mandatory RedemptionSettlement Date”). With respect The Holder shall have the absolute right, in its sole discretion, to each Disposition and each Liquidity Event (as suspend the case may be), Company’s obligations to make Mandatory Redemptions by providing the Company shall deliver a with written notice by confirmed facsimile and overnight courier of such election (with next day delivery specified) to the Holder of this Note (the a “Mandatory Redemption Suspension Notice” and the date such notice is delivered to the Holder is referred to as the “Mandatory Redemption Notice Date”) stating prior to a Redemption Date. The Holder shall have no obligation to accept any Mandatory Redemptions made by the Company during any suspension period specified in a Suspension Notice after the Holder’s submission of such Suspension Notice. The obligation of the Company to make Mandatory Redemptions shall resume on the first Trading Day of the month following the expiration of the suspension period specified in a Suspension Notice. Notwithstanding the foregoing, if (aA) the date on which VWAP of the applicable Mandatory Redemption shall occur Common Stock is equal to or greater than $1.10 for the five (the “Mandatory Redemption Date”), which date shall be the date such Disposition or Liquidity Event (as the case may be5) is consummated, (b) the amount of Applicable Net Proceeds with respect to such Disposition or Liquidity Event (as the case may be) and (c) the Mandatory Redemption Price (as defined below) with respect to such Disposition or Liquidity Event (as the case may be). The applicable Mandatory Redemption Notice shall be delivered as soon as practicable consecutive Trading Days prior to the consummation Monthly exceeds the Conversion Price for each of the applicable Disposition or Liquidity Event five consecutive Trading Days immediately prior to the Redemption Date and (as B) the case may be)Underlying Share Registration Statement has been declared effective and remains effective on the Redemption Date, and then the Company Holder at its sole option shall make have the ability to waive a public announcement containing the information set forth in such Mandatory Redemption Notice on or before the applicable in that month (a “Waiver Mandatory Redemption Notice Date to the extent that the notice contains any, or constitutes, material, non-public information. Redemptions required by this Section 6 shall be made in accordance with, and be subject to, the provisions of Section 7. To the extent redemptions required by this Section 6 are deemed or determined by a court of competent jurisdiction to be prepayments of this Note by the Company, such redemptions shall be deemed to be voluntary prepayments. The Company agrees that in the event of the Company’s redemption of any portion of this Note under this Section 6, the Holder’s damages would beMonth”).

Mandatory Redemptions. Upon i. On the occurrence thirty (30) day anniversary of each Disposition or Liquidity Event (as the case may be), the Company shall use the Net Proceeds (as defined below) with respect to such Disposition or Liquidity Event (as the case may be) Original Issue Date (the “Applicable Net Proceeds”) to redeem this Note in the manner and in such amounts as are set forth herein (each being a “Mandatory Redemption”). With respect to each Disposition and each Liquidity Event (as the case may be), the Company shall deliver a written notice by confirmed facsimile and overnight courier (with next day delivery specified) to the Holder of this Note (the “Mandatory Redemption Notice” and the date such notice is delivered to the Holder is referred to as the “Mandatory Redemption Notice Date”) stating (a) the date on which the applicable Mandatory Redemption shall occur (the “Initial Mandatory Redemption Date”), which the Corporation shall redeem a number of shares of Preferred Stock equal to $3,000,000 of Stated Value on a pro rata basis among all of the Holders, for an amount in cash equal to the Initial Mandatory Redemption Amount (such redemption, the “Initial Mandatory Redemption”). On the sixty (60) day anniversary of the Original Issue Date (the “Second Mandatory Redemption Date”), the Corporation shall redeem a number of shares of Preferred Stock equal to $2,500,000 of Stated Value on a pro rata basis among all of the Holders, for an amount in cash equal to the Second Mandatory Redemption Amount (such redemption, the “Second Mandatory Redemption”). On the Ninety (90) day anniversary of the Original Issue Date (the “Third Mandatory Redemption Date”), the Corporation shall redeem a number of shares of Preferred Stock equal to $500,000 of Stated Value on a pro rata basis among all of the Holders, for an amount in cash equal to the Third Mandatory Redemption Amount (such redemption, the “Third Mandatory Redemption”). If funds are not legally available for the payment of Initial Mandatory Redemption, the Second Mandatory Redemption or the Third Mandatory Redemption, then such Mandatory Redemption Amount owed on such date shall be accreted to, and increase, the date such Disposition or Liquidity Event (as outstanding Stated Value. The Initial Mandatory Redemption Amount is payable in full on the case may be) Initial Mandatory Redemption Date, the Second Mandatory Redemption is consummated, (b) payable in full on the amount Second Mandatory Redemption Date and the Third Mandatory Redemption is payable in full on the Third Mandatory Redemption Date. Without limitation and in addition to any other provisions in this Certificate of Applicable Net Proceeds Designation with respect to such Disposition or Liquidity Event (as the case may be) Holders’ conversion rights, the Corporation covenants and (c) agrees that it will honor all Notices of Conversion with respect to the Mandatory Redemption Price (as defined below) with respect to such Disposition or Liquidity Event (as Amount tendered up until the case may be). The applicable Initial, Second and Third Mandatory Redemption Notice shall be delivered as soon as practicable prior to the consummation of the applicable Disposition or Liquidity Event (as the case may be), and the Company shall make a public announcement containing the information set forth Amounts are paid in such Mandatory Redemption Notice on or before the applicable Mandatory Redemption Notice Date to the extent that the notice contains any, or constitutes, material, non-public information. Redemptions required by this Section 6 shall be made in accordance with, and be subject to, the provisions of Section 7. To the extent redemptions required by this Section 6 are deemed or determined by a court of competent jurisdiction to be prepayments of this Note by the Company, such redemptions shall be deemed to be voluntary prepayments. The Company agrees that in the event of the Company’s redemption of any portion of this Note under this Section 6, the Holder’s damages would befull.

Mandatory Redemptions. Upon Beginning on the occurrence earlier of (i) the first Trading Day of the month immediately following the month in which the Underlying Share Registration Statement is first declared effective or (ii) May 2, 2007, and continuing on the first Trading Day of each Disposition or Liquidity Event calendar month for thirteen (as the case may be)13) months thereafter, the Company shall use make mandatory redemptions (“Mandatory Redemptions”) consisting of outstanding principal and accrued and unpaid interest. The principal amount of each Mandatory Redemption shall be equal to One Hundred Fifteen Thousand Three Hundred Eighty-Four Dollars and Sixty-Two Cents ($115,384.62) plus an amount of accrued and unpaid interest based upon interest due over the Net Proceeds life of the Debenture divided by thirteen (13) scheduled Mandatory Redemptions (“Mandatory Redemption Amount”) per calendar month, until all amounts owed under this Debenture have been paid in full, provided however the Investor at it sole option shall have the ability one (1) time during the life of this debenture, upon twenty (20) calendar days advance written notice to the Company notice provided that the VWAP of the Company’s Common Stock is at or above the Conversion Price with a volume traded of at least 1,250,000 shares per day for twenty (20) or more consecutive Trading Days, require that a Mandatory Redemption Amount be increased up to Seven Hundred Fifty Thousand Dollars ($750,000). The Company shall transmit a copy of a Redemption Notice in the form attached hereto as defined belowExhibit A (the “Redemption Notice”) via facsimile (or other delivery) for receipt on or prior to 12:00 pm New York City time on the due date of such Mandatory Redemption (the “Redemption Date”) which shall (i) indicate the applicable Mandatory Redemption Amount, (ii) indicate the Company’s choice of settlement options (pursuant to Section 3(c)) with respect to such Disposition or Liquidity Event Redemption Notice, and (as iii) be signed by an officer of the case may be) Company. The Company shall settle all Mandatory Redemptions within 5 Trading Days of the Redemption Date (the “Applicable Net Proceeds”) to redeem this Note in the manner and in such amounts as are set forth herein (each being a “Mandatory RedemptionSettlement Date”). With respect The Holder shall have the absolute right, in its sole discretion, to each Disposition suspend the Company’s obligations to make Mandatory Redemptions by providing the Company with written notice of such election (a “Suspension Notice”) prior to a Redemption Date. The Holder shall have no obligation to accept any Mandatory Redemptions made by the Company during any suspension period specified in a Suspension Notice after the Holder’s submission of such Suspension Notice. The obligation of the Company to make Mandatory Redemptions shall resume on the first Trading Day of the month following the expiration of the suspension period specified in a Suspension Notice. Notwithstanding the foregoing, if (A) the average VWAP of the Common Stock over the thirty (3) consecutive Trading Days immediately prior to the Redemption Date is equal to or greater than 110% of the of the Conversion Price then in effect, and each Liquidity Event (as B) the case may be)Underlying Share Registration Statement has been declared effective and remains effective on the Redemption Date, then the Company shall deliver not be permitted or required to make a written notice by confirmed facsimile and overnight courier (with next day delivery specified) to the Holder of this Note (the “Mandatory Redemption Notice” and the date such notice is delivered to the Holder is referred to as the in that month (a “Waiver Mandatory Redemption Notice Date”) stating (a) the date on which the applicable Mandatory Redemption shall occur (the “Mandatory Redemption DateMonth”), which date shall be the date such Disposition or Liquidity Event (as the case may be) is consummated, (b) the amount of Applicable Net Proceeds with respect to such Disposition or Liquidity Event (as the case may be) and (c) the Mandatory Redemption Price (as defined below) with respect to such Disposition or Liquidity Event (as the case may be). The applicable Mandatory Redemption Notice shall be delivered as soon as practicable prior to the consummation of the applicable Disposition or Liquidity Event (as the case may be), and the Company shall make a public announcement containing the information set forth in such Mandatory Redemption Notice on or before the applicable Mandatory Redemption Notice Date to the extent that the notice contains any, or constitutes, material, non-public information. Redemptions required by this Section 6 shall be made in accordance with, and be subject to, the provisions of Section 7. To the extent redemptions required by this Section 6 are deemed or determined by a court of competent jurisdiction to be prepayments of this Note by the Company, such redemptions shall be deemed to be voluntary prepayments. The Company agrees that in the event of the Company’s redemption of any portion of this Note under this Section 6, the Holder’s damages would be.

Mandatory Redemptions. Upon Beginning on March 1, 2007, and continuing on the occurrence first Trading Day of each Disposition or Liquidity Event (as the case may be)calendar month thereafter, the Company shall use make mandatory redemptions ("Mandatory Redemptions") consisting of outstanding principal. The principal amount of each Mandatory Redemption shall be equal to $100,000 ("Mandatory Redemption Amount") per calendar month, until all amounts owed under this Debenture have been paid in full. The Company shall transmit a copy of a Redemption Notice in the Net Proceeds form attached hereto as Exhibit A (as defined belowthe "Redemption Notice") via facsimile (or other delivery) for receipt on or prior to 5:00 pm New York City time at least one Trading Day prior to the due date of such Mandatory Redemption (the "Redemption Date") which shall (i) indicate the applicable Mandatory Redemption Amount, (ii) indicate the Company's choice of settlement options (pursuant to Section 3(c)) with respect to such Disposition or Liquidity Event Redemption Notice, and (as iii) be signed by an officer of the case may be) Company. The Company shall settle all Mandatory Redemptions within 5 Trading Days of the Redemption Date (the “Applicable Net Proceeds”) to redeem this Note in the manner and in such amounts as are set forth herein (each being a “Mandatory Redemption”). With respect to each Disposition and each Liquidity Event (as the case may be), the Company shall deliver a written notice by confirmed facsimile and overnight courier (with next day delivery specified) to the Holder of this Note (the “Mandatory Redemption Notice” and the date such notice is delivered to the Holder is referred to as the “Mandatory Redemption Notice "Settlement Date”) stating (a) the date on which the applicable Mandatory Redemption shall occur (the “Mandatory Redemption Date”), which date shall be the date such Disposition or Liquidity Event (as the case may be) is consummated, (b) the amount of Applicable Net Proceeds with respect to such Disposition or Liquidity Event (as the case may be) and (c) the Mandatory Redemption Price (as defined below) with respect to such Disposition or Liquidity Event (as the case may be"). The applicable Holder shall have the absolute right, in its sole discretion, to suspend the Company's obligations to make Mandatory Redemption Notice shall be delivered as soon as practicable Redemptions by providing the Company with written notice of such election ("Suspension Notice") prior to the consummation Redemption Date. The Holder shall have no obligation to accept any Mandatory Redemptions made by the Company during any suspension period specified in a Suspension Notice after the Holder's submission of such Suspension Notice. The obligation of the applicable Disposition or Liquidity Event (as Company to make Mandatory Redemptions shall resume on the case may be), and the Company shall make a public announcement containing the information set forth in such Mandatory Redemption Notice on or before the applicable Mandatory Redemption Notice Date to the extent that the notice contains any, or constitutes, material, non-public information. Redemptions required by this Section 6 shall be made in accordance with, and be subject to, the provisions of Section 7. To the extent redemptions required by this Section 6 are deemed or determined by a court of competent jurisdiction to be prepayments of this Note by the Company, such redemptions shall be deemed to be voluntary prepayments. The Company agrees that in the event first Trading Day of the Company’s redemption month following the expiration of any portion of this Note under this Section 6, the Holder’s damages would besuspension period specified in a Suspension Notice.

Mandatory Redemptions. Upon Beginning on the occurrence earlier of (i) the first Trading Day of the month immediately following the month in which the Underlying Share Registration Statement is first declared effective or (ii) May 2, 2007, and continuing on the first Trading Day of each Disposition or Liquidity Event calendar month for thirteen (as the case may be)13) months thereafter, the Company shall use make mandatory redemptions (“Mandatory Redemptions”) consisting of outstanding principal and accrued and unpaid interest. The principal amount of each Mandatory Redemption shall be equal to Ninety-Two Thousand Three Hundred Seven Dollars and Sixty-Nine Cents ($92,307.69) plus an amount of accrued and unpaid interest based upon interest due over the Net Proceeds life of the Debenture divided by thirteen (13) scheduled Mandatory Redemptions (“Mandatory Redemption Amount”) per calendar month, until all amounts owed under this Debenture have been paid in full, provided however the Investor at it sole option shall have the ability one (1) time during the life of this debenture, upon twenty (20) calendar days advance written notice to the Company notice provided that the VWAP of the Company’s Common Stock is at or above the Conversion Price with a volume traded of at least 1,250,000 shares per day for twenty (20) or more consecutive Trading Days, require that a Mandatory Redemption Amount be increased up to Seven Hundred Fifty Thousand Dollars ($750,000). The Company shall transmit a copy of a Redemption Notice in the form attached hereto as defined belowExhibit A (the “Redemption Notice”) via facsimile (or other delivery) for receipt on or prior to 12:00 pm New York City time on the due date of such Mandatory Redemption (the “Redemption Date”) which shall (i) indicate the applicable Mandatory Redemption Amount, (ii) indicate the Company’s choice of settlement options (pursuant to Section 3(c)) with respect to such Disposition or Liquidity Event Redemption Notice, and (as iii) be signed by an officer of the case may be) Company. The Company shall settle all Mandatory Redemptions within 5 Trading Days of the Redemption Date (the “Applicable Net Proceeds”) to redeem this Note in the manner and in such amounts as are set forth herein (each being a “Mandatory RedemptionSettlement Date”). With respect The Holder shall have the absolute right, in its sole discretion, to each Disposition suspend the Company’s obligations to make Mandatory Redemptions by providing the Company with written notice of such election (a “Suspension Notice”) prior to a Redemption Date. The Holder shall have no obligation to accept any Mandatory Redemptions made by the Company during any suspension period specified in a Suspension Notice after the Holder’s submission of such Suspension Notice. The obligation of the Company to make Mandatory Redemptions shall resume on the first Trading Day of the month following the expiration of the suspension period specified in a Suspension Notice. Notwithstanding the foregoing, if (A) the average VWAP of the Common Stock over the thirty (3) consecutive Trading Days immediately prior to the Redemption Date is equal to or greater than 110% of the of the Conversion Price then in effect, and each Liquidity Event (as B) the case may be)Underlying Share Registration Statement has been declared effective and remains effective on the Redemption Date, then the Company shall deliver not be permitted or required to make a written notice by confirmed facsimile and overnight courier (with next day delivery specified) to the Holder of this Note (the “Mandatory Redemption Notice” and the date such notice is delivered to the Holder is referred to as the in that month (a “Waiver Mandatory Redemption Notice Date”) stating (a) the date on which the applicable Mandatory Redemption shall occur (the “Mandatory Redemption DateMonth”), which date shall be the date such Disposition or Liquidity Event (as the case may be) is consummated, (b) the amount of Applicable Net Proceeds with respect to such Disposition or Liquidity Event (as the case may be) and (c) the Mandatory Redemption Price (as defined below) with respect to such Disposition or Liquidity Event (as the case may be). The applicable Mandatory Redemption Notice shall be delivered as soon as practicable prior to the consummation of the applicable Disposition or Liquidity Event (as the case may be), and the Company shall make a public announcement containing the information set forth in such Mandatory Redemption Notice on or before the applicable Mandatory Redemption Notice Date to the extent that the notice contains any, or constitutes, material, non-public information. Redemptions required by this Section 6 shall be made in accordance with, and be subject to, the provisions of Section 7. To the extent redemptions required by this Section 6 are deemed or determined by a court of competent jurisdiction to be prepayments of this Note by the Company, such redemptions shall be deemed to be voluntary prepayments. The Company agrees that in the event of the Company’s redemption of any portion of this Note under this Section 6, the Holder’s damages would be.

Mandatory Redemptions. Upon the occurrence of each Disposition or Liquidity Event (as the case may be), the Company shall use 100% of the Net Proceeds (as defined below) with respect to such Disposition or Liquidity Event (as the case may be) (the “Applicable Net Proceeds”) to redeem this Note in the manner and in such amounts as are set forth herein (each being a “Mandatory Redemption”). With respect to each Disposition and each Liquidity Event (as the case may be), the Company shall deliver a written notice by confirmed facsimile and overnight courier (with next day delivery specified) to all, but not less than all, of the Holder holders of this Note Notes (the “Mandatory Redemption Notice” and the date such notice is delivered to the Holder all such holders is referred to as the “Mandatory Redemption Notice Date”) stating (a) the date on which the applicable Mandatory Redemption shall occur (the “Mandatory Redemption Date”), which date shall be the date such Disposition or Liquidity Event (as the case may be) is consummated, (b) the amount of Applicable Net Proceeds with respect to such Disposition or Liquidity Event (as the case may be) and (c) the Mandatory Redemption Price (as defined below) with respect to such Disposition or Liquidity Event (as the case may be). The applicable Mandatory Redemption Notice shall be delivered as soon as practicable prior to the consummation of the applicable Disposition or Liquidity Event (as the case may be), and the Company shall make a public announcement containing the information set forth in such Mandatory Redemption Notice on or before the applicable Mandatory Redemption Notice Date to the extent that the notice contains any, or constitutes, material, non-public information. Redemptions required by this Section 6 shall be made in accordance with, and be subject to, the provisions of Section 7. To the extent redemptions required by this Section 6 are deemed or determined by a court of competent jurisdiction to be prepayments of this Note by the Company, such redemptions shall be deemed to be voluntary prepayments. The Company agrees that in the event of the Company’s redemption of any portion of this Note under this Section 6, the Holder’s damages would be uncertain and difficult to estimate because of the parties’ inability to predict future interest rates and the uncertainty of the availability of a suitable substitute investment opportunity for the Holder. “Mandatory Redemption Price” means, with respect to a particular Disposition or Liquidity Event (as the case may be), an amount in cash equal to the product of (i) the Applicable Net Proceeds with respect to such Disposition or Liquidity Event (as the case may be) multiplied by (ii) the quotient of (1) the sum of (A) the Principal of this Note outstanding as of the date of redemption, (B) the amount of any accrued and unpaid Interest on this Note through the date of redemption and (C) the amount of any accrued and unpaid Late Charges on such Principal and such Interest specified in clauses (A) and (B) through the date of redemption divided by (2) the sum of (X) the principal amount of all Non-Convertible Notes outstanding as of the date of redemption, (Y) the amount of any accrued and unpaid Interest on all Non-Convertible Notes through the date of redemption and (Z) the amount of any accrued and unpaid Late Charges on such principal and such Interest specified in clauses (X) and (Y) through the date of redemption. To the extent the Company effects a Mandatory Redemption under this Note, then the Company must simultaneously take the same action with respect to all the Other Non-Convertible Notes. It is expressly understood and agreed that payments under this Section 6 and Section 6 of the Other Non-Convertible Notes shall be made prior to, and have priority over, any payments required to be made under Section 10 of the Convertible Notes.