Common use of True-Up Clause in Contracts

True-Up. On the date that is seven (7) Trading Days (a “True-Up Date”) from each Conversion Date there shall be a true-up where the Company shall deliver to Holder an amount in cash or additional Conversion Shares (“True-Up Amount”) if the Closing Price as of the True-Up Date is less than the Conversion Price used in the applicable Notice of Conversion provided, however, that payment in shares of Common Stock may only occur if all of the Equity Conditions (except (c) thereunder) have been met (unless waived by the Holder in writing) during the seven (7) Trading Days immediately prior to the applicable True Up Date and through and including the date such shares of Common Stock representing the True-Up Amount are actually issued to the Holder. In such event, the Company shall deliver to the Holder within one (1) Trading Day of the True-Up Date (the “True-Up Delivery Date”) either an amount in cash or such number of Conversion Shares having a value equal to [(Conversion Price – (80% of the Closing Price)] * the aggregate value of the amount converted as set forth in the Notice of Conversion. Notwithstanding the foregoing, the Conversion Price to be used in accordance with the formula in the preceding sentence shall not be less than the lower of (a) $0.25 or (b) 50% of the average VWAP of the Common Stock for the five (5) Trading Days on the Trading Market prior to the applicable Conversion Date (the “Floor Price”) provided that if the Closing Price on the Maturity Date (or the next Trading Day if such date is a Saturday, Sunday or a holiday) is not equal or exceeding the Floor Price as of such date, the conversion price to be used in accordance with this formula shall be equal to 80% of the average VWAP of the Common Stock for the two (2) Trading Days on the Trading Market immediately preceding the date of conversion to which a True-Up would be payable. The number of shares of Common Stock to be delivered to the Holder in satisfaction of the True-Up Amount to be delivered in accordance with this Section shall be equal to True-Up Amount divided by the Conversion Price in effect on the Conversion Date. No fractional shares shall be issued and any fractional shares that are required to be delivered in accordance with this Section shall be rounded up to the nearest whole share. For the avoidance of doubt, if the Closing Price as of the True-Up Date is higher than the Conversion Price set forth in the applicable Notice of Conversion, then Company shall have no obligation to deliver a True-Up Amount to the Holder. For the convenience of the Company only, the Holder may, in its sole discretion, deliver to Company a written notice to the Company informing the Company of the True-Up Amount it is obligated to deliver to Holder as of any given True-Up Date, provided that if Holder does not deliver any such notice, the Company shall not be relieved of its obligation to deliver True-Up Amount pursuant to this Section. Notwithstanding the foregoing, if the Company fails to deliver any required True-Up Amount on or before any applicable True-Up Delivery Date, then in such event the principal amount of this Note will automatically increase by a sum equal to the True-Up Amount deliverable as of the applicable True-Up Date (under the Holder’s and Company’s expectations that any such increase will tack back to the Original Issue Date for purposes of determining the holding period under Rule 144). For the avoidance of doubt, the True-Up Amount payable in accordance with this Section shall be calculated and payable upon every conversion of this Note.

True-Up. On (a) In the date event that is seven (7) Trading Days (a “True-Up Date”) the proceeds received by the Purchaser from each Conversion Date there shall be a true-up where the Company shall deliver to Holder an amount in cash or additional sale of all the Conversion Shares (“True-Up Amount”) if do not equal at least 125% of the Stated Value of the Preferred Stock on the first Trading Day after the six month anniversary of the Closing Price as of the True-Up Date is less than the Conversion Price used in the applicable Notice of Conversion provided, however, that payment in shares of Common Stock may only occur if all of the Equity Conditions (except (c) thereunder) have been met (unless waived by the Holder in writing) during the seven (7) Trading Days immediately prior to the applicable True Up Date and through and including the date such shares of Common Stock representing the True-Up Amount are actually issued to the Holder. In such event, the Company shall deliver to the Holder within one (1) Trading Day of the True-Up Date (the “True-Up Delivery Payment Date”) either ), Spin-Off NewCo or, solely in the event that the transactions contemplated by the Merger Agreement have not been consummated, the Company shall pay the Purchaser an amount in cash or such number of Conversion Shares having a value (the “True-Up Payment”) equal to [(Conversion Price – (80the dollar value of 125% of the Closing Price)] * the aggregate value Stated Value of the amount converted as set forth Preferred Stock less the proceeds previously realized by the Purchaser from the sale of the Conversion Shares, net of brokerage commissions and any other fees incurred by Purchaser in connection with the sale of any Conversion Shares (“Net Proceeds”). (b) The True-Up Payment will be paid by Spin-Off NewCo or, solely in the Notice event that the transactions contemplated by the Merger Agreement have not been consummated, the Company, as the case may be, out of Conversioneither (i) the proceeds from the exercise by Spin-Off NewCo of existing warrants to purchase shares of the Company’s common stock held by Spin-Off NewCo or (ii) the Segregated Cash Account. If any portion of the True-Up Payment has not been paid by Spin-Off NewCo or the Company, as the case may be, on the True-Up Payment Date, interest shall accrue on such unpaid amount until such amount is paid in full at a rate equal to the lesser of (i) 18% per annum or (ii) the maximum rate permitted by applicable law. Upon payment in full of the True-Up Payment, any portion of the Segregated Cash Account not used to pay the True-Up Payment will be transferred to the Company or Spin-Off NewCo (in the event that the transactions contemplated by the Merger Agreement have been consummated). (c) The Segregated Cash Account will be maintained until the True-Up Payment is paid in full, provided that beginning on the three month anniversary of the Closing Date, and on each monthly anniversary thereafter, Spin-Off NewCo may withdraw funds from the Segregated Cash Account in an amount equal to $1,250,000 multiplied by a fraction, the numerator of which is equal to the Net Proceeds and denominator of which is equal to $375,000. Notwithstanding the foregoing, Spin-Off NewCo may not withdraw funds from the Conversion Price Segregated Cash Account to be used in accordance with the formula in extent the preceding sentence shall not be less than the lower of (a) $0.25 or (b) 50% portion of the average VWAP of Net Proceeds realized by the Common Stock for the five (5) Trading Days on the Trading Market prior to the applicable Conversion Date (the “Floor Price”) provided that if the Closing Price on the Maturity Date (or the next Trading Day if such date is a Saturday, Sunday or a holiday) Purchaser is not equal or exceeding the Floor Price as in excess of such date, the conversion price to be used in accordance with this formula shall be equal to 80% of the average VWAP of the Common Stock for the two (2) Trading Days on the Trading Market immediately preceding the date of conversion to which a True-Up would be payable. The number of shares of Common Stock to be delivered to the Holder in satisfaction of the True-Up Amount to be delivered in accordance with this Section shall be equal to True-Up Amount divided by the Conversion Price in effect on the Conversion Date. No fractional shares shall be issued and any fractional shares that are required to be delivered in accordance with this Section shall be rounded up to the nearest whole share. For the avoidance of doubt, if the Closing Price as of the True-Up Date is higher than the Conversion Price set forth in the applicable Notice of Conversion, then Company shall have no obligation to deliver a True-Up Amount to the Holder. For the convenience of the Company only, the Holder may, in its sole discretion, deliver to Company a written notice to the Company informing the Company of the True-Up Amount it is obligated to deliver to Holder as of any given True-Up Date, provided that if Holder does not deliver any such notice, the Company shall not be relieved of its obligation to deliver True-Up Amount pursuant to this Section. Notwithstanding the foregoing, if the Company fails to deliver any required True-Up Amount on or before any applicable True-Up Delivery Date, then in such event the principal amount of this Note will automatically increase by a sum equal to the True-Up Amount deliverable as of the applicable True-Up Date (under the Holder’s and Company’s expectations that any such increase will tack back to the Original Issue Date for purposes of determining the holding period under Rule 144). For the avoidance of doubt, the True-Up Amount payable in accordance with this Section shall be calculated and payable upon every conversion of this Note$20,000.

True-Up. On the date that is seven (7) Trading Days (a “True-Up Date”) from each Conversion Date there shall be a true-up where the Company shall deliver to Holder an amount in cash or additional Conversion Shares (“True-Up Amount”) if the Closing Price as of the True-Up Date is less than the Conversion Price used in the applicable Notice of Conversion provided, however, that payment in shares of Common Stock may only occur if all of the Equity Conditions (except (c) thereunder) have been met (unless waived by the Holder in writing) during the seven (7) 7 Trading Days immediately prior to the applicable True Up Date and through and including the date such shares of Common Stock representing the True-Up Amount are actually issued to the Holder. In such event, the Company shall deliver to the Holder within one (1) Trading Day of the True-Up Date (the “True-Up Delivery Date”) either an amount in cash or such number of Conversion Shares having a value equal to [(Conversion Price – (80% of the Closing Price)] * the aggregate value of the amount converted as set forth in the Notice of Conversion. Notwithstanding the foregoing, the Conversion Price to be used in accordance with the formula in the preceding sentence shall not be less than the lower of (a) $0.25 or (b) 50% of the average VWAP of the Common Stock for the five (5) Trading Days on the Trading Market prior to the applicable Conversion Date (the “Floor Price”) provided that if the Closing Price on the Maturity Date (or the next Trading Day if such date is a Saturday, Sunday or a holiday) is not equal or exceeding the Floor Price as of such date, the conversion price to be used in accordance with this formula shall be equal to 80% of the average VWAP of the Common Stock for the two (2) Trading Days on the Trading Market immediately preceding the date of conversion to which a True-Up would be payable. The number of shares of Common Stock to be delivered to the Holder in satisfaction of the True-Up Amount to be delivered in accordance with this Section shall be equal to True-Up Amount divided by the Conversion Price in effect on the Conversion Date. No fractional shares shall be issued and any fractional shares that are required to be delivered in accordance with this Section shall be rounded up to the nearest whole share. For the avoidance of doubt, if the Closing Price as of the True-Up Date is higher than the Conversion Price set forth in the applicable Notice of Conversion, then Company shall have no obligation to deliver a True-Up Amount to the Holder. For the convenience of the Company only, the Holder may, in its sole discretion, deliver to Company a written notice to the Company informing the Company of the True-Up Amount it is obligated to deliver to Holder as of any given True-Up Date, provided that if Holder does not deliver any such notice, the Company shall not be relieved of its obligation to deliver True-Up Amount pursuant to this Section. Notwithstanding the foregoing, if the Company fails to deliver any required True-Up Amount on or before any applicable True-Up Delivery Date, then in such event the principal amount of this Note will automatically increase by a sum equal to the True-Up Amount deliverable as of the applicable True-Up Date (under the Holder’s and Company’s expectations that any such increase will tack back to the Original Issue Date for purposes of determining the holding period under Rule 144). For the avoidance of doubt, the True-Up Amount payable in accordance with this Section shall be calculated and payable upon every conversion of this Note.

True-Up. On The Pledgor shall be required to increase the date that is seven (7) Trading Days number of Pledged Shares (a “True-Up DateUp”) from each Conversion Date there shall be a true-up where if (A) on any monthly anniversary during the Company shall deliver to Holder an amount in cash term of the Note the market value of the Pledged Shares then held by the Pledgor does not equal or additional Conversion exceed 300% of the sum of the Maturity Amount of the Note and any amounts due under the 2006 Note (collectively, the “Combined Obligations”), or (B) on any trading day during the term of the Note the market value of the Pledged Shares (“then held by the Pledgor does not equal or exceed 250% of the Combined Obligations. A True-Up Amount”shall not be deemed to be made until the following steps have been taken: (i) if Within five (5) business days after receipt of notice from the Closing Price as Secured Party of a deficiency in the value of the True-Up Date is less than the Conversion Price used in the applicable Notice of Conversion provided, however, that payment in shares of Common Stock may only occur if all of the Equity Conditions (except (c) thereunder) have been met (unless waived by the Holder in writing) during the seven (7) Trading Days immediately prior to the applicable True Up Date and through and including the date such shares of Common Stock representing the True-Up Amount are actually issued to the Holder. In such eventPledged Shares, the Company Pledgor shall deliver to the Holder within one Secured Party (1A) Trading Day a certificate or certificates for additional shares equal to not less than 300% of the True-Up Date principal amount of the Combined Obligations (the “True-up Shares”), together with (B) necessary stock powers, signed in blank and medallion-guaranteed, and with (C) an Irrevocable Letter of Instruction (the certificates, stock powers and Irrevocable Letter of Instruction are collectively referred to as the “True-Up Delivery DateDocuments”) either an amount in cash or such ). In calculating the number of Conversion Pledged Shares having delivered as part of a value equal to [(Conversion Price – (80% of the Closing Price)] * the aggregate value of the amount converted as set forth in the Notice of Conversion. Notwithstanding the foregoingTrue-Up, the Conversion Price to be used in accordance with the formula in the preceding sentence shall not be less than the lower of (a) $0.25 or (b) 50% of the average VWAP of the Common Stock shall be valued at the Market Value (as defined in Section 1(b)(ii) below) based upon which the deficiency was calculated (e.g., the average closing bid price for the ten (10) trading days prior to the date on which the Collateral is valued). (ii) If the Pledgor fails to deliver the True-up Documents to the Secured Party within five (5) Trading Days business days after receipt of notice by the Secured Party therefor, the Pledgor shall pay to the Secured Party, in cash, two hundred and fifty ($250) dollars per business day until such certificates are delivered. Unless otherwise set forth on Schedule 1 of this Agreement, the Trading Pledgor is the beneficial and record owner of the Pledged Shares set forth opposite the Pledgor’s name on such Schedule. The Pledged Shares, together 2 with any additions, replacements, accessions and substitutes therefore, or proceeds thereof, are hereinafter referred to collectively as the “Collateral” or the “Pledged Shares”. Market Value means the average closing bid price for the ten (10) trading days prior to the applicable Conversion Date (date on which the “Floor Price”) provided that if the Closing Price on the Maturity Date (or the next Trading Day if such date Collateral is a Saturday, Sunday or a holiday) is not equal or exceeding the Floor Price as of such date, the conversion price to be used in accordance with this formula shall be equal to 80% of the average VWAP of the Common Stock for the two (2) Trading Days on the Trading Market immediately preceding the date of conversion to which a True-Up would be payable. The number of shares of Common Stock to be delivered to the Holder in satisfaction of the True-Up Amount to be delivered in accordance with this Section shall be equal to True-Up Amount divided by the Conversion Price in effect on the Conversion Date. No fractional shares shall be issued and any fractional shares that are required to be delivered in accordance with this Section shall be rounded up to the nearest whole share. For the avoidance of doubt, if the Closing Price as of the True-Up Date is higher than the Conversion Price set forth in the applicable Notice of Conversion, then Company shall have no obligation to deliver a True-Up Amount to the Holder. For the convenience of the Company only, the Holder may, in its sole discretion, deliver to Company a written notice to the Company informing the Company of the True-Up Amount it is obligated to deliver to Holder as of any given True-Up Date, provided that if Holder does not deliver any such notice, the Company shall not be relieved of its obligation to deliver True-Up Amount pursuant to this Section. Notwithstanding the foregoing, if the Company fails to deliver any required True-Up Amount on or before any applicable True-Up Delivery Date, then in such event the principal amount of this Note will automatically increase by a sum equal to the True-Up Amount deliverable as of the applicable True-Up Date (under the Holder’s and Company’s expectations that any such increase will tack back to the Original Issue Date valued for purposes of determining the holding period under Rule 144). For the avoidance of doubt, the True-Up Amount payable in accordance with this Section shall be calculated and payable upon every conversion of this Note1.

True-Up. On If, at any time during the period beginning on the six-month anniversary of the date that is seven (7) Trading Days (a “True-Up Date”) from each Conversion Date there shall be a true-up where the Company shall deliver to Holder an amount in cash or additional Conversion Shares (“True-Up Amount”) if of the Closing Price as of the True-Up Date is less than the Conversion Price used in the applicable Notice of Conversion provided, however, that payment in shares of Common Stock may only occur if all of the Equity Conditions (except (c) thereunder) have been met (unless waived by the Holder in writing) during the seven (7) Trading Days immediately prior to the applicable True Up Date and through and including ending on the later of (i) the Maturity Date, or (ii) the date such shares of Common Stock representing on which the True-Up Amount are actually issued to the Holder. In such event, the Company shall deliver to the Holder within one (1) Trading Day of the True-Up Date Note is fully satisfied and cancelled (the “True-Up Delivery DatePeriod”) either an amount in cash or such number of Conversion Shares having a value equal to [(Conversion Price – (80% of the Closing Price)] * the aggregate value of the amount converted as set forth in the Notice of Conversion. Notwithstanding the foregoing, the Conversion Price to be used in accordance with the formula in the preceding sentence shall not be less than the lower lowest traded price (as reported by Quotestream™, a service of (aQuotemedia, Inc.) $0.25 or (b) 50% of the average VWAP of the Common Stock for any Trading Day within the five (5) Trading Days on the Trading Market prior to the applicable Conversion Date True- Up Period (the “Floor Subsequent Share Price”) provided that if the Closing Price ), as reported on the Maturity Date (or Company’s Principal Market, is less than the next Trading Day if such date is a Saturday, Sunday or a holiday) is not equal or exceeding the Floor Price as of such date, the conversion closing price to be used in accordance with this formula shall be equal to 80% of the average VWAP of the Common Stock for the two (2) Trading Days on the Trading Market immediately preceding Closing Date, then the date Company shall, within three (3) trading days of conversion to which a Holder’s provision of written notice in the form attached hereto as Exhibit B (the “True-Up would be payable. The Notice”), issue and deliver to the Holder, in book entry form, an additional number of duly and validly issued, fully paid and non-assessable shares of Common Stock equal to (X) the quotient of the Commitment Value (as defined below) divided by the Subsequent Share Price, multiplied by 1.5, less (Y) the Commitment Shares. The “Commitment Value” shall mean the product of the Commitment Shares multiplied by the closing price of the Common Stock on the Closing Date. Any additional shares of Common Stock issuable pursuant to Section 1.4 are referred to herein as “True-up Shares.” The True-up Shares, if required to be delivered issued pursuant to this Agreement, shall be issued as provided in this Agreement, provided, however, that in no event shall the Holder be entitled to receive shares of Common Stock in excess of the amount that would result in beneficial ownership by the Holder and its affiliates of 4.99% of the outstanding shares of Common Stock at that time. For purposes of the proviso to the Holder in satisfaction of the True-Up Amount to immediately preceding sentence, beneficial ownership shall be delivered determined in accordance with this Section 13(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Regulations 13D-G thereunder. The Company shall be at all times reserve shares of its Common Stock for Holder in an amount equal to True-Up Amount 300% multiplied by (X) the quotient of the Commitment Value divided by the Conversion Price in effect on the Conversion Date. No fractional shares shall be issued and any fractional shares that are required to be delivered in accordance with this Section shall be rounded up to the nearest whole share. For the avoidance of doubt, if the Closing Price as lowest traded price of the True-Up Date is higher than Common Stock during the Conversion Price set forth in five Trading Days immediately preceding the applicable Notice respective date of Conversioncalculation, then Company shall have no obligation to deliver a True-Up Amount to multiplied by 1.5, less (Y) the Holder. For the convenience of the Company only, the Holder may, in its sole discretion, deliver to Company a written notice to the Company informing the Company of the True-Up Amount it is obligated to deliver to Holder as of any given True-Up Date, provided that if Holder does not deliver any such notice, the Company shall not be relieved of its obligation to deliver True-Up Amount pursuant to this Section. Notwithstanding the foregoing, if the Company fails to deliver any required True-Up Amount on or before any applicable True-Up Delivery Date, then in such event the principal amount of this Note will automatically increase by a sum equal to the True-Up Amount deliverable as of the applicable True-Up Date (under the Holder’s and Company’s expectations that any such increase will tack back to the Original Issue Date for purposes of determining the holding period under Rule 144). For the avoidance of doubt, the True-Up Amount payable in accordance with this Section shall be calculated and payable upon every conversion of this NoteCommitment Shares.