ISCO INTERNATIONAL INC
5% SENIOR SECURED CONVERTIBLE NOTE
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<TYPE>EX-10.2
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<DESCRIPTION>5% SENIOR SECURED CONVERTIBLE NOTE
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<TITLE>5% Senior Secured Convertible Note</TITLE>
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 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2"><B>Exhibit 10.2 </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT FACE="Times New Roman"
SIZE="2"><B>NEITHER THESE SECURITIES NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE &#147;SECURITIES ACT&#148;), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO,
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>THIS NOTE DOES NOT REQUIRE PHYSICAL SURRENDER OF THE NOTE IN THE EVENT OF A PARTIAL REDEMPTION
OR CONVERSION. AS A RESULT, FOLLOWING ANY REDEMPTION OR CONVERSION OF ANY PORTION OF THIS NOTE, THE OUTSTANDING PRINCIPAL AMOUNT REPRESENTED BY THIS NOTE MAY BE LESS THAN THE PRINCIPAL AMOUNT AND ACCRUED INTEREST SET FORTH BELOW. </B></FONT></P> <P
STYLE="margin-top:18px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><B><U>5% SENIOR SECURED CONVERTIBLE NOTE DUE JUNE 22, 2010 </U></B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT
FACE="Times New Roman" SIZE="2"><B><U>OF </U></B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><B><U>ISCO INTERNATIONAL, INC. </U></B></FONT></P> <P
STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2"><B>Note No.: E-1</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2"><B>Original Principal Amount: $2,500,000.00</B></FONT></TD></TR>
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<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2"><B>Issuance Date: June&nbsp;22, 2006</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2"><B>Elk Grove Village, Illinois</B></FONT></TD></TR>
</TABLE> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">T<SMALL>HIS</SMALL> N<SMALL>OTE</SMALL> (&#147;<B>Note</B>&#148;) is one of a duly authorized
issue of Notes of <B>ISCO INTERNATIONAL, INC.</B>, a corporation duly organized and existing under the laws of the State of Delaware (the &#147;<B>Company</B>&#148;), designated as the Company&#146;s 5% Senior Secured Convertible Notes Due June 22,
2010<B> </B>(<B>&#147;Maturity Date&#148;</B>) in an aggregate principal amount (when taken together with the original principal amounts of all other Notes) which does not exceed FIVE MILLION U.S. Dollars (U.S. $5,000,000.00) (the
&#147;<B>Notes&#148;</B>). </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">F<SMALL>OR</SMALL> V<SMALL>ALUE</SMALL> R<SMALL>ECEIVED</SMALL>, the Company hereby promises to pay to the
order of MANCHESTER SECURITIES CORPORATION or its registered assigns or successors-in-interest (<B>&#147;Holder&#148;</B>) the principal sum of TWO MILLION FIVE HUNDRED THOUSAND U.S. DOLLARS (U.S. $2,500,000.00) together with all accrued but unpaid
interest thereon, if any, on the Maturity Date, to the extent such principal amount and interest has not been converted into the Company&#146;s Common Stock, $0.001 par value per share (the <B>&#147;Common Stock&#148;</B>), in accordance with the
terms hereof. Interest on the unpaid principal balance hereof shall accrue at the rate of 5%&nbsp;per annum from the original date of issuance, June&nbsp;22, 2006 (the <B>&#147;Issuance Date&#148;</B>), until the same becomes due and payable on the
Maturity Date, or such earlier date upon acceleration or by conversion or redemption in accordance with the terms hereof or of the other Transaction Documents. Interest on this Note shall accrue daily commencing on the Issuance Date, shall be
compounded monthly and shall be computed on the basis of a 360-day year, 30-day months and actual days elapsed and shall be payable in accordance with Section&nbsp;1 hereof. Notwithstanding anything contained herein, this Note shall bear interest on
the due and unpaid Principal Amount from and after the occurrence and during the continuance of an Event of Default pursuant to Section&nbsp;5(a), at the rate (the &#147;<B>Default Rate</B>&#148;) equal to the lower of twenty </FONT></P>

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 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">percent (20%)&nbsp;per annum or the highest rate permitted by law. Unless otherwise agreed or required by applicable law,
payments will be applied first to any unpaid collection costs, then to unpaid interest and fees (including late charges, if applicable) and any remaining amount to principal. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">Except as otherwise provided herein, all payments of principal and interest (including late charges, if applicable) on this Note shall be made in lawful
money of the United States of America by wire transfer of immediately available funds to such account as the Holder may from time to time designate by written notice in accordance with the provisions of this Note or by Company check. This Note may
not be prepaid in whole or in part except as otherwise provided herein. Whenever any amount expressed to be due by the terms of this Note is due on any day which is not a Business Day (as defined below), the same shall instead be due on the next
succeeding day which is a Business Day. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">Capitalized terms used herein and not otherwise defined shall have the meanings set forth in the
Securities Purchase Agreement dated on or about the Issuance Date pursuant to which the Notes were originally issued (the <B>&#147;Purchase Agreement&#148;</B>). For purposes hereof the following terms shall have the meanings ascribed to them below:
</FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2"><I>&#147;</I><B><I>Business Day</I></B><I>&#148;</I> shall mean any day other than a Saturday, Sunday or a day on which commercial banks in
the City of New York are authorized or required by law or executive order to remain closed. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">&#147;<B><I>Change in Control
Transaction</I></B>&#148; will be deemed to exist if (i)&nbsp;there occurs any consolidation, merger or other business combination of the Company with or into any other corporation or other entity or person (whether or not the Company is the
surviving corporation), or any other corporate reorganization or transaction or series of related transactions in which in any of such events the voting stockholders of the Company prior to such event cease to own 50% or more of the voting stock, or
corresponding voting equity interests, of the surviving corporation after such event (including without limitation any &#147;going private&#148; transaction under Rule 13e-3 promulgated pursuant to the Exchange Act (as defined below) or tender offer
by the Company under Rule 13e-4 promulgated pursuant to the Exchange Act for 20% or more of the Company&#146;s Common Stock), (ii)&nbsp;any person (as defined in Section&nbsp;13(d) of the Exchange Act), together with its affiliates and associates
(as such terms are defined in Rule 405 under the Securities Act), beneficially owns or is deemed to beneficially own (as described in Rule 13d-3 under the Exchange Act without regard to the 60-day exercise period) in excess of 50% of the
Company&#146;s voting power, (iii)&nbsp;there is a replacement of more than one-half of the members of the Company&#146;s Board of Directors which is not approved by those individuals who are members of the Company&#146;s Board of Directors on the
date thereof, or (iv)&nbsp;in one or a series of related transactions, there is a sale or transfer of all or substantially all of the assets of the Company, determined on a consolidated basis, or (v)&nbsp;the execution by the Company of an agreement
to which the Company is a party or which it is bound providing for an event set forth in (i), (ii), (iii)&nbsp;or (iv)&nbsp;above. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman"
SIZE="2"><I>&#147;</I><B><I>Conversion Ratio</I></B><I>&#148;</I> means, at any time, a fraction, of which the numerator is the entire outstanding Principal Amount of this Note (or such portion thereof that is being redeemed or repurchased), and of
which the denominator is the then applicable Conversion Price. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2"><I>&#147;</I><B><I>Conversion Price</I></B><I>&#148;</I> shall equal $0.33 (which Conversion Price shall
be subject to adjustment as set forth herein). </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2"><I>&#147;</I><B><I>Conversion Shares</I></B><I>&#148;</I> means the shares of Common Stock
into which the Notes are convertible (including repayment in Common Stock as set forth herein) in accordance with the terms hereof and the Purchase Agreement. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
FACE="Times New Roman" SIZE="2"><I>&#147;</I><B><I>Convertible Securities</I></B><I>&#148;</I> means any convertible securities, warrants, options or other rights to subscribe for or to purchase or exchange for, shares of Common Stock. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">&#147;<B><I>Debt</I></B>&#148; shall mean indebtedness of any kind. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
FACE="Times New Roman" SIZE="2">&#147;<B><I>Effective Date</I></B>&#148; means the date on which a Registration Statement covering all the Conversion Shares and other Registrable Securities (as defined in the Registration Rights Agreement) is
declared effective by the Securities and Exchange Commission. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">&#147;<B><I>Exchange Act</I></B>&#148; shall mean the Securities Exchange
Act of 1934, as amended. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">&#147;<B><I>Fair Market Price</I></B>&#148; shall mean the closing price (or closing bid price) for the Common
Stock on the Trading Day immediately preceding the date on which the price is being determined. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">&#147;<B><I>Market Price</I></B>&#148;
shall equal 90% of the average of the VWAP for each of the twenty (20)&nbsp;Trading Days, excluding the five (5)&nbsp;highest Trading Days (i.e. the Trading Days with the highest VWAP) from the average, immediately preceding the date on which such
Market Price is being determined. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">&#147;<B><I>MFN Transaction</I></B>&#148; shall mean a transaction in which the Company issues or sells
any securities in a capital raising transaction or series of related transactions (the &#147;<B>MFN Offering</B>&#148;) which grants to the investor (the &#147;<B>MFN Investor</B>&#148;) the right to receive additional securities based upon future
capital raising transactions of the Company on terms more favorable than those granted to the MFN Investor in the MFN Offering. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman"
SIZE="2">&#147;<B><I>Per Share Selling Price</I></B>&#148; shall include the amount actually paid by third parties for each share of Common Stock in a sale or issuance by the Company. In the event a fee is paid by the Company in connection with such
transaction directly or indirectly to such third party or its affiliates, any such fee shall be deducted from the selling price pro rata to all shares sold in the transaction to arrive at the Per Share Selling Price. A sale of shares of Common Stock
shall include the sale or issuance of rights, options, warrants or convertible, exchangeable or exercisable securities, issued or sold on or subsequent to the Closing Date, under which the Company is or may become obligated to issue shares of Common
Stock, and in such circumstances the Per Share Selling Price of the Common Stock covered thereby shall also include the exercise, exchange or conversion price thereof (in addition to the consideration received by the Company upon such sale or
issuance less the fee amount as provided above). In case of any such security issued or sold on or subsequent to the Closing Date in an MFN Transaction, the Per Share Selling Price shall be deemed to be the lowest conversion or exercise price at
which such securities are converted or exercised, or the lowest adjustment price in the case of an MFN Transaction, over the life of such securities. If shares are issued for a consideration other than cash, the Per Share Selling Price shall be the
fair value of such </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
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 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">consideration as determined in good faith by independent certified public accountants mutually acceptable to the Company
and the Purchaser. In the event the Company directly or indirectly effectively reduces the conversion, exercise or exchange price for any Convertible Securities issued or sold on or subsequent to the Closing Date which are currently outstanding
(other than pursuant to the terms of the transaction documentation for such securities as in effect on the date hereof), then the Per Share Selling Price shall equal such effectively reduced conversion, exercise or exchange price. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">&#147;<B><I>Principal Amount</I></B>&#148; shall refer to the sum of (i)&nbsp;the original principal amount of this Note, (ii)&nbsp;all accrued but
unpaid interest hereunder, and (iii)&nbsp;any default payments owing under the Transaction Documents but not previously paid or added to the Principal Amount. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
FACE="Times New Roman" SIZE="2"><I>&#147;</I><B><I>Principal Market</I></B><I>&#148;</I> shall mean the American Stock Exchange or such other principal market or exchange on which the Common Stock is then listed for trading. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">&#147;<B><I>Redemption Date</I></B>&#148; shall mean the date on which the Company has elected to redeem this Note pursuant to Section&nbsp;1(c) below.
</FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">&#147;<B><I>Registration Statement</I></B>&#148; shall have the meaning set forth in the Registration Rights Agreement. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">&#147;<B><I>Securities Act</I></B>&#148; shall mean the Securities Act of 1933, as amended. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2"><I>&#147;</I><B><I>Trading Day&#148;</I></B> shall mean (x)&nbsp;if the Common Stock is listed on the New York Stock Exchange or the American Stock
Exchange, a day on which there is trading on such stock exchange, or (y)&nbsp;if the Common Stock is not listed on either of such stock exchanges but sale prices of the Common Stock are reported on an automated quotation system, a day on which
trading is reported on the principal automated quotation system on which sales of the Common Stock are reported, or (z)&nbsp;if the foregoing provisions are inapplicable, a day on which quotations are reported by National Quotation Bureau
Incorporated. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2"><I>&#147;</I><B><I>VWAP</I></B><I>&#148;</I> shall mean the daily volume weighted average price of the Common Stock on the
Principal Market as reported by Bloomberg Financial L.P. (based on a trading day from 9:30 a.m. Eastern Time to 4:00 p.m. Eastern Time) using the AQR function on the date in question. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">The following terms and conditions shall apply to this Note: </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT
FACE="Times New Roman" SIZE="2"><B>Section&nbsp;1. <U>Payments of Principal and Interest</U>. </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(a) <U>Interest</U>. This Note shall
accrue interest at a rate of 5%&nbsp;per annum daily commencing on the Issuance Date, shall be compounded monthly and shall be computed on the basis of a 360-day year, 30-day months and actual days elapsed. Accrued interest shall be added to the
Principal Amount of this Note. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(b) <U>Payment of Principal</U>. Subject to the provisions hereof, the Principal Amount of this Note shall
be due and payable in cash on the Maturity Date. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(c) <U>Redemption Right of Company</U>. Beginning on the two (2)&nbsp;year anniversary of
the Issuance Date, the Company shall have the right to redeem this Note in full </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
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 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">(but not less than full) in cash upon delivering notice in writing sixty (60)&nbsp;days prior to such Redemption Date.
Nothing in this Section&nbsp;1(c) shall prohibit the Holder from converting this Note prior to the Redemption Date. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2"><B>Section&nbsp;2.</B>
<B><U>Seniority</U></B>. The obligations of the Company hereunder shall rank pari passu to the Company&#146;s Notes governed by the Third Amended and Restated Loan Agreement, dated as of November&nbsp;10, 2004, by and among the Company and the
Holder and Alexander Finance, L.P., as amended (the &#147;<B>Loan Agreement</B>&#148;), and shall be senior to the Company&#146;s unsecured indebtedness. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px; text-indent:4%"><FONT
FACE="Times New Roman" SIZE="2"><B>Section&nbsp;3. <U>Conversion</U></B><B>. </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(a) <U>Conversion by Holder</U>. Subject to the terms
hereof and restrictions and limitations contained herein, the Holder shall have the right, at such Holder&#146;s option, at any time and from time to time to convert the outstanding Principal Amount under this Note in whole or in part by delivering
to the Company a fully executed notice of conversion in the form of conversion notice attached hereto as <U>Exhibit A</U> (the <B>&#147;Conversion Notice&#148;</B>), which may be transmitted by facsimile or electronic transmission (with the original
mailed on the same day be certified or registered mail, postage prepaid and return receipt requested), on the date of conversion (the &#147;<B>Conversion Date</B>&#148;). A Conversion Notice shall be deemed sent on the date of delivery if delivered
before 5:00 p.m. Eastern Standard Time on such date, or the day following such date if delivered after 5:00 p.m. Eastern Standard Time. Notwithstanding anything to the contrary herein, this Note and the outstanding Principal Amount hereunder shall
not be convertible into Common Stock to the extent that such conversion would result in the Holder hereof exceeding the limitations contained in, or otherwise violating the provisions of Section&nbsp;3(i) below. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(b) <I>Conversion Date Procedures</I>. Upon conversion of this Note pursuant to this Section&nbsp;3, the outstanding Principal Amount hereunder shall be
converted into such number of fully paid, validly issued and non-assessable shares of Common Stock, free of any liens, claims and encumbrances, as is determined by dividing the outstanding Principal Amount (and, at the election of the Holder, any
accrued interest or applicable late charges) being converted by the then applicable Conversion Price. If a conversion under this Note cannot be effected in full for any reason, or if the Holder is converting less than all of the outstanding
Principal Amount hereunder pursuant to a Conversion Notice, the Company shall, upon request by the Holder, promptly deliver to the Holder (but no later than five Trading Days after the Conversion Date) a Note for such outstanding Principal Amount
(and, at the election of the Holder, any accrued interest or applicable late charges) as has not been converted if this Note has been surrendered to the Company for partial conversion. The Holder shall not be required to physically surrender this
Note to the Company upon any conversion hereunder unless the full outstanding Principal Amount (and, at the election of the Holder, any accrued interest or applicable late charges) represented by this Note is being converted or repaid. The Holder
and the Company shall maintain records showing the outstanding Principal Amount (and, at the election of the Holder, any accrued interest or applicable late charges) so converted and repaid and the dates of such conversions or repayments or shall
use such other method, reasonably satisfactory to the Holder and the Company, so as not to require physical surrender of this Note upon each such conversion or repayment. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT
SIZE="1">&nbsp;</FONT></P>
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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2">(i) <I>Stock Certificates or DWAC</I>. The Company will deliver to the Holder not later than three
(3)&nbsp;Trading Days after the Conversion Date, a certificate or certificates which shall be free of restrictive legends and trading restrictions (assuming that the Registration Statement has been declared effective), representing the number of
shares of Common Stock being acquired upon the conversion of this Note. In lieu of delivering physical certificates representing the shares of Common Stock issuable upon conversion of this Note, provided the Company&#146;s transfer agent is
participating in the Depository Trust Company (&#147;<B>DTC</B>&#148;) Fast Automated Securities Transfer (&#147;<B>FAST</B>&#148;) program, upon request of the Holder, the Company shall use commercially reasonable efforts to cause its transfer
agent to electronically transmit such shares issuable upon conversion to the Holder (or its designee), by crediting the account of the Holder&#146;s (or such designee&#146;s) prime broker with DTC through its Deposit Withdrawal Agent Commission
system (provided that the same time periods herein as for stock certificates shall apply). If in the case of any conversion hereunder, such certificate or certificates are not delivered to or as directed by the Holder by the third Trading Day after
the Conversion Date, the Holder shall be entitled by written notice to the Company at any time on or before its receipt of such certificate or certificates thereafter, to rescind such conversion, in which event the Company shall immediately return
this Note tendered for conversion. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(c) <U>Conversion Price Adjustments</U>. </FONT></P> <P
STYLE="margin-top:6px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2">(i) <I>Stock Dividends and Splits</I>. If the Company or any of its subsidiaries, at any time while the Notes are outstanding (A)&nbsp;shall pay a stock
dividend or otherwise make a distribution or distributions on any equity securities (including instruments or securities convertible into or exchangeable for such equity securities) in shares of Common Stock, or (B)&nbsp;subdivide outstanding Common
Stock into a larger number of shares, then the applicable then Conversion Price shall be multiplied by a fraction, the numerator of which shall be the number of shares of Common Stock outstanding before such event and the denominator of which shall
be the number of shares of Common Stock outstanding after such event. Any adjustment made pursuant to this Section&nbsp;3(c)(i) shall become effective immediately after the record date for the determination of stockholders entitled to receive such
dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2">(ii)
<I>Distributions</I>. If the Company or any of its subsidiaries, at any time while the Notes are outstanding, shall distribute to all holders of Common Stock evidences of its indebtedness or assets or cash or rights or warrants to subscribe for or
purchase any security of the Company or any of its subsidiaries (excluding those referred to in Section&nbsp;3(c)(i) above), then concurrently with such distributions to holders of Common Stock, the Company shall distribute to holders of the Notes
the amount of such indebtedness, assets, cash or rights or warrants which the holders of the Notes would have received had the Notes been converted into Common Stock. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:13%"><FONT
FACE="Times New Roman" SIZE="2">(iii) <I>Common Stock Issuances</I>. In the event that the Company or any of its subsidiaries on or subsequent to the Closing Date (A)&nbsp;issues or sells any securities which are convertible into or exercisable or
exchangeable for Common Stock (other than Notes issued under the Purchase Agreement or shares or options issued or which may be issued pursuant to the Company&#146;s 2003 Equity Incentive Plan, as amended (the &#147;<B>Incentive Plan</B>&#148;), up
to the Incentive Plan Limit (as defined below)), or any warrants or other rights to subscribe for or to purchase or any options for the purchase of its Common Stock, (B)&nbsp;directly or indirectly effectively reduces the conversion, exercise or
exchange price for any Convertible Securities </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">6 </FONT></P>


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 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">(other than shares or options issued or which may be issued pursuant to the Incentive Plan up to the Incentive Plan
Limit) which are currently outstanding (other than pursuant to terms existing on the date hereof) or (C)&nbsp;issues or sells any Common Stock at or to an effective Per Share Selling Price which is less than the Conversion Price in effect
immediately prior to such issue or sale or record date, as applicable, then the Conversion Price shall be reduced by multiplying the existing Conversion Price by a fraction (x)&nbsp;the numerator of which shall be the sum of (i)&nbsp;the number of
shares of Common Stock outstanding immediately prior to such sale or issuance or reduction and (ii)&nbsp;the number of shares of Common Stock which the aggregate consideration received by the Company would purchase at such Conversion Price; and
(y)&nbsp;the denominator of which shall be the number of shares of Common Stock outstanding (or deemed outstanding, as discussed below) immediately after such issue, sale or reduction. effective concurrently with such issue or sale to equal such
lower Per Share Selling Price. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">&#147;<B>Incentive Plan Limit</B>&#148; shall mean an amount, with respect to each calendar year, equal to
2.5% of the number of the Company&#146;s outstanding shares of Common Stock, provided that (AA) for calendar year 2006, only issuances made after June&nbsp;16, 2006 shall be counted, (BB) this amount shall be net of any shares or options issued
under the Incentive Plan which are cancelled, forfeited, expired or redeemed, and (CC) for purposes of calculating this amount, restricted shares shall count as two shares of Common Stock and option shares shall count as one share of Common Stock.
To the extent that the Company issues securities under the Incentive Plan beyond the Incentive Plan Limit, such issuances shall not be exempt from the adjustment provisions of this Note. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">For the purposes of the foregoing adjustment, in the case of any Convertible Securities, the maximum number of shares of Common Stock issuable upon
exercise, exchange or conversion of such Convertible Securities shall be deemed to be outstanding, provided that no further adjustment shall be made upon the actual issuance of Common Stock upon exercise, exchange or conversion of such Convertible
Securities. Notwithstanding anything to the contrary herein, the maximum number of Conversion Shares, including such shares of Common Stock issuable pursuant to the adjustment provisions of Section&nbsp;3(c) hereof, shall not exceed the Maximum
Common Stock Issuance (as defined in Section&nbsp;3(i)). </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">In the event a fee is paid by the Company in connection with a transaction
described in this clause (iii), the portion of such fee in excess of 3% of the purchase price in such transactions shall be deducted from the selling price pro rata to all shares sold in the transaction to arrive at the Per Share Selling Price.
</FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">For purposes of this Section&nbsp;3(c)(iii), if an event occurs that triggers more than one of the above adjustment provisions, then only
one adjustment shall be made and the calculation method which yields the greatest downward adjustment in the Conversion Price shall be used. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman"
SIZE="2">For purposes of making the foregoing adjustments, the following provisions shall apply. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:17%"><FONT FACE="Times New Roman" SIZE="2"><I>A. [Intentionally Omitted]</I>
</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">7 </FONT></P>


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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:17%"><FONT FACE="Times New Roman" SIZE="2">B. <U>Issuance of Convertible Securities</U>. If the Company in any manner issues or sells any
Convertible Securities (other than shares or options issued or which may be issued pursuant to the Incentive Plan up to the Incentive Plan Limit) and the lowest price per share for which one share of Common Stock is issuable upon such conversion,
exchange or exercise thereof is less than the Conversion Price in effect immediately prior to such issuance, then such share of Common Stock shall be deemed to be outstanding and to have been issued and sold by the Company at the time of the
issuance of sale of such Convertible Securities for such price per share. For the purposes of this Section&nbsp;3(c)(iii)(B), the &#147;lowest price per share for which one share of Common Stock is issuable upon such conversion, exchange or
exercise&#148; shall be equal to the sum of the lowest amounts of consideration (if any) received or receivable by the Company with respect to any one share of Common Stock upon the issuance or sale of the Convertible Security and upon the
conversion, exchange or exercise of such Convertible Security. No further adjustment of the Conversion Price shall be made upon the actual issuance of such Common Stock upon conversion, exchange or exercise of such Convertible Securities, and if any
such issue or sale of such Convertible Securities is made upon exercise of any options for which adjustment of the Conversion Price had been or are to be made pursuant to other provisions of this Section&nbsp;3(c)(iii)(B), no further adjustment of
the Conversion Price shall be made by reason of such issue or sale. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:17%"><FONT FACE="Times New Roman" SIZE="2">C. <U>Change in Option Price or Rate of Conversion</U>. Except for
shares or options issued or which may be issued pursuant to the Incentive Plan up to the Incentive Plan Limit, if the purchase or exercise price provided for in any Convertible Securities, the additional consideration, if any, payable upon the
issue, conversion, exchange or exercise of any Convertible Securities, or the rate at which any Convertible Securities are convertible into or exchangeable or exercisable for Common Stock changes at any time, the Conversion Price in effect at the
time of such change shall be adjusted to the Conversion Price that would have been in effect at such time had such Convertible Securities provided for such changed purchase price, additional consideration or changed conversion rate, as the case may
be, at the time initially granted, issued or sold. For purposes of this Section&nbsp;3(c)(iii)(C), if the terms of any option or Convertible Security that was outstanding as of the date of issuance of the Notes are changed in the manner described in
the immediately preceding sentence, then such option or Convertible Security and the Common Stock deemed issuable upon exercise, conversion or exchange thereof shall be deemed to have been issued as of the date of such change. No adjustment shall be
made if such adjustment would result in an increase of the Conversion Price then in effect. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:17%"><FONT FACE="Times New Roman" SIZE="2">D. <U>Calculation of Consideration
Received</U>. In case any option is issued in connection with the issue or sale of other securities of the Company, together comprising one integrated transaction in which no specific consideration is allocated to such options by the parties
thereto, then solely for purposes of this Section&nbsp;3, the options will be deemed to have been issued for a consideration of $0.01. If any Common Stock or Convertible Securities (other than shares or options issued or which may be issued pursuant
to the Incentive Plan up to the Incentive Plan Limit) are issued or sold or deemed to have been issued or sold for cash, the consideration received therefor will be deemed to be the gross amount received by the Company therefor. If any Common Stock
or Convertible Securities (other than shares or options issued or which may be issued pursuant to the Incentive Plan up to the Incentive Plan Limit) are issued or sold for a consideration other than cash, the amount of the consideration other than
cash received by the Company will be the fair value of such consideration, except where such consideration consists of marketable securities, in which case the amount of consideration </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT
SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">8 </FONT></P>


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 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">received by the Company will be the arithmetic average of the Closing Sale Prices of such securities during the ten
(10)&nbsp;consecutive Trading Days ending on the date of receipt of such securities. The fair value of any consideration other than cash or securities will be determined jointly by the Company and the holders of the Notes. If such parties are unable
to reach agreement within ten (10)&nbsp;days after the occurrence of an event requiring valuation (the &#147;Valuation Event&#148;), the fair value of such consideration will be determined within five (5)&nbsp;Business Days after the tenth
(10</FONT><FONT FACE="Times New Roman" SIZE="1" COLOR="#000000"><SUP>th</SUP></FONT><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">)&nbsp;day following the Valuation Event by an independent, reputable appraiser selected by the Company and the
holders of the Notes. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:17%"><FONT FACE="Times New Roman" SIZE="2">E. <U>Record Date</U>. If the Company takes a record of the holders of Common Stock for the purpose of entitling
them (A)&nbsp;to receive a dividend or other distribution payable in Common Stock, options or Convertible Securities or (B)&nbsp;to subscribe for or purchase Common Stock, options or Convertible Securities, then such record date will be deemed to be
the date of the issue or sale of the shares of Common Stock deemed to have been issued or sold upon the declaration of such dividend or the making of such other distribution or the date of the granting of such right of subscription or purchase, as
the case may be. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2">(iv) <I>Rounding of Adjustments</I>.<B> </B>All calculations under this Section&nbsp;3 shall be made to the nearest cent
or the nearest 1/100th of a share, as the case may be. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2">(v) <I>Notice of Adjustments</I>.<B> </B>Whenever any Affected Conversion Price is
adjusted pursuant to Section&nbsp;3(c)(ii) or (iii)&nbsp;above, the Company shall promptly deliver to each holder of the Notes, a notice setting forth the Affected Conversion Price after such adjustment and setting forth a brief statement of the
facts requiring such adjustment, provided that any failure to so provide such notice shall not affect the automatic adjustment hereunder. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman"
SIZE="2">(vi) <I>Change in Control Transactions</I>. In case of any Change in Control Transaction, the Holder shall have the right thereafter to, at its option, (A)&nbsp;convert this Note, in whole or in part, at the then applicable Conversion Price
into the shares of stock and other securities, cash and/or property receivable upon or deemed to be held by holders of Common Stock following such Change in Control Transaction, and the Holder shall be entitled upon such event to receive such amount
of securities, cash or property as the shares of the Common Stock of the Company into which this Note could have been converted immediately prior to such Change in Control Transaction would have been entitled if such conversion were permitted,
subject to such further applicable adjustments set forth in this Section&nbsp;3 (provided that the limitations in Section&nbsp;3(i) shall not apply to the extent that Holder shall have waived them) or (B)&nbsp;require the Company or its successor to
redeem this Note, in whole or in part, at a redemption price equal to 110% of the outstanding Principal Amount (plus any accrued interest or applicable late charges) being redeemed. The terms of any such Change in Control Transaction shall include
such terms so as to continue to give to the Holders the right to receive the amount of securities, cash and/or property upon any conversion or redemption following such Change in Control Transaction to which a holder of the number of shares of
Common Stock deliverable upon such conversion would have been entitled in such Change in Control Transaction, and interest payable hereunder shall be in cash or such new securities and/or property, at the Holder&#146;s option. This provision shall
similarly apply to successive reclassifications, consolidations, mergers, sales, transfers or share exchanges. Notwithstanding any other provisions of this Note, the Holder shall be permitted to convert all or any portion of the Principal Amount
(plus any accrued interest or late charges, if applicable) at the Conversion Price described in Section&nbsp;3(c) herein at any time until the consummation of the Change in Control Transaction. </FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">9 </FONT></P>


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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2">(vii) <I>Notice of Certain Events</I>. If: </FONT></P> <P
STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="17%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">A.</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">the Company shall declare a dividend (or any other distribution) on its Common Stock; or </FONT></TD></TR></TABLE> <P
STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="17%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">B.</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">the Company shall declare a special nonrecurring cash dividend on or a redemption of its Common Stock; or </FONT></TD></TR></TABLE> <P
STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="17%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">C.</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">the Company shall authorize the granting to all holders of the Common Stock rights or warrants to subscribe for or purchase any shares of capital stock of any class or of any
rights; or </FONT></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="17%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">D.</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">the approval of any stockholders of the Company shall be required in connection with any reclassification of the Common Stock of the Company, any consolidation or merger to which
the Company is a party, any sale or transfer of all or substantially all of the assets of the Company, of any compulsory share of exchange whereby the Common Stock is converted into other securities, cash or property; or </FONT></TD></TR></TABLE> <P
STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="17%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">E.</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Company; </FONT></TD></TR></TABLE> <P
STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">then the Company shall cause to be filed at each office or agency maintained for the purpose of conversion of this Note, and shall cause to be mailed to the Holder at
its last address as it shall appear upon the books of the Company, on or prior to the date notice to the Company&#146;s stockholders generally is given, a notice stating (x)&nbsp;the date on which a record is to be taken for the purpose of such
dividend, distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of Common Stock of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined
or (y)&nbsp;the date on which such reclassification, consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expected that holders of Common Stock of record shall be entitled
to exchange their shares of Common Stock for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(d) <U>Reservation and Issuance of Underlying Securities</U>. The Company covenants that it will at all times reserve and keep available out of its
authorized and unissued Common Stock solely for the purpose of issuance upon conversion of this Note (including repayments in stock), free from preemptive rights or any other actual contingent purchase rights of persons other than the holders of the
Notes, not less than the Maximum Common Stock Issuance (as defined below). The Company covenants that all shares of Common Stock that shall be so issuable shall, upon issue, be duly authorized, validly issued, fully paid, nonassessable and freely
tradeable. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">10 </FONT></P>


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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(e) <U>No Fractions</U>. Upon a conversion hereunder the Company shall not be required to issue stock
certificates representing fractions of shares of Common Stock, but may if otherwise permitted, make a cash payment in respect of any final fraction of a share based on the closing price of a share of Common Stock on the Principal Market at such
time. If the Company elects not, or is unable, to make such cash payment, the Holder shall be entitled to receive, in lieu of the final fraction of a share, one whole share of Common Stock. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(f) <U>Charges, Taxes and Expenses</U>. Issuance of certificates for shares of Common Stock upon the conversion of this Note (including repayment in
stock) shall be made without charge to the holder hereof for any issue or transfer tax or other incidental expense in respect of the issuance of such certificate, all of which taxes and expenses shall be paid by the Company, and such certificates
shall be issued in the name of the Holder or in such name or names as may be directed by the Holder; <U>provided</U>, <U>however</U>, that in the event certificates for shares of Common Stock are to be issued in a name other than the name of the
Holder, this Note when surrendered for conversion shall be accompanied by an assignment form; and <U>provided</U> <U>further</U>, that the Company shall not be required to pay any tax or taxes which may be payable in respect of any such transfer.
</FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(g) <U>Cancellation</U>. After all of the Principal Amount (including accrued but unpaid interest and default payments (including any
applicable late charges) at any time owed on this Note) have been paid in full or converted into Common Stock, this Note shall automatically be deemed canceled and the Holder shall promptly surrender the Note to the Company at the Company&#146;s
principal executive offices. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(h) <U>Notices Procedures</U>. Any and all notices or other communications or deliveries to be provided by
the Holder hereunder, including, without limitation, any Conversion Notice, shall be in writing and delivered personally, by confirmed facsimile, electronic transmission, or by a nationally recognized overnight courier service to the Company at the
facsimile telephone number or address of the principal place of business of the Company as set forth in the Purchase Agreement. Any and all notices or other communications or deliveries to be provided by the Company hereunder shall be in writing and
delivered personally, by facsimile, electronic transmission, or by a nationally recognized overnight courier service addressed to the Holder at the facsimile telephone number or address of the Holder appearing on the books of the Company, or if no
such facsimile telephone number or address appears, at the principal place of business of the Holder. Any notice or other communication or deliveries hereunder shall be deemed delivered (i)&nbsp;upon receipt, when delivered personally,
(ii)&nbsp;when sent by facsimile, upon receipt if received on a Business Day prior to 5:00 p.m. (Eastern Time), or on the first Business Day following such receipt if received on a Business Day after 5:00 p.m. (Eastern Time) or (iii)&nbsp;upon
receipt, when deposited with a nationally recognized overnight courier service. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(i) <U>Conversion Limitation; Overall Limit on Common
Stock Issuable</U>. Notwithstanding anything contained herein to the contrary, the number of shares of Common Stock issuable by the Company and acquirable by the Holders of Notes shall not in the aggregate exceed 19.9% of the number of shares of
Common Stock outstanding on the Closing Date, subject to appropriate adjustment for stock splits, stock dividends, or other similar recapitalizations affecting the Common Stock (the <B>&#147;Maximum Common Stock Issuance&#148;</B>). The Maximum
Common Stock issuance shall be allocated <U>pro</U> <U>rata</U> to the Holders of the Notes in accordance with their percentage of the purchase price set forth below their signatures on the signature pages to the Purchase Agreement. </FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">11 </FONT></P>


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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2"><B></B><B>Section&nbsp;4. </B><U><B>Defaults</B> <B>and Remedies</B>.</U><B> </B></FONT></P> <P
STYLE="margin-top:6px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(a) <U>Events of Default</U>. An &#147;<B>Event of Default</B>&#148; is: (i)&nbsp;a default in the payment of any Principal Amount of the Notes;
(ii)&nbsp;default in payment of the principal amount or accrued but unpaid interest thereon of any of the Original Notes, New Notes, July 2004 Notes or November 2004 Notes issued to Holder (each as defined in the Security Agreement, and collectively
with the Notes, the &#147;<B>ISCO Notes</B>&#148;)), on or after the date such payment is due, (iii)&nbsp;failure by the Company for ten (10)&nbsp;days after notice to it, to comply with any other material provision of any of the ISCO Notes, the
Registration Rights Agreement or the Purchase Agreement or the Loan Agreement; (iv)&nbsp;an Event of Default under the Security Agreement or the ISCO Notes; (v)&nbsp;a breach by the Company of its representations or warranties in the Purchase
Agreement or under any of the Guaranties (as defined below); (vi)&nbsp;any default under or acceleration prior to maturity of any mortgage, indenture or instrument under which there may be issued or by which there may be secured or evidenced any
indebtedness for money borrowed by the Company or a subsidiary of the Company or for money borrowed the repayment of which is guaranteed by the Company or a subsidiary of the Company, whether such indebtedness or guarantee now exists or shall be
created hereafter, provided that the obligations with respect to any such borrowed or accelerated amount exceeds, in the aggregate, $500,000; (vii)&nbsp;any money judgment, writ or warrant of attachment, or similar process in excess of $500,000 in
the aggregate shall be entered or filed against the Company or a subsidiary of the Company or any of their respective properties or other assets and shall remain unpaid, unvacated, unbonded and unstayed for a period of 45 days; (viii)&nbsp;if the
Company or any subsidiary of the Company pursuant to or within the meaning of any Bankruptcy Law: (A)&nbsp;commences a voluntary case; (B)&nbsp;has an involuntary case commenced against it, and such case is not dismissed within 30 days of such
commencement or consents to the entry of an order for relief against it in an involuntary case; (C)&nbsp;consents to the appointment of a Custodian of it for all or substantially all of its property; (D)&nbsp;makes a general assignment for the
benefit of its creditors; or (E)&nbsp;admits in writing that it is generally unable to pay its debts as the same become due; or (ix)&nbsp;a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that: (1)&nbsp;is for
relief against the Company in an involuntary case; (2)&nbsp;appoints a Custodian of the Company or for all or substantially all of its property; or (3)&nbsp;orders the liquidation of the Company or any subsidiary, and the order or decree remains
unstayed and in effect for ninety (90)&nbsp;days. The terms &#147;<B>Bankruptcy Law</B>&#148; means Title 11, U.S. Code, or any similar federal or state law for the relief of debtors. The term &#147;<B>Custodian</B>&#148; means any receiver,
trustee, assignee, liquidator or similar official under any Bankruptcy Law. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(b) <U>Remedies</U>. If an Event of Default occurs and is
continuing with respect to any of the Notes, the Holder may declare all of the then outstanding Principal Amount of this Note and all other Notes held by the Holder, including any interest due thereon, to be due and payable immediately, except that
in the case of an Event of Default arising from events described in clauses (vii)&nbsp;and (viii)&nbsp;of Section&nbsp;4(a) hereof, this Note shall become due and payable without further action or notice. In the event of an acceleration, the amount
due and owing to the Holder shall be the greater of (1)&nbsp;110% of the outstanding Principal Amount of the Notes held by the Holder (plus all accrued and unpaid interest, if any) and (2)&nbsp;the product of (A)&nbsp;the highest closing price for
the five (5)&nbsp;Trading Days immediately preceding the Holder&#146;s acceleration and (B)&nbsp;the </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">12 </FONT></P>


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 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">Conversion Ratio. In either case the Company shall pay interest on such amount in cash at the Default Rate to the Holder
if such amount is not paid within seven days of Holder&#146;s request. The remedies under this Note shall be cumulative. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman"
SIZE="2"><B>Section&nbsp;5</B>. <U>Purchase Agreement; Security Agreement; Guaranties</U>. This Note is being issued to the Holder in connection with the Purchase Agreement and is entitled to the benefits thereof. In addition the Company&#146;s
obligations under this Note are guaranteed by the Guaranties (the &#147;<B>Guaranties</B>&#148;) of Spectral Solutions, Inc. and Illinois Superconductor Canada Corporation, subsidiaries of the Company (the together, the
&#147;<B>Guarantors</B>&#148;) and this Note is entitled to the benefits thereof. The Company&#146;s obligations under this Note are also secured, pursuant to the terms of the Security Agreement by all the assets of the Company and the Guarantors.
</FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2"><B>Section&nbsp;6. </B>General.<B> </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:8%"><FONT
FACE="Times New Roman" SIZE="2">(a) <U>Payment of Expenses</U>. The Company agrees to pay all reasonable charges and expenses, including reasonable attorneys&#146; fees and expenses, which may be incurred by the Holder in successfully enforcing this
Note and/or collecting any amount due under this Note. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(b) <U>Savings Clause</U>. In case any provision of this Note is held by a court of
competent jurisdiction to be excessive in scope or otherwise invalid or unenforceable, such provision shall be adjusted rather than voided, if possible, so that it is enforceable to the maximum extent possible, and the validity and enforceability of
the remaining provisions of this Note will not in any way be affected or impaired thereby. In no event shall the amount of interest paid hereunder exceed the maximum rate of interest on the unpaid principal balance hereof allowable by applicable
law. If any sum is collected in excess of the applicable maximum rate, the excess collected shall be applied to reduce the principal debt. If the interest actually collected hereunder is still in excess of the applicable maximum rate, the interest
rate shall be reduced so as not to exceed the maximum allowable under law. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(c) <U>Amendment</U>. Neither this Note nor any term hereof may
be amended, waived, discharged or terminated other than by a written instrument signed by the Company and holders of 75% of the Principal Amount of all Notes. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT
FACE="Times New Roman" SIZE="2">(d) <U>Assignment, Etc.</U> The Holder may assign or transfer this Note to any transferee. The Holder shall notify the Company of any such assignment or transfer promptly. This Note shall be binding upon the Company
and its successors and shall inure to the benefit of the Holder and its successors and permitted assigns. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(e) <U>No Waiver</U>. No failure
on the part of the Holder to exercise, and no delay in exercising any right, remedy or power hereunder shall operate as a waiver thereof, nor shall any single or partial exercise by the Holder of any right, remedy or power hereunder preclude any
other or future exercise of any other right, remedy or power. Each and every right, remedy or power hereby granted to the Holder or allowed it by law or other agreement shall be cumulative and not exclusive of any other, and may be exercised by the
Holder from time to time. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">13 </FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">

 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(f) <U>Governing Law; Jurisdiction</U>. </FONT></P> <P
STYLE="margin-top:6px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2">(i) <I>Governing Law. </I>THIS NOTE WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO ANY
CONFLICTS OF LAWS PROVISIONS THEREOF THAT WOULD OTHERWISE REQUIRE THE APPLICATION OF THE LAW OF ANY OTHER JURISDICTION. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2">(ii)
<I>Jurisdiction</I>. The Company irrevocably submits to the exclusive jurisdiction of any State or Federal Court sitting in the State of New York, County of New York, over any suit, action, or proceeding arising out of or relating to this Note. The
Company irrevocably waives, to the fullest extent permitted by law, any objection which it may now or hereafter have to the laying of the venue of any such suit, action, or proceeding brought in such a court and any claim that suit, action, or
proceeding has been brought in an inconvenient forum. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:17%"><FONT FACE="Times New Roman" SIZE="2">The Company agrees that the service of process upon it mailed by certified or
registered mail, postage prepaid and return receipt requested (and service so made shall be deemed complete three days after the same has been posted as aforesaid) or by personal service shall be deemed in every respect effective service of process
upon it in any such suit or proceeding. Nothing herein shall affect Holder&#146;s right to serve process in any other manner permitted by law. The Company agrees that a final non-appealable judgment in any such suit or proceeding shall be conclusive
and may be enforced in other jurisdictions by suit on such judgment or in any other lawful manner. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2">(iii) <I>NO JURY TRIAL</I>. THE
COMPANY HEREBY KNOWINGLY AND VOLUNTARILY WAIVES ANY AND ALL RIGHTS IT MAY HAVE TO A TRIAL BY JURY WITH RESPECT TO ANY LITIGATION BASED ON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS NOTE. </FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">14 </FONT></P>


<p Style='page-break-before:always'>
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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(g) <U>Replacement Notes</U>. This Note may be exchanged by Holder at any time and from time to time for
a Note or Notes with different denominations representing an equal aggregate outstanding Principal Amount, as reasonably requested by Holder, upon surrendering the same. No service charge will be made for such registration or exchange. In the event
that Holder notifies the Company that this Note has been lost, stolen or destroyed, a replacement Note identical in all respects to the original Note (except for registration number and Principal Amount, if different than that shown on the original
Note), shall be issued to the Holder, provided that the Holder executes and delivers to the Company an agreement reasonably satisfactory to the Company to indemnify the Company from any loss incurred by it in connection with the Note. </FONT></P> <P
STYLE="margin-top:18px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><I>[Signature Page Follows] </I></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">15 </FONT></P>


<p Style='page-break-before:always'>
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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2"><B>IN WITNESS WHEREOF</B>, the Company has caused this Note to be duly executed on June 21, 2006.
</FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P><DIV ALIGN="right">
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="40%" BORDER="0">

<TR>
<TD WIDTH="13%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="86%"></TD></TR>
<TR>
<TD VALIGN="top" COLSPAN="3"><FONT FACE="Times New Roman" SIZE="2"><B>ISCO INTERNATIONAL, INC.</B></FONT></TD></TR>
<TR>
<TD HEIGHT="16"></TD>
<TD HEIGHT="16" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">By:</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" STYLE="BORDER-BOTTOM:1px solid #000000"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">/s/ John Thode</FONT></P></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Name:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">John Thode</FONT></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Title:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">CEO</FONT></TD></TR>
</TABLE></DIV> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="43%" BORDER="0">

<TR>
<TD WIDTH="11%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="88%"></TD></TR>
<TR>
<TD VALIGN="top" COLSPAN="3"><FONT FACE="Times New Roman" SIZE="2"><I><U>Attest:</U></I></FONT></TD></TR>
<TR>
<TD HEIGHT="16"></TD>
<TD HEIGHT="16" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Sign:</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" STYLE="BORDER-BOTTOM:1px solid #000000"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">/s/ Frank Cesario</FONT></P></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Print Name: Frank Cesario</FONT></TD></TR>
</TABLE> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">16 </FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">

 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><B><U>EXHIBIT A </U></B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT
FACE="Times New Roman" SIZE="2"><B>FORM OF CONVERSION NOTICE </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; margin-left:2%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2">(To be Executed by the Holder </FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px; margin-left:2%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2">in order to Convert a Note) </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">The
undersigned hereby elects to convert the aggregate outstanding Principal Amount (as defined in the Note) indicated below of this Note into shares of Common Stock, $0.001 par value per share (the &#147;Common Stock&#148;), of ISCO INTERNATIONAL, INC.
(the &#147;Company&#148;) according to the conditions hereof, as of the date written below. If shares are to be issued in the name of a person other than the undersigned, the undersigned will pay all transfer taxes payable with respect thereto and
is delivering herewith such certificates and opinions as reasonably requested by the Company in accordance therewith. No fee will be charged to the holder for any conversion, except for such transfer taxes, if any. The undersigned represents as of
the date hereof that, after giving effect to the conversion of this Note pursuant to this Conversion Notice, the undersigned will not exceed the &#147;Restricted Ownership Percentage&#148; contained in Section&nbsp;3(i) of this Note and will remain
in compliance with Section&nbsp;3(i) of this Note. </FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" BORDER="0" ALIGN="center">

<TR>
<TD WIDTH="40%"></TD>
<TD VALIGN="bottom" WIDTH="4%"></TD>
<TD WIDTH="56%"></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Conversion information:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000">&nbsp;</P></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">Date to Effect Conversion</FONT></TD></TR>
<TR>
<TD HEIGHT="16"></TD>
<TD HEIGHT="16" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000">&nbsp;</P></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">Aggregate Principal Amount of Note Being Converted</FONT></TD></TR>
<TR>
<TD HEIGHT="16"></TD>
<TD HEIGHT="16" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000">&nbsp;</P></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">Aggregate Interest (plus any applicable late charges) Being Converted</FONT></TD></TR>
<TR>
<TD HEIGHT="16"></TD>
<TD HEIGHT="16" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000">&nbsp;</P></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">Number of shares of Common Stock to&nbsp;be&nbsp;Issued</FONT></TD></TR>
<TR>
<TD HEIGHT="16"></TD>
<TD HEIGHT="16" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000">&nbsp;</P></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">Applicable Conversion Price</FONT></TD></TR>
<TR>
<TD HEIGHT="16"></TD>
<TD HEIGHT="16" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000">&nbsp;</P></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">Signature</FONT></TD></TR>
<TR>
<TD HEIGHT="16"></TD>
<TD HEIGHT="16" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000">&nbsp;</P></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">Name</FONT></TD></TR>
<TR>
<TD HEIGHT="16"></TD>
<TD HEIGHT="16" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000">&nbsp;</P></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">Address</FONT></TD></TR>
</TABLE>
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</TEXT>
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