THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR ANY APPLICABLE STATE
SECURITIES OR “BLUE SKY” LAWS. THE SECURITIES MAY NOT BE SOLD, TRANSFERRED OR
ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE
SECURITIES UNDER SAID ACT, OR AN OPINION OF COUNSEL IN FORM, SUBSTANCE AND SCOPE
CUSTOMARY FOR OPINIONS OF COUNSEL IN COMPARABLE TRANSACTIONS THAT REGISTRATION
IS NOT REQUIRED UNDER SAID ACT OR UNLESS SOLD PURSUANT TO RULE 144 OR REGULATION
S UNDER SAID ACT.

 

PIMI AGRO CLEANTECH, INC.

10% SECURED CONVERTIBLE DEBENTURE

DUE NOVEMBER 2, 2013

 

May 2, 2013 $________

 

FOR VALUE RECEIVED, PIMI AGRO CLEANTECH, INC., a Delaware corporation
(hereinafter called the “Borrower”), hereby promises to pay to the order of
______________ or his registered assigns (the “Holder”) the sum of $_________
(____________________US dollars), upon the earlier to occur of (i) November 2,
2013, or (ii) the Borrower raises financing of at least $1,000,000 (one million
US dollars) (the “Maturity Date”), and to pay interest on the unpaid principal
balance hereof at the rate of ten percent (10%) (the “Interest Rate”) per annum
from May 2, 2013 (the “Issue Date”) until the same becomes due and payable,
whether at maturity or upon acceleration or by prepayment or otherwise. Interest
shall commence accruing on the Issue Date, shall be computed on the basis of a
365-day year and the actual number of days elapsed and shall be payable
quarterly in arrears. All payments due hereunder (to the extent not converted
into the common stock, $0.01 par value per share, of the Borrower (the “Common
Stock”) in accordance with the terms hereof) shall be made in lawful money of
the United States of America. All payments shall be made at such address as the
Holder shall hereafter give to the Borrower by written notice made in accordance
with the provisions of this Debenture. Whenever any amount expressed to be due
by the terms of this Debenture is due on any day which is not a business day,
the same shall instead be due on the next succeeding day which is a business day
and, in the case of any interest payment date which is not the date on which
this Debenture is paid in full, the extension of the due date thereof shall not
be taken into account for purposes of determining the amount of interest due on
such date.

 

 

 

 

The following terms shall apply to this Debenture:

 

Article I. CONVERSION RIGHTS

 

1.1         Holder Conversion Right.

 

(a)          The Holder shall have the right from time to time, and at any time
on or prior to the earlier of (i) the Maturity Date and (ii) the date of payment
of (i) the outstanding principal amount of this Debenture plus (ii) accrued and
unpaid interest, if any, due hereunder, to convert all or any part of the
outstanding principal amount of this Debenture into fully paid and
non-assessable shares of Common Stock, at a conversion price equal to $1.00 per
share (the “Conversion Price”), as specified hereinafter (a “Conversion”).

 

(b)          The number of shares of Common Stock to be issued upon each
conversion of this Debenture shall be determined by dividing the Conversion
Amount (as defined below) by the Conversion Price as specified in the notice of
conversion, in the form attached hereto as Exhibit A (the “Notice of
Conversion”), delivered to the Borrower by the Holder in accordance with Section
1.4 below; provided that the Notice of Conversion is submitted by facsimile (or
by other means resulting in, or reasonably expected to result in, notice) to the
Borrower on such conversion date (the “Conversion Date”). For the purposes
hereof “Conversion Amount” means, with respect to any conversion of this
Debenture, the principal amount to be converted in such conversion and any
accrued and unpaid interest thereunder.

 

1.2         Authorized Shares

 

The Borrower covenants that during the period the conversion right exists, the
Borrower will reserve from its authorized and unissued Common Stock a sufficient
number of shares, free from preemptive rights, to provide for the issuance of
Common Stock upon the full conversion of this Debenture (the “Reserved Amount”).
The Borrower represents that upon issuance, such shares will be duly and validly
issued, fully paid and non-assessable.

 

If, at any time a Holder of this Debenture submits a Notice of Conversion, and
the Borrower does not have sufficient authorized but unissued shares of Common
Stock available to effect such conversion in accordance with the provisions of
this Article I (a “Conversion Default”) the Borrower shall issue to the Holder
all of the shares of Common Stock which are then available to effect such
conversion. The portion of this Debenture which the Holder included in its
Conversion Notice and which exceeds the amount which is then convertible into
available shares of Common Stock (the “Excess Amount”) shall, notwithstanding
anything to the contrary contained herein, not be convertible into Common Stock
in accordance with the terms hereof until (and at the Holder’s option at any
time after) the date additional shares of Common Stock are authorized by the
Borrower to permit such conversion. The Borrower shall use its best efforts to
authorize a sufficient number of shares of Common Stock as soon as practicable
following the earlier of (i) such time that the Holder notifies the Borrower or
that the Borrower otherwise becomes aware that there are or likely will be
insufficient authorized and unissued shares to allow full conversion thereof and
(ii) a Conversion Default.

 

2

 

 

1.3         Method of Conversion.

 

(a)          Mechanics of Conversion. Subject to Section 1.3, this Debenture may
be converted by the Holder in whole or in part at any time from time to time
after the Issue Date, by (A) submitting to the Borrower a Notice of Conversion
(by facsimile or other reasonable means of communication dispatched on the
Conversion Date) and (B) subject to Section 1.3(b), surrendering this Debenture
at the principal office of the Borrower.

 

(b)          Surrender of Debenture Upon Conversion. Notwithstanding anything to
the contrary set forth herein, upon conversion of this Debenture in accordance
with the terms hereof, the Holder shall not be required to physically surrender
this Debenture to the Borrower unless the entire unpaid principal amount of this
Debenture is so converted. The Holder and the Borrower shall maintain records
showing the principal amount so converted and the dates of such conversions or
shall use such other method, reasonably satisfactory to the Holder and the
Borrower, so as not to require physical surrender of this Debenture upon each
such conversion. In the event of any dispute or discrepancy, such records of the
Borrower shall be controlling and determinative in the absence of manifest
error. Notwithstanding the foregoing, if any portion of this Debenture is
converted as aforesaid, the Holder may not transfer this Debenture unless the
Holder first physically surrenders this Debenture to the Borrower, whereupon the
Borrower will forthwith issue and deliver upon the order of the Holder a new
Debenture of like tenor, registered as the Holder (upon payment by the Holder of
any applicable transfer taxes) may request, representing in the aggregate the
remaining unpaid principal amount of this Debenture. The Holder and any
assignee, by acceptance of this Debenture, acknowledge and agree that, by reason
of the provisions of this paragraph, following conversion of a portion of this
Debenture, the unpaid and unconverted principal amount of this Debenture
represented by this Debenture may be less than the amount stated on the face
hereof.

 

(c)          Payment of Taxes. The Borrower shall not be required to pay any tax
which may be payable in respect of any transfer involved in the issue and
delivery of shares of Common Stock or other securities or property on conversion
of this Debenture in a name other than that of the Holder (or in street name),
and the Borrower shall not be required to issue or deliver any such shares or
other securities or property unless and until the person or persons (other than
the Holder or the custodian in whose street name such shares are to be held for
the Holder’s account) requesting the issuance thereof shall have paid to the
Borrower the amount of any such tax or shall have established to the
satisfaction of the Borrower that such tax has been paid.

 

(d)          Delivery of Common Stock Upon Conversion. Upon receipt by the
Borrower from the Holder of a facsimile transmission (or other reasonable means
of communication) of a Notice of Conversion meeting the requirements for
conversion as provided in this Section 1.4, the Borrower shall issue and deliver
or cause to be issued and delivered to or upon the order of the Holder
certificates for the Common Stock issuable upon such conversion after such
receipt (and, solely in the case of conversion of the entire unpaid principal
amount hereof, surrender of this Debenture) in accordance with the terms hereof.

 

3

 

 

(e)          Obligation of Borrower to Deliver Common Stock. Upon receipt by the
Borrower of a Notice of Conversion, the Holder shall be deemed to be the holder
of record of the Common Stock issuable upon such conversion, the outstanding
principal amount and the amount of accrued and unpaid interest on this Debenture
shall be reduced to reflect such conversion, and, unless the Borrower defaults
on its obligations under this Article I, all rights with respect to the portion
of this Debenture being so converted shall forthwith terminate except the right
to receive the Common Stock or other securities, cash or other assets, as herein
provided, on such conversion. If the Holder shall have given a Notice of
Conversion as provided herein, the Borrower’s obligation to issue and deliver
the certificates for Common Stock shall be absolute and unconditional,
irrespective of the absence of any action by the Holder to enforce the same, any
waiver or consent with respect to any provision thereof, the recovery of any
judgment against any person or any action to enforce the same, any failure or
delay in the enforcement of any other obligation of the Borrower to the holder
of record, or any setoff, counterclaim, recoupment, limitation or termination,
or any breach or alleged breach by the Holder of any obligation to the Borrower,
and irrespective of any other circumstance which might otherwise limit such
obligation of the Borrower to the Holder in connection with such conversion. The
Conversion Date specified in the Notice of Conversion shall be the Conversion
Date so long as the Notice of Conversion is received by the Borrower on such
date.

 

(f)          Delivery of Common Stock by Electronic Transfer. In lieu of
delivering physical certificates representing the Common Stock issuable upon
conversion, provided the Borrower’s transfer agent is participating in the
Depository Trust Company (“DTC”) Fast Automated Securities Transfer (“FAST”)
program, upon request of the Holder and its compliance with the provisions
contained in Section 1.1 and in this Section 1.4, the Borrower shall use its
best efforts to cause its transfer agent to electronically transmit the Common
Stock issuable upon conversion to the Holder by crediting the account of
Holder’s Prime Broker with DTC through its Deposit Withdrawal Agent Commission
(“DWAC”) system, if applicable.

 

1.4         Concerning the Shares. The shares of Common Stock issuable upon
conversion of this Debenture may not be sold or transferred unless (i) such
shares are sold pursuant to an effective registration statement under the Act or
(ii) the Borrower or its transfer agent shall have been furnished with an
opinion of counsel (which opinion shall be in form, substance and scope
customary for opinions of counsel in comparable transactions) to the effect that
the shares to be sold or transferred may be sold or transferred pursuant to an
exemption from such registration or (iii) such shares are sold or transferred
pursuant to Rule 144 under the Act (or a successor rule) (“Rule 144”). Each
certificate for shares of Common Stock issuable upon conversion of this
Debenture shall bear a legend substantially in the following form, as
appropriate:

 

“THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED. THE SECURITIES MAY NOT BE SOLD,
TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
FOR THE SECURITIES UNDER SAID ACT, OR AN OPINION OF COUNSEL IN FORM, SUBSTANCE
AND SCOPE CUSTOMARY FOR OPINIONS OF COUNSEL IN COMPARABLE TRANSACTIONS, THAT
REGISTRATION IS NOT REQUIRED UNDER SAID ACT UNLESS SOLD PURSUANT TO RULE 144 OR
REGULATION S UNDER SAID ACT.”

 

The legend set forth above shall be removed and the Borrower shall issue to the
Holder a new certificate therefor free of any transfer legend if (i) the
Borrower or its transfer agent shall have received an opinion of counsel, in
form, substance and scope customary for opinions of counsel in comparable
transactions, to the effect that a public sale or transfer of such Common Stock
may be made without registration under the Act and the shares are so sold or
transferred, (ii) such Holder provides the Borrower or its transfer agent with
reasonable assurances that the Common Stock issuable upon conversion of this
Debenture (to the extent such securities are deemed to have been acquired on the
same date) can be sold pursuant to Rule 144 or (iii) in the case of the Common
Stock issuable upon conversion of this Debenture, such security is registered
for sale by the Holder under an effective registration statement filed under the
Act or otherwise may be sold pursuant to Rule 144 without any restriction as to
the number of securities as of a particular date that can then be immediately
sold.

 

4

 

 

1.5         Trading Market Limitations. If applicable as of the Conversion Date,
unless permitted by the applicable rules and regulations of the principal
securities market on which the Common Stock is then listed or traded, if at all,
in no event shall the Borrower issue upon conversion of or otherwise pursuant to
this Debenture more than the maximum number of shares of Common Stock that the
Borrower can issue pursuant to any rule of the principal United States
securities market on which the Common Stock is then traded (the “Maximum Share
Amount”), which shall be 19.99% of the total shares outstanding on the
Conversion Date, subject to equitable adjustment from time to time for stock
splits, stock dividends, combinations, capital reorganizations and similar
events relating to the Common Stock occurring after the date hereof. Once the
Maximum Share Amount has been issued (the date of which is hereinafter referred
to as the “Maximum Conversion Date”).

 

1.6         Status as Shareholder. Upon submission of a Notice of Conversion by
a Holder, (i) the shares covered thereby (other than the shares, if any, which
cannot be issued because their issuance would exceed such Holder’s allocated
portion of the Reserved Amount or Maximum Share Amount) shall be deemed
converted into shares of Common Stock and (ii) the Holder’s rights as a Holder
of such converted portion of this Debenture shall cease and terminate, excepting
only the right to receive certificates for such shares of Common Stock and to
any remedies provided herein or otherwise available at law or in equity to such
Holder because of a failure by the Borrower to comply with the terms of this
Debenture. Notwithstanding the foregoing, if a Holder has not received
certificates for all shares of Common Stock prior to the tenth (10th) day after
delivery of the Notice of Conversion with respect to a conversion of any portion
of this Debenture for any reason, then (unless the Holder otherwise elects to
retain its status as a holder of Common Stock by so notifying the Borrower) the
Holder shall regain the rights of a Holder of this Debenture with respect to
such unconverted portions of this Debenture and the Borrower shall, as soon as
practicable, return such unconverted Debenture to the Holder or, if the
Debenture has not been surrendered, adjust its records to reflect that such
portion of this Debenture has not been converted. In all cases, the Holder shall
retain all of its rights and remedies for the Borrower’s failure to convert this
Debenture.

 

Article II. EVENTS OF DEFAULT

 

If any of the following events of default (each, an “Event of Default”) shall
occur:

 

2.1         Failure to Pay Principal or Interest. The Borrower fails to pay the
principal hereof or interest thereon when due on this Debenture, whether at
maturity, upon acceleration or otherwise;

 

5

 

 

2.2         Conversion and the Shares. The Borrower fails to issue shares of
Common Stock to the Holder (or announces or threatens that it will not honor its
obligation to do so) upon exercise by the Holder of the conversion rights of the
Holder in accordance with the terms of this Debenture (for a period of at least
sixty (60) days, if such failure is solely as a result of the circumstances
governed by Section 1.3 and the Borrower is using its best efforts to authorize
a sufficient number of shares of Common Stock as soon as practicable), fails to
transfer or cause its transfer agent to transfer (electronically or in
certificated form) any certificate for shares of Common Stock issued to the
Holder upon conversion of or otherwise pursuant to this Debenture as and when
required by this Debenture, or fails to remove any restrictive legend (or to
withdraw any stop transfer instructions in respect thereof) on any certificate
for any shares of Common Stock issued to the Holder upon conversion of or
otherwise pursuant to this Debenture as and when required by this Debenture (or
makes any announcement, statement or threat that it does not intend to honor the
obligations described in this paragraph) and any such failure shall continue
uncured (or any announcement, statement or threat not to honor its obligations
shall not be rescinded in writing) for ten (10) days after the Borrower shall
have been notified thereof in writing by the Holder;

 

2.3         Breach of Representations and Warranties. Any representation or
warranty of the Borrower made herein or in any agreement, statement or
certificate given in writing pursuant hereto or in connection herewith, shall be
false or misleading in any material respect when made and the breach of which
has (or with the passage of time will have) a material adverse effect on the
rights of the Holder with respect to this Debenture;

 

2.4         Receiver or Trustee. The Borrower or any subsidiary of the Borrower
shall make an assignment for the benefit of creditors, or apply for or consent
to the appointment of a receiver or trustee for it or for a substantial part of
its property or business, or such a receiver or trustee shall otherwise be
appointed; or

 

2.5         Bankruptcy. Bankruptcy, insolvency, reorganization or liquidation
proceedings or other proceedings for relief under any bankruptcy law or any law
for the relief of debtors shall be instituted by or against the Borrower or any
subsidiary of the Borrower;

 

then, upon the occurrence and during the continuation of any such Event of
Default the Holder may, without further notice to the Borrower, declare the
principal amount of this Debenture at the time outstanding, together with
accrued unpaid interest thereon, and all other amounts payable under this
Debenture to be forthwith due and payable, whereupon such principal, interest
and all such amounts shall become and be forthwith due and payable.

 

Article III. MISCELLANEOUS

 

3.1         Guarantee and Collateral. Pimi Agro Cleantech Ltd., an Israeli
subsidiary of the Borrower (”Pimi Israel”), hereby guarantees due and punctual
payment and performance of this Debenture by the Borrower. Pimi Israel further
agrees that its guarantee hereunder constitutes a guarantee of payment when due
(whether at the stated maturity, by acceleration or otherwise), and waives any
right to require that the Holder proceed against the Borrower. Furthermore, Pimi
Israel’ guarantee herein shall be secured by a security interest and pledge in
Pimi Israel’ patents and/or patent applications, which security interest and
pledge was granted by Pimi Israel to the Holder, as memorialized and evidenced
by that certain deed of pledge dated May 2nd, 2013 (the "Deed of Pledge").

 

3.2         Failure or Indulgence Not Waiver. No failure or delay on the part of
the Holder in the exercise of any power, right or privilege hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise of any
such power, right or privilege preclude other or further exercise thereof or of
any other right, power or privileges. All rights and remedies existing hereunder
are cumulative to, and not exclusive of, any rights or remedies otherwise
available.

 

6

 

 

3.3         Notices. Any notice herein required or permitted to be given shall
be in writing and may be personally served or delivered by courier or sent by
United States mail and shall be deemed to have been given upon receipt if
personally served (which shall include telephone line facsimile transmission) or
sent by courier or three (3) days after being deposited in the United States
mail, certified, with postage pre-paid and properly addressed, if sent by mail.
For the purposes hereof, the address of the Holder shall be as shown on the
records of the Borrower; and the address of the Borrower shall be 269 South
Beverly Drive, Suite 1091, Beverly Hills, CA 90212. Both the Holder and the
Borrower may change the address for service by service of written notice to the
other as herein provided.

 

3.4         Amendments. This Debenture and any provision hereof may only be
amended by an instrument in writing signed by the Borrower and the Holder. The
term “Debenture” and all reference thereto, as used throughout this instrument,
shall mean this instrument as originally executed, or if later amended or
supplemented, then as so amended or supplemented.

 

3.5         Assignability. This Debenture shall be binding upon the Borrower and
its successors and assigns, and shall inure to be the benefit of the Holder and
its successors and assigns. Each transferee of this Debenture must be an
“accredited investor” (as defined in Rule 501(a) of the 1933 Act).

 

3.6         Cost of Collection. If default is made in the payment of this
Debenture, the Borrower shall pay the Holder hereof costs of collection,
including reasonable attorneys’ fees.

 

3.7         Governing Law. THIS NOTE SHALL BE ENFORCED, GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE, WITHOUT REGARD
TO THE PRINCIPLES OF CONFLICT OF LAWS. THE BORROWER HEREBY SUBMITS TO THE
EXCLUSIVE JURISDICTION OF THE UNITED STATES FEDERAL COURTS LOCATED IN NEW YORK,
NEW YORK WITH RESPECT TO ANY DISPUTE ARISING UNDER THIS NOTE, THE AGREEMENTS
ENTERED INTO IN CONNECTION HEREWITH OR THE TRANSACTIONS CONTEMPLATED HEREBY OR
THEREBY. BOTH PARTIES IRREVOCABLY WAIVE THE DEFENSE OF AN INCONVENIENT FORUM TO
THE MAINTENANCE OF SUCH SUIT OR PROCEEDING. BOTH PARTIES FURTHER AGREE THAT
SERVICE OF PROCESS UPON A PARTY MAILED BY FIRST CLASS MAIL SHALL BE DEEMED IN
EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON THE PARTY IN ANY SUCH SUIT OR
PROCEEDING. NOTHING HEREIN SHALL AFFECT EITHER PARTY’S RIGHT TO SERVE PROCESS IN
ANY OTHER MANNER PERMITTED BY LAW. BOTH PARTIES AGREE 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. THE PARTY WHICH DOES NOT PREVAIL IN ANY DISPUTE ARISING UNDER
THIS NOTE SHALL BE RESPONSIBLE FOR ALL FEES AND EXPENSES, INCLUDING ATTORNEYS’
FEES, INCURRED BY THE PREVAILING PARTY IN CONNECTION WITH SUCH DISPUTE.

 

7

 

 

3.8         Certain Amounts. Whenever pursuant to this Debenture the Borrower is
required to pay an amount in excess of the outstanding principal amount (or the
portion thereof required to be paid at that time) plus accrued and unpaid
interest on such interest, the Borrower and the Holder agree that the actual
damages to the Holder from the receipt of cash payment on this Debenture may be
difficult to determine and the amount to be so paid by the Borrower represents
stipulated damages and not a penalty and is intended to compensate the Holder in
part for loss of the opportunity to convert this Debenture and to earn a return
from the sale of shares of Common Stock acquired upon conversion of this
Debenture at a price in excess of the price paid for such shares pursuant to
this Debenture. The Borrower and the Holder hereby agree that such amount of
stipulated damages is not plainly disproportionate to the possible loss to the
Holder from the receipt of a cash payment without the opportunity to convert
this Debenture into shares of Common Stock.

 

3.9         Remedies. The Borrower acknowledges that a breach by it of its
obligations hereunder will cause irreparable harm to the Holder, by vitiating
the intent and purpose of the transaction contemplated hereby. Accordingly, the
Borrower acknowledges that the remedy at law for a breach of its obligations
under this Debenture will be inadequate and agrees, in the event of a breach or
threatened breach by the Borrower of the provisions of this Debenture, that the
Holder shall be entitled, in addition to all other available remedies at law or
in equity, and in addition to the penalties assessable herein, to an injunction
or injunctions restraining, preventing or curing any breach of this Debenture
and to enforce specifically the terms and provisions thereof, without the
necessity of showing economic loss and without any bond or other security being
required.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

IN WITNESS WHEREOF, Borrower has caused this Debenture to be signed in its name
by its duly authorized officer this 2nd day of May, 2013.

 

  PIMI AGRO CLEANTECH, INC.       By:     Name:   Title:

 

  Agreed and Acknowledged:       PIMI AGRO CLEANTECH LTD.       By:     Name:  
Title:

 

8

 

 

EXHIBIT A

 

NOTICE OF CONVERSION
(To be Executed by the Holder in order to Convert the Debenture)

 

The undersigned hereby irrevocably elects to convert $__________ principal
amount of the Debenture (as defined below) into shares of common stock, par
value $0.01 per share (“Common Stock”), of Pimi Agro Cleantech, Inc., a Delaware
corporation (the “Borrower”) according to the conditions of the Convertible
Debenture of the Borrower dated as of May __, 2013 (the “Debenture”), as of the
date written below. If securities 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. No fee will be
charged to the Holder for any conversion, except for transfer taxes, if any. A
copy of each Debenture is attached hereto (or evidence of loss, theft or
destruction thereof).

 

The Borrower shall electronically transmit the Common Stock issuable pursuant to
this Notice of Conversion to the account of the undersigned or its nominee with
DTC through its Deposit Withdrawal Agent Commission system (“DWAC Transfer”).

 

Name of DTC Prime Broker:
_______________________________________________________________

Account Number:
________________________________________________________________________

 

In lieu of receiving shares of Common Stock issuable pursuant to this Notice of
Conversion by way of a DWAC Transfer, the undersigned hereby requests that the
Borrower issue a certificate or certificates for the number of shares of Common
Stock set forth below (which numbers are based on the Holder’s calculation
attached hereto) in the name(s) specified immediately below or, if additional
space is necessary, on an attachment hereto:

 

Name:
_________________________________________________________________________________

Address:
_______________________________________________________________________________

 

The undersigned represents and warrants that all offers and sales by the
undersigned of the securities issuable to the undersigned upon conversion of the
Debenture shall be made pursuant to registration of the securities under the
Securities Act of 1933, as amended (the “Act”), or pursuant to an exemption from
registration under the Act.

 

Date of Conversion:___________________________

Applicable Conversion Price: $1.00

Number of Shares of Common Stock to be Issued Pursuant to

Conversion of the Debenture:______________

Signature:___________________________________

Name:______________________________________

Address:____________________________________

 

The Borrower shall issue and deliver shares of Common Stock to an overnight
courier not later than three business days following receipt of the original
Debenture(s) to be converted, and shall make payments pursuant to the Debenture
for the number of business days such issuance and delivery is late.

 

9