Document:

EX-4.13

 

EXHIBIT 4.13

Account No.                                         

ACCEPTANCE OF OFFER

     The undersigned hereby agrees to purchase, at par, $                                                           
 
in aggregate principal amount of the following securities (the “Securities”) of FNB Financial
Services, LP (the “Company”) offered pursuant to the Prospectus dated July 1, 2006 (as the same may
be amended, modified or supplemented, the “Prospectus”), receipt of which is hereby acknowledged:

							
	 

	 	Security:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Nonnegotiable Subordinated Term Note (“Term Note”), Nonnegotiable Subordinated Daily Note (“Daily Note”) or  Nonnegotiable
Subordinated Special Daily Note (“Special Daily Note”)	 	 

	 	 	 	 	 	 	 
	 

	 	Term:	 	 	 	 
	 

	 	 	 	 	 	 
	 	 	For Term Notes only; 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20,
21, 22, 23, 24, 27, 30, 36, 48, 60, 84 or 120	 	 

	 	 	 	 	 	 	 
	 

	 	Interest Rate:	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	 Fixed for Term Notes; Initial for Daily Note or Special Daily Note	 	 

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	Registration Code:
	 	 	 	 	 	Account Type:	 	 	 	 
	 

	 	 	 	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	IN; JT; UTMA; ITF; POD
	 	 	 	 	 	P; B; O	 	 

The name(s) and address in which the Securities being purchased by the undersigned are to be
registered are as follows (all persons so named must execute this Acceptance of Offer):

	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 
 
	 	 	 	 	 	 	 	 
	 	 	Soc. Sec. or E.I. No.	 	 
	 
 
	 	 	 	 	 	 	 	 
	 

	 	#	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	Telephone No.	 	 	 	 
	 

	 	 	 	 	 	 	 	 

EACH UNDERSIGNED HEREBY REPRESENTS AND WARRANTS THAT he/she has received a copy of the Prospectus.

EACH UNDERSIGNED HEREBY AGREES THAT ALL Securities purchased hereby, whether Term Notes, Daily
Notes or Special Daily Notes are subject to all the term and conditions including, without
limitation, subordination of the indebtedness evidenced thereby, as set forth in the Prospectus and
the Indenture dated as of August 16, 2005, among the Company, F.N.B. Corporation as Guarantor, and
J.P. Morgan Trust Company, National Association, as Trustee.

THIS SECURITY IS NOT A SAVINGS ACCOUNT OR AN OBLIGATION OF AN INSURED DEPOSITORY INSTITUTION
AND IS NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION (FDIC).

By executing this ACCEPTANCE OF OFFER, I (we), under penalty of perjury, certify that: (1) the
number shown on this form is my (our) correct taxpayer identification number (T.I.N.) and (2) I
(we) am (are) not subject to backup withholding either because of (a) I (we) am (are) exempt from
backup withholding, or (b) I (we) have not been notified by the Internal Revenue Service that I
(we) am (are) subject to backup withholding as a result of a failure to report all interest or
dividends, or (c) the IRS has notified me (us) that I (we) am (are) no longer subject to backup
withholding. (If you have been notified by the IRS that you are subject to backup withholding,
delete the language in (2) above.), and (3) I (we) am (are) a U.S. person (including a U.S.
resident alien).

	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	TERM NOTE INTEREST ELECTION (CHECK ONE)	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	1. MONTHLY CHECK
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	2. QUARTERLY CHECK
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	3. COMPOUND QUARTERLY
	 	 	 	 	 	(This Purchase Agreement must be executed by all persons whose

	 
	 	 	 	 	 	names are to appear on the Securities purchased hereby)
	 
	 	 	 	 	 	 	 	 	 	 
	4. MONTHLY DEPOSIT
TO DAILY NOTE
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Date:	 	 	 	 
	 

	 	 	 	 	 	 
	 	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	DAILY NOTE NUMBER	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	Opened By:IPIX Corporation 8-K 06/15/06 Exhibit 4.1

    

      Exhibit
        4.1

       

      Exhibit
        A

       

      NEITHER
        THESE SECURITIES NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLE
        HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE
        SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
        REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
        ACT”), 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 AND IN COMPLIANCE WITH APPLICABLE STATE
        SECURITIES LAWS OR BLUE SKY LAWS. NOTWITHSTANDING THE FOREGOING, THESE
        SECURITIES AND THE SECURITIES ISSUABLE UPON CONVERSION OF THESE SECURITIES
        MAY
        BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR
        FINANCING ARRANGEMENT SECURED BY SUCH SECURITIES.

       

      No.
        [               ]                                                                                            $[                ]

      Date:
        June 26, 2006

       

      IPIX
        CORPORATION

      SENIOR
        CONVERTIBLE NOTE DUE 

      June
        26, 2011

       

      THIS
        NOTE
        is one of a series of duly authorized and issued Notes of IPIX Corporation,
        a
        Delaware corporation (the “Company”),
        designated as its Senior Convertible Notes due June 26, 2011, in the aggregate
        principal amount of $5,000,000 (the “Notes”).

       

      FOR
        VALUE
        RECEIVED, the Company promises to pay to the order of [Holder] or its registered
        assigns (the “Holder”),
        the
        principal sum of [__________] $(__________) on June 26, 2011 (the “Maturity
        Date”),
        or
        such earlier date as the Notes are required or permitted to be repaid as
        provided hereunder, and to pay interest to the Holder on the aggregate
        unconverted and then outstanding principal amount of this Note in accordance
        with the provisions hereof. The principal amount of this Note may be increased
        as set forth in Section 2(d) below. Notwithstanding the foregoing, the Company
        hereby unconditionally promises to pay to the order of the Holder interest
        on
        any principal or interest payable hereunder that shall not be paid in full
        when
        due, whether at the time of any stated interest payment date or principal
        payment date or maturity or by prepayment, acceleration or declaration or
        otherwise, for the period from and including the due date of such payment
        to but
        excluding the date the same is paid in full, at a rate of 18% per annum (but
        in
        no event in excess of the maximum rate permitted under applicable law).

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      Interest
        payable under this Note shall be computed on the basis of a year of 360 days
        and
        actual days elapsed (including the first day but excluding the last day)
        occurring in the period for which interest is payable. 

       

      Payments
        of principal and interest shall be made in lawful money of the United States
        of
        America to the Holder at its address as provided in Section 12
        or by
        wire transfer to such account specified from time to time by the Holder hereof
        for such purpose as provided in Section 12.

       

      1.  Definitions.
        In
        addition to the terms defined elsewhere in this Note, (a) capitalized terms
        that are not otherwise defined herein have the meanings given to such terms
        in
        the Securities Purchase Agreement, dated as of June 23, 2006, among the Company
        and the Purchasers identified therein (the “Purchase
        Agreement”),
        and
        (b) the following terms have the meanings indicated:

       

      “Conversion
        Date”
means
        the date a Conversion Notice is delivered to the Company together with the
        Conversion Schedule pursuant to Section
        6(a).

       

      “Conversion
        Notice”
means
        a
        written notice in the form attached hereto as Schedule 1. 

       

      “Conversion
        Price”
means
        $.96, subject to adjustment from time to time pursuant to Section
        10.

       

      “Equity
        Conditions”
means,
        with respect to a specified issuance of Common Stock, that each of the following
        conditions is satisfied: (i) the number of authorized but unissued and otherwise
        unreserved shares of Common Stock is sufficient for such issuance; (ii) such
        shares of Common Stock are registered for resale by the Holder and may be
        sold
        by the Holder pursuant to an effective Registration Statement covering the
        Underlying Shares or all such shares may be sold without volume restrictions
        pursuant to Rule 144(k) under the Securities Act; (iii) the Common Stock
        is
        listed or quoted (and is not suspended from trading) on an Eligible Market
        and
        such shares of Common Stock are approved for listing upon issuance; (iv)
        such
        issuance would be permitted in full without violating Section
        6(b)
        hereof
        or the rules or regulations of any Trading Market; (v) no Bankruptcy Event
        has
        occurred; (vi) the Company is not in default with respect to any material
        obligation hereunder or under any other Transaction Document; and
        (vii) no
        public announcement of a pending or proposed Change of Control transaction
        has
        occurred that has not been consummated.

       

      “Event
        Equity Value”
        means
        115% of the arithmetic average of the VWAP for the five Trading Days preceding
        the date of delivery of the notice requiring payment of the Event Equity
        Value,
provided
        that if
        the Company does not make such required payment (together with any other
        payments, expenses and liquidated damages then due and payable under the
        Transaction Documents) when due or, in the event the Company disputes in
        good
        faith the occurrence of the Triggering Event pursuant to which such notice
        relates, does not instead deposit such required payment (together with such
        other payments, expenses and liquidated damages then due) in escrow with
        an
        independent third-party escrow agent within five Trading Days of the date
        such
        required payment is due, then the Event Equity Value shall be 115% of the
        greater of (a) the arithmetic average of the VWAP for the five Trading Days
        preceding the date of delivery of the notice requiring payment of the Event
        Equity Value and (b) the arithmetic average of the VWAP for the five Trading
        Days preceding the date on which such required payment (together with such
        other
        payments, expenses and liquidated damages) is paid in full.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      “Initial
        Interest Period”
means
        the period beginning on the Closing Date and ending on July 31, 2006.

       

      “Interest
        Period”
means
        a
        period of six months for the calculation of the interest on the Note, provided
        that any such period (i) shall start on the last day of the preceding period
        (other than the Initial Interest Period); (ii) which would otherwise end
        on a
        day which is not a Trading Day shall be extended to the next succeeding day
        which is a Trading Day and the following interest period shall then end on
        the
        day on which it would have ended if the preceding interest period had not
        been
        so extended; and (iii) which would otherwise overrun the Maturity Date shall
        be
        shortened to end on the Maturity Date. 

       

      “Interest
        Rate”
has
        the
        meaning set forth in Section 2(a) herein.

       

      “LIBOR”
means,
        in respect of a six-month Interest Period (i) the rate of interest per
        annum  (expressed with a maximum of 4 decimals) offered for deposits in the
        relevant currency and amount which appears on Telerate page 3750 or on any
        other
        relevant Telerate, Bloomberg or Reuter page as of 11:00 a.m. London time
        two (2)
        Business Days prior to the commencement of the relevant Interest Period;
        or
        (ii) should such quotation not be published on the relevant day and time
        such interest rate per annum according to such other widely published LIBOR
        quotation as the Company may select for the relevant Interest Period as of
        11:00
        a.m. London time two (2) Business Days prior to the commencement of the Interest
        Period.

       

      “Original
        Issue Date”
means
        the date of the first issuance of any Notes, regardless of the number of
        transfers of any particular Note.

       

      "Principal
        Payment Date"
        means
        any date on which payment of a principal amount of this Note shall be due
        and
        payable by the Company in accordance with Section 2(b).

       

      “Triggering
        Event”
means
        any of the following events: (a) the Common Stock is not listed or quoted,
        or is
        suspended from trading, on an Eligible Market for a period of five or more
        Trading Days (which need not be consecutive Trading Days); (b) the Company
        fails
        for any reason to deliver a certificate evidencing any Securities to a Purchaser
        within five Trading Days after delivery of such certificate is required pursuant
        to any Transaction Document or the exercise or conversion rights of the Holders
        pursuant to any Transaction Document are otherwise suspended for any reason;
        (c)
        the Company fails to have available a sufficient number of authorized but
        unissued and otherwise unreserved shares of Common Stock available to issue
        Underlying Shares upon any exercise of the Note; (d) at any time after the
        Closing Date, any Common Stock issuable pursuant to the Transaction Documents
        is
        not listed on an Eligible Market; (e) the Company effects or publicly announces
        its intention to effect any exchange, recapitalization or other transaction
        that
        effectively requires or rewards physical delivery of certificates evidencing
        the
        Common Stock; (f) the
        effectiveness of the Registration Statement lapses for any reason or the
        Holder
        shall not be permitted to resell any Underlying Shares under the Registration
        Statement, in either case, for five or more Trading Days (which need not
        be
        consecutive Trading Days), and in either case, the Holder is not eligible
        to
        resell any Underlying Shares without
        registration pursuant to subparagraph (k) of Rule 144;
        (g)
the
        Company fails to make any cash payment required under the Transaction Documents
        and such failure is not cured within five days after notice of such default
        is
        first given to the Company by a Purchaser; or (h) the Company breaches or
        defaults in the timely performance of any other obligation under the Transaction
        Documents and such breach or default continues uncured for a period of 20
        days
        after the date on which notice of such breach or default is first given to
        the
        Company by a Purchaser (it being understood that no prior notice need be
        given
        in the case of a breach or default that cannot reasonably be cured within
        20
        days).

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      2.  Principal
        and Interest.

       

      (a)
          The
        Company shall pay interest to the Holder on the aggregate unconverted and
        then
        outstanding principal amount of this Note for each Interest Period at a rate
        (the "Interest
        Rate")
        which
        is the greater of (i) 7% per annum or (ii) LIBOR plus 200 basis points per
        annum; provided at no time shall the Interest Rate exceed 10% per annum.
        Each
        Interest Period, other than the Initial Interest Period shall begin on January
        31 and July 31 of each year occurring prior to the Maturity Date. Interest
        shall
        be payable quarterly in arrears on each January 31, April 30, July 31, October
        31, except if such date is not a Trading Day, in which case such interest
        shall
        be payable on the next succeeding Trading Day (each, an “Interest
        Payment Date”).
        The
        first Interest Payment Date shall be July 31, 2006. 

       

      (b)
          Beginning
        on the first Trading Day on the four month anniversary of the Original Issue
        Date and on the first Trading Day for each of the next 26 months thereafter
        (each, a “Principal
        Payment Date”),
        the
        Company shall pay 2.778% of the original principal amount of this Note to
        the
        Holder (each, a “Monthly
        Installment”).
        

       

      (c)
          Subject
        to the conditions and limitations set forth below, the Company may pay interest
        or principal on this Note in (i) cash or (ii) shares of Common Stock. The
        Company must deliver written notice to the Holder indicating the manner in
        which
        it intends to pay interest and principal at least 20 Trading Days prior to
        each
        Interest Payment Date or Principal Payment Date, as applicable, but the Company
        may indicate in any such notice that the election contained therein shall
        continue for subsequent Interest Payment Dates or Principal Payment Dates
        until
        revised. Failure to timely provide such written notice shall be deemed an
        election by the Company to pay the amount of any interest or principal in
        cash.

       

      (d)
          Notwithstanding
        the foregoing, the Company may not pay interest or principal by issuing shares
        of Common Stock unless all of the Equity Conditions are then satisfied with
        respect to all shares of Common Stock then issuable upon conversion of all
        outstanding Notes. If the Company is required to pay interest in cash on
        any
        Interest Payment Date but fails to do so, the Holder may (but shall not be
        required to) treat such interest as if it had been added to the principal
        amount
        of this Note as of such Interest Payment Date or accept any number of shares
        of
        Common Stock in lieu of such interest payment.

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      (e)
          In
        the
        event that the Company elects to pay interest or principal on any Interest
        Payment Date or Principal Payment Date, as applicable, in shares of Common
        Stock, the number of shares of Common Stock to be issued to each Holder as
        such
        interest or principal shall be (i) with respect to interest, determined by
        dividing the aggregate amount of interest then payable to such Holder by
        the
        Market Price (as defined below) as of the applicable Interest Payment Date,
        and
        rounding up to the nearest whole share, (ii) with respect to principal,
        determined by dividing the total principal then payable to such Holder by
        the
        lower of (y) the Conversion Price (as adjusted in accordance herewith) and
        (z)
        the Market Price as of the applicable Principal Payment Date, and rounding
        up to
        the nearest whole share, and (iii) paid to such Holder in accordance with
        Section 2(f) below. The term “Market
        Price”
shall
        mean 90% of the arithmetic average of the VWAP for the 20 Trading Days prior
        to
        the applicable Interest Payment Date or Principal Payment Date, as the case
        may
        be (not including such date).

       

      (f)
          In
        the
        event that any interest or principal is paid in Common Stock, the Company
        shall
        on such Interest Payment Date or Principal Payment Date (i) issue and deliver
        to
        such Holder a certificate, free of restrictive legends, registered in the
        name
        of the Holder or its designee, for the number of shares of Common Stock to
        which
        the Holder shall be entitled, or (ii) at all times after the Holder has notified
        the Company that this clause (ii) shall apply, credit the number of shares
        of
        Common Stock to which the Holder shall be entitled to the Holder’s or its
        designee’s balance account with The Depository Trust Company through its Deposit
        Withdrawal Agent Commission System.

       

      (g)
          The
        Notes
        may not be prepaid in whole or part absent written consent from the Holder.
        

       

      3.  Ranking
        and Covenants.
        

       

      (a)
          Except
        as
        set forth in Schedule
        3.1(dd)
        or as
        otherwise permitted in Section 4.10(a) of the Purchase Agreement (the
“Existing
        Indebtedness”),
        no
        indebtedness of the Company is senior to, or pari passu with, this Note in
        right
        of payment, whether with respect to interest, damages or upon liquidation
        or
        dissolution or otherwise. Other than the Existing Indebtedness and any renewal,
        refinancing or replacement thereof that does not exceed the aggregate amount
        of
        the Existing Indebtedness and the borrowing availability under the related
        credit or loan agreements on the date hereof, the Company will not, and will
        not
        permit any Subsidiary to, directly or indirectly, enter into, create, incur,
        assume or suffer to exist any indebtedness of any kind, that is senior or
        pari
        passu in any respect to the Company’s obligations under the Notes, other than
        indebtedness secured by purchase money security interests (which will be
        senior
        only as to the underlying assets covered thereby) and indebtedness under
        capital
        lease obligations (which will be senior only as to the assets covered thereby);
        and the Company will not, and will not permit any subsidiary to, directly
        or
        indirectly, incur any Lien on or with respect to any of its property or assets
        now owned or hereafter acquired or any interest therein or any income or
        profits
        therefrom.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      (b)
          So
        long
        as any Notes are outstanding, neither the Company nor any Subsidiary shall,
        directly or indirectly, (i) redeem, purchase or otherwise acquire any capital
        stock or set aside any monies for such a redemption, purchase or other
        acquisition or (ii) issue any Floating Price Security (as defined in Section
        10(d)(ii)). 

       

      (c)
          The
        Company covenants that it will at all times reserve and keep available out
        of
        its authorized but unissued and otherwise unreserved Common Stock, solely
        for
        the purpose of enabling it to issue Underlying Shares as required hereunder,
        the
        number of Underlying Shares which are then issuable and deliverable upon
        the
        conversion of (and otherwise in respect of) this entire Note (taking into
        account the adjustments set forth in Section
        10
        and
        disregarding any limitations set forth in Section
        6(b)),
        free
        from preemptive rights or any other contingent purchase rights of Persons
        other
        than the Holder. The Company covenants that all Underlying Shares so issuable
        and deliverable shall, upon issuance in accordance with the terms hereof,
        be
        duly and validly authorized and issued and fully paid and
        nonassessable.

       

      4.  Registration
        of Notes.
        The
        Company shall register the Notes upon records to be maintained by the Company
        for that purpose (the “Note
        Register”)
        in the
        name of each record holder thereof from time to time. The Company may deem
        and
        treat the registered Holder of this Note as the absolute owner hereof for
        the
        purpose of any conversion hereof or any payment of interest or principal
        hereon,
        and for all other purposes, absent actual notice to the contrary.

       

      5.  Registration
        of Transfers and Exchanges.
        The
        Company shall register the transfer of any portion of this Note in the Note
        Register upon surrender of this Note to the Company at its address for notice
        set forth herein. Upon any such registration or transfer, a new Note, in
        substantially the form of this Note (any such new Note, a “New
        Note”),
        evidencing the portion of this Note so transferred shall be issued to the
        transferee and a New Note evidencing the remaining portion of this Note not
        so
        transferred, if any, shall be issued to the transferring Holder. The acceptance
        of the New Note by the transferee thereof shall be deemed the acceptance
        by such
        transferee of all of the rights and obligations of a holder of a Note. This
        Note
        is exchangeable for an equal aggregate principal amount of Notes of different
        authorized denominations, as requested by the Holder surrendering the same.
        No
        service charge or other fee will be imposed in connection with any such
        registration of transfer or exchange.

       

      6.  Conversion.

       

      (a)
          At
        the
        Option of the Holder.
        All or
        any portion of this Note shall be convertible into shares of Common Stock
        (subject to the limitations set forth in Section
        6(b)),
        at the
        option of the Holder, at any time and from time to time from and after the
        Original Issue Date. The
        number of Underlying Shares issuable upon any conversion hereunder shall
        equal
        the outstanding principal amount of this Note to be converted, plus the amount
        of any accrued but unpaid interest on this Note through the Conversion Date,
        divided by the Conversion Price on the Conversion Date. The
        Holder shall effect conversions under this Section
        6(a)
        by
        delivering to the Company a Conversion Notice together with a schedule in
        the
        form of Schedule
        2
        attached
        hereto (the “Conversion
        Schedule”).
        If
        the Holder is converting less than all of the principal amount of this Note,
        or
        if a conversion hereunder may not be effected in full due to the application
        of
Section
        6(b),
        the
        Company shall honor such conversion to the extent permissible hereunder and
        shall promptly deliver to the Holder a Conversion Schedule indicating the
        principal amount (and accrued interest) which has not been
        converted.

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      (b)
          Certain
        Conversion Restrictions.
        

       

      (i)
        Subject to Section 6(b)(ii), the number of shares of Common Stock that may
        be acquired by a Holder upon any conversion of Notes (or otherwise in respect
        hereof) shall be limited to the extent necessary to insure that, following
        such
        conversion (or other issuance), the total number of shares of Common Stock
        then
        beneficially owned by such Holder and its Affiliates and any other Persons
        whose
        beneficial ownership of Common Stock would be aggregated with such Holder’s for
        purposes of Section 13(d) of the Exchange Act, does not exceed 4.999% (the
        “Threshold
        Percentage”)
        or
        9.999% (the “Maximum
        Percentage”)
        of the
        total number of issued and outstanding shares of Common Stock (including
        for
        such purpose the shares of Common Stock issuable upon such conversion). For
        such
        purposes, beneficial ownership shall be determined in accordance with Section
        13(d) of the Exchange Act and the rules and regulations promulgated thereunder.
        Each delivery of a Conversion Notice hereunder will constitute a representation
        by the applicable Holder that it has evaluated the limitations set forth
        in this
Section 6(b)(i)
        and has
        determined that issuance of the full number of Underlying Shares issuable
        in
        respect of such Conversion Notice does not violate the restrictions contained
        in
        this Section
        6(b)(i).

       

      (ii)
        Notwithstanding the provisions of Section 6(b)(i), by written notice to the
        Company, the Holder shall have the right (x) at any time and from time to
        time
        to reduce its Maximum Percentage immediately upon notice to the Company in
        the
        event and only to the extent that Section 16 of the Exchange Act or the rules
        promulgated thereunder (or any successor statute or rules) is changed to
        reduce
        the beneficial ownership percentage threshold thereunder to a percentage
        less
        than 9.999% and (y) at any time and from time to time, to waive the provisions
        of this Section insofar as they relate to the Threshold Percentage or to
        increase its Threshold Percentage (but not in excess of the Maximum Percentage)
        unless the Holder shall have, by written instrument delivered to the Company,
        irrevocably waived its rights to so increase its Threshold Percentage, but
        (i)
        any such waiver or increase will not be effective until the 61st day after
        such
        notice is delivered to the Company, and (ii) any such waiver or increase
        or
        decrease will apply only to the Holder and not to any other holder of Notes.
        

       

      (iii)
        Notwithstanding
        anything to the contrary contained herein, the maximum number of shares of
        Common Stock that the Company may issue pursuant to the Transaction Documents
        at
        an effective price less than the Closing Price on the Trading Day immediately
        preceding the Closing Date equals 19.99% of the outstanding shares of Common
        Stock immediately preceding the Closing Date (the “Issuable
        Maximum”),
        unless the Company obtains Shareholder Approval (as defined below). Each
        Holder
        shall be entitled to a portion of the Issuable Maximum equal to the quotient
        obtained by dividing: (x) the principal amount of Notes issued and sold to
        such
        Holder on the Original Issue Date by (y) the aggregate principal amount of
        Notes
        issued and sold by the Company on the Original Issue Date. If any Holder
        shall
        no longer hold Notes, then such Holder's remaining portion of the Issuable
        Maximum shall be allocated pro-rata among the remaining Holders. If on any
        Conversion Date: (A) the aggregate number of shares of Common Stock that
        would
        then be issuable upon conversion in full of all then outstanding principal
        amount of Notes would exceed the Issuable Maximum, and (B) the Company shall
        not
        have previously obtained the vote of shareholders, as may be required by
        the
        applicable rules and regulations of the NASDAQ Stock Market applicable to
        approve the issuance of shares of Common Stock in excess of the Issuable
        Maximum
        pursuant to the terms hereof (the "Shareholder
        Approval"),
        then,
        the Company shall issue to the converting Holder a number of shares of Common
        Stock equal to such Holder's pro-rata portion (which shall be calculated
        pursuant to the terms hereof) of the Issuable Maximum and, with respect to
        the
        remainder of the principal amount of Notes then held by such Holder for which
        a
        conversion would result in an issuance of shares of Common Stock in excess
        of
        such Holder's pro-rata portion (which shall be calculated pursuant to the
        terms
        hereof) of the Issuable Maximum (the "Excess
        Principal Amount"),
        the
        applicable Holder shall have the right to require the Company to either:
        (1) obtain the Shareholder Approval applicable to such issuance as soon as
        is possible, but in any event not later than the 90th day after such request,
        or
        (2) pay cash, in an amount equal to the Excess Principal Amount (and accrued
        and
        unpaid interest thereon). If a Holder shall have elected the first option
        pursuant to the immediately preceding sentence and the Company shall have
        failed
        to obtain the Shareholder Approval on or prior to the 90th day after such
        request, then within three (3) days of such 90th day, the Company shall pay
        cash
        to such Holder an amount equal to Excess Principal Amount (and accrued and
        unpaid interest thereon). Notwithstanding anything herein to the contrary,
        if on
        any date other than a Conversion Date: (A) the aggregate number of shares
        of
        Common Stock that would then be issuable upon conversion in full of all then
        outstanding principal amount of Notes would exceed the Issuable Maximum,
        and (B)
        the Company shall not have previously obtained the Shareholder Approval,
        then,
        the Holder shall be entitled to require the Company to pay to it in cash
        an
        amount equal to the principal amount of Notes (and accrued and unpaid interest
        thereon) then held by such Holder for which a potential conversion on such
        date
        would result in an issuance of shares of Common Stock in excess of such Holder's
        pro-rata portion (which shall be calculated pursuant to the terms hereof)
        of the
        Issuable Maximum. The outstanding principal amount of Notes shall be reduced
        by
        the Excess Principal Amount upon the Holder’s receipt of the Excess Principal
        Amount pursuant to the terms hereof. The Company and the Holder understand
        and
        agree that shares of Common Stock issued to and then held by the Holder as
        a
        result of conversions of Notes shall not be entitled to cast votes on any
        resolution to obtain Shareholder Approval pursuant hereto.

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      7.  Mechanics
        of Conversion.

       

      (a)
          Upon
        conversion of this Note, the Company shall promptly (but in no event later
        than
        three Trading Days after the Conversion Date) issue or cause to be issued
        and
        cause to be delivered to or upon the written order of the Holder and in such
        name or names as the Holder may designate a certificate for the Underlying
        Shares issuable upon such conversion, free of restrictive legends unless
        a
        registration statement covering the resale of the Underlying Shares and naming
        the Holder as a selling stockholder thereunder is not then effective and
        such
        Underlying Shares are not then freely transferable without volume restrictions
        pursuant to Rule 144 under the Securities Act. The Holder, or any Person
        so
        designated by the Holder to receive Underlying Shares, shall be deemed to
        have
        become holder of record of such Underlying Shares as of the Conversion Date.
        The
        Company shall, upon request of the Holder, use its best efforts to deliver
        Underlying Shares hereunder electronically through the Depository Trust
        Corporation or another established clearing corporation performing similar
        functions. 

       

      (b)
          The
        Holder shall not be required to deliver the original Note in order to effect
        a
        conversion hereunder. Execution and delivery of the Conversion Notice shall
        have
        the same effect as cancellation of the original Note and issuance of a New
        Note
        representing the remaining outstanding principal amount. Upon surrender of
        this
        Note following one or more partial conversions, the Company shall promptly
        deliver to the Holder a New Note representing the remaining outstanding
        principal amount.

       

       

       

       

       

       

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      (c)
          The
        Company’s obligations to issue and deliver Underlying Shares upon conversion of
        this Note in accordance with the terms hereof are absolute and unconditional,
        irrespective of any action or inaction by the Holder to enforce the same,
        any
        waiver or consent with respect to any provision hereof, the recovery of any
        judgment against any Person or any action to enforce the same, or any set-off,
        counterclaim, recoupment, limitation or termination, or any breach or alleged
        breach by the Holder or any other Person of any obligation to the Company
        or any
        violation or alleged violation of law by the Holder or any other Person,
        and
        irrespective of any other circumstance which might otherwise limit such
        obligation of the Company to the Holder in connection with the issuance of
        such
        Underlying Shares.

       

      (d)
          If
        by the
        third Trading Day after a Conversion Date the Company fails to deliver to
        the
        Holder such Underlying Shares in such amounts and in the manner required
        pursuant to Section
        7(a),
        then
        the Holder will have the right to rescind such conversion.

       

      (e)
          If
        by the
        third Trading Day after a Conversion Date the Company fails to deliver to
        the
        Holder such Underlying Shares in such amounts and in the manner required
        pursuant to Section
        7(a),
        and if
        after such third Trading Day the Holder purchases (in an open market transaction
        or otherwise) shares of Common Stock to deliver in satisfaction of a sale
        by
        such Holder of the Underlying Shares which the Holder anticipated receiving
        upon
        such conversion (a “Buy-In”),
        then
        the Company shall either
        (i) pay cash to such Purchaser in an amount equal to such Purchaser's total
        purchase price (including brokerage commissions, if any) for the shares of
        Common Stock so purchased (the “Buy-In
        Price”),
        at
        which point the Company's obligation to deliver such certificate (and to
        issue
        such Common Stock) shall terminate, or (ii) promptly honor its obligation
        to
        deliver to such Purchaser a certificate or certificates representing such
        Common
        Stock and pay cash to such Purchaser in an amount equal to the excess (if
        any)
        of the Buy-In Price over the product of (A) such number of shares of Common
        Stock, times (B) the VWAP on the date of the event giving rise to the Company's
        obligation to deliver such certificate. 

       

      8.  Events
        of Default.

       

      (a)
          “Event
        of Default”
means
        any one of the following events (whatever the reason and whether it shall
        be
        voluntary or involuntary or effected by operation of law or pursuant to any
        judgment, decree or order of any court, or any order, rule or regulation
        of any
        administrative or governmental body):

       

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      (i)  any
        default in the payment (free of any claim of subordination) of principal,
        interest or liquidated damages in respect of any Notes, as and when the same
        becomes due and payable (whether on a date specified for the payment of interest
        or the date on which the obligations under the Note mature or by acceleration,
        redemption, prepayment or otherwise);

       

      (ii)  the
        Company or any Subsidiary defaults in any of its obligations under any other
        note or any mortgage, credit agreement or other facility, indenture agreement,
        factoring agreement or other instrument under which there may be issued,
        or by
        which there may be secured or evidenced, any indebtedness for borrowed money
        or
        money due under any long term leasing or factoring arrangement of the Company
        or
        any Subsidiary in an amount exceeding $1,000,000, whether such indebtedness
        now
        exists or is hereafter created, and such default results in such indebtedness
        becoming or being declared due and payable prior to the date on which it
        would
        otherwise become due and payable;

       

      (iii)  the
        occurrence of a Triggering Event; or

       

      (iv)  the
        occurrence of a Bankruptcy Event.

       

      (b)
          At
        any
        time or times following the occurrence of an Event of Default, the Holder
        shall
        have the option to elect, by notice to the Company (an “Event
        Notice”),
        to
        require the Company to repurchase all or any portion of (i) the outstanding
        principal amount of this Note, at a repurchase price equal to the greater
        of (A)
        115% of such outstanding principal amount, plus all accrued but unpaid interest
        thereon through the date of payment, or (B) the Event Equity Value of the
        Underlying Shares issuable upon conversion of such principal amount and all
        such
        accrued but unpaid interest thereon, and (ii) any Underlying Shares issued
        to
        such Holder upon conversion of Notes and then owned by the Holder, at a price
        per share equal to the Event Equity Value of such issuable and issued Underlying
        Shares. The aggregate amount payable pursuant to the preceding sentence is
        referred to as the “Event
        Price.”
The
        Company shall pay the Event Price to the Holder no later than the third Trading
        Day following the date of delivery of the Event Notice, and upon receipt
        thereof
        the Holder shall deliver this Note and certificates evidencing any Underlying
        Shares so repurchased to the Company (to the extent such certificates have
        been
        delivered to the Holder). 

       

      (c)
          Upon
        the
        occurrence of any Bankruptcy Event, all amounts pursuant to Section
        10(b)
        shall
        immediately become due and payable in full in cash, without any further action
        by the Holder.

       

      (d)
          In
        connection with any Event of Default, the Holder need not provide and the
        Company hereby waives any presentment, demand, protest or other notice of
        any
        kind, and the Holder may immediately and without expiration of any grace
        period
        enforce any and all of its rights and remedies hereunder and all other remedies
        available to it under applicable law. Any such declaration may be rescinded
        and
        annulled by the Holder at any time prior to payment hereunder. No such
        rescission or annulment shall affect any subsequent Event of Default or impair
        any right consequent thereto.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      9.  Charges,
        Taxes and Expenses.
        Issuance of certificates for Underlying Shares upon conversion of (or otherwise
        in respect of) this Note shall be made without charge to the Holder for any
        issue or transfer tax, withholding tax, transfer agent fee or other incidental
        tax or expense in respect of the issuance of such certificate, all of which
        taxes and expenses shall be paid by the Company; provided,
        however,
        that
        the Company shall not be required to pay any tax which may be payable in
        respect
        of any transfer involved in the registration of any certificates for Underlying
        Shares or Notes in a name other than that of the Holder. The Holder shall
        be
        responsible for all other tax liability that may arise as a result of holding
        or
        transferring this Note or receiving Underlying Shares in respect
        hereof.

       

      10.  Certain
        Adjustments.
        The
        Conversion Price is subject to adjustment from time to time as set forth
        in this
Section
        10.

       

      (a)
          Stock
        Dividends and Splits.
        If the
        Company, at any time while this Note is outstanding, (i) pays a stock dividend
        on its Common Stock or otherwise makes a distribution on any class of capital
        stock that is payable in shares of Common Stock, (ii) subdivides outstanding
        shares of Common Stock into a larger number of shares, or (iii) combines
        outstanding shares of Common Stock into a smaller number of shares, then
        in each
        such case the Conversion Price shall be multiplied by a fraction of which
        the
        numerator shall be the number of shares of Common Stock outstanding immediately
        before such event and of which the denominator shall be the number of shares
        of
        Common Stock outstanding immediately after such event. Any adjustment made
        pursuant to clause (i) of this Section
        10(a)
        shall
        become effective immediately after the record date for the determination
        of
        stockholders entitled to receive such dividend or distribution, and any
        adjustment pursuant to clause (ii) or (iii) of this Section
        10(a)
        shall
        become effective immediately after the effective date of such subdivision
        or
        combination. 

       

      (b)
          Pro
        Rata Distributions.
        If the
        Company, at any time while this Note is outstanding, distributes to holders
        of
        Common Stock (i) evidences of its indebtedness, (ii) any security (other
        than a
        distribution of Common Stock covered by the preceding paragraph),
        (iii) rights or warrants to subscribe for or purchase any security, or (iv)
        any other asset (in each case, “Distributed
        Property”),
        then
        in each such case the Conversion Price in effect immediately prior to the
        record
        date fixed for determination of stockholders entitled to receive such
        distribution shall be adjusted (effective on such record date) to equal the
        product of such Conversion Price times a fraction of which the denominator
        shall
        be the arithmetic average of the VWAP for the five Trading Days immediately
        prior to (but not including) such record date and of which the numerator
        shall
        be such average less the then fair market value of the Distributed Property
        distributed in respect of one outstanding share of Common Stock, as determined
        by the Company's independent certified public accountants that regularly
        examine
        the financial statements of the Company, (an “Appraiser”).
        In
        such event, the Holder, after receipt of the determination by the Appraiser,
        shall have the right to select an additional appraiser (which shall be a
        nationally recognized accounting firm), in which case such fair market value
        shall be deemed to equal the average of the values determined by each of
        the
        Appraiser and such appraiser. As an alternative to the foregoing adjustment
        to
        the Conversion Price, at the request of the Holder delivered before the 90th
        day
        after such record date, the Company will deliver to such Holder, within five
        Trading Days after such request (or, if later, on the effective date of such
        distribution), the Distributed Property that such Holder would have been
        entitled to receive in respect of the Underlying Shares for which this Note
        could have been exercised immediately prior to such record date. If such
        Distributed Property is not delivered to a Holder pursuant to the preceding
        sentence, then upon conversion of this Note that occurs after such record
        date,
        such Holder shall remain entitled to receive, in addition to the Underlying
        Shares otherwise issuable upon such conversion (if applicable), such Distributed
        Property.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      (c)
          Fundamental
        Changes.
        If, at
        any time while this Note is outstanding, (i) the Company effects any merger
        or
        consolidation of the Company with or into another Person, (ii) the Company
        effects any sale of all or substantially all of its assets in one or more
        transactions, (iii) any tender offer or exchange offer (whether by the Company
        or another Person) is completed pursuant to which holders of Common Stock
        are
        permitted to tender or exchange their shares for other securities, cash or
        property, or (iv) the Company effects any reclassification of the Common
        Stock
        or any compulsory share exchange pursuant to which the Common Stock is
        effectively converted into or exchanged for other securities, cash or property
        (other than as a result of a subdivision or combination of shares of Common
        Stock described in Section
        10(a))
        (in any
        such case, a “Fundamental
        Change”),
        then
        upon any subsequent conversion of this Note, the Holder shall have the right
        to
        receive, for each Underlying Share that would have been issuable upon such
        conversion absent such Fundamental Change, the same kind and amount of
        securities, cash or property as it would have been entitled to receive upon
        the
        occurrence of such Fundamental Change if it had been, immediately prior to
        such
        Fundamental Change, the holder of one share of Common Stock (the “Alternate
        Consideration”).
        If
        holders of Common Stock are given any choice as to the securities, cash or
        property to be received in a Fundamental Change, then the Holder shall be
        given
        the same choice as to the Alternate Consideration it receives upon any
        conversion of this Note following such Fundamental Change. In the event of
        a
        Fundamental Change, the Company or the successor or purchasing Person, as
        the
        case may be, shall execute with the Holder a written agreement providing
        that:

       

      (x)
         this
        Note
        shall thereafter entitle the Holder to purchase the Alternate
        Consideration,

      

      (y) in
        the
        case of any such successor or purchasing Person, upon such consolidation,
        merger, statutory exchange, combination, sale or conveyance such successor
        or
        purchasing Person shall be jointly and severally liable with the Company
        for the
        performance of all of the Company's obligations under this Warrant and the
        Purchase Agreement, and 

      

      (z) if
        registration or qualification is required under the Exchange Act or applicable
        state law for the public resale by the Holder of shares of stock and other
        securities so issuable upon exercise of this Warrant, such registration or
        qualification shall be completed prior to such reclassification, change,
        consolidation, merger, statutory exchange, combination or sale. 

      

      If,
        in
        the case of any Fundamental Change, the Alternate Consideration includes
        shares
        of stock, other securities, other property or assets of a Person other than
        the
        Company or any such successor or purchasing Person, as the case may be, in
        such
        Fundamental Change, then such written agreement shall also be executed by
        such
        other Person and shall contain such additional provisions to protect the
        interests of the Holder as the Board of Directors of the Company shall
        reasonably consider necessary by reason of the foregoing. At the Holder’s
        request, any successor to the Company or surviving Person in such Fundamental
        Change shall issue to the Holder a new Note consistent with the foregoing
        provisions and evidencing the Holder’s right to convert such Note into Alternate
        Consideration. The terms of any agreement pursuant to which a Fundamental
        Change
        is effected shall include terms requiring any such successor or surviving
        Person
        to comply with the provisions of this Section
        10(c)
        and
        insuring that this Note (or any such replacement security) will be similarly
        adjusted upon any subsequent transaction analogous to a Fundamental Change.
        If
        any Fundamental Change constitutes or results in a Change of Control, then
        at
        the request of the Holder delivered before the 90th day after such Fundamental
        Change, the Company (or any such successor or surviving entity) will purchase
        this Note from the Holder for a purchase price, payable in cash within five
        Trading Days after such request (or, if later, on the effective date of the
        Fundamental Transaction), equal to the Black Scholes value of the remaining
        unexercised portion of this Note on the date of such request. 

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      (d)
          Subsequent
        Equity Sales.

       

      (i)  If,
        at
        any time while this Note is outstanding, the Company or any Subsidiary issues
        additional shares of Common Stock or rights, warrants, options or other
        securities or debt convertible, exercisable or exchangeable for shares of
        Common
        Stock or otherwise entitling any Person to acquire shares of Common Stock
        (collectively, “Common
        Stock Equivalents”)
        at an
        effective net price to the Company per share of Common Stock (the “Effective
        Price”)
        less
        than the Conversion Price (as adjusted hereunder to such date), then the
        Conversion Price shall be reduced to equal the Effective Price. For purposes
        of
        this paragraph, in connection with any issuance of any Common Stock Equivalents,
        (A) the maximum number of shares of Common Stock potentially issuable at
        any
        time upon conversion, exercise or exchange of such Common Stock Equivalents
        (the
“Deemed
        Number”)
        shall
        be deemed to be outstanding upon issuance of such Common Stock Equivalents,
        (B)
        the Effective Price applicable to such Common Stock shall equal the minimum
        dollar value of consideration payable to the Company to purchase such Common
        Stock Equivalents and to convert, exercise or exchange them into Common Stock
        (net of any discounts, fees, commissions and other expenses), divided by
        the
        Deemed Number, and (C) no further adjustment shall be made to the Conversion
        Price upon the actual issuance of Common Stock upon conversion, exercise
        or
        exchange of such Common Stock Equivalents.

       

      (ii)  If,
        at
        any time while this Note is outstanding, the Company or any Subsidiary issues
        Common Stock Equivalents with an Effective Price or a number of underlying
        shares that floats or resets or otherwise varies or is subject to adjustment
        based (directly or indirectly) on market prices of the Common Stock (a
“Floating
        Price Security”),
        then
        for purposes of applying the preceding paragraph in connection with any
        subsequent conversion, the Effective Price will be determined separately
        on each
        Conversion Date and will be deemed to equal the lowest Effective Price at
        which
        any holder of such Floating Price Security is entitled to acquire Common
        Stock
        on such Conversion Date (regardless of whether any such holder actually acquires
        any shares on such date).

       

      (iii)  Notwithstanding
        the foregoing, no adjustment will be made under this paragraph (d) in respect
        of
        Excluded Stock.

       

       

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      (e)
          Calculations.
        All
        calculations under this Section
        10
        shall be
        made to the nearest cent or the nearest 1/100th of a share, as applicable.
        The
        number of shares of Common Stock outstanding at any given time shall not
        include
        shares owned or held by or for the account of the Company, and the disposition
        of any such shares shall be considered an issue or sale of Common
        Stock.

       

      (f)
          Notice
        of Adjustments.
        Upon
        the occurrence of each adjustment pursuant to this Section
        10,
        the
        Company at its expense will promptly compute such adjustment in accordance
        with
        the terms hereof and prepare and deliver to the Holder a certificate describing
        in reasonable detail such adjustment and the transactions giving rise thereto,
        including all facts upon which such adjustment is based.

       

      (g)
          Notice
        of Corporate Events.
        If the
        Company (i) declares a dividend or any other distribution of cash, securities
        or
        other property in respect of its Common Stock, including without limitation
        any
        granting of rights or warrants to subscribe for or purchase any capital stock
        of
        the Company or any Subsidiary, (ii) authorizes or approves, enters into any
        agreement contemplating or solicits stockholder approval for any Fundamental
        Change or (iii) authorizes the voluntary dissolution, liquidation or winding
        up
        of the affairs of the Company, then the Company shall deliver to the Holder
        a
        notice describing the material terms and conditions of such transaction,
        at
        least 20 Trading Days prior to the applicable record or effective date on
        which
        a Person would need to hold Common Stock in order to participate in or vote
        with
        respect to such transaction, and the Company will take all steps reasonably
        necessary in order to insure that the Holder is given the practical opportunity
        to convert this Note prior to such time so as to participate in or vote with
        respect to such transaction; provided, however, that the failure to deliver
        such
        notice or any defect therein shall not affect the validity of the corporate
        action required to be described in such notice. 

       

      11.  No
        Fractional Shares.
        The
        Company shall not issue or cause to be issued fractional Underlying Shares
        on
        conversion of this Note. If any fraction of an Underlying Share would, except
        for the provisions of this Section
        11,
        be
        issuable upon conversion of this Note, the number of Underlying Shares to
        be
        issued will be rounded up to the nearest whole share.

       

      12.  Mandatory
        Redemption.
        

       

      (i)  At
        any time following the 30 month anniversary of the Original Issue Date (any
        such
        day, a “Mandatory Redemption Date”), the Holder shall have the
        right to require the Company to redeem all or any portion of the outstanding
        principal amount of the Notes, plus all accrued but unpaid interest thereon
        to
        the date of payment (for each redemption on a Mandatory Redemption Date,
        the
“Mandatory Redemption Price”) on each such Mandatory Redemption
        Date; provided, however, that on the 60th month
        anniversary of the Original Issue Date, the Company shall redeem 100% of
        any
        remaining outstanding principal amount of the Notes, plus accrued but unpaid
        interest thereon to the date of payment. The Holder must deliver a notice
        of the
        redemption at least twenty (20) Trading Days prior to the Mandatory Redemption
        Date, which notice shall state the aggregate principal amount of the Notes
        to be
        redeemed.

       

      (ii)  The
        Company shall pay the Mandatory Redemption Price in the same manner as a
        Monthly
        Installment is paid under Section 2.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      13.  Notices.
        Any and
        all notices or other communications or deliveries hereunder (including any
        Conversion Notice) shall be in writing and shall be deemed given and effective
        on the earliest of (i) the date of transmission, if such notice or communication
        is delivered via facsimile at the facsimile number specified in this
Section 13
        prior
        to
        6:30 p.m. (New York City time) on a Trading Day, (ii) the next Trading Day
        after
        the date of transmission, if such notice or communication is delivered via
        facsimile at the facsimile number specified in this Section
        10
        on a day
        that is not a Trading Day or later than 6:30 p.m. (New York City time) on
        any
        Trading Day, (iii) the Trading Day following the date of mailing, if sent
        by
        nationally recognized overnight courier service, or (iv) upon actual receipt
        by
        the party to whom such notice is required to be given. The addresses for
        such
        communications shall be: (i) if to the Company, to 12120 Sunset Hills Road,
        Suite 410, Reston, VA 20190, facsimile: 703-674-4101, attention Chief Executive
        Officer, or (ii) if to the Holder, to the address or facsimile number appearing
        on the Company’s Noteholder records or such other address or facsimile number as
        the Holder may provide to the Company in accordance with this Section 13.

       

      14.  Miscellaneous.

       

      (a)
          This
        Note
        shall be binding on and inure to the benefit of the parties hereto and their
        respective successors and permitted assigns. The Company shall not be permitted
        to assign this Note.

       

      (b)
          Subject
        to Section
        14(a),
        nothing
        in this Note shall be construed to give to any person or corporation other
        than
        the Company and the Holder any legal or equitable right, remedy or cause
        under
        this Note.

       

      (c)
          Governing
        Law; Venue; Waiver Of Jury Trial.
        all
        questions concerning the construction, validity, enforcement and interpretation
        of this Note shall be governed by and construed and enforced in accordance
        with
        the internal laws of the state of new york, including Sections 5-1401 and
        5-1402
        of the New York General Obligations Law. each party hereby irrevocably submits
        to the exclusive jurisdiction of the state and federal courts sitting in
        the
        city of new york, borough of manhattan, for the adjudication of any dispute
        hereunder or in connection herewith or with any transaction contemplated
        hereby
        or discussed herein (including with respect to the enforcement of any of
        the
        transaction documents), and hereby irrevocably waives, and agrees not to
        assert
        in any suit, action or proceeding, any claim that it is not personally subject
        to the jurisdiction of any such court, that such suit, action or proceeding
        is
        improper. each party hereby irrevocably waives personal service of process
        and
        consents to process being served in any such suit, action or proceeding by
        mailing a copy thereof via registered or certified mail or overnight delivery
        (with evidence of delivery) to such party at the address in effect for notices
        to it under this agreement and agrees that such service shall constitute
        good
        and sufficient service of process and notice thereof. nothing contained herein
        shall be deemed to limit in any way any right to serve process in any manner
        permitted by law. the company hereby waives all rights to a trial by
        jury.

       

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      (d)
          The
        headings herein are for convenience only, do not constitute a part of this
        Note
        and shall not be deemed to limit or affect any of the provisions
        hereof.

       

      (e)
          In
        case
        any one or more of the provisions of this Note shall be invalid or unenforceable
        in any respect, the validity and enforceability of the remaining terms and
        provisions of this Note shall not in any way be affected or impaired thereby
        and
        the parties will attempt in good faith to agree upon a valid and enforceable
        provision which shall be a commercially reasonable substitute therefor, and
        upon
        so agreeing, shall incorporate such substitute provision in this
        Note.

       

      (f)
          In
        the
        event of any stock split, subdivision, dividend or distribution payable in
        shares of Common Stock (or other securities or rights convertible into, or
        entitling the holder thereof to receive directly or indirectly shares of
        Common
        Stock), combination or other similar recapitalization or event occurring
        after
        the date hereof, each reference in this Note to a price shall be amended
        to
        appropriately account for such event.

       

      (g)
          No
        provision of this Note may be waived or amended except in a written instrument
        signed, in the case of an amendment, by the Company and the Holder or, or,
        in
        the case of a waiver, by the Holder. No waiver of any default with respect
        to
        any provision, condition or requirement of this Note shall be deemed to be
        a
        continuing waiver in the future or a waiver of any subsequent default or
        a
        waiver of any other provision, condition or requirement hereof, nor shall
        any
        delay or omission of either party to exercise any right hereunder in any
        manner
        impair the exercise of any such right. 

       

      [REMAINDER
        OF PAGE INTENTIONALLY LEFT BLANK

      SIGNATURE
        PAGE FOLLOWS]

       

       

       

       

       

       

      
        
           

           

          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      IN
        WITNESS WHEREOF, the Company has caused this Note to be duly executed by
        a duly
        authorized officer as of the date first above indicated.

       

      
        	 	 
	 	
                IPIX
                  CORPORATION

              
	 	 
	 	 
	 	
                By
                  _______________________________

              
	 	
                Name:
                  

              
	 	
                Title:
                  

              

      

      

       

       

       

       

       

      
        
          
            

          

          
          

        

        
          
          

          
            

          

        

        
          
          

          
          

        

      

       

      Schedule
        1

       

      FORM
        OF CONVERSION NOTICE

       

      (To
        be
        executed by the registered Holder

      in
        order
        to convert Note)

       

      The
        undersigned hereby elects to convert the specified principal amount of Senior
        Convertible Notes (the “Notes”)
        into
        shares of common stock, $0.001 (the “Common
        Stock”),
        of
        IPIX Corporation, a Delaware corporation, according to the conditions hereof,
        as
        of the date written below.

       

      
        	 	 
	 	 __________________________________________
	 	
                Date
                  to Effect Conversion

              
	 	 
	 	 __________________________________________
	 	
                Principal
                  amount of Notes owned prior to conversion

              
	 	 
	 	 __________________________________________
	 	
                Principal
                  amount of Notes to be converted

                (including
                  accrued but unpaid interest thereon)

              
	 	 
	 	 __________________________________________
	 	
                Number
                  of shares of Common Stock to be Issued

              
	 	 
	 	 __________________________________________
	 	
                Applicable
                  Conversion Price 

              
	 	 
	 	 __________________________________________
	 	
                Principal
                  amount of Notes owned subsequent to Conversion

              
	 	 
	 	 __________________________________________
	 	
                Name
                  of Holder

              
	 	 
	 	
                By
                  ______________________________________________

              
	 	
                Name:

              
	 	
                Title:
                  

              

      

      

       

      
        
           

          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      Schedule
        2

       

       

      CONVERSION
        SCHEDULE

       

      This
        Conversion Schedule reflects conversions of the Senior Convertible Notes
        issued
        by IPIX Corporation.

       

      
        	
                 

                Date
                  of Conversion

              	
                 

                Amount
                  of Conversion

              	
                Aggregate
                  Principal Amount

                Remaining
                  Subsequent to Conversion

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