EXHIBIT 10.48






 


EXHIBIT
10.48


 


NEITHER
THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLE
HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT
BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL TO THE HOLDER (IF REQUESTED BY THE COMPANY), IN A FORM
REASONABLY ACCEPTABLE TO THE COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD OR ELIGIBLE TO BE SOLD
PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH
A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES. ANY TRANSFEREE OF THIS NOTE SHOULD
CAREFULLY REVIEW THE TERMS OF THIS NOTE, INCLUDING SECTIONS 3(c)(iii) AND 18(a) HEREOF. THE PRINCIPAL AMOUNT REPRESENTED BY THIS
NOTE AND, ACCORDINGLY, THE SECURITIES ISSUABLE UPON CONVERSION HEREOF MAY BE LESS THAN THE AMOUNTS SET FORTH ON THE FACE HEREOF
PURSUANT TO SECTION 3(c)(iii) OF THIS NOTE.


 


Infinity
Energy Resources, Inc.


 


Senior
Secured Convertible Note


 


	Issuance Date: May 7, 2015	 	Original Principal Amount: 
	 	 	U.S. $12,000,000


 


FOR
VALUE RECEIVED, Infinity Energy Resources, Inc., a Delaware corporation (the “Company”), hereby promises
to pay to the order of HUDSON BAY MASTER FUND LTD or its registered assigns (“Holder”) the amount set forth
above as the Original Principal Amount (as reduced pursuant to the terms hereof pursuant to redemption, conversion or otherwise,
the “Principal”) when due, whether upon the Maturity Date, on any Installment Date with respect to the Installment
Amount due on such Installment Date (each as defined below), or upon acceleration, redemption or otherwise (in each case in accordance
with the terms hereof) and to pay interest (“Interest”) on any outstanding Principal at the applicable Interest
Rate (as defined below) from the date set forth above as the Issuance Date (the “Issuance Date”) until
the same becomes due and payable, whether upon the Maturity Date, on any Installment Date with respect to the Installment Amount
due on such Installment Date, or upon acceleration, conversion, redemption or otherwise (in each case in accordance with the terms
hereof). This Senior Secured Convertible Note (including all Senior Secured Convertible Notes issued in exchange, transfer or
replacement hereof, this “Note”) is one of an issue of Senior Secured Convertible Notes issued pursuant to
the Securities Purchase Agreement, dated as of May 7, 2015 (the “Subscription Date”), by and among the Company
and the investors (the “Buyers”) referred to therein, as amended from time to time (collectively, the “Notes”,
and such other Senior Secured Convertible Notes, the “Other Notes”). Certain capitalized terms used
herein are defined in Section 31.


 




    	 



    	 



    


 


1.
PRINCIPAL. 


 


(a)
Payments of Principal. On each Installment Date, the Company shall pay to the Holder an amount equal to the Installment
Amount due on such Installment Date in accordance with Section 8. On the Maturity Date, the Company shall pay to the Holder an
amount in cash (excluding any amounts paid in shares of Common Stock on the Maturity Date in accordance with Section 8) representing
all outstanding Principal, accrued and unpaid Interest and accrued and unpaid Late Charges (as defined in Section 24(c)) on such
Principal and Interest. Other than as specifically permitted by this Note, the Company may not prepay any portion of the outstanding
Principal, accrued and unpaid Interest or accrued and unpaid Late Charges on Principal and Interest, if any.


 


(b)
Investor Prepayments; No Share Issuance until Paid in Full. Upon the consummation of any Investor Prepayment, the aggregate
outstanding Restricted Principal under this Note shall automatically become unrestricted Principal hereunder, on a dollar-for-dollar
basis, in an amount equal to the aggregate amount of cash paid in such Investor Prepayment. Notwithstanding anything herein to
the contrary, the shares of Common Stock issuable upon conversion of Restricted Principal hereunder shall not be issued by the
Company until such Restricted Principal subject to such conversion has been fully paid (to the Company or to such other Persons
as directed by the Company in writing) and becomes unrestricted in accordance with the preceding sentence.


 


(c)
Prohibited Transfer Reduction. Upon any Prohibited Transfer (as defined in the Investor Note) of the Investor Note, (x)
the Investor Note shall be deemed paid in full and shall be null and void, (y) 75% of the Restricted Principal then outstanding
hereunder shall be automatically cancelled and (z) the remaining 25% of Restricted Principal outstanding hereunder shall automatically
become unrestricted Principal hereunder.


 


(d)
Investor Offset Right Reduction. Upon any exercise by the Holder of Investor Offset Rights (as defined in the Investor
Note), the Restricted Principal hereunder shall automatically and simultaneously be reduced, on a dollar-for-dollar basis, by
such portion of the aggregate principal of the Investor Note cancelled pursuant to such Investor Offset Rights.


 


(e)
Single Integrated Transaction. The Company hereby acknowledges and agrees that (i) the Holder shall be entitled to exercise
the Investor Offset Rights through any means permissible under applicable law, including without limitation, set-off and recoupment
and (ii) the obligations of the Holder under the Investor Note and the obligations of the Company under this Note arise in a single
integrated transaction and constitute related and interdependent obligations within such transaction.


 




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2. INTEREST;
INTEREST RATE. 


 


(a)
Interest on this Note shall commence accruing on the Issuance Date and shall be computed on the basis of a 360-day year and twelve
30-day months and shall be payable in arrears on each Interest Date and shall compound each calendar month and shall be payable
in accordance with the terms of this Note. Interest shall be paid (i) on each Interest Date occurring on an Installment Date in
accordance with Section 8 as part of the applicable Installment Amount due on the applicable Installment Date and (ii) with respect
to each other Interest Date, on such Interest Date in cash.


 


(b)
Prior to the payment of Interest on an Interest Date, Interest on this Note shall accrue at the Interest Rate and be payable by
way of inclusion of the Interest in the Conversion Amount on each Conversion Date in accordance with Section 3(b)(i) or
upon any redemption in accordance with Section 11 or any required payment upon any Bankruptcy Event of Default.. From and after
the occurrence and during the continuance of any Event of Default, the Interest Rate shall automatically be increased to eighteen
percent (18.0%) per annum. In the event that such Event of Default is subsequently cured, the adjustment referred to in the preceding
sentence shall cease to be effective as of the calendar day immediately following the date of such cure; provided that the Interest
as calculated and unpaid at such increased rate during the continuance of such Event of Default shall continue to apply to the
extent relating to the days after the occurrence of such Event of Default through and including the date of such cure of such
Event of Default.


 


3. CONVERSION
OF NOTES. At any time after the Issuance Date, this Note shall be convertible into validly issued, fully paid and
non-assessable shares of Common Stock (as defined below), on the terms and conditions set forth in this Section 3.


 


(a)
Conversion Right. Subject to the provisions of Section 3(d), at any time or times on or after the Issuance Date, the Holder
shall be entitled to convert any portion of the outstanding and unpaid Conversion Amount (as defined below) into validly issued,
fully paid and non-assessable shares of Common Stock in accordance with Section 3(c), at the Conversion Rate (as defined below).
The Company shall not issue any fraction of a share of Common Stock upon any conversion. If the issuance would result in the issuance
of a fraction of a share of Common Stock, the Company shall round such fraction of a share of Common Stock up to the nearest whole
share. The Company shall pay any and all transfer, stamp, issuance and similar taxes, costs and expenses (including, without limitation,
fees and expenses of the Transfer Agent (as defined below)) that may be payable with respect to the issuance and delivery of Common
Stock upon conversion of any Conversion Amount.


 


(b)
Conversion Rate. The number of shares of Common Stock issuable upon conversion of any Conversion Amount pursuant to Section
3(a) shall be determined by dividing (x) such Conversion Amount by (y) the Conversion Price (the “Conversion Rate”).


 




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(i)
“Conversion Amount” means the sum of (x) portion of the Principal to be converted, redeemed or otherwise with
respect to which this determination is being made and (y) all accrued and unpaid Interest with respect to such portion of the
Principal amount and accrued and unpaid Late Charges with respect to such portion of such Principal and such Interest, if any.


 


(ii)
“Conversion Price” means, as of any Conversion Date or other date of determination, $0.50, subject to adjustment
as provided herein.


 


(c)
Mechanics of Conversion.


 


(i)
Optional Conversion. To convert any Conversion Amount into shares of Common Stock on any date (a “Conversion Date“),
the Holder shall deliver (whether via facsimile, electronic mail or otherwise), for receipt on or prior to 11:59 p.m., New York
time, on such date, a copy of an executed notice of conversion in the form attached hereto as Exhibit I (the “Conversion
Notice”) to the Company. If required by Section 3(c)(iii), within three (3) Trading Days following a conversion of this
Note as aforesaid, the Holder shall surrender this Note to a nationally recognized overnight delivery service for delivery to
the Company (or an indemnification undertaking with respect to this Note in the case of its loss, theft or destruction as contemplated
by Section 18(b)). On or before the first (1st) Trading Day following the date of receipt of a Conversion Notice, the Company
shall transmit by facsimile or electronic mail an acknowledgment of confirmation, in the form attached hereto as Exhibit II, of
receipt of such Conversion Notice to the Holder and the Company’s transfer agent (the “Transfer Agent”)
which confirmation shall constitute an instruction to the Transfer Agent to process such Conversion Notice in accordance with
the terms herein. On or before the third (3rd) Trading Day following the date on which the Company has received a Conversion Notice
(or such earlier date as required pursuant to the 1934 Act or other applicable law, rule or regulation for the settlement of a
trade initiated on the applicable Conversion Date of such shares of Common Stock issuable pursuant to such Conversion Notice)
(the “Share Delivery Deadline”), the Company shall (1) provided that the Transfer Agent is participating in
The Depository Trust Company’s (“DTC”) Fast Automated Securities Transfer Program, credit such aggregate
number of shares of Common Stock to which the Holder shall be entitled pursuant to such conversion to the Holder’s or its
designee’s balance account with DTC through its Deposit/Withdrawal at Custodian system or (2) if the Transfer Agent is not
participating in the DTC Fast Automated Securities Transfer Program, upon the request of the Holder, issue and deliver (via reputable
overnight courier) to the address as specified in the Conversion Notice, a certificate, 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 pursuant to such conversion. If this
Note is physically surrendered for conversion pursuant to Section 3(c)(iii) and the outstanding Principal of this Note is greater
than the Principal portion of the Conversion Amount being converted, then the Company shall as soon as practicable and in no event
later than three (3) Business Days after receipt of this Note and at its own expense, issue and deliver to the Holder (or its
designee) a new Note (in accordance with Section 18(d)) representing the outstanding Principal not converted. The Person or Persons
entitled to receive the shares of Common Stock issuable upon a conversion of this Note shall be treated for all purposes as the
record holder or holders of such shares of Common Stock on the Conversion Date. In the event of a partial conversion of this Note
pursuant hereto, the Principal amount converted shall be deducted from the Installment Amount(s) relating to the Installment Date(s)
as set forth in the applicable Conversion Notice. Notwithstanding anything to the contrary contained in this Note or the Registration
Rights Agreement, after the effective date of the Registration Statement (as defined in the Registration Rights Agreement) and
prior to the Holder’s receipt of the notice of a Grace Period (as defined in the Registration Rights Agreement), the Company
shall cause the Transfer Agent to deliver unlegended shares of Common Stock to the Holder (or its designee) in connection with
any sale of Registrable Securities (as defined in the Registration Rights Agreement) with respect to which the Holder has entered
into a contract for sale, and delivered a copy of the prospectus included as part of the particular Registration Statement to
the extent applicable, and for which the Holder has not yet settled.


 




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(ii)
Company’s Failure to Timely Convert. If the Company shall fail, for any reason or for no reason, on or prior to the
applicable Share Delivery Deadline, either (I) if the Transfer Agent is not participating in the DTC Fast Automated Securities
Transfer Program, to issue and deliver to the Holder (or its designee) a certificate for the number of shares of Common Stock
to which the Holder is entitled and register such shares of Common Stock on the Company’s share register or, if the Transfer
Agent is participating in the DTC Fast Automated Securities Transfer Program, to credit the balance account of the Holder or the
Holder’s designee with DTC for such number of shares of Common Stock to which the Holder is entitled upon the Holder’s
conversion of this Note (as the case may be) or (II) if the Registration Statement covering the resale of the shares of Common
Stock that are the subject of the Conversion Notice (the “Unavailable Conversion Shares”) is not available
for the resale of such Unavailable Conversion Shares and the Company fails to promptly, but in no event later than as required
pursuant to the Registration Rights Agreement (x) so notify the Holder and (y) deliver the shares of Common Stock electronically
without any restrictive legend by crediting such aggregate number of shares of Common Stock to which the Holder is entitled pursuant
to such exercise to the Holder’s or its designee’s balance account with DTC through its Deposit/Withdrawal At Custodian
system (the event described in the immediately foregoing clause (II) is hereinafter referred as a “Notice Failure”
and together with the event described in clause (I) above, a “Conversion Failure”), then, in addition to all
other remedies available to the Holder, (1) the Company shall pay in cash to the Holder on each day after such Share Delivery
Deadline that the issuance of such shares of Common Stock is not timely effected an amount equal to 2% of the product of (A) the
sum of the number of shares of Common Stock not issued to the Holder on or prior to the Share Delivery Deadline and to which the
Holder is entitled, multiplied by (B) any trading price of the Common Stock selected by the Holder in writing as in effect at
any time during the period beginning on the applicable Conversion Date and ending on the applicable Share Delivery Date and (2)
the Holder, upon written notice to the Company, may void its Conversion Notice with respect to, and retain or have returned (as
the case may be) any portion of this Note that has not been converted pursuant to such Conversion Notice, provided that the voiding
of a Conversion Notice shall not affect the Company’s obligations to make any payments which have accrued prior to the date
of such notice pursuant to this Section 3(c)(ii) or otherwise. In addition to the foregoing, if on or prior to the Share Delivery
Deadline either (A) if the Transfer Agent is not participating in the DTC Fast Automated Securities Transfer Program, the Company
shall fail to issue and deliver to the Holder (or its designee) a certificate and register such shares of Common Stock on the
Company’s share register or, if the Transfer Agent is participating in the DTC Fast Automated Securities Transfer Program,
the Transfer Agent shall fail to credit the balance account of the Holder or the Holder’s designee with DTC for the number
of shares of Common Stock to which the Holder is entitled upon the Holder’s conversion hereunder or pursuant to the Company’s
obligation pursuant to clause (II) below or (B) a Notice Failure occurs, and if on or after such Share Delivery Deadline the Holder
purchases (in an open market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale by the Holder
of all or any portion of the number of shares of Common Stock issuable upon such conversion that the Holder anticipated receiving
from the Company (a “Buy-In”), then, in addition to all other remedies available to the Holder, the Company
shall, within three (3) Business Days after receipt of the Holder’s request and in the Holder’s discretion, either:
(I) pay cash to the Holder in an amount equal to the Holder’s total purchase price (including brokerage commissions and
other out-of-pocket expenses, if any) for the shares of Common Stock so purchased (including, without limitation, by any other
Person in respect, or on behalf, of the Holder) (the “Buy-In Price”), at which point the Company’s obligation
to so issue and deliver such certificate (and to issue such shares of Common Stock) or credit the balance account of such Holder
or such Holder’s designee, as applicable, with DTC for the number of shares of Common Stock to which the Holder is entitled
upon the Holder’s conversion hereunder (as the case may be) (and to issue such shares of Common Stock) shall terminate,
or (II) promptly honor its obligation to so issue and deliver to the Holder a certificate or certificates representing such shares
of Common Stock or credit the balance account of such Holder or such Holder’s designee, as applicable, with DTC for the
number of shares of Common Stock to which the Holder is entitled upon the Holder’s conversion hereunder (as the case may
be) and pay cash to the Holder in an amount equal to the excess (if any) of the Buy-In Price over the product of (x) such number
of shares of Common Stock multiplied by (y) the lowest Closing Sale Price of the Common Stock on any Trading Day during the period
commencing on the date of the applicable Conversion Notice and ending on the date of such issuance and payment under this clause
(II) (the “Buy-In Payment Amount”). Nothing shall limit the Holder’s right to pursue any other remedies
available to it hereunder, at law or in equity, including, without limitation, a decree of specific performance and/or injunctive
relief with respect to the Company’s failure to timely deliver certificates representing shares of Common Stock (or to electronically
deliver such shares of Common Stock) upon the conversion of this Note as required pursuant to the terms hereof.


 




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(iii)
Registration; Book-Entry. The Company shall maintain a register (the “Register”) for the recordation
of the names and addresses of the holders of each Note and the principal amount of the Notes and Restricted Principal held by
such holders held by such holders (the “Registered Notes”). The entries in the Register shall be conclusive
and binding for all purposes absent manifest error. The Company and the holders of the Notes shall treat each Person whose name
is recorded in the Register as the owner of a Note for all purposes (including, without limitation, the right to receive payments
of Principal and Interest hereunder) notwithstanding notice to the contrary. A Registered Note may be assigned, transferred or
sold in whole or in part only by registration of such assignment or sale on the Register. Upon its receipt of a written request
to assign, transfer or sell all or part of any Registered Note by the holder thereof, the Company shall record the information
contained therein in the Register and issue one or more new Registered Notes in the same aggregate principal amount as the principal
amount of the surrendered Registered Note to the designated assignee or transferee pursuant to Section 18, provided that if the
Company does not so record an assignment, transfer or sale (as the case may be) of all or part of any Registered Note within two
(2) Business Days of such a request, then the Register shall be automatically deemed updated to reflect such assignment, transfer
or sale (as the case may be). Notwithstanding anything to the contrary set forth in this Section 3, following conversion of any
portion of this Note in accordance with the terms hereof, the Holder shall not be required to physically surrender this Note to
the Company unless (A) the full Conversion Amount represented by this Note is being converted (in which event this Note shall
be delivered to the Company following conversion thereof as contemplated by Section 3(c)(i)) or (B) the Holder has provided the
Company with prior written notice (which notice may be included in a Conversion Notice) requesting reissuance of this Note upon
physical surrender of this Note. The Holder and the Company shall maintain records showing the Principal, Interest and Late Charges
converted and/or paid (as the case may be) or Restricted Principal becoming unrestricted and the dates of such conversions, Investor
Prepayments and/or payments (as the case may be) or shall use such other method, reasonably satisfactory to the Holder and the
Company, so as not to require physical surrender of this Note upon conversion. If the Company does not update the Register to
record such Principal, Interest and Late Charges converted and/or paid (as the case may be) or Restricted Principal becoming unrestricted
and the dates of such conversions, Investor Prepayment and/or payments (as the case may be) within two (2) Business Days of such
occurrence, then the Register shall be automatically deemed updated to reflect such occurrence.


 


(iv)
Pro Rata Conversion; Disputes. In the event that the Company receives a Conversion Notice from more than one holder of
Notes for the same Conversion Date and the Company can convert some, but not all, of such portions of the Notes submitted for
conversion, the Company, subject to Section 3(d), shall convert from each holder of Notes electing to have Notes converted on
such date a pro rata amount of such holder’s portion of its Notes submitted for conversion based on the principal amount
of Notes submitted for conversion on such date by such holder relative to the aggregate principal amount of all Notes submitted
for conversion on such date. In the event of a dispute as to the number of shares of Common Stock issuable to the Holder in connection
with a conversion of this Note, the Company shall issue to the Holder the number of shares of Common Stock not in dispute and
resolve such dispute in accordance with Section 23.


 




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(d)
Limitations on Conversions. The Company shall not effect the conversion of any portion of this Note, and the Holder shall
not have the right to convert any portion of this Note pursuant to the terms and conditions of this Note and any such conversion
shall be null and void and treated as if never made, to the extent that after giving effect to such conversion, the Holder together
with the other Attribution Parties collectively would beneficially own in excess of 9.99% (the “Maximum Percentage”)
of the shares of Common Stock outstanding immediately after giving effect to such conversion. For purposes of the foregoing sentence,
the aggregate number of shares of Common Stock beneficially owned by the Holder and the other Attribution Parties shall include
the number of shares of Common Stock held by the Holder and all other Attribution Parties plus the number of shares of Common
Stock issuable upon conversion of this Note with respect to which the determination of such sentence is being made, but shall
exclude shares of Common Stock which would be issuable upon (A) conversion of the remaining, nonconverted portion of this Note
beneficially owned by the Holder or any of the other Attribution Parties and (B) exercise or conversion of the unexercised or
nonconverted portion of any other securities of the Company (including, without limitation, any convertible notes or convertible
preferred stock or warrants, including the Warrants) beneficially owned by the Holder or any other Attribution Party subject to
a limitation on conversion or exercise analogous to the limitation contained in this Section 3(d)(i). For purposes of this Section
3(d)(i), beneficial ownership shall be calculated in accordance with Section 13(d) of the 1934 Act. For purposes of determining
the number of outstanding shares of Common Stock the Holder may acquire upon the conversion of this Note without exceeding the
Maximum Percentage, the Holder may rely on the number of outstanding shares of Common Stock as reflected in (x) the Company’s
most recent Annual Report on Form 10-K, Quarterly Report on Form 10-Q, Current Report on Form 8-K or other public filing with
the SEC, as the case may be, (y) a more recent public announcement by the Company or (z) any other written notice by the Company
or the Transfer Agent, if any, setting forth the number of shares of Common Stock outstanding (the “Reported Outstanding
Share Number”). If the Company receives a Conversion Notice from the Holder at a time when the actual number of outstanding
shares of Common Stock is less than the Reported Outstanding Share Number, the Company shall notify the Holder in writing of the
number of shares of Common Stock then outstanding and, to the extent that such Conversion Notice would otherwise cause the Holder’s
beneficial ownership, as determined pursuant to this Section 3(d)(i), to exceed the Maximum Percentage, the Holder must notify
the Company of a reduced number of shares of Common Stock to be purchased pursuant to such Conversion Notice. For any reason at
any time, upon the written or oral request of the Holder, the Company shall within one (1) Business Day confirm orally and in
writing or by electronic mail to the Holder the number of shares of Common Stock then outstanding. In any case, the number of
outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise of securities of the
Company, including this Note, by the Holder and any other Attribution Party since the date as of which the Reported Outstanding
Share Number was reported. In the event that the issuance of shares of Common Stock to the Holder upon conversion of this Note
results in the Holder and the other Attribution Parties being deemed to beneficially own, in the aggregate, more than the Maximum
Percentage of the number of outstanding shares of Common Stock (as determined under Section 13(d) of the 1934 Act), the number
of shares so issued by which the Holder’s and the other Attribution Parties’ aggregate beneficial ownership exceeds
the Maximum Percentage (the “Excess Shares”) shall be deemed null and void and shall be cancelled ab initio,
and the Holder shall not have the power to vote or to transfer the Excess Shares. Upon delivery of a written notice to the Company,
the Holder may from time to time increase (with such increase not effective until the sixty-first (61st) day after delivery of
such notice) or decrease the Maximum Percentage to any other percentage not in excess of 9.99% as specified in such notice; provided
that (i) any such increase in the Maximum Percentage will not be effective until the sixty-first (61st) day after such notice
is delivered to the Company and (ii) any such increase or decrease will apply only to the Holder and the other Attribution Parties
and not to any other holder of Notes that is not an Attribution Party of the Holder. For purposes of clarity, the shares of Common
Stock issuable pursuant to the terms of this Note in excess of the Maximum Percentage shall not be deemed to be beneficially owned
by the Holder for any purpose including for purposes of Section 13(d) or Rule 16a-1(a)(1) of the 1934 Act. No prior inability
to convert this Note pursuant to this paragraph shall have any effect on the applicability of the provisions of this paragraph
with respect to any subsequent determination of convertibility. The provisions of this paragraph shall be construed and implemented
in a manner otherwise than in strict conformity with the terms of this Section 3(d)(i) to the extent necessary to correct this
paragraph (or any portion of this paragraph) which may be defective or inconsistent with the intended beneficial ownership limitation
contained in this Section 3(d)(i) or to make changes or supplements necessary or desirable to properly give effect to such limitation.
The limitation contained in this paragraph may not be waived and shall apply to a successor holder of this Note.


 






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(e)
Right of Alternate Conversion.


 


(i)
General.


 


(1)
Alternate Optional Conversion. At any time, at the option of the Holder, the Holder may convert (each, an “Alternate
Optional Conversion”, and the date of such Alternate Optional Conversion, an “Alternate Optional Conversion
Date”) all, or any part, of up to an aggregate of the Principal amount of this Note as of the initial Issuance Date
equal to the Holder Pro Rata Amount of $12 million (together with any accrued and unpaid Interest thereon and accrued and unpaid
Late Charges on such Principal and Interest through such Alternate Optional Conversion Date) into shares of Common Stock (such
portion of the Conversion Amount subject to such Alternate Optional Conversion, the “Alternate Optional Conversion Amount”)
at the Alternate Conversion Price. In the event that the Holder shall sell or otherwise transfer all or any portion of this Note,
each transferee shall be allocated such portion of the Conversion Amount eligible to be an Alternate Optional Conversion Amount,
if any, as specified in the documentation with respect to such transfer (or, if unspecified therein, pro rata based on the portion
of this Note transferred).


 


(2)
Alternate Conversion Upon an Event of Default. At any time at any time after the occurrence of an Event of Default (regardless
of whether such Event of Default has been cured or if the Holder has delivered an Event of Default Redemption Notice to the Company),
the Holder may, at the Holder’s option, convert (each, an “Alternate Event of Default Conversion” and
together with each Alternate Optional Conversion, each, an “Alternate Conversion”, and the date of such Alternate
Event of Default Conversion, each, an “Alternate Event of Default Conversion Date”, and together with each
Alternate Optional Conversion Date, each, an “Alternate Conversion Date”) all, or any part of, the Conversion
Amount (such portion of the Conversion Amount subject to such Alternate Conversion, the “Alternate Event of Default Conversion
Amount” and together with each Alternate Optional Conversion Amount, each, an “Alternate Conversion Amount”)
into shares of Common Stock at the Alternate Conversion Price.


 


(ii)
Mechanics of Alternate Conversion. On any Alternate Conversion Date, the Holder may voluntarily convert any Alternate Conversion
Amount pursuant to Section 3(c) (with “Alternate Conversion Price” replacing “Conversion Price” for all
purposes hereunder with respect to such Alternate Conversion and, solely with respect to the calculation of the number of shares
of Common Stock issuable upon conversion of any Conversion Amount in an Alternate Default Conversion, with “Redemption Premium
of the Conversion Amount” replacing “Conversion Amount” in clause (x) of the definition of Conversion Rate above
with respect to such Alternate Conversion) by designating in the Conversion Notice delivered pursuant to this Section 3(e) of
this Note that the Holder is electing to use the Alternate Conversion Price for such conversion. Notwithstanding anything to the
contrary in this Section 3(e), but subject to Section 3(d), until the Company delivers shares of Common Stock representing the
applicable Alternate Conversion Amount to the Holder, such Alternate Conversion Amount may be converted by the Holder into shares
of Common Stock pursuant to Section 3(c) without regard to this Section 3(e).


 






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4.
RIGHTS UPON EVENT OF DEFAULT.


 












 


(a)
Event of Default. Each of the following events shall constitute an “Event of Default” and each of the
events in clauses (ix), (x) and (xi) shall constitute a “Bankruptcy Event of Default”:


 


(i)
the failure of the applicable Registration Statement (as defined in the Registration Rights Agreement) to be filed with the SEC
on or prior to the date that is five (5) days after the applicable Filing Deadline (as defined in the Registration Rights Agreement);


 


(ii)
at any time after the initial Registration Statement filed pursuant to the Registration Rights Agreement is declared effective
by the SEC, the effectiveness of such Registration Statement (or any other Registration Statement registering any Registrable
Securities (as defined in the Registration Rights Agreement)) lapses for any reason (including, without limitation, the issuance
of a stop order) or such Registration Statement (or the prospectus contained therein) is unavailable to any holder of Registrable
Securities for sale of all of such holder’s Registrable Securities in accordance with the terms of the Registration Rights
Agreement, and such lapse or unavailability continues for a period of five (5) consecutive days or for more than an aggregate
of fifteen (15) days in any 365-day period (excluding days during an Allowable Grace Period (as defined in the Registration Rights
Agreement));


 


(iii)
the suspension (or threatened suspension) from trading or the failure (or threatened failure) of the Common Stock to be trading
or listed (as applicable) on an Eligible Market for a period of five (5) consecutive Trading Days;


 


(iv)
the Company’s (A) failure to cure a Conversion Failure or a Delivery Failure (as defined in the Warrants) by delivery of
the required number of shares of Common Stock within five (5) Trading Days after the applicable Conversion Date or exercise date
(as the case may be) or (B) notice, written or oral, to any holder of the Notes or Warrants, including, without limitation, by
way of public announcement or through any of its agents, at any time, of its intention not to comply, as required, with a request
for conversion of any Notes into shares of Common Stock that is requested in accordance with the provisions of the Notes, other
than pursuant to Section 3(d), or a request for exercise of any Warrants for Warrant Shares in accordance with the provisions
of the Warrants;


 


(v)
except to the extent the Company is in compliance with Section 10(b) below, at any time following the tenth (10th) consecutive
day that the Holder’s Authorized Share Allocation (as defined in Section 10(a) below) is less than the number of shares
of Common Stock that the Holder would be entitled to receive upon a conversion of the full Conversion Amount of this Note (without
regard to any limitations on conversion set forth in Section 3(d) or otherwise), and (B) the number of shares of Common Stock
that the Holder would be entitled to receive upon exercise in full of the Holder’s Warrants (without regard to any limitations
on exercise set forth in the Warrants);


 




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(vi)
the Company’s or any Subsidiary’s failure to pay to the Holder any amount of Principal, Interest, Late Charges or
other amounts when and as due under this Note (including, without limitation, the Company’s or any Subsidiary’s failure
to pay any redemption payments or amounts hereunder) or any other Transaction Document (as defined in the Securities Purchase
Agreement) or any other agreement, document, certificate or other instrument delivered in connection with the transactions contemplated
hereby and thereby, except, in the case of a failure to pay Interest and Late Charges when and as due, in which case only if such
failure remains uncured for a period of at least two (2) Trading Days;


 


(vii)
the Company fails to remove any restrictive legend on any certificate or any shares of Common Stock issued to the Holder upon
conversion or exercise (as the case may be) of any Securities acquired by the Holder under the Securities Purchase Agreement (including
this Note) as and when required by such Securities or the Securities Purchase Agreement, unless otherwise then prohibited by applicable
federal securities laws, and any such failure remains uncured for at least five (5) days;


 


(viii)
other than such Indebtedness or judgments set forth on Schedule 4(a)(viii) attached hereto (solely to the extent such holders
have not taken any action to enforce such Indebtedness or judgments, which would reasonably be expected to result in the seizure
of any assets of the Company or any of its Subsidiaries) (collectively, the “Permitted Default Indebtedness”),
the occurrence of any default under, redemption of or acceleration prior to maturity of at least an aggregate of $100,000 of Indebtedness
(as defined in the Securities Purchase Agreement) of the Company or any of its Subsidiaries, other than with respect to any Other
Notes;


 


(ix)
bankruptcy, insolvency, reorganization or liquidation proceedings or other proceedings for the relief of debtors shall be instituted
by or against the Company or any Subsidiary and, if instituted against the Company or any Subsidiary by a third party, shall not
be dismissed within thirty (30) days of their initiation;


 


(x)
the commencement by the Company or any Subsidiary of a voluntary case or proceeding under any applicable federal, state or foreign
bankruptcy, insolvency, reorganization or other similar law or of any other case or proceeding to be adjudicated a bankrupt or
insolvent, or the consent by it to the entry of a decree, order, judgment or other similar document in respect of the Company
or any Subsidiary in an involuntary case or proceeding under any applicable federal, state or foreign bankruptcy, insolvency,
reorganization or other similar law or to the commencement of any bankruptcy or insolvency case or proceeding against it, or the
filing by it of a petition or answer or consent seeking reorganization or relief under any applicable federal, state or foreign
law, or the consent by it to the filing of such petition or to the appointment of or taking possession by a custodian, receiver,
liquidator, assignee, trustee, sequestrator or other similar official of the Company or any Subsidiary or of any substantial part
of its property, or the making by it of an assignment for the benefit of creditors, or the execution of a composition of debts,
or the occurrence of any other similar federal, state or foreign proceeding, or the admission by it in writing of its inability
to pay its debts generally as they become due, the taking of corporate action by the Company or any Subsidiary in furtherance
of any such action or the taking of any action by any Person to commence a Uniform Commercial Code foreclosure sale or any other
similar action under federal, state or foreign law;


 




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(xi)
the entry by a court of (i) a decree, order, judgment or other similar document in respect of the Company or any Subsidiary of
a voluntary or involuntary case or proceeding under any applicable federal, state or foreign bankruptcy, insolvency, reorganization
or other similar law or (ii) a decree, order, judgment or other similar document adjudging the Company or any Subsidiary as bankrupt
or insolvent, or approving as properly filed a petition seeking liquidation, reorganization, arrangement, adjustment or composition
of or in respect of the Company or any Subsidiary under any applicable federal, state or foreign law or (iii) a decree, order,
judgment or other similar document appointing a custodian, receiver, liquidator, assignee, trustee, sequestrator or other similar
official of the Company or any Subsidiary or of any substantial part of its property, or ordering the winding up or liquidation
of its affairs, and the continuance of any such decree, order, judgment or other similar document or any such other decree, order,
judgment or other similar document unstayed and in effect for a period of thirty (30) consecutive days;


 


(xii)
other than with respect to the Permitted Default Indebtedness, a final judgment or judgments for the payment of money aggregating
in excess of $100,000 are rendered against the Company and/or any of its Subsidiaries and which judgments are not, within thirty
(30) days after the entry thereof, bonded, discharged, settled or stayed pending appeal, or are not discharged within thirty (30)
days after the expiration of such stay; provided, however, any judgment which is covered by insurance or an indemnity from a credit
worthy party shall not be included in calculating the $100,000 amount set forth above so long as the Company provides the Holder
a written statement from such insurer or indemnity provider (which written statement shall be reasonably satisfactory to the Holder)
to the effect that such judgment is covered by insurance or an indemnity and the Company or such Subsidiary (as the case may be)
will receive the proceeds of such insurance or indemnity within thirty (30) days of the issuance of such judgment;


 


(xiii)
other than with respect to the Permitted Default Indebtedness, the Company and/or any Subsidiary, individually or in the aggregate,
either (i) fails to pay, when due, or within any applicable grace period, any payment with respect to any Indebtedness in excess
of $100,000 due to any third party (other than, with respect to unsecured Indebtedness only, payments contested by the Company
and/or such Subsidiary (as the case may be) in good faith by proper proceedings and with respect to which adequate reserves have
been set aside for the payment thereof in accordance with GAAP) or is otherwise in breach or violation of any agreement for monies
owed or owing in an amount in excess of $100,000, which breach or violation permits the other party thereto to declare a default
or otherwise accelerate amounts due thereunder, or (ii) suffer to exist any other circumstance or event that would, with or without
the passage of time or the giving of notice, result in a default or event of default under any agreement binding the Company or
any Subsidiary, which default or event of default would or is likely to have a material adverse effect on the business, assets,
operations (including results thereof), liabilities, properties, condition (including financial condition) or prospects of the
Company or any of its Subsidiaries, individually or in the aggregate;


 




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(xiv)
other than as specifically set forth in another clause of this Section 4(a), the Company or any Subsidiary breaches any representation,
warranty, covenant or other term or condition of any Transaction Document, except, in the case of a breach of a covenant or other
term or condition that is curable, only if such breach remains uncured for a period of five (5) consecutive Trading Days;


 


(xv)
a false or inaccurate certification (including a false or inaccurate deemed certification) by the Company that either (A) the
Equity Conditions are satisfied, (B) there has been no Equity Conditions Failure, or (C) as to whether any Event of Default has
occurred;


 


(xvi)
any breach or failure in any respect by the Company or any Subsidiary to comply with any provision of Section 13 of this Note;


 


(xvii)
any Material Adverse Effect (as defined in the Securities Purchase Agreement) occurs;


 


(xviii)
any provision of any Transaction Document (including, without limitation, the Security Documents and the Guaranties) shall at
any time for any reason (other than pursuant to the express terms thereof) cease to be valid and binding on or enforceable against
the parties thereto, or the validity or enforceability thereof shall be contested by any party thereto, or a proceeding shall
be commenced by the Company or any Subsidiary or any governmental authority having jurisdiction over any of them, seeking to establish
the invalidity or unenforceability thereof, or the Company or any Subsidiary shall deny in writing that it has any liability or
obligation purported to be created under any Transaction Document (including, without limitation, the Security Documents and the
Guaranties);


 


(xix)
any Security Document shall for any reason fail or cease to create a separate valid and perfected and, except to the extent permitted
by the terms hereof or thereof, first priority Lien (as defined in the Securities Purchase Agreement) on the Collateral (as defined
in the Security Documents) in favor of the Collateral Agent (as defined in the Securities Purchase Agreement) or any material
provision of any Security Document shall at any time for any reason cease to be valid and binding on or enforceable against the
Company or the validity or enforceability thereof shall be contested by any party thereto, or a proceeding shall be commenced
by the Company or any governmental authority having jurisdiction over the Company, seeking to establish the invalidity or unenforceability
thereof;


 




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(xx)
any material damage to, or loss, theft or destruction of, any Collateral, whether or not insured, or any strike, lockout, labor
dispute, embargo, condemnation, act of God or public enemy, or other casualty which causes, for more than fifteen (15) consecutive
days, the cessation or substantial curtailment of revenue producing activities at any facility of the Company or any Subsidiary,
if any such event or circumstance could have a Material Adverse Effect; or


 


(xxi)
any Event of Default (as defined in the Other Notes) occurs with respect to any Other Notes.


 


(b)
Notice of an Event of Default; Redemption Right. Upon the occurrence of an Event of Default with respect to this Note or
any Other Note, the Company shall within two (2) Business Day deliver written notice thereof via facsimile or electronic mail
and overnight courier (with next day delivery specified) (an “Event of Default Notice”) to the Holder. At any
time after the earlier of the Holder’s receipt of an Event of Default Notice and the Holder becoming aware of an Event of
Default (such earlier date, the “Event of Default Right Commencement Date”) and ending (such ending date, the
“Event of Default Right Expiration Date”, and each such period, an “Event of Default Redemption Right
Period”) on the twentieth (20th) Trading Day after the later of (x) the date such Event of Default is cured and (y)
the Holder’s receipt of an Event of Default Notice that includes (I) a reasonable description of the applicable Event of
Default, (II) a certification as to whether, in the opinion of the Company, such Event of Default is capable of being cured and,
if applicable, a reasonable description of any existing plans of the Company to cure such Event of Default and (III) a certification
as to the date the Event of Default occurred and, if cured on or prior to the date of such Event of Default Notice, the applicable
Event of Default Right Expiration Date, the Holder may require the Company to redeem (regardless of whether such Event of Default
has been cured on or prior to the Event of Default Right Expiration Date) all or any portion of this Note by delivering written
notice thereof (the ”Event of Default Redemption Notice") to the Company, which Event of Default Redemption Notice
shall indicate the portion of this Note the Holder is electing to redeem. Each portion of this Note subject to redemption by the
Company pursuant to this Section 4(b) shall be redeemed by the Company at a price equal to the greater of (i) the product of (A)
the Conversion Amount to be redeemed multiplied by (B) the Redemption Premium and (ii) the product of (X) the Conversion Rate
with respect to the Conversion Amount in effect at such time as the Holder delivers an Event of Default Redemption Notice multiplied
by (Y) the product of (1) the Redemption Premium multiplied by (2) the greatest Closing Sale Price of the Common Stock on any
Trading Day during the period commencing on the date immediately preceding such Event of Default and ending on the date the Company
makes the entire payment required to be made under this Section 4(b) (the “Event of Default Redemption Price”).
Redemptions required by this Section 4(b) shall be made in accordance with the provisions of Section 11. To the extent redemptions
required by this Section 4(b) are deemed or determined by a court of competent jurisdiction to be prepayments of this Note by
the Company, such redemptions shall be deemed to be voluntary prepayments. Notwithstanding anything to the contrary in this Section
3(e), but subject to Section 3(d), until the Event of Default Redemption Price (together with any Late Charges thereon) is paid
in full, the Conversion Amount submitted for redemption under this Section 4(b) (together with any Late Charges thereon) may be
converted, in whole or in part, by the Holder into Common Stock pursuant to the terms of this Note. In the event of a partial
redemption of this Note pursuant hereto, the Principal amount redeemed shall be deducted from the Installment Amount(s) relating
to the applicable Installment Date(s) as set forth in the Event of Default Redemption Notice. In the event of the Company’s
redemption of any portion of this Note under this Section 4(b), the Holder’s damages would be uncertain and difficult to
estimate because of the parties’ inability to predict future interest rates and the uncertainty of the availability of a
suitable substitute investment opportunity for the Holder. Accordingly, any redemption premium due under this Section 4(b) is
intended by the parties to be, and shall be deemed, a reasonable estimate of the Holder’s actual loss of its investment
opportunity and not as a penalty. Any redemption upon an Event of Default shall not constitute an election of remedies by the
Holder, and all other rights and remedies of the Holder shall be preserved.


 




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(c)
Mandatory Redemption upon Bankruptcy Event of Default. Notwithstanding anything to the contrary herein, and notwithstanding
any conversion that is then required or in process, upon any Bankruptcy Event of Default, whether occurring prior to or following
the Maturity Date, the Company shall immediately pay to the Holder an amount in cash representing (i) all outstanding Principal,
accrued and unpaid Interest and accrued and unpaid Late Charges on such Principal and Interest, multiplied by (ii) the Redemption
Premium, in addition to any and all other amounts due hereunder, without the requirement for any notice or demand or other action
by the Holder or any other person or entity, provided that the Holder may, in its sole discretion, waive such right to receive
payment upon a Bankruptcy Event of Default, in whole or in part, and any such waiver shall not affect any other rights of the
Holder hereunder, including any other rights in respect of such Bankruptcy Event of Default, any right to conversion, and any
right to payment of the Event of Default Redemption Price or any other Redemption Price, as applicable.


 


5.
RIGHTS UPON FUNDAMENTAL TRANSACTION.


 


(a)
Assumption. The Company shall not enter into or be party to a Fundamental Transaction unless (i) the Successor Entity assumes
in writing all of the obligations of the Company under this Note and the other Transaction Documents in accordance with the provisions
of this Section 4(c)(a) pursuant to written agreements in form and substance satisfactory to the Holder and approved by the Holder
prior to such Fundamental Transaction, including agreements to deliver to each holder of Notes in exchange for such Notes a security
of the Successor Entity evidenced by a written instrument substantially similar in form and substance to the Notes, including,
without limitation, having a principal amount and interest rate equal to the principal amounts then outstanding and the interest
rates of the Notes held by such holder, having similar conversion rights as the Notes and having similar ranking and security
to the Notes, and satisfactory to the Holder and (ii) the Successor Entity (including its Parent Entity) is a publicly traded
corporation whose common stock is quoted on or listed for trading on an Eligible Market. Upon the occurrence of any Fundamental
Transaction, the Successor Entity shall succeed to, and be substituted for (so that from and after the date of such Fundamental
Transaction, the provisions of this Note and the other Transaction Documents referring to the “Company” shall refer
instead to the Successor Entity), and may exercise every right and power of the Company and shall assume all of the obligations
of the Company under this Note and the other Transaction Documents with the same effect as if such Successor Entity had been named
as the Company herein. Upon consummation of a Fundamental Transaction, the Successor Entity shall deliver to the Holder confirmation
that there shall be issued upon conversion or redemption of this Note at any time after the consummation of such Fundamental Transaction,
in lieu of the shares of Common Stock (or other securities, cash, assets or other property (except such items still issuable under
Sections 6 and 15, which shall continue to be receivable thereafter) issuable upon the conversion or redemption of the Notes prior
to such Fundamental Transaction, such shares of the publicly traded common stock (or their equivalent) of the Successor Entity
(including its Parent Entity) which the Holder would have been entitled to receive upon the happening of such Fundamental Transaction
had this Note been converted immediately prior to such Fundamental Transaction (without regard to any limitations on the conversion
of this Note), as adjusted in accordance with the provisions of this Note. Notwithstanding the foregoing, the Holder may elect,
at its sole option, by delivery of written notice to the Company to waive this Section 5(a) to permit the Fundamental Transaction
without the assumption of this Note. The provisions of this Section 4(c) shall apply similarly and equally to successive Fundamental
Transactions and shall be applied without regard to any limitations on the conversion of this Note.


 




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(b)
Notice of a Change of Control; Redemption Right. No sooner than twenty (20) Trading Days nor later than ten (10) Trading
Days prior to the consummation of a Change of Control (the “Change of Control Date”), but not prior to the
public announcement of such Change of Control, the Company shall deliver written notice thereof via facsimile or electronic mail
and overnight courier to the Holder (a “Change of Control Notice”). At any time during the period beginning
after the Holder’s receipt of a Change of Control Notice or the Holder becoming aware of a Change of Control if a Change
of Control Notice is not delivered to the Holder in accordance with the immediately preceding sentence (as applicable) and ending
on the later of twenty (20) Trading Days after (A) consummation of such Change of Control or (B) the date of receipt of such Change
of Control Notice, the Holder may require the Company to redeem all or any portion of this Note by delivering written notice thereof
(“Change of Control Redemption Notice”) to the Company, which Change of Control Redemption Notice shall indicate
the Conversion Amount the Holder is electing to redeem. The portion of this Note subject to redemption pursuant to this Section
4(c) shall be redeemed by the Company in cash at a price equal to the greatest of (i) the product of (w) the Change of Control
Redemption Premium multiplied by (y) the Conversion Amount being redeemed, (ii) the product of (x) the Change of Control Redemption
Premium multiplied by (y) the product of (A) the Conversion Amount being redeemed multiplied by (B) the quotient determined by
dividing (I) the greatest Closing Sale Price of the shares of Common Stock during the period beginning on the date immediately
preceding the earlier to occur of (1) the consummation of the applicable Change of Control and (2) the public announcement of
such Change of Control and ending on the date the Holder delivers the Change of Control Redemption Notice by (II) the Conversion
Price then in effect and (iii) the product of (y) the Change of Control Redemption Premium multiplied by (z) the product
of (A) the Conversion Amount being redeemed multiplied by (B) the quotient of (I) the aggregate cash consideration and the aggregate
cash value of any non-cash consideration per share of Common Stock to be paid to the holders of the shares of Common Stock upon
consummation of such Change of Control (any such non-cash consideration constituting publicly-traded securities shall be valued
at the highest of the Closing Sale Price of such securities as of the Trading Day immediately prior to the consummation of such
Change of Control, the Closing Sale Price of such securities on the Trading Day immediately following the public announcement
of such proposed Change of Control and the Closing Sale Price of such securities on the Trading Day immediately prior to the public
announcement of such proposed Change of Control) divided by (II) the Conversion Price then in effect (the “Change of
Control Redemption Price”). Redemptions required by this Section 4(c) shall be made in accordance with the provisions
of Section 11 and shall have priority to payments to stockholders in connection with such Change of Control. To the extent redemptions
required by this Section 4(c)(b) are deemed or determined by a court of competent jurisdiction to be prepayments of this Note
by the Company, such redemptions shall be deemed to be voluntary prepayments. Notwithstanding anything to the contrary in this
Section 4(c), but subject to Section 3(d), until the Change of Control Redemption Price (together with any Late Charges thereon)
is paid in full, the Conversion Amount submitted for redemption under this Section 4(c)(b) (together with any Late Charges thereon)
may be converted, in whole or in part, by the Holder into Common Stock pursuant to Section 3. In the event of a partial redemption
of this Note pursuant hereto, the Principal amount redeemed shall be deducted from the Installment Amount(s) relating to the applicable
Installment Date(s) as set forth in the Change of Control Redemption Notice. In the event of the Company’s redemption of
any portion of this Note under this Section 4(c)(b), the Holder’s damages would be uncertain and difficult to estimate because
of the parties’ inability to predict future interest rates and the uncertainty of the availability of a suitable substitute
investment opportunity for the Holder. Accordingly, any redemption premium due under this Section 4(c)(b) is intended by the parties
to be, and shall be deemed, a reasonable estimate of the Holder’s actual loss of its investment opportunity and not as a
penalty.


 




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6.
RIGHTS UPON ISSUANCE OF PURCHASE RIGHTS AND OTHER CORPORATE EVENTS.


 


(a)
Purchase Rights. In addition to any adjustments pursuant to Section 7 below, if at any time the Company grants, issues
or sells any Options, Convertible Securities or rights to purchase stock, warrants, securities or other property pro rata to all
or substantially all of the record holders of any class of Common Stock (the “Purchase Rights”), then the Holder
will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder
could have acquired if the Holder had held the number of shares of Common Stock acquirable upon complete conversion of this Note
(without taking into account any limitations or restrictions on the convertibility of this Note) immediately prior to the date
on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as
of which the record holders of shares of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights
(provided, however, that to the extent that the Holder’s right to participate in any such Purchase Right would result in
the Holder and the other Attribution Parties exceeding the Maximum Percentage, then the Holder shall not be entitled to participate
in such Purchase Right to such extent (and shall not be entitled to beneficial ownership of such shares of Common Stock as a result
of such Purchase Right (and beneficial ownership) to such extent) and such Purchase Right to such extent shall be held in abeyance
for the Holder until such time or times, if ever, as its right thereto would not result in the Holder and the other Attribution
Parties exceeding the Maximum Percentage, at which time or times the Holder shall be granted such right (and any Purchase Right
granted, issued or sold on such initial Purchase Right or on any subsequent Purchase Right to be held similarly in abeyance) to
the same extent as if there had been no such limitation).


 


(b)
Other Corporate Events. In addition to and not in substitution for any other rights hereunder, prior to the consummation
of any Fundamental Transaction pursuant to which holders of shares of Common Stock are entitled to receive securities or other
assets with respect to or in exchange for shares of Common Stock (a “Corporate Event”), the Company shall make
appropriate provision to ensure that the Holder will thereafter have the right to receive upon a conversion of this Note, at the
Holder’s option (i) in addition to the shares of Common Stock receivable upon such conversion, such securities or other
assets to which the Holder would have been entitled with respect to such shares of Common Stock had such shares of Common Stock
been held by the Holder upon the consummation of such Corporate Event (without taking into account any limitations or restrictions
on the convertibility of this Note) or (ii) in lieu of the shares of Common Stock otherwise receivable upon such conversion, such
securities or other assets received by the holders of shares of Common Stock in connection with the consummation of such Corporate
Event in such amounts as the Holder would have been entitled to receive had this Note initially been issued with conversion rights
for the form of such consideration (as opposed to shares of Common Stock) at a conversion rate for such consideration commensurate
with the Conversion Rate. Provision made pursuant to the preceding sentence shall be in a form and substance satisfactory to the
Holder. The provisions of this Section 6 shall apply similarly and equally to successive Corporate Events and shall be applied
without regard to any limitations on the conversion or redemption of this Note.


 




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7.
RIGHTS UPON ISSUANCE OF OTHER SECURITIES.


 


(a)
Adjustment of Conversion Price upon Issuance of Common Stock. If and whenever on or after the Subscription Date the Company issues
or sells, or in accordance with this Section 7(a) is deemed to have issued or sold, any shares of Common Stock (including the
issuance or sale of shares of Common Stock owned or held by or for the account of the Company, but excluding any Excluded Securities
issued or sold or deemed to have been issued or sold) for a consideration per share (the “New Issuance Price”)
less than a price equal to the Conversion Price in effect immediately prior to such issuance or sale or deemed issuance or sale
(such Conversion Price then in effect is referred to herein as the “Applicable Price”) (the foregoing a “Dilutive
Issuance”), then, immediately after such Dilutive Issuance, the Conversion Price then in effect shall be reduced to
an amount equal to the New Issuance Price. For all purposes of the foregoing (including, without limitation, determining the adjusted
Conversion Price and the New Issuance Price under this Section 7(a)), the following shall be applicable:


 


(i)
Issuance of Options. If the Company in any manner grants or sells any Options and the lowest price per share for which
one share of Common Stock is at any time issuable upon the exercise of any such Option or upon conversion, exercise or exchange
of any Convertible Securities issuable upon exercise of any such Option or otherwise pursuant to the terms thereof is less than
the Applicable Price, then such share of Common Stock shall be deemed to be outstanding and to have been issued and sold by the
Company at the time of the granting or sale of such Option for such price per share. For purposes of this Section 7(a)(i), the
“lowest price per share for which one share of Common Stock is issuable upon the exercise of any such Option or upon conversion,
exercise or exchange of any Convertible Securities issuable upon exercise of any such Option or otherwise pursuant to the terms
thereof” shall be equal to (1) the lower of (x) the sum of the lowest amounts of consideration (if any) received or receivable
by the Company with respect to any one share of Common Stock upon the granting or sale of such Option, upon exercise of such Option
and upon conversion, exercise or exchange of any Convertible Security issuable upon exercise of such Option or otherwise pursuant
to the terms thereof and (y) the lowest exercise price set forth in such Option for which one share of Common Stock is issuable
upon the exercise of any such Options or upon conversion, exercise or exchange of any Convertible Securities issuable upon exercise
of any such Option or otherwise pursuant to the terms thereof, minus (2) the sum of all amounts paid or payable to the holder
of such Option (or any other Person) upon the granting or sale of such Option, upon exercise of such Option and upon conversion,
exercise or exchange of any Convertible Security issuable upon exercise of such Option or otherwise pursuant to the terms thereof
plus the value of any other consideration received or receivable by, or benefit conferred on, the holder of such Option (or any
other Person). Except as contemplated below, no further adjustment of the Conversion Price shall be made upon the actual issuance
of such share of Common Stock or of such Convertible Securities upon the exercise of such Options or otherwise pursuant to the
terms thereof or upon the actual issuance of such shares of Common Stock upon conversion, exercise or exchange of such Convertible
Securities.


 




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(ii)
Issuance of Convertible Securities. If the Company in any manner issues or sells any Convertible Securities and the lowest
price per share for which one share of Common Stock is at any time issuable upon the conversion, exercise or exchange thereof
or otherwise pursuant to the terms thereof is less than the Applicable Price, then such share of Common Stock shall be deemed
to be outstanding and to have been issued and sold by the Company at the time of the issuance or sale of such Convertible Securities
for such price per share. For the purposes of this Section 7(a)(ii), the “lowest price per share for which one share of
Common Stock is issuable upon the conversion, exercise or exchange thereof or otherwise pursuant to the terms thereof” shall
be equal to (1) the lower of (x) the sum of the lowest amounts of consideration (if any) received or receivable by the Company
with respect to one share of Common Stock upon the issuance or sale of the Convertible Security and upon conversion, exercise
or exchange of such Convertible Security or otherwise pursuant to the terms thereof and (y) the lowest conversion price set forth
in such Convertible Security for which one share of Common Stock is issuable upon conversion, exercise or exchange thereof or
otherwise pursuant to the terms thereof minus (2) the sum of all amounts paid or payable to the holder of such Convertible Security
(or any other Person) upon the issuance or sale of such Convertible Security plus the value of any other consideration received
or receivable by, or benefit conferred on, the holder of such Convertible Security (or any other Person). Except as contemplated
below, no further adjustment of the Conversion Price shall be made upon the actual issuance of such shares of Common Stock upon
conversion, exercise or exchange of such Convertible Securities or otherwise pursuant to the terms thereof, and if any such issuance
or sale of such Convertible Securities is made upon exercise of any Options for which adjustment of the Conversion Price has been
or is to be made pursuant to other provisions of this Section 7(a), except as contemplated below, no further adjustment of the
Conversion Price shall be made by reason of such issuance or sale.


 


(iii)
Change in Option Price or Rate of Conversion. If the purchase or exercise price provided for in any Options, the additional
consideration, if any, payable upon the issue, conversion, exercise or exchange of any Convertible Securities, or the rate at
which any Convertible Securities are convertible into or exercisable or exchangeable for shares of Common Stock increases or decreases
at any time (other than proportional changes in conversion or exercise prices, as applicable, in connection with an event referred
to in Section 7(b) below), the Conversion Price in effect at the time of such increase or decrease shall be adjusted to the Conversion
Price which would have been in effect at such time had such Options or Convertible Securities provided for such increased or decreased
purchase price, additional consideration or increased or decreased conversion rate (as the case may be) at the time initially
granted, issued or sold. For purposes of this Section 7(a)(iii), if the terms of any Option or Convertible Security that was outstanding
as of the Subscription Date are increased or decreased in the manner described in the immediately preceding sentence, then such
Option or Convertible Security and the shares of Common Stock deemed issuable upon exercise, conversion or exchange thereof shall
be deemed to have been issued as of the date of such increase or decrease. No adjustment pursuant to this Section 7(a) shall be
made if such adjustment would result in an increase of the Conversion Price then in effect.


 




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(iv)
Calculation of Consideration Received. If any Option and/or Convertible Security and/or Adjustment Right is issued in connection
with the issuance or sale or deemed issuance or sale of any other securities of the Company (as determined by the Holder, the
“Primary Security”, and such Option and/or Convertible Security and/or Adjustment Right, the “Secondary
Securities”), together comprising one integrated transaction (or one or more transactions if such issuances or sales
or deemed issuances or sales of securities of the Company either (A) have at least one investor or purchaser in common, (B) are
consummated in reasonable proximity to each other and/or (C) are consummated under the same plan of financing), the consideration
per share of Common Stock with respect to such Primary Security shall be deemed to be equal to the difference of (x) the lowest
price per share for which one share of Common Stock was issued in such integrated transaction (or was deemed to be issued pursuant
to Section 7(a)(i) or 7(a)(ii) above, as applicable) solely with respect to such Primary Security, minus (y) with respect to such
Secondary Securities, the sum of (I) the Black Scholes Consideration Value of each such Option, if any, (II) the fair market value
(as determined by the Holder in good faith) or the Black Scholes Consideration Value, as applicable, of such Adjustment Right,
if any, and (III) the fair market value (as determined by the Holder) of such Convertible Security, if any, in each case, as determined
on a per share basis in accordance with this Section 7(a)(iv). If any shares of Common Stock, Options or Convertible Securities
are issued or sold or deemed to have been issued or sold for cash, the consideration received therefor (for the purpose of determining
the consideration paid for such Common Stock, Option or Convertible Security, but not for the purpose of the calculation of the
Black Scholes Consideration Value) will be deemed to be the net amount of consideration received by the Company therefor. If any
shares of Common Stock, Options or Convertible Securities are issued or sold for a consideration other than cash, the amount of
such consideration received by the Company (for the purpose of determining the consideration paid for such Common Stock, Option
or Convertible Security, but not for the purpose of the calculation of the Black Scholes Consideration Value) will be the fair
value of such consideration, except where such consideration consists of publicly traded securities, in which case the amount
of consideration received by the Company for such securities will be the arithmetic average of the VWAPs of such security for
each of the five (5) Trading Days immediately preceding the date of receipt. If any shares of Common Stock, Options or Convertible
Securities are issued to the owners of the non-surviving entity in connection with any merger in which the Company is the surviving
entity, the amount of consideration therefor (for the purpose of determining the consideration paid for such Common Stock, Option
or Convertible Security, but not for the purpose of the calculation of the Black Scholes Consideration Value) will be deemed to
be the fair value of such portion of the net assets and business of the non-surviving entity as is attributable to such shares
of Common Stock, Options or Convertible Securities (as the case may be). The fair value of any consideration other than cash or
publicly traded securities will be determined jointly by the Company and the Holder. If such parties are unable to reach agreement
within ten (10) days after the occurrence of an event requiring valuation (the “Valuation Event”), the fair
value of such consideration will be determined within five (5) Trading Days after the tenth (10th) day following such Valuation
Event by an independent, reputable appraiser jointly selected by the Company and the Holder. The determination of such appraiser
shall be final and binding upon all parties absent manifest error and the fees and expenses of such appraiser shall be borne by
the Company.


 




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(v)
Record Date. If the Company takes a record of the holders of shares of Common Stock for the purpose of entitling them (A)
to receive a dividend or other distribution payable in shares of Common Stock, Options or in Convertible Securities or (B) to
subscribe for or purchase shares of Common Stock, Options or Convertible Securities, then such record date will be deemed to be
the date of the issuance or sale of the shares of Common Stock deemed to have been issued or sold upon the declaration of such
dividend or the making of such other distribution or the date of the granting of such right of subscription or purchase (as the
case may be).


 


(b)
Adjustment of Conversion Price upon Subdivision or Combination of Common Stock. Without limiting any provision of Section
4(c) or Section 7(a), if the Company at any time on or after the Subscription Date subdivides (by any stock split, stock dividend,
stock combination, recapitalization or other similar transaction) one or more classes of its outstanding shares of Common Stock
into a greater number of shares, the Conversion Price in effect immediately prior to such subdivision will be proportionately
reduced. Without limiting any provision of Section 4(c) or Section 7(a), if the Company at any time on or after the Subscription
Date combines (by any stock split, stock dividend, stock combination, recapitalization or other similar transaction) one or more
classes of its outstanding shares of Common Stock into a smaller number of shares, the Conversion Price in effect immediately
prior to such combination will be proportionately increased. Any adjustment pursuant to this Section 7(b) shall become effective
immediately after the effective date of such subdivision or combination. If any event requiring an adjustment under this Section
7(b) occurs during the period that a Conversion Price is calculated hereunder, then the calculation of such Conversion Price shall
be adjusted appropriately to reflect such event.


 


(c)
Holder’s Right of Adjusted Conversion Price. In addition to and not in limitation of the other provisions of this
Section 7, if the Company in any manner issues or sells or enters into any agreement to issue or sell, any Common Stock, Options
or Convertible Securities (any such securities, “Variable Price Securities”), after the Subscription Date that
are issuable pursuant to such agreement or convertible into or exchangeable or exercisable for shares of Common Stock at a price
which varies or may vary with the market price of the Common Shares, including by way of one or more reset(s) to a fixed price,
but exclusive of such formulations reflecting customary anti-dilution provisions (such as share splits, share combinations, share
dividends and similar transactions) (each of the formulations for such variable price being herein referred to as, the “Variable
Price”), the Company shall provide written notice thereof via facsimile and overnight courier to the Holder on the date
of such agreement and the issuance of such Convertible Securities or Options. From and after the date the Company enters into
such agreement or issues any such Variable Price Securities, the Holder shall have the right, but not the obligation, in its sole
discretion to substitute the Variable Price for the Conversion Price upon conversion of this Note by designating in the Conversion
Notice delivered upon any conversion of this Note that solely for purposes of such conversion the Holder is relying on the Variable
Price rather than the Conversion Price then in effect. The Holder’s election to rely on a Variable Price for a particular
conversion of this Note shall not obligate the Holder to rely on a Variable Price for any future conversion of this Note.


 




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(d)
Stock Combination Event Adjustments. If at any time and from time to time on or after the Subscription Date there occurs
any stock split, stock dividend, stock combination recapitalization or other similar transaction involving the Common Stock (each,
a “Stock Combination Event”, and such date thereof, the “Stock Combination Event Date”)
and the Event Market Price is less than the Conversion Price then in effect (after giving effect to the adjustment in Section
7(b) above), then on the sixteenth (16th) Trading Day immediately following such Stock Combination Event Date, the Conversion
Price then in effect on such sixteenth (16th) Trading Day (after giving effect to the adjustment in Section 7(b) above) shall
be reduced (but in no event increased) to the Event Market Price. For the avoidance of doubt, if the adjustment in the immediately
preceding sentence would otherwise result in an increase in the Conversion Price hereunder, no adjustment shall be made.


 


(e)
Other Events. In the event that the Company (or any Subsidiary) shall take any action to which the provisions hereof are
not strictly applicable, or, if applicable, would not operate to protect the Holder from dilution or if any event occurs of the
type contemplated by the provisions of this Section 7 but not expressly provided for by such provisions (including, without limitation,
the granting of stock appreciation rights, phantom stock rights or other rights with equity features), then the Company’s
board of directors shall in good faith determine and implement an appropriate adjustment in the Conversion Price so as to protect
the rights of the Holder, provided that no such adjustment pursuant to this Section 7(e) will increase the Conversion Price as
otherwise determined pursuant to this Section 7, provided further that if the Holder does not accept such adjustments as appropriately
protecting its interests hereunder against such dilution, then the Company’s board of directors and the Holder shall agree,
in good faith, upon an independent investment bank of nationally recognized standing to make such appropriate adjustments, whose
determination shall be final and binding absent manifest error and whose fees and expenses shall be borne by the Company.


 


(f)
Calculations. All calculations under this Section 7 shall be made by rounding 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.


 


(g)
Voluntary Adjustment by Company. The Company may at any time during the term of this Note, with the prior written consent
of the Required Holders, reduce the then current Conversion Price to any amount and for any period of time deemed appropriate
by the board of directors of the Company.


 


8.
INSTALLMENT CONVERSION OR REDEMPTION.


 


(a)
General. On each applicable Installment Date, provided there has been no Equity Conditions Failure, the Company shall pay
to the Holder of this Note the applicable Installment Amount due on such date by converting such Installment Amount in accordance
with this Section 8 (a “Installment Conversion”); provided, however, that the Company may, at its option following
notice to the Holder as set forth below, pay the Installment Amount by redeeming such Installment Amount in cash (a “Installment
Redemption”) or by any combination of an Installment Conversion and an Installment Redemption so long as all of the
outstanding applicable Installment Amount due on any Installment Date shall be converted and/or redeemed by the Company on the
applicable Installment Date, subject to the provisions of this Section 8. On the date which is the twenty-first (21st) Trading
Day prior to each Installment Date (or, with respect to the initial Installment Date, the Initial Installment Notice Due Date)(each,
an “Installment Notice Due Date”), the Company shall deliver written notice (each, a “Installment
Notice” and the date all of the holders receive such notice is referred to as to the “Installment Notice Date”),
to each holder of Notes and such Installment Notice shall (i) either (A) confirm that the applicable Installment Amount of such
holder’s Note shall be converted in whole pursuant to an Installment Conversion or (B) (1) state that the Company elects
to redeem for cash, or is required to redeem for cash in accordance with the provisions of the Notes, in whole or in part, the
applicable Installment Amount pursuant to an Installment Redemption and (2) specify the portion of such Installment Amount which
the Company elects or is required to redeem pursuant to an Installment Redemption (such amount to be redeemed in cash, the “Installment
Redemption Amount”) and the portion of the applicable Installment Amount, if any, with respect to which the Company
will, and is permitted to, effect an Installment Conversion (such amount of the applicable Installment Amount so specified to
be so converted pursuant to this Section 8 is referred to herein as the “Installment Conversion Amount”), which
amounts when added together, must at least equal the entire applicable Installment Amount and (ii) if the applicable Installment
Amount is to be paid, in whole or in part, pursuant to an Installment Conversion, certify that there is not then an Equity Conditions
Failure as of the applicable Installment Notice Date. Each Installment Notice shall be irrevocable. If the Company does not timely
deliver an Installment Notice in accordance with this Section 8 with respect to a particular Installment Date, then the Company
shall be deemed to have delivered an irrevocable Installment Notice confirming an Installment Conversion of the entire Installment
Amount payable on such Installment Date and shall be deemed to have certified that there is not then an Equity Conditions Failure
in connection with such Installment Conversion. No later than three (3) Trading Days (or such earlier date as required pursuant
to the 1934 Act or other applicable law, rule or regulation for the settlement of a trade initiated on the applicable Installment
Notice Due Date of such shares of Common Stock issuable pursuant to the applicable Installment Notice) after delivery or deemed
delivery (as applicable) of the applicable Installment Notice setting forth an Installment Conversion Amount, the Company shall
deliver to the Holder’s account with DTC such number of shares of Common Stock (the “Pre-Installment Conversion
Shares”) equal to the quotient of (x) such Installment Conversion Amount divided by (y) the Pre-Installment Conversion
Price, and as to which the Holder shall be the owner thereof as of such time of delivery or deemed delivery (as the case may be)
of such Installment Notice. Except as expressly provided in this Section 8(a), the Company shall convert and/or redeem the applicable
Installment Amount of this Note pursuant to this Section 8 and the corresponding Installment Amounts of the Other Notes pursuant
to the corresponding provisions of the Other Notes in the same ratio of the applicable Installment Amount being converted and/or
redeemed hereunder. The applicable Installment Conversion Amount (whether set forth in the applicable Installment Notice or by
operation of this Section 8) shall be converted in accordance with Section 8(b) and the applicable Installment Redemption Amount
shall be redeemed in accordance with Section 8(c).


 




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(b)
Mechanics of Installment Conversion. Subject to Section 3(d), if the Company delivers an Installment Notice or is deemed
to have delivered an Installment Notice certifying that such Installment Amount is being paid, in whole or in part, in an Installment
Conversion in accordance with Section 8(a), then the remainder of this Section 8(b) shall apply. The applicable Installment Conversion
Amount, if any, shall be converted on the applicable Installment Date at the applicable Installment Conversion Price and the Company
shall, on such Installment Date, deliver to the Holder’s account with DTC such shares of Common Stock issued upon such conversion
(subject to the reduction contemplated by the immediately following sentence and, if applicable, the penultimate sentence of this
Section 8(b)), provided that the Equity Conditions are then satisfied (or waived in writing by the Holder) on such Installment
Date and an Installment Conversion is not otherwise prohibited under any other provision of this Note. The number of shares of
Common Stock to be delivered upon such Installment Conversion shall be reduced by the number of any Pre-Installment Conversion
Shares delivered in connection with such Installment Date. If an Event of Default occurs during any applicable Equity Conditions
Measuring Period, then, at the option of the Holder designated in writing to the Company, either (i) the Holder shall return to
the Company all, or any part, of such Pre-Installment Conversion Shares delivered in connection with the applicable Installment
Date or (ii) the Conversion Amount used to calculate the Event of Default Redemption Price shall be reduced by the product of
(x) the Installment Conversion Amount applicable to such Installment Date (as adjusted downward proportionally with respect to
any Pre-Installment Conversion Shares returned to the Company pursuant to clause (i) above) multiplied by (y) the Conversion Share
Ratio. If the Company confirmed (or is deemed to have confirmed by operation of Section 8(a)) the conversion of the applicable
Installment Conversion Amount, in whole or in part, and there was no Equity Conditions Failure as of the applicable Installment
Notice Date (or is deemed to have certified that the Equity Conditions in connection with any such conversion have been satisfied
by operation of Section 8(a)) but an Equity Conditions Failure occurred between the applicable Installment Notice Date and any
time through the applicable Installment Date (the “Interim Installment Period”), the Company shall provide
the Holder a subsequent notice to that effect. If there is an Equity Conditions Failure (which is not waived in writing by the
Holder) during such Interim Installment Period or an Installment Conversion is not otherwise permitted under any other provision
of this Note, then, at the option of the Holder designated in writing to the Company, the Holder may require the Company to do
any one or more of the following: (i) the Company shall redeem all or any part designated by the Holder of the unconverted Installment
Conversion Amount (such designated amount is referred to as the “Designated Redemption Amount”) and the Company
shall pay to the Holder within three (3) days of such Installment Date, by wire transfer of immediately available funds, an amount
in cash equal to 125% of such Designated Redemption Amount, and/or (ii) the Installment Conversion shall be null and void with
respect to all or any part designated by the Holder of the unconverted Installment Conversion Amount and the Holder shall be entitled
to all the rights of a holder of this Note with respect to such designated part of the Installment Conversion Amount; provided,
however, the Conversion Price for such designated part of such unconverted Installment Conversion Amount shall thereafter be adjusted
to equal the lesser of (A) the Installment Conversion Price as in effect on the date on which the Holder voided the Installment
Conversion and (B) the Installment Conversion Price that would be in effect on the date on which the Holder delivers a Conversion
Notice relating thereto as if such date was an Installment Date. In addition, if any of the Equity Conditions are not satisfied
(or waived in writing by the Holder) on such Installment Date or an Installment Conversion is not otherwise permitted under any
other provision of this Note, then, at the Holder’s option, either (I) the Holder shall return any Pre-Installment Conversion
Shares delivered in connection with the applicable Installment Date or (II) the applicable Designated Redemption Amount shall
be reduced by the product of (X) the Installment Conversion Amount applicable to such Installment Date multiplied by (Y) the Conversion
Share Ratio. If the Company fails to redeem any Designated Redemption Amount by the third (3rd) day following the applicable Installment
Date by payment of such amount by such date, then the Holder shall have the rights set forth in Section 11(a) as if the Company
failed to pay the applicable Installment Redemption Price (as defined below) and all other rights under this Note (including,
without limitation, such failure constituting an Event of Default described in Section 4(a)(vi)). Notwithstanding anything to
the contrary in this Section 8(b), but subject to 3(d), until the Company delivers Common Stock representing the Installment Conversion
Amount to the Holder, the Installment Conversion Amount may be converted by the Holder into Common Stock pursuant to Section 3.
In the event that the Holder elects to convert the Installment Conversion Amount prior to the applicable Installment Date as set
forth in the immediately preceding sentence, the Installment Conversion Amount so converted shall be deducted from the Installment
Amount(s) relating to the applicable Installment Date(s) as set forth in the applicable Conversion Notice. Notwithstanding anything
herein to the contrary, if, with respect to an Installment Date, the number of Pre-Installment Conversion Shares delivered to
the Holder exceeds the number of Post-Installment Conversion Shares with respect to such Installment Date, then the Holder shall
be entitled to keep any such excess as additional interest with respect to such Installment Amount due on such Installment Date.
The Company shall pay any and all taxes that may be payable with respect to the issuance and delivery of any shares of Common
Stock in any Installment Conversion hereunder.


 




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(c)
Mechanics of Installment Redemption. If the Company elects or is required to effect an Installment Redemption, in whole
or in part, in accordance with Section 8(a), then the Installment Redemption Amount, if any, shall be redeemed by the Company
in cash on the applicable Installment Date by wire transfer to the Holder of immediately available funds in an amount equal to
the applicable Installment Redemption Amount (the “Installment Redemption Price”). If the Company fails to
redeem such Installment Redemption Amount on such Installment Date by payment of the Installment Redemption Price, then, at the
option of the Holder designated in writing to the Company (any such designation shall be a “Conversion Notice”
for purposes of this Note), the Holder may require the Company to convert all or any part of the Installment Redemption Amount
at the Installment Conversion Price (determined as of the date of such designation as if such date were an Installment Date).
Conversions required by this Section 8(c) shall be made in accordance with the provisions of Section 3(c). Notwithstanding anything
to the contrary in this Section 8(c), but subject to Section 3(d), until the Installment Redemption Price (together with any Late
Charges thereon) is paid in full, the Installment Redemption Amount (together with any Late Charges thereon) may be converted,
in whole or in part, by the Holder into Common Stock pursuant to Section 3. In the event the Holder elects to convert all or any
portion of the Installment Redemption Amount prior to the applicable Installment Date as set forth in the immediately preceding
sentence, the Installment Redemption Amount so converted shall be deducted from the Installment Amounts relating to the applicable
Installment Date(s) as set forth in the applicable Conversion Notice. Redemptions required by this Section 8(c) shall be made
in accordance with the provisions of Section 11.


 


(d)
Deferred Installment Amount. Notwithstanding any provision of this Section 8(d) to the contrary, the Holder may, at its
option and in its sole discretion, deliver a written notice to the Company no later than the Trading Day immediately prior to
the applicable Installment Date electing to have the payment of all or any portion of an Installment Amount payable on such Installment
Date deferred (such amount deferred, the “Deferral Amount”, and such deferral, each a “Deferral“)
until any subsequent Installment Date selected by the Holder, in its sole discretion, in which case, the Deferral Amount shall
be added to, and become part of, such subsequent Installment Amount and such Deferral Amount shall continue to accrue Interest
hereunder. Any notice delivered by the Holder pursuant to this Section 8(d) shall set forth (i) the Deferral Amount and (ii) the
date that such Deferral Amount shall now be payable.


 




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(e)
Acceleration of Installment Amounts. Notwithstanding any provision of this Section 8 to the contrary, but subject to Section
3(d), if the Company delivers an Installment Notice and confirms, or is deemed to have delivered and confirmed, in whole or in
part, an Installment Conversion in accordance with Section 8(a) (each such applicable Installment Date, a “Current Installment
Date”), during the period commencing on the Installment Notice Due Date immediately prior to such applicable Current
Installment Date and ending on the Trading Day immediately prior to the next Installment Date (each, an “Installment
Period”), the Holder may elect, at its option and in its sole discretion, at one or more times in such Installment Period,
either (x) if such election is made prior to third (3rd) Trading Day immediately prior to such Current Installment Date (each,
a “Pre-Delivery Acceleration Expiration Date”), to increase the Installment Conversion Amount (and related
Installment Amount) with respect to such Current Installment Date in which case, such Acceleration Amount(s) (as defined below)
shall be added to, and become part of, the Installment Amount as such Installment Amount may have been increased pursuant to the
terms hereof, payable on such applicable Installment Date by including such Acceleration Amount(s) in the Installment Amount for
the applicable Installment Date and shall be payable in Common Stock by including such Acceleration Amount(s) in the Installment
Conversion Amount for the applicable Installment Date and (y) if such election is made on or after the Pre-Delivery Acceleration
Expiration Date, to convert other Installment Amounts as of such election date (each, an “Acceleration”, and
each such amount of acceleration or conversion, as applicable, an “Acceleration Amount”, and each such election
date, an “Acceleration Date”), in whole or in part, at the Installment Conversion Price of such Current Installment
Date (with “Installment Conversion Price” replacing “Conversion Price” and the “Acceleration Date”
replacing “Conversion Date” for all purposes hereunder with respect to such Acceleration) in accordance with the conversion
procedures set forth in Section 3 hereunder, mutatis mutandis. Any such notice delivered by the Holder (each, an “Acceleration
Notice”) shall set forth (i) the Acceleration Amount(s), (ii) the applicable Current Installment Date and (iii) the
date that such Acceleration Amount(s) should have been paid if not for the Holder’s right to accelerate such Installment
Amount(s) pursuant to this Section 8(e). To the extent more than one Installment Period exists as of an Acceleration Date, the
Holder shall also elect in such Acceleration Notice which Pre-Installment Conversion Price or Installment Conversion Price, as
applicable, that shall apply with respect to such Acceleration. The Company shall deliver Pre-Installment Conversion Shares to
the Holder with respect to any Acceleration occurring prior to the Pre-Delivery Acceleration Expiration Date related to the Current
Installment Date attributable to such Acceleration as soon as commercially practicable after the applicable Acceleration Date,
but no later than the third (3nd) Trading Day after such Acceleration Date. Subject to Section 3(d), until the Company delivers
shares of Common Stock representing the applicable Acceleration Amount to the Holder, such Acceleration Amount may be converted
by the Holder into shares of Common Stock pursuant to Section 3(c) without regard to this Section 8(e). Notwithstanding anything
to the contrary in this Section 8(e), (with respect to each period commencing on an Installment Notice Due Date (the “Current
Installment Notice Due Date”) and ending on the Trading Day immediately prior to the next Installment Notice Due Date
(each, an “Acceleration Measuring Period”), the Holder may not elect to effect an Acceleration (the “Current
Acceleration”, and such date of determination, the “Current Acceleration Determination Date”) during
such Acceleration Measuring Period if the sum of (x) the Installment Conversion Amount with respect to the Installment Date related
to such Current Acceleration (as adjusted for such Current Acceleration and any other Accelerations and Deferrals during such
Acceleration Measuring Period)and (y) the Installment Conversion Amount with respect to the Installment Date related to such Current
Acceleration (as adjusted for such Current Acceleration and any other Accelerations and Deferrals during such Acceleration Measuring
Period), collectively, exceeds five (5) times the Installment Amount with respect to the Installment Date related to such Current
Acceleration (without regard to any Accelerations or Deferrals with respect to the Installment Date related to such Current Acceleration).


 




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9.
NONCIRCUMVENTION. The Company hereby covenants and agrees that the Company will not, by amendment of its Certificate of
Incorporation (as defined in the Securities Purchase Agreement), Bylaws (as defined in the Securities Purchase Agreement) or through
any reorganization, transfer of assets, consolidation, merger, scheme of arrangement, dissolution, issue or sale of securities,
or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Note, and will
at all times in good faith carry out all of the provisions of this Note and take all action as may be required to protect the
rights of the Holder of this Note. Without limiting the generality of the foregoing or any other provision of this Note or the
other Transaction Documents, the Company (a) shall not increase the par value of any shares of Common Stock receivable upon conversion
of this Note above the Conversion Price then in effect, and (b) shall take all such actions as may be necessary or appropriate
in order that the Company may validly and legally issue fully paid and nonassessable shares of Common Stock upon the conversion
of this Note. Notwithstanding anything herein to the contrary, if after the sixty (60) calendar day anniversary of the Issuance
Date, the Holder is not permitted to convert this Note in full for any reason (other than pursuant to restrictions set forth in
Section 3(d) hereof), the Company shall use its best efforts to promptly remedy such failure, including, without limitation, obtaining
such consents or approvals as necessary to permit such conversion into shares of Common Stock.


 


10.
RESERVATION OF AUTHORIZED SHARES.


 


(a)
Reservation. So long as any Notes remain outstanding, the Company shall at all times reserve at least (i) if prior to the
first Business Day after the Stockholder Approval Date (as defined in the Securities Purchase Agreement), 130% or (ii) if on or
after the first Business Day after the Stockholder Approval Date, 200%, each case, of the maximum number of shares of Common Stock
as shall from time to time be necessary to effect the conversion, including without limitation, Installment Conversions, Alternate
Conversions and Accelerations, of all of the Notes then outstanding (without regard to any limitations on conversions and assuming
such Notes remain outstanding until the Maturity Date) (the “Required Reserve Amount”). The Required Reserve
Amount (including, without limitation, each increase in the number of shares so reserved) shall be allocated pro rata among the
holders of the Notes based on the original principal amount of the Notes held by each holder on the Closing Date or increase in
the number of reserved shares, as the case may be (the “Authorized Share Allocation”). In the event that a
holder shall sell or otherwise transfer any of such holder’s Notes, each transferee shall be allocated a pro rata portion
of such holder’s Authorized Share Allocation. Any shares of Common Stock reserved and allocated to any Person which ceases
to hold any Notes shall be allocated to the remaining holders of Notes, pro rata based on the principal amount of the Notes then
held by such holders.


.




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(b)
Insufficient Authorized Shares. If, notwithstanding Section 10(a), and not in limitation thereof, at any time while any
of the Notes remain outstanding the Company does not have a sufficient number of authorized and unreserved shares of Common Stock
to satisfy its obligation to reserve for issuance upon conversion of the Notes at least a number of shares of Common Stock equal
to the Required Reserve Amount (an “Authorized Share Failure”), then the Company shall immediately take all
action necessary to increase the Company’s authorized shares of Common Stock to an amount sufficient to allow the Company
to reserve the Required Reserve Amount for the Notes then outstanding. Without limiting the generality of the foregoing sentence,
as soon as practicable after the date of the occurrence of an Authorized Share Failure, but in no event later than sixty (60)
days after the occurrence of such Authorized Share Failure, the Company shall hold a meeting of its stockholders for the approval
of an increase in the number of authorized shares of Common Stock. In connection with such meeting, the Company shall provide
each stockholder with a proxy statement and shall use its best efforts to solicit its stockholders’ approval of such increase
in authorized shares of Common Stock and to cause its board of directors to recommend to the stockholders that they approve such
proposal. In the event that the Company is prohibited from issuing shares of Common Stock upon any conversion due to the failure
by the Company to have sufficient shares of Common Stock available out of the authorized but unissued shares of Common Stock (such
unavailable number of shares of Common Stock, the “Authorized Failure Shares”), in lieu of delivering such
Authorized Failure Shares to the Holder, the Company shall pay cash in exchange for the redemption of such portion of the Conversion
Amount convertible into such Authorized Failure Shares at a price equal to the sum of (i) the product of (x) such number of Authorized
Failure Shares and (y) the greatest Closing Sale Price of the Common Stock on any Trading Day during the period commencing on
the date the Holder delivers the applicable Conversion Notice with respect to such Authorized Failure Shares to the Company and
ending on the date of such issuance and payment under this Section 10(a); and (ii) to the extent the Holder purchases (in an open
market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale by the Holder of Authorized Failure
Shares, any brokerage commissions and other out-of-pocket expenses, if any, of the Holder incurred in connection therewith. Nothing
contained in Section 10(a) or this Section 10(b) shall limit any obligations of the Company under any provision of the Securities
Purchase Agreement.


 




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11.
REDEMPTIONS.


 


(a)
Mechanics. The Company shall deliver the applicable Event of Default Redemption Price to the Holder in cash within five
(5) Business Days after the Company’s receipt of the Holder’s Event of Default Redemption Notice. If the Holder has
submitted a Change of Control Redemption Notice in accordance with Section 5(b), the Company shall deliver the applicable Change
of Control Redemption Price to the Holder in cash concurrently with the consummation of such Change of Control if such notice
is received prior to the consummation of such Change of Control and within five (5) Business Days after the Company’s receipt
of such notice otherwise. The Company shall deliver the applicable Installment Redemption Price to the Holder in cash on the applicable
Installment Date. Notwithstanding anything herein to the contrary, in connection with any redemption hereunder at a time the Holder
is entitled to receive a cash payment under any of the other Transaction Documents, at the option of the Holder delivered in writing
to the Company, the applicable Redemption Price hereunder shall be increased by the amount of such cash payment owed to the Holder
under such other Transaction Document and, upon payment in full or conversion in accordance herewith, shall satisfy the Company’s
payment obligation under such other Transaction Document. In the event of a redemption of less than all of the Conversion Amount
of this Note, the Company shall promptly cause to be issued and delivered to the Holder a new Note (in accordance with Section
18(d)) representing the outstanding Principal which has not been redeemed. In the event that the Company does not pay the applicable
Redemption Price to the Holder within the time period required, at any time thereafter and until the Company pays such unpaid
Redemption Price in full, the Holder shall have the option, in lieu of redemption, to require the Company to promptly return to
the Holder all or any portion of this Note representing the Conversion Amount that was submitted for redemption and for which
the applicable Redemption Price (together with any Late Charges thereon) has not been paid. Upon the Company’s receipt of
such notice, (x) the applicable Redemption Notice shall be null and void with respect to such Conversion Amount, (y) the Company
shall immediately return this Note, or issue a new Note (in accordance with Section 18(d)), to the Holder, and in each case the
principal amount of this Note or such new Note (as the case may be) shall be increased by an amount equal to the difference between
(1) the applicable Redemption Price (as the case may be, and as adjusted pursuant to this Section 11, if applicable) minus (2)
the Principal portion of the Conversion Amount submitted for redemption and (z) the Conversion Price of this Note or such new
Notes (as the case may be) shall be automatically adjusted with respect to each conversion effected thereafter by the Holder to
the lowest of (A) the Conversion Price as in effect on the date on which the applicable Redemption Notice is voided, (B) 75% of
the lowest Closing Bid Price of the Common Stock during the period beginning on and including the date on which the applicable
Redemption Notice is delivered to the Company and ending on and including the date on which the applicable Redemption Notice is
voided and (C) 75% of the quotient of (I) the sum of the five (5) lowest VWAPs of the Common Stock during the twenty (20) consecutive
Trading Day period ending and including the Trading Day immediately preceding the applicable Conversion Date divided by (II) five
(5) (it being understood and agreed that all such determinations shall be appropriately adjusted for any stock dividend, stock
split, stock combination or other similar transaction during such period). The Holder’s delivery of a notice voiding a Redemption
Notice and exercise of its rights following such notice shall not affect the Company’s obligations to make any payments
of Late Charges which have accrued prior to the date of such notice with respect to the Conversion Amount subject to such notice.


 




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(b)
Redemption by Other Holders. Upon the Company’s receipt of notice from any of the holders of the Other Notes for
redemption or repayment as a result of an event or occurrence substantially similar to the events or occurrences described in
Section 4(b) or Section 5(b) (each, an “Other Redemption Notice”), the Company shall immediately, but no later
than one (1) Business Day of its receipt thereof, forward to the Holder by facsimile or electronic mail a copy of such notice.
If the Company receives a Redemption Notice and one or more Other Redemption Notices, during the seven (7) Business Day period
beginning on and including the date which is three (3) Business Days prior to the Company’s receipt of the Holder’s
applicable Redemption Notice and ending on and including the date which is three (3) Business Days after the Company’s receipt
of the Holder’s applicable Redemption Notice and the Company is unable to redeem all principal, interest and other amounts
designated in such Redemption Notice and such Other Redemption Notices received during such seven (7) Business Day period, then
the Company shall redeem a pro rata amount from each holder of the Notes (including the Holder) based on the principal amount
of the Notes submitted for redemption pursuant to such Redemption Notice and such Other Redemption Notices received by the Company
during such seven (7) Business Day period.


 


12.
VOTING RIGHTS. The Holder shall have no voting rights as the holder of this Note, except as required by law (including,
without limitation, the Delaware General Corporation Law) and as expressly provided in this Note.


 


13.
COVENANTS. Until all of the Notes have been converted, redeemed or otherwise satisfied in accordance with their terms:


 


(a)
Rank. All payments due under this Note (a) shall rank pari passu with all Other Notes and (b) shall be senior to
all other Indebtedness of the Company and its Subsidiaries.


 


(b)
Incurrence of Indebtedness. The Company shall not, and the Company shall cause each of its Subsidiaries to not, directly
or indirectly, incur or guarantee, assume or suffer to exist any Indebtedness (other than (i) the Indebtedness evidenced by this
Note and the Other Notes and (ii) other Permitted Indebtedness).


 


(c)
Existence of Liens. The Company shall not, and the Company shall cause each of its Subsidiaries to not, directly or indirectly,
allow or suffer to exist any mortgage, lien, pledge, charge, security interest or other encumbrance upon or in any property or
assets (including accounts and contract rights) owned by the Company or any of its Subsidiaries (collectively, “Liens”)
other than Permitted Liens.


 




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(d)
Restricted Payments. The Company shall not, and the Company shall cause each of its Subsidiaries to not, directly or indirectly,
redeem, defease, repurchase, repay or make any payments in respect of, by the payment of cash or cash equivalents (in whole or
in part, whether by way of open market purchases, tender offers, private transactions or otherwise), all or any portion of any
Indebtedness (other than the Notes) whether by way of payment in respect of principal of (or premium, if any) or interest on,
such Indebtedness if at the time such payment is due or is otherwise made or, after giving effect to such payment, (i) an event
constituting an Event of Default has occurred and is continuing or (ii) an event that with the passage of time and without being
cured would constitute an Event of Default has occurred and is continuing.


 


(e)
Restriction on Redemption and Cash Dividends. The Company shall not, and the Company shall cause each of its Subsidiaries
to not, directly or indirectly, redeem, repurchase or declare or pay any cash dividend or distribution on any of its capital stock.


 


(f)
Restriction on Transfer of Assets. The Company shall not, and the Company shall cause each of its Subsidiaries to not,
directly or indirectly, sell, lease, license, assign, transfer, spin-off, split-off, close, convey or otherwise dispose of any
assets or rights of the Company or any Subsidiary owned or hereafter acquired whether in a single transaction or a series of related
transactions, other than (i) sales, leases, licenses, assignments, transfers, conveyances and other dispositions of such assets
or rights by the Company and its Subsidiaries in the ordinary course of business consistent with its past practice and (ii) sales
of inventory and product in the ordinary course of business.


 


(g)
Maturity of Indebtedness. Other than with respect to the Permitted Default Indebtedness, the Company shall not, and the
Company shall cause each of its Subsidiaries to not, directly or indirectly, permit any Indebtedness of the Company or any of
its Subsidiaries to mature or accelerate prior to the Maturity Date.


 


(h)
Change in Nature of Business. The Company shall not, and the Company shall cause each of its Subsidiaries to not, directly
or indirectly, engage in any material line of business substantially different from those lines of business conducted by or publicly
contemplated to be conducted by the Company and each of its Subsidiaries on the Subscription Date or any business substantially
related or incidental thereto. The Company shall not, and the Company shall cause each of its Subsidiaries to not, directly or
indirectly, modify its or their corporate structure or purpose.


 


(i)
Preservation of Existence, Etc. The Company shall maintain and preserve, and cause each of its Subsidiaries to maintain
and preserve, its existence, rights and privileges, and become or remain, and cause each of its Subsidiaries to become or remain,
duly qualified and in good standing in each jurisdiction in which the character of the properties owned or leased by it or in
which the transaction of its business makes such qualification necessary.


 


(j)
Maintenance of Properties, Etc. Except as set forth in Schedule 13(j), the Company shall maintain and preserve, and cause
each of its Subsidiaries to maintain and preserve, all of its properties which are necessary or useful in the proper conduct of
its business in good working order and condition, ordinary wear and tear excepted, and comply, and cause each of its Subsidiaries
to comply, at all times with the provisions of all leases to which it is a party as lessee or under which it occupies property,
so as to prevent any loss or forfeiture thereof or thereunder.


 




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(k)
Maintenance of Intellectual Property. The Company will, and will cause each of its Subsidiaries to, take all action necessary
or advisable to maintain all of the Intellectual Property Rights (as defined in the Securities Purchase Agreement) of the Company
and/or any of its Subsidiaries that are necessary or material to the conduct of its business in full force and effect.


 


(l)
Maintenance of Insurance. Except as set forth in Schedule 13(l), the Company shall maintain, and cause each of its Subsidiaries
to maintain, insurance with responsible and reputable insurance companies or associations (including, without limitation, comprehensive
general liability, hazard, rent and business interruption insurance) with respect to its properties (including all real properties
leased or owned by it) and business, in such amounts and covering such risks as is required by any governmental authority having
jurisdiction with respect thereto or as is carried generally in accordance with sound business practice by companies in similar
businesses similarly situated.


 


(m)
Transactions with Affiliates. The Company shall not, nor shall it permit any of its Subsidiaries to, enter into, renew,
extend or be a party to, any transaction or series of related transactions (including, without limitation, the purchase, sale,
lease, transfer or exchange of property or assets of any kind or the rendering of services of any kind) with any affiliate, except
in the ordinary course of business in a manner and to an extent consistent with past practice and necessary or desirable for the
prudent operation of its business, for fair consideration and on terms no less favorable to it or its Subsidiaries than would
be obtainable in a comparable arm’s length transaction with a Person that is not an affiliate thereof.


 


(n)
Restricted Issuances. The Company shall not, directly or indirectly, without the prior written consent of the holders of
a majority in aggregate principal amount of the Notes then outstanding, (i) issue any Notes (other than as contemplated by the
Securities Purchase Agreement and the Notes) or (ii) issue any other securities that would cause a breach or default under the
Notes or the Warrants.


 


(o)
New Subsidiaries. Simultaneously with the acquisition or formation of each New Subsidiary, the Company shall cause such
New Subsidiary to execute, and deliver to each holder of Notes, all Security Documents (as defined in the Securities Purchase
Agreement) and Guaranties (as defined in the Securities Purchase Agreement) as requested by the Collateral Agent or the Required
Holders, as applicable. The Company shall also deliver to the Collateral Agent an opinion of counsel to such New Subsidiary that
is reasonably satisfactory to the Collateral Agent and the Required Holders covering such legal matters with respect to such New
Subsidiary becoming a guarantor of the Company’s obligations, executing and delivering the Security Document and the Guaranties
and any other matters that the Collateral Agent or the Required Holders may reasonably request. The Company shall deliver, or
cause the applicable Subsidiary to deliver to the Collateral Agent, each of the physical stock certificates of such New Subsidiary,
along with undated stock powers for each such certificates, executed in blank (or, if any such shares of capital stock are uncertificated,
confirmation and evidence reasonably satisfactory to the Collateral Agent and the Required Holders that the security interest
in such uncertificated securities has been transferred to and perfected by the Collateral Agent, in accordance with Sections 8-313,
8-321 and 9-115 of the Uniform Commercial Code or any other similar or local or foreign law that may be applicable).


 




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(p)
Change in Collateral; Collateral Records. The Company shall (i) give the Collateral Agent not less than thirty (30) days’
prior written notice of any change in the location of any Collateral (as defined in the Security Documents), other than to locations
set forth in the Perfection Certificate (as defined in the Securities Purchase Agreement) hereto and with respect to which the
Collateral Agent has filed financing statements and otherwise fully perfected its Liens thereon, (ii) advise the Collateral Agent
promptly, in sufficient detail, of any material adverse change relating to the type, quantity or quality of the Collateral or
the Lien granted thereon and (iii) execute and deliver, and cause each of its Subsidiaries to execute and deliver, to the Collateral
Agent for the benefit of the Holder and holders of the Other Notes from time to time, solely for the Collateral Agent’s
convenience in maintaining a record of Collateral, such written statements and schedules as the Collateral Agent or any Holder
may reasonably require, designating, identifying or describing the Collateral.


 


(q)
Controlled Accounts.


 


(i)
General. The Company shall establish and maintain cash management services of a type and on terms reasonably satisfactory
to Holder at and each bank listed on Schedule 13(q)(i) attached hereto (each a “Controlled Account Bank”)
and cause all cash and cash equivalents of the Company or any of its Subsidiaries to be held in Accounts (as defined in the Security
Agreement) at one or more Controlled Account Banks in accordance therewith. Subject to the foregoing, the Company shall establish
and maintain Controlled Account Agreements with the Collateral Agent (as each such term is defined in the Security Agreement)
and each Controlled Account Bank, in form and substance reasonably acceptable to the Collateral Agent and the Required Holders,
with respect to each account maintained at such bank on behalf of Company and/or its Subsidiaries (each such account a “Controlled
Account” and collectively, the “Controlled Accounts”), and the Operating Accounts (as defined below).
Each such Controlled Account Agreement shall provide, among other things, that (A) the Controlled Account Bank will comply with
any and all instructions originated by the Collateral Agent directing the disposition of the funds in the Controlled Accounts
without further consent by the Company or any such Subsidiaries, (B) the Controlled Account Bank waives, subordinates or agrees
not to exercise any rights of setoff or recoupment or any other claim against the applicable Controlled Account other than for
payment of its service fees and other charges directly related to the administration of such Controlled Account and for returned
checks or other items of payment, and (C) with respect to each Controlled Account (collectively, the “Operating Accounts”),
upon the instruction of Collateral Agent (an “Activation Instruction”), the Controlled Account Bank shall not
comply with any instructions, directions or orders of any form with respect to the Operating Accounts other than instructions,
directions or orders originated by Collateral Agent. The Collateral Agent shall not issue an Activation Instruction with respect
to the Operating Accounts unless an Event of Default has occurred and is continuing at the time such Activation Instruction is
issued.


 




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(ii)
Additional Controlled Account Agreements. If at any time on or after the Closing Date, the average daily balance of any
Account of the Company or any of its Subsidiaries that is not subject to a Controlled Account Agreement, in form and substance
reasonably satisfactory to the Collateral Agent and the Required Holders, in favor of the Collateral Agent exceeds $25,000 (the
“Maximum Per Account Free Cash Amount”) during any calendar month (including the calendar month in which the
Closing Date occurs), the Company shall either (x) within twenty-one (21) calendar days following the last day of such calendar
month, deliver to the Collateral Agent a Controlled Account Agreement, in form and substance reasonably satisfactory to the Collateral
Agent, duly executed by the Company and the depositary bank in which such Account is maintained, (y) within two (2) Business Days
following such date, effect a transfer to a Controlled Account of a cash amount sufficient to reduce the amount of the Company’s
or the applicable Subsidiary’s cash held in such Account to an amount not in excess of the Maximum Per Account Free Cash
Amount or (z) effect one or more payments from such account of a cash amount sufficient to reduce the amount of the Company’s
or the applicable Subsidiary’s cash held in such Account to an amount not in excess of the Maximum Per Account Free Cash
Amount.


 


(iii)
Maximum Free Cash Amount. Notwithstanding anything to the contrary contained in Section 13(q)(ii) above, and without limiting
any of the foregoing, if at any time on or after the date that is twenty-one (21) calendar days following the Closing Date, the
total aggregate amount of the Company’s and any of its Subsidiaries, in the aggregate, cash that is not held in a Controlled
Account exceeds $50,000 (the “Maximum Free Cash Amount”, and such accounts, the “Uncontrolled Accounts”),
the Company shall (x) within two (2) Business Days following such date, effect a transfer to a Controlled Account of a cash amount
sufficient to reduce the total aggregate amount of the Company’s and its Subsidiaries’, as applicable, cash that is
not held in a Controlled Account to an amount not in excess of the Maximum Free Cash Amount or (y) effect one or more payments
from Uncontrolled Accounts of a cash amount sufficient to reduce the amount of the Company’s or the applicable Subsidiary’s
cash held in Uncontrolled Accounts to an amount not in excess of the Maximum Free Cash Amount.


 




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(r)
Independent Investigation. At the request of the Holder either (x) at any time when an Event of Default has occurred and
is continuing, (y) upon the occurrence of an event that with the passage of time or giving of notice would constitute an Event
of Default or (z) at any time the Holder reasonably believes an Event of Default may have occurred or be continuing, the Company
shall hire an independent, reputable investment bank selected by the Company and approved by the Holder to investigate as to whether
any breach of this Note has occurred (the “Independent Investigator”). If the Independent Investigator determines
that such breach of this Note has occurred, the Independent Investigator shall notify the Company of such breach and the Company
shall deliver written notice to each holder of a Note of such breach. In connection with such investigation, the Independent Investigator
may, during normal business hours, inspect all contracts, books, records, personnel, offices and other facilities and properties
of the Company and its Subsidiaries and, to the extent available to the Company after the Company uses reasonable efforts to obtain
them, the records of its legal advisors and accountants (including the accountants’ work papers) and any books of account,
records, reports and other papers not contractually required of the Company to be confidential or secret, or subject to attorney-client
or other evidentiary privilege, and the Independent Investigator may make such copies and inspections thereof as the Independent
Investigator may reasonably request. The Company shall furnish the Independent Investigator with such financial and operating
data and other information with respect to the business and properties of the Company as the Independent Investigator may reasonably
request. The Company shall permit the Independent Investigator to discuss the affairs, finances and accounts of the Company with,
and to make proposals and furnish advice with respect thereto to, the Company’s officers, directors, key employees and independent
public accountants or any of them (and by this provision the Company authorizes said accountants to discuss with such Independent
Investigator the finances and affairs of the Company and any Subsidiaries), all at such reasonable times, upon reasonable notice,
and as often as may be reasonably requested.


 


14.
SECURITY. This Note and the Other Notes are secured to the extent and in the manner set forth in the Transaction Documents
(including, without limitation, the Security Agreement, the other Security Documents and the Guaranties).


 


15.
DISTRIBUTION OF ASSETS. In addition to any adjustments pursuant to Section 7, if the Company shall declare or make any
dividend or other distributions of its assets (or rights to acquire its assets) to any or all holders of shares of Common Stock,
by way of return of capital or otherwise (including without limitation, any distribution of cash, stock or other securities, property
or options by way of a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction)
(the “Distributions”), then the Holder will be entitled to such Distributions as if the Holder had held the
number of shares of Common Stock acquirable upon complete conversion of this Note (without taking into account any limitations
or restrictions on the convertibility of this Note) immediately prior to the date on which a record is taken for such Distribution
or, if no such record is taken, the date as of which the record holders of Common Stock are to be determined for such Distributions
(provided, however, that to the extent that the Holder’s right to participate in any such Distribution would result in the
Holder and the other Attribution Parties exceeding the Maximum Percentage, then the Holder shall not be entitled to participate
in such Distribution to such extent (and shall not be entitled to beneficial ownership of such shares of Common Stock as a result
of such Distribution (and beneficial ownership) to such extent) and the portion of such Distribution shall be held in abeyance
for the Holder until such time or times as its right thereto would not result in the Holder and the other Attribution Parties
exceeding the Maximum Percentage, at which time or times, if any, the Holder shall be granted such rights (and any rights under
this Section 15 on such initial rights or on any subsequent such rights to be held similarly in abeyance) to the same extent as
if there had been no such limitation).


 




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16.
AMENDING THE TERMS OF THIS NOTE. The prior written consent of the Holder shall be required for any change, waiver or amendment
to this Note.


 


17.
TRANSFER. This Note and any shares of Common Stock issued upon conversion of this Note may be offered, sold, assigned or
transferred by the Holder without the consent of the Company, subject only to the provisions of Section 2(g) of the Securities
Purchase Agreement.


 


18.
REISSUANCE OF THIS NOTE.


 


(a)
Transfer. If this Note is to be transferred, the Holder shall surrender this Note to the Company, whereupon the Company
will forthwith issue and deliver upon the order of the Holder a new Note (in accordance with Section 18(d)), registered as the
Holder may request, representing the outstanding Principal being transferred by the Holder and, if less than the entire outstanding
Principal is being transferred, a new Note (in accordance with Section 18(d)) to the Holder representing the outstanding Principal
not being transferred. The Holder and any assignee, by acceptance of this Note, acknowledge and agree that, by reason of the provisions
of Section 3(c)(iii) following conversion or redemption of any portion of this Note, the outstanding Principal represented by
this Note may be less than the Principal stated on the face of this Note.


 


(b)
Lost, Stolen or Mutilated Note. Upon receipt by the Company of evidence reasonably satisfactory to the Company of the loss,
theft, destruction or mutilation of this Note (as to which a written certification and the indemnification contemplated below
shall suffice as such evidence), and, in the case of loss, theft or destruction, of any indemnification undertaking by the Holder
to the Company in customary and reasonable form and, in the case of mutilation, upon surrender and cancellation of this Note,
the Company shall execute and deliver to the Holder a new Note (in accordance with Section 18(d)) representing the outstanding
Principal.


 


(c)
Note Exchangeable for Different Denominations. This Note is exchangeable, upon the surrender hereof by the Holder at the
principal office of the Company, for a new Note or Notes (in accordance with Section 18(d) and in principal amounts of at least
$1,000) representing in the aggregate the outstanding Principal of this Note, and each such new Note will represent such portion
of such outstanding Principal as is designated by the Holder at the time of such surrender.


 




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(d)
Issuance of New Notes. Whenever the Company is required to issue a new Note pursuant to the terms of this Note, such new
Note (i) shall be of like tenor with this Note, (ii) shall represent, as indicated on the face of such new Note, the Principal
remaining outstanding (or in the case of a new Note being issued pursuant to Section 18(a) or Section 18(c), the Principal designated
by the Holder which, when added to the principal represented by the other new Notes issued in connection with such issuance, does
not exceed the Principal remaining outstanding under this Note immediately prior to such issuance of new Notes), (iii) shall have
an issuance date, as indicated on the face of such new Note, which is the same as the Issuance Date of this Note, (iv) shall have
the same rights and conditions as this Note, and (v) shall represent accrued and unpaid Interest and Late Charges on the Principal
and Interest of this Note, from the Issuance Date.


 


19.
REMEDIES, CHARACTERIZATIONS, OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE RELIEF. The remedies provided in this Note shall
be cumulative and in addition to all other remedies available under this Note and any of the other Transaction Documents at law
or in equity (including a decree of specific performance and/or other injunctive relief), and nothing herein shall limit the Holder’s
right to pursue actual and consequential damages for any failure by the Company to comply with the terms of this Note. The Company
covenants to the Holder that there shall be no characterization concerning this instrument other than as expressly provided herein.
Amounts set forth or provided for herein with respect to payments, conversion and the like (and the computation thereof) shall
be the amounts to be received by the Holder and shall not, except as expressly provided herein, be subject to any other obligation
of the Company (or the performance thereof). The Company acknowledges that a breach by it of its obligations hereunder will cause
irreparable harm to the Holder and that the remedy at law for any such breach may be inadequate. The Company therefore agrees
that, in the event of any such breach or threatened breach, the Holder shall be entitled, in addition to all other available remedies,
to an injunction restraining any such breach or any such threatened breach, without the necessity of showing economic loss and
without any bond or other security being required. The Company shall provide all information and documentation to the Holder that
is requested by the Holder to enable the Holder to confirm the Company’s compliance with the terms and conditions of this
Note (including, without limitation, compliance with Section 7).


 


20.
PAYMENT OF COLLECTION, ENFORCEMENT AND OTHER COSTS. If (a) this Note is placed in the hands of an attorney for collection
or enforcement or is collected or enforced through any legal proceeding or the Holder otherwise takes action to collect amounts
due under this Note or to enforce the provisions of this Note or (b) there occurs any bankruptcy, reorganization, receivership
of the Company or other proceedings affecting Company creditors’ rights and involving a claim under this Note, then the
Company shall pay the costs incurred by the Holder for such collection, enforcement or action or in connection with such bankruptcy,
reorganization, receivership or other proceeding, including, without limitation, attorneys’ fees and disbursements. The
Company expressly acknowledges and agrees that no amounts due under this Note shall be affected, or limited, by the fact that
the purchase price paid for this Note was less than the original Principal amount hereof.


 




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21.
CONSTRUCTION; HEADINGS. This Note shall be deemed to be jointly drafted by the Company and the initial Holder and shall
not be construed against any such Person as the drafter hereof. The headings of this Note are for convenience of reference and
shall not form part of, or affect the interpretation of, this Note. Unless the context clearly indicates otherwise, each pronoun
herein shall be deemed to include the masculine, feminine, neuter, singular and plural forms thereof. The terms “including,”
“includes,” “include” and words of like import shall be construed broadly as if followed by the words
“without limitation.” The terms “herein,” “hereunder,” “hereof” and words of like
import refer to this entire Agreement instead of just the provision in which they are found. Unless expressly indicated otherwise,
all section references are to sections of this Note. Terms used in this Note and not otherwise defined herein, but defined in
the other Transaction Documents, shall have the meanings ascribed to such terms on the Closing Date in such other Transaction
Documents unless otherwise consented to in writing by the Holder.


 


22.
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 privilege. No waiver shall be effective unless it is
in writing and signed by an authorized representative of the waiving party. Notwithstanding the foregoing, nothing contained in
this Section 22 shall permit any waiver of any provision of Section 3(d).


 


23.
DISPUTE RESOLUTION.


 


(a)
Submission to Dispute Resolution.


 


(i)
In the case of a dispute relating to a Bid Price, a Closing Bid Price, a Closing Sale Price, a Conversion Price, an Installment
Conversion Price, a Pre-Installment Conversion Price, an Alternate Conversion Price, a VWAP or a fair market value or the arithmetic
calculation of a Conversion Rate, the Restricted Principal, or the applicable Redemption Price (as the case may be) (including,
without limitation, a dispute relating to the determination of any of the foregoing), the Company or the Holder (as the case may
be) shall submit the dispute to the other party via facsimile or electronic mail (A) if by the Company, within two (2) Business
Days after the occurrence of the circumstances giving rise to such dispute or (B) if by the Holder at any time after the Holder
learned of the circumstances giving rise to such dispute. If the Holder and the Company are unable to promptly resolve such dispute
relating to such Bid Price, such Closing Bid Price, such Closing Sale Price, such Conversion Price, such Installment Conversion
Price, such Pre-Installment Conversion Price, such Alternate Conversion Price, such VWAP or such fair market value, or the arithmetic
calculation of such Conversion Rate, the Restricted Principal or such applicable Redemption Price (as the case may be), at any
time after the second (2nd) Business Day following such initial notice by the Company or the Holder (as the case may be) of such
dispute to the Company or the Holder (as the case may be), then the Holder may, at its sole option, select an independent, reputable
investment bank to resolve such dispute.


 




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(ii)
The Holder and the Company shall each deliver to such investment bank (A) a copy of the initial dispute submission so delivered
in accordance with the first sentence of this Section 23 and (B) written documentation supporting its position with respect to
such dispute, in each case, no later than 5:00 p.m. (New York time) by the fifth (5th) Business Day immediately following the
date on which the Holder selected such investment bank (the “Dispute Submission Deadline”) (the documents referred
to in the immediately preceding clauses (A) and (B) are collectively referred to herein as the “Required Dispute Documentation”)
(it being understood and agreed that if either the Holder or the Company fails to so deliver all of the Required Dispute Documentation
by the Dispute Submission Deadline, then the party who fails to so submit all of the Required Dispute Documentation shall no longer
be entitled to (and hereby waives its right to) deliver or submit any written documentation or other support to such investment
bank with respect to such dispute and such investment bank shall resolve such dispute based solely on the Required Dispute Documentation
that was delivered to such investment bank prior to the Dispute Submission Deadline). Unless otherwise agreed to in writing by
both the Company and the Holder or otherwise requested by such investment bank, neither the Company nor the Holder shall be entitled
to deliver or submit any written documentation or other support to such investment bank in connection with such dispute (other
than the Required Dispute Documentation).


 


(iii)
The Company and the Holder shall cause such investment bank to determine the resolution of such dispute and notify the Company
and the Holder of such resolution no later than ten (10) Business Days immediately following the Dispute Submission Deadline.
The fees and expenses of such investment bank shall be borne solely by the Company, and such investment bank’s resolution
of such dispute shall be final and binding upon all parties absent manifest error.


 


(b)
Miscellaneous. The Company expressly acknowledges and agrees that (i) this Section 23 constitutes an agreement to arbitrate
between the Company and the Holder (and constitutes an arbitration agreement) under § 7501, et seq. of the New York Civil
Practice Law and Rules (“CPLR”) and that the Holder is authorized to apply for an order to compel arbitration
pursuant to CPLR § 7503(a) in order to compel compliance with this Section 23, (ii) a dispute relating to a Conversion Price
includes, without limitation, disputes as to (A) whether an issuance or sale or deemed issuance or sale of Common Stock occurred
under Section 7(a), (B) the consideration per share at which an issuance or deemed issuance of Common Stock occurred, (C) whether
any issuance or sale or deemed issuance or sale of Common Stock was an issuance or sale or deemed issuance or sale of Excluded
Securities, (D) whether an agreement, instrument, security or the like constitutes and Option or Convertible Security and (E)
whether a Dilutive Issuance occurred, (iii) the terms of this Note and each other applicable Transaction Document shall serve
as the basis for the selected investment bank’s resolution of the applicable dispute, such investment bank shall be entitled
(and is hereby expressly authorized) to make all findings, determinations and the like that such investment bank determines are
required to be made by such investment bank in connection with its resolution of such dispute and in resolving such dispute such
investment bank shall apply such findings, determinations and the like to the terms of this Note and any other applicable Transaction
Documents, (iv) the Holder (and only the Holder), in its sole discretion, shall have the right to submit any dispute described
in this Section 23 to any state or federal court sitting in The City of New York, Borough of Manhattan in lieu of utilizing the
procedures set forth in this Section 23 and (v) nothing in this Section 23 shall limit the Holder from obtaining any injunctive
relief or other equitable remedies (including, without limitation, with respect to any matters described in this Section 23).


 




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24.
NOTICES; CURRENCY; PAYMENTS.


 


(a)
Notices. Whenever notice is required to be given under this Note, unless otherwise provided herein, such notice shall be
given in accordance with Section 9(f) of the Securities Purchase Agreement. The Company shall provide the Holder with prompt written
notice of all actions taken pursuant to this Note, including in reasonable detail a description of such action and the reason
therefore. Without limiting the generality of the foregoing, the Company will give written notice to the Holder (i) immediately
upon any adjustment of the Conversion Price, setting forth in reasonable detail, and certifying, the calculation of such adjustment
and (ii) at least fifteen (15) days prior to the date on which the Company closes its books or takes a record (A) with respect
to any dividend or distribution upon the Common Stock, (B) with respect to any grant, issuances, or sales of any Options, Convertible
Securities or rights to purchase stock, warrants, securities or other property to holders of shares of Common Stock or (C) for
determining rights to vote with respect to any Fundamental Transaction, dissolution or liquidation, provided in each case that
such information shall be made known to the public prior to or in conjunction with such notice being provided to the Holder.


 


(b)
Currency. All dollar amounts referred to in this Note are in United States Dollars (“U.S. Dollars”),
and all amounts owing under this Note shall be paid in U.S. Dollars. All amounts denominated in other currencies (if any) shall
be converted into the U.S. Dollar equivalent amount in accordance with the Exchange Rate on the date of calculation. “Exchange
Rate” means, in relation to any amount of currency to be converted into U.S. Dollars pursuant to this Note, the U.S.
Dollar exchange rate as published in the Wall Street Journal on the relevant date of calculation (it being understood and agreed
that where an amount is calculated with reference to, or over, a period of time, the date of calculation shall be the final date
of such period of time).


 


(c)
Payments. Whenever any payment of cash is to be made by the Company to any Person pursuant to this Note, unless otherwise
expressly set forth herein, such payment shall be made in lawful money of the United States of America by a certified check drawn
on the account of the Company and sent via overnight courier service to such Person at such address as previously provided to
the Company in writing (which address, in the case of each of the Buyers, shall initially be as set forth on the Schedule of Buyers
attached to the Securities Purchase Agreement), provided that the Holder may elect to receive a payment of cash via wire transfer
of immediately available funds by providing the Company with prior written notice setting out such request and the Holder’s
wire transfer instructions. Whenever any amount expressed to be due by the terms of this Note 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. Any amount of Principal or other
amounts due under the Transaction Documents which is not paid when due shall result in a late charge being incurred and payable
by the Company in an amount equal to interest on such amount at the rate of eighteen percent (18%) per annum from the date such
amount was due until the same is paid in full (“Late Charge”).


 




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25.
CANCELLATION. After all Principal, accrued Interest, Late Charges and other amounts at any time owed on this Note have
been paid in full, this Note shall automatically be deemed canceled, shall be surrendered to the Company for cancellation and
shall not be reissued.


 


26.
WAIVER OF NOTICE. To the extent permitted by law, the Company hereby irrevocably waives demand, notice, presentment, protest
and all other demands and notices in connection with the delivery, acceptance, performance, default or enforcement of this Note
and the Securities Purchase Agreement.


 


27.
GOVERNING LAW. This Note shall be construed and enforced in accordance with, and all questions concerning the construction,
validity, interpretation and performance of this Note shall be governed by, the internal laws of the State of New York, without
giving effect to any choice of law or conflict of law provision or rule (whether of the State of New York or any other jurisdictions)
that would cause the application of the laws of any jurisdictions other than the State of New York. Except as otherwise required
by Section 23 above, the Company 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, 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 brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper. Nothing contained
herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. Nothing contained herein
shall be deemed to limit in any way any right to serve process in any manner permitted by law. Nothing contained herein (i) shall
be deemed or operate to preclude the Holder from bringing suit or taking other legal action against the Company in any other jurisdiction
to collect on the Company’s obligations to the Holder, to realize on any collateral or any other security for such obligations,
or to enforce a judgment or other court ruling in favor of the Holder or (ii) shall limit, or shall be deemed or construed to
limit, any provision of Section 23. THE COMPANY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES NOT TO REQUEST,
A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS NOTE OR ANY TRANSACTION
CONTEMPLATED HEREBY.


 




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28.
JUDGMENT CURRENCY.


 


(a)
If for the purpose of obtaining or enforcing judgment against the Company in any court in any jurisdiction it becomes necessary
to convert into any other currency (such other currency being hereinafter in this Section 28 referred to as the “Judgment
Currency”) an amount due in U.S. dollars under this Note, the conversion shall be made at the Exchange Rate prevailing
on the Trading Day immediately preceding:


 


(i)
the date actual payment of the amount due, in the case of any proceeding in the courts of New York or in the courts of any other
jurisdiction that will give effect to such conversion being made on such date: or


 


(ii)
the date on which the foreign court determines, in the case of any proceeding in the courts of any other jurisdiction (the date
as of which such conversion is made pursuant to this Section 28(a)(ii) being hereinafter referred to as the “Judgment
Conversion Date”).


 


(b)
If in the case of any proceeding in the court of any jurisdiction referred to in Section 28(a)(ii) above, there is a change in
the Exchange Rate prevailing between the Judgment Conversion Date and the date of actual payment of the amount due, the applicable
party shall pay such adjusted amount as may be necessary to ensure that the amount paid in the Judgment Currency, when converted
at the Exchange Rate prevailing on the date of payment, will produce the amount of US dollars which could have been purchased
with the amount of Judgment Currency stipulated in the judgment or judicial order at the Exchange Rate prevailing on the Judgment
Conversion Date.


 


(c)
Any amount due from the Company under this provision shall be due as a separate debt and shall not be affected by judgment being
obtained for any other amounts due under or in respect of this Note.


 


29.
SEVERABILITY. If any provision of this Note is prohibited by law or otherwise determined to be invalid or unenforceable
by a court of competent jurisdiction, the provision that would otherwise be prohibited, invalid or unenforceable shall be deemed
amended to apply to the broadest extent that it would be valid and enforceable, and the invalidity or unenforceability of such
provision shall not affect the validity of the remaining provisions of this Note so long as this Note as so modified continues
to express, without material change, the original intentions of the parties as to the subject matter hereof and the prohibited
nature, invalidity or unenforceability of the provision(s) in question does not substantially impair the respective expectations
or reciprocal obligations of the parties or the practical realization of the benefits that would otherwise be conferred upon the
parties. The parties will endeavor in good faith negotiations to replace the prohibited, invalid or unenforceable provision(s)
with a valid provision(s), the effect of which comes as close as possible to that of the prohibited, invalid or unenforceable
provision(s).


 




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30.
MAXIMUM PAYMENTS. Without limiting Section 9(d) of the Securities Purchase Agreement, nothing contained herein shall be
deemed to establish or require the payment of a rate of interest or other charges in excess of the maximum permitted by applicable
law. In the event that the rate of interest required to be paid or other charges hereunder exceed the maximum permitted by such
law, any payments in excess of such maximum shall be credited against amounts owed by the Company to the Holder and thus refunded
to the Company.


 


31.
CERTAIN DEFINITIONS. For purposes of this Note, the following terms shall have the following meanings:


 


(a)
“1933 Act” means the Securities Act of 1933, as amended, and the rules and regulations thereunder.


 


(b)
“1934 Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder.


 


(c)
“Adjustment Right” means any right granted with respect to any securities issued in connection with, or with
respect to, any issuance or sale (or deemed issuance or sale in accordance with Section 7) of shares of Common Stock (other than
rights of the type described in Section 6(a) hereof) that could result in a decrease in the net consideration received by the
Company in connection with, or with respect to, such securities (including, without limitation, any cash settlement rights, cash
adjustment or other similar rights).


 


(d)
“Affiliate” means, with respect to any Person, any other Person that directly or indirectly controls, is controlled
by, or is under common control with, such Person, it being understood for purposes of this definition that “control”
of a Person means the power directly or indirectly either to vote 10% or more of the stock having ordinary voting power for the
election of directors of such Person or direct or cause the direction of the management and policies of such Person whether by
contract or otherwise.


 


(e)
“Alternate Conversion Price” means, with respect to any Alternate Conversion that price which shall be the
lower of (i) the applicable Conversion Price as in effect on the applicable Conversion Date of the applicable Alternate Conversion
and (ii) 80% of the lowest VWAP of the Common Stock during the eight (8) consecutive Trading Day period ending and including the
Trading Day immediately preceding the delivery or deemed delivery of the applicable Conversion Notice (such period, the “Alternate
Conversion Measuring Period”). All such determinations to be appropriately adjusted for any stock dividend, stock split,
stock combination, reclassification or similar transaction that proportionately decreases or increases the Common Stock during
such Alternate Conversion Measuring Period.


 


(f)
“Approved Stock Plan” means any employee benefit plan which has been approved by the board of directors of
the Company prior to or subsequent to the Subscription Date pursuant to which shares of Common Stock and standard options to purchase
Common Stock may be issued to any consultant, attorney, accountant, employee, officer or director for services provided to the
Company in their capacity as such.


 




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(g)
“Attribution Parties” means, collectively, the following Persons and entities: (i) any investment vehicle,
including, any funds, feeder funds or managed accounts, currently, or from time to time after the Issuance Date, directly or indirectly
managed or advised by the Holder’s investment manager or any of its Affiliates or principals, (ii) any direct or indirect
Affiliates of the Holder or any of the foregoing, (iii) any Person acting or who could be deemed to be acting as a Group together
with the Holder or any of the foregoing and (iv) any other Persons whose beneficial ownership of the Company’s Common Stock
would or could be aggregated with the Holder’s and the other Attribution Parties for purposes of Section 13(d) of the 1934
Act. For clarity, the purpose of the foregoing is to subject collectively the Holder and all other Attribution Parties to the
Maximum Percentage.


 


(h)
“Black Scholes Consideration Value” means the value of the applicable Option, Convertible Security or Adjustment
Right (as the case may be) as of the date of issuance thereof calculated using the Black Scholes Option Pricing Model obtained
from the “OV” function on Bloomberg utilizing (i) an underlying price per share equal to the Closing Sale Price of
the Common Stock on the Trading Day immediately preceding the public announcement of the execution of definitive documents with
respect to the issuance of such Option, Convertible Security or Adjustment Right (as the case may be), (ii) a risk-free interest
rate corresponding to the U.S. Treasury rate for a period equal to the remaining term of such Option, Convertible Security or
Adjustment Right (as the case may be) as of the date of issuance of such Option, Convertible Security or Adjustment Right (as
the case may be), (iii) a zero cost of borrow and (iv) an expected volatility equal to the greater of 100% and the 100 day volatility
obtained from the “HVT” function on Bloomberg (determined utilizing a 365 day annualization factor) as of the Trading
Day immediately following the date of issuance of such Option, Convertible Security or Adjustment Right (as the case may be).


 


(i)
“Bloomberg” means Bloomberg, L.P.


 


(j)
“Business Day” means any day other than Saturday, Sunday or other day on which commercial banks in The City
of New York are authorized or required by law to remain closed.


 


(k)
“Change of Control” means any Fundamental Transaction other than (i) any merger of the Company or any of its,
direct or indirect, wholly-owned Subsidiaries with or into any of the foregoing Persons, (ii) any reorganization, recapitalization
or reclassification of the shares of Common Stock in which holders of the Company’s voting power immediately prior to such
reorganization, recapitalization or reclassification continue after such reorganization, recapitalization or reclassification
to hold publicly traded securities and, directly or indirectly, are, in all material respects, the holders of the voting power
of the surviving entity (or entities with the authority or voting power to elect the members of the board of directors (or their
equivalent if other than a corporation) of such entity or entities) after such reorganization, recapitalization or reclassification,
or (iii) pursuant to a migratory merger effected solely for the purpose of changing the jurisdiction of incorporation of the Company
or any of its Subsidiaries.


 




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(l)
“Change of Control Redemption Premium” means 125%.


 


(m)
“Closing Bid Price” and “Closing Sale Price” means, for any security as of any date, the
last closing bid price and last closing trade price, respectively, for such security on the Principal Market, as reported by Bloomberg,
or, if the Principal Market begins to operate on an extended hours basis and does not designate the closing bid price or the closing
trade price (as the case may be) then the last bid price or last trade price, respectively, of such security prior to 4:00:00
p.m., New York time, as reported by Bloomberg, or, if the Principal Market is not the principal securities exchange or trading
market for such security, the last closing bid price or last trade price, respectively, of such security on the principal securities
exchange or trading market where such security is listed or traded as reported by Bloomberg, or if the foregoing do not apply,
the last closing bid price or last trade price, respectively, of such security in the over-the-counter market on the electronic
bulletin board for such security as reported by Bloomberg, or, if no closing bid price or last trade price, respectively, is reported
for such security by Bloomberg, the average of the bid prices, or the ask prices, respectively, of any market makers for such
security as reported in the “pink sheets” by OTC Markets Group Inc. (formerly Pink Sheets LLC). If the Closing Bid
Price or the Closing Sale Price cannot be calculated for a security on a particular date on any of the foregoing bases, the Closing
Bid Price or the Closing Sale Price (as the case may be) of such security on such date shall be the fair market value as mutually
determined by the Company and the Holder. If the Company and the Holder are unable to agree upon the fair market value of such
security, then such dispute shall be resolved in accordance with the procedures in Section 23. All such determinations shall be
appropriately adjusted for any stock splits, stock dividends, stock combinations, recapitalizations or other similar transactions
during such period.


 


(n)
“Closing Date” shall have the meaning set forth in the Securities Purchase Agreement, which date is the date
the Company initially issued Notes pursuant to the terms of the Securities Purchase Agreement.


 


(o)
“Common Stock” means (i) the Company’s shares of common stock, $0.0001 par value per share, and (ii)
any capital stock into which such common stock shall have been changed or any share capital resulting from a reclassification
of such common stock.


 


(p)
“Conversion Share Ratio” means as to any applicable Installment Date, the quotient of (i) the number of Pre-Installment
Conversion Shares delivered in connection with such Installment Date divided by (ii) the number of Post-Installment Conversion
Shares applicable to such Installment Date.


 


(q)
“Convertible Securities” means any stock or other security (other than Options) that is at any time and under
any circumstances, directly or indirectly, convertible into, exercisable or exchangeable for, or which otherwise entitles the
holder thereof to acquire, any shares of Common Stock.


 




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(r)
“Current Subsidiary” means any Person in which the Company on the Subscription Date, directly or indirectly,
(i) owns any of the outstanding capital stock or holds any equity or similar interest of such Person or (ii) controls or operates
all or any part of the business, operations or administration of such Person, and all of the foregoing, collectively, “Current
Subsidiaries”.


 


(s)
“Eligible Market” means The New York Stock Exchange, the NYSE MKT, the Nasdaq Capital Market, the Nasdaq Global
Select Market, the Nasdaq Global Market or the Principal Market.


 


(t)
“Eligible Marketable Securities” as of any date means marketable securities which would be reflected on a consolidated
balance sheet of the Company and its Subsidiaries prepared as of such date in accordance with GAAP, and which are permitted under
the Company’s investment policies as in effect on the Issuance Date or approved thereafter by the Company’s Board
of Directors.


 


(u)
“Equity Conditions” means, with respect to an given date of determination: (i) on each day during the period
beginning thirty calendar days prior to such applicable date of determination and ending on and including such applicable date
of determination (or, with respect to the initial Installment Date, during the period beginning on the Initial Installment Notice
Due Date and ending on and including the initial Installment Date) either (x) one or more Registration Statements filed pursuant
to the Registration Rights Agreement shall be effective and the prospectus contained therein shall be available on such applicable
date of determination (with, for the avoidance of doubt, any shares of Common Stock previously sold pursuant to such prospectus
deemed unavailable) for the resale of (A) with respect to any event other than a release of Restricted Principal, all shares of
Common Stock to be issued in connection with the event requiring this determination (or issuable upon conversion of the Conversion
Amount being redeemed, as applicable) or (B) with respect to any release of Restricted Principal, all shares of Common Stock then
issuable upon conversion of the Notes, exercise of the Warrants or otherwise pursuant to the terms of the Notes (each, a “Required
Minimum Securities Amount”), in each case, in accordance with the terms of the Registration Rights Agreement and there
shall not have been during such period any Grace Periods (as defined in the Registration Rights Agreement) or (y) all Registrable
Securities shall be eligible for sale pursuant to Rule 144 (as defined in the Securities Purchase Agreement) without the need
for registration under any applicable federal or state securities laws (in each case, disregarding any limitation on conversion
of the Notes, other issuance of securities with respect to the Notes and exercise of the Warrants) and no Current Information
Failure (as defined in the Registration Rights Agreement) exists or is continuing; (ii) on each day during the period beginning
thirty calendar days prior to the applicable date of determination and ending on and including the applicable date of determination
(the “Equity Conditions Measuring Period”), the Common Stock (including all Registrable Securities) is listed
or designated for quotation (as applicable) on an Eligible Market and shall not have been suspended from trading on an Eligible
Market (other than suspensions of not more than three (3) Trading Days and occurring prior to the applicable date of determination
due to business announcements by the Company) nor shall delisting or suspension by an Eligible Market have been threatened (with
a reasonable prospect of delisting occurring after giving effect to all applicable notice, appeal, compliance and hearing periods)
or reasonably likely to occur or pending as evidenced by (A) a writing by such Eligible Market or (B) the Company falling below
the minimum listing maintenance requirements of the Eligible Market on which the Common Stock is then listed or designated for
quotation (as applicable); (iii) during the Equity Conditions Measuring Period, the Company shall have delivered all shares of
Common Stock issuable upon conversion of this Note on a timely basis as set forth in Section 3 hereof and all other shares of
capital stock required to be delivered by the Company on a timely basis as set forth in the other Transaction Documents; (iv)
any shares of Common Stock to be issued in connection with the event requiring determination (or issuable upon conversion of the
Conversion Amount being redeemed in the event requiring this determination) may be issued in full without violating Section 3(d)
hereof; (v) any shares of Common Stock to be issued in connection with the event requiring determination (or issuable upon conversion
of the Conversion Amount being redeemed in the event requiring this determination (without regards to any limitations on conversion
set forth herein)) may be issued in full without violating the rules or regulations of the Eligible Market on which the Common
Stock is then listed or designated for quotation (as applicable); (vi) on each day during the Equity Conditions Measuring Period,
no public announcement of a pending, proposed or intended Fundamental Transaction shall have occurred which has not been abandoned,
terminated or consummated; (vii) the Company shall have no knowledge of any fact that would reasonably be expected to cause (1)
any Registration Statement required to be filed pursuant to the Registration Rights Agreement to not be effective or the prospectus
contained therein to not be available for the resale of the applicable Required Minimum Securities Amount of Registrable Securities
in accordance with the terms of the Registration Rights Agreement or (2) any Registrable Securities to not be eligible for sale
pursuant to Rule 144 without the need for registration under any applicable federal or state securities laws (in each case, disregarding
any limitation on conversion of the Notes, other issuance of securities with respect to the Notes and exercise of the Warrants)
and no Current Information Failure exists or is continuing; (viii) the Holder shall not be in (and no other holder of Notes shall
be in) possession of any material, non-public information provided to any of them by the Company, any of its Subsidiaries or any
of their respective affiliates, employees, officers, representatives, agents or the like; (ix) on each day during the Equity Conditions
Measuring Period, the Company otherwise shall have been in compliance with each, and shall not have breached any representation
or warranty in any material respect (other than representations or warranties subject to material adverse effect or materiality,
which may not be breached in any respect) or any covenant or other term or condition of any Transaction Document, including, without
limitation, the Company shall not have failed to timely make any payment pursuant to any Transaction Document; (x) on each Trading
Day during the Equity Conditions Measuring Period, there shall not have occurred any Volume Failure or Price Failure as of such
applicable date of determination; (xi) on the applicable date of determination (A) no Authorized Share Failure shall exist or
be continuing and the applicable Required Minimum Securities Amount of shares of Common Stock are available under the certificate
of incorporation of the Company and reserved by the Company to be issued pursuant to the Notes and (B) all shares of Common Stock
to be issued in connection with the event requiring this determination (or issuable upon conversion of the Conversion Amount being
redeemed in the event requiring this determination (without regards to any limitations on conversion set forth herein)) may be
issued in full without resulting in an Authorized Share Failure; (xii) on each day during the Equity Conditions Measuring Period,
there shall not have occurred and there shall not exist an Event of Default or an event that with the passage of time or giving
of notice would constitute an Event of Default; and (xiii) the shares of Common Stock issuable pursuant the event requiring the
satisfaction of the Equity Conditions are duly authorized and listed and eligible for trading without restriction on an Eligible
Market.


 




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(v)
“Equity Conditions Failure” means that (i) on any day during the period commencing twenty (20) Trading Days
prior to the applicable Installment Notice Date through the later of the applicable Installment Date and the date on which the
applicable shares of Common Stock are actually delivered to the Holder, or (ii) any day during the period commencing twenty (20)
Trading Days prior to the date of the applicable Controlled Account Release Event through the date of the applicable Controlled
Account Release Event, the Equity Conditions have not been satisfied (or waived in writing by the Holder).


 


(w)
“Event Market Price” means, with respect to any Stock Combination Event Date, the quotient determined by dividing
(x) the sum of the VWAP of the Common Stock for each of the five (5) lowest Trading Days during the twenty (20) consecutive Trading
Day period ending and including the Trading Day immediately preceding the sixteenth (16th) Trading Day after such Stock Combination
Event Date, divided by (y) five (5).


 


(x)
“Excluded Securities” means (i) shares of Common Stock or standard options to purchase Common Stock issued
to consultants, attorneys, accountants, directors, officers or employees of the Company for services rendered to the Company in
their capacity as such pursuant to an Approved Stock Plan (as defined above), provided that (A) all such issuances (taking into
account the shares of Common Stock issuable upon exercise of such options) after the Subscription Date pursuant to this clause
(i) do not, in the aggregate, exceed more than 5% of the Common Stock issued and outstanding immediately prior to the Subscription
Date and (B) the exercise price of any such options is not lowered, none of such options are amended to increase the number of
shares issuable thereunder and none of the terms or conditions of any such options are otherwise materially changed in any manner
that adversely affects any of the Buyers; (ii) shares of Common Stock issued upon the conversion or exercise of Convertible Securities
(other than standard options to purchase Common Stock issued pursuant to an Approved Stock Plan that are covered by clause (i)
above) issued prior to the Subscription Date, provided that the conversion price of any such Convertible Securities (other than
standard options to purchase Common Stock issued pursuant to an Approved Stock Plan that are covered by clause (i) above) is not
lowered, none of such Convertible Securities (other than standard options to purchase Common Stock issued pursuant to an Approved
Stock Plan that are covered by clause (i) above) are amended to increase the number of shares issuable thereunder and none of
the terms or conditions of any such Convertible Securities (other than standard options to purchase Common Stock issued pursuant
to an Approved Stock Plan that are covered by clause (i) above) are otherwise materially changed in any manner that adversely
affects any of the Buyers; (iii) the shares of Common Stock issuable upon conversion of the Notes or otherwise pursuant to the
terms of the Notes; provided, that the terms of the Notes are not amended, modified or changed on or after the Subscription Date
(other than antidilution adjustments pursuant to the terms thereof in effect as of the Subscription Date), (iv) the shares of
Common Stock issuable upon exercise of the Warrants; provided, that the terms of the Warrants are not amended, modified or changed
on or after the Subscription Date (other than antidilution adjustments pursuant to the terms thereof in effect as of the Subscription
Date), (v) shares of Common Stock issued or issuable in connection with strategic alliances and strategic partnerships, provided,
that (x) the primary purpose of such issuance is not to raise capital as determined in good faith by the Required Holders, (y)
the purchaser or acquirer of the securities in such issuance solely consists of either (I) the actual operating participants in
such strategic alliance or strategic partnership or (II) the stockholders, partners or members of the foregoing Persons and (z)
the number or amount of securities issued to such Person by the Company shall not be disproportionate to such Person’s actual
participation in such strategic alliance or strategic partnership, as applicable, and (vi) unregistered shares of Common Stock
and warrants to purchase Common Stock issued by the Company in a private placement consummated on or prior to the first anniversary
of the Closing Date at a fixed price per share of Common Stock and warrant to purchase Common Stock.


 




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(y)
“Fundamental Transaction” means (A) that the Company shall, directly or indirectly, including through subsidiaries,
Affiliates or otherwise, in one or more related transactions, (i) consolidate or merge with or into (whether or not the Company
is the surviving corporation) another Subject Entity, or (ii) sell, assign, transfer, convey or otherwise dispose of all or substantially
all of the properties or assets of the Company or any of its “significant subsidiaries” (as defined in Rule 1-02 of
Regulation S-X) to one or more Subject Entities, or (iii) make, or allow one or more Subject Entities to make, or allow the Company
to be subject to or have its Common Stock be subject to or party to one or more Subject Entities making, a purchase, tender or
exchange offer that is accepted by the holders of at least either (x) 50% of the outstanding shares of Common Stock, (y) 50% of
the outstanding shares of Common Stock calculated as if any shares of Common Stock held by all Subject Entities making or party
to, or Affiliated with any Subject Entities making or party to, such purchase, tender or exchange offer were not outstanding;
or (z) such number of shares of Common Stock such that all Subject Entities making or party to, or Affiliated with any Subject
Entity making or party to, such purchase, tender or exchange offer, become collectively the beneficial owners (as defined in Rule
13d-3 under the 1934 Act) of at least 50% of the outstanding shares of Common Stock, or (iv) consummate a stock or share purchase
agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme
of arrangement) with one or more Subject Entities whereby all such Subject Entities, individually or in the aggregate, acquire,
either (x) at least 50% of the outstanding shares of Common Stock, (y) at least 50% of the outstanding shares of Common Stock
calculated as if any shares of Common Stock held by all the Subject Entities making or party to, or Affiliated with any Subject
Entity making or party to, such stock purchase agreement or other business combination were not outstanding; or (z) such number
of shares of Common Stock such that the Subject Entities become collectively the beneficial owners (as defined in Rule 13d-3 under
the 1934 Act) of at least 50% of the outstanding shares of Common Stock, or (v) reorganize, recapitalize or reclassify its Common
Stock, (B) that the Company shall, directly or indirectly, including through subsidiaries, Affiliates or otherwise, in one or
more related transactions, allow any Subject Entity individually or the Subject Entities in the aggregate to be or become the
“beneficial owner” (as defined in Rule 13d-3 under the 1934 Act), directly or indirectly, whether through acquisition,
purchase, assignment, conveyance, tender, tender offer, exchange, reduction in outstanding shares of Common Stock, merger, consolidation,
business combination, reorganization, recapitalization, spin-off, scheme of arrangement, reorganization, recapitalization or reclassification
or otherwise in any manner whatsoever, of either (x) at least 50% of the aggregate ordinary voting power represented by issued
and outstanding Common Stock, (y) at least 50% of the aggregate ordinary voting power represented by issued and outstanding Common
Stock not held by all such Subject Entities as of the date of this Warrant calculated as if any shares of Common Stock held by
all such Subject Entities were not outstanding, or (z) a percentage of the aggregate ordinary voting power represented by issued
and outstanding shares of Common Stock or other equity securities of the Company sufficient to allow such Subject Entities to
effect a statutory short form merger or other transaction requiring other shareholders of the Company to surrender their shares
of Common Stock without approval of the shareholders of the Company or (C) directly or indirectly, including through subsidiaries,
Affiliates or otherwise, in one or more related transactions, the issuance of or the entering into any other instrument or transaction
structured in a manner to circumvent, or that circumvents, the intent of this definition in which case this definition shall be
construed and implemented in a manner otherwise than in strict conformity with the terms of this definition to the extent necessary
to correct this definition or any portion of this definition which may be defective or inconsistent with the intended treatment
of such instrument or transaction.


 




    	46



    	 



    


 


(z)
“GAAP” means United States generally accepted accounting principles, consistently applied.


 


(aa)
“Group” means a “group” as that term is used in Section 13(d) of the 1934 Act and as defined in
Rule 13d-5 thereunder.


 


(bb)
“Holder Pro Rata Amount” means a fraction (i) the numerator of which is the original Principal amount of this
Note on the Closing Date and (ii) the denominator of which is the aggregate original principal amount of all Notes issued to the
initial purchasers pursuant to the Securities Purchase Agreement on the Closing Date.


 


(cc)
“Indebtedness” shall have the meaning ascribed to such term in the Securities Purchase Agreement.


 


(dd)
“Initial Installment Notice Due Date” means the earlier of (x) the Effective Date (as defined in the Registration
Rights Agreement) of the initial Registration Statement and (y) November 7, 2015.


 


(ee)
“Installment Amount” means the sum of (A) (i) with respect to any Installment Date other than the Maturity
Date, the lesser of (x) $400,000 and (y) the Principal amount then outstanding under this Note as of such Installment Date, and
(ii) with respect to the Installment Date that is the Maturity Date, the Principal amount then outstanding under this Note as
of such Installment Date (in each case, as any such Installment Amount may be reduced pursuant to the terms of this Note, whether
upon conversion, redemption or otherwise), (B) any Deferral Amount deferred pursuant to Section 8(d) and included in such Installment
Amount in accordance therewith, (C) and Accelerated Amount accelerated pursuant to Section 8(e) and included in such Installment
Amount in accordance therewith and (D) in each case of clauses (A) through (C) above, the sum of any accrued and unpaid Interest
as of such Installment Date under this Note, if any, and accrued and unpaid Late Charges, if any, under this Note as of such Installment
Date. In the event the Holder shall sell or otherwise transfer any portion of this Note, the transferee shall be allocated a pro
rata portion of the each unpaid Installment Amount hereunder.


 


(ff)
“Installment Conversion Price” means, with respect to a particular date of determination, the lowest of (i)
the Conversion Price then in effect and (ii) 80% of the quotient of (A) the sum of the VWAP of the Common Stock for each of the
three (3) lowest Trading Days during the twenty (20) consecutive Trading Day period ending and including the Trading Day immediately
prior to the applicable Installment Date, divided by (B) three (3). All such determinations to be appropriately adjusted for any
stock split, stock dividend, stock combination or other similar transaction during any such measuring period.


 


(gg)
“Installment Date” means (i) the twenty-first (21st) Trading Day after the Initial Installment Notice Due Date,
(ii) then, (x) if the first Trading Day of the calendar month immediately following the initial Installment Date occurs less than
twenty (20) Trading Days after the initial Installment Date, the first Trading Day of the second calendar month immediately following
the initial Installment Date or (y) otherwise, the first Trading Day of the calendar month immediately following the initial Installment
Date, (iii) thereafter, the first Trading Day of the calendar month immediately following the previous Installment Date until
the Maturity Date, and (iv) the Maturity Date.


 


(hh)
“Interest Date” means, with respect to any given calendar month, (x) if prior to the initial Installment Date
or after the Maturity Date, the first Trading Day of such calendar month or (y) if on or after the initial Installment Date, but
on or prior to the Maturity Date, such Installment Date, if any, in such calendar month.


 




    	47



    	 



    


 


(ii)
“Interest Rate” means eight percent (8%) per annum, as may be adjusted from time to time in accordance
with Section 2.


 


(jj)
“Investor Note” means that certain promissory note of the Holder issued to the Company at the Closing Date,
pursuant to the Securities Purchase Agreement, with an aggregate principal amount outstanding equal to the Restricted Principal
outstanding hereunder and secured by a cash amount set forth in a bank account of the Holder (or its affiliates) at least equal
to the Restricted Principal outstanding hereunder.


 


(kk)
“Investor Prepayment” means any Prepayment (as defined in the Investor Note) of the Investor Note.


 


(ll)
“Maturity Date” shall mean May 7, 2018; provided, however, the Maturity Date may be extended at the
option of the Holder (i) in the event that, and for so long as, an Event of Default shall have occurred and be continuing or any
event shall have occurred and be continuing that with the passage of time and the failure to cure would result in an Event of
Default or (ii) through the date that is twenty (20) Business Days after the consummation of a Fundamental Transaction in the
event that a Fundamental Transaction is publicly announced or a Fundamental Transaction Notice is delivered prior to the Maturity
Date, provided further that if a Holder elects to convert some or all of this Note pursuant to Section 3 hereof, and the Conversion
Amount would be limited pursuant to Section 3(d) hereunder, the Maturity Date shall automatically be extended until such time
as such provision shall not limit the conversion of this Note.


 


(mm)
“New Subsidiary” means, as of any date of determination, any Person in which the Company after the Subscription
Date, directly or indirectly, (i) owns or acquires any of the outstanding capital stock or holds any equity or similar interest
of such Person or (ii) controls or operates all or any part of the business, operations or administration of such Person, and
all of the foregoing, collectively, “New Subsidiaries”.


 


(nn)
“Options” means any rights, warrants or options to subscribe for or purchase shares of Common Stock or Convertible
Securities.


 


(oo)
“Parent Entity” of a Person means an entity that, directly or indirectly, controls the applicable Person and
whose common stock or equivalent equity security is quoted or listed on an Eligible Market, or, if there is more than one such
Person or Parent Entity, the Person or Parent Entity with the largest public market capitalization as of the date of consummation
of the Fundamental Transaction.


 


(pp)
“Permitted Indebtedness” means (i) Indebtedness evidenced by this Note and the Other Notes, (ii) Indebtedness
set forth on Schedule 3(s) to the Securities Purchase Agreement, as in effect as of the Subscription Date, (iii) Indebtedness
secured by Permitted Liens or unsecured but as described in clauses (iv) and (v) of the definition of Permitted Liens and (iv)
up to $500,000 of aggregate principal amount of Indebtedness incurred by the Company that is made expressly subordinate in right
of payment to the Indebtedness evidenced by this Note, as reflected in a written agreement acceptable to the Holder (the “Permitted
Subordinated Indebtedness”); provided that no Event of Default has occurred and is continuing (or with the passage of
time is reasonably expected to occur) at the time of issuance of such Permitted Subordinated Indebtedness.


 




    	48



    	 



    


 


(qq)
“Permitted Liens” means (i) any Lien for taxes not yet due or delinquent or being contested in good faith by
appropriate proceedings for which adequate reserves have been established in accordance with GAAP, (ii) any statutory Lien arising
in the ordinary course of business by operation of law with respect to a liability that is not yet due or delinquent, (iii) any
Lien created by operation of law, such as materialmen’s liens, mechanics’ liens and other similar liens, arising in
the ordinary course of business with respect to a liability that is not yet due or delinquent or that are being contested in good
faith by appropriate proceedings, (iv) Liens (A) upon or in any equipment acquired or held by the Company or any of its Subsidiaries
to secure the purchase price of such equipment or Indebtedness incurred solely for the purpose of financing the acquisition or
lease of such equipment, or (B) existing on such equipment at the time of its acquisition, provided that the Lien is confined
solely to the property so acquired and improvements thereon, and the proceeds of such equipment, in either case, with respect
to Indebtedness in an aggregate amount not to exceed $250,000, (v) Liens incurred in connection with the extension, renewal or
refinancing of the Indebtedness secured by Liens of the type described in clause (iv) above, provided that any extension, renewal
or replacement Lien shall be limited to the property encumbered by the existing Lien and the principal amount of the Indebtedness
being extended, renewed or refinanced does not increase, (vi) Liens in favor of customs and revenue authorities arising as a matter
of law to secure payments of custom duties in connection with the importation of goods, and (vii) Liens arising from judgments,
decrees or attachments in circumstances not constituting an Event of Default under Section 4(a)(xii).


 


(rr)
“Person” means an individual, a limited liability company, a partnership, a joint venture, a corporation, a
trust, an unincorporated organization, any other entity or a government or any department or agency thereof.


 


(ss)
“Post-Installment Conversion Shares” means that number of shares of Common Stock that would be required to
be delivered pursuant to Section 8 on an applicable Installment Date without taking into account the delivery of any Pre-Installment
Conversion Shares.


 


(tt)
“Pre-Installment Conversion Price” means, with respect to a particular date of determination, the lower of
(i) the Conversion Price then in effect and (ii) 80% of the quotient of (A) the sum of the VWAP of the Common Stock for each of
the three (3) lowest Trading Days during the twenty (20) consecutive Trading Day period ending and including the Trading Day immediately
preceding the date of the delivery or deemed delivery of the applicable Installment Notice, divided by (B) three (3). All such
determinations to be appropriately adjusted for any stock split, stock dividend, stock combination or other similar transaction
during any such measuring period.


 




    	49



    	 



    


 





(uu)
“Price Failure” means, with respect to a particular date of determination, the VWAP of the Common Stock on
any Trading Day during any Trading Day during the twenty (20) Trading Day period ending on the Trading Day immediately preceding
such date of determination fails to exceed $0.25 (as adjusted for stock splits, stock dividends, stock combinations, recapitalizations
or other similar transactions occurring after the Subscription Date). All such determinations to be appropriately adjusted for
any stock splits, stock dividends, stock combinations, recapitalizations or other similar transactions during any such measuring
period.


 


(vv)
“Principal Market” means the OTCQB.


 


(ww)
“Redemption Notices” means, collectively, the Event of Default Redemption Notices, the Installment Notices
with respect to any Installment Redemption and the Change of Control Redemption Notices, and each of the foregoing, individually,
a “Redemption Notice.”


 


(xx)
“Redemption Premium” means 125%.


 


(yy)
“Redemption Prices” means, collectively, Event of Default Redemption Prices, the Change of Control Redemption
Prices, and the Installment Redemption Prices, and each of the foregoing, individually, a “Redemption Price.”


 


(zz)
“Registration Rights Agreement” means that certain registration rights agreement, dated as of the Closing Date,
by and among the Company and the initial holders of the Notes relating to, among other things, the registration of the resale
of the Common Stock issuable upon conversion of the Notes or otherwise pursuant to the terms of the Notes and exercise of the
Warrants, as may be amended from time to time.


 


(aaa)
“Restricted Principal” means, as of any given date, the difference of (i) the Purchase Price (as defined in
the Securities Purchase Agreement), less (ii) the Cash Purchase Price (as defined in the Securities Purchase Agreement), less
(iii) all cash amounts paid to the Company (or paid at the Company’s direction) in Investor Prepayments on or prior to such
given date.


 


(bbb)
“SEC” means the United States Securities and Exchange Commission or the successor thereto.


 




    	50



    	 



    


 


(ccc)
“Securities Purchase Agreement” means that certain securities purchase agreement, dated as of the Subscription
Date, by and among the Company and the initial holders of the Notes pursuant to which the Company issued the Notes, as may be
amended from time to time.


 


(ddd)
“Security Agreement” shall have the meaning as set forth in the Securities Purchase Agreement.


 


(eee)
“Subscription Date” means May 7, 2015.


 


(fff)
“Subsidiaries” means, as of any date of determination, collectively, all Current Subsidiaries and all New Subsidiaries,
and each of the foregoing, individually, a “Subsidiary.”


 


(ggg)
“Subject Entity” means any Person, Persons or Group or any Affiliate or associate of any such Person, Persons
or Group.


 


(hhh)
“Successor Entity” means the Person (or, if so elected by the Holder, the Parent Entity) formed by, resulting
from or surviving any Fundamental Transaction or the Person (or, if so elected by the Holder, the Parent Entity) with which such
Fundamental Transaction shall have been entered into.


 


(iii)
“Trading Day” means, as applicable, (x) with respect to all price or trading volume determinations relating
to the Common Stock, any day on which the Common Stock is traded on the Principal Market, or, if the Principal Market is not the
principal trading market for the Common Stock, then on the principal securities exchange or securities market on which the Common
Stock is then traded, provided that “Trading Day” shall not include any day on which the Common Stock is scheduled
to trade on such exchange or market for less than 4.5 hours or any day that the Common Stock is suspended from trading during
the final hour of trading on such exchange or market (or if such exchange or market does not designate in advance the closing
time of trading on such exchange or market, then during the hour ending at 4:00:00 p.m., New York time) unless such day is otherwise
designated as a Trading Day in writing by the Holder or (y) with respect to all determinations other than price determinations
relating to the Common Stock, any day on which The New York Stock Exchange (or any successor thereto) is open for trading of securities.


 


(jjj)
“Volume Failure” means, with respect to a particular date of determination, the aggregate daily dollar trading
volume (as reported on Bloomberg) of the Common Stock on the Principal Market on any Trading Days during the ten (10) Trading
Day period ending on the Trading Day immediately preceding such date of determination (such period, the “Volume Failure
Measuring Period”), is less than $75,000 (as adjusted for any stock splits, stock dividends, stock combinations, recapitalizations
or other similar transactions occurring after the Subscription Date). All such determinations to be appropriately adjusted for
any stock splits, stock dividends, stock combinations, recapitalizations or other similar transactions during such Volume Failure
Measuring Period.


 


(kkk)
“Voting Stock” of a Person means capital stock of such Person of the class or classes pursuant to which the
holders thereof have the general voting power to elect, or the general power to appoint, at least a majority of the board of directors,
managers, trustees or other similar governing body of such Person (irrespective of whether or not at the time capital stock of
any other class or classes shall have or might have voting power by reason of the happening of any contingency).


 




    	51



    	 



    


 


(lll)
“VWAP” means, for any security as of any date, the dollar volume-weighted average price for such security on
the Principal Market (or, if the Principal Market is not the principal trading market for such security, then on the principal
securities exchange or securities market on which such security is then traded) during the period beginning at 9:30:01 a.m., New
York time, and ending at 4:00:00 p.m., New York time, as reported by Bloomberg through its “HP” function (set to weighted
average) or, if the foregoing does not apply, the dollar volume-weighted average price of such security in the over-the-counter
market on the electronic bulletin board for such security during the period beginning at 9:30:01 a.m., New York time, and ending
at 4:00:00 p.m., New York time, as reported by Bloomberg, or, if no dollar volume-weighted average price is reported for such
security by Bloomberg for such hours, the average of the highest closing bid price and the lowest closing ask price of any of
the market makers for such security as reported in the “pink sheets” by OTC Markets Group Inc. (formerly Pink Sheets
LLC). If the VWAP cannot be calculated for such security on such date on any of the foregoing bases, the VWAP of such security
on such date shall be the fair market value as mutually determined by the Company and the Holder. If the Company and the Holder
are unable to agree upon the fair market value of such security, then such dispute shall be resolved in accordance with the procedures
in Section 23. All such determinations shall be appropriately adjusted for any stock dividend, stock split, stock combination,
recapitalization or other similar transaction during such period.


 


(mmm)
“Warrants” has the meaning ascribed to such term in the Securities Purchase Agreement, and shall include all
warrants issued in exchange therefor or replacement thereof.


 


32.
DISCLOSURE. Upon receipt or delivery by the Company of any notice in accordance with the terms of this Note, unless the
Company has in good faith determined that the matters relating to such notice do not constitute material, non-public information
relating to the Company or any of its Subsidiaries, the Company shall within one (1) Business Day after any such receipt or delivery
publicly disclose such material, non-public information on a Current Report on Form 8-K or otherwise. In the event that the Company
believes that a notice contains material, non-public information relating to the Company or any of its Subsidiaries, the Company
so shall indicate to the Holder contemporaneously with delivery of such notice, and in the absence of any such indication, the
Holder shall be allowed to presume that all matters relating to such notice do not constitute material, non-public information
relating to the Company or any of its Subsidiaries. Nothing contained in this Section 32 shall limit any obligations of the Company,
or any rights of the Holder, under Section 4(i) of the Securities Purchase Agreement.


 


[signature
page follows]


 




    	52



    	 



    


 


IN
WITNESS WHEREOF, the Company has caused this Note to be duly executed as of the Issuance Date set out above.


 


	 	INFINITY ENERGY RESOURCES, INC.
	 	 
	 	By:	/s/
    Stanton E. Ross
	 	Name:	Stanton E. Ross
	 	Title:	 Chairman, President & CEO


 




    	53



    	 



    


 


EXHIBIT
I






INFINITY
ENERGY RESOURCES, INC.

CONVERSION NOTICE


 


Reference
is made to the Convertible Note (the “Note”) issued to the undersigned by Infinity Energy Resources, Inc.,
a Delaware corporation (the “Company”). In accordance with and pursuant to the Note, the undersigned hereby
elects to convert the Conversion Amount (as defined in the Note) of the Note indicated below into shares of Common Stock, $0.001
par value per share (the “Common Stock”), of the Company, as of the date specified below. Capitalized terms
not defined herein shall have the meaning as set forth in the Note.


 


	 	Date of Conversion:	 



 


	 	Aggregate Principal to be converted:	 



 


	 	Aggregate accrued and unpaid Interest and accrued and unpaid Late
    Charges with respect to such portion of the Aggregate Principal and such Aggregate Interest to be converted:	 



 


	 	AGGREGATE
    CONVERSION AMOUNT TO BE CONVERTED:	 



 


Please confirm the following information:  




 


	 	Conversion Price:	 



 


	 	Number of shares of Common Stock to be issued:	 



 


	 	Installment Amount(s) to be reduced (and corresponding Installment
    Date(s)) and amount of reduction:	 



 


[  ]
Check here if all or any portion of the aggregate Principal being converted includes any Restricted Principal. By checking this
box, the Holder hereby elects and agrees to effect an Investor Prepayment with respect to __________ of aggregate principal outstanding
under the Investor Note.


 


[  ]
If this Conversion Notice is being delivered with respect to an Alternate Conversion, check here if Holder is electing to use
the following Alternate Conversion Price:____________   [ ]
If this Conversion Notice is being delivered with respect to an Additional Installment Conversion, check here if Holder is electing
to use the following Installment Conversion Price:____________  
Please issue the Common Stock into which the Note is being converted to Holder, or for its benefit, as follows:


 


[  ]
Check here if requesting delivery as a certificate to the following name and to the following address: 


 
 


	 	Issue to:	 
	 	 	 
	 		
	 	 	 
	 	 	 



 


	[  ] Check here if requesting delivery by Deposit/Withdrawal
    at Custodian as follows: 	 



 


	 	DTC Participant:	 



 


	 	DTC Number:	 



 


	 	Account Number:	 


 


	Date:

	 	 
	 	 	 
	 	 	 
	Name of Registered Holder	 



 








	By: 	 	 
	Name:	 	 
	Title:	 	 
	 	 	 
	Tax ID:	 	 
	 	 	 
	Facsimile:	 	 
	 	 	 
	E-mail Address:	 







 




    	 



    	 



    


 


ACKNOWLEDGMENT


 


The
Company hereby acknowledges this Conversion Notice and hereby directs _________________ to issue the above indicated number of
shares of Common Stock in accordance with the Transfer Agent Instructions dated _____________, 20__ from the Company and acknowledged
and agreed to by ________________________.


 





	 	INFINITY ENERGY RESOURCES, INC.



 


	 	By: 	 
	 	Name:	 
	 	Title: