AMENDED
AND RESTATED

SUBSCRIPTION AGREEMENT


 


This
Amended and Restated Subscription Agreement (the “Agreement”) is made and entered into as of the 15th
day of January, 2015, by and among QUANTUM MATERIALS CORP., a Nevada corporation (the “Company”), CARSON
DIVERSIFIED INVESTMENTS, LP, a Texas limited partnership (“Carson Diversified”), and CARSON HAYSCO HOLDINGS,
LP, a Texas limited partnership (“Carson Haysco”). Carson Diversified and Carson Haysco may collectively
be referred to herein as “Investor” and amends and restates in its entirety the subscription agreement
made and entered into as of January 31, 2014 among the parties (“Original Agreement”).


 


RECITALS


 


WHEREAS,
Company, traded in the Over-the-Counter market under the symbol “QTMM”, was initially seeking in the Original Agreement
to raise up to $400,000 (the “Maximum Offering Amount”) on a “best efforts” basis with no
minimum number of securities required to be sold and raised all of such amount; and 


 


WHEREAS,
the maximum offering consisted of two Phase 1 Convertible Debentures in the amount of $200,000 each (the “Debentures”)
together with Phase 1 Warrants to purchase 5,000,000 shares of the Company’s Common Stock at an exercise price of $.06 per
share, exercisable at any time through the close of business on December 31, 2016 (the “Warrants”);
and


 


WHEREAS,
the two Phase I Debentures were acquired by Carson Diversified and Carson Haysco and they are being converted into shares of the
Company’s Common Stock pursuant to the terms thereunder contemporaneously herewith; and


 


WHEREAS,
Investor was also granted the first option for a Phase 2 Convertible Debenture up to the amount of $650,000 (the “Phase
2 Debenture”) together with Phase 2 Warrants to purchase 8,125,000 shares of the Company’s Common Stock at
an exercise price of $.06 per share (the “Phase 2 Warrants”) (the Debentures, Phase 2 Debenture, Warrants,
and Phase 2 Warrants may collectively be referred to herein as the “Securities”), which option the Investor
desires to exercise for $500,000 at this time, together with 6,250,000 Phase 2 Warrants; 


 


WHEREAS,
the Investor retains the option to fund the remaining $150,000 on the same terms upon notice from the Company for funds relating
to the Phase 2 Microreactor (as defined below); and


 


WHEREAS,
the Phase 2 Debenture shall be in the form appended hereto. The Debentures already issued provide for the holder or holders to
have the right to convert the Debenture at a conversion price of $.04 per share and the Phase 2 Debenture are convertible at a
conversion price of $.06 per share. Notwithstanding the terms of the Debentures, the interest payment dates actually used by the
Company for the Debentures has been June 15 and December 15 and each of the Debentures and each of the Phase 2 Debentures in Section
1 B thereof, is being amended to reflect such actual payment dates and the Notice of Conversion for each of the Debentures and
the Phase 2 Debentures is being amended to provide for the issuance of common stock upon conversion without a restrictive legend.


 




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AGREEMENT


 


1.       Agreements.
This Agreement, and those certain agreements including the Convertible Debentures, Common Stock Purchase Warrant, and Escrow Agreement
executed concurrently herewith shall make up the entire agreement of the parties with respect to the transactions contemplated
herein.


 


2.       Subscription.


 


(a)       On
the terms and conditions set forth in the Original Agreement, Company issued to Investor $400,000 of Phase I Convertible Debentures,
Warrants to purchase 5,000,000 shares of the Company’s Common Stock, it being understood that no fractional Warrants will
be issued and that the number of Warrants will be rounded to the nearest whole number. In the event there is more than one investor
purchasing the $400,000 of Securities, then the Securities will be issued to each investor pro rata based upon the amount invested;
and


 


(b)       On
the terms and conditions set forth in this Agreement, Company agrees to issue to Investors the number of Securities at the foot
of this Agreement. For each $1.00 of Phase 2 Debentures purchased, the Subscriber will receive Warrants to purchase 12.5 shares
of the Company’s Common Stock, it being understood that no fractional Warrants will be rounded to the nearest whole number.
In the event there is more than one investor purchasing the $500,000 of Securities, then the Securities will be issued to each
investor pro rata based upon the amount invested.


 


3.       Payment.


 


(a)       The
Original Agreement was executed and returned to the Company and Investor paid by wire transfer the amount of Four Hundred Thousand
and 00/100 Dollars ($400,000.00) to the escrow agent listed below (the “Escrow Agent”), and pursuant
to the terms of that certain Escrow Agreement executed concurrently therewith:


 


Corridor
Title


Address


Address


Attn:


Phone:


Facsimile:


ABA#
              -


For
Beneficiary -


Account
No.     -


For
further credit to


 




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The
Escrow Agent released up to $344,118 of such funds directly to “FutureChemistry” to make payment for goods and services
pertaining to the microreactor as such payments were due. The remaining $55,882 was paid directly to the Company, less wire fees
any payments authorized by Escrow Agent pursuant to the terms of the Escrow Agreement. After (a) payment of the final invoice
to FutureChemistry by Company; and (b) receipt by Company of the microreactor in good working condition, the portion of the $344,118
that was not paid to FutureChemistry, less the escrow fee of $1.00, was paid to the Company.


 


(b)       This
Agreement shall be executed and returned to the Company and Investor shall pay by wire transfer the amount of five hundred thousand
and 00/100 Dollars ($500,000) to the Escrow Agent. The Escrow Agent shall release up to $500,000 of such funds, less wire fees
and expenses of Escrow Agent as provided in the Escrow Agreement, directly to FutureChemistry with such amount to be converted
to Euros and paid out in 3 payments of 173,800 Euros, 99,600 Euros and 99,600 Euros respectively, plus any other amounts agreed
to by the Investor and the Company to make payment for goods and services pertaining to a second microreactor and related overhead
and ancillary equipment related thereto. Only after (a) payment of the final invoice to FutureChemistry, which payment shall not
occur until receipt by the title company of the Payment Affidavit as defined in the Escrow Agreement; and (b) receipt by the Company
of the second microreactor and ancillary equipment in good working condition, any portion of the $500,000 that is not paid to
FutureChemistry, less the escrow fee of $1.00, may be paid to the Company. Any interest earned on the escrow account will be repaid
to the Investor.


 


(c)       The
Company and the Investor hereby agree that the Debentures are amended to provide for interest payment dates of June 15 and December
15 and the Notice of Conversion is amended as provided in Exhibit II. The Company will issue unrestricted shares of Common
Stock to the Investor upon conversion of the Debentures if Box 3A is checked in the Notice of Conversion.


 


4.       Board
of Directors. If Investor shall convert the principal of the Debenture or the Phase 2 Debenture to shares of Company’s
Common Stock, Investor shall have the right, but not the obligation, to appoint one (1) Director to the Company’s Board
of Directors. Company shall ensure that such appointment occur not later than thirty (30) days after Investor converts the principal
of such debenture to Company’s Common Stock, and Company shall be responsible for ensuring that such appointment is made
in compliance with Company’s organizational rules and regulations, at Company’s sole expense. It is agreed that any
board member appointed by the Investor shall be reasonably satisfactory to the Company. Prior to the board member’s appointment,
the Investor shall provide to the Company’s Board of Directors the proposed nominees biographical information for the Company’s
approval and for the Company to perform a background check.


 




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5.       Phase
2 Offering. Investor will have a preferential right to fund the design, acquisition and commissioning of a second microreactor
including any related overhead and any ancillary equipment related thereto for the production of tetrapod quantum dots (collectively,
the “Phase 2 Microreactor”). The Company has provided written notice to the Investor (the “Phase
2 Notice”) of the Company’s deemed need, in Company’s sole discretion, to purchase the Phase 2 Microreactor.
The Investor has agreed to fund the Phase 2 Microreactor, and the Investor intends to close on such funding of $500,000 on or
before January 15, 2015. The Investor retains the option to fund the remaining $150,000 of the Phase 2 offering on the same terms
upon notice from the Company for funds relating to the Phase 2 Microreactor. If Investor funds the Phase 2 Microreactor, the terms
shall include payment of up to Six Hundred Fifty Thousand and 00/100 Dollars ($650,000.00) for the Phase 2 Microreactor pursuant
to the Phase 2 Debenture, convertible at $.06 per share, with the other terms of the debenture to be identical to the terms contained
in the appended Debenture as Exhibit I, including a maturity date of two (2) years from the date of the Investor’s
Phase 2 payment. Additionally, Company shall issue Phase 2 Warrants to Investor that will aggregate 8,125,000 warrants (based
upon $650,000 invested), exercisable at $.06 per share no later than two (2) years from the date of the issuance of the Phase
2 Warrants. Investor shall also have a first secured interest in the Phase 2 Microreactor for the benefit of Investor with substantially
similar terms as contained in the Debenture. If the Phase 2 Microreactor, (including any ancillary equipment related thereto)
funded through the Phase 2 Debenture, is installed into or upon real property where Company holds a leasehold estate, Company
shall, prior to such installation, execute with its Landlord an Agreement, approved by Investor, specifying the Investor’s
senior security interest in the Phase 2 Microreactor (including any ancillary equipment related thereto) funded through the Phase
2 Debenture, specifically subordinating the landlord’s liens and to protect the priority of the Investor’s senior
purchase money security interest in the Microreactor (including any ancillary equipment related thereto). The Company will issue
unrestricted shares of Common Stock to the Investor upon conversion of the Phase 2 Debentures if Box 3A is checked in the Notice
of Conversion.


 


6.       Right
to Participate in Future Offerings. Should at any time prior to December 31, 2015, Company offer to third party/ies additional
securities of Company, Company shall make a written offer to Investor on the same terms and conditions as offered to such third
party/ies (the “Offer Notice”), and Investor shall have the first right to participate in the issuance
of such additional securities. From receipt of such Offer Notice, Investor shall have ten (10) days to accept or reject such offer
in writing to Company (the “Offer Expiration Date”). Should Investor accept such offer, Investor shall
close on such offer not more than ten (10) days after the Offer Expiration Date. Notwithstanding the foregoing, Company shall
have the right to sell to third party/ies equity or debt securities of the Company without providing the Offer Notice to Investor
if such offering is for less than Twenty-Five Thousand and 00/100 Dollars ($25,000.00) at any given time, and, if such offerings
shall, in the aggregate, be less than One Hundred Thousand and 00/100 Dollars ($100,000.00).


 


7.       Representation
and Warranties of the Undersigned. The undersigned understands and acknowledges that the Securities are being offered and
sold under one or more of the exemptions from registration provided for in Section 3(b), 4(2) and 4(6) of the Securities Act of
1933, as amended (the “Act”) including, Regulation D (Rule 506) promulgated thereunder, that the undersigned
acknowledges that the Securities are being purchased without the undersigned being offered or furnished any offering literature,
prospectus or other material, financial or otherwise, and that this transaction has not been scrutinized by the United States
Securities and Exchange Commission or by any regulatory authority charged with the administration of the securities laws of any
state. The undersigned hereby further represents and warrants as follows:


 


(a)       the
undersigned confirms that he understands and has fully considered, for purposes of this investment, the risks of an investment
in the Securities and understands that: (i) this investment is suitable only for an investor who is able to bear the economic
consequences or losing his entire investment, (ii) the purchase of the Securities is a speculative investment which involves a
high degree of risk of loss by the undersigned of his entire investment;


 




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(b)       Investor
confirms that: (i) Investor is able to bear the economic risk of this investment, (ii) is able to hold the Securities for the
period of time set forth herein, (iii) Investor is presently able to afford a complete loss of his investment; (iv) Investor has
sufficient liquid assets so that the illiquidity associated with this investment will not cause any undue financial difficulties
or affect the undersigned’s ability to provide for his current needs and possible financial contingencies, and (v) that
Investor’s commitment to all speculative investments (including this one if Investor’s subscription is accepted by
the Company) is reasonable in relation to Investor’s net worth and annual income; 


 


(c)       the
undersigned has such knowledge and experience in financial and business matters and that he is capable of evaluating the merits
and risks of an investment in the Securities and of making an informed investment decision;


 


(d)
       the undersigned has had the opportunity to discuss with his representatives, including
his attorney and/or his accountant, if any, the tax consequences of his investment in the Securities;


 


(e)       the
Securities are being acquired by the undersigned solely for his own personal account, for investment purposes only, and not with
a view to, or in connection with, any resale or distribution thereof; the undersigned has no contract, undertaking, understanding,
agreement or arrangement, formal or informal, with any person to sell, transfer or pledge to any person the Securities for which
he hereby subscribes, any part thereof, any interest therein or any rights thereto; the undersigned has no present plans to enter
into any such contract, undertaking, agreement or arrangement; and he understands the legal consequences of the foregoing representations
and warranties to mean that he must bear the economic risk of the investment for an indefinite period of time because the Securities
have not been registered under the Act and, therefore, cannot be sold unless they are subsequently registered under the Act or
unless an exemption from such registration is available; the Securities will be considered “Restricted Securities”
for purposes of Rule 144 promulgated under the Act;


 


(f)       the
undersigned understands that no Federal or state agency has passed on or made any recommendation or endorsement of the Securities
and that the Company is relying on the truth and accuracy of the representations, declarations and warranties herein made by undersigned
in offering the Securities for sale to the undersigned without having first registered the Securities under the Act;


 


(g)       the
undersigned has read the Company’s public filings, including without limitation, the Company’s Form 10-K for the fiscal
year ended June 30, 2014, Form 10-Q for the quarter ended September 30, 2014 filed with the Securities and Exchange Commission.
The undersigned has had the opportunity to ask questions and receive answers about the Company from Stephen Squires, the Company’s
Chief Executive Officer.


 




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(h)       the
undersigned consents to the placement of a legend on the Securities as required by applicable securities laws, including legends
in form substantially as follows:


 


THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE “ACT”), OR UNDER ANY STATE SECURITIES LAW, AND NO INTEREST THEREIN MAY BE SOLD, DISTRIBUTED,
ASSIGNED, OFFERED, PLEDGED OR OTHERWISE TRANSFERRED, AND THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD UNLESS:
(1) A REGISTRATION STATEMENT WITH RESPECT THERETO IS EFFECTIVE UNDER THE ACT AND ANY APPLICABLE STATE SECURITIES LAW OR (2) THE
COMPANY RECEIVES AN OPINION OF LEGAL COUNSEL TO THE COMPANY OR OTHER COUNSEL TO THE HOLDER OF THESE SECURITIES (CONCURRED IN BY
LEGAL COUNSEL TO THE COMPANY), STATING THAT SUCH TRANSACTION IS EXEMPT FROM REGISTRATION UNDER THE ACT AND APPLICABLE STATE SECURITIES
LAWS. BY ACQUIRING THIS CERTIFICATE, THE HOLDER REPRESENTS THAT THE HOLDER HAS ACQUIRED SUCH CERTIFICATE FOR INVESTMENT AND THAT
THE HOLDER WILL NOT SELL OR OTHERWISE DISPOSE OF THIS CERTIFICATE OR THE SHARES REPRESENTED THEREBY, WITHOUT REGISTRATION OR OTHER
COMPLIANCE WITH THE ACT AND THE RULES AND REGULATIONS THEREUNDER.


 


(i)       The
undersigned has not engaged any broker, dealer; finder, commission agent or other similar person in connection with the offer,
offer for sale, or sale of the Securities and is under no obligation to pay any broker’s fee, or commission in connection
with his investment.


 


The
foregoing representations and warranties are made by the undersigned with the intent that they may be relied upon in determining
his suitability as an investor in the Company and the undersigned hereby agrees that such representations and warranties shall
survive the sale by the Company to the undersigned of the Securities.


 


8.       Representations
and Warranties of the Company. 


 


(a)       Organization.
The Company is duly formed, validly existing and in good standing under the laws of the State of Nevada.


 


(b)       Authorization.
The Company has all requisite power and authority to carry on its business as now being conducted, execute and deliver this Agreement,
perform its obligations hereunder and consummate the transactions contemplated hereby. The execution and delivery by the Company
of this Agreement and the consummation of the transactions contemplated hereby have been duly and validly authorized by all necessary
action on the part of the Company. This Agreement has been duly and validly executed and delivered by the Company. This Agreement
constitutes the valid and legally binding obligation of the Company, enforceable against the Company in accordance
with its terms, assuming the due authorization, execution and delivery by the Investor.


 




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(c)       Authorization
of Securities. All of the Securities to be issued pursuant to this Agreement, when issued and delivered in accordance with
this Agreement, will be (i) duly authorized, validly issued and fully paid; and (ii) free and clear of any and all pledges, liens
and encumbrances other than under this Agreement and Debenture, and any restrictions on transfer under any applicable federal
and state securities laws.


 


(d)       Noncontravention.
The execution and delivery by the Company of this Agreement and the other documents contemplated hereby to which the Company is
a party and the fulfillment and compliance with the respective terms hereof and thereby by the Company do not and shall not (a)
conflict with or result in a breach of the terms, conditions or provisions of, (b) constitute a default under (whether with or
without the passage of time, the giving of notice or both), (c) give any third party the right to modify, terminate or accelerate
any obligation under, (d) result in a violation of, or (e) require any authorization, consent, approval, exemption or other action
of or by or notice or declaration to, or filing with, any third party or any court or administrative or governmental body or agency
pursuant to, any of the Company’s governing documents, or any law, statute, rule or regulation to which the Company is subject.


 


9.       Transferability.
The undersigned agrees not to transfer or assign this Agreement, or any of his interest herein, and Securities acquired pursuant
hereto shall be made only in accordance with all applicable laws.


 


10.       Revocation.
The undersigned agrees that he may not cancel, terminate or revoke this Agreement or any agreement of the undersigned made hereunder
and that this Agreement shall survive the death or disability of the undersigned and shall be binding upon the undersigned’s
heirs, executors, administrators, successors and assigns.


 


11.       No
Waiver. Notwithstanding any of the representations, warranties, acknowledgments or agreements made herein by the undersigned,
the undersigned does not waive any rights granted to him under Federal or state securities laws.


 


12.       Acknowledgments
of the Undersigned. The undersigned acknowledges that there have been no representations, guarantees or warranties made to
him by the Company, its agents or employees, or by other person, expressly or implication, of any nature or kind.


 


13.       Continuing
Effect of Representations, Warranties and Acknowledgments. The representations and warranties of Paragraph 7 and the acknowledgments
of Paragraph 8 are true and accurate as of the date of this Agreement and shall be true and accurate as of the date of delivery
to and acceptance by the Company, and shall survive such delivery and acceptance. If, in any respect such representations, warranties
and acknowledgments shall not be true and accurate prior to such delivery and acceptance, the undersigned and/or Company shall
give immediate written notice of such fact to the other party specifying which representations and warranties and acknowledgments
are not true and accurate and the reasons therefore.


 




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14.       Miscellaneous.


 


(a)       All
notices or other communications given or made hereunder shall be in writing and shall be delivered or mailed by registered or
certified mail, return receipt requested, postage prepaid, to the undersigned at the address set forth below or to the Company
at the address set forth above.


 


(b)       This
Agreement shall be governed by and construed in accordance with laws of the State of Texas, excluding its conflicts of laws rules,
and the federal laws of United States applicable therein.


 


(c)       This
Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof and may be amended only
be a writing executed by the parties.


 




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IN
WITNESS WHEREOF, the undersigned has hereby executed this Agreement on the date written below.


 


Total
Dollar Amount of Investment and Debenture: $500,000;


 


Number
of Warrants Subscribed for exercisable at $.06 per share : 6,250,000


 


Date
of Investment: January 15, 2015


 


	Exact
    name(s) of Subscriber(s) (please print):	 	CARSON
    DIVERSIFIED INVESTMENTS, LP, a Texas limited partnership
	 	 	 
	 	 	By:
    Carson Diversified GP, LLC, a Texas limited liability company, its General Partner
	 	 	 
	 	By:	
	 	 	W.C.
Carson, Manager 
	 	 	 
	Taxpayer
    Identification Number:	 	 
	 	 	 
	 	 	CARSON
    HAYSCO HOLDINGS, LP, a Texas limited partnership
	 	 	 
	 	 	By:
    Carson Diversified GP, LLC, a Texas limited liability company, its General Partner
	 	 	 
	 	By:	
	 	 	W.C.
Carson, Manager
	 	 	 
	Taxpayer
    Identification Number:	 	 


 




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QUANTUM
MATERIALS CORP. hereby accepts the foregoing subscription subject to the terms and conditions hereof as of the 15th day of January,
2015 (the “Effective Date”).


 


	 	QUANTUM MATERIALS CORP.
	 	 	 
	 	By:
	 
	 	 	Stephen
B. Squires
	 	 	Chief
    Executive Officer



 



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EXHIBIT
I to Amended and Restated

Subscription Agreement


 


Form
of Debenture


 


NEITHER
THIS CONVERTIBLE DEBENTURE NOR THE SECURITIES INTO WHICH THIS CONVERTIBLE DEBENTURE MAY BE CONVERTED HAVE BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (“ACT”), THE TEXAS SECURITIES ACT OF 1957, AS AMENDED (“CODE”)
OR ANY OTHER APPLICABLE STATE SECURITIES LAW. NEITHER THIS CONVERTIBLE DEBENTURE NOR THE SECURITIES INTO WHICH THIS CONVERTIBLE
DEBENTURE MAY BE CONVERTED MAY BE OFFERED FOR SALE, SOLD, TRANSFERRED, ASSIGNED, DONATED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED
OF IN THE ABSENCE OF A REGISTRATION OF THE SAME UNDER THE ACT, THE CODE AND ANY OTHER APPLICABLE STATE SECURITIES LAW, UNLESS
A LEGAL OPINION ACCEPTABLE TO THE ISSUER AND ITS COUNSEL THAT REGISTRATION IS NOT REQUIRED UNDER THE ACT, THE CODE OR ANY OTHER
APPLICABLE STATE SECURITIES LAW IS PROVIDED TO AND APPROVED BY THE ISSUER PRIOR TO ANY ATTEMPTED DISPOSITION.


 


CONVERTIBLE
DEBENTURE


 


	$_____________	January
    15, 2015 (the “Issue Date”)


 


FOR
VALUE RECEIVED, and pursuant to a Subscription Agreement dated the date hereof (the “Subscription Agreement”),
Quantum Materials Corp., a Nevada corporation with offices at 3055 Hunter Road, San Marcos, Texas 78666 (hereinafter referred
to as the “Payor”, the “Company” or “Quantum”),
agrees to pay to the order of ____________________, a ____________________ (hereinafter referred to as the “Payee”
or “Holder”), in the manner hereinafter set forth under this Convertible Debenture (the “Debenture”),
unless earlier converted or accelerated in accordance with the terms of this Debenture, the principal sum of ____________________
($____________________) with interest on the aforesaid amount as set forth herein, which Debenture shall be payable as follows:


 


1.       Interest.


 


(A)       Interest
on the unpaid principal balance of this Debenture shall be calculated commencing upon the date hereof and shall, prior to the
occurrence of an Event of Default, be at the rate of eight (8%) percent per annum.


 


(B)       Interest
shall be payable semi-annually on June 15 and December 15 of each year commencing on June 15, 2015 until and including the Maturity
Date as set forth in Article 2 of this Debenture or earlier conversion pursuant to Article 3 of this Debenture. Interest shall
be payable in the Payee’s sole and absolute discretion either in cash or restricted shares of the Company’s Common
Stock, based upon a conversion price of $.06 per share (the “Common Stock”).


 


(C)       Any
amount of principal or interest on this Debenture which is not paid when due shall bear interest from the date due until such
past due amount is paid at a rate of interest equal to the highest non-usurious rate permitted by applicable law (the “Default
Rate”).


 


(D)       All
payments of principal and interest on this Debenture shall be made in lawful money of the United States of America by wire transfer
to the Payee’s wire instructions as provided by Payee to Payor from time to time, or such other account as the Payee may
designate by written notice to the Payor from time to time in accordance with the provisions of this Debenture. All payments hereunder
shall be applied first towards costs and expenses due under this Debenture, second towards the payment of accrued and unpaid interest
under this Debenture, and third towards the principal outstanding hereunder.


 




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2.       Maturity.


 


(A)       Subject
to conversion pursuant to Article 4 of this Debenture, the principal sum outstanding under this Debenture, together with accrued
and unpaid interest thereon, shall be due and payable on January 15, 2017 (the “Maturity Date”).


 


(B)       The
Company may prepay any portion of the principal amount of this Debenture at any time, from time to time, in whole or in part,
without the prior written consent of Payee. Notwithstanding the foregoing, Company must give Payee ten (10) days prior written
notice of its intent to prepay, and the amount of such intended prepayment (the “Prepayment Amount”).
Upon receipt of such notice, Payee shall have the right to convert the Prepayment Amount to Shares at the Conversion Price (as
defined in Paragraph 4 below) in accordance with the terms of Conversion described in Paragraph 4 below.


 


3.       Secured
Interest.


 


(A)       Company
hereby grants to Payee a security interest in that certain microreactor equipment and any related ancillary equipment purchased
from FutureChemistry with funds directed from that certain Escrow Agreement of even date herewith (collectively, the “Microreactor”)
to secure the payment of the indebtedness and obligations of this Debenture. Company authorizes Payee to file financing statements
with respect to the security interest of Payee, continuation statements with respect thereto, and any amendments to such financing
statements that may be necessitated. Company agrees that, notwithstanding any provision in the Uniform Commercial Code as adopted
in the State of Texas (the “UCC”) to the contrary, Company shall not file a termination statement of
any financing statement filed by Payee in connection with any security interest granted under this Debenture if Payee reasonably
objects to the filing of such termination statement. If the Microreactor, (including any ancillary equipment related thereto)
funded through the Phase 2 Debenture, is installed into or upon real property where Company holds a leasehold estate, Company
shall, prior to such installation, execute with its Landlord an Agreement, approved by Payee, specifying the Payee’s senior
security interest in the Phase 2 Microreactor, (including any ancillary equipment related thereto) funded through the Phase 2
Debenture, specifically subordinating the landlord’s liens and to protect the priority of the Payee’s senior purchase
money security interest in the Microreactor (including any ancillary equipment related thereto).


 


(B)       Payee
shall at all times have a perfected security interest in the Microreactor that shall be prior to any other interests therein.
Company shall do all acts and things, shall execute and file all instruments (including security agreements, UCC financing statements,
continuation statements, etc.) requested by Payee to establish, maintain and continue the perfected security interest of Payee
in the Microreactor, and shall promptly on demand pay all costs and expenses of (i) filing and recording, including the costs
of any searches deemed necessary by Payee from time to time to establish and determine the validity and the continuing priority
of the security interest of Payee, and (ii) all other claims and charges that in the reasonable opinion of Payee might prejudice,
imperil or otherwise affect the Microreactor or security interest therein of Payee. Company agrees that a carbon, photographic
or other reproduction of a security agreement or financing statement shall be sufficient as a financing statement. Payee is hereby
irrevocably appointed Company’s attorney-in-fact to take any of the foregoing actions requested of Company by Payee if Company
should fail to take such actions, which appointment shall be deemed coupled with an interest.


 




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(C)       Company
shall procure and continuously maintain and pay for (a) all risk physical damage insurance covering loss or damage to the Microreactor
for not less than the full replacement value thereof naming Payee as additional insured and loss payee commencing at the point
of origin (the point that the common carrier takes possession for delivery to Company), (b) bodily injury and property damage
combined single limit liability insurance in an amount not less than Two Million Dollars ($2,000,000) for the location at which
the Microreactor is located, and (c) such other insurance as may from time to time be reasonably required by Payee in order to
protect its interests with respect to the Microreactor, with such insurance companies and pursuant to such contracts or policies
and with such deductibles as are satisfactory to Payee. All contracts and policies shall include provisions for the protection
of Payee notwithstanding any act or neglect of or breach or default by Company, shall provide for payment of insurance proceeds
to Payee, shall provide that they may not be modified, terminated or canceled unless Payee is given at least thirty (30) days’
advance written notice thereof, and shall provide that the coverage is “primary coverage” for the protection of Company
or Payee notwithstanding any other coverage carried by Payee or Company protecting against similar risks. Company shall promptly
notify any appropriate insurer and Payee of each and every occurrence that may become the basis of a claim or cause of action
against the insured and provide Payee with all data pertinent to such occurrence. Company shall furnish Payee with certificates
of such insurance or copies of policies upon request and shall furnish Payee with renewal certificates not less than thirty (30)
days prior to the renewal date. Proceeds of all insurance are payable first to Payee to the extent of its interest. Insurance
must be issued by insurance companies licensed to do business in the state in which the Microreactor is located and which are
rated A:VIII or better by Best’s Key Rating Guide or otherwise approved by Payee. All policies shall be written as primary
policies, with deductibles not to exceed $10,000.


 


(D)       Company
shall not, without the prior written consent of Payee, sell, convey, mortgage, grant, bargain, encumber, pledge, assign, or otherwise
transfer the Microreactor or any part thereof or permit the Microreactor or any part thereof to be sold, conveyed, mortgaged,
granted, bargained, encumbered, pledged, assigned, or otherwise transferred, other than replacements consented to by Payee, without
in each instance indefeasibly paying in full in cash all sums due Payee hereunder and all other obligations having been satisfied.
A sale, conveyance, mortgage, grant, bargain, encumbrance, pledge, assignment, or transfer within the meaning of this Section
shall be deemed to include, but not limited to, (i) an installment sales agreement wherein Company agrees to sell the Microreactor
or any part thereof for a price to be paid in installments; or (ii) an agreement by Company leasing all or any part of the Microreactor.


 


(E)       The
Company, as a condition to getting paid from the escrow account, shall deliver to Payee a notarized affidavit signed by it and
FutureChemistry in the form of that attached to the escrow agreement executed contemporaneously herewith stating that amounts
due to FutureChemistry and its contractors with respect to the Microreactor.


 


4.       Conversion.


 


(A)       Prior
to the Maturity Date, the Payee may elect to convert all (but not part only) of the principal of this Debenture and any accrued
and unpaid interest into restricted shares of the Company’s Common Stock (the “Shares”), at the
conversion price of six (6) cents per share (the “Conversion Price”).


 


(i.)       If
the Payee elects to convert the principal and accrued and unpaid interest of this Debenture, the Payee shall provide written notice
to the Payor in the form attached hereto as Exhibit A (the “Conversion Notice”). If the
Payee does not provide written notice of its intention to convert the unpaid principal and any accrued and unpaid interest due,
Payor shall pay the amount due on the Maturity Date as required hereby.


 




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(ii.)       If
this Debenture is converted pursuant to Paragraph (A) of this Article 4 of this Debenture, the Company shall cause its transfer
agent to deliver the Shares to the Payee within five (5) business days after the date upon which the Payor receives a Conversion
Notice (such fifth (5th) business day, the “Conversion Share Due Date”); provided, however, that a Conversion
Notice delivered after 11:00 o’clock a.m. on any business day shall be deemed to be delivered on the next following business
day.


 


(iii.)       To
effect conversions hereunder, the Payee shall be required to physically surrender this Debenture to the Company.


 


(iv.)       If
in the case of any Conversion Notice, the certificate or certificates representing the Shares are not delivered to or as directed
by the Payee by the date required hereby, the Payee shall be entitled to elect by written notice to the Company at any time on
or before its receipt of such certificate or certificates, to rescind such Conversion Notice, in which event the Company shall
promptly return to the Payee any original Debenture delivered to the Company, if applicable, and the Payee shall promptly return
to the Company the Common Stock certificates representing the principal amount of this Debenture unsuccessfully tendered for conversion
to the Company.


 


(B)       All
shares of Common Stock shall be validly issued, fully paid, and non-assessable. Company shall pay all expenses in connection with,
and all taxes that may be charged with respect to, Company’s issuance or delivery of such shares. The Payor shall pay any
and all stock transfer fees and the cost of any legal opinions needed. No fractions of shares or scrip representing fractions
of shares will be issued upon conversion, but the number of shares issued shall be rounded up to the nearest whole share, based
upon the total number of shares of Common Stock to be issued to the Payee. The date upon which a Conversion Notice is received
by the Payor shall be deemed to be the date upon which the Payee has delivered the Conversion Notice duly executed, to the Payor;
provided, however, that a Conversion Notice delivered after 11:00 o’clock a.m. on any business day shall be deemed to be
delivered on the next following business day. Upon receipt of the Shares for the full conversion and/or payment of this Debenture,
the Payee shall deliver this Debenture to the Payor marked “cancelled.”


 


(C)       If
the Company at any time after the date hereof subdivides (by any stock split, stock dividend, recapitalization or otherwise) its
outstanding shares of Common Stock into a greater number of shares, the Conversion Price prior to such subdivision will be proportionately
reduced and the number of Shares of Common Stock that the Holder may convert hereunder shall be proportionately increased, and
if the Company at any time combines (by reverse stock split or otherwise) its outstanding shares of Common Stock into a smaller
number of shares, the Conversion Price prior to such combination will be proportionately increased and the number of shares of
Common Stock that the Holder may convert hereunder shall be proportionately decreased.


 


(D)       Any
capital reorganization, reclassification, consolidation, merger or sale of all or substantially all of the Company’s assets
to another person which is effected in such a way that holders of Common Stock are entitled to receive (either directly or upon
subsequent liquidation) stock, securities or assets with respect to or in exchange for Common Stock is referred to herein as an
“Organic Change.” Prior to the consummation of any Organic Change, the Company will make appropriate
provisions to ensure that such Payee will thereafter have the right to acquire and receive, in lieu of or in addition to the shares
of Common Stock that immediately prior thereto are acquirable and receivable upon conversion of this Debenture, such shares of
stock, securities or assets as such holder would have received in connection with such Organic Change if such Holder had converted
this Debenture immediately prior to such Organic Change.


 




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(E)       Whenever
the Conversion Price is adjusted pursuant to any provision of this Debenture, the Company shall promptly deliver to Payee a notice
setting forth the Conversion Price after such adjustment and setting forth a brief statement of the facts requiring such adjustment.


 


5.       Representations
and Covenants of the Payee.


 


The
Payee expressly agrees:


 


(A)       To
maintain any and all material, non-public information provided by the Payor pursuant to this Debenture, in confidence within the
meaning of Regulation FD promulgated by the U.S. Securities and Exchange Commission and shall not purchase or sell the Payor’s
Common Stock on the basis of such information until such information has been publicly disclosed.


 


(B)       While
holding this Debenture, the Payee shall not sell shares of the Company’s Common Stock short, buy puts to sell the Common
Stock, or buy or sell any security that is substantially equivalent to a short position in the Common Stock.


 


6.       Events
of Default.


 


The
term “Event of Default” as used herein shall mean the occurrence of any one or more of these following
events:


 


(A)       The
Company shall fail to pay any installment of interest, principal or other sums due under this Debenture or any other Transaction
Document within five (5) business days after any such payment was due and payable;


 


(B)       The
breach by the Payor of any other provisions of this Debenture (other than failure to make payments as due hereunder, which failure
shall not have a notice or cure period) and such breach is not cured within ten (10) business days after written notice of such
breach is delivered by Payee to the Company;


 


(C)       If,
pursuant to or within the meaning of the United States Bankruptcy Code or any other federal or state Legal Requirement relating
to insolvency or relief of debtors (a “Bankruptcy Law”), Company (A) commences a voluntary case or proceeding;
(B) fails to timely controvert or acquiesces in writing to or consents to any petition filed against it or to the entry of an
order for relief against it in an involuntary case or proceeding; (C) takes advantage of any law relating to its own bankruptcy,
insolvency, reorganization, winding up, liquidation, composition or readjustment of debts; (D) consents to the appointment of
a trustee, receiver, assignee, liquidator or similar official; (E) makes an assignment for the benefit of its creditors; (F) admits
in writing its inability to pay, or is generally not paying, its debts as they become due; or (G) takes any corporate or other
action for the purpose of authorizing or effecting any of the foregoing; or


 


(D)       If
a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that (A) is for relief against Company in
an involuntary case or proceeding, (B) appoints a trustee, receiver, assignee, liquidator or similar official for Company or all,
substantially all, or a substantial part of Company’s assets or properties, or (C) orders the liquidation of Company, and
in each case the order or decree is not dismissed within sixty (60) days.


 




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7.       Remedies
Upon Default.


 


(A)       Upon
the occurrence of one or more Events of Default, the Payee, at its option and without further notice, demand or presentment for
payment to the Company or others, may declare the then outstanding principal balance of this Debenture, together with all other
sums due under this Debenture, immediately due and payable, together with all accrued and unpaid interest thereon and thereafter
all such sums shall bear interest at the Default Rate, together with all reasonable attorneys’ fees, paralegals’ fees
and costs and expenses incurred by the Payee in collecting or enforcing payment thereof (whether such fees, costs or expenses
are incurred in negotiations, all trial and appellate levels, administrative proceedings, bankruptcy proceedings or otherwise),
and all other sums due by the Company hereunder, all without any relief whatsoever from any valuation or appraisement laws and
payment thereof may be enforced and recovered in whole or in part at any time by one or more of the remedies provided to the Payee
at law, in equity, or under this Debenture. Any accrued but unpaid interest and other sums due by the Company hereunder shall,
at the option of the Payee, be included, from time to time, in the amounts convertible hereunder; and


 


(B)       Payee
shall have all rights and remedies of a secured party in, to and against the Microreactor granted by the UCC and otherwise available
at law or in equity, including, without limitation: (i) the right to act as, and Company hereby constitutes and appoints Payee,
Company’s true, lawful and irrevocable attorney-in-fact (which appointment shall be deemed coupled with an interest) to
demand, receive and enforce payments and to give receipts, releases, satisfaction for and to sue for moneys payable to Company
under or with respect to the Microreactor, and actions taken pursuant to this appointment may be taken either in the name of Company
or in the name of Payee with the same force and effect as if this appointment had not been made; (ii) the right to take immediate
and exclusive possession of the Microreactor, or any part thereof, and for that purpose, with or without judicial process and
notice to the Company, enter (if this can be done without breach of the peace) upon any premises on which the Microreactor or
any part thereof may be situated and remove the same there from (provided that if the Microreactor is affixed to real estate,
such removal shall be subject to the conditions stated in the UCC); (iii) the right to hold, maintain, preserve and prepare the
Microreactor for sale, until disposed of; (iv) the right to render the Microreactor unusable and dispose of the Microreactor;
(v) the right to require Company to assemble and package the Microreactor and make it available to Payee for its possession at
a place to be designated by Payee which is reasonably convenient to Payee; and (vii) the right to sell, lease, hold or otherwise
dispose of all or any part of the Microreactor.


 


8.       Non-Exclusive
Remedy.


 


Any
remedy that is set forth in this Debenture is not exclusive of any other remedies provided for herein, in the accompanying documents
or that are provided by law.


 


9.       Liability
Upon Default.


 


The
liability of the Payor upon default shall be unconditional and shall not be in any manner affected by any indulgence whatsoever
granted or consented to by the Payee including, but not limited to, any extension of time, renewal, waiver or other modification.


 


10.       Exercise
of Remedy Upon Default.


 


No
failure on the part of the Payee to exercise, and no delay in exercising, any right hereunder shall operate as a waiver thereof,
nor shall any single or partial exercise of any right hereunder preclude any other or further exercise thereof or the exercise
of any other right.


 




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11.       Full
Recourse.


 


Anything
in this Debenture to the contrary notwithstanding, the Payor hereunder shall be liable on this Debenture for the full amount of
the principal, interest and all obligations pursuant to this Debenture.


 


12.       Waiver.


 


Company
waives demand, presentment, notice of non-payment or dishonor, notice of intent to accelerate, notice of acceleration, diligence
in collecting, grace, protest and notice of protest, and consents to all extensions without notice for any period or periods of
time and partial payments, before or after maturity, without prejudice to Holder. There can be no waiver by Holder or Company
of any right under this Debenture that is not in writing signed by waiving party. No delay or omission on the part of Holder in
exercising any right hereunder shall operate as a waiver of such right or any other right under this Debenture. A waiver on any
one occasion shall not be construed as a bar to or waiver of any right or remedy on the same or any subsequent occasion


 


13.       No
Defenses or Set-Off.


 


Payor
acknowledges and agrees that there are, and shall be, no claims, defenses, set-offs, equities, or counterclaims, whether legal
or equitable, available to it or any other person or entity affiliated with it or against the enforcement of this Debenture, including,
but not limited to, any such defenses, set-offs, equities, claims, counterclaims, or others legal or equitable defenses or claims
including, but not limited to, the statute of limitations, which arise out of this Debenture, the obligation of the Payor to repay
this Debenture, as the case may be, or in the course of dealings between the Payor and the Payee and any representatives or affiliates
thereof, and any such defenses, set-offs, equities, counterclaims or other claims, legal or equitable, available to Payor, or
any entity affiliated with Payor, whether known or unknown, arising out of this Debenture, the administration of this Debenture
are hereby forever waived, released and discharged.


 


14.       Replacement
of Debenture.


 


Upon
receipt of evidence satisfactory to the Payor of the loss, theft, destruction or mutilation of the Debenture, and if requested
in the case of any such loss, theft or destruction, upon delivery of an indemnity bond or other agreement or security reasonably
satisfactory to the Payor, or, in the case of any such mutilation, upon surrender and cancellation of such Debenture, the Payor
will issue a new Debenture, of like tenor and amount and dated the date of issuance of the original Debenture, in lieu of such
lost, stolen, destroyed or mutilated Debenture.


 


15.       Miscellaneous.


 


(A)       Headings.
Headings contained in this Debenture are for reference purposes only and shall not affect in any way the meaning or interpretation
of this Debenture.


 


(B)       Notices.
Any notice or other communication required or permitted hereunder must be in writing and sent by either (i) mail by (a) certified
mail, postage prepaid, return receipt requested and (b) first class mail, (ii) overnight delivery with confirmation of delivery
or (iii) electronic mail (“E-mail”) or facsimile transmission with an original mailed by first class mail, postage
prepaid, addressed as follows:


 




    	 	A-7	 



    	 		 



    

 


	To
    the Payee:	Name
	 	Address
	 	Address
	 	Facsimile
    No. 
	 	E-mail
    Address: 
	 	 
	With
    a copy to:	Name
	 	Address
	 	Address
	 	Attn:
    
	 	Facsimile
    No. 
	 	E-mail
    Address: 
	 	 
	To
    the Payor:	Quantum
    Materials Corp.
	 	3055
    Hunter Road
	 	San
    Marcos, Texas 78666
	 	Facsimile
    No.: 
	 	E-mail
    address: 


 


or
in each case to such other address, E-mail address and facsimile number as shall have last been furnished by like notice. If all
of the methods of notice set forth in this Paragraph (C) of this Article 14 of this Debenture are impossible for any reason, notice
shall be in writing and personally delivered to the aforesaid addresses. Each notice or communication shall be deemed to have
been given as of the following applicable dates:


 


(i.)       If
sent by mail, five (5) days after the later of sending by (a) certified mail, postage prepaid, return receipt requested or (b)
first class mail.


 


(ii.)       If
sent by overnight delivery, as of the date of delivery with confirmation of delivery.


 


(iii.)       If
sent by E-mail or facsimile, either: (a) as of the date so sent if a copy thereof is also mailed by first class mail on the date
sent by E-mail or facsimile or (b) if a copy thereof is not mailed by first class mail on the date sent by E-mail or facsimile,
then five (5) days after sending by first class mail.


 


(C)       Governing
Law & Jurisdiction. This Debenture shall in all respects be construed, governed, applied and enforced in accordance with
the laws of the State of Texas applicable to contracts made and to be performed therein, without giving effect to the principles
of conflicts of law. The parties further agree that any action between them shall be heard in Hays County, Texas, and expressly
consent to the jurisdiction and venue of the State Courts sitting in Hays County, Texas and the United States District Court for
the Southern District of Texas for the adjudication of any civil action asserted pursuant to this Debenture; provided, however,
nothing contained herein shall limit the Payee’s ability to bring suit or enforce this Debenture in any other jurisdiction.


 




    	 	A-8	 



    	 		 



    

 


(D)       Entire
Agreement. This Debenture, the Subscription Agreement, the Phase 1 Debentures and Warrants (as defined in the Subscription
Agreement), the Escrow Agreement, and the Phase 2 Warrants (as defined in the Subscription Agreement) (i) constitute the entire
agreement and supersede all prior and contemporaneous agreements and understandings (including the Original Subscription Agreement
(as defined in the Subscription Agreement)), excluding any agreements which are referred to in this Debenture or any of the documents
or instruments required to be executed pursuant to this Debenture, both written and oral, among the parties with respect to the
subject matter hereof and thereof, and (ii) are not intended to confer upon any person other than the Parties hereto any rights
or remedies hereunder. Each party to this Debenture agrees that, except for the representations and warranties contained in this
Debenture, no party makes any other representations or warranties, and each hereby disclaims any other representations and warranties
made by itself or any of its officers, directors, employees, agents, financial and legal advisors or other representatives, with
respect to the execution and delivery of this Debenture or the transactions contemplated hereby, notwithstanding the delivery
or disclosure of any documentation or other information with respect to any one or more of the foregoing.


 


(E)       Assignment.
The parties hereby agree that the obligations under this Debenture shall not be transferred or assigned to any third parties without
the prior written consent of each party to this Debenture.


 


(F)       Further
Assurances. The Parties agree to execute any and all such other further instruments and documents, and to take any and all
such further actions which are reasonably required to effectuate this Debenture and the intents and purposes hereof.


 


(G)       Facsimile
and E-mail Signatures. Any signature which is delivered via facsimile or via E-mail in portable document format (“.pdf”)
shall be deemed to be an original and have the same force and effect as if such facsimile or .pdf signature were the original
thereof.


 


(H)       Construction.
Each of the parties hereto further agrees that this Debenture shall not be construed more strictly against any party responsible
for its drafting regardless of any presumption or rule requiring construction against the party who drafted this Debenture.


 


(I)       Modifications.
This Debenture may not be changed, modified, extended, terminated or discharged orally, except by a written agreement specifically
referring to this Debenture which is signed by the Company and the Payee.


 


(J)       Severability.
If any provision of this Debenture shall, to any extent, be determined by a court of competent jurisdiction to be invalid or unenforceable,
the remainder of this Debenture shall not be affected thereby, and every other term and provision of this Debenture shall be valid
and enforceable to the fullest extent permitted by law.


 


IN
WITNESS WHEREOF, the Payor has executed this Debenture as of the 15th day of January, 2015.


 


	 	Quantum Materials Corp. 
	 	 	 
	 	By:	 
	 	Name:
    	 
	 	Title:	 



 



    	 	A-9	 



    	 		 



    

 


EXHIBIT
A


 


NOTICE
OF CONVERSION


 


To:
Quantum Materials Corp.


 


Attention:
President


 


1.       The
undersigned hereby elects to convert $__________________ principal amount and $____________ of accrued and unpaid interest of
that certain convertible debenture dated January _____, 2015 in the original principal amount of $_______.00 at a conversion price
of six cents ($.06) or _________ shares of Common Stock of Quantum Materials Corp. pursuant to the terms of the said debenture.
If this is a total conversion or a final partial conversion of said debenture, then the undersigned herewith tenders the original
debenture, marked paid and satisfied.


 


2.       Please
issue a certificate or certificates representing said shares of Common Stock in the name of the undersigned or in such other name
as is specified below:


 


	 	 	(Name)
	 	 	 
	 	 	 
	 	 	 
	 	 	(Address)


 


3.       Select
one and mark the box.


 


[  ]       A.       The
Common Stock shall be issued to the undersigned upon conversion without a restrictive legend because the undersigned is not an
affiliate of the issuer and (i) the Debenture was acquired from the issuer or an affiliate of the issuer more than six (6) months
before the date hereof, or (ii) the Debenture was not acquired from the issuer or an affiliate thereof; or


 


[  ]       B.       The
undersigned hereby represents and warrants that the aforesaid shares of Common Stock are being acquired for the account of the
undersigned for investment and not with a view to, or for resale, in connection with the distribution thereof, and that the undersigned
has no present intention of distributing or reselling such shares.


 


	 	 ___________________________________
	 	 
	 	Date:
    __________________,
    ____________



 



    	 	A-10	 



    	 		 



    

 


EXHIBIT
II to Amended and Restated

Subscription Agreement


 


NOTICE
OF CONVERSION


 


To:
Quantum Materials Corp.


 


Attention:
President


 


1.       The
undersigned hereby elects to convert $__________________ principal amount and $____________ of accrued and unpaid interest of
that certain convertible debenture dated January _____, 2014 in the original principal amount of $_______.00 at a conversion price
of four cents ($.04) or _________ shares of Common Stock of Quantum Materials Corp. pursuant to the terms of the said debenture.
If this is a total conversion or a final partial conversion of said debenture, then the undersigned herewith tenders the original
debenture, marked paid and satisfied.


 


2.       Please
issue a certificate or certificates representing said shares of Common Stock in the name of the undersigned or in such other name
as is specified below:


 


	 	 	(Name)
	 	 	 
	 	 	 
	 	 	 
	 	 	(Address)


 


3.       Select
one and mark the box.


 


[  ]       A.       The
Common Stock shall be issued to the undersigned upon conversion without a restrictive legend because the undersigned is not an
affiliate of the issuer and (i) the Debenture was acquired from the issuer or an affiliate of the issuer more than six (6) months
before the date hereof, or (ii) the Debenture was not acquired from the issuer or an affiliate thereof; or


 


[  ]       B.       The
undersigned hereby represents and warrants that the aforesaid shares of Common Stock are being acquired for the account of the
undersigned for investment and not with a view to, or for resale, in connection with the distribution thereof, and that the undersigned
has no present intention of distributing or reselling such shares.


 


	 	___________________________________
	 	 
	 	Date:

    __________________,
    ____________


 




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