Exhibit 4.1


 


[FORM OF SENIOR SECURED
CONVERTIBLE NOTE]


 


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 19(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.


 


Rock
Creek Pharmaceuticals, Inc.


 


Senior
Secured Convertible Note


 


	Issuance Date:  [●] 2015	Original Principal Amount: U.S. $[●]


 


FOR VALUE RECEIVED,
Rock Creek Pharmaceuticals, Inc., a Delaware corporation (the “Company”), hereby promises to pay to the order
of [BUYER] 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 October
14, 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 32.


 




     


     


    

 


1.            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 25(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.


 


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 12, 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 fifteen percent (15.0%) per
annum, simple interest (the “Default Rate”). 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 be payable with respect 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.


 




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(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”).


 


(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, (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 and (z) the applicable Make-Whole Amount,
if any.


 


(ii)         “Conversion
Price” means, as of any Conversion Date or other date of determination, $1.12, 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 9:00 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 19(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 19(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 Deadline 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. Notwithstanding anything herein to the contrary, with respect to any given
Notice Failure and/or Conversion Failure, this Section 3(c)(ii) shall not apply to the Holder to the extent the Company has already
paid such amounts in full to such Holder with respect to such Notice Failure and/or Conversion Failure, as applicable, pursuant
to the analogous sections of the Securities Purchase Agreement.


 




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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 19, 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, Control Account Release
(as defined below) 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, Control Account Release 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 24.


 




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(d)           Limitations
on Conversions.


 


(i)           Beneficial
Ownership Limitation. The Company shall not affect 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 4.99% (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) 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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(ii)          Exchange
Cap. The Company shall not issue any shares of Common Stock upon conversion of this Note or otherwise pursuant to the terms
of this Note if the issuance of such shares of Common Stock would exceed the aggregate number of shares of Common Stock which the
Company may issue upon conversion of the Notes or otherwise pursuant to the terms of this Note without breaching the Company’s
obligations under the rules or regulations of the Principal Market (the number of shares which may be issued without violating
such rules and regulations, including rules related to the aggregate of offerings under NASDAQ Listing Rule 5635(d), as applicable,
the “Exchange Cap”), except that such limitation shall not apply in the event that the Company (A) obtains the
approval of its stockholders as required by the applicable rules of the Principal Market for issuances of shares of Common Stock
upon conversion of the Notes or otherwise pursuant to the terms of this Note in excess of such amount or (B) obtains a written
opinion from outside counsel to the Company that such approval is not required, which opinion shall be reasonably satisfactory
to the Holder. Until such approval or such written opinion is obtained, no Buyer shall be issued in the aggregate, upon conversion
of any Notes or otherwise pursuant to the terms of this Note, shares of Common Stock in an amount greater than the product of (i)
the Exchange Cap multiplied by (ii) the quotient of (A) the aggregate original principal amount of Notes issued to such Buyer pursuant
to the Securities Purchase Agreement on the Closing Date divided by (B) the aggregate original principal amount of all Notes issued
to the Buyers pursuant to the Securities Purchase Agreement on the Closing Date (with respect to each Buyer, the “Exchange
Cap Allocation”). In the event that any Buyer shall sell or otherwise transfer any of such Buyer’s Notes, the transferee
shall be allocated a pro rata portion of such Buyer’s Exchange Cap Allocation with respect to such portion of such Notes
so transferred, and the restrictions of the prior sentence shall apply to such transferee with respect to the portion of the Exchange
Cap Allocation so allocated to such transferee. Upon conversion in full of a holder’s Notes, the difference (if any) between
such holder’s Exchange Cap Allocation and the number of shares of Common Stock actually issued to such holder upon such holder’s
conversion in full of such holder’s Notes shall be allocated to the respective Exchange Cap Allocations of the remaining
holders of Notes on a pro rata basis in proportion to the shares of Common Stock underlying the Notes then held by each such holder.
In the event that the Company is prohibited from issuing shares of Common Stock pursuant to this Section 3(d)(ii) (the “Exchange
Cap Shares”) after the date that is 80 calendar days following the Issuance Date, the Company shall pay cash in exchange
for the cancellation of such shares of Common Stock at a price equal to the sum of (i) the product of (x) such number of Exchange
Cap 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 Exchange Cap Shares to the Company and ending on the
date of such issuance and payment under this Section 3(d)(ii) 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 Exchange Cap Shares, any Buy-In Payment
Amount, any brokerage commissions and other out-of-pocket expenses, if any, of the Holder incurred in connection therewith (collectively,
the “Exchange Cap Share Cancellation Amount”); provided, that no Exchange Cap Share Cancellation Amount shall
be due and payable to the Holder to the extent that (x) on or prior to the applicable Share Delivery Deadline, the Exchange Cap
Allocation of a Holder is increased (whether by assignment by a holder of Notes or all, or any portion, of such holder's Exchange
Cap Allocation or otherwise) (an “Exchange Cap Allocation Increase”) and (y) after giving effect to such Exchange
Cap Allocation Increase, the Company delivers the applicable Exchange Cap Shares to the Holder (or its designee) on or prior to
the applicable Share Delivery Deadline.


 




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(e)          Right
of Alternate Conversion.


 


(i)            General.


 


(1)         Alternate
Optional Conversion. Subject to the provisions of Section 3(d), 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 the Conversion Amount of this Note 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; provided, that shares of Common Stock sold pursuant to an Alternate Optional Conversion by the
Holder (or its Affiliates), in the aggregate, on any Trading Day may not exceed 25% of the aggregate daily share trading volume
(as reported on Bloomberg) of the Common Stock on the Principal Market as of such Trading Day. In the event that the Holder shall
sell or otherwise transfer all or any portion of this Note on any Alternate Optional Conversion Date, each transferee shall be
allocated such portion of the Conversion Amount eligible to be an Alternate Optional Conversion Amount on such Alternate Optional
Conversion Date, 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 during any Event of Default Redemption Right Period (as defined below) 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 Event of 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).


 




    	 	8	 



     


    

 


(f)           Mandatory
Conversion.


 


(i)            General.
If at any time (x) the VWAP of the Common Stock listed on the Principal Market exceeds $3.36 (as adjusted for stock splits, stock
dividends, recapitalizations and similar events) (the “Mandatory Conversion Minimum Price”) for ninety (90)
consecutive Trading Days (each, a “Mandatory Conversion Measuring Period”), and (y) no Equity Conditions Failure
then exists, the Company shall have the right to require the Holder to convert all, or any part, of the Conversion Amount of this
Note, as designated in the Mandatory Conversion Notice (as defined below) into fully paid, validly issued and nonassessable shares
of Common Stock in accordance with Section 3(c) hereof at the Conversion Rate as of the Mandatory Conversion Date (as defined
below) (a “Mandatory Conversion”). The Company may exercise its right to require conversion under this Section
3(f) by delivering within five Trading Days following the end of such Mandatory Conversion Measuring Period a written notice thereof
by electronic mail or facsimile and overnight courier to all, but not less than all, of the holders of Notes and the Transfer Agent
(the “Mandatory Conversion Notice” and the date all of the holders received such notice by electronic mail or
facsimile is referred to as the “Mandatory Conversion Notice Date”). The Mandatory Conversion Notice shall be
irrevocable. The Mandatory Conversion Notice shall state (i) the Trading Day selected for the Mandatory Conversion in accordance
with this Section 3(f), which Trading Day shall be no less than sixty (60) Trading Days and no more than ninety (90) Trading
Days following the Mandatory Conversion Notice Date (the “Mandatory Conversion Date”), (ii) the aggregate Conversion
Amount, of the Notes subject to mandatory conversion from the Holder and all of the holders of the Notes pursuant to this Section 3(f)
(and analogous provisions under the Other Notes) (the “Mandatory Conversion Amount”), (iii) the number of shares
of Common Stock to be issued to the Holder on the Mandatory Conversion Date and (iv) that there has been no Equity Conditions Failure.
Notwithstanding the foregoing, the Company may effect only one (1) Mandatory Conversion during any six (6) calendar month period.
Notwithstanding anything herein to the contrary, (i) if the Closing Sale Price of the Common Stock listed on the Principal Market
fails to exceed the Mandatory Conversion Minimum Price for each Trading Day commencing on the Mandatory Conversion Notice Date
and ending and including the Trading Day immediately prior to the applicable Mandatory Conversion Date (a “Mandatory Conversion
Price Failure”) or an Equity Conditions Failure occurs at any time prior to the Mandatory Conversion Date, (A) the Company
shall provide the Holder a subsequent notice to that effect and (B) unless the Holder waives the applicable Equity Conditions Failure
and/or Mandatory Conversion Price Failure, as applicable, the Mandatory Conversion shall be cancelled and the applicable Mandatory
Conversion Notice shall be null and void and (ii) at any time prior to the date all of the shares of Common Stock to be delivered
to the Holder (or its designee) in such Mandatory Conversion have been delivered in full in compliance with Section 3(c) above.
the Mandatory Conversion Amount may be converted, in whole or in part, by the Holders into shares of Common Stock pursuant to Section
3 (including, without limitation, Section 3(e)). Notwithstanding the foregoing, any Conversion Amount subject to a Mandatory Conversion
may be converted by the Holder hereunder prior to the applicable Mandatory Conversion Date and such aggregate Conversion Amount
converted hereunder on or after the Mandatory Conversion Notice Date and prior to such Mandatory Conversion Date shall reduce the
Mandatory Conversion Amount to be converted on such Mandatory Conversion Date. For the avoidance of doubt, the Company shall have
no right to effect a Mandatory Conversion if any Event of Default has occurred and continuing, but any Event of Default shall have
no effect upon the Holder’s right to convert this Note in its discretion.


 




    	 	9	 



     


    

 


(ii)           Pro
Rata Conversion Requirement. If the Company elects to cause a Mandatory Conversion of this Note pursuant to Section 3(f), then
it must simultaneously take the same action with respect to all of the Other Notes.


 


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)
or the failure of the applicable Registration Statement to be declared effective by the SEC on or prior to the date that is five
(5) days after the applicable Effectiveness Deadline (as defined in the Registration Rights Agreement);


 


(ii)           while
the applicable Registration Statement is required to be maintained effective pursuant to the terms of the Registration Rights Agreement,
the effectiveness of the applicable Registration Statement 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 (as defined in the Registration Rights Agreement) for sale of all of such holder’s Registrable Securities in accordance
with the terms of the Registration Rights Agreement (or such lesser number of Registrable Securities as required to be registered
in accordance with Section 2(f) 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 ten (10) days in any 365-day period (excluding days during an Allowable
Grace Period (as defined in the Registration Rights Agreement));


 




    	 	10	 



     


    

 


(iii)          the
suspension from trading or the 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 by delivery of the required number of shares of Common Stock within five
(5) Trading Days after the applicable Conversion Date or (B) notice, written or oral, to any holder of the Notes, 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);


 


(v)           except to the extent the Company is in compliance with Section 11(b) below, at any time following the
tenth (10th) consecutive Business Day that the Holder’s Authorized Share Allocation (as defined in Section
11(a) below) is less than the number of shares of Common Stock that the Holder would be entitled to receive upon a conversion
by the Holder of the full Conversion Amount of this Note (without regard to any limitations on conversion set forth in
Section 3(d) or otherwise);


 


(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 five (5) 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
of any Securities (as defined in the Securities Purchase Agreement) 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) Trading Days;


 


(viii)        the
occurrence of any default under, redemption of or acceleration prior to maturity of at least an aggregate of $250,000 of Indebtedness
(as defined in the Securities Purchase Agreement) of the Company or any of its Subsidiaries, other than with respect to (A) the
Permitted Default Indebtedness and (B) any Other Notes;


 




    	 	11	 



     


    

 


(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, except with respect to the payment when due of the Permitted Default
Indebtedness, 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;


 


(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)         a
final judgment or judgments for the payment of money aggregating in excess of $250,000 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 $250,000
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;


 




    	 	12	 



     


    

 


(xiii)        the
Company and/or any Subsidiary, individually or in the aggregate, either (i) other than with respect to the Permitted Default Indebtedness,
fails to pay, when due, or within any applicable grace period, any payment with respect to any Indebtedness in excess of $250,000
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 $250,000, 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 (other than such agreements evidencing
the Permitted Default Indebtedness) 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;


 


(xiv)        other
than as specifically set forth in another clause of this Section 4(a), the Company or any
Subsidiary breaches any representation or warranty in any material respect (other than representations or warranties subject to
material adverse effect or materiality limitations, which may not be breached in any respect) or any 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 ten (10) 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 14 of this Note;


 


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


 




    	 	13	 



     


    

 


(xviii)      any
provision of any Transaction Document 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 to which it
is a party;


 


(xix)        except
to the extent no Restricted Principal remains outstanding pursuant to the terms thereof, this Note shall, for any reason, fail
or cease to create a separate valid and perfected first priority Lien (as defined in the Securities Purchase Agreement) on the
Collateral (as defined below) in favor of the Holder; or


 


(xx)         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 one (1) 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 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 12. 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.


 




    	 	14	 



     


    

 


(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 5(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 16, 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 5 shall apply similarly and equally to successive Fundamental
Transactions and shall be applied without regard to any limitations on the conversion of this Note.


 




    	 	15	 



     


    

 


(b)          Notice
of a Change of Control; Redemption Right. No sooner than twenty (20) Trading Days nor later than ten (10) calendar 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 5 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 (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 (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 5 shall be made in accordance with the provisions of Section 12 and shall have priority to
payments to stockholders in connection with such Change of Control. To the extent redemptions required by this Section 5(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 5, 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 5(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 5(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 5(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.


 




    	 	16	 



     


    

 


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 and assuming for such purpose that the Note was converted
at the Alternate Conversion Price as of the applicable record date) 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 the extent of the Maximum Percentage (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 the extent of any such excess) and such Purchase Right to such extent
shall be held in abeyance for the benefit of 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 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.


 




    	 	17	 



     


    

 


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 aggregate 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 (or was deemed to be issued pursuant to Section 7(a)(i) or 7(a)(ii) above, as applicable)
in such integrated transaction 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 5 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 5 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 shares of Common Stock, 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
forty-first (41st) Trading Day immediately following such Stock Combination Event Date, the Conversion Price then in effect on
such forty-first (41st) 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.


 




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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-sixth (26th) 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 or is continuing at any time during the
period from the Company Installment Notice Date through the Installment Date, 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 12 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 12.


 


(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 second (2nd) 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 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.          REDEMPTIONS
AT THE COMPANY’S ELECTION.


 


(a)          Company
Optional Redemption. At any time after the Applicable Date (as defined in the Securities Purchase Agreement), if no Equity
Conditions Failure exists, the Company shall have the right to redeem all, but not less than all, of the Conversion Amount then
remaining under this Note (the “Company Optional Redemption Amount”) on the Company Optional Redemption Date
(each as defined below) (a “Company Optional Redemption”). The portion of this Note subject to redemption pursuant
to this Section 9(a) shall be redeemed by the Company in cash at a price (the “Company Optional Redemption Price”)
equal to the greater of (i) the sum of (A) 125% of the portion of the Principal amount to be redeemed as of the Company Optional
Redemption Date plus (B) accrued but unpaid Interest thereon (and Late Charges, if any, with respect to such Principal and Interest)
and (ii) the sum of (A) the product of (1) the Conversion Rate with respect to the Principal amount being redeemed as of the Company
Optional Redemption Date 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 Company Optional Redemption Notice Date and ending on the Trading Day immediately
prior to the date the Company makes the entire payment required to be made under this Section 9(a), plus (B) accrued but unpaid
Interest thereon (and Late Charges, if any, with respect to such Principal and Interest). The Company may exercise its right to
require redemption under this Section 9(a) by delivering a written notice thereof by facsimile or electronic mail and overnight
courier to all, but not less than all, of the holders of Notes (the “Company Optional Redemption Notice” and
the date all of the holders of Notes received such notice is referred to as the “Company Optional Redemption Notice Date”).
The Company may deliver only one Company Optional Redemption Notice hereunder and such Company Optional Redemption Notice shall
be irrevocable. The Company Optional Redemption Notice shall (x) state the date on which the Company Optional Redemption shall
occur (the “Company Optional Redemption Date”) which date shall not be less than ninety (90) Trading Days nor
more than one hundred (100) Trading Days following the Company Optional Redemption Notice Date, (y) certify that there has been
no Equity Conditions Failure and (z) state the aggregate Conversion Amount of the Notes which is being redeemed in such Company
Optional Redemption from the Holder and all of the other holders of the Notes pursuant to this Section 9(a) (and analogous provisions
under the Other Notes) on the Company Optional Redemption Date. Notwithstanding anything herein to the contrary, (i) if no Equity
Conditions Failure has occurred as of the Company Optional Redemption Notice Date but an Equity Conditions Failure occurs at any
time prior to the Company Optional Redemption Date, (A) the Company shall provide the Holder a subsequent notice to that effect
and (B) unless the Holder waives the Equity Conditions Failure, the Company Optional Redemption shall be cancelled and the applicable
Company Optional Redemption Notice shall be null and void and (ii) at any time prior to the date the Company Optional Redemption
Price is paid, in full, the Company Optional Redemption Amount may be converted, in whole or in part, by the Holder into shares
of Common Stock pursuant to Section 3. All Conversion Amounts converted by the Holder after the Company Optional Redemption Notice
Date shall reduce the Company Optional Redemption Amount of this Note required to be redeemed on the Company Optional Redemption
Date. Redemptions made pursuant to this Section 9(a) shall be made in accordance with Section 12. In the event of the Company’s
redemption of any portion of this Note under this Section 9, 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 9 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. For the avoidance of doubt, the Company shall have no right to effect a Company Optional Redemption if any Event
of Default has occurred and continuing, but any Event of Default shall have no effect upon the Holder’s right to convert
this Note in its discretion.


 


(b)          Pro
Rata Redemption Requirement. If the Company elects to cause a Company Optional Redemption of this Note pursuant to Section
9(a), then it must simultaneously take the same action with respect to all of the Other Notes.


 




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10.          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.


 


11.          RESERVATION
OF AUTHORIZED SHARES.


 


(a)           Reservation.
So long as any Notes remain outstanding, the Company shall at all times reserve at least 300% of the number of shares of Common
Stock as shall from time to time be necessary to effect the conversion, including without limitation, Installment Conversions,
Alternate Optional Conversions, Alternate Event of Default 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.


 


(b)          Insufficient
Authorized Shares. If, notwithstanding Section 11(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 11(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 11(a) or this Section 11(b) shall
limit any obligations of the Company under any provision of the Securities Purchase Agreement.


 




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12.          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.
The Company shall deliver the applicable Company Optional Redemption Price to the Holder in cash on the applicable Company Optional
Redemption 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
19(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 19(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 12, 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.


 


(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.


 




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13.          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.


 


14.          COVENANTS.
Until this Note has been converted, redeemed or otherwise satisfied in accordance with its 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 in right of payment other than Permitted Indebtedness secured by Permitted Liens.


 


(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.


 


(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. The
Company shall not pay any amounts in settlement of any litigation (i) at any time (x) prior to the Initial Effective Date, (y)
solely if prior to the first anniversary of the Issuance Date, if a Public Information Failure (as defined in the Registration
Rights Agreement) exists and is continuing or (z) solely if prior to the six month anniversary of the Issuance Date, if a Maintenance
Failure (as defined in the Registration Rights Agreement) exists and is continuing, (ii) in an amount greater than $200,000 in
any trailing 12 month period, and (iii) solely if such litigation was not publicly disclosed prior to the Subscription Date, without
the prior written consent of the Required Holders.


 


(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.


 




    	 	30	 



     


    

 


(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. 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. 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.


 


(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. 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.


 




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(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 (i) transactions approved
by a majority of the Company’s independent directors and the Required Holders and (ii) transactions 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.


 


(o)          Holder
Master Restricted Account.


 


(1)         General.
The Company shall establish and maintain a bank account for each holder of Notes (collectively, including the Holder Master Restricted
Account, the “Master Restricted Accounts”) at a financial institution reasonably acceptable to the holders of
Notes (the “Control Account Bank”), which Master Restricted Account applicable to a holder of Notes shall be
subject to a deposit account control agreement in the form set forth in Exhibit C to the Securities Purchase Agreement (or such
other form reasonably acceptable to such holder of Notes)(each, a “Master Control Account Agreement”). On the
Issuance Date, the Company shall have directed the initial Buyers to deposit an aggregate of $19 million of the Purchase Price
(as defined in the Securities Purchase Agreement) into Master Restricted Accounts.


 


(2)         Control
Account Release. Upon the occurrence of any Control Account Release Event, the Holder shall, as soon as commercially practicable,
but in no event later than two (2) Trading Days thereafter, cause the applicable Control Account Release Amount to be released
from the Holder Master Restricted Account and deposited into the bank account of the Company specified in the Master Control Account
Agreement (each a “Control Account Release”).


 




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(3)         Grant
of Security Interest. The Company hereby grants and pledges to the Holder a continuing security interest in that certain deposit
account called the Holder Master Restricted Account, including any and all cash, proceeds, funds, credits, rights and other assets
therein or arising therefrom, from time to time, and any additions, dividends, profits and interest in the foregoing and any replacements
or substitutions therefore (collectively, the “Collateral”) to secure prompt repayment of any and all amounts
outstanding hereunder from time to time and to secure prompt performance by the Company of each of its covenants and duties under
the Transaction Documents (as defined in the Securities Purchase Agreement). Such security interest constitutes a valid, first
priority security interest in the presently existing Collateral, and will constitute a valid, first priority security interest
in later-acquired Collateral. Notwithstanding any filings undertaken related to Holder’s rights under the New York Uniform
Commercial Code, the Holder’s Lien (as defined in the Notes) on the Collateral shall remain in effect for so long as any
Restricted Principal remains outstanding. Notwithstanding the foregoing, upon any Control Account Release, but solely with respect
to such portion of the Restricted Principal hereunder subject to such Control Account Release (each, a “Control Account
Release Amount”), the Holder hereby automatically releases any lien hereunder on such Control Account Release Amount.


 


(4)         Cash
Payment Obligations. Notwithstanding anything herein to the contrary, at the option of the Holder, the Holder may satisfy
all, or any part, of any redemption or other cash payment obligation of the Company that has then become due hereunder and/or
pursuant to any other Transaction Document (as defined in the Securities Purchase Agreement) (each, a “Cash Payment
Obligation”) from the Collateral in the Holder Master Restricted Account, including, without limitation, in
connection with any Event of Default, Change of Control, Company Installment Redemption or payment due at the Maturity Date.
The Company may request that any Cash Payment Obligation be satisfied from the Collateral and the Company hereby irrevocably
consents to the Holder’s delivery of an instruction letter to the Control Account Bank to release Collateral from the
Holder Master Restricted Account, in each case, in an amount not to exceed any Cash Payment Obligation to the Holder. 
Notwithstanding the foregoing, in the absence of any such election by the Holder, the Company shall remain obligated to pay
such Cash Payment Obligation to the Holder without regard to any Collateral in the Holder Master Restricted Account. Upon the
occurrence of any event which could reasonably be expected to result in a Cash Payment Obligation (including, without
limitation, any breach of an Equity Condition (other than clauses (i) and (vii) of the definition of Equity Condition prior
to the six month anniversary of the initial Issuance Date)), the Holder may, at the Holder’s option, withdraw all, or
any part, of the Collateral in the Holder Master Restricted Account; provided that such withdrawal shall not constitute the
delivery of a Redemption Notice hereunder or payment hereunder unless the Holder specifies in writing to the Company that
the Holder has applied such Collateral in satisfaction of such Cash Payment Obligation.


 




    	 	33	 



     


    

 


(5)         Breach
of Master Control Account Agreement. If the Control Account Bank breaches any covenant or other term or condition of any Master
Control Account Agreement or otherwise fails to promptly comply with the instructions of the Holder in connection with the Collateral,
the Holder may, at its option, withdraw the Collateral from the Control Account Bank and hold such Collateral until such time as
(x) the Company and the Holder have agreed upon a replacement Control Account Bank and (y) a Master Control Account Agreement with
respect to such Collateral and a new account shall have been duly executed by the Company, the Holder and the replacement Control
Account Bank. Notwithstanding anything herein to the contrary, if the Company or any of its Subsidiaries receives any of the Collateral
in breach of any Master Control Account Agreement (or receives notice from any holder of Notes that an amount was wired to the
Company from a Master Restricted Account attributable to such holder of Notes without the proper authorization of such holder of
Notes), the Company shall promptly cause such amounts to be returned to such applicable Master Restricted Account.


 


(p)           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.


 


(a)           Financial
Covenants; Announcement of Operating Results.


 


(i)          Minimum
Cash Test. So long as this Note is outstanding, the Company’s Available Cash shall at all times equal or exceed $500,000
(the “Minimum Cash Test”)


 




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(ii)         Cash
Burn Test. So long as this Note is outstanding, the Company's Cash Burn as of any calendar month shall be less than (x) if
on or prior to the initial date a Registration Statement filed pursuant to the Registration Rights Agreement is declared effective
by the SEC and is available for use by the Holder (the “Initial Effective Date”), $700,000 or (y) if after the
initial Effective Date, $1 million (the “Cash Burn Test”, and together with the Available Cash Test, the “Financial
Tests”).


 


(iii)        Operating
Results Announcement. Commencing with the Fiscal Quarter ending September 30, 2015, the Company shall publicly disclose and
disseminate (such date, the “Announcement Date”) its operating results (the “Operating Results”)
(x) for each of the first three Fiscal Quarters of each fiscal year no later than the forty-fifth (45th) day after the
end of such Fiscal Quarter and (y) for the fourth Fiscal Quarter of each Fiscal Year, no later than the ninetieth (90th)
day after the end of such Fiscal Year, and in the event the Company shall have satisfied the Financial Tests such announcement
shall include a statement to the effect that the Company is not in breach of the Financial Tests for such Fiscal Quarter. On the
Announcement Date, the Company shall also provide to the Holders a certification, executed on behalf of the Company by the Chief
Financial Officer of the Company, certifying that the Company satisfied the Financial Tests for such Fiscal Quarter. If the Company
has failed to meet any Financial Test for such Fiscal Quarter (a “Financial Covenant Failure”), the foregoing
written certification that the Company provides to the Holders shall also state each Financial Test that has not been met (a “Financial
Covenant Failure Notice”). Concurrently with the delivery of each Financial Covenant Failure Notice to the Holders, the
Company shall also make publicly available (as part of a Quarterly Report on Form 10-Q, Annual Report on Form 10-K or on a Current
Report on Form 8-K, or otherwise) the Operating Results, the Financial Covenant Failure Notice and the fact that an Event of Default
has occurred under the Notes.


 


15.           SECURITY.
This Note and the Other Notes are secured to the extent and in the manner set forth in this Note and the other Transaction Documents.


 


16.          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 and assuming for such purpose that the Note was converted at the Alternate Conversion
Price as of the applicable record date) 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 the extent of the Maximum Percentage (and shall not be entitled to beneficial ownership of such shares of Common Stock as a
result of such Distribution (and beneficial ownership) to the extent of any such excess) and the portion of such Distribution shall
be held in abeyance for the benefit of 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
Distribution (and any Distributions declared or made on such initial Distribution or on any subsequent Distribution held similarly
in abeyance) to the same extent as if there had been no such limitation).


 




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17.          AMENDING
THE TERMS OF THIS NOTE. The prior written consent of the holders of Notes representing at least the Required Holders shall
be required for any change, waiver or amendment to this Note. Any change, waiver or amendment so approved shall be binding upon
all existing and future holders of this Note and any Other Notes; provided, however, that no such change, waiver or, as applied
to any of the Notes held by any particular holder of Notes, shall, without the written consent of that particular holder, (i) reduce
the amount of Principal, reduce the amount of accrued and unpaid Interest, or extend the Maturity Date, of the Notes, (ii) disproportionally
and adversely affect any rights under the Notes of any holder of Notes (except that a holder of Notes that does not have any of
its Notes secured by cash amounts in a Master Restricted Account will not be deemed to be disproportionally and adversely effected
by any change, waiver or amendment to any other holder’s Notes or consideration granted to any other holder of Notes in connection
with any change, waiver or amendment related to any provision relating to any Master Restricted Account); or (iii) modify any of
the provisions of, or impair the right of any holder of Notes under, this 17.


 


18.          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.


 


19.          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 19(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 19(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 19(d)) representing the outstanding Principal.


 




    	 	36	 



     


    

 


(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 19(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.


 


(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 19(a) or Section 19(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.


 


20.         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).


 




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21.          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.


 


22.          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 Note
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.


 


23.          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 23
shall permit any waiver of any provision of Section 3(d).


 


24.          DISPUTE
RESOLUTION.


 


(a)          Submission
to Dispute Resolution.


 


(i)          In
the case of a dispute relating to 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 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 Company shall select an independent, reputable investment bank, approved by the Holder (such approval
not to be unreasonably withheld or delayed) 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 24 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.


 




    	 	39	 



     


    

 


(b)          Miscellaneous.
The Company expressly acknowledges and agrees that (i) this Section 24 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 24, (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 24 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 24 and (v) nothing
in this Section 24 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 24).








 


25.           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).


 




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(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 (solely to the extent such amount is not then accruing interest at the Default Rate) 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
fifteen percent (15%) per annum from the date such amount was due until the same is paid in full (“Late Charge”).


 


26.           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.


 


27.           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.


 


28.           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
24 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 24. 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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29.           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 29 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 29(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 29(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.


 


30.           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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31.          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.


 


32.           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) the lowest of (A)
80% of the VWAP of the Common Stock as of the Trading Day immediately preceding the delivery or deemed delivery of the applicable
Conversion Notice, (B) 80% of the VWAP of the Common Stock as of the Trading Day of the delivery or deemed delivery of the applicable
Conversion Notice and (C) 80% of the price computed as the quotient of (I) the sum of the five (5) lowest VWAPs of the Common Stock
during the forty (40) consecutive Trading Day period ending and including the Trading Day immediately preceding the delivery or
deemed delivery of the applicable Conversion Notice, divided by (II) five (5) (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.


 




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(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 employee, officer or director for services provided to the Company in their capacity as such.


 


(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)          “Available
Cash” means, with respect to any date of determination, an amount equal to the aggregate amount of the Cash of the Company
and its Subsidiaries (excluding for this purpose cash held in restricted accounts with respect to any Indebtedness of the Company
or any of its Subsidiaries, other than as provided for in the Transaction Documents) as of such date of determination held in bank
accounts of financial banking institutions in the United States of America (excluding any Cash held in any Master Restricted Account
or subject to any other restriction on being freely used by the Company or any of its Subsidiaries or to the extent such Cash does
not consist of immediately available funds). For the avoidance of doubt, with respect to any transaction in which any Person pays
Cash to the Company or any of its Subsidiaries, Available Cash as of any given date shall not include the Cash in such transaction
if such Cash, at any time thereafter, is refunded or returned to such Person (whether in exchange for the return of assets, redemption
of securities, or otherwise).


 


(i)          
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).


 




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(j)          “Bloomberg”
means Bloomberg, L.P.


 


(k)          “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.


 


(l)          
“Cash” of the Company and its Subsidiaries on any date shall be determined from such Persons’ books maintained
in accordance with GAAP, and means, without duplication, the cash, cash equivalents and Eligible Marketable Securities accrued
by the Company and its wholly owned Subsidiaries on a consolidated basis on such date.


 


(m)          “Cash
Burn” means, with respect to any given calendar month, the difference between (i) the Available Cash as of the last calendar
day in such calendar month, less (ii) the Available Cash as of the first calendar day in such calendar month.


 


(n)          
“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.


 


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


 


(p)          “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 24. All such determinations shall be appropriately
adjusted for any stock splits, stock dividends, stock combinations, recapitalizations or other similar transactions during such
period.


 




    	 	45	 



     


    

 


(q)          “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.


 


(r)          “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.


 


(s)          “Control
Account Release Amount” means, with respect to any given Control Account Release Event, such amount of cash as specified
in the applicable clause of the definition of “Control Account Release Event”.


 


(t)          
“Control Account Release Event” means, as applicable, (i) with respect to any Restricted Principal designated
to be converted in a Conversion Notice, the Company’s receipt of both (A) such Conversion Notice hereunder executed by the
Holder in which all, or any part, of the Principal to be converted includes any Restricted Principal and (B) written confirmation
by the Holder that the shares of Common Stock issued pursuant to such Conversion Notice have been properly delivered in accordance
with Section 3(c) (in each case, as adjusted, if applicable, to reflect the withdrawal of any Conversion Notice, in whole or in
part, by the Holder, whether pursuant to Section 3(c)(ii) or otherwise), (ii) the Company’s receipt of a notice by the Holder
electing to effect a release of cash with respect to any Restricted Principal to the Company, (iii) with respect to the Holder
Pro Rata Amount of $500,000, the occurrence of the Initial Filing Date (as defined in the Registration Rights Agreement), (iv)
with respect to the Holder Pro Rata Amount of $1,000,000, the occurrence of a Positive UK Trial Outcome, (v) with respect to the
Holder Pro Rata Amount of $2,000,000, on the thirtieth (30th) Trading Day after the occurrence of the initial Effective
Date (as defined in the Registration Rights Agreement) and (vi) on the first Trading Day of each calendar month after the later
of (A) the Stockholder Approval Date (as defined in the Securities Purchase Agreement), (B) the sixtieth (60th) Trading
Day after the Registration Release Date, the lesser of (x) the amount of Restricted Principal then outstanding hereunder and (y)
the Holder Pro Rata Amount of $1,000,000; provided, in the case of clauses (iii), (iv), (v) and (vi) above, as of such date of
determination, no Equity Conditions Failure then exists (other than, (I) solely with respect to clause (iii) and (iv), any Equity
Condition Failure existing solely as a result of the failure of the initial Effective Date to have occurred or Required Minimum
Securities Amount to be available, in each case, on or prior to such date, or a threatened suspension from a Major Market and (II)
solely with respect to clause (v), any Equity Conditions Failure existing solely as a result of the failure of the initial Effective
Date to have occurred on or prior to first Trading Day in the applicable Equity Conditions Measuring Period).


 




    	 	46	 



     


    

 


(u)          
“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.


 


(v)         “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.


 


(w)          “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”.


 


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


 


(y)          “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.


 




    	 	47	 



     


    

 


(z)          
“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) (the “Equity Conditions Measuring Period”)
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 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
or amount of Restricted Principal being released, as applicable, in the event requiring this determination at the Alternate Conversion
Price then in effect (without regard to any limitations on conversion set forth herein))(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 Conversion Shares issuable pursuant
to the terms of the Notes 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) and no Current Information Failure (as defined in the Registration Rights Agreement) exists or is continuing; (ii)
on each day during the Equity Conditions Measuring Period, the Common Stock (including all Registrable Securities) is listed or
designated for quotation (as applicable) on a Major Market and shall not have been suspended from trading on an Major Market (other
than suspensions of not more than two (2) days and occurring prior to the applicable date of determination due to business announcements
by the Company) nor shall delisting or suspension by an Major 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 Major Market or (B) the Company falling below the minimum listing maintenance requirements
of the Major 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 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) 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.


 




    	 	48	 



     


    

 


(aa)         “Equity
Conditions Failure” means that (i) on any day during the period commencing forty (40) Trading Days prior to the applicable
Company Optional Redemption Notice Date through the applicable Company Optional Redemption Date or (ii) on any day during the period
commencing on 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, (iii) any day during the period commencing forty (40)
Trading Days prior to the date of the applicable Control Account Release Event through the date of the applicable Control Account
Release Event or (iv) on any day during the period commencing sixty (60) Trading Days prior to the applicable Mandatory Conversion
Notice Date through the applicable Mandatory Conversion Date, the Equity Conditions have not been satisfied (or waived in writing
by the Holder).


 


(bb)         “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 forty (40) consecutive Trading Day period
ending and including the Trading Day immediately preceding the forty-first (41st) Trading Day after such Stock Combination Event
Date, divided by (y) five (5).


 




    	 	49	 



     


    

 


(cc)         “Excluded
Securities” means (i) shares of Common Stock or standard options to purchase Common Stock issued to 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 2,000,000 shares
of the Common Stock (as adjusted for stock splits, stock dividends, stock combinations, recapitalizations and similar events) 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), and (iv) shares of Common Stock, Options and
Convertible Securities issued pursuant to equipment lease financings, strategic mergers or acquisitions of other assets or businesses,
or strategic licensing or development transactions; provided that (x) the primary purpose of such issuance is not to raise capital
as determined in good faith by the Buyers, (y) the purchaser or acquirer of such shares of Common Stock in such issuance solely
consists of either (1) the actual participants in such equipment lease financings, or strategic licensing or development transactions,
(2) the actual owners of such assets or securities acquired in such merger or acquisition or (3) the shareholders, partners or
members of the foregoing Persons, and (z) the number or amount (as the case may be) of such shares of Common Stock issued to such
Person by the Company shall not be disproportionate to such Person’s actual participation in such equipment lease financings,
or strategic licensing or development transactions or ownership of such assets or securities to be acquired by the Company (as
applicable).


 


(dd)         “Fiscal
Quarter” means each of the fiscal quarters adopted by the Company for financial reporting purposes that correspond
to the Company's fiscal year as of the date hereof that ends on December 31.


 


(ee)         “Fiscal
Year” means the fiscal year adopted by the Company for financial reporting purposes that ends on December 31.


 




    	 	50	 



     


    

 


(ff)         
“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 Note 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.


 




    	 	51	 



     


    

 


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


 


(hh)        “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.


 


(ii)         
“Holder Master Restricted Account” means, solely with respect to the Holder, account number [         ] at Hancock
Bank, or such other account as may be directed by the Holder, from time to time, subject to a Master Control Account Agreement
in favor of the Holder in a form reasonably acceptable to the Holder.


 


(jj)         
“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.


 


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


 


(ll)         “Initial
Installment Notice Due Date” means the earlier of (x) the initial Effective Date and (y) December 14, 2015.


 


(mm)      “Installment
Amount” means the sum of (A) (i) with respect to any Installment Date other than the Maturity Date, the lesser of (x)
the quotient of (I) $[ ]1 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 Acceleration 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, the applicable
Make-Whole Amount with respect to such Installment Amount, 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.


 


(nn)         “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 five (5) lowest Trading
Days during the forty (40) consecutive Trading Day period ending and including the Trading Day immediately prior to the applicable
Installment Date, divided by (B) five (5). All such determinations to be appropriately adjusted for any stock split, stock dividend,
stock combination or other similar transaction during any such measuring period.


  





 



1 Insert 1/20th of
initial Principal


  



    	 	52	 



     


    

 


(oo)         “Installment
Date” means (i) the twenty-sixth (26th) Trading Day after the Initial Installment Notice Due Date, (ii) then, (x) if
the last 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 last Trading Day of the second calendar month immediately following the initial Installment
Date or (y) otherwise, the last Trading Day of the calendar month immediately following the initial Installment Date, (iii) thereafter,
the last Trading Day of the calendar month immediately following the previous Installment Date until the Maturity Date, and (iv)
the Maturity Date.


 


(pp)         “Interest
Date” means, with respect to any given calendar month, (x) if prior to the initial Installment Date or after the Maturity
Date, the last 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.


 


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


 


(rr)         “Major
Market” means The New York Stock Exchange, the NYSE MKT, the Nasdaq Capital Market, the Nasdaq Global Select Market,
the Nasdaq Global Market.


 


(ss)         
“Make-Whole Amount” means, as of any given date and as applicable, in connection with any conversion, installment
or redemption, the amount of any Interest that, but for any conversion, installment or redemption hereunder on such given date,
would have accrued with respect to the Conversion Amount being converted or redeemed under this Note at the Interest Rate for the
period from such given date through the Maturity Date.


 


(tt)         
“Maturity Date” shall mean October 15, 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 Change of Control 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.


 




    	 	53	 



     


    

 


(uu)         “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”.


 


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


 


(ww)         “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.


 


(xx)        “Permitted
Default Indebtedness” such Indebtedness described in Schedule 4(a)(viii) attached hereto pursuant to the terms and conditions
of such Indebtedness as in effect as of the Subscription Date; provided, that no such Indebtedness may be in default for more than
seventy-five (75) consecutive calendar days.


 


(yy)         “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 and (iii) Indebtedness secured by Permitted
Liens or unsecured but as described in clauses (iv) and (v) of the definition of Permitted Liens.


 


(zz)         “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 $100,000, (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),


 




    	 	54	 



     


    

 


(aaa)       
“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.


 


(bbb)        “Positive
UK Trial Outcome” means a public announcement by the Company that the Company’s initial Phase I clinical trial
in the United Kingdom resulted in no safety concerns and that the Company is in a position to proceed with further clinical development
of Anatabine Citrate.


 


(ccc)        “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.


 


(ddd)        “Pre-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 five (5) lowest Trading
Days during the forty (40) 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) five (5). All such determinations to be appropriately
adjusted for any stock split, stock dividend, stock combination or other similar transaction during any such measuring period.


 


(eee)        “Price
Failure” means, with respect to a particular date of determination, the quotient of (x) the sum of the VWAP of the Common
Stock for each Trading Day during the forty (40) Trading Day period ending on, and including, the Trading Day immediately preceding
such date of determination, divided by (y) forty (40) fails to exceed $0.45 (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.


 


(fff)        “Principal
Market” means the Nasdaq Capital Market (or, if the shares of Common Stock are not listed on the Nasdaq Capital Market
and are listed on one or more Eligible Markets, the primary Eligible Market in which the shares of Common Stock are then listed).


 


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


 


(hhh)        “Redemption
Premium” means 125%.


 




    	 	55	 



     


    

 


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


 


(jjj)        “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, as may be amended from time to time.


 


(kkk)      “Registration
Release Date” means the earlier to occur of (i) the Effective Date (as defined in the Registration Rights Agreement)
of a Registration Statement registering any of the Registrable Securities (as defined in the Registration Rights Agreement) and
(ii) the later of (x) the initial date all of the Registrable Securities are eligible to be sold pursuant to Rule 144 and (y) the
date no Current Information Failure (as defined in the Registration Rights Agreement) exists or is continuing.


 


(lll)        “Required
Holders’ means the holders of Notes representing at least a majority of the aggregate principal amount of the Notes then
outstanding; provided, that such majority must include Alto Opportunity Master Fund, SPC (including any successor and assigns,
collectively, “Alto”), so long as Alto beneficially owns at least $500,000 in aggregate principal amount of
Notes.


 


(mmm)   “Restricted
Principal” means, as of any given date, the difference of (i) all cash amounts held in the Master Restricted Account
of the Holder as of the Closing Date and (ii) all cash amounts released from the Master Restricted Account of the Holder to the
Company (or at the Company’s direction) on or prior to such given date.


 


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


 


(ooo)      “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.


 


(ppp)    
“Subscription Date” means October __, 2015.


 


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


 


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


 


(sss)     
“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.


 




    	 	56	 



     


    

 


(ttt)        “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.


 


(uuu)        “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 each Trading Day during the forty (40) Trading Day period ending on,
and including, the Trading Day immediately preceding such date of determination (such period, the “Volume Failure Measuring
Period”), is less than $150,000 (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.


 


(vvv)        
“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
24. All such determinations shall be appropriately adjusted for any stock dividend, stock split, stock combination, recapitalization
or other similar transaction during such period.


 




    	 	57	 



     


    

 


33.         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. If the Company or any of its Subsidiaries provides material non-public information to the Holder that
is not simultaneously filed in a Current Report on Form 8-K and the Holder has not agreed to receive such material non-public information,
the Company hereby covenants and agrees that the Holder shall not have any duty of confidentiality to the Company, any of its Subsidiaries
or any of their respective officers, directors, employees, affiliates or agents with respect to, or a duty to any of the foregoing
not to trade on the basis of, such material non-public information. Nothing contained in this Section 33 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]


 




    	 	58	 



     


    

 


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


 


 


	 	ROCK CREEK PHARMACEUTICALS, INC.
	 	 
	 	By:	 
	 	 	Name:
	 	 	Title:


 


Senior Convertible
Note - Signature Page


 




     


     


    

 


EXHIBIT
I


 


ROCK CREEK PHARMACEUTICALS,
INC.


CONVERSION NOTICE


 


Reference is made
to the Senior Convertible Note (the “Note”) issued to the undersigned by Rock Creek Pharmaceuticals, 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, $0.0001
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 Make-Whole Amount (if any)	 
	 	 
	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:	 
	 	 	 	 	 



Notwithstanding anything to the contrary
contained herein, this Conversion Notice shall constitute a representation by the Holder of the Note submitting this Conversion
Notice that after giving effect to the conversion provided for in this Conversion Notice, such Holder (together with its affiliates)
will not have beneficial ownership (together with the beneficial ownership of such Person’s affiliates) of a number of shares
of Common Stock which exceeds the Maximum Percentage (as defined in the Note) of the total outstanding shares of Common Stock of
the Company as determined pursuant to the provisions of Section 3(d)(i) of the Note.


 




     


     


    

 


 ̈            Check
here if all or any portion of the aggregate Principal being converted includes any Restricted Principal.


 


		 ̈	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 Acceleration, check here if Holder
is electing to use _________ as the Pre-Installment Conversion Price or Installment Conversion Price (as applicable) related to
the following Installment Date:____________



 


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 ________________________.





 


	 	ROCK CREEK PHARMACEUTICALS, INC.
	 	 
	 	By:	 
	 	 	Name:
	 	 	Title: