[FORM
OF SERIES [A][B] 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.


 


THIS
NOTE HAS BEEN ISSUED WITH ORIGINAL ISSUE DISCOUNT (“OID”). PURSUANT TO TREASURY REGULATION §1.1275-3(b)(1), JOLIE
KAHN, A REPRESENTATIVE OF THE COMPANY HEREOF WILL, BEGINNING TEN DAYS AFTER THE ISSUANCE DATE OF THIS NOTE, PROMPTLY MAKE AVAILABLE
TO THE HOLDER UPON REQUEST THE INFORMATION DESCRIBED IN TREASURY REGULATION §1.1275-3(b)(1)(i). JOLIE KAHN MAY BE REACHED
AT TELEPHONE NUMBER 949-424-8005, EXT. 120.


 


Toughbuilt
Industries, Inc.


 


Series
[A][B] Senior Secured Convertible Note


 


	Issuance
    Date: [●] 2019 (the “Issuance Date”)	Original
    Principal Amount: U.S. $[●]


 


FOR
VALUE RECEIVED, Toughbuilt Industries, Inc., a Nevada 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, if an Event of Default (as defined below) has occurred and is continuing, to pay interest (“Interest”)
on any outstanding Principal at the applicable Default Rate (as defined below) from 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 Series
[A][ B] 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 August 19, 2019 (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 Series A Senior Convertible Notes and Series B Senior Secured Convertible Notes issued pursuant to the Securities
Purchase Agreement, collectively, 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 t and accrued and unpaid Late Charges (as defined in Section 25(c)) on
such Principal, Interest. [INSERT IN SERIES B NOTES ONLY:, except that any Restricted Principal hereunder shall be satisfied on
the Maturity Date (in lieu of a cash payment) by Maturity Netting (as defined in the Investor Note)]. 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. [INSERT IN SERIES A NOTES ONLY: Notwithstanding anything herein to
the contrary, with respect to any conversion or redemption hereunder, as applicable, the Company shall convert or redeem, as applicable,
First, all accrued and unpaid Interest hereunder and under any other Series A Notes held by such Holder, Second,
all accrued and unpaid Late Charges on any Principal and Interest hereunder and under any other Series A Notes held by such Holder,
Third, all other amounts (other than Principal) outstanding under any other Series A Notes held by such Holder and, Fourth,
all Principal outstanding hereunder and under any other Series A Notes held by such Holder, in each case, allocated pro rata among
this Note and such other Series A Notes held by such Holder.]


 


[INSERT
IN SERIES B NOTES ONLY:


 


(a)
Securities Contract. The Company and the Holder hereby acknowledge and agree that the Securities Purchase Agreement and
the Note Purchase Agreement (as defined in the Securities Purchase Agreement) each is a “securities contract” as defined
in 11 U.S.C. § 741 and that Holder shall have all rights in respect of this Note, the Master Netting Agreement (as defined
in the Securities Purchase Agreement), the Investor Note, the Securities Purchase Agreement and the Note Purchase Agreement as
are set forth in 11 U.S.C. § 555 and 11 U.S.C. § 362(b)(6), including, without limitation, all rights of credit, deduction,
setoff, offset and/or netting (collectively, “Netting” or “Net”) as are available under
this Note, the Master Netting Agreement and the Investor Note and all Netting provisions of this Note, the Investor Note and the
Master Netting Agreement, including without limitation the provisions set forth in Section 7 of the Investor Note, are hereby
incorporated in this Note and made a part hereof as if such provisions were set forth herein.


 




    	2



     


    

 


(b)
Investor Prepayments; No Share Issuance or Sales until Fully Paid. Upon the consummation of any Investor Prepayment, the
aggregate outstanding Restricted Principal under this Note shall automatically become Unrestricted Principal hereunder, on a dollar-for-dollar
basis, in an amount equal to the aggregate amount of cash paid in such Investor Prepayment. Notwithstanding anything herein to
the contrary, the shares of Common Stock issuable upon conversion of Restricted Principal hereunder shall not be issued by the
Company and may not be sold by Holder until such portion of the Investor Note equivalent to the Restricted Principal subject to
such conversion (each, an “Investor Prepayment Amount”) has been Fully Paid (as defined below) pursuant to
an Investor Prepayment or otherwise upon maturity of the Investor Note (to the Company or to such other Persons as directed by
the Company in writing) and such Restricted Principal becomes Unrestricted Principal in accordance with the preceding sentence.
“Fully Paid” means, with respect to any applicable Investor Prepayment, that the Holder shall have either (x)
delivered evidence to the Company that the Holder instructed its bank or other financial institution, with respect to an account
of the Holder (or an affiliate of the Holder) containing at least an amount in cash equal to the applicable Investor Prepayment
Amount, to deliver such Investor Prepayment Amount from such account by wire transfer to the Company in accordance with wire instructions
set forth in the Flow of Funds Letter (as defined in the Securities Purchase Agreement) (unless modified by the Company prior
to the date of such Investor Prepayment by delivery to the Holder of new wire instructions, duly executed by an executive officer
of the Company, on letterhead of the Company), or (y) if the Company and the Holder have accounts at the same bank or other financial
institution, by an internal “ledger” transfer by such financial institution of such Investor Prepayment Amount, in
each case, as evidenced by either an e-mail or other written or oral confirmation by the applicable receiving financial institution
that such transfer has been instructed of such Investor Prepayment Amount.


 


(c)
Prohibited Transfer or Severability Reduction. Upon any Prohibited Transfer (as defined in the Investor Note) of, or Severability
Event (as defined in the Investor Note) under, the Investor Note, (x) the Investor Note shall be deemed paid in full and shall
be null and void, and (y) 75% of the remaining Restricted Principal of this Note shall be automatically cancelled (with the remaining
25% of the Restricted Principal of this Note automatically becoming Unrestricted Principal hereunder).


 


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


 


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


 




    	3



     


    

 


(f)
Grant of Security Interest. The Company hereby grants and pledges to the Holder a continuing security interest in the Investor
Note of the Holder, 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 this Note. Such security
interest constitutes a valid, first priority security interest in the Collateral, and will constitute a valid, first priority
security interest in later-acquired Collateral. Notwithstanding any filings undertaken related to the Holder’s rights under
the Nevada Uniform Commercial Code, the Holder’s Lien (as defined in Section 14(c) below) on the Collateral shall remain
in effect for so long as any Restricted Principal remains outstanding.


 


(g)
Order of Conversion and/or Redemption. Notwithstanding anything herein to the contrary, with respect to any conversion
or redemption hereunder, as applicable, the Company shall convert or redeem, as applicable, First, all accrued and unpaid
Interest hereunder and under any other Series B Notes held by such Holder, Second, all accrued and unpaid Late Charges
on any Principal and Interest hereunder and under any other Series B Notes held by such Holder, Third, all other amounts
outstanding (other than Principal) hereunder and under any other Series B Notes held by such Holder and, Fourth, all Principal
(other than Restricted Principal) outstanding hereunder and under any other Series B Notes held by such Holder, in each case,
prior to any conversion or redemption, as applicable, of any Restricted Principal hereunder, in each case, allocated pro rata
among this Note and such other Series B Notes held by such Holder.]


 


2.
DEFAULT INTEREST; DEFAULT RATE. No Interest shall accrue hereunder unless and until an Event of Default (as defined below)
has occurred. From and after the occurrence and during the continuance of any Event of Default, Interest shall accrue hereunder
at eighteen percent (18.0%) per annum (the “Default Rate”) and shall be computed on the basis of a 360-day
year and twelve 30-day months, shall compound each calendar month and shall be payable in arrears on the first Trading Day of
each such calendar month in which Interest accrues hereunder (each, an “Interest Date”). Accrued and unpaid
Interest, if any, shall also be payable by way of inclusion of such Interest in the Conversion Amount (as defined below) on each
Conversion Date (as defined below) 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 (as defined in Section 4(a) below). In the event that such Event of
Default is subsequently cured (and no other Event of Default then exists (including, without limitation, for the Company’s
failure to pay such Interest at the Default Rate on the applicable Interest Date)), Interest shall cease to accrue hereunder as
of the calendar day immediately following the date of such cure; provided that the Interest as calculated and unpaid during the
continuance of such Event of Default shall continue to apply to the extent relating to the days after the occurrence of such Event
of Default through and including the date of such cure of such Event of Default.


 




    	4



     


    




 


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 of the Company (the “Transfer Agent”)) that may be payable with respect
to the issuance and delivery of Common Stock upon conversion of any Conversion Amount.


 


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


 


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


 


(ii)
“Conversion Price” means, as of any Conversion Date or other date of determination, $1.00, subject to adjustment
as provided herein.


 




    	5



     


    




 


(c)
Mechanics of Conversion.


 


(i)
Optional Conversion. To convert any Conversion Amount into shares of Common Stock on any date (a “Conversion Date”),
the Holder shall deliver (whether via facsimile, electronic mail or otherwise), for receipt on or prior to 11:59 p.m., New York
time, on such date, a copy of an executed notice of conversion in the form attached hereto as Exhibit I (the “Conversion
Notice”) to the Company. If required by Section 3(c)(iii), within two (2) 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 the date of receipt of a Conversion Notice, the Company shall transmit by facsimile or electronic mail an
acknowledgment of confirmation and representation as to whether such shares of Common Stock may then be resold pursuant to Rule
144 or an effective and available registration statement, in the form attached hereto as Exhibit II, of receipt of such
Conversion Notice to the Holder and 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 second (2nd) 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 two (2) 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, [INSERT IN SERIES B NOTES ONLY: (x)] 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 [INSERT IN SERIES B NOTES ONLY: and (y) the amount of Restricted Principal converted, if any, shall be 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.


 




    	6



     


    

 


(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 conversion 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 corresponding to all
or any portion of the number of shares of Common Stock issuable upon such conversion that the Holder is entitled to receive from
the Company and has not received from the Company in connection with such Conversion Failure or Notice Failure, as applicable
(a “Buy-In”), then, in addition to all other remedies available to the Holder, the Company shall, within two
(2) 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.


 




    	7



     


    

 


(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 [INSERT IN SERIES B NOTES ONLY: and
Restricted Principal] 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) [INSERT IN SERIES B NOTES ONLY: or Restricted Principal becoming unrestricted] and
the dates of such conversions [INSERT IN SERIES B NOTES ONLY:, Investor Prepayments] and/or payments (as the case may be) or shall
use such other method, reasonably satisfactory to the Holder and the Company, so as not to require physical surrender of this
Note upon conversion. If the Company does not update the Register to record such Principal, Interest and Late Charges converted
and/or paid (as the case may be) [INSERT IN SERIES B NOTES ONLY: or Restricted Principal becoming unrestricted] and the dates
of such conversions, [INSERT IN SERIES B NOTES ONLY: Investor Prepayment] and/or payments (as the case may be) within two (2)
Business Days of such occurrence, then the Register shall be automatically deemed updated to reflect such occurrence.


 


(iv)
Pro Rata Conversion; Disputes. In the event that the Company receives a Conversion Notice from more than one holder of
Notes for the same Conversion Date and the Company can convert some, but not all, of such portions of the Notes submitted for
conversion, the Company, subject to Section 3(d), shall convert from each holder of Notes electing to have Notes converted on
such date a pro rata amount of such holder’s portion of its Notes submitted for conversion based on the principal amount
of Notes submitted for conversion on such date by such holder relative to the aggregate principal amount of all Notes submitted
for conversion on such date. In the event of a dispute as to the number of shares of Common Stock issuable to the Holder in connection
with a conversion of this Note, the Company shall issue to the Holder the number of shares of Common Stock not in dispute and
resolve such dispute in accordance with Section 24.


 




    	8



     


    




 


(d)
Limitations on Conversions.


 


(i)
Beneficial Ownership. The Company shall not effect the conversion of any portion of this Note, and the Holder shall not
have the right to convert any portion of this Note pursuant to the terms and conditions of this Note and any such conversion shall
be null and void and treated as if never made, to the extent that after giving effect to such conversion, the Holder together
with the other Attribution Parties collectively would beneficially own in excess of 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.


 




    	9



     


    

 


(ii)
Principal Market Regulation. The Company shall not issue any shares of Common Stock upon conversion of this Note or otherwise
pursuant to the terms of this Note (taken together with the issuance of such shares upon the exercise of the Warrants) 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 or the Warrants (as the case may be) 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), 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 in excess of such amount or (B) obtains a written opinion from 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 or exercise (as the case may be) of any Notes or any of the Warrants or otherwise
pursuant to the terms of the Notes or the Warrants, shares of Common Stock in an amount greater than the product of (i) the Exchange
Cap as of the Issuance Date multiplied by (ii) the quotient of (1) the original principal amount of Notes issued to such Buyer
pursuant to the Securities Purchase Agreement on the Closing Date (as defined in the Securities Purchase Agreement) divided by
(2) 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 and exercise in full of a holder’s Notes and Warrants, 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 Notes and such holder’s exercise in full of such Warrants shall be allocated, to the respective Exchange Cap
Allocations of the remaining holders of Notes and related Warrants on a pro rata basis in proportion to the shares of Common Stock
underlying the Notes and related Warrants then held by each such holder of Notes and related Warrants. At any time after the Stockholder
Meeting Deadline (as defined in the Securities Purchase Agreement), 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”), the Company shall pay cash in
exchange for the cancellation of such portion of this Note convertible into such Exchange Cap Shares 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 of any Buy-In related thereto, 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”).


 




    	10



     


    

 


(e)
Right of Alternate Conversion Upon an Event of Default.


 


(i)
General. Subject to Section 3(d), at any time during an Event of Default Redemption Right Period (regardless of whether
such Event of Default has been cured or if the Holder has delivered an Event of Default Redemption Notice to the Company), the
Holder may, at the Holder’s option, convert (each, an “Alternate Conversion”, and the date of such Alternate
Conversion, each, an “Alternate Conversion Date”) all, or any part of, this Note into shares of Common Stock
(such portion of this Note subject to such Alternate Conversion, the “Alternate Conversion Amount”) 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 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; provided that in the event of the Conversion Floor Price Condition,
on the applicable Alternate Conversion Date the Company shall also deliver to the Holder the applicable Alternate Conversion Floor
Amount. 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).


 


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);


 




    	11



     


    

 


(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, 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));


 


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


 


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


 


(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, solely to extent such failure remains uncured for a period of at least one (1) Trading Day;


 




    	12



     


    

 


(vii)
the Company fails to remove any restrictive legend on any certificate or any shares of Common Stock issued to the Holder upon
conversion or exercise (as the case may be) of any Securities (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) days;


 


(viii)
the occurrence of any default under, redemption of or acceleration prior to maturity of at least an aggregate of $150,000 of Indebtedness
(as defined in the Securities Purchase Agreement) of the Company or any of its Subsidiaries, other than with respect to any Other
Notes;


 


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


 


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


 


(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;


 




    	13



     


    

 


(xii)
a final judgment or judgments for the payment of money aggregating in excess of $150,000 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
$150,000 amount set forth above so long as the Company provides the Holder a written statement from such insurer or indemnity
provider (which written statement shall be reasonably satisfactory to the Holder) to the effect that such judgment is covered
by insurance or an indemnity and the Company or such Subsidiary (as the case may be) will receive the proceeds of such insurance
or indemnity within thirty (30) days of the issuance of such judgment;


 


(xiii)
the Company and/or any Subsidiary, individually or in the aggregate, either (i) fails to pay, when due, or within any applicable
grace period, any payment with respect to any Indebtedness in excess of $150,000 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 $150,000, which
breach or violation permits the other party thereto to declare a default or otherwise accelerate amounts due thereunder, or (ii)
suffer to exist any other circumstance or event that would, with or without the passage of time or the giving of notice, result
in a default or event of default under any agreement binding the Company or any Subsidiary, which default or event of default
would or is likely to have a material adverse effect on the business, assets, operations (including results thereof), liabilities,
properties, condition (including financial condition) or prospects of the Company or any of its Subsidiaries, individually or
in the aggregate;


 


(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 the representations or warranties subject to material adverse effect on materiality
limitation, 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 two (2) consecutive Trading Days;


 




    	14



     


    

 


(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)
if Michael Panosian ceases to be the chief executive officer of the Company or Jolie Kahn ceases to be an officer of the Company
and a qualified replacement, acceptable to the Holder, in its sole discretion, is not appointed in either case within fifteen
(15) Business Days;


 


(xvii)
any breach or failure in any respect by the Company or any Subsidiary to comply with any provision of Section 14 of this Note;


 


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


 


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


 


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


 


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


 


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


 




    	15



     


    

 


(b)
Notice of an Event of Default: 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 sixtieth (60th) Trading Day after the later of (x) the date such
Event of Default is cured and (y) the Holder’s receipt of an Event of Default Notice that includes (I) a reasonable description
of the applicable Event of Default, (II) a certification as to whether, in the opinion of the Company, such Event of Default is
capable of being cured and, if applicable, a reasonable description of any existing plans of the Company to cure such Event of
Default and (III) a certification as to the date the Event of Default occurred and, if cured on or prior to the date of such Event
of Default Notice, the applicable Event of Default Right Expiration Date, the Holder may require the Company to redeem (regardless
of whether such Event of Default has been cured on or prior to the Event of Default Right Expiration Date) all or any portion
of this Note by delivering written notice thereof (the “Event of Default Redemption Notice”) to the Company,
which Event of Default Redemption Notice shall indicate the portion of this Note the Holder is electing to redeem. Each portion
of this Note subject to redemption by the Company pursuant to this Section 4(b) shall be redeemed by the Company at a price equal
to the greater of (i) the product of (A) the Conversion Amount to be redeemed multiplied by (B) the Redemption Premium and (ii)
the product of (X) the Conversion Rate with respect to the Conversion Amount in effect at such time as the Holder delivers an
Event of Default Redemption Notice multiplied by (Y) the product of (1) the Redemption Premium multiplied by (2) the greatest
Closing Sale Price of the Common Stock on any Trading Day during the period commencing on the date immediately preceding such
Event of Default and ending on the date the Company makes the entire payment required to be made under this Section 4(b) (the
“Event of Default Redemption Price”). [INSERT IN SERIES B NOTES ONLY (except, solely if any Restricted Principal
is included in such Conversion Amount subject to redemption pursuant to the applicable Event of Default Notice (such amount of
Restricted Principal, the “Eligible Event of Default Restricted Principal”) and the Holder elects to effect
Event of Default Netting (as defined in the Investor Note) pursuant to the terms of the Investor Note, such Event of Default Redemption
Price shall be reduced, on a dollar-for-dollar basis, by such portion of the Eligible Event of Default Restricted Principal subject
to such Event of Default Netting (such amount of Eligible Event of Default Restricted Principal, the “Event of Default
Restricted Principal Amount”) and such Event of Default Restricted Principal Amount shall be satisfied on such Redemption
Date by Event of Default Netting (as defined in the Investor Note) (solely if the applicable Event of Default does not include
a Bankruptcy Event of Default) or automatically satisfied on such Redemption Date by Event of Default Bankruptcy Netting (as defined
in the Investor Note) (solely if the applicable Event of Default includes a Bankruptcy Event of Default), as applicable, with
respect thereto)]. 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 satisfied 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, [INSERT IN SERIES B NOTE ONLY: (x)] 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 [INSERT IN SERIES B NOTE ONLY: and (y) the amount of Restricted Principal redeemed, if any, shall be set forth
in the applicable 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.


 




    	16



     


    

 


(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, [INSERT IN SERIES B NOTES ONLY:, except that any Restricted Principal then outstanding
hereunder shall be satisfied through Bankruptcy Event of Default Netting (as defined in the Investor Note) (in lieu of such cash
payment hereunder)]; 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 default rate equal to the principal amounts then outstanding and the default
rates of the Notes [INSERT IN SERIES B NOTES ONLY: and, if applicable, a restricted principal equal in amount to the Restricted
Principal then outstanding hereunder], respectively, 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.


 




    	17



     


    

 


(b)
Notice of a Change of Control; Redemption Right. No sooner than twenty (20) Trading Days nor later than ten (10) Trading
Days prior to the consummation of a Change of Control (the “Change of Control Date”), but not prior to the
public announcement of such Change of Control, the Company shall deliver written notice thereof via facsimile or electronic mail
and overnight courier to the Holder (a “Change of Control Notice”). At any time during the period beginning
after the Holder’s receipt of a Change of Control Notice or the Holder becoming aware of a Change of Control if a Change
of Control Notice is not delivered to the Holder in accordance with the immediately preceding sentence (as applicable) and ending
on the later of twenty (20) Trading Days after (A) consummation of such Change of Control or (B) the date of receipt of such Change
of Control Notice, the Holder may require the Company to redeem all or any portion of this Note by delivering written notice thereof
(“Change of Control Redemption Notice”) to the Company, which Change of Control Redemption Notice shall indicate
the Conversion Amount the Holder is electing to redeem. The portion of this Note subject to redemption pursuant to this Section
5(b) shall be redeemed by the Company in cash at a price equal to the greatest of (i) the product of (w) the Change of Control
Redemption Premium multiplied by (y) the Conversion Amount being redeemed, (ii) the product of (x) the Change of Control Redemption
Premium multiplied by (y) the product of (A) the Conversion Amount being redeemed multiplied by (B) the quotient determined by
dividing (I) the greatest Closing Sale Price of the shares of Common Stock during the period beginning on the date immediately
preceding the earlier to occur of (1) the consummation of the applicable Change of Control and (2) the public announcement of
such Change of Control and ending on the date the Holder delivers the Change of Control Redemption Notice by (II) the Conversion
Price then in effect and (iii) the product of (y) the Change of Control Redemption Premium multiplied by (z) the product of (A)
the Conversion Amount being redeemed multiplied by (B) the quotient of (I) the aggregate cash consideration and the aggregate
cash value of any non-cash consideration per share of Common Stock to be paid to the holders of the shares of Common Stock upon
consummation of such Change of Control (any such non-cash consideration constituting publicly-traded securities shall be valued
at the highest of the Closing Sale Price of such securities as of the Trading Day immediately prior to the consummation of such
Change of Control, the Closing Sale Price of such securities on the Trading Day immediately following the public announcement
of such proposed Change of Control and the Closing Sale Price of such securities on the Trading Day immediately prior to the public
announcement of such proposed Change of Control) divided by (II) the Conversion Price then in effect (the “Change of
Control Redemption Price”) [INSERT IN SERIES B NOTES ONLY (except, solely if any Restricted Principal is included in
such Conversion Amount subject to redemption pursuant to the applicable Change of Control Notice (such Restricted Principal, the
“Eligible Change of Control Restricted Principal”) and the Holder elects to effect Redemption Netting (as defined
in the Investor Note) pursuant to the terms of the Investor Note, such Change of Control Redemption Price shall be reduced, on
a dollar-for-dollar basis, by such portion of the Eligible Change of Control Restricted Principal subject to such Redemption Netting
(such amount of Eligible Change of Control Restricted Principal, the “Change of Control Restricted Principal Amount”)
and such Change of Control Restricted Principal Amount shall be automatically satisfied on such Redemption Date by Redemption
Netting (as defined in the Investor Note) with respect thereto)]. Redemptions required by this Section 5(b) shall be made in accordance
with the provisions of Section 12 and shall have priority to payments to shareholders 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(b), 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, [INSERT IN SERIES B NOTE ONLY: (x)] 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
[INSERT IN SERIES B NOTE ONLY: and (y) the amount of Restricted Principal redeemed, if any, shall be set forth in the applicable
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.


 




    	18



     


    

 


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 (and, if such Purchase Right has an expiration date, maturity
date or other similar provision, such term shall be extended by such number of days held in abeyance, if applicable) 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 (and, if
such Purchase Right has an expiration date, maturity date or other similar provision, such term shall be extended by such number
of days held in abeyance, if applicable)) to the same extent as if there had been no such limitation).


 




    	19



     


    

 


(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.


 


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
grants, issues or sells (or enter into any agreement to grant issue or sell), or in accordance with this Section 7(a) is deemed
to have granted, 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:


 




    	20



     


    

 


(i)
Issuance of Options. If the Company in any manner grants, issues or sells (or enters into any agreement to grant, issue
or sell) 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
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” 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, issuance 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 (or may become issuable assuming
all possible market conditions) 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) with respect to any one share of Common Stock upon the granting,
issuance 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 consisting
of cash, debt forgiveness, assets or any other property 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.


 


(ii)
Issuance of Convertible Securities. If the Company in any manner issues or sells (or enters into any agreement to issue
or sell) 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 at any time issuable (or may become issuable assuming all
possible market conditions) 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) with respect to any one share of Common Stock upon the issuance or sale of such Convertible Security plus
the value of any other consideration received or receivable consisting of cash, debt forgiveness, assets or other property 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.


 




    	21



     


    

 


(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.


 


(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, each, a “Secondary
Security” and each applicable Secondary Security, together with the Primary Security, each a “Unit”),
together comprising one integrated transaction, the aggregate consideration per share of Common Stock with respect to such Primary
Security shall be deemed to be the lower of (x) the purchase price of such Unit, (y) if such Primary Security is an Option and/or
Convertible Security, the lowest price per share for which one share of Common Stock is at any time issuable upon the exercise
or conversion of the Primary Security in accordance with Sections 7(a)(i) or 7(a)(ii) above and (z) the lowest VWAP of the shares
of Common Stock on any Trading Day during the five (5) Trading Day period (the “Adjustment Period”) immediately
following the public announcement of such Dilutive Issuance (for the avoidance of doubt, if such public announcement is released
prior to the opening of the Principal Market on a Trading Day, such Trading Day shall be the first Trading Day in such five Trading
Day period and if this Note is converted, on any given Conversion Date during any such Adjustment Period, solely with respect
to such portion of this Note converted on such applicable Conversion Date, such applicable Adjustment Period shall be deemed to
have ended on, and included, the Trading Day immediately prior to such Conversion Date). 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
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 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 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.


 




    	22



     


    

 


(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
6, Section 16 or Section 7(a), if the Company at any time on or after the Subscription Date subdivides (by any stock split, stock
dividend, stock combination, recapitalization or other similar transaction) one or more classes of its outstanding shares of Common
Stock into a greater number of shares, the Conversion Price in effect immediately prior to such subdivision will be proportionately
reduced. Without limiting any provision of Section 4(c) or Section 7(a), if the Company at any time on or after the Subscription
Date combines (by any stock split, stock dividend, stock combination, recapitalization or other similar transaction) one or more
classes of its outstanding shares of Common Stock into a smaller number of shares, the Conversion Price in effect immediately
prior to such combination will be proportionately increased. Any adjustment pursuant to this Section 7(b) shall become effective
immediately after the effective date of such subdivision or combination. If any event requiring an adjustment under this Section
7(b) occurs during the period that a Conversion Price is calculated hereunder, then the calculation of such Conversion Price shall
be adjusted appropriately to reflect such event.


 




    	23



     


    

 


(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 (whether initially or pursuant to any subsequent amendment
thereof) 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. In addition, from and after the date the Company enters into
such agreement or issues any such Variable Price Securities, for purposes of calculating the Pre-Installment Conversion Price
and Installment Conversion Price as of any time of determination, the “Conversion Price” as used therein shall mean
the lower of (x) the Conversion Price as of such time of determination and (y) the Variable Price as of such time of determination.


 


(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(a) above), then on the sixteenth (16th) Trading Day immediately following such Stock Combination Event Date, the
Conversion Price then in effect on such sixteenth (16th) Trading Day (after giving effect to the adjustment in Section
7(a) 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(e), 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.


 




    	24



     


    

 


(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. Subject to the rules and regulations of the Principal Market, the Company may at any time
during the term of this Note, with the prior written consent of the Required Holders (as defined in the Securities Purchase Agreement),
reduce the then current Conversion Price of each of the Notes to any amount and for any period of time deemed appropriate by the
board of directors of the Company.


 


8.
INSTALLMENT CONVERSION OR REDEMPTION.


 


(a)
General. On each applicable Installment Date, provided there has been no Equity Conditions Failure, the Company shall pay
to the Holder of this Note the applicable Installment Amount due on such date by converting such Installment Amount in accordance
with this Section 8 (a “Installment Conversion”); provided, however, that the Company may, at
its option following notice to the Holder as set forth below, pay the Installment Amount by redeeming such Installment Amount
in cash (a “Installment Redemption”) or by any combination of an Installment Conversion and an Installment
Redemption so long as all of the outstanding applicable Installment Amount due on any Installment Date shall be converted and/or
redeemed by the Company on the applicable Installment Date, subject to the provisions of this Section 8. On the date which is
the twenty-sixth (26th) Trading Day prior to each Installment 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 two (2) 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).


 




    	25



     


    

 


(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, (A) 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 and (B) in the event of
the Conversion Floor Price Condition, the Company shall deliver to the Holder the applicable Conversion Installment Floor Amount,
provided that the Equity Conditions are then satisfied (or waived in writing by the Holder) on such Installment Date and an Installment
Conversion is not otherwise prohibited under any other provision of this Note. The number of shares of Common Stock to be delivered
upon such Installment Conversion shall be reduced by the number of any Pre-Installment Conversion Shares delivered in connection
with such Installment Date. If an Event of Default occurs during any applicable Equity Conditions Measuring Period, then, at the
option of the Holder designated in writing to the Company, either (i) the Holder shall return to the Company all, or any part,
of such Pre-Installment Conversion Shares delivered in connection with the applicable Installment Date or (ii) the Conversion
Amount used to calculate the Event of Default Redemption Price shall be reduced by the product of (x) the Installment Conversion
Amount applicable to such Installment Date (as adjusted downward proportionally with respect to any Pre-Installment Conversion
Shares returned to the Company pursuant to clause (i) above) multiplied by (y) the Conversion Share Ratio. If the Company confirmed
(or is deemed to have confirmed by operation of Section 8(a)) the conversion of the applicable Installment Conversion Amount,
in whole or in part, and there was no Equity Conditions Failure as of the applicable Installment Notice Date (or is deemed to
have certified that the Equity Conditions in connection with any such conversion have been satisfied by operation of Section 8(a))
but an Equity Conditions Failure occurred between the applicable Installment Notice Date and any time through the applicable Installment
Date (the “Interim Installment Period”), the Company shall provide the Holder a subsequent notice to that effect.
If there is an Equity Conditions Failure (which is not waived in writing by the Holder) during such Interim Installment Period
or an Installment Conversion is not otherwise permitted under any other provision of this Note, then, at the option of the Holder
designated in writing to the Company, the Holder may require the Company to do any one or more of the following: (i) the Company
shall redeem all or any part designated by the Holder of the unconverted Installment Conversion Amount (such designated amount
is referred to as the “Designated Redemption Amount”) and the Company shall pay to the Holder within two (2)
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 second (2nd) 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(a) as if the Company failed to pay
the applicable Installment Redemption Price (as defined below) and all other rights under this Note (including, without limitation,
such failure constituting an Event of Default described in Section 4(a)(iv)). 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 number of shares of Common
Stock equal to such excess shall constitute a credit, at the option of the Holder, against the number of shares of Common Stock
to be issued to the Holder either (x) in any conversion of this Note pursuant to Section 4(c)(i) as selected by the Holder or
(y) on the Maturity Date, or, if earlier, the last 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.


 




    	26



     


    

 


(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.


 




    	27



     


    

 


(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 second (2nd) 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, and based
on the same Pre-Installment Conversion Price as, 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 total adjustments to the Installment
Conversion Amount with respect to the Installment Date related to such Current Acceleration (as adjusted for any other Accelerations
and Deferrals during such Acceleration Measuring Period), exceeds five (5) times the Installment Amount with respect to the Installment
Date related to such Current Acceleration (except calculated with a Base Installment Amount from the Third Installment Period
and disregarding any Accelerations or Deferrals with respect to the Installment Date related to such Current Acceleration).


 




    	28



     


    

 


9.
REDEMPTIONS AT THE COMPANY’S ELECTION.


 


(a)
Company Optional Redemption. At any time after the later of (x) thirty (30) calendar days after the Applicable Date (as
defined in the Securities Purchase Agreement) and (y) the date 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 125% of the greater of (i) the Conversion Amount being redeemed
as of the Company Optional Redemption Date and (ii) the product of (1) the Conversion Rate with respect to the Conversion 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) [INSERT IN SERIES B NOTES ONLY (except, solely if any Restricted Principal is included in such Conversion Amount
subject to redemption pursuant to the applicable Company Optional Redemption (such amount of Restricted Principal, the “Eligible
Company Optional Redemption Restricted Principal”) and the Holder elects to effect Redemption Netting pursuant to the
terms of the Investor Note, such Company Optional Redemption Price shall be reduced, on a dollar-for-dollar basis, by such portion
of the Eligible Company Optional Redemption Restricted Principal subject to such Redemption Netting (such amount of Eligible Company
Optional Redemption Restricted Principal, the “Company Optional Redemption Restricted Principal Amount”) and
such Company Optional Redemption Restricted Principal Amount shall be automatically satisfied on such Redemption Date by Redemption
Netting with respect thereto)]. 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 and fifty (150) 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.


 




    	29



     


    

 


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. Notwithstanding anything herein to the contrary, if after the sixty (60) calendar day anniversary of the Issuance
Date, the Holder is not permitted to convert this Note in full for any reason (other than pursuant to restrictions set forth in
Section 3(d) hereof), the Company shall use its best efforts to promptly remedy such failure, including, without limitation, obtaining
such consents or approvals as necessary to permit such conversion into shares of Common Stock.


 


11.
RESERVATION OF AUTHORIZED SHARES.


 


(a)
Reservation. So long as any Notes remain outstanding, the Company shall at all times reserve at least 200% 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 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) at the Alternate Conversion Price then in effect
(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 shareholders 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 shareholder with a proxy statement and shall use its best efforts to solicit its shareholders’ approval of such increase
in authorized shares of Common Stock and to cause its board of directors to recommend to the shareholders that they approve such
proposal. In the event that the Company is prohibited from issuing shares of Common Stock pursuant to the terms of this Note 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.







 




    	30



     


    






 


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 (each, an “Event
of Default Redemption Date”). 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 (each, a “Change of Control Redemption
Date”). 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. [INSERT
IN SERIES B NOTES ONLY: Notwithstanding the foregoing, if any Restricted Principal is included in such Conversion Amount subject
to redemption pursuant to the applicable Redemption Notice (such amount of Restricted Principal, the “Eligible Redemption
Restricted Principal”) and the Holder elects to effect Redemption Netting pursuant to the terms of the Investor Note,
such Redemption Price shall be reduced, on a dollar-for-dollar basis, by such portion of the Eligible Redemption Restricted Principal
subject to redemption pursuant to the applicable Redemption Notice (such amount of Eligible Redemption Restricted Principal, the
“Redemption Restricted Principal Amount”) and such Redemption Restricted Principal Amount shall be automatically
satisfied on the applicable Redemption Date by either Redemption Netting (if such redemption is pursuant to Section 5(b) or Section
9 above), Event of Default Netting (if such redemption is pursuant to Section 3(e) without regard to the occurrence of any Bankruptcy
Event of Default) or Bankruptcy Event of Default Netting (if such redemption is pursuant to Section 3(e) as a result of the occurrence
of a Bankruptcy Event of Default)]. 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) the greater of (x) the Floor Price and (y) 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) the
greater of (x) the Floor Price and (y) 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 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.


 




    	31



     


    




 


(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 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 two (2) Business Days prior to the Company’s receipt of the Holder’s
applicable Redemption Notice and ending on and including the date which is two (2) 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.


 


13.
VOTING RIGHTS. The Holder shall have no voting rights as the holder of this Note, except as required by law (including,
without limitation, Chapter 78 of the Nevada Revised Statute) and as expressly provided in this Note.


 


14.
COVENANTS. Until all of the Notes have been converted, redeemed or otherwise satisfied in accordance with their terms:


 


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


 


(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.


 


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


 


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


 




    	32



     


    




 


(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.


 




    	33



     


    




 


(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
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 or the Warrants.


 


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


 


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


 




    	34



     


    




 


(q)
Controlled Accounts; Controlled Account Release.


 


(i)
General. The Company shall establish and maintain cash management services of a type and on terms reasonably satisfactory
to Holder at and each bank listed on Schedule 14(q)(i) attached hereto (each a “Controlled Account Bank”)
and cause all cash and cash equivalents of the Company or any of its Subsidiaries to be held in Accounts (as defined in the Security
Agreement) at one or more Controlled Account Banks in accordance therewith. Subject to the foregoing, the Company shall establish
and maintain agreements with the Collateral Agent (as each such term is defined in the Security Agreement) and each Controlled
Account Bank, in form and substance reasonably acceptable to the Collateral Agent and the Required Holders (each, a “Controlled
Account Agreement”), with respect to each account maintained at such bank on behalf of Company and/or its Subsidiaries
(each such account a “Controlled Account” and collectively, the “Controlled Accounts”).
Each such Controlled Account Agreement shall provide, among other things, that (A) the Controlled Account Bank will comply with
any and all instructions originated by the Collateral Agent directing the disposition of the funds in the Controlled Accounts
without further consent by the Company or any such Subsidiaries, (B) the Controlled Account Bank waives, subordinates or agrees
not to exercise any rights of setoff or recoupment or any other claim against the applicable Controlled Account other than for
payment of its service fees and other charges directly related to the administration of such Controlled Account and for returned
checks or other items of payment, and (C) with respect to each Controlled Account, upon the instruction of Collateral Agent (an
“Activation Instruction”), the Controlled Account Bank shall not comply with any instructions, directions or
orders of any form with respect to the Controlled Accounts other than instructions, directions or orders originated by Collateral
Agent. The Collateral Agent shall not issue an Activation Instruction with respect to the Controlled Accounts unless an Event
of Default has occurred and is continuing at the time such Activation Instruction is issued.


 


(ii)
Additional Controlled Account Agreements. If at any time on or after the Closing Date, the average daily balance of any
Account of the Company or any of its Subsidiaries that is not subject to a Controlled Account Agreement in the United States,
in form and substance reasonably satisfactory to the Collateral Agent and the Required Holders, in favor of the Collateral Agent
exceeds $50,000 (the “Maximum Per Account Free Cash Amount”) during any calendar month (including the calendar
month in which the Closing Date occurs), the Company shall either (x) within twenty-one (21) calendar days following the last
day of such calendar month, deliver to the Collateral Agent a Controlled Account Agreement, in form and substance reasonably satisfactory
to the Collateral Agent, duly executed by the Company and the depositary bank in which such Account is maintained or (y) within
two (2) Business Days following such date, effect a transfer to a Controlled Account of a cash amount sufficient to reduce the
amount of the Company’s or the applicable Subsidiary’s cash held in such Account to an amount not in excess of the
Maximum Per Account Free Cash Amount.


 




    	35



     


    




 


(iii)
Maximum Free Cash Amount. Notwithstanding anything to the contrary contained in Section 14(q)(ii) above, and without limiting
any of the foregoing, if at any time on or after the date that is twenty-one (21) calendar days following the Closing Date, the
total aggregate amount of the Company’s and any of its Subsidiaries, in the aggregate, cash that is not held in a Controlled
Account exceeds $150,000, in the aggregate, with respect to any Accounts worldwide or exceeds $50,000, in the aggregate, with
respect to any Accounts in the United States (the “Maximum Free Cash Amount”), the Company shall within two
(2) Business Days following such date, effect a transfer to a Controlled Account of a cash amount sufficient to reduce the total
aggregate amount of the Company’s and its Subsidiaries’, as applicable, cash that is not held in a Controlled Account
to an amount not in excess of the Maximum Free Cash Amount.


 


(r)
Financial Test; Announcement of Operating Results.


 


(i)
Financial Tests


 


(1)
Available Cash Test. At any time any Notes remain outstanding, the Company’s Available Cash as of each Fiscal Quarter
shall equal or exceed, as applicable: $1,500,000 (the “Available Cash Test”).


 


(2)
Minimum Cash Flow Test. At any time any Notes remain outstanding, the Company’s Free Cash Flow shall not be less
than $1,000,000 (the “Free Cash Flow Test”, and together with the Available Cash Test, the “Financial
Tests”).


 


(ii)
Operating Results Announcement. Commencing with the Fiscal Quarter ending September 30, 2019, the Company shall publicly
disclose and disseminate (such date, the “Announcement Date”), if any Financial Tests have not been satisfied
for such Fiscal Quarter or Fiscal Year, as applicable, a statement to that effect no later than (x) the forty-fifth (45th)
day after the end of such Fiscal Quarters ending June 30 and December 31, as applicable or (y) the ninetieth (90th)
day after the end of the six-month period ending September 30 and such Fiscal Year, as applicable, and such announcement, in each
case, shall include a statement to the effect that the Company is (or is not, as applicable) in breach of any Financial Test for
such Fiscal Quarter or Fiscal Year, as applicable. 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 that is the case. 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 a Financial Test 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 an Annual Report on Form 10-K, Quarterly Report on Form 10-Q or Current Report on Form 8-K, or otherwise) the Financial Covenant
Failure Notice and the fact that an Event of Default has occurred under the Notes.


 




    	36



     


    




 


(s)
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.


 


15.
SECURITY. This Note and the Other Notes are secured to the extent and in the manner set forth in the Transaction Documents
(including, without limitation, [INSERT IN THE SERIES B NOTE ONLY: this Note,] the Security Agreement, the other Security Documents
and the Guaranties).]


 


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).


 




    	37



     


    




 


17.
AMENDING THE TERMS OF THIS NOTE. Except for Section 3(d), which may not be amended, modified or waived by the parties hereto,
the prior written consent of the Required Holders (as defined in the Securities Purchase Agreement) shall be required for any
change, waiver or amendment to this Note.


 


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.


 


(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.


 




    	38



     


    




 


(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. No failure
on the part of the Holder to exercise, and no delay in exercising, any right, power or remedy hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise by the Holder of any right, power or remedy preclude any other or further exercise
thereof or the exercise of any other right, power or remedy. In addition, the exercise of any right or remedy of the Holder at
law or equity or under this Note or any of the documents shall not be deemed to be an election of Holder’s rights or remedies
under such documents or at law or equity. 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 specific performance and/or temporary, preliminary and permanent
injunctive or other equitable relief from any court of competent jurisdiction in any such case without the necessity of proving
actual damages and without posting a bond or other security. 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).


 


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.


 




    	39



     


    




 


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 Holder may, at its sole option, select an independent, reputable investment
bank to resolve such dispute.


 




    	40



     


    




 


(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.


 


(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).


 




    	41



     


    




 


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).


 


(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 (except to the extent such amount is simultaneously accruing
Interest at the Default Rate hereunder) shall result in a late charge being incurred and payable by the Company in an amount equal
to interest on such amount at the rate of eighteen percent (18%) per annum from the date such amount was due until the same is
paid in full (“Late Charge”).


 




    	42



     


    




 


26.
CANCELLATION. After all Principal and accrued Interest, Late Charges and other amounts at any time owed on this Note have
been satisfied 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.


 




    	43



     


    




 


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).


 


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.


 




    	44



     


    




 


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)
“Acceleration Floor Amount” means an amount in cash, to be delivered by wire transfer of immediately available
funds pursuant to wire instructions delivered to the Company by the Holder in writing, equal to the product obtained by multiplying
(A) the higher of (I) the highest price that the Common Stock trades at during the twenty (20) Trading Day period ending on the
Trading Day immediately preceding the relevant Conversion Date with respect to such Acceleration and (II) the applicable Installment
Conversion Price and (B) the difference obtained by subtracting (I) the number of shares of Common Stock delivered (or to be delivered)
to the Holder on the applicable Share Delivery Deadline with respect to such Acceleration from (II) the quotient obtain by dividing
(x) the applicable Acceleration Amount that the Holder has elected to be the subject of the applicable Acceleration, by (y) the
applicable Installment Conversion Price without giving effect to clause (x) of such definition.


 


(d)
“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).


 


(e)
“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.


 


(f)
“Alternate Conversion Floor Amount” means an amount in cash, to be delivered by wire transfer of immediately
available funds pursuant to wire instructions delivered to the Company by the Holder in writing, equal to the product obtained
by multiplying (A) the higher of (I) the highest price that the Common Stock trades at on the Trading Day immediately preceding
the relevant Alternate Conversion Date and (II) the applicable Alternate Conversion Price and (B) the difference obtained by subtracting
(I) the number of shares of Common Stock delivered (or to be delivered) to the Holder on the applicable Share Delivery Deadline
with respect to such Alternate Conversion from (II) the quotient obtain by dividing (x) the applicable Conversion Amount that
the Holder has elected to be the subject of the applicable Alternate Conversion, by (y) the applicable Alternate Conversion Price
without giving effect to clause (x) of such definition.


 




    	45



     


    




 


(g)
“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 greater of (x) the Floor Price and (y) 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 VWAP of the Common Stock for each of the three (3) Trading Days with the lowest VWAP of
the Common Stock during the twenty (20) 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) three (3) (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.


 


(h)
“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.


 


(i)
“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.


 


(j)
“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 or otherwise unavailable
for unrestricted use by the Company or any of its Subsidiaries for any reason) as of such date of determination held in bank accounts
of financial banking institutions in the United States of America.


 




    	46



     


    




 


(k)
“Base Installment Amount” means (i) with respect to the first through third Installment Dates hereunder, $[       ]1,
(ii) with respect to the fourth through sixth Installment Dates hereunder, $[       ]2,
and (iii) with respect to the seventh through twelfth Installment Dates hereunder (the “Third Installment Period”),
$[      ]3.


 


(l)
“Bloomberg” means Bloomberg, L.P.


 


(m)
“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.


 


(n)
“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.


 


(o)
“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.


 


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


 


(q)
“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.


 











 








1
Insert 1/36th of the principal amount


2
Insert 1/18th of the principal amount


3
Insert 1/8th of the principal amount 


 




    	47



     


    




 


(r)
“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.


 


(s)
“Common Stock” means (i) the Company’s shares of common stock, $0.001 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.


 


(t)
“Consolidated Capital Expenditures” means, for any period, any cash payments to any Person by the Company or
any of its Subsidiaries, in the aggregate, for property, plant and equipment during such period, reported in accordance with GAAP.


 


(u)
“Consolidated Lease Expense” means, for any period, any lease payments to any Person by the Company or any
of its Subsidiaries, in the aggregate, related to any capital leases and equipment leases made in such period (other than such
payments included in Consolidated Capital Expenditures), recorded in accordance with GAAP.


 


(v)
“Consolidated Net Operating Cash” means, for any period, the net Cash provided by (used in) the business of
the Company and its Subsidiaries, as determined on a consolidated basis in accordance with GAAP.


 


(w)
“Conversion Floor Price Condition” means that the relevant Alternate Conversion Price or Installment Conversion
Price, as applicable, is being determined based on clause (x) of such definitions.


 


(x)
“Conversion Installment Floor Amount” means an amount in cash, to be delivered by wire transfer of immediately
available funds pursuant to wire instructions delivered to the Company by the Holder in writing, equal to the product obtained
by multiplying (i) the higher of (A) the highest price that the Common Stock trades at during the period commencing on the applicable
Installment Notice Date (or the applicable Installment Notice Due Date, if such Installment Notice is not delivered hereunder
with respect to such Installment Date) and ending on the Trading Day immediately preceding the relevant Installment Date and (B)
the applicable Installment Conversion Price and (ii) the difference obtained by subtracting (I) the sum of the aggregate number
of Pre-Installment Conversion Shares and Post-Installment Conversion Shares delivered (or to be delivered) to the Holder in connection
with such Installment Date from (II) the quotient obtain by dividing (x) the applicable Installment Amount subject to such Installment
Conversion, by (y) the applicable Installment Conversion Price without giving effect to clause (x) of such definition.


 




    	48



     


    




 


(y)
“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.


 


(z)
“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.


 


(aa)
“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”.


 


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


 


(cc)
“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.


 


(dd)
“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 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 [INSERT IN SERIES B NOTES ONLY: or amount of Restricted Principal subject to an Investor Prepayment, 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 Registrable Securities shall be eligible for sale pursuant to Rule 144 (as defined
in the Securities Purchase Agreement) without the need for registration under any applicable federal or state securities laws
(in each case, disregarding any limitation on conversion of the Notes, other issuance of securities with respect to the Notes
and exercise of the Warrants) and no Current Information Failure (as defined in the Registration Rights Agreement) exists or is
continuing; (ii) on each day during the period beginning thirty Trading Days prior to the applicable date of determination and
ending on and including the applicable date of determination (the “Equity Conditions Measuring Period”), the
Common Stock (including all Registrable Securities) is listed or designated for quotation (as applicable) on an Eligible Market
and shall not have been suspended from trading on an Eligible Market (other than suspensions of not more than 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 Eligible Market have been threatened (with a reasonable prospect of delisting occurring after giving effect to all applicable
notice, appeal, compliance and hearing periods) or reasonably likely to occur or pending as evidenced by (A) a writing by such
Eligible Market or (B) the Company falling below the minimum listing maintenance requirements of the Eligible Market on which
the Common Stock is then listed or designated for quotation (as applicable); (iii) during the Equity Conditions Measuring Period,
the Company shall have delivered all shares of Common Stock issuable upon conversion of this Note on a timely basis as set forth
in Section 3 hereof and all other shares of capital stock required to be delivered by the Company on a timely basis as set forth
in the other Transaction Documents; (iv) any shares of Common Stock to be issued in connection with the event requiring determination
(or issuable upon conversion of the Conversion Amount being redeemed in the event requiring this determination) may be issued
in full without violating Section 3(d) hereof; (v) any shares of Common Stock to be issued in connection with the event requiring
determination (or issuable upon conversion of the Conversion Amount being redeemed [INSERT IN SERIES B NOTES ONLY: or amount of
Restricted Principal subject to an Investor Prepayment, as applicable] in the event requiring this determination at the Conversion
Price then in effect (without regard to any limitations on conversion set forth herein)) may be issued in full without violating
the rules or regulations of the Eligible Market on which the Common Stock is then listed or designated for quotation (as applicable);
(vi) on each day during the Equity Conditions Measuring Period, no public announcement of a pending, proposed or intended Fundamental
Transaction shall have occurred which has not been abandoned, terminated or consummated; (vii) the Company shall have no knowledge
of any fact that would reasonably be expected to cause (1) any Registration Statement required to be filed pursuant to the Registration
Rights Agreement to not be effective or the prospectus contained therein to not be available for the resale of the applicable
Required Minimum Securities Amount of Registrable Securities in accordance with the terms of the Registration Rights Agreement
or (2) any Registrable Securities to not be eligible for sale pursuant to Rule 144 without the need for registration under any
applicable federal or state securities laws (in each case, disregarding any limitation on conversion of the Notes, other issuance
of securities with respect to the Notes and exercise of the Warrants) and no Current Information Failure exists or is continuing;
(viii) the Holder shall not be in (and no other holder of Notes shall be in) possession of any material, non-public information
provided to any of them by the Company, any of its Subsidiaries or any of their respective affiliates, employees, officers, representatives,
agents or the like; (ix) on each day during the Equity Conditions Measuring Period, the Company otherwise shall have been in compliance
with each, and shall not have breached any representation or warranty in any material respect (other than representations or warranties
subject to material adverse effect or materiality, which may not be breached in any respect) or any covenant or other term or
condition of any Transaction Document, including, without limitation, the Company shall not have failed to timely make any payment
pursuant to any Transaction Document; (x) on each Trading Day during the Equity Conditions Measuring Period, there shall not have
occurred any Volume Failure or Price Failure as of such applicable date of determination; (xi) on the applicable date of determination
(A) no Authorized Share Failure shall exist or be continuing and the applicable Required Minimum Securities Amount of shares of
Common Stock are available under the certificate of incorporation of the Company and reserved by the Company to be issued pursuant
to the Notes and (B) all shares of Common Stock to be issued in connection with the event requiring this determination (or issuable
upon conversion of the Conversion Amount being redeemed [INSERT IN SERIES B NOTES ONLY: or amount of Restricted Principal subject
to an Investor Prepayment, as applicable,] in the event requiring this determination at the Conversion Price then in effect (without
regard 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; (xiii) no bone
fide dispute shall exist, by and between any of holder of Notes or Warrants, the Company, the Principal Market (or such applicable
Eligible Market in which the Common Stock of the Company is then principally trading) and/or FINRA with respect to any term or
provision of any Note or any other Transaction Document and (xiv) the shares of Common Stock issuable pursuant the event requiring
the satisfaction of the Equity Conditions (or issuable upon conversion of the Conversion Amount being redeemed [INSERT IN SERIES
B NOTES ONLY: or amount of Restricted Principal subject to an Investor Prepayment, as applicable,] in the event requiring this
determination at the Conversion Price then in effect (without regard to any limitations on conversion set forth herein)) are duly
authorized and listed and eligible for trading without restriction on an Eligible Market.


 




    	49



     


    




 


(ee)
“Equity Conditions Failure” means, as applicable, that (i) on any day during the period commencing twenty (20)
Trading Days prior to the applicable Company Optional Redemption Notice Date through the applicable Company Optional Redemption
Date, (ii) on any day during the period commencing twenty (20) Trading Days prior to the applicable Installment Notice Date through
the later of the applicable Installment Date and the date on which the applicable shares of Common Stock are actually delivered
to the Holder, or (iii) with respect to any other date of determination, any day during the period commencing twenty (20) Trading
Days prior to such date of determination, the Equity Conditions have not been satisfied (or waived in writing by the Holder).


 


(ff)
“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) Trading Days with the lowest VWAP of the Common Stock during
the fifteen (15) consecutive Trading Day period ending and including the Trading Day immediately preceding the sixteenth (16th)
Trading Day after such Stock Combination Event Date, divided by (y) five (5).


 


(gg)
“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 either (x) with respect to Michael Panosian and Josh Keeler, not to exceed 15% of the Common Stock issued and outstanding
immediately prior to the Subscription Date, in the aggregate and (y) with respect to any other employee, officer or director of
the Company, not to exceed 5% of the Common Stock issued and outstanding immediately prior to the Subscription Date, in the aggregate
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) the shares
of Common Stock issuable upon exercise of the Warrants; provided, that the terms of the Warrants are not amended, modified or
changed on or after the Subscription Date (other than antidilution adjustments pursuant to the terms thereof in effect as of the
Subscription Date).


 


(hh)
“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 March 31.


 


(ii)
“Fiscal Year” means the fiscal year adopted by the Company for financial reporting purposes as of the date
hereof that ends on December 31.


 


(jj)
“Floor Price” means $0.10 (or such lower amount as permitted, from time to time, by the rules and regulations
of the Principal Market), subject to adjustment for stock splits, stock dividends, stock combinations, recapitalizations or other
similar events.


 




    	50



     


    




 


(kk)
“Free Cash Flow” means, with respect to any given Fiscal Quarter, the difference of (i) Consolidated Net Operating
Cash, less (ii) the sum of (x) Consolidated Capital Expenditures, and (y) Consolidated Lease Expense, in each case, measured as
of the last day in such Fiscal Quarter. Free Cash Flow shall be adjusted to the extent that any portion of (x) or (y) is already
captured in Consolidated Net Operating Cash. Payments, to the extent captured in (x) or (y) that would otherwise be partially
or fully deducted in deriving Consolidated Net Operating Cash, shall be added back to derive Free Cash Flow, and receipts, to
the extent captured in (x) or (y) that would otherwise be partially or fully included in deriving Consolidated Net Operating Cash,
shall be deducted to derive Free Cash Flow. In addition, Consolidated Capital Expenditures shall be exclusive of any payments
or receipts derived from (y). Notwithstanding anything to the contrary in this Note, it is the intent of the Company and the Holder
that no amounts will be double counted in the calculation of Free Cash Flow, such that any amounts already captured in any clause
(or definition of any defined term in any clause) of the foregoing definition of Free Cash Flow above shall not be counted more
than once in such clause (including in any definition of any defined term in such clause) or counted in any other clause of Free
Cash Flow (including in any other definition of any defined term referenced therein).


 


(ll)
“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



     


    




 


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


 


(nn)
“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.


 


(oo)
“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.


 


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


 


(qq)
“Installment Amount” means the sum of (A) (i) with respect to any Installment Date other than the Maturity
Date, the lesser of (x) Base Installment Amount 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 Deferral), (B) any Deferral Amount deferred pursuant to Section 8(d) and included in such
Installment Amount in accordance therewith, (C) any Acceleration Amount accelerated pursuant to Section 8(e) (solely to the extent
accelerated at least two (2) Trading Days prior to the applicable Installment Date) and included in such Installment Amount in
accordance therewith and (D) in each case of clauses (A) through (C) above, the sum of any accrued and unpaid Interest as of such
Installment Date under this Note, if any, and accrued and unpaid Late Charges, if any, under this Note as of such Installment
Date. In the event the Holder shall sell or otherwise transfer any portion of this Note, the transferee shall be allocated a pro
rata portion of the each unpaid Installment Amount hereunder.


 




    	52



     


    




 


(rr)
“Installment Conversion Price” means, with respect to a particular date of determination, the lowest of (i)
the Conversion Price then in effect, (ii) the greater of (x) the Floor Price and (y) 85% of the VWAP of the Common Stock as of
the Trading Day immediately preceding the applicable Installment Date and (iii) the greater of (x) the Floor Price and (y) 85%
of the quotient of (A) the sum of the VWAP of the Common Stock for each of the three (3) Trading Days with the lowest VWAP of
the Common Stock during the twenty (20) consecutive Trading Day period ending and including the Trading Day immediately prior
to the applicable Installment Date, divided by (B) three (3). All such determinations to be appropriately adjusted for any stock
split, stock dividend, stock combination or other similar transaction during any such measuring period.


 


(ss)
“Installment Date” means (i) February 1, 2020, (ii) the first Trading Day of the calendar month immediately
following the initial Installment Date, (iii) thereafter, the first Trading Day of the calendar month immediately following the
previous Installment Date until the Maturity Date, and (iv) the Maturity Date.


 


(tt)
[INSERT IN SERIES A NOTE ONLY: [INTENTIONALLY OMITTED]] [INSERT IN SERIES B NOTES ONLY: “Investor Note” means
that certain promissory note of the Holder issued to the Company at the Closing Date, pursuant to the Securities Purchase Agreement,
with an aggregate principal amount outstanding equal to the Restricted Principal outstanding hereunder and secured by a cash amount
set forth in a bank account of the Holder (or its affiliates) at least equal to the Restricted Principal outstanding hereunder.]


 


(uu)
[INSERT IN SERIES A NOTE: [INTENTIONALLY OMITTED]] [INSERT IN SERIES B NOTE ONLY: “Investor Notes” means those
certain promissory notes of the holders of Series B Notes (including the Investor Note) issued to the Company at the Closing Date,
pursuant to the Securities Purchase Agreement.]


 


(vv)
[INSERT IN SERIES A NOTE: [INTENTIONALLY OMITTED]] [INSERT IN SERIES B NOTE ONLY: “Investor Prepayment” means
any Prepayment (as defined in the Investor Note) of the Investor Note.]


 


(ww)
“Maturity Date” shall mean December 31, 2020; 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



     


    




 


(xx)
“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”.


 


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


 


(zz)
“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.


 


(aaa)
“Permitted Indebtedness” means (i) Indebtedness evidenced by this Note and the Other Notes, (ii) Indebtedness
set forth on Schedule 3(s) to the Securities Purchase Agreement, as in effect as of the Subscription Date, (iii) Indebtedness
secured by Permitted Liens or unsecured but as described in clauses (iv) and (v) of the definition of Permitted Liens, (iv) unsecured
Indebtedness incurred by the Company that is made expressly subordinate in right of payment to the Indebtedness evidenced by this
Note, as reflected in a written agreement acceptable to the Holder and approved by the Holder in writing, and which Indebtedness
does not provide at any time for (A) the payment, prepayment, repayment, repurchase or defeasance, directly or indirectly, of
any principal or premium, if any, thereon until ninety-one (91) days after the Maturity Date or later and (B) total interest and
fees at a rate in excess of 7% per annum, (v) unsecured Indebtedness incurred by the Company, in an aggregate amount not to exceed
$4.2 million, solely with respect to the financing of purchase orders in the ordinary course of business that do not relate to
(or otherwise include) any equity or equity-linked Subsequent Placement (as defined in the Securities Purchase Agreement) and
(vi) Permitted Senior Indebtedness.


 


(bbb)
“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 $[50,000], (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) and (viii) Liens with respect
to the Permitted Senior Indebtedness Collateral.


 




    	54



     


    




 


(ccc)
“Permitted Senior Indebtedness” means the principal of (and premium, if any), interest on, and all fees and
other amounts (including, without limitation, any reasonable out-of-pocket costs, enforcement expenses (including reasonable out-of-pocket
legal fees and disbursements), collateral protection expenses and other reimbursement or indemnity obligations relating thereto)
payable by Company and/or its Subsidiaries under or in connection with any credit facility to be entered into by the Company and/or
its Subsidiaries with one or more financial institutions (and on terms and conditions), in form and substance reasonably satisfactory
to the Required Holders; provided, however, that the aggregate outstanding amount of such Indebtedness permitted hereunder (taking
into account the maximum amounts which may be advanced under the loan documents evidencing such Permitted Senior Indebtedness)
does not at any time exceed $[  ].


 


(ddd)
“Permitted Senior Indebtedness Collateral” means any [Excluded Collateral (as defined in the Security Agreement)]
secured by Permitted Liens by the holders of Permitted Senior Indebtedness.


 


(eee)
“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.


 


(fff)
“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.


 


(ggg)
“Pre-Installment Conversion Price” means, with respect to a particular date of determination, the lowest of
(i) the Conversion Price then in effect, (ii) the greater of (x) the Floor Price and (y) 85% of the VWAP of the Common Stock as
of the Trading Day immediately preceding the date of the delivery or deemed delivery of the applicable Installment Notice and
(iii) the greater of (x) the Floor Price and (y) 85% of the quotient of (A) the sum of the VWAP of the Common Stock for each of
the three (3) Trading Days with the lowest VWAP of the Common Stock during the twenty (20) consecutive Trading Day period ending
and including the Trading Day immediately preceding the date of the delivery or deemed delivery of the applicable Installment
Notice, divided by (B) three (3). All such determinations to be appropriately adjusted for any stock split, stock dividend, stock
combination or other similar transaction during any such measuring period.


 




    	55



     


    




 


(hhh)
“Price Failure” means, with respect to a particular date of determination, the VWAP of the Common Stock on
any Trading Day during any Trading Day during the twenty (20) Trading Day period ending on the Trading Day immediately preceding
such date of determination fails to exceed $0.20 (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.


 


(iii)
“Principal Market” means the Nasdaq Capital Market.


 


(jjj)
“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.”


 


(kkk)
“Redemption Date” means, as applicable, the Event of Default Redemption Date, the Installment Date in which
an Installment Redemption occurs, the Change of Control Redemption Date or Company Optional Redemption Date.


 


(lll)
“Redemption Premium” means 125%.


 


(mmm)
“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.”


 


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


 


(ooo)
[INSERT IN SERIES A NOTE ONLY: [INTENTIONALLY OMITTED]][INSERT IN SERIES B NOTE ONLY: “Restricted Principal”
means, initially $4,780,000, subject to reduction as provided herein, including, without limitation, pursuant to Investor Prepayments,
Maturity Netting or Investor Netting Rights.]


 


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


 


(qqq)
“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.


 




    	56



     


    




 


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


 


(sss)
“Series A Notes” shall have the meaning as set forth in the Securities Purchase Agreement.


 


(ttt)
“Series B Notes” shall have the meaning set forth as set forth in the Securities Purchase Agreement.


 


(uuu)
“Subscription Date” means August 19, 2019.


 


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


 


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


 


(xxx)
“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.


 


(yyy)
“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.


 


(zzz)
[INSERT IN SERIES A NOTE: [INTENTIONALLY OMITTED]][INSERT IN SERIES B NOTE ONLY: “Unrestricted Principal” means
any Principal outstanding under this Note that is not Restricted Principal outstanding under this Note.]


 




    	57



     


    




 


(aaaa)
“Volume Failure” means, with respect to a particular date of determination, (i) solely with respect to a determination
as to whether an Equity Conditions Failure exists in connection with a potential Mandatory Prepayment Event, the daily aggregate
dollar trading volume (as reported on Bloomberg) of the Common Stock on the Principal Market on any Trading Day during the twenty
(20) Trading Day period ending on the Trading Day immediately preceding such date of determination (such period, the “Volume
Failure Measuring Period”), is less than $1,000,000 (as adjusted for any stock splits, stock dividends, stock combinations,
recapitalizations or other similar transactions occurring after the Subscription Date) or (ii) with respect to any Installment
Conversion or any other determination hereunder or pursuant to any other Transaction Document (other than with respect to a determination
as to whether an Equity Conditions Failure exists in connection with a potential Mandatory Prepayment Event), either (A) the daily
aggregate dollar trading volume (as reported on Bloomberg) of the Common Stock on the Principal Market on any Trading Day during
the Volume Failure Measuring Period, is less than $375,000 (as adjusted for any stock splits, stock dividends, stock combinations,
recapitalizations or other similar transactions occurring after the Subscription Date), (B) the daily aggregate dollar trading
volume (as reported on Bloomberg) of the Common Stock on the Principal Market on any two Trading Days during the Volume Failure
Measuring Period, is less than $600,000 (as adjusted for any stock splits, stock dividends, stock combinations, recapitalizations
or other similar transactions occurring after the Subscription Date) or (C) the quotient of (x) the sum of the daily aggregate
dollar trading volume (as reported on Bloomberg) of the Common Stock on the Principal Market of each Trading Day during the Volume
Failure Measuring Period, divided by (y) twenty (20), is less than $1,100,000 (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.


 


(bbbb)
“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 a.m., New
York time, and ending at 4:00 p.m., New York time, as reported by Bloomberg through its “VAP” function (set to 09:30
start time and 16:00 end time) 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 a.m., New
York time, and ending at 4:00 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.


 


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


 


33.
DISCLOSURE. Upon delivery by the Company to the Holder (or receipt by the Company from the Holder) 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 on or prior to 9:00 am,
New York city time on the Business Day immediately following such notice delivery date, 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 explicitly
in writing in such notice (or immediately upon receipt of notice from the Holder, as applicable), and in the absence of any such
written indication in such notice (or notification from the Company immediately upon receipt of notice from the Holder), 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.


 


	 	TOUGHBUILT
    INDUSTRIES, INC.
	 	 
	 	By:	              
	 	Name:	 
	 	Title:	 


 


Senior
Convertible Note - Signature Page


 




    	 



     


    







 


EXHIBIT
I


 


TOUGHBUILT
INDUSTRIES, INC.


CONVERSION
NOTICE


 


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


 


	Date
    of Conversion:	 
	 	 
	Aggregate
    Principal to be converted:	 
	Aggregate
    accrued and unpaid Interest and accrued and unpaid Late Charges with respect to such portion of the Aggregate Principal and
    such Aggregate Interest to be converted:	 
	 	 
	AGGREGATE
    CONVERSION AMOUNT

    TO BE CONVERTED:	 
	 	 
	Please
    confirm the following information:
	 
	Conversion
    Price:	 
	 	 
	Number
    of shares of Common Stock to be issued (the “Shares”)::	 
	 	 
	

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







    	 



     


    




 


[INSERT
IN SERIES B NOTES ONLY: [  ] Check here if all or any portion of the aggregate Principal being converted includes any
Restricted Principal. Please specify the amount Restricted Principal being converted:__________________]


 


[  ]
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:	 







 






    	 



     


    













 


Exhibit
II


 


ACKNOWLEDGMENT


 


The
Company hereby (a) acknowledges this Conversion Notice, (b) certifies that the above indicated number of shares of Common Stock
[are][are not] eligible to be resold by the Holder either (i) pursuant to Rule 144 (subject to the Holder’s execution and
delivery to the Company of a customary 144 representation letter) or (ii) an effective and available registration statement and
(c) 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 ________________________.


 


	 	TOUGHBUILT
    INDUSTRIES, INC.
	 	 
	 	By:	              
	 	Name:	 
	 	Title: