EXHIBIT 4.4



 





NEITHER
THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS CONVERTIBLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE
COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO,
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A
LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY.
THIS SECURITY AND THE SECURITIES ISSUABLE UPON CONVERSION OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN
ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES, UNLESS OTHERWISE PROHIBITED BY FEDERAL OR STATE SECURITIES LAWS.


 


Original
Issue Date: October 17, 2014


Original
Conversion Price (subject to adjustment herein): $0.4634


 


$2,256,842


 


ORIGINAL
ISSUE DISCOUNT 


SENIOR
SECURED CONVERTIBLE DEBENTURE


DUE
OCTOBER 16, 2014


 


THIS
ORIGINAL ISSUE DISCOUNT SENIOR SECURED CONVERTIBLE DEBENTURE is one of a series of duly authorized and validly issued Original
Issue Discount Senior Secured Convertible Debentures of WindStream Technologies, Inc., a Wyoming corporation, (the “Company”),
having its principal place of business at 819 Buckeye Street, North Vernon, Indiana 47265, designated as its Original Issue Discount
Senior Secured Convertible Debenture due October 17, 2015 (this Debenture, the “Debenture”
and, collectively with the other Debentures of such series, the “Debentures”).


 


FOR
VALUE RECEIVED, the Company promises to pay to Redwood Management LLC or its registered assigns (the “Holder”),
or shall have paid pursuant to the terms hereunder, the principal sum of $2,256,842 on October 17, 2015 (the “Maturity
Date”) or such earlier date as this Debenture is required or permitted to be repaid as provided hereunder, and
to pay interest to the Holder on the aggregate unconverted and then outstanding principal amount of this Debenture in accordance
with the provisions hereof. This Debenture is subject to the following additional provisions:


 




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Section
1. Definitions. For
the purposes hereof, in addition to the terms defined elsewhere in this Debenture, (a) capitalized terms not otherwise defined
herein shall have the meanings set forth in the Purchase Agreement (as defined below) and (b) the following terms shall have the
following meanings:


 


“Alternate
Consideration” shall have the meaning set forth in Section 5(e).


 


“Amortization
Conversion Rate” means the lower of the Conversion Price or 65% of the lowest VWAP for the 20 consecutive Trading
Days ending on the Trading Day that is immediately prior to the applicable Amortization Payment Date.


 


“Amortization
Payment” shall have the meaning set forth in Section 2(d).


 


“Amortization
Payment Date” shall mean dates Amortization Payments are due as set forth on Appendix A hereto.


 


“Bankruptcy
Event” means any of the following events: (a) the Company or any Significant Subsidiary (as such term is defined
in Rule 1-02(w) of Regulation S-X) thereof commences a case or other proceeding under any bankruptcy, reorganization, arrangement,
adjustment of debt, relief of debtors, dissolution, insolvency or liquidation or similar law of any jurisdiction relating to the
Company or any Significant Subsidiary thereof, (b) there is commenced against the Company or any Significant Subsidiary thereof
any such case or proceeding that is not dismissed within 60 days after commencement, (c) the Company or any Significant Subsidiary
thereof is adjudicated insolvent or bankrupt or any order of relief or other order approving any such case or proceeding is entered,
(d) the Company or any Significant Subsidiary thereof suffers any appointment of any custodian or the like for it or any substantial
part of its property that is not discharged or stayed within 60 calendar days after such appointment, (e) the Company or any Significant
Subsidiary thereof makes a general assignment for the benefit of creditors, (f) the Company or any Significant Subsidiary thereof
calls a meeting of its creditors with a view to arranging a composition, adjustment or restructuring of its debts or (g) the Company
or any Significant Subsidiary thereof, by any act or failure to act, expressly indicates its consent to, approval of or acquiescence
in any of the foregoing or takes any corporate or other action for the purpose of effecting any of the foregoing.


 


“Base
Conversion Price” shall have the meaning set forth in Section 5(b).


 


“Beneficial
Ownership Limitation” shall have the meaning set forth in Section 4(d).


 


“Buy-In”
shall have the meaning set forth in Section 4(b)(v).


 




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“Change
of Control Transaction” means the occurrence after the date hereof of any of (a) an acquisition after the date
hereof by an individual or legal entity or “group” (as described in Rule 13d-5(b)(1) promulgated under the Exchange
Act) of effective control (whether through legal or beneficial ownership of capital stock of the Company, by contract or otherwise)
of in excess of 50% of the voting securities of the Company (other than by means of conversion or exercise of the Debentures and
the Securities issued together with the Debentures), (b) the Company merges into or consolidates with any other Person, or any
Person merges into or consolidates with the Company and, after giving effect to such transaction, the stockholders of the Company
immediately prior to such transaction own less than 50% of the aggregate voting power of the Company or the successor entity of
such transaction, (c) the Company sells or transfers all or substantially all of its assets to another Person and the stockholders
of the Company immediately prior to such transaction own less than 50% of the aggregate voting power of the acquiring entity immediately
after the transaction, or (d) the execution by the Company of an agreement to which the Company is a party or by which it is bound,
providing for any of the events set forth in clauses (a) through (c) above.


 


“Conversion”
shall have the meaning ascribed to such term in Section 4.


 


“Conversion
Date” shall have the meaning set forth in Section 4(a).


 


“Conversion
Price” shall have the meaning set forth in Section 4(b).


 


“Conversion
Schedule” means the Conversion Schedule in the form of Schedule
1 attached hereto.


 


“Conversion
Shares” means, collectively, the shares of Common Stock issuable upon conversion of this Debenture in accordance
with the terms hereof.


 


“Debenture
Register” shall have the meaning set forth in Section 2(b).


 


“Default
Conversion Price” means 52% of the lowest VWAP during the 30 Trading Day-period immediately prior to the applicable
Conversion Date.


 


“Dilutive
Issuance” shall have the meaning set forth in Section 5(b).


 


“Dilutive
Issuance Notice” shall have the meaning set forth in Section 5(b).


 


“DTC”
means the Depository Trust Company.


 


“DTC/FAST
Program” means the DTC’s Fast Automated Securities Transfer Program.


 


“DWAC”
means Deposit Withdrawal at Custodian as defined by the DTC.


 


“DWAC
Eligible” means that (a) the Common Stock is eligible at DTC for full services pursuant to DTC’s Operational
Arrangements, including without limitation transfer through DTC’s DWAC system, (b) the Company has been approved (without
revocation) by the DTC’s underwriting department, (c) the Transfer Agent is approved as an agent in the DTC/FAST Program,
(d) the Conversion Shares are otherwise eligible for delivery via DWAC, and (e) the Transfer Agent does not have a policy prohibiting
or limiting delivery of the Conversion Shares via DWAC.


 




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“Equity
Conditions” means, during the period in question, (a) the Company shall have duly honored all conversions and
redemptions scheduled to occur or occurring by virtue of one or more Notices of Conversion of the Holder, if any, (b) the Company
shall have paid all liquidated damages and other amounts owing to the Holder in respect of this Debenture, (c)(i) there is an
effective registration statement pursuant to which the Holder is permitted to utilize the prospectus thereunder to resell all
of the shares of Common Stock issuable pursuant to the Transaction Documents (and the Company believes, in good faith, that such
effectiveness will continue uninterrupted for the foreseeable future) or (ii) all of the Conversion Shares issuable pursuant to
the Transaction Documents (and shares issuable in lieu of cash payments of interest) may be resold pursuant to Rule 144 without
volume or manner-of-sale restrictions as determined by the counsel to the Company as set forth in a written opinion letter to
such effect, addressed and acceptable to the Transfer Agent and the Holder, (d) the Common Stock is trading on a Trading Market
and all of the shares issuable pursuant to the Transaction Documents are listed or quoted for trading on such Trading Market (and
the Company believes, in good faith, that trading of the Common Stock on a Trading Market will continue uninterrupted for the
foreseeable future), (e) there is a sufficient number of authorized but unissued and otherwise unreserved shares of Common Stock
for the issuance of all of the shares then issuable pursuant to the Transaction Documents, (f) there is no existing Event of Default
and no existing event which, with the passage of time or the giving of notice, would constitute an Event of Default, (g) the issuance
of the shares in question to the Holder would not violate the limitations set forth in Section 4(d) herein, (h) there has been
no public announcement of a pending or proposed Fundamental Transaction or Change of Control Transaction that has not been consummated,
(i) the applicable Holder is not in possession of any information provided by the Company that constitutes, or may constitute,
material non-public information, (j) for each Trading Day in a period of 20 consecutive Trading Days prior to the applicable date
in question, the daily dollar trading volume for the Common Stock on the principal Trading Market exceeds an average of $30,000
per Trading Day, (i) the Company’s Common Stock must be DTC and DWAC Eligible and not subject to a “DTC Chill”
and (j) the Company has timely filed (or obtained extensions in respect thereof and filed within the applicable grace period)
all reports required to be filed by the Company after the date hereof pursuant to the Exchange Act.


 


“Event
of Default” shall have the meaning set forth in Section 6(a).


 


“Fundamental
Transaction” shall have the meaning set forth in Section 5(e).


 


“Mandatory
Default Amount” means the payment of 130% of the outstanding principal amount of this Debenture and accrued and
unpaid interest hereon, in addition to the payment of all other amounts, costs, expenses and liquidated damages due in respect
of this Debenture.


 




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“New
York Courts” shall have the meaning set forth in Section 8(d).


 


“Notice
of Conversion” shall have the meaning set forth in Section 4(a).


 


“Note
Balance” means the sum of the cash payments (including the Initial Cash Purchase Price and any funded Tranches)
paid by the Holder to the Company in accordance with the Purchase Agreement and the Holder’s Secured Purchaser Note, plus
any original issue discount, accrued and/or guaranteed interest, and any other amounts incurred by the Company to the Holder in
respect of such cash payments,


 


“Original
Issue Date” means the date of the first issuance of the Debentures, regardless of any transfers of any Debenture
and regardless of the number of instruments which may be issued to evidence such Debentures.


 


“Purchase
Agreement” means the Securities Purchase Agreement, dated as of October __, 2014 among the Company and the original
Holders, as amended, modified or supplemented from time to time in accordance with its terms.


 


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


 


“Share
Delivery Date” shall have the meaning set forth in Section 4(c)(ii).


 


“Successor
Entity” shall have the meaning set forth in Section 5(e).


 


Section
2. Amortization and Interest.


 


a)Payment
of Interest. The Company shall pay interest to the Holder on the aggregate unconverted and then outstanding principal
amount of this Debenture at the rate of 12% per annum, of which 12 months shall be guaranteed and payable as set forth in the
Secured Purchaser Note. In addition to the interest payable under this Section 2(a), this Debenture was issued for an original
issue discount of 5% of the principal amount.


 


b)Interest
Calculations. Subject to Section 2(a), interest shall be calculated on the basis of a 360-day year, consisting of twelve
30 calendar day periods, and shall accrue daily commencing on the Original Issue Date until payment in full of the outstanding
principal, together with all accrued and unpaid interest, liquidated damages and other amounts which may become due hereunder,
has been made. Interest hereunder will be paid to the Person in whose name this Debenture is registered on the records of the
Company regarding registration and transfers of this Debenture (the “Debenture
Register”).


 


c)Late
Fee. Subject to Section 6(b) of this Debenture, all overdue accrued and unpaid interest to be paid hereunder shall
entail a late fee at an interest rate equal to the lesser of 18% per annum or the maximum rate permitted by applicable law (the
“Late Fees”) which
shall accrue daily from the date such interest is due hereunder through and including the date of actual payment in full.


 




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d)Amortization
Payments. Starting on April __, 2015 [six months from Original Issuance Date], the Company shall repay this Debenture
and any accrued but unpaid interest in accordance with the Amortization Schedule attached as Appendix
A (each, an “Amortization
Payment”). Each Amortization Payment shall, at the option of the Company, be made in cash or, subject to the
Equity Conditions, in Common Stock pursuant to the Amortization Conversion Rate. Notwithstanding any provision in this Debenture
to the contrary, the Company will not be required to make any Amortization Payment to the extent any such Amortization Payment
would result in the Company making aggregate Amortization Payments in an amount greater than the Note Balance Any outstanding
unpaid principal and accrued interest (as of the Maturity Date) on this Debenture will be due and payable on the Maturity Date
and may be paid in cash (subject to a 30% premium), or, in the Company’s discretion (subject to the Equity Conditions) in
Common Stock.


 


e)Prepayment.
At any time upon ten (10) days written notice to the Holder, the Company may prepay any portion of the principal amount of this
Debenture and any accrued and unpaid interest. If the Company exercises its right to prepay the Debenture, the Company shall make
payment to the Holder of an amount in cash equal to the sum of the then outstanding principal amount of this Debenture and accrued
interest multiplied by 130%. The Holder may continue to convert the Debenture from the date notice of the prepayment is given
until the date of the prepayment.


 


Section
3. Registration of Transfers and Exchanges.


 


a)
Different Denominations. This
Debenture is exchangeable for an equal aggregate principal amount of Debentures of different authorized denominations, as requested
by the Holder surrendering the same. No service charge will be payable for such registration of transfer or exchange.


 


b)Investment
Representations. This Debenture has been issued subject to certain investment representations of the original Holder
set forth in the Purchase Agreement and may be transferred or exchanged only in compliance with the Purchase Agreement and applicable
federal and state securities laws and regulations.


 


c)Reliance
on Debenture Register. Prior to due presentment for transfer to the Company of this Debenture, the Company and any
agent of the Company may treat the Person in whose name this Debenture is duly registered on the Debenture Register as the owner
hereof for the purpose of receiving payment as herein provided and for all other purposes, whether or not this Debenture is overdue,
and neither the Company nor any such agent shall be affected by notice to the contrary.


 




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Section
4. Conversion.


 


a)Voluntary
Conversion. At any time after the Original Issue Date until this Debenture is no longer outstanding, this Debenture
(including principal and accrued but unpaid interest on any principal being converted, if any) shall be convertible, in whole
or in part, into shares of Common Stock at the option of the Holder, at any time and from time to time (subject to the conversion
limitations set forth in Section 4(d) hereof). The Holder shall effect conversions by delivering to the Company a Notice of Conversion,
the form of which is attached hereto as Annex
A (each, a “Notice of Conversion”),
specifying therein the principal amount (and any accrued interest) of this Debenture to be converted and the date on which such
conversion shall be effected (such date, the “Conversion
Date”). If no Conversion Date is specified in a Notice of Conversion, the Conversion Date shall be the date that
such Notice of Conversion is deemed delivered hereunder. No ink-original Notice of Conversion shall be required, nor shall any
medallion guarantee (or other type of guarantee or notarization) of any Notice of Conversion form be required by the Company.
To effect conversions hereunder, the Holder shall not be required to physically surrender this Debenture to the Company unless
the entire principal amount of this Debenture, plus all accrued and unpaid interest thereon, has been so converted. Conversions
hereunder shall have the effect of lowering the outstanding principal amount of this Debenture (and accrued interest thereon,
if applicable) in an amount equal to the applicable conversion. The Holder and the Company shall maintain records showing the
principal amount(s) converted and the date of such conversion(s). The Company may deliver an objection to any Notice of Conversion
within one (1) Business Day of delivery of such Notice of Conversion. In the event of any dispute or discrepancy, the records
of the Holder shall be controlling and determinative in the absence of manifest error.
The Holder, and any assignee by acceptance of this Debenture, acknowledge and agree that, by reason of the provisions of this
paragraph, following conversion of a portion of this Debenture, the unpaid and unconverted principal amount of this Debenture
may be less than the amount stated on the face hereof. Notwithstanding any provision in this Debenture to the contrary, the Company
will not be required to effect any conversion of this Debenture to the extent any such conversion would result in the Company
effecting aggregate conversions of principal and accrued interest on this Debenture in an amount greater than the Note Balance.


 


b)Conversion
Price. The fixed conversion price in effect on any Conversion Date shall be equal to $____, subject to adjustment herein
(the “Conversion Price”).
All such determinations will 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 measuring period. Notwithstanding
anything herein to the contrary, at any time after the occurrence of any Event of Default the Holder may, at such Holder’s
option and otherwise in accordance with the provisions for conversion herein, convert all or any part of this Debenture into Common
Stock at the Default Conversion Price. Nothing herein shall limit a Holder’s right to pursue actual damages or declare an
Event of Default pursuant to Section 6 hereof and the Holder shall have the right to pursue all remedies available to it hereunder,
at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief. The exercise of
any such rights shall not prohibit the Holder from seeking to enforce damages pursuant to any other Section hereof or under applicable
law.


 




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c)
Mechanics of Conversion.


 


i.Conversion
Shares Issuable Upon Conversion of Principal Amount. The number of Conversion Shares issuable upon a conversion hereunder
shall be determined by the quotient obtained by dividing (x) the outstanding principal amount of this Debenture to be converted
by (y) the Conversion Price.


 


ii.Delivery
of Certificate Upon Conversion. Not later than three (3) Trading Days after each Conversion Date (the “Share
Delivery Date”), the Company shall deliver, or cause to be delivered, to the Holder a certificate or certificates
representing the Conversion Shares which, on or after the date on which such Conversion Shares are eligible to be sold under Rule
144 without the need for current public information and the Company has received an opinion of counsel to such effect reasonably
acceptable to the Company shall be free of restrictive legends and trading restrictions (other than those which may then be required
by the Purchase Agreement) representing the number of Conversion Shares being acquired upon the conversion of this Debenture All
certificate or certificates required to be delivered by the Company under this Section 4(d) shall be delivered electronically
through the Depository Trust Company or another established clearing corporation performing similar functions. If the Conversion
Date is prior to the date on which such Conversion Shares are eligible to be sold under Rule 144 without the need for current
public information the Conversion Shares shall bear a restrictive legend in substantially the following form, as appropriate:


 


“NEITHER THE ISSUANCE
AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE 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 (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN A GENERALLY
ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS 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, UNLESS OTHERWISE PROHIBITED BY FEDERAL OR STATE SECURITIES LAWS.”


 




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Notwithstanding the foregoing,
commencing on such date that the Conversion Shares are eligible for sale under Rule 144 subject to current public information
requirements, the Company shall obtain a legal opinion to allow for such sales under Rule 144.


 


iii.Failure
to Deliver Certificates. If, in the case of any Notice of Conversion, such certificate or certificates are not delivered
to or as directed by the applicable Holder by the Share Delivery Date, the Holder shall be entitled to elect by written notice
to the Company at any time on or before its receipt of such certificate or certificates, to rescind such Conversion, in which
event the Company shall promptly return to the Holder any original Debenture delivered to the Company and the Holder shall promptly
return to the Company the Common Stock certificates issued to such Holder pursuant to the rescinded Conversion Notice.


 


iv.Obligation
Absolute; Partial Liquidated Damages. The Company’s obligations to issue and deliver the Conversion Shares upon
conversion of this Debenture in accordance with the terms hereof are absolute and unconditional, (but subject to Section 4(a)
of this Debenture)), irrespective of any action or inaction by the Holder to enforce the same, any waiver or consent with respect
to any provision hereof, the recovery of any judgment against any Person or any action to enforce the same, or any setoff, counterclaim,
recoupment, limitation or termination, or any breach or alleged breach by the Holder or any other Person of any obligation to
the Company or any violation or alleged violation of law by the Holder or any other Person, and irrespective of any other circumstance
which might otherwise limit such obligation of the Company to the Holder in connection with the issuance of such Conversion Shares
(but subject to Section 4(a) of this Debenture); provided,
however, that such delivery shall not operate as a waiver by the Company of any such action the Company may have
against the Holder. In the event the Holder of this Debenture shall elect to convert any or all of the outstanding principal amount
hereof, the Company may not refuse conversion based on any claim that the Holder or anyone associated or affiliated with the Holder
has been engaged in any violation of law, agreement or for any other reason (except as otherwise provided in the Transaction Documents),
unless an injunction from a court, on notice to Holder, restraining and or enjoining conversion of all or part of this Debenture
shall have been sought and obtained, and the Company posts a surety bond for the benefit of the Holder which bond shall remain
in effect until the completion of arbitration/litigation of the underlying dispute and the proceeds of which shall be payable
to the Holder to the extent it obtains judgment. In the absence of such injunction, the Company shall issue Conversion Shares
or, if applicable, cash, upon a properly noticed conversion. If the Company fails for any reason to deliver to the Holder such
certificate or certificates pursuant to Section 4(c)(ii) by the Share Delivery Date, the Company shall pay to the Holder, in cash,
as liquidated damages and not as a penalty, for each $1,000 of principal amount being converted, $10 per Trading Day (increasing
to $20 per Trading Day on the fifth (5th) Trading Day after such liquidated damages begin to accrue) for each Trading
Day after such Share Delivery Date until such certificates are delivered or Holder rescinds such conversion. Nothing herein shall
limit a Holder’s right to pursue actual damages or declare an Event of Default pursuant to Section 6 hereof for the Company’s
failure to deliver Conversion Shares within the period specified herein and the Holder shall have the right to pursue all remedies
available to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive
relief. The exercise of any such rights shall not prohibit the Holder from seeking to enforce damages pursuant to any other Section
hereof or under applicable law. Nothing herein shall limit any party’s offset rights as set forth in Section 8 hereof. Similarly,
regardless of whether Shares are delivered upon conversion, the Company shall have the right to pursue all remedies available
to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief,
and to enforce damages pursuant to any other Section hereof or under applicable law.


 




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v.Compensation
for Buy-In on Failure to Timely Deliver Certificates Upon Conversion. In addition to any other rights available to
the Holder, if the Company fails for any reason to deliver to the Holder such certificate or certificates by the Share Delivery
Date pursuant to Section 4(c)(ii), and if after such Share Delivery Date the Holder is required by its brokerage firm to purchase
(in an open market transaction or otherwise), or the Holder’s brokerage firm otherwise purchases, shares of Common Stock
to deliver in satisfaction of a sale by the Holder of the Conversion Shares which the Holder was entitled to receive upon the
conversion relating to such Share Delivery Date (a “Buy-In”),
then the Company shall (A) pay in cash to the Holder (in addition to any other remedies available to or elected by the Holder)
the amount, if any, by which (x) the Holder’s total purchase price (including any brokerage commissions) for the Common
Stock so purchased exceeds (y) the product of (1) the aggregate number of shares of Common Stock that the Holder was entitled
to receive from the conversion at issue multiplied by (2) the actual sale price at which the sell order giving rise to such purchase
obligation was executed (including any brokerage commissions) and (B) at the option of the Holder, either reissue (if surrendered)
this Debenture in a principal amount equal to the principal amount of the attempted conversion (in which case such conversion
shall be deemed rescinded) or deliver to the Holder the number of shares of Common Stock that would have been issued if the Company
had timely complied with its delivery requirements under Section 4(c)(ii). For example, if the Holder purchases Common Stock having
a total purchase price of $11,000 to cover a Buy-In with respect to an attempted conversion of this Debenture with respect to
which the actual sale price of the Conversion Shares (including any brokerage commissions) giving rise to such purchase obligation
was a total of $10,000 under clause (A) of the immediately preceding sentence, the Company shall be required to pay the Holder
$1,000. The Holder shall provide the Company written notice indicating the amounts payable to the Holder in respect of the Buy-In
and, upon request of the Company, evidence of the amount of such loss. Nothing herein shall limit a 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 upon conversion of this Debenture as required pursuant to the terms hereof.


 




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vi.Reservation
of Shares Issuable Upon Conversion. The Company covenants that it will at all times reserve and keep available out
of its authorized and unissued shares of Common Stock a number of shares of Common Stock at least equal to 300% of the Required
Minimum for the sole purpose of issuance upon conversion of this Debenture and payment of interest on this Debenture, each as
herein provided, free from preemptive rights or any other actual contingent purchase rights of Persons other than the Holder (and
the other holders of the Debentures), not less than such aggregate number of shares of the Common Stock as shall (subject to the
terms and conditions set forth in the Purchase Agreement) be issuable (taking into account the adjustments and restrictions of
Section 5) upon the conversion of the then outstanding principal amount of this Debenture and payment of interest hereunder. The
Company covenants that all shares of Common Stock that shall be so issuable shall, upon issue, be duly authorized, validly issued,
fully paid and nonassessable. The Holder acknowledges that the Company is a Wyoming corporation with unlimited authorized shares.


 


vii.Fractional
Shares. No fractional shares or scrip representing fractional shares shall be issued upon the conversion of this Debenture.
As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such conversion, the Company shall
at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied
by the Conversion Price or round up to the next whole share.


 


viii.Transfer
Taxes and Expenses. The issuance of certificates for shares of the Common Stock on conversion of this Debenture shall
be made without charge to the Holder hereof for any documentary stamp or similar taxes that may be payable in respect of the issue
or delivery of such certificates, provided that, the Company shall not be required to pay any tax that may be payable in respect
of any transfer involved in the issuance and delivery of any such certificate upon conversion in a name other than that of the
Holder of this Debenture so converted and the Company shall not be required to issue or deliver such certificates unless or until
the Person or Persons requesting the issuance thereof shall have paid to the Company the amount of such tax or shall have established
to the satisfaction of the Company that such tax has been paid. The Company shall pay all Transfer Agent fees required for same-day
processing of any Notice of Conversion.


 




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d)Holder’s
Conversion Limitations. The Company shall not effect any conversion of this Debenture, and a Holder shall not have
the right to convert any portion of this Debenture, to the extent that after giving effect to the conversion set forth on the
applicable Notice of Conversion, the Holder (together with the Holder’s Affiliates, and any Persons acting as a group together
with the Holder or any of the Holder’s Affiliates) would beneficially own in excess of the Beneficial Ownership Limitation
(as defined below). For purposes of the foregoing sentence, the number of shares of Common Stock beneficially owned by the Holder
and its Affiliates shall include the number of shares of Common Stock issuable upon conversion of this Debenture with respect
to which such determination is being made, but shall exclude the number of shares of Common Stock which are issuable upon (i)
conversion of the remaining, unconverted principal amount of this Debenture beneficially owned by the Holder or any of its Affiliates
and (ii) exercise or conversion of the unexercised or unconverted portion of any other securities of the Company subject to a
limitation on conversion or exercise analogous to the limitation contained herein (including, without limitation, any other Debentures)
beneficially owned by the Holder or any of its Affiliates. Except as set forth in the preceding sentence, for purposes of this
Section 4(e), beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act and the rules and
regulations promulgated thereunder. To the extent that the limitation contained in this Section 4(d) applies, the determination
of whether this Debenture is convertible (in relation to other securities owned by the Holder together with any Affiliates) and
of which principal amount of this Debenture is convertible shall be in the sole discretion of the Holder, and the submission of
a Notice of Conversion shall be deemed to be the Holder’s determination of whether this Debenture may be converted (in relation
to other securities owned by the Holder together with any Affiliates) and which principal amount of this Debenture is convertible,
in each case subject to the Beneficial Ownership Limitation. To ensure compliance with this restriction, the Holder will be deemed
to represent to the Company each time it delivers a Notice of Conversion that such Notice of Conversion has not violated the restrictions
set forth in this paragraph and the Company shall have no obligation to verify or confirm the accuracy of such determination.
In addition, a determination as to any group status as contemplated above shall be determined in accordance with Section 13(d)
of the Exchange Act and the rules and regulations promulgated thereunder. For purposes of this Section 4(e), in determining the
number of outstanding shares of Common Stock, the Holder may rely on the number of outstanding shares of Common Stock as stated
in the most recent of the following: (i) the Company’s most recent periodic or annual report filed with the Commission,
as the case may be, (ii) a more recent public announcement by the Company, or (iii) a more recent written notice by the Company
or the Company’s transfer agent setting forth the number of shares of Common Stock outstanding. Upon the written or oral
request of a Holder, the Company shall within two Trading Days confirm orally and in writing 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 Debenture, by the Holder or its Affiliates since
the date as of which such number of outstanding shares of Common Stock was reported. The “Beneficial
Ownership Limitation” shall be 4.99% of the number of shares of the Common Stock outstanding immediately after
giving effect to the issuance of shares of Common Stock issuable upon conversion of this Debenture held by the Holder. The Holder,
upon not less than 61 days’ prior notice to the Company, may increase or decrease the Beneficial Ownership Limitation provisions
of this Section 4(e), provided that the Beneficial Ownership Limitation in no event exceeds 9.99% of the number of shares of the
Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock upon conversion of this Debenture
held by the Holder and the Beneficial Ownership Limitation provisions of this Section 4(e) shall continue to apply. Any such increase
or decrease will not be effective until the 61st day after such notice is delivered to the Company. The Beneficial
Ownership Limitation provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity
with the terms of this Section 4(d) to correct this paragraph (or any portion hereof) which may be defective or inconsistent with
the intended Beneficial Ownership Limitation contained herein or to make changes or supplements necessary or desirable to properly
give effect to such limitation. The limitations contained in this paragraph shall apply to a successor holder of this Debenture.


 




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Section
5. Certain Adjustments.


 


a)Stock
Dividends and Stock Splits. If the Company, at any time while this Debenture is outstanding: (i) pays a stock dividend
or otherwise makes a distribution or distributions payable in shares of Common Stock on shares of Common Stock or any Common Stock
Equivalents (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Company upon conversion
of, or payment of interest on, the Debentures), (ii) subdivides outstanding shares of Common Stock into a larger number of shares,
(iii) combines (including by way of a reverse stock split) outstanding shares of Common Stock into a smaller number of shares
or (iv) issues, in the event of a reclassification of shares of the Common Stock, any shares of capital stock of the Company,
then the Conversion Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock
(excluding any treasury shares of the Company) outstanding immediately before such event, and of which the denominator shall be
the number of shares of Common Stock outstanding immediately after such event. Any adjustment made pursuant to this Section shall
become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or
distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or re-classification.


 




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b)Subsequent
Equity Sales. If, at any time while this Debenture is outstanding, the Company or any Subsidiary, as applicable, sells
or grants any option to purchase or sells or grants any right to reprice, or otherwise disposes of or issues (or announces any
sale, grant or any option to purchase or other disposition), any Common Stock or Common Stock Equivalents entitling any Person
to acquire shares of Common Stock at an effective price per share that is lower than the then Conversion Price (such lower price,
the “Base Conversion Price”
and such issuances, collectively, a “Dilutive
Issuance”) (if the holder of the Common Stock or Common Stock Equivalents so issued shall at any time, whether
by operation of purchase price adjustments, reset provisions, floating conversion, exercise or exchange prices or otherwise, or
due to warrants, options or rights per share which are issued in connection with such issuance, be entitled to receive shares
of Common Stock at an effective price per share that is lower than the Conversion Price, such issuance shall be deemed to have
occurred for less than the Conversion Price on such date of the Dilutive Issuance), then the Conversion Price shall be reduced
to equal the Base Conversion Price. Such adjustment shall be made whenever such Common Stock or Common Stock Equivalents are issued.
Notwithstanding the foregoing, no adjustment will be made under this Section 5(b) in respect of an Exempt Issuance. The Company
shall notify the Holder in writing, no later than the Trading Day following the issuance of any Common Stock or Common Stock Equivalents
subject to this Section 5(b), indicating therein the applicable issuance price, or applicable reset price, exchange price, conversion
price and other pricing terms (such notice, the “Dilutive
Issuance Notice”). For purposes of clarification, whether or not the Company provides a Dilutive Issuance Notice
pursuant to this Section 5(b), upon the occurrence of any Dilutive Issuance, the Holder will be entitled to receive a number of
Conversion Shares based upon the Base Conversion Price on or after the date of such Dilutive Issuance, regardless of whether the
Holder accurately refers to the Base Conversion Price in the Notice of Conversion.


 


c)
Subsequent Rights Offerings. In
addition to any adjustments pursuant to Section 5(a) above, if at any time the Company grants, issues or sells any Common Stock
Equivalents or rights to purchase stock, warrants, securities or other property pro rata to the record holders of any class of
shares 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 Debenture (without regard to any limitations on exercise hereof, including without limitation,
the Beneficial Ownership Limitation) immediately before 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, to the extent that the Holder’s right
to participate in any such Purchase Right would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder
shall not be entitled to participate in such Purchase Right to such extent (or beneficial ownership of such shares of Common Stock
as a result of such Purchase Right to such extent) and such Purchase Right to such extent shall be held in abeyance for the Holder
until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).


 




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d)Intentionally
Omitted.


 


e)Fundamental
Transaction. If, at any time while this Debenture is outstanding, (i) the Company, directly or indirectly, in one or
more related transactions effects any merger or consolidation of the Company with or into another Person, (ii) the Company, directly
or indirectly, effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially
all of its assets in one or a series of related transactions, (iii) any, direct or indirect, purchase offer, tender offer or exchange
offer (whether by the Company or another Person) is completed pursuant to which holders of Common Stock are permitted to sell,
tender or exchange their shares for other securities, cash or property and has been accepted by the holders of 50% or more of
the outstanding Common Stock, (iv) the Company, directly or indirectly, in one or more related transactions effects any reclassification,
reorganization or recapitalization of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is
effectively converted into or exchanged for other securities, cash or property, (v) the Company, directly or indirectly, in one
or more related transactions consummates a stock or share purchase agreement or other business combination (including, without
limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with another Person whereby such other Person
acquires more than 50% of the outstanding shares of Common Stock (not including any shares of Common Stock held by the other Person
or other Persons making or party to, or associated or affiliated with the other Persons making or party to, such stock or share
purchase agreement or other business combination) (each a “Fundamental
Transaction”), then, upon any subsequent conversion of this Debenture, the Holder shall have the right to receive,
for each Conversion Share that would have been issuable upon such conversion immediately prior to the occurrence of such Fundamental
Transaction (without regard to any limitation in Section 4(e) on the conversion of this Debenture), the number of shares of Common
Stock of the successor or acquiring corporation or of the Company, if it is the surviving corporation, and any additional consideration
(the “Alternate Consideration”)
receivable as a result of such Fundamental Transaction by a holder of the number of shares of Common Stock for which this Debenture
is convertible immediately prior to such Fundamental Transaction (without regard to any limitation in Section 4(d) on the conversion
of this Debenture). For purposes of any such conversion, the determination of the Conversion Price shall be appropriately adjusted
to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one (1) share of
Common Stock in such Fundamental Transaction, and the Company shall apportion the Conversion Price among the Alternate Consideration
in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration. If holders of
Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the
Holder shall be given the same choice as to the Alternate Consideration it receives upon any conversion of this Debenture following
such Fundamental Transaction. The Company shall cause any successor entity in a Fundamental Transaction in which the Company is
not the survivor (the “Successor Entity”)
to assume in writing all of the obligations of the Company under this Debenture and the other Transaction Documents in accordance
with the provisions of this Section 5(e) pursuant to written agreements in form and substance reasonably satisfactory to the Holder
and approved by the Holder (without unreasonable delay) prior to such Fundamental Transaction and shall, at the option of the
holder of this Debenture, deliver to the Holder in exchange for this Debenture a security of the Successor Entity evidenced by
a written instrument substantially similar in form and substance to this Debenture which is convertible for a corresponding number
of shares of capital stock of such Successor Entity (or its parent entity) equivalent to the shares of Common Stock acquirable
and receivable upon conversion of this Debenture (without regard to any limitations on the conversion of this Debenture) prior
to such Fundamental Transaction, and with a conversion price which applies the conversion price hereunder to such shares of capital
stock (but taking into account the relative value of the shares of Common Stock pursuant to such Fundamental Transaction and the
value of such shares of capital stock, such number of shares of capital stock and such conversion price being for the purpose
of protecting the economic value of this Debenture immediately prior to the consummation of such Fundamental Transaction), and
which is reasonably satisfactory in form and substance to the Holder. Upon the occurrence of any such 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 Debenture 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 Debenture and the other Transaction Documents with the same effect as if such Successor Entity had been named
as the Company herein.


 




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f)Calculations.
All calculations under this Section 5 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be.
For purposes of this Section 5, the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall
be the sum of the number of shares of Common Stock (excluding any treasury shares of the Company) issued and outstanding.


 


g)Notice
to the Holder.


 


i.Adjustment
to Conversion Price. Whenever the Conversion Price is adjusted pursuant to any provision of this Section 5, the Company
shall promptly deliver to the Holder a notice setting forth the Conversion Price after such adjustment and setting forth a brief
statement of the facts requiring such adjustment.


 




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ii.Notice
to Allow Conversion by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever form)
on the Common Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock,
(C) the Company shall authorize the granting to all holders of the Common Stock of rights or warrants to subscribe for or purchase
any shares of capital stock of any class or of any rights, (D) the approval of any stockholders of the Company shall be required
in connection with any reclassification of the Common Stock, any consolidation or merger to which the Company is a party, any
sale or transfer of all or substantially all of the assets of the Company, or any compulsory share exchange whereby the Common
Stock is converted into other securities, cash or property or (E) the Company shall authorize the voluntary or involuntary dissolution,
liquidation or winding up of the affairs of the Company, then, in each case, the Company shall cause to be filed at each office
or agency maintained for the purpose of conversion of this Debenture, and shall cause to be delivered to the Holder at its last
address as it shall appear upon the Debenture Register, at least twenty (20) calendar days prior to the applicable record or effective
date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution,
redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common Stock of record
to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such
reclassification, consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date
as of which it is expected that holders of the Common Stock of record shall be entitled to exchange their shares of the Common
Stock for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer or
share exchange, provided that the failure to deliver such notice or any defect therein or in the delivery thereof shall not affect
the validity of the corporate action required to be specified in such notice. To the extent that any notice provided hereunder
constitutes, or contains, material, non-public information regarding the Company or any of the Subsidiaries, the Company shall
simultaneously file such notice with the Commission pursuant to a Current Report on Form 8-K. The Holder shall remain entitled
to convert this Debenture during the 20-day period commencing on the date of such notice through the effective date of the event
triggering such notice except as may otherwise be expressly set forth herein.


 


Section
6. Events of Default.


 


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


 


i.any
default in the payment of (A) the principal amount of any Debenture or (B) interest, liquidated damages and other amounts owing
to a Holder on any Debenture, as and when the same shall become due and payable (whether on a Conversion Date or the Maturity
Date or by acceleration or otherwise) which default which default, solely in the case of an interest payment or other default
under clause (B) above, is not cured within 3 Trading Days;


 




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ii.the
Company shall fail to observe or perform any other material covenant or agreement contained in the Debentures (other than a breach
by the Company of its obligations to deliver shares of Common Stock to the Holder upon conversion, which breach is addressed in
clause (xi) below) which failure is not cured, if possible to cure, within the earlier to occur of (A) 5 Trading Days after notice
of such failure sent by the Holder or by any other Holder to the Company and (B) 10 Trading Days after the Company has become
or should have become aware of such failure;


 


iii.a
default or event of default (subject to any grace or cure period provided in the applicable agreement, document or instrument)
shall occur under (A) any of the Transaction Documents or (B) any other material agreement, lease, document or instrument to which
the Company or any Subsidiary is obligated (and not covered by clause (vi) below);


 


iv.any
representation or warranty made in this Debenture, any other Transaction Documents, any written statement pursuant hereto or thereto
or any other report, financial statement or certificate made or delivered to the Holder or any other Holder shall be untrue or
incorrect in any material respect as of the date when made or deemed made;


 


v.the
Company or any Significant Subsidiary (as such term is defined in Rule 1-02(w) of Regulation S-X) shall be subject to a Bankruptcy
Event;


 


vi.the
Company or any Subsidiary shall default on any of its obligations under any mortgage, credit agreement or other facility, indenture
agreement, factoring agreement or other instrument under which there may be issued, or by which there may be secured or evidenced,
any indebtedness for borrowed money or money due under any long term leasing or factoring arrangement that (a) involves an obligation
greater than $175,000, whether such indebtedness now exists or shall hereafter be created (provided, that with respect to any
such default under the Company’s outstanding loan owed to the City of North Vernon, Indiana, the Company will have a 10
day right to cure), and (b) results in such indebtedness becoming or being declared due and payable prior to the date on which
it would otherwise become due and payable;


 


vii.the
Common Stock shall not be eligible for listing or quotation for trading on a Trading Market and shall not be eligible to resume
listing or quotation for trading thereon within five Trading Days or the transfer of shares of Common Stock through the Depository
Trust Company System is no longer available or “chilled”;


 




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viii.the
Company shall be a party to any Change of Control Transaction or Fundamental Transaction or shall agree to sell or dispose of
all or in excess of 50% of its assets in one transaction or a series of related transactions (whether or not such sale would constitute
a Change of Control Transaction);


 


ix.
the Company shall fail for any reason to deliver certificates to a Holder prior to the third Trading Day after a Conversion Date
pursuant to Section 4(c) or the Company shall provide at any time notice to the Holder, including by way of public announcement,
of the Company’s intention to not honor requests for conversions of any Debentures in accordance with the terms hereof;


 


x.
the Company fails to file with the Commission any required reports under Section 13 or 15(d) of the Exchange Act such that it
is not in compliance with Rule 144(c)(1) (or Rule 144(i)(2), if applicable);


 


xi.
if the Company or any Significant Subsidiary shall: (i) apply for or consent to the appointment of a receiver, trustee, custodian
or liquidator of it or any of its properties, (ii) admit in writing its inability to pay its debts as they mature, (iii) make
a general assignment for the benefit of creditors, (iv) be adjudicated bankrupt or insolvent or be the subject of an order for
relief under Title 11 of the United States Code or any bankruptcy, reorganization, insolvency, readjustment of debt, dissolution
or liquidation law or statute of any other jurisdiction or foreign country, or (v) file a voluntary petition in bankruptcy, or
a petition or an answer seeking reorganization or an arrangement with creditors or to take advantage or any bankruptcy, reorganization,
insolvency, readjustment of debt, dissolution or liquidation law or statute, or an answer admitting the material allegations of
a petition filed against it in any proceeding under any such law, or (vi) take or permit to be taken any action in furtherance
of or for the purpose of effecting any of the foregoing;


 


xii.
if any order, judgment or decree shall be entered, without the application, approval or consent of the Borrower or any Significant
Subsidiary, by any court of competent jurisdiction, approving a petition seeking liquidation or reorganization of the Borrower
or any Subsidiary, or appointing a receiver, trustee, custodian or liquidator of the Borrower or any Subsidiary, or of all or
any substantial part of its assets, and such order, judgment or decree shall continue unstayed and in effect for any period of
sixty (60) days;


 


xiii.
the occurrence of any levy upon or seizure or attachment of, or any uninsured loss of or damage to, any property of the Company
or any Subsidiary having an aggregate fair value or repair cost in excess of $175,000, and any such levy, seizure or attachment
shall not be set aside, bonded or discharged within thirty (30) days after the date thereof;


 


xiv.
the Company shall fail to maintain sufficient reserved shares pursuant to Section 4.10 of the Purchase Agreement; or


 


xv.any
monetary judgment, writ or similar final process shall be entered or filed against the Company, any subsidiary or any of their
respective property or other assets for more than $50,000, and such judgment, writ or similar final process shall remain unvacated,
unbonded or unstayed for a period of 45 calendar days.


 






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b)
Remedies Upon Event of Default.
If any Event of Default occurs, then the outstanding principal amount of this Debenture, plus accrued but unpaid interest, liquidated
damages and other amounts owing in respect thereof through the date of acceleration, shall become, at the Holder’s election
by notice in writing to Company, immediately due and payable in cash at the Mandatory Default Amount. After the occurrence of
any Event of Default that results in the eventual acceleration of this Debenture, the interest rate on this Debenture shall accrue
at an interest rate equal to the lesser of 2% per month (24% per annum) or the maximum rate permitted under applicable law. Upon
the payment in full of the Mandatory Default Amount, the Holder shall promptly surrender this Debenture to or as directed by the
Company. In connection with such acceleration described herein, the Holder need not provide, and the Company hereby waives, any
presentment, demand, protest or other notice of any kind, and the Holder may immediately and without expiration of any grace period
enforce any and all of its rights and remedies hereunder and all other remedies available to it under applicable law. Such acceleration
may be rescinded and annulled by Holder at any time prior to payment hereunder and the Holder shall have all rights as a holder
of the Debenture until such time, if any, as the Holder receives full payment pursuant to this Section 6(b). No such rescission
or annulment shall affect any subsequent Event of Default or impair any right consequent thereon.


 


Section
7. Security. The Company’s obligations hereunder are secured pursuant to a security agreement, dated on
or about the date hereof, between the Company and the Collateral Agent named therein.


 


Section
8. Offset Rights. Notwithstanding anything to the contrary herein or in any of the other Transaction Documents,
(a) the parties hereto acknowledge and agree that Holder maintains a right of offset pursuant to the terms of the Secured Purchaser
Note that, under certain circumstances, permits Holder to deduct amounts owed by Company under this Debenture from amounts otherwise
owed by Holder under Secured Purchaser Note (the “Holder
Offset Right”), and (b) the parties hereto acknowledge and agree that the Company shall be entitled to deduct
and offset any amount owing by the Holder under the Secured Purchaser Note from any amount owed by the Company under this Debenture,
including in connection with the issuance of Common Stock by the Company to the Holder pursuant to a conversion effected pursuant
to Section 4(a) hereof, Amortization Payment or any other issuance of Common Stock as provided in the Transaction Documents (the
“Company Offset Right”).
In order to exercise the Holder Offset Right or the Company Offset Right, respectively, the offsetting party must deliver to the
other party (i) a completed and signed Offset Right Notice in the form attached hereto as Exhibit
A, and (ii) in connection with the exercise of a Company Offset Right, the original Purchaser Note being offset marked
“cancelled” or, in the event the Purchaser Note has been lost, stolen or destroyed, a lost note affidavit in a form
reasonably acceptable to Holder. In the event that Company’s exercise of the Company Offset Right results in the full satisfaction
of Company’s obligations under this Debenture, Holder shall return the original Debenture to Company marked “cancelled”
or, in the event this Debenture has been lost, stolen or destroyed, a lost note affidavit in a form reasonably acceptable to Company.
The Holder, any assignee, and the Company
by acceptance of this Debenture, acknowledge and agree that, by reason of the provisions of this paragraph, the unpaid and unconverted
principal amount of this Debenture or the principal balance of the Secured Purchaser Note may be less than the amount stated on
the face hereof.


 






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Section
9. Miscellaneous.


 


a)Notices.
Any and all notices or other communications or deliveries to be provided by the Holder hereunder, including, without limitation,
any Notice of Conversion, shall be in writing and delivered personally, by facsimile, or sent by a nationally recognized overnight
courier service, addressed to the Company, at the address set forth in the Purchase Agreement or such other facsimile number or
address as the Company may specify for such purposes by notice to the Holder delivered in accordance with this Section 7(a). Any
and all notices or other communications or deliveries to be provided by the Company hereunder shall be in writing and delivered
personally, by facsimile, or sent by a nationally recognized overnight courier service addressed to each Holder at the facsimile
number or address of the Holder as set forth in the Purchase Agreement, or as appearing on the books of the Company, or such other
facsimile number or address as the Holder may specify for such purposes by notice to the Company delivered in accordance with
this Section 7(a). Any notice or other communication or deliveries hereunder shall be deemed given and effective on the earliest
of (i) the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number set forth
on the signature pages attached hereto prior to 12:00 p.m. (New York City time) on any date, (ii) the next Trading Day after the
date of transmission, if such notice or communication is delivered via facsimile at the facsimile number set forth on the signature
pages attached hereto on a day that is not a Trading Day or later than 12:00 p.m. (New York City time) on any Trading Day, (iii)
the second Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service or (iv)
upon actual receipt by the party to whom such notice is required to be given.


 


b)Absolute
Obligation. Except as expressly provided herein, no provision of this Debenture shall alter or impair the obligation
of the Company to pay the principal of, liquidated damages and accrued interest, as applicable, on this Debenture at the time,
place, and rate, and in the coin or currency, herein prescribed. This Debenture is a direct debt obligation of the Company. This
Debenture ranks pari passu with
all other Debentures now or hereafter issued under the terms set forth herein.


 






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c)Lost
or Mutilated Debenture. If this Debenture shall be mutilated, lost, stolen or destroyed, the Company shall execute
and deliver, in exchange and substitution for and upon cancellation of a mutilated Debenture, or in lieu of or in substitution
for a lost, stolen or destroyed Debenture, a new Debenture for the principal amount of this Debenture so mutilated, lost, stolen
or destroyed, but only upon receipt of evidence of such loss, theft or destruction of such Debenture, and of the ownership hereof,
reasonably satisfactory to the Company.


 


d)Governing
Law. All questions concerning the construction, validity, enforcement and interpretation of this Debenture shall be
governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles
of conflict of laws thereof. Each party agrees that all legal proceedings concerning the interpretation, enforcement and defense
of the transactions contemplated by any of the Transaction Documents (whether brought against a party hereto or its respective
Affiliates, directors, officers, shareholders, employees or agents) shall be commenced in the state and federal courts sitting
in the City of New York, Borough of Manhattan (the “New
York Courts”). Each party hereto hereby irrevocably submits to the exclusive jurisdiction of the New York Courts
for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed
herein (including with respect to the enforcement of any of the Transaction Documents), and hereby irrevocably waives, and agrees
not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of such New York
Courts, or such New York Courts are improper or inconvenient venue for such proceeding. Each party hereby irrevocably waives personal
service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof via registered
or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under
this Debenture and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing
contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by applicable law.
Each party hereto hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by
jury in any legal proceeding arising out of or relating to this Debenture or the transactions contemplated hereby. If any party
shall commence an action or proceeding to enforce any provisions of this Debenture, then the prevailing party in such action or
proceeding shall be reimbursed by the other party for its attorney’s fees and other costs and expenses incurred in the investigation,
preparation and prosecution of such action or proceeding.


 


e)Waiver.
Any waiver by the Company or the Holder of a breach of any provision of this Debenture shall not operate as or be construed to
be a waiver of any other breach of such provision or of any breach of any other provision of this Debenture. The failure of the
Company or the Holder to insist upon strict adherence to any term of this Debenture on one or more occasions shall not be considered
a waiver or deprive that party of the right thereafter to insist upon strict adherence to that term or any other term of this
Debenture on any other occasion. Any waiver by the Company or the Holder must be in writing.


 






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f)Severability.
If any provision of this Debenture is invalid, illegal or unenforceable, the balance of this Debenture shall remain in effect,
and if any provision is inapplicable to any Person or circumstance, it shall nevertheless remain applicable to all other Persons
and circumstances. If it shall be found that any interest or other amount deemed interest due hereunder violates the applicable
law governing usury, the applicable rate of interest due hereunder shall automatically be lowered to equal the maximum rate of
interest permitted under applicable law. The Company covenants (to the extent that it may lawfully do so) that it shall not at
any time insist upon, plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury
law or other law which would prohibit or forgive the Company from paying all or any portion of the principal of or interest on
this Debenture as contemplated herein, wherever enacted, now or at any time hereafter in force, or which may affect the covenants
or the performance of this Debenture, and the Company (to the extent it may lawfully do so) hereby expressly waives all benefits
or advantage of any such law, and covenants that it will not, by resort to any such law, hinder, delay or impede the execution
of any power herein granted to the Holder, but will suffer and permit the execution of every such as though no such law has been
enacted.


 


g)Remedies,
Characterizations, Other Obligations, Breaches and Injunctive Relief. The remedies provided in this Debenture shall
be cumulative and in addition to all other remedies available under this Debenture 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 Debenture. The Company covenants to the Holder that there shall be no characterization concerning this instrument other than
as expressly provided herein. Amounts set forth or provided for herein with respect to payments, conversion and the like (and
the computation thereof) shall be the amounts to be received by the Holder and shall not, except as expressly provided herein,
be subject to any other obligation of the Company (or the performance thereof). The Company acknowledges that a breach by it of
its obligations hereunder will cause irreparable harm to the Holder and that the remedy at law for any such breach may be inadequate.
The Company therefore agrees that, in the event of any such breach or threatened breach, the Holder shall be entitled, in addition
to all other available remedies, to an injunction restraining any such breach or any such threatened breach, without the necessity
of showing economic loss and without any bond or other security being required. The Company shall provide all information and
documentation to the Holder that is requested by the Holder to enable the Holder to confirm the Company’s compliance with
the terms and conditions of this Debenture.


 


h)Next
Business Day. Whenever any payment or other obligation hereunder shall be due on a day other than a Business Day, such
payment shall be made on the next succeeding Business Day.


 


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


 


*********************


 


(Signature
Pages Follow)


 






    	23



    	 



    

 


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


 





	 	WINDSTREAM TECHNOLOGIES, INC.
	 	 	 
	 	By:	/s/ Dan
    Bates
	 	Name:	Dan Bates
	 	Title:	President



 






    	 



    	 



    

 


EXHIBIT
A


 


Form
of Offset Right Notice


 


Windstream
Technologies, Inc.


819
Buckeye Street


North
Vernon, Indiana 47265


 





	[Holder Address]	Date:________________



 





NOTICE OF EXERCISE


OF BORROWER OFFSET RIGHT


 


The
above-captioned Company hereby gives notice to _______________ (the “Holder”), pursuant to that certain Senior
Secured Original Issue Discount Convertible Debenture made by Company in favor of Holder on October __, 2014 (the  “Debenture”),
of Borrower’s election to exercise the Company Offset Right as set forth below. In the event of a conflict between this
Notice of Exercise of Company Offset Right and the Debenture, the Debenture shall govern. Capitalized terms used in this notice
without definition shall have the meanings given to them in the Debenture.


 


A.Effective
Date of Offset: _________________, 201_


B.Amount
of Offset: ____________________*


C.Investor
Debenture Being Offset: ______________________


 


*
Subject to adjustments for corrections, defaults, interest and other adjustments permitted by the Transaction Documents (as defined
in the Purchase Agreement), the terms of which shall control in the event of any dispute between the terms of this Notice of Exercise
of Borrower Offset Right and such Transaction Documents.


 


Sincerely,


 


Company:


 


WINDSTREAM
TECHNOLOGIES,
INC.


 





	By:	 	 
	Name:	 	 
	Title:	 	 



 






    	 



    	 



    

 


ANNEX A


 


NOTICE OF CONVERSION


 


The
undersigned hereby elects to convert principal under the Original Issue Discount Senior Secured Convertible Debenture due October
__, 2014 of Windstream Technologies, Inc., a Wyoming corporation (the “Company”),
into shares of common stock (the “Common
Stock”), of the Company according to the conditions hereof, as of the date written below. If shares of Common
Stock are to be issued in the name of a person other than the undersigned, the undersigned will pay all transfer taxes payable
with respect thereto and is delivering herewith such certificates and opinions as reasonably requested by the Company in accordance
therewith. No fee will be charged to the holder for any conversion, except for such transfer taxes, if any.


 


By
the delivery of this Notice of Conversion the undersigned represents and warrants to the Company that its ownership of the Common
Stock does not exceed the amounts specified under Section 4 of this Debenture, as determined in accordance with Section 13(d)
of the Exchange Act.


 


The
undersigned agrees to comply with the prospectus delivery requirements under the applicable securities laws in connection with
any transfer of the aforesaid shares of Common Stock.


 


Conversion
calculations:


 





	 	Date to Effect Conversion:
	 	 
	 	Principal Amount of Debenture
    to be Converted:
	 	 
	 	Payment of Interest in Common
    Stock __ yes __ no
	 	If yes,
    $_____ of Interest Accrued on Account of Conversion at Issue.
	 	 
	 	Number of shares of Common
    Stock to be issued:
	 	 
	 	Signature:
	 	 
	 	Name:
	 	 
	 	DWAC Instructions:
	 	 
	 	Broker
    No:	 
		Account No:	 


 






    	 



    	 



    

 


Appendix
A


 


Amortization
Schedule


 


	Amortization
    Payments	 	Cash
    (30% Premium)	 	 	Common
    Stock	 
	First Payment (4/__/15) [6 months from original issuance
    date]	 	$	625,119.59	 	 	$	480,861.22	 
	Second Payment (5/1/15)	 	$	354,234.44	 	 	$	272,488.03	 
	Third Payment (5/15/15)	 	$	354,234.44	 	 	$	272,488.03	 
	Fourth payment (6/1/15)	 	$	312,559.79	 	 	$	240,430.61	 
	Fifth Payment (6/15/15)	 	$	312,559.79	 	 	$	240,430.61	 
	Sixth Payment (7/1/15)	 	$	91,684.20	 	 	$	70,526.31	 
	Seventh Payment (7/15/15)	 	$	91,684.20	 	 	$	70,526.31	 
	Eighth Payment (8/1/15)	 	$	83,349.28	 	 	$	64,114.83	 
	Ninth Payment (8/15/15)	 	$	83,349.28	 	 	$	64,114.83	 
	Tenth Payment (9/1/15)	 	$	229,210.51	 	 	$	176,315.78	 
	Eleventh Payment (9/15/15)	 	$	229,210.51	 	 	$	176,315.78	 
	Twelfth Payment (10/__/15) [12 months from original issuance date]	 	$	166,698.56	 	 	$	128,229.66	 




 






    	 



    	 



    

      



Schedule 1


 


CONVERSION SCHEDULE


 


This
Original Issue Discount Senior Secured Convertible Debenture due on October__________, 2014 in the original principal amount
of $3,520,000 is issued by Windstream Technologies, Inc., a Wyoming corporation. This Conversion Schedule reflects conversions
made under Section 4 of the above referenced Debenture.


 


Dated:



 


	Date
    of Conversion 

    (or for first entry, 

    Original Issue Date)	 	Amount
    of 

    Conversion	 	Aggregate
    Principal

    Amount Remaining Subsequent to Conversion

    (or original Principal Amount)	 	Company
    Attest