Exhibit 10.1


 


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


 


THIS NOTE HAS BEEN ISSUED WITH ORIGINAL ISSUE
DISCOUNT (“OID”). PURSUANT TO TREASURY REGULATION §1.1275-3(b)(1), DAVID E. PRICE, ESQ., 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). DAVID E. PRICE, ESQ. MAY BE REACHED AT TELEPHONE NUMBER (202) 536-5191.


 


CANNABICS PHARMACEUTICALS INC.


 


SENIOR SECURED CONVERTIBLE NOTE


 


	Issuance Date: April 23, 2021	Original Principal Amount: US $1,375,000


 


FOR VALUE RECEIVED,
Cannabics Pharmaceuticals Inc., a Nevada corporation (the “Company”), hereby promises to pay to the order of 3i, LP
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, or upon acceleration, redemption or otherwise (in each case in accordance with the terms hereof) and, upon the occurrence of an
Event of Default (as defined below), to pay interest (“Interest”) on any outstanding Principal at the Default Rate
(as defined below), from the date set forth above as the Issuance Date (the “Issuance Date”) until the same becomes
due and payable, whether upon the Maturity Date or upon acceleration, conversion, redemption or otherwise (in each case in accordance
with the terms hereof). This Senior Secured Convertible Note (including all Senior Secured Convertible Notes issued in exchange, transfer
or replacement hereof, this “Note”) is one of an issue of Senior Secured Convertible Notes issued pursuant to the
Amended and Restated Securities Purchase Agreement, dated as of February 22, 2021 (the "Subscription Date"), by and
among the Company and the investors (the "Buyers") referred to therein, as amended from time to time (collectively,
the "Notes", and such other Senior Secured Convertible Notes, the "Other Notes"). Certain capitalized
terms used herein are defined in Section 31.


 


1.       PAYMENTS
OF PRINCIPAL. On the Maturity Date, the Company shall pay to the Holder an amount in cash representing all outstanding Principal,
accrued and unpaid Interest and accrued and unpaid Late Charges (as defined in Section 24(c)) on such Principal and Interest. Other than
as specifically permitted by this Note, the Company may not prepay any portion of the outstanding Principal, accrued and unpaid Interest
or accrued and unpaid Late Charges on Principal and Interest, if any.


 


2.       INTEREST; INTEREST RATE.


 


(a)          This
Note was issued with original issue discount as described in the Securities Purchase Agreement. This Note shall not bear Interest except
upon the occurrence (and during the continuance) of an Event of Default (as defined below), in which case this Note shall bear interest
at a rate of eighteen percent (18.0%) per annum (the "Default Rate") of the then outstanding Principal. In the event
that such Event of Default is subsequently cured or waived in accordance with the terms of this Note (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 (as defined below))), Interest hereunder shall cease to accrue as of the calendar day immediately following the date of such cure
or waiver; 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 or waiver
of such Event of Default.


 


 


 






    	 	1	 



     


    

 


(b)           Interest,
if any, shall be computed on the basis of a 360-day year and twelve 30-day months and shall be payable in arrears on each Interest Date
and shall compound each calendar month and shall be payable in accordance with the terms of this Note. Interest shall be paid on each
Interest Date in cash.


 


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


 


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


 


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


 


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


 


(ii)           "Conversion
Price" means, as of any Conversion Date or other date of determination, $0.35. subject to adjustment as provided herein.


 


(c)           Mechanics of Conversion.


 


(i)           Optional
Conversion. To convert any Conversion Amount into shares of Common Stock on any date (a "Conversion Date"), the
Holder shall deliver (whether via facsimile, electronic mail or otherwise), for receipt on or prior to 11:59 p.m., New York time, on
such date, a copy of an executed notice of conversion in the form attached hereto as Exhibit I (the "Conversion Notice")
to the Company. If required by Section 3(c)(iii), within 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 18(b)). On or before the first (1st)
Trading Day following the date of receipt of a Conversion Notice, the Company shall transmit by facsimile or electronic mail an acknowledgment
of confirmation 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 H, of receipt of such Conversion Notice to the Holder
and the Company's transfer agent (the "Transfer Agent") which confirmation shall constitute an instruction to the Transfer
Agent to process such Conversion Notice in accordance with the terms herein. On or before the 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 18(d))
representing the outstanding Principal not converted. The Person or Persons entitled to receive the shares of Common Stock issuable upon
a conversion of this Note shall be treated for all purposes as the record holder or holders of such shares of Common Stock on the Conversion
Date. Notwithstanding anything to the contrary contained in this Note or the Registration Rights Agreement, after the effective date
of the Registration Statement (as defined in the Registration Rights Agreement) and prior to the Holder's receipt of the notice of a
Grace Period (as defined in the Registration Rights Agreement), the Company shall cause the Transfer Agent to deliver unlegended shares
of Common Stock to the Holder (or its designee) in connection with any sale of Registrable Securities (as defined in the Registration
Rights Agreement) with respect to which the Holder has entered into a contract for sale, and delivered a copy of the prospectus included
as part of the particular Registration Statement to the extent applicable, and for which the Holder has not yet settled.


 


 






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(ii)          Company's
Failure to Timely Convert. If the Company shall fail, for any reason or for no reason, on or prior to the applicable Share Delivery
Deadline, either (I) if the Transfer Agent is not participating in the DTC Fast Automated Securities Transfer Program, to issue and deliver
to the Holder (or its designee) a certificate for the number of shares of Common Stock to which the Holder is entitled and register such
shares of Common Stock on the Company's share register or, if the Transfer Agent is participating in the DTC Fast Automated Securities
Transfer Program, to credit the balance account of the Holder or the Holder's designee with DTC for such number of shares of Common Stock
to which the Holder is entitled upon the Holder's conversion of this Note (as the case may be) or (II) if the Registration Statement
covering the resale of the shares of Common Stock that are the subject of the Conversion Notice (the "Unavailable Conversion
Shares") is not available for the resale of such Unavailable Conversion Shares and the Company fails to promptly, but in no
event later than as required pursuant to the Registration Rights Agreement (x) so notify the Holder and (y) deliver the shares of Common
Stock electronically without any restrictive legend by crediting such aggregate number of shares of Common Stock to which the Holder
is entitled pursuant to such 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.


 


 


 






    	 	3	 



     


    

 


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


 


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


 


 


 






    	 	4	 



     


    

 


(d)       Limitations
on Conversions. The Company shall not effect the conversion of any portion of this Note, and the Holder shall not have the right
to convert any portion of this Note pursuant to the terms and conditions of this Note and any such conversion shall be null and void
and treated as if never made, to the extent that after giving effect to such conversion, the Holder together with the other Attribution
Parties collectively would beneficially own in excess of 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, including, without limitation, the Warrants) beneficially
owned by the Holder or any other Attribution Party subject to a limitation on conversion or exercise analogous to the limitation contained
in this Section 3(d). For purposes of this Section 3(d), 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), 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 (61') 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 (61') 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) 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) or to make changes or supplements
necessary or desirable to properly give effect to such limitation. The limitation contained in this paragraph may not be waived and shall
apply to a successor holder of this Note.


 


 


 






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(e)           Right of Alternate
Conversion.


 


(i)           General.


 


(1)          Alternate
Optional Conversion. Subject to Section 3(d), at any time, at the option of the Holder, the Holder may convert (each, an "Alternate
Optional Conversion", and the date of such Alternate Optional Conversion, an "Alternate Optional Conversion Date")
all, or any part, of this Note into shares of Common Stock (such portion of the Conversion Amount subject to such Alternate Optional
Conversion, the "Alternate Optional Conversion Amount") at the Alternate Conversion Price.


 


(2)          Alternate
Conversion Upon an Event of Default. Subject to Section 3(d), at any time at any time after the occurrence of an Event of Default
(regardless of whether such Event of Default has been cured or if the Holder has delivered an Event of Default Redemption Notice to the
Company), the Holder may, at the Holder's option, convert (each, an "Alternate Event of Default Conversion" and together
with each Alternate Optional Conversion, each, an "Alternate Conversion", and the date of such Alternate Event of Default
Conversion, each, an "Alternate Event of Default Conversion Date", and together with each Alternate Optional Conversion
Date, each, an "Alternate Conversion Date") all, or any part of, the Conversion Amount (such portion of the Conversion
Amount subject to such Alternate Conversion, the "Alternate Event of Default Conversion Amount" and together with each
Alternate Optional Conversion Amount, each, an "Alternate Conversion Amount") into shares of Common Stock at the Alternate
Conversion Price.


 


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


 


4.       RIGHTS UPON EVENT OF
DEFAULT.


 


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


 


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


 


(ii)          while
the applicable Registration Statement is required to be maintained effective pursuant to the terms of the Registration Rights
Agreement, the effectiveness of the applicable Registration Statement lapses for any reason (including, without limitation, the
issuance of a stop order) or such Registration Statement (or the prospectus contained therein) is unavailable to any holder of
Registrable Securities (as defined in the Registration Rights Agreement) for sale of all of such holder's Registrable Securities in
accordance with the terms of the Registration Rights Agreement, 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));


 


 


 






    	 	6	 



     


    

 


(iii)         the suspension (or threatened suspension) from trading or the failure (or threatened failure) of the Common Stock to be trading
or listed (as applicable) on all 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 10(b) below, at any time following the tenth (10th) consecutive day
that the Holder's Authorized Share Allocation (as defined in Section 10(a) below) is less than (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, except, in the case of
a failure to pay Interest and Late Charges when and as due, in which case only if such failure remains uncured for a period of at least
two (2) Trading Days;


 


(vii)         the Company fails to remove any restrictive legend on any certificate or any shares of Common Stock issued to the Holder upon
conversion or exercise (as the case may be) of any Securities (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 $50,000 of Indebtedness
(as defined in the Securities Purchase Agreement) of the Company or any of its Subsidiaries, other than with respect to any Other Notes;


 


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


 


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


 


 


 






    	 	7	 



     


    

 


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


 


(xii)         a final judgment or judgments for the payment of money aggregating in excess of $50,000 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 $50,000 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 $50,000 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 $50,000, 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, 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;;


 


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


 


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


 


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


 


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


 


 


 






    	 	8	 



     


    

 


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


 


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


 


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


 


(b)          Notice
of an Event of Default; Redemption Right. Upon the occurrence of an Event of Default with respect to this Note or any Other Note,
the Company shall within 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, the Holder may require the Company to redeem
(regardless of whether such Event of Default has been cured) all or any portion of this Note by delivering written notice thereof (the
"Event of Default Redemption Notice") to the Company, which Event of Default Redemption Notice shall indicate the portion
of this Note the Holder is electing to redeem. Each portion of this Note subject to redemption by the Company pursuant to this Section
4(b) shall be redeemed by the Company at a price equal to the greater of (i) the product of (A) the Conversion Amount to be redeemed
multiplied by (B) the Redemption Premium and (ii) the product of (X) the Conversion Rate with respect to the Conversion Amount in effect
at such time as the Holder delivers an Event of Default Redemption Notice multiplied by (Y) the product of (1) the Redemption Premium
multiplied by (2) the greatest Closing Sale Price of the Common Stock on any Trading Day during the period commencing on the date immediately
preceding such Event of Default and ending on the date the Company makes the entire payment required to be made under this Section 4(b)
(the "Event of Default Redemption Price"). Redemptions required by this Section 4(b) shall be made in accordance with
the provisions of Section 11. To the extent redemptions required by this Section 4(b) are deemed or determined by a court of competent
jurisdiction to be prepayments of this Note by the Company, such redemptions shall be deemed to be voluntary prepayments. Notwithstanding
anything to the contrary in this Section 3(e), but subject to Section 3(d), until the Event of Default Redemption Price (together with
any Late Charges thereon) is paid in full, the Conversion Amount submitted for redemption under this Section 4(b) (together with any
Late Charges thereon) may be converted, in whole or in part, by the Holder into Common Stock pursuant to the terms of this Note. In the
event of 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.


 


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


 


 


 






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5.       RIGHTS UPON FUNDAMENTAL
TRANSACTION.


 


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


 


 


 






    	 	10	 



     


    

 


(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 twenty (20) Trading Days after the later of (A) the date of consummation
of such Change of Control or (B) the date of receipt of such Change of Control Notice or (C) the date of the announcement of such Change
of Control, the Holder may require the Company to redeem all or any portion of this Note by delivering written notice thereof ("Change
of Control Redemption Notice") to the Company, which Change of Control Redemption Notice shall indicate the Conversion Amount
the Holder is electing to redeem. The portion of this Note subject to redemption pursuant to this Section 5 shall be redeemed by the
Company in cash at a price equal to the greatest of (i) the product of (w) the Change of Control Redemption Premium multiplied by (y)
the Conversion Amount being redeemed, (ii) the product of (x) the Change of Control Redemption Premium multiplied by (y) the product
of (A) the Conversion Amount being redeemed multiplied by (B) the quotient determined by dividing (I) the greatest Closing Sale Price
of the shares of Common Stock during the period beginning on the date immediately preceding the earlier to occur of (1) the consummation
of the applicable Change of Control and (2) the public announcement of such Change of Control and ending on the date the Holder delivers
the Change of Control Redemption Notice by (II) the Conversion Price then in effect and (iii) the product of (y) the Change of Control
Redemption Premium multiplied by (z) the product of (A) the Conversion Amount being redeemed multiplied by (B) the quotient of (I) the
aggregate cash consideration and the aggregate cash value of any non-cash consideration per share of Common Stock to be paid to the holders
of the shares of Common Stock upon consummation of such Change of Control (any such non-cash consideration constituting publicly-traded
securities shall be valued at the highest of the Closing Sale Price of such securities as of the Trading Day immediately prior to the
consummation of such Change of Control, the Closing Sale Price of such securities on the Trading Day immediately following the public
announcement of such proposed Change of Control and the Closing Sale Price of such securities on the Trading Day immediately prior to
the public announcement of such proposed Change of Control) divided by (II) the Conversion Price then in effect (the "Change
of Control Redemption Price"). Redemptions required by this Section 5 shall be made in accordance with the provisions of Section
11 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, 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 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.


 


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).


 


 


 






    	 	11	 



     


    

 


(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 enters 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:


 


(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, issuance 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.


 


 


 






    	 	12	 



     


    

 


(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.


 


(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)(i), if the terms of any Option or Convertible Security
(including, without limitation, any Option or Convertible Security that was outstanding as of the Subscription Date) are increased
or decreased in the manner described in the immediately preceding sentence, then such Option or Convertible Security and the shares
of Common Stock deemed issuable upon exercise, conversion or exchange thereof shall be deemed to have been issued as of the date of
such increase or decrease. No adjustment pursuant to this Section 7(a) shall be made if such adjustment would result in an increase
of the Conversion Price then in effect.


 


 


 






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


 


(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 15 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 6, Section 15 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.


 


 


 






    	 	14	 



     


    

 


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


 


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


 


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


 


(f)            Calculations. All calculations under this Section 7 shall be made by rounding to the nearest cent or the nearest 1110011'
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.        REDEMPTIONS AT THE COMPANY'S ELECTION.


 


 


 






    	 	15	 



     


    

 


(a)          Company Optional
Redemption. At any time after the Issuance Date. the Company shall have the right to redeem all, or any part, 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 8(a) shall be redeemed by the Company in cash at a price (the "Company Optional Redemption Price") equal to 115%
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 8(a). The Company may exercise its right to require redemption under this
Section 8(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 in any given twenty (20) Trading Day period and each 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 ten (10) Trading Days nor more than twenty (20)
Trading Days following the Company Optional Redemption Notice Date, and (y) 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 8(a) (and analogous provisions under the Other Notes) on the Company Optional Redemption Date. Notwithstanding anything
herein to the contrary, 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 8(a) shall be made in accordance with Section 11. In the event of the Company's redemption of any portion of this Note under
this Section 8(a), 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 8(a) 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 8(a), then
it must simultaneously take the same action with respect to all of the Other Notes.


 


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


 


10.      RESERVATION
OF AUTHORIZED SHARES.


 


 


 






    	 	16	 



     


    

 


(a)            Reservation.
So long as any Notes remain outstanding, the Company shall at all times reserve at least 300% of the number of shares of Common Stock
as shall from time to time be necessary to effect the conversion, including without limitation, Alternate Conversions, 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 10(a), and not in limitation thereof, at any time while any of the Notes remain outstanding
the Company does not have a sufficient number of authorized and unreserved shares of Common Stock to satisfy its obligation to reserve
for issuance upon conversion of the Notes at least a number of shares of Common Stock equal to the Required Reserve Amount (an "Authorized
Share Failure"), then the Company shall immediately take all action necessary to increase the Company's authorized shares of Common
Stock to an amount sufficient to allow the Company to reserve the Required Reserve Amount for the Notes then outstanding. Without limiting
the generality of the foregoing sentence, as soon as practicable after the date of the occurrence of an Authorized Share Failure, but
in no event later than sixty (60) days after the occurrence of such Authorized Share Failure, the Company shall hold a meeting of its
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 10(a); and (ii) to the extent the Holder purchases (in an open market transaction
or otherwise) shares of Common Stock to deliver in satisfaction of a sale by the Holder of Authorized Failure Shares, any brokerage commissions
and other out-of-pocket expenses, if any, of the Holder incurred in connection therewith. Nothing contained in Section 10(a) or this
Section 10(b) shall limit any obligations of the Company under any provision of the Securities Purchase Agreement.


 


11. REDEMPTIONS.


 


 


 






    	 	17	 



     


    

 


(a)           Mechanics.
The Company shall deliver the applicable Event of Default Redemption Price to the Holder in cash within five (5) Business Days after
the Company's receipt of the Holder's Event of Default Redemption Notice. If the Holder has submitted a Change of Control Redemption
Notice in accordance with Section 5(b), the Company shall deliver the applicable Change of Control Redemption Price to the Holder in
cash concurrently with the consummation of such Change of Control if such notice is received prior to the consummation of such
Change of Control and within five (5) Business Days after the Company's receipt of such notice otherwise. The Company shall deliver
the applicable 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 18(d))
representing the outstanding Principal which has not been redeemed. In the event that the Company does not pay the applicable
Redemption Price to the Holder within the time period required, at any time thereafter and until the Company pays such unpaid
Redemption Price in full, the Holder shall have the option, in lieu of redemption, to require the Company to promptly return to the
Holder all or any portion of this Note representing the Conversion Amount that was submitted for redemption and for which the
applicable Redemption Price (together with any Late Charges thereon) has not been paid. Upon the Company's receipt of such notice,
(x) the applicable Redemption Notice shall be null and void with respect to such Conversion Amount, (y) the Company shall
immediately return this Note, or issue a new Note (in accordance with Section 18(d)), to the Holder, and in each case the principal
amount of this Note or such new Note (as the case may be) shall be increased by an amount equal to the difference between (1) the
applicable Redemption Price (as the case may be, and as adjusted pursuant to this Section 11, if applicable) minus (2) the Principal
portion of the Conversion Amount submitted for redemption and (z) the Conversion Price of this Note or such new Notes (as the case
may be) shall be automatically adjusted with respect to each conversion effected thereafter by the Holder to the lowest of (A) the
Conversion Price as in effect on the date on which the applicable Redemption Notice is voided, (B) 75% of the lowest Closing Bid
Price of the Common Stock during the period beginning on and including the date on which the applicable Redemption Notice is
delivered to the Company and ending on and including the date on which the applicable Redemption Notice is voided and (C) 75% of the
quotient of (I) the sum of the two (2) lowest VWAPs of the Common Stock during the ten (10) consecutive Trading Day period ending
and including the applicable Conversion Date divided by (II) two (2) (it being understood and agreed that all such determinations
shall be appropriately adjusted for any stock dividend, stock split, stock combination or other similar transaction during such
period). The Holder's delivery of a notice voiding a Redemption Notice and exercise of its rights following such notice shall not
affect the Company's obligations to make any payments of Late Charges which have accrued prior to the date of such notice with
respect to the Conversion Amount subject to such notice.


 


(b)          Redemption
by Other Holders. Upon the Company's receipt of notice from any of the holders of the Other Notes for redemption or repayment as
a result of an event or occurrence substantially similar to the events or occurrences described in Section 4(b) or Section 5(b)
(each, an "Other Redemption Notice"), the Company shall immediately, but no later than one (1) Business Day of its receipt
thereof, forward to the Holder by facsimile or electronic mail a copy of such notice. If the Company receives a Redemption Notice
and one or more Other Redemption Notices, during the seven (7) Business Day period beginning on and including the date which is 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.


 


12.         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.


 


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


 


 


 






    	 	18	 



     


    

 


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


 


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


 


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


 


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


 


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


 


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


 


(g)                   
Maturity of Indebtedness. 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.


 


 


 






    	 	19	 



     


    

 


(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.


 


(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 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.


 


(q)            Pre-Delivery Shares.


 


 


 






    	 	20	 



     


    

 


(i)             
General. On or prior to the second (2nd) Trading Day after the Issuance Date, subject to Section 3(d) above, the Company
shall deliver to the Holder (or its designee), either by crediting to the Holder's or its designee's balance account with DTC through
its Deposit/Withdrawal at Custodian system, or by a duly executed stock certificate, evidencing such aggregate number of shares of Common
Stock (the "Pre-Delivery Shares") equal to the lesser of (A) the quotient of (x) the initial Conversion Amount of this Note,
divided by (y) the Alternate Conversion Price then in effect, and as to which the Holder shall be the owner thereof as of the Issuance
Date (the "Maximum Pre-Delivery Share Amount"), and (B) the maximum number of Pre-Delivery Shares that may be then issued to
the Holder without resulting in a breach of Section 3(d) above; provided, that if as a result of clause (B) above, the Holder shall receive
less than the Maximum Pre-Delivery Share Amount of Pre-Delivery Shares (such unissued Pre-Delivery Shares, the "Blocked Pre-Delivery
Shares"), such Blocked Pre-Delivery Shares shall be held in abeyance by the Company until issued and released in accordance herewith
or at such time as this Note is no longer outstanding. After the Issuance Date, and 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
Release Notice Date (as defined below)) after the Company's receipt of a written notice (each a "Release Notice", and each such
date, a "Release Notice Date") from the Holder specifying an aggregate number of Blocked Pre-Delivery Share that the Holder
may receive on the applicable Release Notice Date that, after giving effect to such issuance would not result in a breach of Section 3(d)
above (each such Pre-Delivery Share specified in such Release Notice, a "Released Pre-Delivery Share"), the Company shall deliver
to the Holder (or its designee) a duly executed and delivered stock certificate evidencing such Released Pre-Delivery Shares set forth
in the applicable Release Notice (except, if such Released Pre-Delivery Shares are eligible to be resold by the Holder pursuant to Rule
144 or an effective registration statement, the Company shall alternatively deliver such Released Pre-Delivery Shares to the Holder's
(or its designee's) account with DTC by deposit/withdrawal at custodian), in each case, subject to the provisions of Section 3(c) and
3(d) above as if such Released Pre-Delivery Shares were due to such Holder pursuant to a Conversion Notice delivered to the Company on
such Release Notice Date, and the Holder shall be the owner of such applicable Released Pre-Delivery Shares on the applicable Release
Notice Date. For the avoidance of doubt, the Holder may deliver one or more Release Notices, at the Holder's sole option, at any time
after the Initial Pre-Delivery Date until such time as this Note no longer remains outstanding. Upon the Holder's (or its designee's)
receipt of any Released Pre-Delivery Shares, such Released Pre-Delivery Shares shall constitute Pre-Delivery Shares hereunder.


 


(ii)            Application
of Pre-Delivery Shares; Delivery Shares. At any time the Company is required to deliver shares of Common Stock to the Holder
hereunder (other than Pre-Delivery Shares or Released Pre-Delivery Shares)(each such share, a "Delivery Share"), whether
upon conversion or otherwise, and the Holder (or its designee) holds one or more Pre-Delivery Shares, the Company shall apply (each,
a "Delivery Share Application") such Pre-Delivery Share, on a share for share basis, as available, against each share of
Common Stock required to then be delivered hereunder, at which point in time, such applied Pre-Delivery Share shall cease to be a
Pre-Delivery Share hereunder and shall become a Delivery Share hereunder and, consequently, the Company shall be deemed to have
satisfied its delivery obligations hereunder with respect to such Delivery Share pursuant to this Note.


 


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


 


 


 






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


 


15.           
DISTRIBUTION OF ASSETS. In addition to any adjustments pursuant to Section 7, if the Company shall declare or make
any dividend or other distributions of its assets (or rights to acquire its assets) to any or all holders of shares of Common Stock,
by way of return of capital or otherwise (including without limitation, any distribution of cash, stock or other securities, property
or options by way of a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction)
(the "Distributions"), then the Holder will be entitled to such Distributions as if the Holder had held the number of shares
of Common Stock acquirable upon complete conversion of this Note (without taking into account any limitations or restrictions on the
convertibility of this Note 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).


 


16.
             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 Holder shall be required
for any change, waiver or amendment to this Note.


 


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


 


18.             REISSUANCE
OF THIS NOTE.


 


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


 


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


 


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


 


 


 






    	 	22	 



     


    

 


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


 


19.             REMEDIES,
CHARACTERIZATIONS, OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE RELIEF. The remedies provided in this Note shall be cumulative and
in addition to all other remedies available under this Note and any of the other Transaction Documents at law or in equity (including
a decree of specific performance and/or other injunctive relief), and nothing herein shall limit the Holder's right to pursue actual
and consequential damages for any failure by the Company to comply with the terms of this Note. 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).


 


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


 


21.             CONSTRUCTION; HEADINGS. This Note shall be deemed to be jointly drafted by the Company and the initial Holder and shall
not be construed against any such Person as the drafter hereof. The headings of this Note are for convenience of reference and shall
not form part of, or affect the interpretation of, this Note. Unless the context clearly indicates otherwise, each pronoun herein shall
be deemed to include the masculine, feminine, neuter, singular and plural forms thereof. The terms "including," "includes,"
"include" and words of like import shall be construed broadly as if followed by the words "without limitation." The
terms "herein," "hereunder," "hereof' and words of like import refer to this entire 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.


 


22.              FAILURE
OR INDULGENCE NOT WAIVER. No failure or delay on the part of the Holder in the exercise of any power, right or privilege hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other or further
exercise thereof or of any other right, power or privilege. No waiver shall be effective unless it is in writing and signed by an authorized
representative of the waiving party. Notwithstanding the foregoing, nothing contained in this Section 22 shall permit any waiver of any
provision of Section 3(d).


 


 


 






    	 	23	 



     


    

 


23.              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 Alternate Conversion Price, a
Black Scholes Consideration Value, a VWAP or a fair market value or the arithmetic calculation of a Conversion Rate, 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 Alternate Conversion Price, such Black Scholes Consideration Value, such VWAP or such fair market value, or
the arithmetic calculation of such Conversion Rate or such applicable Redemption Price (as the case may be), at any time after the
second (2') 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.


 


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


 


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


 


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


 


 


 






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24.            NOTICES; CURRENCY;
PAYMENTS.


 


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


 


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


 


(c)            Payments. Whenever any payment of cash is to be made by the Company to any Person pursuant to this Note, unless otherwise
expressly set forth herein, such payment shall be made in lawful money of the United States of America by a certified check drawn on
the account of the Company and sent via overnight courier service to such Person at such address as previously provided to the Company
in writing (which address,


in the case of each of the Buyers, shall initially
be as set forth on the Schedule of Buyers attached to the Securities Purchase Agreement), provided that the Holder may elect to receive
a payment of cash via wire transfer of immediately available funds by providing the Company with prior written notice setting out such
request and the Holder's wire transfer instructions. Whenever any amount expressed to be due by the terms of this Note is due on any day
which is not a Business Day, the same shall instead be due on the next succeeding day which is a Business Day. Any amount of Principal
or other amounts due under the Transaction Documents which is not paid when due shall result in a late charge being incurred and payable
by the Company in an amount equal to interest on such amount at the rate of eighteen percent (18%) per annum from the date such amount
was due until the same is paid in full ("Late Charge").


 


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


 


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


 


 


 






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27.             GOVERNING
LAW. This Note shall be construed and enforced in accordance with, and all questions concerning the construction, validity,
interpretation and performance of this Note shall be governed by, the internal laws of the State of New York, without giving effect
to any choice of law or conflict of law provision or rule (whether of the State of New York or any other jurisdictions) that would
cause the application of the laws of any jurisdictions other than the State of New York. Except as otherwise required by Section 23
above, the Company hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in The City of
New York, Borough of Manhattan, for the adjudication of any dispute hereunder or in connection herewith or with any transaction
contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding,
any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought
in an inconvenient forum or that the venue of such suit, action or proceeding is improper. Nothing contained herein shall be deemed
to limit in any way any right to serve process in any manner permitted by law. Nothing contained herein shall be deemed to limit in
any way any right to serve process in any manner permitted by law. Nothing contained herein (i) shall be deemed or operate to
preclude the Holder from bringing suit or taking other legal action against the Company in any other jurisdiction to collect on the
Company's obligations to the Holder, to realize on any collateral or any other security for such obligations, or to enforce a
judgment or other court ruling in favor of the Holder or (ii) shall limit, or shall be deemed or construed to limit, any provision
of Section 23. The Company (on behalf of itself and each of its Subsidiaries) hereby appoints David E. Price, Esq. as its agent for
service of process in New York. 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. The choice of the laws of the State of New York as the governing law of this Note is a valid choice of law and
would be recognized and given effect to in any action brought before a court of competent jurisdiction under the laws of the State
of Israel except for those laws (i) which such court considers to be procedural in nature, (ii) which are revenue or penal laws or
(iii) the application of which would be inconsistent with public policy, as such term is interpreted under the laws of the State of
Israel. The Company or any of their respective properties, assets or revenues does not have any right of immunity under the laws of
the State of Israel or New York law, from any legal action, suit or proceeding, from the giving of any relief in any such legal
action, suit or proceeding, from set-off or counterclaim, from the jurisdiction of the State of Israel, New York or United States
federal court, from service of process, attachment upon or prior to judgment, or attachment in aid of execution of judgment, or from
execution of a judgment, or other legal process or proceeding for the giving of any relief or for the enforcement of a judgment, in
any such court, with respect to its obligations, liabilities or any other matter under or arising out of or in connection with this
Note; and, to the extent that the Company, or any of its properties, assets or revenues may have or may hereafter become entitled to
any such right of immunity in any such court in which proceedings may at any time be commenced, the Company hereby waives such right
to the extent permitted by law and hereby consents to such relief and enforcement as provided in this Note and the other Transaction
Documents.


 


28.            JUDGMENT CURRENCY.


 


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


 


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


 


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


 


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


 


 


 






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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


(e)            
"Alternate Conversion Price" means, with respect to any Alternate Conversion that price which shall be the lower
of (i) the applicable Conversion Price as in effect on the applicable Conversion Date of the applicable Alternate Conversion, (ii) 80%
of the price computed as the quotient of (I) the sum of the VWAP of the Common Stock for each of the two (2) Trading Days with the lowest
VWAP of the Common Stock during the ten (10) consecutive Trading Day period ending and including the Trading Day immediately preceding
the delivery or deemed delivery of the applicable Conversion Notice, divided by (H) two (2) (such period, the "Alternate Conversion
Measuring Period"). All such determinations to be appropriately adjusted for any stock dividend, stock split, stock combination,
reclassification or similar transaction that proportionately decreases or increases the Common Stock during such Alternate Conversion
Measuring Period.


 


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


 


 


 






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


 


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


 


(i)             
"Bloomberg" means Bloomberg, L.P.


 


(j)             
"Business Day" means any day other than Saturday, Sunday or other day on which commercial banks in The City of
New York are authorized or required by law to remain closed; provided, however, for clarification, commercial banks shall not
be deemed to be authorized or required by law to remain closed due to "stay at home", "shelter-in-place", "non-essential
employee" or any other similar orders or restrictions or the closure of any physical branch locations at the direction of any governmental
authority so long as the electronic funds transfer systems (including for wire transfers) of commercial banks in The City of New York
generally are open for use by customers on such day.


 


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


 


(1)       "Change
of Control Redemption Premium" means 125%.


 


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


 


 


 






    	 	28	 



     


    

 


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


 


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


 


(p)           
"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.


 


(q)           
"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".


 


(r)            
"Eligible Market" means The New York Stock Exchange, the NYSE American, the Nasdaq Capital Market, the Nasdaq
Global Select Market, the Nasdaq Global Market, the OTCQX or the Principal Market.


 


(s)            
"Equity Conditions" means, with respect to an given date of determination: CO 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, 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 Public Information
Failure (as defined in the Registration Rights Agreement) exists or is continuing; (ii) on each day during the period beginning thirty
calendar days prior to the applicable date of determination and ending on and including the applicable date of determination (the "Equity
Conditions Measuring Period"), the Common Stock (including all Registrable Securities) is listed or designated for quotation (as
applicable) on an Eligible Market and shall not have been suspended from trading on an Eligible Market (other than suspensions of not
more than 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;


 


 






    	 	29	 



     


    

 


(iv) any shares of Common Stock to be issued in connection with the event requiring determination (or issuable upon conversion
of the Conversion Amount being redeemed in the event requiring this determination) may be issued in full without violating Section 3(d)
hereof; (v) any shares of Common Stock to be issued in connection with the event requiring determination (or issuable upon conversion
of the Conversion Amount being redeemed in the event requiring this determination (without regards to any limitations on conversion set
forth herein)) may be issued in full without violating the rules or regulations of the Eligible Market on which the Common Stock is then
listed or designated for quotation (as applicable); (vi) on each day during the Equity Conditions Measuring Period, no public announcement
of a pending, proposed or intended Fundamental Transaction shall have occurred which has not been abandoned, terminated or consummated;
(vii) the Company shall have no knowledge of any fact that would reasonably be expected to cause (1) any Registration Statement required
to be filed pursuant to the Registration Rights Agreement to not be effective or the prospectus contained therein to not be available
for the resale of the applicable Required Minimum Securities Amount of Registrable Securities in accordance with the terms of the Registration
Rights Agreement or (2) any Registrable Securities to not be eligible for sale pursuant to Rule 144 without the need for registration
under any applicable federal or state securities laws (in each case, disregarding any limitation on conversion of the Notes, other issuance
of securities with respect to the Notes and exercise of the Warrants) and no Current Public Information Failure exists or is continuing;
(viii) the Holder shall not be in (and no other holder of Notes shall be in) possession of any material, non-public information provided
to any of them by the Company, any of its Subsidiaries or any of their respective affiliates, employees, officers, representatives, agents
or the like; (ix) on each day during the Equity Conditions Measuring Period, the Company otherwise shall have been in compliance with
each, and shall not have breached any representation or warranty in any material respect (other than representations or warranties subject
to material adverse effect or materiality, which may not be breached in any respect) or any covenant or other term or condition of any
Transaction Document, including, without limitation, the Company shall not have failed to timely make any payment pursuant to any Transaction
Document; (x) on each Trading Day during the Equity Conditions Measuring Period, there shall not have occurred any Volume Failure or
Price Failure as of such applicable date of determination; (xi) on the applicable date of determination (A) no Authorized Share Failure
shall exist or be continuing and the applicable Required Minimum Securities Amount of shares of Common Stock are available under the
certificate of incorporation of the Company and reserved by the Company to be issued pursuant to the Notes and (B) all shares of Common
Stock to be issued in connection with the event requiring this determination (or issuable upon conversion of the Conversion Amount being
redeemed in the event requiring this determination (without regards to any limitations on conversion set forth herein)) may be issued
in full without resulting in an Authorized Share Failure; (xii) on each day during the Equity Conditions Measuring Period, there shall
not have occurred and there shall not exist an Event of Default or an event that with the passage of time or giving of notice would constitute
an Event of Default; (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 are duly authorized and listed and eligible for trading without restriction on an
Eligible Market.


 


(t)             "Equity
Conditions Failure" means that on any day during the period commencing twenty (20) Trading Days prior to the applicable date
of determination, the Equity Conditions have not been satisfied (or waived in writing by the Holder).


 


(u)           
"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).


 


 


 






    	 	30	 



     


    

 


(v)            "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 5% of the Common Stock issued and outstanding
immediately prior to the Subscription Date and (B) the exercise price of any such options is not lowered, none of such options are amended
to increase the number of shares issuable thereunder and none of the terms or conditions of any such options are otherwise materially
changed in any manner that adversely affects any of the Buyers; (ii) shares of Common Stock issued upon the conversion or exercise of
Convertible Securities or Options (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 or Options (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 or Options (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).


 


(w)          "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.


 


 






    	 	31	 



     


    

 


(x)            "GAAP”
means United States generally accepted accounting principles, consistently applied.


 


(y)           
"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.


 


(z)            "Indebtedness"
shall have the meaning ascribed to such term in the Securities Purchase Agreement.


 


(aa)          "Interest
Date" means, with respect to any given calendar month, the first Trading Day of such calendar month.


 


(bb)         "Maturity
Date" shall mean December 18, 2021; 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.


 


(cc)        
"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".


 


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


 


(ee)          "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.


 


(ff)            "Permitted
Indebtedness" means (i) Indebtedness evidenced by this Note and the Other Notes, (ii) Indebtedness set forth on Schedule 3(s)
to the Securities Purchase Agreement, as in effect as of the Subscription Date and (iii) Indebtedness secured by Permitted Liens or unsecured
but as described in clauses (iv) and (v) of the definition of Permitted Liens.


 


(gg)         "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).


 


 


 






    	 	32	 



     


    

 


(hh)        "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.


 


(ii)           "Price
Failure" means, with respect to a particular date of determination, the VWAP of the Common Stock on any Trading Day during the
ten (10) Trading Day period ending on the Trading Day immediately preceding such date of determination fails to exceed $0.15 (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.


 


(jj)           "Principal
Market" means the OTCQB.


 


(kk) "Redemption
Notices" means, collectively, the Event of Default Redemption Notices, the Company Optional Redemption Notices and the Change
of Control Redemption Notices, and each of the foregoing, individually, a "Redemption Notice."


 


(ll)       "Redemption
Premium" means 125%.


 


(mm) "Redemption
Prices" means, collectively, Event of Default Redemption Prices, the Change of Control Redemption Prices, and the Company Optional
Redemption Prices, and each of the foregoing, individually, a "Redemption Price."


 


(nn) "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.


 


(oo)       "SEC"
means the United States Securities and Exchange Commission or the successor thereto.


 


(pp)        
"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.


 


(qq)         
"Security Agreement" shall have the meaning as set forth in the Securities Purchase Agreement.


 


(rr)            "Subscription
Date" means December 16. 2020.


 


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


 


(tt)           "Subject
Entity" means any Person, Persons or Group or any Affiliate or associate of any such Person, Persons or Group.


 


(uu)        "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.


 


(vv)         
"Trading Day" means, as applicable, (x) with respect to all price or trading 48 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.


 


 






    	 	33	 



     


    

 


(ww)         
"Volume Failure" means, with respect to a particular date of determination, the aggregate daily dollar trading volume
(as reported on Bloomberg) of the Common Stock on the Principal Market on at least five (5) of the thirty (30) consecutive Trading Day
period ending on the Trading Day immediately preceding such date of determination (such period, the "Volume Failure Measuring Period"),
is less than $50,000 (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.


 


(xx)           "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 23. All such determinations shall be appropriately adjusted for any stock dividend, stock split, stock
combination, recapitalization or other similar transaction during such period.


 


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


 


32.             DISCLOSURE. Upon 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 entitled to
presume that information contained in the notice does not constitute material, non-public information relating to the Company or any
of its Subsidiaries. Nothing contained in this Section 32 shall limit any obligations of the Company, or any rights of the Holder, under
Section 4(i) of the Securities Purchase Agreement.


 


33.               ABSENCE
OF TRADING AND DISCLOSURE RESTRICTIONS. The Company acknowledges and agrees that the Holder is not a fiduciary or agent of the Company
and that the Holder shall have no obligation to (a) maintain the confidentiality of any information provided by the Company or (b) refrain
from trading any securities while in possession of such information in the absence of a written non-disclosure agreement signed by an
officer of the Holder that explicitly provides for such confidentiality and trading restrictions. In the absence of such an executed,
written non-disclosure agreement, the Company acknowledges that the Holder may freely trade in any securities issued by the Company,
may possess and use any information provided by the Company in connection with such trading activity, and may disclose any such information
to any third party.


 


[signature page follows]


 


 


 






    	 	34	 



     


    

 


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


 


	 	CANNABICS PHARMACEUTICALS INC.
	 	 
	 	By: /s/ Eyal Barad
	 	         Eyal Barad, Dir.. CEO



 


 


 


 


 


 


 


 


 


 


 


 


Senior Convertible Note - Signature Page


 






    	 	35	 



     


    

 


EXHIBIT I


 


CANNABICS PHARMACEUTICALS INC.

CONVERSION NOTICE


 


Reference is made
to the Senior Secured Convertible Note (the "Note") issued to the undersigned by Cannabics Pharmaceuticals 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, $0.0001 par value per share (the "Common Stock"),
of the Company, as of the date specified below. Capitalized terms not defined herein shall have the meaning as set forth in the Note.


 


 


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






 


 


AGGREGATE CONVERSION AMOUNT TO BE CONVERTED:


 





	Please confirm the following information:

 

    	 	 
	Number of shares of Common Stock
to he issued (prior to reduction for Pre-Delivery Shares):


 

	 	 
	 	 	 
	Less: Number of Pre-Delivery Shares
held by Holder to be applied against shares of Common Stock otherwise required to be issued:


 

	 	 
	 	 	 
	NUMBER
OF SHARES OF COMMON STOCK TO BE ISSUED (AFTER REDUCTION FOR SUCH PRE-DELIVERY SHARES):


 

	 	 



 

 


	q	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:________________




 


Please issue the Common Stock into which the Note is
being converted to Holder, or for its benefit, as follows:


 


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



 


 





	Issue to:

                          
	 
	 	 
	 	 
	 	 
	 	 



 


 


 






    	 	36	 



     


    

 


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



 


 


DTC Participant: _____________________________


 


DTC Number:________________________________


 


Account Number: _____________________________


 


Date _____________, ____


 


By: _____________________________


      Name:


     Title 


 


 


 


Tax ID: ______________


 


Facsimile ____________


 


E-mail address:


 


 






    	 	37	 



     


    

 


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 Cleatrust Transfer Agency
to issue the above indicated number of shares of Common Stock in accordance with the Transfer Agent Instructions dated December 18, 2020
from the Company and acknowledged and agreed to by Eyal Barad, Dir., CEO.


 





	 	CANNABICS PHARMACEUTICALS INC.
	 	 
	 	By:   /s/ Eyal Barad
	 	Eyal Barad
	 	Dir., CEO



 


 


 


 


 


 


 


 


 


 


 






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