Document:

EX-10.1

 Exhibit 10.1 

AMENDED AND RESTATED EMPLOYMENT AGREEMENT 

THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (this “Agreement”), between Ware H. Grove, an individual (the “Employee”),
and CBIZ, Inc., a Delaware corporation (the “Company”), amends and restates (and supersedes) the Employment Agreement entered into by Employee and the Company dated as of December 12, 2000, as amended effective as of November 22,
2010 (the “Prior Agreement”). This Agreement is executed and effective as of March 30, 2017. 
 PRELIMINARY STATEMENT 

The Company desires to continue to procure the services of Employee and Employee desires to continue to be employed by the Company on the
terms and subject to the conditions set forth in this Agreement. 
 NOW, THEREFORE, in consideration and as a condition of the
Employee’s employment by the Company and the mutual covenants and agreements contained herein, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound, the parties hereby agree as follows: 

TERMS 
 1. Employment At Will.
The Employee shall commence employment with the Company on December 12, 2000 (the “Commencement Date”). The Employee shall be employed by the Company on an “at will” basis as that term is construed under Ohio law and the
Employee’s employment shall continue until such employment is terminated by Employee or by the Company, with or without Cause (as defined in Section 2 below). It is expressly understood and agreed between the Company and the Employee that
the duration of the Employee’s employment is unspecified and rests in the sole discretion of the Company. 
 2. Discontinuation of
Position. 
 (a) In the event Employee’s employment terminates following the execution of this Agreement, the Company shall provide Employee with the
payments and benefits set forth below; provided, however, that in no event shall a payment be made under this Section due to Employee’s termination of employment unless such termination constitutes a “Separation from Service,” as
defined under Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”). 
 (b) Notwithstanding anything to the contrary contained
in Section 1 hereof, following a Change in Control (as defined in Exhibit A attached hereto) at any time while the Employee is employed by the Company, and an election by the Employee to terminate his employment with the Company (or its
successor) for Good Reason within two years of such Change in Control, the Company (or its successor) shall pay the Employee a multiple of two (2) times the sum of (i) his current base salary at the time of Employee’s Separation from
Service (“Base Salary”), plus (ii) the average bonus paid to Employee in the three-year period immediately preceding the year of termination (the “Average Bonus”), payable in pro rata monthly amounts for a period of
twenty-four (24) months subsequent to Employee’s Separation from Service following the date of such Change in Control. 
 (c) Similarly, if at any
time while the Employee is employed by the Company the Company terminates the Employee without Cause, the Company shall pay the Employee a multiple of two (2) times the sum of (i) his Base Salary, plus (ii) the Average Bonus, payable
in pro rata monthly amounts for a period of twenty-four (24) months subsequent to Employee’s Separation from Service. 

 (d) In addition, if the Employee terminates his employment under either Section 2(b) or Section 2(c) above, the
Company will continue to provide health and welfare benefits to the Employee and his dependents at the same levels and for the same costs as exist on the date of Change in Control or termination, as applicable, for a period of twenty four
(24) months thereafter; provided, however, that the Company’s obligations to provide health and welfare benefits shall expire prior to such twenty four (24)-month period if the Employee accepts other employment during such period and
Employee is eligible to receive health and welfare benefits pursuant to such employment. 
 (d) As used herein, the term “Cause” shall mean
(i) fraud, misappropriation, embezzlement, or willful conduct, gross misconduct or dishonesty on the part of the Employee that is materially injurious to the Company, (ii) the conviction of a felony or the commission of an act involving
moral turpitude, (iii) the Employee’s failure to perform his duties with the Company or to carry out the reasonable and lawful directives of the Company’s Chief Executive Officer, which failure has not been cured within thirty
(30) days after notice of such failure is given to the Employee by the Company, (iv) the Employee’s breach of any provision of this Agreement, which breach has not been cured within thirty (30) days after notice of such breach is
given to the Employee by the Company, or (v) termination occurring as a result of the Employee’s death or permanent disability. The Employee will be deemed to be permanently disabled if the Employee is unable to fully perform his duties
and responsibilities hereunder by reason of physical or mental illness, injury or incapacity for ninety (90) days in any twelve (12)-month period. As used herein, the term “Good Reason” shall mean: (i) the Company materially
reduces Employee’s authority, duties or responsibilities from those set forth in Section 3 below; (ii) the Company materially reduces Employee’s Base Salary from that set forth in Section 4(a) below (but only to the extent that
such reduction results in a substantial reduction in Employee’s total compensation); (iii) Employee is required to report to anyone other than the Chief Employee Officer of the Company or the Board of Directors of the Company, such as another
corporate officer or employee; (iv) the Company changes Employee’s principal place of employment to a location that is more than 50 miles from the geographical center of Cleveland, Ohio, or changes the Company’s principal Employee
offices to a location that is more than 50 miles from the geographical center of Cleveland, Ohio; or (v) the Company materially breaches any of its obligations under this Agreement; provided, however, that notwithstanding the foregoing, no
termination of employment by Employee shall constitute a termination for “Good Reason” unless (x) Employee gives the Company notice of the existence of an event described in clause (i), (ii), (iii), (iv) or (v) of this Section
2(d), within 90 days following the occurrence thereof, (y) the Company does not remedy such event described in clause (i), (ii), (iii), (iv) or (v) of this Section 2(d), as applicable, within 30 days of receiving the notice described in
the preceding clause (x) of this Section 2(d), and (z) in all cases, Employee terminates employment pursuant to Section 2(a) within one year from the date the event described in clause (i), (ii), (iii), (iv) or (v) of this Section
2(d) initially occurred. 
 In the event Employee is a “Specified Employee” (as defined under Code Section 409A), then any and all
payments or benefits under this Section 2 that are not excludable from Code Section 409A’s definition of “deferred compensation” shall commence being paid six (6) months after Executive’s Date of Termination. At such
time, Employee shall receive one lump sum catch-up payment equal to the amount that would have been paid over the previous six (6)-month period. All remaining benefits or payments, if any, shall be paid as
otherwise provided for under this Agreement. 
 3. Title; Duties. The Employee’s title shall be Senior Vice President and Chief
Financial Officer and he shall report directly to the Chief Executive Officer of the Company. The Employee shall devote his full business time and efforts solely to the business and interests of the Company; provided, however, that nothing contained
herein shall prohibit the Employee from serving on the board of directors or an 

 
advisory counsel of no more than three companies or otherwise participating on the board of any charitable, community, or similar organization so long as such activities do not, in the reasonable
opinion of the Company’s Chief Executive Officer, unreasonably interfere with the Employee’s duties and responsibilities to the Company. During his employment with the Company, the Employee shall not engage in any activity which would be
inconsistent with such duties or with the objectives and business of the Company and shall diligently perform his obligations and discharge his duties under this Agreement. The Employee shall adhere to all ethical practices and other rules and
regulations established by the Company. 
 4. Salary and Benefits. During the term of the Employee’s employment with the Company, the
Employee shall receive the following salary and benefits: 
 (a) Annual Salary. The Employee’s base annual salary as of the effective
date of this Agreement shall be Four Hundred Twenty Eight Thousand Five Hundred Dollars ($428,500.00). The Employee’s base annual salary shall be reviewed on an annual basis and may be adjusted based on the performance of the Employee. 

(b) Discretionary Bonus. The Employee shall be eligible to participate in all bonus programs of the Company that are generally provided for the
benefit of the senior executives of the Company; provided that the amount of any such bonus shall be based on the criteria established for measuring the performance of Employee as determined by the Chief Executive Officer of the Company or the Board
of Directors of the Company. 
 (c) Benefits. The Employee shall be eligible to participate in all health and welfare benefit plans and other
employee benefit plans, practices, policies and programs provided by the Company and applicable to similarly situated employees of the Company, as the same may be amended from time to time. 

(d) Automobile Allowance. During the term of the Employee’s employment with the Company, the Employee shall receive an automobile
allowance equal to $500 per month. 
 (e) Stock Options. The Employee shall be eligible to participate in stock options and restricted stock
awards (“Additional Awards”) made available to senior management of the Company after his first year of employment, which stock option awards shall be at the discretion of the Compensation Committee of the Board of Directors of the
Company. Following either (i) a Change in Control at any time while the Employee is employed by the Company, and an election by the Employee to terminate his employment with the Company (or its successor) for Good Reason within two years of
such Change in Control, or (ii) termination of the Employee by the Company without Cause, then the unvested portion of the Additional Awards shall immediately vest in the case of restricted stock awards, and, in the case of stock option awards,
become immediately exercisable for the remaining term of such stock option. 
 5. Noncompetition. During the applicable Restriction Period
(as defined below), the Employee shall not, directly or indirectly (whether individually or as a shareholder or other owner, investor, partner, director, officer, employee, consultant, creditor or agent of any person, firm, association,
organization, or other entity other than the Company): 
 (a) Enter into, engage in, promote, assist (financially or otherwise), or consult
with any business (the “Business”) which competes with the business of the Company anywhere in the United States; 

 (b) Induce (or attempt to induce) or encourage any employee, officer, director, representative,
agent, vendor, or independent contractor of the Company to terminate or materially alter its relationship with the Company, or otherwise interfere or attempt to interfere in any way with the Company’s relationships with its employees, officers,
directors, representatives, agents, vendors, independent contractors, or others; 
 (c) Employ or engage any person who, at any time within
the twelve (12)-month period immediately preceding such employment or engagement, was an employee, officer, director, representative, agent, vendor, or independent contractor of any the Company; or 

(d) Take any other action that would impair the value of the Business or the assets of the Company, including, without limitation, any action
that would tend to disparage or diminish the reputation of the Company. 
 For purposes of this agreement, the term “Restriction
Period” shall mean the period commencing on the date hereof and continuing for one (1) year after the date on which the Employee’s employment with the Company is terminated (for any reason). 

The Employee acknowledges that (i) the provisions of Sections 5 and 6 of this Agreement are fundamental and essential for the protection
of the Company’s legitimate business and proprietary interests, and (ii) such provisions are reasonable and appropriate in all respects. 

Notwithstanding the foregoing, nothing contained in this Section 5 shall be deemed to preclude the Employee from owning less than five
percent (5%) of the combined voting power of all issued and outstanding voting securities of any publicly held corporation whose stock is traded on a major stock exchange or quoted on NASDAQ. 

6. Nondisclosure. The Employee agrees that he shall not at any time after the date of this Agreement directly or indirectly copy, disseminate
or use, for the Employee’s personal benefit or the benefit of any third party, any Confidential Information (as defined below), regardless of how such Confidential Information may have been acquired, except for the disclosure or use of such
Confidential Information as may be (a) required by Employee in connection with his employment with the Company, (b) required by law, or (c) authorized in writing by the Company. For purposes of this Agreement, the term
“Confidential Information” shall mean all information or knowledge belonging to, used by, or which is in the possession of the Company or relating to the Company’s business, business plans, strategies, or clients (including, without
limitation, the names, addresses or telephone numbers of such clients), vendors, technology, programs, finances, costs, employees (including, without limitation, the names, addresses or telephone numbers of any employees), employee compensation
rates or policies, marketing plans, development plans, computer programs, computer systems, inventions, developments, trade secrets, know-how or confidences of the Company, without regard as to whether any of
such Confidential Information may be deemed confidential or material to any third party, and the Employee hereby stipulates to the confidentiality and materially of such Confidential Information. Notwithstanding anything to the contrary contained in
the preceding sentence, Confidential Information shall not include information that is or becomes generally available to the public other than as a direct or indirect result of a disclosure by the Employee or a representative of the Employee. The
Employee acknowledges that all of the Confidential Information is and shall continue to be the exclusive proprietary property of the Company, whether or not prepared in whole or in part by the Employee and whether or not disclosed to or entrusted to
the custody of the Employee. The Employee agrees upon the termination of Employee’s employment with the Company (for any reason), the Employee will return promptly to the Company all memoranda, notes, records, reports, manuals, pricing lists,
prints and other documents (and all copies thereof) relating to the Company’s business which the Employee may then possess or have within the Employee’s control, regardless of whether any such documents constitute Confidential Information.
The Employee further agrees that he shall forward to the Company or its designee all Confidential Information which at any time comes into the Employee’s possession or the possession of any other person, firm or entity with which the Employee
is affiliated in any capacity. 

 7. Remedies. The Employee acknowledges and agrees that the Company would suffer irreparable harm
from a breach by the Employee of the restrictive covenants set forth in Sections 5 or 6. Therefore, in the event of the actual or threatened breach by the Employee under Sections 5 or 6, the Company may, in addition and supplementary to any other
rights and remedies exiting in its favor (including, without limitation, its right to terminate the Employee’s employment for Cause), apply to any court of law or equity of competent jurisdiction for specific performance or injunctive or other
relief in order to enforce or prevent any violation of the provisions of Sections 5 or 6. The Employee agrees not to raise the defense of an adequate remedy at law in any such proceeding. The Employee agrees that the existence of any claim or cause
of action by the Employee against the Company, whether predicated upon this Agreement or any other contract, shall not constitute a defense to the enforcement by the Company of the provisions of Section 5 or 6. 

8. Notice. All notices and other communications required or permitted under this Agreement shall be deemed to have been duly given and made if
in writing and if served either by personal delivery to the party for whom intended (which shall include delivery by Federal Express or similar service) or three (3) business days after being deposited, postage prepaid, certified or registered
mail, return receipt requested, in the United States mail bearing the address shown in this Agreement for, or such other address as may be designated in writing hereafter by, such party: 

 

			
	If to the Employee:	  	Mr. Ware H. Grove
		  	7678 Mannheim Court
		  	Hudson, Ohio 44236
		
	If to the Company:	  	CBIZ, Inc.
		  	6050 Oak Tree Blvd., South
		  	Suite 500
		  	Cleveland, Ohio 44131
		  	Attention: Chief Executive Officer
		  	                 General Counsel

 9. Reformation; Severability. Whenever possible, each provision of this Agreement shall be interpreted
in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is finally determined by a court of competent jurisdiction to be unenforceable or invalid under applicable law, such provision shall be
effective only to the extent of its enforceability or validity, without affecting the enforceability or validity of the remainder of this Agreement, and such court shall have jurisdiction to reform this Agreement to the maximum extent permitted by
law. In the event that any such provision of this Agreement cannot be reformed, such provision shall be deemed severed from this Agreement, but every other provision of this Agreement shall remain in full force and effect. 

10. Binding Effect: Waiver. The terms and provisions of this Agreement shall be binding on and inure to the benefit of the Employee, his heirs,
executors, administrators, and other legal representatives and shall be binding on and inure to the benefit of the Company, its affiliates, successors or assigns. The failure of the Company at any time or from time to time to require performance of
any of the Employee’s obligations under this agreement shall in no manner affect the Company’s right to enforce any provision of this Agreement at a subsequent time, and the waiver of any rights arising out of any breach shall not be
construed as a waiver of any rights arising out of any subsequent or prior breach. 

 11. Entire Agreement. This Agreement constitutes the entire agreement and understanding between
the Employee and the Company with respect to the subject matter hereof, and supersedes all prior agreements and understandings relating to the subject matter hereof. 

12. Amendment. No amendment, modification, or waiver of any provision of this Agreement, or consent to any departure by the Employee therefrom,
shall be effective unless the same shall be in writing and signed by the parties hereto. 
 13. Assignment. This Agreement is for personal
services to be performed by the Employee and may not be assigned or transferred by the Employee, or the obligations of the Employee performed by any other party. All of the rights and obligations of the Company under this Agreement are fully
assignable and transferable by the Company. 
 14. Counterparts. This Agreement may be executed in multiple counterparts, each of which shall
be deemed an original but all of which together shall constitute one and the same instrument. 
 15. Headings. The various headings of this
Agreement are inserted for convenience only and shall not affect the meaning or interpretation of this Agreement or any provisions hereof. 

16. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Ohio. 

17 . Tax Considerations and Payment Limitations. 

(a) Withholding. All payments hereunder shall be subject to any required withholding of Federal, state and, local, employment, or other taxes pursuant to any
applicable law or regulation. 
 (b) Code Section 409A Compliance. This Agreement is intended to be operated in compliance with the provisions of Code
Section 409A (including any applicable rulings or regulations promulgated thereunder). In the event that any provision of this Agreement fails to satisfy the provisions of Code Section 409A and cannot be amended, modified, or terminated, then such
provision shall be void and shall not apply to Employee, to the extent practicable. In the event that it is determined to not be feasible to so void a provision of this Agreement as it applies to any amount payable to or on behalf of Employee, such
provision shall be construed in a manner so as to comply with the requirements of Code Section 409A. No severance obligation or payment otherwise due to Employee as a result of a severance payable upon termination pursuant to Section 2 of this
Agreement shall exist unless Employee first provides CBIZ with notice of the condition triggering such separation within 90 days after the initial existence of the condition, and Employee allows CBIZ to remedy the condition within at least 30 days
after notice has been provided by Employee. If the condition contained in Employee’s notice is not remedied within the foregoing period, then Employee is entitled to claim a Separation from Service pursuant to Section 2 of this Agreement.

 (c) Code Section 162(m)—Delay of Payments. Notwithstanding any other provision of this Agreement to the contrary, the Company may delay the payment
of any amount otherwise due to Employee under Section 2 of this Agreement if the Company reasonably anticipates that its deduction resulting from such payment, either alone or in combination with any other amounts to be paid or provided to
Employee under any section of this Agreement or any other agreements, plans or programs of the Company, would be reduced by application of Code Section 162(m); provided, however, that the Company shall make payments to Employee at the earliest date
at which the Company believes Code Section 162(m) will no longer reduce its deduction for such payments. 

 IN WITNESS WHEREOF, the parties hereto have executed or caused to be executed this instrument as
of the date first above written. 
  

	
	EMPLOYEE:
	
	 /s/ Ware H. Grove

	Ware H. Grove
	
	THE COMPANY:
	
	CBIZ, Inc.
	
	 /s/ Jerome P. Grisko, Jr.

	Jerome P. Grisko, Jr., CEO

 EXHIBIT A 

CHANGE IN CONTROL 
 Change in
Control. A “Change in Control” shall mean the occurrence during the term of Employee’s employment with the Company of any of the following events: (A) any person or group of persons (including, without limitation, CBIZ and any
shareholder of CBIZ) purchases thirty percent (30%) or more of the voting control or value of the capital stock of CBIZ, in one transaction or in a series of transactions (a “Transaction”), excluding, however, any repurchase of capital
stock by CBIZ after the date of a Transaction; or (B) the shareholders of CBIZ approve an agreement to merge or consolidate with another corporation or other entity resulting (whether separately or in connection with a series of transactions)
in a change in ownership of thirty percent (30%) or more of the voting control or value of the capital stock of CBIZ, or an agreement to sell or otherwise dispose of all or substantially all of CBIZ’s assets (including, without limitation, a
plan of liquidation or dissolution), or otherwise approve of a fundamental alteration in the nature of CBIZ’s business, provided that the 30% change of control does not result from a repurchase of capital stock by CBIZ after such merger,
consolidation or sale of assets.LEGEND OIL AND GAS 8-K

EXHIBIT 4.1

 

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

 

Original Issue Date: April 3, 2017

Original Conversion Price (subject to adjustment
herein): $0.03

 

$660,000.00

 

Original
ISSUE DISCOUNT SENIOR CONVERTIBLE DEBENTURE

DUE
MARCH 1, 2018

 

THIS ORIGINAL ISSUE DISCOUNT
SENIOR CONVERTIBLE DEBENTURE is one of a series of duly authorized and validly issued Original Issue Discount Senior Secured Convertible
Debentures of LEGEND OIL AND GAS, LTD., a Colorado corporation (the “Company”), having its principal place of
business at 555 North Point Center East, Suite 400, Alpharetta, Georgia 30022, designated as its Original Issue Discount Senior
Secured Debentures due March 1, 2018 (the “Debenture” and, collectively with the other debentures of such series,
if any, the “Debentures”).

 

FOR VALUE RECEIVED, the
Company promises to pay to HILLAIR CAPITAL INVESTMENTS L.P. or its registered assigns (the “Holder”), or shall
have paid pursuant to the terms hereunder, the principal sum of $660,000.00 on March 1, 2018 (the “Maturity Date”)
or such earlier date as this Debenture is required or permitted to be repaid as provided hereunder, and to pay interest to the
Holder on the aggregate then outstanding principal amount of this Debenture in accordance with the provisions hereof. This Debenture
is subject to the following additional provisions:

 

Section
1.Definitions. For the purposes hereof, in addition to the terms defined elsewhere in this Debenture or in the
Purchase Agreement or the Transaction Documents (as defined in the Purchase Agreement), the following terms shall have the following
meanings:

 

    	 	1	 

    	 

    

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

 

“Business
Day” means any day except any Saturday, any Sunday, any day which is a federal legal holiday in the United States or
any day on which banking institutions in the State of New York are authorized or required by law or other governmental action to
close.

 

“Change
of Control Transaction” means the occurrence after the date hereof of any of (a) an acquisition after the date hereof
by an individual or legal entity or “group” (as described in Rule 13d-5(b)(1) promulgated under the Exchange Act) of
effective control (whether through legal or beneficial ownership of capital stock of the Company, by contract or otherwise) of
in excess of 33% of the voting securities of the Company, (b) the Company merges into or consolidates with any other Person, or
any Person merges into or consolidates with the Company and, after giving effect to such transaction, the stockholders of the Company
immediately prior to such transaction own less than 66% of the aggregate voting power of the Company or the successor entity of
such transaction, (c) the Company sells or transfers all or substantially all of its assets to another Person and the stockholders
of the Company immediately prior to such transaction own less than 66% of the aggregate voting power of the acquiring entity immediately
after the transaction, (d) a replacement at one time or within a three year period of more than one-half of the members of the
Board of Directors which is not approved by a majority of those individuals who are members of the Board of Directors on the Original
Issue Date (or by those individuals who are serving as members of the Board of Directors on any date whose nomination to the Board
of Directors was approved by a majority of the members of the Board of Directors who are members on the date hereof), or (e) the
execution by the Company of an agreement to which the Company is a party or by which it is bound, providing for any of the events
set forth in clauses (a) through (d) above.

 

“Event
of Default” shall have the meaning set forth in Section 8(a).

 

    	 	2	 

    	 

    

 

“Indebtedness”
means, with respect to the Company, (x) any liabilities for borrowed money or amounts owed in excess of $50,000 (other than trade
accounts payable incurred in the ordinary course of business), (y) all guaranties, endorsements and other contingent obligations
in respect of indebtedness of others, whether or not the same are or should be reflected in the Company’s consolidated balance
sheet (or the notes thereto), except guaranties by endorsement of negotiable instruments for deposit or collection or similar transactions
in the ordinary course of business; and (z) the present value of any lease payments in excess of $50,000 due under leases required
to be capitalized in accordance with GAAP.

 

“Mandatory
Default Amount” means the sum of (a) 130% of the outstanding principal amount of this Debenture and (b) all other amounts,
costs, expenses and liquidated damages due in respect of this Debenture.

 

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

 

“Optional
Redemption” shall have the meaning set forth in Section 6.

 

“Optional
Redemption Amount” means the sum of (a) 120% of the then outstanding principal amount of the Debenture, (b) accrued but
unpaid interest on the Debenture and (c) all liquidated damages and other amounts due in respect of the Debenture.

 

“Optional
Redemption Date” shall have the meaning set forth in Section 6.

 

“Optional
Redemption Notice” shall have the meaning set forth in Section 6.

 

“Optional
Redemption Notice Date” shall have the meaning set forth in Section 6.

 

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

 

“Permitted
Indebtedness” means (a) the indebtedness evidenced by the Debentures, (b) the Indebtedness existing on the Original Issue
Date, (c) lease obligations and purchase money indebtedness of up to $600,000, in the aggregate, incurred in connection with the
acquisition of capital assets and lease obligations with respect to newly acquired or leased assets and (d) the Seller’s
Note (as defined in the April 2nd Purchase Agreement (as defined below)).

 

“Permitted
Lien” means the individual and collective reference to the following: (a) Liens for taxes, assessments and other governmental
charges or levies not yet due or Liens for taxes, assessments and other governmental charges or levies being contested in good
faith and by appropriate proceedings for which adequate reserves (in the good faith

 

 

    	 	3	 

    	 

    

judgment of the management of the
Company) have been established in accordance with GAAP, (b) Liens imposed by law which were incurred in the ordinary course of
the Company’s business, such as carriers’, warehousemen’s and mechanics’ Liens, statutory landlords’
Liens, and other similar Liens arising in the ordinary course of the Company’s business, and which (x) do not individually
or in the aggregate materially detract from the value of such property or assets or materially impair the use thereof in the operation
of the business of the Company and its consolidated Subsidiaries or (y) are being contested in good faith by appropriate proceedings,
which proceedings have the effect of preventing for the foreseeable future the forfeiture or sale of the property or asset subject
to such Lien, (c) Liens incurred in connection with Permitted Indebtedness under clause (c) thereunder, provided that such Liens
are not secured by assets of the Company or its Subsidiaries other than the assets so acquired or leased, (d) the Liens in connection
with the Seller’s Note described in Section 4.18 of the Securities Purchase Agreement between the Holder and Company dated
April 2, 2015 (the “April 2nd Purchase Agreement”) and (e) the
Lien on rolling stock of Subsidiaries of the Company incurred on December 16, 2015 securing the repayment of borrowings of up to
$272,000 under a Business Loan Agreement with State Bank and Trust Company.

 

“Purchase
Agreement” means the Securities Purchase Agreement, dated as of April 3, 2017, between the Company and the Holder.

 

“Transaction
Documents” means the Purchase Agreement, this Debenture, and all documents executed in connection therewith and herewith.

 

Section
2.No Regular Interest Payment.

 

a)                 
The parties acknowledge this Debenture was issued at an original issue discount and there are no regularly scheduled interest payments.

 

b)                 
Prepayment. Except as otherwise set forth in this Debenture, the Company may not prepay any portion of the principal amount
of this Debenture without the prior written consent of the Holder.

 

Section 3.Registration
of Transfers and Exchanges. This Debenture is exchangeable for an equal aggregate principal amount of Debentures of different
authorized denominations, as requested by the Holder surrendering the same. No service charge will be payable for such registration
of transfer or exchange.

 

Section 4.Conversion.

 

a)                 
Voluntary Conversion. At any time after the Original Issue Date until this Debenture is no longer outstanding, this Debenture
shall be convertible, in whole or in part, into shares of Common Stock at the option of the Holder, at any time and from time to
time (subject to the conversion limitations set forth in Section 4(d) hereof). The Holder shall effect conversions by delivering
to the Company a Notice of Conversion, the

 

 

    	 	4	 

    	 

    

form of which is attached hereto
as Annex A (each, a “Notice of Conversion”), specifying therein the principal amount of this Debenture
to be converted and the date on which such conversion shall be effected (such date, the “Conversion Date”).
If no Conversion Date is specified in a Notice of Conversion, the Conversion Date shall be the date that such Notice of Conversion
is deemed delivered hereunder. No ink-original Notice of Conversion shall be required, nor shall any medallion guarantee (or other
type of guarantee or notarization) of any Notice of Conversion form be required. To effect conversions hereunder, the Holder shall
not be required to physically surrender this Debenture to the Company unless the entire principal amount of this Debenture, plus
all accrued and unpaid interest thereon, has been so converted. Conversions hereunder shall have the effect of lowering the outstanding
principal amount of this Debenture in an amount equal to the applicable conversion. The Holder and the Company shall maintain records
showing the principal amount(s) converted and the date of such conversion(s). The Company may deliver an objection to any Notice
of Conversion within one (1) Business Day of delivery of such Notice of Conversion. In the event of any dispute or discrepancy,
the records of the Holder shall be controlling and determinative in the absence of manifest error. The Holder, and any assignee
by acceptance of this Debenture, acknowledge and agree that, by reason of the provisions of this paragraph, following conversion
of a portion of this Debenture, the unpaid and unconverted principal amount of this Debenture may be less than the amount stated
on the face hereof.

 

b)                 
Conversion Price. The conversion price in effect on any Conversion Date shall be equal to $0.03, subject to adjustment
herein (the “Conversion Price”).

 

		c)	Mechanics of Conversion.

 

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

 

ii.                       
Delivery of Certificate Upon Conversion. Not later than three (3) Trading Days after each Conversion Date (the “Share
Delivery Date”), the Company shall deliver, or cause to be delivered, to the Holder (A) a certificate or certificates
representing the Conversion Shares which, on or after the six month anniversary of the Original Issue Date, shall be free of restrictive
legends and trading restrictions (other than those which may then be required by the Purchase Agreement) representing the number
of Conversion Shares being acquired upon the conversion of this Debenture and (B) a legal opinion of Company counsel as may be
requested by the Holder to enable Holder to deposit the Conversion Share certificates in accounts with its prime broker (or other
brokerage account), together with the instruction letter to the Transfer Agent and the resolution of the Board of Directors authorizing
the Transaction Documents and any additional

 

 

    	 	5	 

    	 

    

supporting documentation requested
by the Holder (including, without limitation, any instruction letter to the Company’s transfer agent). On or after the six
month anniversary of the Original Issue Date, if the Company is a participant in the Deposit or Withdrawal at Custodian system
(DWAC) of the Depository Trust Company, the Company shall deliver any certificate or certificates required to be delivered by the
Company under this Section 4(c) electronically through the Depository Trust Company or another established clearing corporation
performing similar functions.

 

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

 

iv.                       
Obligation Absolute; Partial Liquidated Damages. The Company’s obligations to issue and deliver the Conversion Shares
upon conversion of this Debenture in accordance with the terms hereof are absolute and unconditional, irrespective of any action
or inaction by the Holder to enforce the same, any waiver or consent with respect to any provision hereof, the recovery of any
judgment against any Person or any action to enforce the same, or any setoff, counterclaim, recoupment, limitation or termination,
or any breach or alleged breach by the Holder or any other Person of any obligation to the Company or any violation or alleged
violation of law by the Holder or any other Person, and irrespective of any other circumstance which might otherwise limit such
obligation of the Company to the Holder in connection with the issuance of such Conversion Shares; provided, however,
that such delivery shall not operate as a waiver by the Company of any such action the Company may have against the Holder. In
the event the Holder of this Debenture shall elect to convert any or all of the outstanding principal amount hereof, the Company
may not refuse conversion based on any claim that the Holder or anyone associated or affiliated with the Holder has been engaged
in any violation of law, agreement or for any other reason, unless an injunction from a court, on notice to Holder, restraining
and or enjoining conversion of all or part of this Debenture shall have been sought and obtained, and the Company posts a surety
bond for the benefit of the Holder in the amount of 150% of the outstanding principal amount of this Debenture, which is subject
to the injunction, which bond shall remain in effect until the completion of arbitration/litigation of the underlying dispute and
the proceeds of which shall be payable to the Holder to the extent it obtains judgment. In the

 

 

    	 	6	 

    	 

    

absence of such injunction, the Company
shall issue Conversion Shares or, if applicable, cash, upon a properly noticed conversion. If the Company fails for any reason
to deliver to the Holder such certificate or certificates and the related legal opinion of Company counsel, the instruction letter
to the Transfer Agent and the resolution of the Board of Directors authorizing the Transaction Documents and other supporting documentation
pursuant to Section 4(c)(ii) by the Share Delivery Date, the Company shall pay to the Holder, in cash, as liquidated damages and
not as a penalty, for each $1,000 of principal amount being converted, $10 per Trading Day (increasing to $20 per Trading Day on
the fifth (5th) Trading Day after such liquidated damages begin to accrue) for each Trading Day after the second Trading
Day following such Share Delivery Date until such certificates and the related legal opinion of Company counsel, the instruction
letter to the Transfer Agent and the resolution of the Board of Directors authorizing the Transaction Documents and other supporting
documentation are delivered or Holder rescinds such conversion. Nothing herein shall limit a Holder’s right to pursue actual
damages or declare an Event of Default pursuant to Section 8 hereof for the Company’s failure to deliver Conversion Shares
within the period specified herein and the Holder shall have the right to pursue all remedies available to it hereunder, at law
or in equity including, without limitation, a decree of specific performance and/or injunctive relief. The exercise of any such
rights shall not prohibit the Holder from seeking to enforce damages pursuant to any other Section hereof or under applicable law.

 

v.                       
Compensation for Buy-In on Failure to Timely Deliver Certificates Upon Conversion. In addition to any other rights available
to the Holder, if the Company fails for any reason to deliver to the Holder such certificate or certificates by the Share Delivery
Date pursuant to Section 4(c)(ii), and if after such Share Delivery Date the Holder is required by its brokerage firm to purchase
(in an open market transaction or otherwise), or the Holder’s brokerage firm otherwise purchases, shares of Common Stock
to deliver in satisfaction of a sale by the Holder of the Conversion Shares which the Holder was entitled to receive upon the conversion
relating to such Share Delivery Date (a “Buy-In”), then the Company shall (A) pay in cash to the Holder (in
addition to any other remedies available to or elected by the Holder) the amount, if any, by which (x) the Holder’s total
purchase price (including any brokerage commissions) for the Common Stock so purchased exceeds (y) the product of (1) the aggregate
number of shares of Common Stock that the Holder was entitled to receive from the conversion at issue multiplied by (2) the actual
sale price at which the sell order giving rise to such purchase obligation was executed (including any brokerage commissions) and
(B) at the option of the Holder, either reissue (if surrendered) this Debenture in a principal amount equal to the principal amount
of the attempted conversion (in which case such conversion shall be deemed rescinded) or deliver to the Holder the number of shares
of Common Stock that would have been issued if the Company had timely complied with its delivery requirements under Section 4(c)(ii).
For example, if the Holder purchases Common Stock

 

 

    	 	7	 

    	 

    

having a total purchase price of $11,000
to cover a Buy-In with respect to an attempted conversion of this Debenture with respect to which the actual sale price of the
Conversion Shares (including any brokerage commissions) giving rise to such purchase obligation was a total of $10,000 under clause
(A) of the immediately preceding sentence, the Company shall be required to pay the Holder $1,000. The Holder shall provide the
Company written notice indicating the amounts payable to the Holder in respect of the Buy-In and, upon request of the Company,
evidence of the amount of such loss. Nothing herein shall limit a Holder’s right to pursue any other remedies available to
it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief with
respect to the Company’s failure to timely deliver certificates representing shares of Common Stock upon conversion of this
Debenture as required pursuant to the terms hereof.

 

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

 

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

 

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

 

 

    	 	8	 

    	 

    

established to the satisfaction of
the Company that such tax has been paid. The Company shall pay all Transfer Agent fees required for same-day processing of any
Notice of Conversion.

 

Section 5.Certain Adjustments.

 

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

 

b)                 
Pro Rata Distributions. During such time as this Debenture is outstanding, if the Company shall declare or make any dividend
or other distribution of its assets (or rights to acquire its assets) to 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) (a
“Distribution”), at any time after the issuance of this Debenture, then, in each such case, the Holder shall
be entitled to participate in such Distribution to the same extent that the Holder would have participated therein if the Holder
had held the number of shares of Common Stock acquirable upon complete exercise of this Debenture (without regard to any limitations
on conversion hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the date of which a
record is taken for such Distribution, 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 participation in such Distribution (provided, however, to the extent that the
Holder's right to participate in any such Distribution would result in the Holder exceeding the Beneficial Ownership Limitation,
then the Holder shall not be entitled to participate in such Distribution to such extent (or in the beneficial ownership of any
shares of Common Stock as a result of such Distribution to such extent) and the portion of such Distribution shall be held in abeyance
for the benefit of the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial
Ownership Limitation).

 

 

    	 	9	 

    	 

    

 

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

 

d)                 
Notice to the Holder.

 

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

 

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

 

 

    	 	10	 

    	 

    

regarding the Company or any of the
Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to a Current Report on Form 8-K. The
Holder shall remain entitled to convert this Debenture during the 20-day period commencing on the date of such notice through the
effective date of the event triggering such notice except as may otherwise be expressly set forth herein.

 

Section 6.Optional
Redemption at Election of Company. Subject to the provisions of this Section 6, the Company may deliver a notice to the Holder
(an “Optional Redemption Notice” and the date such notice is deemed delivered hereunder, the “Optional
Redemption Notice Date”) of its irrevocable election to redeem some or all of the then outstanding principal amount of
this Debenture for cash in an amount equal to the Optional Redemption Amount on the 10th Business Day following the
Optional Redemption Notice Date (such date, the “Optional Redemption Date” and such redemption, the “Optional
Redemption”). The Optional Redemption Amount is payable in full on the Optional Redemption Date. The Company may not
deliver an Optional Redemption Notice if there is an existing Event of Default or an existing event which, with the passage of
time or giving of notice, would constitute an Event of Default. If any portion of the payment pursuant to an Optional Redemption
shall not be paid by the Company on the applicable due date, interest shall accrue thereon at an interest rate equal to the lesser
of 18% per annum or the maximum rate permitted by applicable law until such amount is paid in full. Notwithstanding anything herein
contained to the contrary, if any portion of the Optional Redemption Amount remains unpaid after such date, the Holder may elect,
by written notice to the Company given at any time thereafter, to invalidate such Optional Redemption, ab initio, and,
with respect to the Company’s failure to honor the Optional Redemption, the Company shall have no further right to exercise
such Optional Redemption. The Company covenants and agrees that it will honor all Notices of Conversion tendered from the time
of delivery of the Optional Redemption Notice through the date all amounts owing thereon are due and paid in full.

 

Section 7.Negative
Covenants. As long as any portion of this Debenture remains outstanding, unless the holders of 100% in principal amount of
the then outstanding Debentures shall have otherwise given prior written consent, the Company shall not, and shall not permit any
of the Subsidiaries to, directly or indirectly:

 

a)                 
other than Permitted Indebtedness, enter into, create, incur, assume, guarantee or suffer to exist any indebtedness for borrowed
money of any kind, including, but not limited to, a guarantee, on or with respect to any of its property or assets now owned or
hereafter acquired or any interest therein or any income or profits therefrom;

 

b)                 
other than Permitted Liens, enter into, create, incur, assume or suffer to exist any Liens of any kind, on or with respect to any
of its property or assets now owned or hereafter acquired or any interest therein or any income or profits therefrom;

 

 

    	 	11	 

    	 

    

c)                 
amend its charter documents, including, without limitation, its certificate of incorporation and bylaws, in any manner that materially
and adversely affects any rights of the Holder;

 

d)                 
repay, repurchase or offer to repay, repurchase or otherwise acquire more than a de minimis number of shares of its Common
Stock or Common Stock Equivalents other than as to repurchases of Common Stock or Common Stock Equivalents of departing officers
and directors of the Company, provided that such repurchases shall not exceed an aggregate of $10,000 for all officers and directors
during the term of this Debenture;

 

e)                 
repay, repurchase or offer to repay, repurchase or otherwise acquire any Indebtedness, other than the Debentures
if on a pro-rata basis, other than regularly scheduled principal and interest payments as such terms are in effect as of
the Original Issue Date, provided that such payments shall not be permitted if, at such time, or after giving effect to such payment,
any Event of Default exist or occur;

 

f)                  
pay cash dividends or distributions on any equity securities of the Company;

 

g)                 
enter into any transaction with any Affiliate of the Company which would be required to be disclosed in any public filing with
the Commission, unless such transaction is made on an arm’s-length basis and expressly approved by a majority of the disinterested
directors of the Company (even if less than a quorum otherwise required for board approval); or

 

h)                 
enter into any agreement with respect to any of the foregoing.

 

Section
8.Events of Default.

 

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

 

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

 

ii.                       
the Company shall fail to observe or perform any other covenant or agreement contained in the Debentures which failure is
not cured, if possible to

 

 

    	 	12	 

    	 

    

cure, within the earlier to occur of
(A) 5 Business Days after notice of such failure sent by the Holder or by any other Holder to the Company or (B) 10 Business Days
after the Company has become or should have become aware of such failure;

 

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

 

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

 

v.                       
the Company or any Subsidiary shall be subject to a Bankruptcy Event;

 

vi.                       
the Company or any Subsidiary shall default on any of its obligations under any mortgage, credit agreement or other facility,
indenture agreement, factoring agreement or other instrument under which there may be issued, or by which there may be secured
or evidenced, any indebtedness for borrowed money or money due under any long term leasing or factoring arrangement that (a) involves
an obligation greater than $150,000, whether such indebtedness now exists or shall hereafter be created, and (b) results in such
indebtedness becoming or being declared due and payable prior to the date on which it would otherwise become due and payable;

 

vii.                       
the Company shall be a party to any Change of Control Transaction or shall agree to sell or dispose of all or in excess
of 33% of its assets in one transaction or a series of related transactions (whether or not such sale would constitute a Change
of Control Transaction); or

 

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

 

b)                 
Remedies Upon Event of Default. If any Event of Default occurs, the outstanding principal amount of this Debenture, plus
accrued but unpaid interest, liquidated damages and other amounts owing in respect thereof through the date of acceleration, shall
become, at the Holder’s election, immediately due and payable in cash

 

 

    	 	13	 

    	 

    

at the Mandatory Default Amount.
Commencing 5 days after the occurrence of any Event of Default that results in the eventual acceleration of this Debenture, the
interest rate on this Debenture shall accrue at an interest rate equal to the lesser of 18% per annum or the maximum rate permitted
under applicable law. Upon the payment in full of the Mandatory Default Amount, the Holder shall promptly surrender this Debenture
to or as directed by the Company. In connection with such acceleration described herein, the Holder need not provide, and the Company
hereby waives, any presentment, demand, protest or other notice of any kind, and the Holder may immediately and without expiration
of any grace period enforce any and all of its rights and remedies hereunder and all other remedies available to it under applicable
law. Such acceleration may be rescinded and annulled by Holder at any time prior to payment hereunder and the Holder shall have
all rights as a holder of the Debenture until such time, if any, as the Holder receives full payment pursuant to this Section 8(b).
No such rescission or annulment shall affect any subsequent Event of Default or impair any right consequent thereon.

 

Section
9.Miscellaneous.

 

a)                 
Notices. Any and all notices or other communications or deliveries to be provided by the Holder hereunder, shall be in writing
and delivered personally, by facsimile, or sent by a nationally recognized overnight courier service, addressed to the Company,
at the address set forth above, or such other facsimile number or address as the Company may specify for such purposes by notice
to the Holder delivered in accordance with this Section 9(a). Any and all notices or other communications or deliveries to be provided
by the Company hereunder shall be in writing and delivered personally, by facsimile, or sent by a nationally recognized overnight
courier service addressed to each Holder at the facsimile number, e-mail address or address of the Holder appearing on the books
of the Company, or if no such facsimile number or e-mail address or address appears on the books of the Company, at the principal
place of business of such Holder, as set forth in the Purchase Agreement. Any notice or other communication or deliveries hereunder
shall be deemed given and effective on the earliest of (i) the date of transmission, if such notice or communication is delivered
via facsimile or e-mail at the facsimile number or e-mail address set forth on the signature pages attached hereto prior to 5:30
p.m. (New York City time) on any date, (ii) the next Business Day after the date of transmission, if such notice or communication
is delivered via facsimile or e-mail at the facsimile number or e-mail address set forth on the signature pages attached hereto
on a day that is not a Business Day or later than 5:30 p.m. (New York City time) on any Business Day, (iii) the second Business
Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service or (iv) upon actual receipt
by the party to whom such notice is required to be given.

 

b)                 
Absolute Obligation. Except as expressly provided herein, no provision of this Debenture shall alter or impair the obligation
of the Company, which is absolute and unconditional, to pay the principal of, liquidated damages and accrued interest, as applicable,
on this Debenture at the time, place, and rate, and in the coin or currency, herein prescribed. This Debenture is a direct debt
obligation of the Company. This

 

 

    	 	14	 

    	 

    

Debenture ranks pari passu
with all other Debentures now or hereafter issued under the terms set forth herein.

 

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

 

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

 

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

 

 

    	 	15	 

    	 

    

of this Debenture on any other occasion.
Any waiver by the Company or the Holder must be in writing.

 

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

 

g)                 
Remedies, Characterizations, Other Obligations, Breaches and Injunctive Relief.  The remedies provided in this Debenture
shall be cumulative and in addition to all other remedies available under this Debenture and any of the other Transaction Documents
at law or in equity (including a decree of specific performance and/or other injunctive relief), and nothing herein shall limit
the Holder’s right to pursue actual and consequential damages for any failure by the Company to comply with the terms of
this Debenture.  The Company covenants to the Holder that there shall be no characterization concerning this instrument other
than as expressly provided herein. Amounts set forth or provided for herein with respect to payments and the like (and the computation
thereof) shall be the amounts to be received by the Holder and shall not, except as expressly provided herein, be subject to any
other obligation of the Company (or the performance thereof). The Company acknowledges that a breach by it of its obligations hereunder
will cause irreparable harm to the Holder and that the remedy at law for any such breach may be inadequate. The Company therefore
agrees that, in the event of any such breach or threatened breach, the Holder shall be entitled, in addition to all other available
remedies, to an injunction restraining any such breach or any such threatened breach, without the necessity of showing economic
loss and without any bond or other security being required. The Company shall provide all information and documentation to the
Holder that is requested by the Holder to enable the Holder to confirm the Company’s compliance with the terms and conditions
of this Debenture.

 

h)                 
Due Authorization. This Debenture has been duly authorized, executed and delivered by the Company and is the legal obligation
of the Company, enforceable against the Company in accordance with its terms. No consent of any other party and no consent, license,
approval or authorization of, or registration or declaration with, any

 

 

    	 	16	 

    	 

    

governmental authority, bureau or
agency is required in connection with the execution, delivery or performance by the Company, or the validity or enforceability
of this Debenture other than such as have been met or obtained. The execution, delivery and performance of this Debenture and all
other agreements and instruments executed and delivered or to be executed and delivered pursuant hereto or thereto will not violate
any provision of any existing law or regulation or any order or decree of any court, regulatory body or administrative agency or
the certificate of incorporation or by-laws of the Company or any mortgage, indenture, contract or other agreement to which the
Company is a party or by which the Company or any property or assets of the Company may be bound.

 

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

 

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

 

 

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

 

(Signature Page
Follows)

 

    	 	17	 

    	 

    

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

 

 

	 	
        LEGEND OIL and GAS, LTD.

         

         

	 	
        By: 

        

        _________________________________

        Name: Warren S. Binderman

        Title: Chief Executive Officer

         

        Facsimile No. for delivery of Notices: (678) 608-2565

         

        E-mail Address for delivery of Notice: warren@midconoil.com

	 	 
	 	 

 

    	 	18	 

    	 

    

 

ANNEX A

 

NOTICE OF CONVERSION

 

The undersigned
hereby elects to convert principal under the Original Issue Discount Senior Convertible Debenture due March 1, 2018 of Legend Oil
and Gas, Ltd., a Colorado corporation (the “Company”), into shares of common stock (the “Common Stock”),
of the Company according to the conditions hereof, as of the date written below. If shares of Common Stock are to be issued in
the name of a person other than the undersigned, the undersigned will pay all transfer taxes payable with respect thereto and is
delivering herewith such certificates and opinions as reasonably requested by the Company in accordance therewith. No fee will
be charged to the holder for any conversion, except for such transfer taxes, if any.

 

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

 

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

 

Conversion calculations:

Date
to Effect Conversion:

 

Principal
Amount of Debenture to be Converted:

 

Number of shares of Common Stock to be issued:

 

Signature:

 

Name:

 

Address for Delivery
of Common Stock Certificates:

 

Or

 

DWAC Instructions:

 

Broker No: _____________

 

Account
No: ___________

 

 

    	 	19	 

    	 

    

 

Schedule 1

 

CONVERSION SCHEDULE

 

The Original Issue Discount Senior
Convertible Debentures due on March 1, 2018 in the aggregate principal amount of $660,000 are issued by Legend Oil and Gas,
Ltd., a Colorado corporation. This Conversion Schedule reflects conversions made under Section 4 of the above referenced Debenture.

 

Dated:

 

	
         

        Date of Conversion

        (or for first entry, Original Issue
        Date)
	
         

        Amount of Conversion
	
         

        Aggregate Principal Amount Remaining
        Subsequent to Conversion

        (or original Principal Amount)
	
         

        Company Attest

	
         

         

         
	
         

         
	
         

         
	
         

         

	
         

         

         
	
         

         
	
         

         
	
         

         

	
         

         

         
	
         

         
	
         

         
	
         

         

	
         

         

         
	
         

         
	
         

         
	
         

         

	
         

         

         
	
         

         
	
         

         
	
         

         

	
         

         

         
	
         

         
	
         

         
	
         

         

	
         

         

         
	
         

         
	
         

         
	
         

         

	
         

         

         
	
         

         
	
         

         
	
         

         

	
         

         

         
	
         

         
	
         

         
	
         

         

 

    	 	20

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