Document:

EXHIBIT 10.2

 

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. 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: January 8, 2016

 

Original Conversion Price (subject to adjustment
herein): $2.00

 

$500,000

 

ORIGINAL
ISSUE DISCOUNT 

 

SENIOR
SECURED CONVERTIBLE DEBENTURE

 

DUE
fEBRUARY 1, 2017

 

THIS ORIGINAL ISSUE
DISCOUNT SENIOR SECURED CONVERTIBLE DEBENTURE is one of a series of duly authorized and validly issued Original Issue Discount
Senior Secured Convertible Debentures of PFO GLOBAL, INC., a Nevada corporation (the “Company”), having its
principal place of business at 3501-B N. Ponce de Leon Blvd., #393, St. Augustine, Florida 32084, designated as its Original Issue
Discount Senior Secured Convertible Debenture due February 1, 2017 (this debenture, the “Debenture” and, collectively
with the other debentures of such series, the “Debentures”).

 

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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 $500,000 on February 1, 2017 (the “Maturity Date”)
or such earlier date as this Debenture is required or permitted to be repaid as provided hereunder. 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, (a) capitalized terms not otherwise defined
herein shall have the meanings set forth in the Purchase Agreement and (b) the following terms shall have the following meanings:

 

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

 

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

 

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

 

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

 

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“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.

 

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

 

“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 (other than by means of conversion or exercise of the Debentures and the
Securities issued together with the Debentures), (b) the Company merges into or consolidates with any other Person, or any Person
merges into or consolidates with the Company and, after giving effect to such transaction, the stockholders of the Company immediately
prior to such transaction own less than 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.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Equity
Conditions” means, during the period in question, (a)
the Company shall have duly honored all conversions and redemptions scheduled to occur or occurring by virtue of one or more Notices
of Conversion of the Holder, if any, (b) the Company shall have paid all liquidated damages and other amounts owing to the Holder
in respect of this Debenture, (c)(i) there
is an effective registration statement pursuant to which the Holder is permitted to utilize the prospectus thereunder to resell
all of the shares of Common Stock issuable pursuant to the Transaction Documents (and the Company believes, in good faith, that
such effectiveness will continue uninterrupted for the foreseeable future) or (ii) all of the Conversion Shares issuable pursuant
to the Transaction Documents may be resold pursuant to Rule 144 without volume or manner-of-sale restrictions or current public
information requirements as determined by the counsel to the Company as set forth in a written opinion letter to such effect,
addressed and acceptable to the Transfer Agent and the Holder, (d) the Common Stock is trading on a Trading Market and all of
the shares issuable pursuant to the Transaction Documents are listed or quoted for trading on such Trading Market (and the Company
believes, in good faith, that trading of the Common Stock on a Trading Market will continue uninterrupted for the foreseeable
future), (e) there is a sufficient number of authorized but unissued and otherwise unreserved shares of Common Stock for the issuance
of all of the shares then issuable pursuant to the Transaction Documents, (f) there is no existing Event of Default and no existing
event which, with the passage of time or the giving of notice, would constitute an Event of Default, (g) the issuance of the shares
in question (or, in the case of an Optional Redemption, the shares issuable upon conversion in full of the Optional Redemption
Amount) to the Holder would not violate the limitations
set forth in Section 4(d) herein, (h) there has been no
public announcement of a pending or proposed Fundamental Transaction or Change of Control Transaction that has not been consummated,
(i) the applicable Holder is not in possession of any information provided by the Company that constitutes, or may constitute,
material non-public information and (j) the Conversion Price as of the applicable date in question is equal to $1.90 or more (subject
to adjustment for forward and revers stock splits and the like that occur after the Original Issue Date).

 

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

 

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

  

“Late
Fees” shall have the meaning set forth in Section 2(d).

 

“Mandatory
Default Amount” means the sum of (a) the greater of (i) the outstanding principal amount of this Debenture, divided by
the Conversion Price on the date the Mandatory Default Amount is either (A) demanded (if demand or notice is required to create
an Event of Default) or otherwise due or (B) paid in full, whichever has a lower Conversion Price, multiplied by the VWAP on the
date the Mandatory Default Amount is either (x) demanded or otherwise due or (y) paid in full, whichever has a higher VWAP, or
(ii) 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 9(d).

 

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

 

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

 

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

 

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

 

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

 

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

 

“Optional
Redemption Period” shall
have the meaning set forth in Section 6(a).

 

“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 and set forth on Schedule 3.1(bb) to the Purchase Agreement and (c) lease obligations and purchase money indebtedness
of up to $50,000, in the aggregate, incurred in connection with the acquisition of capital assets and lease obligations with respect
to newly acquired or leased assets.

 

“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 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 clauses (a) and (b) thereunder and (d) 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.

 

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“Purchase
Agreement” means the Securities Purchase Agreement, dated as of January __, 2016 among the Company and the original Holders,
as amended, modified or supplemented from time to time in accordance with its terms.

 

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

 

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

 

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

 

“Trading
Day” means a day on which the principal Trading Market is open for trading.

 

“Trading
Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on
the date in question: the NYSE MKT, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New
York Stock Exchange, OTCQB or OTCQX (or any successors to any of the foregoing).

 

“VWAP”
means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed
or quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding
date) on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a Trading
Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b)  if OTCQB or OTCQX is not a Trading Market,
the volume weighted average price of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable,
(c) if the Common Stock is not then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Stock are then
reported in the “Pink Sheets” published by OTC Markets, Inc. (or a similar organization or agency succeeding to its
functions of reporting prices), the most recent bid price per share of the Common Stock so reported, or (d) in all other cases,
the fair market value of a share of Common Stock as determined by an independent appraiser selected in good faith by the Purchasers
of a majority in interest of the Securities then outstanding and reasonably acceptable to the Company, the fees and expenses of
which shall be paid by the Company.

 

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Section 2.          No
Interest or Prepayment.

 

a)         No
Payment of Interest.   The Company shall not be required to pay regularly scheduled interest to the Holder on the aggregate unconverted
and then outstanding principal amount of this Debenture.

 

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.

  

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

 

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

 

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

 

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Section 4.          Conversion.

 

a)         Voluntary
Conversion.   At any time after the Original Issue Date until this Debenture is no longer outstanding, this Debenture shall be
convertible, in whole or in part, into shares of Common Stock at the option of the Holder, at any time and from time to time (subject
to the conversion limitations set forth in Section 4(d) hereof). The Holder shall effect conversions by delivering to the
Company a Notice of Conversion, the form of which is attached hereto as Annex A (each, a “Notice of Conversion”),
specifying therein the principal amount 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 has been so converted in which case the Holder shall surrender this
Debenture as promptly as is reasonably practicable after such conversion without delaying the Company’s obligation to deliver
the shares on the Share Delivery Date. 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 $2.00, subject to adjustment herein (the
“Conversion Price”). In addition, on each Trigger Date (as defined below), the Conversion Price shall be reduced,
and only reduced, to the lesser of (x) the then Conversion Price, as adjusted and taking into consideration any prior resets, or
(y) 90% of the effective price per share of securities issued in a Qualified Offering (as defined below), subject to adjustment
hereunder. The Company shall notify each Holder of the applicable adjustment to the Conversion Price as of such date (a “Trigger
Date Adjustment Notice”).  For purposes of clarification, whether or not the Company provides a Trigger Date Adjustment
Notice pursuant to this Section 4(b), each Holder shall receive a number of Conversion Shares based upon the Conversion Price as
adjusted pursuant to this Section, regardless of whether a Holder accurately refers to such price in any Notice of Conversion.
As used herein, “Qualified Offering” means (a) any registered offering of Common Stock and/or Common Stock Equivalents
that occurs after the Original Issue Date or (b) any financing (registered or private placement) (or series of financings) of Common
Stock and/or Common Stock Equivalents with gross proceeds of, in the aggregate following the Original Issue Date, $4,000,000 or
more that occurs after the Original Issue Date. As used herein, the term “Trigger Date” means the date the Company
consummates a Qualified Offering.

 

.

 

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c)         Mechanics of Conversion

 

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

 

ii.         Delivery
of Certificate Upon Conversion.   Not later than three (3) Trading Days after each Conversion Date (the “Share Delivery
Date”), the Company shall deliver, or cause to be delivered, to the Holder (A) 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 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, 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.

 

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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 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 such Share Delivery Date
until such certificates and the related legal opinion of Company counsel, the instruction letter to the Transfer Agent, 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.

 

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v.           Compensation
for Buy-In on Failure to Timely Deliver Certificates Upon Conversion.   In addition to any other rights available to the Holder,
if the Company fails for any reason to deliver to the Holder such certificate or certificates by the Share Delivery Date pursuant
to Section 4(c)(ii), and if after such Share Delivery Date the Holder is required by its brokerage firm to purchase (in an open
market transaction or otherwise), or the Holder’s brokerage firm otherwise purchases, shares of Common Stock to deliver in
satisfaction of a sale by the Holder of the Conversion Shares which the Holder was entitled to receive upon the conversion relating
to such Share Delivery Date (a “Buy-In”), then the Company shall (A) pay in cash to the Holder (in addition
to any other remedies available to or elected by the Holder) the amount, if any, by which (x) the Holder’s total purchase
price (including any brokerage commissions) for the Common Stock so purchased exceeds (y) the product of (1) the aggregate number
of shares of Common Stock that the Holder was entitled to receive from the conversion at issue multiplied by (2) the actual sale
price at which the sell order giving rise to such purchase obligation was executed (including any brokerage commissions) and (B)
at the option of the Holder, either reissue (if surrendered) this Debenture in a principal amount equal to the principal amount
of the attempted conversion (in which case such conversion shall be deemed rescinded) or deliver to the Holder the number of shares
of Common Stock that would have been issued if the Company had timely complied with its delivery requirements under Section 4(c)(ii).
For example, if the Holder purchases Common Stock having a total purchase price of $11,000 to cover a Buy-In with respect to an
attempted conversion of this Debenture with respect to which the actual sale price of the Conversion Shares (including any brokerage
commissions) giving rise to such purchase obligation was a total of $10,000 under clause (A) of the immediately preceding sentence,
the Company shall be required to pay the Holder $1,000. The Holder shall provide the Company written notice indicating the amounts
payable to the Holder in respect of the Buy-In and, upon request of the Company, evidence of the amount of such loss. Nothing herein
shall limit a Holder’s right to pursue any other remedies available to it hereunder, at law or in equity including, without
limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver
certificates representing shares of Common Stock upon conversion of this Debenture as required pursuant to the terms hereof.

 

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, 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. 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.

 

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

 

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

 

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

 

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Section 5.          Certain
Adjustments. 

 

a)          Stock
Dividends and Stock Splits.   If the Company, at any time while this Debenture is outstanding: (i) pays a stock dividend or otherwise
makes a distribution or distributions payable in shares of Common Stock on shares of Common Stock or any Common Stock Equivalents
(which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Company upon conversion of 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)          [RESERVED]

 

c)          Subsequent
Rights Offerings.   In addition to any adjustments pursuant to Section 5(a) above, if at any time the Company grants, issues
or sells any Common Stock Equivalents or rights to purchase stock, warrants, securities or other property pro rata to the record
holders of any class of shares of Common Stock (the “Purchase Rights”), then the Holder will be entitled to
acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired
if the Holder had held the number of shares of Common Stock acquirable upon complete conversion of this Debenture (without regard
to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the
date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date
as of which the record holders of shares of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights
(provided, however, to the extent that the Holder’s right to participate in any such Purchase Right would result in the Holder
exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Purchase Right to such
extent (or beneficial ownership of such shares of Common Stock as a result of such Purchase Right to such extent) and such Purchase
Right to such extent shall be held in abeyance for the Holder until such time, if ever, as its right thereto would not result in
the Holder exceeding the Beneficial Ownership Limitation).

 

    	15 

     

    

  

d)          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 conversion 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).

 

    	16 

     

    

  

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

 

    	17 

     

    

  

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

 

g)          Notice
to the Holder.

 

i.            Adjustment
to Conversion Price.   Whenever the Conversion Price is adjusted pursuant to any provision of this Section 5, the Company shall
promptly deliver to 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 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.

 

    	18 

     

    

  

Section 6.          Optional
Redemption.

 

a)          Optional
Redemption at Election of Company.   Subject to the provisions of this Section
6(a), at any time after the six month anniversary of the Original Issue Date, 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 Trading Day following the Optional Redemption
Notice Date (such date, the “Optional Redemption Date”, such 10 Trading Day period, the “Optional Redemption
Period” and such redemption, the “Optional Redemption”). The Optional Redemption Amount is payable in full on
the Optional Redemption Date. The Company may only effect an Optional Redemption if each of the Equity Conditions shall have been
met (unless waived in writing by the Holder) on each Trading Day during the period commencing on the Optional Redemption Notice
Date through to the Optional Redemption Date and through and including the date payment of the Optional Redemption
Amount is actually made in full. If any of the Equity Conditions shall cease to
be satisfied at any time during the Optional Redemption Period, then the Holder may elect to nullify the Optional Redemption Notice
by notice to the Company within 3 Trading Days after the first day on which any such Equity Condition has not been met (provided
that if, by a provision of the Transaction Documents, the Company is obligated to notify the Holder of the non-existence of an
Equity Condition, such notice period shall be extended to the third Trading Day after proper notice from the Company) in which
case the Optional Redemption Notice shall be null and void, ab initio. 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. The Company’s determination to pay an Optional Redemption in cash shall be
applied ratably to all of the holders of the then outstanding Debentures based on their (or their predecessor’s) initial
purchases of Debentures pursuant to the Purchase Agreement.

 

    	19 

     

    

  

b)          Redemption
Procedure.   The payment of cash pursuant to an Optional Redemption shall be payable on the Optional Redemption Date. If any
portion of the payment pursuant to an Optional Redemption shall not be paid by the Company by 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
Holder may elect to convert the outstanding principal amount of the Debenture pursuant to Section 4 prior to actual payment in
cash for any redemption under this Section 6 by the delivery of a Notice of Conversion to the Company.

 

Section 7.          Negative
Covenants.   As long as any portion of this Debenture remains outstanding, unless the holders of at least 67% 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;

 

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;

 

    	20 

     

    

  

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 (i) the Conversion Shares or Warrant Shares as permitted or required under the
Transaction Documents and (ii) 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 (i) the Debentures (including the debentures
in the form of the Debentures issued to the Holder pursuant to separate securities purchase agreements in 2015), if on a pro-rata
basis, or (ii) the Secured Bridge Promissory Notes issued by Pro Fit, as amended, provided that such Secured Bridge Promissory
Notes may only be repaid from proceeds of any cash settlement in respect of the lawsuit titled “VSP Labs, Inc. v. Pro Fit
Optix, Inc., et al.”;

 

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):

 

    	21 

     

    

  

i.            any
default in the payment of (A) the principal amount of any Debenture, including, without limitation, in connection with an Optional
Redemption, 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 a Conversion Date, Optional Redemption Date or the Maturity Date or by acceleration or otherwise) which
default is not cured within 30 Trading Days;

 

ii.         the
Company shall fail to observe or perform any other covenant or agreement contained in the Debentures (other than a breach by the
Company of its obligations to deliver shares of Common Stock to the Holder upon conversion, which breach is addressed in clause
(x) below) which failure is not cured, if possible to cure, within the earlier to occur of (A) 30 Trading Days after notice of
such failure sent by the Holder or by any other Holder to the Company and (B) 30 Trading Days after the Company has become or should
have become aware of such failure;

 

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

 

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

 

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

 

vi.         the
Company or any Subsidiary shall default on any of its obligations under any mortgage, credit agreement or other facility, indenture
agreement, factoring agreement or other instrument under which there may be issued, or by which there may be secured or evidenced,
any indebtedness for borrowed money or money due under any long term leasing or factoring arrangement that (a) involves an obligation
greater than $15,000, 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;

 

    	22 

     

    

  

vii.         the
Common Stock shall not be eligible for listing or quotation for trading on a Trading Market and shall not be eligible to resume
listing or quotation for trading thereon within thirty Trading Days;

 

viii.         the
Company shall be a party to any Change of Control Transaction or Fundamental Transaction or shall agree to sell or dispose of all
or in excess of 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);

 

ix.         the
Company does not meet the current public information requirements under Rule 144 with respect to the Securities;

 

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

 

xi.            the
electronic transfer by the Company of shares of Common Stock through the Depository Trust Company or another established clearing
corporation is no longer available or is subject to a “chill”;

 

xii.         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; or

 

xiii.         a
false or inaccurate certification (including a false or inaccurate deemed certification) by the Company that the Equity Conditions
are satisfied or that there has been no Equity Conditions Failure or as to whether any Event of Default has occurred.

 

    	23 

     

    

  

b)          Remedies
Upon Event of Default.   If any Event of Default occurs, the outstanding principal amount of this Debenture, 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 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, including, without limitation,
any Notice of Conversion, shall be in writing and delivered personally, by facsimile, by email attachment, or sent by a nationally
recognized overnight courier service, addressed to the Company, at the address set forth above, or such other facsimile number,
email address, 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, by email attachment, or sent by a nationally recognized overnight courier service
addressed to each Holder at the facsimile number or email address or address of the Holder appearing on the books of the Company,
or if no such facsimile number or email attachment 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
at the facsimile number or email attachment to the email 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 Trading Day after the date of transmission, if such notice or communication
is delivered via facsimile at the facsimile number or email attachment to the email address set forth on the signature pages attached
hereto on a day that is not a Trading Day or later than 5:30 p.m. (New York City time) on any Trading Day, (iii) the second Trading
Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service or (iv) upon actual receipt
by the party to whom such notice is required to be given.

 

    	24 

     

    

  

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, on this Debenture at the time, place,
and rate, and in the coin or currency, herein prescribed. This Debenture is a direct debt obligation of the Company. This Debenture
ranks pari passu with all other Debentures now or hereafter issued under the terms set forth herein.

 

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

 

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

 

    	25 

     

    

  

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

 

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 this Debenture
as contemplated herein, wherever enacted, now or at any time hereafter in force, or which may affect the covenants or the performance
of this Debenture, and the Company (to the extent it may lawfully do so) hereby expressly waives all benefits or advantage of any
such law, and covenants that it will not, by resort to any such law, hinder, delay or impede the execution of any power herein
granted to the Holder, but will suffer and permit the execution of every such as though no such law has been enacted.

 

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

 

    	26 

     

    

  

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

 

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

 

j)         Secured
Obligation.   The obligations of the Company under this Debenture are secured by all assets of the Company and each Subsidiary
pursuant to the Security Agreement and Subsidiary Guarantees.

 

k)         Disclosure.   Upon receipt or delivery by the Company of any notice in accordance with the terms of this Debenture, unless the Company has in
good faith determined that the matters relating to such notice do not constitute material, nonpublic information relating to the
Company or its Subsidiaries, the Company shall within two (2) Business Days after such receipt or delivery publicly disclose such
material, nonpublic 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 its Subsidiaries, the Company so shall indicate to the Holder
contemporaneously with delivery of such notice, and in the absence of any such indication, the Holder shall be allowed to presume
that all matters relating to such notice do not constitute material, nonpublic information relating to the Company or its Subsidiaries.

 

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

 

(Signature Pages Follow)

 

    	27 

     

    

  

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.

 

	 	PFO Global, Inc.	 
	 	 	 
	 	By:	 	 
	 	 	Name:	 
	 	 	Title:	 
	 	Facsimile No. for delivery of Notices: ____________________

 

    	28 

     

    

  

ANNEX A

 

NOTICE OF CONVERSION

 

The undersigned hereby
elects to convert principal under the Original Issue Discount Senior Secured Convertible Debenture due February 1, 2017 of PFO
Global, Inc., a Nevada 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:________________________________

 

    	29 

     

    

  

Schedule 1

 

CONVERSION SCHEDULE

 

The Original Issue Discount Senior Secured
Convertible Debentures due on February 1, 2017 in the aggregate principal amount of $_________ are issued by PFO Global, Inc.,
a Nevada 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
	
         

         

         
	 	
         

         
	 	
         

         
	 	
         

         

	
         

         

         
	 	
         

         
	 	
         

         
	 	
         

         

	
         

         

         
	 	
         

         
	 	
         

         
	 	
         

         

	
         

         

         
	 	
         

         
	 	
         

         
	 	
         

         

	
         

         

         
	 	
         

         
	 	
         

         
	 	
         

         

	
         

         

         
	 	
         

         
	 	
         

         
	 	
         

         

 

    	30 

     

    

  

	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
	
         

         

         
	 	
         

         
	 	
         

         
	 	
         

         

	
         

         

         
	 	
         

         
	 	
         

         
	 	
         

         

	
         

         

         
	 	
         

         
	 	
         

         
	 	
         

         

 

    	31Exhibit

Exhibit 4.6

ALABAMA POWER COMPANY

TO

REGIONS BANK
TRUSTEE

FIFTY-FIFTH SUPPLEMENTAL INDENTURE

DATED AS OF JANUARY 13, 2016

SERIES 2016A 4.300% SENIOR NOTES

DUE JANUARY 2, 2046

TABLE OF CONTENTS1 

PAGE
	
				
	ARTICLE 1  Series 2016A Senior Notes
	2
	

	 
	 
	 

	 
	SECTION 101. Establishment
	2
	

	 
	SECTION 102. Definitions
	2
	

	 
	SECTION 103. Payment of Principal and Interest
	3
	

	 
	SECTION 104. Denominations
	4
	

	 
	SECTION 105. Global Securities
	4
	

	 
	SECTION 106. Transfer
	5
	

	 
	SECTION 107. Redemption and the Company’s Option
	5
	

	 
	 
	 

	ARTICLE 2  Miscellaneous Provisions
	6
	

	 
	 
	 

	 
	SECTION 201. Recitals by Company
	6
	

	 
	SECTION 202. Ratification and Incorporation of Original Indenture
	6
	

	 
	SECTION 203. Executed in Counterparts
	6
	

	 
	 
	 

	EXHIBIT A  Form of Series 2016A Note
	A-1
	

	 
	 
	 

	EXHIBIT B  Certificate of Authentication
	B-1
	

____________________
1This Table of Contents does not constitute part of the Fifty-Fifth Supplemental Indenture or have any bearing upon the interpretation of any of its terms and provisions.

THIS FIFTY-FIFTH SUPPLEMENTAL INDENTURE is made as of the 13th day of January, 2016, by and between ALABAMA POWER COMPANY, an Alabama corporation, 600 North 18th Street, Birmingham, Alabama 35291 (the “Company”), and REGIONS BANK, an Alabama banking corporation, 1900 Fifth Avenue North, 25th Floor, Birmingham, Alabama 35203 (the “Trustee”).

W I T N E S S E T H:

WHEREAS, the Company has heretofore entered into a Senior Note Indenture, dated as of December 1, 1997 (the “Original Indenture”), with Regions Bank (as successor to The Bank of New York Mellon (as successor to JPMorgan Chase Bank, N.A. (formerly known as The Chase Manhattan Bank))), Trustee, as heretofore supplemented;

WHEREAS, the Original Indenture is incorporated herein by this reference and the Original Indenture, as heretofore supplemented and as further supplemented by this Fifty-Fifth Supplemental Indenture, is herein called the “Indenture”;

WHEREAS, under the Original Indenture, a new series of Senior Notes may at any time be established pursuant to a supplemental indenture executed by the Company and the Trustee;

WHEREAS, the Company proposes to create under the Indenture a new series of Senior Notes;

WHEREAS, additional Senior Notes of other series hereafter established, except as may be limited in the Original Indenture as at the time supplemented and modified, may be issued from time to time pursuant to the Indenture as at the time supplemented and modified; and

WHEREAS, all conditions necessary to authorize the execution and delivery of this Fifty-Fifth Supplemental Indenture and to make it a valid and binding obligation of the Company have been done or performed.

NOW, THEREFORE, in consideration of the agreements and obligations set forth herein and for other good and valuable consideration, the sufficiency of which is hereby acknowledged, the parties hereto hereby agree as follows:

1

ARTICLE 1

Series 2016A Senior Notes

SECTION 101.  Establishment.  There is hereby established a new series of Senior Notes to be issued under the Indenture, to be designated as the Company’s Series 2016A 4.300% Senior Notes due January 2, 2046 (the “Series 2016A Notes”).

There are to be authenticated and delivered $400,000,000 aggregate principal amount of Series 2016A Notes, and such principal amount of the Series 2016A Notes may be increased from time to time pursuant to Section 301 of the Original Indenture.  All Series 2016A Notes need not be issued at the same time and such series may be reopened at any time, without the consent of any Holder, for issuances of additional Series 2016A Notes.  Any such additional Series 2016A Notes will have the same interest rate, maturity and other terms as those initially issued (except for the public offering price and Original Issue Date and the initial interest accrual date and initial Interest Payment Date, if applicable).  No Series 2016A Notes shall be authenticated and delivered in excess of the principal amount as so increased except as provided by Sections 203, 303, 304, 907 or 1107 of the Original Indenture.  The Series 2016A Notes shall be issued in definitive fully registered form.

The Series 2016A Notes shall be issued in the form of one or more Global Securities in substantially the form set out in Exhibit A hereto.  The Depositary with respect to the Series 2016A Notes shall be The Depository Trust Company.

The form of the Trustee’s Certificate of Authentication for the Series 2016A Notes shall be in substantially the form set forth in Exhibit B hereto.

Each Series 2016A Note shall be dated the date of authentication thereof and shall bear interest from the date of original issuance thereof or from the most recent Interest Payment Date to which interest has been paid or duly provided for.

SECTION 102.  Definitions.  The following defined terms used herein shall, unless the context otherwise requires, have the meanings specified below.  Capitalized terms used herein for which no definition is provided herein shall have the meanings set forth in the Original Indenture.
    
“Comparable Treasury Issue” means the United States Treasury security selected by an Independent Investment Banker as having a maturity comparable to the remaining term of the Series 2016A Notes to be redeemed that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the remaining term of the Series 2016A Notes.

“Comparable Treasury Price” means, with respect to any Redemption Date (i) the average of the Reference Treasury Dealer Quotations for such Redemption Date, after excluding the highest and lowest such Reference Treasury Dealer Quotations, or (ii) if the Company 

2

obtains fewer than four such Reference Treasury Dealer Quotations, the average of all such quotations.

“Independent Investment Banker” means an independent investment banking institution of national standing appointed by the Company.

“Interest Payment Dates” means January 2 and July 2 of each year, commencing July 2, 2016.

“Original Issue Date” means January 13, 2016.
    
“Reference Treasury Dealer” means a primary U.S. Government securities dealer in the United States appointed by the Company.

“Reference Treasury Dealer Quotation” means, with respect to a Reference Treasury Dealer and any Redemption Date, the average, as determined by the Company, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount and quoted in writing to the Company by such Reference Treasury Dealer at 5:00 p.m. on the third Business Day in New York City preceding such Redemption Date).

“Regular Record Date” means, with respect to each Interest Payment Date, the close of business on the 15th calendar day preceding such Interest Payment Date (whether or not a Business Day).

“Stated Maturity” means January 2, 2046.

“Treasury Yield” means, with respect to any Redemption Date, the rate per annum equal to the semi-annual equivalent yield to maturity of the Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for such Redemption Date.

SECTION 103.  Payment of Principal and Interest.  The principal of the Series 2016A Notes shall be due at Stated Maturity (unless earlier redeemed).  The unpaid principal amount of the Series 2016A Notes shall bear interest at the rate of 4.300% per annum until paid or duly provided for.  Interest shall be paid semiannually in arrears on each Interest Payment Date to the Person in whose name the Series 2016A Notes are registered on the Regular Record Date for such Interest Payment Date, provided that interest payable at the Stated Maturity or on a Redemption Date as provided herein will be paid to the Person to whom principal is payable.  Any such interest that is not so punctually paid or duly provided for will forthwith cease to be payable to the Holders on such Regular Record Date and may either be paid to the Person or Persons in whose name the Series 2016A Notes are registered at the close of business on a Special Record Date for the payment of such defaulted interest to be fixed by the Trustee, notice whereof shall be given to Holders of the Series 2016A Notes not less than ten (10) days prior to such Special Record Date, or be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange, if any, on which the Series 2016A Notes shall 

3

be listed, and upon such notice as may be required by any such exchange, all as more fully provided in the Original Indenture.

Payments of interest on the Series 2016A Notes will include interest accrued to but excluding the respective Interest Payment Dates.  Interest payments for the Series 2016A Notes shall be computed and paid on the basis of a 360-day year of twelve 30-day months.  In the event that any date on which interest is payable on the Series 2016A Notes is not a Business Day, then payment of the interest payable on such date will be made on the next succeeding day that is a Business Day (and without any interest or other payment in respect of any such delay), with the same force and effect as if made on the date the payment was originally payable.

Payment of the principal and interest due at the Stated Maturity or earlier redemption of the Series 2016A Notes shall be made upon surrender of the Series 2016A Notes at the Corporate Trust Office of the Trustee.  The principal of and interest on the Series 2016A Notes shall be paid in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts.  Payments of interest (including interest on any Interest Payment Date) will be made, subject to such surrender where applicable, at the option of the Company, (i) by check mailed to the address of the Person entitled thereto as such address shall appear in the Security Register or (ii) by wire transfer or other electronic transfer at such place and to such account at a banking institution in the United States as may be designated in writing to the Trustee at least sixteen (16) days prior to the date for payment by the Person entitled thereto.  

SECTION 104.  Denominations.  The Series 2016A Notes may be issued in denominations of $2,000 and integral multiples of $1,000 in excess thereof.

SECTION 105.  Global Securities.  The Series 2016A Notes will be issued in the form of one or more Global Securities registered in the name of the Depositary (which shall be The Depository Trust Company) or its nominee.  Except under the limited circumstances described below, Series 2016A Notes represented by one or more Global Securities will not be exchangeable for, and will not otherwise be issuable as, Series 2016A Notes in definitive form.  The Global Securities described above may not be transferred except by the Depositary to a nominee of the Depositary or by a nominee of the Depositary to the Depositary or another nominee of the Depositary or to a successor Depositary or its nominee.

Owners of beneficial interests in such a Global Security will not be considered the Holders thereof for any purpose under the Indenture, and no Global Security representing a Series 2016A Note shall be exchangeable, except for another Global Security of like denomination and tenor to be registered in the name of the Depositary or its nominee or a successor Depositary or its nominee.  The rights of Holders of such Global Security shall be exercised only through the Depositary.

Neither the Company, the Trustee, nor any agent of the Company or the Trustee shall have any responsibility or liability for any aspect of the records relating to or payments made on account of beneficial ownership interests in a Global Security or for maintaining, supervising or reviewing any records relating to such beneficial ownership interests.

4

Subject to the procedures of the Depositary, a Global Security shall be exchangeable for Series 2016A Notes registered in the names of persons other than the Depositary or its nominee only if (i) the Depositary notifies the Company that it is unwilling or unable to continue as a Depositary for such Global Security and no successor Depositary shall have been appointed by the Company, or if at any time the Depositary ceases to be a clearing agency registered under the Securities Exchange Act of 1934, as amended, at a time when the Depositary is required to be so registered to act as such Depositary and no successor Depositary shall have been appointed by the Company, in each case within 90 days after the Company receives such notice or becomes aware of such cessation, (ii) the Company in its sole discretion determines that such Global Security shall be so exchangeable, or (iii) there shall have occurred an Event of Default with respect to the Series 2016A Notes.  Any Global Security that is exchangeable pursuant to the preceding sentence shall be exchangeable for Series 2016A Notes registered in such names as the Depositary shall direct.

SECTION 106.  Transfer.  No service charge will be made for any transfer or exchange of Series 2016A Notes, but payment will be required of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection therewith.

The Company shall not be required (a) to issue, register the transfer of or exchange any Series 2016A Notes during a period beginning at the opening of business fifteen (15) days before the date of the mailing of a notice pursuant to Section 1104 of the Original Indenture identifying the serial numbers of the Series 2016A Notes to be called for redemption, and ending at the close of business on the day of the mailing, or (b) to register the transfer of or exchange any Series 2016A Notes theretofore selected for redemption in whole or in part, except the unredeemed portion of any Series 2016A Notes redeemed in part.

SECTION 107.  Redemption at the Company’s Option.  At any time and from time to time prior to July 2, 2045, the Series 2016A Notes will be subject to redemption at the option of the Company in whole or in part upon not less than 30 nor more than 60 days’ notice, at Redemption Prices equal to the greater of (i) 100% of the principal amount of the Series 2016A Notes being redeemed and (ii) the sum of the present values of the remaining scheduled payments of principal of and interest on the Series 2016A Notes being redeemed (not including any portion of such payments of interest accrued to the Redemption Date), discounted (for purposes of determining present value) to the Redemption Date on a semiannual basis (assuming a 360-day year consisting of twelve 30-day months) at a discount rate equal to the Treasury Yield plus 25 basis points, plus, in each case, accrued and unpaid interest thereon to the Redemption Date.  At any time and from time to time on or after July 2, 2045, the Series 2016A Notes will be subject to redemption at the option of the Company in whole or in part upon not less than 30 nor more than 60 days’ notice, at a Redemption Price equal to 100% of the principal amount of the Series 2016A Notes being redeemed plus accrued and unpaid interest thereon to the Redemption Date. 

In the event of redemption of the Series 2016A Notes in part only, a new Series 2016A Note or Notes for the unredeemed portion will be issued in the name or names of the Holders thereof upon the surrender thereof.

5

The Series 2016A Notes will not have a sinking fund.

Notice of redemption shall be given as provided in Section 1104 of the Original Indenture, except that any notice of redemption with respect to any redemption occurring prior to July 2, 2045 shall not specify the Redemption Price therefor but only the manner of calculation thereof.  The Trustee shall not be responsible for the calculation of such Redemption Price.  The Company shall calculate such Redemption Price and promptly notify the Trustee thereof.

Any redemption of less than all of the Series 2016A Notes shall, with respect to the principal thereof, be divisible by $1,000.

ARTICLE 2

Miscellaneous Provisions

SECTION 201.  Recitals by Company.  The recitals in this Fifty-Fifth Supplemental Indenture are made by the Company only and not by the Trustee, and all of the provisions contained in the Original Indenture in respect of the rights, privileges, immunities, powers and duties of the Trustee shall be applicable in respect of Series 2016A Notes and of this Fifty-Fifth Supplemental Indenture as fully and with like effect as if set forth herein in full.

SECTION 202.  Ratification and Incorporation of Original Indenture.  As supplemented hereby, the Original Indenture is in all respects ratified and confirmed, and the Original Indenture as supplemented by this Fifty-Fifth Supplemental Indenture shall be read, taken and construed as one and the same instrument.

SECTION 203.  Executed in Counterparts.  This Fifty-Fifth Supplemental Indenture may be simultaneously executed in several counterparts, each of which shall be deemed to be an original, and such counterparts shall together constitute but one and the same instrument.

6

IN WITNESS WHEREOF, each party hereto has caused this instrument to be signed in its name and behalf by its duly authorized officers, all as of the day and year first above written.

	
		
	ATTEST:

	ALABAMA POWER COMPANY

	By: /s/Ceila H. Shorts
	By: /s/Philip C. Raymond

	Ceila H. Shorts
	Philip C. Raymond

	Corporate Secretary
	Executive Vice President,
Chief Financial Officer and 
Treasurer

	

	 

	ATTEST:
	REGIONS BANK,
as Trustee

	

	 

	By: /s/Ann M. Harris
	By: /s/Patti Maner

	Ann M. Harris
	Patti Maner

	Vice President
	Vice President

7

EXHIBIT A

FORM OF SERIES 2016A NOTE

	
		
	NO. __   
	CUSIP NO. 010392FP8

	 
	 

                           

ALABAMA POWER COMPANY
SERIES 2016A 4.300% SENIOR NOTE
DUE JANUARY 2, 2046

	
		
	Principal Amount:
	$________________________

	Regular Record Date:
	15th calendar day prior to the applicable Interest Payment Date (whether or not a Business Day)

	Original Issue Date:
	January 13, 2016

	Stated Maturity:
	January 2, 2046

	Interest Payment Dates:
	January 2 and July 2

	Interest Rate:
	4.300%

	Authorized Denomination:
	$2,000 and integral multiples of $1,000 in excess thereof

Alabama Power Company, an Alabama corporation (the “Company”, which term includes any successor corporation under the Indenture referred to on the reverse hereof), for value received, hereby promises to pay to ___________________________________________, or registered assigns, the principal sum of ____________________________________________ DOLLARS ($______________) on the Stated Maturity shown above (or upon earlier redemption), and to pay interest thereon from the Original Issue Date shown above, or from the most recent Interest Payment Date to which interest has been paid or duly provided for, semiannually in arrears on each Interest Payment Date as specified above, commencing on July 2, 2016, and on the Stated Maturity (or upon earlier redemption) at the rate per annum shown above until the principal hereof is paid or made available for payment and at such rate on any overdue principal and on any overdue installment of interest.  The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date (other than an Interest Payment Date that is the Stated Maturity or on a Redemption Date) will, as provided in such Indenture, be paid to the Person in whose name this Note (the “Note”) is registered at the close of business on the Regular Record Date as specified above next preceding such Interest Payment Date, provided that any interest payable at the Stated Maturity or on any Redemption Date will be paid to the Person to whom principal is payable.  Except as otherwise provided in the Indenture, any such interest not so punctually paid or duly provided for will forthwith cease to be payable to the Holder on such Regular Record Date and may either be paid to the Person in 

A-1

whose name this Note is registered at the close of business on a Special Record Date for the payment of such defaulted interest to be fixed by the Trustee, notice whereof shall be given to Holders of Notes of this series not less than 10 days prior to such Special Record Date, or be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange, if any, on which the Notes of this series shall be listed, and upon such notice as may be required by any such exchange, all as more fully provided in the Indenture.

Payments of interest on this Note will include interest accrued to but excluding the respective Interest Payment Dates.  Interest payments for this Note shall be computed and paid on the basis of a 360-day year of twelve 30-day months.  In the event that any Interest Payment Date would otherwise be a day that is not a Business Day, then payment of the interest payable on such date will be made on the next succeeding day that is a Business Day (and without any interest or other payment in respect of any such delay), with the same force and effect as if made on the date the payment was originally payable.  A “Business Day” shall mean any day other than a Saturday or a Sunday or a day on which banking institutions in New York City are authorized or required by law or executive order to remain closed or a day on which the Corporate Trust Office of the Trustee is closed for business.

Payment of the principal of and interest due at the Stated Maturity or earlier redemption of the Series 2016A Notes shall be made upon surrender of the Series 2016A Notes at the Corporate Trust Office of the Trustee.  The principal of and interest on the Series 2016A Notes shall be paid in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts.  Payment of interest (including interest on an Interest Payment Date) will be made, subject to such surrender where applicable, at the option of the Company, (i) by check mailed to the address of the Person entitled thereto as such address shall appear in the Security Register or (ii) by wire transfer or other electronic transfer at such place and to such account at a banking institution in the United States as may be designated in writing to the Trustee at least 16 days prior to the date for payment by the Person entitled thereto.

REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS NOTE SET FORTH ON THE REVERSE HEREOF, WHICH FURTHER PROVISIONS SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS IF SET FORTH AT THIS PLACE.

Unless the certificate of authentication hereon has been executed by the Trustee by manual signature, this Note shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose.

A-2

IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed under its corporate seal.

	
		
	Dated: ______________________________

	 

	 
	ALABAMA POWER COMPANY

	 
	By: __________________________________

	 
	Vice President

	 
	 

	ATTEST:

	 

	___________________________________
Assistant Secretary
	 

{Seal of ALABAMA POWER COMPANY appears here}

 

A-3

CERTIFICATE OF AUTHENTICATION

This is one of the Senior Notes referred to in the within-mentioned Indenture.

	
		
	 
	REGIONS BANK
as Trustee

By:__________________________________

	 
	Authorized Signatory

A-4

(Reverse Side of Note)

This Note is one of a duly authorized issue of Senior Notes of the Company (the “Notes”), issued and issuable in one or more series under a Senior Note Indenture, dated as of December 1, 1997, as supplemented (the “Indenture”), between the Company and Regions Bank, (as successor to The Bank of New York Mellon (as successor to JPMorgan Chase Bank, N.A. (formerly known as The Chase Manhattan Bank))), Trustee (the “Trustee,” which term includes any successor trustee under the Indenture), to which Indenture and all indentures incidental thereto reference is hereby made for a statement of the respective rights, limitation of rights, duties and immunities thereunder of the Company, the Trustee and the Holders of the Notes issued thereunder and of the terms upon which said Notes are, and are to be, authenticated and delivered.  This Note is one of the series designated on the face hereof as Series 2016A 4.300% Senior Notes due January 2, 2046 (the “Series 2016A Notes”) which is unlimited in aggregate principal amount.  Capitalized terms used herein for which no definition is provided herein shall have the meanings set forth in the Indenture.
At any time and from time to time prior to July 2, 2045, the Series 2016A Notes will be subject to redemption at the option of the Company in whole or in part upon not less than 30 nor more than 60 days’ notice, at Redemption Prices equal to the greater of (i) 100% of the principal amount of the Series 2016A Notes being redeemed and (ii) the sum of the present values of the remaining scheduled payments of principal of and interest on the Series 2016A Notes being redeemed (not including any portion of such payments of interest accrued to the Redemption Date), discounted (for purposes of determining present value) to the Redemption Date on a semiannual basis (assuming a 360-day year consisting of twelve 30-day months) at a discount rate equal to the Treasury Yield plus 25 basis points, plus, in each case, accrued and unpaid interest thereon to the Redemption Date.  At any time and from time to time on or after July 2, 2045, the Series 2016A Notes will be subject to redemption at the option of the Company in whole or in part upon not less than 30 nor more than 60 days’ notice, at a Redemption Price equal to 100% of the principal amount of the Series 2016A Notes being redeemed plus accrued and unpaid interest thereon to the Redemption Date.    
“Treasury Yield” means, with respect to any Redemption Date, the rate per annum equal to the semiannual equivalent yield to maturity of the Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for such Redemption Date.
“Comparable Treasury Issue” means the United States Treasury security selected by an Independent Investment Banker as having a maturity comparable to the remaining term of the Series 2016A Notes to be redeemed that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the remaining term of the Series 2016A Notes.

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“Comparable Treasury Price” means, with respect to any Redemption Date, (i) the average of the Reference Treasury Dealer Quotations for such Redemption Date, after excluding the highest and lowest such Reference Treasury Dealer Quotations, or (ii) if the Company obtains fewer than four such Reference Treasury Dealer Quotations, the average of all such quotations.
“Independent Investment Banker” means an independent investment banking institution of national standing appointed by the Company.    
“Reference Treasury Dealer” means a primary U.S. Government securities dealer in the United States appointed by the Company.
“Reference Treasury Dealer Quotation” means, with respect to a Reference Treasury Dealer and any Redemption Date, the average, as determined by the Company, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount and quoted in writing to the Company by such Reference Treasury Dealer at 5:00 p.m. on the third Business Day in New York City preceding such Redemption Date).
The Trustee shall not be responsible for the calculation of the Redemption Price with respect to a redemption occurring prior to July 2, 2045.  The Company shall calculate such Redemption Price and promptly notify the Trustee thereof.
In the event of redemption of this Note in part only, a new Note or Notes of this series for the unredeemed portion hereof will be issued in the name of the Holder hereof upon the surrender hereof.  The Series 2016A Notes will not have a sinking fund.
If an Event of Default with respect to the Notes of this series shall occur and be continuing, the principal of the Notes of this series may be declared due and payable in the manner, with the effect and subject to the conditions provided in the Indenture.
The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the rights of the Holders of the Notes of each series to be affected under the Indenture at any time by the Company and the Trustee with the consent of the Holders of not less than a majority in principal amount of the Notes at the time Outstanding of each series to be affected.  The Indenture also contains provisions permitting the Holders of specified percentages in principal amount of the Notes of each series at the time Outstanding, on behalf of the Holders of all Notes of such series, to waive compliance by the Company with certain provisions of the Indenture and certain past 

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defaults under the Indenture and their consequences.  Any such consent or waiver by the Holder of this Note shall be conclusive and binding upon such Holder and upon all future Holders of this Note and of any Note issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof, whether or not notation of such consent or waiver is made upon this Note.
No reference herein to the Indenture and no provision of this Note or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of and interest on this Note at the times, place and rate, and in the coin or currency, herein prescribed.
As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Note is registerable in the Security Register, upon surrender of this Note for registration of transfer at the office or agency of the Company for such purpose, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company and the Security Registrar and duly executed by, the Holder hereof or his attorney duly authorized in writing, and thereupon one or more new Notes of this series, of authorized denominations and of like tenor and for the same aggregate principal amount, will be issued to the designated transferee or transferees.  No service charge shall be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Note for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name this Note is registered as the owner hereof for all purposes, whether or not this Note be overdue, and neither the Company, the Trustee nor any such agent shall be affected by notice to the contrary.
The Notes of this series are issuable only in registered form without coupons in denominations of $2,000 and any integral multiples of $1,000 in excess thereof.  As provided in the Indenture and subject to certain limitations therein set forth, Notes of this series are exchangeable for a like aggregate principal amount of Notes of this series of a different authorized denomination, as requested by the Holder surrendering the same upon surrender of the Note or Notes to be exchanged at the office or agency of the Company.
This Note shall be governed by, and construed in accordance with, the internal laws of the State of New York.

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ABBREVIATIONS

The following abbreviations, when used in the inscription on the face of this instrument, shall be construed as though they were written out in full according to applicable laws or regulations:
	
				
	TEN COM-
	as tenants in 
common
	UNIF GIFT MIN ACT-
	________ Custodian_______
 (Cust)                       (Minor)

	TEN ENT-
	as tenants by the entireties
	 
	

under Uniform Gifts to 

	JT TEN-
	as joint tenants 
with right of survivorship and 
not as tenants 
in common
	 
	Minors Act

_________________________
(State)

Additional abbreviations may also be used
though not on the above list.
FOR VALUE RECEIVED, the undersigned hereby sell(s) and transfer(s) unto 
______________________________________________________________________________
(please insert Social Security or other identifying number of assignee)
PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING POSTAL ZIP CODE OF ASSIGNEE
______________________________________________________________________________
______________________________________________________________________________
the within Note and all rights thereunder, hereby irrevocably constituting and appointing
______________________________________________________________________________
______________________________________________________________________________
agent to transfer said Note on the books of the Company, with full power of substitution in the premises.
	
		
	Dated:___________
	_______________________________________________________
_______________________________________________________

NOTICE:  The signature to this assignment must correspond with the name as written upon the face of the within instrument in every particular without alteration or enlargement, or any change whatever.  

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EXHIBIT B

CERTIFICATE OF AUTHENTICATION

This is one of the Senior Notes referred to in the within-mentioned Indenture.

	
		
	 
	REGIONS BANK, as Trustee

By: _________________________________
Authorized Signatory

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