Document:

Form of 8% Secured Convertible Debenture due 2010

 Exhibit 4.1(a) 
 EXHIBIT A 
 NEITHER THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS CONVERTIBLE HAVE BEEN REGISTERED
WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED
OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH
APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY. THIS SECURITY AND THE SECURITIES ISSUABLE UPON CONVERSION OF THIS
SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES. 
 Original Issue Date: February
    , 2007 
 Original Conversion Price (subject to adjustment herein): $2.00 
 $                     
 8% SECURED CONVERTIBLE DEBENTURE 
 DUE FEBRUARY     , 2010 
 THIS DEBENTURE
is one of a series of duly authorized and validly issued 8% Secured Convertible Debentures of Star Energy Corporation, a Nevada corporation, (the “Company”), having its principal office at 317 Madison Avenue, 21st Floor, New York, NY, 10017, designated as its 8% Secured Convertible Debenture due February     , 2010 as the same may be
supplemented, modified, amended, restated or replaced from time to time in the manner provided herein, this “Debenture” and, collectively with the other such series of debentures, the “Debentures”). 
 FOR VALUE RECEIVED, the Company promises to pay to
                                        
or its registered assigns (the “Holder”), or shall have paid pursuant to the terms hereunder, the principal sum of
$                     on February     , 2010 (the “Maturity Date”) or such earlier date as this
Debenture is required or permitted to be repaid as provided hereunder, and to pay interest to the Holder on the aggregate unconverted and then outstanding principal amount of this Debenture, all in accordance with the provisions hereof. This
Debenture is subject to the following additional provisions: 
 Section 1. Definitions. For the purposes hereof, in
addition to the terms defined elsewhere in this Debenture, (a) capitalized terms not otherwise defined herein shall have the meanings set forth in the Purchase Agreement or other applicable Transaction Document (as such terms are defined
herein), and (b) the following terms shall have the following meanings: 
 “Alternate Consideration”
shall have the meaning set forth in Section 5(e). 
  

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 “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 general meeting of all or substantially all of its creditors for the stated purpose of
arranging a composition, adjustment or restructuring of its debts; or (g) the Company or any Significant Subsidiary thereof, by any act or document, 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). 
 “Business Day” means any day except
Saturday, Sunday, any day which shall be 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(d)(v). 
 “Change of Control Transaction” means the occurrence after the date hereof of any of (i) 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 40% 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), or (ii) 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 60% of the aggregate voting power of
the Company or the successor entity of such transaction, or (iii) the Company sells or transfers all or substantially all of its assets to another Person and the stockholders of the 

  

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Company immediately prior to such transaction own less than 60% of the aggregate voting power of the acquiring entity immediately after the transaction, or
(iv) a replacement at one time or within a three year period of more than one-half of the members of the Company’s board of directors which is not nominated or approved by a majority of those individuals who are members of the board of
directors or nominating committee on the date hereof (or by those individuals who are serving as members of the board of directors on any date whose position on the board of directors was approved by a majority of the members of the board of
directors or nominating committee who are members on the date hereof), or (v) 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
(i) through (iv) above. 
 “Common Stock” means the common stock, par value $.001 per share, of the
Company and stock of any other class of securities into which such securities may hereafter be reclassified or changed into. 
 “Conversion Date” shall have the meaning set forth in Section 4(a). 
 “Conversion
Price” shall have the meaning set forth in Section 4(b). 
 “Conversion 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). 
 “Effectiveness Period” shall have the meaning set forth
in the Registration Rights Agreement. 
 “Equity Conditions” means, during the period in question,
(i) 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, (ii) the Company shall have paid all liquidated damages and other
amounts owing to the Holder in respect of this Debenture, (iii) there is an effective Registration Statement pursuant to which the Holder is permitted to utilize the prospectus thereunder to resell all of the Underlying Shares issuable pursuant
to the Transaction Documents (and the Company believes, in good faith, that such effectiveness will continue uninterrupted for the foreseeable future), (iv) the Common Stock is trading on a Trading Market and all of the Underlying Shares
issuable pursuant to the Transaction Documents are or upon issuance will be 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), (v) there is a sufficient number of authorized but unissued and otherwise unreserved shares of Common Stock for the issuance of all of the Underlying 

  

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Shares issuable pursuant to the Transaction Documents, (vi) there is no existing Event of Default or no existing event which, with the passage of time
or the giving of notice, would reasonably constitute an Event of Default, (vii) 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) to the
Holder would not violate the limitations set forth in Section 4(c) herein, (viii) there has been no public announcement of a pending or proposed Fundamental Transaction or Change of Control Transaction that has not been consummated,
(ix) the Holder is not in possession of any information provided by the Company that constitutes, or could reasonably be expected to constitute, material non-public information and (x) for a period of 20 consecutive Trading Days prior to
the applicable date in question, the daily trading volume for the Common Stock on the principal Trading Market exceeds 100,000 shares (subject to adjustment for forward and reverse stock splits and the like) per Trading Day. 
 “Event of Default” shall have the meaning set forth in Section 8. 
 “Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated
thereunder. 
 “Forced Conversion” shall have the meaning set forth in Section 6(a). 
 “Forced Conversion Date” shall have the meaning set forth in Section 6(a). 
 “Forced Conversion Notice” shall have the meaning set forth in Section 6(a). 
 “Forced Conversion Notice Date” shall have the meaning set forth in Section 6(a). 
 “Fundamental Transaction” shall have the meaning set forth in Section 5(e). 
 “Indebtedness” means (a) any liabilities for borrowed money or similar amounts owed in excess of $50,000 (other than
trade accounts payable incurred in the ordinary course of business and inter-company advances among the Company and its Subsidiaries), (b) all guaranties, endorsements and other contingent obligations in respect of Indebtedness of others,
whether or not the same are or should be reflected in the Company’s balance sheet (or the notes thereto), except for (i) guaranties by endorsement of negotiable instruments for deposit or collection or similar transactions in the ordinary
course of business and (ii) guaranties of the Indebtedness or other obligations of the Company or any Subsidiary by any other Subsidiary or the Company; and (c) the present value of any lease payments in excess of $50,000 due under leases
required to be capitalized in accordance with GAAP. 
 “Interest Conversion Rate” means the lesser of
(a) the Conversion Price or (b) 85% of the lesser of (i) the average of the VWAPs for the 10 consecutive Trading Days ending on the Trading Day that is immediately prior to the applicable Interest Payment Date or (ii) the average
of the VWAPs for the 10 consecutive Trading Days ending on the Trading Day that is immediately prior to the date the applicable Interest Conversion Shares are issued and delivered if after the Interest Payment Date. 
  

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 “Interest Notice Period” shall have the meaning set forth in
Section 2(a). 
 “Interest Payment Date” shall have the meaning set forth in Section 2(a).

 “Interest Share Amount” shall have the meaning set forth in Section 2(a). 
 “Late Fees” shall have the meaning set forth in Section 2(d). 
 “Mandatory Default Amount” means the sum of (i) the greater of (A) 130% of the outstanding principal amount of
this Debenture, plus all accrued and unpaid interest hereon, or (B) the outstanding principal amount of this Debenture, plus all accrued and unpaid interest hereon, 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, and (ii) 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(b). 
 “Optional Redemption Amount” means the sum of (i) if the Optional Redemption Date is on or prior to the second
anniversary of the Original Issue Date, 120% of the then outstanding principal amount of the Debenture and if the Optional Redemption Date is after the second anniversary of the Original Issue Date and prior to the Maturity Date, 110% of the then
outstanding principal amount of the Debenture (ii) accrued but unpaid interest and (iii) all liquidated damages and other amounts due in respect of the Debenture. 
 “Optional Redemption Date” shall have the meaning set forth in Section 6(b). 
 “Optional Redemption Notice” shall have the meaning set forth in Section 6(b). 
 “Optional Redemption Notice Date” shall have the meaning set forth in Section 6(b). 
 “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. 
  

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 “Permitted Indebtedness” means (a) the Indebtedness existing on the
Original Issue Date and set forth on Schedule 3.1(aa) attached to the Purchase Agreement, (b) capital lease obligations, construction or improvement financing and purchase money indebtedness incurred in connection with the acquisition,
construction or improvement of capital assets and capital lease obligations with respect to newly acquired, improved or leased assets (provided, that immediately following any such transaction, the pro forma consolidated total Indebtedness of the
Company and its subsidiaries to their consolidated Total Asset ratio is not more than 0.75 to 1); (c) additional Indebtedness incurred by the Company in connection with raising capital for the acquisition of another entity which is, itself or
through its subsidiaries, an operating company in a business synergistic with the business of the Company (by merger, consolidation, the acquisition of all or substantially of the assets of such entity or similar transaction) provided that any
Indebtedness incurred under this clause (d) is expressly subordinate to the Debentures pursuant to a written subordination agreement with the Purchasers that is acceptable to each Purchaser; or (e) any continuation, extension, renewal,
modification, refinancing or replacement of any such Permitted Indebtedness on overall terms that are generally no less favorable than those applicable to the existing Permitted Indebtedness. 
 “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 and incurred in the ordinary course of the Company’s business, such as carriers’, warehousemen’s and mechanics’ Liens,
statutory landlords’ Liens, Liens consisting of easements, right-of-way, restrictions, covenants or other agreements of record or similar charges or encumbrances, 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; and (c) Liens incurred in
connection with Permitted Indebtedness under clause (b) thereunder, provided that such Liens are not secured by assets of the Company or its Subsidiaries other than the assets so acquired, constructed, improved or leased (and the products and
proceeds thereof, insurance therefor and warranty and other contract rights related thereto); (d) Liens incurred in respect of judgments and awards discharged within 30 days from the making thereof; (e) any cash deposits made or bonds or
letters of credit posted in the ordinary course to secure performance under any contract or applicable law; (f) in the case of any account, intangible, instrument, lease, agreement or document, any contractual right, power, privilege, remedy,
interest, defect, restriction, covenant, claim, counterclaim, right of recoupment, abatement, reduction or setoff, or defense of any account debtor or other party thereto, whether now existing or hereafter arising, and whether pursuant to the
applicable contractual provisions or applicable law; (g) Liens existing on the Original Issue Date and set forth on Schedule 3.1(n) attached to the 

  

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Purchase Agreement or (h) any renewal, continuation, extension or replacement of any such Permitted Lien, provided that the scope of the assets
encumbered thereby shall not be thereby increased. 
 “Person” means an individual or corporation,
partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind. 
 “Purchase Agreement” means the Securities Purchase Agreement, dated as of February 9, 2007 among the Company and the
original Holders, as amended, modified or supplemented from time to time in accordance with its terms. 
 “Registration Rights Agreement” means the Registration Rights Agreement, dated as of the date of the Purchase Agreement, among the Company and the original Holders, as amended, modified or supplemented from time to time in
accordance with its terms. 
 “Registration Statement” means a registration statement that registers the
resale of all Conversion Shares and the shares of Common Stock issuable in lieu of cash interest payments of the Holder, names such Holder as a “selling stockholder” therein, and meets the requirements of the Registration Rights Agreement.

 “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(d). 
 “Subsidiary” shall have the meaning set forth in the Purchase Agreement. 
 “Threshold Period” shall have the meaning set forth in Section 6(a). 
 “Trading Day” means a day on which the principal Trading Market is open for business. 
 “Trading Market” means the following markets or exchanges on which the Common Stock is listed or quoted for trading on
the date in question: the American Stock Exchange, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock Exchange or the OTC Bulletin Board. 
 “Transaction Documents” shall have the meaning set forth in the Purchase Agreement. 
 “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 for trading
as reported by Bloomberg L.P. (based on a Trading Day from 

  

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9:30 a.m. (New York City time) to 4:02 p.m. (New York City time); (b) if the Common Stock is not then listed or quoted for trading on a Trading Market
and if prices for the Common Stock are then reported in the “Pink Sheets” published by Pink Sheets, LLC (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 (c) 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 Holder and reasonably acceptable to the Company. 
 Section 2. Interest. 
 a) Payment of Interest in Cash or Kind. The Company shall pay interest to the Holder on the aggregate unconverted and then outstanding principal amount of this Debenture at the rate of 8% per annum,
payable quarterly on January 1, April 1, July 1 and October 1, beginning on the first such date after the Original Issue Date, on each Conversion Date (as to that principal amount then being converted), on each Optional
Redemption Date (as to that principal amount then being redeemed) and on the Maturity Date (each such date, an “Interest Payment Date”) (if any Interest Payment Date is not a Business Day, then the applicable payment shall be due on
the next succeeding Business Day), in cash or duly authorized, validly issued, fully paid and non-assessable shares of Common Stock at the Interest Conversion Rate (the dollar amount to be paid in shares, the “Interest Share
Amount”) or a combination thereof; provided, however, that payment in shares of Common Stock may only occur if (i) all of the Equity Conditions have been met (unless waived by the Holder in writing) during the 20 Trading
Days immediately prior to the applicable Interest Payment Date (the “Interest Notice Period”) and through and including the date such shares of Common Stock are issued to the Holder and (ii) the Company shall have given the
Holder notice in accordance with the notice requirements set forth below. 
 b) Company’s Election to Pay Interest in
Kind. Subject to the terms and conditions herein, the decision whether to pay interest hereunder in cash, shares of Common Stock or a combination thereof shall be at the discretion of the Company. Prior to the commencement of any Interest Notice
Period, the Company shall deliver to the Holder a written notice of its election (with any election to pay with shares of Common Stock, in whole or in part, conditioned on compliance with the Equity Conditions during the Interest Notice Period) to
pay interest hereunder on the applicable Interest Payment Date either in cash, shares of Common Stock or a combination thereof and the Interest Share Amount as to the applicable Interest Payment Date, provided that the Company may indicate in such
notice that the election contained in such notice shall apply to future Interest Payment Dates until revised by a subsequent notice. During any Interest Notice Period, the Company’s election (whether specific to an Interest Payment Date or
continuous) shall be irrevocable as to such Interest Payment Date. Subject to the aforementioned conditions, failure to timely deliver such written notice to the Holder or failure to comply with the Equity Conditions during the Interest Notice
Period shall be deemed an election by the Company to pay the interest on such Interest Payment Date in cash. At any time the Company delivers a notice to the Holder of its election to pay the interest in shares of Common Stock, the Company shall
timely file a prospectus supplement pursuant to Rule 424 disclosing such election. 
  

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 c) Interest Calculations. Interest shall be calculated on the basis of a 360-day
year, consisting of twelve 30 calendar day periods, and shall accrue daily on the outstanding principal balance commencing on the Original Issue Date until payment in full of the principal sum, together with all accrued and unpaid interest,
liquidated damages and other amounts which may become due hereunder, has been made. Payment of interest in shares of Common Stock shall otherwise occur pursuant to Section 4(d)(ii) herein and, solely for purposes of the payment of interest in
shares, the Interest Payment Date shall be deemed the Conversion Date. Interest shall cease to accrue with respect to any principal amount converted, provided that the Company actually delivers the Conversion Shares within the time period required
by Section 4(d)(ii) herein. Interest hereunder will be paid to the Person in whose name this Debenture is registered on the records of the Company regarding registration and transfers of this Debenture (the “Debenture
Register”). Except as otherwise provided herein, if at any time the Company pays interest partially in cash and partially in shares of Common Stock to the holders of the Debentures, then such payment of cash shall be distributed ratably
among the holders of the then-outstanding Debentures based on their (or their predecessor’s) initial purchases of Debentures pursuant to the Purchase Agreement. 
 d) Late Fee. All overdue accrued and unpaid interest to be paid hereunder shall entail a late fee at an interest rate equal to the
lesser of 18% per annum or the maximum rate permitted by applicable law (“Late Fees”) which shall accrue daily from the date such interest is due hereunder through and including the date of payment in full. Notwithstanding
anything to the contrary contained herein, if on any Interest Payment Date the Company has elected to pay accrued interest in the form of Common Stock but the Company is not permitted to pay accrued interest in Common Stock because it fails to
satisfy the conditions for payment in Common Stock set forth in Section 2(a) herein, then, at the option of the Holder, the Company, in lieu of delivering either shares of Common Stock pursuant to this Section 2 or paying the regularly
scheduled interest payment in cash, shall deliver, within three Trading Days of each applicable Interest Payment Date, an amount in cash equal to the product of (x) the number of shares of Common Stock otherwise deliverable to the Holder in
connection with the payment of interest due on such Interest Payment Date multiplied by (y) the highest VWAP during the period commencing on the Interest Payment Date and ending on the Trading Day prior to the date such payment is made.

 e) 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. 
  

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 b) Investment Representations. This Debenture has been issued (as one of the
“Securities” identified thereunder) 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. 
 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(c) hereof and irrespective of any Equity Condition). The Holder shall effect conversions by delivering to the Company a Notice of Conversion, the form of which is attached hereto as Annex A (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. To effect conversions hereunder, the Holder shall not be required to physically surrender this Debenture to the
Company unless the entire principal amount of this Debenture, plus all accrued and unpaid interest thereon, has been so converted. Conversions hereunder shall have the effect of lowering the outstanding principal amount of this Debenture in an
amount equal to the applicable conversion. The Holder and the Company shall maintain records showing the principal amount(s) converted and the date of such conversion(s). The Company may deliver an objection to any Notice of Conversion within 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”). 
  

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 c) 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, such Holder (together with such Holder’s
Affiliates, and any other person or entity acting as a group together with such Holder or any of such 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 such 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 (A) conversion of the remaining, unconverted principal amount of this Debenture beneficially owned by such Holder or any of its Affiliates and
(B) 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 such Holder or any of its Affiliates. Except as set forth in the preceding sentence, for purposes of this Section 4(c), 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(c) applies, the determination of whether this Debenture is convertible (in relation to
other securities owned by such Holder together with any Affiliates) and of which principal amount of this Debenture is convertible shall be in the sole discretion of such Holder, and the submission of a Notice of Conversion shall be deemed to be
such Holder’s determination of whether this Debenture may be converted (in relation to other securities owned by such Holder together with any Affiliates) and which principal amount of this Debenture is convertible, in each case subject to such
aggregate percentage limitations. To ensure compliance with this restriction, each 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(c), in determining the number of outstanding shares of Common Stock, a Holder may rely on the number of outstanding
shares of Common Stock as stated in the most recent of the following: (A) the Company’s most recent Form 10-QSB or Form 10-KSB, as the case may be; (B) a more recent public announcement by the Company; or (C) a more recent 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 such
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 such 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 

  

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effect to the issuance of shares of Common Stock issuable upon conversion of this Debenture held by the Holder. The Beneficial Ownership Limitation
provisions of this Section 4(c) may be waived by such Holder, at the election of such Holder, upon not less than 61 days’ prior notice to the Company, to change the Beneficial Ownership Limitation to 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 provisions of this Section 4(c) shall continue to apply. Upon such a change by a
Holder of the Beneficial Ownership Limitation from such 4.99% limitation to such 9.99% limitation, the Beneficial Ownership Limitation may not be further waived by such Holder. The provisions of this paragraph shall be construed and implemented in a
manner otherwise than in strict conformity with the terms of this Section 4(c) to correct this paragraph (or any portion hereof) which may be defective or inconsistent with the intended Beneficial Ownership Limitation herein contained or to
make changes or supplements necessary or desirable to properly give effect to such limitation. The limitations contained in this paragraph along with the other provisions of this Debenture) shall apply to a successor holder of this Debenture.

 d) Mechanics of Conversion. 
 i. Conversion Shares Issuable Upon Conversion of Principal Amount. The number of shares of Common Stock 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 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 Effective 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 shares of Common Stock being acquired upon the conversion of this Debenture (including, if the Company has given continuous
notice pursuant to Section 2(b) for payment of interest in shares of Common Stock at least 20 Trading Days prior to the date on which the Conversion Notice is delivered to the Company, shares of Common Stock representing the payment of accrued
interest otherwise determined pursuant to Section 2(a) but assuming that the Interest Payment Period is the 20 Trading Days period immediately prior to the date on which the Conversion Notice is delivered to the Company) and (B) a bank
check in the amount of accrued and unpaid interest (if the Company has elected or is required to pay accrued interest in cash). On or after the Effective Date, the Company shall use its best efforts to deliver any certificate or certificates
required to be delivered by the Company under this Section 4 (other than any certificate that must bear any restrictive legend or trading restriction required by the Purchase Agreement) electronically through the Depository Trust Company or
another established clearing corporation performing similar functions. 
  

 12 

 iii. Failure to Deliver Certificates. If in the case of any Notice of Conversion
such certificate or certificates are not delivered to or as directed by the applicable Holder by the third Trading Day after the Conversion 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 the Common Stock
certificates representing the principal amount of this Debenture tendered for conversion to the Company. 
 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 125% 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 such Holder to the extent it obtains judgment. In the absence of such injunction, the Company shall issue Conversion Shares or, if
applicable, cash, upon a properly noticed conversion. If the Company fails for any reason to deliver to the Holder such certificate or certificates pursuant to Section 4(d)(ii) by the third Trading Day after the Conversion Date, the Company
shall pay to such Holder, in cash, as liquidated damages and not as a penalty, for each $1000 of principal amount being converted, $10 per Trading Day (increasing to $20 per Trading Day on the fifth Trading Day after such liquidated damages begin to
accrue) for each Trading Day after such third Trading Day until such 

  

 13 

 
certificates are delivered. 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 such Holder shall have the right to pursue all remedies available to it hereunder, at law or in equity including, without
limitation, a decree of specific performance and/or injunctive relief. The exercise of any such rights shall not prohibit the Holder from seeking to enforce damages pursuant to any other Section hereof or under applicable law. 
 v. Compensation for Buy-In on Failure to Timely Deliver Certificates Upon Conversion. In addition to any other rights available to
the Holder, if the Company fails for any reason to deliver to the Holder such certificate or certificates by the Share Delivery Date pursuant to Section 4(d)(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 such 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 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 such 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 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(d)(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. 
  

 14 

 vi. Reservation of Shares Issuable Upon Conversion. The Company covenants that it
will at all times reserve and keep available out of its authorized and unissued shares of Common Stock for the sole purpose of issuance upon conversion of this Debenture and payment of interest on this Debenture, each as herein provided, free from
preemptive rights or any other actual contingent purchase rights of Persons other than the Holder (and the other holders of the Debentures), not less than such aggregate number of shares of the Common Stock as shall (subject to the terms and
conditions set forth in the Purchase Agreement) be issuable (taking into account the adjustments and restrictions of Section 5) upon the conversion of the outstanding principal amount of this Debenture and payment of interest hereunder. The
Company covenants that all shares of Common Stock that shall be so issuable shall, upon issue, be duly authorized, validly issued, fully paid and nonassessable and, if the Registration Statement is then effective under the Securities Act, shall be
registered for public sale in accordance with such Registration Statement. 
 vii. Fractional Shares. Upon a conversion
hereunder the Company shall not be required to issue stock certificates representing fractions of shares of Common Stock, but may if otherwise permitted, make a cash payment in respect of any final fraction of a share based on the VWAP at such time.
If the Company elects not, or is unable, to make such a cash payment, the Holder shall be entitled to receive, in lieu of the final fraction of a share, 1 whole share of Common Stock. 
 viii. Transfer Taxes. 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. 
 Section 5. Certain Adjustments. 
 a) Stock Dividends and Stock Splits. If the Company, at any time while this Debenture is outstanding: (A) pays a stock dividend or otherwise makes a distribution or distributions payable in shares of
Common Stock on shares of Common Stock or any Common Stock Equivalents (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Company upon conversion of, or payment of interest on, the Debentures or the exercise
of any Warrant); (B) subdivides outstanding shares of Common Stock into a larger number of shares; (C) combines (including by way of a reverse stock split) outstanding shares of Common Stock into a smaller number of shares; 

  

 15 

 
or (D) 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) Subsequent Equity Sales. If, at any time while this Debenture is outstanding, the Company or any Subsidiary, as applicable, sells or grants any option to purchase or sells or grants any right to reprice, or
otherwise disposes of or issues (or announces any sale, grant or any option to purchase or other disposition), any Common Stock or any Common Stock Equivalents entitling any Person to acquire shares of Common Stock at an effective price per share
that is lower than the then Conversion Price (such lower price, the “Base Conversion Price” and such issuances, collectively, a “Dilutive Issuance”) (if the holder of the Common Stock or Common Stock Equivalents so
issued shall at any time, whether by operation of purchase price adjustments, reset provisions, floating conversion, exercise or exchange prices or otherwise, or due to warrants, options or rights per share which are issued in connection with such
issuance, be entitled to receive shares of Common Stock at an effective price per share that is lower than the Conversion Price, such issuance shall be deemed to have occurred for less than the Conversion Price on such date of the Dilutive
Issuance), then the Conversion Price shall be reduced to equal the Base Conversion Price. Such adjustment shall be made whenever such Common Stock or Common Stock Equivalents are issued. Notwithstanding the foregoing, no adjustment will be made
under this Section 5(b) in respect of an Exempt Issuance, and for avoidance of doubt, Dilutive Issuances shall not include any shares of Common Stock issued by the Company upon conversion of, or payment of interest on, the Debentures or the
exercise of any Warrant. The Company shall notify the Holder in writing, no later than 1 Business Day following the issuance of any Common Stock or Common Stock Equivalents subject to this Section 5(b), indicating therein the applicable
issuance price, or applicable reset price, exchange price, conversion price and other pricing terms (such notice, the “Dilutive Issuance Notice”). For purposes of clarification, whether or not the Company provides a Dilutive
Issuance Notice pursuant to this Section 5(b), upon the occurrence of any Dilutive Issuance, the Holder is entitled to receive a number of Conversion Shares based upon the Base Conversion Price on or after the date of such Dilutive Issuance,
regardless of whether the Holder accurately refers to the Base Conversion Price in the Notice of Conversion. 
 c)
Subsequent Rights Offerings. If the Company, at any time while the Debenture is outstanding, shall issue rights, options or warrants to all holders of Common Stock (and not to the Holders) entitling them to subscribe for or purchase shares of
Common Stock at a price per share that is lower than the VWAP on the record date 

  

 16 

 
referenced below, then the Conversion Price shall be multiplied by a fraction of which the denominator shall be the number of shares of the Common Stock
outstanding on the date of issuance of such rights or warrants plus the number of additional shares of Common Stock offered for subscription or purchase, and of which the numerator shall be the number of shares of the Common Stock outstanding on the
date of issuance of such rights or warrants plus the number of shares which the aggregate offering price of the total number of shares so offered (assuming delivery to the Company in full of all consideration payable upon exercise of such rights,
options or warrants) would purchase at such VWAP. Such adjustment shall be made whenever such rights or warrants are issued, and shall become effective immediately after the record date for the determination of stockholders entitled to receive such
rights, options or warrants. 
 d) Pro Rata Distributions. If the Company, at any time while this Debenture is
outstanding, distributes to all holders of Common Stock (and not to the Holders) evidences of its indebtedness or assets (including cash and cash dividends) or rights or warrants to subscribe for or purchase any security (other than the Common
Stock, which shall be subject to Section 5(b)), then in each such case the Conversion Price shall be adjusted by multiplying such Conversion Price in effect immediately prior to the record date fixed for determination of stockholders entitled
to receive such distribution by a fraction of which the denominator shall be the VWAP determined as of the record date mentioned above, and of which the numerator shall be such VWAP on such record date less the then fair market value at such record
date of the portion of such assets or evidence of indebtedness so distributed applicable to 1 outstanding share of the Common Stock as determined by the Board of Directors of the Company in good faith. In either case the adjustments shall be
described in a statement delivered to the Holder describing the portion of assets or evidences of indebtedness so distributed or such subscription rights applicable to 1 share of Common Stock. Such adjustment shall be made whenever any such
distribution is made and shall become effective immediately after the record date mentioned above. 
 e) Fundamental
Transaction. If, at any time while this Debenture is outstanding, (A) the Company effects any merger or consolidation of the Company with or into another Person, (B) the Company effects any sale of all or substantially all of its
assets in one transaction or a series of related transactions, (C) any tender offer or exchange offer (whether by the Company or another Person) is completed pursuant to which holders of Common Stock are permitted to tender or exchange their
shares for other securities, cash or property, or (D) the Company effects any reclassification 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 (in any such case, 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, the same kind and amount of securities, cash or property as it would have been entitled to receive upon the occurrence of such Fundamental Transaction
if it had been, immediately prior to such Fundamental Transaction, the holder 

  

 17 

 
of 1 share of Common Stock (the “Alternate Consideration”). 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 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. To the extent necessary to effectuate
the foregoing provisions, any successor to the Company or surviving entity in such Fundamental Transaction shall issue to the Holder a new debenture consistent with the foregoing provisions and evidencing the Holder’s right to convert such
debenture into Alternate Consideration. The terms of any agreement pursuant to which a Fundamental Transaction is effected shall include terms requiring any such successor or surviving entity to comply with the provisions of this Section 5(e)
and insuring that this Debenture (or any such replacement security) will be similarly adjusted upon any subsequent transaction analogous to a Fundamental Transaction. 
 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 mail 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. If the Company enters into a Variable Rate Transaction, despite
the prohibition set forth in the Purchase Agreement, the Company shall be deemed to have issued Common Stock or Common Stock Equivalents at the lowest possible conversion price at which such securities may be converted or exercised. 
 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 

  

 18 

 
the Company, of 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 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. The Holder is 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. 
 Section 6. Forced Conversion and Optional Redemption. 
 a) Forced Conversion. Notwithstanding anything herein to the contrary, if after the 30th Trading Day
following Effective Date, the VWAP for each of any 20 out of 30 consecutive Trading Days, which period shall have commenced only after the 30th
Trading Day following the Effective Date (such period the “Threshold Period”), exceeds $6.00 (subject to adjustment for reverse and forward stock splits, stock dividends, stock combinations and other similar transactions of the
Common Stock that occur after the Original Issue Date), the Company may, within 2 Trading Days after the end of any such Threshold Period, deliver a written notice to the Holder (a “Forced Conversion Notice” and the date such notice
is delivered to the Holder, the “Forced Conversion Notice Date”) to cause the Holder to convert all or part of the then outstanding principal amount of this Debenture plus, if so specified in the Forced Conversion Notice, accrued
but unpaid interest, liquidated damages and other amounts owing to the Holder under this Debenture, it being agreed that the “Conversion Date” for purposes of Section 4 shall be deemed to occur on the thirtieth Trading Day following
the Forced Conversion Notice Date (such thirtieth Trading Day, the “Forced Conversion Date”). The Company may not deliver a Forced Conversion Notice, and any Forced Conversion Notice delivered by the Company shall not be effective,
unless all of the Equity Conditions are met (unless waived in writing by the Holder) on each Trading Day occurring during the applicable Threshold Period through and including the later of the Forced Conversion Date and the Trading Day after the
date such Conversion Shares pursuant to such conversion are delivered to 

  

 19 

 
the Holder. Any Forced Conversion shall be applied ratably to all Holders based on their initial purchases of Debentures pursuant to the Purchase Agreement,
provided that any voluntary conversions by a Holder shall be applied against such Holder’s pro-rata allocation, thereby decreasing the aggregate amount forcibly converted hereunder if only a portion of this Debenture is forcibly converted. For
purposes of clarification, a Forced Conversion shall be subject to all of the provisions of Section 4, including, without limitation, the provision requiring payment of liquidated damages and limitations on conversions. 
 b) Optional Redemption at Election of Company. Subject to the provisions of
this Section 6, at any time after the Effective 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 22nd Trading Day following the Optional Redemption Notice Date (such date, the “Optional Redemption Date” and such redemption, the “Optional
Redemption”). The Optional Redemption Amount is payable in full on the Optional Redemption Date. The Company may 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 such 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. 
 c) 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 the Company shall have no further right to
exercise such Optional Redemption. The Holder may elect to convert the outstanding principal amount 

  

 20 

 
of this Debenture subject to a redemption under this Section 6 pursuant to Section 4 prior to actual payment in cash for such redemption 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 51% in principal amount of the then outstanding Debentures shall have otherwise given their written consent or waiver, the Company shall not, and shall not permit any of its subsidiaries
(whether or not a Subsidiary on the Original Issue Date) 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, any guarantee of such indebtedness; 
 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, the certificate of incorporation and bylaws, in any manner that materially and adversely affects any rights of the Holder; 
 d) repay, repurchase or offer to repay, repurchase or otherwise acquire more than a de minimis number of shares of its Common Stock
or Common Stock Equivalents other than as to (a) the Conversion Shares or Warrant Shares as permitted or required under the Transaction Documents and (b) 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 $100,000 for all officers and directors during the term of this Debenture; 
 e) pay cash dividends or distributions on any equity securities of the Company; 
 f) enter into any transaction with any Affiliate of the Company (other than any of the Company or Subsidiary) that would be required to be
disclosed in any public filing with the Commission, except for (i) any such transaction that 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), (ii) the establishment, modification or payment of reasonable and customary fees to Directors of the Company who are not officers or employees of any Company, (iii) the establishment or modification
of reasonable salaries, wages, and compensation plans for any officer or employee of the Company or any of its Subsidiaries, the making of payments to any of them thereunder, and the making, extension or modification of any loan or advance to any of
them, provided that in the case of the executive officers of the Company such salaries and compensation plans have been expressly approved by a majority of the 

  

 21 

 
disinterested directors of the Company (even if less than a quorum otherwise required for board approval), or (iv) the establishment, modification or
implementation of reasonable employment arrangements, stock option and purchase plans, and benefit programs for the directors, officers and employees of the Company and its Subsidiaries expressly approved by a majority of the disinterested directors
of the Company (even if less than a quorum otherwise required for board approval) and the resulting transactions thereunder; or 
 g) enter into any agreement effecting or committing to any of the foregoing. 
 Section 8. Events of Default.

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

i. any default in the payment of (A) the principal amount of any Debenture or (B) interest, liquidated damages and other
amounts owing to a Holder on any Debenture, as and when the same shall become due and payable (whether on a Conversion Date or the Maturity Date or by acceleration or otherwise) which default, solely in the case of an interest payment or other
default under clause (B) above, is not cured within 3 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 (xi) below) which failure is
not cured, if possible to cure, within the earlier to occur of (A) 5 Trading Days after notice of such failure sent by the Holder or by any other Holder and (B) 10 Trading Days after the Company has 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), which
default is not cured, if possible to cure, within the grace or cure period specified therein, or if none is so specified, within the earlier to occur of (A) 5 Trading Days after notice of such failure sent by the Holder or by any other Holder
and (B) 10 Trading Days after the Company has become aware of such failure; 
 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; 
  

 22 

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

 vi. the Company or any Subsidiary shall default on any of its obligations under any mortgage, credit agreement or other
facility, indenture agreement, factoring agreement or other instrument under which there may be issued, or by which there may be secured or evidenced, any indebtedness for borrowed money or money due under any long term capital lease or factoring
arrangement that (a) involves an obligation greater than $250,000, whether such indebtedness now exists or shall hereafter be created, and (b) results in such indebtedness becoming or being declared due and payable prior to the date on
which it would otherwise become due and payable; 
 vii. the Common Stock shall not be eligible for listing or quotation for
trading on a Trading Market and shall not be eligible to resume listing or quotation for trading thereon within five Trading Days; 
 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 40% 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.
a Registration Statement shall not have been declared effective by the Commission on or prior to the 210th calendar day after the Closing Date;

 x. if, during the Effectiveness Period (as defined in the Registration Rights Agreement), either (a) the effectiveness
of the Registration Statement lapses for any reason or (b) the Holder shall not be permitted to resell Registrable Securities (as defined in the Registration Rights Agreement) under the Registration Statement for a period of more than 20
consecutive Trading Days or 30 non-consecutive Trading Days during any 12 month period; provided, however, that if the Company is negotiating a merger, consolidation, acquisition or sale of all or substantially all of its assets or a
similar transaction and, in the written opinion of counsel to the Company, the Registration Statement would be required to be amended to include information concerning such pending transaction(s) or the parties thereto which information is not
available or may not be publicly disclosed at the time, the Company shall be permitted an additional 10 consecutive Trading Days during any 12 month period pursuant to this Section 8(a)(x); 
 xi. the Company shall fail for any reason to deliver certificates to a Holder prior to the tenth Trading Day after a Conversion Date or
any Forced 

  

 23 

 
Conversion Date pursuant to Section 4(d) 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; or 
 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 $250,000, and such judgment, writ or similar final
process shall remain unpaid, unvacated, unbonded or unstayed for a period of 45 calendar days. 
 b) Remedies Upon Event of
Default. If any Event of Default occurs and is continuing without being waived by the Holder or cured by the Company, the outstanding principal amount of this Debenture, plus accrued but unpaid interest, liquidated damages and other amounts
owing in respect thereof through the date of acceleration, shall become, at the Holder’s election, immediately due and payable in cash at the Mandatory Default Amount. Commencing 5 Trading 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, subject to Section 5.17
of the Purchase Agreement. 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, or sent by a nationally recognized overnight courier service, addressed to the Company, at the address set forth above, facsimile number             ,
Attention:                              or such other facsimile number or address as the Company
may specify for such purpose by notice to the Holder delivered in accordance with this Section 9. Any and all notices or other communications or deliveries to be provided by the Company hereunder shall be in writing and delivered personally, by
facsimile, or sent by a nationally recognized overnight courier service addressed to the Holder at the facsimile number or address of such Holder appearing on the signature page of the Purchase Agreement or in any 

  

 24 

 
transfer document delivered to the Company, as applicable, or such other facsimile number or address as such Holder may specify for such purpose by written
notice to the Company delivered in accordance with Section 9. 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 specified in this Section 9 prior to 5:30 p.m. (New York City time), (ii) the date immediately following the date of transmission, if such notice or communication is delivered via facsimile
at the facsimile number specified in this Section 9 between 5:30 p.m. (New York City time) and 11:59 p.m. (New York City time) on any date, (iii) the second Business Day following the date of timely delivered to a nationally recognized
overnight courier service, or (iv) upon actual receipt by the party to whom such notice is required to be given. Refusal to accept delivery shall constitute delivery. 
 b) Absolute Obligation. Except as expressly provided herein, no provision of this Debenture shall alter or impair the obligation of
the Company, which is absolute and unconditional, to pay the principal of, liquidated damages and accrued interest, as applicable, on this Debenture at the time, place, and rate, and in the coin or currency, herein prescribed. This Debenture is a
direct debt obligation of the Company. This 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, and a customary indemnity agreement reasonably satisfactory to the Company. 
 d) Governing Law. All questions concerning the construction, validity, enforcement and interpretation of this Debenture shall, to
the greatest extent permitted by applicable law, be governed by and construed and enforced in accordance with the internal laws of the State of New York and federal laws of the United States of America, without regard to any principles of conflicts
of law thereof that would defer to the substantive laws of any other jurisdiction. 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 

  

 25 

 
York Courts, or such New York Courts are improper or inconvenient venue for such proceeding. The preceding consents to New York governing law and
jurisdiction and venue in New York State's Supreme Court have been made by the parties in reliance (at least in part) on Sections 5-1401 and 5-1402 of the General Obligations Law of the State of New York, as amended (as and to the extent
applicable), and other applicable law. 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. In any action, suit or proceeding in any jurisdiction brought by any party against any other party, each party, knowingly and
intentionally and to the fullest extent permitted by applicable law, hereby absolutely, unconditionally, irrevocably and expressly waives forever trial by jury. If either party shall commence an action or proceeding to enforce any provisions of this
Debenture, then the prevailing party in such action or proceeding shall be reimbursed by the other party for its attorneys fees and other costs and expenses incurred in the investigation, preparation and prosecution of such action or proceeding.

 e) Waiver. Any waiver by the Company or the Holder of a breach of any provision of this Debenture shall not operate
as or be construed to be a waiver of any other breach of such provision or of any breach of any other provision of this Debenture. The failure of the Company or the Holder to insist upon strict adherence to any term of this Debenture on one or more
occasions shall not be considered a waiver or deprive that party of the right thereafter to insist upon strict adherence to that term or any other term of this Debenture. Any waiver by the Company or the Holder must be in writing. 
 f) Severability. If any provision of this Debenture is invalid, illegal or unenforceable, the balance of this Debenture shall
remain in effect, and if any provision is inapplicable to any Person or circumstance, it shall nevertheless remain applicable to all other Persons and circumstances. If it shall be found that any interest or other amount deemed interest due
hereunder violates the applicable law governing usury, the applicable rate of interest due hereunder shall automatically be lowered to equal the maximum rate of interest permitted under applicable law. The Company covenants (to the extent that it
may lawfully do so) that it shall not at any time insist upon, plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury law or other law which would prohibit or forgive the Company from paying all or
any portion of the principal of or interest on this Debenture as contemplated herein, wherever enacted, now or at any time hereafter in force, or which may affect the covenants or the performance of this indenture, 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 impeded 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. 
  

 26 

 g) 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. 
 h) 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. 
 i) Assumption. Any successor to the Company or any surviving entity in a Fundamental Transaction shall (i) assume, prior
to such Fundamental Transaction, all of the obligations of the Company under this Debenture and the other Transaction Documents pursuant to written agreements in form and substance satisfactory to the Holder (such approval not to be unreasonably
withheld or delayed) and (ii) issue to the Holder a new debenture of such successor entity evidenced by a written instrument substantially similar in form and substance to this Debenture, including, without limitation, having a principal amount
and interest rate equal to the principal amount and the interest rate of this Debenture and having similar ranking to this Debenture, which shall be satisfactory to the Holder (any such approval not to be unreasonably withheld or delayed). The
provisions of this Section 9(i) shall apply similarly and equally to successive Fundamental Transactions and shall be applied without regard to any limitations of this Debenture. 
 j) Secured Obligation. The obligations of the Company under this Debenture and the other Debentures are (i) guarantied
pursuant to the Subsidiary Guarantee dated as of February     , 2007, from the Subsidiaries of the Company to and with the Purchasers (as defined therein), as the same may be supplemented, modified, amended, restated or
replaced from time to time in the manner provided therein (the “Subsidiary Guarantee”), and (ii) secured (and the obligations of the Subsidiary Guarantee also are secured) by substantially all personal assets and properties of
the Company and each Subsidiary pursuant to the Security Agreement dated as of February     , 2007, between the Company, the Subsidiaries of the Company, the Agent and the Secured Parties (as defined therein), as the same
may be supplemented, modified, amended, restated or replaced from time to time in the manner provided therein (the “Security Agreement”). 
 k) Purchase Agreement. This Debenture is one of the Debentures referred to in the Purchase Agreement and other Transaction Documents. All of the applicable provisions of the Purchase Agreement, including
(without limitation) any provision for limiting the maximum rate of interest payable hereunder, are incorporated herein by reference and made a part hereof. In the event that any specific provision of this Debenture conflicts or is inconsistent with
any specific term or provision contained in the Purchase Agreement, the specific term or provision of the Purchase Agreement shall control and be given effect. However, this Agreement contains provisions that are in addition to those contained in
the Purchase Agreement, which each are cumulative with and not alternatives to each other, and which shall not be deemed or construed to be in conflict or inconsistent with the Purchase Agreement because they are not contained in it. 
  

 27 

 l) Amendment; Holder is a Party. This Debenture may not be supplemented, modified,
amended, restated, waived, extended, discharged or terminated orally. This Debenture may only be (i) supplemented, modified, amended or restated in a writing signed by the Company and the Holder (or in the case of a restated or replacement
Debenture, consented to in a separate writing by the Holder if the Holder elects not to sign such Debenture) and (ii) waived, extended, discharged or terminated in a writing signed by the party against whom such waiver, extension, discharge or
termination would have to be enforced. By accepting this Debenture, the Holder acknowledges and agrees that the Holder (A) is a “party” and one of the “parties” for the purposes of this Debenture and (A) is
contractually bound by the provisions hereof applicable to it as a party or one of the parties. 
 ********************* 
  

 28 

 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. 
  

			
	STAR ENERGY CORPORATION
		
	By:	 	  

	Name:	 	
	Title:	 	

  

 29 

 ANNEX A 
 NOTICE OF CONVERSION 
 The undersigned hereby elects to convert principal under the 8% Secured
Convertible Debenture due February     , 2010 of Star Energy Corporation, a Nevada corporation (the “Company”), into shares of common stock, par value $.001 per share (the “Common Stock”),
of the Company according to the conditions hereof, as of the date written below. If shares of Common Stock are to be issued in the name of a person other than the undersigned, the undersigned will pay all transfer taxes payable with respect thereto
and is delivering herewith such certificates and opinions as reasonably requested by the Company in accordance therewith. No fee will be charged to the holder for any conversion, except for such transfer taxes, if any. 
 By the delivery of this Notice of Conversion the undersigned represents and warrants to the Company that its ownership of the Common Stock does not
exceed the amounts specified under Section 4 of this Debenture, as determined in accordance with Section 13(d) of the Exchange Act. 
 The undersigned agrees to comply with the prospectus delivery requirements under the applicable securities laws in connection with any transfer of the aforesaid shares of Common Stock. 
 Conversion calculations: 
  

			
		  	Date to Effect Conversion:
		
		  	Principal Amount of Debenture to be Converted:
		
		  	Payment of Interest in Common Stock      yes      no
		
		  	 If yes, $             of Interest Accrued on Account of Conversion at
Issue.

		
		  	Number of shares of Common Stock to be issued:
		
		  	Signature:
		
		  	Name:
		
		  	Address:

  

 30 

 Schedule 1 
 CONVERSION SCHEDULE 
 The 8% Secured Convertible Debentures due on February     , 2010 in
the aggregate principal amount of $             are issued by Star Energy 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

		 		 		 	
		 		 		 	
		 		 		 	
		 		 		 	
		 		 		 	
		 		 		 	
		 		 		 	
		 		 		 	
		 		 		 	

  

 31Waiver and Consent dated 10/11/07 with Enable Capital Management and affiliates

 Exhibit 4.1(b) 
 WAIVER AND CONSENT 
 THIS WAIVER AND CONSENT is entered into this 11th day of October, 2007, by and
between Enable Capital Management (“Enable”) and Star Energy corporation (“Star”). 
 WHEREAS,
Enable has entered into that certain Securities Purchase Agreement dated as of February 9, 2007 (the “Purchase Agreement”), by and among Star Energy Corporation (“Star”) and certain purchasers referenced
therein (each, a “Purchaser”, collectively, the “Purchasers”), such Purchasers being Enable and Wolverine Asset Management LLC, on its own behalf and on behalf of its affiliates, Wolverine Convertible Arbitrage Fund
Trading Ltd. and GPC LX LLC (collectively, “Wolverine”) (each of Star, Wolverine and Enable may hereafter be referred to as a “Party”, collectively, the “Parties”); 
 WHEREAS, pursuant to the Purchase Agreement, the Parties entered into certain related documents, instruments, agreements and notes dated as of
February 9, 2007, among them a Registration Rights Agreement, a Security Agreement, a Subsidiary Guarantee, a Warrant, and an 8% Secured Convertible Debenture (the “Debenture”) issued by Star to each of Wolverine and Enable
(collectively, the “Convertible Debt Documents”); 
 WHERAS, pursuant to the terms of the Registration Rights
Agreement, Star was required to file a Registration Statement (as defined in the Registration Rights Agreement) by the earlier of April 15, 2007, of fifteen (15) calendar days following the date upon which Star filed its Form 10-KSB for the year
ended December 31, 2006 (the “Filling Date”); 
 WHEREAS, such Registration Statement not having been filed, an Event
(as defined in Section 2(b)(i) of the Registration Rights Agreement) was triggered, which Event entitled each Purchaser to a penalty payment in the amount of 1.5% of the principal amount to which such Purchaser is entitled until registration
becomes effective; 
 WHEREAS, Section 4(1) of the Security Agreement and 7(b) of the Debenture prohibit Star from encumbering
any Collateral (as defined in the Security Agreement), including but not limited to, by imposition of transfer restrictions over any such Collateral, without the prior written consent of a Majority in Interest (as defined in the Security Agreement)
of the Purchasers; 
 WHEREAS, any equity interests acquired by Star after February 9, 2007, including but not limited to, any
equity interests owned by Star in Bukovyna Oil and Gas Company, LLC (“Bukovyna LLC”), fall within the definition of Collateral for purposes of the Convertible Debt Documents; and 
 WHEREAS, in order to consummate the acquisition of development rights over certain oil and gas fields situated in the Bukovyna region of Ukraine,
Star is proposing to enter into a Loan 

 
Agreement by and among Star, Cosmonite Limited, and IFS International LLC (the “Loan Transaction”) pursuant to which Star would be precluded
from treating any equity interests it owns in Bukovyna LLC as Collateral under the Convertible Debt Documents. 
 NOW, THEREFORE, for
good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, 
  

	 	1.	Enable consents to the following: 

 (a) the exclusion of
any current interests owned by Star in Bukovyna LLC from the definition of Collateral for purposes of the Convertible Debt Documents as at the closing of the Loan Transaction; 
 (b) the waiver by Enable of any rights it may have to the adjustment of the Conversion Price pursuant to Section 5(b) of the Debenture and the
Exercise Price pursuant to Section 3(c) of the Warrant as a result of certain terms of the Loan Transaction, provided, however, that: (i) the Conversion Price set forth in the Debenture is herewith adjusted to $.75 per share
of Common Stock (as defined in the Securities Purchase Agreement) and (ii) the Exercise Price set forth in the Warrant is herewith adjusted to $.75. in each case for a period of three (3) years from the date hereof. 
 (c) the waiver by Enable of its rights to the penalty payment referenced in the fourth recital hereto calculated at a rate of 1.5% of the principal
amount to which Enable is entitled until registration and the substitution for such penalty payment of 100,000 shares of Common Stock; and 
 (d) the waiver by Enable of any future late registration penalty payments that would otherwise apply, subject to Star’s undertaking to file the Registration Statement no later than six (6) calendar months from the date hereof
using its reasonable best efforts (the “Drop Dead Date”); provided, however, that the penalty provisions referenced in the fourth recital hereto shall be reinstated in the event of any failure to file the Registration
Statement by the Drop Dead Date, subject to any such penalties being capped at 10% per annum based upon the principal amount due to Enable under the Debenture, calculated on the basis of a 360-day year consisting of twelve 30 calendar day
periods, with the calculation of penalties payable on the outstanding principal balance commencing on the first day immediately following the Drop Dead Date and continuing to accrue until the day upon which the Registration Statement has been filed.

 2. Star represents and warrants that, as at the date hereof, Star is the legal and beneficial owner of 70% of the equity interests in
Cosmonite Limited; provided, however, that Star’s equity interests in Cosmonite Limited could be reduced to 51% should IFS International LLC elect to increase its investment in Cosmonite Limited pursuant to the terms of the Loan Transaction.

 3. Except as to matters set forth herein, the terms and conditions of all of the Convertible Debt
Documents remain in full force and effect. 
 4. This Waiver and Consent is governed by the laws of the State of New York, notwithstanding
its conflict of laws rules or any other principles that would trigger the application of any other law. 
 IN WITNESS WHEREOF, each of
Enable and Star has caused this Waiver and Consent to be duly executed on the day and year first written above. 
  

			
	 ENABLE CAPITAL MANAGEMENT LLC

	 On behalf of:

	
	 ENABLE GROWTH PARTNERS LP

	 ENABLE OPPORTUNITY PARTNERS LP

	 PIERCE DIVERSIFIED STRATEGY MASTER

	 FUND LLC, ena

		
	By:	 	 

	Name:	 	Brendan O’Neil
	Title:	 	Principal and Portfolio Manager
	
	STAR ENERGY CORPORATION
		
	By:	 	 

	Name:	 	Michael Kravchenko
	Title:	 	Chief Financial Officer

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