Document:

Blueprint

 

AMENDMENT AGREEMENT

 

This
Amendment Agreement (the “Agreement”), dated as of
November 20, 2017, is entered into by and between Cantabio
Pharmaceuticals Inc., a Delaware corporation (the
“Company”), and YA II PN,
Ltd. (the “Note
Holder”) and is the basis for the amendment of three
convertible notes (as discussed below) the Company issued to the
Note Holder.

 

BACKGROUND

 

(A) 

Pursuant a
Securities Purchase Agreement, dated January 25,
2017 and as amended and restated on May 3, 2017 (the
“SPA”),
the Company agreed to issue and sell to YA II PN, Ltd. (the
“Buyer”), and the Buyer
agreed to purchase from the Company, certain convertible debentures
for an aggregate subscription amount of $600,000, on the terms and
conditions set forth therein.

 

(B) 

On January 25,
2017, the Buyer subscribed and paid for a Convertible Debenture
(the “First
Convertible Debenture”) in the principal Amount of
$300,000, of which all $300,000 of principal (plus accrued and
unpaid interest thereon) remains outstanding.

 

(C) 

On March 2, 2017,
the Buyer subscribed and paid for a Convertible Debenture (the
“Second Convertible
Debenture”) in the principal Amount of $150,000, of
which all $150,000 of principal (plus accrued and unpaid interest
thereon) remains outstanding.

 

(D) 

On May 3, 2017, the
Buyer subscribed and paid for a Convertible Debenture (the
“Third Convertible
Debenture” and collectively with the First Convertible
Debenture, the Second Convertible Debenture, and any subsequent
debentures issued in exchange of any of the foregoing, the
“Convertible
Debentures”) in the principal Amount of $150,000, of
which the Buyer has converted $100,000 of principal and $3,174.65
of accrued interest on the Third Debenture into shares of common
stock and $50,000 of principal (plus accrued and unpaid interest
thereon) remains outstanding.

 

(E) 

The Convertibles
Debentures each have a maturity date of January 25, 2018, and the
Company and the Note Holder wish to extend such maturity dates to
November 20, 2018.

 

(F) 

The Convertibles
Debentures each have a Floor Price of $0.05, and the Company and
the Note Holder wish to reduce the Floor Price to
$0.01.

 

AGREED
TERMS

 

1.            

Definitions and interpretation

 

Capitalized terms
not otherwise defined herein shall have the meanings set forth in
the Convertible Debentures.

 

2.            

Extension of Maturity Date

 

The
Company and the Note Holder agree to extend the Maturity Date of
each Convertible Debenture for an additional twelve months so that
the Maturity Date of each Convertible Debenture is now November 20,
2018.

 

3.            

Reduction to Floor Price

 

The
Company and the Note Holder agree that the definition of the Floor
Price in Section 16(j) of each of the Convertible Debentures shall
be deleted in its entirety and replaced with the new definition set
froth below:

 

Section
16(j)                                 

“Floor Price” means $0.01
per share.

 

4.            

Representations and warranties

 

Each
party to this Agreement represents and warrants to the other as of
the date of this Agreement that:

 

(a)            

it has the
requisite corporate power and authority to enter into this
Agreement and to consummate the transactions contemplated by this
Agreement;

 

(b)            

it has taken all
necessary corporate actions to authorize the execution, delivery
and performance of this Agreement and no further action is required
by it, its Board of Directors or managers or its stockholders or
members in connection therewith; and

 

(c)            

the obligations
assumed by it in this Agreement are legal, valid, and enforceable
obligations binding on it in accordance with its
terms.

 

5.            

Counterparts and delivery

 

This
Agreement may be executed in two or more counterparts, all of which
when taken together shall be considered one and the same agreement
and shall become effective when counterparts have been signed by
each party and delivered to each other party, it being understood
that the parties need not sign the same counterpart. In the event
that any signature is delivered by facsimile transmission or by
e-mail delivery of a “.pdf” format data file, such
signature shall create a valid and binding obligation of the party
executing (or on whose behalf such signature is executed) with the
same force and effect as if such facsimile or “.pdf”
signature page were an original thereof.

 

6.            

Governing law

 

This
Agreement shall be governed by and construed and enforced in
accordance with the internal laws of the State of New York, without
regard to the principles of conflicts of law thereof. Each party
agrees that all legal proceedings concerning the interpretations,
enforcement and defense of the transactions contemplated by this
Agreement (whether brought against a party hereto or its respective
affiliates, directors, officers, shareholders, partners, members,
employees or agents) shall be commenced exclusively in the state
and federal courts sitting in the City of New York. Each party
hereby irrevocably submits to the exclusive jurisdiction of the
state and federal courts sitting in the City of New York, Borough
of Manhattan for the adjudication of any dispute hereunder or in
connection herewith or with any transaction contemplated hereby or
discussed herein, and hereby irrevocably waives, and agrees not to
assert in any suit, action or proceeding, any claim that it is not
personally subject to the jurisdiction of any such court, that such
suit, action or proceeding is improper or is an inconvenient venue
for such proceeding. Each party hereby irrevocably waives personal
service of process and consents to process being served in any such
suit, action or proceeding by mailing a copy thereof via registered
or certified mail or overnight delivery (with evidence of delivery)
to such party at the address in effect for notices to it under the
Securities Purchase Agreement 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
law.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

 

 

 

IN WITNESS WHEREOF, the Company and the
Holder have caused this Extension Agreement to be signed by their
duly authorized officers.

 

 

 

 

 

CANTABIO
PHARMACEUTICALS INC.

 

 

 

By:           

 

Name:

 

Title:                      

 

 

 

 

 

 

 

	
 

	

YA II PN, LTD.

 

	
 

	

By:            Yorkville
Advisors Global, LP

 

	
 

	

Its:            Investment
Manager

 

	
 

	
 

	
 

	

       By:
Yorkville Advisors Global II, LLC

 

	
 

	

       Its:
General Partner

 

	
 

	
 

	
 

	

       By:                       __________________________

 

	
 

	

       Name:

 

	
 

	

       Title:Blueprint

 

NEITHER THIS DEBENTURE NOR THE SECURITIES INTO WHICH THIS DEBENTURE
IS CONVERTIBLE HAVE BEEN REGISTERED WITH THE SECURITIES AND
EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE.
THESE SECURITIES HAVE BEEN SOLD 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.

 

CANTABIO PHARMACEUTICALS INC.

 

Secured Convertible Debenture

 

	

 Principal
Amount:                                            $[________]

Original Issuance Date: [________]

Debenture Number: [________]

 

FOR VALUE RECEIVED, CANTABIO
PHARMACEUTICALS INC., a Delaware corporation (the "Company"), hereby promises to
pay to the order of YA II PN, Ltd., or its registered assigns (the
"Holder") the
amount set out above as the Principal Amount (as reduced pursuant
to the terms hereof pursuant to redemption, conversion or
otherwise, the "Principal") when due, whether
upon the Maturity Date (as defined below), acceleration, redemption
or otherwise (in each case in accordance with the terms hereof) and
to pay interest ("Interest") on any outstanding
Principal at the applicable Interest Rate from the date set out
above as the Original Issuance Date (the "Issuance Date") until the same
becomes due and payable, whether upon an Interest Date (as defined
below), the Maturity Date or acceleration, conversion, redemption
or otherwise (in each case in accordance with the terms hereof).
This Secured Convertible Debenture (including all debentures issued
in exchange, transfer or replacement hereof, this "Debenture") was issued pursuant
to the Securities Purchase Agreement dated November 20, 2017, (the
“Securities Purchase
Agreement”) between the Company and the Buyers listed
on the Schedule of Buyers attached thereto. Certain capitalized
terms used herein are defined in Section 16.

 

(1) GENERAL
TERMS

 

(a) Maturity Date. The
"Maturity Date"
shall be [one year from original issuance date], as may be extended
at the option of the Holder.

 

(b) Interest Rate and Payment of
Interest. Interest shall accrue on the outstanding principal
balance hereof at an annual rate equal to 5% (“Interest Rate”). Interest
shall be calculated on the basis of a 365-day year and the actual
number of days elapsed, to the extent permitted by applicable
law.

 

(c) Monthly Payments. If, any time
after the 6 month anniversary of the Issuance Date, and from time
to time thereafter, the daily VWAP is less than the Floor Price for
a period of 20 consecutive Trading Days (the last such day of each
such occurrence, a “Triggering Date”), then
the Company shall make monthly payments beginning on the last
calendar day of the month when the Triggering Date occurred. Each
monthly payment shall be in an amount equal to the sum of (i) the
Principal Amount outstanding as of the Triggering Date divided by
the number of such monthly payments until the Maturity Date, (ii)
the Redemption Premium (as defined below) in respect of such
Principal Amount, and (iii) accrued and unpaid interest hereunder
as of each payment date. Each monthly payment obligation shall be
reduced by any amounts converted since the last monthly payment.
The obligation of the Company to make monthly payments hereunder
shall cease if any time after the Triggering Date the daily VWAP is
greater than the Floor Price for a period of 20 consecutive Trading
Days, unless a subsequent Triggering Date occurs. The Company may,
no more than twice, obtain a thirty (30) day deferral of a monthly
payment due under this Section 1(c) through the payment of a
deferral fee in the amount equal to ten percent (10%) of the total
amount of such monthly payment (each, a “Deferral Payment”). Each
Deferral Payment may be paid by the issuance of such number of
shares as is equal to the applicable Deferral Payment divided by a
price per share equal to 93% of the average of the 4 lowest daily
VWAPs during the 10 consecutive Trading Days immediately preceding
the due date in respect of such monthly payment begin deferred,
provided that such shares issued will be immediately freely
tradable shares in the hands of the Holder.

 

(d) Security. This Debenture is secured
by a grant of a security interest as set forth in the Securities
Purchase Agreement.

 

(e) Redemption. The Company at its
option shall have the right to redeem (“Optional Redemption”) a
portion or all amounts outstanding under this Debenture prior to
the Maturity Date provided. The Company shall pay an amount equal
to the principal amount being redeemed plus a redemption premium
(“Redemption
Premium”) equal to 20% of the Principal amount being
redeemed, and accrued Interest, (collectively referred to as the
“Redemption
Amount”). In order to make a redemption pursuant to
this Section, the Company shall first provide written notice to the
Holder of its intention to make a redemption (the
“Redemption
Notice”) setting forth the amount of Principal it
desires to redeem. After receipt of the Redemption Notice the
Holder shall have 5 Business Days to elect to convert all or any
portion of this Debenture, subject to the limitations set forth
herein. On the 6th Business Day after the Redemption Notice, the
Company shall deliver to the Holder the Redemption Amount with
respect to the Principal amount redeemed after giving effect to
conversions effected during the 5 Business Day period.

 

(2) EVENTS OF DEFAULT.

 

(a) An
“Event of
Default”, wherever used herein, means any one of the
following events (whatever the reason and whether it 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) the Company's
failure to pay to the Holder any amount of Principal, Interest, or
other amounts when and as due under this Debenture or any other
Transaction Document within five (5) Business Days after such
payment is due;

 

(ii) The
Company or any subsidiary of the Company shall commence, or there
shall be commenced against the Company or any subsidiary of the
Company under any applicable bankruptcy or insolvency laws as now
or hereafter in effect or any successor thereto, or the Company or
any subsidiary of the Company commences any other proceeding under
any reorganization, arrangement, adjustment of debt, relief of
debtors, dissolution, insolvency or liquidation or similar law of
any jurisdiction whether now or hereafter in effect relating to the
Company or any subsidiary of the Company or there is commenced
against the Company or any subsidiary of the Company any such
bankruptcy, insolvency or other proceeding which remains
undismissed for a period of 61 days; or the Company or any
subsidiary of the Company is adjudicated insolvent or bankrupt; or
any order of relief or other order approving any such case or
proceeding is entered; or the Company or any subsidiary of the
Company suffers any appointment of any custodian, private or court
appointed receiver or the like for it or any substantial part of
its property which continues undischarged or unstayed for a period
of sixty one (61) days; or the Company or any subsidiary of the
Company makes a general assignment for the benefit of creditors; or
the Company or any subsidiary of the Company shall fail to pay, or
shall state that it is unable to pay, or shall be unable to pay,
its debts generally as they become due; or the Company or any
subsidiary of the Company shall call a meeting of its creditors
with a view to arranging a composition, adjustment or restructuring
of its debts; or the Company or any subsidiary of the Company shall
by any act or failure to act expressly indicate its consent to,
approval of or acquiescence in any of the foregoing; or any
corporate or other action is taken by the Company or any subsidiary
of the Company for the purpose of effecting any of the
foregoing;

 

(iii) The
Company or any subsidiary of the Company shall default in any of
its obligations under any other debenture or any mortgage, credit
agreement or other facility, indenture agreement, factoring
agreement or other instrument under which there may be issued, or
by which there may be secured or evidenced any indebtedness for
borrowed money or money due under any long term leasing or
factoring arrangement of the Company or any subsidiary of the
Company in an amount exceeding $100,000, whether such indebtedness
now exists or shall hereafter be created and such default shall
result in such indebtedness becoming or being declared due and
payable and such default is not cured within five (5) Business
Days;

 

(iv) The
Common Stock shall cease to be quoted or listed for trading, fail
to have a bid price or VWAP, or fail to maintain a trading market
on any Primary Market, for a period of 10 consecutive Trading
Days;

 

(v) The Company or any
subsidiary of the Company shall be a party to any Change of Control
Transaction (as defined in Section 16) unless in connection with
such Change of Control Transaction this Debenture is
retired;

 

(vi) the
Company's (A) failure to cure a Conversion Failure by delivery of
(I) the required number of shares of Common Stock or (II) the
Buy-In Price within five (5) Business Days after the applicable
Conversion Failure or (B) notice, written or oral, to any holder of
the Debentures, including by way of public announcement, at any
time, of its intention not to comply with a request for conversion
of any Debentures into shares of Common Stock that is tendered in
accordance with the provisions of the Debentures, other than
pursuant to Section 4(c);

 

(vii) The
Company shall fail for any reason to deliver the payment in cash
pursuant to a Buy-In (as defined herein) within five (5) Business
Days after such payment is due;

 

(viii) The
Company shall fail to observe or perform any other material
covenant, agreement or warranty contained in, or otherwise commit
any material breach or default of any provision of this Debenture
(except as may be covered by Section 2(a)(i) through 2(a)(vii)
hereof) or any Transaction Document (as defined in Section 16)
which is not cured within the time prescribed.

 

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

 

(b) During the time
that any portion of this Debenture is outstanding, if any Event of
Default has occurred and is continuing, the full unpaid Principal
amount of this Debenture, together with interest and other amounts
owing in respect thereof, to the date of acceleration shall become
at the Holder's election, immediately due and payable in cash.
Furthermore, in addition to any other remedies, the Holder shall
have the right (but not the obligation) to convert this Debenture
(subject to the beneficial ownership limitations set out in Section
3(d)) at any time after (x) an Event of Default (provided that such
Event of Default is continuing) or (y) the Maturity Date at the
Default Conversion Price. The Holder need not provide and the
Company hereby waives any presentment, demand, protest or other
notice of any kind, (other than required notice of conversion) and
the Holder may immediately enforce any and all of its rights and
remedies hereunder and all other remedies available to it under
applicable law. Such declaration may be rescinded and annulled by
Holder at any time prior to payment hereunder. No such rescission
or annulment shall affect any subsequent Event of Default or impair
any right consequent thereon.

 

(3) CONVERSION OF
DEBENTURE.                                                                            This
Debenture shall be convertible into shares of the Company's Common
Stock, on the terms and conditions set forth in this Section
3.

 

(a) Conversion Right. Subject to
the provisions of Section 3(c), at any time or times on or after
the Issuance Date, the Holder shall be entitled to convert any
portion of the outstanding and unpaid Conversion Amount (as defined
below) into fully paid and nonassessable shares of Common Stock in
accordance with Section 3(b), at the Conversion Rate (as defined
below). The number of shares of Common Stock issuable upon
conversion of any Conversion Amount pursuant to this Section 3(a)
shall be determined by dividing (x) such Conversion Amount by (y)
the Conversion Price (the "Conversion Rate"). The Company
shall not issue any fraction of a share of Common Stock upon any
conversion. If the issuance would result in the issuance of a
fraction of a share of Common Stock, the Company shall round such
fraction of a share of Common Stock up to the nearest whole share.
The Company shall pay any and all transfer, stamp and similar taxes
that may be payable with respect to the issuance and delivery of
Common Stock upon conversion of any Conversion Amount.

 

(i) "Conversion Amount" means the
portion of the Principal and accrued Interest to be converted,
redeemed or otherwise with respect to which this determination is
being made.

 

(b) "Conversion Price" means, as of
any Conversion Date (as defined below) or other date of
determination the lower of (i) $0.10 or (ii) 93% of the average of
the 3 lowest daily VWAPs during the 10 consecutive Trading Days
immediately preceding the Conversion Date or other date of
determination, but not lower than the Floor Price (the
“Conversion
Price”). The Conversion Price shall be adjusted from
time to time for any stock splits or stock dividends and pursuant
to the other terms and conditions of this Debenture.

 

(c) Mechanics of
Conversion.

 

(i) Optional Conversion. To convert
any Conversion Amount into shares of Common Stock on any date (a
"Conversion Date"),
the Holder shall (A) transmit by facsimile (or otherwise deliver),
for receipt on or prior to 11:59 p.m., New York Time, on such date,
a copy of an executed notice of conversion in the form attached
hereto as Exhibit I
(the "Conversion
Notice") to the Company and (B) if required by Section
3(b)(iv), surrender this Debenture to a nationally recognized
overnight delivery service for delivery to the Company (or an
indemnification undertaking reasonably satisfactory to the Company
with respect to this Debenture in the case of its loss, theft or
destruction). On or before the third Business Day following the
date of receipt of a Conversion Notice (the "Share Delivery Date"), the
Company shall (X) if legends are not required to be placed on
certificates of Common Stock and provided that the Transfer Agent
is participating in the Depository Trust Company's ("DTC") Fast Automated Securities
Transfer Program, credit such aggregate number of shares of Common
Stock to which the Holder shall be entitled to the Holder's or its
designee's balance account with DTC through its Deposit Withdrawal
Agent Commission system or (Y) if the Transfer Agent is not
participating in the DTC Fast Automated Securities Transfer
Program, issue and deliver to the address as specified in the
Conversion Notice, a certificate, registered in the name of the
Holder or its designee, for the number of shares of Common Stock to
which the Holder shall be entitled which certificates shall not
bear any restrictive legends unless required pursuant to rules and
regulations of the Commission. If this Debenture is physically
surrendered for conversion and the outstanding Principal of this
Debenture is greater than the Principal portion of the Conversion
Amount being converted, then the Company shall as soon as
practicable and in no event later than three (3) Business Days
after receipt of this Debenture and at its own expense, issue and
deliver to the holder a new Debenture representing the outstanding
Principal not converted. The Person or Persons entitled to receive
the shares of Common Stock issuable upon a conversion of this
Debenture shall be treated for all purposes as the record holder or
holders of such shares of Common Stock upon the transmission of a
Conversion Notice.

 

(ii) Company's
Failure to Timely Convert. If within three (3) Trading Days
after the Company's receipt of the facsimile copy of a Conversion
Notice the Company shall fail to issue and deliver a certificate to
the Holder or credit the Holder's balance account with DTC for the
number of shares of Common Stock to which the Holder is entitled
upon such holder's conversion of any Conversion Amount (a
"Conversion
Failure"), and if on or after such Trading Day the Holder
purchases (in an open market transaction or otherwise) Common Stock
to deliver in satisfaction of a sale by the Holder of Common Stock
issuable upon such conversion that the Holder anticipated receiving
from the Company (a "Buy-In"), then the Company
shall, within three (3) Business Days after the Holder's request
and in the Holder's discretion, either (i) pay cash to the Holder
in an amount equal to the Holder's total purchase price (including
brokerage commissions and other out of pocket expenses, if any) for
the shares of Common Stock so purchased (the "Buy-In Price"), at which point the Company's
obligation to deliver such certificate (and to issue such Common
Stock) shall terminate, or (ii) promptly honor its obligation to
deliver to the Holder a certificate or certificates representing
such Common Stock and pay cash to the Holder in an amount equal to
the excess (if any) of the Buy-In Price over the product of (A)
such number of shares of Common Stock, times (B) the Closing Bid
Price on the Conversion Date.

 

(iii) Book-Entry.
Notwithstanding anything to the contrary set forth herein, upon
conversion of any portion of this Debenture in accordance with the
terms hereof, the Holder shall not be required to physically
surrender this Debenture to the Company unless (A) the full
Conversion Amount represented by this Debenture is being converted
or (B) the Holder has provided the Company with prior written
notice (which notice may be included in a Conversion Notice)
requesting reissuance of this Debenture upon physical surrender of
this Debenture. The Holder and the Company shall maintain records
showing the Principal and Interest converted and the dates of such
conversions or shall use such other method, reasonably satisfactory
to the Holder and the Company, so as not to require physical
surrender of this Debenture upon conversion.

 

(d) Limitations on
Conversions.

 

(i) Beneficial Ownership. The
Holder shall not have the right to convert any portion of this
Debenture or receive shares of Common Stock as payment of interest
hereunder to the extent that after giving effect to such conversion
or receipt of such interest payment, the Holder, together with any
affiliate thereof, would beneficially own (as determined in
accordance with Section 13(d) of the Exchange Act and the rules
promulgated thereunder) in excess of 4.99% of the number of shares
of Common Stock outstanding immediately after giving effect to such
conversion or receipt of shares as payment of interest. Since the
Holder will not be obligated to report to the Company the number of
shares of Common Stock it may hold at the time of a conversion
hereunder, unless the conversion at issue would result in the
issuance of shares of Common Stock in excess of 4.99% of the then
outstanding shares of Common Stock without regard to any other
shares which may be beneficially owned by the Holder or an
affiliate thereof, the Holder shall have the authority and
obligation to determine whether the restriction contained in this
Section will limit any particular conversion hereunder and to the
extent that the Holder determines that the limitation contained in
this Section applies, the determination of which portion of the
principal amount of this Debenture is convertible shall be the
responsibility and obligation of the Holder. If the Holder has
delivered a Conversion Notice for a principal amount of this
Debenture that, without regard to any other shares that the Holder
or its affiliates may beneficially own, would result in the
issuance in excess of the permitted amount hereunder, the Company
shall notify the Holder of this fact and shall honor the conversion
for the maximum principal amount permitted to be converted on such
Conversion Date in accordance with Section 3(a) and, any principal
amount tendered for conversion in excess of the permitted amount
hereunder shall remain outstanding under this Debenture. The
provisions of this Section may be waived by a Holder (but only as
to itself and not to any other Holder) upon not less than 65 days
prior notice to the Company. Other Holders shall be unaffected by
any such waiver.

 

(e) Other Provisions.

 

(i) The Company shall
at all times reserve and keep available out of its authorized
Common Stock the full number of shares of Common Stock issuable
upon conversion of all outstanding amounts under this Debenture;
and within three (3) Business Days following the receipt by the
Company of a Holder's notice that such minimum number of Underlying
Shares is not so reserved, the Company shall promptly reserve a
sufficient number of shares of Common Stock to comply with such
requirement.

 

(ii) All
calculations under this Section 3 shall be rounded to the nearest
$0.0001 or whole share.

 

(iii) The
Company covenants that it will at all times reserve and keep
available out of its authorized and unissued shares of Common Stock
solely for the 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, not
less than such number of shares of the Common Stock as shall be
issuable (taking into account the adjustments and restrictions set
forth herein) 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 and validly authorized, issued
and fully paid, nonassessable and, if the Underlying Shares
Registration Statement has been declared effective under the
Securities Act, registered for public sale in accordance with such
Underlying Shares Registration Statement.

 

(iv) Nothing
herein shall limit a Holder's right to pursue actual damages or
declare an Event of Default pursuant to Section 2 herein for the
Company’s failure to deliver certificates representing shares
of Common Stock upon conversion within the period specified herein
and such Holder shall have the right to pursue all remedies
available to it at law or in equity including, without limitation,
a decree of specific performance and/or injunctive relief, in each
case without the need to post a bond or provide other security. 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) Conversion Costs.
The Company agrees to reimburse the Holder for all reasonable costs
incurred by the Holder in connection with the conversion of this
Debenture and the resale of the underlying Common Stock, which
shall include costs paid to the broker or clearing firm selected by
the Holder to deposit the underlying shares of Common Stock
(including any compliance review costs, legal costs, or other
expenses), costs incurred in connection with any legal opinions
paid for by the Holder in connection with sale of underlying shares
of Common Stock (provided that the Company has first had the
opportunity to obtain such a legal opinion on behalf of the
Holder), and brokerage costs and commissions incurred by the Holder
in connection with the resale of the underlying shares of Common
Stock. The Holder shall notify the Company of any such costs and
expenses it incurs that are referred to in this section from time
to time and all amounts owed hereunder shall be paid by the Company
on the Maturity Date.

 

(4) Adjustments
to Conversion Price

 

(a) Other Corporate Events. In
addition to and not in substitution for any other rights hereunder,
prior to the consummation of any Fundamental Transaction pursuant
to which holders of shares of Common Stock are entitled to receive
securities or other assets with respect to or in exchange for
shares of Common Stock (a "Corporate Event"), the Company
shall make appropriate provision to ensure that the Holder will
thereafter have the right to receive upon a conversion of this
Debenture, at the Holder's option, (i) in addition to the shares of
Common Stock receivable upon such conversion, such securities or
other assets to which the Holder would have been entitled with
respect to such shares of Common Stock had such shares of Common
Stock been held by the Holder upon the consummation of such
Corporate Event (without taking into account any limitations or
restrictions on the convertibility of this Debenture) or (ii) in
lieu of the shares of Common Stock otherwise receivable upon such
conversion, such securities or other assets received by the holders
of shares of Common Stock in connection with the consummation of
such Corporate Event in such amounts as the Holder would have been
entitled to receive had this Debenture initially been issued with
conversion rights for the form of such consideration (as opposed to
shares of Common Stock) at a conversion rate for such consideration
commensurate with the Conversion Rate. Provision made pursuant to
the preceding sentence shall be in a form and substance
satisfactory to the Required Holders. The provisions of this
Section shall apply similarly and equally to successive Corporate
Events and shall be applied without regard to any limitations on
the conversion or redemption of this Debenture.

 

(b) Whenever the
Conversion Price is adjusted pursuant to Section 5 hereof, the
Company shall promptly mail to the Holder a notice setting forth
the Conversion Price after such adjustment and setting forth a
brief statement of the facts requiring such
adjustment.

 

(c) In case of any (1)
merger or consolidation of the Company or any subsidiary of the
Company with or into another Person, or (2) sale by the Company or
any subsidiary of the Company of more than one-half of the assets
of the Company in one or a series of related transactions, a Holder
shall have the right to (A) exercise any rights under Section 2(b),
(B) convert the aggregate amount of this Debenture then outstanding
into the shares of stock and other securities, cash and property
receivable upon or deemed to be held by holders of Common Stock
following such merger, consolidation or sale, and such Holder shall
be entitled upon such event or series of related events to receive
such amount of securities, cash and property as the shares of
Common Stock into which such aggregate principal amount of this
Debenture could have been converted immediately prior to such
merger, consolidation or sales would have been entitled, or (C) in
the case of a merger or consolidation, require the surviving entity
to issue to the Holder a convertible Debenture with a principal
amount equal to the aggregate principal amount of this Debenture
then held by such Holder, plus all accrued and unpaid interest and
other amounts owing thereon, which such newly issued convertible
Debenture shall have terms identical (including with respect to
conversion) to the terms of this Debenture, and shall be entitled
to all of the rights and privileges of the Holder of this Debenture
set forth herein and the agreements pursuant to which this
Debentures were issued. In the case of clause (C), the conversion
price applicable for the newly issued shares of convertible
preferred stock or convertible Debentures shall be based upon the
amount of securities, cash and property that each share of Common
Stock would receive in such transaction and the Conversion Price in
effect immediately prior to the effectiveness or closing date for
such transaction. The terms of any such merger, sale or
consolidation shall include such terms so as to continue to give
the Holder the right to receive the securities, cash and property
set forth in this Section upon any conversion or redemption
following such event. This provision shall similarly apply to
successive such events.

 

(5) REISSUANCE OF THIS
DEBENTURE.

 

(a) Transfer. If this Debenture is
to be transferred, the Holder shall surrender this Debenture to the
Company, whereupon the Company will forthwith issue and deliver
upon the order of the Holder a new Debenture (in accordance with
Section 5(d)), registered in the name of the registered transferee
or assignee, representing the outstanding Principal being
transferred by the Holder (along with any accrued and unpaid
interest thereof) and, if less then the entire outstanding
Principal is being transferred, a new Debenture (in accordance with
Section 5(d)) to the Holder representing the outstanding Principal
not being transferred. The Holder and any assignee, by acceptance
of this Debenture, acknowledge and agree that, by reason of the
provisions of Section 3(b)(iii) following conversion or redemption
of any portion of this Debenture, the outstanding Principal
represented by this Debenture may be less than the Principal stated
on the face of this Debenture.

 

(b) Lost, Stolen or Mutilated
Debenture. Upon receipt by the Company of evidence
reasonably satisfactory to the Company of the loss, theft,
destruction or mutilation of this Debenture, and, in the case of
loss, theft or destruction, of any indemnification undertaking by
the Holder to the Company in customary form and, in the case of
mutilation, upon surrender and cancellation of this Debenture, the
Company shall execute and deliver to the Holder a new Debenture (in
accordance with Section 5(d)) representing the outstanding
Principal.

 

(c) Debenture Exchangeable for Different
Denominations. This Debenture is exchangeable, upon the
surrender hereof by the Holder at the principal office of the
Company, for a new Debenture or Debentures (in accordance with
Section 5(d)) representing in the aggregate the outstanding
Principal of this Debenture, and each such new Debenture will
represent such portion of such outstanding Principal as is
designated by the Holder at the time of such
surrender.

 

(d) Issuance of New Debentures.
Whenever the Company is required to issue a new Debenture pursuant
to the terms of this Debenture, such new Debenture (i) shall be of
like tenor with this Debenture, (ii) shall represent, as indicated
on the face of such new Debenture, the Principal remaining
outstanding (or in the case of a new Debenture being issued
pursuant to Section 5(a) or Section 5(c), the Principal designated
by the Holder which, when added to the principal represented by the
other new Debentures issued in connection with such issuance, does
not exceed the Principal remaining outstanding under this Debenture
immediately prior to such issuance of new Debentures), (iii) shall
have an issuance date, as indicated on the face of such new
Debenture, which is the same as the Issuance Date of this
Debenture, (iv) shall have the same rights and conditions as this
Debenture, and (v) shall represent accrued and unpaid Interest from
the Issuance Date.

 

(6) NOTICES.                                 Any
notices, consents, waivers or other communications required or
permitted to be given under the terms hereof must be in writing by
letter and email and will be deemed to have been delivered: upon
the later of (A) either (i) receipt, when delivered personally or
(ii) one (1) Business Day after deposit with an overnight courier
service with next day delivery specified, in each case, properly
addressed to the party to receive the same and (B) receipt, when
sent by electronic mail. The addresses and e­mail addresses
for such communications shall be::

 

 

	

If to
the Company, to:

	

Cantabio
Pharmaceuticals Inc.

	
 

	

1250
Oakmead Pkwy

Sunnyvale,
CA 94085

Telephone: 844-200-2826Attention: Tom
SawyerE-Mail:  corporate@cantabio.com

 

	

With
Copy to:

	

Ortoli
Rosenstadt LLP

501
Madison Avenue, 14th Floor

New
York, NY 10022

Telephone: 212-588-0022Attention: 
William RosenstadtE-Mail: 
wsr@ortolirosenstadt.com

 

	
 

	
 

	
 

	
 

	

If to
the Holder:

	

YA II
PN, Ltd

	
 

	

c/o
Yorkville Advisors Global, LLC

1012
Springfield Avenue

	
 

	

Mountainside,
NJ 07092

	
 

	

Attention:
Mark Angelo

	
 

	

Telephone:
201-985-8300

	
 

	

Email:
Legal@yorkvilleadvisors.com

 

 

or at
such other address and/or facsimile number and/or to the attention
of such other person as the recipient party has specified by
written notice given to each other party three (3) Business Days
prior to the effectiveness of such change. Written confirmation of
receipt (i) given by the recipient of such notice, consent, waiver
or other communication, (ii) mechanically or electronically
generated by the sender's facsimile machine containing the time,
date, recipient facsimile number and an image of the first page of
such transmission or (iii) provided by a nationally recognized
overnight delivery service, shall be rebuttable evidence of
personal service, receipt by facsimile or receipt from a nationally
recognized overnight delivery service in accordance with clause
(i), (ii) or (iii) above, respectively.

 

(7) Except as expressly
provided herein, no provision of this Debenture shall alter or
impair the obligations of the Company, which are absolute and
unconditional, to pay the principal of, interest and other charges
(if any) on, this Debenture at the time, place, and rate, and in
the coin or currency, herein prescribed. This Debenture is a direct
obligation of the Company. As long as this Debenture is
outstanding, the Company shall not and shall cause their
subsidiaries not to, without the consent of the Holder, (i) amend
its certificate of incorporation, bylaws or other charter documents
so as to adversely affect any rights of the Holder; (ii) repay,
repurchase or offer to repay, repurchase or otherwise acquire
shares of its Common Stock or other equity securities; or (iii)
enter into any agreement with respect to any of the
foregoing.

 

(8) This Debenture
shall not entitle the Holder to any of the rights of a stockholder
of the Company, including without limitation, the right to vote, to
receive dividends and other distributions, or to receive any notice
of, or to attend, meetings of stockholders or any other proceedings
of the Company, unless and to the extent converted into shares of
Common Stock in accordance with the terms hereof.

 

(9) No indebtedness of
the Company is senior to this Debenture in right of payment,
whether with respect to interest, damages or upon liquidation or
dissolution or otherwise. Without the Holder’s consent, the
Company will not and will not permit any of their subsidiaries to,
directly or indirectly, enter into, create, incur, assume or suffer
to exist any indebtedness 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 there from that is senior
in any respect to the obligations of the Company under this
Debenture.

 

(10) This
Debenture shall be governed by and construed in accordance with the
laws of the State of New Jersey, without giving effect to conflicts
of laws thereof. Each of the parties consents to the jurisdiction
of the Superior Courts of the State of New Jersey sitting in Hudson
County, New Jersey and the U.S. District Court for the
District of New Jersey sitting in Newark, New Jersey in connection
with any dispute arising under this Debenture and hereby waives, to
the maximum extent permitted by law, any objection, including any
objection based on forum non conveniens to the bringing of any such
proceeding in such jurisdictions.

 

(11) If
the Company fails to strictly comply with the terms of this
Debenture, then the Company shall reimburse the Holder promptly for
all fees, costs and expenses, including, without limitation,
attorneys’ fees and expenses incurred by the Holder in any
action in connection with this Debenture, including, without
limitation, those incurred: (i) during any workout, attempted
workout, and/or in connection with the rendering of legal advice as
to the Holder’s rights, remedies and obligations, (ii)
collecting any sums which become due to the Holder, (iii) defending
or prosecuting any proceeding or any counterclaim to any proceeding
or appeal; or (iv) the protection, preservation or enforcement of
any rights or remedies of the Holder.

 

(12) Any
waiver by 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 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 must be in
writing.

 

(13) 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 shall violate
applicable laws governing usury, the applicable rate of interest
due hereunder shall automatically be lowered to equal the maximum
permitted rate of interest. 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.

 

(14) 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.

 

(15) THE
PARTIES HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE
RIGHT ANY OF THEM MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
LITIGATION BASED HEREON OR ARISING OUT OF, UNDER OR IN CONNECTION
WITH THIS AGREEMENT OR ANY TRANSACTION DOCUMENT OR ANY COURSE OF
CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN)
OR ACTIONS OF ANY PARTY. THIS PROVISION IS A MATERIAL INDUCEMENT
FOR THE PARTIES’ ACCEPTANCE OF THIS AGREEMENT.

 

(16) CERTAIN
DEFINITIONS.                                                                 For
purposes of this Debenture, the following terms shall have the
following meanings:

 

(a) "Bloomberg" means Bloomberg
Financial Markets.

 

(b) “Business Day” means any
day except Saturday, Sunday and any day which shall be a federal
legal holiday in the United States or a day on which banking
institutions are authorized or required by law or other government
action to close.

 

(c) “Change of Control
Transaction” means the occurrence of (a) an
acquisition after the date hereof by an individual or legal entity
or “group” (as described in Rule 13d-5(b)(1)
promulgated under the Exchange Act) of effective control (whether
through legal or beneficial ownership of capital stock of the
Company, by contract or otherwise) of in excess of fifty percent
(50%) of the voting securities of the Company (except that the
acquisition of voting securities by the Holder or any other current
holder of convertible securities of the Company shall not
constitute a Change of Control Transaction for purposes hereof),
(b) a replacement at one time or over time of more than one-half of
the members of the board of directors of the Company (other than as
due to the death or disability of a member of the board of
directors) which is not approved by a majority of those individuals
who are members of the board of directors on the date hereof (or by
those individuals who are serving as members of the board of
directors on any date whose nomination to the board of directors
was approved by a majority of the members of the board of directors
who are members on the date hereof), (c) the merger, consolidation
or sale of fifty percent (50%) or more of the assets of the Company
or any subsidiary of the Company in one or a series of related
transactions with or into another entity, or (d) the execution by
the Company of an agreement to which the Company is a party or by
which it is bound, providing for any of the events set forth above
in (a), (b) or (c). No transfer to a wholly-owned subsidiary shall
be deemed a Change of Control Transaction under this
provision.

 

(d) “Closing Bid Price” means
the price per share in the last reported trade of the Common Stock
on a Primary Market or on the exchange which the Common Stock is
then listed as quoted by Bloomberg.

 

(e) “Convertible Securities”
means any stock or securities (other
than Options) directly or indirectly convertible into or
exercisable or exchangeable for Common Stock.

 

(f) “Commission” means the
Securities and Exchange Commission.

 

(g) “Common Stock” means the
common stock, par value $0.001, of the Company and stock of any
other class into which such shares may hereafter be changed or
reclassified.

 

(h) “Default Conversion Price”
means the lower of (i) $0.10 or (ii) 85% of the lowest daily VWAPs
during the 20 consecutive Trading Days immediately preceding the
applicable date of determination.

 

(i) “Exchange Act” means the
Securities Exchange Act of 1934, as amended.

 

(j) “Floor Price” means $0.01
per share.

 

(k) “Fundamental
Transaction” means any of the following: (1)
the Company effects any merger or consolidation of the Company with
or into another Person and the Company is the non-surviving company
(other than a merger or consolidation with a wholly owned
subsidiary of the Company for the purpose of redomiciling the
Company), (2) the Company effects any sale of all or substantially
all of its assets in one or a series of related transactions, (3)
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 (4) 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

 

(l) “Other Debentures” means
any other debentures issued pursuant to the Securities Purchase
Agreement, any other debentures issued pursuant to the securities
purchase agreement dated January 25, 2017, (as amended on May 3,
2017), and any other debentures, notes, or other instruments issued
in exchange, replacement, or modification of the
foregoing.

 

(m)  “Person”
means a corporation, an association, a partnership, organization, a
business, an individual, a government or political subdivision
thereof or a governmental agency.

 

(n) “Primary Market” means any
of the New York Stock Exchange, the NYSE MKT, the Nasdaq Global
Market, the Nasdaq Global Select Market, or the OTC QB, and any
successor to any of the foregoing markets or
exchanges.

 

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

 

(p) “Trading Day” means a day
on which the shares of Common Stock are quoted or traded on a
Primary Market on which the shares of Common Stock are then quoted
or listed; provided, that in the event that the shares of Common
Stock are not listed or quoted, then Trading Day shall mean a
Business Day.

 

(q) “Transaction Document(s)”
shall mean this Debenture, along with the Securities Purchase
Agreement, and any other documents or agreements entered into in
connection with the foregoing.

 

(r) “Underlying Shares” means
the shares of Common Stock issuable upon conversion of this
Debenture or as payment of interest in accordance with the terms
hereof.

 

(s) "VWAP" means, for any security
as of any date, the daily dollar volume-weighted average price for
such security on the Primary Market as reported by Bloomberg
through its “Historical Prices – Px Table with Average
Daily Volume” functions, or, if no dollar volume-weighted
average price is reported for such security by
Bloomberg.

 

 

 

 

 

 

 

[Signature Page Follows]

 

 

 

 

IN WITNESS WHEREOF, the Company has
caused this Secured Convertible Debenture to be duly executed by a
duly authorized officer as of the date set forth
above.

 

 

	
 

	

COMPANY:

	
 

	

CANTABIO PHARMACEUTICALS INC.

	
 

	
 

	
 

	

By:                                                                 

	
 

	

Name:                       

	
 

	

Title:

	
 

	
 

 

 

 

 

 

 

EXHIBIT I

 

 

CONVERSION NOTICE

 

 

(To be executed by the Holder in order to Convert the
Debenture)

 

 

TO: CANTABIO PHARMACEUTICALS INC.

 

Via Email: corporate@cantabio.com;
wsr@ortolirosenstadt.com

 

The
undersigned hereby irrevocably elects to convert a portion of the
outstanding and unpaid Conversion Amount of Debenture No.
[________] into Shares of
Common Stock of CANTABIO
PHARMACEUTICALS INC., according to the conditions stated
therein, as of the Conversion Date written below.

 

	
 

	
 

	

Conversion Date:

 

	
 

	

Principal Amount to be Converted:

 

	
 

	

Accrued Interest to be Converted:

 

	
 

	

Total Conversion Amount to be converted:

 

	
 

	

Conversion Price:

 

	
 

	

Number of shares of Common Stock to be issued:

 

	
 

	
 

	
 

	

Please issue the shares of Common Stock in the following name and
to the following address:

 

	

Issue to:

 

	
 

	
 

	
 

	

Authorized Signature:

 

	
 

	

Name:

 

	
 

	

Title:

 

	
 

	

Broker DTC Participant Code:

 

	
 

	

Account Number:

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00277-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00277-of-00352.parquet"}]]