Document:

Prepared for Summus, Inc. by EDGARfile.net

EXHIBIT 4.6

 

NEITHER THESE SECURITIES NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE 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.  THESE SECURITIES AND THE SECURITIES ISSUABLE UPON EXERCISE OF THESE SECURITIES MAY BE PLEDGED IN CONNECTION WITH
A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.

Date of Issuance: July __, 2002

$____,000

6% CONVERTIBLE SECURED DEBENTURE

DUE JULY __, 2007

THIS DEBENTURE is one of a series of duly authorized and issued debentures of Summus, Inc. (USA), a Florida corporation, having a principal place of business at 434 Fayetteville Street, Suite 600, Raleigh, North Carolina 27601 (the "Company"), designated as its 6% Convertible Secured Debentures, due July ___, 2007 in the aggregate principal amount of $500,000 (the "Debentures").

FOR VALUE RECEIVED, the Company promises to pay to _____________________________ or its registered assigns (the
"Holder"), the principal sum of $_____________  on July __, 2007 or such earlier date as the Debentures are required or
permitted to be repaid as provided hereunder (the “Maturity Date”) and to pay interest to the Holder on the
aggregate unconverted and then outstanding principal amount of this Debenture at the rate of 6% per annum, payable quarterly on
March 1, June 1, September 1 and December 1, beginning on September 1, and on each Conversion Date (as defined herein) and on the
Maturity Date (each such date, an “Interest Payment Date”), in cash or shares of Common Stock (as defined in
Section 5) that have been registered for resale by the Holder.  The Company may not prepay any portion of the principle amount
or interest on this Debenture without the prior written consent of the Holder.   Subject to the terms and conditions
herein, the decision whether to pay interest hereunder in shares of Common Stock or cash shall be at the discretion of the
Company.  Not less than ten Trading Days

   

(as defined in Section 5) prior to each Interest Payment Date, the Company shall
provide the Holder with written notice of its election to pay interest hereunder either in cash or shares of Common Stock pursuant
to the terms of Section 4 (the Company may indicate in such notice that the election contained in such notice shall continue
for later periods until revised).  Failure to timely provide such written notice shall be deemed an election by the Company to
pay the interest on such Conversion Date in shares of Common Stock pursuant to the terms of Section 4, provided the Registration
Statement is then effective registering such shares.  Interest shall be calculated on the basis on a 360-day year and shall
accrue daily commencing on the Original Issue Date (as defined in Section 5) until payment in full of the principal sum, together
with all accrued and unpaid interest and other amounts which may become due hereunder, has been made.  Interest hereunder will
be paid to the Person (as defined in Section 5) in whose name this Debenture is registered on the records of the Company regarding
registration and transfers of Debentures (the "Debenture Register").  All overdue accrued and unpaid interest to be
paid hereunder shall entail a late fee at the rate of 18% per annum (or such lower maximum amount of interest permitted to be
charged under applicable law) ("Late Fee") which will accrue daily, from the date such interest is due hereunder through and
including the date of payment.

This Debenture is subject to the following additional provisions:

Section 1.
           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 made for such registration of transfer or exchange.

Section 2.
           This Debenture has been issued subject to certain
investment representations of the original Holder set forth in the Purchase Agreement (as defined in Section 5) and may be
transferred or exchanged only in compliance with the Purchase Agreement.  Prior to due presentment to the Company for transfer
of this Debenture, the Company and any agent of the Company may treat the Person (as defined in Section 5) 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 3.
           Events of Default.

(a)            "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)           
any default in the payment of the principal of, interest (including any Late Fees) on or liquidated damages in respect of, any
Debentures, free of any claim of subordination, as and when the same shall become due and payable (whether on a Conversion Date or
the Maturity Date or by acceleration or otherwise);

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  (ii)           
the Company shall fail to observe or perform any other covenant, agreement or warranty contained in, or otherwise commit any
breach of any of the  Transaction Documents (as defined in Section 5), and such failure or breach shall not have been remedied
within five days after the date on which notice of such failure or breach shall have been given;

  (iii)           
the Company or any of its subsidiaries shall commence, or there shall be commenced against the Company or any such subsidiary a
case under any applicable bankruptcy or insolvency laws as now or hereafter in effect or any successor thereto, or 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 thereof or there is commenced against the Company or any subsidiary thereof any such bankruptcy, insolvency or other
proceeding which remains undismissed for a period of 60 days; or the Company or any subsidiary thereof is adjudicated insolvent or
bankrupt; or any order of relief or other order approving any such case or proceeding is entered; or the Company or any subsidiary
thereof suffers any appointment of any custodian or the like for it or any substantial part of its property which continues
undischarged or unstayed for a period of 60 days; or the Company or any subsidiary thereof makes a general assignment for the
benefit of creditors; or 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 thereof 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 thereof 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 thereof for the purpose of effecting any of the foregoing;

(iv)           
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 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 prior to the date on which it would otherwise become due and
payable;

(v)           
the Common Stock shall not be eligible for quotation on or quoted for trading on the OTC Bulletin Board or listed for trading on
the Nasdaq SmallCap Market, New York Stock Exchange, American Stock Exchange or the Nasdaq

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National Market (each, a
“Subsequent Market”) and shall not again be eligible for and quoted or listed for trading thereon within five
Trading Days;

(vi)           
the Company shall be a party to any Change of Control Transaction (as defined in Section 5), shall agree to sell or dispose all
or in excess of 33% of its assets in one or more transactions (whether or not such sale would constitute a Change of Control
Transaction) ( provided however, that this term shall not apply if the sale of all or in excess of 33% of the Company’s 
assets are acquired by a Purchaser or any entity of which a Purchaser is an affiliate), or shall redeem or repurchase more than a
de minimis number of shares of Common Stock or other equity securities of the Company (other than redemptions of Underlying Shares
(as defined in Section 5));

(vii)           
an Underlying Shares Registration Statement (as defined in Section 5) shall not have been declared effective by the Commission
(as defined in Section 5) on or prior to the 180th calendar day after the Original Issue Date;

(viii)           
if, during the Effectiveness Period (as defined in the Registration Rights Agreement (as defined in Section 5)), the
effectiveness of the Underlying Shares Registration Statement lapses for any reason or the Holder shall not be permitted to resell
Registrable Securities (as defined in the Registration Rights Agreement) under the Underlying Shares Registration Statement, in
either case, for more than 20 consecutive Trading Days; provided, however, in
the event a post-effective amendment is reviewed by the Commission, then such period shall be extended to the
earlier of 60 consecutive Trading Days or the date such amendment is declared
effective by the Commission;

(ix)           
an Event (as defined in the Registration Rights Agreement) shall not have been cured to the satisfaction of the Holder prior to
the expiration of thirty days from the Event Date (as defined in the Registration Rights Agreement) relating thereto (other than an
Event resulting from a failure of an Underlying Shares Registration Statement to be declared effective by the Commission on or
prior to the 120th calendar day after the Original Issue Date, which shall be covered by Section 3(a)(vii));

(x)           
the Company shall fail for any reason to deliver certificates to a Holder prior to the fifth Trading Day after a Conversion Date
pursuant to and in accordance with Section 4(b) or the Company shall provide notice to the Holder, including by way of public
announcement, at any time, of its intention not to comply

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with requests for conversions of any Debentures in accordance with the
terms hereof;  or

(xi)           
the Company shall fail for any reason to deliver the payment in cash pursuant to a Buy-In (as defined herein) within five
days after notice thereof is delivered hereunder.

(b)         If any Event of Default occurs and is continuing, the full
principal amount of this Debenture (and, at the Holder's option, all other Debentures then held by such Holder), 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.   The aggregate amount payable upon an Event of Default shall be equal to the sum
of: (i) the Mandatory Prepayment Amount (as defined in Section 5) plus (ii) the product of (A) the number of Underlying Shares
issued in respect of conversions hereunder within thirty days of the date of a declaration of an Event of Default and then held by
the Holder and (B) the Closing Price (as defined in Section 5) on the date prepayment is due or the date the full prepayment price
is paid, whichever is greater.  Interest shall accrue on the prepayment amount hereunder from the seventh day after such
amount is due (being the date of an Event of Default) through the date of prepayment in full thereof in an amount equal to the Late
Fee, to accrue daily from the date such payment is due hereunder through and including the date of payment.  All Debentures
and Underlying Shares for which the full prepayment price hereunder shall have been paid in accordance herewith shall promptly be
surrendered to or as directed by the Company.  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 declaration
may be rescinded and annulled by Holder at any time prior to payment hereunder and the Holder shall have all rights as a Debenture
holder until such time, if any, as the full payment under this Section shall have been received by it.    No such
rescission or annulment shall affect any subsequent Event of Default or impair any right consequent thereon.

Section 4.           
Conversion.

  (a)         
(i)     At any time after the Closing Date, this Debenture shall be convertible into shares of Common Stock at the option of the
Holder, in whole or in part at any time and from time to time (subject to the limitations on conversion set forth in
Section 4(a)(ii) hereof).  The Holder shall effect conversions by delivering to the Company the form of conversion notice
attached hereto as Annex A (a "Conversion Notice"), specifying therein the principal amount of Debentures to be
converted and the date on which such conversion is to be effected (a “Conversion Date”) and shall contain a
completed schedule in the form of Schedule 1 to the Conversion Notice (as amended on each Conversion Date, the
"Conversion Schedule") reflecting the remaining principal amount of this Debenture and all accrued and unpaid interest
thereon subsequent to the conversion at issue.  If no Conversion Date is specified in a Conversion Notice, the Conversion Date
shall be the date that such Conversion

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  Notice is provided hereunder.  To effect conversions hereunder, the Holder shall not be
required to physically surrender Debentures to the Company unless the entire principal amount of this Debenture has been so
converted. Conversions hereunder shall have the effect of lowering the outstanding principal amount of this Debenture plus all
accrued and unpaid interest thereon in an amount equal to the applicable conversion, which shall be evidenced by entries set forth
in the Conversion Schedule.  The Holder and the Company shall maintain records showing the principal amount converted and the
date of such conversions.  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. 

(ii)         
Certain Conversion Restrictions.  A Holder may not convert Debentures or receive shares of Common Stock as payment
of interest hereunder to the extent such conversion or receipt of such interest payment would result in the Holder, together with
its affiliates, beneficially owning (as determined in accordance with Section 13(d) of the Exchange Act and the rules promulgated
thereunder) in excess of 4.999% of the then issued and outstanding shares of Common Stock, including shares issuable upon
conversion of, and payment of interest on, the Debentures held by such Holder after application of this Section.  To ensure
compliance with this restriction, the Holder will be deemed to represent to the Company each time it delivers a Conversion Notice
that such Conversion Notice has not violated the restrictions set forth in this paragraph.   If the Holder has delivered
a Conversion Notice for a principal amount of Debentures 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 the periods described in Section 4(b) and, at the option of the Holder, either retain any principal amount tendered
for conversion in excess of the permitted amount hereunder for future conversions or return such excess principal amount to the
Holder.  In the event of a merger or consolidation of the Company with or into another Person, this paragraph shall not apply
with respect to a determination of the number of shares of common stock issuable upon conversion in full of the Debentures if such
determination is necessary to establish the Securities or other assets which the holder of Common Stock shall be entitled to
receive upon the effectiveness of such merger or consolidation.

(iii)         
Underlying Shares Issuable Upon Conversion and Pursuant to Interest.

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(A)      
The number of shares of Common Stock issuable upon a conversion hereunder shall be determined by adding the sum of:
(1) the quotient obtained by dividing (x) the outstanding principal amount of this Debenture to be converted and (y) the Conversion
Price, and (2) the amount equal to (x) the product of (I) the outstanding principal amount of this Debenture to be converted and
(II) the product of (aa) the quotient obtained by dividing 6% by 360 and (bb) the number of days for which such principal amount
was outstanding, divided by (y) the Conversion Price on  the Conversion Date, provided, that if the Company shall have
elected to pay the interest due on a Conversion Date in cash pursuant to the terms hereof, subsection (2) shall not be used in the
calculation of the number of shares of Common Stock issuable upon a conversion hereunder.

(B)      
Notwithstanding anything to the contrary contained herein, if on any Conversion Date:

(1)      
the number of shares of Common Stock at the time authorized, unissued and unreserved for all purposes, or held as treasury
stock, is insufficient to pay interest hereunder in shares of Common Stock;

(2)      
such shares of Common Stock:  (x) are not registered for resale pursuant to an effective Underlying Shares Registration
Statement and (y) may not be sold without volume restrictions pursuant to Rule 144(k) promulgated under the Securities Act;

(3)      
the Common Stock shall fail to be listed or quoted for trading on the OTC Bulletin Board or a Subsequent Market;

(4)      
the Company has failed to timely satisfy its conversion obligations hereunder; or

(5)      
the issuance of such shares of Common Stock would result in a violation of Section 4(a)(ii),

then, at the option of the Holder, the Company, in lieu of delivering shares of Common Stock pursuant to this Section 4, shall
deliver, within three Trading Days of each applicable Conversion Date, an amount in cash equal to the product of the number of
shares of Common Stock otherwise deliverable to the Holder in connection with such Conversion Date and the highest Closing Price
during the period commencing on the Conversion Date and ending on the Trading Day prior to the date such payment is made.

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(b)      
(i)       Not later than three Trading Days after any Conversion Date, the Company will deliver to the Holder (A) a certificate or
certificates which shall be free of restrictive legends and trading restrictions (other than those required by the Purchase
Agreement) representing the number of shares of Common Stock being acquired upon the conversion of Debentures and (B) a bank check
in the amount of accrued and unpaid interest (if the Company has timely elected or is required to pay accrued interest in cash).
The Company shall, upon request of the Holder, if available, use its best efforts to deliver any certificate or certificates
required to be delivered by the Company under this Section electronically through the Depository Trust Corporation or another
established clearing corporation performing similar functions.  If in the case of any Conversion Notice such certificate or
certificates are not delivered to or as directed by the applicable Holder by the third Trading Day after a Conversion Date, the
Holder shall be entitled by written notice to the Company at any time on or before its receipt of such certificate or certificates
thereafter, to rescind such conversion, in which event the Company shall immediately return the certificates representing the
principal amount of Debentures tendered for conversion.

 (ii)      
If the Company  fails for any reason to deliver to the Holder such certificate or certificates pursuant to Section 4(b)(i)
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 $5,000 of principal amount being converted, $50 per Trading Day (increasing to $100 per Trading Day after 3
Trading Days and increasing to $200 per Trading Day 6 Trading Days after such damages begin to accrue) for each Trading Day after
such third Trading Day until such certificates are delivered.  Nothing herein shall limit a Holder's right to pursue actual
damages or declare an Event of Default pursuant to Section 3 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.  The exercise of any such rights shall not prohibit the Holders from seeking to enforce damages pursuant to any other
Section hereof or under applicable law.

(iii)      
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 pursuant to Section 4(b)(i) by the third Trading Day after the Conversion Date, and if after such third
Trading Day the Holder purchases (in an open market transaction or otherwise) Common Stock to deliver in satisfaction of a sale by
such Holder of the Underlying Shares which the Holder anticipated receiving upon such conversion (a "Buy-In"), then the
Company shall (A) pay in cash to the Holder (in addition to any remedies available to or elected by the Holder) the amount by which
(x) the Holder's total purchase price (including brokerage commissions, if any) for the Common Stock so purchased exceeds (y) the
product of (1) the aggregate number of shares of Common

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Stock that such Holder anticipated receiving from the conversion at issue
multiplied by (2) the market price of the Common Stock at the time of the sale giving rise to such purchase obligation and (B) at
the option of the Holder, either reissue Debentures in 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 had the Company timely complied with its
delivery requirements under Section 4(b)(i).  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 Debentures with respect to which the market price of the
Underlying Shares on the date of conversion 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.  Notwithstanding anything contained herein to the contrary, if a
Holder requires the Company to make payment in respect of a Buy-In for the failure to timely deliver certificates hereunder and the
Company timely pays in full such payment, the Company shall not be required to pay such Holder liquidated damages under Section
4(b)(ii) in respect of the certificates resulting in such Buy-In.

(c)      
(i)       The conversion price in effect on any Conversion Date shall be equal to $______1
(subject to adjustment herein) (the "Conversion Price"), provided, however, after the occurrence
of any Event of Default, the Conversion Price thereafter shall be equal to $_____2.

(ii)      
If the Company, at any time while the Debentures are outstanding: (A) shall pay a stock dividend or otherwise make a
distribution or distributions on shares of its Common Stock or any other equity or equity equivalent securities payable in shares
of Common Stock, (B) subdivide outstanding shares of Common Stock into a larger number of shares, (C) combine (including by way of
reverse stock split) outstanding shares of Common Stock into a smaller number of shares, or (D) issue by 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 treasury shares, if any) outstanding before such event
and of which the denominator shall be the number of shares of Common Stock outstanding 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

 

________________

1  70% of the average of the 3
lowest VWAPS during the 22 Trading Days immediately prior to the execution date
of the Purchase Agreement.

2  60% of the average of the 3
lowest VWAPS during the 33 Trading Days immediately prior to the execution date
of the Purchase Agreement.

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or distribution and shall become effective immediately after the effective date in the case of a subdivision,
combination or  re-classification.

(iii)      
If the Company, at any time while Debentures are outstanding, shall issue rights, options or warrants to all holders of Common
Stock (and not to Holders) entitling them to subscribe for or purchase shares of Common Stock at a price per share less than the
Per Share Market Value at the record date mentioned 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 (excluding treasury shares, if any) 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 (excluding treasury shares, if any) 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 would purchase at such Per Share Market Value.  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.  However, upon the expiration of any such right, option or warrant to purchase
shares of the Common Stock the issuance of which resulted in an adjustment in the Conversion Price pursuant to this Section, if any
such right, option or warrant shall expire and shall not have been exercised, the Conversion Price shall immediately upon such
expiration be recomputed and effective immediately upon such expiration be increased to the price which it would have been (but
reflecting any other adjustments in the Conversion Price made pursuant to the provisions of this Section after the issuance of such
rights or warrants) had the adjustment of the Conversion Price made upon the issuance of such rights, options or warrants been made
on the basis of offering for subscription or purchase only that number of shares of the Common Stock actually purchased upon the
exercise of such rights, options or warrants actually exercised.

(iv)      
If the Company or any subsidiary thereof, as applicable, at any time while at least 35% of the originally issued Debentures are
outstanding, shall offer, sell, grant any option to purchase or offer, sell or grant any right to reprice its securities, or
otherwise dispose of or issue (or announce any offer, sale, grant or any option to purchase or other disposition) any Common Stock
or any equity or equity equivalent securities (including any equity,  debt or other instrument that is at any time over the
life thereof convertible into or exchangeable for Common Stock) (collectively, “Common Stock Equivalents”)
entitling any Person to acquire shares of Common Stock, at a price per share less than the Conversion Price (if the holder of the
Common Stock or Common Stock Equivalent 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 is
issued in connection with such issuance, be entitled to receive shares

10

   

of Common Stock at a price per share which is less than the
Conversion Price, such issuance shall be deemed to have occurred for less than the Conversion Price, as applicable), then, the
Conversion Price shall be adjusted for such conversions as Holders shall indicate in its Conversion Notices to equal the
conversion, exchange or purchase price for such Common Stock or Common Stock Equivalents (including any reset provisions thereof)
at issue.  Such adjustment shall be made whenever such Common Stock or Common Stock Equivalents are issued.  The Company
shall notify the Holder in writing, no later than the business day following the issuance of any Common Stock or Common Stock
Equivalent subject to this section, indicating therein the applicable issuance price, or of applicable reset price, exchange price,
conversion price and other pricing terms.  Notwithstanding herein to the contrary, any shares of Common Stock issued pursuant
to the Company’s equity line of credit transaction to be entered into by the Company with an investor identified and arranged
by HPC Capital shall not result in any adjustments pursuant to the terms of this Section 4(c)(iv).

 (v)      
If the Company, at any time while Debentures are outstanding, shall distribute to all holders of Common Stock (and not to
Holders) evidences of its indebtedness or assets or rights or warrants to subscribe for or purchase any security, then in each such
case the Conversion Price shall be determined by multiplying such 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 Per Share
Market Value determined as of the record date mentioned above, and of which the numerator shall be such Per Share Market Value 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 one outstanding share of the Common Stock as determined by the Board of Directors in good faith.  In
either case the adjustments shall be described in a statement provided to the Holders of the portion of assets or evidences of
indebtedness so distributed or such subscription rights applicable to one 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.

(vi)      
In case of any reclassification of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is
converted into other securities, cash or property, the Holders shall have the right thereafter to, at their option, (A) convert the
then outstanding principal amount, together with all accrued but unpaid interest and any other amounts then owing hereunder in
respect of this Debenture only into the shares of stock and other securities, cash and property receivable upon or deemed to be
held by holders of the Common Stock following such reclassification or share exchange, and the Holders of the Debentures shall be
entitled upon such event to receive such amount of securities, cash or property as the shares of the Common Stock of the Company
into which the then outstanding principal

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amount, together with all accrued but unpaid interest and any other amounts then owing
hereunder in respect of this Debenture could have been converted immediately prior to such reclassification or share exchange would
have been entitled or (B) require the Company to prepay the aggregate of its outstanding principal amount of Debentures, plus all
interest and other amounts due and payable thereon, at a price determined in accordance with Section 3(b).  The entire
prepayment price shall be paid in cash.  This provision shall similarly apply to successive reclassifications or share
exchanges.

(vii)      
All calculations under this Section 4 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may
be.  No adjustments in the Conversion Price shall be required if such adjustment is less than $0.01; provided,
however, that any adjustments which by reason of this Section are not required to be made shall be carried forward and taken
into account in any subsequent adjustment.

(viii)      
Whenever the Conversion Price are adjusted pursuant to any of Section 4(c)(ii) - (v), 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.

(ix)      
If (A) the Company shall declare a dividend (or any other distribution) 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 rights or warrants to subscribe for or purchase any shares of capital stock of any class or of any
rights; (D) the approval of any stockholders of the Company shall be required in connection with any reclassification of the Common
Stock, any consolidation or merger to which the Company is a party, any sale or transfer of all or substantially all of the assets
of the Company, of any compulsory share exchange whereby the Common Stock is converted into other securities, cash or property; (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 the
Debentures, and shall cause to be mailed to the Holders at their last addresses as they shall appear upon the stock books of the
Company, 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

12

   

securities, cash or other
property deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange; provided, that the
failure to mail such notice or any defect therein or in the mailing thereof shall not affect the validity of the corporate action
required to be specified in such notice.  Holders are entitled to convert Debentures during the 20-day period commencing the
date of such notice to the effective date of the event triggering such notice.

(x)      
Fundamental Transactions. 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 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 Underlying Share that would have been issuable upon such conversion absent 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 of one 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 one 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 paragraph (c) and insuring that this Debenture (or any
such replacement security) will be similarly adjusted upon any subsequent transaction analogous to a Fundamental Transaction. If
any Fundamental Transaction constitutes or results in a Change of Control Transaction, then at the request of the Holder delivered
before the 90th day after such

13

   

Fundamental Transaction, the Company (or any such successor or surviving entity) will purchase the
Debenture from the Holder for a purchase price, payable in cash within five Trading Days after such request (or, if later, on the
effective date of the Fundamental Transaction), equal to the Black Scholes value of the remaining unconverted portion of this
Debenture on the date of such request.

(d)      
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 the
Debentures and payment of interest on the Debentures, each as herein provided, free from preemptive rights or any other actual
contingent purchase rights of persons other than the Holders, not less than such number of shares of the Common Stock as shall
(subject to any additional requirements of the Company as to reservation of such shares set forth in the Purchase Agreement) be
issuable (taking into account the adjustments and restrictions of Section 4(b)) upon the conversion of the outstanding principal
amount of the Debentures 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.

(e)      
Upon a conversion hereunder the Company shall not be required
to issue stock certificates representing fractions of shares of the Common Stock, but may if otherwise permitted, make a cash
payment in respect of any final fraction of a share based on the Closing Price 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, one whole
share of Common Stock.

(f)      
The issuance of certificates for shares of the Common Stock
on conversion of the Debentures shall be made without charge to the Holders thereof for any documentary stamp or similar taxes that
may be payable in respect of the issue or delivery of such certificate, 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 such Debentures 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.

(g)      
Any and all notices or other communications or deliveries to
be provided by the Holders hereunder, including, without limitation, any Conversion Notice, shall be in writing and delivered
personally, by facsimile, sent by a nationally recognized overnight courier service or sent by certified or registered mail,
postage prepaid, addressed to the Company, at the address set forth above, facsimile number (910) 807-5601, Attn: Donald T.

14

 

   

Locke
or Robert S. Lowrey or such other address or facsimile number as the Company may specify for such purposes by notice to the Holders
delivered in accordance with this Section.  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, sent by a nationally recognized overnight courier
service or sent by certified or registered mail, postage prepaid, addressed to each Holder at the facsimile telephone number or
address of such Holder appearing on the books of the Company, or if no such facsimile telephone number or address appears, at the
principal place of business of the Holder.  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 telephone number specified in this Section prior to 5:30 p.m. (New York City time), (ii) the date after the date of
transmission, if such notice or communication is delivered via facsimile at the facsimile telephone number specified in this
Section later than 5:30 p.m. (New York City time) on any date and earlier than 11:59 p.m. (New York City time) on such date, (iii)
four days after deposit in the United States mail, (iv) the Business Day following the date of mailing, if sent by nationally
recognized overnight courier service, or (v) upon actual receipt by the party to whom such notice is required to be
given. 

Section 5.     Definitions.  For the purposes hereof, the following terms shall have
the following meanings:

"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 in the State of New York  are authorized or required by law or other government
action to close.

"Change of Control Transaction"  means the occurrence 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
33% of the voting securities of the Company; provided however, that this definition shall exclude acquisitions of capital stock
made by the Purchasers or their affiliates, (ii) a replacement at one time or over time of more than one-half of the members
of the Company's 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), (iii) the merger of the Company with or into another entity that is not wholly-owned by the Company,
consolidation or sale of 50% or more of the assets of the Company in one or a series of related transactions; provided however,
that this definition shall exclude mergers, consolidations, or sale of 50% or more of the assets of the Company to the Purchasers
or any entity of which a Purchaser is an affiliate, or (iv) 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 (i), (ii) or (iii).

15

   

“Commission” means the Securities and Exchange Commission.

"Common Stock" means the common stock, $0.001 par value per share, of the Company and stock of any other class into which
such shares may hereafter have been reclassified or changed.

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

"Mandatory Prepayment Amount" for any Debentures shall equal the sum of (i) the greater of: (A) 150% of the principal
amount of Debentures to be prepaid, plus all accrued and unpaid interest thereon, plus all other accrued and unpaid amounts due
hereunder, and (B) the principal amount of Debentures to be prepaid, plus all accrued and unpaid interest thereon, plus all other
accrued and unpaid amounts due hereunder, divided by the Conversion Price on (x) the date the Mandatory Prepayment Amount is
demanded or otherwise due or (y) the date the Mandatory Prepayment Amount is paid in full, whichever is less, multiplied by the Per
Share Market Value on (x) the date the Mandatory Prepayment Amount is demanded or otherwise due or (y) the date the Mandatory
Prepayment Amount is paid in full, whichever is greater, and (ii) all other amounts, costs, expenses and liquidated damages due in
respect of such Debentures.

"Original Issue Date" shall mean the date of the first issuance of the Debentures regardless of the number of transfers
of any Debenture and regardless of the number of instruments which may be issued to evidence such Debenture.

"Per Share Market Value" means on any particular date the VWAP on such date.

"Person" means a corporation, an association, a partnership, organization, a business, an individual, a government or
political subdivision thereof or a governmental agency.

"Purchase Agreement" means the Securities Purchase Agreement, dated as of July 18, 2002, to which the Company and the
original Holder are parties, 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 Original Issue Date, to which
the Company and the original Holder are parties, as amended, modified or supplemented from time to time in accordance with its
terms.

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

"Trading Day" means (a) a day on which the shares of Common Stock are traded on the OTC Bulletin Board or on such
Subsequent Market on which the shares of Common

16

   

Stock are then listed or quoted, or (b) if the shares of Common Stock are not
quoted on the OTC Bulletin Board or a Subsequent Market, a day on which the shares of Common Stock are quoted in the
over-the-counter market as reported by the National Quotation Bureau Incorporated (or any similar organization or
agency succeeding its functions of reporting prices); provided, that in the event that the shares of Common Stock are not
listed or quoted as set forth in (a), (b) and (c) hereof, then Trading Day shall mean a Business Day.

"Transaction Documents" shall have the meaning set forth in the Purchase Agreement.

"Underlying Shares" means the shares of Common Stock issuable upon conversion of Debentures or as payment of interest in
accordance with the terms hereof.

"Underlying Shares Registration Statement" means a registration statement meeting the requirements set forth in the
Registration Rights Agreement, covering among other things the resale of the Underlying Shares and naming the Holder as a "selling
stockholder" thereunder.

"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 the OTC Bulletin Board or a Subsequent Market, the daily volume weighted average price of the
Common Stock for such date (or the nearest preceding date) on the OTC Bulletin Board or primary Subsequent Market on which the
Common Stock is then listed or quoted as reported by Bloomberg Financial L.P. (based on a trading day from 9:30 a.m. ET to 4:02
p.m. Eastern Time) using the VAP function; (b)  if the Common Stock is not then listed or quoted on the OTC Bulletin Board or
a Subsequent Market and if prices for the Common Stock are then reported in the "Pink Sheets" published by the National Quotation
Bureau Incorporated (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid
price per share of the Common Stock so reported; or (d) in all other cases, the fair market value of a share of Common Stock
as determined by an independent appraiser selected in good faith by the Purchasers.

Section 6.   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, interest and liquidated damages (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 and is secured by a security interest in certain pledged securities of the Company’s shareholders
as set forth in that certain Security and Pledge Agreement, dated as of the Original Issue Date, among the original holders of the
Convertible Debentures and the shareholders signatory to said agreement.  This Debenture ranks pari passu with
all other Debentures now or hereafter issued under the terms set forth herein.  As long as there are Debentures outstanding,
the Company shall not and shall cause it subsidiaries not to, without the consent of the Holders, (a) amend its certificate of
incorporation, bylaws or other charter documents so as to adversely affect any rights of the Holders; (b) repay,

17

   

repurchase or
offer to repay, repurchase or otherwise acquire shares of its Common Stock or other equity securities other than as to the
Underlying Shares to the extent permitted or required under the Transaction Documents; or (c) enter into any agreement with respect
to any of the foregoing. 

Section 7.   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 indemnity,
if requested, all reasonably satisfactory to the Company.

Section 8.  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. The Company will not and will not permit any of its 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 therefrom that is
senior in any respect to the Company’s obligations under the Debentures.

Section 9.  All questions concerning the construction, validity, enforcement and interpretation of this Debenture
shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to
the principles of conflicts of law thereof.  Each party agrees that all legal proceedings concerning the interpretations,
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 any such court, or such New York Courts are improper or inconvenient
venue for such proceeding.  Each party hereby irrevocably waives personal service of process and consents to process being
served in any such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery
(with evidence of delivery) to such party at the address in effect for notices to it under this Debenture and agrees that such
service shall constitute good and sufficient service of process and notice thereof.  Nothing contained herein shall be deemed
to limit in any way any right to serve process in any manner permitted by law. Each party hereto hereby irrevocably waives, to the
fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating
to this Debenture or the transactions contemplated hereby. If 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 with the investigation, preparation and prosecution of such action or
proceeding.

18

   

Section 10.  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 must be in writing.

Section 11.  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 the Debentures 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.

Section 12.  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.

Section 13. Secured Obligation. 
The Company's obligations under this Debenture are secured pursuant to the Security
Agreement, dated July 18, 2002, entered into among the Company and the Holder and the other Purchaser’s signatory
thereto.

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

19

   

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

		

SUMMUS, INC. (USA)

 

By:_____________________________________

     Name:

     Title: 

    

 

 

   

 ANNEX A

NOTICE OF CONVERSION

The undersigned hereby elects to convert principal and, if specified, interest under the 6%  Convertible Secured Debenture
of Summus, Inc. (USA), (the "Company") due on July __, 2007, into shares of common stock, $0.001 par value per share (the "Common
Stock"), of the Company according to the conditions hereof, as of the date written below.  If shares 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
Company’s Common Stock does not exceed the amounts determined in accordance with Section 13(d) of the Exchange Act, specified
under Section 4 of this Debenture.

	Conversion calculations:	
		Date to Effect Conversion:
		Principal Amount of Debentures to be Converted
		

Payment of Interest in Kind    
 ̈
Yes  ̈
No

          If yes, $ _______ of Interest Accrued on

          Account of Conversion at Issue

    
		Number of shares of Common Stock to be Issued:
		Applicable Conversion Price:
		Signature:
		Name:
		Address:

 

 

 

   

Schedule 1

CONVERSION SCHEDULE

6% Convertible Secured Debentures due on July __, 2007, in the aggregate principal amount of $____________ issued by Summus,
Inc. (USA).  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

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

  

 

 

22Prepared for Summus, Inc. (USA) by EDGARfile.net

EXHIBIT 4.7

 

REGISTRATION RIGHTS AGREEMENT

This Registration Rights Agreement (this "Agreement")
is made and entered into as of July 18, 2002, among Summus, Inc. (USA), a Florida corporation (the "Company"), and the
purchasers signatory hereto (each such purchaser is a "Purchaser" and all such purchasers are, collectively, the
"Purchasers").

This Agreement is made pursuant to the Securities Purchase
Agreement, dated as of the date hereof among the Company and the Purchasers (the "Purchase Agreement").

The Company and the Purchasers hereby agree as follows:

1. Definitions

Capitalized terms used and not otherwise defined herein that are defined in the Purchase Agreement shall have the meanings
given such terms in the Purchase  Agreement. As used in this Agreement, the following terms shall have the following
meanings:

"Business Day" means any day except Saturday, Sunday and any day which shall be a legal holiday or a day on which banking
institutions in the State of New York or the State of California are authorized or required by law or other government actions to
close.

"Effectiveness Date" means, with respect to the initial Registration Statement required to be filed hereunder as to
shares of Common Stock underlying the Debentures and Warrants, the 45th calendar day  following the Closing Date;
provided, however, in the event that the Company is notified by the Commission that one of the above Registration
Statements will not be reviewed or is no longer subject to further review and comments, the Effectiveness Date as to such
Registration Statement shall be the fifth Trading Day following the date on which the Company is so notified if such date precedes
the dates required above.

"Effectiveness Period" shall have the meaning set forth in Section 2(a).

"Filing Date" means, with respect to the initial Registration Statement required to be filed hereunder as to shares of
Common Stock underlying the Debentures and Warrants, the 15th calendar day following the Closing Date.

"Holder" or "Holders" means the holder or holders, as the case may be, from time to time of Registrable
Securities.

1

   

"Indemnified Party" shall have the meaning set forth in Section 5(c).

"Indemnifying Party" shall have the meaning set forth in Section 5(c).

"Prospectus" means the prospectus
included in a Registration Statement (including, without limitation, a prospectus that includes any information previously omitted
from a prospectus filed as part of an effective registration statement in reliance upon Rule 430A promulgated under the Securities
Act), as amended or supplemented by any prospectus supplement, with respect to the terms of the offering of any portion of the
Registrable Securities covered by a Registration Statement, and all other amendments and supplements to the Prospectus, including
post-effective amendments, and all material incorporated by reference or deemed to be incorporated by reference in such
Prospectus.

"Registrable Securities" means all
of the shares of Common Stock issuable upon conversion in full of the Debentures, exercise in full of the Warrants, shares issuable
in lieu of the payment of liquidated damages, together with any securities issued or issuable upon any stock split, dividend or
other distribution recapitalization or similar event with respect to the foregoing, including the Warrants held by HPC Capital
Management and issued pursuant to the Securities Purchase Agreement.

"Registration Statement" means the
registration statements required to be filed hereunder and any additional registration statements contemplated by Section 3(c),
including (in each case) the Prospectus, amendments and supplements to such registration statement or Prospectus, including pre-
and post-effective amendments, all exhibits thereto, and all material incorporated by reference or deemed to be incorporated by
reference in such registration statement.

"Rule 415" means Rule 415
promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or
regulation hereafter adopted by the Commission having substantially the same effect as such Rule.

"Rule 424" means Rule 424
promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or
regulation hereafter adopted by the Commission having substantially the same effect as such Rule.

"Special Counsel" means one special
counsel to the Holders, for which the Holders will be reimbursed by the Company pursuant to Section 4.

"Warrants" shall mean the Common
Stock purchase warrants issued to the Purchasers pursuant to the Purchase Agreement.

2

   

2. Shelf Registration

(a)  On or prior to each Filing Date,
the Company shall prepare and file with the Commission a "Shelf" Registration Statement covering the resale of all Registrable
Securities applicable to such Filing Date for an offering to be made on a continuous basis pursuant to Rule 415. The Registration
Statement shall be on Form S-1 and shall contain (except if otherwise directed by the Holders) substantially the "Plan of
Distribution" attached hereto as Annex A.  The Company shall use its best efforts to cause the Registration Statement
to be declared effective under the Securities Act as promptly as possible after the filing thereof, but in any event prior to the
applicable Effectiveness Date, and shall use its best efforts to keep such Registration Statement continuously effective under the
Securities Act until the date which is two years after the date that such Registration Statement is declared effective by the
Commission or such earlier date when all Registrable Securities covered by such Registration Statement have been sold or may be
sold without volume restrictions pursuant to Rule 144(k) as determined by the counsel to the Company pursuant to a written opinion
letter to such effect, addressed and acceptable to the Company’s transfer agent and the affected Holders (the
"Effectiveness Period").

(b) The Registration Statements to be filed
hereunder shall include a number of shares of Common Stock registered on behalf of the Holders equal to no less than the sum of (i)
100% of the number of shares of Common Stock issuable upon conversion in full of the Debentures subject to such Registration
Statement, assuming for such purposes that such Debentures are outstanding for three years and the lowest possible conversion price
in effect during the period between the Closing and the filing date of the Registration Statement, and that all accrued interest
are added to the principal amount outstanding of such Debentures, and (ii) the number of shares of Common Stock issuable upon
exercise in full of the Warrants subject to such Registration Statement.

(c)  If (a) a Registration Statement
is not filed on or prior to its respective Filing Date (if the Company files such Registration Statement without affording the
Holder the opportunity to review and comment on the same as required by Section 3(a) hereof, the Company shall not be deemed to
have satisfied this clause (a)), or (b) the Company fails to file with the Commission a request for acceleration in accordance with
Rule 461 promulgated under the Securities Act, within five Business Days of the date that the Company is notified (orally or in
writing, whichever is earlier) by the Commission that a Registration Statement will not be "reviewed," or not subject to further
review, or (c) a Registration Statement filed hereunder is not declared effective by the Commission on or prior to its
Effectiveness Date, or (d) after a Registration Statement is filed with and declared effective by the Commission, such Registration
Statement ceases to be effective as to all Registrable Securities to which it is required to relate at any time prior to the
expiration of the Effectiveness Period without being succeeded within twenty Business Days by an amendment to such Registration
Statement or by a subsequent

3

   

Registration Statement filed with and declared effective by the Commission; provided, however, that
in the event  a post-effective amendment is reviewed by the Commission, then such period shall be extended to the
earlier of 45 consecutive Trading Days or the date such amendment is declared
effective by the Commission; or (e) the Common Stock shall be delisted or
suspended from trading on the OTC Bulletin Board (“OTC”) or the Nasdaq Smallcap Market or on the Nasdaq National
Market, the New York Stock Exchange or the American Stock Exchange (each, a "Subsequent Market") for more than five Business
Days (which need not be consecutive Business Days), or (f) the conversion or exercise rights of the Holders pursuant to the
Debentures and the Warrants are suspended for any reason, or (g) an amendment to a Registration Statement is not filed by the
Company with the Commission within ten Business Days of the Commission's notifying the Company that such amendment is required in
order for such Registration Statement to be declared effective (any such failure or breach being referred to as an "Event," and for
purposes of clauses (a), (c), (f) the date on which such Event occurs, or for purposes of clause (b) the date on which such five
Business Day period is exceeded, or for purposes of clauses (d) and (g) the date which such ten Business Day-period is exceeded, or
for purposes of clause (e) the date on which such five Business Day-period is
exceeded (or, as the case may be, 45 Business Day-period), being referred to as "Event Date"),
then, on each such Event Date and every monthly anniversary thereof until the applicable Event is cured, the Company shall pay to
each Holder an amount in cash, as liquidated damages and not as a penalty, equal to 2.0% of (i) the purchase price paid by such
Holder pursuant to the Purchase Agreement, and (ii) if the Warrants are “in the money”, the value of any outstanding
Warrants (valued at the difference between the average VWAP during the applicable month and the Exercise Price multiplied by the
number of shares of Common Stock the Warrants are exercisable into) for the first month following such Event Date and 2.0% per
month thereafter. If the Company fails to pay any liquidated damages pursuant to this Section in full within seven days after the
date payable, the Company will pay interest thereon at a rate of 18% per annum (or such lesser maximum amount that is permitted to
be paid by applicable law) to the Holder, accruing daily from the date such liquidated damages are due until such amounts, plus all
such interest thereon, are paid in full and at the option of the Holder, such liquidated damages be paid in shares of Common Stock
under the Warrant. The liquidated damages pursuant to the terms hereof shall apply on a pro-rata basis for any portion of a month
prior to the cure of an Event.

3. Registration Procedures

4

   

In connection with the Company's
registration obligations hereunder, the Company shall:

(a) Not less than five Business Days prior
to the filing of each Registration Statement or any related Prospectus or any amendment or supplement thereto (including any
document that would be incorporated or deemed to be incorporated therein by reference), the Company shall, (i) furnish to the
Holders and their Special Counsel copies of all such documents proposed to be filed, which documents (other than those incorporated
or deemed to be incorporated by reference) will be subject to the review of such Holders and their Special Counsel, and (ii) cause
its officers and directors, counsel and independent certified public accountants to respond to such inquiries as shall be
necessary, in the reasonable opinion of respective counsel to conduct a reasonable investigation within the meaning of the
Securities Act. The Company shall not file the Registration Statement or any such Prospectus or any amendments or supplements
thereto to which the Holders of a majority of the Registrable Securities and their Special Counsel shall reasonably object,
provided, the Company is notified of such objection no later than 5 Business Days after the Holders have been so furnished copies
of such documents.

(b) (i) Prepare and file with the
Commission such amendments, including post-effective amendments, to a Registration Statement and the Prospectus used in connection
therewith as may be necessary to keep a Registration Statement continuously effective as to the applicable Registrable Securities
for the Effectiveness Period and prepare and file with the Commission such additional Registration Statements in order to register
for resale under the Securities Act all of the Registrable Securities; (ii) cause the related Prospectus to be amended or
supplemented by any required Prospectus supplement, and as so supplemented or amended to be filed pursuant to Rule 424; (iii)
respond as promptly as reasonably possible, and in any event within ten days, to any comments received from the Commission with
respect to a Registration Statement or any amendment thereto and as promptly as reasonably possible provide the Holders true and
complete copies of all correspondence from and to the Commission relating to a Registration Statement; and (iv) comply in all
material respects with the provisions of the Securities Act and the Exchange Act with respect to the disposition of all Registrable
Securities covered by a Registration Statement during the applicable period in accordance with the intended methods of disposition
by the Holders thereof set forth in such Registration Statement as so amended or in such Prospectus as so supplemented.

(c)  [RESERVED]

(d) Notify the Holders of Registrable
Securities to be sold and their Special Counsel as promptly as reasonably possible (and, in the case of (i)(A) below, not less than
five Business Days prior to such filing) and (if requested by any such Person) confirm such notice in writing no later than one
Business Day following the day (i)(A) when a Prospectus or any Prospectus supplement or post-effective amendment to a Registration
Statement is proposed to be filed; (B) when the Commission notifies the

5

   

Company whether there will be a "review" of such
Registration Statement and whenever the Commission comments in writing on such Registration Statement (the Company shall provide
true and complete copies thereof and all written responses thereto to each of the Holders); and (C) with respect to a Registration
Statement or any post-effective amendment, when the same has become effective; (ii) of any request by the Commission or any other
Federal or state governmental authority for amendments or supplements to a Registration Statement or Prospectus or for additional
information; (iii) of the issuance by the Commission of any stop order suspending the effectiveness of a Registration Statement
covering any or all of the Registrable Securities or the initiation of any Proceedings for that purpose; (iv) if at any time any of
the representations and warranties of the Company contained in any agreement contemplated hereby ceases to be true and correct in
all material respects; (v) of the receipt by the Company of any notification with respect to the suspension of the qualification or
exemption from qualification of any of the Registrable Securities for sale in any jurisdiction, or the initiation or threatening of
any Proceeding for such purpose; and (vi) of the occurrence of any event or passage of time that makes the financial statements
included in a Registration Statement ineligible for inclusion therein or any statement made in a Registration Statement or
Prospectus or any document incorporated or deemed to be incorporated therein by reference untrue in any material respect or that
requires any revisions to a Registration Statement, Prospectus or other documents so that, in the case of a Registration Statement
or the Prospectus, as the case may be, it will not contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were
made, not misleading.

(e) Promptly deliver to each Holder and
their Special Counsel, without charge, as many copies of the Prospectus or Prospectuses (including each form of prospectus) and
each amendment or supplement thereto as such Persons may reasonably request. The Company hereby consents to the use of such
Prospectus and each amendment or supplement thereto by each of the selling Holders in connection with the offering and sale of the
Registrable Securities covered by such Prospectus and any amendment or supplement thereto.

(f) Prior to any public offering of
Registrable Securities, use its best efforts to register or qualify or cooperate with the selling Holders and their Special Counsel
in connection with the registration or qualification (or exemption from such registration or qualification) of such Registrable
Securities for offer and sale under the securities or Blue Sky laws of such jurisdictions within the United States as any Holder
requests in writing, to keep each such registration or qualification (or exemption therefrom) effective during the Effectiveness
Period and to do any and all other acts or things necessary or advisable to enable the disposition in such jurisdictions of the
Registrable Securities covered by a Registration Statement; provided, that the Company shall not be required to qualify generally
to do business in any jurisdiction where it is not then so qualified or subject the Company to any material tax in any such
jurisdiction where it is not then so subject.

(g) Cooperate with the Holders to
facilitate the timely preparation and delivery of certificates representing Registrable Securities to be delivered to a transferee
pursuant

6

   

to a Registration Statement, which certificates shall be free, to the extent permitted by the Purchase Agreement, of all
restrictive legends, and to enable such Registrable Securities to be in such denominations and registered in such names as any such
Holders may request.

(h) Upon the occurrence of any event
contemplated in this Section 3, as promptly as reasonably possible, prepare a supplement or amendment, including a post-effective
amendment, to a Registration Statement or a supplement to the related Prospectus or any document incorporated or deemed to be
incorporated therein by reference, and file any other required document so that, as thereafter delivered, neither a Registration
Statement nor such Prospectus will contain an untrue statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the circumstances under which they were made,
not misleading.

(i) Comply with all applicable rules and
regulations of the Commission.

(j)            Use its best efforts to avoid the issuance of, or, if
issued, obtain the withdrawal of (i) any order suspending the effectiveness of a Registration Statement, or (ii) any suspension of
the qualification (or exemption from qualification) of any of the Registrable Securities for sale in any jurisdiction, at the
earliest practicable moment.

(k)            Furnish to each Holder and their Special Counsel, without
charge, at least one conformed copy of each Registration Statement and each amendment thereto, including financial statements and
schedules, all documents incorporated or deemed to be incorporated therein by reference, and all exhibits to the extent requested
by such Person (including those previously furnished or incorporated by reference) promptly after the filing of such documents with
the Commission.

4. Registration Expenses. All fees and expenses incident to the performance of
or compliance with this Agreement by the Company shall be borne by the Company whether or not any Registrable Securities are sold
pursuant to the Registration Statement. The fees and expenses referred to in the foregoing sentence shall include, without
limitation, (i) all registration and filing fees (including, without limitation, fees and expenses (A) with respect to filings
required to be made with the Nasdaq Smallcap Market and any Subsequent Market on which the Common Stock is then listed for trading,
and (B) in compliance with applicable state securities or Blue Sky laws (including, without limitation, fees and disbursements of
counsel for the Company in connection with Blue Sky qualifications or exemptions of the Registrable Securities and determination of
the eligibility of the Registrable Securities for investment under the laws of such jurisdictions as requested by the Holders )),
(ii) printing expenses (including, without limitation, expenses of printing certificates for Registrable Securities and of printing
prospectuses requested by the Holders), (iii) messenger, telephone and delivery expenses, (iv) fees and disbursements of counsel
for the Company and Special Counsel for the Holders and (v) fees and expenses of all other Persons retained by the Company in
connection with the consummation of the transactions contemplated by this Agreement.

7

   

In addition, the Company shall be
responsible for all of its internal expenses incurred in connection with the consummation of the transactions contemplated by this
Agreement (including, without limitation, all salaries and expenses of its officers and employees performing legal or accounting
duties), the expense of any annual audit and the fees and expenses incurred in connection with the listing of the Registrable
Securities on any securities exchange as required hereunder.

5. Indemnification

(a) Indemnification by the Company.
The Company shall, notwithstanding any termination of this Agreement, indemnify and hold harmless each Holder, the officers,
directors, agents, brokers (including brokers who offer and sell Registrable Securities as principal as a result of a pledge or any
failure to perform under a margin call of Common Stock), investment advisors and employees of each of them, each Person who
controls any such Holder (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) and the
officers, directors, agents and employees of each such controlling Person, to the fullest extent permitted by applicable law, from
and against any and all losses, claims, damages, liabilities, costs (including, without limitation, costs of preparation and
attorneys' fees) and expenses (collectively, "Losses"), as incurred, arising out of or relating to any untrue or alleged untrue
statement of a material fact contained in a Registration Statement, any Prospectus or any form of prospectus or in any amendment or
supplement thereto or in any preliminary prospectus, or arising out of or relating to any omission or alleged omission of a
material fact required to be stated therein or necessary to make the statements therein (in the case of any Prospectus or form of
prospectus or supplement thereto, in light of the circumstances under which they were made) not misleading, except to the extent,
but only to the extent, that (1) such untrue statements or omissions are based solely upon information regarding such Holder
furnished in writing to the Company by such Holder expressly for use therein, or to the extent that such information relates to
such Holder or such Holder's proposed method of distribution of Registrable Securities and was reviewed and expressly approved in
writing by such Holder expressly for use in a Registration Statement, such Prospectus or such form of Prospectus or in any
amendment or supplement thereto or (2) in the case of an occurrence of an event of the type specified in Section 3(d)(ii)-(vi), the
use by such Holder of an outdated or defective Prospectus after the Company has notified such Holder in writing that the Prospectus
is outdated or defective and prior to the receipt by such Holder of the Advice contemplated in Section 6(e). The Company shall
notify the Holders promptly of the institution, threat or assertion of any Proceeding of which the Company is aware in connection
with the transactions contemplated by this Agreement.

(b) Indemnification by Holders. Each
Holder shall, severally and not jointly, indemnify and hold harmless the Company, its directors, officers, agents and employees,
each Person who controls the Company (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act),
and the directors, officers, agents or employees of such controlling Persons, to the fullest extent permitted by applicable law,
from and against all Losses (as determined by a court of competent jurisdiction in a final judgment not subject to appeal or
review) arising solely out of or based solely upon any

8

   

untrue statement of a material fact contained in any Registration Statement,
any Prospectus, or any form of prospectus, or in any amendment or supplement thereto, or arising solely out of or based solely upon
any omission of a material fact required to be stated therein or necessary to make the statements therein not misleading to the
extent, but only to the extent, that such untrue statement or omission is contained in any information so furnished in writing by
such Holder to the Company specifically for inclusion in such Registration Statement or such Prospectus or to the extent that (1)
such untrue statements or omissions are based solely upon information regarding such Holder furnished in writing to the Company by
such Holder expressly for use therein, or to the extent that such information relates to such Holder or such Holder's proposed
method of distribution of Registrable Securities and was reviewed and expressly approved in writing by such Holder expressly for
use in the Registration Statement, such Prospectus or such form of Prospectus or in any amendment or supplement thereto or (2) in
the case of an occurrence of an event of the type specified in Section 3(d)(ii)-(vi), the use by such Holder of an outdated or
defective Prospectus after the Company has notified such Holder in writing that the Prospectus is outdated or defective and prior
to the receipt by such Holder of the Advice contemplated in Section 6(e). In no event shall the liability of any selling Holder
hereunder be greater in amount than the dollar amount of the net proceeds received by such Holder upon the sale of the Registrable
Securities giving rise to such indemnification obligation.

(c) Conduct of Indemnification
Proceedings. If any Proceeding shall be brought or asserted against any Person entitled to indemnity hereunder (an
"Indemnified Party"), such Indemnified Party shall promptly notify the Person from whom indemnity is sought (the
"Indemnifying Party") in writing, and the Indemnifying Party shall assume the defense thereof, including the employment of counsel
reasonably satisfactory to the Indemnified Party and the payment of all fees and expenses incurred in connection with defense
thereof; provided, that the failure of any Indemnified Party to give such notice shall not relieve the Indemnifying Party of its
obligations or liabilities pursuant to this Agreement, except (and only) to the extent that it shall be finally determined by a
court of competent jurisdiction (which determination is not subject to appeal or further review) that such failure shall have
proximately and materially adversely prejudiced the Indemnifying Party.

An Indemnified Party shall have the right
to employ separate counsel in any such Proceeding and to participate in the defense thereof, but the fees and expenses of such
counsel shall be at the expense of such Indemnified Party or Parties unless: (1) the Indemnifying Party has agreed in writing to
pay such fees and expenses; or (2) the Indemnifying Party shall have failed promptly to assume the defense of such Proceeding and
to employ counsel reasonably satisfactory to such Indemnified Party in any such Proceeding; or (3) the named parties to any such
Proceeding (including any impleaded parties) include both such Indemnified Party and the Indemnifying Party, and such Indemnified
Party shall have been advised by counsel that a conflict of interest is likely to exist if the same counsel were to represent such
Indemnified Party and the Indemnifying Party (in which case, if such Indemnified Party notifies the Indemnifying Party in writing
that it elects to employ separate counsel at the expense of the

9

   

Indemnifying Party, the Indemnifying Party shall not have the right
to assume the defense thereof and such counsel shall be at the expense of the Indemnifying Party). The Indemnifying Party shall not
be liable for any settlement of any such Proceeding effected without its written consent, which consent shall not be unreasonably
withheld. No Indemnifying Party shall, without the prior written consent of the Indemnified Party, effect any settlement of any
pending Proceeding in respect of which any Indemnified Party is a party, unless such settlement includes an unconditional release
of such Indemnified Party from all liability on claims that are the subject matter of such Proceeding.

All fees and expenses of the Indemnified
Party (including reasonable fees and expenses to the extent incurred in connection with investigating or preparing to defend such
Proceeding in a manner not inconsistent with this Section) shall be paid to the Indemnified Party, as incurred, within ten Business
Days of written notice thereof to the Indemnifying Party (regardless of whether it is ultimately determined that an Indemnified
Party is not entitled to indemnification hereunder; provided, that the Indemnifying Party may require such Indemnified Party to
undertake to reimburse all such fees and expenses to the extent it is finally judicially determined that such Indemnified Party is
not entitled to indemnification hereunder).

(d) Contribution. If a claim for
indemnification under Section 5(a) or 5(b) is unavailable to an Indemnified Party (by reason of public policy or otherwise), then
each Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall contribute to the amount paid or payable by such
Indemnified Party as a result of such Losses, in such proportion as is appropriate to reflect the relative fault of the
Indemnifying Party and Indemnified Party in connection with the actions, statements or omissions that resulted in such Losses as
well as any other relevant equitable considerations.  The relative fault of such Indemnifying Party and Indemnified Party
shall be determined by reference to, among other things, whether any action in question, including any untrue or alleged untrue
statement of a material fact or omission or alleged omission of a material fact, has been taken or made by, or relates to
information supplied by, such Indemnifying Party or Indemnified Party, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such action, statement or omission. The amount paid or payable by a party as a
result of any Losses shall be deemed to include, subject to the limitations set forth in Section 5(c), any reasonable attorneys' or
other reasonable fees or expenses incurred by such party in connection with any Proceeding to the extent such party would have been
indemnified for such fees or expenses if the indemnification provided for in this Section was available to such party in accordance
with its terms.

The parties hereto agree that it would not
be just and equitable if contribution pursuant to this Section 5(d) were determined by pro rata allocation or by any other method
of allocation that does not take into account the equitable considerations referred to in the immediately preceding
paragraph.  Notwithstanding the provisions of this Section 5(d), no Holder shall be required to contribute, in the aggregate,
any amount in excess of the amount by which the proceeds actually received by such Holder from the sale of the Registrable
Securities subject to the Proceeding exceeds the amount of any

10

   

damages that such Holder has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged omission.

The indemnity and contribution agreements
contained in this Section are in addition to any liability that the Indemnifying Parties may have to the Indemnified Parties.

6. Miscellaneous

(a) Amendments and Waivers. The
provisions of this Agreement, including the provisions of this sentence, may not be amended, modified or supplemented, and waivers
or consents to departures from the provisions hereof may not be given, unless the same shall be in writing and signed by the
Company and the Holders of at least two-thirds of the then outstanding Registrable Securities. Notwithstanding the foregoing, a
waiver or consent to depart from the provisions hereof with respect to a matter that relates exclusively to the rights of Holders
and that does not directly or indirectly affect the rights of other Holders may be given by Holders of at least a majority of the
Registrable Securities to which such waiver or consent relates; provided, however, that the provisions of this
sentence may not be amended, modified, or supplemented except in accordance with the provisions of the immediately preceding
sentence.

(b) No Inconsistent Agreements.
Neither the Company nor any of its subsidiaries has entered, as of the date hereof, nor shall the Company or any of its
subsidiaries, on or after the date of this Agreement, enter into any agreement with respect to its securities, that would have the
effect of impairing the rights granted to the Holders in this Agreement or otherwise conflicts with the provisions hereof. Except
as and to the extent specified in Schedule 6(b) hereto, neither the Company nor any of its subsidiaries has previously entered into
any agreement granting any registration rights with respect to any of its securities to any Person that have not been satisfied in
full.

(c) No Piggyback on Registrations.
Except as and to the extent specified in Schedule 6(c) hereto, neither the Company nor any of its security holders (other than the
Holders in such capacity pursuant hereto) may include securities of the Company in the Registration Statement other than the
Registrable Securities.

(d) Compliance. Each Holder
covenants and agrees that it will comply with the prospectus delivery requirements of the Securities Act as applicable to it in
connection with sales of Registrable Securities pursuant to the Registration Statement.

(e) Discontinued Disposition. Each
Holder agrees by its acquisition of such Registrable Securities that, upon receipt of a notice from the Company of the occurrence
of any event of the kind described in Sections 3(d), such Holder will forthwith discontinue disposition of such Registrable
Securities under a Registration Statement until such Holder's receipt of the copies of the supplemented Prospectus and/or amended
Registration Statement contemplated by Section 3(h), or until it is advised in writing (the "Advice") by the Company that the use
of the applicable Prospectus may be resumed,

11

   

and, in either case, has received copies of any additional or supplemental filings
that are incorporated or deemed to be incorporated by reference in such Prospectus or Registration Statement. The Company may
provide appropriate stop orders to enforce the provisions of this paragraph.

(f) Piggy-Back Registrations. If at
any time during the Effectiveness Period there is not an effective Registration Statement covering all of the Registrable
Securities and the Company shall determine to prepare and file with the Commission a registration statement relating to an offering
for its own account or the account of others under the Securities Act of any of its equity securities, other than on Form S-4 or
Form S-8 (each as promulgated under the Securities Act) or their then equivalents relating to equity securities to be issued solely
in connection with any acquisition of any entity or business or equity securities issuable in connection with stock option or other
employee benefit plans, then the Company shall send to each Holder written notice of such determination and, if within fifteen days
after receipt of such notice, any such Holder shall so request in writing, the Company shall include in such registration statement
all or any part of such Registrable Securities such holder requests to be registered; provided, that, the Company shall not be
required to register any Registrable Securities pursuant to this Section 6(f) that are eligible for resale pursuant to Rule 144(k)
promulgated under the Securities Act.

(g) Notices. Any and all notices or
other communications or deliveries required or permitted to be provided hereunder shall be delivered as set forth in the Purchase
Agreement. 

(h) Successors and Assigns. This
Agreement shall inure to the benefit of and be binding upon the successors and permitted assigns of each of the parties and shall
inure to the benefit of each Holder. The Company may not assign its rights or obligations hereunder without the prior written
consent of each Holder. Each Holder may assign their respective rights hereunder in the manner and to the Persons as permitted
under the Purchase Agreement.

(i) Counterparts. This Agreement may
be executed in any number of counterparts, each of which when so executed shall be deemed to be an original and, all of which taken
together shall constitute one and the same Agreement. In the event that any signature is delivered by facsimile transmission, such
signature shall create a valid binding obligation of the party executing (or on whose behalf such signature is executed) the same
with the same force and effect as if such facsimile signature were the original thereof.

 (j) Governing Law. All questions
concerning the construction, validity, enforcement and interpretation of 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 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

12

   

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. 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 to such party at the address in effect for notices to it under this 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 manner permitted by law.  Each party hereto hereby irrevocably
waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out
of or relating to this Agreement or the transactions contemplated hereby. If either party shall commence a Proceeding to enforce
any provisions of this Agreement, then the prevailing party in such Proceeding shall be reimbursed by the other party for its
attorneys fees and other costs and expenses incurred with the investigation, preparation and prosecution of such Proceeding.

(k) Cumulative Remedies. The
remedies provided herein are cumulative and not exclusive of any remedies provided by law.

(l) Severability. If any term,
provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, illegal, void or
unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full force and
effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their reasonable efforts to find
and employ an alternative means to achieve the same or substantially the same result as that contemplated by such term, provision,
covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that they would have executed the
remaining terms, provisions, covenants and restrictions without including any of such that may be hereafter declared invalid,
illegal, void or unenforceable.

(m) Headings. The headings in this
Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.

(n) Independent Nature of Purchasers'
Obligations and Rights. The obligations of each Purchaser hereunder is several and not joint with the obligations of any other
Purchaser hereunder, and no Purchaser shall be responsible in any way for the performance of the obligations of any other Purchaser
hereunder. Nothing contained herein or in any other agreement or document delivered at any closing, and no action taken by any
Purchaser pursuant hereto or thereto, shall be deemed to constitute the Purchasers as a partnership, an association, a joint
venture or any other kind of entity, or create a presumption that the Purchasers are in any way acting in concert with respect to
such obligations or the transactions contemplated by this Agreement. Each Purchaser shall be entitled to protect and enforce its
rights, including without limitation the rights arising out of this Agreement, and it shall not be necessary for any other
Purchaser to be joined as an additional party in any proceeding for such purpose.

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

13

   

IN WITNESS WHEREOF, the parties have
executed this Registration Rights Agreement as of the date first written above.

 

		

SUMMUS, INC. (USA)

 

By: ____________________________________

       Name:

       Title:

      

 ALPHA CAPITAL
AG

      By:_________________________

           Name: 

           Title:

      PALISADES EQUITY FUND L.P. 

 

      By:_________________________

           Name:

           Title:

    

 

 

14

   

Plan of Distribution

The Selling Stockholders and any of their pledgees, assignees and successors-in-interest may, from time to time, sell any or all
of their shares of Common Stock on any stock exchange, market or trading facility on which the shares are traded or in private
transactions.  These sales may be at fixed or negotiated prices.  The Selling Stockholders may use any one or more of the
following methods when selling shares:

  	ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers;

      

      
	block trades in which the broker-dealer will attempt to sell the shares as agent but may position and resell a portion of
the block as principal to facilitate the transaction;

      

      
	purchases by a broker-dealer as principal and resale by the broker-dealer for its account;

      

      
	an exchange distribution in accordance with the rules of the applicable exchange;

      

      
	privately negotiated transactions;

      

      
	short sales

      

      
	broker-dealers may agree with the Selling Stockholders to sell a specified number of such shares at a stipulated price per
share;

      

      
	a combination of any such methods of sale; and

      

      
	any other method permitted pursuant to applicable law.

The Selling Stockholders may also sell shares under Rule 144 under the Securities Act, if available, rather than under this
prospectus.  Broker-dealers engaged by the Selling Stockholders may arrange for other brokers-dealers to
participate in sales.  Broker-dealers may receive commissions or discounts from the Selling Stockholders (or, if any
broker-dealer acts as agent for the purchaser of shares, from the purchaser) in amounts to be negotiated.  The Selling
Stockholders do not expect these commissions and discounts to exceed what is customary in the types of transactions involved.

The selling stockholder may from time to time pledge or grant a security interest in some or all of the Shares or common stock
or Warrant owned by them and, if they default in the performance of their secured obligations, the pledgees or secured parties may
offer and sell the shares of common stock from time to time under this prospectus, or under an amendment to this prospectus under
Rule 424(b)(3) or other applicable provision of the Securities Act of 1933 amending the list of selling stockholders to

15

   

include the
pledgee, transferee or other successors in interest as selling stockholders under this prospectus.

The selling stockholders also may transfer the shares of common stock in other circumstances, in which case the transferees,
pledgees or other successors in interest will be the selling beneficial owners for purposes of this prospectus.

The Selling Stockholders and any broker-dealers or agents that are involved in selling the shares may be deemed to be
"underwriters" within the meaning of the Securities Act in connection with such sales.  In such event, any commissions
received by such broker-dealers or agents and any profit on the resale of the shares purchased by them may be deemed to be
underwriting commissions or discounts under the Securities Act.  The Selling Stockholders have informed the Company that it
does not have any agreement or understanding, directly or indirectly, with any person to distribute the Common Stock.

The Company is required to pay all fees and expenses incident to the registration of the shares.  The Company has agreed to
indemnify the Selling Stockholders against certain losses, claims, damages and liabilities, including liabilities under the
Securities Act.

 

 

 

 

 

 

16

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