Document:

Exhibit 10.1

 

SECURITIES
PURCHASE AGREEMENT

 

This SECURITIES PURCHASE
AGREEMENT (the “Agreement”), dated as of March 4, 2013, is by and among Fuse Science, Inc., a Nevada
corporation with offices located at 6135 NW 167th Street, #E21, Miami Lakes, Florida 33015 (the “Company”),
and each of the investors listed on the Schedule of Buyers attached hereto (individually, a “Buyer” and collectively,
the “Buyers”).

 

RECITALS

 

A.The Company and
each Buyer is executing and delivering this Agreement in reliance upon the exemption from securities registration afforded by Section
4(a)(2) of the Securities Act of 1933, as amended (the “1933 Act”), and Rule 506 of Regulation D (“Regulation D”)
as promulgated by the United States Securities and Exchange Commission (the “SEC”) under the 1933 Act.

 

B.The Company has
authorized the issuance of (i) senior convertible notes, in the aggregate original principal amount of $1,500,000, in the form
attached hereto as Exhibit A-1 (the “Series A Notes”), which Series A Notes shall be convertible
into shares of the Company’s common stock, $0.001 par value per share (the “Common Stock”) (as converted,
collectively, the “Series A Conversion Shares”), in accordance with the terms of the Series A Notes and (ii)
senior subordinated convertible notes, in the aggregate original principal amount of $550,000, in the form attached hereto as Exhibit
A-2 (the “Series B Notes”, and together with the Series A Notes, the “Notes”), which
Series B Notes shall be convertible into shares of Common Stock (as converted, collectively, the “Series B Conversion
Shares”, and together with the Series A Conversion Shares, the “Conversion Shares”), in accordance
with the terms of the Series B Notes.

 

C. Each Buyer wishes
to purchase, and the Company wishes to sell, upon the terms and conditions stated in this Agreement, (i) either (x) a Series A
Note in the aggregate original principal amount set forth opposite such Buyer’s name in column (3) on the Schedule of Buyers
or (y) Series B Note in the aggregate original principal amount set forth opposite such Buyer’s name in column (4) on the
Schedule of Buyers, (ii) a warrant to initially acquire up to that number of additional shares of Common Stock set forth opposite
such Buyer’s name in column (5) on the Schedule of Buyers, in the form attached hereto as Exhibit B (the “Series
A Warrants”) (as exercised, collectively, the “Series A Warrant Shares”) and (iii) a warrant to initially
acquire up to that number of additional shares of Common Stock set forth opposite such Buyer’s name in column (6) on the
Schedule of Buyers, in the form attached hereto as Exhibit C (the “Series B Warrants”) (as exercised,
collectively, the “Series B Warrant Shares”). The Series A Warrants and the Series B Warrants are collectively
referred to herein as the “Warrants.” The Series A Warrant Shares and the Series B Warrant Shares are collectively
referred to herein as the “Warrant Shares.”

 

D.The Notes may
be entitled to interest and certain other amounts, which, at the option of the Company and subject to certain conditions, may be
paid in shares of Common Stock (the “Interest Shares”) or in cash.

 

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E.At the Closing,
the parties hereto shall execute and deliver a Registration Rights Agreement, in the form attached hereto as Exhibit D
(the “Registration Rights Agreement”), pursuant to which the Company has agreed to provide certain registration
rights with respect to the Registrable Securities (as defined in the Registration Rights Agreement), under the 1933 Act and the
rules and regulations promulgated thereunder, and applicable state securities laws.

 

F.The Notes, the
Conversion Shares, the Interest Shares, the Warrants and the Warrant Shares are collectively referred to herein as the “Securities.”

 

G.At the Closing,
solely to the extent any Buyers are purchasing Series B Notes hereunder, the parties hereto shall enter into a Subordination Agreement,
in the form and substance satisfactory to the Buyers purchasing the Series A Notes hereunder (the “Subordination Agreement”),
pursuant to which the parties hereto have agreed that the Series B Notes shall be subordinate to the Series A Notes as provided
thereunder.

 

AGREEMENT

 

NOW, THEREFORE, in
consideration of the premises and the mutual covenants contained herein and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the Company and each Buyer hereby agree as follows:

 

1.PURCHASE
AND SALE OF NOTES AND WARRANTS.

 

(a)Notes and
Warrants. Subject to the satisfaction (or waiver) of the conditions set forth in Sections 6 and 7 below, the Company shall
issue and sell to each Buyer, and each Buyer severally, but not jointly, shall purchase from the Company on the Closing Date (as
defined below), as applicable, either (x) a Series A Note in the original principal amount as is set forth opposite such Buyer’s
name in column (3) on the Schedule of Buyers or (y) a Series B Note in the original principal amount as is set forth opposite such
Buyer’s name in column (4) on the Schedule of Buyers, in each case, along with (i) Series A Warrants to initially acquire
up to that aggregate number of Series A Warrant Shares as is set forth opposite such Buyer’s name in column (5) on the Schedule
of Buyers and (ii) Series B Warrants to initially acquire up to that aggregate number of Series B Warrant Shares as is set forth
opposite such Buyer’s name in column (6) on the Schedule of Buyers.

 

(b)Closing.
The closing (the “Closing”) of the purchase of the Notes and the Warrants by the Buyers shall occur at the offices
of Greenberg Traurig, LLP, MetLife Building, 200 Park Avenue, New York, NY 10166. The date and time of the Closing (the “Closing
Date”) shall be 10:00 a.m., New York time, on the first (1st) Business Day on which the conditions to the Closing set
forth in Sections 6 and 7 below are satisfied or waived (or such other date as is mutually agreed to by the Company and each Buyer).
As used herein “Business Day” means any day other than a Saturday, Sunday or other day on which commercial banks
in New York, New York are authorized or required by law to remain closed.

 

(c)Purchase
Price. The aggregate purchase price for the Notes and the Warrants to be purchased by each Buyer (the “Purchase Price”)
shall be the amount set forth opposite such Buyer’s name in column (7) on the Schedule of Buyers. Each Buyer and the Company
agree that the Notes and the Warrants constitute an “investment unit” for purposes of Section 1273(c)(2) of the Internal
Revenue Code of 1986, as amended (the “Code”).

 

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(d)Form of Payment.
On the Closing Date, (i) each Buyer shall pay its respective Purchase Price (less, in the case of any Buyer, the amounts withheld
by such Buyer pursuant to Section 4(g)) to the Company for the Notes and the Warrants to be issued and sold to such Buyer at the
Closing, by wire transfer of immediately available funds in accordance with the Company’s written wire instructions and (ii) the
Company shall deliver to each Buyer (A) as applicable, either (x) a Series A Note in the aggregate original principal amount as
is set forth opposite such Buyer’s name in column (3) of the Schedule of Buyers or (y) a Series B Note in the aggregate original
principal amount as is set forth opposite such Buyer’s name in column (4) of the Schedule of Buyers, (B) a Series A Warrant
pursuant to which such Buyer shall have the right to initially acquire up to such number of Series A Warrant Shares as is set forth
opposite such Buyer’s name in column (5) of the Schedule of Buyers and (C) a Series B Warrant pursuant to which such Buyer
shall have the right to initially acquire up to such number of Series B Warrant Shares as is set forth opposite such Buyer’s
name in column (6) of the Schedule of Buyers, in all cases, duly executed on behalf of the Company and registered in the name of
such Buyer or its designee.

 

2.BUYER’S
REPRESENTATIONS AND WARRANTIES.

 

Each Buyer, severally
and not jointly, represents and warrants to the Company with respect to only itself that, as of the date hereof and as of the Closing
Date:

 

(a)Organization;
Authority. If an entity, such Buyer is an entity duly organized, validly existing and in good standing under the laws of the
jurisdiction of its organization with the requisite power and authority to enter into and to consummate the transactions contemplated
by the Transaction Documents (as defined below) to which it is a party and otherwise to carry out its obligations hereunder and
thereunder. If an individual, such Buyer has the legal capacity and the requisite power and authority to enter into and to consummate
the transactions contemplated by the Transaction Documents to which it is a party and otherwise to carry out its obligations hereunder
and thereunder.

 

(b)No Public
Sale or Distribution. Such Buyer (i) is acquiring its Note and Warrants, (ii) upon conversion of its Note will acquire the
Conversion Shares issuable upon conversion thereof, and (iii) upon exercise of its Warrants will acquire the Warrant Shares
issuable upon exercise thereof, in each case, for its own account and not with a view towards, or for resale in connection with,
the public sale or distribution thereof in violation of applicable securities laws, except pursuant to sales registered or exempted
under the 1933 Act; provided, however, by making the representations herein, such Buyer does not agree, or make any representation
or warranty, to hold any of the Securities for any minimum or other specific term and reserves the right to dispose of the Securities
at any time in accordance with or pursuant to a registration statement or an exemption from registration under the 1933 Act. Such
Buyer does not presently have any agreement or understanding, directly or indirectly, with any Person to distribute any of the
Securities in violation of applicable securities laws.

 

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(c)Accredited
Investor Status. Such Buyer is an “accredited investor” as that term is defined in Rule 501(a) of Regulation D.
Such Buyer has completed an Investor Questionnaire in the form attached hereto as Exhibit E hereto (the “Questionnaire”).

 

(d)Reliance
on Exemptions. Such Buyer understands that the Securities are being offered and sold to it in reliance on specific exemptions
from the registration requirements of United States federal and state securities laws and that the Company is relying in part upon
the truth and accuracy of, and such Buyer’s compliance with, the representations, warranties, agreements, acknowledgments
and understandings of such Buyer set forth herein in order to determine the availability of such exemptions and the eligibility
of such Buyer to acquire the Securities.

 

(e)Information.
Such Buyer and its advisors, if any, have been furnished with all materials relating to the business, finances and operations of
the Company and materials relating to the offer and sale of the Securities, which have been requested by such Buyer. Such Buyer
and its advisors, if any, have been afforded the opportunity to ask questions of the Company. Such Buyer understands that its investment
in the Securities involves a high degree of risk. Such Buyer has sought such accounting, legal and tax advice as it has considered
necessary to make an informed investment decision with respect to its acquisition of the Securities.

 

(f)No Governmental
Review. Such Buyer understands that no United States federal or state agency or any other government or governmental agency
has passed on or made any recommendation or endorsement of the Securities or the fairness or suitability of the investment in the
Securities nor have such authorities passed upon or endorsed the merits of the offering of the Securities.

 

(g)Transfer
or Resale. Such Buyer understands that except as provided in the Registration Rights Agreement and Section 4(h) hereof: (i)
the Securities have not been and are not being registered under the 1933 Act or any state securities laws, and may not be offered
for sale, sold, assigned or transferred unless (A) subsequently registered thereunder, (B) such Buyer shall have delivered to the
Company (if requested by the Company) an opinion of counsel to such Buyer, in a form reasonably acceptable to the Company, to the
effect that such Securities to be sold, assigned or transferred may be sold, assigned or transferred pursuant to an exemption from
such registration, or (C) such Buyer provides the Company with reasonable assurance that such Securities can be sold, assigned
or transferred pursuant to Rule 144 or Rule 144A promulgated under the 1933 Act (or a successor rule thereto) (collectively, “Rule
144”); (ii) any sale of the Securities made in reliance on Rule 144 may be made only in accordance with the terms of
Rule 144, and further, if Rule 144 is not applicable, any resale of the Securities under circumstances in which the seller (or
the Person (as defined below) through whom the sale is made) may be deemed to be an underwriter (as that term is defined in the
1933 Act) may require compliance with some other exemption under the 1933 Act or the rules and regulations of the SEC promulgated
thereunder; and (iii) neither the Company nor any other Person is under any obligation to register the Securities under the 1933
Act or any state securities laws or to comply with the terms and conditions of any exemption thereunder.

 

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(h)Validity;
Enforcement. This Agreement, the Registration Rights Agreement and, if applicable, the Subordination Agreement have been duly
and validly authorized, executed and delivered on behalf of such Buyer and constitute the legal, valid and binding obligations
of such Buyer enforceable against such Buyer in accordance with their respective terms, except as such enforceability may be limited
by general principles of equity or applicable bankruptcy, insolvency, reorganization, moratorium, liquidation and other similar
laws relating to, or affecting generally, the enforcement of applicable creditors’ rights and remedies.

 

(i)No Conflicts.
The execution, delivery and performance by such Buyer of this Agreement, the Registration Rights Agreement and, if applicable,
the Subordination Agreement and the consummation by such Buyer of the transactions contemplated hereby and thereby will not (i)
result in a violation of the organizational documents of such Buyer or (ii) conflict with, or constitute a default (or an event
which with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment,
acceleration or cancellation of, any agreement, indenture or instrument to which such Buyer is a party, or (iii) result in a violation
of any law, rule, regulation, order, judgment or decree (including federal and state securities laws) applicable to such Buyer,
except in the case of clauses (ii) and (iii) above, for such conflicts, defaults, rights or violations which could not, individually
or in the aggregate, reasonably be expected to have a material adverse effect on the ability of such Buyer to perform its obligations
hereunder.

 

(j)Residency.
Such Buyer is a resident of the jurisdiction specified below its address on the Schedule of Buyers.

 

3.REPRESENTATIONS
AND WARRANTIES OF THE COMPANY.

 

The Company represents
and warrants to each of the Buyers that, as of the date hereof and as of the Closing Date:

 

(a)Organization
and Qualification. Each of the Company and each of its Subsidiaries is an entity duly organized and validly existing and in
good standing under the laws of the jurisdiction in which it is formed, and has the requisite power and authority to own its properties
and to carry on its business as now being conducted and as presently proposed to be conducted. Each of the Company and each of
its Subsidiaries is duly qualified as a foreign entity to do business and is in good standing in every jurisdiction in which its
ownership of property or the nature of the business conducted by it makes such qualification necessary, except to the extent that
the failure to be so qualified or be in good standing would not have a Material Adverse Effect. As used in this Agreement, “Material
Adverse Effect” means any material adverse effect on (i) the business, properties, assets, liabilities, operations (including
results thereof), condition (financial or otherwise) or prospects of the Company and the Subsidiaries taken as a whole, (ii) the
transactions contemplated hereby or in any of the other Transaction Documents or (iii) the authority or ability of the Company
or any of its Subsidiaries to perform any of their respective obligations under any of the Transaction Documents (as defined below).
Other than the Persons (as defined below) set forth in the SEC Documents or as set forth on Schedule 3(a) hereto, the Company has
no Subsidiaries. “Subsidiaries” means any Person in which the Company, directly or indirectly, (I) owns a majority
of the outstanding capital stock or holds a majority of any equity or similar interest of such Person or (II) controls or operates
all or any part of the business, operations or administration of such Person, and each of the foregoing, is individually referred
to herein as a “Subsidiary.”

 

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(b)Authorization;
Enforcement; Validity. The Company has the requisite power and authority to enter into and perform its obligations under this
Agreement and the other Transaction Documents and to issue the Securities in accordance with the terms hereof and thereof. The
execution and delivery of this Agreement and the other Transaction Documents by the Company, and the consummation by the Company
of the transactions contemplated hereby and thereby (including, without limitation, the issuance of the Notes and the reservation
for issuance and issuance of the Conversion Shares issuable upon conversion of the Notes and the reservation for issuance and issuance
of any Interest Shares issuable pursuant to the terms of the Notes and the issuance of the Warrants and the reservation for issuance
and issuance of the Warrant Shares issuable upon exercise of the Warrants) have been duly authorized by the Company’s board
of directors or other governing body and (other than the filing with the SEC of one or more Registration Statements in accordance
with the requirements of the Registration Rights Agreement, a Form D with the SEC and any other filings as may be required by any
state securities agencies) no further filing, consent or authorization is required by the Company, its board of directors or its
stockholders or other governing body. This Agreement and the other Transaction Documents to which it is a party have been duly
executed and delivered by the Company and constitutes the legal, valid and binding obligations of the Company, enforceable against
the Company in accordance with their respective terms, except as such enforceability may be limited by general principles of equity
or applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally,
the enforcement of applicable creditors’ rights and remedies and except as rights to indemnification and to contribution
may be limited by federal or state securities law. “Transaction Documents” means, collectively, this Agreement,
the Notes, the Warrants, the Registration Rights Agreement, the Subordination Agreement, the Lock-Up Agreements, the Irrevocable
Transfer Agent Instructions (as defined below) and each of the other agreements and instruments entered into or delivered by any
of the parties hereto in connection with the transactions contemplated hereby and thereby, as may be amended from time to time.

 

(c)Issuance
of Securities. The issuance of the Notes and the Warrants are duly authorized and upon issuance in accordance with the terms
of the Transaction Documents shall be validly issued, and free from all preemptive or similar rights, taxes, liens, charges and
other encumbrances with respect to the issuance thereof. As of the Closing, the Company shall have reserved from its duly authorized
capital stock not less than the sum of (i) 130% of the maximum number of Conversion Shares initially issuable upon conversion of
the Notes (assuming for purposes hereof that the Notes are convertible at the initial Conversion Price (as defined in the Notes)
and without taking into account any limitations on the conversion of the Notes set forth in the Notes), (ii) 130% of the maximum
number of Interest Shares initially issuable pursuant to the terms of the Notes from the Closing Date through the second anniversary
of the Closing Date (determined as if issued on the Trading Day (as defined in the Notes) immediately preceding the Closing Date
without taking into account any limitations on the issuance of securities set forth in the Notes) and (iii) the maximum number
of Warrant Shares initially issuable upon exercise of the Warrants (without taking into account any limitations on the exercise
of the Warrants set forth therein). Upon issuance or conversion in accordance with the Notes or exercise in accordance with the
Warrants (as the case may be), the Conversion Shares, the Interest Shares and the Warrant Shares, respectively, when issued, will
be validly issued, fully paid and nonassessable and free from all preemptive or similar rights, taxes, liens, charges and other
encumbrances with respect to the issue thereof, with the holders being entitled to all rights accorded to a holder of Common Stock.
Subject to the accuracy of the representations and warranties of the Buyers in this Agreement, the offer and issuance by the Company
of the Securities is exempt from registration under the 1933 Act.

 

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(d)No Conflicts.
The execution, delivery and performance of the Transaction Documents by the Company and its Subsidiaries and the consummation by
the Company and its Subsidiaries of the transactions contemplated hereby and thereby (including, without limitation, the issuance
of the Notes, the Warrants, the Conversion Shares, the Interest Shares and Warrant Shares and the reservation for issuance of the
Conversion Shares, the Interest Shares and the Warrant Shares) will not (i) result in a violation of the Certificate of Incorporation
(as defined below) (including, without limitation, any certificate of designation contained therein) or other organizational documents
of the Company or any of its Subsidiaries, any capital stock of the Company or any of its Subsidiaries or Bylaws (as defined below)
of the Company or any of its Subsidiaries, (ii) conflict with, or constitute a default (or an event which with notice or lapse
of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation
of, any agreement, indenture or instrument to which the Company or any of its Subsidiaries is a party, or (iii) result in a violation
of any law, rule, regulation, order, judgment or decree (including foreign, federal and state securities laws and regulations and
the rules and regulations of the OTCQB Market (the “Principal Market”) and including all applicable federal
laws, rules and regulations) applicable to the Company or any of its Subsidiaries or by which any property or asset of the Company
or any of its Subsidiaries is bound or affected except, in the case of clause (ii) or (iii) above, to the extent such violations
that could not reasonably be expected to have a Material Adverse Effect.

 

(e)Consents.
Neither the Company nor any Subsidiary is required to obtain any consent from, authorization or order of, or make any filing or
registration with (other than the filing with the SEC of one or more Registration Statements in accordance with the requirements
of the Registration Rights Agreement, a Form D with the SEC and any other filings as may be required by any state securities agencies),
any Governmental Entity (as defined below) or any regulatory or self-regulatory agency or any other Person in order for it to execute,
deliver or perform any of its respective obligations under or contemplated by the Transaction Documents, in each case, in accordance
with the terms hereof or thereof. All consents, authorizations, orders, filings and registrations which the Company or any Subsidiary
is required to obtain pursuant to the preceding sentence have been or will be obtained or effected on or prior to the Closing Date,
and neither the Company nor any of its Subsidiaries are aware of any facts or circumstances which might prevent the Company or
any of its Subsidiaries from obtaining or effecting any of the registration, application or filings contemplated by the Transaction
Documents. The Company is not in violation of the requirements of the Principal Market and has no knowledge of any facts or circumstances
which could reasonably lead to delisting or suspension of the Common Stock in the foreseeable future. “Governmental Entity”
means any nation, state, county, city, town, village, district, or other political jurisdiction of any nature, federal, state,
local, municipal, foreign, or other government, governmental or quasi-governmental authority of any nature (including any governmental
agency, branch, department, official, or entity and any court or other tribunal), multi-national organization or body; or body
exercising, or entitled to exercise, any administrative, executive, judicial, legislative, police, regulatory, or taxing authority
or power of any nature or instrumentality of any of the foregoing, including any entity or enterprise owned or controlled by a
government or a public international organization or any of the foregoing.

 

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(f)Acknowledgment
Regarding Buyer’s Purchase of Securities. The Company acknowledges and agrees that to the Company’s knowledge,
each Buyer is acting solely in the capacity of an arm’s length purchaser with respect to the Transaction Documents and the
transactions contemplated hereby and thereby and that no Buyer is (i) an officer or director of the Company or any of its Subsidiaries,
(ii) an “affiliate” (as defined in Rule 144) of the Company or any of its Subsidiaries or (iii) to its knowledge, a
“beneficial owner” of more than 10% of the shares of Common Stock (as defined for purposes of Rule 13d-3 of the Securities
Exchange Act of 1934, as amended (the “1934 Act”)). The Company further acknowledges that no Buyer is acting
as a financial advisor or fiduciary of the Company or any of its Subsidiaries (or in any similar capacity) with respect to the
Transaction Documents and the transactions contemplated hereby and thereby, and any advice given by a Buyer or any of its representatives
or agents in connection with the Transaction Documents and the transactions contemplated hereby and thereby is merely incidental
to such Buyer’s purchase of the Securities. The Company further represents to each Buyer that the Company’s decision
to enter into the Transaction Documents to which it is a party has been based solely on the independent evaluation by the Company
and its representatives.

 

(g)No General
Solicitation; Placement Agent’s Fees. Neither the Company, nor any of its Subsidiaries or affiliates, nor any Person
acting on its or their behalf, has engaged in any form of general solicitation or general advertising (within the meaning of Regulation
D) in connection with the offer or sale of the Securities. The Company shall be responsible for the payment of any placement agent’s
fees, financial advisory fees, or brokers’ commissions (other than for Persons engaged by any Buyer or its investment advisor)
relating to or arising out of the transactions contemplated hereby. Other than National Securities Corporation and Dawson James
(collectively, the “Placement Agents”), neither the Company nor any of its Subsidiaries has engaged any placement
agent or other agent in connection with the offer or sale of the Securities. Schedule 3(g) hereto sets forth certain affiliated
relationships between the Company and the Placement Agents.

 

(h)No Integrated
Offering. None of the Company, its Subsidiaries or any of their affiliates, nor any Person acting on their behalf has, directly
or indirectly, made any offers or sales of any security or solicited any offers to buy any security, under circumstances that would
require registration of the issuance of any of the Securities under the 1933 Act, whether through integration with prior offerings
or otherwise, or cause this offering of the Securities to require approval of stockholders of the Company under any applicable
stockholder approval provisions, including, without limitation, under the rules and regulations of any exchange or automated quotation
system on which any of the securities of the Company are listed or designated for quotation. None of the Company, its Subsidiaries,
their affiliates nor any Person acting on their behalf will take any action or steps that would require registration of the issuance
of any of the Securities under the 1933 Act or cause the offering of any of the Securities to be integrated with any other offerings
of securities of the Company, which would require registration under the 1933 Act of the offering contemplated hereby.

 

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(i)Dilutive
Effect. The Company understands and acknowledges that the number of Conversion Shares, Interest Shares and Warrant Shares will
increase in certain circumstances. The Company further acknowledges that its obligation to issue the Conversion Shares upon conversion
of the Notes in accordance with this Agreement and the Notes, the Interest Shares in accordance with this Agreement and the Notes
and the Warrant Shares upon exercise of the Warrants in accordance with this Agreement, the Notes and the Warrants is, absolute
and unconditional regardless of the dilutive effect that such issuance may have on the ownership interests of other stockholders
of the Company.

 

(j)Application
of Takeover Protections; Rights Agreement. The Company and its board of directors have taken all necessary action, if any,
in order to render inapplicable any control share acquisition, interested stockholder, business combination, poison pill (including,
without limitation, any distribution under a rights agreement) or other similar anti-takeover provision under the Certificate of
Incorporation, Bylaws or other organizational documents or the laws of the jurisdiction of its incorporation or otherwise which
is or could become applicable to any Buyer as a result of the transactions contemplated by this Agreement, including, without limitation,
the Company’s issuance of the Securities and any Buyer’s ownership of the Securities. The Company and its board of
directors have taken all necessary action, if any, in order to render inapplicable any stockholder rights plan or similar arrangement
relating to accumulations of beneficial ownership of shares of Common Stock or a change in control of the Company or any of its
Subsidiaries.

 

(k)SEC Documents;
Financial Statements. Except as set forth on Schedule 3(k), during the two (2) years prior to the date hereof, the Company
has filed all reports, schedules, forms, statements and other documents required to be filed by it with the SEC pursuant to the
reporting requirements of the 1934 Act (all of the foregoing filed prior to the date hereof and all exhibits included therein and
financial statements, notes and schedules thereto and documents incorporated by reference therein being hereinafter referred to
as the “SEC Documents”). The Company has delivered or has made available to the Buyers or their respective representatives
true, correct and complete copies of each of the SEC Documents not available on the EDGAR system. As of their respective dates,
the SEC Documents complied in all material respects with the requirements of the 1934 Act and the rules and regulations of the
SEC promulgated thereunder applicable to the SEC Documents, and none of the SEC Documents, at the time they were filed with the
SEC, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary
in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. As of their
respective dates, the financial statements of the Company included in the SEC Documents complied in all material respects with
applicable accounting requirements and the published rules and regulations of the SEC with respect thereto as in effect as of the
time of filing. Such financial statements have been prepared in accordance with generally accepted accounting principles, consistently
applied, during the periods involved (except (i) as may be otherwise indicated in such financial statements or the notes thereto,
or (ii) in the case of unaudited interim statements, to the extent they may exclude footnotes or may be condensed or summary statements)
and fairly present in all material respects the financial position of the Company as of the dates thereof and the results of its
operations and cash flows for the periods then ended (subject, in the case of unaudited statements, to normal year-end audit adjustments
which will not be material, either individually or in the aggregate). No other information provided by or on behalf of the Company
to any of the Buyers which is not included in the SEC Documents (including, without limitation, information referred to in Section
2(e) of this Agreement) contains any untrue statement of a material fact or omits to state any material fact necessary in order
to make the statements therein not misleading, in the light of the circumstance under which they are or were made. The Company
is not currently contemplating to amend or restate any of the financial statements (including without limitation, any notes or
any letter of the independent accountants of the Company with respect thereto) included in the SEC Documents (the “Financial
Statements”), nor is the Company currently aware of facts or circumstances which would require the Company to amend or
restate any of the Financial Statements, in each case, in order for any of the Financials Statements to be in compliance with GAAP
and the rules and regulations of the SEC. The Company has not been informed by its independent accountants that they recommend
that the Company amend or restate any of the Financial Statements or that there is any need for the Company to amend or restate
any of the Financial Statements.

 

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(l)Absence of
Certain Changes. Since the date of the Company’s most recent audited financial statements contained in a Form 10-K, there
has been no material adverse change and no material adverse development in the business, assets, liabilities, properties, operations
(including results thereof), condition (financial or otherwise) or prospects of the Company or any of its Subsidiaries, except
as set forth in or contemplated by such Form 10-K or the Company’s Form 10-Q for the quarter ended September 30, 2012.
Since the date of the Company’s most recent audited financial statements contained in a Form 10-K, neither the Company nor
any of its Subsidiaries has (i) declared or paid any dividends, (ii) sold any assets, individually or in the aggregate, outside
of the ordinary course of business or (iii) made any capital expenditures, individually or in the aggregate, outside of the ordinary
course of business. Neither the Company nor any of its Subsidiaries has taken any steps to seek protection pursuant to any law
or statute relating to bankruptcy, insolvency, reorganization, receivership, liquidation or winding up, nor does the Company or
any Subsidiary have any knowledge or reason to believe that any of their respective creditors intend to initiate involuntary bankruptcy
proceedings or any actual knowledge of any fact which would reasonably lead a creditor to do so. The Company and its Subsidiaries,
on a consolidated basis, after giving effect to the transactions contemplated hereby to occur at the Closing, will not be Insolvent
(as defined below). For purposes of this Section 3(l), “Insolvent” means, (I) with respect to the Company and
its Subsidiaries, on a consolidated basis, (i) the present fair saleable value of the Company’s and its Subsidiaries’
assets is less than the amount required to pay the Company’s and its Subsidiaries’ total Indebtedness (as defined below),
(ii) the Company and its Subsidiaries are unable to pay their debts and liabilities, subordinated, contingent or otherwise, as
such debts and liabilities become absolute and matured or (iii) the Company and its Subsidiaries intend to incur or believe that
they will incur debts that would be beyond their ability to pay as such debts mature; and (II) with respect to the Company and
each Subsidiary, individually, (i) the present fair saleable value of the Company’s or such Subsidiary’s (as the case
may be) assets is less than the amount required to pay its respective total Indebtedness, (ii) the Company or such Subsidiary (as
the case may be) is unable to pay its respective debts and liabilities, subordinated, contingent or otherwise, as such debts and
liabilities become absolute and matured or (iii) the Company or such Subsidiary (as the case may be) intends to incur or believes
that it will incur debts that would be beyond its respective ability to pay as such debts mature. Neither the Company nor any of
its Subsidiaries has engaged in any business or in any transaction, and is not about to engage in any business or in any transaction,
for which the Company’s or such Subsidiary’s remaining assets constitute unreasonably small capital.

 

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(m)No Undisclosed
Events, Liabilities, Developments or Circumstances. No event, liability, development or circumstance has occurred or exists,
or is reasonably expected to exist or occur with respect to the Company, any of its Subsidiaries or any of their respective businesses,
properties, liabilities, prospects, operations (including results thereof) or condition (financial or otherwise) (other than the
Closing of the Offering contemplated hereby), that (i) would be required to be disclosed by the Company as of the date hereof or
the Closing Date under applicable securities laws on a registration statement on Form S-1 filed with the SEC relating to an issuance
and sale by the Company of its Common Stock and which has not been publicly announced, (ii) could reasonably be expected to have
a material adverse effect on any Buyer’s investment hereunder or (iii) could reasonably be expected to have a Material Adverse
Effect.

 

(n)Conduct of
Business; Regulatory Permits. Neither the Company nor any of its Subsidiaries is in violation of any term of or in default
under its Certificate of Incorporation, any certificate of designation, preferences or rights of any other outstanding series of
preferred stock of the Company or any of its Subsidiaries or Bylaws or their organizational charter, certificate of formation or
certificate of incorporation or bylaws, respectively. Neither the Company nor any of its Subsidiaries is in violation of any judgment,
decree or order or any statute, ordinance, rule or regulation applicable to the Company or any of its Subsidiaries, and neither
the Company nor any of its Subsidiaries will conduct its business in violation of any of the foregoing, except in all cases for
possible violations which could not, individually or in the aggregate, have a Material Adverse Effect. Without limiting the generality
of the foregoing, the Company is not in violation of any of the rules, regulations or requirements of the Principal Market and
has no knowledge of any facts or circumstances that could reasonably lead to delisting or suspension of the Common Stock by the
Principal Market in the foreseeable future. Since January 1, 2010, (i) the Common Stock has been listed or designated for quotation
on the Principal Market, (ii) trading in the Common Stock has not been suspended by the SEC or the Principal Market and (iii) the
Company has received no communication, written or oral, from the SEC or the Principal Market regarding the suspension or delisting
of the Common Stock from the Principal Market. The Company and each of its Subsidiaries possess all certificates, authorizations
and permits issued by the appropriate regulatory authorities necessary to conduct their respective businesses, except where the
failure to possess such certificates, authorizations or permits would not have, individually or in the aggregate, a Material Adverse
Effect, and neither the Company nor any such Subsidiary has received any notice of proceedings relating to the revocation or modification
of any such certificate, authorization or permit.

 

(o)Foreign Corrupt
Practices. Neither the Company nor any of its Subsidiaries nor any director, officer, agent, employee or other Person acting
on behalf of the Company or any of its Subsidiaries has, in the course of its actions for, or on behalf of, the Company or any
of its Subsidiaries (i) used any corporate funds for any unlawful contribution, gift, entertainment or other unlawful expenses
relating to political activity; (ii) made any direct or indirect unlawful payment to any foreign or domestic government official
or employee from corporate funds; (iii) violated or is in violation of any provision of the U.S. Foreign Corrupt Practices Act
of 1977, as amended; or (iv) made any unlawful bribe, rebate, payoff, influence payment, kickback or other unlawful payment to
any foreign or domestic government official or employee.

 

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(p)Sarbanes-Oxley
Act. The Company and each Subsidiary is in compliance with all applicable requirements of the Sarbanes-Oxley Act of 2002 and
all applicable rules and regulations promulgated by the SEC thereunder.

 

(q)Transactions
With Affiliates. Except as set forth in the SEC Documents, none of the officers, directors, employees or affiliates of the
Company or any of its Subsidiaries is presently a party to any transaction with the Company or any of its Subsidiaries (other than
for ordinary course services as employees, officers or directors and immaterial transactions), including any contract, agreement
or other arrangement providing for the furnishing of services to or by, providing for rental of real or personal property to or
from, or otherwise requiring payments to or from any such officer, director, employee or affiliate, or, to the knowledge of the
Company or any of its Subsidiaries, any corporation, partnership, trust or other Person in which any such officer, director, or
employee has a substantial interest or is an employee, officer, director, trustee, affiliate or partner.

 

(r)Equity Capitalization.
As of the date hereof, the authorized capital stock of the Company consists of (i) 400,000,000 shares of Common Stock of which,
182,265,845 are issued and outstanding and 49,384,348 shares are reserved for issuance pursuant to securities (other than the Notes
and the Warrants) exercisable or exchangeable for, or convertible into, shares of Common Stock and (ii) 10,000,000 shares of preferred
stock, $0.001 par value, of which none are issued and outstanding. No shares of Common Stock are held in treasury. All of such
outstanding shares are duly authorized and have been, or upon issuance will be, validly issued and are fully paid and nonassessable.
12,339,000 shares of the Company’s issued and outstanding Common Stock on the date hereof are owned by Persons who are
“affiliates” (as defined in Rule 405 of the 1933 Act and calculated based on the assumption that only officers, directors
and holders of at least 10% of the Company’s issued and outstanding Common Stock are “affiliates” without conceding
that any such Persons are “affiliates” for purposes of federal securities laws) of the Company or any of its Subsidiaries.
To the Company’s knowledge, no Person owns 10% or more of the Company’s issued and outstanding shares of Common Stock
(calculated based on the assumption that all Convertible Securities (as defined below), whether or not presently exercisable or
convertible, have been fully exercised or converted (as the case may be) taking account of any limitations on exercise
or conversion (including “blockers”) contained therein without conceding that such identified Person is a 10% stockholder
for purposes of federal securities laws). (i) None of the Company’s or any Subsidiary’s capital stock is subject
to preemptive rights or any other similar rights or any liens or encumbrances suffered or permitted by the Company or any Subsidiary;
(ii) except as set forth in the SEC Documents or on Schedule 3(r)(ii), there are no outstanding options, warrants, scrip, rights
to subscribe to, calls or commitments of any character whatsoever relating to, or securities or rights convertible into, or exercisable
or exchangeable for, any capital stock of the Company or any of its Subsidiaries, or contracts, commitments, understandings or
arrangements by which the Company or any of its Subsidiaries is or may become bound to issue additional capital stock of the Company
or any of its Subsidiaries or options, warrants, scrip, rights to subscribe to, calls or commitments of any character whatsoever
relating to, or securities or rights convertible into, or exercisable or exchangeable for, any capital stock of the Company or
any of its Subsidiaries; (iii) except as set forth in the SEC Documents or on Schedule 3(r)(iii), there are no outstanding debt
securities, notes, credit agreements, credit facilities or other agreements, documents or instruments evidencing Indebtedness of
the Company or any of its Subsidiaries or by which the Company or any of its Subsidiaries is or may become bound; (iv) except as
set forth on Schedule 3(r)(iv), there are no financing statements securing obligations in any amounts filed in connection with
the Company or any of its Subsidiaries; (v) except as set forth on Schedule 3(r)(v), there are no agreements or arrangements under
which the Company or any of its Subsidiaries is obligated to register the sale of any of their securities under the 1933 Act (except
pursuant to the Registration Rights Agreement); (vi) except as set forth on Schedule 3(r)(vi), there are no outstanding securities
or instruments of the Company or any of its Subsidiaries which contain any redemption or similar provisions, and there are no contracts,
commitments, understandings or arrangements by which the Company or any of its Subsidiaries is or may become bound to redeem a
security of the Company or any of its Subsidiaries; (vii) except as set forth on Schedule 3(r)(vii), there are no securities or
instruments containing anti-dilution or similar provisions that will be triggered by the issuance of the Securities; (viii) except
as set forth on Schedule 3(r)(viii), there are no securities that have been issued in a Variable Rate Transaction (as defined below)
on or prior to the Subscription Date, (ix) except as disclosed in the SEC Documents, neither the Company nor any Subsidiary has
any stock appreciation rights or “phantom stock” plans or agreements or any similar plan or agreement; and (x) neither
the Company nor any of its Subsidiaries have any liabilities or obligations required to be disclosed in the SEC Documents which
are not so disclosed in the SEC Documents, other than those incurred in the ordinary course of the Company’s or its Subsidiaries’
respective businesses and which, individually or in the aggregate, do not or could not have a Material Adverse Effect. The Company
has furnished or has made available to the Buyers true, correct and complete copies of the Company’s Certificate of Incorporation,
as amended and as in effect on the date hereof (the “Certificate of Incorporation”), and the Company’s
bylaws, as amended and as in effect on the date hereof (the “Bylaws”), and the terms of all securities convertible
into, or exercisable or exchangeable for, shares of Common Stock and the material rights of the holders thereof in respect thereto.

 

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(s)Indebtedness
and Other Contracts. Neither the Company nor any of its Subsidiaries, (i) except as set forth on Schedule 3(s), has any
outstanding Indebtedness (as defined below), (ii) is a party to any contract, agreement or instrument, the violation of which,
or default under which, by the other party(ies) to such contract, agreement or instrument could reasonably be expected to result
in a Material Adverse Effect, (iii) is in violation of any term of, or in default under, any contract, agreement or instrument
relating to any Indebtedness, except where such violations and defaults would not result, individually or in the aggregate, in
a Material Adverse Effect, or (iv) is a party to any contract, agreement or instrument relating to any Indebtedness, the performance
of which, in the judgment of the Company’s officers, has or is expected to have a Material Adverse Effect. For purposes of
this Agreement: (x) “Indebtedness” of any Person means, without duplication (A) all indebtedness for borrowed
money, (B) all obligations issued, undertaken or assumed as the deferred purchase price of property or services (including, without
limitation, “capital leases” in accordance with generally accepted accounting principles) (other than trade payables
entered into in the ordinary course of business), (C) all reimbursement or payment obligations with respect to letters of credit,
surety bonds and other similar instruments, (D) all obligations evidenced by notes, bonds, debentures or similar instruments, including
obligations so evidenced incurred in connection with the acquisition of property, assets or businesses, (E) all indebtedness created
or arising under any conditional sale or other title retention agreement, or incurred as financing, in either case with respect
to any property or assets acquired with the proceeds of such indebtedness (even though the rights and remedies of the seller or
bank under such agreement in the event of default are limited to repossession or sale of such property), (F) all monetary obligations
under any leasing or similar arrangement which, in connection with generally accepted accounting principles, consistently applied
for the periods covered thereby, is classified as a capital lease, (G) all indebtedness referred to in clauses (A) through (F)
above secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by)
any mortgage, claim, lien, tax, right of first refusal, pledge, charge, security interest or other encumbrance upon or in any property
or assets (including accounts and contract rights) owned by any Person, even though the Person which owns such assets or property
has not assumed or become liable for the payment of such indebtedness, and (H) all Contingent Obligations in respect of indebtedness
or obligations of others of the kinds referred to in clauses (A) through (G) above; (y) “Contingent Obligation”
means, as to any Person, any direct or indirect liability, contingent or otherwise, of that Person with respect to any indebtedness,
lease, dividend or other obligation of another Person if the primary purpose or intent of the Person incurring such liability,
or the primary effect thereof, is to provide assurance to the obligee of such liability that such liability will be paid or discharged,
or that any agreements relating thereto will be complied with, or that the holders of such liability will be protected (in whole
or in part) against loss with respect thereto; and (z) “Person” means an individual, a limited liability company,
a partnership, a joint venture, a corporation, a trust, an unincorporated organization, any other entity and any Governmental Entity
or any department or agency thereof.

 

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(t)Absence of
Litigation. Except as set forth on Schedule 3(r), there is no action, suit, proceeding, inquiry or investigation before or
by the Principal Market, any court, public board, other Governmental Entity, self-regulatory organization or body pending or, to
the knowledge of the Company, threatened against or affecting the Company or any of its Subsidiaries, the Common Stock or any of
the Company’s or its Subsidiaries’ officers or directors which is outside of the ordinary course of business or individually
or in the aggregate material to the Company or any of its Subsidiaries. No director, officer or employee of the Company or any
of its subsidiaries has willfully violated 18 U.S.C. §1519 or engaged in spoliation in reasonable anticipation of litigation.
Without limitation of the foregoing, there has not been, and to the knowledge of the Company, there is not pending or contemplated,
any investigation by the SEC involving the Company, any of its Subsidiaries or any current or former director or officer of the
Company or any of its Subsidiaries. The SEC has not issued any stop order or other order suspending the effectiveness of any registration
statement filed by the Company under the 1933 Act or the 1934 Act.

 

(u)Insurance.
The Company and each of its Subsidiaries are insured by insurers of recognized financial responsibility against such losses and
risks and in such amounts as management of the Company believes to be prudent and customary in the businesses in which the Company
and its Subsidiaries are engaged. Neither the Company nor any such Subsidiary has been refused any insurance coverage sought or
applied for, and neither the Company nor any such Subsidiary has any reason to believe that it will be unable to renew its existing
insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to
continue its business at a cost that would not have a Material Adverse Effect.

 

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(v)Employee
Relations. Neither the Company nor any of its Subsidiaries is a party to any collective bargaining agreement or employs any
member of a union. The Company believes that its and its Subsidiaries’ relations with their respective employees are good.
No executive officer (as defined in Rule 501(f) promulgated under the 1933 Act) or other key employee of the Company or any of
its Subsidiaries has notified the Company or any such Subsidiary that such officer intends to leave the Company or any such Subsidiary
or otherwise terminate such officer’s employment with the Company or any such Subsidiary. No executive officer or other key
employee of the Company or any of its Subsidiaries is, or is now expected to be, in violation of any material term of any employment
contract, confidentiality, disclosure or proprietary information agreement, non-competition agreement, or any other contract or
agreement or any restrictive covenant, and the continued employment of each such executive officer or other key employee (as the
case may be) does not subject the Company or any of its Subsidiaries to any liability with respect to any of the foregoing matters.
The Company and its Subsidiaries are in compliance with all federal, state, local and foreign laws and regulations respecting labor,
employment and employment practices and benefits, terms and conditions of employment and wages and hours, except where failure
to be in compliance would not, either individually or in the aggregate, reasonably be expected to result in a Material Adverse
Effect.

 

(w)Title.
The Company and its Subsidiaries have good and marketable title in fee simple to all real property, and have good and marketable
title to all personal property, owned by them which is material to the business of the Company and its Subsidiaries, in each case,
free and clear of all liens, encumbrances and defects except such as do not materially affect the value of such property and do
not interfere with the use made and proposed to be made of such property by the Company and any of its Subsidiaries. Any real property
and facilities held under lease by the Company or any of its Subsidiaries are held by them under valid, subsisting and enforceable
leases with such exceptions as are not material and do not interfere with the use made and proposed to be made of such property
and buildings by the Company or any of its Subsidiaries.

 

(x)Intellectual
Property Rights. The Company and its Subsidiaries own or possess adequate rights or licenses to use all trademarks, trade names,
service marks, service mark registrations, service names, patents, patent rights, copyrights, original works, inventions, licenses,
approvals, governmental authorizations, trade secrets and other intellectual property rights and all applications and registrations
therefor (“Intellectual Property Rights”) necessary to conduct their respective businesses as now conducted
and as presently proposed to be conducted. Except as set forth on Schedule 3(v), none of the Company’s or its Subsidiaries’
Intellectual Property Rights have expired, terminated or been abandoned, or are expected to expire, terminate or be abandoned,
within three years from the date of this Agreement. The Company has no knowledge of any infringement by the Company or any of its
Subsidiaries of Intellectual Property Rights of others. There is no claim, action or proceeding being made or brought, or to the
knowledge of the Company or any of its Subsidiaries, being threatened, against the Company or any of its Subsidiaries regarding
their Intellectual Property Rights. The Company is not aware of any facts or circumstances which might give rise to any of the
foregoing infringements or claims, actions or proceedings. The Company and each of its Subsidiaries have taken reasonable security
measures to protect the secrecy, confidentiality and value of all of their Intellectual Property Rights.

 

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(y)Environmental
Laws. The Company and its Subsidiaries (i) are in compliance with all Environmental Laws (as defined below), (ii) have received
all permits, licenses or other approvals required of them under applicable Environmental Laws to conduct their respective businesses
and (iii) are in compliance with all terms and conditions of any such permit, license or approval where, in each of the foregoing
clauses (i), (ii) and (iii), the failure to so comply could be reasonably expected to have, individually or in the aggregate, a
Material Adverse Effect. The term “Environmental Laws” means all federal, state, local or foreign laws relating
to pollution or protection of human health or the environment (including, without limitation, ambient air, surface water, groundwater,
land surface or subsurface strata), including, without limitation, laws relating to emissions, discharges, releases or threatened
releases of chemicals, pollutants, contaminants, or toxic or hazardous substances or wastes (collectively, “Hazardous
Materials”) into the environment, or otherwise relating to the manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling of Hazardous Materials, as well as all authorizations, codes, decrees, demands or demand
letters, injunctions, judgments, licenses, notices or notice letters, orders, permits, plans or regulations issued, entered, promulgated
or approved thereunder.

 

(z)Subsidiary
Rights. The Company or one of its Subsidiaries has the unrestricted right to vote, and (subject to limitations imposed by applicable
law) to receive dividends and distributions on, all capital securities of its Subsidiaries as owned by the Company or such Subsidiary.

 

(aa)Tax Status.
Since January 1, 2010, the Company and each of its Subsidiaries (i) has timely made or filed all foreign, federal and state
income and all other tax returns, reports and declarations required by any jurisdiction to which it is subject, (ii) has timely
paid all taxes and other governmental assessments and charges that are material in amount, shown or determined to be due on such
returns, reports and declarations, except those being contested in good faith and (iii) has set aside on its books provision reasonably
adequate for the payment of all taxes for periods subsequent to the periods to which such returns, reports or declarations apply.
There are no unpaid taxes in any material amount claimed to be due by the taxing authority of any jurisdiction, and the officers
of the Company and its Subsidiaries know of no basis for any such claim. The Company is not operated in such a manner as to qualify
as a passive foreign investment company, as defined in Section 1297 of the U.S. Internal Revenue Code of 1986, as amended.

 

(bb)Internal
Accounting and Disclosure Controls. The Company and each of its Subsidiaries maintains internal control over financial reporting
(as such term is defined in Rule 13a-15(f) under the 1934 Act) that is effective to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally
accepted accounting principles, including that (i) transactions are executed in accordance with management’s general or specific
authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain asset and liability accountability, (iii) access to assets or incurrence of liabilities
is permitted only in accordance with management’s general or specific authorization and (iv) the recorded accountability
for assets and liabilities is compared with the existing assets and liabilities at reasonable intervals and appropriate action
is taken with respect to any difference. The Company maintains disclosure controls and procedures (as such term is defined in Rule
13a-15(e) under the 1934 Act) that are effective in ensuring that information required to be disclosed by the Company in the reports
that it files or submits under the 1934 Act is recorded, processed, summarized and reported, within the time periods specified
in the rules and forms of the SEC, including, without limitation, controls and procedures designed to ensure that information required
to be disclosed by the Company in the reports that it files or submits under the 1934 Act is accumulated and communicated to the
Company’s management, including its principal executive officer or officers and its principal financial officer or officers,
as appropriate, to allow timely decisions regarding required disclosure. Neither the Company nor any of its Subsidiaries has received
any notice or correspondence from any accountant or other Person relating to any potential material weakness or significant deficiency
in any part of the internal controls over financial reporting of the Company or any of its Subsidiaries.

 

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(cc)Off Balance
Sheet Arrangements. There is no transaction, arrangement, or other relationship between the Company or any of its Subsidiaries
and an unconsolidated or other off balance sheet entity that is required to be disclosed by the Company in its 1934 Act filings
and is not so disclosed or that otherwise could be reasonably expected to have a Material Adverse Effect.

 

(dd)Investment
Company Status. The Company is not, and upon consummation of the sale of the Securities will not be, an “investment company,”
an affiliate of an “investment company,” a company controlled by an “investment company” or an “affiliated
person” of, or “promoter” or “principal underwriter” for, an “investment company” as
such terms are defined in the Investment Company Act of 1940, as amended.

 

(ee)Acknowledgement
Regarding Buyers’ Trading Activity. It is understood and acknowledged by the Company that (i) following the public disclosure
of the transactions contemplated by the Transaction Documents, in accordance with the terms thereof, none of the Buyers have been
asked by the Company or any of its Subsidiaries to agree, nor has any Buyer agreed with the Company or any of its Subsidiaries,
to desist from effecting any transactions in or with respect to (including, without limitation, purchasing or selling, long and/or
short) any securities of the Company, or “derivative” securities based on securities issued by the Company or to hold
any of the Securities for any specified term; (ii) any Buyer, and counterparties in “derivative” transactions to which
any such Buyer is a party, directly or indirectly, presently may have a “short” position in the Common Stock which
was established prior to such Buyer’s knowledge of the transactions contemplated by the Transaction Documents; and (iii)
each Buyer shall not be deemed to have any affiliation with or control over any arm’s length counterparty in any “derivative”
transaction. The Company further understands and acknowledges that following the public disclosure of the transactions contemplated
by the Transaction Documents pursuant to the 8-K Filings (as defined below) one or more Buyers may engage in hedging and/or trading
activities at various times during the period that the Securities are outstanding, including, without limitation, during the periods
that the value and/or number of the Warrant Shares, the Interest Shares or Conversion Shares, as applicable, deliverable with respect
to the Securities are being determined and (b) such hedging and/or trading activities, if any, can reduce the value of the existing
stockholders’ equity interest in the Company both at and after the time the hedging and/or trading activities are being conducted.
The Company acknowledges that such aforementioned hedging and/or trading activities do not constitute a breach of this Agreement,
the Notes, the Warrants or any other Transaction Document or any of the documents executed in connection herewith or therewith.

 

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(ff)Manipulation
of Price. Neither the Company nor any of its Subsidiaries has, and, to the knowledge of the Company, no Person acting on their
behalf has, directly or indirectly, (i) taken any action designed to cause or to result in the stabilization or manipulation of
the price of any security of the Company or any of its Subsidiaries to facilitate the sale or resale of any of the Securities,
(ii) sold, bid for, purchased, or paid any compensation for soliciting purchases of, any of the Securities (other than the Placement
Agents), or (iii) paid or agreed to pay to any Person any compensation for soliciting another to purchase any other securities
of the Company or any of its Subsidiaries.

 

(gg)U.S. Real
Property Holding Corporation. Neither the Company nor any of its Subsidiaries is, or has ever been, and so long as any of the
Securities are held by any of the Buyers, shall become, a U.S. real property holding corporation within the meaning of Section
897 of the Internal Revenue Code of 1986, as amended, and the Company and each Subsidiary shall so certify upon any Buyer’s
request.

 

(hh)Registration
Eligibility. The Company is eligible to register the Registrable Securities for resale by the Buyers using Form S-1 promulgated
under the 1933 Act.

 

(ii)Transfer
Taxes. On the Closing Date, all stock transfer or other taxes (other than income or similar taxes) which are required to be
paid in connection with the issuance, sale and transfer of the Securities to be sold to each Buyer hereunder will be, or will have
been, fully paid or provided for by the Company, and all laws imposing such taxes will be or will have been complied with.

 

(jj)Bank Holding
Company Act. Neither the Company nor any of its Subsidiaries is subject to the Bank Holding Company Act of 1956, as amended
(the “BHCA”) and to regulation by the Board of Governors of the Federal Reserve System (the “Federal
Reserve”). Neither the Company nor any of its Subsidiaries or affiliates owns or controls, directly or indirectly, five
percent (5%) or more of the outstanding shares of any class of voting securities or twenty-five percent (25%) or more of the total
equity of a bank or any equity that is subject to the BHCA and to regulation by the Federal Reserve. Neither the Company nor any
of its Subsidiaries or affiliates exercises a controlling influence over the management or policies of a bank or any entity that
is subject to the BHCA and to regulation by the Federal Reserve.

 

(kk)Illegal
or Unauthorized Payments; Political Contributions. Neither the Company nor any of its Subsidiaries nor, to the best of the
Company’s knowledge (after reasonable inquiry of its officers and directors), any of the officers, directors, employees,
agents or other representatives of the Company or any of its Subsidiaries or any other business entity or enterprise with which
the Company or any Subsidiary is or has been affiliated or associated, has, directly or indirectly, made or authorized any payment,
contribution or gift of money, property, or services, whether or not in contravention of applicable law, (a) as a kickback or bribe
to any Person or (b) to any political organization, or the holder of or any aspirant to any elective or appointive public office
except for personal political contributions not involving the direct or indirect use of funds of the Company or any of its Subsidiaries.

 

    	18

    	 

    
 

(ll)Money Laundering.
The Company and its Subsidiaries are in compliance with, and have not previously violated, the USA Patriot Act of 2001 and all
other applicable U.S. and non-U.S. anti-money laundering laws and regulations, including, but not limited to, the laws, regulations
and Executive Orders and sanctions programs administered by the U.S. Office of Foreign Assets Control, including, but not limited,
to (i) Executive Order 13224 of September 23, 2001 entitled, “Blocking Property and Prohibiting Transactions With Persons
Who Commit, Threaten to Commit, or Support Terrorism” (66 Fed. Reg. 49079 (2001)); and (ii) any regulations contained in
31 CFR, Subtitle B, Chapter V.

 

(mm)Management.
Except as set forth in Schedule 3(mm) hereto or as disclosed in the SEC Documents, during the past five (5) year period,
no current officer or director or, to the knowledge of the Company, no current ten percent (10%) or greater stockholder of the
Company or any of its Subsidiaries has been the subject of:

 

(i)a
petition under bankruptcy laws or any other insolvency or moratorium law or the appointment by a court of a receiver, fiscal agent
or similar officer for such Person, or any partnership in which such person was a general partner at or within two years before
the filing of such petition or such appointment, or any corporation or business association of which such person was an executive
officer at or within two years before the time of the filing of such petition or such appointment;

 

(ii)a
conviction in a criminal proceeding or a named subject of a pending criminal proceeding (excluding traffic violations that do not
relate to driving while intoxicated or driving under the influence);

 

(iii)any
order, judgment or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently
or temporarily enjoining any such person from, or otherwise limiting, the following activities:

 

(1)Acting
as a futures commission merchant, introducing broker, commodity trading advisor, commodity pool operator, floor broker, leverage
transaction merchant, any other person regulated by the United States Commodity Futures Trading Commission or an associated person
of any of the foregoing, or as an investment adviser, underwriter, broker or dealer in securities, or as an affiliated person,
director or employee of any investment company, bank, savings and loan association or insurance company, or engaging in or continuing
any conduct or practice in connection with such activity;

 

(2)Engaging
in any type of business practice; or

 

(3)Engaging
in any activity in connection with the purchase or sale of any security or commodity or in connection with any violation of securities
laws or commodities laws;

 

(iv)any
order, judgment or decree, not subsequently reversed, suspended or vacated, of any authority barring, suspending or otherwise limiting
for more than 60 days the right of any such person to engage in any activity described in the preceding sub paragraph, or to be
associated with persons engaged in any such activity;

 

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(v)a
finding by a court of competent jurisdiction in a civil action or by the SEC or other authority to have violated any securities
law, regulation or decree and the judgment in such civil action or finding by the SEC or any other authority has not been subsequently
reversed, suspended or vacated; or

 

(vi)a
finding by a court of competent jurisdiction in a civil action or by the Commodity Futures Trading Commission to have violated
any federal commodities law, and the judgment in such civil action or finding has not been subsequently reversed, suspended or
vacated.

 

(nn)No Additional
Agreements. The Company does not have any agreement or understanding with any Buyer with respect to the transactions contemplated
by the Transaction Documents other than as specified in the Transaction Documents.

 

(oo)Public Utility
Holding Act. None of the Company nor any of its Subsidiaries is a “holding company,” or an “affiliate”
of a “holding company,” as such terms are defined in the Public Utility Holding Act of 2005.

 

(pp)Federal
Power Act. None of the Company nor any of its Subsidiaries is subject to regulation as a “public utility” under
the Federal Power Act, as amended.

 

(qq)Ranking
of Notes. Except as set forth on Schedule 3(aa), no Indebtedness of the Company, at the Closing, will be senior to, or pari
passu with, the Notes in right of payment, whether with respect to payment or redemptions, interest, damages, upon liquidation
or dissolution or otherwise.

 

(rr)Disclosure.
Except as disclosed in the 8-K Filing, the Company confirms that neither it nor any other Person acting on its behalf has provided
any of the Buyers or their agents or counsel with any information that constitutes or could reasonably be expected to constitute
material, non-public information concerning the Company or any of its Subsidiaries, other than the existence of the transactions
contemplated by this Agreement and the other Transaction Documents. The Company understands and confirms that each of the Buyers
will rely on the foregoing representations in effecting transactions in securities of the Company. All disclosure provided to the
Buyers regarding the Company and its Subsidiaries, their businesses and the transactions contemplated hereby, including the schedules
to this Agreement, furnished by or on behalf of the Company or any of its Subsidiaries is true and correct and does not contain
any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein,
in the light of the circumstances under which they were made, not misleading. Each press release issued by the Company or any of
its Subsidiaries during the twelve (12) months preceding the date of this Agreement did not at the time of release contain any
untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make
the statements therein, in the light of the circumstances under which they are made, not misleading. No event or circumstance has
occurred or information exists with respect to the Company or any of its Subsidiaries or its or their business, properties, liabilities,
prospects, operations (including results thereof) or conditions (financial or otherwise), which, under applicable law, rule or
regulation, requires public disclosure at or before the date hereof or announcement by the Company but which has not been so publicly
disclosed. The Company acknowledges and agrees that no Buyer makes or has made any representations or warranties with respect to
the transactions contemplated hereby other than those specifically set forth in Section 2.

 

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4.COVENANTS.

 

(a)Best Efforts.
Each Buyer shall use its best efforts to timely satisfy each of the conditions to be satisfied by it as provided in Section 6 of
this Agreement. The Company shall use its best efforts to timely satisfy each of the conditions to be satisfied by it as provided
in Section 7 of this Agreement.

 

(b)Form D and
Blue Sky. The Company agrees to file a Form D with respect to the Securities as required under Regulation D and to provide
a copy thereof to each Buyer promptly after such filing. The Company shall, on or before the Closing Date, take such action as
the Company shall reasonably determine is necessary in order to obtain an exemption for, or to, qualify the Securities being sold
at the Closing for sale to the Buyers at the Closing pursuant to this Agreement under applicable securities or “Blue Sky”
laws of the states of the United States (or to obtain an exemption from such qualification), and shall provide evidence of any
such action so taken to the Buyers on or prior to the Closing Date. Without limiting any other obligation of the Company under
this Agreement, the Company shall timely make all filings and reports relating to the offer and sale of the Securities required
under all applicable securities laws (including, without limitation, all applicable federal securities laws and all applicable
“Blue Sky” laws), and the Company shall comply with all applicable federal, foreign, state and local laws, statutes,
rules, regulations and the like relating to the offering and sale of the Securities to the Buyers.

 

(c)Reporting
Status. Until the date on which the Buyers shall have sold all of the Registrable Securities (the “Reporting Period”),
the Company shall use reasonable best efforts to timely file all reports required to be filed with the SEC pursuant to the 1934
Act, and the Company shall not terminate its status as an issuer required to file reports under the 1934 Act even if the 1934 Act
or the rules and regulations thereunder would no longer require or otherwise permit such termination. From the time Form S-3 is
available to the Company for the registration of the Registrable Securities, the Company shall use reasonable best efforts to take
all actions necessary to maintain its eligibility to register the Registrable Securities for resale by the Buyers on Form S-3.

 

(d)Use of Proceeds.
The Company will use the proceeds from the sale of the Securities as set forth on Schedule 4(d) attached hereto and for
general corporate purposes and except as set forth on Schedule 4(d) attached hereto, and not for (i) the repayment
of any outstanding Indebtedness of the Company or any of its Subsidiaries, (ii) redemption or repurchase of any securities of the
Company or any of its Subsidiaries or (iii) the settlement of any outstanding litigation.

 

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(e)Financial
Information. The Company agrees to send the following to each Investor (as defined in the Registration Rights Agreement) during
the Reporting Period (i) unless the following are filed with the SEC through EDGAR and are available to the public through the
EDGAR system, within one (1) Business Day after the filing thereof with the SEC, a copy of its Annual Reports on Form 10-K and
Quarterly Reports on Form 10-Q, any Current Reports on Form 8-K and any registration statements (other than on Form S-8) or amendments
filed pursuant to the 1933 Act, (ii) unless the following are either filed with the SEC through EDGAR or are otherwise widely disseminated
via a recognized new release service (such as PR Newswire), on the same day as the release thereof, facsimile copies of all press
releases issued by the Company or any of its Subsidiaries and (iii) unless the following are filed with the SEC through EDGAR,
copies of any notices and other information made available or given to the stockholders of the Company generally, contemporaneously
with the making available or giving thereof to the stockholders..

 

(f)Listing.
The Company shall promptly secure the listing or designation for quotation (as the case may be) of all of the Registrable Securities
upon each national securities exchange and automated quotation system, if any, upon which the Common Stock is then listed or designated
for quotation (as the case may be) (subject to official notice of issuance) and shall maintain such listing or designation for
quotation (as the case may be) of all Registrable Securities from time to time issuable under the terms of the Transaction Documents
on such national securities exchange or automated quotation system. The Company shall use reasonable best efforts to maintain the
Common Stock’s listing or authorization for quotation (as the case may be) on the Principal Market, The New York Stock Exchange,
the NYSE MKT, the Nasdaq Capital Market, the Nasdaq Global Select Market or the Nasdaq Global Market (each, an “Eligible
Market”). Neither the Company nor any of its Subsidiaries shall take any action which could be reasonably expected to
result in the delisting or suspension of the Common Stock on an Eligible Market. The Company shall pay all fees and expenses in
connection with satisfying its obligations under this Section 4(f).

 

(g)Fees.
The Company shall reimburse the lead Buyer for all reasonable costs and expenses incurred by it or its affiliates in connection
with the transactions contemplated by the Transaction Documents (including, without limitation, all reasonable legal fees and disbursements
of Greenberg Traurig, LLP, counsel to the lead Buyer, in connection therewith, documentation and implementation of the transactions
contemplated by the Transaction Documents and due diligence and regulatory filings in connection therewith) (the “Expense
Amount”), which amount shall not exceed $50,000 without the consent of the Company and shall be withheld by the lead
Buyer (at the request of Greenberg Traurig, LLP) from its Purchase Price at the Closing or paid by the Company upon termination
of this Agreement on demand by Greenberg Traurig, LLP so long as such termination did not occur as a result of a material breach
by the lead investor of any of its obligations hereunder (as the case may be) less $15,000, which was previously advanced to the
lead Buyer by the Company. Subject to the limitation set forth in the immediately preceding sentence, if the amount so withheld
at the Closing by the lead Buyer was less than the Expense Amount actually incurred by the lead Buyer and/or Greenberg Traurig,
LLP, as applicable, in connection with the transactions contemplated by the Transaction Documents, the Company shall promptly reimburse
the lead Buyer and/or Greenberg Traurig, LLP, as applicable, on demand for such Expense Amount not so reimbursed by the Company
on the date hereof or through such withholding at the Closing. The Company shall be responsible for the payment of any placement
agent’s fees, financial advisory fees, transfer agent fees, DTC (as defined below) fees or broker’s commissions (other
than for Persons engaged by any Buyer) relating to or arising out of the transactions contemplated hereby (including, without limitation,
any fees payable to the Placement Agents, who are the Company’s sole placement agents in connection with the transactions
contemplated by this Agreement). The Company shall pay, and hold each Buyer harmless against, any liability, loss or expense (including,
without limitation, reasonable attorneys’ fees and out-of-pocket expenses) arising in connection with any claim relating
to any such payment. Except as otherwise set forth in the Transaction Documents, each party to this Agreement shall bear its own
expenses in connection with the sale of the Securities to each Buyer.

 

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(h)Pledge of
Securities. Notwithstanding anything to the contrary contained in this Agreement, the Company acknowledges and agrees that
the Securities may be pledged by a Buyer in connection with a bona fide margin agreement or other loan or financing arrangement
that is secured by the Securities. The pledge of Securities shall not be deemed to be a transfer, sale or assignment of the Securities
hereunder, and no Buyer effecting a pledge of Securities shall be required to provide the Company with any notice thereof or otherwise
make any delivery to the Company pursuant to this Agreement or any other Transaction Document. The Company hereby agrees to execute
and deliver such documentation as a pledgee of the Securities may reasonably request in connection with a pledge of the Securities
to such pledgee by a Buyer.

 

(i)Disclosure
of Transactions and Other Material Information. The Company shall, on or before 8:30 a.m., New York time, on the first
(1st) Business Day after the date of this Agreement, issue a press release (the “Press Release”) reasonably
acceptable to the Buyers disclosing all the material terms of the transactions contemplated by the Transaction Documents. On or
before 8:30 a.m., New York time, on the first (1st) Business Day after the date of this Agreement, the Company shall file a Current
Report on Form 8-K describing all the material terms of the transactions contemplated by the Transaction Documents in the form
required by the 1934 Act and attaching all the material Transaction Documents (including, without limitation, this Agreement, the
form of Notes, the form of the Warrants and the form of the Registration Rights Agreement) (including all attachments, the “8-K
Filing”). From and after the filing of the 8-K Filing, the Company shall have disclosed all material, non-public information
(if any) provided to any of the Buyers by the Company or any of its Subsidiaries or any of their respective officers, directors,
employees or agents in connection with the transactions contemplated by the Transaction Documents. The Company shall not, and the
Company shall cause each of its Subsidiaries and each of its and their respective officers, directors, employees and agents not
to, provide any Buyer with any material, non-public information regarding the Company or any of its Subsidiaries from and after
the issuance of the Press Release without the express prior written consent of such Buyer. In the event of a breach of any of the
foregoing covenants, including, without limitation, Section 4(o) of this Agreement, or any of the covenants or agreements contained
in any other Transaction Document, by the Company, any of its Subsidiaries, or any of its or their respective officers, directors,
employees and agents (as determined in the reasonable good faith judgment of such Buyer), in addition to any other remedy provided
herein or in the Transaction Documents, such Buyer shall have the right to make a public disclosure, in the form of a press release,
public advertisement or otherwise, of such breach or such material, non-public information, as applicable, without the prior approval
by the Company, any of its Subsidiaries, or any of its or their respective officers, directors, employees or agents. No Buyer shall
have any liability to the Company, any of its Subsidiaries, or any of its or their respective officers, directors, employees, stockholders
or agents, for any such disclosure. Subject to the foregoing, neither the Company, its Subsidiaries nor any Buyer shall issue any
press releases or any other public statements with respect to the transactions contemplated hereby; provided, however, the Company
shall be entitled, without the prior approval of any Buyer, to make any press release or other public disclosure with respect to
such transactions (i) in substantial conformity with the 8-K Filing and contemporaneously therewith and (ii) as is required by
applicable law and regulations (provided that in the case of clause (i) each Buyer shall be consulted by the Company in connection
with any such press release or other public disclosure prior to its release). Without the prior written consent of the applicable
Buyer, the Company shall not (and shall cause each of its Subsidiaries and affiliates to not) disclose the name of such Buyer in
any filing, announcement, release or otherwise. Notwithstanding anything contained in this Agreement to the contrary and without
implication that the contrary would otherwise be true, the Company expressly acknowledges and agrees that no Buyer has had, and
no Buyer shall have (unless expressly agreed to by a particular Buyer after the date hereof in a written definitive and binding
agreement executed by the Company and such particular Buyer (it being understood and agreed that no Buyer may bind any other Buyer
with respect thereto)), any duty of confidentiality with respect to, or a duty not to trade on the basis of, any information regarding
the Company or any of its Subsidiaries.

 

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(j)Additional
Registration Statements. Until the Applicable Date (as defined below) and at any time thereafter while any Registration Statement
is not effective or the prospectus contained therein is not available for use, the Company shall not file a registration statement
under the 1933 Act relating to securities that are not the Registrable Securities. “Applicable Date” means the
later of (i) the first date on which the resale by the Buyers of all Registrable Securities is covered by one or more effective
Registration Statements (as defined in the Registration Rights Agreement) (and each prospectus contained therein is available for
use on such date) and (ii) the first anniversary of the Closing Date (or, if a Current Public Information Failure (as defined in
the Registration Rights Agreement) has occurred and is continuing, such later date after which the Company has cured such Current
Public Information Failure).

 

(k)Additional
Issuance of Securities. So long as any Buyer beneficially owns any Securities, the Company will not, without the prior written
consent of the Required Holders, issue any Notes (other than to the Buyers as contemplated hereby) and the Company shall not issue
any other securities that would cause a breach or default under the Notes or the Warrants. The Company agrees that for the period
commencing on the date hereof and ending on the date immediately following the sixty (60) calendar day anniversary of the Applicable
Date (provided that such period shall be extended by the number of calendar days during such period and any extension thereof contemplated
by this proviso on which any Registration Statement is not effective or any prospectus contained therein is not available for use
or any Current Public Information Failure exists) (the “Restricted Period”), neither the Company nor any of
its Subsidiaries shall directly or indirectly issue, offer, sell, grant any option or right to purchase, or otherwise dispose of
(or announce any issuance, offer, sale, grant of any option or right to purchase or other disposition of) any equity security or
any equity-linked or related security (including, without limitation, any “equity security” (as that term is defined
under Rule 405 promulgated under the 1933 Act), any Convertible Securities (as defined below), any debt, any preferred stock or
any purchase rights) (any such issuance, offer, sale, grant, disposition or announcement (whether occurring during the Restricted
Period or at any time thereafter) is referred to as a “Subsequent Placement”). Notwithstanding the foregoing,
this Section 4(k) shall not apply in respect of the issuance of (A) shares of Common Stock options to purchase Common Stock or
other equity incentive awards to directors, officers or consultants, endorsers or employees of the Company in their capacity as
such pursuant to an Approved Stock Plan (as defined below), provided that (1) all such issuances (taking into account the shares
of Common Stock issuable upon exercise of such options) after the date hereof pursuant to this clause (A) do not, in the aggregate,
exceed more than 15% of the Common Stock issued and outstanding immediately prior to the date hereof and (2) the exercise price
of any such options is not lowered after issuance by subsequent amendment thereof, none of such options are amended subsequent
to issuance to increase the number of shares issuable thereunder and none of the terms or conditions of any such options are subsequent
to issuance otherwise materially changed in any manner that adversely affects any of the Buyers; (B) shares of Common Stock
issued upon the conversion or exercise of Convertible Securities (other than options to purchase Common Stock or other equity incentive
awards issued pursuant to an Approved Stock Plan that are covered by clause (A) above) issued prior to the date hereof, provided
that the conversion price of any such Convertible Securities (other than options to purchase Common Stock issued pursuant to an
Approved Stock Plan that are covered by clause (A) above) is not lowered by subsequent amendment, none of such Convertible Securities
(other than options to purchase Common Stock issued pursuant to an Approved Stock Plan that are covered by clause (A) above) are
subsequently amended to increase the number of shares issuable thereunder and none of the terms or conditions of any such Convertible
Securities (other than options to purchase Common Stock issued pursuant to an Approved Stock Plan that are covered by clause (A)
above) are otherwise materially changed in any manner that adversely affects any of the Buyers; (C) the Conversion Shares, (D)
the Interest Shares, (E) the Warrant Shares and (F) any securities issued in connection with strategic alliances, acquisitions,
mergers, and strategic partnerships, provided, that (1) the primary purpose of such issuance is not to raise capital as determined
in good faith by the Company’s board of directors, (2) the purchaser or acquirer of the securities in such issuance solely
consists of either (x) the actual participants in such strategic alliance or strategic partnership, (y) the actual owners of such
assets or securities acquired in such acquisition or merger or (z) the stockholders, partners or members of the foregoing Persons
and (3) the number or amount of securities issued to such Person by the Company shall not be disproportionate to either (x) the
fair market value of such Person’s actual contribution to such strategic alliance or strategic partnership or (y) the proportional
ownership of such assets or securities to be acquired by the Company, as applicable (each of the foregoing in clauses (A) through
(F), collectively the “Excluded Securities”), (G) the Permitted Purchase Money Warrants (as defined in the Notes)
and (H) any other securities issued in connection with strategic alliances, acquisitions, mergers, and strategic partnerships.
“Approved Stock Plan” means any benefit plan which has been approved by the board of directors of the Company
prior to or subsequent to the date hereof pursuant to which shares of Common Stock, options to purchase Common Stock and other
equity incentive awards may be issued to any employee, officer, director, consultant or endorser for services provided to the Company
in their capacity as such. “Convertible Securities” means any capital stock or other security of the Company
or any of its Subsidiaries that is at any time and under any circumstances directly or indirectly convertible into, exercisable
or exchangeable for, or which otherwise entitles the holder thereof to acquire, any capital stock or other security of the Company
(including, without limitation, Common Stock) or any of its Subsidiaries.

 

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(l)Reservation
of Shares. So long as any Notes or Warrants remain outstanding, the Company shall take all action necessary to at all times
have authorized, and reserved for the purpose of issuance, no less than (i) 130% of the maximum number of shares of Common Stock
issuable upon conversion of all the Notes then outstanding (assuming for purposes hereof, that the Notes are convertible at the
Conversion Price (as defined in the Notes) and without regard to any limitations on the conversion of the Notes set forth therein),
and (ii) 130% of the maximum number of Interest Shares issuable pursuant to the terms of the Notes then outstanding from the Closing
Date through the thirty-six month anniversary of the Closing Date (determined as if issued on the Trading Day immediately preceding
the Closing Date without taking into account any limitations on the issuance of securities set forth in the Notes) and (iii) the
maximum number of Warrant Shares issuable upon exercise of all the Warrants then outstanding (without regard to any limitations
on the exercise of the Warrants set forth therein).

 

(m)Conduct of
Business. While any of the Notes or Warrants remain outstanding, the business of the Company and its Subsidiaries shall not
be conducted in violation of any law, ordinance or regulation of any Governmental Entity, except where such violations would not
result, either individually or in the aggregate, in a Material Adverse Effect.

 

(n)Variable
Securities. Until all of the Registrable Securities have been sold by the Buyers, the Company and each Subsidiary shall be
prohibited from effecting or entering into an agreement to effect any Subsequent Placement involving a Variable Rate Transaction.
“Variable Rate Transaction” means a transaction in which the Company or any Subsidiary (i) issues or sells any
Convertible Securities either (A) at a conversion, exercise or exchange rate or other price that is based upon and/or varies with
the trading prices of or quotations for the shares of Common Stock at any time after the initial issuance of such Convertible Securities,
or (B) with a conversion, exercise or exchange price that is subject to being reset at some future date after the initial issuance
of such Convertible Securities or upon the occurrence of specified or contingent events directly or indirectly related to the business
of the Company or the market for the Common Stock, other than pursuant to customary anti-dilution provisions or (ii) enters into
any agreement (including, without limitation, an equity line of credit) whereby the Company or any Subsidiary may sell securities
at a future determined price (other than customary “preemptive” or “participation” rights). Each Buyer
shall be entitled to obtain injunctive relief against the Company and its Subsidiaries to preclude any such issuance, which remedy
shall be in addition to any right to collect damages.

 

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(o)Participation
Right. From the date hereof through the first anniversary of the Closing Date, neither the Company nor any of its Subsidiaries
shall, directly or indirectly, effect any Subsequent Placement unless the Company shall have first complied with this Section 4(o).
The Company acknowledges and agrees that the right set forth in this Section 4(o) is a right granted by the Company, separately,
to each Buyer.

 

(i)At
least three (3) Trading Days prior to any proposed or intended Subsequent Placement, the Company shall deliver to each Buyer a
written notice of its proposal or intention to effect a Subsequent Placement (each such notice, a “Pre-Notice”),
which Pre-Notice shall not contain any information (including, without limitation, material, non-public information) other than:
(i) a statement that the Company desires to provide such Buyer with material, non-public information, or, if permissable hereunder,
a statement that the Company proposes or intends to effect a Subsequent Placement, (ii) a statement that the statement in clause
(i) above does not constitute material, non-public information and (iii) a statement informing such Buyer that it is entitled to
receive an Offer Notice (as defined below) with respect to such Subsequent Placement upon its written request. Upon the written
request of a Buyer within three (3) Trading Days after the Company’s delivery to such Buyer of such Pre-Notice, and only
upon a written request by such Buyer, the Company shall promptly, but no later than one (1) Trading Day after such request, deliver
to such Buyer an irrevocable written notice (the “Offer Notice”) of any proposed or intended issuance or sale
or exchange (the “Offer”) of the securities being offered (the “Offered Securities”) in a
Subsequent Placement, which Offer Notice shall (w) identify and describe the Offered Securities, (x) describe the price and other
terms upon which they are to be issued, sold or exchanged, and the number or amount of the Offered Securities to be issued, sold
or exchanged, (y) identify the Persons (if known) to which or with which the Offered Securities are to be offered, issued, sold
or exchanged and (z) offer to issue and sell to or exchange with such Buyer in accordance with the terms of the Offer such Buyer’s
pro rata portion of 50% of the Offered Securities, provided that the number of Offered Securities which such Buyer shall have the
right to subscribe for under this Section 4(o) shall be (a) based on such Buyer’s pro rata portion of the aggregate original
principal amount of the Notes purchased hereunder by all Buyers (the “Basic Amount”), and (b) with respect to
each Buyer that elects to purchase its Basic Amount, any additional portion of the Offered Securities attributable to the Basic
Amounts of other Buyers as such Buyer shall indicate it will purchase or acquire should the other Buyers subscribe for less than
their Basic Amounts (the “Undersubscription Amount”).

 

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(ii)To
accept an Offer, in whole or in part, such Buyer must deliver a written notice to the Company prior to the end of the third (3rd)
Business Day after such Buyer’s receipt of the Offer Notice (the “Offer Period”), setting forth the portion
of such Buyer’s Basic Amount that such Buyer elects to purchase and, if such Buyer shall elect to purchase all of its Basic
Amount, the Undersubscription Amount, if any, that such Buyer elects to purchase (in either case, the “Notice of Acceptance”).
If the Basic Amounts subscribed for by all Buyers are less than the total of all of the Basic Amounts, then such Buyer who has
set forth an Undersubscription Amount in its Notice of Acceptance shall be entitled to purchase, in addition to the Basic Amounts
subscribed for, the Undersubscription Amount it has subscribed for; provided, however, if the Undersubscription Amounts subscribed
for exceed the difference between the total of all the Basic Amounts and the Basic Amounts subscribed for (the “Available
Undersubscription Amount”), such Buyer who has subscribed for any Undersubscription Amount shall be entitled to purchase
only that portion of the Available Undersubscription Amount as the Basic Amount of such Buyer bears to the total Basic Amounts
of all Buyers that have subscribed for Undersubscription Amounts, subject to rounding by the Company to the extent it deems reasonably
necessary. Notwithstanding the foregoing, if the Company desires to modify or amend the terms and conditions of the Offer in any
material respect prior to the expiration of the Offer Period, the Company may deliver to each Buyer a new Offer Notice and the
Offer Period shall expire on the third (3rd) Business Day after such Buyer’s receipt of such new Offer Notice.

 

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(iii)The
Company shall have five (5) Business Days from the expiration of the Offer Period above (i) to offer, issue, sell or exchange all
or any part of such Offered Securities as to which a Notice of Acceptance has not been given by a Buyer (the “Refused
Securities”) pursuant to a definitive agreement(s) (the “Subsequent Placement Agreement”), but only
to the offerees described in the Offer Notice (if so described therein) and only upon terms and conditions (including, without
limitation, unit prices and interest rates) that are not more favorable to the acquiring Person or Persons or less favorable to
the Company than those set forth in the Offer Notice in any material respect and (ii) to publicly announce (a) the execution of
such Subsequent Placement Agreement, and (b) either (x) the consummation of the transactions contemplated by such Subsequent Placement
Agreement or (y) the termination of such Subsequent Placement Agreement, which shall be filed with the SEC on a Current Report
on Form 8-K with such Subsequent Placement Agreement and any documents contemplated therein filed as exhibits thereto.

 

(iv)In
the event the Company shall propose to sell less than all the Refused Securities (any such sale to be in the manner and on the
terms specified in Section 4(o)(iii) above), then such Buyer may, at its sole option and in its sole discretion, reduce the number
or amount of the Offered Securities specified in its Notice of Acceptance to an amount that shall be not less than the number or
amount of the Offered Securities that such Buyer elected to purchase pursuant to Section 4(o)(ii) above multiplied by a fraction,
(i) the numerator of which shall be the number or amount of Offered Securities the Company actually proposes to issue, sell or
exchange (including Offered Securities to be issued or sold to Buyers pursuant to this Section 4(o) prior to such reduction) and
(ii) the denominator of which shall be the original amount of the Offered Securities. In the event that any Buyer so elects to
reduce the number or amount of Offered Securities specified in its Notice of Acceptance, the Company may not issue, sell or exchange
more than the reduced number or amount of the Offered Securities unless and until such securities have again been offered to the
Buyers in accordance with Section 4(o)(i) above.

 

(v)Upon
the closing of the issuance, sale or exchange of all or less than all of the Refused Securities, such Buyer shall acquire from
the Company, and the Company shall issue to such Buyer, the number or amount of Offered Securities specified in its Notice of Acceptance.
The purchase by such Buyer of any Offered Securities is subject in all cases to the preparation, execution and delivery by the
Company and such Buyer of a separate purchase agreement relating to such Offered Securities reasonably satisfactory in form and
substance to such Buyer and its counsel.

 

(vi)Any
Offered Securities not acquired by a Buyer or other Persons in accordance with this Section 4(o) may not be issued, sold or exchanged
until they are again offered to such Buyer under the procedures specified in this Agreement.

 

(vii)The
Company and each Buyer agree that if any Buyer elects to participate in the Offer, neither the Subsequent Placement Agreement with
respect to such Offer nor any other transaction documents related thereto (collectively, the “Subsequent Placement Documents”)
shall include any term or provision whereby such Buyer shall be required to agree to any restrictions on trading as to any securities
of the Company or be required to consent to any amendment to or termination of, or grant any waiver, release or the like under
or in connection with, any agreement previously entered into with the Company or any instrument received from the Company.

 

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(viii)Notwithstanding
anything to the contrary in this Section 4(o) and unless otherwise agreed to by such Buyer, the Company shall either confirm in
writing to such Buyer that the transaction with respect to the Subsequent Placement has been abandoned or shall publicly disclose
its intention to issue the Offered Securities, in either case, in such a manner such that such Buyer will not be in possession
of any material, non-public information, by the fifth (5th) Business Day following delivery of the Offer Notice. If by such fifth
(5th) Business Day, no public disclosure regarding a transaction with respect to the Offered Securities has been made, and no notice
regarding the abandonment of such transaction has been received by such Buyer, such transaction shall be deemed to have been abandoned
and such Buyer shall not be deemed to be in possession of any material, non-public information with respect to the Company or any
of its Subsidiaries. Should the Company decide to pursue such transaction with respect to the Offered Securities, the Company shall
provide such Buyer with another Offer Notice and such Buyer will again have the right of participation set forth in this Section
4(o). The Company shall not be permitted to deliver more than one such Offer Notice to such Buyer in any sixty (60) day period,
except as expressly contemplated by the last sentence of Section 4(o)(ii).

 

(ix)The
restrictions contained in this Section 4(o) shall not apply in connection with the issuance of any Excluded Securities or the Permitted
Purchase Money Warrants. The Company shall not circumvent the provisions of this Section 4(o) by providing terms or conditions
to one Buyer that are not provided to all.

 

(p)Dilutive
Issuances. For so long as any Notes or Warrants remain outstanding, the Company shall not, in any manner, enter into or affect
any Dilutive Issuance (as defined in the Notes) if the effect of such Dilutive Issuance is to cause the Company to be required
to issue upon conversion of any Notes or exercise of any Warrant any shares of Common Stock in excess of that number of shares
of Common Stock which the Company may issue upon conversion of the Notes and exercise of the Warrants without breaching the Company’s
obligations under the rules or regulations of the Principal Market.

 

(q)Passive Foreign
Investment Company. The Company shall conduct its business in such a manner as will ensure that the Company will not be deemed
to constitute a passive foreign investment company within the meaning of Section 1297 of the U.S. Internal Revenue Code of 1986,
as amended.

 

(r)Restriction
on Redemption and Cash Dividends. Except as set forth on Schedule 4(r), so long as any Notes are outstanding, the Company
shall not, directly or indirectly, redeem, or declare or pay any cash dividend or distribution on, any securities of the Company
without the prior express written consent of the Required Holders.

 

(s)Corporate
Existence. So long as any Buyer beneficially owns any Notes or Warrants, the Company shall not be party to any Fundamental
Transaction (as defined in the Notes) unless the Company is in compliance with the applicable provisions governing Fundamental
Transactions set forth in the Notes and the Warrants.

 

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(t)10b-5 Plans.
So long as any Notes remain outstanding, the Company shall not, directly or indirectly, (and shall not permit any of its officers,
directors or employees, directly or indirectly) to establish any 10b-5 plan (or permit any similar transaction) at any time after
the date hereof, unless (x) any such plan is established after the end of the Restricted Period and (y) the trigger on sales under
any such plan is no less than $0.40 per share of Common Stock for a sixty (60) day period after the expiration of the Restricted
Period (as adjusted for stock splits, stock dividends, recapitalizations and similar events).

 

(u)Conversion
and Exercise Procedures. Each of the form of Notice of Exercise included in the Warrants and the form of Notice of Conversion
included in the Notes set forth the totality of the procedures required of the Buyers in order to exercise the Warrants or convert
the Notes. Except as provided in Section 5(d), no additional legal opinion, other information or instructions shall be required
of the Buyers to exercise their Warrants or convert their Notes. The Company shall honor exercises of the Warrants and conversions
of the Notes and shall deliver the Conversion Shares, Interest Shares and Warrant Shares in accordance with the terms, conditions
and time periods set forth in the Notes and Warrants.

 

(v)No Waiver
of Lock-Up Agreements. The Company shall not amend, waive or modify any provision of any of the Lock-Up Agreements (as defined
below).

 

(w)Closing Documents.
On or prior to fourteen (14) calendar days after the Closing Date, the Company agrees to deliver, or cause to be delivered, to
each Buyer and Greenberg Traurig, LLP executed copies of the Transaction Documents, Securities and other document required to be
delivered to any party pursuant to Section 7 hereof.

 

5.REGISTER;
TRANSFER AGENT INSTRUCTIONS; LEGEND.

 

(a)Register.
The Company shall maintain at its principal executive offices (or such other office or agency of the Company as it may designate
by notice to each holder of Securities), a register for the Notes and the Warrants in which the Company shall record the name and
address of the Person in whose name the Notes and the Warrants have been issued (including the name and address of each transferee),
the principal amount of the Notes held by such Person, the number of Conversion Shares issuable upon conversion of the Notes, the
number of Interest Shares issuable with respect to the Notes and the number of Warrant Shares issuable upon exercise of the Warrants
held by such Person. The Company shall keep the register open and available at all times during business hours for inspection of
any Buyer or its legal representatives upon reasonable prior notice.

 

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(b)Transfer
Agent Instructions. The Company shall issue irrevocable instructions to its transfer agent and any subsequent transfer agent
in a form acceptable to each of the Buyers (the “Irrevocable Transfer Agent Instructions”) to issue certificates
or credit shares to the applicable balance accounts at The Depository Trust Company (“DTC”), registered in the
name of each Buyer or its respective nominee(s), for the Conversion Shares, the Interest Shares and the Warrant Shares in such
amounts as specified from time to time by each Buyer to the Company upon conversion of the Notes or the exercise of the Warrants
(as the case may be). The Company represents and warrants that no instruction other than the Irrevocable Transfer Agent Instructions
referred to in this Section 5(b), and stop transfer instructions to give effect to Section 2(g) hereof, will be given by the Company
to its transfer agent with respect to the Securities, and that the Securities shall otherwise be freely transferable on the books
and records of the Company, as applicable, to the extent provided in this Agreement and the other Transaction Documents. If a Buyer
effects a sale, assignment or transfer of the Securities in accordance with Section 2(g), the Company shall permit the transfer
and shall promptly instruct its transfer agent to issue one or more certificates or credit shares to the applicable balance accounts
at DTC in such name and in such denominations as specified by such Buyer to effect such sale, transfer or assignment. In the event
that such sale, assignment or transfer involves Conversion Shares, Interest Shares or Warrant Shares sold, assigned or transferred
pursuant to an effective registration statement or in compliance with Rule 144, the transfer agent shall issue such shares to such
Buyer, assignee or transferee (as the case may be) without any restrictive legend in accordance with Section 5(d) below. The Company
acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to a Buyer. Accordingly, the Company
acknowledges that the remedy at law for a breach of its obligations under this Section 5(b) will be inadequate and agrees, in the
event of a breach or threatened breach by the Company of the provisions of this Section 5(b), that a Buyer shall be entitled, in
addition to all other available remedies, to an order and/or injunction restraining any breach and requiring immediate issuance
and transfer, without the necessity of showing economic loss and without any bond or other security being required. The Company
shall cause its counsel to issue the legal opinion referred to in the Irrevocable Transfer Agent Instructions to the Company’s
transfer agent on each Effective Date (as defined in the Registration Rights Agreement). Any fees (with respect to the transfer
agent, counsel to the Company or otherwise) associated with the issuance of such opinion or the removal of any legends on any of
the Securities shall be borne by the Company.

 

(c)Legends.
Each Buyer understands that the Securities have been issued (or will be issued in the case of the Conversion Shares, the Interest
Shares and the Warrant Shares) pursuant to an exemption from registration or qualification under the 1933 Act and applicable state
securities laws, and except as set forth below, the Securities shall bear any legend as required by the “blue sky”
laws of any state and a restrictive legend in substantially the following form (and a stop-transfer order may be placed against
transfer of such stock certificates):

 

[NEITHER THE ISSUANCE AND SALE OF THE
SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE [CONVERTIBLE] [EXERCISABLE] HAVE
BEEN][THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN] REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE
OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF
COUNSEL TO THE HOLDER (IF REQUESTED BY THE COMPANY), IN A FORM REASONABLY ACCEPTABLE TO THE COMPANY, THAT REGISTRATION IS NOT REQUIRED
UNDER SAID ACT OR (II) UNLESS SOLD OR ELIGIBLE TO BE SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT. NOTWITHSTANDING THE
FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED
BY THE SECURITIES.

 

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(d)Removal of
Legends. Certificates evidencing Securities shall not be required to contain the legend set forth in Section 5(c) above or
any other legend (i) while a registration statement (including a Registration Statement) covering the resale of such Securities
is effective under the 1933 Act, (ii) following any sale of such Securities pursuant to Rule 144 (assuming neither the transferor
nor the transferee is an affiliate of the Company), (iii) if such Securities are eligible to be sold, assigned or transferred under
Rule 144 (provided that a Buyer provides the Company with reasonable assurances that such Securities are eligible for sale, assignment
or transfer under Rule 144 which shall not include an opinion of Buyer’s counsel), (iv) in connection with a sale, assignment
or other transfer (other than under Rule 144), provided that such Buyer provides the Company with an opinion of counsel to such
Buyer, in a generally acceptable form, to the effect that such sale, assignment or transfer of the Securities may be made without
registration under the applicable requirements of the 1933 Act or (v) if such legend is not required under applicable requirements
of the 1933 Act (including, without limitation, controlling judicial interpretations and pronouncements issued by the SEC). If
a legend is not required pursuant to the foregoing, the Company shall no later than two (2) Trading Days following the delivery
by a Buyer to the Company or the transfer agent (with notice to the Company) of a legended certificate representing such Securities
(endorsed or with stock powers attached, signatures guaranteed, and otherwise in form necessary to affect the reissuance and/or
transfer, if applicable), together with any other deliveries from such Buyer as may be required above in this Section 5(d), as
directed by such Buyer, either: (A) provided that the Company’s transfer agent is participating in the DTC Fast Automated
Securities Transfer Program and such Securities are Conversion Shares, Interest Shares or Warrant Shares, credit the aggregate
number of shares of Common Stock to which such Buyer shall be entitled to such Buyer’s or its designee’s balance account
with DTC through its Deposit/Withdrawal at Custodian system or (B) if the Company’s transfer agent is not participating in
the DTC Fast Automated Securities Transfer Program, issue and deliver (via reputable overnight courier) to such Buyer, a certificate
representing such Securities that is free from all restrictive and other legends, registered in the name of such Buyer or its designee
(the date by which such credit is so required to be made to the balance account of such Buyer’s or such Buyer’s nominee
with DTC or such certificate is required to be delivered to such Buyer pursuant to the foregoing is referred to herein as the “Required
Delivery Date”). The Company shall be responsible for any transfer agent fees or DTC fees with respect to any issuance
of Securities or the removal of any legends with respect to any Securities in accordance herewith.

 

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(e)Failure to
Timely Deliver; Buy-In. If the Company fails to (i) issue and deliver (or cause to be delivered) to a Buyer by the Required
Delivery Date a certificate representing the Securities so delivered to the Company by such Buyer that is free from all restrictive
and other legends or (ii) credit the balance account of such Buyer’s or such Buyer’s nominee with DTC for such number
of Conversion Shares or Warrant Shares so delivered to the Company, and if on or after the Required Delivery Date such Buyer (or
any other Person in respect, or on behalf, of such Buyer) purchases (in an open market transaction or otherwise) shares of Common
Stock to deliver in satisfaction of a sale by such Buyer of all or any portion of the number of shares of Common Stock, or a sale
of a number of shares of Common Stock equal to all or any portion of the number of shares of Common Stock, that such Buyer so anticipated
receiving from the Company without any restrictive legend, then, in addition to all other remedies available to such Buyer, the
Company shall, within three (3) Trading Days after such Buyer’s request and in such Buyer’s sole discretion, either
(i) pay cash to such Buyer in an amount equal to such Buyer’s total purchase price (including brokerage commissions and other
out-of-pocket expenses, if any) for the shares of Common Stock so purchased (including brokerage commissions and other out-of-pocket
expenses, if any) (the “Buy-In Price”), at which point the Company’s obligation to so deliver such certificate
or credit such Buyer’s balance account shall terminate and such shares shall be cancelled, or (ii) promptly honor its obligation
to so deliver to such Buyer a certificate or certificates or credit such Buyer’s DTC account representing such number of
shares of Common Stock that would have been so delivered if the Company timely complied with its obligations hereunder and pay
cash to such Buyer in an amount equal to the excess (if any) of the Buy-In Price over the product of (A) such number of shares
of Conversion Shares or Warrant Shares (as the case may be) that the Company was required to deliver to such Buyer by the Required
Delivery Date multiplied by (B) the lowest Closing Sale Price (as defined in the Warrants) of the Common Stock on any Trading Day
during the period commencing on the date of the delivery by such Buyer to the Company of the applicable Conversion Shares or Warrant
Shares (as the case may be) and ending on the date of such delivery and payment under this clause (ii).

 

6.CONDITIONS
TO THE COMPANY’S OBLIGATION TO SELL.

 

(a)The obligation
of the Company hereunder to issue and sell the Notes and the related Warrants to each Buyer at the Closing is subject to the satisfaction,
at or before the Closing Date, of each of the following conditions, provided that these conditions are for the Company’s
sole benefit and may be waived by the Company at any time in its sole discretion by providing each Buyer with prior written notice
thereof:

 

(i)Such
Buyer shall have executed each of the other Transaction Documents to which it is a party and delivered the same to the Company.

 

(ii)Such
Buyer and each other Buyer shall have delivered to the Company the Purchase Price (less, in the case of the lead Buyer, the amounts
withheld by such Buyer pursuant to Section 4(g)) for the Note and the related Warrants being purchased by such Buyer at the Closing
by wire transfer of immediately available funds pursuant to the wire instructions provided by the Company.

 

(iii)The
representations and warranties of such Buyer shall be true and correct in all material respects (other than representations and
warranties that are already qualified by materiality or material adverse effect which shall be true and correct in all respects)
as of the date when made and as of the Closing Date as though originally made at that time (except for representations and warranties
that speak as of a specific date, which shall be true and correct as of such specific date), and such Buyer shall have performed,
satisfied and complied in all material respects with the covenants, agreements and conditions required by this Agreement to be
performed, satisfied or complied with by such Buyer at or prior to the Closing Date.

 

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7.CONDITIONS
TO EACH BUYER’S OBLIGATION TO PURCHASE.

 

(a)The obligation
of each Buyer hereunder to purchase its Note and its related Warrants at the Closing is subject to the satisfaction, at or before
the Closing Date, of each of the following conditions, provided that these conditions are for each Buyer’s sole benefit and
may be waived by such Buyer at any time in its sole discretion by providing the Company with prior written notice thereof:

 

(i)The
Company and each Subsidiary (as the case may be) shall have duly executed and delivered to such Buyer each of the Transaction Documents
to which it is a party and the Company shall have duly executed and delivered to such Buyer either (x) a Series A Note (in such
original principal amount as is set forth across from such Buyer’s name in column (3) of the Schedule of Buyers) or (y) Series
B Note (in such original principal amount as is set forth across from such Buyer’s name in column (4) of the Schedule of
Buyers), together with, in each case, the related Series A Warrants and Series B Warrants (initially for such aggregate number
of shares of Warrant Shares as is set forth across from such Buyer’s name in columns (5) and (6) of the Schedule of Buyers,
respectively) being purchased by such Buyer at the Closing pursuant to this Agreement.

 

(ii)If
any Series B Notes are to be sold to any Buyer at the Closing, each other Buyer shall have executed and delivered the Subordination
Agreement to the Company and such Buyer.

 

(iii)Such
Buyer shall have received the opinion of Roetzel & Andress, the Company’s counsel, dated as of the Closing Date, in the
form reasonably acceptable to such Buyer.

 

(iv)The
Company shall have delivered to such Buyer a copy of the Irrevocable Transfer Agent Instructions, in the form acceptable to such
Buyer, which instructions shall have been delivered to and acknowledged in writing by the Company’s transfer agent.

 

(v)The
Company shall have delivered to such Buyer a certified copy of the Certificate of Incorporation as certified by the Nevada Secretary
of State within ten (10) days of the Closing Date.

 

(vi)The
Company shall have delivered to such Buyer a certificate, in the form acceptable to such Buyer, executed by the Secretary of the
Company and dated as of the Closing Date, as to (I) the resolutions consistent with Section 3(b) as adopted by the Company’s
board of directors in a form reasonably acceptable to such Buyer, (II) the Certificate of Incorporation of the Company and (III)
the Bylaws of the Company, each as in effect at the Closing.

 

(vii)Each
and every representation and warranty of the Company shall be true and correct in all material respects (other than representations
and warranties that are already qualified by materiality or Material Adverse Effect which shall be true and correct in all respects)
as of the date when made and as of the Closing Date as though originally made at that time (except for representations and warranties
that speak as of a specific date, which shall be true and correct as of such specific date) and the Company shall have performed,
satisfied and complied in all material respects with the covenants, agreements and conditions required to be performed, satisfied
or complied with by the Company at or prior to the Closing Date. Such Buyer shall have received a certificate, duly executed by
the Chief Executive Officer of the Company, dated as of the Closing Date, to the foregoing effect and as to such other matters
as may be reasonably requested by such Buyer in the form acceptable to such Buyer.

 

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(viii)The
Company shall have delivered to such Buyer a letter from the Company’s transfer agent certifying the number of shares of
Common Stock outstanding on the Closing Date immediately prior to the Closing.

 

(ix)The
Common Stock (I) shall be designated for quotation or listed (as applicable) on the Principal Market and (II) shall not have been
suspended, as of the Closing Date, by the SEC or the Principal Market from trading on the Principal Market nor shall suspension
by the SEC or the Principal Market have been threatened, as of the Closing Date, either (A) in writing by the SEC or the Principal
Market or (B) by falling below the minimum maintenance requirements of the Principal Market.

 

(x)The
Company shall have obtained all governmental, regulatory or third party consents and approvals, if any, necessary for the sale
of the Securities, including without limitation, those required by the Principal Market.

 

(xi)No
statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed
by any court or governmental authority or other Governmental Entity of competent jurisdiction that prohibits the consummation of
any of the transactions contemplated by the Transaction Documents.

 

(xii)Since
the date of execution of this Agreement, no event or series of events shall have occurred that has or reasonably could be expected
to have a Material Adverse Effect.

 

(xiii)The
Company shall have obtained approval of the Principal Market to list or designate for quotation (as the case may be) the Conversion
Shares and the Warrant Shares.

 

(xiv)The
Company shall have duly executed and delivered to such Buyer the lock-up agreements, each in the form of Exhibit F
hereof (the “Lock-Up Agreements”), by and between the Company and each of the stockholders of the Company listed
on Schedule 7(a)(xiv), which in the aggregate beneficially own 26,916,948 shares of Common Stock outstanding immediately
prior to the Closing Date (the “Principal Stockholders”) and the Principal Stockholders shall have duly executed
and delivered to such Buyer the Lock-Up Agreement.

 

(xv)Such
Buyer shall have received a letter on the letterhead of the Company, duly executed by the Chief Executive Officer of the Company,
setting forth the wire transfer instructions of the Company.

 

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8.TERMINATION.

 

In the event that the
Closing shall not have occurred with respect to a Buyer within five (5) days of the date hereof, then such Buyer shall have the
right to terminate its obligations under this Agreement with respect to itself at any time on or after the close of business on
such date without liability of such Buyer to any other party; provided, however, (i) the right to terminate this Agreement under
this Section 8 shall not be available to such Buyer if the failure of the transactions contemplated by this Agreement to have been
consummated by such date is the result of such Buyer’s breach of this Agreement and (ii) the abandonment of the sale and
purchase of the Notes and the Warrants shall be applicable only to such Buyer providing such written notice, provided further that
no such termination shall affect any obligation of the Company under this Agreement to reimburse such Buyer for the expenses described
in Section 4(g) above. Nothing contained in this Section 8 shall be deemed to release any party from any liability for any breach
by such party of the terms and provisions of this Agreement or the other Transaction Documents or to impair the right of any party
to compel specific performance by any other party of its obligations under this Agreement or the other Transaction Documents.

 

9.MISCELLANEOUS.

 

(a)Governing
Law; Jurisdiction; Jury Trial. All questions concerning the construction, validity, enforcement and interpretation of this
Agreement shall be governed by the internal laws of the State of New York, without giving effect to any choice of law or conflict
of law provision or rule (whether of the State of New York or any other jurisdictions) that would cause the application of the
laws of any jurisdictions other than the State of New York. Each party hereby irrevocably submits to the exclusive jurisdiction
of the state and federal courts sitting in The City of New York, Borough of Manhattan, for the adjudication of any dispute hereunder
or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees
not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court,
that such suit, action or proceeding is brought in an inconvenient forum or that the venue of 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 for such 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. Nothing contained herein shall be deemed
or operate to preclude any Buyer from bringing suit or taking other legal action against the Company in any other jurisdiction
to collect on the Company’s obligations to such Buyer or to enforce a judgment or other court ruling in favor of such Buyer.
EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF
ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.

 

(b)Counterparts.
This Agreement may be executed in two or more identical counterparts, all of which shall be considered one and the same agreement
and shall become effective when counterparts have been signed by each party and delivered to the other party. In the event that
any signature is delivered by facsimile transmission or by an e-mail which contains a portable document format (.pdf) file of an
executed signature page, such signature page shall create a valid and binding obligation of the party executing (or on whose behalf
such signature is executed) with the same force and effect as if such signature page were an original thereof.

 

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(c)Headings;
Gender. The headings of this Agreement are for convenience of reference and shall not form part of, or affect the interpretation
of, this Agreement. Unless the context clearly indicates otherwise, each pronoun herein shall be deemed to include the masculine,
feminine, neuter, singular and plural forms thereof. The terms “including,” “includes,” “include”
and words of like import shall be construed broadly as if followed by the words “without limitation.” The terms “herein,”
“hereunder,” “hereof” and words of like import refer to this entire Agreement instead of just the provision
in which they are found.

 

(d)Severability;
Maximum Payment Amounts.. If any provision of this Agreement is prohibited by law or otherwise determined to be invalid or
unenforceable by a court of competent jurisdiction, the provision that would otherwise be prohibited, invalid or unenforceable
shall be deemed amended to apply to the broadest extent that it would be valid and enforceable, and the invalidity or unenforceability
of such provision shall not affect the validity of the remaining provisions of this Agreement so long as this Agreement as so modified
continues to express, without material change, the original intentions of the parties as to the subject matter hereof and the prohibited
nature, invalidity or unenforceability of the provision(s) in question does not substantially impair the respective expectations
or reciprocal obligations of the parties or the practical realization of the benefits that would otherwise be conferred upon the
parties. The parties will endeavor in good faith negotiations to replace the prohibited, invalid or unenforceable provision(s)
with a valid provision(s), the effect of which comes as close as possible to that of the prohibited, invalid or unenforceable provision(s).
Notwithstanding anything to the contrary contained in this Agreement or any other Transaction Document (and without implication
that the following is required or applicable), it is the intention of the parties that in no event shall amounts and value paid
by the Company and/or any of its Subsidiaries (as the case may be), or payable to or received by any of the Buyers, under the Transaction
Documents (including without limitation, any amounts that would be characterized as “interest” under applicable law)
exceed amounts permitted under any applicable law. Accordingly, if any obligation to pay, payment made to any Buyer, or collection
by any Buyer pursuant the Transaction Documents is finally judicially determined to be contrary to any such applicable law, such
obligation to pay, payment or collection shall be deemed to have been made by mutual mistake of such Buyer, the Company and its
Subsidiaries and such amount shall be deemed to have been adjusted with retroactive effect to the maximum amount or rate of interest,
as the case may be, as would not be so prohibited by the applicable law. Such adjustment shall be effected, to the extent necessary,
by reducing or refunding, at the option of such Buyer, the amount of interest or any other amounts which would constitute unlawful
amounts required to be paid or actually paid to such Buyer under the Transaction Documents. For greater certainty, to the extent
that any interest, charges, fees, expenses or other amounts required to be paid to or received by such Buyer under any of the Transaction
Documents or related thereto are held to be within the meaning of “interest” or another applicable term to otherwise
be violative of applicable law, such amounts shall be pro-rated over the period of time to which they relate.

 

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(e)Entire Agreement;
Amendments. This Agreement, the other Transaction Documents and the schedules and exhibits attached hereto and thereto and
the instruments referenced herein and therein supersede all other prior oral or written agreements between the Buyers, the Company,
its Subsidiaries, their affiliates and Persons acting on their behalf solely with respect to the matters contained herein and therein,
and this Agreement, the other Transaction Documents, the schedules and exhibits attached hereto and thereto and the instruments
referenced herein and therein contain the entire understanding of the parties solely with respect to the matters covered herein
and therein; provided, however, nothing contained in this Agreement or any other Transaction Document shall (or shall be deemed
to) (i) have any effect on any agreements any Buyer has entered into with, or any instruments any Buyer has received from, the
Company or any of its Subsidiaries prior to the date hereof with respect to any prior investment made by such Buyer in the Company
or (ii) waive, alter, modify or amend in any respect any obligations of the Company or any of its Subsidiaries, or any rights of
or benefits to any Buyer or any other Person, in any agreement entered into prior to the date hereof between or among the Company
and/or any of its Subsidiaries and any Buyer, or any instruments any Buyer received from the Company and/or any of its Subsidiaries
prior to the date hereof, and all such agreements and instruments shall continue in full force and effect. Except as specifically
set forth herein or therein, neither the Company nor any Buyer makes any representation, warranty, covenant or undertaking with
respect to such matters. For clarification purposes, the Recitals are part of this Agreement. No provision of this Agreement may
be amended other than by an instrument in writing signed by the Company and the Required Holders (as defined below), and any amendment
to any provision of this Agreement made in conformity with the provisions of this Section 9(e) shall be binding on all Buyers and
holders of Securities, as applicable, provided that no such amendment shall be effective to the extent that it (1) applies to less
than all of the holders of the Securities then outstanding or (2) imposes any obligation or liability on any Buyer without such
Buyer’s prior written consent (which may be granted or withheld in such Buyer’s sole discretion). No waiver shall be
effective unless it is in writing and signed by an authorized representative of the waiving party, provided that the Required Holders
may waive any provision of this Agreement, and any waiver of any provision of this Agreement made in conformity with the provisions
of this Section 9(e) shall be binding on all Buyers and holders of Securities, as applicable, provided that no such waiver shall
be effective to the extent that it (1) applies to less than all of the holders of the Securities then outstanding (unless a party
gives a waiver as to itself only) or (2) imposes any obligation or liability on any Buyer without such Buyer’s prior written
consent (which may be granted or withheld in such Buyer’s sole discretion). No consideration shall be offered or paid to
any Person to amend or consent to a waiver or modification of any provision of any of the Transaction Documents unless the same
consideration also is offered to all of the parties to the Transaction Documents, all holders of the Notes or all holders of the
Warrants (as the case may be). The Company has not, directly or indirectly, made any agreements with any Buyers relating to the
terms or conditions of the transactions contemplated by the Transaction Documents except as set forth in the Transaction Documents.
Without limiting the foregoing, the Company confirms that, except as set forth in this Agreement, no Buyer has made any commitment
or promise or has any other obligation to provide any financing to the Company, any Subsidiary or otherwise. As a material inducement
for each Buyer to enter into this Agreement, the Company expressly acknowledges and agrees that (i) no due diligence or other investigation
or inquiry conducted by a Buyer, any of its advisors or any of its representatives shall affect such Buyer’s right to rely
on, or shall modify or qualify in any manner or be an exception to any of, the Company’s representations and warranties contained
in this Agreement or any other Transaction Document and (ii) unless a provision of this Agreement or any other Transaction Document
is expressly preceded by the phrase “except as disclosed in the SEC Documents,” nothing contained in any of the SEC
Documents shall affect such Buyer’s right to rely on, or shall modify or qualify in any manner or be an exception to any
of, the Company’s representations and warranties contained in this Agreement or any other Transaction Document. “Required
Holders” means (i) prior to the Closing Date, each Buyer entitled to purchase Notes at the Closing and (ii) on or after
the Closing Date, holders of a majority of the Registrable Securities as of such time (excluding any Registrable Securities held
by the Company or any of its Subsidiaries as of such time) issued or issuable hereunder or pursuant to the Notes and/or the Warrants
(or the Buyers, with respect to any waiver or amendment of Section 4(o)); provided, that such majority must include Hudson Bay
Master Fund Ltd (to the extent Hudson Bay Master Fund Ltd holds any Notes, Warrants or Registrable Securities as of such time).

 

    	38

    	 

    
 

(f)Notices.
Any notices, consents, waivers or other communications required or permitted to be given under the terms of this Agreement must
be in writing and will be deemed to have been delivered: (i) upon receipt, if delivered personally; (ii) when sent, if sent by
facsimile (provided confirmation of transmission is mechanically or electronically generated and kept on file by the sending party);
(iii) when sent, if sent by e-mail (provided that such sent e-mail is kept on file (whether electronically or otherwise) by the
sending party and the sending party does not receive an automatically generated message from the recipient’s e-mail server
that such e-mail could not be delivered to such recipient) and (iv) if sent by overnight courier service, one (1) Business Day
after deposit with an overnight courier service with next day delivery specified, in each case, properly addressed to the party
to receive the same. The addresses, facsimile numbers and e-mail addresses for such communications shall be:

 

	 	If to the Company:	 	
        Fuse Science, Inc.

        6135 NW 167th Street

        #E21

        Miami Lakes, Florida 33015

        Phone No.: (305) 503-3873

        Facsimile: (305) 819-0900

        Attention: Chief Executive Officer

	 	 	 	 
	 	With a copy (for informational purposes only) to:	 	
        Roetzel & Andress, LPA

        350 E. Las Olas Boulevard

        Suite #1150

        Fort Lauderdale, Florida 33301

        Phone No.: (954) 759-2721

        Facsimile: (954) 462-4260

        Attention: Dale A. Bergman, Esq.

 

    	39

    	 

    

 

	 	and	 	 
	 	 	 	 
	 		 	
        Boyd & Jenerette

        801 Brickell Ave

        Suite #1440

        Miami, Florida 33131

        Phone No.: (305) 537-9120

        Facsimile: (305) 537-9130

        Attention: Jorge Gutierrez, Esq.

	 	 	 	 
	 	If
to the Transfer Agent:	 	
        Securities Transfer Corporation

        Issuances/Lost Securities

        2591 Dallas Parkway

        Suite #102

        Frisco, Texas 75034

        

        Phone No.: (469) 633-0101 x109

        Facsimile: (469) 633-0088

        Attention: Christina Shelton

 

If to a Buyer, to its address, facsimile
number or e-mail address set forth on the Schedule of Buyers, with copies to such Buyer’s representatives as set forth on
the Schedule of Buyers,

 

	 	With a copy (for informational purposes only) to: 	 	
        Greenberg Traurig, LLP

        MetLife Building

        200 Park Avenue

        New York, New York 10166

        Telephone: (212) 801-9200

        Facsimile: (212) 805-9222

        Attention: Michael A. Adelstein, Esq.

 

or to such other address, facsimile number
or e-mail address and/or to the attention of such other Person as the recipient party has specified by written notice given to
each other party five (5) days prior to the effectiveness of such change, provided that Greenberg Traurig, LLP shall only be provided
copies of notices sent to the lead Buyer. Written confirmation of receipt (A) given by the recipient of such notice, consent, waiver
or other communication, (B) mechanically or electronically generated by the sender’s facsimile machine containing the time,
date and recipient facsimile number or (C) provided by an overnight courier service shall be rebuttable evidence of personal service,
receipt by facsimile or receipt from an overnight courier service in accordance with clause (i), (ii) or (iv) above, respectively.
A copy of the e-mail transmission containing the time, date and recipient e-mail address shall be rebuttable evidence of receipt
by e-mail in accordance with clause (iii) above.

 

    	40

    	 

    
 

(g)Successors
and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and
assigns, including any assignee of any of the Securities (but only with respect to an assignee of such Securities to the extent
a Buyer has executed a written assignment of rights hereunder with respect thereto). The Company shall not assign this Agreement
or its rights and obligations hereunder without the prior written consent of the Required Holders, including, without limitation,
by way of a Fundamental Transaction (as defined in the Warrants) (unless the Company is in compliance with the applicable provisions
governing Fundamental Transactions set forth in the Warrants) or a Fundamental Transaction (as defined in the Notes) (unless the
Company is in compliance with the applicable provisions governing Fundamental Transactions set forth in the Notes). A Buyer may
assign some or all of its rights hereunder in connection with any transfer of any of its Securities without the consent of the
Company, in which event such assignee shall be deemed to be a Buyer hereunder with respect to such assigned rights.

 

(h)No Third
Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective permitted successors
and assigns, and is not for the benefit of, nor may any provision hereof be enforced by, any other Person, other than the Indemnitees
referred to in Section 9(k).

 

(i)Survival.
The representations, warranties, agreements and covenants shall survive the Closing. Each Buyer shall be responsible only for its
own representations, warranties, agreements and covenants hereunder.

 

(j)Further Assurances.
Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver
all such other agreements, certificates, instruments and documents, as any other party may reasonably request in order to carry
out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.

 

(k)Indemnification.
In consideration of each Buyer’s execution and delivery of the Transaction Documents and acquiring the Securities thereunder
and in addition to all of the Company’s other obligations under the Transaction Documents, the Company shall defend, protect,
indemnify and hold harmless each Buyer and each holder of any Securities and all of their stockholders, partners, members, officers,
directors, employees and direct or indirect investors and any of the foregoing Persons’ agents or other representatives (including,
without limitation, those retained in connection with the transactions contemplated by this Agreement) (collectively, the “Indemnitees”)
from and against any and all actions, causes of action, suits, claims, losses, costs, penalties, fees, liabilities and damages,
and expenses in connection therewith (irrespective of whether any such Indemnitee is a party to the action for which indemnification
hereunder is sought), and including reasonable attorneys’ fees and disbursements (the “Indemnified Liabilities”),
incurred by any Indemnitee as a result of, or arising out of, or relating to (a) any misrepresentation or breach of any representation
or warranty made by the Company or any Subsidiary in any of the Transaction Documents, (b) any breach of any covenant, agreement
or obligation of the Company or any Subsidiary contained in any of the Transaction Documents or (c) any cause of action, suit,
proceeding or claim brought or made against such Indemnitee by a third party (including for these purposes a derivative action
brought on behalf of the Company or any Subsidiary) or which otherwise involves such Indemnitee that arises out of or results from
(i) the execution, delivery, performance or enforcement of any of the Transaction Documents, (ii) any transaction financed or to
be financed in whole or in part, directly or indirectly, with the proceeds of the issuance of the Securities, (iii) any disclosure
properly made by such Buyer pursuant to Section 4(i), or (iv) the status of such Buyer or holder of the Securities either as an
investor in the Company pursuant to the transactions contemplated by the Transaction Documents or as a party to this Agreement
(including, without limitation, as a party in interest or otherwise in any action or proceeding for injunctive or other equitable
relief). To the extent that the foregoing undertaking by the Company may be unenforceable for any reason, the Company shall make
the maximum contribution to the payment and satisfaction of each of the Indemnified Liabilities which is permissible under applicable
law. Except as otherwise set forth herein, the mechanics and procedures with respect to the rights and obligations under this Section
9(k) shall be the same as those set forth in Section 6 of the Registration Rights Agreement.

 

    	41

    	 

    
 

(l)Construction.
The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and
no rules of strict construction will be applied against any party. No specific representation or warranty shall limit the generality
or applicability of a more general representation or warranty. Each and every reference to share prices, shares of Common Stock
and any other numbers in this Agreement that relate to the Common Stock shall be automatically adjusted for any stock splits, stock
dividends, stock combinations, recapitalizations or other similar transactions that occur with respect to the Common Stock after
the date of this Agreement.

 

(m)Remedies.
Each Buyer and in the event of assignment by Buyer of its rights and obligations hereunder, each holder of Securities, shall have
all rights and remedies set forth in the Transaction Documents and all rights and remedies which such holders have been granted
at any time under any other agreement or contract and all of the rights which such holders have under any law. Any Person having
any rights under any provision of this Agreement shall be entitled to enforce such rights specifically (without posting a bond
or other security), to recover damages by reason of any breach of any provision of this Agreement and to exercise all other rights
granted by law. Furthermore, the Company recognizes that in the event that it or any Subsidiary fails to perform, observe, or discharge
any or all of its or such Subsidiary’s (as the case may be) obligations under the Transaction Documents, any remedy at law
may prove to be inadequate relief to the Buyers. The Company therefore agrees that the Buyers shall be entitled to seek specific
performance and/or temporary, preliminary and permanent injunctive or other equitable relief from any court of competent jurisdiction
in any such case without the necessity of proving actual damages and without posting a bond or other security.

 

(n)Withdrawal
Right. Notwithstanding anything to the contrary contained in (and without limiting any similar provisions of) the Transaction
Documents, whenever any Buyer exercises a right, election, demand or option under a Transaction Document and the Company or any
Subsidiary does not timely perform its related obligations within the periods therein provided, then such Buyer may rescind or
withdraw, in its sole discretion from time to time upon written notice to the Company or such Subsidiary (as the case may be),
any relevant notice, demand or election in whole or in part without prejudice to its future actions and rights

 

    	42

    	 

    
 

(o)Payment Set
Aside; Currency. To the extent that the Company makes a payment or payments to any Buyer hereunder or pursuant to any of the
other Transaction Documents or any of the Buyers enforce or exercise their rights hereunder or thereunder, and such payment or
payments or the proceeds of such enforcement or exercise or any part thereof are subsequently invalidated, declared to be fraudulent
or preferential, set aside, recovered from, disgorged by or are required to be refunded, repaid or otherwise restored to the Company,
a trustee, receiver or any other Person under any law (including, without limitation, any bankruptcy law, foreign, state or federal
law, common law or equitable cause of action), then to the extent of any such restoration the obligation or part thereof originally
intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such enforcement
or setoff had not occurred. Unless otherwise expressly indicated, all dollar amounts referred to in this Agreement and the other
Transaction Documents are in United States Dollars (“U.S. Dollars”), and all amounts owing under this Agreement
and all other Transaction Documents shall be paid in U.S. Dollars. All amounts denominated in other currencies (if any) shall be
converted into the U.S. Dollar equivalent amount in accordance with the Exchange Rate on the date of calculation. “Exchange
Rate” means, in relation to any amount of currency to be converted into U.S. Dollars pursuant to this Agreement, the
U.S. Dollar exchange rate as published in the Wall Street Journal on the relevant date of calculation.

 

(p)Judgment
Currency.

 

(i)If
for the purpose of obtaining or enforcing judgment against the Company in connection with this Agreement or any other Transaction
Document in any court in any jurisdiction it becomes necessary to convert into any other currency (such other currency being hereinafter
in this Section 9(p) referred to as the “Judgment Currency”) an amount due in US Dollars under this Agreement,
the conversion shall be made at the Exchange Rate prevailing on the Trading Day immediately preceding:

 

(1)the date
actual payment of the amount due, in the case of any proceeding in the courts of New York or in the courts of any other jurisdiction
that will give effect to such conversion being made on such date: or

 

(2)the date
on which the foreign court determines, in the case of any proceeding in the courts of any other jurisdiction (the date as of which
such conversion is made pursuant to this Section 9(p)(i)(2) being hereinafter referred to as the “Judgment Conversion
Date”).

 

(ii)If
in the case of any proceeding in the court of any jurisdiction referred to in Section 9(p)(i)(2) above, there is a change in the
Exchange Rate prevailing between the Judgment Conversion Date and the date of actual payment of the amount due, the applicable
party shall pay such adjusted amount as may be necessary to ensure that the amount paid in the Judgment Currency, when converted
at the Exchange Rate prevailing on the date of payment, will produce the amount of US Dollars which could have been purchased with
the amount of Judgment Currency stipulated in the judgment or judicial order at the Exchange Rate prevailing on the Judgment Conversion
Date.

 

    	43

    	 

    
 

(iii)Any
amount due from the Company under this provision shall be due as a separate debt and shall not be affected by judgment being obtained
for any other amounts due under or in respect of this Agreement.

 

(q)Independent
Nature of Buyers’ Obligations and Rights. The obligations of each Buyer under the Transaction Documents are several and
not joint with the obligations of any other Buyer, and no Buyer shall be responsible in any way for the performance of the obligations
of any other Buyer under any Transaction Document. Nothing contained herein or in any other Transaction Document, and no action
taken by any Buyer pursuant hereto or thereto, shall be deemed to constitute the Buyers as, and the Company acknowledges that the
Buyers do not so constitute, a partnership, an association, a joint venture or any other kind of group or entity, or create a presumption
that the Buyers are in any way acting in concert or as a group or entity with respect to such obligations or the transactions contemplated
by the Transaction Documents or any matters, and the Company acknowledges that the Buyers are not acting in concert or as a group,
and the Company shall not assert any such claim, with respect to such obligations or the transactions contemplated by the Transaction
Documents. The decision of each Buyer to purchase Securities pursuant to the Transaction Documents has been made by such Buyer
independently of any other Buyer. Each Buyer acknowledges that no other Buyer has acted as agent for such Buyer in connection with
such Buyer making its investment hereunder and that no other Buyer will be acting as agent of such Buyer in connection with monitoring
such Buyer’s investment in the Securities or enforcing its rights under the Transaction Documents. The Company and each Buyer
confirms that each Buyer has independently participated with the Company and its Subsidiaries in the negotiation of the transaction
contemplated hereby with the advice of its own counsel and advisors. Each Buyer shall be entitled to independently protect and
enforce its rights, including, without limitation, the rights arising out of this Agreement or out of any other Transaction Documents,
and it shall not be necessary for any other Buyer to be joined as an additional party in any proceeding for such purpose. The use
of a single agreement to effectuate the purchase and sale of the Securities contemplated hereby was solely in the control of the
Company, not the action or decision of any Buyer, and was done solely for the convenience of the Company and its Subsidiaries and
not because it was required or requested to do so by any Buyer. It is expressly understood and agreed that each provision contained
in this Agreement and in each other Transaction Document is between the Company, each Subsidiary and a Buyer, solely, and not between
the Company, its Subsidiaries and the Buyers collectively and not between and among the Buyers.

 

 

[signature pages follow]

 

    	44

    	 

    

 

IN WITNESS WHEREOF, each Buyer and
the Company have caused their respective signature page to this Agreement to be duly executed as of the date first written above.

 

 

	 	COMPANY:
	 	 
	 	FUSE SCIENCE, INC.
	 	 
	 	 
	 	By: 	/s/ Brian Tuffin
	 	Name:	Brian Tuffin

	 	Title:	Chief Executive Officer

  

    	 

    	 

    

 

IN WITNESS WHEREOF, each Buyer and
the Company have caused their respective signature page to this Agreement to be duly executed as of the date first written above.

 

 

	 	BUYERS:
	 	 
	 	HUDSON BAY MASTER FUND LTD
	 	 
	 	 
	 	By: 	/s/ George Antonopoulos

	 	Name:	George Antonopoulos

	 	Title:	Authorized Signatory

 

 

    	 

    	 

    

 

IN WITNESS WHEREOF,
each Buyer and the Company have caused their respective signature page to this Agreement to be duly executed as of the date first
written above.

  

 

	 	IROQUOIS MASTER FUND LTD.
	 	 
	 	 
	 	By: 	/s/ Joshua Silverman

	 	Name:	Joshua Silverman

	 	Title:	Authorized Signatory

  

    	 

    	 

    

 

IN WITNESS WHEREOF,
each Buyer and the Company have caused their respective signature page to this Agreement to be duly executed as of the date first
written above.

 

 

	 	GRQ CONSULTANTS, INC. 401(K)
	 	 
	 	By:	/s/ Barry
Honig
	 	Name:	Barry Honig
	 	Title:	Trustee

 

    	 

    	 

    

 

IN WITNESS WHEREOF,
each Buyer and the Company have caused their respective signature page to this Agreement to be duly executed as of the date first
written above.

  

 

	 	
        OMNIPOINT CAPITAL, LLC 

	 	 
	 	 
	 	By: 	/s/ Leonard Adler

	 	Name:	Leonard Adler

	 	Title:	Manager

  

    	 

    	 

    

 

IN WITNESS WHEREOF,
each Buyer and the Company have caused their respective signature page to this Agreement to be duly executed as of the date first
written above.

  

 

	 	
        

CORADOR MULTI STRATEGY PARTNERS, LP

	 	 
	 	 
	 	By: 	/s/ David E Graber

	 	Name:	David E. Graber

	 	Title:	Managing Principal

 

    	 

    	 

    

 

IN WITNESS WHEREOF,
each Buyer and the Company have caused their respective signature page to this Agreement to be duly executed as of the date first
written above.

  

 

	 	
        EVOLUTION CAPITAL FUND I, L.P. 

	 	 
	 	 
	 	By: 	/s/ Scott DeBo

	 	Name:	Scott DeBo

	 	Title:	Manager

  

    	 

    	 

    

 

IN WITNESS WHEREOF,
each Buyer and the Company have caused their respective signature page to this Agreement to be duly executed as of the date first
written above.

 

	 	 
	 	 	 /s/ Rahoul Mehra

	 	 	RAHOUL MEHRA
	 	 	 

  

	 	 
	 	 	/s/ Glennis Mehra

	 	 	GLENNIS MEHRA
	 	 	 

  

    	 

    	 

    

 

IN WITNESS WHEREOF,
each Buyer and the Company have caused their respective signature page to this Agreement to be duly executed as of the date first
written above. 

 

	 	 
	 	 	/s/ Christopher Hubman

	 	 	CHRISTOPHER HUBMAN
	 	 	 

  

    	 

    	 

    

 

IN WITNESS WHEREOF,
each Buyer and the Company have caused their respective signature page to this Agreement to be duly executed as of the date first
written above. 

 

	 	 
	 	 	/s/ Daniel Foley

	 	 	DANIEL FOLEY
	 	 	 

  

    	 

    	 

    

 

SCHEDULE
OF BUYERS

 

	(1)	(2)	(3)	(4)	(5)	(6)	(7)	(8)
	Buyer	Address and Facsimile Number	Original Principal Amount of

Series A

Notes	Original

Principal Amount of

Series B

Notes	Aggregate

Number of

Series A

Warrant Shares	Aggregate

Number of

Series B

Warrant Shares	Purchase Price	Legal Representative’s

Address and Facsimile Number
	 	 	 	 	 	 	 	 
	Hudson Bay Master Fund Ltd	777 Third Avenue, 30th Floor

New York, NY 10017

Attention: Yoav Roth

Facsimile: (212) 571-1279

E-mail: investments@hudsonbaycapital.com

Residence: Cayman Islands	$625,000	N/A	3,676,471	3,676,471	$625,000	N/A
	 	 	 	 	 	 	 	 
	Iroquois Master Fund Ltd.	
        Iroquois Master Fund Ltd.

        641 Lexington Avenue

        26th Floor

        New York, New York 10022

        Facsimile: (212) 207-3452

        Residence: Cayman Islands
	$625,000	N/A	3,676,471	3,676,471	$625,000	N/A
	 	 	 	 	 	 	 	 
	GRQ Consultants, Inc. 401K 	
        c/o Barry Honig, trustee

        4400 Biscyane Bvd

        Suite 850

        Miami, Florida 33137

        Residence: Florida
	$250,000	N/A	1,470,589	1,470,589	$250,000	N/A
	 	 	 	 	 	 	 	 
	Omnipoint Capital, LLC	
        8004 N.W. 154th Street

        Suite #312

        Miami, Florida 33015
	N/A	$250,0001	1,470,589	1,470589	$250,0001	N/A

 

 

 

		1	Represents conversion of an outstanding promissory note in the principal amount of $250,000.

  

    	 

    	 

    
 

	Cobrador Capital Advisors, LLC	
        570 Lexington Avenue

        49th Floor

        New York, NY 10022
	N/A	$100,000	588,236	588,236	$100,000	N/A
	 	 	 	 	 	 	 	 
	Evolution Capital Fund I, L.P.	
        c/o Vincent Rees

        175 South Main Street

        15th Floor

        Salt Lake City UT 84111
	N/A	$50,000	294,118	294,118	$50,000	N/A
	 	 	 	 	 	 	 	 
	Rahoul & Glennis Mehra	 	N/A	$50,000	294,118	294,118	$50,000	N/A
	 	 	 	 	 	 	 	 
	Christopher Hubman	

645 Hermitage Circle 

Palm Beach Florida 33410

Facsimilie: 561-354-6039

Residence: Florida	N/A	$50,000	294,118	294,118	$50,000	N/A
	 	 	 	 	 	 	 	 
	Daniel Foley	

27 North Bayard

Mahwah, NJ 07430

Residence: New Jersey	N/A	$50,000	294,118	294,118	$50,000	N/A
	TOTAL:	 	$2,050,000	12,058,828	12,058,828	$2,050,000Exhibit 10.2

 

FORM OF SERIES A SENIOR CONVERTIBLE
NOTE

 

NEITHER THE ISSUANCE AND SALE OF THE
SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLE HAVE BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE,
SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL TO THE HOLDER (IF REQUESTED BY THE COMPANY), IN A FORM REASONABLY ACCEPTABLE
TO THE COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD OR ELIGIBLE TO BE SOLD PURSUANT TO RULE 144
OR RULE 144A UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN
ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES. ANY TRANSFEREE OF THIS NOTE SHOULD CAREFULLY REVIEW THE
TERMS OF THIS NOTE, INCLUDING SECTIONS 3(c)(iii)

AND 17(a)

HEREOF. THE PRINCIPAL AMOUNT REPRESENTED BY THIS NOTE AND, ACCORDINGLY, THE SECURITIES ISSUABLE UPON CONVERSION
HEREOF MAY BE LESS THAN THE AMOUNTS SET FORTH ON THE FACE HEREOF PURSUANT TO SECTION 3(c)(iii)

OF THIS NOTE.

 

Fuse
Science, Inc.

 

Series
A Senior Convertible Note

 

	
        Issuance Date: [●]
2013
	Original Principal Amount: U.S. $[●]

 

FOR VALUE RECEIVED,
Fuse Science, Inc., a Nevada corporation (the “Company”), hereby promises to pay to the order of [BUYER]
or its registered assigns (“Holder”) the amount set out above as the Original Principal Amount (as reduced
pursuant to the terms hereof pursuant to redemption, conversion or otherwise, the “Principal”) when due, whether
upon the Maturity Date (as defined below), acceleration, redemption or otherwise (in each case in accordance with the terms hereof)
and to pay interest (“Interest”) on any outstanding Principal (as defined below) at the applicable Interest
Rate (as defined below) from the date set out above as the Issuance Date (the “Issuance Date”) until the same
becomes due and payable, whether upon the Maturity Date or acceleration, conversion, redemption or otherwise (in each case in
accordance with the terms hereof). This Series A Senior Convertible Note (including all Senior Convertible Notes issued in exchange,
transfer or replacement hereof, this “Series A Note” or “Note”) is one of an issue of Senior
Convertible Notes issued pursuant to the Securities Purchase Agreement (as defined below) on the Closing Date (as defined below)
(collectively, the “Series A Notes” and such other Senior Convertible Notes, the “Other A Notes”)
and have been issued concurrently with an issue of Senior Subordinated Convertible Notes issued pursuant to the Securities Purchase
Agreement on the Closing Date (collectively, the “Series B Notes”, and together with the Other A Notes, the
“Other Notes”, and the Series B Notes and the Series A Notes, collectively, the “Notes”).
Certain capitalized terms used herein are defined in Section ‎29.

 

    	

    	 

    
 

 

1.PAYMENTS
OF PRINCIPAL. On the Maturity Date, the Company shall pay to the Holder an amount
in cash representing all outstanding Principal, accrued and unpaid Interest and accrued and unpaid Late Charges on such Principal
and Interest. Other than as specifically permitted by this Note, the Company may not prepay any portion of the outstanding Principal,
accrued and unpaid Interest or accrued and unpaid Late Charges on Principal and Interest, if any.

 

2.INTEREST;
INTEREST RATE.

 

(a)Interest
on this Note shall commence accruing on the Issuance Date and shall be computed on the basis of a 360-day year and twelve 30-day
months, shall be payable in arrears for each Quarter on January 15, April 15, July 15 and October 15 of each year (each, an “Interest
Date”) with the first Interest Date being April 15, 2013, and shall compound on each Interest Date. Interest shall be
payable on each Interest Date, to the record holder of this Note on the applicable Interest Date, in shares of Common Stock (“Interest
Shares”) so long as there has been no Equity Conditions Failure; provided however, that the Company may, at its option
following written notice to the Holder, pay Interest on any Interest Date in cash (“Cash Interest”) or in a
combination of Cash Interest and Interest Shares. The Company shall deliver a written notice (each, an “Interest Election
Notice”) to each holder of the Notes on or prior to the Interest Notice Due Date (the date such notice is delivered
to all of the holder, the “Interest Notice Date”) which notice (i) either (A) confirms that Interest to be
paid on such Interest Date shall be paid entirely in Interest Shares or (B) elects to pay Interest as Cash Interest or a combination
of Cash Interest and Interest Shares and specifies the amount of Interest that shall be paid as Cash Interest and the amount of
Interest, if any, that shall be paid in Interest Shares and (ii) certifies that there has been no Equity Conditions Failure. If
an Equity Conditions Failure has occurred as of the Interest Notice Date, then unless the Company has elected to pay such Interest
as Cash Interest, the Interest Notice shall indicate that unless the Holder waives the Equity Conditions Failure, the Interest
shall be paid as Cash Interest. Notwithstanding anything herein to the contrary, if no Equity Conditions Failure has occurred
as of the Interest Notice Date but an Equity Conditions Failure occurs at any time prior to the Interest Date, (A) the Company
shall provide the Holder a subsequent notice to that effect and (B) unless the Holder waives the Equity Conditions Failure, the
Interest shall be paid in cash. Interest to be paid on an Interest Date in Interest Shares shall be paid in a number of fully
paid and nonassessable shares (rounded to the nearest whole share in accordance with Section 3(a)) of Common Stock equal
to the quotient of (1) the amount of Interest payable on such Interest Date less any Cash Interest paid and (2) the Interest Conversion
Price in effect on the applicable Interest Date.

 

(b)When
any Interest Shares are to be paid on an Interest Date, the Company shall (i) (A) provided that the Company’s transfer agent
(the “Transfer Agent”) is participating in the Depository Trust Company (“DTC”) Fast Automated
Securities Transfer Program, credit such aggregate number of Interest Shares to which the Holder shall be entitled to the Holder’s
or its designee’s balance account with DTC through its Deposit/Withdrawal at Custodian system, or (B) if the Transfer Agent
is not participating in the DTC Fast Automated Securities Transfer Program, issue and deliver on the applicable Interest Date,
to the address set forth in the register maintained by the Company for such purpose pursuant to the Securities Purchase Agreement
or to such address as specified by the Holder in writing to the Company at least two (2) Business Days prior to the applicable
Interest Date, a certificate, registered in the name of the Holder or its designee, for the number of Interest Shares to which
the Holder shall be entitled and (ii) with respect to each Interest Date, pay to the Holder, in cash by wire transfer of immediately
available funds, the amount of any Cash Interest. 

 

    	2

    	 

    
 

 

(c)Prior
to the payment of Interest on an Interest Date, Interest on this Note shall accrue at the Interest Rate and be payable by
way of inclusion of the Interest in the Conversion Amount on each Conversion Date in accordance with Section 3(b)(i)
or upon any redemption in accordance with Section 10. From and after the occurrence and during the continuance of any Event
of Default, the Interest Rate shall automatically be increased to fifteen percent (15.0%). In the event that such Event of Default
is subsequently cured, the adjustment referred to in the preceding sentence shall cease to be effective as of the calendar day
immediately following the date of such cure; provided that the Interest as calculated and unpaid at such increased rate during
the continuance of such Event of Default shall continue to apply to the extent relating to the days after the occurrence of such
Event of Default through and including the date of such cure of such Event of Default. The Company shall pay any and all taxes
that may be payable with respect to the issuance and delivery of Interest Shares.

 

3.CONVERSION
OF NOTES. This Note shall be convertible into validly issued, fully paid and non-assessable
shares of Common Stock (as defined below), on the terms and conditions set forth in this Section 3.

 

(a)Conversion
Right. Subject to the provisions of Section 3(d), at any time or times on or after the Issuance Date, the Holder shall be
entitled to convert any portion of the outstanding and unpaid Conversion Amount (as defined below) into validly issued, fully
paid and non-assessable shares of Common Stock in accordance with Section 3(c), at the Conversion Rate (as defined below).
The Company shall not issue any fraction of a share of Common Stock upon any conversion. If the issuance would result in the issuance
of a fraction of a share of Common Stock, the Company shall round such fraction of a share of Common Stock up to the nearest whole
share. The Company shall pay any and all transfer, stamp, issuance and similar taxes that may be payable with respect to the issuance
and delivery of Common Stock upon conversion of any Conversion Amount.

 

(b)Conversion
Rate. The number of shares of Common Stock issuable upon conversion of any Conversion Amount pursuant to
Section 3(a) shall be determined by dividing (x) such Conversion Amount by (y) the Conversion Price (the
“Conversion Rate”).

 

    	3

    	 

    
 

 

(i)“Conversion
Amount” means the portion of the Principal to be converted, redeemed or otherwise with respect to which this determination
is being made, plus all accrued and unpaid Interest with respect to such portion of the Principal amount and accrued and unpaid
Late Charges with respect to such portion of such Principal and such Interest.

 

(ii)“Conversion
Price” means, as of any Conversion Date or other date of determination, $[ ]1 subject to adjustment as provided
herein.

 

(c)Mechanics
of Conversion.

 

(i)Optional
Conversion. To convert any Conversion Amount into shares of Common Stock on any date (a “Conversion Date”),
the Holder shall deliver (whether via facsimile or otherwise), for receipt on or prior to 11:59 p.m., New York time, on such date,
a copy of an executed notice of conversion in the form attached hereto as Exhibit I (the “Conversion Notice”)
to the Company. If required by Section 3(c)(iii), within three (3) Trading Days following a conversion of this Note as aforesaid,
the Holder shall surrender this Note to a nationally recognized overnight delivery service for delivery to the Company (or an
indemnification undertaking with respect to this Note in the case of its loss, theft or destruction as contemplated by Section 17(b)).
On or before the first (1st) Trading Day following the date of receipt of a Conversion Notice, the Company shall transmit
by facsimile an acknowledgment of confirmation, in the form attached hereto as Exhibit II, of receipt of such Conversion Notice
to the Holder and the Transfer Agent. On or before the second (2nd) Trading Day following the date of receipt of a
Conversion Notice, the Company shall (1) provided that the Transfer Agent is participating in the DTC Fast Automated Securities
Transfer Program, credit such aggregate number of shares of Common Stock to which the Holder shall be entitled to the Holder’s
or its designee’s balance account with DTC through its Deposit/Withdrawal at Custodian system or (2) if the Transfer Agent
is not participating in the DTC Fast Automated Securities Transfer Program, issue and deliver (via reputable overnight courier)
to the address as specified in the Conversion Notice, a certificate, registered in the name of the Holder or its designee, for
the number of shares of Common Stock to which the Holder shall be entitled. If this Note is physically surrendered for conversion
pursuant to Section 3(c)(iii) and the outstanding Principal of this Note is greater than the Principal portion of the Conversion
Amount being converted, then the Company shall as soon as practicable and in no event later than three (3) Business Days after
receipt of this Note and at its own expense, issue and deliver to the Holder (or its designee) a new Note (in accordance with
Section 17(d)) representing the outstanding Principal not converted. The Person or Persons entitled to receive the shares
of Common Stock issuable upon a conversion of this Note shall be treated for all purposes as the record holder or holders of such
shares of Common Stock on the Conversion Date.

  

 

 

1Insert
price equal to the lesser of (x) $0.17 (as adjusted for stock splits, stock dividends, stock combinations, recapitalizations or
other similar transactions) and (y) 85% of the Market Price as of close of business on the Principal Market immediately prior
to the time of execution of the Securities Purchase Agreement.

 

    	4

    	 

    
 

 

(ii)Company’s
Failure to Timely Convert. If the Company shall fail, for any reason or for no reason, to issue to the Holder within three
(3) Trading Days after the Company’s receipt of a Conversion Notice (whether via facsimile or otherwise) (the “Share
Delivery Deadline”), a certificate for the number of shares of Common Stock to which the Holder is entitled and register
such shares of Common Stock on the Company’s share register or to credit the Holder’s or its designee’s balance
account with DTC for such number of shares of Common Stock to which the Holder is entitled upon the Holder’s conversion of
any Conversion Amount (as the case may be) (a “Conversion Failure”) and if on or after such Share Delivery Deadline
the Holder (or any other Person in respect, or on behalf, of the Holder) purchases (in an open market transaction or otherwise)
shares of Common Stock to deliver in satisfaction of a sale by the Holder of all or any portion of the number of shares of Common
Stock, or a sale of a number of shares of Common Stock equal to all or any portion of the number of shares of Common Stock, issuable
upon such conversion that the Holder so anticipated receiving from the Company, then, in addition to all other remedies available
to the Holder, the Company shall, within three (3) Business Days after receipt of the Holder’s written request and in the
Holder’s discretion, either: (i) pay cash to the Holder in an amount equal to the Holder’s total purchase price (including
brokerage commissions and other out-of-pocket expenses, if any) for the shares of Common Stock so purchased (including, without
limitation, by any other Person in respect, or on behalf, of the Holder) (the “Buy-In Price”), at which point
the Company’s obligation to so issue and deliver such certificate or credit the Holder’s balance account with DTC for
the number of shares of Common Stock to which the Holder is entitled upon the Holder’s conversion hereunder (as the case
may be) (and to issue such shares of Common Stock) shall terminate, or (ii) promptly honor its obligation to so issue and deliver
to the Holder a certificate or certificates representing such shares of Common Stock or credit the Holder’s balance account
with DTC for the number of shares of Common Stock to which the Holder is entitled upon the Holder’s conversion hereunder
(as the case may be) and pay cash to the Holder in an amount equal to the excess (if any) of the Buy-In Price over the product
of (A) such number of shares of Common Stock multiplied by (B) the lowest Closing Sale Price of the Common Stock on any Trading
Day during the period commencing on the date of the applicable Conversion Notice and ending on the date of such issuance and payment
under this clause (ii).

 

(iii)Registration;
Book-Entry. The Company shall maintain a register (the “Register”) for the recordation of the names and
addresses of the holders of each Note and the principal amount of the Notes held by such holders (the “Registered Notes”).
The entries in the Register shall be conclusive and binding for all purposes absent manifest error. The Company and the holders
of the Notes shall treat each Person whose name is recorded in the Register as the owner of a Note for all purposes (including,
without limitation, the right to receive payments of Principal and Interest hereunder) notwithstanding notice to the contrary.
A Registered Note may be assigned, transferred or sold in whole or in part only by registration of such assignment or sale on
the Register. Upon its receipt of a written request to assign, transfer or sell all or part of any Registered Note by the holder
thereof, the Company shall record the information contained therein in the Register and issue one or more new Registered Notes
in the same aggregate principal amount as the principal amount of the surrendered Registered Note to the designated assignee or
transferee pursuant to Section 17, provided that if the Company does not so record an assignment, transfer or sale (as the
case may be) of all or part of any Registered Note within two (2) Business Days of its receipt of such a request, then the Register
shall be automatically updated to reflect such assignment, transfer or sale (as the case may be). Notwithstanding anything to
the contrary set forth in this Section 3, following conversion of any portion of this Note in accordance with the terms hereof,
the Holder shall not be required to physically surrender this Note to the Company unless (A) the full Conversion Amount represented
by this Note is being converted (in which event this Note shall be delivered to the Company following conversion thereof as contemplated
by Section 3(c)(i)) or (B) the Holder has provided the Company with prior written notice (which notice may be included in a Conversion
Notice) requesting reissuance of this Note upon physical surrender of this Note. The Holder and the Company shall maintain records
showing the Principal, Interest and Late Charges converted and/or paid (as the case may be) and the dates of such conversions
and/or payments (as the case may be) or shall use such other method, reasonably satisfactory to the Holder and the Company, so
as not to require physical surrender of this Note upon conversion.

 

    	5

    	 

    
 

 

(iv)Pro
Rata Conversion; Disputes. In the event that the Company receives a Conversion Notice from more than one holder of Notes for
the same Conversion Date and the Company can convert some, but not all, of such portions of the Notes submitted for conversion,
the Company, subject to Section 3(d)

, shall convert from each holder of Notes electing to have Notes converted on such date a pro rata amount
of such holder’s portion of its Notes submitted for conversion based on the principal amount of Notes submitted for conversion
on such date by such holder relative to the aggregate principal amount of all Notes submitted for conversion on such date. In the
event of a dispute as to the number of shares of Common Stock issuable to the Holder in connection with a conversion of this Note,
the Company shall issue to the Holder the number of shares of Common Stock not in dispute and resolve such dispute in accordance
with Section 22

.

 

(d)Limitations
on Conversions. Notwithstanding anything to the contrary contained in this Note, this Note shall not be convertible by the
Holder hereof, and the Company shall not effect any conversion of this Note or otherwise issue any shares of Common Stock pursuant
hereto, to the extent (but only to the extent) that after giving effect to such conversion or other share issuance hereunder the
Holder or any of its affiliates would beneficially own in excess of [4.99%][9.99%]2 (the “Maximum Percentage”)
of the Common Stock. To the extent the above limitation applies, the determination of whether this Note shall be convertible (vis-à-vis
other convertible, exercisable or exchangeable securities owned by the Holder or any of its affiliates) and of which such securities
shall be convertible, exercisable or exchangeable (as among all such securities owned by the Holder and its affiliates) shall,
subject to such Maximum Percentage limitation, be determined on the basis of the first submission to the Company for conversion,
exercise or exchange (as the case may be). No prior inability to convert this Note, or to issue shares of Common Stock, pursuant
to this paragraph shall have any effect on the applicability of the provisions of this paragraph with respect to any subsequent
determination of convertibility. For purposes of this paragraph, beneficial ownership and all determinations and calculations
(including, without limitation, with respect to calculations of percentage ownership) shall be determined in accordance with Section 13(d)
of the 1934 Act (as defined in the Securities Purchase Agreement) and the rules and regulations promulgated thereunder. The provisions
of this paragraph shall be implemented in a manner otherwise than in strict conformity with the terms of this paragraph to correct
this paragraph (or any portion hereof) which may be defective or inconsistent with the intended Maximum Percentage beneficial
ownership limitation herein contained or to make changes or supplements necessary or desirable to properly give effect to such
Maximum Percentage limitation. The limitations contained in this paragraph shall apply to a successor Holder of this Note. The
holders of Common Stock shall be third party beneficiaries of this paragraph and the Company may not waive this paragraph without
the consent of holders of a majority of its Common Stock. For any reason at any time, upon the written or oral request of the
Holder, the Company shall within one (1) Business Day confirm orally and in writing to the Holder the number of shares of Common
Stock then outstanding, including by virtue of any prior conversion or exercise of convertible or exercisable securities into
Common Stock, including, without limitation, pursuant to this Note or securities issued pursuant to the Securities Purchase Agreement.
By written notice to the Company, any Holder may increase or decrease the Maximum Percentage to any other percentage not in excess
of 9.99% specified in such notice; provided that (i) any such increase will not be effective until the 61st day after
such notice is delivered to the Company, and (ii) any such increase or decrease will apply only to the Holder sending such notice
and not to any other holder of Notes.

 

 

 2
Initial Maximum Percentage to be elected by such Holder prior to the Closing Date

 

    	6

    	 

    

 

4.RIGHTS
UPON EVENT OF DEFAULT.

 

(a)Event
of Default. Each of the following events shall constitute an “Event of Default”:

 

(i)the
suspension from trading or the failure of the Common Stock to be trading or listed (as applicable) on an Eligible Market for a
period of five (5) consecutive days or for more than an aggregate of ten (10) days in any 365 day period;

 

(ii)the
Company’s (A) failure to cure a Conversion Failure or a Delivery Failure (as defined in the Warrants) by delivery of the
required number of shares of Common Stock within five (5) Trading Days after the applicable Conversion Date or exercise date (as
the case may be) or (B) notice, written or oral, to any holder of the Notes or Warrants, including, without limitation, by way
of public announcement or through any of its agents, at any time, of its intention not to comply, as required, with a request for
conversion of any Notes into shares of Common Stock that is requested in accordance with the provisions of the Notes, other than
pursuant to Section 3(d)

, or a request for exercise of any Warrants for Warrant Shares in accordance with the provisions of the
Warrants;

 

(iii)at
any time following the tenth (10th) consecutive day that the Holder’s Authorized Share Allocation is less than
the number of shares of Common Stock that the Holder would be entitled to receive upon a conversion of the full Conversion Amount
of this Note (without regard to any limitations on conversion set forth in Section 3(d) or otherwise);

 

    	7

    	 

    
 

 

(iv)the
Company’s or any Subsidiary’s failure to pay to the Holder any amount of Principal, Interest, Late Charges or other
amounts when and as due under this Note (including, without limitation, the Company’s or any Subsidiary’s failure to
pay any redemption payments or amounts hereunder) or any other Transaction Document (as defined in the Securities Purchase Agreement)
or any other agreement, document, certificate or other instrument delivered in connection with the transactions contemplated hereby
and thereby, except, in the case of a failure to pay Interest and Late Charges when and as due, in which case only if such failure
remains uncured for a period of at least five (5) days;

 

(v)the
Company fails to remove any restrictive legend on any certificate or any shares of Common Stock issued to the Holder upon conversion
or exercise (as the case may be) of any Securities acquired by the Holder under the Securities Purchase Agreement (including this
Note) as and when required by such Securities or the Securities Purchase Agreement, unless otherwise then prohibited by applicable
state or federal securities laws, and any such failure remains uncured for at least five (5) days;

 

(vi)the
occurrence of any default under, redemption of or acceleration prior to maturity of any Indebtedness (as defined in the Securities
Purchase Agreement) in excess of $150,000 of the Company or any of its Subsidiaries, other than with respect to any Other Notes;

 

(vii)bankruptcy,
insolvency, reorganization or liquidation proceedings or other proceedings for the relief of debtors shall be instituted by or
against the Company or any Subsidiary and, if instituted against the Company or any Subsidiary by a third party, shall not be dismissed
within thirty (30) days of their initiation;

 

(viii)the
commencement by the Company or any Subsidiary of a voluntary case or proceeding under any applicable federal, state or foreign
bankruptcy, insolvency, reorganization or other similar law or of any other case or proceeding to be adjudicated a bankrupt or
insolvent, or the consent by it to the entry of a decree, order, judgment or other similar document in respect of the Company or
any Subsidiary in an involuntary case or proceeding under any applicable federal, state or foreign bankruptcy, insolvency, reorganization
or other similar law or to the commencement of any bankruptcy or insolvency case or proceeding against it, or the filing by it
of a petition or answer or consent seeking reorganization or relief under any applicable federal, state or foreign law, or the
consent by it to the filing of such petition or to the appointment of or taking possession by a custodian, receiver, liquidator,
assignee, trustee, sequestrator or other similar official of the Company or any Subsidiary or of any substantial part of its property,
or the making by it of an assignment for the benefit of creditors, or the execution of a composition of debts, or the occurrence
of any other similar federal, state or foreign proceeding, or the admission by it in writing of its inability to pay its debts
generally as they become due, the taking of corporate action by the Company or any Subsidiary in furtherance of any such action
or the taking of any action by any Person to commence a Uniform Commercial Code foreclosure sale or any other similar action under
federal, state or foreign law;

 

    	8

    	 

    
 

 

(ix)the
entry by a court of (i) a decree, order, judgment or other similar document in respect of the Company or any Subsidiary of a voluntary
or involuntary case or proceeding under any applicable federal, state or foreign bankruptcy, insolvency, reorganization or other
similar law or (ii) a decree, order, judgment or other similar document adjudging the Company or any Subsidiary as bankrupt or
insolvent, or approving as properly filed a petition seeking liquidation, reorganization, arrangement, adjustment or composition
of or in respect of the Company or any Subsidiary under any applicable federal, state or foreign law or (iii) a decree, order,
judgment or other similar document appointing a custodian, receiver, liquidator, assignee, trustee, sequestrator or other similar
official of the Company or any Subsidiary or of any substantial part of its property, or ordering the winding up or liquidation
of its affairs, and the continuance of any such decree, order, judgment or other similar document or any such other decree, order,
judgment or other similar document unstayed and in effect for a period of thirty (30) consecutive days;

 

(x)a
final judgment or judgments for the payment of money aggregating in excess of $150,000 are rendered against the Company and/or
any of its Subsidiaries and which judgments are not, within thirty (30) days after the entry thereof, bonded, discharged or stayed
pending appeal, or are not discharged within thirty (30) days after the expiration of such stay; provided, however, any judgment
which is covered by insurance or an indemnity from a credit worthy party shall not be included in calculating the $150,000 amount
set forth above so long as the Company provides the Holder a written statement from such insurer or indemnity provider (which written
statement shall be reasonably satisfactory to the Holder) to the effect that such judgment is covered by insurance or an indemnity
and the Company or such Subsidiary (as the case may be) will receive the proceeds of such insurance or indemnity within thirty
(30) days of the issuance of such judgment;

 

(xi)the
Company and/or any Subsidiary, individually or in the aggregate, either (i) fails to pay, when due, or within any applicable grace
period, any payment with respect to any Indebtedness in excess of $150,000 due to any third party (other than, with respect to
unsecured Indebtedness only, payments contested by the Company and/or such Subsidiary (as the case may be) in good faith by proper
proceedings and with respect to which adequate reserves have been set aside for the payment thereof in accordance with GAAP) or
is otherwise in breach or violation of any agreement for monies owed or owing in an amount in excess of $150,000, which breach
or violation permits the other party thereto to declare a default or otherwise accelerate amounts due thereunder, or (ii) suffer
to exist any other circumstance or event that would, with or without the passage of time or the giving of notice, result in a default
or event of default under any agreement binding the Company or any Subsidiary, which default or event of default would or is likely
to have a material adverse effect on the business, assets, operations (including results thereof), liabilities, properties, condition
(including financial condition) or prospects of the Company or any of its Subsidiaries, individually or in the aggregate;

 

    	9

    	 

    
 

 

(xii)other
than as specifically set forth in another clause of this Section 4(a)

, the Company or any Subsidiary breaches any representation, warranty,
covenant or other term or condition of any Transaction Document, except, in the case of a breach of a covenant or other term or
condition that is curable, only if such breach remains uncured for a period of three (3) consecutive Trading Days;

 

(xiii)any
strike, lockout, labor dispute, embargo, condemnation, act of God or public enemy, or other casualty which causes, for more than
fifteen (15) consecutive days, the cessation or substantial curtailment of revenue producing activities at any facility of the
Company or any Subsidiary, if any such event or circumstance could reasonably be expected to have a Material Adverse Effect (as
defined in the Securities Purchase Agreement);

 

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

 

(xv)any
breach or failure in any respect by the Company or any Subsidiary to comply with any provision of Section 12

of this Note;

 

(xvi)any
Material Adverse Effect (as defined in the Securities Purchase Agreement) occurs; or

 

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

 

(b)Notice
of an Event of Default; Redemption Right. Upon the occurrence of an Event of Default with respect to this Note or any
Other Note, the Company shall within one (1) Business Day deliver written notice thereof via facsimile and overnight courier
(with next day delivery specified) (an “Event of Default Notice”) to the Holder. At any time after the
earlier of the Holder’s receipt of an Event of Default Notice and the Holder becoming aware of an Event of Default, the
Holder may require the Company to redeem (regardless of whether such Event of Default has been cured) all or any portion of
this Note by delivering written notice thereof (the “Event of Default Redemption Notice”) to the Company,
which Event of Default Redemption Notice shall indicate the portion of this Note the Holder is electing to redeem. Each
portion of this Note subject to redemption by the Company pursuant to this Section 4(b) shall be redeemed by the Company
at a price equal to the greater of (i) the product of (A) the Conversion Amount to be redeemed multiplied by (B) the
Redemption Premium and (ii) the product of (X) the Conversion Rate with respect to the Conversion Amount in effect at such
time as the Holder delivers an Event of Default Redemption Notice multiplied by (Y) the product of (1) the Redemption Premium
multiplied by (2) the greatest Closing Sale Price of the Common Stock on any Trading Day during the period commencing on the
date immediately preceding such Event of Default and ending on the date the Company makes the entire payment required to be
made under this Section 4(b) (the “Event of Default Redemption Price”). Redemptions required by this
Section 4(b) shall be made in accordance with the provisions of Section 10. To the extent redemptions required by
this Section 4(b) are deemed or determined by a court of competent jurisdiction to be prepayments of this Note by the
Company, such redemptions shall be deemed to be voluntary prepayments. Notwithstanding anything to the contrary in this
Section 4, but subject to Section 3(d), until the Event of Default Redemption Price (together with any Late Charges
thereon) is paid in full, the Conversion Amount submitted for redemption under this Section 4(b) (together with any Late
Charges thereon) may be converted, in whole or in part, by the Holder into Common Stock pursuant to the terms of this Note.
In the event of the Company’s redemption of any portion of this Note under this Section 4(b), the
Holder’s damages would be uncertain and difficult to estimate because of the parties’ inability to predict future
interest rates and the uncertainty of the availability of a suitable substitute investment opportunity for the Holder.
Accordingly, any redemption premium due under this Section 4(b) is intended by the parties to be, and shall be deemed, a
reasonable estimate of the Holder’s actual loss of its investment opportunity and not as a penalty.

 

    	10

    	 

    
 

 

5.RIGHTS
UPON FUNDAMENTAL TRANSACTION.

 

(a)Assumption.
The Company shall not enter into or be party to a Fundamental Transaction unless (i) the Successor Entity assumes in
writing all of the obligations of the Company under this Note and the other Transaction Documents in accordance with the
provisions of this Section 5(a), including agreements to deliver to each holder of Notes in exchange for such Notes a
security of the Successor Entity evidenced by a written instrument substantially similar in form and substance to the Notes,
including, without limitation, having a principal amount and interest rate equal to the principal amounts then outstanding
and the interest rates of the Notes held by such holder, having similar conversion rights as the Notes and having similar
ranking to the Notes, and satisfactory to the Holder and (ii) the Successor Entity (including its Parent Entity) is a
publicly traded corporation whose common stock is quoted on or listed for trading on an Eligible Market. Upon the occurrence
of any Fundamental Transaction, the Successor Entity shall succeed to, and be substituted for (so that from and after the
date of such Fundamental Transaction, the provisions of this Note and the other Transaction Documents referring to the
“Company” shall refer instead to the Successor Entity), and may exercise every right and power of the Company and
shall assume all of the obligations of the Company under this Note and the other Transaction Documents with the same effect
as if such Successor Entity had been named as the Company herein. Upon consummation of a Fundamental Transaction, the
Successor Entity shall deliver to the Holder confirmation that there shall be issued upon conversion or redemption of this
Note at any time after the consummation of such Fundamental Transaction, in lieu of the shares of the Company’s Common
Stock (or other securities, cash, assets or other property (except such items still issuable under Sections 6 and 14,
which shall continue to be receivable thereafter) issuable upon the conversion or redemption of the Notes prior to such
Fundamental Transaction, such shares of the publicly traded common stock (or their equivalent) of the Successor Entity
(including its Parent Entity) which the Holder would have been entitled to receive upon the happening of such Fundamental
Transaction had this Note been converted immediately prior to such Fundamental Transaction (without regard to any limitations
on the conversion of this Note), as adjusted in accordance with the provisions of this Note. Notwithstanding the foregoing,
the Holder may elect, at its sole option or the Required Holders may elect on behalf of the Holders of all the Notes by
delivery of written notice to the Company to waive this Section 5(a) to permit the Fundamental Transaction without the
assumption of this Note. The provisions of this Section 5 shall apply similarly and equally to successive Fundamental
Transactions and shall be applied without regard to any limitations on the conversion of this Note.

 

    	11

    	 

    
 

 

(b)Notice
of a Change of Control; Redemption Right. No sooner than twenty (20) Trading Days nor later than ten (10) Trading Days
prior to the consummation of a Change of Control (the “Change of Control Date”), but not prior to the
public announcement of such Change of Control, the Company shall deliver written notice thereof via facsimile and overnight
courier to the Holder (a “Change of Control Notice”). At any time during the period beginning after the
Holder’s receipt of a Change of Control Notice or the Holder becoming aware of a Change of Control if a Change of
Control Notice is not delivered to the Holder in accordance with the immediately preceding sentence (as applicable) and
ending on the later of twenty (20) Trading Days after (A) consummation of such Change of Control or (B) the date of receipt
of such Change of Control Notice, the Holder may require the Company to redeem all or any portion of this Note by delivering
written notice thereof (“Change of Control Redemption Notice”) to the Company, which Change of Control
Redemption Notice shall indicate the Conversion Amount the Holder is electing to redeem. The portion of this Note subject to
redemption pursuant to this Section 5 shall be redeemed by the Company in cash at a price equal to the greater of (i)
the product of (w) the Change of Control Redemption Premium multiplied by (y) the Conversion Amount being redeemed, (ii) the
product of (x) the Change of Control Redemption Premium multiplied by (y) the product of (A) the Conversion Amount being
redeemed multiplied by (B) the quotient determined by dividing (I) the greatest Closing Sale Price of the shares of Common
Stock during the period beginning on the date immediately preceding the earlier to occur of (1) the consummation of the
applicable Change of Control and (2) the public announcement of such Change of Control and ending on the date the Holder
delivers the Change of Control Redemption Notice by (II) the Conversion Price then
in effect at the time of delivery by the Holder of the Change of Control Redemption Notice and (iii) the product of (y) the
Change of Control Redemption Premium multiplied by (z) the product of (A) the Conversion Amount being redeemed multiplied by
(B) the quotient of (I) the aggregate cash consideration and the aggregate cash value of any non-cash consideration per share
of Common Stock to be paid to the holders of the shares of Common Stock upon consummation of such Change of Control (any such
non-cash consideration constituting publicly-traded securities shall be valued at the highest of the Closing Sale Price of
such securities as of the Trading Day immediately prior to the consummation of such Change of Control, the Closing Sale Price
of such securities on the Trading Day immediately following the public announcement of such proposed Change of Control and
the Closing Sale Price of such securities on the Trading Day immediately prior to the public announcement of such proposed
Change of Control) divided by (II) the Conversion Price then in effect (the “Change of Control Redemption
Price”). Redemptions required by this Section 5 shall be made in accordance with the provisions of
Section 10 and shall have priority to payments to stockholders in connection with such Change of Control. To the extent
redemptions required by this Section 5(b) are deemed or determined by a court of competent jurisdiction to be
prepayments of this Note by the Company, such redemptions shall be deemed to be voluntary prepayments. Notwithstanding
anything to the contrary in this Section 5, but subject to Section 3(d), until the Change of Control Redemption Price
(together with any Late Charges thereon) is paid in full, the Conversion Amount submitted for redemption under this
Section 5(b) (together with any Late Charges thereon) may be converted, in whole or in part, by the Holder into Common
Stock pursuant to Section 3. In the event of the Company’s redemption of any portion of this Note under this
Section 5(b), the Holder’s damages would be uncertain and difficult to estimate because of the parties’
inability to predict future interest rates and the uncertainty of the availability of a suitable substitute investment
opportunity for the Holder. Accordingly, any redemption premium due under this Section 5(b) is intended by the parties
to be, and shall be deemed, a reasonable estimate of the Holder’s actual loss of its investment opportunity and not as
a penalty.

 

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(c)Adjustment
to the Conversion Rate Upon a Change of Control.

 

(i)In
connection with a Change of Control, if the Holder converts its Note at any time beginning on the date of the Change of
Control Notice and ending at the close of business on the Trading Day immediately prior to the applicable Change of Control
Date, the Company will increase the Conversion Rate by a number of additional shares (the “Additional
Shares”) for such Note as described in Section 5(c)(ii) hereof; provided that (A) such increase in the
Conversion Rate shall not take place if such Change of Control is not consummated, (B) the Company shall issue shares of
Common Stock at the Conversion Rate (excluding such increase) on the earlier to occur of (x) the third (3rd)
Trading Day after the Conversion Date and (y) the time immediately prior to such Change of Control and (C) the Company shall
issue such Additional Shares at the time immediately prior to such Change of Control; provided, that if the issuance of any
Additional Shares would cause the Holder or any of its affiliates to beneficially own shares of Common Stock (or securities
of the Successor Entity or other issuer upon the consummation of the Change of Control) in excess of the Maximum Percentage
(a “Maximum Percentage Event”), the Holder shall have the right, exercisable by the delivery of one or
more written notices to the Company, to cause the Company to alternatively issue to the Holder such Additional Shares (or the
cash, securities and/or other consideration to be issued in exchange for such Additional Shares in such Change of Control, if
applicable), or such portion thereof as set forth in the applicable notice, on or prior to the third (3rd) Trading
Day after the Holder delivers the applicable notice to the Company (or the Public Successor Entity or other issuer, as
applicable) that the issuance of such Additional Shares (or the cash, securities and/or other consideration to be issued in
exchange for such Additional Shares in such Change of Control, if applicable), or such portion thereof as set forth in the
applicable Notice, would not result in a Maximum Percentage Event.

 

(ii)The
number of Additional Shares will be determined by the quotient of (x) the Additional Share Amount and (y) the lowest of (A) the
Conversion Price as in effect on the Trading Day immediately prior to the applicable Conversion Date, (B) 80% of the lowest Closing
Bid Price of the Common Stock during the period beginning on and including the earlier to occur of (I) any oral or written agreement
by the Company or any of its Subsidiaries, which upon consummation of the transaction contemplated thereby would reasonably be
expected to result in a Change of Control and (II) the Holder’s receipt of a Change of Control Notice and ending on and including
the Trading Day immediately prior to the applicable Conversion Date and (C) 80% of the VWAP for the five (5) Trading Day period
immediately preceding the applicable Conversion Date.

 

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6.RIGHTS
UPON ISSUANCE OF PURCHASE RIGHTS AND OTHER CORPORATE EVENTS.

 

(a)Purchase
Rights. In addition to any adjustments pursuant to Section 7 below, if at any time the Company grants, issues or
sells any Options, Convertible Securities or rights to purchase stock, warrants, securities or other property pro rata to the
record holders of any class of Common Stock (the “Purchase Rights”), then the Holder will be entitled to
acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could have
acquired if the Holder had held the number of shares of Common Stock acquirable upon complete conversion of this Note
(without taking into account any limitations or restrictions on the convertibility of this Note) immediately before the date
on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date
as of which the record holders of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights
(provided, however, to the extent that the Holder’s right to participate in any such Purchase Right would result in the
Holder exceeding the Maximum Percentage, then the Holder shall not be entitled to participate in such Purchase Right to such
extent (or beneficial ownership of such shares of Common Stock as a result of such Purchase Right to such extent) and such
Purchase Right to such extent shall be held in abeyance for the Holder until such time, if ever, as its right thereto would
not result in the Holder exceeding the Maximum Percentage).

 

(b)Other
Corporate Events. In addition to and not in substitution for any other rights hereunder, prior to the consummation of
any Fundamental Transaction pursuant to which holders of shares of Common Stock are entitled to receive securities or other
assets with respect to or in exchange for shares of Common Stock (a “Corporate Event”), the Company shall
make appropriate provision to insure that the Holder will thereafter have the right to receive upon a conversion of this Note
(i) in addition to the shares of Common Stock receivable upon such conversion, such securities or other assets to which the
Holder would have been entitled with respect to such shares of Common Stock had such shares of Common Stock been held by the
Holder upon the consummation of such Corporate Event (without taking into account any limitations or restrictions on the
convertibility of this Note) or (ii) in lieu of the shares of Common Stock otherwise receivable upon such conversion, such
securities or other assets received by the holders of shares of Common Stock in connection with the consummation of such
Corporate Event in such amounts as the Holder would have been entitled to receive had this Note initially been issued with
conversion rights for the form of such consideration (as opposed to shares of Common Stock) at a conversion rate for such
consideration commensurate with the Conversion Rate. Provision made pursuant to the preceding sentence shall be in a form and
substance satisfactory to the Required Holders. The provisions of this Section 6 shall apply similarly and equally to
successive Corporate Events and shall be applied without regard to any limitations on the conversion or redemption of this
Note.

 

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7.RIGHTS
UPON ISSUANCE OF OTHER SECURITIES.

 

(a)Adjustment
of Conversion Price upon Issuance of Common Stock. If and whenever on or after the Subscription Date the Company issues or
sells, or in accordance with this Section 7(a)

is deemed to have issued or sold, any shares of Common Stock (including
the issuance or sale of shares of Common Stock owned or held by or for the account of the Company,
but excluding any Excluded Securities issued or sold or deemed to have been issued or sold) for a consideration per share (the
“New Issuance Price”) less than a price equal to the Conversion Price in effect immediately prior to such issue
or sale or deemed issuance or sale (such Conversion Price then in effect is referred to herein as the “Applicable Price”)
(the foregoing a “Dilutive Issuance”), then, immediately after such Dilutive Issuance, the Conversion Price
then in effect shall be reduced to an amount equal to the New Issuance Price. For all purposes of the foregoing (including, without
limitation, determining the adjusted Conversion Price and consideration per share under this Section 7(a)

), the following shall be applicable:

 

(i)Issuance
of Options. If the Company in any manner grants or sells any Options and the lowest price per share for which one share of
Common Stock is issuable upon the exercise of any such Option or upon conversion, exercise or exchange of any Convertible Securities
issuable upon exercise of any such Option is less than the Applicable Price, then such share of Common Stock shall be deemed to
be outstanding and to have been issued and sold by the Company at the time of the granting or sale of such Option for such price
per share. For purposes of this Section 7(a)(i), the “lowest price per share for which one share of Common Stock is
issuable upon the exercise of any such Option or upon conversion, exercise or exchange of any Convertible Securities issuable
upon exercise of any such Option” shall be equal to (1) the lower of (x) the sum of the lowest amounts of consideration
(if any) received or receivable by the Company with respect to any one share of Common Stock upon the granting or sale of such
Option, upon exercise of such Option and upon conversion, exercise or exchange of any Convertible Security issuable upon exercise
of such Option and (y) the lowest exercise price set forth in such Option for which one share of Common Stock is issuable upon
the exercise of any such Options or upon conversion, exercise or exchange of any Convertible Securities issuable upon exercise
of any such Option minus (2) the sum of all amounts paid or payable to the holder of such Option (or any other Person) upon the
granting or sale of such Option, upon exercise of such Option and upon conversion, exercise or exchange of any Convertible Security
issuable upon exercise of such Option plus the value of any other consideration received or receivable by, or benefit conferred
on, the holder of such Option (or any other Person). Except as contemplated below, no further adjustment of the Conversion Price
shall be made upon the actual issuance of such share of Common Stock or of such Convertible Securities upon the exercise of such
Options or upon the actual issuance of such share of Common Stock upon conversion, exercise or exchange of such Convertible Securities.

 

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(ii)Issuance
of Convertible Securities. If the Company in any manner issues or sells any Convertible Securities and the lowest price per
share for which one share of Common Stock is issuable upon the conversion, exercise or exchange thereof is less than the Applicable
Price, then such share of Common Stock shall be deemed to be outstanding and to have been issued and sold by the Company at the
time of the issuance or sale of such Convertible Securities for such price per share. For the purposes of this Section 7(a)(ii),
the “lowest price per share for which one share of Common Stock is issuable upon the conversion, exercise or exchange thereof”
shall be equal to (1) the lower of (x) the sum of the lowest amounts of consideration (if any) received or receivable by the Company
with respect to one share of Common Stock upon the issuance or sale of the Convertible Security and upon conversion, exercise
or exchange of such Convertible Security and (y) the lowest conversion price set forth in such Convertible Security for which
one share of Common Stock is issuable upon conversion, exercise or exchange thereof minus (2) the sum of all amounts paid or payable
to the holder of such Convertible Security (or any other Person) upon the issuance or sale of such Convertible Security plus the
value of any other consideration received or receivable by, or benefit conferred on, the holder of such Convertible Security (or
any other Person). Except as contemplated below, no further adjustment of the Conversion Price shall be made upon the actual issuance
of such share of Common Stock upon conversion, exercise or exchange of such Convertible Securities, and if any such issue or sale
of such Convertible Securities is made upon exercise of any Options for which adjustment of the Conversion Price has been or is
to be made pursuant to other provisions of this Section 7(a), except as contemplated below, no further adjustment of the
Conversion Price shall be made by reason of such issue or sale.

 

(iii)Change
in Option Price or Rate of Conversion. If the purchase or exercise price provided for in any Options, the additional
consideration, if any, payable upon the issue, conversion, exercise or exchange of any Convertible Securities, or the rate at
which any Convertible Securities are convertible into or exercisable or exchangeable for shares of Common Stock increases or
decreases at any time, the Conversion Price in effect at the time of such increase or decrease shall be adjusted to the
Conversion Price which would have been in effect at such time had such Options or Convertible Securities provided for such
increased or decreased purchase price, additional consideration or increased or decreased conversion rate (as the case may
be) at the time initially granted, issued or sold. For purposes of this Section 7(a)(iii), if the terms of any Option or
Convertible Security that was outstanding as of the Subscription Date are increased or decreased in the manner described in
the immediately preceding sentence, then such Option or Convertible Security and the shares of Common Stock deemed issuable
upon exercise, conversion or exchange thereof shall be deemed to have been issued as of the date of such increase or
decrease. No adjustment pursuant to this Section 7(a) shall be made if such adjustment would result in an increase of
the Conversion Price then in effect.

 

    	16

    	 

    
 

 

(iv)Calculation
of Consideration Received. If any Option or Convertible Security or Adjustment Right is issued or deemed issued in connection
with the issuance or sale or deemed issuance or sale of any other securities of the Company, together comprising one integrated
transaction, (x) such Option or Convertible Security (as applicable) or Adjustment Right (as applicable) will be deemed to have
been issued for consideration equal to the Black Scholes Consideration Value thereof and (y) the other securities issued or sold
or deemed to have been issued or sold in such integrated transaction shall be deemed to have been issued for consideration equal
to the difference of (I) the aggregate consideration received or receivable by the Company minus (II) the Black Scholes Consideration
Value of each such Option or Convertible Security (as applicable) or Adjustment Right (as applicable). If any shares of Common
Stock, Options or Convertible Securities are issued or sold or deemed to have been issued or sold for cash, the consideration received
therefor will be deemed to be the net amount of consideration received by the Company therefor. If any shares of Common Stock,
Options or Convertible Securities are issued or sold for a consideration other than cash, the amount of such consideration received
by the Company will be the fair value of such consideration, except where such consideration consists of publicly traded securities,
in which case the amount of consideration received by the Company for such securities will be the average VWAP of such security
for the five (5) Trading Day period immediately preceding the date of receipt. If any shares of Common Stock, Options or Convertible
Securities are issued to the owners of the non-surviving entity in connection with any merger in which the Company is the surviving
entity, the amount of consideration therefor will be deemed to be the fair value of such portion of the net assets and business
of the non-surviving entity as is attributable to such shares of Common Stock, Options or Convertible Securities (as the case may
be). The fair value of any consideration other than cash or publicly traded securities will be determined jointly by the Company
and the Holder. If such parties are unable to reach agreement within ten (10) days after the occurrence of an event requiring valuation
(the “Valuation Event”), the fair value of such consideration will be determined within five (5) Trading Days
after the tenth (10th) day following such Valuation Event by an independent, reputable appraiser jointly selected by
the Company and the Holder. The determination of such appraiser shall be final and binding upon all parties absent manifest error
and the fees and expenses of such appraiser shall be borne by the Company.

 

(v)Record
Date. If the Company takes a record of the holders of shares of Common Stock for the purpose of entitling them (A) to receive
a dividend or other distribution payable in shares of Common Stock, Options or in Convertible Securities or (B) to subscribe for
or purchase shares of Common Stock, Options or Convertible Securities, then such record date will be deemed to be the date of the
issue or sale of the shares of Common Stock deemed to have been issued or sold upon the declaration of such dividend or the making
of such other distribution or the date of the granting of such right of subscription or purchase (as the case may be).

 

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(b)Adjustment
of Conversion Price upon Subdivision or Combination of Common Stock. Without limiting any provision of Section 5 or
Section 7(a), if the Company at any time on or after the Subscription Date subdivides (by any stock split, stock
dividend, stock combination, recapitalization or other similar transaction) one or more classes of its outstanding shares of
Common Stock into a greater number of shares, the Conversion Price in effect immediately prior to such subdivision will be
proportionately reduced. Without limiting any provision of Section 5 or Section 7(a), if the Company at any time on
or after the Subscription Date combines (by any stock split, stock dividend, stock combination, recapitalization or other
similar transaction) one or more classes of its outstanding shares of Common Stock into a smaller number of shares, the
Conversion Price in effect immediately prior to such combination will be proportionately increased. Any adjustment pursuant
to this Section 7(b) shall become effective immediately after the effective date of such subdivision or combination. If
any event requiring an adjustment under this Section 7(b) occurs during the period that a Conversion Price is calculated
hereunder, then the calculation of such Conversion Price shall be adjusted appropriately to reflect such event.

 

(c)Holder’s
Right of Alternative Conversion Price.  Subject to Section 4(n) of the Securities Purchase Agreement, in addition
to and not in limitation of the other provisions of this Section 7, if the Company in any manner issues or sells or enters
into any agreement to issue or sell, any Common Stock, Options or Convertible Securities (any such securities, “Variable
Price Securities”) after the Subscription Date that are issuable pursuant to such agreement or convertible into or exchangeable
or exercisable for shares of Common Stock pursuant to such Options or Convertible Securities, as applicable, at a price which
varies or may vary with the market price of the shares of Common Stock, including by way of one or more reset(s) to a fixed price,
but exclusive of such formulations reflecting customary anti-dilution provisions (such as share splits, share combinations, share
dividends and similar transactions) (each of the formulations for such variable price being herein referred to as, the “Variable
Price”), the Company shall provide written notice thereof via facsimile and overnight courier to the Holder on the date
of such agreement and/or the issuance of such Convertible Securities or Options, as applicable. Subject to Section 4(n) of
the Securities Purchase Agreement, from and after the date the Company enters into such agreement or issues any such Variable
Price Securities, the Holder shall have the right, but not the obligation, in its sole discretion to substitute the Variable Price
for the Conversion Price upon conversion of this Note by designating in the Conversion Notice delivered upon any conversion of
this Note that solely for purposes of such conversion the Holder is relying on the Variable Price rather than the Conversion Price
then in effect. The Holder’s election to rely on a Variable Price for a particular conversion of this Note shall not obligate
the Holder to rely on a Variable Price for any future conversion of this Note.

 

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(d)Other
Events. In the event that the Company (or any Subsidiary) shall take any action to which the provisions hereof are not strictly
applicable, or, if applicable, would not operate to protect the Holder from dilution or if any event occurs of the type contemplated
by the provisions of this Section 7 but not expressly provided for by such provisions (including, without limitation, the
granting of stock appreciation rights, phantom stock rights or other rights with equity features), then the Company’s board
of directors shall in good faith determine and implement an appropriate adjustment in the Conversion Price so as to protect the
rights of the Holder, provided that no such adjustment pursuant to this Section 7(d) will increase the Conversion Price as
otherwise determined pursuant to this Section 7, provided further that if the Holder does not accept such adjustments as
appropriately protecting its interests hereunder against such dilution, then the Company’s board of directors and the Holder
shall agree, in good faith, upon an independent investment bank of nationally recognized standing to make such appropriate adjustments,
whose determination shall be final and binding and whose fees and expenses shall be borne by the Company.

 

(e)Calculations.
All calculations under this Section 7 shall be made by rounding to the nearest cent or the nearest 1/100th of
a share, as applicable. The number of shares of Common Stock outstanding at any given time shall not include shares owned or
held by or for the account of the Company, and the disposition of any such shares shall be considered an issue or sale of
Common Stock.

 

(f)Adjusted
Conversion Price. If immediately following the close of business on the ten (10) consecutive Trading Days immediately following
(i) such date the applicable Registration Statement filed pursuant to the Registration Rights Agreement
shall be effective and the prospectus contained therein shall be available for the resale by the Holder of all of the Registrable
Securities (which, solely for clarification purposes, includes all shares of Common Stock issuable upon conversion of the
Notes or otherwise pursuant to the terms of the Notes and upon exercise of the Warrants (without regard for any limitations on
conversion, issuance or exercise set forth therein) in accordance with the terms of the Registration
Rights Agreement) or, (ii) if earlier, each of (x) [ ]3 or such later date thereafter when the Company shall
have satisfied its current public information requirement under Rule 144(c)(1) and (y) the initial Effective Date (as defined
in the Registration Rights Agreement) (each, as applicable, an “Adjustment Date”), the Conversion Price then
in effect exceeds the Adjusted Market Price as of such Adjustment Date (the “Adjusted Conversion Price”), the
Conversion Price hereunder shall be reset to the Adjusted Conversion Price as of such Adjustment Date (each, a “Conversion
Price Adjustment”). Notwithstanding the foregoing, to the extent the Holder delivers one or more Conversion Notices
to the Company during the Adjusted Market Price Measuring Period with respect to a Conversion Price Adjustment, in addition to
the shares of Common Stock issued or issuable to the Holder with respect to each such Conversion Notice, on the later of (A) the
applicable Share Delivery Date with respect to such Conversion Notice and (B) the applicable Adjustment Date, the Holder shall
receive an additional number of shares of Common Stock equal to the difference of (x) the quotient of (I) the Conversion Amount
with respect to such Conversion Notice, divided by (II) the Adjusted Conversion Price, less (y) the number of shares of Common
Stock issued or otherwise issuable to the Holder with respect to such Conversion Notice. Except as otherwise provided in this
Section 7(f), the Adjusted Conversion Price, if any, shall not apply to any Conversion Amount converted into Common Stock
prior to such Adjustment Date.

 

 

 

3Insert
six month anniversary of the Issuance Date

 

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8.NONCIRCUMVENTION.
The Company hereby covenants and agrees that the Company will not, by amendment of its Certificate of Incorporation (as defined
in the Securities Purchase Agreement), Bylaws (as defined in the Securities Purchase Agreement) or through any reorganization,
transfer of assets, consolidation, merger, scheme of arrangement, dissolution, issue or sale of securities, or any other voluntary
action, avoid or seek to avoid the observance or performance of any of the terms of this Note, and will at all times in good faith
carry out all of the provisions of this Note and take all action as may be required to protect the rights of the Holder of this
Note. Without limiting the generality of the foregoing, the Company (i) shall not increase the par value of any shares of
Common Stock receivable upon conversion of this Note above the Conversion Price then in effect, (ii) shall take all such actions
as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable shares
of Common Stock upon the conversion of this Note, and (iii) shall, so long as any of the Notes are outstanding, take all action
necessary to reserve and keep available out of its authorized and unissued shares of Common Stock, solely for the purpose of effecting
the conversion of the Notes, the maximum number of shares of Common Stock as shall from time to time be necessary to effect the
conversion of the Notes then outstanding (without regard to any limitations on conversion).

 

9.RESERVATION
OF AUTHORIZED SHARES.

 

(a)Reservation.
The Company shall initially reserve out of its authorized and unissued Common Stock a number of shares of Common Stock for each
of the Notes equal to 130% of the entire Conversion Rate with respect to the entire Conversion Amount of each such Note as of the
Issuance Date. So long as any of the Notes are outstanding, the Company shall take all action necessary to reserve and keep
available out of its authorized and unissued Common Stock, solely for the purpose of effecting the conversion of the Notes, 130%
of the number of shares of Common Stock as shall from time to time be necessary to effect the conversion of all of the Notes then
outstanding, provided that at no time shall the number of shares of Common Stock so reserved be less than the number of shares
required to be reserved by the previous sentence (without regard to any limitations on conversions) (the “Required Reserve
Amount”). The initial number of shares of Common Stock reserved for conversions of the Notes and each increase in the
number of shares so reserved shall be allocated pro rata among the holders of the Notes based on the original principal amount
of the Notes held by each holder on the Closing Date or increase in the number of reserved shares (as the case may be) (the “Authorized
Share Allocation”). In the event that a holder shall sell or otherwise transfer any of such holder’s Notes, each
transferee shall be allocated a pro rata portion of such holder’s Authorized Share Allocation. Any shares of Common Stock
reserved and allocated to any Person which ceases to hold any Notes shall be allocated to the remaining holders of Notes, pro rata
based on the principal amount of the Notes then held by such holders.

 

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(b)Insufficient
Authorized Shares. If, notwithstanding Section 9(a), and not in limitation thereof, at any time while any of the
Notes remain outstanding the Company does not have a sufficient number of authorized and unreserved shares of Common Stock to
satisfy its obligation to reserve for issuance upon conversion of the Notes at least a number of shares of Common Stock equal
to the Required Reserve Amount (an “Authorized Share Failure”), then the Company shall immediately take
all action necessary to increase the Company’s authorized shares of Common Stock to an amount sufficient to allow the
Company to reserve the Required Reserve Amount for the Notes then outstanding. Without limiting the generality of the
foregoing sentence, as soon as practicable after the date of the occurrence of an Authorized Share Failure, but in no event
later than sixty (60) days after the occurrence of such Authorized Share Failure, the Company shall hold a meeting of its
stockholders for the approval of an increase in the number of authorized shares of Common Stock. In connection with such
meeting, the Company shall provide each stockholder with a proxy statement and shall use its best efforts to solicit its
stockholders’ approval of such increase in authorized shares of Common Stock and to cause its board of directors to
recommend to the stockholders that they approve such proposal. In the event that the Company is prohibited from issuing
shares of Common Stock upon any conversion due to the failure by the Company to have sufficient shares of Common Stock
available out of the authorized but unissued shares of Common Stock (such unavailable number of shares of Common Stock, the
“Authorization Failure Shares”), in lieu of delivering such Authorization Failure Shares to the Holder,
the Company shall pay cash in exchange for the redemption of such portion of the Conversion Amount convertible into such
Authorized Failure Shares at a price equal to the sum of (i) the product of (x) such number of Authorization Failure Shares
and (y) the greatest Closing Sale Price of the Common Stock on any Trading Day during the period commencing on the date the
Holder delivers the applicable Conversion Notice with respect to such Authorization Failure Shares to the Company and ending
on the date of such issuance and payment under this Section 9(b) and (ii) to the extent the Holder purchases (in an open
market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale by the Holder of
Authorization Failure Shares, any brokerage commissions and other out-of-pocket expenses, if any, of the Holder incurred in
connection therewith. Nothing contained in Section 9(a) or this Section 9(b) shall limit any obligations of the Company
under any provision of the Securities Purchase Agreement.

 

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10.HOLDER’S
REDEMPTIONS.

 

(a)Mechanics.
The Company shall deliver the applicable Event of Default Redemption Price to the Holder in cash within two (2) Business Days
after the Company’s receipt of the Holder’s Event of Default Redemption Notice. If the Holder has submitted a Change
of Control Redemption Notice in accordance with Section 5(b), the Company shall deliver the applicable Change of Control
Redemption Price to the Holder in cash concurrently with the consummation of such Change of Control if such notice is received
prior to the consummation of such Change of Control and within two (2) Business Days after the Company’s receipt of such
notice otherwise. The Company shall deliver the applicable Company Optional Redemption Price to the Holder in cash on the applicable
Company Optional Redemption Date. In the event of a redemption of less than all of the Conversion Amount of this Note, the Company
shall promptly cause to be issued and delivered to the Holder a new Note (in accordance with Section 17(d)) representing
the outstanding Principal which has not been redeemed. In the event that the Company does not pay the applicable Redemption Price
to the Holder within the time period required, at any time thereafter and until the Company pays such unpaid Redemption Price
in full, the Holder shall have the option, in lieu of redemption, to require the Company to promptly return to the Holder all
or any portion of this Note representing the Conversion Amount that was submitted for redemption and for which the applicable
Redemption Price (together with any Late Charges thereon) has not been paid. Upon the Company’s receipt of such notice,
(x) the applicable Redemption Notice shall be null and void with respect to such Conversion Amount, (y) the Company shall immediately
return this Note, or issue a new Note (in accordance with Section 17(d)), to the Holder, and in each case the principal
amount of this Note or such new Note (as the case may be) shall be increased by an amount equal to the difference between (1)
the applicable Redemption Price minus (2) the Principal portion of the Conversion Amount submitted for redemption and (z) the
Conversion Price of this Note or such new Notes (as the case may be) shall be automatically adjusted with respect to each conversion
effected thereafter by the Holder to the lowest of (A) the Conversion Price as in effect on the date on which the applicable Redemption
Notice is voided and (B) 75% of the lowest Closing Bid Price of the Common Stock during the period beginning on and including
the date on which the applicable Redemption Notice is delivered to the Company and ending on and including the date on which the
applicable Redemption Notice is voided. The Holder’s delivery of a notice voiding a Redemption Notice and exercise of its
rights following such notice shall not affect the Company’s obligations to make any payments of Late Charges which have
accrued prior to the date of such notice with respect to the Conversion Amount subject to such notice.

 

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(b)Redemption
by Other Holders. Upon the Company’s receipt of notice from any of the holders of the Other Notes for redemption
or repayment as a result of an event or occurrence substantially similar to the events or occurrences described in
Section 4(b) or Section 5(b) (each, an “Other Redemption Notice”), the Company shall
immediately, but no later than one (1) Business Day of its receipt thereof, forward to the Holder by facsimile a copy of such
notice. If the Company receives a Redemption Notice and one or more Other Redemption Notices, during the seven (7) Business
Day period beginning on and including the date which is three (3) Business Days prior to the Company’s receipt of the
Holder’s applicable Redemption Notice and ending on and including the date which is three (3) Business Days after the
Company’s receipt of the Holder’s applicable Redemption Notice and the Company is unable to redeem all principal,
interest and other amounts designated in such Redemption Notice and such Other Redemption Notices received during such seven
(7) Business Day period, then the Company shall redeem a pro rata amount from each holder of the Notes (including the Holder)
based on the principal amount of the Notes submitted for redemption pursuant to such Redemption Notice and such Other
Redemption Notices received by the Company during such seven (7) Business Day period.

 

11.VOTING
RIGHTS. The Holder shall have no voting rights as the holder of this Note,
except as required by law (including, without limitation, Title 7 of the Nevada Revised Statutes) and as expressly provided
in this Note.

 

12.COVENANTS.
Until all of the Notes have been converted, redeemed or otherwise satisfied in accordance with their terms:

 

(a)Rank.
All payments due under this Note (i) shall rank pari passu with all Other Series A Notes, (ii) shall rank senior to all
Series B Notes in accordance with the terms of the Subordination Agreement (as defined in the Securities Purchase Agreement) and
(iii) except for Permitted Indebtedness secured by Permitted Liens, shall be senior to all other Indebtedness of the Company and
its Subsidiaries.

 

(b)Incurrence
of Indebtedness. The Company shall not, and the Company shall cause each of its Subsidiaries to not, directly or indirectly,
incur or guarantee, assume or suffer to exist any Indebtedness (other than (i) the Indebtedness evidenced by this Note and the
Other Notes and (ii) Permitted Indebtedness).

 

(c)Existence
of Liens. The Company shall not, and the Company shall cause each of its Subsidiaries to not, directly or indirectly, allow
or suffer to exist any mortgage, lien, pledge, charge, security interest or other encumbrance upon or in any property or assets
(including accounts and contract rights) owned by the Company or any of its Subsidiaries (collectively, “Liens”)
other than Permitted Liens.

 

(d)Restricted
Payments. The Company shall not, and the Company shall cause each of its Subsidiaries to not, directly or indirectly, redeem,
defease, repurchase, repay or make any payments in respect of, by the payment of cash or cash equivalents (in whole or in part,
whether by way of open market purchases, tender offers, private transactions or otherwise), all or any portion of any Indebtedness
(other than the Notes), whether by way of payment in respect of principal of (or premium, if any) or interest on, such Indebtedness
if at the time such payment is due or is otherwise made or, after giving effect to such payment, (i) an event constituting an Event
of Default has occurred and is continuing or (ii) an event that with the passage of time and without being cured would constitute
an Event of Default has occurred and is continuing.

 

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(e)Restriction
on Redemption and Cash Dividends. The Company shall not, and the Company shall cause each of its Subsidiaries to not, directly
or indirectly, redeem, repurchase or declare or pay any cash dividend or distribution on any of its capital stock.

 

(f)Restriction
on Transfer of Assets. The Company shall not, and the Company shall cause each of its Subsidiaries to not, directly or indirectly,
sell, lease, license, assign, transfer, spin-off, split-off, close, convey or otherwise dispose of any assets or rights of the
Company or any Subsidiary owned or hereafter acquired whether in a single transaction or a series of related transactions, other
than (i) sales, leases, licenses, assignments, transfers, conveyances and other dispositions of such assets or rights by the Company
and its Subsidiaries in the ordinary course of business and (ii) sales of inventory in the ordinary course of business.

 

(g)Maturity
of Indebtedness. The Company shall not, and the Company shall cause each of its Subsidiaries to not, directly or indirectly,
permit any Indebtedness of the Company or any of the Subsidiaries to mature or accelerate prior to the Maturity Date.

 

(h)Change
in Nature of Business. The Company shall not, and the Company shall cause each of its Subsidiaries to not, directly or indirectly,
engage in any material line of business substantially different from those lines of business conducted by the Company and each
of its Subsidiaries on the Issuance Date or any business substantially related or incidental thereto. The Company shall not, and
the Company shall cause each of its Subsidiaries to not, directly or indirectly, modify its or their corporate structure or purpose.

 

(i)Preservation
of Existence, Etc. The Company shall maintain and preserve, and cause each of its Subsidiaries to maintain and preserve, its
existence, rights and privileges, and become or remain, and cause each of its Subsidiaries to become or remain, duly qualified
and in good standing in each jurisdiction in which the character of the properties owned or leased by it or in which the transaction
of its business makes such qualification necessary. Notwithstanding the foregoing, the Company may dissolve or merge any Subsidiary
which is no longer active or which it deems in its sole and absolute discretion no longer to be materially necessary to its business.

 

(j)Maintenance
of Properties, Etc. The Company shall maintain and preserve, and cause each of its Subsidiaries to maintain and preserve, all
of its properties which are necessary or useful in the proper conduct of its business in good working order and condition, ordinary
wear and tear excepted, and comply, and cause each of its Subsidiaries to comply, at all times with the provisions of all leases
to which it is a party as lessee or under which it occupies property, so as to prevent any loss or forfeiture thereof or thereunder.

 

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(k)Maintenance
of Insurance. The Company shall maintain, and cause each of its Subsidiaries to maintain, insurance with responsible and reputable
insurance companies or associations (including, without limitation, comprehensive general liability, hazard, rent and business
interruption insurance) with respect to its properties (including all real properties leased or owned by it) and business, in such
amounts and covering such risks as is required by any governmental authority having jurisdiction with respect thereto or as is
carried generally in accordance with sound business practice by companies in similar businesses similarly situated.

 

13.MANDATORY
CONVERSION. If at any time after tenth (10th) calendar day after the end
of the initial Adjusted Market Price Measuring Period hereunder, (i) the Closing Sale Price of the Common Stock listed on the
Principal Market exceeds the Conversion Price by 250% for twenty (20) consecutive Trading Days (the
“Company Optional Redemption Measuring Period”), and (ii) no Equity Conditions Failure then exists, the Company
shall have the right to require the Holder to convert all, or any part, of the Conversion Amount of
this Note, as designated in the Mandatory Conversion Notice (as defined below) into fully paid, validly issued and nonassessable
shares of Common Stock in accordance with Section 3(c) hereof at the Conversion Rate as of the Mandatory Conversion
Date (as defined below) (a “Mandatory Conversion”). The Company may exercise its right to require conversion
under this Section 13 by delivering within not more than twenty
(20) Trading Days following the end of such Mandatory Conversion Measuring Period a written notice thereof by facsimile and
overnight courier to all, but not less than all, of the holders of Notes and the Transfer Agent (the “Mandatory Conversion
Notice” and the date all of the holders received such notice by facsimile is referred to as the “Mandatory
Conversion Notice Date”). The Mandatory Conversion Notice shall be irrevocable. The Mandatory Conversion Notice shall
state (i) the Trading Day selected for the Mandatory Conversion in accordance with this Section 13,
which Trading Day shall be no less than twenty (20) calendar days and no more than thirty (30) calendar days following the Mandatory
Conversion Notice Date (the “Mandatory Conversion Date”), (ii) the aggregate Conversion Amount, of the Notes
subject to mandatory conversion from the Holder and all of the holders of the Notes pursuant to this Section 13
(and analogous provisions under the Other Notes), (iii) the number of shares of Common Stock to be issued to such Holder
on the Mandatory Conversion Date and (iv) that there has been no Equity Conditions Failure; provided, however, that the Company
may not effect a Mandatory Conversion under this Section in excess of the Holder Pro Rata Amount of the applicable Mandatory Conversion
Volume Limitation. Notwithstanding the foregoing, the Company may effect only one (1) Mandatory Conversion during any twenty (20)
consecutive Trading Days. Any shares of Common Stock delivered in connection
with a Mandatory Conversion hereunder shall be accompanied by a payment in cash (the “Mandatory Conversion Interest”)
equal to the amount of any accrued and unpaid Interest with respect to such Conversion Amount subject to such Mandatory Conversion
and accrued and unpaid Late Charges, if any, with respect to such Conversion Amount and Interest. Notwithstanding anything
herein to the contrary, (i) if the Closing Sale Price of the Common Stock listed on the Principal Market fails to exceed the Conversion
Price by 200% for each Trading Day commencing on the Mandatory Conversion Notice Date and ending and including the Trading Day
immediately prior to the applicable Mandatory Conversion Date (a “Mandatory Conversion Price Failure”) or an
Equity Conditions Failure occurs at any time prior to the Mandatory Conversion Date, (A) the Company shall provide the Holder
a subsequent notice to that effect and (B) unless the Holder waives the applicable Equity Conditions Failure and/or Mandatory
Conversion Price Failure, as applicable, the Mandatory Conversion shall be cancelled and the applicable Mandatory Conversion Notice
shall be null and void and (ii) at any time prior to the date the Mandatory Conversion Price is paid, in full, the Mandatory Conversion
Amount may be converted, in whole or in part, by the Holders into shares of Common Stock pursuant to Section 3. All Conversion
Amounts converted by the Holder after the Mandatory Conversion Notice Date shall reduce the Mandatory Conversion Amount of this
Note required to be redeemed on the Mandatory Conversion Date. Redemptions made pursuant to this Section 13
shall be made in accordance with Section 10. Notwithstanding anything
in this Section 13 to the contrary, the Holder may, at its sole option, at
any time on prior to the third Trading Day prior to the Mandatory Conversion Date, by written notice to the Company, elect to
receive the Mandatory Conversion Interest in the form of Interest Shares, which Interest Shares shall be delivered by the Company
to the Holder in the manner provided in Section 2 as if the Mandatory Conversion
Date was an “Interest Date” for all purposes hereunder; provided, that nothing in this Section 13
shall be deemed to amend or waive the Company’s obligation to pay Interest hereunder on each Interest Date pursuant
to Section 2 and the Mandatory Conversion Price and Mandatory Conversion
Interest, as applicable, shall be adjusted for any Interest paid to the Holder prior to the Mandatory Conversion Date in accordance
with Section 2.

 

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14.PARTICIPATION.
In addition to any adjustments pursuant to Section 7

, the Holder, as the holder of this Note, shall be entitled to receive such dividends paid and distributions
made to the holders of Common Stock to the same extent as if the Holder had converted this Note into Common Stock (without regard
to any limitations on conversion herein or elsewhere) and had held such shares of Common Stock on the record date for such dividends
and distributions. Payments under the preceding sentence shall be made concurrently with the dividend or distribution to the holders
of Common Stock (provided, however, to the extent that the Holder’s right to participate in any such dividend or distribution
would result in the Holder exceeding the Maximum Percentage, then the Holder shall not be entitled to participate in such dividend
or distribution to such extent (or the beneficial ownership of any such shares of Common Stock as a result of such dividend or
distribution to such extent) and such dividend or distribution to such extent shall be held in abeyance for the benefit of the
Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Maximum Percentage).

 

15.AMENDING
THE TERMS OF THIS NOTE. The prior written consent of the Required Holders shall be
required for any change or amendment to this Note. No consideration shall be offered or paid to the Holder to amend or consent
to a waiver or modification of any provision of this Note unless the same consideration is also offered to all of the holders of
the Other Notes. The Holder shall be entitled, at its option, to the benefit of any amendment to any of the Other Notes.

 

16.TRANSFER.
This Note and any shares of Common Stock issued upon conversion of this Note may be offered, sold, assigned or transferred by the
Holder without the consent of the Company, subject only to the provisions of Section 2(g) of the Securities Purchase Agreement.

 

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17.REISSUANCE
OF THIS NOTE.

 

(a)Transfer.
If this Note is to be transferred, the Holder shall surrender this Note to the Company, whereupon the Company will forthwith
issue and deliver upon the order of the Holder a new Note (in accordance with Section 17(d)), registered as the Holder
may request, representing the outstanding Principal being transferred by the Holder and, if less than the entire outstanding
Principal is being transferred, a new Note (in accordance with Section 17(d)) to the Holder representing the outstanding
Principal not being transferred. The Holder and any assignee, by acceptance of this Note, acknowledge and agree that, by
reason of the provisions of Section 3(c)(iii) following conversion or redemption of any portion of this Note, the
outstanding Principal represented by this Note may be less than the Principal stated on the face of this Note.

 

(b)Lost,
Stolen or Mutilated Note. Upon receipt by the Company of evidence reasonably satisfactory to the Company of the loss,
theft, destruction or mutilation of this Note (as to which a written certification and the indemnification contemplated below
shall suffice as such evidence), and, in the case of loss, theft or destruction, of any indemnification undertaking by the
Holder to the Company in customary and reasonable form and, in the case of mutilation, upon surrender and cancellation of
this Note, the Company shall execute and deliver to the Holder a new Note (in accordance with Section 17(d))
representing the outstanding Principal.

 

(c)Note
Exchangeable for Different Denominations. This Note is exchangeable, upon the surrender hereof by the Holder at the
principal office of the Company, for a new Note or Notes (in accordance with Section 17(d) and in principal amounts of
at least $1,000) representing in the aggregate the outstanding Principal of this Note, and each such new Note will represent
such portion of such outstanding Principal as is designated by the Holder at the time of such surrender.

 

(d)Issuance
of New Notes. Whenever the Company is required to issue a new Note pursuant to the terms of this Note, such new Note (i) shall
be of like tenor with this Note, (ii) shall represent, as indicated on the face of such new Note, the Principal remaining outstanding
(or in the case of a new Note being issued pursuant to Section 17(a) or Section 17(c), the Principal designated by the
Holder which, when added to the principal represented by the other new Notes issued in connection with such issuance, does not
exceed the Principal remaining outstanding under this Note immediately prior to such issuance of new Notes), (iii) shall have
an issuance date, as indicated on the face of such new Note, which is the same as the Issuance Date of this Note, (iv) shall have
the same rights and conditions as this Note, and (v) shall represent accrued and unpaid Interest and Late Charges on the Principal
and Interest of this Note, from the Issuance Date.

 

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18.REMEDIES,
CHARACTERIZATIONS, OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE RELIEF. The remedies
provided in this Note shall be cumulative and in addition to all other remedies available under this Note and any of the other
Transaction Documents at law or in equity (including a decree of specific performance and/or other injunctive relief), and nothing
herein shall limit the Holder’s right to pursue actual and consequential damages for any failure by the Company to comply
with the terms of this Note. The Company covenants to the Holder that there shall be no characterization concerning this instrument
other than as expressly provided herein. Amounts set forth or provided for herein with respect to payments, conversion and the
like (and the computation thereof) shall be the amounts to be received by the Holder and shall not, except as expressly provided
herein, be subject to any other obligation of the Company (or the performance thereof). The Company acknowledges that a breach
by it of its obligations hereunder will cause irreparable harm to the Holder and that the remedy at law for any such breach may
be inadequate. The Company therefore agrees that, in the event of any such breach or threatened breach, the Holder shall be entitled,
in addition to all other available remedies, to an injunction restraining any such breach or any such threatened breach, without
the necessity of showing economic loss and without any bond or other security being required. The Company shall provide all information
and documentation to the Holder that is requested by the Holder to enable the Holder to confirm the Company’s compliance
with the terms and conditions of this Note (including, without limitation, compliance with Section 7).

 

19.PAYMENT
OF COLLECTION, ENFORCEMENT AND OTHER COSTS. If (a) this Note is placed in the hands
of an attorney for collection or enforcement or is collected or enforced through any legal proceeding or the Holder otherwise takes
action to collect amounts due under this Note or to enforce the provisions of this Note or (b) there occurs any bankruptcy, reorganization,
receivership of the Company or other proceedings affecting Company creditors’ rights and involving a claim under this Note,
then the Company shall pay the costs incurred by the Holder for such collection, enforcement or action or in connection with such
bankruptcy, reorganization, receivership or other proceeding, including, without limitation, attorneys’ fees and disbursements.
The Company expressly acknowledges and agrees that no amounts due under this Note shall be affected, or limited, by the fact that
the purchase price paid for this Note was less than the original Principal amount hereof.

 

20.CONSTRUCTION;
HEADINGS. This Note shall be deemed to be jointly drafted by the Company and the Holder
and shall not be construed against any Person as the drafter hereof. The headings of this Note are for convenience of reference
and shall not form part of, or affect the interpretation of, this Note. Terms used in this Note but defined in the other Transaction
Documents shall have the meanings ascribed to such terms on the Closing Date in such other Transaction Documents unless otherwise
consented to in writing by the Holder.

 

21.FAILURE
OR INDULGENCE NOT WAIVER. No failure or delay on the part of the Holder in the exercise
of any power, right or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such
power, right or privilege preclude other or further exercise thereof or of any other right, power or privilege. No waiver shall
be effective unless it is in writing and signed by an authorized representative of the waiving party.

 

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22.DISPUTE
RESOLUTION. In the case of a dispute as to the determination of the Conversion Price,
the Company Conversion Price, any Redemption Price, the Closing Bid Price, the Closing Sale Price or fair market value (as the
case may be) or the arithmetic calculation of the Conversion Rate or the applicable Redemption Price (as the case may be), the
Company or the Holder (as the case may be) shall submit the disputed determinations or arithmetic calculations (as the case may
be) via facsimile (i) within two (2) Business Days after receipt of the applicable notice giving rise to such dispute to the Company
or the Holder (as the case may be) or (ii) if no notice gave rise to such dispute, at any time after the Holder learned of the
circumstances giving rise to such dispute (including, without limitation, as to whether any issuance or sale or deemed issuance
or sale was an issuance or sale or deemed issuance or sale of Excluded Securities). If the Holder and the Company are unable to
agree upon such determination or calculation within two (2) Business Days of such disputed determination or arithmetic calculation
(as the case may be) being submitted to the Company or the Holder (as the case may be), then the Company shall, within two (2)
Business Days, submit via facsimile (a) the disputed determination of the Conversion Price, the Company Conversion Price, any Redemption
Price, the Closing Bid Price, the Closing Sale Price or fair market value (as the case may be) to an independent, reputable investment
bank selected by the Company and approved by the Holder or (b) the disputed arithmetic calculation of the Conversion Rate or any
Redemption Price (as the case may be) to an independent, outside accountant selected by the Holder that is reasonably acceptable
to the Company. The Company shall cause at its expense the investment bank or the accountant (as the case may be) to perform the
determinations or calculations (as the case may be) and notify the Company and the Holder of the results no later than ten (10)
Business Days from the time it receives such disputed determinations or calculations (as the case may be). Such investment bank’s
or accountant’s determination or calculation (as the case may be) shall be binding upon all parties absent demonstrable error.

 

23.NOTICES;
CURRENCY; PAYMENTS.

 

(a)Notices.
Whenever notice is required to be given under this Note, unless otherwise provided herein, such notice shall be given in accordance
with Section 9(f) of the Securities Purchase Agreement. The Company shall provide the Holder with prompt written notice of
all actions taken pursuant to this Note, including in reasonable detail a description of such action and the reason therefore.
Without limiting the generality of the foregoing, the Company will give written notice to the Holder (i) immediately upon any adjustment
of the Conversion Price, setting forth in reasonable detail, and certifying, the calculation of such adjustment and (ii) at least
fifteen (15) days prior to the date on which the Company closes its books or takes a record (A) with respect to any dividend or
distribution upon the Common Stock, (B) with respect to any grant, issuances, or sales of any Options, Convertible Securities or
rights to purchase stock, warrants, securities or other property to holders of shares of Common Stock or (C) for determining rights
to vote with respect to any Fundamental Transaction, dissolution or liquidation, provided in each case that such information shall
be made known to the public prior to or in conjunction with such notice being provided to the Holder.

 

(b)Currency.
All dollar amounts referred to in this Note are in United States Dollars (“U.S. Dollars”), and all amounts owing
under this Note shall be paid in U.S. Dollars. All amounts denominated in other currencies (if any) shall be converted into the
U.S. Dollar equivalent amount in accordance with the Exchange Rate on the date of calculation. “Exchange Rate”
means, in relation to any amount of currency to be converted into U.S. Dollars pursuant to this Note, the U.S. Dollar exchange
rate as published in the Wall Street Journal on the relevant date of calculation (it being understood and agreed that where an
amount is calculated with reference to, or over, a period of time, the date of calculation shall be the final date of such period
of time).

 

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(c)Payments.
Whenever any payment of cash is to be made by the Company to any Person pursuant to this Note, unless otherwise expressly set forth
herein, such payment shall be made in lawful money of the United States of America by a certified check drawn on the account of
the Company and sent via overnight courier service to such Person at such address as previously provided to the Company in writing
(which address, in the case of each of the Buyers, shall initially be as set forth on the Schedule of Buyers attached to the Securities
Purchase Agreement), provided that the Holder may elect to receive a payment of cash via wire transfer of immediately available
funds by providing the Company with prior written notice setting out such request and the Holder’s wire transfer instructions.
Whenever any amount expressed to be due by the terms of this Note is due on any day which is not a Business Day, the same shall
instead be due on the next succeeding day which is a Business Day. Any amount of Principal or other amounts due under the Transaction
Documents which is not paid when due shall result in a late charge being incurred and payable by the Company in an amount equal
to interest on such amount at the rate of fifteen percent (15%) per annum from the date such amount was due until the same is paid
in full (“Late Charge”).

 

24.CANCELLATION.
After all Principal, accrued Interest, Late Charges and other amounts at any time owed on this Note have been paid in full, this
Note shall automatically be deemed canceled, shall be surrendered to the Company for cancellation and shall not be reissued.

 

25.WAIVER
OF NOTICE. To the extent permitted by law, the Company hereby irrevocably waives demand,
notice, presentment, protest and all other demands and notices in connection with the delivery, acceptance, performance, default
or enforcement of this Note and the Securities Purchase Agreement.

 

26.GOVERNING
LAW. This Note shall be construed and enforced in accordance with, and all questions
concerning the construction, validity, interpretation and performance of this Note shall be governed by, the internal laws of the
State of New York, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of New
York or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of New
York. The Company hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in The City
of New York, Borough of Manhattan, for the adjudication of any dispute hereunder or in connection herewith or with any transaction
contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding,
any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought
in an inconvenient forum or that the venue of such suit, action or proceeding is improper. Nothing contained herein shall be deemed
to limit in any way any right to serve process in any manner permitted by law. In the event that any provision of this Note is
invalid or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent
that it may conflict therewith and shall be deemed modified to conform with such statute or rule of law. Any such provision which
may prove invalid or unenforceable under any law shall not affect the validity or enforceability of any other provision of this
Note. Nothing contained herein shall be deemed or operate to preclude the Holder from bringing suit or taking other legal action
against the Company in any other jurisdiction to collect on the Company’s obligations to the Holder, to realize on any collateral
or any other security for such obligations, or to enforce a judgment or other court ruling in favor of the Holder. THE COMPANY
HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE
HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS NOTE OR ANY TRANSACTION CONTEMPLATED HEREBY.

 

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27.JUDGMENT
CURRENCY.

 

(a)If
for the purpose of obtaining or enforcing judgment against the Company in any court in any jurisdiction it becomes necessary
to convert into any other currency (such other currency being hereinafter in this Section 27 referred to as the
“Judgment Currency”) an amount due in U.S. dollars under this Note, the conversion shall be made at the
Exchange Rate prevailing on the Trading Day immediately preceding:

 

(i)the
date actual payment of the amount due, in the case of any proceeding in the courts of New York or in the courts of any other jurisdiction
that will give effect to such conversion being made on such date: or

 

(ii)the
date on which the foreign court determines, in the case of any proceeding in the courts of any other jurisdiction (the date
as of which such conversion is made pursuant to this Section 27(a)(ii) being hereinafter referred to as the
“Judgment Conversion Date”).

 

(b)If
in the case of any proceeding in the court of any jurisdiction referred to in Section 27(a)(ii) above, there is a change
in the Exchange Rate prevailing between the Judgment Conversion Date and the date of actual payment of the amount due, the
applicable party shall pay such adjusted amount as may be necessary to ensure that the amount paid in the Judgment Currency,
when converted at the Exchange Rate prevailing on the date of payment, will produce the amount of US dollars which could have
been purchased with the amount of Judgment Currency stipulated in the judgment or judicial order at the Exchange Rate
prevailing on the Judgment Conversion Date.

 

(c)Any
amount due from the Company under this provision shall be due as a separate debt and shall not be affected by judgment being obtained
for any other amounts due under or in respect of this Note.

 

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28.MAXIMUM
PAYMENTS. Without limiting Section 9(d) of the Securities Purchase Agreement,
nothing contained herein shall be deemed to establish or require the payment of a rate of interest or other charges in excess of
the maximum permitted by applicable law. In the event that the rate of interest required to be paid or other charges hereunder
exceed the maximum permitted by such law, any payments in excess of such maximum shall be credited against amounts owed by the
Company to the Holder and thus refunded to the Company.

 

29.CERTAIN
DEFINITIONS. For purposes of this Note, the following terms shall have the following
meanings:

 

(a)“Adjustment
Right” means any right granted with respect to any securities issued in connection with, or with respect to, any
issuance or sale (or deemed issuance or sale in accordance with Section 7) of shares of Common Stock (other than rights of
the type described in Sections 6 or 14hereof) that could result in a decrease in the net consideration received by the
Company in connection with, or with respect to, such securities (including, without limitation, any cash settlement rights,
cash adjustment or other similar rights).

 

(b)“Additional
Share Amount” means, as to any Conversion Amount being converted in connection with a Change of Control, an amount equal
to the present value of the difference between (i) Interest that, but for the applicable conversion, would have been paid to the
Holder on such Conversion Amount from the Issuance Date through the Maturity Date and (ii) the amount of Interest already paid
to the Holder through the applicable Conversion Date.

 

(c)“Adjusted
Market Price” means, for any given date, the lesser of (i) the initial Conversion Price and (ii) 80% of the quotient
of (A) the sum of the VWAP of the Common Stock for each of the Trading Days during the ten (10) consecutive Trading Day period
ending and including the Trading Day immediately prior to such given date, divided by (B) ten (10) (such period, the “Adjusted
Market Price Measuring Period”). All such determinations to be appropriately adjusted for any stock splits, stock dividends,
stock combinations, recapitalizations or other similar transactions during such Adjusted Market Price Measuring Period.

 

(d)“Approved
Stock Plan” means any benefit plan which has been approved by the board of directors of the Company prior to or subsequent
to the date hereof pursuant to which shares of Common Stock, options to purchase Common Stock and other equity incentive awards
may be issued to any employee, officer, director, consultant or endorser for services provided to the Company in their capacity
as such.

 

(e)“Black
Scholes Consideration Value” means the value of the applicable Option, Convertible Security or Adjustment Right (as the
case may be) as of the date of issuance thereof calculated using the Black Scholes Option Pricing Model obtained from the “OV”
function on Bloomberg utilizing (i) an underlying price per share equal to the Closing Sale Price of the Common Stock on the Trading
Day immediately preceding the public announcement of the execution of definitive documents with respect to the issuance of such
Option, Convertible Security or Adjustment Right (as the case may be), (ii) a risk-free interest rate corresponding to the U.S.
Treasury rate for a period equal to the remaining term of such Option, Convertible Security or Adjustment Right (as the case may
be) as of the date of issuance of such Option, Convertible Security or Adjustment Right (as the case may be), (iii) a zero cost
of borrow and (iv) an expected volatility equal to the greater of 100% and the 100 day volatility obtained from the HVT function
on Bloomberg (determined utilizing a 365 day annualization factor) as of the Trading Day immediately following the date of
issuance of such Option, Convertible Security or Adjustment Right (as the case may be).

 

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(f)“Bloomberg”
means Bloomberg, L.P.

 

(g)“Business
Day” means any day other than Saturday, Sunday or other day on which commercial banks in The City of New York are authorized
or required by law to remain closed.

 

(h)“Change
of Control” means any Fundamental Transaction other than (i) any merger of the Company or any of its, direct or indirect,
wholly-owned Subsidiaries with or into any of the foregoing Persons, (ii) any reorganization, recapitalization or reclassification
of the shares of Common Stock in which holders of the Company’s voting power immediately prior to such reorganization, recapitalization
or reclassification continue after such reorganization, recapitalization or reclassification to hold publicly traded securities
and, directly or indirectly, are, in all material respects, the holders of the voting power of the surviving entity (or entities
with the authority or voting power to elect the members of the board of directors (or their equivalent if other than a corporation)
of such entity or entities) after such reorganization, recapitalization or reclassification, or (iii) pursuant to a migratory merger
effected solely for the purpose of changing the jurisdiction of incorporation of the Company or any of its Subsidiaries.

 

(i)“Change
of Control Redemption Premium” means 125%.

 

(j)“Closing
Bid Price” and “Closing Sale Price” means, for any security as of any date, the last closing bid
price and last closing trade price, respectively, for such security on the Principal Market, as reported by Bloomberg, or, if
the Principal Market begins to operate on an extended hours basis and does not designate the closing bid price or the closing
trade price (as the case may be) then the last bid price or last trade price, respectively, of such security prior to 4:00:00
p.m., New York time, as reported by Bloomberg, or, if the Principal Market is not the principal securities exchange or trading
market for such security, the last closing bid price or last trade price, respectively, of such security on the principal securities
exchange or trading market where such security is listed or traded as reported by Bloomberg, or if the foregoing do not apply,
the last closing bid price or last trade price, respectively, of such security in the over-the-counter market on the electronic
bulletin board for such security as reported by Bloomberg, or, if no closing bid price or last trade price, respectively, is reported
for such security by Bloomberg, the average of the bid prices, or the ask prices, respectively, of any market makers for such
security as reported in the “pink sheets” by OTC Markets Group Inc. (formerly Pink Sheets LLC). If the Closing Bid
Price or the Closing Sale Price cannot be calculated for a security on a particular date on any of the foregoing bases, the Closing
Bid Price or the Closing Sale Price (as the case may be) of such security on such date shall be the fair market value as mutually
determined by the Company and the Holder. If the Company and the Holder are unable to agree upon the fair market value of such
security, then such dispute shall be resolved in accordance with the procedures in Section 22. All such determinations shall
be appropriately adjusted for any stock splits, stock dividends, stock combinations, recapitalizations or other similar transactions
during such period.

 

    	33

    	 

    
 

 

(k)“Closing
Date” shall have the meaning set forth in the Securities Purchase Agreement, which date is the date the Company initially
issued Notes pursuant to the terms of the Securities Purchase Agreement.

 

(l)“Common
Stock” means (i) the Company’s shares of common stock, $0.001 par value per share, and (ii) any capital stock
into which such common stock shall have been changed or any share capital resulting from a reclassification of such common stock.

 

(m)“Convertible
Securities” means any stock or other security (other than Options) that is at any time and under any circumstances, directly
or indirectly, convertible into, exercisable or exchangeable for, or which otherwise entitles the holder thereof to acquire, any
shares of Common Stock.

 

(n)“Current
Subsidiary” means any Person in which the Company on the Subscription Date, directly or indirectly, (i) owns a majority
of the outstanding capital stock or holds a majority of any equity or similar interest of such Person or (ii) controls or operates
all or any part of the business, operations or administration of such Person, and all of the foregoing, collectively, “Current
Subsidiaries.”

 

(o)“Eligible
Market” means The New York Stock Exchange, the NYSE MKT, the Nasdaq Global Select Market, the Nasdaq Capital Market,
the Nasdaq Global Market or the Principal Market.

 

    	34

    	 

    
 

 

(p)“Equity
Conditions” means: (i) on each day during the period beginning three months prior to the applicable date of
determination and ending on and including the applicable date of determination either (x) one
or more Registration Statements filed pursuant to the Registration Rights Agreement shall be effective
and the prospectus contained therein shall be available for the resale by the Holder of all of the Registrable Securities
(which, solely for clarification purposes, includes all shares of Common Stock issuable upon conversion of this Note
or otherwise pursuant to the terms of this Note and upon exercise of the Warrants) in accordance
with the terms of the Registration Rights Agreement and there shall not have been during such period any Grace
Periods (as defined in the Registration Rights Agreement) or (y)
all Registrable Securities shall be eligible for sale pursuant to Rule 144 without the need
for registration under any applicable federal or state securities laws (in each case, disregarding any limitation on
conversion of the Notes, other issuance of securities with respect to the Notes and exercise of the Warrants) and no
Current Information Failure (as defined in the Registration Rights Agreement) exists or is continuing;
(ii) on each day during the period beginning three months prior to the applicable date of determination and ending on and
including the applicable date of determination (the “Equity Conditions Measuring Period”), the Common
Stock (including all Registrable Securities) is listed or designated for quotation (as
applicable) on an Eligible Market and shall not have been suspended from trading on an Eligible Market (other than
suspensions of not more than two (2) days and occurring prior to the applicable date of determination due to business
announcements by the Company) nor shall delisting or suspension by an Eligible Market have been threatened (with a reasonable
prospect of delisting occurring) or pending either (A) in writing by such Eligible Market or (B) by falling below the minimum
listing maintenance requirements of the Eligible Market on which the Common Stock is then listed or designated for quotation
(as applicable); (iii) on each day during the Equity Conditions Measuring Period, the Company shall have delivered all shares
of Common Stock issuable upon conversion of this Note on a timely basis as set forth in Section 3 hereof and all
other shares of capital stock required to be delivered by the Company on a timely basis as set forth in the other Transaction
Documents; (iv) any shares of Common Stock to be issued in connection with the event requiring determination may be issued in
full without violating Section 3(d) hereof; (v) any shares of Common Stock to be issued in connection with the event
requiring determination may be issued in full without violating the rules or regulations of the Eligible Market on which the
Common Stock is then listed or designated for quotation (as applicable); (vi) on each day during the Equity Conditions
Measuring Period, no public announcement of a pending, proposed or intended Fundamental Transaction shall have occurred which
has not been abandoned, terminated or consummated; (vii) the Company shall have no knowledge of
any fact that would reasonably be expected to cause (1) any Registration Statement required to be filed pursuant to the
Registration Rights Agreement to not be effective or the prospectus contained therein to not be available for the resale of
all of the Registrable Securities in accordance with the terms of the Registration Rights Agreement or (2) any Registrable
Securities to not be eligible for sale pursuant to Rule 144 without the need for
registration under any applicable federal or state securities laws (in each case, disregarding any limitation on conversion
of the Notes, other issuance of securities with respect to the Notes and exercise of the Warrants) and no
Current Information Failure exists or is continuing; (viii) the Holder shall not be in (and no
other Buyer shall be in) possession of any material, non-public information provided to any of them by the Company, any of
its affiliates or any of their respective employees, officers, representatives, agents or the like; (ix) on each day
during the Equity Conditions Measuring Period, the Company otherwise shall have been in compliance with each, and shall not
have breached any provision, covenant, representation or warranty of any Transaction Document; (x) on each day during the
Equity Conditions Measuring Period, there shall not have occurred any Volume Failure or Price Failure; and (xi) on each day
during the Equity Conditions Measuring Period, there shall not have occurred an Event of Default or an event that with the
passage of time or giving of notice would constitute an Event of Default.

 

    	35

    	 

    
 

 

(q)“Equity
Conditions Failure” means that on any day during the period commencing ten (10) Trading Days prior to the applicable
Interest Date through the applicable Interest Date, or (ii) on any day during the period commencing fifteen (15) Trading Days prior
to the applicable Company Optional Redemption Notice Date through the applicable Company Optional Redemption Date, the Equity Conditions
have not been satisfied (or waived in writing by the Holder).

 

(r)“Excluded
Securities” means any (i) shares of Common Stock or standard options to purchase Common Stock issued to directors, officers
or consultants, endorsers or employees of the Company in their capacity as such pursuant to an Approved Stock Plan, provided that
(A) all such issuances (taking into account the shares of Common Stock issuable upon exercise of such options) after the date hereof
pursuant to this clause (i) do not, in the aggregate, exceed more than 15% of the Common Stock issued and outstanding immediately
prior to the date hereof and (B) the exercise price of any such options is not lowered after issuance by subsequent amendment thereof,
none of such options are amended subsequent to issuance to increase the number of shares issuable thereunder and none of the terms
or conditions of any such options are subsequent to issuance otherwise materially changed in any manner that adversely affects
any of the Buyers; (ii) shares of Common Stock issued upon the conversion or exercise of Convertible Securities or contractual
agreements (other than options to purchase Common Stock or other equity incentive awards issued pursuant to an Approved Stock Plan
that are covered by clause (i) above) issued prior to the date hereof, provided that the conversion price of any such Convertible
Securities (other than options to purchase Common Stock issued pursuant to an Approved Stock Plan that are covered by clause (i)
above) is not lowered by subsequent amendment, none of such Convertible Securities (other than standard options to purchase Common
Stock issued pursuant to an Approved Stock Plan that are covered by clause (i) above) are subsequently amended to increase the
number of shares issuable thereunder and none of the terms or conditions of any such Convertible Securities (other than options
to purchase Common Stock issued pursuant to an Approved Stock Plan that are covered by clause (i) above) are otherwise materially
changed in any manner that adversely affects any of the Buyers; (iii) the shares of Common Stock issuable upon conversion of the
Notes or otherwise pursuant to the terms of the Notes; (iv) the shares of Common Stock issuable upon exercise of the Warrants and
(v) in connection with strategic alliances, acquisitions, mergers, and strategic partnerships, provided, that (A) the primary purpose
of such issuance is not to raise capital as determined in good faith by the Company’s board of directors, (B) the purchaser
or acquirer of the securities in such issuance solely consists of either (x) the actual participants in such strategic alliance
or strategic partnership, (y) the actual owners of such assets or securities acquired in such acquisition or merger or (z) the
stockholders, partners or members of the foregoing Persons and (C) number or amount of securities issued to such Person by the
Company shall not be disproportionate to either (x) the fair market value of such Person’s actual contribution to such strategic
alliance or strategic partnership or (y) the proportional ownership of such assets or securities to be acquired by the Company,
as applicable.

 

    	36

    	 

    
 

 

(s)“Fundamental
Transaction” means that (i) the Company or any of its Subsidiaries shall, directly or indirectly, in one or more related
transactions, (1) consolidate or merge with or into (whether or not the Company or any of its Subsidiaries is the surviving corporation)
any other Person, or (2) sell, lease, license, assign, transfer, convey or otherwise dispose of all or substantially all of its
respective properties or assets to any other Person, or (3) allow any other Person to make a purchase, tender or exchange offer
that is accepted by the holders of more than 50% of the outstanding shares of Voting Stock of the Company (not including any shares
of Voting Stock of the Company held by the Person or Persons making or party to, or associated or affiliated with the Persons making
or party to, such purchase, tender or exchange offer), or (4) consummate a stock or share purchase agreement or other business
combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with any other
Person whereby such other Person acquires more than 50% of the outstanding shares of Voting Stock of the Company (not including
any shares of Voting Stock of the Company held by the other Person or other Persons making or party to, or associated or affiliated
with the other Persons making or party to, such stock or share purchase agreement or other business combination), or (5) reorganize,
recapitalize or reclassify the Common Stock, or (ii) any “person” or “group” (as these terms are used for
purposes of Sections 13(d) and 14(d) of the 1934 Act and the rules and regulations promulgated thereunder) is or shall become
the “beneficial owner” (as defined in Rule 13d-3 under the 1934 Act), directly or indirectly, of 50% of the aggregate
ordinary voting power represented by issued and outstanding Voting Stock of the Company.

 

(t)“GAAP”
means United States generally accepted accounting principles, consistently applied.

 

(u)“Holder
Pro Rata Amount” means a fraction (i) the numerator of which is the original Principal amount of this Note on the Closing
Date and (ii) the denominator of which is the aggregate original principal amount of all Notes issued to the initial purchasers
pursuant to the Securities Purchase Agreement on the Closing Date.

 

(v)“Interest
Conversion Price” means, with respect to any Interest Date that price which shall be the lower
of (i) the applicable Conversion Price and (ii) the price computed as 80% of the quotient of (I) the sum of the VWAP of
the Common Stock for each of the Trading Days during the ten (10) consecutive Trading Day period ending and including the Trading
Day immediately prior to such Interest Date, divided by (II) ten (10) (such period, the “Interest Measuring Period”).
All such determinations to be appropriately adjusted for any stock dividend, stock split, stock combination, reclassification or
similar transaction that proportionately decreases or increases the Common Stock during such Interest Measuring Period.

 

(w)“Interest
Notice Due Date” means means the sixteenth (16th) Trading Day immediately prior to the applicable Interest
Date

 

(x)“Interest
Rate” means five percent (5%) per annum, as may be adjusted from time to time in accordance with Section 2.

 

    	37

    	 

    
 

 

(y)“Mandatory
Conversion Volume Limitation” means 20% of the aggregate dollar trading volume (as reported on Bloomberg) of the Common
Stock on the Principal Market over the twenty (20) consecutive Trading Day period immediately prior to the applicable Mandatory
Conversion Notice Date.

 

(z)“Market
Price” means, for any given date, the lesser of (x) $[ ]4 (as adjusted for stock splits, stock dividends,
stock combinations, recapitalizations or other similar transactions) and (y) quotient of (I) the sum of the VWAP of the Common
Stock for each of the Trading Days during the ten (10) consecutive Trading Day period ending and including the Trading Day immediately
prior to such given date, divided by (II) ten (10) (such period, the “Market Price Measuring Period”). All
such determinations to be appropriately adjusted for any stock splits, stock dividends, stock combinations, recapitalizations
or other similar transactions during such Market Price Measuring Period.

 

(aa)“Maturity
Date” shall mean [ ]5; provided, however, the Maturity Date may be extended at the option of the Holder
(i) in the event that, and for so long as, an Event of Default shall have occurred and be continuing or any event shall have occurred
and be continuing that with the passage of time and the failure to cure would result in an Event of Default or (ii) through the
date that is twenty (20) Business Days after the consummation of a Fundamental Transaction in the event that a Fundamental Transaction
is publicly announced or a Fundamental Transaction Notice is delivered prior to the Maturity Date, provided further that if a
Holder elects to convert some or all of this Note pursuant to Section 3

hereof, and the Conversion Amount would be limited pursuant to Section 3(d)

hereunder, the Maturity Date shall automatically be extended until such time as such provision shall not
limit the conversion of this Note.

 

(bb)“New
Subsidiary” means, as of any date of determination, any Person in which the Company after the Subscription Date, directly
or indirectly, (i) owns or acquires any of the outstanding capital stock or holds any equity or similar interest of such Person
or (ii) controls or operates all or any part of the business, operations or administration of such Person, and all of the foregoing,
collectively, “New Subsidiaries.”

 

(cc)“Options”
means any rights, warrants or options to subscribe for or purchase shares of Common Stock or Convertible Securities.

 

(dd)“Parent
Entity” of a Person means an entity that, directly or indirectly, controls the applicable Person and whose common stock
or equivalent equity security is quoted or listed on an Eligible Market, or, if there is more than one such Person or Parent Entity,
the Person or Parent Entity with the largest public market capitalization as of the date of consummation of the Fundamental Transaction.

 

 

 

 

4Insert
the VWAP of the Common Stock as of the close of business of the Principal Market immediately prior to the time of execution of
the Securities Purchase Agreement

 

5Insert the first anniversary of
the Issuance Date

 

    	38

    	 

    
 

 

(ee)“Permitted
Indebtedness” means (i) Indebtedness evidenced by this Note and the Other Notes, (ii) Indebtedness described in Schedule
3(s) of the Securities Purchase Agreement as in effect as of the Subscription Date; provided, that the principal amount of such
Indebtedness is not increased, the terms of such Indebtedness are not modified to impose more burdensome terms upon the Company
or any of its Subsidiaries and the terms of such Indebtedness are not materially changed in any manner that adversely affects the
Holder or any of the Buyers and (iii) Indebtedness secured by Permitted Liens described in clause (iv) of the definition of Permitted
Liens.

 

(ff)“Permitted
Liens” means (i) any Lien for taxes not yet due or delinquent or being contested in good faith by appropriate proceedings
for which adequate reserves have been established in accordance with GAAP, (ii) any statutory Lien arising in the ordinary course
of business by operation of law with respect to a liability that is not yet due or delinquent, (iii) any Lien created by operation
of law, such as materialmen’s liens, mechanics’ liens and other similar liens, arising in the ordinary course of business
with respect to a liability that is not yet due or delinquent or that are being contested in good faith by appropriate proceedings,
(iv) Liens (A) upon or in any equipment or inventory acquired or held by the Company or any of its Subsidiaries to secure the
purchase price of such equipment or inventory or indebtedness incurred solely for the purpose of financing the acquisition or
lease of such equipment or inventory, or (B) existing on such equipment at the time of its acquisition, provided that the Lien
is confined solely to the property so acquired and improvements thereon, and the proceeds of such equipment, in either case, with
respect to indebtedness in an aggregate amount not to exceed $4 million and, if applicable, 50% or less warrant coverage (such
warrants collectively, the “Permitted Purchase Money Warrants”), (v) leases or subleases and licenses and sublicenses
granted to others in the ordinary course of the Company’s business, not interfering in any material respect with the business
of the Company and its Subsidiaries taken as a whole, (vi) Liens in favor of customs and revenue authorities arising as a
matter of law to secure payments of custom duties in connection with the importation of goods, (vii)
Liens arising from judgments, decrees or attachments in circumstances not constituting an Event of Default under Section 4(a)(x),
and (viii) Liens existing as of the Closing Date, as disclosed in the Securities Purchase Agreement.

 

(gg)
“Person” means an individual, a limited liability company, a partnership, a joint venture, a corporation, a
trust, an unincorporated organization, any other entity or a government or any department or agency thereof.

 

(hh)“Price
Failure” means, with respect to a particular date of determination, that the quotient of (I) the sum of the VWAP of the
Common Stock for each Trading Day in the thirty (30) consecutive Trading Day period ending and including the Trading Day immediately
preceding such date of determination, divided by (II) thirty (30) (such period, the “Price Failure Measuring Period”)
is less than $0.10 (as adjusted for stock splits, stock dividends, stock combinations, recapitalizations or other similar transactions).
All such determinations to be appropriately adjusted for any stock splits, stock dividends, stock combinations, recapitalizations
or other similar transactions during such Price Failure Measuring Period.

 

    	39

    	 

    
 

 

(ii)“Principal
Market” means the OTCQB Market.

 

(jj)“Quarter”
means each of: (i) the period beginning on and including January 1 and ending on and including March 31; (ii) the period beginning
on and including April 1 and ending on and including June 30; (iii) the period beginning on and including July 1 and ending on
and including September 30; and (iv) the period beginning on and including October 1 and ending on and including December 31.

 

(kk)“Redemption
Notices” means, collectively, the Event of Default Redemption Notices, the Company Optional Redemption Notice and the
Change of Control Redemption Notices, and each of the foregoing, individually, a “Redemption Notice.”

 

(ll)“Redemption
Premium” means (i) in the case of the Events of Default described in Section ‎4(a) (other than Sections 4(a)(vii)
through 4(a)(ix)), 125% or (ii) in the case of the Events of Default described in Sections 4(a)(vii) through 4(a)(ix), 100%.

 

(mm)“Redemption
Prices” means, collectively, Event of Default Redemption Prices, the Change of Control Redemption Prices and the Company
Optional Redemption Price, and each of the foregoing, individually, a “Redemption Price.”

 

(nn)“Registration
Rights Agreement” means that certain registration rights agreement, dated as of the Closing Date, by and among the Company
and the initial holders of the Notes relating to, among other things, the registration of the resale of the Common Stock issuable
upon conversion of the Notes or otherwise pursuant to the terms of the Notes and exercise of the Warrants, as may be amended from
time to time.

 

(oo)“Required
Holders” means, at any given time, the holders of a majority of the aggregate principal amount of the Notes, outstanding
as of such time (excluding any Notes held by the Company or any of its Subsidiaries); provided, that such majority must include
Hudson Bay Master Fund Ltd (to the extent Hudson Bay Master Fund Ltd holds any Notes outstanding as of such time).

 

(pp)“SEC”
means the United States Securities and Exchange Commission or the successor thereto.

 

(qq)“Securities
Purchase Agreement” means that certain securities purchase agreement, dated as of the Subscription Date, by and among
the Company and the initial holders of the Notes pursuant to which the Company issued the Notes and Warrants, as may be amended
from time to time.

 

(rr)“Subscription
Date” means March __, 2013.

 

    	40

    	 

    
 

 

(ss)“Subsidiaries”
means, as of any date of determination, collectively, all Current Subsidiaries and all New Subsidiaries, and each of the foregoing,
individually, a “Subsidiary.”

 

(tt)“Successor
Entity” means the Person (or, if so elected by the Holder, the Parent Entity) formed by, resulting from or surviving
any Fundamental Transaction or the Person (or, if so elected by the Holder, the Parent Entity) with which such Fundamental Transaction
shall have been entered into.

 

(uu)“Trading
Day” means any day on which the Common Stock is traded on the Principal Market, or, if the Principal Market is not the
principal trading market for the Common Stock, then on the principal securities exchange or securities market on which the Common
Stock is then traded, provided that “Trading Day” shall not include any day on which the Common Stock is scheduled
to trade on such exchange or market for less than 4.5 hours or any day that the Common Stock is suspended from trading during the
final hour of trading on such exchange or market (or if such exchange or market does not designate in advance the closing time
of trading on such exchange or market, then during the hour ending at 4:00:00 p.m., New York time) unless such day is otherwise
designated as a Trading Day in writing by the Holder.

 

(vv)“Volume
Failure” means, with respect to a particular date of determination, that the aggregate daily dollar trading volume (as
reported on Bloomberg) of the Common Stock on the Eligible Market on which the Common Stock is listed or designated for quotation
on any Trading Day over the thirty (30) consecutive Trading Day period ending on the Trading Day immediately preceding such date
of determination (such period, the “Volume Failure Measuring Period”) is less than $150,000 (as adjusted for
any stock splits, stock dividends, stock combinations, recapitalizations or other similar transactions). All such determinations
to be appropriately adjusted for any stock splits, stock dividends, stock combinations, recapitalizations or other similar transactions
during such Volume Failure Measuring Period.

 

(ww)“Voting
Stock” of a Person means capital stock of such Person of the class or classes pursuant to which the holders thereof have
the general voting power to elect, or the general power to appoint, at least a majority of the board of directors, managers, trustees
or other similar governing body of such Person (irrespective of whether or not at the time capital stock of any other class or
classes shall have or might have voting power by reason of the happening of any contingency).

 

    	41

    	 

    
 

 

(xx)VWAP”
means, for any security as of any date, the dollar volume-weighted average price for such security on the Principal Market (or,
if the Principal Market is not the principal trading market for such security, then on the principal securities exchange or securities
market on which such security is then traded) during the period beginning at 9:30:01 a.m., New York time, and ending at 4:00:00
p.m., New York time, as reported by Bloomberg through its “Volume at Price” function or, if the foregoing does not
apply, the dollar volume-weighted average price of such security in the over-the-counter market on the electronic bulletin board
for such security during the period beginning at 9:30:01 a.m., New York time, and ending at 4:00:00 p.m., New York time, as reported
by Bloomberg, or, if no dollar volume-weighted average price is reported for such security by Bloomberg for such hours, the average
of the highest closing bid price and the lowest closing ask price of any of the market makers for such security as reported in
the “pink sheets” by OTC Markets Group Inc. (formerly Pink Sheets LLC). If the VWAP cannot be calculated for such
security on such date on any of the foregoing bases, the VWAP of such security on such date shall be the fair market value as
mutually determined by the Company and the Holder. If the Company and the Holder are unable to agree upon the fair market value
of such security, then such dispute shall be resolved in accordance with the procedures in Section 22. All such determinations
shall be appropriately adjusted for any stock dividend, stock split, stock combination, recapitalization or other similar transaction
during such period.

 

(yy)“Warrants”
has the meaning ascribed to such term in the Securities Purchase Agreement, and shall include all warrants issued in exchange therefor
or replacement thereof.

 

30.DISCLOSURE.
Upon receipt or delivery by the Company of any notice in accordance with the terms of this Note, unless the Company has in
good faith determined that the matters relating to such notice do not constitute material, non-public information relating to
the Company or any of its Subsidiaries, the Company shall within one (1) Business Day after any such receipt or delivery
publicly disclose such material, non-public information on a Current Report on Form 8-K or otherwise. In the event that the
Company believes that a notice contains material, non-public information relating to the Company or any of its Subsidiaries,
the Company so shall indicate to such Holder contemporaneously with delivery of such notice, and in the absence of any such
indication, the Holder shall be allowed to presume that all matters relating to such notice do not constitute material,
non-public information relating to the Company or its Subsidiaries. Nothing contained in this Section 30 shall
limit any obligations of the Company, or any rights of the Holder, under Section 4(i) of the Securities Purchase
Agreement.

 

[signature page follows]

 

 

    	42

    	 

    

 

IN WITNESS WHEREOF,
the Company has caused this Note to be duly executed as of the Issuance Date set out above.

 

	 	
	 	
        Fuse Science, Inc.

        

	 	 
	 	By:                                                           
	 	Name:
	 	Title:
	 	 

 

 

    	43

    	 

    

 

EXHIBIT
I

 

Fuse Science,
Inc.

CONVERSION NOTICE

 

Reference is made to
the Series A Senior Convertible Note (the “Note”) issued to the undersigned by Fuse Science, Inc., a Nevada
corporation (the “Company”). In accordance with and pursuant to the Note, the undersigned hereby elects to convert
the Conversion Amount (as defined in the Note) of the Note indicated below into shares of Common Stock, $0.001 par value per share
(the “Common Stock”), of the Company, as of the date specified below. Capitalized terms not defined herein shall
have the meaning as set forth in the Note.

 

 

	Date of Conversion:	 
	 	 
	Aggregate Principal
to be converted:
	 
	 	 
	Aggregate accrued and unpaid Interest and accrued and unpaid Late Charges with respect to such portion of the Aggregate Principal and such Aggregate Interest to be converted:	 
	 	 
	AGGREGATE CONVERSION AMOUNT TO BE CONVERTED:	 
	 	 
	Please confirm the following information:	 
	 	 
	Conversion Price:	 
	 	 
	Number of shares of Common Stock to be issued:	 
	 	 
	Please issue the Common Stock into which the Note is being converted in the following name and to the following address:	 
	 	 
	Issue to:	 
	 	 
	Facsimile Number:	 
	 	 
	Holder:	 
	 	 
	By:

                                                                
	 
	 	 
	Title: 
	 
	 	 
	Dated:	 
	 	 
	Account Number:	 
	 	 
	(if electronic book entry transfer)	 
	 	 
	Transaction Code Number:	 
	 	 
	
        (if electronic book entry transfer)

        
	 

 

 

 

    	44

    	 

    
 

 

ACKNOWLEDGMENT

 

The Company hereby
acknowledges this Conversion Notice and hereby directs _________________ to issue the above indicated number of shares of Common
Stock in accordance with the Transfer Agent Instructions dated _____________, 20__ from the Company and acknowledged and agreed
to by ________________________.

 

	 	
	 	
        Fuse Science, Inc.

        

	 	 
	 	By:                                                           
	 	Name:
	 	Title:
	 	 

 

    	45

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