Document:

Exhibit 10.3

 

Exhibit B

 

Rights Holders List

Signature Page

(Unvested Shares)

 

	
 

	
Signature

	
Duma Energy Corp.

Common Stock

Shares to Issue

	 		
	
Michael Watts

	
/s/ Michael Watts

	
1,692,000

	
 

	
 

	
 

	
KD Navigation, Inc.

	
/s/ Kara M. Driver

	
6,906,000

	
Name: Kara M. Driver

	
Title: Secretary

	
 

	
 

	
 

	
 

	
KW Navigation, Inc.

	
/s/ Kara M. Driver

	
6,906,000

	
Name: Kara M. Driver

	
Title: Secretary

	
 

	
 

	
 

	
 

	
CW Navigation. Inc.

	
/s/ Kara M. Driver

	
6,906,000

	
Name: Kara M. Driver

	
Title: Secretary

	
 

	
 

	
 

	
 

	
 

	
 

	 

22,410,000

As evidenced by the signatures above and by the issuance of the Duma Energy Corp. Common Stock to Issue, the Rights Holders agree that 100% of all obligations for any future rights issuance have been fulfilled by Duma Energy Corp.

 

 

Page 1 of 1NEITHER THE ISSUANCE ANDSALE 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 (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN A GENERALLY ACCEPTABLE
FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS 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.

 

	Principal Amount: $511,146.18	Issue Date: May21, 2014

 

12% CONVERTIBLE DEBENTURE

 

FOR VALUE RECEIVED,Inergetics,
Inc., a Delaware corporation (hereinafter called the “Borrower”), hereby promises to pay to the order of
31 Group, LLC, or registered assigns (the “Holder”) the sum of $511,146.18, together with any interest as set
forth herein, on May 20, 2015 (the “Maturity Date”), and to pay interest on the unpaid principal balance hereof at
the rate of twelve percent (12%) per annum (the “Interest Rate”). The accrued interest shall be payable on the applicable
date of conversion, redemption or the Maturity Date regardless of how long this Debenture remains outstanding.This Debenture may
not be prepaid in whole or in part except as otherwise explicitly set forth herein.Any amount of principal or interest on this
Debenture which is not paid on demand shall bear interest at the rate of eighteen percent (18%) per annum from the due date thereof
until the same is paid (“Default Interest”). Interest shall commence accruing on the Issue Date and shall be computed
on the basis of a 365-day year and the actual number of days elapsed. All payments due hereunder (to the extent not converted into
common stock, $0.001 par value per share (the “Common Stock”) in accordance with the terms hereof) shall be made in
lawful money of the United States of America. All payments shall be made at such address as the Holder shall hereafter give to
the Borrower by written notice made in accordance with the provisions of this Debenture. Whenever any amount expressed to be due
by the terms of this Debenture 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 and, in the case of any interest payment date which is not the date on which this Debenture is paid
in full, the extension of the due date thereof shall not be taken into account for purposes of determining the amount of interest
due on such date. As used in this Debenture, the term “business day” shall mean any day other than a Saturday, Sunday
or a day on which commercial banks in the city of New York, New York are authorized or required by law or executive order to remain
closed. Each capitalized term used herein, and not otherwise defined, shall have the meaning ascribed thereto in that certain Exchange
Agreement dated May21, 2014, pursuant to which this Debenture was originally issued (the “Exchange Agreement”).

 

    	 

    	 

    

 

This Debenture is free
from all taxes, liens, claims and encumbrances with respect to the issue thereof and shall not be subject to preemptive rights
or other similar rights of shareholders of the Borrower and will not impose personal liability upon the holder thereof.

 

The following terms
shall apply to this Debenture:

 

Article
I. CONVERSION RIGHTS

 

1.1           Conversion
Right.The Holder shall have the right from time to time, and at any time commencing on the date hereof and ending on the date
this Debenture has been paid in full, each in respect of the remaining outstanding principal amount of this Debenture to convert
all or any part of the outstanding and unpaid principal amount of this Debenture into fully paid and non-assessable shares of Common
Stock, as such Common Stock exists on the Issue Date, or any shares of capital stock or other securities of the Borrower into which
such Common Stock shall hereafter be changed or reclassified at the Conversion Price (as defined herein) determined as provided
herein (a “Conversion”); provided, however, that in no event shall the Holder be entitled to convert
any portion of this Debenture in excess of that portion of this Debenture upon conversion of which the sum of (1) the number of
shares of Common Stock beneficially owned by the Holder and its affiliates (other than shares of Common Stock which may be deemed
beneficially owned through the ownership of the unconverted portion of the Debentures or the unexercised or unconverted portion
of any other security of the Borrower subject to a limitation on conversion or exercise analogous to the limitations contained
herein) and (2) the number of shares of Common Stock issuable upon the conversion of the portion of this Debenture with respect
to which the determination of this proviso is being made, would result in beneficial ownership by the Holder and its affiliates
of more than 9.99% of the outstanding shares of Common Stock (“Ownership Limitation”); provided however, in the event
that Holder elects to convert any portion of the Debenture on Maturity Date and the Conversion Shares to be issued as a result
of such Conversion may cause the Holder’s beneficial ownership to exceed the Ownership Limitation (the “Maturity Date
Conversion”), then Holder shall agree that the Maturity Date shall be automatically extended and the Company shall not be
deemed in default hereunder until such date that all Conversion Shares under such elected Maturity Date Conversion have been issued
to the Holder subject to the foregoing Ownership Limitation. For purposes of the proviso to the immediately preceding sentence,
beneficial ownership shall be determined in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”), and Regulations 13D-G thereunder, except as otherwise provided in clause (1) of such proviso, provided,
further, however, that the limitations on conversion may be waived by the Holder upon, at the election of the Holder,
not less than 61 days’ prior notice to the Borrower, and the provisions of the conversion limitation shall continue to apply
until such 61st day (or such later date, as determined by the Holder, as may be specified in such notice of waiver). The number
of shares of Common Stock to be issued upon each conversion of this Debenture shall be determined by dividing the Conversion Amount
(as defined below) by the applicable Conversion Price then in effect on the date specified in the notice of conversion, in the
form attached hereto as Exhibit A (the “Notice of Conversion”), delivered to the Borrower by the Holder in accordance
with Section 1.4 below; provided that the Notice of Conversion is submitted by facsimile or e-mail (or by other means resulting
in, or reasonably expected to result in, notice) to the Borrower before 6:00 p.m., New York, New York time on such conversion date
(the “Conversion Date”). The term “Conversion Amount” means, with respect to any conversion of this Debenture,
the sum of (1) the principal amount of this Debenture to be converted in such conversion plus (2) at the Holder’s
option, accrued and unpaid interest, if any, on such principal amount at the interest rates provided in this Debenture to the Conversion
Date, plus (3) at the Holder’s option, Default Interest, if any, on the amounts referred to in the immediately preceding
clauses (1) plus (4) at the Holder’s option, any amounts owed to the Holder pursuant to Sections 1.3 and 1.4(g) hereof.

 

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1.2          Conversion
Price.

 

(a) Calculation
of Conversion Price. The conversion price (the “Conversion Price”) shall equal the lesser of (i) $0.35 per share,
or (ii) the Variable Conversion Price (as defined herein)(subject to equitable adjustments for stock splits, stock dividends or
rights offerings by the Borrower relating to the Borrower’s securities or the securities of any subsidiary of the Borrower,
combinations, recapitalization, reclassifications, extraordinary distributions and similar events and issuances of securities at
specified lower prices). The"Variable Conversion Price" shall mean sixty-two percent (62%) of the lowest trading price
of the Common Stock as quoted by Bloomberg L.P. for the ten (10) trading days immediately preceding the Conversion Date. Notwithstanding
the foregoing, in no event shall the Conversion Price be less than $0.031 per share (the “Floor Price”). If the trading
price cannot be calculated for such security on such date in the manner provided above, the trading price shall be the fair market
value as mutually determined by the Borrower and the holders of a majority in interest of the Debentures being converted for which
the calculation of the trading price is required in order to determine the Conversion Price of such Debentures.If the Borrower’s
Common Stock is chilled for deposit at the Depository Trust Company and/or becomes chilled at any point while this Debenture remains
outstanding, an additional 8% discount will be attributed to the Conversion Price defined herein. 

 

(b) Conversion
Price During Major Announcements. Notwithstanding anything contained in Section 1.2(a) to the contrary, in the event the Borrower
(i) makes a public announcement that it intends to consolidate or merge with any other corporation (other than a merger in which
the Borrower is the surviving or continuing corporation and its capital stock is unchanged) or sell or transfer all or substantially
all of the assets of the Borrower or (ii) any person, group or entity (including the Borrower) publicly announces a tender offer
to purchase 50% or more of the Borrower’s Common Stock (or any other takeover scheme) (the date of the announcement referred
to in clause (i) or (ii) is hereinafter referred to as the “Announcement Date”), then the Conversion Price shall, effective
upon the Announcement Date and continuing through the Adjusted Conversion Price Termination Date (as defined below), be equal to
the lower of (x) the Conversion Price which would have been applicable for a Conversion occurring on the Announcement Date and
(y) the Conversion Price that would otherwise be in effect. From and after the Adjusted Conversion Price Termination Date, the
Conversion Price shall be determined as set forth in this Section 1.2(a). For purposes hereof, “Adjusted Conversion Price
Termination Date” shall mean, with respect to any proposed transaction or tender offer (or takeover scheme) for which a public
announcement as contemplated by this Section 1.2(b) has been made, the date upon which the Borrower (in the case of clause (i)
above) or the person, group or entity (in the case of clause (ii) above) consummates or publicly announces the termination or abandonment
of the proposed transaction or tender offer (or takeover scheme) which caused this Section 1.2(b) to become operative.

 

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1.3          Authorized
Shares. The Borrower covenants that during the period the conversion right exists, the Borrower will reserve from its authorized
and unissued Common Stock a sufficient number of shares, free from preemptive rights, to provide for the issuance of Common Stock
upon the full conversion of this Debenture issued pursuant to the Exchange Agreement. The Borrower is required at all times to
have authorized and reserved the following number of shares (the “Reserved Amount”):

 

_____P______
* 4 = Reserved Amount

    (T*0.62)

 

P = Principal Amount

T = the lowest trading
price in the five (5) Trading Days prior to the Issue Date

 

The Borrower represents
that upon issuance, such shares will be duly and validly issued, fully paid and non-assessable. In addition, if the Borrower shall
issue any securities or make any change to its capital structure which would change the number of shares of Common Stock into which
the Debentures shall be convertible at the then current Conversion Price, the Borrower shall at the same time make proper provision
so that thereafter there shall be a sufficient number of shares of Common Stock authorized and reserved, free from preemptive rights,
for conversion of the outstanding Debentures. The Borrower (i) acknowledges that it has irrevocably instructed its transfer agent
to issue certificates for the Common Stock issuable upon conversion of this Debenture, and (ii) agrees that its issuance of
this Debenture shall constitute full authority to its officers and agents who are charged with the duty of executing stock certificates
to execute and issue the necessary certificates for shares of Common Stock in accordance with the terms and conditions of this
Debenture.

 

If, at any time the Borrower
does not maintain the Reserved Amount it will be considered an Event of Default under Section 3.2 of the Debenture.

 

1.4          Method
of Conversion.

 

(a)  Mechanics
of Conversion. Subject to Section 1.1, this Debenture may be converted by the Holder in whole or in part at any time from time
to time after the Issue Date, by (A) submitting to the Borrower a Notice of Conversion (by facsimile, e-mail or other reasonable
means of communication dispatched on the Conversion Date prior to 6:00 p.m., New York, New York time) and (B) subject to Section
1.4(b), surrendering this Debenture at the principal office of the Borrower.

 

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(b)  Surrender
of Debenture Upon Conversion. Notwithstanding anything to the contrary set forth herein, upon conversion of this Debenture
in accordance with the terms hereof, the Holder shall not be required to physically surrender this Debenture to the Borrower unless
the entire unpaid principal amount of this Debenture is so converted. The Holder and the Borrower shall maintain records showing
the principal amount so converted and the dates of such conversions or shall use such other method, reasonably satisfactory to
the Holder and the Borrower, so as not to require physical surrender of this Debenture upon each such conversion. In the event
of any dispute or discrepancy, such records of the Borrower shall,primafacie,
be controlling and determinative in the absence of manifest error. Notwithstanding the foregoing, if any portion of this Debenture
is converted as aforesaid, the Holder may not transfer this Debenture unless the Holder first physically surrenders this Debenture
to the Borrower, whereupon the Borrower will forthwith issue and deliver upon the order of the Holder a new Debenture of like tenor,
registered as the Holder (upon payment by the Holder of any applicable transfer taxes) may request, representing in the aggregate
the remaining unpaid principal amount of this Debenture. The Holder and any assignee, by acceptance of this Debenture, acknowledge
and agree that, by reason of the provisions of this paragraph, following conversion of a portion of this Debenture, the unpaid
and unconverted principal amount of this Debenture represented by this Debenture may be less than the amount stated on the face
hereof.

 

(c)  Payment
of Taxes. The Borrower shall not be required to pay any tax which may be payable in respect of any transfer involved in the
issue and delivery of shares of Common Stock or other securities or property on conversion of this Debenture in a name other than
that of the Holder (or in street name), and the Borrower shall not be required to issue or deliver any such shares or other securities
or property unless and until the person or persons (other than the Holder or the custodian in whose street name such shares are
to be held for the Holder’s account) requesting the issuance thereof shall have paid to the Borrower the amount of any such
tax or shall have established to the satisfaction of the Borrower that such tax has been paid.

 

(d)  Delivery
of Common Stock Upon Conversion. Upon receipt by the Borrower from the Holder of a facsimile transmission or e-mail (or other
reasonable means of communication) of a Notice of Conversion meeting the requirements for conversion as provided in this Section
1.4, the Borrower shall issue and deliver or cause to be issued and delivered to or upon the order of the Holder certificates for
the Common Stock issuable upon such conversion within three (3) business days after such receipt (the “Deadline”) (and,
solely in the case of conversion of the entire unpaid principal amount hereof, surrender of this Debenture) in accordance with
the terms hereof and the Exchange Agreement..

 

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(e) Obligation
of Borrower to Deliver Common Stock. Upon receipt by the Borrower of a Notice of Conversion, the Holder shall be deemed to
be the holder of record of the Common Stock issuable upon such conversion, the outstanding principal amount and the amount of accrued
and unpaid interest on this Debenture shall be reduced to reflect such conversion, and, unless the Borrower defaults on its obligations
under this Article I, all rights with respect to the portion of this Debenture being so converted shall forthwith terminate except
the right to receive the Common Stock or other securities, cash or other assets, as herein provided, on such conversion. If the
Holder shall have given a Notice of Conversion as provided herein, the Borrower’s obligation to issue and deliver the certificates
for Common Stock shall be absolute and unconditional, irrespective of the absence of any action by the Holder to enforce the same,
any waiver or consent with respect to any provision thereof, the recovery of any judgment against any person or any action to enforce
the same, any failure or delay in the enforcement of any other obligation of the Borrower to the holder of record, or any setoff,
counterclaim, recoupment, limitation or termination, or any breach or alleged breach by the Holder of any obligation to the Borrower,
and irrespective of any other circumstance which might otherwise limit such obligation of the Borrower to the Holder in connection
with such conversion. The Conversion Date specified in the Notice of Conversion shall be the Conversion Date so long as the Notice
of Conversion is received by the Borrower before 6:00 p.m., New York, New York time, on such date.

 

(f)  Delivery
of Common Stock by Electronic Transfer. In lieu of delivering physical certificates representing the Common Stock issuable
upon conversion, Borrower is required to be participating in the Depository Trust Borrower (“DTC”) Fast Automated Securities
Transfer (“FAST”) program, upon request of the Holder and its compliance with the provisions contained in Section 1.1
and in this Section 1.4, shall cause its transfer agent to electronically transmit the Common Stock issuable upon conversion to
the Holder by crediting the account of Holder’s Prime Broker with DTC through its Deposit Withdrawal Agent Commission (“DWAC”)
system.

 

(g) Failure
to Deliver Common Stock Prior to Deadline. Without in any way limiting the Holder’s right to pursue other remedies, including
actual damages and/or equitable relief, the parties agree that if delivery of the Common Stock issuable upon conversion of this
Debenture is not delivered by the Deadline, the Borrower shall pay to the Holder, in cash, as partial liquidated damages and not
as a penalty, for each $1,000 of shares of Common Stock issuable upon such conversion (based on the VWAP of the Common Stock on
the date such shares are submitted to the Transfer Agent) delivered, $10 per trading day (increasing to $20 per trading day fivetrading
days after such damages have begun to accrue) for each trading day after such shares were to be issued, until such certificate
is delivered. Such cash amount shall be paid to Holder by the fifth day of the month following the month in which it has accrued
or, at the option of the Holder (by written notice to the Borrower by the first day of the month following the month in which it
has accrued), shall be added to the principal amount of this Debenture, in which event interest shall accrue thereon in accordance
with the terms of this Debenture and such additional principal amount shall be convertible into Common Stock in accordance with
the terms of this Debenture. The Borrower agrees that the right to convert is a valuable right to the Holder. The damages resulting
from a failure, attempt to frustrate, interference with such conversion right are difficult if not impossible to qualify. Accordingly
the parties acknowledge that the liquidated damages provision contained in this Section 1.4(g) are justified.

 

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1.5           Concerning
the Shares. The shares of Common Stock issuable upon conversion of this Debenture may not be sold or transferred unless (i)
such shares are sold pursuant to an effective registration statement under the Act or (ii) the Borrower or its transfer agent shall
have been furnished with an opinion of counsel (which opinion shall be in form, substance and scope customary for opinions of counsel
in comparable transactions) to the effect that the shares to be sold or transferred may be sold or transferred pursuant to an exemption
from such registration or (iii) such shares are sold or transferred pursuant to Rule 144 under the Act (or a successor rule)
(“Rule 144”) or (iv) such shares are transferred to an “affiliate” (as defined in Rule 144) of the Borrower
who agrees to sell or otherwise transfer the shares only in accordance with this Section 1.5 and who is an accredited investor.
Except as otherwise provided in the Exchange Agreement (and subject to the removal provisions set forth below), until such time
as the shares of Common Stock issuable upon conversion of this Debenture have been registered under the Act or otherwise may be
sold pursuant to Rule 144 without any restriction as to the number of securities as of a particular date that can then be immediately
sold, each certificate for shares of Common Stock issuable upon conversion of this Debenture that has not been so included in an
effective registration statement or that has not been sold pursuant to an effective registration statement or an exemption that
permits removal of the legend, shall bear a legend substantially in the following form, as appropriate:

 

“NEITHER THE ISSUANCE
AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE 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 (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN A GENERALLY
ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS 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.”

 

The legend set forth
above shall be removed and the Borrower shall issue to the Holder a new certificate therefore free of any transfer legend if (i)
the Borrower or its transfer agent shall have received an opinion of counsel, in form, substance and scope customary for opinions
of counsel in comparable transactions, to the effect that a public sale or transfer of such Common Stock may be made without registration
under the Act, which opinion shall be reasonably acceptable by the Borrower so that the sale or transfer is effected or (ii) in
the case of the Common Stock issuable upon conversion of this Debenture, such security is registered for sale by the Holder under
an effective registration statement filed under the Act or otherwise may be sold pursuant to Rule 144 without any restriction as
to the number of securities as of a particular date that can then be immediately sold.In the event that the Borrower does not accept
the opinion of counsel provided by the Buyer with respect to the transfer of Securities pursuant to an exemption from registration,
such as Rule 144 or Regulation S, at the Deadline, it will be considered an Event of Default pursuant to Section 3.2 of the Debenture.

 

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1.6          Effect
of Certain Events.

 

(a) Effect
of Merger, Consolidation, Etc. At the option of the Holder, the sale, conveyance or disposition of all or substantially all
of the assets of the Borrower, the effectuation by the Borrower of a transaction or series of related transactions in which more
than 50% of the voting power of the Borrower is disposed of, or the consolidation, merger or other business combination of the
Borrower with or into any other Person (as defined below) or Persons when the Borrower is not the survivor shall be treated pursuant
to Section 1.6(b) hereof. “Person” shall mean any individual, corporation, limited liability company, partnership,
association, trust or other entity or organization.

 

(b) Adjustment
Due to Merger, Consolidation, Etc. If, at any time when this Debenture is issued and outstanding and prior to conversion of
all of the Debentures, there shall be any merger, consolidation, exchange of shares, recapitalization, reorganization, or other
similar event, as a result of which shares of Common Stock of the Borrower shall be changed into the same or a different number
of shares of another class or classes of stock or securities of the Borrower or another entity, or in case of any sale or conveyance
of all or substantially all of the assets of the Borrower other than in connection with a plan of complete liquidation of the Borrower,
then the Holder of this Debenture shall thereafter have the right to receive upon conversion of this Debenture, upon the basis
and upon the terms and conditions specified herein and in lieu of the shares of Common Stock immediately theretofore issuable upon
conversion, such stock, securities or assets which the Holder would have been entitled to receive in such transaction had this
Debenture been converted in full immediately prior to such transaction (without regard to any limitations on conversion set forth
herein), and in any such case appropriate provisions shall be made with respect to the rights and interests of the Holder of this
Debenture to the end that the provisions hereof (including, without limitation, provisions for adjustment of the Conversion Price
and of the number of shares issuable upon conversion of the Debenture) shall thereafter be applicable, as nearly as may be practicable
in relation to any securities or assets thereafter deliverable upon the conversion hereof. The Borrower shall not affect any transaction
described in this Section 1.6(b) unless (a) it first gives, to the extent practicable, twenty (20) days prior written notice (but
in any event at least fifteen (15) days prior written notice) of the record date of the special meeting of shareholders to approve,
or if there is no such record date, the consummation of, such merger, consolidation, exchange of shares, recapitalization, reorganization
or other similar event or sale of assets (during which time the Holder shall be entitled to convert this Debenture) and (b) the
resulting successor or acquiring entity (if not the Borrower) assumes by written instrument the obligations of this Section 1.6(b).
The above provisions shall similarly apply to successive consolidations, mergers, sales, transfers or share exchanges.

 

(c) Purchase
Rights. If, at any time when any Debentures are issued and outstanding, the Borrower issues any convertible securities or rights
to purchase stock, warrants, securities or other property (the “Purchase Rights”) pro rata to the record holders of
any class of Common Stock, then the Holder of this Debenture will be entitled to acquire, upon the terms applicable to such Purchase
Rights, the aggregate Purchase Rights which such Holder could have acquired if such Holder had held the number of shares of Common
Stock acquirable upon complete conversion of this Debenture (without regard to any limitations on conversion contained herein)
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.

 

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(d) Issuance
of Lower Priced Securities.If, at any time while this Debenture is outstanding, the Borrower or any subsidiary, as applicable,
sells or grants any option to purchase or sells or grants any right to reprice, or otherwise disposes of or issues (or announces
any sale, grant or any option to purchase or other disposition), any Common Stock or Common Stock equivalents entitling any Person
to acquire shares of Common Stock (other than an Exempt Issuance as defined below) at an effective price per share that is lower
than the then Conversion Price (such lower price, the “Base Conversion Price”), then the Conversion Price shall be
reduced to equal at all times the lower of the Base Conversion Price or the Conversion Price as set forth above. Such adjustment
shall be made whenever such Common Stock or Common Stock equivalents are issued (each a “Dilutive Issuance”). If the
Borrower enters into a variable rate transaction, the Borrower shall be deemed to have issued Common Stock or Common Stock equivalents
at the lowest possible conversion price at which such securities may be converted or exercised. The Borrower shall notify the Holder
in writing, no later than three (3)Trading Day following the issuance of any Common Stock or Common Stock equivalents subject to
this Section 1.6(d), indicating therein the applicable issuance price, or applicable reset price, exchange price, conversion price
and other pricing terms (such notice, the “Dilutive Issuance Notice”). For purposes of clarification, whether or not
the Borrower provides a Dilutive Issuance Notice pursuant to this Section 1.6(d), upon the occurrence of any Dilutive Issuance,
the Holder is entitled to receive a number of Conversion Shares based upon the Base Conversion Price on or after the date of such
Dilutive Issuance, regardless of whether the Holder accurately refers to the Base Conversion Price in the Notice of Conversion.

 

Exempt Issuance shall
mean the issuance of (a) shares of Common Stock or options to employees, officers, directors or consultants of the Company pursuant
to any stock or option plan or agreement duly adopted for such purpose by the Board of Directors or a majority of the members of
a committee of non-employee directors established for such purpose, (b) securities upon the exercise or exchange of or conversion
of any Securities issued hereunder and/or other securities, options, warrants, convertible securities or other rights to acquire,
exercisable or exchangeable for or convertible into, shares of Common Stock, in each case that are issued and outstanding on the
date of this Debenture, provided that such securities have not been amended since the date of this Debenture to increase the number
of such securities or to decrease the exercise, exchange or conversion price of such securities; provided that the decrease in
exercise or conversion price of existing securities pursuant to anti-dilution provisions shall trigger an adjustment pursuant to
section 1.6(d) above and shall not constitute an Exempt Issuance, (c) securities issued pursuant to acquisitions of companies,
assets or intellectual property (or licensing of assets or intellectual property) or strategic transactions approved by a majority
of the disinterested directors of the Company, provided that any such issuance shall only be to a person which is, itself or through
its subsidiaries, an operating company or a university of other non-financial institution and in which the Company receives benefits
in addition to the investment of funds, (e) securities pursuant to an underwritten public offering, (f) securities pursuant to
any agreement, credit facility, note, debenture or other instrument described in, or filed as an exhibit to any document filed
by the Company with the Securities and Exchange Commission before the date of this Debenture, or (g) securities issued or issuable
in exchange for other than cash in connection with any other transaction that is not for the primary purpose of financing the Company’s
business, but shall not include a transaction in which the Company is issuing securities primarily for the purpose of raising capital
or to an entity whose primary business is investing in securities.

 

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(e) Notice
of Adjustments. Upon the occurrence of each adjustment or readjustment of the Conversion Price as a result of the events described
in this Section 1.6, the Borrower, at its expense, shall promptly compute such adjustment or readjustment and prepare and furnish
to the Holder a certificate setting forth such adjustment or readjustment and showing in detail the facts upon which such adjustment
or readjustment is based. The Borrower shall, upon the written request at any time of the Holder, furnish to such Holder a like
certificate setting forth (i) such adjustment or readjustment, (ii) the Conversion Price at the time in effect and (iii) the number
of shares of Common Stock and the amount, if any, of other securities or property which at the time would be received upon conversion
of the Debenture.

 

1.7           Status
as Shareholder. Upon submission of a Notice of Conversion by a Holder, (i) the shares covered thereby (other than the shares,
if any, which cannot be issued because their issuance would exceed such Holder’s allocated portion of the Reserved Amount
or Maximum Share Amount) shall be deemed converted into shares of Common Stock and (ii) the Holder’s rights as a Holder of
such converted portion of this Debenture shall cease and terminate, excepting only the right to receive certificates for such shares
of Common Stock and to any remedies provided herein or otherwise available at law or in equity to such Holder because of a failure
by the Borrower to comply with the terms of this Debenture. Notwithstanding the foregoing, if a Holder has not received certificates
for all shares of Common Stock prior to the tenth (10th) Trading Day after the expiration of the Deadline with respect to a conversion
of any portion of this Debenture for any reason, then (unless the Holder otherwise elects to retain its status as a holder of Common
Stock by so notifying the Borrower) the Holder may have the option to regain the rights of a Holder of this Debenture with respect
to such unconverted portions of this Debenture and the Borrower shall, as soon as practicable, return such unconverted Debenture
to the Holder or, if the Debenture has not been surrendered, adjust its records to reflect that such portion of this Debenture
has not been converted.

 

1.8           Optional
Prepayment. At any time that this Debenture remains outstanding, upon three business days’ written notice (the “Prepayment
Notice”) to the Holder, the Borrower may pay 140% of the entire outstanding principal amount of thisDebenture, plus any accrued
but unpaid interest.  If the Borrower gives written notice of prepayment, the Holder continues to have the right to convert
principal and interest on the Debenture into Conversion Shares until three business days elapses from the Prepayment Notice.

 

1.9           Mandatory
Prepayment. If at any time while this Debenture remains outstanding, the VWAP of the Common Stock for any Trading Day shall
be equal to or less than the Floor Price (“Prepayment Event”), the Borrower shall be required to pay the Holder 140%
of the entire outstanding principal amount of thisDebenture, plus any accrued but unpaid interestno later than ten business days
after the Prepayment Event (a “Mandatory Prepayment”). In the event the Mandatory Prepayment is not made timely, the
Floor Price shall be removed.

 

    	10

    	 

    

 

Article
II. CERTAIN COVENANTS

 

2.1          Negative
CovenantsAs long as any portion of this Debenture remains outstanding, unless the holders of outstanding Debentures representing
at least a majority of the then outstanding principal amount of the Debentures shall have otherwise given prior written consent,
the Borrower shall not, and shall not permit any of its subsidiaries (whether or not a subsidiary on the Issue Date) to, directly
or indirectly:

 

(a) other
than indebtedness (x) existing as of the Initial Date, (y) to be incurred in the future that grants Liens that aresubordinate to
the Liens granted to the Holder of the Debenture, or (z) incurred in the ordinary course of business for trade expenses (not borrowed
money) (“Permitted Indebtedness”), enter into, create, incur, assume, guarantee or suffer to exist any indebtedness
for borrowed money of any kind, including, but not limited to, a guarantee, on or with respect to any of its property or assets
now owned or hereafter acquired or any interest therein or any income or profits therefrom, which indebtedness shall be senior
is respect to security to this Debenture;

 

(b) other
than Permitted Liens (as defined below), enter into, create, incur, assume or suffer to exist any liens, charges or encumbrances
of any kind or nature (“Liens”), on or with respect to any of its property or assets now owned or hereafter acquired
or any interest therein or any income or profits therefrom. “Permitted Lien” means the individual and collective reference
to the following: (a) Liens for taxes, assessments and other governmental charges or levies not yet due or Liens for taxes, assessments
and other governmental charges or levies being contested in good faith and by appropriate proceedings for which adequate reserves
(in the good faith judgment of the management of the Borrower) have been established in accordance with GAAP; (b) Liens imposed
by law which were incurred in the ordinary course of the Borrower’s business, such as carriers’, warehousemen’s
and mechanics’ Liens, statutory landlords’ Liens, and other similar Liens arising in the ordinary course of the Borrower’s
business, and which (x) do not individually or in the aggregate materially detract from the value of such property or assets or
materially impair the use thereof in the operation of the business of the Borrower and its consolidated subsidiaries or (y) are
being contested in good faith by appropriate proceedings, which proceedings have the effect of preventing for the foreseeable future
the forfeiture or sale of the property or asset subject to such Lien; (c) Liens incurred in connection with Permitted Indebtedness.

 

(c) without
the prior consent or waiver by the Holdersof outstanding Debentures representing at least a majority of the then outstanding principal
amount of the Debentures, amend its charter documents, including, without limitation, its certificate of incorporation and bylaws,
in any manner that materially and adversely affects any rights of the Holder;

 

    	11

    	 

    

 

(d) repay,
repurchase or offer to repay, repurchase or otherwise acquire more than a deminimis number of shares of its Common Stock
or Common Stock equivalents;

 

(e) repay,
repurchase or offer to repay, repurchase or otherwise acquire any indebtedness, other than the Debentures as well as Permitted
Indebtedness if on a pro-rata basis, other than regularly scheduled principal and interest payments as such terms are in effect
as of the Issue Date, provided that such payments shall not be permitted if, at such time, or after giving effect to such payment,
any Event of Default exist or occur;

 

(f)  pay
cash dividends or distributions on any equity securities of the Borrower;

 

(g) sell,
lease or otherwise dispose of all or substantially all of its assets outside the ordinary course of business, other than deminimis
sales. Any consent to the disposition of any assets may be conditioned on a specified use of the proceeds of disposition;

 

(h) so
long as the Borrower shall have any obligation under this Debenture, the Borrower shall not, without the written consentof the
Holders of outstanding Debentures representing at least a majority of the then outstanding principal amount of the Debentures,
lend money, give credit or make advances to any person, firm, joint venture or corporation, including, without limitation, officers,
directors, employees, subsidiaries and affiliates of the Borrower, except loans, credits or advances (a) in existence or committed
on the date hereof and which the Borrower has informed Holder in writing prior to the date hereof, (b) made in the ordinary course
of business or (c) not in excess of $50,000;

 

(i)  enter
into any transaction with any affiliate of the Borrower which would be required to be disclosed in any public filing with the Commission,
unless such transaction is made on an arm’s-length basis and expressly approved by a majority of the disinterested directors
of the Borrower (even if less than a quorum otherwise required for board approval); or

 

(j)  enter
into any agreement with respect to any of the foregoing.

 

2.2          Affirmative
CovenantsAs long as any portion of this Debenture remains outstanding, unless the holders of outstanding Debentures representing
at least a majority of the then outstanding principal amount of the Debentures shall have otherwise given prior written consent,
the Borrower shall:

 

(a) give
prompt written notice to the Holder of any Event of Default or of any other matter which has resulted in, or could reasonably be
expected to result in a materially adverse change in its financial condition or operations; and

 

(b) give
prompt notice to the Holder of any claim, action or proceeding which, in the event of any unfavorable outcome, would or could reasonably
be expected to have a Material Adverse Effect (as defined below) on the financial condition of the Borrower;

 

    	12

    	 

    

 

“Material Adverse
Effect” means (i) any condition, occurrence, state of facts or event having, or insofar as reasonably can be foreseen
would likely have, any material adverse effect on the legality, validity or enforceability of the Transaction Documents or the
transactions contemplated thereby, (ii) any condition, occurrence, state of facts or event having, or insofar as reasonably can
be foreseen would likely have, any effect on the business, operations, properties or financial condition of the Company that is
material and adverse to the Company and its Subsidiaries, taken as a whole, and/or (iii) any condition, occurrence, state of facts
or event that would, or insofar as reasonably can be foreseen would likely, prohibit or otherwise materially interfere with or
delay the ability of the Company to perform any of its obligations under any of the Transaction Documents to which it is a party.

 

Article
III. EVENTS OF DEFAULT

 

If any of the following
events of default (each, an “Event of Default”), which is not cured within ten (10) Trading Daysafter written notice
thereof (“Cure Period”) (other than with respect to sections 3.1 or 3.2 for which there is no Cure Period), shall occur:

 

3.1           Failure
to Pay Principal or Interest.Any default in the payment of the principal of, interest on or other charges in respect of this
Debenture, free of any claim of subordination, as and when the same shall become due and payable whether upon the Maturity Date
or by acceleration or otherwise.

 

3.2           Conversion
and the Shares.The Borrower fails to issue shares of Common Stock to the Holder (or announces or threatens in writing that
it will not honor its obligation to do so) upon exercise by the Holder of the conversion rights of the Holder in accordance with
the terms of this Debenture,fails to transfer or cause its transfer agent to transfer (issue) (electronically or in certificated
form) any certificate for shares of Common Stock issued to the Holder upon conversion of or otherwise pursuant to this Debenture
as and when required by this Debenture, the Borrower directs its transfer agent not to transfer or delays, impairs, and/or hinders
its transfer agent in transferring (or issuing) (electronically or in certificated form) any certificate for shares of Common Stock
to be issued to the Holder upon conversion of or otherwise pursuant to this Debenture as and when required by this Debenture, or
fails to remove (or directs its transfer agent not to remove or impairs, delays, and/or hinders its transfer agent from removing)
any restrictive legend (or to withdraw any stop transfer instructions in respect thereof) on any certificate for any shares of
Common Stock issued to the Holder upon conversion of or otherwise pursuant to this Debenture as and when required by this Debenture
(or makes any written announcement, statement or threat that it does not intend to honor the obligations described in this paragraph)
and any such failure shall continue uncured (or any written announcement, statement or threat not to honor its obligations shall
not be rescinded in writing) for ten (10) business days after the Deadline as defined under Section 1.4(d). It is an obligation
of the Borrower to remain current in its obligations to its transfer agent. It shall be an event of default of this Debenture,
if a conversion of this Debenture is delayed, hindered or frustrated due to a balance owed by the Borrower to its transfer agent.
If at the option of the Holder, the Holder advances any funds to the Borrower’s transfer agent in order to process a conversion,
such advanced funds shall be paid by the Borrower to the Holder within forty eight (48) hours of a demand from the Holder.

 

    	13

    	 

    

 

3.3           Breach
of Covenants. The Borrower breaches any material covenant or other material term or condition contained in this Debentureorany
collateral documents including but not limited to the Exchange Agreement and such breach continues for a period of ten (10) Trading
Days after written notice thereof to the Borrower from the Holder.

 

3.4           Breach
of Representations and Warranties. Any representation or warranty of the Borrower made herein or in any agreement, statement
or certificate given in writing pursuant hereto or in connection herewith (including, without limitation, the Exchange Agreement),
shall be false or misleading in any material respect when made and the breach of which has (or with the passage of time will have)
a material adverse effect on the rights of the Holder with respect to this Debenture or the Exchange Agreement.

 

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

 

3.6           Indebtedness
Default.The Borrower or any subsidiary of the Borrower shall default in any of its obligations under any other Debenture or
any mortgage, credit agreement or other facility, indenture agreement, factoring agreement or other instrument under which there
may be issued, or by which there may be secured or evidenced any indebtedness for borrowed money or money due under any long term
leasing or factoring arrangement of the Borrower or any subsidiary of the Borrower in an amount exceeding $50,000, whether such
indebtedness now exists or shall hereafter be created and such default shall result in such indebtedness becoming or being declared
due and payable prior to the date on which it would otherwise become due and payable.

 

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3.7           Delisting
of Common Stock; DTC Chill. The Borrower shall fail to maintain the listing of the Common Stock on the Trading Market or the
Depository Trust Company places a chill on new deposits of Common Stock.

 

3.8           Failure
to Comply with the Exchange Act. The Borrower shall fail to comply with the reporting requirements of the Exchange Act with
regards to the filing of Form 10-Q's and 10-K's; and/or the Borrower shall cease to be subject to the reporting requirements of
the Exchange Act.

 

3.9           Liquidation. Any
dissolution, liquidation, or winding up of Borrower or any substantial portion of its business.

 

3.10         Cessation
of Operations. Any cessation of operations by Borrower or Borrower admits it is otherwise generally unable to pay its debts
as such debts become due, provided, however, that any disclosure of the Borrower’s ability to continue as a “going
concern” shall not be an admission that the Borrower cannot pay its debts as they become due.

 

3.11         Maintenance
of Assets. The failure by Borrower to maintain any assets which are necessary to conduct its business (whether now or in the
future).

 

3.12         Financial
Statement Restatement. Other than those existing as of the date hereof, the restatement of any financial statements filed by
the Borrower with the SEC for any date or period from two years prior to the Issue Date of this Debenture and until this Debenture
is no longer outstanding, if the result of such restatement would, by comparison to the unrestated financial statement, have constituted
a Material Adverse Effect on the rights of the Holder with respect to this Debenture or the Exchange Agreement.

 

3.13         Replacement
of Transfer Agent. In the event that the Borrower proposes to replace its transfer agent, the Borrower fails to provide, prior
to the effective date of such replacement, a fully executed Irrevocable Transfer Agent Instructions in a form as initially delivered
pursuant to the Exchange Agreement (including but not limited to the provision to irrevocably reserve shares of Common Stock in
the Reserved Amount) signed by the successor transfer agent to Borrower and the Borrower.

 

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Upon the occurrence and during the continuation
of any Event of Default that is not cured within the Cure Period specified in Section 3.1 (solely with respect to failure to pay
the principal hereof or interest thereon when due at the Maturity Date), the Debenture shall become immediately due and payable
and the Borrower shall pay to the Holder, in full satisfaction of its obligations hereunder, an amount equal to the Default Sum
(as defined herein). Upon the occurrence and during the continuation of any Event of Default the Debenture shall become immediately
due and payable and the Borrower shall pay to the Holder, in full satisfaction of its obligations hereunder, an amount equal to
150%times the sum of (w) the then outstanding principal amount of this Debentureplus (x) accrued and unpaid
interest on the unpaid principal amount of this Debenture to the date of payment (the “Mandatory Prepayment Date”)
plus (y) Default Interest, if any, on the amounts referred to in clauses (w) plus (z) any amounts owed to the Holder
pursuant to Sections 1.3 and 1.4(g) hereof (the then outstanding principal amount of this Debenture to the date of payment plus
the amounts referred to in clauses (x), (y) and (z) shall collectively be known as the “Default Sum”) and all other
amounts payable hereunder shall immediately become due and payable, all without demand, presentment or notice, all of which hereby
are expressly waived, together with all costs, including, without limitation, legal fees and expenses, of collection, and the Holder
shall be entitled to exercise all other rights and remedies available at law or in equity. 

 

If the Borrower fails
to pay the Default Sum within five (5) business days of written notice that such amount is due and payable, then the Holder shall
have the right at any time, so long as the Borrower remains in default (and so long and to the extent that there are sufficient
authorized shares), to require the Borrower, upon written notice, to immediately issue, in lieu of the Default Sum, the number
of shares of Common Stock of the Borrower equal to the Default Sum divided by the Conversion Price then in effect.

 

Article
IV. MISCELLANEOUS

 

4.1           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 privileges. All rights and remedies existing hereunder are cumulative
to, and not exclusive of, any rights or remedies otherwise available.

 

4.2           Notices.
All notices, demands, requests, consents, approvals, and other communications required or permitted hereunder shall be in writing
and, unless otherwise specified herein, shall be (i) personally served, (ii) deposited in the mail, registered or certified, return
receipt requested, postage prepaid, (iii) delivered by reputable air courier service with charges prepaid, or (iv) transmitted
by hand delivery, telegram, or facsimile, addressed as set forth below or to such other address as such party shall have specified
most recently by written notice. Any notice or other communication required or permitted to be given hereunder shall be deemed
effective (a) upon hand delivery or delivery by facsimile, with accurate confirmation generated by the transmitting facsimile machine,
at the address or number designated below (if delivered on a business day during normal business hours where such notice is to
be received), or the first business day following such delivery (if delivered other than on a business day during normal business
hours where such notice is to be received) or (b) on the second business day following the date of mailing by express courier service,
fully prepaid, addressed to such address, or upon actual receipt of such mailing, whichever shall first occur. The addresses for
such communications shall be:

 

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If to the
Borrower, to:

 

Inergetics, Inc.

550 Broad Street, Suite 1212

Newark, NJ 07102

Attn: Michael C. James

Telephone: (908) 604-2500

e-mail: mjames@inergetics.com

 

If to the Holder:

 

To its registered address

 

4.3           Amendments.
This Debenture and any provision hereof may only be amended by an instrument in writing signed by the Borrower and the Holder.
The term “Debenture” and all reference thereto, as used throughout this instrument, shall mean this instrument (and
the other Debentures issued pursuant to the Exchange Agreement) as originally executed, or if later amended or supplemented, then
as so amended or supplemented.

 

4.4           Assignability.
This Debenture shall be binding upon the Borrower and its successors and assigns, and shall inure to be the benefit of the Holder
and its successors and assigns. This Debenture may be assigned in whole or in part, without the consent of the Borrower to any
Person that is an “accredited investor” as that term is defined in Rule 501 of Regulation D under the Securities Act
of 1933, as amended. Notwithstanding anything in this Debenture to the contrary, this Debenture may be pledged as collateral in
connection with a bonafide margin account or other lending arrangement.

 

4.5           Cost
of Collection. If default is made in the payment of this Debenture, the Borrower shall pay the Holder hereof costs of collection,
including reasonable attorneys’ fees.

 

4.6           Governing
Law.This Debenture shall be governed by and construed in accordance with the laws of the State of New York without regard to
principles of conflicts of laws. Any action brought by either party against the other concerning the transactions contemplated
by this Debenture shall be brought only in the state courts of New York or in the federal courts located in the state and county
of Nassau. The parties to this Debenture hereby irrevocably waive any objection to jurisdiction and venue of any action instituted
hereunder and shall not assert any defense based on lack of jurisdiction or venue or based upon forum non conveniens. The
Borrower and Holder waive trial by jury. The prevailing party shall be entitled to recover from the other party its reasonable
attorney's fees and costs. In the event that any provision of this Debenture or any other agreement delivered in connection herewith
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
any agreement. Each party hereby irrevocably waives personal service of process and consents to process being served in any suit,
action or proceeding in connection with this Agreement or any other Transaction Document by mailing a copy thereof via registered
or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under
this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing
contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law.

 

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4.7           Certain
Amounts. Whenever pursuant to this Debenture the Borrower is required to pay an amount in excess of the outstanding principal
amount (or the portion thereof required to be paid at that time) plus accrued and unpaid interest plus Default Interest on such
interest, the Borrower and the Holder agree that the actual damages to the Holder from the receipt of cash payment on this Debenture
may be difficult to determine and the amount to be so paid by the Borrower represents stipulated damages and not a penalty and
is intended to compensate the Holder in part for loss of the opportunity to convert this Debenture and to earn a return from the
sale of shares of Common Stock acquired upon conversion of this Debenture at a price in excess of the price paid for such shares
pursuant to this Debenture. The Borrower and the Holder hereby agree that such amount of stipulated damages is not plainly disproportionate
to the possible loss to the Holder from the receipt of a cash payment without the opportunity to convert this Debenture into shares
of Common Stock.

 

4.8           Exchange
Agreement. By its acceptance of this Debenture, each party agrees to be bound by the applicable terms of the Exchange Agreement.

 

4.9           Notice
of Corporate Events. Except as otherwise provided below, the Holder of this Debenture shall have no rights as a Holder of Common
Stock unless and only to the extent that it converts this Debenture into Common Stock. The Borrower shall provide the Holder with
prior notification of any meeting of the Borrower’s shareholders (and copies of proxy materials and other information sent
to shareholders). In the event of any taking by the Borrower of a record of its shareholders for the purpose of determining shareholders
who are entitled to receive payment of any dividend or other distribution, any right to subscribe for, purchase or otherwise acquire
(including by way of merger, consolidation, reclassification or recapitalization) any share of any class or any other securities
or property, or to receive any other right, or for the purpose of determining shareholders who are entitled to vote in connection
with any proposed sale, lease or conveyance of all or substantially all of the assets of the Borrower or any proposed liquidation,
dissolution or winding up of the Borrower, the Borrower shall mail a notice to the Holder, at least twenty (20) days prior to the
record date specified therein (or thirty (30) days prior to the consummation of the transaction or event, whichever is earlier),
of the date on which any such record is to be taken for the purpose of such dividend, distribution, right or other event, and a
brief statement regarding the amount and character of such dividend, distribution, right or other event to the extent known at
such time. The Borrower shall make a public announcement of any event requiring notification to the Holder hereunder substantially
simultaneously with the notification to the Holder in accordance with the terms of this Section 4.9.

 

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4.10         Remedies.
The Borrower acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Holder, by vitiating
the intent and purpose of the transaction contemplated hereby. Accordingly, the Borrower acknowledges that the remedy at law for
a breach of its obligations under this Debenture will be inadequate and agrees, in the event of a breach or threatened breach by
the Borrower of the provisions of this Debenture, that the Holder shall be entitled, in addition to all other available remedies
at law or in equity, and in addition to the penalties assessable herein, to an injunction or injunctions restraining, preventing
or curing any breach of this Debenture and to enforce specifically the terms and provisions thereof, without the necessity of showing
economic loss and without any bond or other security being required.

 

4.11         Severability.
If any provision of this Debenture is invalid, illegal or unenforceable, the balance of this Debenture shall remain in effect,
and if any provision is inapplicable to any person or circumstance, it shall nevertheless remain applicable to all other persons
and circumstances. If it shall be found that any interest or other amount deemed interest due hereunder shall violate applicable
laws governing usury, the applicable rate of interest due hereunder shall automatically be lowered to equal the maximum permitted
rate of interest. The Borrower covenants (to the extent that it may lawfully do so) that it shall not at any time insist upon,
plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury law or other law which
would prohibit or forgive the Borrower from paying all or any portion of the principal of or interest on this Debenture as contemplated
herein, wherever enacted, now or at any time hereafter in force, or which may affect the covenants or the performance of this indenture,
and the Borrower (to the extent it may lawfully do so) hereby expressly waives all benefits or advantage of any such law, and covenants
that it will not, by resort to any such law, hinder, delay or impeded the execution of any power herein granted to the Holder,
but will suffer and permit the execution of every such as though no such law has been enacted.

 

(Signature Pages Follow)

 

    	19

    	 

    

 

IN WITNESS WHEREOF,
Borrower has caused this Debenture to be signed in its name by its duly authorized officer this 21st day of May, 2014.

 

INERGETICS, INC.

 

	By:	/s/ Michael C. James	 
	Name:	Michael C. James	 
	Title:	Chief Executive Officer	 
	 	Chief Financial Officer	 

 

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EXHIBIT A

 

CONVERSION NOTICE

 

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

  

	TO: 

 

The undersigned hereby
irrevocably elects to convert $________________________ of the principal amount of Debenture No. ___________ into Shares of Common Stock of
INERGETICS, INC., according to the conditions stated therein, as of the Conversion Date written below.

 

	Conversion Date:	 	 	 	 
	Amount to be converted:	 	$	 	 
	Conversion Price:	 	$	 	 
	Number of shares of Common Stock to be issued:	 	 	 	 
	
        Amount of Note

        Unconverted:
	 	$	 	 
	 	 	 	 	 
	Please issue the shares of Common Stock in the following name and to the following address:	 
	Issue to:	 	 	 	 
	 	 	 	 	 
	Authorized Signature:	 	 	 	 
	Name:	 	 	 	 
	Title:	 	 	 	 
	Broker DTC Participant Code:	 	 	 	 
	Account Number:	 	 	 	 

 

    	21

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