Document:

Exhibit 4.1

 

NEITHER THIS WARRANT, NOR THE SECURITIES ISSUABLE UPON EXERCISE OF THIS
WARRANT (COLLECTIVELY, THE “SECURITIES”), HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), OR UNDER ANY STATE SECURITIES OR BLUE SKY LAWS. THE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND
RESALE AND MAY NOT BE OFFERED, SOLD, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED EXCEPT AS PERMITTED UNDER THE SECURITIES ACT
AND APPLICABLE STATE SECURITIES OR BLUE SKY LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. THE COMPANY MAY REQUIRE AN OPINION
OF COUNSEL IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO THE COMPANY TO THE EFFECT THAT ANY PROPOSED TRANSFER IS IN COMPLIANCE
WITH THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES OR BLUE SKY LAWS. THIS WARRANT IS SUBJECT TO THE TRANSFER RESTRICTIONS
SET FORTH HEREIN.

 

CARBON NATURAL GAS COMPANY

 

Warrant to
Purchase Common Stock

 

Warrant No.: ___

Date of Issuance: April 3, 2017 (“Issuance Date”)

 

Carbon Natural Gas Company,
a Delaware corporation (the “Company”), certifies that, for good and valuable consideration, the receipt and
sufficiency of which are acknowledged, ______________________________________, the registered holder hereof or its permitted assigns
(the “Holder”), is entitled, subject to the terms set forth below, to purchase from the Company, at the Exercise
Price (as defined below) then in effect, upon surrender of this Warrant to Purchase Common Stock (including any Warrants to Purchase
Common Stock issued in exchange, transfer or replacement hereof, the “Warrant”) at any time on or after the
Issuance Date, but not after 6:30 p.m., New York Time, on the Expiration Date (as defined below), a number of fully paid and nonassessable
shares of Common Stock (the “Warrant Shares”) determined, as of the time of exercise, by dividing
(a) the aggregate Priority Amount attributable to the Class A Units of Carbon Appalachian Company, LLC, a Delaware limited liability
company (“CAC LLC”), then held by the Holder by (b) the Exercise Price. As of the Issuance Date, the number
of Warrant Shares purchasable under this Warrant is 408,334, based on the initial aggregate Priority Amount of the Class A Units
of CAC LLC held by the Holder of $2,940,000 (which is equal to the initial capital contribution by the Holder to CAC LLC in such
amount on the Issuance Date) and the current Exercise Price of $7.20. The number of Warrant Shares purchasable upon exercise of
this Warrant will change as the Priority Amounts of the Class A Units change, and such number of Warrant Shares and the Exercise
Price shall be subject to certain other adjustments from time to time as provided herein. Except as otherwise defined herein,
capitalized terms in this Warrant shall have the meanings set forth in Section 16.

 

1.             EXERCISE OF WARRANT.

 

(a)             Mechanics
of Exercise.  Subject to the terms and conditions hereof, this Warrant may be exercised by the Holder on any day
on or after the Issuance Date, in whole or in part (but not as to fractional shares), by delivery of a written notice, in the
form attached hereto as Exhibit A (the “Exercise Notice”), of the Holder’s election to exercise
this Warrant. In consideration of the exercise of the Warrant, the Holder shall transfer and assign to the Company a number of
Class A Units of CAC LLC having an aggregate Priority Amount equal to the applicable Exercise Price multiplied by the number of
Warrant Shares as to which this Warrant is being exercised (the “Aggregate Exercise Price”). Only whole Class
A Units of CAC LLC may be used to pay the Aggregate Exercise Price in connection with any exercise of this Warrant. The term “Exercise
Delivery Documents” as used herein refers to the Exercise Notice and the assignment agreement and
other documents necessary to transfer the applicable number of Class A Units of CAC LLC from the Holder to the Company.

 

     

     

    

 

The Holder shall not be required
to surrender this Warrant in order to effect an exercise hereunder; provided, however, that in the event that this
Warrant is exercised in full or for the remaining unexercised portion hereof, the Holder shall deliver this Warrant to the Company
for cancellation within a reasonable time after such exercise.   On or before the third Trading Day following the date
on which the Company has received all of the Exercise Delivery Documents (the “Share Delivery Date”), the Company
shall deliver (or cause the Company’s transfer agent for the Common Stock (the “Transfer Agent”) to deliver)
to the Holder a certificate representing the number of shares of Common Stock issuable to the Holder upon such exercise of the
Warrant. The certificate shall contain the legend set forth in Section 15 until such time as the legend may be removed in accordance
with Section 15. Upon delivery of the Exercise Notice, the Holder shall be deemed for all corporate purposes to have become the
holder of record of the Warrant Shares with respect to which this Warrant has been exercised, irrespective of the date of delivery
of the Warrant Shares to such Holder.  If this Warrant is submitted in connection with any exercise pursuant to this
Section 1(a) and the number of Warrant Shares represented by this Warrant submitted for exercise is greater than the number of
Warrant Shares being acquired upon an exercise, then the Company shall as soon as practicable and in no event later than three
Trading Days after any such submission and at its own expense, issue a new Warrant (in accordance with Section 6(e)) representing
the right to purchase the number of Warrant Shares purchasable immediately prior to such exercise under this Warrant, less the
number of Warrant Shares with respect to which this Warrant has been and/or is being exercised.  The Company shall pay
any and all taxes and other expenses of the Company (including overnight delivery charges) that may be payable with respect to
the issuance and delivery of Warrant Shares upon exercise of this Warrant; provided, however, that the Company shall
not be required to pay any tax which may be payable in respect of any transfer involved in the registration of any certificates
for Warrants or Warrant Shares in a name other than that of the Holder or an Affiliate thereof.  The Holder shall be
responsible for all other tax liability that may arise as a result of holding or transferring this Warrant or receiving Warrant
Shares upon exercise hereof.

 

(b)              Exercise Price.  For purposes of this Warrant, “Exercise Price” means $7.20 per share
of Common Stock, subject to adjustment as provided herein.

 

(c)             No Fractional Shares or Scrip.  No fractional shares or scrip representing fractional shares shall be issued
upon the exercise of this Warrant.  As to any fraction of a share that the Holder would otherwise be entitled to purchase
upon such exercise, the Company shall round up to the next whole share.

 

2.             ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF WARRANT SHARES.  The Exercise Price and the number of Warrant
Shares shall be adjusted from time to time as follows:

 

(a)             Adjustment upon Subdivision or Combination of Shares of Common Stock.  If the Company at any time on or
after the Issuance Date subdivides (by any stock split, stock dividend, recapitalization or otherwise) one or more classes of its
outstanding shares of Common Stock into a greater number of shares, the Exercise Price in effect immediately prior to such subdivision
will be proportionately reduced and the number of Warrant Shares then purchasable under this Warrant will be proportionately increased
in accordance with the formula set forth in the first paragraph of this Warrant.  If the Company at any time on or after
the Issuance Date combines (by combination, reverse stock split or otherwise) one or more classes of its outstanding shares of
Common Stock into a smaller number of shares, the Exercise Price in effect immediately prior to such combination will be proportionately
increased and the number of Warrant Shares then purchasable under this Warrant will be proportionately decreased in accordance
with the formula set forth in the first paragraph of this Warrant.  Any adjustment under this Section 2(a) shall become
effective at the close of business on the date the subdivision or combination becomes effective.

 

(b)             Adjustment upon Dividends by the Company. In the event that the Company declares a dividend on its Common Stock during
the term of this Warrant, the Exercise Price shall be reduced by the amount per share of such dividend payable to holders of Common
Stock, and the number of Warrant Shares then purchasable under this Warrant will be increased in accordance with the formula set
forth in the first paragraph of this Warrant. The Company shall deliver to the Holder written notice of the declaration of any
dividends at least 10 calendar days prior to the record date established for purposes of determining the holders of Common Stock
entitled to receive such dividend, or, if no such record date is established, the date as of which the record holders of shares
of Common Stock are determined for the issuance of such dividends.

 

(c)             Par Value. Notwithstanding anything to the contrary in this Warrant, in no event shall the Exercise Price be reduced
below the par value of the Company’s Common Stock.

 

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(d)             Adjustment upon Distributions by CAC LLC. For the avoidance of doubt, if CAC LLC makes any distributions to the Holder
with respect to its Class A Units during the term of this Warrant, the Priority Amount of such Class A Units shall be reduced pursuant
to the terms of the LLC Agreement and the number of Warrant Shares purchasable under this Warrant shall be reduced in accordance
with the formula set forth in the first paragraph of this Warrant, by virtue of a decrease in the aggregate Priority Amount of
the Class A Units of CAC LLC held by the Holder as a result of such distributions, and there shall be no adjustment in the Exercise
Price. The Company shall cause CAC LLC to deliver to the Holder prior written notice of any distribution in respect of its Class
A Units in CAC LLC, at least 10 calendar days prior to the record date established for purposes of determining the holders of Class
A Units entitled to receive such distributions, or, if no such record date is established, the date as of which the record holders
of Class A Units are determined for the issuance of such distributions.

 

(e)             Adjustment upon Additional Capital Contributions to CAC LLC. For the avoidance of doubt, if the Holder makes any
additional capital contributions to CAC LLC after the Issuance Date with respect to its Class A Units, the Priority Amount of such
Class A Units shall be increased pursuant to the terms of the LLC Agreement and the number of Warrant Shares purchasable under
this Warrant shall be increased in accordance with the formula set forth in the first paragraph of this Warrant, by virtue of an
increase in the aggregate Priority Amount of the Class A Units of CAC LLC held by the Holder as a result of such contributions,
and there shall be no adjustment in the Exercise Price.

 

3.             FUNDAMENTAL TRANSACTIONS.

 

(a)             If, at any time while this Warrant is outstanding, there occurs any Fundamental Transaction (including, without limitation,
one 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), then the Holder shall have the right thereafter to receive, upon exercise of this Warrant,
in lieu of the shares of the Common Stock (or other securities, cash assets or other property purchasable upon the exercise of
the Warrant prior to such Fundamental Transaction), the same amount and kind of shares of stock, securities, cash, assets or any
other property whatsoever (including warrants or other purchase or subscription rights) that the Holder would have been entitled
to receive upon the consummation of such Fundamental Transaction had this Warrant been exercised immediately prior to the record
date for such Fundamental Transaction, as adjusted in accordance with the provisions of this Warrant. Upon the occurrence of any
Fundamental Transaction, the Successor Entity, if any, shall succeed to, and be substituted for (so that from and after the date
of such Fundamental Transaction, the provisions of this Warrant 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 Warrant with the same effect as if such Successor Entity had been named as the Company herein. The provisions of this
Section 3 shall apply similarly and equally to successive Fundamental Transactions and any adjustment under this Section 3 shall
be without duplication for any adjustment or distribution made under Section 2.

 

(b)             In the event that the Company at any time 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 shares of Common Stock (the “Purchase
Rights”) 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
exercise of this Warrant (without regard to any limitations on the exercise of this Warrant), immediately before the record date
for the grant, issuance or sale of such Purchase Rights, or, if no such record date is established, the date as of which the record
holders of shares of Common Stock are determined for the grant, issuance or sale of such Purchase Rights.

 

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4.             RESERVATION OF WARRANT SHARES.  The Company covenants that it will at all times reserve and keep available
out of the aggregate of its authorized but unissued and otherwise unreserved Common Stock, solely for the purpose of enabling it
to issue Warrant Shares upon exercise of this Warrant as herein provided, the number of shares of Common Stock which are then issuable
and deliverable upon the exercise of this entire Warrant, free from preemptive or any other contingent purchase rights of Persons
other than the Holder (taking into account the adjustments in Sections 2 and 3).  The Company covenants that all shares of
Common Stock so issuable and deliverable shall, upon issuance and the payment of the applicable Exercise Price in accordance with
the terms hereof, be duly and validly authorized, issued and fully paid and nonassessable.  The Company will take all
such actions as may be necessary to assure that such shares of Common Stock may be issued as provided herein without violation
of any applicable law or regulation, or of any requirements of any securities exchange or automated quotation system upon which
the Common Stock may be listed. If, notwithstanding the foregoing, and not in limitation thereof, at any time while this Warrant
remains 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 exercise of this Warrant at least a number of shares of Common Stock equal to the maximum
number of shares of Common Stock as shall from time to time be necessary to effect the exercise of all this Warrant (without regard
to any limitations on exercise contained herein) (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 this entire Warrant. 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.

 

5.             WARRANT HOLDER NOT DEEMED A STOCKHOLDER; LIMITATION ON LIABILITY.  Except as otherwise specifically provided
herein, the Holder, solely in such Person’s capacity as a holder of this Warrant, shall not be entitled to vote or receive
dividends or be deemed the holder of share capital of the Company for any purpose, nor shall anything contained in this Warrant
be construed to confer upon the Holder, solely in such Person’s capacity as the Holder of this Warrant, any of the rights
of a stockholder of the Company or any right to vote, give or withhold consent to any corporate action (whether any reorganization,
issue of stock, reclassification of stock, consolidation, merger, conveyance or otherwise), receive notice of meetings, receive
dividends or subscription rights, or otherwise, prior to the issuance to the Holder of the Warrant Shares which such Person is
then entitled to receive upon the due exercise of this Warrant.  In addition, nothing contained in this Warrant shall
be construed as imposing any liabilities on the Holder to purchase any securities (upon exercise of this Warrant or otherwise)
or as a stockholder of the Company, whether such liabilities are asserted by the Company or by creditors of the Company.

 

6.             REGISTRATION AND REISSUANCE OF WARRANTS.

 

(a)             Registration of Warrant.  The Company shall register this Warrant, upon the records to be maintained by
the Company for that purpose (the “Warrant Register”), in the name of the record Holder hereof from time to
time.  The Company may deem and treat the registered Holder of this Warrant as the absolute owner hereof for the purpose
of any exercise hereof or any distribution to the Holder, and for all other purposes, absent actual notice to the contrary.  The
Company shall also register any transfer, exchange, reissuance or cancellation of any portion of this Warrant in the Warrant Register.

 

(b)             Transfer of Warrant.  This Warrant shall be transferable in connection with a transfer of the Holder’s
Class A Units of CAC LLC. In the event of any transfer of such Class A Units, the Holder shall transfer to the transferee of such
Class A Units a portion of this Warrant representing the right to purchase a number of whole Warrant Shares having an Aggregate
Exercise Price equal, at the time of the transfer, to the aggregate Priority Amount of the Class A Units being transferred. Except
as provided in the preceding two sentences, this Warrant may not be offered for sale, sold, transferred or assigned without the
consent of the Company, and only in accordance with applicable securities laws.  Subject to applicable securities laws,
if this Warrant is to be transferred, the Holder shall surrender this Warrant to the Company together with all applicable transfer
taxes, whereupon the Company shall forthwith issue and deliver upon the order of the Holder a new Warrant (in accordance with Section
6(e)), registered as the Holder may request, representing the right to purchase the number of Warrant Shares being transferred
by the Holder and, if less than the total number of Warrant Shares then underlying this Warrant is being transferred, a new Warrant
(in accordance with Section 6(e)) to the Holder representing the right to purchase the number of Warrant Shares not being transferred.

 

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(c)             Lost, Stolen or Mutilated Warrant.  Upon receipt by the Company of evidence reasonably satisfactory to
the Company of the loss, theft, destruction or mutilation of this Warrant, and, in the case of loss, theft or destruction, of any
indemnification undertaking by the Holder to the Company in customary form or the provision of reasonable security by the Holder
to the Company and, in the case of mutilation, upon surrender and cancellation of this Warrant, the Company shall execute and deliver
to the Holder a new Warrant (in accordance with Section 6(e)) representing the right to purchase the Warrant Shares then underlying
this Warrant.

 

(d)             Exchangeable for Multiple Warrants.  This Warrant is exchangeable, upon the surrender hereof by the Holder
at the principal office of the Company together with all applicable transfer taxes, for a new Warrant or Warrants (in accordance
with Section 6(e)) representing in the aggregate the right to purchase the number of Warrant Shares then underlying this Warrant,
and each such new Warrant will represent the right to purchase such portion of such Warrant Shares as is designated by the Holder
at the time of such surrender; provided, however, that the Company shall not be required to issue Warrants for fractional
shares of Common Stock hereunder.

 

(e)             Issuance of New Warrants.  Whenever the Company is required to issue a new Warrant pursuant to the terms
of this Warrant, such new Warrant shall (i) be of like tenor with this Warrant, (ii) represent, as indicated on the face of such
new Warrant, the right to purchase the Warrant Shares then underlying this Warrant (or in the case of a new Warrant being issued
pursuant to Section 6(b) or Section 6(c), the Warrant Shares designated by the Holder which, when added to the number of shares
of Common Stock underlying the other new Warrants issued in connection with such issuance, does not exceed the number of Warrant
Shares then underlying this Warrant), (iii) have an issuance date, as indicated on the face of such new Warrant which is the same
as the Issuance Date and (iv) have the same rights and conditions as this Warrant.

 

7.             NOTICES.  Whenever notice is required to be given under this Warrant, unless otherwise provided herein,
such notice shall be given in accordance with the information set forth in the Warrant Register.  The Company shall provide
the Holder with prompt written notice of all actions taken pursuant to this Warrant, including, in reasonable detail, a description
of such action and the reason or reasons therefor.  Without limiting the generality of the foregoing, the Company will
give written notice to the Holder immediately upon any adjustment of the Exercise Price or the number of Warrant Shares purchasable
under this Warrant, setting forth in reasonable detail, and certifying, the calculation of such adjustment (but, in each case,
only to the extent such disclosure would not result in the dissemination of material, non-public information to the Holder).

 

8.             NONCIRCUMVENTION.  The Company hereby covenants and agrees that the Company will not, by amendment of its
Certificate of Incorporation, Bylaws 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 Warrant, and will at all times in good faith carry out all the provisions of this Warrant and take all
action as may be required to protect the rights of the Holder.  Without limiting the generality of the foregoing, the
Company (i) shall not increase the par value of any shares of Common Stock receivable upon the exercise of this Warrant above
the Exercise Price then in effect, (ii) shall use all reasonable efforts to 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 exercise of
this Warrant and (iii) shall, so long as any of the Warrants 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 exercise of the Warrants, the
Required Reserve Amount. If the Company is restricted by the rules of the Principal Market from issuing and delivering the Warrant
Shares or any portion thereof without prior approval of the holders of the issued and outstanding voting capital stock of the Company,
then the Company shall, upon exercise hereof, issue the maximum number of Warrant Shares permissible under the applicable rules
of the Principal Market and, upon request of the Holder, use its best efforts to obtain the approval of the requisite holders of
the issued and outstanding voting capital stock of the Company required by such rules for any remaining amount of Warrant Shares.
Without limiting the foregoing, in connection with the initial application for listing of its Common Stock on a Principal Market
that has rules of the type contemplated by the preceding sentence that might reasonably be expected to restrict the number of Warrant
Shares that the Holder can purchase without stockholder approval, the Company shall, upon request of the Holder, seek the prior
approval of the holders of its voting capital stock for the issuance of all Warrant Shares issuable and that may become issuable
under this Warrant, at the earliest of any special meeting of shareholders held in connection with such listing or a related transaction
or the first annual meeting of shareholders held after the decision to apply for listing of the Common Stock on such Principal
Market has been made.

 

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9.             AMENDMENT AND WAIVER.  Except as otherwise provided herein, the provisions of this Warrant may be amended
and the Company may take any action herein prohibited, or omit to perform any act herein required to be performed by it, only if
the Company has obtained the written consent of the Holder.  

 

10.             GOVERNING LAW.  This Warrant shall be governed by and construed and enforced in accordance with, and all
questions concerning the construction, validity, interpretation and performance of this Warrant shall be governed by, the internal
laws of the State of Delaware, without giving effect to any choice of law or conflict of law provision or rule (whether of the
State of Delaware or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the
State of Delaware.

 

11.             CONSTRUCTION; HEADINGS.  This Warrant 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 Warrant are for convenience
of reference and shall not form part of, or affect the interpretation of, this Warrant.

 

12.             DISPUTE RESOLUTION.  In the case of a dispute as to the determination of the Exercise Price or the number
of Warrant Shares purchasable under this Warrant, the Company shall submit the disputed determinations via facsimile within two
Trading Days of receipt of the Exercise Notice giving rise to such dispute to the Holder.  If the Holder and the Company
are unable to agree upon such determination or calculation of the Exercise Price or the Warrant Shares within five Trading Days
of such disputed determination being submitted to the Holder, then the Company shall, within two Trading Days submit via facsimile
the disputed determination of the Exercise Price or the number of Warrant Shares to an independent, outside accountant.  The
Company shall cause the accountant to perform the determinations and notify the Company and the Holder of the results no later
than 10 Trading Days from the time it receives the disputed determinations.  Such accountant’s determination shall
be binding upon all parties absent demonstrable error.  The expenses of the accountant will be borne by the Company unless
the accountant determines that the Holder failed to act in good faith in its determination of the Exercise Price or the number
of Warrant Shares, in which case the expenses of the accountant will be borne by the Holder.

 

13.             REMEDIES, OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE RELIEF.  The remedies provided in this Warrant shall
be cumulative and in addition to all other remedies available under this Warrant, at law or in equity (including a decree of specific
performance and/or other injunctive relief), and nothing herein shall limit the right of the Holder to pursue actual damages for
any failure by the Company to comply with the terms of this Warrant.  The Company acknowledges that a breach by it of
its obligations hereunder may 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 of this Warrant shall be entitled,
in addition to all other available remedies, to seek an injunction restraining any breach, without the necessity of posting bond
or other security.

 

14.             SUCCESSORS AND ASSIGNS.  This Warrant shall bind and inure to the benefit of and be enforceable by the
Company and the Holder and their respective permitted successors and assigns.

 

15.             REPRESENTATIONS; LEGENDS.

 

(a)             The Holder represents that this Warrant is being acquired, and the Warrant Shares issuable upon exercise hereof will be
acquired, for investment for the Holder’s own account and not with a view to the resale or distribution thereof. The preceding
sentence, however, shall be without prejudice to the Holder’s right at any time to sell or otherwise dispose of this Warrant
or the Warrant Shares or any potion thereof in compliance with applicable federal and state securities laws and any restrictions
on transfer set forth herein, and shall not be deemed a representation by the Holder that it will hold, nor an agreement to hold,
all or any portion of this Warrant or the Warrant Shares for any particular period of time.

 

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(b)             The Holder understands that the Warrant and the Warrant Shares issuable and deliverable upon exercise of this Warrant have
not been registered pursuant to the provisions of the Securities Act, and the Warrant or Warrant Shares will bear the following
restrictive legend (in addition to any legend required under applicable state securities laws):

 

THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR UNDER ANY STATE SECURITIES OR BLUE SKY LAWS. THE SECURITIES ARE SUBJECT TO RESTRICTIONS
ON TRANSFERABILITY AND RESALE AND MAY NOT BE OFFERED, SOLD, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED EXCEPT AS PERMITTED
UNDER THE SECURITIES ACT AND APPLICABLE STATE SECURITIES OR BLUE SKY LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. THE
COMPANY MAY REQUIRE AN OPINION OF COUNSEL IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO THE COMPANY TO THE EFFECT THAT ANY PROPOSED
TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES OR BLUE SKY LAWS.

 

The Company, at its sole cost, shall remove the legend
described in this Section 15 (or instruct the Transfer Agent to so remove such legend) from the certificates evidencing the Warrant
and Warrant Shares if (A) such Warrant Shares are sold pursuant to an effective registration statement under the Securities Act,
(B) such Warrant or Warrant Shares, as applicable, are sold or transferred pursuant to Rule 144 (if the transferor is not an Affiliate
of the Company), or (C) such Warrant or Warrant Shares, as applicable, are eligible for sale under Rule 144, without the requirement
for the Company to be in compliance with the current public information required under Rule 144(c)(1) (or Rule 144(i)(2), if applicable)
as to such securities and without volume or manner of sale restrictions. In connection with a sale of the Warrant or Warrant Shares,
as applicable, by any Holder in reliance on Rule 144, such Holder or its broker shall deliver to the Transfer Agent and the Company
a customary broker representation letter providing to the Transfer Agent and the Company any information the Company deems reasonably
necessary to determine that the sale of the Warrant or Warrant Shares, as applicable, is made in compliance with Rule 144, including,
where and as may be appropriate, a certification that such Holder is not an Affiliate of the Company and regarding the length of
time the Warrant or Warrant Shares, as applicable, have been held. Upon receipt of such representation letter, the Company shall
promptly remove or cause the Transfer Agent to remove the legend referred to in this Section 15 from the certificates evidencing
the Warrant and Warrant Shares, in each case within two (2) Business Days, and the Company shall bear all costs associated therewith.
If a Holder is not an Affiliate of the Company and has held the Warrant or Warrant Shares, as applicable, for at least one year,
if the certificates evidencing such Warrant or Warrant Shares still bears the legend referred to in this Section 15, the Company
agrees, upon request of the Holder, to take all steps necessary to effect the removal of the legend described in this Section 15
within two (2) Business Days from the certificates evidencing the Warrant and Warrant Shares, and the Company shall bear all costs
associated therewith, regardless of whether the request is made in connection with a sale or otherwise, so long as the Holder provides
to the Company any information the Company deems reasonably necessary to determine that the legend is no longer required under
the Securities Act or applicable state laws.

 

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

 

(a)             “Affiliate” means, with respect to any Person, any other Person that directly or indirectly through one
or more intermediaries controls, is controlled by or is under common control with, the Person in question. As used herein, the
term “control” means the possession, direct or indirect, of the power to direct or cause the direction of the management
and policies of a Person, whether through ownership of voting securities, by contract or otherwise.

 

(b)             “Business Day” means any day except Saturday, Sunday or any other day on which commercial banks located
in New York, New York are authorized or required by law to be closed for business.

 

(c)             “Common Stock” means (i) the Company’s shares of Common Stock, $0.01 par value per share, and (ii)
any share capital into which such Common Stock shall have been changed or any share capital resulting from a reclassification of
such Common Stock.

 

(d)             “Demand Registration Rights” means the right of the Holder to require the Company to effect a registration
of all or part of the Registrable Securities held by the Holder on a registration statement on Form S-1 (or on Form S-3, if available)
under the Securities Act and to register or qualify such Registrable Securities under the appropriate state securities or “blue
sky” laws in connection therewith.

 

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

 

(f)             “Expiration Date” means the seventh anniversary of the Issuance Date or, if such date falls on a day
other than a Trading Day or on which trading does not take place 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 (a “Holiday”), the next date that is not a Holiday.  

 

(g)             “Fundamental Transaction” means that, after the Issuance Date, the Company shall, directly or indirectly,
in one or more related transactions, (i) consolidate or merge with or into another Person, (ii) sell, assign, transfer, convey
or otherwise dispose of all or substantially all of the properties or assets of the Company to another Person, (iii) allow another
Person to make a purchase, tender or exchange offer that is accepted by the holders of more than 50% of the outstanding shares
of Common Stock (not including any shares of Common Stock 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), (iv) consummate a stock purchase agreement or other
business combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with
another Person whereby such other Person acquires more than 50% of the outstanding shares of Common Stock (not including any shares
of Common Stock 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 purchase agreement or other business combination immediately prior to such stock purchase or business
combination), (v) reorganize, recapitalize or reclassify its Common Stock, or (vi) any “person” or “group”
(as these terms are used for purposes of Sections 13(d) and 14(d) of the Exchange Act), other than the Holder and its Affiliates
or any Related Party thereof, is or shall become the “beneficial owner” (as defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of 50% or more of the aggregate ordinary voting power represented by issued and outstanding Common
Stock (excluding any debt securities convertible into equity) normally entitled to vote in the election of directors (“Voting
Stock”) of the Company (or its successor by merger, consolidation or purchase of all or substantially all of its assets)
(for purposes of this clause, such person or group shall be deemed to beneficially own any Voting Stock held by an Affiliate) or
50% or more of the aggregate economic interests in the Company (or its successor by merger, consolidation or purchase of all or
substantially all of its assets).

 

(h)             “LLC Agreement” means the Limited Liability Company Agreement of CAC LLC dated as of February 23, 2017,
as amended from time to time.

 

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

 

(j)             “Piggyback Rights” means the right of the Holder to require the Company to include the Holder’s
Registrable Securities in any registration statement to be filed under the Securities Act by the Company with respect to any of
its equity securities for its own account (other than a registration statement on Form S 4 or Form S-8 or any successor or substantially
similar form) or for the account of any other holders of its equity securities.

 

(k)             “Principal Market” means the OTCQB operated by the OTC Markets Group, Inc.; provided, however,
that in the event that the Company’s Common Stock is ever listed or traded on the Nasdaq Capital Market, Nasdaq Global Market,
the Nasdaq Global Select Market, the New York Stock Exchange, the NYSE Amex, or the OTC Bulletin Board (it being understood that
as used herein “OTC Bulletin Board” shall also mean any successor or comparable market quotation system or exchange
to the OTC Bulletin Board), then the “Principal Market” shall mean such other market or exchange on which the Company’s
Common Stock is then listed or traded.

 

(l)             “Priority Amount” shall have the meaning given to such term in the LLC Agreement. If this Warrant were
exercised on the Issuance Date, the Priority Amount of each Class A Unit of CAC LLC held by the Holder and used for purposes of
paying the Aggregate Exercise Price for such exercise would be $1,000, which is the purchase price paid by the Holder for each
such Class A Unit on the Issuance Date. Thereafter, the Priority Amount of each Class A Unit of CAC LLC used by the Holder to pay
the Aggregate Exercise Price in connection with an exercise of this Warrant, and the aggregate Priority Amount of all Class A Units
held by the Holder, for purposes of determining the number of Warrant Shares purchasable under this Warrant at the time of such
exercise, shall be determined in accordance with the terms of the LLC Agreement, as if a cash distribution on the Class A Units
of CAC LLC were being made pursuant to Section 5.4(a) of the LLC Agreement on the date of such exercise.

 

    	 	8	 

     

    

 

(m)             “Registrable Securities” means the Warrant Shares purchasable under this Warrant and any shares of Common
Stock or other equity securities of the Company that may hereafter be issued or issuable with respect to the Warrant Shares by
way of a stock dividend or stock split or in connection with a combination of shares, recapitalization, merger, consolidation,
reorganization or similar transaction.

 

(n)             “Related Party” means, with respect to any specified Person, such Person’s Affiliates and the respective
directors, officers, employees, agents and advisors of such Person and of such Person’s Affiliates.

 

(o)             “Securities Act” means the Securities Act of 1933, as amended.

 

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

 

(q)             “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 including any day on which the Principal Market is open for trading for a period of time
less than the customary time.

 

17.             REGISTRATION RIGHTS.

 

(a)             The Holder shall be entitled to no fewer than three (3) Demand Registration Rights on Form S-1 (and an unlimited number
of Demand Registration Rights on Form S-3, if available), which Demand Registration Rights may be exercised at any time; provided,
that such Demand Registration Rights may not be exercised by the Holder more than two (2) times in any three hundred sixty-five
(365) day period.

 

(b)             The Holder shall be entitled to unlimited Piggyback Rights (provided, however, that such Piggyback Rights shall be
subject to the “cutback” provisions described in this Section 17).

 

(c)             The Company shall bear all costs of any shelf or underwritten registration (other than underwriters’ discounts and
commissions relating to the Holder’s Registrable Securities sold thereunder), including the legal expenses of counsel to
represent the Holder in any such offering.

 

(d)             Upon request by the Holder, the Company shall execute and deliver to the Holder an agreement setting forth the registration
rights contemplated by this Section 17 and establishing procedures and including such terms and conditions, reasonably satisfactory
to the Holder, as are customary in registration rights agreements, including provisions in respect of (i) an indemnity by the Company
in favor of the Holder, (ii) underwriters’ “cutbacks” (pursuant to which, if in the case of the exercise of any
Piggyback Right (as described in clause (b) above), the managing underwriter advises the Company that the inclusion of all Registrable
Securities required to be included in such offering would have an adverse effect on the price of the underwritten Registrable Securities,
the underwriters may exclude from such offering the number of Registrable Securities to the extent necessary to eliminate such
adverse effect), (iii) “blackout” periods and (iv) “lockups”.

 

(e)             The Holder shall have the registration rights contemplated by this Section 17 during the period from the Issuance Date through
the Expiration Date and thereafter until all Registrable Securities (i) have been sold by the Holder under an effective registration
statement or pursuant to Rule 144 adopted under the Securities Act or (ii) have become freely tradable without restriction, including
any manner-of-sale requirement or restriction on the number of shares that may be sold during any period of time, under Rule 144.

 

[Signature Page Follows]

 

    	 	9	 

     

    

 

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

 

	 	CARBON
    NATURAL GAS COMPANY
	 	 	 
	 	By:	 
	 	 	Patrick
    R. McDonald
	 	 	Chief
    Executive Officer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

WARRANT – Signature Page

 

     

     

    

 

EXHIBIT A

 

EXERCISE NOTICE

 

TO BE EXECUTED BY THE REGISTERED HOLDER TO EXERCISE
THIS

WARRANT TO PURCHASE COMMON STOCK

 

CARBON NATURAL GAS COMPANY

 

The undersigned holder hereby exercises the right to purchase _________________
shares of Common Stock (“Warrant Shares”) of Carbon Natural Gas Company, a Delaware corporation (the “Company”),
evidenced by the attached Warrant to Purchase Common Stock (the “Warrant”).  Capitalized terms used
herein and not otherwise defined shall have the respective meanings set forth in the Warrant.

 

1.            Exercise Price. The Holder shall transfer ______________ Class A Units of CAC LLC to the Company in accordance with the
terms of the Warrant.

 

2.            Delivery of Warrant Shares.  The Company shall deliver to the holder __________ Warrant Shares in accordance with
the terms of the Warrant.

 

3.            Representations and Warranties.  By its delivery of this Exercise Notice, the undersigned represents and warrants
to the Company that the Holder is in compliance with the representation in Section 15(a) of this Warrant to which this notice relates
with respect to the Warrant Shares.

 

Date: _______________ __, ______

 

		 	
	Name of Registered Holder	 	Name of Signatory

 

	By:		 
	Name:		 
	Title:		 

 

     

     

    

 

ACKNOWLEDGMENT

 

The Company hereby acknowledges
this Exercise Notice.

 

	 	CARBON NATURAL GAS COMPANY
	 	 	 
	 	By:	      
	 	Name:	
	 	Title:EX-10.1

 Exhibit 10.1 

SECURED CONVERTIBLE PROMISSORY NOTE 

(this “Note”) 
  

			
	Up to $2,500,000	 	April 3, 2017

 FOR VALUE RECEIVED, the undersigned Provectus Biopharmaceuticals, Inc., a Delaware corporation (the
“Borrower”), hereby promises to pay to the order of Cal Enterprises LLC, a Nevada limited liability company (the “Lender”), at the Lender’s office located at 1930 Village Center Circle,
#3-206, Las Vegas, Nevada 89144 or at such other place as the Lender may designate to the Borrower in writing from time to time, the principal sum set forth in Paragraph A below, or, if less, so much
thereof as is outstanding hereunder, in lawful money of the United States of America and in immediately available funds, and to pay interest on said principal sum or the unpaid balance thereof, in like money at said office. Capitalized terms used in
this Note but not immediately defined shall have the meanings set forth in Paragraph N below. 
 A. Principal. This Note is one
of a series of notes, all of equal par herewith, arranged by the PRH Group up to a maximum principal amount of up to Twenty Million and no/100 Dollars ($20,000,000) (the “PRH Financing”). This Note shall be the first tranche of the PRH
Financing under the Term Sheet. This Note shall have a maximum principal amount of up to Two Million Five Hundred Thousand and no/100 Dollars ($2,500,000.00), which shall be disbursed to Borrower as follows: 

(i) Upon (a) delivery of the First Tranche Funding Certificate of Borrower attached hereto as Exhibit A by the Borrower to the
Lender, and (b) acceptance of the First Tranche Funding Certificate by the Lender, which shall be in the sole discretion of the Lender, the Lender shall pay into Escrow the principal sum of Two Million Five Hundred Thousand and no/100 Dollars
($2,500,000.00) (the “First Tranche”). At any time following the deposit of the First Tranche into Escrow, Borrower may request the funding of any portion of the First Tranche by delivering to the Lender an irrevocable borrowing request
(“Borrowing Request”), which Borrowing Request is in the form attached hereto as Exhibit B, and which must be received by the Lender prior to 12:00 p.m. Eastern Time five (5) Business Days prior to the requested borrowing date
(“Borrowing Date”); provided, that if the Borrowing Request is the first draw down on the First Tranche, the Borrower shall also deliver to Borrower a First Draw Certificate attached hereto as Exhibit C. 

(ii) Upon receipt of any Borrowing Request, to the extent the Lender has the funds available to pay the requested borrowing, the Lender shall
pay to the order of the Borrower the entire requested borrowing under such Borrowing Request by making available such requested borrowing to Borrower prior to 3:00 p.m. Eastern Time on the Borrowing Date in funds immediately available;
provided, that the funding of such requested borrowing shall be subject to the sole approval of the Lender, which shall not be unreasonably withheld. 

(iii) All amounts of interest that accrue to any amounts held in Escrow shall inure to the benefit of the Lender. 

  
 1 

 B. Interest 

Interest on this Note shall accrue on the outstanding principal amount hereof at a rate equal to eight percent (8%) per annum, calculated on
the basis of a 365-day year (the “Interest Rate”). 
 C. Payment Terms; Prepayment.
Except as set forth in Paragraph E(ii) below, Payments on this Note shall be applied in the following order: first to accrued but unpaid interest and second to principal. If any payment on this Note becomes due and payable on a day other than
a Business Day, the payment date thereof shall be extended to the next succeeding Business Day. Principal and interest under this Note may be pre-paid in whole or in part at any time without premium or other
prepayment charge. 
 D. Attorney Fees. The Borrower also agrees to pay the Lender for its reasonable legal and other expenses,
including reasonable attorneys’ fees, incurred in connection with the transactions contemplated under this Note within five (5) Business Days of the First Tranche being funded to the Borrower; provided, that Borrower has received
final invoices from the providers of such services. 
 E. Events of Default; Remedies. 

(i) The Borrower shall be deemed to be in default under this Note if: (a) the Borrower fails to pay, when due, any payment of principal
or interest under this Note, which continues for a period of ten (10) days after the due date of such payment, (b) any action commenced by or against the Borrower under the Federal Bankruptcy Code, or other statute for the relief of
creditors, which is not dismissed within sixty (60) days except for the PRH Group as contemplated in the Term Sheet, (c) a Change of Control in the Borrower, or (d) liquidation of the Borrower. 

(ii) Upon an event of default, the Lender, at his option, may (a) allow this Note to remain outstanding and continue to accrue interest
at the Interest Rate or (b) declare the outstanding principal balance of and all accrued but unpaid interest on this Note to be immediately due and payable. Further, if the event of default is as a result of a Change of Control, in addition to
the right to declare the outstanding principal balance of and all accrued but unpaid interest on this Note to be immediately due and payable, the Lender shall (1) be entitled to be paid all financing received by the Borrower under this Note
from and after the date of such Change of Control, whether such financing is by the issuance of equity, debt or a combination of both, before such financing is used for any other purpose (“Change of Control Payments”) and (2) be
entitled to receive a penalty payment from the Borrower equal to ten times (10x) the outstanding principal amount under this Note as of the date of such Change of Control (the “Change of Control Penalty”). Any amounts received by the
Lender as Change of Control Payments shall be applied in the following order: first to the Change of Control Penalty, second to accrued but unpaid interest and third to principal. 

F. Use of Proceeds. Any amount disbursed under this Note may be used to fund the completion of the Borrower’s clinical development
program as currently conducted and as modified in the future by the Board of Directors with the Lender’s approval and for general corporate and administrative expenses approved by the Lender, which approval, in each case, will not be
unreasonably withheld. 

  
 2 

 G. Conversion. 

(i) Voluntary Conversion. The Lender may elect to convert all of the outstanding principal and accrued but unpaid interest of this Note
at any time into Series D Shares. If the Lender elects to effect a conversion of this Note into Series D Shares, the Lender shall: (a) deliver a copy of the fully executed notice of conversion in the form attached hereto as Exhibit D (a
“Notice of Conversion”) to the Borrower and (b) surrender or cause to be surrendered this Note with delivery of the Notice of Conversion. On the Voluntary Conversion Date, the Borrower shall issue and deliver to the Lender
confirmation of the number of Series D Shares that have been issued to the Lender upon conversion of this Note, which number of Series D Shares shall be calculated by dividing the Conversion Amount on the Voluntary Conversion Date by the Conversion
Price. The Lender shall be treated for all purposes as the record holder of such Series D Shares at 12:01 am Eastern Time on the Voluntary Conversion Date and such Series D Shares shall be issued and outstanding as of such date. The Note will be
deemed terminated on the Voluntary Conversion Date, and no interest will be deemed to accrue on or after the close of business on the Voluntary Conversion Date. 

(ii) Automatic Conversion. In the event that any amount of principal and accrued but unpaid interest remains outstanding on the
Automatic Conversion Date, then such amount of the outstanding principal due under this Note plus all accrued but unpaid interest shall automatically convert into such number of Series D Shares equal to (a) the Conversion Amount on the
Automatic Conversion Date divided by (b) the Conversion Price effective as of 12:01 am Eastern Time on the Automatic Conversion Date. If this Note is to be automatically converted, prompt written notice shall be delivered to the Lender at the
address last shown on the records of the Borrower, notifying the Lender of the conversion to be effected. Upon such conversion of this Note, the Lender hereby agrees to surrender or cause to be surrendered this Note, duly endorsed, as soon as
practicable thereafter. The Note will be deemed terminated on the Automatic Conversion Date, and no interest will be deemed to accrue on or after the Automatic Conversion Date. 

(iii) No Fractional Shares. No fractional Series D Shares are to be issued upon the conversion of this Note, but instead of any
fraction of a Series D Share which would otherwise be issuable, the fraction of such Series D Share shall be rounded up to the nearest whole share. 

(iv) Insufficient Series D Shares. Notwithstanding the foregoing, if this Note is converted, whether voluntarily or automatically under
the terms hereof, and the number of authorized but unissued Series D Shares are insufficient to permit the conversion of the Conversion Amount in full, Borrower will take such corporate action as may, in the opinion of its counsel, be necessary to
increase its authorized but unissued Series D Shares to such number of shares as shall be sufficient for such purposes. Until Borrower is able to effectuate such corporate action, Series D Shares shall be issued to the Lender in an amount equal to
the amount of authorized but unissued Series D Shares available for issuance, and the portion of the Conversion Amount that remains unissued shall continue to be outstanding principal and accrued but unpaid interest of the Note. 

H. Maturity Date. 

This Note, including interest and principal, shall be due and payable in full (i) on such date upon which the Borrower defaults under
this Note (beyond the applicable notice and cure periods), (ii) upon a Change of Control of the Borrower, or (iii) the twenty-four (24) month anniversary of the funding of the Final Tranche, the earliest of such dates being the
“Maturity Date”. 

  
 3 

 I. Security Interest. 

(i) As collateral security for the full and timely payment of the principal, interest and other amounts owing under this Note and the
performance of the Borrower under this Note, Borrower hereby assigns, conveys, delivers and grants to the Lender a general and continuing first priority security interest in the Intellectual Property of the Borrower (including any Subsidiary) now
existing and all Records of the Borrower and the proceeds of any of the foregoing (the “Security Interest”), which Security Interest shall be pari passu with all other notes arranged by the PRH Group. 

(ii) The Security Interest granted hereunder shall automatically terminate, without any action of the Borrower or the Lender, upon the
occurrence of any of the following events: 
  

	 	(a)	a voluntary conversion of the Note under Paragraph G; 

  

	 	(b)	an automatic conversion of the Note under Paragraph G; and 

  

	 	(c)	the failure of the Lender (i) to fund the entire First Tranche into Escrow following the Borrower’s delivery of the First Tranche Funding Certificate. 

J. Cumulative Remedies; No Waiver. The Lender’s rights and remedies under this Note are cumulative and in addition to all
rights and remedies provided by applicable law from time to time. The exercise or direction to exercise by the Lender of any right or remedy shall not constitute a cure or waiver of any default, nor invalidate any notice of default or any act done
pursuant to any such notice, nor prejudice the Lender in the exercise of any other rights or remedy. No waiver of any default shall be implied from any omission by the Lender to take action on account of such default if such default persists or is
repeated. No waiver of any default shall affect any default other than the default expressly waived, and any such waiver shall be operative only for the time and to the extent stated. No waiver of any provision of this Note shall be construed as a
waiver of any subsequent breach of the same provision. The consent of the Lender to any act by the Borrower requiring further consent or approval shall not be deemed to waive or render unnecessary the Lender’s consent to or approval of any
subsequent act. The Lender’s acceptance of the late performance of any obligation shall not constitute a waiver by the Lender of the right to require prompt performance of all further obligations. The Lender’s acceptance of any performance
following the sending or filing of any notice of default shall not constitute a waiver of the Lender’s right to proceed with the exercise of remedies for any unfulfilled obligations, and the Lender’s acceptance of any partial performance
shall not constitute a waiver by the Lender of any rights relating to the unfulfilled portion of the applicable obligation. 
 K. No
Usury. Nothing herein contained, nor any transaction related hereto, shall be construed or so operate as to require the Borrower to pay interest in an amount or at a rate greater than the maximum allowed by applicable law. Should any
interest or other charged paid by the Borrower result in computation or earning of interest in excess of the maximum legal rate of interest permitted 

  
 4 

 
under the law in effect while said interest is being earned, then any and all of that excess shall be and is waived by the Lender, and all that excess shall be automatically credited against and
in reduction of the principal balance, and any portion of the excess that exceeds the principal balance shall be paid by the Lender to the Borrower so that under no circumstances shall the Borrower be required to pay interest in excess of the
maximum rate allowed by applicable law. 
 L. Jurisdiction; Waiver of Jury Trial. 

(i) THIS NOTE SHALL BE GOVERNED BY THE INTERNAL LAWS OF THE STATE OF TENNESSEE EXCEPT TO THE EXTENT SUPERSEDED BY FEDERAL LAW. THE BORROWER
HEREBY CONSENTS TO THE EXCLUSIVE JURISDICTION OF ANY STATE OR FEDERAL COURT LOCATED IN KNOX COUNTY, TENNESSEE AND WAIVES ANY OBJECTION BASED ON FORUM NON CONVENIENS WITH REGARD TO ANY ACTIONS, CLAIMS, DISPUTES OR PROCEEDINGS RELATING TO THIS NOTE,
OR ANY TRANSACTION RELATING TO OR ARISING FROM THIS NOTE, OR ENFORCEMENT AND/OR INTERPRETATION OF ANY OF THE FOREGOING. NOTHING HEREIN SHALL LIMIT THE LENDER’S RIGHT TO BRING PROCEEDINGS AGAINST THE BORROWER IN THE COMPETENT COURTS OF ANY OTHER
JURISDICTION. 
 (ii) THE BORROWER AND THE LENDER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT EITHER MAY HAVE TO A TRIAL
BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS NOTE OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER WRITTEN OR VERBAL) OR ACTIONS OF EITHER PARTY. THIS PROVISION IS A MATERIAL
INDUCEMENT FOR THE BORROWER AND THE LENDER FOR ENTERING INTO THIS AGREEMENT. 
 M. Miscellaneous. 

(i) TIME IS OF THE ESSENCE WITH RESPECT TO THIS NOTE. 

(ii) This Note may not be changed orally, but only by an agreement in writing, signed by the party against whom enforcement of any waiver,
change, modification or discharge is sought. 
 (iii) The Borrower hereby waives presentment for payment, demand, notice, protest, notice of
protest and notice of dishonor. 
 N. Definitions. The following terms used in this Note shall have the following meanings: 

“Affiliate” means, with respect to any Person that directly or indirectly, through one or more intermediaries, Controls, or is
controlled by, or is under common control with, such Person. 
 “Automatic Conversion Date” means the 18-month anniversary of the funding of the Final Tranche; provided, that the Automatic Conversion Date (i) shall be extended if, at the time of such 18-month
anniversary date, a lawsuit is pending or threatened against the Borrower with respect to this Note, and shall be extended until the resolution of such lawsuit, (ii) shall 

  
 5 

 
be extended if the Borrower’s proxy contest with the Culpepper Group is ongoing on such 18-month anniversary date until the date such proxy contest is
finalized in favor of the Borrower, and (iii) shall never be deemed to occur if the Borrower ever loses the proxy contest to the Culpepper Group or any other group of investors led by Peter Culpepper or an Affiliate of the Culpepper Group or
Peter Culpepper. 
 “Board of Directors” means the Board of Directors of the Borrower. 

“Business Day” means each Monday, Tuesday, Wednesday, Thursday or Friday on which banking institutions are not authorized or
obligated by law, regulation or executive order to close in Knoxville, Tennessee. 
 “Change of Control” means, unless
otherwise approved in writing by the PRH Group, the occurrence after the date hereof of any of (a) an acquisition after the date hereof by an individual or legal entity or “group” (as described in Rule 13d 5(b)(1) promulgated under
the 1934 Act) of effective control (whether through legal or beneficial ownership of capital stock of the Borrower, by contract or otherwise) of in excess of 33% of the voting securities of the Borrower (other than by means of conversion or exercise
of Series D Shares and any other securities issued together with such Series D Shares), (b) the Borrower merges into or consolidates with any other Person, or any Person merges into or consolidates with the Borrower and, after giving effect to such
transaction, the stockholders of the Borrower immediately prior to such transaction own less than 66% of the aggregate voting power of the Borrower or the successor entity of such transaction, (c) the Borrower sells or transfers all or
substantially all of its assets to another Person and the stockholders of the Borrower immediately prior to such transaction own less than 66% of the aggregate voting power of the acquiring entity immediately after the transaction, (d) a
replacement at one time or within a one year period of more than one half of the members of the Board of Directors on the date hereof except for directors appointed or approved by PRH Group, or (e) the execution by the Borrower of an agreement
to which the Borrower is a party or by which it is bound, providing for any of the events set forth in clauses (a) through (d) above. 

“Controls” (including the terms “controlling”, “controlled by”, and “under common control with”)
means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise. 

“Conversion Amount” means (a) the entire principal amount of this Note, plus (b) all accrued and unpaid interest.

 “Conversion Price” means $0.2862. 

“Culpepper Group” means that certain group composed of Peter Culpepper and such other director nominees listed in that certain
definitive Schedule 14A proxy statement filed with the Securities and Exchange Commission on January 27, 2017 and as may be subsequently amended or reconstituted. 

  
 6 

 “Escrow” means one or more accounts agreed upon by the Borrower and the Lender
to hold the amounts to be funded to the Borrower pursuant to the terms of this Note. 
 “Final Tranche” shall mean the
earlier of: (i) the date of the funding of a Borrowing Request that results in $20,000,000 in principal outstanding with respect to the PRH Financing or (ii) the date on which the Lender informs the Borrower that it shall not disburse any
additional funds to the Borrower hereunder; provided, however, that the Lender shall have funded to the Borrower at least $10,000,000 under this Note. 

“Intellectual Property” means all of Borrower’s United States federal and state rights, title and interest, if any, in
and to (1) the applications and registrations listed on Exhibit E attached hereto and (2) to the extent not already included on Exhibit E, all existing inventions, designs, patent applications and patents; trademarks, service
marks, trade dresses, and any applications and registrations for the foregoing; copyrights and copyright applications and registrations; trade secrets; licenses to third-party intellectual property that lawfully may be assigned by Borrower; and
other intellectual property rights in the United States (whether or not registered) owned by Borrower. 
 “Person” means an
individual, corporation, partnership, limited liability company, trust, business trust, association, joint stock company, joint venture, sole proprietorship, unincorporated organization, governmental authority or any other form of entity not
specifically listed herein. 
 “PRH Group” means that group of investors led by Dominic Rodrigues, Bruce Horowitz and Ed
Pershing pursuant to the terms of the Term Sheet. 
 “Records” means, to the extent related to the Intellectual Property of
the Borrower, all books, correspondence, files, records, invoices and other papers and documents in Borrower’s possession or custody, including without limitation to the extent so related, all tapes, cards, computer runs, computer programs, and
other papers and documents in possession or control of Borrower or any computer bureau from time to time acting for Borrower, whether in physical or electronic formats. 

“Series D Shares” means shares of Series D Convertible Preferred Stock, par value $0.001 per share, of the Borrower. 

“Subsidiary” means, with respect to any Person, any other Person of which at least a majority of the securities or ownership
interests having by their terms voting power to elect a majority of the directors, managers or other persons performing similar functions is directly or indirectly owned or controlled by such Person or by one or more of its respective Subsidiaries.

 “Term Sheet” means Amended and Restated Confidential Definitive Financing Commitment Term Sheet dated effective
March 19, 2017 (the “Term Sheet”) by and between the Borrower, Dominic Rodrigues and Bruce Horowitz. 

  
 7 

 “Voluntary Conversion Date” means the date which is three (3) Business Days
following the date the Notice of Conversion is delivered to the Borrower. 
 [Signatures contained on next page.] 

  
 8 

 
			
	PROVECTUS BIOPHARMACEUTICALS, INC.

 
			
	
	  

	Name:	 	Timothy C. Scott
	Title:	 	President

  

			
	STATE OF TENNESSEE	  	)
		  	) ss.
	COUNTY OF KNOX	  	)

 Before me, the undersigned authority, on this day personally appeared Timothy C. Scott, President of Provectus
Biopharmaceuticals, Inc., and such person is known to me to be the person whose name is subscribed to the foregoing instrument, and upon his oath acknowledged to me that he executed the same for the purposes and consideration therein expressed and
in the capacity therein stated. 
 Given under my hand and seal of office this      day of March, 2017. 

 

	
	  

	Notary Public
	
	(SEAL)

  

			
	My commission expires:	 	  

  
 9 

 Exhibit A 

First Tranche Funding Certificate 

(See Attached) 

 FIRST TRANCHE FUNDING CERTIFICATE 

OF 
 PROVECTUS
BIOPHARMACEUTICALS, INC. 
 March [●], 2017 

The undersigned, in his capacity as the President of Provectus Biopharmaceuticals, Inc., a Delaware corporation (the
“Borrower”), hereby delivers this First Tranche Funding Certificate on behalf of the Borrower pursuant to that Secured Convertible Promissory Note dated as of the date hereof (the “Note”) made by the Borrower payable to
Cal Enterprises LLC, a Nevada limited liability company (the “Lender”). Capitalized terms used but not otherwise defined herein shall have the respective meanings ascribed to them in the Note. 

The undersigned certifies on behalf of the Borrower, and not in any individual capacity (and without personal liability), that, as of the date
hereof: 
  

	 	1.	Eric Wachter has funded the balance of his $2,500,000 loan to the Borrower. 

  

	 	2.	The Borrower has provided to the Lender all requested information regarding the financial requirements of the Borrower’s clinical development program and operating capital needs. 

 

	 	3.	The Borrower has provided to the Lender all requested information regarding the Borrower’s ownership of the Intellectual Property of the Borrower free and clear of all liens, claims and encumbrances.

  

	 	4.	The Borrower has provided to the Lender the Note and such other documents required by the Lender and to the Lender’s legal counsel with respect to the loan evidenced by the Note. 

 

	 	5.	There have been no changes to the management of the Borrower or the Borrower’s Board since the date of the Term Sheet. 

  

	 	6.	Effective March 17, 2017, the Borrower cancelled and terminated its public rights offering, and, to the Borrower’s actual knowledge, all monies deposited with Broadridge, Maxim and/or or any other securities
firm have been returned to the investors. 

  

	 	7.	The Borrower covenants that it will provide to the Lender any additional documentation reasonably requested by the Lender to further evidence that the Borrower has terminated its relationship with Maxim Group
relationship effective March 31, 2017 with no 30-day extension. 

  

	 	8.	 (i) Alfred E. Smith, IV, Timothy C. Scott and Kelly McMasters have tendered their resignations as directors
effective immediately following the filing of the Borrower’s Annual Report on Form 10-K with the Securities and Exchange Commission (the “SEC”) so long as the First Tranche has been funded into
Escrow on such date, and (ii) the Board has adopted resolutions effective immediately following the filing of the Borrower’s Annual Report on Form 10-K with the SEC so long as the First Tranche has
been funded into Escrow on such 

  
 1 

	 	
date: (a) nominating and appointing Bruce Horowitz and Dominic Rodrigues as directors to replace the vacancies created by the resignations of Al Smith, Tim Scott and Kelly McMasters,
(b) reducing the size of the Board to four (4) directors until such time as the Lender’s third director has been appointed and (c) appointing Dominic Rodrigues as the chairman of the Board. 

 

	 	9.	Each of Eric Wachter, Timothy C. Scott and John Glass hereby certify that they will remain continuously employed by the Borrower until the funding and disbursement of the First Tranche to the Borrower unless otherwise
determined by the Board. 

  

	 	10.	The Borrower has publicly announced via press release a summary of the terms of the Term Sheet. 

  

	 	11.	Since the date of the Term Sheet, the Borrower has not (i) entered into any new personnel contracts or extended any existing material contracts; (ii) recapitalized the equity securities of the Borrower;
(iii) reclassified or amended any existing securities of the Borrower; (iv) encumbered or created any form of indebtedness except as contemplated by Section 1 above and the Note; (v) created any form of lien or other security
interest on any of the Borrower’s Intellectual Property except as described in the Note; (vi) entered into any contingent financing arrangement with other financing sources or (vii) hired any officers, employees, consultants or
advisors. 

  

	 	12.	The Borrower has arranged to continue to include Alfred E. Smith, IV, Timothy C. Scott, and Kelly McMasters under the Borrower’s long-term D&O liability insurance coverage following their respective
resignations from the Board. 

  

	 	13.	The Borrower has arranged to place all the new directors of the Borrower appointed to the Board pursuant to the terms of the Term Sheet and the Note under any and all current and planned D&O insurance policies of
the Borrower. 

  

	 	14.	The Board has adopted and approved director indemnification agreements approved by the Lender to be entered into by Bruce Horowitz, Dominic Rodrigues and Edward Pershing upon their respective appointments to the Board.

  

	 	15.	Except as has been publicly disclosed in the Borrower’s filings with the SEC, there are no (a) lawsuits pending or, to the actual knowledge of the Borrower, threatened against the Borrower, except (i) for
any action that may result from the Borrower’s actions against Dr. H. Craig Dees and Mr. Peter Culpepper in response to the Borrower’s actions against such individuals as described in the Term Sheet and the Borrower’s filing
with the SEC and (ii) for the lawsuit filed by Porter, LeVay & Rose, Inc., (b) administrative or government investigations into the Borrower except for the SEC investigation currently being conducted and (c) actual or, to the
actual knowledge of the Borrower, threatened conflicts with, or violation of, any statute, rule, regulation or standard applicable to the Borrower, its present or future operations, or the Borrower’s products and/or services. The Borrower
covenants to notify the Lender in writing of any of the actions listed in items (a) through (c) above filed or threatened against the Borrower within 48 hours of the Borrower’s receipt of notice of such an action. 

  
 2 

*     *     *     *     * 

[Signature page follows] 

  
 3 

 IN WITNESS WHEREOF, the undersigned has executed this First Tranche Funding Certificate as
of the date first written above. 
  

			
	PROVECTUS BIOPHARMACEUTICALS, INC.

 
			
		
	By:	 	  

	Name:	 	Timothy C. Scott
	Title:	 	President
	
	PROVECTUS PHARMATECH, INC.
		
	By:	 	  

	Name:	 	
	Title:	 	
	
	PROVECTUS BIOTECH, INC.
		
	By:	 	  

	Name:	 	
	Title:	 	
	
	PURE-IFIC CORP.
		
	By:	 	  

	Name:	 	
	Title:	 	

  
 4 

 The undersigned individuals join this Certificate, and hereby certify, with respect to the
certification made to the Lender in Section 9 above only in their individual capacities. 
  

			
	By:	 	  

	Name:	 	Eric A. Wachter
		
	By:	 	  

	Name:	 	Timothy C. Scott
		
	By:	 	  

	Name:	 	John R. Glass

  
 5 

 Exhibit B 

Form of Borrowing Request 

(See Attached) 

  
 Exhibit B 

 BORROWING REQUEST 

[DATE] 
  

			
	Cal Enterprises LLC
	  

	  

	Telephone:	 	  

			
	Email:	 	  

  

	 	Re:	Borrowing under that certain Secured Convertible Promissory Note dated March [●], 2017 issued by Provectus Biopharmaceuticals, Inc., a Delaware corporation (the “Borrower”), in favor of the Lender in an
original principal sum of up to $2,500,000 (“Promissory Note”). Capitalized terms used herein but not defined have the meaning given to them in the Promissory Note. 

To Whom it May Concern: 
 Please advance
$         to the Borrower on the Borrowing Date, which the Borrower requests be                     
(a business day). 
  

			
	Very truly yours,
	
	PROVECTUS BIOPHARMACEUTICALS, INC.

 
			
		
	By:	 	  

	Name:	 	  

	Title:	 	  

 Exhibit C 

First Draw Certificate 

(See Attached) 

  
 Exhibit C 

 FIRST DRAW CERTIFICATE 

OF 
 PROVECTUS
BIOPHARMACEUTICALS, INC. 
 [●], 2017 

The undersigned, in his capacity as the President of Provectus Biopharmaceuticals, Inc., a Delaware corporation (the
“Borrower”), hereby delivers this First Draw Certificate on behalf of the Borrower pursuant to Secured Convertible Promissory Note dated March [●], 2017 (the “Note”) made by the Borrower payable to the Lender.
Capitalized terms used but not otherwise defined herein shall have the respective meanings ascribed to them in the Note. 
 The undersigned
certifies on behalf of the Borrower, and not in any individual capacity (and without personal liability), that, as of the date hereof: 
  

	 	1.	Contingent upon the Lender’s funding of the First Tranche, Eric Wachter has irrevocably instructed the Borrower to convert his entire financing of $2,500,000 pursuant to that Convertible Promissory Note dated
February 21, 2017 into a promissory note having the same terms as the Note. 

  

	 	2.	Since March [●], 2017, there have been no material adverse changes in the financial condition, operations or prospects of the Borrower. 

 

	 	3.	The Borrower has provided such information and documents as reasonably requested by the Lender with respect to its due diligence examination of the Borrower. 

 

	 	4.	Enclosed herewith is evidence demonstrating that, as of the date set forth therein, there are no perfected security interests in the Borrower’s assets other than perfected security interests held by the Lender.

  

	 	5.	Eric Wachter, Tim Scott, and John Glass have agreed to stay employed by the Borrower in their current capacities. 

  

	 	6.	The Board has taken all actions necessary (a) to allow for the changes of the directors of the Board contemplated by the Term Sheet, (b) to designate a new series of preferred stock as the Series D Convertible
Preferred Stock and (c) to adopt the rights and preferences of the Series D Convertible Preferred Stock as described in the Term Sheet; [provided, however, that with respect to clauses (b) and (c), the Borrower will not file a
Certificate of Designation with respect to the Series D Convertible Preferred Stock until such time as the Borrower’s shareholders have approved an amendment to the Certificate of Incorporation of the Borrower to increase the number of
authorized shares of preferred stock that the Borrower is authorized to issue]. 

  

	 	7.	The Board has set May 23, 2017 as the date of the 2017 annual meeting of stockholders of the Borrower. 

	 	8.	[The Borrower has filed a proxy statement with the SEC regarding its 2017 annual meeting of stockholders (the “Borrower Proxy Statement”), and such proxy statement discusses the proxy statement filed by Peter
Culpepper and his associates (the “Culpepper Proxy Statement”). The Board has recommended in the Borrower Proxy Statement that shareholders reject the Culpepper Proxy Statement and the proposed slate of directors set forth in the Culpepper
Proxy Statement.] 

  

	 	9.	The Borrower has provided to the Lender evidence of the recording of a UCC-1 Financing Statement and such other required public filings necessary to perfect the security interest
of the Lender in the Borrower’s Intellectual Property and the Records pertaining thereto as security for the Loan. 

*     *     *     *     * 

[Signature page follows] 

 IN WITNESS WHEREOF, the undersigned has executed this First Draw Certificate as of the
date first written above. 
  

			
	PROVECTUS BIOPHARMACEUTICALS, INC.

 
			
		
	By:	 	  

	Name:	 	  

	Title:	 	  

 Exhibit D 

Form of Notice of Conversion 

(See Attached) 

  
 Exhibit D 

 NOTICE OF CONVERSION 

The undersigned hereby irrevocably elects to convert (the “Conversion”) $         principal amount of
the Convertible Note plus $         accrued and unpaid interest on such principal amount into Series D Shares of Provectus Biopharmaceuticals, Inc. (the “Company”) according to the conditions
of the Secured Convertible Promissory Note dated March [●], 2017, as of the date written below. No fee will be charged to the Lender for the conversion. 

The undersigned represents and warrants that it understands that all offers and sales by the undersigned of the Series D Shares issuable to the undersigned
upon Conversion of this Secured Convertible Promissory Note shall be made pursuant to registration of such securities under the Securities Act of 1933, as amended (the “Act”), or pursuant to an exemption from registration under the Act.

  

			
	Date of Conversion:	 	  

 

			
	Applicable Conversion Price:	 	  

 

			
	Number of Conversion Securities

 
			
	to be Issued:	 	  

 

			
	Signature:	 	  

	Name:	 	  

	Address:	 	  

		 	  

		 	  

  

			
	ACKNOWLEDGED AND AGREED:
	
	PROVECTUS BIOPHARMACEUTICALS, INC.

			
		
	BY:	 	  

	NAME:	 	  

	TITLE:	 	  

	DATE:	 	  

 Exhibit E 

Intellectual Property 

(See Attached) 

  
 Exhibit E 

 INTELLECTUAL PROPERTY 

U.S. Patent Registrations 
  

			
	
U.S. PATENT NO.
	 	 
	6,331,286	 	
	6,451,597	 	
	6,468,777	 	
	6,493,570	 	
	6,495,360	 	
	6,541,223	 	
	6,986,740	 	
	6,991,776	 	
	7,201,914	 	
	7,338,652	 	
	7,402,299	 	
	8,470,296	 	
	8,530,675	 	
	8,974,363	 	
	9,107,887	 	
	9,273,022	 	
	9,422,260	 	

 U.S. Patent Applications 
  

			
	
U.S. APPLICATION NO.
	 	 
	14/748,579	 	
	14/748,608	 	
	14/748,634	 	
	14/974,357	 	

 U.S. Trademark Registrations 
  

			
	 MARK
	  	
U.S. REGISTRATION NO.

	PROVECTUS	  	3,919,981
	 PROVECTUS and Design
 

	  	3,919,982
	PH-10	  	4,974,860
	PV-10	  	5,096,447 1

 U.S. Trademark Applications 
  

			
	 MARK
	  	
U.S. APPLICATION NO.

	TINCTURA DATUM EST	  	87/021,563
	WHEN PATIENTS WIN, WE ALL WIN	  	86/739,133

  

	1	There is a misfiled security agreement recorded for U.S. Reg. No. 5,096,447 intended to be recorded for U.S. Application Serial No. 85/096,447.

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