Document:

Exhibit
10.2

 

EXCHANGE
AGREEMENT

 

THIS
EXCHANGE AGREEMENT (the “Agreement”) is dated this 4th day of April, 2016, by and among AMEDICA CORPORATION,
a Delaware corporation (the “Company”), all of the subsidiaries of the Company that are party to the Agreement
(collectively, “Subsidiaries”), and RIVERSIDE MERCHANT PARTNERS, LLC (the “Holder”).

 

WHEREAS,
the Holder beneficially owns and holds $1,000,000 of the outstanding principal of that certain Loan and Security Agreement dated
June 30, 2014, as amended (the “Term Loan”), as set forth on Exhibit A hereto (the “Initial
Securities”);

 

WHEREAS,
subject to certain conditions contained herein, the Holder desires to purchase an additional $2,000,000 of the outstanding principal
of the Term Loan, as set forth on Exhibit A hereto (the “Subsequent Securities”; the Initial Securities
and the Subsequent Securities, collectively, “Securities”);

 

WHEREAS,
the Holder desires to exchange $1,000,000 of the Initial Securities (the “First Exchange”) for a Senior Convertible
Promissory Note in the principal amount of $1,000,000 (the “First Exchange Note”) and a Warrant to purchase
100,000 shares of the Company’s common stock (the “Warrant”; the First Exchange Note and the Warrant,
collectively, the “First Exchange Securities”) as set forth and memorialized on Exhibit B hereto, and
the Company desires to issue the First Exchange Securities in exchange for such Initial Securities, all on the terms and conditions
set forth in this Agreement in reliance on the exemption from registration provided by Section 3(a)(9) of the Securities Act of
1933, as amended (the “Securities Act”);

 

WHEREAS,
in the event that the Holder purchases the Subsequent Securities it may exchange the Subsequent Securities (the “Second
Exchange”; the First Exchange and the Second Exchange, collectively, the “Exchange”) for a Senior
Convertible Promissory Note in the principal amount of $2,000,000 (the “Second Exchange Note”, and, together
with the First Exchange Note, the “Notes”) and a Warrant to purchase 100,000 shares of the Company’s
common stock (the “Second Warrant”, and, together with the First Warrant, the “Warrant”;
the Second Exchange Note and the Second Warrant, collectively, the “Second Exchange Securities”; the First
Exchange Securities and the Second Exchange Securities, collectively, the “Exchange Securities”) as set forth
and memorialized on Exhibit B hereto, and the Company desires to issue the Second Exchange Securities in exchange for the
Subsequent Securities, all on the terms and conditions set forth in this Agreement in reliance on the exemption from registration
provided by Section 3(a)(9) of the Securities Act; and

 

WHEREAS,
subject to the conditions contained herein, upon the Second Exchange, Holder shall no longer have any rights as a Lender (as defined
in the under the Term Loan) under the Term Loan.

 

    	 	 	 

     

    

 

NOW,
THEREFORE, in consideration of the terms and conditions contained herein, and other good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, the Company and the Holder hereby agree as follows:

 

Section
1. Exchange. Subject to and upon the terms and conditions set forth in this Agreement, the Holder agrees to surrender to
the Company the Securities and, in exchange therefore, the Company shall issue to the Holder the Exchange Securities.

 

1.1
Closings.

 

(a)First
Closing. On the First Closing Date (as defined below), the Company will issue and deliver (or cause to be issued and delivered)
the First Exchange Securities to the Holder, or in the name of a custodian or nominee of the Holder, or as otherwise requested
by the Holder in writing, and the Holder will surrender to the Company the Initial Securities. The closing of the First Exchange
shall occur on April 4, 2016, or as soon thereafter as the parties may mutually agree in writing (the “First Closing
Date”), subject to the provisions of Section 4 and Section 5 herein.

 

(b)Second
Closing. On the Second Closing Date (as defined below), the Company will issue and deliver (or cause to be issued and delivered)
the Second Exchange Securities to the Holder, or in the name of a custodian or nominee of the Holder, or as otherwise requested
by the Holder in writing, and the Holder will surrender to the Company the Subsequent Securities. Provided that all the condition
precedents to the Second Closing as set forth in Section 5 have been met or waived, the closing of the Second Exchange shall occur
(i) upon the mutual agreement of the Company and the Holder in writing, at any time within twenty (20) trading days of the First
Closing Date, (ii) at the Company’s option, on May 3, 2016, so long as the average VWAP (as defined in the First Exchange
Note) of the Company’s common stock on the applicable Trading Market (as defined below) for the five (5) Trading Days immediately
prior to May 3, 2016 is at least equal to 125% of the conversion price set forth in the First Exchange Note or (iii) at any time
during the ten (10) trading days following May 3, 2016 (such tenth trading day being the “Termination Date”),
upon the mutual agreement of the Company and the Holder in writing (the “Second Closing Date”; the First Closing
Date and the Second Closing Date, collectively, the “Closing Date”), subject to the provisions of Section
4 and Section 5 herein. In the event that the closing of the Second Exchange does not occur by the Termination Date,
neither the Holder nor the Company shall be required to close on the Second Exchange.

 

1.2
Section 3(a)(9). Assuming the accuracy of the representations and warranties of each of the Company and the Holder set
forth in Sections 2 and 3 of this Agreement, the parties acknowledge and agree that the purpose of such representations and warranties
is, among other things, to ensure that the Exchange qualifies as an exchange of securities under Section 3(a)(9) of the Securities
Act.

 

    	 	2	 

     

    

 

Section
2. Representations and Warranties of the Company. The Company represents and warrants to the Holder that:

 

2.1
Organization and Qualification. The Company and each of the subsidiaries of the Company (the “Subsidiaries”)
is an entity duly incorporated or otherwise organized, validly existing and in good standing under the laws of the jurisdiction
of its incorporation or organization, with the requisite power and authority to own and use its properties and assets and to carry
on its business as currently conducted. Neither the Company, nor any Subsidiary is in violation or default of any of the provisions
of its respective certificate or certificate of incorporation, bylaws or other organizational or charter documents. Each of the
Company and the Subsidiaries is duly qualified to conduct business and is in good standing as a foreign corporation or other entity
in each jurisdiction in which the nature of the business conducted or property owned by it makes such qualification necessary,
except where the failure to be so qualified or in good standing, as the case may be, could not have or reasonably be expected
to result in: (i) a material adverse effect on the legality, validity or enforceability of this Agreement or any documents executed
in connection herewith (the “Transaction Documents”), (ii) a material adverse effect on the results of operations,
assets, business, or condition (financial or otherwise) of the Company and the Subsidiaries, taken as a whole, or (iii) a material
adverse effect on the Company’s ability to perform in any material respect on a timely basis its obligations under any Transaction
Document (any of (i), (ii) or (iii), a “Material Adverse Effect”) and no proceeding has been instituted in
any such jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or curtail such power and authority or qualification.

 

2.2
Authorization; Enforcement. The Company has the requisite corporate power and authority to enter into and to consummate
the transactions contemplated by this Agreement and each of the other Transaction Documents and otherwise to carry out its obligations
hereunder and thereunder. The execution and delivery of this Agreement and each of the other Transaction Documents by the Company
and the consummation by it of the transactions contemplated hereby and thereby have been duly authorized by all necessary action
on the part of the Company and no further action is required by the Company, the Board of Directors or the Company’s stockholders
in connection herewith or therewith other than in connection with the Required Approvals (as defined below). This Agreement and
each other Transaction Document to which it is a party has been (or upon delivery will have been) duly executed by the Company
and, when delivered in accordance with the terms hereof and thereof, will constitute the valid and binding obligation of the Company
enforceable against the Company in accordance with its terms, except: (i) as limited by general equitable principles and applicable
bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’
rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable
remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable law.

 

    	 	3	 

     

    

 

2.3
Issuance of Exchange Securities. The issuance of the Exchange Securities is duly authorized and, upon issuance in accordance
with the terms hereof, the Exchange Securities shall be validly issued, fully paid and non-assessable. The shares of Common Stock
issued upon conversion or exercise of the Exchange Securities, when issued and delivered in accordance with the terms of the Exchange
Securities, will be duly and validly issued, fully paid and non-assessable, free and clear of all Liens (as defined below) imposed
by the Company, other than restrictions on transfer under applicable state and federal securities laws. The shares of Common Stock
issued upon exercise of the Exchange Securities, when issued and delivered in accordance with the terms of the Exchange Securities
for the consideration expressed therein, will be duly and validly issued, fully paid and non-assessable, free and clear of all
Liens imposed by the Company, other than restrictions on transfer under applicable state and federal securities laws. Upon issuance
in accordance herewith, the issuance by the Company of the Exchange Securities is exempt from the registration requirements of
the Securities Act under Section 3(a)(9) of the Securities Act and all of the shares of Common Stock issuable upon conversion
or exercise of the Exchange Securities and upon exercise of the Exchange Securities will be freely transferable and freely tradable
by the Holder without restriction pursuant to Rule 144 of the Securities Act, assuming the Holder is not an Affiliate and the
holding period requirements of Rule 144 have been met. The shares of Common Stock issuable upon conversion or exercise, as applicable,
of the Exchange Securities shall not bear any restrictive or other legends or notations. The Company has reserved from its duly
authorized capital stock a number of shares of Common Stock for issuance of the shares underlying the Exchange Securities at least
equal to 100% of the Required Minimum on the date hereof. “Required Minimum” means, as of any date, the maximum
aggregate number of shares of Common Stock then issued or potentially issuable in the future pursuant to the Transaction Documents,
including any shares of Common Stock issuable upon exercise in full of all Exchange Securities or conversion in full of all Exchange
Securities (including shares of Common Stock issuable as payment of interest on the Exchange Securities), ignoring any conversion
or exercise limits set forth therein, and assuming that the Conversion Price or Exercise Price, as applicable, is at all times
on and after the date of determination 94% of the then Conversion Price or Exercise Price, as applicable, on the Trading Day immediately
prior to the date of determination.

 

2.4
No Conflicts. The execution, delivery and performance by the Company of this Agreement and the other Transaction Documents
to which it is a party, the issuance of the Exchange Securities and the consummation by it of the transactions contemplated hereby
and thereby do not and will not: (i) conflict with or violate any provision of the Company’s or any Subsidiary’s certificate
of incorporation, bylaws or other organizational or charter documents, (ii) conflict with, or constitute a default (or an event
that with notice or lapse of time or both would become a default) under, result in the creation of any options, contracts, agreements,
liens, security interests, or other encumbrances (“Liens”) upon any of the properties or assets of the Company
or any Subsidiary, or give to others any rights of termination, amendment, acceleration or cancellation (with or without notice,
lapse of time or both) of, any agreement, credit facility, debt or other instrument (evidencing a Company or Subsidiary debt or
otherwise) or other understanding to which the Company or any Subsidiary is a party or by which any property or asset of the Company
or any Subsidiary is bound or affected, or (iii) subject to the Required Approvals, conflict with or result in a violation of
any law, rule, regulation, order, judgment, injunction, decree or other restriction of any court or governmental authority to
which the Company or a Subsidiary is subject (including federal and state securities laws and regulations), or by which any property
or asset of the Company or a Subsidiary is bound or affected; except in the case of each of clauses (ii) and (iii), such as could
not have or reasonably be expected to result in a Material Adverse Effect.

 

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2.5
Acknowledgment Regarding the Exchange. The Company acknowledges and agrees that the Holder is acting solely in the capacity
of an arm’s length third party with respect to this Agreement and the transactions contemplated hereby. The Company further
acknowledges the Holder is not acting as a financial advisor or fiduciary of the Company (or in any similar capacity) with respect
to this Agreement and the transactions contemplated hereby, and any advice given by the Holder or any of their representatives
or agents in connection with this Agreement is merely incidental to the Exchange.

 

2.6
No Commission; No Other Consideration. The Company has not paid or given, and has not agreed to pay or give, directly or
indirectly, any commission or other remuneration for soliciting the Exchange. The Exchange Securities are being issued or exclusively
for the exchange of the Securities and no other consideration has or will be paid for the Exchange Securities.

 

2.7
3(a)(9) Representation. The Company has not, nor has any person acting on its behalf, directly or indirectly made any offers
or sales of any security or solicited any offers to buy any security under circumstances that would cause the Exchange and the
issuance of the Exchange Securities pursuant to this Agreement to be integrated with prior offerings by the Company for purposes
of the Securities Act which would prevent the Company from delivering the Exchange Securities to the Holder pursuant to Section
3(a)(9) of the Securities Act, nor will the Company take any action or steps that would cause the Exchange, issuance and delivery
of the Exchange Securities to be integrated with other offerings to the effect that the delivery of the Exchange Securities to
the Holder would be seen not to be exempt pursuant to Section 3(a)(9) of the Securities Act.

 

2.8
No Third-party Advisors. Other than legal counsel, the Company has not engaged any third parties to assist in the solicitation
with respect to the Exchange.

 

2.9
SEC Reports; Financial Statements. Except for the Company’s Form 10-Q for the quarter ended March 31, 2016, the Company
has filed all reports, schedules, forms, statements and other documents required to be filed by the Company under the Securities
Act and the Exchange Act of 1934, as amended (the “Exchange Act”), including pursuant to Section 13(a) or 15(d)
of the Exchange Act, for the two (2) years preceding the date hereof (or such shorter period as the Company was required by law
or regulation to file such material) (the foregoing materials, including the exhibits thereto and documents incorporated by reference
therein, being collectively referred to herein as the “SEC Reports”) on a timely basis or has received a valid
extension of such time of filing and has filed any such SEC Reports prior to the expiration of any such extension. As of their
respective dates, the SEC Reports complied in all material respects with the requirements of the Securities Act and the Exchange
Act, as applicable, and none of the SEC Reports, when filed, contained any untrue statement of a material fact or omitted to state
a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances
under which they were made, not misleading. The financial statements of the Company included in the SEC Reports comply in all
material respects with applicable accounting requirements and the rules and regulations of the SEC with respect thereto as in
effect at the time of filing. Such financial statements have been prepared in accordance with United States generally accepted
accounting principles applied on a consistent basis during the periods involved (“GAAP”), except as may be
otherwise specified in such financial statements or the notes thereto and except that unaudited financial statements may not contain
all footnotes required by GAAP, and fairly present in all material respects the financial position of the Company and its consolidated
Subsidiaries as of and for the dates thereof and the results of operations and cash flows for the periods then ended, subject,
in the case of unaudited statements, to normal, immaterial, year-end audit adjustments.

 

    	 	5	 

     

    

 

2.10
Subsidiaries. All of the direct and indirect subsidiaries of the Company are set forth in Schedule 2.10. The Company
owns, directly or indirectly, all of the capital stock or other equity interests of each Subsidiary free and clear of any Liens,
and all of the issued and outstanding shares of capital stock of each Subsidiary are validly issued and are fully paid, non-assessable
and free of preemptive and similar rights to subscribe for or purchase securities. If the Company has no subsidiaries, all other
references to the Subsidiaries or any of them in the Transaction Documents shall be disregarded.

 

2.11
Filings, Consents and Approvals. Other than as set forth on Schedule 2.11, the Company is not required to obtain
any consent, waiver, authorization or order of, give any notice to, or make any filing or registration with, any court or other
federal, state, local or other governmental authority or any natural person, firm, partnership, association, corporation, company,
trust, business trust or other entity (each, a “Person”) in connection with the execution, delivery and performance
by the Company of the Transaction Documents, other than the notice and/or application(s) to each applicable Trading Market for
the issuance and the listing of the shares of Common Stock issuable upon conversion of the Exchange Securities and the shares
of Common Stock issuable upon exercise of the Exchange Securities for trading thereon in the time and manner required thereby
(the “Required Approvals”). 

 

2.12
Capitalization. The capitalization of the Company is as set forth on Schedule 2.12. No Person has any right of first
refusal, preemptive right, right of participation, or any similar right to participate in the transactions contemplated by the
Transaction Documents. Other than as set forth on Schedule 2.12, there are no outstanding options, warrants, scrip rights
to subscribe to, calls or commitments of any character whatsoever relating to, or securities, rights or obligations convertible
into or exercisable or exchangeable for, or giving any Person any right to subscribe for or acquire any shares of Common Stock,
or contracts, commitments, understandings or arrangements by which the Company or any Subsidiary is or may become bound to issue
additional shares of Common Stock or any securities of the Company which would entitle the holder thereof to acquire at any time
Common Stock, including, without limitation, any debt, preferred stock, right, option, warrant or other instrument that is at
any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock.
All of the outstanding shares of capital stock of the Company are duly authorized, validly issued, fully paid and nonassessable,
have been issued in compliance with all federal and state securities laws, and none of such outstanding shares was issued in violation
of any preemptive rights or similar rights to subscribe for or purchase securities. No further approval or authorization of any
stockholder, the Board of Directors or others is required for the issuance of the Exchange Securities. There are no stockholder
agreements or other similar agreements with respect to the Company’s capital stock to which the Company is a party or, to
the knowledge of the Company, between or among any of the Company’s stockholders.

 

    	 	6	 

     

    

 

2.13
DTC Eligibility. The Company, through the Transfer Agent, currently participates
in the DTC Fast Automated Securities Transfer (FAST) Program and the Common Stock can be transferred electronically to third parties
via the DTC Fast Automated Securities Transfer (FAST) Program. 

 

2.14
Material Changes; Undisclosed Events, Liabilities or Developments. Since the date of the latest financial statements included
in the SEC Reports, other than as specifically disclosed in a subsequent SEC Report filed prior to the date hereof or as otherwise
set forth on Schedule 2.14: (i) there has been no event, occurrence or development that has had or that could reasonably
be expected to result in a Material Adverse Effect, (ii) the Company has not incurred any liabilities (contingent or otherwise)
other than (A) trade payables and accrued expenses incurred in the ordinary course of business consistent with past practice and
(B) liabilities not required to be reflected in the Company’s financial statements pursuant to GAAP or disclosed in filings
made with the SEC, (iii) the Company has not altered its method of accounting, (iv) the Company has not declared or made any dividend
or distribution of cash or other property to its stockholder or purchased, redeemed or made any agreements to purchase or redeem
any shares of its capital stock and (v) the Company has not issued any equity securities to any officer, director or Affiliate
(as defined below), except pursuant to existing Company stock option plans. The Company does not have pending before the SEC any
request for confidential treatment of information. Except for the issuance of the Exchange Securities contemplated by this Agreement,
no event, liability, fact, circumstance, occurrence or development has occurred or exists or is reasonably expected to occur or
exist with respect to the Company or its Subsidiaries or their respective businesses, properties, operations, assets or financial
condition, that would be required to be disclosed by the Company under applicable securities laws at the time this representation
is made or deemed made that has not been publicly disclosed at least 1 Trading Day prior to the date that this representation
is made.

 

2.15
Litigation. Other than as set forth on Schedule 2.15, there is no action, suit, inquiry, notice of violation, proceeding
or investigation pending or, to the knowledge of the Company, threatened against or affecting the Company, any Subsidiary or any
of their respective properties before or by any court, arbitrator, governmental or administrative agency or regulatory authority
(federal, state, county, local or foreign) (collectively, an “Action”) which (i) adversely affects or challenges
the legality, validity or enforceability of any of the Transaction Documents or the Exchange Securities or (ii) could, if there
were an unfavorable decision, have or reasonably be expected to result in a Material Adverse Effect. Neither the Company nor any
Subsidiary, nor any director or officer thereof, is or has been the subject of any Action involving a claim of violation of or
liability under federal or state securities laws or a claim of breach of fiduciary duty. There has not been, and to the knowledge
of the Company, there is not pending or contemplated, any investigation by the SEC involving the Company or any current or former
director or officer of the Company. The SEC has not issued any stop order or other order suspending the effectiveness of any registration
statement filed by the Company or any Subsidiary under the Exchange Act or the Securities Act.

 

    	 	7	 

     

    

 

2.16
Labor Relations. No labor dispute exists or, to the knowledge of the Company, is imminent with respect to any of the employees
of the Company, which could reasonably be expected to result in a Material Adverse Effect. None of the Company’s or its
Subsidiaries’ employees is a member of a union that relates to such employee’s relationship with the Company or such
Subsidiary, and neither the Company nor any of its Subsidiaries is a party to a collective bargaining agreement, and the Company
and its Subsidiaries believe that their relationships with their employees are good. To the knowledge of the Company, no executive
officer of the Company or any Subsidiary, is, or is now expected to be, in violation of any material term of any employment contract,
confidentiality, disclosure or proprietary information agreement or non-competition agreement, or any other contract or agreement
or any restrictive covenant in favor of any third party, and the continued employment of each such executive officer does not
subject the Company or any of its Subsidiaries to any liability with respect to any of the foregoing matters. The Company and
its Subsidiaries are in compliance with all U.S. federal, state, local and foreign laws and regulations relating to employment
and employment practices, terms and conditions of employment and wages and hours, except where the failure to be in compliance
could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

 

2.17
Compliance. Except as set forth on Schedule 2.17, neither the Company nor any Subsidiary: (i) is in default under
or in violation of (and no event has occurred that has not been waived that, with notice or lapse of time or both, would result
in a default by the Company or any Subsidiary under), nor has the Company or any Subsidiary received notice of a claim that it
is in default under or that it is in violation of, any indenture, loan or credit agreement or any other agreement or instrument
to which it is a party or by which it or any of its properties is bound (whether or not such default or violation has been waived),
(ii) is in violation of any judgment, decree or order of any court, arbitrator or other governmental authority or (iii) is or
has been in violation of any statute, rule, ordinance or regulation of any governmental authority, including without limitation
all foreign, federal, state and local laws relating to taxes, environmental protection, occupational health and safety, product
quality and safety and employment and labor matters, except in each case as could not have or reasonably be expected to result
in a Material Adverse Effect.

 

2.18
Regulatory Permits. The Company and the Subsidiaries possess all certificates, authorizations and permits issued by the
appropriate federal, state, local or foreign regulatory authorities necessary to conduct their respective businesses as described
in the SEC Reports, except where the failure to possess such permits could not reasonably be expected to result in a Material
Adverse Effect (“Material Permits”), and neither the Company nor any Subsidiary has received any notice of
proceedings relating to the revocation or modification of any Material Permit.

 

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2.19
Title to Assets. The Company and the Subsidiaries have good and marketable title in fee simple to all real property owned
by them and good and marketable title in all personal property owned by them that is material to the business of the Company and
the Subsidiaries, in each case free and clear of all Liens, except for (i) Liens as do not materially affect the value of such
property and do not materially interfere with the use made and proposed to be made of such property by the Company and the Subsidiaries,
(ii) Liens for the payment of federal, state or other taxes, for which appropriate reserves have been made therefor in accordance
with GAAP and, the payment of which is neither delinquent nor subject to penalties and (iii) Liens held by the Holder. Any real
property and facilities held under lease by the Company and the Subsidiaries are held by them under valid, subsisting and enforceable
leases with which the Company and the Subsidiaries are in compliance.

 

2.20
Intellectual Property. Other than as set forth on Schedule 2.20, the Company and the Subsidiaries have, or have
rights to use, all patents, patent applications, trademarks, trademark applications, service marks, trade names, trade secrets,
inventions, copyrights, licenses and other intellectual property rights and similar rights as described in the SEC Reports as
necessary or required for use in connection with their respective businesses and which the failure to so have could have a Material
Adverse Effect (collectively, the “Intellectual Property Rights”). None of, and neither the Company nor any
Subsidiary has received a notice (written or otherwise) that any of, the Intellectual Property Rights has expired, terminated
or been abandoned, or is expected to expire or terminate or be abandoned, within two (2) years from the date of this Agreement.
Neither the Company nor any Subsidiary has received, since the date of the latest audited financial statements included within
the SEC Reports, a written notice of a claim or otherwise has any knowledge that the Intellectual Property Rights violate or infringe
upon the rights of any Person, except as could not have or reasonably be expected to not have a Material Adverse Effect. To the
knowledge of the Company, all such Intellectual Property Rights are enforceable and there is no existing infringement by another
Person of any of the Intellectual Property Rights. The Company and its Subsidiaries have taken reasonable security measures to
protect the secrecy, confidentiality and value of all of their intellectual properties, except where failure to do so could not,
individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

 

2.21
Insurance. The Company and the Subsidiaries are insured by insurers of recognized financial responsibility against such
losses and risks and in such amounts as are prudent and customary in the businesses in which the Company and the Subsidiaries
are engaged, including, but not limited to, directors and officers insurance coverage at least equal to the aggregate principal
amount of the Exchange Securities. Neither the Company nor any Subsidiary has any reason to believe that it will not be able to
renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as
may be necessary to continue its business without a significant increase in cost.

 

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2.22
Transactions with Affiliates and Employees. Other than as set forth on Schedule 2.22, none of the officers or directors
of the Company or any Subsidiary and, to the knowledge of the Company, none of the employees of the Company or any Subsidiary
is presently a party to any transaction with the Company or any Subsidiary (other than for services as employees, officers and
directors), including any contract, agreement or other arrangement providing for the furnishing of services to or by, providing
for rental of real or personal property to or from providing for the borrowing of money from or lending of money to, or otherwise
requiring payments to or from any officer, director or such employee or, to the knowledge of the Company, any entity in which
any officer, director, or any such employee has a substantial interest or is an officer, director, trustee, stockholder, member
or partner, in each case in excess of $120,000 other than for: (i) payment of salary or consulting fees for services rendered,
(ii) reimbursement for expenses incurred on behalf of the Company and (iii) other employee benefits, including stock option agreements
under any stock option plan of the Company.

 

2.23
Sarbanes-Oxley; Internal Accounting Controls. The Company and the Subsidiaries are in compliance with any and all applicable
requirements of the Sarbanes-Oxley Act of 2002 that are effective as of the date hereof, and any and all applicable rules and
regulations promulgated by the SEC thereunder that are effective as of the date hereof and as of the Closing Date. The Company
and the Subsidiaries maintain a system of internal accounting controls sufficient to provide reasonable assurance that: (i) transactions
are executed in accordance with management’s general or specific authorizations, (ii) transactions are recorded as necessary
to permit preparation of financial statements in conformity with GAAP and to maintain asset accountability, (iii) access to assets
is permitted only in accordance with management’s general or specific authorization, and (iv) the recorded accountability
for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences.
The Company and the Subsidiaries have established disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e)
and 15d-15(e)) for the Company and the Subsidiaries and designed such disclosure controls and procedures to ensure that information
required to be disclosed by the Company in the reports it files or submits under the Exchange Act is recorded, processed, summarized
and reported, within the time periods specified in the SEC’s rules and forms. The Company’s certifying officers have
evaluated the effectiveness of the disclosure controls and procedures of the Company and the Subsidiaries as of the end of the
period covered by the most recently filed periodic report under the Exchange Act (such date, the “Evaluation Date”).
The Company presented in its most recently filed periodic report under the Exchange Act the conclusions of the certifying officers
about the effectiveness of the disclosure controls and procedures based on their evaluations as of the Evaluation Date. Since
the Evaluation Date, there have been no changes in the internal control over financial reporting (as such term is defined in the
Exchange Act) that have materially affected, or is reasonably likely to materially affect, the internal control over financial
reporting of the Company and its Subsidiaries.

 

2.24
Certain Fees. Except as set forth in Schedule 2.24, no brokerage or finder’s fees or commissions are or will
be payable by the Company or any Subsidiaries to any broker, financial advisor or consultant, finder, placement agent, investment
banker, bank or other Person with respect to the transactions contemplated by the Transaction Documents.

 

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2.25
Investment Company. The Company is not, and is not an Affiliate of, and immediately after receipt of payment for the Exchange
Securities, will not be or be an Affiliate of, an “investment company” within the meaning of the Investment Company
Act of 1940, as amended. The Company shall conduct its business in a manner so that it will not become an “investment company”
subject to registration under the Investment Company Act of 1940, as amended.

 

2.26
Registration Rights. Other than as set forth on Schedule 2.26, , no Person has any right to cause the Company to
effect the registration under the Securities Act of any securities of the Company or any Subsidiaries.

 

2.27
Listing and Maintenance Requirements. The Common Stock is registered pursuant to Section 12(b) or 12(g) of the Exchange
Act, and the Company has taken no action designed to, or which to its knowledge is likely to have the effect of, terminating the
registration of the Common Stock under the Exchange Act nor has the Company received any notification that the SEC is contemplating
terminating such registration. Other than as set forth in Schedule 2.27, the Company has not, in the 12 months preceding
the date hereof, received notice from the NASDAQ Capital Market or any other exchange or quotation service on which the Common
Stock is or has been listed or quoted (the “Trading Market”) to the effect that the Company is not in compliance
with the listing or maintenance requirements of such Trading Market. Except as set forth in the SEC Reports, the Company is, and
has no reason to believe that it will not in the foreseeable future continue to be, in compliance with all such listing and maintenance
requirements.

 

2.28
Application of Takeover Protections. The Company and the Board of Directors have taken all necessary action, if any, in
order to render inapplicable any control share acquisition, business combination, poison pill (including any distribution under
a rights agreement) or other similar anti-takeover provision under the Company’s certificate of incorporation (or similar
charter documents) or the laws of its state of incorporation that is or could become applicable to the Holder as a result of the
Holder and the Company fulfilling their obligations or exercising their rights under the Transaction Documents, including without
limitation as a result of the Company’s issuance of the Exchange Securities pursuant to the Exchange.

 

2.29
Disclosure. Except with respect to the material terms and conditions of the transactions contemplated by the Transaction
Documents, the Company confirms that neither it nor any other Person acting on its behalf has provided the Holder or its agents
or counsel with any information that it believes constitutes or might constitute material, non-public information. The Company
understands and confirms that the Holder will rely on the foregoing representation in effecting transactions in securities of
the Company. All of the disclosure furnished by or on behalf of the Company to the Holder regarding the Company and its Subsidiaries,
their respective businesses and the transactions contemplated hereby, including the Disclosure Schedules to this Agreement, is
true and correct and does not contain any untrue statement of a material fact or omit to state any material fact necessary in
order to make the statements made therein, in light of the circumstances under which they were made, not misleading. The press
releases disseminated by the Company during the twelve months preceding the date of this Agreement taken as a whole do not contain
any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they were made and when made, not misleading. The Company
acknowledges and agrees that the Holder makes no nor has made any representations or warranties with respect to the transactions
contemplated hereby other than those specifically set forth in Section 3 hereof.

 

    	 	11	 

     

    

 

2.30
No Integrated Offering. Assuming the accuracy of the Holder’s representations and warranties set forth in Section
3, neither the Company, nor any of its Affiliates, nor any Person acting on their behalf has, directly or indirectly, made any
offers or sales of any security or solicited any offers to buy any security, under circumstances that would cause the Exchange
to be integrated with prior offerings by the Company for purposes of (i) the Securities Act which would require the registration
of any such securities under the Securities Act, or (ii) any applicable shareholder approval provisions of any Trading Market
on which any of the securities of the Company are listed or designated.

 

2.31
Solvency. The Company does not intend to incur debts beyond its ability to pay such debts as they mature (taking into account
the timing and amounts of cash to be payable on or in respect of its debt). The SEC Reports set forth as of the date hereof describe
all outstanding secured and unsecured Indebtedness of the Company or any Subsidiary, or for which the Company or any Subsidiary
has commitments. For the purposes of this Agreement, “Indebtedness” means (x) any liabilities for borrowed
money or amounts owed in excess of $50,000 (other than trade accounts payable incurred in the ordinary course of business), (y)
all guaranties, endorsements and other contingent obligations in respect of indebtedness of others, whether or not the same, are,
or should be, reflected in the Company’s consolidated balance sheet (or the notes thereto), except guaranties by endorsement
of negotiable instruments for deposit or collection or similar transactions in the ordinary course of business; and (z) the present
value of any lease payments in excess of $50,000 due under leases required to be capitalized in accordance with GAAP. Other than
as set forth on Schedule 2.31, neither the Company nor any Subsidiary is in default with respect to any Indebtedness.

 

2.32
Tax Status. Except for matters that would not, individually or in the aggregate, have or reasonably be expected to result
in a Material Adverse Effect, the Company and its Subsidiaries each (i) has made or filed all United States federal, state and
local income and all foreign income and franchise tax returns, reports and declarations required by any jurisdiction to which
it is subject, (ii) has paid all taxes and other governmental assessments and charges that are material in amount, shown or determined
to be due on such returns, reports and declarations and (iii) has set aside on its books provision reasonably adequate for the
payment of all material taxes for periods subsequent to the periods to which such returns, reports or declarations apply. There
are no unpaid taxes in any material amount claimed to be due by the taxing authority of any jurisdiction, and the officers of
the Company or of any Subsidiary know of no basis for any such claim.

 

    	 	12	 

     

    

 

2.33
Foreign Corrupt Practices. Neither the Company nor any Subsidiary, nor to the knowledge of the Company or any Subsidiary,
any agent or other person acting on behalf of the Company or any Subsidiary, has: (i) directly or indirectly, used any funds for
unlawful contributions, gifts, entertainment or other unlawful expenses related to foreign or domestic political activity, (ii)
made any unlawful payment to foreign or domestic government officials or employees or to any foreign or domestic political parties
or campaigns from corporate funds, (iii) failed to disclose fully any contribution made by the Company or any Subsidiary (or made
by any person acting on its behalf of which the Company is aware) which is in violation of law or (iv) violated in any material
respect any provision of FCPA.

 

2.34
No Disagreements with Accountants and Lawyers. There are no disagreements of any kind presently existing, or reasonably
anticipated by the Company to arise, between the Company and the accountants and lawyers formerly or presently employed by the
Company and the Company is current with respect to any fees owed to its accountants and lawyers which could affect the Company’s
ability to perform any of its obligations under any of the Transaction Documents.

 

2.35
Acknowledgment Regarding Holder’s Exchange of Securities. The Company acknowledges and agrees that the Holder is
acting solely in the capacity of an arm’s length party with respect to the Transaction Documents and the transactions contemplated
thereby.

 

2.36
 Regulation M Compliance. The Company has not, and to its knowledge no one acting on its behalf has, (i) taken, directly
or indirectly, any action designed to cause or to result in the stabilization or manipulation of the price of any security of
the Company to facilitate the issuance or resale of any of the Exchange Securities or the shares of Common Stock into which the
Exchange Securities are convertible or exercisable, as applicable, (ii) sold, bid for, purchased, or paid any compensation for
soliciting purchases of, any of the Exchange Securities or the shares of Common Stock into which the Exchange Securities are convertible
or exercisable, as applicable, or (iii) paid or agreed to pay to any Person any compensation for soliciting another to purchase
any other securities of the Company.

 

2.37
Office of Foreign Assets Control. Neither the Company nor any Subsidiary nor, to the Company’s knowledge, any director,
officer, agent, employee or affiliate of the Company or any Subsidiary is currently subject to any U.S. sanctions administered
by the Office of Foreign Assets Control of the U.S. Treasury Department (“OFAC”).

 

2.38
Bank Holding Company Act. Neither the Company nor any of its Subsidiaries or Affiliates is subject to the Bank Holding
Company Act of 1956, as amended (the “BHCA”) and to regulation by the Board of Governors of the Federal Reserve
System (the “Federal Reserve”). Neither the Company nor any of its Subsidiaries or Affiliates owns or controls,
directly or indirectly, five percent (5%) or more of the outstanding shares of any class of voting securities or twenty-five percent
or more of the total equity of a bank or any entity that is subject to the BHCA and to regulation by the Federal Reserve. Neither
the Company nor any of its Subsidiaries or Affiliates exercises a controlling influence over the management or policies of a bank
or any entity that is subject to the BHCA and to regulation by the Federal Reserve.

 

    	 	13	 

     

    

 

2.39
Money Laundering. The operations of the Company and its Subsidiaries are and have been conducted at all times in compliance
with applicable financial record-keeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of
1970, as amended, applicable money laundering statutes and applicable rules and regulations thereunder (collectively, the “Money
Laundering Laws”), and no action, suit or proceeding by or before any court or governmental agency, authority or body
or any arbitrator involving the Company or any Subsidiary with respect to the Money Laundering Laws is pending or, to the knowledge
of the Company or any Subsidiary, threatened.

 

Section
3. Representations and Warranties of the Holder. The Holder represents and warrants to the Company that:

 

3.1
Ownership of the Securities. The Holder is the legal and beneficial owner of the Securities. The Holder paid for the Securities,
and has continuously held the Securities since its issuance or purchase. The Holder, individually or through an affiliate, owns
the Securities outright and free and clear of any options, contracts, agreements, liens, security interests, or other encumbrances.

 

3.2
No Public Sale or Distribution. The Holder is acquiring the Exchange Securities in the ordinary course of business for
its own account and not with a view toward, or for resale in connection with, the public sale or distribution thereof; provided,
however, that by making the representations herein, the Holder does not agree to hold any of the Exchange Securities or the shares
of Common Stock into which such securities are convertible or exercisable, as applicable, for any minimum or other specific term
and reserves the right to dispose of the Exchange Securities and the shares of Common Stock into which such securities are convertible
and exercisable at any time in accordance with an exemption from the registration requirements of the Securities Act and applicable
state securities laws. The Holder does not presently have any agreement or understanding, directly or indirectly, with any person
to distribute, or transfer any interest or grant participation rights in, the Securities or the Exchange Securities.

 

3.3
Accredited Investor and Affiliate Status. The Holder is an “accredited investor” as that term is defined in
Rule 501 of Regulation D under the Securities Act. The Holder is not, and has not been, for a period of at least three months
prior to the date of this Agreement (a) an officer or director of the Company, (b) an “affiliate” of the Company (as
defined in Rule 144) (an “Affiliate”) or (c) a “beneficial owner” of more than 10% of the common
stock (as defined for purposes of Rule 13d-3 of the Exchange Act).

 

    	 	14	 

     

    

 

3.4
Reliance on Exemptions. The Holder understands that the Exchange is being made in reliance on specific exemptions from
the registration requirements of United States federal and state securities laws and that the Company is relying in part upon
the truth and accuracy of, and the Holder’s compliance with, the representations, warranties, agreements, acknowledgments
and understandings of the Holder set forth herein in order to determine the availability of such exemptions and the eligibility
of the Holder to complete the Exchange and to acquire the Exchange Securities.

 

3.5
Information. The Holder has been furnished with all materials relating to the business, finances and operations of the
Company and materials relating to the Exchange which have been requested by the Holder. The Holder has been afforded the opportunity
to ask questions of the Company. Neither such inquiries nor any other due diligence investigations conducted by the Holder or
its representatives shall modify, amend or affect the Holder’s right to rely on the Company’s representations and
warranties contained herein. The Holder acknowledges that all of the documents filed by the Company with the SEC under Sections
13(a), 14(a) or 15(d) of the Exchange Act that have been posted on the SEC’s EDGAR site are available to the Holder, and
the Holder has not relied on any statement of the Company not contained in such documents in connection with the Holder’s
decision to enter into this Agreement and the Exchange.

 

3.6
Risk. The Holder understands that its investment in the Exchange Securities involves a high degree of risk. The Holder
is able to bear the risk of an investment in the Exchange Securities including, without limitation, the risk of total loss of
its investment. The Holder has sought such accounting, legal and tax advice as it has considered necessary to make an informed
investment decision with respect to the Exchange. There is no assurance that the Exchange Securities or any securities into which
the Exchange Securities may convert will continue to be quoted, traded or listed for trading or quotation on the OTCBB or on any
other organized market or quotation system.

 

3.7
No Governmental Review. The Holder understands that no United States federal or state agency or any other government or
governmental agency has passed on or made any recommendation or endorsement in connection with the Exchange or the fairness or
suitability of the investment in the Exchange Securities nor have such authorities passed upon or endorsed the merits of the Exchange
Securities.

 

3.8
Organization; Authorization. The Holder is duly organized, validly existing and in good standing under the laws of its
state of formation and has the requisite organizational power and authority to enter into and perform its obligations under this
Agreement.

 

3.9
Validity; Enforcement. This Agreement has been duly and validly authorized, executed and delivered on behalf of the Holder
and shall constitute the legal, valid and binding obligations of the Holder enforceable against the Holder in accordance with
its terms. The execution, delivery and performance of this Agreement by the Holder and the consummation by the Holder of the transactions
contemplated hereby (including, without limitation, the irrevocable surrender of the Securities) will not result in a violation
of the organizational documents of the Holder.

 

    	 	15	 

     

    

 

3.10
Prior Investment Experience. The Holder acknowledges that it has prior investment experience, including investment in securities
of the type being exchanged, including the Securities and the Exchange Securities, and has read all of the documents furnished
or made available by the Company to it and is able to evaluate the merits and risks of such an investment on its behalf, and that
it recognizes the highly speculative nature of this investment. The Holder acknowledges that in connection with the consummation
of the exchange of the Securities and the Exchange Securities it has not relied on the advice of any third party (except legal
and tax advice from its attorneys and accountants, respectively).

 

3.11
Tax Consequences. The Holder acknowledges that the Company has made no representation regarding the potential or actual
tax consequences for the Holder which will result from entering into the Agreement and from consummation of the Exchange. The
Holder acknowledges that it bears complete responsibility for obtaining adequate tax advice regarding the Agreement and the Exchange.

 

3.12
No Registration, Review or Approval. The Holder acknowledges, understands and agrees that the Exchange Securities are being
exchanged hereunder pursuant to an exchange offer exemption under Section 3(a)(9) of the Securities Act.

 

Section
4. Conditions Precedent to Obligations of the Company. :

 

4.1
First Closing. The obligation of the Company to consummate the transactions contemplated by this Agreement on the First
Closing Date is subject to the satisfaction of each of the following conditions, provided that these conditions are for the Company’s
sole benefit and may be waived by the Company at any time in its sole discretion by providing the Holder with prior written notice
thereof:

 

(a)
Delivery. The Holder shall have delivered to the Company the requisite Securities.

 

(b)No
Prohibition. No order of any court, arbitrator, or governmental or regulatory authority shall be in effect which purports
to enjoin or restrain any of the transactions contemplated by this Agreement.

 

(c)Representations.
The accuracy in all material respects when made and on the First Closing Date of the representations and warranties of the Holder
contained herein (unless as of a specific date therein).

 

4.2
Second Closing. The obligation of the Company to consummate the transactions contemplated by this Agreement on the Second
Closing Date is subject to the satisfaction of each of the following conditions, provided that these conditions are for the Company’s
sole benefit and may be waived by the Company at any time in its sole discretion by providing the Holder with prior written notice
thereof:

 

(a)Delivery.
The Holder shall have delivered to the Company the requisite Securities.

 

    	 	16	 

     

    

 

(b)No
Prohibition. No order of any court, arbitrator, or governmental or regulatory authority shall be in effect which purports
to enjoin or restrain any of the transactions contemplated by this Agreement.

 

(c)Representations.
The accuracy in all material respects when made and on the Second Closing Date of the representations and warranties of the Holder
contained herein (unless as of a specific date therein).

 

(d)Price
of the Common Stock. The closing price of the Company’s common on the applicable Trading Market on the Second Closing
Date must be equal to at least equal to or greater than the conversion price set forth in the First Exchange Note.

 

Section
5. Conditions Precedent to Obligations of the Holder.

 

5.1
First Closing. The obligation of the Holder to consummate the transactions contemplated by this Agreement on the First
Closing Date is subject to the satisfaction of each of the following conditions, provided that these conditions are for the Holder’s
sole benefit and may be waived by the Holder at any time in its sole discretion by providing the Company with prior written notice
thereof:

 

(a)No
Prohibition. No order of any court, arbitrator, or governmental or regulatory authority shall be in effect which purports
to enjoin or restrain any of the transactions contemplated by this Agreement.

 

(b)Representations.
The representations and warranties of the Company shall be true and correct in all material respects when made and on the First
Closing Date (unless as of a specific date therein).

 

(c)Covenants.
All obligations, covenants and agreements of the Company required to be performed under this Agreement at or prior to the First
Closing Date shall have been performed.

 

(d)Trading.
From the date hereof to the relevant Closing Date, trading in the Company’s common stock shall not have been suspended by
the SEC or any Trading Market and, at any time prior to the First Closing Date, trading in securities generally as reported by
Bloomberg L.P. shall not have been suspended or limited, or minimum prices shall not have been established on securities whose
trades are reported by such service, or on any trading market, nor shall a banking moratorium have been declared either by the
United States or New York State authorities nor shall there have occurred any material outbreak or escalation of hostilities or
other national or international calamity of such magnitude in its effect on, or any material adverse change in, any financial
market which, in each case, in the reasonable judgment of the Holder makes it impracticable or inadvisable to purchase the Exchange
Securities at the First Closing.

 

    	 	17	 

     

    

 

5.2
Second Closing. The obligation of the Holder to consummate the transactions contemplated by this Agreement on the Second
Closing Date is subject to the satisfaction of each of the following conditions, provided that these conditions are for the Holder’s
sole benefit and may be waived by the Holder at any time in its sole discretion by providing the Company with prior written notice
thereof:

 

(a)No
Prohibition. No order of any court, arbitrator, or governmental or regulatory authority shall be in effect which purports
to enjoin or restrain any of the transactions contemplated by this Agreement.

 

(b)Representations.
The representations and warranties of the Company shall be true and correct in all material respects when made and on the Second
Closing Date (unless as of a specific date therein) for such representations and warranties contained herein that are not qualified
by “materiality” or “Material Adverse Effect”.

 

(c)Covenants.
All obligations, covenants and agreements of the Company required to be performed under this Agreement at or prior to the Second
Closing Date shall have been performed.

 

(d)Trading.
From the date hereof to the relevant Closing Date, trading in the Company’s common stock shall not have been suspended by
the SEC or any Trading Market and, at any time prior to the Second Closing Date, trading in securities generally as reported by
Bloomberg L.P. shall not have been suspended or limited, or minimum prices shall not have been established on securities whose
trades are reported by such service, or on any trading market, nor shall a banking moratorium have been declared either by the
United States or New York State authorities nor shall there have occurred any material outbreak or escalation of hostilities or
other national or international calamity of such magnitude in its effect on, or any material adverse change in, any financial
market which, in each case, in the reasonable judgment of the Holder makes it impracticable or inadvisable to purchase the Exchange
Securities at the Second Closing.

 

(e)Price
of the Common Stock. The average VWAP of the of the Company’s common stock on the applicable Trading Market for the
five (5) Trading Days immediately prior to the Second Closing Date is at least equal to 125% of the conversion price set forth
in the First Exchange Note.

 

(f)No
Event of Default. No Event of Default (as defined in the First Exchange Note) shall have occurred and remain continuing under
the First Exchange Note or the Second Exchange Note.

 

Section
6. Holding Period. For the purposes of Rule 144 of the Securities Act, the Company acknowledges that the holding period
of the Exchange Securities may be tacked on the holding period of the Securities, and the Company agrees not to take a position
contrary to this Section 6.

 

Section
7. Share Issuance Cap. In connection with the conversion or exercise of the Notes, the Company shall not be required to
issue in the aggregate more than 19.99% of the number of shares of Common Stock or 19.99% of the voting power of the Company issued
and outstanding immediately prior to the date hereof, and in no event shall the Company be required to pay any penalties or fees
of any kind due to the operation of the provisions contained in this Section 7.

 

    	 	18	 

     

    

 

Section
8. Governing Law; Jurisdiction; Waiver of Jury Trial. This Agreement shall be construed under the laws of the state of
New York, without regard to principles of conflicts of law or choice of law that would permit or require the application of the
laws of another jurisdiction. The Company and the Holder each hereby agrees that all actions or proceedings arising directly or
indirectly from or in connection with this Agreement shall be litigated only in the Supreme Court of the State of New York or
the United States District Court for the Southern District of New York located in New York County, New York. The Company and the
Holder each consents to the exclusive jurisdiction and venue of the foregoing courts and consents that any process or notice of
motion or other application to either of said courts or a judge thereof may be served inside or outside the State of New York
or the Southern District of New York by generally recognized overnight courier or certified or registered mail, return receipt
requested, directed to such party at its or his address set forth below (and service so made shall be deemed “personal service”)
or by personal service or in such other manner as may be permissible under the rules of said courts. THE COMPANY AND THE HOLDER
EACH HEREBY WAIVES ANY RIGHT TO A JURY TRIAL IN CONNECTION WITH ANY LITIGATION PURSUANT TO THIS AGREEMENT.

 

Section
9. Counterparts. This Agreement may be executed in two or more identical counterparts, all of which shall be considered
one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other
party; provided that a facsimile signature shall be considered due execution and shall be binding upon the signatory thereto with
the same force and effect as if the signature were an original, not a facsimile signature.

 

Section
10. Headings. The headings of this Agreement are for convenience of reference and shall not form part of, or affect the
interpretation of, this Agreement.

 

Section
11. Severability. If any provision of this Agreement shall be invalid or unenforceable in any jurisdiction, such invalidity
or unenforceability shall not affect the validity or enforceability of the remainder of this Agreement in that jurisdiction or
the validity or enforceability of any provision of this Agreement in any other jurisdiction.

 

Section
12. No Strict Construction. The language used in this Agreement will be deemed to be the language chosen by the parties
to express their mutual intent, and no rules of strict construction will be applied against any party.

 

Section
13. Entire Agreement; Amendments. This Agreement supersedes all other prior oral or written agreements between the Holder,
the Company, their affiliates and persons acting on their behalf with respect to the matters discussed herein, and this Agreement
and the instruments referenced herein contain the entire understanding of the parties with respect to the matters covered herein
and therein and, except as specifically set forth herein or therein, neither the Company nor the Holder makes any representation,
warranty, covenant or undertaking with respect to such matters; provided, however, that all representations and warranties contained
in Term Loan, shall be incorporated herein. No provision of this Agreement may be amended other than by an instrument in writing
signed by the Company and the Holder. No provision hereof may be waived other than by an instrument in writing signed by the party
against whom enforcement is sought.

 

    	 	19	 

     

    

 

Section
14. Notices. Any notices, consents, waivers or other communications required or permitted to be given under the terms of
this Agreement must be in writing and will be deemed to have been delivered: (a) upon receipt, when delivered personally; (b)
upon receipt, when sent by facsimile (provided confirmation of transmission is mechanically or electronically generated and kept
on file by the sending party); or (c) one calendar day (excluding Saturdays, Sundays, and national banking holidays) after deposit
with an overnight courier service, in each case properly addressed to the party to receive the same.

 

The
addresses and facsimile numbers for such communications shall be:

 

If
to the Company:

 

Amedica
Corporation

1885
West 2100 South

Salt
Lake City, UT 84119

Attn:
Ty Lombardi, Chief Financial Officer

  

If
to the Holder:

 

Riverside
Merchant Partners, LLC

810
7th Avenue, 18th Floor

New
York, NY 10019

Attn:
David Bocchi, Member

 

or
to such other address and/or facsimile number and/or to the attention of such other person as the recipient party has specified
by written notice given to each other party five (5) days prior to the effectiveness of such change.

 

Section
15. Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their respective
successors and assigns, including any purchasers of the Exchange Securities. The Holder may assign some or all of its rights hereunder
without the consent of the Company, in which event such assignee shall be deemed to be the Holder hereunder with respect to such
assigned rights.

 

Section
16. No Third Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective
permitted successors and assigns, and is not for the benefit of, nor may any provision hereof be enforced by, any other person.

 

Section
17. Survival of Representations. The representations and warranties of the Company and the Holder contained in Sections
2 and 3, respectively, will survive the closing of the transactions contemplated by this Agreement.

 

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

 

Section
19. Release from Obligations Under the Securities. Upon the completion of each Closing, the Holder acknowledges and agrees
that the Company shall be fully released from all obligations to the Holder under the Securities exchanged by the Holder pursuant
to such Closing. Notwithstanding the foregoing, in the event that the Exchange Securities are deemed invalid, the Company’s
obligations to the Holder under the Securities shall be reinstated retroactively to the date hereof and the obligations thereunder
shall be deemed to be continuing and in full force and effect.

 

[Signature
Page Follows]

 

    	 	20	 

     

    

 

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

 

	AMEDICA
    CORPORATION	 
	 	 
	By:	 	 
	Name:		 
	Title:	                      	 
	 	 	 
	US
    SPINE, INC.	 
	 	 	 
	By:	 	 
	Name:	 	 
	Title:	 	 
	 	 	 
	RIVERSIDE
    MERCHANT PARTNERS, LLC	 
	 	 	 
	By:	 	 
	Name:		 
	Title:	 	 

 

[Signature Page to
Exchange Agreement]

 

    	 	 	 

     

    

 

Exhibit
A

 

Securities

 

Pursuant
to that certain Assignment Agreement and Second Amendment to Loan and Security Agreement, dated as April 4, 2016 (the “Assignment
Agreement”) by and among the Company, the Holder, LLC, Hercules Technology III, L.P., a Delaware limited partnership,
and Hercules Capital, Inc. (fka, Hercules Technology Growth Capital, Inc.), a Maryland corporation, $1,000,0000 of the outstanding
principal of Term Loan.

 

Pursuant
to that certain Assignment Agreement and at the Holder’s option, an additional $2,000,0000 of the outstanding principal
of Term Loan.

 

    	 	 	 

     

    

 

EXHIBIT
B

 

Form
of and Schedule of Exchange Securities

 

	Securities Issuable on the First Closing Date	 	 	 	 
	 	 	 	 	 
	Subordinated Convertible Promissory Note, issued April 4, 2016	 	$	1,000,000	 
	 	 	 	 	 
	Common Stock Purchase Warrant to purchase 100,000 shares of the Company’s common stock,
    issued April 4, 2016	 	 	 	 
	 	 	 	 	 
	Securities Issuable on the Second Closing Date	 	 	 	 
	 	 	 	 	 
	Subordinated Convertible Promissory Note, which may be issued as set forth in Section 1.1(b)
    hereto	 	$	2,000,000	 
	 	 	 	 	 
	Common Stock Purchase Warrant to purchase 100,000 shares of the Company’s common stock,
    which may be issued as set forth in Section 1.1(b) heretoExhibit
10.3

 

PAYMENT
OF THE SUBORDINATED CONVERTIBLE PROMISSORY NOTE IS SUBJECT TO A SUBORDINATION AGREEMENT DATED APRIL 4, 2016, BETWEEN HERCULES
CAPITAL, INC., THE COMPANY AND HOLDER, AND NO PAYMENTS THEREOF MAY BE MADE EXCEPT AS PROVIDED IN SUCH SUBORDINATION AGREEMENT
AND AS SET FORTH HEREIN. A COPY OF THE SUBORDINATION AGREEMENT IS AVAILABLE FROM THE COMPANY ON WRITTEN REQUEST.

 

NEITHER
THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS CONVERTIBLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE
COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO,
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A
LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY.
THIS SECURITY AND THE SECURITIES ISSUABLE UPON CONVERSION OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN
ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.

 

	Original
    Issue Date: April 4, 2016	Original
    Principal Amount: $1,000,000
	Note:
    SCPN-No - 1	 

 

SUBORDINATED
CONVERTIBLE PROMISSORY NOTE

 

THIS
SUBORDINATED CONVERTIBLE PROMISSORY NOTE is a duly authorized and validly issued Convertible Note of Amedica Corporation, a Delaware
corporation, (the “Company”), having its principal place of business at 1885 West 2100 South, Salt Lake City,
UT 84119, designated as its Subordinated Convertible Promissory Note (this “Note”, or the “Note”).

 

FOR
VALUE RECEIVED, the Company promises to pay to Riverside Merchant Partners, LLC or its registered assigns (the “Holder”),
or shall have paid pursuant to the terms hereunder, the principal sum of $1,000,000 on demand after the Senior Debt Maturity Date
(defined below) (the “Maturity Date”), and to pay interest to the Holder on the aggregate unconverted and then
outstanding principal amount of this Note in accordance with the provisions hereof. This Note is subject to the following additional
provisions:

 

Section
1. Definitions. For the purposes hereof, in addition to the terms defined elsewhere in this Note, (a) capitalized terms
not otherwise defined herein shall have the meanings set forth in the Exchange Agreement (as defined below) or the Warrant (as
defined below) and (b) the following terms shall have the following meanings:

 

    	 	 	 

     

    

 

“Agent”
means Hercules Capital, Inc., a Maryland corporation.

 

“Alternate
Consideration” shall have the meaning set forth in Section 5(e).

 

“Bankruptcy
Event” means any of the following events: (a) the Company or any Subsidiary (as such term is defined in Rule 1-02(w)
of Regulation S-X) thereof commences a case or other proceeding under any bankruptcy, reorganization, arrangement, adjustment
of debt, relief of debtors, dissolution, insolvency or liquidation or similar law of any jurisdiction relating to the Company
or any Subsidiary thereof, (b) there is commenced against the Company or any Subsidiary thereof any such case or proceeding that
is not dismissed within 60 days after commencement, (c) the Company or any Subsidiary thereof is adjudicated insolvent or bankrupt
or any order of relief or other order approving any such case or proceeding is entered, (d) the Company or any Subsidiary thereof
suffers any appointment of any custodian or the like for it or any substantial part of its property that is not discharged or
stayed within 60 calendar days after such appointment, (e) the Company or any Subsidiary thereof makes a general assignment for
the benefit of creditors, or (f) the Company or any Subsidiary thereof, by any act or failure to act, expressly indicates its
consent to, approval of or acquiescence in any of the foregoing or takes any corporate or other action for the purpose of effecting
any of the foregoing.

 

“Beneficial
Ownership Limitation” shall have the meaning set forth in Section 4(e).

 

“Buy-In”
shall have the meaning set forth in Section 4(b)(v).

 

“Closing
Bid Price” shall mean for any security as of any date, the last closing bid price for such security on the Trading Market,
as reported by Bloomberg, or, if the Trading Market begins to operate on an extended hours basis and does not designate the closing
bid price, then the last bid price of such security prior to 4:00:00 p.m., New York Time, as reported by Bloomberg, or, if the
Trading Market is not the principal securities exchange or trading market for such security, the last closing bid price of such
security on the principal securities exchange or trading market where such security is listed or traded as reported by Bloomberg,
or if the foregoing do not apply, the last closing bid price of such security in the over-the-counter market on the electronic
bulletin board for such security as reported by Bloomberg, or, if no closing bid price is reported for such security by Bloomberg,
the average of the bid prices of any market makers for such security as reported in the OTC Link or “pink sheets”
by OTC Markets Group Inc. (formerly the Pink OTC Markets Inc.). If the Closing Bid Price cannot be calculated for a security on
a particular date on any of the foregoing bases, the Closing Bid Price of such security on such date shall be the fair market
value as mutually determined by the Company and the Holder.

 

“Common
Stock Equivalents” means any securities of the Company or any of its subsidiaries which would entitle the holder thereof
to acquire at any time shares of Common Stock, including, without limitation, any debt, preferred stock, rights, options, warrants
or other instrument that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the Holder
to receive, Common Stock.

 

    	 	 2	 

     

    

 

“Conversion
Date” shall have the meaning set forth in Section 4(a).

 

“Conversion
Price” shall have the meaning set forth in Section 4(b).

 

“Conversion
Schedule” means the Conversion Schedule in the form of Schedule 1 attached hereto.

 

“Conversion
Shares” means, collectively, the shares of Common Stock issuable upon conversion of this Note in accordance with the
terms hereof.

 

“Default
Redemption Amount” means the product of (i) 120% multiplied by (ii) the sum of (x) the aggregate principal amount outstanding
of this Note through and including the Default Redemption Date; (y) all accrued but unpaid principal due on this Note including,
but not limited to, as provided in the last sentence of Section 6 hereof, and (z) all other amounts owed under this Note including,
but not limited to, Late Fees and liquidated damages, all through and including the date all amounts herein are paid in cash to
the Holder.

 

“DTC”
means the Depository Trust Company.

 

“DTC/FAST
Program” means the DTC’s Fast Automated Securities Transfer Program.

 

“DWAC
Eligible” means that (a) the Common Stock is eligible at DTC for full services pursuant to DTC’s Operational Arrangements,
including without limitation transfer through DTC’s DWAC system, (b) the Company has been approved (without revocation)
by the DTC’s underwriting department, (c) the Transfer Agent is approved as an agent in the DTC/FAST Program, (d) the Conversion
Shares are otherwise eligible for delivery via DWAC, and (e) the Transfer Agent does not have a policy prohibiting or limiting
delivery of the Conversion Shares via DWAC.

 

“Equity
Conditions” means, during the period in question, (a) no Event of Default shall have occurred, (b) the Company has timely
filed (or obtain extensions in respect thereof and file within the applicable grace period) all reports other than Form 8-K reports
required to be filed by the Company after the date hereof pursuant to the Exchange Act, (c) on any date that the Company desires
to make a payment of interest and/or principal with stock and a condition of such payment is the existence of an Equity Condition,
the average daily dollar volume of the Common Stock for the previous twenty (20) consecutive trading days must be greater than
$60,000, (d) the shares of Common Stock must be DWAC Eligible and not subject to a “DTC Freeze,” or a “DTC chill”
(or other similar term), (e) the Conversion Shares are (i) neither “restricted shares” nor “control shares”
as defined pursuant to Rule 144 of the Securities Act, and (ii) may be sold (x) pursuant to Rule 144 without restriction and/or
volume limitation; or (y) pursuant to an effective Registration Statement, in both cases, however, sales shall be limited pursuant
to the Beneficial Ownership Limitations. If there is an Equity Condition, the Company will cause its securities counsel to deliver
any legal opinion to the Company’s transfer agent as is required to remove any restrictive legends after Holder delivers
standard representation letter to the Company.

 

    	 	 3	 

     

    

 

“Event
of Default” shall have the meaning set forth in Section 6(a).

 

“Exchange
Agreement” means the Exchange Agreement dated April 4, 2016, (including all exhibits thereto), by and between the Company
and Riverside Merchant Partners, LLC (“Riverside”) pursuant to which Riverside agreed to exchange up to $3,000,000
of the outstanding principal of the Term Loan held by Holder solely for certain other securities of the Company.

 

“Fundamental
Transaction” shall have the meaning set forth in Section 5(e).

 

“Late
Fees” shall have the meaning set forth in Section 2(c).

 

“Mandatory
Default Amount” means the payment of 120% of the outstanding principal amount of this Note and accrued and unpaid interest
hereon, in addition to the payment of all other amounts, costs, expenses, late fees, and liquidated damages due in respect of
this Note.

 

“New
York Courts” shall have the meaning set forth in Section 8(d).

 

“Note
Register” shall have the meaning set forth in Section 2(b).

 

“Notice
of Conversion” shall have the meaning set forth in Section 4(a).

 

“Obligations”
shall have the meaning provided in the Term Loan.

 

“Original
Issue Date” means the date of the first issuance of this Note, regardless of any transfers of any Note and regardless
of the number of instruments which may be issued to evidence such Notes.

 

“Person”
means any individual, sole proprietorship, partnership, joint venture, trust, unincorporated organization, association, corporation,
institution, entity, party or government (whether national, federal, state, county, city, municipal or otherwise including, without
limitation, any instrumentality, division, agency, body or department thereof).

 

“Qualified
Public Offering” means an offering that qualifies as a “public offering” pursuant to IM-5635-3 of the Nasdaq
Marketplace Rules.

 

    	 	 4	 

     

    

 

“Registration
Statement” means a registration statement covering the resale of the Conversion Shares by each Holder.

 

“Restricted
Person” shall have the meaning set forth in Section 9(a).

 

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

 

“Senior
Debt Maturity Date” means 91 days after all Senior Lender Obligations have been paid in full.

 

“Senior
Lender Obligations” mean the Obligations owed to Hercules Technology III, L.P., a Delaware limited partnership and Hercules
Capital, Inc. (f/k/a, Hercules Technology Growth Capital, Inc.), a Maryland corporation.

 

“Term
Loan” means that certain Loan and Security Agreement dated as of June 30, 2014, by and among the Company, Hercules Technology
III, L.P., a Delaware limited partnership and Hercules Capital, Inc. (f/k/a, Hercules Technology Growth Capital, Inc.), a Maryland
corporation, as such agreement may be amended from time to time.

 

“Share
Delivery Date” shall have the meaning set forth in Section 4(d)(ii).

 

“Successor
Entity” shall have the meaning set forth in Section 5(e).

 

“Trading
Market” means any of the following markets or exchanges on which the Common Stock (or any other common stock of any
other Person that references the Trading Market for its common stock) is listed or quoted for trading on the date in question:
the OTC Bulletin Board, The NASDAQ Global Market, The NASDAQ Global Select Market, The NASDAQ Capital Market, the New York Stock
Exchange, NYSE Arca, the NYSE MKT, or the OTCQX Marketplace, the OTCQB Marketplace, the OTCPink Marketplace or any other tier
operated by OTC Markets Group Inc. (or any successor to any of the foregoing).

 

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

 

    	 	 5	 

     

    

 

“Warrant”
means the Common Stock Purchase Warrant relating to 100,000 warrant shares issued by the Company to Holder, with an initial issuance
date of April 4, 2016.

 

Section
2. Interest.

 

a)
Payment of Interest in Cash or Kind. The Company shall pay interest to the Holder on the aggregate unconverted and then
outstanding principal amount of this Note at the rate of 6% per annum, of which interest amount for a period of twelve (12) months
shall be guaranteed and the total amount of interest due on the Note for a period of twelve (12) months shall be deemed earned
as of the Original Issue Date. All interest hereunder will be payable in cash, or subject to satisfaction of all of the Equity
Conditions, in cash or Common Stock in the Company’s discretion. Interest paid in Common Stock will be converted at ninety-four
percent (94%) of the Conversion Price. In the event that the interest due hereunder has not been paid in full prior to the Maturity
Date, the balance shall be paid in cash, or subject to satisfaction of all of the Equity Conditions, in cash or Common Stock in
the Holder’s discretion, on the Maturity Date.

 

b)
Interest Calculations. Interest shall be calculated on the basis of a 360-day year, consisting of twelve 30 calendar day
periods, and shall accrue and compound daily commencing on the Original Issue Date until payment in full of the outstanding principal,
together with all accrued and unpaid interest, liquidated damages and other amounts which may become due hereunder, has been made.
Interest hereunder will be paid to the Person in whose name this Note is registered on the records of the Company regarding registration
and transfers of this Note (the “Note Register”).

 

c)
Late Fee. All overdue accrued and unpaid interest to be paid hereunder shall entail a late fee at an interest rate equal
to the lesser of 18% per annum or the maximum rate permitted by applicable law (the “Late Fees”) which shall
accrue daily from the date such interest is due hereunder through and including the date of actual payment in full.

 

Section
3. Registration of Transfers and Exchanges.

 

a)
Different Denominations. This Note is exchangeable for an equal aggregate principal amount of Notes of different authorized
denominations, as requested by the Holder surrendering the same. No service charge will be payable for such registration of transfer
or exchange.

 

b)
Investment Representations. This Note has been issued subject to certain investment representations of the original Holder
set forth in the Exchange Agreement and may be transferred or exchanged only in compliance with therewith and applicable federal
and state securities laws and regulations.

 

    	 	 6	 

     

    

 

c)
Reliance on Note Register. Prior to due presentment for transfer to the Company of this Note, the Company and any agent
of the Company may treat the Person in whose name this Note is duly registered on the Note Register as the owner hereof for the
purpose of receiving payment as herein provided and for all other purposes, whether or not this Note is overdue, and neither the
Company nor any such agent shall be affected by notice to the contrary.

 

Section
4. Conversion.

 

a)
Voluntary Conversion. At any time after the Original Issue Date until all amounts due under this have been paid in full,
this Note shall be convertible, in whole or in part, into shares of Common Stock at the option of the Holder, at any time and
from time to time (subject to the conversion limitations set forth in Section 4(e) hereof). The Holder shall effect conversions
by delivering to the Company a Notice of Conversion, the form of which is attached hereto as Annex A (each, a “Notice
of Conversion”), specifying therein the principal amount of this Note and/or any other amounts due under this Note to
be converted and the date on which such conversion shall be effected (such date, the “Conversion Date”). If
no Conversion Date is specified in a Notice of Conversion, the Conversion Date shall be the date that such Notice of Conversion
is deemed delivered hereunder. No ink-original Notice of Conversion shall be required, nor shall any medallion guarantee (or other
type of guarantee or notarization) of any Notice of Conversion form be required. To effect conversions hereunder, the Holder
shall not be required to physically surrender this Note to the Company unless the entire principal amount of this Note, all accrued
and unpaid interest thereon and all other amounts due under this Note have been so converted. Conversions hereunder shall have
the effect of lowering the outstanding principal and interest of this Note in an amount equal to the applicable conversion amount.
The Holder and the Company shall maintain a Conversion Schedule showing the principal amount(s) and/or any other amounts due under
this Note converted and the date of such conversion(s). The Company may deliver an objection to any Notice of Conversion within
one (1) Business Day of delivery of such Notice of Conversion. In the event of any dispute or discrepancy, the records of the
Holder shall be controlling and determinative in the absence of manifest error. The Holder, and any assignee by acceptance
of this Note, acknowledge and agree that, by reason of the provisions of this paragraph, following conversion of a portion of
this Note, the unpaid and unconverted principal amount of this Note may be less than the amount stated on the face hereof.

 

(b)
Conversion Price. The conversion price shall be equal to $1.43 (the “Conversion Price”).

 

c)
[Reserved]

 

d)
Mechanics of Conversion.

 

    	 	 7	 

     

    

 

i.
Conversion Shares Issuable Upon a Conversion. The number of Conversion Shares issuable upon a conversion hereunder shall
be determined by the quotient obtained by dividing (x) the sum of all outstanding (i) principal, (ii) interest, and (iii) any
other amount due under this Note to be converted as provided in the applicable Notice of Conversion by (y) the Conversion Price.

 

ii.
Delivery of Certificate Upon Conversion. Not later than three (3) Trading Days after each Conversion Date (the “Share
Delivery Date”), the Company shall deliver, or cause to be delivered, to the Holder (A) a certificate or certificates
representing the Conversion Shares which, if the resale of such Conversion Shares are covered by and are being sold pursuant to
an effective Registration Statement or such Conversion Shares are eligible to be sold under Rule 144 without the need for current
public information and the Company has received an opinion of counsel to such effect reasonably acceptable to the Company (which
opinion the Company will be responsible for obtaining at its own cost), shall be free of restrictive legends and trading restrictions
(other than those which may then be required by the Exchange Agreement) representing the number of Conversion Shares being acquired
or being sold, as the case may be, upon the conversion of this Note, and (B) a bank check in the amount of accrued and unpaid
interest (if the Company has elected to pay accrued interest in cash). All certificate or certificates required to be delivered
by the Company under this Section 4(d) shall be delivered electronically through DTC or another established clearing corporation
performing similar functions, unless the Company or its Transfer Agent does not have an account with DTC and/or is not participating
in the DTC Fast Automated Securities Transfer Program, then the Company shall issue and deliver to the address as specified in
such Conversion Notice, a certificate (or certificates), registered in the name of the Holder or its designee, for the number
of Conversion Shares to which the Holder shall be entitled. If the Conversion Shares are not being sold pursuant to an effective
Registration Statement or if the Conversion Date is prior to the date on which such Conversion Shares are eligible to be sold
under Rule 144 without the need for current public information, the Conversion Shares shall bear a restrictive legend 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.”

 

    	 	 8	 

     

    

 

Notwithstanding
the foregoing, commencing on such date that the Conversion Shares are eligible for sale under Rule 144 subject to current public
information requirements, the Company, upon request and at the Company’s expense, shall obtain a legal opinion to allow
for such sales under Rule 144.

 

iii.
Failure to Deliver Certificates. If, in the case of any Notice of Conversion, such certificate or certificates are not
delivered to or as directed by the applicable Holder by the Share Delivery Date, the Holder shall be entitled to elect by written
notice to the Company at any time on or before its receipt of such certificate or certificates, to rescind such Conversion, in
which event the Company shall promptly return to the Holder any original Note delivered to the Company and the Holder shall promptly
return to the Company the Common Stock certificates issued to such Holder pursuant to the rescinded Conversion Notice.

 

iv.
Obligation Absolute; Partial Liquidated Damages. The Company’s obligations to issue and deliver the Conversion Shares
upon conversion of this Note in accordance with the terms hereof are absolute and unconditional, irrespective of any action or
inaction by the Holder to enforce the same, any waiver or consent with respect to any provision hereof, the recovery of any judgment
against any Person or any action to enforce the same, or any setoff, counterclaim, recoupment, limitation or termination, or any
breach or alleged breach by the Holder or any other Person of any obligation to the Company or any violation or alleged violation
of law by the Holder or any other Person, and irrespective of any other circumstance which might otherwise limit such obligation
of the Company to the Holder in connection with the issuance of such Conversion Shares; provided, however, that
such delivery shall not operate as a waiver by the Company of any such action the Company may have against the Holder. In the
event the Holder of this Note shall elect to convert any or all of the outstanding principal or interest amount hereof, the Company
may not refuse conversion based on any claim that the Holder or anyone associated or affiliated with the Holder has been engaged
in any violation of law, agreement or for any other reason, unless an injunction from a court, on notice to Holder, restraining
and or enjoining conversion of all or part of this Note shall have been sought. If the injunction is not granted, the Company
shall promptly comply with all conversion obligations herein. If the injunction is obtained, the Company must post a surety bond
for the benefit of the Holder in the amount of 150% of the outstanding principal amount of this Note, which is subject to the
injunction, which bond shall remain in effect until the completion of arbitration/litigation of the underlying dispute and the
proceeds of which shall be payable to the Holder to the extent it obtains judgment. In the absence of seeking such injunction,
the Company shall issue Conversion Shares or, if applicable, cash, upon a properly noticed conversion. If the Company fails for
any reason to deliver to the Holder such certificate or certificates pursuant to Section 4(d)(ii) by the Share Delivery Date,
the Company shall pay to the Holder, in cash, as liquidated damages and not as a penalty, $1,000 per Trading Day for each Trading
Day after such Share Delivery Date until such certificates are delivered or Holder rescinds such conversion. Nothing herein shall
limit a Holder’s right to pursue actual damages or declare an Event of Default pursuant to Section 6 hereof for the Company’s
failure to deliver Conversion Shares within the period specified herein and the Holder shall have the right to pursue all remedies
available to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive
relief. The exercise of any such rights shall not prohibit the Holder from seeking to enforce damages pursuant to any other Section
hereof or under applicable law.

 

    	 	 9	 

     

    

 

v.
Compensation for Buy-In on Failure to Timely Deliver Certificates Upon Conversion. In addition to any other rights available
to the Holder, if the Company fails for any reason to deliver to the Holder such certificate or certificates by the Share Delivery
Date pursuant to Section 4(d)(ii), and if after such Share Delivery Date the Holder is required by its brokerage firm to purchase
(in an open market transaction or otherwise), or the Holder’s brokerage firm otherwise purchases, shares of Common Stock
to deliver in satisfaction of a sale by the Holder of the Conversion Shares which the Holder was entitled to receive upon the
conversion relating to such Share Delivery Date (a “Buy-In”), then the Company shall (A) pay in cash to the
Holder (in addition to any other remedies available to or elected by the Holder) the amount, if any, by which (x) the Holder’s
total purchase price (including any brokerage commissions) for the Common Stock so purchased exceeds (y) the product of (1) the
aggregate number of shares of Common Stock that the Holder was entitled to receive from the conversion at issue multiplied by
(2) the actual sale price at which the sell order giving rise to such purchase obligation was executed (including any brokerage
commissions) and (B) at the option of the Holder, either reissue (if surrendered) this Note in a principal amount equal to the
principal amount of the attempted conversion (in which case such conversion shall be deemed rescinded) or deliver to the Holder
the number of shares of Common Stock that would have been issued if the Company had timely complied with its delivery requirements
under Section 4(d)(ii). For example, if the Holder purchases Common Stock having a total purchase price of $11,000 to cover a
Buy-In with respect to an attempted conversion of this Note with respect to which the actual sale price of the Conversion Shares
(including any brokerage commissions) giving rise to such purchase obligation was a total of $10,000 under clause (A) of the immediately
preceding sentence, the Company shall be required to pay the Holder $1,000. The Holder shall provide the Company written notice
indicating the amounts payable to the Holder in respect of the Buy-In and, upon request of the Company, evidence of the amount
of such loss. Nothing herein shall limit a Holder’s right to pursue any other remedies available to it hereunder, at law
or in equity including, without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s
failure to timely deliver certificates representing shares of Common Stock upon conversion of this Note as required pursuant to
the terms hereof.

 

vi.
Reservation of Shares Issuable Upon Conversion. The Company covenants that it will at all times reserve and keep available
out of its authorized and unissued shares of Common Stock a number of shares of Common Stock at least equal to [________] for
the sole purpose of issuance upon conversion of this Note and payment of interest on this Note, each as herein provided, free
from preemptive rights or any other actual contingent purchase rights of Persons other than the Holder (and the other holders
of the Notes), not less than such aggregate number of shares of the Common Stock as shall (subject to the terms and conditions
set forth in the Exchange Agreement) be issuable (taking into account the adjustments and restrictions of Section 5, but ignoring
any Beneficial Ownership Limitations or other restrictions and/or limitations on conversions set forth herein or elsewhere) upon
the conversion of the then outstanding principal amount of this Note and payment of interest hereunder. The Company covenants
that all shares of Common Stock that shall be so issuable shall, upon issue, be duly authorized, validly issued, fully paid and
nonassessable, and, at such times as a Registration Statement covering such shares is then effective under the Securities Act,
will be registered for public resale in accordance with such Registration Statement.

 

vii.
Fractional Shares. No fractional shares or scrip representing fractional shares shall be issued upon the conversion of
this Note. As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such conversion, the Company
shall at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied
by the Conversion Price or round up to the next whole share.

 

    	 	 10	 

     

    

 

viii.
Transfer Taxes and Expenses. The issuance of certificates for shares of the Common Stock on conversion of this Note shall
be made without charge to the Holder hereof for any documentary stamp or similar taxes that may be payable in respect of the issue
or delivery of such certificates, provided that, the Company shall not be required to pay any tax that may be payable in respect
of any transfer involved in the issuance and delivery of any such certificate upon conversion in a name other than that of the
Holder of this Note so converted and the Company shall not be required to issue or deliver such certificates unless or until the
Person or Persons requesting the issuance thereof shall have paid to the Company the amount of such tax or shall have established
to the satisfaction of the Company that such tax has been paid. The Company shall pay all Transfer Agent fees required for same-day
processing of any Notice of Conversion.

 

e)
Holder’s Conversion Limitations. The Company shall not effect any conversion of principal and/or interest of this
Note, and a Holder shall not have the right to convert any principal and/or interest of this Note, to the extent that after giving
effect to the conversion set forth on the applicable Notice of Conversion, the Holder (together with the Holder’s Affiliates,
and any Persons acting as a group together with the Holder or any of the Holder’s Affiliates) would beneficially own in
excess of the Beneficial Ownership Limitation (as defined below). For purposes of the foregoing sentence, the number of shares
of Common Stock beneficially owned by the Holder and its Affiliates shall include the number of shares of Common Stock issuable
upon conversion of this Note with respect to which such determination is being made, but shall exclude the number of shares of
Common Stock which are issuable upon (i) conversion of the remaining, unconverted principal amount of this Note beneficially owned
by the Holder or any of its Affiliates and (ii) exercise or conversion of the unexercised or unconverted portion of any other
securities of the Company subject to a limitation on conversion or exercise analogous to the limitation contained herein (including,
without limitation, any other Notes) beneficially owned by the Holder or any of its Affiliates. Except as set forth in the preceding
sentence, for purposes of this Section 4(e), beneficial ownership shall be calculated in accordance with Section 13(d) of the
Exchange Act and the rules and regulations promulgated thereunder. To the extent that the limitation contained in this Section
4(e) applies, the determination of whether this Note is convertible (in relation to other securities owned by the Holder together
with any Affiliates) and of which principal amount of this Note is convertible shall be in the sole discretion of the Holder,
and the submission of a Notice of Conversion shall be deemed to be the Holder’s determination of whether this Note may be
converted (in relation to other securities owned by the Holder together with any Affiliates) and which principal amount of this
Note is convertible, in each case subject to the Beneficial Ownership Limitation. To ensure compliance with this restriction,
the Holder will be deemed to represent to the Company each time it delivers a Notice of Conversion that such Notice of Conversion
has not violated the restrictions set forth in this paragraph and the Company shall have no obligation to verify or confirm the
accuracy of such determination. In addition, a determination as to any group status as contemplated above shall be determined
in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. For purposes of this
Section 4(e), in determining the number of outstanding shares of Common Stock, the Holder may rely on the number of outstanding
shares of Common Stock as stated in the most recent of the following: (i) the Company’s most recent periodic or annual report
filed with the Commission, as the case may be, (ii) a more recent public announcement by the Company, or (iii) a more recent written
notice by the Company or the Company’s transfer agent setting forth the number of shares of Common Stock outstanding. Upon
the written or oral request of a Holder, the Company shall within two Trading Days confirm orally and in writing to the Holder
the number of shares of Common Stock then outstanding. In any case, the number of outstanding shares of Common Stock shall be
determined after giving effect to the conversion or exercise of securities of the Company, including this Note, by the Holder
or its Affiliates since the date as of which such number of outstanding shares of Common Stock was reported. The “Beneficial
Ownership Limitation” shall be 4.99% of the number of shares of the Common Stock outstanding immediately after giving
effect to the issuance of shares of Common Stock issuable upon conversion of this Note held by the Holder. The Holder, upon not
less than 61 days’ prior notice to the Company, may increase or decrease the Beneficial Ownership Limitation provisions
of this Section 4(e), provided that the Beneficial Ownership Limitation in no event exceeds 19.99% of the number of shares of
the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock upon conversion of this
Note held by the Holder and the Beneficial Ownership Limitation provisions of this Section 4(e) shall continue to apply. Any such
increase or decrease will not be effective until the 61st day after such notice is delivered to the Company. The Beneficial
Ownership Limitation provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity
with the terms of this Section 4(e) to correct this paragraph (or any portion hereof) which may be defective or inconsistent with
the intended Beneficial Ownership Limitation contained herein or to make changes or supplements necessary or desirable to properly
give effect to such limitation. The limitations contained in this paragraph shall apply to a successor holder of this Note.

 

    	 	 11	 

     

    

 

Section
5. Certain Adjustments.

 

a)
Stock Dividends and Stock Splits. If the Company, at any time while this Note is outstanding: (i) pays a stock dividend
or otherwise makes a distribution or distributions payable in shares of Common Stock on shares of Common Stock or any Common Stock
Equivalents (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Company upon conversion
of, or payment of interest on, the Notes), (ii) subdivides outstanding shares of Common Stock into a larger number of shares,
(iii) combines (including by way of a reverse stock split) outstanding shares of Common Stock into a smaller number of shares
or (iv) issues, in the event of a reclassification of shares of the Common Stock, any shares of capital stock of the Company,
then the Conversion Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock
(excluding any treasury shares of the Company) outstanding immediately before such event, and of which the denominator shall be
the number of shares of Common Stock outstanding immediately after such event. Any adjustment made pursuant to this Section shall
become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or
distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or re-classification.

 

b)
True Up Shares. If the VWAP of the Common Stock on any of the twenty (20) Trading Days immediately following the date of
issuance of this Note (the “Subsequent Pricing Period”), is below the Conversion Price (after all adjustments
herein provided for in this Section 5), then the Company shall issue 150,000 shares of Common Stock to the Holder (the
“True-Up Shares”). The True-Up Shares shall be issued within two (2) Trading Days of the Investor’s notice to
the Company requesting the issuance of the True-Up Shares. For the avoidance of doubt, the maximum amount of shares of Common
Stock that the Company may be required to issue pursuant to this Section 5(b) is 150,000.

 

    	 	 12	 

     

    

 

c)
Subsequent Rights Offerings. In addition to any adjustments pursuant to Section 5(a) above, if at any time the Company
grants, issues or sells any Common Stock Equivalents 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”), then the Holder will
be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could
have acquired if the Holder had held the number of shares of Common Stock acquirable upon complete conversion of this Note (without
regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) 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 shares of Common Stock are to be determined for the grant, issue or sale of such Purchase
Rights (provided, however, to the extent that the Holder’s right to participate in any such Purchase Right would result
in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Purchase
Right to such extent (or beneficial ownership of such shares of Common Stock as a result of such Purchase Right to such extent)
and such Purchase Right to such extent shall be held in abeyance for the Holder until such time, if ever, as its right thereto
would not result in the Holder exceeding the Beneficial Ownership Limitation).

 

d)
Intentionally omitted.

 

e)
Fundamental Transaction. If, at any time while this Note is outstanding, (i) the Company, directly or indirectly, in one
or more related transactions effects any merger or consolidation of the Company with or into another Person, (ii) the Company,
directly or indirectly, effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially
all of its assets in one or a series of related transactions, (iii) any, direct or indirect, purchase offer, tender offer or exchange
offer (whether by the Company or another Person) is completed pursuant to which holders of Common Stock are permitted to sell,
tender or exchange their shares for other securities, cash or property and has been accepted by the holders of 50% or more of
the outstanding Common Stock, (iv) the Company, directly or indirectly, in one or more related transactions effects any reclassification,
reorganization or recapitalization of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is
effectively converted into or exchanged for other securities, cash or property, or (v) the Company, directly or indirectly, in
one or more related transactions consummates a stock or share 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 or share
purchase agreement or other business combination) (each a “Fundamental Transaction”), then, upon any subsequent conversion
of this Note, the Holder shall have the right to receive, for each Conversion Share that would have been issuable upon such conversion
immediately prior to the occurrence of such Fundamental Transaction, at the option of the Holder (without regard to any limitation
in Section 4(d) on the conversion of this Note), the number of shares of Common Stock of the successor or acquiring corporation
or of the Company, if it is the surviving corporation, and any additional consideration (the “Alternate Consideration”)
receivable as a result of such Fundamental Transaction by a holder of the number of shares of Common Stock for which this Note
is convertible immediately prior to such Fundamental Transaction (without regard to any limitation in Section 4(d) on the conversion
of this Note). For purposes of any such conversion, the determination of the Conversion Price shall be appropriately adjusted
to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one (1) share of
Common Stock in such Fundamental Transaction, and the Company shall apportion the Conversion Price among the Alternate Consideration
in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration. If holders of
Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the
Holder shall be given the same choice as to the Alternate Consideration it receives upon any conversion of this Note following
such Fundamental Transaction. Notwithstanding anything to the contrary, in the event of a Fundamental Transaction that is (1)
an all cash transaction, (2) a “Rule 13e-3 transaction” as defined in Rule 13e-3 under the Exchange Act, or (3) a
Fundamental Transaction involving a person or entity not traded on a national securities exchange and only if such Fundamental
Transaction is within the Company’s control, the Company or any Successor Entity (as defined below) shall, at the Holder’s
option, exercisable at any time concurrently with, or within thirty (30) days after, the consummation of the Fundamental Transaction,
purchase this Note from the Holder by paying to the Holder an amount of cash equal to the Black Scholes Value of the remaining
unconverted portion of this Note on the date of the consummation of such Fundamental Transaction; provided, however, if the Fundamental
Transaction is not within the Company’s control, including not approved by the Company’s Board of Directors, Holder
shall not have the option to require the Company to purchase its Note. The Company shall cause any successor entity in a Fundamental
Transaction in which the Company is not the survivor (the “Successor Entity”) to assume in writing all of the obligations
of the Company under this Note and the other Transaction Documents in accordance with the provisions of this Section 5(e) pursuant
to written agreements prior to such Fundamental Transaction and shall, at the option of the Holder deliver to the Holder in exchange
for this Note a security of the Successor Entity evidenced by a written instrument substantially similar in form and substance
to this Note which is convertible for a corresponding number of shares of capital stock of such Successor Entity (or its parent
entity) equivalent to the shares of Common Stock acquirable and receivable upon conversion of this Note (without regard to any
limitations on the conversion of this Note) prior to such Fundamental Transaction, and with a conversion price which applies the
conversion price hereunder to such shares of capital stock (but taking into account the relative value of the shares of Common
Stock pursuant to such Fundamental Transaction and the value of such shares of capital stock, such number of shares of capital
stock and such conversion price being for the purpose of protecting the economic value of this Note immediately prior to the consummation
of such Fundamental Transaction), and which is reasonably satisfactory in form and substance to the Holder. Upon the occurrence
of any such Fundamental Transaction, the Successor Entity shall succeed to, and be substituted for (so that from and after the
date of such Fundamental Transaction, the provisions of this Note and the other Transaction Documents referring to the “Company”
shall refer instead to the Successor Entity), and may exercise every right and power of the Company and shall assume all of the
obligations of the Company under this Note and the other Transaction Documents with the same effect as if such Successor Entity
had been named as the Company herein. For the avoidance of doubt, if, at any time while this Note is outstanding, a Fundamental
Transaction occurs, pursuant to the terms of this Section 5(e), the Holder shall not be entitled to receive more than one of (i)
the consideration receivable as a result of such Fundamental Transaction by a holder of the number of shares of Common Stock for
which this Note is convertible immediately prior to such Fundamental Transaction, (ii) an amount of cash equal to the Black Scholes
Value of the remaining unconverted portion of this Note on the date of the consummation of such Fundamental Transaction, or (iii)
the assumption by the Successor Entity of all of the obligations of the Company under this Note and the other Transaction Documents
and the option to receive a security of the Successor Entity evidenced by a written instrument substantially similar in form and
substance to this Note.

 

    	 	 13	 

     

    

 

f)
Calculations. All calculations under this Section 5 shall be made to the nearest cent or the nearest 1/100th of a share,
as the case may be. For purposes of this Section 5, the number of shares of Common Stock deemed to be issued and outstanding as
of a given date shall be the sum of the number of shares of Common Stock (excluding any treasury shares of the Company) issued
and outstanding.

 

g)
Notice to the Holder.

 

i.
Adjustment to Conversion Price. Whenever the Conversion Price is adjusted pursuant to any provision of this Section 5,
the Company shall promptly deliver to each Holder a notice setting forth the Conversion Price after such adjustment and setting
forth a brief statement of the facts requiring such adjustment.

 

ii.
Notice to Allow Conversion by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever
form) on the Common Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common
Stock, (C) the Company shall authorize the granting to all holders of the Common Stock of rights or warrants to subscribe for
or purchase any shares of capital stock of any class or of any rights, (D) the approval of any stockholders of the Company shall
be required in connection with any reclassification of the Common Stock, any consolidation or merger to which the Company is a
party, any sale or transfer of all or substantially all of the assets of the Company, or any compulsory share exchange whereby
the Common Stock is converted into other securities, cash or property or (E) the Company shall authorize the voluntary or involuntary
dissolution, liquidation or winding up of the affairs of the Company, then, in each case, the Company shall cause to be filed
at each office or agency maintained for the purpose of conversion of this Note, and shall cause to be delivered to the Holder
at its last address as it shall appear upon the Note Register, at least twenty (20) calendar days prior to the applicable record
or effective date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such
dividend, distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of
the Common Stock of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined
or (y) the date on which such reclassification, consolidation, merger, sale, transfer or share exchange is expected to become
effective or close, and the date as of which it is expected that holders of the Common Stock of record shall be entitled to exchange
their shares of the Common Stock for securities, cash or other property deliverable upon such reclassification, consolidation,
merger, sale, transfer or share exchange, provided that the failure to deliver such notice or any defect therein or in the delivery
thereof shall not affect the validity of the corporate action required to be specified in such notice. To the extent that any
notice provided hereunder constitutes, or contains, material, non-public information regarding the Company or any of the Subsidiaries,
the Company shall simultaneously file such notice with the Commission pursuant to a Current Report on Form 8-K. The Holder shall
remain entitled to convert this Note during the 20-day period commencing on the date of such notice through the effective date
of the event triggering such notice except as may otherwise be expressly set forth herein.

 

 

    	 	 14	 

     

    

 

Section
6. Events of Default.

 

a)
“Event of Default” means, wherever used herein, any of the following events (whatever the reason for such event
and whether such event shall be voluntary or involuntary or effected by operation of law or pursuant to any judgment, decree or
order of any court, or any order, rule or regulation of any administrative or governmental body):

 

i.
any default in the payment of (A) the principal amount of any Note or (B) interest, liquidated damages, Late Fees and other amounts
owing to a Holder on any Note, as and when the same shall become due and payable (whether on a Conversion Date or the Maturity
Date or by acceleration or otherwise) which default, solely in the case of an interest payment or other default under clause (B)
above, is not cured within three (3) Trading Days;

 

ii.
the Company shall fail to observe or perform any other material covenant or agreement contained in the Notes (and other than a
breach by the Company of its obligations to deliver shares of Common Stock to the Holder upon conversion, which breach is addressed
in clause (ix) below) which failure is not cured, if possible to cure, within the earlier to occur of (A) five (5) Trading Days
after notice of such failure sent by the Holder or by any other Holder to the Company and (B) ten (10) Trading Days after the
Company has become or should have become aware of such failure;

 

iii.
a material default or material event of default (subject to any grace or cure period provided in the applicable agreement, document
or instrument) shall occur under (A) any of the Transaction Documents or (B) any other material agreement, lease, document or
instrument to which the Company or any Subsidiary is obligated and/or which any of their respective assets are subject to or bound
by (and not covered by clause (vi) below);

 

iv.
any representation or warranty made in this Note, any other Transaction Documents, any written statement pursuant hereto or thereto
or any other report, financial statement or certificate made or delivered to the Holder or any other Holder shall be untrue or
incorrect in any material respect as of the date when made or deemed made;

 

v.
the Company or any Subsidiary (as such term is defined in Rule 1-02(w) of Regulation S-X) shall be subject to a Bankruptcy Event;

 

vi.
the Company or any Subsidiary shall default on any of its obligations under 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 that (a) involves
an obligation greater than $50,000, whether such indebtedness now exists or shall hereafter be created, and (b) results in such
indebtedness becoming or being declared due and payable prior to the date on which it would otherwise become due and payable;

 

vii.
the Common Stock shall not be eligible for listing or quotation for trading on a Trading Market and shall not be eligible to resume
listing or quotation for trading thereon within five Trading Days or the transfer of shares of Common Stock through the Depository
Trust Company System is no longer available, “frozen” or “chilled”;

 

viii.
[Reserved]

 

ix.
the Company does not meet the current public information requirements under Rule 144 in respect of the Conversion Shares or the
Warrant Shares;

 

x.
the Company shall fail for any reason to deliver certificates to a Holder prior to the third Trading Day after a Conversion Date
pursuant to Section 4(c) or the Company shall provide at any time notice to the Holder, including by way of public announcement,
of the Company’s intention to not honor requests for conversions of any Notes in accordance with the terms hereof;

 

    	 	 15	 

     

    

 

xi.
the Company fails to file with the Commission any required reports under Section 13 or 15(d) of the Exchange Act such that it
is not in compliance with Rule 144(c)(1) (or Rule 144(i)(2), if applicable);

 

xii.
the Company or any Subsidiary shall: (i) apply for or consent to the appointment of a receiver, trustee, custodian or liquidator
of it or any of its properties, (ii) admit in writing its inability to pay its debts as they mature, (iii) make a general assignment
for the benefit of creditors, (iv) be adjudicated a bankrupt or insolvent or be the subject of an order for relief under Title
11 of the United States Code or any bankruptcy, reorganization, insolvency, readjustment of debt, dissolution or liquidation law
or statute of any other jurisdiction or foreign country, or (v) file a voluntary petition in bankruptcy, or a petition or an answer
seeking reorganization or an arrangement with creditors or to take advantage or any bankruptcy, reorganization, insolvency, readjustment
of debt, dissolution or liquidation law or statute, or an answer admitting the material allegations of a petition filed against
it in any proceeding under any such law, or (vi) take or permit to be taken any action in furtherance of or for the purpose of
effecting any of the foregoing;

 

xiii.
if any order, judgment or decree shall be entered, without the application, approval or consent of the Company or any Subsidiary,
by any court of competent jurisdiction, approving a petition seeking liquidation or reorganization of the Company or any Subsidiary,
or appointing a receiver, trustee, custodian or liquidator of the Company or any Subsidiary, or of all or any substantial part
of its assets, and such order, judgment or decree shall continue unstayed and in effect for any period of sixty (60) days;

 

xiv.
the occurrence of any levy upon or seizure or attachment of, or any uninsured loss of or damage to, any property of the Company
or any Subsidiary having an aggregate fair value or repair cost (as the case may be) in excess of $150,000 individually or in
the aggregate, and any such levy, seizure or attachment shall not be set aside, bonded or discharged within thirty (30) days after
the date thereof;

 

xv.
the Company shall fail to maintain sufficient reserved shares pursuant to the Purchase Agreement;

 

xvi.
any monetary judgment, writ or similar final process shall be entered or filed against the Company, any subsidiary or any of their
respective property or other assets for more than $150,000, and such judgment, writ or similar final process shall remain unvacated,
unbonded or unstayed for a period of 45 calendar days;

 

xvii.
the Company, without the written consent of the Holders, shall 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;

 

    	 	 16	 

     

    

 

xviii.
the Company, without the written consent of the Holders, shall enter into, create, incur, assume or suffer to exist any liens
of any kind, on or with respect to any of its property or assets now owned or hereafter acquired or any interest therein or any
income or profits therefrom; or

 

xix.
the Company enters into any transaction with any Affiliate of the Company which would be required to be disclosed in any public
filing with the Commission.

 

b)
Remedies Upon Event of Default. Subject to the Beneficial Ownership Limitation as set forth in Section 4(e) and subject
to the last sentence of this Subsection, if any Event of Default occurs after the Senior Debt Maturity Date, then the outstanding
principal amount of this Note, plus accrued but unpaid interest, liquidated damages and other amounts owing in respect thereof
through the date of acceleration, shall become, at the Holder’s election, immediately due and payable in cash at the Mandatory
Default Amount. After the occurrence of any Event of Default that results in the eventual acceleration of this Note, the interest
rate on this Note shall accrue at an additional interest rate equal to the lesser of 1.5% per month (18% per annum) or the maximum
rate permitted under applicable law, provided however, that any such increase shall be added to the principal amount. Upon the
payment in full of the Mandatory Default Amount, the Holder shall promptly surrender this Note to or as directed by the Company.
In connection with such acceleration described herein, the Holder need not provide, and the Company hereby waives, any presentment,
demand, protest or other notice of any kind, and the Holder may immediately and without expiration of any grace period enforce
any and all of its rights and remedies hereunder and all other remedies available to it under applicable law. Such acceleration
may be rescinded and annulled by Holder at any time prior to payment hereunder and the Holder shall have all rights as a holder
of the Note until such time, if any, as the Holder receives full payment pursuant to this Section 6(b). No such rescission or
annulment shall affect any subsequent Event of Default or impair any right consequent thereon. Alternatively, at the election
of the Holder, the Holder may require the Company to (i) redeem all of the Notes then held by such Holder through the issuance
to such Holder of such number of shares of Common Stock equal to the quotient of (x) the Default Redemption Amount, divided by
the Conversion Price; or (ii) increase the dividend rate on all of the outstanding Notes held by such Holder retroactively to
the initial Closing Date to 18% per annum thereafter provided however that any such increase shall be added to the principal amount.
The Default Redemption Amount, whether payable in cash or in shares, shall be due and payable or issuable, as the case may be,
within five (5) Trading Days of the date on which the notice for the payment therefor is provided by a Holder the (“Default
Redemption Payment Date”). If the Company fails to pay in full the Default Redemption Amount hereunder on the date such
amount is due in accordance with this Section (whether in cash or shares of Common Stock), the Company will pay interest thereon
at a rate equal to the lesser of 18% per annum or the maximum rate permitted by applicable law, accruing and compounding daily
from such date until the Default Redemption Amount, plus all such interest thereon, is paid in full, provided however, that any
such interest shall be added to the principal amount. Notwithstanding anything to the contrary contained in this Section 6(b),
any cash payment(s) (including without limitation, any and all applicable penalties and late fees), including without limitation
the Mandatory Default Amount and the Default Redemption Amount, that the Company shall be required to make to Holder under this
Section 6(b) shall be deferred until all obligations to lenders under the Term Loan are paid in full.

 

    	 	 17	 

     

    

 

Section
7. Prepayment

 

After
the Senior Lender Maturity Date, at any time upon five (5) days prior written notice to the Holder, but subject to the Holder’s
conversion rights set forth herein, the Company may prepay any portion of the principal amount of this Note, all accrued and unpaid
interest relating to such prepaid portion of the principal and all other amounts due under this Note. The written notice shall,
among other items, state the date such Prepayment Amount (as defined below) is to be paid to the Holder, which shall not in any
event be later than five (5) days from the date of mailing of the prepayment notice to the Holder (“the Prepayment Date”).
If the Company exercises its right to prepay the Note, the Company shall make payment to the Holder of an amount in cash equal
to the product of (i) the sum of (x) the then outstanding principal amount of this Note, (y) all accrued but unpaid interest and
(z) all other amounts owed pursuant to this Note including, but not limited to, all Late Fees and liquidated damages (collectively
the “Prepayment Amount”), multiplied by (ii) (x) 115%. The Holder may continue to convert the Note from the
date notice of the prepayment is given until the date the Holder receives in full, the Prepayment Amount. If the entire Prepayment
Amount is not received by the Holder in immediately available funds by wire transfer pursuant to wire transfer instructions provided
to the Company by the Holder, on or before the Prepayment Date, such shall, (at the election of the Holder) be an Event of Default
of the payment of principal pursuant to Section 6(a)(1) hereof.

 

Section
8. Participation in Qualified Public Offering

 

Subject
to compliance with all applicable laws and the rules of the applicable Trading Market, if the Company engages in a Qualified Public
Offering while this Note is outstanding, at the Company’s option, Holder shall have the right to participate in such offering
by applying any or all of the outstanding principal amount of this Note (the “Applied Principal”), plus a prepayment
penalty of an additional 20% of the Applied Principal, to the Holder’s purchase of the securities offered in the Qualified
Public Offering and reducing the outstanding principal under this Note by the Applied Principal. Holder agrees to be subject to
the same rights and obligations of any investor in such Qualified Public Offering. 

 

Section
9 . No Short Sales; Volume Restrictions

 

a)
No Short Sales. So long as the Note remains outstanding, neither Holder nor any of its affiliates nor any entity managed
or controlled by the Holder (collectively, the “Restricted Persons” and each of the foregoing is referred to
herein as a “Restricted Person”) shall, directly or indirectly, engage in any Short Sales involving the Company’s
securities. Notwithstanding the foregoing, it is expressly understood and agreed that nothing contained herein shall (without
implication that the contrary would otherwise be true) prohibit any Restricted Person from: (1) selling “long” (as
defined under Rule 200 promulgated under Regulation SHO) the Securities; or (2) selling a number of shares of Common Stock equal
to the number of Conversion Shares and/or Warrant Shares, as applicable, that such Restricted Person is entitled to receive under
a pending Conversion Notice and/or Exercise Notice but has not yet taken possession of so long as such Restricted Person delivers
the Conversion Shares purchased pursuant to such Conversion Notice and/or the Warrant Shares purchased pursuant to such Exercise
Notice, as applicable, to the purchaser thereof; provided, however, such Restricted Person shall not be required to so deliver
any such Conversion Shares subject to such Conversion Notice or the Warrant Shares purchased pursuant to such Exercise Notice,
as applicable, if the Company fails for any reason to deliver such Conversion Shares to Holder on the applicable settlement date
upon the terms and subject to the provisions of the Note and/or such Warrant Shares to Holder on the applicable settlement date
upon the terms and subject to the provisions of the Warrants, as applicable.

 

    	 	 18	 

     

    

 

b)
Volume Restriction. Unless otherwise mutually agreed by the Company and Holder, Holder shall not sell Conversion Shares
of the Company issued to Holder in conjunction herewith in an amount, in the aggregate, exceeding 20% of the composite aggregate
dollar trading volume of the Common Stock of the Company as reported on Bloomberg, L.P. on any Trading Day; provided, however,
that during the Subsequent Pricing Period, the Holder shall not sell Conversion Shares in an amount, in the aggregate, exceeding
5% of the composite aggregate dollar trading volume of the Common Stock of the Company as reported on Bloomberg, L.P. on any Trading
Day, which restriction shall terminate at the end of the Subsequent Pricing Period. Notwithstanding the foregoing, if the Common
Stock closes below $1.25 or above $3.25 or an Event of Default occurs and is continuing, the foregoing restrictions (the “Restrictions”)
shall be removed. If the Common Stock subsequently closes between $1.25 and $3.25 or the Company cures any Event of Default, the
Restrictions shall be reinstated.

 

Section
10. Share Issuance Cap. In connection with the conversion of this Note and the Second Exchange Note, collectively,
the Company shall not be required to issue in the aggregate more than 19.99% of the number of shares of Common Stock or 19.99%
of the voting power of the Company issued and outstanding immediately prior to the date hereof, and in no event shall the Company
be required to pay any penalties or fees of any kind due to the operation of the provisions contained in this Section 10.

 

Section
11. Qualified Public Offering. In the event that (i) the Company conducts a Qualified Public Offering while this Note
is outstanding or (ii) the Holder converts three million dollars ($3,000,000) (the “Minimum Conversion Amount”)
of the outstanding principal under this Note and the Second Exchange Note, collectively, prior to the three month anniversary
of the issuance of this Note and the Company conducts a Qualified Public Offering during the six month period following the date
on which the aggregate conversions by the Holder equals the Minimum Conversion Amount, then the Company agrees that, at the Holder’s
option, it shall engage Aegis Capital Corp. as the joint book-runner or co-lead placement agent, and it further agrees that Aegis
Capital Corp. shall receive standard industry compensation in connection therewith.

 

Section
12. Future Exchange Transactions. The Company and the Holder agree that:

 

a)
During the period commencing on the date hereof and for so long as either this Note remains outstanding and/or until the Second
Exchange Note is no longer outstanding, neither the Company nor any of its affiliates or Subsidiaries, nor any of its or their
respective officers, employees, directors, agents or other representatives, will, without the prior written consent of the Holder
(which consent may be withheld, delayed or conditioned in the Holder’s sole discretion), directly or indirectly: solicit,
initiate, encourage or accept any other inquiries, proposals, or offers from any Person (other than the Holder) relating to any
exchange of the Term Loan for any other security of the Company or any of its Subsidiaries; provided, however, that in the event
that (i) the Second Exchange has occurred prior to May 3, 2016 or (ii) the Second Exchange has not occurred prior to May 3, 2016
and the Company and the Holder are unable, in good faith, to agree on an extension of time beyond such date, then the Company
shall not be required to obtain consent of the Holder after a date that is twenty (20) Trading Days after May 3, 2016 (the “Consent
Termination”).

 

    	 	 19	 

     

    

 

b)
During the period commencing on the Consent Termination and continuing until neither this Note nor the Second Exchange Note remains
outstanding (the “ROFR Period”), the Company shall not enter into any agreement or consummate any transaction
relating to the exchange of any portion of the Term Loan for any other security of the Company or any of its Subsidiaries, except
to the extent (x) consummated pursuant to an exchange registered under a registration statement of the Company filed pursuant
to the Securities Act and declared effective by the U.S. Securities and Exchange Commission or (y) such exchange is exempt from
registration pursuant to an exemption provided under the Securities Act (other than Sections 3(a)(9) or 3(a)(10) of the Securities
Act) (any such transaction an “Exchange Transaction”) except in compliance with the terms of this Section 12.

 

c)
If at any time during the ROFR Period, the Company desires to pursue an Exchange Transaction with a third party, prior to entering
into such Exchange Transaction, the Company shall first notify Holder in writing (the “Offer Notice”) of the
identity of the proposed parties to such Exchange Transaction and the material financial and other terms and conditions of such
Exchange Transaction (the “Material Terms”). Each Offer Notice constitutes an offer made by the Company to
enter into an agreement on the same Material Terms of such Exchange Transaction (the “ROFR Notice”).

 

d)
At any time prior to the expiration of the 10 day period following Holder’s receipt of the Offer Notice (the “Exercise
Period”), Holder may accept the ROFR Offer by delivery to the Company of a binding letter of intent containing the Material
Terms, executed by Holder.

 

e)
If, by the expiration of the Exercise Period, Holder has not accepted the ROFR Offer, and provided that the Company has complied
with all of the provisions of this Section 12, at any time during the thirty (30) day period following the expiration of the Exercise
Period, the Company may consummate the Exchange Transaction with the counterparty identified in the applicable Offer Notice, on
Material Terms that are the same or more favorable to the Company as the Material Terms set forth in the Offer Notice. If such
Exchange Transaction is not consummated within such thirty (30) day period, the terms and conditions of this Section 12 will again
apply and the Company shall not enter into any Exchange Transaction during the ROFR Period without affording Holder the right
of first refusal on the terms and conditions of this Section 12.

 

    	 	 20	 

     

    

 

Section
13. Miscellaneous.

 

a)
Notices. Any and all notices or other communications or deliveries to be provided by the Holder hereunder, including, without
limitation, any Notice of Conversion, shall be in writing and delivered personally, by facsimile, or sent by a nationally recognized
overnight courier service, addressed to the Company, at 1885 West 2100 South, Salt Lake City, UT 84119, or such other facsimile
number or address as the Company may specify for such purposes by notice to the Holder delivered in accordance with this Section
8(a). Any and all notices or other communications or deliveries to be provided by the Company hereunder shall be in writing and
delivered personally, by facsimile, or sent by a nationally recognized overnight courier service addressed to each Holder at the
facsimile number or address of the Holder appearing on the books of the Company, or if no such facsimile number or address appears
on the books of the Company, at the principal place of business of such Holder, as set forth in the Exchange Agreement. Any notice
or other communication or deliveries hereunder shall be deemed given and effective on the earliest of (i) the date of transmission,
if such notice or communication is delivered via facsimile at the facsimile number set forth on the signature pages attached hereto
prior to 12:00 p.m. (New York City time) on any date, (ii) the next Trading Day after the date of transmission, if such notice
or communication is delivered via facsimile at the facsimile number set forth on the signature pages attached hereto on a day
that is not a Trading Day or later than 12:00 p.m. (New York City time) on any Trading Day, (iii) the second Trading Day following
the date of mailing, if sent by U.S. nationally recognized overnight courier service or (iv) upon actual receipt by the party
to whom such notice is required to be given.

 

b)
Absolute Obligation. Except as expressly provided herein, no provision of this Note shall alter or impair the obligation
of the Company, which is absolute and unconditional, to pay the principal of, liquidated damages and accrued interest, as applicable,
on this Note at the time, place, and rate, and in the coin or currency, herein prescribed. This Note is a direct debt obligation
of the Company. This Note ranks pari passu with all other Notes now or hereafter issued under the terms set forth
herein. 

 

c)
Lost or Mutilated Note. If this Note shall be mutilated, lost, stolen or destroyed, the Company shall execute and deliver,
in exchange and substitution for and upon cancellation of a mutilated Note, or in lieu of or in substitution for a lost, stolen
or destroyed Note, a new Note for the principal amount of this Note so mutilated, lost, stolen or destroyed, but only upon receipt
of evidence of such loss, theft or destruction of such Note, and of the ownership hereof, reasonably satisfactory to the Company.

 

    	 	 21	 

     

    

 

d)
Governing Law. All questions concerning the construction, validity, enforcement and interpretation of this Note shall be
governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles
of conflict of laws thereof. Each party agrees that all legal proceedings concerning the interpretation, enforcement and defense
of the transactions contemplated by any of the Transaction Documents (whether brought against a party hereto or its respective
Affiliates, directors, officers, shareholders, employees or agents) shall be commenced in the state and federal courts sitting
in the City of New York, Borough of Manhattan (the “New York Courts”). Each party hereto hereby irrevocably
submits to the exclusive jurisdiction of the New York Courts for the adjudication of any dispute hereunder or in connection herewith
or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement of any of the Transaction
Documents), and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not
personally subject to the jurisdiction of such New York Courts, or such New York Courts are improper or inconvenient venue for
such proceeding. Each party hereby irrevocably waives personal service of process and consents to process being served in any
such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence
of delivery) to such party at the address in effect for notices to it under this Note 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 applicable law. Each party hereto hereby irrevocably waives, to the fullest
extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this
Note or the transactions contemplated hereby. If any party shall commence an action or proceeding to enforce any provisions of
this Note, then the prevailing party in such action or proceeding shall be reimbursed by the other party for its attorneys’
fees and other costs and expenses incurred in the investigation, preparation and prosecution of such action or proceeding.

 

e)
Waiver. Any waiver by the Company or the Holder of a breach of any provision of this Note shall not operate as or be construed
to be a waiver of any other breach of such provision or of any breach of any other provision of this Note. The failure of the
Company or the Holder to insist upon strict adherence to any term of this Note on one or more occasions shall not be considered
a waiver or deprive that party of the right thereafter to insist upon strict adherence to that term or any other term of this
Note on any other occasion. Any waiver by the Company or the Holder must be in writing.

 

f)
Severability. If any provision of this Note is invalid, illegal or unenforceable, the balance of this Note 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 violates
the applicable law governing usury, the applicable rate of interest due hereunder shall automatically be lowered to equal the
maximum rate of interest permitted under applicable law. The Company covenants (to the extent that it may lawfully do so) that
it shall not at any time insist upon, plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay,
extension or usury law or other law which would prohibit or forgive the Company from paying all or any portion of the principal
of or interest on this Note as contemplated herein, wherever enacted, now or at any time hereafter in force, or which may affect
the covenants or the performance of this Note, and the Company (to the extent it may lawfully do so) hereby expressly waives all
benefits or advantage of any such law, and covenants that it will not, by resort to any such law, hinder, delay or impede 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.

 

    	 	 22	 

     

    

 

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

 

h)
Next Business Day. Whenever any payment or other obligation hereunder shall be due on a day other than a Business Day,
such payment shall be made on the next succeeding Business Day.

 

i)
Headings. The headings contained herein are for convenience only, do not constitute a part of this Note and shall not be
deemed to limit or affect any of the provisions hereof.

 

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

 

(Signature
Pages Follow)

 

    	 	 23	 

     

    

 

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

 

	 	Amedica Corporation
	 	 
	 	By:	 
	 	Name:	
	 	Title:	                            
	 	Facsimile No. for delivery of Notices:_______________________

 

[Signature
Page to Subordinated Convertible Promissory Note]

 

    	 	 	 

     

    

 

ANNEX
A

 

NOTICE
OF CONVERSION

 

The
undersigned hereby elects to convert principal, accrued but unpaid interest and/or any of amounts due under the Subordinated Convertible
Promissory Note of Amedica Corporation, a Delaware corporation (the “Company”), into shares of common stock
(the “Common Stock”), of the Company according to the conditions hereof, as of the date written below. If shares
of Common Stock are to be issued in the name of a person other than the undersigned, the undersigned will pay all transfer taxes
payable with respect thereto and is delivering herewith such certificates and opinions as reasonably requested by the Company
in accordance therewith. No fee will be charged to the holder for any conversion, except for such transfer taxes, if any.

 

By
the delivery of this Notice of Conversion the undersigned represents and warrants to the Company that its ownership of the Common
Stock does not exceed the amounts specified under Section 4 of this Note, as determined in accordance with Section 13(d) of the
Exchange Act.

 

The
undersigned agrees to comply with the prospectus delivery requirements under the applicable securities laws in connection with
any transfer of the aforesaid shares of Common Stock, if the resale of any such shares of Common Stock are covered by and are
being sold pursuant to an effective Registration Statement.

 

Conversion
calculations: 

 

	 	Date
    to Effect Conversion:  __________________________
	 	 
	 	Principal
    Amount of Note to be Converted: ______________ 
	 	 
	 	Payment
    of Interest in Common Stock __ yes __ no
	 	If
    yes, $_____ of Interest Accrued on Account of Conversion at Issue.
	 	 
	 	Other
    Amounts Owed Under this Note to be Converted including Late Fees:  _______________________________
	 	
	 	Number
    of shares of Common Stock to be issued:  ______
	 	
	 	Signature:
    _______________________________________  
	 	
	 	Name:
     __________________________________________
	 	
	 	Delivery
    Instructions:

 

    	 	 	 

     

    

 

Schedule
1

 

CONVERSION
SCHEDULE

 

This
Subordinated Convertible Promissory Note in the original principal amount of $1,000,000 is issued by Amedica Corporation, a Delaware
corporation. This Conversion Schedule reflects conversions made under Section 4 of the above referenced Note.

 

Dated:

 

	Date
                                         of Conversion

        (or
        for first entry,

        Original Issue Date)
	 	Amount
    of 

    Conversion	 	Aggregate
                                         Principal

                                         Amount Remaining
                                         

                                         Subsequent
                                         to 

                                         Conversion

        (or
        original Principal Amount)
	 	Company
    Attest

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