Document:

Exhibit 10.2 

 

[FORM
OF SENIOR CONVERTIBLE NOTE]

 

NEITHER
THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLE
HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT
BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL 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. ANY TRANSFEREE OF THIS NOTE SHOULD CAREFULLY REVIEW THE TERMS OF THIS NOTE, INCLUDING SECTIONS 3(c)(iii)
AND 15(a) HEREOF. THE PRINCIPAL AMOUNT REPRESENTED BY THIS NOTE AND, ACCORDINGLY, THE SECURITIES ISSUABLE UPON CONVERSION HEREOF
MAY BE LESS THAN THE AMOUNTS SET FORTH ON THE FACE HEREOF PURSUANT TO SECTION 3(c)(iii) OF THIS NOTE.

 

Axion
Power International, Inc.

 

SENIOR
CONVERTIBLE NOTE

 

	Issuance
    Date:  August [  ], 2015	Original
    Principal Amount: U.S. $[              ]

 

FOR
VALUE RECEIVED, Axion Power International, Inc., a Delaware corporation (the “Company”), hereby promises
to pay to [BUYER] or registered assigns (the “Holder”) in cash
and/or in shares of Common Stock (as defined below) the amount set out above as the Original Principal Amount (as reduced pursuant
to the terms hereof pursuant to redemption, conversion or otherwise, the “Principal”) when due, whether upon
the Maturity Date (as defined below), acceleration, redemption or otherwise (in each case in accordance with the terms hereof)
and to pay interest (“Interest”) on any outstanding Principal at the applicable Interest Rate from the date
set out above as the Issuance Date (the “Issuance Date”) until the same becomes due and payable, whether upon
the Maturity Date, acceleration, conversion, redemption or otherwise (in each case in accordance with the terms hereof). This
Senior Convertible Note (including all Senior Convertible Notes issued in exchange, transfer or replacement hereof, this “Note”)
is one of an issue of Senior Convertible Notes issued pursuant to the Securities Purchase Agreement on the Closing Date (collectively,
the “Notes” and such other Senior Convertible Notes, the “Other Notes”). Certain
capitalized terms used herein are defined in Section 27.

 

    	 

    	 

    

 

(1)          PAYMENTS
OF PRINCIPAL; PREPAYMENT. The Company acknowledges and agrees that this Note was issued at an original issue discount. On
the Maturity Date, the Company shall pay to the Holder an amount in cash representing all outstanding Principal, accrued and unpaid
Interest and accrued and unpaid Late Charges (as defined in Section 21(b)) on such Principal and Interest. The “Maturity
Date” shall be October [  ], 20151, as may be extended at the option of the Holder, with respect
to all or any portion of this Note, and on one or more occasions, (i) in the event that, and for so long as, an Event of Default
(as defined in Section 4(a)) shall have occurred and be continuing on the Maturity Date (as may be extended pursuant to this Section
1) or any event shall have occurred and be continuing on the Maturity Date (as may be extended pursuant to this Section 1) that
with the passage of time and the failure to cure would result in an Event of Default and (ii) through the date that all
of the Conversion Shares may be resold pursuant to Rule 144 without any restrictions or limitations, and/or through the date that
is ten (10) Business Days after the consummation of a Change of Control in the event that a Change of Control is publicly announced
or a Change of Control Notice (as defined in Section 5(b)) is delivered prior to the Maturity Date. In order to extend the Maturity
Date pursuant to the immediately preceding sentence, the Holder shall, on or prior to the then existing Maturity Date, deliver
a written notice to the Company specifying the terms of the extension. Other than as specifically permitted by this Note, the
Company may not prepay any portion of the outstanding Principal, accrued and unpaid Interest or accrued and unpaid Late Charges
on Principal and Interest, if any.

 

(2)          INTEREST.
Interest on this Note shall commence accruing on the Issuance Date at the Interest Rate and shall be computed on the basis of
a 360-day year and twelve 30-day months and shall be payable in arrears on the Maturity Date. Interest shall be payable on the
Maturity Date or, if such date falls on a Holiday, the next day that is not a Holiday, to the record holder of this Note on the
Maturity Date in cash by wire transfer of immediately available funds pursuant to wire instructions provided by the Holder in
writing to the Company. Prior to the payment of Interest on the Maturity Date, Interest on this Note shall accrue at the Interest
Rate and be payable by way of inclusion of the Interest in the Conversion Amount (as defined in Section 3(b)(i)) on each (i) Conversion
Date (as defined in Section 3(c)(i)) in accordance with Section 3(c)(i) and/or (ii) Redemption Date. From and after the occurrence
and during the continuance of an Event of Default, the Interest Rate shall be increased to eighteen percent (18.0%). In the event
that such Event of Default is subsequently cured, the adjustment referred to in the preceding sentence shall cease to be effective
as of the date of such cure; provided, that the Interest as calculated and unpaid at such increased rate during the continuance
of such Event of Default shall continue to apply to the extent relating to the days after the occurrence of such Event of Default
through and including the date of cure of such Event of Default; provided, further, that for the purpose of this
Section 2, such Event of Default shall not be deemed cured unless and until any accrued and unpaid Interest shall be paid to the
Holder, including, without limitation, Interest accrued at the increased rate of eighteen percent (18.0%).

 

 

1
Insert date that is ninety (90) days immediately following the Issuance Date.

 

    	- 2 -

    	 

    

 

(3)          CONVERSION
OF NOTES. At any time or times after the Issuance Date, this Note shall be convertible into shares of Common Stock on the
terms and conditions set forth in this Section 3.

 

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

 

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

 

(i)          “Conversion
Amount” means the sum of (A) the portion of the Principal to be converted, redeemed or otherwise with respect to which
this determination is being made, (B) accrued and unpaid Interest with respect to such Principal and (C) accrued and unpaid Late
Charges, if any, with respect to such Principal and Interest.

 

(ii)          “Conversion
Price” means, as of any Conversion Date or other date of determination, $1.75 per share, subject to adjustment as provided
herein.

 

(c)          Mechanics
of Conversion.

 

(i)          Optional
Conversion. To convert any Conversion Amount into shares of Common Stock on any date (a “Conversion Date”),
the Holder shall (A) transmit by facsimile or electronic mail (or otherwise deliver), for receipt on or prior to 11:59 p.m., New
York time, on such date, a copy of an executed notice of conversion in the form attached hereto as Exhibit I (the “Conversion
Notice”) to the Company and (B) if required by Section 3(c)(iii), but without delaying the Company’s requirement
to deliver shares of Common Stock on the applicable Share Delivery Date (as defined below, surrender this Note to a common carrier
for delivery to the Company as soon as practicable on or following such date (or an indemnification undertaking with respect to
this Note in the case of its loss, theft or destruction). On or before the first (1st) Business Day following the date of receipt
of a Conversion Notice, the Company shall transmit by facsimile or electronic mail a confirmation of receipt of such Conversion
Notice to the Holder and the Company’s transfer agent (the “Transfer Agent”). On or before the third
(3rd) Trading Day following the date of receipt of a Conversion Notice (the “Share Delivery Date”),
the Company shall (x) provided that the Transfer Agent is participating in the Depository Trust Company (“DTC”)
Fast Automated Securities Transfer Program, credit such aggregate number of shares of Common Stock to which the Holder shall be
entitled to the Holder’s or its designee’s balance account with DTC through its Deposit Withdrawal At Custodian system
and the Company is able to provide unlegended shares hereunder in accordance with the provisions of Section 2(g) of the Securities
Purchase Agreement or (y) if the Transfer Agent is not participating in the DTC Fast Automated Securities Transfer Program or
is not able to provide unlegended shares hereunder in accordance with the provisions of Section 2(g) of the Securities Purchase
Agreement, issue and deliver to the address as specified in the Conversion Notice, a certificate, registered in the name of the
Holder or its designee, for the number of shares of Common Stock to which the Holder shall be entitled. If this Note is physically
surrendered for conversion as required by Section 3(c)(iii) and the outstanding Principal of this Note is greater than the Principal
portion of the Conversion Amount being converted, then the Company shall as soon as practicable and in no event later than three
(3) Business Days after receipt of this Note and at its own expense, issue and deliver to the Holder a new Note (in accordance
with Section 15(d)) representing the outstanding Principal not converted. The Person or Persons entitled to receive the shares
of Common Stock issuable upon a conversion of this Note shall be treated for all purposes as the record holder or holders of such
shares of Common Stock on the Conversion Date, irrespective of the date such shares of Common Stock are credited to the Holder’s
account with DTC or the date of delivery of the certificates evidencing such shares of Common Stock, as the case may be.

 

    	- 3 -

    	 

    

 

(ii)          Company’s
Failure to Timely Convert. If the Company shall fail on or prior to the Share Delivery Date to issue and deliver a certificate
to the Holder, if the Transfer Agent is not participating in the DTC Fast Automated Securities Transfer Program, or credit the
Holder’s balance account with DTC, if the Transfer Agent is participating in the DTC Fast Automated Securities Transfer
Program, for the number of shares of Common Stock to which the Holder is entitled upon the Holder’s conversion of any Conversion
Amount (a “Conversion Failure”), then the Holder, upon written notice to the Company, may void its Conversion
Notice with respect to, and retain or have returned, as the case may be, any portion of this Note that has not been converted
pursuant to such Conversion Notice; provided that the voiding of a Conversion Notice shall not affect the Company’s
obligations to make any payments which have accrued prior to the date of such notice pursuant to this Section 3(c)(ii) or otherwise.
In addition to the foregoing, if the Company shall fail on or prior to the Share Delivery Date to issue and deliver a certificate
to the Holder, if the Transfer Agent is not participating in the DTC Fast Automated Securities Transfer Program, or credit the
Holder’s balance account with DTC, if the Transfer Agent is participating in the DTC Fast Automated Securities Transfer
Program, for the number of shares of Common Stock to which the Holder is entitled upon the Holder’s conversion of any Conversion
Amount or on any date of the Company’s obligation to deliver shares of Common Stock as contemplated pursuant to clause (y)
below, and if on or after such Trading Day the Holder purchases (in an open market transaction or otherwise) Common Stock to deliver
in satisfaction of a sale by the Holder of Common Stock issuable upon such conversion that the Holder anticipated receiving from
the Company (a “Buy-In”), then the Company shall, within three (3) Trading Days after the Holder’s request
and in the Holder’s discretion, either (x) pay cash to the Holder in an amount equal to the Holder’s total purchase
price (including brokerage commissions and other out-of-pocket expenses, if any) for the shares of Common Stock so purchased (the
“Buy-In Price”), at which point the Company’s obligation to issue and deliver such certificate or credit
the Holder’s balance account with DTC for the shares of Common Stock to which the Holder is entitled upon the Holder’s
conversion of the applicable Conversion Amount shall terminate, or (y) promptly honor its obligation to deliver to the Holder
a certificate or certificates representing such shares of Common Stock or credit the Holder’s balance account with DTC for
such shares of Common Stock and pay cash to the Holder in an amount equal to the excess (if any) of the Buy-In Price over the
product of (A) such number of shares of Common Stock, times (B) the Closing Bid Price on the Conversion Date.

 

    	- 4 -

    	 

    

 

(iii)          Registration;
Book-Entry. The Company shall maintain a register (the “Register”) for the recordation of the names and
addresses of the holders of each Note and the Principal amount of the Notes (and stated interest thereon) held by such holders
(the “Registered Notes”). The entries in the Register shall be conclusive and binding for all purposes absent
manifest error. The Company and the holders of the Notes shall treat each Person whose name is recorded in the Register as the
owner of a Note for all purposes, including, without limitation, the right to receive payments of Principal and Interest, if any,
hereunder, notwithstanding notice to the contrary. A Registered Note may be assigned or sold in whole or in part only by registration
of such assignment or sale on the Register. Upon its receipt of a request to assign or sell all or part of any Registered Note
by the Holder, the Company shall record the information contained therein in the Register and issue one or more new Registered
Notes in the same aggregate Principal amount as the Principal amount of the surrendered Registered Note to the designated assignee
or transferee pursuant to Section 14. Notwithstanding anything to the contrary in this Section 3(c)(iii), the Holder may assign
any Note or any portion thereof to an Affiliate of such Holder or a Related Fund of such Holder without delivering a request to
assign or sell such Note to the Company and the recordation of such assignment or sale in the Register (a “Related Party
Assignment”); provided, that (x) the Company may continue to deal solely with such assigning or selling Holder
unless and until such Holder has delivered a request to assign or sell such Note or portion thereof to the Company for recordation
in the Register; (y) the failure of such assigning or selling Holder to deliver a request to assign or sell such Note or portion
thereof to the Company shall not affect the legality, validity, or binding effect of such assignment or sale and (z) such assigning
or selling Holder shall, acting solely for this purpose as a non-fiduciary agent of the Company, maintain a register (the “Related
Party Register”) comparable to the Register on behalf of the Company, and any such assignment or sale shall be effective
upon recordation of such assignment or sale in the Related Party Register. Notwithstanding anything to the contrary set forth
herein, upon conversion of any portion of this Note in accordance with the terms hereof, the Holder shall not be required to physically
surrender this Note to the Company unless (A) the full Conversion Amount represented by this Note is being converted or (B) the
Holder has provided the Company with prior written notice (which notice may be included in a Conversion Notice) requesting reissuance
of this Note upon physical surrender of this Note. The Holder and the Company shall maintain records showing the Principal, Interest
and Late Charges, if any, converted and the dates of such conversions or shall use such other method, reasonably satisfactory
to the Holder and the Company, so as not to require physical surrender of this Note upon conversion.

 

    	- 5 -

    	 

    

 

(iv)          Pro
Rata Conversion; Disputes. In the event that the Company receives a Conversion Notice from this Note and one or more holder
of Other Notes for the same Conversion Date and the Company can convert some, but not all, of such portions of this Note and the
Other Notes submitted for conversion, the Company, subject to Section 3(d), shall convert from the Holder and each holder of Other
Notes electing to have this Note or the Other Notes converted on such date a pro rata amount of such holder’s portion of
the Note and its Other Notes submitted for conversion based on the Principal amount of this Note and the Other Notes submitted
for conversion on such date by such holder relative to the aggregate Principal amount of this Note and all Other Notes submitted
for conversion on such date. In the event of a dispute as to the number of shares of Common Stock issuable to the Holder in connection
with a conversion of this Note, the Company shall issue to the Holder the number of shares of Common Stock not in dispute and
resolve such dispute in accordance with Section 20.

 

(d)          Beneficial
Ownership. Notwithstanding anything to the contrary contained herein, the Company shall not effect the conversion of any portion
of this Note, and the Holder shall not have the right to convert any portion of this Note pursuant to the terms and conditions
of this Note and any such conversion shall be null and void and treated as if never made, to the extent that after giving effect
to such conversion, the Holder together with the other Attribution Parties collectively would beneficially own in excess of 4.99%
(the “Maximum Percentage”) of the shares of Common Stock outstanding immediately after giving effect to such
conversion. For purposes of the foregoing sentence, the aggregate number of shares of Common Stock beneficially owned by the Holder
and the other Attribution Parties shall include the number of shares of Common Stock held by the Holder and all other Attribution
Parties plus the number of shares of Common Stock issuable upon conversion of this Note with respect to which the determination
of such sentence is being made, but shall exclude shares of Common Stock which would be issuable upon (i) conversion of the remaining,
nonconverted portion of this Note beneficially owned by the Holder or any of the other Attribution Parties and (ii) exercise or
conversion of the unexercised or nonconverted portion of any other securities of the Company (including, without limitation, any
convertible notes or convertible preferred stock or warrants, including the Other Notes and Warrants) beneficially owned by the
Holder or any other Attribution Party subject to a limitation on conversion or exercise analogous to the limitation contained
in this Section 3(d). For purposes of this Section 3(d), beneficial ownership shall be calculated in accordance with Section 13(d)
of the Exchange Act. For purposes of determining the number of outstanding shares of Common Stock the Holder may acquire upon
the conversion of the Note without exceeding the Maximum Percentage, the Holder may rely on the number of outstanding shares of
Common Stock as reflected in (i) the Company’s most recent Annual Report on Form 10-K, Quarterly Report on Form 10-Q, Current
Report on Form 8-K or other public filing with the SEC, as the case may be, (ii) a more recent public announcement by the Company
or (iii) any other written notice by the Company or the Transfer Agent setting forth the number of shares of Common Stock outstanding
(the “Reported Outstanding Share Number”). If the Company receives a Conversion Notice from the Holder at a
time when the actual number of outstanding shares of Common Stock is less than the Reported Outstanding Share Number, the Company
shall notify the Holder in writing of the number of shares of Common Stock then outstanding and, to the extent that such Conversion
Notice would otherwise cause the Holder’s beneficial ownership, as determined pursuant to this Section 3(d), to exceed the
Maximum Percentage, the Holder must notify the Company of a reduced number of shares of Common Stock to be purchased pursuant
to such Conversion Notice. For any reason at any time, upon the written or oral request of the Holder, the Company shall within
one (1) Trading Day confirm orally and in writing or by electronic mail 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 and any other Attribution Party since the date as
of which the Reported Outstanding Share Number was reported. In the event that the issuance of shares of Common Stock to the Holder
upon conversion of this Note results in the Holder and the other Attribution Parties being deemed to beneficially own, in the
aggregate, more than the Maximum Percentage of the number of outstanding shares of Common Stock (as determined under Section 13(d)
of the Exchange Act), the number of shares so issued by which the Holder’s and the other Attribution Parties’ aggregate
beneficial ownership exceeds the Maximum Percentage (the “Excess Shares”) shall be deemed null and void and
shall be cancelled ab initio, and the Holder shall not have the power to vote or to transfer the Excess Shares. Upon delivery
of a written notice to the Company, the Holder may from time to time increase (with such increase not effective until the sixty-first
(61st) day after delivery of such notice) or decrease the Maximum Percentage to any other percentage not in excess
of 9.99% as specified in such notice; provided that (i) any such increase in the Maximum Percentage will not be effective until
the sixty-first (61st) day after such notice is delivered to the Company and (ii) any such increase or decrease will
apply only to the Holder and the other Attribution Parties and not to any other holder of Notes that is not an Attribution Party
of the Holder. For purposes of clarity, the shares of Common Stock issuable pursuant to the terms of this Note in excess of the
Maximum Percentage shall not be deemed to be beneficially owned by the Holder for any purpose including for purposes of Section
13(d) or Rule 16a-1(a)(1) of the Exchange Act. The provisions of this paragraph shall be construed and implemented in a manner
otherwise than in strict conformity with the terms of this Section 3(d) to the extent necessary to correct this paragraph (or
any portion of this paragraph) which may be defective or inconsistent with the intended beneficial ownership limitation contained
in this Section 3(d) or to make changes or supplements necessary or desirable to properly give effect to such limitation. The
limitation contained in this paragraph may not be waived and shall apply to a successor holder of this Note.

 

    	- 6 -

    	 

    

 

(4)          RIGHTS
UPON EVENT OF DEFAULT.

 

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

 

(i)          (A)
the suspension of the Common Stock from trading on an Eligible Market for a period of two (2) consecutive Trading Days or for
more than an aggregate of ten (10) Trading Days in any 365-day period or (B) the failure of the Common Stock to be listed on an
Eligible Market;

 

(ii)          the
Company’s (A) failure to cure a Conversion Failure by delivery of the required number of shares of Common Stock within five
(5) Business Days after the applicable Conversion Date or (B) notice, written or oral, to the Holder or any holder of the Other
Notes, including by way of public announcement or through any of its agents, at any time, of its intention not to comply with
a request for conversion of this Note or any Other Notes into shares of Common Stock that is tendered in accordance with the provisions
of this Note or the Other Notes, other than pursuant to Section 3(d) (and analogous provisions under the Other Notes);

 

    	- 7 -

    	 

    
 

(iii)          at
any time following the fifth (5th) consecutive Business Day that the Holder’s Authorized Share Allocation (as
defined in Section 9(a)) is less than the sum of (A) the number of shares of Common Stock that the Holder would be entitled to
receive upon a conversion of the full Conversion Amount of this Note (without regard to any limitations on conversion set forth
in Section 3(d) or otherwise) and (B) the number of shares of Common Stock that the Holder would be entitled to receive upon exercise
in full of the Holder’s Warrants (without regard to any limitations on exercise set forth in the Warrants); 

 

(iv)         the
Company’s failure to pay to the Holder any amount of Principal, Interest, Late Charges or other amounts when and as due
under this Note or any other Transaction Document or any other agreement, document, certificate or other instrument delivered
in connection with the transactions contemplated hereby and thereby to which the Holder is a party, except, in the case of a failure
to pay Interest and/or Late Charges when and as due, in which case only if such failure continues for a period of at least an
aggregate of two (2) Business Days;

 

(v)          any
default under, redemption of or acceleration prior to maturity of any Indebtedness of the Company or any of its Subsidiaries other
than with respect to this Note or any Other Notes in excess of $100,000 of principal amount of unsecured Indebtedness;

 

(vi)         the
Company or any of its Subsidiaries, pursuant to or within the meaning of Title 11, U.S. Code, or any similar Federal, foreign
or state law for the relief of debtors (collectively, “Bankruptcy Law”), (A) commences a voluntary case, (B)
consents to the entry of an order for relief against it in an involuntary case, (C) consents to the appointment of a receiver,
trustee, assignee, liquidator or similar official (a “Custodian”), (D) makes a general assignment for the benefit
of its creditors or (E) admits in writing that it is generally unable to pay its debts as they become due;

 

(vii)        a
court of competent jurisdiction enters an order or decree under any Bankruptcy Law that (A) is for relief against the Company
or any of its Subsidiaries in an involuntary case, (B) appoints a Custodian of the Company or any of its Subsidiaries or (C) orders
the liquidation of the Company or any of its Subsidiaries;

 

(viii)       a
final judgment or judgments for the payment of money aggregating in excess of $100,000 are rendered against the Company or any
of its Subsidiaries and which judgments are not, within sixty (60) days after the entry thereof, bonded, discharged or stayed
pending appeal, or are not discharged within sixty (60) days after the expiration of such stay; provided, however,
that any judgment which is covered by insurance or an indemnity from a credit worthy party shall not be included in calculating
the $100,000 amount set forth above so long as the Company provides the Holder a written statement from such insurer or indemnity
provider (which written statement shall be reasonably satisfactory to the Holder) to the effect that such judgment is covered
by insurance or an indemnity and the Company will receive the proceeds of such insurance or indemnity within thirty (30) days
of the issuance of such judgment;

 

    	- 8 -

    	 

    

 

(ix)          other
than as specifically set forth in another clause of this Section 4(a), the Company or any of its Subsidiaries breaches any representation,
warranty, covenant or other term or condition of any Transaction Document, except, in the case of a breach of a covenant or other
term or condition of any Transaction Document which is curable, only if such breach continues for a period of at least an aggregate
of five (5) Business Days;

 

(x)           any
breach or failure in any respect to comply with Section 12 of this Note;

 

(xi)          any
material damage to, or loss, theft or destruction of, a material amount of property of the Company, whether or not insured, or
any strike, lockout, labor dispute, embargo, condemnation, act of God or public enemy, or other casualty which causes, for more
than fifteen (15) consecutive days, the cessation or substantial curtailment of revenue producing activities at any facility of
the Company or any Subsidiary, if any such event or circumstance could reasonably be expected to have a Material Adverse Effect
(as defined in the Securities Purchase Agreement);

 

(xii)         a
false or inaccurate certification (including a false or inaccurate deemed certification) by the Company as to whether any Event
of Default has occurred; or

 

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

 

(b)          Redemption
Right. Upon the occurrence of an Event of Default with respect to this Note or any Other Note, the Company shall within one
(1) Business Day deliver written notice thereof via facsimile or electronic mail and overnight courier (an “Event of
Default Notice”) to the Holder. At any time after the earlier of the Holder’s receipt of an Event of Default Notice
and the Holder becoming aware of an Event of Default, the Holder may require the Company to redeem (an “Event of Default
Redemption”) all or any portion of this Note by delivering written notice thereof (the “Event of Default Redemption
Notice”) to the Company, which Event of Default Redemption Notice shall indicate the portion of this Note the Holder
is electing to require the Company to redeem. Each portion of this Note subject to redemption by the Company pursuant to this
Section 4(b) shall be redeemed by the Company in cash by wire transfer of immediately available funds at a price equal to the
greater of (x) 125% of the Conversion Amount being redeemed and (y) the product of (A) the Conversion Amount being redeemed and
(B) the quotient determined by dividing (I) the greatest Closing Sale Price of the shares of Common Stock during the period beginning
on the date immediately preceding such Event of Default and ending on the date the Holder delivers the Event of Default Redemption
Notice, by (II) the lowest Conversion Price in effect during such period (the “Event of Default Redemption Price”).
Redemptions required by this Section 4(b) shall be made in accordance with the provisions of Section 10. To the extent redemptions
required by this Section 4(b) are deemed or determined by a court of competent jurisdiction to be prepayments of the Note by the
Company, such redemptions shall be deemed to be voluntary prepayments. Notwithstanding anything to the contrary in this Section
4, but subject to Section 3(d), until the Event of Default Redemption Price (together with any interest thereon) is paid in full,
the Conversion Amount submitted for redemption under this Section 4(b) (together with any interest thereon) may be converted,
in whole or in part, by the Holder into Common Stock pursuant to Section 3. The parties hereto agree that in the event of the
Company’s redemption of any portion of the Note under this Section 4(b), the Holder’s damages would be uncertain and
difficult to estimate because of the parties’ inability to predict future interest rates and the uncertainty of the availability
of a suitable substitute investment opportunity for the Holder. Accordingly, any Event of Default redemption premium due under
this Section 4(b) is intended by the parties to be, and shall be deemed, a reasonable estimate of the Holder’s actual loss
of its investment opportunity and not as a penalty.

 

    	- 9 -

    	 

    

 

(5)          RIGHTS
UPON FUNDAMENTAL TRANSACTION AND CHANGE OF CONTROL.

 

(a)          Assumption.
The Company shall not enter into or be party to a Fundamental Transaction unless the Successor Entity assumes in writing all of
the obligations of the Company under this Note and the other Transaction Documents in accordance with the provisions of this Section
5(a) pursuant to written agreements in form and substance satisfactory to the Required Holders and approved by the Required Holders
prior to such Fundamental Transaction, including agreements, if so requested by the Holder, to deliver to each holder of Notes
in exchange for such Notes a security of the Successor Entity evidenced by a written instrument substantially similar in form
and substance to the Notes, including, without limitation, having a principal amount and interest rate equal to the Principal
amounts and the Interest Rates of the Notes then outstanding held by such holder, having similar conversion rights and having
similar ranking to the Notes, and satisfactory to the Required Holders. Any security issuable or potentially issuable to the Holder
pursuant to the terms of this Note on the consummation of a Fundamental Transaction shall be registered and freely tradable by
the Holder without any restriction or limitation or the requirement to be subject to any holding period pursuant to any applicable
securities laws. No later than (i) thirty (30) days prior to the occurrence or consummation of any Fundamental Transaction or
(ii) if later, the first Trading Day following the date the Company first becomes aware of the occurrence or potential occurrence
of a Fundamental Transaction, the Company shall deliver written notice thereof via facsimile or electronic mail and overnight
courier to the Holder. Upon the occurrence or consummation of any Fundamental Transaction, and it shall be a required condition
to the occurrence or consummation of any Fundamental Transaction that, the Company and the Successor Entity or Successor Entities,
jointly and severally, shall succeed to, and the Company shall cause any Successor Entity or Successor Entities to jointly and
severally succeed to, and be added to the term “Company” under this Note (so that from and after the date of such
Fundamental Transaction, each and every provision of this Note referring to the “Company” shall refer instead to each
of the Company and the Successor Entity or Successor Entities, jointly and severally), and the Company and the Successor Entity
or Successor Entities, jointly and severally, may exercise every right and power of the Company prior thereto and shall assume
all of the obligations of the Company prior thereto under this Note with the same effect as if the Company and such Successor
Entity or Successor Entities, jointly and severally, had been named as the Company in this Note, and, solely at the request of
the Holder, if the Successor Entity and/or Successor Entities is a publicly traded corporation whose common capital stock is quoted
on or listed for trading on an Eligible Market, shall deliver (in addition to and without limiting any right under this Note)
to the Holder in exchange for this Note a security of the Successor Entity and/or Successor Entities evidenced by a written instrument
substantially similar in form and substance to this Note and convertible for a corresponding number of shares of capital stock
of the Successor Entity and/or Successor Entities (the “Successor Capital Stock”) equivalent (as set forth
below) 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 (such corresponding number of shares of Successor Capital
Stock to be delivered to the Holder shall equal the greater of (I) the quotient of (A) the aggregate dollar value of all consideration
(including cash consideration and any consideration other than cash (“Non-Cash Consideration”), in such Fundamental
Transaction, as such values are set forth in any definitive agreement for the Fundamental Transaction that has been executed at
the time of the first public announcement of the Fundamental Transaction or, if no such value is determinable from such definitive
agreement, as determined in accordance with Section 20 with the term “Non-Cash Consideration” being substituted for
the term “Conversion Price”) that the Holder would have been entitled to receive upon the happening of such Fundamental
Transaction or the record, eligibility or other determination date for the event resulting in such Fundamental Transaction, had
this Note been converted immediately prior to such Fundamental Transaction or the record, eligibility or other determination date
for the event resulting in such Fundamental Transaction (without regard to any limitations on the conversion of this Note) (the
“Aggregate Consideration”) divided by (B) the per share Closing Sale Price of such corresponding Successor
Capital Stock on the Trading Day immediately prior to the consummation or occurrence of the Fundamental Transaction and (II) the
product of (A) the quotient obtained by diving (x) the Aggregate Consideration, by (y) the Closing Sale Price of the Common Stock
on the Trading Day immediately prior to the consummation or occurrence of the Fundamental Transaction and (B) the highest exchange
ratio pursuant to which any stockholder of the Company may exchange Common Stock for Successor Capital Stock) (provided,
however, to the extent that the Holder’s right to receive any such shares of publicly traded common stock (or their
equivalent) of the Successor Entity would result in the Holder and its other Attribution Parties exceeding the Maximum Percentage,
if applicable, then the Holder shall not be entitled to receive such shares to such extent (and shall not be entitled to beneficial
ownership of such shares of publicly traded common stock (or their equivalent) of the Successor Entity as a result of such consideration
to such extent) and the portion of such shares shall be held in abeyance for the Holder until such time or times, as its right
thereto would not result in the Holder and its other Attribution Parties exceeding the Maximum Percentage, at which time or times
the Holder shall be delivered such shares to the extent as if there had been no such limitation), and such security shall be satisfactory
to the Holder, and with an identical conversion price to the Conversion Price hereunder (such adjustments to the number of shares
of capital stock and such conversion price being for the purpose of protecting after the consummation or occurrence of such Fundamental
Transaction the economic value of this Note that was in effect immediately prior to the consummation or occurrence of such Fundamental
Transaction, as elected by the Holder solely at its option). Upon occurrence or consummation of the Fundamental Transaction, and
it shall be a required condition to the occurrence or consummation of such Fundamental Transaction that, the Company and the Successor
Entity or Successor Entities shall deliver to the Holder confirmation that there shall be issued upon conversion of this Note
at any time after the occurrence or consummation of the Fundamental Transaction, as elected by the Holder solely at its option,
shares of Common Stock, Successor Capital Stock or, in lieu of the shares of Common Stock or Successor Capital Stock (or other
securities, cash, assets or other property purchasable upon the conversion of this Note prior to such Fundamental Transaction),
such shares of stock, securities, cash, assets or any other property whatsoever (including warrants or other purchase or subscription
rights), which for purposes of clarification may continue to be shares of Common Stock, if any, that the Holder would have been
entitled to receive upon the happening of such Fundamental Transaction or the record, eligibility or other determination date
for the event resulting in such Fundamental Transaction, had this Note been converted immediately prior to such Fundamental Transaction
or the record, eligibility or other determination date for the event resulting in such Fundamental Transaction (without regard
to any limitations on the conversion of this Note), as adjusted in accordance with the provisions of this Note. The provisions
of this Section 5(a) shall apply similarly and equally to successive Fundamental Transactions.

 

    	- 10 -

    	 

    

 

(b)          Redemption
Right. No sooner than twenty-five (25) days nor later than twenty (20) days prior to the consummation of a Change of Control,
but not prior to the public announcement of such Change of Control, the Company shall deliver written notice thereof via facsimile
or electronic mail and overnight courier to the Holder (a “Change of Control Notice”). At any time during
the period beginning on the earlier to occur of (x) any oral or written agreement by the Company or any of its Subsidiaries, upon
consummation of which the transaction contemplated thereby would reasonably be expected to result in a Change of Control, (y)
the Holder becoming aware of a Change of Control and (z) the Holder’s receipt of a Change of Control Notice and ending twenty-five
(25) Trading Days after the date of the consummation of such Change of Control, the Holder may require the Company to redeem (a
“Change of Control Redemption”) all or any portion of this Note by delivering written notice thereof (“Change
of Control Redemption Notice”) to the Company, which Change of Control Redemption Notice shall indicate the Conversion
Amount the Holder is electing to require the Company to redeem. The portion of this Note subject to redemption pursuant to this
Section 5(b) shall be redeemed by the Company in cash by wire transfer of immediately available funds at a price equal to the
greater of (x) 125% of the Conversion Amount being redeemed and (y) the product of (A) the Conversion Amount being redeemed and
(B) the quotient determined by dividing (I) the greatest Closing Sale Price of the shares of Common Stock during the period beginning
on the date immediately preceding the earlier to occur of (x) the consummation of the Change of Control and (y) the public announcement
of such Change of Control and ending on the date the Holder delivers the Change of Control Redemption Notice, by (II) the lowest
Conversion Price in effect during such period (the “Change of Control Redemption Price”). Redemptions required
by this Section 5 shall be made in accordance with the provisions of Section 10 and shall have priority to payments to stockholders
in connection with a Change of Control. To the extent redemptions required by this Section 5(b) are deemed or determined by a
court of competent jurisdiction to be prepayments of the Note by the Company, such redemptions shall be deemed to be voluntary
prepayments. Notwithstanding anything to the contrary in this Section 5, but subject to Section 3(d), until the Change of Control
Redemption Price (together with any interest thereon) is paid in full, the Conversion Amount submitted for redemption under this
Section 5(b) (together with any interest thereon) may be converted, in whole or in part, by the Holder into Common Stock pursuant
to Section 3. The parties hereto agree that in the event of the Company’s redemption of any portion of the Note under this
Section 5(b), the Holder’s damages would be uncertain and difficult to estimate because of the parties’ inability
to predict future interest rates and the uncertainty of the availability of a suitable substitute investment opportunity for the
Holder. Accordingly, any Change of Control redemption premium due under this Section 5(b) is intended by the parties to be, and
shall be deemed, a reasonable estimate of the Holder’s actual loss of its investment opportunity and not as a penalty.

 

    	- 11 -

    	 

    

 

(6)          DISTRIBUTION
OF ASSETS; RIGHTS UPON ISSUANCE OF PURCHASE RIGHTS AND OTHER CORPORATE EVENTS.

 

(a)          Distribution
of Assets. If the Company shall declare or make any dividend or other distributions of its assets (or rights to acquire its
assets) to any or all holders of shares of Common Stock, by way of return of capital or otherwise (including without limitation,
any distribution of cash, stock or other securities, property, options, evidence of Indebtedness or any other assets by way of
a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction) (the “Distributions”),
then the Holder will be entitled to such Distributions as if the Holder had held the number of shares of Common Stock acquirable
upon complete conversion of this Note (without taking into account any limitations or restrictions on the convertibility of this
Note) immediately prior to the date on which a record is taken for such Distribution or, if no such record is taken, the date
as of which the record holders of Common Stock are to be determined for such Distributions (provided, however, that
to the extent that the Holder’s right to participate in any such Distribution would result in the Holder and the other Attribution
Parties exceeding the Maximum Percentage, then the Holder shall not be entitled to participate in such Distribution to such extent
(and shall not be entitled to beneficial ownership of such shares of Common Stock as a result of such Distribution (and beneficial
ownership) to such extent) and the portion of such Distribution shall be held in abeyance for the Holder until such time or times
as its right thereto would not result in the Holder and the other Attribution Parties exceeding the Maximum Percentage, at which
time or times the Holder shall be granted such rights (and any rights under this Section 6(a) on such initial rights or on any
subsequent such rights to be held similarly in abeyance) to the same extent as if there had been no such limitation).

 

(b)          Purchase
Rights. If at any time the Company grants, issues or sells any Options, Convertible Securities or rights to purchase stock,
warrants, securities or other property pro rata to the record holders of any class of Common Stock (the “Purchase Rights”),
then the Holder will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights
which the Holder could have acquired if the Holder had held the number of shares of Common Stock acquirable upon complete conversion
of this Note (without taking into account any limitations or restrictions on the convertibility of this Note) immediately prior
to 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, that to the extent that the Holder’s right to participate in any such Purchase
Right would result in the Holder and the other Attribution Parties exceeding the Maximum Percentage, then the Holder shall not
be entitled to participate in such Purchase Right to such extent (and shall not be entitled to beneficial ownership of such shares
of Common Stock as a result of such Purchase Right (and beneficial ownership) to such extent) and such Purchase Right to such
extent shall be held in abeyance for the Holder until such time or times as its right thereto would not result in the Holder and
the other Attribution Parties exceeding the Maximum Percentage, at which time or times the Holder shall be granted such right
(and any Purchase Right granted, issued or sold on such initial Purchase Right or on any subsequent Purchase Right to be held
similarly in abeyance) to the same extent as if there had been no such limitation).

 

    	- 12 -

    	 

    

 

(c)          Other
Corporate Events. In addition to and not in substitution for any other rights hereunder, prior to the occurrence or consummation
of any Fundamental Transaction pursuant to which holders of shares of Common Stock are entitled to receive securities, cash, assets
or other property with respect to or in exchange for shares of Common Stock (a “Corporate Event”), the Company
shall make appropriate provision to ensure that, and any applicable Successor Entity or Successor Entities shall ensure that,
and it shall be a required condition to the occurrence or consummation of such Corporate Event that, the Holder will thereafter
have the right to receive upon conversion of this Note at any time after the occurrence or consummation of the Corporate Event,
shares of Common Stock or Successor Capital Stock or, if so elected by the Holder, in lieu of the shares of Common Stock (or other
securities, cash, assets or other property) purchasable upon the conversion of this Note prior to such Corporate Event (but not
in lieu of such items still issuable under Sections 6(a) and 6(b), which shall continue to be receivable on the Common Stock or
on such shares of stock, securities, cash, assets or any other property otherwise receivable with respect to or in exchange for
shares of Common Stock), such shares of stock, securities, cash, assets or any other property whatsoever (including warrants or
other purchase or subscription rights and any shares of Common Stock) which the Holder would have been entitled to receive upon
the occurrence or consummation of such Corporate Event or the record, eligibility or other determination date for the event resulting
in such Corporate Event, had this Note been converted immediately prior to such Corporate Event or the record, eligibility or
other determination date for the event resulting in such Corporate Event (without regard to any limitations on conversion of this
Note). Provision made pursuant to the preceding sentence shall be in a form and substance satisfactory to the Required Holders.
The provisions of this Section 6 shall apply similarly and equally to successive Corporate Events.

 

(7)          RIGHTS
UPON ISSUANCE OF OTHER SECURITIES.

 

(a)          Adjustment
of Conversion Price upon Subdivision or Combination of Common Stock. If the Company at any time on or after the Subscription
Date subdivides (by any stock split, stock dividend, recapitalization or otherwise) one or more classes of its outstanding shares
of Common Stock into a greater number of shares, the Conversion Price in effect immediately prior to such subdivision will be
proportionately reduced. If the Company at any time on or after the Subscription Date combines (by combination, reverse stock
split or otherwise) one or more classes of its outstanding shares of Common Stock into a smaller number of shares, the Conversion
Price in effect immediately prior to such combination will be proportionately increased.

 

(b)          Voluntary
Adjustment by Company. The Company may at any time during the term of this Note, with the prior written consent of the Required
Holders, reduce the then current Conversion Price to any amount and for any period of time deemed appropriate by the Board of
Directors of the Company.

 

    	- 13 -

    	 

    

 

(8)          NONCIRCUMVENTION.
The Company hereby covenants and agrees that the Company will not, by amendment of its Certificate of Incorporation, Bylaws or
through any reorganization, transfer of assets, consolidation, merger, scheme of arrangement, dissolution, issue or sale of securities,
or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Note, and will
at all times in good faith carry out all of the provisions of this Note and take all action as may be required to protect the
rights of the Holder of this Note.

 

(9)          RESERVATION
OF AUTHORIZED SHARES.

 

(a)          Reservation.
The Company shall initially reserve out of its authorized and unissued shares of Common Stock a number of shares of Common Stock
for each of this Note and the Other Notes equal to the Conversion Rate with respect to the Conversion Amount of each such Note
as of the Issuance Date. So long as any of this Note and the Other Notes are outstanding, the Company shall take all action
necessary to reserve and keep available out of its authorized and unissued Common Stock, solely for the purpose of effecting the
conversion of this Note and the Other Notes, the number of shares of Common Stock specified above in this Section 9(a) as shall
from time to time be necessary to effect the conversion of all of the Notes then outstanding; provided, that at no time
shall the number of shares of Common Stock so reserved be less than the number of shares required to be reserved pursuant hereto
(in each case, without regard to any limitations on conversions) (the “Required Reserve Amount”). The initial
number of shares of Common Stock reserved for conversions of this Note and the Other Notes and each increase in the number of
shares so reserved shall be allocated pro rata among the Holder and the holders of the Other Notes based on the Principal amount
of this Note and the Other Notes held by each holder at the Closing (as defined in the Securities Purchase Agreement) or increase
in the number of reserved shares, as the case may be (the “Authorized Share Allocation”). In the event that
a holder shall sell or otherwise transfer this Note or any of such holder’s Other Notes, each transferee shall be allocated
a pro rata portion of such holder’s Authorized Share Allocation. Any shares of Common Stock reserved and allocated to any
Person which ceases to hold any Notes shall be allocated to the Holder and the remaining holders of Other Notes, pro rata based
on the Principal amount of this Note and the Other Notes then held by such holders.

 

(b)          Insufficient
Authorized Shares. If at any time while any of the Notes remain outstanding the Company does not have a sufficient number
of authorized and unreserved shares of Common Stock to satisfy its obligation to reserve for issuance upon conversion of the Notes
at least a number of shares of Common Stock equal to the Required Reserve Amount (an “Authorized Share Failure”),
then the Company shall immediately take all action necessary to increase the Company’s authorized shares of Common Stock
to an amount sufficient to allow the Company to reserve the Required Reserve Amount for the Notes then outstanding. Without limiting
the generality of the foregoing sentence, as soon as practicable after the date of the occurrence of an Authorized Share Failure,
but in no event later than sixty (60) days after the occurrence of such Authorized Share Failure, the Company shall either (x)
obtain the written consent of its stockholders for the approval of an increase in the number of authorized shares of Common Stock
and provide each stockholder with an information statement with respect thereto or (y) hold a meeting of its stockholders for
the approval of an increase in the number of authorized shares of Common Stock. In connection with such meeting, the Company shall
provide each stockholder with a proxy statement and shall use its best efforts to solicit its stockholders’ approval of
such increase in authorized shares of Common Stock and to cause its Board of Directors to recommend to the stockholders that they
approve such proposal. Notwithstanding the foregoing, if during any such time of an Authorized Share Failure, the Company is able
to obtain the written consent of a majority of the shares of its issued and outstanding Common Stock to approve the increase in
the number of authorized shares of Common Stock, the Company may satisfy this obligation by obtaining such consent and submitting
for filing with the SEC an Information Statement on Schedule 14A.

 

    	- 14 -

    	 

    

 

(10)        REDEMPTIONS.

 

(a)          Mechanics.
The Company shall deliver the applicable Event of Default Redemption Price to the Holder within three (3) Business Days after
the Company’s receipt of the Holder’s Event of Default Redemption Notice (the “Event of Default Redemption
Date”). If the Holder has submitted a Change of Control Redemption Notice in accordance with Section 5(b), the Company
shall deliver the applicable Change of Control Redemption Price to the Holder (i) concurrently with the consummation of such Change
of Control if such notice is received prior to the consummation of such Change of Control and (ii) within three (3) Business Days
after the Company’s receipt of such notice otherwise (such date, the “Change of Control Redemption Date”).
The Company shall pay the applicable Redemption Price to the Holder in cash by wire transfer of immediately available funds pursuant
to wire instructions provided by the holder in writing to the Company on the applicable due date. In the event of a redemption
of less than all of the Conversion Amount of this Note, the Company shall promptly cause to be issued and delivered to the Holder
a new Note (in accordance with Section 15(d)) representing the outstanding Principal which has not been redeemed and any accrued
Interest on such Principal which shall be calculated as if no Redemption Notice has been delivered. In the event that the Company
does not pay the applicable Redemption Price to the Holder within the time period required, at any time thereafter and until the
Company pays such unpaid Redemption Price in full, the Holder shall have the option, in lieu of redemption, to require the Company
to promptly return to the Holder all or any portion of this Note representing the Conversion Amount that was submitted for redemption
and for which the applicable Redemption Price (together with any Late Charges thereon) has not been paid. Upon the Company’s
receipt of such notice, (x) the applicable Redemption Notice shall be null and void with respect to such Conversion Amount, (y)
the Company shall immediately return this Note, or issue a new Note (in accordance with Section 15(d)) to the Holder representing
such Conversion Amount to be redeemed and (z) the Conversion Price of this Note or such new Notes shall be adjusted to the lesser
of (A) the Conversion Price as in effect on the date on which the applicable Redemption Notice is voided and (B) the lowest Closing
Bid Price of the Common Stock during the period beginning on and including the date on which the applicable Redemption Notice
is delivered to the Company and ending on and including the date on which the applicable Redemption Notice is voided. The Holder’s
delivery of a notice voiding a Redemption Notice and exercise of its rights following such notice shall not affect the Company’s
obligations to make any payments of Late Charges which have accrued prior to the date of such notice with respect to the Conversion
Amount subject to such notice.

 

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

 

    	- 15 -

    	 

    

 

(c)          Insufficient
Assets. If upon a Redemption Date, the assets of the Company are insufficient to pay the applicable Redemption Price, the
Company shall (i) take all appropriate action reasonably within its means to maximize the assets available for paying the applicable
Redemption Price, (ii) redeem out of all such assets available therefor on the applicable Redemption Date the maximum possible
Conversion Amount that it can redeem on such date, pro rata among the Holder and the holders of the Other Notes to be redeemed
in proportion to the aggregate Principal amount of this Note and the Other Notes outstanding on the applicable Redemption Date
and (iii) following the applicable Redemption Date, at any time and from time to time when additional assets of the Company become
available to redeem the remaining Conversion Amount of this Note and the Other Notes, the Company shall use such assets, at the
end of the then current fiscal quarter, to redeem the balance of such Conversion Amount of this Note and the Other Notes, or such
portion thereof for which assets are then available, on the basis set forth above at the applicable Redemption Price, and such
assets will not be used prior to the end of such fiscal quarter for any other purpose. Interest on the Principal amount of this
Note and the Other Notes that have not been redeemed shall continue to accrue until such time as the Company redeems this Note
and the Other Notes. The Company shall pay to the Holder the applicable Redemption Price without regard to the legal availability
of funds unless expressly prohibited by applicable law or unless the payment of the applicable Redemption Price could reasonably
be expected to result in personal liability to the directors of the Company (it being understood that the Company shall not claim
as a defense to the obligation to redeem that it does not have “funds legally available” as argued in SV Investment
Partners, LLC v. Though/Works, Inc. 7 A.3d 973 (Del. Ch. 2010)).

 

(11)          VOTING
RIGHTS. The Holder shall have no voting rights as the holder of this Note, except as required by law and as expressly provided
in this Note.

 

(12)          COVENANTS.

 

  (a)          Rank. All
payments due under this Note (a) shall rank pari passu with all Other Notes and (b) shall be senior to all other Indebtedness
of the Company and its Subsidiaries.

 

    	- 16 -

    	 

    

 

(b)          Incurrence
of Indebtedness. So long as this Note is outstanding, the Company shall not, and the Company shall not permit any of its Subsidiaries
to, directly or indirectly, incur or guarantee, assume or suffer to exist any Indebtedness, other than Permitted Indebtedness.

 

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

 

(d)          Restricted
Payments.

 

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

 

(ii)          The
Company shall not, and the Company shall not permit any of its Subsidiaries to, directly or indirectly, redeem, defease, repurchase,
repay or make any payments in respect of, by the payment of cash or cash equivalents (in whole or in part, whether by way of open
market purchases, tender offers, private transactions or otherwise), all or any portion of any Indebtedness (including, without
limitation Permitted Indebtedness other than this Note and the Other Notes), by way of payment in respect of principal of (or
premium, if any) such Indebtedness. For clarity, such restriction shall not preclude the payment of regularly scheduled interest
payments which may accrue under such Permitted Indebtedness.

 

(e)          Restriction
on Redemption and Cash Dividends. Until all of the Notes have been converted, redeemed or otherwise satisfied in accordance
with their terms, the Company shall not, and the Company shall not permit any of its Subsidiaries to, directly or indirectly,
redeem or repurchase its Equity Interest, or permit any Subsidiary to redeem or repurchase its Equity Interests (except on a pro
rata basis among all holders thereof) or declare or pay any cash dividend or distribution on any Equity Interest of the Company
or of its Subsidiaries without in each case the prior express written consent of the Required Holders.

 

(f)          Change
in Nature of Business. The Company shall not make, or permit any of its Subsidiaries to make, any change in the nature of
its business as described in the Company’s most recent Annual Report filed on Form 10-K with the SEC. The Company shall
not modify its corporate structure or purpose.

 

    	- 17 -

    	 

    

 

(g)          Intellectual
Property. The Company shall not, and the Company shall not permit any of its Subsidiaries, directly or indirectly, to encumber
or allow any Liens on, any of its own or its licensed copyright rights, copyright applications, copyright registrations and like
protections in each work of authorship and derivative work, whether published or unpublished, any patents, patent applications
and like protections, including improvements, divisions, continuations, renewals, reissues, extensions, and continuations-in-part
of the same, trademarks, service marks and, to the extent permitted under applicable law, any applications therefor, whether registered
or not, and the goodwill of the business of the Company and its Subsidiaries connected with and symbolized thereby, know-how,
operating manuals, trade secret rights, rights to unpatented inventions, and any claims for damage by way of any past, present,
or future infringement of any of the foregoing, other than Permitted Liens. Notwithstanding anything to the contrary contained
in this Note and this paragraph, the Company may enter into the transactions contemplated by the June 2015 Binding Letter of Intent
with LCB International, Inc. filed on June 18, 2015 with the SEC as Exhibit 99.1 to the Current Report on Form 8-K, whether such
transaction is effected in one or a series of related transactions, and the entry into any such transaction shall not be deemed
to be a violation of this paragraph.

 

(h)          Preservation
of Existence, Etc. The Company shall maintain and preserve, and cause each of its Subsidiaries to maintain and preserve, its
existence, rights and privileges, and become or remain, and cause each of its Subsidiaries to become or remain, duly qualified
and in good standing in each jurisdiction in which the character of the properties owned or leased by it or in which the transaction
of its business makes such qualification necessary.

 

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

 

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

 

(k)          Transactions
with Affiliates. The Company shall not, nor shall it permit any of its Subsidiaries to, enter into, renew, extend or be a
party to, any transaction or series of related transactions (including, without limitation, the purchase, sale, lease, transfer
or exchange of property or assets of any kind or the rendering of services of any kind) with any Affiliate, except in the ordinary
course of business in a manner and to an extent consistent with past practice and necessary or desirable for the prudent operation
of its business, for fair consideration and on terms no less favorable to it or its Subsidiaries than would be obtainable in a
comparable arm’s length transaction with a Person that is not an Affiliate thereof. Notwithstanding anything to the contrary
contained in this Note, the transactions contemplated by the June 2015 Binding Letter of Intent with LCB International, Inc. filed
on June 18, 2015 with the SEC as Exhibit 99.1 to the Current Report on Form 8-K, whether such transaction is effected in one or
a series of related transactions, shall not be considered to be a transaction with an affiliate for purposes of this paragraph.

 

    	- 18 -

    	 

    

 

(13)        VOTE
TO ISSUE, OR CHANGE THE TERMS OF, NOTES. The affirmative vote at a meeting duly called for such purpose or the written consent
without a meeting of the Required Holders shall be required for any change or amendment or waiver of any provision to this Note
or any of the Other Notes. Any change, amendment or waiver by the Company and the Required Holders shall be binding on the Holder
of this Note and all holders of the Other Notes.

 

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

 

(15)        REISSUANCE
OF THIS NOTE.

 

(a)          Transfer.
If this Note is to be transferred, the Holder shall surrender this Note to the Company, whereupon the Company will forthwith issue
and deliver upon the order of the Holder a new Note (in accordance with Section 15(d) and subject to Section 3(c)(iii)), registered
as the Holder may request, representing the outstanding Principal being transferred by the Holder and, if less than the entire
outstanding Principal is being transferred, a new Note (in accordance with Section 15(d)) to the Holder representing the outstanding
Principal not being transferred. The Holder and any assignee, by acceptance of this Note, acknowledge and agree that, by reason
of the provisions of Section 3(c)(iii) following conversion or redemption of any portion of this Note, the outstanding Principal
represented by this Note may be less than the Principal stated on the face of this Note.

 

(b)          Lost,
Stolen or Mutilated Note. Upon receipt by the Company of evidence reasonably satisfactory to the Company of the loss, theft,
destruction or mutilation of this Note, and, in the case of loss, theft or destruction, of any indemnification undertaking by
the Holder to the Company in customary form and, in the case of mutilation, upon surrender and cancellation of this Note, the
Company shall execute and deliver to the Holder a new Note (in accordance with Section 15(d)) representing the outstanding Principal.

 

(c)          Note
Exchangeable for Different Denominations. This Note is exchangeable, upon the surrender hereof by the Holder at the principal
office of the Company, for a new Note or Notes (in accordance with Section 15(d) representing in the aggregate the outstanding
Principal of this Note, and each such new Note will represent such portion of such outstanding Principal as is designated by the
Holder at the time of such surrender.

 

(d)          Issuance
of New Notes. Whenever the Company is required to issue a new Note pursuant to the terms of this Note, such new Note (i) shall
be of like tenor with this Note, (ii) shall represent, as indicated on the face of such new Note, the Principal remaining outstanding
(or in the case of a new Note being issued pursuant to Section 15(a) or Section 15(c), the Principal designated by the Holder
which, when added to the principal represented by the other new Notes issued in connection with such issuance, does not exceed
the Principal remaining outstanding under this Note immediately prior to such issuance of new Notes), (iii) shall have an issuance
date, as indicated on the face of such new Note, which is the same as the Issuance Date of this Note, (iv) shall have the same
rights and conditions as this Note, and (v) shall represent accrued and unpaid Interest and Late Charges, if any, on the Principal
and Interest of this Note, from the Issuance Date.

 

    	- 19 -

    	 

    

 

(16)          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. Amounts
set forth or provided for herein with respect to payments, conversion, redemption 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 breach, without the necessity of showing economic loss and without any bond or other security
being required.

 

(17)          PAYMENT
OF COLLECTION, ENFORCEMENT AND OTHER COSTS. If (a) this Note is placed in the hands of an attorney for collection or enforcement
or is collected or enforced through any legal proceeding or the Holder otherwise takes action to collect amounts due under this
Note or to enforce the provisions of this Note or (b) there occurs any bankruptcy, reorganization, receivership of the Company
or other proceedings affecting Company creditors’ rights and involving a claim under this Note, then the Company shall pay
the costs incurred by the Holder for such collection, enforcement or action or in connection with such bankruptcy, reorganization,
receivership or other proceeding, including, but not limited to, attorneys’ fees and disbursements.

 

(18)          CONSTRUCTION;
HEADINGS. This Note shall be deemed to be jointly drafted by the Company and all the purchasers of the Notes pursuant to the
Securities Purchase Agreement (the “Purchasers”) and shall not be construed against any person as the drafter
hereof. The headings of this Note are for convenience of reference and shall not form part of, or affect the interpretation of,
this Note.

 

(19)          FAILURE
OR INDULGENCE NOT WAIVER. No failure or delay on the part of the Holder in the exercise of any power, right or privilege hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other
or further exercise thereof or of any other right, power or privilege.

 

    	- 20 -

    	 

    

 

(20)        DISPUTE
RESOLUTION. In the case of a dispute as to the determination of the Closing Bid Price or the Closing Sale Price or the arithmetic
calculation of the Conversion Rate, the Conversion Price or any Redemption Price, the Company shall submit the disputed determinations
or arithmetic calculations via facsimile or electronic mail within one (1) Business Day of receipt, or deemed receipt, of the
Conversion Notice or Redemption Notice or other event giving rise to such dispute, as the case may be, to the Holder. If the Holder
and the Company are unable to agree upon such determination or calculation within one (1) Business Day of such disputed determination
or arithmetic calculation being submitted to the Holder, then the Company shall, within one (1) Business Day submit via facsimile
or electronic mail (a) the disputed determination of the Closing Bid Price or the Closing Sale Price to an independent, reputable
investment bank selected by the Holder and approved by the Company, such approval not to be unreasonably withheld, conditioned
or delayed, or (b) the disputed arithmetic calculation of the Conversion Rate, Conversion Price or any Redemption Price to an
independent, outside accountant, selected by the Holder and approved by the Company, such approval not to be unreasonably withheld,
conditioned or delayed. The Company, at the Company’s expense, shall cause the investment bank or the accountant, as the
case may be, to perform the determinations or calculations and notify the Company and the Holder of the results no later than
five (5) Business Days from the time it receives the disputed determinations or calculations. Such investment bank’s or
accountant’s determination or calculation, as the case may be, shall be binding upon all parties absent demonstrable error.

 

(21)        NOTICES;
PAYMENTS.

 

(a)          Notices.
Whenever notice is required to be given under this Note, unless otherwise provided herein, such notice shall be given in accordance
with Section 9(f) of the Securities Purchase Agreement. The Company shall provide the Holder with prompt written notice of all
actions taken pursuant to this Note, including in reasonable detail a description of such action and the reason therefore. Without
limiting the generality of the foregoing, the Company shall give written notice to the Holder (i) immediately upon any adjustment
of the Conversion Price, setting forth in reasonable detail, and certifying, the calculation of such adjustment and (ii) at least
twenty (20) days prior to the date on which the Company closes its books or takes a record (A) with respect to any dividend or
distribution upon the Common Stock, (B) with respect to any pro rata subscription offer to holders of Common Stock or (C) for
determining rights to vote with respect to any Fundamental Transaction, dissolution or liquidation, provided in each case that
such information shall be made known to the public prior to or in conjunction with such notice being provided to the Holder.

 

(b)          Payments.
Whenever any payment of cash is to be made by the Company to any Person pursuant to this Note, such payment shall be made in lawful
money of the United States of America by a check drawn on the account of the Company and sent via overnight courier service to
such Person at such address as previously provided to the Company in writing (which address, in the case of each of the Purchasers,
shall initially be as set forth on the Schedule of Buyers attached to the Securities Purchase Agreement); provided, that
the Holder may elect to receive a payment of cash via wire transfer of immediately available funds by providing the Company with
prior written notice setting out such request and the Holder’s wire transfer instructions. Whenever any amount expressed
to be due by the terms of this Note is due on any day which is not a Business Day, the same shall instead be due on the next succeeding
day which is a Business Day. Any amount of Principal or other amounts due under the Transaction Documents which is not paid when
due shall result in a late charge being incurred and payable by the Company in an amount equal to interest on such amount at the
rate of eighteen percent (18.0%) per annum from the date such amount was due until the same is paid in full (“Late Charge”).

 

    	- 21 -

    	 

    

 

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

 

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

 

(24)          GOVERNING
LAW; JURISDICTION; JURY TRIAL. This Note shall be construed and enforced in accordance with, and all questions concerning
the construction, validity, interpretation and performance of this Note shall be governed by, the internal laws of the State of
New York, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of New York or
any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of New York. The
Company hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in The City of New York,
Borough of Manhattan, for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated
hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim
that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an
inconvenient forum or that the venue of such suit, action or proceeding is improper. The Company hereby irrevocably waives personal
service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof to such
party at the address set forth in Section 9(f) of the Securities Purchase Agreement and agrees that such service shall constitute
good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right
to serve process in any manner permitted by law. Nothing contained herein shall be deemed or operate to preclude the Holder from
bringing suit or taking other legal action against the Company in any other jurisdiction to collect on the Company’s obligations
to the Holder, to realize on any collateral or any other security for such obligations, or to enforce a judgment or other court
ruling in favor of the Holder. THE COMPANY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY
TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS NOTE OR ANY TRANSACTION CONTEMPLATED
HEREBY.

 

(25)          Severability.
If any provision of this Note is prohibited by law or otherwise determined to be invalid or unenforceable by a court of competent
jurisdiction, the provision that would otherwise be prohibited, invalid or unenforceable shall be deemed amended to apply to the
broadest extent that it would be valid and enforceable, and the invalidity or unenforceability of such provision shall not affect
the validity of the remaining provisions of this Note so long as this Note as so modified continues to express, without material
change, the original intentions of the parties as to the subject matter hereof and the prohibited nature, invalidity or unenforceability
of the provision(s) in question does not substantially impair the respective expectations or reciprocal obligations of the parties
or the practical realization of the benefits that would otherwise be conferred upon the parties. The parties will endeavor in
good faith negotiations to replace the prohibited, invalid or unenforceable provision(s) with a valid provision(s), the effect
of which comes as close as possible to that of the prohibited, invalid or unenforceable provision(s).

 

    	- 22 -

    	 

    

 

(26)        DISCLOSURE.
Upon receipt or delivery by the Company of any notice in accordance with the terms of this Note, unless the Company has in good
faith determined that the matters relating to such notice do not constitute material, nonpublic information relating to the Company
or its Subsidiaries, the Company shall within one (1) Business Day after any such receipt or delivery publicly disclose such material,
nonpublic information on a Current Report on Form 8-K or otherwise. In the event that the Company believes that a notice contains
material, nonpublic information relating to the Company or its Subsidiaries, the Company so shall indicate to such Holder contemporaneously
with delivery of such notice, and in the absence of any such indication, the Holder shall be allowed to presume that all matters
relating to such notice do not constitute material, nonpublic information relating to the Company or its Subsidiaries.

 

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

 

(a)          “Affiliate”
means, with respect to any Person, any other Person that directly or indirectly controls, is controlled by, or is under common
control with, such Person, it being understood for purposes of this definition that “control” of a Person means the
power directly or indirectly either to vote 10% or more of the stock having ordinary voting power for the election of directors
of such Person or direct or cause the direction of the management and policies of such Person whether by contract or otherwise.

 

(b)          “Attribution
Parties” means, collectively, the following Persons and entities: (i) any investment vehicle, including, any funds,
feeder funds or managed accounts, currently, or from time to time after the Issuance Date, directly or indirectly managed or advised
by the Holder’s investment manager or any of its Affiliates or principals, (ii) any direct or indirect Affiliates of the
Holder or any of the foregoing, (iii) any Person acting or who could be deemed to be acting as a Group together with the Holder
or any of the foregoing and (iv) any other Persons whose beneficial ownership of the Company’s Common Stock would or could
be aggregated with the Holder’s and the other Attribution Parties for purposes of Section 13(d) of the Exchange Act. For
clarity, the purpose of the foregoing is to subject collectively the Holder and all other Attribution Parties to the Maximum Percentage.

 

(c)          “Bloomberg”
means Bloomberg Financial Markets.

 

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

 

    	- 23 -

    	 

    

 

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

 

(f)          “Closing
Bid Price” and “Closing Sale Price” means, for any security as of any date, the last closing bid
price and last closing trade price, respectively, for such security on the Principal Market, as reported by Bloomberg, or, if
the Principal Market begins to operate on an extended hours basis and does not designate the closing bid price or the closing
trade price, as the case may be, then the last bid price or last trade price, respectively, of such security prior to 4:00:00
p.m., New York Time, as reported by Bloomberg, or, if the Principal Market is not the principal securities exchange or trading
market for such security, the last closing bid price or last trade price, respectively, of such security on the principal securities
exchange or trading market where such security is listed or traded as reported by Bloomberg, or if the foregoing do not apply,
the last closing bid price or last trade price, respectively, of such security in the over-the-counter market on the electronic
bulletin board for such security as reported by Bloomberg, or, if no closing bid price or last trade price, respectively, is reported
for such security by Bloomberg, the average of the bid prices, or the ask prices, respectively, of any market makers for such
security as reported in the OTC Link or “pink sheets” by OTC Markets Group Inc. (formerly Pink OTC Markets Inc.).
If the Closing Bid Price or the Closing Sale Price cannot be calculated for a security on a particular date on any of the foregoing
bases, the Closing Bid Price or the Closing Sale Price, as the case may be, of such security on such date shall be the fair market
value as mutually determined by the Company and the Holder. If the Company and the Holder are unable to agree upon the fair market
value of such security, then such dispute shall be resolved pursuant to Section 20. All such determinations to be appropriately
adjusted for any stock dividend, stock split, stock combination, reclassification or similar transaction during the applicable
calculation period.

 

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

 

(h)          “Common
Stock” means (i) the Company’s shares of Common Stock, par value $0.005 per share, and (ii) any share
capital into which such Common Stock shall have been changed or any share capital resulting from a reclassification of such Common
Stock.

 

(i)          “Contingent
Obligation” means, as to any Person, any direct or indirect liability, contingent or otherwise, of that Person with
respect to any Indebtedness, lease, dividend or other obligation of another Person if the primary purpose or intent of the Person
incurring such liability, or the primary effect thereof, is to provide assurance to the obligee of such liability that such liability
will be paid or discharged, or that any agreements relating thereto will be complied with, or that the holders of such liability
will be protected (in whole or in part) against loss with respect thereto.

 

    	- 24 -

    	 

    

 

(j)          “Convertible
Securities” means any stock or securities (other than Options) directly or indirectly convertible into or exercisable
or exchangeable for shares of Common Stock.

 

(k)          “Designee”
means Empery Asset Management, LP.

 

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

 

(m)          “Equity
Interests” means (a) all shares of capital stock (whether denominated as common capital stock or preferred capital stock),
equity interests, beneficial, partnership or membership interests, joint venture interests, participations or other ownership
or profit interests in or equivalents (regardless of how designated) of or in a Person (other than an individual), whether voting
or non-voting and (b) all securities convertible into or exchangeable for any of the foregoing and all warrants, options or other
rights to purchase, subscribe for or otherwise acquire any of the foregoing, whether or not presently convertible, exchangeable
or exercisable.

 

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

 

(o)          “Fundamental
Transaction” means (A) that the Company shall, directly or indirectly, including through Subsidiaries, Affiliates or
otherwise, in one or more related transactions, (i) consolidate or merge with or into (whether or not the Company is the surviving
corporation) another Subject Entity, or (ii) sell, assign, transfer, convey or otherwise dispose of all or substantially all of
the properties or assets of the Company or any of its “significant subsidiaries” (as defined in Rule 1-02 of Regulation
S-X) to one or more Subject Entities, or (iii) make, or allow one or more Subject Entities to make, or allow the Company to be
subject to or have its Common Stock be subject to or party to one or more Subject Entities making, a purchase, tender or exchange
offer that is accepted by the holders of at least either (x) 50% of the outstanding shares of Common Stock, (y) 50% of the outstanding
shares of Common Stock calculated as if any shares of Common Stock held by all Subject Entities making or party to, or Affiliated
with any Subject Entities making or party to, such purchase, tender or exchange offer were not outstanding; or (z) such number
of shares of Common Stock such that all Subject Entities making or party to, or Affiliated with any Subject Entity making or party
to, such purchase, tender or exchange offer, become collectively the beneficial owners (as defined in Rule 13d-3 under the Exchange
Act) of at least 50% of the outstanding shares of Common Stock, or (iv) consummate a stock purchase agreement or other business
combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with one or
more Subject Entities whereby such Subject Entities, individually or in the aggregate, acquire, either (x) at least 50% of the
outstanding shares of Common Stock, (y) at least 50% of the outstanding shares of Common Stock calculated as if any shares of
Common Stock held by all the Subject Entities making or party to, or Affiliated with any Subject Entity making or party to, such
stock purchase agreement or other business combination were not outstanding; or (z) such number of shares of Common Stock such
that the Subject Entities become collectively the beneficial owners (as defined in Rule 13d-3 under the Exchange Act) of at least
50% of the outstanding shares of Common Stock, or (v) reorganize, recapitalize or reclassify its Common Stock, (B) that the Company
shall, directly or indirectly, including through Subsidiaries, Affiliates or otherwise, in one or more related transactions allow any
Subject Entity individually or the Subject Entities in the aggregate to be or become the “beneficial owner” (as defined
in Rule 13d-3 under the Exchange Act), directly or indirectly, whether through acquisition, purchase, assignment, conveyance,
tender, tender offer, exchange, reduction in outstanding shares of Common Stock, merger, consolidation, business combination,
reorganization, recapitalization, spin-off, scheme of arrangement, reorganization, recapitalization or reclassification or otherwise
in any manner whatsoever, of either (x) at least 50% of the aggregate ordinary voting power represented by issued and outstanding
Common Stock, (y) at least 50% of the aggregate ordinary voting power represented by issued and outstanding Common Stock not held
by all such Subject Entities as of the date of this Note calculated as if any shares of Common Stock held by all such Subject
Entities were not outstanding, or (z) a percentage of the aggregate ordinary voting power represented by issued and outstanding
shares of Common Stock or other equity securities of the Company sufficient to allow such Subject Entities to effect a statutory
short form merger or other transaction requiring other stockholders of the Company to surrender their shares of Common Stock without
approval of the stockholders of the Company or (C) directly or indirectly, including through Subsidiaries, Affiliates or otherwise,
in one or more related transactions, the issuance of or the entering into any other instrument or transaction structured in a
manner to circumvent, or that circumvents, the intent of this definition in which case this definition shall be construed and
implemented in a manner otherwise than in strict conformity with the terms of this definition to the extent necessary to correct
this definition or any portion of this definition which may be defective or inconsistent with the intended treatment of such instrument
or transaction. Notwithstanding anything to the contrary contained in this Note, the transactions contemplated by the June 2015
Binding Letter of Intent with LCB International, Inc. filed on June 18, 2015 with the SEC as Exhibit 99.1 to the Current Report
on Form 8-K, whether such transaction is effected in one or a series of related transactions, shall not be considered to be a
Fundamental Transaction.

 

    	- 25 -

    	 

    

 

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

 

(q)          “Group”
means a “group” as that term is used in Section 13(d) of the Exchange Act and as defined in Rule 13d-5 thereunder.

 

(r)          “Holiday”
means a day other than a Business Day or on which trading does not take place on the Principal Market.

 

(s)          “Indebtedness”
of any Person means, without duplication (i) all indebtedness for borrowed money, (ii) all obligations issued, undertaken or assumed
as the deferred purchase price of property or services, including (without limitation) “capital leases” in accordance
with GAAP (other than trade payables entered into in the ordinary course of business consistent with past practice), (iii) all
reimbursement or payment obligations with respect to letters of credit, surety bonds and other similar instruments, (iv) all obligations
evidenced by notes, bonds, debentures or similar instruments, including obligations so evidenced incurred in connection with the
acquisition of property, assets or businesses, (v) all indebtedness created or arising under any conditional sale or other title
retention agreement, or incurred as financing, in either case with respect to any property or assets acquired with the proceeds
of such indebtedness (even though the rights and remedies of the seller or bank under such agreement in the event of default are
limited to repossession or sale of such property), (vi) all monetary obligations under any leasing or similar arrangement which,
in connection with GAAP, consistently applied for the periods covered thereby, is classified as a capital lease, (vii) all indebtedness
referred to in clauses (i) through (vi) above secured by (or for which the holder of such Indebtedness has an existing right,
contingent or otherwise, to be secured by) any mortgage, deed of trust, lien, pledge, charge, security interest or other encumbrance
of any nature whatsoever in or upon any property or assets (including accounts and contract rights) with respect to any asset
or property owned by any Person, even though the Person which owns such assets or property has not assumed or become liable for
the payment of such indebtedness, and (viii) all Contingent Obligations in respect of indebtedness or obligations of others of
the kinds referred to in clauses (i) through (vii) above.

 

    	- 26 -

    	 

    

 

(t)          “Interest
Rate” means 12.0% per annum, subject to adjustment as set forth in Section 2.

 

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

 

(v)          “Parent
Entity” of a Person means an entity that, directly or indirectly, controls the applicable Person, including such entity
whose common capital stock or equivalent equity security is quoted or listed on an Eligible Market (or, if so elected by the Required
Holders, any other market, exchange or quotation system), or, if there is more than one such Person or such entity, the Person
or entity designated by the Required Holders or in the absence of such designation, such Person or such entity with the largest
public market capitalization as of the date of consummation of the Fundamental Transaction.

 

(w)         “Permitted
Indebtedness” means (i) Indebtedness evidenced by this Note and the Other Notes, (ii) trade payables incurred in the
ordinary course of business consistent with past practice, (iii) unsecured Indebtedness incurred by the Company that is
made expressly subordinate in right of payment to the Indebtedness evidenced by this Note, as reflected in a written agreement
acceptable to the Required Holders and approved by the Required Holders in writing, and which Indebtedness does not provide at
any time for (a) the payment, prepayment, repayment, repurchase or defeasance, directly or indirectly, of any principal or premium,
if any, thereon until ninety-one (91) days after the Maturity Date or later and (b) total interest and fees at a rate in excess
of twelve percent (12.0%) per annum, (iv) the Indebtedness set forth on Schedule 27(w) hereto and (v) Indebtedness secured
by Permitted Liens described in clauses (iv) and (v) of the definition of Permitted Liens.

 

(x)          “Permitted
Liens” means (i) any Lien for taxes not yet due or delinquent or being contested in good faith by appropriate proceedings
for which adequate reserves have been established in accordance with GAAP, (ii) any statutory Lien arising in the ordinary course
of business by operation of law with respect to a liability that is not yet due or delinquent, (iii) any Lien created by operation
of law, such as materialmen’s liens, mechanics’ liens and other similar liens, arising in the ordinary course of business
with respect to a liability that is not yet due or delinquent or that are being contested in good faith by appropriate proceedings,
(iv) Liens (A) upon or in any equipment acquired or held by the Company or any of its Subsidiaries to secure the purchase price
of such equipment or Indebtedness incurred solely for the purpose of financing the acquisition or lease of such equipment, or
(B) existing on such equipment at the time of its acquisition, provided that the Lien is confined solely to the property so acquired
and improvements thereon, and the proceeds of such equipment, (v) Liens incurred in connection with the extension, renewal or
refinancing of the Indebtedness secured by Liens of the type described in clause (iv) above, provided that any extension, renewal
or replacement Lien shall be limited to the property encumbered by the existing Lien and the principal amount of the Indebtedness
being extended, renewed or refinanced does not increase, (vi) leases or subleases and licenses and sublicenses granted to others
in the ordinary course of the Company’s business, not interfering in any material respect with the business of the Company
and its Subsidiaries taken as a whole, (vii) Liens in favor of customs and revenue authorities arising as a matter of law
to secure payments of custom duties in connection with the importation of goods, (viii) Liens arising from judgments, decrees
or attachments in circumstances not constituting an Event of Default under Section 4(a)(viii) and (ix) liens listed on Schedule
27(x) hereto.

 

    	- 27 -

    	 

    

 

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

 

(z)          “Principal
Market” means The NASDAQ Capital Market.

 

(aa)        “Redemption
Dates” means, collectively, the Event of Default Redemption Dates and the Change of Control Redemption Dates, each of
the foregoing, individually, a Redemption Date.

 

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

 

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

 

(dd)       “Related
Fund” means, with respect to any Person, a fund or account managed by such Person or an Affiliate of such Person.

 

(ee)        “Required
Holders” means the holders of Notes representing at least a majority of the aggregate principal amount of the Notes
then outstanding and shall include the Designee so long as the Designee or any of its Affiliates holds any Notes.

 

(ff)         “SEC”
means the United States Securities and Exchange Commission.

 

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

 

    	- 28 -

    	 

    

 

(hh)        “Securities
Purchase Agreement” means that certain securities purchase agreement dated as of the Subscription Date by and among
the Company and the Purchasers of the Notes pursuant to which the Company issued the Notes and Warrants.

 

(ii)          “Subject
Entity” means any Person, Persons or Group or any Affiliate or associate of any such Person, Persons or Group.

 

(jj)          “Subscription
Date” means August [  ], 2015.

 

(kk)        “Subsidiary”
has the meaning ascribed to such term in the Securities Purchase Agreement.

 

(ll)          “Successor
Entity” means one or more Person or Persons (or, if so elected by the Required Holders, the Company or Parent Entity)
formed by, resulting from or surviving any Fundamental Transaction or one or more Person or Persons (or, if so elected by the
Required Holders, the Company or the Parent Entity) with which such Fundamental Transaction shall have been entered into.

 

(i)          “Trading
Day” means any day on which the Common Stock is traded on the Principal Market, or, if the Principal Market is not the
principal trading market for the Common Stock on such day, then on the principal securities exchange or securities market on which
the Common Stock is then traded; provided that in circumstances where “Trading Day” is used (i) in connection with
determining a Closing Bid Price, Closing Sale Price or any other pricing provisions, including, without limitation, the determination
of any pricing period and (ii) in any other context provided such day is the last day of a period of time expressed in Trading
Days, “Trading Day” shall not include any day on which the Common Stock trades on exchanges and markets for less than
4.5 hours or any day that the Common Stock is suspended from trading during the final hour of trading on such exchanges or markets
(or if such exchange or market does not designate in advance the closing time of trading on such exchange or market, then during
the hour ending at 4:00:00 p.m., New York time).

 

(mm)      “Transaction
Document” has the meaning ascribed to such term in the Securities Purchase Agreement.

 

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

 

[Signature
Page Follows]

 

    	- 29 -

    	 

    

 

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

	 	 	 	 
	 	Axion
    Power International, Inc.
	 	 	 	 
	 	By: 	 	 
	 	 	  Name:
  Title:	 

 

 

    	 

    	 

    

   

EXHIBIT
I

Axion power international, inc. 

 

CONVERSION
NOTICE

 

Reference
is made to the Senior Convertible Note (the “Note”) issued to the undersigned by Axion Power International,
Inc., a Delaware corporation (the “Company”). In accordance with and pursuant to the Note, the undersigned
hereby elects to convert the Conversion Amount (as defined in the Note) of the Note indicated below into shares of Common Stock
par value $0.005 per share (the “Common Stock”) of the Company, as of the date specified below.  

	 	 	 
	 	Date of Conversion: 	 

	 	 	 
	 	Aggregate Conversion Amount to be converted:  	 

 

Please confirm the following information: 

	 	 	 
	 	Conversion Price:  	 

	 	 	 
	 	Number of shares of Common Stock to be issued:	 

 

Please issue the Common Stock into which the Note is being
converted in the following name and to the following address: 

	 	 	 
	 	Issue to:   	 
	 	 	 
	 	 	 

	 	 	 
	 	      Facsimile Number and Electronic Mail:  	 

	 	 	 
	 	Authorization:  	 

	 	 	 
	 	By:  	 

	 	 	 
	 	Title:  	 

	 	 	 
	Dated:  	 	 

	 	 	 
	 	Account Number:	 
	 	  (if electronic book entry transfer)

 

    	 

    	 

    

 

	 	 	 
	 	Transaction Code Number:	 
	 	  (if electronic book entry transfer)

 

    	 

    	 

    

 

 ACKNOWLEDGMENT

 

The
Company hereby acknowledges this Conversion Notice and hereby directs Continental Stock Transfer & Trust Company to issue
the above indicated number of shares of Common Stock in accordance with the Transfer Agent Instructions dated August__, 2015 from
the Company and acknowledged and agreed to by Continental Stock Transfer & Trust Company. 

	 	 	 	 
	 	Axion
    Power International, Inc.
	 	 	 	 
	 	By: 	 	 
	 	 	  Name:
  Title:	 

 

 

    	 

    	 

    

 

SCHEDULE
27(W) AND 27(X)

 

PERMITTED
INDEBTEDNESS AND LIENS

 

1. $65,000
principal amount of subordinated convertible notes, dated May 8, 2013. Unsecured.

 

2. $291,975
principal amount of notes due to landlords for deferred rent May – December 2015, due December 31, 2015.. Only security
is the statutory Pennsylvania landlord’s lien on personalty located on leased premises.

 

3. Commonwealth
of Pennsylvania Department of Community and Economic Development Machinery and Equipment Loan Fund The balance owed on the loan
at December 31, 2014 is $163,465, which bears interest at a rate of 5.25% and matures on October 1, 2016.

 

4. The
transactions contemplated by the June 2015 Binding Letter of Intent with LCB International, Inc. filed on June 18, 2015 with the
SEC as Exhibit 99.1 to the Current Report on Form 8-K, whether such transaction is effected in one or a series of related transactions,
which shall be secured by a first lien on the Company’s IP and other assets related to its business.Exhibit 10.3

 

[FORM OF WARRANT]

 

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 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.

 

Axion
power international, INC.

 

Warrant
To Purchase Common Stock

 

Warrant No.: ____________

Number of Shares of Common Stock:_____________

Date of Issuance: August [___], 2015 (“Issuance Date”)

 

Axion Power International,
Inc., a Delaware corporation (the “Company”), hereby certifies that, for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, [BUYER], the registered
holder hereof or its permitted assigns (the “Holder”), is entitled, subject to the terms set forth below, to
purchase from the Company, at the Exercise Price (as defined below) then in effect, at any time or times on or after the Issuance
Date, but not after 11:59 p.m., New York time, on the Expiration Date, (as defined below), ______________ (_____________)1
fully paid nonassessable shares of Common Stock, subject to adjustment as provided herein (the “Warrant Shares”).
Except as otherwise defined herein, capitalized terms in this Warrant to Purchase Common Stock (including any Warrants to Purchase
Common Stock issued in exchange, transfer or replacement hereof, this “Warrant”), shall have the meanings set
forth in Section 17. This Warrant is one of the Warrants to purchase Common Stock (the “SPA Warrants”) issued
pursuant to Section 1 of that certain Securities Purchase Agreement, dated as of August [ ], 2015 (the “Subscription Date”),
by and among the Company and the investors (the “Buyers”) referred to therein (the “Securities Purchase
Agreement”). Capitalized terms used herein and not otherwise defined shall have the definitions ascribed to such terms
in the Securities Purchase Agreement.

 

 

1
Insert number of shares of Common Stock equal to the dollar amount paid by the Holder as Purchase Price pursuant to the
Securities Purchase Agreement.

 

    	 

    	 

    

 

1.            EXERCISE
OF WARRANT.

 

(a)        Mechanics
of Exercise. Subject to the terms and conditions hereof (including, without limitation, the limitations set forth in
Section 1(f)), this Warrant may be exercised by the Holder at any time or times on or after the Issuance Date, in whole or in
part, by (i) delivery of a written notice, in the form attached hereto as Exhibit A (the “Exercise
Notice”), of the Holder’s election to exercise this Warrant and (ii) (A) payment to the Company of an amount
equal to the applicable Exercise Price multiplied by the number of Warrant Shares as to which this Warrant is being exercised
(the “Aggregate Exercise Price”) in cash by wire transfer of immediately available funds or (B) if the
provisions of Section 1(d) are applicable, by notifying the Company that this Warrant is being exercised pursuant to a
Cashless Exercise (as defined in Section 1(d)). The Holder shall not be required to deliver the original Warrant in order to
effect an exercise hereunder. Execution and delivery of the Exercise Notice with respect to less than all of the Warrant
Shares shall have the same effect as cancellation of the original Warrant and issuance of a new Warrant evidencing the right
to purchase the remaining number of Warrant Shares. On or before the first (1st) Trading Day following the date on
which the Company has received the Exercise Notice, the Company shall transmit by facsimile an acknowledgment of confirmation
of receipt of the Exercise Notice to the Holder and the Company’s transfer agent (the “Transfer
Agent”). On or before the third (3rd) Trading Day following the date on which the Company has received the Exercise
Notice, so long as the Holder delivers the Aggregate Exercise Price (or notice of a Cashless Exercise) on or prior to the
second (2nd) Trading Day following the date on which the Company has received the Exercise Notice (the “Share
Delivery Date”) (provided that if the Aggregate Exercise Price has not been delivered by such date, the Share
Delivery Date shall be one (1) Trading Day after the Aggregate Exercise Price (or notice of a Cashless Exercise) is
delivered), the Company shall (X) provided that the Transfer Agent is participating in The Depository Trust Company
(“DTC”) Fast Automated Securities Transfer Program and the Company is able to deliver unlegended shares
hereunder in accordance with the provisions of Section 2(g) of the Securities Purchase Agreement, credit such
aggregate number of Warrant Shares to which the Holder is entitled pursuant to such exercise to the Holder’s or its
designee’s balance account with DTC through its Deposit / Withdrawal At Custodian system, or (Y) if the Transfer Agent
is not participating in the DTC Fast Automated Securities Transfer Program and/or the Company is not able to deliver
unlegended shares hereunder in accordance with the provisions of Section 2(g) of the Securities Purchase Agreement, issue and
dispatch by overnight courier to the address as specified in the Exercise Notice, a certificate, registered in the
Company’s share register in the name of the Holder or its designee, for the number of Warrant Shares to which the
Holder is entitled pursuant to such exercise. The Company shall be responsible for all fees and expenses of the Transfer
Agent and all fees and expenses with respect to the issuance of Warrant Shares via DTC, if any. Upon delivery of the Exercise
Notice, the Holder shall be deemed for all corporate purposes to have become the holder of record of the Warrant Shares with
respect to which this Warrant has been exercised, irrespective of the date such Warrant Shares are credited to the
Holder’s DTC account or the date of delivery of the certificates evidencing such Warrant Shares, as the case may be. If
this Warrant is submitted in connection with any exercise pursuant to this Section 1(a) and the number of Warrant Shares
represented by this Warrant submitted for exercise is greater than the number of Warrant Shares being acquired upon an
exercise, then the Company shall as soon as practicable and in no event later than three (3) Trading Days after any exercise
and at its own expense, issue a new Warrant (in accordance with Section 7(d)) representing the right to purchase the number
of Warrant Shares issuable immediately prior to such exercise under this Warrant, less the number of Warrant Shares with
respect to which this Warrant is exercised. No fractional Warrant Shares are to be issued upon the exercise of this
Warrant, but rather the number of Warrant Shares to be issued shall be rounded up to the nearest whole number. The Company
shall pay any and all taxes which may be payable with respect to the issuance and delivery of Warrant Shares upon exercise of
this Warrant. The Company’s obligations to issue and deliver Warrant Shares in accordance with the terms and subject to
the conditions 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.

 

    	- 2 -

    	 

    

 

(b)        Exercise
Price. For purposes of this Warrant, “Exercise Price” means $1.75 per share of Common Stock, subject to
adjustment as provided herein.

 

(c)        Company’s
Failure to Timely Deliver Securities. If the Company shall fail for any reason or for no reason to issue to the Holder
on or prior to the Share Delivery Date either (I) if the Transfer Agent is not participating in the DTC Fast Automated
Securities Transfer Program and/or the Company cannot deliver unlegended shares hereunder in accordance with the provisions
of Section 2(g) of the Securities Purchase Agreement, a certificate for the number of shares of Common Stock to which the
Holder is entitled and register such shares of Common Stock on the Company’s share register or if the Transfer Agent is
participating in the DTC Fast Automated Securities Transfer Program, to credit the Holder’s balance account with DTC,
for such number of shares of Common Stock to which the Holder is entitled upon the Holder’s exercise of this Warrant or
(II) if a registration statement covering the resale of the Warrant Shares that are the subject of the Exercise Notice (the
“Unavailable Warrant Shares”) is not available for the resale of such Unavailable Warrant Shares and the
Company fails to promptly (x) so notify the Holder and (y) deliver the Warrant Shares electronically without any restrictive
legend by crediting such aggregate number of Warrant Shares to which the Holder is entitled pursuant to such exercise to the
Holder’s or its designee’s balance account with DTC through its Deposit / Withdrawal At Custodian system (the
event described in the immediately foregoing clause (II) is hereinafter referred as a “Notice Failure” and
together with the event described in clause (I) above, an “Exercise Failure”), then, in addition to all
other remedies available to the Holder, the Holder, upon written notice to the Company, may void its Exercise Notice with
respect to, and retain or have returned, as the case may be, any portion of this Warrant that has not been exercised pursuant
to such Exercise Notice; provided that the voiding of an Exercise Notice shall not affect the Company’s obligations to
make any payments which have accrued prior to the date of such notice pursuant to this Section 1(c) or otherwise. In addition
to the foregoing, if on or prior to the Share Delivery Date either (I) if the Transfer Agent is not participating in the DTC
Fast Automated Securities Transfer Program, the Company shall fail to issue and deliver a certificate to the Holder and
register such shares of Common Stock on the Company’s share register or, if the Transfer Agent is participating in the
DTC Fast Automated Securities Transfer Program, credit the Holder’s balance account with DTC for the number of
shares of Common Stock to which the Holder is entitled upon the Holder’s exercise hereunder or pursuant to the
Company’s obligation pursuant to clause (ii) below or (II) a Notice Failure occurs, and if on or after such Trading Day
the Holder purchases (in an open market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale
by the Holder of shares of Common Stock issuable upon such exercise that the Holder anticipated receiving from the Company (a
“Buy-In”), then the Company shall, within three (3) Trading Days after the Holder’s request and in
the Holder’s discretion, either (i) pay cash to the Holder in an amount equal to the Holder’s total purchase
price (including brokerage commissions and other out-of-pocket expenses, if any) for the shares of Common Stock so purchased
(the “Buy-In Price”), at which point the Company’s obligation to deliver such certificate (and to
issue such shares of Common Stock) or credit such Holder’s balance account with DTC for such shares of Common Stock
shall terminate, or (ii) promptly honor its obligation to deliver to the Holder a certificate or certificates representing
such shares of Common Stock or credit such Holder’s balance account with DTC, as applicable, and pay cash to the Holder
in an amount equal to the excess (if any) of the Buy-In Price over the product of (A) such number of shares of Common Stock,
times (B) the Closing Bid Price on the date of exercise. Nothing shall limit the 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 (or to electronically deliver such shares of Common Stock) upon the exercise of this Warrant as required
pursuant to the terms hereof.

 

    	- 3 -

    	 

    

 

(d)        Cashless
Exercise. Notwithstanding anything contained herein to the contrary, if a registration statement covering the resale of the
Unavailable Warrant Shares is not available for the resale of such Unavailable Warrant Shares, the Holder may, in its sole discretion,
exercise this Warrant in whole or in part and, in lieu of making the cash payment otherwise contemplated to be made to the Company
upon such exercise in payment of the Aggregate Exercise Price, elect instead to receive upon such exercise the “Net Number”
of shares of Common Stock determined according to the following formula (a “Cashless Exercise”):

 

Net Number
= (A x B) - (A x C)

D

 

For purposes
of the foregoing formula:

 

A=
the total number of shares with respect to which this Warrant is then being exercised.

 

B=
the arithmetic average of the Closing Sale Prices of the Common Stock for the five (5) consecutive Trading Days ending on the date
immediately preceding the date of the Exercise Notice.

 

C=
the Exercise Price then in effect for the applicable Warrant Shares at the time of such exercise.

 

D=
the Closing Sale Price of the Common Stock on the date of the Exercise Notice.

 

For purposes of
Rule 144(d) promulgated under the 1933 Act, as in effect on the date hereof, the Company hereby acknowledges and agrees that
the Warrant Shares issued in a Cashless Exercise shall be deemed to have been acquired by the Holder, and the holding period
for the Warrant Shares shall be deemed to have commenced, on the date this Warrant was originally issued pursuant to the
Securities Purchase Agreement.

 

    	- 4 -

    	 

    

 

(e)        Disputes.
In the case of a dispute as to the determination of the Exercise Price or the arithmetic calculation of the Warrant Shares, the
Company shall promptly issue to the Holder the number of Warrant Shares that are not disputed and resolve such dispute in accordance
with Section 12.

 

(f)        Beneficial
Ownership. Notwithstanding anything to the contrary contained herein, the Company shall not effect the exercise of any
portion of this Warrant, and the Holder shall not have the right to exercise any portion of this Warrant, pursuant to the
terms and conditions of this Warrant and any such exercise shall be null and void and treated as if never made, to the extent
that after giving effect to such exercise, the Holder together with the other Attribution Parties collectively would
beneficially own in excess of 4.99% (the “Maximum Percentage”) of the number of shares of Common Stock
outstanding immediately after giving effect to such exercise. For purposes of the foregoing sentence, the aggregate number of
shares of Common Stock beneficially owned by the Holder and the other Attribution Parties shall include the number of shares
of Common Stock held by the Holder and all other Attribution Parties plus the number of shares of Common Stock issuable upon
exercise of this Warrant with respect to which the determination of such sentence is being made, but shall exclude the number
of shares of Common Stock which would be issuable upon (A) exercise of the remaining, unexercised portion of this Warrant
beneficially owned by the Holder or any of the other Attribution Parties and (B) exercise or conversion of the unexercised or
unconverted portion of any other securities of the Company (including, without limitation, any convertible notes or
convertible preferred stock or warrants, including the other SPA Warrants) beneficially owned by the Holder or any other
Attribution Party subject to a limitation on conversion or exercise analogous to the limitation contained in this Section
1(f). For purposes of this Section 1(f), beneficial ownership shall be calculated in accordance with Section 13(d) of the
Securities Exchange Act of 1934, as amended (the “1934 Act”). For purposes of determining the number of
outstanding shares of Common Stock the Holder may acquire upon the exercise of this Warrant without exceeding the Maximum
Percentage, the Holder may rely on the number of outstanding shares of Common Stock as reflected in (x) the
Company’s most recent Annual Report on Form 10-K, Quarterly Report on Form 10-Q, Current Report on Form 8-K or other
public filing with the Securities and Exchange Commission (the “SEC”), as the case may be, (y) a more
recent public announcement by the Company or (3) any other written notice by the Company or the Transfer Agent setting forth
the number of shares of Common Stock outstanding (the “Reported Outstanding Share Number”). If the
Company receives an Exercise Notice from the Holder at a time when the actual number of outstanding shares of Common Stock is
less than the Reported Outstanding Share Number, the Company shall (i) notify the Holder in writing of the number of shares
of Common Stock then outstanding and, to the extent that such Exercise Notice would otherwise cause the Holder’s
beneficial ownership, as determined pursuant to this Section 1(f), to exceed the Maximum Percentage, the Holder must notify
the Company of a reduced number of Warrant Shares to be purchased pursuant to such Exercise Notice (the number of shares by
which such purchase is reduced, the “Reduction Shares”) and (ii) as soon as reasonably practicable, the
Company shall return to the Holder any exercise price paid by the Holder for the Reduction Shares. For any reason at any
time, upon the written or oral request of the Holder, the Company shall within one (1) Trading Day confirm orally and in
writing or by electronic mail 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 Warrant, by the Holder and any other Attribution Party since the date as of which the Reported
Outstanding Share Number was reported. In the event that the issuance of shares of Common Stock to the Holder upon exercise
of this Warrant results in the Holder and the other Attribution Parties being deemed to beneficially own, in the
aggregate, more than the Maximum Percentage of the number of outstanding shares of Common Stock (as determined under Section
13(d) of the 1934 Act), the number of shares so issued by which the Holder’s and the other Attribution Parties’
aggregate beneficial ownership exceeds the Maximum Percentage (the “Excess Shares”) shall be deemed null
and void and shall be cancelled ab initio, and the Holder shall not have the power to vote or to transfer the Excess Shares.
As soon as reasonably practicable after the issuance of the Excess Shares has been deemed null and void, the Company shall
return to the Holder the exercise price paid by the Holder for the Excess Shares. Upon delivery of a written notice to the
Company, the Holder may from time to time increase (with such increase not effective until the sixty-first (61st)
day after delivery of such notice) or decrease the Maximum Percentage to any other percentage not in excess of 9.99% as
specified in such notice; provided that (i) any such increase in the Maximum Percentage will not be effective until the
sixty-first (61st) day after such notice is delivered to the Company and (ii) any such increase or decrease will
apply only to the Holder and the other Attribution Parties and not to any other holder of SPA Warrants that is not an
Attribution Party of the Holder. For purposes of clarity, the shares of Common Stock issuable pursuant to the terms of this
Warrant in excess of the Maximum Percentage shall not be deemed to be beneficially owned by the Holder for any purpose
including for purposes of Section 13(d) or Rule 16a-1(a)(1) of the 1934 Act. No prior inability to exercise this Warrant
pursuant to this paragraph shall have any effect on the applicability of the provisions of this paragraph with respect to any
subsequent determination of exercisability. The provisions of this paragraph shall be construed and implemented in a manner
otherwise than in strict conformity with the terms of this Section 1(f) to the extent necessary to correct this paragraph or
any portion of this paragraph which may be defective or inconsistent with the intended beneficial ownership limitation
contained in this Section 1(f) or to make changes or supplements necessary or desirable to properly give effect to such
limitation. The limitation contained in this paragraph may not be waived and shall apply to a successor holder of this
Warrant.

 

    	- 5 -

    	 

    

 

(g)        Insufficient
Authorized Shares. If at any time while this Warrant remains outstanding the Company does not have a sufficient number
of authorized and unreserved shares of Common Stock to satisfy its obligation to reserve for issuance upon exercise of this
Warrant at least a number of shares of Common Stock equal to the number of shares of Common Stock as shall from time to time
be necessary to effect the exercise of all of this Warrant then outstanding (the “Required Reserve
Amount” and the failure to have such sufficient number of authorized and unreserved shares of Common Stock, an
“Authorized Share Failure”), then the Company shall immediately take all action necessary to increase the
Company’s authorized shares of Common Stock to an amount sufficient to allow the Company to reserve the Required
Reserve Amount for this Warrant then outstanding. Without limiting the generality of the foregoing sentence, as soon as
practicable after the date of the occurrence of an Authorized Share Failure, but in no event later than sixty (60) days after
the occurrence of such Authorized Share Failure, the Company shall hold a meeting of its stockholders for the approval of an
increase in the number of authorized shares of Common Stock. In connection with such meeting, the Company shall provide each
stockholder with a proxy statement and shall use its best efforts to solicit its stockholders’ approval of such
increase in authorized shares of Common Stock and to cause its board of directors to recommend to the stockholders that they
approve such proposal. Notwithstanding the foregoing, if any such time of an Authorized Share Failure, the Company is able to
obtain the written consent of a majority of the shares of its issued and outstanding Common Stock to approve the increase in
the number of authorized shares of Common Stock, the Company may satisfy this obligation by obtaining such consent and
submitting for filing with the SEC an Information Statement on Schedule 14C. In the event that upon any exercise of this
Warrant, the Company does not have sufficient authorized shares to deliver in satisfaction of such exercise, then unless the
Holder elects to void such attempted exercise, the Holder may require the Company to pay to the Holder within three (3)
Trading Days of the applicable exercise, cash in an amount equal to the product of (i) the quotient determined by dividing
(x) the number of Warrant Shares that the Company is unable to deliver pursuant to this Section 1(g), by (y) the total number
of Warrant Shares issuable upon exercise of this Warrant (without regard to any limitations or restrictions on exercise of
this Warrant) and (ii) the Black Scholes Value; provided, that (x) references to “the day immediately following the
public announcement of the applicable Fundamental Transaction” in the definition of “Black Scholes Value”
shall instead refer to “the date the Holder exercises this Warrant and the Company cannot deliver the required number
of Warrant Shares because of an Authorized Share Failure” and (y) clause (iii) of the definition of “Black
Scholes Value” shall instead refer to “the underlying price per share used in such calculation shall be the
highest Weighted Average Price during the period beginning on the date of the applicable date of exercise and the date that
the Company makes the applicable cash payment.”

 

    	- 6 -

    	 

    

 

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

 

(a)        Voluntary
Adjustment By Company. The Company may at any time during the term of this Warrant, with the prior written consent of the Required
Holders, reduce the then current Exercise Price to any amount and for any period of time deemed appropriate by the Board of Directors
of the Company.

 

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

 

    	- 7 -

    	 

    

 

3.            RIGHTS
UPON DISTRIBUTION OF ASSETS. If the Company shall declare or make any dividend or other distribution of its assets (or rights
to acquire its assets) to any or all holders of shares of Common Stock, by way of return of capital or otherwise (including, without
limitation, any distribution of cash, stock or other securities, property, options, evidence of indebtedness or any other assets
by way of a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction)
(a “Distribution”), at any time after the issuance of this Warrant, then, in each such case, the Holder shall
be entitled to participate in such Distribution to the same extent that the Holder would have participated therein if the Holder
had held the number of shares of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations
or restrictions on exercise of this Warrant, including without limitation, the Maximum Percentage) immediately before the date
of which a record is taken for such Distribution, 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 participation in such Distribution (provided, however, that to the extent
that the Holder’s right to participate in any such Distribution would result in the Holder and the other Attribution Parties
exceeding the Maximum Percentage, then the Holder shall not be entitled to participate in such Distribution to such extent (and
shall not be entitled to beneficial ownership of such shares of Common Stock as a result of such Distribution (and beneficial ownership)
to such extent) and the portion of such Distribution shall be held in abeyance for the benefit of the Holder until such
time or times as its right thereto would not result in the Holder and the other Attribution Parties exceeding the Maximum Percentage,
at which time or times the Holder shall be granted such Distribution (and any Distributions declared or made on such initial Distribution
or on any subsequent Distribution held similarly in abeyance) to the same extent as if there had been no such limitation).

 

4.            PURCHASE
RIGHTS; FUNDAMENTAL TRANSACTIONS.

 

(a)        Purchase
Rights. In addition to any adjustments pursuant to Section 2 above, if at any time the Company grants, issues or sells
any Options, Convertible Securities or rights to purchase stock, warrants, securities or other property pro rata to the
record holders of any class of Common Stock (the “Purchase Rights”), then the Holder will be entitled to
acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could have
acquired if the Holder had held the number of shares of Common Stock acquirable upon complete exercise of this Warrant
(without regard to any limitations or restrictions on exercise of this Warrant, including without limitation, the Maximum
Percentage) 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, that to the extent that the Holder’s
right to participate in any such Purchase Right would result in the Holder and the other Attribution Parties exceeding the
Maximum Percentage, then the Holder shall not be entitled to participate in such Purchase Right to such extent (and shall not
be entitled to beneficial ownership of such shares of Common Stock as a result of such Purchase Right (and beneficial
ownership) to such extent) and such Purchase Right to such extent shall be held in abeyance for the benefit of the Holder until
such time or times as its right thereto would not result in the Holder and the other Attribution Parties exceeding the
Maximum Percentage, at which time or times the Holder shall be granted such right (and any Purchase Right granted, issued or
sold on such initial Purchase Right or on any subsequent Purchase Right held similarly in abeyance) to the same extent as if
there had been no such limitation).

 

    	- 8 -

    	 

    

 

(b)        Fundamental
Transactions. The Company shall not enter into or be party to a Fundamental Transaction unless the Successor
Entity assumes in writing all of the obligations of the Company under this Warrant and the other Transaction Documents in
accordance with the provisions of this Section 4(b) pursuant to written agreements in form and substance satisfactory to the
Required Holders and approved by the Required Holders prior to such Fundamental Transaction, including agreements , if so
requested by the Holder, to deliver to each holder of the SPA Warrants in exchange for such SPA Warrants a security of the
Successor Entity evidenced by a written instrument substantially similar in form and substance to this Warrant, including,
without limitation, an adjusted exercise price equal to the value for the shares of Common Stock reflected by the terms of
such Fundamental Transaction, and exercisable for a corresponding number of shares of capital stock equivalent to the shares
of Common Stock acquirable and receivable upon exercise of this Warrant (without regard to any limitations on the exercise of
this Warrant) prior to such Fundamental Transaction, and satisfactory to the Required Holders, and with an exercise price
which applies the exercise 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
adjustments to the number of shares of capital stock and such exercise price being for the purpose of protecting the economic
value of this Warrant immediately prior to the occurrence or consummation of such Fundamental Transaction). Any security
issuable or potentially issuable to the Holder pursuant to the terms of this Warrant on the consummation of a Fundamental
Transaction shall be registered and freely tradable by the Holder without any restriction or limitation or the requirement to
be subject to any holding period pursuant to any applicable securities laws. No later than (i) thirty (30) days prior to the
occurrence or consummation of any Fundamental Transaction or (ii) if later, the first Trading Day following the date the
Company first becomes aware of the occurrence or potential occurrence of a Fundamental Transaction, the Company shall deliver
written notice thereof via facsimile or electronic mail and overnight courier to the Holder. Upon the occurrence or
consummation of any Fundamental Transaction, and it shall be a required condition to the occurrence or consummation of any
Fundamental Transaction that, the Company and the Successor Entity or Successor Entities, jointly and severally,
shall succeed to, and the Company shall cause any Successor Entity or Successor Entities to jointly and severally succeed to,
and be added to the term “Company” under this Warrant (so that from and after the date of such Fundamental
Transaction, each and every provision of this Warrant referring to the “Company” shall refer instead to each of
the Company and the Successor Entity or Successor Entities, jointly and severally), and the Company and the Successor Entity
or Successor Entities, jointly and severally, may exercise every right and power of the Company prior thereto and shall
assume all of the obligations of the Company prior thereto under this Warrant with the same effect as if the Company and such
Successor Entity or Successor Entities, jointly and severally, had been named as the Company in this Warrant, and, solely at
the request of the Holder, if the Successor Entity and/or Successor Entities is a publicly traded corporation whose common
stock is quoted on or listed for trading on an Eligible Market, shall deliver (in addition to and without limiting any right
under this Warrant) to the Holder in exchange for this Warrant a security of the Successor Entity and/or Successor Entities
evidenced by a written instrument substantially similar in form and substance to this Warrant and exercisable for a
corresponding number of shares of capital stock of the Successor Entity and/or Successor Entities (the “Successor
Capital Stock”) equivalent to the shares of Common Stock acquirable and receivable upon exercise of this Warrant
(without regard to any limitations on the exercise of this Warrant) prior to such Fundamental Transaction (such corresponding
number of shares of Successor Capital Stock to be delivered to the Holder shall be equal to the quotient of (i) the aggregate
dollar value of all consideration (including cash consideration and any consideration other than cash (“Non-Cash
Consideration”), in such Fundamental Transaction, as such values are set forth in any definitive agreement for the
Fundamental Transaction that has been executed at the time of the first public announcement of the Fundamental Transaction
or, if no such value is determinable from such definitive agreement, as determined in accordance with Section 12 with the
term “Non-Cash Consideration” being substituted for the term “Exercise Price”) that the Holder would
have been entitled to receive upon the happening of such Fundamental Transaction or the record, eligibility or other
determination date for the event resulting in such Fundamental Transaction, had this Warrant been exercised immediately prior
to such Fundamental Transaction or the record, eligibility or other determination date for the event resulting in such
Fundamental Transaction (without regard to any limitations on the exercise of this Warrant) (the “Aggregate
Consideration”) divided by (ii) the per share Closing Sale Price of such Successor Capital Stock on the Trading Day
immediately prior to the consummation or occurrence of the Fundamental Transaction. Upon occurrence or consummation of the
Fundamental Transaction, and it shall be a required condition to the occurrence or consummation of such Fundamental
Transaction that, the Company and the Successor Entity or Successor Entities shall deliver to the Holder confirmation that
there shall be issued upon exercise of this Warrant at any time after the occurrence or consummation of the Fundamental
Transaction, as elected by the Holder solely at its option, shares of Common Stock, Successor Capital Stock or, in lieu of
the shares of Common Stock or Successor Capital Stock (or other securities, cash, assets or other property purchasable upon
the exercise of this Warrant prior to such Fundamental Transaction), such shares of stock, securities, cash, assets or any
other property whatsoever (including warrants or other purchase or subscription rights), which for purposes of clarification
may continue to be shares of Common Stock, if any, that the Holder would have been entitled to receive upon the happening of
such Fundamental Transaction or the record, eligibility or other determination date for the event resulting in such
Fundamental Transaction, had this Warrant been exercised immediately prior to such Fundamental Transaction or the record,
eligibility or other determination date for the event resulting in such Fundamental Transaction (without regard to any
limitations on the exercise of this Warrant), as adjusted in accordance with the provisions of this Warrant. In addition
to and not in substitution for any other rights hereunder, prior to the occurrence or consummation of any Fundamental
Transaction pursuant to which holders of shares of Common Stock are entitled to receive securities, cash, assets or other
property with respect to or in exchange for shares of Common Stock (a “Corporate Event”), the Company
shall make appropriate provision to insure that, and any applicable Successor Entity or Successor Entities shall ensure that,
and it shall be a required condition to the occurrence or consummation of such Corporate Event that, the Holder will
thereafter have the right to receive upon exercise of this Warrant at any time after the occurrence or consummation of the
Corporate Event, shares of Common Stock or Successor Capital Stock or, if so elected by the Holder, in lieu of the shares of
Common Stock (or other securities, cash, assets or other property) purchasable upon the exercise of this Warrant prior to
such Corporate Event (but not in lieu of such items still issuable under Sections 3 and 4(a), which shall continue to be
receivable on the Common Stock or on the such shares of stock, securities, cash, assets or any other property otherwise
receivable with respect to or in exchange for shares of Common Stock), such shares of stock, securities, cash, assets or any
other property whatsoever (including warrants or other purchase or subscription rights and any shares of Common Stock) which
the Holder would have been entitled to receive upon the occurrence or consummation of such Corporate Event or the record,
eligibility or other determination date for the event resulting in such Corporate Event, had this Warrant been exercised
immediately prior to such Corporate Event or the record, eligibility or other determination date for the event resulting in
such Corporate Event (without regard to any limitations on exercise of this Warrant). Provision made pursuant to the
preceding sentence shall be in a form and substance reasonably satisfactory to the Holder. The provisions of this
Section 4(b) shall apply similarly and equally to successive Fundamental Transactions and Corporate Events.

 

    	- 9 -

    	 

    

 

(c)        Notwithstanding
the foregoing, in the event of Fundamental Transaction, at the request of the Holder delivered before the ninetieth (90th)
day after the occurrence or consummation of such Fundamental Transaction, the Company (or the Successor Entity) shall purchase
this Warrant from the Holder by paying to the Holder, within five (5) Business Days after such request (or, if later, on the effective
date of the Fundamental Transaction), cash in an amount equal to the Black Scholes Value of the remaining unexercised portion of
this Warrant on the date of such Fundamental Transaction.

 

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

 

6.            WARRANT
HOLDER NOT DEEMED A STOCKHOLDER. Except as otherwise specifically provided herein, the Holder, solely in such
Person’s capacity as a holder of this Warrant, shall not be entitled to vote or receive dividends or be deemed the
holder of stock capital of the Company for any purpose, nor shall anything contained in this Warrant be construed to confer
upon the Holder, solely in such Person’s capacity as the Holder of this Warrant, any of the rights of a stockholder of
the Company or any right to vote, give or withhold consent to any corporate action (whether any reorganization, issue of
stock, reclassification of stock, consolidation, merger, conveyance or otherwise), receive notice of meetings, receive
dividends or subscription rights, or otherwise, prior to the issuance to the Holder of the Warrant Shares which such Person
is then entitled to receive upon the due exercise of this Warrant. In addition, nothing contained in this Warrant shall be
construed as imposing any liabilities on the Holder to purchase any securities (upon exercise of this Warrant or otherwise)
or as a stockholder of the Company, whether such liabilities are asserted by the Company or by creditors of the Company.
Notwithstanding this Section 6, the Company shall provide the Holder with copies of the same notices and other information
given to the stockholders of the Company generally, contemporaneously with the giving thereof to the stockholders.

 

    	- 10 -

    	 

    

 

7.            REISSUANCE
OF WARRANTS.

 

(a)        Transfer
of Warrant. If this Warrant is to be transferred, the Holder shall surrender this Warrant to the Company, whereupon the Company
will forthwith issue and deliver upon the order of the Holder a new Warrant (in accordance with Section 7(d)), registered as the
Holder may request, representing the right to purchase the number of Warrant Shares being transferred by the Holder and, if less
than the total number of Warrant Shares then underlying this Warrant is being transferred, a new Warrant (in accordance with Section
7(d)) to the Holder representing the right to purchase the number of Warrant Shares not being transferred.

 

(b)        Lost,
Stolen or Mutilated Warrant. Upon receipt by the Company of evidence reasonably satisfactory to the Company of the loss, theft,
destruction or mutilation of this Warrant, and, in the case of loss, theft or destruction, of any indemnification undertaking by
the Holder to the Company in customary form and, in the case of mutilation, upon surrender and cancellation of this Warrant, the
Company shall execute and deliver to the Holder a new Warrant (in accordance with Section 7(d)) representing the right to purchase
the Warrant Shares then underlying this Warrant.

 

(c)        Exchangeable
for Multiple Warrants. This Warrant is exchangeable, upon the surrender hereof by the Holder at the principal office of the
Company, for a new Warrant or Warrants (in accordance with Section 7(d)) representing in the aggregate the right to purchase the
number of Warrant Shares then underlying this Warrant, and each such new Warrant will represent the right to purchase such portion
of such Warrant Shares as is designated by the Holder at the time of such surrender; provided, however, that no SPA
Warrants for fractional Warrant Shares shall be given.

 

(d)        Issuance
of New Warrants. Whenever the Company is required to issue a new Warrant pursuant to the terms of this Warrant, such new Warrant
(i) shall be of like tenor with this Warrant, (ii) shall represent, as indicated on the face of such new Warrant, the right to
purchase the Warrant Shares then underlying this Warrant (or in the case of a new Warrant being issued pursuant to Section 7(a)
or Section 7(c), the Warrant Shares designated by the Holder which, when added to the number of shares of Common Stock underlying
the other new Warrants issued in connection with such issuance, does not exceed the number of Warrant Shares then underlying this
Warrant), (iii) shall have an issuance date, as indicated on the face of such new Warrant which is the same as the Issuance Date,
and (iv) shall have the same rights and conditions as this Warrant.

 

8.            NOTICES.
Whenever notice is required to be given under this Warrant, unless otherwise provided herein, such notice shall be given in
accordance with Section 9(f) of the Securities Purchase Agreement. The Company shall provide the Holder with prompt written
notice of all actions taken pursuant to this Warrant, including in reasonable detail a description of such action and the
reason therefor. Without limiting the generality of the foregoing, the Company will give written notice to the Holder (i)
immediately upon any adjustment of the Exercise Price, setting forth in reasonable detail, and certifying, the calculation of
such adjustment and (ii) at least fifteen (15) days prior to the date on which the Company closes its books or takes a record
(A) with respect to any dividend or distribution upon the shares of Common Stock, (B) with respect to any grants, issuances
or sales of any Options, Convertible Securities or rights to purchase stock, warrants, securities or other property to
holders of shares of Common Stock or (C) for determining rights to vote with respect to any Fundamental Transaction,
dissolution or liquidation; provided in each case that such information shall be made known to the public prior to or
in conjunction with such notice being provided to the Holder. It is expressly understood and agreed that the time of exercise
specified by the Holder in each Exercise Notice shall be definitive and may not be disputed or challenged by the Company.

 

    	- 11 -

    	 

    

 

9.            AMENDMENT
AND WAIVER. Except as otherwise provided herein, the provisions of this Warrant may be amended or waived and the Company may
take any action herein prohibited, or omit to perform any act herein required to be performed by it, only if the Company has obtained
the written consent of the Required Holders. Any change, amendment or waiver by the Company and the Required Holders shall be binding
on the Holder of this Warrant and all holders of the other SPA Warrants.

 

10.          GOVERNING
LAW; JURISDICTION; JURY TRIAL. This Warrant shall be governed by and construed and enforced in accordance with, and all
questions concerning the construction, validity, interpretation and performance of this Warrant shall be governed by, the
internal laws of the State of New York, without giving effect to any choice of law or conflict of law provision or rule
(whether of the State of New York or any other jurisdictions) that would cause the application of the laws of any
jurisdictions other than the State of New York. The Company hereby irrevocably submits to the exclusive jurisdiction of the
state and federal courts sitting in The City of New York, Borough of Manhattan, for the adjudication of any dispute hereunder
or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and
agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of
any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit,
action or proceeding is improper. The Company hereby irrevocably waives personal service of process and consents to process
being served in any such suit, action or proceeding by mailing a copy thereof to such party at the address set forth in
Section 9(f) of the Securities Purchase Agreement and agrees that such service shall constitute good and sufficient service
of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any
manner permitted by law. Nothing contained herein shall be deemed or operate to preclude the Holder from bringing suit or
taking other legal action against the Company in any other jurisdiction to collect on the Company’s obligations to the
Holder, to realize on any collateral or any other security for such obligations, or to enforce a judgment or other court
ruling in favor of the Holder. THE COMPANY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A
JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS WARRANT OR ANY
TRANSACTION CONTEMPLATED HEREBY.

 

    	- 12 -

    	 

    

 

11.          CONSTRUCTION;
HEADINGS. This Warrant shall be deemed to be jointly drafted by the Company and all the Buyers and shall not be construed against
any Person as the drafter hereof. The headings of this Warrant are for convenience of reference and shall not form part of, or
affect the interpretation of, this Warrant.

 

12.          DISPUTE
RESOLUTION. In the case of a dispute as to the determination of the Exercise Price or the arithmetic calculation of the Warrant
Shares, the Company shall submit the disputed determinations or arithmetic calculations via facsimile or electronic mail within
one (1) Business Day of receipt of the Exercise Notice giving rise to such dispute, as the case may be, to the Holder. If the Holder
and the Company are unable to agree upon such determination or calculation of the Exercise Price or the Warrant Shares within one
(1) Business Day of such disputed determination or arithmetic calculation being submitted to the Holder, then the Company shall,
within one (1) Business Day submit via facsimile (a) the disputed determination of the Exercise Price to an independent, reputable
investment bank selected by the Holder and approved by the Company, such approval not to be unreasonably withheld, conditioned
or delayed or (b) the disputed arithmetic calculation of the Warrant Shares to an independent, outside accountant, selected by
the Holder and approved by the Company, such approval not to be unreasonably withheld, conditioned or delayed. The Company shall
cause at its expense the investment bank or the accountant, as the case may be, to perform the determinations or calculations and
notify the Company and the Holder of the results no later than five (5) Business Days from the time it receives the disputed determinations
or calculations. Such investment bank’s or accountant’s determination or calculation, as the case may be, shall be
binding upon all parties absent demonstrable error.

 

13.          REMEDIES,
OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE RELIEF. The remedies provided in this Warrant shall be cumulative and in addition
to all other remedies available under this Warrant and 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 right of the Holder to pursue actual
damages for any failure by the Company to comply with the terms of this Warrant. The Company acknowledges that a breach by it of
its obligations hereunder 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 of this Warrant shall be entitled,
in addition to all other available remedies, to an injunction restraining any breach, without the necessity of showing economic
loss and without any bond or other security being required.

 

14.          TRANSFER.
This Warrant and the Warrant Shares may be offered for sale, sold, transferred, pledged or assigned without the consent of
the Company, except as may otherwise be required by Section 2(f) of the Securities Purchase Agreement.

 

15.          SEVERABILITY.
If any provision of this Warrant is prohibited by law or otherwise determined to be invalid or unenforceable by a court
of competent jurisdiction, the provision that would otherwise be prohibited, invalid or unenforceable shall be deemed amended
to apply to the broadest extent that it would be valid and enforceable, and the invalidity or unenforceability of such
provision shall not affect the validity of the remaining provisions of this Warrant so long as this Warrant as so modified
continues to express, without material change, the original intentions of the parties as to the subject matter hereof and the
prohibited nature, invalidity or unenforceability of the provision(s) in question does not substantially impair the
respective expectations or reciprocal obligations of the parties or the practical realization of the benefits that would
otherwise be conferred upon the parties. The parties will endeavor in good faith negotiations to replace the prohibited,
invalid or unenforceable provision(s) with a valid provision(s), the effect of which comes as close as possible to that of
the prohibited, invalid or unenforceable provision(s).

 

    	- 13 -

    	 

    

 

16.          DISCLOSURE.
Upon receipt or delivery by the Company of any notice in accordance with the terms of this Warrant, unless the Company has in good
faith determined that the matters relating to such notice do not constitute material, nonpublic information relating to the Company
or its Subsidiaries, the Company shall within one (1) Business Day after any such receipt or delivery publicly disclose such material,
nonpublic information on a Current Report on Form 8-K or otherwise. In the event that the Company believes that a notice contains
material, nonpublic information relating to the Company or its Subsidiaries, the Company so shall indicate to such Holder contemporaneously
with delivery of such notice, and in the absence of any such indication, the Holder shall be allowed to presume that all matters
relating to such notice do not constitute material, nonpublic information relating to the Company or its Subsidiaries.

 

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

 

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

 

(b)        “Affiliate”
means, with respect to any Person, any other Person that directly or indirectly controls, is controlled by, or is under common
control with, such Person, it being understood for purposes of this definition that “control” of a Person means the
power directly or indirectly either to vote 10% or more of the stock having ordinary voting power for the election of directors
of such Person or direct or cause the direction of the management and policies of such Person whether by contract or otherwise.

 

(a)        “Attribution
Parties” means, collectively, the following Persons and entities: (i) any investment vehicle, including, any funds, feeder
funds or managed accounts, currently, or from time to time after the Issuance Date, directly or indirectly managed or advised by
the Holder’s investment manager or any of its Affiliates or principals, (ii) any direct or indirect Affiliates of the Holder
or any of the foregoing, (iii) any Person acting or who could be deemed to be acting as a Group together with the Holder or any
of the foregoing and (iv) any other Persons whose beneficial ownership of the Company’s Common Stock would or could be aggregated
with the Holder’s and the other Attribution Parties for purposes of Section 13(d) of the 1934 Act. For clarity, the purpose
of the foregoing is to subject collectively the Holder and all other Attribution Parties to the Maximum Percentage.

 

(b)        “Black
Scholes Value” means the value of this Warrant based on the Black-Scholes Option Pricing Model obtained from the
“OV” function on Bloomberg determined as of the day immediately following the public announcement of the
applicable Fundamental Transaction, or, if the Fundamental Transaction is not publicly announced, the date the Fundamental
Transaction is consummated, for pricing purposes and reflecting (i) a risk-free interest rate corresponding to the U.S.
Treasury rate for a period equal to the remaining term of this Warrant as of such date of request, (ii) an expected
volatility equal to the greater of 100% and the 100 day volatility obtained from the HVT function on Bloomberg as of the day
immediately following the public announcement of the applicable Fundamental Transaction, or, if the Fundamental Transaction
is not publicly announced, the date the Fundamental Transaction is consummated, (iii) the greater of (x) Closing Sale Price
of the Common Stock as of the day the applicable Fundamental Transaction is publicly announced, or, if the Fundamental
Transaction is not publicly announced, the date immediately preceding the date the Fundamental Transaction is consummated and
(y) the underlying price per share used in such calculation shall be the sum of the price per share being offered in cash, if
any, plus the value of any non-cash consideration, if any, being offered in the Fundamental Transaction, (iv) a zero cost of
borrow and (v) a 360 day annualization factor.

 

    	- 14 -

    	 

    

 

(c)        “Bloomberg”
means Bloomberg Financial Markets.

 

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

 

(e)        “Closing
Bid Price” and “Closing Sale Price” means, for any security as of any date, the last closing bid price
and last closing trade price, respectively, for such security on the Principal Market, as reported by Bloomberg, or, if the Principal
Market begins to operate on an extended hours basis and does not designate the closing bid price or the closing trade price, as
the case may be, then the last bid price or the last trade price, respectively, of such security prior to 4:00:00 p.m., New York
time, as reported by Bloomberg, or, if the Principal Market is not the principal securities exchange or trading market for such
security, the last closing bid price or last trade price, respectively, of such security on the principal securities exchange or
trading market where such security is listed or traded as reported by Bloomberg, or if the foregoing do not apply, the last closing
bid price or last trade price, respectively, of such security in the over-the-counter market on the electronic bulletin board for
such security as reported by Bloomberg, or, if no closing bid price or last trade price, respectively, is reported for such security
by Bloomberg, the average of the bid prices, or the ask prices, respectively, of any market makers for such security as reported
in the OTC Link or “pink sheets” by OTC Markets Group Inc. (formerly Pink OTC Markets Inc.). If the Closing Bid Price
or the Closing Sale Price cannot be calculated for a security on a particular date on any of the foregoing bases, the Closing Bid
Price or the Closing Sale Price, as the case may be, of such security on such date shall be the fair market value as mutually determined
by the Company and the Holder. If the Company and the Holder are unable to agree upon the fair market value of such security, then
such dispute shall be resolved pursuant to Section 12. All such determinations to be appropriately adjusted for any stock dividend,
stock split, stock combination, reclassification or other similar transaction during the applicable calculation period.

 

    	- 15 -

    	 

    

 

(f)        “Common
Stock” means (i) the Company’s shares of Common Stock, par value $0.005 per share, and (ii) any stock capital into
which such Common Stock shall have been changed or any stock capital resulting from a reclassification of such Common Stock.

 

(g)        “Convertible
Securities” means any stock or securities (other than Options) directly or indirectly convertible into or exercisable
or exchangeable for shares of Common Stock.

 

(h)        “Designee”
means Empery Asset Management, LP.

 

(i)        “Eligible
Market” means the Principal Market, the NYSE MKT LLC, The NASDAQ Global Market, The NASDAQ Global Select Market, the
OTCQB or The New York Stock Exchange, Inc.

 

(j)        “Expiration
Date” means the date sixty (60) months after the Issuance Date or, if such date falls on a day other than a Business
Day or on which trading does not take place on the Principal Market (a “Holiday”), the next day that is not
a Holiday.

 

(k)        “Fundamental
Transaction” means (A) that the Company shall, directly or indirectly, including through Subsidiaries, Affiliates
or otherwise, in one or more related transactions, (i) consolidate or merge with or into (whether or not the Company
is the surviving corporation) another Subject Entity, or (ii) sell, assign, transfer, convey or otherwise dispose of all or
substantially all of the properties or assets of the Company or any of its “significant subsidiaries” (as defined
in Rule 1-02 of Regulation S-X) to one or more Subject Entities, or (iii) make, or allow one or more Subject Entities to
make, or allow the Company to be subject to or have its Common Stock be subject to or party to one or more Subject Entities
making, a purchase, tender or exchange offer that is accepted by the holders of at least either (x) 50% of the outstanding
shares of Common Stock, (y) 50% of the outstanding shares of Common Stock calculated as if any shares of Common Stock held by
all Subject Entities making or party to, or Affiliated with any Subject Entities making or party to, such purchase, tender or
exchange offer were not outstanding; or (z) such number of shares of Common Stock such that all Subject Entities making or
party to, or Affiliated with any Subject Entity making or party to, such purchase, tender or exchange offer, become
collectively the beneficial owners (as defined in Rule 13d-3 under the 1934 Act) of at least 50% of the outstanding shares of
Common Stock, or (iv) consummate a stock purchase agreement or other business combination (including, without limitation, a
reorganization, recapitalization, spin-off or scheme of arrangement) with one or more Subject Entities whereby such Subject
Entities, individually or in the aggregate, acquire, either (x) at least 50% of the outstanding shares of Common Stock, (y)
at least 50% of the outstanding shares of Common Stock calculated as if any shares of Common Stock held by all the Subject
Entities making or party to, or Affiliated with any Subject Entity making or party to, such stock purchase agreement or other
business combination were not outstanding; or (z) such number of shares of Common Stock such that the Subject Entities become
collectively the beneficial owners (as defined in Rule 13d-3 under the 1934 Act) of at least 50% of the outstanding shares of
Common Stock, or (v) reorganize, recapitalize or reclassify its Common Stock, (B) that the Company shall, directly or
indirectly, including through Subsidiaries, Affiliates or otherwise, in one or more related transactions, allow any Subject
Entity individually or the Subject Entities in the aggregate to be or become the “beneficial owner” (as defined
in Rule 13d-3 under the 1934 Act), directly or indirectly, whether through acquisition, purchase, assignment,
conveyance, tender, tender offer, exchange, reduction in outstanding shares of Common Stock, merger, consolidation, business
combination, reorganization, recapitalization, spin-off, scheme of arrangement, reorganization, recapitalization or
reclassification or otherwise in any manner whatsoever, of either (x) at least 50% of the aggregate ordinary voting power
represented by issued and outstanding Common Stock, (y) at least 50% of the aggregate ordinary voting power represented by
issued and outstanding Common Stock not held by all such Subject Entities as of the date of this Warrant calculated as if any
shares of Common Stock held by all such Subject Entities were not outstanding, or (z) a percentage of the aggregate ordinary
voting power represented by issued and outstanding shares of Common Stock or other equity securities of the Company
sufficient to allow such Subject Entities to effect a statutory short form merger or other transaction requiring other
stockholders of the Company to surrender their shares of Common Stock without approval of the stockholders of the Company or
(C) directly or indirectly, including through Subsidiaries, Affiliates or otherwise, in one or more related transactions, the
issuance of or the entering into any other instrument or transaction structured in a manner to circumvent, or that
circumvents, the intent of this definition in which case this definition shall be construed and implemented in a manner
otherwise than in strict conformity with the terms of this definition to the extent necessary to correct this definition or
any portion of this definition which may be defective or inconsistent with the intended treatment of such instrument or
transaction. Notwithstanding anything to the contrary contained in this Warrant, the transactions contemplated by the
June 2015 Binding Letter of Intent with LCB International, Inc. filed on June 18, 2015 with the SEC as Exhibit 99.1 to the
Current Report on Form 8-K, whether such transaction is effected in one or a series of related transactions, shall not be
considered to be a Fundamental Transaction.

 

    	- 16 -

    	 

    

 

(l)        “Group”
means a “group” as that term is used in Section 13(d) of the 1934 Act and as defined in Rule 13d-5 thereunder.

 

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

 

(n)        “Parent
Entity” of a Person means an entity that, directly or indirectly, controls the applicable Person, including such entity
whose common capital or equivalent equity security is quoted or listed on an Eligible Market (or, if so elected by the Required
Holders, any other market, exchange or quotation system), or, if there is more than one such Person or such entity, the Person
or such entity designated by the Required Holders or in the absence of such designation, such Person or entity with the largest
public market capitalization as of the date of consummation of the Fundamental Transaction.

 

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

 

(p)        “Principal
Market” means The NASDAQ Capital Market.

 

(q)        “Required
Holders” means the holders of the SPA Warrants representing at least a majority of the shares of Common Stock
underlying the SPA Warrants then outstanding and shall include the Designee so long as the Designee or any of its Affiliates
holds any SPA Warrants.

 

    	- 17 -

    	 

    

 

(r)        “Subject
Entity” means any Person, Persons or Group or any Affiliate or associate of any such Person, Persons or Group.

 

(s)        “Subsidiary”
has the meaning ascribed to such term in the Securities Purchase Agreement.

 

(t)        “Successor
Entity” means one or more Person or Persons (or, if so elected by the Required Holders, the Company or Parent Entity)
formed by, resulting from or surviving any Fundamental Transaction or one or more Person or Persons (or, if so elected by the Required
Holders, the Company or the Parent Entity) with which such Fundamental Transaction shall have been entered into.

 

(u)        “Trading
Day” means any day on which the Common Stock is traded on the Principal Market, or, if the Principal Market is not the
principal trading market for the Common Stock on such day, then on the principal securities exchange or securities market on which
the Common Stock is then traded; provided that in circumstances where “Trading Day” is used (i) in connection with
determining a Closing Bid Price, Closing Sale Price or any other pricing provisions, including, without limitation, the determination
of any pricing period and (ii) in any other context provided such day is the last day of a period of time expressed in Trading
Days, “Trading Day” shall not include any day on which the Common Stock trades on exchanges and markets for less than
4.5 hours or any day that the Common Stock is suspended from trading during the final hour of trading on such exchanges or markets
(or if such exchange or market does not designate in advance the closing time of trading on such exchange or market, then during
the hour ending at 4:00:00 p.m., New York time).

 

(v)        “Weighted
Average Price” means, for any security as of any date, the dollar volume-weighted average price for such security on
the Principal Market during the period beginning at 9:30:01 a.m., New York time (or such other time as the Principal Market publicly
announces is the official open of trading), and ending at 4:00:00 p.m., New York time (or such other time as the Principal Market
publicly announces is the official close of trading), as reported by Bloomberg through its “Volume at Price” function
or, if the foregoing does not apply, the dollar volume-weighted average price of such security in the over-the-counter market
on the electronic bulletin board for such security during the period beginning at 9:30:01 a.m., New York time (or such other time
as such market publicly announces is the official open of trading), and ending at 4:00:00 p.m., New York time (or such other time
as such market publicly announces is the official close of trading), 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 OTC Link or “pink sheets”
by OTC Markets Group Inc. (formerly Pink OTC Markets Inc.). If the Weighted Average Price cannot be calculated for a security
on a particular date on any of the foregoing bases, the Weighted Average Price of such security on such date shall be the fair
market value as mutually determined by the Company and the Holder. If the Company and the Holder are unable to agree upon the
fair market value of such security, then such dispute shall be resolved pursuant to Section 12 with the term “Weighted Average
Price” being substituted for the term “Exercise Price.” All such determinations shall be appropriately adjusted
for any stock dividend, stock split, stock combination, reclassification or other similar transaction during the applicable calculation
period.

 

    	- 18 -

    	 

    

 

[Signature Page Follows]

 

    	- 19 -

    	 

    

 

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

 

	 	AXION POWER INTERNATIONAL, INC.
	 	 	 	 
	 	By:	             	 
	 	Name:	 
	 	Title:	 

 

    	 

    	 

    

  

           EXHIBIT
A

 

EXERCISE NOTICE

 

TO BE EXECUTED BY THE REGISTERED HOLDER
TO EXERCISE THIS

WARRANT TO PURCHASE COMMON STOCK

 

AXION
POWER INTERNATIONAL, inc. 

 

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

 

           1.
Form of Exercise Price. The Holder intends that payment of the Exercise Price shall be made as:

 

           ____________a
“Cash Exercise” with respect to _________________ Warrant Shares; and/or

 

           ____________a
“Cashless Exercise” with respect to _______________ Warrant Shares.

 

           2.
Payment of Exercise Price. In the event that the holder has elected a Cash Exercise with respect to some or all of the Warrant
Shares to be issued pursuant hereto, the holder shall pay the Aggregate Exercise Price in the sum of $___________________ to the
Company in accordance with the terms of the Warrant.

 

           3.
Delivery of Warrant Shares. The Company shall deliver to the holder __________ Warrant Shares in accordance with the terms of the
Warrant.

 

Date: _______________ __, ______

  

	Name of Registered
Holder	 

  

	By:	 	 
	 	Name:	 
	 	Title:	 

 

    	 

    	 

    

                    

ACKNOWLEDGMENT 

 

                The
Company hereby acknowledges this Exercise Notice and hereby directs Continental Stock Transfer & Trust Company to issue the
above indicated number of shares of Common Stock in accordance with the Transfer Agent Instructions dated August [__], 2015 from
the Company and acknowledged and agreed to by Continental Stock Transfer & Trust Company.

	 	 	 	 	 
	 	 	AXION POWER INTERNATIONAL, INC.

	 	 	 	 	 
	 	 	By:	 	 
	 	 	Name:	 
	 	 	Title:

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00248-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00248-of-00352.parquet"}]]