Document:

EX-4.1

 Exhibit 4.1 

BOARDWALK PIPELINES, LP 

as Issuer 
 BOARDWALK
PIPELINE PARTNERS, LP 
 as Guarantor 

and 
 THE BANK OF NEW
YORK MELLON TRUST COMPANY, N.A. 
 as Trustee 

$350,000,000 
 4.95%
SENIOR NOTES DUE 2024 
 FOURTH SUPPLEMENTAL INDENTURE 

Dated as of November 26, 2014 

to 
 INDENTURE 

Dated as of August 21, 2009 

 TABLE OF CONTENTS 

 

							
	ARTICLE I ESTABLISHMENT OF NEW SERIES	  	 	1	  
			
	Section 1.01	 	 Establishment of New Series
	  	 	1	  
		
	ARTICLE II DEFINITIONS	  	 	2	  
			
	Section 2.01	 	 Definitions
	  	 	2	  
		
	ARTICLE III THE NOTES	  	 	3	  
			
	Section 3.01	 	 Form
	  	 	3	  
	Section 3.02	 	 Issuance of Additional Notes
	  	 	3	  
	Section 3.03	 	 Transfer of Notes
	  	 	3	  
	Section 3.04	 	 Global Securities Legend
	  	 	3	  
		
	ARTICLE IV REDEMPTION	  	 	4	  
			
	Section 4.01	 	 Optional Redemption
	  	 	4	  
	Section 4.02	 	 Mandatory Redemption
	  	 	4	  
		
	ARTICLE V ADDITIONAL COVENANTS	  	 	4	  
			
	Section 5.01	 	 Additional Covenants
	  	 	4	  
		
	ARTICLE VI ADDITIONAL EVENTS OF DEFAULT	  	 	9	  
			
	Section 6.01	 	 Additional Events of Default
	  	 	9	  
		
	ARTICLE VII ADDITIONAL AMENDMENTS TO THE ORIGINAL INDENTURE	  	 	9	  
			
	Section 7.01	 	 Amendment to Section 11.02(b)
	  	 	9	  
		
	ARTICLE VIII MISCELLANEOUS	  	 	9	  
			
	Section 8.01	 	 Integral Part
	  	 	9	  
	Section 8.02	 	 Adoption, Ratification and Confirmation
	  	 	9	  
	Section 8.03	 	 Counterparts
	  	 	10	  
	Section 8.04	 	 Governing Law
	  	 	10	  
	Section 8.05	 	 Trustee Makes No Representation
	  	 	10	  

 EXHIBIT A:           Form of Note 

  
 - i - 

 FOURTH SUPPLEMENTAL INDENTURE dated as of November 26, 2014 (this “Fourth
Supplemental Indenture”) among Boardwalk Pipelines, LP, a Delaware limited partnership (the “Partnership” or the “Issuer”), Boardwalk Pipeline Partners, LP, a Delaware limited partnership
(together with its successors, the “Guarantor”), and The Bank of New York Mellon Trust Company, N.A., a national banking association, as trustee (the “Trustee”). 

W I T N E S S E T H: 

WHEREAS, the Issuer and the Guarantor have heretofore entered into an Indenture, dated as of August 21, 2009 (the “Original
Indenture”), with The Bank of New York Mellon Trust Company, N.A., as trustee; 
 WHEREAS, pursuant to Section 9.01(k) of
the Original Indenture, the Issuer proposes to supplement the Original Indenture to establish the form and terms of a new series of Debt Securities pursuant to this Fourth Supplemental Indenture as permitted by Sections 2.01 and 2.03 of the Original
Indenture; 
 WHEREAS, the Original Indenture, as supplemented pursuant to this Fourth Supplemental Indenture, is herein called the
“Indenture”; 
 WHEREAS, the Issuer proposes that its obligations under such new series of Debt Securities and under
the Indenture to the extent applicable to such new series of Debt Securities be guaranteed by the Guarantor in accordance with the provisions of the Indenture (including without limitation Article XIV of the Original Indenture and the provisions of
this Fourth Supplemental Indenture); and 
 WHEREAS, all conditions necessary to authorize the execution and delivery of this Fourth
Supplemental Indenture and to make it a valid and binding obligation of the Issuer and the Guarantor have been done or performed; 
 NOW,
THEREFORE, in consideration of the agreements and obligations set forth herein and for other good and valuable consideration, the sufficiency of which is hereby acknowledged, the parties hereto hereby agree as follows: 

ARTICLE I 
 ESTABLISHMENT
OF NEW SERIES 
 Section 1.01 Establishment of New Series. There is hereby established a new series of Debt
Securities to be issued under the Indenture, designated as the Issuer’s 4.95% Senior Notes due 2024 (the “Notes”). 

(a) There are to be authenticated and delivered $350,000,000 principal amount of Notes on the Issue Date, and from time to time
thereafter there may be authenticated and delivered an unlimited principal amount of Additional Notes. 
 (b) The Notes shall
be issued initially in the form of one or more Global Securities in substantially the form attached as Exhibit A hereto. The Depositary with respect to the Notes shall be The Depository Trust Company. 

  
 - 1 - 

 (c) Each Note shall be dated the date of authentication thereof and shall bear
interest as provided in paragraph 1 of the form of Note attached as Exhibit A hereto. 
 (d) If and to the extent that
the provisions of the Original Indenture are duplicative of, or in contradiction with, the provisions of this Fourth Supplemental Indenture, the provisions of this Fourth Supplemental Indenture shall govern. 

(e) Article XIV of the Original Indenture (as amended and supplemented) shall apply to the Notes, and the Notes are hereby
designated to be entitled to the benefits of the Guarantee of the Guarantor. For the purposes of this Fourth Supplemental Indenture and the Notes (including, without limitation, the provisions of the Original Indenture to the extent applicable
thereto), the term “Guarantor” shall mean Boardwalk Pipeline Partners, LP, a Delaware limited partnership, and its successors. 

ARTICLE II 
 DEFINITIONS

 Section 2.01 Definitions. All capitalized terms used herein and not otherwise defined below shall have the
meanings ascribed thereto in the Original Indenture. The following are additional definitions used in this Fourth Supplemental Indenture: 

“Additional Notes” has the meaning assigned to such term in Section 3.02 hereof. 

“Attributable Debt” means, with respect to any sale and lease-back transaction as of any particular time, the present
value discounted at a rate of interest implicit in the terms of the lease of the obligations of the lessee under such lease for net rental payments during the remaining term of the lease (including any period for which such lease has been extended
or may, at the option of the lessee, be extended). 
 “Consolidated Funded Indebtedness” means the aggregate of all
Outstanding Funded Indebtedness of the Issuer and its consolidated Subsidiaries, determined on a consolidated basis in accordance with generally accepted accounting principles. 

“Consolidated Net Tangible Assets” means the total assets appearing on a consolidated balance sheet of a Person and
its consolidated Subsidiaries less, in general: (1) intangible assets; (2) current and accrued liabilities (other than Consolidated Funded Indebtedness and capitalized rentals or leases), deferred credits, deferred gains and deferred
income; and (3) reserves. 
 “Funded Indebtedness” means any Indebtedness that matures more than one year after
the date as of which Funded Indebtedness is being determined less any such Indebtedness as will be retired through or by means of any deposit or payment required to be made within one year from such date under any prepayment provision, sinking fund,
purchase fund, or otherwise. 
 “Guarantor” has the meaning assigned to such term in the preamble hereto. 

“Indebtedness” means indebtedness that is for money borrowed from others. 

“Indenture” has the meaning assigned to such term in the recitals hereto. 

  
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 “Issue Date” means November 26, 2014. 

“Issuer” has the meaning assigned to such term in the preamble hereto. 

“Notes” has the meaning assigned to such term in Section 1.01 hereof. 

“Original Indenture” has the meaning assigned to such term in the recitals hereto. 

“Principal Property” means any natural gas pipeline, gathering or storage property or facility or natural gas
processing plant located in the United States, except any such property that in the opinion of the Board of Directors is not of material importance to the total business conducted by the Issuer and its consolidated Subsidiaries; provided,
however, that “Principal Property” shall not include production and proceeds from production from gas processing plants or oil or natural gas or petroleum products in any pipeline or storage field. 

“Trustee” has the meaning assigned to such term in the preamble hereto. 

ARTICLE III 
 THE NOTES

 Section 3.01 Form. The Notes shall be issued in the form of one or more Global Securities, and the Notes
(including the notation of guarantee) and the Trustee’s certificate of authentication shall be substantially in the form of Exhibit A hereto, the terms of which are incorporated in and made a part of this Fourth Supplemental Indenture,
and the Issuer, the Guarantor and the Trustee, by their execution and delivery of this Fourth Supplemental Indenture, expressly agree to such terms and provisions and to be bound thereby. 

Section 3.02 Issuance of Additional Notes. The Issuer may, from time to time, issue an unlimited amount of additional Notes
(“Additional Notes”) under the Indenture, which shall be issued in the same form as the Notes issued on the Issue Date and which shall have identical terms as the Notes issued on the Issue Date other than with respect to the
issue date, issue price and first payment of interest. The Notes issued on the Issue Date shall be limited in aggregate principal amount to $350,000,000. The Notes issued on the Issue Date and any Additional Notes subsequently issued shall be
treated as a single series for purposes of notices, consents, waivers, amendments and any other actions permitted under the Indenture and for purposes of interest accrual and redemptions. 

Section 3.03 Transfer of Notes. When Notes are presented to the Registrar with the request to register the transfer of such
Notes or exchange such Notes for an equal principal amount of Notes of other authorized denominations, the Registrar shall register the transfer or make the exchange in accordance with Article II of the Original Indenture. 

Section 3.04 Global Securities Legend. Each security certificate evidencing the Global Securities shall bear a legend
substantially in the form set forth in Section 2.15(a) of the Original Indenture. 

  
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 ARTICLE IV 

REDEMPTION 

Section 4.01 Optional Redemption.  

(a) At its option, the Issuer at any time prior to September 15, 2024, may choose to redeem all or any portion of the
Notes, at once or from time to time, at a redemption price equal to the greater of (i) 100% of the principal amount of such Notes and (ii) the sum of the present values of the remaining scheduled payments of principal and interest thereon
discounted to the redemption date on a semiannual basis (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Rate (as defined in paragraph 5 of the form of Note attached as Exhibit A), plus 45 basis points, plus, in
either case accrued and unpaid interest, if any, to the Redemption Date (subject to the right of Holders on the relevant record date to receive interest due on the relevant interest payment date). 

(b) At its option, the Issuer at any time on or after September 15, 2024, may choose to redeem all or any portion of the
Notes, at once or from time to time, at a redemption price equal to 100% of the principal amount of such Notes, plus accrued and unpaid interest, if any, to the Redemption Date (subject to the right of Holders on the relevant record date to receive
interest due on the relevant interest payment date). 
 (c) Any redemption pursuant to this Section 4.01 shall be
made pursuant to the provisions of Sections 3.01 through 3.03 of the Original Indenture. The actual redemption price, calculated as provided in this Section 4.01 and paragraph 5 of the form of Note attached as Exhibit A hereto, shall be
certified in writing to the Trustee by the Issuer no later than two Business Days prior to each Redemption Date. 
 Section 4.02
Mandatory Redemption. The Issuer shall not be required to make mandatory redemption or sinking fund payments with respect to the Notes and shall have no obligation to repurchase any Notes at the option of the Holders. 

ARTICLE V 
 ADDITIONAL
COVENANTS 
 Section 5.01 Additional Covenants. Article IV of the Original Indenture is hereby supplemented, but only
in relation to the Notes, by the addition of the following new Sections at the end of Article IV: 
 “Section
4.09. Limitations upon Liens. After the date hereof and so long as any Notes are Outstanding, the Issuer will not, and will not permit any Subsidiary of the Issuer to, issue, assume or guarantee any Indebtedness secured by a mortgage, pledge,
lien, security interest or encumbrance (any mortgage, pledge, lien, security interest or encumbrance being hereinafter in this Article IV referred to as a “mortgage” or “mortgages” or as a “lien” or “liens”)
of, or upon, any property of the Issuer or of any Subsidiary of the Issuer, without effectively providing that the Notes shall be equally and ratably secured with such Indebtedness; provided, however, that the foregoing restriction shall not
apply to: 

  
 - 4 - 

 (a) any purchase money mortgage created by the Issuer or a Subsidiary of the
Issuer to secure all or part of the purchase price of any property (or to secure a loan made to enable the Issuer or a Subsidiary of the Issuer to acquire the property described in such mortgage), provided that the principal amount of the
Indebtedness secured by any such mortgage, together with all other Indebtedness secured by a mortgage on such property, shall not exceed the purchase price of the property acquired; 

(b) any mortgage existing on any property at the time of the acquisition thereof by the Issuer or a Subsidiary of the Issuer
whether or not assumed by the Issuer or a Subsidiary of the Issuer, and any mortgage on any property acquired or constructed by the Issuer or a Subsidiary of the Issuer and created not later than 12 months after (i) completion of such
acquisition or construction or (ii) commencement of full operation of such property, whichever is later; provided, however, that, if assumed or created by the Issuer or a Subsidiary of the Issuer, the principal amount of the Indebtedness
secured by such mortgage, together with all other Indebtedness secured by a mortgage on such property, shall not exceed the purchase price of the property acquired and/or the cost of the property constructed; 

(c) any mortgage created or assumed by the Issuer or a Subsidiary of the Issuer on any contract for the sale of any product or
service or any rights thereunder or any proceeds therefrom, including accounts and other receivables, related to the operation or use of any property acquired or constructed by the Issuer or a Subsidiary of the Issuer and created not later than 12
months after (i) completion of such acquisition or construction or (ii) commencement of full operation of such property, whichever is later; 

(d) any mortgage existing on any property of a Subsidiary of the Issuer at the time it becomes a Subsidiary of the Issuer and
any mortgage on property existing at the time of acquisition thereof; 
 (e) any refunding or extension of maturity, in whole
or in part, of any mortgage created or assumed in accordance with the provisions of subdivision (a), (b), (c) or (d) above or (o), (p), or (y) below, provided that the principal amount of the Indebtedness secured by such
refunding mortgage or extended mortgage shall not exceed the principal amount of the Indebtedness secured by the mortgage to be refunded or extended outstanding at the time of such refunding or extension and that such refunding mortgage or extended
mortgage shall be limited in lien to the same property that secured the mortgage so refunded or extended; 
 (f) any mortgage
created or assumed by the Issuer or a Subsidiary of the Issuer to secure loans to the Issuer or a Subsidiary of the Issuer maturing within 12 months of the date of creation thereof and not renewable or extendable by the terms thereof at the option
of the obligor beyond such 12 months, and made in the ordinary course of business; 
 (g) mechanics’ or
materialmen’s liens or any lien or charge arising by reason of pledges or deposits to secure payment of workmen’s compensation or other insurance, good faith deposits in connection with tenders or leases of real estate, bids or contracts
(other than contracts for the payment of money), deposits to secure public or statutory obligations, deposits to secure or in lieu of surety, stay or appeal bonds and deposits as security for the payment of taxes or assessments or other similar
charges; 

  
 - 5 - 

 (h) any mortgage arising by reason of deposits with or the giving of any form of
security to any governmental agency or any body created or approved by law or governmental regulation for any purpose at any time as required by law or governmental regulation as a condition to the transaction of any business or the exercise of any
privilege or license, or to enable the Issuer or a Subsidiary of the Issuer to maintain self-insurance or to participate in any fund for liability on any insurance risks or in connection with workmen’s compensation, unemployment insurance, old
age pensions or other social security or to share in the privileges or benefits required for companies participating in such arrangements; 

(i) mortgages upon rights-of-way; 

(j) undetermined mortgages and charges incidental to construction or maintenance; 

(k) the right reserved to, or vested in, any municipality or governmental or other public authority or railroad by the terms of
any right, power, franchise, grant, license, permit or by any provision of law, to terminate or to require annual or other periodic payments as a condition to the continuance of such right, power, franchise, grant, license or permit; 

(l) the lien of taxes and assessments which are not at the time delinquent; 

(m) the lien of specified taxes and assessments which are delinquent but the validity of which is being contested in good faith
at the time by the Issuer or a Subsidiary of the Issuer; 
 (n) the lien reserved in leases for rent and for compliance with
the terms of the lease in the case of leasehold estates; 
 (o) defects and irregularities in the titles to any property
(including rights-of-way and easements) which are not material to the business of the Issuer and its Subsidiaries considered as a whole; 

(p) any mortgages securing Indebtedness neither assumed nor guaranteed by the Issuer or a Subsidiary of the Issuer nor on which
the Issuer or such Subsidiary customarily pays interest, existing upon real estate or rights in or relating to real estate (including rights-of-way and easements) acquired by the Issuer or a Subsidiary of the Issuer, which mortgages do not
materially impair the use of such property for the purposes for which it is held by the Issuer or such Subsidiary; 

  
 - 6 - 

 (q) easements, exceptions or reservations in any property of the Issuer or a
Subsidiary of the Issuer granted or reserved for the purpose of pipelines, roads, telecommunication equipment and cable, streets, alleys, highways, railroad purposes, the removal of oil, gas, coal or other minerals or timber, and other like
purposes, or for the joint or common use of real property, facilities and equipment, which do not materially impair the use of such property for the purposes for which it is held by the Issuer or such Subsidiary; 

(r) rights reserved to or vested in any municipality or public authority to control or regulate any property of the Issuer or a
Subsidiary of the Issuer, or to use such property in any manner which does not materially impair the use of such property for the purposes for which it is held by the Issuer or such Subsidiary; 

(s) any obligations or duties, affecting the property of the Issuer or a Subsidiary of the Issuer, to any municipality or
public authority with respect to any franchise, grant, license or permit; 
 (t) the liens of any judgments in an aggregate
amount not in excess of $2,000,000 or the lien of any judgment the execution of which has been stayed or which has been appealed and secured, if necessary, by the filing of an appeal bond; 

(u) zoning laws and ordinances; 

(v) any mortgage existing on any office equipment, data processing equipment (including computer and computer peripheral
equipment) or transportation equipment (including motor vehicles, aircraft and marine vessels); 
 (w) leases now or
hereafter existing and any renewals or extensions thereof; 
 (x) any lien on inventory and receivables incurred in the
ordinary course of business to secure Indebtedness incurred for working capital purposes including liens incurred in connection with a sale of receivables; and 

(y) any mortgage not permitted by clauses (a) through (x) above if at the time of, and after giving effect to, the
creation or assumption of any such mortgage, the aggregate amount of all mortgages not permitted by clauses (a) through (x) above, together with the total consolidated Attributable Debt in respect of Sale and Lease-Back Transactions
permitted by Section 4.10(a) hereof, does not exceed 10% of Consolidated Net Tangible Assets of the Issuer. 
 In the
event that the Issuer or a Subsidiary of the Issuer shall hereafter secure the Notes equally and ratably with any other obligation or Indebtedness pursuant to the provision of this Section 4.09, the Trustee is hereby authorized to enter into an
indenture supplemental hereto and to take such action, if any, as it may deem advisable to enable it to enforce effectively the rights of the Holders of the Notes so secured, equally and ratably with such other obligation or Indebtedness. 

The Trustee, at its request, shall be provided with an Opinion of Counsel as conclusive evidence that any such supplemental
indenture or steps taken to secure the Notes equally and ratably comply with the provisions of this Section 4.09. 

  
 - 7 - 

 Section 4.10 Limitations on Sale and Lease-Back Transactions. The
Issuer will not, and will not permit any of its Subsidiaries to, enter into any arrangement with any Person providing for the lease by the Issuer or a Subsidiary of the Issuer of any Principal Property, acquired or placed into service more than 180
days prior to such arrangement (except for leases of three years or less), whereby such property has been or is to be sold or transferred by the Issuer or any Subsidiary of the Issuer to such Person (herein referred to as a “Sale and Lease-Back
Transaction”), unless: 
 (a) the Issuer or such Subsidiary would, at the time of entering into a Sale and Lease-Back
Transaction, be entitled to incur Indebtedness secured by a mortgage on such Principal Property to be leased in an amount at least equal to the Attributable Debt in respect of such transaction without equally and ratably securing the Notes pursuant
to Section 4.09 hereof; or 
 (b) the Issuer shall covenant that it will apply an amount equal to the net proceeds from
the sale of the Principal Property so leased to the retirement (other than any mandatory retirement) of its Funded Indebtedness within 90 days of the effective date of any such Sale and Lease-Back Transaction, provided that the amount to be
applied to the retirement of Funded Indebtedness of the Issuer shall be reduced by (i) the principal amount of any Notes delivered by the Issuer to the Trustee within 90 days after such Sale and Lease-Back Transaction for retirement and
cancellation, and (ii) the principal amount of Funded Indebtedness, other than Notes, voluntarily retired by the Issuer within 90 days following such Sale and Lease-Back Transaction, and provided, further, that the covenant contained in
this Section 4.10 shall not apply to, and there shall be excluded from Attributable Debt in any computation under this Section 4.10, Attributable Debt with respect to any Sale and Lease-Back Transaction if: 

(A) such Sale and Lease-Back Transaction is entered into in connection with transactions which are part of an industrial
development or pollution control financing, or 
 (B) the only parties involved in such Sale and Lease-Back Transaction are
the Issuer and any Subsidiary or Subsidiaries of the Issuer. 
 Notwithstanding these restrictions on Sale and Lease-Back
Transactions, the Issuer and its Subsidiaries may enter into, create, assume and suffer to exist Sale and Lease-Back Transactions, not otherwise permitted hereby, if at the time of, and after giving effect to, such Sale and Lease-Back Transactions,
the total consolidated Attributable Debt of the Issuer and its Subsidiaries in respect of such Sale and Lease-Back Transactions, together with mortgages incurred pursuant to Section 4.09(y) hereof, does not exceed 10% of Consolidated Net
Tangible Assets of the Issuer.” 

  
 - 8 - 

 ARTICLE VI 

ADDITIONAL EVENTS OF DEFAULT 

Section 6.01 Additional Events of Default. Only in relation to the Notes, pursuant to Sections 2.03(p) and 6.01(h) of the
Original Indenture, the following shall be an “Event of Default” with respect to the Notes: 
 (a) Either
(i) default by the Issuer, the Guarantor or any Subsidiary of the Issuer in the payment at the Stated Maturity, after the expiration of any applicable grace period, of principal of, or premium, if any, or interest on, any Indebtedness then
Outstanding having a principal amount in excess of $50.0 million or (ii) the acceleration of Indebtedness of the Issuer, any Guarantor or any Subsidiary of the Issuer having a principal amount in excess of $50.0 million by the holders thereof
because of a default so that such Indebtedness becomes due and payable prior to its Stated Maturity. 
 ARTICLE VII 

ADDITIONAL AMENDMENTS TO THE ORIGINAL INDENTURE 

Section 7.01 Amendment to Section 11.02(b). Only in relation to the Notes, the first paragraph of Section 11.02(b) of
the Original Indenture is hereby amended and restated in its entirety to read as follows: 
 “(b) Subject to Sections
11.02(c), 11.03 and 11.07, the Partnership at any time may terminate, with respect to Debt Securities of a particular series, all its obligations under the Debt Securities of such series and this Indenture with respect to the Debt Securities of such
series (“legal defeasance option”) or the operation of (i) Article X; (ii) any covenant made applicable to such Debt Securities pursuant to Section 2.03; (iii) Sections 6.01(d), (g) and (h) (including, without
limitation, all Events of Default added pursuant to Article VI of the Fourth Supplemental Indenture); and (iv) as they relate to the Guarantors only, Sections 6.01(e) and (f) (“covenant defeasance option”). If the Partnership
exercises either its legal defeasance option or its covenant defeasance option with respect to Debt Securities of a particular series that are entitled to the benefit of the Guarantee, the Guarantee will terminate with respect to that series of Debt
Securities. The Partnership may exercise its legal defeasance option notwithstanding its prior exercise of its covenant defeasance option.” 

ARTICLE VIII 

MISCELLANEOUS 

Section 8.01 Integral Part. This Fourth Supplemental Indenture constitutes an integral part of the Indenture. 

Section 8.02 Adoption, Ratification and Confirmation. The Original Indenture, as supplemented and amended by this Fourth
Supplemental Indenture, is in all respects hereby adopted, ratified and confirmed. 

  
 - 9 - 

 Section 8.03 Counterparts. This Fourth Supplemental Indenture may be executed
in any number of counterparts, each of which when so executed shall be deemed an original; and all such counterparts shall together constitute but one and the same instrument. 

Section 8.04 Governing Law. THIS FOURTH SUPPLEMENTAL INDENTURE AND THE NOTES SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. 
 Section 8.05 Trustee Makes No Representation. The Trustee makes no
representation as to the validity or sufficiency of this Fourth Supplemental Indenture. 
 [Signatures on following page] 

  
 - 10 - 

 IN WITNESS WHEREOF, the parties hereto have caused this Fourth Supplemental Indenture to be duly
executed and delivered, all as of the date first written above. 
  

			
	ISSUER:
	
	BOARDWALK PIPELINES, LP
		
	By:	 	Boardwalk Operating GP, LLC, its general partner
		
	By:	 	Boardwalk Pipeline Partners, LP, its sole member
		
	By:	 	Boardwalk GP, LP, its general partner
		
	By:	 	Boardwalk GP, LLC, its general partner
		
	By:	 	 /s/ Jamie L. Buskill

		 	Jamie L. Buskill
		 	Senior Vice President, Chief Financial and Administrative Officer and Treasurer
	
	GUARANTOR:
	
	BOARDWALK PIPELINE PARTNERS, LP
		
	By:	 	Boardwalk GP, LP, its general partner
		
	By:	 	Boardwalk GP, LLC, its general partner
		
	By:	 	 /s/ Jamie L. Buskill

		 	Jamie L. Buskill
		 	Senior Vice President, Chief Financial and Administrative Officer and Treasurer

 Signature Page to Fourth Supplemental Indenture 

 
			
	 TRUSTEE:

	 THE BANK OF NEW YORK MELLON

TRUST COMPANY, N.A., as Trustee

		
	 By:
	 	 /s/ Lawrence M. Kusch

	 Name:
	 	 Lawrence M. Kusch

	 Title:
	 	 Vice President

 Signature Page to Fourth Supplemental Indenture 

 EXHIBIT A 

(Form of Face of Note) 
 No. 

CUSIP 096630 AD0 
 ISIN
US096630AD01 
 $350,000,000 

BOARDWALK PIPELINES, LP 
 4.95%
Senior Note due 2024 
 Boardwalk Pipelines, LP, a Delaware limited partnership, promises to pay to
                    , or registered assigns, the principal sum
of                    Dollars
($                     ) [or such greater or lesser amount as may be endorsed on the Schedule attached hereto]1 on December 15, 2024. 
  

							
	 Interest Payment Dates:
	  	June 15 and December 15	  		  	
				
	 Record Dates:
	  	June 1 and December 1	  		  	

  

			
	BOARDWALK PIPELINES, LP
		
	By:	 	Boardwalk Operating GP, LLC, its general partner
		
	By:	 	Boardwalk Pipeline Partners, LP, its sole member
		
	By:	 	Boardwalk GP, LP, its general partner
		
	By:	 	Boardwalk GP, LLC, its general partner
		
	By:	 	  

		 	Jamie L. Buskill
		 	Senior Vice President, Chief Financial and Administrative Officer and Treasurer

 TRUSTEE’S CERTIFICATE OF AUTHENTICATION 

This is one of the Debt Securities of the series designated 4.95% Senior Notes referred to in the within-mentioned Indenture. 

THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., 
 as Trustee

  

	
	By:                                     
                                         
           
	Authorized Signatory                    
	
	Dated:                                     
                                         
     

  

	1 	To be included only if the Note is issued in global form. 

  

 (Form of Back of Note) 

4.95% Senior Note due 2024 

[UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION
(“DTC”), NEW YORK, NEW YORK, TO THE PARTNERSHIP OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY
AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN. 
 TRANSFERS OF THIS GLOBAL SECURITY SHALL
BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS
SET FORTH IN THE INDENTURE REFERRED TO HEREIN.]2 
 Capitalized terms used herein shall
have the meanings assigned to them in the Indenture referred to below unless otherwise indicated. 
 1. Interest. Boardwalk
Pipelines, LP, a Delaware limited partnership (the “Partnership” or the “Issuer”), promises to pay interest on the principal amount of this Note at 4.95% per annum until maturity. The Issuer shall
pay interest semi-annually on June 15 and December 15 of each such year, or if any such day is not a Business Day, on the next succeeding Business Day (each an “Interest Payment Date”). Interest on the Notes shall
accrue from the most recent date to which interest has been paid or, if no interest has been paid, from November 26, 2014; provided that if there is no existing Default in the payment of interest, and if this Note is authenticated
between a record date referred to on the face hereof and the next succeeding Interest Payment Date, interest shall accrue from such next succeeding Interest Payment Date; provided, further, that the first Interest Payment Date shall be
June 15, 2015. The Issuer shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue principal and premium, if any, from time to time on demand at the same rate, and it shall pay interest
(including post-petition interest in any proceeding under any Bankruptcy Law) on overdue installments of interest (without regard to any applicable grace periods) from time to time on demand at the same rate to the extent lawful. Interest shall be
computed on the basis of a 360-day year of twelve 30-day months. 
  

	2 	To be included only if the Note is issued in global form. 

  
 Exhibit A-2 

 2. Method of Payment. The Issuer shall pay interest on the Notes (except Defaulted
Interest) to the Persons who are registered Holders of Notes at the close of business on the June 1 or December 1 next preceding the Interest Payment Date, even if such Notes are canceled after such record date and on or before such
Interest Payment Date, except as provided in Section 2.17 of the Original Indenture with respect to Defaulted Interest, and the Issuer shall pay principal (and premium, if any) of the Notes upon surrender thereof to the Trustee or a paying
agent on or after the Stated Maturity thereof. The Notes shall be payable as to principal, premium, if any, and interest at the office or agency of the Trustee maintained for such purpose (which initially is 2 North LaSalle Street, Suite 1020,
Chicago, Illinois 60602), or, at the option of the Issuer, payment of interest may be made by check mailed to the Holders at their addresses set forth in the Debt Security Register or by wire transfer to accounts designated by the Holders;
provided that payment by wire transfer of immediately available funds shall be required with respect to principal of, and interest and premium, if any, on each Global Security. Such payment shall be in such coin or currency of the United
States of America as at the time of payment is legal tender for payment of public and private debts. 
 3. Paying Agent and
Registrar. Initially, The Bank of New York Mellon Trust Company, N.A., the Trustee under the Indenture, shall act as paying agent and Registrar. The Issuer may change any paying agent or Registrar without notice to any Holder. The Partnership
may act in any such capacity. 
 4. Indenture. The Issuer issued the Notes under an Indenture dated as of August 21, 2009 (the
“Original Indenture”), as amended and supplemented by the Fourth Supplemental Indenture, dated as of November 26, 2014 (the “Fourth Supplemental Indenture,” and, together with the Original
Indenture the “Indenture”), each between the Issuer, Boardwalk Pipeline Partners, LP, as guarantor (together with its successors, the “Guarantor”), and the Trustee. The terms of the Notes include those
stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939, as amended (15 U.S. Code §§ 77aaa-77bbbb). The Notes are subject to all such terms, and Holders are referred to the Indenture and
such Act for a statement of such terms. To the extent any provision of this Note conflicts with the express provisions of the Indenture, the provisions of the Indenture shall govern and be controlling. The Notes are the obligation of the Issuer and
the Guarantor, initially in aggregate principal amount of $350 million. The Issuer may issue an unlimited aggregate principal amount of Additional Notes under the Indenture. Any such Additional Notes that are actually issued shall be treated as
issued and outstanding Notes (and as the same series (with identical terms other than with respect to the issue date, issue price and first payment of interest) as the initial Notes for the purposes indicated in Section 3.02 of the Fourth
Supplemental Indenture). 
 5. Optional Redemption. 

(a) At its option, the Issuer at any time prior to September 15, 2024, may choose to redeem all or any portion of the
Notes, at once or from time to time, at a redemption price equal to the greater of (i) 100% of the principal amount of such Notes and (ii) the sum of the present values of the remaining scheduled payments of principal and interest thereon
discounted to the Redemption Date on a semiannual basis (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Rate, plus 45 basis points, plus in each case accrued and unpaid interest, if any, to the Redemption Date (subject
to the right of Holders on the relevant record date to receive interest due on the relevant interest payment date). 

  
 Exhibit A-3 

 (b) At its option, the Issuer at any time on or after September 15, 2024,
may choose to redeem all or any portion of the Notes, at once or from time to time, at a redemption price equal to 100% of the principal amount of such Notes, plus accrued and unpaid interest, if any, to the Redemption Date (subject to the right of
Holders on the relevant record date to receive interest due on the relevant interest payment date). 
 For purposes of determining the
redemption price, the following definitions shall apply: 
 “Comparable Treasury Issue” means the U.S. Treasury
security or securities selected by an Independent Investment Banker as having an actual or interpolated maturity comparable to the remaining term of the Notes to be redeemed that would be utilized, at the time of selection and in accordance with
customary financial practice, in pricing new issues of corporate debt securities of a comparable maturity to the remaining term of the notes to be redeemed. 

“Comparable Treasury Price” means, for any Redemption Date, (1) the average of the Reference Treasury Dealer
Quotations for such Redemption Date, after excluding the highest and lowest such Reference Treasury Dealer Quotations or (2) if the Issuer obtains fewer than four such Reference Treasury Dealer Quotations, the average of all such quotations.

 “Independent Investment Banker” means one of the Reference Treasury Dealers appointed by the Issuer. 

“Reference Treasury Dealers” means each of Barclays Capital Inc. and J.P. Morgan Securities LLC, or an affiliate or
successor of the foregoing, and, at the Issuer’s option, additional Primary Treasury Dealers (as defined below); provided, however, that if any of the foregoing shall cease to be a primary U.S. Government securities dealer in New York
City (a “Primary Treasury Dealer”), the Issuer shall substitute therefor another Primary Treasury Dealer. 
 “Reference
Treasury Dealer Quotations” means, for each Reference Treasury Dealer and any Redemption Date, the average, as determined by the Issuer, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a
percentage of its principal amount) quoted in writing to the Issuer by such Reference Treasury Dealer at 3:30 p.m., New York City time, on the third business day preceding such Redemption Date. 

“Treasury Rate” means, with respect to any Redemption Date, the rate per annum equal to the semi-annual equivalent
yield to maturity of the Comparable Treasury Issue, calculated using a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for such Redemption Date. 

6. Mandatory Redemption. The Issuer shall not be required to make mandatory redemption or sinking fund payments with respect to the
Notes or to repurchase them at the option of the Holders. 
 7. Notice of Redemption. Notice of redemption shall be mailed by first
class mail at least 30 days but not more than 60 days before the Redemption Date to each Holder whose Notes are to be redeemed at its registered address. Notes in denominations larger than $2,000 may be redeemed in part but only in whole multiples
of $1,000, unless all of the Notes held by a Holder are to be redeemed. On and after the Redemption Date interest shall cease to accrue on Notes or portions thereof called for redemption and with respect to which the redemption price has been paid.

  
 Exhibit A-4 

 8. Denominations, Transfer, Exchange. The Notes are in registered form without coupons in
minimum denominations of $2,000 and integral multiples of $1,000 in excess thereof. The transfer of Notes may be registered and Notes may be exchanged as provided in the Indenture. The Registrar and the Trustee may require a Holder, among other
things, to furnish appropriate endorsements and transfer documents, and the Issuer may require a Holder to pay any taxes or other governmental charges imposed in relation thereto. 

9. Persons Deemed Owners. The registered Holder of a Note shall be treated as its owner for all purposes. 

10. Amendment, Supplement and Waiver. Subject to certain exceptions, the Indenture may be amended or supplemented with the consent of
the Holders of not less than a majority in aggregate principal amount of the then Outstanding Notes, and any existing default or compliance with any provision of the Indenture relating to the Notes may be waived with the consent of the Holders of
not less than a majority in aggregate principal amount of the then Outstanding Notes. Without the consent of any Holder of a Note, the Indenture may be amended or supplemented for any of the purposes set forth in Section 9.01 of the Indenture,
including to provide for the assumption of the Issuer’s obligations to Holders of the Notes in case of a merger or consolidation of the Issuer or sale of all or substantially all of the Issuer’s assets, to add to the covenants of the
Issuer or any Guarantor, to cure any ambiguity or omission or to correct any defect or inconsistency, to permit the qualification of the Indenture under the TIA, to add or release Guarantors pursuant to the terms of the Indenture, to make any change
that does not adversely affect the rights under the Indenture of any Holder of the Notes, to add to, change or eliminate any of the provisions of the Indenture in respect of one or more series of Debt Securities in certain circumstances, to evidence
or provide for the acceptance of appointment under the Indenture of a successor or separate Trustee or to establish the form or terms of any other series of Debt Securities. 

11. Defaults and Remedies. Each of the following constitutes an Event of Default with respect to the Notes: (i) default in the
payment of any installment of interest upon the Notes as and when due and payable, and continuance of such default for a period of 30 days; (ii) default in the payment of all or any part of the principal on any of the Notes as and when the same
shall become due and payable either at Stated Maturity, upon any redemption, by declaration or otherwise; (iii) default in the performance, or breach, of any covenant or agreement of the Issuer or the Guarantor in respect of the Notes (other
than a covenant or agreement in respect of the Notes a default in the performance of which or the breach of which is elsewhere in this Section is specifically dealt with) and continuance of such default or breach for a period of 60 days (or 180 days
in the case of a Reporting Failure) after there has been given to the Issuer and the Guarantor by the Trustee or to the Issuer, the Guarantor and the Trustee by the Holders of at least 25% in aggregate principal amount of the Outstanding Notes, a
written notice specifying such default or breach and requiring it to be remedied and stating that such notice is a “Notice of Default” hereunder; (iv) certain events of bankruptcy, insolvency or reorganization with respect to the
Issuer or, if and so long as the Notes are guaranteed by a Guarantor, such Guarantor; (v) any Guarantee ceasing to be in full force and effect (except as otherwise provided 

  
 Exhibit A-5 

 
in the Indenture), being declared in any judicial proceeding to be null and void, or being denied or disaffirmed by the applicable Guarantor; and (vi) either (1) default in the payment
of any Indebtedness of the Issuer, the Guarantor or any Subsidiary of the Issuer after the expiration of any applicable grace period after final maturity or (2) the acceleration of Indebtedness of the Issuer, the Guarantor or any Subsidiary of
the Issuer by the holders thereof because of a default and, in either case, the total amount of the Indebtedness unpaid or accelerated exceeds $50 million; provided, however, that the occurrence of any of the events described in clause
(iii) above shall not constitute an Event of Default if such occurrence is the result of changes in generally accepted accounting principles as recognized by the American Institute of Certified Public Accountants at the date as of which this
Indenture is executed and a certificate to such effect is delivered to the Trustee by the Issuer’s independent public accountants. 

If any Event of Default, other than one described in clause (iv) above, occurs and is continuing, then, unless the principal of and
accrued and unpaid interest on all the Notes shall have already become due and payable, either the Trustee or the Holders of at least 25% in aggregate principal amount of the then Outstanding Notes may declare the principal of and interest on all
the Notes to be due and payable. In the case of an Event of Default arising from certain events of bankruptcy or insolvency, then in each and every such case, unless the principal of and accrued and unpaid interest on all the Notes shall have
already become due and payable, the principal of and interest on all the Notes shall become due and payable immediately, without further action or notice. 

Holders may not enforce the Indenture or the Notes except as provided in the Indenture. Subject to certain limitations, Holders of not less
than a majority in aggregate principal amount of the then Outstanding Notes may direct the Trustee in its exercise of any trust or power. The Trustee may withhold from Holders of the Notes notice of any continuing Default (except a Default relating
to the payment of principal, premium, if any, or interest) if the Trustee determines in good faith that withholding notice is in the Holders’ interests. The Holders of not less than a majority in aggregate principal amount of the Notes then
Outstanding by notice to the Trustee may on behalf of the Holders of all of the Notes waive any past Default or Event of Default and its consequences under the Indenture except a Default or Event of Default in the payment of interest on, the
principal of, or premium, if any, on, the Notes or an Event of Default relating to a provision of the Indenture that cannot be amended without the consent of each Holder affected thereby. The Partnership is required to deliver to the Trustee
annually a statement regarding compliance with the Indenture, and the Partnership is required within 30 days after the occurrence of any Default or Event of Default to deliver to the Trustee a statement specifying such Default or Event of Default
and certain additional information. 
 12. Authentication. This Note shall not be valid until authenticated by the manual signature
of the Trustee or an authenticating agent. 
 13. Abbreviations. Customary abbreviations may be used in the name of a Holder or an
assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the entireties), JT TEN (= joint tenants with right of survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to Minors Act). 

  
 Exhibit A-6 

 14. CUSIP and ISIN Numbers. Pursuant to a recommendation promulgated by the Committee on
Uniform Security Identification Procedures, the Issuer has caused CUSIP and corresponding ISIN numbers to be printed on the Notes, and the Trustee may use CUSIP and corresponding ISIN numbers in notices of redemption as a convenience to Holders. No
representation is made as to the accuracy of such numbers either as printed on the Notes or as contained in any notice of redemption and reliance may be placed only on the other identification numbers placed thereon. 

The Issuer shall furnish to any Holder upon written request and without charge a copy of the Indenture. Requests may be made to: 

Boardwalk Pipelines, LP 
 c/o
Boardwalk GP, LLC 
 9 Greenway Plaza, Suite 2800 

Houston, Texas 77046 
 Attention:
General Counsel 

  
 Exhibit A-7 

 NOTATION OF GUARANTEE 

The Guarantor (which term includes any successor Person in such capacity under the Indenture) has fully, unconditionally and absolutely
guaranteed, to the extent set forth in the Indenture and subject to the provisions of the Indenture, the due and punctual payment of the principal of, and premium, if any, and interest on, the Debt Securities of this series and all other amounts due
and payable under the Indenture and the Debt Securities of this series by the Issuer. 
 The obligations of the Guarantor to the Holders of
Debt Securities of this series and to the Trustee pursuant to the Guarantee and the Indenture are expressly set forth in Article XIV of the Indenture and reference is hereby made to the Indenture for the precise terms of the Guarantee. 

 

			
	Guarantor:
	
	BOARDWALK PIPELINE PARTNERS, LP
		
	By:	 	Boardwalk GP, LP, its general partner
		
	By:	 	Boardwalk GP, LLC its general partner
		 	
		
	By:	 	  

		 	Jamie L. Buskill
		 	Senior Vice President, Chief Financial and Administrative Officer and Treasurer

  
 Exhibit A-8 

 Assignment Form 

To assign this Note, fill in the form below: (I) or (we) assign and transfer this Note to 

 
  

(Insert assignee’s Social Security or other tax I.D. no.) 
  

 
  

 
  

 
 (Print or type assignee’s name,
address and zip code) 
 and irrevocably appoint 
  

 
 agent to transfer this Note on the books of the
Issuer. The agent may substitute another to act for him. 

Date:                         
                            

 

			
	Your Signature:                                 
                                         
  
	
	(Sign exactly as your name appears on the face of this Note)

  

			
	Signature Guarantee:                                
                                         
                                         
                                         
                                      

			
		
		  	(Signature must be guaranteed by a financial institution that is a member of the Securities Transfer Agent Medallion Program (“STAMP”), the Stock Exchange Medallion Program (“SEMP”),
the New York Stock Exchange, Inc. Medallion Signature Program (“MSP”) or such other signature guarantee program as may be determined by the Registrar in addition to, or in substitution for, STAMP, SEMP or MSP, all in
accordance with the Securities Exchange Act of 1934, as amended.)

  
 Exhibit A-9 

 SCHEDULE OF INCREASES OR DECREASES IN THE GLOBAL NOTE3 
 The original principal amount of this Global Note is
$        . The following increases or decreases in this Global Note have been made: 
  

									
	 Date of

Exchange
	 	 Amount of Decrease

in
 Principal
Amount
	 	 Amount of Increase

in
Principal Amount
	  	Principal Amount of
This Global Note
Following Such
Decrease (or
Increase)	  	Signature of Authorized Signatory
of Trustee or Mote Custodian

 

	3 	To be included only if the Note is issued in global form. 

  
 Exhibit A-10Exhibit 10.12

 

FORM OF SECURITIES PURCHASE AGREEMENT

 

THIS SECURITIES PURCHASE
AGREEMENT, dated as of June 24, 2014 (this “Agreement”), is entered into by and between INFINITY AUGMENTED REALITY,
INC., a Nevada corporation with an office located at 2220 Nostrand Avenue, Brooklyn, NY, 11210 (the “Company”),
and the Buyer named of the signature page hereto (the “Buyer”) under such agreement and the Transaction Agreements,
as defined below, referred to therein).

 

W I T N E S S E T H:

 

WHEREAS, the Company
and the Buyer are executing and delivering this Agreement in reliance upon the exemption from securities registration for offers
and sales to accredited investors afforded, inter alia, by Rule 506 under Regulation D (“Regulation D”)
as promulgated by the United States Securities and Exchange Commission (the “SEC”) under the Securities Act of 1933,
as amended (the “Securities Act”), and/or Section 4(2) of the Securities Act; and

 

WHEREAS, the Company
desires to sell and the Buyer, wishes to purchase from the Company, subject to and upon the terms and conditions set forth in this
Agreement and acceptance of this Agreement by the Company, an aggregate of $1,236,000.00 (the “Purchase Price”) in
principal amount of Convertible Debentures of the Company (the “Convertible Debenture”) which will be convertible into
shares of Common Stock, $0.00001 par value per share, of the Company (the “Common Stock”), upon the terms and subject
to the conditions of such Convertible Debentures, together with the Warrants (as defined below) exercisable for the purchase of
shares of Common Stock;

 

WHEREAS, the Purchase
Price shall consist of (i) $1,100,000 in cash and (ii) and the forgiveness by the Buyer of $136,000 payable as reimbursement of
reduction of premium paid with regard to the insurance policies (the “Policies”) transferred to the Buyer or their
affiliates as satisfaction of the Term Loan and Credit Agreement as defined in the Agreement between the Company, Platinum Partners
Value Arbitrage Fund L.P. as agent for the benefit of the lenders under the Credit Agreement and the Buyer, dated November 15,
2012

 

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

 

1.            AGREEMENT TO PURCHASE; PURCHASE PRICE.

 

a.     Agreement to Purchase.

 

(i)    Subject to the terms and conditions
set forth in this Agreement and the other Transaction Agreements, the undersigned hereby agrees to purchase from the Company the
principal amount of Convertible Debentures (the “Debenture”) specified on the Buyer’s signature page of this
Agreement and the Warrants (the Debenture and the Warrants, collectively, the “Purchased Securities”) for the purchase
price equal to such principal amount set forth on the Buyer’s signature page of this Agreement (the “Purchase Price”).
This is one of a series of Purchased Securities in similar tenor being issued hereunder to the Lead Investor.

 

    	1

    	 

    

 

(ii)    The Convertible Debentures shall
have the terms and conditions set forth in the Convertible Debenture annexed hereto as Annex I.

 

(iii)   On the Closing Date (as defined
below), the cash portion of the Purchase Price shall be paid by the Buyer and the Buyer shall be deemed to waive the reimbursement
portion of the Purchase Price and the Company will deliver the Closing Certificates (as defined below), as provided in Section
1(c) hereof.

 

(iv)  The purchase to be made by the
Buyer from the Company and the issuance by the Company to the Buyer of the Purchased Securities to the Buyer are sometimes referred
to herein and in the other Transaction Agreements as the purchase and sale of the Purchased Securities, and are referred to collectively
as the “Transactions.”

 

b.     Certain
Definitions.     As used herein, each of the following terms has the meaning set forth below, unless the context otherwise
requires:

 

“Affiliate”
means, with respect to a specific Person referred to in the relevant provision, another Person who or which controls or is controlled
by or is under common control with such specified Person.

 

“By-laws” means
the by-laws of the Company (howsoever denominated), as amended to date.

 

“Certificate of Incorporation”
means the certificate of incorporation, articles of incorporation or other charter document (howsoever denominated) of the Company,
as amended to date.

 

“Closing Certificates”
means the (x) the original Debenture, and (y) the Warrant, each duly executed by the Company and issued in the name of the Buyer
on the Closing Date.

 

“Closing Date”
means the date for the closing of the Buyer’s Transactions hereunder.

 

“Company's SEC Documents”
means the Company’s periodic filings on the SEC’s EDGAR system filed by the Company through the date which is two (2)
Trading Days prior to the relevant Closing Date.

 

“Conversion Shares”
means any or all of (i) the shares of Common Stock issued or issuable upon conversion of the Debenture, and (ii) the shares of
Common Stock issued or issuable in payment of accrued interest thereon, as contemplated in the Convertible Debenture.

 

    	2

    	 

    

 

“Current Information
Reports” means all reports and material required to be filed by the Company so that the conditions, if applicable, of Rule
144 that there is adequate current information with respect to the Company will be satisfied.

 

“Disclosure Annex”
means Annex VI to this Agreement; provided, however, that the Disclosure Annex shall be arranged in sections corresponding
to the identified Sections of this Agreement, but the disclosure in any such section of the Disclosure Annex shall qualify other
provisions in this Agreement to the extent that it would be readily apparent to an informed reader from a reading of such section
of the Disclosure Annex that it is also relevant to other provisions of this Agreement.

 

“Exercise Price”
means the per share exercise price of a Warrant.

 

“Expiration Date”
means the close of business on the last day of the calendar month in which the Fifth Anniversary Date occurs.

 

“Fifth Anniversary
Date” means the fifth annual anniversary of the relevant Issue Date.

 

“Holder” means
the Person holding the relevant Securities at the relevant time.

 

“Indebtedness”
of a Person at a particular date shall mean all obligations of such Person which in accordance with GAAP would be classified upon
a balance sheet as liabilities (except capital stock and surplus earned or otherwise) and in any event, without limitation by
reason of enumeration, shall include all indebtedness, debt and other similar monetary obligations of such Person whether direct
or guaranteed, and all premiums, if any, due at the required prepayment dates of such indebtedness, and all indebtedness secured
by a Lien on assets owned by such Person, whether or not such indebtedness actually shall have been created, assumed or incurred
by such Person. Any indebtedness of such Person resulting from the acquisition by such Person of any assets subject to any Lien
shall be deemed, for the purposes hereof, to be the equivalent of the creation, assumption and incurring of the indebtedness secured
thereby, whether or not actually so created, assumed or incurred.

 

“Issue Date”
means, with respect each Debenture and each Warrant, the Closing Date.

 

“Issue Date Conversion
Shares” means, with respect to the Closing Date, the number of shares of Common Stock equal to (x) the Debenture issued to
the Buyer the Closing Date, divided by (y) the Conversion Price (without regard to whether or not the Debenture were convertible
on such date in accordance with their terms) in effect on such date.

 

“Last Audited Date”
means August 31, 2013.

 

“Lead Investor”
shall mean Credit Strategies, LLC, a Delaware limited liability company.

 

    	3

    	 

    

 

“Material Adverse
Effect” means an event or combination of events, which individually or in the aggregate, would reasonably be expected to
(x) adversely affect the legality, validity or enforceability of the Purchased Securities or any of the Transaction Agreements,
(y) have or result in a material adverse effect on the results of operations, assets, business, properties , prospects or financial
condition of the Company and its subsidiaries, taken as a whole, or (z) adversely impair the Company's ability to perform fully
on a timely basis its material obligations under any of the Transaction Agreements or the transactions contemplated thereby.

 

“New Common Stock”
means shares of Common Stock and/or securities convertible into, and/or other rights exercisable for, Common Stock, which are offered
or sold in a New Transaction.

 

“New Transactions”
means, unless consented to in writing by the Lead Investor a transaction by the Company involving (i) the issuance of Common Stock;
(ii) a security convertible or exchangeable into Common Stock; (iii) an equity or credit line transaction in a transaction consummated
after the date hereof; (iv) the Company’s issuance of, or consent to, other Indebtedness of the Company (excluding trade
payables incurred in the ordinary course of business); (v) the Company’s grant of or consent to liens, security interests,
hypothecations, or other charges or encumbrances (“Lien”) on any assets of the Company (excluding purchase money security
interests incurred in the ordinary course of business); but such term does not include (a) the issuance of the Purchased Securities
to the Buyer and the Other Buyers, (b) the issuance of Common Stock upon the exercise or conversion of options, warrants or convertible
securities outstanding on the date hereof, identified in the Disclosure Annex or in the Company’s SEC Documents (c) the issuance
of New Common Stock pursuant to an Employee Stock Option Plan (an “ESOP”) or an Equity Incentive Plan of the Company
(in each case, howsoever denominated), (d) the issuance of New Common Stock pursuant to a non-employee director stock option plan
of the Company, (e) the issuance of New Common Stock pursuant to a consultants’ stock option plan of the Company, (f) the
issuance of stock options or warrants to employees, officers or directors of the Company, or (g) the issuance of Common Stock upon
the conversion or exercise of any securities options, rights or warrants referred to in the preceding clauses (a) through (f),
inclusive, of this paragraph; provided however, that the aggregate amount of securities issued pursuant to subparagraphs
(c) (d) (e) and (f) shall not, subsequent to exceed in the aggregate 30,000,000 shares of Common Stock, options or warrants in
2014 or 2,500,000 shares of Common Stock, options or warrants in any subsequent calendar year.

 

“New Transaction
Period” means the period commencing on the Closing Date and continuing through and including Termination Date.

 

“Person” means
any living person or any entity, such as, but not necessarily limited to, a corporation, partnership or trust.

 

“Principal Trading
Market” means the Over the Counter Bulletin Board or such other market on which the Common Stock is principally traded at
the relevant time, but shall not include the “pink sheets.”

 

“Right of First Refusal”
shall mean a right of first refusal in favor of the Lead Investor as set forth in Section 5 (h).

 

    	4

    	 

    

 

“Rule 144" means,
as may be in effect from time to time, (i) Rule 144 promulgated under the Securities Act or (ii) any other similar rule or regulation
of the SEC that may at any time permit Holder to sell securities of the Company to the public without registration under the Securities
Act.

 

“Securities”
means the Debenture, the Warrant and the Shares.

 

“Shares” means
the shares of Common Stock representing any or all of the Conversion Shares and the Warrant Shares.

 

“State of Incorporation”
means Nevada.

 

“Subsidiary”
means, as of the relevant date, any subsidiary of the Company (whether or not included in the Company's SEC Documents) whether
now existing or hereafter acquired or created.

 

“Termination Date”
means June 15, 2019 or such earlier date as provided herein.

 

“Trading Day”
means any day during which the Principal Trading Market shall be open for business.

 

“Transaction Agreements”
means this Agreement, each issued Convertible Debenture, each issued Warrant, and includes all ancillary documents referred to
in those agreements.

 

“Transfer Agent”
means, at any time, the transfer agent for the Company’s Common Stock.

 

“Warrant Shares”
means shares of Common Stock issued or issuable upon exercise of the Warrants.

 

“Wire Instructions”
means the Purchase Price Wire Instructions as provided in Annex IV annexed hereto.

 

c.     Form of Payment; Delivery of Closing
Certificates.

 

(i)     The
Buyer shall pay the Purchase Price by delivering immediately available good funds in United States Dollars to the Company no later
than the date prior to the Closing Date.

 

(ii)    (A)   The
Company will deliver the Closing Certificates on the Closing Date after the Company has on deposit cleared funds from the Buyer
in an amount at least equal to the Purchase Price.

 

(iii)    By signing this Agreement, each of the Buyer
and the Company agrees to all of the terms and conditions of this Agreement.

 

    	5

    	 

    

 

d.     Method of Payment. Payment
of the Purchase Price shall be made to the Company as provided in the Wire Instructions.

 

2.            BUYER REPRESENTATIONS, WARRANTIES,
ETC.; ACCESS TO INFORMATION; INDEPENDENT INVESTIGATION. The Buyer represents and warrants to, and covenants and agrees with,
the Company, except as otherwise noted, as of the Closing Date, as follows:

 

a.     Without limiting
Buyer's right to sell the Securities pursuant to an effective registration statement or otherwise in compliance with the Securities
Act, the Buyer is purchasing the Securities for the Buyer’s own account for investment only and not with a view towards
the public sale or distribution thereof and not with a view to or for sale in connection with any distribution thereof.

 

b.     The Buyer is
a (i) an “accredited investor” as that term is defined in Rule 501 of the General Rules and Regulations under the
Securities Act, (ii) experienced in making investments of the kind described in this Agreement and the other Transaction Agreements,
(iii) able, by reason of the business and financial experience of the Buyer and the Buyer’s professional advisors (who are
not affiliated with or compensated in any way by the Company or any of its Affiliates or selling agents), to protect the Buyer’s
own interests in connection with the transactions described in this Agreement and the other Transaction Agreements, and to evaluate
the merits and risks of an investment in the Securities, and (iv) able to afford the entire loss of its investment in the Securities.

 

c.     All subsequent
offers and sales of the Securities by the Buyer shall be made pursuant to registration of the relevant Securities under the Securities
Act or pursuant to an exemption from such registration. The Buyer acknowledges that the Company has no obligation to register,
and the Buyer has no right to demand that the Company register, the Shares to enable the Buyer to sell any of the Shares pursuant
to an effective registration statement.

 

d.     The
Buyer understands and agrees that the Securities have not been registered under the Securities Act or any applicable state securities
laws, by reason of their issuance in a transaction that does not require registration under the Securities Act (based in part
on the accuracy of the representations and warranties of the Buyer contained herein), and that such Securities must be held indefinitely
unless a subsequent disposition is registered under the Securities Act or any applicable state securities laws or is exempt from
such registration. The Buyer understands that the Securities are being offered and sold to the Buyer in reliance on specific exemptions
from the registration requirements of the Securities Act and state securities laws and that the Company is relying upon the truth
and accuracy of, and the Buyer's compliance with, the representations, warranties, agreements, acknowledgments and understandings
of the Buyer set forth herein in order to determine the availability of such exemptions and the eligibility of the Buyer to acquire
the Securities.

 

    	6

    	 

    

 

e.     The
Buyer and the Buyer’s advisors, if any, have been furnished with or have been given access to all materials relating to
the business, finances and operations of the Company and materials relating to the offer and sale of the Purchased Securities
which have been requested by the Buyer, including those set forth in the SEC Documents. The Buyer and the Buyer’s advisors,
if any, have been afforded the opportunity to ask questions of the Company and its management and have received complete and satisfactory
answers to any such inquiries. Without limiting the generality of the foregoing, the Buyer has also had the opportunity to obtain
and to review the Company's SEC Documents.

 

f.     The
Buyer understands that its investment in the Securities involves a high degree of risk.

 

g.    The
Buyer hereby represents that, in connection with the Buyer’s investment or the Buyer’s decision to purchase the Securities,
the Buyer has not relied on any statement or representation of any Person, including any such statement or representation by the
Company or any of their respective controlling Persons, officers, directors, partners, agents and employees or any of their respective
attorneys, except as specifically set forth herein.

 

h.    The
Buyer understands that no United States federal or state agency or any other government or governmental agency has passed on or
made any recommendation or endorsement of the Securities or the suitability of the investment in the Securities nor have any such
authorities passed upon or endorsed the merits of the offering of the Securities.

 

k.    This
Agreement and each of the other Transaction Agreements to which the Buyer is a party, and the transactions contemplated hereby
and thereby, have been duly and validly authorized by the Buyer. This Agreement has been executed and delivered by the Buyer,
and this Agreement is, and each of the other Transaction Agreements to which the Buyer is a party, when executed and delivered
(or deemed executed and delivered as contemplated hereby) by the Buyer, will be valid and binding obligations of the Buyer enforceable
in accordance with their respective terms, subject as to enforceability to general principles of equity and to bankruptcy, insolvency,
moratorium and other similar laws affecting the enforcement of creditors' rights generally.

 

l.     The
execution, delivery and performance of this Agreement and the consummation by the Buyer of the transactions contemplated
hereby or relating hereto do not and will not conflict with, or constitute a default (or an event which with notice or lapse
of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or
cancellation of any agreement, indenture or instrument or obligation to which the Buyer is a party or by which its properties
or assets are bound, or result in a violation of any law, rule, or regulation, or any order, judgment or decree of any court
or governmental agency applicable to the Buyer or its properties (except for such conflicts, defaults and violations as would
not, individually or in the aggregate, have a material adverse effect on the Buyer’s ability to fulfill its obligations
under this Agreement or the other Transaction Agreements). The Buyer is not required to obtain any consent, authorization or
order of, or make any filing or registration with, any court or governmental agency in order for it to execute, deliver or
perform any of its obligations under this Agreement or to purchase the Securities in accordance with the terms hereof,
provided that for purposes of the representation made in this sentence, the Buyer is assuming and relying upon the accuracy
of the relevant representations and agreements of the Company herein.

 

    	7

    	 

    

 

m.    The Buyer hereby waives, forever
release and discharges any right that it or any of its affiliates may have, have had or in the future
will have to receive additional reimbursement for reduction of premium paid with respect to any of the Policies and confirm
and agree that any amount loaned against or set off from the payment of the Policies shall not be the obligation of the
Company. 

 

3.            COMPANY REPRESENTATIONS, ETC.
The Company represents and warrants to the Buyer as of the date hereof and, except as otherwise noted, as of the Closing Date that,
except as otherwise provided in the Company’s SEC Documents or in the Disclosure Annex:

 

a.     Rights
of Others Affecting the Transactions. There are no preemptive rights of any stockholder of the Company to acquire the Securities.
No other party has a currently exercisable right of first refusal which would be applicable to any or all of the transactions
contemplated by the Transaction Agreements. Except for a Registration Statement on Form S-8, no Person has, and as of the Closing
Date, no Person shall have, any demand, “piggy-back” or other rights to cause the Company to file any registration
statement under the Securities Act relating to any of its securities or to participate in any such registration statement.

 

b.     Status.
The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Incorporation
and has the requisite corporate power to own its properties and to carry on its business as now being conducted. The Company is
duly qualified as a foreign corporation to do business and is in good standing in each jurisdiction where the nature of the business
conducted or property owned by it makes such qualification necessary, other than those jurisdictions in which the failure to so
qualify would not have or result in a Material Adverse Effect. The Company has registered its stock and is obligated to file reports
pursuant to Section 12 or Section 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

 

c.     Authorized
Shares.

 

(i)     The capitalization of the
Company (including the number of shares of each class of stock which is authorized and the number of such shares which are outstanding)
is as indicated in the SEC Documents.

 

(ii)    There are no outstanding
securities which are exercisable for, exchangeable for or convertible into shares of Common Stock or exercisable for, exchangeable
for or convertible into instruments which are convertible into shares of Common Stock, whether such exercise, exchange or conversion
is currently exercisable or exercisable only upon some future date or the occurrence of some event in the future.

 

(iii)    All issued and outstanding
shares of Common Stock have been duly authorized and validly issued and are fully paid and non-assessable. The Company has sufficient
authorized and unissued shares of Common Stock as may be necessary to effect the issuance of the Shares on the Closing Date, were
the Debentures fully converted and were the Warrant fully exercised on that date (without regard to any limitations on such conversion
or exercise).

 

    	8

    	 

    

 

(iv)    The
Shares have been duly authorized by all necessary corporate action on the part of the Company, and, when issued on conversion
of, or in payment of dividends on, the Convertible Debentures, or upon exercise of the Warrants, in each case in accordance with
their respective applicable terms, will have been duly and validly issued, fully paid and non-assessable and will not subject
the Holder thereof to personal liability by reason of being such Holder.

 

d.     Transaction
Agreements. This Agreement and each of the other Transaction Agreements, and the transactions contemplated hereby and thereby,
have been duly and validly authorized by the Company. This Agreement has been duly executed and delivered by the Company and this
Agreement is, and each of the Debenture, the Warrants and each of the other Transaction Agreements, when executed and delivered
by the Company (or deemed executed and delivered by the Company as contemplated hereby), will be, valid and binding obligations
of the Company enforceable in accordance with their respective terms, subject as to enforceability to general principles of equity
and to bankruptcy, insolvency, moratorium, and other similar laws affecting the enforcement of creditors' rights generally.

 

e.     Non-contravention.
The execution and delivery of this Agreement and each of the other Transaction Agreements by the Company, the issuance of
the Securities in accordance with the terms hereof, and the consummation by the Company of the other transactions contemplated
by this Agreement, the Debenture, the Warrants and the other Transaction Agreements do not and will not conflict with or result
in a breach by the Company of any of the terms or provisions of, or constitute a default under (i) the Certificate of Incorporation
or By-laws, each as currently in effect, (ii) any indenture, mortgage, deed of trust, or other material agreement or instrument
to which the Company is a party or by which it or any of its properties or assets are bound, including any listing agreement for
the Common Stock except as herein set forth, or (iii) any existing applicable law, rule, or regulation or any applicable decree,
judgment, or order of any court, United States federal or state regulatory body, administrative agency, or other governmental
body having jurisdiction over the Company or any of its properties or assets, except in the case of (iii), such conflict, breach
or default which would not have or result in a Material Adverse Effect.

 

f.     Securities Law Matters; Approvals.

 

(i)     No authorization, approval
or consent of any court, governmental body, regulatory agency, self-regulatory organization, or stock exchange or market or the
stockholders of the Company is required to be obtained by the Company for the issuance and sale of the Securities to the Buyer
as contemplated by this Agreement, except such authorizations, approvals and consents that have been obtained.

 

    	9

    	 

    

 

(ii)    Assuming the accuracy of
the representations and warranties of the Buyer set forth in Section 2, the offer and sale by the Company of the Purchased Securities
is exempt from (A) the registration and prospectus delivery requirements of the Securities Act and the rules and regulations of
the SEC thereunder and (B) the registration and/or qualification provisions of all applicable state and provincial securities and
“blue sky” laws.

 

g.     Filings.
None of the Company’s SEC Documents contained, at the time they were filed, any untrue statement of a material fact
or omitted to state any material fact required to be stated therein or necessary to make the statements made therein, in light
of the circumstances under which they were made, not misleading. Since the Last Audited Date, the Company has filed all annual
and quarterly reports required to be filed by the Company with the SEC under Section 13(a) or 15(d) of the Exchange Act. The financial
statements of the Company included in the Company’s SEC Documents, as of the dates of such documents, were true and complete
in all material respects and complied with applicable accounting requirements and the published rules and regulations of the Commission
with respect thereto, were prepared in accordance with generally accepted accounting principles in the United States (“GAAP”)
(except in the case of unaudited statements permitted by Form 10-Q under the Exchange Act) applied on a consistent basis during
the periods involved (except as may be indicated in the notes thereto) and fairly presented the consolidated financial position
of the Company and its Subsidiaries as of the dates thereof and the consolidated results of their operations and cash flows for
the periods then ended (subject, in the case of unaudited statements, to normal year-end audit adjustments that in the aggregate
are not material and to any other adjustment described therein).

 

h.     Absence
of Certain Changes. Since the Last Audited Date, there has been no Material Adverse Effect. Since the Last Audited Date, except
as provided in the Company’s SEC Documents, the Company has not (i) incurred or become subject to any material liabilities
(absolute or contingent) except liabilities incurred in the ordinary course of business consistent with past practices; (ii) discharged
or satisfied any material lien or encumbrance or paid any material obligation or liability (absolute or contingent), other than
current liabilities paid in the ordinary course of business consistent with past practices; (iii) declared or made any payment
or distribution of cash or other property to stockholders with respect to its capital stock, or purchased or redeemed, or made
any agreements to purchase or redeem, any shares of its capital stock; (iv) sold, assigned or transferred any other material tangible
assets, or canceled any material debts owed to the Company by any third party or material claims of the Company against any third
party, except in the ordinary course of business consistent with past practices; (v) waived any rights of material value, whether
or not in the ordinary course of business, or suffered the loss of any material amount of existing business; (vi) made any increases
in employee compensation, except in the ordinary course of business consistent with past practices; or (vii) experienced any material
problems with labor or management in connection with the terms and conditions of their employment.

 

i.     Full
Disclosure. The SEC Documents do not contain any untrue statement of a material fact or omits to state any material fact required
to be stated therein or necessary to make the statements made therein, in light of the circumstances under which they were made,
not misleading. There is no fact known to the Company (other than conditions known to the public generally or as disclosed in
the Company’s SEC Documents) that has not been disclosed in writing to the Buyer that would reasonably be expected to have
or result in a Material Adverse Effect.

 

    	10

    	 

    

 

j.     Absence
of Litigation. There is no action, suit, proceeding, inquiry or investigation before or by any court, public board or body
pending or, to the knowledge of the Company, threatened against or affecting the Company before or by any governmental authority
or non-governmental department, commission, board, bureau, agency or instrumentality or any other person, wherein an unfavorable
decision, ruling or finding would have a Material Adverse Effect or which would adversely affect the validity or enforceability
of, or the authority or ability of the Company to perform its obligations under, any of the Transaction Agreements. The Company
is not aware of any valid basis for any such claim that (either individually or in the aggregate with all other such events and
circumstances) could reasonably be expected to have a Material Adverse Effect. There are no outstanding or unsatisfied judgments,
orders, decrees, writs, injunctions or stipulations to which the Company is a party or by which it or any of its properties is
bound, that involve the transaction contemplated herein or that, alone or in the aggregate, could reasonably be expect to have
a Material Adverse Effect.

 

k.    No
Integrated Offering. Neither the Company nor any of its Affiliates nor any Person acting on its or their behalf has, directly
or indirectly, at any time since March 1, 2013, made any offer or sales of any security or solicited any offers to buy any security
under circumstances that would eliminate the availability of the exemption from registration under Regulation D in connection
with the offer and sale of the Securities as contemplated hereby.

 

l.     Fees
to Brokers, Finders and Others. The Company has taken no action which would give rise to any claim by any Person for brokerage
commission, placement agent or finder's fees or similar payments by Buyer relating to this Agreement or the transactions contemplated
hereby. Except for such fees arising as a result of any agreement or arrangement entered into by the Buyer without the knowledge
of the Company (a “Buyer’s Fee”), Buyer shall have no obligation with respect to such fees or with respect to
any claims made by or on behalf of other Persons for fees of a type contemplated in this paragraph that may be due in connection
with the transactions contemplated hereby. The Company shall indemnify and hold harmless each of Buyer, its employees, officers,
directors, agents, and partners, and their respective Affiliates, from and against all claims, losses, damages, costs (including
the costs of preparation and attorney's fees) and expenses suffered in respect of any such claimed or existing fees (other than
a Buyer’s Fee).

 

m.    Disclosure.
No event or circumstance has occurred or exists with respect to the Company or its business, properties, prospects, operations
or financial conditions, which under applicable law, rule or regulation, requires additional public disclosure or announcement
by the Company.

 

n.     Confirmation.
The Company agrees that, if, to the knowledge of the Company, any events occur or circumstances exist prior to the release
of the Purchase Price to the Company on the Closing Date which would make any of the Company’s representations or warranties
set forth herein materially untrue or materially inaccurate as of such date, the Company shall immediately notify the Buyer in
writing prior to such date of such fact, specifying which representation, warranty or covenant is affected and the reasons therefor.

 

    	11

    	 

    

 

o.     No
Undisclosed Liabilities or Events. The Company has no liabilities or obligations other than those disclosed in the Transaction
Agreements, or which individually or in the aggregate, do not or would not have a Material Adverse Effect. No event or circumstances
has occurred or exists with respect to the Company or its properties, business, operations, financial condition, or results of
operations, which, under applicable law, rule or regulation, requires public disclosure or announcement prior to the date hereof
by the Company but which has not been so publicly announced or disclosed. Except as otherwise provided in the Company’s
SEC Documents:, there are no proposals currently under consideration or currently anticipated to be under consideration by the
Board of Directors or the executive officers of the Company which proposal would (x) change the certificate of incorporation or
other charter document or by-laws of the Company, each as currently in effect, with or without shareholder approval, which change
would reduce or otherwise adversely affect the rights and powers of the shareholders of the Common Stock or (y) materially or
substantially change the business, assets or capital of the Company, including its interests in subsidiaries.

 

p.     Tax
Returns. Except as set forth in the SEC Documents or the Disclosure Annex, Company has filed
all federal, state and local tax returns and other reports they are required by law to file and has paid all taxes, assessments,
fees and other governmental charges that are due and payable. To the best of Company’s knowledge, the provision for taxes
on the books of Company are adequate for all years not closed by applicable statutes, and for its current fiscal year, and Company
have no knowledge of any deficiency or additional assessment in connection therewith not provided for on its books.

 

q.     O.S.H.A.
and Environmental Compliance.

 

(i)     Company has duly
complied with, and its facilities, business, assets, property, leaseholds, real property and equipment are in compliance in all
material respects with, the provisions of the Federal Occupational Safety and Health Act, the Environmental Protection Act, RCRA
and all other applicable environmental laws; there have been no outstanding citations, notices or orders of non-compliance issued
to Company or relating to its business, assets, property or leaseholds under any such laws, rules or regulations.

 

(ii)    Company
has been issued all required federal, state and local licenses, certificates or permits relating to all applicable Environmental
Laws.

 

r.     Licenses and Permits.
Company (a) is in compliance with and (b) has procured and is now in possession of, all material licenses or permits required by
any applicable federal, state or local law, rule or regulation for the operation of its business in each jurisdiction wherein it
is now conducting or propose to conduct business.

 

s.     Default
of Indebtedness. Company is not in default in the payment of the principal of or interest on any Indebtedness or under any
instrument or agreement under or subject to which any Indebtedness has been issued and no event has occurred under the provisions
of any such instrument or agreement which with or without the lapse of time or the giving of notice, or both, constitutes or would
constitute an event of default thereunder.

 

    	12

    	 

    

 

t.     
No Default. Company is not in default in the payment or performance of any of its contractual obligations.

 

u.     No Burdensome
Restrictions. Company is not a party to any contract or agreement the performance of which could have a Material Adverse Effect.
Company has heretofore delivered to Lead Investor true and complete copies of all material contracts to which it is a party or
to which it or any of its properties is subject. Company has not agreed or consented to cause or permit in the future (upon the
happening of a contingency or otherwise) any of its property, whether now owned or hereafter acquired, to be subject to a Lien.

 

v.     Margin
Regulations. Company is not engaged, nor will it engage, principally or as one of its important activities, in the
business of extending credit for the purpose of “purchasing” or “carrying” any “margin
stock” within the respective meanings of each of the quoted terms under Regulation U of the Board of Governors of the
Federal Reserve System as now and from time to time hereafter in effect. No part of the proceeds of any purchase and sale of
Securities hereunder will be used for “purchasing” or “carrying” “margin stock” as
defined in Regulation U of such Board of Governors.

 

w.     Business
and Property of Company. Upon and after the Closing Date, Company does not propose to engage in any business other than that
engaged in by it or any of its Subsidiaries immediately prior to and on the Closing Date.

 

x.     Anti-Terrorism
Laws.

 

(i)     General.
Neither Company nor any Affiliate of Company is in violation of any Anti-Terrorism Law or engages
in or conspires to engage in any transaction that evades or avoids, or has the purpose of evading or avoiding, or attempts to
violate, any of the prohibitions set forth in any Anti-Terrorism Law.

 

(ii)    Executive
Order No. 13224. Neither Company nor any Affiliate of Company or its respective agents acting or benefiting in any capacity
in connection with the purchase and sale of Securities or other transactions hereunder, is any of the following (each a “Blocked
Person”):

 

1.     a
Person that is listed in the annex to, or is otherwise subject to the provisions of, the Executive Order No. 13224;

 

2.     a
Person owned or controlled by, or acting for or on behalf of, any Person that is listed in the annex to, or is otherwise subject
to the provisions of, the Executive Order No. 13224;

 

    	13

    	 

    

 

3.     a
Person or entity with which any Lender is prohibited from dealing or otherwise engaging in any transaction by any Anti-Terrorism
Law;

 

4.     a
Person or entity that commits, threatens or conspires to commit or supports “terrorism” as defined in the Executive
Order No. 13224;

 

5.     a Person or entity that is named as a “specially designated national” on the most current
list published by the U.S. Treasury Department Office of Foreign Asset Control at its official website or any replacement website
or other replacement official publication of such list, or

 

6.     a Person
or entity who is affiliated or associated with a Person or entity listed above.

 

Neither Company nor, to
the knowledge of Company, any of its agents acting in any capacity in connection with the purchase and sale of Securities or other
transactions hereunder (i) conducts any business or engages in making or receiving any contribution of funds, goods or services
to or for the benefit of any Blocked Person, or (ii) deals in, or otherwise engages in any transaction relating to, any property
or interests in property blocked pursuant to the Executive Order No. 13224.

 

y.     Trading
with the Enemy.Company has not engaged, nor does
it intend to engage, in any business or activity prohibited by the Trading with the Enemy Act.

 

4.           CERTAIN COVENANTS AND ACKNOWLEDGEMENTS

 

a.     Transfer
Restrictions. The Buyer acknowledges that (1) the Securities have not been and are not being registered under the provisions
of the Securities Act, and may not be transferred unless (A) subsequently registered thereunder, or (B) the Buyer shall have delivered
to the Company an opinion of counsel, reasonably satisfactory in form, scope and substance to the Company, to the effect that
the Securities to be sold or transferred may be sold or transferred pursuant to an exemption from such registration; (2) any sale
of the Securities made in reliance on Rule 144 may be made only in accordance with the terms of said Rule and further, if said
Rule is not applicable, any resale of such Securities under circumstances in which the seller, or the Person through whom the
sale is made, may be deemed to be an underwriter, as that term is used in the Securities Act, may require compliance with some
other exemption under the Securities Act or the rules and regulations of the SEC thereunder; and (3) except as may be specifically
provided in the Transaction Agreements, neither the Company nor any other Person is under any obligation to register the Securities
under the Securities Act or to comply with the terms and conditions of any exemption thereunder.

 

    	14

    	 

    

 

b.     Restrictive
Legend. The Buyer acknowledges and agrees that, until such time as the relevant Shares have been registered under the Securities
Act and may be sold in accordance with an effective registration statement, or until such Shares can otherwise be sold without
restriction, whichever is earlier, the certificates and other instruments representing any of the Securities shall bear a restrictive
legend in substantially the following form (and a stop-transfer order may be placed against transfer of any such Securities):

 

THESE SECURITIES HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD OR OFFERED FOR SALE IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES OR AN OPINION OF COUNSEL OR OTHER EVIDENCE ACCEPTABLE TO THE
COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.

 

c.     Reporting Status. During the
period from the Closing Date to and the Fifth Anniversary Date, the Company shall

 

(i)     timely file all reports required
to be filed with the SEC pursuant to Section 13 or 15(d) of the Exchange Act, and, unless such filing is publicly available on
the SEC’s EDGAR system (via the SEC’s web site at no additional charge), to provide a copy thereof to the Buyer promptly
after such filing,

 

(ii)    take all reasonable action under
its control to ensure that Current Information Reports are publicly available,

 

(iii)   not terminate its status as
an issuer required to file reports under the Exchange Act even if the Exchange Act or the rules and regulations thereunder would
permit such termination, and

 

(iv)   take all reasonable action under
its control to qualify for and maintain the continued listing and quotation and trading of its Common Stock (including, without
limitation, all Shares) on the Principal Trading Market or a listing on the NASDAQ Capital, Global or Global Select Markets or
AMEX.

 

d.     Warrants.

 

(i)     The Company agrees to issue
to the Buyer, and the Buyer agrees to purchase from the Company, on the Closing Date a transferable warrant (the “Warrant”)
for the purchase of the number of shares, equal to one hundred percent (100%) of the Issue Date Conversion Shares.

 

(ii)    The Warrant shall have an
Exercise Price of $0.50 per share (subject to adjustment as provided in the Warrant).

 

(iii)    Each Warrant, whether issued
on the Closing Date, shall be exercisable commencing on its Issue Date and shall expire on the relevant Expiration Date.

 

(iv)    Except as specified above,
each Warrant shall be substantially in the form annexed hereto as Annex II.

 

    	15

    	 

    

 

e.     Computation
of Dates in Transaction Agreements. The Company and the Buyer agree that, anything herein or in any other Transaction Agreement
to the contrary notwithstanding, all references in this Agreement or in any other Transaction Agreement to a date determined (howsoever
denominated) in relation to the “Closing Date,” shall be deemed to refer to the date so determined in relation to
the Buyer’s Closing Date. In furtherance of the foregoing, and not in limitation thereof, each Warrant shall have an Expiration
Date based on the Closing Date.

 

f.     New
Transactions. Except as provided in the final paragraph of the definition of “New Transactions” or in subparagraph
(h) infra, the Company covenants and agrees that, during the New Transaction Period it will not, without the prior written consent
of the Lead Investor in each instance, enter into any New Transaction.

 

g.     Right
of First Refusal. If the Company proposes to enter into a New Transaction with a Third Party Other Buyer (other than the Buyer
hereunder ) on terms and conditions materially at variance with terms contained in the Transaction Agreements, it must deliver
a Proposed Transaction Notice to the Lead Investor not later than eight (8) Trading Days prior to the consummation of such transaction.
Such Proposed Transaction Notice shall contain the material terms and conditions (including price and form of consideration) of
the Proposed Transaction and the identity of the Prospective Third Party Other Buyer. The Lead Investor shall have the right to
purchase the securities proposed to be sold in the New Transaction on the terms and conditions set forth in the Proposed Transaction
Notice. To exercise its Right of First Refusal under this Section 5 (h), the Lead Investor must deliver to the Company, a Notice
within seven (7) Trading Days after delivery of the Proposed Transfer Notice. Failure of the Lead Investor to timely deliver such
notice shall be deemed a waiver of such Right of First Refusal with respect to such Closing Notice.

 

5.            TRANSFER AGENT INSTRUCTIONS.

 

a.     The Company warrants that,
with respect to the Securities, other than the stop transfer instructions to give effect to Section 4(a) hereof, it will give the
Transfer Agent no instructions inconsistent with instructions to issue Common Stock from time to time upon conversion of the Purchased
Shares or the exercise of the Warrants, if any, as may be applicable from time to time, in such amounts as specified from time
to time by the Company to the Transfer Agent, bearing the restrictive legend specified in Section 4(b) of this Agreement prior
to registration of the Shares under the Securities Act, registered in the name of the Buyer or its nominee and in such denominations
to be specified by the Holder in connection therewith. Except as so provided, the Shares shall otherwise be freely transferable
on the books and records of the Company as and to the extent provided in this Agreement and the other Transaction Agreements. Nothing
in this Section shall affect in any way the Buyer's obligations and agreement to comply with all applicable securities laws upon
resale of the Securities. If the Buyer provides the Company with an opinion of counsel reasonably satisfactory to the Company that
registration of a resale by the Buyer of any of the Securities in accordance with clause (1)(B) of Section 4(a) of this Agreement
is not required under the Securities Act or, the Company shall (except as provided in clause (2) of Section 4(a) of this Agreement)
permit the transfer of the Securities, as may be applicable, promptly instruct the Transfer Agent to issue one or more certificates
for Common Stock without legend in such name and in such denominations as specified by the Buyer.

 

    	16

    	 

    

 

6.            CLOSING DATE.

 

a.     The
Closing Date shall occur on the date which is the first Trading Day after each of the conditions contemplated by Sections 7 and
8 hereof shall have either been satisfied or been waived by the party in whose favor such conditions run.

 

b.     The
closing of the Transactions shall occur on the Closing Date at the offices of counsel to the Company.

 

7.            CONDITIONS TO THE COMPANY'S OBLIGATION
TO SELL.

 

The Buyer understands
that the Company's obligation to sell the Purchased Securities to the Buyer pursuant to this Agreement on the Closing Date is
conditioned upon:

 

a.     The
execution and delivery of this Agreement, and, where indicated, the other Transaction Agreements by the Buyer on or before the
Closing Date;

 

b.     The
delivery by the Buyer by the Closing Date of good funds as payment in full of an amount equal to the Purchase Price in accordance
with this Agreement.

 

c.     On
the Closing Date, the delivery of a Certificate substantially in the form annexed hereto as Exhibit VII-A.

 

d.     The
accuracy on the Closing Date of the representations and warranties of the Buyer contained in this Agreement, each as if made on
such date, and the performance by the Buyer on or before such date of all covenants and agreements of the Buyer required to be
performed on or before such date; and

 

e.     There
shall not be in effect any law, rule or regulation prohibiting or restricting the transactions contemplated hereby, or requiring
any consent or approval which shall not have been obtained.

 

8.            CONDITIONS TO THE BUYER'S OBLIGATION
TO PURCHASE.

 

The Company understands
that the Buyer's obligation to purchase the Purchased Securities on the Closing Date is conditioned upon:

 

a.     The
execution and delivery of this Agreement and the other Transaction Agreements by the Company on or before the Closing Date;

 

    	17

    	 

    

 

b.     The
delivery by the Company of the Closing Certificates in accordance with this Agreement;

 

c.     The
accuracy in all material respects on the Closing Date of the representations and warranties of the Company contained in this Agreement,
each as if made on such date and the performance by the Company on or before such date of all covenants and agreements of the
Company required to be performed on or before such date; and

 

d.     There
shall not be in effect any law, rule or regulation prohibiting or restricting the transactions contemplated hereby, or requiring
any consent or approval which shall not have been obtained.

 

9.           NOTICES. Any notice required
or permitted hereunder shall be given in writing (unless otherwise specified herein) and shall be deemed effectively given on the
earliest of

 

(a)    the date delivered, if delivered
by personal delivery as against written receipt therefor or by confirmed facsimile transmission,

 

(b)   the fifth Trading Day after
deposit, postage prepaid, in the United States Postal Service by registered or certified mail, or

 

(c)    the third Trading Day after
mailing by domestic or international express courier, with delivery costs and fees prepaid,

 

in each case, addressed to each of the other
parties thereunto entitled at the addresses provided in Annex III attached hereto (or at such other addresses as such party
may designate by ten (10) days’ advance written notice similarly given to each of the other parties hereto).

 

10.         GOVERNING LAW.

 

a.     This
Agreement shall be governed by and interpreted in accordance with the laws of the State of New York for contracts to be wholly
performed in such state and without giving effect to the principles thereof regarding the conflict of laws. Each of the parties
consents to the exclusive jurisdiction of the federal courts whose districts encompass any part of the County of New York or the
state courts of the State of New York sitting in the County of New York in connection with any dispute arising under this Agreement
or any of the other Transaction Agreements and hereby waives, to the maximum extent permitted by law, any objection, including
any objection based on forum non conveniens, to the bringing of any such proceeding in such jurisdictions or to any claim
that such venue of the suit, action or proceeding is improper.

 

b.     JURY
TRIAL WAIVER. The Company and the Buyer hereby waive a trial by jury in any action, proceeding or counterclaim brought by either
of the Parties hereto against the other in respect of any matter arising out or in connection with the Transaction Agreements.

 

    	18

    	 

    

 

11.         SURVIVAL OF REPRESENTATIONS AND WARRANTIES.
The Company's and the Buyer's representations and warranties herein shall survive for a period of three (3) years from the date
of the execution and delivery of this Agreement by the Buyer and the payment of the Purchase Price, and shall inure to the benefit
of the Buyer and the Company and their respective successors and assigns.

 

12.          MISCELLANEOUS.

 

a.     Failure
of any party to exercise any right or remedy under this Agreement or otherwise, or delay by a party in exercising such right or
remedy, shall not operate as a waiver thereof.

 

b.     This
Agreement shall inure to the benefit of and be binding upon the successors and assigns of each of the parties hereto.

 

c.     This
Agreement may be amended only by an instrument in writing signed by the party to be charged with enforcement thereof.

 

d.     All
pronouns and any variations thereof refer to the masculine, feminine or neuter, singular or plural, as the context may require.

 

e.     This
Agreement may be signed in one or more counterparts, each of which shall be deemed an original.

 

f.     A
facsimile or other electronic transmission of this signed Agreement shall be legal and binding on all parties hereto.

 

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

 

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

 

i.     All
dollar amounts referred to or contemplated by this Agreement or any other Transaction Agreement shall be deemed to refer to US
Dollars, unless otherwise explicitly stated to the contrary.

 

j.     This
Agreement supersedes all prior agreements and understandings among the parties hereto with respect to the subject matter hereof.

 

[SIGNATURE PAGE FOLLOWS}

 

    	19

    	 

    

 

[SECURITIES PURCHASE AGREEMENT SIGNATURE PAGE]

 

IN WITNESS WHEREOF,
with respect to the number of Purchased Shares and Purchase Price specified below, each of the undersigned represents that the
foregoing statements made by it above are true and correct and that it has caused this Agreement to be duly executed on its behalf
(if an entity, by one of its officers thereunto duly authorized) as of the date first above written.

 

	PURCHASE PRICE:	 	$1,100,000.00

 

BUYER:

 

ALS Capital Ventures
LLC

 

Address

 

	 	By:	/s/ Mark Nordlicht
	 	 	Mark Nordlicht,

 

Jurisdiction of Incorporation

or Organization

 

If the above Notice Address is not
the Residence (for individual Buyer) or Principal Place of Business (for Buyer which is not an individual), such Residence
or Principal Place of Business is:

 

_____________________________

 

_____________________________

 

_____________________________

 

COMPANY:

 

INFINITY AUGMENTED REALITY, INC.

 

	By:	/s/ Ortal Zanzury	 
	 	Ortal Zanzury	 
	 	 	 
	Title:	CFO	 

 

    	20

    	 

    

 

CONSENTED TO AND AGREED:

 

CREDIT STRATEGIES LLC 

 

	By:	/s/ Naftali Manela	 
	 	Naftali Manela	 
	 	 	 
	Title:	CFO	 

 

Platinum Partners Value Arbitrage Fund L.P.

for the benefit of the Lenders under the Credit Agreement.

with respect to section 3m hereunder only

 

By:  ___________________________

 

Title: __________________________

 

    	21

    	 

    

 

	ANNEX I	FORM OF CONVERTIBLE DEBENTURE
	 	 
	ANNEX II	FORM OF WARRANT
	 	 
	ANNEX III	ADDRESSES
	 	 
	ANNEX IV	PURCHASE PRICE WIRE INSTRUCTIONS
	 	 
	ANNEX V	FORM OF CLOSING NOTICE
	 	 
	ANNEX VI	DISCLOSURE ANNEX
	 	 
	ANNEX VII-A	FORM OF CLOSING CERTIFICATE

 

    	22

    	 

    

 

FORM OF DEBENTURE

 

THESE SECURITIES HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD OR OFFERED FOR SALE IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES OR AN OPINION OF COUNSEL OR OTHER EVIDENCE ACCEPTABLE TO THE
COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.

 

	No. A-14–03	US $1,236,000.00

 

INFINITY AUGMENTED REALITY, INC.

 

1.20% CONVERTIBLE DEBENTURE SERIES A-14

DUE June 23, 2019

 

FOR VALUE RECEIVED, INFINITY
AUGMENTED REALITY, INC., a corporation organized and existing under the laws of the State of Nevada (the “Company”),
promises to pay to the registered holder hereof (the “Holder”), the principal sum of one million two hundred and thirty-six
thousand and 00/100 Dollars (US $1,236,000) on June 23, 2019 (the “Maturity Date”) and to pay interest on the principal
sum outstanding from time to time in arrears at the rate of One and 20/100 per cent (1.20%) per annum, accruing from June 24, 2014
the date of initial issuance of this Debenture (the “Issue Date”), on the date (each, an “Interest Payment Date”)
which is the earlier of (i) the next Conversion Date (as defined below), (ii) March 31 and September 30 of each calendar year (a
“Scheduled Interest Payment Date”), or (iii) the Maturity Date, as the case may be. Interest shall accrue monthly (pro-rated
on a daily basis for any period longer or shorter than a month) from the later of the Issue Date or the previous Interest Payment
Date and shall be payable, subject to the other provisions of this Debenture, in cash or in Common Stock, as provided in and subject
to the provisions of Section 4(D) hereof. If not paid in full on an Interest Payment Date, interest shall be fully cumulative and
shall accrue on a daily basis, based on a 365-day year, monthly or until paid, whichever is earlier.

 

This Debenture is being
issued pursuant to the terms of the Securities Purchase Agreement, dated as of June 24, 2014 (the “Securities Purchase Agreement”),
to which the Company and the Holder (or the Holder’s predecessor in interest) are parties. Capitalized terms not otherwise
defined herein shall have the meanings ascribed to them in the Securities Purchase Agreement.

 

    	23

    	 

    

 

This Debenture is subject
to the following additional provisions:

 

1.    The Debentures will initially be
issued in denominations determined by the Company, but are exchangeable for an equal aggregate principal amount of Debentures of
different denominations, as requested by the Holder surrendering the same. No service charge will be made for such registration
or transfer or exchange. Debentures issued as replacement of or in exchange of this Debenture (including by reason of the provisions
of Section 19) will have the same number as provided above with an additional identifying unique letter.

 

2.    The Company shall be entitled to
withhold from all payments of principal of, and interest on, this Debenture any amounts required to be withheld under the applicable
provisions of the United States income tax laws or other applicable laws at the time of such payments, and Holder shall execute
and deliver all required documentation in connection therewith.

 

3.    This Debenture has been issued subject
to investment representations of the original purchaser hereof and may be transferred or exchanged only in compliance with the
Securities Act of 1933, as amended (the "Act"), and other applicable state and foreign securities laws and the terms
of the Securities Purchase Agreement. In the event of any proposed transfer of this Debenture, the Company may require, prior to
issuance of a new Debenture in the name of such other person, that it receive reasonable transfer documentation that is sufficient
to evidence that such proposed transfer complies with the Act and other applicable state and foreign securities laws and the terms
of the Securities Purchase Agreement. Prior to due presentment for transfer of this Debenture, the Company and any agent of the
Company may treat the person in whose name this Debenture is duly registered on the Company's Debenture Register as the owner hereof
for the purpose of receiving payment as herein provided and for all other purposes, whether or not this Debenture be overdue, and
neither the Company nor any such agent shall be affected by notice to the contrary.

 

4.    A.   (i) At any time on or after
the Issue Date and prior to the time this Debenture is paid in full in accordance with its terms (including, without limitation,
after the occurrence of an Event of Default, as defined below, or, if the Debenture is not fully paid or converted after the Maturity
Date), the Holder of this Debenture is entitled, at its option, subject to the following provisions of this Section 4, to convert
this Debenture at any time into shares of Common Stock, $0.00001 par value ("Common Stock"), of the Company at the Conversion
Price (as defined below). Any such conversion is referred to as a “Voluntary Conversion.”

 

(ii) On the Maturity Date
the Company shall pay the principal and accrued interest (through the actual date of payment) of any portion of this Debenture
which is then outstanding.

 

(iii) For purposes of this
Debenture, the following terms shall have the meanings indicated below:

 

“Conversion Price” means
$0.25 (which amount is subject to adjustment as provided in Section 10 herein).

 

“Conversion Date” means the
date on which the Holder faxes or otherwise delivers a Notice of Conversion (as defined below) to the Company so that it is received
by the Company on or before such specified date.

 

    	24

    	 

    

 

“Conversion Shares” has the
meaning ascribed to in Section 4(F) hereof.

 

“Event of Default” has the
meaning ascribed to it in Section 15 hereof.

 

“Lead Investor”
means (i) the Lead Investor identified in the Securities Purchase Agreement, provided that such identified Lead Investor or at
least one of such Lead Investor’s Affiliates is then holding an outstanding Debenture, or (ii) if, and only if, neither such
Lead Investor nor any one of the Lead Investor’s Affiliates is then holding an outstanding Debenture, the Holder.

 

B.    A Voluntary Conversion shall be effectuated
by the Holder by faxing a notice of conversion (“Notice of Conversion”) to the Company as provided in this paragraph.
The Notice of Conversion shall be executed by the Holder of this Debenture and shall evidence such Holder's intention to convert
this Debenture or a specified portion hereof in the form annexed hereto as Exhibit A. Delivery of the Notice of Conversion shall
be accepted by the Company by hand, mail or courier delivery at the address specified in said Exhibit A or at the facsimile number
specified in said Exhibit A (each of such address or facsimile number may be changed by notice given to the Holder in the manner
provided in the Securities Purchase Agreement).

 

C.    Notwithstanding
any other provision hereof or of any of the other Transaction Agreements, in no event (except (i) as specifically provided herein
as an exception to this provision, or (ii) while there is outstanding a tender offer for any or all of the shares of the Company’s
Common Stock) shall the Holder be entitled to convert any portion of this Debenture, or shall the Company have the obligation
to convert such Debenture or, subject to the provisions of Section4(D), the right to issue shares currently in payment of interest
on a Scheduled Interest Payment Date, to the extent that, after such conversion or issuance of stock in payment of interest, the
sum of (1) the number of shares of Common Stock beneficially owned by the Holder and its affiliates (other than shares of Common
Stock which may be deemed beneficially owned through the ownership of the unconverted portion of the Debentures or other convertible
securities or of the unexercised portion of warrants or other rights to purchase Common Stock), and (2) the number of shares of
Common Stock issuable upon the conversion of the Debentures with respect to which the determination of this proviso is being made,
would result in beneficial ownership by the Holder and its affiliates of more than 9.99% of the outstanding shares of Common Stock
(after taking into account the shares to be issued to the Holder upon such conversion). For purposes of the proviso to the immediately
preceding sentence, beneficial ownership shall be determined in accordance with Section 13(d) of the Securities Exchange Act of
1934, as amended, except as otherwise provided in clause (1) of such sentence. Nothing herein shall preclude the Holder from disposing
of a sufficient number of other shares of Common Stock beneficially owned by the Holder so as to thereafter permit the continued
conversion of this Debenture.

 

    	25

    	 

    

 

D.    (i) Interest on the principal amount
of this Debenture payable on an Interest Payment Date shall be due and payable, at the option of the Company, in its sole discretion,
in cash or in shares of Common Stock on the Interest Payment Date.

 

(ii) If the interest payable
hereunder is to be paid in cash, the Company shall make such payment on the Interest Payment Date.

 

(iii) If interest is to
be paid in Common Stock, the number of shares of Common Stock to be received shall be determined by dividing the dollar amount
of the interest by the Conversion Price in effect on the relevant Interest Payment Date (the “Total Interest Shares”),
and, subject to the following provisions of this Section 4(D), the Company shall issue such shares on the Interest Payment Date
(or, in connection with interest payable in connection with a conversion of this Debenture, simultaneously with the issuance of
the Conversion Shares for the principal of this Debenture then being converted).

 

(iv) At any time at least
five (5) Trading Days before a Scheduled Interest Payment Date or in a Conversion Notice, the Holder may give the Company a written
notice (an “Interest Shares Limit Notice”) specifying the limit as to the number of shares which may be issued to the
Holder on the relevant Interest Payment Date in order to comply with the provisions of Section 4(C) hereof (the “Interest
Shares Limit”).

 

(v) The provisions of Section
4(C) shall apply to the payment of interest in Common Stock on each Interest Payment Date. If the Company elects to pay the accrued
interest on such Interest Payment Date in Common Stock, but the Total Interest Shares exceed the Interest Shares Limit (such excess,
the “Excess Interest Shares”), the Company shall issue the Interest Shares Limit to the Holder as provided in clause
(iii) above, and the issuance of the Excess Interest Shares shall be deferred (without the accrual of any further interest on the
equivalent interest amount and without the requirement for the Company to pay such deferred interest in cash) until a date which
is ten (10) Trading Days after the Holder gives the Company written notice (an “Available Interest Shares Notice”)
that some or all of the Excess Interest Shares can then be issued to the Holder in a manner consistent with the provisions of Section
4(C) (the number of shares specified in the Available Interest Shares Notice, the “Available Interest Shares”). The
Available Interest Shares Notice shall include a computation supporting the Holder’s statement that the issuance of the Available
Interest Shares is consistent with the provisions of Section 4(C). If the Holder gives an Available Interest Shares Notice, the
Company shall issue to the Holder the Available Interest Shares on or before such tenth Trading Day, which issuance shall be deemed
the payment of the deferred accrued interest in an amount equal to the number of Available Interest Shares issued multiplied by
the Conversion Price in effect on the original Interest Payment Date (as such number of shares may be adjusted for certain capital
transactions, such as forward or reverse stock splits or stock dividends). The issuance of any remaining Excess Interest Shares
shall continue to be deferred until the Holder gives the Company another Available Interest Shares Notice. Nothing in this provision
shall affect (x) the accrual of interest on the unpaid principal of this Debenture with respect to periods after the relevant Interest
Payment Date in accordance with the other provisions of this Debenture or (y) the provisions regarding the payment of interest
on the unpaid principal of this Debenture on subsequent Interest Payment Dates in accordance with the other provisions of this
Debenture and of this Section 4(D)(v).

 

    	26

    	 

    

 

E.    Anything in the other provisions
of this Debenture or any of the other Transaction Agreements to the contrary notwithstanding, the Company shall not have the right
to prepay any or all of the outstanding principal of this Debenture, without the prior written consent of the Holder in each instance
(which consent may be withheld for any reason or no reason, in the sole discretion of the Holder).

 

F.    (i) The following provisions apply
to the issuances of Common Stock in payment of the amounts due under this Debenture, whether as principal or interest, as provided
in the preceding provisions of this Section 4.

 

(ii) No fractional shares
of Common Stock or scrip representing fractions of shares will be issued on conversion, but the number of shares issuable shall
be rounded to the nearest whole share.

 

(iii) All shares issuable
with respect to a Conversion Date or an Interest Payment Date shall be deemed “Conversion Shares” for all purposes
of this Debenture and the other Transaction Agreements. Certificates representing the relevant Conversion Shares (“Conversion
Certificates”) will be delivered to the Holder at the address specified in the relevant Notice of Conversion (and if none,
the Holder’s the Holder’s address for notices as contemplated by the Securities Purchase Agreement, which address the
Holder may change from time to time in the manner provided therein), via express courier, by electronic transfer or otherwise after
the relevant Conversion Date. The Holder shall be deemed to be the holder of the shares issuable to it in accordance with the relevant
provisions of this Debenture on the Conversion Date or Interest Payment Date, as the case may be.

 

G.    Except as may specified in a specific
provision of this Debenture, any payments under this Debenture shall be applied in the following order of priority: (i) first to
accrued but unpaid interest on this Debenture; and (ii) then, to principal of this Debenture.

 

H.    The Company hereby agrees that, at
all times while any principal of this Debenture is outstanding, there shall be reserved for issuance upon conversion of the then
outstanding principal of this Debenture, a number of shares of its Common Stock equal to the shares which would be issuable on
conversion of such outstanding principal. For the purposes of such calculations, the Company should assume that the outstanding
principal of this Debenture was exercisable in full at any time, without regard to any restrictions which might limit the Holder’s
right to convert all or any portion of this Debenture held by the Holder.

 

5.    Subject to the terms of the Securities
Purchase Agreement, no provision of this Debenture shall alter or impair the obligation of the Company, which is absolute and unconditional,
to pay the principal of, and interest on, this Debenture at the time, place, and rate, and in the coin or currency or where contemplated
herein in shares of its Common Stock, as applicable, as herein prescribed. This Debenture and all other Debentures now or hereafter
issued of similar terms are direct obligations of the Company.

 

6.    No recourse shall be had for the
payment of the principal of, or the interest on, this Debenture, or for any claim based hereon, or otherwise in respect hereof
against any incorporator, shareholder, officer or director, as such, past, present or future, of the Company or any successor corporation,
whether by virtue of any constitution, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise,
all such liability being, by the acceptance hereof and as part of the consideration for the issue hereof, expressly waived and
released.

 

    	27

    	 

    

 

7.    All payments contemplated hereby
to be made “in cash” shall be made in immediately available good funds of United States of America currency by wire
transfer to an account designated in writing by the Holder to the Company (which account may be changed by notice similarly given).
All payments of cash and each delivery of shares of Common Stock issuable to the Holder as contemplated hereby shall be made to
the Holder at the address last appearing on the Debenture Register of the Company as designated in writing by the Holder from time
to time; except that the Holder can designate, by notice to the Company, a different delivery address for any one or more specific
payments or deliveries.

 

8.    If, for as long as this Debenture
remains outstanding, the Company enters into a merger (other than where the Company is the surviving entity) or consolidation with
another corporation or other entity or a sale or transfer of all or substantially all of the assets of the Company to another person
(collectively, a "Sale"), the Company will require, in the agreements reflecting such transaction, that the surviving
entity expressly assume the obligations of the Company hereunder. Notwithstanding the foregoing, if the Company enters into a Sale
and the holders of the Common Stock are entitled to receive stock, securities or property in respect of or in exchange for Common
Stock, then as a condition of such Sale, the Company and any such successor, purchaser or transferee will agree that the Debenture
may thereafter be converted on the terms and subject to the conditions set forth above into the kind and amount of stock, securities
or property receivable upon such merger, consolidation, sale or transfer by a holder of the number of shares of Common Stock into
which this Debenture might have been converted immediately before such merger, consolidation, sale or transfer, subject to adjustments
which shall be as nearly equivalent as may be practicable. In the event of any such proposed Sale, (i) the Holder hereof shall
have the right to convert by delivering a Notice of Conversion to the Company within fifteen (15) days of receipt of notice of
such Sale from the Company. This provision is an exception to the provisions of Section 4(C) hereof.

 

9.    If, at any time while any portion
of this Debenture remains outstanding, the Company spins off or otherwise divests itself of a part of its business or operations
or disposes of all or of a part of its assets in a transaction (the “Spin Off”) in which the Company, in addition to
or in lieu of any other compensation received and retained by the Company for such business, operations or assets, causes securities
of another entity (the “Spin Off Securities”) to be issued to security holders of the Company, the Company shall cause
(i) to be reserved Spin Off Securities equal to the number thereof which would have been issued to the Holder had all of the Outstanding
Debentures (as defined below) been converted as of the close of business on the Trading Day immediately before the Record Date
(as defined below), as determined without regard to the provisions of Section 4(C) hereof (the “Reserved Spin Off Shares”),
and (ii) to be issued to the Holder on the conversion of all or any of the Outstanding Debentures, such amount of the Reserved
Spin Off Shares equal to (x) the Reserved Spin Off Shares multiplied by (y) a fraction, of which (I) the numerator is the principal
amount of the Outstanding Debentures then being converted, and (II) the denominator is the principal amount of the Outstanding
Debentures. The term “Outstanding Debentures” means this Debenture to the extent outstanding on the record date (the
“Record Date”) for determining the amount and number of Spin Off Securities to be issued to security holders of the
Company.

 

    	28

    	 

    

 

10.  If, at any time while any portion
of this Debenture remains outstanding, the Company effectuates a stock split or reverse stock split of its Common Stock or issues
a dividend on its Common Stock consisting of shares of Common Stock, the prices used in determining the Conversion Price from dates
prior to such action and any other fixed amounts calculated as contemplated hereby shall be equitably adjusted to reflect such
action.

 

11.  The Holder of the Debenture, by
acceptance hereof, agrees that this Debenture is being acquired for investment and that such Holder will not offer, sell or otherwise
dispose of this Debenture or the shares of Common Stock issuable upon conversion thereof except under circumstances which will
not result in a violation of the Act or any applicable state Blue Sky or foreign laws or similar laws relating to the sale of securities.

 

12.  This Debenture
shall be governed by and construed in accordance with the laws of the State of New York for contracts to be wholly performed
in such state and without giving effect to the principles thereof regarding the conflict of laws. Each of the parties
consents to the exclusive jurisdiction of the federal courts whose districts encompass any part of the County of New York or
the state courts of the State of New York sitting in the County of New York in connection with any dispute arising under this
Debenture and hereby waives, to the maximum extent permitted by law, any objection, including any objection based on forum
non coveniens, to the bringing of any such proceeding in such jurisdictions. To the extent determined by such court, the
Company shall reimburse the Holder for any reasonable legal fees and disbursements incurred by the Holder in enforcement of
or protection of any of its rights under any of this Debenture.

 

13. JURY TRIAL WAIVER.  Each
of the Company and the Holder hereby waives a trial by jury in any action, proceeding or counterclaim brought by either of the
Parties hereto against the other in respect of any matter arising out of or in connection with this Debenture.

 

14. A.   (i) The term “Change
in Control” means (a) any transaction following the date hereof by which any person, group or entity (other than a director,
former director or officer of the Company as of the date hereof, the Lead Investor or any of their Affiliates) shall beneficially
own more than 50% of the Voting Rights (as defined below) of the Company; provided, however, that any Voting Rights acquired from
the Lead Investor or any of its Affiliates shall be excluded from the calculation of Voting Rights, or (b) any merger, consolidation
or sale of substantially all of the property or assets of the Company with or to an entity that was not under the control of the
Company prior to and, if relevant, after such merger, consolidation or sale.

 

(ii) The term “Voting
Rights” means (a) the right to vote, by ownership of securities, by contract or otherwise, for directors of the Company or
(b) the right, by contract, to direct or cause the direction of the management of the Company (other than by reason of being the
holder of the Company’s securities).

 

    	29

    	 

    

 

B.  If, at any time while this Debenture
is outstanding, there is a Change in Control, the Holder will have the right at any time thereafter, by written notice to the Company
(the “Change in Control Demand Notice”), to (i) convert any or all of the then outstanding Debenture pursuant to the
provisions of Section 4 hereof (except that such conversion shall be an exception to the provisions of Section 4(C) hereof), or,
(ii) to the extent the Holder does not convert any portion of the Debenture, demand payment in full of the outstanding principal
of this Debenture together with all accrued but unpaid interest thereon. If the Holder demands any such payment, the Company will
be obligated to pay such amount (with interest calculated through the actual date of payment) by the date which is three (3) Trading
Days after the Company’s receipt of the Change in Control Demand Notice.

 

15.   A.  The term "Event of Default"
means the occurrence of any one or more of the following events:

 

(i)The
Company shall default in the payment of principal or interest on this Debenture or any other amount due hereunder when due; or

 

(ii)Any
of the representations or warranties made by the Company herein or in the Securities Purchase Agreement in connection with the
execution and delivery of this Debenture or the Securities Purchase Agreement shall be false or misleading in any material respect
at the time made; or

 

(iii)Subject
to the terms of the Securities Purchase Agreement, the Company fails to authorize or to cause its Transfer Agent to issue shares
of Common Stock upon exercise by the Holder of the conversion rights of the Holder in accordance with the terms of this Debenture,
and such failure shall continue uncured for a period of five (5) Trading Days; or

 

(iv)The
Company shall fail to perform or observe, in any material respect, (a) any other covenant, term, provision, condition, agreement
or obligation of any Debenture (other than a failure to pay money) or (b) any other covenant, term, provision, condition, agreement
or obligation of the Company under the Securities Purchase Agreement (each failure contemplated by this clause (iv), a “Failure”)
and such Failure, if capable of being cured, shall continue uncured for a period of ten (10) days after the earlier of (x) the
Holder’s receipt of written notice from the Company of such failure or (y) the Company’s receipt of written notice
from the Holder of such failure; or

 

(v)The
Company shall enter into a New Transaction during the New Transaction Period without the consent of the Lead Investor; or

 

    	30

    	 

    

 

(vi)The
Company shall (x) admit in writing its inability to pay its debts generally as they mature; (y) make an assignment for the benefit
of creditors or commence proceedings for its dissolution; or (z) apply for or consent to the appointment of a trustee, liquidator
or receiver for its or for a substantial part of its property or business; or

 

(vii)A
trustee, liquidator or receiver shall be appointed for the Company or for a substantial part of its property or business without
its consent and shall not be discharged within sixty (60) days after such appointment; or

 

(viii)Any
governmental agency or any court of competent jurisdiction at the instance of any governmental agency shall assume custody or control
of the whole or any substantial portion of the properties or assets of the Company and shall not be dismissed within sixty (60)
days thereafter; or

 

(ix)Any
money judgment in excess of One Hundred Thousand ($100,000) Dollars in the aggregate shall be entered or filed against the Company
or any writ or warrant of attachment, or similar process shall be entered or filed against the Company or any of its properties
or other assets and shall remain unpaid, unvacated, unbonded or unstayed for a period of thirty (30) days or in any event no later
than five (5) days prior to the date of any proposed sale thereunder; or

 

(x)Bankruptcy,
reorganization, insolvency or liquidation proceedings or other proceedings for relief under any bankruptcy law or any law for the
relief of debtors shall be instituted by or against the Company and, if instituted against the Company, shall not be dismissed
within sixty (60) days after such institution or the Company shall by any action or answer approve of, consent to, or acquiesce
in any such proceedings or admit the material allegations of, or default in answering a petition filed in any such proceeding.

 

B.  Notwithstanding the terms set forth
in the first paragraph of this Debenture, if an Event of Default shall have occurred and is continuing, then, unless and until
such Event of Default shall have been cured or waived in writing by the Lead Investor (which waiver shall not be deemed to be a
waiver of any subsequent default),

 

(i) the unpaid amount of this Debenture,
computed as of such date, will bear interest at the rate (the “Default Rate”) equal to five percent (5.0%) per annum
from the date of the Event of Default to until and including the date actually paid; and

 

(ii) at the option of the Lead Investor
at any time thereafter, the Lead Investor may, (a) by written notice to the Company, declare the entire unpaid principal balance
of this Debenture, together with all interest accrued hereon, plus all fees and expenses, due and payable, and thereupon, the same
shall be accelerated and so due and payable, without presentment, demand, protest, or other notice, all of which are hereby expressly
unconditionally and irrevocably waived by the Company; provided, however, that upon the occurrence of an Event of Default described
in Sections 15(A)(vi), (vii), (viii) and (x), the outstanding principal balance and accrued interest hereunder, shall be immediately
and automatically due and payable, and/or (b) exercise or otherwise enforce any one or more of the Holder’s rights, powers,
privileges, remedies and interests under this Debenture or other Transaction Agreements or applicable law.

 

    	31

    	 

    

 

C.  The provisions of Section
4(G) shall apply to any payments made by or on behalf of the Company following the occurrence of an Event of Default and the application
of the relevant foregoing provisions of this Section 15.

 

16. No course of delay on the part of
the Holder shall operate as a waiver thereof or otherwise prejudice the right of the Holder. No remedy conferred hereby shall be
exclusive of any other remedy referred to herein or now or hereafter available at law, in equity, by statute or otherwise.

 

17. Nothing contained in this Debenture
shall be construed as conferring upon the Holder the right to vote or to receive dividends or to consent or receive notice as a
shareholder in respect of any meeting of shareholders or any rights whatsoever as a shareholder of the Company, unless and to the
extent converted in accordance with the terms hereof.

 

18. Any notice required or permitted
hereunder shall be given in manner provided in the Section headed “NOTICES” in the Securities Purchase Agreement, the
terms of which are incorporated herein by reference.

 

19. Upon receipt by the Company of evidence
satisfactory to it of the loss, theft, destruction or mutilation of this Debenture, and (in the case of loss, theft or destruction)
receipt of reasonably satisfactory indemnification, and (in the case of mutilation) upon surrender and cancellation of this Debenture,
the Company will execute and deliver a new Debenture of like tenor and date and any such lost, stolen, destroyed or mutilated Debenture
shall thereupon become void.

 

 

    	32

    	 

    

 

20. In the event for any reason, any
payment by or act of the Company or the Holder shall result in payment of interest which would exceed the limit authorized by or
be in violation of the law of the jurisdiction applicable to this Debenture, then ipso facto the obligation of the Company
to pay interest or perform such act or requirement shall be reduced to the limit authorized under such law, so that in no event
shall the Company be obligated to pay any such interest, perform any such act or be bound by any requirement which would result
in the payment of interest in excess of the limit so authorized. In the event any payment by or act of the Company shall result
in the extraction of a rate of interest in excess of a sum which is lawfully collectible as interest, then such amount (to the
extent of such excess not returned to the Company) shall, without further agreement or notice between or by the Company or the
Holder, be deemed applied to the payment of principal, if any, hereunder immediately upon receipt of such excess funds by the Holder,
with the same force and effect as though the Company had specifically designated such sums to be so applied to principal and the
Holder had agreed to accept such sums as an interest-free prepayment of this Debenture. If any part of such excess remains after
the principal has been paid in full, whether by the provisions of the preceding sentences of this Section or otherwise, such excess
shall be deemed to be an interest-free loan from the Company to the Holder, which loan shall be payable immediately upon demand
by the Company. The provisions of this Section shall control every other provision of this Debenture.

 

IN WITNESS WHEREOF, the
Company has caused this instrument to be duly executed by an officer thereunto duly authorized.

 

Dated: June 24, 2014

 

	 	INFINITY AUGMENTED REALITY, INC.
	 	 	 
	 	By:	/s/ Ortal Zanzury
	 	 	Ortal Zanzury
	 	 	 
	 	Title:	CFO

 

    	33

    	 

    

 

EXHIBIT A

 

INFINITY AUGMENTED REALITY, INC.

 

NOTICE OF CONVERSION

OF

1.200% CONVERTIBLE DEBENTURE SERIES A-14 DUE
June 23, 2019

 

(To be Executed by the Registered Holder in
Order to Convert the Debenture)

 

TO:         INFINITY AUGMENTED REALITY, INC.VIA
FAX:

 

Attn: Chief Executive Officer

 

 

FROM: _________________________________________________________
(“Holder”)

 

DATE: _______________________________________________
(the “Conversion Date”)

 

		RE:	Conversion of $_________________ principal amount (the “Converted Debenture”) of the
1.200% Convertible Debenture Series A-14 Due _______________, No. A-14-03 (the “Debenture”) of INFINITY AUGMENTED REALITY,
INC. (the “Company”) into ______________________ shares (the “Principal Conversion Shares”) of Common Stock
(defined below)

  

The captioned Holder hereby
gives notice to the Company, pursuant to the Debenture of INFINITY AUGMENTED REALITY, INC. that the Holder elects to convert the
Converted Debenture into fully paid and non-assessable shares of Common Stock, $0.00001 par value (the “Common Stock”),
of the Company as of the Conversion Date specified above. Said conversion shall be based on the Conversion Price of:

 

___$0.25

 

___pursuant
to the provisions of Section 10 of the Debenture, $___.___

 

    	34

    	 

    

 

As contemplated by the
Debenture, the Company should also pay all accrued but unpaid interest on the Converted Debenture to the Holder. Such interest
can be paid, in the discretion of the Company, either in shares of the Company’s stock or in cash.

 

– If the Company
elects to pay such interest in shares, such payment should be for ______________ shares of Common Stock (“Interest Conversion
Shares”), representing such interest amount converted at the Conversion Price specified above. Such Interest Conversion Shares
should be delivered together with the Principal Conversion Shares.

 

[Holder should check one of
the following two boxes and, if relevant, fill in the blank.]

 

__The Holder confirms that the Company’s
issuance of all of the Interest Conversion Shares will be consistent with the provisions of Section 4(C).

 

___The Holder hereby gives written
notice to the Company* that the maximum number of Interest Conversion Shares which may be issued to the Holder at this time is
_____________ shares, which shares are the Interest Shares Limit referred to in Section 4(D) of the Debenture.. Reference is made
to Section 4(D) of the Debenture regarding the issuance of the Excess Interest Shares.

 

*THIS NOTICE IS AN INTEREST
SHARES LIMIT NOTICE REFERRED TO IN SECTION 4(D) OF THE DEBENTURE.

  

[Balance of page intentionally left blank]

 

    	35

    	 

    

 

– If the Company
elects to pay such interest in cash, such payment should be paid as provided in the Debenture by wire transfer as follows:1

 

___________________________________

 

___________________________________

 

___________________________________

 

Based on the relevant Conversion
Prices, the number of Principal Conversion Shares plus any Interest Conversion Shares (collectively, “Conversion Shares”)
indicated above should be issued in the following name(s):

 

Name and Record Address                                             Conversion Shares

_______________________________                    _______________

_______________________________                    _______________

_______________________________                     _______________

 

It is the intention of
the Holder to comply with the provisions of Section 4(C) of the Debenture regarding certain limits on the Holder's right to convert
thereunder. The Holder believes and represents to the Company that this conversion complies with the provisions of said Section
4(C). Nonetheless, to the extent that, pursuant to the conversion effected hereby, the Holder would have more shares than permitted
under said Section, this notice should be amended and revised, ab initio, to refer to the conversion which would result in the
issuance of shares consistent with such provision. Any conversion above such amount is hereby deemed void and revoked.

 

As contemplated by the
Debenture, this Notice of Conversion is being sent by facsimile to the telecopier number and officer indicated above.

 

If this Notice of Conversion
represents the full conversion of the outstanding balance of the Converted Debenture, the Holder either (1) has previously surrendered
the Converted Debenture to the Company or (2) will surrender (or cause to be surrendered) the Converted Debenture to the Company
at the address indicated above by express courier within five (5) Trading Days after delivery or facsimile transmission of this
Notice of Conversion.

 

 

1Information should
include the following:

 

All Wires:

(1) Bank Name

(2) Bank Address (including
street, city, state)

(3) ABA or Wire Routing
No.

(4) Account Name

(5) Account Number

 

If Wire is going to International (Non-US)
Bank, all of the above plus:

(6) SWIFT Number

 

    	36

    	 

    

 

The certificates representing the Conversion
Shares should be transmitted by the Company to the Holder

 

�      via
express courier, or

 

�      by
electronic transfer

 

to:

 

           _____________________________________

           _____________________________________

           _____________________________________

 

	 	_____________________________________

(Print name of Holder)

 

		By:__________________________________

		(Signature of Authorized Person)

 

	 	_____________________________________

		(Printed Name and Title)

 

    	37

    	 

    

 

FORM OF WARRANT

 

THESE SECURITIES HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD OR OFFERED FOR SALE IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES OR AN OPINION OF COUNSEL OR OTHER EVIDENCE ACCEPTABLE TO THE
COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.

 

No. A-14-03

 

INFINITY AUGMENTED
REALITY, INC.

 

COMMON STOCK PURCHASE WARRANT

CLASS A-14

 

1.       Issuance and Certain Definitions.

 

           1.1   Issuance. In
consideration of good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged by 
INFINITY AUGMENTED REALITY, INC., a Nevada corporation (the “Company”), ALS
Capital Ventures LLC  or registered assigns (the “Holder”) is hereby granted the right to purchase
at any time, on or after the Issue Date (as defined below) until 5:00 P.M., New York City time, on June 23, 2019 (the “Expiration
Date”), four million nine hundred and forty four thousand (4,944,000) fully paid and nonassessable shares of the Company’s
Common Stock, $0.00001 par value per share (the “Common Stock”), at an initial exercise price per share (the “Exercise
Price”) of $0.50 per share, subject to further adjustment as set forth herein. This Warrant is being issued pursuant to the
terms of that certain Securities Purchase Agreement, dated as of June 24, 2014 (the “Securities Purchase Agreement”),
to which the Company and Holder (or Holder’s predecessor in interest) are parties. Capitalized terms not otherwise defined
herein shall have the meanings ascribed to them in the Securities Purchase Agreement.

 

           1.2   Certain Definitions.  As
used herein, each of the following terms has the meaning set forth below, unless the context otherwise requires:

 

“Sale Price” means the 4:00
P.M. closing sale price of the Common Stock on the Principal Trading Market on the relevant Trading Day(s), as reported by the
Reporting Service for the relevant date.

 

“Reporting Service” means
Bloomberg LP or if that service is not then reporting the relevant information regarding the Common Stock, a comparable reporting
service of national reputation selected by the Lead Investor and reasonably acceptable to the Company.

 

    	38

    	 

    

 

“Change in Control” means
(a) any transaction following the date hereof by which any person, group or entity (other than a director, former director or officer
of the Company as of the date hereof, the Lead Investor or any of their Affiliates) shall beneficially own more than 50% of the
Voting Rights of the Company; provided, however, that any Voting Rights acquired from the Lead Investor or any of its Affiliates
shall be excluded from the calculation of Voting Rights, or (b) any merger, consolidation or sale of substantially all of the property
or assets of the Company with or to an entity that was not under the control of the Company prior to and, if relevant, after such
merger, consolidation or sale.

 

“Voting Rights” means (a)
the right to vote, by ownership of securities, by contract or otherwise, for directors of the Company or (b) the right, by contract,
to direct or cause the direction of the management of the Company (other than by reason of being the holder of the Company’s
securities).

 

2.       Exercise of Warrants.

 

           2.1   General.

 

           (a) This Warrant is exercisable
in whole or in part at any time and from time to time commencing on the Issue Date. Such exercise shall be effectuated by submitting
to the Company (either by delivery to the Company or by facsimile transmission as provided in Section 7 hereof) a completed and
duly executed Notice of Exercise (substantially in the form attached to this Warrant Certificate) as provided in the Notice of
Exercise (or revised by notice given by the Company as contemplated by the Section headed “NOTICES” in the Securities
Purchase Agreement). The date such Notice of Exercise is faxed to the Company shall be the “Exercise Date,” provided
that, if such exercise represents the full exercise of the outstanding balance of the Warrant, the Holder of this Warrant tenders
to the Company this Warrant Certificate (or an affidavit of lost warrant certificate in form reasonably satisfactory to the Company)
within five (5) Trading Days thereafter. The Notice of Exercise shall be executed by the Holder of this Warrant and shall indicate
(i) the number of shares then being purchased pursuant to such exercise (the “Exercise Shares”) and (ii) whether the
exercise is a cashless exercise.

 

           (b) If the Notice of Exercise
form elects a “cashless” exercise, the Holder shall thereby be entitled to receive a number of shares of Common Stock
equal to (w) the excess of the Current Market Value (as defined below) over the total cash exercise price for all of the Exercise
Shares, divided by (x) the Market Price of the Common Stock (as defined below). For the purposes of this Warrant, the terms (y)
“Current Market Value” shall mean an amount equal to the Market Price of the Common Stock, multiplied by the Exercise
Shares, and (z) “Market Price of the Common Stock” shall mean the average Sale Price of the Common Stock for the three
(3) Trading Days ending on the Trading Day immediately prior to the Exercise Date.

 

    	39

    	 

    

 

           (c) If the Holder provides
on the Notice of Exercise form that the Holder has elected a “cash” exercise, the Exercise Price per share of Common
Stock for the shares then being exercised shall be payable, at the election of the Holder, in cash or by certified or official
bank check or by wire transfer in accordance with instructions provided by the Company at the request of the Holder.

 

           (d) Upon the appropriate
payment, if any, of the Exercise Price for the shares of Common Stock purchased, together with the surrender of this Warrant Certificate
(if required), the Holder shall be entitled to receive a certificate or certificates for the shares of Common Stock so purchased.
The Company shall deliver such certificates representing the Warrant Shares to the Holder at the address specified in the relevant
Notice of Exercise (and if none, the Holder’s the Holder’s address for notices as contemplated by the Securities Purchase
Agreement, which address the Holder may change from time to time in the manner provided therein), via express courier, by electronic
transfer or otherwise after (i) with respect to a “cashless exercise,” the Exercise Date, or, (ii) with respect to
a “cash” exercise, the later of the Exercise Date or the date the payment of the Exercise Price for the relevant Warrant
Shares is received by the Company. The Holder shall be deemed to be the holder of the shares issuable to it in accordance with
the provisions of this Section 2.1 on the Exercise Date, or, in the case of a “cash” exercise, the later of the Exercise
Date or the date the payment of the Exercise Price for the relevant Warrant Shares is received by the Company.

 

          2.2   Limitation
on Exercise. Notwithstanding the provisions of this Warrant, the Securities Purchase Agreement or any of the other Transaction
Agreements, in no event (except (i) as specifically provided in this Warrant as an exception to this provision, (ii) during the
forty-five (45) day period prior to the Expiration Date, (iii) if, within thirty (30) days prior to the Holder’s submission
of a Conversion Notice, the Holder received a written notice from the Company regarding the occurrence of Change of Control, or
(iv) while there is outstanding a tender offer for any or all of the shares of the Company’s Common Stock) shall the Holder
be entitled to exercise this Warrant, or shall the Company have the obligation to issue shares upon such exercise of all or any
portion of this Warrant to the extent that, after such exercise the sum of (1) the number of shares of Common Stock beneficially
owned by the Holder and its affiliates (other than shares of Common Stock which may be deemed beneficially owned through the ownership
of the unexercised portion of the Warrants or other rights to purchase Common Stock or through the ownership of the unconverted
portion of convertible securities), and (2) the number of shares of Common Stock issuable upon the exercise of the Warrants with
respect to which the determination of this proviso is being made, would result in beneficial ownership by the Holder and its affiliates
of more than 9.99% of the outstanding shares of Common Stock (after taking into account the shares to be issued to the Holder
upon such exercise). For purposes of the proviso to the immediately preceding sentence, beneficial ownership shall be determined
in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended (the “1934 Act”), except as otherwise
provided in clause (1) of such sentence. Nothing herein shall preclude the Holder from disposing of a sufficient number of other
shares of Common Stock beneficially owned by the Holder so as to thereafter permit the continued exercise of this Warrant.

 

    	40

    	 

    

 

3.       Reservation of Shares. The
Company hereby agrees that, at all times during the term of this Warrant, there shall be reserved for issuance upon exercise of
this Warrant, a number of shares of its Common Stock equal to the then unexercised and unexpired portion of this Warrant. For the
purposes of such calculations, the Company should assume that the outstanding portion of this Warrant was exercisable in full at
any time, without regard to any restrictions which might limit the Holder’s right to exercise all or any portion of this
Warrant held by the Holder.

 

4.       Mutilation or Loss of Warrant.
Upon receipt by the Company of evidence satisfactory to it of the loss, theft, destruction or mutilation of this Warrant, and (in
the case of loss, theft or destruction) receipt of reasonably satisfactory indemnification, and (in the case of mutilation) upon
surrender and cancellation of this Warrant, the Company will execute and deliver a new Warrant of like tenor and date and any such
lost, stolen, destroyed or mutilated Warrant shall thereupon become void.

 

5.       Protection Against Dilution and
Other Adjustments.

 

           5.1  Capital Adjustments. In case
of any stock split or reverse stock split, stock dividend, reclassification of the Common Stock, recapitalization, merger or consolidation
(where the Company is not the surviving entity), the provisions of this Section 5 shall be applied as if such capital adjustment
event had occurred immediately prior to the date of this Warrant and the original Exercise Price had been fairly allocated to the
stock resulting from such capital adjustment; and in other respects the provisions of this Section shall be applied in a fair,
equitable and reasonable manner so as to give effect, as nearly as may be, to the purposes hereof. A rights offering to stockholders
shall be deemed a stock dividend to the extent of the bargain purchase element of the rights. The Company will not effect any consolidation
or merger, unless prior to the consummation thereof, the successor or acquiring entity (if other than the Company) and, if an entity
different from the successor or acquiring entity, the entity whose capital stock or assets the holders of the Common Stock of the
Company are entitled to receive as a result of such consolidation or merger assumes by written instrument the obligations under
this Warrant (including under this Section 5) and the obligations to deliver to the holder of this Warrant such shares of stock,
securities or assets as, in accordance with the foregoing provisions, the holder may be entitled to acquire.

 

           5.2  Adjustment for Spin Off.
If, for any reason, prior to the exercise of this Warrant in full, the Company spins off or otherwise divests itself of a part
of its business or operations or disposes all or of a part of its assets in a transaction (the “Spin Off”) in which
the Company does not receive compensation for such business, operations or assets, but causes securities of another entity (the
“Spin Off Securities”) to be issued to security holders of the Company, then the Company shall cause (i) to be reserved
Spin Off Securities equal to the number of shares issuable to the Holder had all of the Outstanding Warrants (as defined below)
been exercised as of the close of business on the Trading Day immediately before the Record Date (as defined below), as determined
without regard to the provisions of Section 2.2 hereof (the “Reserved Spin Off Shares”). and (ii) to be issued to
the Holder on the exercise of all or any of the Outstanding Warrants, such amount of the Reserved Spin Off Shares equal to (x)
the Reserved Spin Off Shares, multiplied by (y) a fraction, of which (I) the numerator is the amount of the Outstanding Warrants
then being exercised, and (II) the denominator is the amount of the Outstanding Warrants. The term “Outstanding Warrants”
means this Warrant to the extent unexercised and unexpired on the record date (the “Record Date”) for determining
the amount and number of Spin Off Securities to be issued to security holders of the Company.

 

    	41

    	 

    

 

6.      Rights of the Holder. The
Holder shall not, by virtue hereof, be entitled to any rights of a stockholder in the Company, either at law or equity, and the
rights of the Holder are limited to those expressed in this Warrant and are not enforceable against the Company except to the extent
set forth herein.

 

7.      Transfer to Comply with the Securities
Act. This Warrant has not been registered under the Securities Act of 1933, as amended, (the “1933 Act”) and has
been issued to the Holder for investment and not with a view to the distribution of either the Warrant or the Warrant Shares. Neither
this Warrant nor any of the Warrant Shares or any other security issued or issuable upon exercise of this Warrant may be sold,
transferred, pledged or hypothecated in the absence of an effective registration statement under the 1933 Act relating to such
security or an opinion of counsel satisfactory to the Company that registration is not required under the 1933 Act. Each certificate
for the Warrant, the Warrant Shares and any other security issued or issuable upon exercise of this Warrant shall contain a legend
on the face thereof, in form and substance satisfactory to counsel for the Company, setting forth the restrictions on transfer
contained in this Section.

 

8.      Notices. Any notice required
or permitted hereunder shall be given in manner provided in the Section headed “NOTICES” in the Securities Purchase
Agreement, the terms of which are incorporated herein by reference.

 

9.      Supplements and Amendments; Whole
Agreement. This Warrant may be amended or supplemented only by an instrument in writing signed by the parties hereto. This
Warrant contains the full understanding of the parties hereto with respect to the subject matter hereof and thereof and there are
no representations, warranties, agreements or understandings other than expressly contained herein and therein.

 

10.     Governing Law. This Warrant
shall be deemed to be a contract made under the laws of the State of New York for contracts to be wholly performed in such state
and without giving effect to the principles thereof regarding the conflict of laws. Each of the parties consents to the jurisdiction
of the federal courts whose districts encompass any part of the County of New York or the state courts of the State of New York
sitting in the County of New York in connection with any dispute arising under this Warrant and hereby waives, to the maximum extent
permitted by law, any objection, including any objection based on forum non conveniens, to the bringing of any such proceeding
in such jurisdictions. To the extent determined by such court, the Company shall reimburse the Holder for any reasonable legal
fees and disbursements incurred by the Holder in enforcement of or protection of any of its rights under any of the Transaction
Agreements.

 

11.    JURY TRIAL WAIVER.
The Company and the Holder hereby waive a trial by jury in any action, proceeding or counterclaim brought by either of the Parties
hereto against the other in respect of any matter arising out or in connection with this Warrant.

 

    	42

    	 

    

 

12.    Remedies. The Company stipulates
that the remedies at law of the Holder of this Warrant in the event of any default or threatened default by the Company in the
performance of or compliance with any of the terms of this Warrant are not and will not be adequate and that, to the fullest extent
permitted by law, such terms may be specifically enforced by a decree for the specific performance of any agreement contained herein
or by an injunction against a violation of any of the terms hereof or otherwise.

 

13.    Counterparts. This Warrant
may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to be an original,
and all such counterparts shall together constitute but one and the same instrument.

 

[Balance of page intentionally left blank]

 

    	43

    	 

    

 

14.    Descriptive Headings. Descriptive
headings of the several Sections of this Warrant are inserted for convenience only and shall not control or affect the meaning
or construction of any of the provisions hereof.

 

IN WITNESS WHEREOF, the
Company has caused this instrument to be duly executed by an officer thereunto duly authorized.

 

	Dated: June 24, 2014	 	 
	 	 	 
	 	INFINITY AUGMENTED REALITY, INC.
	 	 	 
	 	By:	/s/ Ortal
    Zanzury
	 	 	Ortal Zanzury
	 	 	 
	 	Title:	CFO

 

    	44

    	 

    

 

NOTICE OF EXERCISE OF WARRANT

 

	TO:	INFINITY AUGMENTED REALITY, INC.	VIA FAX:
	 	Habarzel 27 Tel Aviv, Israel	 
	 	Attn: Chief Executive Officer	 

  

The undersigned hereby
irrevocably elects to exercise the right, represented by the Common Stock Purchase Warrant Class A-14, No. A-14-03, dated as of
_________________, to purchase ___________ shares (the “Exercise Shares”) of the Common Stock, $0.00001 par value
(“Common Stock”), of INFINITY AUGMENTED REALITY, INC. and tenders herewith payment in accordance with Section
2 of said Common Stock Purchase Warrant, as follows:

�
CASH:$   = (Exercise Price x Exercise Shares)

 

Payment is being made by:

� enclosed check

�
wire transfer

�
other  

�CASHLESS
EXERCISE:

 

Net number of Warrant Shares to be issued to Holder :_________*

 

* based on: Current Market Value - (Exercise Price x
Exercise Shares)

                                              Market Price of Common Stock

 where:

Market Price of Common Stock [“MP”]                                =            $_______________

Current Market Value [MP x Exercise Shares]                      =            $_______________

 

It is the intention of
the Holder to comply with the provisions of Section 2.2 of the Warrant regarding certain limits on the Holder's right to exercise
thereunder. The Holder believes and represents to the Company that this exercise complies with the provisions of said Section
2.2. Nonetheless, to the extent that, pursuant to the exercise effected hereby, the Holder would have more shares than permitted
under said Section, this notice should be amended and revised, ab initio, to refer to the exercise which would result in the issuance
of shares consistent with such provision. Any exercise above such amount is hereby deemed void and revoked.

 

As contemplated by the
Warrant, this Notice of Exercise is being sent by facsimile to the telecopier number and officer indicated above.

 

    	45

    	 

    

 

If this Notice of Exercise
represents the full exercise of the outstanding balance of the Warrant, the Holder either (1) has previously surrendered the Warrant
to the Company or (2) will surrender (or cause to be surrendered) the Warrant to the Company at the address indicated above by
express courier within five (5) Trading Days after delivery or facsimile transmission of this Notice of Exercise.

 

The certificates representing
the Warrant Shares should be transmitted by the Company to the Holder

 

�via express
courier, or

 

�by electronic
transfer

 

after receipt of this Notice of Exercise (by
facsimile transmission or otherwise) or, if relevant, the receipt of the cash purchase price for the Exercise Shares, whichever
is later, to: 

 

_____________________________________

_____________________________________

_____________________________________ 

 

 

Dated: ______________________

 

 

____________________________

[Name of Holder]

 

By: _________________________

 

 

    	46

    	 

    

 

ANNEX III

TO

SECURITIES PURCHASE AGREEMENT

 

ADDRESSES

 

	COMPANY:	At the address set forth at the head of the Securities Purchase Agreement.
	 	Attn: President and Chief Executive Officer
	 	Telephone No.:972-72-2288390                                                                                   Telecopier No.:
	 	ortal@infinityar.com
	 	 
	 	with a copy to:
	 	 
	 	Pearl Cohen Zedek Latzer Baratz
	 	Attn: Benjamin Waltuch, Esq.
	 	1 Azrieli Center Round Tower, 18th Floor,
	 	Tel-Aviv 67021 Israel
	 	Telecopier No.  +972-3-607-3778
	 	 
	BUYER:	At the address set forth on the Buyer’s signature page of the Securities Purchase Agreement.

 

    	47

    	 

    

 

ANNEX IV

TO

SECURITIES PURCHASE AGREEMENT 

 

PURCHASE PRICE WIRE INSTRUCTIONS

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    	48

    	 

    

 

ANNEX VI

TO

SECURITIES PURCHASE AGREEMENT

 

DISCLOSURE ANNEX

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    	49

    	 

    

 

ANNEX VII-A

TO

SECURITIES PURCHASE
AGREEMENT

 

FORM OF CLOSING
CERTIFICATE 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

50

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