Document:

Exhibit 4.64

 

SECURITIES PURCHASE AGREEMENT

 

This SECURITIES
PURCHASE AGREEMENT (the “Agreement”), dated as of February 24, 2017, is by and among FreeSeas Inc., a corporation
incorporated and existing under the laws of the Republic of the Marshall Islands (the “Company”), and OAKMORE
OPPORUTNITY FUND I, LP, a Delaware limited partnership (the “Investor”).

 

RECITALS

 

A. The Company
and the Investor are executing and delivering this Agreement in reliance upon the exemption from securities registration afforded
by Section 4(a)(2) of the Securities Act of 1933, as amended (the “1933 Act”), and Rule 506 of Regulation D
(“Regulation D”) as promulgated by the United States Securities and Exchange Commission (the “SEC”)
under the 1933 Act.

 

B. The Company
has authorized the issuance of a convertible note in the original principal amount of $, in the form attached hereto as Exhibit
A (the “Note”), which Note shall be convertible into shares of Common Stock (as defined below) (as
converted, collectively, the “Conversion Shares”), in accordance with the terms of the Note.

 

C. The Investor
wishes to purchase, and the Company wishes to sell, upon the terms and conditions stated in this Agreement, the original principal
amount of the Note.

 

D. The Note is
entitled to interest, amortization payments and certain other amounts, which, at the option of the Company and subject to certain
conditions, may be paid in shares of Common Stock (the “Interest Shares”) or in cash.

 

E. The Note,
the Conversion Shares and the Interest Shares are collectively referred to herein as the “Securities.”

 

F. The parties
have agreed that the obligation to repay the Note shall be an unsecured obligation of the Company.

 

AGREEMENT

 

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

 

		1.	PURCHASE
                                         AND SALE OF NOTE. 

 

(a) Note.
Subject to the satisfaction (or waiver) of the conditions set forth in Sections 6 and 7 below, the Company shall issue and sell
to the Investor, and the Investor shall purchase from the Company on the Closing Date (as defined below), the Note.

     

     

    

 

(b) Closing.
The closing (the “Closing”) of the purchase of the Note by the Investor shall occur at the offices of Stacy
L. Sokol, Esq., 2029 Century Park East, Suite 900, Los Angeles, California 90067. The date and time of the Closing (the “Closing
Date”) shall be 10:00 a.m., New York time, on the first (1st) Business Day on which the conditions to the
Closing set forth in Sections 6 and 7 below are satisfied or waived (or such later date as is mutually agreed to by the Company
and the Investor). As used herein “Business Day” means any day other than a Saturday, Sunday or other day on
which commercial banks in New York, New York are authorized or required by law to remain closed.

 

(c) Purchase
Price. The purchase price for the Note to be purchased by the Investor (the “Purchase Price”) shall be
$50,000.00.

 

(d) Payment
of Purchase Price; Delivery of Note. On the Closing Date, (i) the Investor shall pay the Purchase Price to the Company for
the Note by wire transfer of immediately available funds in accordance with the Company’s written wire instructions (less
the amounts withheld pursuant to Section 4(g)) and (ii) the Company shall deliver to the Investor the Note duly executed on behalf
of the Company and registered in the name of the Investor or its designee.

 

		2.	INVESTOR’S
                                         REPRESENTATIONS AND WARRANTIES. 

 

The Investor represents
and warrants to the Company that:

 

(a) Organization;
Authority. The Investor is an entity duly organized, validly existing and in good standing under the laws of the jurisdiction
of its organization with the requisite power and authority to enter into and to consummate the transactions contemplated by the
Transaction Documents (as defined below) to which it is a party and otherwise to carry out its obligations hereunder and thereunder.

 

(b) No Public
Sale or Distribution. The Investor (i) is acquiring the Note, (ii) may acquire the Interest Shares in accordance with the
terms of the Note, and (iii) upon conversion of the Note, will acquire the Conversion Shares issuable upon conversion thereof
for its own account and not with a view towards, or for resale in connection with, the public sale or distribution thereof in
violation of applicable securities laws, except pursuant to sales registered or exempted under the 1933 Act; provided, however,
by making the representations herein, the Investor does not agree, or make any representation or warranty, to hold any of the
Securities for any minimum or other specific term and reserves the right to dispose of the Securities at any time in accordance
with or pursuant to a registration statement or an exemption under the 1933 Act. The Investor does not presently have any agreement
or understanding, directly or indirectly, with any Person to distribute any of the Securities in violation of applicable securities
laws.

 

(c) Accredited
Investor Status. Such Investor is an “accredited investor” as that term is defined in Rule 501(a) of Regulation
D.

 

(e) Reliance
on Exemptions. The Investor understands that the Securities are being offered and sold to it in reliance on specific exemptions
from the registration requirements of United States federal and state securities laws, that the offer and sale of the Securities
are intended to be exempt from the registration requirements of the 1933 Act pursuant to Rule 506 of Regulation D under the 1933
Act, and that the Company is relying in part upon the truth and accuracy of, and the Investor’s compliance with, the representations,
warranties, agreements, acknowledgments and understandings of such Investor set forth herein in order to determine the availability
of such exemptions and the eligibility of the Investor to acquire the Securities.

 

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(f) Information.
The Investor and its advisors, if any, have been furnished with all materials relating to the business, finances and operations
of the Company and materials relating to the offer and sale of the Securities which have been requested by the Investor. The Investor
and its advisors, if any, have been afforded the opportunity to ask questions of the Company. The Investor understands that its
investment in the Securities involves a high degree of risk. The Investor has sought such accounting, legal and tax advice as
it has considered necessary to make an informed investment decision with respect to its acquisition of the Securities.

 

(g) No Governmental
Review. The Investor 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 fairness or suitability of the investment in
the Securities nor have such authorities passed upon or endorsed the merits of the offering of the Securities.

 

(h) Transfer
or Resale. Such Investor understands that: (i) the Securities have not been and are not being registered under the 1933 Act
or any state securities laws, and may not be offered for sale, sold, assigned or transferred unless (A) subsequently registered
thereunder, (B) such Investor shall have delivered to the Company (if requested by the Company) an opinion of counsel to such
Investor, in a form reasonably acceptable to the Company, to the effect that such Securities to be sold, assigned or transferred
may be sold, assigned or transferred pursuant to an exemption from such registration, or (C) such Investor provides the Company
with reasonable assurance that such Securities can be sold, assigned or transferred pursuant to Rule 144 or Rule 144A promulgated
under the 1933 Act (or a successor rule thereto) (collectively, “Rule 144”); (ii) any sale of the Securities
made in reliance on Rule 144 may be made only in accordance with the terms of Rule 144, and further, if Rule 144 is not applicable,
any resale of the Securities under circumstances in which the seller (or the Person (as defined below) through whom the sale is
made) may be deemed to be an underwriter (as that term is defined in the 1933 Act) may require compliance with some other exemption
under the 1933 Act or the rules and regulations of the SEC promulgated thereunder; and (iii) neither the Company nor any other
Person is under any obligation to register the Securities under the 1933 Act or any state securities laws or to comply with the
terms and conditions of any exemption thereunder.

 

(i) Validity;
Enforcement. This Agreement has been duly and validly authorized, executed and delivered on behalf of the Investor and constitutes
the legal, valid and binding obligations of the Investor enforceable against the Investor in accordance with its terms, except
as such enforceability may be limited by general principles of equity or applicable bankruptcy, insolvency, reorganization, moratorium,
liquidation and other similar laws relating to, or affecting generally, the enforcement of applicable creditors’ rights
and remedies.

 

(j) No Conflicts.
The execution, delivery and performance by the Investor of this Agreement and the consummation by the Investor of the transactions
contemplated hereby will not (i) result in a violation of the organizational documents of the Investor, (ii) 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 to which the Investor
is a party or (iii) result in a violation of any law, rule, regulation, order, judgment or decree (including federal and state
securities laws) applicable to the Investor, except in the case of clauses (ii) and (iii) above, for such conflicts, defaults,
rights or violations which would not, individually or in the aggregate, reasonably be expected to have a material adverse effect
on the ability of the Investor to perform its obligations hereunder.

 

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(k) Residency.
The Investor is a resident of Delaware.

 

(l) Certain
Trading Activities. The Investor has not directly or indirectly, nor has any Person acting on behalf of or pursuant to any
understanding with the Investor, engaged in any transactions in the securities of the Company (including, without limitation,
any Short Sales (as defined below) or hedging transactions involving any securities of the Company or any other transaction that
transfers some or all of the economic or other risk of ownership of securities of the Company, including any forward contract,
equity swap, put or call, put or call equivalent position, collar, non-recourse loan, or similar transaction) during the period
commencing as of the time that the Investor was first contacted regarding the specific investment in the Company contemplated
by this Agreement and ending immediately prior to the execution of this Agreement by the Investor. “Short Sales”
means all “short sales” as defined in Rule 200 promulgated under Regulation SHO under the Securities Exchange Act
of 1934, as amended (the “1934 Act”).

 

(m) Experience
of the Investor. The Investor, either alone or together with its representatives, has such knowledge, sophistication and experience
in business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment in the
Securities, and has so evaluated the merits and risks of such investment. The Investor is able to bear the economic risk of an
investment in the Securities and, at the present time, is able to afford a complete loss of such investment.

 

(n) Not a
10% Owner. The Investor is not a “beneficial owner” of more than 10% of the shares of Common Stock (as defined
for purposes of Rule 13d-3 of the 1934 Act).

 

		3.	REPRESENTATIONS
                                         AND WARRANTIES OF THE COMPANY. 

 

The Company represents
and warrants to the Investor that:

 

(a) Organization
and Qualification. Each of the Company and each of its Subsidiaries are entities duly organized and validly existing and in
good standing under the laws of the jurisdiction in which they are formed, and have the requisite power and authorization to own
their properties and to carry on their business as now being conducted and as presently proposed to be conducted. Each of the
Company and each of its Subsidiaries is duly qualified as a foreign entity to do business and is in good standing in every jurisdiction
in which its ownership of property or the nature of the business conducted by it makes such qualification necessary, except to
the extent that the failure to be so qualified or be in good standing would not have a Material Adverse Effect. “Material
Adverse Effect” means any material adverse effect on (i) the business, properties, assets, liabilities, operations (including
results thereof), condition (financial or otherwise) or prospects of the Company and its Subsidiaries taken as a whole, (ii) the
transactions contemplated hereby or in any of the other Transaction Documents or (iii) the authority or ability of the Company
or any of its Subsidiaries to timely perform any of their respective obligations under any of the Transaction Documents (as defined
below). Other than the Persons (as defined below) set forth on Schedule 3(a), the Company has no Subsidiaries. “Subsidiaries”
means any Person in which the Company, directly or indirectly, (I) owns a majority of the outstanding capital stock or holds a
majority of equity or similar interest of such Person or (II) controls or operates all or any part of the business, operations
or administration of such Person, and each of the foregoing, is individually referred to herein as a “Subsidiary.”

 

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(b) Authorization;
Enforcement; Validity. The Company has the requisite power and authority to enter into and perform its obligations under this
Agreement and the other Transaction Documents and, to issue the Securities in accordance with the terms hereof and thereof. The
execution and delivery of this Agreement and the other Transaction Documents by the Company, and the consummation by the Company
of the transactions contemplated hereby and thereby (including, without limitation, the issuance of the Note and the reservation
for issuance and issuance of the Conversion Shares issuable upon conversion of the Note and the Interest Shares issuable in accordance
with the terms of the Note) have been duly authorized by the Company’s board of directors (the “Signing Resolutions”),
which shall be obtained as soon as possible following the Closing Date, no further filing, consent or authorization is required
by the Company, its board of directors or its shareholders. The Signing Resolutions are valid, in full force and effect and have
not been modified or supplemented in any respect. The Company has delivered to the Investor a true and correct copy of the Signing
Resolutions executed by all of the members of the Company’s Board of Directors.

 

(c) This Agreement
has been, and the other Transaction Documents will be prior to the Closing, duly executed and delivered by the Company, and each
constitutes the legal, valid and binding obligations of the Company, enforceable against the Company in accordance with its respective
terms, except as such enforceability may be limited by general principles of equity or applicable bankruptcy, insolvency, reorganization,
moratorium, liquidation or similar laws relating to, or affecting generally, the enforcement of applicable creditors’ rights
and remedies and except as rights to indemnification and to contribution may be limited by federal or state securities law and
public policy, and the remedy of specific performance and injunctive and other forms of equitable relief may be subject to equitable
defenses and to the discretion of the court before which any proceeding therefor may be brought. “Transaction Documents”
means, collectively, this Agreement, the Note, the Irrevocable Transfer Agent Instructions (as defined below) and each of the
other agreements and instruments entered into or delivered by any of the parties hereto in connection with the transactions contemplated
hereby and thereby, as may be amended from time to time.

 

(d) Issuance
of Securities. The issuance of the Note is duly authorized and, upon issuance in accordance with the terms of the Transaction
Documents, will be validly issued, fully paid and non-assessable and free from all preemptive or similar rights, taxes, liens,
charges and other encumbrances with respect to the issue thereof. The Company shall have reserved from its duly authorized capital
stock not less than 150% of the maximum number of Conversion Shares issuable upon conversion of the Note and without taking into
account any limitations on the conversion of the Note set forth therein). The Interest Shares, upon issuance in accordance with
the Note, and upon conversion in accordance with the Note, the Conversion Shares, when issued, will be validly issued, fully paid
and non-assessable and free from all preemptive or similar rights, taxes, liens, charges and other encumbrances with respect to
the issue thereof, with the holders being entitled to all rights accorded to a holder of Common Stock. Subject to the accuracy
of the representations and warranties of the Investor in this Agreement, the offer and issuance by the Company of the Securities
is exempt from registration under the 1933 Act. “Common Stock” means (i) the Company’s shares of common
stock, US$0.001 par value per share, and (ii) any capital stock into which such common stock shall have been changed or any share
capital resulting from a reclassification of such common stock.

 

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(e) No Conflicts.
The execution, delivery and performance of the Transaction Documents by the Company and the consummation by the Company of the
transactions contemplated hereby and thereby (including, without limitation, the issuance of the Note, and the reservation for
issuance and issuance of the Conversion Shares issuable upon conversion of the Note and the Interest Shares issuable in accordance
with the terms of the Note) will not (i) result in a violation of the Charter (as defined below) (including, without limitation,
any certificate of designation contained therein) or other organizational documents of the Company or any of its Subsidiaries,
any capital stock of the Company or any of its Subsidiaries or Bylaws (as defined below) or the bylaws any of its Subsidiaries,
(ii) 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
to which the Company or any of its Subsidiaries is a party or (iii) result in a violation of any law, rule, regulation, order,
judgment or decree (including, without limitation, foreign, federal and state securities laws and regulations and the rules and
regulations of the OTCQB (the “Principal Market”)) applicable to the Company or any of its Subsidiaries or
by which any property or asset of the Company or any of its Subsidiaries is bound or affected other than, in the case of clause
(ii) above, such conflicts, defaults or rights that could not reasonably be expected to have a Material Adverse Effect.

 

(f) Consents.
Neither the Company nor any Subsidiary is required to obtain any consent from, authorization or order of, or make any filing or
registration with, any court, governmental agency or any regulatory or self-regulatory agency or any other Person in order for
it to execute, deliver or perform any of its respective obligations under, or contemplated by, the Transaction Documents, in each
case, in accordance with the terms hereof or thereof. All consents, authorizations, orders, filings and registrations which the
Company is required to obtain at or prior to the Closing have been obtained or effected on or prior to the Closing Date, and the
Company is not aware of any facts or circumstances which might prevent the Company from obtaining or effecting any of the registration,
application or filings contemplated by the Transaction Documents. Except as disclosed in the SEC Reports (as defined below), the
Company is not in violation of the requirements of the Principal Market and has no knowledge of any facts or circumstances which
could reasonably lead to delisting or suspension of the Common Stock in the foreseeable future.

 

(g) Acknowledgment
Regarding Investor’s Purchase of Securities. The Company acknowledges and agrees that the Investor is acting solely
in the capacity of an arm’s length purchaser with respect to the Transaction Documents and the transactions contemplated
hereby and thereby and that the Investor is not (i) an officer or director of the Company or any of its Subsidiaries, (ii) an
“affiliate” (as defined in Rule 144 under the 1933 Act (“Rule 144”)) of the Company or any of its
Subsidiaries or (iii) to its knowledge, a “beneficial owner” of more than 10% of the shares of Common Stock (as defined
for purposes of Rule 13d-3 of the 1934 Act. The Company further acknowledges that the Investor is not acting as a financial advisor
or fiduciary of the Company or any of its Subsidiaries (or in any similar capacity) with respect to the Transaction Documents
and the transactions contemplated hereby and thereby, and any advice given by the Investor or any of its representatives or agents
in connection with the Transaction Documents and the transactions contemplated hereby and thereby is merely incidental to the
Investor’s purchase of the Securities. The Company further represents to the Investor that the Company’s decision
to enter into the Transaction Documents to which it is a party has been based solely on the independent evaluation by the Company’s
representatives.

 

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(h) No General
Solicitation; Placement Agent’s Fees. Neither the Company, nor any of its Subsidiaries or affiliates, nor any Person
acting on its or their behalf, has engaged in any form of general solicitation or general advertising (within the meaning of Regulation
D) in connection with the offer or sale of the Securities. The Company shall be responsible for the payment of any placement agent’s
fees, financial advisory fees, or brokers’ commissions (other than for Persons engaged by the Investor or its investment
advisor) relating to or arising out of the transactions contemplated hereby. Neither the Company nor any of its Subsidiaries has
engaged any placement agent or other agent in connection with the offer or sale of the Securities.

 

(i) No Integrated
Offering. None of the Company, its Subsidiaries or any of their affiliates, nor, to the knowledge of the Company, any Person
acting on their behalf has, directly or indirectly, made any offers or sales of any security or solicited any offers to buy any
security, under circumstances that would require registration of the issuance of any of the Securities under the 1933 Act, whether
through integration with prior offerings or otherwise, or cause this offering of the Securities to require approval of stockholders
of the Company under any applicable stockholder approval provisions, including, without limitation, under the rules and regulations
of any exchange or automated quotation system on which any of the securities of the Company are listed or designated for quotation.
None of the Company, its Subsidiaries, their affiliates nor, to the knowledge of the Company, any Person acting on their behalf
will take any action or steps that would require registration of the issuance of any of the Securities under the 1933 Act or cause
the offering of any of the Securities to be integrated with other offerings of securities of the Company.

 

(j) Dilutive
Effect. The Company understands and acknowledges that the number of Conversion Shares will increase in certain circumstances.
The Company further acknowledges that its obligation to issue the Conversion Shares upon conversion of the Note in accordance
with this Agreement, the Note is absolute and unconditional (subject to any limitations on conversion as set forth in the Note),
regardless of the dilutive effect that such issuance may have on the ownership interests of other stockholders of the Company.

 

(k) Application
of Takeover Protections; Rights Agreement. The Company and its board of directors have taken all necessary action, if any,
in order to render inapplicable any control share acquisition, interested stockholder, business combination, poison pill (including,
without limitation, any distribution under a rights agreement), stockholder rights plan or other similar antitakeover provision
under the Charter, Bylaws or other organizational documents or the laws of the jurisdiction of its incorporation or otherwise
which is or could become applicable to the Investor as a result of the transactions contemplated by this Agreement, including,
without limitation, the Company’s issuance of the Securities and the Investor’s ownership of the Securities. The Company
and its board of directors have taken all necessary action, if any, in order to render inapplicable any stockholder rights plan
or similar arrangement relating to accumulations of beneficial ownership of shares of Common Stock or a change in control of the
Company or any of its Subsidiaries.

 

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(l) Public
Reports. The Company is current in its filing obligations under the 1934 Act, including without limitation as to its filings
of Annual Reports on Form 20-F and Reports on Form 6-K (collectively, the “Public Reports”). The Public Reports
do not contain any untrue statement of a material fact or omit to state any fact necessary to make any statement therein not misleading.
The financial statements included within the Public Reports for the fiscal year ended December 31, 2015 and for each filed period
thereafter (the “Financial Statements”) have been prepared in accordance with generally accepted accounting
principles (“GAAP”) applied on a consistent basis throughout the periods indicated and with each other, except
that unaudited Financial Statements may not contain all footnote required by generally accepted accounting principles. The Financial
Statements fairly present, in all material respects, the financial condition and operating results of the Company as of the dates,
and for the periods, indicated therein, subject in the case of unaudited Financial Statements to normal year-end audit adjustments.

 

(m) Absence
of Certain Changes. Except as disclosed in the Public Reports or registration statements on Form F-1 filed with the SEC since
January 1, 2016 (collectively, the “SEC Reports”), since December 31, 2015 there has been no material adverse
change and no material adverse development in the business, assets, liabilities, properties, operations (including results thereof),
condition (financial or otherwise) or prospects of the Company or any of its Subsidiaries. Except as disclosed in the SEC Reports,
since December 31, 2015, neither the Company nor any of its Subsidiaries has (i) declared or paid any dividends, (ii) sold any
assets outside of the ordinary course of business or (iii) made any capital expenditures outside of the ordinary course of business.
Neither the Company nor any of its Subsidiaries has taken any steps to seek protection pursuant to any law or statute relating
to bankruptcy, insolvency, reorganization, receivership, liquidation or winding up, nor does the Company or any Subsidiary have
any knowledge or reason to believe that any of their respective creditors intend to initiate involuntary bankruptcy proceedings
or any actual knowledge of any fact which would reasonably lead a creditor to do so. The Company and its Subsidiaries, on a consolidated
basis, are not, and after giving effect to the transactions contemplated hereby to occur at the Closing will not be, Insolvent
(as defined below). “Insolvent” means, with respect to the Company and its Subsidiaries, on a consolidated
basis, (i) the present fair saleable value of the Company’s and its Subsidiaries’ assets is less than the amount required
to pay the Company’s and its Subsidiaries’ total Indebtedness (as defined below), (ii) the Company and its Subsidiaries
are unable to pay their debts and liabilities, subordinated, contingent or otherwise, as such debts and liabilities become absolute
and matured or (iii) the Company and its Subsidiaries intend to incur or believe that they will incur debts that would be beyond
their ability to pay as such debts mature. Neither the Company nor any of its Subsidiaries has engaged in any business or in any
transaction, and is not about to engage in any business or in any transaction, for which the Company’s or such Subsidiary’s
remaining assets constitute unreasonably small capital.

 

(n) No Undisclosed
Events, Liabilities, Developments or Circumstances. Except as disclosed in the SEC Reports, no event, liability, development
or circumstance has occurred or exists, or is reasonably expected to occur or exist with respect to the Company, any of its Subsidiaries
or any of their respective businesses, properties, liabilities, prospects, operations (including results thereof) or condition
(financial or otherwise), that (i) would be required to be disclosed by the Company under applicable securities laws in the Public
Reports and which has not been publicly announced, (ii) could have a material adverse effect on the Investor’s investment
hereunder or (iii) could have a Material Adverse Effect.

 

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(o) Conduct
of Business; Regulatory Permits. Neither the Company nor any of its Subsidiaries is in violation of any term of or in default
under its Charter, any certificate of designation, preferences or rights of any other outstanding series of preferred stock of
the Company or any of its Subsidiaries or Bylaws or their organizational charter, certificate of formation or certificate of incorporation
or bylaws, respectively. Except as disclosed in the SEC Reports, neither the Company nor any of its Subsidiaries is in violation
of any judgment, decree or order or any statute, ordinance, rule or regulation applicable to the Company or any of its Subsidiaries,
and neither the Company nor any of its Subsidiaries will conduct its business in violation of any of the foregoing, except in
all cases for possible violations which could not, individually or in the aggregate, have a Material Adverse Effect. Except as
disclosed in the SEC Reports, without limiting the generality of the foregoing, the Company is not in violation of any of the
rules, regulations or requirements of the Principal Market and has no knowledge of any facts or circumstances that could reasonably
lead to delisting or suspension of the Common Stock by the Principal Market in the foreseeable future. Since April , 2016, (i)
the Common Stock has been approved for listing on the Principal Market, and (ii) except as disclosed in the SEC Reports, the Company
has received no communication, written or oral, from the SEC or the Principal Market regarding the withdrawal of such approval
for listing of the Common Stock on the Principal Market. The Company and each of its Subsidiaries possess all certificates, authorizations
and permits issued by the appropriate regulatory authorities necessary to conduct their respective businesses, except where the
failure to possess such certificates, authorizations or permits would not have, individually or in the aggregate, a Material Adverse
Effect, and neither the Company nor any such Subsidiary has received any notice of proceedings relating to the revocation or modification
of any such certificate, authorization or permit.

 

(p) Foreign
Corrupt Practices. Neither the Company nor any of its Subsidiaries nor, to the knowledge of the Company, any director, officer,
agent, employee or other Person acting on behalf of the Company or any of its Subsidiaries has, in the course of its actions for,
or on behalf of, the Company or any of its Subsidiaries (i) used any corporate funds for any unlawful contribution, gift, entertainment
or other unlawful expenses relating to political activity; (ii) made any direct or indirect unlawful payment to any foreign or
domestic government official or employee from corporate funds; (iii) violated or is in violation of any provision of the U.S.
Foreign Corrupt Practices Act of 1977, as amended; or (iv) made any unlawful bribe, rebate, payoff, influence payment, kickback
or other unlawful payment to any foreign or domestic government official or employee.

 

(q) Sarbanes-Oxley
Act. The Company and each Subsidiary is in material compliance with all applicable requirements of the Sarbanes-Oxley Act
of 2002 that are effective as of the date hereof, and all applicable rules and regulations promulgated by the SEC thereunder that
are effective as of the date hereof.

 

(r) Transactions
With Affiliates. Except as disclosed in the SEC Filings, none of the officers, directors, employees or affiliates of the Company
or any of its Subsidiaries is presently a party to any transaction with the Company or any of its Subsidiaries (other than for
ordinary course services as employees, officers or directors), including any contract, agreement or other arrangement providing
for the furnishing of services to or by, providing for rental of real or personal property to or from, or otherwise requiring
payments to or from any such officer, director, employee or affiliate or, to the knowledge of the Company or any of its Subsidiaries,
any corporation, partnership, trust or other Person in which any such officer, director, employee or affiliate has a substantial
interest or is an employee, officer, director, trustee or partner.

 

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(s) Equity
Capitalization. As of February 21, 2017, the authorized capital stock of the Company consists of (i) 10,000,000,000 shares
of Common Stock, of which, 455,176 are issued and outstanding and 137,356,928 shares are reserved for issuance pursuant to Convertible
Securities (as defined below) (other than the Note) and (ii) 5,000,000 shares of preferred stock, of which, 8,160 are issued and
outstanding. No shares of Common Stock are held in treasury. All of such outstanding shares are duly authorized and have been,
or upon issuance will be, validly issued and are fully paid and non-assessable. To the Company’s knowledge no shares of
the Company’s issued and outstanding Common Stock on the date hereof are owned by Persons who are “affiliates”
(as defined in Rule 405 of the 1933 Act and calculated based on the assumption that only executive officers, directors and holders
of at least 10% of the Company’s issued and outstanding Common Stock are “affiliates” without conceding that
any such Persons are “affiliates” for purposes of federal securities laws) of the Company or any of its Subsidiaries.
To the Company’s knowledge, except as disclosed in the Public Reports, no Person owns 10% or more of the Company’s
issued and outstanding shares of Common Stock (calculated based on the assumption that all Convertible Securities, whether or
not presently exercisable or convertible, have been fully exercised or converted (as the case may be) taking account of any limitations
on exercise or conversion (including “blockers”) contained therein without conceding that such identified Person is
a 10% stockholder for purposes of federal securities laws). (i) None of the Company’s or any Subsidiary’s capital
stock is subject to preemptive rights or any other similar rights or any liens or encumbrances suffered or permitted by the Company
or any Subsidiary; (ii) except as disclosed in the SEC Reports, there are no outstanding options, warrants, scrip, rights to subscribe
to, calls or commitments of any character whatsoever relating to, or securities or rights convertible into, or exercisable or
exchangeable for, any capital stock of the Company or any of its Subsidiaries, or contracts, commitments, understandings or arrangements
by which the Company or any of its Subsidiaries is or may become bound to issue additional capital stock of the Company or any
of its Subsidiaries or options, warrants, scrip, rights to subscribe to, calls or commitments of any character whatsoever relating
to, or securities or rights convertible into, or exercisable or exchangeable for, any capital stock of the Company or any of its
Subsidiaries; (iii) except as disclosed in the SEC Reports, there are no outstanding debt securities, notes, credit agreements,
credit facilities or other agreements, documents or instruments evidencing Indebtedness of the Company or any of its Subsidiaries
or by which the Company or any of its Subsidiaries is or may become bound; (iv) except as disclosed in the SEC Reports, there
are no financing statements securing obligations in any amounts filed in connection with the Company or any of its Subsidiaries;
(v) except as disclosed in the SEC Reports, there are no agreements or arrangements under which the Company or any of its Subsidiaries
is obligated to register the sale of any of their securities under the 1933 Act (except pursuant to the Registration Rights Agreement);
(vi) except as disclosed in the SEC Reports, there are no outstanding securities or instruments of the Company or any of its Subsidiaries
which contain any redemption or similar provisions, and there are no contracts, commitments, understandings or arrangements by
which the Company or any of its Subsidiaries is or may become bound to redeem a security of the Company or any of its Subsidiaries;
(vii) there are no securities or instruments containing antidilution or similar provisions that will be triggered by the issuance
of the Securities; (viii) neither the Company nor any Subsidiary has any stock appreciation rights or “phantom stock”
plans or agreements or any similar plan or agreement; and (ix) neither the Company nor any of its Subsidiaries have any liabilities
or obligations required to be disclosed in the Public Filings which are not so disclosed in the Public Filings, other than those
incurred in the ordinary course of the Company’s or its Subsidiaries’ respective businesses and which, individually
or in the aggregate, do not or could not have a Material Adverse Effect. The Company has furnished (or made available through
the SEC’s EDGAR system) to the Investor true, correct and complete copies of the Company’s articles of incorporation,
as amended and as in effect on the date hereof (the “Charter”), and the Company’s bylaws, as amended
and as in effect on the date hereof (the “Bylaws”), and the terms of all Convertible Securities and the material
rights of the holders thereof in respect thereto. “Convertible Securities” means any capital stock or other
security of the Company or any of its Subsidiaries that is at any time and under any circumstances directly or indirectly convertible
into, exercisable or exchangeable for, or which otherwise entitles the holder thereof to acquire, any capital stock or other security
of the Company (including, without limitation, Common Stock) or any of its Subsidiaries.

 

    	 	10	 

     

    

 

(t) Indebtedness
and Other Contracts. Neither the Company nor any of its Subsidiaries (i) except as disclosed in the SEC Reports, has any outstanding
Indebtedness (as defined below), (ii) is a party to any contract, agreement or instrument, the violation of which, or default
under which, by the other party(ies) to such contract, agreement or instrument could reasonably be expected to result in a Material
Adverse Effect, (iii) is in violation of any term of, or in default under, any contract, agreement or instrument relating to any
Indebtedness, except where such violations and defaults would not result, individually or in the aggregate, in a Material Adverse
Effect, or (iv) is a party to any contract, agreement or instrument relating to any Indebtedness, the performance of which, in
the judgment of the Company’s officers, has or is expected to have a Material Adverse Effect. (x) “Indebtedness”
of any Person means, without duplication (A) all indebtedness for borrowed money, (B) all obligations issued, undertaken or assumed
as the purchase price of property or services (including, without limitation, “capital leases” in accordance with
generally accepted accounting principles) (other than trade payables entered into in the ordinary course of business), (C) all
reimbursement or payment obligations with respect to letters of credit, surety bonds and other similar instruments, (D) all obligations
evidenced by notes, bonds, debentures or similar instruments, including obligations so evidenced incurred in connection with the
acquisition of property, assets or businesses, (E) all indebtedness created or arising under any conditional sale or other title
retention agreement, or incurred as financing, in either case with respect to any property or assets acquired with the proceeds
of such indebtedness (even though the rights and remedies of the seller or bank under such agreement in the event of default are
limited to repossession or sale of such property), (F) all monetary obligations under any leasing or similar arrangement which,
in connection with generally accepted accounting principles, consistently applied for the periods covered thereby, is classified
as a capital lease, (G) all indebtedness referred to in clauses (A) through (F) above secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise, to be secured by) any mortgage, lien, pledge, charge, security interest
or other encumbrance upon or in any property or assets (including accounts and contract rights) owned by any Person, even though
the Person which owns such assets or property has not assumed or become liable for the payment of such indebtedness, and (H) all
Contingent Obligations in respect of indebtedness or obligations of others of the kinds referred to in clauses (A) through (G)
above; (y) “Contingent Obligation” means, as to any Person, any direct or indirect liability, contingent or
otherwise, of that Person with respect to any indebtedness, lease, dividend or other obligation of another Person if the primary
purpose or intent of the Person incurring such liability, or the primary effect thereof, is to provide assurance to the obligee
of such liability that such liability will be paid or discharged, or that any agreements relating thereto will be complied with,
or that the holders of such liability will be protected (in whole or in part) against loss with respect thereto; and (z) “Person”
means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization,
any other entity and a government or any department or agency thereof.

 

    	 	11	 

     

    

 

(u) Absence
of Litigation. Except as disclosed in the SEC Reports, there is no action, suit, proceeding, inquiry or investigation before
or by the Principal Market, any court, public board, government agency, self-regulatory organization or body pending or, to the
knowledge of the Company, threatened against or affecting the Company or any of its Subsidiaries, the Common Stock or any of the
Company’s or its Subsidiaries’ officers or directors which is outside of the ordinary course of business or individually
or in the aggregate material to the Company or any of its Subsidiaries. There has not been, and to the knowledge of the Company,
there is not pending or contemplated, any investigation by the SEC involving the Company, any of its Subsidiaries or any current
or former director or executive officer of the Company or any of its Subsidiaries.

 

(v) Insurance.
The Company and each of its Subsidiaries are insured by insurers of recognized financial responsibility against such losses and
risks and in such amounts as management of the Company believes to be prudent and customary in the businesses in which the Company
and its Subsidiaries are engaged. Neither the Company nor any such Subsidiary has been refused any insurance coverage sought or
applied for, and neither the Company nor any such Subsidiary has any reason to believe that it will be unable to renew its existing
insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to
continue its business at a cost that would not have a Material Adverse Effect.

 

(w) Employee
Relations. Neither the Company nor any of its Subsidiaries is a party to any collective bargaining agreement or employs any
member of a union. The Company believes that its and its Subsidiaries’ relations with their respective employees are good.
No executive officer (as defined in Rule 501(f) promulgated under the 1933 Act) or other key employee of the Company or any of
its Subsidiaries has notified the Company or any such Subsidiary that such officer intends to leave the Company or any such Subsidiary
or otherwise terminate such officer’s employment with the Company or any such Subsidiary. To the knowledge of the Company,
no executive officer or other key employee of the Company or any of its Subsidiaries is, or is now expected to be, in violation
of any material term of any employment contract, confidentiality, disclosure or proprietary information agreement, non-competition
agreement, or any other contract or agreement or any restrictive covenant, and the continued employment of each such executive
officer or other key employee (as the case may be) does not subject the Company or any of its Subsidiaries to any liability with
respect to any of the foregoing matters. The Company and its Subsidiaries are in compliance with all federal, state, local and
foreign laws and regulations respecting labor, employment and employment practices and benefits, terms and conditions of employment
and wages and hours, except where failure to be in compliance would not, either individually or in the aggregate, reasonably be
expected to result in a Material Adverse Effect.

 

(x) Title.
The Company and its Subsidiaries have good and marketable title in fee simple to all real property, and have good and marketable
title to all personal property, owned by them which is material to the business of the Company and its Subsidiaries, in each case,
free and clear of all liens, encumbrances and defects except such as do not materially affect the value of such property and do
not interfere with the use made and proposed to be made of such property by the Company and any of its Subsidiaries. Any real
property and facilities held under lease by the Company or any of its Subsidiaries are held by them under valid, subsisting and
enforceable leases with such exceptions as are not material and do not interfere with the use made and proposed to be made of
such property and buildings by the Company or any of its Subsidiaries.

 

    	 	12	 

     

    

 

(y) Intellectual
Property Rights. The Company and its Subsidiaries own or possess adequate rights or licenses to use all trademarks, trade
names, service marks, service mark registrations, service names, patents, patent rights, copyrights, original works, inventions,
licenses, approvals, governmental authorizations, trade secrets and other intellectual property rights and all applications and
registrations therefor (“Intellectual Property Rights”) necessary to conduct their respective businesses as
now conducted and as presently proposed to be conducted. None of the Company’s or its Subsidiaries’ Intellectual Property
Rights have expired, terminated or been abandoned, or are expected to expire, terminate or be abandoned, within two years from
the date of this Agreement. The Company has no knowledge of any infringement by the Company or any of its Subsidiaries of Intellectual
Property Rights of others. There is no claim, action or proceeding being made or brought, or to the knowledge of the Company or
any of its Subsidiaries, being threatened, against the Company or any of its Subsidiaries regarding their Intellectual Property
Rights. The Company is not aware of any facts or circumstances which might give rise to any of the foregoing infringements or
claims, actions or proceedings. The Company and each of its Subsidiaries have taken reasonable security measures to protect the
secrecy, confidentiality and value of all of their Intellectual Property Rights, except where failure to take such measures would
not, either individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect.

 

(z) Environmental
Laws. The Company and its Subsidiaries (i) are in compliance with all Environmental Laws (as defined below), (ii) have received
all permits, licenses or other approvals required of them under applicable Environmental Laws to conduct their respective businesses
and (iii) are in compliance with all terms and conditions of any such permit, license or approval where, in each of the foregoing
clauses (i), (ii) and (iii), the failure to so comply could be reasonably expected to have, individually or in the aggregate,
a Material Adverse Effect. “Environmental Laws” means all federal, state, local or foreign laws relating to
pollution or protection of human health or the environment (including, without limitation, ambient air, surface water, groundwater,
land surface or subsurface strata), including, without limitation, laws relating to emissions, discharges, releases or threatened
releases of chemicals, pollutants, contaminants, or toxic or hazardous substances or wastes (collectively, “Hazardous
Materials”) into the environment, or otherwise relating to the manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling of Hazardous Materials, as well as all authorizations, codes, decrees, demands or demand
letters, injunctions, judgments, licenses, notices or notice letters, orders, permits, plans or regulations issued, entered, promulgated
or approved thereunder.

 

(aa)Subsidiary
Rights. The Company or one of its Subsidiaries has the unrestricted right to vote, and (subject to limitations imposed by
applicable law) to receive dividends and distributions on, all capital securities of its Subsidiaries as owned by the Company
or such Subsidiary.

 

    	 	13	 

     

    

 

(bb)Tax
Status. The Company and each of its Subsidiaries (i) has timely made or filed all foreign, federal and state income and all
other tax returns, reports and declarations required by any jurisdiction to which it is subject, (ii) has timely paid all taxes
and other governmental assessments and charges that are material in amount, shown or determined to be due on such returns, reports
and declarations, except those being contested in good faith and (iii) has set aside on its books provision reasonably adequate
for the payment of all taxes for periods subsequent to the periods to which such returns, reports or declarations apply. There
are no unpaid taxes in any material amount claimed to be due by the taxing authority of any jurisdiction, and the officers of
the Company and its Subsidiaries know of no basis for any such claim. The Company is not operated in such a manner as to qualify
as a passive foreign investment company, as defined in Section 1297 of the U.S. Internal Revenue Code of 1986, as amended (the
“Code”).

 

(cc)Internal
Accounting and Disclosure Controls. The Company and each of its Subsidiaries maintains internal control over financial reporting
(as such term is defined in Rule 13a-15(f) under the 1934 Act) that is effective to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally
accepted accounting principles, including that (i) transactions are executed in accordance with management’s general or
specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity
with generally accepted accounting principles and to maintain asset and liability accountability, (iii) access to assets or incurrence
of liabilities is permitted only in accordance with management’s general or specific authorization and (iv) the recorded
accountability for assets and liabilities is compared with the existing assets and liabilities at reasonable intervals and appropriate
action is taken with respect to any difference. The Company maintains disclosure controls and procedures (as such term is defined
in Rule 13a-15(e) under the 1934 Act) that are effective in ensuring that information required to be disclosed by the Company
in the reports that it files or submits under the 1934 Act is recorded, processed, summarized and reported, within the time periods
specified in the rules and forms of the SEC, including, without limitation, controls and procedures designed to ensure that information
required to be disclosed by the Company in the reports that it files or submits under the 1934 Act is accumulated and communicated
to the Company’s management, including its principal executive officer or officers and its principal financial officer or
officers, as appropriate, to allow timely decisions regarding required disclosure. Neither the Company nor any of its Subsidiaries
has received any notice or correspondence from any accountant or other Person relating to any potential material weakness or significant
deficiency in any part of the internal controls over financial reporting of the Company or any of its Subsidiaries.

 

(dd)Off
Balance Sheet Arrangements. There is no transaction, arrangement, or other relationship between the Company or any of its
Subsidiaries and an unconsolidated or other off balance sheet entity that is required to be disclosed by the Company in its 1934
Act filings and is not so disclosed or that otherwise could be reasonably likely to have a Material Adverse Effect.

 

(ee)Investment
Company Status. The Company is not, and upon consummation of the sale of the Securities will not be, an “investment
company,” an affiliate of an “investment company,” a company controlled by an “investment company”
or an “affiliated person” of, or “promoter” or “principal underwriter” for, an “investment
company” as such terms are defined in the Investment Company Act of 1940, as amended.

 

(ff)U.S.
Real Property Holding Corporation. Neither the Company nor any of its Subsidiaries is, or has ever been, and so long as any
of the Securities are held by the Investor, shall become, a U.S. real property holding corporation within the meaning of Section
897 of the Code, and the Company and each Subsidiary shall so certify upon the Investor’s request.

 

    	 	14	 

     

    

 

(gg)No
Disqualification Events. None of the Company, any of its predecessors, any affiliated issuer, any director, executive officer,
other officer of the Company participating in the offering contemplated hereby, any beneficial owner of 20% or more of the Company's
outstanding voting equity securities, calculated on the basis of voting power, nor any promoter (as that term is defined in Rule
405 under the 1933 Act) connected with the Company in any capacity at the time of sale (each, an “Issuer Covered Person”)
is subject to any of the “Bad Actor” disqualifications described in Rule 506(d)(1)(i) to (viii) under the 1933 Act
(a “Disqualification Event”), except for a Disqualification Event covered by Rule 506(d)(2) or (d)(3). The
Company has exercised reasonable care to determine whether any Issuer Covered Person is subject to a Disqualification Event.

 

(hh)Transfer
Taxes. On the Closing Date, all stock transfer or other taxes (other than income or similar taxes) which are required to be
paid in connection with the issuance, sale and transfer of the Securities to be sold to the Investor hereunder will be, or will
have been, fully paid or provided for by the Company, and all laws imposing such taxes will be or will have been complied with.

 

(ii)
[Reserved]

 

(jj) Shell
Company Status. The Company is not, and has never been, an issuer identified in, or subject to, Rule 144(i).

 

(kk) [Reserved]

 

(ll) [Reserved]

 

(mm)No
Additional Agreements. The Company does not have any agreement or understanding with the Investor with respect to the transactions
contemplated by the Transaction Documents other than as specified in the Transaction Documents.

 

(nn)Real
Property. Each of the Company and its Subsidiaries holds good title to all real property, leases in real property, or other
interests in real property owned or held by the Company or any of its Subsidiaries (the “Real Property”) owned
by the Company or any of its Subsidiaries (as applicable). The Real Property is free and clear of all mortgages, defects, claims,
liens, pledges, charges, taxes, rights of first refusal, encumbrances, security interests and other encumbrances (collectively
“Encumbrances”) and is not subject to any rights of way, building use restrictions, exceptions, variances,
reservations, or limitations of any nature except for (a) liens for current taxes not yet due and (b) zoning laws and other land
use restrictions that do not impair the present or anticipated use of the property subject thereto.

 

(oo) Fixtures
and Equipment. Each of the Company and its Subsidiaries (as applicable) has good title to, or a valid leasehold interest in,
the tangible personal property, equipment, improvements, fixtures, and other personal property and appurtenances that are used
by the Company or its Subsidiary in connection with the conduct of its business (the “Fixtures and Equipment”).
The Fixtures and Equipment are structurally sound, are in good operating condition and repair, are adequate for the uses to which
they are being put, are not in need of maintenance or repairs except for ordinary, routine maintenance and repairs and are sufficient
for the conduct of the Company’s and/or its Subsidiaries’ businesses (as applicable) in the manner as conducted prior
to the Closing. Each of the Company and its Subsidiaries owns all of its Fixtures and Equipment free and clear of all Encumbrances
except for (a) liens for current taxes not yet due and (b) zoning laws and other land use restrictions that do not impair the
present or anticipated use of the property subject thereto.

 

    	 	15	 

     

    

 

(pp)Illegal
or Unauthorized Payments; Political Contributions. Neither the Company nor any of its Subsidiaries nor, to the Company’s
knowledge (after reasonable inquiry of its officers and directors), any of the officers, directors, employees, agents or other
representatives of the Company or any of its Subsidiaries or any other business entity or enterprise with which the Company or
any Subsidiary is or has been affiliated or associated, has, directly or indirectly, made or authorized any payment, contribution
or gift of money, property, or services, whether or not in contravention of applicable law, (a) as a kickback or bribe to any
Person or (b) to any political organization, or the holder of or any aspirant to any elective or appointive public office except
for personal political contributions not involving the direct or indirect use of funds of the Company or any of its Subsidiaries.

 

(qq)Money Laundering.
The Company and its Subsidiaries are in compliance with, and have not previously violated, the USA Patriot Act of 2001 and all
other applicable U.S. and nonU.S. anti-money laundering laws and regulations, including, without limitation, the laws, regulations
and Executive Orders and sanctions programs administered by the U.S. Office of Foreign Assets Control, including, without limitation,
(i) Executive Order 13224 of September 23, 2001 entitled, “Blocking Property and Prohibiting Transactions With Persons Who
Commit, Threaten to Commit, or Support Terrorism” (66 Fed. Reg. 49079 (2001)); and (ii) any regulations contained in 31
CFR, Subtitle B, Chapter V.

 

(rr) [Reserved]

 

(ss) Disclosure.
The Company understands and confirms that the Investor will rely on the foregoing representations in effecting transactions in
securities of the Company. All disclosure provided to the Investor regarding the Company and its Subsidiaries, their businesses
and the transactions contemplated hereby, including the schedules to this Agreement, furnished by or on behalf of the Company
or any of its Subsidiaries is true and correct in all material respects and does not contain any untrue statement of a material
fact or omit to state any material fact necessary in order to make the statements made therein, in the light of the circumstances
under which they were made, not misleading. The Company acknowledges and agrees that no Investor makes or has made any representations
or warranties with respect to the transactions contemplated hereby other than those specifically set forth in Section 2.

 

4.  COVENANTS. 

 

(a) Reasonable
Best Efforts. The Investor shall use its reasonable best efforts to timely satisfy each of the conditions to be satisfied
by it as provided in Section 6 of this Agreement. The Company shall use its reasonable best efforts to timely satisfy each of
the conditions to be satisfied by it as provided in Section 7 of this Agreement.

 

(b)
[Intentionally Omitted]

 

(c) Reporting
Status. Until the date on which the Investor shall have sold all of the Conversion Shares and Interest Shares (the “Reporting
Period”), the Company shall timely file all reports required to be filed with the SEC pursuant to the 1934 Act, and
the Company shall not terminate its status as an issuer required to file reports under the 1934 Act even if the 1934 Act or the
rules and regulations thereunder would no longer require or otherwise permit such termination.

 

    	 	16	 

     

    

 

(d) Use of
Proceeds. The Company shall use the proceeds from the sale of the Securities solely for general working capital purposes.
Without limiting the foregoing, none of such proceeds shall be used, directly or indirectly, (i) for the redemption of any securities
of the Company or (ii) with respect to any litigation involving the Company or any of its Subsidiaries (including, without limitation,
(x) any settlement thereof or (y) the payment of any costs or expenses related thereto).

 

(e) Financial
Information. As long as the Note remains outstanding, the Company agrees to send the following to the Investor during the
Reporting Period unless the following are filed with the SEC through EDGAR and are available to the public through the EDGAR system,
(i) within one (1) Business Day after the filing thereof with the SEC, a copy of its Annual Reports on Form 20-F, any interim
reports or any consolidated balance sheets, income statements, stockholders’ equity statements and/or cash flow statements
for any period other than annual, any Reports on Form 6-K and any registration statements or amendments filed pursuant to the
1933 Act and (ii) copies of any notices and other information made available or given to the stockholders of the Company generally,
contemporaneously with the making available or giving thereof to the stockholders.

 

(f) Listing.
The Company shall secure the approval for listing of all of the Common Shares and Interest Shares upon any Eligible Market (subject
to official notice of issuance) as soon as possible after the Closing Date and shall maintain such listing of all Conversion Shares
and Interest Shares from time to time issuable under the terms of the Transaction Documents on any Eligible Market. The Company
shall maintain the Common Stock’s listing on the Principal Market, The New York Stock Exchange, the NYSE MKT, The NASDAQ
Global Select Market, The NASDAQ Global Market, The NASDAQ Capital Market, or the OTCQX or the OTC Pink “Current”
Market run by the OTC Markets Group, Inc. (each, an “Eligible Market”). Neither the Company nor any of its
Subsidiaries shall take any action which could be reasonably expected to result in the delisting or suspension of the Common Stock
on an Eligible Market. The Company shall pay all fees and expenses in connection with satisfying its obligations under this Section
4(f).

 

(g) Fees.
The Company shall be responsible for the payment of any placement agent’s fees, financial advisory fees, or broker’s
commissions (other than for Persons engaged by the Investor) relating to or arising out of the transactions contemplated hereby.
The Company shall pay, and hold the Investor harmless against, any liability, loss or expense (including, without limitation,
reasonable attorneys’ fees and out-of-pocket expenses) arising in connection with any claim relating to any such payment.
Except as otherwise set forth in the Transaction Documents, each party to this Agreement shall bear its own expenses in connection
with the sale of the Securities to the Investor.

 

(h) Reserved.

 

    	 	17	 

     

    

 

(i) Disclosure
of Transactions and Other Material Information. The Company shall not, and the Company shall cause each of its Subsidiaries
and each of its and their respective officers, directors, employees and agents not to, provide the Investor with any material,
non-public information regarding the Company or any of its Subsidiaries from and after the date hereof without the express prior
written consent of the Investor (which may be granted or withheld in the Investor’s sole discretion). To the extent that
the Company delivers any material, non-public information to the Investor without the Investor’s consent, the Company hereby
covenants and agrees that the Investor shall not have any duty of confidentiality with respect to, or a duty not to trade on the
basis of, such material, non-public information. The Company shall afford the Investor and its counsel with a reasonable opportunity
to review and comment upon, shall consult with the Investor and its counsel on the form and substance of, and shall give due consideration
to all such comments from the Investor or its counsel on, any press release, Commission filing or any other public disclosure
made by or on behalf of the Company relating to the Investor, its purchases hereunder or any aspect of the Transaction Documents
or the transactions contemplated thereby, prior to the issuance, filing or public disclosure thereof, and the Company shall not
issue, file or publicly disclose any such information to which the Investor shall object. For the avoidance of doubt, the Company
shall not be required to submit for review any such disclosure contained in periodic reports filed with the Commission under the
1934 Act if it shall have previously provided the same disclosure for review in connection with a previous filing.

 

(j) [Reserved]

 

(k) [Reserved]

 

(l) Reservation
of Shares. So long as the Note remains outstanding, the Company shall take all action necessary to at all times have authorized,
and reserved for the purpose of issuance, no less than the number of shares of Common Stock required to be reserved for issuance
to effect the conversion of the Note in full under Section 8 of the Note.

 

(m) Conduct
of Business. The business of the Company and its Subsidiaries shall not be conducted in violation of any law, ordinance or
regulation of any governmental entity, except where such violations would not result reasonably be expected to result, either
individually or in the aggregate, in a Material Adverse Effect.

 

(n) [Reserved]

 

(o) [Reserved]

 

(p) No Net
Short Sales. Subject to and without limiting the provisions of Section 4(o) above, so long as the Notes remain outstanding,
neither the Investor nor any of its affiliates nor any entity managed or controlled by the Investor (collectively, the “Restricted
Persons” and each of the foregoing is referred to herein as a “Restricted Person”) shall maintain,
in the aggregate, a Net Short Position. For purposes hereof, a “Net Short Position” by a Restricted Person
means a position whereby such Restricted Person has executed one or more sales of Common Stock that is marked as a short sale
(but not including any sale marked “short exempt”) and that is executed at a time when such Restricted Person does
not have an equivalent offsetting long position in the Common Stock (or is deemed to have a long position hereunder or otherwise
in accordance with Regulation SHO under the 1934 Act); provided, further that no “Short Sale” shall be deemed to exist
as a result of any failure by the Company (or its agents) to deliver Conversion Shares upon conversion of the Notes to any Restricted
Person converting such Notes. For purposes of determining whether a Restricted Person has an equivalent offsetting long position
in the Common Stock, such Restricted Person shall be deemed to hold “long” all Common Stock that is either (i) then
owned by such Restricted Person, if any, or (ii) then issuable to such Restricted Person as Conversion Shares or Interest Shares
pursuant to the terms of the Notes then held by such Restricted Person, if any (without regard to any limitations on conversion
set forth in the Notes and giving effect to any conversion price adjustments that would take effect given only the passage of
time). Notwithstanding the foregoing, nothing contained herein shall (without implication that the contrary would otherwise be
true) prohibit any Restricted Person from selling “long” (as defined under Rule 200 promulgated under Regulation SHO
under the 1934 Act) the Securities or any other Common Stock then owned by such Restricted Person.

 

    	 	18	 

     

    

 

(q) Passive
Foreign Investment Company. The Company shall conduct its business, and shall cause its Subsidiaries to conduct their respective
businesses, in such a manner as will ensure that the Company will not be deemed to constitute a passive foreign investment company
within the meaning of Section 1297 of the Code.

 

(r) Restriction
on Redemption and Cash Dividends. So long as the Note is outstanding, the Company shall not, directly or indirectly, redeem,
or declare or pay any cash dividend or distribution on, any securities of the Company without the prior express written consent
of the Investor.

 

(s) Corporate
Existence. So long as the Investor owns the Note, the Company shall not be party to any Fundamental Transaction (as defined
in the Note) unless the Company is in compliance with the applicable provisions governing Fundamental Transactions set forth in
the Note.

 

		5.	REGISTER;
                                         TRANSFER AGENT INSTRUCTIONS; LEGEND. 

 

(a) Register.
The Company shall maintain at its principal executive offices (or such other office or agency of the Company as it may designate
by notice to each holder of Securities), a register for the Note in which the Company shall record the name and address of the
Person in whose name the Note have been issued (including the name and address of each transferee), the principal amount of the
Note held by such Person, the number of Conversion Shares issuable upon conversion of the Note held by such Person. The Company
shall keep the register open and available at all times during business hours for inspection of the Investor or its legal representatives.

 

(b) Transfer
Agent Instructions. The Company shall issue irrevocable instructions to its transfer agent and any subsequent transfer agent
in a form acceptable to the Investor (the “Irrevocable Transfer Agent Instructions”) to issue certificates
or credit shares to the applicable balance accounts at The Depository Trust Company (“DTC”), registered in
the name of the Investor or its respective nominee(s), for the Conversion Shares in such amounts as specified from time to time
by the Investor to the Company upon conversion of the Note and for the Interest Shares in such amounts as specified by the Company
in accordance with the terms of the Note. The Company represents and warrants that no instruction other than the Irrevocable Transfer
Agent Instructions referred to in this Section 5(b), and stop transfer instructions to give effect to Section 2(h) hereof, will
be given by the Company to its transfer agent with respect to the Securities, and that the Securities shall otherwise be freely
transferable on the books and records of the Company, as applicable, to the extent provided in this Agreement and the other Transaction
Documents. If the Investor effects a sale, assignment or transfer of the Securities in accordance with Section 2(h), the Company
shall permit the transfer and shall promptly instruct its transfer agent to issue one or more certificates or credit shares to
the applicable balance accounts at DTC in such name and in such denominations as specified by such Investor to effect such sale,
transfer or assignment and the transfer agent shall issue such shares to such Investor, assignee or transferee (as the case may
be) without any restrictive legend in accordance with Section 5(d) below. The Company acknowledges that a breach by it of its
obligations hereunder will cause irreparable harm to the Investor. Accordingly, the Company acknowledges that the remedy at law
for a breach of its obligations under this Section 5(b) will be inadequate and agrees, in the event of a breach or threatened
breach by the Company of the provisions of this Section 5(b), that the Investor shall be entitled, in addition to all other available
remedies, to an order and/or injunction restraining any breach and requiring immediate issuance and transfer, without the necessity
of showing economic loss and without any bond or other security being required. The Company shall cause its counsel to issue the
legal opinion referred to in the Irrevocable Transfer Agent Instructions to the Company’s transfer agent upon the satisfaction
of any requirements under Regulations S. Any fees (with respect to the transfer agent, counsel to the Company or otherwise) associated
with the issuance of such opinion or the removal of any legends on any of the Securities shall be borne by the Company.

 

    	 	19	 

     

    

 

(c) Legends.
The Investor understands that the Securities have been issued (or will be issued in the case of the Conversion Shares or the Interest
Shares) pursuant to an exemption from registration or qualification under the 1933 Act and applicable state securities laws, and
except as set forth in Section 5(d) below, the Securities shall bear any legend as required by the “blue sky” laws
of any state and a restrictive legend in substantially the following form (and a stop-transfer order may be placed against transfer
of such stock certificates and the Company shall be required to refuse to register any transfer of the Securities not made in
accordance with applicable U.S. securities laws):

 

[NEITHER THE ISSUANCE
AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLE HAVE
BEEN][THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN] REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR
THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE “SECURITIES ACT”), AND APPLICABLE STATE SECURITIES LAWS, AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT
PURSUANT TO (I) AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION
NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS
EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR (IF REQUESTED BY THE COMPANY) TO SUCH EFFECT, THE SUBSTANCE OF WHICH
SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY OR (II) RULE 144 PROMULGATED UNDER THE SECURITIES ACT.

 

    	 	20	 

     

    

 

(d) Removal
of Legends. Certificates evidencing Securities shall not be required to contain the legend set forth in Section 5(c) above
or any other legend (i) while a registration statement covering the resale of such Securities is effective under the 1933 Act,
(ii) following any sale of such Securities pursuant to Rule 144 (assuming the transferor is not an affiliate of the Company),
(iii) if such Securities are eligible to be sold, assigned or transferred under Rule 144 (provided that a Buyer provides the Company
with reasonable assurances that such Securities are eligible for sale, assignment or transfer under Rule 144 which shall not include
an opinion of counsel), (iv) in connection with a sale, assignment or other transfer (other than under Rule 144), provided that
such Buyer provides the Company, at the Company’s expense, with an opinion of counsel to such Buyer, in a generally
acceptable form, to the effect that such sale, assignment or transfer of the Securities may be made without registration under
the applicable requirements of the 1933 Act or (v) if such legend is not required under applicable requirements of the 1933 Act
(including, without limitation, controlling judicial interpretations and pronouncements issued by the SEC). If a legend is not
required pursuant to the foregoing, the Company shall no later than three (3) Trading Days following the delivery by the Investor
to the Company or the transfer agent (with notice to the Company) of a legended certificate representing such Securities (endorsed
or with stock powers attached, signatures guaranteed, and otherwise in form necessary to affect the reissuance and/or transfer,
if applicable), as directed by such Investor, either: (A) provided that the Company’s transfer agent is participating in
the DTC Fast Automated Securities Transfer Program and such Securities are Conversion Shares or Interest Shares, credit the aggregate
number of shares of Common Stock to which such Investor shall be entitled to such Investor’s or its designee’s balance
account with DTC through its Deposit/Withdrawal at Custodian system or (B) if the Company’s transfer agent is not participating
in the DTC Fast Automated Securities Transfer Program, issue and deliver at the Company’s expense (via reputable overnight
courier) to such Investor, a certificate representing such Securities that is free from all restrictive and other legends, registered
in the name of such Investor or its designee (the date by which such credit is so required to be made to the balance account of
such Investor’s or such Investor’s nominee with DTC or such certificate is required to be delivered to such Investor
pursuant to the foregoing is referred to herein as the “Required Delivery Date”).

 

(e) Failure
to Timely Deliver; Buy-In. If the Company fails to (i) issue and deliver (or cause to be delivered) to the Investor by the
Required Delivery Date a certificate representing the Securities so delivered to the Company by such Investor that is free from
all restrictive and other legends or (ii) credit the balance account of such Investor’s or such Investor’s nominee
with DTC for such number of Conversion Shares so delivered to the Company, then, in addition to all other remedies available to
such Investor, the Company shall pay in cash to such Investor on each day after the Required Delivery Date that the issuance or
credit of such shares is not timely effected an amount equal to 2% of the original principal amount of such Investor’s Note.
In addition to the foregoing, if the Company fails to so properly deliver such unlegended certificates or so properly credit the
balance account of such Investor’s or such Investor’s nominee with DTC by the Required Delivery Date, and if on or
after the Required Delivery Date such Investor (or any other Person in respect, or on behalf, of such Investor) purchases (in
an open market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale by such Investor of all or
any portion of the number of shares of Common Stock, or a sale of a number of shares of Common Stock equal to all or any portion
of the number of shares of Common Stock, that such Investor so anticipated receiving from the Company without any restrictive
legend, then, in addition to all other remedies available to such Investor, the Company shall, within three (3) Trading Days after
such Investor’s request and in such Investor’s sole discretion, either (i) pay cash to such Investor in an amount
equal to such Investor’s total purchase price (including brokerage commissions and other out-ofpocket expenses, if any)
for the shares of Common Stock so purchased (including brokerage commissions and other out-of-pocket expenses, if any) (the “Buy-In
Price”), at which point the Company’s obligation to so deliver such certificate or credit such Investor’s
balance account shall terminate and such shares shall be cancelled, or (ii) promptly honor its obligation to so deliver to such
Investor a certificate or certificates or credit such Investor’s DTC account representing such number of shares of Common
Stock that would have been so delivered if the Company timely complied with its obligations hereunder and pay cash to such Investor
in an amount equal to the excess (if any) of the Buy-In Price over the product of (A) such number of shares of Conversion Shares
that the Company was required to deliver to such Investor by the Required Delivery Date multiplied by (B) the lowest Closing Sale
Price (as define in the Note) of the Common Stock on any Trading Day during the period commencing on the date of the delivery
by such Investor to the Company of the applicable Conversion Shares and ending on the date of such delivery and payment under
this clause (ii).

 

    	 	21	 

     

    

 

		6.	CONDITIONS
                                         TO THE COMPANY’S OBLIGATION TO SELL. 

 

(a) The obligation
of the Company hereunder to issue and sell the Note to the Investor at the Closing is subject to the satisfaction, at or before
the Closing Date, of each of the following conditions, provided that these conditions are for the Company’s sole benefit
and may be waived by the Company at any time in its sole discretion by providing the Investor with prior written notice thereof:

 

(i) The Investor
shall have executed each of the other Transaction Documents to which it is a party and delivered the same to the Company.

 

(ii) The Investor
shall have delivered to the Company the Purchase Price (less the amounts withheld pursuant to Section 4(g)) for the Note being
purchased by the Investor at the Closing by wire transfer of immediately available funds pursuant to the wire instructions provided
by the Company.

 

(iii) The representations
and warranties of the Investor shall be true and correct in all material respects as of the date when made and as of the Closing
Date as though originally made at that time (except for representations and warranties that speak as of a specific date, which
shall be true and correct as of such date), and the Investor shall have performed, satisfied and complied in all material respects
with the covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied with by such Investor
at or prior to the Closing Date.

 

		7.	CONDITIONS
                                         TO THE INVESTOR’S OBLIGATION TO PURCHASE. 

 

(a) The obligation
of the Investor hereunder to purchase the Note at the Closing is subject to the satisfaction, at or before the Closing Date, of
each of the following conditions, provided that these conditions are for the Investor’s sole benefit and may be waived by
the Investor at any time in its sole discretion by providing the Company with prior written notice thereof:

 

(i) The Company
and each Subsidiary (as the case may be) shall have duly executed and delivered to the Investor each of the Transaction Documents
to which it is a party and the Company shall have duly executed and delivered to the Investor the Note being purchased by the
Investor at the Closing pursuant to this Agreement.

 

(ii) The Company
shall have delivered to the Investor a copy of the Irrevocable Transfer Agent Instructions, in the form acceptable to the Investor.

 

    	 	22	 

     

    

 

(iii) The Company
shall have delivered to such Investor a certificate, in the form acceptable to the Investor, executed by the Secretary of the
Company and dated as of the Closing Date, as to the Signing Resolutions consistent with Section 3(b) as adopted by the Company’s
board of directors in a form reasonably acceptable to the Investor, together with a copy of the Signing Resolutions signed by
each member of the Company’s board of directors.

 

(iv) Each and
every representation and warranty of the Company shall be true and correct as of the date when made and as of the Closing Date
as though originally made at that time (except for representations and warranties that speak as of a specific date, which shall
be true and correct as of such date) and the Company shall have performed, satisfied and complied in all respects with the covenants,
agreements and conditions required to be performed, satisfied or complied with by the Company at or prior to the Closing Date.
The Investor shall have received a certificate, executed by the Chief Executive Officer of the Company, dated as of the Closing
Date, to the foregoing effect and as to such other matters as may be reasonably requested by the Investor in the form acceptable
to the Investor.

 

(v) The Company
shall have obtained all governmental, regulatory or third party consents and approvals, if any, necessary for the sale of the
Securities. No statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated
or endorsed by any court or governmental authority of competent jurisdiction that prohibits the consummation of any of the transactions
contemplated by the Transaction Documents.

 

(vi) Since the
date of execution of this Agreement, no event or series of events shall have occurred that reasonably would have or result in
a Material Adverse Effect.

 

(vii) Trading
in the Common Stock shall not have been suspended by the SEC or the Principal Market, the Company shall not have received any
final and non-appealable notice that the listing or quotation of the Common Stock on the Principal Market shall be terminated
on a date certain, there shall not have been imposed any suspension of electronic trading or settlement services by DTC with respect
to the Common Stock that is continuing, and the Company shall not have received any notice from DTC to the effect that a suspension
of electronic trading or settlement services by DTC with respect to the Common Stock is being imposed or is contemplated.

 

(viii) All reports,
schedules, registrations, forms, statements, information and other documents required to have been filed by the Company with the
Commission pursuant to the reporting requirements of the 1934 Act, including all material required to have been filed pursuant
to Section 13(a) or 15(d) of the 1934 Act, shall have been filed with the Commission under the 1934 Act.

 

(ix) The Company
and its Subsidiaries shall have delivered to the Investor such other documents, instruments or certificates relating to the transactions
contemplated by this Agreement as the Investor or its counsel may reasonably request.

 

    	 	23	 

     

    

 

		8.	TERMINATION.
                                         

 

In the event
that the Closing shall not have occurred within five (5) days after the date hereof, then the Investor shall have the right to
terminate its obligations under this Agreement at any time on or after the close of business on such date without liability of
the Investor to any other party; provided, however, the right to terminate its obligations under this Agreement pursuant to this
Section 8 shall not be available to the Investor if the failure of the transactions contemplated by this Agreement to have been
consummated by such date is the result of the Investor’s breach of this Agreement; and provided, further that no such termination
shall affect any obligation of the Company under this Agreement to reimburse the Investor for the expenses described in Section
4(g) above. Nothing contained in this Section 8 shall be deemed to release any party from any liability for any breach by such
party of the terms and provisions of this Agreement or the other Transaction Documents or to impair the right of any party to
compel specific performance by any other party of its obligations under this Agreement or the other Transaction Documents.

 

		9.	MISCELLANEOUS.
                                         

 

(a) Governing
Law; Jurisdiction; Jury Trial. All questions concerning the construction, validity, enforcement and interpretation of this Agreement
shall be governed by the internal laws of the State of California, without giving effect to any choice of law or conflict of law
provision or rule (whether of the State of California or any other jurisdictions) that would cause the application of the laws
of any jurisdictions other than the State of California. Each party hereby irrevocably submits to the exclusive jurisdiction of
the state and federal courts sitting in The City of Los Angeles, County of Los Angeles, for the adjudication of any dispute hereunder
or under any of the other Transaction Documents or in connection herewith or with any transaction contemplated hereby or thereby
or discussed herein or therein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any
claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought
in an inconvenient forum or that the venue of such suit, action or proceeding is improper. By the execution and delivery of this
Agreement, the Company acknowledges that it has, by separate written instrument, irrevocably designated and appointed Registered
Agent Solutions, Inc., 1220 South Street, Suite 150, Sacramento, CA 95811 (together with any successor, the “Agent for
Service”) as its authorized agent upon which process may be served in any suit or proceeding arising out of or relating
to this Agreement or the Securities that may be instituted in any state or federal court sitting in Los Angeles County or brought
under federal or state securities laws, and acknowledges that the Agent for Service has accepted such designation. The Company
further agrees to take any and all action, including the execution and filing of any and all such documents and instruments, as
may be necessary to continue such designation and appointment of the Agent for Service in full force and effect so long as the
Note shall be outstanding. Service upon such Agent for Service in accordance with this Section 9(a) shall be deemed completed
whether or not forwarded to or received by the Company. If such Agent for Service ceases to be able to act as such, resigns as
such Agent for Service or to have an address in Los Angeles, the Company agrees to irrevocably appoint a new agent acceptable
to the Investor to receive on behalf of the Company service of any legal process and to deliver to the Investor within 14 days
a copy of a written acceptance of appointment by such agent. Each party hereby irrevocably waives personal service of process
and consents to process being served in any such suit, action or proceeding by mailing a copy thereof to such party at the address
for such notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process
and notice thereof. Nothing contained herein shall (i) limit, or be deemed to limit, in any way any right to serve process in
any manner permitted by law, (ii) operate, or shall be deemed to operate, to preclude the Investor from bringing suit or taking
other legal action against the Company in any other jurisdiction to collect on the Company’s obligations to such Investor
or to enforce a judgment or other court ruling in favor of such Investor or (iii) limit, or be deemed to limit, any provision
of Section 22 of the Note. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A JURY
TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR UNDER ANY OTHER TRANSACTION DOCUMENT OR IN CONNECTION WITH OR ARISING OUT
OF THIS AGREEMENT, ANY OTHER TRANSACTION DOCUMENT OR ANY TRANSACTION CONTEMPLATED HEREBY OR THEREBY. 

 

    	 	24	 

     

    

 

(b) Counterparts.
This Agreement may be executed in two or more counterparts, all of which shall be considered one and the same agreement and shall
become effective when counterparts have been signed by each party and delivered to the other party. In the event that any signature
is delivered by facsimile transmission or by an e-mail which contains a portable document format (.pdf) file of an executed signature
page, such signature page shall create a valid and binding obligation of the party executing (or on whose behalf such signature
is executed) with the same force and effect as if such signature page were an original thereof.

 

(c) Headings;
Gender. The headings of this Agreement are for convenience of reference and shall not form part of, or affect the interpretation
of, this Agreement. Unless the context clearly indicates otherwise, each pronoun herein shall be deemed to include the masculine,
feminine, neuter, singular and plural forms thereof. The terms “including,” “includes,” “include”
and words of like import shall be construed broadly as if followed by the words “without limitation.” The terms “herein,”
“hereunder,” “hereof” and words of like import refer to this entire Agreement instead of just the provision
in which they are found.

 

(d) Severability.
If any provision of this Agreement is prohibited by law or otherwise determined to be invalid or unenforceable by a court of competent
jurisdiction, the provision that would otherwise be prohibited, invalid or unenforceable shall be deemed amended to apply to the
broadest extent that it would be valid and enforceable, and the invalidity or unenforceability of such provision shall not affect
the validity of the remaining provisions of this Agreement so long as this Agreement as so modified continues to express, without
material change, the original intentions of the parties as to the subject matter hereof and the prohibited nature, invalidity
or unenforceability of the provision(s) in question does not substantially impair the respective expectations or reciprocal obligations
of the parties or the practical realization of the benefits that would otherwise be conferred upon the parties. The parties will
endeavor in good faith negotiations to replace the prohibited, invalid or unenforceable provision(s) with a valid provision(s),
the effect of which comes as close as possible to that of the prohibited, invalid or unenforceable provision(s). Notwithstanding
anything to the contrary contained in this Agreement or any other Transaction Document (and without implication that the following
is required or applicable), it is the intention of the parties that in no event shall amounts and value paid by the Company and/or
its Subsidiaries (as the case may be), or payable to or received by the Investor, under the Transaction Documents (including without
limitation, any amounts that would be characterized as “interest” under applicable law) exceed amounts permitted under
any applicable law. Accordingly, if any obligation to pay, payment made to the Investor, or collection by the Investor pursuant
the Transaction Documents is finally judicially determined to be contrary to any such applicable law, such obligation to pay,
payment or collection shall be deemed to have been made by mutual mistake of such Investor, the Company and its Subsidiaries and
such amount shall be deemed to have been adjusted with retroactive effect to the maximum amount or rate of interest, as the case
may be, as would not be so prohibited by the applicable law. Such adjustment shall be effected, to the extent necessary, by reducing
or refunding, at the option of such Investor, the amount of interest or any other amounts which would constitute unlawful amounts
required to be paid or actually paid to such Investor under the Transaction Documents. For greater certainty, to the extent that
any interest, charges, fees, expenses or other amounts required to be paid to or received by such Investor under any of the Transaction
Documents or related thereto are held to be within the meaning of “interest” or another applicable term to otherwise
be violative of applicable law, such amounts shall be pro-rated over the period of time to which they relate.

 

    	 	25	 

     

    

 

(e) Entire
Agreement; Amendments. This Agreement, the other Transaction Documents and the schedules and exhibits attached hereto and
thereto and the instruments referenced herein and therein supersede all other prior oral or written agreements between the Investor,
the Company, its Subsidiaries, their affiliates and Persons acting on their behalf solely with respect to the matters contained
herein and therein, and this Agreement, the other Transaction Documents, the schedules and exhibits attached hereto and thereto
and the instruments referenced herein and therein contain the entire understanding of the parties solely with respect to the matters
covered herein and therein; provided, however, nothing contained in this Agreement or any other Transaction Document shall (or
shall be deemed to) (i) have any effect on any agreements the Investor has entered into with the Company or any of its Subsidiaries
prior to the date hereof with respect to any prior investment made by the Investor in the Company or (ii) waive, alter, modify
or amend in any respect any obligations of the Company or any of its Subsidiaries, or any rights of or benefits to the Investor
or any other Person, in any agreement entered into prior to the date hereof between or among the Company and/or any of its Subsidiaries
and the Investor, and all such agreements shall continue in full force and effect. Except as specifically set forth herein or
therein, neither the Company nor the Investor makes any representation, warranty, covenant or undertaking with respect to such
matters. For clarification purposes, the Recitals are part of this Agreement. No provision of this Agreement may be amended other
than by an instrument in writing signed by the Company and the Investor, and any amendment to any provision of this Agreement
made in conformity with the provisions of this Section 9(e) shall be binding on the Investor and holders of Securities, as applicable,
provided that no such amendment shall be effective to the extent that it (1) applies to less than all of the holders of the Securities
then outstanding or (2) imposes any obligation or liability on the Investor without the Investor’s prior written consent
(which may be granted or withheld in the Investor’s sole discretion). No waiver shall be effective unless it is in writing
and signed by an authorized representative of the waiving party, provided that the Investor may waive any provision of this Agreement,
and any waiver of any provision of this Agreement made in conformity with the provisions of this Section 9(e) shall be binding
on the Investor and holders of Securities, as applicable, provided that no such waiver shall be effective to the extent that it
(1) applies to less than all of the holders of the Securities then outstanding (unless a party gives a waiver as to itself only)
or (2) imposes any obligation or liability on the Investor without such Investor’s prior written consent (which may be granted
or withheld in the Investor’s sole discretion). The Company has not, directly or indirectly, made any agreements with the
Investor relating to the terms or conditions of the transactions contemplated by the Transaction Documents except as set forth
in the Transaction Documents. Without limiting the foregoing, the Company confirms that, except as set forth in this Agreement,
the Investor has not made any commitment or promise or has any other obligation to provide any financing to the Company, any Subsidiary
or otherwise. As a material inducement for the Investor to enter into this Agreement, the Company expressly acknowledges and agrees
that (i) no due diligence or other investigation or inquiry conducted by the Investor, any of its advisors or any of its representatives
shall affect the Investor’s right to rely on, or shall modify or qualify in any manner or be an exception to any of, the
Company’s representations and warranties contained in this Agreement or any other Transaction Document and (ii) unless a
provision of this Agreement or any other Transaction Document is expressly preceded by the phrase “except as disclosed in
the Public Reports,” nothing contained in the Public Reports shall affect the Investor’s right to rely on, or shall
modify or qualify in any manner or be an exception to any of, the Company’s representations and warranties contained in
this Agreement or any other Transaction Document.

 

    	 	26	 

     

    

 

(f) Notices.
Any notices, consents, waivers or other communications required or permitted to be given under the terms of this Agreement must
be in writing and will be deemed to have been delivered: (i) upon receipt, if delivered personally; (ii) when sent, if sent by
facsimile (provided confirmation of transmission is mechanically or electronically generated and kept on file by the sending party);
(iii) when sent, if sent by e-mail (provided that such sent e-mail is kept on file (whether electronically or otherwise) by the
sending party and the sending party does not receive an automatically generated message from the recipient’s e-mail server
that such e-mail could not be delivered to such recipient) and (iv) if sent by overnight courier service, one (1) Business Day
after deposit with an overnight courier service with next day delivery specified, in each case, properly addressed to the party
to receive the same. The addresses, facsimile numbers and/or e-mail addresses for such communications are as follows:

 

If to the Company:

 

FreeSeas Inc.

c/o Registered
Agent Solutions, Inc.

1220 South Street,
Suite 150 Sacramento,

CA 95811

 

With a copy (for
informational purposes only) to:

 

Sichenzia Ross
Friedman Ference LLP

61 Broadway, 32nd
Floor

New York, NY 10006

Facsimile: (212)
930-9725

E-mail address:
mross@srff.com

Attention: Marc
J. Ross, Esq.

 

If to the Investor:

 

Oakmore Opportunity
Fund I LP

2029 Century Park
East, Suite 900

Los Angeles, CA
90067

Facsimile: 310
553 5015

E-mail address:
ssokol@sokollaw.com

Attention: Stacy L. Sokol, Esq.

 

or to such other
address, facsimile number or e-mail address and/or to the attention of such other Person as the recipient party has specified
by written notice given to each other party five (5) days prior to the effectiveness of such change. Written confirmation of receipt
(A) given by the recipient of such notice, consent, waiver or other communication, (B) mechanically or electronically generated
by the sender’s facsimile machine containing the time, date and recipient facsimile number or (C) provided by an overnight
courier service shall be rebuttable evidence of personal service, receipt by facsimile or receipt from an overnight courier service
in accordance with clause (i), (ii) or (iv) above, respectively. A copy of the e-mail transmission containing the time, date and
recipient e-mail address shall be rebuttable evidence of receipt by e-mail in accordance with clause (iii) above.

 

    	 	27	 

     

    

 

(g) Successors
and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors
and assigns, including, as contemplated below, any assignee or transferee of any of the Securities. The Company shall not assign
this Agreement or any rights or obligations hereunder without the prior written consent of each of the Investor (which may be
granted or withheld in the sole discretion of the Investor), including, without limitation, by way of a Fundamental Transaction
(as defined in the Note) (unless the Company is in compliance with the applicable provisions governing Fundamental Transactions
set forth in the Note). The Investor may assign some or all of its rights hereunder in connection with any assignment or transfer
of any of its Securities without the consent of the Company, in which event such assignee or transferee (as the case may be) shall
be deemed to be an Investor hereunder with respect to such assigned rights.

 

(h) No Third
Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective permitted successors
and assigns, and is not for the benefit of, nor may any provision hereof be enforced by, any other Person, other than the Indemnitees
referred to in Section 9(k).

 

(i) Survival.
The representations, warranties, agreements and covenants shall survive the Closing.

 

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

 

    	 	28	 

     

    

 

(k) Indemnification.
In consideration of the Investor’s execution and delivery of the Transaction Documents and acquiring the Securities thereunder
and in addition to all of the Company’s other obligations under the Transaction Documents, the Company shall defend, protect,
indemnify and hold harmless the Investor and each holder of any Securities and all of their stockholders, partners, members, officers,
directors, employees and direct or indirect investors and any of the foregoing Persons’ agents or other representatives
(including, without limitation, those retained in connection with the transactions contemplated by this Agreement) (collectively,
the “Indemnitees”) from and against any and all actions, causes of action, suits, claims, losses, costs, penalties,
liabilities and damages, and expenses in connection therewith (irrespective of whether any such Indemnitee is a party to the action
for which indemnification hereunder is sought), and including reasonable attorneys’ fees, court costs, and disbursements
(the “Indemnified Liabilities”), incurred by any Indemnitee as a result of, or arising out of, or relating
to (a) any misrepresentation or breach of any representation or warranty made by the Company in any of the Transaction Documents,
(b) any breach of any covenant, agreement or obligation of the Company contained in any of the Transaction Documents, (c) any
failure by the Company to obtain the approval for listing of all of the Conversion Shares and Interest Shares on the Principal
Market promptly following the date hereof, or (d) any cause of action, suit, proceeding or claim brought or made against such
Indemnitee by a third party (including for these purposes a derivative action brought on behalf of the Company or any Subsidiary)
or which otherwise involves such Indemnitee that arises out of or results from (i) the execution, delivery, performance or enforcement
of any of the Transaction Documents, (ii) any transaction financed or to be financed in whole or in part, directly or indirectly,
with the proceeds of the issuance of the Securities, (iii) any disclosure properly made by the Investor pursuant to Section 4(i),
or (iv) the status of the Investor or holder of the Securities either as an investor in the Company pursuant to the transactions
contemplated by the Transaction Documents or as a party to this Agreement (including, without limitation, as a party in interest
or otherwise in any action or proceeding for injunctive or other equitable relief).

 

To the extent that
the foregoing undertaking by the Company may be unenforceable for any reason, the Company shall make the maximum contribution
to the payment and satisfaction of each of the Indemnified Liabilities which is permissible under applicable law.

 

(l) Construction.
The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and
no rules of strict construction will be applied against any party. No specific representation or warranty shall limit the generality
or applicability of a more general representation or warranty. Each and every reference to share prices, shares of Common Stock
and any other numbers in this Agreement that relate to the Common Stock shall be automatically adjusted for stock splits, stock
dividends, stock combinations and other similar transactions that occur with respect to the Common Stock after the date of this
Agreement.

 

(m) Remedies.
The Investor and each holder of any Securities shall have all rights and remedies set forth in the Transaction Documents and all
rights and remedies which such holders have been granted at any time under any other agreement or contract and all of the rights
which such holders have under any law. Any Person having any rights under any provision of this Agreement shall be entitled to
enforce such rights specifically (without posting a bond or other security), to recover damages by reason of any breach of any
provision of this Agreement and to exercise all other rights granted by law. Furthermore, the Company recognizes that in the event
that it or any Subsidiary fails to perform, observe, or discharge any or all of its or such Subsidiary’s (as the case may
be) obligations under the Transaction Documents, any remedy at law may prove to be inadequate relief to the Investor. The Company
therefore agrees that the Investor shall be entitled to seek specific performance and/or temporary, preliminary and permanent
injunctive or other equitable relief from any court of competent jurisdiction in any such case without the necessity of proving
actual damages and without posting a bond or other security. The remedies provided in this Agreement and the other Transaction
Documents shall be cumulative and in addition to all other remedies available under this Agreement and the other Transaction Documents,
at law or in equity (including a decree of specific performance and/or other injunctive relief).

 

    	 	29	 

     

    

 

(n) Withdrawal
Right. Notwithstanding anything to the contrary contained in (and without limiting any similar provisions of) the Transaction
Documents, whenever the Investor exercises a right, election, demand or option under a Transaction Document and the Company does
not timely perform its related obligations within the periods therein provided, then the Investor may rescind or withdraw, in
its sole discretion from time to time upon written notice to the Company or such Subsidiary (as the case may be), any relevant
notice, demand or election in whole or in part without prejudice to its future actions and rights

 

(o) Payment
Set Aside; Currency. To the extent that the Company makes a payment or payments to the Investor hereunder or pursuant to any
of the other Transaction Documents or the Investor enforces or exercises its rights hereunder or thereunder, and such payment
or payments or the proceeds of such enforcement or exercise or any part thereof are subsequently invalidated, declared to be fraudulent
or preferential, set aside, recovered from, disgorged by or are required to be refunded, repaid or otherwise restored to the Company,
a trustee, receiver or any other Person under any law (including, without limitation, any bankruptcy law, foreign, state or federal
law, common law or equitable cause of action), then to the extent of any such restoration the obligation or part thereof originally
intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such
enforcement or setoff had not occurred. Until the Note is no longer outstanding, the Company shall not effect any stock combination,
reverse stock split or other similar transaction (or make any public announcement or disclosure with respect to any of the foregoing)
without the prior written consent of the Investor (which may be granted or withheld in the sole discretion of the Investor), provided,
however, that the Company may effect one or more reverse stock splits without the Investor’s consent solely for purposes
of the Company achieving compliance with the rules and regulations of the Principal Market and maintaining the listing of the
Company’s Common Stock on the Principal Market. Unless otherwise expressly indicated, all dollar amounts referred to in
this Agreement and the other Transaction Documents are in United States Dollars (“U.S. Dollars”), and all amounts
owing under this Agreement and all other Transaction Documents shall be paid in U.S. Dollars. All amounts denominated in other
currencies (if any) shall be converted into the U.S. Dollar equivalent amount in accordance with the Exchange Rate on the date
of calculation. “Exchange Rate” means, in relation to any amount of currency to be converted into U.S. Dollars
pursuant to this Agreement, the U.S. Dollar exchange rate as published in the Wall Street Journal on the relevant date of calculation.

 

 

[signature pages follow]

 

    	 	30	 

     

    

 

IN WITNESS WHEREOF,
Investor and the Company have caused their respective signature page to this Agreement to be duly executed as of the date first
written above.

 

	 	COMPANY :
	 	 
	 	FREESEAS INC.
	 	A CORPORATION ORGANIZED IN
    THE
	 	REPUBLIC OF THE MARSHALL ISLANDS
	 	 	 
	 	By:	/s/ Dimitris
    Papadopoulos
	 	Name: 	Dimitris
    Papadopoulos
	 	Title:
    	Chief Financial Officer

 

    	 	31	 

     

    

 

IN WITNESS WHEREOF,
Investor and the Company have caused their respective signature
page to this Agreement to be duly executed as of the date first written above.

 

	 	INVESTOR:
	 	 
	 	OAKMORE
                                         OPPORUTNITY FUND I, LP, a Delaware limited partnership

	 	 	 
	 	By:	
	 	Name: 	
	 	Title:
    	           

 

 

32Exhibit 4.65

 

CONVERTIBLE
NOTE

 

NEITHER
THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE [CONVERTIBLE
HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND APPLICABLE STATE
SECURITIES LAWS, AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO (I) AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OR AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR (IF REQUESTED
BY THE COMPANY) TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY OR (II) RULE 144 PROMULGATED
UNDER THE SECURITIES ACT. 

 

ANY TRANSFEREE
OF THIS NOTE SHOULD CAREFULLY REVIEW THE TERMS OF THIS NOTE, INCLUDING SECTIONS 3(c)(iii) AND 17(a) HEREOF. THE PRINCIPAL AMOUNT
REPRESENTED BY THIS NOTE AND, ACCORDINGLY, THE SECURITIES ISSUABLE UPON CONVERSION HEREOF MAY BE LESS THAN THE AMOUNTS SET FORTH
ON THE FACE HEREOF PURSUANT TO SECTION 3(c)(iii) OF THIS NOTE. 

 

FREESEAS, INC.

 

CONVERTIBLE
NOTE

 

	Issuance Date: February 24, 2017	Original Principal Amount: U.S.$50,000.00

 

FOR VALUE
RECEIVED, FREESEAS INC., a corporation incorporated and existing under the laws of the Republic of the Marshall Islands (the
“Company”), hereby promises to pay to the order of or its registered assigns (“Holder”)
the amount set out above as the Original Principal Amount (as reduced pursuant to the terms hereof pursuant to redemption, conversion
or otherwise, the “Principal”) when due, whether upon the Maturity Date (as defined below), acceleration,
redemption or otherwise (in each case in accordance with the terms hereof) and to pay interest (“Interest”)
on any outstanding Principal (as defined below) (as such interest on any outstanding Principal may be reduced pursuant to the terms
hereof pursuant to redemption, conversion or otherwise) at the applicable Interest Rate (as defined below) from the date set out
above as the Issuance Date (the “Issuance Date”) until the same becomes due and payable, whether upon
the Maturity Date or acceleration, conversion, redemption or otherwise (in each case in accordance with the terms hereof). This
Convertible Note (this “Note”, including all Convertible Notes issued in exchange, transfer or replacement
hereof, collectively, the “Notes”) is issued pursuant to the pursuant to the Securities Purchase Agreement
(as defined below) on the Closing Date (as defined below). Certain capitalized terms used herein are defined in Section 28.

 

    	 		 

     

    

 

1.  PAYMENTS
OF PRINCIPAL. On the Maturity Date, the Company shall pay to the Holder an amount in cash representing all outstanding
Principal, accrued and unpaid Interest and accrued and unpaid Late Charges (as defined in Section 23(c)) on such Principal
and Interest). Other than as specifically permitted by this Note, the Company may not prepay any portion of the outstanding
Principal, accrued and unpaid Interest or accrued and unpaid Late Charges on Principal and Interest, if any.

 

2.  INTEREST;
INTEREST RATE.

 

(a)
Interest on this Note shall commence accruing on the Issuance Date, shall accrue daily at the Interest Rate on the
outstanding Principal amount from time to time, shall be computed on the basis of a 360-day year and twelve 30-day months and
shall be payable to the Holder on the Maturity Date or any applicable Redemption Date (each, an “Interest
Date”). Interest shall be payable on each Interest Date, to the record holder of this Note on the applicable
Interest Date, in freely-tradable shares of Common Stock that have been registered for resale by the Holder
("Interest Shares") under the Securities Act of 1933, as amended, so long as there has been no Equity
Conditions Failure; provided however, that the Company may, at its option following notice to the Holder, pay Interest on any
Interest Date in cash ("Cash Interest") or in a combination of Cash Interest and Interest Shares. The
Company shall deliver a written notice (each, an "Interest Election Notice") to each holder of the
Notes on or prior to the Interest Notice Due Date (the date such notice is delivered to all of the holder, the
"Interest Notice Date") which notice (i) either (A) confirms that Interest to be paid on such
Interest Date shall be paid entirely in Interest Shares or (B) elects to pay Interest as Cash Interest or a combination of
Cash Interest and Interest Shares and specifies the amount of Interest that shall be paid as Cash Interest and the amount of
Interest, if any, that shall be paid in Interest Shares and (ii) if any Interest is to be paid in Interest Shares, certifies
that there has been no Equity Conditions Failure. If the Equity Conditions are not satisfied as of the Interest Notice Date,
then unless the Company has elected to pay such Interest as Cash Interest, the Interest Notice shall indicate that unless the
Holder waives the Equity Conditions, the Interest shall be paid as Cash Interest. If the Equity Conditions were satisfied as
of the Interest Notice Date but the Equity Conditions are no longer satisfied at any time prior to the Interest Date, the
Company shall provide the Holder a subsequent notice to that effect indicating that unless the Holder waives the Equity
Conditions, the Interest shall be paid in cash. Interest to be paid on an Interest Date in Interest Shares shall be paid in a
number of fully paid and nonassessable shares (rounded to the nearest whole share in accordance with Section 3(a)) of Common
Stock equal to the quotient of (1) the amount of Interest payable on such Interest Date less any Cash Interest paid and (2)
the Conversion Price in effect on the applicable Interest Date.

 

(b)
When any Interest Shares are to be paid on an Interest Date, the Company shall (i) (A) provided that the Company's transfer
agent (the "Transfer Agent") is participating in the Depository Trust Company
("DTC") Fast Automated Securities Transfer Program, credit such aggregate number of Interest Shares
to which the Holder shall be entitled to the Holder's or its designee's balance account with DTC through its
Deposit/Withdrawal at Custodian system, or (B) if the Transfer Agent is not participating in the DTC Fast Automated
Securities Transfer Program, issue and deliver on the applicable Interest Date, to the address set forth in the register
maintained by the Company for such purpose pursuant to the Securities Purchase Agreement or to such address as specified by
the Holder in writing to the Company at least two (2) Business Days prior to the applicable Interest Date, a certificate,
registered in the name of the Holder or its designee (and without any restrictive legend or stop transfer order maintained
against it), for the number of Interest Shares to which the Holder shall be entitled and (ii) with respect to each Interest
Date, pay to the Holder, in cash by wire transfer of immediately available funds, the amount of any Cash Interest.

 

    	 	2	 

     

    

 

(c)
Prior to the payment of Interest on an Interest Date, Interest on this Note shall accrue at the Interest Rate and be payable
by way of inclusion of the Interest in the Conversion Amount on each Conversion Date in accordance with Section 3(b)(i). From
and after the occurrence and during the continuance of any Event of Default, the Interest Rate shall automatically be
increased to eighteen percent (18.0%) per annum. In the event that such Event of Default is subsequently cured, the
adjustment referred to in the preceding sentence shall cease to be effective as of the date of such cure; provided that the
Interest as calculated and unpaid at such increased rate during the continuance of such Event of Default shall continue to
apply to the extent relating to the days after the occurrence of such Event of Default through and including the date of such
cure of such Event of Default. The Company shall pay any and all taxes that may be payable with respect to the issuance and
delivery of Interest Shares.

 

3.  CONVERSION
OF NOTES. This Note shall be convertible into validly issued, fully paid and non-assessable shares of Common Stock (as defined
below), on the terms and conditions set forth in this Section 3.

 

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

 

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

 

(i)
“Conversion Amount” means the portion of the Principal to be converted, redeemed or otherwise with
respect to which this determination is being made, plus all accrued and unpaid Interest with respect to such portion of the
Principal amount and accrued and unpaid Late Charges with respect to such portion of such Principal and such Interest.

 

(ii)
“Conversion Price” means, for any date of determination, the the product of (x) the lowest VWAP of the
Common Stock during the twenty-one (21) consecutive Trading Days ending and including the Trading Day immediately preceding the
applicable Conversion Date (the “Variable Conversion Base Price”) and (y) sixty percent (60%). All such
determinations to be appropriately adjusted for any stock split, stock dividend, stock combination or other similar transaction
during any such measuring period.

 

    	 	3	 

     

    

 

(c)
Mechanics of Conversion.

 

(i)  Optional
Conversion. To convert any Conversion Amount into shares of Common Stock on any date (a “Conversion Date”),
the Holder shall deliver (whether via facsimile or otherwise), for receipt on or prior to 11:59 p.m., New York time, on such date,
a copy of an executed notice of conversion in the form attached hereto as Exhibit I (the “Conversion Notice”)
to the Company. If required by Section 3(c)(iii), the Holder shall surrender this Note to a nationally recognized overnight delivery
service for delivery to the Company (or an indemnification undertaking with respect to this Note in the case of its loss, theft
or destruction as contemplated by Section 17(b)). On or before the first (1st) Trading Day following the date of receipt
of a Conversion Notice, the Company shall transmit by facsimile an acknowledgment of confirmation, in the form attached hereto
as Exhibit II, of receipt of such Conversion Notice to the Holder. On or before the second (2nd) Trading Day
following the date of receipt of a Conversion Notice, the Company shall (1) provided that the Transfer Agent is participating in
the DTC Fast Automated Securities Transfer Program and such shares of Common Stock may be issued without restrictive legend in
accordance with Section 5(d) of the Securities Purchase Agreement, credit such aggregate number of shares of Common Stock to which
the Holder shall be entitled to the Holder’s or its designee’s balance account with DTC through its Deposit/Withdrawal
at Custodian system or (2) if the Transfer Agent is not participating in the DTC Fast Automated Securities Transfer Program or
such shares of Common Stock may not be issued without restrictive legend in accordance with Section 5(d) of the Securities Purchase
Agreement, issue and deliver (via reputable overnight courier) to the address as specified in the Conversion Notice, a certificate,
registered in the name of the Holder or its designee, for the number of shares of Common Stock to which the Holder shall be entitled.
If this Note is physically surrendered for conversion as required by Section 3(c)(iii) and the outstanding Principal of this Note
is greater than the Principal portion of the Conversion Amount being converted, then the Company shall as soon as practicable and
in no event later than three (3) Trading Days after receipt of this Note and at its own expense, issue and deliver to the Holder
(or its designee) a new Note (in accordance with Section 17(d)) representing the outstanding Principal not converted. The Person
or Persons entitled to receive the shares of Common Stock issuable upon a conversion of this Note shall be treated for all purposes
as the record holder or holders of such shares of Common Stock on the Conversion Date.

 

    	 	4	 

     

    

 

(ii)  Company’s
Failure to Timely Convert. If the Company shall fail, for any reason or for no reason, to issue to the Holder within
three (3) Trading Days after the Company’s receipt of a Conversion Notice (whether via facsimile or otherwise) (the
“Share Delivery Deadline”), a certificate for the number of shares of Common Stock to which the Holder is
entitled and register such shares of Common Stock on the Company’s share register or to credit the Holder’s or
its designee’s balance account with DTC for such number of shares of Common Stock to which the Holder is entitled upon
the Holder’s conversion of any Conversion Amount (as the case may be) (a “Conversion Failure”) then,
in addition to all other remedies available to the Holder, (1) the Company shall pay in cash to the Holder on each day after
such Share Delivery Deadline that the issuance of such shares of Common Stock is not timely effected an amount equal to 1% of
the product of (A) the sum of the number of shares of Common Stock not issued to the Holder on a timely basis and to which
the Holder is entitled multiplied by (B) the Closing Sale Price of the Common Stock on the Trading Day immediately preceding
the last possible date which the Company could have issued such shares of Common Stock to the Holder without violating
Section 3(c)(i) and (2) the Holder, upon written notice to the Company, may void its Conversion Notice with respect to, and
retain or have returned (as the case may be) any portion of this Note that has not been converted pursuant to such Conversion
Notice, provided that the voiding of a Conversion Notice shall not affect the Company’s obligations to make any
payments which have accrued prior to the date of such notice pursuant to this Section 3(c)(ii) or otherwise. In addition to
the foregoing, if on or prior to the Share Delivery Deadline, the Company shall fail to issue and deliver a certificate to
the Holder and register such shares of Common Stock on the Company’s share register or credit the Holder’s or its
designee’s balance account with DTC for the number of shares of Common Stock to which the Holder is entitled upon the
Holder’s conversion hereunder (as the case may be), and if on or after such Share Delivery Deadline the Holder
purchases (in an open market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale by the
Holder of all or any portion of the number of shares of Common Stock issuable upon such conversion that the Holder so
anticipated receiving from the Company, then, in addition to all other remedies available to the Holder, the Company
shall, within three (3) Business Days after receipt of the Holder’s request and in the Holder’s discretion,
either: (I) pay cash to the Holder in an amount equal to the Holder’s total purchase price (including brokerage
commissions and other out-of-pocket expenses, if any) for the shares of Common Stock so purchased (including, without
limitation, by any other Person in respect, or on behalf, of the Holder) (the “Buy-In Price”), at which
point the Company’s obligation to so issue and deliver such certificate or credit the Holder’s balance account
with DTC for the number of shares of Common Stock to which the Holder is entitled upon the Holder’s conversion
hereunder (as the case may be) (and to issue such shares of Common Stock) shall terminate, or (II) promptly honor its
obligation to so issue and deliver to the Holder a certificate or certificates representing such shares of Common Stock or
credit the Holder’s balance account with DTC for the number of shares of Common Stock to which the Holder is entitled
upon the Holder’s conversion hereunder (as the case may be) and pay cash to the Holder in an amount equal to the excess
(if any) of the Buy-In Price over the product of (x) such number of shares of Common Stock multiplied by (y) the lowest
Closing Sale Price of the Common Stock on any Trading Day during the period commencing on the date of the
applicable Conversion Notice and ending on the date of such issuance and payment under this clause (II).

 

(iii)  Book-Entry.
Notwithstanding anything to the contrary set forth in this Section 3, following conversion of any portion of this Note in
accordance with the terms hereof, the Holder shall not be required to physically surrender this Note to the Company unless
(A) the full Conversion Amount represented by this Note is being converted (in which event this Note shall be delivered to
the Company following conversion thereof as contemplated by Section 3(c)(i)) or (B) the Holder has provided the Company with
prior written notice (which notice may be included in a Conversion Notice) requesting reissuance of this Note upon physical
surrender of this Note. The Holder and the Company shall maintain records showing the Principal, Interest and Late Charges
converted and/or paid and/or adjusted (as the case may be) and the dates of such conversions and/or payments and/or
adjustments (as the case may be) or shall use such other method, reasonably satisfactory to the Holder and the Company, so as
not to require physical surrender of this Note upon conversion.

 

    	 	5	 

     

    

 

(iv)  Pro
Rata Conversion; Disputes. In the event of a dispute as to the number of shares of Common Stock issuable to the Holder in
connection with a conversion of this Note, the Company shall issue to the Holder the number of shares of Common Stock not in
dispute and resolve such dispute in accordance with Section 22.

 

(d) Limitations
on Conversions. Notwithstanding anything to the contrary contained in this Note, this Note shall not be convertible by
the Holder hereof, and the Company shall not effect any conversion of this Note or otherwise issue any shares of Common Stock
pursuant hereto, to the extent (but only to the extent) that after giving effect to such conversion or other share issuance
hereunder the Holder (together with its affiliates) would beneficially own in excess of 4.99% (the “Maximum
Percentage”) of the Common Stock. To the extent the above limitation applies, the determination of whether this
Note shall be convertible (vis-à-vis other convertible, exercisable or exchangeable securities owned by the Holder or
any of its affiliates) and of which such securities shall be convertible, exercisable or exchangeable (as among all such
securities owned by the Holder and its affiliates) shall, subject to such Maximum Percentage limitation, be determined on the
basis of the first submission to the Company for conversion, exercise or exchange (as the case may be). No prior inability to
convert this Note, or to issue shares of Common Stock, pursuant to this paragraph shall have any effect on the applicability
of the provisions of this paragraph with respect to any subsequent determination of convertibility. For purposes of this
paragraph, beneficial ownership and all determinations and calculations (including, without limitation, with respect to
calculations of percentage ownership) shall be determined in accordance with Section 13(d) of the 1934 Act (as defined in the
Securities Purchase Agreement) and the rules and regulations promulgated thereunder. The provisions of this paragraph shall
be implemented in a manner otherwise than in strict conformity with the terms of this paragraph to correct this paragraph (or
any portion hereof) which may be defective or inconsistent with the intended Maximum Percentage beneficial ownership
limitation herein contained or to make changes or supplements necessary or desirable to properly give effect to such Maximum
Percentage limitation. The limitations contained in this paragraph shall apply to a successor Holder of this Note. The
holders of Common Stock shall be third party beneficiaries of this paragraph and the Company may not waive this
paragraph without the consent of holders of a majority of its Common Stock. For any reason at any time, upon the written or
oral request of the Holder, the Company shall within one (1) Business Day confirm orally and in writing to the Holder the
number of shares of Common Stock then outstanding, including by virtue of any prior conversion or exercise of convertible or
exercisable securities into Common Stock, including, without limitation, pursuant to this Note or securities issued pursuant
to the Securities Purchase Agreement. By written notice to the Company, at any time the Holder may increase or decrease the
Maximum Percentage to any other percentage not in excess of 9.99% specified in such notice; provided that (i) any such
increase will not be effective until the 61st day after such notice is delivered to the Company, and (ii) any such increase
or decrease will apply only to the Holder sending such notice and not to any other holder of Notes.

 

    	 	6	 

     

    

 

4.  RIGHTS
UPON EVENT OF DEFAULT.

 

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

 

(i)  the
suspension from trading or the failure of the Common Stock to be trading or listed (as applicable) on an Eligible Market for
a period of ten (10) consecutive days or for more than an aggregate of thirty (30) days in any 365-day period;

 

(ii)  the
Company’s or any Subsidiary’s (as defined in the Securities Purchase Agreement) failure to pay to the Holder any amount
of Principal, Interest, Late Charges or other amounts when and as due under this Note (including, without limitation, the Company’s
or any Subsidiary’s failure to pay any redemption payments or amounts hereunder) or any other Transaction Document (as defined
in the Securities Purchase Agreement) or any other agreement, document, certificate or other instrument delivered in connection
with the transactions contemplated hereby and thereby, except, in the case of a failure to pay Interest and Late Charges when and
as due, in which case only if such failure remains uncured for a period of at least five (5) days;

 

(iii)  except
for the Company’s NBG bank debt which is currently in default, the occurrence of any default under, redemption of or
acceleration prior to maturity of an aggregate of any Indebtedness (as defined in the Securities Purchase Agreement) of the
Company or any of its Subsidiaries in excess of $100,000;

 

(iv)  bankruptcy,
insolvency, reorganization or liquidation proceedings or other proceedings for the relief of debtors shall be instituted by
or against the Company or any Subsidiary and, if instituted against the Company or any Subsidiary by a third party, shall not
be dismissed within forty-five (45) days of their initiation;

 

(v)  the
commencement by the Company or any Subsidiary of a voluntary case or proceeding under any applicable federal, state or
foreign bankruptcy, insolvency, reorganization or other similar law or of any other case or proceeding to be adjudicated a
bankrupt or insolvent, or the consent by it to the entry of a decree, order, judgment or other similar document in respect of
the Company or any Subsidiary in an involuntary case or proceeding under any applicable federal, state or foreign bankruptcy,
insolvency, reorganization or other similar law or to the commencement of any bankruptcy or insolvency case or proceeding
against it, or the filing by it of a petition or answer or consent seeking reorganization or relief under any applicable
federal, state or foreign law, or the consent by it to the filing of such petition or to the appointment of or taking
possession by a custodian, receiver, liquidator, assignee, trustee, sequestrator or other similar official of the Company or
any Subsidiary or of any substantial part of its property, or the making by it of an assignment for the benefit of creditors,
or the execution of a composition of debts, or the occurrence of any other similar federal, state or foreign proceeding, or
the admission by it in writing of its inability to pay its debts generally as they become due, the taking of corporate action
by the Company or any Subsidiary in furtherance of any such action or the taking of any action by any Person to commence a
Uniform Commercial Code foreclosure sale or any other similar action under federal, state or foreign law;

 

    	 	7	 

     

    

 

(vi)  the
entry by a court of (i) a decree, order, judgment or other similar document in respect of the Company or any Subsidiary of a voluntary
or involuntary case or proceeding under any applicable federal, state or foreign bankruptcy, insolvency, reorganization or other
similar law or (ii) a decree, order, judgment or other similar document adjudging the Company or any Subsidiary as bankrupt or
insolvent, or approving as properly filed a petition seeking liquidation, reorganization, arrangement, adjustment or composition
of or in respect of the Company or any Subsidiary under any applicable federal, state or foreign law or (iii) a decree, order,
judgment or other similar document appointing a custodian, receiver, liquidator, assignee, trustee, sequestrator or other similar
official of the Company or any Subsidiary or of any substantial part of its property, or ordering the winding up or liquidation
of its affairs, and the continuance of any such decree, order, judgment or other similar document or any such other decree, order,
judgment or other similar document unstayed and in effect for a period of sixty (60) consecutive days;

 

(vii)  a
final judgment or judgments for the payment of money aggregating in excess of $100,000 are rendered against the Company
and/or any of its Subsidiaries and which judgments are not, within forty-five (45) days after the entry thereof, bonded,
discharged or stayed pending appeal, or are not discharged within forty-five (45) days after the expiration of such stay;
provided, however, any judgment which is covered by insurance or an indemnity from a credit worthy party shall not be
included in calculating the $100,000 amount set forth above so long as the Company provides the Holder a written statement
from such insurer or indemnity provider (which written statement shall be reasonably satisfactory to the Holder) to the
effect that such judgment is covered by insurance or an indemnity and the Company or such Subsidiary (as the case may be)
will receive the proceeds of such insurance or indemnity within forty-five (45) days of the issuance of such judgment;

 

(viii)  except
for the NBG bank debt which is currently in default, the Company and/or any Subsidiary, individually or in the aggregate, either
(i) fails to pay, when due, or within any applicable grace period, any payment with respect to any Indebtedness in excess of $100,000
due to any third party (other than, with respect to unsecured Indebtedness only, payments contested by the Company and/or such
Subsidiary (as the case may be) in good faith by proper proceedings and with respect to which adequate reserves have been set aside
for the payment thereof in accordance with GAAP) or is otherwise in breach or violation of any agreement for monies owed or owing
in an amount in excess of $100,000, which breach or violation permits the other party thereto to declare a default or otherwise
accelerate amounts due thereunder, or (ii) suffer to exist any other circumstance or event that would, with or without the passage
of time or the giving of notice, result in a default or event of default under any agreement binding the Company or any Subsidiary,
which default or event of default would or is likely to have a material adverse effect on the business, assets, operations (including
results thereof), liabilities, properties, condition (including financial condition) or prospects of the Company or any of its
Subsidiaries, individually or in the aggregate;

 

    	 	8	 

     

    

 

(ix)  other
than as specifically set forth in another clause of this Section 4(a), the Company or any Subsidiary breaches any representation,
warranty, covenant or other term or condition of any Transaction Document, except, in the case of a breach of a covenant or other
term or condition that is curable, only if such breach remains uncured for a period of three (3) consecutive Trading Days;

 

(x)  any
Material Adverse Effect (as defined in the Securities Purchase Agreement) occurs; or

 

(xi)  any
Change of Control occurs.

 

(b)  Notice
of an Event of Default; Redemption Right. Upon the occurrence of an Event of Default with respect to this Note, the
Company shall within one (1) Business Day deliver written notice thereof via facsimile and overnight courier (with next day
delivery specified) (an “Event of Default Notice”) to the Holder. At any time after the earlier of
the Holder’s receipt of an Event of Default Notice and the Holder becoming aware of an Event of Default, the Holder may
require the Company to redeem, at any time during the period commencing on the date the Holder first becomes aware of such
Event of Default through and including the tenth (10th) Trading Day after the later of (x) the date the Holder
receives the applicable Event of Default Notice with respect thereto and (y) the date such Event of Default has been cured,
all or any portion of this Note by delivering written notice thereof (the “Event of Default Redemption
Notice”) to the Company, which Event of Default Redemption Notice shall indicate the portion of this Note the
Holder is electing to redeem. Each portion of this Note subject to redemption by the Company pursuant to this Section 4(b)
shall be redeemed by the Company at a price equal to the greater of (i) the product of (A) the Conversion Amount to be
redeemed multiplied by (B) the Redemption Premium and (ii) the product of (X) the Conversion Rate with respect to the
Conversion Amount in effect at such time as the Holder delivers an Event of Default Redemption Notice multiplied by (Y) the
product of (1) the Redemption Premium multiplied by (2) the greatest Closing Sale Price of the Common Stock on any Trading
Day during the period commencing on the date immediately preceding such Event of Default and ending on the date the Company
makes the entire payment required to be made under this Section 4(b) (the “Event of Default
Redemption Price”). Redemptions required by this Section 4(b) shall be made in accordance with the provisions
of Section 10. To the extent redemptions required by this Section 4(b) are deemed or determined by a court of competent
jurisdiction to be prepayments of this Note by the Company, such redemptions shall be deemed to be voluntary prepayments.
Notwithstanding anything to the contrary in this Section 4, but subject to Section 3(d), until the Event of Default
Redemption Price (together with any Late Charges thereon) is paid in full, the Conversion Amount submitted for redemption
under this Section 4(b) (together with any Late Charges thereon) may be converted, in whole or in part, by the Holder into
Common Stock pursuant to the terms of this Note. In the event of the Company’s redemption of any portion of this Note
under this Section 4(b), the Holder’s damages would be uncertain and difficult to estimate because of the
parties’ inability to predict future interest rates and the uncertainty of the availability of a suitable substitute
investment opportunity for the Holder. Accordingly, any redemption premium due under this Section 4(b) is intended by the
parties to be, and shall be deemed, a reasonable estimate of the Holder’s actual loss of its investment opportunity and
not as a penalty.

 

    	 	9	 

     

    

 

5.  RIGHTS
UPON FUNDAMENTAL TRANSACTION; OTHER CORPORATE EVENTS.

 

(a)  Assumption.
The Company shall not enter into or be party to a Fundamental Transaction unless (i) the Successor Entity assumes in writing all
of the obligations of the Company under this Note and the other Transaction Documents in accordance with the provisions of this
Section 5(a) pursuant to written agreements in form and substance satisfactory to the Holder and approved by the Holder prior to
such Fundamental Transaction, including agreements to deliver to each holder of Notes in exchange for such Notes a security of
the Successor Entity evidenced by a written instrument substantially similar in form and substance to the Notes, including, without
limitation, having a principal amount and interest rate equal to the principal amounts then outstanding and the interest rates
of the Notes held by such holder, having similar conversion rights as the Notes and having similar ranking to the Notes, and satisfactory
to the Holder and (ii) the Successor Entity (including its Parent Entity) is a publicly traded corporation whose common stock is
quoted on or listed for trading on an Eligible Market. Upon the occurrence of any Fundamental Transaction, the Successor Entity
shall succeed to, and be substituted for (so that from and after the date of such Fundamental Transaction, the provisions of this
Note and the other Transaction Documents referring to the “Company” shall refer instead to the Successor Entity), and
may exercise every right and power of the Company and shall assume all of the obligations of the Company under this Note and the
other Transaction Documents with the same effect as if such Successor Entity had been named as the Company herein. Upon consummation
of a Fundamental Transaction, the Successor Entity shall deliver to the Holder confirmation that there shall be issued upon conversion
or redemption of this Note at any time after the consummation of such Fundamental Transaction, in lieu of the shares of the Company’s
Common Stock (or other securities, cash, assets or other property (except such items still issuable under Section 14, which shall
continue to be receivable thereafter) issuable upon the conversion or redemption of the Notes prior to such Fundamental Transaction,
such shares of the publicly traded common stock (or their equivalent) of the Successor Entity (including its Parent Entity) which
the Holder would have been entitled to receive upon the happening of such Fundamental Transaction had this Note been converted
immediately prior to such Fundamental Transaction (without regard to any limitations on the conversion of this Note), as adjusted
in accordance with the provisions of this Note. Notwithstanding the foregoing, the Holder may elect, at its sole option, by delivery
of written notice to the Company to waive this Section 5(a) to permit the Fundamental Transaction without the assumption of this
Note.

 

    	 	10	 

     

    

 

(b)  Other
Corporate Events. In addition to and not in substitution for any other rights hereunder, prior to the consummation of any
Fundamental Transaction pursuant to which holders of shares of Common Stock are entitled to receive securities or other
assets with respect to or in exchange for shares of Common Stock (a “Corporate Event”), the Company
shall make appropriate provision to insure that the Holder will thereafter have the right to receive upon a conversion of
this Note (i) in addition to the shares of Common Stock receivable upon such conversion, such securities or other assets to
which the Holder would have been entitled with respect to such shares of Common Stock had such shares of Common Stock been
held by the Holder upon the consummation of such Corporate Event (without taking into account any limitations or restrictions
on the convertibility of this Note) or (ii) in lieu of the shares of Common Stock otherwise receivable upon such conversion,
such securities or other assets received by the holders of shares of Common Stock in connection with the consummation of such
Corporate Event in such amounts as the Holder would have been entitled to receive had this Note initially been issued with
conversion rights for the form of such consideration (as opposed to shares of Common Stock) at a conversion rate for such
consideration commensurate with the Conversion Rate. Provision made pursuant to the preceding sentence shall be in a form and
substance satisfactory to the Holder.

 

(c)  The
provisions of this Section 5 shall apply similarly and equally to successive Fundamental Transactions and Corporate Events and
shall be applied without regard to any limitations on the conversion of this Note.

 

(d) Purchase
Rights. If at any time the Company grants, issues or sells any Options, Convertible Securities or rights to purchase stock,
warrants, securities or other property pro rata to the record holders of any class of Common Stock (the "Purchase Rights"),
then the Holder will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights
which the Holder could have acquired if the Holder had held the number of shares of Common Stock acquirable upon complete conversion
of this Note (without taking into account any limitations or restrictions on the convertibility of this Note) immediately before
the date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the
date as of which the record holders of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights.

 

6.  [Intentionally
Omitted]

 

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

 

    	 	11	 

     

    

 

8.  RESERVATION
OF AUTHORIZED SHARES.

 

(a)  Reservation.
So long as any of the Notes are outstanding, the Company shall take all action necessary to reserve and keep available out of
its authorized and unissued Common Stock, solely for the purpose of effecting the conversion of the Notes, a number of shares
of Common Stock, as of any date of determination, for each of the Notes in accordance with the following formula:

 

P
------------------ x 1.5 = Share Reserve

 

(T
x B)

 

P =
The aggregate principal amount of the Note outstanding as of such date of determination;

 

T =
The applicable Conversion Price as of such date of determination;

 

B =
0.85;

 

provided,
that the Share Reserve shall in no event be less than 150% of the number of shares of Common Stock as shall from time to time be
necessary to effect the conversion of all of the Notes then outstanding (without regard to any limitations on conversions) (the
“Required Reserve Amount”).

 

(b)  Insufficient
Authorized Shares. If, notwithstanding Section 8(a), and not in limitation thereof, while any of the Notes remain
outstanding the Company does not have a sufficient number of authorized and unreserved shares of Common Stock to satisfy its
obligation to reserve for issuance upon conversion of the Notes at least a number of shares of Common Stock equal to the
Required Reserve Amount (an “Authorized Share Failure”), then the Company shall immediately take
all action necessary to increase the Company’s authorized shares of Common Stock to an amount sufficient to allow the
Company to reserve the Required Reserve Amount for the Notes then outstanding. Without limiting the generality of the
foregoing sentence, as soon as practicable after the date of the occurrence of an Authorized Share Failure, but in no event
later than sixty (60) days after the occurrence of such Authorized Share Failure, the Company shall hold a meeting of its
stockholders for the approval of an increase in the number of authorized shares of Common Stock. In connection with such
meeting, the Company shall provide each stockholder with a proxy statement and shall use its reasonable best efforts to
solicit its stockholders’ approval of such increase in authorized shares of Common Stock and to cause its board of
directors to recommend to the stockholders that they approve such proposal. In the event that the Company is prohibited from
issuing shares of Common Stock upon any conversion due to the failure by the Company to have sufficient shares of Common
Stock available out of the authorized but unissued shares of Common Stock (such unavailable number of shares of Common Stock,
the “Authorization Failure Shares”), in lieu of delivering such Authorization Failure Shares to the
Holder, the Company shall pay cash in exchange for the redemption of such portion of the Conversion Amount convertible into
such Authorized Failure Shares at a price equal to the sum of (i) the product of (x) such number of Authorization Failure
Shares and (y) the greatest Closing Sale Price of the Common Stock on any Trading Day during the period commencing on the
date the Holder delivers the applicable Conversion Notice with respect to such Authorization Failure Shares to the
Company and ending on the date of such issuance and payment under this Section 8(b) and (ii) to the extent the Holder
purchases (in an open market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale by the
Holder of Authorization Failure Shares, any brokerage commissions and other out-of-pocket expenses, if any, of the Holder
incurred in connection therewith. Nothing contained in Section 8(a) or this Section 8(b) shall limit any obligations of the
Company under any provision of the Securities Purchase Agreement.

 

    	 	12	 

     

    

 

9.  COMPANY
OPTIONAL REDEMPTION. At any time after the Issuance Date, the Company shall have the right to redeem all, but not less than
all, of the Conversion Amount then remaining under this Note (the “Company Optional Redemption Amount”)
on the Company Optional Redemption Date (as defined below) (a “Company Optional Redemption”). The portion
of this Note subject to redemption pursuant to this Section 9 shall be redeemed by the Company in cash at a price (the “Company
Optional Redemption Price”) equal to 127.5% of the Conversion Amount of this Note then outstanding. The Company may
exercise its right to require redemption under this Section 9 by delivering an irrevocable written notice thereof by facsimile
and overnight courier to the Holder (the “Company Optional Redemption Notice” and the date the Holder
receives such notice is referred to as the “Company Optional Redemption Notice Date”). The Company may
deliver only one Company Optional Redemption Notice in any ninety (90) day period. The Company Optional Redemption Notice shall
(x) state the date on which the Company Optional Redemption shall occur (the “Company Optional Redemption Date”)
which date shall not be less than thirty (30) calendar days nor more than ninety (90) calendar days following the Company Optional
Redemption Notice Date, (y) state the aggregate Conversion Amount of the Notes which is being redeemed in such Company Optional
Redemption from the Holder pursuant to this Section 9 on the Company Optional Redemption Date and (z) if any Interest portion of
the Company Optional Redemption Amount is being paid in Interest Shares, state the information required in an Interest Election
Notice in accordance with Section 2(a). Notwithstanding anything herein to the contrary, at any time prior to the date the Company
Optional Redemption Price is paid, in full, the Company Optional Redemption Amount may be converted, in whole or in part, by the
Holder into shares of Common Stock pursuant to Section 3. All Conversion Amounts converted by the Holder after the Company Optional
Redemption Notice Date shall reduce the Company Optional Redemption Amount of this Note required to be redeemed on the Company
Optional Redemption Date. Redemptions made pursuant to this Section 9 shall be made in accordance with Section 10 and any payments
of any Interest portion of the Company Optional Redemption Amount in Interest Shares shall be made in accordance with Section 2.

 

    	 	13	 

     

    

 

10.  REDEMPTIONS.

 

(a)  Mechanics.
The Company shall deliver the applicable Event of Default Redemption Price to the Holder in cash within five (5) Business
Days after the Company’s receipt of the Holder’s Event of Default Redemption Notice. The Company shall deliver
the applicable Company Optional Redemption Price to the Holder in cash on the applicable Company Optional Redemption Date. In
the event of a redemption of less than all of the Conversion Amount of this Note, the Company shall promptly cause to be
issued and delivered to the Holder a new Note (in accordance with Section 17(d)) representing the outstanding Principal which
has not been redeemed. The Holder’s delivery of a notice voiding a Redemption Notice and exercise of its rights
following such notice shall not affect the Company’s obligations to make any payments of Late Charges which have
accrued prior to the date of such notice with respect to the Conversion Amount subject to such notice.

 

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

 

12.  INTENTIONALLY
OMITTED.

 

13.  COVENANTS.
Until all of the Notes have been converted, redeemed or otherwise satisfied in accordance with their terms:

 

(a)  Reserved.

 

(b)  Reserved.

 

(c)  Reserved.

 

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

 

(e)  Restriction
on Redemption and Cash Dividends. The Company shall not, and the Company shall cause each of its Subsidiaries to not,
directly or indirectly, redeem, repurchase or declare or pay any cash dividend or distribution on any of its capital stock
(other than any obligations to do so outstanding as of the Issuance Date).

 

(f)  Restriction
on Transfer of Assets. The Company shall not, and the Company shall cause each of its Subsidiaries to not, directly or
indirectly, sell, lease, license, assign, transfer, spin-off, split-off, close, convey or otherwise dispose of any material
assets or rights of the Company or any Subsidiary owned or hereafter acquired whether in a single transaction or a series of
related transactions, other than (i) sales, leases, licenses, assignments, transfers, conveyances and other dispositions of
such assets or rights by the Company and its Subsidiaries in the ordinary course of business and (ii) sales of inventory in
the ordinary course of business.

 

    	 	14	 

     

    

 

(g)  Reserved.

 

(h)  Change
in Nature of Business. The Company shall not, and the Company shall cause each of its Subsidiaries to not, directly or
indirectly, engage in any material line of business substantially different from those lines of business conducted by the
Company and each of its Subsidiaries on the Issuance Date or any business substantially related or incidental thereto. The
Company shall not, and the Company shall cause each of its Subsidiaries to not, directly or indirectly, modify its or their
purpose.

 

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

 

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

 

(k)  Maintenance
of Intellectual Property. The Company will, and will cause each of its Subsidiaries to, take all reasonably action
necessary or advisable to maintain all of the Intellectual Property Rights of the Company and/or any of its Subsidiaries that
are necessary or material to the conduct of its business in full force and effect.

 

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

 

(m)  Transactions
with Affiliates. The Company shall not, nor shall it permit any of its Subsidiaries to, enter into, renew, extend or be a
party to, any transaction or series of related transactions (including, without limitation, the purchase, sale, lease,
transfer or exchange of property or assets of any kind or the rendering of services of any kind) with any affiliate, except
in the ordinary course of business in a manner and to an extent consistent with past practice and necessary or desirable for
the prudent operation of its business, for fair consideration and on terms no less favorable to it or its Subsidiaries than
would be obtainable in a comparable arm’s length transaction with a Person that is not an affiliate thereof.

 

    	 	15	 

     

    

 

14.  PARTICIPATION.
Upon any conversion of this Note, the Holder shall be entitled to receive such dividends paid and distributions made to the holders
of Common Stock from and after the initial Issuance Date to the same extent as if the Holder had effected such conversion and had
held such shares of Common Stock (issued or to be issued in such conversion) on the record date for such dividends and distributions.
Payments under the preceding sentence shall be made on or prior to the applicable Share Delivery Deadline with respect to such
conversion.

 

15.  AMENDING
THE TERMS OF THIS NOTE. The prior written consent of the Holder shall be required for any change or amendment to this
Note.

 

16.  TRANSFER.
This Note and any shares of Common Stock issued upon conversion of this Note may be offered, sold, assigned or transferred by the
Holder without the consent of the Company, subject only to the provisions of Section 5 of the Securities Purchase Agreement.

 

17.  REISSUANCE
OF THIS NOTE.

 

(a)  Transfer.
If this Note is to be transferred, the Holder shall surrender this Note to the Company, whereupon the Company will forthwith
issue and deliver upon the order of the Holder a new Note (in accordance with Section 17(d)), registered as the Holder may
request, representing the outstanding Principal being transferred by the Holder and, if less than the entire outstanding
Principal is being transferred, a new Note (in accordance with Section 17(d)) to the Holder representing the outstanding
Principal not being transferred. The Holder and any assignee, by acceptance of this Note, acknowledge and agree that, by
reason of the provisions of Section 3(c)(iii) following conversion or redemption of any portion of this Note, the outstanding
Principal represented by this Note may be less than the Principal stated on the face of this Note.

 

(b)  Lost,
Stolen or Mutilated Note. Upon receipt by the Company of evidence reasonably satisfactory to the Company of the loss,
theft, destruction or mutilation of this Note (as to which a written certification and the indemnification contemplated below
shall suffice as such evidence), and, in the case of loss, theft or destruction, of any indemnification undertaking by the
Holder to the Company in customary and reasonable form and, in the case of mutilation, upon surrender and cancellation of
this Note, the Company shall execute and deliver to the Holder a new Note (in accordance with Section 17(d)) representing the
outstanding Principal.

 

(c)  Note
Exchangeable for Different Denominations. This Note is exchangeable, upon the surrender hereof by the Holder at the
principal office of the Company, for a new Note or Notes (in accordance with Section 17(d) and in principal amounts of at
least $1,000) representing in the aggregate the outstanding Principal of this Note, and each such new Note will represent
such portion of such outstanding Principal as is designated by the Holder at the time of such surrender.

 

(d)  Issuance
of New Notes. Whenever the Company is required to issue a new Note pursuant to the terms of this Note, such new Note (i) shall
be of like tenor with this Note, (ii) shall represent, as indicated on the face of such new Note, the Principal remaining outstanding
(or in the case of a new Note being issued pursuant to Section 17(a) or Section 17(c), the Principal designated by the Holder which,
when added to the principal represented by the other new Notes issued in connection with such issuance, does not exceed the Principal
remaining outstanding under this Note immediately prior to such issuance of new Notes), (iii) shall have an issuance date, as indicated
on the face of such new Note, which is the same as the Issuance Date of this Note, (iv) shall have the same rights and conditions
as this Note, and (v) shall represent accrued and unpaid Interest and Late Charges on the Principal and Interest of this Note,
from the Issuance Date.

 

    	 	16	 

     

    

 

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

 

19.  PAYMENT
OF COLLECTION, ENFORCEMENT AND OTHER COSTS. If (a) this Note is placed in the hands of an attorney for collection or enforcement
or is collected or enforced through any legal proceeding or the Holder otherwise takes action to collect amounts due under this
Note or to enforce the provisions of this Note or (b) there occurs any bankruptcy, reorganization, receivership of the Company
or other proceedings affecting Company creditors’ rights and involving a claim under this Note, then the Company shall pay
the costs incurred by the Holder for such collection, enforcement or action or in connection with such bankruptcy, reorganization,
receivership or other proceeding, including, without limitation, attorneys’ fees and disbursements. The Company expressly
acknowledges and agrees that no amounts due under this Note shall be affected, or limited, by the fact that the purchase price
paid for this Note was less than the original Principal amount hereof.

 

20.  CONSTRUCTION;
HEADINGS. This Note shall be deemed to be jointly drafted by the Company and the Holder and shall not be construed against
any Person as the drafter hereof. The headings of this Note are for convenience of reference and shall not form part of, or affect
the interpretation of, this Note. Terms used in this Note but defined in the other Transaction Documents shall have the meanings
ascribed to such terms on the Closing Date in such other Transaction Documents unless otherwise consented to in writing by the
Holder.

 

21.  FAILURE
OR INDULGENCE NOT WAIVER. No failure or delay on the part of the Holder in the exercise of any power, right or privilege hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other
or further exercise thereof or of any other right, power or privilege. No waiver shall be effective unless it is in writing and
signed by an authorized representative of the waiving party.

 

    	 	17	 

     

    

 

22.  DISPUTE
RESOLUTION. In the case of a dispute as to the determination of the Conversion Price, any Redemption Price, the Closing Bid
Price, the Closing Sale Price or fair market value (as the case may be) or the arithmetic calculation of the Conversion Rate or
the applicable Redemption Price (as the case may be), the Company or the Holder (as the case may be) shall submit the disputed
determinations or arithmetic calculations (as the case may be) via facsimile (i) within two (2) Business Days after receipt of
the applicable notice giving rise to such dispute to the Company or the Holder (as the case may be) or (ii) if no notice gave rise
to such dispute, at any time after the Holder learned of the circumstances giving rise to such dispute. If the Holder and the Company
are unable to agree upon such determination or calculation within two (2) Business Days of such disputed determination or arithmetic
calculation (as the case may be) being submitted to the Company or the Holder (as the case may be), then the Company shall, within
two (2) Business Days, submit via facsimile (a) the disputed determination of the Conversion Price, any Redemption Price, the Closing
Bid Price, the Closing Sale Price or fair market value (as the case may be) to an independent, reputable investment bank selected
by the Company and approved by the Holder or (b) the disputed arithmetic calculation of the Conversion Rate or any Redemption Price
(as the case may be) to an independent, outside accountant selected by the Holder that is reasonably acceptable to the Company.
The Company shall cause at its expense the investment bank or the accountant (as the case may be) to perform the determinations
or calculations (as the case may be) and notify the Company and the Holder of the results no later than ten (10) Business Days
from the time it receives such disputed determinations or calculations (as the case may be). Such investment bank’s or accountant’s
determination or calculation (as the case may be) shall be binding upon all parties absent demonstrable error.

 

23.  NOTICES;
CURRENCY; PAYMENTS.

 

(a)  Notices.
Whenever notice is required to be given under this Note, unless otherwise provided herein, such notice shall be given in
accordance with Section 9(f) of the Securities Purchase Agreement. The Company shall provide the Holder with prompt written
notice of all actions taken pursuant to this Note, including in reasonable detail a description of such action and the reason
therefore. Without limiting the generality of the foregoing, the Company will give written notice to the Holder (i)
immediately upon any adjustment of the Conversion Price, setting forth in reasonable detail, and certifying, the calculation
of such adjustment and (ii) at least fifteen (15) days prior to the date on which the Company closes its books or takes a
record (A) with respect to any dividend or distribution upon the Common Stock, (B) with respect to any grant, issuances, or
sales of any Options, Convertible Securities or rights to purchase stock, warrants, securities or other property to holders
of shares of Common Stock or (C) for determining rights to vote with respect to any Fundamental Transaction, dissolution or
liquidation, provided in each case that such information shall be made known to the public prior to or in conjunction with
such notice being provided to the Holder.

 

(b)  Currency.
All dollar amounts referred to in this Note are in United States Dollars (“U.S. Dollars”), and all
amounts owing under this Note shall be paid in U.S. Dollars. All amounts denominated in other currencies (if any) shall be
converted into the U.S. Dollar equivalent amount in accordance with the Exchange Rate on the date of calculation.
“Exchange Rate” means, in relation to any amount of currency to be converted into U.S. Dollars
pursuant to this Note, the U.S. Dollar exchange rate as published in the Wall Street Journal on the relevant date of
calculation (it being understood and agreed that where an amount is calculated with reference to, or over, a period of time,
the date of calculation shall be the final date of such period of time).

 

    	 	18	 

     

    

 

(c)  Payments.
Whenever any payment of cash is to be made by the Company to any Person pursuant to this Note, unless otherwise expressly set
forth herein, such payment shall be made in lawful money of the United States of America by a certified check drawn on the
account of the Company and sent via overnight courier service to such Person at such address as previously provided to the
Company in writing, provided that the Holder may elect to receive a payment of cash via wire transfer of immediately
available funds by providing the Company with prior written notice setting out such request and the Holder’s wire
transfer instructions. Whenever any amount expressed to be due by the terms of this Note is due on any day which is not a
Business Day, the same shall instead be due on the next succeeding day which is a Business Day. Any amount of Principal or
other amounts due under the Transaction Documents which is not paid when due (solely to the extent such amount is not then
accruing interest at the Default Rate) shall result in a late charge being incurred and payable by the Company in an amount
equal to interest on such amount at the rate of eighteen percent (18%) per annum from the date such amount was due until the
same is paid in full (“Late Charge”).

 

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

 

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

 

26.  GOVERNING
LAW. This Note shall be construed and enforced in accordance with, and all questions concerning the construction, validity,
interpretation and performance of this Note shall be governed by, the internal laws of the State of California, without giving
effect to any choice of law or conflict of law provision or rule (whether of the State of California or any other jurisdictions)
that would cause the application of the laws of any jurisdictions other than the State of California. The Company hereby irrevocably
submits to the exclusive jurisdiction of the state and federal courts sitting in Los Angeles Count, for the adjudication of any
dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction
of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action
or proceeding is improper. By the execution and delivery of this Note, the Company acknowledges that it has, by separate written
instrument, irrevocably designated and appointed Registered Agent Solutions, Inc., 1220 South Street, Suite 150, Sacramento,
CA 95811 (together with any successor, the “Agent for Service”) as its authorized agent upon which process
may be served in any suit or proceeding arising out of or relating to this Note that may be instituted in any state or federal
court sitting in Los Angeles County, or brought under federal or state securities laws, and acknowledges that the Agent for Service
has accepted such designation. The Company further agrees to take any and all action, including the execution and filing of any
and all such documents and instruments, as may be necessary to continue such designation and appointment of the Agent for Service
in full force and effect so long as the Note shall be outstanding. Service upon such Agent for Service in accordance with this
Section 26 shall be deemed completed whether or not forwarded to or received by the Company. If such Agent for Service ceases to
be able to act as such, resigns as such Los Angeles County, the Company agrees to irrevocably appoint a new agent acceptable to
the Investor to receive on behalf of the Company service of any legal process and to deliver to the Investor within 14 days a copy
of a written acceptance of appointment by such agent. Nothing contained herein shall be deemed to limit in any way any right to
serve process in any manner permitted by law. In the event that any provision of this Note is invalid or unenforceable under any
applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith
and shall be deemed modified to conform with such statute or rule of law. Any such provision which may prove invalid or unenforceable
under any law shall not affect the validity or enforceability of any other provision of this Note. Nothing contained herein shall
be deemed or operate to preclude the Holder from bringing suit or taking other legal action against the Company in any other jurisdiction
to collect on the Company’s obligations to the Holder, to realize on any collateral or any other security for such obligations,
or to enforce a judgment or other court ruling in favor of the Holder. THE COMPANY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY
HAVE TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING
OUT OF THIS NOTE OR ANY TRANSACTION CONTEMPLATED HEREBY.

 

    	 	19	 

     

    

 

27.  MAXIMUM
PAYMENTS. Nothing contained herein shall be deemed to establish or require the payment of a rate of interest or other charges
in excess of the maximum permitted by applicable law. In the event that the rate of interest required to be paid or other charges
hereunder exceed the maximum permitted by such law, any payments in excess of such maximum shall be credited against amounts owed
by the Company to the Holder and thus refunded to the Company.

 

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

 

(a)  “Bloomberg”
means Bloomberg, L.P.

 

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

 

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

 

    	 	20	 

     

    

 

(d)  “Closing
Bid Price” and “Closing Sale Price” means, for any security as of any date, the last
closing bid price and last closing trade price, respectively, for such security on the Principal Market, as reported by
Bloomberg, or, if the Principal Market begins to operate on an extended hours basis and does not designate the closing bid
price or the closing trade price (as the case may be) then the last bid price or last trade price, respectively, of such
security prior to 4:00:00 p.m., New York time, as reported by Bloomberg, or, if the Principal Market is not the principal
securities exchange or trading market for such security, the last closing bid price or last trade price, respectively, of
such security on the principal securities exchange or trading market where such security is listed or traded as reported by
Bloomberg, or if the foregoing do not apply, the last closing bid price or last trade price, respectively, of such security
in the over-the-counter market on the electronic bulletin board for such security as reported by Bloomberg, or, if no closing
bid price or last trade price, respectively, is reported for such security by Bloomberg, the average of the bid prices, or
the ask prices, respectively, of any market makers for such security as reported in the “pink sheets” by OTC
Markets Group Inc. (formerly Pink Sheets LLC).

 

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

 

(f)  “Common
Stock” means (i) the Company’s common stock, US$0.001 par value per share, and (ii) any capital stock
into which such common stock shall have been changed or any share capital resulting from a reclassification of such common
stock.

 

(g)  “Convertible
Securities” means any stock or other security (other than Options) that is at any time and under any circumstances,
directly or indirectly, convertible into, exercisable or exchangeable for, or which otherwise entitles the holder thereof to acquire,
any shares of Common Stock.

 

(h)  “Eligible
Market” means The New York Stock Exchange, the NYSE MKT, The NASDAQ Global Select Market, The NASDAQ Global Market,
The NASDAQ Capital Market, or the OTCQX or the OTC Pink “Current” Market run by the OTC Markets Group, Inc.

 

(i)  "Equity
Conditions" means that each of the following conditions is satisfied: (i) on each day during the period
beginning six (6) month prior to the applicable date of determination and ending on and including the applicable date of
determination (the "Equity Conditions Measuring Period"), all shares of Common Stock issuable upon
conversion of the Notes (including as Interest Shares) shall be eligible for sale without restriction and without the need
for registration under any applicable federal or state securities laws; (ii) on each day during the Equity Conditions
Measuring Period, the Common Stock is designated for quotation on the Principal Market or any other Eligible Market and shall
not have been suspended from trading on such exchange or market (other than suspensions of not more than two (2) days and
occurring prior to the applicable date of determination due to business announcements by the Company) nor shall delisting or
suspension by such exchange or market been pending in writing by such exchange or market; (iii) during the one (1) year
period ending on and including the date immediately preceding the applicable date of determination, the Company shall have
delivered shares of Common Stock upon conversion of the Notes to the Holders on a timely basis as set forth in Section
3(c)(ii) hereof; (iv) any applicable shares of Common Stock to be issued in connection with the event requiring determination
may be issued in full without violating Section 3(d) hereof and the rules or regulations of the Principal Market or any
applicable Eligible Market; (v) the Company shall not have failed to timely make any payments within five (5) Business Days
of when such payment is due pursuant to any Transaction Document; (vi) during the Equity Conditions Measuring Period, there
shall not have occurred either (A) the public announcement of a pending, proposed or intended Fundamental Transaction which
has not been abandoned, terminated or consummated, or (B) an Event of Default or (C) an event that with the passage of time
or giving of notice would constitute an Event of Default; (vii) the Company shall have no knowledge of any fact that would
cause any shares of Common Stock issuable upon conversion of the Notes (including as Interest Shares) not to be eligible for
sale without restriction pursuant to Rule 144 and any applicable state securities laws; and (viii) the Company otherwise
shall have been in compliance with and shall not have breached any provision, covenant, representation or warranty of any
Transaction Document.

 

    	 	21	 

     

    

 

(j)  "Equity
Conditions Failure" means that (i) on any day during the period commencing ten (10) Trading Days prior to the
applicable Interest Date through the applicable Interest Date or (ii) on any day during the period commencing ten (10)
Trading Days prior to the applicable Company Optional Redemption Notice Date through the applicable Company Optional
Redemption Date, the Equity Conditions have not been satisfied (or waived in writing by the Holder).

 

(k)  “Fundamental
Transaction” means that (i) the Company or any of its Subsidiaries shall, directly or indirectly, in one or more
related transactions, (1) consolidate or merge with or into (whether or not the Company or any of its Subsidiaries is the surviving
corporation) any other Person, or (2) sell, lease, license, assign, transfer, convey or otherwise dispose of all or substantially
all of its respective properties or assets to any other Person, or (3) allow any other Person to make a purchase, tender or exchange
offer that is accepted by the holders of more than 50% of the outstanding shares of Voting Stock of the Company (not including
any shares of Voting Stock of the Company held by the Person or Persons making or party to, or associated or affiliated with the
Persons making or party to, such purchase, tender or exchange offer), or (4) consummate a stock or share purchase agreement or
other business combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement)
with any other Person whereby such other Person acquires more than 50% of the outstanding shares of Voting Stock of the Company
(not including any shares of Voting Stock of the Company held by the other Person or other Persons making or party to, or associated
or affiliated with the other Persons making or party to, such stock or share purchase agreement or other business combination),
or (ii) any “person” or “group” (as these terms are used for purposes of Sections 13(d) and 14(d) of the
1934 Act and the rules and regulations promulgated thereunder) is or shall become the “beneficial owner” (as defined
in Rule 13d-3 under the 1934 Act), directly or indirectly, of 50% of the aggregate ordinary voting power represented by issued
and outstanding Voting Stock of the Company.

 

    	 	22	 

     

    

 

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

 

(m)  “Interest
Rate” means eight percent (8.0%) per annum, as may be adjusted from time to time in accordance with Section
2.

 

(n)  “Maturity
Date” shall mean, December 31 2017; provided, however, the Maturity Date may be extended at the option of the Holder
(i) in the event that, and for so long as, an Event of Default shall have occurred and be continuing or any event shall have occurred
and be continuing that with the passage of time and the failure to cure would result in an Event of Default or (ii) through the
date that is twenty (20) Business Days after the consummation of a Fundamental Transaction in the event that a Fundamental Transaction
is publicly announced or a Fundamental Transaction Notice is delivered prior to the Maturity Date, provided further that if a Holder
elects to convert some or all of this Note pursuant to Section 3 hereof, and the Conversion Amount would be limited pursuant to
Section 3(d) hereunder, the Maturity Date shall automatically be extended until such time as such provision shall not limit the
conversion of this Note.

 

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

 

(p)  “Parent
Entity” of a Person means an entity that, directly or indirectly, controls the applicable Person and whose
common stock or equivalent equity security is quoted or listed on an Eligible Market, or, if there is more than one such
Person or Parent Entity, the Person or Parent Entity with the largest public market capitalization as of the date of
consummation of the Fundamental Transaction.

 

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

 

(r)  “Principal
Market” means, as of any date of determination, the principal securities exchange or securities market on which
the Common Stock is then traded.

 

(s)  “Redemption
Notices” means, collectively, the Event of Default Redemption Notices and the Company Optional Redemption Notices,
and each of the foregoing, individually, a “Redemption Notice.”

 

(t)  “Redemption
Premium” means (i) in the case of the Events of Default described in Section 4(a) (other than Sections 4(a)(iv)
through 4(a)(vi)), 127.5% or (ii) in the case of the Events of Default described in Sections 4(a)(iv) through 4(a)(vi),
100%.

 

    	 	23	 

     

    

 

(u)  “Redemption
Prices” means, collectively, Event of Default Redemption Prices, and the Company Optional Redemption Prices and
each of the foregoing, individually, a “Redemption Price.”

 

(v)  “SEC”
means the United States Securities and Exchange Commission or the successor thereto.

 

(w)  “Securities
Purchase Agreement” means that certain Securities Purchase Agreement, dated as of the Closing Date, by and between
the Company and the Holder pursuant to which the Company issued this Note, as may be amended from time to time.

 

(x)  “Subsidiaries”
shall have the meaning as set forth in the Securities Purchase Agreement.

 

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

 

(z)  “Trading
Day” means any day on which the Common Stock is traded on the Principal Market, or, if the Principal Market is
not the principal trading market for the Common Stock, then on the principal securities exchange or securities market on
which the Common Stock is then traded, provided that “Trading Day” shall not include any day on
which the Common Stock is scheduled to trade on such exchange or market for less than 4.5 hours or any day that the Common
Stock is suspended from trading during the final hour of trading on such exchange or market (or if such exchange or market
does not designate in advance the closing time of trading on such exchange or market, then during the hour ending at 4:00:00
p.m., New York time) unless such day is otherwise designated as a Trading Day in writing by the Holder.

 

(aa)“Voting
Stock” of a Person means capital stock of such Person of the class or classes pursuant to which the holders
thereof have the general voting power to elect, or the general power to appoint, at least a majority of the board of
directors, managers, trustees or other similar governing body of such Person (irrespective of whether or not at the time
capital stock of any other class or classes shall have or might have voting power by reason of the happening of any
contingency).

 

(bb)“VWAP”
means, for any security as of any date, the dollar volume-weighted average price for such security on the Principal Market
(or, if the Principal Market is not the principal trading market for such security, then on the principal securities exchange
or securities market on which such security is then traded) during the period beginning at 9:30:01 a.m., New York time, and
ending at 4:00:00 p.m., New York time, as reported by Bloomberg through its “Volume at Price” function or, if the
foregoing does not apply, the dollar volume-weighted average price of such security in the over-the-counter market on the
electronic bulletin board for such security during the period beginning at 9:30:01 a.m., New York time, and ending at 4:00:00
p.m., New York time, as reported by Bloomberg, or, if no dollar volume-weighted average price is reported for such security
by Bloomberg for such hours, the average of the highest closing bid price and the lowest closing ask price of any of the
market makers for such security as reported in the “pink sheets” by OTC Markets Group Inc. (formerly Pink Sheets
LLC). If VWAP cannot be calculated for such security on such date on any of the foregoing bases, the VWAP of such security on
such date shall be the fair market value as mutually determined by the Company and the Holder. If the Company and the Holder
are unable to agree upon the fair market value of such security, then such dispute shall be resolved in accordance with the
procedures in Section 22. All such determinations shall be appropriately adjusted for any stock dividend, stock split, stock
combination or other similar transaction during such period.

 

29.  DISCLOSURE.
Upon receipt or delivery by the Company of any notice in accordance with the terms of this Note, unless the Company has in good
faith determined that the matters relating to such notice do not constitute material, non-public information relating to the Company
or any of its Subsidiaries, the Company shall within one (1) Business Day after any such receipt or delivery publicly disclose
such material, non-public information on a report on Form 6K or otherwise. In the event that the Company believes that a notice
contains material, non-public information relating to the Company or any of its Subsidiaries, the Company so shall indicate to
such Holder contemporaneously with delivery of such notice, and in the absence of any such indication, the Holder shall be allowed
to presume that all matters relating to such notice do not constitute material, non-public information relating to the Company
or its Subsidiaries. Nothing contained in this Section 29 shall limit any obligations of the Company, or any rights of the Holder,
under Section 4(i) of the Securities Purchase Agreement.

 

[signature
page follows]

 

    	 	24	 

     

    

 

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

 

	 	FREESEAS, INC., 
	 	
	 	A CORORATION ORGANIZED IN THE
    REPUBLIC OF THE MARSHALL ISLANDS
	 	 	 
	 	By:	 
	 	Name:	Dimitris Papadopoulos
	 	Title:	Chief Financial Officer

 

Convertible
Note - Signature Page 

 

    	 	25	 

     

    

 

EXHIBIT
I 

 

FREESEAS
INC. 

CONVERSION
NOTICE

 

Reference
is made to the Convertible Note (the “Note”) issued to the undersigned by FreeSeas, Inc., a corporation
incorporated and existing under the laws of the Republic of the Marshall Islands (the “Company”). In
accordance with and pursuant to the Note, the undersigned hereby elects to convert the Conversion Amount (as defined in the Note)
of the Note indicated below into shares of Common Stock, US$0.001 par value per share (the “Common Stock”),
of the Company, as of the date specified below Capitalized terms not defined herein shall have the meaning as set forth in the
Note.

 

	Date of Conversion:	 	_________________________________________________
	 	 	 
	Aggregate Principal to be converted:	 	_________________________________________________
	 	 	 
	Aggregate accrued and unpaid Interest and accrued and unpaid Late Charges with respect to such portion of the Aggregate Principal and such Aggregate Interest to be converted:	 	_________________________________________________
	 	 	 
	AGGREGATE CONVERSION AMOUNT TO BE CONVERTED:	 	_________________________________________________
	 	 	 
	Please confirm the following information:

 

	Conversion
    Price:   __________________________________________________________________________
	 
	Number
    of shares of Common Stock to be issued:   _______________________________________
	 
	Please
    issue the Common Stock into which the Note is being converted in the following name and to the following address:
	 
	Issue
    to:
	                                _____________________________________________________________________________
	                                _____________________________________________________________________________
	                                _____________________________________________________________________________
	                                                              ______________________________________________________________
	Facsimile
    Number:
	 
	Holder:              _____________________________________________________________________________
	 
	By:                 _____________________________________________________________________________
	Title:
             _____________________________________________________________________________
	Dated:
          _____________________________________________________________________________
	 
	Account
Number:          _______________________________________________________________________
	(if
    electronic book entry transfer)
	 
	Transaction
    Code Number:
	(if
    electronic book entry transfer)

 

    	 	26	 

     

    

 

ACKNOWLEDGMENT

 

The Company
hereby acknowledges this Conversion Notice and hereby directs _________________ to issue the above indicated number of shares of
Common Stock.

 

	 	FREESEAS INC. 
	 	 
	 	By:	        
	 	Name:	 
	 	Title:

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