Document:

Exhibit 10.3

 

EXECUTION VERSION

 

SECURITIES PURCHASE AGREEMENT

 

dated as of September 30, 2015

 

by and among

 

DELAFIELD INVESTMENTS LIMITED (LENDER)

 

and

 

AMARANTUS BIOSCIENCE HOLDINGS, INC. (BORROWER)

 

     

     

    

 

SECURITIES PURCHASE AGREEMENT

 

THIS SECURITIES PURCHASE
AGREEMENT (the “Agreement”) is made as of September 30, 2015, by and among AMARANTUS BIOSCIENCE HOLDINGS, INC.,
a Nevada corporation (and together with all of its current and future, direct and/or indirect, wholly owned and/or partially owned
Subsidiaries, collectively, the “Borrower” or the “Company”), DELAFIELD INVESTMENTS LIMITED
(“Delafield” or the “Lender”).

 

RECITALS

 

A.         The Borrower
and the Lender 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 “Securities Act”), and Rule 506(b) of Regulation
D (“Regulation D”) as promulgated by the United States Securities and Exchange Commission under the Securities
Act.

 

B.          The Lender wishes
to purchase, and the Company wishes to sell, upon the terms and conditions stated in this Agreement, the (i) Notes (in the form
amended hereto Exhibit A); and (ii) Warrants (in the form amended hereto Exhibit B), all in the amounts and for the price set forth
on Schedule 1 hereto.

 

NOW, THEREFORE, IN
CONSIDERATION of the mutual covenants contained in this Agreement, and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the Company and the Purchasers hereby agree as follows:

 

ARTICLE 1

DEFINITIONS

 

1.1         Defined
Terms. In addition to terms defined elsewhere in this Agreement or in any Supplement, Amendment or Exhibit hereto, when used
herein, the following terms shall have the following meanings:

 

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

 

(b)         “Exchange Act”
means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

 

(c)         “2015
Shareholder Meeting Conditions” means that in connection with the Company’s 2015 Annual Meeting of Stockholders
held on September 2, 2015 (the “2015 Meeting”), Lender is satisfied in its sole discretion that (i) the 2015
Meeting occurred and was in compliance with all applicable laws, rules and regulations including, but not limited to, those relating
to a quorum (ii) the proposals that the Company’s shareholders were being asked to approve, including, but not limited to
the amendment to the Borrower’s Articles of Incorporation increasing the Borrower’s authorized shares of Common Stock
from 13,333,334 to 35,000,000 shares, (the “Amendment”), which proposals were set forth in the Borrower’s
Proxy Statement contained in its Definitive Schedule 14A filed with the Commission on or about July 21, 2015, were approved and
(iii) the Amendment was filed with the Secretary of State of the State of Nevada and is currently in effect.

 

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(d)         “Additional
Notes” means the 12% Senior Secured Convertible Promissory Notes of the Borrower, the terms and conditions of which are
substantially identical to those of the Notes purchased by Dominion Capital, LLC (“Dominion”) from the Borrower
pursuant to the Dominion Exchange Agreement.

 

(e)         “Alternative
Conversion Price” means 60% of the lowest of traded price of a share of Common Stock in the thirty (30) consecutive Trading
Days prior to the Conversion Date and/or any other determination date.

 

(f)         “Affiliate”
means any Person which, directly or indirectly, owns or controls, on an aggregate basis, a ten (10%) percent or greater interest
in any other Person, or which is controlled by or is under common control with any other Person.

 

(g)         “Business
Day” means any day other than a Saturday or Sunday or any other day on which the Federal Reserve Bank of New York is
not open for business.

 

(h)         “Closing”
means the time of issuance and sale by the Borrower of the Note and Warrant to the Lender.

 

(i)         “Closing
Date” means the date the Note and Warrants are purchased by the Lender from the Borrower.

 

(j)         “Collateral
Date” has the meaning set forth in the Security Agreement.

 

(k)         “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.

 

(l)         “Common
Stock” means (i) the Borrower’s common stock, $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.

 

(m)         “Common
Stock Equivalents” means any capital stock or other security of the Borrower that is at any time and under any circumstances
directly or indirectly convertible into, exercisable or exchangeable for, and/or which otherwise entitles the holder thereof to
acquire, any capital stock or other security of the Borrower (including, without limitation, Common Stock).

 

(n)          “Conversion
Date” has the meaning set forth in the Notes

 

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(o)         “Conversion
Shares” means all shares of Common Stock issuable upon conversion of any portion of the Notes and/or as any other payment
due under the Notes including, but not limited to interest and/or otherwise, but solely to the expert and subject to the Conditions
set forth in the Notes, including, but not limited to, shares of Common Stock, Common Stock Equivalents and shares of Common Stock
and/or other securities of the Borrower issuable upon exercise, exchange and/or conversion of such Common Stock Equivalents.

 

(p)         “Documents”
means collectively, this Agreement, the Notes, the Warrants, the Registration Rights Agreement (in the form annexed hereto as Exhibit
C), the Transfer Agent Irrevocable Instruction Letter (in the form annexed hereto as Exhibit D), the Security Agreement
(in the form amended into as Exhibit E), the Intercreditor and Subordination Agreement (in the form annexed hereto as Exhibit
F) the Leak-Out Agreement (in the form annexed hereto as Exhibit G) the Lock-Up Agreement (in the form annexed hereto
as Exhibit H), a UCC-1 Financing Statement of the Lender and Dominion on all of the assets of the Borrower (the “Lenders
UCC-1”) to be filed with the Secretary of State of Nevada on or about the Closing Date, and all financing statements
(or comparable documents now or hereafter filed in accordance with the UCC or other comparable or similar laws, rules or regulations)
in favor of the Lender and Dominion as secured parties perfecting all Liens the Lender and Dominion have on the Collateral, (which
security interests and Liens of the Lender and Dominion shall be pari passu with each other and which shall be senior
to all Indebtedness of the Borrower, except for a $1,000,000 12% Senior Secured Note due July 6, 2016 sold by the Borrower (the
“July 2015 $1,000,000 Senior Note”), an amendment to the UCC-1 Financing Statement dated____, 2015 of Dominion
(the “Dominion UCC-1”), to add Delafield so that with respect thereto Dominion and Delafield are pari
passu as to the security interest in the collateral set forth in Dominion’s UCC-1 (the “Amended UCC-1”,
and together with the Lenders UCC-1, collectively, (the “Lenders UCC Filings”), which Lenders UCC Filings are
attached hereto as Exhibit I, the Perfection Certificate dated the date hereof from Borrower to the Lender (in the form
annexed hereto as Exhibit J), the Patent and Trademark Security Agreement (annexed hereto as Exhibit K) all of the
issued and outstanding capital stock of each Subsidiary of the Borrower (the “Pledged Securities”), which Pledged
Securities are being pledged, by the Borrower to the the Lender and Dominion or their Agent to secure the Borrower’s obligations
to the Lender and Dominion under the Notes and all documents necessary to transfer the Pledged Securities to the Lender and Dominion
as provided in the Security Agreement (collectively with the Pledged Securities, the “Pledge Documents”), which
Pledge Documents are annexed hereto as Exhibit N, the Letter Agreement dated September 30, 2015 by and among the Lender,
Dominion, and the Company relating to, among other items set forth therein, increasing the authorized shares of Common Stock to
150,000,000 (the “Letter Agreement”) and such other documents, instruments, certificates, supplements, amendments,
exhibits and schedules required and/or attached pursuant to this Agreement and/or any of the above documents, and/or any other
document and/or instrument related to the above agreements, documents and/or instruments, and the transactions hereunder and/or
thereunder and/or any other agreement, documents or instruments required or contemplated hereunder or thereunder, whether now existing
or at any time hereafter arising.

 

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(q)         “Dollar(s)”
and “$” means lawful money of the United States (which Pledged Securities and agreement documents are annexed
hereto as Exhibit L), the Patent and Trademark Security Agreement and annexed hereto as Exhibit K.

 

(r)         “Dominion
Exchange Agreement” has the meaning set forth in the definition of the “Notes” in this Section 1.

 

(s)         “Environmental
Laws” means any and all laws, rules, orders, regulations, statutes, ordinances, guidelines, codes, decrees, or other
legally enforceable requirements (including, without limitation, common law) of any international authority, foreign government,
the United States, or any state, local, municipal or other governmental authority, regulating, relating to or imposing liability
or standards of conduct concerning protection of the environment or of human health, or employee health and safety, as has been,
is now, or may at any time hereafter be, in effect.

 

(t)         “Equity
Interests” means shares of capital stock, partnership interests, membership interests in a limited liability company,
beneficial interests in a trust or other equity ownership interests in a Person, and any warrants, options or other rights entitling
the holder thereof to purchase or acquire any such Equity Interest.

 

(u)         “Event
of Default” shall have the meaning set forth in the Notes.

 

(v)         “GAAP”
means generally accepted accounting principles in the United States of America as in effect from time to time.

 

(w)        “Indebtedness”
means, with respect to any Person at any date, without duplication, (a) all indebtedness of such Person for borrowed money,
(b) all obligations of such Person for the deferred purchase price of property or services, (c) all obligations of such
Person evidenced by notes, bonds, debentures or other similar instruments, (d) all indebtedness created or arising under any
conditional sale or other title retention agreement with respect to property acquired by such Person (even though the rights and
remedies of the seller or the Lender and Dominion under such agreement in the event of default are limited to repossession or sale
of such property), (e) all capital lease obligations of such Person, (f) all obligations of such Person, contingent or
otherwise, as an account party or applicant under acceptance, letter of credit, surety bond or similar facilities, (g) all
obligations of such Person, contingent or otherwise, to purchase, redeem, retire or otherwise acquire for value any capital stock
of such Person, (h) all obligations for any earn-out consideration, (i) the liquidation value of preferred capital stock of
such Person, (j) all guarantee obligations of such Person in respect of obligations of the kind referred to in clauses (a)
through (i) above, (k) all obligations of the kind referred to in clauses (a) through (i) above secured by (or for which
the holder of such obligation has an existing right, contingent or otherwise, to be secured by) any lien on property (including,
without limitation, accounts and contract rights) owned by such Person, whether or not such Person has assumed or become liable
for the payment of such obligation and all obligations of such Person in respect of hedge agreements; and (l) all Contingent Obligations
in respect to indebtedness or obligations of any Person of the kind referred to in clauses (a)-(k) above. The Indebtedness of any
Person shall include, without duplication, the Indebtedness of any other entity (including any partnership in which such Person
is a general partner) to the extent such Person is liable therefor as a result of such Person’s ownership interest in or
other relationship with such entity, except to the extent the terms of such Indebtedness expressly provide that such Person is
not liable therefor.

 

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(x)         “July
2015 $1,000,000 Note” has the meaning set forth in the definition of “Documents” in this Section 1.

 

(y)         “Liens”
or “liens” means a lien, mortgage, charge pledge, security interest, encumbrance, right of first refusal, preemptive
right or other restriction, or other clouds on title.

 

(z)         “Intercreditor
and Subordination Agreement” means the Intercreditor and Subordination Agreement dated the date hereof by and among the
Borrower, the Lender and Dominion and certain other persons named therein, the form of which is annexed hereto as Exhibit F.

 

(aa)       “Leak-Out
Agreement” shall have the meaning set forth in the definitions of “Documents” in this Section 1, the form
of which is annexed hereto as Exhibit G.

 

(bb)       “Lender
UCC Filings” shall have the meaning set forth in the definition of “Documents” set forth in this Section
1, copies of which all Lenders UCC Documents are annexed hereto as Exhibit I.

 

(cc)       “Lock-Up
Agreement” has the meaning set forth in the definition of “Documents” set forth in this Section H.

 

(dd)       “Liabilities”
means all direct or indirect liabilities, Indebtedness and obligations of any kind of Borrower to the Lender, howsoever created,
arising or evidenced, whether now existing or hereafter arising (including those acquired by assignment), absolute or contingent,
due or to become due, primary or secondary, joint or several, whether existing or arising through discount, overdraft, purchase,
direct loan, participation, operation of law, or otherwise, including, but not limited to, pursuant to the Notes, this Agreement
and/or any of the other Documents, all accrued but unpaid interest on the Notes the principal, any letter of credit, any standby
letter of credit, and/or outside attorneys’ and paralegals’ fees or charges relating to the preparation of the Documents
and the enforcement of Lender’s rights, remedies and powers under this Agreement, the Notes and/or the other Documents.

 

(ee)       “Loan
Maturity Date” means the earlier of the date (i) three hundred sixty (360) days from the Closing Date, (ii) of the consummation
of a Major Transaction, (iii) of an Event of Default and/or the date any the principal under the Notes is accelerated and/or becomes
due and payable for any reason other than an Event of Default

 

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(ff)         “Major Transaction” means any of the following (i) the Borrower, directly or indirectly, in one or more related
transactions effects any merger or consolidation of the Borrower with or into another Person, (ii) the Borrower, directly or indirectly,
effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially all of its assets
in one or a series of related transactions, (iii) any, direct or indirect, purchase offer, tender offer or exchange offer (whether
by the Borrower or another Person) is completed pursuant to which holders of Common Stock are permitted to sell, tender or exchange
their shares for other securities, cash or property and has been accepted by the holders of 30% or more of the outstanding Common
Stock, (iv) the Borrower, directly or indirectly, in one or more related transactions effects any reclassification, reorganization
or recapitalization of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted
into or exchanged for other securities, cash or property, (v) the Borrower, directly or indirectly, in one or more related transactions
consummates a stock or share purchase agreement or other business combination (including, without limitation, a reorganization,
recapitalization, spin-off or scheme or arrangement) with another Person whereby such other Person acquires more than 30% of the
outstanding shares of Common Stock (not including any shares of Common Stock held by the other Person or other Persons making or
party to, or associated or affiliated with the other Persons making or party to, such stock or share purchase agreement or other
business combination), (vi) the majority of directors of the Borrower as of the date hereof are no longer the majority number of
directors; and/or (vii) a Qualified Offering.

 

(gg)       “Material Adverse Effect” means a material adverse effect on (a) the business, assets, property, operations,
or condition (financial or otherwise) of Borrower, (b) the validity or enforceability of this Agreement or any of the other
Documents or (c) the rights or remedies of the Lender hereunder or thereunder.

 

(hh)       “Notes” means all of the 12% Senior Secured Convertible Promissory Notes due September 23, 2016 of the Borrower
owned by the Lender, which, subject to the terms and conditions set forth in this Agreement, shall purchase from the Borrower pursuant
to this Agreement, the form of Note is annexed hereto as Exhibit A. The term “Notes” also means
the Additional Notes issued to Dominion pursuant to an Exchange Agreement as of September 24, 2015 by and between Dominion and
the Borrower (the “Dominion Exchange Agreement”), and any and all Note(s) issued in exchange, transfer or replacement
of the Notes and/or the Additional Notes.

 

(ii)         “Patent
of Trademark Security Agreement” means the Patent and Trademark Security Agreement date on or about the date hereof,
by and among, the the Lender and Dominion, the Borrowers and the Borrower’s Subsidiaries and all documents filed to perfect
the Lender’s security interest in the Patents and Trademark, both terms as defined in such agreement, which is annexed into
as Exhibit K.

 

(jj)         “Pay-Off
Letter” means the Pay-Off Letter between the Company and Discover, in the form annexed hereto as Exhibit M.

 

(kk)       “OFAC”
means the United States Department of the Treasury’s Office of Foreign Assets Control.

 

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(ll)         “OFAC
Regulations” means the regulations promulgated by OFAC, as amended from time to time.

 

(mm)     “Permitted
Governmental Indebtedness” means Indebtedness provided by the Export and Import Bank of the United States of America
or other similar governmental entity for the purpose of supporting product sales by the Borrower.

 

(nn)      “Permitted
Indebtedness” means (i) Indebtedness of the Borrower evidenced by the Notes, this Agreement and/or any other Document
in favor of the Lender including all Liabilities, (ii) Indebtedness of the Borrower set forth in Borrower’s most recent SEC
Report, provided none of such Indebtedness, has not been increased, extended and/or otherwise changed since the original issuance
date of Indebtedness), (iii) Indebtedness secured by Permitted Liens described in clauses “(iv)” of the definition
of Permitted Liens, and (iv) Permitted Governmental Indebtedness.

 

(oo)      “Permitted
Liens” means (i) any Lien for taxes not yet due or delinquent or being contested in good faith by appropriate proceedings
for which adequate reserves have been established in accordance with GAAP, (ii) any statutory Lien arising in the ordinary course
of business by operation of law with respect to a liability that is not yet due or delinquent, (iii) any Lien created by operation
of law, such as materialmen’s liens, mechanics’ liens and other similar liens, arising in the ordinary course of business
with respect to a liability that is not yet due or delinquent or that are being contested in good faith by appropriate proceedings,
(iv) Liens (a) upon or in any equipment acquired or held by the Borrower to secure the purchase price of such equipment or indebtedness
incurred solely for the purpose of financing the acquisition or lease of such equipment, and (b) existing on such equipment at
the time of its acquisition, provided that the Lien is confined solely to the property so acquired and improvements thereon, and
the proceeds of such equipment, (v) any Liens for Permitted Indebtedness perfecting security interests in the Permitted Indebtedness
set forth in Section (i) of (ii) of definition of Permitted Indebtedness and (vi) the UCC Financing Statement dated July__, 2015
filed with the Secretary of State of Nevada perfecting the $1,000,000 of Indebtedness represented by the July 2015 $1,000,000 Note
provided such Lien was in existence since on or about the original date such July 2015 $1,000,000 Note was purchased from
the Borrower and since such date such Liens and security interests related hereto has not been amended, supplemented and/or otherwise
modified.

 

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

 

(qq)      “Pledged
Securities” has the meaning set forth in the definition of “Documents”

 

(rr)        “Principal
Market” means the market or exchange on which the Common Stock is listed or quoted for trading on the date in question

 

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(ss)       “Purchase Price” means the price to be paid by Lender to purchase such Lender’s Note.

 

(tt)         The
“Required Reserve Amount” has the meaning set forth in Section 4.1(s).

 

(uu)       “Qualified
Offering” means (i) a firm commitment public offering of shares of the Common Stock (and any other securities of the
Company that may be sold along with shares of Common Stock in any such firm commitment public offering), (ii) the gross proceeds
resulting from such firm commitment public offering are equal to or exceed, in the aggregate, $9,000,000, and (iii) (x) the shares
of Common Stock, including, but not limited to, the Underlying Shares, are approved for listing and/or quotation on one of the
exchanges or markets set forth below, and (y) on the next Trading Day following the date the Commission declares the registration
statement registering under the Securities Act the sale of the shares of Common Stock (and any other securities being issued or
sold in such Qualified Offering, if any), being sold to investors in such firm commitment public offering effective (the “Qualified
Offering Conversion Date”), the shares of Common Stock and commence trading on the New York Stock Exchange, NYSE MKT,
the Nasdaq Global market, the Nasdaq Global Select Members or the Nasdaq Capital Market.

 

(vv)       “RD
SPA” has the meaning set forth in the definition of Simultaneous Transactions in this Section 1.

 

(ww)     “Registration
Rights Agreement” means that certain registration rights agreement, date the date hereof, by and between the Borrower
and the Lender pursuant to which the Borrower shall register the Underlying Shares for resale under the Securities Act, the form
of which is annexed hereto as Exhibit C.

 

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

 

(yy)       “SEC
Reports” has the meaning set forth in Section 3.1(aa) hereof.

 

(zz)        “Securities”
means the Notes and the Warrants purchased pursuant to this Agreement and all Underlying Shares and any securities of the Borrower
issued in replacement, substitution and/or in connection with any exchange, conversion and/or any other transaction pursuant to
which all or any of such securities of the Borrower to the Lender.

 

(aaa)     “Security
Agreement” means the Security Agreement dated on or about the date hereof by and among the Borrower, the Subsidiaries
of the Borrower, and the Lender and Dominion as hereinafter amended and/or supplemented altogether with all exhibits, schedules
and annexes to such Security Agreement, pursuant to which all Liabilities and Indebtedness of the Borrower to the Lender under
the Documents including, but not limited to, the Notes and Additional Notes are secured by the Collateral which security interest
in the Collateral shall be perfected by the Lenders UCC-1, filed with the Secretary of State of the State of Nevada, to the extent
perfectable by the filing of a UCC 1 Financing Statement and such other documents and instruments related thereto, which Security
Agreement is annexed hereto as Exhibit E.

 

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(bbb)     “Simultaneous
Transactions” means each of the following:

 

(i)         Pursuant
to a Securities Purchase Agreement dated as of September 30, 2015 by and between Delafield and the Borrower (the “RD SPA”),
among other items, Delafield shall have purchased from the Borrower in a registered direct offering by the Borrower (i) $3,055,556
Stated Value of the Borrower’s shares of Series H 12% Convertible Preferred Stock (the “H Shares”) with
each H Share having a stated value (the “Stated Value”) of $1,000 and having such other terms and conditions
set forth in the Certificate of Designation for the H Shares (the “H Certificate”), and (ii) common stock purchase
warrants to purchase shares of Common Stock of the Borrower (the “RD Warrants”);

 

(ii)        Pursuant
to the Dominion Exchange, Dominion exchanged securities of the Borrower previously purchased by Dominion from the Borrower solely
for Additional Notes;

 

(iii)       Pursuant
to a Repurchase Agreement dated as September 23, 2015, by and between the Borrower and Discover Growth Fund, a Cayman Island company
(“Discover”), the Borrower has repurchased, or has funds and executed documents in escrow, to purchase, shares of Series
G Preferred Stock of the Company (the “G Shares”), and shares of Common Stock owned by Discover (collectively,
the “Discover Securities”), which such Discover Securities represents all of the Securities of the Company owned
by Discover and the Discover Releasing Parties (as defined in the Repurchase Agreement), for $4,750,000, and all shares of Common
Stock reserved for issuance upon conversion of the G Shares become authorized but unissued shares of Common Stock, and the Borrower
entered into such other documents and agreements with Discover so requested by the Lender and Dominion, all of which such documents
shall be in form and substance satisfactory to the Lender in its sole discretion.

 

(ccc)     “Solvent”
means, with respect to any Person, as of any date of determination, (i) the amount of the “present fair saleable value”
of the assets of such Person will, as of such date, exceed the amount of all “liabilities of such Person, contingent or otherwise”,
as of such date, as such quoted terms are determined in accordance with applicable federal and state laws governing determinations
of the insolvency of debtors, (ii) the present fair saleable value of the assets of such Person will, as of such date, be
greater than the amount that will be required to pay the liability of such Person on its debts as such debts become absolute and
matured, (iii) such Person will not have, as of such date, an unreasonably small amount of capital with which to conduct its
business, and (iv) such Person will be able to pay its debts as they mature. For purposes of this definition, (i) “debt”
means liability on a “claim”, and (ii) “claim” means any (a) right to payment, whether or not such
a right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable,
secured or unsecured or (b) right to an equitable remedy for breach of performance if such breach gives rise to a right to
payment, whether or not such right to an equitable remedy is reduced to judgment, fixed, contingent, matured or unmatured, disputed,
undisputed, secured or unsecured.

 

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(ddd)    “Subsidiary”
means, with respect to any Person, a corporation, partnership, limited liability company or other entity of which shares of stock
or other ownership interests having ordinary voting power (other than stock or such other ownership interests having such power
only by reason of the happening of a contingency) to elect a majority of the board of directors or other managers of such corporation,
partnership or other entity are at the time owned, or the management of which is otherwise controlled, directly or indirectly through
one or more intermediaries, or both, by such Person all of the Borrower’s Subsidiaries are set forth on Schedule 3.1(a) hereto.

 

(eee)     “Trading
Day” means any day on which the Common Stock is traded on the Trading Market, provided that “Trading Day”
shall not include any day on which the Common Stock is scheduled to trade on the Trading 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 the Trading Market (or if the Trading Market
does not designate in advance the closing time of trading on the Trading Market, then during the hour ending at 4:00:00 p.m., New
York City time) unless such day is otherwise designated as a Trading Day in writing by the Lender.

 

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

 

(ggg)    “Transfer
Agent” means VStock Transfer, LLC, the current transfer agent of the Company, with a mailing address of 18 Lafayette
Place, Woodmere, New York 11598 and a facsimile number of (646) 536-3179, and any successor transfer agent of the Borrower.

 

(hhh)    “Transfer
Agent Irrevocable Instruction Letter” means the letter from the Company to the Transfer Agent which instructs the Transfer
Agent to issue shares of Common Stock upon conversion of the Note, in the form of Exhibit D attached hereto.

 

(iii)        “UCC” means the Uniform Commercial Code of as in effect from time to time in the State of New York; provided,
however, that in the event that, by reason of mandatory provisions of law, any or all of the attachment, perfection, priority,
or remedies with respect to the Lender’s Liens on any Collateral is governed by the Uniform Commercial Code as enacted and
in effect in a jurisdiction other than the State of New York, the term “UCC” shall mean the Uniform Commercial
code as enacted and in effect in such other jurisdiction solely for purposes of the provisions thereof relating to such attachment,
perfection, priority, or remedies.

 

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(jjj)         “Underlying
Shares” means all Warrant Shares and Conversion Shares.

 

(kkk)     “Variable Rate Transaction” shall have the meaning set forth in Section 4.02(n) of this Agreement.

 

(lll)        “Warrant(s)”
means the five (5) year Common Stock Purchase Warrants of the Borrower, the form of which is annexed hereto as Exhibit B.

 

(mmm)   “Warrant
Shares” means all shares of Common Stock issuable upon exercise of the Warrants and/or any other securities issuable
upon exercise of the Warrants.

 

1.2         Other Definitional Provisions.

 

(a)         Use of Defined Terms.
Unless otherwise specified therein, all terms defined in this Agreement shall have the defined meanings when used in the other
Documents or any certificate or other document made or delivered pursuant hereto or thereto.

 

(b)         Accounting Terms.
As used herein and in the other Documents, and any certificate or other document made or delivered pursuant hereto or thereto,
accounting terms relating to Borrower not defined in 1.1 and accounting terms partly defined in 1.1, to the extent
not defined, shall have the respective meanings given to them under GAAP (provided that all terms of an accounting or financial
nature used herein shall be construed, and all computations of amounts referred to herein shall be made without giving effect to
(i) any election under Accounting Standards Codification 825-10-25 (previously referred to as Statement of Financial Accounting
Standards 159) (or any other Accounting Standards Codification or Financial Accounting Standard having a similar result or effect)
to value any Indebtedness or other liabilities of Borrower at “fair value”, as defined therein, and (ii) any treatment
of Indebtedness in respect of convertible debt instruments under Accounting Standards Codification 470-20 (or any other Accounting
Standards Codification or Financial Accounting Standard having a similar result or effect) to value any such Indebtedness in a
reduced or bifurcated manner as described therein, and such Indebtedness shall at all times be valued at the full stated principal
amount thereof).

 

(c)         Construction. The
words “hereof”, “herein” and “hereunder” and words of similar import when
used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement, and Section,
Schedule and Exhibit references are to this Agreement unless otherwise specified. The meanings given to terms defined herein shall
be equally applicable to both the singular and plural forms of such terms.

 

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(d)         UCC Terms. Terms
used in this Agreement which are defined in the UCC shall, unless the context indicates otherwise or are otherwise defined in this
Agreement, have the meanings provided for by the UCC.

 

ARTICLE 2

LOAN AND PURCHASE OF NOTES
AND WARRANTS

 

2.1         Closing. The Closing shall
occur at 10:00 am (EST) on the Closing Date at the offices of Gusrae Kaplan Nusbaum PLLC,
120 Wall Street, 25th Floor, New York, New York 10005, on the first (1st) Trading Day on which the
conditions to Closing set forth in Section 5 hereof are satisfied or waived in writing as provided elsewhere herein, or
on such other date and time as agreed to by the Borrower and Lender.

 

2.2         Conditions to Purchase of Notes
and Warrants. Subject to the terms and conditions of this Agreement, the Lender will at the Closing, on the Closing Date, purchase
from the Borrower the Notes and Warrants in the amounts and for the Purchase Price as set forth on Schedule 1,
provided that (i) no Event of Default (or event that with the passage of time or the giving of notice, or both, would become
an Event of Default), shall have occurred or would result therefrom; and (ii) the conditions in Section 5.01 have been satisfied.

 

2.3         Purchase Price and Payment of
the Purchase Price for the Notes and Warrants. The Purchase Price for the Notes and Warrants to be purchased by the Lender
shall be as set forth on Schedule 1 and shall be paid at the Closing, (less all of the Lender’s Expenses (as defined
below)), by the Lender by wire transfer of immediately available funds to the Borrower in accordance with the Borrower’s
written wiring instructions, against delivery of the Notes and Warrants. The Purchase Price for each Note purchased shall be ten
(10%) less than the aggregate principal amount of each such Note purchased, which 10% discount shall constitute original issue
discount.

 

2.4         Lender’s Cost and Expenses.
On the Closing Date, all direct and indirect costs and expenses of the Lender related to the negotiation, due diligence, preparation,
closing, and all other items regarding or related to this Agreement and the other Documents and all of the transactions contemplated
herein and/or therein including, but not limited to, the Simultaneous Transactions, including, but not limited to the legal fees
and expenses of the Lender’s legal counsel (collectively, the “Lender’s Expenses”), shall be due
and payable from the Borrower to the Lender; and the Lender shall subtract from their respective Purchase Price to be paid to the
Borrower for the purchase of the Notes and Warrants, all of such Lender’s Expenses. Although the Lender’s Expenses
are the sole responsibility and obligation of the Borrower, but are being subtracted by the Lender from their respective Purchase
Prices actually paid to the Borrower, such Lender’s Expenses shall constitute part of such Purchase Prices and shall not
directly and/or indirectly reduce and or result in any set-off the aggregate principal amount of the Note or result in a set-off
and/or reduction of any other funds owed by the Borrower to the Lender.

 

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ARTICLE 3

REPRESENTATIONS AND WARRANTIES;
OTHER ITEMS

 

3.1         Representation and Warranties.
Borrower (which for purposes of this Section 3 means the Borrower and all of its Subsidiaries), represents and warrants to the
Lender that on the Closing Date:

 

(a)         Subsidiaries. All
of the direct and indirect subsidiaries of the Borrower are set forth on Schedule 3.1(a). The Borrower owns, directly or
indirectly, all of the capital stock or other equity interests of each Subsidiary free and clear of any Liens, and all of the issued
and outstanding shares of capital stock of each Subsidiary are validly issued and are fully paid, non-assessable and free of preemptive
and similar rights to subscribe for or purchase securities.

 

(b)         Organization, Etc.
Borrower is duly organized, validly existing and in good standing under the laws of the state of their respective organization
and are duly qualified and in good standing or has applied for qualification as a foreign corporation authorized to do business
in each jurisdiction where, because of the nature of its activities or properties, such qualification is required except where
the failure to be so qualified would not reasonably be expected to have a Material Adverse Effect.

 

(c)         Authorization: No Conflict.
The execution, delivery and performance of the Documents and the transactions contemplated thereby by the Borrower, including,
but not limited to, the sale and issuance of the Note and the Warrant for the Purchase Price, the reservation for issuance of the
shares of Common Stock required to be reserved pursuant to the terms of the Notes, and Warrants and of the sale and issuance the
Conversion Shares into which the Notes are convertible into and the Warrant Shares issuable upon exercise of the Warrant (i) are
within Borrower’s corporate powers, (ii) have been duly authorized by all necessary action by or on behalf of Borrower (and/or
its shareholders to the extent required by law), (iii) the Borrower has received all necessary and/or required governmental,
regulatory and other approvals and consents (if any shall be required), (iv) do not and shall not contravene or conflict with any
provision of, or require any consents under (1) any law, rule, regulation or ordinance, (2) Borrower’s organizational documents;
and/or (3) any agreement binding upon Borrower or any of Borrower’s properties except as would not reasonably be expected
to have a Material Adverse Effect, and (v) do not result in, or require, the creation or imposition of any Lien and/or encumbrance
on any of Borrower’s properties or revenues pursuant to any law, rule, regulation or ordinance or otherwise.

 

(d)         Validity and Binding
Nature. The Documents to which Borrower is a party are the legal, valid and binding obligations of Borrower, enforceable against
Borrower in accordance with their respective terms, except as enforceability may be limited by bankruptcy, insolvency, reorganization
and other similar laws of general application affecting the rights and remedies of creditors and by general equitable principles
(whether enforcement is sought by proceedings in equity or at law).

 

(e)         Title to Assets.
Borrower has good and marketable title to all assets owned by Borrower.

 

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(f)         No Violations of Laws.
Borrower is not in violation of any law, ordinance, rule, regulation, judgment, decree or order of any federal, state or local
governmental body or court and/or regulatory or self-regulatory body.

 

(g)         Burdensome Obligations.
Borrower is not a party to any indenture, agreement, lease, contract, deed or other instrument, or subject to any partnership restrictions
or has any knowledge of anything which could have a Material Adverse Effect.

 

(h)         Taxes. All federal,
and material state and local tax returns required to be filed by Borrower have been filed with the appropriate governmental agencies
and all taxes due and payable by Borrower have been timely paid.

 

(i)         Employee Benefit Plans.
The term “Plan” means an “employee pension benefit plan” (as defined in Section 3 of Employee Retirement
Income Security Act of 1974, as amended from time to time (“ERISA”)) which is or has been established or maintained,
or to which contributions are or have been made, by Borrower or by any member of the Controlled Group. Each plan and/or employee
benefit plan, if any, (as defined in Section 3(3) of ERISA) maintained by Borrower complies in all material respects with all applicable
requirements of law and regulations and all payments and contributions required to be made with respect to such plans have been
timely made.

 

(j)         Federal Laws and Regulations.
Borrower is not (i) an “investment Borrower” or a Borrower “controlled”, whether directly or indirectly,
by an “investment company”, within the meaning of the Investment Company Act of 1940, as amended; or (ii) engaged principally,
or as one of its important activities, in the business of extending credit for the purpose of purchasing or carrying margin stock
(within the meaning of Regulation U of the Board of Governors of the Federal Reserve System).

 

(k)         Fiscal Year. The
fiscal year of Borrower ends on December 31 of each year.

 

(l)         Subsidiaries; Etc.
All Subsidiaries of the Borrower and the locations thereof on the Closing Date are set forth in the SEC Reports. The SEC Reports
set forth as of the Closing Date, Borrower’s jurisdiction of organization and the location of Borrower’s executive
offices and other places of business.

 

(m)   
   Officers and Ownership. As of the date hereof, the Persons set forth in the SEC Reports holds the
respective office or offices, position or positions (including director positions if a director), in Borrower and (ii) own
the percentage of each and every class of issued and outstanding capital stock, other ownership interests and/or securities
of Borrower and the voting power over said capital stock, other ownership interests and/or securities of Borrower.

 

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(n)         Rule 506(d) Bad Actor
Disqualification Representations and Covenants.

 

(i)         No Disqualification Events.
Neither the Borrower, nor any of its predecessors, affiliates, any manager, executive officer, other officer of the Borrower participating
in the offering, any beneficial owner (as that term is defined in Rule 13d-3 under the Exchange Act) of 20% or more of the Borrower’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 Securities Act) connected with the Borrower in any capacity as of the date of this Agreement and on the Closing Date
(each, a “Borrower Covered Person” and, together, “Borrower Covered Persons”) is subject
to any of the “Bad Actor” disqualifications described in Rule 506(d)(1)(i) to (viii) under the Securities Act (a “Disqualification
Event”), except for a Disqualification Event covered by Rule 506(d)(2) or (d)(3). The Borrower has exercised reasonable
care to determine (i) the identity of each person that is a Borrower Covered Person; and (ii) whether any Borrower Covered Person
is subject to a Disqualification Event. The Borrower will comply with its disclosure obligations under Rule 506(e).

 

(ii)         Other Covered Persons.
The Borrower is not aware of any person (other than any Borrower Covered Person) that has been or will be paid (directly or indirectly)
remuneration in connection with the Loan and the Note and/or the Warrants that is subject to a Disqualification Event (each an
“Other Covered Person”).

 

(iii)       Reasonable Notification
Procedures. With respect to each Borrower Covered Person, the Borrower has established procedures reasonably designed to ensure
that the Borrower receives notice from each such Borrower Covered Person of (i) any Disqualification Event relating to that Borrower
Covered Person, and (ii) any event that would, with the passage of time, become a Disqualification Event relating to that Borrower
Covered Person; in each case occurring up to and including the Closing Date.

 

(iv)       Notice of Disqualification
Events. The Borrower will notify the Lender immediately in writing upon becoming aware of (i) any Disqualification Event relating
to any Borrower Covered Person and (ii) any event that would, with the passage of time, become a Disqualification Event relating
to any Borrower Covered Person and/or Other Covered Person.

 

(o)         Accuracy of Information,
etc. No statement or information contained in this Agreement, the SEC Reports, any other Document or any other document, certificate
or statement furnished to the Lender by or on behalf of Borrower in writing for use in connection with the transactions contemplated
by this Agreement and/or the other Documents, contained as of the date such statement, information, document or certificate was
made or furnished, as the case may be, any untrue statement of a material fact or omitted to state a material fact necessary to
make the statements contained herein or therein, taken as a whole, not materially misleading. There is no fact known to Borrower
that could have a Material Adverse Effect that has not been expressly disclosed herein, in the other Documents, or in any other
documents, certificates and statements furnished to the Lender for use in connection with the transactions contemplated hereby
and by the other Documents.

 

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(p)         Solvency. Borrower
is as of the date hereof Solvent; and shall be Solvent immediately prior to, and immediately following the Closing, after giving
effect to the incurrence of all Indebtedness and all other obligations being incurred by the Borrower pursuant hereto and the other
Documents including, but not limited to, all Liabilities and pursuant to the other Documents and the use of the Purchase Prices
as provided elsewhere herein.

 

(q)         Affiliate Transactions.
Other than as disclosed in the SEC Reports, Borrower has not purchased, acquired or leased any property from, or sold, transferred
or leased any property to, or entered into any other transaction with (i) any Affiliate, (ii) any officer, director, manager, shareholder
or member of Borrower or any Affiliate of any thereof, or (iii) any member of the immediate family of any of the foregoing, except
on terms comparable to the terms which would prevail in an arms-length transaction between unaffiliated third parties and have
been disclosed to the Lender in writing.

 

(r)         Intellectual Property.
The Borrower has, or has rights to use, all patents, patent applications, trademarks, trademark applications, service marks, trade
names, trade secrets, inventions, copyrights, licenses and other intellectual property rights and similar rights as described in
the SEC Reports as necessary or required for use in connection with its business and which the failure to so have could have a
Material Adverse Effect (collectively, the “Intellectual Property Rights”). None of, and the Borrower has not
received a notice (written or otherwise) that any of, the Intellectual Property Rights has expired, terminated or been abandoned,
or is expected to expire or terminate or be abandoned. The Borrower has not received, since the date of the latest audited financial
statements included within the SEC Reports, a written notice of a claim or otherwise has any knowledge that the Intellectual Property
Rights violate or infringe upon the rights of any Person, except as could not have or reasonably be expected to not have a Material
Adverse Effect. To the knowledge of the Borrower, all such Intellectual Property Rights are enforceable and there is no existing
infringement by another Person of any of the Intellectual Property Rights. The Borrower has taken reasonable security measures
to protect the secrecy, confidentiality and value of all of their intellectual properties, except where failure to do so could
not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. All Intellectual Property Rights
of the Borrower are set forth in the SEC Reports.

 

(s)         Variable Rate Securities.
The Borrower has not directly and/or indirectly entered into, nor has any agreement, intention and/or obligation to enter into
any Variable Rate Transaction.

 

(t)         USA Patriot Act.
Borrower is in compliance, in all material respects, with (a) the Trading with the Enemy Act, as amended, and each of the foreign
assets control regulations of the United States Treasury Department (31 C.F.R., Subtitle B, Chapter V, as amended) and any other
enabling legislation or executive order relating thereto, and (b) the USA Patriot Act (Title III of Pub. L. 107-56, signed into
law October 26, 2001) (the “Act”). No part of the proceeds of the Loan will be used, directly or indirectly,
for any payments to any governmental official or employee, political party, official of a political party, candidate for political
office, or anyone else acting in an official capacity, in order to obtain, retain or direct business or obtain any improper advantage,
in violation of the United States Foreign Corrupt Practices Act of 1977, as amended.

 

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(u)         Foreign Asset Control
Laws. Borrower is not a Person named on a list published by OFAC or a Person with whom dealings are prohibited under any OFAC
Regulations.

 

(v)         Indebtedness; Liens,
Etc. Except for Permitted Indebtedness and Permitted Liens, the Borrower has no Indebtedness nor any Liens.

 

(w)         Authorization; Enforcement.
All corporate action on the part of the Borrower, its officers, directors and stockholders necessary for the authorization, execution
and delivery of the Documents and the performance of all obligations of the Borrower under the Documents, and have been taken on
or prior to the date hereof. Each of the Documents has been duly executed by the Borrower and, when delivered in accordance with
the terms hereof and thereof, will constitute the valid and binding obligation of the Borrower enforceable against the Borrower
in accordance with its terms, except: (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization,
moratorium and other laws of general application affecting enforcement of creditors’ rights generally, (ii) as limited by
laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification
and contribution provisions may be limited by applicable law.

 

(x)         Valid Issuance of the
Notes, Warrants and Underlying Shares, Etc. Each of the Notes and Warrants has been duly authorized and, when issued and paid
for in accordance with this Agreement, will be duly and validly issued, fully paid and nonassessable, free and clear of all Liens
and all restrictions on transfer other than those expressly imposed by the federal securities laws and vest in the Lender full
and sole title and power to the Notes and the Warrants purchased hereby by the Lender, free and clear of all Liens, and restrictions
on transfer other than those imposed by the federal securities laws. All Conversion Shares when issued pursuant to conversion of
the Note; and all Warrant Shares when issued pursuant to any exercise of the Warrants, will be duly and validly issued, fully paid
and nonassessable, will be free and clear of all Liens and all restrictions on transfer other than those expressly imposed by the
federal securities laws and vest in the holder full and sole title and power to such securities. The Borrower has reserved from
its duly authorized unissued Common Stock, the Required Reserve Amount, which Required Reserve Amount shall be continuously determined
by the Borrower to ensure that the Required Reserve Amount is in reserve with the Transfer Agent at all times. The Warrants, the
Notes, Warrant Shares and all Conversion Shares shall sometimes be collectively referred to as the “Securities.”

 

(y)         Offering. The offer
and sale of the Notes and Warrants as contemplated by this Agreement, the Notes and the Warrants, are exempt from the registration
requirements of the Securities Act, and the qualification or registration requirements of state securities laws or other applicable
blue sky laws. Neither the Borrower nor any authorized agent acting on its behalf will take any action hereafter that would cause
the loss of such exemptions.

 

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(z)         Capitalization and Voting
Rights. The authorized capital stock of the Borrower and all securities of the Borrower issued and outstanding are set forth
in the SEC Reports as of the dates reflected therein. All of the outstanding shares of Common Stock and other securities of the
Borrower have been duly authorized and validly issued, and are fully paid and nonassessable. Except as set forth in the SEC Reports,
there are no agreements or arrangements under which the Borrower is obligated to register the sale of any of the Borrower’s
securities under the Securities Act. Except as set forth in the SEC Reports, no shares of Common Stock and/or other securities
of the Borrower are entitled to preemptive rights and there are no outstanding debt securities and no contracts, commitments, understandings,
or arrangements by which the Borrower is or may become bound to issue additional shares of the capital stock and/or other securities
of the Borrower or options, warrants, scrip, rights to subscribe to, calls or commitments of any character whatsoever relating
to, or securities or rights convertible into or exchangeable for, any shares of capital stock of the Borrower other than those
issued or granted in the ordinary course of business pursuant to the Borrower’s equity incentive and/or compensatory plans
or arrangements. Except for customary transfer restrictions contained in agreements entered into by the Borrower to sell restricted
securities and/or as set forth in the SEC Reports, the Borrower is not a party to, and it has no knowledge of, any agreement restricting
the voting or transfer of any shares of the capital stock and/or other securities of the Borrower. Except as set forth in the SEC
Reports, the offer and sale of all capital stock, convertible or exchangeable securities, rights, warrants, options and/or any
other securities of the Borrower when any such securities of the Borrower were issued complied with all applicable federal and
state securities laws, and no current and/or prior holder of any securities of the Borrower has any right of rescission or damages
or any “put” or similar right with respect thereto that would have a Material Adverse Effect. Except as set forth in
the SEC Reports, there are no securities or instruments of the Borrower containing anti-dilution or similar provisions that will
be triggered by the issuance and/or sale of the Securities and/or the consummation of the transactions described herein or in any
of the other Documents.

 

(aa)      SEC
Reports. The Borrower is subject to the reporting requirements of Section 13 or 15(d) of the
Exchange Act and the Borrower is current in its filing obligations under the Exchange Act, including, without limitation, as to
its filings of Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K (collectively, the
“SEC Reports”). The SEC Reports, at the time filed with the SEC, did not contain any untrue statement of a
material fact or omit to state any fact necessary to make any statement therein not misleading. All financial statements included
in the SEC Reports (the “Financial Statements”) have been prepared in accordance GAAP applied on a consistent
basis throughout the periods indicated and with each other, except that unaudited Financial Statements may not contain all footnotes
required by generally accepted accounting principles. The Financial Statements fairly present, in all material respects, the financial
condition and operating results of the Borrower as of the dates, and for the periods, indicated therein, subject in the case of
unaudited Financial Statements to normal year-end audit adjustments.

 

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

 

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(ee)       Arbitration,
Absence of Litigation. Except as disclosed in the SEC Reports, there is no action, suit, proceeding,
inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending
or, to the knowledge of the Borrower, threatened against or affecting the Borrower, the Common Stock or any of the Borrower’s
officers or directors or 5% or greater shareholders in their capacities as such.

 

(gg)       Material Changes; Undisclosed
Events, Liabilities or Developments. Except as provided in Schedule 3.1(gg), since the date of the latest audited Financial
Statements included in the SEC Reports, except as specifically disclosed in a subsequent Public Report filed with the SEC prior
to the date hereof: (i) there has been no event, occurrence or development that has had or that could reasonably be expected to
result in a Material Adverse Effect, (ii) the Borrower has not incurred any liabilities (contingent or otherwise) other than (A)
trade payables and accrued expenses incurred in the ordinary course of business consistent with past practice and (B) liabilities
not required to be reflected in the Borrower’s Financial Statements pursuant to GAAP or disclosed in Public Reports pursuant
to SEC rules and/or regulations, (iii) the Borrower has not altered its method of accounting, (iv) the Borrower has not declared
or made any dividend or distribution of cash or other property to its stockholders or purchased, redeemed or made any agreements
to purchase or redeem any shares of its capital stock and (v) the Borrower has not issued any equity securities to any officer,
director or affiliate, except pursuant to existing Borrower stock option plans. The Borrower does not have pending before the Commission
any request for confidential treatment of information. Except for the issuance of the Securities contemplated by this Agreement,
no event, liability, fact, circumstance, occurrence or development has occurred or exists or is reasonably expected to occur or
exist with respect to the Borrower or its business, properties, operations, assets or financial condition, that would be required
to be disclosed by the Borrower under applicable securities laws at the time this representation is made or deemed made that has
not been publicly disclosed at least one Trading Day prior to the date that this representation is made.

 

(hh)       Disclosure. Except
with respect to the material terms and conditions of the transactions contemplated by the Documents, the Borrower confirms that
neither it nor any other Person acting on its behalf has provided the Lender or its agents or counsel with any information that
constitutes material, non-public information. The Borrower understands and confirms that the Lender will rely on the Documents,
the information included therein including, but not limited to, the foregoing representation and the SEC Reports in purchasing
the Notes and Warrants. All of the disclosure furnished by or on behalf of the Borrower to the Lender in the Documents and/or in
the SEC Reports regarding, among other matters relating to the Borrower, its business and the transactions contemplated in the
Documents, are true and correct in all material respects as of the date made and do not contain any untrue statement of a material
fact or omit to state any material fact necessary in order to make the statements made therein, in light of the circumstances under
which they were made, not misleading. The Borrower acknowledges and agrees that the Lender does not make nor has it made any representations
or warranties with respect to the transactions contemplated in the Documents other than those specifically set forth in Section
7 hereof.

 

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(ii)         No Integrated Offering.
Assuming the accuracy of the representations and warranties set forth in Section 7, neither the Borrower, nor any of its
affiliates, nor any Person acting on its or their behalf has, directly or indirectly, made any offers or sales of any security
or solicited any offers to buy any security, under circumstances that would cause the issuance and/or sale of the Securities to
be integrated with prior offerings of securities by the Borrower for purposes of (i) the Securities Act which would require the
registration of any such Securities and/or securities of the Borrower under the Securities Act, or (ii) any shareholder approval
provisions of any Trading Market on which any of the securities of the Borrower are listed, eligible for quotation and/or designated.

 

(jj)         Bankruptcy Status;
Indebtedness. The Borrower has no current intention or expectation to file for reorganization or liquidation under the bankruptcy
or reorganization laws of any jurisdiction within one year from the applicable representation date. All outstanding secured and
unsecured Indebtedness (as defined below) of the Borrower, or for which the Borrower has commitments, is set forth in the SEC Reports.

 

(kk)       Regulation M Compliance.
The Borrower has not, and to its knowledge no one acting on its behalf has, (i) taken, directly or indirectly, any action designed
to cause or to result in the stabilization or manipulation of the price of any security of the Borrower to facilitate the sale
or resale of any of the Securities, (ii) sold, bid for, purchased, or paid any compensation for soliciting purchases of, any of
the Securities, or (iii) paid or agreed to pay to any Person any compensation for soliciting another to purchase any other securities
of the Borrower.

 

(ll)         No Consents, Etc.
No direct or indirect consent, approval, authorization or similar item is required to be obtained by the Borrower to enter into
this Agreement, the Note, the Warrant and/or the other Documents to which it is a party and to perform or undertake any of the
transactions contemplated pursuant to this Agreement, the Note, the Warrant and/or any of the other Documents to which it is a
party.

 

(mm)     Listing of Securities.
All Underlying Shares and Warrant Shares have been approved for listing or quotation on the Trading Market, subject only to notice
of issuance.

 

(nn)      Dilutive Effect.
The Borrower understands and acknowledges that the number of Conversion Shares issuable pursuant to terms of the Notes and the
number of Warrant Shares issuable upon exercise of the Warrants will increase in certain circumstances. The Borrower further acknowledges
that its obligation to issue Conversion Shares pursuant to the terms of the Notes in accordance with this Agreement and the Notes
and its obligation to issue the Warrant Shares upon exercise of the Warrants in accordance with this Agreement and the Warrants
is, in each case, absolute and unconditional regardless of the dilutive effect that such issuance may have on the ownership interests
of other stockholders of the Borrower.

 

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(oo)       Application of Takeover
Protections; Rights Agreement.  The Borrower and its board of directors have taken all necessary action, if any, in order
to render inapplicable any control share acquisition, business combination, poison pill (including any distribution under a rights
agreement) or other similar anti-takeover provision under the Borrower’s Certificate of Incorporation or the laws of the
jurisdiction of its formation which is or could become applicable to the Lender as a result of the transactions contemplated by
this Agreement and/or the other Documents, including, without limitation, the Borrower’s issuance of the Securities and Lender’s
ownership of the Securities. The Borrower has not adopted a stockholder rights plan or similar arrangement relating to accumulations
of beneficial ownership of Common Stock or a change in control of the Borrower.

 

(pp)       Manipulation of Price.
The Borrower has not, and to its knowledge no one acting on its behalf has, (i) taken, directly or indirectly, any action designed
to cause or to result, or that could reasonably be expected to cause or result, in the stabilization or manipulation of the price
of any security of the Borrower to facilitate the sale or resale of any of the Securities, (ii) sold, bid for, purchased, or paid
any compensation for soliciting purchases of, any of the Securities, or (iii) paid or agreed to pay to any person any compensation
for soliciting another to purchase any other securities of the Borrower.

 

(qq)      DTC Eligible. The
Common Stock is DTC eligible and DTC has not placed a “freeze” or a “chill” on the Common Stock and the
Borrower has no reason to believe that DTC has any intention to make the Common Stock not DTC eligible, or place a “freeze”
or “chill” on the Common Stock.

 

(rr)        No Delisting from Trading
Market. The Common Stock is eligible for quotation on the Principal Market and the Borrower has no reason to believe that the
Principal Market has any intention of delisting the Common Stock from the Principal Market.

 

(ss)       No General Solicitation. 
Neither the Borrower, nor any of its affiliates, nor any Person acting on its 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 Borrower
has not engaged any placement agent or other agent in connection with the sale of the Securities.

 

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

 

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

 

(vv)      Subsidiary Rights. 
The Borrower 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 Borrower or any Subsidiary.

 

(ww)     Internal Accounting
and Disclosure Controls.  The Borrower maintains a system of internal accounting controls sufficient to provide reasonable
assurance that (i) transactions are executed in accordance with management’s general or specific authorizations, (ii) transactions
are recorded as necessary to permit preparation of financial statements in conformity with 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 Borrower maintains disclosure controls and procedures (as such term is defined in Rule 13a-15
under the Exchange Act) that are effective in ensuring that information required to be disclosed by the Borrower in the reports
that it files or submits under the Exchange 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 Borrower in the reports that it files or submits under the Exchange Act is accumulated and communicated
to the Borrower’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.  Except as disclosed in the SEC Reports,
during the twelve months prior to the date hereof the Borrower has not received any notice or correspondence from any accountant
relating to any material weakness in any part of the system of internal accounting controls of the Borrower

 

ARTICLE 4

COVENANTS

 

4.1         Affirmative Covenants. Commencing
on the Closing Date and until all the Liabilities are paid in full and this Agreement, Borrower covenants and agrees that:

 

(a)         Financial Statements
and Certificates. While any amounts are owed to the Lender from the Borrower (including, but not limited to, any Liability),
Borrower will furnish the following to the Lender, all in form and scope acceptable to the Lender, unless such information is included
in the Borrower’s most recent SEC Reports:

 

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(i)         within 105 days after
the close of each fiscal year of Borrower, a copy of the annual report of Borrower consisting of a balance sheet, statement of
operating results and retained earnings, statement of cash flows and notes to financial statements, profit and loss statement and
statement of changes in financial position of Borrower, prepared in conformity with GAAP, duly prepared by certified public accountants
of recognized standing selected by Borrower and reasonably approved by the Lender;

 

(ii)        within 45 days after the
end of each fiscal quarter, (a) a copy of an unaudited financial statement of Borrower prepared in the same manner as the report
referred to in paragraph (i) above, signed by the chief financial officer of Borrower and consisting of a balance sheet as at the
close of such fiscal quarter and statements of earnings, cash flow, income and source and application of funds for such fiscal
quarter and for the period from the beginning of such fiscal year to the close of such fiscal quarter, and (b) a duly completed
compliance certificate, dated the date of such financial statements and certified as true and correct by the chief executive officer
or chief financial officer of Borrower, stating that Borrower has not become aware of any Event of Default that has occurred and
is continuing or, if there is any such Event of Default describing it and the steps, if any, being taken to cure it;

 

(iii)       a duly completed compliance
certificate, dated the date of such financial statements and certified as true and correct by the chief executive officer and chief
financial officer of Borrower, stating that Borrower has not become aware of any Event of Default that has occurred and is continuing
or, if there is any such Event of Default describing it and the steps, if any, being taken to cure it;

 

(iv)       copies of any and all reports,
examinations, notices, warnings and citations issued by any governmental or quasi-governmental (whether federal, state or local),
unit, agency, body or entity with respect to Borrower that could have a Material Adverse Effect; and

 

(v)       such other information as
the Lender from time to time reasonably requests.

 

(b)         Books, Records and Inspections.
Borrower shall (i) maintain complete and accurate books and records; (ii) permit access by the Lender and its agents and/or representatives
to such books and records as they relate to this Agreement, the Securities, and/or the other Documents; and (iii) permit such persons,
upon two (2) days prior written notice, to inspect the properties, whether real or personal, and operations of Borrower.

 

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(c)         Insurance. Borrower
shall maintain such insurance as may be required by law and such other insurance to the extent and against such hazards and liabilities
as is customarily maintained by companies similarly situated. All property insurance policies shall, within 30 days following the
Closing Date, contain Lender loss payable clauses in form and substance reasonably satisfactory to the Lender, naming the Lender
as a Lender loss payee, mortgagee and/or additional insured, as its interest may appear, and providing that such policies and Lender
loss payable clauses may not be canceled, amended or terminated unless at least thirty (30) days (or ten (10) days in the case
of non-payment of premiums) prior written notice thereof has been given to the Lender. All insurance proceeds received by the Lender
may be retained by the Lender, in its sole discretion, for application to the payment of the Liabilities as the Lender may determine.

 

(d)         Taxes and Liabilities.
Borrower shall pay when due all material taxes, assessments and other liabilities except as contested in good faith and by appropriate
proceedings and for which adequate reserves in conformity with GAAP have been established.

 

(e)         Maintenance of Business;
Borrower Names. Borrower shall (i) keep all property and systems useful and necessary in its business in good working order
and condition, (ii) preserve its existence, rights and privileges in the jurisdiction of its organization or formation, as set
forth on the SEC Reports an 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 (iii) not operate in any business other than a business substantially the same as the
business as in effect on the date of this Agreement; provided, however, that it may change its jurisdiction of organization
or formation establishment upon thirty (30) days prior written notice to the Lender. Borrower shall give Lender thirty (30) days’
prior written notice before Borrower changes its name or does business under any other name.

 

(f)         Employee Benefit Plans,
Etc. Borrower shall (i) maintain each plan and/or each employee benefit plan as to which it may have any liability in substantial
compliance with all applicable requirements of law and regulations; (ii) make all payments and contributions required to be made
pursuant to such Plans and/or plans in a timely manner; and (iii) neither establish any new Plan and/or employee benefit plan,
agree or contribute to any Plan and/or multi-employer plan nor amend any existing Plan and/or employee pension benefit plan in
a manner which would increase its obligation to contribute to such Plan and/or plan.

 

(g)         Good Title. Borrower
shall at all times maintain good and marketable title to all of its assets necessary for the operation of its business.

 

(h)         Maintenance of Intellectual
Property Rights. The Borrower will take all reasonable action necessary or advisable to maintain all of the Intellectual Property
Rights of the Borrower that are necessary or material to the conduct of its business in full force and effect.

 

(i)         Locations. Borrower
shall give the Lender thirty (30) days prior written notice of a change in (i) its jurisdiction of organization or the location
of its Chief Executive Office or sole place of business or principal residence or (ii) its name.

 

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(j)         Securities Law Disclosure;
Publicity. (1) No later than 9:30 AM New York Time on the first Trading Day after the closing of the transactions contemplated
hereby, the Borrower shall issue a Current Report on Form 8-K (the “Current Report”) disclosing the material
terms of the transactions contemplated hereby, and including the Documents required to be included in such Current Report as exhibits
thereto, within the time required by the Exchange Act. From and after the issuance of the Current Report, the Borrower represents
to the Lender that the Borrower shall have publicly disclosed all material, non-public information delivered to the Lender, if
any, as of such time by the Borrower, or any of its respective officers, directors, employees or agents in connection with the
transactions contemplated by the Documents. The Borrower shall afford the Lender and its counsel with a reasonable opportunity
to review and comment upon, shall consult with the Lender and its counsel on the form and substance of, and shall give due consideration
to all such comments from the Lender and its counsel on, any press release, SEC filing or any other public disclosure made by or
on behalf of the Borrower relating to the Lender, the Documents and/or the transactions contemplated by any Document, prior to
the issuance, filing or public disclosure thereof, and the Borrower shall not issue, file or publicly disclose any such information
to which the Lender shall reasonably object, unless required by law. For the avoidance of doubt, the Borrower shall not be required
to submit for review any such disclosure contained in periodic reports filed with the SEC under the Exchange Act if it shall have
previously provided the same disclosure for review in connection with a previous filing.

 

(2)         The Borrower confirms that
neither it nor any other person acting on its behalf shall provide the Lender or their agents or counsel with any information that
constitutes or might constitute material, non-public information, unless a simultaneous public announcement thereof is made by
the Borrower in the manner contemplated by Regulation FD. In the event of a breach of the foregoing covenant by the Borrower or
any person acting on its behalf (as determined in the reasonable good faith judgment of the Lender), in addition to any other remedy
provided herein or in the other Transaction Documents, if the Lender is holding any securities of the Borrower at the time of the
disclosure of material, non-public information, the Lender shall have the right to make a public disclosure, in the form of a press
release, public advertisement or otherwise, of such material, non-public information without the prior approval by the Borrower;
provided such Lender shall have first provided notice to the Borrower that it believes it has received information that constitutes
material, non-public information, the Borrower shall have 48 hours publicly to disclose such material, non-public information prior
to any such disclosure by the Investor or demonstrate to the Lender in writing why such information does not constitute material,
non-public information, and (assuming the Lender and Lender’s counsel disagree with the Borrower’s determination) the
Borrower shall have failed to publicly disclose such material, non-public information within such time period. The Lender shall
not have any liability to the Borrower, any of its Subsidiaries, or any of their respective directors, officers, employees, stockholders
or agents, for any such disclosure. The Borrower understands and confirms that the Lender shall be relying on the foregoing covenants
and obligations in effecting transactions in securities of the Borrower.

 

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(k)         Notices. Borrower
shall, after receipt of knowledge thereof, give prompt written notice to the Lender of:

 

(i)         the occurrence of any Event
of Default or any event which with the passage of time or the giving of notice or both would become an Event of Default;

 

(ii)         any litigation, investigation
or proceeding which may exist at any time between Borrower and any governmental authority, that in either case, if not cured or
if adversely determined, as the case may be, could have a Material Adverse Effect;

 

(iii)         any litigation or proceeding
affecting Borrower (1) in which the amount involved is $50,000 or more, (2) in which injunctive and/or other equitable relief is
sought and/or (3) which relates to the Lender, any Document and/or any of the transactions contemplated by any Document;

 

(iv)         any Lien (other than security
interests created hereby or Permitted Liens) and/or any Indebtedness other than Indebtedness related to the Documents or Permitted
Indebtedness; and

 

(v)         Any matter, development and/or
event that has resulted or could reasonably be expected to result in a Material Adverse Effect, including any such matter arising
from: any breach or non-performance of, or any default, terms of default or event of default under the Documents, and/or any other
material agreements that the Borrower is a party to and/or any of its property is bound by;

 

Each notice pursuant to this Section
4.1(k) shall be accompanied by a statement of Borrower setting forth details of the occurrence referred to therein and stating
what action Borrower proposes to take with respect thereto.

 

(l)         Environmental Laws.
Borrower shall (i) comply in all material respects with, and endeavor to ensure compliance in all material respects by all tenants
and subtenants, if any, with, all applicable Environmental Laws, and obtain and comply in all material respects with and maintain,
and endeavor to ensure that all tenants and subtenants obtain and comply in all material respects with and maintain, any and all
licenses, approvals, notifications, registrations or permits required by applicable Environmental Laws, and (ii) conduct and complete
all investigations, studies, sampling and testing, and all remedial, removal and other actions required under Environmental Laws
and promptly comply in all material respects with all lawful orders and directives of all governmental authorities regarding Environmental
Laws.

 

(m)        Further Assurances.
Borrower shall, from time to time execute and deliver, or cause to be executed and delivered, such additional instruments, certificates
or documents, and take such actions, as the Lender may reasonably request for the purposes of implementing or effectuating the
provisions of this Agreement and the other Documents. Upon the exercise by the Lender of any power, right, privilege or remedy
pursuant to this Agreement or the other Documents which requires any consent, approval, recording, qualification or authorization
of any governmental authority, Borrower will execute and deliver, or will cause the execution and delivery of, all applications,
certifications, instruments and other documents and papers that the Lender may be required to obtain from Borrower for such governmental
consent, approval, recording, qualification or authorization.

 

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(n)         Reservation of Shares. 
So long as any Securities or other warrants owned by the Lender (and/or a transferee thereof), are owned beneficially and/or of
record by the Lender or any transferee thereof, the Borrower covenants and agrees that it will at all times reserve and keep available
out of its authorized and unissued shares of Common Stock a number of shares of Common Stock at least equal to (the “Required
Reserve Amount”) (i) 300%, multiplied by (ii) the Required Minimum (as defined below) for the sole purpose of issuance
upon conversion of the Notes, payment of interest on the Notes, and exercise of the Warrants and other warrants owned beneficially
and/or of record by the Lender (and/or any transferee thereof), free from preemptive rights or any other actual contingent purchase
rights of Persons other than the Lender (and any other holders of any Notes, Warrants and/or warrants transferred from a Lender),
The Borrower covenants that all shares of Common Stock that shall be so issuable shall, upon issue, be duly authorized, validly
issued, fully paid and nonassessable, and, at such times as a registration statement covering such shares is then effective under
the Securities Act, will be registered for public resale in accordance with such registration statement.  For purposes of
this Agreement, the “Required Minimum” shall mean the sum of (I) the quotient obtained by dividing the sum of
(A) (i) all outstanding Indebtedness represented
by the Notes, (ii) all interest thereon (whether accrued or not), (iii) the Stated Value of all H Shares then held by the Lender
plus all dividends and other amounts due thereon and (iv) and/or other amounts owed under the Documents and/or the RD SPA, including
Liabilities to the Lender from the Borrower (including but not limited to Late Fees, and liquidated damages),  by (B) the
lower of (i) the Conversion Price (as defined in the Notes) on the date of Closing, and (b) in the event that the average closing
bid price or closing sale price, as the case may be, immediately prior to Trading Day that any determination of the Required Reserve
Amount is calculated, the average closing bid price or sale price (as the case may be) for a share of Common Stock for the 5 consecutive
Trading Days immediately prior to the determination date is below the Conversion Price, the Alternative Conversion Price, plus
(II) the quotient of (A) the sum of all shares of Common Stock issuable upon exercise of all Warrants and RD Warrants owed by the
Lender or any transferee thereof, divided by (B) the lower of (i) the Exercise Price (as defined in the Warrants) of the Warrants
and the RD Warrant’s Exercise Price (as defined in the RD Warrants) on the Closing Date, and (ii) if the Exercise Price of
either the Warrants or the RD Warrants is below the average closing bid price or closing sale price, as the case may be, for a
Share of Common Stock on the Trading Market for the 5 consecutive Trading Days prior to the particular date of the determination,
the Alternative Conversion Price. The Borrower shall be required to calculate the Required Minimum on the first Trading Day of
each month that any Securities and/or warrants are outstanding and provide such calculation to the Lender and the Transfer Agent
promptly.  For purposes of calculating the Required Minimum, Borrower shall assume that all principal of all Notes will remain
outstanding for eighteen (18) months and all accrued but unpaid interest hereon accrues at the rate of 18% per annum, is paid on
the date 18 months from the Closing Date, and all Warrants (and RD Warrants) will remain unexercised for 5 years.

 

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4.2         Negative Covenants. Until
all the Liabilities are paid in full, Borrower covenants and agrees that:

 

(a)         Restricted Payments.
Except to the Lender, the Borrower shall 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, except for Permitted Indebtedness; provided, however, that
notwithstanding anything to the contrary provided herein or elsewhere, in no event shall the Borrower directly and/or indirectly
make any payment to any officer, director, or 5% or greater beneficial holder of the Borrower’s voting stock or Common Stock
or an affiliate of the Borrower and/or any affiliate of any such person representing the direct and/or indirect repayment of Indebtedness,
premiums and/or interest on Indebtedness, unpaid salaries, consulting fees, expenses, accrued but unpaid interest and/or otherwise,
except as set forth in Schedule 4.2(a).

 

(b)         Restricted Issuances.
Except to the Lender, the Borrower shall not, directly or indirectly, (i) issue any securities and/or Indebtedness (other than
as contemplated by this Agreement and/or the Documents) or (ii) issue any other securities that would cause a breach or default,
an event of default and/or an Event of Default under any Note and/or any other Document.

 

(c)         Restriction on Redemption
and Dividends. Except to the Lender, the Borrower shall not, directly or indirectly, redeem, repurchase or declare or pay any
dividend or distribution on any of its capital stock whether in cash, stock rights and/or property, except in connection with a
Qualified Public Offering or as set forth in the SEC Reports.

 

(d)         Restriction on Transfer
of Assets. The Borrower shall not, directly or indirectly, sell, lease, license, assign, transfer, spin-off, split-off, close,
convey or otherwise dispose of any assets or rights of the Borrower owned or hereafter acquired whether in a single transaction
or a series of related transactions, other than sales, leases, licenses, assignments, transfers, conveyances and other dispositions
of such assets or rights by the Borrower in the ordinary course of business; provided, however, that in the event that the Borrower
wishes to effect a transaction under this Section 4.2(d) it shall, prior to undertaking such effort, provide the Lender with a
high-level understanding of the objectives and ideal terms of such anticipation transaction. No fewer than four (4) trading days
prior to the execution of each of a binding term sheet and definitive documentation, the Borrower shall deliver to the Lender a
written notice of any material terms and/or changes since the prior notice given to the Borrower and shall include a term sheet
or similar document relating thereto as an attachment. Thereafter, upon receipt of draft execution copies of such definitive documentation,
the transaction shall be subject to the Lender’s consent, which consent will not be unreasonably withheld. The Borrower shall
file a Current Report on Form 8-K no later than 9:30am New York time on the next Trading Day following the execution of any such
documentation.

 

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(e)         Change in Nature of
Business. The Borrower shall not, directly or indirectly, engage in any business substantially different from the business
conducted by the Borrower on the Closing Date or any business substantially related or incidental thereto. The Borrower shall not,
directly or indirectly, modify its or their corporate structure for any purpose.

 

(f)         Indebtedness. Borrower
shall not incur or permit to exist any Indebtedness, except for Permitted Indebtedness.

 

(g)         Liens. Borrower
shall not create or permit to exist any Liens or security interest with respect to any assets whether now owned or hereafter acquired
and owned, except for Permitted Liens.

 

(h)         Guaranties, Loans or
Advances. Borrower shall not become or be a guarantor or surety of, or otherwise become or be responsible in any manner with
respect to any undertaking of any other Person, or make or permit to exist any loans or advances to or investments in any other
Person, except for the endorsement, in the ordinary course of collection, of instruments payable to it or to its order.

 

(i)         Violation of Law.
Borrower shall not violate any law, statute, ordinance, rule, regulation, judgment, decree, order, writ or injunction of any federal,
state or local authority, court, agency, bureau, board, commission, department or governmental body if such violation could have
a Material Adverse Effect.

 

(j)         Unconditional Purchase
Obligations. Borrower shall not enter into or be a party to any contract for the purchase of materials, supplies or other property
or services if such contract requires that payment be made by it regardless of whether or not delivery is ever made of such materials,
supplies or other property or services.

 

(k)         Use of Proceeds.
Borrower shall not permit any proceeds of the Loan to be used either directly or indirectly, for the purpose, whether immediate,
incidental or ultimate, of “purchasing or carrying any margin stock” within the meaning of Regulation U of the Board
of Governors of the Federal Reserve System, as amended from time to time.

 

(l)         Hedge Agreements.
Borrower shall not enter into any hedge agreement other than hedge agreements entered into in the ordinary course of business,
and not for speculative purposes, to protect against changes in interest rates or foreign exchange rates.

 

(m)         ERISA. Borrower
shall not create or become obligated under any Plan.

 

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(n)         No Variable Rate Transactions,
Etc. For as long as any Notes and/or Warrants remain outstanding, the Borrower shall not directly or indirectly (i)(I) consummate
any exchange of any Indebtedness and/or securities of the Borrower for any other securities and/or Indebtedness of the Borrower,
(II) cooperate with any person to effect any exchange of securities and/or Indebtedness of the Borrower in connection with a proposed
sale of such securities from an existing holder of such securities to a third party), and/or (III) reduce and/or otherwise change
the exercise price, conversion price and/or exchange price of any Common Stock Equivalent of the Borrower and/or amend any non-convertible
Indebtedness of the Borrower to make it convertible into securities of the Borrower, (ii) issue or sell any of its securities either
(I) at a conversion, exercise or exchange rate or price that is based upon and/or varies with the trading prices of, or quotations
for, the shares of Common Stock, and/or (II) with a conversion, exercise or exchange rate and/or price that is subject to being
reset on one or more occasions either (x) at some future date after the initial issuance of such securities or (y) upon the occurrence
of specified or contingent events directly or indirectly related to the business of the Borrower or the market for the Common Stock,
and/or (iii) enter into any agreement (including, without limitation, an “equity line of credit” or an “at-the-market
offering”) whereby the Borrower may sell securities at a future determined price. Any transaction contemplated in this Section
4.2(n), shall be referred to as a “Variable Rate Transaction.” The Lender shall be entitled to obtain injunctive
relief against the Borrower to preclude any Variable Rate Transaction (without the need for the posting of any bond or similar
item, which the Borrower hereby expressly and irrevocably waives the requirement for), which remedy shall be in addition to any
right of the Lender to collect damages.

 

(o)         Transactions with Affiliates.
The Borrower shall not directly and/or indirectly enter into, renew, extend or be a party to, any transaction or series of related
transactions (including, without limitation, lending funds to an Affiliate and/or borrowing funds from any Affiliate, the purchase,
sale, lease, transfer or exchange of property, securities or assets of any kind or the rendering of services of any kind) with
any officer, director, Affiliate and/or any Affiliate of such person.

 

(p)         Subsidiaries. The
Borrower will not, and will not permit any Subsidiary to, create or acquire any additional Subsidiary. The Borrower shall not,
and shall not permit any Subsidiary to, sell, assign or otherwise dispose of any Equity Interests in any Subsidiary to any Person.
Neither the Borrower nor any Subsidiary shall have any foreign Subsidiaries.

 

(q)         In partial consideration
for the Lender purchasing the Notes, the Borrower expressly and irrevocably agrees for itself and each of its Subsidiaries that
neither it nor any of its Subsidiaries will directly and/or indirectly at any time (i) waive any default and/or breach by the Seller
(as defined in the Repurchase Agreement dated on or about September 30, 2015 by and between the Company and the Seller (the “Repurchase
Agreement)) and/or any of its Affiliates of any provision of the Repurchase Agreement, (ii) immediately inform the Lender in writing
of any such breach and/or default by the Seller and/or its Affiliates of the Repurchase Agreement, and/or (iii) waive and/or otherwise
permit any action of the Seller and/or its Affiliates prohibited by the Repurchase Agreement.

 

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ARTICLE 5

CLOSING CONDITIONS

 

5.1         Closing Conditions of the Lender.
The Lender’s obligation to enter into the Documents and purchase the Note and Warrant is subject to the fulfillment of each
and every one of the following conditions prior to or contemporaneously with the Lender entering into the Documents and purchasing
the Note and Warrant (unless waived by Lender in writing in their sole and absolute discretion):

 

(a)         Delivery of Documents.
The Lender shall have received from the Borrower each of the following (together with all Exhibits, Schedules, annexes to each
of the following), in form and substance reasonably satisfactory to the Lender and its counsel, and where applicable, duly executed
and recorded (to the extent required):

 

(i)         certificates of the Chief
Executive Officer and Secretary of Borrower and certifying as to (a) copies of the Certificate of Incorporation and by-laws of
the Borrower, as restated or amended as of the date of this Agreement; (b) all actions taken and consents made by the Borrower
and its Board of Directors and shareholders, as applicable to authorize the transactions provided for or contemplated under this
Agreement and the other Documents and the execution, delivery and performance of the Documents; (c) the names of the directors
and officers of the Borrower authorized to sign the Documents, together with a sample of the true signature of each such Person
and (d) that all representatives and warranties of the Borrower made herein and/or in any of the other Documents are true and correct
in all respects;

 

(ii)         this Agreement;

 

(iii)       the Notes;

 

(iv)       the Warrants;

 

(v)        the Registration Right Agreement;

 

(vi)       the Security Agreement;

 

(vii)      the Intercreditor and Subordination
Agreement;

 

(viii)     the Patent and Trademark
Agreement

 

(ix)        the Leak-Out Agreement;

 

(x)        the Lock-Up Agreement:

 

(xi)       certificates of good standing
for Borrower and each Subsidiary in the jurisdiction of each of such Persons incorporation or formation, in the principal places
in which Borrower conducts business and in places in which each such Person owns real estate;

 

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(xii)       the
fully executed Transfer Agent Instruction Letter;

 

(xiii)      the
Discount Pay-Off Letter;

 

(xiv)      the
Perfection Certificate

 

(xv)       All
Lender UCC Documents with proof of filing thereof;

 

(xvi)      a
legal opinion of the Borrower’s corporate and securities counsel customarily given in connection with transactions of the
nature set forth in this Agreement and the other Documents and in form and substance reasonably satisfactory to the Lender;

 

(xvii)     Such
other documents, certificates, opinions, instruments and/or other items reasonable requested by the Lender and/or its legal counsel.

 

(b)          Approvals.
The receipt by the Lender of all governmental and third party approvals necessary in connection with the continuing operations
of Borrower, the execution and performance of the Documents and the transactions contemplated thereby, all of which consents/approvals
shall be in full force and effect.

 

(c)          Additional
Conditions. The fulfillment of each and every one of the following conditions prior to or contemporaneously with the making
of the Loan.

 

(i)          Representations
and Warranties. Each of the representations and warranties made by Borrower in or pursuant to the Documents and all Schedules
and/or Exhibits to this Agreement and/or any of the other Documents shall be true and correct in all material respects on and as
of the Closing Date as if made (or given) on and as of such date (except where such representation and warranty speaks of a specific
date in which case such representation and warranty shall be true and correct as of such date).

 

(ii)         No
Events of Default. No breach, event of default, Event of Default or any event which with the passage of time or the giving
of notice or both would become a breach event of default and/or an Event of Default shall have occurred or would result from the
sale of the Note to the Lenders of the performance of any other transaction set forth or contemplated by any of the Documents.

 

(iii)        Fees,
Etc. The Lender’s Expenses shall have been received by the Lender’s counsel.

 

(iv)        Compliance
with Laws. The Borrower shall have complied with all applicable federal, state and local governmental laws, rules, regulations
and ordinances in connection with the execution, delivery and performance of this Agreement and the other Documents to which it
is a party and the consummation of the transactions contemplated hereby and thereby, including, without limitation, the Borrower
shall have obtained all permits and qualifications required by any applicable state securities or “Blue Sky” laws for
the offer and sale of the Securities by the Borrower to the Lender).

 

    	 	32	 

     

    

 

(v)         No
Injunction. No statute, regulation, order, decree, writ, ruling or injunction shall have been enacted, entered, promulgated,
threatened in writing or endorsed by any court or governmental authority of competent jurisdiction which prohibits the consummation
of or which would materially modify or delay the execution and performance of the Documents and/or any of the transactions contemplated
by the Documents.

 

(vi)        No
Proceedings or Litigation. No action, suit or proceeding before any arbitrator or any court or governmental authority shall
have been commenced or threatened in writing, and no inquiry or investigation by any governmental authority shall have been commenced
or threatened in writing, against the Borrower, or any of the officers, directors or affiliates of the Borrower, seeking to restrain,
prevent or change the Documents and/or any of the transactions contemplated by the Documents, or seeking material damages in connection
with such Documents and/or transactions.

 

(vii)       Listing
of Securities. All of the Conversion Shares and Warrant Shares shall have been approved for listing or quotation on the Trading
Market as of the Closing Date, in each case, and as required, without regard to any limitations on exercise of the Warrants and/or
conversion of the Note including, but not limited to, Beneficial Ownership Limitations.

 

(viii)      No
Material Adverse Effect. No condition, occurrence, state of facts or event constituting a Material Adverse Effect shall have
occurred and be continuing.

 

(ix)         Current
Public Information. All reports, schedules, registrations, forms, statements, information and other documents required to have
been filed by the Borrower with the SEC since January 1, 2013, pursuant to the reporting requirements of the Exchange Act, including
all material required to have been filed pursuant to Section 13(a) or 15(d) of the Exchange Act, shall have been filed with the
SEC under the Exchange Act.

 

(x)          No
Suspension of Trading in or Notice of Delisting of Common Stock. Trading in the Common Stock shall not have been suspended
and/or halted by the SEC, the Principal Trading Market or FINRA. The Borrower shall not have received any final and non-appealable
notice that the listing or quotation of the Common Stock on the Principal Trading Market shall be terminated on a date certain
(unless, prior to such date certain, the Common Stock is listed or quoted on any other Principal Trading Market), trading in securities
generally as reported on the Principal Trading Market shall not have been suspended or limited, nor shall a banking moratorium
have been declared either by the U.S. or New York State authorities, there shall not have been imposed any suspension of electronic
trading or settlement services by the Depository Trust Company (“DTC”) with respect to the Common Stock that
is continuing, the Borrower 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 (unless, prior to such suspension,
DTC shall have notified the Borrower in writing that DTC has determined not to impose any such suspension), nor shall there have
occurred any material outbreak or escalation of hostilities or other national or international calamity or crisis that has had
or would reasonably be expected to have a material adverse change in any U.S. financial, credit or securities market that is continuing.

 

    	 	33	 

     

    

 

(xi)        Simultaneous
Transactions. All of the Simultaneous Transactions shall have occurred (or have been waived); and

 

(xii)       2015
Shareholder Meeting Conditions. The 2015 Shareholder Meeting Conditions have been satisfied in the sole discretion of the Lender.

 

(xiii)      Completion
of Due Diligence. Lender shall have completed its legal, business and financial due diligence of the Borrower to their full
satisfaction and are fully satisfied with the results thereof. 

 

(xiv)      Lock-Ups.
Each of the Persons set forth on Schedule 5.1 (c) (xiv) have signed a Lock-Up Agreement and provided executed copies to the
Lender.

 

(xv)       Leak-Out
Agreements. The Lender has entered into Leak-Up Agreements

 

(xvi)      Lender
UCC Documents. All Lender UCC Documents shall be in form and substantially satisfactory to the Lender and shall have been filed
with the Secretary of State.

 

5.2         Closing
Conditions of Borrower. The obligation of the Borrower to sell and issue the Note and the Warrant to the Lender at the Closing
is subject to the fulfillment, to the Borrower’s reasonable satisfaction, prior to or contemporary at the Closing, of each
of the following conditions (unless waived by the Borrower):

 

(a)          Representations
and Warranties. Each of the representations and warranties made by Borrower in or pursuant to the Documents and all Schedules
and/or Exhibits to this Agreement and/or any of the other Documents shall be true and correct in all material respects on and as
of the Closing Date as if made (or given) on and as of such date (except where such representation and warranty speaks of a specific
date in which case such representation and warranty shall be true and correct as of such date).

 

(b)          No
Injunction. No statute, regulation, order, decree, writ, ruling or injunction shall have been enacted, entered, promulgated,
threatened in writing or endorsed by any court or governmental authority of competent jurisdiction which prohibits the consummation
of or which would materially modify or delay any of the transactions contemplated by the Documents.

 

    	 	34	 

     

    

 

(c)          Receipt
of the Purchase Price. The Borrower shall receive at or substantially simultaneously with the Closing, the Purchase Price of
the Lender set forth on Schedule 1 hereto (less all of the Lender’s Expenses).

 

ARTICLE 6

MISCELLANEOUS

 

6.1           No
Waiver; Modifications In Writing. No failure or delay on the part of the Lender in exercising any right, power or remedy pursuant
to the Documents shall operate as a waiver thereof, nor shall any single or partial exercise of any such right, power or remedy
preclude any other or further exercise thereof, or the exercise of any other right, power or remedy. No amendment, modification,
supplement, termination or waiver of any provision of the Documents, nor any consent by the Lender to any departure by Borrower
therefrom, shall be effective unless the same shall be in writing and signed by the Lender. Any waiver of any provision of the
Documents and any consent by the Lender to any departure by Borrower from the terms of any provision of the Documents shall be
effective only in the specific instance and for the specific purpose for which given. No notice to or demand on Borrower in any
case shall entitle Borrower to any other or further notice or demand in similar or other circumstances.

 

6.2           Set-Off.
The Lender shall have the right to set-off, appropriate and apply toward payment of any of the Liabilities, in such order of application
as the Lender may from time to time and at any time elect, any cash, credit, deposits, accounts, securities and any other property
of Borrower which is in transit to or in the possession, custody or control of Lender, or any agent, bailee, or Affiliate of the
Lender. Borrower hereby grants to Lender a security interest in all such property.

 

6.3           Notices.
All notices required or permitted hereunder shall be in writing and shall be deemed effectively given: (a) upon personal delivery
to the party to be notified, (b) when sent by confirmed telex, facsimile or e-mail if sent during normal business hours of the
recipient; if not, then on the next Trading Day, (c) five (5) days after having been sent by registered or certified mail, return
receipt requested, postage prepaid, or (d) one (1) day after deposit with a nationally recognized overnight courier, specifying
next day delivery, with written verification of receipt:

 

If to Borrower:

 

Amarantus Bioscience Holdings, Inc.

655 Montgomery Street, Suite 900

San Francisco, CA 94111

Attn: Gerald Commissiong

Fax: (408) 852-4427

Telephone: (_) ___-____

Email:  ____________

 

    	 	35	 

     

    

 

With copies to

(which shall not constitute notice):

 

Sichenzia Ross Friedman Ference LLP

61 Broadway, 32nd Floor

New York, NY 10006

Attn: Jeffrey Fessler, Esq.

Fax: (212) 930-9725

 

If to Delafield:

 

Delafield Investments Limited

c/o Magna Group

5 Hanover Square

New York, NY 10004

Attention: Marc Manuel

Telephone Number: (347) 491-4240

Fax: (646) 737-9948

Email: research@mag.na

 

With copies to

(which shall not constitute notice):

 

Gusrae Kaplan Nusbaum PLLC

120 Wall Street

New York, New York 10005

Attention:  Lawrence G. Nusbaum, Esq.

Phone:  (212) 269-1400

Fax No.:  (212) 809-5449

Email: LNusbaum@gusraekaplan.com

 

Any party hereto may from time to time change its address for
notices by giving written notice of such changed address to the other party hereto.

 

6.4         Costs,
Expenses and Taxes. Notwithstanding anything to the contrary provided herein or elsewhere, Borrower agrees to pay (A) on the
Closing Date all of the Lender’s Expenses; and (B) following the Closing Date, all fees and expenses incurred by the Lender
(including, but not limited to, outside counsel to the Lender) in connection with the administration and enforcement of the Documents
and/or and the Loan. In addition, Borrower shall pay any and all stamp, transfer and other similar taxes payable or determined
to be payable in connection with the execution and delivery of the Documents agrees to hold the Lender harmless from and against
any and all liabilities with respect to or resulting from any delay in paying or omission to pay such taxes. If any suit or proceeding
arising from any of the foregoing is brought against the Lender, Borrower, to the extent and in the manner directed by Lender,
will resist and defend such suit or proceeding or cause the same to be resisted and defended by counsel approved by Lender. If
Borrower shall fail to do any act or thing which each has covenanted and/or agreed to do under this Agreement and/or any other
Document or any representation or warranty on the part of Borrower contained in this Agreement and/or any other Document shall
be breached, the Lender may, in its sole and absolute discretion, do the same or cause it to be done or remedy any such breach,
and may expend its funds for such purpose; and any and all amounts so expended by the Lender shall be repayable to the Lender by
Borrower immediately upon the Lender’s demand therefor, with interest at a rate equal to eighteen (18%) percent during the
period from and including the date funds are so expended by the Lender to the date of repayment in full, and any such amounts due
and owing to the Lender shall be deemed to be part of the Liabilities secured hereunder and under the other Documents. The obligations
of Borrower under this 6.4 shall survive the termination of this Agreement and the discharge of the other obligations of
Borrower under the Documents.

 

    	 	36	 

     

    

 

6.5           Indemnity,
Etc. In addition to the payment of expenses pursuant to 6.4, whether or not all and/or any of the transactions contemplated
hereby shall be consummated, Borrower agrees to indemnify, pay and hold the Lender, and the Lender’s assignees and affiliates
and their respective officers, directors, employees, agents, consultants, auditors, and attorneys of any of them (collectively
called the “Indemnities”) harmless from and against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, claims, costs, expenses and disbursements of any kind or nature whatsoever (including the reasonable
fees and disbursements of counsel for such Indemnitees in connection with any investigative, administrative or judicial proceeding
commenced or threatened, whether or not such Indemnitee shall be designated a party thereto) that may be imposed on, incurred by,
or asserted against that Indemnitee, in any manner relating to or arising out of the SEC Reports, this Agreement and/or the other
Documents, the consummation of the transactions contemplated by this Agreement and the other Documents, the statements contained
in any term sheet delivered by the Lender, the Lender’s agreement to make the Loan, the use or intended use of the proceeds
of the Loan or the exercise of any right or remedy hereunder or under the other Documents (the “Indemnified Liabilities”);
provided that Borrower shall have no obligation to an Indemnitee hereunder with respect to Indemnified Liabilities directly
resulting from the gross negligence or willful misconduct of that Indemnitee, as determined by a court of competent jurisdiction
by a final and nonappealable judgment. In no event shall the Lender and/or any of their respective employees, agents, partners,
affiliates, members, equity and/or debt holders, managers, officers, directors and/or other related or similar type of Person,
have any liability to the Borrower and/or any of its officers, directors, employees, agent, attorneys, affiliates, consultants,
equity and/or debt holders except for any actions or lack of actions of such persons that are found by a court of competent jurisdiction
after the time for all appeals has passed to have resulted directly from Lender’s intentional misconduct or gross negligence.

 

6.6           Counterparts;
Signatures. This Agreement may be executed in any number of counterparts, each of which counterparts, once they are executed
and delivered, shall be deemed to be an original and all of which counterparts, taken together, shall constitute but one and the
same agreement. This Agreement and the Documents may be executed by any party to this Agreement or any of the Documents by original
signature, facsimile and/or electronic signature.

 

6.7           Binding
Effects; Assignment. This Agreement shall be binding upon, and inure to the benefit of, the Lender, Borrower and their respective
successors, assigns, representatives and heirs. Borrower shall not assign any of its rights nor delegate any of its obligations
under Documents without the prior written consent of the Lender. The Lender may delegate any of its obligations under the Documents
without the prior written consent of Borrower, the Lender may assign any of its rights, hereunder, and/or in any of the other Documents,
subject only to compliance with the federal securities laws.

 

    	 	37	 

     

    

 

6.8           Headings.
Captions contained in this Agreement are inserted only as a matter of convenience and in no way define, limit or extend the scope
or intent of this Agreement or any provision of this Agreement and shall not affect the construction of this Agreement.

 

6.9           Entire
Agreement. This Agreement, together with the other Documents, contains the entire agreement between the parties hereto with
respect to the transactions contemplated herein and therein and supersedes all prior representations, agreements, covenants and
understandings, whether oral or written, related to the subject matter of this Agreement and the other Documents. The Lender makes
no covenants to Borrower, including, but not limited to, any commitments to provide any additional financing to Borrower.

 

6.10         GOVERNING
LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
AND INTERPRETED EXCLUSIVELY IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO ANY CONFLICT OF LAWS.

 

6.11         Severability
Of Provisions. Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective only to the extent of such prohibition or unenforceability without invalidating the remaining provisions of this
Agreement or affecting the validity or enforceability of such provision in any other jurisdiction.

 

6.12         Conflict.
In the event of any conflict between this Agreement and any of the other Documents, the terms and provisions of the Documents so
chosen by the Lender shall govern and control.

 

6.13         Customer
Identification - USA Patriot Act Notice; OFAC and Bank Secrecy Act. Lender hereby notifies Borrower that pursuant to the requirements
of the Act and such Lender’s policies and practices, Lender is required to obtain, verify and record certain information
and documentation that identifies Borrower, which information includes the name and addresses of Borrower and such other information
that will allow the Lender to identify Borrower in accordance with the Act. In addition, Borrower shall (a) ensure that no person
who owns a controlling interest in or otherwise controls Borrower is or shall be listed on the Specially Designated Nationals and
Blocked Person List or other similar lists maintained by OFAC, the Department of the Treasury or included in any Executive Orders,
(b) not use or permit the use of the proceeds of the Loan to violate any of the foreign asset control regulations of OFAC or any
enabling statute or Executive Order relating thereto, and (c) comply, and cause any of its Subsidiaries to comply, with all applicable
Bank Secrecy Act (“BSA”) laws and regulations, as amended.

 

    	 	38	 

     

    

 

6.14         JURISDICTION;
WAIVER. BORROWER ACKNOWLEDGES THAT THIS AGREEMENT IS BEING SIGNED BY THE LENDER IN PARTIAL CONSIDERATION OF THE LENDER’S
RIGHT TO ENFORCE IN THE JURISDICTION STATED BELOW THE TERMS AND PROVISION OF THIS AGREEMENT AND THE DOCUMENTS. BORROWER IRREVOCABLY
CONSENTS TO THE EXCLUSIVE AND SOLE JURISDICTION IN NEW YORK, NEW YORK AND VENUE IN ANY FEDERAL OR STATE COURT IN NEW YORK, NEW
YORK FOR SUCH PURPOSES AND WAIVES ANY AND ALL RIGHTS TO CONTEST SAID JURISDICTION AND VENUE AND ANY OBJECTION THAT NEW YORK, NEW
YORK IS NOT CONVENIENT. BORROWER WAIVES ANY RIGHTS TO COMMENCE ANY ACTION AGAINST THE LENDER IN ANY JURISDICTION EXCEPT NEW YORK,
NEW YORK. THE LENDER AND BORROWER HEREBY EACH EXPRESSLY WAIVE ANY AND ALL RIGHTS TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM BROUGHT BY ANY OF THE PARTIES AGAINST ANY OTHER PARTY WITH RESPECT TO ANY MATTER WHATSOEVER RELATING TO, ARISING OUT
OF OR IN ANY WAY CONNECTED WITH THE LOAN, THE DOCUMENTS AND/OR THE TRANSACTIONS WHICH ARE THE SUBJECT OF THE DOCUMENTS.

 

6.15         SERVICE
OF PROCESS. BORROWER AGREES THAT SERVICE OF PROCESS IN ANY ACTION OR PROCEEDING MAY BE EFFECTED BY MAILING A COPY THEREOF BY
CERTIFIED MAIL (OR ANY SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE PREPAID, RETURN RECEIPT REQUESTED, TO BORROWER AT THE ADDRESS
SET FORTH IN SECTION 6.3 OR AT SUCH OTHER ADDRESS OF WHICH THE LENDER SHALL HAVE BEEN NOTIFIED PURSUANT THERETO. BORROWER
AGREES THAT SUCH SERVICE, TO THE FULLEST EXTENT PERMITTED BY LAW (i) SHALL BE DEEMED IN EVERY RESPECT EFFECTIVE SERVICE OF PROCESS
UPON BORROWER IN ANY SUIT, ACTION OR PROCEEDING, AND (ii) SHALL BE TAKEN AND HELD TO BE VALID PERSONAL SERVICE UPON AND PERSONAL
DELIVERY TO BORROWER. SOLELY TO THE EXTENT PROVIDED BY APPLICABLE LAW, SHOULD BORROWER, AFTER BEING SERVED, FAIL TO APPEAR OR ANSWER
TO ANY SUMMONS, COMPLAINT, PROCESS OR PAPERS SO SERVED WITHIN THE NUMBER OF DAYS PRESCRIBED BY LAW AFTER THE DELIVERY OR MAILING
THEREOF, BORROWER SHALL BE DEEMED IN DEFAULT AND AN ORDER AND/OR JUDGMENT MAY BE ENTERED BY THE COURT AGAINST BORROWER AS DEMANDED
OR PRAYED FOR IN SUCH SUMMONS, COMPLAINT, PROCESS OR PAPERS. NOTHING HEREIN SHALL AFFECT THE LENDER’S RIGHT TO SERVE PROCESS
IN ANY OTHER MANNER PERMITTED BY LAW.

 

6.16         Survival.
The representations, and warranties of Borrower herein and/or in the other Documents shall survive the execution and delivery hereof
and the Closing Date; the obligations, Liabilities, agreements and covenants of the Borrower set forth herein and/or in the other
Documents shall survive the execution and delivery hereof and the Closing Date, as shall all rights and remedies of the Lender
set forth in this Agreement and/or in any of the other Documents.

 

6.17         No
Integration. Neither the Borrower, nor any of its affiliates, nor any person acting on behalf of the Borrower or such affiliate,
will sell, offer for sale, or solicit offers to buy or otherwise negotiate with respect to any security (as defined in the Securities
Act) which will be integrated with the sale and/or issuance of any of the Securities in a manner which would require the registration
of the Securities under the Securities Act, or require stockholder approval, under the rules and regulations of the Trading Market
for the Common Stock. The Borrower will take all action that is appropriate or necessary to assure that its offerings of other
securities will not be integrated for purposes of the Securities Act or the rules and regulations of the Trading Market, with the
issuance of Securities contemplated herein.

 

    	 	39	 

     

    

 

6.18         No
Frustration. From and after the date hereof and so long as the Note is outstanding, the Borrower, nor any of its respective
officers, employees, directors, agents or other representatives, will, without the prior written consent of the Lender (which consent
may be withheld, delayed or conditioned in the Lender’s sole discretion), effect, enter into, announce or recommend to its
stockholders any agreement, plan, arrangement or transaction (or issue, amend or waive any security) that would or would reasonably
be expected to restrict, delay, conflict with or impair the ability or right of the Borrower to timely perform its obligations
under the Documents.

 

6.19         Finders’
Fees. Each party represents that it neither is nor will be obligated for any finders’ fee or commission in connection
with this transaction, except as set forth herein. The Borrower shall indemnify and hold harmless the Lender from any liability
for any commission or compensation in the nature of a finders’ fee (and the costs and expenses of defending against such
liability or asserted liability) for which the Borrower or any of its officers, employees or representatives is responsible.

 

6.20         Rule
144 Availability; Public Information. At all times from the date hereof through and including the date none of the Securities
are outstanding (the “Required Period”) Borrower shall ensure the Lender can sell the Underlying Shares pursuant
to and in accordance with Rule 144 under the Securities Act. If, (i) at any time during the Required Period, the Borrower shall
fail for any reason to satisfy the current public information requirement under Rule 144(c) under the Securities Act (a “Public
Information Failure”), or (ii) the Borrower shall fail to take such action as is reasonably requested by the Lender to
enable the Lender to sell the any of the Securities pursuant to Rule 144 under the Securities Act (including, without limitation,
delivering all such legal opinions, consents, certificates, resolutions and instructions to the Borrower’s transfer agent
as may be reasonably requested from time to time by the Lender and otherwise fully cooperate with Lender and Lender’s broker
to effect such sale of the Securities pursuant to Rule 144 under the Securities Act) (a “Process Failure”) then,
in either case, in addition to the Lender’s other available remedies, the Borrower shall pay to the Lender, as liquidated
damages and not as a penalty, by reason of any such delay in or reduction of its ability to sell any Underlying Shares, an amount
in cash equal to five (5.0%) percent of the aggregate principal amount of the Notes held by a Lender on the day of a Public Information
Failure or Process Failure, as applicable, and on every thirtieth (30th) day (pro rated for periods totaling less than thirty days)
thereafter until (a) in the case of a Process Failure, the date such Process Failure is cured, or (b) in the case of a Public Information
Failure, the earlier of (1) the date such Public Information Failure is cured and (b) such time that such public information is
no longer required for the Lender to transfer the Securities pursuant to Rule 144 under the Securities Act. The payments to which
the Lender shall be entitled pursuant to this Section 6.20 are referred to herein as “Rule 144 Failure Payments”.
Rule 144 Failure Payments shall be paid on the earlier of (i) the last day of the calendar month during which such Rule 144 Failure
Payments are incurred and (ii) the third (3rd) Trading Day after the event or failure giving rise to the Rule 144 Failure Payments
is cured.

 

    	 	40	 

     

    

 

ARTICLE 7

REPRESENTATIONS AND WARRANTIES OF THE LENDER

 

7.1           Authorization.
The Lender has full power and authority to enter into this Agreement, to perform its obligations hereunder and to consummate the
transactions contemplated hereby and has taken all action necessary to authorize the execution and delivery of this Agreement,
the performance of its obligations hereunder and thereunder and the consummation of the transactions contemplated hereby and thereby.

 

7.2           Accredited
Investor Status; Investment Experience. The Lender is an “accredited investor” as that term is defined in Rule
501(a) of Regulation D.

 

7.3           Reliance
on Exemptions. The Lender understands that the Note is being offered and sold to it in reliance on specific exemptions from
the registration requirements of United States federal and state securities laws and that the Borrower is relying in part upon
the truth and accuracy of, and the Lender’s compliance with, the representations, warranties, agreements, acknowledgments
and understandings of the Lender set forth herein in order to determine the availability of such exemptions and the eligibility
of the Lender to acquire the Note.

 

7.4           Information.
The Lender has been furnished with all materials relating to the business, finances and operations of the Borrower and materials
relating to the offer and sale of the Note and Warrant which have been requested by the Lender. The Lender has been afforded the
opportunity to ask questions of the Borrower. Neither such inquiries nor any other due diligence investigations conducted by the
Lender shall modify, amend or affect the Lender’s right to rely on the Borrower’s representations and warranties contained
herein. The Lender understands that its investment in the Note and Warrant involves a high degree of risk. The Lender have sought
such accounting, legal and tax advice as it has considered necessary to make an informed investment decision with respect to their
acquisition of their respective Note and Warrant. The Lender is relying solely on their own accounting, legal and tax advisors,
and not on any statements of the Borrower or any of its agents or representatives, for such accounting, legal and tax advice with
respect to its acquisition of the Note and Warrant.

 

7.5           No
Governmental Review. The Lender 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 Note and Warrant or the fairness or suitability of the investment
in the Note and Warrant nor have such authorities passed upon or endorsed the merits of the offering of the Note and Warrant.

 

7.6           Validity;
Enforcement; No Conflicts. This Agreement and each Document to which the Lender are a party have been duly and validly authorized,
executed and delivered on behalf of the Lenders and shall constitute the legal, valid and binding obligations of the Lender enforceable
against the Lender in accordance with their respective terms, except as such enforceability may be limited by general principles
of equity or to applicable bankruptcy, insolvency, reorganization, moratorium, liquidation and other similar laws relating to,
or affecting generally, the enforcement of applicable creditors’ rights and remedies.

 

    	 	41	 

     

    

 

7.7           Organization
and Standing. The Lender is duly organized, validly existing and in good standing under the laws of the State of where it was
formed.

 

7.8           Brokers
or Finders. The Lender represents and warrants, to the best of their knowledge, that no finder, broker, agent, financial advisor
or other intermediary, nor any purchaser representative or any broker-dealer acting as a broker, are entitled to any compensation
in connection with the transactions contemplated by this Agreement or the transactions contemplated hereby.

 

7.9           Ability
to Perform. There are no actions, suits, proceedings or investigations pending against Lender or Lender’s assets before
any court or governmental agency (nor is there any threat thereof) which would impair in any way Lender’s ability to enter
into and fully perform their respective commitments and obligations under this Agreement or the transactions contemplated hereby.

 

7.10         Short
Positions.  The Lender covenants and agrees that, so long as the Lender owns any Securities of the Borrower, such Borrower,
shall not maintain a net short position in the Common Stock (as determined under Regulation SHO under the Exchange Act (“Regulation
SHO”) taking into account all positions of the Lender whether or not the Lender otherwise would constitute an independent
trading unit under Regulation SHO).

 

7.11         Transfer
or Resale.  Lender understands that except as provided in the Registration Rights Agreement:  (i) the Securities
have not been and are not being registered under the Securities Act or any state securities laws, and may not be offered for sale,
sold, assigned or transferred unless (A) subsequently registered thereunder, (B) the Lender shall have delivered to the
Borrower an opinion of counsel, in a form reasonably acceptable to the Borrower, 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) the Lender
provides the Borrower with reasonable assurance that such Securities can be sold, assigned or transferred pursuant to Rule 144
or Rule 144A promulgated under the Securities Act, as amended, (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) through whom the sale is made) may be deemed to be an underwriter (as that term is defined in the Securities
Act) may require compliance with some other exemption under the Securities Act or the rules and regulations of the SEC thereunder;
and (iii) except as otherwise provided in the Documents, neither the Borrower nor any other Person is under any obligation
to register the Securities under the Securities Act or any state securities laws or to comply with the terms and conditions of
any exemption thereunder.  Notwithstanding the foregoing, the Securities may be pledged in connection with a bona fide margin
account or other loan or financing arrangement secured by the Securities and such pledge of Securities shall not be deemed to be
a transfer, sale or assignment of the Securities hereunder, and the Lender in effecting a pledge of Securities shall not be required
to provide the Borrower with any notice thereof or otherwise make any delivery to the Borrower pursuant to this Agreement or any
other Document, including, without limitation, this Section 7.11.

 

    	 	42	 

     

    

 

7.12         Legends. 
Lender understands that the certificates or other instruments representing the Notes and the Warrants and, until such time as the
resale of the Conversion Shares and the Warrant Shares have been registered under the Securities Act, the stock certificates representing
the Conversion Shares and the Warrant Shares, except as set forth below, 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):

 

 [NEITHER THE
ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE [ CONVERTIBLE
] [ EXERCISABLE ] HAVE BEEN] [THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN] REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS.  THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED
OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL, IN A FORM REASONABLY ACCEPTABLE TO THE COMPANY, THAT REGISTRATION
IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT.  NOTWITHSTANDING
THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT
SECURED BY THE SECURITIES.

 

The legend set forth above shall be removed
and the Borrower shall issue a certificate without such legend to the holder of the Securities upon which it is stamped or issue
to such holder by electronic delivery at the applicable balance account at DTC, if, unless otherwise required by state securities
laws, (i) such Securities are registered for resale under the Securities Act, (ii) in connection with a sale, assignment
or other transfer, such holder provides the Borrower with an opinion of counsel, in a form reasonably acceptable to the Borrower,
to the effect that such sale, assignment or transfer of the Securities may be made without registration under the applicable requirements
of the Securities Act, or (iii) the Securities can be sold, assigned or transferred pursuant to Rule 144 or Rule 144A. 
The Borrower shall be responsible for the fees of its transfer agent and all DTC fees associated with such issuance.

 

[BALANCE OF PAGE
INTENTIONALLY LEFT BLANK; SIGNATURE PAGE FOLLOWS]

 

    	 	43	 

     

    

 

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

 

	LENDER:	DELAFIELD INVESTMENTS LIMITED
	 	 
	 	By:  	 	 
	 	Name:
	 	Title:
	 	 
	BORROWER:	AMARANTUS BIOSCIENCE HOLDINGS, INC.
	 	 
	 	By:  	 	 
	 	Name:
	 	Title:

 

SIGNATURE PAGE TO SECURITIES PURCHASE AGREEMENT

 

     

     

    

 

EXHIBIT A

 

Form of Note

 

     

     

    

 

EXHIBIT B

 

Form of Warrant

 

     

     

    

 

EXHIBIT C

 

Form of Registration
Rights Agreement

 

     

     

    

 

EXHIBIT D

 

Form of Transfer Agent Irrevocable
Instruction Letter

 

     

     

    

 

EXHIBIT E

 

Security Agreement

 

     

     

    

 

EXHIBIT F

 

Form of Intercreditor and Subordination
Agreement

 

     

     

    

 

EXHIBIT G

 

Form of Leak-Out Agreement

 

     

     

    

 

EXHIBIT H

 

Form of Lock-Up Agreement

 

     

     

    

 

EXHIBIT I

 

Lenders UCC Filings

 

     

     

    

 

EXHIBIT J

 

PERFECTION CERTIFICATE

 

     

     

    

 

EXHIBIT K

 

Patent and Trademark Security Agreement

 

     

     

    

 

EXHIBIT L

 

Copies of Pledged Securities and Agreement
Documents

 

     

     

    

 

EXHIBIT M

 

Pay-Off Letter 

 

     

     

    

 

EXHIBIT M

 

Pledge Documents 

 

     

     

    

 

Schedule 1

 

Purchase Price; Securities
Purchased

 

	Name of 
Lender	 	Purchase Price 
for Notes 
Being Purchased	 	 	Aggregate 
Principal Amount 
of Notes being 
Purchased	 	 	Number of Warrant Shares issuable 
upon exercise of Warrant Purchased	 
	1. Delafield Investments Limited	 	$	2,750,000	 	 	$	3,055,556	 	 	 	 	 

 

*The difference between the Purchase Price and the aggregate
principal amount of the Note represents an original issue discount of 10%.

 

     

     

    

 

Schedule 3.1 (a)

 

Subsidiaries of
the Company

 

     

     

    

 

Schedule 5.1 (c) (xiv)

 

List of Persons
and Securities Owned Who Are Required to enter into Lock-Up AgreementExhibit 10.4

 

EXECUTION VERSION

 

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

 

	Original Issue Date: September 30, 2015	Original Principal Amount: $3,055,556
	Note: 12% SSCPN-No - 1	 

 

 

12%
SENIOR SECURED CONVERTIBLE PROMISSORY NOTE

DUE
September 29, 2016

 

THIS 12% SENIOR SECURED
CONVERTIBLE PROMISSORY NOTE is one of a series of duly authorized and validly issued 12% Convertible Notes of Amarantus Bioscience
Holdings, Inc., a Nevada corporation, (the “Company”), having its principal place of business at 655 Montgomery
Street, Suite 900, San Francisco, California 94111, designated as its 12% Senior Secured Convertible Promissory Note due September
29, 2016 (this “Note”, or the “Note” and collectively with the other Notes of such series,
the “Notes”).

 

FOR VALUE RECEIVED,
the Company promises to pay to Delafield Investments Limited or its registered assigns (the “Holder”), or shall
have paid pursuant to the terms hereunder, the principal sum of $3,055,556 on September 29, 2016 (the “Maturity Date”)
or such earlier date as this Note is required or permitted to be repaid as provided hereunder, and to pay interest to the Holder
on the aggregate unconverted and then outstanding principal amount of this Note in accordance with the provisions hereof. This
Note is subject to the following additional provisions:

 

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

 

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

 

     

     

    

 

“Alternate
Conversion Price” means 60% of the lowest of traded price of a share of Common Stock in the thirty (30) consecutive Trading
Days prior to the Conversion Date.

 

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

 

“Base
Conversion Price” shall have the meaning set forth in Section 5(b).

 

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

 

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

 

“Change
of Control Transaction” means the occurrence after the date hereof of any of (a) an acquisition after the date hereof
by an individual or legal entity or “group” (as described in Rule 13d-5(b)(1) promulgated under the Exchange Act) of
effective control (whether through legal or beneficial ownership of capital stock of the Company, by contract or otherwise) of
in excess of 33% of the voting securities of the Company (other than by means of conversion or exercise of the Notes and the Securities
issued together with the Notes), (b) the Company merges into or consolidates with any other Person, or any Person merges into or
consolidates with the Company and, after giving effect to such transaction, the stockholders of the Company immediately prior to
such transaction own less than 66% of the aggregate voting power of the Company or the successor entity of such transaction, (c)
the Company sells or transfers all or substantially all of its assets to another Person and the stockholders of the Company immediately
prior to such transaction own less than 66% of the aggregate voting power of the acquiring entity immediately after the transaction,
(d) a replacement at one time or within a three year period of more than one-half of the members of the Board of Directors which
is not approved by a majority of those individuals who are members of the Board of Directors on the Original Issue Date (or by
those individuals who are serving as members of the Board of Directors on any date whose nomination to the Board of Directors was
approved by a majority of the members of the Board of Directors who are members on the date hereof), or (e) the execution by the
Company of an agreement to which the Company is a party or by which it is bound, providing for any of the events set forth in clauses
(a) through (d) above.

 

    	 	2	 

     

    

 

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

 

“Conversion”
shall have the meaning ascribed to such term in Section 4.

 

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

 

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

 

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

 

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

 

“Default
Redemption Amount” means the product of (i) 130% multiplied by (ii) the sum of (x) the aggregate principal amount outstanding
of this Note through and including the Default Redemption Date; (y) all accrued but unpaid principal due on this Note including,
but not limited to, as provided in the last sentence of Section 6 hereof, and (z) all other amounts owed under this Note including,
but not limited to, Late Fees and liquidated damages, all through and including the date all amounts herein are paid in cash to
the Holder.

 

“Dilutive
Issuance” shall have the meaning set forth in Section 5(b).

 

“Dilutive
Issuance Notice” shall have the meaning set forth in Section 5(b).

 

“DTC”
means the Depository Trust Company.

 

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

 

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

 

    	 	3	 

     

    

 

“Equity
Conditions” means, during the period in question, (a) no Event
of Default shall have occurred, (b) the Company has timely filed (or obtain extensions in respect thereof and file within
the applicable grace period) all reports other than Form 8-K reports required to be filed by the Company after the date hereof
pursuant to the Exchange Act, (c) on any date that the Company desires to make a payment of interest and/or principal, the average
daily dollar volume of the Common Stock for the previous twenty (20) consecutive trading days must be greater than $60,000, (d)
the shares of Common Stock must be DWAC Eligible and not subject to a “DTC Freeze,” or a “DTC chill” (or
other similar term), (e) the Conversion Shares are (i) neither “restricted shares” nor “control shares”
as defined pursuant to Rule 144 of the Securities Act, and (ii) may be sold (x) pursuant to Rule 144 without restriction and/or
volume limitation; or (y) pursuant to an effective registration statement (which in both cases the Equity Conditions set forth
in “(e)” shall be satisfied by the Company’s regular securities counsel providing a legal opinion that the statements
in e(i), e(ii)(x) (or, if applicable, e(ii)(y)) have been satisfied to the Holder which shall be delivered to the Holder each time
the Company is required to certify to the Holder that all of the Equity Conditions have been met), in both cases, however, sales
shall be limited pursuant to the Beneficial Ownership Limitations.

 

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

 

“Exempt
Issuance” means the issuance of (a) shares of Common Stock, options or other
equity awards (including, without limitation, restricted awards) to employees, officers or directors of the Company pursuant to
any stock or option plan duly adopted for such purpose, by a majority of the non-employee members of the Board of Directors or
a majority of the members of a committee of non-employee directors established for such purpose and subsequently ratified by the
Shareholders of the Company, (b) securities upon the exercise or exchange of or conversion of any Securities issued hereunder
and/or other securities exercisable or exchangeable for or convertible into shares of Common Stock issued and outstanding on the
date of this Agreement, provided that such securities have not been amended since June 1, 2015 to increase the number of such
securities or to decrease the exercise price, exchange price or conversion price of such securities, financings, commercial property
lease transactions or similar transactions, (c) securities issued to (or securities issued upon exercise conversion of exchange
of Common Stock Equivalents issued to any such persons), Delafield Investments Limited (“Delafield”),
and/or Dominion Holdings, LLC (“Dominion,”) or (d) strategic
transactions, which are approved by a majority of the disinterested directors of the Company, provided that any such issuance
shall only be to a Person (or to the equityholders of a Person) which is, itself or through its subsidiaries, an operating company
or an owner of an asset in a business synergistic with the business of the Company and shall provide to the Company additional
benefits in addition to the investment of funds, but shall not include a transaction in which the Company is issuing securities
primarily for the purpose of raising capital or to an entity whose primary business is investing in securities, and provided further
that the Holders shall have provided their consent.

 

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

 

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

 

    	 	4	 

     

    

 

“Mandatory
Default Amount” means the payment of 130% of the outstanding principal amount of this Note and accrued and unpaid interest
hereon, in addition to the payment of all other amounts, costs, expenses, late fees, and liquidated damages due in respect of this
Note.

 

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

 

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

 

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

 

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

 

“Purchase
Agreement” means the Securities Purchase Agreement, dated as of September 30, 2015 by and among the Company, the original
Holder, and the other parties named therein, if any, as amended, modified or supplemented from time to time in accordance with
its terms.

 

“Public
Offering” means any firm commitment underwritten public offering of gross proceeds of at least $4,000,000 of securities
of the Company pursuant to a registration statement on Form S-1 or Form S-3.

 

“Qualified
Public Offering” means (i) a firm commitment underwritten public offering of shares of Common Stock (and any other securities
of the Company that may be sold along with shares of Common Stock in any such underwritten firm commitment public offering including,
but not limited to, any Common Stock Equivalents), (ii) the gross proceeds resulting from such underwritten firm commitment public
offering equal or exceed, $9,000,000, and (iii) (x) the shares of Common Stock including, but not limited to, all Underlying Shares
have been approved for listing on one of the exchanges or markets set forth below in this definition of Qualified Public Offering,
and (y) on the next trading day following the date the SEC declares the registration statement registering under the Securities
Act the sale of the shares of Common Stock being sold to investors in such firm commitment underwritten public offering effective,
and any of securities of the Company being issued and/or sold in addition to shares of Common Stock by the Company therein including,
but not limited to, any Common Stock Equivalent (the “Qualified Offering Conversion Date”), the shares of Common
Stock commence trading on the New York Stock Exchange, NYSE MKT, the Nasdaq Global Market, the Nasdaq Global Select Market or the
Nasdaq Capital Market.

 

“Qualified
Public Offering Conversion Amount” means the product of (i) 130%, multiplied by (ii) the sum of (x) the aggregate principal
amount owed of this Note on and including the Qualified Public Offering Conversion Date, (y) all accrued but unpaid interest, and
(z) all liquated damages, Late Fees, and/or any other amounts owed to a Holder pursuant to this Note through and including the
Qualified Public Offering Conversion Date, including, but not limited to, premium payments, redemption payments and all other fees
and expenses owed to the Holder and/or its legal counsel or otherwise.

 

    	 	5	 

     

    

 

“Registration
Rights Agreement” means the Registration Rights Agreement, dated as of the date of the Purchase Agreement, by and among
the Company, the original Holders, and such other parties named therein in the form attached as an exhibit to the
Purchase Agreement.

 

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

 

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

 

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

 

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

 

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

 

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

 

    	 	6	 

     

    

 

Section 2.            Interest.

 

a)          Payment
of Interest in Cash or Kind. The Company shall pay interest to the Holder in an amount equal to the product of (i) 12% (which
interest rate may be increased as provided elsewhere herein), multiplied by (ii) (x) the Original Principal Amount, for the 12
month period beginning on the Original Issuance Date (the “Initial 12 Month Period”), and (y) the aggregate
principal amount of this Note outstanding on the first day following the last day (the “First Day of a New 12 Month Period”)
of the (I) Initial 12 Month Period, and (II) each succeeding 12 month anniversary date of the Original Issue Date (each a “New
12 Month Period”), provided any amount due under this Note is outstanding on the First Day of a New 12 Month Period.
Interest provided for in this Section 2(a), shall be guaranteed and deemed earned in full (i) on the first day following the Original
Issuance Date for the Initial 12 Month Period, and (ii) on the First Day of each New 12 Month Period for each New 12 Month Period.
All interest provided for in this Section (2)(a) shall be due and payable with respect to (x) the Initial 12 Month Period, on the
Maturity Date, and with respect to each New 12 Month Period, 30 days following the First Day of a New 12 Month Period (as applicable,
each a “Fixed Interest Payment Date”); provided, however, notwithstanding anything to the contrary
provided herein or elsewhere, interest due hereunder will be due and payable prior to the applicable Fixed Interest Payment Date,
upon any conversion, prepayment, Event of Default, and/or other acceleration of principal outstanding on this Note, with respect
to the interest relating to the principal so converted, prepaid and/or accelerated whether as a result of an Event of Default,
or otherwise. All interest payments hereunder will be payable in cash, or subject to satisfaction of all of the Equity Conditions,
in cash or Common Stock in the Company’s discretion. Interest paid in Common Stock will be at the lower of (i) the Conversion
Price, and (ii) at 65% of the average of the VWAPs for the 15 consecutive Trading Days ending on the Trading Day that is immediately
prior to such date of payment.

 

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

 

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

 

    	 	7	 

     

    

 

Section 3.            Registration
of Transfers and Exchanges.

 

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

 

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

 

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

 

Section 4.            Conversion.

 

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

 

    	 	8	 

     

    

 

(b)         Conversion
Price. The conversion price in effect on any Conversion Date shall be equal to the lowest of (i) $2.50, (ii) 75% of the lowest
daily VWAP in the fifteen (15) trading days prior to the Conversion Date, or (iii) (A) if a Public Offering that is not a Qualified
Public Offering has occurred, 75% or (B) if a Qualified Public Offering has occurred, 80% of the lowest of the (x) per share price
of shares of Common Stock, and (y) the lowest conversion price, exercise price or exchange price of any Common Stock Equivalents,
that are sold or issued to the public in the Public Offering or the Qualified Public Offering, respectively (the “Conversion
Price”). Notwithstanding anything herein to the contrary, at any time after the occurrence of any Event of Default the
Holder may require the Company to, at such Holder’s option and otherwise in accordance with the provisions for conversion
herein, convert all or any part of this Note into Common Stock at the Alternative Conversion Price. All such foregoing determinations
will be appropriately adjusted for any stock dividend, stock split, stock combination, reclassification or similar transaction
that proportionately decreases or increases the Common Stock during such measuring period. Nothing herein shall limit a Holder’s
right to pursue actual damages or declare an Event of Default pursuant to Section 6 hereof and the Holder shall have the right
to pursue all remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific performance
and/or injunctive relief. The exercise of any such rights shall not prohibit the Holder from seeking to enforce damages pursuant
to any other Section hereof or under applicable law.

 

c)          Mandatory
Conversion. Effective on the closing (the “Mandatory Conversion Date”) of a Qualified Public Offering, the
Qualified Public Offering Conversion Amount shall automatically (without further act or deed of the Holder or the Company) convert
(the “Mandatory Conversion”) into such number of shares of Common Stock as shall equal the quotient of (i) the
Qualified Public Offering Conversion Amount outstanding as of and including the Mandatory Conversion Date, divided by (ii) a conversion
price equal to the lowest of (i) the Conversion Price on the Mandatory Conversion Date, and (ii) eighty percent (80%) of the lowest
of (x) the price per share at which the Company sells shares of Common Stock, and (y) the lowest conversion price, exercise price
or exchange price of any Common Stock Equivalents, if any, sold and or issued to the public in a Qualified Public Offering, if
any, up to the Beneficial Ownership Limitation as set forth in Section 4(e). Notwithstanding anything to the contrary provided
herein or elsewhere, the conversion price of any portion this Note that the Holder is not able to convert into Conversion Shares
as a result of the Beneficial Ownership Limitation, shall following the Mandatory Conversion Date, be the Qualified Public Offering
Conversion Price. The Company shall cause notice of the Mandatory Conversion (the “Mandatory Conversion Notice”)
to be mailed to the Holder, at such Holder’s address, at least ten (10) days prior to the Mandatory Conversion Date. 
Notwithstanding the foregoing provisions of this Section 4(c), the Holder may convert any portion of this Note pursuant to Section
4(a) on or prior to the date immediately preceding the date of such Mandatory Conversion.

 

		d)	Mechanics of Conversion.

 

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

 

    	 	9	 

     

    

 

ii.          Delivery
of Certificate Upon Conversion. Not later than two (2) Trading Days after each Conversion Date (the “Share Delivery
Date”), the Company shall deliver, or cause to be delivered, to the Holder (A) a certificate or certificates representing
the Conversion Shares which, on or after the date on which if the resale of such Conversion Shares are covered by and are being
sold pursuant to an effective Registration Statement or such Conversion Shares are eligible to be sold under Rule 144 without the
need for current public information and the Company has received an opinion of counsel to such effect reasonably acceptable to
the Company (which opinion the Company will be responsible for obtaining at its own cost) shall be free of restrictive legends
and trading restrictions (other than those which may then be required by the Purchase Agreement) representing the number of Conversion
Shares being acquired or being sold, as the case may be, upon the conversion of this Note, and (B) a bank check in the amount of
accrued and unpaid interest (if the Company has elected to pay accrued interest in cash). All certificate or certificates required
to be delivered by the Company under this Section 4(d) shall be delivered electronically through DTC or another established clearing
corporation performing similar functions, unless the Company or its Transfer Agent does not have an account with DTC and/or is
not participating in the DTC Fast Automated Securities Transfer Program, then the Company shall issue and deliver to the address
as specified in such Conversion Notice, a certificate (or certificates), registered in the name of the Holder or its designee,
for the number of Conversion Shares to which the Holder shall be entitled. If the Conversion Shares are not being sold pursuant
to an effective Registration Statement or if the Conversion Date is prior to the date on which such Conversion Shares are eligible
to be sold under Rule 144 without the need for current public information, the Conversion Shares shall bear a restrictive legend
in the following form, as appropriate:

 

“NEITHER THE ISSUANCE
AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE HAVE
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS.  THE SECURITIES MAY
NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN
A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE
144A UNDER SAID ACT.  NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN
ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.”

 

    	 	10	 

     

    

 

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

 

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

 

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

 

    	 	11	 

     

    

 

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

 

    	 	12	 

     

    

 

vi.         Reservation
of Shares Issuable Upon Conversion. The Company covenants that it will at all times reserve and keep available out of its authorized
and unissued shares of Common Stock a number of shares of Common Stock at least equal to 300% of the Required Minimum for the sole
purpose of issuance upon conversion of this Note and payment of interest on this Note, each as herein provided, free from preemptive
rights or any other actual contingent purchase rights of Persons other than the Holder (and the other holders of the Notes), not
less than such aggregate number of shares of the Common Stock as shall (subject to the terms and conditions set forth in the Purchase
Agreement) be issuable (taking into account the adjustments and restrictions of Section 5, but ignoring any Beneficial Ownership
Limitations or other restrictions and/or limitations on conversions set forth herein or elsewhere) upon the conversion of the then
outstanding principal amount of this Note and payment of interest hereunder. The Company covenants that all shares of Common Stock
that shall be so issuable shall, upon issue, be duly authorized, validly issued, fully paid and nonassessable, and, at such times
as a Registration Statement covering such shares is then effective under the Securities Act, will be registered for public resale
in accordance with such Registration Statement. For purposes of this Note, the “Required Minimum” shall be defined
as all outstanding debt plus interest and any fees divided by the lower of (a)
the Conversion Price as on the date of Closing or, (b) in the event that the price of the Company’s Common Stock is below
the Conversion Price, the Alternate Conversion Price. The Company shall be required to calculate the Required Minimum on the first
trading day of each month that the Note is outstanding and provide such calculation to the Holder and the transfer agent promptly.
For purposes of calculating the Required Minimum, Company shall assume that all principal will remain outstanding for eighteen
(18) months and all accrued but unpaid interest hereon accrues at the rate of 18% per annum, is paid on the date 18 months from
the Original Issue Date and all amounts convert into shares of Common Stock at the Alternative Conversion Price.

 

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

 

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

 

    	 	13	 

     

    

 

e)          Holder’s
Conversion Limitations. The Company shall not effect any conversion of principal and/or interest of this Note, and a Holder
shall not have the right to convert any principal and/or interest of this Note, to the extent that after giving effect to the conversion
set forth on the applicable Notice of Conversion, the Holder (together with the Holder’s Affiliates, and any Persons acting
as a group together with the Holder or any of the Holder’s Affiliates) would beneficially own in excess of the Beneficial
Ownership Limitation (as defined below).  For purposes of the foregoing sentence, the number of shares of Common Stock beneficially
owned by the Holder and its Affiliates shall include the number of shares of Common Stock issuable upon conversion of this Note
with respect to which such determination is being made, but shall exclude the number of shares of Common Stock which are issuable
upon (i) conversion of the remaining, unconverted principal amount of this Note beneficially owned by the Holder or any of its
Affiliates and (ii) exercise or conversion of the unexercised or unconverted portion of any other securities of the Company subject
to a limitation on conversion or exercise analogous to the limitation contained herein (including, without limitation, any other
Notes) beneficially owned by the Holder or any of its Affiliates.  Except as set forth in the preceding sentence, for purposes
of this Section 4(e), beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act and the rules
and regulations promulgated thereunder. To the extent that the limitation contained in this Section 4(e) applies, the determination
of whether this Note is convertible (in relation to other securities owned by the Holder together with any Affiliates) and of which
principal amount of this Note is convertible shall be in the sole discretion of the Holder, and the submission of a Notice of Conversion
shall be deemed to be the Holder’s determination of whether this Note may be converted (in relation to other securities owned
by the Holder together with any Affiliates) and which principal amount of this Note is convertible, in each case subject to the
Beneficial Ownership Limitation. To ensure compliance with this restriction, the Holder will be deemed to represent to the Company
each time it delivers a Notice of Conversion that such Notice of Conversion has not violated the restrictions set forth in this
paragraph and the Company shall have no obligation to verify or confirm the accuracy of such determination. In
addition, a determination as to any group status as contemplated above shall be determined in accordance with Section 13(d) of
the Exchange Act and the rules and regulations promulgated thereunder.
For purposes of this Section 4(e), in determining the number of outstanding shares of Common Stock, the Holder may rely on the
number of outstanding shares of Common Stock as stated in the most recent of the following: (i) the Company’s most recent
periodic or annual report filed with the Commission, as the case may be, (ii) a more recent public announcement by the Company,
or (iii) a more recent written notice by the Company or the Company’s transfer agent setting forth the number of shares of
Common Stock outstanding.  Upon the written or oral request of a Holder, the Company shall within two Trading Days confirm
orally and in writing to the Holder the number of shares of Common Stock then outstanding.  In any case, the number of outstanding
shares of Common Stock shall be determined after giving effect to the conversion or exercise of securities of the Company, including
this Note, by the Holder or its Affiliates since the date as of which such number of outstanding shares of Common Stock was reported.
The “Beneficial Ownership Limitation” shall be 4.99% of the number of shares of the Common Stock outstanding
immediately after giving effect to the issuance of shares of Common Stock issuable upon conversion of this Note held by the Holder.
The Holder, upon not less than 61 days’ prior notice to the Company, may increase or decrease the Beneficial Ownership Limitation
provisions of this Section 4(e), provided that the Beneficial Ownership Limitation in no event exceeds 9.99% of the number of shares
of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock upon conversion of this
Note held by the Holder and the Beneficial Ownership Limitation provisions of this Section 4(e) shall continue to apply. Any such
increase or decrease will not be effective until the 61st day after such notice is delivered to the Company. 
The Beneficial Ownership Limitation provisions of this paragraph shall be
construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 4(e) to correct this paragraph
(or any portion hereof) which may be defective or inconsistent with the intended Beneficial Ownership Limitation contained herein
or to make changes or supplements necessary or desirable to properly give effect to such limitation.
The limitations contained in this paragraph shall apply to a successor holder of this Note.

 

    	 	14	 

     

    

 

Section 5.            Certain
Adjustments.

 

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

 

    	 	15	 

     

    

 

b)          Subsequent
Equity Sales. If, at any time while this Note is outstanding, the Company or any Subsidiary, as applicable, sells or grants
any option to purchase or sells or grants any right to reprice, or otherwise disposes of or issues (or announces any sale, grant
or any option to purchase or other disposition), any Common Stock or Common Stock Equivalents entitling any Person to acquire shares
of Common Stock at an effective price per share that is lower than the then Conversion Price (such lower price, the “Base
Conversion Price” and such issuances, collectively, a “Dilutive Issuance”) (if the holder of the Common
Stock or Common Stock Equivalents so issued shall at any time, whether by operation of purchase price adjustments, reset provisions,
floating conversion, exercise or exchange prices or otherwise, or due to warrants, options or rights per share which are issued
in connection with such issuance, be entitled to receive shares of Common Stock at an effective price per share that is lower than
the Conversion Price, such issuance shall be deemed to have occurred for less than the Conversion Price on such date of the Dilutive
Issuance), then the Conversion Price shall be reduced to equal the Base Conversion Price. Such adjustment shall be made whenever
such Common Stock or Common Stock Equivalents are issued. Notwithstanding the foregoing, no adjustment will be made under this
Section 5(b) in respect of an Exempt Issuance. The Company shall notify the Holder in writing, no later than the Trading Day following
the issuance of any Common Stock or Common Stock Equivalents subject to this Section 5(b), indicating therein the applicable issuance
price, or applicable reset price, exchange price, conversion price and other pricing terms (such notice, the “Dilutive
Issuance Notice”). For purposes of clarification, whether or not the Company provides a Dilutive Issuance Notice pursuant
to this Section 5(b), upon the occurrence of any Dilutive Issuance, the Holder is entitled to receive a number of Conversion Shares
based upon the Base Conversion Price on or after the date of such Dilutive Issuance, regardless of whether the Holder accurately
refers to the Base Conversion Price in the Notice of Conversion.

 

c)          Subsequent
Rights Offerings. In addition to any adjustments pursuant to Section 5(a) above, if at any time the Company grants, issues
or sells any Common Stock Equivalents or rights to purchase stock, warrants, securities or other property pro rata to the record
holders of any class of shares of Common Stock (the “Purchase Rights”), then the Holder will be entitled to
acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired
if the Holder had held the number of shares of Common Stock acquirable upon complete conversion of this Note (without regard to
any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the date
on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as
of which the record holders of shares of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights
(provided, however, to the extent that the Holder’s right to participate in any such Purchase Right would result in the Holder
exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Purchase Right to such
extent (or beneficial ownership of such shares of Common Stock as a result of such Purchase Right to such extent) and such Purchase
Right to such extent shall be held in abeyance for the Holder until such time, if ever, as its right thereto would not result in
the Holder exceeding the Beneficial Ownership Limitation).

 

d)          Intentionally
Omitted.

 

    	 	16	 

     

    

 

e)          Fundamental
Transaction. The Company shall not, directly or indirectly, in one or more related transactions, effect any merger or consolidation
of the Company and/or or any of its Subsidiaries with and/or into another Person, without the express written consent of 90% of
the then issued and outstanding principal amount of Notes (the “90% Amount”). If, subject to the Company obtaining
written consent of the 90% Amount, at any time while this Note is outstanding (i) the Company, directly or indirectly, in one or
more related transactions effects any merger or consolidation of the Company with or into another Person, (ii) the Company, directly
or indirectly, effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially
all of its assets in one or a series of related transactions, (iii) any, direct or indirect, purchase offer, tender offer or exchange
offer (whether by the Company or another Person) is completed pursuant to which holders of Common Stock are permitted to sell,
tender or exchange their shares for other securities, cash or property and has been accepted by the holders of 50% or more of the
outstanding Common Stock, (iv) the Company, directly or indirectly, in one or more related transactions effects any reclassification,
reorganization or recapitalization of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively
converted into or exchanged for other securities, cash or property, (v) the Company, directly or indirectly, in one or more related
transactions consummates a stock or share purchase agreement or other business combination (including, without limitation, a reorganization,
recapitalization, spin-off or scheme of arrangement) with another Person whereby such other Person acquires more than 50% of the
outstanding shares of Common Stock (not including any shares of Common Stock held by the other Person or other Persons making or
party to, or associated or affiliated with the other Persons making or party to, such stock or share purchase agreement or other
business combination) (each a “Fundamental Transaction”), then, upon any subsequent conversion of this Note,
the Holder shall have the right to receive, for each Conversion Share that would have been issuable upon such conversion immediately
prior to the occurrence of such Fundamental Transaction (without regard to any limitation in Section 4(e) on the conversion of
this Note), the number of shares of Common Stock of the successor or acquiring corporation or of the Company, if it is the surviving
corporation, and any additional consideration (the “Alternate Consideration”) receivable as a result of such
Fundamental Transaction by a holder of the number of shares of Common Stock for which this Note is convertible immediately prior
to such Fundamental Transaction (without regard to any limitation in Section 4(e) on the conversion of this Note). For purposes
of any such conversion, the determination of the Conversion Price shall be appropriately adjusted to apply to such Alternate Consideration
based on the amount of Alternate Consideration issuable in respect of one (1) share of Common Stock in such Fundamental Transaction,
and the Company shall apportion the Conversion Price among the Alternate Consideration in a reasonable manner reflecting the relative
value of any different components of the Alternate Consideration. If holders of Common Stock are given any choice as to the securities,
cash or property to be received in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate
Consideration it receives upon any conversion of this Note following such Fundamental Transaction. The Company shall cause any
successor entity in a Fundamental Transaction in which the Company is not the survivor (the “Successor Entity”)
to assume in writing all of the obligations of the Company under this Note and the other Transaction Documents (as defined in the
Purchase Agreement) in accordance with the provisions of this Section 5(e) pursuant to written agreements in form and substance
reasonably satisfactory to the Holder and approved by the Holder (without unreasonable delay) prior to such Fundamental Transaction
and shall, at the option of the holder of this Note, deliver to the Holder in exchange for this Note a security of the Successor
Entity evidenced by a written instrument substantially similar in form and substance to this Note which is convertible for a corresponding
number of shares of capital stock of such Successor Entity (or its parent entity) equivalent to the shares of Common Stock acquirable
and receivable upon conversion of this Note (without regard to any limitations on the conversion of this Note) prior to such Fundamental
Transaction, and with a conversion price which applies the conversion price hereunder to such shares of capital stock (but taking
into account the relative value of the shares of Common Stock pursuant to such Fundamental Transaction and the value of such shares
of capital stock, such number of shares of capital stock and such conversion price being for the purpose of protecting the economic
value of this Note immediately prior to the consummation of such Fundamental Transaction), and which is reasonably satisfactory
in form and substance to the Holder. Upon the occurrence of any such Fundamental Transaction, the Successor Entity shall succeed
to, and be substituted for (so that from and after the date of such Fundamental Transaction, the provisions of this Note and the
other Transaction Documents referring to the “Company” shall refer instead to the Successor Entity), and may exercise
every right and power of the Company and shall assume all of the obligations of the Company under this Note and the other Transaction
Documents with the same effect as if such Successor Entity had been named as the Company herein.

 

    	 	17	 

     

    

 

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

 

g)           Notice
to the Holder.

 

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

 

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

 

    	 	18	 

     

    

 

Section 6.            Events
of Default.

 

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

 

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

 

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

 

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

 

    	 	19	 

     

    

 

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

 

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

 

vi.         the
Company or any Subsidiary shall default on any of its obligations under any mortgage, credit agreement or other facility, indenture
agreement, factoring agreement or other instrument under which there may be issued, or by which there may be secured or evidenced,
any indebtedness for borrowed money or money due under any long term leasing or factoring arrangement that (a) involves an obligation
greater than $50,000, whether such indebtedness now exists or shall hereafter be created, and (b) results in such indebtedness
becoming or being declared due and payable prior to the date on which it would otherwise become due and payable;

 

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

 

viii.       the
Company shall be a party to any Change of Control Transaction or Fundamental Transaction or shall agree to sell or dispose of all
or a portion of its assets in one transaction or a series of related transactions, without the approval of the Holder or Holders
as provided in the Purchase Agreement (whether or not such sale would constitute a Change of Control Transaction);

 

ix.          the
Company does not meet the current public information requirements under Rule 144 in respect of the Registrable Securities (as defined
in the Registration Rights Agreement);

 

x.           if,
during the Effectiveness Period (as defined in the Registration Rights Agreement), either (a) the effectiveness of the Registration
Statement lapses for any reason or (b) the Holder shall not be permitted to resell any Registrable Securities (as defined in the
Registration Rights Agreement) under the Registration Statement for a period of more than 20 consecutive Trading Days or 30 non-consecutive
Trading Days during any 12 month period; provided, however, that if the Company is negotiating a merger, consolidation,
acquisition or sale of all or substantially all of its assets or a similar transaction and, in the written opinion of counsel to
the Company, the Registration Statement would be required to be amended to include information concerning such pending transaction(s)
or the parties thereto which information is not available or may not be publicly disclosed at the time, the Company shall be permitted
an additional 10 consecutive Trading Days during any 12 month period pursuant to this Section 6(a)(x);

 

    	 	20	 

     

    

 

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

 

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

 

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

 

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

 

xv.        the
occurrence of any levy upon or seizure or attachment of, or any uninsured loss of or damage to, any property of the Company or
any Subsidiary having an aggregate fair value or repair cost (as the case may be) in excess of $100,000 individually or in the
aggregate, and any such levy, seizure or attachment shall not be set aside, bonded or discharged within thirty (30) days after
the date thereof;

 

xvi.       the
Company shall fail to maintain sufficient reserved shares pursuant to Section 4.1(n) of the Purchase Agreement and/or there is
a Breach (as defined in the Letter Agreement) by the Company of the Letter Agreement;

 

xvii.      any
monetary judgment, writ or similar final process shall be entered or filed against the Company, any subsidiary or any of their
respective property or other assets for more than $50,000, and such judgment, writ or similar final process shall remain unvacated,
unbonded or unstayed for a period of 45 calendar days;

 

    	 	21	 

     

    

 

xviii.     the
Company, without the written consent of the Holders, shall enter into, create, incur, assume, guarantee or suffer to exist any
indebtedness for borrowed money of any kind, including but not limited to, a guarantee, on or with respect to any of its property
or assets now owned or hereafter acquired or any interest therein or any income or profits therefrom;

 

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

 

xx.         the
Company, without the written consent of the Holders, shall repay, repurchase or offer to repay, repurchase or otherwise acquire
of any shares of its Common Stock, Common Stock Equivalents or Junior Securities, other than as to the Conversion Shares or Warrant
Shares (as those terms are defined the in Certificate Of Designation of Preferences, Rights And Limitations of Series H 12% Convertible
Preferred Stock) as permitted or required under the Transaction Documents (as that term is defined in the Securities Purchase Agreement
of even date hereof);

 

xxi.        the
Company, without the written consent of the Holders, pays cash dividends or distributions on Junior Securities (as that term is
defined the in Certificate Of Designation of Preferences, Rights And Limitations of Series H 12% Convertible Preferred Stock) of
the Company;

 

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

 

    	 	22	 

     

    

 

b)          Remedies
Upon Event of Default. Subject to the Beneficial Ownership Limitation as set forth in Section 4(e), if any Event of Default
occurs, then the outstanding principal amount of this Note, plus accrued but unpaid interest, liquidated damages and other amounts
owing in respect thereof through the date of acceleration, shall become, at the Holder’s election, immediately due and payable
in cash at the Mandatory Default Amount. After the occurrence of any Event of Default that results in the eventual acceleration
of this Note, the interest rate on this Note shall accrue at an additional interest rate equal to the lesser of 2% per month (24%
per annum) or the maximum rate permitted under applicable law. Upon the payment in full of the Mandatory Default Amount, the Holder
shall promptly surrender this Note to or as directed by the Company. In connection with such acceleration described herein, the
Holder need not provide, and the Company hereby waives, any presentment, demand, protest or other notice of any kind, and the Holder
may immediately and without expiration of any grace period enforce any and all of its rights and remedies hereunder and all other
remedies available to it under applicable law. Such acceleration may be rescinded and annulled by Holder at any time prior to payment
hereunder and the Holder shall have all rights as a holder of the Note until such time, if any, as the Holder receives full payment
pursuant to this Section 6(b). No such rescission or annulment shall affect any subsequent Event of Default or impair any right
consequent thereon. Alternatively, at the election of the Holder, the Holder require the Company to redeem all of the Notes then
held by such Holder though the issuance to such Holder of such number of shares of Common Stock equal to the quotient of (x) the
Default Redemption Amount, divided by (y) the lowest of (1) the Conversion Price, (2) the Qualified Public Offering Conversion
Price and (3) 75% of the average of the 10 VWAPs immediately prior to the date of election hereunder, or (ii) increase the
dividend rate on all of the outstanding Notes held by such Holder retroactively to the initial Closing Date to 18% per annum
thereafter. The Default Redemption Amount, whether payable in cash or in shares, shall be due and payable or issuable, as the case
may be, within five (5) Trading Days of the date on which the notice for the payment therefor is provided by a Holder (the “Default
Redemption Payment Date”). If the Company fails to pay in full the Default Redemption Amount hereunder on the date such
amount is due in accordance with this Section (whether in cash or shares of Common Stock), the Company will pay interest thereon
at a rate equal to the lesser of 18% per annum or the maximum rate permitted by applicable law, accruing and compounding daily
from such date until the Default Redemption Amount, plus all such interest thereon, is paid in full.

 

Section 7.          Prepayment

 

At any time
upon five (5) days prior written notice to the Holder, but subject to the Holder’s conversion rights set forth herein, the
Company may prepay any portion of the principal amount of this Note, all accrued and unpaid interest relating to such prepaid portion
of the principal and all other amounts due under this Note. The written notice shall, among other items, state the date such Prepayment
Amount (as defined below) is to be paid to the Holder, which shall not in any event be later than 5 days from the date of mailing
of the prepayment notice to the Holder (“the Prepayment Date”). If the Company exercises its right to prepay
the Note, the Company shall make payment to the Holder of an amount in cash equal to the product of (i) the sum of (x) the then
outstanding principal amount of this Note, (y) all accrued but unpaid interest and (z) all other amounts owed pursuant to this
Note including, but not limited to, all Late Fees and liquidated damages (collectively the “Prepayment Amount”),
multiplied by (ii) (x) 120%, or (y) 130%, if a Qualified Public Offering has previously occurred. The Holder may continue to convert
the Note from the date notice of the prepayment is given until the date the Holder receives in full, the Prepayment Amount. If
the entire Prepayment Amount is not received by the Holder in immediately available funds by wire transfer pursuant to wire transfer
instructions provided to the Company by the Holder, on or before the Prepayment Date, such shall, (at the election of the Holder)
be an Event of Default of the payment of principal pursuant to Section 6(a)(1) hereof.

 

    	 	23	 

     

    

 

Section 8.            Miscellaneous.

 

a)          Notices.
Any and all notices or other communications or deliveries to be provided by the Holder hereunder, including, without limitation,
any Notice of Conversion, shall be in writing and delivered personally, by facsimile, or sent by a nationally recognized overnight
courier service, addressed to the Company, at 655 Montgomery Street, Suite 900, San Francisco, California 94111, or such other
facsimile number or address as the Company may specify for such purposes by notice to the Holder delivered in accordance with this
Section 8(a). Any and all notices or other communications or deliveries to be provided by the Company hereunder shall be in writing
and delivered personally, by facsimile, or sent by a nationally recognized overnight courier service addressed to each Holder at
the facsimile number or address of the Holder appearing on the books of the Company, or if no such facsimile number or address
appears on the books of the Company, at the principal place of business of such Holder, as set forth in the Purchase Agreement.
Any notice or other communication or deliveries hereunder shall be deemed given and effective on the earliest of (i) the date of
transmission, if such notice or communication is delivered via facsimile at the facsimile number set forth on the signature pages
attached hereto prior to 12:00 p.m. (New York City time) on any date, (ii) the next Trading Day after the date of transmission,
if such notice or communication is delivered via facsimile at the facsimile number set forth on the signature pages attached hereto
on a day that is not a Trading Day or later than 12:00 p.m. (New York City time) on any Trading Day, (iii) the second Trading Day
following the date of mailing, if sent by U.S. nationally recognized overnight courier service or (iv) upon actual receipt by the
party to whom such notice is required to be given.

 

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

 

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

 

d)          Governing
Law. All questions concerning the construction, validity, enforcement and interpretation of this Note shall be governed by
and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflict
of laws thereof. Each party agrees that all legal proceedings concerning the interpretation, enforcement and defense of the transactions
contemplated by any of the Transaction Documents (whether brought against a party hereto or its respective Affiliates, directors,
officers, shareholders, employees or agents) shall be commenced in the state and federal courts sitting in the City of New York,
Borough of Manhattan (the “New York Courts”). Each party hereto hereby irrevocably submits to the exclusive
jurisdiction of the New York Courts for the adjudication of any dispute hereunder or in connection herewith or with any transaction
contemplated hereby or discussed herein (including with respect to the enforcement of any of the Transaction Documents), and hereby
irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to
the jurisdiction of such New York Courts, or such New York Courts are improper or inconvenient venue for such proceeding. Each
party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding
by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the
address in effect for notices to it under this Note and agrees that such service shall constitute good and sufficient service of
process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other
manner permitted by applicable law. Each party hereto hereby irrevocably waives, to the fullest extent permitted by applicable
law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Note or the transactions contemplated
hereby. If any party shall commence an action or proceeding to enforce any provisions of this Note, then the prevailing party in
such action or proceeding shall be reimbursed by the other party for its attorneys fees and other costs and expenses incurred in
the investigation, preparation and prosecution of such action or proceeding.

 

    	 	24	 

     

    

 

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

 

f)           Severability.
If any provision of this Note is invalid, illegal or unenforceable, the balance of this Note shall remain in effect, and if any
provision is inapplicable to any Person or circumstance, it shall nevertheless remain applicable to all other Persons and circumstances.
If it shall be found that any interest or other amount deemed interest due hereunder violates the applicable law governing usury,
the applicable rate of interest due hereunder shall automatically be lowered to equal the maximum rate of interest permitted under
applicable law. The Company covenants (to the extent that it may lawfully do so) that it shall not at any time insist upon, plead,
or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury law or other law which would
prohibit or forgive the Company from paying all or any portion of the principal of or interest on this Note as contemplated herein,
wherever enacted, now or at any time hereafter in force, or which may affect the covenants or the performance of this Note, and
the Company (to the extent it may lawfully do so) hereby expressly waives all benefits or advantage of any such law, and covenants
that it will not, by resort to any such law, hinder, delay or impede the execution of any power herein granted to the Holder, but
will suffer and permit the execution of every such as though no such law has been enacted.

 

    	 	25	 

     

    

 

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

 

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

 

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

 

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

 

(Signature Pages Follow)

 

    	 	26	 

     

    

 

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

 

	 	Amarantus Bioscience Holdings, Inc.
	 	 	 	 
	 	By:	 	 
	 	 	Name:	 
	 	 	Title:	 
	 	Facsimile No. for delivery of Notices: 	 

 

    	 	27	 

     

    

 

ANNEX A

 

NOTICE OF CONVERSION

 

The undersigned hereby
elects to convert principal, accrued but unpaid interest and/or any of amounts due under the 12% Senior Secured Convertible Promissory
Note due September 29, 2016 of Amarantus Bioscience Holdings, Inc., a Nevada corporation (the “Company”), into
shares of common stock (the “Common Stock”), of the Company according to the conditions hereof, as of the date
written below. If shares of Common Stock are to be issued in the name of a person other than the undersigned, the undersigned will
pay all transfer taxes payable with respect thereto and is delivering herewith such certificates and opinions as reasonably requested
by the Company in accordance therewith. No fee will be charged to the holder for any conversion, except for such transfer taxes,
if any.

 

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

 

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

 

Conversion calculations:

 

	 	Date
    to Effect Conversion:	 

 

	 	Principal
    Amount of Note to be Converted:	 

 

	 	Payment
    of Interest in Common Stock __ yes __ no
	 	If
    yes, $_____ of Interest Accrued on Account of Conversion at Issue.

 

	 	Other
    Amounts Owed Under this Note to be Converted
	 	including
    Late Fees:	 

 

	 	Number
    of shares of Common Stock to be issued:	 

 

	 	Signature:	 
	 	 	 
	 	Name:	 

 

	 	Delivery
    Instructions:	 

 

    	 	28	 

     

    

 

Schedule 1

 

CONVERSION SCHEDULE

 

This 12% Senior Secured Convertible Promissory
Note due on September 29, 2016 in the original principal amount of $3,055,556 is issued by Amarantus Bioscience Holdings, Inc.,
a Nevada corporation. This Conversion Schedule reflects conversions made under Section 4 of the above referenced Note.

 

Dated:

 

	Date of Conversion

(or for first entry,

Original Issue Date)	 	Amount of

Conversion	 	Aggregate

Principal

Amount

Remaining

Subsequent to

Conversion

(or original

Principal

Amount)	 	Company Attest
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 

 

    	 	29

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